Notice Regarding Forward-Looking Statements
Certain information in this communication constitutes 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, which are intended to be covered by the
safe harbor created by such sections and other applicable laws. The forward-looking statements are expressly qualified by this cautionary statement. Any information or statements that are contained in this communication that are not statements of
historical fact may be deemed to be forward-looking statements, including, but not limited to, statements in this communication with regards to: (i) statements relating to Aphrias and Tilrays strategic business combination and the
expected terms, timing and closing of the Arrangement including, receipt of required regulatory approvals, shareholder approvals, court approvals and satisfaction of other closing customary conditions; (ii) estimates of pro-forma financial information of the combined company, including in respect of expected revenues and production of cannabis; (iii) estimates of future costs applicable to sales;
(iv) estimates of future capital expenditures; (v) estimates of future cost reductions, synergies including pre-tax synergies, savings and efficiencies; (vi) statements that the
combined company anticipates to have scalable medical and adult-use cannabis platforms expected to strengthen the leadership position in Canada, United States and internationally;
(vii) statements that the combined company is expected to offer a diversified and branded product offering and distribution footprint, world-class cultivation, processing and manufacturing facilities; (viii) statements in respect of
operational efficiencies expected to be generated as a result of the Arrangement in the amount of more than C$100 million of pre-tax annual cost synergies; (ix) expectations of future balance sheet
strength and future equity; and (x) that the combined company is expected to unlock significant shareholder value. Aphria and Tilray use 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 to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Various assumptions were used in drawing the conclusions
contained in the forward-looking statements throughout this communication. Forward-looking statements reflect current beliefs of management of Aphria and Tilray with respect to future events and are based on information currently available to each
respective management including based on reasonable assumptions, estimates, internal and external analysis and opinions of management of Aphria and Tilray considering their experience, perception of trends, current conditions and expected
developments as well as other factors that each respective management believes to be relevant as at the date such statements are made. Forward-looking statements involve significant known and unknown risks and uncertainties. Many factors could cause
actual results, performance or achievement to be materially different from any future forward-looking statements. Factors that may cause such differences include, but are not limited to, risks assumptions and expectations described in Aphrias
and Tilrays critical accounting policies and estimates; the adoption and impact of certain accounting pronouncements; Aphrias and Tilrays future financial and operating performance; the competitive and business strategies of Aphria
and Tilray ; the intention to grow the business, operations and potential activities of Aphria and Tilray; the ability of Aphria and Tilray to complete the Arrangement; Aphrias and Tilrays ability to provide a return on investment;
Aphrias and Tilrays ability to maintain a strong financial position and manage costs, the ability of Aphria and Tilray to maximize the utilization of their existing assets and investments and that the completion of the Arrangement is
subject to the satisfaction or waiver of a number of conditions as set forth in the Arrangement Agreement. There can be no assurance as to when these conditions will be satisfied or waived, if at all, or that other events will not intervene to delay
or result in the failure to complete the Arrangement. There is a risk that some or all the expected benefits of the Arrangement may fail to materialize or may not occur within the time periods anticipated by Aphria and Tilray. The challenge of
coordinating previously independent businesses makes evaluating the business and future financial prospects of the combined company following the Arrangement difficult. Material risks that could cause actual results to differ from forward-looking
statements also include the inherent uncertainty associated with the financial and other projections; the prompt and effective integration of the combined company; the ability to achieve the anticipated synergies and value-creation contemplated by
the proposed transaction; the risk associated with Aphrias and Tilrays ability to obtain the approval of the proposed transaction by their shareholders required to consummate the proposed transaction and the timing of the closing of the
proposed transaction, including the risk that the conditions to the transaction are not satisfied on a timely basis or at all; the risk that a consent or authorization that may be required for the proposed transaction is not obtained or is obtained
subject to conditions that are not anticipated; the outcome of any legal proceedings that may be instituted against the parties and others related to the Arrangement Agreement; unanticipated difficulties or expenditures relating to the transaction,
the response of business partners and retention as a result of the announcement and pendency of the transaction; risks relating to the value of Tilrays common stock to be issued in connection with the transaction; the impact of competitive
responses to the announcement of the transaction; and the diversion of management time on transaction-related issues.
For a more detailed discussion of
risks and other factors, see the most recently filed annual information form of Aphria and the annual report filed on form 10-K of Tilray made with applicable securities regulatory authorities and
available on SEDAR and EDGAR. The forward-looking statements included in this communication are made as of the date of this communication and neither Aphria nor Tilray undertake any obligation to publicly update such forward-looking statements to
reflect new information, subsequent events or otherwise unless required by applicable securities laws.
Item 9.01
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Financial Statements and Exhibits.
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(a) Financial Statements of Businesses Acquired.
The audited consolidated financial statements of Aphria as of May 31, 2020 and May 31, 2019, and for the fiscal years ended May 31, 2020 and
2019 and the notes related thereto, as well as the unaudited interim consolidated financial statements of Aphria as of November 30, 2020 and May 31, 2020 and for the three and six months ended November 30, 2020 and 2019, and the notes
related thereto, are included in Exhibit 99.2.
(b) Pro Forma Financial Information
Our unaudited pro forma condensed combined balance sheet information as at December 31, 2020, which gives effect to the Arrangement as if
it had occurred on December 31, 2020, and our unaudited pro forma statement of net loss information for the year ended December 31, 2020, which gives effect to the Arrangement as if it had occurred on January 1, 2020, are filed as
Exhibit 99.1. The pro forma financial statements have been prepared for illustrative purposes only and may not be indicative of the operating results or financial condition that would have been achieved if the merger transaction had been completed
on the dates or for the periods presented, nor do they purport to project the results of operations or financial position for any future period or as of any future date. In addition to the pro forma adjustments, various other factors will have an
effect on the financial condition and results of operations after the completion of the merger transaction. The actual financial position and results of operations may differ materially from the pro forma amounts reflected herein due to a variety of
factors.
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