Long Blockchain Corp., the American blockchain-focused entity, has entered into a definitive agreement for selling out its fully-owned beverage subsidiary, Long Island Brand Beverages.
On September 20, 2019, Long Blockchain corporate announced the news of its definitive agreement through a press release. The report revealed that the company is selling its beverage subsidiary, Long Island Brand Beverages to Canadian firm ECC2 Ventures.
According to the terms of the agreement between the two parties, ECC2 will acquire a 100% stake of Long Island Brand Beverages. The consideration given to Long Blockchain Corp will comprise of cash payment of CAD$500,000 along with newly-issued shares of ECC2 valuing 3,666,667. The share consideration will lie subject to working capital adjustment.
Long Island Brand Beverages works in the non-alcohol, ready-to-drink sector of the beverage industry under its renowned brand “The Original Long Island Brand Iced Tea.” On the contrary, ECC2 is a capital pool firm which is listed on the TSX Venture Exchange.
Andy Shape, the notable CEO of Long Blockchain Corp. shared that this partnership will facilitate the company to streamline its efforts on the loyalty operating a business. He stated that,
This transaction is a significant milestone for the Company, and following its close later this year, it will allow us to concentrate our efforts on our underlying loyalty operating business.
Shape further added that,
Our loyalty platform has experienced strong growth over the past year with new and existing customers, and we look forward to building on that progress through our partnership with Stran Promotional Solutions.
At the beginning of 2018, the former iced tea and lemonade producing firm revamped itself from Long Island Iced Tea to Long Blockchain. This rebranding turned out to be fruitful for the organization as its share price showed a whopping surge from as low as $5 million to nearly $70 million in a short span.
In April 2018, Long Blockchain was suspended from the Nasdaq for its low market capitalization. However, in a contrasting situation just after a few months from the delisting, the company was issued a subpoena by the Securities and Exchange Commission of the United States.
One of the reports that surfaced some time back in July this year stated that the Federal Bureau of Investigation or FBI is probing into the Long Island Iced Tea’s swap to blockchain technology to catch hold of proofs concerning insider trading and illicit activities of securities trading.