Vancouver, BC, Canada – TheNewswire - January 08, 2024 – Sparx Technology Inc. (TSXV:SPRX) (“Sparx” or the “Company”) announces that it has entered into a binding letter of intent dated January 07, 2024, with Blok Sports LLC (“Blok”), a private, arm’s length company with a head office in Los Angeles, California, to sell its operating assets, including all of the issued and outstanding shares of its U.S operating subsidiary, iPowow USA Inc. (“iPowow”), to Blok (the “Sale Transaction”).  

Blok is an early-stage, venture backed technology company established in 2019 by Mitchell Chun, it’s current CEO, that has developed a suite of social sports betting, fan engagement, and AI-driven content and analytics solutions.  Their core offering is a regulated decentralized sports betting exchange developed using next-generation blockchain technology to ensure an unparalleled level of trust, fairness, and transparency for its users around the globe.

Pursuant to the Sale Transaction Sparx’s Canadian operating subsidiary, Sparx Technology Corp. (“Subco”) will transfer all of its operating assets and certain liabilities to iPowow, prior to its acquisition by Blok. Certain liabilities of Sparx will also be transferred to iPowow prior to completion of the Sale Transaction.  It is anticipated that following completion of the Sale Transaction Sparx will have no operating assets and no material liabilities.  Subject to the approval of the TSX Venture Exchange (the ‘Exchange”), the listing of Sparx’s common shares on the Exchange are expected to transfer to NEX.

It is also anticipated that an aggregate of 34,127,103 currently outstanding common shares of Sparx will be cancelled on closing of the Sale Transaction, pursuant to the terms of a Surplus Escrow Agreement dated March 23, 2022.

As consideration for the Sale Transaction, Sparx is expected to receive approximately 14% of Blok outstanding common units on a post-transaction basis, which is subject to increase upon the satisfaction of certain revenue related criteria.

The Sale Transaction is subject to a number of conditions, including: (i) completion of a US$500,000 financing by Blok; (ii) the receipt by Sparx of an independent fairness opinion in respect of the aggregate consideration (including the debt assumptions) to be received by Sparx in the Sale Transaction; and (iii) all necessary regulatory, creditor and shareholders approvals.

Sparx CEO, Alan Thorgeirson commented, “We are excited about the opportunity to build the Sparx business under the Blok umbrella and believe this reorganization transaction will allow our stakeholders an opportunity to realize further value through a stake in the combined entity.  We believe that the operating efficiencies and synergies to be achieved by the combination of the two companies will provide a stronger platform to attract additional financing and further grow the business.   Through this transaction, Sparx, as a public company, will position itself to pursue alternative transactions to enhance shareholder value.”

Sparx intends to convene a meeting of its shareholders in late February to consider the Sale Transaction and related matters. Further details will be made available once finalized.

On behalf of the Board

Al Thorgeirson

CEO and President

For further information, please contact:

Al Thorgeirson

CEO and President

(403) 471-3503

al@sparxtechnology.com

Investor relations

investor@sparxtechnology.com

ABOUT SPARX:

Sparx is an interactive media technology company whose principal activities are providing media companies and sports teams with technologies to engage audiences. The patented Sparx platform enables broadcasters, streamers, and video producers to engage viewers for longer, generate new revenue opportunities, and create lean-forward experiences for audiences eager to join the action. Millions of users can connect to the Sparx platform and interact simultaneously on their mobile phone, tablet, or computer anywhere in the world, in real time.

For more information about Sparx, visit the Company’s website at www.sparxtechnology.com

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

Forward-Looking Statements

Statements included in this news release, including statements concerning the Company’s plans, intentions, and expectations, which are not historical in nature, are intended to be, and are hereby identified as, “forward‐looking statements”. Forward-looking statements include, among other matters, the Sale Transaction. Forward‐looking statements may be, but are not always, identified by words including “anticipates”, “believes”, “intends”, “estimates”, “expects” and similar expressions. The Company cautions readers that forward‐looking statements, including without limitation those relating to the Company’s proposed completion of the Sale Transaction, and related matters,  are subject to certain risks and uncertainties that could cause actual results to differ materially from those indicated in the forward‐looking statements. There can be no assurance that any forward-looking statement will prove to be accurate or that management's assumptions underlying such statements, including assumptions concerning the Company, the Sale Tranaction or future developments, circumstances or results will materialize. The forward-looking statements included in this news release are made as of the date of this news release and the Company does not undertake to update or revise any forward-looking information included herein, except in accordance with applicable securities laws.