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Rokmaster Resources Corp. — Interim / Quarterly Report 2026
Apr 1, 2026
46864_rns_2026-04-01_2b23e7fc-ecbf-4161-9cd9-ec62ab9df495.pdf
Interim / Quarterly Report
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PART I—FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited).
TILRAY BRANDS, INC.
Consolidated Statements of Financial Position
(in thousands of United States dollars, unaudited)
| February 28, 2026 | May 31, 2025 | |
|---|---|---|
| Assets | ||
| Current assets | ||
| Cash and cash equivalents | $ 204,620 | $ 221,666 |
| Restricted cash | 44,885 | — |
| Marketable securities | 15,312 | 34,697 |
| Accounts receivable, net | 118,372 | 121,489 |
| Inventory | 292,303 | 270,882 |
| Prepaids and other current assets | 40,819 | 34,092 |
| Assets held for sale | 2,449 | 5,800 |
| Total current assets | 718,760 | 688,626 |
| Capital assets | 543,008 | 568,433 |
| Operating lease, right-of-use assets | 17,939 | 22,279 |
| Digital assets | 614 | — |
| Intangible assets | 23,343 | 21,423 |
| Goodwill | 752,350 | 752,350 |
| Long-term investments | 7,634 | 10,132 |
| Other assets | 11,074 | 11,084 |
| Total assets | $ 2,074,722 | $ 2,074,327 |
| Liabilities | ||
| Current liabilities | ||
| Bank indebtedness | $ 8,834 | $ 7,181 |
| Accounts payable and accrued liabilities | 223,996 | 235,322 |
| Contingent consideration | — | 15,000 |
| Warrant liability | — | 1,092 |
| Current portion of lease liabilities | 7,259 | 6,941 |
| Current portion of long-term debt | 17,453 | 14,767 |
| Total current liabilities | 257,542 | 280,303 |
| Long - term liabilities | ||
| Lease liabilities | 60,282 | 64,925 |
| Long-term debt | 134,982 | 148,493 |
| Convertible debentures payable | 88,268 | 86,428 |
| Deferred tax liabilities, net | 7,877 | 3,748 |
| Other liabilities | 164 | 855 |
| Total liabilities | 549,115 | 584,752 |
| Commitments and contingencies (refer to Note 19) | ||
| Stockholders' equity | ||
| Common stock ($0.0001 par value; 1,416,000,000 common shares authorized; 116,546,939 and 106,067,875 common shares issued and outstanding, respectively)1 | 116 | 106 |
| Treasury Stock (321,391 and 200,422 treasury shares issued and outstanding, respectively)1 | — | — |
| Preferred shares ($0.0001 par value; 10,000,000 preferred shares authorized; nil and nil preferred shares issued and outstanding, respectively) | — | — |
| Additional paid-in capital | 6,520,501 | 6,401,657 |
| Accumulated other comprehensive loss | (44,198) | (43,063) |
| Accumulated deficit | (4,919,051) | (4,847,226) |
| Total Tilray Brands, Inc. stockholders' equity | 1,557,368 | 1,511,474 |
| Non-controlling interests | (31,761) | (21,899) |
| Total stockholders' equity | 1,525,607 | 1,489,575 |
| Total liabilities and stockholders' equity | $ 2,074,722 | $ 2,074,327 |
1 Current and prior year share amounts have been retrospectively adjusted to reflect the Reverse Stock Split (as defined below), which became effective on December 2, 2025. See Note 1 (Basis of presentation and summary of significant accounting policies).
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
TILRAY BRANDS, INC.
Consolidated Statements of Loss and Comprehensive Loss
(in thousands of United States dollars, except for share and per share data, unaudited)
| Three months ended | Nine months ended | |||
|---|---|---|---|---|
| February 28, 2026 | February 28, 2025 | February 28, 2026 | February 28, 2025 | |
| Net revenue | $ 206,732 | $ 185,780 | $ 633,740 | $ 596,774 |
| Cost of goods sold | 151,778 | 133,769 | 463,820 | 423,837 |
| Gross profit | 54,954 | 52,011 | 169,920 | 172,937 |
| Operating expenses: | ||||
| General and administrative | 50,228 | 39,246 | 142,456 | 129,356 |
| Selling | 10,617 | 13,905 | 35,321 | 41,757 |
| Amortization | 5,106 | 23,182 | 13,393 | 67,913 |
| Marketing and promotion | 8,692 | 6,793 | 28,828 | 28,079 |
| Research and development | 62 | 85 | 181 | 250 |
| Change in fair value of contingent consideration | — | — | (15,000) | — |
| Impairment of intangible assets and goodwill | — | 699,235 | — | 699,235 |
| Other than temporary change in fair value of convertible notes receivable | — | 20,000 | — | 20,000 |
| Litigation costs, net of recoveries | 621 | 2,758 | 2,497 | 5,254 |
| Restructuring costs | 4,087 | 6,133 | 5,921 | 17,249 |
| Transaction costs (income), net | 1,927 | 605 | 2,896 | 2,563 |
| Total operating expenses | 81,340 | 811,942 | 216,493 | 1,011,656 |
| Operating loss | (26,386) | (759,931) | (46,573) | (838,719) |
| Interest expense, net | (4,965) | (8,378) | (17,035) | (25,986) |
| Non-operating income (expense), net | 8,092 | (24,022) | (386) | (44,631) |
| Loss before income taxes | (23,259) | (792,331) | (63,994) | (909,336) |
| Income tax expense (recovery), net | 1,974 | 1,203 | 3,235 | 4,125 |
| Net loss | $ (25,233) | $ (793,534) | $ (67,229) | $ (913,461) |
| Total net income (loss) attributable to: | ||||
| Stockholders of Tilray Brands, Inc. | (26,572) | (789,436) | (71,825) | (913,943) |
| Non-controlling interests | 1,339 | (4,098) | 4,596 | 482 |
| Other comprehensive gain (loss), net of tax | ||||
| Foreign currency translation gain (loss) | (4,687) | (5,389) | (411) | (10,195) |
| Comprehensive loss | $ (29,920) | $ (798,923) | $ (67,640) | $ (923,656) |
| Total comprehensive income (loss) attributable to: | ||||
| Stockholders of Tilray Brands, Inc. | (31,477) | (794,414) | (72,960) | (923,379) |
| Non-controlling interests | 1,557 | (4,509) | 5,320 | (277) |
| Weighted average number of common shares - basic¹ | 112,675,734 | 90,834,279 | 109,657,744 | 86,079,372 |
| Weighted average number of common shares - diluted¹ | 112,675,734 | 90,834,279 | 109,657,744 | 86,079,372 |
| Net loss per share - basic¹ | $ (0.24) | $ (8.69) | $ (0.65) | $ (10.62) |
| Net loss per share - diluted¹ | $ (0.24) | $ (8.69) | $ (0.65) | $ (10.62) |
¹Current and prior year share and amounts have been retrospectively adjusted to reflect the Reverse Stock Split, which became effective on December 2, 2025. See Note 1 (Basis of presentation and summary of significant accounting policies).
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
TILRAY BRANDS, INC.
