{"id":430926,"date":"2021-02-08T15:58:31","date_gmt":"2021-02-08T20:58:31","guid":{"rendered":"http:\/\/www.marketnewsdesk.com\/?p=430926"},"modified":"2021-02-08T15:58:31","modified_gmt":"2021-02-08T20:58:31","slug":"500-com-limited-announces-unaudited-financial-results-for-the-fourth-quarter-and-full-year-ended-december-31-2020","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/500-com-limited-announces-unaudited-financial-results-for-the-fourth-quarter-and-full-year-ended-december-31-2020\/","title":{"rendered":"500.com Limited Announces Unaudited Financial Results For the Fourth Quarter and Full Year ended December 31, 2020"},"content":{"rendered":"
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PR Newswire<\/p>\n<\/p><\/div>\n

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\n SHENZHEN, China<\/span>, Feb. 8, 2021<\/span> \/PRNewswire\/ — 500.com Limited (NYSE: WBAI) (“500.com,” “the Company,” “we,” “us,” “our company,” or “our”), an online sports lottery service provider in China<\/span>, today reported its unaudited financial results for the fourth\u00a0quarter and full year ended December 31, 2020<\/span>.<\/p>\n

\n Announcement of Private Placement, Appointment of New Officers and Exploration of Business Opportunities in the Blockchain and Cryptocurrency Industries<\/b>\n <\/p>\n

On December 21, 2020<\/span>, the Company announced that\u00a0it had entered into a definitive share subscription agreement (the “Agreement”) with Good Luck Information Technology Co., Limited (“Good Luck Information”), a company incorporated in Hong Kong<\/span>, for the issuance and sale of newly issued Class A ordinary shares of the Company (“Class A Shares”).<\/p>\n

Pursuant to the Agreement, Good Luck Information will purchase 85,572,963 newly issued Class A Shares for a total purchase price of approximately US$23 million<\/span>, of which 50% of the subscription price, or approximately US$11.5 million<\/span>, shall be settled by U.S. dollars, with the remaining 50% of the subscription price, or approximately US$11.5 million<\/span>, being settled by Bitcoin.\u00a0<\/p>\n

Good Luck Information has agreed to subject all the shares it or its affiliate will acquire in the transaction to a contractual lock-up restriction for 180 days after the closing. The closing is expected to take place on or before February 20, 2021<\/span>, upon satisfaction of customary closing conditions.<\/p>\n

Good luck Information is controlled by Mr. Man San Vincent Law<\/span>, a founder of the Company, who currently holds less than 5% of the Company’s outstanding share capital. Upon closing, Good Luck Information will hold 16.6% of the Company’s issued and outstanding ordinary shares.<\/p>\n

The Company’s Board of Directors (the “Board”) has proposed that the Company explore business opportunities in the blockchain and cryptocurrency industries based on some success experience of its associate, Loto Interactive Limited. The Board appointed Mr. Xianfeng Yang<\/span> as the Chief Executive Officer of the Company,\u00a0and Mr. Bo Yu<\/span> as the Chief Operating Officer of the Company, both effective December 21, 2020<\/span>. <\/p>\n

The Company has entered into a definitive purchase agreement with certain non-U.S. persons (the “Sellers”) pursuant to which the Company expects to issue approximately US$14.4 million<\/span> worth of its Class A Shares as consideration to acquire bitcoin mining machines owned by the Sellers.<\/p>\n

The Company has further entered into a definitive purchase agreement (the “Purchase Agreement”) for 5,900 bitcoin mining machines for a total consideration of approximately RMB55.2 million<\/span> (approximately US$8.5 million<\/span>). All of the bitcoin mining machines are expected to be delivered in the second quarter of 2021. Concurrently with the Purchase Agreement, the Company has entered into a framework agreement (the “Framework Agreement”), pursuant to which the Company has agreed in principle to purchase up to 10,000 bitcoin mining machines in 2021, subject to availability and certain other conditions. The Company is required to pay a performance bond of RMB2,000<\/span> per machine for the first 5,000 machines, or RMB10 million<\/span> (approximately US$1.5 million<\/span>) in aggregate. Assuming full delivery of the 15,900 bitcoin mining machines, the Company’s total hash rate will be increased by approximately 1,000 petahashes per second (PH\/S).<\/p>\n

\n Subscribe for Shares of Loto Interactive Limited<\/b>\n <\/p>\n

The Company has entered into a share subscription agreement, pursuant to which it has conditionally agreed to subscribe for 169,354,839 shares of Loto Interactive Limited (HKEX: 08198) (“Loto Interactive”) at a price of HK$0.62<\/span> per share for a total consideration of approximately HK$105 million<\/span> (approximately US$13.5 million<\/span>) in cash (the “Share Subscription”).\u00a0The Company currently owns approximately 33.7% of the issued share capital of Loto Interactive. Upon completion of the Share Subscription, the Company expects to own approximately 54.2% of the issued share capital of Loto Interactive, and Loto Interactive is expected to become a subsidiary of the Company.<\/p>\n

\n Annual Report on Form 20-F for the Fiscal Year ended December 31, 2019<\/span><\/b>\n <\/p>\n

The Company filed a Current Report on Form 6-K, or the COVID-19 Relief 6-K, in compliance with and reliance upon the SEC’s Order under Section 36 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, granting Exemptions from Specified Provisions of the Exchange Act and certain Rules thereunder (Release No. 34-88318), dated March 4, 2020<\/span>, or the Relief Order. The Company relied on the Relief Order to delay the filing of its Annual Report on Form 20-F for the fiscal year ended December 31, 2019<\/span>, or the 2019 Annual Report, due to circumstances related to COVID-19. Absent the Relief Order, the 2019 Annual Report was due to be filed by April 30, 2020<\/span>.<\/p>\n

