LGC Capital Ltd.
Symbol: TSX-V: LG
MONTREAL, Sept. 26, 2017 /CNW Telbec/ - LGC Capital
Ltd. (TSXV: LG) ("LGC") announces that it has entered into a
binding term sheet with Habi Pharma Pty Ltd of Perth, Australia, doing business as "Little
Green Pharma", which provides that LGC will acquire an initial
strategic 4.99% interest in Little Green Pharma, one of the few
licenced companies authorized to cultivate and produce Medical
Cannabis within Australia. The binding term sheet provides
that LGC has the option to increase its interest in Little Green
Pharma to a maximum of 19.03%, subject to a number of conditions,
including Australian Government regulatory approvals.
Little Green Pharma (www.lgpharma.com.au) has advised LGC that
it plans to commence cultivation and production of one of the first
clean locally-grown Medical Cannabis products for use solely within
Australia, giving hope and relief
to those suffering from certain debilitating illnesses.
John McMullen, LGC's CEO,
commented; "This will be LGC's first investment into the legalized
Medical Cannabis sector in the Asia-Pacific region. This will be an important
investment initiative for LGC in the region as Little Green Pharma
is one of the few companies in Australia licenced to cultivate and produce
Medical Cannabis. Australia has
now legalized the use of Medical Cannabis and Little Green Pharma
plans to commence production shortly."
Fleta Solomon, Little Green
Pharma's Managing Director, commented; "We look forward to having
LGC on board as a new strategic long-term shareholder in Little
Green Pharma. LGC's support and funding will assist in providing
the necessary working capital to allow Little Green Pharma to
cultivate and produce our product range for Australian patients in
the coming months."
Binding Term Sheet
The binding term sheet between LGC and Little Green Pharma
provides that:
1. LGC will subscribe for 2,161,091 shares of Little Green
Pharma, representing 4.99% of its issued and outstanding shares, by
paying AUD $432,218 and issuing 5,660,000 LGC common shares to
Little Green Pharma at a deemed issue price of $0.11 per share.
2. Subject to the issuance by Little Green Pharma of shares to
various third parties, LGC will subscribe for a further 752,937
shares of Little Green Pharma for cash consideration of
AUD $150,587, so as to maintain its shareholding of 4.99% in
Little Green Pharma.
3. Subject to approval by Little Green Pharma in its sole
discretion, LGC may further subscribe, at its option, for
additional shares of Little Green Pharma in order to increase its
shareholding to a maximum of 19.03%. In the event that this
option is exercised, LGC will subscribe for a maximum of 4,585,972
shares of Little Green Pharma for maximum cash consideration of
AUD $917,194.
On September 25, 2017, the Bank of Canada's daily average exchange rate for the
Australian dollar was AUD $1.00 = CAD $0.9806.
Closing Conditions
Closing of the transaction with Little Green Pharma is subject
to standard conditions, including the negotiation and signing of a
definitive subscription agreement between LGC and Little Green
Pharma. LGC cannot give any assurance that the transaction with
Little Green Pharma will close in accordance with the terms and
conditions of the binding term sheet or at all. Further, LGC cannot
proceed with any investment in Little Green Pharma prior to
obtaining formal approval from the TSX Venture Exchange with
respect thereto. Although LGC has commenced the process for
obtaining formal approval from the TSX Venture Exchange, LGC
cannot give any assurance that it will be able to obtain such
approval.
LGC will require the approval of the Australian Government's
Office of Drug Control (ODC) in order to increase its interest in
Little Green Pharma to more than 4.99% and may require the approval
of the Australian Foreign Investment Review Board (FIRB) to
increase its interest in Little Green Pharma to more than 15%.
Little Green Pharma has agreed to provide all necessary assistance
and support to LGC with respect to such government approvals. LGC
cannot give any assurance that it will be able to obtain such
approvals, to the extent necessary.
Little Green Pharma
LGC understands that Little Green Parma is a privately-owned
company based in Western Australia and that in
April 2017, Little Green Pharma was granted one of the few
licenses in Australia by the
Australian Government's Office of Drug Control (ODC) to cultivate
and produce Medicinal Cannabis for Australian patients from
June 1, 2017.
Little Green Pharma has stated that its goal is to make safe,
reliable and cost-effective Medicinal Cannabis products available
to Australians through approved medical practitioners, and that it
will produce a range of Medical Cannabis preparations with
differing cannabinoid profiles from multiple plant varieties.
Little Green Pharma has advised LGC that it has an advanced
manufacturing technology for producing Medicinal Cannabis for oral
administration. Its process ensures high bio-availability of the
active cannabinoids, meaning that a therapeutic effect can be
achieved with precise dosage control and with significantly lower
cannabinoid doses.
Little Green Pharma has stated that its manufacturing process
can maintain the integrity of CBD-A and THC-A if required, avoiding
the carboxylation of important cannabinoids. Preparations will meet
strict regulatory standards for medicinal cannabis specifications
ensuring a clean, high-quality product. All growing, production and
good manufacturing practice is subject to the terms of the
Australian federal licence aimed at security and quality assurance
by the relevant regulatory bodies.
The Australian Medical Cannabis Market
Little Green Pharma has advised LGC that Australia passed federal legislation in 2016
aimed at permitting the use of Medicinal Cannabis via a
tightly-controlled licensed medical prescription system.
In March 2016, The White
Paper, entitled Medicinal Cannabis in Australia: Science, Regulation &
Industry, was developed by the University of Sydney Business School's Community
Placement Program. Its publication followed the news that the
Australian Government would shortly allow the cultivation of
cannabis in Australia for medical
or scientific purposes.
As the first-ever White Paper that analyses the medicinal
cannabis industry in Australia,
the paper examines international experiences and approaches, supply
chain economics, quantities of cannabis required and potential
regulatory dynamics. It also serves as a framework for the industry
to commence engaging key stakeholders such as the Australian
Government and the medical community.
The University of Sydney summary of
the White Paper can be viewed via the below link:
http://sydney.edu.au/news-opinion/news/2016/03/29/legalising-medicinal-cannabis-would-create--100-million-industry.html
The White paper can be viewed at:
http://mgcpharma.com.au/wp-content/uploads/2016/03/mgc_whitepaper_final-sml.pdf
Highlights of the White Paper:
- Australia would need to
produce 8,000 kg of medicinal cannabis per year to service the
existing market.
- Australian market currently estimated to be worth AUD
$100 million –AUD $150 million per annum, and is likely to grow
significantly in the next decade.
- Medical Cannabis has the potential to help tens of thousands of
patients suffering from a wide range of medical conditions such as
Multiple Sclerosis, Epilepsy, Cancer, and Severe and Chronic
Pain.
- Up to 51,000 square metres of greenhouse space - almost three
times the size of the Sydney Cricket Ground - would be needed to
produce the amount of cannabis required to meet demand.
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 proposed investment in
Little Green Pharma, and LGC's 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, including its proposed
investment in Little Green Pharma, 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.
Information Relating to Little Green Pharma
All information contained in this news release relating to
Little Green Pharma has been provided to LGC by Little Green
Pharma. 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.
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