VANCOUVER, March 6, 2019 /CNW/ - BLOCKSTRAIN TECHNOLOGY
CORP. (TSXV: DNAX; OTC: BKKSF) ("BLOCKStrain" or
the "Company") is pleased to announce that it has
entered into a letter of intent (the "LOI") dated
February 28, 2019 with Spark Digital
Technologies Inc. ("Spark"). Under the terms of the LOI, the
parties have agreed to finalize and enter into a definitive
agreement, whereby the Company will acquire all of the issued and
outstanding securities of Spark and the business of Spark (the
"Acquisition"). In consideration for the Acquisition, the
LOI contemplates the issuance of 15,000,000 common shares in the
capital of the Company to the shareholders of Spark at a deemed
price of $0.26 per share.
About Spark
Spark is the owner of its proprietary platform, IgnitePro™,
which was built exclusively for the cannabis industry. The
highlights of the IgnitePro™ software platform include:
- secure infrastructure powered by Microsoft Azure;
- robust APIs and web services for integration;
- inventory management and IgnitePro™ Smart Serialization™;
- document management, regulation and compliance reporting;
- a mobile companion app for tracking and monitoring; and
- sophisticated machine learning & AI capability.
The IgnitePro™ technology is connected globally and will be able
to travel with cannabis plants and products as they move from
cultivation to distribution. IgnitePro™ will produce reports, store
documentation and track transports, and, when combined with
Blockstrain, is expected to ensure regulation and compliance
standards are being met and protected on the blockchain.
Terms of the Acquisition
The parties have agreed to undertake good faith efforts to enter
into the definitive agreement on or before April 29, 2019. Entry into the definitive
agreement and the closing thereof is subject to certain conditions
including completion of each party's satisfactory due diligence
review of the other and receipt of all necessary regulatory
approvals, including those of the applicable stock
exchange. The Acquisition is a non-arm's length transaction as
Robert Galarza, the CEO of
BLOCKStrain, is also a director and a controlling shareholder of
Spark, and Tommy Stephenson, the
Chief Technology Officer of BLOCKStrain, is also a director and
controlling shareholder of Spark. The Acquisition is expected to
constitute a reviewable transaction in accordance with Policy 5.3
of the TSX Venture Exchange. Upon closing of the Acquisition, it is
expected that the former shareholders of Spark will hold
approximately 15.8% of the outstanding common shares of the
Company.
The Acquisition is expected to constitute a "related party
transaction" as defined in within the meaning of Multilateral
Instrument 61-101 Protection of Minority Security Holders in
Special Transactions ("MI 61-101") as Robert Galarza, the CEO of BLOCKStrain, is also
a director and a controlling shareholder of Spark, and Tommy Stephenson, the Chief Technology Officer
of BLOCKStrain, is also a director and controlling shareholder of
Spark.
Each issuance of Consideration Shares to a related party will be
considered a "related party transaction" within the meaning of MI
61-101 but it is expected that each will be exempt from the
valuation requirement of MI 61-101 by virtue of the exemption
contained in section 5.5(b) as the Company's shares are not listed
on a specified market and from the minority shareholder approval
requirements of MI 61-101 by virtue of the exemption contained in
section 5.7(a) of MI 61-101 in that the fair market value of the
consideration of the shares issued to each related party will not
exceed 25% of the Company's market capitalization.
None of the securities issued in connection with the Acquisition
will be registered under the United States Securities Act of
1933, as amended (the "1933 Act"), and none of them may be
offered or sold in the United
States absent registration or an applicable exemption from
the registration requirements of the 1933 Act. This press release
shall not constitute an offer to sell or a solicitation of an offer
to buy nor shall there be any sale of the securities in any state
where such offer, solicitation, or sale would be unlawful.
On behalf of the board of directors of BLOCKStrain Technology
Corp.
Robert Galarza
Chief Executive Officer
Phone Number: (844) 656-3629
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 press release.
Forward-Looking Information: This press release may include
forward-looking information within the meaning of Canadian
securities legislation, concerning the business of the Company.
Forward-looking information is based on certain key expectations
and assumptions made by the management of the Company, including
the statements regarding: the entry into a definitive
agreement; the consideration to be payable in connection with the
closing of the Acquisition; the percentage of the shares of the
Company the former shareholders of Spark will hold following the
closing of the Acquisition; the benefits of combining the
businesses of Spark and the Company; exemptions from the valuation
and minority shareholder approval requirements contained in MI
61-101; and the terms of Acquisition. Although the Company
believes that the expectations and assumptions on which such
forward-looking information is based are reasonable, undue reliance
should not be placed on the forward-looking information because the
Company can give no assurance that they will prove to be correct.
Forward-looking statements contained in this press release are made
as of the date of this press release. The Company disclaims any
intent or obligation to update publicly any forward-looking
information, whether as a result of new information, future events
or results or otherwise, other than as required by applicable
securities laws. There can be no assurance that such statements
will prove to be accurate and actual results and future events
could differ materially from those anticipated in such statements.
Important factors that could cause actual results to differ
materially from the Company's expectations include: that the
applicable stock exchange may not approve the Acquisition as
proposed or at all; that the parties may not enter into a
definitive agreement in connection with the Acquisition; that the
parties may not be able to satisfy the conditions to closing of the
Acquisition; adverse market conditions; and other factors beyond
the control of the parties. The reader is cautioned that
assumptions used in the preparation of any forward-looking
information may prove to be incorrect. Events or circumstances may
cause actual results to differ materially from those predicted, as
a result of numerous known and unknown risks, uncertainties, and
other factors, many of which are beyond the control of the Company.
The reader is cautioned not to place undue reliance on any
forward-looking information contained in this news release.
SOURCE BLOCKStrain Technology Corp.