Aurora Cannabis Inc. (NYSE: ACB) has filed a new preliminary short form base shelf prospectus to offer up to $1 billion in securities. The company said that the shelf includes common shares, preferred shares, warrants, subscription receipts and debt securities and will be effective for a 25-month period. Management said that it believes the filing of this new Base Shelf Prospectus is in the best interest of shareholders and provides maximum flexibility to pursue strategic initiatives, which may include acquisitions or partnerships pursuant to the company’s previously stated global growth strategy.
The stock fell over 4% on the news and was closed at $9.85. Shares have dropped by 17% over the past 12 months.
In October of 2020, Aurora filed an offering to raise $500 million. At that time, Aurora already had over 120 million shares outstanding and 19% of those shares were shorted – meaning those traders are betting the price per share will fall. As of February only 10% of the shares are shorted. 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.
On January 26, 2021, Aurora closed its bought deal public offering of units for total gross proceeds of $137.9 million. The company sold 13,200,000 units at a price of US$10.45 per Unit, including 1,200,000 Units sold pursuant to the exercise in full of the underwriters’ over-allotment option.
Martin added, “To further support this strategy, we have also focused on improving our cash burn, margins, and overall financial flexibility. To that point, our year over year cash use has decreased by 74% to $70.5 million, our normalized margins remain solid particularly in medical, and our recently amended credit facility gives Aurora much-improved optionality as opportunities arise. Combined with $565 million in cash on our balance sheet today, Aurora will continue to be a long-term player in the global cannabinoid market and increasingly positioned to deliver for shareholders over the long run.”
In February, Aurora said that the total and cannabis net revenue before provisions was $70.3 million, an 11% increase over last year’s second quarter and a 2.5% sequential increase. After accounting for return and price provisions, the quarter’s total cannabis net revenue was $67.7 million, a 28% increase in cannabis net revenue over the prior year’s second quarter. The company’s net loss, which wasn’t mentioned in the press release was $292 million dollars. The net loss per diluted share was $1.74. The cash balance as of February 10, 2021, was approximately $565 million.