GlobalBlock Digital Asset Trading Ltd (TSX-V:BLOK, OTC:BLVDF) told investors that it has entered into a Business Disposition Agreement with GlobalBlock Ltd (GB UK) and the original shareholders and founders of GB UK to transfer GB UK and its digital asset broker business back to the founders.
In return, the company said the GB UK Founders will return the 48,450,000 common shares of GlobalBlock collectively held by them, which were originally issued to the founders when GlobalBlock acquired GB UK in 2021. It noted that the disposition transaction is considered a non-arm’s length transaction because it involves non-arm’s length parties.
“The company has determined that given the current environment surrounding digital assets and the expense and restrictions surrounding the operation of a digital asset broker business inside of a publicly listed entity, the digital asset broker business being operated by GB UK and its subsidiaries would best be served outside of a publicly listed entity,” GlobalBlock said in a statement.
“As a result, the GB UK Founders have agreed under the disposition transaction to privatize that business, and the company will be seeking alternative transactions and businesses to acquire or combine with,” the company added.
Key terms of the disposition transaction:
- At the closing of the disposition transaction, GlobalBlock will sell all of the shares of GB UK to the GB UK Founders in exchange for the return of 48,450,000 common shares of the company collectively held by the GB UK Founders;
- The agreement sets forth how the assets, liabilities and obligations of GlobalBlock and GB UK and its business are to be dispersed or transferred amongst the company and GB UK effective as of December 31, 2022, including the split of cash and liabilities, and the obligations of each of GlobalBlock and GB UK going forward;
- On closing, David Thomas will resign as CEO and director of the company and Patrick Bullman will resign as a director;
- On closing, GlobalBlock will provide a £150,000 loan facility to GB UK to assist with the transitionary phase and support GB UK’s business opportunities; and
- The Disposition Transaction is subject to the usual conditions to closing, but also includes the following conditions:
- Holders of options to acquire up to 1.5 million common shares of the company (those holders being David Thomas, Patrick Bullman and certain employees of GB UK) will have entered into agreements to terminate those options held by them; and
- Dissent rights in connection with the disposition transaction shall not have been validly exercised (and not withdrawn) with respect to more than 1% of the issued and outstanding common shares of the company.
Following the completion of the disposition transaction, GlobalBlock said its remaining assets will be cash and the blockchain patents it acquired in February 2021.
Accordingly, it noted that it will need to identify and, if successful, acquire or combine with a new business. Following discussions with the TSX Venture Exchange, it said it was advised that after completion of the disposition transaction, its listing may be transferred to the NEX Board of the exchange until it can so acquire or combine with a new business.
Upon completion of the transaction, the company said it will also need to identify and appoint a new CEO and at least one additional director.
Full details of the disposition transaction can be found here.
Contact the author at stephen.gunnion@proactiveinvestors.com
