SHANGHAI, Feb. 21,
2024 /PRNewswire/ -- The9 Limited (Nasdaq: NCTY)
("The9"), an established Internet company, today announced that it
signed a legally binding term sheet (the "Term Sheet") with
Zhejiang Fazhidao Information Technology Co., Ltd. ("Fazhidao") to
purchase 19% shares of Fazhidao by cash and issuance of The9's
restricted shares. The9 is also granted a purchase option to
purchase up to 51% of the total shares of Fazhidao, based on a
valuation calculated as 7 times of Fazhidao's audited annual profit
after tax, provided that such valuation should be higher than a
pre-agreed valuation.
Established in 2019, Fazhidao owns and operates 365LAWHELP.COM
and mobile app FaBaoWang, a leading artificial intelligence (AI)
Software as a service (SaaS) legal service platform in China. It has more than 120,000 cumulative
paid subscribers from large companies to micro companies and
individuals. The gross sales were over US$50
million in 2023. 365LAWHELP.COM has provided more than 100
million times services to customers cumulatively. It has created
large-scale AI legal models based on 13 billion model parameters,
collecting historical legal service interactive data with the
dynamic growth of more than 100,000 new consultation conversations
data used for machine learning every day. Daily service data feeds
back to the large-scale AI legal model at the same time,
continuously improving the service quality.
365LAWHELP.COM develops AI legal Generative Pre-trained
Transformer (Gpt) which provides the legal advice that complies
with the laws and regulations based the platform's real-time data.
Based on database cases and AI model calculations, precaution
measures and potential solutions are provided. Also future event
development is predicted for customers to plan in advance develop
forecasts and feasibility plans. The platform also provides the
highest level of confidentiality for all customers' information.
The services offered include professional online legal
consultation, one-stop enterprise-specific compliance services, tax
consulting services, contract customization and review, electronic
signatures, contract template download, legal letter submission,
litigation document drafting and risk management and control
solutions for enterprises' modules including human resources,
finance, administration and intellectual property.
Pursuant to the Term Sheet, The9 will pay cash consideration of
US$1 million and will issue
restricted Class A ordinary shares to Fazhidao with the value of
US$14.2 million. The value of each
share will be determined by the average closing price of The9 ADS
20 trading days prior to the signing of the definitive agreement. A
portion of restricted shares will be released from lock-up when the
market capitalization of The9 will reach US$200 million, US$500
million and US$1 billion
respectively. The rest of the restricted shares shall be released
from the lock-up when either of the following conditions are met:
Fazhidao completes a qualified IPO and its shares owned by The9
become freely tradable in the open market; or if and when the The9
exercises its purchase option and, as a result, holds a minimum 51%
of the then total share capital of Fazhidao. Fazhidao may undergo
certain restructuring to facilitate these conditions.
"We are the leading AI SaaS legal service platform in
China. We are the pioneer in
this industry to use AI and industry big data to address the legal
needs for enterprises effectively and efficiently. With the storage
of substantial volume of industry data and by leveraging AI legal
models to support its legal technology services, our AI platform
has becoming more and more powerful to provide our customers with
convenient and professional services. Our proprietary AI SaaS legal
technology has already obtained 52 Software invention patents,
copyrights and trademarks in China. There are more than 50
million companies in China. Majority of these are micro companies
without in-house legal counsel. In 2023, the legal service market
in China was approximately US$40 billion. There is a big room for
us to increase our paid subscribers in China to 1 million in 3
years. The legal service market in the U.S. is even much bigger,
being approximately US$300 billion in 2023. We observed there are
several AI legal platforms in the U.S. with shorter history than us
and doing very well in the U.S. With the investment from The9, we
are going to strengthen our proprietary development ability and we
are confident to safeguard our leading position in China and seek
for global expansion in future. Our vision is to use AI legal
technology to serve the billion individual and corporate markets in
China and the U.S. through continued and focused AI legal
technology improvement, and to deliver efficient, professional and
affordable AI legal solutions. Everyone will no longer have legal
troubles," said Mr. Junkai Li, founder and CEO of Fazhidao.
"We believe AI technology and application will bring
revolutionary changes to almost every industry in the World.
Therefore huge market opportunities will be created for many
industries. This investment is part of The9's overall strategy
to start with AI application business, including integrating AI
technology into our business, partnering with other AI companies
and investing and acquiring innovators who have developed their own
AI applications," said Mr. George
Lai, CFO and Director of The9.
Safe Harbor Statement
This current report contains forward-looking statements. These
statements are made under the "safe harbor" provisions of the
United States Private Securities Litigation Reform Act of 1995.
These forward-looking statements can be identified by terminology
such as "will," "expects," "anticipates," "future," "intends,"
"plans," "believes," "estimates" and similar statements. Such
statements are based upon management's current expectations and
current market and operating conditions and relate to events that
involve known or unknown risks, uncertainties and other factors,
all of which are difficult to predict and many of which are beyond
The9's control. The9 may also make written or oral forward-looking
statements in its periodic reports to the U.S. Securities and
Exchange Commission ("SEC"), in its annual report to shareholders,
in press releases and other written materials and in oral
statements made by its officers, directors or employees to third
parties. Statements that are not historical facts, including
statements about The9's beliefs and expectations, are
forward-looking statements. Forward-looking statements involve
inherent risks and uncertainties. A number of factors could cause
actual results to differ materially from those contained in any
forward-looking statement, including but not limited to the
following: The9's goal and strategies; The9's expansion plans;
The9's future business development, financial condition and results
of operations; The9's expectations regarding demand for, and market
acceptance of, its products and services; The9's expectations
regarding keeping and strengthening its relationships with business
partners it collaborates with; general economic and business
conditions; and assumptions underlying or related to any of the
foregoing. Further information regarding these and other risks is
included in The9's filings with the SEC. All information provided
in this current report is as of the date hereof, and The9 does not
undertake any obligation to update any forward-looking statement,
except as required under applicable law.
The9 Limited
17 Floor,
No. 130, Wu Song Road,
Hong Kou District,
Shanghai 200080, PRC
About The9 Limited
The9 Limited (The9) is an Internet company listed on Nasdaq in
2004. The9 aims to become a global diversified high-tech Internet
company, and is engaged in blockchain business including the
operation of cryptocurrency mining. The9 is also
stepping into AI application business in different industries.
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SOURCE The9 Limited