Mr. Antonin Scalia reports

CATHEDRA BITCOIN AND KUNGSLEDEN INC. ANNOUNCE MERGER TO CREATE AN INFRASTRUCTURE COMPANY FOR THE DIGITAL ECONOMY

Cathedra Bitcoin Inc. has entered into a binding share exchange agreement dated March 6, 2024, providing for a merger with Kungsleden Inc., a developer and operator of alternative high-density compute infrastructure. Pursuant to the share exchange agreement, it is expected that Cathedra will acquire all of the outstanding shares of Kungsleden from Kungsleden shareholders in exchange for multiple voting shares (as defined herein) of Cathedra, as more particularly set out herein. The transaction will constitute a reverse takeover of Cathedra, such that, upon closing, the former Kungsleden shareholders will own (on a non-diluted basis) approximately 77.5 per cent of the equity of Cathedra as it exists on closing and Kungsleden will become a wholly owned subsidiary of the resulting issuer, with the board of the resulting issuer directing the operations of Cathedra and Kungsleden. Upon completion of the transaction, it is expected that the resulting issuer will be a Tier 2 technology issuer listed on the TSX Venture Exchange.

The transaction is expected to establish the resulting issuer as a developer and operator of data centre infrastructure for the digital economy, with a focus on bitcoin mining.

"We are excited to contribute to Cathedra's business through this transaction. Importantly, we are not merely acquiring a portfolio of data centre assets in this merger; we are joining forces with the team responsible for developing these assets," remarked Antonin Scalia, chief executive officer of Cathedra Bitcoin. "Kungsleden has established a scalable, repeatable process for developing bitcoin mining data centres with impressive construction costs and time to market. We also see opportunity beyond the bitcoin mining end-market, with the potential to apply these infrastructure development capabilities to the traditional data centre and high-performance compute markets."

Thomas Masiero, chief executive officer of Kungsleden, stated: "With our merger, Kungsleden and Cathedra are forging a path to potentially becoming a digital infrastructure leader. This strategic union combines our expertise, resources and ambition, enabling us to set a high standard for bitcoin mining operations."

Resulting issuer's business operations

Upon completion of the transaction, the resulting issuer's business operations are expected to include:

• 4.4 EH/s (exahashes per second) of third party hash rate under management across 87 megawatts (MW) of total power capacity at Kungsleden-operated data centres in Kentucky, Tennessee and North Dakota;
• 0.4 EH/s of installed proprietary mining hash rate hosted at four third party data centres in Washington, Tennessee and Texas, and one Kungsleden data centre in Tennessee;
• 45-megawatt portfolio of owned and operated bitcoin mining hosting data centres consisting of two 10 MW sites in Kentucky; one 10 MW site in Tennessee; and a 25-per-cent minority interest in a 60 MW site in North Dakota (equivalent to 15 MW of owned capacity) which is under development;
• As of the date hereof, total expected pro forma annualized revenues of $48.0-million derived from Cathedra's installed proprietary mining operations and Kungsleden's hosting business:
  • Expected pro forma annualized bitcoin mining revenue of approximately $12.0-million after the 2024 halving, assuming no other changes to market conditions at the time of this announcement;
  • Expected pro forma annualized hosting revenue of approximately $36.0-million across Kungsleden's data centres in Kentucky, Tennessee and North Dakota, including active locations and those currently under development.
• The resulting issuer will carry $5.7-million of total debt, consisting entirely of senior secured convertible debentures issued by Cathedra to a certain investor in November, 2021. The convertible debentures carry interest at a rate of 3.5 per cent per annum and do not require principal repayment until maturity in November, 2025, whereupon the full principal balance is due;
• Existing balance sheet cash and bitcoin from Cathedra of $1.2-million and $3.0-million (33.3 bitcoin), respectively, and balance sheet cash of $1.3-million from Kungsleden, subject to fluctuations between the time of this announcement and the closing of the transaction.

