Lion Group Holding Makes Strategic Investment of Agunua Technology, to Explore New Opportunities in Carbon Finance

Rhea-AI Summary

Lion Group Holding (NASDAQ: LGHL) has announced a strategic investment in Hong Kong Agunua Technology Co., , aiming to acquire a 60% post-investment equity stake for $4.8 million. This move marks Lion's expansion into the global carbon finance market, enhancing its competitiveness in climate financing and green finance services.

The investment will secure Lion exclusive operating rights to the Solomon International Green Asset Exchange (SIGX), the only authorized carbon rights electronic trading platform in the Solomon Islands. SIGX features a sovereign government-backed international green exchange license and AI-based carbon emission measurement hardware.

This strategic move is expected to diversify Lion's product offerings and open up substantial revenue opportunities, with SIGX's revenue projected to exceed $200 million by 2029. The investment aligns with global carbon strategies and positions Lion for rapid expansion in the carbon finance sector.

Positive

• Acquisition of 60% stake in Agunua Technology for $4.8 million, expanding into the global carbon finance market
• Exclusive operating rights to SIGX, the only authorized carbon rights electronic trading platform in Solomon Islands
• SIGX revenue expected to surpass $200 million by 2029
• Enhancement of Lion's product offerings in climate financing and green finance services
• Potential for rapid expansion and leading position in the global carbon finance market

Negative

• Investment subject to execution of a definitive agreement and certain closing conditions
• $2.88 million of the investment to be paid in American Depositary Shares, potentially diluting existing shareholders

Insights

Financial Analyst

Lion Group's $4.8 million investment for a 60% stake in Agunua Technology is a strategic move into the carbon finance market. The use of ADSs for $2.88 million of the investment preserves cash while potentially diluting existing shareholders. The projected $200 million revenue from SIGX by 2029 is ambitious and requires scrutiny.

The exclusive rights to SIGX could provide a competitive advantage in the growing carbon trading sector. However, the success hinges on the Solomon Islands' carbon market development and international recognition of its credits. Investors should note that this is a high-risk, high-reward scenario in an emerging market, with significant execution and regulatory risks.

Environmental Policy Expert

The acquisition of Agunua Technology positions Lion Group at the forefront of the South Pacific carbon market. The SIGX platform's government backing and 50-year operating rights provide a strong foundation. However, the credibility and international acceptance of Solomon Islands' carbon credits will be important for success.

The integration of climate AI for carbon measurement addresses a critical need in the market for accurate data. This technology could become a valuable asset if it proves effective and scalable. The focus on South-South cooperation aligns with global trends in climate finance, potentially opening doors to untapped markets. Investors should monitor the platform's adoption rate and the quality of carbon credits traded.

Tech Innovation Analyst

Lion's investment in Agunua Technology represents a bold step into the intersection of fintech and climate tech. The SIGX platform's integration of Web 3.0 and AI technologies for carbon trading is innovative and could set new industry standards. The climate AI-based intelligent carbon emission measurement hardware is particularly intriguing, as it addresses a crucial pain point in the carbon market.

However, the success of this venture will depend on the reliability and accuracy of these technologies in real-world applications. Investors should look for independent verification of the platform's capabilities and its ability to scale. The potential for this technology to be applied beyond the Solomon Islands could significantly impact Lion's long-term value proposition in the global carbon finance market.

HONG KONG, Aug. 19, 2024 /PRNewswire/ -- Lion Group Holding Ltd. ("Lion" or "the Company") (NASDAQ: LGHL), the operator of an all-in-one trading platform that offers a wide spectrum of products and services, announced today that it entered into a non-binding term sheet with Hong Kong Agunua Technology Co., Limited ("Agunua Technology") and plans to acquire a 60% post-investment equity stake in Agunua Technology. The investment, valued at $4.8 million, will be executed using $2.88 million worth of American Depositary Shares (ADS) of the Company, priced at $1.2 per ADS. This strategic investment marks Lion Group's significant expansion in the global carbon finance market, further enhancing its core competitiveness in climate financing, green finance, transition finance, and climate AI application services. The closing of the investment is subject to the execution of a definitive agreement and certain closing conditions set forth in the definitive agreement.

Carbon assets are the most promising strategic resource for international development over the next 30 years. Agunua Technology holds the exclusive technical mandate and 50-year operating rights for the only authorized carbon rights electronic trading platform in the Solomon Islands—the Solomon International Green Asset Exchange ('SIGX'). SIGX boasts a sovereign government-backed international green exchange license and the sole system for South-South cooperation carbon account interconnectivity, making it the exclusive platform for green asset trading in South Pacific countries. The platform covers online sales, electronic order processing, electronic payment settlement, and all other activities related to electronic trading. Leveraging Asia's technological research and development capabilities, the platform also features climate AI-based intelligent carbon emission measurement hardware, addressing issues of carbon data, carbon standards, green evaluation, and carbon asset trading interconnectivity between countries. This offers global carbon market participants an efficient, secure, and transparent trading environment.

