SHANGHAI - The9 Limited (NASDAQ:NCTY), a Shanghai-based Internet company, has entered into a binding agreement with Shenma Limited to acquire a 51% share of the latter for a combination of cash and restricted shares. As part of the deal, The9 will pay $1 million in cash and issue restricted Class A ordinary shares valued at $14.3 million. The shares' price will be determined by the average closing price of The9's American depositary shares over the 20 trading days preceding the definitive agreement.
The9's restricted shares will be released from lock-up conditions based on the company's market capitalization reaching specific milestones. When the market cap hits $200 million, $500 million, and $1 billion, different tranches of shares will be unlocked. The remaining shares will be released upon Shenma completing a qualified initial public offering (IPO).
Shenma operates Shenma.io, an AI-generated content (AIGC) driven digital human SaaS platform with various features including a short video scripts library, digital human creators, and brand customers. The platform allows users to create digital human clones with image and voice, manage accounts, and monetize their products on social media platforms.
Mr. Jianjun Ma, founder of Shenma, emphasized the disruptive potential of AIGC and digital humans in media interaction and the traditional advertising industry. He highlighted Shenma's capabilities in numerous applications like live streaming and advertising.
Mr. George Lai, CFO and Director of The9, expressed his belief in the transformative power of AIGC across industries, citing the growth of China's AIGC market and The9's strategy to invest in AI application opportunities.
The9, which is also involved in blockchain and cryptocurrency mining, sees this acquisition as a step towards diversifying its AI business ventures. The information for this report is based on a press release statement.
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