• Banxa shareholders to receive cash payment of C$1.00 per Share, representing a 33% premium to the closing price of the Shares on December 18, 2024, and a 16% and 54% premium, respectively, to the 30-day and 60-day average trading prices of the Shares ending on December 18, 2024
• Special Committee and Board (excluding any interested directors) have unanimously determined that the Transaction is in the best interests of the Company, and the Board (excluding any interested directors) has recommended that shareholders vote in favour of the Transaction
• Shareholders holding approximately 53% of the Shares have agreed to support the Transaction, which includes a "go-shop" period extending until January 31, 2025
• Purchaser group is led by Chairman and Co-Chief Executive Officer, Holger Arians, and Executive Director and Co-Chief Executive Officer, Zafer Qureshi, and is comprised of sophisticated investors with veteran expertise in the cryptocurrency sector
• Following the completion of the Transaction, Banxa will continue its business as an embedded crypto infrastructure provider for businesses desiring to leverage the benefits of blockchain to facilitate the movement of value

TORONTO, Dec. 19, 2024 /CNW/ - Banxa Holdings Inc. (TSXV: BNXA) (OTCQX: BNXAF) (FSE: AC00) ("Banxa" or the "Company"), the leading infrastructure provider for enabling embedded crypto within payment platforms, today announced that it has entered into an arrangement agreement (the "Arrangement Agreement") with 1493819 B.C. Ltd. (the "Purchaser"), a private company existing under the laws of British Columbia, pursuant to which the Purchaser will acquire all of the issued and outstanding common shares in the capital of the Company (the "Shares"), other than those Shares held by shareholders comprised of certain directors and executive officers of the Company as well as other persons (such shareholders, collectively, the "Continuing Shareholders"), for cash consideration of C$1.00 per Share (the "Consideration") (collectively, the "Transaction"). The Consideration represents a 33% premium to the closing price of the Shares on the TSX Venture Exchange (the "TSXV") on December 18, 2024, the last trading day immediately prior to the announcement of the Transaction, and a 16% and 54% premium, respectively, to the 30-day and 60-day average trading prices of the Shares ending on December 18, 2024. As of the date hereof, the Continuing Shareholders, collectively, beneficially own or control an aggregate of 26,407,990 Shares (representing approximately 50% of the issued and outstanding Shares on a non-diluted basis).

Richard Wells, an independent director of the Banxa board of directors (the "Board") and Chair of the Special Committee, said, "After careful analysis and deliberation, supported by external advisors, the Special Committee considers that the Transaction represents the optimal path forward for the Company, its shareholders, lenders, employees and other stakeholders. This transaction provides a premium to the recent share trading range and offers liquidity to holders of Shares. The Board and Special Committee are unanimous in the belief that this Transaction is in the best interests of Banxa shareholders."

Zafer Qureshi, Executive Director and Co-Chief Executive Officer of the Company, said, "This Transaction, with its significant cash premium, represents an exceptional outcome for Banxa and delivers immediate value for our shareholders. As a private company, Banxa will have the flexibility and resources to continue to implement its strategic vision without the added financial and administrative burden of remaining a reporting issuer in what remains a challenging capital markets environment. We look forward to this exciting next step in Banxa's evolution."

Special Committee and Board Recommendations

The Arrangement Agreement was approved unanimously by the Board (with Zafer Qureshi and Holger Arians abstaining from voting due to their participation in the Transaction as a Continuing Shareholder and as principals of the Purchaser) after taking into account, among other things, the unanimous recommendation of the special committee (the "Special Committee") of the Board, comprised of Richard Wells and Kaushik Sthankiya, each an independent director of the Company. The Special Committee and the Board (with the abstention of interested directors) determined that the Transaction is in the best interests of the Company and the Board has recommended that holders of Shares (other than the Continuing Shareholders) vote in favour of the Transaction at the Meeting (as defined below).

In making its determination to unanimously recommend approval of the Transaction to the Board, and in the Board's determination to approve the Transaction, the Special Committee and the Board considered the following factors, among other things:

