Tilray Brands, Inc. (“Tilray” or the “Company”) (Nasdaq: TLRY; TSX:
TLRY), a leading global cannabis-lifestyle and consumer packaged
goods company, today announced that it has commenced a registered
offering of $150 million aggregate principal amount of Convertible
Senior Notes due 2027 (the “Notes”). Tilray also expects to grant a
30-day option to the underwriters of the Notes offering to purchase
up to an additional $22.5 million aggregate principal amount of
Notes, solely to cover over-allotments. The offering is subject to
market and other conditions, and there can be no assurance as to
whether or when the offering may be completed, if at all, or as to
the actual size or terms of the offering. Tilray intends to use a
portion of the net proceeds from this offering to finance the
concurrent repurchase of a portion of its outstanding 5.00%
Convertible Senior Notes due 2023 and/or 5.25% Convertible Senior
Notes due 2024, as described below, and the remainder of the net
proceeds for general corporate purposes.
The Notes will be senior unsecured obligations of
Tilray, will accrue interest payable semiannually in arrears, and
will mature on June 15, 2027, unless earlier repurchased, redeemed
or converted. Noteholders will have the right to convert their
Notes into shares of Tilray’s common stock at their option, at any
time, until the close of business on the second scheduled trading
day immediately before the maturity date. The Notes will be
redeemable, in whole and not in part, at Tilray’s option at any
time on or after June 20, 2025 at a cash redemption price equal to
the principal amount of the notes to be redeemed, plus accrued and
unpaid interest, if any, to, but excluding, the redemption date,
but only if the last reported sale price of Tilray’s common stock
exceeds 130% of the conversion price for a specified period of
time. The interest rate, initial conversion rate, and the other
terms of the Notes, will be determined at the time of pricing of
the offering.
In connection with the Company’s offering of the
Notes, the Company expects to enter into a share lending agreement
with an affiliate of Jefferies LLC (the “Share Borrower”), under
which it will lend to the Share Borrower shares of the Company’s
common stock. The borrowed shares will be newly-issued shares
issued in connection with the offering of the Notes and will be
held as treasury shares upon the expiration or early termination of
the share lending agreement.
Purchasers of the Notes may separately sell shares
of the Company’s common stock that they may borrow through the
Share Borrower. The Company expects that the selling stockholders
will use the short position created by such sales to establish
their initial hedge with respect to their investments in the Notes.
The Company will not receive any proceeds from the expected sale of
the borrowed shares from the Note purchasers.
Contemporaneously with the pricing of the Notes in
the offering, Tilray intends to enter into separate privately
negotiated transactions with certain holders of the 2023 notes
and/or 2024 notes to repurchase a portion of such notes on terms to
be negotiated with such holders (each a “note repurchase” and
collectively the “notes repurchases”). The terms of each note
repurchase are anticipated to be negotiated on an individual basis
and will depend on several factors, including the market price of
Tilray’s common stock and the trading price of the 2023 notes and
2024 notes at the time of each such note repurchase. No assurance
can be given as to how much, if any, of the 2023 notes and/or 2024
notes will be repurchased or the terms on which they will be
repurchased.
Tilray expects that certain holders of 2023 notes
and/or 2024 notes that sell their 2023 notes and/or 2024 notes in
negotiated transactions with Tilray may enter into or unwind
various derivatives with respect to Tilray’s common stock and/or
purchase shares of its common stock in the market. The amount of
Tilray’s common stock that such holders purchase may be substantial
in relation to the historic average daily trading volume of the
common stock. In addition, Tilray expects that certain purchasers
of the Notes may establish a short position with respect to its
common stock by short selling the common stock or by entering into
short derivative positions with respect to the common stock, in
each case, in connection with the offering. The net effect of the
above market activities by holders of 2023 notes and/or 2024 notes
and purchasers of the Notes could increase (or reduce the size of
any decrease in) or decrease (or reduce the size of any increase
in) the market price of Tilray’s common stock, the market price of
the Notes and/or the initial conversion price of the Notes, and
Tilray cannot predict the magnitude of such market activities or
the overall effect that will have on the market price of the Notes,
the market price of its common stock or the initial conversion
price of the Notes.
Jefferies LLC and BofA Securities are acting as
the joint bookrunners and underwriters for the Notes offering.
The offering of the Notes and the offering of the
Company’s common stock by the selling stockholders will be made by
means of separate prospectus supplements to the prospectus forming
a part of the Company’s effective shelf registration statement
filed with the Securities and Exchange Commission (the “SEC”) on
October 7, 2022, under the Securities Act of 1933, as amended. You
may obtain these documents for free by visiting the SEC’s website
at www.sec.gov. The final prospectus supplements relating to
the offering of the Notes and the offering of the Company’s common
stock will be filed with the SEC. When available, copies of
the final prospectus supplements may also be obtained by
contacting: Jefferies LLC, Attn: Equity Syndicate Prospectus
Department, 520 Madison Avenue, New York, New York 10022,
Telephone: (877) 821-7388, Email:
Prospectus_Department@Jefferies.com., or from BofA Securities,
NC1-022-02-25, 201 North Tryon Street, Charlotte, NC 28255-0001,
Attn: Prospectus Department or email at
dg.prospectus_requests@bofa.com. Before you invest, you should read
the prospectus supplements and accompanying base prospectus, the
registration statement and the other documents that the Company has
filed with the SEC as incorporated by reference therein, for more
complete information about the Company and the offerings.
