LOGiQ Asset Management Inc. Announces 2017 Year End Results

TORONTO, ONTARIO -- (Marketwired) -- 01/02/18 -- LOGiQ Asset Management Inc. ("LOGiQ" or the "Company") (TSX: LGQ) announces it has released its Audited Consolidated Financial Statements for the year ended September 30, 2017 and related Management's Discussion and Analysis.

"2017 has been a transformative year for the Company," said President and Chief Executive Officer, Joe Canavan. "As we prepared for the transition of the Company out of the retail funds business, we have made progress in re-aligning our balance sheet and reducing our debt levels."

Significant highlights of the Company during the year ended September 30, 2017 include:

--  The approval on November 22, 2016 of the holders of the Company's 6.50%
    extendible convertible unsecured debentures of certain amendments,
    including, amongst other things, a reduction in the conversion price, an
    increase in the interest rate on the debentures to 7.00%, an extension
    of the maturity date to June 30, 2021, and increasing the number of
    common shares in the Capital of the Company that each debentureholder
    would receive for each $1,000 principal amount of debentures held by
    such debentureholder on closing of the transaction (the "FSC
    Transaction") of the Company to combine with LOGiQ Capital 2016
    (formerly Front Street Capital 2004)("LGQ2016") and Tuscarora Capital
    Inc. ("TCI"), as more particularly described in the joint management
    information circular of the Company dated October 14, 2016, as
    supplemented by supplement to the joint management information circular
    dated November 9, 2016.
--  The closing of the FSC Transaction on December 8, 2016 and the
    subsequent integration of LOGiQ, LGQ2016, TCI and LOGiQ Asset Management
    Ltd. (formerly Aston Hill Asset Management Inc.) ("LAML").
--  The appointment of Joe Canavan as President and Chief Executive Officer
    of the Company.
--  The Company's completion of a non-brokered private placement for gross
    proceeds of $5.2 million on December 20, 2016.
--  The acquisition (the "Global Partners Acquisition") by LAML of certain
    agreements from Integra Capital Limited ("ICL") to form the foundation
    for the Company's Global Partners Group (the "Global Partners business")
    on December 22, 2016, and the Global Partners business being
    successfully rebranded, and assets for which LAML shares in sales-
    related fee earning arrangements for such business growing $410 million
    in the year to total approximately $2.9 billion as at September 30,
    2017.
--  The Company's entering into of a 24-month secured working capital term
    loan facility (the "RCM Credit Facility") for an amount of up to $6
    million and bearing interest on drawn amounts between 16% and 19% per
    annum with R.C. Morris & Company Special Opportunities Fund III LP.
--  A Special Committee of independent members of the Board of Directors
    being formed to review strategic options for LOGiQ.
--  The announcement on September 11, 2017, of the Company entering into a
    purchase and sale agreement with Purpose Investments Inc. ("Purpose")
    providing for the acquisition by Purpose of substantially all of the
    retail asset management agreements owned by LOGIQ and its affiliates
    (the "Purpose Transaction").


Selected annual financial information
(in thousands of Canadian dollars, except per share numbers)
----------------------------------------------------------------------------

                                                   -------------------------
                                                          2017         2016
----------------------------------------------------------------------------

Total (from continuing and discontinued
 operations)
----------------------------------------------------------------------------
Revenue                                            $    28,287  $    14,892
Net loss for the year                                  (19,568)         (75)
EBITDA                                                 (16,987)         (75)
Adjusted EBITDA                                         (1,386)         (75)
Net loss per share, basic & diluted                     (0.069)      (0.001)

From continuing operations
----------------------------------------------------------------------------
Revenue                                            $     4,272  $         -
Net loss for the year                                  (11,027)           -
EBITDA                                                  (8,323)           -
Adjusted EBITDA                                         (4,030)           -
Net loss per share, basic & diluted                     (0.039)           -

From discontinued operations
----------------------------------------------------------------------------
Revenue                                            $    24,015  $    14,892
Net loss for the year                                   (8,541)         (75)
EBITDA                                                  (8,664)         (75)
Adjusted EBITDA                                          2,644          (75)
Net loss per share, basic & diluted                     (0.030)      (0.001)

