TORONTO, Feb. 11, 2021 (GLOBE NEWSWIRE) — Abaxx Technologies Inc., (ABXX:NEO) (“Abaxx” or the “Company”), a financial software company, majority shareholder of Abaxx Singapore Pte. Ltd., the Abaxx Commodity Exchange (“AEX”), and producer of the SmarterMarkets™ Podcast, is making a strategic investment in AirCarbon Pte. Ltd. Singapore (“AirCarbon” or “ACX”). A Letter of Intent (“LOI”) was signed between Abaxx and AirCarbon to develop and license software services and explore commodity futures market related services as AirCarbon advances standardized contracts for carbon offset markets.
Abaxx is working with energy and resource producers, financial institutions, traders and industrial consumers who are increasingly interested in Abaxx’s trading, post trading, and ESG auditing and pricing-differential infrastructure in facilitating their net-zero carbon initiatives. Abaxx is well positioned for this secular growth market with deep commodity market development expertise, investments in market infrastructure, and advanced software architecture designed for interoperability among market actors for the challenges in externality pricing and incentives. Furthermore, this investment will establish Abaxx as a key participant and leader in the efforts to develop a global carbon emissions price, with the ultimate goal of incentivising investment in carbon capture, sequestration and reduction technologies.
Abaxx Strategic Investment and Partnership with AirCarbon
Under the terms of the LOI, Abaxx has a right to subscribe for new shares through two tranches in AirCarbon’s USD $3,000,000 Series-A financing. If both investments are made, Abaxx will realize an equity voting stake of up to 10% in AirCarbon. Abaxx has made the first investment of USD $500,000 through its wholly owned subsidiary Abaxx Technologies Corp. The proposed investment represents an initial step to key relationships to deploy Abaxx’s technology in carbon markets. The total Abaxx investment would yield a strategic stake in this Singapore-based OTC market initiative for standardizing and trading global voluntary carbon credits, as well as potential integration into the Abaxx Exchange which will enable the development of Environmental, Social and Governance (ESG)-related commodity pricing differentials in Abaxx markets. Pursuant to the completion of both tranches of the investment, Abaxx will further negotiate (i) an LOI for ACX to purchase software licenses from Abaxx Technologies, (ii) exclusive partnership on futures clearing when the ACX platform advances beyond the current spot market setup to a regulated futures market anticipated in the next 12 to 18 months. This investment emphasizes Abaxx’s commitment to its home base in Singapore. Since inception, Abaxx has worked closely with and supported the efforts of Enterprise Singapore in establishing the country as the leading financial center of Asia, and the home for critical energy transition marketplaces and financial technology innovation.
“The Abaxx mission is to transform commodity markets through innovative contract development and standardization, enabling market-based incentives for ESG-related pricing externalities, of which carbon is the first,” remarked Josh Crumb, Founder and CEO of Abaxx. “This investment and partnership with AirCarbon is an important step toward achieving our vision of SmarterMarkets™, as solutions for pricing carbon emissions, offsets and ultimately incentivizing carbon capture technology has become a critical societal objective.”
AirCarbon leverages traditional commodities trading infrastructure to help standardize the growing market for voluntary carbon offsets, currently organized around projects. The UN’s Clean Development Mechanism (CDM) registry alone has 7823 registered projects. Each project has a distinct methodology, country of origin and date of issuance, among other attributes. ACX securitizes carbon credits around market demand, allowing traders to gain exposure to a standardized asset class as opposed to individual projects. ACX is a platform facilitating over the counter (OTC) trades and does not act as a broker or consultant on specific projects. By streamlining carbon trading around markets, ACX offers lower transaction fees, efficient trading, settlement, risk mitigation and price transparency.
The AirCarbon Exchange offers a traditional trading architecture while using distributed ledger technology to securitize carbon credits into digital receipts, representing a clear line of ownership between the carbon credits held in trust and the digital receipt. Similar to traditional commodity exchanges, owners of ACX receipts may request physical delivery of the underlying carbon credits. ACX is onboarding clients onto its platform and is actively crossing OTC trades leading up to the Abaxx-led Series A investment round.
Bill Pazos, AirCarbon’s Co-Founder, CIO and COO, remarked, “Our partnership with Abaxx builds on our goal to deliver traditional commodities architecture to carbon markets. Our synergies accelerate the delivery of carbon futures products, as well as carbon mitigating solutions for the LNG and broader commodities markets.”
Mr. Pazos formerly served as a Managing Director at Standard Bank; a position where he acted as the global head of carbon origination and finance, and was a member of the board of Standard Merchant Bank Singapore. Additionally, as the CEO and founding partner of Ecoinvest Carbon S.A., a joint venture company with Bunge S.A., he built what became one of the world’s largest aggregators of carbon credits. Mr. Pazos is a frequent speaker on climate finance and carbon markets, most recently lending his time to several market initiatives including the Task Force on Scaling Voluntary Carbon Markets and the World Bank’s Climate Warehouse.
