Latest news with #HugoAlves
Cision Canada
08-07-2025
- Business
- Cision Canada
Auxly Closes Transformational Debt Reduction Transactions, Strengthens Financial Position and Unlocks Growth Potential
TORONTO, July 8, 2025 /CNW/ - Auxly Cannabis Group Inc. (TSX: XLY) (OTCQB: CBWTF) (" Auxly" or the " Company"), a leading consumer packaged goods company in the cannabis products market, is pleased to announce the successful closing of two transformative financial transactions previously announced on June 19, 2025: the amendment and extension of its credit facility led by the Bank of Montreal (" BMO"), and the full settlement of all amounts owing to Imperial Brands plc (" Imperial Brands"). These transactions represent an important milestone in the execution of Auxly's strategy, delivering a materially stronger balance sheet and providing the financial flexibility to invest in future growth. They reflect the culmination of a focused effort to streamline Auxly's capital structure and reinforce the long-term sustainability of our business. With these transactions now complete, Auxly has achieved the following: Eliminated approximately $21 million in debt from the balance sheet; Reduced debt service obligations by approximately $700,000 per annum; Access to a new $10 million revolving facility, providing financial flexibility to support continued growth; and Removal of the going concern uncertainty disclosure from the Company's financial statements, a clear signal of renewed financial strength and stability. "The closing of these transaction marks a turning point for Auxly," said Hugo Alves, CEO of Auxly. "We emerge from these transactions with a transformed balance sheet and the financial strength to fuel future growth. It is an exciting time to be an Auxly stakeholder. We are profitable, we are growing, we have brands and products that people trust and love, and now, with the continuing support of our capital and strategic partners, we have the financial fortitude to continue building on our success in the Canadian cannabis market and beyond." "This is a significant milestone in Auxly's financial evolution," said Travis Wong, CFO of Auxly. "We've reduced debt, extended the term of our senior facility, and secured a new working capital facility. These improvements provide us with the financial flexibility to execute our strategy with confidence." The following provides an overview of the finalized terms and structure of the amended credit facility and the Imperial Brands debt settlement. Amended Credit Facility The Company has amended and restated Auxly Leamington's existing credit facility agreement with a syndicate of lenders led by BMO (the " Amended Credit Facility"). The key modifications under the Amended Credit Facility include the following: Borrower: The Company replaced Auxly Leamington as the borrower. Facility Structure: Credit facility of $50.7 million consisting of: Term loan of $36.2 million Revolving facility of $10.0 million to be used for working capital and corporate requirements Existing equipment leases of $4.5 million Term: Two years with an option to extend for an additional year for $100,000. Updated Financial Covenants: Revised covenants which provide the Company with the flexibility to support its long-term growth strategy. Security: The Amended Credit Facility will be secured by all, or substantially all, of the assets of the Company and its subsidiaries (rather than primarily the assets and equity of Auxly Leamington as is the case under Auxly Leamington's existing credit facility). Imperial Brands Convertible Debenture Settlement Pursuant to the Company's exchange agreement with Imperial Brands dated June 19, 2025 (the " Exchange Agreement"), the following occurred: (a) Imperial Brands converted the remaining $1.0 million principal amount owed under the outstanding convertible debenture held by Imperial Brands (the " Debenture") into 1,234,568 common shares of Auxly (" Shares") at a conversion price of $0.81 per share in accordance with the terms of the Debenture (the " Principal Conversion"); (b) Imperial Brands converted approximately $1.39 million of accrued interest under the Debenture into 17,101,921 Shares at a per-share conversion price of $0.0811, equal to the trailing 5-day volume-weighted average trading price of the Shares on the Toronto Stock Exchange (the " TSX") as of the date hereof (the " Interest Conversion"); and (c) the Company issued to Imperial Brands pre-funded warrants to acquire up to 90,883,618 Shares (the " Warrants") in exchange for approximately $7.37 million of additional interest, with the remaining accrued interest owed under the Debenture in the amount of approximately $11.79 million forgiven. Each Warrant entitles an affiliate of Imperial Brands to purchase one Share for a nominal exercise price at any time prior to December 31, 2028 (the " Expiry Date"), provided that the number of Warrants exercisable for Shares (the " Underlying Shares") that may be exercised at any time prior to the Expiry Date will be limited to such number of Warrants for which the issuance of corresponding Underlying Shares would not result in Imperial Brands owning more than 19.9% of all the then outstanding Shares. The 18,336,489 Shares issued under the Principal Conversion and the Interest Conversion is the only immediate dilution to shareholders. Imperial Brands now owns approximately 19.9% of all issued and outstanding Shares and there are no further amounts owing by the Company to Imperial Brands. ON BEHALF OF THE BOARD "Hugo Alves" CEO About Auxly Cannabis Group Inc. (TSX: XLY) Auxly is a leading Canadian consumer packaged goods company in the cannabis products market, headquartered