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Bilibili Inc.

Bilibili Inc.BILIEarnings & Financial Report

Nasdaq · Internet

Bilibili, nicknamed B Site, is a Chinese online video sharing website based in Shanghai where users can submit, view, and add overlaid commentary on videos.

What changed in Bilibili Inc.'s 20-F — 2021 vs 2022

Top changes in Bilibili Inc.'s 2022 20-F

1075 paragraphs added · 1055 removed · 807 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

373 edited+140 added−84 removed509 unchanged
The following chart illustrates our company’s organizational structure, including our principal subsidiaries and consolidated affiliated entities as of the date of this annual report: 5 Table of Contents Notes: (1) Mr. Rui Chen holds 100% equity interests in Shanghai Kuanyu. He is also the chairman of our board of directors and our chief executive officer.
The following chart illustrates our company’s organizational structure, including our principal subsidiaries and the Consolidated Affiliated Entities as of the date of this annual report: 5 Table of Contents Notes: (1) Mr. Rui Chen holds 100% equity interests in Shanghai Kuanyu. He is also the chairman of our board of directors and our chief executive officer.
(2) Shanghai Kuanyu has four subsidiaries. (3) Mr. Rui Chen, Mr. Yi Xu and Ms. Ni Li hold 52.3%, 44.3%, and 3.4% equity interests in Hode Information Technology, respectively, as of the date of this annual report. Mr. Chen is our controlling shareholder, the chairman of our board of directors and our chief executive officer. Mr.
(2) Shanghai Kuanyu has four subsidiaries. (3) Mr. Rui Chen, Ms. Ni Li and Mr. Yi Xu hold 52.3%, 3.4% and 44.3% equity interests in Hode Information Technology, respectively, as of the date of this annual report. Mr. Chen is our controlling shareholder, the chairman of our board of directors and our chief executive officer. Ms.
(5) Chaodian (Shanghai) Technology Co., Ltd., or “Chaodian Technology”, has entered into a series of contractual arrangements with Shanghai Chaodian Culture Communication Co., Ltd., or “Chaodian Culture”, and its individual shareholders, through which we obtained control over the operations of, and enjoyed all economic benefits of Chaodian Culture. Mr. Rui Chen, Mr. Yi Xu, Ms. Ni Li, Mr.
(5) Chaodian (Shanghai) Technology Co., Ltd., or “Chaodian Technology”, has entered into a series of contractual arrangements with Shanghai Chaodian Culture Communication Co., Ltd., or “Chaodian Culture”, and its individual shareholders, through which we obtained control over the operations of, and enjoyed all economic benefits of Chaodian Culture. Mr. Rui Chen, Ms. Ni Li, Mr. Yi Xu, Mr.
Xujun Chai, Shanghai Kuanyu and Hode Information Technology hold 31.2%, 9.5%, 6.8%, 5.1%, 44.6% and 2.8% equity interests in Chaodian Culture, respectively, as of the date of this annual report. Mr. Xujun Chai is an employee of our company.
Xujun Chai, Shanghai Kuanyu and Hode Information Technology hold 31.2%, 6.8%, 9.5%, 5.1%, 44.6% and 2.8% equity interests in Chaodian Culture, respectively, as of the date of this annual report. Mr. Xujun Chai is an employee of our company.
Bilibili, its PRC subsidiaries and VIEs, and investors of Bilibili face uncertainty about potential future actions by the PRC government that could affect the enforceability of the contractual arrangements with the VIEs and, consequently, significantly affect the financial performance of the VIEs and our company as a whole.
Bilibili, its PRC subsidiaries and the VIEs, and investors of Bilibili face uncertainty about potential future actions by the PRC government that could affect the enforceability of the contractual arrangements with the VIEs and, consequently, significantly affect the financial performance of the VIEs and our company as a whole.
These fees shall be recognized as expenses of the VIEs, with a corresponding amount as service income by our PRC subsidiaries and eliminate in consolidation. For income tax purposes, our PRC subsidiaries and VIEs file income tax returns on a separate company basis.
These fees shall be recognized as expenses of the VIEs, with a corresponding amount as service income by our PRC subsidiaries and eliminate in consolidation. For income tax purposes, our PRC subsidiaries and the VIEs file income tax returns on a separate company basis.
Financial Information Related to Our Consolidated Affiliated Entities The following table presents the condensed consolidating schedule of financial information of Bilibili Inc., its wholly owned subsidiaries that are the primary beneficiaries of the VIEs, and our other subsidiaries, the VIEs and the VIEs’ subsidiaries as of the dates presented.
Financial Information Related to the Consolidated Affiliated Entities The following table presents the condensed consolidating schedule of financial information of Bilibili Inc., its wholly owned subsidiaries that are the primary beneficiaries of the VIEs, and our other subsidiaries, the VIEs and the VIEs’ subsidiaries as of the dates presented.
Other Subsidiaries Primary Beneficiaries of VIEs VIEs and VIEs’ Subsidiaries Eliminating adjustments Consolidated Totals (RMB, in thousands) Third-party revenues — 258,686 6,257,462 12,867,536 — 19,383,684 Inter-company consulting and services revenues (1) — 590,905 2,367 — (593,272 ) — Other inter-company revenues (2) — 2,054,227 403,379 1,574,896 (4,032,502 ) — Total revenues — 2,903,818 6,663,208 14,442,432 (4,625,774 ) 19,383,684 Third-party costs and expenses (12,405 ) (5,448,830 ) (4,068,228 ) (16,283,295 ) — (25,812,758 ) Inter-company consulting and services costs and expenses (1) — — — (593,272 ) 593,272 — Other inter-company costs and expenses (2) — (515,329 ) (3,246,077 ) (271,096 ) 4,032,502 — Total costs and expenses (12,405 ) (5,964,159 ) (7,314,305 ) (17,147,663 ) 4,625,774 (25,812,758 ) Loss from subsidiaries and VIEs (3) (6,713,764 ) (3,518,404 ) (2,897,007 ) — 13,129,175 — (Loss)/Gain from non-operations (63,059 ) (110,321 ) 52,150 (163,146 ) — (284,376 ) Loss before income tax expenses (6,789,228 ) (6,689,066 ) (3,495,954 ) (2,868,377 ) 13,129,175 (6,713,450 ) Income tax expenses — (33,842 ) (22,450 ) (38,997 ) — (95,289 ) Net loss (6,789,228 ) (6,722,908 ) (3,518,404 ) (2,907,374 ) 13,129,175 (6,808,739 ) Net loss attributable to noncontrolling interests — 9,144 — 10,367 — 19,511 Net loss attributable to Bilibili Inc.’s shareholders (6,789,228 ) (6,713,764 ) (3,518,404 ) (2,897,007 ) 13,129,175 (6,789,228 ) For the Year Ended December 31, 2020 Bilibili Inc.
Other Subsidiaries Primary Beneficiaries of VIEs VIEs and VIEs’ Subsidiaries Eliminating adjustments Consolidated Totals (RMB, in thousands) Third-party revenues — 258,686 6,257,462 12,867,536 — 19,383,684 Inter-company consulting and services revenues (1) — 590,905 2,367 — (593,272 ) — Other inter-company revenues (2) — 2,054,227 403,379 1,574,896 (4,032,502 ) — Total revenues — 2,903,818 6,663,208 14,442,432 (4,625,774 ) 19,383,684 Third-party costs and expenses (12,405 ) (5,448,830 ) (4,068,228 ) (16,283,295 ) — (25,812,758 ) Inter-company consulting and services costs and expenses (1) — — — (593,272 ) 593,272 — Other inter-company costs and expenses (2) — (515,329 ) (3,246,077 ) (271,096 ) 4,032,502 — Total costs and expenses (12,405 ) (5,964,159 ) (7,314,305 ) (17,147,663 ) 4,625,774 (25,812,758 ) Net loss from subsidiaries and net loss of VIEs and VIEs’ subsidiaries (3) (6,713,764 ) (3,518,404 ) (2,897,007 ) — 13,129,175 — (Loss)/Gain from non-operations (63,059 ) (110,321 ) 52,150 (163,146 ) — (284,376 ) Loss before income tax expenses (6,789,228 ) (6,689,066 ) (3,495,954 ) (2,868,377 ) 13,129,175 (6,713,450 ) Income tax — (33,842 ) (22,450 ) (38,997 ) — (95,289 ) Net loss (6,789,228 ) (6,722,908 ) (3,518,404 ) (2,907,374 ) 13,129,175 (6,808,739 ) Net loss attributable to noncontrolling interests — 9,144 — 10,367 — 19,511 Net loss attributable to Bilibili Inc.’s shareholders (6,789,228 ) (6,713,764 ) (3,518,404 ) (2,897,007 ) 13,129,175 (6,789,228 ) For the Year Ended December 31, 2020 Bilibili Inc.
Personal Information and Privacy • In October 2020, the SCNPC revised and promulgated the Law of the PRC on the Protection of Minors (2020 Revision), which took effect on June 1, 2021, according to which, information processors must follow the principles of legality, legitimacy and necessity when processing personal information of minors via internet, and must obtain consent from minors’ parents or other guardians when processing personal information of minors under age of 14.
Personal Information and Privacy • In October 2020, the SCNPC revised and promulgated the Law of the PRC on the Protection of Minors (2020 Revision), which took effect on June 1, 2021, according to which, information processors must follow the principles of legality, legitimacy and necessity when processing personal information of minors via internet, and must obtain consent from minors’ parents or other guardians when processing personal information of minors under the age of 14.
See “—Increases in the costs of content on our platform may have an adverse effect on our business, financial condition and results of operations.” We also anticipate further expansion in global markets. Such expansion will increase the complexity of our operations and might place a significant strain on our management, operational and financial resources.
See “—Increases in the content costs on our platform may have an adverse effect on our business, financial condition and results of operations.” We also anticipate further expansion in global markets. Such expansion will increase the complexity of our operations and might place a significant strain on our management, operational and financial resources.
Furthermore, as our business and user base further expand, we may have to devote more resources in encouraging our hosts and talent agencies to produce content that meets the varied interests of a diverse user base, which would increase the costs of content on our platform.
Furthermore, as our business and user base further expand, we may have to devote more resources in encouraging our hosts and talent agencies to produce content that meets the varied interests of a diverse user base, which would increase the content costs on our platform.
As a result of these contractual arrangements, we exert control over our consolidated affiliated entities and consolidate their financial results in our financial statements under U.S. GAAP. Our consolidated affiliated entities hold the licenses, approvals and key assets that are essential for our operations.
As a result of these contractual arrangements, we exert control over the Consolidated Affiliated Entities and consolidate their financial results in our financial statements under U.S. GAAP. The Consolidated Affiliated Entities hold the licenses, approvals and key assets that are essential for our operations.
If the PRC government deems that our contractual arrangements with the VIEs do not comply with PRC regulatory restrictions on foreign investment in the relevant industries, or if these regulations or the interpretation of existing regulations change or are interpreted differently in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.
If the PRC government deems that our contractual arrangements with the VIEs do not comply with PRC regulatory restrictions on foreign investment in the relevant industries, or if these regulations or the interpretation of existing regulations change or are interpreted differently in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.
Bilibili, its PRC subsidiaries and VIEs, and investors of Bilibili face uncertainty about potential future actions by the PRC government that could affect the enforceability of the contractual arrangements with the VIEs and, consequently, significantly affect the financial performance of the VIEs and our company as a group.
Bilibili, its PRC subsidiaries and the VIEs, and investors of Bilibili face uncertainty about potential future actions by the PRC government that could affect the enforceability of the contractual arrangements with the VIEs and, consequently, significantly affect the financial performance of the VIEs and our company as a group.
GAAP, which would have a material adverse effect on our operations and result in the value of the securities diminishing substantially. Our shares may decline in value if we are unable to assert our contractual control rights over the assets of our PRC subsidiaries and VIEs that conduct all or substantially all of our operations.
GAAP, which would have a material adverse effect on our operations and result in the value of the securities diminishing substantially. Our shares may decline in value if we are unable to assert our contractual control rights over the assets of our PRC subsidiaries and the VIEs that conduct all or substantially all of our operations.
Bilibili, its PRC subsidiaries and VIEs and investors of Bilibili face uncertainty about potential future actions by the PRC government that could affect the enforceability of the contractual arrangements with the VIEs and, consequently, significantly affect the financial performance of the VIEs and our company as a group.
Bilibili, its PRC subsidiaries and the VIEs and investors of Bilibili face uncertainty about potential future actions by the PRC government that could affect the enforceability of the contractual arrangements with the VIEs and, consequently, significantly affect the financial performance of the VIEs and our company as a group.
Upon any sale of Class Y ordinary shares by a holder thereof to any person other than Rui Chen, Yi Xu and Ni Li or any entity which is not ultimately controlled by any of Rui Chen, Yi Xu or Ni Li, such Class Y ordinary shares shall be automatically and immediately converted into the same number of Class Z ordinary shares.
Upon any sale of Class Y ordinary shares by a holder thereof to any person other than Rui Chen, Ni Li and Yi Xu or any entity which is not ultimately controlled by any of Rui Chen, Ni Li or Yi Xu, such Class Y ordinary shares shall be automatically and immediately converted into the same number of Class Z ordinary shares.
As of the date of this annual report, three of our directors, Rui Chen, Yi Xu and Ni Li, beneficially own all of our issued Class Y ordinary shares.
As of the date of this annual report, three of our directors, Rui Chen, Ni Li and Yi Xu, beneficially own all of our issued Class Y ordinary shares.
Due to the disparate voting powers attached to these two classes of ordinary shares, three of our directors, Rui Chen, Yi Xu and Ni Li, beneficially own all of our issued Class Y ordinary shares.
Due to the disparate voting powers attached to these two classes of ordinary shares, three of our directors, Rui Chen, Ni Li and Yi Xu, beneficially own all of our issued Class Y ordinary shares.
PRC laws and regulations, including this notice, have provided various restrictions on virtual currency and imposed various requirements and obligations on online game operators with respect to the virtual currency used in their games, including that (i) any entity engaged in the services relating to the issuance or trading of virtual currencies for online games shall comply with the conditions relevant to the establishment of an internet culture entity for business purpose and file an application with the provincial administrative department of culture at its locality for preliminary examination and then with the MOC for approval; (ii) the total amount of virtual currency issued by online game operators and the amount purchased by individual users in China is subject to limits, and online game operators are required to report the total amount of their issued virtual currency on a quarterly basis and are prohibited from issuing disproportionate amounts of virtual currency in order to generate revenues; (iii) virtual currency may only be provided to users in exchange for payment in legal currency and may only be used to pay for virtual goods and services of the issuer of the currency, and online game operators are required to keep transaction data records for no less than 180 days; (iv) online game operators are prohibited from providing lucky draws or lotteries that are conducted on the condition that participants contribute cash or virtual currency in exchange for game props or virtual currencies; (v) online game operators are prohibited from providing virtual currency trading services to minors; and (vi) companies involved with virtual currency in China must be either issuers or trading platforms, and may not operate simultaneously both as issuers and as trading platforms.
PRC laws and regulations, including this notice, have provided various restrictions on virtual currency and imposed various requirements and obligations on online game operators with respect to the virtual currency used in their games, including that (i) any entity engaged in the services relating to the issuance or trading of virtual currencies for online games shall comply with the conditions relevant to the establishment of an internet culture entity for business purpose and file an application with the provincial administrative department of culture at its locality for preliminary examination and then with the MOC for approval; (ii) the total amount of virtual currency issued by online game operators and the amount purchased by individual users in mainland China is subject to limits, and online game operators are required to report the total amount of their issued virtual currency on a quarterly basis and are prohibited from issuing disproportionate amounts of virtual currency in order to generate revenues; (iii) virtual currency may only be provided to users in exchange for payment in legal currency and may only be used to pay for virtual goods and services of the issuer of the currency, and online game operators are required to keep transaction data records for no less than 180 days; (iv) online game operators are prohibited from providing lucky draws or lotteries that are conducted on the condition that participants contribute cash or virtual currency in exchange for game props or virtual currencies; (v) online game operators are prohibited from providing virtual currency trading services to minors; and (vi) companies involved with virtual currency in mainland China must be either issuers or trading platforms, and may not operate simultaneously both as issuers and as trading platforms.
According to Circular 82, an offshore incorporated enterprise controlled by a PRC enterprise or a PRC enterprise group will be regarded as a PRC tax resident enterprise by virtue of having its “de facto management body” in China and will be subject to PRC enterprise income tax on its global income only if all of the following conditions are met: (i) senior management and core management departments in charge of its daily operations function have their presence mainly in the PRC; (ii) decisions relating to the enterprise’s financial matters (such as loan, financing, financial risk management, etc.) and human resource matters (such as appointment, dismissal and remuneration, etc.) are made or are subject to determination or approval by organizations or personnel in the PRC; (iii) the enterprise’s primary assets, accounting books and records, company seals, and board and shareholder resolutions, are located or maintained in the PRC; and (iv) at least 50% of voting board members or senior executives habitually reside in the PRC.
According to Circular 82, an offshore incorporated enterprise controlled by a PRC enterprise or a PRC enterprise group will be regarded as a PRC tax resident enterprise by virtue of having its “de facto management body” in mainland China and will be subject to PRC enterprise income tax on its global income only if all of the following conditions are met: (i) senior management and core management departments in charge of its daily operations function have their presence mainly in the PRC; (ii) decisions relating to the enterprise’s financial matters (such as loan, financing, financial risk management, etc.) and human resource matters (such as appointment, dismissal and remuneration, etc.) are made or are subject to determination or approval by organizations or personnel in the PRC; (iii) the enterprise’s primary assets, accounting books and records, company seals, and board and shareholder resolutions, are located or maintained in the PRC; and (iv) at least 50% of voting board members or senior executives habitually reside in the PRC.
Other Subsidiaries Primary Beneficiaries of VIEs VIEs and VIEs’ Subsidiaries Eliminating adjustments Consolidated Totals (RMB, in thousands) Consulting and services charges from/(to) Group companies — 637,787 — (637,787 ) — — Other operating cashflow from/(to) Group companies — 854,325 (2,538,232 ) 1,683,907 — — Operating cashflow (to)/from third-parties (104,672 ) (3,382,667 ) 2,569,410 (1,729,079 ) — (2,647,008 ) Net cash (used in)/provided by operating activities (104,672 ) (1,890,555 ) 31,178 (682,959 ) — (2,647,008 ) Investments in and loans to subsidiaries, VIEs and VIEs’ subsidiaries (3)(4) (11,168,671 ) (2,409,051 ) (3,012,727 ) — 16,590,449 — Purchase of short-term investments (48,781,106 ) (3,643,036 ) (6,714,400 ) (12,610,305 ) — (71,748,847 ) Maturities of short-term investments 36,744,305 3,224,958 7,601,200 12,954,425 — 60,524,888 Placements of time deposits (10,658,126 ) — — (39,318 ) — (10,697,444 ) Maturities of time deposits 7,600,828 — — 54,319 — 7,655,147 Other investing activities (1,153,850 ) (4,811,039 ) (1,081,210 ) (3,265,756 ) — (10,311,855 ) Net cash used in investing activities (27,416,620 ) (7,638,168 ) (3,207,137 ) (2,906,635 ) 16,590,449 (24,578,111 ) Investments and loans from subsidiaries, VIEs and VIEs’ subsidiaries (3)(4) — 10,407,294 2,875,929 3,307,226 (16,590,449 ) — Proceeds from issuance of ordinary shares, net of issuance costs of HKD337,143 19,288,423 — — — — 19,288,423 Proceeds from issuance of convertible senior notes, net of issuance costs of US$13,857 10,085,520 — — — — 10,085,520 Other financing activities 3 571,548 143,658 300,000 — 1,015,209 Net cash provided by financing activities 29,373,946 10,978,842 3,019,587 3,607,226 (16,590,449 ) 30,389,152 12 Table of Contents For the Year Ended December 31, 2020 Bilibili Inc.
Other Subsidiaries Primary Beneficiaries of VIEs VIEs and VIEs’ Subsidiaries Eliminating adjustments Consolidated Totals (RMB, in thousands) Consulting and services charges from/(to) Group companies — 637,787 — (637,787 ) — — Other operating cashflow from/(to) Group companies — 854,325 (2,538,232 ) 1,683,907 — — Operating cashflow (to)/from third-parties (104,672 ) (3,382,667 ) 2,569,410 (1,729,079 ) — (2,647,008 ) Net cash (used in)/provided by operating activities (104,672 ) (1,890,555 ) 31,178 (682,959 ) — (2,647,008 ) Investments in and loans to subsidiaries, VIEs and VIEs’ subsidiaries (3)(4) (11,168,671 ) (2,409,051 ) (3,012,727 ) — 16,590,449 — Purchase of short-term investments (48,781,106 ) (3,643,036 ) (6,714,400 ) (12,610,305 ) — (71,748,847 ) Maturities of short-term investments 36,744,305 3,224,958 7,601,200 12,954,425 — 60,524,888 Placements of time deposits (10,658,126 ) — — (39,318 ) — (10,697,444 ) Maturities of time deposits 7,600,828 — — 54,319 — 7,655,147 Other investing activities (1,153,850 ) (4,811,039 ) (1,081,210 ) (3,265,756 ) — (10,311,855 ) Net cash used in investing activities (27,416,620 ) (7,638,168 ) (3,207,137 ) (2,906,635 ) 16,590,449 (24,578,111 ) Investments and loans from subsidiaries, VIEs and VIEs’ subsidiaries (3)(4) — 10,407,294 2,875,929 3,307,226 (16,590,449 ) — Proceeds from issuance of ordinary shares, net of issuance costs of HKD337,143 19,288,423 — — — — 19,288,423 Proceeds from issuance of convertible senior notes, net of issuance costs of US$13,857 10,085,520 — — — — 10,085,520 Other financing activities 3 571,548 143,658 300,000 — 1,015,209 Net cash provided by financing activities 29,373,946 10,978,842 3,019,587 3,607,226 (16,590,449 ) 30,389,152 For the Year Ended December 31, 2020 Bilibili Inc.
When determining whether there is a “reasonable commercial purpose” of the transaction arrangement, features to be taken into consideration include: whether the main value of the equity interest of the relevant offshore enterprise derives from PRC taxable assets; whether the assets of the relevant offshore enterprise mainly consist of direct or indirect investment in China or if its income mainly derives from China; whether the offshore enterprise and its subsidiaries directly or indirectly holding PRC taxable assets have real commercial nature which is evidenced by their actual function and risk exposure; the duration of existence of the shareholders, the business model and organizational structure of the offshore enterprise; the replicability of the transaction by direct transfer of PRC taxable assets; and the offshore tax situation of such indirect transfer and applicable tax treaties or similar arrangements.
When determining whether there is a “reasonable commercial purpose” of the transaction arrangement, features to be taken into consideration include: whether the main value of the equity interest of the relevant offshore enterprise derives from PRC taxable assets; whether the assets of the relevant offshore enterprise mainly consist of direct or indirect investment in mainland China or if its income mainly derives from mainland China; whether the offshore enterprise and its subsidiaries directly or indirectly holding PRC taxable assets have real commercial nature which is evidenced by their actual function and risk exposure; the duration of existence of the shareholders, the business model and organizational structure of the offshore enterprise; the replicability of the transaction by direct transfer of PRC taxable assets; and the offshore tax situation of such indirect transfer and applicable tax treaties or similar arrangements.
According to the judicial interpretation, courts in China shall not, among other things, support contracted parties to claim foreign investment contracts in sectors not on the Special Administrative Measures (Negative List) for Foreign Investment Access (2021 Version), most recently jointly promulgated by the Ministry of Commerce of the PRC, or the MOFCOM and the National Development and Reform Commission of the PRC, or the NDRC, on December 27, 2021 and became effective on January 1, 2022, or the Negative List (2021), as void because the contracts have not been approved or registered by administrative authorities.
According to the judicial interpretation, courts in mainland China shall not, among other things, support contracted parties to claim foreign investment contracts in sectors not on the Special Administrative Measures (Negative List) for Foreign Investment Access (2021 Version), most recently jointly promulgated by the Ministry of Commerce of the PRC, or the MOFCOM and the National Development and Reform Commission of the PRC, or the NDRC, on December 27, 2021 and became effective on January 1, 2022, or the Negative List (2021), as void because the contracts have not been approved or registered by administrative authorities.
Under the PRC Individual Income Tax Law and its implementation rules, dividends from sources within China paid to foreign individual investors who are not PRC residents are generally subject to a PRC withholding tax at a rate of 20% and gains from PRC sources realized by such investors on the transfer of ADSs and/or Class Z ordinary shares are generally subject to 20% PRC income tax, in each case, subject to any reduction or exemption set forth in applicable tax treaties and similar arrangements and PRC laws.
Under the PRC Individual Income Tax Law and its implementation rules, dividends from sources within mainland China paid to foreign individual investors who are not PRC residents are generally subject to a PRC withholding tax at a rate of 20% and gains from PRC sources realized by such investors on the transfer of ADSs and/or Class Z ordinary shares are generally subject to 20% PRC income tax, in each case, subject to any reduction or exemption set forth in applicable tax treaties and similar arrangements and PRC laws.
