Bitcoin Well Announces Closing of Strategic Ghostlab Inc. Acquisition, Expanding Software Development and Deployment Capabilities
September 13 2021 - 5:00PM
Bitcoin Well Inc. (TSXV: BTCW) (“Bitcoin Well” or
the “Company”), is pleased to confirm that it has closed the
previously announced acquisition of Ghostlab Inc. (“Ghostlab”) (the
“Acquisition”), a software company that designs and develops
software to improve the functionality and accessibility of modern
financial technology and services, including Bitcoin ATM machines.
Total consideration for the Acquisition was based on an enterprise
value of up to $3.2 million, satisfied through the issuance of
2,758,621 common shares of Ghostlab at a price of $0.29 per common
share, the closing price on the 11th trading day of the issuer, the
assumption of debt of $1.8 million and the provision of an
earn-out, all as more particularly described in the Company’s
August 11, 2021 press release. The common shares are subject to a
statutory four month hold period.
“Bringing Ghostlab fully in-house, positions
Bitcoin Well to further expand our products and services, and
affords the potential to create incremental revenue streams without
the high capital requirements associated with buying, branding and
deploying new machines,” said Adam O’Brien, CEO of Bitcoin Well.
“Given there is a natural timing difference between the capital
investment into machines and the revenue returns, being able to
deploy Ghostlab onto existing cash ATMs means we have the
opportunity for revenue without high capital costs. In addition,
our Ghostlab division is constantly engaged in R&D to provide
long-term, innovative solutions to support an increasingly digital
economy.”
Strategic Importance of
Ghostlab
Deploying Ghostlab software allows an ATM
operator’s customers to access bitcoin, thereby benefitting from
additional functionality within existing businesses, hardware, and
platforms. Ghostlab’s proprietary ATM software enables bitcoin to
be more accessible to the average person, and more importantly,
makes it easier for operators to manage their businesses. Bitcoin
Well believes that Ghostlab has sufficiently de-risked the software
to the point where it can now directly contribute to the service
offerings provided by Bitcoin Well. In addition, the Ghostlab
software has utility and benefit for other, third-party ATM
operators, representing an incremental revenue stream and valuable
data source for Bitcoin Well with limited capital outlay.
While retrofitting existing cash ATMs with
Ghostlab software to support bitcoin transaction capabilities
requires much less capital than deploying new machines, both
require time to establish the ATM as a revenue generator. For
context, the top ten performing ATM machines in the Bitcoin Well
portfolio have been in operation for at least 20 months, with half
of those coming from acquisitions and half from organic deployment.
Based on the revenue growth of Bitcoin Well to date, it is
estimated that realizing a return on invested capital from machine
deployment is typically approximately ten months, which further
supports our model of finding and completing accretive acquisitions
to support our continued growth. Applying the established processes
and operating procedures developed by Bitcoin Well onto acquired
ATMs has historically increased the average monthly sales volume in
only four weeks. Given our third-party research study, conducted by
Ipsos on behalf of Bitcoin Well in 2021, we know that 78% of
Bitcoin ATM users frequent the same machine on a regular basis, and
as a result, establishing trust within the local community is
key.
Related Party Disclosure
Each of Adam O’Brien, Chief Executive Officer of
Bitcoin Well and Dave Bradley, Chief Revenue Officer of Bitcoin
Well, previously owned 100% of the common shares of Ghostlab. As
such, the Acquisition was a related party transaction under
Multilateral Instrument 61-101. Bitcoin Well relied 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 was significantly less than 25% of the market
capitalization of Bitcoin Well. The Acquisition was approved by the
board upon recommendation of an independent special committee in
accordance with the Company's related-party transaction policy.
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.com
Adam O’Brien, President & CEO or Tel: 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 expectations on
timing of revenue generation, expectations on capital costs of the
Company's activies, the payment of the earnout, the anticipated
income stream to be generated for Bitcoin Well, the ability of
Bitcoin Well to provide Ghostlab services to third parties and the
anticipated benefits therefrom , 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) changes to the anticipated costs to
develop, market and implement the technology; 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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