Consolidated Statements of Stockholders' Equity
(in thousands of United States dollars, except for share data, unaudited)
| Number of common shares1 | Common Stock | Number of treasury shares1 | Treasury stock | Additional paid-in capital | Accumulated other comprehensive loss | Accumulated Deficit | Non-controlling interests | Total | |
|---|---|---|---|---|---|---|---|---|---|
| Balance at May 31, 2024 | 83,192,537 | $ 83 | — | $ — | $ 6,146,810 | $(43,499) | $(2,660,488) | $ 272 | $ 3,443,178 |
| Share issuance - At-the-Market ("ATM") program | 3,669,331 | 4 | — | — | 66,468 | — | — | — | 66,472 |
| Share issuance - RSUs exercised | 682,314 | 1 | — | — | (1) | — | — | — | — |
| Share issuance - options exercised | 301 | — | — | — | — | — | — | — | — |
| Shares effectively repurchased for employee withholding tax | — | — | — | — | (2,661) | — | — | — | (2,661) |
| Stock-based compensation | — | — | — | — | 6,917 | — | — | — | 6,917 |
| Comprehensive income (loss) for the period | — | — | — | — | — | 3,622 | (39,165) | 5,051 | (30,492) |
| Balance at August 31, 2024 | 87,544,483 | $ 88 | — | $ — | $ 6,217,533 | $(39,877) | $(2,699,653) | $ 5,323 | $ 3,483,414 |
| Share issuance - At-the-Market ("ATM") program | 3,051,756 | 3 | — | — | 45,041 | — | — | — | 45,044 |
| Share issuance - Repurchase of TLRY 27 convertible note | 1,003,464 | 1 | (368,261) | — | 17,084 | — | — | — | 17,085 |
| Share issuance - Settlement of equity component of TLRY 27 convertible note | — | — | — | — | (4,931) | — | — | — | (4,931) |
| Share issuance - Double Diamond Holdings dividend settlement | 1,321,759 | 1 | — | — | 23,823 | — | — | (23,824) | — |
| Share issuance - RSUs exercised | 3,598 | — | — | — | — | — | — | — | — |
| Share issuance - options exercised | 735 | — | — | — | — | — | — | — | — |
| Stock-based compensation | — | — | — | — | 7,237 | — | — | — | 7,237 |
| Comprehensive loss for the period | — | — | — | — | — | (8,080) | (85,342) | (819) | (94,241) |
| Balance at November 30, 2024 | 92,925,795 | 93 | (368,261) | — | 6,305,787 | (47,957) | (2,784,995) | (19,320) | 3,453,608 |
| Share issuance - At-the-Market ("ATM") program | 2,639,994 | 3 | — | — | 28,219 | — | — | — | 28,222 |
| Share issuance - Repurchase of TLRY 27 convertible note | 2,713,677 | 3 | (593,681) | — | 26,440 | — | — | — | 26,443 |
| Share issuance - Settlement of equity component of TLRY 27 convertible note | — | — | — | — | (7,442) | — | — | — | (7,442) |
| Share issuance - RSUs exercised | 57,796 | — | — | — | — | — | — | — | — |
| Stock-based compensation | — | — | — | — | 4,035 | — | — | — | 4,035 |
| Disposal of SH Acquisition non-controlling interests | — | — | — | — | — | — | — | (3,840) | (3,840) |
| Comprehensive loss for the period | — | — | — | — | — | (4,978) | (789,436) | (4,509) | (798,923) |
| Balance at February 28, 2025 | 98,337,262 | 99 | (961,942) | — | 6,357,039 | (52,935) | (3,574,431) | (27,669) | 2,702,103 |
| Balance at May 31, 2025 | 106,067,875 | $ 106 | (200,422) | $ — | $ 6,401,657 | $(43,063) | $(4,847,226) | $(21,899) | $ 1,489,575 |
| Share issuance - At-the-Market ("ATM") program | 3,444,380 | 3 | — | — | 22,488 | — | — | — | 22,491 |
| Share issuance - Repurchase of TLRY 27 convertible note | 1,259,182 | 1 | (120,969) | — | 4,799 | — | — | — | 4,800 |
| Share issuance - Settlement of equity component of TLRY 27 convertible note | — | — | — | — | (1,158) | — | — | — | (1,158) |
| Share issuance - RSUs exercised | 1,057,680 | 1 | — | — | (1) | — | — | — | — |
| Shares effectively repurchased for employee withholding tax | — | — | — | — | (1,427) | — | — | — | (1,427) |
| Stock-based compensation | — | — | — | — | 5,052 | — | — | — | 5,052 |
| Comprehensive income (loss) for the period | — | — | — | — | — | (167) | (322) | 1,814 | 1,325 |
| Balance at August 31, 2025 | 111,829,117 | $ 111 | (321,391) | $ — | $ 6,431,410 | $(43,230) | $(4,847,548) | $(20,085) | $ 1,520,658 |
| Share issuance - At-the-Market ("ATM") program | 3,332,844 | 3 | — | — | 50,562 | — | — | — | 50,565 |
| Share issuance - RSUs exercised, net of cancellations | (121,968) | — | — | — | — | — | — | — | — |
| Share issuance - Warrant exercised | 620,900 | 1 | — | — | 6,954 | — | — | — | 6,955 |
| Share issuance - Double Diamond Holdings dividend settlement | 861,707 | 1 | — | — | 14,821 | — | — | (15,182) | (360) |
| Stock-based compensation | — | — | — | — | 7,736 | — | — | — | 7,736 |
| Comprehensive income (loss) for the period | — | — | — | — | — | 3,937 | (44,931) | 1,949 | (39,045) |
| Balance at November 30, 2025 | 116,522,600 | $ 116 | (321,391) | $ — | $ 6,511,483 | $(39,293) | $(4,892,479) | $(33,318) | $ 1,546,509 |
| Fractional shares cancelled pursuant to Reverse Stock Split | (20,652) | — | — | — | (159) | — | — | — | (159) |
| Share issuance - RSUs exercised, |
| net of cancellations | 44,991 | — | — | — | — | — | — | — | — |
|---|---|---|---|---|---|---|---|---|---|
| Stock-based compensation | — | — | — | — | 9,177 | — | — | — | 9,177 |
| Comprehensive income (loss) for the period | — | — | — | — | — | (4,905) | (26,572) | 1,557 | (29,920) |
| Balance at February 28, 2026 | 116,546,939 | $ 116 | (321,391) | $ — | $ 6,520,501 | $ (44,198) | $ (4,919,051) | $ (31,761) | $ 1,525,607 |
1Current and prior year share amounts have been retrospectively adjusted to reflect the Reverse Stock Split, which became effective on December 2, 2025. See Note 1 (Basis of presentation and summary of significant accounting policies).
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
TILRAY BRANDS, INC.
Consolidated Statements of Cash Flows
(in thousands of United States dollars, unaudited)
| For the nine months ended | ||
|---|---|---|
| February 28, 2026 | February 28, 2025 | |
| Cash provided by (used in) operating activities: | ||
| Net loss | $ (67,229) | $ (913,461) |
| Adjustments for: | ||
| Deferred income tax (recovery) expense, net | 3,235 | 2,686 |
| Unrealized foreign exchange (gain) loss | (5,886) | 30,725 |
| Amortization | 48,260 | 99,410 |
| Accretion of convertible debt discount | 5,977 | 8,751 |
| Impairments | — | 699,235 |
| Other than temporary change in fair value of convertible notes receivable | — | 20,000 |
| Unrealized loss on digital assets | 386 | — |
| Other non-cash items | 2,402 | 1,503 |
| Stock-based compensation | 31,060 | 18,189 |
| Loss on long-term investments | 4,449 | 5,540 |
| Loss (gain) on derivative instruments | 3,495 | (2,896) |
| Change in fair value of contingent consideration | (15,000) | — |
| Change in non-cash working capital: | ||
| Accounts receivable | 3,117 | 321 |
| Prepaids and other current assets | (3,717) | (8,258) |
| Inventory | (21,421) | (5,577) |
| Accounts payable and accrued liabilities | (20,948) | (37,960) |
| Net cash used in operating activities | (31,820) | (81,792) |
| Cash provided by (used in) investing activities: | ||
| Investment in capital and intangible assets | (22,838) | (26,586) |
| Proceeds from disposal of capital and intangible assets | 1,798 | 833 |
| Investment in digital assets | (1,000) | — |
| Sale (purchase) of marketable securities, net | 19,385 | (16,276) |
| Investment in long-term investments | (3,595) | — |
| Proceeds from long-term investments | 1,629 | — |
| Business acquisitions, net of cash acquired | — | (18,210) |
| Net cash used in investing activities | (4,621) | (60,239) |
| Cash provided by (used in) financing activities: | ||
| Share capital issued, net of cash issuance costs | 73,058 | 139,738 |
| Cash paid in lieu fractional shares | (159) | — |
| Proceeds from warrants exercised | 2,367 | — |
| Proceeds from long-term debt | — | 3,450 |
| Repayment of long-term debt | (11,108) | (16,115) |
| Repayment of convertible debt | — | (330) |
| Repayment of lease liabilities | (2,991) | (2,586) |
| Net decrease in bank indebtedness | 1,653 | (7,293) |
| Net cash provided by financing activities | 62,820 | 116,864 |
| Effect of foreign exchange on cash and cash equivalents | 1,460 | (3,217) |
| Net increase (decrease) in cash and cash equivalents | 27,839 | (28,384) |
| Cash and cash equivalents, beginning of period | 221,666 | 228,340 |
| Cash and cash equivalents and restricted cash, end of period | $ 249,505 | $ 199,956 |
Within the consolidated statements of cash flows, cash and cash equivalents includes $44,885 of restricted cash as of February 28, 2026, and $nil as of February 28, 2025.
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
TILRAY BRANDS, INC.
Notes to Consolidated Financial Statements
Note 1. Basis of presentation and summary of significant accounting policies
The accompanying unaudited interim consolidated financial statements reflect the accounts of the Company for the quarterly period ended February 28, 2026 (the "Financial Statements"). The Financial Statements were prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP") for interim financial information and pursuant to the rules and regulations of the United States Securities and Exchange Commission ("SEC") for interim financial information. Accordingly, they do not include all of the information and notes required by U.S. GAAP and should be read in conjunction with the audited consolidated financial statements (the "Annual Financial Statements") included in the Company's Annual Report on Form 10-K for the fiscal year ended May 31, 2025 (the "Annual Report"). These Financial Statements reflect all adjustments, which, in the opinion of management, are necessary for a fair presentation of the results for the interim periods presented. Interim results are not necessarily indicative of results for the full fiscal year.
The Financial Statements have been prepared on a going concern basis, which assumes that the Company will continue in operation for the foreseeable future and, accordingly, will be able to realize its assets and discharge its liabilities in the normal course of operations as they come due, under the historical cost convention except for certain financial instruments that are measured at fair value, as detailed in the Company's accounting policies.
All amounts in the Financial Statements, and the accompanying notes and tables have been rounded to the nearest thousand, except par values and per share amounts, and unless otherwise indicated.
Basis of consolidation
Subsidiaries are entities controlled by the Company. Control exists when the Company either has a controlling voting interest or is the primary beneficiary of a variable interest entity. The financial statements of all subsidiaries are included in the Financial Statements from the date that control commences until the date that control ceases. All intercompany balances and transactions have been eliminated on consolidation. A complete list of our subsidiaries that existed as of our most recent fiscal year end is included in the Annual Report.
Restricted cash
We classify cash that is legally or contractually restricted as to withdrawal or usage as restricted cash. As of February 28, 2026, the Company reported $44,885 of restricted cash related to the funds held in escrow in connection with the acquisition of BrewDog plc ("BrewDog"), which was completed on March 2, 2026. See Note 26 (Subsequent Events).
Reverse stock split
Effective December 2, 2025, the Company implemented a reverse stock split of its outstanding shares of Common Stock, at a ratio of one-for-ten (the "Reverse Stock Split").
No fractional shares were issued in connection with the Reverse Stock Split. Fractional shares resulting from the Reverse Stock Split were rounded down to the nearest whole share and stockholders received cash in lieu of any fractional shares that were created by the Reverse Stock Split. Each stockholder's percentage ownership interest in the Company and proportional voting power remained unchanged as a result of the Reverse Stock Split, except for adjustments that resulted from rounding fractional shares down to whole shares.
All issued and outstanding Common Stock, per share amounts, and outstanding equity instruments and awards exercisable into Common Stock contained in the condensed interim consolidated financial statements of the Company and notes thereto have been retroactively adjusted to reflect the Reverse Stock Split for all prior periods presented.
