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See Note 1 for details. Current and prior year share and amounts have been retrospectively adjusted to reflect the Reverse Stock Split, which became effective on December 2, 2025. 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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended November 30, 2025

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-38594

TILRAY BRANDS, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware	82-4310622
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
265 Talbot Street West, Leamington, ON	N8H 5L4
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (844) 845-7291

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common Stock, $0.0001 par value per share

TLRY

The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☒ No ☐

As of January 6, 2026, the registrant had 116,506,916 shares of Common Stock, $0.0001 par value per share issued and outstanding.

Table of Contents

		Page
PART I.	FINANCIAL INFORMATION	1
Item 1.	Financial Statements (Unaudited)	1
	Consolidated Statements of Financial Position (Unaudited)	1
	Consolidated Statements of Loss and Comprehensive Loss (Unaudited)	2
	Consolidated Statements of Stockholders' Equity (Unaudited)	3
	Consolidated Statements of Cash Flows (Unaudited)	4
	Notes to Condensed Interim Consolidated Financial Statements (Unaudited)	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	45
Item 4.	Controls and Procedures	45
PART II.	OTHER INFORMATION	46
Item 1.	Legal Proceedings	46
Item 1A.	Risk Factors	47
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	48
Item 3.	Defaults Upon Senior Securities	48
Item 4.	Mine Safety Disclosures	48
Item 5.	Other Information	48
Item 6.	Exhibits	49
Signatures		51

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q for the fiscal quarter ended November 30, 2025 (the “Form 10-Q”) contains forward-looking statements under Canadian securities laws and within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are intended to be subject to the “safe harbor” created by those sections and other applicable laws. Such statements involve risks, uncertainties and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, our results may differ materially from those expressed or implied by such forward-looking statements under the Canadian securities laws and within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are intended to be subject to the “safe harbor” created by those sections and other applicable laws. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “project,” “will,” “would,” “seek,” or “should,” or the negative or plural of these words or similar expressions or variations are intended to identify such forward-looking statements. Forward-looking statements include, among other things, our beliefs or expectations relating to our future performance, results of operations and financial condition; our intentions regarding our cost savings initiatives; our strategic initiatives, business strategy, supply chain, brand portfolio, product performance and expansion efforts; our intentions regarding the use of net proceeds from our ATM Program; our intentions regarding our capital structure and TLRY 27 Notes; current or future macroeconomic trends; industry trends; or legislative or regulatory changes; our statements regarding the consolidation of the Canadian cannabis industry; our expectations for our positioning and cannabis market share in Europe and other markets; future corporate acquisitions and strategic transactions; and our synergies, cash savings and efficiencies anticipated from the integration of our completed acquisitions and strategic transactions.

Risks and uncertainties that may cause actual results to differ materially from forward-looking statements include, but are not limited to, those identified in this Form 10-Q and other risks and matters described in our most recent Annual Report on Form 10-K for the fiscal year ended May 31, 2025 as well as our other filings made from time to time with the U.S. Securities and Exchange Commission and in our Canadian securities filings.

Forward looking statements are based on information available to us as of the date of this Form 10-Q and, while we believe that information provides a reasonable basis for these statements, these statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements. You should not rely upon forward-looking statements or forward-looking information as predictions of future events.

We undertake no obligation to update forward-looking statements to reflect actual results or changes in assumptions or circumstances, except as required by applicable law.

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited).

TILRAY BRANDS, INC.

Consolidated Statements of Financial Position

(in thousands of United States dollars, unaudited)

	*November 30,*			*May 31,*
	*2025*			*2025*
Assets
Current assets
Cash and cash equivalents	$	246,703		$	221,666
Marketable securities		44,848			34,697
Accounts receivable, net		109,071			121,489
Inventory		283,198			270,882
Prepaids and other current assets		41,497			34,092
Assets held for sale		4,000			5,800
Total current assets		729,317			688,626
Capital assets		550,101			568,433
Operating lease, right-of-use assets		19,802			22,279
Digital assets		828			—
Intangible assets		21,735			21,423
Goodwill		752,350			752,350
Long-term investments		13,393			10,132
Other assets		11,073			11,084
Total assets	$	2,098,599		$	2,074,327
Liabilities
Current liabilities
Bank indebtedness	$	8,567		$	7,181
Accounts payable and accrued liabilities		226,422			235,322
Contingent consideration		—			15,000
Warrant liability		—			1,092
Current portion of lease liabilities		7,437			6,941
Current portion of long-term debt		16,889			14,767
Total current liabilities		259,315			280,303
Long - term liabilities
Lease liabilities		61,742			64,925
Long-term debt		138,739			148,493
Convertible debentures payable		86,255			86,428
Deferred tax liabilities, net		5,622			3,748
Other liabilities		417			855
Total liabilities		552,090			584,752
Commitments and contingencies (refer to Note 19)
Stockholders' equity
Common stock ($0.0001 par value; 1,416,000,000 common shares authorized; 116,522,600 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		6,511,483			6,401,657
Accumulated other comprehensive loss		(39,293	)		(43,063	)
Accumulated deficit		(4,892,479	)		(4,847,226	)
Total Tilray Brands, Inc. stockholders' equity		1,579,827			1,511,474
Non-controlling interests		(33,318	)		(21,899	)
Total stockholders' equity		1,546,509			1,489,575
Total liabilities and stockholders' equity	$	2,098,599		$	2,074,327

¹Current 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 for details.

