Gelonghui September 1st 丨CMON (01792.HK) announced that on September 1, 2021, one of the company's subsidiaries, CMON Pte. Ltd. and Monsoon Digital Pte. Ltd. (“Monsoon”, a company incorporated in Singapore) entered into a non-legally binding memorandum of understanding to launch a new series of digital collectibles using the Group's proprietary art through Monsoon's upcoming non-homogenized token (“NFT”) trading platform. An NFT is a unit of data on a cryptographically protected digital ledger known as a “blockchain”. Each NFT represents a unique digital data. NFTs can represent digital files, such as works of art, audio files, movies, game projects, and other forms of creative work.
Through its game design, the Group has developed and produced exclusive art that is popular among its customer base. Under the Memorandum of Understanding, the Group intends to grant its intellectual property rights to Monsoon (the “licensing arrangement”), which will use the relevant proprietary art to issue NFTs and allow such NFTs to be traded on its platform. The company's directors believe that by awarding the Group's exclusive works of art to create digital collections, the Group will be able to use its existing assets to broaden its revenue stream, access the developing and booming cryptocurrency market, and strengthen the advisability of its own games and brand loyalty.
Under the terms of the Memorandum of Understanding, the contracting parties will negotiate the terms of a legally binding agreement on the proposed concession arrangement. The Memorandum of Understanding is effective from September 1, 2021 until a legally binding agreement on the concession arrangement is signed or terminated by either party issuing a one-month written notice to the other party. Other than the provisions of the MOU relating to confidentiality and dispute resolution, none of the other provisions of the MOU are legally binding, and the conclusion of a MOU does not give rise to any legally binding rights or responsibilities relating to the concession arrangement. The actual detailed terms and conditions of the licensing arrangement will be implemented only after the successful launch of Monsoon's NFT trading platform and the contracting parties have signed a definitive agreement.
Monsoon is a blockchain-focused company founded to create solutions for companies in the hobby, game and collectibles markets, providing an online platform for collectors, art lovers and gamers to organize, display and trade digital collectibles. Its NFT trading platform is expected to launch in late 2021. Monsoon is the company's executive director, Wong Shing-an, holds 33% of the interest and is therefore a connected person according to Chapter 14A of the listing rules.