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N E W S R E L E A S E
Looking Glass Labs Announces
2023 Annual Financial Results
Vancouver, British Columbia - 3 November, 2023 / Global Newswire / - Looking
Glass Labs Ltd. ("LGL" or the "Company") (NEO: NFTX) (AQSE: NFTX) (OTC: LGSLF)
(FRA: H1N), a leading Web3 platform specializing in non-fungible token ("NFT")
architecture, immersive metaverse environments, play-to-earn tokenization and
virtual asset royalty streams, is pleased to announce that it has filed its
audited financial results for the year ended July 31, 2023 under the Company's
profile on SEDAR+ at www.sedarplus.ca, the highlights of which are included in
this news release.
Company Highlights (all amounts expressed in Canadian Dollars unless otherwise
noted)
On July 4, 2023, the Company announced the results of the Annual General Meeting
held on July 4, 2023.
On June 1, 2023, the Company announced that it has entered into debt settlement
agreement with an arm's-length creditor to eliminate an aggregate of $367,500 of
indebtedness of the Company through the issuance of an aggregate of 98,000
common shares in the capital of the Company.
On May 29, 2023, the Company announced the launch of its next version Pocket
Dimension. LGL's Pocket Dimension metaverse is an online virtual space providing
their owners and users a virtual space represented by one of eleven different
environments including Archipelago, Countryside, Dale, Dunes, Fjord, Marsh,
Savanna, Tundra, Woodland, Zen, and Genesis Moon. Each environment represents a
unique representation of one of Earth's ecosystems, as described in each
environment's name. Users of Pocket Dimension interact with other users through
avatars. On November 1, 2022, LGL launched the alpha version of Pocket
Dimension, followed by the launch of the beta version on February 21, 2023. The
Company has followed up on the previous versions and launched its public release
version of Pocket Dimension, ("V1.0"). V1.0 addresses various animation,
rendering, collision, and build issues reported by users during the alpha and
beta versions. The latest version has made improvements to ensure smoother
gameplay and a more seamless experience. For a list of the latest improvements,
please refer to the Pocket Dimension release notes at the following URL:
https://www.houseofkibaa.com/pocketdimension
On May 23, 2023, the Company announced that Patrick O'Flaherty has resigned from
its Board of Directors. In his place, LGL announced that Kevin Cornish has been
appointed to the Board of Directors.
On March 30, 2023, the Company has completed the sale of its subsidiary,
GenZeroes Productions Inc., the GenX smart contract and all associated
intellectual property (the "Related IP") (collectively, the "Assets"), to GZU
Entertainment Inc. (the "Purchaser").
As consideration for the Assets, the Company received a promissory note (the
"Note") for $800,000 bearing an interest rate of prime rate plus 1% and a five
-year term to maturity, with the option by the Purchaser to extend the term for
an additional five years. The Company shall also retain a 50% royalty in
perpetuity on all net proceeds from the content owned by the entity GenZeroes
Productions Inc., which relates to the already completed first season of the
GenZeroes series. The Note shall be secured against the shares of GenZeroes
Productions Inc. and the Related IP. As a condition of closing the Transaction,
the Purchaser has also granted to the Company a non-exclusive and royalty-free
license (the "IP License") to use the GenX collection's intellectual property
for its metaverse product branded as Pocket Dimension and video game branded as
Overlords. The term of the IP License is for a period from the closing date
until the Note is fully paid.
On January 26, 2023, the Company announced that it had granted 40,133 restricted
share units (the "RSUs") to certain directors, officers and a consultant of the
Company.
On January 25, 2023, the Company announced that Adam Deffett had resigned from
its Board of Directors. In his place, LGL announced that James Henning had been
appointed as an independent Director to the Board. Mr. Henning was also
appointed as the chair of the audit committee.
On December 29, 2022, the Company announced that Carl Chow had resigned from its
Board of Directors. In his place, LGL announced that Lucas Russell had been
appointed to the Board of Directors.
