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Block Commodities Ltd (BLCC)
Block Commodities Ltd: Convertible Loans and Cannabis Market Entry
27-March-2019 / 15:55 GMT/BST
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
Block Commodities
London, 27 March 2019
Convertible Loans and Cannabis Market Entry
Block Commodities Limited (NEX: BLCC), the innovative commodity trader
operating in Africa, is pleased to announce that it has raised a minimum of
GBP400,000 through the issuance of convertible loans ("Convertible Loans") to
support the Company's entry into the cannabis market.
New Commodity Opportunity: Entry into the Cannabis Market
The Board has identified an opportunity to enter the fast-growing legal
cannabis market as an operator of cannabis licences in jurisdictions where
this is legally permitted.
The global legal marijuana market is expected to reach USD 146.4 billion by
end of 2025, according to Grand View Research, Inc. In 2018, six new
countries announced legislation with patient numbers growing by 40% month on
month. Cannabis-based medicine is now legal in 22 countries in Europe
The potential number of medicinal cannabis patients in the UK is estimated
to reach as high as 2.9 million, underlining the growing long-term
opportunities available in this industry. Europe is poised to become one of
the world's largest cannabis, hemp and cannabidiol (CBD) importers. The
European medical cannabis market could be worth over EUR55bn by 2028.
Entering the cannabis market represents a strategic move for Block
Commodities. Leveraging on its existing connections in Africa, the Board
believes that the use of blockchain technology can add significant value to
the production and distribution of medicinal cannabis products.
The Company has worked to develop a number of opportunities to access the
development of medicinal cannabis in low-cost jurisdictions. This includes
options to acquire interests in cannabis licences in Sierra Leone, Lesotho,
Niger, and Malta, all of which can be formalised once sufficient capital is
raised.
To date, Block Commodities has entered into a Binding Contract with
shareholders of Greenbelt Company Limited to acquire a 100% interest ("Sale
Shares"). Greenbelt is the licence holder of over 4000 acres of farmland in
Sierra Leone which it leases to licensed retail cultivators. In November
2018, Greenbelt was granted a licence by the Sierra Leone Minister of
Agriculture and Forestry for medical cannabis production and processing.
Block Commodities plans to fast-track and streamline operations in Sierra
Leone as soon as the acquisition is finalised.
Subject to successful due diligence and the execution of transactional
documentation, Block Commodities has agreed to pay a premium of GBP 10,000
for a 90-day exclusive option to acquire the Sales Shares for a
consideration of GBP 4 million to be satisfied by the issue of new ordinary
shares at a price of GBP0.001 upon exercise of the option. This is at a
premium to the share price of Block Commodities Limited which was GBP0.0003
when the shares were suspended on 21 September 2018.
The acquisition will position Block Commodities as one of the first
UK-listed companies where its shares are traded on the NEX Exchange with
licenses to produce and process cannabis across Africa and in Europe.
Hassan Krayem, Director of Greenbelt has invested and supported local
farmers and commodities producers to increase their productivity and export
their products to the international market, providing jobs for hundreds of
people and also contributing to the socio-economic development of Sierra
Leone. He is currently based in the United Kingdom operating five companies,
with a distribution network in Europe, United States of America and
Australia.
Convertible Loans
The Convertible Loans entered into with new and existing institutional
investors are interest-free and will be converted into new ordinary shares
of no-par value in the capital of the Company at a conversion price of
GBP0.0007 per share, once the necessary shareholder authorities have been
obtained at the forthcoming General Meeting.
Upon conversion, each investor will also receive a warrant to subscribe for
a new ordinary share in the capital of the Company for each new ordinary
share issued on conversion, with the warrants being exercisable at an
exercise price of GBP0.0007 per warrant and with a term of one year.
The proceeds from the Convertible Loans will be used to finance the
acquisition of options to acquire interests in medicinal cannabis licences
and for general working capital purposes.
A notice to convene a General Meeting of the Company to be held as soon as
practical, to (amongst other matters) seek shareholder authority to convert
the Convertible Loans will be posted to shareholders no later than 1 April
2019.
Chris Cleverly, Chairman of Block Commodities commented: "I am very excited
to lead Block Commodities on this new path as one of the few UK companies
with cannabis licences. Today
we are delighted to welcome Greenbelt's cannabis assets to Block
Commodities. Cannabis is one of the world's most highly valued crops. We
have witnessed the success of companies like Canopy Growth and Aurora and we
are sure that cannabis as our primary crop will enable our commodity
financing, cultivation and distribution blockchain ecosystem to overcome
logistics, cost of money and other issues in Africa and benefit shareholders
for their support."
On the agreement with Block Commodities, Hassan Krayem commented: "Being
involved in agriculture in Sierra Leone for many years, working with many
different commodities, I believe medical cannabis represents a significant
commercial opportunity for our local farmers to commercialise their produce
and products. The cultivation of medical cannabis under our licences, along
with the partnership with Block Commodities, will allow us to place Sierra
Leonean farming in an international market."
About Block Commodities
Block Commodities' strategy is to maximise the value of African agricultural
and other commodities through the deployment of blockchain technology. The
resources will be linked through the vertical integration of primary
industries down to consumers via blockchain platforms. Using blockchain's
ability to dynamically incorporate all market participants into an efficient
ecosystem, Block Commodities aims to facilitate the commercial operation of
such ecosystems in the context of the agricultural production cycle.
In reclaiming the value lost in African agricultural and extractive
industries through inefficient supply and distribution systems, Block
Commodities aims to help sub-Saharan African farmers raise productivity and
secure better returns for their produce. Through the deployment of
disruptive technologies, Block is also developing strategies in the
fast-growing cannabis market.
For more information, visit: http://www.blockcommodities.com [1]
About Greenbelt Company Limited
Greenbelt Company is the licence holder of over 4000 acres of farmland in
Sierra Leone, Africa, which it leases to licensed retail cultivators.
Greenbelt presently holds agricultural and export licenses and participates
in a variety of products for domestic and international trade.
Directly focused on becoming a Pan African and Global leader in the
production of CBD extracts for medicinal purposes Greenbelt aim to be a
cornerstone in the global supply chain, operating from a stable, progressive
and low-cost jurisdictions in Africa.
For more information, visit: https://greenbeltcompany.com/ourvision
The Directors of the Company accept responsibility for the content of this
announcement.
For further information, please contact:
Block Commodities Limited
Chris Cleverly info@blockcommodities.com
NEX Exchange Corporate Adviser:
Alexander David Securities Limited
David Scott - Corporate Finance +44 (0) 20 7448 9820
James Dewhurst - Corporate Broking +44 (0) 20 7448 9820
Public and Investor Relations:
Cassiopeia Services - Stefania stefania@cassiopeia-ltd.com
Barbaglio
ISIN: GG00B4QYTJ50
Category Code: MSCH
TIDM: BLCC
Sequence No.: 7972
EQS News ID: 792591
End of Announcement EQS News Service
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(END) Dow Jones Newswires
March 27, 2019 11:56 ET (15:56 GMT)
