Change Financial Limited (ASX: CCA), a company from software and services sector which is into the business of developing a digital banking platform for peer-to-peer transfers and other day-to-day banking tools announced that it was successful in monetizing its investment in the Ivy Project for US$1.5 million.
For arranging the funds worth US$1.5 million, the company has agreed to sell 33% of an equity stake to an American based company, Bazda LLC.
The company will be receiving a distribution of capital from Ivy Koin LLC. Ivy Koin LLC forms a non-core business of CCA, and it had plans to divest the project to concentrate into the build-out of its enterprise banking solution and payments processor.
In October 2017, CCA provided Ivy Project a seed capital for a 33% equity interest into the blockchain project. As an initial investment, the company received 130,000,000 Ivy tokens which it will hold as a part of the sales transaction.
Through the divestment of the Ivy Project along with the capital distribution represents its significant return on investment.
The funds generated will now be used in the development of its enterprise solutions and payments processor business.
The sale of the Ivy Project depends on specific terms and conditions which are likely for this size and nature of the transaction. The company expects to receive the amount from the deal by the second half of the financial year 2019.
Also, the company announced a pause in the trading post this announcement till further notification.
The official listing date of listing of CCA on ASX is 30 June 2016 where the performance of the company was consistently negative. Its last one-year performance of the company was -93.26%.
For the financial year 2018, which ended on 30 June 2018, CCA incurred a loss of US$9,047,969 due to its high expenses in the form of advertisement and marketing, employee benefits and program expenses.
The balance sheet of CCA looks healthy with a net asset base of US$2,296,690 and a debt to equity ratio of 0.30 which indicates the sound economic health of the company. It suggests that CCA is capable of meeting its long-term obligations. As its debt to equity ratio is low demonstrates that during the period the company has used its resources in case of any financial requirement. CCA holds a total current asset of CCA is US$1,845,474 and a total current liabilities of $691,993 which indicates that the company is in a position to handle the working capital needs and its short-term obligations efficiently.
However, as a result of the weak operating performance of the company, FY2018 reports an increase in the accumulated losses. There was a decrease in the net cash and cash equivalent by almost 392%. By the end of the financial year 2018, CCA had net cash and cash equivalent of $1,665,967.
Today, there is a pause in the trading of CCA securities on ASX. The shares traded last on 10 Jan 2019 at $0.058 with the stock holding a market capitalization of A$4.97 million.
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