Tradewind Provides Update on Reverse Take-Over by Leonovus and C$5 Million Brokered Financing

Executive Summary

• Wellfield Technologies Inc. and Leonovus Inc. have amended their agreement for a Reverse Take-Over (RTO) transaction, under which Leonovus will acquire all issued and outstanding common shares of Tradewind Markets Inc. (a wholly-owned subsidiary of Wellfield) in exchange for approximately 151,562,500 pre-consolidated Leonovus shares (approx. 24,250,000 post-consolidation).
• Leonovus will change its name to "Tradewind Precious Metals Exchange Inc." and is conducting a concurrent private placement offering (the "Offering") with minimum aggregate gross proceeds of C$5,000,000 to fund the purchase of physical gold and working capital.
• The transaction involves the issuance of Debt Equity Subscription Receipts (C$2,000 each) and Equity Subscription Receipts (C$0.20 each), with proceeds held in escrow until specific conditions, including TSXV approval and completion of the RTO, are met.

Key Details

• Transaction Structure: Leonovus acquires Tradewind Markets Inc. via an RTO. Wellfield receives approx. 151,562,500 pre-consolidated Leonovus shares (Consideration Shares), subject to reduction for Tradewind net debt.
• Name Change: Leonovus will rename to "Tradewind Precious Metals Exchange Inc."
• Earnout Provision: Wellfield is entitled to a C$2,000,000 earnout if specific product/business milestones are met within two years of closing. This will be paid via 10,000,000 Resulting Issuer Shares at a deemed price of C$0.20 per share.
• Support Agreement: Wellfield provides an intellectual property support agreement valued at approx. C$1,000,000 and a 5-year non-competition agreement.
• Financing (Offering):
  • Minimum Gross Proceeds: C$5,000,000.
  • Instrument 1 (Debt Equity Subscription Receipts): Price C$2,000 each. Each receipt converts to one Debt Equity Unit consisting of:
    • One secured 14% convertible debenture (C$1,000 principal).
    • 5,000 FinanceCo common shares.
    • 9,000 common share purchase warrants.
  • Instrument 2 (Equity Subscription Receipts): Price C$0.20 each. Each receipt converts to one Equity Unit consisting of:
    • One FinanceCo common share.
    • One Warrant.
• Warrant Terms:
  • Exercise Price: C$0.25 per Warrant Share.
  • Term: 60 months from satisfaction/waiver of Escrow Release Conditions.
  • Underlying Security: Resulting Issuer Shares.
• Convertible Debenture Terms:
  • Interest Rate: 14% per annum, payable quarterly.
  • Maturity: 60 months from satisfaction/waiver of Escrow Release Conditions.
  • Conversion Price: C$0.25 per Resulting Issuer Share.
  • Security: First ranking security interest in physical gold held at the Royal Canadian Mint (C$1,000 per Debt Equity Unit).
• Use of Proceeds:
  • Debt Equity Receipts: 50% (C$1,000) for purchase of physical gold at RCM; 50% (C$1,000) for working capital/general corporate purposes.
  • Equity Receipts: Working capital and general corporate purposes.
• Escrow Arrangement: Gross proceeds (less agent expenses and 50% cash commission) held in escrow. Released upon satisfaction of conditions (TSXV approval, RTO completion, share consolidation, etc.) no later than 120 days post-closing. If conditions not met, funds refunded to investors.
• Agent Compensation:
  • Cash Commission: 8.0% of gross proceeds (reduced to 4.0% for "president's list" orders).
  • Broker Warrants: 8.0% of Equity Subscription Receipts sold and 8.0% of Resulting Issuer Shares issuable upon conversion of Convertible Debentures (reduced to 4.0% for president's list). Exercise price C$0.20 per Unit, term 60 months.
• Debt Settlement: Leonovus issues 4,411,090 shares to directors/officers/employees to settle C$882,218 of indebtedness at C$0.20 per share.
• Share Consolidation: 1 new Resulting Issuer Share for every 6.25 existing Resulting Issuer Shares.
• Management Changes:
  • Current Leonovus directors/officers resign.
  • New Board: Michael Gaffney (Chair/CEO), Fraser Buchan, Jason Ewart, Kristina Bates (Audit Chair). Additional director to be named.
  • CFO/Corp Sec: Chris Carmichael.
• Voting Support: Directors/officers of Leonovus holding approx. 7% of shares have entered into voting support agreements with Wellfield.
• Regulatory Approvals: Requires TSXV approval, Leonovus shareholder approval (including Minority Approval for RTO), and conditional approval for listing.
• Timeline: Offering expected early November 2025; Transaction Closing expected second half of November 2025.
• Tradewind Platform Metrics: As of Sept 23, 2025, digitizes 37,655 oz gold and 2,193,439.75 oz silver (value > CAD $334 million).

Notable Quotes

• Michael Gaffney, CEO of Leonovus: "Tradewind is more than a trading platform; it's a solution that integrates blockchain technology with the Royal Canadian Mint's reputation to redefine how gold is owned and traded. By delivering the lowest costs, the best quality gold, and the unique future opportunity, we're setting a new standard for the precious metals market."
• Levy Cohen, CEO of Wellfield: "Spinning out Tradewind into this RTO is a strategic move that underscores our commitment to advancing decentralized finance solutions in traditional markets. By launching this RTO, we are positioning Tradewind to independently accelerate its growth and fully capitalize on the enormous potential of its technology."
• Michael Gaffney, Chair and CEO of Leonovus: "Tradewind's spin-out through this RTO is a significant advance for the gold trading industry... We believe Tradewind is uniquely positioned to bridge the gap between physical assets and seamless finance, enhancing liquidity and accessibility while setting a new standard for integrating gold into modern financial ecosystems."