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Prophecy Defi Inc
Symbol PDFI
Shares Issued 76,314,240
Close 2021-09-13 C$ 0.52
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Prophecy Defi completes 100% acquisition of Layer2

2021-09-13 10:55 ET - News Release

Mr. John McMahon reports

PROPHECY DEFI ANNOUNCES ACQUISITION OF 100% OF LAYER2 BLOCKCHAIN

Further to its press releases of June 8, 2021, and July 9, 2021, Prophecy Defi Inc. has completed the previously announced acquisition of the remaining 40 per cent of the issued and outstanding common shares of Layer2 Blockchain Inc. As consideration for the transaction, the company issued a further 25 million common shares of the company to the shareholders of Layer2 on a pro rata basis.

All common shares issued in connection with the acquisition of Layer2 are subject to voluntary lock-ups of up to 21 months, subject to certain accelerated releases in the event the company's common shares trade above certain prices. Further information on the transaction can be found in the press releases of the company dated June 8, 2021, and July 9, 2021.

Prophecy Defi initially acquired a 60-per-cent interest in Layer2 Blockchain on July 9, 2021. Layer2's management team has proved to be extremely skilled at identifying opportunities in the decentralized finance (defi) space, executing on market trades and creating returns that exceeded Prophecy Defi's targets. On this basis, the company decided to proceed with accelerating the timeline of the purchase of the remaining 40-per-cent interest in Layer2 Blockchain.

"We are thrilled to acquire full ownership of this innovative company," said John McMahon, chief executive officer of Prophecy Defi. "Layer2 is managed by an extremely talented team of defi operators, and we will be accelerating the growth of the existing Layer2 business with additional capital and resources that will continue to enhance their operations."

"This relationship with Prophecy Defi is truly symbiotic. With the access to capital and knowledgeable advisers that Prophecy Defi offers, we are able to concentrate our efforts on executing our business plan. Just 60 days after the initial transaction, we've proven the business thesis and see a tremendous future in the growth prospects of the company," said Andrew Young, chief executive officer of Layer2 Blockchain.

Layer2 specializes in liquidity provisioning, pooled lending and staking in non-ethereum defi protocols. By providing capital to emerging marketplaces, Layer2 does not just profit from high yields, but also takes an early ownership stake in these growing exchanges.

Layer2 Blockchain performance

Layer2 Blockchain has performed exceptionally well since it began deploying capital into defi opportunities on July 17, 2021. As of Sept. 2, 2021, or its first 47 days of operations, Layer2 has initiated nine trades. The largest of these trades was providing liquidity provisioning to DinoSwap and the amount of capital deployed into this trade reached a height of $3,282,660.50. Through this trade alone, Layer2 has had capital appreciation of $1,023,719 in this period and yielded a time-weighted rate of return of 77.75 per cent. This trade remains active and continues to generate positive returns.

Further to the DinoSwap trade, Layer2 initiated additional trades within this 47-day period by deploying capital through liquidity provisioning on ApeSwap, QuickSwap and Impermax where ethereum, bitcoin, matic and stable coins have been deployed. These trades have yielded holding period returns of 76.31 per cent, 42.3 per cent and 25.9 per cent, respectively. Layer2 aggressively compounds the profits from these trades multiple times a day to amplify returns.

The company is seeing a growing number of opportunities to increase its activity and capital deployment into this high-growth market.

Outlook

Defi is one of the fastest-growing asset classes worldwide, having grown 150 times from less than $1-billion in May, 2020, to over $150-billion in total value locked today.

Since the initial acquisition of Layer2 on July 8, 2021, Prophecy Defi has advanced $1.1-million to Layer2 in order to accelerate the growth of the business. With the closing of this transaction, Prophecy Defi is planning to advance additional funds to Layer2, which will allow it to take advantage of new and quickly emerging market opportunities.

Layer2's performance is strengthened by the continuous expansion of Prophecy Defi's advisory committee. Prophecy Defi's advisers are world-renowned leaders in defi and blockchain technology, who have built some of the largest and fastest-growing protocols in the sector. These advisers support Prophecy Defi's long-term mission to not only capitalize on opportunities in the market, but to actively grow and build on existing defi infrastructures. The expertise, access and industry connections of Prophecy Defi's advisory committee are proving to be paramount in achieving these corporate objectives and will continue to serve as a competitive advantage to the operations of Layer2.

Share issuances

The company has agreed to extend a consulting contract with an investor relations firm, The Bid Capital. The contract has a fee payable of $250,000, which will be satisfied through the issuance of 500,000 common shares at a deemed price of 50 cents per share. These shares will be subject to a statutory holding period expiring on the date that is four months and one day from the issuance date and subject to an additional escrow of up to 21 months based on certain agreed-upon performance milestones. In connection with the transaction, the company agreed to issue 500,000 common shares to a certain eligible finder. The shares issued to such finder are subject to the same lock-ups as noted herein.

About Layer2 Blockchain Inc.

Layer2 Blockchain is focused on accelerating the development of the defi industry on scalable blockchains by providing early-stage liquidity to the most promising defi projects.

About Prophecy Defi Inc.

Prophecy Defi aims to bring together technology start-ups in the blockchain and defi sectors to finance innovation, elevate industry research and create new business opportunities in a coherent ecosystem.

We seek Safe Harbor.

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