NCTY The9 Limited

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of December 2023

 

 

Commission File Number: 001-34238

 

 

THE9 LIMITED

 

17 Floor, No. 130 Wu Song Road

Hong Kou District, Shanghai 200080

People’s Republic of China

(Address of principal executive offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F x Form 40-F ¨

 

 

EXHIBIT INDEX

 

Exhibit No.		Description
99.1*		Unaudited financial information as of and for the six months ended June 30, 2023 of The9 Limited

 

*

Exhibit 99.1 is furnished herewith solely for the purpose of meeting the requirements under Nasdaq Stock Market Rule 5250(c)(2) in connection with submission of an interim balance sheet and income statement as of the end of its second quarter.

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

	THE9 LIMITED
	By	:	/s/ George Lai
	Name:	:	George Lai
	Title:	:	Director and Chief Financial Officer

 

Date: December 29, 2023

 

 

Exhibit 99.1

 

The9 Limited Announces Unaudited Financial Information
As of and For the Six Months Ended June 30, 2023

 

In compliance with NASDAQ Rule 5250(c)(2), The9 Limited (the “Company”) hereby announces its unaudited condensed consolidated statements of operations for the six months ended June 30, 2023 and its unaudited condensed consolidated balance sheets as of June 30, 2023.

 

THE9 LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS INFORMATION

(Expressed in Renminbi - RMB and US Dollars - US$. All amounts in thousands, except for share and per date, or otherwise noted.)

 

		Six months ended June 30,
		2022				2023				2023
		RMB				RMB				US$
										(Note1)
Revenues:
Cryptocurrency mining revenue			41,801				93,894				12,949
Other revenues			2,476				3,151				434
Total net revenues			44,277				97,045				13,383
Cost of cyptocurrency mining			(51,410	)			(95,834	)			(13,216	)
Other cost			(3,498	)			(9,883	)			(1,363	)
Total cost			(54,908	)			(105,717	)			(14,579	)
Gross loss			(10,631	)			(8,672	)			(1,196	)
Operating expenses:
Product development			(641	)			(848	)			(117	)
Sales and marketing			(554	)			(1,617	)			(223	)
General and administrative			(230,943	)			(131,012	)			(18,067	)
Impairment of cryptocurrency			(64,888	)			(32,733	)			(4,515	)
Impairment of mining machines			(141,599	)			(150,204	)			(20,714	)
Realized gain on exchange digital assets			-				44,666				6,160
Total operating expenses			(438,625	)			(271,748	)			(37,476	)
Other operating income			1				-				-
Loss from operations			(449,255	)			(280,420	)			(38,672	)
Impairment on equity investments
Impairment on equity investments			(31,076	)			-				-
Gain (impairment) on other investments			(20,030	)			5,630				776
Interest expenses, net			(6,048	)			(23,751	)			(3,275	)
Gain from change in fair value of convertible feature derivative liability			(6,500	)			31,264				4,312
Gain on disposal of equity investee and available-for-sale investments			-				1,112				153
Other income, net			8,453				5,023				693
Foreign transaction exchange loss			(2,522	)			(10,856	)			(1,497	)
Loss from continuing operations before income taxs			(506,978	)			(271,998	)			(37,510	)
Income tax			-
Loss from continuing operations			(506,978	)			(271,998	)			(37,510	)
Discontinued operations (Note2)
Loss from discontinued operation			(75,806	)			(1,412	)			(195	)
Net loss			(582,784	)			(273,410	)			(37,705	)
Net loss attributable to noncontrolling interest			(3,114	)			(3,601	)			(497	)
Net loss attributable to The9 Limited			(579,669	)			(269,809	)			(37,208	)
Other comprehensive loss:
Currency translation adjustments			5,217				1,255				173
Total comprehensive loss			(577,567	)			(272,155	)			(37,532	)
Comprehensive loss attributable to:
Noncontrolling interest			(3,114	)			(3,601	)			(497	)
The9 Limited			(574,451	)			(268,554	)			(37,035	)
Net loss attributable to holders of ordinary shares per share
- Basic and diluted			(0.89	)			(0.31	)			(0.04	)
Weighted average number of shares outstanding
- Basic and diluted			650,181				881,666				881,666

THE9 LIMITED

CONDENSED CONSOLIDATED BALANCE SHEETS INFORMATION

(Expressed in Renminbi - RMB and US Dollars - US$. All amounts in thousands, except for share and per date, or otherwise noted.)