in Toronto, Canada. Our mission is to help consumers live happier lives through quality cannabis products that they trust and love. Our vision is to be a global leader in quality cannabis products. Learn more at and stay up to date at Twitter: @AuxlyGroup; Instagram: @auxlygroup; Facebook: @auxlygroup; LinkedIn: company/auxlygroup/. Notice Regarding Forward Looking Information: This news release contains certain "forward-looking information" within the meaning of applicable Canadian securities law. Forward-looking information is frequently characterized by words such as "plan", "continue", "expect", "project", "intend", "believe", "anticipate", "estimate", "may", "will", "potential", "proposed" and other similar words, or information that certain events or conditions "may" or "will" occur. This information is only a prediction. Various assumptions were used in drawing the conclusions or making the projections contained in the forward-looking information throughout this news release. Forward-looking information includes, but is not limited to: the anticipated benefits of the Amended Credit Facility and the timing thereof; the issuance of Underlying Shares in connection with the potential future exercise of Warrants; the anticipated benefits of the transaction contemplated by the Exchange Agreement and the timing thereof; the Company's execution of its product development and commercialization strategy; consumer preferences; political change; future legislative and regulatory developments involving cannabis and cannabis products; and competition and other risks affecting the Company in particular and the cannabis industry generally. A number of factors could cause actual results to differ materially from a conclusion, forecast or projection contained in the forward-looking information included in this release including, but not limited to, whether: the expected benefits of the execution of the Amended Credit Facility and/or the Settlement (or any portion thereof) materialize in the manner expected, or at all; there is acceptance and demand for current and future Company products by consumers and provincial purchasers; and general economic, financial market, legislative, regulatory, competitive and political conditions in which the Company operates will remain the same. Additional risk factors are disclosed in the annual information form of the Company for the financial year ended December 31, 2024 dated March 20, 2025 and other documents that the Company files with Canadian securities regulatory authorities from time to time. New factors emerge from time to time, and it is not possible for management to predict all of those factors or to assess in advance the impact of each such factor on the Company's business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking information. The forward-looking information in this news release is based on information currently available and what management believes are reasonable assumptions. Forward-looking information speaks only to such assumptions as of the date of this release. Readers should not place undue reliance on forward-looking information contained in this news release. The forward-looking information contained in this release is expressly qualified by the foregoing cautionary statements and is made as of the date of this release. Except as may be required by applicable securities laws, the Company does not undertake any obligation to publicly update or revise any forward-looking information to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results, or otherwise. SOURCE Auxly Cannabis Group Inc.
Cision Canada
02-07-2025
- Business
- Cision Canada
Auxly Announces Results of Annual General Meeting of Shareholders
TORONTO, July 2, 2025 /CNW/ - Auxly Cannabis Group Inc. (TSX: XLY) (OTCQB: CBWTF) (" Auxly" or the " Company") announced today the voting results from its annual general and special meeting of shareholders held on June 30, 2025 (the " Meeting"). A total of 371,890,083 common shares of the Company, representing 28.23% of the issued and outstanding common shares of the Company, were voted in connection with the Meeting by shareholders and proxy holders. All of the matters put forward before the Company's shareholders for consideration and approval, as set out in the Company's information circular dated May 27, 2025 (the " Circular"), were approved by the requisite majority of the votes cast at the Meeting. The results are set out below. Each of the directors listed as a nominee in the Circular was elected as a director of the Company at the Meeting. The detailed results of the vote for the election of directors held at the Meeting are set out below: At the Meeting, Auxly shareholders approved the re-appointment of Ernst & Young LLP (" EY") as the Company's auditors for the 2025 fiscal year and authorized the board of directors to fix its remuneration. A report of voting results on all resolutions voted on at the Meeting will be available on SEDAR at ON BEHALF OF THE BOARD "Hugo Alves" CEO About Auxly Cannabis Group Inc. (TSX: XLY) Auxly is a leading Canadian consumer packaged goods company in the cannabis products market, headquartered in Toronto, Canada. Our mission is to help consumers live happier lives through quality cannabis products that they trust and love. Our vision is to be a global leader quality cannabis products. Learn more at and stay up to date at Twitter: @AuxlyGroup; Instagram: @auxlygroup; Facebook: @auxlygroup; LinkedIn: company/auxlygroup/. Neither Toronto Stock Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Toronto Stock Exchange) accepts responsibility for the adequacy or accuracy of this release. SOURCE Auxly Cannabis Group Inc.