If we are found in violation of any PRC laws or regulations or if the contractual arrangements among our WFOEs, the VIEs and their shareholders are determined as illegal or invalid by the PRC court, arbitral tribunal or regulatory authorities, the relevant governmental authorities would have broad discretion in dealing with such violation, including, without limitation: • revoking the business licenses and/or operating licenses of such entities; • imposing fines on us; • confiscating any of our income that they deem to be obtained through illegal operations; • discontinuing or placing restrictions or onerous conditions on our operations; 41 Table of Contents • placing restrictions on our right to collect revenues; • shutting down our servers or blocking our app/websites; • requiring us to restructure the operations in such a way as to compel us to establish a new enterprise, re-apply for the necessary licenses or relocate our businesses, staff and assets; • imposing additional conditions or requirements with which we may not be able to comply; or • taking other regulatory or enforcement actions against us that could be harmful to our business.
If we are found in violation of any PRC laws or regulations or if the contractual arrangements among our WFOEs, the VIEs and their shareholders are determined as illegal or invalid by the PRC court, arbitral tribunal or regulatory authorities, the relevant governmental authorities would have broad discretion in dealing with such violation, including, without limitation: • revoking the business licenses and/or operating licenses of such entities; • imposing fines on us; • confiscating any of our income that they deem to be obtained through illegal operations; 46 Table of Contents • discontinuing or placing restrictions or onerous conditions on our operations; • placing restrictions on our right to collect revenues; • shutting down our servers or blocking our app/websites; • requiring us to restructure the operations in such a way as to compel us to establish a new enterprise, re-apply for the necessary licenses or relocate our businesses, staff and assets; • imposing additional conditions or requirements with which we may not be able to comply; or • taking other regulatory or enforcement actions against us that could be harmful to our business.
Other Subsidiaries Primary Beneficiaries of VIEs VIEs and VIEs’ Subsidiaries Eliminating adjustments Consolidated Totals (RMB, in thousands) Cash and cash equivalents 1,748,896 4,956,403 440,695 377,114 — 7,523,108 Time deposits 7,625,337 — — 6,997 — 7,632,334 Accounts receivable, net — 79,350 778,667 524,311 — 1,382,328 Amounts due from Group companies (4) 23,306,176 9,329,586 8,680,893 391,951 (41,708,606 ) — Amount due from related parties — 1,937,592 1,741 101,983 — 2,041,316 Prepayments and other current assets 11,773 280,689 708,401 1,806,185 — 2,807,048 Short-term investments 13,107,720 767,935 257,943 927,124 — 15,060,722 Long-term investments, net 1,448,100 2,038,157 270,801 1,745,466 — 5,502,524 Other non-current assets — 3,711,745 1,465,037 4,926,989 — 10,103,771 Total assets 47,248,002 23,101,457 12,604,178 10,808,120 (41,708,606 ) 52,053,151 Accounts payable — 244,808 951,797 3,164,301 — 4,360,906 Salary and welfare payables — 641,560 10,883 343,008 — 995,451 Taxes payable — 55,575 19,378 128,817 — 203,770 Short-term loans — 688,448 143,658 400,000 — 1,232,106 Deferred revenue 40,167 962 411,800 2,192,460 — 2,645,389 Accrued liabilities and other payables 126,512 807,547 298,373 1,184,523 — 2,416,955 Amounts due to Group companies (4) — 24,009,991 10,484,469 7,214,146 (41,708,606 ) — Amounts due to related parties — 98,207 326 117,901 — 216,434 Other long-term payable 17,784,092 259,161 102 222,719 — 18,266,074 Deficit in subsidiaries and VIEs (3) 7,593,564 3,887,067 4,170,459 — (15,651,090 ) — Total liabilities 25,544,335 30,693,326 16,491,245 14,967,875 (57,359,696 ) 30,337,085 Total Bilibili Inc’s Shareholders’ equity/(deficit) (3) 21,703,667 (7,593,564 ) (3,887,067 ) (4,170,459 ) 15,651,090 21,703,667 Noncontrolling interests — 1,695 — 10,704 — 12,399 Total shareholders’ equity/(deficit) 21,703,667 (7,591,869 ) (3,887,067 ) (4,159,755 ) 15,651,090 21,716,066 Total liabilities and shareholders’ equity/(deficit) 47,248,002 23,101,457 12,604,178 10,808,120 (41,708,606 ) 52,053,151 11 Table of Contents As of December 31, 2020 Bilibili Inc.
Other Subsidiaries Primary Beneficiaries of VIEs VIEs and VIEs’ Subsidiaries Eliminating adjustments Consolidated Totals (RMB, in thousands) Cash and cash equivalents 1,748,896 4,956,403 440,695 377,114 — 7,523,108 Time deposits 7,625,337 — — 6,997 — 7,632,334 Accounts receivable, net — 79,350 778,667 524,311 — 1,382,328 Amounts due from Group companies (4) 23,306,176 9,329,586 8,680,893 391,951 (41,708,606 ) — Amount due from related parties — 1,937,592 1,741 101,983 — 2,041,316 Prepayments and other current assets 11,773 280,689 708,401 1,806,185 — 2,807,048 Short-term investments 13,107,720 767,935 257,943 927,124 — 15,060,722 Long-term investments, net 1,448,100 2,038,157 270,801 1,745,466 — 5,502,524 Other non-current assets — 3,711,745 1,465,037 4,926,989 — 10,103,771 Total assets 47,248,002 23,101,457 12,604,178 10,808,120 (41,708,606 ) 52,053,151 Accounts payable — 244,808 951,797 3,164,301 — 4,360,906 Salary and welfare payables — 641,560 10,883 343,008 — 995,451 Taxes payable — 55,575 19,378 128,817 — 203,770 Short-term loan — 688,448 143,658 400,000 — 1,232,106 Deferred revenue 40,167 962 411,800 2,192,460 — 2,645,389 Accrued liabilities and other payables 126,512 807,547 298,373 1,184,523 — 2,416,955 Amounts due to Group companies (4) — 24,009,991 10,484,469 7,214,146 (41,708,606 ) — Amounts due to related parties — 98,207 326 117,901 — 216,434 Other long-term liabilities 17,784,092 259,161 102 222,719 — 18,266,074 Deficit in subsidiaries and net loss of VIEs and VIEs’ subsidiaries (3) 7,593,564 3,887,067 4,170,459 — (15,651,090 ) — Total liabilities 25,544,335 30,693,326 16,491,245 14,967,875 (57,359,696 ) 30,337,085 Total Bilibili Inc’s Shareholders’ equity/(deficit) (3) 21,703,667 (7,593,564 ) (3,887,067 ) (4,170,459 ) 15,651,090 21,703,667 Noncontrolling interests — 1,695 — 10,704 — 12,399 Total shareholders’ equity/(deficit) 21,703,667 (7,591,869 ) (3,887,067 ) (4,159,755 ) 15,651,090 21,716,066 Total liabilities and shareholders’ equity/(deficit) 47,248,002 23,101,457 12,604,178 10,808,120 (41,708,606 ) 52,053,151 As of December 31, 2020 Bilibili Inc.
The National People’s Congress approved the PRC Foreign Investment Law, or the 2019 FIL, on March 15, 2019, effective from January 1, 2020, and the State Council approved the Regulation on Implementing the PRC Foreign Investment Law, or the Implementation Regulations, on December 26, 2019, effective from January 1, 2020, which replaced the trio of existing laws regulating foreign investment in China, namely, the Sino-foreign Equity Joint Venture Enterprise Law, the Sino-foreign Cooperative Joint Venture Enterprise Law and the Wholly Foreign-invested Enterprise Law, together with their implementation rules and ancillary regulations.
The National People’s Congress approved the PRC Foreign Investment Law, or the 2019 FIL, on March 15, 2019, effective from January 1, 2020, and the State Council approved the Regulation on Implementing the PRC Foreign Investment Law, or the Implementation Regulations, on December 26, 2019, effective from January 1, 2020, which replaced the trio of existing laws regulating foreign investment in mainland China, namely, the Sino-foreign Equity Joint Venture Enterprise Law, the Sino-foreign Cooperative Joint Venture Enterprise Law and the Wholly Foreign-invested Enterprise Law, together with their implementation rules and ancillary regulations.
Although substantially all of our business operations are in China, it is unclear whether dividends we pay with respect to our Class Z ordinary shares and/or the ADSs, or the gain realized from the transfer of our Class Z ordinary shares and/or the ADSs, would be treated as income derived from sources within China and as a result be subject to PRC income tax if we were considered a PRC resident enterprise, as described above.
Although substantially all of our business operations are in mainland China, it is unclear whether dividends we pay with respect to our Class Z ordinary shares and/or the ADSs, or the gain realized from the transfer of our Class Z ordinary shares and/or the ADSs, would be treated as income derived from sources within mainland China and as a result be subject to PRC income tax if we were considered a PRC resident enterprise, as described above.
The delisting of the ADSs, or the threat of their being delisted, may materially and adversely affect the value of your investment.” Upon the occurrence of a fundamental change, holders of the Bilibili Convertible Notes will have the right, at their option, to require us to repurchase all of their Bilibili Convertible Notes or any portion of the principal amount at a repurchase price equal to 100% of the principal amount of the notes to be repurchased, plus accrued and unpaid interest, if any.
The delisting of the ADSs, or the threat of their being delisted, may materially and adversely affect the value of your investment.” Upon the occurrence of a fundamental change, holders of the Bilibili Convertible Senior Notes will have the right, at their option, to require us to repurchase all of their Bilibili Convertible Senior Notes or any portion of the principal amount at a repurchase price equal to 100% of the principal amount of the notes to be repurchased, plus accrued and unpaid interest, if any.
These regulatory authorities may impose fines and penalties on our operations in China, limit our ability to pay dividends outside of China, limit our operating privileges in China, delay or restrict the repatriation of the proceeds from our offshore offerings into China or take other actions that could materially and adversely affect our business, financial condition, results of operations, and prospects, as well as the trading price of our listed securities.
These regulatory authorities may impose fines and penalties on our operations in mainland China, limit our ability to pay dividends outside of mainland China, limit our operating privileges in mainland China, delay or restrict the repatriation of the proceeds from our offshore offerings into mainland China or take other actions that could materially and adversely affect our business, financial condition, results of operations, and prospects, as well as the trading price of our listed securities.
The PRC government has wide discretion in regulating online activities and, irrespective of our efforts to control the content on our platform, government campaigns and other actions to reduce illicit content and activities could subject us to negative press or regulatory challenges and sanctions, including imposition of fines, suspension or revocation of our licenses to operate in China or a ban of our platform, including closure of one or more parts of or our entire business.
The PRC government has wide discretion in regulating online activities and, irrespective of our efforts to control the content on our platform, government campaigns and other actions to reduce illicit content and activities could subject us to negative press or regulatory challenges and sanctions, including imposition of fines, suspension or revocation of our licenses to operate in mainland China or a ban of our platform, including closure of one or more parts of or our entire business.
Where the underlying transfer relates to the immovable properties located in China or to equity investments in a PRC resident enterprise, which is not related to a PRC establishment or place of business of a non-resident enterprise, a PRC enterprise income tax of 10% would apply, subject to available preferential tax treatment under applicable tax treaties or similar arrangements, and the party who is obligated to make the transfer payments has the withholding obligation.
Where the underlying transfer relates to the immovable properties located in mainland China or to equity investments in a PRC resident enterprise, which is not related to a PRC establishment or place of business of a non-resident enterprise, a PRC enterprise income tax of 10% would apply, subject to available preferential tax treatment under applicable tax treaties or similar arrangements, and the party who is obligated to make the transfer payments has the withholding obligation.
As a result, a number of mobile apps were condemned publicly for their non-compliance with personal information protection policies, including, among other non-compliance actions, the failure to publish rules on the collection and improper use of users’ personal information, the failure to provide channels for users to access and revise their information, the failure to provide functions for users to cancel accounts, the unauthorized collection of personal information, the unreasonable requests for access, and the unauthorized sharing of information with third parties.
As a result, a number of mobile apps were condemned publicly for their noncompliance with personal information protection policies, including, among other non-compliance actions, the failure to publish rules on the collection and improper use of users’ personal information, the failure to provide channels for users to access and revise their information, the failure to provide functions for users to cancel accounts, the unauthorized collection of personal information, the unreasonable requests for access, and the unauthorized sharing of information with third parties.
In 2009, the STA issued the Circular Regarding the Determination of Chinese-Controlled Offshore Incorporated Enterprises as PRC Tax Resident Enterprises on the Basis of De Facto Management Bodies which was most recently amended in December 2017, or the Circular 82, which provides certain specific criteria for determining whether the “de facto management body” of a PRC-controlled enterprise that is incorporated offshore is located in China.
In 2009, the STA issued the Circular Regarding the Determination of Chinese-Controlled Offshore Incorporated Enterprises as PRC Tax Resident Enterprises on the Basis of De Facto Management Bodies which was most recently amended in December 2017, or the Circular 82, which provides certain specific criteria for determining whether the “de facto management body” of a PRC-controlled enterprise that is incorporated offshore is located in mainland China.
Risk Factors—Risks Related to Doing Business in China—The PRC government’s significant oversight over our business operation could result in a material adverse change in our operations and the value of our Class Z ordinary shares and the ADSs.” Risks and uncertainties arising from the legal system in China, including risks and uncertainties regarding the enforcement of laws and quickly evolving rules and regulations in China, could result in a material adverse change in our operations and the value of our securities.
Risk Factors—Risks Related to Doing Business in China—The PRC government’s significant oversight over our business operation could result in a material adverse change in our operations and the value of our Class Z ordinary shares and the ADSs.” Risks and uncertainties arising from the legal system in mainland China, including risks and uncertainties regarding the enforcement of laws and quickly evolving rules and regulations in mainland China, could result in a material adverse change in our operations and the value of our securities.
The “VIE” structure, or VIE structure, has been adopted by many PRC-based companies, including us, to obtain necessary licenses and permits in the industries that are currently subject to foreign investment restrictions in China. See “Item 4. Information on the Company—C. Organizational Structure” for more details about these contractual arrangements.
The “VIE” structure, or VIE structure, has been adopted by many PRC-based companies, including us, to obtain necessary licenses and permits in the industries that are currently subject to foreign investment restrictions in mainland China. See “Item 4. Information on the Company—C. Organizational Structure” for more details about these contractual arrangements.
If investors make investment decisions based on operating metrics we disclose that are inaccurate, we may also face potential lawsuits or disputes. We do not have any business insurance coverage. The insurance industry in China is still in an early stage of development, and insurance companies in China currently offer limited business-related insurance products.
If investors make investment decisions based on operating metrics we disclose that are inaccurate, we may also face potential lawsuits or disputes. We do not have any business insurance coverage. The insurance industry in mainland China is still in an early stage of development, and insurance companies in mainland China currently offer limited business-related insurance products.
The commercial internet information service, internet audio-visual program services, online cultural activities (except for music), the radio and television program production and operation business, and the production of audio-visual products and/or electronic publications that we conduct through our consolidated affiliated entities are subject to foreign investment restrictions set forth in the Negative List (2021).
The commercial internet information service, internet audio-visual program services, online cultural activities (except for music), the radio and television program production and operation business, and the production of audio-visual products and/or electronic publications that we conduct through the Consolidated Affiliated Entities are subject to foreign investment restrictions set forth in the Negative List (2021).
Online game operators are required to explore the manner to notify users of different ages about the online games based on various criteria, such as the games’ content and the amount of money anticipated to be used in the games, on the game’s download, registration and log-in pages in a prominent way. For more information, see “Item 4.
Online game operators are required to explore the manner to notify users of different ages about the online games based on various criteria, such as the games’ content and the amount of money anticipated to be used in the games, on the games’ download, registration and log-in pages in a prominent way. For more information, see “Item 4.
If the VIEs or their shareholders fail to perform their respective obligations under the contractual arrangements, we may incur substantial costs and expend substantial resources to enforce our rights. These contractual arrangements are governed by and interpreted in accordance with PRC law, and disputes arising from these contractual arrangements will be resolved through arbitration in China.
If the VIEs or their shareholders fail to perform their respective obligations under the contractual arrangements, we may incur substantial costs and expend substantial resources to enforce our rights. These contractual arrangements are governed by and interpreted in accordance with PRC law, and disputes arising from these contractual arrangements will be resolved through arbitration in mainland China.
Moreover, different PRC regulatory bodies, including the Standing Committee of the National People’s Congress, or the SCNPC, the Ministry of Industry and Information Technology, or the MIIT, the Cyberspace Administration of China, the CAC, the Ministry of Public Security, or the MPS and State Administration of Market Regulation, or the SAMR, have enforced data privacy and protections laws and regulations with varying standards and applications.
Moreover, different PRC regulatory bodies, including the Standing Committee of the National People’s Congress, or the SCNPC, the Ministry of Industry and Information Technology, or the MIIT, the Cyberspace Administration of China, the CAC, the Ministry of Public Security, or the MPS and State Administration for Market Regulation, or the SAMR, have enforced data privacy and protections laws and regulations with varying standards and applications.
In addition, we may be subject to administrative actions brought by the National Copyright Administration of China or its local branches or related law enforcement departments for alleged copyright infringement. The validity, enforceability and scope of protection of intellectual property rights in internet-related industries, particularly in China, are uncertain and still evolving.
In addition, we may be subject to administrative actions brought by the National Copyright Administration of China or its local branches or related law enforcement departments for alleged copyright infringement. The validity, enforceability and scope of protection of intellectual property rights in internet-related industries, particularly in mainland China, are uncertain and still evolving.
According to STA Bulletin 7, “PRC taxable assets” include assets attributed to an establishment in China, immovable properties located in China, and equity investments in PRC resident enterprises, in respect of which gains from their transfer by a direct holder, being a non-PRC resident enterprise, would be subject to PRC enterprise income taxes.
According to STA Bulletin 7, “PRC taxable assets” include assets attributed to an establishment in mainland China, immovable properties located in mainland China, and equity investments in PRC resident enterprises, in respect of which gains from their transfer by a direct holder, being a non-PRC resident enterprise, would be subject to PRC enterprise income taxes.
We rely on a series of contractual arrangements with the VIEs and their shareholders, as applicable, including the powers of attorney, to control and operate business of our consolidated affiliated entities. These contractual arrangements are intended to provide us with effective control over our consolidated affiliated entities and allow us to obtain economic benefits from them. See “Item 4.
We rely on a series of contractual arrangements with the VIEs and their shareholders, as applicable, including the powers of attorney, to control and operate business of the Consolidated Affiliated Entities. These contractual arrangements are intended to provide us with effective control over the Consolidated Affiliated Entities and allow us to obtain economic benefits from them. See “Item 4.
In November 2019, the CAC, the NRTA and the MCT, jointly issued the Notice on Promulgation of the Administrative Provisions on Internet Audio-Visual Information Services, which required the providers of internet audio-visual information services to have sufficient capacities to deal with cyber threats, prevent internet illegal and criminal activities, and defend the integrity, safety and availability of online data.
In November 2019, the CAC, the NRTA and the MCT, jointly issued the Notice on Promulgation of the Administrative Provisions on Internet Audio-Visual Information Services, which required the providers of internet audiovisual information services to have sufficient capacities to deal with cyber threats, prevent internet illegal and criminal activities, and defend the integrity, safety and availability of online data.
Shareholder claims or regulatory investigations that are common in the United States (including securities law class actions and fraud claims) generally are difficult to pursue as a matter of law or practicality in China. For example, in China, there are significant legal and other obstacles to providing information needed for regulatory investigations or litigation initiated outside China.
Shareholder claims or regulatory investigations that are common in the United States (including securities law class actions and fraud claims) generally are difficult to pursue as a matter of law or practicality in mainland China. For example, in mainland China, there are significant legal and other obstacles to providing information needed for regulatory investigations or litigation initiated outside mainland China.
Although SAFE Circular 19 allows RMB capital converted from foreign currency-denominated registered capital of a foreign-invested enterprise to be used for equity investments within China, it also reiterates the principle that RMB converted from the foreign currency-denominated capital of a foreign-invested company may not be directly or indirectly used for purposes beyond its business scope.
Although SAFE Circular 19 allows RMB capital converted from foreign currency-denominated registered capital of a foreign-invested enterprise to be used for equity investments within mainland China, it also reiterates the principle that RMB converted from the foreign currency-denominated capital of a foreign-invested company may not be directly or indirectly used for purposes beyond its business scope.
As a result, we may rely in part upon distributions and advances from our subsidiaries in order to help us meet our payment obligations under the the Bilibili Convertible Notes and our other obligations. Our subsidiaries are distinct legal entities and do not have any obligation (legal or otherwise) to provide us with distributions or advances.
As a result, we may rely in part upon distributions and advances from our subsidiaries in order to help us meet our payment obligations under the Bilibili Convertible Senior Notes and our other obligations. Our subsidiaries are distinct legal entities and do not have any obligation (legal or otherwise) to provide us with distributions or advances.
As a result, we need to obtain SAFE approval or registration to use cash generated from the operations of our PRC subsidiaries and VIEs to pay off their respective debt in a currency other than Renminbi owed to entities outside China, or to make other capital expenditure payments outside China in a currency other than Renminbi.
As a result, we need to obtain SAFE approval or registration to use cash generated from the operations of our PRC subsidiaries and the VIEs to pay off their respective debt in a currency other than Renminbi owed to entities outside mainland China, or to make other capital expenditure payments outside mainland China in a currency other than Renminbi.
The loss of the services of any of our executive officers or other key employees could harm our business. Competition for qualified talent in China is intense, particularly in the internet and technology industries. Our future success depends on our ability to attract a large number of qualified employees and retain existing key employees.
The loss of the services of any of our executive officers or other key employees could harm our business. Competition for qualified talent in mainland China is intense, particularly in the internet and technology industries. Our future success depends on our ability to attract a large number of qualified employees and retain existing key employees.
In addition, the Bilibili Convertible Notes each contains similar protections concerning the holders’ right to require us to repurchase their notes upon the occurrence of a fundamental change (as defined in the terms of such notes), as well as similar provisions regarding our ability to redeem the existing notes in case of certain changes in tax law.
In addition, the Bilibili Convertible Senior Notes each contains similar protections concerning the holders’ right to require us to repurchase their notes upon the occurrence of a fundamental change (as defined in the terms of such notes), as well as similar provisions regarding our ability to redeem the existing notes in case of certain changes in tax law.
Pursuant to a special arrangement between Hong Kong and China, such rate may be reduced to 5% if a Hong Kong resident enterprise owns more than 25% of the equity interest in the PRC company. Our current PRC subsidiaries are wholly owned by our Hong Kong subsidiaries, such as Hode HK.
Pursuant to a special arrangement between Hong Kong and mainland China, such rate may be reduced to 5% if a Hong Kong resident enterprise owns more than 25% of the equity interest in the PRC company. Our current PRC subsidiaries are wholly owned by our Hong Kong subsidiaries, such as Hode HK.
Foreign investor or relevant parties in China must declare the security review to the Office of the Working Mechanism prior to the investments in, among other industries, important cultural products and services, important information technology and internet products and services, important financial services, key technologies and other important fields relating to national security, and obtain control in the target enterprise.
Foreign investor or relevant parties in mainland China must declare the security review to the Office of the Working Mechanism prior to the investments in, among other industries, important cultural products and services, important information technology and internet products and services, important financial services, key technologies and other important fields relating to national security, and obtain control in the target enterprise.
In addition, appreciation or depreciation in the value of the Renminbi relative to U.S. dollars would affect our financial results reported in U.S. dollar terms regardless of any underlying change in our business or results of operations. Very limited hedging options are available in China to reduce our exposure to exchange rate fluctuations.
In addition, appreciation or depreciation in the value of the Renminbi relative to U.S. dollars would affect our financial results reported in U.S. dollar terms regardless of any underlying change in our business or results of operations. Very limited hedging options are available in mainland China to reduce our exposure to exchange rate fluctuations.
Any gain realized on the transfer of ADSs or ordinary shares by such non-PRC resident enterprise investors is also subject to 10% PRC income tax if such gain is regarded as income derived from sources within China, unless a tax treaty or similar arrangement provides otherwise.
Any gain realized on the transfer of ADSs or ordinary shares by such non-PRC resident enterprise investors is also subject to 10% PRC income tax if such gain is regarded as income derived from sources within mainland China, unless a tax treaty or similar arrangement provides otherwise.
The Supreme People’s Court of China issued a judicial interpretation on the 2019 FIL, in December 2019, effective from January 1, 2020, to ensure fair and efficient implementation of the 2019 FIL. The judicial interpretation clarifies the issues regarding the validity of the investment contract violating the restrictive or prohibitive requirements in the negative list.
The Supreme People’s Court of mainland China issued a judicial interpretation on the 2019 FIL, in December 2019, effective from January 1, 2020, to ensure fair and efficient implementation of the 2019 FIL. The judicial interpretation clarifies the issues regarding the validity of the investment contract violating the restrictive or prohibitive requirements in the negative list.
While detailed interpretation of or implementation rules under Article 177 have yet to be promulgated, the inability of an overseas securities regulator to directly conduct investigations or collect evidence within China may further increase difficulties faced by you in protecting your interests.
While detailed interpretation of or implementation rules under Article 177 have yet to be promulgated, the inability of an overseas securities regulator to directly conduct investigations or collect evidence within mainland China may further increase difficulties faced by you in protecting your interests.
ITEM 3. KEY INFORMATION Our Holding Company Structure and Contractual Arrangements with the VIEs Bilibili Inc. is not a Chinese operating company but a Cayman Islands holding company with no equity ownership in its VIEs. We conduct our operations primarily through our PRC subsidiaries, the VIEs and their subsidiaries in China.
