HEXO Corp Announces Downward Revision to its Proposed Share Consolidation Ratio
December 07 2020 - 6:30AM
HEXO Corp (“HEXO”, or the “Company”) (TSX: HEXO; NYSE:HEXO)
announces that it has made an amendment (the
“Amendment”) to its notice of meeting dated
October 28, 2020 (the “
Notice of Meeting”) and its
management information circular dated October 28, 2020 (the
“
Circular”) in respect of its annual and special
meeting of shareholders scheduled to be held on December 11, 2020
(the “
Meeting”).
The Notice of Meeting and the Information
Circular provided that, at the Meeting, shareholders of the Company
(“Shareholders”) would be asked to consider, and
if deemed advisable, pass a special resolution authorizing and
approving a consolidation of the outstanding common shares of the
Company (“Common Shares”) on the basis of eight
(8) old Common Shares for one (1) new Common Share, all as more
particularly described in the Circular (the “Original
Consolidation Ratio”). The purpose of the consolidation is
to increase the Company's common share price to regain compliance
with the US$1.00 minimum share price continued listing standard of
the New York Stock Exchange (“NYSE”). The Company
believes the Original Consolidation Ratio should be revised
downward in light of the recent increase in the trading price of
the Common Shares and in order to maintain a liquid share float and
reflect the Company’s confidence that it can execute on its growth
strategy. It is therefore changing the ratio for the proposed
consolidation of the Common Shares from the Original Consolidation
Ratio to a ratio of four (4) old Common Shares for one (1) new
Common Share (the “New Consolidation Ratio”).
Accordingly, all references in the Notice of Meeting and the
Information Circular to the Original Consolidation Ratio are
amended to refer to the New Consolidation Ratio.
“We believe that our solid financial position
and the execution of our growth strategy is not yet reflected in
our market valuation. We are number one in Canada in key categories
such as beverages and have continued to gain sales momentum in
critical markets including Ontario and Alberta. We are currently
sitting fourth in recreational cannabis sales in Canada, with the
gap between us and third place narrowing, while the gap between us
and those behind us has widened”, said Sébastien St-Louis, HEXO CEO
and co-founder. “Given the necessity to regain compliance with the
US$1.00 minimum share price continued listing standard, we are in
the position of having to seek approval for the consolidation to
avoid de-listing from the NYSE. It is important to maintain
liquidity for our investors, and we’ve made the decision to
consolidate our shares. This change in the consolidation ratio to
4:1, from the previously announced 8:1, is indicative of the
confidence we have in our ability to execute going forward, as we
look beyond positive EBITDA to earnings on a per share basis.”
The Amendment will be filed under the Company’s
profiles on SEDAR and EDGAR and will also be available at
https://docs.tsxtrust.com/2092, the notice-and-access website for
the proxy materials for the Meeting maintained by the Company’s
transfer agent and registrar, and can also be obtained from the
Company upon request. The Company will not distribute an amended
form of proxy in light of the proxy submission deadline of 10:00
a.m. (EST) on December 9, 2020, the fact that the amendment to the
consolidation ratio is a downward revision and because the form of
proxy confers discretionary authority with respect to amendments or
variations to the matters identified in the Notice of Meeting or
other matters which may properly come before the Meeting or any
adjournment or postponement thereof. The persons named in the form
of proxy for the Meeting intend to vote FOR the consolidation of
the Common Shares at the New Consolidation Ratio unless the
shareholder delivering the proxy has specified in the form of proxy
that the Common Shares represented by such form of proxy are to be
voted against such resolution.
About HEXO
HEXO Corp is an award-winning consumer packaged
goods cannabis company that creates and distributes innovative
products to serve the global cannabis market. The Company serves
the Canadian adult-use markets under its HEXO Cannabis, Up Cannabis
and Original Stash brands, and the medical market under HEXO
medical cannabis. For more information please visit
hexocorp.com.
Forward Looking Statements
This press release contains forward-looking
information and forward-looking statements within the meaning of
applicable securities laws (“forward-looking statements”).
Forward-looking statements are based on certain expectations and
assumptions and are subject to known and unknown risks and
uncertainties and other factors that could cause actual events,
results, performance and achievements to differ materially from
those anticipated in these forward-looking statements.
Forward-looking statements should not be read as guarantees of
future performance or results. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak
only as of the date of this press release. The Company disclaims
any intention or obligation, except to the extent required by law,
to update or revise any forward-looking statements as a result of
new information or future events, or for any other reason.
Investor Relations:
invest@HEXO.com www.hexocorp.com
Media Relations: (819) 317-0526
media@hexo.com
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