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*						*Six months ended*
	*November 30,*			*November 30,*			*November 30,*			*November 30,*
	*2025*			*2024*			*2025*			*2024*
Net revenue	$	217,507		$	210,950		$	427,008		$	410,994
Cost of goods sold		160,010			149,730			312,042			290,068
Gross profit		57,497			61,220			114,966			120,926
Operating expenses:
General and administrative		51,175			45,997			92,228			90,110
Selling		11,781			16,162			24,704			27,852
Amortization		4,358			22,927			8,287			44,731
Marketing and promotion		9,981			9,720			20,136			21,286
Research and development		78			60			119			165
Change in fair value of contingent consideration		—			—			(15,000	)		—
Litigation costs, net of recoveries		869			901			1,876			2,496
Restructuring costs		965			6,869			1,834			11,116
Transaction costs (income), net		569			802			969			1,958
Total operating expenses		79,776			103,438			135,153			199,714
Operating loss		(22,279	)		(42,218	)		(20,187	)		(78,788	)
Interest expense, net		(5,374	)		(7,766	)		(12,070	)		(17,608	)
Non-operating income (expense), net		(12,310	)		(33,255	)		(8,478	)		(20,609	)
Loss before income taxes		(39,963	)		(83,239	)		(40,735	)		(117,005	)
Income tax expense (recovery), net		3,546			2,036			1,261			2,922
Net loss	$	(43,509	)	$	(85,275	)	$	(41,996	)	$	(119,927	)
Total net income (loss) attributable to:
Stockholders of Tilray Brands, Inc.		(44,931	)		(85,342	)		(45,253	)		(124,507	)
Non-controlling interests		1,422			67			3,257			4,580
Other comprehensive gain (loss), net of tax
Foreign currency translation gain (loss)		4,464			(8,966	)		4,276			(4,806	)
Comprehensive loss	$	(39,045	)	$	(94,241	)	$	(37,720	)	$	(124,733	)
Total comprehensive income (loss) attributable to:
Stockholders of Tilray Brands, Inc.		(40,994	)		(93,422	)		(41,483	)		(128,965	)
Non-controlling interests		1,949			(819	)		3,763			4,232
Weighted average number of common shares - basic¹		110,343,368			86,497,456			108,173,486			83,740,894
Weighted average number of common shares - diluted¹		110,343,368			86,497,456			108,173,486			83,740,894
Net loss per share - basic¹	$	(0.41	)	$	(0.99	)	$	(0.42	)	$	(1.49	)
Net loss per share - diluted¹	$	(0.41	)	$	(0.99	)	$	(0.42	)	$	(1.49	)

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 for details.

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)

														*Accumulated*
	*Number of*					*Number of*					*Additional*			*other*						*Non-*
	*common*			*Common*		*treasury*			*Treasury*		*paid-in*			*comprehensive*			*Accumulated*			*controlling*
	shares¹			*Stock*		shares¹			*stock*		*capital*			*loss*			*Deficit*			*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

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

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 for details.

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 six months ended*
	*November 30,*			*November 30,*
	*2025*			*2024*
Cash provided by (used in) operating activities:
Net loss	$	(41,996	)	$	(119,927	)
Adjustments for:
Deferred income tax (recovery) expense, net		1,261			1,529
Unrealized foreign exchange gain		4,899			9,627
Amortization		31,519			65,864
Accretion of convertible debt discount		3,964			5,985
Unrealized loss on digital assets		172			—
Other non-cash items		1,767			3,281
Stock-based compensation		17,335			14,154
Gain on long-term investments		306			66
Loss (gain) on derivative instruments		3,495			(1,558	)
Change in fair value of contingent consideration		(15,000	)		—
Change in non-cash working capital:
Accounts receivable		12,418			(9,051	)
Prepaids and other current assets		(7,394	)		(13,046	)
Inventory		(12,316	)		(8,127	)
Accounts payable and accrued liabilities		(10,308	)		(24,828	)
Net cash used in operating activities		(9,878	)		(76,031	)
Cash provided by (used in) investing activities:
Investment in capital and intangible assets		(19,219	)		(12,172	)
Proceeds from disposal of capital and intangible assets		427			631
Investment in digital assets		(1,000	)		—
Purchase of marketable securities, net		(10,151	)		(30,369	)
Investment in long-term investments		(3,595	)		—
Business acquisitions, net of cash acquired		—			(18,210	)
Net cash used in investing activities		(33,538	)		(60,120	)
Cash provided by (used in) financing activities:
Share capital issued, net of cash issuance costs		73,058			111,517
Proceeds from warrants exercised		2,367			—
Repayment of long-term debt		(6,872	)		(10,388	)
Repayment of convertible debt		—			(330	)
Repayment of lease liabilities		(1,991	)		(1,724	)
Net decrease in bank indebtedness		1,386			(282	)
Net cash provided by financing activities		67,948			98,793
Effect of foreign exchange on cash and cash equivalents		505			(1,284	)
Net increase (decrease) in cash and cash equivalents		25,037			(38,642	)
Cash and cash equivalents, beginning of period		221,666			228,340
Cash and cash equivalents, end of period	$	246,703		$	189,698

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 November 30, 2025 (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.

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 November 30, 2025 and November 30, 2024, the dilutive potential common share equivalents outstanding consisted of the following: 7,734,265.and 2,336,535 common shares from RSUs, 303,203 and 306,032 common shares from share options, nil and 620,900 common shares for warrants and 3,766,478 and 5,875,706 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.

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. 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.

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.

