Treasure Global Inc. has entered into a significant $16 million service agreement with V Gallant SDN BHD, a Malaysian company, to acquire generative AI solutions and AI digital human technology services. The contract, effective from Monday, October 29, 2024, will extend through December 31, 2025.
Under the terms of the agreement, V Gallant will provide Treasure Global with a suite of advanced AI technologies, including both hardware and software components, aimed at enhancing the company's service offerings. The deal stipulates that the payment for the services will be made to V Gallant and/or its nominees.
The collaboration between the Delaware-incorporated Treasure Global, which operates in the business services sector, and V Gallant is set to commence immediately as of the date of the agreement. The agreement will remain in effect until the end of 2025, unless either party opts for early termination due to a breach or by mutual consent.
This move marks a substantial investment by Treasure Global into artificial intelligence capabilities, reflecting the company's commitment to integrating cutting-edge technology into its business model. The financial impact of this deal is substantial, considering the size of the investment relative to the company's operations.
The details of the agreement were outlined in a Form 8-K filed with the Securities and Exchange Commission on Friday, November 1, 2024. The 8-K filing provides investors and the public with information about significant events that may affect the company's financial condition or operations.
Investors and stakeholders in NASDAQ:TGL can refer to the full text of the agreement, which is attached as Exhibit 10.1 to the 8-K filing, for more comprehensive details on the terms and conditions of the service agreement.
This strategic partnership is likely to be closely watched by industry observers and competitors alike, as it may signal a shift in Treasure Global's operational strategy and its approach to leveraging technology for business growth.
In other recent news, Treasure Global Inc has been actively making strategic moves to strengthen its position in the competitive e-commerce market. The company recently announced a $6 million Share Purchase Agreement with Alumni Capital LP, a move that offers a flexible financing option that could support Treasure Global's growth initiatives and operational needs. The company also completed an at-the-market equity offering program, raising approximately $2.99 million in collaboration with H.C. Wainwright & Co., LLC, with the funds being used to support the company's growth and corporate initiatives.
In addition, Treasure Global has entered into a partnership with software development firm Octagram Investment Limited. This collaboration focuses on integrating interactive mini-game modules into the ZCity platform, which is expected to boost user engagement and contribute to the company's growth. The company also announced a strategic partnership with Credilab Sdn. Bhd., although the specifics of this agreement remain undisclosed.
Amid these developments, Treasure Global has seen several changes within its board of directors, with new members joining and several others departing. Notably, Carlson Thow has assumed the role of CEO. These recent developments highlight Treasure Global's ongoing efforts to strengthen its corporate governance and adapt to changing market conditions.
InvestingPro Insights
Treasure Global Inc.'s recent $16 million service agreement for AI technology comes at a critical time for the company, as reflected in its current financial metrics. According to InvestingPro data, TGL's revenue for the last twelve months as of Q4 2024 stands at $22.07 million, with a concerning revenue growth decline of -68.21% over the same period. This substantial investment in AI solutions could be seen as a strategic move to reverse this trend and create new revenue streams.
InvestingPro Tips highlight that TGL is "quickly burning through cash" and "not profitable over the last twelve months," which underscores the importance of this AI investment in potentially turning the company's fortunes around. The stock has also "taken a big hit over the last week," with a -20.27% price return, suggesting that investors may be cautious about the company's recent moves.
It's worth noting that TGL "holds more cash than debt on its balance sheet," which may have enabled this significant AI investment despite recent financial challenges. For investors seeking a more comprehensive analysis, InvestingPro offers 13 additional tips that could provide further insights into TGL's financial health and market position.
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