TORONTO, ONTARIO--(Marketwired - Sept. 30, 2016) -
NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
Golden Leaf Holdings Ltd. ("GLH" or the "Company") (CSE:GLH) is pleased to announce that it is offering for
sale convertible senior secured debentures of the Company (the "Debentures"), on a non-brokered private placement basis, subject
to all required regulatory approvals, at a price per Debenture of C$1,000 (the "Offering Price"), for minimum gross proceeds of
up to C$8,000,000 and maximum gross proceeds of C$10,000,000 (the "Offering").
The Debentures will mature on the date that is 18 months from closing of the Offering (the "Maturity Date") and will bear
interest accruing at a rate of 10.0% per annum from the closing of the Offering (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 June 30, 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 will be 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 will be granted
certain rights with respect to anti-dilution and future equity issuances. If the Common Shares close at C$1.00 for 10 consecutive
trading days, the Company may require that the holders of Debentures convert into Common Shares. The Company has also agreed to
reduce the conversion price of C$9,702,000 principal amount of its convertible debentures issued since March 11, 2016 to C$0.30
per share.
The Debentures will be secured by a charge on all of the assets of the Company.
The Company intends to use the net proceeds of the Offering for working capital purposes.
The Debentures will be 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.
Closing of the Offering is scheduled to be on or about October 6, 2016 and is subject to certain conditions including, but not
limited to, the receipt of all necessary approvals, including the approval of the Canadian Securities Exchange and the applicable
securities regulatory authorities.
As a result of any subsequent offering at a lower price than the Company's previous convertible debenture offering, the
Company would have been required to pay or issue up to C$2.0 million of additional convertible debentures as part of an
anti-dilution provision in certain debentures. To settle this debt, certain convertible debenture holders have agreed to
collectively accept up to three million additional Common Shares in lieu of the C$2.0 million debenture payment.
The Company has retained AlphaNorth Asset Management as its financial advisor. AlphaNorth will receive 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 shall be 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 shall consist 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 shall entitle 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 will be 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 will not be qualified by
prospectus for sale to the public under applicable Canadian securities laws and will be subject to transfer and selling
restrictions in certain jurisdictions, including the United States and Canada.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of
the securities in any State in which such offer, solicitation or sale would be unlawful. The securities being offered have not
been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or
sold in the United States absent registration or an applicable exemption from the registration requirements of the United States
Securities Act of 1933, as amended, and applicable state securities laws.
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.
Disclaimer: This press release contains "forward-looking information" within the meaning of applicable Canadian securities
legislation. Forward-looking information includes, but is not limited to, statements with respect to the Company's future
business operations and reflects current expectations or beliefs regarding such matters including, but not limited to,
information or statements with respect to the completion of the Offering, the receipt of requisite regulatory approvals,
including the approval of the CSE and the use of proceeds. Generally, forward looking information can be identified by the use of
forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates",
"forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state
that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved".
Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual
results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied
by such forward-looking information, including but not limited to general business, economic and competitive uncertainties,
regulatory risks, market risks, risks inherent in manufacturing operations, risks relating to the receipt of additional
extraction machines, and other risks of the cannabis industry. Although the Company has attempted to identify important factors
that could cause actual results to differ materially from those contained in forward-looking information, there may be other
factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will
prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on forward-looking information. Forward-looking information is provided
herein for the purpose of presenting information about management's current expectations relating to the future and readers are
cautioned that such information may not be appropriate for other purpose. The Company does not undertake to update any
forward-looking information, except in accordance with applicable securities laws.