Auxly Cannabis Group Inc. (TSX.V: XLY) (OTCQX:
CBWTF) (“
Auxly” or the
“
Company”) today announced that its transaction
(the “
Transaction”) with Imperial Brands PLC
(“
Imperial Brands”) has closed. As announced
on July 25, 2019, Imperial Brands invested C$123 million by way of
a debenture pursuant to the Transaction, which is convertible into
19.9% ownership of Auxly. Imperial Brands grants Auxly global
licenses to its vaping technology, access to its vapor innovation
business, Nerudia, and will use Auxly as its exclusive partner for
the future development, manufacture, commercialization, sale and
distribution of cannabis products of any kind anywhere in the
world.
“We are delighted to announce the closing of
this transaction to formally mark the start of our strategic
partnership with Imperial Brands,” said Hugo Alves, Chief Executive
Officer of Auxly. “We believe there is considerable opportunity for
growth and value creation for both companies. We are looking
forward to working with the incredibly strong team at Imperial
Brands as we prepare to launch our portfolio of branded derivative
products, formulated and manufactured at our subsidiary, Dosecann,
later this year. We welcome Imperial Brands' experience and
expertise on our Board and on our Safety Committee to help ensure
that all of our branded products are produced to Dosecann's
exacting standards of quality, safety and efficacy and earn the
trust of Canadian consumers."
In connection with the closing of the
Transaction, Auxly’s Board has added Conrad Tate as a new director
and John Downing as a non-voting observer. They join Auxly’s
existing directors: Chuck Rifici; Hugo Alves; Troy Grant; and
Genevieve Young.
Conrad Tate, Corporate Development
Director, Imperial Brands
Conrad joined Imperial Brands in 1998 having
previously worked for a large regional law firm. He has held a
number of senior legal and commercial roles in the business and was
appointed Corporate Development Director in 2010. Conrad has played
a key role in a number of significant transactions over the years,
including the acquisition of Altadis, Commonwealth Brands, assets
purchased by Imperial as part of the Reynolds American takeover of
Lorillard and Nerudia. He has led Imperial Brands’ investigation,
analysis and entry into the legal cannabis sector and is currently
leading a major divestment program for Imperial Brands, which will
realize proceeds of up to £2 billion.
John Downing, Company Secretary,
Imperial Brands
John, a qualified solicitor, joined Imperial
Brands in 2005 having previously worked for the law firm
Linklaters. He has had a number of senior legal roles in
Imperial Brands including playing a leading role in the Altadis
acquisition and becoming Head of Group Legal in 2010. He has
considerable experience in managing key corporate projects related
to financing, business development and other commercial
matters. In addition to his Group Company Secretary role at
Imperial Brands, John also has responsibility for the Group’s
governance, Code of Conduct, security and information
security.
“I’m thrilled to be closing this transaction
with Auxly, a dynamic, highly skilled organization that has all the
ingredients required for delivering success in the branded
derivatives market and beyond,” said Conrad Tate, Corporate
Development Director, Imperial Brands. “We’re excited by the
opportunities this partnership offers and look forward to working
with Auxly to build its business and realize its significant future
growth potential.”
ON BEHALF OF THE BOARD
"Hugo Alves" CEO
About Auxly Cannabis Group Inc. (TSX.V:
XLY)
Auxly is an international cannabis company
dedicated to bringing innovative, effective, and high-quality
cannabis products to the medical, wellness and adult-use markets.
Auxly's experienced team of industry first-movers and enterprising
visionaries has secured a diversified supply of raw cannabis,
strong clinical, scientific and operating capabilities, and leading
product research and development infrastructure in order to create
trusted products and brands in an expanding global market.
Learn more at www.auxly.com and stay up to date at Twitter:
@AuxlyGroup; Instagram: @auxlygroup; Facebook:
@auxlygroup; LinkedIn: company/auxlygroup/.
About Imperial Brands
Imperial Brands is an international fast-moving
consumer goods company that continually evolves to embrace changing
market dynamics and develop new consumer experiences. Its Next
Generation Products prioritizes the fast-growing vapor segment with
innovative products and proprietary technologies, including its
pioneering brand, blu.
Auxly Investor Relations:
For further information, please contact our
Investor Relations Team: Email: IR@auxly.com Phone:
1.833.695.2414
Auxly Media Enquiries
(only):
For media enquiries or to set up an interview
please contact:Sarah Bain, VP External Affairs Email:
sarah@auxly.com Phone: 613.230.5869
Forward-Looking Statements
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: anticipated use of proceeds, Auxly's execution of its
innovative product development and commercialization strategy, the
anticipated benefits of the Transaction and the strategic
relationship with Imperial Brands, future legislative and
regulatory developments involving cannabis and cannabis products,
political change in Canada and globally, competition and other
risks affecting Auxly 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: the risk that synergies and expected
collaboration from the transaction may not be fully realized or may
take longer to realize than expected; consumer demand for cannabis
products in Canada and globally; Auxly's subsidiaries and partners
are able to obtain and maintain the necessary regulatory
authorizations to conduct business; and general economic, financial
market, legislative, regulatory, competitive and political
conditions in which Auxly and its subsidiaries and partners operate
will remain the same. Additional risk factors are disclosed in the
revised annual information form of Auxly for the financial year
ended December 31, 2017 dated May 24, 2018.
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 Auxly'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 Auxly.
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, Auxly 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.
Auxly’s head office is located at 1055 West
Hastings Street, Suite 2200, Vancouver, BC V6E 2E9. Imperial
Brand’s head office is located at 121 Winterstoke Road, Bristol, UK
BS3 2LL.
An affiliate of Imperial Brands acquired the
convertible debenture and assuming the convertible debenture is
exercised in full as of the date hereof, Imperial Brands and its
affiliates would have beneficial ownership of 151,668,018 common
shares of Auxly (approximately 19.99% of the issued and outstanding
common shares calculated on a non-diluted basis).
Imperial Brands entered into the subscription
agreement as part of a strategic investment in Auxly. Imperial
Brands intends to review its investment in the Corporation on a
continuing basis and may, subject to the terms of the Transaction
agreements, purchase or sell common shares, either on the open
market or in private transactions, or exercise the convertible
debenture 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.
An amended 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 Daniel Glavin at 416-869-5500.
Neither TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
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