Benzinga | Aug 26, 2021 07:37AM EDT

Ecoark Announces Plan For Spin-Off Of Its Trend Discovery Subsidiary Into A New Independent, Publicly Traded Company

Ecoark Holdings, Inc. ("Ecoark" or the "Company") (NASDAQ:ZEST), today announced its plan to spin-off its subsidiary, Trend Discovery Holdings LLC, and its subsidiaries ("Trend") into a new independent publicly traded company through a pro rata distribution of Trend's common stock to Ecoark's shareholders.

Ecoark plans to distribute approximately 80% of the common stock of Trend to its shareholders as of a future record date to be determined upon completion of regulatory compliance. The Company, via its holding company model, plans to retain the remaining 20% ownership in Trend on its balance sheet. Ecoark's Board of Directors unanimously authorized management to proceed with the spin off.

The Company has retained Nason, Yeager, Gerson, Harris & Fumero, P.A. as legal advisor in connection with the spin-off, and has also retained its external auditor, RBSM LLP, to conduct a stand-alone audit of Trend. Brad Hoagland, CFA, Chief Financial Officer of Ecoark is expected to assume the role of Chief Investment Officer of Trend, while retaining the role of Chief Financial Officer of Ecoark until a long-term successor has been named. The transaction is expected to close in the calendar fourth quarter of 2021, subject to the satisfaction of customary conditions, and the effectiveness of a Form 10 registration statement to be filed with the Securities and Exchange Commission. The exchange listing is subject to meeting applicable listing requirements.

"We are constantly exploring opportunities to generate shareholder value, and firmly believe that this transaction unlocks a greater value of the Trend asset relative to its valuation as part of Ecoark's current portfolio," stated Randy May, Chief Executive Officer of Ecoark. "We believe, Trend will be positioned to excel in the FinTech market with the platform and resources of a pure-play, stand-alone publicly traded company."

Trend's current asset portfolio includes Trend Discovery Capital Management LLC, an investment management business, and Barrier Crest LLC, a fund administration and consulting business. Trend's revenue rose 64% for the first quarter of fiscal 2022 ended June 30, 2021, as compared to same period last year, and management expects Trend to build on this strong momentum in the coming quarters. Trend also recently announced the launch of Bitstream Mining LLC, which commenced development of a cryptocurrency mining beta site in Texas with the potential to help alleviate potential future imbalances on the electric grid. The company has already entered into agreements to purchase mining equipment and is on track to meet its previously announced timelines. Today, Trend is disclosing that it is in active discussions to acquire an already producing broker-dealer business and a business holding money transmitter licenses ("MTLs"). Additionally, Trend is exploring opportunities to acquire or merge with potential synergistic private and/or public FinTech businesses, which could occur simultaneous with or prior to the closing of the spin-off transaction.

"Trend is grateful for the opportunity to have incubated and grown its business under the Ecoark umbrella for the last two years," stated Brad Hoagland, CFA. "Now is an ideal and strategic time for Trend to expand and pursue growth opportunities as its own independent publicly traded company. We expect to announce a full rebranding of Trend in the coming weeks, including a number of innovative and differentiating business lines."