Liberty Defense Holdings Announces Transformation Plan

/NOT FOR DISTRIBUTION TO U.S. NEWSWIRES OR DISSEMINATION IN THE UNITED STATES/

VANCOUVER, BC and WILMINGTON, Mass., Nov. 12, 2024 /CNW/ - Liberty Defense Holdings Ltd. ("Liberty" or the "Company") (TSXV: SCAN) (OTCQB: LDDFF) (FRANKFURT: LD2), a leading technology provider of AI-based next generation detection solutions for concealed weapons and threats, is pleased to provide information on its corporate transformation plan.

Bill Frain, CEO and Director, stated, "Given the current conditions in the capital markets over the past year, we have made the decision to cancel our existing LIFE offering, streamline our balance sheet, and consolidate our share structure. These steps are aimed at positioning Liberty Defense to attract both existing and new investors as we execute on our multi-year growth strategy. This includes securing the necessary capital to meet the increasing demand for HEXWAVE across various verticals, as well as launching our TSA-funded High-Definition Advanced Imaging Technology (HD-AIT)."

Growth Financing Process & Commercialization Go-to-Market

In connection with the upcoming share consolidation, the Company is expected to undertake a financing to raise funds in an amount to be determined (the "Offering"). The Offering will be priced in the context of the market in the following weeks and both priced and issued on a post-consolidation basis.

The Company plans to use the proceeds of the Offering to further the production of HEXWAVE technology to support the increase in demand for the product and deliver units in backlog to customers, for general corporate purposes and for payment of outstanding liabilities of the Company.

Completion of the Offering is subject to certain conditions including, but not limited to, the receipt of all necessary approvals, including the approval from the TSXV.

Bill Frain added, "Nearly four years after going public and raising over $40 million to develop the HEXWAVE technology from patents to commercialization, we are now shifting our focus from engineering to scaling Liberty into one of the leading global security companies. Our emphasis will be on expanding customer deployments, strengthening partnerships, and targeting key verticals. On behalf of the entire team, I can say we're excited to roll out our products and AI software designed to protect critical infrastructure from emerging threats."

The security screening market is valued at $11.72B in 2024 and is projected to reach US$25.7B by 2034. The demand for security screening is likely to exhibit a CAGR of 8.2% during the forecast period. Some of the key drivers for the growth in the market include:

• Continuous innovation in security screening technologies, including AI and machine learning
• TSA Mandate for 100% screening of all employees at US airports by April 2026
• Escalating threats of corporate espionage and insider risks
• The rise in criminal activities and illicit trade necessitates comprehensive security screening measures to safeguard against potential threats
• Growing concerns about the protection of critical infrastructure, such as power plants and government facilities

The Company has established partnerships with some of the most influential agencies in the security and detection landscape, including TSA, MIT Lincoln Labs, Los Alamos National Labs, and Pacific Northwest National Labs to name a few.

Since the first shipments of HEXWAVE in late 2023, the Company backlog has grown to 40 systems currently, following successful deployments at Toronto Pearson International Airport, Chile Corrections, Amsterdam, Manchester Airport, Los Alamos National Labs, Rochester Airport, MIT, and TSA among others.

Share Consolidation

To optimize the capital structure of the Company and prepare for the eventual Nasdaq uplisting, the Company intends to consolidate its common shares (the "Common Shares") on the basis of ten (10) pre-consolidation Common Shares for every one (1) post-consolidation Common Shares (the "Consolidation").

The Company currently has 167,568,412 Common Shares issued and outstanding, and following the Consolidation, the Company will have approximately 16,756,841 Common Shares issued and outstanding, prior to rounding for fractional shares.

The Consolidation was approved by the board of directors of the Company in accordance with the Articles of the Company, but remains subject to the approval of the TSXV.  The Company will issue a further news release upon receiving TSXV approval, announcing the effective date of the Consolidation. 

It is anticipated that insiders of the Company may participate in the Offering, and such securities issued to insiders will be subject to a four month hold period pursuant to applicable policies of the TSXV. The issuance of any securities to insiders will be considered a "related party transaction" within the meaning of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The Company is expected to rely on exemptions from the formal valuation requirements of MI 61-101 pursuant to section 5.5(a) and the minority shareholder approval requirements of MI 61-101 pursuant to section 5.7(1)(a) in respect of such insider participation as the fair market value of the transaction, insofar as it involves interested parties, is not expected to exceed 25% of the Company's market capitalization.

