Bitcoin Well Inc. (TSXV: BTCW) (“Bitcoin Well” or
the “Company”), a company offering convenient, secure and reliable
ways to buy, sell and use bitcoin through a trusted Bitcoin ATM
network and suite of web-based transaction services, is pleased to
announce that it has entered into a share purchase agreement on
August 8, 2021 for the acquisition of Ghostlab Inc. (“Ghostlab”), a
software company that designs and develops software to improve the
functionality and accessibility of modern financial technology and
services, including Bitcoin ATM machines.
“Bitcoin Well’s potential acquisition of
Ghostlab will bring technology that makes bitcoin more accessible
and user friendly for the general public,” said Julian Klymochko,
Chairman of Bitcoin Well. “When acquired, the Ghostlab division of
Bitcoin Well will expand the future potential SaaS revenue stream
for Bitcoin Well, including from ATM software, merchant services
and additional crypto asset digital services.”
Ghostlab Acquisition
Overview
Built by bitcoin entrepreneurs, for bitcoin
entrepreneurs, Ghostlab works behind the scenes, building software
solutions for innovative financial service providers and has been
the trusted software provider to Bitcoin Well. Ghostlab enables, or
intends to enable, its customers to offer additional functionality
within existing businesses, hardware, and platforms, and provides
software which allows the operator’s users to access bitcoin. Adam
O’Brien and Dave Bradley (prior to his involvement with Bitcoin
Well) co-founded Ghostlab in 2019. On January 1, 2020, Bitcoin Well
spun-out its proprietary software development arm to Ghostlab and
Ghostlab rebuilt the existing software as well as developed
Ghostlabs' proprietary ATM software that enables bitcoin to be more
accessible and usable to the average person, but most importantly,
makes it easier for operators to manage their businesses. Ghostlab
was able to prove out the software concepts to the point where
Bitcoin Well believes that the software development arm has been
accordingly de-risked and it would be in the best interests of the
Company for Ghostlab to be directly contributing to the service
offerings provided by Bitcoin Well.
The purchase price for the non-arm’s length
acquisition of 100% of the issued and outstanding shares of
Ghostlab is based on an enterprise value of up to $3.2 million,
subject to the adjustments discussed below, and includes the
assumption of approximately $1.8 million in negative equity. The
aggregate consideration payable for Ghostlab will be as
follows:
- An amount equal to $800,000 payable in common shares of Bitcoin
Well ("Common Shares");
- The assumption of negative equity of approximately $1.8
million;
- An earn-out of up to $600,000 payable in Common Shares (the
“Earnout”). The Earnout is payable in equal installments of
$150,000 predicated on achieving Net Revenue (as defined in the
agreement1) of $600,000, $1.5 million, $3.6 million, and $8.0
million, respectively within a 12 month period, prior to the fourth
anniversary of the acquisition’s Effective Date.
____________________1 The share of the transaction, commission
or subscription commission revenue earned by Bitcoin Well utilizing
Ghostlab’s software regardless of whether the ATM machine or
website was owned or operated by Bitcoin Well or a third party.
In the event the negative shareholders’ equity
of Ghostlab exceeds $1.8 million, the amount of the Earnout shall
be reduced proportionately for every dollar of negative equity in
excess of $1.8 million.
The number of Common Shares issuable pursuant to
this acquisition, including pursuant to the Earnout, will be
determined using the closing price of the Common Shares on the TSXV
Venture Exchange (“TSXV”) on the 11th day of trading of Bitcoin
Well, or such other price as may be prescribed by the TSXV. As the
Common Shares commenced trading on July 30, 2021, this mechanism
shall allow for 10 full trading days of the Bitcoin Well Common
Shares to occur prior to setting the price per Common Share for the
transaction.
