Canadian Data Preserve Inc. (the “Company”) (CSE:DPC) is pleased to announce that it has entered into a definitive asset purchase agreement (the “Purchase Agreement”) pursuant to which it will acquire (the “Transaction”) certain equipment which can be utilized for blockchain based transaction verification as well as certain digital currency assets (the “Transaction Assets”). The Company intends to utilize the Transaction Assets to develop and market a payment processing system based on digital currencies.
Transaction
The Purchase Agreement was entered into with Blockcorp Sociedad Anonima (the “Vendor”) and Do Some Marketing Block Corp Canada Inc. (“DSMBC Canada”), each arm’s length parties to the Company. DSMBC Canada holds the rights to acquire the Transaction Assets from the Vendor, and has assigned those rights to the Company pursuant to the Purchase Agreement. In consideration for the acquisition of the Transaction Assets, the Vendor will receive 82,500,000 common shares (the “Consideration Shares”) of the Company, as constituted following completion of a five-for-one share consolidation (the “Share Consolidation”). Upon issuance, the Consideration Shares will be subject to an escrow arrangement from which they will be released in tranches every six months over a thirty-six-month period.
In consideration for the assignment of rights by DSMBC Canada, the Company has also agreed to acquire all of the outstanding share capital of DSMBC Canada. In furtherance of the acquisition, the Company, and its newly incorporated wholly-owned subsidiary, 1145394 B.C. Ltd. (“Subco”), have entered into an amalgamation agreement with DSMBC Canada (the “Amalgamation Agreement”). Pursuant to the Amalgamation Agreement, Subco and DSMBC Canada will amalgamate and the resulting entity will become a wholly-owned subsidiary of the Company. In consideration for the amalgamation, all of the outstanding common shares and convertible securities of DSMBC Canada will be exchanged for post-Share Consolidation common shares and convertible securities of the Company, on a one-for-one basis. All convertible securities of the Company issued in exchange for existing convertible securities of DSMBC Canada will be exercisable on substantially the same terms.
In connection with completion of the Transaction, the Company also intends to change its name to “Blockchain AXS Corp.”
Pending completion of filings with the Canadian Securities Exchange (the “Exchange”) in connection with the Transaction, trading in the Company’s common shares has been halted at the request of the Company. It is anticipated that trading will remain halted until the Transaction has been completed.
Completion of the Transaction is subject to a number of conditions, including the availability of financing, the completion of the Share Consolidation, the approval of the shareholders of the Company and DSMBC Canada, and the approval of the Exchange. The Transaction cannot be completed until these conditions are satisfied, and there can be no assurance that the Transaction will be completed in a timely fashion, or at all. Further information concerning the Transaction will be available in the listing statement being prepared by the Company for filing with the Exchange. Copies of the Purchase Agreement and the Amalgamation Agreement are available under the Company’s profile on SEDAR (www.sedar.com).
Management Changes
In connection with completion of the Transaction, it is anticipated that the Company will reconstitute its board of directors to consist of Mohammad Ahmad, Brian Cameron, Jon Malach, Marco Parente and Yasmine Roulleau. It is also anticipated that Mo Ahmad will be appointed President and Chief Executive Officer of the Company, and Brian Cameron will continue in the position of Chief Financial Officer.
Private Placement
In connection with the Transaction, the Company intends to conduct a non-brokered private placement (the “Financing”) of a minimum of 22,857,143 subscription receipts (each, a “Receipt”) at a price of $0.35 per Receipt. The proceeds of the Financing will be held in escrow pending the Company completing the Transaction. Upon completion of the Transaction, each Receipt will automatically convert into one common share of the Company, as constituted following completion of the Share Consolidation. All securities to be issued by the Company pursuant to the Financing will be subject to equal releases in 4, 8, 12 months from conversion. The Company may pay finders’ fees. The proceeds of the Financing are intended to be used in the development of the Company’s proposed payment processing system, purchase certain cryptocurrency mining machines and to satisfy working capital requirements of the Transaction.
On November 14, 2017, the Company closed a $100,000 subscription receipt financing by issuing 2,000,000 units at $0.05 per unit. Each unit consisted of one common share and one common share purchase warrant. Each warrant entitles the holder thereof to acquire one common share at $0.05 for a period of 12 twelve months from the date of issuance. The funds raised will be used for working capital purposes.
For further information, contact Brian Cameron at 480-922-5327 or bcameron@certive.com.
