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

Executive Summary

• Wellfield Technologies and Leonovus have amended their agreement for a Reverse Take-Over (RTO) where Leonovus will acquire Tradewind Markets Inc. (a subsidiary of Wellfield) in exchange for approximately 151,562,500 pre-consolidated Leonovus shares (approx. 24,250,000 post-consolidation), resulting in Leonovus changing its name to "Tradewind Precious Metals Exchange Inc."
• Concurrent with the RTO, Leonovus is conducting a C$5 million brokered private placement financing via a wholly-owned subsidiary, FinanceCo. The offering consists of Debt Equity Subscription Receipts (C$2,000 each) and Equity Subscription Receipts (C$0.20 each), with net proceeds allocated to purchasing physical gold held at the Royal Canadian Mint and for working capital.
• The transaction includes a C$2,000,000 earnout for Wellfield based on product/business milestones, an IP support agreement valued at C$1,000,000, and a 5-year non-compete. The RTO and financing are subject to TSXV approval and shareholder votes, with an expected closing in mid-to-late November 2025.

Key Details

• Transaction Structure: Leonovus acquires all issued and outstanding common shares of Tradewind Markets Inc. from Wellfield.
• Consideration: Approx. 151,562,500 pre-consolidated Leonovus shares (approx. 24,250,000 post-consolidation), subject to reduction for Tradewind net debt.
• Name Change: Leonovus will change its name to "Tradewind Precious Metals Exchange Inc."
• Financing Amount: Minimum aggregate gross proceeds of C$5,000,000.
• Financing Instruments:
  • Debt Equity Subscription Receipts: Priced at C$2,000 each.
  • Equity Subscription Receipts: Priced at C$0.20 each.
• Use of Proceeds:
  • Debt Equity Receipts: 50% (C$1,000) for purchase of physical gold at the Royal Canadian Mint; 50% (C$1,000) for working capital and general corporate purposes.
  • Equity Receipts: Working capital and general corporate purposes.
• Debt Equity Unit Components: Upon satisfaction of Escrow Release Conditions, holders receive one Debt Equity Unit consisting of:
  • One secured 14% convertible debenture (C$1,000 principal face value).
  • 5,000 FinanceCo common shares.
  • 9,000 common share purchase warrants.
• Debt Terms:
  • Interest: 14% per annum, payable quarterly in arrears.
  • Maturity: 60 months following Escrow Release Conditions.
  • Conversion: Convertible into FinanceCo Shares at C$0.25 per share.
  • Security: First ranking security interest in physical gold purchased (C$1,000 per unit, representing 50% of gold value). No senior or pari-passu securities may be issued.
• Equity Unit Components: Upon satisfaction of Escrow Release Conditions, holders receive one Equity Unit consisting of one FinanceCo Share and one Warrant.
• Warrant Terms:
  • Exercise Price: C$0.25 per Warrant Share.
  • Term: 60 months following satisfaction/waiver of Escrow Release Conditions.
  • Underlying Security: Resulting Issuer Shares.
• Agent Commission: 8.0% of gross proceeds (reduced to 4.0% for "president's list" orders).
• Broker Warrants: Agent receives broker warrants equal to 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).
  • Broker Warrant Exercise Price: C$0.20 per Unit.
  • Broker Warrant Term: 60 months.
• Earnout: Wellfield entitled to C$2,000,000 (via 10,000,000 Resulting Issuer Shares at C$0.20/share) if specific product/business milestones are met within 2 years of closing.
• Support Agreement: Wellfield provides IP support valued at C$1,000,000 and a 5-year non-compete agreement.
• Debt Settlement: Leonovus issues 4,411,090 shares to directors/officers/employees to settle C$882,218 of indebtedness at C$0.20/share.
• Escrow Conditions: Proceeds held in escrow until satisfaction of conditions including RTO completion, share consolidation, name change, TSXV approval, and absence of hold periods. Release deadline is 120 days post-closing.
• Share Consolidation: 1 new Resulting Issuer Share for every 6.25 existing Resulting Issuer Shares.
• Voting Support: Directors/officers holding ~1,429,175 shares (7% of Leonovus) have voting support agreements.
• Escrow of Consideration: 24,250,000 Resulting Issuer Shares to Wellfield subject to 36-month escrow release in tranches. Wellfield agrees to limit holdings to max 45% post-distribution.
• Management Changes:
  • Michael Gaffney: Executive Chairman and CEO.
  • Chris Carmichael: CFO and Corporate Secretary.
  • Board: Michael Gaffney, Fraser Buchan, Jason Ewart, Kristina Bates, plus one additional director.
• Timeline:
  • Leonovus Meeting (Shareholder Approval): Mid-November 2025.
  • Financing Closing: Early November 2025.
  • RTO Transaction Closing: Second half of November 2025.

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."