Skip to main content

Hexo Corp. Announces Initial Closing of Early Conversion Option for Debentures

Written by Customer Service on . Posted in Public Companies.

OTTAWA, June 11, 2020 (GLOBE NEWSWIRE) — HEXO Corp. (“HEXO”, or the “Company”) (TSX: HEXO; NYSE: HEXO) today announced an initial closing of its previously announced early conversion option (the “Early Conversion Option”) in respect of $29.86 million aggregate principal amount of its outstanding $70 million aggregate principal amount of 8% unsecured convertible debentures maturing December 5, 2022 (the “Debentures”). Under the initial closing, $23.595 million aggregate principal amount of Debentures was converted into ‎29,493,750 units of the Company (the “Conversion Units”) at a price of $0.80 per Conversion Unit.
Each Conversion Unit consisted of one common ‎share of the Company (a “Conversion Share”) and one-half of one common share purchase warrant of the ‎Company ‎‎(each whole warrant, a “Conversion Warrant”). Each Conversion Warrant is exercisable by the holder to ‎purchase one common share of the Company (a “Conversion Warrant Share”) at an ‎exercise price of $1.00 per share for a period ‎of three years from issuance. ‎The Conversion Shares are subject to restrictions against resale for 12 months ending June 10, 2021 as part of the terms of the Early Conversion Option. In addition, the Conversion Warrants ‎and the common shares of the Company issuable upon exercise of the Conversion Warrants are subject ‎to resale restrictions for four months and one day ending October 11, 2020 under applicable securities laws.It is expected ‎that ‎the balance of the Early Conversion Option for the conversion of an additional $6.265 million aggregate principal amount of Debentures will occur in the second half of June 2020.‎The Early Conversion Option does not affect the rights of those Debenture holders who have not ‎accepted it. ‎‎Debentureholders who did not accept the Early Conversion Option are not entitled to ‎the benefit of the ‎Early ‎Conversion Option and will not receive the Conversion Units issuable upon ‎conversion of the Debentures ‎subject to ‎the Early Conversion Option, and retain their full ‎rights under the Debentures including their existing conversion ‎rights.‎As part of the initial closing, certain insiders of the Company holding, directly or ‎indirectly, $7.87‎‎ million aggregate principal amount of Debentures converted their Debentures into an aggregate of 9,837,500 Conversion Units. As a result of the participation of such insiders in the Early Conversion Option, the Early Conversion Option constitutes a “related party transaction” with each of these insiders under ‎Multilateral Instrument 61-101 – Protection of Minority ‎Security Holders in Special Transactions (“MI 61-101”). The ‎issuance of the Conversion Units to the insiders under the Early Conversion Option was exempt ‎from the formal ‎valuation and minority shareholder approval requirements of MI 61-101, as the ‎fair market value of the Conversion ‎Units issuable to, and the consideration payable by, such persons did not ‎exceed 25% of the Company’s market ‎capitalization.‎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 HEXOHEXO 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 StatementsThis press release contains forward-looking information and forward-looking statements within the meaning of applicable securities laws (“forward-looking statements”), including statements regarding the timing and completion of the Early Conversion Option. 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 Early Conversion Option may not be completed on the terms indicated or at all. 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 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.comMedia Relations:
(819) 317-0526
media@hexo.com

Disclaimer & Cookie Notice

Welcome to GOLDEA services for Professionals

Before you continue, please confirm the following:

Professional advisers only

I am a professional adviser and would like to visit the GOLDEA CAPITAL for Professionals website.

Important Notice for Investors:

The services and products offered by Goldalea Capital Ltd. are intended exclusively for professional market participants as defined by applicable laws and regulations. This typically includes institutional investors, qualified investors, and high-net-worth individuals who have sufficient knowledge, experience, resources, and independence to assess the risks of trading on their own.

No Investment Advice:

The information, analyses, and market data provided are for general information purposes only and do not constitute individual investment advice. They should not be construed as a basis for investment decisions and do not take into account the specific investment objectives, financial situation, or individual needs of any recipient.

High Risks:

Trading in financial instruments is associated with significant risks and may result in the complete loss of the invested capital. Goldalea Capital Ltd. accepts no liability for losses incurred as a result of the use of the information provided or the execution of transactions.

Sole Responsibility:

The decision to invest or not to invest is solely the responsibility of the investor. Investors should obtain comprehensive information about the risks involved before making any investment decision and, if necessary, seek independent advice.

No Guarantees:

Goldalea Capital Ltd. makes no warranties or representations as to the accuracy, completeness, or timeliness of the information provided. Markets are subject to constant change, and past performance is not a reliable indicator of future results.

Regional Restrictions:

The services offered by Goldalea Capital Ltd. may not be available to all persons or in all countries. It is the responsibility of the investor to ensure that they are authorized to use the services offered.

Please note: This disclaimer is for general information purposes only and does not replace individual legal or tax advice.