June 14, 2022 – Tilray Brands (NASDAQ:TLRY) amended the terms to acquire the remaining US$185M outstanding principal balance of a debt issued by cannabis peer Hexo (HEXO) to funds affiliated with HT Investments.
Under the amended terms of the agreement, Tilray will pay 89.2% of the then outstanding principal balance for the HEXO Note which equals to a 10.8% discount on the outstanding principal amount.
The initial conversion price of the note will be lowered from C$0.85/share to C$0.40 per share. Tilray said it would have the right to convert into ~50% of outstanding common stock of Hexo.
Tilray addded that the purchase price will consist of a US$50M convertible unsecured note and the balance in either cash or Tilray class 2 common stock or any combination at Tilray’s option.
The companies expect to close the transaction by July 15 and the amended also extend the outside date for closing the transactions to Aug. 1.
Tilray noted that the strategic alliance with Hexo is expected to save up to $80M in cost within two year of closing of the transaction.