iLOOKABOUT Corp. (TSXV: ILA; OTCQB: ILATF) (“
ILA”
or the
“Corporation”) announced that, further to
the press release issued June 13, 2019 updating ILA’s proposed
transaction with Clarocity Corporation
(“
Clarocity”), ILA has entered into a purchase and
sale agreement (“
Purchase and Sale Agreement”)
with Hardie & Kelly Inc. (the “
Receiver”) in
its capacity as the receiver, without security, over the assets,
properties and undertakings of Clarocity, providing for the
acquisition by ILA of certain assets of Clarocity, including 100%
of the issued and outstanding common stock of Clarocity Inc. (the
“
Purchased Assets”) in exchange for, among other
things, the credit bid reduction and extinguishment of the Assigned
Debt and Security and all debts owing to ILA by Clarocity under the
Promissory Note (defined below). Further to the above, ILA has
concurrently entered into an assignment of debt and security
agreement (the “
Assignment Agreement”) with
StableView Asset Management Inc. (“
StableView”),
as lender representative under certain convertible debentures
issued by Clarocity (the “
Clarocity Debentures”)
providing for the transfer and assignment of the Assigned Debt and
Security to ILA and all security issued in connection therewith
(the “
Assigned Debt and Security”) for the
purposes of the credit bid. The transactions contemplated by the
Assignment Agreement and the Purchase and Sale Agreement are
referred to herein as the “
Proposed Transaction”.
On June 11, 2019, StableView obtained an order
of the Court of Queen’s Bench of Alberta (the
“Court”) pursuant to section 241(3) of the
Bankruptcy and Insolvency Act appointing the Receiver as the
receiver and receiver and manager over the assets, properties and
undertakings of Clarocity (the “Receivership
Order”).
“We couldn’t be more excited to add Clarocity’s
innovative suite of valuation products to the ILA platform. This
acquisition is a major milestone for us, in executing on our North
American growth strategy while also bringing on an experienced and
well-respected management team within the lending community,” said
Gary Yeoman, CEO and Chairman of ILA. “The addition of Clarocity’s
technology assets allows ILA to round out our real estate valuation
product offerings for our lending, insurance and property
assessment clients both in the US and Canada.”
Purchase and Sale Agreement
The Receiver has sought and received Court
approval of the Purchase and Sale Agreement and a vesting of all of
the Purchased Assets to ILA upon closing. In consideration for the
purchase, ILA will pay or deliver an amount equal to the sum of (a)
the amount necessary to satisfy the Receiver’s Charge (as defined
in the Receivership Order); (b) the amount necessary to satisfy any
Priority Liabilities (as defined in the Purchase and Sale
Agreement), and (c) the value of the non-cash credit in reduction
of the amount of debts owed pursuant to the Clarocity Debentures
and the Promissory Note (defined below) (collectively, the
“Purchase Price”).
Assignment Agreement
Pursuant to the Assignment Agreement, the
Assigned Debt and Security will be assigned to ILA in consideration
of:
- 23,000,000 common shares of ILA (“Common
Shares”);
- 19,000,000 warrants to purchase Common Shares of ILA
(“Consideration Warrants”); 14,000,000 of such
Consideration Warrants will have a term of three (3) years and be
exercisable into a single Common Share of ILA and 5,000,000 of such
Consideration Warrants to purchase Common Shares of ILA will have a
term of eighteen (18) months and be exercisable into a single
Common Share of ILA (10,000,000 of the Consideration Warrants with
a term of three years will have an exercise price of $0.20 per
Common Share, 4,000,000 of the Consideration Warrants with a term
of three (3) years will have an exercise price of $0.30 per Common
Share, and 5,000,000 of the Consideration Warrants with the term of
eighteen (18) months will have an exercise price of $0.25 per
Common Share); and
- Convertible debentures in an aggregate principal amount of
$8,700,000.00 (“Consideration Debentures” together
with the Common Shares and the Consideration Warrants, the
“Consideration Securities”), which shall have a
three (3) year maturity date (extendable for an additional one (1)
year term at the same rate as year three (3) at the option of ILA
and subject to regulatory approvals) and be payable at the election
of ILA, in either cash or Common Shares of ILA to be issued at the
greater of (a) a 10% discount to the 20-day VWAP at such time; and
(b) the lowest price per share permitted by the TSXV. ILA will have
the option to redeem up to $4,000,000.00 of the convertible
debentures in cash at any time. The holders of convertible
debentures will have the right to convert at any time a minimum
amount owing under the convertible debentures into common shares of
ILA at a conversion price of $0.30 per Common Share.
