Abaxx Technologies (NEO: ABXX, OTC: ABXXF, FRA: 36N0) develops a regulated commodity futures exchange in Singapore and new software protocols and applications to enhance trust in electronic markets. The company aims to improve price signals in markets for the energy transition. The company IPOd on December 14, 2020, and its stock price offers a positive opportunity to invest while markets are struggling.  

Company Overview

Abaxx Technologies (NEO: ABXX, OTC: ABXXF, FRA: 36N0) leverages deep expertise in markets and software technology to capture opportunities in the global energy transition from coal and oil to gas and renewables. The company’s technology increases transaction velocity and data security and facilitates improved risk management in the majority-owned Abaxx Singapore, AEX, or Abaxx Exchange. ABBX seeks final regulatory approvals as a Recognized Market Operator and Approved Clearing House with the Monetary Authority of Singapore. ESG-focused, the company’s technology provides complete transparent transaction information, and the company dives into a premium market in finance. Exchanges trade at a premium to other financial institutions due to higher fee-based and recurring revenues, less cyclicality, and oligopolistic market dynamics with high entry barriers. Being in Singapore is essential. It is the hub of the Asian energy transition, enabling traders to bring more certainty and verify criteria supporting all aspects of ESG transactions more efficiently.

On November 17, the company shared strategic updates about its Q3 2022 development activities, exchange platform testing, and regulatory engagement. Abaxx worked and accomplished work on the following:

• Progressed four physical-delivery commodity contracts into the third and final phase of product development and regulatory submission; advanced two additional physically settled contracts into phase two of product development and contract drafting
• Engaged commercial participant consortium for planned submission of industry whitepaper to the European Union task force on establishing a new LNG pricing benchmark
• Commencement of the platform testing process with key market infrastructure providers and independent service vendors (ISVs) for both trading and clearing entities
• Engagement with the Monetary Authority of Singapore regarding the Recognized Market Operator and Approved Clearing House License continuous approval process, including upgrades to systems
• Advanced ID++ technical whitepaper, GitBook, and developer documentation to final drafts, the commencement of industry partnership conversations ahead of the first half of 2022 (H123) publication

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During the quarter, the company made significant progress toward a 2023 launch of the Abaxx Exchange in Singapore. Member engagement accelerated with key industry events in Q3 and the increased focus on Ìsolutions for complicated market structures across the European and Asian gas industries and global metals. Abbex continues to work with its core Futures Commission Merchants (“FCMs”) and Clearing Members alongside the Monetary Authority of Singapore to ensure a successful launch. The number of technological and regulatory interdependencies is such that a precise date cannot be publicly announced until systems are hardened, and all conditions are satisfied. The company made significant strides toward the final delivery of its platform ahead of its following regulatory review.

Development efforts in Q2 and Q3 have delivered an advanced cloud trading platform with expanded functionality, including enhanced service layers, a proprietary database infrastructure to facilitate additional risk analysis, and market data tools for continuous product development.

As a leading global financial center, Singapore supports innovative technologies that add security and efficiency to markets. The Monetary Authority of Singapore (“MAS”) exercises rigorous examination and testing of risk management frameworks and technology infrastructure to instill confidence among market participants.

Share Structure/ Financials

According to the company’s last financial results for the period ending September 30, the company had $5.2M in cash and cash equivalents, $16.8M in total assets, and $2.3M in total liabilities. Abaxx has a high burn rate, occurring a $5.8M net loss over the last quarter. Amongst this loss, almost $3M was spent on research and development,  and $1.2M was accounted for salaries and wages.

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The company also made short-term investments. During the three and nine months period that ended September 30, 2022, the company invested $nil and $7,419,629, respectively, into gold (December 31, 2021, $1,966,334). The company has classified this investment as short-term as it plans to liquidate within the next tAbbexlve months.

Another exciting news, Abaxx is involved in Base Carbon. s. Base Carbon is an early-stage business with revenue streams that are still being developed as the business was recently launched. Abaxx Technology Crop. was a founding shareholder of Base Carbon and, on September 30, 2022, held approximately 15.6% of shares outstanding that were acquired for $2,490,695. The fair market value of these shares in Base Carbon on September 30, 2022, was $8,702,834. Base Carbon pays a 2.5% royalty to Abaxx for the usage of software it developed. The royalty is indefinite and can be repurchased if Base Carbon is willing to pay $150M.

Balance-wise, 73M shares are issued and outstanding. Combined with this data, the company holds 4.5M options at an average price of $1.93 and 3.2M warrants. The fully diluted share structure is pretty low for a tech company which, most of the time, needs to raise capital to expand faster or simply continue its operations.

Bottom Line

Abaxx Technologies (NEO: ABXX, OTC: ABXXF, FRA: 36N0) is likely to witness massive growth. Its index is about to be ready, and the company has undertaken and achieved significant progress. Located in the Asian energy transition hub, Abaxx achieved significant milestones, and 2023 should see the company leveraging as THE exchange for Liquified Natural Gas and as a changing global energy trade that demands carbon reduction and offsets.

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