Kodak 10-K Shares Insight into KodakCOIN Cryptocurrency and Relationship with Wenn Digital

Earlier this month, Kodak (NYSE:KODK) filed a 10-K with the Securities and Exchange Commission (SEC). Buried within the Kodak Annual Report was further details into Kodak’s relationship with Wenn Digital, KODAKOne and the KODAKCoin initial coin offering.

According to the filing, Wenn purchased a license from Kodak for $750,000 to use Kodak’s brand in conjunction with Wenn’s KODAKOne image rights management platform and Kodak branded cryptocurrency for a three-year period ending December 31, 2020.

Additionally, the money included  50,000 shares of Wenn common stock along with the right to 3 million KODAKCoin’s that will be issued at some point in the future.

To quote the filing:

“The cash, deemed value of the WENN stock ($1.25 million), and deemed value of the Tokens serve as an advance royalty to be credited against sales based royalties in the future.  The deemed value of the Tokens will be determined one year from their receipt, not to exceed $3 million.  The advance royalty is non-refundable.  No future sales-based royalty payment will be due until the advance royalty has been depleted.  Kodak is also entitled under the license agreement to receive 3% of any cryptocurrency coins issued by WENN in excess of 100,000,000 coins.  The common stock of WENN and the right to receive Tokens were recorded at immaterial amounts as of the date of the transaction and as of December 31, 2017.  Future changes in value of the common stock of WENN and the Tokens will be reported in Other (income) charges, net in the Consolidated Statement of Operations.  The WENN shares and Tokens received by Kodak are restricted securities under applicable securities laws and may only be resold if such sale is registered under applicable securities laws or an exemption from such registration is available.”

Kodak explained that Wenn is the developer of, and will own and operate, the KODAKOne platform.  WENN is also the issuer of the Kodak branded cryptocurrency, and Kodak will not receive any proceeds from the initial coin offering or other issuances by WENN of such cryptocurrency.

So the agreement with Wenn is an arms length transaction.

Wenn recently filed a Reg D 506c indicating its intent to raise up to $176.5 million in ICO. The filing also indicated that KODAKCoin will be using a SAFT structure or a Simple Agreement for Future Tokens.

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