Supreme Pharmaceuticals greenshoe upsizes convertibles C$40.25 million

By Tali Rackner

Minneapolis, Nov. 14 – Supreme Pharmaceuticals Inc. said the underwriters for its 8% senior unsecured convertible debentures exercised their over-allotment in full, increasing the offering to C$40.25 million, according to a press release published Tuesday.

The company priced C$30 million of the debentures on Oct. 17.

Canaccord Genuity Corp. was the lead underwriter.

The units consist of C$1,000 principal amount of 8% two-year senior convertible debentures and 313 common share purchase warrant.

As previously reported, the sale includes a condition that participating 2016 holders of 10% senior convertible debentures convert all of their debentures by the offering closing dates.

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 Oct. 16.

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.

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