Auxly Provides Update on Stalking Horse Bid for Ayurcann

TORONTO, April 13, 2026 /CNW/ - Auxly Cannabis Group Inc. (TSX: XLY) (OTCQB: CBWTF) ("Auxly" or the "Company"), a leading consumer packaged goods company in the cannabis products market, today announced that its stalking horse bid for the assets of Ayurcann Holdings Corp. ("Ayurcann") was not selected as the successful bid in the court-supervised sale process.

As previously disclosed, the stalking horse bid was submitted in the Ayurcann sale process concurrently with Auxly providing debtor‑in‑possession financing to Ayurcann in a principal amount of up to $2.0 million (the "DIP Facility"). The DIP Facility is non‑revolving, bearing interest at 12% per annum, with a 2.0% upfront commitment fee earned and paid to the Company upon execution. The DIP Facility is secured by way of a Court‑ordered super‑priority charge in favour of the Company over all of Ayurcann's property. 

Pursuant to the terms of the sales process, Auxly's bid has been selected as the "Back-Up Bid" in accordance with the sale process rules and, should the successful bid not close by May 15, 2026, will be the winning bidder at its original stalking horse bid amount.

As part of the closing of the successful bid, the DIP Facility will be repaid, including interest, by the successful bidder. Additionally, the Break Fee and Expense Reimbursement contemplated in the stalking horse bid will be paid to the Company as part of the closing of the successful bid.

Hugo Alves, CEO of Auxly commented: "Our stalking horse bid for Ayurcann was opportunistic in nature and contingent on exceeding our internal return thresholds. Our team will continue to pursue non-organic growth opportunities with vigilance where there is a strong strategic fit and, in the meantime, we can continue to focus on growing our business organically. We expect to generate significant free cash flow in 2026 and we are evaluating all our capital allocation alternatives to maximize shareholder value."

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 Toronto, Canada. Our mission is to help consumers live happier lives through quality cannabis products that they trust and love. Our vision is to be a leader in branded cannabis products that deliver on our consumer promise of quality, safety and efficacy.

Learn more at www.auxly.com and stay up to date at X: @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 repayment of the DIP Facility; expectations regarding future non-organic growth opportunities and continued focus on organic growth; expectations regarding the Company's ability to generate significant free cash flow in 2026; expectations regarding the Company's ability to maximize shareholder value; and expectations regarding the Company's leadership position in the branded cannabis product market and ability to deliver on its consumer promise of quality, safety and efficacy.

A number of factors could cause actual results to differ materially from a conclusion, forecast or projection contained in the forward‐looking information in this release including, but not limited to, whether: all necessary governmental and regulatory permits and approvals for the operation of their facilities and the development of cannabis products, and whether such permits and approvals can be obtained in a timely manner; the Company will be able to successfully launch new product formats and enter into new markets; there is acceptance and demand for current and future Company products by consumers and provincial purchasers; the ability of the Company to find organic growth opportunities and grow shareholder value; the successful bidder's ability to repay the DIP Facility; risks relating to the overall macroeconomic environment, which may impact customer spending, the Company's costs and margins, including tariffs (and related retaliatory measures), the levels of inflation, and interest rates and the general economic, financial market, legislative, regulatory, competitive and political conditions in which the Company, its subsidiaries, relevant third parties and Company partners operate will remain the same. Additional risk factors are disclosed in the annual information form of the Company for the financial year ended December 31, 2025 dated March 25, 2026.

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 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. In addition, this release may contain forward‐looking information attributed to third party industry sources, the accuracy of which has not been verified by the Company. The forward‐looking information is being provided for the purposes of assisting the reader in understanding management's current expectations and plans relating to the future, and the reader is cautioned that such forward‐ looking information may not be appropriate for any other purpose. Readers should not place undue reliance on forward‐looking information contained in this 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 Toronto Stock Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Toronto Stock Exchange) accepts responsibility for the adequacy or accuracy of this release.

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SOURCE Auxly Cannabis Group Inc.

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