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Supreme Pharma (CSE: SL) (OTC: SPRWF) announced after the close that it will be issuing convertible notes and warrants in a “bought deal” underwritten by Canaccord Genuity. The $40mm convertible note offering has a 12/31/19 maturity, pays interest of 10% and is convertible into shares at $1.30 per share (a total of 30.77mm shares). The company can force conversion in the event shares trade above $1.75 for 15 consecutive trading days. Buyers of the notes will receive 770 warrants at $1.70 for each $1000 invested (a total of 30.8mm shares).
The company, which through its wholly-owned subsidiary 7 Acres (formerly AMMCann) is approved to cultivate cannabis by Health Canada and is expected to become licensed soon for sale, is pursuing a wholesale model exclusively. The capital raise supports the company’s buildout of 7 Acres. Supreme’s stock posted an all-time high in early October and has consolidated subsequently. Trading was halted just in advance of the close today with the financing news pending.
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