Mr. Rupert Williams reports

GLOBALBLOCK ANNOUNCES PROPOSED REVERSE TAKEOVER (RTO) BY CHAINERGY, A COMPANY DEVELOPING SUSTAINABLY POWERED ARTIFICIAL INTELLIGENCE DATA CENTERS

Globalblock Digital Asset Trading Ltd. has entered into an arm's-length, binding letter of intent effective Jan. 3, 2025 (the LOI), with RTC Merchants Ltd. (doing business as Chainergy) to complete a proposed reverse takeover transaction. The transaction is expected to constitute a reverse takeover transaction pursuant to TSX Venture Exchange Policy 5.2 -- Changes of Business and Reverse Takeovers.

Upon completion of the transaction, (i) the combined entity (the resulting issuer) will carry on the business of Chainergy (described below), (ii) existing shareholders of Chainergy and subscribers in the concurrent financing (defined below) will exchange their securities for similar securities of the resulting issuer, (iii) the consolidation (defined below) will be completed; and (iv) the company will be renamed and obtain a new ticker symbol. It is the intention of the parties that the resulting issuer will be listed on the exchange.

About Chainergy and its business

Founded in 2022, Chainergy is a privately held United Kingdom company at the forefront of the energy transition and digital infrastructure revolution. Driven by a team of seasoned entrepreneurs, Chainergy is working to redefine the future of data processing with sustainably powered modular data centres designed to meet the surging demand for artificial intelligence. With deep expertise in energy optimization and digital infrastructure, Chainergy's scalable, energy-first business model seeks to lower costs and bypass electricity grid constraints. As global data centre energy demand is set to double by 2030, Chainergy is delivering innovative solutions to bridge the gap between rapid digital growth and the physical infrastructure required to sustain it.

James Behan, chief executive officer of Chainergy, said:

"Over the past few years, we have successfully demonstrated the technical and commercial viability of our innovative approach: deploying small, modular and sustainable data centres alongside highly competitive renewable energy sources. Chainergy is positioned to address the AI energy challenge with an efficient, forward-thinking solution that operates independently of an already overburdened electricity grid.

"With the requisite capital, we are poised to rapidly deliver our first commercial-scale data centre in the U.K., laying the foundation for a broader rollout across Europe and beyond. We are thrilled to partner with a supportive shareholder base that values innovation and sees the extraordinary potential of our business model."

Rupert Williams, chief executive officer of Globalblock, said:

"We are very excited to have identified a team that will capitalize on the rapidly growing data centre industry, especially as AI usage increases by both individuals and corporations globally. We believe this presents our shareholders with an excellent opportunity to be part of a business that has the potential to scale quickly due to its model of rolling out small modular data centres that are sustainable, can source cheap energy and generate high operating margins."

The transaction

Terms of the transaction

The LOI is to be superseded by a definitive agreement to be signed on or before Feb. 28, 2025 (or such other date as is agreed to by the company and Chainergy). The transaction is expected to be completed by way of plan of arrangement or other structure pursuant to which the company shall acquire all of the issued and outstanding securities of Chainergy pursuant to the terms of the definitive agreement, in exchange for 177,422,689 common shares of the company (approximately 43,166,667 common shares taking into account the consolidation (defined below). The transaction is based on a valuation of the company of $6.3-million (equivalent to approximately seven cents per share) and a valuation of Chainergy of $12.95-million. The closing price of the common shares of the company prior to the issuance of this press release was 11.5 cents per share.

In connection with the transaction, the company will consolidate its common shares, at a consolidation ratio to be jointly determined by the company and Chainergy, acting reasonably (currently expected to be a 4.1102:1).

Completion of the transaction is subject to a number of other conditions, including obtaining all necessary board, shareholder and regulatory approvals, including TSX Venture Exchange approval. The terms of the transaction (including the concurrent financing) were negotiated at arm's length.

Concurrent financing

In connection with the transaction, Chainergy and/or an entity established for the purposed of completing the concurrent financing (collectively referred to in this section as Chainergy) intends to complete a best-efforts private placement financing of subscription receipts led by Haywood Securities Inc., at a price of 30 cents per subscription receipt (the issue price), for minimum aggregate gross proceeds of $5.5-million (the concurrent financing).

Each subscription receipt shall be deemed to be exchanged, without any further action or payment of any additional consideration and subject to adjustment, upon satisfaction of certain customary escrow release conditions, for one unit of Chainergy. Each unit shall comprise one common share in the capital of Chainergy and one common share purchase warrant of Chainergy. Each warrant shall be exercisable to acquire one common share of Chainergy at a price per warrant share of 45 cents for a period of 60 months from the date on which a final bulletin is issued by the exchange announcing exchange approval of the transaction.

Shareholder meeting

In connection with the transaction, the company expects to convene a meeting of its shareholders for the purpose of approving the transaction, among other matters.

Board of directors, management and other insiders of the resulting issuer

It is currently anticipated that the board of directors and management of the resulting issuer will be determined by mutual agreement between the company and Chainergy, provided the exchange does not object to such nominations and such persons are eligible to act as directors and officers pursuant to the applicable laws. The board of directors of the resulting issuer is to be made up of four members, with the controlling shareholders of Chainergy having the right to nominate two members, the company having the right to nominate one member, and a final member to be determined going forward.

James Behan and Roger Cockram, founders of Chainergy, will assume the roles of CEO (chief executive officer) and COO (chief operating officer) of the resulting issuer.

Sponsorship

Sponsorship of the transaction is required by the exchange unless an exemption or waiver from the sponsorship requirement is available. The company is currently reviewing the requirements for and will apply for an exemption from the sponsorship requirements pursuant to the policies of the exchange.

Trading halt

Trading in the company common shares is presently halted. It is uncertain whether the company common shares will resume trading until the transaction is completed and approved by the exchange.

Preclosing capitalization of the company

As of the date hereof, the company's authorized share capital consists of an unlimited number of company common shares, of which 86,313,741 company common shares and no other shares are issued and outstanding. In addition, the company has issued options to current directors and officers entitling them to acquire up to 3.4 million company common shares upon payments ranging between 15 cents and 82 cents per share.

Preclosing capitalization of Chainergy

As of the date hereof, 100,381 shares of Chainergy are issued and outstanding. No other securities convertible into or exchangeable for securities of Chainergy are outstanding and no other rights to acquire securities of Chainergy exist.

companies controlled by James Behan and Roger Cockram, both of the United Kingdom, each own and hold approximately 46.8 per cent of the outstanding shares of Chainergy.

Name change

It is intended that the name of the company is to be changed in connection with the completion of the transaction to reflect the resulting issuer and its business going forward. Any such name change is subject to applicable exchange and other regulatory approvals, and shareholder approval, as applicable.

Finders' fees

It is proposed that a finder's fee of 716,992 postconsolidation common shares of the resulting issuer will be payable to each of Rufus Round and Angus Campbell. Payment of any finder's fee is subject to the approval of the exchange and completion of the transaction. All shares issued pursuant to the payment of finder fees shall be subject to special lockup restrictions.

Additional information

The company will issue additional press releases related to the final legal structure of the transaction, the terms and conditions of the transaction, additional information regarding the nature and history of Chainergy's business, the full terms of the concurrent financing and its status, sponsorship, financial information regarding Chainergy, the names and backgrounds of insiders and management and directors of the resulting issuer, and other material information as it becomes available.

About Globalblock Digital Asset Trading Ltd.

Globalblock Digital Asset Trading is a publicly traded holding company. The company currently has no operating business.

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