Wallet-Com is a European mobile wallet agency that provides leading communications and marketing technology to over 200 global customers, including Lacoste, Hyundai, and McDonald’s
Fobi AI to acquire Wallet-Com. (Credit: Dariusz Sankowski from Pixabay)
Fobi AI Inc. (FOBI:TSXV) (FOBIF:OTCQB) (the “Company” or “Fobi”), an industry leader in harnessing AI and data intelligence to enable digital transformation, is pleased to announce that it has entered into an asset purchase agreement dated October 13, 2023 (the “APA”), with Wallet Communication SL, a Spanish limited liability company, (the “Vendor”) pursuant to which the Company proposes to acquire certain business assets and intellectual property related to Wallet-Com (“Purchased Assets”), a leading digital wallet agency based in Spain (the “Transaction”).
Wallet-Com provides communications and marketing technology to over 200 global customers, including Lacoste, Hyundai, and McDonald’s. With operations in Spain, France, Portugal, Chile, Peru, and Mexico, Wallet-Com specializes in communication and marketing technology and possesses extensive experience in mobile and digital marketing, loyalty programs, media, and customer relationship and data management.
AGENCY ACQUISITION TO ENHANCE FOBI’S SOLUTION SUITE WITH THE ADDITION OF FORMAL STRATEGY AND CONSULTING SERVICES
The acquisition of Wallet-Com is expected to enable Fobi to strategically build a service offering on top of its existing technology stack, expanding the Company’s portfolio to formal consulting services and extensive mobile marketing expertise. Services may also be potentially expanded to other complimentary loyalty solutions, ultimately enabling Fobi to deliver more encompassing solutions and impactful marketing campaigns to its enterprise clients around the world.
The Company has partnered with Wallet-Com in the past, recently working together to implement a smart transportation and cities initiative for the Vélez-Málaga City Council, a government entity in the Spanish municipality committed to improving city-wide sustainable mobility. With additional wallet pass success across Europe, the Company expects this acquisition to continue to strengthen Fobi’s position as a technology innovator, enabling the Company to gain access to Wallet-Com’s customer base and increase its ability to further penetrate Spanish-speaking markets.
TERMS OF THE TRANSACTION
Pursuant to the APA, the purchase price of the Transaction will be €29,010 (“Initial Purchase Price”), payable by the issuance of that number of common shares of the Company (“Initial Payment Shares”) as is equal to a fraction, the numerator of which is the Canadian dollar equivalent of €29,010, calculated using the Bank of Canada monthly exchange rate for September 2023, and the denominator of which is the volume weighted average price (“VWAP”) for the period ending ten TSX Venture Exchange (“TSXV”) trading days prior to the closing date of the transaction (“Closing Date”).
As additional consideration of the Purchased Assets and in addition to the Initial Purchase Price, subject to applicable laws and approval of the TSXV at the time of issuance, upon the achievement of certain revenue targets before the first anniversary of the Closing Date, the Company has agreed to pay to the Vendor an additional €81,000 (the “Earn-Out Share Value”), payable in common shares of the Company (the “Earn-Out Shares” and together with the Initial Payment Shares, the “Consideration Shares”).
The number of Earn-Out Shares issuable will be that number of common shares of the Company as is equal to a fraction, the numerator of which is the Earn-Out Share Value converted into Canadian funds using the Bank of Canada daily exchange rate on the date that is five TSXV trading days prior to the date of the Earn-Out Notice (as defined in the APA), and the denominator of which is the greater of (i) the VWAP of the common shares of the Company existing at the time of calculation on the TSXV for the ten TSXV trading day period ending five TSXV trading days prior to the date of the Earn-Out Notice, and (ii) the lowest price permissible under the policies of the TSXV; or any combination of the foregoing.
All Consideration Shares will be subject to a hold period of four months and one day from the date of issuance thereof in accordance with applicable securities laws.
The parties to the APA are Arm’s Length Parties (as defined in the policies of the TSXV) and there are no finder’s fees payable pursuant to the Transaction.
The Transaction is subject to customary items, including satisfaction of closing conditions by both parties and TSXV approval.
Colby McKenzie, CRO of Fobi AI, states: “We outlined an aggressive M&A strategy earlier this year and have focused on supporting the expansion of our wallet business. The acquisition of Wallet-Com brings another exciting layer to this burgeoning business unit. Given the legacy relationship, the synergies should be immediate.”
Rob Anson, CEO of Fobi AI, states: “This agreement with Wallet-Com not only marks Fobi’s fifth wallet pass acquisition, but also the strategic acquisition of a leading digital wallet agency that will help reinforce Fobi’s strength and scale as a global wallet pass leader. This collaboration not only broadens our global footprint but also opens doors to exciting new prospects and innovative opportunities, such as the smart cities project that we delivered for Vélez-Málaga. With the relationship we’ve already built together, I am confident that the integration of Wallet-Com will result in prompt growth and added value to the Fobi brand.”
Fobi is also pleased to announce that it has retained Paradox Public Relations Inc. (“Paradox”), to provide capital markets advisory and investor relations services to the Company. Founded in 2001, Paradox is a boutique investor relations consultancy firm that has been driving high-performing results for its clients for over 20 years. Paradox will focus on developing and expanding the Company’s communications and visibility with the investment community. In connection with the engagement, Paradox commenced the provision of services effective October 9, 2023, for an initial one-year term and for a fee of $10,000 per month. Fobi has also granted Paradox incentive stock options to purchase 1,500,000 common shares in the capital of the Company (the “Options”) at a price of $0.21 per common share. The Options are granted pursuant to the Company’s Stock Option Plan and, in accordance with the policies of the TSX Venture Exchange, vest quarterly over 12 months and expire on October 17, 2028.
Source: Company Press Release