MONTREAL,
Jan. 2, 2018 /CNW Telbec/ - LGC Capital Ltd.
(TSXV: LG) ("LGC") is pleased to announce that it has entered
into an Investment Agreement with international investors
YA II PN, Ltd and Cuart Investments PCC Limited pursuant
to which they will loan LGC an aggregate amount of
US $2.34 million (approximately
CAD $2.94 million). LGC intends to use the net
proceeds from the loan to further advance its core business
divisions on its global platform.
John McMullen, CEO of LGC
stated: "We thank London
institutional group RiverFort Global Capital for its involvement
and financial support of LGC's global initiatives at this exciting
time for the Company, as we rapidly expand our cannabis investment
businesses. This funding will further secure LGC's
rapidly-developing platforms within the cannabis space. For a
Canadian company to attract additional funding from an
international group such as RiverFort speaks volumes for the work
accomplished by LGC and our objectives for 2018."
The loan will have a term of twelve months and bear interest at
an annual rate of 12%. LGC will pay the interest on the date
on which funds are advanced to it through the issuance of shares to
the lenders at a price per share equal to the market price of LGC's
shares on the TSX Venture Exchange at the time of the advance.
The principal amount of the loan will be convertible into LGC
common shares at the option of the lenders at a price per share
equal to the lesser of (i) US $0.538 (CAD $0.675),
representing the US dollar equivalent of 135% of the closing
price of LGC's shares on the TSX Venture Exchange on
December 29, 2017 (CAD $0.50), and (ii) 90% percent
of the lowest daily volume weighted average trading price of LGC's
shares during the five trading days immediately preceding the date
of a conversion notice from the lenders, subject to a minimum
conversion price of CAD $0.50.
Upon each advance of funds under the Investment Agreement, LGC
will issue common share purchase warrants to the lenders in an
amount equal to 25% of the dollar amount of the advance divided by
CAD $0.4465, being the volume weighted average trading price
of LGC's shares during the five trading days ended
December 29, 2017. Each warrant will entitle its holder
to acquire one common share of LGC at a price of CAD $0.70,
representing 140% of LGC's closing price on December 29, 2017,
for a period of one year from the date of issuance.
In connection with the Investment Agreement, LGC will pay a
structuring fee to RiverFort Global Capital Ltd. of London, England by issuing shares to it in an
amount equal to 10% of the dollar amount of any advance divided by
CAD $0.675, representing 135% of the closing price of LGC's
shares on the TSX Venture Exchange on December 29, 2017
(CAD $0.50). Fifty percent of the shares will be issued
on the date of the advance while fifty percent will be issued on
the repayment date of the loan, subject to the condition that if
the lenders convert more than half of the amount advanced to LGC on
an aggregate basis at a price per share equal to or greater than
US $0.538, representing the US dollar equivalent of 135% of
the closing price of LGC shares on December 29, 2017
(CAD $0.50), LGC will not be required to issue the second
fifty percent of the shares. LGC will also pay a cash due
diligence fee to RiverFort Global Capital Ltd.
The Investment Agreement contains standard representations,
warranties and covenants of the parties. Closing of the
transaction and the advance of funds to LGC is expected to take
place on or before January 31, 2018, subject to standard
closing conditions. The Investment Agreement, including all
issuances of shares by LGC pursuant thereto, is subject to the
approval of the TSX Venture Exchange. Any securities
issued by LGC at the closing of the transaction, as well as any
shares issued upon conversion of the loan or upon the exercise of
warrants, will be subject to restrictions on resale for a period of
four months from the closing date of the transaction. LGC is
at arm's length from the lenders and RiverFort Global Capital
Ltd.
About LGC (http://www.lgc-capital.com):
LGC Capital Ltd. is a Canadian incorporated public company
listed on the TSX Venture Exchange (TSXV: LG). LGC's objective is
to become a diversified business group with core business divisions
that provide shareholders with exposure to a diverse range of
businesses, products and services.
FORWARD LOOKING STATEMENTS:
This press release may contain forward-looking statements with
respect to LGC Capital Ltd. ("LGC"), its operations, strategy,
investments, financial performance and condition, and the
Investment Agreement referred to above. These statements generally
can be identified by use of forward-looking words such as "may",
"will", "expect", "estimate", "anticipate", "intends", "believe" or
"continue" or the negative thereof or similar variations. The
actual results and performance of LGC could differ materially from
those expressed or implied by such statements. Such statements are
qualified in their entirety by the inherent risks and uncertainties
surrounding future expectations. Some important factors that could
cause actual results to differ materially from expectations
include, among other things, general economic and market factors,
competition, government regulation and the factors described under
"Risk Factors and Risk Management" in LGC's Management's Discussion
and Analysis for the fiscal year ended September 30, 2016, as
filed on SEDAR (www.sedar.com). The cautionary statements qualify
all forward-looking statements attributable to LGC and persons
acting on its behalf. Unless otherwise stated, all forward-looking
statements speak only as of the date of this press release and LGC
has no obligation to update such statements, except to the extent
required by applicable securities laws.
Caution Regarding Press Releases:
Neither the TSX Venture Exchange nor its Regulation Service
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE LGC Capital Ltd