ITEM 3. KEY INFORMATION Our Holding Company Structure and Contractual Arrangements with the VIEs Bilibili Inc. is not a Chinese operating company but a Cayman Islands holding company with no equity ownership in its VIEs. We conduct our operations primarily through our PRC subsidiaries, the VIEs and their subsidiaries in mainland China.
If we are unable to provide a superior user experience, our user base and user engagement may decline, which may materially and adversely affect our business and growth prospects. We maintain a large content library primarily consisting of PUGV and OGV, and are developing new features to attract and retain our users.
If we are unable to provide a superior user experience, our user base and user engagement may decline, which may materially and adversely affect our business and growth prospects. We maintain a large content library primarily consisting of PUGV and OGV. We are constantly developing new features to attract and retain our users.
In addition, if the imposition of any of these penalties causes us to lose the rights to direct the activities of our consolidated affiliated entities or the right to receive their economic benefits, we would no longer be able to consolidate their financial results in accordance with U.S.
In addition, if the imposition of any of these penalties causes us to lose the rights to direct the activities of the Consolidated Affiliated Entities or the right to receive their economic benefits, we would no longer be able to consolidate their financial results in accordance with U.S.
A lower withholding income tax rate of 5% is applied if the FIE’s immediate holding company is registered in Hong Kong or other jurisdictions that have a tax treaty arrangement with China, subject to specific qualification requirements at the time of the distribution.
A lower withholding income tax rate of 5% is applied if the FIE’s immediate holding company is registered in Hong Kong or other jurisdictions that have a tax treaty arrangement with mainland China, subject to specific qualification requirements at the time of the distribution.
Our failure to repurchase the Bilibili Convertible Notes or pay the redemption price or repay the principal at a time when the repurchase or such payment is required by the respective indenture governing the notes or to pay any cash payable on future conversions of the notes would constitute a default under the respective indenture governing the notes.
Our failure to repurchase the Bilibili Convertible Senior Notes or pay the redemption price or repay the principal at a time when the repurchase or such payment is required by the respective indenture governing the notes or to pay any cash payable on future conversions of the notes would constitute a default under the respective indenture governing the notes.
If we decide to finance our wholly owned PRC subsidiaries by means of capital contributions, these capital contributions are subject to the requirement of making necessary filings in the Foreign Investment Comprehensive Management Information System and registration with other governmental authorities in China.
If we decide to finance our wholly owned PRC subsidiaries by means of capital contributions, these capital contributions are subject to the requirement of making necessary filings in the Foreign Investment Comprehensive Management Information System and registration with other governmental authorities in mainland China.
SAFE Circular 19 and SAFE Circular 16 may significantly limit our ability to transfer any foreign currency we hold, including the net proceeds from our equity offering and notes offering and then to our PRC subsidiaries, which may adversely affect our liquidity and our ability to fund and expand our business in China.
SAFE Circular 19 and SAFE Circular 16 may significantly limit our ability to transfer any foreign currency we hold, including the net proceeds from our equity offering and notes offering and then to our PRC subsidiaries, which may adversely affect our liquidity and our ability to fund and expand our business in mainland China.
In China, a company chop or seal serves as the legal representation of the company towards third parties even when unaccompanied by a signature. Each legally registered company in China is required to maintain a company chop, which must be registered with the local Public Security Bureau.
In mainland China, a company chop or seal serves as the legal representation of the company towards third parties even when unaccompanied by a signature. Each legally registered company in mainland China is required to maintain a company chop, which must be registered with the local Public Security Bureau.
We conduct our business primarily in China. Our operations in China are governed by PRC laws and regulations. PRC government has significant oversight over the conduct of our business and may intervene or influence our operations as the government deems appropriate to advance regulatory and societal goals and policy positions.
We conduct our business primarily in mainland China. Our operations in mainland China are governed by PRC laws and regulations. PRC government has significant oversight over the conduct of our business and may intervene or influence our operations as the government deems appropriate to advance regulatory and societal goals and policy positions.
In the event of a fundamental change, we may also be required to issue additional ADSs or, in the case of the December 2026 Notes, Class Z ordinary shares in lieu of ADSs if a holder of the December 2026 Notes so elects, upon conversion of the relevant Bilibili Convertible Notes.
In the event of a fundamental change, we may also be required to issue additional ADSs or, in the case of the December 2026 Notes, Class Z ordinary shares in lieu of ADSs if a holder of the December 2026 Notes so elects, upon conversion of the relevant Bilibili Convertible Senior Notes.
To comply with PRC laws and regulations, we conduct our business in China mainly through the VIEs and their respective subsidiaries, based on a series of contractual arrangements by and among our wholly-owned subsidiaries in China (our WFOEs), the VIEs, and their shareholders, as applicable.
To comply with PRC laws and regulations, we conduct our business in mainland China mainly through the VIEs and their respective subsidiaries, based on a series of contractual arrangements by and among our wholly owned subsidiaries in mainland China (our WFOEs), the VIEs, and their shareholders, as applicable.
However, the 2019 FIL has a catch-all provision under the definition of “foreign investment” which includes investments made by foreign investors in China through means stipulated in laws or administrative regulations or other methods prescribed by the State Council.
However, the 2019 FIL has a catch-all provision under the definition of “foreign investment” which includes investments made by foreign investors in mainland China through means stipulated in laws or administrative regulations or other methods prescribed by the State Council.
Therefore, the State Council may in the future promulgate laws and regulations that deem investments made by foreign investors through contractual arrangements as “foreign investment,” and our contractual arrangements may be subject to and be deemed to violate the market entry requirements in China.
Therefore, the State Council may in the future promulgate laws and regulations that deem investments made by foreign investors through contractual arrangements as “foreign investment,” and our contractual arrangements may be subject to and be deemed to violate the market entry requirements in mainland China.
The EIT Law and its implementation rules, effective 2008, unified the previously existing separate income tax laws for domestic enterprises and FIEs and adopted a unified 25% enterprise income tax, or the EIT, rate applicable to all resident enterprises in China, subject to certain exceptions.
The EIT Law and its implementation rules, effective 2008, unified the previously existing separate income tax laws for domestic enterprises and FIEs and adopted a unified 25% enterprise income tax, or the EIT, rate applicable to all resident enterprises in mainland China, subject to certain exceptions.
However, approval from or registration with appropriate government authorities is required where Renminbi is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies.
However, approval from or registration with appropriate government authorities is required where Renminbi is to be converted into foreign currency and remitted out of mainland China to pay capital expenses such as the repayment of loans denominated in foreign currencies.
Although the authorities in China may establish a regulatory cooperation mechanism with the securities regulatory authorities of another country or region to implement cross-border supervision and administration, such cooperation with the securities regulatory authorities in the Unities States may not be efficient in the absence of a mutual and practical cooperation mechanism.
Although the authorities in mainland China may establish a regulatory cooperation mechanism with the securities regulatory authorities of another country or region to implement cross-border supervision and administration, such cooperation with the securities regulatory authorities in the Unities States may not be efficient in the absence of a mutual and practical cooperation mechanism.
The STA has issued certain circulars concerning equity incentive awards. Under these circulars, our employees working in China who exercise share options or are granted restricted shares will be subject to PRC individual income tax.
The STA has issued certain circulars concerning equity incentive awards. Under these circulars, our employees working in mainland China who exercise share options or are granted restricted shares will be subject to PRC individual income tax.
The mobile games market in China has evolved rapidly in recent years, with developments such as the introduction of new business models, the development of player preferences, the increasing popularity of smartphones, market entry by new competitors and the adoption of new strategies by existing competitors.
The mobile games market in mainland China has evolved rapidly in recent years, with developments such as the introduction of new business models, the development of player preferences, the increasing popularity of smartphones, market entry by new competitors and the adoption of new strategies by existing competitors.
Under the EIT Law and its implementation rules, the profits of a foreign-invested enterprise generated through operations, which are distributed to its immediate holding company outside China, will be subject to a withholding tax rate of 10%.
Under the EIT Law and its implementation rules, the profits of a foreign-invested enterprise generated through operations, which are distributed to its immediate holding company outside mainland China, will be subject to a withholding tax rate of 10%.
In light of the flood of capital outflows of China in 2016 due to the weakening RMB, the PRC government has imposed more restrictive foreign exchange policies and stepped up scrutiny of major outbound capital movement including overseas direct investment.
In light of the flood of capital outflows of mainland China in 2016 due to the weakening RMB, the PRC government has imposed more restrictive foreign exchange policies and stepped up scrutiny of major outbound capital movement including overseas direct investment.
This may happen because of broad market and industry factors, including the performance and fluctuation of the market prices of other companies with operations located mainly in China that have listed their securities in the United States and/or Hong Kong.
This may happen because of broad market and industry factors, including the performance and fluctuation of the market prices of other companies with operations located mainly in mainland China that have listed their securities in the United States and/or Hong Kong.
By discouraging an acquisition of us by a third-party, these provisions could have the effect of depriving our shareholders of an opportunity to sell their securities at a premium over prevailing market prices. 62 Table of Contents Our dual-class share structure with different voting rights will limit your ability to influence corporate matters and could discourage others from pursuing any change of control transactions that holders of our Class Z ordinary shares and ADSs may view as beneficial.
By discouraging an acquisition of us by a third-party, these provisions could have the effect of depriving our shareholders of an opportunity to sell their securities at a premium over prevailing market prices. 67 Table of Contents Our dual-class share structure with different voting rights will limit your ability to influence corporate matters and could discourage others from pursuing any change of control transactions that holders of our Class Z ordinary shares and ADSs may view as beneficial.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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We treat them and their subsidiaries as our consolidated affiliated entities under U.S. GAAP, and have consolidated the financial results of these entities in our consolidated financial statements in accordance with U.S. GAAP.
We treat them and their subsidiaries as the Consolidated Affiliated Entities under U.S. GAAP, and have consolidated the financial results of these entities in our consolidated financial statements in accordance with U.S. GAAP.
On March 28, 2018, the ADSs representing our Class Z ordinary shares commenced trading on the Nasdaq Global Select Market under the symbol “BILI.” We raised from our initial public offering approximately $443.3 million in net proceeds after deducting underwriting commissions and the offering expenses payable by us.
On March 28, 2018, the ADSs representing our Class Z ordinary shares commenced trading on the Nasdaq Global Select Market under the symbol “BILI.” We raised from our initial public offering approximately US$443.3 million in net proceeds after deducting underwriting commissions and the offering expenses payable by us.
All of our live broadcasting hosts and content creators are bound by our community regulations and standard terms of service, which set forth various policies of conduct, content, privacy and the intellectual property right ownership, also the revenue sharing arrangements between hosts and content creators and us. Most live broadcasting hosts and content creators are not professional or full time.
All of our content creators and live broadcasting hosts are bound by our community regulations and standard terms of service, which set forth various policies of conduct, content, privacy and the intellectual property right ownership, also the revenue sharing arrangements between content creators and hosts and us. Most content creators and hosts are not professional or full time.
We identify certain talent and content creators that create popular content and represents our values and beliefs and execute customized contracts with them. We also cooperate with talent agencies which recruit, manage, train, support and promote hosts and content creators. Customized host contracts are negotiated on a case-by-case basis and generally contain revenue sharing arrangements and exclusivity clauses.
We identify certain content creators and talent that create popular content and represents our values and beliefs and execute customized contracts with them. We also cooperate with talent agencies which recruit, manage, train, support and promote content creators and hosts. Customized host contracts are negotiated on a case-by-case basis and generally contain revenue sharing arrangements and exclusivity clauses.
Organizational Structure The following chart illustrates our company’s organizational structure, including our principal subsidiaries and consolidated affiliated entities as of the date of this annual report: Notes: (1) Mr. Rui Chen holds 100% equity interests in Shanghai Kuanyu. He is also the chairman of our board of directors and our chief executive officer. (2) Shanghai Kuanyu has four subsidiaries.
Organizational Structure The following chart illustrates our company’s organizational structure, including our principal subsidiaries and the Consolidated Affiliated Entities as of the date of this annual report: Notes: (1) Mr. Rui Chen holds 100% equity interests in Shanghai Kuanyu. He is also the chairman of our board of directors and our chief executive officer. (2) Shanghai Kuanyu has four subsidiaries.
However, Circular 19 and the Circular on Reforming and Regulating the Management Policies on the Settlement of Capital Projects, promulgated on June 9, 2016, continues to prohibit foreign-invested enterprises from, among other things, using RMB fund converted from its foreign exchange capitals for expenditure beyond its business scope, investing and financing directly or indirectly in securities and other investments except for bank’s principal-secured products, providing loans to non-affiliated enterprises or constructing or purchasing real estate not for self-use.
However, SAFE Circular 19 and the Circular on Reforming and Regulating the Management Policies on the Settlement of Capital Projects, promulgated on June 9, 2016, continues to prohibit foreign-invested enterprises from, among other things, using RMB fund converted from its foreign exchange capitals for expenditure beyond its business scope, investing and financing directly or indirectly in securities and other investments except for bank’s principal-secured products, providing loans to non-affiliated enterprises or constructing or purchasing real estate not for self-use.
Foreign investor or relevant parties in China must declare the security review to the Office of the Working Mechanism prior to (i) the investments in the military industry, military industrial supporting and other fields relating to the security of national defense, and investments in areas surrounding military facilities and military industry facilities; and (ii) investments in important agricultural products, important energy and resources, important equipment manufacturing, important infrastructure, important transport services, important cultural products and services, important information technology and Internet products and services, important financial services, key technologies and other important fields relating to national security, and obtain control in the target enterprise.
Foreign investor or relevant parties in mainland China must declare the security review to the Office of the Working Mechanism prior to (i) the investments in the military industry, military industrial supporting and other fields relating to the security of national defense, and investments in areas surrounding military facilities and military industry facilities; and (ii) investments in important agricultural products, important energy and resources, important equipment manufacturing, important infrastructure, important transport services, important cultural products and services, important information technology and Internet products and services, important financial services, key technologies and other important fields relating to national security, and obtain control in the target enterprise.
The Cyber Security Law provides that network operators must set up internal security management systems that meet the requirements of a classified protection system for cyber security, including appointing dedicated cyber security personnel, taking technical measures to prevent computer viruses, network attacks and intrusions, taking technical measures to monitor and record network operation status and cyber security incidents, and taking data security measures such as data classification, backups and encryption.
The Cybersecurity Law provides that network operators must set up internal security management systems that meet the requirements of a classified protection system for cyber security, including appointing dedicated cyber security personnel, taking technical measures to prevent computer viruses, network attacks and intrusions, taking technical measures to monitor and record network operation status and cyber security incidents, and taking data security measures such as data classification, backups and encryption.
Risk Factors—Risks Related to Our Business and Industry—If we fail to obtain and maintain the licenses and approvals required within the complex regulatory environment applicable to our businesses in China, or if we are required to take compliance actions that are time-consuming or costly, our business, financial condition and results of operations may be materially and adversely affected.” D.
Risk Factors—Risks Related to Our Business and Industry—If we fail to obtain and maintain the licenses and approvals required within the complex regulatory environment applicable to our businesses in mainland China, or if we are required to take compliance actions that are time-consuming or costly, our business, financial condition and results of operations may be materially and adversely affected.” D.
The Notice on Regulating Copyright Order of Internet Reproduction, issued by the NCA in April 2015, includes the following four major points: (i) clarify certain important issues related to internet copyrights in existing laws and regulations, including the definition of news, clarify statutory licenses that are not applicable to internet copyrights and prohibit the distortion of title and work intent; (ii) guide the press and media to further improve the internal management of copyrights, especially requesting the press to clarify the copyright sources of their content; (iii) encourage the press and internet media to actively carry out copyright cooperation; and (iv) ask the copyright administrations at all levels to strictly implement copyright supervision. 102 Table of Contents The Computer Software Copyright Registration Measures, or the Software Copyright Measures, promulgated by the NCA on February 20, 2002, regulate registrations of software copyright, exclusive licensing contracts for software copyright and transfer contracts.
The Notice on Regulating Copyright Order of Internet Reproduction, issued by the NCA in April 2015, includes the following four major points: (i) clarify certain important issues related to internet copyrights in existing laws and regulations, including the definition of news, clarify statutory licenses that are not applicable to internet copyrights and prohibit the distortion of title and work intent; (ii) guide the press and media to further improve the internal management of copyrights, especially requesting the press to clarify the copyright sources of their content; (iii) encourage the press and internet media to actively carry out copyright cooperation; and (iv) ask the copyright administrations at all levels to strictly implement copyright supervision. 107 Table of Contents The Computer Software Copyright Registration Measures, or the Software Copyright Measures, promulgated by the NCA on February 20, 2002, regulate registrations of software copyright, exclusive licensing contracts for software copyright and transfer contracts.
We have submitted the final rectification report to the Shanghai Municipal Office of Anti-Pornography and Illegal Publication and the Shanghai Municipal Internet Information Office on December 22, 2020 and our rectification report has been accepted by the relevant competent authorities, which indicates that the rectification has passed the review of relevant competent authority. 83 Table of Contents According to Notice 78, platforms providing online show live broadcasting or e-commerce live broadcasting services shall, among other things, register their information and business operations by November 30, 2020, ensure real-name registration for all live broadcasting hosts and virtual gifting users, prohibit users that are minors or without real-name registration from virtual gifting, and set a limit on the maximum amount of virtual gifting per time, per day, and per month.
We have submitted the final rectification report to the Shanghai Municipal Office of Anti-Pornography and Illegal Publication and the Shanghai Municipal Internet Information Office on December 22, 2020 and our rectification report has been accepted by the relevant competent authorities, which indicates that the rectification has passed the review of relevant competent authority. 87 Table of Contents According to Notice 78, platforms providing online show live broadcasting or e-commerce live broadcasting services shall, among other things, register their information and business operations by November 30, 2020, ensure real-name registration for all live broadcasting hosts and virtual gifting users, prohibit users that are minors or without real-name registration from virtual gifting, and set a limit on the maximum amount of virtual gifting per time, per day, and per month.
Xujun Chai is an employee of our company. 108 Table of Contents Contractual Arrangements with the Relevant VIEs and their Respective Individual Shareholders Reasons for Adopting the Contractual Arrangements Our (i) internet audio-visual program services, (ii) radio and television program production and operation business, and (iii) internet cultural business that are currently conducted by Shanghai Kuanyu and Hode Information Technology (collectively, the “principal VIEs”), Shanghai Hehehe Culture Communication Co., Ltd., or “Shanghai Hehehe”, Sharejoy Network Technology Co., Ltd., or “Sharejoy Network”, and Shanghai Anime Tamashi Cultural Media Co., Ltd., or “Shanghai Anime Tamashi” (collectively with Shanghai Hehehe and Sharejoy Network, the “Major VIE Subsidiaries”), and Chaodian Culture are considered as “prohibited” under the Negative List (2021) where foreign investment is strictly prohibited (collectively, the “Prohibited Business”).
Xujun Chai is an employee of our company. 114 Table of Contents Contractual Arrangements with the Relevant VIEs and their Respective Individual Shareholders Reasons for Adopting the Contractual Arrangements Our (i) internet audio-visual program services, (ii) radio and television program production and operation business, and (iii) internet cultural business that are currently conducted by Shanghai Kuanyu and Hode Information Technology (collectively, the “principal VIEs”), Shanghai Hehehe Culture Communication Co., Ltd., or “Shanghai Hehehe”, Sharejoy Network Technology Co., Ltd., or “Sharejoy Network”, and Shanghai Anime Tamashi Cultural Media Co., Ltd., or “Shanghai Anime Tamashi” (collectively with Shanghai Hehehe and Sharejoy Network, the “Major VIE Subsidiaries”), and Chaodian Culture are considered as “prohibited” under the Negative List (2021) where foreign investment is strictly prohibited (collectively, the “Prohibited Business”).
Regulations Related to Value-Added Telecommunications Services In 2000, the State Council promulgated the Telecommunications Regulations of the PRC, or the Telecommunications Regulations, most recently amended in February 2016, which provide the regulatory framework for telecommunications service providers in China and require a telecommunications service provider to obtain an operating license prior to commencing its operations.
Regulations Related to Value-Added Telecommunications Services In 2000, the State Council promulgated the Telecommunications Regulations of the PRC, or the Telecommunications Regulations, most recently amended in February 2016, which provide the regulatory framework for telecommunications service providers in mainland China and require a telecommunications service provider to obtain an operating license prior to commencing its operations.
We provide various sales incentives to our advertising service customers, including cash incentives in the form of commissions to certain third-party advertising agencies and noncash incentives such as discounts and advertising services provided free of charge in certain bundled arrangements, which are negotiated on a contract by contract basis with customers.
We provide various sales incentives to our advertising customers, including cash incentives in the form of commissions to certain third-party advertising agencies and noncash incentives such as discounts and advertising services provided free of charge in certain bundled arrangements, which are negotiated on a contract-by-contract basis with customers.
Risk Factors—Risks Related to Our Corporate Structure—We rely on contractual arrangements with the VIEs and their shareholders for our operations in China, which may not be as effective in providing operational control as direct ownership.”; “Item 3. Key Information—D.
Risk Factors—Risks Related to Our Corporate Structure—We rely on contractual arrangements with the VIEs and their shareholders for our operations in mainland China, which may not be as effective in providing operational control as direct ownership.”; “Item 3. Key Information—D.
Foreign investors must comply with the M&A Rules when they purchase equity interests of a domestic company or subscribe the increased capital of a domestic company, and thus changing of the nature of the domestic company into a foreign-invested enterprise; or when the foreign investors establish a foreign-invested enterprise in China, purchase the assets of a domestic company and operate the asset; or when the foreign investors purchase the assets of a domestic company by agreement, establish a foreign-invested enterprise by injecting such assets, and operate the assets.
Foreign investors must comply with the M&A Rules when they purchase equity interests of a domestic company or subscribe the increased capital of a domestic company, and thus changing of the nature of the domestic company into a foreign-invested enterprise; or when the foreign investors establish a foreign-invested enterprise in mainland China, purchase the assets of a domestic company and operate the asset; or when the foreign investors purchase the assets of a domestic company by agreement, establish a foreign-invested enterprise by injecting such assets, and operate the assets.
Our user base is quickly broadening to include users across different age groups and locations, who take interest in a full spectrum of content. We encourage users to not only discover and view, but also share and create quality content on our platform.
Our user base is broadening to include users across different age groups and locations, who take interest in a full spectrum of content. We encourage users to not only discover and view, but also share and create quality content on our platform.
Under the Circular 19, the foreign exchange capital in the capital account of foreign-invested enterprises upon the confirmation of rights and interests of monetary contribution by the local foreign exchange bureau (or the book-entry registration of monetary contribution by the banks) can be settled at the banks based on the actual operation needs of the enterprises.
Under the SAFE Circular 19, the foreign exchange capital in the capital account of foreign-invested enterprises upon the confirmation of rights and interests of monetary contribution by the local foreign exchange bureau (or the book-entry registration of monetary contribution by the banks) can be settled at the banks based on the actual operation needs of the enterprises.
In addition, pursuant to the exclusive business cooperation agreement, without the prior written approval from Hode Shanghai, Shanghai Kuanyu shall not, and/or shall procure the other consolidated affiliated entities not to, enter into any transactions (save as those transactions entered into in the ordinary course of business) that may materially affect its assets, obligations, rights or operation, including but not limited to: 1. the sale, transfer, mortgage or otherwise dispose of any assets (except for those of value less than RMB1 million in the ordinary course of business of the consolidated affiliated entities), business, management right or beneficial interest of income or create any security interest on any assets, including but not limited to any mortgage, pledge, share options or other guarantee arrangements; 2. the provision of any guarantee or any fees to third parties or the occurrence of any indebtedness (except for those reasonable costs incurred in the ordinary course of business); 3. the entering into of any material contracts (except for those where contract amount is less than RMB1 million and those which are entered into within the ordinary course of business of the consolidated affiliated entities between Shanghai Kuanyu and Hode Shanghai and its related parties); 4. any merger, acquisition, restructuring or liquidation; and 5. cause any conflict of interest between Shanghai Kuanyu and Hode Shanghai as well as its shareholders.
In addition, pursuant to the exclusive business cooperation agreement, without the prior written approval from Hode Shanghai, Shanghai Kuanyu shall not, and/or shall procure its consolidated affiliated entities not to, enter into any transactions (save as those transactions entered into in the ordinary course of business) that may materially affect its assets, obligations, rights or operation, including but not limited to: 117 Table of Contents (1) the sale, transfer, mortgage or otherwise dispose of any assets (except for those of value less than RMB1 million in the ordinary course of business of the consolidated affiliated entities), business, management right or beneficial interest of income or create any security interest on any assets, including but not limited to any mortgage, pledge, share options or other guarantee arrangements; (2) the provision of any guarantee or any fees to third parties or the occurrence of any indebtedness (except for those reasonable costs incurred in the ordinary course of business); (3) the entering into of any material contracts (except for those where contract amount is less than RMB1 million and those which are entered into within the ordinary course of business of the consolidated affiliated entities between Shanghai Kuanyu and Hode Shanghai and its related parties); (4) any merger, acquisition, restructuring or liquidation; and (5) cause any conflict of interest between Shanghai Kuanyu and Hode Shanghai as well as its shareholders.