Cision Canada
19-06-2025
- Business
- Cision Canada
Auxly Announces Non-Binding Agreement to Amend and Extend BMO Credit Facility and Settlement of all Amounts owing to Imperial Brands
TORONTO, June 19, 2025 /CNW/ - Auxly Cannabis Group Inc. (TSX: XLY) (OTCQB: CBWTF) (" Auxly" or the " Company"), a leading consumer packaged goods company in the cannabis products market, is pleased to announce that it has entered into two agreements that will strengthen its balance sheet, reduce debt, and support long-term growth: A non-binding agreement (the " Term Sheet") to amend and restate the Company's existing syndicated credit facility led by the Bank of Montreal (" BMO"), and An exchange agreement (the " Exchange Agreement") with Imperial Brands plc (" Imperial Brands") pursuant to which all amounts owing by the Company under the outstanding convertible debenture held by Imperial Brands (the " Debenture") will be settled in common shares of the Company (" Shares") and pre-funded warrants to purchase Shares. These transactions represent meaningful progress in the Company's ongoing efforts to strengthen its balance sheet. The restatement of the credit facility will enhance the Company's liquidity and provide increased flexibility to allocate capital toward strategic growth initiatives. Concurrently, the settlement of the Imperial Brands convertible debenture through the issuance of equity instruments will eliminate over $21 million of debt from the Company's balance sheet. This deleveraging will improve the Company's capital structure, reduce interest obligations and reinforce the Company's financial stability and long-term viability. "This refinancing marks a significant milestone for Auxly, resulting in a stronger, more resilient company," said Hugo Alves, CEO of Auxly. "These transactions will significantly reduce our debt, strengthen our balance sheet and give us the flexibility to invest in innovation and growth. The actions support our objective of achieving sustainable, profitable growth and creating long-term value for all of our stakeholders." Travis Wong, CFO of Auxly, added: "These transactions materially improve and simplify our capital structure. As a result of the refinancing, we anticipate the removal of the going concern uncertainty disclosure from our financial statements which is a clear reflection of our strengthened financial position and the growing stability of our operations." Amended Credit Facility The Company has entered into a non-binding agreement providing indicative terms for an amendment and restatement of Auxly Leamington's existing credit facility agreement with a syndicate of lenders led by BMO (the " Amended Credit Facility"). The key modifications to be provided under the Amended Credit Facility will include the following: Borrower: The Company will replace Auxly Leamington as the borrower. Facility Structure: Credit facility of $50.7 million consisting of: Term loan of $36.2 million Revolving facility of $10.0 million to be used for working capital and corporate requirements Existing equipment leases of $4.5 million Term: Two years with an option to extend for an additional year for $100,000. Updated Financial Covenants: Revised covenants which provide the Company with the flexibility to support its long-term growth strategy. Security: The Amended Credit Facility will be secured by all, or substantially all, of the assets of the Company and its subsidiaries (rather than primarily the assets and equity of Auxly Leamington as is the case under Auxly Leamington's existing credit facility). The Company and the lenders are working towards a definitive binding amendment and restatement agreement for the Amended Credit Facility, although there can be no assurance that a definitive amendment and restatement agreement with the lenders will be reached. Imperial Brands Convertible Debenture Settlement The Company and Imperial Brands have entered into the Exchange Agreement pursuant to which, and subject to the execution of the Amended Credit Facility on the terms provided in the Term Sheet: Imperial Brands will convert the remaining $1.0 million principal amount owed under the Debenture into 1,234,568 Shares at a conversion price of $0.81 per share in accordance with the terms of the Debenture (the " Principal Conversion"); Imperial Brands will convert approximately $1.39 million of accrued interest under the Debenture into Shares at a per-share conversion price of $0.0811, equal to the trailing 5-day volume-weighted average trading price of the Shares on the Toronto Stock Exchange (the " TSX") as of the date hereof (the " Interest Conversion"); and the Company will issue to Imperial Brands pre-funded warrants to acquire up to 90,883,618 Shares (the " Warrants") in exchange for a certain amount of additional interest, and all remaining accrued interest owed under the Debenture will be forgiven. Each Warrant will entitle an affiliate of Imperial Brands to purchase one Share for a nominal exercise price at any time prior to December 31, 2028 (the " Expiry Date"), provided that the number of Warrants exercisable for Shares (the " Underlying Shares") that may be exercised at any time prior to the Expiry Date will be limited to such number of Warrants for which the issuance of corresponding Underlying Shares would not result in Imperial Brands owning more than 19.9% of all the then outstanding Shares. Upon the completion of the Principal Conversion and the Interest Conversion (assuming such completion occurs), the Debenture will be cancelled and there will be no further amounts owing thereunder, and Imperial Brands will own and control approximately 19.9% of all issued and outstanding Shares. The execution of the Amended Credit Facility and the completion of the transactions contemplated by the Exchange Agreement are expected to occur on or about June 30, 2025, subject to the satisfaction of certain conditions precedent, including (in the case of the transactions contemplated by the Exchange Agreement) the receipt of the required approval from the TSX. ON BEHALF OF THE BOARD "Hugo Alves" CEO About Auxly Cannabis Group Inc. (TSX: XLY) Auxly is a leading Canadian consumer packaged goods company in the cannabis products market, headquartered in Toronto, Canada. Our mission is to help consumers live happier lives through quality cannabis products that they trust and love. Our vision is to be a global leader in quality