Weighted average number of common shares
 outstanding:
(thousands)
Basic and diluted                                      284,447      107,563
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Financial Position, at September 30                       2017         2016
----------------------------------------------------------------------------
Assets
  from continuing operations                            53,143        7,001
  from discontinued operations                          29,448          746
----------------------------------------------------------------------------
Total assets                                       $    82,591  $     7,747
----------------------------------------------------------------------------
Liabilities
  from continuing operations                            69,061        4,566
  from discontinued operations                               -          296
----------------------------------------------------------------------------
Total liabilities                                  $    69,061  $     4,862
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Notes:

1.  The September 30, 2016 results are for former LGQ2016 only.

2.  EBITDA is comprised of net loss to controlling interest before finance
    expense, income tax recovery, amortization of intangible assets - finite
    life, amortization of deferred sales commissions and depreciation of
    property and equipment. Adjusted EBITDA is comprised of EBITDA before
    share based compensation, impairment losses, and net (gains) losses on
    financial assets and liabilities at fair value through profit or loss.
    See "Use of Non-IFRS measures" below.

3.  As a result of the agreement to sell the retail asset management
    business during the fourth quarter of the fiscal year ended September
    30, 2017, the financial results of the retail asset management business
    have been reported as discontinued operations and comparative results
    have been reclassified.



Assets under Management, Advisory, and Other

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(in millions of          September  June 30,  March 31,  December  September
 Canadian dollars)        30, 2017      2017       2017  31, 2016   30, 2016
----------------------------------------------------------------------------


Assets Under
 Management, Advisory,
 Brokerage and Other
Managed funds
Open end funds          $      722 $     773 $      872 $   1,135 $      566
Closed end funds               557       662        703       688          -
Hedge funds                    183       184        196       197        224
----------------------------------------------------------------------------
Total LOGiQ managed
 funds                  $    1,462 $   1,619 $    1,771 $   2,020 $      790
Sub-advised funds
Open end funds                 163       166        169       175         87
Closed end funds                 8        10         15        14          -
----------------------------------------------------------------------------
Total sub-advised funds $      171 $     176 $      184 $     189 $       87
Other assets                   245       313        331       321          -
----------------------------------------------------------------------------
Total Assets under
 Management, Advisory,
 Brokerage and Other    $    1,878 $   2,108 $    2,286 $   2,530 $      877
----------------------------------------------------------------------------
Assets for which
 institutional sales-
 related fee earning
 contracts apply        $    2,910 $   2,901 $    2,550 $   2,465 $        -
----------------------------------------------------------------------------
Total Fee earning
 assets                 $    4,788 $   5,009 $    4,836 $   4,995 $      877
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----------------------------------------------------------------------------

LOGiQ's Assets Under Management, Advisory and Administration ("AUM") increased $1 billion year-over-year from $877 million to $1.9 billion at September 30, 2017. The higher AUM is mainly the result of the combination of LOGiQ, LAML, LGQ2016 and Global Partners business during the first quarter. During the year, subscriptions, redemptions and performance of mutual funds resulted in a net decrease in LOGiQ managed funds AUM of $79 million, offset by AUM acquired through business combinations and sale of $1.2 billion. At September 30, 2017, LOGiQ also had $2.9 billion of institutional advisory sales-related fee earning arrangements in respect of assets that are neither managed nor advised that are incremental to the AUM.

For the year ended September 30, 2017, LOGiQ revenues increased to $28.3 million from the prior year's revenues of $14.9 million. The revenue increase was due to the business combinations which occurred during the first quarter.

Net loss for the year was $19.6 million, made up of a net loss from continuing operations of $11 million and a net loss from discontinued operations of $8.6 million, as compared to a net loss in 2016 of $ 0.08 million. This is primarily the result of the business combinations, restructuring charges of $3,765 and the impairment charges against the intangible assets and goodwill in the amount of $16.6 million. Management determined that continued decline of AUM and the potential proceeds of the Purpose Transaction were an indicator of impairment and performed appropriate testing to determine recoverable value.

