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POSaBIT Systems Corporation (OTCQX:POSAF) (CSE:PBIT) has acquired certain assets from Hypur Inc., effective April 1, 2023, in a cash and equity transaction valued at up to $7.5 million, implying a purchase price multiple of 1.4x 2022 revenue.
Hypur is a provider of compliant, sustainable payment and bank compliance solutions for high-risk industries, including cannabis businesses. Hypur has extensive partnerships with banks and credit unions throughout the United States who have used Hypur’s technology to provide banking and payment services to the cannabis industry since 2016. Included in the acquisition is Hypur Comply, Hypur Pay, and Hypur’s PIN debit merchant processing solution.
The acquisition enables POSaBIT to offer a more comprehensive suite of payment and compliance solutions for the cannabis industry, including redundant PIN debit payment processing, Hypur Pay, the leading cannabis ACH eCommerce and mobile payment solution, and Hypur Comply, compliance technology for financial institutions serving the cannabis industry. With the acquisition, POSaBIT now provides a one-stop shop for all payment and bank compliance needs for cannabis dispensaries, processors, cultivators, distributors, and the financial institutions that serve them.
Transaction Details
As consideration for the acquisition, POSaBIT issued an aggregate of 6.2 million common shares in the capital of POSaBIT and $1.5 million in cash. The cash was funded by the debt facility.
POSaBIT will pay up to an additional 1.2 million shares following the achievement of certain milestones.
The loan warrants and shares issued pursuant to the acquisition are subject to restrictions on resale under applicable Canadian securities laws for a period of four months from the date of issuance. Additionally, 1.2 million shares issued pursuant to the acquisition are subject to contractual resale restrictions for a period of six months and 1.2 million shares issued pursuant to the acquisition are subject to contractual resale restrictions for a period of twelve months.
Concurrent with closing, POSaBIT entered into its credit agreement with Perga Capital Partners, LP in connection with an up to $8 million unsecured credit facility with an initial 3-year term, at an initial interest rate of 10% per annum for the first two years and a final interest rate of 12% per annum for the last year. The repayment of the debt facility will not be subject to any pre-payment penalty. At closing, $3 million was advanced to the company under the debt facility and 300,000 share purchase warrants of the company were issued to Perga in connection with the first draw-down. Each loan warrant will be exercisable for one Share at CA$1.50 per share for a period of 36 months following the date of issuance.
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Photo: Benzinga edit with photos by jarmoluk and lindsayfox on Pixabay