On November 14, 2022, the Company announced that it had completed its admission
to the Access segment of the AQSE Growth Market ("AQSE") and trading would
commence at 8:00 A.M. GMT on Monday, November 14, 2022 ("Admission") under the
ticker "NFTX". The Company's shares will also continue to trade on the NEO
Exchange, now operating as Cboe Canada.
On September 13, 2022, the Company granted incentive stock options to
consultants to purchase an aggregate of 129,250 common shares at an exercise
price of $10.50 per common share for up to five years. The options vest
quarterly over 24 months.
On September 8, 2022, the Company announced the appointment of Ryan Lange as the
Director of Partnership for House of Kiba. Ryan Lange is an entrepreneur known
for his digital work and has worked with artists including but not limited to U2
and Migos.
On August 9, 2022, the Company entered into a share purchase agreement (the
"SPA") to acquire 100% of Web 3.0 Holdings Corp. ("Web 3.0 Holdings"), a
technology company that is addressing Business to Consumer ("BtoC") and Business
to Business ("BtoB") infrastructure challenges within Web3 environments (the
"Acquisition"). On September 7, 2022, pursuant to the SPA, the Company issued
the shareholders of Web 3.0 Holdings, 184,363 common shares and acquired Web 3.0
Holdings. Web 3.0 Holdings has aggregated a portfolio of retail-focused
engagement and optimization assets, including crossover digital identity code
scripts and digital distribution product frameworks. The Acquisition will allow
LGL full access to Web 3.0 Holding's proprietary retail technology platform. The
Acquisition was an arm's-length transaction.
Ongoing Operations
The Company continues to work on establishing partnerships with media companies,
marketing organizations, automotive brands, fashion companies and others, in
order to create the most diverse and realistic metaverse experience for all
users and brands. This is expected to allow brands to create further value by
monetizing existing products, services and/or intellectual properties.
The Company specializes in consumer engagement applications to leverage
immersive metaverse environments, gamification and Web 3.0/blockchain
monetization strategies.
The Company's roadmap for 2023 and 2024 consists of furthering its Web 3.0
monetization strategies and finding additional avenues to utilize its developed
metaverse environments.
Pocket Dimension Metaverse
The Pocket Dimension metaverse is a hyper-realistic digital world that is being
built using the latest version of Unreal Engine in order to offer users a
premium virtual experience. Pocket Dimensions feature 10 different environments.
Pocket Dimension is a private virtual space that provides users the ability to
explore the virtual space and socialize with other users, through avatars.
The Company released its Alpha version of its Pocket Dimension metaverse on
November 1, 2022, its Beta version on February 21, 2023, and publicly released
the Pocket Dimension metaverse on May 29, 2023
Content Creation
The Company has an in-house design and blockchain development team, available to
provide consulting services such as NFT design and back-end solutions to third
-party clients. The Company has successful launched several Web 3.0 strategies
for company's seeking to expand from traditional consumer markets to Web 3.0.
Crypto Assets and Safeguards
The Company stores its Ethereum cryptocurrency ("ETH"), the main cryptocurrency
used in NFT markets, on physical hardware device often referred to as a
"hardware wallet". The hardware device is similar looking to a USB thumb drive,
except instead of saving data to the device, the devices store cryptocurrency
offline. The Company does not hold any other cryptocurrencies beyond ETH. The
seed phrase to be used to retrieve the contents of the wallet if the ledger
device is physically lost is maintained by two officers of the Company. If the
ledger device is lost, the officers of the Company may gain access of the wallet
by providing the correct seed phrase. The redundancy is to ensure that the seed
phrase is available if required at any time. On a weekly basis, the Company
assesses the cryptocurrency market conditions and its quarterly budget
requirements while it monitors and liquidates its ETH holdings into Canadian
currency on at least a bi-weekly basis by transferring the required ETH on a
cryptocurrency exchange for immediate sale for Canadian currency.
Asset Acquisition
On August 9, 2022, the Company entered into the SPA to acquire all of the issued
and outstanding securities of Web 3.0 Holdings, a technology company that is
addressing BtoC and BtoB infrastructure challenges within Web3 environments.