• Compelling Value and Immediate Liquidity – the all-cash Consideration provides shareholders with immediate value and is of particular benefit given the limited trading volume, the financial challenges facing the Company and the lack of liquidity in the Shares. The Consideration represents a 33% premium to the closing price of the Shares on the TSXV on December 18, 2024, the last trading day immediately prior to the announcement of the Transaction, and a 16% and 54% premium, respectively, to the 30-day and 60-day average trading prices of the Shares ending on December 18, 2024;
• Fairness Opinion – the Special Committee received an oral fairness opinion from Evans & Evans, Inc. ("Evans & Evans"), which opinion concluded that, based upon and subject to the assumptions made, procedures followed, matters considered and the limitations and qualifications set out therein, the Consideration to be received by the Banxa shareholders (other than the Continuing Shareholders) pursuant to the Transaction is fair, from a financial point of view, to such shareholders. A written copy of the fairness opinion will be included in the materials sent to securityholders of the Company in connection with the Meeting;
• Go-Shop Provision – the Arrangement Agreement includes a go-shop provision, during which time the Company and its financial advisor will be permitted to actively solicit, evaluate and enter into negotiations with respect to a potential Superior Proposal (as defined in the Arrangement Agreement) for a forty-two (42) day period ending January 31, 2025, as more particularly described below. The Special Committee has retained Architect Partners, LLC as its financial advisor to assist in evaluating potential Superior Proposals during the Go-Shop Period;
• Support for the Transaction – each of the Continuing Shareholders and certain other shareholders, including each of the directors and certain executive officers of the Company, have entered into voting support agreements, pursuant to which they have agreed to, among other things, vote their Shares, representing an aggregate of 24,181,439 Shares (or approximately 53% of the total issued and outstanding Shares), in favour of the Transaction at the Meeting;
• Arrangement Agreement and "Fiduciary Out" – the Arrangement Agreement is the result of a comprehensive negotiation process that was supervised by the Special Committee, as advised by independent and highly qualified legal and financial advisors, and resulted in terms and conditions that are reasonable in the judgment of the Special Committee and the Board, including a customary "fiduciary out" that will enable the Company to enter into a Superior Proposal in certain circumstances;
• Break Fee – the break fee payable by the Company, being C$911,741 if the Arrangement Agreement is terminated due to a Go-Shop Fee Event (as defined in the Arrangement Agreement), or C$1,823,482 if the Arrangement Agreement is terminated in certain other circumstances, is reasonable and payable only in customary and limited circumstances;
• Minority Vote and Court Approval – the Transaction must be approved by at least two-thirds (662⁄3%) of the votes cast by shareholders, but also by: (a) at least two-thirds (662⁄3%) of the votes cast by shareholders (other than Continuing Shareholders) and the holders of share purchase warrants and stock options of the Company (collectively, the "Affected Securityholders"), present in person or represented by proxy at the Meeting, voting together as members of a single class; and (b) a "majority of the minority vote" of shareholders conducted in accordance with Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The Transaction will also be subject to approval by the British Columbia Supreme Court; and
• Management – The management of the Company will continue to be led by Holger Arians, Banxa's current Chairman and Co-Chief Executive Officer, and Zafer Qureshi, Banxa's current Executive Director and Co-Chief Executive Officer, ensuring stability and continuity in the vision and business plan which is already being capably executed by them.

Transaction Details

Pursuant to the terms of the Arrangement Agreement, the Purchaser will acquire all of the Shares, other than those Shares owned by the Continuing Shareholders, and any Shares held by shareholders who validly exercise dissent rights ("Dissent Rights") in respect of the Transaction in accordance with the Plan of Arrangement (as defined below), for a purchase price of C$1.00 per Share, payable in cash.

The Transaction is to be effected by way of a court-approved plan of arrangement (the "Plan of Arrangement") under the Business Corporations Act (British Columbia) and is expected to close in the first quarter of 2025, subject to shareholder, court and regulatory approvals and other closing conditions customary to transactions of this nature. Completion of the Transaction is not subject to any financing condition.

The Arrangement Agreement includes a go-shop period extending until January 31, 2025 (the "Go-Shop Period"), during which time the Company and its financial advisor will, subject to the requirements and limitations set forth in the Arrangement Agreement, be permitted to actively solicit, evaluate and enter into negotiations with third parties that express an interest in acquiring the Company with a view to obtaining a potential Superior Proposal. The Special Committee has retained Architect Partners, LLC as its financial advisor to assist in evaluating potential Superior Proposals in connection with the Go-Shop Period. Pursuant to the terms of the Arrangement Agreement, the Special Committee will consider bona fide acquisition proposals from qualified third parties that may constitute a Superior Proposal. Interested parties are invited to direct inquiries to Ryan McCulloch at Architect Partners, LLC via e-mail at ryan@architectpartners.com.

Following the expiry of the Go-Shop Period, the Company will be subject to customary non-solicitation covenants with customary "fiduciary out" provisions that entitle the Special Committee and the Board to consider and, subject to certain conditions, accept a Superior Proposal if the Purchaser does not match such Superior Proposal. If the Arrangement Agreement is terminated under certain circumstances, including circumstances in which the Company terminates the Arrangement Agreement to accept a Superior Proposal prior to approval of the Transaction by shareholders, the Company is required to pay to the Purchaser a termination fee equal to: (a) C$911,741, if the Arrangement Agreement is terminated due to a Go-Shop Fee Event; and (b) C$1,823,482, if the Arrangement Agreement is terminated in certain other circumstances. There can be no assurance that a Superior Proposal will be made as a result of the go-shop process or otherwise, and the Company does not intend to disclose developments with respect to the go-shop process or any interest received by third parties during the Go-Shop Period, unless and until the Special Committee and the Board make a determination requiring further disclosure.

