Chinese online sports lottery services provider 500.com has continued its growth into the cryptocurrency world with the acquisition of Blockchain Alliance Technologies, the owner of BTC.com, which provides cryptocurrency mining pool services, cryptocurrency wallets and information about cryptocurrencies.
Under the agreement, the firm will issue an aggregate of 44,353,435 new Class A ordinary shares, representing around 10% of its overall share capital, to Blockchain Alliance in exchange for all of its shares. The deal is expected to close by 15 April 2021.
If the BTC.com mining pool records a net operating profit total of $20m or more in the fiscal year ending December 31, 2021, 500.com will issue further shares, up to a maximum of 22,176,718.
However, the firm may repurchase shares in the initial payment for a price of just $0.00005 each if the business makes a loss. The number of shares available for repurchase will depend on the loss margin, with a maximum of 10% of the shares for a loss of $10m or more.
The acquisition of BTC.com is one of several recent moves by 500.com in the cryptocurrency world.
In January, it acquired a majority stake in Loto Interactive Limited, increasing its share in the company from 33.7% to 54.2% in a deal worth approximately HK$105m.
The firm also appointed Xianfeng Yang as its new CEO, who has experience in the cryptocurrency world having previously led the formation and operation of Loto Interactive’s major data centre, its cryptocurrency mining.
Earlier this month, 500.com published its unaudited financial results for the fourth quarter and full-year ended December 31, 2020.
In the posting, the reported net revenues of RMB9m ($1.4m) for Q4 of 2020, a 4.7% increase from 2019’s Q4 of RMB8.6m and a 47.5% quarterly growth compared to Q3 revenues of RMB6.1m.