Earnings (loss) per share
Basic earnings (loss) per share is computed by dividing reported net loss attributable to stockholders of Tilray Brands, Inc. by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed by dividing reported net loss attributable to stockholders of Tilray Brands, Inc. by the sum of the weighted average number of common shares and the number of dilutive potential common share equivalents outstanding during the period. Potential dilutive common share equivalents consist of the incremental common shares issuable upon the exercise of vested share options, warrants, and RSUs and the incremental shares issuable upon conversion of the convertible debentures and similar instruments. Shares of Common Stock outstanding under the share lending arrangement entered into in conjunction with the TLRY 27 Notes, see Note 12 (Convertible debentures payable) are excluded from the calculation of basic and diluted earnings per share because the borrower of the shares is required under the share lending arrangement to refund any dividends paid on the shares lent.
In computing diluted earnings (loss) per share, common share equivalents are not considered in periods in which a net loss attributable to Tilray shareholders is reported, as the inclusion of the common share equivalents would be anti-dilutive. For the three months ended February 28, 2026 and February 28, 2025, the dilutive potential common share equivalents outstanding consisted of the following: 7,626,712 and 2,189,612 common shares from RSUs, 303,199 and 303,256 common shares from share options, nil and 620,900 common shares for warrants and 3,766,478 and 4,873,823 common shares for convertible debentures, respectively. Current and prior year share amounts have been retrospectively adjusted to reflect the Reverse Stock Split, which became effective on December 2, 2025.
Digital Assets
In December 2023, FASB issued ASU 2023-08, Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets. ASU 2023-08 requires certain crypto assets to be measured at fair value separately on the balance sheet with gains and losses from changes in the fair value reported as unrealized gains or losses in the consolidated statement of income (loss) and comprehensive income (loss) each reporting period. ASU 2023-08 also enhances the other intangible asset disclosure requirements by requiring the name, cost basis, fair value, and number of units for each significant crypto asset holding. In conjunction with the acquisition of digital assets during the fiscal quarter ended August 31, 2025, the Company adopted and applied ASU-2023-08 henceforth.
The Company's digital assets are initially recorded at cost, and are subsequently measured at fair value as of each reporting period. The Company determines the fair value of its digital assets in accordance with ASC 820, Fair Value Measurement, based on quoted prices in its principal market for Bitcoin (Level 1). Changes in fair value are recognized as incurred in the Company's consolidated statement of income (loss) and comprehensive income (loss), as "Unrealized (gain) loss on digital assets," within non-operating (income) and expenses, net.
New accounting pronouncements not yet adopted
In August 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-05, Business Combination - Joint Venture Formations (Subtopic 805-60) Recognition and Initial Measurement ("ASU 2023-05"), which is intended to address the accounting for contributions made to a joint venture. ASU 2023-05 is effective for the Company beginning June 1, 2026. This update will be applied prospectively and the Company is currently evaluating the effect of adopting this ASU.
In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative, which amends the disclosure or presentation requirements related to various subtopics in the FASB Accounting Standards Codification (the "Codification"). The effective date for each amendment will be the date on which the SEC's removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. If by June 30, 2027, the SEC has not removed the applicable requirement from Regulation S-X or Regulation S-K, the pending content of the related amendment will be removed from the Codification and will not become effective for any entity. The Company is currently evaluating the effect of adopting this ASU.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) Improvements to Income Tax Disclosures, which requires public entities to disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold on an annual basis. ASU 2023-09 is effective for the Company beginning with its fiscal year ended May 31, 2026 and will be disclosed in the Financial Statements reported in our Annual Report on Form 10-K filed with the SEC for such period. The Company is in the process of evaluating the impact of the financial statement disclosure requirement.
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires disaggregated disclosure of income statement expenses for public business entities. ASU 2024-03 is effective for the Company beginning fiscal year ended May 31, 2028 and will be disclosed in the Annual Report on Form 10-K for such period. The Company is currently evaluating the effect of adopting this ASU.
New accounting pronouncements recently adopted
In November 2024, the FASB issued ASU 2024-04, Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments, which seeks to clarify the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. The Company adopted ASU 2024-04 beginning June 1, 2025, however, it did not have any impact on our unaudited interim consolidated financial statements.
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Note 2. Inventory
Inventory consisted of the following:
| February 28, 2026 | May 31, 2025 | |
|---|---|---|
| Beverage inventory | $ 67,424 | $ 63,965 |
| Cannabis plants | 30,872 | 24,045 |
| Dried cannabis | 110,315 | 103,507 |
| Cannabis derivatives | 4,227 | 7,877 |
| Cannabis vapes | 1,747 | 1,860 |
| Packaging and other inventory items | 13,746 | 15,366 |
| Distribution inventory | 49,901 | 38,735 |
| Wellness inventory | 14,071 | 15,527 |
| Total | $ 292,303 | $ 270,882 |
Note 3. Capital assets
Capital assets consisted of the following:
| February 28, 2026 | May 31, 2025 | |
|---|---|---|
| Land | $ 45,535 | $ 44,529 |
| Production facilities | 422,586 | 407,650 |
| Equipment | 278,873 | 280,585 |
| Leasehold improvements | 21,459 | 20,415 |
| Finance lease, right-of-use assets | 38,792 | 40,308 |
| Construction in progress | 12,187 | 11,241 |
| $ 819,432 | $ 804,728 | |
| Less: accumulated amortization | (276,424) | (236,295) |
| Total | $ 543,008 | $ 568,433 |
Assets held for sale consisted of the following:
| February 28, 2026 | May 31, 2025 | |
|---|---|---|
| Production facilities | $ — | $ 5,800 |
| Equipment | 979 | — |
| Leasehold improvements | 493 | — |
| Operating lease, right-of-use assets | 977 | — |
| Total | $ 2,449 | $ 5,800 |
During the three months ended February 28, 2026, the Company classified the assets of Atwater Brewing, with a carrying value of $2,449 from its Beverage reporting unit, as assets held for sale. These assets were acquired on September 1, 2024 as part of the transaction referred to as "Craft Acquisition II." Following management's assessment of facility utilizations, it was determined that such assets would be held for sale. Assets held for sale are measured at the lower of carrying amount and the fair value less costs to sell and are no longer depreciated. Changes in the carrying amount are recorded in the consolidated statement of net loss and comprehensive loss. During the three months ended February 28, 2026, the Company also completed the sale of the Fort Collins asset group. The loss on the disposition of assets held for sale are recorded in the consolidated statement of loss.
Note 4. Leases
The table below presents the lease-related assets and liabilities recorded on the balance sheet.
| Classification on Balance Sheet | February 28, 2026 | May 31, 2025 | |
|---|---|---|---|
| Assets | |||
| Finance lease, right-of-use assets | Capital assets | $ 38,792 | $ 40,308 |
| Operating lease, right-of-use assets | Operating lease, right-of-use assets | 17,939 | 22,279 |
| Total right-of-use assets | $ 56,731 | $ 62,587 | |
| Liabilities | |||
| Current: | |||
| Current portion of finance lease liabilities | Current portion of lease liabilities | $ 1,662 | $ 1,560 |
| Current portion of operating lease liabilities | Current portion of lease liabilities | 5,597 | 5,381 |
| Non-current: | |||
| Finance lease liabilities | Lease liabilities | 43,226 | 44,295 |
| Operating lease liabilities | Lease liabilities | 17,056 | 20,630 |
| Total lease liabilities | $ 67,541 | $ 71,866 |
Included in total lease liabilities is $985 related to disposal groups classified as held for sale. See Note 3 (Capital Assets).
The following table presents the future undiscounted payments associated with lease liabilities as of February 28, 2026:
| Operating leases | Finance leases | |
|---|---|---|
| 2026 (remaining three months) | $ 1,943 | $ 1,131 |
| 2027 | 7,003 | 4,523 |
| 2028 | 5,923 | 4,523 |
| 2029 | 2,935 | 4,375 |
| Thereafter | 10,802 | 66,939 |
| Total minimum lease payments | $ 28,606 | $ 81,491 |
| Imputed interest | (5,953) | (36,603) |
| Obligations recognized | $ 22,653 | $ 44,888 |
Note 5. Intangible Assets
Intangible assets consisted of the following items:
| Customer relationships & distribution channel | Licenses, permits & applications | Intellectual property, trademarks, knowhow & brands | February 28, 2026 | |
|---|---|---|---|---|
| Cost | $ 2,409 | $ 18,432 | $ 16,784 | $ 37,625 |
| Accumulated amortization | (161) | (9,113) | (5,008) | (14,282) |
| Total | $ 2,248 | $ 9,319 | $ 11,776 | $ 23,343 |
As of February 28, 2026, the Company also has the following intangible assets which have been fully impaired; $444,208 of customer relationships and distribution channels,$ 367,022 of licenses, permits and applications, and $452,530 of intellectual property, trademarks, know-how and brands.
| Customer relationships & distribution channel | Licenses, permits & applications | Non-compete agreements | Intellectual property, trademarks, knowhow & brands | May 31, 2025 | |
|---|---|---|---|---|---|
| Cost | $ 610,240 | $ 387,238 | $ 12,449 | $ 618,514 | $ 1,628,441 |
| Accumulated amortization | (166,032) | (9,693) | (12,449) | (155,084) | (343,258) |
| Accumulated impairment losses | (444,208) | (367,022) | — | (452,530) | (1,263,760) |
| Total | $ — | $ 10,523 | $ — | $ 10,900 | $ 21,423 |
Licenses, permits & applications are predominantly comprised of multi-period sponsorship rights.
Expected future amortization expense for intangible assets as of February 28, 2026 is as follows:
| Amortization | |
|---|---|
| 2026 (remaining three months) | $ 1,810 |
| 2027 | 7,240 |
| 2028 | 6,074 |
| 2029 | 2,580 |
| 2030 | 2,580 |
| Thereafter | 3,059 |
| Total | $ 23,343 |
7
Note 6. Goodwill
The following table shows the carrying amount of goodwill by reporting units:
| February 28, 2026 | ||||
|---|---|---|---|---|
| Cannabis Goodwill | $ 2,640,669 | |||
| Accumulated impairment losses | (1,888,319) | |||
| Total | $ 752,350 | |||
| Reporting Unit | ||||
| Beverage | Cannabis | Wellness | Distribution | |
| Goodwill | $ 120,802 | $ 2,640,669 | $ 77,470 | $ 4,458 |
| Accumulated impairment losses | (120,802) | (1,897,431) | (68,186) | (4,235) |
| Effect of foreign exchange | — | 9,112 | (9,284) | (223) |
| Total | $ — | $ 752,350 | $ — | $ — |
During the fiscal quarter ended February 28, 2026, the Company assessed for indicators of impairment and concluded that there were no indicators and accordingly, no further impairment testing was required and no impairment charges were recognized during the period.
