Fledgling tech outfit Long Blockchain Corp., best known for its bizarre rebrand from a regional beverage maker, has signed a letter of intent with Vancouver-based ECC Ventures 2 Corp., an investment company, to sell off its iced tea and lemonade subsidiary, Long Island Brand Beverages LLC.
According to an ECC news release from Thursday, as part of the sale, Long Blockchain will receive $500,000 Canadian dollars and 9.2 million shares in ECC after consolidation. The company will then likely "change its name to one suitable to Long Island Beverages." Since this is a reverse merger, the new beverage company will be listed on the TSX Venture Exchange, sister to the Toronto Stock Exchange.
Long Island Brand Beverages' parent company is certainly making moves to restructure and put picnic baskets in the past. Three days after the sale was arranged, on January 18, Long Blockchain Corp. entered into a restated loan agreement with Court Cavendish Ltd., a UK company that "deliver[s] operational and financial turnarounds of multi-site Social Care and Health Care organisations." (For the moment, Long Blockchain is, it appears, neither type of organization.)
Under that agreement, Long Blockchain Corp. converted $1,550,000 of principal owed to Cavendish under its existing loan, plus accrued interest, into 12.7 million shares in the company, valued at 20 cents per share. Long Blockchain paid the lender an additional $40,000 "to cover the costs of the negotiation and execution of the Restated Agreement." Long Blockchain still owes $740,000 to Cavendish, with interest assessed at an annual rate of 12.5 percent. It's possible that at least some of that sum will be paid with the earnings from the sale of Long Island Brand Beverages, though the loan doesn't mature (and need to be fully paid) until December 21.
Long Blockchain first began its transformation from a drink company in December 2017, but said that the beverage business would remain as a subsidiary. It's unclear, however, to what extent that subsidiary is operating. The company abruptly stopped posting on social media on December 14, 2017, and its blog hasn't been updated since May 12, 2017. The new company, at least for the moment, may not have much to sell. (Calls from ETHNews to both the subsidiary and parent company went to voicemail and were not returned by press time.)
Long Blockchain landed on the radar of the Securities and Exchange Commission last July, receiving a subpoena from the regulator. Since then, the company has made only one announcement, receiving scant coverage for a joint venture to "scale Entrex's industry leading blockchain-enabled alternative trading market." Entrex, on its news page, referred to Long Blockchain as a "public blockchain leader."
Whether or not that's true, its iced tea days may soon be officially behind it.