Through this investment, Lion will secure exclusive operating rights to the SIGX carbon credit electronic trading platform. This move will enhance Lion's efforts in building green financial infrastructure and expanding into emerging sectors focused on carbon neutrality services. By targeting key global markets, South-South cooperation countries, and the Greater China region, this move will not only diversify and enhance Lion's innovative product offerings, delivering more comprehensive and specialized carbon finance solutions to the Company's clients, but also open up substantial revenue opportunities, with SIGX's revenue expected to surpass $200 million by 2029.

Mr. Chunning (Wilson) Wang, CEO of Lion, commented, "Under the global consensus on carbon strategies, the financialization and digitalization of the carbon market are increasingly enhancing its value. Lion's recent investment is not only a significant expansion of our business but also a strategic move that aligns perfectly with the evolving trends in the global carbon finance market. By integrating Agunua Technology's strengths with the resource advantages of the SIGX platform, we will create a solid foundation and significant growth potential for rapid expansion in the carbon finance sector. Moreover, by leveraging cutting-edge technologies such as Web 3.0 and AI, we are confident in securing a leading position in the global carbon finance market. This will enable us to achieve new growth points and sustainable development, advance the construction of a digital financial ecosystem, and create meaningful value growth for our shareholders."

About Lion Group Holding Ltd.

Lion Group Holding Ltd. (Nasdaq: LGHL) operates an all-in-one, state-of-the-art trading platform that offers a wide spectrum of products and services, including (i) total return service (TRS) trading, (ii) contract-for-difference (CFD) trading, (iii) Hong Kong-based over-the-counter (OTC) stock options trading, and (iv) futures and securities brokerage. Additional information may be found at http://ir.liongrouphl.com. 

Forward-Looking Statements

This press release contains, "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. Lion's actual results may differ from their expectations, estimates and projections and consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as "expect," "estimate," "project," "budget," "forecast," "anticipate," "intend," "plan," "may," "will," "could," "should," "believes," "predicts," "potential," "might" and "continues," and similar expressions are intended to identify such forward-looking statements. These forward-looking statements include, but are not limited to, statements about: Lion's goals and strategies; our ability to retain and increase the number of users, members and advertising customers, and expand its service offerings; Lion's future business development, financial condition and results of operations; expected changes in Lion's revenues, costs or expenditures; the impact of COVID-19; competition in the industry; relevant government policies and regulations relating to our industry; general economic and business conditions globally and in China; and assumptions underlying or related to any of the foregoing. Lion cautions that the foregoing list of factors is not exclusive. Lion cautions readers not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Lion does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based, subject to applicable law. Additional information concerning these and other factors that may impact our expectations and projections can be found in Lion's periodic filings with the SEC, including Lion's Annual Report on Form 20-F for the fiscal year ended December 31, 2023. Lion's SEC filings are available publicly on the SEC's website at www.sec.gov.

Contacts

Lion Group Holding Ltd.
Tel: +852 2820 9011
Email: ir@liongrouphl.com 

ICR, LLC
William Zima
Tel: +1 203 682 8233
Email: ir@liongrouphl.com 

New York
Skyline Corporate Communications Group, LLC
Scott Powell, President
Tel: (646) 893-5835
Email: info@skylineccg.com

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SOURCE Lion Group Holding Ltd.

FAQ

What is Lion Group Holding's (LGHL) recent strategic investment?

Lion Group Holding (LGHL) is investing $4.8 million to acquire a 60% post-investment equity stake in Hong Kong Agunua Technology Co., , gaining exclusive operating rights to the Solomon International Green Asset Exchange (SIGX).

How much revenue is SIGX expected to generate by 2029 for Lion Group Holding (LGHL)?

SIGX's revenue is expected to surpass $200 million by 2029, potentially opening up substantial revenue opportunities for Lion Group Holding (LGHL).

What is the significance of SIGX for Lion Group Holding's (LGHL) business?

SIGX is the only authorized carbon rights electronic trading platform in the Solomon Islands, providing Lion Group Holding (LGHL) with a strong position in the carbon finance market and enhancing its climate financing and green finance services.

How is Lion Group Holding (LGHL) financing the Agunua Technology investment?

Lion Group Holding (LGHL) is financing the $4.8 million investment using $2.88 million worth of American Depositary Shares (ADS) priced at $1.2 per ADS, with the remaining amount likely in cash.