Form 6-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 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 2014

Commission File Number: 001-34238

 

 

THE9 LIMITED

 

 

Building No. 3, 690 Bibo Road

Zhangjiang Hi-tech Park, Pudong New Area

Shanghai 201203, 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  ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ¨

 

 

 


SIGNATURE

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:   Chief Financial Officer

Date: December 24, 2014


Exhibit Index

 

Exhibit No.

  

Description

Exhibit 99.1    Unaudited Financial Information


Exhibit 99.1

The9 Limited Announces Unaudited Financial Information

As Of and For the Six Months Ended June 30, 2014

In compliance with NASDAQ Rule 5250(c)(2), The9 Limited (the “Company”) hereby announces its unaudited consolidated statement of income for the six months ended June 30, 2014 and its unaudited consolidated balance sheet as of June 30, 2014.

THE9 LIMITED

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME INFORMATION

(Expressed in Renminbi - RMB and US Dollars - US$, except share data)

 

     Six months ended June 30,  
     2013     2014     2014  
     RMB     RMB     US$  
                 (Note)  

Revenues:

      

Online game services

     42,715,381        22,199,785        3,578,533   

Other revenues

     4,426,454        5,547,325        894,211   
  

 

 

   

 

 

   

 

 

 
     47,141,835        27,747,110        4,472,744   

Sales Taxes

     (1,076,192     (326,865     (52,690
  

 

 

   

 

 

   

 

 

 

Net Revenues

     46,065,643        27,420,245        4,420,054   

Cost of Services

     (43,889,715     (41,706,220     (6,722,906
  

 

 

   

 

 

   

 

 

 

Gross Profit (loss)

     2,175,928        (14,285,975     (2,302,852
  

 

 

   

 

 

   

 

 

 

Operating Expenses:

      

Product development

     (112,685,243     (79,550,315     (12,823,250

Sales and marketing

     (67,008,994     (18,270,728     (2,945,182

General and administrative

     (95,035,114     (51,629,447     (8,322,498

Impairment of Advances to suppliers

     —          (3,555,845     (573,191
  

 

 

   

 

 

   

 

 

 

Total operating expenses

     (274,729,351     (153,006,335     (24,664,121

Other operating Income

     64,628        50,000        8,060   
  

 

 

   

 

 

   

 

 

 

Loss from operations

     (272,488,795     (167,242,310     (26,958,913

Interest income, net

     5,770,963        1,482,111        238,911   

Other income, net

     2,316,469        3,276,714        528,196   

Loss before gain on investment disposal, impairment loss on investments and share of loss in equity investments

     (264,401,363     (162,483,485     (26,191,806

Gain on investment disposal

     —          9,403,451        1,515,806   

Impairment loss on investments

     (32,789,319     —          —     

Share of loss in equity investments

     (1,964,279     (879,476     (141,769
  

 

 

   

 

 

   

 

 

 

Net loss

     (299,154,961     (153,959,510     (24,817,769

Less: Net loss attributable to noncontrolling interest

     (17,253,987     (12,046,743     (1,941,896
  

 

 

   

 

 

   

 

 

 

Net loss attributable to holders of ordinary shares

     (281,900,974     (141,912,767     (22,875,873
  

 

 

   

 

 

   

 

 

 

Net loss

     (299,154,961     (153,959,510     (24,817,769
  

 

 

   

 

 

   

 

 

 

Net loss attributable to holders of ordinary shares per share

      

- Basic and diluted

     (12.07     (6.13     (0.99
  

 

 

   

 

 

   

 

 

 

Weighted average number of shares outstanding

      

- Basic and diluted

     23,356,838        23,146,859        23,146,859   
  

 

 

   

 

 

   

 

 

 

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 =RMB6.2036, representing the noon buying rate in the City of New York for cable transfers of RMB, as certified for customs purposes by the Federal Reserve Bank of New York, on June 30, 2014.


THE9 LIMITED

UNAUDITED CONSOLIDATED BALANCE SHEETS INFORMATION

(Expressed in Renminbi - RMB and US Dollars - US$)

 

     As of December 31, 2013     As of June 30, 2014     As of June 30, 2014  
     RMB     RMB     US$  
                 (Note)  

Assets

      

Current Assets

      

Cash and cash equivalents

     156,987,201        26,964,558        4,346,598   

Accounts receivable

     19,138,096        15,001,396        2,418,176   

Due from related parties

     —          1,562,106        251,806   

Advances to suppliers

     4,525,549        1,343,894        216,631   

Prepayments and other current assets

     32,464,598        40,192,481        6,478,896   

Prepaid royalties

     4,878,579        —          —     

Deferred costs

     68,217        38,981        6,284   
  

 

 

   

 

 

   

 

 

 

Total current assets

     218,062,240        85,103,416        13,718,391   

Restricted cash

     700,000        700,000        112,838   

Investments in equity investees

     50,848,141        40,914,626        6,595,304   

Property, equipment and software

     50,439,400        43,159,145        6,957,113   

Goodwill

     9,710,854        9,799,889        1,579,710   

Intangible assets

     128,643,824        114,587,331        18,471,102   

Land use right

     72,194,206        71,233,751        11,482,647   

Other long-term assets

     16,080,483        8,117,705        1,308,547   
  

 