A special meeting of Affected Securityholders to consider and, if deemed advisable, approve the Transaction (the "Meeting") is expected to be held in February 2025. In order to be approved by holders of Shares at the Meeting, the Transaction will require the approval of: (a) at least two-thirds (662⁄3%) of the votes cast at the Meeting in person or by proxy by holders of Shares; (b) at least two-thirds (662⁄3%) of the votes cast at the Meeting in person or by proxy by the Affected Securityholders, voting together as members of a single class; and (c) a simple majority of the votes cast at the Meeting in person or by proxy by holders of Shares (other than Shares required to be excluded under MI 61-101 and the applicable rules and policies of the TSXV).

Pursuant to the Transaction:

Additional details regarding the Transaction, the background to the Transaction, the reasons for the Board and Special Committee's recommendations of the Transaction, and how securityholders of the Company can participate in and vote at the Meeting, will be set out in the Company's management information circular and other proxy-related materials to be prepared, filed and sent to the securityholders of the Company in connection with the Meeting. Copies of the Arrangement Agreement and the management information circular for the Meeting will be filed with Canadian securities regulators and will be made available on the SEDAR+ profile of the Company at . Securityholders of the Company are urged to read those and other relevant materials when they become available. Upon closing of the Arrangement, the Purchaser intends to cause the Shares to be delisted from the TSXV and will submit an application to cease to be a reporting issuer under applicable Canadian securities laws.

Voting Support Agreements

In connection with the Transaction, the Continuing Shareholders and certain other shareholders, and all directors who hold Shares and certain officers of the Company, who hold, in aggregate, 24,181,439 Shares (representing approximately 53% of the issued and outstanding Shares (on a non-diluted basis)), have entered into voting support agreements with the Purchaser, providing for such shareholders to vote all Shares owned by them in favour of the Transaction.

Advisors

Architect Partners, LLC and Evans & Evans, Inc. are acting as financial advisors to the Special Committee. Peterson McVicar LLP is acting as independent legal counsel to the Special Committee. DuMoulin Black LLP is acting as legal counsel to the Company.

Cassels Brock & Blackwell LLP is acting as legal counsel to the Purchaser.

About Banxa Holdings Inc.

Banxa is the leading infrastructure provider for enabling embedded crypto - empowering businesses to embed crypto seamlessly into their existing platforms and unlocking new opportunities in the rapidly evolving crypto economy. Through an extensive and growing network of global and local payment solutions and regulatory licenses, Banxa helps businesses provide seamless integration of crypto and fiat for global audiences with lower fees and higher conversion rates. Headquartered in the USA, Europe, and Asia-Pacific, the Banxa team is building for a world where global commerce is run on digital assets. For further information visit .

Forward-Looking Information

This news release contains "forward-looking information" within the meaning of applicable securities laws. Forward-looking information may be identified by statements including words such as: "anticipate," "intend," "plan," "budget," "believe," "project," "estimate," "expect," "scheduled," "forecast," "strategy," "future," "likely," "may," "to be," "could,", "would," "should," "will" and similar references to future periods or the negative or comparable terminology, as well as terms usually used in the future and the conditional.

Statements including forward-looking information may include, without limitation, statements regarding the rationale of the Special Committee and the Board for entering into the Arrangement Agreement, the expected benefits of the Transaction, the timing of various steps to be completed in connection with the Transaction, and other statements that are not material facts. Forward-looking information is based on assumptions that may prove to be incorrect, including but not limited to, that the parties will receive, in a timely manner and on satisfactory terms, the necessary court, shareholder and regulatory approvals, and that the parties will otherwise be able to satisfy, in a timely manner, the other conditions to the closing of the Transaction. The Company considers these assumptions to be reasonable in the circumstances. However, there can be no assurance that such assumptions will reflect the actual outcome of such items or factors. By its nature, forward-looking information involves known and unknown risks, uncertainties, changes in circumstances and other factors that are difficult to predict and many of which are outside of the Company's control which may cause actual results to differ materially from the any future or potential results expressed or implied by such forward-looking information. Important factors that could cause actual results to differ materially from those indicated in the forward-looking information include, among others: (i) the possibility that the Transaction will not be completed on the terms and conditions, or on the timing, currently contemplated, and that it may not be completed at all, due to a failure to obtain or satisfy, in a timely manner or otherwise, required shareholder, regulatory and court approvals and other conditions of closing necessary to complete the Transaction or for other reasons; (ii) the possibility of adverse reactions or changes in business resulting from the announcement or completion of the Transaction; (iii) risks relating to the Company's ability to retain and attract key personnel during the interim period; (iv) the possibility of litigation relating to the Transaction; (v) the potential of a third party making a Superior Proposal; (v) risks related to diverting management's attention from the Company's ongoing business operations; and (vi) other risks inherent to the business carried out by the Company and factors beyond its control which could have a material adverse effect on the Company or its ability to complete the Transaction. The Company has assumed that the risk factors referred to above will not cause such forward-looking statements and information to differ materially from actual results or events. The reader is cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on forward-looking statements.

Other than as specifically required by applicable Canadian law, the Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, whether as a result of new information, future events or results, or otherwise.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE Banxa Holdings Inc.