MONTREAL, Oct. 12, 2017 /CNW Telbec/ - LGC Capital Ltd. (TSXV: LG) ("LGC") is pleased to announce that it has today completed the acquisition of stage one of its strategic interest in licenced Australian Medical Cannabis company Habi Pharma Pty Ltd of Perth, Australia, doing business as "Little Green Pharma", as announced on September 26, 2017 and October 5, 2017. On October 5, 2017, the Company announced that the TSX Venture Exchange had authorized LGC to proceed to the closing of the transaction and this transaction has now been completed.
At the closing, LGC subscribed for 2,161,091 shares of Little Green Pharma, representing an initial 4.99% of its issued and outstanding shares. As consideration for the shares, LGC paid AUD $432,218 and issued 5,660,000 LGC common shares to Little Green Pharma at a deemed issue price of $0.11 per share. LGC, subject to certain Australian regulatory and other approvals, can now move towards increasing its interest in Little Green Pharma up to 19.03%.
About Little Green Pharma:
Little Green Pharma is one of the few companies in Australia to be granted a licence to cultivate and produce Medical Cannabis within Australia.
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. Little Green Pharma's patented technology aims to control the medicinal cannabis particle size encapsulated in the liposomes to optimise the bio-availability so the cannabinoids are readily absorbed into the bloodstream. This enables the resulting preparation to achieve desired therapeutic results with significantly lower cannabinoid doses, when compared to other forms of medicinal cannabis. Little Green Pharma's patented process significantly reduces production costs, enabling Little Green Pharma to be more competitive in the market.
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:
The White paper can be viewed at:
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 to 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.
Further investment stages of the Little Green Pharma acquisition:
As previously announced, the subscription agreement between LGC and Little Green Pharma provides that 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 in Little Green Pharma of 4.99%. In addition, subject to certain Australian regulatory approvals, which are currently in progress, and 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.
Note: On October 11, 2017, the Bank of Canada's daily average exchange rate for the Australian dollar was AUD $1.00 = CAD $0.9728.
About LGC (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.
This press release may contain forward-looking statements with respect to LGC Capital Ltd. ("LGC"), its 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 press 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
For further information: Please contact: Company & Media Contacts, Canada contact: John McMullen, Chief Executive Officer, Tel.: (416) 803-0698, Email: [email protected]; London contact: Anthony Samaha, Chief Financial Officer, Tel.: +44 (0) 20 7440 0640; Investor Relations contact: Dave Burwell, The Howard Group Inc., Tel.: (403) 221-9015, Toll Free: 1-888-221-0915, Email: [email protected]