Share exchange agreement

The share exchange agreement provides that all issued and outstanding common shares of Kungsleden will be exchanged for multiple voting shares of Cathedra, with each common share of Kungsleden being exchanged for approximately 8.17 multiple voting shares of Cathedra (the exchange ratio), such that the total consideration payable in connection with the transaction is expected to be approximately 8,170,189 multiple voting shares, which will be convertible into 817,018,900 subordinate voting shares (as defined herein). The multiple voting shares are expected to be created pursuant to the share structure alteration (as defined hereinafter), subject to approval by the shareholders of Cathedra, which approval will be sought at a shareholder meeting to be held prior to completion of the transaction. Immediately following completion of the transaction, it is expected that Cathedra shareholders will own approximately 22.5 per cent of the stock of the resulting issuer, with Kungsleden shareholders owning approximately 77.5 per cent. Based on the five-day VWAP (volume-weighted average price) for the Cathedra shares on the TSX Venture Exchange as of the last trading day prior to the date of this announcement, the aggregate consideration implies a combined market capitalization of approximately $106.2-million. Closing of the transaction is expected occur in the second quarter of 2024.

Following completion of the transaction, the shares of the resulting issuer will continue to trade on the TSX-V under the ticker CBIT and on the OTCQB Venture Market under the ticker CBTTF.

Pursuant to the share exchange agreement, Cathedra and Kungsleden have agreed that the transaction is subject to certain conditions precedent, including, but not limited to: obtaining the required shareholder approvals (as further discussed herein); Cathedra having obtained the required exemption from, or waiver of, the TSX-V sponsorship requirements; obtaining any applicable regulatory approvals; TSX-V approval and any third party consents required for the transaction; and other customary conditions for transactions of this nature. The transaction constitutes an arm's-length transaction, within the meaning of that term in the policies of the TSX-V. Trading of Cathedra's common shares have been halted in connection with the announcement of the transaction and will remain halted pending the review of acceptable documentation with respect to the transaction pursuant to the policies of the TSX-V.

Cathedra intends to make an application to the TSX-V for an exemption from the sponsorship requirements, but there can be no assurance that such an exemption will be granted.

As at the date of this press release, Cathedra has the following securities issued and outstanding: 237,199,034 common shares; 3,605,364 stock options, each exercisable to acquire one common share, at a weighted average exercise price of 50 cents per common share; 3,342,550 restricted share units; 50,257,200 warrants, each exercisable to acquire one common share, at a weighted average exercise price of 95 cents per common share; and 887,682 broker warrants, each exercisable to acquire one common share, at a weighted average exercise price of 63 cents per common share. As at the date this press release, Kungsleden has one million common shares outstanding and there are no outstanding securities of Kungsleden that are convertible, exchangeable or redeemable into common shares of Kungsleden.

Kungsleden business operations

Kungsleden is a privately held developer and operator of alternative high-density compute infrastructure. Incorporated in Delaware in 2023 and headquartered in Tennessee, Kungsleden owns and operates 45 MW of bitcoin mining hosting capacity across four data centres in three U.S. states, including a 25-per-cent minority interest and operational control in a 60 MW North Dakota hosting facility currently under development. Each of Kungsleden's data centres is subject to existing power contracts with utilities and/or power generation facilities and hosting agreements with bitcoin mining clients. Upon closing of the transaction, it is expected that Cathedra will assume Kungsleden's existing hosting agreements and power contracts and deploy them for the resulting issuer's combined operations.

As provided in its unaudited consolidated financial statements, Kungsleden recorded revenues of $11.3-million (U.S.) and a net profit of $1.6-million (U.S.) for the year ended Dec. 31, 2023. As at Dec. 31, 2023, Kungsleden had total assets of $8.8-million (U.S.), total liabilities of $7.3-million (U.S.), and shareholders' equity of $1.4-million (U.S.).

Cathedra shareholder meeting

In connection with the transaction, Cathedra will hold a shareholder meeting to approve:

1. Alterations to the articles of the corporation (the share structure alteration) such that Cathedra shall:
   1. Change the name of its common shares to subordinate voting shares;
   2. Create a new class of unlimited multiple voting shares, with each multiple voting share convertible into 100 subordinate voting shares;
   3. Add special rights and restrictions to the subordinate voting shares and the multiple voting shares, pursuant to which, among other things, the holders of the multiple voting shares will be entitled to 117 votes per multiple voting share held.
2. A consolidation of the common shares of the corporation on the basis of one postconsolidation common share for up to 75 preconsolidation common shares, to be determined definitively by the directors of the corporation at a later date;
3. The election of the persons named below as directors of the resulting issuer.

In addition, Cathedra may include as an item of business the transaction to be approved by its shareholders at the meeting.

