TODAY'S PAPER
63° Good Morning
63° Good Morning
Business

Long Blockchain to take 9.9% stake in UK company instead of merging

The company formerly known as Long Island Iced Tea agrees with Stater Blockchain to cross-representation on both companies’ boards of directors.

Long Blockchain Corp. CEO Shamyl Malik on Feb

Long Blockchain Corp. CEO Shamyl Malik on Feb 21. Photo Credit: Long Block Chain Corp.

Farmingdale-based Long Blockchain Corp., which had signed a letter of intent to merge with Stater Blockchain Limited, instead will take a minority stake in that U.K. company, the companies announced Tuesday.

The new agreement calls for Long Blockchain — formerly known as Long Island Iced Tea Corp. — to acquire 9.9 percent of Stater in exchange for 9.9 percent of Long Blockchain common stock and cross-representation on both companies’ boards of directors.

Stater Blockchain chief executive Ramy Soliman was appointed to the board of Long Blockchain, and Shamyl Malik, chief executive of Long Blockchain, was named to the board of Stater Blockchain. Long Blockchain’s letter of intent to merge with Stater expired on Saturday.

The deal with Stater follows an agreement Thursday calling for Long Blockchain to acquire Hashcove Ltd., a London-based cryptocurrency and blockchain company in an all-stock deal. Under the merger, Hashcove will become a wholly owned subsidiary of Long Blockchain.

“As the expiration date of the letter of intent approached, both parties agreed that a minority investment with dual board representation would allow us to immediately formalize our partnership while maintaining our respective autonomy,” Malik said in a statement.

“We believe this combination of fintech and brokerage is a compelling value proposition, and we look forward to working with Long Blockchain to leverage our collective expertise,” Soliman said.

Stater Blockchain owns Stater Global Markets, a U.K.-based brokerage.

Shares of Long Blockchain, which has announced plans to spin off its iced tea business to shareholders, rose 7.8 percent Tuesday to close at $3.04.

A blockchain is a decentralized ledger of digital transactions, first employed in creating and verifying transactions of cryptocurrencies such as bitcoin. The technology, however, also can be applied to other purposes, such as recording property records, tracking pharmaceuticals or settling stock trades.

Cryptocurrencies are digital currencies that are not issued by a centralized bank or government. The coins are created by users who “mine” them by lending computing power to verify other users’ transactions. They receive coins in exchange.

More news