TAAL ANNOUNCES GOING PRIVATE TRANSACTION

TORONTO, Nov. 2, 2022 /CNW/ - TAAL Distributed Information Technologies Inc. (CSE: TAAL) (FWB: 9SQ1) (OTC: TAALF) ("TAAL" or the "Company"), today announced that it has entered into a definitive acquisition agreement (the "Acquisition Agreement") pursuant to which Calvin Ayre, who currently owns approximately 38.5% of the outstanding common shares of the Company (the "Common Shares"), will indirectly acquire all of the remaining Common Shares by way of a statutory plan of arrangement and take the Company private.

The parties to the Acquisition Agreement include the Company, Indigo IP Holdings Ltd. ("Indigo"), an entity 100% owned by Mr. Ayre, and 14487460 Canada Inc. (the "Acquiror"), a wholly-owned subsidiary of Indigo. Pursuant to Acquisition Agreement the Acquiror will purchase all of the Common Shares not held by Mr. Ayre at a price of C$1.07 per Common Share in cash pursuant to a court-approved plan of arrangement (the "Transaction"). The purchase price represents a premium of approximately 35.4% to the Company's closing share price on the Canadian Securities Exchange on November 1, 2022, the last trading day prior to today's announcement, and a premium of approximately 39.9% to the 10-day volume weighted average price on that date.

The Company's board of directors (the "Board") unanimously approved the Acquisition Agreement following a unanimous recommendation from a special committee of independent directors (the "Special Committee") comprised of Deborah Rosati, Marco Strub, Michael Darcy and Daniel Diemers constituted to review the Transaction. Both the Special Committee and the Board determined that the Transaction is in the best interests of the Company and fair to shareholders (other than Mr. Ayre, Indigo, the Acquiror and their affiliates) and unanimously recommend that shareholders vote in favour of the Transaction at the special meeting of shareholders to be held to approve the Transaction (the "Special Meeting").

Leede Jones Gable Inc., the Special Committee's independent financial advisor, has provided an opinion to the Special Committee that, as of November 2, 2022, and subject to the assumptions, limitations and qualifications to be set out in the fairness opinion letter, the consideration to be received by the Company's shareholders (other than Mr. Ayre) is fair, from a financial point of view, to such shareholders.

Deborah Rosati, director and Chair of the Special Committee, stated, "After careful deliberation, the Special Committee considers that the Transaction represents the best available path forward for the Company and its shareholders in the current circumstances. The Company will require access to significant additional capital in the near future to continue its operations, and the Special Committee noted the challenging market environment for obtaining any equity financing, and the uncertainty and cost that would be associated with obtaining any available debt financing. The Transaction will provide the shareholders with immediate and certain cash value in these current market conditions, while providing the Company with additional flexibility to operate as a private company in the hands of a committed long-term investor."

The Transaction is to be implemented by way of and subject to a court-approved plan of arrangement under the Canada Business Corporations Act. Completion of the Transaction requires approval by two thirds of the votes cast by shareholders, as well as the approval by a simple majority of votes cast by minority shareholders (which excludes Mr. Ayre, Indigo, the Acquiror and their affiliates) present (or represented by proxy) at the Special Meeting. The Transaction is also subject to court approval and the satisfaction of other customary closing conditions. The Company expects to mail an information circular for the Special Meeting in November 2022, and to hold the Special Meeting in late December 2022. If approved by Shareholders, the Transaction is expected to close shortly following the Special Meeting. Following closing it is expected that the Common Shares will be delisted from the Canadian Securities Exchange and application will be made for Taal to cease being a reporting issuer in Canada.

The Acquisition Agreement includes customary representations, warranties, covenants, indemnities, non-solicitation provisions, and conditions typical for transactions of this size, nature and complexity. The Acquisition Agreement may be terminated by, among other things: the Acquiror or the Company, if the acquisition has not closed by February 28, 2023; by either party by mutual written agreement or if the shareholders do not approve the acquisition; and by the Company, if the Company proposes to enter into a definitive agreement with respect to an unsolicited superior proposal, subject to a right of the Acquiror to match such superior proposal. There can be no assurances that the Transaction will be consummated in accordance with the terms of the Acquisition Agreement, or at all.

Further details regarding the terms of the transaction are set out in the Acquisition Agreement, which will be publicly filed by Company under its issuer profile on SEDAR at www.sedar.com. Additional information regarding the terms of the Acquisition Agreement, the background to the Transaction and the fairness opinion will be provided in the information circular for the special Meeting.

