Clancy Systems International, Inc. (OTCPK:CLSI) entered into a stock purchase agreement to acquire the outstanding equity stock of Hyperion Digital Group S.R.L DE C.V. from Arke Tech S.A.P.I DE C.V. for $14.8 million on March 9, 2020. The consideration includes $75,000 payable to Arke Tech, issuance of a secured promissory note in the principal amount of $1,350,000, issuance of 2,293,488 shares of common stock, earn out agreement to earn additional shares of common stock of during the three years post-closing upon certain EBITDA milestones; having an aggregate value of $13,000,000, and assumption of $350,000 of debt on Hyperion DG Credit line. Arke Tech is eligible for an earn out payment equal to 250% of Clancy Systems's EBITDA for the twelve month period following closing, provided that such EBITDA must be at least $500,000, for second earn out payment equal to 250% of the EBITDA, for the second twelve month period following closing, provided that such EBITDA must be at least $1,500,000, and for a final earn out payment equal to 150% of the EBITDA for the third twelve month period following closing, provided that such EBITDA must be at least $2,000,000. The earn out payments will be made in shares of common stock at a price equal to the average closing price of such securities on the principal trading market during the twenty trading days prior to the last date of each applicable earn out period. Pursuant to the transaction, Luis Nieto shall remain the Chief Executive Officer of Clancy Systems International and his current employment benefits shall either remain the same or improved, but in no circumstance undermined for the next 36 months. The closing of the transaction is subject to certain conditions. Epsilon Acquisition Services LLC acted as the consultant to Arke Tech. Clancy Systems International, Inc. completed the acquisition of the outstanding equity stock of Hyperion Digital Group S.R.L DE C.V. from Arke Tech S.A.P.I DE C.V. on March 12, 2020. Clancy Systems International, Inc. (OTCPK:CLSI) cancelled the acquisition of the outstanding equity stock of Hyperion Digital Group S.R.L DE C.V. from Arke Tech S.A.P.I DE C.V. on May 28, 2020. Clancy Systems International, Inc. has terminated, effective immediately, the Stock Purchase Agreement, as well as the Note, Pledge and Security Agreement between the company and Arke Tech S.A.P.I DE C.V. dated as of March 9, 2020, and Earnout Agreement, dated as of March 9, 2020. The company terminated the Stock Purchase Agreement, and related agreements and instruments, as a result of, among other reasons, the seller failing to satisfy certain material pre-closing and post-closing covenants, representations and warranties set forth in the Stock Purchase Agreement. The company has not received certificates for the outstanding equity stock of Hyperion held by the seller. As a result of such termination, the company will not issue the promissory note in the principal amount of $1,350,000 contemplated in the Stock Purchase Agreement. The company will also not issue any shares of company common stock to the seller or seller’s consultant, however, the company has already paid $75,000 to the seller, and $75,000 to a consultant engaged by seller.