Term Sheet, Loan, Debenture Extension and
Debenture Repayment Terms
TORONTO, Nov. 16, 2018 /CNW/ - Clarocity Corporation
(TSXV: CLY; OTCQB: CLRYF) ("Clarocity") today announced the
signing of a non-binding term sheet with iLOOKABOUT Corp. (TSXV:
ILA) ("iLOOKABOUT"), and StableView Asset Management Inc.
("StableView") for the sale to iLOOKABOUT of Clarocity's
Valuation Vision Inc. and Clarocity Valuation Services, LLC
businesses (the "Proposed Transaction").
Bridge Loan
Concurrent with the execution of the Term Sheet, iLOOKABOUT has
advanced a loan in the amount of $700,000 (the "Deposit") to Clarocity
pursuant to a promissory note issued by Clarocity (the
"Promissory Note"), which Deposit will be used by Clarocity
to reduce Clarocity's working capital deficiency. In
addition, iLOOKABOUT will make loans to Clarocity to fund the
operational net cash flow shortfall of Clarocity commencing on
execution of the Promissory Note in an amount of up to US$200,000 per month to a maximum of US$800,000 in aggregate (the "Cash Flow
Payments"). The Deposit and the Cash Flow Payments are
senior, secured, non-interest bearing and payable on demand.
The Deposit and Cash Flow Payments will rank in priority to
Clarocity's existing secured debentures, but iLOOKABOUT has agreed
to certain enforcement-related standstills in favour of the
existing secured debentures.
Conditions Precedent
The Proposed Transaction is subject to a number of conditions
precedent, including, but not limited to execution of a definitive
agreement, the receipt of all necessary shareholder, board,
regulatory and third party approvals and the satisfactory
completion of due diligence by iLOOKABOUT.
Consideration Payable
As consideration for the Proposed Transaction, iLOOKABOUT will
issue the following securities to Clarocity:
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(a)
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convertible
debentures ("Convertible Debentures") in the aggregate
principal amount of $8,700,000. The maturity date of the
Convertible Debentures will be 3 years following issuance (the
"Maturity Date"). Outstanding principal at the
Maturity Date will be payable, at the option of iLOOKABOUT, in cash
or (subject to the receipt of any necessary regulatory approvals)
common shares of iLOOKABOUT. Any common shares issued by iLOOKABOUT
will 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. The holders of Convertible Debentures will have the right
to convert at any time any amounts owing under the Convertible
Debentures into common shares of iLOOKABOUT at a conversion price
of $0.30 per share. 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% for fiscal year 2019; 3% for
fiscal year 2020; and 6% for fiscal year 2021;
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(b)
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26,000,000 common
shares of iLOOKABOUT; and
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(c)
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17,000,000 common
share purchase warrants, with each warrant being exercisable into
one common share of ILA. 10,000,000 of the warrants will have an
exercise price of $0.20 per share; 4,000,000 will have an exercise
price of $0.30 per share and 3,000,000 will have an exercise price
of $0.35 per share. The warrants will have a term of three
years.
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Concurrent with the execution of the Term Sheet, iLOOKABOUT,
Clarocity and StableView entered into an exclusivity agreement
providing that until the earlier of: (a) April 12, 2019; and (b) demand by iLOOKABOUT of
repayment of the Deposit and Cash Flow Payments, the parties will
work exclusively toward completion of the Proposed Transaction.
Debt Repayment
Clarocity and StableView, as the principal secured lender, have
agreed that Clarocity will assign to StableView the $8,700,000 principal amount of iLOOKABOUT
convertible debenture, 23,000,000 common shares of iLOOKABOUT and
14,000,000 warrants of iLOOKABOUT in partial repayment of
outstanding debentures and notes of Clarocity (the "Partial
Repayment"). Upon conclusion of the Proposed Transaction
and the Partial Repayment, Clarocity will hold 3,000,000 common
shares of iLOOKABOUT, 3,000,000 iLOOKABOUT warrants exercisable at
$0.35 for three years and will have
non-capital loss carry forwards, (collectively the "Remaining
Assets"), and will have secured debentures and notes
outstanding; and will have trade and other accounts payable.
Clarocity will endeavour to apply the Remaining Assets to satisfy
its obligations and will report on such as appropriate.
Clarocity will have no ongoing operations and will seek new
business opportunities. Success in identifying a suitable new
business cannot be determined, and no opportunities have been
identified at the present time. Clarocity will have limited
working capital to pursue such opportunities.
Implementation may be by way of merger or acquisition, which may
result in a reverse takeover transaction including a share
consolidation, debt conversion and/or financing. There is no
assurance a suitable or successful transaction will be identified,
undertaken or completed.
Debenture Maturity Extended
Clarocity has extended the maturity date of $11,230,000 principal amount of convertible and
non-convertible debentures and notes from November 14, 2018 to January 25, 2019.
About Clarocity
Clarocity Corporation provides real estate valuation solutions
and platform technologies designed to address today's dynamic
housing market. Our innovative platform is driving the
next-generation of valuation solutions such as MarketValue Pro
(MVP) and BPOMerge and setting new standards in real estate
valuation quality and reliability.
Every day GSE, banking, and investor clients rely on our
proprietary solutions to value assets, fund loans, and securitize
portfolios. As a fully integrated technology and valuation services
company, Clarocity provides a full spectrum of appraisal and
alternative valuation solutions. For more information, visit
www.clarocity.com.
About iLOOKABOUT
iLOOKABOUT is a software, data analytics, data aggregation and
visual intelligence company focused on real property. The Company
primarily serves the property assessment, property taxation,
municipal, insurance, and appraisal sectors, both public and
private, in North America.
iLOOKABOUT 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. iLOOKABOUT
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,
TSX Venture 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 due diligence will be satisfactory to iLOOKABOUT or
that iLOOKABOUT and Clarocity or Clarocity and StableView will be
able to come to a negotiated agreement on the final terms of the
Proposed Transaction and related matters or that the Deposit and
Cash Flow Payments will be repaid on the terms provided or at all.
In addition, there is no assurance that iLOOKABOUT and Clarocity
will obtain all requisite approvals for the Proposed Transaction,
including the approval of the Exchange, approval of their
respective 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
iLOOKABOUT, Clarocity 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
iLOOKABOUT's and Clarocity'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. Clarocity and
iLOOKABOUT believe 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. Neither iLOOKABOUT nor Clarocity assumes any obligation
to update or revise this information to reflect new events or
circumstances except as required in accordance with applicable
laws.
Risk Factors
There are no assurances the sales transactions will be
completed, the loans fully made or debentures repaid, which may be
subject to market conditions, market acceptance, shareholder
approvals, regulatory approvals and counterparty due diligence,
among other factors.
This news release does not constitute an offer to sell or
a solicitation of an offer to buy any of the securities in
the United States. The securities
of the Company will not be registered under the United States
Securities Act of 1933, as amended (the "U.S. Securities Act, and
may not be offered or sold within the
United States or to, or for the account or benefit of U.S.
persons except in certain transactions exempt from the registration
requirements of the U.S. Securities Act).
SOURCE Clarocity Corporation
