Auxly Closes Transformational Debt Reduction Transactions, Strengthens Financial Position and Unlocks Growth Potential
Auxly Cannabis Group (OTCQB: CBWTF) has successfully completed two transformative financial transactions that significantly strengthen its balance sheet and financial position. The company has eliminated $21 million in debt and secured an amended credit facility with BMO, which includes a $36.2 million term loan and a $10 million revolving facility.
The company has also settled all obligations with Imperial Brands through a combination of share conversions and warrant issuances. This settlement included converting $1 million principal amount into shares at $0.81 per share, converting $1.39 million of accrued interest into shares at $0.0811 per share, and issuing warrants for 90.8 million shares in exchange for approximately $7.37 million of additional interest, with $11.79 million in remaining interest forgiven.
Auxly Cannabis Group (OTCQB: CBWTF) ha completato con successo due operazioni finanziarie transformative che rafforzano significativamente il suo bilancio e la posizione finanziaria. L'azienda ha eliminato 21 milioni di dollari di debito e ottenuto una linea di credito modificata con BMO, che include un prestito a termine da 36,2 milioni di dollari e una linea di credito revolving da 10 milioni di dollari.
Inoltre, la società ha saldato tutte le obbligazioni con Imperial Brands tramite una combinazione di conversioni di azioni e emissioni di warrant. Questo accordo ha previsto la conversione di un importo principale di 1 milione di dollari in azioni a 0,81 dollari per azione, la conversione di 1,39 milioni di dollari di interessi maturati in azioni a 0,0811 dollari per azione, e l'emissione di warrant per 90,8 milioni di azioni in cambio di circa 7,37 milioni di dollari di interessi aggiuntivi, con la cancellazione di 11,79 milioni di dollari di interessi residui.
Auxly Cannabis Group (OTCQB: CBWTF) ha completado con éxito dos transacciones financieras transformadoras que fortalecen significativamente su balance y posición financiera. La compañía ha eliminado 21 millones de dólares en deuda y asegurado una línea de crédito modificada con BMO, que incluye un préstamo a plazo de 36,2 millones de dólares y una línea de crédito revolvente de 10 millones de dólares.
Además, la empresa ha saldado todas las obligaciones con Imperial Brands mediante una combinación de conversiones de acciones y emisiones de warrants. Este acuerdo incluyó convertir un importe principal de 1 millón de dólares en acciones a 0,81 dólares por acción, convertir 1,39 millones de dólares de intereses acumulados en acciones a 0,0811 dólares por acción, y emitir warrants por 90,8 millones de acciones a cambio de aproximadamente 7,37 millones de dólares en intereses adicionales, perdonando 11,79 millones de dólares en intereses restantes.
Auxly Cannabis Group (OTCQB: CBWTF)는 재무 상태와 재무 건전성을 크게 강화하는 두 건의 변혁적인 금융 거래를 성공적으로 완료했습니다. 회사는 2,100만 달러의 부채를 제거했으며, BMO와 함께 수정된 신용 시설을 확보했는데, 여기에는 3,620만 달러의 만기 대출과 1,000만 달러의 회전 신용 시설이 포함됩니다.
또한 회사는 Imperial Brands와의 모든 채무를 주식 전환과 워런트 발행을 통해 정산했습니다. 이 합의에는 100만 달러 원금을 주당 0.81달러에 주식으로 전환하고, 139만 달러의 미지급 이자를 주당 0.0811달러에 주식으로 전환하며, 약 737만 달러의 추가 이자에 대해 9,080만 주의 워런트를 발행하고, 1,179만 달러의 잔여 이자는 탕감하는 내용이 포함되어 있습니다.
Auxly Cannabis Group (OTCQB: CBWTF) a mené à bien deux opérations financières majeures qui renforcent significativement son bilan et sa situation financière. La société a éliminé 21 millions de dollars de dette et obtenu une facilité de crédit modifiée avec BMO, comprenant un prêt à terme de 36,2 millions de dollars et une ligne de crédit renouvelable de 10 millions de dollars.
