True Leaf Secures $4.5 Million Investment



True Leaf Medicine International Ltd. executed a funding agreement for the issue of a convertible security for gross proceeds of $4,500,000 with an entity managed by The Lind Partners, a New York-based institutional fund manager.


“This capital investment from The Lind Partners demonstrates that True Leaf is a recognized leader in today’s cannabis-for-pets sector and is testament to our strong and accelerating growth platform,” said Darcy Bomford, founder and chief executive officer of True Leaf. “This investment will allow us to continue executing on our business plan, including expanding our unique pet product lines and scaling of our global distribution.”


“We were impressed by the depth of True Leaf’s leadership team and their innovation in the cannabis-for-pets sector,” said Phillip Valliere, managing director at The Lind Partners. “True Leaf’s safe and effective hemp-based products for pets sets them apart from their competitors. We are excited to watch True Leaf grow.” 


The Investment is in the form of a convertible security with a maturity date of 24 months and a fixed conversion price per share of $0.40, being the last closing price of the company’s common shares on the Canadian Securities Exchange prior to execution of the funding agreement. The $5,400,000 face value of the convertible security is comprised of a principal amount of $4,500,000 and a pre-paid interest amount of $900,000. The company is required to repay the principal amount in 18 equal monthly payments commencing six months after closing, except that the repayment amount will be reduced in any month by any amount converted by the investor into the company’s common shares. 


Pre-paid interest will accrue monthly with the investor having the right to convert accrued interest quarterly into the company’s common shares at a conversion price equal to the last closing market price of the shares on the exchange at that time.


The investor will also receive 5,625,000 warrants of the company, with each warrant entitling the investor to purchase one common share at an exercise price of $0.5089. The warrants expire 36 months from their date of issue, provided that if the volume weighted average price (VWAP) of the company’s common shares is at least $1.0178 for 30 consecutive trading days, then the expiry date of 2,812,500 warrants may be accelerated by the company. If the VWAP of the company’s common shares is at least $1.5267 for 30 consecutive trading days, then the expiry date of all of the remaining warrants may be accelerated by the company.


The company has the right to buy-back the convertible security and the pre-paid interest at any time with no penalty. Should True Leaf exercise its Buy-Back Right, the investor will have the option of converting 25 percent of the outstanding funded amount and 100 percent of the pre-paid interest into the company’s common shares. 


The convertible security is secured by a general security agreement from the company and certain of its subsidiaries and a mortgage of the company’s Lumby property. 


Under the funding agreement, the company and the investor may agree for the investor to advance up to an additional $6,000,000 in gross proceeds to the company in exchange for a second convertible security on the same terms as the Investment.


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