The9 Limited Receives Strategic Investment from Cryptocurrency Investment Funds to Operate Global GameFi Platform

Rhea-AI Summary

The9 (NASDAQ: NCTY) has secured a strategic investment of US$8 million from cryptocurrency investment funds Elune Capital, Fine Vision Fund, and Bripheno Pte. The company will issue Class A common shares at a price based on the 30-day average closing price.

The agreement includes issuing 302,263,200 stock warrants (equivalent to 1,007,544 ADSs) with a two-year exercise period. Some warrants have an exercise price of US$60 per ADS, while others are conditional upon strategic cooperation and platform launch.

The9 plans to establish a new global GameFi platform, collaborating with a cryptocurrency foundation for official platform coins and a leading crypto exchange for user acquisition. The company intends to issue 10% of its shares within 3 years to support GameFi coin operations.

Positive

• Secured US$8 million strategic investment from crypto funds
• Strategic partnership with leading crypto exchange for user acquisition
• Potential expansion into GameFi market with new platform development
• Additional capital potential through 302,263,200 stock warrants

Negative

• Potential shareholder dilution through 10% share issuance over 3 years
• Warrant exercise conditions dependent on uncertain platform launch success
• No immediate revenue impact disclosed from the investment

Insights

Financial Analyst

The9's $8 million strategic investment from cryptocurrency funds represents a significant pivot into the GameFi sector, with both immediate capital benefits and longer-term strategic implications. This capital injection provides runway for platform development while validating their GameFi strategy through institutional backing.

The financing structure merits attention: issuing Class A shares at 30-day average pricing alongside 302,263,200 warrants convertible to 1,007,544 ADSs. The warrant exercise price of $60 per ADS (versus current $13.96) suggests substantial confidence in upside potential from sophisticated crypto investors. However, these instruments—plus plans to issue 10% of shares over three years—will create meaningful dilution for existing shareholders.

The GameFi platform strategy aims to create a coin-share ecosystem connecting traditional gamers with cryptocurrency users, potentially opening substantial addressable markets. Yet execution complexity shouldn't be underestimated. The9 must still secure crucial partnerships with cryptocurrency foundations and exchanges—these relationships remain undefined and represent execution risks.

While this capital infusion strengthens The9's balance sheet and provides strategic optionality in an emerging sector, investors should weigh potential dilution against growth potential and recognize implementation challenges in merging traditional gaming with blockchain technology.

SINGAPORE, March 31, 2025 /PRNewswire/ -- The9 Limited (NASDAQ: NCTY) (hereinafter referred to as "The9"), an established Internet company, announced today that it has signed private placement agreements with industry-leading cryptocurrency investment funds Elune Capital, Fine Vision Fund and Bripheno Pte. Ltd. (hereinafter collectively referred to as "the Investors"). Pursuant to the agreement, the Investors will invest US$8 million in The9. The9 will issue Class A common shares to the Investors with share price equal to the average closing price of the 30 consecutive trading days before the signing of the agreements. The shares issued are subject to statutory lock-up period.

The9 will establish a new company to operate its global GameFi platform. The9 will seek cooperation with a worldwide third-party cryptocurrency foundation, and the GameFi coins issued by the foundation will be used as the official cryptocurrency for The9's global GameFi platform. The9 will also seek cooperation with a leading global cryptocurrency exchange, which will be responsible for promoting cryptocurrency users on its platform to join The9 global GameFi platform.

The9 will issue 302,263,200 stock warrants to investors, each of which represents the right to purchase one Class A common share (equivalent to 1,007,544 ADSs, assuming all warrants are exercised). All warrants have an exercise period of two years. The exercise price of part of the warrants is US$60 per ADS. The other part of the warrants will be divided into two equal batches, and each batch of warrants will be subject to its exercise condition. The exercise conditions are as follows: one-half of the warrants can be exercised after the investor or its business partner signs a strategic cooperation agreement with The9, and the other half of the warrants can be exercised after The9 GameFi platform is launched. The exercise price is the same as the ADS issuance price under these agreements.

George Lai, Executive Director and CFO of The9, said: "This strategic cooperation is an important milestone for The9 to enter into the global GameFi industry. The investment and support from well-known cryptocurrency investment funds will make our new global GameFi platform concept "The Platform is a Big Game" possible. We plan to issue 10% of our shares within 3 years to support the future market, operation and exchange of GameFi coins. The high-dimensional global GameFi platform is different from all previous gaming platforms. We expect the full "coin-share linkage" will attract a large number of diversified gamers, cryptocurrency users and the best Web2 and Web3 games. We look forward to using blockchain technology and cryptocurrency to provide an excellent gaming experience that traditional games cannot provide. We believe that the worldwide cryptocurrency and gaming industries are eager for a GameFi platform that can bring a large scale of traditional gamers into the cryptocurrency world. "Promoting the universal access and application of cryptocurrency in gaming" is the mission and goal of this cooperation. With the strong cryptocurrency user base of the leading global cryptocurrency exchange and The9's resources and experience in the gaming industry, we believe that our new global GameFi platform will soon become the market leader."

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 announcement 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 is committed to become a global diversified high-tech Internet company and is engaged in online games operation and Bitcoin mining business.

About Fine Vision Fund

Fine Vision Fund was established in Singapore in 2022 by Finewill Capital, an internationally renowned investment institution. Fine Vision Fund is dedicated to investing in global game projects and supporting the future of the game industry. The first phase of the fund has a scale of tens of millions of US dollars. It has invested in different game development and distribution projects covering MMORPG, SRPG, Sports, Strategy simulation, and casual games, etc. The fund is enthusiastic about the innovative business model of games and the integration of traditional game development skills with cutting-edge blockchain technology. Through the creation of this international game fund, it aims to infuse new energy into the game and blockchain industry and foster its development and growth.

Fine Vision Fund employs an open operating model. The fund's contact detail and application channel are publicly accessible to game teams both domestically and internationally, without any strict restrictions on the game type or size. As the project progresses, the total investment will continue to grow. Beyond providing financial support to projects with great business potential, Fine Vision Fund will also offer knowledge sharing and overseas operating experience to game developers.

Fine Vision Fund remains positive about the long-term growth of game industry. It is leveraging its industry resources to support game teams worldwide and strengthening the bridge between the local and global game industries.

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SOURCE The9 Limited

FAQ

What is the value of the strategic investment received by NCTY for its GameFi platform?

The9 (NCTY) received an US$8 million strategic investment from cryptocurrency funds Elune Capital, Fine Vision Fund, and Bripheno Pte.

How many stock warrants will NCTY issue to investors?

NCTY will issue 302,263,200 stock warrants, equivalent to 1,007,544 ADSs, with a two-year exercise period.

What percentage of shares will NCTY issue to support GameFi operations?

The9 plans to issue 10% of its shares within a 3-year period to support GameFi coin market operations and exchanges.

What are the exercise conditions for NCTY's stock warrants?

Half of the warrants can be exercised after signing a strategic cooperation agreement, and the other half after the GameFi platform launch.