Supreme Cannabis Files Prospectus Supplement

Rhea-AI Summary

Supreme Cannabis (OTCQX: SPRWF) announced amendments to its 6.0% senior unsecured convertible debentures from October 2018. A prospectus supplement will allow for the issuance of up to 58.3 million common shares to debentureholders. In total, 116.6 million common shares will be issued, with half being freely-trading and the other half subject to a four-month restriction. Eligible debentureholders must elect through CDS to receive freely-trading shares by September 8, 2020. The amendments will take effect on September 9, 2020, enabling post-amendment trading of the debentures.

Positive

• Issuing 116.6 million common shares increases liquidity for debentureholders.
• Amendments to debentures may strengthen the company’s financial position.

Negative

• Reducing principal amount of debentures by $63.5 million suggests financial strain.

TORONTO, Sept. 2, 2020 /PRNewswire/ - The Supreme Cannabis Company, Inc. ("Supreme Cannabis" or the "Company") (TSX: FIRE) (OTCQX: SPRWF) (FRA: 53S1) is pleased to announce that further to the previously announced amendments (the "Amendments") to the terms of the Company's outstanding 6.0% senior unsecured subordinated convertible debentures issued in October 2018 (the "Debentures"), it has filed a prospectus supplement that qualifies the issuance of up to 58,300,000 common shares of the Company to holders of Debentures (the "Debentureholders") resident in eligible jurisdictions.

In consideration of the reduction of the principal amount of the Debentures by $63.5 million, among other consideration, the Company will issue an aggregate of 116.6 million common shares (the "Consideration Shares") to Debentureholders. Debentureholders resident in eligible jurisdictions will receive half of the Consideration Shares as freely-trading shares, and the other half of the Consideration Shares will be subject to a four-month restricted period. Debentureholders resident in other jurisdictions will be entitled to receive Consideration Shares subject to restricted periods, subject to applicable securities laws.

In order for eligible Debentureholders to receive freely-trading Consideration Shares, such Debentureholders are reminded to instruct their CDS participants to make the appropriate election with respect to jurisdiction of residency through CDS before the election deadline (the "Election Deadline"), which is expected to be on or around September 8, 2020. Any eligible Debentureholder that fails to elect prior to the Election Deadline will receive 100% of the Consideration Shares subject to a four-month restricted period.

No action is required by Debentureholders in order to receive their entitlement to Consideration Shares or Accretion Debentures, other than eligible Debentureholders wishing to receive freely-trading Consideration Shares being required to make the appropriate election through CDS as described above.

On September 9, 2020 the Company will enter into a supplemental trust indenture to implement the Amendments. At such time, all Amendments to the Debentures will become effective and Debentureholders will receive their pro rata entitlement to Consideration Shares and Accretion Debentures.

As of September 9, 2020, trading of Debentures on the Toronto Stock Exchange will occur on a post-Amendment basis.

About Supreme Cannabis.

The Supreme Cannabis Company, Inc., (TSX: FIRE) (OTCQX: SPRWF) (FRA: 53S1), is a global diversified portfolio of distinct cannabis companies, products and brands. Since 2014, the Company has emerged as one of the world's most premium producers of recreational, wholesale and medical cannabis products.

Supreme Cannabis' portfolio of brands caters to diverse consumer and patient experiences, with brands and products that address recreational, wellness, medical and new consumer preferences. The Company's recreational brand portfolio includes, 7ACRES, Blissco, 7ACRES Craft Collective, Sugarleaf and Hiway. Supreme Cannabis addresses national and international medical cannabis opportunities through its premium Truverra brand.

Supreme Cannabis' brands are backed by a focused suite of world-class operating assets that serve key functions in the value chain, including, scaled cultivation, value-add processing, automated packaging and product testing and R&D. Follow the Company on Instagram, Twitter, Facebook, LinkedIn and YouTube.

We simply grow better.

Forward-Looking Information.

Certain statements made in this press release, including statements concerning the proposed amendments to the Debentures and the completion and timing thereof, constitute "forward-looking information" within the meaning of applicable securities laws. Forward-looking information may relate to anticipated events or results and other statements that are not historical facts. The forward-looking information contained in this press release is made as of the date hereof, and the Company is not obligated to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. 

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SOURCE The Supreme Cannabis Company, Inc.

FAQ

What recent announcement has Supreme Cannabis made regarding its debentures?

Supreme Cannabis announced amendments to its 6.0% senior unsecured convertible debentures and a prospectus supplement for issuing 58.3 million common shares to debentureholders.

What is the deadline for debentureholders to elect for freely-trading shares?

Debentureholders must elect through CDS by September 8, 2020, to receive half of the Consideration Shares as freely-trading shares.

When will the amendments to the debentures take effect?

The amendments will take effect on September 9, 2020, enabling post-amendment trading of the debentures.

How many total common shares will be issued to debentureholders?

A total of 116.6 million common shares will be issued to debentureholders.

What happens if eligible debentureholders do not make an election by the deadline?

Eligible debentureholders who do not make the election will receive 100% of the Consideration Shares subject to a four-month restricted period.