Hank Payments Completes Private Placement Offering

April 21, 2023 12:00 PM EDT | Source: Hank Payments Corp.

Toronto, Ontario--(Newsfile Corp. - April 21, 2023) - Hank Payments Corp. (TSXV: HANK) ("Hank" or the "Company"), is a North American leader in consumer Fintech Software-as-a-Service ("SaaS") in the Banking-as-a-Service ("BaaS") market segment. Hank platforms manage 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. Hank vertical market technology brings to bear enhanced features for Enterprise customers that wish to help their users and themselves manage payments and cash. Hank is pleased to announce it has closed a non-brokered private placement of 1,096 units ("Unit") for total gross proceeds of $1,096,000 (the "Offering"). The terms of the Offering are the same as the private placement offering the Company closed on December 16, 2022.

Each Unit consists of one $1,000 secured convertible debenture ("Debentures") and 3,333 common share purchase warrants ("Warrant"). The Debentures mature on and become payable on April 21, 2028, (the "Term") and bear interest at a fixed rate of 10% per annum, payable in arrears semi-annually in cash on December 31 and June 30 of each year. The Debentures are secured by the assets of the Company through a general security agreement and rank equally with all other Debentures. At any time during the Term, a holder of Debentures may elect to convert the outstanding net principal amount, or any portion thereof, into common shares at a conversion price of $0.075 per share during the first year and $0.10 per share thereafter (the "Conversion Price"). The Company may force the conversion of the principal amount of the then outstanding Debentures at any time at the Conversion Price on not less than 5 days' notice if the volume weighted average trading price of the common shares on the TSX Venture Exchange (the "TSXV") for any 10 consecutive trading day period is equal to or greater than $0.35. Each Warrant entitles the holder to purchase one common share of the Company at an exercise price of $0.10 per common share until April 21, 2025.

The proceeds from the Offering will principally be to expand the Company's portfolio of clients and for general working capital.

The Company paid a cash finder's fee of $18,550 and issued 185,500 finder's warrants ("Finder Warrants") equal to seven percent of the aggregate number of Units sold under the Offering attributable to the finder. Each Finder Warrant is exercisable to acquire one share of the Company for a period of two years from the closing date at an exercise price of $0.10 per share.

The issuance of the Convertible Debentures and the Warrants pursuant to the Offering were (and, if applicable, any underlying common shares and Warrants shall be) completed on a private placement and prospectus exempt basis, as applicable, such that the issuances are (or in the case of the Units and any underlying common shares and Warrants, shall be) exempt from any applicable prospectus and securities registration requirements.

All securities issued pursuant to the Offering are subject to a statutory hold period ending August 22, 2023. The Offering is subject to TSX Venture Exchange acceptance of regulatory filings. The securities offered pursuant to the Offering have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from the registration requirements. This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Further to its previous announcement March 2, 2023, the Company has filed an application to the TSX Venture Exchange for the repricing of up to 1,045,000 outstanding employee stock options ("Options") to $0.10 per option. The repricing remains subject to TSXV acceptance. The repricing excludes directors and insiders and applies to options previously granted to certain employees of the Company pursuant to the Company's stock option plan. The exercise price of $0.10 for the options is at a premium to the current market price. To retain valued team members in the context of a significant drop in the trading price of the Company's Common Shares on the TSXV, certain of the outstanding options no longer offer an adequate incentive to employees of the Company, as currently priced at $1.00. Recognizing that option grants are a critical element of the Company's compensation policy, the Board is of the view that it is in the best interest of the Company to reprice the outstanding options granted to certain employees of the Company, to ensure the exercise price of the options is more in line with the current market price of the Common Shares. The Company cancelled 725,000 options. Hank also granted to employees a total of 675,000 options, with an exercise price of $0.10 and an expiry date of April 21, 2025 and 1,000,000 restricted share units. The options and RSUs are subject to the standard provisions of the Hank's Omnibus Equity Incentive Plan.

Further to its previous announcement March 2, 2023, the Company has filed an application to the TSX Venture Exchange for the repricing of an aggregate of 3,142,500 outstanding common share purchase warrants of the Company (the "Warrants") issued pursuant to a warrant indenture dated October 13, 2021, between the Company and Computershare Trust Company of Canada, as warrant agent (the "Warrant Indenture") (the "Warrant Repricing"). The repricing remains subject to TSXV acceptance. In connection with the Warrant Repricing, the Company has adjusted the exercise price of the Warrants from $1.00 to $0.075 and amended the expiry date of the Warrants to add an acceleration clause such that in the event the closing price of the Company's common shares on the TSXV exceeds the warrant repricing by twenty-five percent (25%) for any ten consecutive trading days following the Warrant Repricing, the expiry date of the Warrants shall be accelerated from October 13, 2024 to a date that is 30 days following the seventh calendar day following the ten consecutive trading day period. All other terms of the Warrants remain unchanged. No Warrants subject to the Warrant Repricing are held by directors, officers and control persons of the Company, which represents nil% of these Warrants. The purpose of the Warrant Repricing is primarily to encourage the early exercise of such Warrants.

About Hank Payments Corp.

Hank Payments Corp (the Company or "Hank") is a North American leader in consumer Fintech 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 ("Partners") 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 USA, 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/setup fees and recurring monthly fees based on the types and quantity of payments that Hank Payments administers for the consumer (the "Users"). The Company acquires Users through various channels including (i) small to medium sized enterprises (the "SME Partners") and (ii) large enterprise businesses (the "Enterprise Partners"). The Company's BaaS model is emerging which is expected to add additional fees including software licensing and usage fees. For more information visit our website at www.hankpayments.com.

Forward-Looking Statements

This news release may contain forward-looking statements (within the meaning of applicable securities laws) which reflect the Company's current expectations regarding future events. Forward-looking statements are identified by words such as "believe", "anticipate", "project", "expect", "intend", "plan", "will", "may", "estimate" and other similar expressions. These statements are based on the Company's expectations, estimates, forecasts, and projections and include, without limitation, statements regarding the future success of the Company's business. Financial performance figures in Canadian Dollars unless otherwise indicated by "U" representing United States Dollars.

The forward-looking statements in this news release are based on certain assumptions, including without limitation the Shares beginning trading on the TSXV. The forward-looking statements are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, these forward-looking statements are made as of the date of this news release and, except as expressly required by applicable law, the Company assumes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

FOR FURTHER INFORMATION PLEASE CONTACT:

For more information regarding Hank Payments Corp., please contact: Jason Ewart, EVP Capital Markets, at 416-580-0721. For Investor Relations please contact ir@hankpayments.com and visit the Company's website at www.hankpayments.com.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/163307

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