Bluesky Digital agrees to RTO of ChessGold

Executive Summary

• Bluesky Digital Assets Corp. has entered into a binding Letter of Intent (LOI) to acquire ChessGold Inc. via a three-cornered amalgamation or share exchange, resulting in ChessGold becoming a wholly owned subsidiary.
• The transaction involves issuing 10 million Bluesky shares (at $0.10/share) to ChessGold shareholders, who will hold approximately 11.84% of the resulting issuer, along with the issuance of 20 million milestone warrants to the principal of ChessGold.
• Concurrently, Bluesky intends to complete a non-brokered private placement of units at $0.10 per unit for gross proceeds of up to $3 million, including a 25% overallotment, to fund transaction expenses and working capital.

Key Details

• Transaction Structure: Binding LOI dated Jan. 21, 2026, for a three-cornered amalgamation, share exchange, plan of arrangement, or similar structure to combine ChessGold with Bluesky.
• Share Issuance: Bluesky will issue 10 million common shares to ChessGold holders at a deemed price of $0.10 per share.
• Post-Transaction Ownership: ChessGold shareholders will hold approximately 11.84% of the resulting issuer's issued and outstanding common shares (based on 74,478,958 existing Bluesky shares).
• Warrants to ChessGold Principal: 20 million milestone warrants to purchase common shares will be issued to the principal of ChessGold, held in escrow, and exercisable in tranches upon achieving specific milestones. Terms to be defined in the definitive agreement.
• Name Change: The resulting issuer expects to change its name to "ChessGold Inc."
• Board and Management: Composition of the board and retention of officers/directors to be negotiated in good faith.
• Escrow Requirements: Certain ChessGold shareholders will be required to enter into escrow agreements for their shareholdings over a 12-month period.
• Finders' Fees: No finders' fees paid directly as a result of the proposed transaction; however, finders' fees may be paid in connection with the concurrent financing.
• Conditions Precedent: Subject to definitive agreement, shareholder approval, regulatory approvals (including CSE acceptance), and other standard conditions. No assurance of completion.
• Concurrent Financing: Non-brokered private placement of units at $0.10 per unit for gross proceeds of up to $3 million.
• Overallotment: Board approved a 25% overallotment option for the private placement.
• Financing Warrants: Each unit consists of one common share and one common share purchase warrant.
• Warrant Terms: Warrants allow purchase of one common share at $0.13 per warrant share.
• Warrant Expiry: 24 months following closing, subject to acceleration if the VWAP is ≥ $0.30 for 30 consecutive days (expiry on 10th trading day after press release).
• Use of Proceeds: Financing expenses, transaction expenses, and working capital requirements of the resulting issuer.

Notable Quotes

• None provided in the text.