SCHEDULE: NIP Group Amends Mining Asset Acquisition Deal

NIP Group Inc. amended its asset-purchase agreement to acquire 8.19 EH/s of mining capacity, issuing 167.9 million Class A shares and convertible notes.

Summary

• Apex Cyber Capital Limited beneficially owns 61,587,787 Class A Ordinary Shares of NIP Group Inc., representing 16.9% of the class.
• This percentage is calculated based on a total of 365,280,890 Class A Ordinary Shares issued and outstanding.
• The voting power beneficially owned by Apex Cyber Capital Limited represents 5.5% of the total outstanding voting power, considering Class A, B1, and B2 shares.
• NIP Group Inc. entered into an amendment to an asset-purchase agreement (Second Tranche Agreement) to acquire mining infrastructure and computational capacity with a combined hash rate of approximately 8.19 EH/s.
• The original agreement, dated November 3, 2025, involved issuing an aggregate of up to 314,515,762 Class A ordinary shares as consideration.
• On January 9, 2026, NIP Group Inc. issued 167,917,734 Class A ordinary shares to sellers as part of the initial closing of the transaction.
• Upon subsequent closing, NIP Group Inc. will issue unlisted interest-free convertible notes, convertible into up to 146,598,028 Class A ordinary shares at an initial conversion price of US$0.2082617 per share.
• The closing with respect to computational capacity and mining infrastructure may now take place separately.
• The 'Long Stop Date' for the agreement has been changed to March 31, 2026.
• A specific transaction involves Mining Ninjas Kazakh Limited purchasing 15,628 HASH Super Computing Servers from Armada Technologies Kazakhstan Limited for KZT1,715,959,858 (exclusive of 12% value-added tax), with the claim for this payment (KZ Payable) being assigned to Prosperity Oak Holdings Limited, and subsequently to NIP Group Inc. in exchange for a convertible note.

Sentiment

Score: 6

Explanation: The filing details a significant asset acquisition for NIP Group Inc., which is generally positive for growth. However, the substantial share dilution and the use of unfinalized convertible notes introduce some uncertainty and potential negative impact on existing shareholders. The extension of the long stop date also suggests some delays.

Positives

• NIP Group Inc. is expanding its mining infrastructure and computational capacity by approximately 8.19 EH/s, indicating growth in its core business.
• The flexibility to close the acquisition of computational capacity and mining infrastructure separately could streamline the process.
• The issuance of convertible notes for part of the consideration defers immediate cash outflow for NIP Group.

Negatives

• Significant dilution for existing Class A shareholders due to the issuance of 167,917,734 Class A ordinary shares and potential future issuance of up to 146,598,028 Class A ordinary shares from convertible notes.
• Apex Cyber Capital Limited's voting power decreased to 5.5% of total outstanding voting power, despite an increase in Class A shares held, due to the overall increase in outstanding shares and the higher voting power of Class B shares.
• The convertible notes are 'unlisted interest-free,' which might be less attractive to investors than interest-bearing notes.

Risks

• The convertible notes are not yet substantially finalized, introducing uncertainty regarding their final terms and conditions.
• The issuance of additional Class A Ordinary Shares upon conversion of notes could further dilute existing shareholders.
• NIP Group Inc. covenants not to take actions that would impair the economic benefits of noteholders or reduce the conversion price below prescribed levels, which could limit future financial flexibility.
• If the number of authorized but unissued Class A Ordinary Shares is insufficient for conversion, NIP Group Inc. will need shareholder approval for additional shares, which could introduce delays or uncertainty.
• The Kazakhstan transaction involves a condition precedent for the KZ Note issuance within 45 days; failure to meet this could unwind the transaction.

Future Outlook

NIP Group Inc. plans to complete the acquisition of mining infrastructure and computational capacity, with the possibility of separate closings for different components. The company will issue additional Class A ordinary shares upon the conversion of unlisted interest-free convertible notes in the future. The 'Long Stop Date' for the transaction has been extended to March 31, 2026.

