| GATINEAU, Quebec, May 11, 2022 (GLOBE NEWSWIRE) -- HEXO Corp. (TSX: HEXO; NASDAQ: HEXO) (“HEXO” or the “Company”), a leading producer of high-quality cannabis products, today announced that, on or about May 16, 2022, the Company expects to file a management information circular (the “Circular”) in respect of the special meeting of shareholders of the Company scheduled to be held on June 14, 2022 at 4:00 p.m. (EDT) to seek shareholder approval of, in accordance with the polices of the Toronto Stock Exchange (the “TSX”), certain aspects of the transactions (the “Transactions”) contemplated by (i) the proposed amendment to the terms of the Company’s outstanding senior secured convertible note to be assigned to Tilray Brands, Inc. (“Tilray”) pursuant to the terms of the Transaction Agreement and the Assignment and Assumption Agreement, each entered into by and among Tilray, HEXO and HT Investments MA LLC on April 11, 2022, and (ii) the equity purchase agreement (the “Standby Agreement”) with an affiliate of KAOS Capital Inc. (the “Standby Party”), all as more particularly described in the Company’s press release dated April 12, 2022. This is an important and significant step forward in executing on the Company’s strategic plan. Details concerning the Transactions and related agreements will be set out in the Circular and the Transactions remain subject to compliance with the requirements of the TSX and the other terms of the Transactions, as summarized in the Circular. A notice package containing a description of the matters to be addressed at the upcoming meeting and of the notice-and-access procedures to access the meeting materials, as well as a form of proxy (for registered shareholders) or a voting instruction form (for non-registered shareholders) is expected to be mailed on or about May 16, 2022. These materials outline in detail how to vote at and participate in the meeting. Beginning on our about May 16, 2022, the materials for the meeting will be available online under the Corporation’s profile on SEDAR at www.sedar.com, EDGAR at www.sec.gov or at https://docs.tsxtrust.com/2092, the website for the meeting materials maintained by the Corporation’s transfer agent and registrar. In connection with the Standby Agreement, and to reflect worsening stock market conditions and a decrease in the Company’s share price, the Standby Party and the Company have agreed to an amendment whereby the Standby Party will initially receive 10,843,373 common shares in the capital of the Company (“Common Shares”) as a standby commitment fee versus the originally agreed 7,557,711 Common Shares. In addition, the entitlement to receive additional Common Shares as part of the standby commitment fee as previously disclosed has been limited to circumstances where the Company’s share price (based on a 5 day volume-weighted average price) on the TSX at the end of the four month and one day restricted period applicable to the Common Shares initially issued as a standby commitment fee is less than $0.489. The terms of the Standby Agreement are otherwise unamended. The board of directors of HEXO unanimously recommends that shareholders vote FOR the resolutions to approve certain aspects of the Transactions, which are described in detail in the Circular. |