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Bluesky Digital Assets Corp. (CSE: BTC) and ChessGold Inc. have revealed a non-brokered private placement involving subscription receipts and special warrants as part of their planned business combination. The financing aims to raise between C$750,000 and C$3,000,000 through a mix of cash subscriptions and debt settlements with creditors, directors, and officers from both companies.
Key Points
- Bluesky Digital Assets Corp. (CSE: BTC; OTCQB: BTCWF) announces joint financing and debt settlement with ChessGold Inc.
- Offering includes subscription receipts priced at C$0.0825 per unit and special warrants issued to creditors, directors, and officers in exchange for debt assignment.
- Minimum fundraising target is C$750,000; maximum aggregate proceeds including debt settlements reach C$3,000,000, equating to 9,090,910 to 36,363,636 combined subscription receipts and warrants.
- Upon escrow release condition fulfillment, subscription receipts convert into ChessGold Units, each containing one common share and one warrant exercisable at C$0.12 for 24 months.
Financing Structure Featuring Subscription Receipts and Special Warrants
The joint offering by Bluesky Digital Assets and ChessGold uses a dual-instrument approach to simultaneously raise capital and settle debts. Subscription receipts are priced at C$0.0825 each, serving as the base price for both cash subscriptions and special warrants issued to creditors, directors, and officers in exchange for debt assignments owed by Bluesky and ChessGold.
This flexible structure targets a minimum of C$750,000 in cash proceeds via subscription receipts, with the inclusion of debt settlements and special warrants increasing the maximum aggregate consideration to C$3,000,000. The non-brokered offering is conducted directly by the companies without intermediary involvement.
Conversion of Subscription Receipts and ChessGold Unit Details
Subscription receipts convert automatically into ChessGold Units once escrow release conditions are met or waived, as outlined in the subscription receipt agreement with the escrow agent. Each ChessGold Unit comprises one common share and one warrant, granting holders the option to purchase additional shares at C$0.12 within 24 months.
Debt Settlement and Creditor Participation Mechanism
A key element of this transaction is the integration of debt settlements, allowing creditors, directors, and officers to assign existing debts owed by Bluesky and ChessGold in exchange for special warrants at the deemed price of C$0.0825. This debt-for-equity swap aims to reduce cash outflows and strengthen the balance sheet while offering creditors equity participation in the combined entity.
The announcement does not disclose the total debt eligible for settlement or specific creditor identities, with these details to be finalized during the offering process.
Offering Size and Subscription Receipt Issuance Range
The offering's minimum issuance is 9,090,910 subscription receipts, generating approximately C$750,000 in cash proceeds. The maximum issuance caps at 36,363,636 combined subscription receipts and special warrants, corresponding to the C$3,000,000 aggregate consideration inclusive of cash and debt settlements. The final mix depends on subscription levels and creditor participation.
Relation to Bluesky's Previously Announced Business Combination
This financing and debt settlement offering is a critical component of the broader business combination between Bluesky and ChessGold, previously announced in press releases dated January 22, 2026; February 2, 2026; April 27, 2026; and July 13, 2026. The July 20, 2026 announcement marks a significant advancement in executing the transaction.
Escrow Release Conditions and Regulatory Compliance
The subscription receipt agreement includes escrow release conditions that must be satisfied or waived before conversion into ChessGold Units. These conditions typically involve regulatory approvals and transaction milestones. The offering is restricted from distribution in the United States, reflecting regulatory compliance considerations given Bluesky's listings on the CSE and OTCQB.
Warrant Exercise Terms and Impact on Equity Structure
Warrants issued under this offering are exercisable at C$0.12 per share for 24 months, providing holders the opportunity to acquire additional ChessGold shares if the market price exceeds the strike price. This structure aligns incentives and sets the potential dilution profile post-closing. Specific warrant quantities and dilution impacts will be detailed in definitive transaction documents.
Market Implications and Investor Insights
The combined financing and debt restructuring demonstrate Bluesky's and ChessGold's commitment to advancing their business combination amid capital and debt challenges. Creditors’ acceptance of special warrants indicates confidence in the combined entity’s future, while the pricing points will serve as benchmarks for valuation assessments by investors.
Next Steps: Execution of Subscription Receipt Agreement
Definitive documentation, including a subscription receipt agreement among Bluesky, ChessGold, and the escrow agent, is forthcoming. This agreement will govern subscription terms, escrow arrangements, conversion mechanics, and release conditions. Market participants should monitor upcoming announcements regarding agreement execution, offering completion, participant disclosure, and escrow condition satisfaction leading to conversion of subscription receipts into ChessGold Units.