All matters required to be submitted for approval to shareholders in connection with the transaction and share structure alteration will be submitted at the shareholder meeting of the corporation which is expected to be held in April, 2024.

Proposed management and board of directors of the resulting issuer

Upon completion of the transaction, it is anticipated that the persons identified in the attached table will serve as officers of the resulting issuer, subject to acceptance by the TSX-V.

Antonin Scalia is the current chief executive officer of the corporation and Thomas Armstrong is the current president and chief operating officer. Both Mr. Scalia and Mr. Armstrong will continue in their current roles. Inar Kamaletdinov is expected to be onboarded as the chief financial officer of the resulting issuer.

The board of directors of the resulting issuer is expected to be consist of seven members, two of whom will be designated by Cathedra, three of whom will be designated by Kungsleden and two of whom will be designated by Kungsleden upon agreement by Cathedra. The expected board of directors for the resulting issuer is set out in the attached table.

Antonin Scalia -- chief executive officer and director

Mr. Scalia was appointed chief executive officer of Cathedra and to its board of directors in September, 2021. Prior to joining Cathedra, Mr. Scalia held various roles at Galaxy Digital Holdings Ltd., a diversified financial services firm dedicated to the digital assets sector, in the investment banking and principal investments divisions. He was also a founding member of Galaxy Digital's bitcoin mining division, building its proprietary mining and mining equipment finance businesses. Mr. Scalia began his career in JPMorgan Chase & Co.'s technology investment banking group in New York and holds an undergraduate degree in finance from the College of William & Mary.

Thomas Armstrong -- president and director

Mr. Armstrong was appointed president and chief operating officer of Cathedra and to its board of directors in September, 2021. Prior to joining Cathedra, Mr. Armstrong held various roles at Galaxy Digital, a diversified financial services firm dedicated to the digital assets sector, in the investment banking and principal investments divisions. He was also a founding member of Galaxy Digital's bitcoin mining division, building its proprietary mining and mining equipment finance businesses. Mr. Armstrong began his career in the investment banking division of Barclays PLC and holds undergraduate degrees in economics and philosophy from the University of Chicago.

Inar Kamaletdinov -- chief financial officer

Mr. Kamaletdinov is the founding partner of Imperium Consulting LLP, a boutique CPA firm providing accounting and business advisory services. Prior to founding Imperium, he obtained his professional designation with Ernst & Young (EY). Mr. Kamaletdinov also brings prior experience serving as CFO for a publicly listed junior resource company and a privately held cryptocurrency investment company.

Thomas Masiero -- co-chairman of the board

Mr. Masiero co-founded Kungsleden Inc.'s predecessor entities in 2022 and has been responsible for growing Kungsleden's power capacity under management to an expected 90 megawatts as chief executive officer. Prior to Kungsleden, Mr. Masiero worked as Cathedra's head of business development in 2022, deploying the corporation's fleet of over 4,000 latest generation Bitmain mining machines. Earlier in his career, Mr. Masiero co-founded and served as chief operating officer for Great American Mining, one of the first companies to mine bitcoin off-grid using flare gas in the oil field, which was acquired by Crusoe Energy Systems in 2022. Mr. Masiero brings decades of experience across internet and digital media, entrepreneurship, and bitcoin mining.

Jialin (Gavin) Qu -- co-chairman of the board

Mr. Qu was an investor in and co-founder of Kungsleden's predecessor entities in 2022. Prior to Kungsleden, he was an investor in and operator of over 200 megawatts of bitcoin mining capacity across dozens of sites in the United States in roles at various companies. Mr. Qu began his career in Goldman Sachs' sales and trading division in Hong Kong and holds an undergraduate degree in economics from the University of California, Berkeley.

Matthew Kita -- director

Mr. Kita is an experienced corporate attorney having spent time in both private practice and in-house, most recently as chief legal officer of Axiom, a bitcoin-focused finance company. Prior to joining Axiom, Mr. Kita served as general counsel of Cathedra as well as held various positions within the legal departments of BitGo and FIS. Prior to working in-house, Mr. Kita practiced at the law firms Reed Smith and Stevens & Lee. Mr. Kita holds both an undergraduate degree in economics and a law degree from The Pennsylvania State University and an LLM in taxation from Temple University.