This press release is neither an offer to sell nor
a solicitation of an offer to buy the Notes, the Company’s common
stock or any other securities, nor shall it constitute an offer,
solicitation or sale of any securities in any state or jurisdiction
in which such offer, solicitation or sale would be unlawful prior
to the registration or qualification under the securities laws of
any such state or jurisdiction.
About Tilray Brands
Tilray Brands, Inc. (Nasdaq: TLRY; TSX: TLRY), is
a leading global cannabis-lifestyle and consumer packaged goods
company with operations in Canada, the United States, Europe,
Australia, and Latin America that is changing people's lives for
the better - one person at a time. Tilray Brands delivers on this
mission by inspiring and empowering the worldwide community to live
their very best life, enhanced by moments of connection and
wellbeing. Patients and consumers trust Tilray Brands to be the
most responsible, trusted and market leading cannabis consumer
products company in the world with a portfolio of innovative,
high-quality and beloved brands that address the needs of the
consumers, customers and patients we serve. A pioneer in cannabis
research, cultivation, and distribution, Tilray Brands’
unprecedented production platform supports over 20 brands in over
20 countries, including comprehensive cannabis offerings,
hemp-based foods, and craft beverages.
Cautionary Note Regarding Forward-Looking
Statements
Certain statements in this press release
constitute forward-looking information
or forward-looking statements (together,
“forward-looking statements”) under Canadian securities laws
and within the meaning of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended, that are intended to be subject to the “safe
harbor” created by those sections and other applicable
laws. Forward-looking statements can be identified by
words such as “forecast,” “future,” “should,” “could,” “enable,”
“potential,” “contemplate,” “believe,” “anticipate,” “estimate,”
“plan,” “expect,” “intend,” “may,” “project,” “will,” “would” and
the negative of these terms or similar expressions, although not
all forward-looking statements contain these identifying
words. Certain material factors, estimates, goals, projections or
assumptions were used in drawing the conclusions contained in
the forward-looking statements throughout this
communication.
Forward-looking statements include statements
regarding our intentions, beliefs, projections, outlook, analyses
or current expectations concerning, among other things: estimates
of our financial information, including in respect of expected
revenues, margins, cash flow, profitability, and production of
cannabis; estimates of future costs applicable to sales, future
capital expenditures, future cost reductions, and projected
synergies including pre-tax synergies, cost savings and
efficiencies; our expectation to have scalable medical and
adult-use cannabis platforms to strengthen the leadership position
in Canada, internationally, and eventually in the United States; us
being well positioned in the European cannabis markets and our
ability to leverage our current European platforms; strategic and
financial benefits in connection with the acquisition of HEXO Corp.
by Tilray; the legalization of cannabis in the United States and us
being well positioned to compete in the United States market;
future sales and the impact to the trading price of our common
stock, including the expected shorting of the borrowed shares in
the concurrent offering; the projected growth in our market share
and growth in the European Union market; our expectation to offer a
diversified and branded product offering and distribution
footprint, world-class cultivation, processing and manufacturing
facilities; the proposed offering of the Notes, our entry into the
share lending agreement, the concurrent borrowing of shares, our
expectations with respect to granting the underwriters of the
offering a 30-day option to purchase additional Notes, the terms of
the concurrent notes repurchase, our intentions with respect to the
use of proceeds from the sale of the Notes, and the completion,
timing, terms and size of the proposed Notes offering.
Many factors could cause actual results,
performance or achievement to be materially different from
any forward-looking statements, and other risks and
uncertainties not presently known to the Company or that the
Company deems immaterial could also cause actual results or events
to differ materially from those expressed in
the forward-looking statements contained herein. For a
more detailed discussion of these risks and other factors, see the
caption “Risk Factors” in the prospectus supplement and the most
recently filed annual information form of the Company and the
Annual Report on Form 10-K (and other periodic reports filed with
the SEC) of the Company made with the SEC and available on EDGAR.
The forward-looking statements included in this
communication are made as of the date of this communication and the
Company does not undertake any obligation to publicly update
such forward-looking statements to reflect new
information, subsequent events or otherwise unless required by
applicable securities laws.
Media:Berrin Noorata,news@tilray.com
or
Investors:Raphael Gross,
+1-203-682-8253Raphael.Gross@icrinc.com
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