In the prior year, during the fiscal quarter ended February 28, 2025, based upon a combination of factors including a sustained decline in the Company's market capitalization stemming from the uncertainty resulting from certain changes in U.S. global economic policy, including slower than anticipated progress in global cannabis legalization and overall declines in the craft beer industry sector, the Company concluded that it was more likely than not, that the fair value of our reporting units were less than their carrying amounts. Accordingly, the Company utilized the income approach, which uses future discounted cash flows, to determine the fair value of each reporting unit. As a result, the Company recorded non-cash impairment charges of $570,000 of cannabis goodwill, $100,000 of beverage goodwill, $25,000 of wellness goodwill and $4,235 of distribution goodwill for the three and nine months ended February 28, 2025. The non-cash charge had no impact on the Company's compliance with debt covenants at February 28, 2025, its cash flows or available liquidity.
In the Company's cannabis goodwill assessment performed during the three and nine months ended February 28, 2025, the Company used a discount rate of 12.00%, a terminal growth rate of 5%, and an average revenue growth rate of 34% over 5 years, based on an 88% and 40% average probability of anticipated EU and U.S. cannabis legalization, respectively and/or changes in drug policy in various countries within the next 5 years. A 1% increase in the discount rate would result in an additional $285,000 in impairment, a 1% decrease in the terminal growth rate would result in an additional $210,000 in impairment, a 5% decrease in the average growth rate would result in an additional $170,000 in impairment, a 5% decrease in the probability of EU cannabis legalization would result in an additional $80,000 in impairment and a 5% decrease in the probability of US cannabis legalization would result in an additional $7,000 in impairment. Changes to those probabilities resulting in continued delays in or cessation of legalization of cannabis within the United States and internationally, or adverse regulatory changes to existing legislation, could have an unfavorable impact on the estimated future cash flows, and ultimately, the fair value of the cannabis reporting unit, which may result in a material impairment expense recognized in future reporting periods.
In the Company's beverage goodwill assessment performed during the three and nine months ended February 28, 2025, the Company used a discount rate of 9.25%, a terminal growth rate of 2%, and an average revenue growth rate of 12% over 5 years. A 1% increase in the discount rate would result in an additional $70,000 in impairment, a 1% decrease in the terminal growth rate would result in an additional $50,000 in impairment and a 1% decrease in the average growth rate would result in an additional $40,000 in impairment.
In the Company's wellness goodwill assessment performed during the three and nine months ended February 28, 2025, the Company used a discount rate of 10.50%, a terminal growth rate of 2%, and an average revenue growth rate of 7% over 5 years. A 1% increase in the discount rate would result in an additional $5,000 in impairment, a 1% decrease in the terminal growth rate would result in an additional $3,000 in impairment and a 1% decrease in the average growth rate would result in an additional $2,000 in impairment.
In the Company's distribution goodwill assessment performed during the three and nine months ended February 28, 2025, the Company recorded $4,235 of impairments which brought the remaining distribution goodwill balance to $nil.
Note 7. Business acquisitions
Acquisition of Craft Beverage Business Portfolio II
Effective September 1, 2024, the Company acquired four craft beer brands and breweries from Molson Coors Beverage Company ("Molson") including Atwater Brewery, Hop Valley Brewing Company, Terrapin Beer Co., and Revolver Brewing (the "Craft Acquisition II"). The purpose of the acquisition was to continue broadening Tilray's beverage brand strategy. In consideration for the acquisition, the Company paid a total purchase price of $22,979 in cash, which was subject to certain customary post-closing working capital adjustments.
The table below summarizes the fair value of the assets acquired and the liabilities assumed for the Craft Acquisition II at the effective acquisition date as follows:
| Amount | |
|---|---|
| Consideration | |
| Cash consideration | $ 22,979 |
| Net assets acquired | |
| Current assets | |
| Cash and cash equivalents | 4,869 |
| Accounts receivable | 1,993 |
| Inventory | 6,844 |
| Prepaids and other current assets | 185 |
| Long-term assets | |
| Capital assets | 20,916 |
| Finance lease, right-of-use assets | 1,869 |
| Operating lease, right-of-use assets | 1,884 |
| Total assets | 38,560 |
| Current liabilities | |
| Accounts payable and accrued liabilities | 11,828 |
| Current portion of finance lease liabilities | 354 |
| Current portion of operating lease liabilities | 564 |
| Long - term liabilities | |
| Finance lease liabilities | 1,515 |
| Operating lease liabilities | 1,320 |
| Total liabilities | 15,581 |
| Total net assets acquired | 22,979 |
In the event that the Craft Acquisition II had occurred on June 1, 2024, the Company would have had, on an unaudited proforma basis, additional net revenue of approximately $nil and $nil for the three and nine months ended February 28, 2026 and approximately $nil and $13,700 for the three and nine months ended February 28, 2025, respectively, and its consolidated net loss and comprehensive net loss would have increased by approximately $nil and $nil for the three and nine months ended February 28, 2026 and approximately $nil and $4,000 for the three and nine months ended February 28, 2025, respectively. This unaudited pro forma financial information does not reflect the realization of any expected ongoing synergies relating to the integration of the Craft Acquisition II.
10
Note 8. Long term investments
Long term investments consisted of the following:
| February 28, 2026 | May 31, 2025 | |
|---|---|---|
| Equity investments measured at fair value | $ 3,270 | $ 1,972 |
| Equity investments under measurement alternative | 4,364 | 8,160 |
| Total | $ 7,634 | $ 10,132 |
As of February 28, 2026 and May 31, 2025, included within equity investment under measurement alternative is an option to acquire a 68% membership interest in SH Acquisition for $1.00 upon U.S. federal cannabis legalization valued at $4,364 and $8,160 respectively. See Note 24 (Financial risk management and financial instruments).
Note 9. Bank indebtedness
Aphria Inc., a subsidiary of the Company, has an operating line of credit in the amount of C$1,000, which bears interest at the lender’s prime rate plus 75 basis points. As of February 28, 2026, the Company has not drawn on the line of credit. The operating line of credit is secured by a security interest on certain real property located at 265 Talbot St. West, Leamington, Ontario.
CC Pharma GmbH, a subsidiary of the Company, has two operating lines of credit in the amounts of €7,000 and €500. These lines bear interest at Euro Short-Term Rate (“ESTR”) plus 2.50% and Euro Interbank Offered Rate (“EURIBOR”) plus 4.00%, respectively. As of February 28, 2026, a total of €7,487 ($8,834) was drawn down from the total available credit of €7,500. The operating line of credit for €7,000 is secured by an interest in the inventory of CC Pharma GmbH as well as the Densborn, Germany production facility and underlying real property. The operating line of credit for €500 is unsecured.
On July 25, 2025, the Company’s wholly-owned subsidiary, American Beverage Crafts Group Inc. (“ABC Group”), formerly known as Four Twenty Corporation, finalized its fifth amendment (the “Amendment”) to that certain Credit Agreement dated as of June 30, 2023 (the “ABC Group Credit Agreement”) by and among the Borrower, Bank of America, N.A., in its capacity as Administrative Agent, and certain other guarantors and lenders party thereto. Specifically, the Amendment amended and restated the ABC Group Credit Agreement to provide for the contribution of the Manitoba Harvest entities’ equity to the Borrower as additional collateral. Additionally, the Amendment added financial covenants for (i) minimum consolidated trailing-twelve-months EBITDA for each of the four quarters, beginning May 31, 2025 and (ii) minimum liquidity. ABC Group has a revolving credit facility of $25,000, which bears interest at SOFR plus an applicable margin. As of February 28, 2026, the Company has drawn $nil on the revolving line of credit under the ABC Group Credit Agreement.
