Mr. Jason Ewart reports

HANK PAYMENTS ENTERS INTO NON-BINDING LOI TO ACQUIRE A TECHNOLOGY PLATFORM COMPANY

Hank Payments Corp. has entered into a non-binding letter of intent dated Aug. 19, 2024, for the acquisition of 100 per cent of the shares of a private technology company.

Transaction terms

The material terms and conditions outlined in the letter of intent are non-binding on the parties, and the letter of intent is, among other things, conditional on the execution of a definitive share purchase arrangement to be negotiated between the parties.

In connection with the proposed transaction, it is currently contemplated that all the issued and outstanding shares of the target will be acquired by the company. As consideration for the shares purchased, Hank will issue to the shareholders of the target that number of common shares of Hank that equates to a total equity value for the target of up to $7.2-million.

The target will also provide a mandatory advance of $250,000 to Hank to facilitate the closing, to be extinguished upon completion of the transaction.

The consideration shares of Hank will be issued to or immediately distributed or transferred to the shareholders of the target such that no one new entity will own directly or indirectly 10 per cent of Hank posttransaction. Certain escrow provisions are expected to be applied to the new shareholders created through this transaction.

Completion of the transaction is subject to a number of conditions, including, but not limited to, receipt of applicable regulatory approvals, completion of satisfactory due diligence, and the execution of the definitive agreement and related transaction documents.

In addition to all shares, the transaction includes a discounted license structure for secure, SOC II-compliant personal and business data storage, allowing Hank to avoid significant costs related to R&D (research and development) and intellectual property. The platform is expected to be leveraged by consumers and Hank, as well as driving multiple new revenue streams, leveraging the additional intellectual property purchased as part of the transaction.

The transaction is expected to close in September, 2024.

About Hank Payments Corp.

Hank is a North American leader in consumer fintech (financial technology) software-as-a-service (SaaS) and banking-as-a-service (BaaS) platforms that manages consumer cash flow and budgets on an automated basis using proprietary algorithms that collect, store and disburse cash as required to discharge obligations in a timely fashion. The Hank stack provides for several vertical market applications of the technology, with features specific to channels and enterprise accounts that allow those partners to operate new lines of business and revenue streams, using Hank. The partners benefit from new revenue streams and powerful insights that open up additional opportunities for partners to grow assets using Hank. The company operates exclusively across the United States, with certain leadership and technology functions in Toronto. Hank houses the complex technology, banking, treasury, customer service, sales and operations teams that acquire and service consumers. Hank currently charges upfront enrolment/set-up fees and recurring monthly fees based on the types and quantity of payments that Hank Payments administers for the consumer. The company acquires users through various channels including: (i) small- to medium-sized enterprises (SME partners); and (ii) large enterprise businesses. The company's BaaS model is emerging, which is expected to add additional fees, including software licensing and usage fees.

We seek Safe Harbor.