HEXO Corp HEXO HEXO said Wednesday it is conducting a $70-million private placement of convertible debentures.
The company signed subscription agreements with a group of investors that includes the company’s CEO and co-founder Sebastien St-Louis and board members Vincent Chiara, Adam Miron, Dr. Michael Munzar and Nathalie Bourque.
With the new financing, Hexo said it needs extra time to finalize its financial results for the fourth quarter and full year ended July 31 and has rescheduled the earnings report for Oct. 28.
Don’t miss out on the top cannabis stories of the day. Click here to sign up for our daily insider newsletter.
“The confidence in HEXO Corp that this $70 million private placement demonstrates is a testament to the value the Company is expected to bring to shareholders,” CEO and co-founder St-Louis said in a statement.
“We remain focused on garnering significant market share, driving growth and in shaping this company into a mature, resilient and valued leader in our industry.”
Earlier this month, Hexo missed analyst revenue estimates in a preliminary fourth-quarter report and withdrew its fiscal year 2020 financial outlook.
The news sent Hexo shares plunging by more than 22% and brought down stocks sector-wide.
The debentures announced Thursday carry interest from the date of closing at 8% annually, payable quarterly, and will mature three years from the issuance. In one year from the issuance, the debentures will have the option of conversion into common shares at a price of $3.16 per share, the company said.
“It is important to note the one-year anti-dilution feature in this arrangement, meaning that the financing does not dilute current shareowners’ ownership of the company in the short term,” St-Louis said.
Hexo retains the option to repay all of the debentures with unpaid interest one year from issuance.
The company said it plans to utilize the net proceeds from the placement for general corporate purposes.
Hexo shares were trading higher by 1.12% to $2.71 off the open Thursday.
Related Links:
Hexo Falls 20% After Lower Q4 Guidance, Withdrawing 2020 Outlook
Hexo Analysts React To Resignation Of Cannabis Company's CFO: 'What Don't We Know?'
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
The Benzinga Cannabis Capital Conference is coming to Florida
The Benzinga Cannabis Capital Conference is returning to Florida, in a new venue in Hollywood, on April 16 and 17, 2024. The two-day event at The Diplomat Beach Resort will be a chance for entrepreneurs, both large and small, to network, learn and grow. Renowned for its trendsetting abilities and influence on the future of cannabis, mark your calendars – this conference is the go-to event of the year for the cannabis world.
Get your tickets now on bzcannabis.com – Prices will increase very soon!