cannabis products. Learn more at and stay up to date at Twitter: @AuxlyGroup; Instagram: @auxlygroup; Facebook: @auxlygroup; LinkedIn: company/auxlygroup/. Related Party Transaction Imperial Brands is considered a "related party" of the Company, and the transactions contemplated by the Exchange Agreement (collectively, the " Settlement") constitute a "related party transaction", as such terms are defined by Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions (" MI 61-101"). The completion of the Settlement is exempt from the minority shareholder approval and formal valuation requirements of MI 61-101 as, at the time of execution of the Exchange Agreement, the fair market value of the consideration to be paid pursuant to the Settlement amounted, in aggregate, to less than 25% of the market capitalization of the Company. Further details will be provided in the corresponding material change report of the Company in respect of the Settlement, a copy of which will be filed under the Company's issuer profile on SEDAR+ which is accessible at Required Early Warning Disclosure Prior to the Settlement, Imperial held 247,631,691 Shares (approximately 18.79% of the issued and outstanding Shares (calculated on a non-diluted basis)), and approximately $1 million principal amount of the Debenture. Following the Settlement (assuming it is completed), Imperial will hold 265,968,180 Shares (approximately 19.9% of the issued and outstanding Shares (calculated on a non-diluted basis)) and the Warrants, being pre-funded warrants to acquire up to 90,883,618 Shares. The aggregate consideration to be paid by Imperial for the Shares issuable upon the completion of the Principal Conversion and the Interest Conversion and the Warrants is approximately $9.8 million (which, together with the amount forgiven in the amount of approximately $11.8 milion, reflects the aggregate settlement of the indebtedness owed under the Debenture prior to the Settlement (assuming it is completed)). Imperial Brands intends to review its investment in the Company on a continuing basis and may, subject to the terms of the second amended and restated investor rights agreement between Imperial Brands and the Company dated March 28, 2024, purchase or sell Shares, either on the open market or in private transactions, or further exercise its conversion rights under the Warrants in the future, in each case, depending on a number of factors, including general market and economic conditions and other factors and conditions Imperial Brands deems appropriate. Imperial Brands may formulate other purposes, plans or proposals regarding the Company or any of its securities or may change its intention with respect to any of the foregoing. An early warning report will be filed by Imperial Brands with applicable Canadian securities regulatory authorities. To obtain a copy of the early warning report, please contact Matthew Brace at +44 (0)117 963 6636. Notice Regarding Forward Looking Information: This news release contains certain "forward-looking information" within the meaning of applicable Canadian securities law. Forward-looking information is frequently characterized by words such as "plan", "continue", "expect", "project", "intend", "believe", "anticipate", "estimate", "may", "will", "potential", "proposed" and other similar words, or information that certain events or conditions "may" or "will" occur. This information is only a prediction. Various assumptions were used in drawing the conclusions or making the projections contained in the forward-looking information throughout this news release. Forward-looking information includes, but is not limited to: the execution of the Amended Credit Facility and the anticipated timing thereof; the anticipated benefits of the Amended Credit Facility and the timing thereof; the completion of the Settlement (and any portion thereof) and the anticipated timing thereof; the issuance of Underlying Shares in connection with the potential future exercise of Warrants; the anticipated benefits of the Settlement and the timing thereof; the Company's execution of its product development and commercialization strategy; consumer preferences; Imperial Brands' intentions to review its investment in the Company on an ongoing basis; political change; future legislative and regulatory developments involving cannabis and cannabis products; and competition and other risks affecting the Company in particular and the cannabis industry generally. A number of factors could cause actual results to differ materially from a conclusion, forecast or projection contained in the forward-looking information included in this release including, but not limited to, whether: the expected benefits of the execution of the Amended Credit Facility and/or the Settlement (or any portion thereof) materialize in the manner expected, or at all; there is acceptance and demand for current and future Company products by consumers and provincial purchasers; and general economic, financial market, legislative, regulatory, competitive and political conditions in which the Company operates will remain the same. Additional risk factors are disclosed in the annual information form of the Company for the financial year ended December 31, 2024 dated March 20, 2025 and other documents that the Company files with Canadian securities regulatory authorities from time to time. New factors emerge from time to time, and it is not possible for management to predict all of those factors or to assess in advance the impact of each such factor on the Company's business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking information. The forward-looking information in this news release is based on information currently available and what management believes are reasonable assumptions. Forward-looking information speaks only to such assumptions as of the date of this release. Readers should not place undue reliance on forward-looking information contained in this news release. The forward-looking information contained in this release is expressly qualified by the foregoing cautionary statements and is made as of the date of this release. Except as may be required by applicable securities laws, the Company does not undertake any obligation to publicly update or revise any forward-looking information to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results, or otherwise. SOURCE Auxly Cannabis Group Inc.
