The information in this preliminary prospectus supplement and the accompanying prospectus is not complete and may be changed. This preliminary prospectus supplement and the accompanying prospectus are not an offer to sell, nor are they soliciting an offer to buy, the notes in any jurisdiction where the offer or sale is not permitted.
Filed Pursuant to Rule 424(b)(2)
Registration No. 333-267788
SUBJECT TO COMPLETION, DATED MAY 25, 2023
PRELIMINARY PROSPECTUS SUPPLEMENT
(To prospectus dated October 7, 2022)
% Convertible Senior Notes due 2027
We are offering $150,000,000 aggregate principal amount of our % convertible senior notes due 2027 (the “notes”). In addition, we have granted the underwriters an option, exercisable for a period of 30 days from the date of this prospectus supplement, to purchase up to an additional $22,500,000 aggregate principal amount of notes, solely to cover over-allotments.
We will pay interest on the notes at an annual rate of %, payable semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2023. The notes will mature on June 15, 2027, unless earlier repurchased, redeemed or converted.
Noteholders may convert their notes at their option at any time until the close of business on the second scheduled trading day immediately before the maturity date. Upon conversion of the notes, we will deliver for each $1,000 principal amount of notes converted a number of shares of our common stock, par value $0.0001 per share (our “common stock”), together with cash in lieu of any fractional share, equal to the conversion rate. The initial conversion rate is shares per $1,000 principal amount of notes, which represents an initial conversion price of approximately $ per share, and is subject to adjustment as described in this prospectus supplement. If a “make-whole fundamental change” (as defined in this prospectus supplement) occurs, then we will in certain circumstances increase the conversion rate for a specified period of time.
The notes will be redeemable, in whole and not in part, at our 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 per share of our common stock exceeds 130% of the conversion price on (1) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date we send the related redemption notice; and (2) the trading day immediately before the date we send such notice. In addition, calling the notes for redemption will constitute a make-whole fundamental change, which will require us to increase the conversion rate in certain circumstances.
If a “fundamental change” (as defined in this prospectus supplement) occurs at any time prior to the maturity date, then, except as described in this prospectus supplement, noteholders may require us to repurchase their notes at a cash repurchase price equal to the principal amount of the notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date.
The notes will be our general unsecured obligations and will: rank senior in right of payment to all of our indebtedness that is expressly subordinated in right of payment to the notes; rank equal in right of payment with all of our indebtedness that is not so subordinated, including our 5.00% Convertible Senior Notes due 2023 (our “2023 notes”), our 4.00% Convertible Promissory Note due 2023 (our “HTI convertible note”) and our 5.25% Convertible Senior Notes due 2024 (our “2024 notes”); effectively rank junior to any of our secured indebtedness to the extent of the value of the assets securing such indebtedness; and rank structurally junior to all indebtedness and other liabilities (including trade payables) of our subsidiaries.
No public market currently exists for the notes, and we do not intend to apply to list the notes on any securities exchange or for quotation on any inter-dealer quotation system. Our common stock is listed on The Nasdaq Global Select Market under the symbol “TLRY.” On May 24, 2023, the last reported sale price of our common stock was $2.42 per share.
Public offering price(1)
Proceeds, before expenses, to us
Plus accrued interest, if any, from May , 2023.
See “Underwriting” for additional disclosure regarding underwriting discounts and commissions and estimated expenses.
Concurrently with this offering and by means of a separate prospectus supplement and accompanying prospectus, up to shares of our common stock will be offered by selling stockholders, who will borrow such shares through lending arrangements from an affiliate of Jefferies LLC, which, as Share Borrower, is borrowing the shares from us. The borrowed shares are newly-issued shares issued in connection with this transaction and will be held as treasury shares by us upon the expiration or the early termination of the share lending arrangements described herein. We expect that the selling stockholders will sell the borrowed shares and use the resulting short position to establish their initial hedge with respect to their investments in the notes. The selling stockholders may effect such transactions by selling the borrowed shares at various prices from time to time through the Share Borrower or its affiliates. The selling stockholders will receive all of the net proceeds from the sale of the borrowed shares, and we will not receive any of those proceeds, but we will receive from the Share Borrower a one-time nominal fee of $0.0001 per share for each newly issued share. The concurrent offering of the borrowed shares is conditioned upon the closing of this offering.
Investing in the notes involves risks. See “Risk Factors” beginning on page S-9
Neither the Securities and Exchange Commission nor any state or foreign securities commission or regulatory authority has approved or disapproved of the notes or the shares of our common stock, if any, issuable upon the conversion of the notes or passed upon the adequacy or accuracy of this prospectus supplement or the accompanying base prospectus. Any representation to the contrary is a criminal offense.
We expect to deliver the notes in book-entry form through the facilities of The Depository Trust Company on or about , 2023.
The date of this prospectus supplement is , 2023.