Full Press Release Details
AURORA CANNABIS INC.
INFORMATION NOTICE - CONSOLIDATION
careful consideration and pursuant to section 54(1) of the Business Corporations Act (British Columbia) (the "BCBCA"),
the board of directors of the Corporation (the "Board") approved on April 12, 2020 a resolution to, among other
things, consolidate the share capital of the Corporation (the "Consolidation Resolution"). The Consolidation
Resolution authorized management of the Corporation to effect the consolidation (the "Consolidation") of the
common shares of the Corporation (the "Common Shares") on the basis of one (1) post-consolidation Common Share
for twelve (12) pre-consolidation Common Shares (the "Consolidation Ratio") to be effective on or about May
11, 2020 (the "Effective Date"). Further, pursuant to section 83 of the Business Corporations Act (British
Columbia), each fractional Common Share remaining after completion of the Consolidation that is less than half (½)
of a whole Common Share will be cancelled without consideration to the holders thereof and each fractional Common Share that is
at least half (½) of a whole Common Share will be increased to one whole Common Share.
The Corporation will send to registered
holders of Common Shares (the "Registered Holders") a letter of transmittal (the "Letter of Transmittal")
that may be used by such Registered Holders to exchange their pre-Consolidation Common Share certificates for certificates in the
capital of the Corporation representing the consolidated number of Common Shares. If a shareholder of the Corporation (a "Shareholder")
holds his, her or its Common Shares with such a bank, broker or other nominee and if such Shareholder has any questions in this
regard, such Shareholder is encouraged to contact his, her or its nominee for further instructions, including obtaining physical
certificates representing post-Consolidation Common Shares.
The Share Consolidation
The Board believes, for the reasons listed
below, that a consolidation of the current number of outstanding Common Shares may be of benefit to the Corporation.
Reasons for the Consolidation
On April 8, 2020, the Corporation received
notification from the New York Stock Exchange (the "NYSE") that, as a result of its Common Share price falling
below an average of US$1.00 for a consecutive 30 trading-day period, it is not in compliance with one of the NYSE's continued
listing standards. The Corporation expects the Consolidation to restore compliance with the NYSE's continued listing standards.
In addition, the Consolidation may increase the trading price of the Common Shares, which the Board believes will enhance their
marketability and may increase the liquidity of the Common Shares if implemented at an appropriate time. The Board also believes
that the Consolidation could result in broader interest and demand from those institutional and other investors that have internal
guidelines and policies discouraging or prohibiting investments in lower priced securities.
Non-compliance with the NYSE price listing
standard does not affect the continued listing and trading of the Common Shares on the Toronto Stock Exchange (the "TSX"),
the Corporation's business operations or its reporting requirements to any regulatory authorities, nor does it breach or
cause an event of default under any of the Corporation's agreements with its lenders.
The Consolidation will be implemented
on the Effective Date with no further action required by registered holders of Common Shares. If the Board determines prior to
the Effective Date it is not in the best interests of the Corporation to complete the Consolidation, it will make such a determination
and promptly disseminate a public announcement.
In proposing the Consolidation Ratio
in connection with the Consolidation, the Board has considered, among other things, factors such as:
Certain Risks Associated with
The effect of the Consolidation on the
per-share market price of the Common Shares cannot be predicted with any certainty, and the record of similar share consolidations
for corporations similar to the Corporation is varied. There can be no assurance that the total market capitalization of the Common
Shares of the Corporation (the aggregate value of all Common Shares at the then market price) immediately after the Consolidation
will be equal to or greater than the total market capitalization immediately before the Consolidation. In addition, there can be
no assurance that the per-share market price of the Common Shares following the Consolidation will remain higher than the per-share
market price of the Common Shares immediately before the Consolidation or equal or exceed the direct arithmetical result of the
Consolidation. Both the total market capitalization of the Corporation and the adjusted per-share market price of Common Shares
following the Consolidation may be lower than the Corporation's total market capitalization and per-share market price of
Common Shares before the Consolidation took effect. In addition, a decline in the market price of the Common Shares after the Consolidation
may result in a greater percentage decline than would occur in the absence of a Consolidation, and the liquidity of the Common
Shares could be adversely affected. Further, there can be no assurance that, if the Consolidation is implemented, the margin terms
associated with the purchase of Common Shares will improve or that the Corporation will be successful in receiving increased attention
from institutional investors. In addition to the above, the per-share market price of the Common Shares will continue to be based
on the Corporation's financial and operating results, the Corporation's available capital and liquidity resources,
the development of the Corporation's product pipeline, market conditions, including the general effect of the novel COVID-19
coronavirus on financial markets and the cannabis industry, the market perception of the cannabis industry, changes in laws and
regulations and other factors, which are unrelated to the numbers of Common Shares outstanding.
