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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 6, 2022

 

Tilray Brands, Inc.

(Exact name of Registrant as Specified in Its Charter)

 

 

Delaware	001-38594	82-4310622
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)
265 Talbot Street West, Leamington, ON		N8H 5L4
(Address of Principal Executive Offices,		(Zip Code)

Registrant’s Telephone Number, Including Area Code: (844) 845-7291

Not applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Class 2 Common Stock, $0.0001 par value per share		TLRY		The Nasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

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Item 2.02

Results of Operations and Financial Condition.

On April 6, 2022, Tilray Brands, Inc. (“Tilray”) issued a press release announcing financial results for its third quarter ended February 28, 2022. A copy of the press release is furnished herewith as Exhibit 99.1.

The information in this current report on Form 8-K, including the press release attached as Exhibit 99.1 hereto, is being furnished, but shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. The information contained herein and in the accompanying exhibit shall not be incorporated by reference into any filing with the U.S. Securities and Exchange Commission made by Tilray, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

 

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits

 

Exhibit Number		Description
99.1		Press Release of Tilray Brands, Inc., dated April 6, 2022
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

		Tilray Brands, Inc.
Date:  April 6, 2022		By:	/s/ Mitchell Gendel
			Global General Counsel

 

 

 

Tilray Brands, Inc. Reports Third Quarter Fiscal Year 2022 Financial Results

 

 

 

 

 

 

 

 

LEAMINGTON, ON and NEW YORK – April 6, 2022 – Tilray Brands, Inc. (“Tilray” or the “Company”) (Nasdaq: TLRY; TSX: TLRY), a leading global cannabis-lifestyle and consumer packaged goods company inspiring and empowering the worldwide community to live their very best life, today reported financial results for the third fiscal quarter ended February 28, 2022. All financial information in this press release is reported in U.S. dollars, unless otherwise indicated.

 

Irwin D. Simon, Tilray’s Chairman and Chief Executive Officer, stated, “Our third quarter results reflect progress and momentum across all of our key business segments and geographies, setting the stage to achieve our target for $4B in revenue by the end of fiscal 2024. Tilray Medical – which now operates under a cohesive strategy and mission – has a near 20% share in Germany, providing clear benefits in its own right as well as a first-mover advantage that we will leverage as Germany and the EU move towards broader adult-use and medical use legalization. In Canada, we maintained our leading market share position amid intense competition – and believe that our strong capital position, operational excellence and pricing and marketing adjustments will work in concert to help ensure we reclaim share in the coming quarters. This effort will gain further support from the fundamental appeal of our brands and product innovation which, as stores continue re-opening, will resonate powerfully with consumers. In the U.S., our SweetWater Brewing, Breckenridge Distillery, and Manitoba Harvest businesses are profitable, growing and emerging as nationwide, iconic brands with loyal followings that will be home to THC-based products upon U.S. federal legalization.”

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Mr. Simon continued, “We also continued sourcing and executing strategic and shareholder-friendly transactions that provide value with notable upside. Our most recent example is the proposed agreement to purchase the HEXO senior secured convertible notes, which provides a path for meaningful future equity ownership of HEXO as it executes on its transformation. The proposed HEXO transaction is also expected to facilitate complementary commercial and product innovation and drive production and operating efficiencies. As the global economy re-opens, we are confident that the global cannabis powerhouse at the heart of the Tilray Brands’ value proposition will deliver sustained and tangible shareholder value.”

 

Financial Highlights – Third Quarter Fiscal 2022

 

 

Strategic Growth Actions

 

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Growth and High Potential Across Key Markets

 

#1 Market Leading Position in Germany and Poised to Accelerate Strategic Growth Initiatives Upon Adult-Use Legalization –Today, Germany remains the largest medical cannabis market in Europe and is expected to also be one of the largest adult use markets as well upon legalization. We are already the leader in medical cannabis within Germany with a market share of approximately 20% with our whole flower, extracts and Dronabinol products and, this, together with our investments in infrastructure, brands and people, positions us exceptionally well for adult-use cannabis legalization.

 

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Strategic Expansion Across the EU – Tilray Brands’ success across the EU, a powerful growth market worth potentially $1 billion for the Company, is backed by its two state-of-the-art cultivation facilities in Portugal and Germany that provide EU GMP certified pharmaceutical-grade medical cannabis across the region. This unparalleled production capability coupled with Tilray Brands’ sales arrangements through major distribution channels in Germany, the UK, and other key markets, coupled with the strong relationships with local governments and the trust of our patients, gives Tilray Brands the ability to drive accelerated growth.

 

#1 Leading Cannabis Market Share in Canada – Amid an intensely competitive and over-saturated market, Tilray Brands remains the market leader in the CAD$4.26 billion Canadian cannabis market, driven by a portfolio of carefully curated brands across all consumer segments; medical, wellness, innovative cannabis 2.0 products across concentrates, edibles, and drinks; processing capacity; and distribution. In order to address the saturated marketplace, Tilray Brands has implemented strategic price adjustments, expanded distribution through its coast-to-coast agreement with Rose Life Sciences and Great North Distributors, and increased our focus on and accelerated product innovation. Proposed alliance with Hexo Corp. (NASDAQ: HEXO) (TSX: HEXO.TO) would bring together Canada’s top two cannabis market share leaders to strengthen operational efficiencies and product innovation to benefit consumers, shareholders, and the cannabis industry.

