Cryptocurrency-focused fintech company Wellfield Technologies Inc. (TSXV: WFLD) (OTCQB: WFLDF) (FSE: K8D) closed its acquisition of Alberta-based digital asset custodian, Brane Trust Company for a total of CAD$9.9 million.
The company announced on Tuesday that the acquisition will be paid for in a mix of cash and convertible debentures. The debentures are for CAD$8.4 million and CAD$1.3 million, while the cash amount is $150,000 and payment of Brane’s outstanding liabilities at $90,000.
The conversion ratio on the debentures is determined by dividing the principal amount to be converted by either CAD$0.25 per share or the maximum discounted market price based on policies put forth by the TSX Venture Exchange.
As per the terms outlined in the definitive agreement, the first debenture will mature two years after the transaction’s closing date, bearing no interest and remaining convertible at any time under the conversion right. However, the second debenture will mature six months after the transaction’s closing, with no interest accrued. It can be repaid in cash at the company’s discretion or converted at any time.
Incorporated in October 2021, the Alberta Ministry of Treasury Board and Finance bears responsibility for regulating Brane Trust. The company’s primary purpose is in providing custody for digital assets. The Alberta Government is currently in the final registration process with Brane Trust, and Brane Trust will become a regulated custodian for digital assets upon its completion.
This qualification will enable Brane Trust to offer regulated custody services for crypto asset trading platforms and exchange-traded funds (ETFs).
Under Wellfield’s ownership, Brane Trust will maintain its independent operation overseen by a board of directors.
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Brane Trust gives Wellfield access to institutional investment
The angle here isn’t the small time retail investment crowd. Brane Trust gives Wellfield access to the larger, more lucrative institutional investment set.
Brane Trust will benefit Wellfield by generating revenue through custody fees for holding digital assets for accredited investors.
The company will also offer its own custodial solution for products like VaultChain Gold. This will work to boost institutional sales and produce value by its alignment with a respected, regulated custodian. VaultChain Gold is a token allowing individuals to digitally own physical gold.
“Trusted, regulated, and highly secure custody continues to grow in importance as an essential pillar of the digital asset ecosystem,” said Levy Cohen, CEO of Wellfield.
“With the acquisition of Brane Trust, we are positioning Wellfield to meet demand from institutional investors and high net worth individuals – delivering a unique combination of decentralized finance solutions and regulated infrastructure.”
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