Long Blockchain Corp. announced that it has executed an agreement for a joint venture (the “Joint Venture”) with EHCo LLC, a holding company and the parent of Entrex Capital Market (“Entrex”), to scale Entrex’s industry leading blockchain-enabled alternative trading market.
The Joint Venture will provide a blockchain-enabled alternative trading platform for international and domestic investors to find, research, track, manage, trade, settle and service various asset classes. The Joint Venture will be led by Stephen H. Watkins, who has founded multiple businesses that use technology to consolidate decentralized business sectors. To further develop the relationship between Entrex and the Company, Mr. Watkins has also agreed to be appointed to Long Blockchain’s Board of Directors. Andy Shape, the Chief Executive Officer and a director of Long Blockchain, will serve as a manager of the Joint Venture, along with Mr. Watkins and a third, independent manager to be mutually designated by Entrex and Long Blockchain.
In connection with its formation, Entrex contributed to the Joint Venture all the intellectual property necessary to operate the alternative trading platform. Long Blockchain received a 10% equity interest and Entrex received a 90% equity interest in the Joint Venture. In addition, as consideration for the contribution of assets, Entrex will receive 20% of the cash received by the Joint Venture as revenues each month, up to a maximum of $57,000,000. If the Joint Venture fails to make a required payment of cash received as revenues, subject to certain conditions, Entrex will have the right to repurchase the previously contributed assets for nominal consideration. If the Joint Venture reaches $50,000,000 in revenues and $15,000,000 in EBITDA for any trailing 12 month period, Long Blockchain will have the right to acquire Entrex’s equity interest in the Joint Venture.
Read More: The Future of AI: Are Jobs Under Threat?
“Entrex’s mission is to provide exposure, credibility and liquidity for entrepreneurial companies and their investors,” commented Mr. Watkins. “We were honored in 2015 to have our broker dealer manage the first security to ever trade on a blockchain, Overstock.com’s TIGRcub Bond, and since then we have managed hundreds of securities trading on the Entrex IBM Hyperledger, which we believe will become one of the leading immutable ledgers.”
“We believe our partnership with Entrex will facilitate Long Blockchain’s transition into the blockchain industry by leveraging Entrex’s proven blockchain-enabled technology platform. Together, we will seek to scale the platform across a range of industries and types of assets, including interests in Opportunity Zone, cannabis and entertainment properties, as well as corporate bonds,” stated Mr. Shape.