Future Fintech Announces Framework Agreement to Acquire Bitcoin Mining Farm

Rhea-AI Summary

Future FinTech Group (NASDAQ: FTFT) has signed a framework agreement to acquire Nanjing Ribensi Electronic Technology, a bitcoin mining farm in Sichuan, China, for approximately $9.1 million. The farm can operate 30,000 mining machines and has obtained all necessary approvals. The sellers guarantee net profits of RMB 15 million for 2021, RMB 20 million for 2022, and RMB 25 million for 2023, with a commitment to cover any shortfalls. The mining farm will leverage low hydroelectric energy costs for operations.

Positive

• Acquisition of a mining farm with a capacity for 30,000 machines enhances FTFT's operational capabilities.
• Guaranteed net profits of RMB 15 million, RMB 20 million, and RMB 25 million for the next three years provide a stable financial outlook.
• Use of low-cost hydroelectric energy is expected to improve profit margins from mining operations.

Negative

• The framework agreement is non-binding, introducing potential risks related to finalizing the acquisition.
• Dependence on the sellers to cover any financial shortfalls could signal potential risks if targets are not met.

NEW YORK, April 1, 2021 /PRNewswire/ -- Future FinTech Group Inc. (NASDAQ: FTFT) ("hereinafter referred to as Future FinTech", "FTFT" or "the Company"), a leading blockchain-based e-commerce business and a fintech service provider, announced today that the Company and the shareholders (the "Sellers") of Nanjing Ribensi Electronic Technology Co., Ltd. ("Nanjing Ribensi") have signed an acquisition framework agreement (the "Framework Agreement") to acquire Nanjing Ribensi which currently operates a bitcoin mining farm with a capacity to operate 30,000 bitcoin mining machines. Bitcoin mining farms are data centers that are equipped to host mining machines to mine bitcoins or other cryptocurrencies and can require substantial technical, energy and other resources. The Company's target bitcoin mining farm is located in Yajiang County, Sichuan Province, China, and it has all the necessary governmental approvals. The Frame Agreement is non-binding except for the 'Confidentiality and Exclusivity' and 'Applicable Law and Dispute Resolution' sections of the agreement.

According to the Frame Agreement, FTFT will pay the Sellers a total of RMB 60 million (approximately $9.1 million) for the acquisition of Nanjing Ribensi.

The Sellers guarantee that the net profit of Nanjing Ribensi shall not be less RMB 15 million (approximately $2.3 million) for 2021, RMB 20 million (approximately $3.0 million) for 2022 and RMB 25 million (approximately $3.8 million) for 2023. If these financial targets are not met, the Sellers will bear any shortfalls attributable to these figures and make the Company whole as to these projected net profit results. The Sellers also guarantee that the target mining farm will maintain normal operations for at least six to eight years, and that the current operation team of Nanjing Ribensi will continue to be responsible for the operation of the mining farm including maintenance, management and updating of the mining equipment, as well as attracting additional investment in the mining farm as needed.

Mr. Shanchun Huang, Chief Executive Officer of Future FinTech, commented, "We have formed an internal Company committee, the FT Bitcoin Mining Hash Rate Committee, to oversee and manage the potential acquisition, maintenance and operation of all of our bitcoin mining related development. The bitcoin mining farm that we have targeted for potential acquisition not only enables us to deploy advanced bitcoin mining machines, but to potentially generate profits due to the expected low energy cost of the target mining farm since it uses local low cost of hydroelectricity to run the mining machines."

About Future FinTech Group Inc.

Future FinTech Group Inc. ("Future FinTech", "FTFT" or the "Company") is a leading blockchain e-commerce company and a service provider for financial technology incorporated in Florida. The Company's operations include a blockchain-based online shopping mall platform, Chain Cloud Mall ("CCM"), a cross-border e-commerce platform (NONOGIRL), an incubator for blockchain based application projects. The Company is also engaged in the development of blockchain based e-Commerce technology as well as financial technology. For more information, please visit http://www.ftftex.com/.

Safe Harbor Statement

Certain of the statements made in this press release are "forward-looking statements" within the meaning and protections of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions, and future performance, and involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause the actual results, performance, capital, ownership or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. All statements other than statements of historical fact are statements that could be forward-looking statements. You can identify these forward-looking statements through our use of words such as "may," "will," "anticipate," "assume," "should," "indicate," "would," "believe," "contemplate," "expect," "estimate," "continue," "plan," "point to," "project," "could," "intend," "target" and other similar words and expressions of the future.

All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary notice, including, without limitation, those risks and uncertainties described in our annual report on Form 10-K for the year ended December 31, 2019 and otherwise in our SEC reports and filings, including the final prospectus for our offering. Such reports are available upon request from the Company, or from the Securities and Exchange Commission, including through the SEC's Internet website at http://www.sec.gov. We have no obligation and do not undertake to update, revise or correct any of the forward-looking statements after the date hereof, or after the respective dates on which any such statements otherwise are made.

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SOURCE Future FinTech Group Inc.

FAQ

What is the value of Future FinTech's acquisition of Nanjing Ribensi?

The acquisition is valued at approximately $9.1 million (RMB 60 million).

What are the expected profit guarantees from Nanjing Ribensi after the acquisition?

The sellers guarantee net profits of RMB 15 million for 2021, RMB 20 million for 2022, and RMB 25 million for 2023.

What capacity does the targeted bitcoin mining farm have?

The mining farm has the capacity to operate 30,000 bitcoin mining machines.

Where is the bitcoin mining farm located?

The bitcoin mining farm is located in Yajiang County, Sichuan Province, China.

What are the risks involved with the framework agreement for the acquisition?

The framework agreement is non-binding except for certain sections, which could pose risks in finalizing the acquisition.