SCHEDULE 13D: Ulife Media and Chi Hang Mok Acquire Controlling 67.8% Stake in Color Star Technology Through $35 Million Crypto Hardware Deal

Ulife Media and Production International Limited and Chi Hang Mok have acquired a 67.793% beneficial ownership stake in Color Star Technology Co., Ltd. through a $35 million transaction involving the sale of cryptocurrency mining hardware.

Summary

• Ulife Media and Production International Limited and Chi Hang Mok (the "Reporting Persons") have acquired 16,250,000 Class A Ordinary Shares of Color Star Technology Co., Ltd.
• This acquisition represents 67.793% of the Issuer's total voting power based on shares outstanding as of the filing date.
• The shares were acquired as part of a Purchase and Sale Agreement dated February 26, 2025, between BTC KZ (the sole shareholder of Ulife) and Model Queen Limited (a wholly-owned subsidiary of Color Star Technology Co., Ltd.).
• Under the agreement, BTC KZ sold cryptocurrency mining hardware and other equipment to Model Queen Limited for a total consideration of $35,000,000.
• The consideration was paid with $9,000,000 in cash and $26,000,000 in 16,250,000 restricted Class A ordinary shares of Color Star Technology Co., Ltd. (Nasdaq: ADD).
• The implied price per share for the stock consideration is approximately $1.60 ($26,000,000 / 16,250,000 shares).
• The Reporting Persons acquired the shares for investment purposes, believing them to be an attractive investment opportunity.
• Color Star Technology Co., Ltd. is obligated to consent to removing the restrictive legends on the Share Consideration by registering them on a resale registration statement on Form F-3 as soon as possible.

Sentiment

Score: 7

Explanation: The acquisition of a controlling stake by a new investor group, coupled with the strategic acquisition of cryptocurrency mining hardware, suggests a potentially positive shift or expansion for the company. While the use of shares as consideration and exposure to crypto assets introduce some risks, the overall tone is one of strategic investment and future potential discussions.

Positives

• A significant strategic investment by Ulife Media and Chi Hang Mok, indicating confidence in Color Star Technology Co., Ltd. and its future prospects.
• The acquisition of cryptocurrency mining hardware by Color Star Technology Co., Ltd. could expand its operational capabilities and diversify its business into the digital asset sector.
• The Reporting Persons' stated intent to engage in discussions regarding strategic alternatives, business, operations, and governance could lead to positive changes and enhanced shareholder value.

Negatives

• The issuance of a large block of 16,250,000 restricted Class A Ordinary Shares as part of the consideration could lead to potential future dilution for existing shareholders once the shares become freely tradable.
• The acquisition of cryptocurrency mining hardware exposes Color Star Technology Co., Ltd. to the inherent volatility and risks associated with the cryptocurrency market, including price fluctuations and regulatory changes.

Risks

• The investment is subject to market risks, pricing principles, and market fluctuations of the acquired cryptocurrency mining hardware.
• There is no assurance as to the outcome of potential discussions between the Reporting Persons and the Issuer concerning strategic alternatives, business, operations, assets, capitalization, financial condition, governance, management, and future plans.
• The Reporting Persons may, in the future, acquire or dispose of additional securities of the Issuer, enter into financial instruments, or engage in hedging transactions, which could impact the Issuer's stock price.
• The Issuer's financial position, strategic direction, actions taken by its board of directors, price levels of its securities, other investment opportunities, and general economic and industry conditions could influence the Reporting Persons' future investment decisions.

Future Outlook

The Reporting Persons intend to continuously review their investment in Color Star Technology Co., Ltd. They may engage in discussions with the Issuer, other shareholders, and third parties regarding strategic alternatives, the Issuer's business, operations, assets, capitalization, financial condition, governance, management, and future plans. Color Star Technology Co., Ltd. is expected to file a Form F-3 registration statement to allow for the resale of the 16,250,000 restricted Class A ordinary shares.

Management Comments

• "The Reporting Persons acquired the shares for investment purposes in the belief that the shares represent an attractive investment opportunity."
• "Representatives of the Reporting Persons may have discussions from time to time with the Issuer, other shareholders and third parties relating to the Issuer, strategic alternatives that may be available to the Issuer and the Issuer's business, operations, assets, capitalization, financial condition, governance, management and future plans."
• "There can be no assurance as to the outcome of any of the discussions referred to in this Schedule 13D."

