CryptoBlox Technologies is pleased to announce that on June 16, 2023, it entered into a share purchase agreement (the “Agreement”) with Red Water Acquisition Corp. (“Redwater”) for 100% of the total issued and outstanding shares of Redwater (the “Acquisition”). Redwater will be a wholly-owned subsidiary of the Company following completion of the Acquisition. The Acquisition is a significant step for CryptoBlox in expanding its presence in the cryptocurrency mining sector.
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Redwater, a company specializing in air-cooled data centers and advanced heat recapture products, has obtained development rights to a prime location in Sturgeon County, Alberta, Canada for its operations. This site will serve as the foundation for Redwater’s state-of-the-art crypto mining facility, designed for efficiency and cost-effectiveness. Redwater was specifically created for the purposes of completing this transaction and does not have any historical sales, or any other assets or liabilities that are being acquired by the Company.
The Acquisition was facilitated by True North Data Systems Ltd. (“TNDS”) of Calgary, Alberta, acting on behalf of the site owner, an oil and gas producer seeking to harness the natural gas associated with oil production that is currently being flared. Redwater intends to utilize this waste gas as a sustainable and cost-effective fuel source for its mining operations, demonstrating its commitment to environmental sustainability.
“Leveraging the untapped potential of flared gas as a low-cost fuel source presents an exceptional opportunity for our mining operations” commented CryptoBlox CEO, Taryn Stemp.
To support its operations, CryptoBlox plans to enter into a long-term gas supply agreement (“GSA”) and site lease with TNDS, enabling the development of generation assets to power the mining operations at the site. Initially, Redwater intends to commission 0.5 to 1.0 MW of generation capacity and mining enclosures within the next 30 to 90 days. This will facilitate the installation of the 233 high-speed application-specific integrated circuit (ASIC) that CryptoBlox is acquiring as part of the Agreement.
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Furthermore, Redwater, in collaboration with TNDS, aims to expand its generation and mining footprint over the next 18 to 24 months, potentially reaching a total capacity of 3 MW or more. As part of its growth strategy, Redwater, which will be a wholly-owned subsidiary of the Company, will explore the possibility of providing peak demand capacity to the Alberta grid.
In exchange for 100% of the total issued and outstanding shares of Redwater, CryptoBlox will issue 220,000,000 common shares of the Company (the “Consideration Shares”) at a deemed price of $0.05 per Consideration Share to the shareholders of Redwater for a deemed transaction value of $11,000,000. The Consideration Shares will be issued in tranches with 118,280,800 Consideration Shares being delivered to the shareholders on Redwater upon closing of the Acquisition, and the remaining 101,719,200 Consideration Shares to be delivered upon the completion of certain milestones being met by Redwater pursuant to the terms of the Agreement. The Acquisition was negotiated at arm’s length and does not constitute a change of control. There were no finders’ fees associated with this transaction.
The acquisition of Redwater signifies a significant milestone for CryptoBlox and solidifies its position as a substantial player in the evolving cryptocurrency mining industry. The Company remains committed to driving sustainable and environmentally conscious practices while delivering superior mining solutions.
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