Operations | 1. Operations Bilibili Inc. (the “Company” or “Bilibili”) is an online entertainment platform for young generations. Incorporated as a limited liability company in the Cayman Islands in December 2013, the Company, through its consolidated subsidiaries, variable interest entities (“VIEs”) and subsidiaries of the VIEs (collectively referred to as the “Group”), is primarily engaged in the operation of providing online entertainment services to users in the People’s Republic of China (the “PRC” or “China”). In April 2018, the Company completed its IPO on the NASDAQ Global Select Market. In March 2021, the Company successfully listed its Class Z ordinary shares on the main board of the Hong Kong Stock Exchange. The Company issued a total 28,750,000 Class Z ordinary shares in the global offering, including the fully exercised over-allotment option of 3,750,000 Class Z ordinary shares. Net proceeds from the global offering, including the over-allotment option, after deducting underwriting fees and other offering expenses, were approximately HKD22.9 billion (RMB19.3 billion). On October 3, 2022, the Company’s voluntary conversion of its secondary primary As of September 30, 2022, the Company’s major subsidiaries follows Major Subsidiaries Place and Year of Incorporation Percentage of Economic Principal Activities Bilibili HK Limited Hong Kong, 2014 100 Investment holding Hode HK Limited Hong Kong, 2014 100 Investment holding Chaodian HK Limited Hong Kong, 2019 100 Investment holding Bilibili Co., Ltd. Japan, 2014 100 Business development Hode Shanghai Limited (“Hode Shanghai”) PRC, 2014 100 Technology development Shanghai Bilibili Technology Co., Ltd. PRC, 2016 100 Technology development Chaodian (Shanghai) Technology Co., Ltd. PRC, 2019 100 E-commerce and advertising Major VIEs and VIEs’ subsidiaries Place and Year of Incorporation Acquisition Percentage of Direct or Indirect Economic Ownership Principal Activities Shanghai Hode Information Technology Co., Ltd. (“Hode Information PRC, 2013 100 Mobile game operation Shanghai Kuanyu Digital Technology Co., Ltd. (“Shanghai Kuanyu”) PRC, 2014 100 Video distribution and game Sharejoy Network Technology Co., Ltd. (“Sharejoy Network”) PRC, 2014 100 Game distribution Shanghai Hehehe Culture Communication Co., Ltd. (“Shanghai Hehehe”) PRC, 2014 100 Comics distribution Shanghai Anime Tamashi Cultural Media Co., Ltd. (“Shanghai Anime PRC, 2015 100 E-commerce platform The following combined financial information of the Group’s VIEs as of December 31, 2021 and September 30, 2022 and for the nine months ended September 30, 2021 and 2022 included in the accompanying consolidated financial statements of the Group was as follows: December 31 2021 September 30 2022 RMB in thousands Cash and cash equivalents 377,114 1,194,334 Time deposits 6,997 4,251 Accounts receivable, net 524,311 686,362 Amounts due from Group companies 391,951 490,723 Amount due from related parties 101,983 160,130 Prepayments and other current assets 1,806,185 1,231,955 Short-term investments 927,124 710,278 Long-term investments, net 1,745,466 1,965,835 Other non-current 4,926,989 6,096,639 Total assets 10,808,120 12,540,507 Accounts payable 3,164,301 3,709,339 Salary and welfare payables 343,008 255,228 Taxes payable 128,817 168,576 Short-term loans 400,000 404,928 Deferred revenue 2,192,460 2,241,761 Accrued liabilities and other payables 1,184,523 983,903 Amounts due to the Group companies 7,214,146 11,694,322 Amounts due to related parties 117,901 12,251 Other long-term payable 222,719 261,002 Total liabilities 14,967,875 19,731,310 Total Bilibili Inc’s shareholders’ deficit (4,170,459 ) (7,194,530 ) Noncontrolling interests 10,704 3,727 Total shareholders’ deficit (4,159,755 ) (7,190,803 ) Total liabilities and shareholders’ deficit 10,808,120 12,540,507 For the Nine Months Ended September 30, 2021 2022 RMB in thousands Third-party revenues 9,289,751 10,797,212 Inter-company revenues 594,290 677,915 Total revenues 9,884,041 11,475,127 Net loss (2,498,479 ) (3,086,200 ) For the Nine Months Ended September 30, 2021 2022 RMB in thousands Net cash provided by operating activities 156,350 352,823 Net cash used in (2,257,450 ) (1,695,391 ) Net cash provided by 2,207,639 2,186,996 Liquidity The Group incurred net losses of RMB 4,713.0 6,010.6 3,204.1 13,971.3 19,973.7 non-operational ), after deducting commissions and offering expenses. Moreover, the Group can adjust the pace of its operation expansion and control the operating expenses. Based on the above considerations, the Group believes the cash and cash equivalents and the operating cash flows are sufficient to meet the cash requirements to fund planned operations and other commitments for at least the next twelve months from the date of the issuance of the unaudited interim condensed consolidated financial statements. The Group’s unaudited interim condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. |