Bluesky Digital Signs Binding LOI to Acquire ChessGold Inc.

Executive Summary

• Bluesky Digital Assets Corp. entered into a binding Letter of Intent to acquire all outstanding common shares of ChessGold Inc., which would result in a fundamental change on the Canadian Securities Exchange.
• The proposed transaction will be funded, in part, by a non‑brokered private placement of up to $3 million of units at $0.10 per unit, with an over‑allotment option for an additional 25% of units.
• Upon closing, ChessGold shareholders would receive 10 million Bluesky shares (≈11.84% of the combined entity) and 20 million milestone warrants, subject to escrow and performance conditions.

Key Details

• Transaction Structure: Intended as a three‑cornered amalgamation, share exchange, plan of arrangement, or other structure that makes ChessGold a wholly‑owned subsidiary of Bluesky.
• Share Issuance to ChessGold Shareholders: 10 million Bluesky shares at a deemed price of $0.10 per share; resulting holders will own ~11.84% of the post‑transaction issuer (adjustable).
• Milestone Warrants: 20 million warrants to purchase common shares in the resulting issuer, to be held in escrow and exercisable in tranches upon achievement of specified milestones.
• Financing – Private Placement:
• Units priced at $0.10 each; each unit = 1 common share + 1 warrant.
• Gross proceeds target: up to $3,000,000.
• Over‑allotment (greenshoe) of an additional 25% of units approved.
• Warrants grant the right to purchase one common share at $0.13 per share for 24 months post‑closing; expiry may be accelerated if the VWAP ≥ $0.30 for 30 consecutive days.
• Use of Proceeds: To fund expenses related to the ChessGold acquisition and provide working capital for the resulting issuer.
• Regulatory & Shareholder Approvals: Transaction requires approval of Bluesky shareholders, exchange acceptance as a “fundamental change,” and all applicable regulatory clearances.
• Escrow Arrangements: Anticipated escrow agreements requiring ChessGold shareholders to hold their shares in the combined entity for 12 months post‑closing.
• No Finder’s Fee Paid Directly for Transaction: The LOI expressly states no finder’s fee will be paid as a direct result of the proposed acquisition, though fees may be payable in connection with the financing.
• Potential Trading Halt: Trading in Bluesky securities may remain halted pending exchange approval of the fundamental change.

Notable Quotes

(No executive quotes were included in the release.)