By Stephanie N. Rotondo
Seattle, Nov. 14 – Supreme Pharmaceuticals Inc. priced a C$40 million bought deal of convertible debenture units, the company said in a press release on Monday.
Canaccord Genuity Corp. led the deal.
The debentures hold one $1,000-par 10% senior unsecured convertible debenture due Dec. 31, 2019 and warrants to purchase up to 770 common shares.
The warrants are exercisable at C$1.70 per share for three years after issuance.
The debentures are convertible into common stock at C$1.30 per share, which is a slight discount over Monday’s closing share price of C$1.31. After four months and one day from issuance, the company can force conversion of the paper if the stock’s daily volume weighted average price is C$1.75 for 15 consecutive trading days.
The convertible debt becomes redeemable after two years at par plus accrued interest. Upon a change of control, holders can require the company to repurchase their holdings at 104% of par plus accrued interest.
In the change-of-control event, the company can redeem the issue at par plus accrued interest, but only if 90% or more of the outstanding principal amount had previously been tendered.
Proceeds will be used for expanding the operating footprint of the company’s Hybrid Greenhouse facility in Kincardine, Ont., for working capital and for general corporate purposes.
Supreme Pharmaceuticals is a Toronto-based medical marijuana supplier.
| Issuer: | Supreme Pharmaceuticals Inc.
|
| Securities: | Convertible debenture units
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| Amount: | C$40 million
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| Bookrunner: | Canaccord Genuity Corp.
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| Price: | Par of $1,000
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| Pricing date: | Nov. 14
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| Settlement date: | Dec. 7
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| Stock symbol: | CSE: SL
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| Stock price: | C$1.31 as of Nov. 14 close
|
|
|
| Convertible debenture
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| Coupon: | 10%
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| Price: | Par of $1,000
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| Yield: | 10%
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| Conversion price: | C$1.30 per share
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| Call options: | At par plus accrued interest after two years or upon a change of control
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| Put options: | Upon a change of control at 104% of par plus accrued interest
|
|
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| Warrants
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| Amount: | 770 warrants per each $1,000 of units
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| Strike price: | C$1.70 per share
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