Long Blockchain Corp., a Long Island company that made headlines by joining the cryptocurrency craze in 2017, has reached a tentative deal to be absorbed into a Massachusetts promotional products distributor.
Financial terms of the nonbinding deal announced Monday were not disclosed.
Andy Shape, chief executive of Long Blockchain and president of the distributor, Quincy-based Stran & Company Inc., said the companies hope to close the deal by year's end.
In December 2017, Farmingdale-based Long Island Iced Tea Corp. announced it was changing its name to Long Blockchain and would focus on the technology behind the digital currency bitcoin.
The company’s stock soared as high as $9.49 after the announcement, but the price has plummeted along with the price of bitcoin, the most prominent cryptocurrency, which peaked at around $20,000.
On Tuesday afternoon, Long Blockchain shares were trading at 19 cents, up 7.2 percent, while bitcoin was trading at about $9,370.
Shape said privately held Stran would enter the public markets through the merger with Long Blockchain, which trades over the counter.
"We're trying to get a definitive agreement signed within the next few weeks," said Shape.
He said the deal requires approval of Long Blockchain's board of directors, but does not need a shareholder vote. Long Blockchain's largest shareholder is U.K. investment firm Court Cavendish Ltd., with about 45.3 percent of shares outstanding, according to Bloomberg's compilation of government filings.
Stran, which operates under the name Stran Promotional Solutions, has more than 50 full-time employees and provides corporate clients with custom displays and promotional products.
For instance, Stran, founded 25 years ago, is providing ponchos for Sunday's TCS New York City Marathon bearing the imprint of the event sponsor, Tata Consultancy Services Ltd., Shape said.
In September, Long Blockchain announced a "definitive agreement" to sell the Long Island Brand Beverage LLC unit to Vancouver, Canada, investment firm ECC Ventures 2 Corp. for stock and $500,000 Canadian.
After the company adopted the Long Blockchain name, its iced tea business became a subsidiary.
In its most recent financial report, for the quarter ended Sept. 30, 2018, Long Blockchain posted a net loss of $742,642 on revenue of $827,146.
Scott Ackerman, CEO of ECC Ventures 2 and president and CEO of Vancouver-based Emprise Capital Corp., is expected to join the board of the iced tea company once the deal closes.
In a telephone call Tuesday, Ackerman said he was unable to discuss future plans for the Long Island Iced Tea business until the deal closes.
Bitcoin and other types of cryptocurrencies are digital currencies that are not controlled by a centralized bank or government and allow users to spend money anonymously.
Facebook has been seeking partners to join in the launch of its own cryptocurrency, Libra. Unlike bitcoin, Libra would be backed by a basket of currencies and debt securities.
In March 2018, HBO’s “Last Week Tonight With John Oliver.” lampooned Long Blockchain in a segment about companies that added "blockchain" to their name in an effort to get a boost in their stock prices.