Leede Jones Gable Inc. provided the fairness opinion in connection with the Transaction. Blake, Cassels & Graydon LLP is acting as legal advisor to the Company, SkyLaw Professional Corporation is acting as legal advisor to the Special Committee and Fasken, Martineau, DuMoulin LLP is acting as legal advisor to Indigo. The Company's public filings are available at www.sedar.com.

TAAL Distributed Information Technologies Inc. delivers value-added blockchain services, providing professional-grade, highly scalable blockchain infrastructure and transactional platforms to support businesses building solutions and applications on the BSV platform, and developing, operating, and managing distributed computing systems for enterprise users. BitcoinSV Blockchain is the world's largest public blockchain by all major utility metrics, data storage, daily transaction volume, scaling ability, and average block size.

For more information please visit – www.taal.com/investors.

The Common Shares to be beneficially acquired by Mr. Ayre pursuant to the Transaction will be purchased by the Acquiror, for aggregate cash consideration of approximately $26.6 million. As of the date of this press release, Mr. Ayre holds 15,643,306 Common Shares representing approximately 38.5% of the issued and outstanding Common Shares. Immediately upon the closing of the Transaction, Mr. Ayre will beneficially, own or control, 100% of the issued and outstanding Common Shares.

Upon closing of the Transaction, the Acquiror and the Company intend to cause the Common Shares to cease to be listed on the Canadian Securities Exchange. This press release is also being issued pursuant to National Instrument 62-103 – The Early Warning System and Related Take-Over Bid and Insider Reporting Issuers in connection with the Transaction. An early warning report will be filed by Mr. Ayre with applicable Canadian securities regulatory authorities with respect to the foregoing matters, a copy of which will be available under the Company's issuer profile on SEDAR at www.sedar.com. To obtain copies of the early warning report, please contact Paul Rajchgod, Managing Director – Private Equity, at contact@indigoip.ag.

The Acquiror's address is Suite 410, Canada Place, Benjamin Lauchland Dr., St. John's, Antigua and Barbuda.

Certain statements included in this news release constitute "forward-looking information" as defined under applicable Canadian securities legislation. The words "will", "intends", "expects" and similar expressions are intended to identify forward-looking information, although not all forward-looking information will contain these identifying words. Specific forward-looking information contained in this news release includes but is not limited to statements regarding: the closing of the Transaction, the anticipated timing of various steps to be completed in connection with the Transaction (including the mailing of the information circular, the holding of the Special Meeting and the closing of the Transaction) and other statements that are not material facts. These statements are based on factors and assumptions related to historical trends, current conditions and expected future developments. Since forward-looking information relates to future events and conditions, by its very nature it requires making assumptions and involves inherent risks and uncertainties.

Actual results or events could differ materially from those contemplated in forward-looking statements as a result of, without limitation, the following: (i) the ability to secure the required shareholder or court approvals; (ii) the occurrence of a "Material Adverse Effect" (as defined in the Acquisition Agreement), the receipt of a superior proposal, or the failure by either party to satisfy any other closing condition in favour of the other provided for in the Acquisition Agreement, which condition is not waived; (iii) general business, economic, competitive, political and social uncertainties; and (iv) the future performance, financial and otherwise, of TAAL.

TAAL cautions that although it is believed that the assumptions are reasonable in the circumstances, these risks and uncertainties give rise to the possibility that actual results may differ materially from expectations. Material risk factors include, but are not limited to: (i) the possibility that the Transaction will not be completed on the terms and conditions thereof, or on the timing, currently contemplated, and that it may not be completed at all, due to a failure to obtain or satisfy, in a timely manner or otherwise, required shareholder and court approvals and other conditions of closing necessary to complete the Transaction or for other reasons; (ii) the possibility of adverse reactions or changes in business relationships resulting from the announcement or completion of the Transaction; (iii) the possibility of litigation relating to the Transaction; and (iv) risks inherent to the Company's business and/or factors beyond its control which could have a material adverse effect on the Company or the ability to consummate the Transaction.

For additional information with respect to risks and other factors which could occur, see the risks set out in TAAL's Annual Information Form for the financial year ended December 31, 2021 under the heading "Risk Factors" and elsewhere in TAAL's continuous disclosure filings available on the Company's issuer profile on SEDAR at www.sedar.com. Given these risks, undue reliance should not be placed on the forward-looking information contained herein. Other than as required by law, TAAL undertakes no obligation to update any forward-looking information to reflect new information, subsequent or otherwise.

The CSE, nor its Regulation Services Provider, accepts no responsibility for the adequacy or accuracy of this release.

SOURCE Taal Distributed Information Technologies Inc.

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