The9 Limited Announces Unaudited Financial Information As of and For the Six Months Ended June 30, 2016

THE9 LIMITED

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME INFORMATION

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

 Six months ended June 30,  

2015

2016

2016

RMB

 RMB 

 US$ 

 (Note) 

Revenues:

  Online game services

21,603,037

20,655,337

3,107,982

  Other revenues

2,739,854

2,392,933

360,062

24,342,891

23,048,270

3,468,044

Sales taxes

(35,513)

(61,508)

(9,255)

Total net revenues

24,307,378

22,986,762

3,458,789

Cost of revenues

(34,687,456)

(28,335,686)

(4,263,634)

Gross loss

(10,380,078)

(5,348,924)

(804,845)

Operating income (expenses):

   Product development

(62,442,677)

(43,825,469)

(6,594,361)

   Sales and marketing

(15,440,601)

(11,383,633)

(1,712,881)

   General and administrative

(47,218,365)

(42,786,711)

(6,438,061)

   Impairment on equipment , intangible assets, other assets and 
   allowance(reversal of allowance) of long-term receivable

-

(68,003,805)

(10,232,445)

Total operating income (expenses)

(125,101,643)

(165,999,618)

(24,977,748)

      Other operating Income

234,000

163,642

24,623

Income (loss) from operations

(135,247,721)

(171,184,900)

(25,757,970)

Impairment on goodwill

-

(10,561,857)

(1,589,229)

Impairment on available-for-sale investment

-

(244,798,058)

(36,834,448)

Interest income (expenses), net

993,177

(33,073,698)

(4,976,557)

Fair value change on liability

-

37,249,592

5,604,898

Other expenses,net

(1,265,193)

(2,217,574)

(333,675)

Income (loss) before income tax expense and share of loss in
equity method investments

(135,519,737)

(424,586,495)

(63,886,981)

Income tax expenses

-

-

-

Share of loss in equity method investments

(1,040,084)

(29,955,544)

(4,507,372)

Net Income (loss) for the year

(136,559,821)

(454,542,039)

(68,394,353)

   Net loss attributable to noncontrolling interest

(6,973,714)

(45,277,123)

(6,812,790)

   Net loss attributable to redeemable noncontrolling interest

(15,573,811)

(7,072,359)

(1,064,169)

Attributable net income (loss) to The9 Limited

(114,012,296)

(402,192,557)

(60,517,394)

Change in redemption value of redeemable noncontrollling interest

36,762,963

37,863,439

5,697,263

Net income (loss) attributable to holders of ordinary shares

(150,775,259)

(440,055,996)

(66,214,658)

Other comprehensive income:

      Currency translation adjustments

5,330,149

(1,314,419)

(197,779)

Total comprehensive income (loss)

(131,229,672)

(455,856,458)

(68,592,132)

Comprehensive income (loss) attributable to:

      noncontrolling interest

(6,112,278)

(53,853,568)

(8,103,277)

      redeemable noncontrolling interest

(15,573,811)

(7,072,359)

(1,064,169)

      The9 Limited

(109,543,583)

(394,930,531)

(59,424,688)

Net income (loss) attributable to holders of ordinary shares per share

- Basic 

(6.50)

(18.46)

(2.78)

- Diluted

(6.50)

(18.46)

(2.78)

Weighted average number of shares outstanding

- Basic 

23,201,601

23,836,873

23,836,873

- Diluted

23,201,601

23,836,873

23,836,873

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 = RMB6.6459, 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, 2016.

THE9 LIMITED

UNAUDITED CONSOLIDATED BALANCE SHEETS INFORMATION

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

 As of December 31,
2015

As of June 30,
2016

As of June 30,
2016

RMB

RMB

US$

 (Note) 

Assets

Current Assets:

  Cash and cash equivalents

49,010,541

21,928,254

3,299,516

  Accounts receivable,net of allowance for doubtful
       accounts of RMB991,743 and RMB920,169 as of 
       December 31, 2015 and June 30, 2016, respectively

7,153,663

6,419,920

965,997

  Advances to suppliers

898,126

2,448,879

368,480

  Prepayments and other current assets

9,463,149

7,642,645

1,149,979

  Amounts due from related parties

10,732,643

21,108,274

3,176,135

Total current assets

77,258,122

59,547,972

8,960,107

Investments in equity investees

267,539,694

230,438,138

34,673,729

Property, equipment and software, net

33,846,518

30,566,869

4,599,357

Goodwill

10,342,694

-

-

Intangible assets, net

78,876,486

-

-

Land use right, net

68,352,386

67,391,931

10,140,377

Other long-lived assets, net

1,879,021

8,452,623

1,271,855

Total Assets

538,094,921

396,397,533

59,645,425

Liabilities and Shareholders' Equity

Current Liabilities:

  Accounts payable

41,248,455

42,508,575

6,396,210

  Other taxes payable

551,445

147,832

22,244

  Advances from customers

19,605,593

23,764,942

3,575,880

  Amounts due to related parties                 

77,730,267

112,667,647

16,952,956

  Deferred revenue

18,552,217

17,705,070

2,664,059

  Refund of game points

169,998,682

169,998,682

25,579,482

  Warrants

64,414,941

28,530,307

4,292,918

  Short-term bank borrowing

-

24,992,214

3,760,546

  Accrued expense and other current liabilities

35,864,424

34,483,796

5,188,732

Total current liabilities

427,966,024

454,799,065

68,433,027

Long-term debt

31,726,575

33,624,048

5,059,367

Convertible notes

135,182,536

166,781,200

25,095,352

Deferred tax liabilities, non-current

5,690,705

5,811,292

874,418

Total Liabilities

600,565,840

661,015,605

99,462,164

Redeemable noncontrolling interest

178,605,097

209,396,178

31,507,573

Ordinary shares (US$0.01 par value; 23,701,601 
    shares issued and outstanding as of December 31,
    2015, 23,915,501 shares issued and outstanding as of
    June 30, 2016)

1,917,620

1,931,637

290,651

Additional paid-in capital

2,080,041,288

2,548,050,327

383,401,846

Statutory reserves

28,071,982

28,071,982

4,223,955

Accumulated other comprehensive loss

(3,372,588)

3,889,437

585,239

Accumulated deficit

(2,304,020,698)

(2,706,213,255)

(407,200,418)

The9 Limited shareholders' equity (deficit)

(197,362,396)

(124,269,872)

(18,698,727)

Noncontrolling interest

(43,713,620)

(349,744,378)

(52,625,585)

Total shareholder's equity (deficit)

(241,076,016)

(474,014,250)

(71,324,312)

Total liabilities, redeemable noncontrolling 
    interest and equity (deficit)

538,094,921

396,397,533

59,645,425

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 =RMB6.6459, 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, 2016.