Management Comments

• The Notes (when issued) shall constitute direct, unconditional and unsubordinated obligations of the Purchaser and will at all times rank pari passu and without any preference or priority among themselves and at least equally with all other present and future direct, unconditional and unsubordinated obligations of the Purchaser other than those preferred by Applicable Laws and except as expressly set forth in this Agreement and the other Transaction Documents.
• The issue of the Consideration Shares shall not be subject to any pre-emptive or similar rights.
• From and after the date hereof and until the Closing, except as expressly set forth in this Agreement and the other Transaction Documents, neither the Purchaser nor any person acting on its behalf will take, directly or indirectly, any action that is designed to cause or result in an adjustment of the initial Conversion Price of the Notes that will impair the economic benefits of the holder of the Notes; and the Purchaser will not take any action that would reduce the Conversion Price of the Notes below a level that may be prescribed by Applicable Laws from time to time (if any).
• If at any time the number of authorized but unissued Class A Ordinary Shares shall not be sufficient to effect the issue of the Consideration Shares in full, the Purchaser will take such corporate actions as may be necessary to seek further approval from its shareholders to authorize the board of directors of the Purchaser to allot, issue and deal with additional Class A Ordinary Shares to such number of Class A Ordinary Shares as shall be sufficient for such purpose.

Industry Context

This transaction reflects the ongoing expansion and consolidation within the cryptocurrency mining industry, where companies are acquiring significant computational capacity (hash rate) to increase their share of block rewards. The use of share-based consideration and convertible notes is a common financing strategy in this capital-intensive sector, allowing for growth while managing immediate cash outlays.

Corporate Governance

Related Party Transactions

• Apex Cyber Capital Limited, the reporting person, is indirectly controlled by Mr. Kee Wee Kiang, Kenneth, Ms. FANG Wenwen, and Ms. SHEN Yue Lei, each holding one-third of its shares. Mr. Kee Wee Kiang, Kenneth is also a director of Apex Cyber Capital Limited.
• Prosperity Oak Holdings Limited is a party to the Second Tranche Agreement and is involved in the Kazakhstan transaction, where it will assign claims to NIP Group Inc. in exchange for a convertible note.

Stakeholder Impact

• Shareholders: Significant dilution for existing Class A shareholders due to the issuance of new shares and potential future conversions. Voting power of some shareholders (like Apex Cyber Capital Limited) may decrease proportionally.
• Noteholders (future): Will receive unlisted interest-free convertible notes, which will convert into Class A shares, providing them with equity ownership.
• Sellers of Assets: Receive Class A ordinary shares and convertible notes as consideration for their mining infrastructure and computational capacity.

Next Steps

• Subsequent closing of the Transaction, involving the issuance of unlisted interest-free convertible notes.
• Finalization of the terms and conditions for the unlisted interest-free convertible notes.
• Potential corporate actions by NIP Group Inc. to seek shareholder approval for additional Class A Ordinary Shares if needed for note conversion.
• Completion of the Kazakhstan transaction, including the issuance of the KZ Note within 45 days.

Key Dates

Recommendation

The acquisition of substantial mining assets (8.19 EH/s) is a strategic positive for NIP Group Inc., indicating growth in its core business. However, the significant dilution from current and future share issuances, coupled with the use of unfinalized convertible notes and an extended long stop date, introduces considerable uncertainty and potential downward pressure on per-share value. Investors should hold to monitor the integration of acquired assets, the final terms of the convertible notes, and the impact of dilution on future earnings per share before making further investment decisions.

Keywords

NIP Group Inc., Apex Cyber Capital, Schedule 13D, SEC filing, Class A Ordinary Shares, beneficial ownership, asset-purchase agreement, mining infrastructure, computational capacity, hash rate, convertible notes, dilution, corporate governance, crypto mining, Kazakhstan transaction