Corporate Update: acquisitions of Helix Accelerator and Sanrio Digital; Q1 capital raise
13 May 2021 -- HONG KONG -- Animoca Brands Corporation Limited (“Animoca Brands" or the “Company”) wishes to update shareholders about developments taking place in the first quarter of the year, prior to the capital raise also announced today at a price per share of A$1.10 (see announcement). These previous developments include the completion of a round of funding for US$12.4 million in Q1; the completed acquisition of Helix Accelerator Limited; and the acquisition of Sanrio Digital (HK) Limited.
Disclosure of previous capital raise in Q1 2021
In the first quarter of 2021, Animoca Brands secured a total of US$12.4 million (approximately A$16 million) in funding via a convertible loan facility and subscription agreements with institutional and sophisticated professional investors.
A Convertible Loan Agreement with True Global Ventures 4 Plus Fund PTE. LTD. (“TGV”) resulted in the drawdown of US$3 million (approximately A$3.9 million) at an interest rate of 7.5% per annum with the amount drawn down repayable by the issue of 11.1 million ordinary shares of Animoca Brands priced at A$0.35 per share or by way of cash at the election of True Global Ventures.
The Company also entered into Subscription Agreements with Adit Ventures, Kingsway Capital, EVG Holdings and other sophisticated and professional investors to place 34.8 million new ordinary fully paid shares of Animoca Brands at a subscription price of A$0.35 per share with the amount raised being US$9.4 million (approximately A$12.1 million).
Subsequent to the Q1 capital raise detailed above, the Company has today announced the closing of a fundraising round conducted at A$1.10 per share (for details, please refer to the announcement Animoca Brands raises US$88,888,888 based on valuation of US$1 billion).
Acquisition of Helix Accelerator in Q1 2021
Earlier in the year, Animoca Brands Limited, a wholly owned subsidiary of Animoca Brands Corporation Limited, completed the acquisition of 60% of the issued capital in Helix Accelerator Limited (“Helix Accelerator”), including Helix Accelerator’s entire 50% share ownership in Helix One Limited (“Helix One”), from Mind Fund Group Limited (“Mind Fund”), for an upfront consideration of US$2 million payable in approx 7.3 million ordinary shares of Animoca Brands at a price of A$0.35 per share. The acquisition includes 100% of the Helix brand.
Prior to the acquisition, Animoca Brands held 30% of the share ownership in Helix One, and after the acquisition the Company now owns 80% of Helix One.
Helix Accelerator is a collaboration between Mind Fund and Hedera Hashgraph, and the first and only accelerator for developers and entrepreneurs building on the Hedera Hashgraph platform. During its 10-week acceleration programme in 2019, Helix provided financial, intellectual, and network support to founders and their companies, and guided them as they built a new class of decentralized applications on the Hashgraph consensus algorithm used in the Hedera blockchain platform.
Helix One is the fund vehicle established to hold the equity and tokens from all the startups and projects that were incubated in the first cohort of the Helix Accelerator in 2019, including The Sandbox, Tune.fm, Hashing Systems, Otrafy, and Ooniq.
Acquisition of Sanrio Digital
Over the course of 2020, the Company conducted negotiations with Sanrio Digital and, earlier this year, its wholly owned subsidiary Animoca Brands Limited entered into an agreement to acquire 100% of the issued capital in Sanrio Digital (HK) Limited (“Sanrio Digital”) for an upfront consideration of HK$49,428,000 (approximately A$8.3 million) payable in fully paid ordinary shares of Animoca Brands priced at A$0.35 each. The acquisition of Sanrio Digital includes the rights to use Sanrio intellectual property, including world-famous brands such as Hello Kitty®, which was reported to have a brand value worth over US$7 billion (source: The New Economy, 2017).
Sanrio Digital was created to develop Sanrio® intellectual property assets into various digital and online media, leveraging an extensive library of original material that includes world-famous brands such as Hello Kitty®, Badtz-Maru™, Chococat™, My Melody™, Keroppi™, and others. The assets of Sanrio Digital include approximately 40 officially licensed digital products on various platforms including consoles, smartphones, PC, and Web including Sanriotown.com; the license and game assets related to the online multiplayer world Hello Kitty® Online; the animated TV series The Adventures of Hello Kitty & Friends; and various other titles including Hello Kitty: Roller Rescue, Hello Kitty: Birthday Adventures, the Nintendo Wii exclusive title Hello Kitty Seasons, and several others. Sanrio Digital has generated lifetime revenues of approximately US$14.8 million.
Sanrio Digital has a related party ownership with Animoca Brands, wherein Mr Yat Siu, the chairman of Animoca Brands, holds indirect ownership of 33.6% in the sellers, which in turn collectively own 100% of Sanrio Digital. The acquisition by Animoca Brands of Mr Siu’s ownership stake is therefore subject to approval by the shareholders of Animoca Brands; such approval will be sought by the Company at the next Annual General Meeting expected to be held as soon as practicable.
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