Tilray Brands Announces At-The-Market Program to Fund Strategic and Accretive Acquisitions and Accelerate Expansion Plan Upon U.S. Cannabis Rescheduling When Effective
Tilray Brands announced an at-the-market (ATM) equity program, allowing it to offer and sell up to $250 million in common stock. The sales will be conducted by TD Securities and Jefferies under an equity distribution agreement. The funds raised will be used for strategic acquisitions and investments, particularly in the U.S. and internationally, to capitalize on regulatory advancements. The timing and amount of sales will depend on market conditions. A registration statement and prospectus supplement have been filed with the SEC, making the offering effective immediately.
- Potential to raise up to $250 million for strategic acquisitions.
- Funds will target expansions and regulatory opportunities, focusing on the U.S. market.
- Flexibility in sales timing depending on market conditions.
- Partnership with established financial institutions TD Securities and Jefferies.
- Potential shareholder dilution due to increased stock offerings.
- Stock price may be volatile due to varying sale prices in the ATM program.
- No proceeds allocated for general working capital, which could limit operational flexibility.
Insights
The announcement of the at-the-market (ATM) equity program by Tilray Brands is a significant move that could have several financial implications for the company and its investors. The ability to raise up to
From a financial perspective, issuing new shares can dilute the current shareholders' equity, which might negatively affect the share price in the short term. However, if the funds raised are effectively used for accretive acquisitions that enhance the company's revenues and profitability, the long-term impact could be positive. Investors should monitor how Tilray deploys these funds and the success of the acquisitions or investments made using this capital.
It's also important to note that the sales prices of these new shares will be subject to market conditions at the time of sale, which adds an element of unpredictability. Investors need to consider the potential for share price volatility during the period of the ATM program's execution.
Tilray's move to establish an ATM program is indicative of its strategic positioning in the rapidly evolving cannabis market. The company’s intent to use the proceeds for strategic acquisitions and expansion is aligned with the anticipated regulatory changes in the U.S. cannabis industry. This proactive approach could position Tilray well to capitalize on market liberalization, providing it with first-mover advantages in newly accessible markets.
However, market dynamics in the cannabis industry are highly volatile and regulatory changes can be unpredictable. Investors should be aware of the regulatory landscape and how it might impact Tilray's expansion plans. The company's success will largely depend on its ability to navigate these changes and effectively integrate new acquisitions.
Moreover, the cannabis market is becoming increasingly competitive, with several players vying for market share. Tilray’s strategy to expedite its growth through acquisitions could help it consolidate its position, but there is also the risk of overpaying for assets or facing integration challenges. Investors should look for indicators of successful acquisitions and seamless integration as signs of positive outcomes from this strategy.
The legal framework around the cannabis industry remains complex, particularly in the context of U.S. regulations. Tilray’s announcement strategically aligns with the potential rescheduling of cannabis, which would mark a significant regulatory shift. This could facilitate broader market access and reduce legal barriers, benefiting companies like Tilray that are prepared to scale quickly.
However, regulatory changes are often slow and involve considerable uncertainty. Investors should be cautious about the timelines and specific outcomes of such regulatory shifts. Additionally, Tilray will need to ensure strict compliance with varying state and federal laws, which can be resource-intensive and complicated.
It's also important to consider the ongoing developments in regulatory policies internationally, as Tilray plans to use the funds for acquisitions both in the U.S. and globally. The company's legal team will need to adeptly manage these regulations to avoid any compliance issues that could negatively impact its operations and financial performance.
NEW YORK and LEAMINGTON, Ontario, May 17, 2024 (GLOBE NEWSWIRE) -- Tilray Brands, Inc. (“Tilray Brands” or the “Company”) (Nasdaq | TSX: TLRY), a leading global lifestyle and consumer packaged goods company inspiring and empowering the worldwide community to live their very best life, announced today that it has filed a prospectus supplement with the U.S. Securities and Exchange Commission (“SEC”), under which it may offer and sell shares of its common stock (“Common Stock”) having an aggregate offering value of up to
The Company has entered into an equity distribution agreement with TD Securities (USA) LLC (“TD Securities”) and Jefferies LLC (“Jefferies”). Pursuant to the equity distribution agreement, TD Securities and Jefferies may sell the Company’s Common Stock in transactions that are deemed an “at-the-market offering” defined in Rule 415 under the Securities Act of 1933, as amended, including sales made directly on or through the Nasdaq Global Select Market. The timing and amount of any such sales will be determined by a variety of factors considered by the Company. Sales may be made at market prices prevailing at the time of a sale or at prices related to prevailing market prices. As a result, sales prices may vary.
The Company currently intends to use the net proceeds from the ATM Program, if any, to fund strategic and accretive acquisitions or investments in businesses, including potential acquisitions of assets in the U.S. and internationally in order to capitalize on expected regulatory advancements or expansion opportunities. The Company does not currently intend to use the net proceeds from the ATM Program for general working capital purposes.
A registration statement on Form S-3 (File No. 333-267788) was filed with the SEC on October 7, 2022 and became effective automatically upon filing. A prospectus supplement and accompanying prospectus relating to the ATM Program was filed with the SEC on May 17, 2024. Prospective investors should read the prospectus supplement and accompanying prospectus, together with the documents incorporated by reference therein. Prospective investors may obtain these documents for free by visiting EDGAR on the SEC’s website at www.sec.gov. Alternatively, a copy of the prospectus supplement and accompanying prospectus relating to the offering may be obtained from TD Securities (USA) LLC, 1 Vanderbilt Avenue, New York, New York 10017, by telephone at (855) 495-9846 or by email at TD.ECM_Prospectus@tdsecurities.com or Jefferies LLC, Attn: Equity Syndicate Prospectus Department, 520 Madison Avenue, New York, NY 10022, by telephone at (877) 821-7388, or by email at Prospectus_Department@jefferies.com.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities, in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.
About Tilray Brands
Tilray Brands, Inc. (Nasdaq | TSX: TLRY), is a leading global 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 and providing access to products that meet the needs of their mind, body, and soul while invoking wellbeing. Patients and consumers trust Tilray Brands to deliver a cultivated experience and health and wellbeing through high-quality, differentiated brands and innovative products. 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.
For more information on how we open a world of wellbeing, visit www.Tilray.com.
Cautionary Statement Concerning 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 in this press release include, but are not limited to, the anticipated use of proceeds and any and all underlying assumptions and other statements that are other than statements of historical fact.
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 detailed discussion of these risks and other factors, see our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q and other reports filed 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.
For further information:
Tilray Brands
Media: News@tilray.com
Investors: Investors@tilray.com
FAQ
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