Looking Glass Labs Ltd. is pleased to announce that further to the new releases dated 10 November 2023, it has closed a non-brokered private placement offering (“Offering”) of 10,005,000 units (the “Units”) at a price of $0.10 per Unit, for gross proceeds of $1,000,500. Each Unit will consist of one (1) common share in the capital of the Company (each a “Share”) and one common share purchase warrant (each a “Warrant”). Each Warrant will entitle the holder thereof to purchase one (1) additional Share of the Company at an exercise price of $0.10 for a period of two (2) years from the closing date of the Offering.
The gross proceeds from the Offering will be used by the Company for general corporate and working capital purposes.
The Company also advises that its board of directors has approved the settlement of $1,000,000 in debt (the “Debt Settlement”) through the issuance of 10,000,000 Units of the Company to arm’s length creditors for outstanding promissory notes. The Units will be issued on the same terms and conditions as the Offering. The Company agreed to satisfy this outstanding indebtedness with Units to preserve the Company’s cash for working capital.
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All securities issued pursuant to the Offering and Debt Settlement will be subject to a statutory hold period of four months plus a day from issuance in accordance with applicable securities laws.
An application will be made to the Aquis Stock Exchange (“Aquis”) for the 20,005,000 new Shares to be admitted to trading. Admission is expected to take place, and dealings on Aquis in the Shares are expected to commence, at 08:00 on or around 29 November 2023.
Following Admission, the Company will have 21,990,764 Shares in issue. Since the Company currently holds no shares in treasury, the total number of voting rights in the Company will therefore be 21,990,764. These figures may therefore be used by Shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FCA’s Disclosure Guidance and Transparency Rules.
Closing of the Offering and Debt Settlement has been approved by the NEO Exchange Inc., now operating as Cboe Canada (the “Exchange”). Under section 10.10(1) of the Exchange Listing Manual, the Company must obtain security holder approval of the Offering and Debt Settlement since (i) the number of Shares of the Company being issued (on a fully diluted basis) constitutes more than 25% of the issued and outstanding Shares and (ii) the security price less than the Maximum Discount to Market Price (as defined in the Exchange Listing Manuel), unless it replies on the exemption under section 10.10(2) of the Exchange Listing Manuel. The Company will not seek for security holder approval for the completion of Offering and Debt Settlement pursuant to section 10.10(2) of the Exchange Listing Manual on the following basis: (i) the Company is in serious financial difficulty, (ii) no Related Persons (as defined in the Exchange Listing Manual) of the Company is participating in the Offering and Debt Settlement; and (iii) the independent directors have determined that the Offering and Debt Settlement are in the best interests of the Company, is reasonable in the circumstances and that it is not feasible to obtain security holder approval or completed a rights offering to existing security holders on the same terms.
The Company is currently seeking and will need to secure additional sources of working capital to continue operations. The Company’s plan is to actively secure additional sources of funds, including possible equity and debt financing options, while at the same time focus on exercising careful cost control to sustain operations and, if necessary, the Company will curtail spending. Financings are dependent on market conditions and there can be no assurance the Company will be able to raise funds in the future. As a result of challenging current capital market conditions and the Company’s business market sector, comprised of blockchain technology, metaverse development and nonfungible token product offerings, experiencing economic challenges, the Company has had difficulty securing sufficient equity funding for working capital.
Under the current circumstances as summarized above, the independent directors of the Company, acting in good faith, have determined that the Company is in serious financial difficulty, that the Offering and Debt Settlement are designed to improve the Company’s financial position in the near term and that the terms of the Offering and Debt Settlement are reasonable in the Company’s circumstances. Furthermore, no related parties will be participating in the Offering. The Company’s independent directors have also determined that a rights offering to existing securityholders on the same terms as the Offering would not be feasible to complete.
The securities described herein have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the “1933 Act”), or any state securities laws, and accordingly, may not be offered or sold within the United States except in compliance with the registration requirements of the 1933 Act and applicable state securities requirements or pursuant to exemptions therefrom. This news 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 the United States or in any other jurisdiction in which such offer, solicitation or sale would be unlawful.
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