EnerSpar Corporation (TSXV: ENER – $0.07 & Fra: 5E0 – €0.04), which is developing the exciting Johan Beetz feldspar property, has announced a potentially spectacular business combination with Blockstation, a Toronto based company that has developed a platform on which crypto-currencies are traded. If completed successfully, this transaction will be highly lucrative for existing EnerSpar shareholders.
Blockstation has developed a proprietary Electronic Communication Network, which provides Direct Market Access to traditional financial institutions to trade blockchain tokens such as Bitcoin and Ethereum. Blockstation targets market dealers, brokerage firms, hedge funds, high frequency trading desks and stock exchanges as its core clients.
There are 100 million active traders who do not yet have access to digital currencies in their traditional bank and brokerage accounts. Now thanks to Blockstation, those traditional financial institutions have the technical expertise and software to give their clients access to the crypto-currency marketplace.
If all goes as planned, EnerSpar will first execute a 30-for-1 reverse stock split on its existing common shares. As a result, the Company will have a little less than 800,000 shares outstanding.
Next, all of the existing assets and operations of EnerSpar – basically the Johan Beetz project – will be placed into a new subsidiary company. The shares of the new subsidiary will be spun out to EnerSpar’s current shareholders. The effect of this is that the existing EnerSpar business will continue for the sole benefit of the existing EnerSpar shareholders. The goal is to again publicly list this new entity as fast as possible. The current EnerSpar management team will continue to lead the successor company.
Subsequently, shareholders of Blockstation shares will receive one EnerSpar share for each one Blockstation share held, resulting in the issuance of approximately 42,000,000 EnerSpar shares at a deemed issued price of $1.00 per EnerSpar share for an aggregate ascribed value of approximately $42 million. This is a fair number, as Blockstation’s software was valued at $41 million a few months ago by a leading accounting and consulting firm.
Following the completion of the transaction, the Blockstation management team will take over the helm at the current publicly listed entity, and will most likely rename it to Blockstation.
There are a number of conditions that have to be met – such as shareholder and regulatory approval – before the EnerSpar/Blockstation transaction can be completed. This could take a few weeks. Until then, the EnerSpar shares are halted.
Investors who bought EnerSpar shares when we first recommended the Company, already made a 30% profit in less than 3 months. However, if the proposed transaction is consummated – and we have every reason to believe that it will be – shareholders will be rewarded even more.
They will have an equal number of shares as they have today in the spun-out entity that will carry on to develop the high potential Johan Beetz feldspar property, and in addition they will be a shareholder in Blockstation, which is active in the hottest sector of the decade.
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