Auxly Provides Update on Stalking Horse Bid for Ayurcann

• On April 13, 2026, Auxly announced its stalking horse bid for Ayurcann Holdings Corp.'s assets was not selected as the winning bid and is now designated the "Back-Up Bid."
• The $2.0 million debtor-in-possession (DIP) financing provided by Auxly remains in place with 12% interest and a 2.0% upfront commitment fee, secured by a super-priority charge.
• If the successful bidder fails to close by May 15, 2026, Auxly will automatically become the winning bidder at its original amount and be repaid the DIP facility plus break fees.
• CEO Hugo Alves characterized the bid as "opportunistic" and emphasized a focus on organic growth and expected significant free cash flow in 2026.

• The news represents a setback for Auxly's M&A strategy but is not existential given the company's strong balance sheet.
• Financial exposure is limited to the $2.0 million DIP loan, which is small relative to the $32.3 million cash position reported in Q4 2025.
• The "Back-Up Bid" status provides downside protection via break fees and repayment guarantees if the primary deal fails.
• Core business fundamentals remain robust with FY2025 revenue up 24% and Adjusted EBITDA up 64%, suggesting the company does not rely on this acquisition for survival.
• Market sentiment may react negatively to the failed bid, but the operational performance offsets the M&A disappointment.

• Auxly Cannabis Group Inc. is a Canadian licensed producer focused on dried flower, pre-rolls, and vapes.
• Flagship Brand: "Back Forty" ranked as the #1 cannabis brand in Canada (2025).
• Market Position: Ranked #3 among Canadian licensed producers by market share.
• Facilities: Primary production facility in Leamington, Ontario; expansion into Quebec distribution completed in Q2 2025.
• Strategy: Focus on profitable organic growth and selective M&A to enhance brand portfolio and export capabilities.