Auxly Cannabis (TSXV: XLY) this morning announced that it has closed on a further $3 million of unsecured convertible debentures from its previously announced $25 million standby financing. The drawdown marks the third tranche of the financing, with the company have drawn a total of $6.25 million from the facility since its announcement on April 29.
The further drawdown from the facility brings into question the cash position, and thereby the cash burn, of Auxly. As of March 31, the company reported having total cash and cash equivalents of $21.4 million, a large decrease from the prior quarters $44.1 million position. The previous drawdown of $2 million occurred roughly two weeks ago on May 21.
Debentures issued under the third tranche are convertible to common shares at a price of $0.38, with an additional 4,342,105 common share purchase warrants being issued with a conversion price of $0.46 per share until June 8, 2022. Furthermore, while the debentures are labeled as being “unsecured” by the company, certain directors and officers of the firm have agreed to indemnify any losses not recoverable from the collateral of the company.
Auxly Cannabis last traded at $0.36 on the TSX Venture.
Information for this briefing was found via Sedar and Auxly Cannabis Group Inc. The author has no affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.