Else Nutrition Holdings Inc. (CSE: BABY) has announced a convertible security funding agreement with Lind Global Fund III LP for gross proceeds of US$575,000, disclosed on October 13, 2026. The deal comprises two tranches and is structured to address working capital needs and trade debt repayment. The company disclosed it is experiencing serious financial difficulty, a condition that allowed it to proceed without a shareholder vote under a CSE policy exemption.

Key Points

  • Else Nutrition Holdings Inc. (CSE: BABY, OTCPK: BABYF, FSE: 0YL) announced the convertible security funding agreement on October 13, 2026
  • Gross proceeds total US$575,000 across two convertible securities issued to Lind Global Fund III LP
  • Initial tranche provides US$275,000 funded amount; a second tranche of US$300,000 is expected to close on or around December 31, 2026
  • Investors may be watching how dilution risk from share-based repayments and warrant issuances evolves over the 24-month term

Structure of the Else Nutrition–Lind Convertible Security Agreement

Under the agreement dated October 12, 2026, Else Nutrition will issue an initial convertible security with a face value of US$343,750, representing a funded amount of US$275,000 plus an implied interest rate of 12.5% per annum, yielding US$251,250 after closing fees. The security carries a 24-month maturity and a four-month lock-up period. Monthly repayments of US$17,187.50 commence 121 days after closing and continue over 20 payments, with each repayment satisfiable in cash at a 5% premium or in shares at a 25% discount to the prevailing closing price.

Second Tranche and Warrant Terms Tied to Both Convertible Securities

A second convertible security with a face value of US$375,000 is expected to be funded at US$300,000 (US$285,000 after fees) on or around December 31, 2026, on substantially the same terms as the initial security, including monthly repayments of US$18,750. Both securities will include detached warrants calculated by dividing the funded amount in Canadian dollars by the closing share price on the trading day prior to each respective closing date. The warrants will carry an exercise price equal to that same closing price and will expire 48 months from issuance.

Financial Difficulty Disclosure and Use of Proceeds

The company disclosed that it is experiencing serious financial difficulty, satisfying the conditions of a CSE Policy 4 exemption that allowed the transaction to proceed without a shareholder vote. The audit committee, comprised solely of independent directors, determined the offering is in the best interests of the company. Proceeds are intended for general working capital and repayment of certain trade debt. The company's obligations under the agreement will be secured by a general security interest over its assets and guarantees from certain subsidiaries, subject to CSE approval.

Dilution Considerations for Else Nutrition Shareholders

The agreement's share-based repayment mechanism and warrant issuances present potential dilution for existing shareholders of Else Nutrition. Lind retains the right to convert outstanding face value at any time during the term at the closing price on the day prior to the initial closing. Should the company exercise its buy-back right with a 5% cash premium, Lind may still convert up to 33.3% of the initial face value into common shares. The immediate share price impact was not clear from available public information.