How Will the Market Respond to News that Aurora Cannabis, Inc. (OTCMKTS:ACBFF) Announces $15 Million Private Placement of Convertible Debentures?

Aurora Cannabis, Inc. (OTCMKTS:ACBFF) announced that it has reached an agreement with Canaccord Genuity, Corp.

VANCOUVER , Sept. 16, 2016 /CNW/ – Aurora Cannabis Inc. (the “Company” or “Aurora” or the “Issuer”) (CSE:ACB) (ACBFF) (Frankfurt:  21P; WKN: A1C4WM) announced today that it has entered into an agreement with Canaccord Genuity Corp. (the “Agent”) pursuant to which the Company will issue on a private placement basis $15,000,000 aggregate principal amount of unsecured convertible debentures (the “Debentures”) at a price of $1,000 per principal amount of Debentures (the “Offering”).

The Debentures will bear interest from the date of closing at 10.0% per annum, payable semi-annually on June 30 and December 31 of each year. The Debentures will have a maturity date of 18 months from the Closing Date of the Offering (the “Maturity Date”).

“The proceeds of the offering will strengthen our balance sheet and will be used towards reducing certain debt obligations and general working capital purposes,” stated Terry Booth , CEO of Aurora.  “We have a large number of initiatives on the go that ensure the Aurora standard will remain the industry benchmark in terms of customer outreach and experience, such as our recently launched app.  With these funds, we continue to build value into the Company, both today and for the future.”

The Debentures will be convertible at the option of the holder into common shares of the Issuer (the “Common Shares”) at any time prior to the close of business on the Maturity Date. Subject to the approval of the Canadian Securities Exchange (“CSE”), the Debentures will be convertible into Common Shares at a conversion price of $1.15 per common share (the “Conversion Price”). Holders converting their Debentures will receive accrued and unpaid interest thereon, up to, but not excluding, the date of conversion.

If, following the closing of the Offering and prior to the Maturity Date, the VWAP of the Common Shares on the CSE for 10 consecutive trading days equals or exceeds $2.00 , the Issuer may force conversion of all of the principal amount of the Debenture at the Conversion Price, upon giving Debenture holders 30 days advance written notice, in accordance with the conversion terms.

Closing of the Offering is expected to occur on or about September 23, 2016 (the “Closing Date”). The Offering is in the form of a best efforts private placement (i) in Canada to “accredited investors” within the meaning of National Instrument 45-106 and other exempt purchasers in each province of Canada , as agreed upon by the Issuer and the Lead Agent, (ii) in the United States only to Qualified Institutional Buyers (within the meaning of Rule 144A), and in each case in compliance with the securities laws of the applicable states of the United States , to investors that the Agent has reasonable grounds to believe and does believe are Qualified Institutional Buyers, and (iii) outside Canada and the United States on a basis which does not require the qualification or registration of any of the Debentures or the Issuer.

On behalf of the Board of Directors,


Terry Booth


Original Source


Potential investors in Aurora Cannabis, Inc. (OTCMKTS:ACBFF) should be looking at the current and historical short data in order to get a glimpse of where the market believes the stock might be headed.  According to the most recent information, there are 6600 total short interest.  Given the stock’s average daily volume of 170680, this results in N/A days to cover.  In looking at the total shares short in respect to the total outstanding share total of 135690000, yields a 0.00005% of total shares that are short.  Compared to last month, this is a -80.30 change in total short interest.

When investors engage in short selling or “shorting a stock”, they actually borrow shares from an existing owner, sell the borrowed shares at market price, and take the cash.  The short sellers then promise to replace the stock in the future and makes dividend payments out of their own pockets to cover the dividend income that is no longer exists on the original, now borrowed and sold, shares.

They hope that the stock price will fall or that the company will fail and go bankrupt, leading the equity holders to ruin.  The short sellers will then buy the stock back at a much lower price and replace the borrowed shares, pocketing the difference.

Shorting a stock can be very risky if the price doesn’t decline like planned and, in fact, increases.  It’s important for any investor to understand the dangers and potentially catastrophic financial losses of short selling.

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Aurora Cannabis, Inc. (OTCMKTS:ACBFF) shares closed the most recent session at $1.04, moving from the previous open of $0.02.  This is compared to the stock’s 52-week high of 1.12 and 52-week low of 0.19.  Is now the right time to take stake in the 122800000 market cap company?

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Disclaimer: The views, opinions, and information expressed in this article are those of the authors and do not necessarily reflect the official policy or position of any company stakeholders, financial professionals, or analysts. Examples of analysis performed within this article are only examples. They should not be utilized to make stock portfolio or financial decisions as they are based only on limited and open source information. Assumptions made within the analysis are not reflective of the position of any analysts or financial professionals.

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