Industry Context

This transaction highlights the increasing convergence of traditional public companies with the digital asset and cryptocurrency sectors. Color Star Technology Co., Ltd.'s acquisition of cryptocurrency mining hardware, paid for significantly with its own shares, indicates a strategic move into or expansion within the digital economy. The involvement of a major shareholder like Ulife Media and Chi Hang Mok, who now hold a controlling stake, suggests a potential shift in the company's strategic direction, possibly towards leveraging digital assets or related technologies. This aligns with a broader trend of companies exploring new revenue streams and asset classes beyond their traditional core businesses, often through M&A or strategic partnerships.

Comparison to Industry Standards

• The acquisition of a controlling stake (67.793%) by an investor group is a significant event, often seen in private equity buyouts or strategic investments aimed at taking control and implementing new strategies. For a publicly traded company, this level of ownership by a single group is substantial and implies a strong influence over corporate decisions.
• The use of company shares as a significant portion of the consideration ($26 million out of $35 million total) for an asset purchase (cryptocurrency mining hardware) is a common practice in M&A, especially when cash reserves are conserved or when the seller is willing to take an equity stake in the acquiring entity. This is similar to stock-for-stock mergers or asset purchases where equity is used as currency.
• The implied share price of $1.60 per share for the transaction provides a valuation benchmark for the shares involved in this specific deal, which can be compared to the prevailing market price of Color Star Technology Co., Ltd. shares (if available) to assess the premium or discount at which this large block of shares was effectively traded. Without the current market price, a direct comparison to specific comparable companies or projects is difficult, but the structure of the deal is standard for such transactions.

Management Changes

Legal Proceedings

• None of the Reporting Persons have been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) in the past five years.
• None of the Reporting Persons have been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction resulting in a judgment, decree, or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal and state securities laws or findings of any violation with respect to such laws in the past five years.

Related Party Transactions

• A Purchase and Sale Agreement dated February 26, 2025, was entered into between BTC KZ (the sole shareholder of Ulife Media and Production International Limited, one of the Reporting Persons) and Model Queen Limited (a wholly-owned subsidiary of Color Star Technology Co., Ltd., the Issuer).
• Under this agreement, Model Queen Limited purchased cryptocurrency mining hardware and other equipment from BTC KZ for a total consideration of $35,000,000.
• $26,000,000 of this consideration was paid through the issuance of 16,250,000 Class A Ordinary Shares of Color Star Technology Co., Ltd. to BTC KZ, which then transferred beneficial ownership to Ulife and Chi Hang Mok.

Stakeholder Impact

• Shareholders: Existing shareholders will experience a significant shift in ownership structure, with Ulife Media and Chi Hang Mok now holding a controlling stake, potentially influencing future strategic decisions and corporate direction. The issuance of new shares for the transaction could lead to dilution for existing shareholders, although this is an asset acquisition rather than a direct capital raise.
• Management/Employees: The new controlling shareholder may initiate discussions regarding management, operations, and future plans, which could lead to changes in strategy or personnel.
• Creditors: The transaction involves an asset acquisition and share issuance, which could impact the company's balance sheet and financial health, potentially affecting creditors' risk assessment.

Next Steps

• The Reporting Persons intend to review their investment in the Issuer on a continuing basis.
• Representatives of the Reporting Persons may have discussions with the Issuer, other shareholders, and third parties regarding strategic alternatives, business, operations, assets, capitalization, financial condition, governance, management, and future plans.
• Color Star Technology Co., Ltd. (ADD) shall consent to removing the restrictive legends on the Share Consideration by registering the shares on a resale registration statement on Form F-3 as soon as possible.

Key Dates

Keywords

Color Star Technology Co., Ltd., Schedule 13D, Beneficial Ownership, Ulife Media and Production International Limited, Chi Hang Mok, Cryptocurrency Mining Hardware, Strategic Investment, Share Acquisition, SEC Filing, Corporate Governance, Related Party Transaction, Restricted Shares, Model Queen Limited, BTC KZ