Each of Adam O’Brien, Chief Executive Officer of
Bitcoin Well and Dave Bradley, Chief Revenue Officer of Bitcoin
Well, own 100% of the common shares of Ghostlab. Therefore, the
transaction is a related party transaction under Multilateral
Instrument 61-101. For the transaction, Bitcoin Well is relying on
the exemptions contained in sections 5.5(a) and 5.7(a),
respectively, of Multilateral Instrument 61-101 from the valuation
and minority shareholder requirements of that instrument as they
apply to related party transactions since the fair market value of
the acquisition is significantly less than 25% of the market
capitalization of Bitcoin Well. The acquisition of Ghostlab was
approved by the board upon recommendation of the independent
special committee in accordance with the Company's related-party
transaction policy.
Completion of the acquisition of Ghostlab is
subject to, among other things, customary closing conditions and
regulatory approvals, including the approval of the TSXV. There can
be no assurance that these conditions precedent will be satisfied
or that the proposed acquisition will be completed as proposed or
at all.
About Bitcoin Well
Bitcoin Well offers convenient, secure and
reliable ways to buy and sell bitcoin through a trusted Bitcoin ATM
network and suite of web-based transaction services. The Company
generates revenue and based on management’s assessment of
publicly-available data, is the first publicly traded Bitcoin ATM
company in the world, with an enterprising consolidation strategy
to deliver accretive and cost-effective expansion in North America
and globally. As leaders of the longest-running, founder-led
Bitcoin ATM company in Canada, management of Bitcoin Well brings
deep operational capabilities that span the entire value chain
along with access to proprietary, cutting-edge software development
that supports further expansion. Sign up for our newsletter and
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Contact Information For
investor information, please contact:
Bitcoin Well
10142 82 Avenue NWEdmonton, AB T6E
1Z4bitcoinwell.cominvestors@bitcoinwell.com
Adam O’Brien, President & CEO or
Dave Bradley, Chief Revenue OfficerTel: 1 888 711
3866 ir@bitcoinwell.com
For media queries and further information, please contact:
Karen Smola, Director of MarketingTel:
587-735-1570k.smola@bitcoinwell.com
Reader Advisory / Forward-Looking
Statements
Statements in this press release regarding
Bitcoin Well which are not historical facts are “forward-looking
statements” that involve risks and uncertainties, such as the
timing of expansion plans and activities, the completion of the
Ghostlab acquisition and the terms thereof, the price per share of
Bitcoin Well issued under the Ghostlab acquisition, the number of
shares to be issued pursuant to the transaction, the payment of the
Earnout, the anticipated income stream to be generated for Bitcoin
Well as well as various other business objectives. Such information
can generally be identified by the use of forwarding-looking
wording such as “may”, “expect”, “estimate”, “anticipate”,
“intend”, “believe” and “continue” or the negative thereof or
similar variations. The forward-looking statements in this press
release were made in reliance of certain assumptions made by
management, including assumptions regarding, among other things,
the bitcoin market, the market for third party users of Ghostlab
software, the ability to protect intellectual property, Ghostlab's
competitive advantages and the ability of Bitcoin Well to manage
growth of its business as a result of the proposed transaction.
Since forward-looking statements address future events and
conditions, by their very nature, they involve inherent risks and
uncertainties such as the risk that the Ghostlab acquisition is not
completed or is not completed on the terms outlined in the share
purchase agreement. Actual results in each case could differ
materially from those currently anticipated in such statements due
to factors such as: (i) adverse market conditions; (ii) the need
for additional financing; (iii) difficulties obtaining TSXV
approval of the Ghostlab acquisition; and (iv) changes in laws and
regulations. These forward-looking statements are made as of the
date of the press release and except as required by law, Bitcoin
Well does not intend to update any changes to such statements
whether as a result of new information, future events or otherwise.
These factors should not be construed as exhaustive.
Neither TSXV nor its Regulation Services
Provider (as that term is defined in policies of the TSXV) accepts
responsibility for the adequacy or accuracy of this release.
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