500. com reported net revenues for the first quarter of RMB98.8 million ($15.9 million), a 32.4 percent drop from the fourth quarter of 2014 and a 10 percent increase on the first quarter of 2014. In the same filing, the company noted that Man San Law resigned from his position as CEO to be replaced by the company’s president.
The company’s operating loss was RMB53.5 million, compared to an operating profit of RMB19.0 million in the fourth quarter of 2014 and profit of RMB31.7 million in the first quarter of 2014.
Since March 2015, all provincial sports lottery administration centers to which the company provides sports lottery sales services temporarily suspended accepting online purchase orders for lottery products, in response to a government notice to crackdown on unauthorized lottery sales.
“We voluntarily and temporarily suspended our online lottery sales operations in response to the promulgation of the Self-Inspection Notice. Such temporary and voluntary suspension materially and adversely impacted our results of operations and financial conditions of the first quarter of 2015.”
The company said it has been working and will continue to work with the China Sports Lottery Administration Center to develop an online lottery sales management system as part of a pilot program for online lottery sales.
“To the best of the Company’s knowledge, the approval by the Ministry of Finance for the Company to provide online lottery sales services on behalf of the China Sports Lottery Administration Center is valid and has not been revoked or amended as of the date of this earnings release,” said chairman Man San Law.
On May 15, 2015, the board of directors appointed Zhengming Pan, the president of the company, to replace Man San Law as chief executive officer. Man will remain chairman of the company.
Also, Qi Li resigned as a director for personal reasons, the company said, and Zhengming Pan was chosen to fill his role.