 

   

 

 

   

 

 

 

Total Assets

     546,679,148        373,615,863        60,225,652   
  

 

 

   

 

 

   

 

 

 

Liabilities and Shareholders’ Equity

      

Current Liabilities

      

Accounts payable

     69,376,348        65,111,063        10,495,690   

Other taxes payable

     1,238,852        1,459,710        235,300   

Advances from customers

     18,896,049        18,919,186        3,049,711   

Amounts due to related parties

     4,799,753        —          —     

Deferred revenue

     20,113,256        16,717,649        2,694,830   

Refund of game points

     169,998,682        169,998,682        27,403,231   

Other payables and accruals

     45,669,488        39,932,937        6,437,059   
  

 

 

   

 

 

   

 

 

 

Total current liabilities

     330,092,428        312,139,227        50,315,821   

Long-term accounts payable

     21,110,517        20,242,712        3,263,059   

Deferred tax liabilities, non-current

     5,343,060        5,392,048        869,180   
  

 

 

   

 

 

   

 

 

 

Total Liabilities

     356,546,005        337,773,987        54,448,060   
  

 

 

   

 

 

   

 

 

 

Equity

      

Common shares (US$0.01 par value; 23,146,859 shares issued and outstanding as of December 31, 2013, 23,146,859 shares issued and outstanding as of June 30, 2014)

     1,881,784        1,881,784        303,337   

Additional paid-in capital

     2,152,320,786        2,172,024,358        350,123,212   

Statutory reserves

     28,071,982        28,071,982        4,525,112   

Accumulated other comprehensive loss

     (8,987,041     (11,445,917     (1,845,044

Accumulated deficit

     (1,912,569,874     (2,054,482,638     (331,175,873
  

 

 

   

 

 

   

 

 

 

The9 Limited shareholders’ equity

     260,717,637        136,049,569        21,930,744   

Noncontrolling interests

     (70,584,494     (100,207,693     (16,153,152
  

 

 

   

 

 

   

 

 

 

Total equity

     190,133,143        35,841,876        5,777,592   
  

 

 

   

 

 

   

 

 

 

Total liabilities and equity

     546,679,148        373,615,863        60,225,652   
  

 

 

   

 

 

   

 

 

 

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 =RMB6.2036, representing the noon buying rate in the City of New York for cable transfers of RMB, as certified for customs purposes by the Federal Reserve Bank of New York, on June 30, 2014.


1. In July 2014, the Company and Qihoo 360 Technology Co., Ltd. (“Qihoo 360”) entered into an agreement to form a joint venture. Pursuant to the joint venture agreement, the Company and Qihoo 360 will each own 50% equity interest in the joint venture and share profits according to this ratio. The joint venture, System Link Limited, was formed in August 2014.

In August 2014, Red 5 Singapore Pte. Ltd., a wholly owned subsidiary of the Company, entered into a license agreement with System Link Limited for publishing and operating Firefall®, a MMO shooter game developed by Red 5 Studios, Inc., a subsidiary of the Company, for a five-year term in mainland China. Under this license agreement, System Link Limited will pay to Red 5 Singapore at least US$160 million including license fee and royalties during the contract period.

 

2. In August 2014, the Company closed a transaction with Shanghai Zhengwu Investment Center (Limited Partnership) for the sale of the Company’s wholly-owned consolidated subsidiary Shanghai Huopu Cloud Computing Terminal Technology Co., Ltd. (“Huopu Cloud”) for a total consideration of RMB200 million in cash. Huopu Cloud developed and holds a web game QiJiGuiLai and has the right to receive a minority portion of royalties generated from the operation of the game Firefall® in mainland China upon payment and other conditions.

About The9 Limited

The9 Limited is an online game developer and operator in China. The9 develops and operates, directly or through its affiliates, its proprietary MMO, web and mobile games including Firefall®. In 2010, The9 established its wireless business unit to focus on mobile internet business including mobile games, mobile reading and mobile advertising. In 2013, The9 formed a joint venture with Shanghai ZTE to develop and operate home entertainment set top box business.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. 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. Among other things, the business outlook and quotations from management in this announcement contain forward-looking statements. The9 may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission on Forms 20-F and 6-K, etc., 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 important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, political and economic policies of the Chinese government, the laws and regulations governing the online game industry, information disseminated over the Internet and Internet content providers in China, intensified government regulation of Internet cafes, The9’s ability to retain existing players and attract new players, license, develop or acquire additional online games that are appealing to users, anticipate and adapt to changing consumer preferences and respond to competitive market conditions, and other risks and uncertainties outlined in The9’s filings with the U.S. Securities and Exchange Commission, including its annual reports on Form 20-F. The9 does not undertake any obligation to update any forward-looking statement, except as required under applicable law.