HEXO Corp has entered into a definitive agreement with institutional investors for the purchase and sale of 11,976,048 common shares at an offering price of US$1.67 per share for gross proceeds of US$20.0 million before deducting fees and other estimated offering expenses, pursuant to a registered direct offering (the “Offering”). The Company has also agreed to issue to the investors common share purchase warrants to purchase 5,988,024 common shares of the Company. The warrants will have a five year-term and an exercise price of US$2.45 per share.
The Company expects to use the net proceeds from the Offering for working capital and other general corporate purposes, including funding the Company’s research and development to further advance the Company’s innovation strategies. The Offering is expected to close on or about January 22, 2020, subject to the satisfaction of customary closing conditions, including, but not limited to, the listing of the common shares on the Toronto Stock Exchange and the New York Stock Exchange and any required approvals of each exchange.
A.G.P./Alliance Global Partners is acting as sole placement agent for the Offering.
The Offering is being made in the United States only under the Company’s amended and restated short form base shelf prospectus dated December 14, 2018 (the “Base Shelf Prospectus”), filed with the securities regulatory authorities in each of the provinces and territories of Canada, and the corresponding registration statement on Form F-10 (the “Registration Statement”) filed by the Company with the U.S. Securities and Exchange Commission (“SEC”) under the U.S./Canada Multijurisdictional Disclosure System (“MJDS”). The Company will file a prospectus supplement (the “Supplement”) to the Base Shelf Prospectus on a non-offering basis with applicable securities regulatory authorities in Canada. The Supplement will also be filed with the SEC as part of the Registration Statement under the MJDS. Copies of the Supplement and the Base Shelf Prospectus will be available on SEDAR at www.sedar.com and copies of the Supplement and the Registration Statement will be available on EDGAR at www.sec.gov.