In connection with the closing of the Transaction (the “Closing”), the Company:
- changed its name to “BLOCKStrain Technology Corp. » ;
- issued 35 million common shares upon conversion of subscription receipts issued in connection with the concurrent financing of the transaction, pursuant to which the company raised aggregate gross proceeds of $10.5 million; and
- appointed new officers and directors,
all as more fully described in this press release and in the Company’s filing statement dated May 10, 2018 (the “Filing Statement”) relating to the Transaction, which is available under the Company’s profile on SEDAR at www.sedar.com.
About BLOCKStrain Technology Corp.
BLOCKStrain is developing a comprehensive, community-driven cannabis genetic license registration and archive platform dedicated to making it safe and compliant for breeders and growers, large and small, to protect and publish their varieties in the public domain, while being remunerated and rewarded. . It has achieved this by using blockchain and cryptocurrency functionalities to create an ecosystem that encourages the contribution of genetics and intellectual property, combined with the security, authenticity and verification methods provided by modern computer technology. distributed ledgers.
BLOCKStrain combines traditional cannabis cultivation with modern crypto-technology to deliver a truly smart, people-powered platform. By being open and accessible to everyone, the platform should help shape the future adoption and authenticity of the cannabis industry. Through the use of a secure API network, BLOCKStrain enables test providers, culture facilities, application and software developers, research groups and major blockchain platforms to supply to easily create apps and solutions, helping to fuel technology and innovation for the cannabis industry as a whole. .
With compliance and regulation being a key priority for industry players, BLOCKStrain should also enable compliance with regulatory standards, while providing real-time visibility and collaboration of industry operations directly to enforcement agencies. enforce and regulate cannabis activity nationwide. It uses powerful supply chain and IoT technology to enable tracking of the movement of cannabis from genetics to sale, while ensuring the scalability of what is expected to become a globally marketed product.
BLOCKStrain was incorporated on November 22, 2017 under the laws of the Province of British Columbia. Its main activities are currently carried out in Canada. To date, BLOCKStrain has not generated any revenue from its activity.
Closing of the qualifying transaction
In connection with the closing, the company acquired all of the issued and outstanding common shares of BLOCKStrain, with BLOCKStrain becoming a wholly owned subsidiary of the company. The Company has issued one common share to each former shareholder of BLOCKStrain on a one-for-one basis. After completion of the transaction, the Company has 80,204,382 common shares issued and outstanding (on a non-diluted basis), of which approximately 9.3% of the shares (on a non-diluted basis) are held by insiders .
New Board of Directors and Management Team
As part of the closing, the Company welcomes a new board of directors and a new management team. The company will be led by Robert Galarza as chief executive and Tommy Stephenson as chief technology officer. Anthony Jackson will continue to act as the company’s chief financial officer and has also been named secretary. The Board of Directors of the Company will consist of Mr. Galarza, Mr. Jackson, Cameron Chell, Michael Kraft and Konstantin Lichtenwald. In connection with the closing, Quinn Field-Dyte and Von Torres have resigned from their respective positions as directors and officers, and the Company thanks them for their service in bringing the Company to completion of the transaction.
Closing of concurrent funding
Immediately prior to closing, the Company converted an aggregate of 35,000,000 subscription receipts previously issued under a non-brokered private placement for gross proceeds of $10,500,000 into common shares on a one-for-one basis. Proceeds from the concurrent funding are expected to be used for BLOCKStrain technology development and licensing, corporate and business development, blockchain and smart contract development, Smart Hub API development and for general working capital purposes. Shares issued upon conversion of the Subscription Receipts are subject to a hold period expiring four months and one day after the initial issuance of the Subscription Receipts in March 2018.
Allocation of stock options
In connection with the closing, the Company has agreed to grant an aggregate of 12,750,000 options to purchase Company stock, as of the date of the final stock exchange bulletin regarding the transaction, to certain consultants, directors, officers and advisors of the company. . Each of the options will be exercisable into one common share at a price of $0.30 per share for a period of five years following closing.
Of the options to be granted, 800,000 will be granted to Robert Galarza, Tommy Stephenson, Cameron Chell, Anthony Jackson and Michael Kraft, 100,000 will be granted to Konstantin Lichtenwald and the balance will be granted to certain employees of and consultants to, the Company. Each of the options will vest four months from the date of grant, except for a total of 200,000 which will be granted to Paula Arab and Gary Symons, the principal of Deep Incite Consulting Ltd., located in Kelowna, in British Columbia, which, subject to TSXV approval, the Company intends to retain investor relations services for a monthly fee of $9,000. These options will vest over 12 months, 25% every three months, in accordance with TSXV policies.
No securities of the Company (including, for greater certainty, shares issued to former shareholders of BLOCKStrain and upon conversion of subscription receipts) have been or will be registered under the United States Securities Act of 1933, as amended (the “US Securities Act”), or the securities laws of any state, district or commonwealth of the United States (as defined in Regulation S under US securities law). Accordingly, such securities may not be offered or sold, directly or indirectly, in the United States or to or for the account or benefit of a “US Person” (as defined in Regulation S of the US Securities Act). , absent an exemption from the registration requirements of United States securities law and applicable state securities laws. This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities described in this press release in the United States or in any jurisdiction where such an offer or sale would be unlawful. , or for the account or benefit of any United States Person or any person in the United States.
ON BEHALF OF THE BOARD OF DIRECTORS
Chairman and Chief Executive Officer and Director
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Disclaimer for forward-looking information
Certain statements contained in this release are forward-looking statements, which reflect management’s expectations regarding the Company’s future business plans. Forward-looking statements consist of statements that are not purely historical, including statements regarding beliefs, plans, expectations or intentions regarding the future. Forward-looking statements in this press release include statements relating to the expected benefits and impact on the cannabis industry as a result of BLOCKStrain’s technology, other statements regarding BLOCKStrain’s business, the expected date of resumption trading of the Company’s shares on the TSXV and the intended use of proceeds from the concurrent financing. These statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements, including that: the BLOCKStrain platform may not perform as intended ; the cannabis industry cannot use the BLOCKStrain platform once it is built; legislative changes may have a negative impact on the activities of BLOCKStrain; and other factors beyond the Company’s control. There can be no assurance that any of the events anticipated by the forward-looking statements will occur or, if they occur, what benefits the Company will derive therefrom. Readers are urged to carefully consider these factors when evaluating the forward-looking statements contained in this press release and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by these cautionary statements. These forward-looking statements are made as of the date hereof, and the Company disclaims any intention or obligation to publicly update any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as required. by applicable securities. laws.
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