Spherix pulls out of merger with DatChat, takes US$1mln equity stake instead
Spherix Inc (NASDAQ:SPEX), a New York-based intellectual property company, is calling it quits on its merger with DatChat, a privately-held personal privacy platform, and will take an equity stake in the company instead.
After a series of strategic meetings, Spherix’s board has opted to pursue a strategic investment in DatChat instead of its previously planned takeover as such a move would provide more potential upside without the risks of integration inherent in a merger.
Spherix will invest US$1mln into DatChat, which is valued at US$28mln. The funding will consist of US$500,000 in cash as well as the assumption by Spherix of the salaries of certain DatChat employee salaries for a period of a year.
Based in Manhattan, Spherix owns, develops, acquires and monetizes patented and unpatented intellectual properties.
Read: Spherix shares surge on skin treatment acquisition news
“We believe the timing of this investment is perfect amidst the backdrop of a rapidly-growing Cybersecurity sector and the ever-increasing threats to consumers’ privacy and confidential information,” Spherix CEO Anthony Hayes said in a statement.
DatChat, which is headquartered in New Brunswick, New Jersey, focuses on encrypted communication, internet security and digital rights management. Its products include a messaging application for mobile smart phones which allows users to delete messages after they are sent.
Spherix announced its now-scrapped agreement to acquire full ownership of DatChat last March.
Its shares were trading 1.9% lower in morning trade at US$1.05.
Contact Ellen Kelleher at [email protected]
Story by ProactiveInvestors
Source: http://www.proactiveinvestors.com/companies/news/202980/spherix-pulls-out-of-merger-with-datchat-takes-us1mln-equity-stake-instead-202980.html
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