Note 2. Inventory

Inventory consisted of the following:

	*November 30,*		*May 31,*
	*2025*		*2025*
Beverage inventory	$	67,363	$	63,965
Cannabis plants		29,117		24,045
Dried cannabis		106,114		103,507
Cannabis derivatives		3,798		7,877
Cannabis vapes		1,639		1,860
Packaging and other inventory items		13,532		15,366
Distribution inventory		48,104		38,735
Wellness inventory		13,531		15,527
Total	$	283,198	$	270,882

Note 3. Capital assets

Capital assets consisted of the following:

	*November 30,*			*May 31,*
	*2025*			*2025*
Land	$	45,188		$	44,529
Production facilities		415,110			407,650
Equipment		278,205			280,585
Leasehold improvements		22,060			20,415
Finance lease, right-of-use assets		39,406			40,308
Construction in progress		12,469			11,241
	$	812,438		$	804,728
Less: accumulated amortization		(262,337	)		(236,295	)
Total	$	550,101		$	568,433

Assets held for sale consisted of the following:

	*November 30,*		*May 31,*
	*2025*		*2025*
Production facilities	$	4,000	$	5,800
Total	$	4,000	$	5,800

As of November 30, 2025, the Company classified the Fort Collins, CO partially vacant warehouse facility from its Cannabis reporting segment as held for sale. During the three months ended November 30, 2025, the Company recorded a reduction in fair value of $1,800 for the Fort Collins, CO asset group in the consolidated statement of loss and comprehensive loss. Subsequent to the period ended November 30, 2025, the Company completed the sale of the Fort Collins asset group.

Note 4. Leases

The table below presents the lease-related assets and liabilities recorded on the balance sheet.

		*November 30,*		*May 31,*
	*Classification on Balance Sheet*	*2025*		*2025*
Assets
Finance lease, right-of-use assets	Capital assets	$	39,406	$	40,308
Operating lease, right-of-use assets	Operating lease, right-of-use assets		19,802		22,279
Total right-of-use assets		$	59,208	$	62,587
Liabilities
Current:
Current portion of finance lease liabilities	Current portion of lease liabilities	$	1,628	$	1,560
Current portion of operating lease liabilities	Current portion of lease liabilities		5,809		5,381
Non-current:
Finance lease liabilities	Lease liabilities		43,597		44,295
Operating lease liabilities	Lease liabilities		18,145		20,630
Total lease liabilities		$	69,179	$	71,866

The following table presents the future undiscounted payments associated with lease liabilities as of November 30, 2025:

	*Operating*			*Finance*
	*leases*			*leases*
2026 (remaining six months)	$	3,711		$	2,260
2027		6,938			4,521
2028		5,920			4,521
2029		2,939			4,373
Thereafter		11,004			66,816
Total minimum lease payments	$	30,512		$	82,491
Imputed interest		(6,558	)		(37,266	)
Obligations recognized	$	23,954		$	45,225

Note 5. Intangible Assets

Intangible assets consisted of the following items:

	*Customer relationships & distribution channel*			*Licenses, permits & applications*			*Intellectual property, trademarks, knowhow & brands*			*November 30,*
										*2025*
Cost	$	2,376		$	15,101		$	15,466		$	32,943
Accumulated amortization		(100	)		(7,245	)		(3,863	)		(11,208	)
Total	$	2,276		$	7,856		$	11,603		$	21,735

As of November 30, 2025, 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 November 30, 2025 is as follows:

	*Amortization*
2026 (remaining six months)	$	3,238
2027		6,476
2028		4,512
2029		2,548
2030		2,548
Thereafter		2,413
Total	$	21,735

Note 6. Goodwill

The following table shows the carrying amount of goodwill by reporting units:

	*November 30,*
	*2025*
Cannabis Goodwill	$	2,640,669
Accumulated impairment losses		(1,888,319	)
Total	$	752,350

	*Reporting Unit*												*May 31,*
	*Beverage*			*Cannabis*			*Wellness*			*Distribution*			*2025*
Goodwill	$	120,802		$	2,640,669		$	77,470		$	4,458		$	2,843,399
Accumulated impairment losses		(120,802	)		(1,888,319	)		(68,186	)		(4,235	)		(2,090,654	)
Effect of foreign exchange		—			—			(9,284	)		(223	)		(395	)
Total	$	—		$	752,350		$	—		$	—		$	752,350

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 six months ended November 30, 2025 and approximately $nil and $13,700 for the three and six months ended November 30, 2024, respectively, and its consolidated net loss and comprehensive net loss would have increased by approximately $nil and $nil for the three and six months ended November 30, 2025 and approximately $nil and $4,000 for the three and six months ended November 30, 2024, 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.

Note 8. Long term investments

Long term investments consisted of the following:

	*November 30,*		*May 31,*
	*2025*		*2025*
Equity investments measured at fair value	$	5,233	$	1,972
Equity investments under measurement alternative		8,160		8,160
Total	$	13,393	$	10,132

As of November 30, 2025 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 $8,160. 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 November 30, 2025, 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 November 30, 2025, a total of €7,386 ($8,567) 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 November 30, 2025, 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:

	*November 30,*		*May 31,*
	*2025*		*2025*
Trade payables	$	114,496	$	107,348
Accrued liabilities		82,519		103,260
Litigation accruals		12,013		12,431
Accrued payroll and employment related taxes		5,151		1,436
Income taxes payable		1,905		58
Accrued interest		3,873		4,193
Sales taxes payable		6,465		6,596
Total	$	226,422	$	235,322

Note 11. Long-term debt

The following table sets forth the net carrying amount of long-term debt instruments:

	*November 30,*			*May 31,*
	*2025*			*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	$	36,720		$	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		10,788			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		8,772			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		90			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		1,930			2,020
Term loan ‐ €3,500 ‐ at 4.59%, 5‐year term, repayable in monthly installments of €52 plus interest, due in August 2028		2,216			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		19,047			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		77,063			80,438
Carrying amount of long-term debt		156,626			164,124
Unamortized financing fees		(998	)		(864	)
Net carrying amount		155,628			163,260
Less principal portion included in current liabilities		(16,889	)		(14,767	)
Total non-current portion of long-term debt	$	138,739		$	148,493

Note 12. Convertible debentures payable

The following table sets forth the net carrying amount of the convertible debentures payable:

