Item
2.01 Completion of Acquisition or Disposition of Assets.
As
described in Item 1.01 above, effective July 25, 2017, we acquired all the issued and outstanding shares of e-Marine pursuant
to the Exchange Agreement and e-Marine became our wholly-owned subsidiary. The acquisition was accounted for as a recapitalization
effected by a share exchange, wherein e-Marine is considered the acquirer for accounting and financial reporting purposes. The
assets and liabilities of e-Marine have been brought forward at their book value and no goodwill has been recognized.
At
the time of the acquisition, the Company was engaged in the online games business by acquiring gaming licenses in order to make
them commercially available abroad. As a result of the acquisition of all the issued and outstanding shares of common stock of
e-Marine, we have now assumed e-Marine’s business operations as our own. The acquisition of e-Marine is treated as a reverse
acquisition, and the business of e-Marine became the business of the Company.
e-Marine
Co., Ltd. was organized under the laws of the Republic of Korea on January 2, 2001, and is a leading Maritime Information and
Communications Technology provider in South Korea. e-Marine seeks to achieve safety of life at sea through the use of various
technologies, such as e-Navigation, Maritime Internet-of-Things (otherwise known as “I.o.T.”) and Marine Big data
technology (collectively, “Maritime ICT Convergence”. Its main products and services are divided into four categories,
which are Electronic Chart Display & Information System, or “ECDIS”, Smart Ship, Overseas Solutions Distributions
and Aids to Navigation.
Business
Overview and Plan
Pollex
is a holding company that, through its wholly-owned subsidiary, e-Marine, is a provider of information and communications technology
in the maritime industry. Specifically, e-Marine provides solutions for collection, integration and display of maritime information
abroad and ashore by electronic means to enhance berth to berth navigation and related services. These solutions provide the most
efficient means to secure the safety of life at sea and to protect the marine environment. All products and services are offered
through subscription, installation, updates and/or maintenance contracts.
Our
Products
e-Marine’s
main products and services are divided into four categories: (i) Electronic Chart Display & Information Systems, or ECDIS;
(ii) Smart Ship; (iii) Overseas Solutions Distributions; and (iv) Aids to Navigation.
Electronic
Chart Display and Information Systems
ECDIS’ hardware and basic software provides
display monitor that shows digital chart and other information generated by linked-systems, such as Radar, GPS and echo sounder.
ECDIS standards are regulated by IMO and only the software and solutions are subjects to patents. Regarding ECDIS, e-Marine
obtained several software and solution patents. e-Marine also continuously provides ECDIS maintenance services to an
average of 200 navy vessels annually, with contracts renewed every one to two years.
e-Marine has been the leading provider
of ECDIS in Korea, constantly supplying and operating maintenance service for Navy, Coast Guard, other public and commercial ships.
e-Marine holds 90% market share in South Korea, including Navy, Coast Guard and Ministry of Ocean and Fisheries.
Smart
Ship
We believe that I.o.T. is one of the key fields
of any information technology based business and we further believe that the maritime industry will heavily rely on it. I.o.t
technologies enable “things”, such as equipment, people, and goods to inter-connect through wireless technology. As
such, marine I.o.T. has been e-Marine’s top priority because we believe it is an important factor in achieving “Smart
Ships.”
e-Marine has been developing Smart
Ship technology under the exclusive partnership with Hyundai Heavy Industries. This partnership has resulted in a number of products
that are supplied to Hyundai ships by e-Marine, particularly.
|
1.
|
ISIG
(Intra-Ship Integrated Gateway)
|
Transferred from Korean ETRI (Electronics
and Telecommunication Research Institute), ISIG has become one of the most important technologies e-Marine has obtained.
Consisting of both hardware and software, its main function is to send data collected from a fleet via Smart-Sensing Technology
to ground control. ISIG is the device that mostly embodies the key idea of Vessel I.o.T. Platform. e-Marine supplies average 50
ISIGs to Hyundai Heavy Industries per year and the numbers are growing.
|
2.
|
Collision
Avoidance System
|
The Collision Avoidance System was
developed by e-Marine in collaboration with Hyundai Heavy Industries. It analyzes potential dangers, calculates the probability
of collision, and recommends a route and a heading to avoid such danger. The system is displayed above digital chart displayed
on ECDIS monitor, and it complements mariner’s decision making process.
e-Marine has acquired the patent to the core technology
of the Optimal Voyage System, which assists mariners to navigate safely and efficiently with safer and faster routes the solution
informs. While displaying the most efficient route, the solution might come across weather disaster at one point of the route;
the solution then switches over to its next best route option avoiding the dangerous area. Again, the information is displayed
on the chart to support mariner’s navigation.
|
4.
