HEXO Corp ("HEXO") (TSX: HEXO; NYSE-A: HEXO) today
announced that it has entered into irrevocable hard voting support
agreements with shareholders of Newstrike Brands Ltd. (“Newstrike”)
(TSX-V: HIP) representing in aggregate approximately 38.3% of
Newstrike's issued and outstanding common shares in connection with
definitive arrangement agreement (the “Arrangement Agreement”)
under which HEXO will acquire, by way of a plan of arrangement
under the Business Corporations Act (Ontario), all of
Newstrike’s issued and outstanding common shares in an all-share
transaction (the "Transaction").
“We’re pleased to have secured hard lock up
support for 38.3% of Newstrike shareholders since announcing the
agreement,” said Sebastien St-Louis, HEXO’s CEO and co-founder.
“This is a great recognition of the extreme alignment between both
companies’ management and boards, as well as a vote of confidence
in HEXO’s vision for the future. We are eager for the Newstrike
family to embark on this journey with us!”
Jay Wilgar, CEO of Newstrike added: “Our recent
respective quarterly financial reports demonstrate the collective
potential of our combined organizations as one of Canada’s largest
licensed producers. We look forward to working closely with the
HEXO team to leverage the strengths of our two businesses, create
synergies and accelerate value creation for both of our shareholder
bases. Moreover, our strategic partners The Tragically Hip and Neal
Brothers Foods are both supportive of the proposed
combination.”
For
further information, please contact: |
|
|
HEXO: |
Newstrike: |
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Investor
Relations:Jennifer Smith1-866-438-8429invest@hexo.com |
Investor
Relations:1-877-541-9151ir@newstrike.ca |
|
|
Media
Relations:Caroline Milliard819-317-0526media@hexo.com |
Media
Relations:PM Rendon365-773-5432prendon@up.ca |
|
|
Director:Adam Miron819-639-5498 |
Director:Jay Wilgar, CEO,
Newstrike905-844-8866 |
About HEXOHEXO Corp is an
award-winning consumer packaged goods cannabis company that creates
and distributes prize-winning products to serve the global cannabis
market. Through its hub and spoke business strategy, HEXO Corp is
partnering with Fortune 500 companies, bringing its brand value,
cannabinoid isolation technology, licensed infrastructure and
regulatory expertise to established companies, leveraging their
distribution networks and capacity. As one of the largest licensed
cannabis companies in Canada, HEXO Corp operates with 1.8 million
sq. ft of facilities in Ontario and Quebec and a foothold in Greece
to establish a Eurozone processing, production and distribution
centre. The Company serves the Canadian adult-use and medical
markets. For more information please visit hexocorp.com.
About Newstrike and Up
CannabisNewstrike is the parent company of Up Cannabis
Inc., a licensed producer of cannabis that is licensed to both
cultivate and sell cannabis in all acceptable forms. Newstrike,
through Up Cannabis and together with select strategic partners,
including Canada’s iconic musicians The Tragically Hip, is
developing a diverse network of high quality cannabis brands. For
more information, visit http://www.up.ca or
http://www.newstrike.ca
Forward-Looking Information
This news release contains forward-looking statements.
Forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of HEXO and/or Newstrike to be
materially different from any future results, performance or
achievements expressed or implied by the forward-looking
statements. Often, but not always, forward-looking statements can
be identified by the use of words such as "plans", "expects" or
"does not expect", "is expected", "estimates", "intends",
"forecasts", "projections", "anticipates" or "does not anticipate",
or "believes", or variations of such words and phrases or state
that certain actions, events or results "may", "could", "would",
"might" or "will" be taken, occur or be
achieved. Forward-looking statements in this news release
include, but are not limited to: statements with respect to the
completion of the Transaction and the timing for its completion;
the satisfaction of closing conditions which include, without
limitation (i) required Newstrike shareholder approval, (ii)
necessary court approval in connection with the plan of
arrangement, (iii) receipt of any required approvals under the
Competition Act, (iv) certain termination rights available to the
parties under the Arrangement Agreement, (v) HEXO obtaining the
necessary approvals from the TSX and the NYSE American for the
listing of its common shares in connection with the Transaction
(vi). Newstrike receiving approval for the delisting of its shares
on the TSX-V and (vii) other closing conditions, including
compliance by HEXO and Newstrike with various covenants contained
in the Arrangement Agreement; statements with respect to the effect
of the Transaction on HEXO and its strategy going forward;
statements with respect to the anticipated benefits associated with
the acquisition of Newstrike; and HEXO’s financial outlook for
estimated net and gross revenues from the sale of cannabis in
Canada for fiscal 2020.
Forward-looking statements are based on certain
assumptions regarding HEXO and Newstrike, including the completion
of the Transaction, anticipated benefits from the Transaction, and
expected growth, results of operations, performance, industry
trends and growth opportunities. While HEXO and Newstrike consider
these assumptions to be reasonable, based on information currently
available, they may prove to be incorrect. Readers are cautioned
not to place undue reliance on forward-looking statements.
Accordingly, readers should not place undue
reliance on the forward-looking statements and information
contained in this press release. Since forward-looking statements
and information address future events and conditions, by their very
nature they involve inherent risks and uncertainties.
Actual results could differ materially from
those currently anticipated due to a number of factors and risks.
Readers are cautioned that the foregoing list of factors is not
exhaustive. The forward-looking statements contained in this news
release are made as of the date of this release and, accordingly,
are subject to change after such date.
Newstrike does not assume any obligation to
update or revise any forward-looking statements, whether written or
oral, that may be made from time to time by us or on our behalf,
except as required by applicable law.
Readers are cautioned that the foregoing list is
not exhaustive. Readers are further cautioned not to place undue
reliance on forward-looking statements as there can be no assurance
that the plans, intentions or expectations upon which they are
placed will occur. Such information, although considered reasonable
by management at the time of preparation, may prove to be incorrect
and actual results may differ materially from those anticipated.
For more information on the risk, uncertainties and assumptions
that could cause anticipated opportunities and actual results to
differ materially, please refer to the public filings of HEXO and
Newstrike which are available on SEDAR at www.sedar.com, including
the “Risk Factors” section in HEXO’s Annual Information Form dated
October 25, 2018, Newstrike’s Annual Information Form dated May 30,
2018 and the most recent management’s discussion and analysis filed
by each of HEXO and Newstrike.
Forward-looking statements contained in this
news release are expressly qualified by this cautionary statement
and reflect our expectations as of the date hereof, and thus are
subject to change thereafter. HEXO and Newstrike disclaim any
intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as required by law.
Notice to U.S. Holders. Both HEXO and Newstrike
have been formed outside of the United States. The Transaction will
be subject to disclosure requirements of Canada that are different
from those of the United States. Financial statements included in
the documents, if any, will be prepared in accordance with Canadian
accounting standards and may not be comparable to the financial
statements of United States companies. It may be difficult for a
securityholder in the United States to enforce his/her/its rights
and any claim a securityholder may have arising under U.S. federal
securities laws, since the companies are located in Canada, and
some or all of their officers or directors may be residents of
Canada or another country outside of the United States. A
securityholder may not be able to sue a Canadian company or its
officers or directors in a court in Canada or elsewhere outside of
the United States for violations of U.S. securities laws. It may be
difficult to compel a Canadian company and its affiliates to
subject themselves to a U.S. court's judgment.
Neither TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
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