Halo Labs Reports Q2 2019 Financial Results - Seite 3

The Company intends to complete a debt settlement with one creditor (the “Debt Settlement”). Pursuant to the Debt Settlement, the Company intends to retire an aggregate of C$2,009,816 of indebtedness in exchange for the issuance of 5,911,222 common shares of the Company (the “Debt Settlement Shares”) at a price of C$0.34 per Debt Settlement Share. The indebtedness is held by arm’s length parties and will not result in the creation of a new insider or a new control person. The Debt Settlement Shares will be subject to a four-month and one day hold period, subject to approvals as may be applicable.

Common Share Compensation of Certain Employees & Independent Contractors.

Certain employees and independent contractors of the Company have agreed to accept common shares of the Company (“Compensation Shares”) in lieu of the cash compensation. The total aggregate amount of cash compensation to be satisfied is C$4,107,189, which will be satisfied through the issuance of 11,436,961 Compensation Shares at an average price of C$0.36 per Compensation Share.

In connection with the above transaction, certain “related parties,” for the purposes of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”), are expected to receive Compensation Shares and the issuance thereto will be considered a “related party transaction” for the purposes of MI 61-101. The Company is relying on exemptions from the formal valuation and minority shareholder approval requirements available under MI 61-101. The Company is exempt from the formal valuation requirement in section 5.4 and the minority shareholder approval requirement in section 5.6 of MI 61-101 in reliance on sections 5.5(a) and 5.7(a), respectively, of MI 61-101 as the fair market value of the subject matter of, nor the fair market value of the consideration for, the transaction, insofar as it involves related parties, is not more than 25% of the Company’s market capitalization.

Conference Call

Investors can call in for Q&A with Kiran Sidhu, Chief Executive Officer, and Philip van den Berg, Chief Financial Officer, at 4:00 p.m. EST on August 14, 2019:

Participant Toll Free Dial-In Number: [phone]
Participant International Dial-In Number: [phone]
Conference ID: 8679348

Non-IFRS Financial Measures

This press release uses both International Financial Reporting Standards (“IFRS”) and non-generally accepted accounting (“non-GAAP”) measures to assess performance. The Company cautions readers about non-GAAP measure that do not have standardized meaning under IFRS and are unlikely to be comparable to similar measures used by other companies. Readers are urged to review the Company’s management discussion and analysis with respect to non-IFRS measures in respect of its unaudited consolidated financial statements for the three and six months ended March 31 and June 30, 2019 and for additional disclosures regarding these measures.