OTTAWA and TORONTO, September 01, 2021 (GLOBE NEWSWIRE) – PRESS RELEASE – HEXO Corp. and 48North Cannabis Corp. announced that they have entered into the previously announced agreement under which HEXO has acquired all of the issued and outstanding shares of 48North common stock through a court-approved settlement under the Canada Business Corporations Act.
Under the terms of the agreement, each former 48North shareholder is now entitled to 0.02366 common shares of the capital of HEXO for each 48North share held immediately prior to the conclusion of the agreement. It is expected that 48North shares will be foreclosed on the TSX Venture Exchange after close of trading on or about September 2, 2021.
In order to receive consideration, registered holders of 48North Shares must deposit their share certificates representing 48North Shares with the TSX Trust Company, the custodian under the Agreement, along with a duly completed transmission letter. Shareholders whose 48North Shares are registered in the name of a broker, dealer, bank, trust company or other nominee should contact their nominee in order to obtain consideration.
Further information on the agreement can be found in the materials prepared by 48North in relation to the special meeting of 48North shareholders on August 17, 2021, mailed to 48North shareholders and filed under 48North’s profile in the electronic document analysis system , and on-demand (SEDAR) at www.sedar.com.
Warrants to purchase 48North shares that were not exercised before 00:01 a.m. (Toronto time) on September 1, 2021 will remain outstanding as 48North warrants that entitle the holder to exercise rights instead of the number of 48North shares which this holder was previously entitled when exercising these 48North warrants, the consideration in the form of HEXO shares to which this holder would have been entitled if he had been the registered holder of the number of 48North shares immediately before the entry into force, to which that holder was entitled upon exercise of these 48North Warrants. All other conditions governing the Warrants, including, but not limited to, the term, the exercise price and the conditions for exercise and the manner of exercise, are the same as and are subject to the conditions that were in effect immediately prior to the entry into force Terms of the applicable warranty contract or warranty certificate.
As required in the Warrants in relation to the Applicable Warrants, HEXO has entered into additional Warrants in relation to such Warrants that govern Applicable Warrants. A copy of each of these supplementary warrant agreements will be available on the respective SEDAR profiles of 48North and HEXO at www.sedar.com.
48North warrants listed
Prior to entering into the agreement, 48North had one class of warrants outstanding to purchase 48North shares which are listed on the TSX-V under the symbol “NRTH.WT”. The listed 48North warrants are expected to begin trading on the Toronto Stock Exchange (TSX) under the symbol “HEXO.WT.A” as of the opening of trading on September 3, 2021. The listed 48North Warrants will then remain listed on the TSX until exercise, expiration or delisting at the earliest. HEXO has concluded a supplementary warrant agreement with regard to the listed 48North warrants, a copy of which will be available on the respective SEDAR profiles of 48North and HEXO at www.sedar.com.
Holders of 48North options have received replacement options under the agreement that can be exercised for HEXO shares at the same exchange ratio as for 48North shares. All other terms of the substitute options, including the term, exercise, terms and manner of exercise, are the same as the 48North options for which they were exchanged and any certificates or option agreements previously evidencing 48North options, now provide evidence (and are considered evidence) of such replacement options.
48North has been granted an exemption from certain ongoing disclosure and insider reporting requirements by the relevant securities regulators. Holders of 48North publicly traded warrants are instructed to refer to and rely on HEXO’s disclosure records in lieu of 48North’s.
In connection with the conclusion of the agreement, all officers and directors of the boards of directors of 48North and its subsidiaries resigned.
The business activities of HEXO and 48North are subject to a variety of laws, regulations and guidelines relating to the marketing, acquisition, manufacture, management, transport, storage, sale and disposal of cannabis, but also laws and regulations in Regarding health and safety, the behavior of cannabis operations and environmental protection. To the knowledge of HEXO’s management, HEXO and 48North have followed all of these laws and will continue to do so after the agreement is entered into. More specifically, HEXO, to the knowledge of HEXO’s management, complies with applicable laws in the jurisdictions in which it operates. Changes to these laws, regulations and policies due to matters beyond the control of HEXO and 48North could adversely affect the joint business operations of HEXO and 48North.
Advisor and advisor
Cormark Securities Inc. acted as financial advisor to 48North. Norton Rose Fulbright Canada LLP served as legal counsel for HEXO and Bennett Jones LLP served as legal counsel for 48North.