Red Anchor Trading Corp. responds to false allegations made by Axion Ventures Inc.

BANGKOK, Jan. 27, 2021 /CNW/ - Red Anchor Trading Corp., Nithinan Boonyawattanapisut and Todd Bonner jointly issue this press release to respond to recent allegations made by Axion Ventures Inc. (Axion), both in a press release dated January 14, 2021 and in a lawsuit recently filed in the British Columbia Supreme Court, in which Axion falsely claims ownership over the intellectual property rights associated with in-game advertising software called HotPlay.

Not only is Axion's claim to ownership over HotPlay false, but, as detailed below, it demonstrates the abject lack of knowledge that Grant Kim, Yasuo Yamazaki and Stephen Willey, the Axion board members behind the January 14, 2021 press release and civil claim, have about Axion's business and its investments.

Axion's misguided lawsuit indicative of lack of proper leadership      

Axion's shareholders should be troubled to see that Axion, under the current leadership of Kim, Yamazaki and Willey, would resort to the misguided strategy of apparently seeking to misappropriate Red Anchor's technology and intellectual property through baseless litigation. Such tactics are doomed to fail and are a waste of precious resources and expose Axion to significant risk.

Unbelievably, Kim, Yamazaki and Willey have chosen to spend Axion's limited cash on legal fees litigating against Red Anchor instead of:

1. Making their required public filings, including management discussion & analysis for any quarter in 2020;
   
   
2. Expediting the completion of Axion's audit for FY 2019 and taking steps to have Axion's cease trade order lifted for the benefit of all shareholders;
   
   
3. Assisting Axion portfolio companies with much-needed capital to fund payroll and product development; and
   
   
4. Calling an annual general meeting for 2020, which Axion failed to do in 2020 as required by law and TSXV rules.

Background to HotPlay

HotPlay is an in-game advertising technology that is based on and developed out of a predecessor platform called HotNow. As stated in the October 26, 2016 news release from Capstream Ventures Inc. (as Axion was known at the time), Capstream entered into an investment agreement with Red Anchor Trading Corp. (Red Anchor), "a company engaged in the business of developing an application known as "HotNow", which is a marketing automation platform for retailers to offer various promotions". By that investment agreement, Axion acquired 15% of the voting shares of Red Anchor.

Red Anchor began developing HotNow in or around 2014 as a platform to allow merchants to program marketing campaigns with various promotions including coupons. HotNow, which first soft launched in 2017, was always expected and intended to become a platform that would eventually be used to allow merchants to market to consumers within video games.

In or around 2017, Red Anchor began developing HotPlay as the extension of HotNow to enable in-game advertising. As marketing presentations for HotPlay note, HotPlay is "powered by HotNow" – its functionality is inextricably linked to HotNow, the platform on which HotPlay was developed and based.

Red Anchor is also the patent-holder for HotPlay's underlying technology. Pursuant to a patent application filed in 2019 and related to a provisional application filed October 10, 2018, Red Anchor applied, on behalf of inventors Mark Vange and Todd Bonner, for a patent entitled "Methods and Apparatus for in-Game Advertising". That patent, bearing publication no. US 2020/0114263 A1, was published on April 16, 2020.

Red Anchor has invested more than USD $16 million in the development of HotNow and HotPlay.

Axion has repeatedly acknowledged that HotPlay is owned by Red Anchor

Axion's own public disclosure recognizes that Red Anchor and HotNow own HotPlay. Per Axion's Q2 2019 MD&A (repeated in Q3 2019):

Red Anchor Trading/HotNow

Red Anchor operates HotNow, a marketing automation solution first launched in Thailand in 2017 that provides a solution for both merchants and users to connect. The platform provides merchants a means to reach relevant customers and users because it acts as a discovery app of local retailers, offering the user the hottest promotions in their area. HotNow gives merchants more control over their marketing activities by allowing them to control their content, timing, customer type, and proximity to their location.

The next development step remains focused on the expansion of core features into POS, CRM, and a customer loyalty program to help merchants further strengthen relationships with their customers. These new features are expected to enable the HotNow team to understand further user spending habits, which in turn is expected to allow the team to expand the revenue model into collecting service fees in the form of commission taken out from the top line of sales.

In addition, HotNow has expanded its ecosystem to capture other opportunities in retail, advertising and video games. Its new in–game–advertising technology platform called HOTPLAY, enables in–game assets to be changed in real–time according to audiences' demographics, preferences, and historical behaviours through machine learning and big data analysis.

Axion's own CFO, Peemtat Utsahajit, has directly acknowledged in correspondence with potential investors that HotPlay's in-game advertising platform belongs to Red Anchor.

Further, negotiations with third parties about potential collaborations involving Axion and Red Anchor have explicitly noted that Red Anchor controls the rights to both HotNow and HotPlay. Axion's marketing materials have repeatedly and consistently acknowledged that HotNow and HotPlay assets are owned by Red Anchor.

Axion's claim to ownership over the HotPlay IP is simply unsupportable.

AXION AND ITS SHAREHOLDERS DESERVE BETTER

It should be apparent to all Axion shareholders that Kim is not qualified to run a publicly-traded company. Indeed, it appears as though Kim may have misrepresented his educational qualifications to the TSX Venture Exchange, when in 2016 he completed an information form, supported by a sworn declaration, stating that he obtained a B.Sc from the Wharton School at the University of Pennsylvania (at the age of 16) and attended Harvard College. An investigation has recently cast serious doubt on whether Kim ever in fact obtained a B.Sc from Wharton and Harvard does not appear to have a record of his attendance. Bonner has notified the TSX Venture Exchange of these discrepancies and requested its intervention.

As noted in Bonner's prior press release, he has called on Axion to finally hold its AGM so that Axion's shareholders can give a properly-constituted board a mandate to do business and help the company achieve its potential. Although Kim, Yamazaki and Willey continue to refuse to call an AGM, Bonner and his affiliates will be seeking to requisition an AGM to be held as soon as possible. Bonner and his affiliates will also be commencing proceedings in the British Columbia Supreme Court to seek court intervention in order to correct the dysfunction currently being caused by the misconduct of Kim, Yamazaki and Willey pending the holding of an AGM.

Red Anchor and Bonner encourage Axion's shareholders to demand accountability and proper disclosure from their board of directors, and to require Axion to hold an annual general meeting as soon as possible. Axion's failure to hold an AGM is causing permanent damage to its business that must not be tolerated.

SOURCE Todd Bonner