These two systems include, among others, following measures: (i) the real-name registration system requires users to register with valid identity information and the users without real-name authentication will not be able to log into the game after 1 hour’s trial playing in visitor experience mode for 15 days; 93 Table of Contents (ii) the users are not allowed to top up or purchase game virtual items in visitor experience mode; (iii) the accumulated time of minors playing game each day is monitored, calculated and limited to less than three hours per day on PRC statutory holidays and 1.5 hours per day during other times, and upon exceeding such time limit, a notification will pop up and the player will be forced to log out; (iv) minors are not able to log into the game between 10:00 p.m. and 8:00 a.m.; and (v) consumption limits for minors have been implemented as required by the relevant regulatory guidance.
These two systems include, among others, following measures: (i) the real-name registration system requires users to register with valid identity information and the users without real-name authentication will not be able to log into the game after 1 hour’s trial playing in visitor experience mode for 15 days; (ii) the users are not allowed to top up or purchase game virtual items in visitor experience mode; (iii) the accumulated time of minors playing game each day is monitored, calculated and limited to less than three hours per day on PRC statutory holidays and 1.5 hours per day during other times, and upon exceeding such time limit, a notification will pop up and the player will be forced to log out; (iv) minors are not able to log into the game between 10:00 p.m. and 8:00 a.m.; and (v) consumption limits for minors have been implemented as required by the relevant regulatory guidance.
Brand advertisements primarily appear on the app opening page, the top banner, the website home page banner and the inline video feed alongside organic feeds. Brand advertisements can also be customized according to advertisers’ need and appeared in Bilibili-produced OGV or events.
Brand advertisements primarily appear on the app opening page, the top banner, the website home page banner and the inline video feed alongside organic feeds. Brand advertisements can also be customized according to advertisers’ need and appear in Bilibili-produced OGV or events.
Agreements that allow us to receive economic benefits from the relevant VIEs Exclusive Business Cooperation Agreements Shanghai Kuanyu and Hode Shanghai entered into an exclusive business cooperation agreement on December 23, 2020, pursuant to which Shanghai Kuanyu agreed to engage Hode Shanghai as its exclusive service provider of comprehensive business support, technical services and consultation services, including, but not limited to, the following services: • research and development on relevant technologies required for Shanghai Kuanyu’s business; • technical application and implementation in relation to Shanghai Kuanyu’s business operations; • technical services including advertising design solutions, software design, page production, and management consulting advice in relation to Shanghai Kuanyu’s advertising business operations; • daily maintenance, monitoring, debugging and troubleshooting of computer network equipment; • consultancy services for the procurement of relevant equipment and software and hardware systems required by Shanghai Kuanyu to carry out its network operations; • providing appropriate training and technical support and assistance to Shanghai Kuanyu’s employees; 111 Table of Contents • giving advice and solutions to technical questions raised by Shanghai Kuanyu; and • other relevant services requested by Shanghai Kuanyu from time to time to the extent permitted under PRC laws and regulations.
Agreements that allow us to receive economic benefits from the relevant VIEs Exclusive Business Cooperation Agreements Shanghai Kuanyu and Hode Shanghai entered into an exclusive business cooperation agreement on December 23, 2020, pursuant to which Shanghai Kuanyu agreed to engage Hode Shanghai as its exclusive service provider of comprehensive business support, technical services and consultation services, including, but not limited to, the following services: • research and development on relevant technologies required for Shanghai Kuanyu’s business; • technical application and implementation in relation to Shanghai Kuanyu’s business operations; • technical services including advertising design solutions, software design, page production, and management consulting advice in relation to Shanghai Kuanyu’s advertising business operations; • daily maintenance, monitoring, debugging and troubleshooting of computer network equipment; • consultancy services for the procurement of relevant equipment and software and hardware systems required by Shanghai Kuanyu to carry out its network operations; • providing appropriate training and technical support and assistance to Shanghai Kuanyu’s employees; • giving advice and solutions to technical questions raised by Shanghai Kuanyu; and • other relevant services requested by Shanghai Kuanyu from time to time to the extent permitted under PRC laws and regulations.
The Decision Regarding the Safeguarding of Internet Security, enacted by the SCNPC on December 28, 2000, and amended with immediate effect on August 27, 2009, makes it unlawful to, including but not limited to: (i) gain improper entry into a computer information system of national affairs, national defence or cutting-edge science and technology; (ii) disseminate politically disruptive information; (iii) leak state secrets; (iv) spread false commercial information; or (v) infringe intellectual property rights.
The Decision Regarding the Safeguarding of Internet Security, enacted by the SCNPC on December 28, 2000, and amended with immediate effect on August 27, 2009, makes it unlawful to, including but not limited to: (i) gain improper entry into a computer information system of national affairs, national defense or cutting-edge science and technology; (ii) disseminate politically disruptive information; (iii) leak state secrets; (iv) spread false commercial information; or (v) infringe intellectual property rights.
On November 28, 2019, the CAC, MIIT, the MPS and SAMR jointly issued the Measures to Identify Illegal Collection and Usage of Personal Information by Apps, which lists six types of illegal collection and usage of personal information, including “failure to publish rules on the collection and usage of personal information,” “failure to expressly state the purpose, manner and scope of the collection and usage of personal information,” “collecting and using personal information without obtaining consents from users,” “collecting personal information irrelevant to the services provided,” “providing personal information to other parties without obtaining consent” and “failure to provide the function of deleting or correcting personal information as required by law or failure to publish the methods for complaints and reports or other information.” According to the Law of the PRC on the Protection of Minors (2020 Revision), which took effect on June 1, 2021, information processors must follow the principles of legality, legitimacy and necessity when processing personal information of minors via internet, and must obtain consent from minors’ parents or other guardians when processing personal information of minors under age of 14.
On November 28, 2019, the CAC, MIIT, the MPS and SAMR jointly issued the Measures to Identify Illegal Collection and Usage of Personal Information by Apps, which lists six types of illegal collection and usage of personal information, including “failure to publish rules on the collection and usage of personal information,” “failure to expressly state the purpose, manner and scope of the collection and usage of personal information,” “collecting and using personal information without obtaining consents from users,” “collecting personal information irrelevant to the services provided,” “providing personal information to other parties without obtaining consent” and “failure to provide the function of deleting or correcting personal information as required by law or failure to publish the methods for complaints and reports or other information.” 103 Table of Contents According to the Law of the PRC on the Protection of Minors (2020 Revision), which took effect on June 1, 2021, information processors must follow the principles of legality, legitimacy and necessity when processing personal information of minors via internet, and must obtain consent from minors’ parents or other guardians when processing personal information of minors under the age of 14.
Regulation This section sets forth a summary of the most significant rules and regulations that affect our business activities in China or the rights of our shareholders to receive dividends and other distributions from us.
Regulation This section sets forth a summary of the most significant rules and regulations that affect our business activities in mainland China or the rights of our shareholders to receive dividends and other distributions from us.
According to the Foreign Investment Law, “foreign-invested enterprises” refers to enterprises that are wholly or partly invested by foreign investors and registered under the PRC laws within China, and “foreign investment” refers to any foreign investor’s direct or indirect investment activities in China, including: (i) establishing foreign-invested enterprises in China either individually or jointly with other investors; (ii) obtaining stock shares, equity shares, shares in properties or other similar interests of Chinese domestic enterprises; (iii) investing in new projects in China either individually or jointly with other investors; and (iv) investing through other methods provided by laws, administrative regulations or provisions prescribed by the State Council. 87 Table of Contents On December 26, 2019, the State Council issued Implementation Regulations for the Foreign Investment Law of the PRC, or the Implementation Rules, which came into effect on January 1, 2020, and replaced the Implementing Rules of the Sino-foreign Equity Joint Ventures Enterprises Law of the PRC, the Implementing Rules of the Sino-foreign Co-operative Enterprises Law of the PRC and the Implementing Rules of the Wholly Foreign-invested Enterprise Law of the PRC.
According to the Foreign Investment Law, “foreign-invested enterprises” refers to enterprises that are wholly or partly invested by foreign investors and registered under the PRC laws within mainland China, and “foreign investment” refers to any foreign investor’s direct or indirect investment activities in mainland China, including: (i) establishing foreign-invested enterprises in mainland China either individually or jointly with other investors; (ii) obtaining stock shares, equity shares, shares in properties or other similar interests of Chinese domestic enterprises; (iii) investing in new projects in mainland China either individually or jointly with other investors; and (iv) investing through other methods provided by laws, administrative regulations or provisions prescribed by the State Council. 90 Table of Contents On December 26, 2019, the State Council issued Implementation Regulations for the Foreign Investment Law of the PRC, or the Implementation Rules, which came into effect on January 1, 2020, and replaced the Implementing Rules of the Sino-foreign Equity Joint Ventures Enterprises Law of the PRC, the Implementing Rules of the Sino-foreign Co-operative Enterprises Law of the PRC and the Implementing Rules of the Wholly Foreign-invested Enterprise Law of the PRC.
The Anti-monopoly Law of the PRC promulgated by the SCNPC, which became effective on August 1, 2008, and the Rules of the State Council on Declaration Threshold for Concentration of Undertakings promulgated by the State Council on August 3, 2008, and latest amended on September 18, 2018, require that where a concentration reaches one of the following thresholds, a declaration must be lodged in advance with the anti-monopoly law enforcement agency under the State Council, or otherwise the concentration shall not be implemented: (i) during the previous fiscal year, the total global turnover of all undertakings participating in the concentration exceeded RMB10 billion, and at least two of these undertakings each had a turnover of more than RMB400 million within China; or(ii) during the previous fiscal year, the total turnover within China of all the undertakings participating in the concentration exceeded RMB2 billion, and at least two of these undertakings each had a turnover of more than RMB400 million within China.
The Anti-monopoly Law of the PRC promulgated by the SCNPC, which became effective on August 1, 2008 and latest amended on June 24, 2022, and the Rules of the State Council on Declaration Threshold for Concentration of Undertakings promulgated by the State Council on August 3, 2008, and latest amended on September 18, 2018, require that where a concentration reaches one of the following thresholds, a declaration must be lodged in advance with the anti-monopoly law enforcement agency under the State Council, or otherwise the concentration shall not be implemented: (i) during the previous fiscal year, the total global turnover of all undertakings participating in the concentration exceeded RMB10 billion, and at least two of these undertakings each had a turnover of more than RMB400 million within China; or (ii) during the previous fiscal year, the total turnover within China of all the undertakings participating in the concentration exceeded RMB2 billion, and at least two of these undertakings each had a turnover of more than RMB400 million within China.
In addition, we invented a unique interaction feature, “one click triple-function combo.” Through one long pressing on the screen, users can complete liking, coin casting and adding to favourite library in a roll to show their special appreciation, which has become Bilibili signature interactive function and been widely used in our community. Interacting with fans.
In addition, we invented a unique interaction feature, “one click triple-function combo.” Through one long pressing on the screen, users can complete liking, coin casting and adding to favorite library in a roll to show their special appreciation, which has become Bilibili signature interactive function and been widely used in our community. Interacting with fans .
To cater to the next generation’s game demand, we are building up our game self-development capabilities, leveraging our deep understanding of user preferences and our rich game operation experience.
To cater to the next generation’s game demand, we are also building up our game self-development capabilities, leveraging our deep understanding of user preferences and our rich game operation experience.
All of the content needs to go through these two levels of review procedures before it is released on our platform. 82 Table of Contents All of the other content, primarily consisting of bullet chats posted by users, is also automatically filtered by our screening system, which utilizes an artificial intelligence-based screening system to conduct semantic analysis on bullet chats to analyze, identify and screen out inappropriate bullet chats.
All of the content needs to go through these two levels of review procedures before it is released on our platform. 86 Table of Contents All of the other content, primarily consisting of bullet chats posted by users, is also automatically filtered by our screening system, which utilizes an artificial intelligence-based screening system to conduct semantic analysis on bullet chats to analyze, identify and screen out inappropriate bullet chats.
However, foreign investors are allowed to hold up to 100% of equity interests in an online data processing and transaction processing business (including e-commerce business operation) in China.
However, foreign investors are allowed to hold up to 100% of equity interests in an online data processing and transaction processing business (including e-commerce business operation) in mainland China.
This circular indicates that online game operators must have person in charge, set up specific service webpages and publish specific hotlines to provide parents with necessary assistance to prevent or restrict minors’ improper game playing behavior. On October 25, 2019, the NAPP issued the Notice on Preventing Minors from Indulging in Online Games which took effect on November 1, 2019.
This circular indicates that online game operators must have person in charge, set up specific service webpages and publish specific hotlines to provide parents with necessary assistance to prevent or restrict minors’ improper game playing behavior. On October 25, 2019, the NPPA issued the Notice on Preventing Minors from Indulging in Online Games which took effect on November 1, 2019.
We refer to the trend of video integrating into the scenarios of everyday life as “videolization.” As a go-to video community for young generations in China, we believe we are well positioned to capture the attractive opportunities created by videolization. 72 Table of Contents We are a full-spectrum video community that offers a wide array of content serving young generations’ diverse interests.
We refer to the trend of video integrating into the scenarios of everyday life as “videolization.” As a go-to video community for young generations in China, we believe we are well positioned to capture the attractive opportunities created by videolization. 77 Table of Contents We are a full-spectrum video community that offers a wide array of content serving young generations’ diverse interests.
According to the Institutional Reform Plans, effective from March 21, 2018, the SAPPRFT was reformed and now known as the NRTA under the State Council, and the responsibility of the SAPPRFT for administration of news, publication and films, such as the approval of online game registrations and issuance of game publication numbers has been transferred to the NAPP under the Propaganda Department of the Central Committee of the Communist Party of China.
According to the Institutional Reform Plans, effective from March 21, 2018, the SAPPRFT was reformed and now known as the NRTA under the State Council, and the responsibility of the SAPPRFT for administration of news, publication and films, such as the approval of online game registrations and issuance of game publication numbers has been transferred to the NPPA under the Propaganda Department of the Central Committee of the Communist Party of China.
All online games must be connected to the real-name verification system of the NAPP for online games to prevent addiction, all online game users must use real and valid identity information to register their game accounts and log in to online games, and online games enterprises must not provide online game services in any form (including visitor experience mode) to users who have not registered and logged in with their real names.
All online games must be connected to the real-name verification system of the NPPA for online games to prevent addiction, all online game users must use real and valid identity information to register their game accounts and log in to online games, and online games enterprises must not provide online game services in any form (including visitor experience mode) to users who have not registered and logged in with their real names.
Regulations Related to Internet Information Security and Privacy Protection Internet content in China is also regulated and restricted from a state security point of view.
Regulations Related to Internet Information Security and Privacy Protection Internet content in mainland China is also regulated and restricted from a state security point of view.
With a growing number of content creators and the effective incentive mechanisms we provide to the content creators, we receive increasingly diverse and innovative content submissions, which we believe contribute to our mass market appeal. Our most popular PUGV categories were lifestyle, game, entertainment, anime and knowledge in terms of number of video views in 2021.
With a growing number of content creators and the effective incentive mechanisms we provide to the content creators, we receive increasingly diverse and innovative content submissions, which we believe contribute to our mass market appeal. Our most popular PUGV categories were lifestyle, game, entertainment, anime and knowledge in terms of number of video views in 2022.
Online Game Operations The Online Game Measures that was issued by the MOC on June 3, 2010, and last amended on December 15, 2017, comprehensively regulate the activities related to online game business, including the research and development and production of online games, the operation of online games, the standards for online games content, the issuance of virtual currencies used for online games and virtual currency trading services.
Online Game Operations The Online Game Measures issued by the MOC on June 3, 2010, and last amended on December 15, 2017, comprehensively regulate the activities related to online game business, including the research and development and production of online games, the operation of online games, the standards for online games content, the issuance of virtual currencies used for online games and virtual currency trading services.
An internet audio-visual program service provider shall obtain a License for Online Transmission of Audio-Visual Programs issued by the NRTA or complete certain record-filling procedures with the NRTA. Pursuant to the Audio-Visual Regulations, providers of internet audio-visual program services are generally required to be either state-owned or state-controlled.
An internet audio-visual program service provider shall obtain a License for Online Transmission of Audio-Visual Programs issued by the NRTA or complete certain record-filing procedures with the NRTA. Pursuant to the Audio-Visual Regulations, providers of internet audio-visual program services are generally required to be either state-owned or state-controlled.
The NAPP at the national level suspended approval of game registration and issuance of publication numbers for online games since March 2018 and resumed to issue game publication numbers by batches periodically since December 2018, according to certain news reports. Beginning in December 2018, the NAPP at the national level started to approve new online games.
The NPPA at the national level suspended approval of game registration and issuance of publication numbers for online games since March 2018 and resumed to issue game publication numbers by batches periodically since December 2018, according to certain news reports. Beginning in December 2018, the NPPA at the national level started to approve new online games.
On December 30, 2019, the MOFCOM and the SAMR jointly promulgated the Measures on Reporting of Foreign Investment Information, which came into effect on January 1, 2020, and has replaced the Interim Measures for the Administration of Record-filling on the Establishment and Changes in Foreign-Invested Enterprises.
On December 30, 2019, the MOFCOM and the SAMR jointly promulgated the Measures on Reporting of Foreign Investment Information, which came into effect on January 1, 2020, and has replaced the Interim Measures for the Administration of Record-filing on the Establishment and Changes in Foreign-Invested Enterprises.
Recognizing the large population of game lovers among our users and a strong propensity to spend on mobile games of our typical users, we started to introduce animation and comics themed mobile games that resonate well with our communities and user preferences.
Recognizing the large population of game lovers among our users and a strong propensity to spend on mobile games of our typical users, we started to introduce anime and comics themed mobile games that resonate well with our communities and user preferences.
However, this notice has been abolished by the MCT as of August 19, 2019. 92 Table of Contents Anti-addiction System and Protection of Minors In March 2007, the GAPP and several other government agencies issued a circular requiring the implementation of an anti-fatigue system and a real-name registration system by all PRC online game operators to curb addictive online game playing by minors.
However, this notice has been abolished by the MCT as of August 19, 2019. Anti-addiction System and Protection of Minors In March 2007, the GAPP and several other government agencies issued a circular requiring the implementation of an anti-fatigue system and a real-name registration system by all PRC online game operators to curb addictive online game playing by minors.
The Cyber Security Law imposes a relatively vague but broad obligation to provide technical support and assistance to the public and state security authorities in connection with criminal investigations or for reasons of national security.
The Cybersecurity Law imposes a relatively vague but broad obligation to provide technical support and assistance to the public and state security authorities in connection with criminal investigations or for reasons of national security.
According to the Internet Information Services Measures, the internet information services is classified into commercial internet information services and non-commercial internet information services; a commercial operator of internet content provision services must obtain an ICP License for the provision of internet information services from the appropriate telecommunications authorities.
According to the Internet Information Services Measures, the internet information services is classified into commercial internet information services and noncommercial internet information services; a commercial operator of internet content provision services must obtain an ICP License for the provision of internet information services from the appropriate telecommunications authorities.
The SAFE and its branches shall implement indirect supervision over foreign exchange registration of direct investment via the banks. 106 Table of Contents Regulations Related to Dividend Distributions The principal laws and regulations regulating the dividend distribution of dividends by foreign-invested enterprises in China include the PRC Company Law last amended in 2018 and the Foreign Investment Law.
The SAFE and its branches shall implement indirect supervision over foreign exchange registration of direct investment via the banks. Regulations Related to Dividend Distributions The principal laws and regulations regulating the dividend distribution of dividends by foreign-invested enterprises in China include the PRC Company Law last amended in 2018 and the Foreign Investment Law.
Online game companies shall analyze the cause of minors’ addiction to games, and alter the content and features of games or game rules resulting in such addiction. On October 17, 2020, the SCNPC revised and promulgated the Law of the PRC on the Protection of Minors (2020 Revision), which took effect on June 1, 2021.
Online game companies shall analyze the cause of minors’ addiction to games, and alter the content and features of games or game rules resulting in such addiction. 96 Table of Contents On October 17, 2020, the SCNPC revised and promulgated the Law of the PRC on the Protection of Minors (2020 Revision), which took effect on June 1, 2021.
(3) Mr. Rui Chen, Mr. Yi Xu and Ms. Ni Li hold 52.3%, 44.3%, and 3.4% equity interests in Hode Information Technology, respectively, as of the date of this annual report. Mr. Chen is our controlling shareholder, the chairman of our board of directors and our chief executive officer. Mr. Xu is our founder, director and president. Ms.
(3) Mr. Rui Chen, Ms. Ni Li and Mr. Yi Xu hold 52.3%, 3.4% and 44.3% equity interests in Hode Information Technology, respectively, as of the date of this annual report. Mr. Chen is our controlling shareholder, the chairman of our board of directors and our chief executive officer. Ms.
On August 30, 2021, the NAPP promulgated the Notice on Further Strict Management to Effectively Prevent Minors from Being Addicted to Online Games, which became effective on September 1, 2021.
On August 30, 2021, the NPPA promulgated the Notice on Further Strict Management to Effectively Prevent Minors from Being Addicted to Online Games, which became effective on September 1, 2021.
For example, we store all user data in encrypted format and strictly limit the number of personnel who can access those servers that store user data. For our external interfaces, we also utilize firewalls to protect against potential attacks or unauthorized access.
For example, we store all user personal information in encrypted format and strictly limit the number of personnel who can access those servers that store user personal information. For our external interfaces, we also utilize firewalls to protect against potential attacks or unauthorized access.
On September 30, 2020, Chaodian Technology, Chaodian Culture and each of the individual shareholders of Chaodian Culture entered into an equity pledge agreement, which contains terms substantially similar to the equity pledge agreement described above. Letter of Undertakings Pursuant to the letter of undertakings, dated December 23, 2020, the spouse of Mr.
On September 30, 2020, Chaodian Technology, Chaodian Culture and each of the individual shareholders of Chaodian Culture entered into an equity pledge agreement, which contains terms substantially similar to the equity pledge agreement described above. 116 Table of Contents Letter of Undertakings Pursuant to the letter of undertakings, dated December 23, 2020, the spouse of Mr.
Regulations Related to Foreign Investment in the PRC Foreign Investment Industrial Policy Investments activities in China by foreign investors are principally governed by the Catalogue for the Encouragement of Foreign Investment Industries (2020 Edition), or the Catalogue, and the Negative List (2021), which were both promulgated by the MOFCOM and the NDRC and each became effective on January 27, 2021 and January 1, 2022.
Regulations Related to Foreign Investment in the PRC Foreign Investment Industrial Policy Investments activities in mainland China by foreign investors are principally governed by the Catalogue for the Encouragement of Foreign Investment Industries (2022 Edition), or the Catalogue, and the Negative List (2021), which were both promulgated by the MOFCOM and the NDRC and each became effective on January 1, 2023 and January 1, 2022.
Property, Plant and Equipment Our headquarter is located at Wujiaochang commercial district in Shanghai. We lease and occupy office buildings with an aggregate floor area of approximately 113,000 square meters. A substantial majority of our employees are based at our headquarters in Shanghai. Our servers and network facilities for internal administrative functions are located at our headquarters.
Property, Plants and Equipment Our headquarter is located at Wujiaochang commercial district in Shanghai. We lease and occupy office buildings with an aggregate floor area of approximately 139,000 square meters. A substantial majority of our employees are based at our headquarters in Shanghai. Our servers and network facilities for internal administrative functions are located at our headquarters.
On September 30, 2020, Chaodian Technology and Chaodian Culture entered into an exclusive business cooperation agreement, which contains terms substantially similar to the exclusive business cooperation agreement described above. 112 Table of Contents Agreements that provide us with the option to purchase the equity interests in the relevant VIEs Exclusive Option Agreements Hode Shanghai, Shanghai Kuanyu and Mr.
On September 30, 2020, Chaodian Technology and Chaodian Culture entered into an exclusive business cooperation agreement, which contains terms substantially similar to the exclusive business cooperation agreement described above. Agreements that provide us with the option to purchase the equity interests in the relevant VIEs Exclusive Option Agreements Hode Shanghai, Shanghai Kuanyu and Mr.
As of the date of this annual report, we have not received any notification from any competent authority in the PRC in relation to the non-registration of lease agreements. ITEM 4A. UNRESOLVED STAFF COMMENTS Not applicable.
As of the date of this annual report, we have not received any notification from any competent authority in the PRC in relation to the non-registration of lease agreements. 120 Table of Contents ITEM 4A. UNRESOLVED STAFF COMMENTS Not applicable.
An e-commerce operator shall obtain a license for value-added telecommunications services with the specification of online data processing and transaction processing business from appropriate telecommunications authorities, pursuant to the Telecommunications Regulations and the Catalog of Telecommunications Services.
An e-commerce operator shall obtain a license for value-added telecommunications services with the specification of online data processing and transaction processing business from appropriate telecommunications authorities, pursuant to the Telecommunications Regulations and the Classification Catalogue of Telecommunications Services.
Rui Chen has also undertaken that, subject to the relevant PRC laws and regulations, he will return to Hode Shanghai any consideration he receives in the event that Hode Shanghai exercises the options under the exclusive option agreement to acquire the equity interests and/or assets in Shanghai Kuanyu. Pursuant to the exclusive option agreement, Mr.
Rui Chen has also undertaken that, subject to the relevant PRC laws and regulations, he will return to Hode Shanghai any consideration he receives in the event that Hode Shanghai exercises the options under the exclusive option agreement to acquire the equity interests and/or assets in Shanghai Kuanyu. 118 Table of Contents Pursuant to the exclusive option agreement, Mr.
