FinTech Imaging Solutions Inc., an affiliate of software-as-a-service digital banking platform Urban FT Group Inc., has agreed to acquire the business and certain assets of Digiliti Money Group Inc. unit Digiliti Money Inc.
Urban FT in August 2017 submitted an all-cash unsolicited offer to buy Digiliti Money Group after the mobile banking software company issued a going concern warning and began exploring bankruptcy proceedings. While the companies were said to be in advanced deal negotiations, the discussions ended after Digiliti Money Group officially rejected a lifeline offered in the bid's terms.
According to a regulatory filing, under the terms of the Jan. 25 deal agreement, Digiliti Money Inc. will transfer all of its core technology assets to Digital Money Technologies Inc., a newly formed unit of Digiliti Money Group that is not subject to the merger. The new entity will, in turn, license the software to Urban FT (North America) LLC, a unit of Urban FT Group, for two years for a license royalty fee of $360,000 per year. The software license also grants Urban FT (North America) a right of first refusal with respect to Digiliti Money Group's core software assets being licensed by them, along with an option to purchase the software for $3 million.
In consideration of the merger, Digiliti Money Group will receive $250,000, assumption of certain liabilities by FinTech Imaging, a secured promissory note issued by FinTech Imaging in the amount of about $2.4 million, and a cash fee during the first year after the closing date of a percentage of revenues relating to the Digital Money Inc. prepaid card business being acquired by FinTech Imaging.
The transaction is subject to closing conditions, and is expected to close no later than Feb. 24.
