Aurora Cannabis Files New $500 Million Offering

Canadian cannabis company Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB) announced it has completed the previously filed At-The-Market program. In addition to that, it has filed a new preliminary short form base shelf prospectus with securities regulators in each of the provinces of Canada, except Quebec, and a corresponding shelf registration statement on Form F–10  with the United States Securities and Exchange Commission. This filing will allow Aurora to make offerings of up to $500 million of common shares, preferred shares, warrants, subscription receipts, and debt securities, or any combination thereof during the 25-month period that the base shelf prospectus remains effective.

Aurora cannabis already had over 120 million shares outstanding and 19% of those shares are shorted – meaning those traders are betting the price per share will fall. Shares were lately selling at $4.37 in early trading, but the price to sales according to Yahoo Finance is $2.14. This is a tremendous drop from the company’s year high of $47 and not far from the 52-week low of $3.93.

With the completion of the previously filed ATM program, Aurora said it currently has available cash resources of approximately $272 million, in addition to an undrawn revolver capacity of approximately $11 million.

Declining Revenues

Last month, Aurora said delivered its official results for the fourth quarter of fiscal 2020 following up from a recent preannouncement of unaudited numbers. The company reviewed the drop in quarterly revenue, but investors were more disappointed that the company suggested revenues could continue to decline.  Aurora said its net revenue was expected to be in the range of $70 million and $72 million, versus $75.5 million in the third quarter. The company said that cannabis net revenue is expected to be between $66 million and $68 million, a sequential drop from the third quarter net revenue of $69.6 million. The actual number came in at $72.1 million, a sequential drop of 5%. Cannabis net revenue was $67.5 million in Q4 2020, a 3% decrease from the prior quarter.

At the time, new CEO Miguel Martin said, “Aurora has slipped from its top position in Canadian consumer, a market that continues to support material growth and opportunity. We look to expand beyond the value flower segment, leverage our capabilities in science and product innovation, and put our effort on a finite number of emerging growth formats. This entails prioritizing our San Rafael, Aurora and Whistler premium brands in flower, pre-rolls and vapor, which will be shortly followed by strategic marketing and innovation efforts in concentrates and edibles.”

Debra Borchardt

Debra BorchardtDebra Borchardt

Debra Borchardt is the CEO, Co-Founder, and Editor-In-Chief of GMR. She has covered the cannabis industry for several years at Forbes, Seeking Alpha and TheStreet. Prior to becoming a financial journalist, Debra was a Vice President at Bear Stearns where she held a Series 7 and Registered Investment Advisor license. Debra has a Masters degree in Business Journalism from New York University.


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