Clip Money Inc. and 13842053 Canada Corp. Announce Closing of $8.1 Million Subscription Receipt Financing

May 13, 2022 3:15 PM EDT | Source: 13842053 Canada Corp.

Vancouver, British Columbia--(Newsfile Corp. - May 13, 2022) - Clip Money Inc. ("Clip Money" or the "Company") and 13842053 Canada Corp. (formerly, 1290451 BC Ltd.) ("138") are pleased to announce the closing of the previously announced private placement of subscription receipts (the "Subscription Receipts") of Clip Money at a price of $1.00 per Subscription Receipt (the "Issue Price") for aggregate gross proceeds of approximately $8.1 million (the "Offering"), which includes a lead order from a strategic investor for $3 million. The Offering was completed in connection with Clip Money's proposed going public transaction (the "Proposed Transaction") to be completed by way of amalgamation with 138, which was previously announced on August 6, 2021. It is anticipated that the combined company resulting from the completion of the Proposed Transaction (the "Resulting Issuer") will be renamed "Clip Money Inc.", or such other name mutually agreed to by Clip Money and 138 and acceptable to the TSX Venture Exchange (the "TSXV").

Beacon Securities Limited (the "Lead Agent") acted as lead agent and sole bookrunner in connection with the Offering, together with a syndicate of agents including, Echelon Wealth Partners Inc., Canaccord Genuity Corp., INFOR Financial Inc., PI Financial Corp. and M Partners Inc. (together with the Lead Agent, the "Agents"). The Offering was carried out in accordance with the terms and conditions of an agency agreement dated May 13, 2022 (the "Agency Agreement") among Clip Money, 138 and the Agents.

The Subscription Receipts were created and issued pursuant to a subscription receipt agreement dated May 13, 2022 (the "Subscription Receipt Agreement") among Clip Money, 138 and TSX Trust Company (the "Escrow Agent"), in its capacity as subscription receipt and escrow agent. Upon satisfaction of the escrow release conditions (the "Escrow Release Conditions") in accordance with the Subscription Receipt Agreement, each Subscription Receipt will be automatically exchanged, without payment of any additional consideration and without further action on the part of the holder thereof, into one unit of Clip Money (each, a "Unit") with each such Unit being comprised of one common share in the capital of Clip Money (a "Common Share") and one-half of one Common Share purchase warrant (each whole warrant, a "Warrant"). Each Warrant will entitle the holder thereof to purchase one Common Share at a price of $1.50 for a period of 24 months following the satisfaction of the Escrow Release Conditions, subject to the Company's right to accelerate the expiry date of the Warrants in the event the volume-weighted average trading price of the common shares of the Resulting Issuer is greater than $2.00 for a period of 10 consecutive trading days. It is expected that on closing of the Proposed Transaction, each Common Share will be exchanged for one common share of the Resulting Issuer and each Warrant will be exchanged for one Warrant of the Resulting Issuer.

In the event that the Escrow Release Conditions are not satisfied prior to 5:00 p.m. (Toronto time) on the date that is 90 days after the closing of the Offering or such later date as Clip Money, 138 and the Lead Agent may agree (the "Escrow Deadline"), the Escrow Agent will return to the holders of Subscription Receipts an amount equal to the aggregate issue price of the Subscription Receipts held by them and their pro rata portion of any interest earned thereon. To the extent that the Escrowed Funds (as defined in the Subscription Receipt Agreement) are insufficient to pay such amounts to the holders of the Subscription Receipts, the Company will be liable for and will be required to contribute such amounts as are necessary to satisfy any shortfall.

The Proposed Transaction is expected to close prior to May 30, 2022. The Company has received conditional approval from the TSXV to list the common shares of the Resulting Issuer on the TSXV. Upon receipt of the final approval from the TSXV, the Resulting Issuer common shares will begin trading on the TSXV following closing of the Proposed Transaction.

As consideration for services provided under the Offering, the Company paid to the Agents cash fees in the amount of $127,523.76 and issued to the Agents an aggregate of 84,014 Subscription Receipts and 45,318 non-transferable broker warrants of the Company (the "Broker Warrants"). $24,974 of the cash fee will be held in escrow with the Escrow Agent and be released to the Agents upon satisfaction of the Escrow Release Conditions. Upon the satisfaction of the Escrow Release Conditions, each Broker Warrant will be exercisable for one Unit or equivalent security of the Resulting Issuer at the Issue Price (subject to any necessary adjustments).

The net proceeds of the Offering, when released to Clip Money, are expected to be used for network expansion and customer acquisition, new unit capital expenditures, business operations and technology, and for general corporate purposes.

Further details of the Offering, Proposed Transaction and the business and operations of Clip Money (including applicable financial statements) will be included in subsequent news releases and other public filings.

For more information please contact:

13842053 Canada Corp.
Michael Lerner
Chief Executive Officer

Clip Money Inc.
Joseph Arrage
Chief Executive Officer

About Clip Money

Clip Money Inc., improves the business banking experience for small business customers through transformational digital services. Clip increases access and lowers fees for all parts of the business banking ecosystem ensuring everyone can take advantage of Clip's network scale and efficiency. The company is led by fintech and IT technology entrepreneurs, Joe Arrage and Daren Trousdell, and a team of industry product and IT technology experts.

All information contained in this news release with respect to Clip Money was supplied by Clip Money for inclusion herein and 138 has relied on the accuracy of such information without independent verification.

As noted above, completion of the Proposed Transaction is subject to a number of conditions. There can be no assurance that the Proposed Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the filing statement of Clip Money to be prepared in connection with the Proposed Transaction, any information released or received with respect to the Proposed Transaction may not be accurate or complete and should not be relied upon.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) has in any way passed upon the merits of the Proposed Transaction nor accepts responsibility for the adequacy or accuracy of this news release.

This news release does not constitute an offer to sell, or a solicitation of an offer to buy, any securities under the Financings in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

Cautionary Note Regarding Forward-Looking Information

This press 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 to be achieved) are not statements of historical fact and may be forward-looking information.

More particularly and without limitation, this press release contains forward-looking statements concerning the Proposed Transaction and the Offering. In disclosing the forward-looking information contained in this press release, each of the Company and 138 has made certain assumptions, including that: all necessary shareholder and regulatory approvals for the Proposed Transaction will be received, including the final approval of the TSXV with respect to the listing of the Resulting Issuer common shares; and the Proposed Transaction will be completed on mutually acceptable terms and within a customary timeframe for transactions of this nature and in any event prior to the Escrow Deadline. Although the Company and 138 believe that the expectations reflected in such forward-looking information are reasonable, they can give no assurance that the expectations of any forward-looking information will prove to be correct. Known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking information. Such factors include, but are not limited to: availability of financing; delay or failure to receive third party consents or regulatory approvals; and general business, economic, competitive, political and social uncertainties. There can be no certainty that the Proposed Transaction or the Offering will be completed on the terms mutually satisfactory to the parties or at all. Accordingly, reader should not place undue reliance on the forward-looking information contained in this press release. Except as required by law, each of the Company and 138 disclaims any intention and assumes no obligation to update or revise any forward-looking information to reflect actual results, whether as a result of new information, future events, changes in assumptions, changes in factors affecting such forward-looking information or otherwise.


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