	*November 30,*		*May 31,*
	*2025*		*2025*
5.20% Convertible Notes ("TLRY 27")	$	86,255	$	86,428
Deduct - current portion		—		—
Total convertible debentures payable, non current portion	$	86,255	$	86,428

TLRY 27 Notes

	*November 30,*			*May 31,*
	*2025*			*2025*
5.20% Contractual debenture	$	172,500		$	172,500
Debt settlement		(72,500	)		(67,500	)
Unamortized discount		(13,745	)		(18,572	)
Net carrying amount	$	86,255		$	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 six months ended November 30, 2025, 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 November 30, 2025 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 six months ended November 30, 2025, the Company recognized interest expense of $1,256 and $2,623 and accretion of amortized discount interest of $1,988 and $3,964 respectively. During the three and six months ended November 30, 2024, the Company recognized interest expense of $2,133 and $4,375 and accretion of amortized discount interest of $2,919 and $5,985 respectively.

As of November 30, 2025, 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 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 November 30, 2025 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 November 30, 2025, the Company had issued and outstanding 116,522,600 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 six months ended November 30, 2025, the Company issued the following shares of Common Stock:

6,777,224 shares of Common Stock 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.

1,259,182 shares of Common Stock 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 to settle exercised warrants.
	d)	861,707 shares of Common Stock to settle dividends payable to the non-controlling shareholders of Aphria Diamond in the amount of $14,821.
	e)	935,712 shares of Common Stock in connection with the exercise of previously awarded stock-based compensation awards, net of cancellations.

During the six months ended November 30, 2025, the Company granted 4,551,621 time-based Restricted Stock Units (“RSUs”).

During the fiscal year ended May 31, 2024, the Company issued 756,615 performance-based RSUs. These RSUs were not considered granted for accounting purposes at the time of issuance, as the performance conditions had not yet been established or approved and no amounts have been recorded within the Consolidated Statement of Income (Loss). During the intervening period, from their initial issuance to the current quarter, the total number of performance-based RSUs was reduced to 744,117 due to attrition. During the three months ended November 30, 2025, the Company established and approved the relevant performance targets for the performance-based RSUs and consequently considered them granted for accounting purposes. In conjunction with this award, an additional component of these performance based grants are payable in cash or its equivalent in shares of Common Stock at the discretion of Company’s Compensation Committee. Given the expected settlement in Common Stock, the fair value of these awards has also been recorded as stock-based compensation, with the corresponding liability reflected on the Statement of Financial Position. As a result, during the three months ended November 30, 2025, the Company began accruing the fair value of these awards over the remaining requisite service period.

The Company's total stock-based compensation expense incurred for the three and six months ended November 30, 2025 was $12,283 and $17,335 compared to $7,237 and $14,154 for the three and six months ended November 30, 2024, 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.

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	)

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	)

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 November 30, 2025:

				*Aphria*			*ColCanna*			*November 30,*
	*Enroot*			*Diamond*			*S.A.S.*			*2025*
Current assets	$	203		$	69,005		$	3		$	69,211
Non-current assets		—			108,486			3,761			112,247
Current liabilities		(4	)		(124,948	)		(7,030	)		(131,982	)
Non-current liabilities		—			(31,529	)		(1,440	)		(32,969	)
Net assets	$	199		$	21,014		$	(4,706	)	$	16,507

	SH		CC Pharma		Aphria			ColCanna			May 31,
	Acquisition		Nordic ApS		Diamond			S.A.S.			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 six months ended November 30, 2025:

				*Aphria*			*ColCanna*			*November 30,*
	*Enroot*			*Diamond*			*S.A.S.*			*2025*
Revenue	$	4		$	31,258		$	—		$	31,262
Total expenses		7			24,762			(736	)		24,033
Net (loss) income		(3	)		6,496			736			7,229
Other comprehensive (loss) income		—			1,120			(415	)		705
Net comprehensive (loss) income	$	(3	)	$	7,616		$	321		$	7,934
Non-controlling interest %		25	%		49	%		10	%	NA
Comprehensive (loss) income attributable to NCI		(1	)		3,732			32			3,763
Net comprehensive (loss) income attributable to NCI	$	(1	)	$	3,732		$	32		$	3,763

	SH			*CC Pharma*			*Aphria*			*ColCanna*			*November 30,*
	*Acquisition*			*Nordic ApS*			*Diamond*			*S.A.S.*			*2024*
Revenue	$	—		$	—		$	36,429		$	—		$	36,429
Total expenses		—			5			26,919			793			27,717
Net (loss) income		—			(5	)		9,510			(793	)		8,712
Other comprehensive (loss) income		—			(1	)		(796	)		434			(363	)
Net comprehensive (loss) income	$	—		$	(6	)	$	8,714		$	(359	)	$	8,349
Non-controlling interest %		32	%		25	%		49	%		10	%	NA
Comprehensive (loss) income attributable to NCI		—			(2	)		4,270			(36	)		4,232
Net comprehensive (loss) income attributable to NCI	$	—		$	(2	)	$	4,270		$	(36	)	$	4,232

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 $3,546 and $1,261 for the three and six months ended November 30, 2025, and $2,036 and $2,922 for the three and six months ended November 30, 2024. 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	$	156,626	$	16,889	$	13,624	$	94,715	$	3,619	$	27,779
Convertible debentures payable		100,000		—		—		100,000		—		—
Material purchase obligations		63,319		33,363		28,261		615		530		550
Construction commitments		1,209		1,209		—		—		—		—
Total	$	321,154	$	51,461	$	41,885	$	195,330	$	4,149	$	28,329

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.

