Prestige Wealth Inc. Announces Acquisitions of InnoSphere Tech and Closing of Acquisition of Wealth AI

Rhea-AI Summary

Prestige Wealth (NASDAQ: PWM) has announced two significant acquisitions to strengthen its AI and wealth management capabilities. The company will acquire InnoSphere Tech for US$2.1 million, paid through 3.5 million newly issued Class B ordinary shares at US$0.60 per share. The deal includes warrants for 2,625,000 Class A ordinary shares at US$0.72 exercise price. Additionally, PWM has completed the acquisition of SPW Global, which owns Wealth AI PTE in Singapore. The InnoSphere Tech acquisition is expected to close in Q4 2024 and aims to enhance PWM's AI technology services in wealth management.

Positive

• Strategic acquisition of InnoSphere Tech valued at US$2.1 million to enhance AI capabilities
• Successful completion of Wealth AI acquisition strengthening market presence in Singapore
• Key InnoSphere Tech employees will be retained post-acquisition
• Non-competition and non-solicitation covenants secured for three years

Negative

• Share dilution through issuance of 3.5 million new Class B shares
• Additional potential dilution from 2.625 million warrant shares
• Purchase price premium at US$0.60 per share compared to warrant exercise price

Insights

Financial Analyst

This dual acquisition marks a strategic expansion for PWM in the AI-driven wealth management space. The $2.1M InnoSphere Tech deal structure is notable - using equity instead of cash preserves capital while the warrant structure at $0.72 provides potential upside alignment. The 3.5M Class B shares issuance represents significant dilution but demonstrates confidence in synergy potential.

The non-compete and employee retention clauses are particularly strategic for protecting intellectual property and maintaining development momentum. The Wealth AI acquisition completion, combined with InnoSphere Tech, signals PWM's aggressive push into AI-powered wealth management solutions, potentially creating new revenue streams and competitive advantages in the rapidly evolving fintech landscape.

Tech Expert

The acquisition of both InnoSphere Tech and Wealth AI positions PWM strategically in the AI wealth management sector. The technology stack combination could enable automated portfolio management, predictive analytics and personalized financial advisory services. The retention of InnoSphere Tech's key employees is important for maintaining development continuity and intellectual property value.

The six-month warrant exercise restriction period allows time for technology integration while providing incentives for long-term value creation. This dual-technology acquisition could accelerate PWM's digital transformation and create a competitive edge in the Asian wealth management market through AI-driven solutions.

HONG KONG, Nov. 08, 2024 (GLOBE NEWSWIRE) -- Prestige Wealth Inc. (NASDAQ: PWM) (“PWM”, or the “Company”), a wealth management and asset management services provider based in Hong Kong, today announced that, on November 5, 2024, it entered into a definitive acquisition agreement pursuant to which PWM will purchase all shares of InnoSphere Tech Inc.(“InnoSphere Tech”), a company incorporated under the laws of the British Virgin Islands. The total purchase price is US$2,100,000, subject to customary closing purchase price adjustments, in the form of 3,500,000 newly issued Class B ordinary shares of the Company at a price per Class B ordinary share of US$0.60 to the seller and key employees of InnoSphere Tech. The Company will also grant warrants to purchase 2,625,000 Class A ordinary shares of the Company at an exercise price per share equal to US$0.72 to the seller parties. The warrants will become exercisable on the six-month anniversary of the issuance date and will expire on the fifth anniversary from the date on which they become exercisable. In addition, key employees will be retained and continue to be employed by InnoSphere Tech after closing of the transaction. The acquisition agreement also includes a third-year period non-competition and non-solicitation covenants from the seller parties. The acquisition of InnoSphere Tech is expected to close in the fourth quarter of 2024 and will enhance PWM’s technology strength in artificial intelligence space and facilitate PWM’s development of AI-driven technology services to business clients in wealth management area.

PWM also announced that, on November 4, 2024, it completed its acquisition of all shares of SPW Global Inc., a company incorporated under the laws of the British Virgin Islands, which in turn wholly owns Wealth AI PTE LTD. or Wealth AI, a company incorporated under the laws of Republic of Singapore.

About Prestige Wealth Inc.

Prestige Wealth Inc. is a wealth management and asset management services provider based in Hong Kong, assisting its clients in identifying and purchasing well-matched wealth management products and global asset management products. With a focus on quality service, the Company has retained a loyal customer base consisting of high-net-worth and ultra-high-net-worth clients in Asia. Through the Company’s wealth management service, it introduces clients to customized wealth management products and provides them with tailored value-added services. The Company provides asset management services via investment funds that it manages and also provides discretionary account management services and asset management-related advisory services to clients. For more information, please visit the Company’s website: http://ir.prestigewm.hk.

About InnoSphere Tech

InnoSphere Tech is a technology company that leverages its advantages in web scraping technology to collect data on finance, wealth management, and related industries according to international standards. Through the accumulation and processing of large amounts of data, its system can train a specialized large model tailored for the wealth management industry, providing robust foundational support to clients in the financial sector that surpasses traditional general-purpose large models.

About Wealth AI

Wealth AI is a company based in Singapore that offers personalized, cost-effective wealth management solutions using artificial intelligence. Founded by AI experts from top technology companies in 2022, Wealth AI is dedicated to the transformative potential of artificial intelligence in wealth management.

Forward-Looking Statements

Certain statements in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company’s current expectations and projections about future events that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Investors can find many (but not all) of these statements by the use of words such as “approximates,” “believes,” “hopes,” “expects,” “anticipates,” “estimates,” “projects,” “intends,” “plans,” “will,” “would,” “should,” “could,” “may” or other similar expressions in this press release. They include statements about the Company’s plans for the business of InnoSphere Tech and Wealth AI; anticipated financial and other results from the acquisition of InnoSphere Tech and Wealth AI and its integration into PWM; expectations regarding revenue and cost synergies resulting from the acquisition; discussion of other strategic initiatives and related actions; and beliefs, expectations, intentions and strategies, among other things. Forward-looking statements are based on management's current beliefs, expectations and assumptions, and involve a number of known and unknown risks and uncertainties, many of which are out of PWM’s control.

The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company’s filings with U.S. Securities and Exchange Commission.

FAQ

What is the purchase price for Prestige Wealth's acquisition of InnoSphere Tech?

The total purchase price is US$2.1 million, paid through 3.5 million newly issued Class B ordinary shares at US$0.60 per share.

When will PWM's acquisition of InnoSphere Tech close?

The acquisition is expected to close in the fourth quarter of 2024.

What warrants are included in the InnoSphere Tech acquisition deal?

The deal includes warrants to purchase 2,625,000 Class A ordinary shares at US$0.72 per share, exercisable after six months and expiring five years later.

Has Prestige Wealth (PWM) completed the acquisition of Wealth AI?

Yes, PWM completed the acquisition of SPW Global Inc., which owns Wealth AI PTE , on November 4, 2024.