Note 10. Accounts payable and accrued liabilities
Accounts payable and accrued liabilities are comprised of:
| February 28, 2026 | May 31, 2025 | |
|---|---|---|
| Trade payables | $ 115,333 | $ 107,348 |
| Accrued liabilities | 70,342 | 103,260 |
| Litigation accruals | 11,931 | 12,431 |
| Accrued payroll and employment related taxes | 12,702 | 1,436 |
| Income taxes payable | — | 58 |
| Accrued interest | 2,444 | 4,193 |
| Sales taxes payable | 11,244 | 6,596 |
| Total | $ 223,996 | $ 235,322 |
Note 11. Long-term debt
The following table sets forth the net carrying amount of long-term debt instruments:
| February 28, 2026 | May 31, 2025 | |
|---|---|---|
| Term loan - C$53,000 - Canadian prime plus an applicable margin, 3-year term, with a 10-year amortization, repayable in equal quarterly payments due in February 2028 | $ 35,770 | $ 38,690 |
| Term loan - C$25,000 - Canadian prime plus 1.00%, compounded monthly, 5-year term, with a 15-year amortization, repayable in equal monthly installments of C$181 including interest, due in July 2033 | 10,647 | 11,501 |
| Term loan - C$25,000 - Canadian prime plus 1.00%, compounded monthly, 5-year term, with a 15-year amortization, repayable in equal monthly installments of C$196 including interest, due in July 2033 | 8,660 | 9,354 |
| Term loan - C$1,250 - Canadian prime plus 1.50%, 5-year term, with a 10-year amortization, repayable in equal monthly installments of C$12 including interest, due in August 2026 | 57 | 157 |
| Mortgage payable - C$3,750 - Canadian prime plus 1.50%, 5-year term, with a 20-year amortization, repayable in equal monthly installments of C$23 including interest, due in August 2026 | 1,924 | 2,020 |
| Term loan - €3,500 - at 4.59%, 5-year term, repayable in monthly installments of €52 plus interest, due in August 2028 | 2,047 | 2,546 |
| Mortgage payable - $22,635 - EURIBOR rate plus 1.5%, 10-year term, repayable in monthly installments of $57 to $69, due in October 2030 | 18,858 | 19,418 |
| Term loan - $90,000 - SOFR plus an applicable margin, 5-year term, repayable in quarterly installments of $875 to $2,250 due in June 2028 | 75,375 | 80,438 |
| Carrying amount of long-term debt | 153,338 | 164,124 |
| Unamortized financing fees | (903) | (864) |
| Net carrying amount | 152,435 | 163,260 |
| Less principal portion included in current liabilities | (17,453) | (14,767) |
| Total non-current portion of long-term debt | $ 134,982 | $ 148,493 |
Note 12. Convertible debentures payable
The following table sets forth the net carrying amount of the convertible debentures payable:
| February 28, 2026 | May 31, 2025 | |
|---|---|---|
| 5.20% Convertible Notes ("TLRY 27") | $ 88,268 | $ 86,428 |
| Deduct - current portion | — | — |
| Total convertible debentures payable, non current portion | $ 88,268 | $ 86,428 |
TLRY 27 Notes
| February 28, 2026 | May 31, 2025 | |
|---|---|---|
| 5.20% Contractual debenture | $ 172,500 | $ 172,500 |
| Debt settlement | (72,500) | (67,500) |
| Unamortized discount | (11,732) | (18,572) |
| Net carrying amount | $ 88,268 | $ 86,428 |
The TLRY 27 convertible debentures were issued on May 30, 2023 and on June 9, 2023 by way of overallotment, in the principal amount of $172,500 (the "TLRY 27 Notes"). The TLRY 27 Notes bear interest at a rate of 5.20% per annum, payable semi-annually in arrears on June 15 and December 15 of each year, and mature on June 15, 2027, unless earlier converted. The TLRY 27 Notes are Tilray's general unsecured obligations and rank senior in right of payment to all of Tilray's indebtedness that is expressly subordinated in right of payment to the notes; equal in right of payment with any of Tilray's unsecured indebtedness that is not so subordinated, effectively junior in right of payment to any of Tilray's secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables but excluding intercompany obligations) of Tilray's current or future subsidiaries. Noteholders have the right to convert their TLRY 27 Notes into shares of Tilray's Common Stock at their option, at any time, until the close of business on the second scheduled trading day immediately before June 15, 2027. The initial conversion rate is approximately 37.66 shares per $1,000 principal amount of TLRY 27 Notes, which represents a conversion price of approximately $26.55 per share. The conversion rate and conversion price will be subject to adjustment upon the occurrence of certain events.
The TLRY 27 Notes are now redeemable, in whole and not in part, at Tilray's option at any time on or after June 20, 2025 at a cash redemption price equal to the principal amount of the notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, but only if the last reported sale price of Tilray's Common Stock exceeds 130% of the conversion price for a specified period of time. If certain corporate events that constitute a fundamental change occur, then, subject to a limited exception, noteholders may require Tilray to repurchase their TLRY 27 Notes for cash. The repurchase price will be equal to the principal amount of the notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the applicable repurchase date. In connection with the Company's offering of the TLRY 27 Notes, the Company entered into a share lending agreement with an affiliate of Jefferies LLC (the "Share Borrower"), pursuant to which it lent to the Share Borrower 3,850,000 shares of the Company's Common Stock (the "Borrowed Shares"). The Borrowed Shares were newly-issued shares, will be held as treasury shares until the expiration or early termination of the share lending agreement and may be used by purchasers of the TLRY 27 Notes to sell up to 3,850,000 shares of the Company's Common Stock. The fair value of the share lending agreement has been recorded as part of the unamortized discount on the debenture. The Company expects that the selling stockholders will use their position created by such sales to establish their initial hedge with respect to their investments in the TLRY 27 Notes. The Company did not receive any proceeds from the sale of the Borrowed Shares.
During the nine months ended February 28, 2026, the Company exchanged an aggregate $5,000 of its TLRY 27 Notes for cancellation, by issuing 1,259,182 shares of Common Stock and paying $6 in cash to settle accrued interest. Upon exchanging the TLRY 27 Notes, a portion of the settlement consideration was allocated to the equity component of the instrument and was recognized as a $1,158 reduction of additional paid-in capital in the Consolidated Statements of Stockholders' Equity. Additionally, this repurchase resulted in a gain of $495 which was recorded in other non-operating (losses) gains, net as shown in Note 23 (Non-operating income (expense)). Following consummation of the exchange, the number of outstanding Borrowed Shares of Common Stock was reduced by 120,969 shares which were then returned as Treasury Stock. As of February 28, 2026 and May 31, 2025, a total of 2,231,884 and 2,343,478 shares remained outstanding under the share lending arrangement, respectively. Current and prior year share amounts have been retrospectively adjusted to reflect the Reverse Stock Split, which became effective on December 2, 2025.
During the three and nine months ended February 28, 2026, the Company recognized interest expense of $1,300 and $3,923 and accretion of amortized discount interest of $2,013 and $5,977 respectively. During the three and nine months ended February 28, 2025, the Company recognized interest expense of $1,957 and $6,332 and accretion of amortized discount interest of $2,766 and $8,751 respectively.
As of February 28, 2026, there was $100,000 principal outstanding compared to $105,000 principal outstanding as of May 31, 2025 under the TLRY 27 Notes.
Note 13. Warrant liability
Between September 5, 2025 and September 15, 2025, certain holders elected to exercise an aggregate of 620,900 of the Company’s issued and outstanding warrants in accordance with their terms. Pursuant to the exercise of such warrants, Tilray received $2,367 of cash consideration and delivered 620,900 shares of common stock to such holders. As of February 28, 2026 and May 31, 2025, there were nil and 620,900 warrants outstanding respectively. Current and prior year share amounts have been retrospectively adjusted to reflect the Reverse Stock Split, which became effective on December 2, 2025.
Note 14. Stockholders' equity
Issued and outstanding
Pursuant to its Fifth Amended and Restated Certificate of Incorporation, the total number of shares that the Company is authorized to issue is 1,426,000,000 shares, of which 1,416,000,000 shares are Common Stock, and 10,000,000 shares of which are Preferred Stock (the “Preferred Stock”). As of February 28, 2026, the Company had issued and outstanding 116,546,939 shares of Common Stock, 321,391 shares of Treasury Stock (the “Treasury Stock”) and no Preferred Stock. Historically, the Company has issued shares of its Common Stock in consideration for acquisitions and other strategic transactions, settlement of convertible notes, settlement of litigation claims, in connection with public offerings and as payment of dividends to non-controlling interests for profit distributions.
During the nine months ended February 28, 2026, the Company had the following changes in shares of Common Stock:
a) 6,777,224 shares of Common Stock were issued pursuant to its At-the-Market (“ATM”) program, which generated gross proceeds of $76,643 and net proceeds of $73,056, after deducting $3,587 in commissions and other fees associated with these issuances.
b) 1,259,182 shares of Common Stock were issued in the amount of $4,800 to exchange the aggregate principal of $5,000 of its TLRY 27 Notes for cancellation. Upon exchanging the TLRY 27 Notes, a portion of the settlement consideration was allocated to the equity component of the instrument and was recognized as a $1,158 reduction of additional paid-in capital. Following consummation of the exchange, the number of outstanding Borrowed Shares of Common Stock was reduced by approximately 120,969 shares which were then returned as Treasury Stock, see Note 12 (Convertible debentures payable).
c) 620,900 shares of Common Stock were issued to settle exercised warrants.
d) 861,707 shares of Common Stock were issued to settle dividends payable to the non-controlling shareholders of Aphria Diamond in the amount of $14,821.
e) 980,703 shares of Common Stock were issued in connection with the exercise of previously awarded stock-based compensation awards, net of cancellations.
f) 20,652 shares of Common Stock were cancelled pursuant to the treatment of fractional shares in connection with the Reverse Stock Split.
During the nine months ended February 28, 2026, the Company granted 4,554,321 time-based Restricted Stock Units (“RSUs”).
During the fiscal year ended May 31, 2024, the Company issued (i) 756,615 performance-based restricted stock units (the “Performance-Based RSUs”) and (ii) an additional performance-based award payable in cash or, at the discretion of the Company’s Compensation Committee, in shares of the Company’s common stock (the “Performance-Based Elective Settlement Award,” and together with the Performance-Based RSUs, the “Performance-Based Awards”). The Performance-Based Awards were not considered granted for accounting purposes at the time of issuance because the applicable performance conditions had not yet been established or approved. Accordingly, no compensation expense was recognized within the Consolidated Statements of Loss at that time. During the period from issuance through the quarter ended February 28, 2026, the number of outstanding Performance-Based RSUs was reduced from 756,615 to 744,117 as a result of employee attrition, and the Performance-Based Elective Settlement Awards were also correspondingly reduced.
In September 2025, the Company established and approved the relevant performance conditions for the Performance-Based Awards and, as a result, the awards were considered granted for accounting purposes. Beginning in the quarter ended November 30, 2025, the Company commenced recognition of stock-based compensation expense based on the grant-date fair value of the Performance-Based Awards, which is being recognized over the remaining requisite service period. The Company currently expects the Performance-Based Elective Settlement Award to be settled in shares of common stock. Moreover, because the Performance-Based Elective Settlement Award has a fixed monetary value and is settleable in a variable number of shares, it is classified as a liability within the statement of Financial Position. The Performance-Based RSUs are classified as equity awards and are reflected within stockholders’ equity.
The Company’s total stock-based compensation expense incurred for the three and nine months ended February 28, 2026 was $13,725 and $31,060 compared to $4,035 and $18,189 for the three and nine months ended February 28, 2025, respectively.
All current and prior year share amounts have been retrospectively adjusted to reflect the Reverse Stock Split, which became effective on December 2, 2025.