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 November 30, 2025 and May 31, 2025 was $12,013 and $12,431, respectively. 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 six months ended November 30, 2025 and three and six months ended November 30, 2024 were as follows:

	*For the three months ended*						*For the six months ended*
	*November 30,*			*November 30,*			*November 30,*			*November 30,*
	*2025*			*2024*			*2025*			*2024*
Beverage revenue	$	53,552		$	66,861		$	112,064		$	126,024
Beverage excise taxes		(3,469	)		(3,780	)		(6,242	)		(6,971	)
Net beverage revenue		50,083			63,081			105,822			119,053
Cannabis revenue		90,208			87,208			177,943			168,402
Cannabis excise taxes		(22,676	)		(21,556	)		(45,900	)		(41,501	)
Net cannabis revenue		67,532			65,652			132,043			126,901
Distribution revenue		85,316			67,611			159,323			135,682
Wellness revenue		14,576			14,606			29,820			29,358
Total	$	217,507		$	210,950		$	427,008		$	410,994

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 six months ended November 30, 2025 and three and six months ended November 30, 2024 were as follows:

	*For the three months ended*				*For the six months ended*
	*November 30,*		*November 30,*		*November 30,*		*November 30,*
	*2025*		*2024*		*2025*		*2024*
Beverage costs		34,351		37,925		68,764	$	70,975
Cannabis costs		41,398		42,475		82,639		79,529
Distribution costs		74,334		59,207		140,342		119,345
Wellness costs		9,927		10,123		20,297		20,219
Total	$	160,010	$	149,730	$	312,042	$	290,068

Note 21. General and administrative expenses

General and administrative expenses for the three and six months ended November 30, 2025 and three and six months ended November 30, 2024 were as follows:

	*For the three months ended*						*For the six months ended*
	*November 30,*			*November 30,*			*November 30,*			*November 30,*
	*2025*			*2024*			*2025*			*2024*
Salaries and wages	$	24,764			22,726		$	46,500		$	44,293
Office and general		8,284			9,458			16,981			18,718
Stock-based compensation		12,283			7,237			17,335			14,154
Insurance		2,456			3,155			4,849			5,610
Professional fees		1,034			1,126			2,252			2,304
Gain on sale of capital assets		(134	)		(505	)		(375	)		(531	)
Travel and accommodation		1,292			1,754			2,604			3,247
Rent		1,196			1,046			2,082			2,315
Total	$	51,175		$	45,997		$	92,228		$	90,110

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 $965 and $1,834 for the three and six months ended November 30, 2025, compared to $6,869 and $11,116 for the three and six months ended November 30, 2024. 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 six months ended November 30, 2025, the Company incurred restructuring-related expenses totaling $1,834. These charges included $670 associated with the restructuring of the Quebec facility to transition from vegetable cultivation to cannabis cultivation in response to increased global cannabis demand, $843 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 $144 related to its Fort Collins, CO partially vacant warehouse recorded under assets held of sale. 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 $4,570 was recognized in the six months ended November 30, 2025 thereby, reducing the accrual to $3,930.

Note 23. Non-operating income (expense), net

Non-operating income (expense), net for the three and six months ended November 30, 2025 and three and six months ended November 30, 2024 were as follows:

	*For the three months ended*						*For the six months ended*
	*November 30,*			*November 30,*			*November 30,*			*November 30,*
	*2025*			*2024*			*2025*			*2024*
Change in fair value of warrant liability	$	175		$	862		$	(3,495	)	$	1,558
Foreign exchange gain (loss)		(10,327	)		(33,797	)		(3,399	)		(21,916	)
(Loss) gain on long-term investments		(345	)		(27	)		(306	)		(66	)
Unrealized loss on digital assets		(164	)		—			(172	)		—
Other non-operating (losses) gains, net		(1,649	)		(293	)		(1,106	)		(185	)
Total	$	(12,310	)	$	(33,255	)	$	(8,478	)	$	(20,609	)

The other non-operating losses (gains), net for the three and six months ended November 30, 2025, were losses of $1,649 and $1,106 which was mainly comprised of a loss of $1,800 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).

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 November 30, 2025 and May 31, 2025, the Company had long-term debt of $2,216 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 November 30, 2025 and May 31, 2025 and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value:

							*November 30,*
	*Level 1*		*Level 2*		*Level 3*		*2025*
Financial assets
Cash and cash equivalents	$	246,703	$	—	$	—	$	246,703
Marketable securities		44,848		—		—		44,848
Equity investments measured at fair value		4,229		1,004		8,160		13,393
Digital assets		828		—		—		828
Total recurring fair value measurements	$	296,608	$	1,004	$	8,160	$	305,772

								*May 31,*
	*Level 1*		*Level 2*		*Level 3*			*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 six months ended November 30, 2025, 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 November 30, 2025:

	*Quantity*		*Cost Basis*		*Fair Value*		*Cumulative Unrealized Gain (Loss)*
Bitcoin		9.16	$	1,000	$	828	$	(172	)
Total digital assets		9.16	$	1,000	$	828	$	(172	)

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.

A portion of the consideration to be paid in connection with the Company’s acquisition of Montauk Brewing Company (“Montauk”) is contingent upon the achievement of certain financial measures as of December 31, 2025. If achieved, such contingent consideration is payable in cash. During the six months ended November 30, 2025, the contingent consideration amount was reassessed and was estimated by applying a probability of achievement of 0% on the $15,000 sales earn-out component and 0% on the remaining criteria. The Montauk contingent earn-out is no longer expected to be achieved based on Montauk's current operating results, and as such resulted in a corresponding change in fair value of $15,000 for the contingent consideration liability recognized. The unobservable inputs into the future expected cash outflows result in a fair value measurement classified as Level 3.

