Friday, August 22, 2025

Auxly Proposes Conversion Price Reduction for $98.7 Million Worth of Debt

Auxly Cannabis (TSXV: XLY) announced this morning that it has received approval from the TSX Venture to reprice certain debt that is coming due in January at the option of debtholders. The debt, which currently totals $98.79 million in outstanding convertible debentures, will now have a conversion price of $0.74 per share, versus $1.55 per share.

The debentures were originally issued on January 17, 2018, as part of a total $100 million raise, one of the largest at the time. Auxly’s share price has continuously deteriorated since that raise however, resulting in the conversion of debt being out-of-the-money, and Auxly now being on the hook to repay said debt. At the time of issuance, it was generally assumed by the market that the debt would convert to shares at maturity, and all would be well.

However, only $1.20 million worth of debt has converted by this point in time, leaving Auxly in a bit of a pickle. Revenues have not materialized as expected, and until recently Auxly had no means of paying the debt off. A recent cash injection by Imperial Brands now makes that attainable, however in the current capital-tight environment facing the cannabis sector, Auxly appears to be doing what it can to reduce cash outflow.

Originally, the conversion of all $100 million worth of convertible debentures was expected to result in approximately 64.51 million shares hitting the entity. With the reduced conversion price of $0.74 however, the remaining debt is expected to result in a dilution event of 133.50 million shares, assuming all of the debt converts and not factoring in interest. This doesn’t include the ‘top-up’ shares that Imperial Brands is entitled to as a result of their purchase agreement.

With Auxly Cannabis closing yesterday’s session at a price per share of $0.74 however, it’s questionable whether or not debtholders will want to elect the conversion option, rather than just be paid out.

The irony in the event, however, is that Auxly is essentially asking for leniency from its debtholders – a month after it foreclosed on one of its own lenders.


Information for this briefing was found via Sedar and Auxly Cannabis Group Inc. The author is no position in this security and 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.

Video Articles

A Medical Breakthrough the Market Overlooked | David Elsley – Cardiol Therapeutics

Why Grade Beats Size in Silver Mining | Frank Basa – Nord Precious Metals

Are Investors Missing the Start of the Next Commodity Supercycle? | Morgan Lekstrom – NexMetals

Recommended

Emerita Resources Expands El Cura Drill Program By 10,000 Metres As Deposit Remains Open For Expansion

ESGold Signs MOU For Tailings Project In Colombia With Grades Up To 42 g/t Gold, 280 g/t Silver

Related News

Auxly Cannabis Announces $30.0 Million ATM Financing

Auxly Cannabis (TSXV: XLY) is the latest firm to announce an at-the-market financing. The company...

Tuesday, March 23, 2021, 08:17:13 AM

Principals of Curative Cannabis Object to Auxly Foreclosure

Auxly Cannabis (TSXV: XLY) is facing some hiccups when it comes to securing its debts...

Tuesday, October 22, 2019, 12:43:18 PM

Auxly Cannabis Founder Chuck Rifici Resigns As Chairman

Auxly Cannabis (TSXV: XLY) has seen its founder depart the company ounce and for all....

Thursday, October 1, 2020, 08:53:29 AM

Auxly Cannabis Shutters Robinsons Facilities In Nova Scotia

Despite moving into the number two spot for Canadian cannabis market share, it appears Auxly...

Tuesday, February 8, 2022, 10:08:00 AM

Auxly Cannabis Q3 Revenues Climb To $24.5 Million

Auxly Cannabis (TSX: XLY) is quickly becoming a darling of the Canadian cannabis landscape. The...

Monday, November 15, 2021, 08:23:08 AM