Non-compounding interest will accrue, but only be payable in fiscal
years during which the operating assets are generating positive
operating cash flow and net profit. Interest will accrue at the
followings rates: 0% per annum during the period between the date
of issuance of the convertible debenture (the “Issuance
Date”) and the one (1) year anniversary of the Issuance
Date; at a rate of 3% per annum during the period between the first
year anniversary of the Issuance Date and the second year
anniversary of the Issuance Date and at a rate of 6% per annum
during the period between the second year anniversary of the
Issuance Date and the third year anniversary of the Issuance
Date.
Standstill Agreement
As a condition to closing of the Proposed
Transaction, StableView shall enter into a standstill agreement
(the “Standstill Agreement”) for the benefit of
ILA whereby StableView covenants not to and not to allow any of its
subsidiaries, affiliates, related parties, joint actors or any of
their respective shareholders, directors, employees, partners,
representatives or agents to: i) sell, in any single day, a number
of Common Shares greater than two and a fifth percent (2.2%) of the
average daily trading volume of Common Shares on any applicable
securities exchange for the five (5) preceding trading days, ii)
sell a number of Common Shares greater than five and a half percent
(5.5%) of the Common Shares held by StableView on a non-diluted
basis in any calendar quarter, iii) sell a number of common shares
greater than five and a half percent (5.5%) of the Common Shares
held by StableView on a non-diluted basis to any one person or
group of persons acting jointly, each unless with the prior written
consent of the Corporation. In addition, StableView shall covenant
it and none of its subsidiaries, affiliates, related parties, joint
actors or any of their respective shareholders, directors,
employees, partners, representatives or agents shall: i) acquire
any securities (by conversion of securities or otherwise) of the
Corporation which would result in StableView, alone or together
with any subsidiaries, affiliates, related parties or joint actors
or any of their respective shareholders, directors, employees,
partners, representatives or agents, owning more than twenty-five
percent (25%) of the Common Shares on a non-diluted basis, ii)
engage in the solicitation of proxies with respect to any
securities of the Corporation, iii) commence a take-over bid of the
Corporation, iv) attempt to influence control over the Corporation,
and v) publicly announce, by press release, verbally or otherwise,
any intention to transfer in any way, securities of the Corporation
or to do any of the foregoing, each without the prior written
consent of the Corporation.
The Bridge Loan
ILA had previously advanced loans in the amount
of $2,029,000.00 (the “Bridge Loan”) to Clarocity
pursuant to a promissory note issued by Clarocity (the
“Promissory Note”), which Bridge Loan has been
used by Clarocity to reduce Clarocity’s working capital
deficiencies. The Bridge Loan is senior, secured, and payable on
demand. The Bridge Loan ranks in priority to the Clarocity
Debentures. ILA will release and extinguish the Bridge Loan and the
Promissory Note upon the closing of the Proposed Transaction.
Proposed Transaction
The Proposed Transaction is subject to a number
of conditions precedent, including, but is not limited to the
following:
- the Court granting an approval and vesting order approving the
Purchase and Sale Agreement by no later than July 10, 2019 which
has been satisfied;
- the approval of the Assignment Agreement, the Purchase and Sale
Agreement and the transactions contemplated therein by greater than
50% of the votes cast by the shareholders of ILA which has been
satisfied;
- the approval of the Assignment Agreement, the Purchase and Sale
Agreement and the transactions contemplated therein by the
TSXV;
- the execution by ILA and StableView of the Standstill
Agreement;
- the continued operation and validity of the Receivership
Order;
- the representations and warranties of both ILA and those of the
Receiver being accurate as of the closing date of the Proposed
Transaction and all covenants to be performed by each of them have
been duly performed prior to or on the closing date;
- the Priority Liabilities (as defined in the Purchase and Sale
Agreement) being not in excess of $50,000.00;
- the Receiver having received the Purchase Price; and
- the Consideration Securities being issued in compliance with
applicable securities laws.