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 November 30, 2025:

	*Equity*		*Warrant*			*Contingent*
	*Investments*		*Liability*			*Consideration*
Balance, May 31, 2025	$	8,160	$	(1,092	)	$	(15,000	)
Unrealized gain (loss) on fair value		—		(3,495	)		15,000
Instruments exercised		—		4,587			—
Balance, November 30, 2025	$	8,160	$	—		$	—

											*APHA 24*
	*Convertible*		*Equity*		*Warrant*			*Contingent*			*Convertible*
	*notes receivable*		*Investments*		*Liability*			*Consideration*			*Debt*
Balance, May 31, 2024	$	32,000	$	5,500	$	(3,253	)	$	(15,000	)	$	(330	)
Additions/(Repayments)		—		—		—			—			330
Unrealized gain (loss) on fair value		—		—		1,558			—			—
Balance, November 30, 2024	$	32,000	$	5,500	$	(1,695	)	$	(15,000	)	$	—

The unrealized gain (loss) on fair value for the convertible debenture, the warrant liability, contingent consideration, and debt securities classified under available-for-sale method is recognized in the consolidated statements of loss and comprehensive loss using the following inputs:

		*Significant*
	*Valuation*	*unobservable*
Financial asset / financial liability	*technique*	*input*	*Inputs*
Contingent consideration	Discounted cash flows	Probability of achievement	0%
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, 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.

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:

	*For the three months ended*				*For the six months ended*
	*November 30,*		*November 30,*		*November 30,*		*November 30,*
	*2025*		*2024*		*2025*		*2024*
Beverage
Net beverage revenue	$	50,083	$	63,081	$	105,822	$	119,053
Beverage costs		34,351		37,925		68,764		70,975
Beverage gross profit		15,732		25,156		37,058		48,078
Cannabis
Net cannabis revenue		67,532		65,652		132,043		126,901
Cannabis costs		41,398		42,475		82,639		79,529
Cannabis gross profit		26,134		23,177		49,404		47,372
Distribution
Distribution revenue		85,316		67,611		159,323		135,682
Distribution costs		74,334		59,207		140,342		119,345
Distribution gross profit		10,982		8,404		18,981		16,337
Wellness
Wellness revenue		14,576		14,606		29,820		29,358
Wellness costs		9,927		10,123		20,297		20,219
Wellness gross profit		4,649		4,483		9,523	$	9,139
Total
Total revenue		217,507		210,950		427,008		410,994
Total costs		160,010		149,730		312,042		290,068
Total gross profit	$	57,497	$	61,220	$	114,966	$	120,926

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 six months ended*
	*November 30,*			*November 30,*			*November 30,*			*November 30,*
	*2025*			*2024*			*2025*			*2024*
Gross profit	$	57,497		$	61,220		$	114,966		$	120,926
Operating expenses:
General and administrative		51,175			45,997			92,228			90,110
Selling		11,781			16,162			24,704			27,852
Amortization		4,358			22,927			8,287			44,731
Marketing and promotion		9,981			9,720			20,136			21,286
Research and development		78			60			119			165
Change in fair value of contingent consideration		—			—			(15,000	)		—
Litigation costs, net of recoveries		869			901			1,876			2,496
Restructuring costs		965			6,869			1,834			11,116
Transaction costs (income), net		569			802			969			1,958
Total operating expenses		79,776			103,438			135,153			199,714
Operating loss		(22,279	)		(42,218	)		(20,187	)		(78,788	)
Interest expense, net		(5,374	)		(7,766	)		(12,070	)		(17,608	)
Non-operating income (expense), net		(12,310	)		(33,255	)		(8,478	)		(20,609	)
Loss before income taxes		(39,963	)		(83,239	)		(40,735	)		(117,005	)
Income tax expense (recovery), net		3,546			2,036			1,261			2,922
Net loss	$	(43,509	)	$	(85,275	)	$	(41,996	)	$	(119,927	)

Channels of Cannabis revenue were as follows:

	*For the three months ended*						*For the six months ended*
	*November 30,*			*November 30,*			*November 30,*			*November 30,*
	*2025*			*2024*			*2025*			*2024*
Revenue from Canadian medical cannabis	$	6,234		$	6,673		$	12,380		$	12,934
Revenue from Canadian adult-use cannabis		62,448			59,077			126,515			116,312
Revenue from wholesale cannabis		1,346			6,593			5,501			12,100
Revenue from international cannabis		20,180			14,865			33,547			27,056
Less excise taxes		(22,676	)		(21,556	)		(45,900	)		(41,501	)
Total	$	67,532		$	65,652		$	132,043		$	126,901

Geographic net revenue:

	*For the three months ended*				*For the six months ended*
	*November 30,*		*November 30,*		*November 30,*		*November 30,*
	*2025*		*2024*		*2025*		*2024*
USA	$	57,838	$	71,753	$	121,799	$	135,633
Canada		54,173		56,720		112,340		112,625
EMEA		103,155		79,254		188,408		156,926
Rest of World		2,341		3,223		4,461		5,810
Total	$	217,507	$	210,950	$	427,008	$	410,994

Geographic capital assets:

	*November 30,*		*May 31,*
	*2025*		*2025*
USA	$	193,897	$	200,003
Canada		253,515		267,458
EMEA		98,446		97,371
Rest of World		4,243		3,601
Total	$	550,101	$	568,433

Major customers are defined as customers that are materially significant to the Company’s annual revenues. For the three and six months ended November 30, 2025 and 2024, there were no major customers representing a material contribution to our quarterly revenues.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the Unaudited Interim Consolidated Financial Statements and the related Notes thereto for the three month period ended November 30, 2025 contained in this Quarterly Report on Form 10-Q (“Form 10-Q”) and the Audited Consolidated Financial Statements and the related Notes thereto contained in our Annual Report on Form 10-K for the fiscal year ended May 31, 2025, as well as in conjunction with the sections entitled “Item 1A. Risk Factors” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended May 31, 2025 and in the section entitled “Item 1A. Risk Factors” in this Form 10-Q. Forward looking statements in this Form 10-Q are qualified by the cautionary statement included in this Form 10-Q under the sub-heading “Cautionary Note Regarding Forward-Looking Statements” in the introduction of this Form 10-Q.

