- Positions Wellfield to wholly own Canada's second qualified digital asset custodian, subject to final registrations and regulatory approvals.
- Significant untapped opportunity to monetize Wellfield Capital's base of high net worth and institutional customers.
- Provides custodial capabilities for Wellfield's plan to enable VaultChain Gold ™ on public blockchains.
- Enables Wellfield to capture custodial demand (via Brane Trust) and non-custodial demand (via Wellfield Capital) as the decentralized finance and digital real world asset ecosystems continues to evolve.
Toronto, Ontario--(Newsfile Corp. - July 26, 2023) - Wellfield Technologies Inc. (TSXV: WFLD) (OTCQB: WFLDF) (FSE: K8D) (the "Company" or "Wellfield") today announced that it has signed a definitive agreement (the "Definitive Agreement") with Brane Inc. ("Brane") and Big Index Inc., a wholly owned subsidiary of Brane (together with Brane, the "Vendors") to acquire all of the issued and outstanding securities of Brane Trust Company Ltd. ("Brane Trust"), and certain other assets, including but not limited to, all of the owned intellectual property, of the Vendors (collectively, the "Purchased Assets"), aiming to establish and operate Canada's second qualified digital asset custodian (the "Transaction"). Brane Trust, a wholly owned subsidiary of Brane Inc., is a trust company regulated by the Alberta Ministry of Treasury Board and Finance (the "Alberta Government") for the purpose of digital asset custody. Incorporated in October 2021, Brane Trust is in the process of registration with the Alberta Government, which, once completed, will result in Brane Trust becoming a regulated custodian for digital assets. Under Wellfield's ownership, Brane Trust will continue the process to become a "qualified custodian" as such term is defined in National Instrument 31-103 - Registration Requirements, Exemptions and Ongoing Registrant Obligations, and National Instrument 81-102 - Investment Funds, enabling Brane Trust to provide industry-leading, regulated custody for crypto asset trading platforms and exchange-traded funds (ETFs).
Brane Trust will operate independently under Wellfield's ownership, with a distinguished board of directors dedicated to ensuring custodial best practices, including industry-leading protection of client assets through regulatory compliance, strict segregation of duties, and secure technology.
Pursuant to the Definitive Agreement, the Company will acquire the Purchased Assets in exchange for the issuance by the Company of: (i) a $8,400,000 convertible debenture (the "First Convertible Debenture"), convertible at any time, at the option of the Company (the "Conversion Right"), into such number of common shares in the capital of the Company (the "Common Shares") equal to the quotient obtained by dividing (a) the principal amount to be converted by (b) the conversion price, at the sole direction of the Company, of either: $0.25 per Common Share; or the maximum applicable discounted market price according to the policies of the TSX Venture Exchange (the "TSXV"); (ii) a $1,350,000 convertible debenture (the "Second Convertible Debenture", and together with the First Convertible Debenture, the "Convertible Debentures") convertible at any time pursuant to the Conversion Right, according to the same terms as the First Convertible Debenture; (iii) cash payment of $150,000; and (iv) the assumption and payment of approximately $90,000 outstanding liabilities of Brane Trust (collectively, the "Consideration"). The Consideration represents an agreed upon value of approximately $9,990,000.
Pursuant to the terms of the Definitive Agreement, the First Convertible Debenture will mature 2 years after closing of the Transaction, bear interest at a rate of 0% per annum and will be convertible at any time pursuant to the Conversion Right, and the Second Convertible Debenture will mature 6 months after closing of the Transaction, bear interest at a rate of 0% per annum, will be repayable at any time at the option of the Company in cash and convertible at any time pursuant to the Conversion Right.
Closing of the Transaction is subject to a number of customary conditions, including receipt of all necessary corporate and regulatory approvals, in particular the approval of the Alberta Government and the TSXV. The Convertible Debentures will be subject to a statutory hold period of four months plus a day from the date of issuance in accordance with applicable securities legislation.
INFOR Financial Inc. and FRNT Financial Inc. acted as financial advisors to the Vendors in connection with the Transaction.
Levy Cohen, CEO of Wellfield, commented, "Wellfield sees the future of capital, transactions, and liquidity firmly embedded in blockchain and decentralized technologies, but we also understand and anticipate consistent demand from high-net-worth individuals and institutional investors for reliable digital asset custody services. With the acquisition of Brane Trust, we position Wellfield to offer this discerning client base the best of both worlds: access to the best of decentralized finance and, when needed, the reassurance of having their assets safeguarded by a regulated custodian. As we continue to execute on our institutional decentralized finance strategy, we are excited to enrich our offerings to sophisticated investors and institutional customers and to welcome Brane Trust to Wellfield."
Adam Miron, Chair of the board of directors of Brane Trust, expressed, "Today marks a pivotal moment in the journey of Brane Trust. This acquisition by Wellfield underscores the progress we have made and the trust we have earned in the burgeoning realm of digital asset custody. We have been extremely impressed with Wellfield's vision, their team, and what they are building. We are thrilled to become part of their ongoing journey and are excited about the unique potential this partnership holds. This is just the beginning of a transformative era in digital asset management and custody services."