Globe and Mail
02-06-2025
- Business
- Globe and Mail
Auxly Announces Annual General Meeting of Shareholders
TORONTO , /CNW/ - Auxly Cannabis Group Inc. (TSX: XLY) (OTCQB: CBWTF) (" Auxly" or the " Company") announced today that it will hold its Annual General Meeting of Shareholders (the " Meeting") on Monday, June 30, 2025 at 10:00 a.m. EST at the offices of McCarthy Tétrault LLP, Suite 5300, TD Bank Tower, Toronto, Ontario M5K 1E6. The venue has limited seating, as such, shareholders who wish to attend in person will be required to pre-register with the Company by emailing IR@ at least 48 hours in advance of the Meeting. Early registration is encouraged. To allow shareholders to follow the conduct of the Meeting, the Company is providing an audio teleconference that can be used by participants to listen to the Meeting in real time. Teleconference Details Date: Monday June 30, 2025 Time: 10:00 a.m. EST . Please dial in at least 10 minutes prior to the start time. North American Toll Free: 1-888-699-1199 Audio Webcast URL: Please note that shareholders will not be entitled to vote at, or otherwise participate in, the Meeting by way of teleconference or other electronic means, and so we encourage shareholders to vote in advance of the Meeting in accordance with the instructions provided in the materials for the Meeting, including the Management Information Circular, which is available on SEDAR + as well as the Company's website. ON BEHALF OF THE BOARD "Hugo Alves" CEO About Auxly Cannabis Group Inc. (TSX: XLY) Auxly is a leading Canadian consumer packaged goods company in the cannabis products market, headquartered in Toronto, Canada . Our mission is to help consumers live happier lives through quality cannabis products that they trust and love. Our vision is to be a leader in branded cannabis products that deliver on our consumer promise of quality, safety and efficacy. Learn more at and stay up to date at Twitter: @AuxlyGroup; Instagram: @auxlygroup; Facebook: @auxlygroup; LinkedIn: company/auxlygroup/. Neither Toronto Stock Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Toronto Stock Exchange) accepts responsibility for the adequacy or accuracy of this release.
Cision Canada
15-05-2025
- Business
- Cision Canada
Auxly Reports 2025 First Quarter Results
TORONTO, May 15, 2025 /CNW/ - Auxly Cannabis Group Inc. (TSX: XLY) (OTCQB: CBWTF) (" Auxly" or the " Company") a leading consumer packaged goods company in the cannabis products market, today released its financial results for the three months ended March 31, 2025. These filings and additional information regarding Auxly are available for review on SEDAR at Financial highlights for the first quarter ended March 31, 2025: Net revenues of $32.7 million, an increase of 29% compared to the same period in 2024. Gross Margin on Finished Cannabis Inventory Sold 1 of 48%, an increase of 1,000 bps or 26%, compared to the same period in 2024. SG&A of $9.7 million, an increase of 12% compared to the same period in 2024. Adjusted EBITDA 1 of $7.4 million, or 23% of net revenue, an increase of 232% compared to the same period in 2024. Cash flow from operations of $2.0 million and cash at quarter end totalled $17.1 million. Reduced debt 1 by another 5% from the end of 2024. Commercial highlights for the first quarter ended March 31, 2025: #4 largest Canadian Licensed Producer with market share of 5.8% at quarter end 2. Back Forty exited the quarter as the #1 cannabis brand in Canada. Launched new cultivar Chemzilla in Ontario which rose to become the #1 SKU in the 14g flower category, reinforcing the strength of the Back Forty brand. Maintained a leadership position in the competitive vapour category, holding ten of the top fifteen all-in-one SKU positions nationally. Back Forty remained the #1 non-infused pre-roll brand in Ontario, supported by the launch of high THC cultivars Lemon Diesel and Pine Tar Kush. Management Commentary Hugo Alves, CEO of Auxly, commented: "We are pleased to report another exceptional quarter of financial and commercial performance, highlighted by a 29% year-over-year increase in net revenue, and a 232% improvement in adjusted EBITDA. These results reflect the successful execution of our strategy and our focus on teamwork, innovation, and operational efficiency. We continued to see strong growth in distribution, driven in particular by the expanding reach of our flower portfolio. As we continue to strengthen our balance sheet and reduce debt, we are building a solid foundation for long-term leadership and sustainable growth. The future of Auxly is bright and we're just getting started." Financial Highlights and Key Performance Indicators For the three months ended: March 31, March 31, (000's) 2025 2024 Change % Change Net revenues $ 32,669 $ 25,241 $ 7,428 29 % Gross margin on finished cannabis inventory sold* 15,831 9,569 6,262 65 % Gross margin on finished cannabis inventory sold (%)* 48 % 38 % 10 % 26 % Net income/(loss) 12,111 (26,012) 38,123 147 % Adjusted EBITDA* 7,433 2,240 5,193 232 % Weighted average shares outstanding 1,310,291,543 1,016,839,478 293,452,065 29 % As at: March 31, December 31, (000's) 2025 2024 Change % Change Cash and equivalents $ 17,112 $ 18,356 $ (1,244) -7 % Total assets 264,820 261,530 3,290 1 % Debt* 52,091 55,683 (2,592) -5 % *Non-IFRS or supplementary financial measure. Refer to the Non-GAAP Measures section in the MD&A for definitions. Results of Operations (000's) Three months ended: March 31, 2025 March 31, 2024 Revenues Revenue from sales of cannabis products $ 49,212 $ 38,357 Excise taxes (16,543) (13,116) Total Net Revenues 32,669 25,241 Cost of Sales Costs of finished cannabis inventory sold 16,838 15,672 Inventory impairment 123 456 Gross profit/(loss) excluding fair value items 15,708 9,113 Unrealized fair value gain/(loss) on biological transformation 12,312 2,773 Realized fair value gain/(loss) on inventory (9,337) (2,435) Gross profit 18,683 9,451 Expenses Selling, general, and administrative expenses 9,672 8,621 Equity-based compensation 1,505 1,927 Depreciation and amortization 1,296 