Company Overview

Tilray Brands, Inc., a Delaware corporation (collectively, along with its subsidiaries, the “Company”, “Tilray”, “we”, “us” and “our”), is a leading global lifestyle consumer products company, which was incorporated on January 24, 2018 and is headquartered in Leamington and New York, with operations in Canada, the United States, Europe, Australia and Latin America that is leading as a transformative force at the nexus of cannabis, beverage, wellness, and entertainment, elevating lives through moments of connection. Tilray’s mission is to be a leading premium lifestyle company with a house of brands and innovative products that inspire joy, wellness and create memorable experiences.

Our overall strategy is to leverage our brands, infrastructure, expertise and capabilities to drive revenue growth in the industries in which we compete, achieve industry-leading profitability and build sustainable, long-term shareholder value. In order to ensure the long-term sustainable growth of our Company, we continue to focus on developing strong capabilities in data analytics and consumer insights, drive category management leadership and assess opportunities for the introduction of new categories, products and entries into new geographies. In addition, we are relentlessly focused on managing our cost structure and expenses in order to maintain our strong financial position. Finally, our experienced leadership team provides a strong foundation to accelerate our growth. Our management team is complemented by experienced operators, cannabis industry experts, veteran beer and beverage industry leaders and leaders that are well-established in wellness and better-for-you products, all of whom apply an innovative and consumer-centric approach to our businesses.

Trends and Other Factors Affecting Our Business

Beverage market trends:

Within the beverage category, we expect the following key trends to continue to shape the near-term outlook in this segment:

Beverage Distribution. In furtherance of our strategic vision, we remain focused on enhancing our relevance within home markets with mission critical SKUs, focusing on our core brands in their core markets and on driving growth of our highest margin SKUs within these brands. Through targeted efforts, we continue to strategically optimize our price/pack/channel architecture and drive distribution to continue to execute against our craft beer strategy, streamlining our business, enhancing our relevance and focusing resources on our core markets. The 2025 Spring retail product resets demonstrated improvements in the distribution of our core brands and key innovation initiatives, including Shock Top, Runner’s High non-alcoholic, and SweetWater Brewing’s newly launched Day Trip and Dive Beer amongst others. We have started to see the impact of these gains throughout fiscal year 2026.

Innovation. In the United States, we have been closely monitoring consumer beverage trends, which have included consumers drinking less beverage alcohol products and, when consuming alcoholic beverages, the increasing demand for ready-to-drink cocktail options. To address these trends, we have engaged in strategic innovation based on data analysis, consumer insights, and portfolio diversification into alternative beverage options. For the consumer seeking to reduce their beverage alcohol consumption, our recent innovations include launching a portfolio of Non-Alcoholic craft beer, sparkling waters under our Liquid Love brand, and clean label energy drinks fortified with vitamins. Our other innovative products include Hemp Derived Delta-9 (HD-D9) beverages. Although new U.S. federal legislation was recently enacted that will restrict the production and sale of our HD‑D9 beverages beginning in November 2026, we believe that new regulations could evolve prior to that date to permit continued sales of HD-D9 beverages under the recent executive order directing the U.S. rescheduling of cannabis products. These strategic innovations underscore our commitment to offering high-quality options across a diverse range of beverage categories, positioning us for sustained growth by meeting consumer demand and differentiation in the competitive beverage segment.

Brew Pubs. We currently operate 17 brew pubs, including our Breckenridge Distillery restaurant and tasting room, in geographic regions across the U.S. and core markets for the associated craft brands. An important part of our strategic plan for our craft beer business centers on the role that brew pubs play in promoting and showcasing the distinct, regional positioning of our various craft beer brands. They provide our consumers with a venue in which to connect with others and have an immersive brand experience which serves to enhance brand loyalty and drive immediate and long-term revenue growth. We also believe that our brew pub strategy fuels trial and innovation by allowing us to curate unique small batch product offerings in targeted test markets.

In the spirits category, Breckenridge Distillery combines premium craftsmanship, award-winning quality, and experiential tourism appeal, reinforcing its niche as a lifestyle-driven spirits brand. The distillery has earned multiple prestigious accolades across Whiskey, Gin, and Vodka, including three Icons of Whisky awards, ten Best American Blended Whiskey honors at the World Whiskies Awards, and recognition as Colorado Distillery of the Year. Recent achievements include Breckenridge Reserve Port Cask Finish being named the World’s Best Finished Bourbon at the 2024 World Whiskies Awards. Breckenridge Distillery products are available in all 50 states, with continued planned expansion and product innovations. Recent launches include Mock One – a non-alcoholic spirits line, Mountain Shot – flavored whiskey in convenient pouches, and Casa Breck Tequila, all underscoring our commitment to innovation and evolving consumer preferences. Despite prevailing challenges within the overall spirits market, we believe our focus on whiskey—a resilient segment—combined with our award-winning portfolio and innovative product introductions, positions Breckenridge Distillery for sustained growth and enhanced market presence.