In 2021, our users generated 8.5 billion average monthly interactions on our platform, as compared to 5.1 billion in 2020. Bullet chatting. Bullet chatting is a commenting function that we pioneered, which enables content viewers to send comments that fly across the screen like bullets, and has become very popular among young internet users in China.
In 2022, our users generated 13.2 billion average monthly interactions on our platform, as compared to 8.5 billion in 2021. Bullet chatting . Bullet chatting is a commenting function that we pioneered, which enables content viewers to send comments that fly across the screen like bullets, and has become very popular among young internet users in China.
A dynamic update mechanism for the sample database of illegal and non-compliant information and a hierarchical classification system shall be established and regularly enriched and expanded to improve the efficiency and quality of technical review.
A dynamic update mechanism for the sample database of illegal and noncompliant information and a hierarchical classification system shall be established and regularly enriched and expanded to improve the efficiency and quality of technical review.
Substantially all mobile games on our platform are developed by third-party developers and we select and curate mobile games on our platform based on content, themes, cultural characteristics and features that appeal to our users. Our users access the mobile games on our platform, and log into and play with their Bilibili accounts.
The majority of mobile games on our platform are developed by third-party developers and we select and curate mobile games on our platform based on content, themes, cultural characteristics and features that appeal to our users. Our users access the mobile games on our platform, and log into and play with their Bilibili accounts.
Users’ purchase of in-game virtual items to enhance their game-playing experiences is the primary source of our revenue generated from mobile games. As of December 31, 2021, we operated 59 exclusively distributed mobile games and hundreds of jointly operated mobile games.
Users’ purchase of in-game virtual items to enhance their game-playing experiences is the primary source of our revenue generated from mobile games. As of December 31, 2022, we operated multiple exclusively distributed mobile games and hundreds of jointly operated mobile games.
Subsequently, we obtained control over Shanghai Kuanyu Digital Technology Co., Ltd., which we refer to as Shanghai Kuanyu in this annual report, in July 2014 to further expand our operations. We incorporated Bilibili Inc. under the laws of the Cayman Islands as our offshore holding company in December 2013.
Subsequently, we obtained control over Shanghai Kuanyu Digital Technology Co., Ltd., which we refer to as Shanghai Kuanyu in this annual report, in July 2014 to further expand our operations. We incorporated Bilibili Inc. under the laws of the Cayman Islands, an exempted company with limited liability, as our offshore holding company in December 2013.
Under the Cyber Security Law, network operators must also record and report any instances of publication of prohibited information and take measures to prevent such information from dissemination.
Under the Cybersecurity Law, network operators must also record and report any instances of publication of prohibited information and take measures to prevent such information from dissemination.
We also enable broad video-based content consumption scenarios centered around professional user generated videos, or PUGV, supplemented with live broadcasting, occupationally generated videos, or OGV, and more. We have become the welcoming home of diverse cultures and interests and the destination to discover cultural trends and phenomena of young generations in China.
We also enable broad video-based content consumption scenarios centered around professional user generated videos, or PUGV, supplemented with live broadcasting, occupationally generated videos, or OGV, Story Mode, our short-form video product, and more. We have become the welcoming home of diverse cultures and interests and the destination to discover cultural trends and phenomena of young generations in China.
As of December 31, 2021, our content screening team consists of approximately 3,000 employees dedicated to screening and monitoring the content uploaded on our platform to ensure that the flagged content identified by our screening system is reviewed and confirmed before it can be released. We provide initial training during the onboarding process for new hires.
As of December 31, 2022, our content screening team consists of over 3,800 employees dedicated to screening and monitoring the content uploaded on our platform to ensure that the flagged content identified by our screening system is reviewed and confirmed before it can be released. We provide initial training during the onboarding process for new hires.
According to the Notices on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plans of Overseas Publicly Listed Companies, which was promulgated by SAFE in February 2012, PRC citizens or non-PRC citizens residing in China for a continuous period of not less than one year (except for foreign diplomatic personnel in China and representatives of international organizations in China) who participate in any stock incentive plan of an overseas publicly listed company shall, through the domestic company to which the said company is affiliated, collectively entrust a domestic agency (may be the Chinese affiliate of the overseas publicly listed company which participates in stock incentive plan, or other domestic institutions qualified for asset trust business lawfully designated by such company) to handle foreign exchange registration, and entrust an overseas institution to handle issues like exercise of options, purchase and sale of corresponding stocks or equity and transfer of corresponding funds.
The bank in charge shall conduct post spot checking in accordance with the relevant requirements. 111 Table of Contents According to the Notices on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plans of Overseas Publicly Listed Companies, which was promulgated by SAFE in February 2012, PRC citizens or non-PRC citizens residing in China for a continuous period of not less than one year (except for foreign diplomatic personnel in China and representatives of international organizations in China) who participate in any stock incentive plan of an overseas publicly listed company shall, through the domestic company to which the said company is affiliated, collectively entrust a domestic agency (may be the Chinese affiliate of the overseas publicly listed company which participates in stock incentive plan, or other domestic institutions qualified for asset trust business lawfully designated by such company) to handle foreign exchange registration, and entrust an overseas institution to handle issues like exercise of options, purchase and sale of corresponding stocks or equity and transfer of corresponding funds.
On October 23, 2019, the SAFE released the Circular on Further Promoting Cross-border Trade and Investment Facilitation, or the Circular 28, according to which besides foreign-invested enterprises engaged in investment business, non-investment foreign-invested enterprises are also permitted to make domestic equity investments with their capital funds in foreign currency provided that such investments do not violate the Negative List (2021) and the target investment projects are genuine and in compliance with laws.
On October 23, 2019, the SAFE released the Circular 28, according to which besides foreign-invested enterprises engaged in investment business, non-investment foreign-invested enterprises are also permitted to make domestic equity investments with their capital funds in foreign currency provided that such investments do not violate the Negative List (2021) and the target investment projects are genuine and in compliance with laws.
On October 25, 2018, we entered into a strategic collaboration agreement with Tencent for sharing and operating existing and additional anime and games on our platform. In December 2018, we and Taobao entered into a business collaboration agreement in content-driven e-commerce and commercialization of our intellectual property assets.
In October 2018, Tencent became our principal shareholder and we entered into a strategic collaboration agreement for sharing and operating existing and additional anime and games on our platform. In December 2018, we and Taobao entered into a business collaboration agreement in content-driven e-commerce and commercialization of our intellectual property assets.
Related Party Transactions—Other Related Party Transactions.” As of the date of this annual report, some of our leased properties are subject to mortgage, and we have not registered any of our lease agreements with the relevant government authorities due to the lack of cooperation from our landlords in registering the relevant lease agreements.
As of the date of this annual report, some of our leased properties are subject to mortgage, and we have not registered any of our lease agreements with the relevant government authorities due to the lack of cooperation from our landlords in registering the relevant lease agreements.
Rui Chen exercises his right to transfer his equity in Shanghai Kuanyu in accordance with exclusive option agreement; and (vii) to instruct the directors and senior officers to act in accordance with our attention. Mr.
Rui Chen exercises his right to transfer his equity in Shanghai Kuanyu in accordance with exclusive option agreement; and (vii) to instruct the directors and senior officers to act in accordance with our attention. 115 Table of Contents Mr.
As advised by our PRC counsel, Tian Yuan Law Firm, if the content of audio-visual programs transmitted by the internet audio-visual program service provider on the internet violate the PRC laws and regulations such as the Administrative Regulations on Internet Audio-Visual Program Service, the internet audio-visual program service provider may face, among others, warnings, fines, revocation of license and even criminal investigations or penalties.
As advised by our PRC counsel, Jingtian & Gongcheng, if the content of audio-visual programs transmitted by the internet audio-visual program service provider on the internet violate the PRC laws and regulations such as the Administrative Regulations on Internet Audio-Visual Program Service, the internet audio-visual program service provider may face, among others, warnings, fines, revocation of license and even criminal investigations or penalties.
Yi Xu, Ms. Ni Li, Mr. Xujun Chai, Shanghai Kuanyu and Hode Information Technology hold 31.2%, 9.5%, 6.8%, 5.1%, 44.6% and 2.8% equity interests in Chaodian Culture, respectively, as of the date of this annual report. Mr.
Xujun Chai, Shanghai Kuanyu and Hode Information Technology hold 31.2%, 6.8%, 9.5%, 5.1%, 44.6% and 2.8% equity interests in Chaodian Culture, respectively, as of the date of this annual report. Mr.
Since our inception, our PUGV experienced strong growth in terms of not only the number of active content creators, but also the number and varieties of videos uploaded. In 2021, we received an average of approximately 9.3 million monthly videos submissions, as compared to 5.6 million in 2020.
Since our inception, our PUGV experienced strong growth in terms of not only the number of active content creators, but also the number and varieties of videos uploaded. In 2022, we received an average of approximately 14.7 million monthly videos submissions, as compared to 9.3 million in 2021.
The incentives are based on revenue volume and incentive rate, which are negotiated on a contract by contract basis. We account for these incentives granted to customers as variable consideration in accordance with ASC 606 that is net of our revenues.
The incentives are based on revenue volume and incentive rate, which are negotiated on a contract-by-contract basis. We account for these incentives granted to customers as variable consideration in accordance with ASC 606 that is net of our revenues. The amount of variable consideration is measured based on the most likely amount of incentive to be provided to customers.
We offer certain major interactive features on our platform exclusively to official members, as we believe the users who take and pass our membership exam are tuned to our community culture and values, hence contributing to our sticky user community with high retention rate.
We offer certain major interactive features on our platform exclusively to official members, such as sending bullet chats, commenting and messaging, as we believe the users who take and pass our membership exam are tuned to our community culture and values, hence contributing to our sticky user community with high retention rate.
On April 12, 2022, the Online Audio-visual Program Administration Division of the NRTA and the Publishing Bureau of the Propaganda Department of the Central Committee of the Communist Party of China jointly promulgated the Notice on Strengthening the Administration of Live Broadcasting of Game-Playing on the Online Audio-Visual Program Platform, which stipulated that (i) it is not allowed to live broadcast online games that have not been approved by the competent authorities in online audio-visual programs or attract more users to such games by any means, including through online live broadcasting, (ii) all online live broadcast platforms shall strengthen the management of online game live broadcast programs in terms of content and propaganda, establish and improve management systems for information release, comments, and emergency response related to game-playing live broadcast programs to improve program monitoring and public opinion monitoring mechanisms, (iii) the online platforms shall strengthen the management of the behavior of game hosts and those who conducted illegal and immoral behavior are not allowed to be shown to the public through live broadcasting, (iv) the online live broadcast platforms are urged to establish and implement mechanisms for the protection of minors, and (v) the launch, broadcasting and layout of game-playing live programs shall be submitted to relevant radio and television administrative department in accordance with the relevant requirements of live programs, and online audio-visual platforms (including various domestic and overseas individual and institutional accounts opened on relevant platforms) live streaming overseas game programs or competitions should be approved in advance.
On April 12, 2022, the Online Audio-visual Program Administration Division of the NRTA and the Publishing Bureau of the Propaganda Department of the Central Committee of the Communist Party of China jointly promulgated the Notice on Strengthening the Administration of Live Broadcasting of Game-Playing on the Online Audio-Visual Program Platform, which stipulated that (i) it is not allowed to live broadcast online games that have not been approved by the competent authorities in online audio-visual programs or attract more users to such games by any means, including through online live broadcasting, (ii) all online live broadcast platforms shall strengthen the management of online game live broadcast programs in terms of content and propaganda, establish and improve management systems for information release, comments, and emergency response related to game-playing live broadcast programs to improve program monitoring and public opinion monitoring mechanisms, (iii) the online platforms shall strengthen the management of the behavior of game hosts and those who conducted illegal and immoral behavior are not allowed to be shown to the public through live broadcasting, (iv) the online live broadcast platforms are urged to establish and implement mechanisms for the protection of minors, and (v) the launch, broadcasting and layout of game-playing live programs shall be submitted to relevant radio and television administrative department in accordance with the relevant requirements of live programs, and online audio-visual platforms (including various domestic and overseas individual and institutional accounts opened on relevant platforms) live broadcasting overseas game programs or competitions should be approved in advance. 99 Table of Contents In May 2022, the Opinions on Regulating Live Broadcasting for Rewards and Enhancing the Protection of Minors was issued by the CAC and other relevant authorities, pursuant to which, minors are prohibited from participating in live broadcasting and are strictly controlled from engaging in anchoring.
In January 2018, we launched a premium membership program allowing paying members to enjoy an exclusive or advance access to certain high-quality OGV. We charge our premium members’ membership fees monthly, quarterly or annually, based on the service package that they select. As of December 31, 2021, we had 20.1 million premium members.
In January 2018, we launched a premium membership program allowing paying members to enjoy exclusive or advance access to certain high-quality OGV content. We charge our premium members’ membership fees monthly, quarterly or annually, based on the service package that they select. As of December 31, 2022, we had 21.4 million premium members.
In 2021, our users generated 8.5 billion average monthly interactions on our platform, as compared to 5.1 billion in 2020. Our official members who have passed our 100-question multiple-choice membership exam are even more engaged and loyal to our platform. As of December 31, 2021, we had approximately 145.3 million official members, representing a 41.6% increase year-over-year.
Our users generated 13.2 billion average monthly interactions on our platform, as compared to 8.5 billion in 2021. Our official members who have passed our 100-question multiple-choice membership exam are even more engaged and loyal to our platform. As of December 31, 2022, we had approximately 194.8 million official members, representing a 34.1% increase year-over-year.
These contractual arrangements enable us to (i) exercise effective control over the relevant VIEs; (ii) receive substantially all of the economic benefits of the relevant VIEs; and (iii) have an exclusive option to purchase all or part of the equity interests in and assets of them when and to the extent permitted by PRC law. 109 Table of Contents Agreements that provide us effective control over the relevant VIEs Powers of Attorney Mr.
These contractual arrangements enable us to (i) exercise effective control over the relevant VIEs; (ii) receive substantially all of the economic benefits of the relevant VIEs; and (iii) have an exclusive option to purchase all or part of the equity interests in and assets of them when and to the extent permitted by PRC law.
On October 23, 2021, the SCNPC promulgated the draft amendment on Anti-monopoly Law for public comments, which significantly increased the penalties for violation of anti-monopoly law, introduced a “safe harbor” for anti-competitive agreements that have a market share lower than a specific threshold to be set by SAMR, granted SAMR the power to suspend the review period in merger investigations under specified circumstances, and allowed public prosecutors to bring a civil public interest lawsuit based on monopolistic behaviours.
On June 24, 2022, the SCNPC adopted the amendment on Anti-monopoly Law, which introduced a “safe harbor” for anti-competitive agreements that have a market share lower than a specific threshold to be set by SAMR, granted SAMR the power to suspend the review period in merger investigations under specified circumstances, allowed public prosecutors to bring a civil public interest lawsuit based on monopolistic behaviors, and significantly increased the penalties for violation of anti-monopoly law.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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The indentures governing the Bilibili Convertible Notes define a “fundamental change” to include, among others: (i) any person or group gaining control of Bilibili Inc., (ii) any recapitalization, reclassification or change of the ordinary shares or ADSs as a result of which these securities would be converted into, or exchanged for, stock, other securities, other property or assets; (iii) the shareholders of Bilibili Inc. approving any plan or proposal for the liquidation or dissolution of Bilibili Inc.; (iv) the ADSs (or other common equity or ADSs in respect of common equity underlying the convertible notes) ceasing to be listed on any of The New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or any of their respective successors); or (v) any change in or amendment to the laws, regulations and rules of the PRC resulting in our company being legally prohibited from operating substantially all of the business operations conducted by our company unable to continue to derive substantially all of the economic benefits from the business operations conducted by these entities.
The indentures governing the Bilibili Convertible Senior Notes define a “fundamental change” to include, among others: (i) any person or group gaining control of Bilibili Inc., (ii) any recapitalization, reclassification or change of the ordinary shares or ADSs as a result of which these securities would be converted into, or exchanged for, stock, other securities, other property or assets; (iii) the shareholders of Bilibili Inc. approving any plan or proposal for the liquidation or dissolution of Bilibili Inc.; (iv) the ADSs (or other common equity or ADSs in respect of common equity underlying the convertible senior notes) ceasing to be listed on any of The New York Stock Exchange, The Nasdaq Global Select Market or The Nasdaq Global Market (or any of their respective successors); or (v) any change in or amendment to the laws, regulations and rules of the PRC resulting in our company being legally prohibited from operating substantially all of the business operations conducted by our company unable to continue to derive substantially all of the economic benefits from the business operations conducted by these entities.
Any limitation on the ability of our PRC subsidiaries to pay dividends to us could have a material adverse effect on our ability to conduct our business and to pay dividends to our shareholders and ADS holders.” If Bilibili, a holding company in the Cayman Islands or any of its subsidiaries outside of China were deemed to be a “resident enterprise” under the PRC EIT Law, it would be subject to enterprise income tax on its worldwide income at a rate of 25%.
Any limitation on the ability of our PRC subsidiaries to pay dividends to us could have a material adverse effect on our ability to conduct our business and to pay dividends to our shareholders and ADS holders.” If Bilibili, a holding company in the Cayman Islands or any of its subsidiaries outside of mainland China were deemed to be a “resident enterprise” under the PRC EIT Law, it would be subject to enterprise income tax on its worldwide income at a rate of 25%.
However, approval from or registration with competent government authorities is required where the Renminbi is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC government may at its discretion restrict access to foreign currencies for current account transactions in the future.
However, approval from or registration with competent government authorities is required where the Renminbi is to be converted into foreign currency and remitted out of mainland China to pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC government may at its discretion restrict access to foreign currencies for current account transactions in the future.
Meanwhile, we also generate revenues from other VAS including sales of paid content and virtual items on our video, audio and comic platforms. We expect revenues from VAS to continue to grow driven by the increasing popularity of our premium membership programs and live broadcasting. Advertising. We generate advertising revenues primarily from brand advertising and performance-based feed advertisements.
Meanwhile, we also generate revenues from other VAS including sales of paid content and virtual items on our video, audio and comic platforms. We expect revenues from VAS to continue to grow driven by the increasing popularity of our live broadcasting and premium membership programs. Advertising. We generate advertising revenues primarily from brand advertising, performance-based feed advertisements and native advertisements.
Liquidity and Capital Resources—Holding Company Structure.” In utilizing the proceeds, we received from our initial public offering and other financing activities, we may make additional capital contributions to our PRC subsidiaries, establish new PRC subsidiaries and make capital contributions to these new PRC subsidiaries, make loans to our PRC subsidiaries, or acquire offshore entities with operations in China in offshore transactions.
Liquidity and Capital Resources—Holding Company Structure.” In utilizing the proceeds, we received from our initial public offering and other financing activities, we may make additional capital contributions to our PRC subsidiaries, establish new PRC subsidiaries and make capital contributions to these new PRC subsidiaries, make loans to our PRC subsidiaries, or acquire offshore entities with operations in mainland China in offshore transactions.
Under PRC law, each of our subsidiaries and the VIEs in China is required to set aside at least 10% of its after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of their registered capital.
Under PRC law, each of our subsidiaries and the VIEs in mainland China is required to set aside at least 10% of its after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of their registered capital.
If a fundamental change occurs at any time, subject to certain conditions, holders of the Bilibili Convertible Notes may require us to repurchase for cash all or part of their notes in principal amounts of US$1,000 or an integral multiple thereof.
If a fundamental change occurs at any time, subject to certain conditions, holders of the Bilibili Convertible Senior Notes may require us to repurchase for cash all or part of their notes in principal amounts of US$1,000 or an integral multiple thereof.
In addition, our wholly foreign-owned subsidiaries in China may allocate a portion of their after-tax profits based on PRC accounting standards to enterprise expansion funds and staff bonus and welfare funds at their discretion, and the VIEs may allocate a portion of its after-tax profits based on PRC accounting standards to a surplus fund at their discretion.
In addition, our wholly foreign-owned subsidiaries in mainland China may allocate a portion of their after-tax profits based on PRC accounting standards to enterprise expansion funds and staff bonus and welfare funds at their discretion, and the VIEs may allocate a portion of its after-tax profits based on PRC accounting standards to a surplus fund at their discretion.
The difference was primarily due to an increase of RMB734.8 million in deferred revenue, an increase of RMB651.7 million in accrued liabilities and other payables and an increase of RMB816.1 million in accounts payable, partially offset by an increase of RMB417.2 million in accounts receivable and an increase of RMB610.6 million in prepayments and other assets.
The difference was primarily due to an increase of RMB734.8 million in deferred revenue, an increase of RMB651.7 million in accrued liabilities and other payables and an increase of RMB816.1 million in accounts payable, partially offset by an increase of RMB417.2 million in accounts receivable and an increase of RMB610.6 million in prepayments and other current assets.
Our other major PRC subsidiaries are subject to enterprise income tax on their taxable income in China at a statutory rate of 25%. The enterprise income tax is calculated based on the entity’s global income as determined under PRC tax laws and accounting standards.
Our other major PRC subsidiaries are subject to enterprise income tax on their taxable income in mainland China at a statutory rate of 25%. The enterprise income tax is calculated based on the entity’s global income as determined under PRC tax laws and accounting standards.
On October 14, 2019, Measures for Non-Resident Taxpayers to Enjoy Treatments under Tax Treaties (SAT Announcement (2019) No. 35) was issued to simplify the procedures for claiming China tax treaty benefits by non-resident taxpayers. See “Item 3. Key Information—D.
On October 14, 2019, Measures for Non-Resident Taxpayers to Enjoy Treatments under Tax Treaties (SAT Announcement (2019) No. 35) was issued to simplify the procedures for claiming mainland China tax treaty benefits by non-resident taxpayers. See “Item 3. Key Information—D.
In the event of a fundamental change, we may also be required to issue additional ADSs or, in the case of the December 2026 Notes, Class Z ordinary shares in lieu of ADSs if a holder of the December 2026 Notes so elects, upon conversion of the relevant Bilibili Convertible Notes.
In the event of a fundamental change, we may also be required to issue additional ADSs or, in the case of the December 2026 Notes, Class Z ordinary shares in lieu of ADSs if a holder of the December 2026 Notes so elects, upon conversion of the relevant Bilibili Convertible Senior Notes.
We primarily generate VAS revenues from (i) subscription fees of our premium membership program, which offers paying members benefits including an exclusive or advance access to certain high-quality OGV, and (ii) sales of in-channel virtual items for use in our live broadcasting so that users can send them to hosts to show their support, which comprise of either consumable items, such as gifts and items that create special visual effects, or time-based items, such as privileges and titles.
We primarily generate VAS revenues from (i) sales of in-channel virtual items for use in our live broadcasting so that users can send them to hosts to show their support, which comprise of either consumable items, such as gifts and items that create special visual effects, or time-based items, such as privileges and titles, and (ii) subscription fees of our premium membership program, which offers paying members benefits including exclusive or advance access to certain high-quality OGV content.
In addition, our wholly foreign-owned subsidiaries in China are permitted to pay dividends to us only out of its retained earnings, if any, as determined in accordance with PRC accounting standards and regulations.
In addition, our wholly foreign-owned subsidiaries in mainland China are permitted to pay dividends to us only out of its retained earnings, if any, as determined in accordance with PRC accounting standards and regulations.
Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events since January 1, 2021 to December 31, 2021 that are reasonably likely to have a material adverse effect on our net sales or revenues, income from continuing operations, profitability, liquidity or capital resources, or that would cause reported financial information not necessarily to be indicative of future operating results or financial condition.
Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events since January 1, 2022 to December 31, 2022 that are reasonably likely to have a material adverse effect on our net sales or revenues, income from continuing operations, profitability, liquidity or capital resources, or that would cause reported financial information not necessarily to be indicative of future operating results or financial condition.
The statutory reserve funds and the discretionary funds are not distributable as cash dividends. Remittance of dividends by a wholly foreign-owned company out of China is subject to examination by the banks designated by SAFE.
The statutory reserve funds and the discretionary funds are not distributable as cash dividends. Remittance of dividends by a wholly foreign-owned company out of mainland China is subject to examination by the banks designated by SAFE.
Advertising . Our net revenues from advertising increased by 145.5% from RMB1,842.8 million in 2020 to RMB4,523.4 million (US$709.8 million) in 2021. This increase was primarily attributable to the increasing number of advertisers, which was driven by further recognition of Bilibili’s brand name in China’s online advertising market as well as our offering of innovative, industry-tailored advertising solutions.
Advertising . Our net revenues from advertising increased by 145.5% from RMB1,842.8 million in 2020 to RMB4,523.4 million in 2021. This increase was primarily attributable to the increasing number of advertisers, which was driven by further recognition of Bilibili’s brand name in China’s online advertising market as well as our offering of innovative, industry-tailored advertising solutions.
Our marketing and promotional efforts also include placing advertisements for our newly launched mobile games that are exclusively distributed on our platform, such as Guardian Tales. General and administrative expenses . Our general and administrative expenses increased by 88.3% from RMB976.1 million in 2020 to RMB1,837.5 million (US$288.3 million) in 2021.
Our marketing and promotional efforts also include placing advertisements for our newly launched mobile games that are exclusively distributed on our platform, such as Guardian Tales. General and administrative expenses . Our general and administrative expenses increased by 88.3% from RMB976.1 million in 2020 to RMB1,837.5 million in 2021.
