Aim Explorations Ltd.
NEX BOARD : AXN.H
TSX VENTURE : AXN.H

September 20, 2017 08:45 ET

Aim Explorations Ltd. Enters into a Letter of Intent with DMG Blockchain Solutions Inc. for Qualifying Transaction

- Transaction will position DMG to be one of the first publicly-listed, diversified blockchain and cryptocurrency mining and hosting companies

- Immediate MaaS (Mining as a Service) revenue from existing bitcoin mining operations

- Launching second state-of-the-art blockchain hosting (for bitcoin mining) facility in Western Canada

- Experienced management team with significant blockchain and bitcoin operational expertise

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Sept. 20, 2017) -

NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA

Aim Explorations Ltd. (NEX:AXN.H) ("AIM" and/or the "Company") is pleased to announce that it has entered into a letter of intent dated September 15, 2017 (the "LOI") with DMG Blockchain Solutions Inc. ("DMG") for a proposed transaction to acquire all of the issued and outstanding securities of DMG (the "Transaction"). Upon completion of the Transaction, the combined entity (the "Resulting Issuer") will continue the business of DMG as a "Technology" issuer. The Transaction is intended to constitute the "Qualifying Transaction" of AIM, as such term is defined in Policy 2.4 - "Capital Pool Companies" of the TSX Venture Exchange (the "Exchange").

The proposed Transaction is an Arm's Length Qualifying Transaction pursuant to the policies of the Exchange and, as such, the Company is not required to obtain shareholder approval for the proposed Transaction.

About DMG Blockchain Solutions Inc.

DMG is a full service blockchain and cryptocurrency company that manages, operates, and develops end-to-end digital solutions to monetize the blockchain ecosystem.

DMG was incorporated on September 7, 2016 and has operated its transaction verification services business (bitcoin mining) in Western Canada since October 2016 with its 260 servers. After completion of the Transaction, the Resulting Issuer intends to expand its current operations and/or enter into server hosting arrangements for the transaction verification services business.

DMG believes its smart contract-based blockchain technology can be used to monetize the Internet of Things (IoT), enabling intelligent Internet-connected autonomous devices to securely transmit and transact with low transaction fees for services executed by the network.

DMG is also building a blockchain platform for the agricultural and other supply chain management reliant industries, providing end-to-end key trust-based functions in a frictionless way such as identity management, provenance, automated contract execution and rules compliance.

Proposed Management of the Resulting Issuer

It is currently anticipated that the board of directors of the Resulting Issuer will consist of up to five (5) directors. Information with respect to certain of the proposed directors and senior officers of the Resulting Issuer is set forth below:

Chris Filiatrault, proposed Chairman (Tokyo, Japan)

Chris Filiatrault is a co-founder and director of DMG. For over 30 years, Mr. Filiatrault has been developing internet technology and software for the Japanese business market. In 1999, he founded Universal Objects Japan. In May of 2012, Mr. Filiatrault brought Bitcoin to the Japanese market and since then has become a respected international authority on Bitcoin, opening the first Bitcoin ATM in Tokyo in 2014, and authoring his first book about Bitcoin in Japanese.

Sheldon Bennett, proposed Director and CTO (British Columbia, Canada)

Sheldon Bennett has over 20 years of management experience leading international companies including PwC (PriceWaterhouseCoopers), Ernst & Young, Baker & McKenzie, Cisco Systems and Fonterra CIS.

For the past three years, Mr. Bennett has led BitFury's Canadian mining operations, where he was responsible for engineering and the setup of industrial bitcoin mining operations, which included government relations and power optimization. BitFury is one of the world's largest cryptocurrency mining companies. Mr. Bennett has an undergraduate degree from the University of British Columbia (1995), an Executive MBA from Athabasca University (2002) and is a Certified Fraud Examiner (since 2006).

Daniel Reitzik, proposed Chief Executive Officer & Director (British Columbia, Canada)

Daniel Reitzik is a co-founder and CEO of DMG Blockchain Solutions. Previous to this, Mr. Reitzik founded WindowActive Systems Inc., a touchscreen technology company with clients that include Walmart, RE/MAX and Glentel. Mr. Reitzik was also the CEO of the publicly-listed Digital Youth Network Corp., an early wireless and online social media company with more than 50,000 registered student users, in partnership with Rogers Wireless, Universal Music and Sony Ericsson.

Ryan Cheung, proposed Chief Financial Officer & Director (British Columbia, Canada)

Ryan Cheung is the founder and managing partner of MCPA Services Inc., Chartered Professional Accountants, in Vancouver, B.C. Mr. Cheung serves as a director, officer, or consultant for public and private companies, providing financial reporting, taxation and strategic guidance. He has been an active member of the Chartered Professional Accountants of British Columbia.

Justin Rasekh, proposed Director (British Columbia, Canada)

Mr. Justin Rasekh has been involved in the public company sector for 10 years. Mr. Rasekh is Co-founder of Fundamental Applications Corp. and served as its President and Chief Executive Officer until April 10, 2015. Mr. Rasekh, holds a Bachelors degree in Marketing from the University of Western Ontario, a Diploma in Mineral Exploration and Mining from the British Columbia Institute of Technology and has completed the Canadian Securities Course.

