Golden Leaf Holdings Ltd. Announces Closing of Second Tranche of Non-Brokered Private Placement of Convertible Debentures

TORONTO, ONTARIO--(Marketwired - Oct. 26, 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)(CSE:GLH.CN)(CNSX:GLH) is pleased to announce the closing of the second tranche of its previously announced non-brokered private placement (the "Offering") of convertible senior secured debentures of the Company (the "Debentures"), at a price per Debenture of C$1,000 (the "Offering Price"), for gross proceeds of up to C$12,000,000 (the "Offering"). An aggregate of C$982,000 principal amount of Debentures were issued in the second tranche of 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.