BIT Mining Announces Removal of VIE Structure and Disposal of Chinese Lottery Business

Rhea-AI Summary

BIT Mining Limited (NYSE: BTCM) announced the elimination of its variable interest entity (VIE) structure and the disposal of its Chinese lottery business for no consideration. This lottery segment contributed merely RMB2.7 million (US$0.4 million) or 13.6% of total revenue, alongside a net loss of RMB9.8 million (US$1.5 million) for Q1 2021. As of March 31, 2021, VIE subsidiaries accounted for 6.3% of total assets. The company, having shifted focus to overseas cryptocurrency mining, anticipates no material impact on its operations from this change.

Positive

• BIT Mining pivoted successfully to cryptocurrency mining outside China, achieving positive financial results.
• The decision to eliminate the VIE structure allows for a more streamlined business focus on overseas mining operations.

Negative

• The Chinese lottery business was incurring losses, indicating a previous drain on resources.
• The VIE subsidiaries represented 6.3% of total assets and 13.6% of revenue, indicating a reduction in income source.

HONGKONG, China, July 23, 2021 /PRNewswire/— BIT Mining Limited (NYSE: BTCM) ("BIT Mining" or "the Company"), a leading cryptocurrency mining enterprise, today announced its decision to eliminate its variable interest entity ("VIE") structure and to dispose of its Chinese lottery related business for nil consideration. BIT Mining's consolidated affiliated subsidiaries under the VIE structure (the "VIE subsidiaries"), were primarily engaged in the Company's Chinese lottery related business, which contributed RMB2.7 million (US$0.4 million), or 13.6%, of the Company's total revenue and net loss of RMB9.8 million (US$1.5 million) for the three months ended March 31, 2021.  As of March 31, 2021, total assets held by the VIE subsidiaries represented RMB82.8 million (US$12.6 million), or 6.3%, of the Company's total assets and net debt held by the VIE subsidiaries was RMB161.6 million (US$24.6 million).

The VIE subsidiaries will be deconsolidated and their financial results will no longer be included in the Company's consolidated financial statements as a result of eliminating the VIE structure. Due to the expansion of the Company's cryptocurrency mining business outside of China, the Company does not expect the removal of the VIE structure to have a material impact on its operational results or financial position.

Since December 2020, the Company has pivoted its business to cryptocurrency mining and has achieved positive financial results by adopting an overseas development strategy.  In consideration of the continued losses sustained by its Chinese lottery related business operations, the Company has decided to exit and dispose of this immaterial business. With the elimination of the VIE structure, BIT Mining has exited its Chinese lottery related business and will focus on the overseas crypto mining business.

About BIT Mining

BIT Mining (NYSE: BTCM) is a leading cryptocurrency mining company, with a long-term strategy to create value across the cryptocurrency industry. Its business covers cryptocurrency mining, mining pool, and data center operation. The Company has deployed Bitcoin mining machines with a theoretical maximum total hash rate capacity of approximately 1,031.5 PH/s and owns the entire mining pool business operated under BTC.com, including the domain name BTC.com. The Company has also entered into a definitive agreement to acquire a 7-nanometer cryptocurrency mining machine manufacturer, Bee Computing, to complete its vertical integration with its supply chain, increase its self-sufficiency and strengthen its competitive position.

Safe Harbor Statements

This news release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will", "expects", "anticipates", "future", "intends", "plans", "believes", "estimates", "target", "going forward", "outlook" and similar statements. Such statements are based upon management's current expectations and current market and operating conditions and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the Company's control, which may cause the Company's actual results, performance or achievements to differ materially from those in the forward-looking statements. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the U.S. Securities and Exchange Commission. The Company does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under law.

For further information:

BIT Mining Limited
ir@btc.com
Ir.btc.com (The Investor Relations website has moved to http://ir.btc.com.)
Ms. Danni Zheng
Phone: +86 755 8633 8005

The Piacente Group, Inc.
Helen Wu
Tel: +86 (10) 6508-0677
Email: BITMining@thepiacentegroup.com   

In the United States:
The Piacente Group, Inc.
Brandi Piacente
Tel: +1 (212) 481-2050
Email: BITMining@thepiacentegroup.com

View original content:https://www.prnewswire.com/news-releases/bit-mining-announces-removal-of-vie-structure-and-disposal-of-chinese-lottery-business-301340422.html

SOURCE BIT Mining Limited

FAQ

What did BIT Mining announce on July 23, 2021?

BIT Mining announced the elimination of its VIE structure and disposal of its Chinese lottery business.

How much revenue did BIT Mining's Chinese lottery business contribute?

The Chinese lottery business contributed RMB2.7 million (US$0.4 million), which is 13.6% of total revenue.

What is the expected impact of removing the VIE structure on BIT Mining?

BIT Mining does not expect any material impact on its operational results or financial position.

What percentage of total assets did the VIE subsidiaries represent?

As of March 31, 2021, the VIE subsidiaries represented 6.3% of BIT Mining's total assets.

What was the net loss from BIT Mining's lottery business?

The net loss from the Chinese lottery business for Q1 2021 was RMB9.8 million (US$1.5 million).