 

A Leading U.S. CPG Platform with Operational Strength, Leadership Expertise, and Optionality to be Immediately Leveraged for Cannabis Products Upon Federal Legalization - In the U.S., Tilray Brands’ operating businesses include SweetWater Brewing Company, the 11th largest craft brewer in the nation and leading lifestyle brand, Breckenridge Distillery, and Manitoba Harvest, a pioneer in hemp, CBD and wellness products. Together, they generate approximately $100 million in revenue and are EBITDA and cash flow positive and will expand in the near term into CBD adjacencies and THC-based products upon legalization. Further, the Company continues to build its U.S. platform, including through its prior acquisition of a majority of the outstanding senior secured convertible notes of MedMen Enterprises Inc. (CSE: MMEN) (OTCQX: MMNFF) – which marked a critical step towards delivering on its objective of leading the U.S. cannabis market upon federal legalization.

 

Live Conference Call and Audio Webcast

 

Tilray Brands will host a live conference call and audio webcast to discuss these results today at 8:30 am Eastern Time, details of which are provided below.

 

Call-in Number: (877) 407-0792 from Canada and the U.S. or (201) 689-8263 from international locations. Please dial in at least 10 minutes prior to the start time.

 

A telephone replay will be available approximately two hours after the call concludes through April 22, 2022. To access the recording dial (844)-512-2921 from Canada and the U.S. or (412) 317-6671 from international locations and use the passcode 13728025.

 

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There will be a simultaneous, live webcast available on the Investors section of Tilray Brands’ website at www.tilray.com. The webcast will also be archived. Additionally, Tilray's third quarter earnings call will be syndicated live to retail investors on the Public.com app.

 

About Tilray Brands

 

Tilray Brands, Inc. (Nasdaq | 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 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.

 

Forward-Looking Statements

 

Certain statements in this communication that are not historical facts 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: the Company’s ability to become the world's leading cannabis-focused consumer branded company; the Company’s ability to achieve market share and revenue growth in particular markets, including in Canada, the U.S. and the EU; our ability to achieve $4B in revenue by the end of fiscal 2024 and projected cost savings; and the likelihood and timing of any cannabis legislation in the U.S., Germany and other jurisdictions.  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 most recently filed annual information form of Tilray and the Annual Report on Form 10-K (and other periodic reports filed with the SEC) of Tilray made with the SEC and available on EDGAR.

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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.

 

Use of Non-U.S. GAAP Financial Measures

 

This press release and the accompanying tables include non-GAAP financial measures, including adjusted gross margin, Adjusted EBITDA and adjusted free cash flow. Management believes that the non-GAAP financial measures presented provide useful additional information to investors about current trends in the Company's operations and are useful for period-over-period comparisons of operations. These non-GAAP financial measures should not be considered in isolation or as a substitute for the comparable GAAP measures. In addition, these non-GAAP measures may not be the same as similar measures provided by other companies due to potential differences in methods of calculation and items being excluded. They should be read only in connection with the Company's Consolidated Statements of Operations and Cash Flows presented in accordance with GAAP.

 

Adjusted EBITDA is calculated as net income (loss) before finance expense, net; non-operating expense (income), net; amortization; stock-based compensation; facility start-up and closure costs; inventory valuation adjustment; lease expense; and transaction costs.  A reconciliation of Adjusted EBITDA to net loss, the most directly comparable GAAP measure, has been provided in the financial statement tables included below in this press release. Gross margin, excluding inventory valuation adjustments, is calculated as revenue less cost of sales adjusted to add back inventory valuation adjustments and amortization of inventory step-up, divided by revenue. A reconciliation of Gross margin, excluding inventory valuation adjustments, to gross margin, the most directly comparable GAAP measure, has been provided in the financial statement tables included below in this press release. Free cash flow is comprised of two GAAP measures deducted from each other which are net cash flow provided by (used in) operating activities less investments in capital and intangible assets. Adjusted free cash flow removes the cash impact of acquisitions from free cash flow. A reconciliation of net cash flow provided by (used in) operating activities to free cash flow and to adjusted cash flows, the most directly comparable GAAP measure, has been provided in the financial statement tables included below in this press release.

 

For further information:

 

Media: Berrin Noorata, news@tilray.com

Investors: Raphael Gross, +1-203-682-8253, Raphael.Gross@icrinc.com

 

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Consolidated Statements of Financial Position

 

 

 

 

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Condensed Consolidated Statements of Net Income (Loss) and Comprehensive (Loss)

 

 

 

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Net Revenue by Operating Segment

 

 

 

Net Cannabis Revenue by Market Channel

 

 

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Other Financial Information: Gross Margin and Adjusted Gross Margin

 

 

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Other Financial Information: Adjusted Earnings before Interest, Taxes, and Amortization

 

 

Other Financial Information: Free Cash Flow and Adjusted Free Cash Flow

 

 

 

 

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