Our current research and development efforts in technology are primarily focused on enhancing our artificial intelligence technology, big data analytics capabilities and cloud technology, which we believe are crucial for us to develop user insights so as to provide more relevant and engaging content to our users and to improve our operating efficiency.
Our current research and development efforts in technology are primarily focused on enhancing our artificial intelligence technology, big data analytics capabilities, cloud technology and game development capability, which we believe are crucial for us to develop user insights so as to provide more relevant and engaging content to our users and to improve our operating efficiency.
Our marketing and promotional expenses increased by 69.8% from RMB3,006.0 million in 2020 to RMB5,102.9 million (US$800.8 million) in 2021, primarily attributable to increased expenses associated with the promotion of our brand and other marketing activities and the promotion of our newly launched mobile games that are exclusively distributed on our platform.
Our marketing and promotional expenses increased by 69.8% from RMB3,006.0 million in 2020 to RMB5,102.9 million in 2021, primarily attributable to increased expenses associated with the promotion of our brand and other marketing activities and the promotion of our newly launched mobile games that are exclusively distributed on our platform.
Our investment in content costs has contributed to the growth in our users base and the number of average monthly paying user for VAS.
Our investment in content costs has contributed to the growth in our user base and the number of average monthly paying user for VAS.
Changes in assumptions or management judgement can materially affect to find the impairment indicator, therefore, can affect the test results. Assumptions and Approach Used – Fair value of the investees. If the assessment indicates that the investment is impaired, we estimate the investment’s fair value in accordance with the principles of ASC 820.
Changes in assumptions or management judgment can materially affect to find the impairment indicator, therefore, can affect the test results. Assumptions and Approach Used—Fair value of the investees. If the assessment indicates that the investment is impaired, we estimate the investment’s fair value in accordance with the principles of ASC 820.
Server and bandwidth costs increased by 37.2% from RMB1,141.3 million in 2020 to RMB1,565.9 million (US$245.7 million) in 2021, primarily due to an increase in server and bandwidth capacity to keep pace with the expansion of our user base and the increase in active users, so as to support a massive and continuously increasing volume of data generated and video views happened on our platform every day.
Server and bandwidth costs increased by 37.2% from RMB1,141.3 million in 2020 to RMB1,565.9 million in 2021, primarily due to an increase in server and bandwidth capacity to keep pace with the expansion of our user base and the increase in active users, so as to support a massive and continuously increasing volume of data generated and video views happened on our platform every day.
The approach we used to assess investment impairment are based on assumptions and management judgement in considering various factors and events. Many of the factors used in assessing performance and financial position of the investee are outside the control of management, and these assumptions and judgement may change in future periods.
The approach we used to assess investment impairment are based on assumptions and management judgment in considering various factors and events. Many of the factors used in assessing performance and financial position of the investee are outside the control of management, and these assumptions and judgment may change in future periods.
The changes in working capital were attributable to our business expansion, particularly, the expansion of our mobile games operations, diversification of other value-added services offerings and increased advertising revenues, and the increase in sales and marketing expenses.
The changes in working capital were attributable to our business expansion, particularly, the expansion of our mobile game operations, diversification of other value-added services offerings and increased advertising revenues, and the increase in sales and marketing expenses.
The changes in working capital were attributable to our business expansion, particularly, the expansion of our mobile games operations, diversification of other value-added services offerings and increased advertising revenues, and the increase in sales and marketing expenses.
The changes in working capital were attributable to our business expansion, particularly, the expansion of our mobile game operations, diversification of other value-added services offerings and increased advertising revenues, and the increase in sales and marketing expenses.
Operating expenses Our total operating expenses increased by 75.1% from RMB5,981.1 million in 2020 to RMB10,472.2 million (US$1,643.3 million) in 2021, as we executed our management strategy to invest in the expansion of our user base and the growth of our business, which led to the increases in sales and marketing expenses, general and administrative expenses, as well as research and development expenses.
Operating expenses Our total operating expenses increased by 75.1% from RMB5,981.1 million in 2020 to RMB10,472.2 million in 2021, as we executed our management strategy to invest in the expansion of our user base and the growth of our business, which led to the increases in sales and marketing expenses, general and administrative expenses, as well as research and development expenses.
We make assumptions about the ending point of a paying player’s lifespan beyond the date for which observable data available and extrapolate the actual observed churn rate to arrive at an estimated weighted average playing lifespan for paying players of the selected games. 134 Table of Contents • Similarities between newly-launched games and existing games.
We make assumptions about the ending point of a paying player’s lifespan beyond the date for which observable data available and extrapolate the actual observed churn rate to arrive at an estimated weighted average playing lifespan for paying players of the selected games. • Similarities between newly-launched games and existing games.
Our net revenues from VAS increased by 80.3% from RMB3,845.7 million in 2020 to RMB6,934.9 million (US$1,088.2 million) in 2021, mainly attributable to our enhanced monetization efforts, led by an increase in the number of paying users for our value-added services including the premium membership program, live broadcasting services and other value-added services, attracted by the high quality and diversified content on our platform.
Our net revenues from VAS increased by 80.3% from RMB3,845.7 million in 2020 to RMB6,934.9 million in 2021, mainly attributable to our enhanced monetization efforts, led by an increase in the number of paying users for our value-added services including the premium membership program, live broadcasting services and other value-added services, attracted by the high quality and diversified content on our platform.
If a qualitative and quantitative assessment identifies the change of the average playing period of paying players based on newly available paying players information, we may prospectively apply the change of estimate. Assumptions Used. Changes in assumptions or estimates can materially affect average playing period of paying players and, therefore, can affect the test results.
If a qualitative and quantitative assessment identifies the change of the average playing period of paying players based on newly available paying players information, we may prospectively apply the change of estimate. 139 Table of Contents Assumptions Used. Changes in assumptions or estimates can materially affect average playing period of paying players and, therefore, can affect the test results.
Sales and marketing expenses . Our sales and marketing expenses increased by 65.9% from RMB3,492.1 million in 2020 to RMB5,794.9 million (US$909.3 million) in 2021, primarily attributable to increased channel and marketing expenses associated with our app and brand, as well as expenses associated with our mobile games’ promotion and an increase in headcount in sales and marketing personnel.
Sales and marketing expenses . Our sales and marketing expenses increased by 65.9% from RMB3,492.1 million in 2020 to RMB5,794.9 million in 2021, primarily attributable to increased channel and marketing expenses associated with our app and brand, as well as expenses associated with our mobile games’ promotion and an increase in headcount in sales and marketing personnel.
Our proprietary CDN system enhances network efficiency by managing and optimizing the workload of the servers through real-time optimization and distribution. This technology allows users to upload content without compression and enables viewing of content in higher definition. Real-time monitoring and support.
Our proprietary CDN system enhances network efficiency by managing and optimizing the workload of the servers through real-time optimization and distribution. This technology allows users to upload content without compression and enables viewing of content in higher definition. 138 Table of Contents Real-time monitoring and support.
E-commerce and other costs increased by 88.5% from RMB1,775.5 million in 2020 to RMB3,346.4 million (US$525.1 million) in 2021, primarily attributable to an increase in cost of goods sold associated with our e-commerce business and an increase in staff cost.
E-commerce and other costs increased by 88.5% from RMB1,775.5 million in 2020 to RMB3,346.4 million in 2021, primarily attributable to an increase in cost of goods sold associated with our e-commerce business and an increase in staff cost.
We assess the impairment on the investment accounted for using the measurement alternative on a quarterly basis, and the assumptions and judgement used in establishing the impairment are evaluated regularly.
We assess the impairment on the investment accounted for using the measurement alternative on a quarterly basis, and the assumptions and judgment used in establishing the impairment are evaluated regularly.
E-commerce and Others . We had RMB1,507.2 million and RMB2,834.5 million (US$444.8 million) of e-commerce and other net revenues in 2020 and 2021, respectively. The increase was primarily attributable to the increase in sales of products on our e-commerce platform.
E-commerce and Others . We had RMB1,507.2 million and RMB2,834.5 million of e-commerce and other net revenues in 2020 and 2021, respectively. The increase was primarily attributable to the increase in sales of products on our e-commerce platform.
Our research and development expenses increased by 87.7% from RMB1,513.0 million in 2020 to RMB2,839.9 million (US$445.6 million) in 2021, primarily due to an increase in headcount in research and development personnel, and an increase in share-based compensation expenses for these personnel.
Our research and development expenses increased by 87.7% from RMB1,513.0 million in 2020 to RMB2,839.9 million in 2021, primarily due to an increase in headcount in research and development personnel, and an increase in share-based compensation expenses for these personnel.
We had interest expense of RMB108.5 million in 2020, primarily attributable to interest expense related to our April 2026 Notes issued in April 2019 and our 2027 Notes issued in June 2020. Income tax We recorded income tax of RMB95.3 million (US$15.0 million) in 2021, compared to RMB53.4 million in 2020.
We had interest expense of RMB108.5 million in 2020, primarily attributable to interest expense related to our April 2026 Notes issued in April 2019 and our 2027 Notes issued in June 2020. Income tax We recorded income tax of RMB95.3 million in 2021, compared to RMB53.4 million in 2020.
All information provided in this annual report on Form 20-F and in the exhibits is as of the date of this annual report on Form 20-F, and we do not undertake any obligation to update any such information, except as required under applicable law.
All information provided in this annual report on Form 20-F and in the exhibits is as of the date of this annual report on Form 20-F, and we do not undertake any obligation to update any such information, except as required under applicable law. 141 Table of Contents
Although we have not been materially affected by inflation in the past, we can provide no assurance that we will not be affected by higher rates of inflation in China in the future. B.
Although we have not been materially affected by inflation in the past, we can provide no assurance that we will not be affected by higher rates of inflation in China in the future. 132 Table of Contents B.
Net cash used in investing activities in 2020 was RMB8,906.8 million, primarily due to purchase of short-term investments, primarily including money market funds, financial products with variable interest rates referenced to performance of underlying assets issued by commercial banks or other financial institutions and publicly traded companies of RMB26.7 billion, placements of time deposits of RMB10.9 billion, cash paid for long term investments including loans of RMB1.3 billion and purchase of intangible assets of RMB1.6 billion, which primarily consist of licensed copyrights of video content, partially offset by proceeds from maturities of short-term investments of RMB24.9 billion and maturity of time deposits of RMB7.7 billion.
Net cash used in investing activities in 2021 was RMB24.6 billion, primarily due to purchase of short-term investments of RMB71.7 billion, placements of time deposits of RMB10.7 billion, cash paid for long term investments including loans of RMB6.7 billion and purchase of intangible assets of RMB2.7 billion, which primarily consist of licensed copyrights of video content, partially offset by proceeds from maturities of short-term investments of RMB60.5 billion and maturity of time deposits of RMB7.7 billion. 135 Table of Contents Net cash used in investing activities in 2020 was RMB8,906.8 million, primarily due to purchase of short-term investments, primarily including money market funds, financial products with variable interest rates referenced to performance of underlying assets issued by commercial banks or other financial institutions and publicly traded companies of RMB26.7 billion, placements of time deposits of RMB10.9 billion, cash paid for long term investments including loans of RMB1.3 billion and purchase of intangible assets of RMB1.6 billion, which primarily consist of licensed copyrights of video content, partially offset by proceeds from maturities of short-term investments of RMB24.9 billion and maturity of time deposits of RMB7.7 billion.
The increase was primarily attributable to increases in headcount in general and administrative personnel, share-based compensation expenses, allowance for doubtful accounts, rental expenses and other general and administrative expenses. Research and development expenses .
The increase was primarily attributable to an increase in headcount in general and administrative personnel, and an increase in share-based compensation expenses for these personnel, allowance for doubtful accounts, rental expenses and other general and administrative expenses. Research and development expenses .
However, most of these uses are subject to PRC regulations. We expect that a substantial majority of our future revenues will be denominated in Renminbi.
However, most of these uses are subject to PRC regulations. 134 Table of Contents We expect that a substantial majority of our future revenues will be denominated in Renminbi.
Gross profit As a result of the foregoing, we had gross profit of RMB4,043.1 million (US$634.5 million) in 2021, compared to gross profit of RMB2,840.2 million in 2020.
Gross profit As a result of the foregoing, we had gross profit of RMB4,043.1 million in 2021, compared to gross profit of RMB2,840.2 million in 2020.
As of December 31, 2021, we operated 59 exclusively distributed mobile games and hundreds of jointly operated mobile games. Our revenues from mobile games depend on the number of paying users, and ultimately are determined by our ability to select, procure and offer engaging games tailored to our platform and our user preferences.
As of December 31, 2022, we operated multiple exclusively distributed mobile games and hundreds of jointly operated mobile games. Our revenues from mobile games depend on the number of paying users, and ultimately are determined by our ability to develop, select, procure and offer engaging games tailored to our platform and our user preferences.
Brand advertisements primarily appear on the app opening page, the top banner, the website home page banner and the inline video feed alongside organic feeds. Brand advertisements can also be customized according to advertisers’ need and appeared in Bilibili-produced OGV or events. Performance-based advertisements primarily appear as inline video feeds alongside with organic feeds.
Brand advertisements primarily appear on the app opening page, the top banner, the website home page banner and the inline video feed alongside organic feeds. Brand advertisements can also be customized according to advertisers’ need and appear in Bilibili-produced OGV or events.
Purchases of intangible assets, which primarily consist of licensed copyrights of video content, accounted for 81.1%, 73.1% and 73.8% of our total capital expenditures in 2019, 2020 and 2021, respectively. Operating lease commitments Our operating lease commitments consist of the commitments under the lease agreements for our office premises.
Purchases of intangible assets, which primarily consist of licensed copyrights of video content, accounted for 73.1%, 73.8% and 72.2% of our total capital expenditures in 2020, 2021 and 2022, respectively. Operating lease commitments Our operating lease commitments consist of the commitments under the lease agreements for our office premises.
Interest expense primarily represents interest payment and amortized issuance costs related to long-term debt. We had interest expense of RMB108.5 million in 2020, primarily attributable to interest expense related to our 2027 Notes issued in June 2020 and our April 2026 Notes issued in April 2019.
Interest expense primarily represents interest payment and amortized issuance costs related to long-term debt. We had interest expense of RMB155.5 million in 2021, primarily attributable to our December 2026 Notes issued in November 2021, our 2027 Notes issued in June 2020 and our April 2026 Notes issued in April 2019.
Loss from operations As a result of the foregoing, we incurred loss from operations of RMB6,429.1 million (US$1,008.9 million) in 2021, compared to loss from operations of RMB3,141.0 million in 2020. Other income/(expenses) Investment income/(loss), net .
Loss from operations As a result of the foregoing, we incurred loss from operations of RMB6,429.1 million in 2021, compared to loss from operations of RMB3,141.0 million in 2020. Other income/(expenses) Investment income/(loss), net (including impairments) .
We will continue to make cash commitments, including capital expenditures, to support the growth of our business. Capital expenditures Our capital expenditures are primarily incurred for purchases of intangible assets and property and equipment. Our capital expenditures were RMB1.6 billion in 2019, RMB2.2 billion in 2020 and RMB3.7 billion (US$0.6 billion) in 2021.
We will continue to make cash commitments, including capital expenditures, to support the growth of our business. Capital expenditures Our capital expenditures are primarily incurred for purchases of intangible assets and property and equipment. Our capital expenditures were RMB2.2 billion, RMB3.7 billion and RMB2.7 billion (US$397.0 million) in 2020, 2021 and 2022, respectively.
We expect revenues from mobile games to fluctuate but remain as an important stream of revenues. At the same time, we expect greater contribution by revenues from other streams of business as we take initiatives to grow our VAS, advertising and e-commerce businesses. VAS.
We expect revenues from mobile games to fluctuate but remain as an important stream of revenues. At the same time, we expect greater contribution by revenues from other streams of business as we take initiatives to grow our other revenue streams. VAS.
According to the National Bureau of Statistics of China, the year-over-year percent changes in the consumer price index for December 2020 and 2021 were increases of 0.2% and 1.5%, respectively.
According to the National Bureau of Statistics of China, the year-over-year percent changes in the consumer price index for December 2021 and 2022 were increases of 1.5% and 1.8%, respectively.
As of December 31, 2021, there was no such event of default or fundamental change. 128 Table of Contents If an event of default, as defined under the indentures governing the Bilibili Convertible Notes, occurs and is continuing, the trustee by notice to us may, or the holders of at least 25% in principal amount of the outstanding notes by notice to us and the trustee may, and the trustee at the written request of such holders shall (subject to being indemnified and/or secured and/or pre-funded to its reasonable satisfaction) declare 100% of the principal of and accrued and unpaid interest on all the notes to be due and payable.
If an event of default, as defined under the indentures governing the Bilibili Convertible Senior Notes, occurs and is continuing, the trustee by notice to us may, or the holders of at least 25% in principal amount of the outstanding notes by notice to us and the trustee may, and the trustee at the written request of such holders shall (subject to being indemnified and/or secured and/or pre-funded to its reasonable satisfaction) declare 100% of the principal of and accrued and unpaid interest on all the notes to be due and payable.
Operating activities Net cash used in operating activities in 2021 was RMB2,647.0 million (US$415.4 million), as compared to net loss of RMB6,808.7 million (US$1,068.4 million) in the same period.
Net cash used in operating activities in 2021 was RMB2,647.0 million, as compared to net loss of RMB6,808.7 million in the same period.
Seasonality Our results of operations are subject to seasonal fluctuations. For example, the growth of active users tends to accelerate during school holidays, such as summer and winter breaks, which typically fall in the middle of the third and first quarters of each year, and slow down at the beginning and during certain parts of the school year.
For example, the growth of active users tends to accelerate during school holidays, such as summer and winter breaks, which typically fall in the middle of the third and first quarters of each year, and slow down at the beginning and during certain parts of the school year.
Other income Investment income, net . Net investment income primarily includes return earned on financial products issued by banks and other financial institutions, return from investments in money market funds, gain from disposal of long-term investments, and the fair value change of investments in publicly traded companies.
Net investment income/(loss), net (including impairments) primarily includes return earned on financial products issued by banks and other financial institutions, return from investments in money market funds, and the fair value change of investments in publicly traded companies.
In addition, we had submitted approximately 1,300 additional patent applications and 2,225 trademark applications. 133 Table of Contents We intend to protect our technology and proprietary rights vigorously, but there can be no assurance that our efforts will be successful. Even if our efforts are successful, we may incur significant costs in defending our rights.
In addition, we had submitted approximately 1,863 additional patent applications and 1,171 trademark applications. We intend to protect our technology and proprietary rights vigorously, but there can be no assurance that our efforts will be successful. Even if our efforts are successful, we may incur significant costs in defending our rights.
The following are key assumptions we use in making cash flow projections: • Business projections. We make assumptions about the investees’ business in the marketplace. These assumptions drive our planning assumptions for each revenue streams. We also make assumptions about cost levels (e.g., capacity utilization, cost performance).
The following are key assumptions we use in making cash flow projections: • Business projections. We make assumptions about the investees’ business in the marketplace. These assumptions drive our planning assumptions for each revenue streams. We also make assumptions about cost levels (e.g., capacity utilization, cost performance). These projections are derived using investees’ business plan forecasts. • Long-term growth rate.
For the Year Ended December 31, 2019 2020 2021 (in millions, except as otherwise indicated) Average MAUs 117.5 185.8 249.8 Average monthly paying user 7.2 14.8 22.4 Paying ratio % (average monthly paying user / average MAUs) 6.1 % 8.0 % 9.0 % Average monthly revenue per MAU (1) 4.8 5.4 6.5 Average monthly revenue per paying user (2) 60.7 48.7 44.6 Notes: (1) Numerator is the total net revenues.
For the Year Ended December 31, 2020 2021 2022 (in millions, except as otherwise indicated) Average DAUs 52.2 66.8 86.5 Average MAUs 185.8 249.8 314.5 Average monthly paying user 14.8 22.4 27.8 Paying ratio % (average monthly paying user / average MAUs) 8.0 % 9.0 % 8.8 % Average monthly revenue per MAU (1) 5.4 6.5 5.8 Average monthly revenue per paying user (2) 48.7 44.6 41.2 Notes: (1) Numerator is the total net revenues.
The difference was primarily due to an increase of RMB429.5 million (US$67.4 million) in accounts receivable and an increase of RMB1,747.7 million (US$274.3 million) in prepayments and other assets, partially offset by an increase of RMB494.6 million (US$77.6 million) in deferred revenue, an increase of RMB319.7 million (US$50.2 million) in accrued liabilities and other payables and an increase of RMB1,056.8 million (US$165.8 million) in accounts payable.
The difference was primarily due to an increase of RMB429.5 million in accounts receivable and an increase of RMB1,747.7 million in prepayments and other current assets, partially offset by an increase of RMB494.6 million in deferred revenue, an increase of RMB319.7 million in accrued liabilities and other payables and an increase of RMB1,056.8 million in accounts payable.
We will continue to support our PUGV content creators, enrich video content, strengthen our brand recognition and invest in user acquisition.
We will continue to support our content creators, enrich video content, strengthen our brand recognition and invest in high quality user growth.
We are continuing to diversify our product and service offerings and refine our commercialization avenues without compromising user experience. We will continue our efforts to enrich our content library, including PUGV, live broadcasting, OGV and mobile games, to convert more users to paying users. We plan to launch more high-quality games to satisfy our users’ evolving needs.
We are continuing to diversify our product and service offerings and refine our commercialization avenues without compromising user experience. We will continue our efforts to enrich our content library and product offerings, including PUGV, Story Mode, live broadcasting, OGV and mobile games, to convert more users to paying users.
Intellectual Property We seek to protect our technology, including our proprietary technology infrastructure and core software system, through a combination of patents, copyrights, trademarks, trade secrets and confidentiality agreements. As of December 31, 2021, we have registered approximately 733 patents, 942 registered copyrights, 340 registered domain names, including www.bilibili.com , and 5,428 registered trademarks, including “ ”.
Intellectual Property We seek to protect our technology, including our proprietary technology infrastructure and core software system, through a combination of patents, copyrights, trademarks, trade secrets and confidentiality agreements. As of December 31, 2022, we have registered approximately 985 patents, 1,847 registered copyrights, 350 registered domain names, including www.bilibili.com , and 8,154 registered trademarks, including “ ”.
As a result, Bilibili Inc.’s ability to pay dividends depends upon dividends paid by our PRC subsidiaries. If our existing PRC subsidiaries or any newly formed ones incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to us.
If our existing PRC subsidiaries or any newly formed ones incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to us.
Financing activities Net cash provided by financing activities in 2021 was RMB30.4 billion (US$4.8 billion), primarily attributable to the proceeds we received from our Global Offering of approximately RMB19.3 billion (US$3.0 billion) and the proceeds we received from our offering of December 2026 Notes of RMB10.1 billion (US$1.6 billion). 130 Table of Contents Net cash provided by financing activities in 2020 was RMB8,335.4 million, primarily attributable to the proceeds we received from our offering of 2027 Notes of RMB5.6 billion and the proceeds we received from our issuance of Class Z ordinary shares to Sony Corporation of America of RMB2.8 billion.
Net cash provided by financing activities in 2020 was RMB8,335.4 million, primarily attributable to the proceeds we received from our offering of 2027 Notes of RMB5.6 billion and the proceeds we received from our issuance of Class Z ordinary shares to Sony Corporation of America of RMB2.8 billion.
Meanwhile, we will keep implementing our cost control strategy so as to improve our cost efficiency. General and administrative expenses . General and administrative expenses consist primarily of salaries and other compensation-related expenses for our general and administrative personnel, professional fees, rental expenses and allowance for doubtful accounts.
General and administrative expenses consist primarily of salaries and other compensation-related expenses for our general and administrative personnel, professional fees, severance cost, rental expenses and allowance for doubtful accounts. We will keep implementing our cost control strategy, including to optimize our headcount and control our staff costs, to improve our expense efficiency. Research and development expenses .
The fundamental change repurchase price will be equal to 100% of the principal amount of the notes to be repurchased, plus (except in limited circumstances) accrued and unpaid interest to, but excluding, the fundamental change repurchase date.
The fundamental change repurchase price will be equal to 100% of the principal amount of the notes to be repurchased, plus (except in limited circumstances) accrued and unpaid interest to, but excluding, the fundamental change repurchase date. As of December 31, 2022, there was no such event of default or fundamental change.
Net investment income/(loss) primarily includes return earned on financial products issued by banks and other financial institutions, return from investments in money market funds, and the fair value change of investments in publicly traded companies. We had net investment loss of RMB194.2 million (US$30.5 million) in 2021, compared to net investment income of RMB28.2 million in 2020. Interest income .
Net investment income/(loss), net (including impairments) primarily includes return earned on financial products issued by banks and other financial institutions, return from investments in money market funds, and the fair value change of investments. We had net investment loss of RMB194.2 million and RMB532.5 million (US$77.2 million) in 2021 and 2022, respectively.
We are subject to value-added tax at a rate of 6% for our rendered services and value-added tax at a rate varying from 0% to 16% for goods sold depending on their categories in different periods in 2019, 2020 and 2021. We are subject to surcharges on value-added tax payments in accordance with PRC law.
We are subject to value-added tax mainly at a rate of 6% for services rendered and value-added tax mainly at a rate of 13% for goods sold, although the rate varies depending on their categories in different periods. We are subject to surcharges on value-added tax payments in accordance with PRC law.