Pursuant to the requirements of the TSXV, the
Corporation has obtained the written consent to the Proposed
Transaction from shareholders holding greater than 50% of the
issued and outstanding Common Shares.
The closing of the Proposed Transaction is
expected to occur on or about July 15, 2019 or such other date as
may be agreed to by the Corporation and the Receiver.
The securities offered have not been registered
under the U.S. Securities Act of 1933, as amended, and may not be
offered or sold in the United States absent registration or an
exemption from the registration requirements. This press release
shall not constitute an offer to sell or the solicitation of an
offer to buy nor shall there be any sale of the securities in any
State in which such offer, solicitation or sale would be
unlawful.
About iLOOKABOUT
ILA is a software, data analytics, data
aggregation and visual intelligence company focused on real
property. ILA primarily serves the property assessment, property
taxation, municipal, insurance, and appraisal sectors, both public
and private, in North America. ILA provides powerful data analytics
to the real estate industry through its Real Property Tax Analytics
software offering. The Company’s proprietary StreetScape imagery
and real property focused web- based application, GeoViewPort
unifies property related data and enables desktop review of
properties. ILA has integrated analytics and workflow management
applications into GeoViewPort which create highly valued service
offerings for its clients. To augment its technology-based
offerings, the Company provides real estate consulting services,
with a focus on the Property Tax and Valuation sectors.
Cautionary Note
As noted above, completion of the Proposed
Transaction is subject to a number of conditions, including but not
limited to, Court approval of the Purchase and Sale Agreement, any
necessary stock exchange acceptance and shareholder approval. The
Proposed Transaction cannot close until the required approvals are
obtained. There can be no assurance that the Proposed Transaction
will be completed as proposed or at all.
Investors are cautioned that any information
released or received with respect to the Proposed Transaction may
not be accurate or complete and should not be relied upon.
The TSX Venture Exchange has in no way passed
upon the merits of the Proposed Transaction and has neither
approved nor disapproved the contents of this press release.
Neither TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
Forward-Looking Statements
This news release contains forward-looking
statements that involve known and unknown risks, uncertainties and
assumptions that may not be realized. These statements relate to
future events or future performance and reflect management’s
current expectations and assumptions which are based on information
currently available to management. There is significant risk that
forward-looking statements will not prove to be accurate. A number
of factors could cause actual results, performance or achievements,
or other future events, to be materially different from any future
results, performance or achievements discussed in the
forward-looking statements. Important factors that could cause
actual results to differ materially from those indicated or implied
by forward-looking statements and information include the lack of
assurance that the Receiver will be able to obtain Court approval
of the Purchase and Sale Agreement or that ILA will be able to
obtain all requisite approvals for the Proposed Transaction,
including any necessary exchange approval, approval of ILA’s
securityholders, and any such approvals may be conditional upon
amendments to the terms of the Proposed Transaction. The inclusion
of forward-looking statements and information should not be
regarded as a representation of ILA or any other person that the
anticipated results will be achieved and investors are cautioned
not to place undue reliance on such information.
Forward-looking statements in this news release
also include financial and business prospects, as well as
statements regarding ILA’s future plans, objectives or economic
performance and financial outlooks. Such statements are subject to
risk factors associated with the real estate industry and the
overall economy in both Canada and the United States.
Forward-looking information in this press release, includes, among
other things, information relating to growth acceleration,
deepening market penetration for technology and future revenue
growth. ILA believes that the expectations reflected in this news
release are reasonable but actual results may be affected by a
variety of variables and may be materially different from the
results or events predicted in the forward-looking statements.
Readers are therefore cautioned not to place undue reliance on
these forward-looking statements. In evaluating forward-looking
statements, readers should consider the risk factors which could
cause actual results or events to differ materially from those
indicated by such forward-looking statements.
These forward-looking statements are made as of
the date of this news release and, accordingly, are subject to
change after such date. ILA does not assume any obligation to
update or revise this information to reflect new events or
circumstances except as required in accordance with applicable
laws.
For further information:
Visit www.ilookabout.com or contact: Gary Yeoman, CEO, iLOOKABOUT Corp, 416-347-7707, gary.yeoman@ilookabout.com.
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