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TAAL enters into Binding LOI in respect of a Sale and Hosting Arrangement for Recently Acquired New Brunswick Facility

TORONTO, April 5, 2022 /CNW/ – TAAL Distributed Information Technologies Inc. (CSE:TAAL) (FWB: 9SQ1) (OTC:TAALF) (“TAAL” or the “Company”), a vertically integrated blockchain infrastructure and service provider for enterprise, today announces that it has signed a binding letter of intent (“LOI”) to sell (the “Sale”) all of the shares of Chief Fuels Inc. (“Chief Fuels”) to a third-party (the “Purchaser”) for an aggregate cash purchase price of US$24 million (the “Purchase Price”), payable in instalments and subject to customary adjustments.

Pursuant to the LOI, the Purchaser has paid TAAL a deposit of US$3 million (the “Deposit”), which Deposit has be credited towards the Purchase Price. An additional US$7 million will be payable upon closing of the Sale, anticipated to occur later this month, and a final cash payment of US$14 million is payable in the fourth quarter of 2022.

As previously disclosed, Chief Fuels, which was acquired by TAAL in December 2021 (the “Original Transaction”), owns an approximately 60,000 sq/ft facility (the “Facility”) in New Brunswick. Pursuant to the LOI, the Purchaser has agreed to enter into a long term hosting arrangement (the “Hosting Arrangement”) pursuant to which the Company will lease the Facility. The Hosting Arrangement is expected to include (i) obligations of the Purchaser to make capital expenditures at the Facility in connection with its development into a dedicated bitcoin and transaction processing operation, (ii) a credit in favour of TAAL for prepayments previously made to NB Power in connection with the Facility, and (iii) a rental rate to be established by reference to an agreed upon return on investment to the Purchaser.

In connection with the LOI, the Company has also entered into an agreement with the parties to the Original Transaction, pursuant to which TAAL has agreed to certain amendments to the share purchase agreement and the lock-up agreement entered into in connection with the Original Transaction. Notably, subject to the completion of the Sale with the Purchaser, the Company has waived the remaining conditions which tied the issuance of 2,250,000 TAAL common shares (the “Contingent Consideration Shares”) to the former shareholders of Chief Fuels to the achievement of certain milestones. Instead the Contingent Consideration Shares will be issued in full to the former shareholders in incremental releases, through the end of 2023.

Completion of the Sale and of the Hosting Arrangement are subject to a number of conditions, and there can be no assurance that either transaction will be completed as proposed or at all.

About TAAL Distributed Information Technologies Inc.

TAAL Distributed Information Technologies Inc. delivers value-added blockchain services, providing professional-grade, highly scalable blockchain infrastructure and transactional platforms to support businesses building solutions and applications on the BSV platform, and developing, operating, and managing distributed computing systems for enterprise users. BitcoinSV Blockchain is the world’s largest public blockchain by all major utility metrics, data storage, daily transaction volume, scaling ability, and average block size.

For more information please visit – www.taal.com/investors

The CSE, nor its Regulation Services Provider, accepts no responsibility for the adequacy or accuracy of this release.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

Certain statements included in this news release constitute “forward-looking information” as defined under applicable Canadian securities legislation. The words “will”, “intends”, “expects” and similar expressions are intended to identify forward-looking information, although not all forward-looking information will contain these identifying words. Specific forward-looking information contained in this news release includes but is not limited to statements regarding: the Sale and the Hosting Arrangement and the anticipated terms thereof. These statements are based on factors and assumptions related to historical trends, current conditions and expected future developments. Since forward-looking information relates to future events and conditions, by its very nature it requires making assumptions and involves inherent risks and uncertainties. TAAL cautions that although it is believed that the assumptions are reasonable in the circumstances, these risks and uncertainties give rise to the possibility that actual results may differ materially from expectations. Material risk factors include delays in equipment deliver, expected operation, network conditions in the future and other risks set out in TAAL’s Annual Information Form for the financial year ended December 31, 2021 under the heading Risk Factors and elsewhere in TAAL’s continuous disclosure filings available on SEDAR at www.sedar.com. Given these risks, undue reliance should not be placed on the forward-looking information contained herein. Other than as required by law, TAAL undertakes no obligation to update any forward-looking information to reflect new information, subsequent or otherwise.

SOURCE Taal Distributed Information Technologies Inc.

For further information: Richard Baker, Chief Executive Officer, [email protected]