Debt Settlements

In connection with the Consolidation, the Company is also expected to settle some of our payables through the issuance of Common Shares (the "Debt Settlements"). The Debt Settlements are expected to help to conserve and extend the Company's working capital. The Debt Settlements will be both issued and priced in the context of the market on a post-Consolidation basis. Completion of the Debt Settlements is subject to certain conditions including, but not limited to, the receipt of all necessary approvals, including the approval of the TSXV.

The transactions contemplated herein are described to transform the capital structure of the Company and position it for growth and shareholder value appreciation. Management believes that the transactions comprising the business transformation will benefit all shareholders as the Company continues to ramp up business activity.

In addition, the Company will not proceed with its previously announced non-brokered LIFE offering of units most recently disclosed in the Company's news release dated October 28, 2024.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities being offered have not been, nor will they be, registered under the 1933 Act or under any U.S. state securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the 1933 Act, as amended, and applicable state securities laws.

On Behalf of Liberty

Bill Frain
CEO & Director

About Liberty

Liberty (TSXV: SCAN, OTCQB: LDDFF, FRANKFURT: LD2) provides multi-technology security solutions for concealed weapons detection in high volume foot traffic areas and locations requiring enhanced security such as airports, stadiums, schools, and more. Liberty's HEXWAVE product, for which the Company has secured an exclusive license from Massachusetts Institute of Technology (MIT), as well as a technology transfer agreement for patents related to active 3D radar imaging technology, provides discrete, modular, and scalable protection to provide layered, stand-off detection capability of metallic and non-metallic weapons. Liberty has also recently licensed the millimeter wave-based, High-Definition Advanced Imaging Technology (HD-AIT) body scanner and shoe scanner technologies as part of its technology portfolio. Liberty is committed to protecting communities and preserving peace of mind through superior security detection solutions. Learn more: LibertyDefense.com

FORWARD-LOOKING STATEMENTS

When used in this press release, the words "estimate", "project", "belief", "anticipate", "intend", "expect", "plan", "predict", "may" or "should" and the negative of these words or such variations thereon or comparable terminology are intended to identify forward-looking statements and information. Although Liberty believes, in light of the experience of their respective officers and directors, current conditions and expected future developments and other factors that have been considered appropriate, that the expectations reflected in the forward-looking statements and information in this press release are reasonable, undue reliance should not be placed on them because the parties can give no assurance that such statements will prove to be correct. The forward-looking statements and information in this press release include, amongst others, the Company's future business plans and its proposed business transformation, the Company's ability to complete the Offering on the terms announced or at all, the use of proceeds of the Offering, the receipt of approval for the Offering by the TSXV, the completion of the Consolidation, the receipt of approval for the Consolidation by the TSXV, the completion of the Debt Settlements and the receipt of approval for the Debt Settlements by the TSXV. Such statements and information reflect the current view of Liberty. Such statements and information reflect the current view of Liberty. There are risks and uncertainties that may cause actual results to differ materially from those contemplated in those forward-looking statements and information.

By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. There are a number of important factors that could cause Liberty's actual results to differ materially from those indicated or implied by forward-looking statements and information. Such factors include, among others: currency fluctuations; limited business history of the parties; disruptions or changes in the credit or security markets; results of operation activities and development of projects; project cost overruns or unanticipated costs and expenses; and general development, market and industry conditions. The parties undertake no obligation to comment on analyses, expectations or statements made by third parties in respect of their securities or their respective financial or operating results (as applicable).

Liberty cautions that the foregoing list of material factors is not exhaustive. When relying on Liberty's forward-looking statements and information to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Liberty has assumed that the material factors referred to in the previous paragraph will not cause such forward-looking statements and information to differ materially from actual results or events. However, the list of these factors is not exhaustive and is subject to change and there can be no assurance that such assumptions will reflect the actual outcome of such items or factors. The forward-looking information contained in this press release represents the expectations of Liberty as of the date of this press release and, accordingly, are subject to change after such date. Liberty does not undertake to update this information at any particular time except as required in accordance with applicable laws.

Neither the 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 press release.

SOURCE Liberty Defense Holdings, Ltd.

For further information about Liberty, please contact: Jay Adelaar, Senior Vice President of Capital Markets, Email: [email protected], Tel: [phone]