Supreme $FIRE Announces $30MM Bought Deal Private Placement of Convertible Debenture Units

SupremePharmaceuticalsLogo(TSX.V:FIRE)

Supreme Pharmaceuticals Inc. announced today that it has entered into an agreement with Canaccord Genuity Corp., as lead underwriter on behalf of a syndicate of underwriters, pursuant to which the Underwriters have agreed to purchase, on a bought deal, private placement basis, $30,000,000 aggregate principal amount of convertible debenture units at a price of $1,000 per Convertible Debenture Unit. Each Convertible Debenture Unit will consist of $1,000 principal amount of 8.0% senior unsecured convertible debentures and 313 common share purchase warrants of the Company.

The Company intends to use the net proceeds of the Offering to partially fund the development of its facilities in Kincardine, Ontario and for general corporate purposes. Closing of the Offering is expected to occur on or about November 9, 2017.

Terms of Transaction

The Convertible Debentures will bear interest from the date of closing at 8.0% per annum, payable annually in arrears on December 30, 2018 and thereafter semi-annually on the last day of June and December in each year and will mature two years following the closing of the Offering.

The Convertible Debentures will be senior unsecured obligations of the Company and rank pari passu in right of payment of principal and interest with all other Convertible Debentures issued under the Offering and all previously existing senior unsecured indebtedness of the Company.

The underwriters will have an option to acquire up to 4,500 additional Convertible Debenture Units, each having the same terms as the Convertible Debenture Units above.

It will be a condition to the completion of the sale of Convertible Debenture Units to holders of 10% senior unsecured convertible debentures of the Company due 2019 that such Participating 2016 Investors convert all Outstanding Debentures held by them on or before the Offering Closing Date in accordance with their terms.

The Convertible Debentures will be convertible at the option of the holder into Common Shares at any time prior to the close of business on the Maturity Date at a conversion price of $1.60 per Common Share. Beginning on the date that is four months and one day following the Closing Date of the Offering, the Company may force the conversion of all of the principal amount of the then outstanding Convertible Debentures at the Conversion Price on 30 days prior written notice should the daily volume weighted average trading price of the Common Shares be greater than $2.10 for any 10 consecutive trading days.

Each Warrant will be exercisable to acquire one common share of the Company at an exercise price of $1.80 per Warrant Share for a period of three years following the Closing Date of the Offering, subject to customary adjustments in certain events and, provided that if, at any time following the date that is four months and one day from the Closing Date, and prior to the expiry date of the Warrants, daily volume weighted average trading price of the Company’s common shares equals or exceeds $2.90 for any 10 consecutive trading days, the Company may, on prior written notice, accelerate the expiry date of the Warrants to the date that is 30 days following the date of such notice. Any unexercised Warrants shall thereafter automatically expire.

The Convertible Debentures and the Warrants comprising the Convertible Debenture Units and any Common Shares issuable upon conversion or exercise thereof, as applicable, will be subject to a statutory hold period lasting four months and one day following the Closing Date.

The Offering is subject to certain conditions including, but not limited to, the receipt of all necessary regulatory and stock exchange approvals, including the approval of the TSX Venture Exchange.