Golden Leaf Holdings Closes C$35mm Private Placement Equity Offering

Golden Leaf Announces Closing of C$35 Million Subscription Receipt Financing

TORONTO, ON–(Marketwired – June 02, 2017) – Golden Leaf Holdings Ltd. (“GLH” or the “Company”) (CSE: GLH) (CSE: GLH.CN) (CNSX: GLH) (OTCQB: GLDFF), a leading cannabis oil solutions company built around recognized brands, is pleased to announce the closing of its previously announced best efforts private placement offering (the “Offering”) of subscription receipts (the “Subscription Receipts”). Pursuant to the Offering, the Company has sold 125,892,857 Subscription Receipts, at a price of C$0.28 per Subscription Receipt (the “Issue Price”), for aggregate gross proceeds of C$35,249,999.96 million.

Canaccord Genuity Corp. acted as the lead agent for a syndicate of agents (the “Agents”) including Echelon Wealth Partners Inc. and Mackie Research Capital Corporation. AC Group Financial Inc. acted as an advisor to the Company in connection with the Offering and the four previously announced acquisitions being undertaken by the Company.

The Subscription Receipts were issued pursuant to a subscription receipt agreement (the “Subscription Receipt Agreement”) among the Company, Canaccord Genuity Corp. and TSX Trust Company, as subscription receipt agent. Pursuant to the Subscription Receipt Agreement, the gross proceeds from the Offering (less 50% of the Agents’ cash commission and all of the Agents’ estimated expenses) (the “Escrowed Funds”) have been placed in escrow pending satisfaction of certain escrow release conditions (the “Escrow Release Conditions”), which include (i) signing of the definitive agreement (the “Definitive Agreement”) regarding the acquisition of Chalice LLC (the “Acquisition”); (ii) all conditions precedent to the completion of the Acquisition shall have been satisfied; (iii) the Common Shares issuable pursuant to the Offering being listed on the Canadian Securities Exchange; (iv) the receipt of all necessary regulatory, shareholder and third-party approvals, if any, in connection with the Acquisition; and (iv) the Company shall not be in breach or default of any of its covenants or obligations under the Subscription Receipt Agreement or the agency agreement entered into with the Agents in connection with the Offering (the “Agency Agreement”). Upon satisfaction of the Escrow Release Conditions, the Escrowed Funds, together with any interest earned thereon, will be released to the Company and each Subscription Receipt shall be automatically exchanged, without any further consideration or action by the holder thereof, for one common share in the capital of the Company (each, a “Common Share”) and one-half of one common share purchase warrant (each whole common share purchase warrant, a “Warrant”). Each Warrant will be exercisable to acquire one common share of the Company (each, a “Warrant Share”) at a price of $0.37 per Warrant Share, until June 2, 2019, subject to adjustment in certain events.

The net proceeds from the Offering are anticipated to be used to satisfy the cash component of the purchase price for the Acquisition, as well as to fund the Company’s other recently announced acquisitions and for existing operations. If the Escrow Release Conditions have not been satisfied by September 30, 2017 (the “Escrow Deadline”), the Subscription Receipts will be deemed to be cancelled and holders of Subscription Receipts will receive a cash amount equal to the offering price of the Subscription Receipts. Any shortfall will be funded by the Company.

As consideration for the services provided by the Agents in connection with the Offering, the Agents received a cash commission of C$2,467,500, 50% of which was paid on closing of the Offering and the other 50% of which will be payable upon satisfaction of the Escrow Release Conditions. As additional consideration, the Agents were granted 8,812,500 compensation warrants (the “Compensation Warrants”). Each Compensation Warrant entitles the holder thereof to acquire one Common Share and one-half of one Warrant at the Issue Price until June 2, 2019. In the event that the Escrow Release Conditions are not satisfied or waived by the Escrow Deadline, (i) the balance of the unpaid commission will not be paid, and (ii) the Compensation Warrants shall automatically terminate.

All securities issued pursuant to the Offering are subject to a statutory hold period of four months and one day, expiring on October 3, 2017.

Pursuant to the terms of the Agency Agreement, the Company is also proposing to issue and sell, on a brokered, private placement basis, in one or more closings (the “Unit Offering”), up to C$5,000,000 of units of the Company (the “Units”), each Unit to be comprised of one Common Share and one-half of one Warrant. The first closing under the Unit Offering is expected to occur in the next few weeks. The net proceeds of the Unit Offering will also be used to fund the Company’s other recently announced acquisitions and for existing operations. The Unit Offering is subject to certain conditions including, but not limited to, the receipt of all necessary regulatory and stock exchange approvals.

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.

Original press release: http://www.marketwired.com/press-release/golden-leaf-announces-closing-of-c35-million-subscription-receipt-financing-2219948.htm

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