BM Technologies, Inc. (NYSEAM:BMTX) entered into a definitive agreement to acquire First Sound Bank (OTCPK:FSWA) for $22.9 million on November 14, 2021. At the BM Effective Time, each share of BM Common Stock issued and outstanding immediately prior to the Effective Time (other than shares of BMT Common Stock held by FSB or BM not held (i) in trust accounts, managed accounts and the like, or otherwise held in a fiduciary or agency capacity, that are beneficially owned by third parties or (ii) in respect of a debt previously contracted) will be converted into the right to receive one share of FSB Common Stock and, each share of common stock of BM Merger Sub issued and outstanding immediately prior to BM Effective Time shall be converted into and exchanged for one validly issued, fully paid and nonassessable share of common stock of BM and shall constitute the only outstanding shares of capital stock of BM. At the FSB Effective Time, each share of FSB Common Stock issued and outstanding immediately prior to Effective Time will be canceled and converted into the right to receive $7.22, less the quotient of (i) the amount, if any, by which the Adjusted Tangible Common Equity is less than $14,081,000 (the amount of FSB's Tangible Common Equity as of September 30, 2021), divided by (ii) the number of shares of FSB Common Stock outstanding immediately prior to the FSB Effective Time subject to possible downward adjustment up to $0.22 if FSB's deferred tax asset is less than $1,640,385 and (b) each share of Intermediate Merger Sub issued and outstanding immediately prior to the FSB Effective Time will be canceled. At the BM Effective Time, (a) FSB will assume each equity incentive plan of BM, (b) each restricted stock unit award in respect of a share of BM Common Stock subject to vesting, repurchase or other lapse restriction granted under a BM Stock Plan that is outstanding immediately prior to the Effective Time shall be assumed and converted into a restricted stock unit award in respect of FSB Common Stock with the same terms and conditions as were applicable under such BM RSU Award immediately prior to the Effective Time (including vesting terms), and relating to the number of shares of FSB Common Stock equal to the product of (i) the number of shares of BM Common Stock subject to such BM RSU Award immediately prior to the Effective Time, multiplied by (ii) the Exchange Ratio, with any fractional shares rounded to the nearest whole share of FSB Common Stock, (c) each warrant representing the right to purchase shares of BMT Common Stock issued and outstanding as of the Effective Time will be assumed by FSB, and (d) each BMT Warrant shall cease to represent a warrant to purchase shares of BM Common Stock and shall be converted into a warrant to purchase such number of shares of FSB Common Stock determined in accordance with the terms of such BM Warrant. BM will be the surviving entity in merger and the name shall remain BM Technologies, Inc. The combined company is expected to be named BMTX Bank. First Sound Bank (FSB) Board shall be comprised of solely ten persons designated by BM. Officers of FSB shall be comprised of Luvleen Sidhu, Chief Executive Officer and Co-Chairman, an Executive Chairman designated by BM, and such other persons and titles as shall be agreed upon by BM and FSB in writing as soon as practicable, and in any event, at least 30 days prior to the FSB effective time, Martin A. Steele, President and Chief Operating Officer, Elliott Pierce, Chief Credit Officer.

The transaction is subject to conditions including, regulatory approvals, BM and FSB board approvals, FSB Common Stock and the Assumed Warrants shall be registered with the FDIC under the Exchange Act, FSB Common Stock and the Assumed Warrants shall be listed and authorized for trading on the Selected Exchange, Capital Raise shall have been consummated or be capable of being consummated, Employment Agreements, FSB shall have delivered fully executed estoppel letters and Consents and FIRPTA Certificate. After the Effective Times, a substantial majority of the employees of FSB will have the opportunity to continue their at-will employment with BMT, if and to the extent that mutually suitable job opportunities are available. FSB employees whose positions are eliminated as a result of the Mergers and who remain employees of FSB through Closing or, where required by BMT for post-merger systems integration and conversion activities, through Conversion, will be eligible to receive upon Closing severance pay and/or stay bonuses. The termination fee of $1 million will be paid by BM to FSB and in certain circumstances FSB will pay $1 million to BM. The boards of directors of BM and FSB have unanimously approved agreement and recommend that their respective shareholders approve and adopt agreement. BMT shall use all commercially reasonable efforts to complete one or more sales of BMT Common Stock prior to the Effective Times resulting in at least $25 million in cash proceeds in the aggregate. As of November 15, 2022, the parties plan to resubmit the application in order to respond to questions posed by regulators within the next 60 days. The transaction is expected to close in the second half of 2022. The business combination is expected to be consummated prior to December 31, 2022. As of November 15, 2022, the transaction is expected to close in the first half of 2023. This strategic merger is expected to be significantly accretive to the combined company's revenue, EBITDA, and earnings trajectory over the next 1-3 years, with financial, operational, and strategic benefits materializing immediately after close and meaningfully growing as the business continues to scale. Jonathan H. Talcott and E. Jon Talcott, Peter Strand, Brennan Ryan and John Willis of Nelson Mullins Riley & Scarborough LLP served as a legal advisor for BM Technologies, Inc. Thomas A. Sterken and Glen P. Garrison from Keller Rohrback LLP served as a legal advisor for FSB. Keefe, Bruyette, & Woods, Inc. served as a financial advisor and fairness opinion provider for FSB. Wedbush Securities Inc. served as a financial advisor to BM. Nelson Mullins Riley & Scarborough LLP acted as legal advisor for FSB.

BM Technologies, Inc. (NYSEAM:BMTX) cancelled the acquisition of First Sound Bank (OTCPK:FSWA) on December 22, 2022.