Auxly To Raise $3.36M Via Private Placement

Auxly Cannabis Group Inc. CBWTF XLY has entered into an agreement with institutional investors pursuant to which the investors have agreed to purchase, on a private placement basis, 96 million common shares of the company at a price of $0.035 per common share and 96 million common share purchase warrants, with each warrant entitling the investors to purchase one common share at an exercise price of $0.045 per common share at any time up to 60 months following the date of issuance thereof, resulting in total gross proceeds of approximately $3.36 million, before deducting any applicable advisor or finder fees or offering expenses.

The net proceeds from the offering will be used for working capital and general corporate purposes.

The closing of the offering is expected to occur during the week of February 13, 2023, or such other date as the investors and the company may agree upon, and is subject to the completion of formal documentation and the company receiving all necessary regulatory approvals, including the approval of the Toronto Stock Exchange.

In the United States, the common shares, the warrants and the common shares issuable upon the exercise of the warrants will be offered on a private placement basis pursuant to exemptions from the registration requirements of the United States Securities Act of 1933, as amended, and certain other jurisdictions in accordance with applicable securities laws. No securities will be offered for sale or sold in Canada.

The Bought Deal Warrant Amendments

In addition, the company intends to amend the terms of 27.38 million common share purchase warrants of the company which were issued pursuant to a bought deal financing completed on June 14, 2021. The bought deal warrants currently have an exercise price of CA$0.38 per common share and expire on June 14, 2024. The purpose of the proposed amendments is to reduce the exercise price of the bought deal warrants from CA$0.38 to CA$0.045 per common share, and extend the expiry date of the bought deal warrants from June 14, 2024 to June 14, 2026. The bought deal warrant amendments are subject to the completion of formal documentation and the company receiving all necessary approvals, including any required approvals from the holders of the bought deal warrants under the terms of the indenture governing the bought deal warrants. The bought deal warrant amendments are expected to become effective by late February or early March.

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