The Consolidation is subject to the satisfaction
of the requirements of the NYSE and the TSX.
Principal Effects of the Consolidation
As of the date of this Information Notice,
on a pre-Consolidation basis, the Corporation had 1,313,494,990 Common Shares issued and outstanding and, in addition to Common
Shares issuable under the Corporation's equity compensation plans, the Corporation had the following securities issued and
Following the completion of the proposed
Consolidation, the number of Common Shares that would remain issued and outstanding would be 109,457,915, subject to adjustment
due to the elimination of fractional shares. The Corporation is also authorized to issue an unlimited number of Class "A"
Shares with a par value of $1.00 each and is authorized to issue an unlimited number of Class "B" Shares with a par
value of $5.00 each. There were no Class "A" Shares and no Class "B" Shares issued and outstanding as of
the date of this Information Notice.
Certain proportionate adjustments will
be made to outstanding warrants upon exercise thereof and to the 2024 Notes upon conversion thereof, in accordance with the terms
and conditions governing such securities and summarized below:
As the Corporation currently has an unlimited
number of Common Shares authorized for issuance, the Consolidation will not have any effect on the number of Common Shares that
remain available for future issuances. The Common Shares reserved for issuance pursuant to the Corporation's Stock Option
Plan would also be consolidated on a proportionate basis. The Corporation's other share-based compensation schemes, the RSU
Plan and the DSU Plan, would have all such outstanding awards similarly consolidated.
The Consolidation may result in some
Shareholders owning "odd lots" of Common Shares on a post-Consolidation basis. Odd lots may be more difficult to sell,
or require greater transaction costs per Common Share to sell, than Common Shares in "board lots". Brokerage commissions
and other costs of transactions in odd lots are often higher than the costs of transactions in "roundlots" of even
multiples of "board lots".
The Consolidation will not give rise
to a capital gain or loss under the Income Tax Act (Canada) for a Shareholder who holds such Common Shares as capital property.
The adjusted cost base to the Shareholder of the post-Consolidation Common Shares immediately after the Consolidation will be equal
to the aggregate adjusted cost base to the Shareholder of the pre-Consolidation Common Shares immediately before the Consolidation.
Notice of Consolidation and Letter
Assuming the implementation of the Consolidation,
the Corporation or its registrar and transfer agent will give written notice thereof to all the Registered Shareholders and will
provide them with the Letter of Transmittal to be used for the purpose of surrendering such Registered Shareholders' certificates
representing the pre-Consolidation Common Shares to the Corporation's registrar and transfer agent in exchange for new certificates
representing whole post-Consolidation Common Shares. After the Consolidation, certificates representing pre-Consolidation Common
Shares will (i) not constitute good delivery for the purposes of trades of post-Consolidation Common Shares; and (ii) be deemed
for all purposes to represent the number of post-Consolidation Common Shares to which the Registered Shareholder is entitled as
a result of the Consolidation. No delivery of a new certificate to a Registered Shareholder will be made until the Registered Shareholder
has surrendered his, her or its pre-Consolidation certificate(s).
to section 83 of the BCBCA, each fractional Common Share remaining after completion of the Consolidation that is less than half