TECH.L Share News (TECH)

LONDON (Alliance News) - TechFinancials Inc, which supplies trading software to online brokers, on Wednesday said it has agreed a joint venture deal with Hong Kong-registered company IBID Holdings Ltd.

The pair hope they can work together to grow one of TechFinancials' business-to-consumer binary options trading brands to improve overall market share, revenue and profitability within that segment. TechFinancials will own 51% of the venture, while IBID will own 49%. TechFinancials didn't say which of its brands was involved in the deal.

"The board believes the JV will prove highly beneficial to the group, providing sales and marketing expertise and additional working capital to grow the brand. In addition, we believe that the combination of mutual strengths of the company and the partner will substantially strengthen operating performance," TechFinancials Chief Executive Asaf Lahav said.

TechFinancials said it will integrate the branded trading platform into the partner's online marketing systems and transfer all other intangible assets related to the traded brand to the joint venture.

IBID will make an initial investment of USD300,000 in the venture, and will "undertake to make such additional equity investments" to meet working capital needs until profit milestones are met. That milestone has been defined as monthly net profit of at least USD100,000 for three consecutive months.

TechFinancials and IBID have agreed the milestone must be achieved by no later than July 31, 2017. Any additional equity investments made by IBID until the milestone is achieved will be treated as a premium to the initial USD300,000 investment, in a move to ensure that TechFinancials remains the majority owner of the venture.

"It has been further agreed, that in the event that the profit milestone is not reached, both parties shall negotiate, in good faith, the terms of the continuation of the cooperation between them in accordance to new terms agreed at such time, taking into account the actual performance of the joint venture," TechFinancials said.

Shares in TechFinancials were untraded at 12.00 pence on Wednesday morning.

By Samuel Agini; samagini@alliancenews.com; @samuelagini

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