This Amendment No. 3 on Form 40-F/A (this “Amendment”) for
the year ended July 31, 2019 is being filed for the purpose of
(i) filing restated audited annual consolidated financial
statements of HEXO Corp. (the “Company”) for the fiscal year
ended July 31, 2019 to correct identified errors in the
Company’s financial statements for the fiscal year ended
July 31, 2019 included in the Company’s previously filed Form
40-F for the year ended
July 31, 2019, as amended prior hereto (the “Prior
Filing”), (ii) filing the related amended Management’s
Discussion and Analysis for the fiscal year ended July 31,
2019, and (iii) filing an amended Annual Report for the year
ended July 31, 2019 based on the restatement and amendment
described in (i) and (ii). Dollar amounts are in expressed in
thousands of Canadian dollars.
The deferred tax liability was overstated as at July 31, 2019,
as it was not offset by a deferred tax asset relating to a tax loss
generated in one subsidiary against a deferred tax liability
generated by a separate subsidiary. Due to the two tax
positions existing in two separate entities, the Company’s original
position was that they could not be offset or reduce one another.
The applicable subsidiaries were amalgamated on August 1,
2019. The correction of this error resulted in a reduction of the
deferred tax liability and deficit, by $14,373, as at July 31,
2019. Additionally, net loss for the year ended July 31, 2019
was overstated by $14,373.
In assessing the financial impact of subsequent events, the Company
has also adjusted the audited annual consolidated financial
statements for the estimated fair market value of its cannabis trim
based inventory due to new and available third-party information
resulting in an increased impairment on inventory of $2,417. These
corrections are noted in the ‘Adjustments’ column in the
restated audited annual consolidated financial statements
accompanying this Amendment.
Additionally, pursuant to the rules of the U.S. Securities and
Exchange Commission, this Amendment also contains (i) new
certifications required by Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), (ii) new
certifications required by Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act, and
(iii) a new consent from the Company’s independent registered
public accounting firm.
Other than as discussed above and expressly set forth herein, this
Amendment does not, and does not purport to, amend or restate any
other information contained in the Prior Filing nor does this
Amendment reflect any events that have occurred after the filing
date of the Prior Filing or November 13, 2019. The filing of
this Amendment shall not be deemed an admission that the Prior
Filing, when made, included any known, untrue statement of material
fact or knowingly omitted to state a material fact necessary to
make a statement not misleading.
RESTATED AUDITED ANNUAL FINANCIAL
The restated audited consolidated financial statements of the
Company for the year ended July 31, 2019, including the report
of the independent auditors thereon, are filed as Exhibit 99.2 to
this Amendment, and are incorporated by reference herein.
AMENDED MANAGEMENT’S DISCUSSION AND
The Company’s amended Management’s Discussion and Analysis for the
year ended July 31, 2019 is filed as Exhibit 99.3 to this
Amendment, and is incorporated by reference herein.