NEW YORK, Aug. 15, 2018 /PRNewswire/ -- Spherix Incorporated (Nasdaq: SPEX) a technology development company committed to the fostering of innovation and monetization of intellectual property, today announced it has terminated its merger agreement with DatChat. After strategic meetings with DatChat, both organziations believe there is a more effective strategy that will have the best opportunity for long-term growth.
The Spherix Board of Directors determined that a strategic equity investment in DatChat will provide a better strategy for shareholders and allow Spherix to benefit from DatChat's platform and projected growth. This direction should also provide a larger potential upside without the integration risk inherent in a merger between the two entities.
Spherix will make an investment of $1,000,000.00 in DatChat at a valuation of $28MM. The investment will consist of $500,000 cash and the assumption by Spherix of certain DatChat employee salaries for a period of one year. Several other customary provisions along with a bilateral mutual release from the proposed merger have also been agreed to. More information can be found in the Company's 10Q that was filed with the SEC on August 14, 2018.
Mr. Anthony Hayes, CEO of Spherix stated, "We believe the timing of this investment is perfect amidst the backdrop of a rapidly-growing Cybersecurity sector and the ever-increasing threats to consumers' privacy and confidential information. We are enthusiastic with the prospects for DatChat's scaling business, and look forward to supporting DatChat's ongoing development."
Spherix is committed to advancing innovation by active participation in all areas of the patent market. Spherix draws on portfolios of pioneering technology patents to partner with and support product innovation. Spherix has acquired over 100 patents from Rockstar Consortium Inc., and several hundred patents issued to Harris Corporation, covering a variety of methods and components involved in switching, routing, networking, optical and telecommunication sectors.
Certain statements in this press release constitute "forward-looking statements" within the meaning of the federal securities laws. Words such as "may," "might," "will," "should," "believe," "expect," "anticipate," "estimate," "continue," "predict," "forecast," "project," "plan," "intend" or similar expressions, or statements regarding intent, belief, or current expectations, are forward-looking statements. While the Company believes these forward-looking statements are reasonable, undue reliance should not be placed on any such forward-looking statements, which are based on information available to us on the date of this release. These forward looking statements are based upon current estimates and assumptions and are subject to various risks and uncertainties, including without limitation those set forth in the Company's filings with the SEC, not limited to Risk Factors relating to its patent business contained therein. Thus, actual results could be materially different. The Company expressly disclaims any obligation to update or alter statements whether as a result of new information, future events or otherwise, except as required by law.
SOURCE Spherix Incorporated