Clip Money Inc. Announces Binding Offer Letter with Business Development Bank of Canada for $500,000 Loan

Rhea-AI Summary

Clip Money Inc. (TSX-V: CLIP) has entered into a binding offer letter with the Business Development Bank of Canada for a loan of CDN$500,000 in the form of non-revolving subordinated secured debt. The loan will bear interest at a floating rate equal to the BDC floating base rate plus a margin of 1.00% and is repayable in full on November 15, 2026. Clip Money aims to transform how businesses conduct financial transactions, aligning with BDC's strategy of increasing support for entrepreneurs.

TORONTO, Dec. 19, 2023 (GLOBE NEWSWIRE) -- Clip Money Inc. (TSX-V: CLIP) (“Clip” or the “Company”), a company that operates a multi-bank self-service deposit system for businesses, is pleased to announce that it has entered into a binding offer letter (the “Offer Letter”) with the Business Development Bank of Canada (“BDC”) for a loan in the amount of CDN$500,000 (CAD) in the form of non-revolving subordinated secured debt (the “BDC Loan”). The Company intends to use the proceeds from the BDC Loan for general working capital purposes.

Clip’s mission to transform how businesses conduct financial transactions aligns with a cornerstone of BDC’s strategy: increasing support for entrepreneurs. By reimagining the speed, location, and logistics of business deposits and other services, Clip Money is bringing cost-effective and convenient new solutions for businesses owners.

The BDC Loan will bear interest at a floating rate equal to the BDC floating base rate plus a margin of 1.00%. The current BDC base rate as of the date hereof is 9.30% per annum. All obligations of the Company under the BDC Loan and the Offer Letter will be secured by a third-lien security interest that is subordinated to prior security interests granted to certain existing lenders of the Company (the “BDC Security”). The BDC Security will cover all present and after-acquired personal property, except consumer goods of the Company. The principal amount of the BDC Loan is repayable by the Company in full on November 15, 2026. Interest on the BDC Loan is payable monthly on the 15^th day of each month. In connection with the advancement of the BDC Loan, the Company will pay BDC a one-time fee of $47,800 (CAD), as well as an annual management fee of $350 (CAD).

ICP Securities Market Making Activities

Further to the Company’s press release dated November 28, 2023 where the Company announced that it had entered into a Market Making Services Agreement with ICP Securities Inc. (“ICP”), the Company wishes to clarify that ICP will be using its own funds to facilitate market making activities. In consideration for the market making activities undertaken by ICP, the Company will make a monthly payment of $7,500 (CAD) to ICP.

About Clip Money Inc.

Clip operates a multi-bank self-service deposit system for businesses through its ClipDrop Boxes that gives users the capability of making deposits outside of their bank branch at top retailers and shopping malls. Rather than having to go to their personal bank branch or using a cash pickup service, businesses can deposit their cash at any ClipDrop Box located near them. After being deposited, the funds will automatically be credited to the business’ bank account, usually within one business day. The Company combines functional hardware, an intuitive mobile app and an innovative cloud-based transaction engine that maximizes business-banking transactions. Combined with mobile user applications, Clip offers a cost-effective and convenient solution for business banking deposits in metropolitan statistical areas across Canada and the United States. For more information about the Company, visit www.clipmoney.com.

For further information, please contact:

Joseph Arrage
Chief Executive Officer
tel: 844-593-2547

FAQ

What is the loan amount and type obtained by Clip Money Inc. from the Business Development Bank of Canada?

Clip Money Inc. has obtained a loan of CDN$500,000 in the form of non-revolving subordinated secured debt from the Business Development Bank of Canada.

What is the interest rate for the BDC Loan obtained by Clip Money Inc.?

The BDC Loan obtained by Clip Money Inc. will bear interest at a floating rate equal to the BDC floating base rate plus a margin of 1.00%.

When is the principal amount of the BDC Loan repayable by Clip Money Inc.?

The principal amount of the BDC Loan is repayable by Clip Money Inc. in full on November 15, 2026.

What is the purpose of the BDC Loan obtained by Clip Money Inc.?

Clip Money Inc. intends to use the proceeds from the BDC Loan for general working capital purposes.

What is the monthly payment made by Clip Money Inc. to ICP Securities Inc. for market making activities?

Clip Money Inc. makes a monthly payment of $7,500 (CAD) to ICP Securities Inc. for market making activities.