An activist shareholder of Hexo Corp. (TSX: HEXO) (Nasdaq: HEXO) is making more progress on his mission to change the course of the struggling producer.
On Tuesday, the company said it’s made a transition deal with Adam Arviv and his fund Kaos Capital to refresh Hexo’s board of directors.
The new board members are set to be elected at the upcoming annual shareholder meeting on March 8. At the meeting, investors will also vote on consolidating the firm’s shares to keep its listing on the Nasdaq.
The board will have seven or eight members, down from 10, a swift reversal from the firm’s plan to expand to 12 members suggested a week ago.
As part of the changes, board chair John Bell is stepping down.
“We’ll work closely with the management team as they continue to fast-track the company’s path to becoming a cash flow positive business,” Arviv said in a statement.
Read more: Hexo shareholder calls for board replacements as share price tanks
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Through his fund Kaos Capital, he owns around 3 per cent of Hexo’s outstanding shares. Arviv and his associates say they’ve agreed to support the refreshed board at the meeting.
CEO Scott Cooper says he looks forward to working with the refreshed board.
With the agreement, Cooper, Bell, Emilio Imbriglio and Adam Miron have resigned from the board, effective Monday.
Mark Attanasio, Rob Godfrey and Hélène Fortin have been appointed to the board.
Following a successful vote, the new board will be made up of seven independent directors: Attanasio (chair), Godfrey, Fortin, Rose Gage (vice-chair and chair of the ESG committee), Vincent Chiara, Peter Montour and William Montour.
Attanasio is currently a director of private investment fund Nocera Investment Corp, and has a background in equity management and accounting.
Hexo says it’s agreed to appoint an eighth director after the meeting.
In a statement on Feb. 3, Arviv called for a refreshed board following Hexo’s disappointing performance. He nominated himself, along with Attanasio, Godfrey and two other associates that won’t stand for election.
Hexo previously called Arviv’s public efforts an “unhelpful distraction” to the firm’s plan to become cash-flow positive.
Company stock fell 7 per cent Monday to US$0.55 on the Nasdaq.
nick@mugglehead.com
