Hexo Corp. Closes $57.5 Million Underwritten Public Offering
May 21 2020 - 8:56AM
HEXO Corp. (“
HEXO”, or the
“
Company”) (TSX: HEXO; NYSE: HEXO) today announced
the closing of its previously announced underwritten public
offering (the “
Offering”) for total gross proceeds
to the Company of C$57,546,000. The Company sold 63,940,000 units
of the Company (the “
Units”) at a price of C$0.90
per Unit under the Offering, including 8,340,000 Units sold
pursuant to the exercise in full of the underwriters’
over-allotment option.
Each Unit is comprised of one common share of
the Company and one half of one common share purchase warrant of
the Company. Each full warrant is exercisable to acquire one common
share of the Company for a period of 5 years following the closing
date of the Offering at an exercise price of C$1.05 per share,
subject to adjustment in certain events.
Canaccord Genuity Corp. and Canaccord Genuity
LLC acted as the lead underwriters for the Offering, together with
a syndicate of underwriters including A.G.P. / Alliance Global
Partners, AltaCorp Capital Inc. and BMO Nesbitt Burns Inc.
The Company expects to use the net proceeds from
the Offering for working capital and other general corporate
purposes.
In connection with the Offering, the Company
filed a prospectus supplement dated May 19, 2020 (the
"Prospectus Supplement") to the Company’s amended
and restated short form base shelf prospectus dated December 14,
2018 (the “Base Shelf Prospectus”) with the
securities commissions or similar securities regulatory authorities
in each of the provinces and territories of Canada, and with the
U.S. Securities and Exchange Commission as part of the Company’s
registration statement on Form F-10 (the “Registration Statement”)
under the U.S./Canada Multijurisdictional Disclosure System.
Copies of the Prospectus Supplement and
the Base Shelf Prospectus are available on SEDAR at www.sedar.com
and on EDGAR at www.sec.gov and a copy of the Registration
Statement is available on EDGAR at www.sec.gov. Copies of the
Prospectus Supplement, the Base Shelf Prospectus and the
Registration Statement may also be obtained in Canada from
Canaccord Genuity Corp., 161 Bay Street, Suite 3000, Toronto, ON
M5J 2S1 and in the United States from Canaccord Genuity LLC, 99
High Street, Suite 1200, Boston, Massachusetts 02110, Attn:
Syndicate Department, by telephone at (617) 371-3900, or by email
at prospectus@canaccordgenuity.com.
Under the Offering, certain insiders of the
Company purchased an aggregate of 577,800 Units, which constituted
“related party transactions” within the meaning of Multilateral
Instrument 61-101 - Protection of Minority Security Holders in
Special Transactions (“MI 61-101”). The purchase of the Units by
the insiders is exempt from the formal valuation and minority
shareholder approval requirements of MI 61-101by virtue of the
exemptions contained in Sections 5.5(a) and 5.7(1)(a) of MI 61-101,
as neither the fair market value of securities issued to insiders
nor the consideration paid by insiders exceeded 25% of the
Company's market capitalization. The Company did not file a
material change report in respect of the transaction 21 days in
advance of closing of the Offering because insider participation
had not been confirmed.
No securities regulatory authority has either
approved or disapproved of the contents of this press release. This
press release is for information purposes only and shall not
constitute an offer to sell or the solicitation of an offer to buy,
nor shall there be any sale of these securities in any state or
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such state or jurisdiction.
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 and Up
Cannabis 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 use of
proceeds from the Offering. 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 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 Prospectus
Supplement, the Base Shelf Prospectus and the Registration
Statement and in the Company’s Annual Information Form and other
continuous disclosure filings, 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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