Supreme Cannabis gets approval to amend 6% convertible debentures

By Taylor Fox

New York, Aug. 31 – Supreme Cannabis Co., Inc. announced that holders of its outstanding 6% senior convertible debentures issued in October 2018 have approved an extraordinary resolution to approve amendments to the terms of the convertibles, according to a news release.

Some of the amendments approved are:

• Reduction of the total principal amount of debentures outstanding to C$36.5 million from C$100 million;

• Extension of the maturity date of the debentures to the date that is five years plus one day from the closing date unless repurchased, redeemed or converted prior to maturity, from Oct. 19, 2021 previously;

• Reduction of the conversion price of the debentures to C$0.285 per share from C$2.45 per share;

• The right to force the conversion of the remaining principal amount of the debentures outstanding at the conversion price on not less than 30 days’ notice if the daily volume weighted average trading price of the common shares of Supreme Cannabis is greater than C$0.45 for any 10 consecutive trading days;

• Amortization of the principal amount of the remaining debentures at 1% per month over the 24-month period prior to maturity;

• Reduction of annual interest payments to C$2.9 million from C$6 million; and

• The remaining debentures will accrete at a rate of 11.06% per annum, compounding on a semiannual basis commencing on the closing date of the amendments and ending on the date that is three years from the closing date.

The accreted portion of the principal is payable in cash upon maturity, but does not bear cash interest and is not convertible into common shares.

In consideration of the reduction of the principal amount of the debentures by C$63.5 million, among other consideration, the company will issue a total of 116.6 million common shares to debenture holders.

Supreme Cannabis is a Toronto-based B2B wholesale marijuana company.

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