A day after reporting a net loss of more than half a billion dollars in fiscal 2020, Ottawa-based cannabis producer Hexo Corp. said Friday it plans to consolidate its shares in an effort to regain compliance with the US$1 minimum share price continued listing standard of the New York Stock Exchange.
The company said late Thursday it booked a net loss of $546.5 million for the fiscal year ending July 31, up from a loss of $69.6 million a year earlier.
While Hexo earned record net revenues of $27.1 million in the fourth quarter and its overall 2020 revenues jumped 70 per cent year-over-year to $80.6 million, the cannabis producer continues to accrue significant losses as it scales up production.
Investors gave the latest earnings report a cool reception. Shares in the company were down more than 17 per cent to 59 cents on the New York Stock Exchange on Thursday.
Hexo says avoiding a delisting of its shares from the NYSE is in the best interests of the company and its shareholders.
Under the proposal, shareholders will receive one post-consolidation share for every eight shares they hold.
Hexo says it will not issue fractional post-consolidation shares and that the number of post-consolidation shares issued to shareholders will be rounded up or down to the nearest whole number of shares.
The proposal needs shareholder approval at a meeting set for Dec. 11.
– With files from OBJ staff