HEXO Corp.’s Shareholders Approve Standby Commitment Transaction

3.6 min readPublished On: June 16th, 2022By

GATINEAU, Quebec – HEXO Corp. (TSX: HEXO; NASDAQ: HEXO) to announce that at its special meeting of shareholders held yesterday, holders of common shares of HEXO overwhelmingly approved the previously announced equity purchase agreement with 2692106 Ontario Inc. and KAOS Capital Ltd. A total of 73,880,016 Common Shares (approximately 16.12% of the issued and outstanding Common Shares) were represented at the Meeting in person by virtual attendance or by proxy.

At the Meeting, Shareholders voted in favour of the ordinary resolution to approve certain aspects of the Standby Agreement, pursuant to which the Investor agreed to subscribe for, and the Company agreed to issue and sell, on and subject to the terms of the Standby Agreement, up to $180 million in Common Shares of the Company. The Standby Commitment Resolution was approved by 87.246% of the votes cast by Shareholders at the Meeting.

The Company previously obtained, on May 13, 2022, conditional approval from the Toronto Stock Exchange for the Standby Commitment. However, performance of the Standby Commitment is subject to the fulfilment of certain conditions, including receipt of an exemptive relief order from the Autorité des marchés financiers, as the Company’s principal regulator. The Standby Commitment is expected to be available to the Company by the end of June 2022.

Meeting Adjourned

Following the vote on the Standby Commitment Resolution, and without asking shareholders to vote on the resolution approving certain aspects relating to the previously announced transaction agreement with Tilray Brands, Inc. (Nasdaq | TSX: TLRY) and HT Investments MA LLC, the Company adjourned the Meeting until July 4, 2022 at 10:00 a.m. E.T. in order to provide Shareholders with additional time to consider previously announced amendments to the Note Transaction. These amendments will be described in greater detail in a supplement to the Company’s previously filed management information circular.

The Company expects to file the Circular Supplement in due course and a copy of it will be available under the Company’s profile on SEDAR at www.sedar.com, on EDGAR at www.sec.gov or at https://docs.tsxtrust.com/2092, the website for the meeting materials maintained by the Company’s transfer agent and registrar. It is expected that the only matter that will be considered at the Reconvened Meeting is the Note Transaction Resolution as described in the Circular and the Circular Supplement. Additional details regarding the timing and location of the Reconvened Meeting will be disclosed to Shareholders by the Company in the Circular Supplement and otherwise communicated by press release. The record date for the Reconvened Meeting will remain unchanged at May 4, 2022.

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 with respect to: the timing and status of the Reconvened Meeting; the timing to receive required regulatory approvals in connection with the proposed transactions; the conditions of the Standby Commitment described herein; the approvals required and the timing thereof; and the holding of the Meeting and the Reconvened Meeting, including the timing and purpose thereof. 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.

This press release should be read in conjunction with the management’s discussion and analysis and unaudited condensed consolidated interim financial statements and notes thereto as at and for the three months ended October 31, 2021. Additional information about HEXO is available on the Company’s profile on SEDAR at www.sedar.com and EDGAR at www.sec.gov, including the Company’s Annual Information Form for the year ended July 31, 2021 dated October 29, 2021.

Neither the TSX nor NASDAQ accepts responsibility for the adequacy or accuracy of this release.

(This information is primarily sourced from HEXO Corp.  Highly Capitalized has neither approved nor disapproved the contents of this news release. Read our Disclaimer here).

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