1,230 Interest and accretion expense 2,147 6,868 Total expenses 14,620 18,646 Other incomes/(loss) Interest and other income 47 19 Gain/(loss) on settlement of assets and liabilities and other expenses 39 (634) Foreign exchange gain/(loss) (163) (210) Total other income/(loss) (77) (825) Net income/(loss) before income tax 3,986 (10,020) Income tax recovery/(expense) 8,125 (15,992) Net income/(loss) $ 12,111 $(26,012) Adjusted EBITDA $ 7,433 $ 2,240 Net income/(loss) per common share – basic and diluted ($) $ 0.01 $ (0.03) Weighted average shares outstanding – basic 1,310,291,543 1,016,839,478 Weighted average shares outstanding – diluted 1,365,880,272 1,016,839,478 Net Revenues For the three months ended March 31, 2025, net revenues were $32.7 million as compared to $25.2 million during the same period in 2024, representing increases of 29%. Revenues for the three months ended March 31, 2025 were comprised of approximately 63% (2024 – 59%) in sales of dried flower and pre-roll Cannabis Products, with the remainder from oils and Cannabis 2.0 Product sales. During the first quarter of 2025, approximately 75% (2024 – 76%) of cannabis sales originated from sales to British Columbia, Alberta and Ontario. Since 2024, the Company had sales in all Canadian provinces and the Yukon and Northwest Territories. Gross Profit Auxly realized a gross profit of $18.7 million for the three months ended March 31, 2025, resulting in a 57% Gross Profit Margin as compared to $9.5 million or 37% during the same periods in 2024. The Gross Margin on Finished Cannabis Inventory Sold for the three months ended March 31, 2025 improved to 48% versus 38% in 2024 as a result of the streamlining and improvements made in our manufacturing process to reduce operating costs and increased demand and pricing of adult-use recreational market and bulk flower products. Higher cultivation yields lowered costs, and efficiency improvements at our Auxly Charlottetown facility further reduced costs. Realized and unrealized fair value gains and losses reflect accounting treatments associated with Auxly Leamington cultivation activities and sales and are influenced by changes in production, sales and net realizable value assumptions. Inventory impairments during the first quarter of 2025 of $0.1 million were associated with charges related to reductions in net realizable value of dried cannabis under the Company's product specifications, a decrease of $0.3 million from the comparative period. Total Expenses Selling, general and administrative expenses ("SG&A") are comprised of wages and benefits, office and administrative, professional fees, business development, and selling expenses. SG&A expenses were $9.7 million in the first quarter of 2025, $1.1 million or 12% higher than the same period in 2024. The increase in SG&A was primarily driven by investments to support higher sales. Wages and benefits were $4.7 million for the quarter, as compared to $4.3 million during the same period in 2024. Wages and benefits increased compared to 2024 due to an increase in bonus accruals which was partially offset by cost savings from the streamlining of operations and support staff as a result of a more focused product portfolio. Office and administrative expenses were $1.6 million for the quarter, $0.2 million higher than the same period in 2024. The Company continues to actively control overhead spend in the organization while growing sales. Auxly's professional fees were $0.3 million during the first quarter of 2025, $0.2 million lower than 2024. Professional fees incurred primarily related to accounting fees, regulatory matters, reporting issuer fees, and legal fees associated with certain corporate activities and as a result can fluctuate significantly from one period to the next. Business development expenses were $nil for three months ended March 31, 2025 as compared to $0.1 million for the same period in 2024. These expenses primarily relate to business development and travel related expenses. Selling expenses were $3.1 million for the three months ended March 31, 2025, an increase of $0.7 million from the same periods in 2024. The increase in expenditures was primarily as a result of investments in marketing initiatives and higher Health Canada fees related to higher revenues. Equity-based compensation for the quarter was $1.5 million, primarily driven by the Cash Settled RSUs granted in 2023 and RSUs issued in 2024. During the same period in 2024, equity-based compensation was $1.9 million. Depreciation and amortization expenses were $1.3 million for the three months ended March 31, 2025, representing an increase of $0.1 million over the same period in 2024 as a result of capital investments made during 2024. Interest expenses were $2.2 million for the three months ended March 31, 2025, a decrease of $4.7 million over the same period in 2024. The decrease in expenses were primarily a result of the conversion of Imperial Debentures into Shares and lower interest expense on adjustable-rate debt. Interest expense includes accretion on the convertible debentures and interest paid in kind on the Imperial Debenture. Interest payable in cash was approximately $1.8 million for the first quarter of 2025, $0.5 million lower than the same period in 2024 as a result of lower principal amounts outstanding on debt instruments. Total Other Incomes and Losses Total other incomes and losses was a net loss of $0.1 million for the three months ended March 31, 2025, compared to a net loss of $0.8 million in the same period in 2024. The other incomes and losses in the first quarter of 2025 were primarily driven by foreign exchange losses. The other incomes and losses in the first quarter of 2024 were primarily driven by the loss on the adjustment to the provision related to the claim filed by Kindred Partners Inc. and foreign exchange losses. Net Income and Loss Net income for the three months ended March 31, 2025 was $12.1 million, representing a net income of $0.01 per share on a basic and diluted basis. The net income of $12.1 million in 2025 includes $8.1 million of