Matt Pierce, President of Brane Trust, added, "Our new relationship with Wellfield will build on the extensive work we've done to establish Brane Trust as a trusted, independent custodian for digital assets. We look forward to setting a new industry standard for excellence in safeguarding digital assets, while realizing new opportunities through Wellfield's commitment to research, development, and innovation."
Through the acquisition of Brane Trust and subject to regulatory approvals, Wellfield is expected to be well positioned to realize strong synergies, revenue-generating potential, and competitive differentiation, including:
- revenue from custody fees earned through regulated, third-party custody of digital assets for accredited investors;
- a wholly owned custodial solution for Wellfield's innovative digital real world asset products, including VaultChain Gold; and
- augmenting Wellfield's institutional sales capabilities and value proposition through affiliation with a respected, regulated custodian.
Regulatory trends in the U.S., Canada, and around the world point to the growing importance of qualified custody in the digital asset sector.
Combining Wellfield's unique combination of real-world assets and decentralized services with a qualified custody offering is expected to create a powerful value proposition that does not yet exist in the marketplace.
About Wellfield Technologies
Wellfield is an R&D focused Fintech company that operates on public blockchains including Bitcoin and Ethereum. The Company operates a regulated platform that onboards customers globally at scale, leveraging its proprietary decentralized technology to offer highly disruptive on-chain self-custody solutions. Wellfield operates through two brands: Coinmama, which with a growing base of more than 3.5 million registered users, is one of the most trusted and enduring global brands operating in the crypto space; and Wellfield Capital, which the Company announced in late 2022 to meet the needs of institutional users and professional investors.
About Brane Inc.
Founded in 2017, Brane Inc. is a carbon neutral Canadian fintech company, helping institutional clients unlock the opportunities of blockchain and digital assets. Brane Vault, its core digital asset custody technology, is third-party certified to stringent global standards including ISO 27001, ISO 27017, and NIST CSF Tier 4. Brane has been recognized as one of Canada's Best Workplaces in Financial Services and Start-Ups categories by Great Place to Work®, and one of Canada's 10 Best and Brightest New Innovators by Canadian Business magazine.
For further information contact:
Wellfield Technologies Inc.
Levy Cohen, CEO
Ryan Graybill, Investor Relations
Cautionary Notice on Forward-Looking Statements
This news release contains statements that constitute "forward-looking information" ("forward-looking information") within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking information and are based on expectations, estimates and projections as at the date of this news release. Any statement that discusses predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking information. Forward-looking information in this news release includes statements regarding: the closing of the Transaction; the receipt of approvals from the TSXV and the Alberta Government for the Transaction; Brane Trust becoming registered by the Alberta Government and a regulated custodian for digital assets; Brane Trust continuing the process to become a qualified custodian under applicable securities legislation; the ability of Brane Trust to provide regulated custody for crypto asset trading platforms and exchange-traded funds; post-Transaction closing objectives of the Company and business; the independent operation of Brane Trust; the Company's ability to realize strong synergies, revenue-generating potential, and competitive differentiation through the acquisition of Brane Trust; the expectation of additional revenues; the anticipated strategic, operational and competitive benefits of the Transaction, receiving applicable regulatory, corporate and approvals associated therewith, which are based on the Company's current internal expectations, estimates, projections, assumptions and beliefs, which may prove to be incorrect. These statements are not guarantees of future performance and undue reliance should not be placed on them. Such forward-looking information necessarily involves known and unknown risks and uncertainties, which may cause the Company's actual performance and results in to differ materially from any projections of future performance or results expressed or implied by such forward-looking information. These risks and uncertainties include, but are not limited to: the successful completion of the Transaction; the receipt of required corporate and regulatory approvals, including approval by the Alberta Government and the TSXV; the failure of the Transaction to result in the anticipated benefits; the ability of the Company to raise additional capital to fund future operations; compliance with extensive government regulations, domestic and foreign laws and regulations adversely affecting the Company; the decentralized finance industry generally, in Canada and abroad; and general business, financial market, economic, competitive, political and social uncertainties. There can be no assurance that forward-looking statements will prove to be accurate, and actual results and future events could differ materially from those anticipated. Readers are cautioned that the foregoing list is not exhaustive and readers are encouraged to review the disclosure documents accessible on the Company's SEDAR profile at www.sedar.com. Readers are further cautioned not to place undue reliance on forward-looking information as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Except as required by law, the Company disclaims any intention and assumes no obligation to update or revise any forward-looking information.
All information contained in this news release with respect to Brane was supplied by Brane, for inclusion herein, and the Company and its directors and officers have relied on Brane for any such information contained herein.
Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) has approved nor disapproved the contents of this news release, nor do they accept responsibility for the adequacy or accuracy of this release.
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