Street Calls of the Week
SYDNEY - Innovation Beverage Group Ltd (NASDAQ:IBG), a developer of alcoholic and non-alcoholic beverages, announced Tuesday it has entered into a non-binding letter of intent to merge with BlockFuel Energy Inc., a Texas-based company combining oil and gas exploration with bitcoin mining operations. IBG, currently valued at just $3.2 million in market capitalization, has seen its stock decline 87% over the past year despite maintaining impressive gross profit margins of 76%.InvestingPro analysis reveals several key insights about IBG’s current position, with 10+ additional ProTips available to subscribers.
Under the proposed reverse triangular merger, BlockFuel shareholders would receive 90% of IBG’s outstanding common stock post-transaction. Daniel Joseph Lanskey, currently BlockFuel’s CEO and an IBG director, would become Chairman and CEO of the combined company, while current IBG CEO Sahil Beri would transition to President of a newly formed Australian beverage subsidiary.
According to an independent fairness analysis by Marshall & Stevens Transaction Advisory Services, the post-merger company could have an equity valuation between $220 million and $343 million. This would value IBG shareholders’ 10% stake between $22 million and $34.3 million, compared to IBG’s pre-transaction valuation of $2.9 million to $6.3 million.
BlockFuel has engaged Needham & Company as its investment banking partner for the transaction.
The companies must still negotiate a definitive agreement, and the merger would require shareholder approval from both companies, regulatory clearances, and Nasdaq listing approval for BlockFuel stock to be issued. The transaction may also be contingent on completing separate financing before or alongside the merger.
"We are thrilled to partner with BlockFuel through this reverse merger, providing a public vehicle for their exceptional business in the oil/gas and crypto mining sectors," said Beri in the press release statement.
BlockFuel specializes in converting natural gas at its source, including stranded or flared gas, into power for bitcoin mining operations and data centers. With IBG’s current EBITDA at -$2.5 million and significant stock volatility, investors can access detailed financial analysis and real-time metrics through an InvestingPro subscription.
In other recent news, Innovation Beverage Group Ltd announced a non-binding letter of intent to merge with BlockFuel Energy Inc., a Texas-based company involved in oil and gas exploration and bitcoin mining. This proposed reverse triangular merger would grant BlockFuel shareholders 90% of Innovation Beverage Group’s post-transaction common stock. Daniel Joseph Lanskey, currently the President and CEO of BlockFuel, is set to become Chairman and CEO of the combined entity, while the current CEO of Innovation Beverage Group, Sahil Beri, will transition to President of a newly formed Australian beverage subsidiary. Additionally, Innovation Beverage Group disclosed plans for a 5-for-1 reverse stock split, effective September 26, 2025, to address a Nasdaq delisting notice. The company received this notice due to not meeting the minimum bid price and stockholders’ equity requirements, with a deadline of August 25 to regain compliance. The reverse stock split is intended to help maintain its Nasdaq listing. These developments mark significant changes for Innovation Beverage Group as it navigates financial and strategic challenges.
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