Mr. Ben Gelfand reports

BLUESKY DIGITAL SIGNS BINDING LOI TO ACQUIRE CHESSGOLD INC.

Bluesky Digital Assets Corp. entered into a binding letter of intent (LOI) with ChessGold Inc. dated Jan. 21, 2026, to effect a transaction that will result in the acquisition of all of the outstanding common shares of ChessGold by the company to ultimately form the resulting issuer. If completed, the proposed transaction will constitute a fundamental change pursuant to the policies of the Canadian Securities Exchange and is expected to require the approval of Bluesky shareholders. The proposed transaction will be non-arm's-length and will be subject to the necessary regulatory approvals, including final acceptance from the exchange. Following completion of the proposed transaction, the resulting issuer will carry on the business currently carried on by ChessGold.

Pursuant to the terms of the LOI, it is intended that the proposed transaction be effected by way of a three-cornered amalgamation, share exchange, plan of arrangement or such other transaction structure as will result in ChessGold becoming a wholly owned subsidiary of the company or otherwise combining its corporate existence with that of the company. The final structure of the proposed transaction is subject to receipt by the parties of tax, corporate and securities law advice and will be agreed to pursuant to definitive agreement in respect of the proposed transaction.

There are currently 74,478,958 common shares of Bluesky issued and outstanding. Pursuant to the terms of the LOI, the company will issue an aggregate of 10 million Bluesky at a deemed price of 10 cents per Bluesky share to the holders of the issued and outstanding common shares of ChessGold. Upon completion of the proposed transaction, the resulting holders of all ChessGold shares shall hold approximately 11.84 per cent of the issued and outstanding common shares of the resulting issuer, subject to adjustment in certain circumstances. Following closing of the proposed transaction, the company will also issue 20 million warrants to purchase common shares in the resulting issuer to the principal of ChessGold. The terms of the milestone warrants will be negotiated between the parties and agreed to pursuant to the definitive agreement and the milestone warrants will be held in escrow and become exercisable in tranches upon the achievement of certain milestones by the resulting issuer.

In connection with the proposed transaction, subject to receipt of applicable approvals, the resulting issuer expects to effect a name change to "ChessGold Inc." The composition of the board of directors of the resulting issuer, as well as the retention of any officers or directors, will be negotiated between the parties in good faith. Upon entering into the definitive agreement, the company will issue a subsequent news release containing the details of the definitive agreement. No finders' fees of any kind shall be paid as a direct result of, or in association with, the proposed transaction. Furthermore, it is anticipated that the definitive agreement will include requirements that certain shareholders of ChessGold enter into escrow agreements whereby shareholdings in the resulting issuer are escrowed over a 12-month period.

Completion of the proposed transaction is subject to a number of conditions precedent, including but not limited to, the parties entering into a definitive agreement, as well as receipt of all required shareholder, regulatory and other approvals. There can be no assurance that the proposed transaction will be completed as proposed or at all.

Concurrent financing

Prior to or concurrently with the closing of the proposed transaction, the company intends to complete a non-brokered private placement of units of the company to be completed on or before closing of the proposed transaction at an issue price of 10 cents per unit, for gross proceeds of up to $3-million. In addition, the board of directors of the company has approved an overallotment of 25 per cent of the units.

Each unit will consist of one common share of the company and one common share purchase warrant. Each warrant will entitle the holder to purchase one common share at a price of 13 cents per warrant share until the date which is 24 months following the closing of the offering. The expiry date of the warrants may be accelerated by the company if the volume weighted average price of the common shares on the exchange is greater than or equal to 30 cents over a consecutive 30-day period. If this occurs, the company may accelerate the expiry date of the warrants by issuing a press release announcing the reduced warrant term whereupon the warrants will expire on the 10th trading day after the date of such press release.

Finders' fees may be paid in connection with the offering, in accordance with the policies of the exchange.

The proceeds of the offering will be used to finance the expenses of the proposed transaction and the offering and the working capital requirements of the resulting issuer.

About Bluesky Digital Assets Corp.

Bluesky Digital Assets has created a high-value digital enterprise at the intersection of artificial intelligence, Blockchain and Web3 business solutions. Leveraging its success as an early adopter providing proprietary technology solutions, Bluesky has invested in its road map. Bluesky's platform, BlueskyINTEL, is well positioned to leverage the current exponential growth of AI- and blockchain-based technologies through a tightly focus-built collaborative platform.

We seek Safe Harbor.