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 Privateer’s 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 Privateer’s stockholders following a period of at least 18 months after the Merger). Pursuant to the Merger Agreement,
Tilray also assumed Privateer’s equity incentive plan and the stock options for Privateer’s 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 Privateer’s 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) Privateer’s 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 (Tilray’s 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 Tilray’s 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
Tilray’s 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 Tilray’s Current Report on Form 8-K filed with the SEC on
September 10, 2019, and incorporated herein by reference.
Item 3.03 Material Modification to Rights of Security Holders.
On December 6, 2019, Tilray held a Special Meeting of Stockholders (the “Special Meeting”) at 10:00 a.m., local time, at the offices of
Cooley LLP, 1700 Seventh Avenue, Suite 1900, Seattle, Washington 98101-1355. At the Special Meeting, the Tilray stockholders approved the Tilray Amended and Restated Certificate of Incorporation (as amended, the “Tilray Restated
Certificate”). On December 12, 2019, in connection with, and immediately following, the Merger, Tilray filed the Tilray Restated Certificate.
Pursuant to the Tilray Restated Certificate, each share of Tilray Class 1 common stock is convertible at any time at the option of the holder into one
share of Class 2 common stock. In addition, each share of Class 1 common stock will automatically convert into one share of Class 2 common stock upon any transfer, whether or not for value and whether voluntary or involuntary or by
operation of law, except for certain transfers described in the Tilray Restated Certificate, including certain transfers for tax and estate planning purposes. The Tilray Restated Certificate eliminated the exception for transfers among Founders,
including the exception for the entry into certain voting arrangements among Founders. Upon the date on which the outstanding shares of Class 1 common stock represent less than 10% of the aggregate number of shares of Class 1 common stock
and Class 2 common stock then outstanding, all outstanding shares of Class 1 common stock shall convert automatically into shares of Class 2 common stock, and no additional shares of Class 1 common stock will be issued.
The foregoing description of the Tilray Restated Certificate does not purport to be complete and is qualified in its entirety by reference to the full text of
the Tilray Restated Certificate, a copy of which is attached as Exhibit 3.1, and incorporated herein by reference.