By Susanna Moon
Chicago, Oct. 17 – Supreme Pharmaceuticals Inc. priced C$30 million of convertible debenture units in a bought deal private placement with Canaccord Genuity Corp. as lead underwriter.
The units consist of C$1,000 principal amount of 8% two-year senior convertible debentures and 313 common share purchase warrant.
The underwriters have an option to acquire up to 4,500 more convertible debenture units at the same terms.
The sale includes a condition that participating 2016 holders of 10% senior convertible debentures convert all of their debentures by the offering closing dates, according to a company announcement.
The debentures are convertible at a conversion price of C$1.60 per common share, which is a 9.59% premium to the company’s closing price on Monday.
After four months and one day, the company may force the conversion of the debentures with 30 days written notice if the daily volume weighted average trading price of the shares is more than C$2.10 for any 10 consecutive trading days.
The warrants are exercisable at a price of C$1.80 per warrant share for three years. But at any time after four months and one day, the company may accelerate the expiry date of the warrants to 30 days if the daily volume weighted average trading price of the company's common shares equals or exceeds C$2.90 for any 10 consecutive trading days. Any unexercised warrants will automatically expire.
Supreme Pharmaceuticals is a Toronto-based medical marijuana supplier.
Issuer: | Supreme Pharmaceuticals Inc.
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Securities: | Convertible debenture units
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Amount: | C$30 million
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Greenshoe: | C$4.5 million, or 4,500 units
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Maturity: | Two years
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Lead underwriter: | Canaccord Genuity Corp.
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Coupon: | 8%
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Price: | Par of C$1,000
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Yield: | 8%
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Conversion premium: | 9.59%
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Conversion price: | C$1.60 per share
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Call option: | If the daily VWAP of the shares is more than C$2.10 for any 10 consecutive trading days
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Warrants: | 313
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Warrant expiration: | Three years
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Warrant strike price: | C$1.80 per share
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Pricing date: | Oct. 17
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Stock symbol: | Canada: FIRE
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Stock price: | C$1.46 as of close on Oct. 16
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