GlobeNewswire Inc | Aug 24, 2021 06:00AM EDT

August 24, 2021

-- 18.0% year-over-year revenue growth--- 58.1% year-over-year total paying user growth--

BEIJING, Aug. 24, 2021 (GLOBE NEWSWIRE) -- BlueCity Holdings Limited (BlueCity or the Company) (Nasdaq: BLCT), a leading online LGBTQ platform, today announced its unaudited financial results for the second quarter ended June 30, 2021.

Second Quarter 2021 Highlights

-- Total revenues reached RMB291.9 million (US$45.2 million), an increase of 18.0% from the same period in 2020. -- Net loss was RMB35.0 million (US$5.4 million), compared with net loss of RMB3.3 million in the second quarter of 2020. -- Adjusted Net Loss1 (Non-GAAP) was RMB38.4 million (US$5.9 million), compared with adjusted net loss (non-GAAP) of RMB3.0 million in the second quarter of 2020. -- Monthly active users (MAUs) of BlueCitys portfolio apps2 reached 8.3 million, an increase of 29.3% from the same period in 2020. -- Total paying users3 of BlueCitys portfolio apps reached 724 thousand, an increase of 58.1% compared with 458 thousand in the second quarter of 2020.

Mr. Baoli Ma, BlueCitys Founder, Chairman and Chief Executive Officer, commented: We are pleased to announce another healthy quarter as we continued to optimize our product offerings with strong user engagement growth. Total MAU grew by 29.3% year over year, reaching 8.3 million. Our total paying users grew by 58.1% year over year to 724 thousand. We are excited to see this strong growth, which reflects our dedication in optimizing products and cultivating our users' consumption habits. We remain committed to actively exploring new ways to enrich our product and service offerings, and are optimistic in further expanding our monetization capabilities."

Mr. Ma added: Significant progress was achieved and maintained in an upwards trend with He Health. In late July, we officially launched online consultation services with dozens of doctors from Chinas top hospitals. Thousands of men have had consultations since launch, illustrating again the huge demand of this flourishing business sector. We will continue to devote resources and initiate a wide range of activities to promote health awareness for men and expand geographic coverage of our fast-delivery services, and believe we can achieve meaningful progress in the near future with our inherent competitive value and first-mover advantages with a focus on mens health.

Mr. Junchen Sun, BlueCitys acting Chief Financial Officer commented: We achieved healthy growth among all of our business sectors for the second quarter. Total revenues grew by 18.0% year over year to RMB291.9 million. Revenues from He Health grew significantly by 134.5% year over year. By optimizing our content offerings and enriching customized services, membership services revenue also achieved a strong growth of 113.0% year over year. These results demonstrate both the strength of our strategy and our ability to execute. We are confident about our product roadmap and execution velocity.

Second Quarter 2021 Financial Results

Total Revenues

Total revenues were RMB291.9 million (US$45.2million), representing an increase of 18.0% year-over-year.

Live streaming services. Revenues from live streaming services reached RMB223.0 million (US$34.5 million), representing an increase of 6.1% from the same period of 2020. The increase was primarily resulted from the growth in the number of paying users for live streaming services.

Membership services. Revenues from membership services reached RMB33.7 million (US$5.2 million), representing an increase of 113.0% from the same period of 2020. The increase was primarily due to the significant increase in the number of paying users benefited from new membership service offerings on the Companys portfolio apps.

Advertising services. Revenues from advertising services reached RMB18.0 million (US$2.8 million), representing an increase of 67.7% from the same period of 2020, the increase was primarily due to the Companys enhanced efforts to attract more advertisers with new advertising and marketing solutions as well as improved advertising efficiency.

Merchandise sales. Revenues from merchandise sales of He Health reached RMB15.3 million (US$2.4 million), representing an increase of 134.5% from the same period of 2020. The increase was primarily due to the continuous expansion of the Companys health-related services.

Others. Revenues from other services were RMB1.9 million (US$0.3 million), representing a decrease of 53.9% from RMB4.2 million in 2020. The decrease was primarily due to the decreased revenue from family planning services as the Company no longer provides these services since March 2021.

Cost and expenses

-- Cost of revenues. The cost of revenues was RMB192.1 million (US$29.8 million), representing an increase of 12.9% year-over-year. The increase was primarily due to the growth of revenue-sharing costs along with the growth of live streaming services, the increased cost of products in connection with the growth of He Health merchandise sales as well as the increased staff cost. -- Selling and marketing expenses. Selling and marketing expenses were RMB68.9 million (US$10.7 million), representing an increase of 68.2% year-over-year. The increase was mainly due to the increased advertising and promotion expenses, the increased staff cost and share-based compensation expenses. -- Technology and development expenses. Technology and development expenses were RMB51.6 million (US$8.0 million), representing an increase of 64.6% year-over-year. The increase was mainly due to the increased staff cost in technology related department, the increase in content, server and bandwidth cost in line with our business growth as well as share-based compensation expenses. -- General and administration expenses. General and administrative expenses were RMB15.4 million (US$2.4 million), representing an increase of 49.4% year-over-year. The increase was mainly due to the increased professional fees as well as staff cost, partially offset by the decrease of share-based expenses due to the forfeiture of stock options.

