Mr. Akshay Sood reports

CRYPTOBLOX PROVIDES COMPREHENSIVE CORPORATE UPDATE

Cryptoblox Technologies Inc. has provided a comprehensive corporate update across all the business lines that collectively comprise its diversified blockchain ecosystem business, which is broken down into three divisions: mining products and technology, digital asset mining and infrastructure, and structured blockchain products and services. In this comprehensive update, the company is aiming to provide updates in respect of each division.

Mining products and technology

In December of 2023, the company acquired a four-year licence to develop and distribute products based on Crypto Green Tech Inc.'s modular renewable-energy-powered mining infrastructure patent application. Since such date, the company has been working with Crypto Green's RandD division to develop initial prototypes based on Crypto Green's technology and hopes to have a working prototype by third quarter.

Digital asset mining and infrastructure

Pursuant to the agreement pursuant to which the company acquired Redwater, the company was obligated to issue to the original vendors of Redwater up to two additional tranches of shares as follows: (i) an aggregate of 5,085,960 milestone shares upon the vendors paying to the company an aggregate of $595,875 and $72,975 (U.S.); and (ii) a further 5,085,960 milestone shares upon the vendors paying to the company a further $595,875 and $72,975 (U.S.).

The company intended to use the milestone cash payments to finance:

• Redwater's payment to True North of $145,950 (U.S.), pursuant to Redwater's option asset agreement with True North dated June 1, 2023, entitling Redwater to acquire an additional 100 MV7L 95- to 105-terahash-per-second 31-joule-per-terahash miners from True North;
• Redwater's payment to True North of $367,500, pursuant to Redwater's option asset purchase agreement with True North dated June 1, 2023, entitling Redwater to an air-cooled one-megawatt power generation facility (the True North data centre);
• Redwater's payment to Comgen Power Solutions Ltd. of $824,240, pursuant to Redwater's option asset purchase agreement with Comgen dated June 1, 2023, entitling Redwater to acquire from Comgen, among other things, a 1.25-megawatt natural gas power plant, a fuel gas supply agreement with Longshore Resources Ltd., a surface access agreement with Longshore and a power purchase agreement with True North, the net result of which would be that Redwater's miners would have access to power at 1.5 cents per kilowatt-hour.

On May 15, 2024, all original parties to the acquisition agreement executed an addendum agreement that revised the process by which the original milestone cash payments will be made. Pursuant to the addendum, the vendors have agreed to transfer an aggregate of $828,865 into an escrow account maintained with Endeavor Trust Company, acting as escrow agent, within 30 calendar days of the addendum date. Upon Redwater receiving the consent of Longshore to certain assignments of the Comgen assets to Redwater, the revised first cash payment will be released to the company to be used to acquire the Comgen assets from Comgen. Upon completion of the same, the vendors will be issued an aggregate of 6,024,427 common shares of the company.

Within 30 business days of the first release, the vendors will transfer an additional aggregate of $585,000 and $145,950 (U.S.) into an escrow account maintained with Endeavor, acting as escrow agent. Upon Redwater receiving, among other things, evidence of certain amendments to the miner agreement and the data centre agreement, the revised second cash payment will be released to the company to be used to acquire the True North miners and the True North data centre. Upon completion of the same, the company will issue the remaining milestone shares to the vendors, being an aggregate of 4,147,492 milestone shares.

The revised first milestone shares and revised second milestone shares will be subject to a hold period expiring 10 calendar days after the later of: (i) the date on which the company files a business acquisition report under National Instrument 51-102 respecting its acquisition of Redwater; (ii) the date on which the company files its consolidated annual financial statements for the year ended Jan. 31, 2024; and (iii) the date on which the revised second milestone shares are issued. The share restriction was imposed by the Canadian Securities Exchange after the addendum date and was agreed to by the vendors on May 31, 2024.

After acquiring the Comgen assets, the True North miners and the True North data centre, the company plans to put its miners, which will number 233 at such point, into operation and to power such operations from energy produced at the power plant, which will be fuelled by flared gas supplied pursuant to the gas supply agreement. The company expects these milestones to be achieved and for Redwater's facility to come on line in third quarter 2024 or sooner, and will provide an update to shareholders when each of the revised first cash payment and the revised second cash payment is made by the vendors.

As announced when the company acquired Redwater in June, 2023, Redwater currently owns 133 Bitmain S19J Pro ASIC miners, which are located in an air-cooled data centre located in Sturgeon county, Alberta, Canada. At the present, the S19J Pros are being operated by True North on care and maintenance, and, as soon as Redwater commences operations, it will take over the operation of the S19J Pros itself and for its own benefit.

"Execution of the addendum signals that all parties to the Redwater acquisition documents remain motivated to continue maintaining leadership and driving innovation forward within flare-gas-enabled digital asset mining operations," stated Cryptoblox chief executive officer Akshay Sood.

"We are committed to continue expanding our digital asset infrastructure and mining division, which houses our flare gas alternate-energy-powered digital asset mining operations, especially as it builds the foundation for our diversified blockchain ecosystem strategy. Off-grid energy is a major component of this strategy as it drives two of our three business divisions: digital asset infrastructure and mining and mining products and technology," added Mr. Sood.

Structured blockchain products and services

The structured blockchain products and services division will focus on growth of the Blockchain Fintech Unipessoal LDA, which the company agreed to acquire by way of share purchase agreement, announced on March 5, 2024. Completion of the Blockchain Fintech acquisition remains subject to approval by the Canadian Securities Exchange, and, accordingly, the terms of the acquisition may change before closing. However, the company's strategic plans for Blockchain Fintech remain the same, in that the technology from the acquisition is intended to fast-track Cryptoblox's launch of non-custodial products and services, which will include a Web3-enabled digital asset wallet and a digital asset payment card. The company hopes the Blockchain Fintech acquisition will allow the company to complete its diversified blockchain ecosystem.

About Cryptoblox Technologies Inc.

Cryptoblox is a blockchain technology infrastructure company focusing on building out its diversified blockchain ecosystem strategy that consists of digital asset mining and infrastructure, mining products and technology, and structured digital asset products and blockchain payments. The company's infrastructure will be based on the value chain that stems from off-grid/alternative-energy-powered digital asset mining, along with a diversified portfolio of sustainable mining and blockchain fintech products and services enabled by both the sustainable mining products and technology and structured blockchain products and services divisions. The company will be focused on providing alternative energy solutions to power digital asset mining operations throughout North America -- with the first site being in Redwater, Alta. By using alternative energy sources and state-of-the-art operations techniques, the company will be positioned to achieve a high degree of financial optionality and long-term operational certainty, which can result in some of the cleanest and lowest-cost digital asset mining operations in the world.

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