Task Force on Voluntary Carbon Markets TSVCM and Abaxx SmarterMarkets™ for ESG
Abaxx is positioned to fulfill many of the recommendations and objectives detailed in the January 2021 Taskforce on Voluntary Carbon Markets Final Report led by Mark Carney, UN Special Envoy for Climate Action. The report cites the need for robust technological infrastructure to enable trading, clearing and settlement while producing transparent market and reference data. This confirms the need for the Abaxx ID++™Command Console, which facilitates secure and transparent auditing, verification and measurement of carbon credits for the numerous market actors in the carbon value chain, thus improving market liquidity. With many environmental stakeholders scrutinizing offset legitimacy and methodology, Abaxx is transitioning the current structure of voluntary offsetting to a traditional commodity futures contract-based market. Management anticipates this initial stage of OTC-traded carbon offsetting will follow the formation of commodity spot market trading towards structured futures contracts based on emissions. This evolution will provide the market with a standard forward-incentive price, incentivizing investment in carbon reductions, capture and sequestration technologies.
On the December 12, 2020 episode of Abaxx’s SmarterMarkets™ podcast guest Jeff Currie, remarked on the shift to a new structural commodity-intensive cycle following a post COVID-19 surge in stimulus investments for infrastructure globally, while emphasizing the critical market need for a global carbon emissions price. By alluding to this commodity “super-cycle” paving the way for an era where producers, traders and stakeholders will operate under scrutiny of ESG scoring, necessitates applications such as those Abaxx has been developing for the past three years. The technological infrastructure requirements resulting from the convergence of a new structural commodity cycle and the demands for ESG scoring by the major financial institutions fit the technology engineering methodology and deployment of ID++™, the Abaxx Exchange order book, and central clearing systems.
During the month of February, the SmarterMarkets™ Podcast will host a four-part conversation series on important topics in ESG investing.
About Abaxx Technologies
Abaxx is a financial software company developing and deploying technological infrastructure for both global commodity exchanges and digital marketplaces. The company’s formative technology increases transaction velocity, data security and facilitates improved risk management in the majority owned Abaxx Singapore Pte. Ltd. (“AEX”, or “Abaxx.Exchange”) – a commodity futures exchange seeking final regulatory approvals as a Recognized Market Operator (“RMO”) and Approved Clearing House (“ACH”) with the Monetary Authority of Singapore (“MAS”). Abaxx is the creator and producer of the SmarterMarkets™ podcast.
“The Abaxx mission is to transform commodity markets through innovative contract development and standardization, enabling market-based incentives for ESG-related pricing externalities, of which carbon is the first. This investment and partnership with AirCarbon is an important step toward achieving our vision of SmarterMarkets™, as solutions for pricing carbon emissions, offsets and ultimately incentivizing carbon capture technology has become a critical societal objective.”
– Josh Crumb, Founder and CEO of Abaxx
Investor and Media inquiries:
Abaxx Technologies Inc.
Josh Crumb, Founder and Chief Executive Officer
Tel: +1 246 271 0082
This News Release includes certain “forward-looking statements” which do not consist of historical facts. Forward-looking statements include estimates and statements that describe Abaxx or the Company’s future plans, objectives or goals, including words to the effect that Abaxx expects a stated condition or result to occur. Forward-looking statements may be identified by such terms as “believes”, “anticipates”, “expects”, “estimates”, “may”, “could”, “would”, “will”, or “plan”. Since forward-looking statements are based on assumptions and address future events and conditions, by their very nature they involve inherent risks and uncertainties. Although these statements are based on information currently available to Abaxx, Abaxx does not provide any assurance that actual results will meet management’s expectations. Risks, uncertainties and other factors involved with forward-looking information could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information. Forward looking information in this news release includes, but is not limited to, Abaxx’ objectives, goals or future plans, statements, timing of the commencement of operations and estimates of market conditions. Such factors include, among others: risks relating to the global economic climate; dilution; the Company’s limited operating history; future capital needs and uncertainty of additional financing; the competitive nature of the industry; currency exchange risks; the need for Abaxx to manage its planned growth and expansion; the effects of product development and need for continued technology change; protection of proprietary rights; the effect of government regulation and compliance on Abaxx and the industry; network security risks; the ability of Abaxx to maintain properly working systems; reliance on key personnel; global economic and financial market deterioration impeding access to capital or increasing the cost of capital; and volatile securities markets impacting security pricing unrelated to operating performance. In addition, particular factors which could impact future results of the business of Abaxx include but are not limited to: operations in foreign jurisdictions, protection of intellectual property rights, contractual risk, third party risk; clearinghouse risk, malicious actor risks, third-party software license risk, system failure risk, risk of technological change; dependence of technical infrastructure, an inability to predict and counteract the effects of COVID-19 on the business of the Company, including but not limited to the effects of COVID-19 on the price of commodities, capital market conditions, restriction on labour and international travel and supply chains. Abaxx has also assumed that no significant events occur outside of Abaxx’ normal course of business.
Abaxx cautions that the foregoing list of material factors is not exhaustive. In addition, although Abaxx has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended. When relying on Abaxx forward-looking statements and information to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Abaxx has assumed that the material factors referred to in the previous paragraph will not cause such forward-looking statements and information to differ materially from actual results or events. However, the list of these factors is not exhaustive and is subject to change and there can be no assurance that such assumptions will reflect the actual outcome of such items or factors. The forward-looking information contained in this press release represents the expectations of Abaxx as of the date of this press release and, accordingly, is subject to change after such date. Readers should not place undue importance on forward-looking information and should not rely upon this information as of any other date. Abaxx does not undertake to update this information at any particular time except as required in accordance with applicable laws. The NEO Exchange does not accept responsibility for the adequacy or accuracy of this press release.
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