Item 2.01 Completion of Acquisition or Disposition of Assets.
On December 12, 2019, Tilray, Inc. (Tilray) completed its transaction with Privateer Holdings, Inc., a Delaware corporation
(Privateer), in accordance with the terms of the Agreement and Plan of Merger and Reorganization, dated as of September 9, 2019 (the Merger Agreement) by and among Tilray, Privateer, Down River Merger Sub, LLC, a
Delaware limited liability company and wholly owned subsidiary of Tilray (Merger Sub) and Michael Blue, as the Stockholder Representative. Pursuant to the terms described in the Merger Agreement, Privateer merged with and into Merger Sub
(the Merger), with Merger Sub surviving the Merger as a wholly owned subsidiary of Tilray.
Subject to the terms and conditions of the Merger
Agreement, at the effective time of the Merger, each share of Privateer capital stock outstanding immediately prior to the effective time of the Merger (excluding shares of Privateers capital stock held as treasury stock and dissenters
shares) were cancelled and automatically converted solely into the right to receive the applicable portion of the merger consideration, calculated in accordance with and as set forth in an allocation certificate as described in more detail in the
Merger Agreement, of an aggregate of 56,121,310 shares of Tilray Class 2 common stock and 16,666,665 shares of Tilray Class 1 common stock (inclusive of 6,565,127 shares of Tilray Class 2 common stock held in escrow to be cancelled in
satisfaction of any indemnification claims by Tilray under the Merger Agreement, and otherwise for contingent release to Privateers stockholders following a period of at least 18 months after the Merger). Pursuant to the Merger Agreement,
Tilray also assumed Privateers equity incentive plan and the stock options for Privateers capital stock outstanding thereunder immediately prior to the Merger, with such stock options henceforth representing the right to purchase a
number of shares of Tilray Class 2 common stock equal to the Option Exchange Ratio, as defined in the Merger Agreement, multiplied by the number of shares of Privateers common stock previously represented by such options (the
Assumed Options). The aggregate number of shares of Tilray Class 2 common stock issuable upon the exercise of the Assumed Options is 3,134,431. Tilray intends to file a Registration Statement on Form
S-8 with the Securities and Exchange Commission (the SEC) with respect to the shares of Tilray Class 2 common stock issuable upon exercise of the Assumed Options.
Immediately after the Merger, there were approximately 83,021,590 shares of Tilray Class 2 common stock and 16,666,665 shares of Tilray Class 1
common stock outstanding. Immediately after the Merger, (i) Privateers stockholders as of immediately prior to the effective time of the Merger owned approximately 73% of the outstanding capital stock of Tilray and approximately 89% of
the voting power of Tilray and (ii) the three founders of Privateer, namely Brendan Kennedy (Tilrays Chief Executive Officer and President, as well as a member of the board of directors of Tilray), Michael Blue, and Christian Groh
(collectively, the Founders), including affiliated individuals and entities, collectively beneficially owned approximately 31% of the outstanding capital stock of Tilray and approximately 72% of the voting power of Tilray.
Mr. Kennedy, an executive officer and member of Tilrays board of directors, was the Executive Chairman, a member of the board of directors and the largest stockholder of Privateer prior to the Merger. Michael Auerbach, a member of
Tilrays board of directors, was a member of the board of directors and a stockholder of Privateer prior to the Merger.
The shares of Tilray
Class 2 common stock issuable to the former stockholders of Privateer were registered with the SEC on a Registration Statement on Form S-4 (File
No. 333-234160), as amended.
The foregoing description of the Merger Agreement does not purport to be
complete and is qualified in its entirety by reference to the full text of the Merger Agreement that was filed as Exhibit 2.1 to Tilrays Current Report on Form 8-K filed with the SEC on
September 10, 2019, and incorporated herein by reference.