Cost of revenues Our cost of revenues increased by 63.9% from RMB5,587.7 million in 2019 to RMB9,158.8 million in 2020 as all components of cost of revenues increased due to our business growth and the expansion of our user base.
Cost of revenues Our cost of revenues increased by 67.5% from RMB9,158.8 million in 2020 to RMB15,340.5 million in 2021 as all components of cost of revenues increased due to our business growth and the expansion of our user base.
As of December 31, 2021, 19.4% of our cash and cash equivalents were held in China, and 3.5% were held by the VIEs and denominated in Renminbi.
As of December 31, 2022, 42.4% of our cash and cash equivalents were held in mainland China, and 14.4% were held by the VIEs and denominated in Renminbi.
In 2021, holders of 2027 Notes converted in aggregate of US$1,000 principal amount, and we issued 24 ADSs to the relevant holders accordingly. The balance of the notes converted were derecognized and recorded as ordinary shares and additional paid-in capital.
In December 2022, holders of April 2026 Notes converted in aggregate of US$14 thousand principal amount, and we issued 565 ADSs to the relevant holders accordingly. The balance of the notes converted were derecognized and recorded as ordinary shares and additional paid-in capital.
A user who makes payments across different products and services offered on our platform using the same registered account is counted as one paying user.
A user who makes payments across different products and services offered on our platform using the same registered account is counted as one paying user and we add the number of paying users of Maoer toward our total paying users without eliminating duplicates.
Material cash requirements Our material cash requirements as of December 31, 2021 and any subsequent interim period primarily include our capital expenditures, operating lease commitments, long-term debt obligations, and purchase obligations. We intend to fund our existing and future material cash requirements with our existing cash balance and other financing alternatives.
Material cash requirements Our material cash requirements as of December 31, 2022 primarily include our capital expenditures, operating lease commitments, and convertible senior notes obligations. We intend to fund our existing and future material cash requirements with our existing cash balance and other financing alternatives.
Content costs increased by 43.7% from RMB1,875.5 million in 2020 to RMB2,694.8 million (US$422.9 million) in 2021, as we continued to expand and diversify our content offerings. We procured anime, documentaries, selected TV shows, movies and variety shows to enrich our content library.
Content costs increased by 29.8% from RMB2,694.8 million in 2021 to RMB3,496.9 million (US$507.0 million) in 2022, as we continued to expand and diversify our content offerings. We self-produced and procured selected anime, documentaries, TV shows, movies and variety shows to enrich our content library.
Revenue-sharing costs, increased by 77.1% from RMB4,366.5 million in 2020 to RMB7,733.3 million (US$1,213.5 million) in 2021, primarily due to an increase in revenue-sharing payment made to hosts and content creators on our platform as the number of hosts and content creators on our platform increased.
Revenue-sharing costs increased by 77.1% from RMB4,366.5 million in 2020 to RMB7,733.3 million in 2021, primarily due to an increase in revenue-sharing payment made to hosts and content creators on our platform as the number of hosts and content creators on our platform increased. 129 Table of Contents Content costs increased by 43.7% from RMB1,875.5 million in 2020 to RMB2,694.8 million in 2021, as we continued to expand and diversify our content offerings.
Operating and Financial Review and Prospects” in this annual report on Form 20-F, as well as our strategic and operational plans, contain forward-looking statements.
Key Information—D. Risk Factors,” “Item 4. Information on the Company,” and “Item 5. Operating and Financial Review and Prospects” in this annual report on Form 20-F, as well as our strategic and operational plans, contain forward-looking statements.
Cost of revenues The following table sets forth the components of our cost of revenues by amounts and percentages of cost of revenues for the periods presented: For the Year Ended December 31, 2019 2020 2021 RMB % RMB % RMB US$ % (in thousands, except for percentages) Cost of revenues: Revenue-sharing costs 2,494,416 44.6 % 4,366,490 47.7 % 7,733,330 1,213,528 50.4 % Content costs 1,001,600 17.9 % 1,875,546 20.5 % 2,694,839 422,879 17.6 % Server and bandwidth costs 919,753 16.5 % 1,141,257 12.5 % 1,565,923 245,727 10.2 % E-commerce and others 1,171,904 21.0 % 1,775,507 19.3 % 3,346,445 525,131 21.8 % Total cost of revenues 5,587,673 100 % 9,158,800 100.0 % 15,340,537 2,407,265 100.0 % Revenue-sharing costs consist of fees paid to game developers, distribution channels (app stores) and payment channels, and fees we share with hosts of our live broadcasting and content creators in accordance with our revenue-sharing arrangements.
Cost of revenues The following table sets forth the components of our cost of revenues by amounts and percentages of cost of revenues for the periods presented: For the Year Ended December 31, 2020 2021 2022 RMB % RMB % RMB US$ % (in thousands, except for percentages) Cost of revenues: Revenue-sharing costs 4,366,490 47.7 % 7,733,330 50.4 % 9,115,351 1,321,601 50.5 % Content costs 1,875,546 20.5 % 2,694,839 17.6 % 3,496,871 506,999 19.4 % Server and bandwidth costs 1,141,257 12.5 % 1,565,923 10.2 % 1,752,878 254,143 9.7 % E-commerce and others 1,775,507 19.3 % 3,346,445 21.8 % 3,684,772 534,243 20.4 % Total cost of revenues 9,158,800 100.0 % 15,340,537 100.0 % 18,049,872 2,616,986 100.0 % 124 Table of Contents Revenue-sharing costs consist of fees paid to game developers, distribution channels (app stores) and payment channels, and fees we share with hosts of our live broadcasting and content creators in accordance with our revenue-sharing arrangements.
In addition, there is a strong demand in China’s internet industry for talented and experienced personnel. We must recruit, retain and motivate talented employees while controlling our personnel-related expenses, including share-based compensation expenses. Impact of COVID-19 on Our Operations and Financial Performance A substantial majority of our revenues and workforce are concentrated in China.
In addition, there is a strong demand in China’s internet industry for talented and experienced personnel. We must recruit, retain and motivate talented employees while controlling our personnel-related expenses, including share-based compensation expenses.
In addition, in 2018, Shanghai Bilibili Technology Co., Ltd. qualified as a HNTE and is eligible for a 15% preferential tax rate effective for three years starting from 2018 to 2020. Shanghai Bilibili Technology Co., Ltd. has renewed this qualification which allows it to enjoy a 15% preferential EIT rate for three years starting from 2021 to 2023.
Hode Information Technology plans to further renew its qualification as a HNTE in 2023. In addition, Shanghai Bilibili Technology Co., Ltd. has renewed its qualification as a HNTE which allows it to enjoy a 15% preferential EIT rate for three years starting from 2021 to 2023.
We had net investment income of RMB28.2 million in 2020, compared to RMB96.6 million in 2019. Interest income . Interest income represents interest earned on cash and cash equivalents and time deposits. We had interest income of RMB162.8 million and RMB83.3 million in 2019 and 2020, respectively. Interest expense.
We had net investment loss of RMB194.2 million in 2021, compared to net investment income of RMB28.2 million in 2020. 130 Table of Contents Interest income . Interest income primarily represents interest earned on cash and cash equivalents and time deposits. We had interest income of RMB83.3 million and RMB70.4 million in 2020 and 2021, respectively. Interest expense .

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Xu. Kami Sama Limited is controlled by The Homur Trust, a trust established under the laws of Cayman Islands and managed by TMF (Cayman) Ltd. as the trustee. Mr. Yi Xu is the settlor of The Homur Trust, and Mr. Xu and his family members are the trust’s beneficiaries. Under the terms of this trust, Mr.
Kami Sama Limited is controlled by The Homur Trust, a trust established under the laws of Cayman Islands and managed by TMF (Cayman) Ltd. as the trustee. Mr. Yi Xu is the settlor of The Homur Trust, and Mr. Xu and his family members are the trust’s beneficiaries. Under the terms of this trust, Mr.
There are certain limited circumstances in which the trustee would not be required to comply with such a direction (for example, where a direction may make the trustee subject to criminal sanction or civil liability or where a direction involves a transaction which might have an adverse impact on the reputation of the trustee).
There are certain limited circumstances in which the trustee would not be required to comply with such a direction (for example, where a direction may make the trustee subject to criminal sanction or civil liability or where a direction involves a transaction which might have an adverse impact on the reputation of the trustee).
There are certain limited circumstances in which the trustee would not be required to comply with such a direction (for example, where a direction may make the trustee subject to criminal sanction or civil liability or where a direction involves a transaction which might have an adverse impact on the reputation of the trustee).
There are certain limited circumstances in which the trustee would not be required to comply with such a direction (for example, where a direction may make the trustee subject to criminal sanction or civil liability or where a direction involves a transaction which might have an adverse impact on the reputation of the trustee).
Guoqi Ding has served as chairman of the board of Zhiqin Management Consulting Ltd., a China-based consulting service provider, and an independent director on the board of Dian Diagnostics Group Co., Ltd., (SHE: 300244) a China-based medical diagnosis outsourcing service provider listed on Shenzhen Stock Exchange since 2017. Between 2004 and 2017, Mr.
Guoqi Ding has served as chairman of the board of Zhiqin Management Consulting Ltd., a China-based consulting service provider, and an independent director on the board of Dian Diagnostics Group Co., Ltd., (Shenzhen Stock Exchange: 300244) a China-based medical diagnosis outsourcing service provider listed on Shenzhen Stock Exchange since 2017. Between 2004 and 2017, Mr.
The nominating and corporate governance committee is responsible for, among other things: 141 Table of Contents • selecting and recommending to the board nominees for election by the shareholders or appointment by the board; • reviewing annually with the board the current composition of the board with regards to characteristics such as independence, knowledge, skills, experience and diversity; • making recommendations on the frequency and structure of board meetings and monitoring the functioning of the committees of the board; and • advising the board periodically with regards to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to the board on all matters of corporate governance and on any remedial action to be taken.
The nominating and corporate governance committee is responsible for, among other things: 146 Table of Contents • selecting and recommending to the board nominees for election by the shareholders or appointment by the board; • reviewing annually with the board the current composition of the board with regards to characteristics such as independence, knowledge, skills, experience and diversity; • making recommendations on the frequency and structure of board meetings and monitoring the functioning of the committees of the board; and • advising the board periodically with regards to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to the board on all matters of corporate governance and on any remedial action to be taken.
He is a serial entrepreneur with more than 15 years of experience in the Internet and technology-related industries in China. Mr. Chen led our strategic development since our founding. With long-term thinking, he spearheaded a series of strategic initiatives which transformed our company to a full-spectrum video community covering a wide array of content categories and diverse video consumption scenarios.
He is a serial entrepreneur with more than 20 years of experience in the Internet and technology-related industries in China. Mr. Chen led our strategic development since our founding. With long-term thinking, he spearheaded a series of strategic initiatives which transformed our company to a full-spectrum video community covering a wide array of content categories and diverse video consumption scenarios.
We enter into standard confidentiality and employment agreements with our key employees. The contracts with our key personnel typically include a standard non-compete agreement that prohibits the employee from competing with us, directly or indirectly, during his or her employment and for at least one year after the termination of his or her employment. 143 Table of Contents E.
We enter into standard confidentiality and employment agreements with our key employees. The contracts with our key personnel typically include a standard non-compete agreement that prohibits the employee from competing with us, directly or indirectly, during his or her employment and for at least one year after the termination of his or her employment. 148 Table of Contents E.
A director will be removed from office automatically if, among other things, the director (i) becomes bankrupt or makes any arrangement or composition with his creditors; or (ii) is found by our company to be or becomes of unsound mind. 142 Table of Contents Board Diversity Board Diversity Matrix (As of February 28, 2022) Country of Principal Executive Offices: People’s Republic of China Foreign Private Issuer Yes Disclosure Prohibited Under Home Country Law No Total Number of Directors 7 Female Male Non-Binary Did Not Disclose Gender Part I: Gender Identity Directors 1 6 — — Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction — LGBTQ+ — Did Not Disclose Demographic Background 1 D.
A director will be removed from office automatically if, among other things, the director (i) becomes bankrupt or makes any arrangement or composition with his creditors; or (ii) is found by our company to be or becomes of unsound mind. 147 Table of Contents Board Diversity Board Diversity Matrix (As of February 28, 2023) Country of Principal Executive Offices: People’s Republic of China Foreign Private Issuer Yes Disclosure Prohibited Under Home Country Law No Total Number of Directors 7 Female Male Non-Binary Did Not Disclose Gender Part I: Gender Identity Directors 1 6 — — Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction — LGBTQ+ — Did Not Disclose Demographic Background 1 D.
In computing the number of shares beneficially owned by a person and the percentage ownership of that person, we have included shares that the person has the right to acquire within 60 days after February 28, 2022, including through the exercise of any option, warrant or other right or the conversion of any other security.
In computing the number of shares beneficially owned by a person and the percentage ownership of that person, we have included shares that the person has the right to acquire within 60 days after February 28, 2023, including through the exercise of any option, warrant or other right or the conversion of any other security.
None of our non-executive directors has a service contract with us that provides for benefits upon termination of service. 140 Table of Contents Committees of the Board of Directors We have established three committees under the board of directors: an audit committee, a compensation committee and a nominating and corporate governance committee.
None of our non-executive directors has a service contract with us that provides for benefits upon termination of service. 145 Table of Contents Committees of the Board of Directors We have established three committees under the board of directors: an audit committee, a compensation committee and a nominating and corporate governance committee.
Share Ownership Except as otherwise noted, the following table sets forth information with respect to the beneficial ownership of our ordinary shares as of February 28, 2022 by: • each of our directors and executive officers; and • each person known to us to own beneficially more than 5% of our ordinary shares.
Share Ownership Except as otherwise noted, the following table sets forth information with respect to the beneficial ownership of our ordinary shares as of February 28, 2023 by: • each of our directors and executive officers; and • each person known to us to own beneficially more than 5% of our ordinary shares.
The audit committee is responsible for, among other things: • appointing the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors; • reviewing with the independent auditors any audit problems or difficulties and management’s response; • discussing the annual audited financial statements with management and the independent auditors; • reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk exposures; • reviewing and approving all proposed related party transactions; • meeting separately and periodically with management and the independent auditors; and • monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance.
The audit committee is responsible for, among other things: • appointing the independent registered public accounting firms and pre-approving all auditing and non-auditing services permitted to be performed by the independent registered public accounting firms; • reviewing with the independent registered public accounting firms any audit problems or difficulties and management’s response; • discussing the annual audited financial statements with management and the independent registered public accounting firms; • reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk exposures; • reviewing and approving all proposed related party transactions; • meeting separately and periodically with management and the independent registered public accounting firms; and • monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance.
Awards granted under the Global Share Plan and the 2018 Plan are evidenced by an award agreement that sets forth terms, conditions and limitations for each award, which may include the term of the award, the provisions applicable in the event that the grantee’s employment or service terminates, and our authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescind the award.
Awards granted under the 2018 Plan are evidenced by an award agreement that sets forth terms, conditions and limitations for each award, which may include the term of the award, the provisions applicable in the event that the grantee’s employment or service terminates, and our authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescind the award. Eligibility .
A retiring director shall be eligible for re-election. The Company, i.e., Bilibili Inc., at the general meeting at which a Director retires may fill the vacated office. The directors to retire by rotation shall include (so far as necessary to obtain the number required) any director who wishes to retire and not to offer himself for re-election.
A retiring director shall be eligible for re-election. Bilibili Inc. at the general meeting at which a Director retires may fill the vacated office. The directors to retire by rotation shall include (so far as necessary to obtain the number required) any director who wishes to retire and not to offer himself for re-election.
The following table summarizes, as of February 28, 2022, the number of ordinary shares underlying outstanding options granted to several of our directors and executive officers and to other individuals as a group under the Global Share Plan and the 2018 Plan, excluding awards that were forfeited or cancelled after the relevant grant dates.
The following table summarizes, as of February 28, 2023, the number of ordinary shares underlying outstanding options and restricted share units granted to several of our directors and executive officers and to other individuals as a group under the Global Share Plan and 2018 Plan, excluding awards that were forfeited or cancelled after the relevant grant dates.
Equity Incentive Trust s Bilibili Inc. Global Share Incentive Trust and Bilibili Inc. Special Share Incentive Trust, which we collectively refer to as the Equity Incentive Trusts, were established under their respective trust deeds, each dated November 28, 2017, between us and Ark Trust (Hong Kong) Limited, or Ark Trust, as trustee of each of the Equity Incentive Trusts.
Special Share Incentive Trust, which we collectively refer to as the Equity Incentive Trusts, were established under their respective trust deeds, each dated November 28, 2017, between us and Ark Trust (Hong Kong) Limited, or Ark Trust, as trustee of each of the Equity Incentive Trusts.
The above position would also not apply if Ms. Li is incapacitated, has released her authority or nominated another person to have such authority in her place. (4) The business address of Mr. JP Gan is Suite 909, Bank of America Tower, 12 Harcourt Road, Central, Hong Kong. (5) The business address of Mr.
The above position would also not apply if Mr. Xu is incapacitated, has released his authority or nominated another person to have such authority in his place. (4) The business address of Mr. JP Gan is Suite 909, Bank of America Tower, 12 Harcourt Road, Central, Hong Kong. (5) The business address of Mr.
Chen served as general manager of Internet security research and development at Kingsoft Corporation Limited (SEHK:03888), a leading software and internet service company listed on the Hong Kong Stock Exchange, from 2001 to 2008. Mr.
Chen served as general manager of Internet security research and development at Kingsoft Corporation Limited (HKEX: 3888), a leading software and internet service company listed on the Hong Kong Stock Exchange, from 2001 to 2008. Mr.
Under each of the Global Share Plan and the 2018 Plan, awards may not be transferred in any manner by the participant other than in accordance with the exceptions provided in the Global Share Plan or the relevant award agreement or otherwise determined by the plan administrator, such as transfers by will or the laws of descent and distribution. 139 Table of Contents Termination and Amendment .
Under the 2018 Plan, awards may not be transferred in any manner by the participant other than in accordance with the exceptions provided in the relevant award agreement or otherwise determined by the plan administrator, such as transfers by will or the laws of descent and distribution. 144 Table of Contents Termination and Amendment .
Under each of the Global Share Plan and the 2018 Plan, in general, the plan administrator determines the vesting schedule, which is specified in the relevant award agreement. Exercise of Options . Under each of the Global Share Plan and the 2018 Plan, the plan administrator determines the exercise price for each award, which is stated in the award agreement.
Under the 2018 Plan, in general, the plan administrator determines the vesting schedule, which is specified in the relevant award agreement. Exercise of Options . Under the 2018 Plan, the plan administrator determines the exercise price for each award, which is stated in the award agreement.
In fulfilling their duty of care to us, our directors must ensure compliance with our memorandum and articles of association and the class rights vested thereunder in the holders of the shares. A shareholder may in certain circumstances have rights to damages if a duty owed by the directors is breached.
In fulfilling their duty of care to us, our directors must ensure compliance with our memorandum and articles of association, as amended and restated from time to time, and the class rights vested thereunder in the holders of the shares. A shareholder may in certain circumstances have rights to damages if a duty owed by the directors is breached.
Eligibility . We may grant awards to our employees, directors and consultants of Bilibili under each of the Global Share Plan and the 2018 Plan. In addition, under the 2018 Plan, we may grant options that are intended to qualify as incentive share options only to our employees and employees of our parent companies and subsidiaries. Vesting Schedule .
We may grant awards to our employees, directors and consultants of Bilibili under the 2018 Plan. In addition, under the 2018 Plan, we may grant options that are intended to qualify as incentive share options only to our employees and employees of our subsidiaries. Vesting Schedule .
Except with respect to amendments made by the plan administrator, no termination, amendment or modification may adversely affect in any material way any awards previously granted pursuant to each of the Global Share Plan and the 2018 Plan unless agreed by the participant.
Except with respect to amendments made by the plan administrator, no termination, amendment or modification may adversely affect in any material way any awards previously granted pursuant to the 2018 Plan unless agreed by the participant.
(1) Represents (i) 49,299,006 Class Y ordinary shares directly held by Vanship Limited, a business company limited by shares incorporated in British Virgin Islands, and (ii) 1,101,000 Class Z ordinary shares issuable to Mr. Rui Chen upon exercise of options within 60 days after February 28, 2022.
(1) Represents (i) 49,299,006 Class Y ordinary shares and 525,525 Class Z ordinary shares in the form of ADSs directly held by Vanship Limited, a business company limited by shares incorporated in British Virgin Islands, and (ii) 1,902,000 Class Z ordinary shares issuable to Mr. Rui Chen upon exercise of options within 60 days after February 28, 2023.
One of the holders is Deutsche Bank Trust Company Americas, the depositary of our ADS program, which held 5.5% Class Z ordinary shares on record as of February 28, 2022.
One of the holders is Deutsche Bank Trust Company Americas, the depositary of our ADS program, which held 13.6% Class Z ordinary shares on record as of February 28, 2023.
Li has the power to direct the trustee with respect to the retention or disposal of, and the exercise of any voting and other rights attached to, the shares held by Saber Lily Limited in Bilibili, and, except for Ms. Li, the other beneficiaries of the trust have no voting rights attached to such shares.
Under the terms of this trust, Ms. Li has the power to direct the trustee with respect to the retention or disposal of, and the exercise of any voting and other rights attached to, the shares held by Saber Lily Limited in Bilibili, and, except for Ms.
Ordinary Shares Beneficially Owned Class Y Ordinary Shares Class Z Ordinary Shares Total Ordinary Shares % of Beneficial Ownership % of Aggregate Voting Power† Directors and Executive Officers**: Rui Chen (1) 49,299,006 1,101,000 50,400,006 12.9 % 43.1 % Yi Xu (2) 27,216,108 196,100 27,412,208 7.0 % 23.8 % Ni Li (3) 7,200,000 1,242,300 8,442,300 2.2 % 6.4 % JP Gan (4) — * * * * Eric He (5) — * * * * Feng Li (6) — — — — — Guoqi Ding (7) — — — — — Xin Fan — * * * * All Directors and Executive Officers as a Group 83,715,114 3,394,100 87,109,214 22.2 % 73.3 % Principal Shareholders: Entities affiliated with Rui Chen (8) 49,299,006 — 49,299,006 12.6 % 43.1 % Tencent entities (9) — 43,749,518 43,749,518 11.2 % 3.8 % Entity affiliated with Yi Xu (10) 27,216,108 151,100 27,367,208 7.0 % 23.8 % Taobao China Holding Limited (11) — 30,845,657 30,845,657 7.9 % 2.7 % Notes: † For each person and group included in this column, percentage of voting power is calculated by dividing the voting power beneficially owned by such person or group by the voting power of all of our Class Y and Class Z ordinary shares as a single class.
Ordinary Shares Beneficially Owned Class Y Ordinary Shares Class Z Ordinary Shares Total Ordinary Shares % of Beneficial Ownership % of Aggregate Voting Power† Directors and Executive Officers**: Rui Chen (1) 49,299,006 2,427,525 51,726,531 12.6 % 42.4 % Ni Li (2) 7,200,000 1,576,300 8,776,300 2.1 % 6.3 % Yi Xu (3) 27,216,108 196,100 27,412,208 6.7 % 23.4 % JP Gan (4) — * * * * Eric He (5) — * * * * Feng Li (6) — — — — — Guoqi Ding (7) — — — — — Xin Fan — * * * * All Directors and Executive Officers as a Group 83,715,114 5,023,599 88,738,713 21.5 % 72.1 % Principal Shareholders: Entities affiliated with Rui Chen (8) 49,299,006 525,525 49,824,531 12.2 % 42.4 % Tencent entities (9) — 43,749,518 43,749,518 10.7 % 3.8 % Entity affiliated with Yi Xu (10) 27,216,108 151,100 27,367,208 6.7 % 23.4 % Taobao China Holding Limited (11) — 30,845,657 30,845,657 7.5 % 2.7 % Notes: † For each person and group included in this column, percentage of voting power is calculated by dividing the voting power beneficially owned by such person or group by the voting power of all of our Class Y and Class Z ordinary shares as a single class.
He currently also serves as an independent director of 51job (Nasdaq: JOBS) since 2014 and as an independent director of Agora, Inc. (Nasdaq: API) since 2020. Mr. He had served as chief financial officer of JOYY Inc. (previously known as YY Inc.) (Nasdaq: YY) from August 2011 to May 2017. Prior to that, Mr.
Eric He has served as our director since March 2018. He currently also serves as an independent director of Agora, Inc. (Nasdaq: API) since 2020. Mr. He had served as chief financial officer of JOYY Inc. (previously known as YY Inc.) (Nasdaq: YY) from August 2011 to May 2017. Prior to that, Mr.
The above position would also not apply if Mr. Xu is incapacitated, has released his authority or nominated another person to have such authority in his place.
The above position would also not apply if Ms. Li is incapacitated, has released her authority or nominated another person to have such authority in her place.
Unless terminated earlier, each of the Global Share Plan and the 2018 Plan, has a term of ten years. The plan administrator has the authority to terminate, amend or modify the Global Share Plan. Our board of directors has the authority to amend or terminate the 2018 Plan.
Unless terminated earlier, the 2018 Plan has a term of ten years. Our board of directors has the authority to amend or terminate the 2018 Plan.
