Banxa Secures $3.5 Million Cornerstone Investment to Strengthen Balance sheet

Highlights:

• $3.5 million cornerstone investment by New York-based Lind Partners
• Lind Partners was an initial Pre-IPO investor and remains a long-standing shareholder in Banxa since 2020
• Investment is a convertible security that converts at a fixed price of CAD$1.27 per share

TORONTO, ON / ACCESSWIRE / October 17, 2022 / Banxa Holdings Inc. BNXABNXAFAC ("Banxa" or the "Company"), the leading Web3 payments and on/off ramp solutions provider, today announced it has entered into a CAD$3,500,000 convertible security funding agreement (the "Funding Agreement") with Lind Global Fund II, LP, an entity managed by The Lind Partners, a New York-based institutional fund manager (together, "Lind"). All amounts are in Canadian dollars unless otherwise indicated.

Banxa intends to use the funding for licensing, technology and general working capital purposes.

Holger Arians, Chief Executive Officer of Banxa, commented, "We highly appreciate the confidence demonstrated by Lind since 2020 and we are excited about the opportunity this growth capital affords Banxa. Upon closing, Banxa will have over AUD$12 million in cash and equivalents giving us well over 12 months of operational cash runway based on our current transaction volumes. We also have a clear line to profitability in the current financial year and we are confident of weathering the current crypto winter like we have done over the past 8 years."

"Having been a pre-IPO investor in 2020, Lind is very pleased to reinvest in Banxa and expand our relationship with management who have proven their ability to drive growth", said Phillip Valliere, Managing Director at The Lind Partners. "We look forward to working with them as they further expand and penetrate into new markets"

About the Funding Agreement

Pursuant to the Funding Agreement, Lind has agreed to make an investment of $3,500,000, less a closing fee of $105,000 (the "Closing Fee"), in exchange for a convertible security (the "Convertible Security") with a face value of $4,200,000 (the "Face Value"), representing a principal amount of $3,500,000 (the "Principal Amount") and a pre-paid interest amount of $700,000 (the "Pre-Paid Interest") based on an implied interest rate of 10% per annum. Commencing seven months from closing, Banxa will begin repaying the Convertible Security in $194,444 monthly instalments. Pre-Paid Interest will accrue over a period of 24 months from closing and be calculated at the end of each calendar month. Once accrued, Lind will have the option, once every 90 days, to convert accrued Pre-Paid Interest into common shares of Banxa ("Common Shares") at a conversion price equal to 85% of the market closing price of the Common Shares on the TSX Venture Exchange (the "Exchange") on the day immediately prior to conversion (the "Interest Conversion Price").

Lind will be restricted from selling any Common Shares it receives in connection with the Convertible Security for a period of 4 months and one day after the closing (the "Lock-Up Period"). Lind will have the right to convert any portion of the Principal Amount (less the Closing Fee) into Common Shares at a price of $1.27 per share (the "Conversion Price").

Banxa has the option (the "Buy Back Option") to buy back the remaining outstanding Convertible Security at any time after the date that is 30 days after the Lock-Up Period. If Banxa exercises the Buy Back Option, Lind will have the option to convert (i) up to 33.3% of the outstanding Principal Amount into Common Shares at the Conversion Price, and (ii) 100% of the then accrued Pre-Paid Interest into Common Shares at the Conversion Price.

The Convertible Security will rank senior, secured by all of the assets and property of the Company, pursuant to a general security agreement, and guaranteed by certain wholly-owned subsidiaries of Banxa. There will also be a share pledge of the shares of certain of Banxa's subsidiaries in favour of Lind.

During the term of the Funding Agreement, Lind and its affiliates will not short sell the Common Shares.

In conjunction with the closing of the Funding Agreement, Lind will receive 2,673,228 Common Share purchase warrants (the "Warrants"). Each Warrant entitles the holder to purchase one Common Share at a price of $1.27 per Common Share for a period of twenty-four (24) months after the date of issuance.

The Funding Agreement and the issuance of securities thereunder has been conditionally approved by the Exchange. Closing is subject to final TSX approval and to the satisfaction of other customary closing conditions.

About BANXA Holdings Inc.

Banxa's mission is to accelerate the world to Web3 with its leading global on-and-off ramp solution. Through its extensive network of local payment solutions paired with the required crypto licenses, Banxa gives its partners and projects access to global audiences with less friction and higher conversions. Banxa has a global team of Web3 natives - with operating headquarters in the USA, Europe and APAC regions. For further information go to www.banxa.com.

About The Lind Partners

The Lind Partners manages institutional funds that are leaders in providing growth capital to small- and mid-cap companies publicly traded in the US, Canada, Australia and the UK. Lind's funds make direct investments ranging from US$1 to US$30 million, invest in syndicated equity offerings and selectively buy on market. Having completed more than 100 direct investments totalling over US$1 Billion in transaction value, Lind's funds have been flexible and supportive capital partners to investee companies since 2011.

For more information, please visit http://www.thelindpartners.com.

CONTACTS

Investors:
MZ North America
Brian M. Prenoveau, CFA
BNXA@mzgroup.us
561-489-5315

Media:
Wachsman
Ethan Lyle
banxa@wachsman.com

ON BEHALF OF THE BOARD OF DIRECTORS

Per: "DOMENIC CAROSA" https://twitter.com/dcarosa
Domenic Carosa - Chairman (1-888-218-6863)

Neither 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

Forward-looking Information and Statements

This news release includes certain statements and information that may constitute forward-looking information within the meaning of applicable Canadian securities laws. Forward-looking statements relate to future events or future performance and reflect the expectations or beliefs of management of the Company regarding future events. Generally, forward-looking statements and information can be identified by the use of forward-looking terminology such as "intends", "expects" or "anticipates", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "should", "would" or will "potentially" or "likely" occur. This information and these statements, referred to herein as "forward‐looking statements", are not historical facts, are made as of the date of this news release and include without limitation, statements regarding the terms, timing and issuance of the Convertible Security, the Company's proposed use of proceeds under the Funding Agreement, the Company's ability to secure any portion of the Convertible Security, and the ability of the Company to obtain final approval of the Exchange.

These forward‐looking statements involve numerous risks and uncertainties and actual results might differ materially from results suggested in any forward-looking statements. These risks and uncertainties include, among other things, risks related to the Company being able to obtain approval from the Exchange of the Convertible Security and risks related to changes in general economic, business and political conditions, including changes in the financial markets, changes in applicable laws, and compliance with extensive government regulation, as well as those risk factors discussed or referred to in the Company's disclosure documents filed with the securities regulatory authorities in certain provinces of Canada and available at www.sedar.com.

In making the forward-looking statements in this news release, the Company has applied several material assumptions, including without limitation, assumptions regarding the Company obtaining final approval of the Exchange of the Convertible Security in a timely manner, assumptions that the Convertible Security arrangement will be completed on the announced terms, and the ability of the Company to effectively pursue its growth strategy.

Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements and forward-looking information. Readers are cautioned that reliance on such information may not be appropriate for other purposes. The Company does not undertake to update any forward-looking statement, forward-looking information or financial out-look that are incorporated by reference herein, except in accordance with applicable securities laws. We seek safe harbor.

SOURCE: Banxa Holdings Inc.