Benzinga | Sep 21, 2021 08:04AM EDT

Sino-Global Reports Restructuring Of Mining Server Deal With Hebei Yanghuai Technology; Co. Will Switch To Direct Mining

Sino-Global Shipping America, Ltd. (NASDAQ:SINO) ("Sino-Global" or the "Company") today announced it has restructured its March 2, 2021 agreement with Hebei Yanghuai Technology Co., Ltd. ("Yanghuai") to buy 2,783 digital currency mining servers from Yanghuai. The deal was part of Sino-Global's expansion into the cryptocurrency market.

While the original deal was closed following a successful inspection of the digital currency operation servers for uniqueness, health and ownership, a subsequent change in Chinese regulatory policy prevented Yanghuai from operating the servers as needed to meet agreed upon performance targets. As a result, the companies have restructured the original agreement to reduce the purchase price from RMB 30 million to RMB 6 million and to allocate the purchased mining equipment between Sino-Global and Yanghuai. Revenue generated to date by the digital currency mining servers will be recognized by Sino-Global, as per the agreement. Yanghuai has agreed to transport digital currency mining servers representing half of the agreed 50,440 t/s in computing power (or a total of 25,220 t/s in computing power), to Sino-Global's office in Ningbo, China. The equipment will then be transported to Sino-Global in the U.S. The companies will have no further financial or operating obligations to each other after completion of the transfer.

Mr. Lei Cao, Chief Executive Officer of Sino-Global, commented, "We appreciate Yanghuai's efforts to come to a fair resolution of the original agreement given the macro policy change. The restructured agreement will allow us to significantly expand our capacity in the U.S., which we intend to grow further both organically and through additional M&A opportunities if they meet our valuation, performance and location criteria. Separately, we plan to switch to a direct mining business rather than contracting with third parties in order to have greater control over this growth segment and to optimize our gross margin."

All devices have unique QR codes enabling qualified uniqueness acceptance. The agreement stipulates a one-year warranty period covering the operational health and performance of the digital currency operation servers.