Canada-based fintech company Hank Payments announced that it has signed a non-binding letter of intent to acquire 100% of a private technology company, dated August 19, 2024.

The material terms set out in the Letter of Intent are not binding on the parties and the Letter of Intent is conditioned, among other things, on the execution of a definitive share purchase agreement to be negotiated between the parties.

Under the proposed transaction, Hank Payments plans to acquire all of the issued and outstanding shares of the target company. In exchange, Hank will issue common stock to the target company’s shareholders with an aggregate value of up to $5.2 million.

The acquired company will also provide Hank with a mandatory retainer of $183,796 to facilitate the completion of the transaction, which retainer will be repaid upon closing of the transaction.

The Hank Consideration Shares will be issued to, or immediately distributed or transferred to, the shareholders of the acquired company such that no new company will own, directly or indirectly, 10% of Hank following the transaction. Certain escrow provisions are expected to apply to the new shareholders created by this transaction.

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

In addition to all equity, the transaction includes a discounted licensing structure for secure, SOC II compliant storage of personal and business data, enabling Hank to save significant R&D and intellectual property costs. The platform is expected to be used by consumers and Hank, and will open up several new revenue streams by leveraging the additional intellectual property acquired in the transaction.

The transaction is expected to close in September 2024.