Exhibit 99.1
The9 Limited Announces Unaudited Financial Information
as of and for the Six Months Ended December 31, 2019
The9 Limited (the “Company”) hereby announces its unaudited consolidated statement of income for the six months ended December 31, 2019 and its unaudited consolidated balance sheet as of December 31, 2019.
THE9 LIMITED | ||||||||||||||||
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME INFORMATION | ||||||||||||||||
(Expressed in Renminbi - RMB and US Dollars - US$, except share data) | ||||||||||||||||
Six months ended June 30, | Six months ended December 31, | |||||||||||||||
2019 | 2018 | 2019 | 2019 | |||||||||||||
RMB (unaudited) | RMB (unaudited) | RMB (unaudited) | US$ (Note) | |||||||||||||
Revenues: | ||||||||||||||||
Online game services | 263,579 | 6,602,920 | 39,998 | 5,745 | ||||||||||||
Other revenues | - | 398,058 | 39,500 | 5,674 | ||||||||||||
263,579 | 7,000,978 | 79,498 | 11,419 | |||||||||||||
Sales taxes | (12,252 | ) | (29,206 | ) | 10,670 | 1,533 | ||||||||||
Total net revenues | 251,327 | 6,971,772 | 90,168 | 12,952 | ||||||||||||
Cost of revenues | (115,060 | ) | (8,070,890 | ) | (1,227,206 | ) | (176,277 | ) | ||||||||
Gross profit (loss) | 136,267 | (1,099,118 | ) | (1,137,038 | ) | (163,325 | ) | |||||||||
Operating (expenses) income: | ||||||||||||||||
Product development | (8,658,009 | ) | (12,383,432 | ) | (4,432,521 | ) | (636,692 | ) | ||||||||
Sales and marketing | (852,176 | ) | (809,751 | ) | (1,262,343 | ) | (181,324 | ) | ||||||||
General and administrative | (33,479,081 | ) | (61,566,994 | ) | (80,387,919 | ) | (11,547,002 | ) | ||||||||
Impairment on other long-lived assets | - | - | (34,881,000 | ) | (5,010,342 | ) | ||||||||||
Gain on disposal of subsidiaries | 1,235,874 | 197,456 | (28,949 | ) | (4,158 | ) | ||||||||||
Total operating expenses | (41,753,392 | ) | (74,562,721 | ) | (120,992,732 | ) | (17,379,518 | ) | ||||||||
Other operating income, net | 22,680 | 117,008 | 7,560 | 1,086 | ||||||||||||
Loss from operations | (41,594,445 | ) | (75,544,831 | ) | (122,122,210 | ) | (17,541,757 | ) | ||||||||
Impairment on equity investments and available-for-sale investments | - | (1,386,174 | ) | (4,666,128 | ) | (670,247 | ) | |||||||||
Impairment on other investments | - | (7,776,157 | ) | (3,791,039 | ) | (544,549 | ) | |||||||||
Impairment on other advances | - | - | (5,980,788 | ) | (859,086 | ) | ||||||||||
Interest (expenses) income, net | (17,193,207 | ) | (53,472,220 | ) | (17,289,773 | ) | (2,483,520 | ) | ||||||||
Gain on disposal of equity investee and available-for-sale investment | 694,628 | - | - | - | ||||||||||||
Gain on disposal of other investments | 3,000,000 | - | 10,430,588 | 1,498,260 | ||||||||||||
Fair value change on warrants liability | (964,594 | ) | (667,617 | ) | 2,256,838 | 324,174 | ||||||||||
Foreign exchange gain (loss) | 2,259,149 | (13,706,421 | ) | (7,733,151 | ) | (1,110,798 | ) | |||||||||
Other income, net | 5,581,578 | 1,150,481 | 3,791,074 | 544,554 | ||||||||||||
Loss before income tax expense and share of loss in equity method investments | (48,216,891 | ) | (151,402,939 | ) | (145,104,589 | ) | (20,842,969 | ) | ||||||||
Income tax benefit | - | - | - | - | ||||||||||||
Share of loss in equity method investments | (1,824,878 | ) | (2,665,646 | ) | (1,022,382 | ) | (146,856 | ) | ||||||||
Net loss for the period | (50,041,769 | ) | (154,068,585 | ) | (146,126,971 | ) | (20,989,825 | ) | ||||||||