deferred tax recovery related to the change in estimated useful life of intangible assets. The net loss of $26.0 million for the three months ended March 31, 2024 included $16.0 million of deferred tax expense on the conversion of Imperial Debenture into Shares. Excluding the deferred tax recovery related to the change in estimated useful life of intangible assets in 2025 and the deferred tax expense on the conversion of Imperial Debenture into Shares in 2024, net income increased by $14.0 million primarily due to improved gross profits and reduction in interest and accretion expenses. Adjusted EBITDA Adjusted EBITDA was $7.4 million for the quarter, an improvement of $5.2 million when compared to $2.2 million during the same period in 2024. Adjusted EBITDA for the three months ended March 31, 2025 improved primarily as a result of improved gross profits. Outlook The Company remains focused on achieving long-term, profitable growth by strengthening its leadership position in the Canadian cannabis market. Auxly consistently develops and commercializes products that resonate with Canadian consumers under trusted brands known for quality and consistency and will continue to execute against its strategy of focused innovation, enhanced product distribution, operational efficiency, and debt reduction. In the quarter, the Company reported net revenues of $32.7 million, a 29% increase year-over-year, driven by strong performance across key product categories. Liquid Imagination 28G remained a top-selling dried flower SKU, while the launch of Chemzilla 14G supported flower portfolio diversification and product mix optimization. The Fire Breath cultivar, originally launched in late 2024 in Quebec and Ontario, has expanded distribution in British Columbia, Nova Scotia and PEI, aligning with our national growth strategy. The Company has continued to strengthen its position in the value segment through the expansion of milled flower offerings. The Company continues to defend its leadership position in the competitive vape category. During the quarter, the Company launched a new flavor within the Back Forty all-in-one vape line-up, which quickly became a top-selling SKU. This strong consumer uptake reflects the brand equity that the Company has built in the category, as consumers were eager to trial the new flavor offering. In the pre-roll category, the Company refreshed its product portfolio led by the successful launch of Lemon Diesel and Pine Tar Kush which drove incremental volumes. Gross margin on finished cannabis inventory sold improved to 48% in the quarter, compared to 38% in the same period of 2024, driven by higher cultivation yields, improved product pricing in the adult-use market, and a refined customer mix. SG&A expenses were $9.7 million, a 12% increase year-over-year, primarily reflecting strategic investments to support higher sales volumes, build brand equity, expand distribution networks, and deepen retail relationships — critical barriers to entry in a competitive market. Auxly remains committed to strengthening its balance sheet. During the quarter, the Company continued to reduce its debt and remained actively engaged with its creditors to manage liabilities and ensure working capital flexibility to fund future growth initiatives. The Company remains confident in its ability to deliver sustainable, profitable growth through a focus on innovation, operational excellence, and disciplined execution. By advancing its strategic priorities, Auxly aims to reinforce its leadership in the Canadian cannabis market, build a strong foundation for future global opportunities, and create long-term value for all stakeholders. Non- GAAP Measures Please see the Company's MD&A dated May 14, 2025, under "Non-GAAP Measures" for a further description of the following financial and supplementary financial measures. Financial Measures These are non-GAAP measures used in the cannabis industry and by the Company to assess operating performance removing the impacts and volatility of non-cash and other adjustments. The definition may differ by issuer. The Adjusted EBITDA reconciliation is as follows: (000's) Q2/23 Q3/23 Q4/23 Q1/24 Q2/24 Q3/24 Q4/24 Q1/25 Net income/(loss) $ (12,863) $ 32,621 $ (54,020) $(26,012) $ 2,002 $ 3,239 $ 4,423 $12,111 Interest and accretion expense 6,457 6,613 6,837 6,868 2,749 3,133 2,291 2,147 Interest and other income 20 (16) (22) (19) (140) (54) (27) (47) Income tax expense/(recovery) - - (3,238) 15,992 - - - (8,125) Depreciation and amortization included in cost of sales 911 1,151 1,084 1,292 1,780 1,382 1,338 1,274 Depreciation and amortization included in expenses 1,673 1,817 1,708 1,230 1,067 1,197 990 1,296 EBITDA (3,802) 42,186 (47,651) (649) 7,458 8,897 9,015 8,656 Impairment of inventory 1,459 3,233 5,109 456 473 674 729 123 Unrealized fair value loss/(gain) on biological transformation (4,713) (4,766) (2,481) (2,773) (8,817) (9,964) (11,073) (12,312) Realized fair value loss/(gain) on inventory 3,146 5,538 5,428 2,435 4,464 7,703 11,625 9,337 Restructuring and acquisition costs 86 29 131 - 655 (75) 271 - Equity-based compensation 377 707 148 1,927 701 1,324 1,103 1,505 Impairment of assets 2,588 - 37,118 - - - - - Non-recurring bad debt expense/(recovery) 780 360 - - - (123) - - (Gain)/loss on settlement of assets, liabilities and disposals (1,478) (46,887) 4,006 634 62 (183) (1,461) (39) Foreign exchange loss/(gain) 479 (283) 486 210 177 33 797 163 Adjusted EBITDA $ (1,078) $ 117 $ 2,294 $ 2,240 $ 5,173 $ 8,286 $ 11,006 $ 7,433 Supplementary Financial Measures Gross Margin on Finished Cannabis Inventory Sold "Gross Margin on Finished Cannabis Inventory Sold" is a supplementary financial measure and is defined as net revenues less cost of finished cannabis inventory sold divided by net revenues. Gross Profit Margin "Gross Profit Margin" is defined as gross profit divided by net revenues. Gross Profit Margin is a supplementary financial measure. Debt "Debt" is defined as current and long-term debt and is a supplementary financial measure. It is a useful measure in managing the Company's