The9 Signed Legally Binding Memorandums of Understanding on the Additional Purchase of Bitcoin Mining Machines

Rhea-AI Summary

The9 Limited (Nasdaq: NCTY) announced the signing of three MOUs to purchase 10,252 Bitcoin mining machines, including AvalonMiner, AntMiner, and WhatsMiner, by issuing approximately 5,883,750 Class A ordinary shares. This transaction is valued at US$38.51 per share, with a lock-up period of six months. The total hash rate from these machines is approximately 192PH/S. A valuation firm will assess the fair market value of the machines, and adjustments to the share issuance may occur accordingly.

Positive

• Acquisition of 10,252 Bitcoin mining machines enhances operational capacity.
• Potential increase in hash rate by approximately 192PH/S could improve revenue forecasts.
• Strategic issuance of shares allows The9 to expand without immediate cash outlay.

Negative

• Issuance of 5,883,750 shares may dilute existing shareholders' equity.
• Dependence on fair market valuation may introduce uncertainty regarding final share issuance.

SHANGHAI, March 9, 2021 /PRNewswire/ -- The9 Limited (Nasdaq: NCTY) ("The9"), an established Internet company, today announced that it signed three legally binding Memorandums of Understanding (collectively the "MOUs") with three unrelated Bitcoin mining machine owners to purchase Bitcoin mining machines by the issuance of Class A ordinary shares. This batch of Bitcoin mining machines includes different brands such as AvalonMiner, AntMiner and WhatsMiner, with an additional total number of 10,252 units and an additional total hash rate of approximately 192PH/S. According to the MOUs, The9 will issue approximately 5,883,750 Class A ordinary shares (equivalent to 196,125 ADSs) to the sellers based on The9 share price of US$38.51 prior to the MOUs, with a lock up period of 6 months. The number of Class A ordinary shares to be issued is subject to certain price adjustment mechanisms to be assessed 6 months after the signing of the definitive agreements. The9 will designate an independent valuation firm to conduct examination and assessment of the Bitcoin mining machine fair market value, and will make adjustment to the number of Class A ordinary shares to be issued if needed.

About The9 Limited

The9 Limited (The9) is an Internet company based in China listed on Nasdaq in 2004. The9 aims to become a diversified high-tech Internet company.

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SOURCE The9 Limited

FAQ

What is the recent acquisition by NCTY?

NCTY signed MOUs to purchase 10,252 Bitcoin mining machines.

How many shares will NCTY issue for the Bitcoin mining machines?

NCTY will issue approximately 5,883,750 Class A ordinary shares.

What is the lock-up period for the shares issued by NCTY?

The lock-up period for the shares is six months.

What hash rate will the new Bitcoin mining machines provide for NCTY?

The new machines will provide an approximate total hash rate of 192PH/S.

What brands of Bitcoin mining machines are included in NCTY's purchase?

The purchase includes AvalonMiner, AntMiner, and WhatsMiner brands.