Net loss attributable to noncontrolling interest | (7,030,290 | ) | (8,812,728 | ) | (6,487,693 | ) | (931,899 | ) | ||||||||
Net loss attributable to redeemable noncontrolling interest | (2,525,192 | ) | (3,157,709 | ) | (2,330,397 | ) | (334,741 | ) | ||||||||
Net loss attributable to The9 Limited | (40,486,287 | ) | (142,098,148 | ) | (137,308,881 | ) | (19,723,185 | ) | ||||||||
Change in redemption value of redeemable noncontrollling interest | (10,497,201 | ) | (18,005,020 | ) | (2,330,397 | ) | (334,741 | ) | ||||||||
Net loss attributable to holders of ordinary shares | (50,983,488 | ) | (160,103,168 | ) | (139,639,278 | ) | (20,057,926 | ) | ||||||||
Other comprehensive loss,net of tax: | ||||||||||||||||
Currency translation adjustments | (2,642,951 | ) | (1,012,104 | ) | 1,849,420 | 265,653 | ||||||||||
Total comprehensive loss | (52,684,720 | ) | (155,080,689 | ) | (144,277,551 | ) | (20,724,172 | ) | ||||||||
Comprehensive loss attributable to: | ||||||||||||||||
Noncontrolling interest | (9,063,344 | ) | (20,317,842 | ) | (10,674,774 | ) | (1,533,335 | ) | ||||||||
Redeemable noncontrolling interest | (2,525,192 | ) | (3,157,709 | ) | (2,330,397 | ) | (334,741 | ) | ||||||||
The9 Limited | (41,096,184 | ) | (131,605,138 | ) | (131,272,380 | ) | (18,856,098 | ) | ||||||||
Net loss attributable to holders of ordinary shares per share | ||||||||||||||||
- Basic | (0.60 | ) | (2.58 | ) | (1.31 | ) | (0.19 | ) | ||||||||
- Diluted | (0.60 | ) | (2.58 | ) | (1.31 | ) | (0.19 | ) | ||||||||
Weighted average number of shares outstanding | ||||||||||||||||
- Basic | 84,283,464 | 62,114,760 | 106,407,008 | 106,407,008 | ||||||||||||
- Diluted | 84,283,464 | 62,114,760 | 106,407,008 | 106,407,008 |
Note: The United States dollar (“US dollar” or “US$”) amounts disclosed in the accompanying financial statements are presented solely for the convenience of the readers at the rate of US$1.00 = RMB6.9618, representing the noon buying rate on the last trading day of December 2019(December 31, 2019) as set forth in the H.10 statistical release of the U.S. Federal Reserve Board.
THE9 LIMITED | ||||||||||||
UNAUDITED CONSOLIDATED BALANCE SHEETS INFORMATION | ||||||||||||
(Expressed in Renminbi - RMB and US Dollars - US$) | ||||||||||||
As of December 31, 2018 | As of December 31, 2019 | |||||||||||
RMB | RMB | US$ | ||||||||||
(audited) | (unaudited) | (Note) | ||||||||||
Assets | ||||||||||||
Current Assets: | ||||||||||||
Cash and cash equivalents | 4,256,449 | 10,113,141 | 1,452,662 | |||||||||
Accounts receivable, net of allowance for doubtful accounts of RMB1,149,864 and RMB1,319,331 as of December 31, 2018 and 2019, respectively | 592,897 | 110,437 | 15,863 | |||||||||
Advances to suppliers | 15,808,042 | 11,246,608 | 1,615,474 | |||||||||
Prepayments and other current assets, net of allowance for doubtful accounts of RMB 20,770,928 and RMB 5,343,427 as of December 31, 2018 and 2019, respectively | 6,148,787 | 8,848,534 | 1,271,012 | |||||||||
Amounts due from related parties | 6,207,846 | 758,761 | 108,989 | |||||||||
Assets classified as held-for-sale | - | 123,390,350 | 17,723,915 | |||||||||
Total current assets | 33,014,021 | 154,467,831 | 22,187,915 | |||||||||
Investments | 45,216,118 | 10,000,000 | 1,436,410 | |||||||||
Property, equipment and software, net | 17,352,445 | 1,218,521 | 175,030 | |||||||||
Land use rights, net | 62,589,656 | - | - | |||||||||
Operating lease right-of-use assets | - | 9,257,604 | 1,329,772 | |||||||||
