TORONTO, October 6, 2021 — Abaxx Technologies Inc., (NEO:ABXX)(OTCQX:ABXXF) (“Abaxx” or the “Company”), a financial software company, majority shareholder of Abaxx Singapore Pte. Ltd., the Abaxx Commodity Exchange (ACX), and producer of the SmarterMarkets™ Podcast, is updating shareholders on the progress of the Company’s business plan and anticipated milestone road map for Q4 – 2021 through Q1 2022.
- Central Clearing House Approval In Principle granted August 25, 2021
- Pilot testing of technology applications including GHG protocol tradeflow commencing
- Key new executives onboarded during Q3
- New launch timeline pending, subject to clearing member onboarding and final approval
- Preliminary Abaxx Technologies Inc. Base Shelf Prospectus Filed
- Base Carbon Corp. initial financing complete
Abaxx was founded to develop new tools for smarter market coordination and risk management as commodity markets navigate a complex global energy transition. Ongoing discussions with our industry partners highlight the acute need for our buyer and seller of last resort solutions as countries across Europe and Asia seek to lower their energy import risks and finance cleaner, more flexible energy sources.
During the quarter we made great strides towards the final phases of launching our new markets, with technology integrations and commercial engagement activities proceeding according to the business plan. The precise launch timeline is now pending clearing member onboarding, and finalizing our remaining requirement conditions for both Central Clearing House and Recognized Market Operator final regulatory approvals. The financial institution integrations and regulatory related delays have not created a dependency impeding the introduction of our technology suite of applications in pilot test trading programs.
The decision to pursue both trading and clearing licenses from the start, while more uncertain in terms of the regulatory application timing and clearing member integration dependencies somewhat beyond our control, is proving to be prescient in that it positions the Company to deliver a more comprehensive level of products and services to an expanded addressable market of clients and partners. The Abaxx commercial team is actively engaged with the energy industry on refining the products to launch the exchange. The global economy is experiencing a transition-energy challenge which is certain to expand in complexity. The recent spikes in global natural gas prices, exacerbated by inefficient market structures and a lack of environmental impact transparency in the financing and offtake of long term gas supply, is one of the key problems Abaxx is working to solve.
The closing of our bought deal financing earlier in Q2 solidified our initial launch funding and minimum regulatory capital enabling the Company to add new executives and achieve a key regulatory milestone. The Company also filed a Preliminary Base Shelf Prospectus with the Ontario Securities Commission on September 22, 2021, qualifying the distribution of securities for the 25 months it is in effect. Pending regulatory review and acceptance, this facility would provide flexibility in future financing options, if so needed, and additional comfort to our clearing members and regulators that the Company has ready access to capital in the event of a quickly growing market.
Abaxx Exchange Development Update
The launch of the Abaxx Exchange is proceeding pending the satisfaction of the final regulatory requirements listed in the Approval In Principle letters. Abaxx Exchange has received regulatory Approval In Principle (“AIP”), as a Recognized Market Operator (“RMO”) and Approved Clearing House (“ACH”) with the Monetary Authority of Singapore (“MAS”), on September 7, 2020, and August 25, 2021 respectively. The principle approval of these licenses positions the Company in a rare advantageous regulatory structure as one of the few independent, integrated exchange and clearinghouses in Singapore. Further updates on launch timing will be released when more precise visibility is possible.
The Company is preparing to test trade cycles for non-cleared services using the Company’s front end software applications, and is assembling groups to commence pilot testing in Q4 while final testing continues for the exchange trade order platform and central clearing house. Integrations with Independent Software Vendors who provide middleware connectivity to Futures Commission Merchants and Clearing House members is complete along with trade order interfaces and entry screens. The systems are mutually beneficial but not interdependent.
Technology Suite Testing Including Carbon initiatives and GHG Protocol
An Abaxx-led carbon neutral LNG working group has produced a methodology whereby exchange clients have the ability to link LNG futures contracts with OTC carbon offset markets. The pilot testing phase commencing in Q4 will be a use case for Abaxx Verifier application in addition to the document tradeflow and contract signature tools. Counterparties are being assembled to test the exchange of legal contracts including Master Sales and Purchase Agreements. The objective of the test is to evaluate the reduction in transaction friction from pre and post trade activities, and the creation of feedback loops identifying further refinements.
Base Carbon Formation
The formation of Base Carbon Corp. represents a low cost opportunity to deploy a complete vertical integration of the Abaxx technology suite. This opportunity accruing to shareholders has not required any share dilution by Abaxx. The project is intended to deliver accretive value to shareholders in the form of the approximately 30% current equity position, and the 2.5% royalty in addition to substantiating key performance metrics associated with the software application modules.
Carbon markets are rapidly evolving and remain fragmented. There is apparent unanimity in the view the industry requires transparency in measurement and verification, challenges which Abaxx is confident in deploying solutions.
Base Carbon will begin corporate press releases in the next few weeks.
