Financing Will Underpin Development of FinTech Ecosystem of Products and Services
Bitcoin Well Inc., a technology company building and utilizing products that offer safe and easy ways to buy, sell and use Bitcoin, is pleased to announce a CDN$5.0 million secured convertible debenture at a conversion price of $0.30.
The Convertible Debenture will be issued in up to three tranches. The first tranche in the principal amount of CDN$1.5 million was issued to Beyond The Rhode Corp. (“BTR”) on February 23, 2022. At the option of Bitcoin Well, the second tranche in one or more advances not to exceed the principal amount of CDN$2.0 million may be issued on or before March 31, 2022. Additionally, subject to TSX Venture Exchange approval and the consent of BTR, Bitcoin Well may request a third tranche in one or more advances from BTR not to exceed the principal amount of CDN$1.5 million on or before June 30, 2022.
Today bitcoin investors have limited ways to use the gold standard of cryptocurrency for daily needs such as bill payments, donations, online purchases of various products and services, etc. As the Bitcoin Well ecosystem of products and services evolves, we will be able to offer the convenience of modern banking coupled with the security and benefits of bitcoin which will allow users to interact with their bitcoin in a way that is familiar to them.
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The funds will be used for enhancement of the existing Bitcoin Well online product, user acquisition and general working capital. The Bitcoin Well ecosystem of products and services will offer users the ability to buy, sell and use bitcoin online with self-custodied blockchain technology and through a proprietary mobile app (“Rise Wallet”).
Our vision is that Rise Wallet, soon to be rebranded as Well Wallet, will provide superior personal financial app features for bitcoin. We plan to integrate various payment rails into the app to give users a simple and trusted platform to buy and sell bitcoin, alongside features they are used to having available on their modern banking apps.
“The industry is missing a coherent account system that allows customers to interact with bitcoin like they do with dollars,” said Adam O’Brien, Founder & CEO of Bitcoin Well. “Creating a seamless customer experience to not only buy and sell, but use bitcoin in a safe and convenient way, will scale globally, and is necessary to realize our vision of a financially sovereign world. We are essentially building a product that looks and feels like a bank account, but gives users full control of their money with Bitcoin technology.”
The Convertible Debenture will mature on February 23, 2025, subject to two (2) automatic one (1) year extensions (the “Maturity Date”). The Convertible Debenture will bear interest at 10% per annum, payable in cash monthly in arrears. The principal amount of the Convertible Debenture will be convertible, in whole or in part, at the option of holder, into common shares of Bitcoin Well (the “Common Shares”) at a conversion price of CAD$0.30 per Common Share, subject to adjustments in certain circumstances. Any adjustments will be subject to TSXV review and acceptance. Bitcoin Well has the right to force conversion of the principal amount if the volume weighted average trading price for the Common Shares for ten (10) trading days equals or exceeds CAD$0.60 per Common Share. Bitcoin Well also has the option to repay any amounts of the Convertible Debenture with no penalty at any time after February 23, 2023.
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The Convertible Debenture provides for the payment of a monthly royalty to the holder equal to: (A) 20% of the gross profit, defined as the revenue generated less the cost of the coins (estimated to be the equivalent of 60 bps of total revenue) generated from the online ecosystem of Bitcoin Well and affiliates from the date hereof until August 23, 2023; and (B) between 12-20% of Gross Profit (estimated to be between 36 and 60 bps of total revenue) from August 23, 2023 until the latter of three (3) months after the most recent conversion date or the Maturity Date. No royalty payment shall be made if the aggregate amount of all interest payments, future interest payments and royalty payments would exceed 24%.
The Convertible Debenture and the underlying Common Shares will be subject to a four (4) month hold period from the applicable date of advance. The Convertible Debenture is only transferable with the consent of Bitcoin Well. The Financing replaces the convertible debt financing previously announced by Bitcoin Well on December 6, 2021.
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