Shares of Aurora Cannabis Inc. (NYSE and TSX: ACB) fell over 13 per cent Monday after the company released a statement on how it plans to remain listed on the New York Stock Exchange.
To keep its stock price above US$1 per share, which is required for all NYSE-listed companies, Aurora said that its board approved a reverse stock split to consolidate its shares on a 12-to-one basis, effective May 11.
This will crunch its outstanding common shares down to 109 million from over 1.3 billion.
Aurora closed Monday at US$0.76 a share on the NYSE.
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The company also said it renewed its at-the-market offering to raise an additional capital equity of US$350 million.
The funds will give the company more flexibility when dealing with economic uncertainty caused by COVID-19, Aurora said.
This will build on the company’s cash pile of $205 million, which it held as of March 31. This amount includes the cash raised under a now completed US$400 million ATM program from May 2019, Aurora said.
The company also reaffirmed that its fiscal Q3 2020 net revenue would have modest growth from its fiscal Q2 2020.
“Our focus today continues to be on financial discipline across the entire organization. We are taking appropriate actions to strengthen our cash position and maintain financial flexibility as we navigate through the current environment,” Aurora interim CEO Michael Singer said.
The company is confident it has the support of its shareholders as it moves towards generating positive cash-flow, Singer added in the statement.
All registered shareholders with physical certificates have been mailed a letter to explain the consolidation and will be required to fill out a form and mail in their certificates, Aurora said.
After Aurora’s stock had fallen below the US$1 threshold for 30 days on the NYSE, the company received notice from the exchange on April 8 it would be delisted.
Being kicked off the NYSE would not affect the company’s business operations, regulatory requirements or any lending agreements, Aurora said.
Top image of the Aurora Air facility via the company