In February 2018, our shareholders and board of directors adopted the 2018 share incentive plan, or the 2018 Plan, to attract and retain the best available personnel, provide additional incentives to employees, directors and consultants and promote the success of our business. We subsequently amended our 2018 Plan in March 2020 by unanimous written approval of our board of directors.
In February 2018, our shareholders and board of directors adopted the 2018 share incentive plan, or the 2018 Plan, to attract and retain the best available personnel, provide additional incentives to employees, directors and consultants and promote the success of our business.
Guoqi Ding is 1500 Changyi Road, Building 1, Room 902, Pudong New Area, Shanghai, People’s Republic of China. (8) Represents 49,299,006 Class Y ordinary shares directly held by Vanship Limited, a business company limited by shares incorporated in British Virgin Islands. The registered address of Vanship Limited is Start Chambers, Wickham’s Cay II., P.O.
Guoqi Ding is 1500 Changyi Road, Building 1, Room 902, Pudong New Area, Shanghai, People’s Republic of China. (8) Represents 49,299,006 Class Y ordinary shares and 525,525 Class Z ordinary shares in the form of ADSs directly held by Vanship Limited, a business company limited by shares incorporated in British Virgin Islands.
To our knowledge, as of February 28, 2022, 21,793,256 of our Class Z ordinary shares were held by three record holders in the United States, representing approximately 5.5% of our total outstanding shares on an as converted basis (including the 2,767,265 Class Z ordinary shares issued and reserved for future issuance upon the exercising or vesting of awards granted under the Share Incentive Plans).
To our knowledge, as of February 28, 2023, 45,320,928 of our Class Z ordinary shares were held by three record holders in the United States, representing approximately 10.9% of our total outstanding shares on an as converted basis (including the 5,337,832 Class Z ordinary shares issued and reserved for future issuance upon the exercising or vesting of awards granted under our share incentive plan).
Directors and Executive Officers Age Position/Title Rui Chen 44 Chairman of the Board of Directors and Chief Executive Officer Yi Xu 32 Founder, Director and President 136 Table of Contents Directors and Executive Officers Age Position/Title Ni Li 36 Vice Chairwoman of the Board of Directors and Chief Operating Officer JP Gan 50 Independent Director Eric He 62 Independent Director Feng Li 48 Independent Director Guoqi Ding 52 Independent Director Xin Fan 43 Chief Financial Officer Rui Chen has served as our chairman of the board of directors and chief executive officer since November 2014.
Directors and Executive Officers Age Position/Title Rui Chen 45 Chairman of the Board of Directors and Chief Executive Officer Ni Li 37 Vice Chairwoman of the Board of Directors and Chief Operating Officer Yi Xu 33 Founder, Director and President JP Gan 51 Independent Director Eric He 63 Independent Director Feng Li 49 Independent Director Guoqi Ding 53 Independent Director Xin Fan 44 Chief Financial Officer Rui Chen has served as our chairman of the board of directors and chief executive officer since November 2014.
Yi Xu founded our website in 2009 (which culminated into the commencement of our commercial operations in 2011 and the founding of our company in 2013) and has served as our director and president since December 2013. Mr.
Li received her bachelor’s degree in law from Lingnan Normal University in 2008. Yi Xu founded our website in 2009 (which culminated into the commencement of our commercial operations in 2011 and the founding of our company in 2013) and has served as our director and president since December 2013. Mr.
Li received his bachelor’s degree in Chemistry from Peking University in 1996 and his master’s degree in Chemistry from the University of Rochester in 1998. Guoqi Ding has served as our director since May 2020. Since 2019, Mr.
Li currently serves as a board member of several private internet and technology companies based in China. Mr. Li received his bachelor’s degree in Chemistry from Peking University in 1996 and his master’s degree in Chemistry from the University of Rochester in 1998. Guoqi Ding has served as our director since May 2020. Since 2019, Mr.
Saber Lily Limited is controlled by The Fortuna Trust, a trust established under the laws of Cayman Islands and managed by TMF (Cayman) Ltd. as the trustee. Ms. Li is the settlor of The Fortuna Trust, and Ms. Li and her family members are the trust’s beneficiaries. Under the terms of this trust, Ms.
Ni Li upon exercise of options within 60 days after February 28, 2023. Saber Lily Limited is controlled by The Fortuna Trust, a trust established under the laws of Cayman Islands and managed by TMF (Cayman) Ltd. as the trustee. Ms. Li is the settlor of The Fortuna Trust, and Ms. Li and her family members are the trust’s beneficiaries.
The calculations in the table below are based on 83,715,114 Class Y ordinary shares and 306,889,473 Class Z ordinary shares outstanding as of February 28, 2022 (excluding 2,767,265 Class Z ordinary shares issued and reserved for future issuance upon the exercising or vesting of awards granted under our share incentive plans).
The calculations in the table below are based on 83,715,114 Class Y ordinary shares and 326,208,471 Class Z ordinary shares outstanding as of February 28, 2023 (excluding 5,337,832 Class Z ordinary shares issued and reserved for future issuance upon the exercising or vesting of awards granted under our share incentive plan).
Employees We had 4,791 employees as of December 31, 2019, 8,646 employees as of December 31, 2020, and 12,281 employees as of December 31, 2021.
Employees We had 8,646 employees as of December 31, 2020, 12,281 employees as of December 31, 2021, and 11,092 employees as of December 31, 2022.
Xu received his associate degree from Beijing University of Posts and Telecommunications in 2010. Ni Li has served as our chief operating officer since November 2014 and vice chairwoman of our board of directors since January 2015. Ms. Li oversees our overall operations and leads the strategic functions including content ecosystem development, monetization initiatives, strategic planning, investments and brand marketing.
Ni Li has served as our chief operating officer since November 2014 and vice chairwoman of our board of directors since January 2015. Ms. Li oversees our overall operations and leads the strategic functions including content ecosystem development, monetization initiatives, strategic planning, investments and brand marketing. In the past years, Ms. Li has built a strong business and operational team.
Name Ordinary Shares Underlying Options Awarded Exercise Price (US$/Share) Date of Grant Date of Expiration Rui Chen * From nominal to March 2020 March 2027 * US$20.26 November 2020 November 2027 Yi Xu — Ni Li * Nominal November 2020 November 2027 Xin Fan * From nominal to US$20.26 Various dates from April 2016 to March 2020 Various dates from April 2022 to March 2027 Other grantees 14,583,161 From nominal to US$20.26 Various dates from June 2016 to December 2021 Various dates from June 2022 to December 2028 Total 22,383,161 Note: * Less than 1% of our total outstanding shares.
Name Ordinary Shares Underlying Options and Restricted Share Units Awarded Exercise Price (US$/Share) Date of Grant Date of Expiration Rui Chen * From nominal to March 2020 March 2027 * US$20.26 November 2020 November 2027 Ni Li * Nominal November 2020 November 2027 Xin Fan * From nominal to US$20.26 Various dates from June 2019 to March 2020 Various dates from June 2025 to March 2027 Other grantees 15,799,960 (1) From nominal to US$20.26 Various dates from June 2017 to December 2022 Various dates from June 2023 to December 2028 Total 23,499,960 Notes: * Less than 1% of our total outstanding shares.
Chen is incapacitated, has released his authority or nominated another person to have such authority in his place. 144 Table of Contents (2) Represents (i) 27,216,108 Class Y ordinary shares and 151,100 Class Z ordinary shares directly held by Kami Sama Limited, a business company limited by shares incorporated in British Virgin Islands, and (ii) 45,000 Class Z ordinary shares in the form of ADSs held by Mr.
Chen is incapacitated, has released his authority or nominated another person to have such authority in his place. 149 Table of Contents (2) Represents (i) 7,200,000 Class Y ordinary shares and 908,300 Class Z ordinary shares directly held by Saber Lily Limited, a business company limited by shares incorporated in British Virgin Islands, and (ii) 668,000 Class ordinary shares issuable to Ms.
Mr. Fan currently also serves as an independent director of UP Fintech Holding Limited (Nasdaq: TIGR). Mr. Fan received his bachelor’s degree in international accounting from Shanghai University of Finance and Economics in 2001. Mr. Fan is a regular member of the American Institute of Certified Public Accountants and a certified public accountant in China.
Mr. Fan received his bachelor’s degree in international accounting from Shanghai University of Finance and Economics in 2001. Mr. Fan is a regular member of the American Institute of Certified Public Accountants and a certified public accountant in China. He also holds licenses as chartered global management accountant and chartered certified accountant in the United Kingdom. B.
He also holds licenses as chartered global management accountant and chartered certified accountant in the United Kingdom. B. Compensation For the fiscal year ended December 31, 2021, we paid an aggregate of approximately RMB10.6 million (US$1.7 million) in cash to our executive officers, and approximately RMB1.5 million (US$0.2 million) in cash to our non-executive directors.
Compensation For the fiscal year ended December 31, 2022, we paid an aggregate of approximately RMB6.9 million (US$1.0 million) in cash to our executive officers, and approximately RMB1.7 million (US$0.2 million) in cash to our non-executive directors.
The number of beneficial owners of the ADSs in the United States is likely to be much larger than the number of record holders of our ordinary shares in the United States.
The number of beneficial owners of the ADSs in the United States is likely to be much larger than the number of record holders of our ordinary shares in the United States. F. Disclosure of A Registrant’s Action to Recover Erroneously Awarded Compensation Not applicable. 150 Table of Contents
The Global Share Plan and the 2018 Plan both permit the awards of options, restricted shares, restricted share units or any other type of awards approved by the plan administrator. Plan Administration. Our chairman of the board of directors or a committee of one or more members of the board of directors will administer the Global Share Plan.
The following paragraphs describe the principal terms of the 2018 Plan. Types of Awards . The 2018 Plan permits the awards of options, restricted shares, and restricted share units. Plan Administration. Our board of directors or a committee of one or more members of the board of directors will administer the 2018 Plan.
The aggregate number of Class Z Ordinary Shares available for future grant under the Global Share Plan and the 2018 Plan was 2,752,294 as of February 28, 2022. The following paragraphs describe the principal terms of the Global Share Plan and the 2018 Plan. Types of Awards .
The aggregate number of Class Z ordinary shares available for future grant under the 2018 Plan was 28,706,326 as of February 28, 2023.
Our PRC subsidiaries and VIEs are required by law to make contributions equal to certain percentages of each employee’s salary for his or her pension insurance, medical insurance, unemployment insurance and other statutory benefits and a housing provident fund. 138 Table of Contents Share Incentive Plans In November 2014, our board of directors approved a global share incentive plan, or the Global Share Plan, to attract and retain the best available personnel, provide additional incentives to employees, directors and consultants and promote the success of our business.
We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our executive officers and directors. 143 Table of Contents Our PRC subsidiaries and the VIEs are required by law to make contributions equal to certain percentages of each employee’s salary for his or her pension insurance, medical insurance, unemployment insurance and other statutory benefits and a housing provident fund.
The following table sets forth the numbers of our employees categorized by function as of December 31, 2021 by function: As of December 31, 2021 Function: Platform operations 748 Products and technology 5,946 Content operations 1,793 Content audit 3,160 Management, sales, finance and administration 634 Total 12,281 As of December 31, 2021, we had 8,645 employees in Shanghai, 1,044 employees in Wuhan, 790 employees in Beijing and 1,802 employees in other locations.
The following table sets forth the numbers of our employees categorized by function as of December 31, 2022: As of December 31, 2022 Function: Products and technology 4,614 Content audit 3,874 Operations 2,035 Management, sales, finance and administration 569 Total 11,092 As of December 31, 2022, we had 6,530 employees in Shanghai, 1,005 employees in Chengdu, 982 employees in Nanjing, 603 employees in Wuhan and 1,972 employees in other locations.
Li founded Goalcareer, a consulting firm serving Fortune 500 companies and startups with a focus in the semiconductor, telecommunication and internet sectors, and worked as its chief executive officer from 2008 to 2012. Ms. Li received her bachelor’s degree in law from Lingnan Normal University in 2008. JP Gan has served as our director since January 2015. Mr.
Li was in charge of human resources operations at Cheetah Mobile (NYSE: CMCM) from 2013 to 2014. Previously, Ms. Li founded Goalcareer, a consulting firm serving Fortune 500 companies and startups with a focus in the semiconductor, telecommunication and internet sectors, and worked as its chief executive officer from 2008 to 2012. Ms.
(3) Represents (i) 7,200,000 Class Y ordinary shares and 908,300 Class Z ordinary shares directly held by Saber Lily Limited, a business company limited by shares incorporated in British Virgin Islands, and (ii) 334,000 Class ordinary shares issuable to Ms. Ni Li upon exercise of options within 60 days after February 28, 2022.
(3) Represents (i) 27,216,108 Class Y ordinary shares and 151,100 Class Z ordinary shares directly held by Kami Sama Limited, a business company limited by shares incorporated in British Virgin Islands, and (ii) 45,000 Class Z ordinary shares in the form of ADSs held by Mr. Xu.
Gan received his bachelor’s degree in business administration from the University of Iowa in 1994 and his MBA degree from the University of Chicago Booth School of Business in 1999. 137 Table of Contents Eric He has served as our director since March 2018.
Gan was the chief financial officer of KongZhong Corporation. Mr. Gan is also an independent director of Trip.com Group Ltd. (Nasdaq: TCOM; HKEX: 9961). Mr. Gan received his bachelor’s degree in business administration from the University of Iowa in 1994 and his MBA degree from the University of Chicago Booth School of Business in 1999.
Gan has been a founding partner of INCE Capital Limited since 2019. From 2006 to 2019, Mr. Gan was a managing partner of Qiming Venture Partners. From 2005 to 2006, Mr. Gan was the chief financial officer of KongZhong Corporation. Mr. Gan is also an independent director of Trip.com Group Ltd. (Nasdaq: TCOM). Mr.
Xu received his associate degree from Beijing University of Posts and Telecommunications in 2010. 142 Table of Contents JP Gan has served as our director since January 2015. Mr. Gan has been a founding partner of INCE Capital Limited since 2019. From 2006 to 2019, Mr. Gan was a managing partner of Qiming Venture Partners. From 2005 to 2006, Mr.
Li has served as a non-executive director of Huanxi Media Group Limited (SEHK: 1003) since September 2020. Prior to joining us, Ms. Li was in charge of human resources operations at Cheetah Mobile (NYSE: CMCM) from 2013 to 2014. Previously, Ms.
Under her leadership, the team successfully expanded our revenue streams and significantly enhanced our brand awareness. Starting from 2021, Ms. Li also chairs our Environmental, Social and Governance Committee. Ms. Li has served as a non-executive director of Huanxi Media Group Limited (HKEX: 1003) since September 2020. Prior to joining us, Ms.
Box 2221, Road Town, Tortola, British Virgin Islands.
The registered address of Vanship Limited is Start Chambers, Wickham’s Cay II., P.O. Box 2221, Road Town, Tortola, British Virgin Islands.
Removed
In the past two years, Ms. Li has built a strong business and operational team. Under her leadership, the team successfully produced blockbusters including New Year’s Eve Gala event and Hou Lang, significantly enhancing Bilibili’s brand awareness and driving the user and revenue growth. Starting from 2021, Ms. Li also chairs our Environmental, Social and Governance Committee. Ms.
Added
Share Incentive Plans In November 2014, our board of directors approved a global share incentive plan, or the Global Share Plan, to attract and retain the best available personnel, provide additional incentives to employees, directors and consultants and promote the success of our business.
Removed
Li currently serves as a board member of several private internet and technology companies based in China, and has served as Chairman of Secretary Committee of Three Squirrels Inc. (Shenzhen Stock Exchange: 300783) since May 2020. Mr.
Added
We subsequently amended our 2018 Plan in March 2020 and October 2022 and terminated our Global Share Plan in October 2022 by unanimous written approval of our board of directors.
Removed
We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our executive officers and directors.
Added
The awards previously granted and outstanding and the evidencing original award agreements shall survive the termination of the Global Share Plan and remain effective until the expiration of their original terms, as may be amended from time to time.
Removed
As of February 28, 2022, the maximum aggregate number of ordinary shares which may be issued pursuant to all awards under the Global Share Plan is 19,880,315 ordinary shares, subject to amendment.
Added
The maximum aggregate number of Class Z ordinary shares which may be issued pursuant to all awards under the 2018 Plan is 30,673,710 Class Z ordinary shares, representing 10% of the total number of issued Class Z ordinary shares as of the date on which Bilibili’s voluntary conversion of its secondary listing status to primary listing on the Hong Kong Stock Exchange becomes effective (excluding Class Z ordinary shares underlying awards which have terminated, expired or lapsed in accordance with that have been forfeited in accordance with the 2018 Plan).
Removed
The maximum aggregate number of shares which may be issued pursuant to all awards under the 2018 Plan, or the Award Pool, is initially 6,962,069, provided that, in the event that the aggregate number of shares which may be issued pursuant to all granted awards (including incentive share options) reaches 6,962,069, thereafter the Award Pool of the 2018 Plan shall be increased automatically if and whenever the unissued shares reserved accounts for less than 0.5% of the total number of shares of Bilibili issued and outstanding on the last day of the immediately preceding fiscal year (excluding issued shares reserved for future option exercise and restricted share unit vesting), as a result of which increase the shares unissued and reserved in the Award Pool immediately after each such increase shall equal to 2.5% of the total number of shares of Bilibili issued and outstanding on the last day of the immediately preceding fiscal year (excluding issued shares reserved for future option exercise and restricted share unit vesting).
Added
The Class Z ordinary shares that may be issued pursuant to the awards under the 2018 Plan may be in the form of new shares to be issued by us or in the form of shares or ADSs that may be purchased in the open market by us or a third party trust from time to time in connection with the 2018 Plan.
Removed
The chairman or the committee, as applicable, will determine the participants to receive awards, the type and number of awards to be granted to each participant, and the terms and conditions of each award under the Global Share Plan.
Added
(1) Includes restricted share units Equity Incentive Trust s Bilibili Inc. Global Share Incentive Trust and Bilibili Inc.
Removed
The full board of directors will conduct the general administration of the Global Share Plan if required by applicable laws and with respect to awards granted to the chairman of the board of directors, the committee members (if applicable), independent directors and executive officers of Bilibili.
Added
Li, the other beneficiaries of the trust have no voting rights attached to such shares.
Removed
Our board of directors or a committee of one or more members of the board of directors will administer the 2018 Plan.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

10 edited+0 added−6 removed17 unchanged
We have the right to defer filing of a registration statement for a period of not more than 90 days if our board of directors determines in good faith that filing of a registration statement in the near future will be materially detrimental to us or our shareholders, but we cannot exercise the deferral right more than once for more than once during any twelve-month period and cannot register any other securities during such period.
We have the right to defer filing of a registration statement for a period of not more than 90 days if our board of directors determines in good faith that filing of a registration statement in the near future will be materially detrimental to us or our shareholders, but we cannot exercise the deferral right more than once for more than once during any twelve-month period and cannot register any other securities during such period.
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS A. Major Shareholders Please refer to “Item 6. Directors, Senior Management and Employees—E. Share Ownership.” 145 Table of Contents B. Related Party Transactions Contractual Arrangements with the Relevant VIEs and Their Respective Individual Shareholders See “Item 4. Information on the Company—C.
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS A. Major Shareholders Please refer to “Item 6. Directors, Senior Management and Employees—E. Share Ownership.” B. Related Party Transactions Contractual Arrangements with the Relevant VIEs and Their Respective Individual Shareholders See “Item 4. Information on the Company—C.
We have no obligation to effect any demand, piggyback or Form F-3 or Form S-3 registration upon the later of (i) the fifth anniversary from the date of closing of a QIPO as defined in the shareholders agreement, and (ii) with respect to any holder, the date following a QIPO on which such holder holds less than 1% of the equity securities of our company and all registrable securities may be sold under Rule 144 of the Securities Act in any 90-day period.
We have no obligation to effect any demand, piggyback or Form F-3 or Form S-3 registration upon the later of (i) the fifth anniversary from the date of closing of a QIPO as defined in the shareholders agreement, and (ii) with respect to any holder, the date following a QIPO on which such holder holds less than 1% of the equity securities of our company and all registrable securities may be sold under Rule 144 of the Securities Act in any 90-day period. 151 Table of Contents Pursuant to the share purchase and investor rights agreement by and between us and Tencent Mobility Limited dated October 3, 2018, we have granted certain registration rights to Tencent Mobility Limited or its affiliates.
Accordingly, Tencent Mobility Limited or its affiliates are entitled one registration on Form F-3, after the expiration of a lock-up period, covering such Class Z ordinary shares issued and sold to Tencent Mobility Limited pursuant to the aforesaid share purchase and investor rights agreement. 146 Table of Contents Employment Agreements and Indemnification Agreements We have entered into employment agreements with each of our executive officers.
Accordingly, Tencent Mobility Limited or its affiliates are entitled one registration on Form F-3, after the expiration of a lock-up period, covering such Class Z ordinary shares issued and sold to Tencent Mobility Limited pursuant to the aforesaid share purchase and investor rights agreement.
Interest bearing guaranteed loans. We established an entity with an independent third party and two entities respectively controlled by Mr. Rui Chen and Ms. Ni Li to acquire the land use rights for a parcel of land in Shanghai for future construction.
As of December 31, 2022, we had no unpaid consideration due to these related parties. Capital contribution/loans to the Entity. In 2020, we established the Entity with an independent third party and two entities respectively controlled by Mr. Rui Chen and Ms. Ni Li to acquire the land use rights for a parcel of land in Shanghai for future construction.
Under these agreements, each of our executive officers is employed for a specified time period.
Employment Agreements and Indemnification Agreements We have entered into employment agreements with each of our executive officers. Under these agreements, each of our executive officers is employed for a specified time period.
In September 2020, we acquired noncontrolling interest of Chaodian from certain related parties on which we have significant influence, with purchase consideration of RMB257.3 million. As of December 31, 2021, we had no unpaid consideration due to certain related parties. Interest bearing loans.
Purchase of noncontrolling interests of Chaodian Inc. In July 2019, we entered into a series of agreements to acquire a controlling interest in Chaodian Inc. In September 2020, we acquired noncontrolling interest of Chaodian Inc. from certain related parties on which we have significant influence, with purchase consideration of RMB257.3 million.
We made capital contribution of RMB1,084.3 million and provided interest-bearing guaranteed loans of an aggregate principal amount of RMB1,701.0 million to an entity for its operation. The annual interest rates of the loans were 3.3%. The balance as of December 31, 2021 represents interest-bearing guaranteed loans and interest expenses related to an entity, which are non-trade in nature. C.
We made capital contribution of RMB1,530.5 million and provided interest-bearing guaranteed loans of an aggregate principal amount of RMB1,253.7 million to the Entity for its operation. The annual interest rates of the loans were 3.3%. C. Interests of Experts and Counsel Not applicable.
In July 2020, we acquired certain equity interests of two investments from the investment fund with the consideration of RMB110.0 million, which was based on the estimated fair value of the investments.
In July 2020, we acquired certain equity interests in two investments of an investment fund, of which we are a limited partner, with a consideration of RMB110.0 million. In 2022, we transferred some of our equity interests in certain investments to another investment fund, of which we are a limited partner, with a consideration of RMB275.0 million.
For the years ended December 31, 2019, 2020 and 2021, we purchased goods, promotional and other services amounting to RMB87.6 million, RMB35.1 million and RMB117.1 million (US$18.4 million), respectively. 147 Table of Contents As of December 31, 2019 and 2020, we had RMB195.3 million due from the investment fund and other related parties, and RMB74.2 million due from the investment fund which was non-trade in nature, respectively.
Directors, Senior Management and Employees—B. Compensation—Share Incentive Plan.” Other Related Party Transactions Purchases of goods and services. For the years ended December 31, 2020, 2021 and 2022, we purchased goods and promotional and other services amounting to RMB35.1 million, RMB117.1 million and RMB206.9 million (US$30.0 million), respectively, from certain related parties. 152 Table of Contents Acquisition/transfer of long-term investments.
Removed
Pursuant to the share purchase and investor rights agreement by and between us and Tencent Mobility Limited dated October 3, 2018, we have granted certain registration rights to Tencent Mobility Limited or its affiliates.
Removed
Directors, Senior Management and Employees—B. Compensation—Share Incentive Plans.” Other Related Party Transactions Investment transfers. In June 2019, we transferred several equity investments to an investment fund, and one of our subsidiaries was its limited partner. The cost of the equity investments transfer was RMB465.8 million.
Removed
The consideration was RMB539.6 million, which was determined based on the estimated fair value of the investments. The difference between the consideration and cost of the investments was recognized as investment income.
Removed
The balances due from the investment fund as of December 31, 2019, December 31, 2020, and December 31, 2021 were consideration receivables and dividend receivables, which was non-trade in nature. Promotional and other services.
Removed
As of December 31, 2021, we had RMB48.1 million due from the investment fund, which was non-trade in nature. In July 2019, we entered into a series of agreements to acquire a controlling interest in Chaodian.
Removed
The balances as of December 31, 2020 and 2021 mainly represent interest-bearing loans and interest expenses of RMB105.6 million and RMB279.2 million related to an equity investee, which was non-trade in nature, and partially offset by the trade payables to the equity investee. Interest rates of loans to the investee incurred in 2020 and 2021 were 2.8% and 4.5%, respectively.

Other BILI 10-K year-over-year comparisons