Mr. David Thomas reports

GLOBALBLOCK TO SELL DIGITAL ASSET BROKER BUSINESS

Globalblock Digital Asset Trading Ltd. has entered into a business disposition agreement dated March 22, 2023, with Globalblock Ltd. (GB U.K.) and the original shareholders and founders of GB U.K. to transfer GB U.K. and its digital asset broker business back to the GB U.K. founders. In return, the GB U.K. founders will return to the company the 48.45 million common shares of the company collectively held by them (which shares were originally issued to the GB U.K. founders when the company acquired GB U.K. in 2021). The disposition transaction is considered a non-arm's-length transaction because it involves non-arm's-length parties (as defined by the TSX Venture Exchange).

The company has determined that, given the current environment surrounding digital assets and the expense and restrictions surrounding the operation of a digital asset broker business inside of a publicly listed entity, the digital asset broker business being operated by GB U.K. and its subsidiaries would best be served outside of a publicly listed entity. As a result, the GB U.K. founders have agreed under the disposition transaction to privatize that business, and the company will be seeking alternative transactions and businesses to acquire or combine with.

Key terms of the disposition transaction

At the closing of the disposition transaction, the company will sell all of the shares of GB U.K. to the GB U.K. founders in exchange for return of 48.45 million common shares of the company collectively held by the GB U.K. founders.

The agreement sets forth how the assets, liabilities and obligations of the company and GB U.K. and its business are to be dispersed or transferred amongst the company and GB U.K. effective as of Dec. 31, 2022, including the split of cash and liabilities, and the obligations of each of the company and GB U.K. going forward. The company and GB U.K. have agreed to split on a 50/50 basis: (i) the cost of the company's current chief financial officer until the term of his consulting agreement expires; (ii) the cost of preparation of the company's audited financial statements for the year ended Dec. 31, 2022; and (iii) the costs of the disposition transaction.

At closing, David Thomas will resign as chief executive officer and a director of the company and Patrick Bullman will resign as a director of the company.

At closing, the company will provide a 150,000-British-pound loan facility to GB U.K. to assist with the transitionary phase and support GB U.K.'s business opportunities. The loan facility will be a non-revolving loan with a 12-month maturity date and will bear interest at a rate equal to the prime rate plus 2.0 per cent per annum. If the loan facility is not repaid on its specified repayment date, then the loan facility shall remain outstanding, and GB U.K. shall be required to issue to the company that number of its ordinary shares that would result in the company holding 5 per cent of the issued and outstanding ordinary shares of GB U.K. (on a fully diluted basis). If the loan facility is not repaid within six months of the repayment date, then the loan facility shall remain outstanding and GB U.K. will be required to issue to the company that number of additional ordinary shares such that the company holds 10 per cent of the issued and outstanding ordinary shares of GB U.K. (on a fully diluted basis).

The disposition transaction is subject to usual conditions to closing, but also includes the following conditions to closing:

• Holders of options to acquire up to 1.5 million common shares of the company (those holders being David Thomas, Patrick Bullman and certain employees of GB U.K.) will have entered into agreements to terminate those options held by them.
• Dissent rights in connection with the disposition transaction shall not have been validly exercised (and not withdrawn) with respect to more than 1 per cent of the issued and outstanding common shares of the company.

Following completion of the disposition transaction, the company's remaining assets will be cash and the blockchain patents it acquired in February, 2021. Accordingly, the company will need to identify and, if successful, acquire or combine with a new business. The company has discussed the disposition transaction with the exchange and the exchange has advised that, after the completion of the disposition transaction, the company's listing may be transferred to the NEX board of the exchange until the company is able to so acquire or combine with a new business.

Upon completion of the disposition transaction, the company will need to identify and appoint a new chief executive officer and at least one additional director.

Additional details of the disposition transaction

Disposition of all or substantially all the property of the company

The disposition transaction involves the disposition of GB U.K. and its digital asset broker business, which is substantially all of the company's property. As such, the company is required to obtain the affirmative vote of at least two-thirds of the votes cast by the shareholders of the company present at a special meeting of the shareholders in person or represented by proxy and entitled to vote at the meeting, pursuant to Section 301 of the Business Corporations Act (British Columbia) (BCBCA).

Pursuant to the BCBCA, any registered holders of the company's shares have a right to dissent. Each dissenting shareholder is entitled to be paid the fair value of all, but not less than all, of the holder's shares, provided that the holder duly dissents to the disposition transaction and the disposition transaction is approved by the required shareholders.

Related party transaction

The GB U.K. founders, as parties to the disposition transaction, each hold more than 10 per cent of the issued and outstanding common shares of the company. As such, the company is also required to obtain the affirmative vote of a majority of the shareholders of the company present at the meeting in person or represented by proxy, excluding any votes attached to shares of the company beneficially owned by the GB U.K. founders or over which the GB U.K. founders exercise control or direction and any other person who has a material interest in the disposition transaction, pursuant to Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions.

Special committee

To ensure that the interests of the company were fairly considered in the negotiation and review of the disposition transaction and to manage the conflicts of interest that may arise in the context of the disposition transaction, the independent directors of the company, who do not have a financial interest in the disposition transaction, oversaw the evaluation and negotiation of the disposition transaction on behalf of the company.

TSX Venture Exchange approval

The disposition transaction is also subject to approval from the exchange due to the fact that it involves the disposition of all or substantially all of the property of the company and a transaction with a party related to the company.

Additional information

The company will issue additional news releases related to the disposition transaction and other material information as it becomes available.

About Globalblock Digital Asset Trading Ltd.

Globalblock Digital Asset Trading is a publicly traded holding company, whose wholly owned operating subsidiary, Globalblock Europe UAB, is a European Union based digital asset broker that provides a personalized telephone brokerage service, trading platform and mobile app. Following completion of the disposition transaction, the company will not have any operating business due to the sale of GB U.K. Accordingly, the company will need to identify and, if successful, acquire or combine with a new business.

We seek Safe Harbor.