DebenturesI agree, Vern.
Despite CEO Booman trying to put a positive spin on the repayment (and dont get me wrong - repayment of a debt is a good thing) the reality is that Hexo had a Cash on Hand balance of $83 million at the end of Q4.
Repayment reduces that to $43 million - and with Hexo's quarterly cash burn, the balance that will be reported Dec 15 will likely show a balance of $20 million.
Hexo other financing includes a coveneant that they maintain a cash balance of at least $20 million USD - or about $26 million CDN.
Hexo will have violated it's covenant and faces the potential issues from it's financer.
Hexo is broke again.
There isn't much option other than anotehr financing and dilution (along with the inevitable reverse split)..
Mr Quinlashes is incorrect - managment wasn't 'taking care of business' - and no, Hexo doesn't get to pick when they'd repay the debentures - they had a maturity date of December 5.
Obviously, the lender wouldnt agree to an extension. The lender (private palcement) said "I'll take the cash NOW please" - which shows a lack of confidence in Hexo's future.
By the way - the priginal PP was $70 million - Hexo allowed $30 million of that to be converted to shares at around $4.00 - according to Hexo's financials about 3.5 millions hares were converted just prior to the run up to $14. If the PP held his shares, he would have made a profit of $10 a share or about $35 million.
SOME people made some GOOD money on Hexo - GOOD for them, but how are you 'longs' doing?
RE:Debenture Repayment
Right so Hexo spent $40 million to pay off the debenture from the cash account. That means they will have to raise more money via a PP as they are likely running out of cash again or they will have to increase their ATM to raise capital. The main reason for the selloff on Dec 6th I'd say.
quinlash wrote:Was not expecting the news today regarding the debentures and interest getting paid back, nice one :) Good to see the new management team taking care of business. Keep in mind that this will likely not appear on the QTR report coming out but on the one afterwards. To be honest I was thinking it would be another 6 months or more before we seen the debentures addressed.
I will not be making any public estimates nor guesses on the upcoming 2023 QTR 1 report but I will say that I would very much like to see Gross Sales in excess of $60 Million and net sales in excess of $42 Million