Harborside
Auxly Announces $15.0 Million Bought-Deal Public Offering

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES

TORONTO, June 09, 2021 — Auxly Cannabis Group Inc. (“Auxly” or the “Company”) (TSX: XLY) (OTCQX: CBWTF) is pleased to announce that it has entered into an agreement pursuant to which ATB Capital Markets Inc. (“ATB”), as sole bookrunner, and Cantor Fitzgerald Canada Corporation, acting as co-lead underwriters of the Offering, together with a syndicate of underwriters (collectively, the “Underwriters”), will purchase 47,620,000 Units of the Company (the “Units”), on a bought-deal basis at a price per Unit of $0.315 (the “Issue Price”) for gross proceeds of $15,000,300 (the “Offering“). A.G.P./Alliance Global Partners is acting as the sole U.S. sub-agent and financial advisor to the Company in connection with the Offering in the United States.

Each Unit shall be comprised of one common share of the Company (each a “Common Share“) and one-half of one Common Share purchase warrant of the Company (each whole warrant, a “Warrant“). Each Warrant shall entitle the holder thereof to purchase one Common Share at an exercise price of $0.38 at any time up to 36 months from closing of the Offering.


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The Company has granted the Underwriters an option (the “Underwriters’ Option”) to increase the size of the Offering by up to an aggregate number of Units equal to 15% of the total number of Units issued under the Offering, such Underwriters’ Option being exercisable at any time and from time to time up to 30 days following the closing of the Offering.

The Company intends to use the net proceeds to continue to pursue strategic growth initiatives, including continued development, commercialization and expansion of its product portfolio, and for general corporate purposes.

The closing of the Offering is expected to occur on or about the week of June 14, 2021 (the “Closing”), or such later or earlier date as the Underwriters and the Company may agree upon, and is subject to the Company receiving all necessary regulatory approvals, including the approval of the necessary securities regulatory authorities.

The Units will be offered by way of a prospectus supplement (the “Prospectus Supplement“) to the Company’s short form base shelf prospectus dated March 18, 2021 (the “Base Shelf Prospectus“), which will be filed in those provinces of Canada as the Company and the Underwriters may designate (excluding Quebec) pursuant to National Instrument 44-101 – Short Form Prospectus Distributions and National Instrument 44-102 – Shelf Distributions. The Units may also be offered in the United States on a private placement basis pursuant to an appropriate exemption from the registration requirements under applicable U.S. law.

The Prospectus Supplement and the Base Shelf Prospectus will contain important detailed ‎information about the Offering. Copies of the Prospectus Supplement, following the filing thereof, and the Base Shelf ‎Prospectus will be available on the Company’s profile on SEDAR at www.sedar.com. ‎Copies of the Prospectus Supplement and the Base Shelf Prospectus may also be obtained in ‎Canada from ATB Capital Markets Inc. at Suite 410, 585 8 Avenue SW Calgary, AB T2P 1G1 or by email at prospectus@atb.com.

No securities regulatory authority has either approved or disapproved of the contents of this news release. This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.   This news release is not an offer to sell or the solicitation of an offer to buy the securities in the United States or in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to qualification or registration under the securities laws of such jurisdiction. The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and such securities may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from U.S. registration requirements and applicable U.S. state securities laws.

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/.

Investor Relations:
For investor enquiries please contact our Investor Relations Team:
Email: IR@auxly.com
Phone: 1.833.695.2414

Media Enquiries (only): 
For media enquiries or to set up an interview please contact:
Email: press@auxly.com 

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 receipt of the necessary regulatory approvals for the Offering; the timing and proposed completion of the Offering; the expected use of proceeds of the Offering by the Company; the pricing of the Offering;, future legislative and regulatory developments involving cannabis and cannabis products; and competition and other risks affecting Auxly 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 the Company can complete the Offering on the anticipated terms and timeline; whether the Company can obtain regulatory approval of the Offering on the proposed terms and timeline; and general economic, financial market, legislative, regulatory, competitive and political conditions in which the Company operates will remain the same. Additional risk factors are disclosed in the annual information form of the Company 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.