8-K: Arax Holdings and Longevity Capital Company Form Joint Venture 'Newco' to Develop Blockchain Asset Management System

Arax Holdings and Longevity Capital Company have partnered to create a joint venture, 'Newco', focused on developing a blockchain-based asset management system for senior life securities and life settlement assets.

Summary

• Arax Holdings Corp. and Darius Capital Company dba Longevity Capital Company have entered into a joint venture to form a new entity called 'Newco'.
• Newco will be structured as a Limited Liability Company in Wyoming and will be based in Seattle, WA.
• The primary goal of Newco is to develop a decentralized blockchain-based management system for valuing and managing assets, specifically senior life securities and life settlement tier/level 3 assets.
• Newco aims to raise $10 million in initial financing, with a soft cap of $3.5 million for product development and operating expenses.
• The venture will be managed by a board with equal representation from both companies, and day-to-day operations will be overseen by appointed managers.
• Both Darius Capital and Arax Holdings will contribute intellectual property and assets to the venture.
• The agreement is set for a term of 36 months, or until mutually agreed upon events occur.

Sentiment

Score: 7

Explanation: The document outlines a positive development with the formation of a joint venture and a clear plan for development and funding. However, the success of the venture is dependent on several factors, including securing funding and market adoption, which introduces some uncertainty.

Positives

• The joint venture leverages the expertise of both companies in their respective fields.
• The focus on blockchain technology could provide a competitive edge in asset management.
• The targeted initial funding of $10 million provides a solid base for development.
• The equal representation in management ensures balanced decision-making.
• The agreement includes provisions for intellectual property contributions from both parties.

Negatives

• The venture is dependent on securing the targeted $10 million in funding.
• The success of the venture relies on the effective collaboration and management by both parties.
• The agreement requires unanimous consent for amendments, which could slow down decision-making.
• The venture is in a competitive market with other blockchain and asset management solutions.

Risks

• The ability to secure the full $10 million in funding is not guaranteed.
• The development of the blockchain-based management system may face technical challenges.
• Market adoption of the new platform may be slower than anticipated.
• The venture could be impacted by changes in regulations related to blockchain and asset management.
• There is a risk of potential conflicts of interest between the parties.

Future Outlook

The document outlines the formation of a new venture with the goal of developing a blockchain-based asset management system, with a focus on raising capital and developing the platform over the next 36 months.

Management Comments

• The Parties have committed to abide by the terms outlined in the Agreement to facilitate the success of Newco.
• The Managers will have a primary duty to the best interest of the Newco and not directly to any individual Party.
• The Parties to this Agreement will use their best efforts, fairly and in good faith to facilitate the success of the Newco.

Industry Context

This announcement reflects the growing trend of using blockchain technology in financial services, particularly in asset management and alternative finance. The focus on life settlements and senior life securities is a niche area that could offer unique opportunities.

Comparison to Industry Standards

• The use of blockchain for asset management is becoming more common, with companies like Securitize and Polymath offering similar solutions, though not specifically focused on life settlements.
• The targeted $10 million raise is relatively modest compared to some larger fintech ventures, but is appropriate for an early-stage project.
• The 36-month term is a typical timeframe for a venture of this nature, allowing sufficient time for development and market entry.
• The equal management structure is a common approach in joint ventures, aiming to balance the interests of both parties.

Stakeholder Impact

• Shareholders of Arax Holdings will be impacted by the formation of the joint venture and its potential success.
• Employees of both companies may be involved in the development and operation of Newco.
• Potential investors in Newco will be impacted by the terms of the convertible note and the success of the venture.
• Customers of the new platform will be impacted by the features and functionality of the blockchain-based asset management system.

Next Steps

• Newco will be formed within 30 days of the execution date.
• The company will focus on raising the initial $10 million in funding.
• The development of the blockchain-based asset management system will commence.
• The board will hold monthly meetings to oversee the progress of the venture.

Key Dates

Keywords

blockchain, asset management, joint venture, life settlements, senior life securities, decentralized finance, fintech, intellectual property, venture capital