Operating loss

Operating loss was RMB36.2 million (US$5.6 million), compared with a loss of RMB5.5 million in the second quarter of 2020.

Income tax benefit

Income tax benefit were RMB426 thousand (US$66 thousand), compared with income tax benefit amounted to RMB156 thousand in the second quarter of 2020.

Net loss

Net loss was RMB35.0 million (US$5.4 million), compared with net loss of RMB3.3 million in the second quarter of 2020.

Adjusted net loss (Non-GAAP) 4

Adjusted net loss was RMB38.4 million (US$5.9 million) compared with adjusted net loss of RMB3.0 million in the second quarter of 2020.

Cash and cash equivalents and term deposits

As of June 30, 2021, the Company had cash and cash equivalents and term deposits of RMB453.7 million (US$70.3 million), compared to RMB611.8 million as of December 31, 2020.

Business Outlook

For the full year 2021, the Company expects total revenues to be between RMB1.15 billion to RMB1.20 billion, representing year-over-year growth of 12% to 16%. This forecast reflects the Companys current and preliminary views on the market and operational conditions, which are subject to change.

Conference Call

BlueCity's management team will host an earnings conference call at 8:00 AM on Tuesday, August 24, 2021, U.S. Eastern Time (8:00 PM on August 24, 2021, Beijing/Hong Kong Time).

Please register in advance of the conference using the link provided below. Conference access information will be provided upon registration.

Participant Online Registration http://apac.directeventreg.com/registration/event/5799482

A replay of the conference call may be accessed by phone at the following numbers until September 1, 2021. To access the replay, please reference the conference ID 5799482.

Phone NumberInternational +61 2 8199-0299United States +1 (855) 452-5696Hong Kong +852 800963117Mainland China +86 4006322162 +86 8008700205

A live and archived webcast of the conference call will be available on the companys investors relations website at https://ir.blue-city.com/.

About BlueCity

BlueCity (NASDAQ: BLCT) is a world-leading online LGBTQ platform providing a full suite of services to foster connections and enhance the wellbeing of the LGBTQ community through its portfolio of brands. BlueCitys mobile app Blued enables users to conveniently and safely connect with each other, express themselves and access professional health-related services. Available in 13 languages, it is the largest online LGBTQ community in China, India, Korea, Thailand and Vietnam. BlueCitys portfolio of brands also includes Finka, a leading gay social networking app for a younger generation in China, and LESDO, a leading lesbian social networking app in China.

Use of Non-GAAPFinancial Measures

The Company uses non-GAAP measures, such as Adjusted net loss, in evaluating its operating results and for financial and operational decision-making purposes. The Company defines Adjusted net loss as net loss before share-based compensation expenses, amortization related to intangible assets resulting from acquisitions, income tax related to intangible assets resulting from acquisitions, and changes in fair value of financial instruments. The Company believes that the non-GAAP financial measures help identify underlying financial and business trends relating to its results of operations that could otherwise be distorted by the effect of certain expenses that the Company includes in net loss. The Company believes that the non-GAAP financial measures provide useful information about the Companys results of operations, enhance the overall understanding of the Companys past performance and future prospects and allow for greater visibility with respect to key metrics used by the Companys management in its financial and operational decision-making.

Each of the non-GAAP financial measures should not be considered in isolation or construed as an alternative to its comparable GAAP measure or any other measure of performance or as an indicator of the Companys operating performance. Investors are encouraged to review the Companys most directly comparable GAAP measures in conjunction with the non-GAAP financial measures. The non-GAAP financial measures presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to the Companys data. The Company encourages investors and others to review its financial information in its entirety and not rely on a single financial measure.

The Company mitigates these limitations by reconciling the non-GAAP financial measures to the most comparable U.S. GAAP performance measures, all of which should be considered when evaluating the Companys performance.

For more information on the non-GAAP financial measures, please see the table captioned Unaudited Reconciliations of GAAP and Non-GAAP Results set forth at the end of this press release.

