Golden Leaf Holdings (GLH-Cse) Nov 3rd 2016 has closed the third tranche of its previously announced non-brokered private placement of convertible senior secured debentures of the company, at a price per debenture of $1,000. An aggregate of C$3,975,000 principal amount of Debentures were issued with effect as of November 2, 2016 in the third tranche of the Offering. The company raised gross proceeds of C$12,000,000 under the Offering.
The Debentures mature on the date that is 18 months from issuance (the "Maturity Date") and bear interest accruing at a rate of 10.0% per annum from issuance (the "Closing Date"), payable semi-annually on the last day of June and December of each year. The first interest payment will be made on December 31, 2016 and will consist of interest accrued from and including the Closing Date to December 31, 2016. Subject to certain conditions, the company may elect, from time to time, subject to applicable regulatory approval, to satisfy its obligation to pay interest on the Debentures, on the date it is payable: (i) in cash; or (ii) by issuing the equivalent value in common shares of the company ("Common Shares") at a price per Common Share equal to the 20 trading day volume weighted average price of the Common Shares on the Canadian Securities Exchange (the "CSE") (or such other Canadian stock exchange on which the Common Shares may trade) ending five trading days preceding the interest due date.
The Debentures are convertible at the holder's option into Common Shares at any time prior to the close of business on the Maturity Date at a conversion price equal to C$0.30 per Common Share. Holders converting their Debentures will receive accrued and unpaid interest thereon, up to, but excluding, the date of conversion. The subscribers in the Offering have been granted certain rights with respect to anti-dilution and future equity issuances. If the daily volume weighted average price of Common Shares is C$1.00 or greater for 10 consecutive trading days, the company may require that the holders of Debentures convert into Common Shares.
The Debentures are secured by a general security agreement over all of the assets of the company, and carry the benefit of a guarantee of the subsidiaries of the company (the "Subsidiaries") of all indebtedness and liability of the company to the holders under the Debentures. The company also pledged all of the outstanding securities of the Subsidiaries under various pledge agreements.
The company intends to use the net proceeds of the Offering for working capital purposes.
The Debentures were offered by way of private placement to accredited investors in all provinces of Canada and in the United States to "Accredited Investors" within the meaning of Regulation D in transactions that are exempt from registration pursuant to Rule 506 of Regulation D under the United States Securities Act of 1933, and such other jurisdictions as may be agreed upon by the company.
In connection with the Offering, the company retained AlphaNorth Asset Management as its financial advisor. AlphaNorth is being paid a cash payment in an amount equal to 8.0% of the gross proceeds of the Offering and such number of compensation options ("Compensation Options") equal to 8.0% of the aggregate number of Debentures issued and sold pursuant to the Offering divided by C$0.30. Each Compensation Option is exercisable for one unit of the company (a "Unit") at an exercise price of C$0.30 for a period of 24 months following the Closing Date. Each Unit consists of one Common Share and one-half of one Common Share purchase warrant (each whole Common Share purchase warrant, a "Compensation Warrant"). Each Compensation Warrant entitles the holder thereof to acquire one Common Share at an exercise price of C$0.30 for a period of 24 months following the Closing Date.
The Debentures and underlying Common Shares are subject to a statutory hold period in Canada of four months from the Closing Date pursuant to Canadian securities laws. The securities mentioned herein have not been and are not qualified by prospectus for sale to the public under applicable Canadian securities laws are subject to transfer and selling restrictions in certain jurisdictions, including the United States and Canada.
About Golden Leaf Holdings
Golden Leaf Holdings Ltd. is one of the largest cannabis oil and solution providers in North America. It's a leading cannabis products company in Oregon built around recognized brands. GLH leverages a strong management team with cannabis and food industry experience to complement its expertise in extracting, refining and selling cannabis oil.
For further information, please contact:
Canadian Investor Relations:
Paul Searle
Investor Relations, Golden Leaf Holdings Ltd.
T: 778.240.7724
E: psearle@goldenleafholdings.com
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