NEW YORK, March 2, 2021 /PRNewswire/ -- Code Chain New Continent Limited (the "Company" or "Code Chain") (NASDAQ: CCNC), a leading eco-technology company, announced today the execution of a Letter of Intent ("LOI") to acquire 61% of Xiaojin Langlang Technology Co., Ltd. ("Xiaojin Langlang"). Founded in March 2020, Xiaojin Langlang is a leading cryptocurrency mining center in China. They engage in internet information management, big data resource services, server hosting, mechanical equipment leasing, computer and communication equipment operation, value-added telecommunications services, software and information technology, information System operation and maintenance, and socio-economic consulting, excluding investment and financing consulting services.
Under the terms of the LOI, the total consideration for 61% of Xiaojin Langlang's equity interest is expected to be RMB 36 million (approximately USD 5.6 million), subject to completion of a third-party valuation. Of this amount, 50% shall be paid in cash, and 50% shall be paid in the Company's shares of common stock. Code Chain is required to pay $500,000 within 7 business days from the signing date of the LOI, which will be applied to the final purchase price upon entry in to the material definitive purchase agreement.
The Company will award additional shares of common stock annually to Xiaojin Langlang based on the post-investment financial performance. The details are as follows:
i. If Xiaojin Langlang achieves a net income of RMB 40 million (approximately USD 6.2 million) or more in 2021 (the "2021 Net Income Goal"), the Company shall issue 300,000 shares of common stock to Xiaojin Langlang;
ii. If Xiaojin Langlang achieves a net income of RMB 60 million (approximately USD 9.3 million) or more in 2022 (the "2022 Net Income Goal"), the Company shall issue 300,000 shares of common stock to Xiaojin Langlang;
iii. If Xiaojin Langlang achieves a net income of RMB 70 million (approximately USD 10.8 million) or more in 2023 (the "2023 Net Income Goal"), the Company shall issue 400,000 shares of common stock to Xiaojin Langlang.
With RMB 50 million invested into it, the data center covers 7,000 square meters and has 62,000 kWH capacity. This capacity allows the center to accommodate more than 20,000 mining machines. The center is dedicated in providing system hosting services for cryptocurrency mining including computer rooms, power facilities, broadband networks, security monitoring, heat dissipation and cooling, daily management, and related technical support.
Mr. David (Weidong) Feng, Co-CEO of the Company, commented, "We are excited to announce the proposed acquisition of Xiaojin Langlang. Cryptocurrency mining has gone through rapid evolution with scalability and infrastructure. With Xiaojin Langlang's platform, the acquisition enables us to accelerate our move into crypto mining. We believe our combined efforts will bring growth opportunities and create long-term value for our respective."
The transaction remains subject to completion of due diligence reviews, customary definitive documentation and final approval by the board of both Code Chain and Xiaojin Langlang Financial Leasing. As a result, there is no assurance that the transaction will be consummated.
About Code Chain New Continent Limited
Founded in 2009, Code Chain New Continent Limited engages in the research, development, and sale of solid waste recycling systems for the mining and industrial sectors, the wholesale and sale of fuel materials, harbor cargo handling services and production and sales of coating materials in the PRC. It provides end-users in these markets with a clean alternative to traditional waste disposal by significantly reducing solid waste discharge into the environment and enabling such users to extract value from valuable metals and other industrial waste materials. Upon completion of Sichuan Wuge Network Games Co., Ltd. ("Wuge"), the Company has also diversified its business. Wuge was established in 2019 and is still in this early developing stage. Wuge produced electronic tokens that combine the five-W elements (when, where, who, why, what), geographic location via the Beidou satellite system and identity information using Code Chain technology. The electronic tokens are unique, tradable, and inheritable digital assets and cannot be tampered. The electronic tokens are based on and stored in the Code Chain system and can be used to monitor and document all kinds of consumer behaviors that involve code-scanning.
Safe Harbor Statements
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SOURCE Code Chain New Continent Limited