Exchange Rate

This press release contains translations of certain RMB amounts into U.S. dollars (USD) at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to USD were made at the rate of RMB6.4566 to US$1.00, the noon buying rate in effect on June 30, 2021 in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or USD amounts referred to could be converted into USD or RMB, as the case may be, at any particular rate or at all.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as may, will, expect, anticipate, aim, estimate, intend, plan, believe, is/are likely to, potential, continue and similar statements. Among other things, business outlook and quotations from management in this announcement, as well as BlueCitys strategic and operational plans, contain forward-looking statements. BlueCity may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including but not limited to statements about BlueCitys beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: the Companys goals and strategies; the Companys ability to retain and increase the number of users, paying members and advertisers, and expand its product and service offerings; the Companys future business development, financial condition and results of operations; the expected changes in the Companys revenues, costs or expenditures; the Companys expectation regarding the use of proceeds from its IPO; competition in the Companys industry and its popularity within the LGBTQ population; and relevant government policies and regulations relating to the Companys industry; and the development and impacts of COVID-19. Further information regarding these and other risks, uncertainties or factors is included in the Companys filings with the U.S. Securities and Exchange Commission. All information provided in this press release and in the attachments is current as of the date of the press release, and the Company does not undertake any obligation to update such information, except as required under applicable law.

For more information, please contact:

In China:

BlueCity Holdings Limited Ms. Lingling KongInvestor Relations DirectorPhone: +86 10-5876-9662Email: ir@blued.com

The Blueshirt GroupMs. Susie WangPhone: +86 138-1081-7475Email: susie@blueshirtgroup.com

In the United States:

The Blueshirt GroupMs. Julia QianPhone: +1 973-619-3227Email: Julia@blueshirtgroup.com

BlueCity Holdings LimitedUNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

As of December 31, As of June 30, 2021 2020 RMB RMB US$ ASSETS Current assets: Cash and cash 439,492,788 344,556,719 53,365,040 equivalentsTerm deposits 172,257,360 109,175,690 16,909,161 Accounts receivable, 5,588,023 13,164,831 2,038,973 netInventories 6,853,202 7,225,055 1,119,019 Prepayments and other 58,629,416 112,655,733 17,448,151 current assetsTotal current assets 682,820,789 586,778,028 90,880,344 Non-current assets: Investment securities 50,000 - - Property and equipment, 11,445,548 14,035,175 2,173,772 netIntangible assets, net 52,084,512 51,210,732 7,931,532 Goodwill 196,002,568 191,560,426 29,668,932 Other non-current 2,426,128 2,446,246 378,875 assetsTotal non-current 262,008,756 259,252,579 40,153,111 assetsTOTAL ASSETS 944,829,545 846,030,607 131,033,455 LIABILITIES Current liabilities: Accounts payable 20,372,680 27,578,042 4,271,295 Deferred revenue 35,226,237 37,768,011 5,849,520 Income tax payable 2,122,765 2,517,891 389,972 Accrued expenses andother current 118,958,796 105,116,854 16,280,526 liabilitiesTotal current 176,680,478 172,980,798 26,791,313 liabilities Non-current liabilities Deferred income tax 10,954,883 10,528,316 1,630,629 liabilitiesTotal non-current 10,954,883 10,528,316 1,630,629 liabilitiesTotal liabilities 187,635,361 183,509,114 28,421,942 SHAREHOLDERS? EQUITY: Ordinary shares^5 12,018 12,419 1,923 Additional paid-in 2,188,870,625 2,191,958,362 339,491,120 capitalAccumulated other (107,514,737 ) (118,180,124 ) (18,303,770 )comprehensive lossAccumulated deficit (1,324,173,722 ) (1,411,269,164 ) (218,577,760 )Total shareholders' 757,194,184 662,521,493 102,611,513 equity TOTAL LIABILITIES AND 944,829,545 846,030,607 131,033,455 SHAREHOLDERS' EQUITY

