Clarocity Corporation Announces Closing of Initial Tranche of Standby Financing for $4 Million and Repayment of Convertible Debentures

CARLSBAD, CA, May 10, 2017 /CNW/ - Clarocity Corporation (TSXV: CLY) (the "Company" or "Clarocity") today announced that it has closed its first tranche of the previously announced (see August 31, 2016 press release) up to $5 million non-amortized term Facility ("Facility") provided by StableView Asset Management Inc. ("StableView") on behalf of managed accounts and funds with initial gross proceeds of $4,000,000.

"This additional funding support from StableView Asset Management Inc. will enable us to retire $3.5 million of Convertible Debentures which matured on May 9, 2017," said Shane Copeland, CEO of Clarocity Corporation. "We look forward to being able to put past decisions by the previous management behind us, and work closely with StableView in ensuring the future success of our growing company."

Clarocity issued an aggregate amount of $4 million in principal amount of debentures ("Debentures") at a price of $1,000 per $1,000 principal amount of Debenture.  Each Debenture has a term of 3 months which may be extended at the option of the lender for a further nine months. The Debentures bear an interest rate of 2% per month calculated and payable monthly in cash or in common shares ("Common Shares"), at the option of StableView, subject to reduction to 8% per annum if the the lender extends the term for a further nine months. The Facility is secured against all of the Company's and its subsidiaries' property and assets and will be registered in all of the jurisdictions in which the Company and its subsidiaries carry on business.

The Facility is convertible at $0.16 per share.

Under the terms of the Facility, Clarocity paid StableView a 7% standby fee, by issuing a $350,000 principal amount of promissory note, which may be satisfied by issuance of common shares or added to the Facility at the discretion of StableView.  The Company also paid a drawdown fee of 20% of the amount drawn under the Facility ($800,000) added to the principal amount of the Facility. The Company made a payment to StableView of $1,030,000 through the issuance of a promissory note to obtain waiver of certain drawdown conditions.

The funds are being used, in part, to repay the outstanding principal balance of $3,517,000 of convertible debentures which matured May 9, 2017, that were otherwise convertible into 29,308,334 common shares and warrants exercisable for a further 29,308,334 common shares. The remaining proceeds were used to pay $92,000 of interest on the debentures, with the balance for general corporate purposes.

"The elimination of the convertible debentures marks an important milestone for Clarocity," offered Colin Fisher, President of StableView Asset Management. "With the vast majority of the debenture holders electing to receive an upfront cash payment, the capital structure of Clarocity has been materially cleaned up. With the elimination of 58,616,668 common shares and warrants (29,308,334 common shares and the same number of warrants) from the fully diluted share count, we have significantly reduced shareholder dilution."

Mr. Fisher continued, "This convertible debenture has prevented Clarocity from efficiently executing on many opportunities and has been a millstone for management and shareholders. With its elimination, we can now ensure a more efficient and simplified capital structure. I look forward to working closely with the team at Clarocity in exploring additional avenues that will further eliminate dilution, continue to strengthen the capital structure, and ultimately drive additional shareholder value."

The transaction is subject to the submission of final documents and final approval of the TSX Venture Exchange.

About Clarocity Corporation
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.

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 Information

This news release contains forward-looking statements which may include financial and business prospects, as well as statements regarding the Company's future plans, objectives or economic performance and financial outlooks. Such statements are subject to risk factors associated with the real estate industry, the overall economy in both Canada and the United States. The Company believes 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 hereof, and unless otherwise required by applicable securities laws, the Company does not intend nor does it undertake any obligation to update or revise any forward-looking statements.

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

For further information: For further information, visit www.clarocity.com or contact: Shane Copeland, CEO, Clarocity Corporation, 760-208-6460, scopeland@clarocity.com ; Babak Pedram, Investor Relations, Virtus Advisory Group Inc., 416-644-5081, bpedram@virtusadvisory.com

RELATED LINKS
http://www.clarocity.com/

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