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LONDON - VivoPower International PLC (NASDAQ:VVPR), a sustainable energy solutions company trading at $0.79 per share with a market capitalization of $3.29 million, has announced plans to spin off its subsidiary, Caret Digital, through a direct listing on the Nasdaq Stock Market. According to InvestingPro data, the company has seen a notable 14.1% price return over the past week, despite falling over 50% in the past year. The strategic move, which aims to distribute dividend shares to VivoPower shareholders, will see them receive five shares of Caret Digital for each VivoPower share held, with the proposed transaction implying a market capitalisation for Caret Digital of $250 million. This comes as VivoPower faces significant financial challenges, with InvestingPro analysis showing a concerning financial health score of 0.71 (labeled as WEAK) and a substantial debt burden of $29 million.
Caret Digital’s business focus will be on the mining of Dogecoin (DOGE), with plans to convert the mined DOGE into Bitcoin (BTC) to optimize returns. This decision aligns with the subsidiary’s strategy to capitalize on the favorable economics of DOGE mining and the subsequent yield enhancement from BTC.
The direct listing route was chosen over a reverse merger for its cost-effectiveness and efficiency. Additionally, Caret Digital intends to raise $10 million from strategic investors to support its growth initiatives. The record date for the distribution of dividend shares to VivoPower shareholders will be announced in the future.
This corporate action follows VivoPower shareholder approval during the Annual General Meetings held in December 2023 and December 2024, where authorization was given for mergers or divestments that align with the company’s strategic objectives. The company’s financial metrics reveal pressing challenges, with revenue declining by 99.35% in the last twelve months and a negative EBITDA of $7.48 million. Get access to 16 additional key insights about VivoPower’s financial health with InvestingPro.
VivoPower, established in 2014 and listed on Nasdaq since 2016, is recognized as a B Corporation and focuses on providing decarbonization solutions including electric vehicle applications and related energy services. Caret Digital, as a wholly owned subsidiary, has been developing renewable power infrastructure integrated with high energy consumption use cases, such as sustainable blockchain operations.
The success of the spin-off is contingent upon market conditions and there is no certainty that the proposed transaction will be completed as planned. This move is part of VivoPower’s broader strategy to optimize its portfolio and enhance shareholder value, particularly crucial given its current ratio of 0.3, indicating potential liquidity challenges.
The information in this article is based on a press release statement from VivoPower International PLC.
In other recent news, VivoPower International PLC announced several significant developments impacting its business strategy and operations. The company has entered into a five-year agreement with Associated Vehicle Assemblers Ltd. to distribute and assemble Tembo electric utility vehicles across East Africa, aiming to convert 200 vehicles in the first year and a total of 1,600 over five years. This partnership is expected to strengthen Tembo’s presence in the region. Additionally, VivoPower has initiated Dogecoin mining operations through its subsidiary Caret Digital, with potential annual revenues of up to $25 million, although these figures are subject to market fluctuations.
Caret Digital is also expanding its renewable-powered mining capacity, which could potentially generate up to $150 million annually. Furthermore, VivoPower secured a CAD$140 million investment commitment for Caret Digital from GEM Global Yield LLC SCS, contingent on a Canadian stock exchange listing. This funding will support Caret Digital’s Power-to-X strategy, focusing on renewable energy and high-energy consumption applications. VivoPower’s shareholders have approved the potential spin-off of Caret Digital and a special dividend, aligning with the company’s sustainability goals.
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