Future Fintech Announces Framework Agreement to Acquire Bitcoin Mining Farm
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.”