Hank Payments closes $1.09-million private placement Another box checked off the list before this lifts off! (IMO)
2023-04-21 12:24 ET - News Release
An anonymous director reports
HANK PAYMENTS COMPLETES PRIVATE PLACEMENT OFFERING
Hank Payments Corp. has closed a non-brokered private placement of 1,096 units for total gross proceeds of $1,096,000. The terms of the offering are the same as the private placement offering the company closed on Dec. 16, 2022.
Each unit consists of one $1,000 secured convertible debenture and 3,333 common share purchase warrants. The debentures mature on and become payable on April 21, 2028, and bear interest at a fixed rate of 10 per cent per annum, payable in arrears semi-annually in cash on Dec. 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 7.5 cents per share during the first year and 10 cents per share thereafter. 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 five days of notice if the volume-weighted average trading price of the common shares on the TSX Venture Exchange for any 10-consecutive-trading-day period is equal to or greater than 35 cents. Each warrant entitles the holder to purchase one common share of the company at an exercise price of 10 cents 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 equal to 7 per cent 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 10 cents 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 Aug. 22, 2023. The offering is subject to TSX Venture Exchange acceptance of regulatory filings.
Further to its previous announcement on 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 to 10 cents per option. The repricing remains subject to TSX-V 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 10 cents 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 TSX-V, 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 10 cents and an expiry date of April 21, 2025, and one million 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 on 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 issued pursuant to a warrant indenture dated Oct. 13, 2021, between the company and Computershare Trust Company of Canada, as warrant agent. The repricing remains subject to TSX-V acceptance. In connection with the warrant repricing, the company has adjusted the exercise price of the warrants from $1.00 to 7.5 cents 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 TSX-V exceeds the warrant repricing by 25 per cent for any 10 consecutive trading days following the warrant repricing, the expiry date of the warrants shall be accelerated from Oct. 13, 2024, to a date that is 30 days following the seventh calendar day following the 10-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 per cent 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 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 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 users). The company acquires users through various channels, including (i) small- to medium-sized enterprises and (ii) large enterprise/licensee businesses. The company's BaaS model is emerging and is expected to add additional fees, including software licensing and usage fees.
We seek Safe Harbor.
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