It's a very bad sign when a company can't create positive cash flow and has to pay debt by issuing shares.
Tilray to issue 13.1M shares in debt-for-equity deal
Canadian cannabis player Tilray Brands (NASDAQ:TLRY) announced Tuesday it will issue up to 13.1M shares of the company as part of a private debt-for-equity exchange transaction it entered with an unrelated party.
The share issuance will be in exchange for convertible debt worth $19.8M in principal terms, the Leamington, Canada-based company said in a regulatory filing.
As part of the transaction, Tilray (TLRY) will exchange 5.25% convertible senior notes due June 1, 2024, for up to 13.1M shares of the company’s common stock, with a par value of $0.0001 per share.
Once the deal is complete, the company will not have any 2024 convertible notes that remain outstanding as of May 14, 2024, TLRY added.
The transaction comes weeks after Tilray (TLRY) said with its Q3 financials that it no longer expects to generate positive adj. free cash flow for FY24 due to delays in collecting cash from certain asset sales