Auxly Cannabis Group Inc. (OTCQX: CBWTF) closed on an additional $2 million worth of unsecured convertible debentures under its $25 million unsecured convertible debenture standby facility with an institutional investor as previously announced on April 28, 2020.
The convertible debentures that Auxly issued to the investor have a conversion price of $0.18 per common share of the company, while the stock currently trades at $0.12. The investor received warrants to purchase 6,111,111 common shares until September 8, 2022 at an exercise price of $0.216 per Common Share.
In connection with the completion of the Tranche, Auxly said it has agreed to indemnify certain of its directors and officers for any and all losses not otherwise recoverable from the collateral provided by the investor for the common shares. The Indemnity may constitute a related party transaction under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101“) but is otherwise exempt from the formal valuation and minority approval requirements of MI 61-101. The Indemnity has been approved by the independent directors of the Company.
The company said in a statement that each convertible debenture will mature on September 8, 2022 and will bear guaranteed interest from the date of issue at 7.5% per annum, payable semi-annually on June 30 and December 31 of each year and has the same terms and conditions as described in the Original Offering and the transaction documents filed on the Company’s SEDAR profile
Last week, Auxly’s Kolab Project and Lotus Cannabis Co. launched Kolab Project cannabis flower in select licensed retailers across Canada. Kolab Project Kalifornia is a heavy-hitting Indica-dominant strain, which is the result of a collaboration between Kolab Project and Lotus Cannabis Co., the consumer brand of Lotus Ventures Inc. (OTC:LTTSF).
“Kolab Project and Lotus Flower are a dream team,” said Hugo Alves, CEO, Auxly. “We’re excited to leverage Kolab Project’s marketing and distribution expertise to bring this premium product to Canadians at a competitive price point. Congratulations to the talented and dedicated Lotus team, renowned in the region for their passion for growing and commitment to their craft. We are proud to work with Lotus to transparently introduce Canadian consumers to their story and their high-quality products.”