Auxly Cannabis Group Inc. (TSX – XLY) (OTCQX: CBWTF) has pushed out the maturity date for its $123 million debenture by 24 months from September 25, 2022 to September 25. The interest payments under the Debenture, accrues at a rate of 4% per year and is payable annually, will remain unchanged but will be payable on maturity of the Debenture.
The company also amended the investor rights agreement dated September 25, 2019 with its strategic partner, Imperial Brands PLC. Imperial has the right, on an annual basis, to convert any or all of the accrued and unpaid interest on the Debenture then outstanding into common shares at a conversion price equal to the five-day volume-weighted average trading price of the shares on the date that Interest Conversion Election is made.
Auxly also said that it has completed the sale of its interest in 2368523 Ontario Limited (d/b/a Curative Cannabis) to a private purchaser for total proceeds of $6 million. Auxly had acquired Curative Cannabis through a foreclosure order issued on November 27, 2019, which assets included a cannabis cultivation facility located in Chatham-Kent, Ontario. The facility has remained non-operational since the foreclosure and while exploring all possible options with respect to the use, commercialization and/or sale of the asset the company determined such asset was not essential to its operations and strategy. The disposition of this non-core asset allows Auxly to strengthen its financial position with non-dilutive capital that it can deploy into its core business.
Sundial Growers Inc. (NASDAQ: SNDL) announced that it has increased its commitment to SunStream Bancorp Inc. to $538 million from its previously announced commitment of $188 million. All amounts are in Canadian dollars unless otherwise stated. SunStream is a joint venture between Sundial and the SAF Group that leverages a strategic financial and operational partnership to target asymmetrically enhanced risk-return opportunities in the cannabis industry to provide exposure to a portfolio of attractive debt, equity, and hybrid investments.
In May, Sundial reported a net loss of $134.4 million as a result of $130.0 million of non-cash amounts reflecting the impact of share price volatility on the accounting valuation of derivative warrants. The net revenue from branded cannabis products declined in the first quarter to $7.2 million from $11.4 million in the previous quarter. Sales were impacted by provincial boards reducing inventory levels, retail market conditions, and continued price compression across the industry and Sundial’s portfolio. These market dynamics impacted all of Sundial’s formats and brands in the first quarter. Revenue from licensed product sales was $2.7 million compared to $2.4 million in the previous quarter.