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LGC Capital Signs Definitive Agreement to Acquire Strategic Interest in Licensed Australian Medical Cannabis Company, Little Green Pharma

TSX Venture Exchange authorizes LGC to proceed to closing of the transaction, scheduled for Tuesday, October 10, 2017.


MONTREAL, Oct. 5, 2017 - LGC Capital Ltd. has announced that it has entered into a definitive Subscription Agreement with licensed Australian Medical Cannabis company Habi Pharma Pty Ltd of Perth, Australia, doing business as "Little Green Pharma," for the acquisition of a strategic interest in Little Green Pharma, as announced on September 26, 2017. LGC is also pleased to announce that the TSX Venture Exchange has authorized LGC to proceed to the closing of the transaction, which is scheduled to take place on Tuesday, October 10, 2017, according to a press release.

Little Green Pharma is one of the few licensed companies in Australia authorized to cultivate and produce Medical Cannabis within Australia.

Little Green Pharma 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 signing of a definitive Subscription Agreement and approval by the TSX Venture Exchange to acquire this strategic initial interest in Little Green Pharma in Australia are truly landmarks for LGC Capital, as we seek to expand the Company's global footprint in the fast-growing legalized medical cannabis industry," John McMullen, LGC's CEO, commented. "We are pleased to be given the opportunity to be a key strategic shareholder of Little Green Pharma as it moves towards commercial production in the highly regulated and blue-chip Australian market. We are also very excited about Little Green Pharma's advanced patented technology."

Fleta Solomon, Little Green Pharma's Managing Director, commented, "There is no doubt that LGC Capital is going to be a strong strategic partner as we expand the company and its opportunities."

The details of LGC's agreement to invest in Little Green Pharma are as follows:

1. At closing, LGC will subscribe for 2,161,091 shares of Little Green Pharma, representing an initial 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 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 4, 2017, the Bank of Canada's daily average exchange rate for the Australian dollar was AUD $1.00 = CAD $0.9802.

Closing of the transaction with Little Green Pharma is subject to standard conditions.

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