La société a également réglé toutes ses obligations envers Imperial Brands par une combinaison de conversions d’actions et d’émissions de bons de souscription. Ce règlement comprend la conversion d’un montant principal de 1 million de dollars en actions à 0,81 dollar par action, la conversion de 1,39 million de dollars d’intérêts courus en actions à 0,0811 dollar par action, ainsi que l’émission de bons de souscription pour 90,8 millions d’actions en échange d’environ 7,37 millions de dollars d’intérêts supplémentaires, avec une remise de 11,79 millions de dollars d’intérêts restants.
Auxly Cannabis Group (OTCQB: CBWTF) hat erfolgreich zwei transformative Finanztransaktionen abgeschlossen, die seine Bilanz und finanzielle Position erheblich stärken. Das Unternehmen hat 21 Millionen US-Dollar Schulden abgebaut und eine geänderte Kreditfazilität mit der BMO gesichert, die einen 36,2 Millionen US-Dollar Terminkredit und eine 10 Millionen US-Dollar revolvierende Kreditlinie umfasst.
Das Unternehmen hat außerdem alle Verpflichtungen gegenüber Imperial Brands durch eine Kombination aus Aktienumwandlungen und Optionsschein-Ausgaben beglichen. Diese Einigung umfasste die Umwandlung eines 1 Million US-Dollar Hauptbetrags in Aktien zu je 0,81 US-Dollar, die Umwandlung von 1,39 Millionen US-Dollar aufgelaufener Zinsen in Aktien zu je 0,0811 US-Dollar sowie die Ausgabe von Optionsscheinen für 90,8 Millionen Aktien im Austausch für rund 7,37 Millionen US-Dollar zusätzlicher Zinsen, wobei 11,79 Millionen US-Dollar an verbleibenden Zinsen erlassen wurden.
- None.
- Immediate dilution of 18.3 million shares from debt conversion
- Potential future dilution of up to 90.8 million shares through warrants
- Imperial Brands ownership increased to 19.9% of outstanding shares
These transactions represent an important milestone in the execution of Auxly's strategy, delivering a materially stronger balance sheet and providing the financial flexibility to invest in future growth. They reflect the culmination of a focused effort to streamline Auxly's capital structure and reinforce the long-term sustainability of our business.
With these transactions now complete, Auxly has achieved the following:
- Eliminated approximately
$21 million - Reduced debt service obligations by approximately
$700,000 - Access to a new
$10 million - Removal of the going concern uncertainty disclosure from the Company's financial statements, a clear signal of renewed financial strength and stability.
"The closing of these transaction marks a turning point for Auxly," said Hugo Alves, CEO of Auxly. "We emerge from these transactions with a transformed balance sheet and the financial strength to fuel future growth. It is an exciting time to be an Auxly stakeholder. We are profitable, we are growing, we have brands and products that people trust and love, and now, with the continuing support of our capital and strategic partners, we have the financial fortitude to continue building on our success in the Canadian cannabis market and beyond."
"This is a significant milestone in Auxly's financial evolution," said Travis Wong, CFO of Auxly. "We've reduced debt, extended the term of our senior facility, and secured a new working capital facility. These improvements provide us with the financial flexibility to execute our strategy with confidence."
The following provides an overview of the finalized terms and structure of the amended credit facility and the Imperial Brands debt settlement.
Amended Credit Facility
The Company has amended and restated Auxly Leamington's existing credit facility agreement with a syndicate of lenders led by BMO (the "Amended Credit Facility"). The key modifications under the Amended Credit Facility include the following:
- Borrower: The Company replaced Auxly Leamington as the borrower.
