TSX Venture Exchange has accepted for filing documentation in relation to an LLC (limited liability corporation) membership purchase agreement dated Sept. 3, 2024, between Popreach Corp. (doing business as Ionik) and an arm's-length party, Nimble5 Holdings Inc. (the vendor), whereby the company has acquired, 100 per cent of the membership interests of the performance marketing business carried on by Nimble5 LLC, a private company based in California.

Pursuant to the terms and subject to the conditions of the agreement, the company shall pay an initial aggregate purchase price of up to $33.7-million (U.S.) to be satisfied in the following manner: (i) $17.5-million (U.S.) cash on closing of the transaction and $2.5-million (U.S.) cash on the first anniversary of the closing date; (ii) $5-million (U.S.) in non-interest-bearing vendor take-back debt; (iii) $6-million (U.S.) million vendor take-back debt bearing interest at the rate of 10 per cent per annum; (iv) 30 million common shares of the company issued on the fourth-month anniversary of the closing date, based on the closing price per share on Aug. 30, 2024, being 12 Canadian cents.

As future contingent consideration, the company shall pay the vendor the lesser of: (i) $10-million (U.S.); and (ii) 25 per cent of the target's EBITDA (earnings before interest, taxes, depreciation and amortization) for each year ending on Dec. 31, 2024 (prorated from the closing date), Dec. 31, 2025, Dec. 31, 2026, and Dec. 31, 2027. In addition, if the aggregate EBITDA generated by the company as of the end of the 36-month period following the closing date is: (i) equal to or greater than $25-million (U.S.), then the vendor shall be entitled to a cash payment of $30-million (U.S.); or (ii) equal to or greater than $20-million (U.S.) but less than $25-million (U.S.), then the vendor shall be entitled to a cash payment of $25-million (U.S.) (lump-sum earnout).

The vendor obligation to make payment of the non-interest-bearing debt shall mature on the third anniversary of the closing date. The interest-bearing debt shall mature on the earlier to occur of: (i) an increase to the company's senior credit facility; (ii) Dec. 15, 2024, if certain payments expected to be received by the vendor during the initial three-month period following the closing date are made in accordance with their scheduled terms; and (iii) Nov. 30, 2026. The vendor shall have the right to convert the non-interest-bearing debt and the lump-sum earnout into common shares of the company at a deemed price of 78 U.S. cents per share pursuant to an option agreement entered into between the company and the vendor.

For more information, refer to the company's news release dated Sept. 3, 2024.