LGC Capital Ltd. Receives TSX Venture Exchange Approval for US $2.34 Million Convertible Loan Agreement

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

Company Contacts: Canada contact: John McMullen, Chief Executive Officer, Tel.: [phone], Email: [email protected]; Anthony Samaha, Chief Financial Officer (London), Tel.: [phone], Email: [email protected]; Investor Relations Contact: Dave Burwell, The Howard Group Inc., Tel.: [phone], Toll Free: 1-888-221-0915, Email: [email protected]