LUXXFOLIO Operations Update

The Bitcoin mining industry continues to face strong headwinds affecting all aspects of the industry and all participants in it. While the Company has achieved a significant reduction in its outstanding debt position, it has not been sufficient to enable it to meet its debt covenants. Luxxfolio’s principal operating subsidiary Westblock Capital Inc. and certain of its subsidiaries (together referred to as “Westblock”) have received written notice that certain events of default (the “Events”) have occurred under the Senior Secured Term Loan Facility Agreement (the “Loan Facility”) with CHP Agent Services Inc. (“CHP”). The Events were due to adverse changes to Westblock’s business, financial condition and prospects, as well as the related collateral valuation metrics in accordance with the provisions of the Loan Facility. CHP has demanded immediate repayment of the outstanding debt obligation of approximately $1,155,000, not otherwise due until November 30, 2023.

As part of the Loan Facility, CHP and Westblock entered into general security agreements granting CHP a security interest in Westblock’s assets. The Company is engaged with third parties to find a satisfactory solution to the matter; however, there is no assurance that such a solution will be achieved.

The Company also announces the following changes to the Board of Directors: Dr. Michael Byron resigned from the Board effective December 2, 2022. The Company thanks Dr. Byron for his service. Messer’s Geoffrey McCord and Kien Tran have been appointed to the Board, effective December 7, 2022. The Company is currently conducting a search for additional independent directors.