BlueCity Holdings LimitedUNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVELOSS For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2021 2020 2021 RMB RMB US$ RMB RMB US$Revenues 247,439,121 291,883,490 45,206,996 454,912,531 563,014,350 87,199,819 Cost and expenses: Cost of revenues (170,256,207 ) (192,147,582 ) (29,759,871 ) (309,469,419 ) (377,235,822 ) (58,426,389 )Selling and (40,963,706 ) (68,908,693 ) (10,672,597 ) (79,574,875 ) (134,256,422 ) (20,793,672 )marketing expensesTechnology anddevelopment (31,336,233 ) (51,568,967 ) (7,987,016 ) (61,618,771 ) (99,746,991 ) (15,448,842 )expensesGeneral andadministrative (10,333,962 ) (15,436,516 ) (2,390,812 ) (20,124,281 ) (40,645,940 ) (6,295,254 )expensesTotal cost and (252,890,108 ) (328,061,758 ) (50,810,296 ) (470,787,346 ) (651,885,175 ) (100,964,157 )expensesOperating loss (5,450,987 ) (36,178,268 ) (5,603,300 ) (15,874,815 ) (88,870,825 ) (13,764,338 )Change in fairvalue of financial (387 ) - - (5,270 ) - - instrumentsInterest income 1,945,683 737,797 114,270 4,376,602 947,077 146,684 Loss before income (3,505,691 ) (35,440,471 ) (5,489,030 ) (11,503,483 ) (87,923,748 ) (13,617,654 )taxesIncome tax benefit 155,928 426,252 66,018 540,642 828,306 128,288 Net loss (3,349,763 ) (35,014,219 ) (5,423,012 ) (10,962,841 ) (87,095,442 ) (13,489,366 )Reversal ofaccretion andmodification ofRedeemable 264,368,945 - - 244,080,678 - - ConvertiblePreferred Sharesto redemptionvalueNet income/(loss)available for 261,019,182 (35,014,219 ) (5,423,012 ) 233,117,837 (87,095,442 ) (13,489,366 )distribution Net loss (3,349,763 ) (35,014,219 ) (5,423,012 ) (10,962,841 ) (87,095,442 ) (13,489,366 )Othercomprehensive income/(loss)Unrealized gain onanavailable-for-sale 1,123,335 - - 772,948 - - investment, net ofnil income taxesForeign currencytranslation 3,256,853 (12,408,052 ) (1,921,763 ) (19,902,688 ) (10,665,387 ) (1,651,858 )adjustment, net ofnil income taxesComprehensive 1,030,425 (47,422,271 ) (7,344,775 ) (30,092,581 ) (97,760,829 ) (15,141,224 )income/(loss)

BlueCity Holdings LimitedNOTES TO UNAUDITED FINANCIAL INFORMATION

For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2021 2020 2021 RMB RMB US$ RMB RMB US$ Share-basedcompensation expensesincluded in:?Cost of - 167,972 26,016 - 1,023,006 158,443 revenues?Selling andmarketing - 1,092,857 169,262 - 3,796,512 588,005 expenses?Technologyand - 1,255,670 194,478 - 2,614,641 404,956 developmentexpenses?General andadministrative - (7,525,573 ) (1,165,563 ) - (4,386,058 ) (679,314 )expensesTotal - (5,009,074 ) (775,807 ) - 3,048,101 472,090 Amortizationrelated tointangibleassets resulting fromacquisitionsincluded in:?Cost of 411,086 1,640,975 254,155 411,086 3,097,351 479,719 revenues?Selling andmarketing - 518,840 80,358 - 1,037,680 160,716 expensesTotal 411,086 2,159,815 334,513 411,086 4,135,031 640,435

Unaudited Reconciliations of GAAP and Non-GAAP Results

For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2021 2020 2021 RMB RMB US$ RMB RMB US$ Net loss (3,349,763 ) (35,014,219 ) (5,423,012 ) (10,962,841 ) (87,095,442 ) (13,489,366 )Add: Share-basedcompensation - (5,009,074 ) (775,807 ) - 3,048,101 472,090 expensesAmortizationrelated tointangibleassets 411,086 2,159,815 334,513 411,086 4,135,031 640,435 resultingfromacquisitionsIncome taxrelated tointangibleassets (102,772 ) (539,954 ) (83,628 ) (102,772 ) (1,033,758 ) (160,109 )resultingfromacquisitionsChanges infair value 387 - - 5,270 - - of financialinstrumentsAdjusted net (3,041,062 ) (38,403,432 ) (5,947,934 ) (10,649,257 ) (80,946,068 ) (12,536,950 )loss

_______________________1 Adjusted Net Loss, a non-GAAP financial measure, represents net loss excluding share-based compensation expenses, amortization related to intangible assets resulting from acquisitions, income tax related to intangible assets resulting from acquisitions and changes in fair value of financial instruments. For further information, please see Use of Non-GAAP Financial Measures and Unaudited Reconciliations of GAAP and non-GAAP results at the bottom of this release.2 BlueCitys portfolio apps include Blued, LESDO and Finka. We count MAUs of LESDO and Finka into our MAUs, starting from September 2020 and December 2020, respectively, without eliminating duplicates among our portfolio apps.3 Total paying users is to the total number of users who paid for virtual currency (which can be used to purchase and send virtual gifts in live streaming) and membership services. A user who makes payments for different services offered on the Companys platform using the same registered account is counted as one paying user.4 Adjusted net loss is a non-GAAP financial measure. For more information on non-GAAP financial measures, please see the section of Use of Non-GAAP Financial Measures and the table captioned Unaudited Reconciliations of GAAP and Non-GAAP Results set forth at the end of this press release.5 As of June 30, 2021, there were 13,327,699 Class A Ordinary Shares and 5,114,840 Class B ordinary shares issued and outstanding.