capital structure and financing requirements. ON BEHALF OF THE BOARD "Hugo Alves" CEO About Auxly Cannabis Group Inc. (TSX: XLY) Auxly is a leading Canadian consumer packaged goods company in the cannabis products market, headquartered in Toronto, Canada. Our mission is to help consumers live happier lives through quality cannabis products that they trust and love. Our vision is to be a leader in branded cannabis products that deliver on our consumer promise of quality, safety and efficacy. Learn more at and stay up to date at Twitter: @AuxlyGroup; Instagram: @auxlygroup; Facebook: @auxlygroup; LinkedIn: company/auxlygroup/. Notice Regarding Forward Looking Information: This news release contains certain "forward‐looking information" within the meaning of applicable Canadian securities law. Forward‐looking information is frequently characterized by words such as "plan", "continue", "expect", "project", "intend", "believe", "anticipate", "estimate", "may", "will", "potential", "proposed" and other similar words, or information that certain events or conditions "may" or "will" occur. This information is only a prediction. Various assumptions were used in drawing the conclusions or making the projections contained in the forward‐looking information throughout this news release. Forward‐looking information includes, but is not limited to: the proposed operation of Auxly, its subsidiaries and partners; the intention to grow the business, operations and existing and potential activities of Auxly; proposed timelines for the build‐out, expansion, licencing or commercialization of the Company's facilities and projects; the Company's execution of its innovative product development, commercialization strategy and expansion plans; the Company's intention to introduce innovative new cannabis products to the market and the timing thereof; the anticipated benefits of the Company's partnerships, research and development initiatives and other commercial arrangements; the expectation, timing and quantum of future revenues, Gross Margin on Finished Cannabis Inventory Sold, SG&A and of positive Adjusted EBITDA; expectations regarding the Company's expansion of sales, operations and investment into foreign jurisdictions; future legislative and regulatory developments involving cannabis and cannabis products; the timing and outcomes of regulatory or intellectual property decisions; the ability of the Company to maintain and grow its market share; the relevance of Auxly's subsidiaries' current and proposed products with provincial purchasers and consumers; consumer preferences; political change; competition and other risks affecting the Company in particular and the cannabis industry generally. A number of factors could cause actual results to differ materially from a conclusion, forecast or projection contained in the forward‐looking information in this release including, but not limited to, whether: the Company will be able to execute on its business strategy or achieve its goals; Auxly's subsidiaries are able to maintain the necessary governmental and regulatory authorizations to conduct business; the Company is able to successfully manage the integration of its various business units with its own; the Company's subsidiaries obtain and maintain all necessary governmental and regulatory permits and approvals for the operation of their facilities and the development of cannabis products, and whether such permits and approvals can be obtained in a timely manner; the Company will be able to successfully launch new product formats and enter into new markets; there is acceptance and demand for current and future Company products by consumers and provincial purchasers; the Company will be able to increase and maintain revenues, maintain positive Adjusted EBITDA, and/or achieve and maintain its target Gross Margin on Finished Cannabis Inventory Sold; risks relating to the overall macroeconomic environment, which may impact customer spending, the Company's costs and margins, including tariffs (and related retaliatory measures), the levels of inflation, and interest rates; and general economic, financial market, legislative, regulatory, competitive and political conditions in which the Company and its subsidiaries and partners operate will remain the same. Additional risk factors are disclosed in the annual information form of the Company for the financial year ended December 31, 2024 dated March 20, 2025. New factors emerge from time to time, and it is not possible for management to predict all of those factors or to assess in advance the impact of each such factor on the Company's business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward‐looking information. The forward‐looking information in this release is based on information currently available and what management believes are reasonable assumptions. Forward‐ looking information speaks only to such assumptions as of the date of this release. In addition, this release may contain forward‐looking information attributed to third party industry sources, the accuracy of which has not been verified by the Company. The forward‐looking information is being provided for the purposes of assisting the reader in understanding the Company's financial performance, financial position and cash flows as at and for periods ended on certain dates and to present information about management's current expectations and plans relating to the future, and the reader is cautioned that such forward‐ looking information may not be appropriate for any other purpose. Readers should not place undue reliance on forward‐looking information contained in this release. The forward‐looking information contained in this release is expressly qualified by the foregoing cautionary statements and is made as of the date of this release. Except as may be required by applicable securities laws, the Company does not undertake any obligation to publicly update or revise any forward‐ looking information to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results, or otherwise. SOURCE Auxly Cannabis Group Inc.