|
RMS(Remote
Maintenance System)
|
The RMS serves two main functions
(i) it automatically predicts and detects failures in a ship’s equipment, system and machinery and reports
it to operators, and (ii) it continuously monitors status of all parts of a ship and provides relevant information to the operators
on shore. RMS utilizes marine Big Data technology and also provides 3D modeling of ship and its parts, and software patch for
remote maintenance.
|
5.
|
Engine
Monitoring System
|
Engine Monitoring System collects status information
of a ship’s engine in real time. As the collected information is processed in a customized database, the operator can monitor
the organized information through a web-based software installed on a ship’s bridge or control center on shore.
|
6.
|
Fleet
Management System
|
We believe that the main beneficiaries of FMS are shipping
companies because it allows such to easily determine the location of vessels, and also determine its intended destination, the
weather during transit, and fuel usage. In addition, it stored information with respect to the cargo of the vessel, and allows
the operator to track and monitor such vessel. We believe that when this information is accumulated, it may be used in effective
ways such as calculating average usage of fuel in certain weather conditions, and evaluating captains’ abilities to navigate
with fuel efficiency. The more data is accumulated with the system, the more beneficial it will become.
We believe that eco-Ship solution is the ultimate fruition
of Marine Big Data, and the solution upholds its value only by big data, collected by related systems and solutions. The following
two main facts have led e-Marine’s interest in the development of Eco-Ship solution:
Fuel
Saving
-
Fuel consumption cost consists 40% of the total vessel operation cost; with Eco-Ship solution, the fuel can be saved up to 10%.
-
With the data collected, the solution calculates four main variables fuel consumption depends on: trim, speed, engine, and route,
plus the real-time weather information.
-
The analyzed optimal information is displayed on monitors to support mariner’s decisions.
IMO
Regulations
-
IMO has addressed policies regulating hazardous chemical emission from vessels around the globe.
-
Ozone depletion material, NOx gas, SOx gas, carbon, etc. are subject to regulations.
-
Currently ECA (Emission Control Area) Zone has been created in Baltic, North, and North American seas; and more ECA Zones are
to be designated in the near future.
-
The emission of these materials is directly related to the fuel usages; therefore, less vessel fuel consumption will solve most
of the emission problems.
-
Knowing this, IMO has strongly recommended fleets to use the solution or ones similar.
Overseas
Solutions Distribution
e-Marine has agreements with a number of
manufacturers of admiraly navigation and other related products, which grant e-Marine both exclusive and non-exclusive distributorship
rights for the sale of various maritime-related products, including navigational charts, software and hardware in Korea. Pursuant
to the an agent agreement with Hatteland Display AS (“Hatteland”), a worldwide leading maritime-specialized hardware
manufacturer, e-Marine has been appointed the exclusive distributor of Hatteland’s products. These agreements allow e-Marine
to generate revenue with minimal operational resources through its established distribution channels.
Aids
to Navigation
While Vessel I.o.T. Platform focuses on data
generated on-board, our A2N I.o.T. Platform focuses on data generated from the environment around the shore. e-Marine’s
A2N I.o.T. Platform consists of various devices that may be attached to navigational aids that collects and transfers data to
the control tower, on shore.
e-Marine has implemented a numbers
of Aids to Navigation and maritime weather signals module and software. Currently, e-MARINE’s Aids to Navigation solutions
are installed and operated in eleven out of thirteen maritime offices in South Korea.
Our
Aids to Navigation Systems consist of the following:
|
1.
|
Maritime
Weather Signals Total Management System
|
This system collects weather signals in various format
(AIS, CDMA, TRS) and displays organized information such as tidal height, wind directivity, wind speed and sea temperature. The
collected weather information is may also be transmitted to all major ports and maritime offices for public and civic use.
e-Marine
has implemented over a dozen maritime information systems in major port cities such as Busan, Incheon and Ulsan. e-Marine is currently
in the process of implementing Total Management System which gathers all maritime weather information to one central center; National
Maritime PNT Office. When e-Navigation initiates the System will be the backbone of developing the Total Maritime Traffic System
in future.
In
the past, mariners depended only on light houses and buoy as navigational aids along the ocean shore. Unmanned light houses and
buoys are typically powered by batteries, and were manually inspected in order to determine whether any issues can cause it to
malfunction.
e-Marine’s
e-A2N device is intended to automate the detection of issues that may cause navigational aids to malfunction and is a device that
is attached to aids to detect and send real-time data such as battery status and weather conditions to ground control. Through
this device, unnecessary man power and cost could be saved, while providing other benefits such as assisting crews, passengers,
pilots, and seafarers with weather information display on port dashboards and smartphone applications. e-Marine has begun to install
e-A2Ns to over 4,000 navigational aids in Korea.