Hexo Corp Stock Price, News & Analysis

HEXO Corp. has entered into a definitive arrangement agreement with Tilray Brands, Inc. to facilitate the acquisition of HEXO Shares. Under this arrangement, HEXO Shareholders will receive 0.4352 Tilray Shares for each HEXO Share, equating to a purchase price of US$1.25 per HEXO Share based on recent trading averages. The agreement is subject to approval from HEXO Shareholders and regulatory bodies. In parallel, a Waiver and Amendment Agreement has been established, allowing HEXO to meet its financial obligations by modifying existing covenants. This arrangement aims to address HEXO's financial difficulties and was supported by a special committee from HEXO's Board, emphasizing its necessity for future viability. The special meeting for shareholder voting is expected to occur before June 22, 2023.

HEXO Corp. (TSX: HEXO; NASDAQ: HEXO) reported Q2 FY23 results, achieving a positive net income of $0.7 million, marking its first-ever profit. Adjusted gross margins improved from 40% to 45%, with net revenues declining 32% to $24.2 million compared to Q1 FY23 and down 57% from Q2 FY22 due to increased competition and pricing pressure. Total operating expenses remained flat at $23.8 million, significantly lower than the previous year, primarily due to impairment charges in FY22. The company generated $5.3 million in cash from operations and paid off $40.7 million in debt. Management emphasizes a focus on profitability despite overall revenue challenges.