Belvedere to Become Blockchain Technology Company
OREANDA-NEWS. June 14, 2018. Belvedere Resources Ltd. (TSX-V:BEL) (the “Company”) is pleased to announce that it has entered into an arm’s length, binding letter of intent dated effective June 12, 2018 (the “LOI”) with BlockCoBuilders Inc. (“BlockCo”) to complete a business combination, whereby the Company has agreed, subject to certain conditions, to acquire all of the issued and outstanding securities of BlockCo (the “COB Transaction”). Upon completion of the COB Transaction, the combined entity (the “Resulting Issuer”) will continue the business of BlockCo. The COB Transaction is intended to constitute a “Change of Business” transaction pursuant to Policy 5.2 – Changes of Business and Reverse Takeovers (“Policy 5.2”) of the TSX Venture Exchange (the “Exchange”).
About BlockCo and its Business
BlockCo is a technology company incorporated under the Canada Business Corporations Act, with a focus on developing blockchain-based software technologies. Its first project is the development of a blockchain software application for trucking and logistics businesses. This trucking application aims to provide a low-cost software for small and medium sized trucking companies that either deliver or collect along the same or similar routes. This software allows those companies the ability to visualize their routes on a map and make changes digitally, rather than on paper, as many have done in the past.
BlockCo has a working demo of this trucking application and intends to begin releasing it to customers over Q3 / Q4 of 2018. It is believed this will be one of the first blockchain-based products to be sold in the market. Once the trucking application is operational, BlockCo expects to develop other blockchain-based software applications, targeting other industries.
"We are extremely pleased to announce the acquisition of BlockCo and the launch of Belvedere’s COB Transaction,” said CEO of the Company, Rufus Round. “Blockchain technology is more secure, transparent and costs less to develop than anything currently on the market. It will fundamentally improve the way digital networks function, software is built and businesses are run. BlockCo is at the forefront of this shift with practical, pioneering intellectual property. Together we will create a new generation of vastly improved software.”
The COB Transaction
Terms of the COB Transaction
The LOI is to be superseded by a definitive agreement ("Definitive Agreement") to be signed on or before August 31, 2018 (or such other date as is agreed to by the Company and BlockCo). The Company proposes to acquire all of the issued and outstanding common shares of BlockCo pursuant to the terms of the Definitive Agreement, in exchange for 16,600,000 common shares of the Resulting Issuer at closing of the COB Transaction. Pursuant to the COB Transaction, the shareholders of BlockCo will become shareholders of the Resulting Issuer. Given that the last closing price of the common shares of the Company (the “Company Common Shares”) prior to the issuance of this press release was $0.82 per share, aggregate consideration payable pursuant to the COB Transaction is deemed to be $13,612,000.
It is currently anticipated that the board of directors and management of the Resulting Issuer will be determined by mutual agreement between the Company and BlockCo, provided the Exchange does not object to such nominations and such persons are eligible to act as directors and officers pursuant to the applicable laws. Mr. Rufus Round will continue as CEO and a director of the Resulting Issuer and Ms. Alice Reimer will continue as a director of the Resulting Issuer (see the Company’s June 5, 2018 press release).
The COB Transaction is conditional upon, among other things:
(a) the parties entering into a Definitive Agreement in respect to the COB Transaction and any collateral issues or matters on or before August 31, 2018;
(b) the parties preparing a filing statement in accordance with the rules of the Exchange, outlining the terms of the COB Transaction;
(c) the parties receiving all requisite regulatory approval, including the approval of the Exchange, and any third party approvals and authorizations;
(d) the Company obtaining the requisite shareholder approvals for the COB Transaction, as applicable;
(e) the parties obtaining requisite board approvals for the COB Transaction;
(f) each of the parties required by the Exchange entering into an escrow agreement upon the terms and conditions imposed pursuant to the policies of the Exchange;
(g) the Company completing a private placement financing for minimum gross proceeds of not less than $2,000,000; and
(h) the Resulting Issuer meeting the applicable Initial Listing Requirements of the Exchange as a Technology Issuer (pursuant to Policy 2.1 – Initial Listing Requirements of the Exchange), including, without limitation, the public float requirements.
Prior to the completion of the COB Transaction, the Company will complete a private placement of securities for gross proceeds of no less than $2,000,000. The terms and pricing of such financing and the involvement of any agents has not yet been determined and will be dependent on various factors, including market conditions.
Sponsorship of the COB Transaction is required by the Exchange unless an exemption or waiver from sponsorship requirement is available. The Company is currently reviewing the requirements for and may apply for an exemption from the sponsorship requirements pursuant to the policies of the Exchange. The Company intends to include any additional information regarding sponsorship in a subsequent press release.
Policy 5.2 includes a requirement that an issuer obtain shareholder approval of a proposed “Change of Business” transaction before its completion. The Company intends to apply for a waiver of this shareholder approval requirement for the COB Transaction on the basis that: (i) the Company no longer satisfies the Tier 2 Continued Listing Requirement for “Activity” for the Company’s industry segment according to Exchange Policy 2.5 – Continued Listing Requirements and Inter-Tier Movement, and (ii) the Company no longer holds interests in mining properties and active mining operations.
The COB Transaction is not a non-arm's length transaction for the purposes of the policies of the Exchange.
Trading in the shares of the Company is presently halted. It is uncertain whether the shares of the Company will resume trading until the COB Transaction is completed and approved by the Exchange.
Pre-Closing Capitalization of the Company
As of the date hereof, the Company's authorized share capital consists of an unlimited number of Company Common Shares and an unlimited number of preference shares, issuable in series, of which 38,737,063 Company Common Shares and no preference shares are issued and outstanding.
Pre-Closing Capitalization of BlockCo
As of the date hereof, 448,755,000 common shares of BlockCo are issued and outstanding. No other securities convertible into or exchangeable for securities of BlockCo are outstanding and no other rights to acquire securities of BlockCo exist.
The percentage ownership and residence the control person of BlockCo is Tom Thompson of Vancouver, BC, who holds approximately 79% of the outstanding shares of BlockCo.
It is intended that the Resulting Issuer will be named “Helix Applications Inc.” or such other name as the parties may reasonably agree upon, and as approved by the Exchange.
It is proposed that BlockCo’s name will be changed to “Helix Accelerator Inc.” or such other name as the parties may reasonably agree upon.
The Company will issue additional press releases related to the final legal structure of the COB Transaction, financing terms, sponsorship, financial information regarding BlockCo, the names and background of insiders and proposed management and directors of the Resulting Issuer and other material information as it becomes available.