HEXO Corp. Files Restated Financial Statements
January 02 2020 - 6:31AM
HEXO Corp. (“HEXO” or the “Company”) (TSX: HEXO; NYSE: HEXO) today
announced it has completed the filing of its restated audited
annual consolidated financial statements for the fiscal year ended
July 31, 2019 (the “Restated Annual Financial Statements”) and
corresponding amended management’s discussion and analysis, and its
restated interim condensed consolidated financial statements for
the three-month period ended October 31, 2019 (the “Restated
Interim Financial Statements”) and corresponding amended
management’s discussion and analysis.
As contemplated in the Notice to Reader included
in the Company’s previously filed interim financial statements for
the three-month period ended October 31, 2019, the Restated Annual
Financial Statements were filed to correct identified errors in the
Company’s previously filed financial statements for the fiscal
year ended July 31, 2019, in which 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
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 $14.3 million as at July 31, 2019. Additionally, net loss
for the year ended July 31, 2019 was overstated by $14.3 million.
In assessing the financial impact of subsequent
events for the restatement, the Company has also adjusted its
audited annual consolidated financial statements for the fiscal
year ended July 31, 2019 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
$2.4 million. The inventory impairment resulted in a $2.4 million
reduction of the impairment loss on inventory for the interim
financial statements for the three months ended October 31,
2019.
The Restated Annual Financial Statements,
Restated Interim Financial Statements and corresponding amended
management’s discussion and analysis are or will be available on
SEDAR at www.sedar.com and copies of the Supplement and the
Registration Statement are or will be available on EDGAR at
www.sec.gov.
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. 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 facilities in
Ontario and Quebec. The Company is also expanding internationally
and has a foothold in Greece to establish a Eurozone processing,
production and distribution centre. 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”) including statements regarding the
Offering and its terms, timing, potential completion and the use of
proceeds of the Offering as well as statements regarding the
Company’s future business plans. 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, including that the Offering may not be completed on the
terms indicated or at all, the Company may be unsuccessful in
satisfying the conditions to closing of the Offering and the
Company’s use of proceeds of the Offering may differ from those
indicated. Forward-looking statements should not be read as
guarantees of future performance or results. A more complete
discussion of the risks and uncertainties facing the Company
appears in the Base Shelf Prospectus and the Registration Statement
and the Company’s most recent Annual Information Form and other
continuous disclosure filings incorporated by reference in the Base
Shelf Prospectus and the Registration Statement, which are
available on SEDAR at www.sedar.com and EDGAR at www.sec.gov.
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: Jennifer
Smith 1-866-438-8429 invest@hexo.com www.hexocorp.com
Media Relations: (819)
317-0526 media@hexo.com
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