- Auxly Cannabis Group (OTCQB: CBWTF) eliminates $21 million in debt, boosting financial stability.
- Secures a $36.2 million term loan and $10 million revolving facility with BMO.
- Debt settlement with Imperial Brands includes share conversions and warrants issuance.
Auxly Cannabis Group Inc. (OTCQB: CBWTF), a leader in the cannabis products market, has successfully completed two significant financial transactions to strengthen its financial position. These moves include the elimination of $21 million in debt and securing an amended credit facility with the Bank of Montreal (BMO), which consists of a $36.2 million term loan and a $10 million revolving facility.
The company also finalized outstanding obligations with Imperial Brands through a strategic combination of share conversions and warrant issuances. The settlement entailed converting a $1 million principal amount into shares at $0.81 per share and $1.39 million of accrued interest into shares at $0.0811 per share. Additionally, Auxly issued warrants for 90.8 million shares, representing approximately $7.37 million of additional interest, with $11.79 million in remaining interest forgiven.
The transactions, aimed at streamlining Auxly's capital structure, resulted in immediate dilution of 18.3 million shares from debt conversion, with potential future dilution of up to 90.8 million shares through warrants. These developments significantly fortify Auxly's balance sheet, granting the company enhanced financial flexibility to invest in future growth opportunities and eliminating the going concern uncertainty from its financial statements.
The successful restructuring marks a pivotal milestone in Auxly's financial evolution, as noted by CEO Hugo Alves, allowing the company to leverage financial strength and strategic partner support to continue expanding its footprint in the Canadian and global cannabis markets.