Updates Subsequent to September 30, 2017 Year End

--  On December 15, 2017, the Company closed the Purpose Transaction,
    whereby the Company sold substantially all of its retail asset
    management agreements to Purpose for cash proceeds of approximately $32
    million.
--  Concurrent with the closing of the Purpose Transaction, the outstanding
    balance and interest under the RCM Credit Facility which was drawn in
    November, 2017 and was subsequently repaid in full, following which the
    RCM Credit Facility was terminated.
--  As a result of the approval of the Purpose Transaction at a special
    meeting of the debenture holders on December 8, 2017, and the subsequent
    closing of the Transaction, certain amendments to the indenture
    governing the Company's 7.000% senior unsecured convertible debentures
    due June 30, 2021 became effective December 15, 2017, as more
    particularly described in the Company's press release dated
    December 15, 2017.
--  The Company commenced a strategic review of its remaining businesses and
    commenced to actively seek a merger partner, which may include a
    concurrent or subsequent sale of some or all of its remaining assets.
--  The Company has also significantly reduced operating expenses for the
    continuing operations, including moving to lower cost and smaller space,
    reducing headcount and exiting contracts where appropriate.
--  On December 28, 2017, Ben Cheng, formerly the Chief Investment Officer
    for the Company who has been on a leave of absence since September 9,
    2016, advised the Board of Directors and management that he is leaving
    the Company to pursue other opportunities, effective immediately.
--  On December 29, 2017, the Company used a portion of the cash proceeds
    received from the Purpose Transaction to repay the approximately $6.1
    million of indebtedness outstanding owed to ICL representing the balance
    of the purchase price for the Global Partners Acquisition.

About LOGiQ:

LOGiQ (logiqasset.com) is a diversified asset management company focused on the integration of business acquisitions, achievement of synergies, pursuit of merger, acquisition, partnership and divestiture opportunities, growing its suite of product offerings and enhanced delivery with its goal to achieve the benefits of greater scale for its stakeholders. Excluding the retail assets under management that were the subject of the Purpose Transaction, LOGiQ had assets under management or advisement and institutional advisory sales-related fee earning arrangements that are not managed or advised, totaling over $3.1 billion as at September 30, 2017.

The TSX has neither approved nor disapproved the information contained herein.

Notice to Reader: Use of Non IFRS Measures and Forward-Looking Statements:

1.  Adjusted EBITDA and EBITDA: Adjusted EBITDA and EBITDA as defined above,
    are not standardized earnings measures prescribed by IFRS and therefore
    may not be comparable to similar measures presented by other companies.
    Such measures should not be considered in isolation or as a substitute
    for measures of performance prepared in accordance with IFRS, such as
    Net income (loss) to controlling interest; however, management believes
    that most of its shareholders, creditors, other stakeholders and
    investment analysts find these measures useful performance benchmarks in
    analyzing LOGiQ's results, as an important indicator to of the Company's
    ability to generate operating cash flows and are important measures to
    increase comparability of performance between periods.

2.  Forward-Looking Statements: This news release contains certain "forward-
    looking statements" within the meaning of such statements under
    applicable securities law. Forward-looking statements are frequently
    characterized by words such as "plan", "continue", "expect", "project",
    "intend", "can", "believe", "anticipate",
    "estimate", "may", "will", "potential", "proposed" and other similar
    words, or statements that certain events or conditions "may" or "will"
    occur. These statements are only predictions. Various assumptions were
    used in drawing the conclusions or making the projections contained in
    the forward-looking statements throughout this news release. Forward-
    looking statements are based on the opinions and estimates of management
    at the date the statements are made, and are subject to a variety of
    risks and uncertainties and other factors that could cause actual events
    or results to differ materially from those projected in the forward-
    looking statements. The Company undertakes no obligation to update
    forward-looking statements if circumstances or management's estimates or
    opinions should change, unless required by law. The reader is cautioned
    not to place undue reliance on forward-looking statements.

For a detailed description of the risks and uncertainties facing the Company and its business and affairs, readers should refer to the annual financial statements and management discussion and analysis for the year ended September 30, 2017 of the Company, both of which are available on SEDAR under the Company's profile at www.sedar.com.

Contacts:
LOGiQ Asset Management Inc.
Joe Canavan
President & Chief Executive Officer
(416) 583-2300

LOGiQ Asset Management Inc.
Mary Anne Palangio
Chief Financial Officer
(416) 583-2300

Source: LOGiQ Asset Management Inc.

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