Animoca Brands signs Earn-In Agreement for majority stake in leading AI accelerator
Highlights:
● Animoca Brands entered into an Earn-In Agreement to acquire a majority stake in Venture Classic Limited, the operational company of Zeroth SPC
● Total consideration is A$1.5 million, comprised of A$1m cash contribution earn-in, and A$0.5m in Animoca Brands shares
● The A$1 million cash contribution will go directly into Zeroth’s operational company as an earn-in, which is expected to cover two years of operating costs
● Upon completion of this transaction, Animoca Brands will hold 67% of the equity ownership in Venture Classic
● Zeroth is Asia’s first artificial intelligence ("AI") accelerator, having accelerated 33 startups, and also has investments in eight blockchain-related companies
● Venture Classic is revenue-generating, and has collected about A$0.46 million in management fees in the first half of 2018; it is entitled to 30% carried interest from any capital gains realized from Zeroth’s portfolio
● Animoca Brands is already an investor in Zeroth SPC (see ASX announcement of 18 December 2017)
● The Company’s fitness & AI subsidiary OliveX is a graduate of the Zeroth acceleration programme, and subsequently received a A$0.77m government grant
● Animoca Brands will leverage its partners to underwrite up to US$2 million in cash contribution to Zeroth SPC, which will grant entitlement to claims on proceeds from the startups accelerated by Zeroth ● The strategic investment in Zeroth’s operational company will increase Animoca Brands’ access and equity exposure to industry-leading AI and blockchain startups and their talent and technology
●Sun Hung Kai & Co Limited, a shareholder of the Company, entered into an MOU to develop a deeper strategic partnership with Zeroth SPC, which may include direct investments and further potential investment into either Zeroth SPC or its segregated portfolios
AB1 Price at posting:
9.4¢ Sentiment: Buy Disclosure: Held
