Tilray Brands, Inc. (TLRY) Earnings Call Transcript & Summary

Welcome to the Special Meeting of Shareholders of Tilray. Thank you for joining us today. I'm Irwin Simon, Chief Executive Officer of the company. Joining me today for today's virtual meeting is Mitch Gendel, Global General Counsel and Corporate Secretary of the company; as well as [ Leah Grant ], the inspector of elections for this special meeting. I'd also like to introduce Chris Giordano from DLA Piper LLP, Legal Counsel to Tilray, who is also in attendance virtually. I now call the special meeting of stockholders to order. As you know, we're hosting today's meeting through a virtual online platform hosted by Broadridge Financial Solutions, Inc. We will now begin the business meeting set forth in the notice of special meeting and proxy statement. I will now turn things over to Leah.

Good morning. I have been appointed the inspector of election and will count and report the results of voting. As inspector of election, my function is to decide upon the qualifications of voters, accept their votes and when balloting on all matters is completed, to tally the final votes. I have signed the oath of inspector of election. The affidavit of mailing and the oath of inspector of election will be filed with the minutes of this special meeting. Shares held by Tilray stockholders who are virtually attending this meeting with a valid 16-digit control number are considered present in person for purposes of establishing a quorum. I can report that we have present, in person and by proxy, a sufficient number of shares to constitute a quorum, so the special meeting is duly constituted. A tally of all votes will be filed with the report of the inspector of election. We can now proceed with the business of the meeting. As Corporate Secretary, Mitch Gendel will record the minutes of the special meeting. I now turn things over to Mitch.

Thank you, Leah. The time is now 11:03 a.m. on Friday, September 10, 2021, and the polls are open for voting on all matters to be presented. If you intend to vote and have not already done so, you must submit your vote online before we close the polls in order for it to be counted. After I describe each item to be voted on, we will close the polls. We will not accept ballots, proxies, revocations or changes after the closing of the polls. If you have not yet voted, I encourage you to vote online now. If you have already submitted your vote in proxy and do not wish to change your vote, you do not need to vote now and your shares will be voted as previously instructed. On June 22, 2021, which was the record date fixed by the Board of Directors for determining the stockholders entitled to vote today, there were 449,165,558 shares of Tilray Class II common stock outstanding. I've received a list of the stockholders of record as of that date certified by Philadelphia Stock Transfer, the transfer agent of Tilray. The list of stockholders of record is available for inspection by stockholders of records during this meeting for any reason germane. Stockholders can view the list in the meeting materials section of the virtual shareholder meeting portal. I have proof by affidavit that notice of this meeting is [ constituted ], and that a proxy statement, a proxy card and a prepaid posted envelope have been furnished by Broadridge, commencing on June 25, 2021 to the stockholders of record as of the record date, June 22. This special meeting has been called to permit the stockholders to already consider and vote upon 6 proposals. The first proposal is to approve the amendment to the second amended and restated certificate of incorporation of Tilray, which I will refer to as a certificate of incorporation for the purpose of increasing Tilray's authorized capital. I will refer to this as the authorized shares proposal. The second proposal is to approve the amendment of the certificate of incorporation to elect not to be governed by Section 203 of the Delaware General Corporation Law. We will refer to this as the opt-out proposal. The third proposal is to approve an amendment to the certificate of incorporation to permit stockholders of the company to take action by written consent, which we will refer to as the act-by-written consent proposal. The fourth proposal is to approve the amendments to the certificate of incorporation relating to the following governance changes: elimination of the dual structure of Class I common stock and Class II common stock, and authorize the issuance of 2 classes of stock of the company; to declassify the Board of Directors of the company; to remove limitations on the corporate opportunity doctrine; and to provide that the Directors of the company may be removed with or without cause at any time by the holders of a majority of the voting power of the company's then outstanding shares of capital stock, subject to the rights of holders of preferred stock. We refer to these foregoing items as the governance proposal. The fifth proposal was to approve the amendments to the certificate of incorporation to affect other changes to eliminate certain provisions relating to the company's prior status as a control company, which are no longer applicable, and to make other administrative and conforming amendments and changes as necessary in light of the foregoing proposals. The sixth proposal is to approve the adjournment of the special meeting, if necessary, appropriate to solicit additional proxies if there were not sufficient votes to adopt the arrangement agreement, which we'll refer to as the adjournment proposal. The Board has previously determined it to be in the best interest of the company and its stockholders to approve each of these proposals, which are described in detail in the proxy statement distributed in connection with the solicitation of proxies for this special meeting. Again, if you intend to vote and have not already done so, you must submit your vote online now in order for it to be counted. We will not accept ballots, proxies, revocations or changes after the closing of the polls. If you have already submitted your vote by proxy and do not wish to change your vote, you do not need to vote now, and your shares again will be voted as previously instructed.

We will now record the votes on the proposal. This is your last opportunity to submit your vote online in order for it to be counted. [Voting]

Thanks, Irwin. The time is now 11:08 a.m. on Friday, September 10, 2021, and the polls for the proposed matters are now closed.

As inspector of election, I have examined the vote report and will now report the vote. The preliminary results based on the voting of shares represented by valid proxies on file and tabulated this morning show that: For proposal 1, the authorized share proposal, as described previously and in the proxy statement, it received 227,409,195 votes or 50.6% of the voting power of shares outstanding and entitled to vote; for proposals 2 through 5, the opt-out proposal, act-by-written consent proposal, governance proposals and conforming amendments proposal, as described previously and in the proxy statement, each received less than 50% of the voting power of shares outstanding and entitled to vote.

Thanks, Leah. A final vote tally for each of the above matters will be publicly disclosed in Tilray's public filings including a Form 8-K, which we expect to file later today. To confirm, the authorized shares proposal have received votes that are sufficient and required for approval is hereby declared approved by this meeting. Each of the opt-out proposal, the act-by-written consent proposal, the governance proposals and the conforming amendment proposals have not received the votes that are required for its approval and are hereby not -- hereby declared not approved at this meeting.

So this concludes the meeting for today. I declare the special meeting now terminated. I want to thank all our shareholders for joining us today in this virtual meeting. I want everybody to be out there, be safe, be healthy. And with these shares now, it allows us to go out and do what we said we're going to do. Our plan is how we grow Tilray to a $4 billion company, and that is through organic growth, accretive acquisitions using shares, coming up with new products, new innovation, looking at adjacency categories. I will tell you, this management team is working harder and harder every day for its shareholders. We have a vision for Tilray. We really feel the opportunities are there into this cannabis industry. We hope to see legalization in the U.S. coming in the near future. But in the meantime, we do have a strong business, a strong share in the Canadian market, and we'll continue to focus on growing that. We do have a strong medical business in the European market, and we'll continue to focus on growing that. We have some great brands within SweetWater and Manitoba Harvest, and we'll continue to focus on that. And with legalization, we hope to see that happening soon. Again, it's not necessarily in our hands. We made a bet on MedMen, which we're quite excited about it, with the opportunities there. If you have any questions, please send them to us, and we will answer them. With that, once again, I really appreciate all our shareholders that voted for this proposal. I know it took a lot of work. I know -- understanding what we're using these shares, I know your concern on dilution, but my commitment is to grow Tilray into the largest consumer cannabis company in the world and that our shareholders are rewarded for. Thank you very, very much, and I appreciate those that joined us today. And I appreciate you investing in shareholder and investing in us. Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.