VIDEO — HEXO CEO: Aggressive Pursuit of Clean Balance Sheet Has Reset Company

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The executive told INN he thinks mistakes from the past at HEXO are still affecting its present. His goal is to reset the company in his role as CEO, and this has started with its debt.

Bowman explained that the company's previous acquisition spree, particularly the structuring of debt to complete those deals, acted to “(drive) the stock price down.”

This year, HEXO announced a partnership through which Tilray ended up buying senior secured convertible notes issued by HEXO with a balance of US$173.7 million.

However, Tilray purchased the notes for US$155 million, resulting in a 10.8 percent discount.

According to the operators, as of July 11, the conversion price of the HEXO notes gives Tilray the right to convert into about 48 percent of the outstanding common stock of HEXO.

“What it allows us to do is, there’s certain synergies that the partnership … can potentially bring to the market,” the executive commented in conversation with INN.

Update on NASDAQ listing requirement

Shares of HEXO have seriously lagged for some time now, including in the US as part of its NASDAQ listing. The American listing carries a standard requirement of a minimum price per share of US$1.

In late July, the firm announced it had obtained an additional grace period from securities regulators to meet this listing requirement. The company now has until January 23, 2023, to regain the mandated compliance.

“That was the curveball as soon as I had taken on,” Bowman said, describing HEXO's challenges since he stepped up as CEO. He believes cost-cutting measures and the firm's realignment will lead to NASDAQ compliance.