Other long-lived assets, net | 6,515,200 | 6,515,200 | 935,850 | |||||||||
Total Assets | 164,687,440 | 181,459,156 | 26,064,977 | |||||||||
Liabilities, Redeemable Noncontrolling Interest and Shareholders' Equity (Deficit) | ||||||||||||
Current Liabilities: | ||||||||||||
Short-term borrowings | 112,461,383 | 117,526,089 | 16,881,566 | |||||||||
Accounts payable | 38,035,661 | 38,232,425 | 5,491,744 | |||||||||
Other taxes payable | 2,949,082 | 1,203,644 | 172,893 | |||||||||
Advances from customers | 39,631,950 | 39,527,778 | 5,677,810 | |||||||||
Other advances | - | 56,276,200 | 8,083,570 | |||||||||
Amounts due to related parties | 71,849,633 | 74,379,529 | 10,683,951 | |||||||||
Deferred revenue | 159,125 | - | - | |||||||||
Refund of game points | 169,998,682 | 169,998,682 | 24,418,783 | |||||||||
Warrants | 1,490,844 | 198,600 | 28,527 | |||||||||
Convertible notes | 375,257,140 | 414,127,908 | 59,485,752 | |||||||||
Interest payable | 15,298,961 | 5,371,931 | 771,630 | |||||||||
Accrued expenses and other current liabilities | 81,291,306 | 93,140,843 | 13,378,845 | |||||||||
Current portion of operating lease liabilities | - | 3,407,670 | 489,481 | |||||||||
Liabilities directly associated with assets classified as held-for-sale | - | 44,691,296 | 6,419,503 | |||||||||
Total current liabilities | 908,423,767 | 1,058,082,595 | 151,984,055 | |||||||||
Non-current portion of operating lease liabilities | - | 6,251,705 | 898,001 | |||||||||
Total Liabilities | 908,423,767 | 1,064,334,300 | 152,882,056 | |||||||||
Redeemable Noncontrolling Interest | 341,074,539 | 349,046,548 | 50,137,400 | |||||||||
Shareholders' Equity (Deficit): | ||||||||||||
Ordinary shares (US$0.01 par value; 91,315,465 and nil shares issued and outstanding as of December 31, 2018 and 2019, respectively) | 6,502,658 | - | - | |||||||||
Class A ordinary shares (US$0.01 par value; nil and 103,737,691 shares issued and outstanding as of December 31, 2018 and 2019, respectively) | - | 7,321,099 | 1,051,610 | |||||||||
Class B ordinary shares (US$0.01 par value; nil and 9,192,011 shares issued and outstanding as of December 31, 2018 and 2019, respectively) | - | 648,709 | 93,181 | |||||||||
Additional paid-in capital | 2,496,069,065 | 2,539,552,478 | 364,783,889 | |||||||||
Statutory reserves | 28,071,982 | 28,071,982 | 4,032,288 | |||||||||
Accumulated other comprehensive loss | (9,204,556 | ) | (3,777,952 | ) | (542,669 | ) | ||||||
Accumulated deficit | (3,233,061,063 | ) | (3,410,856,231 | ) | (489,938,842 | ) | ||||||
The9 Limited shareholders' deficit | (711,621,914 | ) | (839,039,915 | ) | (120,520,543 | ) | ||||||
Noncontrolling interest | (373,188,952 | ) | (392,881,777 | ) | (56,433,936 | ) | ||||||
Total shareholders' deficit | (1,084,810,866 | ) | (1,231,921,692 | ) | (176,954,479 | ) | ||||||
Total liabilities, redeemable noncontrolling interest and shareholders' equity (deficit) | 164,687,440 | 181,459,156 | 26,064,977 |
Note: The United States dollar (“US dollar” or “US$”) amounts disclosed in the accompanying financial statements are presented solely for the convenience of the readers at the rate of US$1.00 = RMB6.9618, representing the noon buying rate on the last trading day of December 2019 (December 31, 2019) as set forth in the H.10 statistical release of the U.S. Federal Reserve Board.
About The9 Limited
The9 Limited is an Internet company based in China listed on Nasdaq in 2004. The9 aims to become a diversified high-tech Internet company.