SHANGHAI, June 2, 2024
/PRNewswire/ -- The9 Limited (Nasdaq: NCTY) ("The9"), an
established Internet company, today announced that it signed a
definitive share purchase agreement (the "Agreement") with Wuhan
Weixiang Science And Technology Co., Ltd. ("WeiXiang"), an
AI-powered educational technology company in China, to purchase 19% of WeiXiang 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
WeiXiang based on a valuation calculated as 7 times of Weixiang's
audited annual profit after tax, provided that such valuation
should be higher than US$45
million.
Weixiang was founded by Mr. Xu
Wang, a pioneer in the educational technology landscape in
China who earned several
educational awards including the title of 2018 China Education
Industry Figure of the Year. Mr. Wang initially gained recognition
with proprietary K-12 class management platform YuanDing, which
revolutionized classroom management for teachers across
China. Under Mr. Wang's
leadership, the platform had reached millions of daily active
users. In 2020, Mr. Wang founded Weixiang, aiming to create a
localized online school ecosystem powered by short videos and live
streaming. Weixiang leverages popular platforms like TikTok,
KuaiShou and WeChat Video Channels, serving as their official
ecosystem partner. Weixiang has amassed over 9 million followers
across these platforms. The most popular teacher had engaged over
300,000 simultaneous viewers a single live stream, and had made
monthly revenue over RMB10 million.
Weixiang distinguishes itself from traditional live-streaming
educational companies through its extensive use of AI applications.
These technologies significantly enhance productivity and reduce
operational costs. Key innovations include:
- AI Content Creation: By utilizing in-house developed GPTs,
Weixiang produces high-quality content scripts and educational
videos at large-scale. This allows teachers to effortlessly create
short videos and live streaming content.
- AI Live Streaming Technology: Digital human video generation
technology, combined with AI, analyzes audience interactions in
real-time, enabling 24*7 live streams and enhancing viewer
engagement. AI also facilitates automatic translation and subtitle
generation, broadening the reach of live content.
- AI Teaching Assistants and Smart Customer Service: AI teaching
assistants provide personalized learning plans and real-time
practice and assessment services to help students grasp educational
content better. Smart customer service leverages big data and
machine learning to offer efficient user consultation and
problem-solving, significantly improving user satisfaction.
Pursuant to the Agreement, The9 will pay cash consideration of
US$1.5 million and will issue
284,465,400 restricted Class A ordinary shares (equivalent to
948,218 ADSs) to Weixiang. The restricted Class A ordinary
shares to be issued to Weixiang will be subject to lock-up
conditions and will only be released according to the following
schedule: (i) when the market capitalization of The9 reaches
US$200 million, 24,533,700 Class A
Ordinary shares (equivalent to 81,779 ADSs) of The9 will be
released from the lock-up; (ii) when the market capitalization
of The9 reaches US$500 million,
9,813,600 Class A Ordinary shares (equivalent to 32,712 ADSs) of
The9 will be released from the lock-up, and (iii) when the
market capitalization of The9 reaches US$1
billion, 4,906,800 Class A Ordinary shares (equivalent to
16,356 ADSs) of The9 will be released from the lock-up. The rest of
the restricted shares shall be released from the lock-up when
either of the following conditions are met: Weixiang 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 Weixiang.
"Weixiang is committed to extending high-quality education to
underserved markets, ensuring students in remote areas have access
to the same resources as those in major cities. Our future plans
include recruiting and supporting grassroots teachers in lower-tier
cities, helping them maximize their teaching potential through
short videos and live streaming. These teachers will receive
training and support from Weixiang to improve their teaching
quality and content creation skills, ultimately benefiting local
students and parents. Our AI applications will continue to embody
our philosophy of "Inclusive education for all." On top of that, we
will also strengthen our AI application on AI data analysis. We
will develop advanced data analysis panels to accurately analyzing
student performance, which will offer teachers insights in
optimizing educational strategies, improving lessons and
recommending assignments to enhance educational quality and
effectiveness," said Mr. Wang.
As of the date hereof, the total number of issued and
outstanding shares of The9 is 2,696,075,827 (equivalent to
8,986,919 ADSs), being the sum of 2,682,468,493 Class A ordinary
shares and 13,607,334 Class B ordinary shares.
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 that
offer significant growth potential.
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SOURCE The9 Limited
