Nobelium Tech (NBL.H-V) Proposed Qualifying Transaction with Hank Payments
Oct 8, '20 - NR
Nobelium Tech a capital pool company, is pleased to announce it has entered into a letter of intent dated October 8, 2020 (the “LOI”) with 2777470 Ontario Inc. DBA as Hank Payments (“Hank”), a private company incorporated under the Canada Business Corporations Act whereby Nobelium and Hank will complete a business combination, an arrangement, amalgamation, share exchange or similar transaction to ultimately form the resulting issuer (the “Resulting Issuer”) who will continue on the business of Hank (the “Transaction”), subject to the terms and conditions outlined below. Nobelium intends that the Transaction will constitute its Qualifying Transaction.
Nobelium’s shares have been halted and Nobelium expects that trading in its common shares will remain halted pending closing of the Qualifying Transaction with Hank.
In connection with the Transaction, Nobelium anticipates that it will acquire all of the issued and outstanding shares of Hank (“Hank Shares”) on the basis of one (1) common share of Nobelium (“Nobelium Shares”) for each one (1) Hank share. Prior to the closing of the Qualifying Transaction Nobelium shares and stock options will be consolidated on a 4:1 basis (the “Nobelium Share Consolidation”)). Any outstanding convertible securities of Hank will be exercisable for comparable convertible securities of Nobelium.
Summary of the Qualifying Transaction
The LOI contemplates Nobelium and Hank completing a business combination transaction, pursuant to which Nobelium Shares, or Resulting Issuer shares (as the case may be), will be issued to holders of shares of Hank on the basis of one post-consolidation Nobelium Share (or Resulting Issuer share as applicable) for every one Hank share, the exchange ratio. The final structure of the Transaction is subject to receipt of tax, corporate and securities law advice for both Hank and Nobelium.
On completion of the Transaction, the security holders of Hank would own a majority of the issued and outstanding shares of the Resulting Issuer. The common shares of the Resulting Issuer will be listed for trading on the TSXV Exchange (the “Exchange”). The Transaction is not a “Non-Arm's Length Qualifying Transaction” within the meaning of Policy 2.4 of the Exchange.
Nobelium intends to hold an annual and special meeting of Nobelium’s shareholders (the “Meeting”) pursuant to which the shareholders of Nobelium will be asked to approve, among other things: (i) the Consolidation; (ii) the change of name of Nobelium to a name provided by Hank; and (iii) the appointment of new director(s), conditional upon completion of the Transaction.
Pursuant to the terms of the LOI, until the earliest of: (i) Hank finalization of internal structuring to prepare for the amalgamation, (ii) the execution of the Definitive Agreement; (iii) mutual agreement of Nobelium and Hank; or (iv) the termination of the LOI in accordance with its terms, Nobelium and Hank have agreed not to solicit, negotiate, accept or discuss with any other entity, any transaction that would be in opposition to or in competition with the Transaction.
The completion of the Transaction is subject to the satisfaction of various conditions as are standard for a transaction of this nature, including but not limited to: (i) Hank finalization of internal structuring to prepare for the amalgamation (ii) the negotiation of the Definitive Agreement; (iii) receipt of all requisite regulatory, stock exchange, court or governmental approvals, authorizations and consents; (iv) the absence of any material change or a change in a material fact or a new material fact affecting Nobelium or Hank; (v) completion of the Private Placement (as defined below); and (vi) if applicable, each company having received appropriate approvals from their shareholders. There can be no assurance that the Transaction will be completed on the terms proposed above or at all.
Private Placement
In connection with the Transaction, it is anticipated that Hank will complete a brokered private placement of Hank common shares. The size of the offering and the issue price at which the Hank common shares will be sold are to be determined in the context of the market (the “Private Placement”). Subject to applicable laws and Exchange policies, it is anticipated that each Hank share issued pursuant to the Private Placement will be exchangeable into common shares of the Resulting Issuer upon completion of the Transaction in accordance with the exchange ratio.
The Resulting Issuer
Upon completion of the Transaction the Resulting Issuer is expected to change its name to “Hank Payments Inc.” or such other name as determined by Hank and the Resulting Issuer will be a technology issuer under the Exchange rules.
About Hank
Hank is a Fintech SAAS platform used by Americans to automatically manage their cash flow and align debits with credits, thus increasing the propensity of consumers to pay their liabilities on-time. Hank works on a store and forward cash management strategy whereby cash is debited from consumer accounts according to the Hank algorithm; cash is then, stored on Hank’s partner bank balance sheets until cash accumulates to the specified algorithm levels; then Hank releases payments to consumer’s payees on time. Hank consolidates debits to two or four debits per month for all payments, regardless of how many payments are made on behalf of the consumer. Hank does not lend money to the consumer, but rather curates their cash flow automatically to take the thinking and worry away from the consumer on their path to financial wellness. All Hank users save money as the algorithms determine how much extra cash can be removed and remitted to various loans to save on interest, without impacting cash flow. Credit quality can improve, as delinquencies for loans being paid through Hank are approximately half of the market delinquency rate in most loan categories. Over 40,000 consumers use Hank today to manage over $1.5 B USD in outstanding loan balances, with over $22 MM USD per month in payments being made through Hank. Hank charges monthly fee’s to consumers who subscribe to the program, which vary depending on how many payments are being processed on behalf of consumers, delivering long term recurring high margin revenue to the platform. Hank is focused on acquiring recurring consumer fee income through direct marketing, channel and white label SAAS platform arrangements.
Additional Information
A comprehensive press release with further particulars relating to the Transaction, including further particulars of the Resulting Issuer and the Private Placement, will follow in accordance with the policies of the Exchange.
All information contained in this press release with respect to the Company and Hank was supplied, for inclusion herein, by the respective parties and each party and its directors and officers have relied on the other party for any information concerning the other party.
Completion of the Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange requirements, majority of the minority shareholder approval. Where applicable, the Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon.
Trading in the securities of a capital pool company should be considered highly speculative. The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.
For further information:
Glenn Jessome, Director of Nobelium T: 902-492-0298 |