As consideration, the Company issued 184,363 common shares of the Company on
September 7, 2022, payable to the existing shareholders of Web 3.0 holdings with
a fair value of $1,935,815. The acquisition of Web 3.0 Holdings did not
constitute a business combination because this entity does not meet the
definition of a business under IFRS 3 - Business Combination. As a result, the
transaction was measured at the fair value of equity consideration issued to
acquire these entities. The fair value of the consideration paid was determined
based on the fair value of the assets received as determined based on IFRS 2 -
Share Based Payments.
Purchase price: $
184,363 common shares 1,935,815
Total consideration paid 1,935,815
Cash 804,460
Net assets assumed 804,460
Acquired intangible assets 1,131,355
1,935,815
Financial Result of the Year Ended July 31, 2023
· Revenues in 2023 also decreased from $7,005,238 in fiscal 2022 to $654,957
in fiscal 2023 as a result of the general decrease in the cryptocurrency and NFT
marketplace. This decreased both the number of sales, resales and the resale
price of the Company's outstanding NFTs which resulted in a corresponding
decrease in revenue and royalty revenue generated;
· Net comprehensive loss for the year ended July 31, 2023 was $12,587,314, as
compared to net comprehensive loss of $12,087,045 reported for the same period
of the prior year. The decrease in net loss was mainly the result of a decrease
in stock-based compensation and operating expenses (particularly marketing
costs) during the year ended July 31, 2023. This was offset by a decrease in
sales as well as the recording of an impairment loss on intangible assets as
described above during the year ended July 31, 2023.
· Net loss per share for the year ended July 31, 2023 was $6.88 on a basic
shares outstanding basis, as compared to $9.21 for the same period of the prior
year; and
· Total assets for the period ended July 31, 2023 decreased to $836,925 from
$7,462,687 for the same period of the prior year.
LOOKING GLASS LABS LTD.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(EXPRESSED IN CANADIAN DOLLARS)
2023 2022
$ $
As restated - Note 22
ASSETS
Current assets
Cash and cash equivalents 46,979 308,035
Accounts receivable 110,658 215,152
Digital assets 21,951 154,302
Prepaid expenses 73,790 307,079
253,378 984,568
Non-current assets
Right-of-use assets 226,754 396,819
Property and equipment 35,553 60,636
Deferred contract costs 321,240 385,487
Intangible assets - 2,311,768
Goodwill - 3,323,409
Total assets 836,925 7,462,687
LIABILITIES
Current liabilities
Accounts payable and 1,137,010 907,646
accrued liabilities
Due to related parties 14,233 14,233
Loans payable 1,374,415 40,000
Lease liabilities - current 176,065 164,544
portion
2,701,723 1,126,423
Non-current liabilities
Lease liabilities 67,854 243,919
Deferred revenue 2,170,910 2,604,555
Total liabilities 4,940,487 3,974,897
SHAREHOLDERS' (DEFICIENCY)
EQUITY
Share capital 17,444,673 13,339,178
Reserve 3,720,574 2,830,107
Warrant reserve 9,762 9,762
Accumulated other (66,789) (25,387)
comprehensive loss
Deficit (25,211,782) (12,665,870)
Total shareholders' (4,103,562) 3,487,790
(deficiency) equity
Total liabilities and 836,925 7,462,687
shareholders' (deficiency)
equity
LOOKING GLASS LABS LTD.
CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS
(EXPRESSED IN CANADIAN DOLLARS)
2023 2022
$ $
As restated - Note 22
Revenues
NFT sales 434,093 6,245,675
Royalty income 5,534 496,964
Design services income 215,330 262,599
Total revenues 654,957 7,005,238
Cost of revenues (109,884) (723,250)
Gross profit 545,073 6,281,988
Expenses
Amortization 106,830 84,301
Depreciation 195,147 133,941
Consulting fees 104,547 521,980
Corporate development fees 421,768 757,269
Development costs 140,034 1,855,368
Foreign exchange loss 1,942 21,172
Interest expense 113,163 27,290
Marketing 456,463 2,506,255
Office expenses 322,572 829,800
Professional fees 603,166 720,237
Stock-based compensation 2,566,481 5,970,048
Transfer agent and filing 170,279 216,088
fees
Wages and salaries 922,784 854,844
Operating expenses 6,125,176 14,498,593
Loss before other items (5,580,103) (8,216,605)
for the year
Other income (loss)
Acquisition costs - (375,000)
Change in fair value of - 533,450
contingent liability
Change in revaluation of 2,860 (355,158)
digital assets
Impairment of goodwill (3,323,409) -
Impairment losses (3,277,799) (4,104,000)
Interest income 24,516 -
Loss on use of digital (7,650) (41,264)
assets
Gain on settlement of debt 220,500 5,000
Loss on disposal of - (330,560)
equipment
Loss on control of (428,307) -
subsidiary
Other income (loss) (14,815) (62,362)
Loss from continuing (12,384,207) (12,946,499)
operations
Loss from discontinued (161,705) (377,409)
operations
Loss before income tax (12,545,912) (13,323,908)
Deferred income tax - 1,262,250
recovery
Net loss for the year (12,545,912) (12,061,658)
Loss per share from:
Continuing operations (6.79) (8.92)
Discontinued operations (0.09) (0.29)
Total loss per share, (6.88) (9.21)
basic and diluted
Weighted average number of
common shares outstanding:
Basic and diluted 1,823,531 1,309,875
For more information, please review the Company's audited financial statements
and accompanying management discussion and analysis which are posted on
www.sedarplus.ca.
This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by
virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in
accordance with the Company's obligations under Article 17 of MAR.
The Directors of LGL take responsibility for this announcement.
ABOUT LOOKING GLASS LABS
Headquartered in Vancouver, British Columbia, the Company specialises in
consumer engagement applications to leverage immersive metaverse environments,
gamification and Web 3.0 / blockchain monetisation strategies.
On behalf of
LOOKING GLASS LABS LTD.
"Dorian Banks"
Dorian Banks, Chief Executive Officer
For further information, please contact:
Dorian Banks
Toll-Free: +1 833 LGL-NFTX (833-545-6389)
Email: info@lgl.io
Novum Securities Limited, AQSE Corporate Adviser
David Coffman/ George Duxberry
Tel: +44 (0)207 399 9400
Forward-Looking Information
This press release contains statements that constitute "forward-looking
information" within the meaning of Canadian securities laws ("forward-looking
statements"), which are based upon our current expectations, estimates,
projections, assumptions, and beliefs. All information that is not clearly
historical in nature may constitute forward-looking statements. Forward-looking
statements are typically identified by the use of terms such phrases such as
"anticipate", "believe", "could", "estimate", "expect", "intend", "may", "plan",
"predict", "project", "will", "would" and "should", and similar terms and
phrases, including references to assumptions.
Forward-looking statements, by their nature, are based on assumptions and are
subject to known and unknown risks and uncertainties, both general and specific,
that contribute to the possibility that the forward-looking statement will not
occur. The forward-looking statements in this press release speak only as of the
date hereof and reflect several material factors, expectations, and assumptions.
Undue reliance should not be placed on any predictions or forward-looking
statements as these may be affected by, among other things, changing external
events and general uncertainties of the business. A discussion of the material
risks applicable to us can be found in our current Management Discussion and
Analysis and Annual Information Form, each of which have been or will be filed
on SEDAR+ and can be accessed at www.sedarplus.ca. Except as required by
applicable securities laws, forward-looking statements speak only as of the date
on which they are made and we disclaim any intention and assume no obligation to
publicly update or revise any forward-looking statement, whether as a result of
new information, future events or otherwise. Although the Company believes that
any beliefs, plans, expectations and intentions contained in this news release
are reasonable, there can be no assurance that any such beliefs, plans,
expectations or intentions will prove to be accurate. The Company does not
assume any liability for disclosure relating to any other company mentioned
herein.
Risks and uncertainties about the Company's business are more fully discussed in
the Company's disclosure materials, including its reports filed with the
Canadian securities regulators and which can be obtained from www.sedarplus.com.
SOURCE: LOOKING GLASS LABS LTD.
This information was brought to you by Cision http://news.cision.com
END
(END) Dow Jones Newswires
November 03, 2023 03:00 ET (07:00 GMT)