The stock of HEXO (OTCMKTS:HYYWF) has been rising since May 16, 2019, because of overwhelming support from the investors to take over Newstrike Brands Ltd (OTCMKTS:NWKRF). The stock surged past $7.35 following the deal approval and now trades at $6.76.
The deal, which is agreed in March 2019, required 66% voting from the investors. But, the investors gave a thumping nod to the deal with 97.6% votes. As per the agreed terms, Hexo will acquire all the outstanding and issued shares of Newstrike.
Supreme Court nod
Hexo acquired Newstrike on receipt of Supreme Court nod. Following the takeover, Newstrike would become a subsidiary of Hexo. The shares of Newstrike would be delisted from TSX on May 28, 2019.
Co-founder and Chief Executive Officer of Hexo, Sebastein St-Louis said the company enters the next adventurous phase. The talented teams of both companies will speed up the dream of Hexo to form the best cannabis technology company. He expressed thanks to the entire team of Newstrike and Jay Wilgar for the faith reposed in Hexo.
As per the terms of the deal, the former shareholders of Newstrike will get 0.06332 share of Hexo for each of their share held in their account before the deal. The shareholders of Newstrike need to submit the share certificates along with a transmittal letter to receive the shares of Hexo. The Newstrike options holders can exchange the options for the shares of Hexo under the same terms.
Hexo has appointed Donald Courtney as COO. His previous stints include Chief Operating Officer at MedReLeaf. He also worked at Pesi Bottling Group and Mars Inc.
Q2 2019 results
Hexo has posted revenues of more than $16.2 million in Q2 2019, up by 144% in Q1 2019. It is an increase of 1,269% when compared to Q2 2018. The production of dried cannabis has increased to 4,938 kg (up 39% from Q1 2019). The sales of dried cannabis have surged by 142% quarter on a quarter to 2,689 kg.
The company has mobilized funds of more than $54.2 million through an IPO. It has appointed the Bank of Montreal and Canadian Bank of Commerce as the managers for IPO.