2018-11-27 07:47 ET – News Release
Mr. Anwar Sukkarie reports
LOOPSHARE COMPLETES PRIVATE PLACEMENT OF SECURED CONVERTIBLE DEBENTURES, DEBT SETTLEMENT, SHARE EXCHANGE AND APPOINTS NEW DIRECTORS AND CFO
Loopshare Ltd. has closed its previously announced non-brokered private placement financing of secured convertible debentures pursuant to which the company issued debentures in the principal amount of $3,197,500 and an aggregate of 63.95 million detachable non-transferable share purchase warrants, representing 20,000 warrants for every $1,000 of principal of the debentures.
The terms of the debentures include:
- A maturity date of three years from the date of closing and the principal amount, together with any accrued and unpaid interest, will be payable on the maturity date, unless earlier converted in accordance with their terms;
- The debentures bear interest at the rate of 10 per cent per annum, which interest will be payable on the maturity date, unless earlier converted;
- The principal amount of the debenture is convertible into Class A common shares of the company at the option of the holder at a conversion price of five cents per share in the first year and 10 cents per share thereafter;
- The accrued and unpaid interest is convertible into shares at a conversion price equal to the market price (as such term is defined in the policies of the TSX Venture Exchange), at the time of such conversion.
Repayment by the company of amounts owing under the debentures is secured by a charge over all of the assets of the company. All subscribers to the financing entered into an agency and interlender agreement with the company and Carob Management Ltd., pursuant to which the subscribers appointed the agent to act on their behalf as to certain matters relating to the debentures, including, but not limited to, any enforcement of the security interest.
Each warrant is exercisable into one additional share at an exercise price of 7.5 cents per warrant share for a period of three years from the date of closing.
All securities issued pursuant to the financing are subject to a restricted period of four months and one day.
The proceeds of the financing are expected to be used for general working capital purposes. The company did not pay any finder’s fees in connection with the financing. The financing is subject to final approval of the exchange.
“Loopshare has developed feature-rich, unique technology that allows rapid deployment of highly reliable fleets of shared electric scooters. The ability of Loopshare to expand in several cities worldwide with a cost-effective Loop service offering is now a reality,” said Anwar Sukkarie, president and chief executive officer of Loopshare. “This financing not only provides Loopshare with a clean balance sheet, but most critically allows Loopshare to execute on its strategy of building a global, competitive and high-growth organization. Thank you Saood and Sean for the dedication and professionalism that you have consistently provided in helping Loopshare and its shareholders navigate through challenging times. With great pleasure, Loopshare welcomes our new team members bringing major talent, definite value, expertise and business relationships to empower our business plan. Great to have you in the Loop, Olen, Joel, Thomas and Brooke.”
The company also announces that it has settled debt in the aggregate amount of $645,299.20 owed by the company to various creditors by the issuance of 12,792,651 shares. Of these settlement shares, 226,667 were issued at a deemed price of 7.5 cents per settlement share and 12,565,984 were issued a deemed price of five cents per settlement share. The settlement shares are subject to a restricted period of four months and one day. In connection with the debt settlement, each creditor entered into a debt settlement agreement with the company.
In connection with the debt settlement, the company entered into forgiveness of debt agreements with each of Anwar Sukkarie, president, chief executive officer and a director of the company, and Juliet Jones, effective Nov. 23, 2018, to settle outstanding debts in the aggregate amount of $404,500.
Concurrent with the Sukkarie debt forgiveness, the company entered into an amended employment agreement with Mr. Sukkarie, pursuant to which the company agreed to, among other things:
- Modify the termination date of Mr. Sukkarie’s employment with the company from an indefinite period to three years from the date of the amended employment agreement;
- Pay Mr. Sukkarie a signing bonus of $50,000;
- Pay Mr. Sukkarie a performance bonus of $291,000 upon the attainment by the company of certain milestones.
In connection with the amended employment agreement, the company’s news release dated Nov. 16, 2018, stated a performance bonus of $191,000, but should have stated $291,000. All other details of the news release dated Nov. 16, 2018, remain accurate and in effect.
Share exchange agreement
The company also closed the share exchange agreement with 1022313 B.C. Ltd. and each of the arm’s-length shareholders of target, as previously announced on Aug. 23, 2018, whereby the company acquired all of the issued and outstanding common shares of the target from the target shareholders in consideration for the issuance of 19,999,998 shares to the target shareholders.
For more information regarding the share exchange, please see the company’s news release dated Aug. 23, 2018.
