HEXO Corp ("HEXO") (TSX: HEXO; NYSE-A: HEXO) and Newstrike
Brands Ltd. ("Newstrike") (TSX-V: HIP) are pleased to
announce that they have received regulatory approval from the
Canadian Competition Bureau by way of a no-action letter under the
Competition Act (Canada) indicating that it does not intend to
challenge the proposed arrangement between HEXO and Newstrike,
whereby HEXO intends to acquire all of the issued and outstanding
common shares of Newstrike by way of a plan of arrangement under
the Business Corporations Act (Ontario) (the
“
Transaction”). Receipt of the letter satisfies a
key condition of the Transaction.
HEXO and Newstrike announced that they had
entered into a definitive arrangement agreement with respect to the
Transaction in March. The Transaction has already been unanimously
approved by the board of directors of each of HEXO and Newstrike.
In April, the companies announced that HEXO has entered into
irrevocable hard voting support agreements with shareholders of
Newstrike representing in aggregate approximately 38.3% of
Newstrike's issued and outstanding common shares.
The Transaction remains subject to customary
closing conditions, including approval by Newstrike shareholders at
Newstrike’s Annual and Special Meeting on May 17, 2019, and final
court approval. Subject to satisfaction of these closing
conditions, the Transaction is expected to close by May 24,
2019. Newstrike’s board of directors has recommended that its
shareholders vote in favour of the Transaction.
For further information, please contact: |
|
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HEXO: |
Newstrike: |
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Investor Relations: Jennifer Smith 1-866-438-8429
invest@hexo.com |
Investor Relations: 1-877-541-9151
ir@newstrike.ca |
|
|
Media Relations: Caroline Milliard 819-317-0526
media@hexo.com |
Media Relations: PM Rendon 365-773-5432
prendon@up.ca |
|
|
Director: Adam Miron 819-639-5498 |
Director: Jay Wilgar, CEO, Newstrike
905-844-8866 |
About HEXO HEXO 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 has 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 Cannabis Newstrike 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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