Cloud Nine Web3 Technologies Inc (CSE:CNI) (OTCMKTS:CLGUF) (FRA:1JI0), formerly Cloud Nine Education Group Ltd, revealed that it has strengthened its existing tech development relationship with Next Decentrum Technologies Inc, a private British Columbia company that builds tech education software and explores the possibilities of blockchain.
“We are very excited about supporting the mission-driven team at Next Decentrum and expanding upon our existing relationship with their development team, who has been assisting Cloud Nine with the development of our tech platform,” Cloud Nine President Sefton Fincham said in a statement.
“In particular, the market for non-fungible tokens (NFTs) and blockchain-powered innovations are growing exponentially and Next Decentrum certainly has the right team and vision to capitalize on the great opportunities available in those markets.”
READ: Cloud Nine Web3 Technologies has strong platform for growth, having raised over C$5.5M
In connection with the new arrangement, Cloud Nine and Next Decentrum entered into a strategic alliance agreement (SAA), a share purchase agreement (SPA) and an investor rights agreement (IRA), all dated June 25, 2021.
Following the SAA, Next Decentrum has agreed to continue to provide development services to Cloud Nine, and following the SPA, Cloud Nine closed the first and second tranches of its strategic investment in Next Decentrum. “The IRA grants the company a right of first refusal to acquire Next Decentrum in the event of a potential change in control sale,” said Cloud Nine.
In accordance with the terms and conditions of the SPA, Cloud Nine will acquire a 19.7% ownership interest in Next Decentrum, on an undiluted basis, by providing a total cash payment of $500,000 in eight tranches over a period of six months, in exchange for the issuance of an aggregate of 2,673,792 units of Next Decentrum, at a price of $0.187 per unit. Each unit is comprised of one share of Next Decentrum and one non-transferable share purchase warrant.
Each warrant entitles Cloud Nine to acquire one additional share (each, a warrant share) at a price of $0.2805 per warrant share for a period of 24 months from the date of issuance. The final tranche is scheduled to be completed by December 31, 2021. Cloud Nine has the right to increase its ownership in Next Decentrum to up to 28.2% by providing an additional investment of up to $750,000 in connection with the exercise of all 2,673,792 warrants granted under the SPA.
The first and second tranches involved Cloud Nine’s purchase of 534,758 units of Next Decentrum for a cash payment of $100,000.
Next Decentrum intends to use the investment proceeds for product development, market outreach and growing the Next Decentrum team. Next Decentrum is in the process of opening up early access to Momentable.ai, a digital collectables platform that empowers creators to create, manage, and promote NFT-based digital products, experiences, collections, and communities on the flow blockchain.
“Cloud Nine has been a great partner and this strategic investment is another step forward in our ongoing partnership,” said Next Decentrum CEO Hussein Hallak. “We believe that with this strategic investment along with the experience and support the Cloud Nine team brings to the table, we can significantly increase our speed to market.”
More than $2 billion was spent on NFTs during the first quarter of 2021, representing an increase of about 2,100% from the fourth quarter of 2020, according to a new report from NonFungible.com.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
Follow her on Twitter: @UttaraProactive