LGC Capital Ltd.
Symbol: TSX-V: LG
MONTRÉAL, Jan. 31, 2018 /CNW/
- LGC Capital Ltd. (TSXV: LG) ("LGC") is pleased
to announce that it has received conditional approval from the TSX
Venture Exchange for its previously-announced transaction 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 $2.88 million). LGC intends to
use the net proceeds from the loan to further advance its core
business divisions on its global platform.
Closing of the transaction and the advance of funds to LGC is
expected to take place shortly, subject to standard closing
conditions.
The Investment Agreement between LGC and the two lenders, as
amended (the "Investment Agreement"), provides that the loan will
have a term of twelve months and bear interest at an annual rate of
9.5%, payable quarterly in arrears. 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% 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 cash
due diligence fee to RiverFort Global Capital Ltd. ("RiverFort") of
London, England. LGC will
also pay a structuring fee to RiverFort by issuing shares to it in
an amount equal to 12.5% of the dollar amount of any advance of the
loan by YA II PN, Ltd, less the amount of the due diligence fee,
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). The shares will be issued on the date
of the advance of the loan.
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.
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, 2017, 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