14
Note 15. Accumulated other comprehensive income (loss)
Accumulated other comprehensive income (loss) is comprised of foreign currency translation gain (loss) as follows:
| Total Foreign currency translation gain (loss) | |
|---|---|
| Balance May 31, 2024 | $ (43,499) |
| Other comprehensive income (loss) | 3,622 |
| Balance August 31, 2024 | $ (39,877) |
| Other comprehensive income (loss) | (8,080) |
| Balance November 30, 2024 | $ (47,957) |
| Other comprehensive income (loss) | (4,978) |
| Balance February 28, 2025 | $ (52,935) |
| Balance May 31, 2025 | $ (43,063) |
| Other comprehensive income (loss) | (167) |
| Balance August 31, 2025 | $ (43,230) |
| Other comprehensive income (loss) | 3,937 |
| Balance November 30, 2025 | $ (39,293) |
| Other comprehensive income (loss) | (4,905) |
| Balance February 28, 2026 | $ (44,198) |
Note 16. Non-controlling interests
The following are majority-owned subsidiaries of the Company and the percentage of ownership interest maintained by the Company is set forth in the parenthetical: Enroot (75%), Aphria Diamond (51%), and Colcanna S.A.S. (90%).
The following table provides a summary of certain balance sheet information before intercompany eliminations relating to the above-referenced majority-owned subsidiaries of the Company in which there was a non-controlling interest as of February 28, 2026:
| Enroot | Aphria Diamond | ColCanna S.A.S. | February 28, 2026 | |
|---|---|---|---|---|
| Current assets | $ 202 | $ 75,233 | $ 2 | $ 75,437 |
| Non-current assets | — | 107,522 | 3,759 | 111,281 |
| Current liabilities | (12) | (127,190) | (7,115) | (134,317) |
| Non-current liabilities | (31,504) | (1,442) | (32,946) | |
| Net assets | $ 190 | $ 24,061 | $ (4,796) | $ 19,455 |
The following table provides a summary of certain balance sheet information before intercompany eliminations relating to the above-referenced majority-owned subsidiaries of the Company in which there was a non-controlling interest as of May 31, 2025:
| SH Acquisition | CC Pharma Nordic ApS | Aphria Diamond | ColCanna S.A.S. | May 31, 2025 | |
|---|---|---|---|---|---|
| Current assets | $ — | $ — | $ 83,390 | $ 20 | $ 83,410 |
| Non-current assets | — | — | 114,677 | 3,348 | 118,025 |
| Current liabilities | — | — | (126,986) | (6,953) | (133,939) |
| Non-current liabilities | — | — | (31,720) | (1,442) | (33,162) |
| Net assets | $ — | $ — | $ 39,361 | $ (5,027) | $ 34,334 |
The following table provides a summary of certain income statement information before intercompany eliminations relating to the above referenced majority-owned subsidiaries of the Company in which there was a non-controlling interest for the nine months ended February 28, 2026:
| Enroot | Aphria Diamond | ColCanna S.A.S. | February 28, 2026 | |
|---|---|---|---|---|
| Revenue | $ 27 | $ 46,946 | $ — | $ 46,973 |
| Total expenses | 37 | 37,696 | (653) | 37,080 |
| Net (loss) income | (10) | 9,250 | 653 | 9,893 |
| Other comprehensive (loss) income | — | (72) | (422) | (494) |
| Net comprehensive (loss) income | $ (10) | $ 9,178 | $ 231 | $ 9,399 |
| Non-controlling interest % | 25% | 49% | 10% | NA |
| Comprehensive (loss) income attributable to NCI | (3) | 4,497 | 23 | 4,517 |
| Net comprehensive (loss) income attributable to NCI | $ (3) | $ 4,497 | $ 23 | $ 4,517 |
The following table provides a summary of certain income statement information before intercompany eliminations relating to the above referenced majority-owned subsidiaries of the Company in which there was a non-controlling interest for the nine months ended February 28, 2025:
| SH Acquisition | CC Pharma Nordic ApS | Aphria Diamond | ColCanna S.A.S. | February 28, 2025 | |
|---|---|---|---|---|---|
| Revenue | $ — | $ — | $ 53,608 | $ — | $ 53,608 |
| Total expenses | 20,000 | 6 | 39,557 | 62 | 59,625 |
| Net (loss) income | (20,000) | (6) | 14,051 | (62) | (6,017) |
| Other comprehensive (loss) income | — | 3 | (1,568) | 127 | (1,438) |
| Net comprehensive (loss) income | $ (20,000) | $ (3) | $ 12,483 | $ 65 | $ (7,455) |
| Non-controlling interest % | 32% | 25% | 49% | 10% | NA |
| Comprehensive (loss) income attributable to NCI | (6,400) | (1) | 6,117 | 7 | (277) |
| Net comprehensive (loss) income attributable to NCI | $ (6,400) | $ (1) | $ 6,117 | $ 7 | $ (277) |
Note 17. Income taxes
The determination of the Company's overall effective tax rate requires significant judgment, the use of estimates, and the interpretation and application of complex tax laws. The effective tax rate reflects the income earned and taxed in various United States federal, state, and foreign jurisdictions. Tax law changes, increases, and decreases in temporary and permanent differences between book and tax items, valuation allowances against the deferred tax assets, stock compensation, and the Company's change in income in each jurisdiction all affect the overall effective tax rate. It is the Company's practice to recognize interest and penalties related to uncertain tax positions in income tax expense.
The Company reported income tax expense of $1,974 and $3,235 for the three and nine months ended February 28, 2026, and $1,203 and $4,125 for the three and nine months ended February 28, 2025. The income tax expense in the current period varies from the US statutory income tax rate and prior year period primarily due to the geographical mix of earnings and losses with no tax benefit resulting from valuation allowances in certain jurisdictions.
Note 18. Commitments and contingencies
Purchase and other commitments
The Company has financial commitments on long-term debt, refer to Note 11 (Long-term debt), convertible notes, refer to Note 12 (Convertible debentures payable), material purchase commitments inclusive of multi-period sponsorship rights and construction commitments as follows:
| Total | 2026 | 2027 | 2028 | 2029 | Thereafter | |
|---|---|---|---|---|---|---|
| Long-term debt repayment | $ 153,338 | $ 17,453 | $ 11,305 | $ 93,692 | $ 3,697 | $ 27,191 |
| Convertible debentures payable | 100,000 | — | — | 100,000 | — | — |
| Material purchase obligations | 61,930 | 32,529 | 29,401 | — | — | — |
| Construction commitments | 2,536 | 881 | 525 | 551 | 579 | — |
| Total | $ 317,804 | $ 50,863 | $ 41,231 | $ 194,243 | $ 4,276 | $ 27,191 |
Legal proceedings
In the ordinary course of business, we are at times subject to various legal proceedings and disputes, including the proceedings specifically discussed below. We assess our liabilities and contingencies in connection with outstanding legal proceedings utilizing the latest information available. Where it is probable that we will incur a loss and the amount of the loss can be reasonably estimated, we record a liability in our consolidated financial statements. These legal reserves may be increased or decreased to reflect any relevant developments on a quarterly basis. Where a loss is not probable or the amount of loss is not estimable, we do not accrue legal reserves. While the outcome of legal proceedings is inherently uncertain, based on information currently available and available insurance coverage, our management believes that it has established appropriate legal reserves. Any incremental liabilities arising from pending legal proceedings are not expected to have a material adverse effect on our consolidated financial position, consolidated results of operations, or consolidated cash flows. However, it is possible that the ultimate resolution of these matters, if unfavorable, may be material to our consolidated financial position, consolidated results of operations, or consolidated cash flows.
There have been no material changes in the legal proceedings since our Annual Report on Form 10-K for the fiscal year ended May 31, 2025 or subsequent Quarterly Reports on Form 10-Q, except with respect to the legal proceedings disclosed below:
MMIRF, LLC v. Tilray Brands, Inc., et al.
On December 31, 2025, MMIRF, LLC filed a complaint in the Superior Court of California, Los Angeles County, against Tilray Brands, Inc., Serruya Private Equity Inc., Superhero Acquisition Corp., Superhero Acquisition L.P., Irwin Simon, Michael Serruya, and Denise Faltischek, asserting claims for breach of fiduciary duty, aiding and abetting breach of fiduciary duty, and civil conspiracy against all defendants. The plaintiff allegedly is an assignee of claims previously possessed by MM CAN USA, Inc., a former subsidiary of MedMen Enterprises, Inc. ("MedMen"). The complaint alleges that, following a series of transactions in August 2021 pursuant to which Tilray (and other investors) acquired an interest in senior secured convertible notes of MedMen through its investment in Superhero Acquisition L.P. as a limited partner (as previously disclosed in a current report filed on Form 8-K on August 17, 2021), Tilray and the other defendants gained "de facto" control over, and thereby became fiduciaries of, MedMen. The complaint further alleges that the defendants breached those purported fiduciary duties in taking certain actions that detrimentally impacted MedMen's business, which ultimately entered bankruptcy and receivership proceedings in April 2024. The plaintiff seeks damages in excess of $1.0 billion. The defendants' deadline to move, answer, or otherwise respond to the complaint is currently March 30, 2026. Tilray intends to vigorously defend against the claims asserted in the complaint. Based on the information available as of the date of this Quarterly Report, management does not believe that a loss is probable or reasonably estimable, and accordingly no accrual has been recorded.
Summary of litigation accruals
As described in Note 10 (Accounts payable and accrued liabilities), the total estimated litigation expense accrual included in accrued liabilities as of February 28, 2026 and May 31, 2025 was $11,931 and $12,431, respectively. During the intervening period, the accrual decreased by $410 from settled claims and decreased $90 due to a net change in the estimated likelihood of certain claim's settlement, with the remaining change attributable to foreign exchange effects. This estimated accrual is intended to cover various ongoing litigation matters with probable losses that can be reasonably estimated.
