CATALIST-LISTED Vividthree Holdings OMK : OMK 0%entered an exclusive 2-year partnership with JVS Management Holdings for Filecoin mining, with an option to acquire a 51 per cent stake in the partner for up to S$6 million.

Vividthree said in a bourse filing on Thursday (Jan 20) that the partnership will allow the digital content production house to participate in the growing demand for blockchain and digital assets, and will be "financially and strategically beneficial" for the group and its stakeholders.

Filecoin is a peer-to-peer blockchain network that stores large amounts of data on the Internet. It has a native cryptocurrency, FIL. Filecoin mining is a process where participants in the blockchain network contribute storage capacity to be used in deals with clients looking to store data.

According to Vividthree, JVS is in the business of operating specialised computer equipment. The company was incorporated on Jun 6, 2021 for the primary purpose of mining Filecoin and other blockchain-based cryptocurrencies in Singapore, and has been dormant since incorporation. JVS's shareholders are Lee Kwang Chee, Chew Kok Shang and Koh Huang Neng, who are also directors of the company.

Under the partnership, Vividthree has an exclusive option - valid for 2 years - to acquire 51 per cent of JVS on a valuation of up to S$6 million from its 3 existing shareholders. If Vividthree chooses to exercise this warrant during its term, it will hold 51 per cent of the total issued and paid up share capital of JVS.

Both Vividthree and JVS will jointly raise capital for the Filecoin mining partnership. Vividthree will contribute developmental costs while JVS will carry out the day-to-day administration of Filecoin mining, which includes acquiring, operating and maintaining the specialised computer equipment.

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The partnership and exercise of the warrant is not expected to have any material impact on the consolidated net tangible assets and earnings per share of Vividthree for its current financial year ending Mar 21, 2022.

Charles Yeo, managing director of Vividthree, noted the "relentless" acceleration in data production today and the increasing challenges faced by IT professionals to manage the storage of ever-expanding data files.

"Filecoin, with its decentralised storage services priced at a fraction of that offered by cloud storage solution vendors, meets this growing need in the industry. Our Filecoin mining partnership thus enables us to leverage on the global surge in data storage demand as well as this developing Web 3.0 megatrend," he said.

Vividthree closed flat at S$0.059 on Thursday, after the announcement, with 7.6 million shares traded.

READ MORE: Vividthree posts widening losses despite surging revenue