- Facility Structure: Credit facility of
$50.7 million - Term loan of
$36.2 million - Revolving facility of
$10.0 million - Existing equipment leases of
$4.5 million
- Term loan of
- Term: Two years with an option to extend for an additional year for
$100,000 - Updated Financial Covenants: Revised covenants which provide the Company with the flexibility to support its long-term growth strategy.
- Security: The Amended Credit Facility will be secured by all, or substantially all, of the assets of the Company and its subsidiaries (rather than primarily the assets and equity of Auxly Leamington as is the case under Auxly Leamington's existing credit facility).
Imperial Brands Convertible Debenture Settlement
Pursuant to the Company's exchange agreement with Imperial Brands dated June 19, 2025 (the "Exchange Agreement"), the following occurred:
(a) | Imperial Brands converted the remaining |
(b) | Imperial Brands converted approximately |
(c) | the Company issued to Imperial Brands pre-funded warrants to acquire up to 90,883,618 Shares (the "Warrants") in exchange for approximately |
The 18,336,489 Shares issued under the Principal Conversion and the Interest Conversion is the only immediate dilution to shareholders. Imperial Brands now owns approximately
ON BEHALF OF THE BOARD
"Hugo Alves" CEO
About Auxly Cannabis Group Inc. (TSX: XLY)
Auxly is a leading Canadian consumer packaged goods company in the cannabis products market, headquartered in
Our vision is to be a global leader in quality cannabis products.
Learn more at www.auxly.com and stay up to date at Twitter: @AuxlyGroup; Instagram: @auxlygroup; Facebook: @auxlygroup; LinkedIn: company/auxlygroup/.
Notice Regarding Forward Looking Information:
This news release contains certain "forward-looking information" within the meaning of applicable Canadian securities law. Forward-looking information is frequently characterized by words such as "plan", "continue", "expect", "project", "intend", "believe", "anticipate", "estimate", "may", "will", "potential", "proposed" and other similar words, or information that certain events or conditions "may" or "will" occur. This information is only a prediction. Various assumptions were used in drawing the conclusions or making the projections contained in the forward-looking information throughout this news release. Forward-looking information includes, but is not limited to: the anticipated benefits of the Amended Credit Facility and the timing thereof; the issuance of Underlying Shares in connection with the potential future exercise of Warrants; the anticipated benefits of the transaction contemplated by the Exchange Agreement and the timing thereof; the Company's execution of its product development and commercialization strategy; consumer preferences; political change; future legislative and regulatory developments involving cannabis and cannabis products; and competition and other risks affecting the Company in particular and the cannabis industry generally.
A number of factors could cause actual results to differ materially from a conclusion, forecast or projection contained in the forward-looking information included in this release including, but not limited to, whether: the expected benefits of the execution of the Amended Credit Facility and/or the Settlement (or any portion thereof) materialize in the manner expected, or at all; there is acceptance and demand for current and future Company products by consumers and provincial purchasers; and general economic, financial market, legislative, regulatory, competitive and political conditions in which the Company operates will remain the same. Additional risk factors are disclosed in the annual information form of the Company for the financial year ended December 31, 2024 dated March 20, 2025 and other documents that the Company files with Canadian securities regulatory authorities from time to time.
New factors emerge from time to time, and it is not possible for management to predict all of those factors or to assess in advance the impact of each such factor on the Company's business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking information. The forward-looking information in this news release is based on information currently available and what management believes are reasonable assumptions. Forward-looking information speaks only to such assumptions as of the date of this release. Readers should not place undue reliance on forward-looking information contained in this news release.
The forward-looking information contained in this release is expressly qualified by the foregoing cautionary statements and is made as of the date of this release. Except as may be required by applicable securities laws, the Company does not undertake any obligation to publicly update or revise any forward-looking information to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results, or otherwise.
Neither the TSX nor its Regulation Services Provider (as that term is defined in the policies of the TSX) accepts responsibility for the adequacy or accuracy of this release.
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SOURCE Auxly Cannabis Group Inc.
FAQ
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