The9 Limited (NasdaqCM:NCTY) singed legally binding term sheet to acquire 51% stake in Shenma Limited for $15.3 million on March 5, 2024. The9 Limited (NasdaqCM:NCTY) signed a definitive agreement to acquire 19% stake in Shenma Limited for $8.3 million on May 30, 2024. The consideration consists of $1 million in cash and issue Class A ordinary shares to Shenma or its shareholders with the value of $14.3 million.

The value of each share will be determined by the average closing price of The9's American depositary shares ("ADS"), each representing 300 Class A ordinary shares of The9, for a period of 20 trading days prior to the signing of the definitive agreement. The restricted Class A ordinary shares to be issued to Shenma 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 $200 million, 33,938,400 Class A ordinary shares (equivalent to 113,128 ADSs) of The9 will be released from the lock-up; (ii) when the market capitalization of The9 reaches $500 million, 13,575,300 Class A ordinary shares (equivalent to 45,251 ADSs) of The9 will be released from the lock-up, and (iii) when the market capitalization of The9 reaches $1 billion, 6,787,800 Class A Ordinary shares (equivalent to 22,626 ADSs) of The9 will be released from the lock-up. The rest of the restricted Class A ordinary shares will be released from the lock-up when Shenma completes a qualified IPO and its shares owned by The9 become freely tradable in the open market.

Under the terms of the definitive agreement The9?s total consideration for the equity stake in Shenma consists of cash consideration of US$1 million and issuance of 417,880,500 restricted Class A ordinary shares (equivalent to 1,392,935 ADSs).