MGM Announces Proposed Business Combination with Digital Asset Platform Provider and $10 Million Private Placement

Toronto, Ontario--(Newsfile Corp. - February 22, 2021) - MGM Resources Corp. ("MGM") is pleased to announce that it has entered into a letter agreement (the "Letter Agreement") with an arm's-length, Ontario-based provider of a digital asset platform (the "Target"; together with MGM, the "Parties") that became effective and binding between the Parties on February 19, 2021. Under the Letter Agreement, the Parties will effect a business combination that, subject to certain conditions and applicable shareholder and regulatory approvals, will result in a reverse takeover of MGM by the Target and its shareholders (the "Proposed Transaction"). The resulting issuer from the Proposed Transaction (the "Resulting Issuer") will change its business from mining to the business of the Target. In addition, MGM is pleased to announce that on February 19, 2021, the Target completed a non-brokered private placement offering of subscription receipts for aggregate gross proceeds of $10,080,000 (the "Financing").

The Letter Agreement

Under the terms of the Letter Agreement, it is currently anticipated that the Proposed Transaction will be effected by way of a three-cornered amalgamation, share exchange, merger, amalgamation, arrangement or other similar form of transaction as is acceptable to the parties. In connection with the Proposed Transaction, MGM will reconstitute its board of directors and change its name to a name designed by the Target (the "Name Change") and the Resulting Issuer will conduct its business under the new name.

The Letter Agreement includes a number of conditions to the closing of the Proposed Transaction, including but not limited to, requisite shareholder approvals including the approval of the shareholders of the Target, the consolidation of MGM's common shares on a 67.82:1 basis (the "Consolidation"), the issuance of post-Consolidation MGM common shares to holders of the Target's common shares (the "Target Shares") on a 1:1 basis, approvals of all regulatory bodies having jurisdiction in connection with the Proposed Transaction, the completion of the Financing (which the Target completed February 19, 2021) and other closing conditions customary to transactions of the nature of the Proposed Transaction. MGM has called an annual general and special meeting of its shareholders for March 18, 2021 (the "Meeting"), and its shareholders will be asked to approve the following matters, among others, at the Meeting: the reconstitution of MGM's board of directors, the Name Change, the Consolidation, the adoption of an omnibus equity compensation plan, and a continuance of MGM from the Business Corporations Act (Alberta) to the jurisdiction of the Business Corporations Act (Ontario).

MGM is a reporting issuer under the securities laws of the Provinces of British Columbia and Alberta whose common shares have never been posted for trading on any marketplace. The Resulting Issuer will apply to list its common shares on the Canadian Securities Exchange (the "CSE") and, if and upon the satisfaction of the CSE's initial listing requirements, the common shares of the Resulting Issuer (the "Resulting Issuer Shares") are expected to begin trading on the CSE following the closing of the Proposed Transaction.

Subscription Receipt Financing

In connection with the Proposed Transaction, MGM and the Target announce today the completion of a private placement offering of 5,600,000 subscription receipts (each, a "Subscription Receipt") of the Target at a price of $1.80 per Subscription Receipt for aggregate gross proceeds of $10,080,000 (the "Financing"). Upon the satisfaction or waiver of, among other things, all of the condition precedents to the completion of the Proposed Transaction, each Subscription Receipt will be exchanged for one unit of the Target (a "Target Unit") with each Target Unit being comprised of one (1) common share of Target (a "Target Share") and one-half (1/2) of one (1) common share purchase warrant of the Target (each whole warrant, a "Target Warrant"). Each Target Warrant will be exercisable for one Target Share at an exercise price of $2.50 for a period of 36 months following the closing of the Proposed Transaction. Upon closing of the Proposed Transaction, the Target Shares and Target Warrants will be exchanged for Resulting Issuer Shares and Resulting Issuer warrants ("Resulting Issuer Warrants") on economically equivalent terms on a 1:1 basis. If the daily volume weighted average trading price of the Resulting Issuer Shares on the CSE for any 10 consecutive days equals or exceeds $3.00, the Resulting Issuer may, upon providing written notice to the holders of the Resulting Issuer Warrants, accelerate the expiry date of the Resulting Issuer Warrants to the date that is 30 days following the date of such written notice (the "Acceleration").

In connection with the Financing and on closing of the Proposed Transaction, the Target will pay cash finder's fees of $244,944 and issue an aggregate of 136,080 compensation options (each, a "Compensation Option"). Each Compensation Option entitles the holder to acquire a Target Unit, at an exercise price of $1.80 for a period of 36 months following the closing date of the Proposed Transaction. Upon closing of the Proposed Transaction, the Compensation Options will be exchanged for Resulting Issuer compensation options on economically equivalent terms on a 1:1 basis. The Compensation Options are subject to the same terms of Acceleration as the Resulting Issuer Warrants.

The net proceeds from the Financing will be used by the Resulting Issuer for working capital and general corporate purposes.

Immediately following the completion of the Proposed Transaction, it is expected that holders of the Target Shares will hold approximately 76.78% of the issued and outstanding Resulting Issuer Shares, holders of Subscription Receipts will hold approximately 20.48% of the Resulting Issuer Shares and current MGM shareholders will hold 2.74% of the Resulting Issuer Shares, in each case, on a non-diluted basis.

Listing Statement and Comprehensive News Release

In connection with the Proposed Transaction and pursuant to the requirements of the CSE, the Company intends to file a listing statement on its issuer profile on SEDAR (www.sedar.com), which will contain details regarding the Proposed Transaction, MGM, the Target and the Resulting Issuer. Investors are cautioned that, except as disclosed in the listing statement, any information released or received with respect to the Proposed Transaction may not be accurate or complete and should not be relied upon. There can be no assurance that the Proposed Transaction will be completed as proposed or at all.

The Parties will issue a comprehensive news release regarding the Proposed Transaction in due course.

Additional Information

All information contained in this press release with respect to MGM and the Target was supplied by the parties respectively, for inclusion herein, and each party and its directors and officers have relied on the other party for any information concerning the other party.

For additional information on MGM Resources Corp.:

Michael Lerner
Chief Executive Officer & Director
T: (416) 710-4906
E: mlerner10@gmail.com

About MGM

MGM Resources Corp.is a mineral exploration company with no current activities or operations and is not currently listed on a stock exchange.

Forward-Looking Statements

This news release contains "forward-looking information" within the meaning of applicable securities laws including statements regarding the terms and conditions of the Proposed Transaction, the listing of the Resulting Issuer Shares on the CSE, the use of proceeds from the Financing as well as information relating to the Target. The information about the Target contained in the press release has not been independently verified by MGM. Although MGM believes in light of the experience of its officers and directors, current conditions and expected future developments and other factors that have been considered appropriate, that the expectations reflected in this forward-looking information are reasonable, undue reliance should not be placed on them because MGM can give no assurance that they will prove to be correct. Readers are cautioned to not place undue reliance on forward-looking information. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, the risk that a closing condition to the Proposed Transaction is not satisfied or is not satisfied on a timely basis including, without limitation, the failure to obtain the requisite shareholder approvals, MGM being unable to complete the Consolidation or Name Change, the failure to obtain CSE listing approval or the failure to obtain all requisite regulatory approvals. The statements in this press release are made as of the date of this release. MGM undertakes no obligation to comment on analyses, expectations or statements made by third-parties in respect of MGM, the Target, their securities, or their respective financial or operating results (as applicable).

Not for distribution to United States newswire services or for dissemination in the United States.

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

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