ASX-listed Change Financial Limited (ASX:CCA) has decided against exercising its option to acquire 100% of Beverly Hills-based blockchain technology company, Ivy Project.
Change Financial currently owns a 33.3% interest in Ivy, the call option – which the company won’t exercise – was for the acquisition of the additional 66.7%.
Executive Chair of Change Financial, Teresa Clarke, said the decision follows the commencement of a strategic review of Change’s business.
“We continue to believe that diversifying our assets to include exposure to blockchain technology is a sound strategic decision in the longer term and we saw Ivy as an excellent opportunity to achieve this aim,” she said in a statement.
“However… In the near-term, Change needs to remain focused on its own existing core business activities.
“The blockchain industry is highly dynamic and Ivy requires a shareholder that can dedicate the substantial resources against the backdrop of a rapidly evolving environment.
In July 2018, Change Financial paid US$250,000 to enter into the call option.
The option afforded the company the right to acquire the remaining Ivy equity for US$8m in CCA shares based on a price per share of A$0.80 and US$1.75m Cash.
In response to Change Financial’s decision, Ivy President Gary Fan said it’s business as usual for his company.
“We continue to build out our blockchain solutions for payments and regulatory needs for banks & financial institutions.
“We maintain a strong relationship with the Change Financial organisation and look forward to working with them in the future should the opportunity arise”
Ivy has developed the IvyKoin token, a cryptocurrency for secure and transparent business payments.
A token generation event, that closed in February, raised US$16.5m
Along with its 33.3% company interest, Change Financial also holds a significant number of IvyKoin tokens.
In Change Financial’s Preliminary Final Report for the year ending June 30, 2018, the company said:
“As of 29 August 2018, ivyKoin tokens trade on multiple exchanges with an average weighted price of US$0.024, which represents a decrease from the fiscal year end price of US$0.071.
“The fair value of Change Financial Limited’s holding of ivyKoin tokens at 29 August 2018 was US$3,120,000.”