HEXO Corp Announces Lapse of Base Shelf Prospectus

Rhea-AI Summary

HEXO Corp (HEXO) has announced that its amended short form base shelf prospectus, initially filed in November 2018, has lapsed. This prospectus allowed HEXO to issue securities for up to $800 million, of which $254.3 million was raised between January 2019 and August 2020. Despite the prospectus lapse, CFO Trent MacDonald stated the company is on a path toward profitability, reporting six consecutive quarters of Adjusted EBITDA improvement. HEXO maintains its top market share position in Quebec and is expanding its presence in Canada, particularly in the beverage sector through its joint venture with Molson Coors.

Positive

• Achieved six consecutive quarters of Adjusted EBITDA improvement.
• Maintained the number one market share position in Quebec.
• Ranked in the top four for adult-use market share in Canada.
• Secured number one position in the hash market.
• Strong liquidity and cash flow, negating the need for further financing.

Negative

• None.

OTTAWA, Dec. 22, 2020 (GLOBE NEWSWIRE) -- HEXO Corp (“HEXO”, or the “Company”) (TSX: HEXO; NYSE:HEXO) announces that its amended and restated short form base shelf prospectus dated December 14, 2018, amending and restating its short form base shelf prospectus dated November 19, 2018 (the “Shelf Prospectus”), lapsed today.

The shelf prospectus related to the offering for sale by the Company, from time to time, during the 25-month period commencing November 19, 2018, of up to $800,000,000 in the aggregate of common shares, warrants, subscription receipts and units of the Company. Between January 2019 and August 2020, the Company issued securities under the Shelf Prospectus for aggregate gross proceeds of $254.3 million. The Company has determined not to file another short form base shelf prospectus at this time.

“Since the prospectus was initially filed, HEXO has made tremendous improvements to its operations, product offering and overall business on the path toward profitability. The first quarter of this fiscal year was our sixth sequential quarter of Adjusted EBITDA improvement as we march towards being Adjusted EBITDA positive. We are also progressing on the path of becoming cash-flow positive from our operations.” said HEXO CFO, Trent MacDonald. “We continue to hold the number one position for market share in Quebec, while continuing to aggressively expand into other markets and are now top four in adult-use market share by net sales dollars in Canada. We have also moved into the top beverage spot through Truss, our joint venture with Molson Coors, and have reached the number one market share position for hash, which we believe will continue to be an important category for the industry. In light of our solid financial position, and most notably our excellent liquidity and cashflow position, we do not see the need to conduct further rounds of financing in the near future.”

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, 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”). 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. Forward-looking statements should not be read as guarantees of future performance or results. 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:
invest@HEXO.com
www.hexocorp.com

Media Relations:
(819) 317-0526
media@hexo.com

FAQ

What does the lapse of HEXO's prospectus mean for investors?

The lapse indicates that HEXO will not issue new securities under the old prospectus, but the company remains financially stable without the need for additional financing.

How much did HEXO raise under its previous prospectus?

HEXO raised approximately $254.3 million under the amended prospectus between January 2019 and August 2020.

What is HEXO's market position in Canada?

HEXO holds the number one market share in Quebec and ranks among the top four in Canada's adult-use market by net sales.

Is HEXO close to becoming cash-flow positive?

Yes, HEXO is progressing towards becoming cash-flow positive from its operations.