09:05 AM EDT, 06/19/2025 (MT Newswires) -- Auxly Cannabis Group ( CBWTF ) , a consumer packaged goods company in the cannabis products market, said Thursday that it signed two agreements to strengthen its balance sheet, reduce debt and support long-term growth.

Auxly said it signed a nonbinding agreement to amend and restate its $50.7 million syndicated credit facility led by the Bank of Montreal. The facility has a two-year term with an option to extend for another year. It includes revised covenants that provide the company with the flexibility to support its long-term growth strategy.

The company also signed an agreement to settle amounts under its outstanding convertible debenture held by Imperial Brands by issuing shares and pre-funded warrants. The transaction will eliminate over $21 million of debt from Auxly's balance sheet, the company said.

"This refinancing marks a significant milestone for Auxly, resulting in a stronger, more resilient company," Auxly CEO Hugo Alves said.

Under the terms of an exchange agreement, 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. It will also convert about $1.39 million of accrued interest under the debenture into shares at $0.0811 per share.

Auxly will also issue pre-funded warrants to acquire up to 90,883,618 shares that can be exercised by Dec. 31, 2028. Imperial Brands will own and control about 19.9% of all issued and outstanding shares in Auxly following the conversions.

"These transactions will significantly reduce our debt, strengthen our balance sheet and give us the flexibility to invest in innovation and growth," Alves said. "The actions support our objective of achieving sustainable, profitable growth and creating long-term value for all of our stakeholders."

Auxly's share price fell 5.9% on Wednesday to $0.08 on the TSX.