Related party disclosure
In connection with the debt settlement, Mr. Sukkarie accepted 7.19 million settlement shares at a deemed price of five cents per settlement share as payment for $302,000 in loans made by Mr. Sukkarie to the company and for $57,500 for unpaid remuneration for services provided by Mr. Sukkarie to the company. In connection with the financing, Mr. Sukkarie, Paul Chucrallah and Berytech Fund Management SAL (Holding), a company controlled by Mr. Chucrallah, subscribed for debentures in the aggregate principal amount of $300,000. Since Mr. Sukkarie is the president, chief executive officer and a director of the company, and Mr. Chucrallah is a director of the company, each are considered related parties within the meaning of Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions and, as such, each respective issuance will be considered a related party transaction within the meaning of MI 61-101. Both the financing and the debt settlement will be exempt from the valuation requirement of MI 61-101 by virtue of the exemption contained in Section 5.5(b) as the company’s shares are not listed on a specified market and from the minority shareholder approval requirements of MI 61-101 by virtue of the exemption contained in Section 5.7(a) of MI 61-101 in that the fair market value of the shares issued to each related party did not exceed 25 per cent of the company’s market capitalization.
Change in officers and directors
The company is pleased to announce that, effective upon the closing of the transactions, the company appointed Olen Aasen, Joel Primus and Thomas Stephenson to the company’s board of directors.
Concurrent to the appointments, Sean Bromley resigned as chief financial officer and as a director of the company and Saood Al-Junaibi resigned as a director of the company. The company would like to thank Mr. Bromley and Mr. Al-Junaibi for their service to the company and wish them both the best in each of their respective future endeavours.
Filling the vacancy created by Mr. Bromley’s resignation as CFO, the company is pleased to announce that Brooke Hurford has agreed to act as CFO of the company.
For more information regarding the appointment of Ms. Hurford as CFO, the appointments and for each respective bio thereto, please see the company’s news release dated Nov. 16, 2018.
Investors relations agreement
The company is also pleased to announce that is has engaged Capital Market Access LLC (CMA) to provide certain consulting services that will include investor relations services pursuant to an independent consulting agreement dated Nov. 23, 2018, between the company and CMA. The term of the consulting agreement is for six months commencing on Nov. 23, 2018, unless earlier terminated in accordance with the consulting agreement.
As compensation for CMA providing the services, CMA will be paid a monthly fee of $7,500 (U.S.) for the term of the consulting agreement. The company also granted CMA 500,000 stock options at an exercise price of five cents per common share. The options vest over a 12-month period with 25 per cent vesting every three months after the date of grant and will be exercisable for a period of five years. The options and underlying shares will be subject to a statutory hold period expiring four months and one day after the date of grant. The company and Capital maintain an arm’s-length relationship.
Grant of stock options
The company also announces that it has granted an aggregate of 5.08 million stock options (excluding the stock options granted to CMA) to certain directors, officers, employees and consultants of the company for the purchase of up to an aggregate of 5.08 million shares of the company, pursuant to its stock option plan, at an exercise price of five cents per common share. Shares issuable upon the exercise of stock options held by the optionees of the company will be subject to an exchange hold period of four months and one day from the date of the grant of the stock options. All of the stock option granted are exercisable until expiry on Nov. 23, 2023, and vest as follows: (i) 40 per cent on the first anniversary of the date of grant, (ii) 30 per cent on the second anniversary of the date of grant and (iii) 30 per cent on the third anniversary of the date of grant.
The company is also pleased to announce that it has entered independent consulting agreements with each of Mr. Primus, Ms. Jones, Ms. Hurford, and King & Bay West Management Corp. dated Nov. 23, 2018, to provide certain consulting services to the company. As compensation for the consultants providing their services to the company, Mr. Primus will be paid a monthly fee of $4,000 for the two-year term of his consulting agreement and paid a $50,000 signing bonus; Ms. Jones will be paid an aggregate fee of $50,000 over three years; Ms. Hurford will be paid a monthly fee of $7,200 for the one-year term of her consulting agreement; and King & Bay will be paid a monthly fee of $4,000 plus GST for the three-year term of its consulting agreement and paid a $50,000 signing bonus.
About Loopshare Ltd.
Loopshare, a Vancouver company established in 2009, and its wholly owned subsidiary Saturna Green Systems Inc. have commercialized a first-generation, wireless ruggedized seven-inch touch screen dashboard with telematics functionality for electric innercity vehicles. Loopshare’s highly specialized display enables a broad range of services for consumer, tourism or commercial use. Loopshare’s purpose is to develop and deploy connected end-to-end solutions for innercity transportation vehicles, specifically geared toward transportation as a service (TaaS). Through zone operators worldwide, Loopshare will implement TaaS solutions to offer commuter convenience and tourist applications to subscribers based on Loopshare’s commuter-/tourism-/business-focused, unique, state-of-the-art wireless two-wheel electric sharing technology.