The Company was unable to file the 2019 Annual Report on a timely basis as a result of, among other things, travel restrictions, quarantines and staffing issues due to circumstances related to COVID-19. The Company’s headquarters and operations are located in Shenzhen, China<\/span>. Following the outbreak of COVID-19, the PRC government introduced temporary travel restrictions and mandatory quarantines aimed at preventing the spread of COVID-19 within China<\/span>. While some of these restrictions and quarantines were relaxed in certain areas, the Company took pro-active measures to help protect its employees by implementing self-quarantine measures of at least 14 days for employees that traveled from other regions within China<\/span> before they were allowed to report to the Company’s offices. As of April 29, 2020<\/span>, the date of the COVID-19 Relief 6-K, Friedman LLP, the Company’s former independent registered public accounting firm, had not completed its audit of the Company’s financial statements and audit of the Company’s internal control over financial reporting as of December 31, 2019<\/span>, due to the impact of COVID-19, and the previously reported internal investigation being conducted by King & Wood Mallesons LLP was still in progress. As a result of the foregoing, the Company was unable to timely file its 2019 Annual Report by April 30, 2020<\/span>. The Company supplemented its 2019 Annual Report with an additional risk factor relating to COVID-19. See “Item 3. Key Information\u2014D. Risk Factors\u2014Risks Related to Our Business and Industry\u2014The ongoing COVID-19 pandemic could materially and adversely affect our business, results of operations and financial condition” in the 2019 Annual Report.<\/p>\n

The Company filed a Form 12b-25 with the SEC on June 15, 2020<\/span> for late filing of its 2019 Annual Report. Absent the Form 12b-25, the 2019 Annual Report was due to be filed by June 15, 2020<\/span>, pursuant to the COVID-19 Relief 6-K dated April 29, 2020<\/span>. As of June 15, 2020<\/span>, the date of the Form 12b-25 filing, the internal investigation being conducted by King & Wood Mallesons LLP was still in progress. Accordingly, the Company was then unable to conclude what impact it may have on the Company’s financial statements and internal control over financial reporting. In addition, Friedman LLP, the Company’s former independent registered public accounting firm, had not completed its audit of the Company’s financial statements and audit of the Company’s internal control over financial reporting as of December 31, 2019<\/span>, due to the impact of COVID-19 and because the abovementioned internal investigation was still in progress.<\/p>\n

As of July 1, 2020<\/span>, the Company was delinquent in filing its 2019 Annual Report with the SEC. Pursuant to the Form 12b-25 filing dated June 15, 2020<\/span>, the 2019 Annual Report was due to be filed by June 30, 2020<\/span>. On July 1, 2020<\/span>, the Company received an expected notice from New York Stock Exchange (“NYSE”) Regulation stating that the Company is not in compliance with the NYSE’s continued listing requirements under the timely filing criteria pursuant to Section 802.01E of the NYSE Listed Company Manual as a result of the Company’s failure to timely file the 2019 Annual Report with the SEC. As required by the notice, (a) a representative of the Company contacted the NYSE on July 1, 2020<\/span> to discuss the status of the 2019 Annual Report, and (b) the Company issued a press release dated July 7, 2020<\/span>, disclosing the status of the 2019 Annual Report, noting the delay and the reason for the delay, as mentioned above. The anticipated filing date of the 2019 Annual Report was not then known. NYSE Regulation notified the Company that the NYSE would closely monitor the status of the Company’s late filing and related public disclosures for up to a six-month period from the due date of the 2019 Annual Report, or December 31, 2020<\/span>, and that the Company would need to timely file its 2019 Annual Report and any subsequent delayed filings by December 31, 2020<\/span>.<\/p>\n

On September 23, 2020<\/span>, Friedman LLP resigned as the Company’s auditor. The Company appointed MaloneBailey, LLP on September 27, 2020<\/span> to conduct an audit of the Company’s consolidated financial statements for the fiscal year ended December 31, 2019<\/span> and effectiveness of its internal control as of December 31, 2019<\/span>, and to re-audit the Company’s consolidated financial statements for each of the fiscal years ended December 31, 2017<\/span> and 2018. The Company announced the resignation of Friedman LLP and the appointment of MaloneBailey, LLP in a press release dated September 28, 2020<\/span>. See “Item 16F. Change in Registrant’s Certifying Accountant” in the 2019 Annual Report.<\/p>\n

On October 7, 2020<\/span>, the Company announced that the SIC of the Company’s Board completed its internal investigation. King & Wood Mallesons LLP presented its investigation review to SIC on October 7, 2020<\/span>. Based on the findings and analyses in the review by King & Wood Mallesons LLP, the SIC concluded that it did not find a sufficient basis to establish a violation of the U.S. Foreign Corrupt Practices Act of 1977 in connection with the Company’s prior activities in Japan<\/span>. The SIC also reviewed the Company’s compliance policies, procedures and internal controls in light of the suggestions from King & Wood Mallesons LLP. The Company updated such policies, procedures and internal controls based on recommendations from the SIC, and will continue to enhance its internal controls as appropriate.<\/p>\n

Once the abovementioned internal investigation was completed, the Company’s financial statements for the fiscal year ended December 31, 2019<\/span> were finalized, the re-audit of the Company’s consolidated financial statements for each of the fiscal years ended December 31, 2017<\/span> and 2018 was completed, and both the Company and MaloneBailey, LLP completed their assessment of the Company’s internal control over financial reporting as of December 31, 2019<\/span>, the Company successfully filed its 2019 Annual Report on December 11, 2020<\/span>.<\/p>\n

\n Fourth<\/b>
\n \u00a0Quarter <\/b>
\n 2020<\/b>
\n \u00a0Highlights<\/b>\n <\/p>\n