Atlas Blockchain Announces Definitive Agreement for the Acquisition of Isracann and Amendment to Investor Services Agreement

THIS NEWS RELEASE IS NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES FOR DISSEMINATION IN THE UNITED STATES

VANCOUVER, British Columbia, March 18, 2019 — Atlas Blockchain Group Inc. (CSE: AKE) (XFRA: A49) (OTCPINK: ATLEF) (the “Company” or “Atlas”) is pleased to announce, further to its news release on October 11, 2018, the Company has entered into a definitive share exchange agreement dated March 12, 2019 (the “Share Exchange Agreement”), pursuant to which the Company has agreed to acquire all of the issued and outstanding common shares (the “Isracann Shares”) in the capital of Isracann Biosciences Inc. (“Isracann”), a private British Columbia company, from the shareholders of Isracann (the “Isracann Shareholders”), subject to the conditions set out in the Share Exchange Agreement (the “Transaction”).

The Isracann Shareholders are expected to receive approximately 47,180,000 post-Consolidation (as defined below) common shares in the capital of the Company (the “Atlas Shares”) at a deemed price of $0.50 per Atlas Share on a pro-rata basis. For further information related to the Consolidation, please see below under the subheading “The Consolidation”. Subject to the fulfillment of the conditions precedent set out in the Share Exchange Agreement, including receipt of the approval the applicable stock exchange and shareholders of the Company, the Transaction is expected to close in late June 2019, or such date as the Company and Isracann may agree.

Upon successful completion of the Transaction, the Company will continue the business of Isracann.

Isracann Biosciences Inc.

Isracann is operationally located in Israel, which aims to embark on an industrial-scale cannabis farming enterprise targeting both domestic and international commercial opportunities. The venture holds rights to prime agricultural land with preexisting production permits equivalent to Canadian ACMPR cultivation licensing, where it anticipates building 230,000 square feet of cultivation room. Israel has been a leader in cannabis research for over 50 years and further enjoys extremely favorable climatic conditions, both of which strategically factor into premium product development opportunities. Proximally located to Europe’s undersupplied markets ideally situates Isracann with potential access to a consumer base, which based on population alone, is larger than the size of the USA and Canada combined.

The Transaction

The Share Exchange Agreement contains a number of conditions precedent to the closing of the Transaction (the “Closing”), including the completion of the Consolidation of the Atlas Shares, completion of customary due diligence, receipt of all necessary regulatory, corporate and third party approvals, compliance with all applicable regulatory requirements, and all requisite board and shareholder approvals being obtained.

The Consolidation

Prior to the completion of the Transaction, it is a condition that the Company consolidates its issued and outstanding share capital at a ratio equal to three old Atlas Shares for one new Atlas Shares being outstanding following such consolidation (the “Consolidation”). The Atlas Shares to be issued in connection with the Transaction will be issued on a post-Consolidation basis.

The Atlas Shares issued in connection with the Transaction may be subject to escrow conditions and/or resale restrictions as required by applicable securities laws and the policies of the Exchange.

Subscription Receipt Financing

Prior to the completion of the Transaction, it is a condition that the Company completes a financing of at least $5 million prior to Closing. On January 11, 2019, the Company completed the first tranche of its subscription receipt financing for total gross proceeds of $5.2 million. The Company intends to close another tranche prior to the completion of the Transaction. See the news release on January 14, 2019 for further details concerning the subscription receipt financing.

Bridge Loan

On March 6, 2019, Atlas entered into a bridge loan agreement with Isracann in the aggregate principal amount of $200,000. The bridge loan is secured by a promissory note. In the event closing of the Transaction occurs on or before December 31, 2019, the bridge loan will bear no interest and be forgiven upon closing. In the event closing does not occur on or before December 31, 2019, the bridge loan will become immediately due on demand, and will bear interest at a rate of 2% per annum.

