TORONTO, July 06, 2021 (GLOBE NEWSWIRE) -- Auxly Cannabis Group Inc. (TSX - XLY) (OTCQX: CBWTF) ("Auxly" or the "Company") a leading consumer packaged goods company in the cannabis products market, is pleased to announce the implementation of amendments to certain provisions of its previously issued $123 million debenture (the “Debenture”) and investor rights agreement (the “Investor Rights Agreement”) dated September 25, 2019 (collectively, the “Amendments”) with its strategic partner, Imperial Brands PLC (“Imperial Brands”), pursuant to the terms of the previously announced amending agreement dated April 19, 2021.
Pursuant to the Amendments, Imperial and Auxly have: (i) extended the maturity date of the Debenture by 24 months from September 25, 2022 to September 25, 2024; (ii) provided Imperial with the right, on an annual basis, to convert any or all of the accrued and unpaid interest on the Debenture then outstanding into Common Shares (the “Interest Conversion Election”), at a conversion price equal to the five-day volume weighted average trading price of the Common Shares on the date that Interest Conversion Election is made; (iii) provided that the payment of interest under the Debenture, which currently accrues at a rate of 4% per annum and is payable annually, will remain unchanged but will be payable on maturity of the Debenture; and (iv) re-instated certain approval rights of Imperial under the Investor Rights Agreement.
The Amendments were subject to, among other things, the Company obtaining minority shareholder approval in accordance with Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions, which was obtained at the Company’s annual and special meeting of shareholders held on June 28, 2021.
The Company is also pleased to announce that it has completed the sale of its interest in 2368523 Ontario Limited (d/b/a Curative Cannabis) to a private purchaser for total proceeds to the Company of $6 million. The Company acquired substantially all the shares and assets of Curative Cannabis pursuant to a foreclosure order issued on November 27, 2019, which assets included a cannabis cultivation facility located in Chatham-Kent, Ontario. The facility has remained non-operational since the foreclosure and while exploring all possible options with respect to the use, commercialization and/or sale of the asset the Company determined such asset was not essential to the Company’s operations and strategy. The disposition of this non-core asset allows the Company to strengthen its financial position with non-dilutive capital that it can deploy into its core business.
ON BEHALF OF THE BOARD
"Hugo Alves" CEO
About Auxly Cannabis Group Inc. (TSX: XLY)
Auxly is a leading Canadian cannabis company dedicated to bringing innovative, effective, and high-quality cannabis products to the wellness and adult-use markets. Auxly's experienced team of industry first-movers and enterprising visionaries have secured a diversified supply of raw cannabis, strong clinical, scientific and operating capabilities and leading research and development infrastructure in order to create trusted products and brands in an expanding global market.
Learn more at www.auxly.com and stay up to date at Twitter: @AuxlyGroup; Instagram: @auxlygroup; Facebook: @auxlygroup; LinkedIn: company/auxlygroup/.
For investor enquiries please contact our Investor Relations Team:
Media Enquiries (only):
For media enquiries or to set up an interview please contact:
Auxly’s head office is located at 777 Richmond St. W, Unit 002, Toronto, ON M6J 0C2. Imperial Brand’s head office is located at 121 Winterstoke Road, Bristol, UK BS3 2LL.
Early Warning Disclosure
An affiliate of Imperial Brands holds the Debenture and assuming the Debenture is exercised in full as of the date hereof (but excluding any exercise of the Interest Conversion Election by the holder of the Debenture), Imperial Brands and its affiliates would have beneficial ownership of 157,983,592 Common Shares or approximately 16% of the issued and outstanding Common Shares (calculated on a non-diluted basis).
Imperial Brands intends to review its investment in the Company on a continuing basis and may, subject to the terms of the Investor Rights Agreement, purchase or sell common shares, either on the open market or in private transactions, or exercise the Debenture in the future, in each case, depending on a number of factors, including general market and economic conditions and other factors and conditions Imperial Brands deems appropriate.
An amended early warning report will be filed by Imperial Brands with applicable Canadian securities regulatory authorities. To obtain a copy of the early warning report, please contact Daniel Glavin at 416-869-5500.
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 Company's execution of its product development, commercialization strategy and expansion plans; consumer preferences; political change; 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: general economic, financial market, legislative, regulatory, competitive and political conditions in which Auxly operates will remain the same. Additional risk factors are disclosed in the annual information form of Auxly for the financial year ended December 31, 2020 dated April 23, 2021.
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 Auxly’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. The purpose of forward-looking information is to provide the reader with a description of management's expectations, and 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 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 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.
© 2022 Canjex Publishing Ltd. All rights reserved.