08:27 AM EST, 03/08/2024 (MT Newswires) -- Cathedra Bitcoin ( CBTTF ) , a diversified Bitcoin mining company, overnight Thursday said that it has signed a binding share exchange agreement for a merger with Kungsleden Inc., a developer, and operator of alternative high-density compute infrastructure.

Under the share exchange agreement, it is expected that Cathedra will buy all of the outstanding shares of Kungsleden from Kungsleden shareholders in exchange for multiple voting shares of Cathedra.

The transaction will constitute a reverse takeover of Cathedra, such that, upon closing, the former Kungsleden shareholders will own about 77.5% of the equity of Cathedra as it exists on closing and Kungsleden will become a wholly-owned subsidiary of the resulting issuer, with the board of the resulting issuer directing the operations of Cathedra and Kungsleden.

Upon completion of the transaction, the resulting issuer is expected to be a Tier 2 technology issuer listed on the TSX Venture Exchange.

The transaction, which is expected to close in the second quarter, is expected to establish the resulting issuer as a developer and operator of data center infrastructure for the digital economy, with a focus on bitcoin mining.

The resulting issuer will carry C$5.7 million of total debt, consisting entirely of senior secured convertible debentures issued by Cathedra to a certain investor in November 2021.

The share exchange agreement provides that all issued and outstanding common shares of Kungsleden will be exchanged for multiple voting shares of Cathedra, with each common share of Kungsleden being exchanged for about 8.17 multiple voting shares of Cathedra, such that the total consideration payable in connection with the transaction is expected to be about 8.2 million multiple voting shares, which will be convertible into about 817 million subordinate voting shares.

After the closing of the deal, the shares of the resulting issuer will continue to trade on the TSX-V under the ticker "CBIT" and on the OTCQB Venture Market under the ticker "CBTTF."

Upon closing of the deal, Antonin Scalia will serve as chief executive officer and director of the resulting issuer, Thomas Armstrong will serve as president, chief operating officer, and director, and Inar Kamaletdinov will serve as chief financial officer.

Scalia is currently serving as CEO of Cathedra Bitcoin ( CBTTF ) and Thomas Armstrong is the current president and COO. Kungsleden co-founders Thomas Masiero and Gavin Qu will join the board as co-chairmen.