About Abaxx Technologies
Abaxx is a development stage financial software company that has created proprietary technological infrastructure for both global commodity exchanges and the digital marketplace. The Company’s formative technology increases transaction velocity, data security, and facilitates improved risk management for the majority owned, Abaxx Singapore Pte. Ltd. (“ACX”, “Abaxx Commodity Exchange”, or “Abaxx.Exchange”) – a commodity futures exchange that is seeking final regulatory approvals as a Recognized Market Operator (“RMO”) and Approved Clearing House (“ACH”) with the Monetary Authority of Singapore (“MAS”). Abaxx is also the owner of the LabMag and KeMag iron ore assets, resulting from the reverse take-over of New Millennium Iron Corp, and the creator and producer of the SmarterMarkets™ podcast.
About SmarterMarkets™ Podcast
SmarterMarkets™ gets a refresh in Q4 with a new website in addition to improving cohesion among the socio-economic systems Abaxx is building products for: commodities, technology and social systems.
The success of this market education-focused initiative remains a critical driver of our product design methodology and has resulted in positive inbound feedback from some of the most important leaders in our commercial segments. We had three of the most influential energy opinion leaders as part of a short series on energy policy and ESG, and carbon leaders from Abaxx and partners. In advance of the release of our ID++ protocol and associated application modules, a focus in Q3 has been on digital identity and privacy hosted by Michelle Dennedy, CEO PrivacyCode. Guests have included the Chief Privacy Officer of Uber, the SVP of Identity at Mastercard and the CTO of VMWare.
About Base Carbon
Base (for the Benefit of Air, Sea, Earth) Carbon is a globally diversified asset development firm in the business of sourcing, financing, developing and trading carbon credits. The firm’s mandate is to be the preferred carbon project partner for financing, streaming, technology and access to markets. Base founders have decades of experience in portfolio management, financial structuring, technology development, capital markets, environmental and carbon markets.
For more information please visit basecarbon.com
Media and investor inquiries:
Abaxx Technologies Inc.
Paris Golab, Investor Relations
Tel: +246 243-3390
This News Release includes certain “forward-looking statements” which do notconsist of historical facts. Forward-looking statements include estimates andstatements that describe the Company’s, including its affiliates’, future plans,objectives or goals, including words to the effect that Abaxx expects a statedcondition or result to occur. Forward-looking statements may be identified by suchterms as “seeking”, “believes”, “anticipates”, “expects”, “estimates”, “may”,“could”, “would”, “will”, or “plan”. Since forward-looking statements are based onassumptions and address future events and conditions, by their very nature theyinvolve inherent risks and uncertainties. Although these statements are based oninformation currently available to Abaxx, Abaxx does not provide any assurancethat actual results will meet management’s expectations. Risks, uncertainties andother factors involved with forward-looking information could cause actual events,results, performance, prospects and opportunities to differ materially from thoseexpressed or implied by such forward-looking information. Forward lookinginformation in this news release includes, but is not limited to, Abaxx’, including itsaffiliates’, objectives, goals or future plans, statements, timing of thecommencement of operations and estimates of market conditions. Such factorsinclude, among others: risks relating to the global economic climate; dilution; theCompany’s limited operating history; future capital needs and uncertainty ofadditional financing; the competitive nature of the industry; currency exchangerisks; the need for Abaxx to manage its planned growth and expansion; the effectsof product development and need for continued technology change; protection ofproprietary rights; the effect of government regulation and compliance on Abaxxand the industry; network security risks; the ability of Abaxx to maintain properlyworking systems; reliance on key personnel; global economic and financial marketdeterioration impeding access to capital or increasing the cost of capital; andvolatile securities markets impacting security pricing unrelated to operatingperformance. In addition, particular factors which could impact future results of thebusiness 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, systemfailure risk, risk of technological change; dependence of technical infrastructure, aninability to predict and counteract the effects of COVID-19 on the business of theCompany, including but not limited to the effects of COVID-19 on the price ofcommodities, capital market conditions, restriction on labour and internationaltravel and supply chains. Abaxx has also assumed that no significant events occuroutside of Abaxx’ normal course of business.Abaxx cautions that the foregoing list of material factors is not exhaustive. Inaddition, although Abaxx has attempted to identify important factors that couldcause actual results to differ materially, there may be other factors that causeresults not to be as anticipated, estimated or intended. When relying on Abaxxforward-looking statements and information to make decisions, investors and othersshould carefully consider the foregoing factors and other uncertainties and potentialevents. Abaxx has assumed that the material factors referred to in the previousparagraph will not cause such forward-looking statements and information to differmaterially from actual results or events. However, the list of these factors is notexhaustive and is subject to change and there can be no assurance that suchassumptions will reflect the actual outcome of such items or factors. The forward-looking information contained in this press release represents the expectations ofAbaxx as of the date of this press release and, accordingly, is subject to changeafter such date. Readers should not place undue importance on forward-lookinginformation and should not rely upon this information as of any other date. Abaxxdoes not undertake to update this information at any particular time except asrequired in accordance with applicable laws. The NEO Exchange does not acceptresponsibility for the adequacy or accuracy of this press release.
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