Note 19. Net revenue
The Company reports Net revenue in four reporting segments: beverage, cannabis, distribution, and wellness. Net revenue for the three and nine months ended February 28, 2026 and three and nine months ended February 28, 2025 were as follows:
| For the three months ended | For the nine months ended | |||
|---|---|---|---|---|
| February 28, 2026 | February 28, 2025 | February 28, 2026 | February 28, 2025 | |
| Beverage revenue | $ 44,524 | $ 58,009 | $ 156,588 | $ 184,033 |
| Beverage excise taxes | (1,966) | (2,088) | (8,208) | (9,059) |
| Net beverage revenue | 42,558 | 55,921 | 148,380 | 174,974 |
| Cannabis revenue | 83,835 | 72,982 | 261,778 | 241,384 |
| Cannabis excise taxes | (19,007) | (18,708) | (64,907) | (60,209) |
| Net cannabis revenue | 64,828 | 54,274 | 196,871 | 181,175 |
| Distribution revenue | 82,963 | 61,493 | 242,286 | 197,175 |
| Wellness revenue | 16,383 | 14,092 | 46,203 | 43,450 |
| Total | $ 206,732 | $ 185,780 | $ 633,740 | $ 596,774 |
Note 20. Cost of goods sold
The Company reports Cost of goods sold in four reporting segments: beverage, cannabis, distribution, and wellness. Cost of goods sold for the three and nine months ended February 28, 2026 and three and nine months ended February 28, 2025 were as follows:
| For the three months ended | For the nine months ended | |||
|---|---|---|---|---|
| February 28, 2026 | February 28, 2025 | February 28, 2026 | February 28, 2025 | |
| Beverage costs | 28,977 | 35,986 | 97,741 | $ 106,961 |
| Cannabis costs | 38,858 | 32,275 | 121,497 | 111,804 |
| Distribution costs | 72,951 | 55,936 | 213,293 | 175,281 |
| Wellness costs | 10,992 | 9,572 | 31,289 | 29,791 |
| Total | $ 151,778 | $ 133,769 | $ 463,820 | $ 423,837 |
Note 21. General and administrative expenses
General and administrative expenses for the three and nine months ended February 28, 2026 and three and nine months ended February 28, 2025 were as follows:
| For the three months ended | For the nine months ended | |||
|---|---|---|---|---|
| February 28, 2026 | February 28, 2025 | February 28, 2026 | February 28, 2025 | |
| Salaries and wages | $ 21,925 | 21,908 | $ 68,425 | $ 66,201 |
| Office and general | 9,916 | 7,385 | 26,897 | 26,103 |
| Stock-based compensation | 13,725 | 4,035 | 31,060 | 18,189 |
| Insurance | 1,894 | 2,942 | 6,743 | 8,552 |
| Professional fees | 1,090 | 1,352 | 3,342 | 3,656 |
| Gain on sale of capital assets | (118) | (202) | (493) | (733) |
| Travel and accommodation | 1,014 | 1,100 | 3,618 | 4,347 |
| Rent | 782 | 726 | 2,864 | 3,041 |
| Total | $ 50,228 | $ 39,246 | $ 142,456 | $ 129,356 |
Note 22. Restructuring charges
In connection with the integration of certain acquisitions and strategic transactions, the Company has incurred restructuring and exit costs in the amount of $4,087 and $5,921 for the three and nine months ended February 28, 2026, compared to $6,133 and $17,249 for the three and nine months ended February 28, 2025. All restructuring plans are approved at the executive level, and their associated expenses are recognized in the period in which the plan is committed or otherwise incurred.
Within the Cannabis segment, during the nine months ended February 28, 2026, the Company incurred restructuring expenses totaling $5,259. These charges included $3,739 associated with the restructuring of the Quebec facility to transition from vegetable cultivation to cannabis cultivation in response to increased global cannabis demand, $992 related to employee termination severance and benefits associated with the reorganization of the Canadian cannabis commercial function, and $177 related to the wind-down of certain non-operating entities. Additionally, the Company recognized $351 related to its Fort Collins, CO partially vacant warehouse that was previously held for sale and was divested during the three months ended February 28, 2026. See Note 3 (capital assets).
During the fiscal year ended May 31, 2025, the Company accrued $8,500 of restructuring charges related to the closure of Hop Valley and other Project 420 initiatives within the Beverage segment, of which $7,511 was recognized in the nine months ended February 28, 2026, thereby reducing the accrual to $989. In addition, during the three and nine months ended February 28, 2026, the Company incurred $662 of restructuring related expenses associated with Atwater Brewing, primarily related to the asset being classified as held for sale and additional facility restructuring activities. See Note 3 (Capital Assets).
Note 23. Non-operating income (expense), net
Non-operating income (expense), net for the three and nine months ended February 28, 2026 and three and nine months ended February 28, 2025 were as follows:
| For the three months ended | For the nine months ended | |||
|---|---|---|---|---|
| February 28, 2026 | February 28, 2025 | February 28, 2026 | February 28, 2025 | |
| Change in fair value of warrant liability | $ — | $ 1,338 | $ (3,495) | $ 2,896 |
| Foreign exchange gain (loss) | 12,469 | (22,290) | 9,070 | (44,206) |
| (Loss) gain on long-term investments | (4,143) | (5,474) | (4,449) | (5,540) |
| Unrealized loss on digital assets | (214) | — | (386) | — |
| Other non-operating (losses) gains, net | (20) | 2,404 | (1,126) | 2,219 |
| Total | $ 8,092 | $ (24,022) | $ (386) | $ (44,631) |
The other non-operating losses (gains), net for the three and nine months ended February 28, 2026, were losses of $20 and $1,126, respectively, which were mainly comprised of a loss of $1,501 on the change in fair value of assets held for sale related to the Fort Collins, CO partially vacant warehouse, as described in Note 3 (capital assets), offset by a gain of $495 resulting from the exchange transaction of the TLRY 27 Note, as described in Note 12 (Convertible debentures payable).
The other non-operating (losses) gains, net for the three and nine months ended February 28, 2025, were gains of $2,404 and $2,219, respectively, and were mainly comprised of a $3,111 gain resulting from the exchange transaction of the TLRY 27 Note.
Note 24. Financial risk management and financial instruments
Financial instruments
The Company's classification of its financial instruments is described in Note 3 (Significant accounting policies) in the Notes to our Annual Financial Statements.
The carrying values of marketable securities, accounts receivable, bank indebtedness and accounts payable and accrued liabilities approximate their fair values due to their short periods to maturity.
On February 28, 2026 and May 31, 2025, the Company had long-term debt of $2,047 and $2,546, respectively, and the principal portion of convertible debentures payable of $100,000 and $105,000, respectively, subject to fixed interest rates. The Company's long-term debt is valued based on discounting the future cash outflows associated with the long-term debt. The discount rate is based on the incremental premium above market rates for the U.S. Department of the Treasury securities of similar duration. In each period thereafter, the incremental premium is held constant while the U.S. Department of the Treasury security is based on the then current market value to derive the discount rate.
The following tables present information about the Company's assets and liabilities that are measured at fair value on a recurring basis as of February 28, 2026 and May 31, 2025, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value:
| Level 1 | Level 2 | Level 3 | February 28, 2026 | |
|---|---|---|---|---|
| Financial assets | ||||
| Cash and cash equivalents | $ 204,620 | $ — | $ — | $ 204,620 |
| Restricted cash | 44,885 | — | — | 44,885 |
| Marketable securities | 15,312 | — | — | 15,312 |
| Equity investments measured at fair value | 2,253 | 1,017 | 4,364 | 7,634 |
| Digital assets | 614 | — | — | 614 |
| Total recurring fair value measurements | $ 267,684 | $ 1,017 | $ 4,364 | $ 273,065 |
| Level 1 | Level 2 | Level 3 | May 31, 2025 | |
| Financial assets | ||||
| Cash and cash equivalents | $ 221,666 | $ — | $ — | $ 221,666 |
| Marketable securities | 34,697 | — | — | 34,697 |
| Equity investments measured at fair value | 909 | 1,063 | 8,160 | 10,132 |
| Financial liabilities | ||||
| Warrant liability | — | — | (1,092) | (1,092) |
| Contingent consideration | — | — | (15,000) | (15,000) |
| Total recurring fair value measurements | $ 257,272 | $ 1,063 | $ (7,932) | $ 250,403 |
The Company's financial assets and liabilities required to be measured on a recurring basis are its equity investments measured at fair value, digital assets, acquisition-related contingent consideration, and warrant liability.
During the nine months ended February 28, 2026, the Company purchased 9.16 units of Bitcoin. Digital assets recorded at fair value have quoted prices in active markets for identical assets and are classified as Level 1. The following table presents the Company's digital asset holdings as of February 28, 2026:
| Quantity | Cost Basis | Fair Value | Cumulative Unrealized Gain (Loss) | |
|---|---|---|---|---|
| Bitcoin | 9.16 | $ 1,000 | $ 614 | $ (386) |
| Total digital assets | 9.16 | $ 1,000 | $ 614 | $ (386) |
Certain equity investments recorded at fair value have quoted prices in active markets for identical assets and are classified as Level 1. The Company classified securities with observable inputs as Level 2 and without a quoted market price as Level 3.
As of February 28, 2026 and May 31, 2025, included within equity investment under measurement alternative is an option to acquire a $68\%$ membership interest in SH Acquisition for $\$1.00$ upon U.S. federal cannabis legalization valued at $\$4,364$ and $\$8,160$ respectively. During the three months ended February 28, 2026, the fair value of this option decreased by $\$3,796$ due to changes in the discounted cash flow model used to value the underlying business. Specifically, projected cash flows associated with retail operations were reduced to $\$nil$ as a result of restructuring activities, with the remaining valuation attributable solely to projected brand-related cash flows. The valuation continues to assume a $70\%$ probability of U.S. federal cannabis legalization, which is required for the option to become exercisable, as further described below.
A portion of the total consideration to be paid in connection with the Company's acquisition of Montauk Brewing Company ("Montauk") was contingent upon the achievement by Montauk of certain financial measures as of December 31, 2025. In the event that Montauk achieved either the pre-determined sales volume target or EBITDA target, then $15,000 of contingent consideration would be deemed earned and payable. If both the sales volume target and the EBITDA target were achieved, an additional $3,000 would be deemed earned and payable for a total contingent consideration payment of $18,000.