Board of Directors and Management

In connection with the Transaction, it is anticipated that Charlie Kiser, Fred Stearman and John Veltheer will resign upon Closing and the following people will be appointed or continue as directors or officers of the Company:

Darryl Jones – President, CEO and Director

Mr. Jones has over 15 years of capital market experience and an established financial network. Prior to joining Isracann in 2018, Mr. Jones was an Investment advisor with PI Financial Corp. and Raymond James Ltd. for close to 10 years. He was responsible for raising significant risk capital for growth companies in all sectors, with a particular focus on medical cannabis and natural resources. Mr. Jones took True Leaf Medicine International Ltd. public in early 2014 at a $10.0 million valuation and exited in 2016 at a market capitalization of $150.0 million.

Yana Popova – CFO, Corporate Secretary and Director

Ms. Popova has over 12 years of accounting experience working with private and public companies. Throughout her career, she has acted as an accountant to multiple public companies. Ms. Popova is a director of several public companies.

Ms. Popova holds a Bachelor of Commerce and Economics degree from the University of Toronto.

Sean Bromley – Director

Mr. Bromley works in corporate finance as a consultant. He is a former investment advisor with a number of years’ experience working with public companies. Mr. Bromley is a director of several TSX Venture and CSE listed companies.

Mr. Bromley holds a Bachelor of Commerce from the University of Calgary.

Desmond Balakrishnan – Director

Mr. Balakrishnan is a Vancouver lawyer and has practiced law as a partner at McMillan LLP since February 2002. His areas of practice focus on mergers, acquisitions, listed company maintenance, international public listings, gaming and entertainment law. He graduated from the University of Alberta in 1997 with an LL.B (with distinction) and was called to the bar in British Columbia in 1998. Mr. Balakrishnan is now, or has been in the last five years, a director or officer of 13 public companies or reporting issuers.

Mark Zegal – Director

Mr. Zegal has worked with several major companies in the US. He started out as a member of the Chicago Board Options Exchange (CBOE) and continued as a leading investor in creating successful companies. He was also one of the founders of Brainstorm Cell Therapeutics Inc. (NASDAQ: BCLI), Pluristem Therapeutics Inc. and RADA Electronic Industries Ltd.

Israel Moseson – Chief Operating Officer – Israel

Mr. Moseson has comprehensive experience in the field of infrastructure development in Africa, ownership of an advertising company in Israel and entrepreneurship in a number of real estate projects.

Mr. Moseson has comprehensive experience in the field of infrastructure development in Africa, ownership of an advertising company in Israel and entrepreneurship in a number of real estate projects.

Invictus Investor Relations Inc.

Invictus Investor Relations Inc. (“Invictus”) has been providing investor relations services to the Company since December 2017. In consideration of the level of service Invictus has provided with respect to the subscription receipt financing and the Transaction, the Company has agreed to increase Invictus’s compensation from $6,000 per month to $11,000 per month effective March 1, 2019. Upon closing of the Transaction, the Company intends to enter into a new agreement with Invictus.

Disclosure and Caution

Additional information in respect of the Transaction will be included in the Company’s listing statement to be filed in connection with the Transaction and which will be available on the Company’s SEDAR profile at www.sedar.com.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful. None of the securities to be issued pursuant to the Transaction have been or will be registered under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”), or any state securities laws, and any securities issued pursuant to the Offering are anticipated to be issued in reliance upon available exemptions from such registration requirements pursuant to Rule 506(b) of Regulation D and/or Section 4(a)(2) of the U.S. Securities Act and applicable exemptions under state securities laws. In addition, the securities to be issued pursuant to the Transaction under an exemption from the registration requirements of the U.S. Securities Act will be “restricted securities” as defined under Rule 144(a)(3) of the U.S. Securities Act and will contain the appropriate restrictive legend as required under the U.S. Securities Act. Any public offering of securities of Atlas to be made in the United States must be made by means of a prospectus containing detailed information about Atlas and management, as well as financial statements.

ON BEHALF OF THE BOARD OF DIRECTORS

“Charlie Kiser”

Charlie Kiser
Chief Executive Officer

The Canadian Securities Exchange does not accept responsibility for the adequacy or accuracy of this release.

All statements, other than statements of historical fact, included herein are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ, materially from the Company’s expectations are disclosed in the Company’s documents filed from time to time with the Canadian Securities Exchange, the British Columbia Securities Commission, the Ontario Securities Commission, the Alberta Securities Commission, and the Alberta Securities Commission.