TechFlow news — On January 4, online game operator The9 Limited announced that it has signed a legally binding cooperation and investment term sheet with Kong Jianping and three other individuals. Under the agreement, The9 will grant shares and warrants to the partners in staged installments in exchange for their cash investments and exclusive assistance in advancing The9’s cryptocurrency-related businesses.
The9 also announced the establishment of its wholly-owned subsidiary NBTC Limited, dedicated to blockchain and digital currency operations. The partners in this collaboration include Kong Jianping, former co-chairman of Canaan Creative; Sun Qifeng, former director of Canaan Creative; as well as Zhang Li and Li Enguang, seasoned professionals in the digital currency sector.
According to the cooperation and investment term sheet, in addition to receiving cash investments, The9 will receive dedicated support from Kong Jianping and other partners to develop cryptocurrency mining-centered operations. The9 plans to build a cluster of cryptocurrency mining machines, aiming to contribute 8–10% of the global Bitcoin network computing power, 10% of Ethereum's computing power, and 10% of Grin's computing power.
In addition to receiving Class A ordinary shares of The9 upon signing, the partners will receive warrants in four tranches, which will become exercisable when The9’s market capitalization reaches $100 million, $300 million, $500 million, and $1 billion respectively. Upon full exercise of all warrants, the investors will hold a total of 216,000,000 Class A ordinary shares of The9 (equivalent to 7,200,000 American Depositary Shares), and The9 will receive aggregate investment proceeds of $34 million. The9 reserves the right to accept cryptocurrency (including Bitcoin) as payment for both the investment funds and warrant exercise prices in the final agreement.
