After being booted from the ASX in March, game maker Animoca Brands is listing a subsidiary on the National Stock Exchange (ASX:NSX).

It plans to list its fitness and health technology subsidiary OliveX Holdings in July, raising up to $2-3m from investors.

An investor deck said it had $109,717 in cash as at the end of May, and the prospectus says it made $545,000 in revenue in fiscal 2019. It made a $427,000 loss in the full year.

The prospectus noted risks of competition — it’s a very new area — the potential of losing music rights, and losing key personnel as it relies on a small group of people to encourage users to sign up.

Hong Kong-based OliveX makes fitness apps, such as 22 Pushups and Lympo Squat which allows users to earn cryptocurrency by doing squats.

Animoca chair Yat Sui also chairs Olive-X.

Animoca says it will “continue, where appropriate, to provide both commercial and technical support to OliveX to ensure that its strategy is achieved and that value is created”.


ASX nervous about crypto

Animoca fell foul of the ASX’s dislike of companies raising funds via cryptocurrencies.

It raised $US2.01m ($2.9m) in cash and crypto via a Simple Agreement for Future Equity (SAFE) security and presold utility tokens sold via its gaming subsidiary TSB Gaming in the September quarter last year.

The money, largely cash with a small proportion from cryptocurrency to be used to fund another subsidiary, was released just after the company was delisted.

The ASX has delisted other companies, like Byte Power and First Growth Funds, from the market which were dabbling in crypto.

The market operator is relying on guidance from ASIC that many initial coin offers (ICO) and crypto assets are likely to be managed investment funds at worst, and therefore need an Australian Financial Services Licence (AFSL).

“ASX is aware of … law firms providing advice that tokens … are not a financial product … The examples ASX has seen … do not appear to have considered all of the issues involved in this complex question … in particular whether or not the ICO or IEO involves an offer of an interest in a managed investment scheme,” the market operator said last year.

Animoca’s Siu blamed Australian regulations for being too vague around crypto and what could and couldn’t be done.

He told Stockhead the ASX had problems with whether Animoca was complying with listing rules in August 2019, but didn’t say it wasn’t allowed to raise money in the fashion that it did.

Siu said Animoca had addressed the governance issues raised by the ASX and in spite of advice from “multiple” law firms, “in the end it wasn’t enough”.


Small exchanges trying hard

The NSX, and the even smaller Sydney Stock Exchange (SSX), have been striving to provide an alternative to the ASX for years, pitching themselves as faster, cheaper bourses for small companies to list on, without the heavy regulatory overheads.

Decades-old, the SSX was gearing up in late 2018 to attract more companies. It currently has no listings and three official debutants due to IPO.

The NSX gained KPMG alumni Ann Bowering as CEO in 2016. In 2018 she was aiming to make that bourse the go-to option for equity crowd-funded companies and listings that were too small for the ASX.

In an interview at the time with Stockhead, she hoped her efforts would pay off in the second half of 2019.

Bowering resigned in May last year.

Isignthis (ASX:ISX) is now a major shareholder in the NSX and its boss John Karantzis is the new CEO.

However, both markets are attracting companies.

Private gold explorer Torque Metals will be the first resources player to list on the SSX. The company previously tried to list on the ASX in late 2018 but was unsuccessful.

China Magnesium Corporation (ASX:CMC) is dumping the ASX in favour of the SSX, having been suspended since July last year.

The NSX has been pitching hard for resource juniors since 2018 and has gained three news listings this year.