Animoca Brands Corporation Limited (ASX: AB1), a company from media and entertainment sector which is into the business of making apps for smartphones and tablets, announced that it had executed a term sheet Exposition Park Holdings SEZC for collaboration and an exchange of value. Exposition Park Holdings SEZC is a company which supervises the Worldwide Asset eXchange (WAX) which is a global e-commerce platform for the trade and exchange of virtual items.
Through WAX blockchain-based tools, anyone can trade digital items instantly and securely. Just as other companies like eBay or Amazon for digital items, WAX also provides similar facilities to trade more than 5 million trades in a day.
As per the term sheet, both the partners WAX Blockchain and Animoca Brands agrees to progress the trading of the virtual items using Non-Fungible Tokens (NFTs).
On the other hand, AB1 will be introducing its successful game franchise “The Sandbox” to the WAX platform. The Sandbox is the world’s first decentralized community driven game platform with 1.2 million active monthly users. The NFTs generated by the players in the ‘The Sandbox blockchain game’ will now be bought, traded and sold through the WAX platform, giving WAX additional visibility and liquidity to the creators of the WAX platform.
The company is optimistic that trading of digital assets on WAX will enhance customers loyalty for ‘the Sandbox.’ It will also create incentives and encourage the company to generate more content. Through the WAX platform, the company will be collecting its share of revenue related to its asset “The Sandbox.”.
As per the agreement, both the partners WAX and AB1 will be exchanging a mutual exchange value of US$250,000, where AB1 will be exchanging its common stock equivalent value of WAX tokens.
The official listing of AB1 on ASX is 30 April 2007 where the overall performance of the company remains negative since its inception. However, in the previous five years, the performance of AB1 was 136.09%. Its last one-year performance was 227.59%.
For the half-yearly results of FY2018, ending on 30 June 2018, ABI made a profit of $1,029,969. The balance sheet of AB1 shows that the company has a net asset of $5,345,743 which means that the company can manage its long-term obligations. However, its debt-equity ratio is 1.02 which is optimal. ABI has a total current asset of $7,648,886 and a total current liabilities of $5,473,997 which indicates that the company is capable of meeting its working capital and short-term debts. As compared to its previous six months results ending on 31 December 2017, the half-year results of FY2018 reports a decrease in the accumulated losses which is an indication of improved operating efficiency. The total shareholder’s equity is worth $5,345,743.
By the end of the period, AB1 has net cash and cash equivalent worth $2,047,846.
Entering into the term sheet will be a win-win situation for both the parties as AB1 can now use the WAX platform to generate revenue through this platform and WAX will have exposure to 1.2 million active users of ‘The Sandbox.’
With this announcement this morning, the share price of AB1 increased by 1.053%. At present, the market price of the share is A$0.096 (AEST: 2:53 pm, 16 January 2019) which is 0.001 points above its previous trading day’s closing price with a market capitalization of A$64.89 million.
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