The Qualifying Transaction

Pre-Closing Capitalization of AIM

As of the date hereof, AIM's authorized share capital consists of an unlimited number of common shares ("AIM Common Shares") of which 7,928,000 AIM Common Shares are issued and outstanding. AIM also has 792,000 stock options and 258,000 common share purchase warrants outstanding.

Pre-Closing Capitalization of DMG

As of the date hereof, 28,500,000 common shares of DMG ("DMG Common Shares") are issued and no other rights to acquire securities of DMG exist.

Terms of the Transaction

Subject to the execution of a definitive agreement ("Definitive Agreement"), AIM proposes to acquire all of the issued and outstanding DMG Common Shares in exchange for 28,500,000 common shares of the Resulting Issuer (the "Payment Shares") based on a deemed issuance price of approximately $0.30 per Payment Share. The Payment Shares will be issued to the shareholders of DMG on a pro-rata basis. Pursuant to the Transaction, the shareholders of DMG will become shareholders of the Resulting Issuer.

Concurrent with closing of the Transaction, it is proposed that the parties will complete an equity financing (the "Concurrent Financing") by way of a non-brokered private placement relying on the prospectus exemptions pursuant to National Instrument 45-106 or other applicable laws, rules and regulations to raise a minimum of $3,000,000 and up to a maximum of $3,500,000 at an intended price of $0.30 per share, which is equal to the deemed issuance price of the Payment Shares. The structure of the Concurrent Financing will be determined by the parties on the basis of securities, tax and corporate law considerations, as well as the rules subject and policies of the Exchange. In connection with the Concurrent Financing, the Company intends to pay finders' fees. A finder's fee will be paid to Altus Capital Group in connection with the Transaction.

Within five (5) days following the execution of this LOI by the Parties, the Company shall pay to DMG a deposit of $25,000. The deposit will be refundable unless the Transaction does not close due to the Company not raising the funds necessary to close the Concurrent Financing, in which case the deposit will be non-refundable.

AIM intends to make application for an exemption from the Exchange's sponsorship requirements.

Trading in the common shares of AIM is presently halted. The common shares of AIM will remain halted until the Transaction is completed and approved by the Exchange.

The Transaction is conditional upon, among other things:

  1. the parties will have received all necessary regulatory and third-party consents, approvals and authorizations as may be required in respect of the Transaction, including, but without limitation, acceptance of the Exchange;

  2. completion of due diligence to the satisfaction of the parties;

  3. approval of the board of directors of each of AIM and DMG to final terms and conditions of the Transaction as set forth in the Definitive Agreement and all other necessary matters related thereto prior to the signing of the Definitive Agreement;

  4. the signing of the Definitive Agreement;

  5. completion of all matters, and the satisfaction of all conditions (unless waived in writing), under the Definitive Agreement required to be completed or satisfied on or before closing of the Transaction including but not limited to completion of the Concurrent Financing; and

  6. the shareholders of DMG will have approved the Transaction.

It is intended that the Resulting Issuer will be named "DMG Blockchain Solutions Inc."

AIM will issue additional news releases related to the final legal structure of the Transaction, financial information regarding DMG, and other material information as it becomes available.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein in the United States. The securities described herein have not been registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities law and may not be offered or sold in the "United States", as such term is defined in Regulation S promulgated under the U.S. Securities Act, unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration requirements is available.

Completion of the Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and, if applicable, pursuant to the requirements of the Exchange, shareholder approval. There can be no assurance that the Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the filing statement to be prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this news release.

Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Certain statements in this release are forward-looking statements, which include completion of the proposed Transaction and related financing, development of technologies, future plans, regulatory approvals and other matters. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future. Such information can generally be identified by the use of forwarding-looking wording such as "may", "expect", "estimate", "anticipate", "intend", "believe" and "continue" or the negative thereof or similar variations. The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Company, including but not limited to, business, economic and capital market conditions, the ability to manage operating expenses, security threats, and dependence on key personnel. Such statements and information are based on numerous assumptions regarding present and future business strategies and the environment in which the Company will operate in the future, including the demand for its products, anticipated costs, the ability to achieve goals and the price of bitcoin. Factors that could cause the actual results to differ materially from those in forward-looking statements include, failure to obtain regulatory approval, the continued availability of capital and financing, equipment failures, litigation, increase in operating costs, failure of counterparties to perform their contractual obligations, government regulations, loss of key employees and consultants, and general economic, market or business conditions. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement. The reader is cautioned not to place undue reliance on any forward-looking information.

There can be no assurance that the proposed Transaction or private placements will be completed or, if completed, will be successful.

The forward-looking statements contained in this news release are made as of the date of this news release. Except as required by law, the Company disclaims any intention and assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Additionally, the Company undertakes no obligation to comment on the expectations of, or statements made by, third parties in respect of the matters discussed above.

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