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XTM Signs Deal to Acquire World-Class Earned Wage Access Company QRails

QRails’ AnyDay™ Product is a Leading Earned Wage Access (EWA) Brand and Has Been White-labelled For Some of the World's Largest HR & Payroll Solution Providers

Last Updated: 25.3.2024 2:25

XTM Inc. (CSE: PAID) (OTCQB: XTMIF) (FSE: 7XT), a Miami and Toronto-based Fintech creator of payment innovations and mobile solutions geared explicitly towards service industries including hospitality, personal care and other service providers, announced that it has entered into a definitive agreement dated June 15, 2023, to acquire all of the issued and outstanding securities of QRails, a prepaid payments issuer-processor and one of the first vertically integrated providers of earned wage access (EWA).

The securities of QRails will be acquired from its current shareholders for total consideration of US$3,500,000, consisting of US$100,000 in cash with the remaining US$3,400,000 to be paid through the issuance of common shares of the Company at a deemed price of US$0.12 (CAD$0.16), resulting in 28,333,333 common shares being issued to the sellers. The transaction is expected to close on or about July 3, 2023, subject to reporting timelines and customary closing conditions.

The transaction is structured as an agreement and plan of merger by and between the Company, XTM USA Inc., QRails and XTM QRails USA, a wholly-owned subsidiary of the Company. Upon closing, QRails and SubCo will merge with the continuing merged entity becoming a subsidiary of the company.

In connection with the transaction, XTM has advanced to QRails bridge financing in the amount of US$1,507,000, evidenced by a promissory note due and payable in the event of the termination of the Purchase Agreement. The bridge financing is without interest until it becomes due, following which the principal attracts interest at a rate of 12% per year.

The transaction, the purchase agreement and the purchase price payable to the sellers was negotiated at arm’s length, and no finders fee is being paid in connection with the transaction.

QRails currently operates in the United States and the U.K., with offices in Denver, Kansas City and London, further accelerating XTM’s expansion plans in those markets with a qualified pipeline of new clients, representing hundreds of thousands of new users. QRails’ product AnyDay™ is a leading EWA brand and has been white-labelled for some of the world’s largest HR & Payroll Solution Providers.

Also Read: XTM Announces Planned Acquisition of World-Class Earned Wage Access Company QRails

Raj Sharmacharya, Managing Director of Veritas Prime, commented on the planned acquisition, saying:

“We are excited about how the merger of QRails and XTM will help extend earned wage access to our global client base. Our clients will benefit from the expanded product and support resources that the combined Company will bring.”

QRails is fully integrated into multiple payroll and time & attendance systems, providing workers with real-time access to available wages. Some of the product features included in AnyDay are:

  • Full suite of payment options, including virtual and physical cards, mobile wallet, card-to-card transfers
  • White-label opportunities for integration into existing apps using APIs and SDKs
  • Perfect for Workforce Management (WFM), Time and Attendance, and Payroll partners to include as part of the overall solution

QRails has not historically produced material revenue as it has been focusing on customer acquisition and entering into agreements with a large number of customers as it scales its operations and develops its technology assets. It is expected that QRails will have material revenue in 2023, with increases to revenue in 2024, together with opportunities for strategic cross-selling opportunities with XTM products and services. Information on QRails’ traction in the EWA space can be reviewed at the following link: QRails News.

The transaction will allow the teams to identify strengths and opportunities for growth in the AnyDay and Today Payment products and to, leverage these strengths and realize the economies of scale.

XTM CEO Marilyn Schaffer commented on the announcement, stating:

“The union with QRails brings us processing control, incredible talent, an established U.S. book of business and a complimentary economic model.”

QRails President Cary Strange added:

“Both the QRails and XTM teams are enthusiastic about the merger. Everyone is fully vested in our combined future. Our expanded geographic market, combination of market-defining solutions, and our competitive EWA position produces a winning combination.”

Upon the completion of the transaction, the board of directors of QRails will be replaced with nominees of the Company selected from the existing management and board of XTM.

XTM Qrails Investor Call

Management will host an investor call on Tuesday, June 20, 2023, at 11:00 am EST. Those interested in attending the call can register their spot by clicking here.

Shares of XTM last traded at $0.21 per share, up +10.53% on the day. YTD, PAID stock is up +90.91%.

Learn more about XTM: Website | Investor Deck | PAID Chart

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Ryan Troup

Ryan Troup is the Editor in Chief of Wealthy VC and TCI. Ryan has 15+ years of investing experience. Twitter | Email

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