iLOOKABOUT Corp. (TSXV:ILA) (‘ILA') entered into a letter agreement to acquire Clarocity Inc, Valuation Vision Inc. and Clarocity Valuation Services LLC from Clarocity Corporation (TSXV:CLY) for CAD 14.8 million on April 2, 2019. The agreement was signed with StableView Asset Management Inc. (‘StableView'). As consideration, ILA will issue convertible debentures in the aggregate principal amount of CAD 8.7 million, 26 million common shares and 17 million warrants, with each warrant being exercisable into one common share of ILA. 10 million of the warrants will have an exercise price of CAD 0.20 per share; 4 million will have an exercise price of CAD 0.30 per share and 3 million will have an exercise price of CAD 0.35 per share. The warrants will have a term of three years. Concurrent with the execution of the term sheet, ILA advanced a loan in the amount of CAD 0.7 million to Clarocity Corporation, pursuant to a promissory note, which deposit will be used to reduce working capital deficiency. In addition, ILA will make loans to Clarocity Corporation to fund the operational net cash flow shortfall commencing on execution of the promissory note in an amount of up to CAD 0.26 million per month to a maximum of CAD 1.05 million in aggregate. As per the agreement, the consideration shall all be paid directly to the debenture holders.

On June 11, 2019, StableView obtained an order of the Court of Queen's Bench of Alberta appointing Hardie & Kelly Inc. as receiver and receiver and manager over the assets, properties and undertakings of Clarocity Corporation.

As per revised terms disclosed on June 13, 2019, the consideration payable is CAD 13.07 comprising 23 million common shares of ILA, 19 million warrants to purchase ILA shares and convertible debentures in an aggregate principal amount of CAD 8.7 million. Of the 19 million warrants being issued, 10 million will have an exercise price of CAD 0.2 per share, 4 million will have an exercise price of CAD 0.3 per share and 5 million will have an exercise price of CAD 0.25 per share.

On July 11, 2019, a definitive sale and purchase agreement was signed. As a condition to the agreement, ILA will enter into a standstill agreement with StableView that puts certain restrictions on the sale of the consideration shares. ILA has advanced loans in the amount of CAD 2,029,000 to Clarocity Corporation, which has been used to reduce working capital deficiencies of Clarocity Corporation. ILA will release and extinguish the bridge loan and the promissory note upon the closing of the transaction.

The agreement can be terminated any time prior to closing by mutual written consent of Hardie & Kelly, the receiver and iLOOKABOUT Corp. The transaction is subject to a number of conditions precedent, including, but not limited to execution of a definitive agreement, board, regulatory and third party approvals. The agreement is subject to approval by the relevant bankruptcy court, approval by TSXV, execution of the standstill agreement and certain designated liabilities being not in excess of CAD 50,000. Clarocity Corporation has obtained a written consent to the transaction from shareholders holding greater than 50% of the issued and outstanding common shares. The transaction is expected to be completed on or about July 15, 2019.

Robyn Gurofsky of Borden Ladner Gervais LLP acted as legal advisor for Hardie & Kelly Inc. Joseph Bellissimo of Cassels Brock & Blackwell LLP acted as legal advisor for iLOOKABOUT Corp.

iLOOKABOUT Corp. (TSXV:ILA) (‘ILA') completed the acquisition of Clarocity Inc, Valuation Vision Inc. and Clarocity Valuation Services LLC from Clarocity Corporation (TSXV:CLY) on July 18, 2019. The terms of the transaction were the same as previously disclosed. iLOOKABOUT has released and extinguished the bridge loan and the promissory note.