 

		As of December 31, 2022				As of June 30, 2023				As of June 30, 2023
		RMB				RMB				US$
						(UNAUDITED)				(UNAUDITED)
										(Note1)
Assets
Current Assets:
Cash and cash equivalents			56,794				20,914				2,884
Accounts receivable, net of allowance for doubtful accounts			151				94				13
Advances to suppliers			30				8				1
Prepayments and other current assets, net of allowance for doubtful accounts			272,462				80,621				11,119
Amounts due from related parties			600				600				83
Intangible assets - cryptocurrencies			62,820				56,594				7,805
Current assets classified as held for sale			1,296				254				35
Other Current Asset			-				324				45
Total current assets			394,153				159,409				21,985
Investments			35,297				39,942				5,508
Property, equipment and software, net			142,848				133,428				18,402
Operating lease right-of-use assets			12,062				8,795				1,213
Non-current assets classified as held for sale			3,521				156				21
Other long-lived assets, net			11,226				11,015				1,519
Total Assets			599,107				352,745				48,648
Liabilities, Redeemable Noncontrolling Interest and Shareholders' Equity
Current Liabilities:
Accounts payable			7,147				9,157				1,263
Other taxes payable			1,651				1,575				217
Advances from customers			17,728				17,835				2,460
Amounts due to related parties			21,160				19,736				2,722
Refund of game points			169,999				169,999				23,443
Convertible notes, net of debt discount			60,984				82,394				11,362
Conversion feature derivative liability			51,775				20,511				2,829
Interest payables			2,130				3,339				460
Accrued expense and other current liabilities			66,437				42,019				5,798
Current portion of operating lease liabilities of the consolidated VIE without recourse to the Group			5,793				4,915				678
Deferred revenue			22				139				19
Liabilities directly associated with assets classified as held for sale			159,337				158,947				21,919
Total current liabilities			564,163				530,566				73,170
Long-term Bank borrowing			-				2,679				370
Non-current portion of operating lease liabilities of the consolidated VIE without recourse to the Group			7,406				4,524				624
Total Liabilities			571,569				537,769				74,164
Shareholders' Equity
Class A ordinary shares (US$0.01 par value; 4,300,000,000 shares authorized, 847,437,583 and 942,894,433 shares issued and outstanding as of December 31, 2022 and June 30, 2023 respectively)			56,659				63,164				8,711
Class B ordinary shares (US$0.01 par value; 600,000,000 shares authorized, 13,607,334 and 13,607,334 shares issued and outstanding as of December 31, 2022 and June 30, 2023, respectively)			944				944				130
Additional paid-in capital			4,371,228				4,424,482				610,164
Statutory reserves			7,327				7,327				1,010
Accumulated other comprehensive loss			(12,528	)			(11,439	)			(1,577	)
Accumulated deficit			(4,378,321	)			(4,648,130	)			(641,007	)
The9 Limited shareholders' equity			45,309				(163,652	)			(22,569	)
Noncontrolling interest			(17,771	)			(21,372	)			(2,947	)
Total shareholder's  equity			27,538				(185,024	)			(25,516	)
Total liabilities, redeemable noncontrolling interest and shareholders' equity			599,107				352,745				48,648

 

Note 1: The United States dollar (“US dollar” or “US$”) amounts disclosed in the accompanying unaudited condensed consolidated financial statements are presented solely for the convenience of the readers at the rate of US$1.00 = RMB7.2513, representing the noon buying rate on the last trading day of June 2023 (June 30, 2023) as set forth in the H.10 statistical release of the U.S. Federal Reserve Board.

 

Note 2: Discontinued operations

 

In January 2023, the Company ceased operations of its NFT business. The decision was primarily a result of unfavorable financial performance. The Company reclassified the operations of NFT business as discontinued operations. The Company has reflected the reclassification of assets and liabilities of these entities as held for sale and the operations as discontinued operations as of and for the six months ended June 30, 2023. Loss from discontinued operations reflects the results of the NFT business, and does not include any allocation of general corporate overhead expense or interest expense of the Company. The prior periods presented in the unaudited condensed consolidated statements of operations information and unaudited condensed consolidated balance sheet information were also reclassified to reflect the discontinued operations.

 

Subsequent events:

 

1.

In September 2023, pursuant to the Tenth Amended and Restated 2004 Stock Option Plan, the Company granted and issued an aggregate number of 214,650,000 Class A ordinary shares of the Company (equivalent to 715,500 American depositary shares of the Company, each representing 300 Class A ordinary shares (the “ADSs”)) pursuant to the restricted shares and restricted share units granted to the directors, officers and employees of the Company. The 205,200,000 Class A ordinary shares issued pursuant to the restricted share grants to the executive officers and employees of the Company are subject to a three-year vesting schedule and lock-up restrictions, provided that the second-year and the third-year tranches of the restricted share grants shall be released from the lock-up restrictions only upon the satisfaction of certain pre-agreed performance targets. The remaining 9,450,000 Class A ordinary shares were issued pursuant to the restricted share units granted to the independent directors of the Company as part of their compensation for their services as independent directors of the Company for the next three years.

 

2.

In November 2023, the Company closed a private placement securities purchase transaction with Bripheno Pte. Ltd., a Singapore limited liability company, pursuant to which the Company sold and issued:

 

●150,000,000 Class A ordinary shares (equivalent to 500,000 ADSs) at a price of US$12 per ADS,

 

●Two-year 3% per annum convertible promissory note at the purchase price of US$6 million with the conversion price of US$15 per ADS and

 

●Warrants to purchase an aggregate of 120,000,000 Class A ordinary shares (equivalent to 400,000 ADSs) at an exercise price of US$60 per ADS. The warrants will expire two years from the date of issuance.

 

All the above securities are subject to a 6-month lock up period. The Company has raised a total of US$12 million as the aggregate consideration for the securities. The Company plans to use proceeds to fund future growth.

 

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.

 

 

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