FOBI Announces Definitive Agreement To Acquire Passworks S.A. for €400,000 To Further Expand FOBI’s Global Digital Wallet Pass Portfolio

FOBI’s fourth wallet pass acquisition in less than one year will continue to consolidate the global wallet pass market and strengthen FOBI’s position as a global wallet pass leader

FOBI AI Inc., a global leader in providing real-time data analytics through artificial intelligence to drive operational efficiencies and profitability, is pleased to announce that it has entered into a share purchase agreement (the “SPA“) with Passworks to acquire all of the issued and outstanding shares (the “Target Shares“) of Passworks S.A. (the “Transaction“), a leading European digital wallet and mobile marketing company with international clients such as luxury fashion leader Hugo Boss, global coupon giant Catalina Marketing Corporation and media giant Wunderman Thompson UK.

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FOBI CEO, Rob Anson stated “The acquisition of Passworks, our fourth wallet pass acquisition in the past year, will further position us as a global wallet pass leader and gives us access to a number of key Tier 1 customers which will help drive immediate revenue and strengthen our brand.”

TERMS OF THE TRANSACTION

The aggregate purchase price for the Target Shares will be €400,000, payable by the issuance of that number of common shares of the Company (the “Initial Payment Shares“) as is equal to a fraction, the numerator of which is the Canadian dollar equivalent of €400,000, calculated using the Bank of Canada daily exchange rate on the last business day before the date of the closing of the Transaction (the “Closing Date“), and the denominator of which is the greater of (i) the ten trading day volume weighted average price (“VWAP“) for the ten TSX Venture Exchange (the “TSXV“) trading day period ending five TSXV trading days preceding the Closing Date, and (ii) the lowest price permissible under the policies of the TSXV.

As additional consideration of the Target Shares and in addition to the Initial Payment Shares, 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 €100,000 (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 SPA), 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.

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All Consideration Shares will be subject to a hold period of four months and one day from the date of issuance. The Consideration Shares are subject to a contractual escrow, whereby, 20% of the Consideration Share will be released on the applicable date of issuance, 20% will be released 3 months from the applicable date of issuance, 30% will be released 6 months from the applicable date of issuance, and 30% will be released 9 months from the applicable date of issuance.

On the Closing Date, the Company will lend to the vendor the aggregate amount of €230,000, in cash, for the vendor to use for the sole purpose of acquiring full interest and title to the Target Shares prior to the closing of the Transaction.

The parties to the SPA are not Non-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 closing of the Transaction is subject to the approval of the TSXV. A copy of the SPA is available on the Company’s SEDAR profile at www.sedar.com.

According to a report released in April 2020 by Allied Market Research, the mobile wallet market, including payments, is set to grow from $1.04 trillion USD in 2019 to $7.6 trillion USD in 2027, for a compound annual growth rate (CAGR) of 28.2%. With the acquisition of Passworks, FOBI will increase its share of the large and growing global wallet pass market.