Symbol: TSX-V: LG
MONTREAL, March 12, 2018 /CNW Telbec/ - LGC Capital
Ltd. (TSXV: LG) ("LGC") is pleased to announce the signing of a
Letter of Intent ("LOI") with Evolution Bnk ATM S.p.A
("Evolution Bnk") for a secured loan by LGC in an amount of
€ 3 million (approximately CAD $4.7 million), convertible in certain
circumstances into a 49% equity interest in Evolution Bnk.
The LOI also provides that LGC will acquire a 5% royalty on
Evolution Bnk's net sales.
Evolution Bnk is establishing a new Cannabis cultivation
operational division, with the first 5,000
m2 currently under construction in the famous
flower-growing region of Sanremo on Italy's Mediterranean coast. Evolution
Bnk is also generating revenues from Bitcoin mining and Bitcoin ATM
machines, which have been and are being added into the Italian
market.
Mazen Haddad, LGC's
Co-Chairman commented; "We see Europe as a very important and fast-growing
market for the legalized Cannabis sector. LGC is reviewing a
number of very exciting cash-flowing opportunities in Europe and the Evolution Bnk deal will see LGC
enter the European legalized cannabis market and Bitcoin sector in
a very significant way and potentially provide us with strong cash
flow and growth opportunities going forward. LGC has chosen
to invest in Evolution Bnk due to its integrated approach combining
energy efficiency and heat transfer technology which should
significantly lower costs for both operations. A patent is in
the process of being filed for this application and more
information on this technology will be disclosed in the
future."
Sanremo is Italy's leading
floricultural center and flowers have been a primary export for the
region. The Mediterranean coastal climate is ideal for the
cultivation of Cannabis, and Sanremo has significant greenhouse
surplus that offers ample human resources rich in horticultural
experience.
Medical Cannabis has been legal in Italy since January
2013 and is available for medical-only use in hospitals and
pharmacies. "Low THC" (0.2% THC by law) Cannabis Light is
sold in Italian tobacconists.
In the next four to five months, Evolution Bnk intends to
complete the construction of its first Cannabis cultivation
facility on 5,000 m2 (54,000 square feet) in
Sanremo, where it is converting existing greenhouses. In
addition, Evolution Bnk has one retail location in Sanremo serving
as both a dispensary and housing a Bitcoin ATM. Evolution Bnk
has also contracted a further four locations in Italy. This
marks another near-term revenue generating Cannabis investment.
Evolution Bnk believes that the first phase of greenhouse
conversion should produce about 7,500 kg of cannabis
production per year.
Evolution Bnk is planning the conversion and commissioning of
another 15,000 m2 (160,000 sq. ft.) of greenhouse
space in the Sanremo area during the year. There is
significant margin to further increase this growing capacity.
Evolution Bnk's Bitcoin division is actively rolling out its
first Bitcoin ATMs in the Sanremo area, having successfully
installed two ATMs in the past two weeks, and plans to install a
further 700 Bitcoin ATMs throughout Italy and other selected European countries
during the next year. Evolution Bnk has advised LGC that its
Bitcoin division has already generated € 280,000 in revenues
(approximately CAD $445,000) for the
three months ended February 28, 2018 with a trading profit of
€ 80,000 (approximately CAD $126,500).
At the closing of the loan transaction, LGC will pay a finder's
fee to an arm's-length third party in an amount equal to 6% of the
value of the transaction, payable 50% in cash and 50% in LGC
shares. LGC will issue the shares at a price per share equal
to the closing price of its shares on the TSX Venture Exchange
immediately prior to the closing of the loan transaction.
The Agreement
The LOI provides that LGC will lend €3 million
(approximately CAD $4.7 million)
to Evolution Bnk. The loan will have a four-year term, bear
interest at an annual rate of 10% and be secured by first-ranking
security on all of the assets of Evolution Bnk. LGC will
advance the funds in tranches in accordance with budgets and
timetables provided by Evolution Bnk, all to the satisfaction of
LGC. Evolution Bnk will use the proceeds from the loan for
the realization of its business plan, to LGC's satisfaction.
The loan will be convertible into Evolution Bnk shares at
LGC's discretion at the time of a liquidity event. In the
event that the loan is converted in full, LGC will acquire 49% of
the then-issued and outstanding shares of Evolution Bnk. As
consideration for providing the loan, LGC will receive a 5% royalty
on Evolution Bnk's net sales, payable to LGC on a quarterly
basis.
Closing of the transaction with Evolution Bnk is subject to
satisfactory due diligence on the part of LGC, which is expected to
take approximately one month, the parties entering into definitive
agreements, standard closing conditions, and regulatory approval,
including that of the TSX Venture Exchange.
Note: On March 9, 2018, the Bank
of Canada's daily exchange rate
for the Euro was € 1.00 = CAD $1.58.
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.
About Evolution Bnk ATM S.p.A (www.evolutionbnk.com)
Evolution Bnk ATM S.p.A is a company based in Bulgaria, which has a statute for the
marketing and trading of cryptocurrency and crypto-value mining and
Bitcoin distribution and installation. Its goal is to become
a leader in cryptocurrency and ATM management connected to a
network of its own (bidirectional satellite intranet) and becoming
a leader in Italy for the
production and distribution of industrial Cannabis produced in
greenhouses using its own propriety patents.
Information Relating to Evolution Bnk ATM
S.p.A.
All information contained in this press release relating to
Evolution Bnk ATM S.p.A. has been provided to LGC by Evolution Bnk
ATM S.p.A. LGC has relied upon this information without
having made independent inquiries as to its accuracy or
completeness and assumes no responsibility for any inaccuracy or
incompleteness of such information.
FORWARD-LOOKING STATEMENTS
This press release may
contain forward-looking statements with respect to LGC Capital Ltd.
("LGC") and Evolution Bnk ATM S.p.A. ("Evolution Bnk"), and
their respective operations, strategy, investments, financial
performance and condition. 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 and Evolution Bnk 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
neither LGC nor Evolution Bnk has any 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