Marcus Dent -- director

Mr. Dent is the founder of TFTC.io, a media company focused on bitcoin and freedom in the digital age. He is also a venture partner at Ten31, a bitcoin-focused venture capital firm. Previously, Mr. Dent served as director of business development at Great American Mining. He holds an undergraduate degree in economics from DePaul University.

David Jaques -- director

Mr. Jaques has held senior financial positions in banking, corporate finance and venture capital. In his early career, he held various positions with Barclays Bank in London and provided advisory services in currency and interest rate risk management to the bank's corporate clients. He held a similar role at Barclays Bank in New York from 1988 to 1993. He was senior vice-president and treasurer of Silicon Valley Bank between 1994 and 1999; founding CFO for PayPal from 1999 to 2001 and CFO of BlueRun Ventures from 2001 to 2008. Since 2008 he has provided CFO consulting services through Greenough Consulting Group and has held board positions at Katipult Technology Corp. (TSX-V: FUND), UBL Interactive Inc., Mobivity Holdings Inc., Bluedot Innovation Inc., Digitzs Solutions Inc. and Wedo Ventures Ltd. He holds a higher national diploma in business administration from Polytechnic of the South Bank, London, and is a U.K. chartered certified accountant (inactive).

Upon completion of the transaction, it is expected Togetsu Trust and Thy Kingdom Trust will beneficially own, directly or indirectly, approximately 40.1 per cent and 38.3 per cent of the voting shares of Cathedra, respectively. The trustees of the Togetsu Trust are Mr. Qu and Adam Brink, both of whom are resident in the United States. The trustees of the Thy Kingdom Trust are Mr. Masiero and Mr. Brink, both of whom are resident in the United States.

Filing statement

Cathedra expects to seek the approval of its shareholders for the transaction pursuant to obtaining written consents from Cathedra shareholders holding at least 50 per cent of the issued and outstanding common shares of the corporation (the written approval), in which case, in connection with the transaction and pursuant to the requirements of the TSX-V, Cathedra will file a filing statement on its issuer profile on SEDAR+, which will contain details regarding the transaction, Cathedra, Kungsleden and the resulting issuer.

In the event Cathedra does not obtain the written approval, the transaction will be proposed as an item of business at the meeting, in which case, a management information circular will be filed on its issuer profile on SEDAR+ in lieu of a filing statement, and such management information circular will contain details regarding the transaction, Cathedra, Kungsleden and the resulting issuer.

Additional details about the transaction can be found in a joint investor presentation, which will be available at the Cathedra website.

Amendment to convertible debentures

Cathedra also announces that, in connection with the closing of the transaction, it intends to amend the conversion price (the repricing) of 3.5 per cent senior secured convertible debentures of the corporation due Nov. 11, 2025, originally issued to the debenture holder on Nov. 11, 2021, from 78 cents to 15 cents. The aggregate principal amount outstanding of the debentures as of the date hereof is $5,733,728.38. The repricing is conditional on Cathedra entering into a definitive agreement with the holders of the debentures in respect of the repricing and completion of the transaction.

Cathedra expects that the proposed repricing will optimize its capital structure and prepare the resulting issuer to refocus on profitable growth. The board of directors of the Cathedra has reviewed the repricing and believes it is in the best interests of shareholders. The remaining outstanding principal amount of the debentures following the repricing will continue to bear interest at a rate of 3.5 per cent per annum, payable quarterly in arrears on the last day of March, June, September and December of each year until the maturity date.

The repricing is subject to the receipt of regulatory approvals, including the approval of the TSX-V.

About Cathedra Bitcoin Inc.

Cathedra Bitcoin is a bitcoin company that believes sound money and abundant energy are the keys to human flourishing. The company has diversified bitcoin mining operations which produce approximately 403 PH/s (petahash per second) across three states and five locations in the United States. The company is focused on managing and expanding its portfolio of hash rate through a diversified approach to site selection and operations, utilizing multiple energy sources across various jurisdictions.

About Kungsleden Inc.

Kungsleden is a fast-growing developer and operator of alternative high-density compute infrastructure. Incorporated in Delaware in 2023 and headquartered in Tennessee, Kungsleden owns and operates 45 MW of bitcoin mining hosting capacity across four data centres in three U.S. states, including a 25-per-cent minority interest and operational control in a 60 MW North Dakota hosting facility currently under development.

We seek Safe Harbor.