Nayax Ltd. (TASE:NYAX) entered into binding term sheet to acquire On Track Innovations Ltd. (OTCPK:OTIV.F) for $4.4 million on January 19, 2022. Nayax Ltd entered into an agreement to acquire On Track Innovations Ltd on march 17, 2022. Under the terms, On Track Innovations' shareholders receives $0.0599 per share in cash. The acquisition will be completed in two phases. First, Nayax will lend OTI approximately $5.5 million to repay its outstanding debts. The Nayax loan will be repaid in two years, bearing a 10% annual interest rate. In the next phase, expected within 21 days of signing the loan agreement, OTI will be fully merged into Nayax in consideration for $4.5 million. On Track Innovations Ltd and Nayax agreed to make all reasonably commercial efforts to enter into a definitive merger agreement within 21 days after the entry into the Loan Agreement, and to complete the Merger by May 2, 2022. The consideration payable to the shareholders under the Merger Agreement shall equal to the higher of (I) of $10,000,000 less the amount of the Loan, and (II) $4,500,000. Nayax has the required internal financial resources to conclude the transactions set forth in the Proposal expeditiously and without need to obtain third party financing.

Transaction is subject to customary closing conditions for a transaction, including, the execution of a mutually satisfactory definitive merger agreement, approvals by On Track Innovations Ltd shareholders at meeting to be held on May 10, 2022, and the receipt of all necessary governmental and material third party approvals required to consummate the Merger. If the Merger Agreement will not be put to the vote of the shareholders of On Track Innovations Ltd by May 5, 2022 or if it will not be approved by the shareholders of the Company by May 31, 2022, for a reason that not directly and exclusively related to Nayax, than (a) Nayax shall have the right to either demand the immediate repayment of the Loan, or convert it into On Track Innovations Ltd equity at a conversion price equal to the Loan Amount, divided by the lowest market share price during the seven trading days prior to the date of the Loan Agreement, but in no event more than $0.145 per share. (b) if Nayax elected not to demand the immediate repayment or conversion, the interest on the Loan shall be increased to an annual rate of 16% and (c) the Company shall pay, upon demand by Nayax, to Nayax an amount of $1.5 million.

Nayax anticipates that the second phase transaction would be structured as either (a) court approved scheme of arrangement in accordance with Chapter J of the Insolvency and Rehabilitation Law, 2018 (b) court approved scheme or arrangement in accordance with Section 350 to the Companies Law 1999, or (c) a merger in accordance with the Companies Law, 1999, pursuant to which Company would merge with a wholly-owned subsidiary of Nayax, becoming a wholly owned subsidiary Nayax, and cease to be a reporting company with the SEC. Completion of the Merger Agreement is expected to be no later than May 3, 2022. As of March 17, 2022, the transaction is subject to satisfaction of the closing conditions included in the Merger Agreement and the Transactions are expected to close by July 1, 2022. Nir Dash and Ron Ben Menachem of Herzog, Fox & Neeman acted as legal advisor for Nayax Ltd. and Shy S. Baranov of Gornitzky & Co. acted as legal advisor for On Track Innovations Ltd. in the transaction.

Nayax Ltd. (TASE:NYAX) completed the acquisition of On Track Innovations Ltd. (OTCPK:OTIV.F) on June 9, 2022.