For the year ended, May 31, 2025, the Company assessed the estimated value of the contingent consideration liability as $15,000, which was estimated to be achieved based on management's forecast, applying a probability of achievement of (100\%$ for the sales volume target and $0\%$ on the remaining criteria, which was not expected to be achieved as EBITDA targets were not forecasted to be met.
During the three months ended August 31, 2025, the Company reassessed the estimated fair value of the contingent consideration liability as $\$nil$ , based on subsequent information regarding Montauk's operating results and revised expectations for the remainder of the earn-out period. As a result of lower-than-anticipated sales volumes during the peak selling periods of June, July and August 2025, and the loss of certain national retail programs, management concluded that Montauk no longer had a viable path to achieving the sales volume target or the EBITDA target within the earn-out period. Accordingly, the Company applied a probability of achievement of $0\%$ to the sales volume target and $0\%$ to the remaining criteria. The resulting $\$15,000$ change in fair value of the contingent consideration liability was recorded within the statement of profit and loss and contributed to the Company's net income generated during the period ended August 31, 2025, despite historically reporting a net loss.
During the three months ended February 28, 2026, the earn-out period concluded and neither financial measure was achieved. Accordingly, no further changes to the fair value of the contingent consideration liability were recognized during the three months ended February 28, 2026 as no contingent consideration obligation was payable.
The fair value measurement was based on significant unobservable inputs related to projected operating performance and expected cash outflows and was therefore classified as a Level 3 fair value measurement.
The balances of assets and liabilities categorized within Level 3 of the fair value hierarchy measured at fair value on a recurring basis are reconciled, as follows for the period ended February 28, 2026:
| Equity Investments | Warrant Liability | Contingent Consideration | |
|---|---|---|---|
| Balance, May 31, 2025 | $ 8,160 | $ (1,092) | $ (15,000) |
| Unrealized gain (loss) on fair value | (3,796) | (3,495) | 15,000 |
| Instruments exercised | — | 4,587 | — |
| Balance, February 28, 2026 | $ 4,364 | $ — | $ — |
The balances of assets and liabilities categorized within Level 3 of the fair value hierarchy measured at fair value on a recurring basis are reconciled, as follows for the period ended February 28, 2025:
| Convertible notes receivable | Equity Investments | Warrant Liability | Contingent Consideration | APHA 24 Convertible Debt | |
|---|---|---|---|---|---|
| Balance, May 31, 2024 | $ 32,000 | $ 5,500 | $ (3,253) | $ (15,000) | $ (330) |
| Additions/(disposals) | (12,000) | 8,160 | — | — | 330 |
| Redemption | — | — | — | — | — |
| Unrealized gain (loss) on fair value | — | (5,500) | 2,896 | — | — |
| Impairments | (20,000) | — | — | — | — |
| Balance, February 28, 2025 | $ — | $ 8,160 | $ (357) | $ (15,000) | $ — |
The unrealized gain (loss) on assets and liabilities categorized within Level 3 of the fair value hierarchy are recognized in the consolidated statements of loss and comprehensive loss using the following inputs:
| Financial asset / financial liability | Valuation technique | Significant unobservable input | Inputs |
|---|---|---|---|
| Equity investments | Discounted cash flows | Probability of achievement | 70% |
Items measured at fair value on a non-recurring basis
The Company's prepaids and other current assets, long lived assets, including property and equipment, assets held for sale, goodwill and intangible assets are measured at fair value when there is an indicator of impairment and are recorded at fair value only when an impairment charge is recognized.
Capital and liquidity management
Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable. There have been no changes to the Company's capital management approach in the period. The Company considers its cash and cash equivalents and marketable securities as capital.
Note 25. Segment reporting
Our Company's Chief Operating Decision Maker ("CODM") is the Chairman of the Board of Directors and Chief Executive Officer. The CODM uses segment gross profit for the purpose of resource allocation, assessment of segment performance against determined targets, and in deciding whether to implement cost saving targets. The Company operates in four segments. 1) cannabis operations, which encompasses the production, distribution, sale, co-manufacturing and advisory services of both medical and adult-use cannabis, 2) beverage operations, which encompasses the production, marketing and sale of beverage products, 3) distribution operations, which encompasses the purchase and resale of pharmaceuticals products to customers, and 4) wellness products, which encompasses wellness and better-for-you foods and beverages. This structure is in line with how our CODM assesses our performance and allocates resources.
Operating segments have not been aggregated and no asset information is provided for the segments because the Company's CODM does not receive asset information by segment on a regular basis.
The following tables reconcile the Company's segment gross profit to consolidated U.S. GAAP results:
Segment costs are comprised of cost of goods sold, which include product costs, salaries and an allocation of overhead costs.
The following table reconciles the total segment gross profit to the Company's consolidated totals:
| For the three months ended | For the nine months ended | |||
|---|---|---|---|---|
| February 28, 2026 | February 28, 2025 | February 28, 2026 | February 28, 2025 | |
| Gross profit | $ 54,954 | $ 52,011 | $ 169,920 | $ 172,937 |
| Operating expenses: | ||||
| General and administrative | 50,228 | 39,246 | 142,456 | 129,356 |
| Selling | 10,617 | 13,905 | 35,321 | 41,757 |
| Amortization | 5,106 | 23,182 | 13,393 | 67,913 |
| Marketing and promotion | 8,692 | 6,793 | 28,828 | 28,079 |
| Research and development | 62 | 85 | 181 | 250 |
| Change in fair value of contingent consideration | — | — | (15,000) | — |
| Impairment of intangible assets and goodwill | — | 699,235 | — | 699,235 |
| Other than temporary change in fair value of convertible notes receivable | — | 20,000 | — | 20,000 |
| Litigation costs, net of recoveries | 621 | 2,758 | 2,497 | 5,254 |
| Restructuring costs | 4,087 | 6,133 | 5,921 | 17,249 |
| Transaction costs (income), net | 1,927 | 605 | 2,896 | 2,563 |
| Total operating expenses | 81,340 | 811,942 | 216,493 | 1,011,656 |
| Operating loss | (26,386) | (759,931) | (46,573) | (838,719) |
| Interest expense, net | (4,965) | (8,378) | (17,035) | (25,986) |
| Non-operating income (expense), net | 8,092 | (24,022) | (386) | (44,631) |
| Loss before income taxes | (23,259) | (792,331) | (63,994) | (909,336) |
| Income tax expense (recovery), net | 1,974 | 1,203 | 3,235 | 4,125 |
| Net loss | $ (25,233) | $ (793,534) | $ (67,229) | $ (913,461) |
Channels of Cannabis revenue were as follows:
| For the three months ended | For the nine months ended | |||
|---|---|---|---|---|
| February 28, 2026 | February 28, 2025 | February 28, 2026 | February 28, 2025 | |
| Revenue from Canadian medical cannabis | $ 5,979 | $ 5,839 | $ 18,359 | $ 18,773 |
| Revenue from Canadian adult-use cannabis | 52,570 | 49,315 | 179,085 | 165,627 |
| Revenue from wholesale cannabis | 1,165 | 3,893 | 6,666 | 15,993 |
| Revenue from international cannabis | 24,121 | 13,935 | 57,668 | 40,991 |
| Less excise taxes | (19,007) | (18,708) | (64,907) | (60,209) |
| Total | $ 64,828 | $ 54,274 | $ 196,871 | $ 181,175 |
Geographic net revenue:
| For the three months ended | For the nine months ended | |||
|---|---|---|---|---|
| February 28, 2026 | February 28, 2025 | February 28, 2026 | February 28, 2025 | |
| USA | $ 51,683 | $ 64,420 | $ 173,482 | $ 200,053 |
| Canada | 48,221 | 45,930 | 160,561 | 158,555 |
| EMEA | 104,955 | 72,386 | 293,363 | 229,312 |
| Rest of World | 1,873 | 3,044 | 6,334 | 8,854 |
| Total | $ 206,732 | $ 185,780 | $ 633,740 | $ 596,774 |
Geographic capital assets:
| February 28, 2026 | May 31, 2025 | |
|---|---|---|
| USA | $ 188,500 | $ 200,003 |
| Canada | 251,645 | 267,458 |
| EMEA | 98,571 | 97,371 |
| Rest of World | 4,292 | 3,601 |
| Total | $ 543,008 | $ 568,433 |
Major customers are defined as customers that are materially significant to the Company's annual revenues. For the three and nine months ended February 28, 2026 and 2025, there were no major customers representing a material contribution to our quarterly revenues.
Note 26. Subsequent Events
On March 2, 2026, Tilray Brands UK Ltd ("Tilray UK"), a wholly owned subsidiary of the Company, entered into a Business and Asset Sale Agreement (the "BrewDog BASA"). Under the BrewDog BASA, Tilray UK acquired certain business operations and assets of BrewDog plc and certain of its subsidiary undertakings (collectively, the "BrewDog Group") through a pre-packaged administration process in Scotland under the Insolvency Act 1986, with the intent for Tilray UK to carry on the acquired business operations and assets as a going concern. The assets acquired included the brewery located in Ellon, Aberdeenshire, Scotland (the "UK Brewery"), the on-line business, the retail business, 11 of the BrewDog strategic brewpubs in Scotland, England and Ireland and all the intellectual property rights relating to the BrewDog brand, including sub-brands such as Punk IPA, Hazy Jane, Wingman, Elvis Juice and Dead Pony Club. The purchase price was £33,000 (approximately $44,100).
On March 9, 2026, the Company acquired BrewDog Brewing Australia Pty Ltd., which included BrewDog's Australian brewery, along with two hospitality venues in Australia for a nominal consideration.
On March 16, 2026, Tilray BrewDog U.S., Inc., a wholly-owned subsidiary of the Company, entered into an asset purchase agreement to acquire certain strategic BrewDog assets in the U.S., including a brewery, pub, and hotel in Columbus, Ohio, as well as pubs located in New Albany, Ohio, Cleveland, Ohio, and Las Vegas, Nevada. The purchase price for BrewDog's U.S. assets is equal to $9,296.
On March 23, 2026, the Company acquired 5 additional BrewDog brewpubs in Scotland and England for a purchase price of £348 (approximately $466).