Canadian cannabis market trends:

The cannabis industry in Canada continues to evolve given how nascent the industry is with federal legalization of adult-use cannabis occurring just over five years ago. Through analysis of the current market conditions, the following key trends have emerged and are anticipated to influence the near-term future in the Canadian cannabis industry:

Market share. During the quarter, Tilray continued to lead the Canadian market with the highest cannabis revenue in Canada. Additionally, during the quarter, we experienced a marginal decrease in market share in Canada from 9.4% to 9.3% from the immediately preceding quarter as reported by Hifyre data for all provinces, excluding Quebec where Weedcrawler was deemed more accurate. The current period decrease in market share reflects our strength in flower and non-infused pre-roll categories which was offset by our lower participation in specific categories experiencing the most price compression. Additionally, we continue to enhance our global supply chain and increase our cultivation footprint to support the growing demand for our product in both Canadian and international cannabis markets. In the meantime, we continue to opportunistically redirect certain inventories to international cannabis markets, which is expected to generate higher margin sales.

Price compression. Historical price compression in specific categories is expected to persist in the market, intensified by fierce competition among the approximately 1,000 Licensed Producers in Canada. The fixed impact of excise per gram, notwithstanding the decline in average selling prices, further compounds these challenges, and has promoted ongoing industry lobbying efforts.

International cannabis trends:

We are a global leader in the development, production, distribution, marketing and sale of pharmaceutical-grade medical cannabis products. The cannabis industry in Europe is still in its early stages of development and countries within Europe are at different stages of medical and adult-use cannabis legalization. The most meaningful progress to date has been the legalization and regulation of cannabis for medical purposes, which has now taken place in more than 19 countries representing a population of more than 477 million people (Germany, UK, Italy, Poland, Netherlands, Czech Republic, Greece, Portugal, Austria, Switzerland, Denmark, Croatia, Malta, Luxembourg, Ukraine, Sweden, Norway, Türkiye, Ireland, and Israel). Beyond this, some countries have expressed a clear political ambition to legalize adult-use cannabis (Portugal and Luxembourg), some are engaging in experiments for adult-use legalization (Germany, Netherlands, Malta, Czech Republic and Switzerland) and some are debating regulations for cannabinoid-based medicine (France and Spain). In Europe, we believe that, despite continuing recessionary economic conditions, political uncertainty in various countries and the continuing Russian conflict with Ukraine, cannabis legalization (both medicinal and adult-use) will continue to gain traction albeit more slowly than originally expected. This is evidenced by the cannabis regulations in Germany adopted on April 1, 2024, which we believe will serve as a catalyst for continued changes in drug policy throughout Europe. Outside of Europe and North America, the cannabis industry is also in its early stages of development with Australia representing one of the larger markets and with some Latin American countries also growing their respective medical cannabis markets, such as Argentina, Panama, Colombia and Brazil.

We continue to believe that Tilray remains uniquely well-positioned to maintain and gain significant market share in the markets in which we participate. We benefit from our end-to-end vertically-integrated infrastructure and well-placed investments, which are comprised of two EU-GMP cultivation facilities located in Portugal and Germany; our fully owned route-to-market encompassing sales, marketing and distribution infrastructure in Germany, Australia and Italy; a network of leading distributors who we work with in the various other countries in which we participate; and, our extensive genetics portfolio and demonstrated commitment and expertise related to the cultivation and production of high-quality, safe cannabis products. Tilray’s International business also benefits from the depth and breadth of knowledge, experience, relationships and infrastructure we have gleaned from our leading participation and investment into the Canadian medical and adult-use markets. Tilray is proudly pioneering the effort to further understand the therapeutic value of cannabis through the guidance of its independent Medical Advisory board and through partnerships with leading research institutions globally, Tilray is currently supporting clinical trials around the world studying the efficacy of cannabis in treading various indications. We believe that these assets and attributes, combined with our ability to navigate complex regulatory environments, will continue to drive our leadership in international medical markets and allow us to successfully enter new markets as they adopt medical cannabis and potentially adult-use regulations and may also serve to support a potential U.S. participation.

Germany. Today, Germany remains the largest medical cannabis market in Europe.

We continue to believe that Tilray is well-positioned in Germany, especially considering the enactment of MedCanG and given that we are one of only three manufacturers of medical cannabis in Germany since our wholly owned subsidiary, Aphria RX, was awarded the first license for the cultivation of medical cannabis in Germany by the BfArM under the liberalized regime. Said license will improve our ability to meet the needs of patients and provide cannabis of the utmost quality and enhanced availability to a broader market.

As the market continues to mature, we have seen increased demands and differentiation specifically with medical cannabis flowers. In response, we have launched Redecan and Good Supply brands and related medical cannabis products, which provides the patient with a segmented portfolio of products while we continue to deliver on the trust, safety and consistency that has become expected from our Tilray Medical brand.

Poland. In Poland, cannabis was legalized for medical use in 2018 and is prescribed to patients by a physician and dispensed by pharmacies. Today, all doctors in Poland are allowed to prescribe medical cannabis and it is a self-pay market as medical cannabis is not refundable by the Polish health service. Tilray is a leading supplier of medical cannabis in Poland through our network of distributor partnerships. We predominantly supply the market with whole flower medical cannabis products.

United Kingdom. Since November 2018, doctors in the UK have been able to prescribe medical cannabis for medicinal use for patients with medical conditions that had failed to respond to first-line medications. The market today is predominantly all self-pay and prescriptions are facilitated by private clinics. Today, we supply the UK market with mainly whole flower products from both the Tilray Medical and Broken Coast brands through our distributor partners with sights on growing our portfolio to extracts and other formats.

Ireland. In June 2019, the Minister for Health signed legislation allowing for the operation of the Medical Cannabis Access Programme (“MCAP”) on a pilot basis for five years. The MCAP allows a medical consultant to prescribe a cannabis-based treatment for a narrow set of specified medical conditions, where the patient has failed to respond to standard treatment. Reimbursement is available for products which have received the appropriate approvals. Tilray was one of the first players to enter the Irish market and is one of a few suppliers which has received approval for its products to be prescribed and to have been granted reimbursement status. Today, we supply our approved extract product to Ireland through our distribution partner.

Italy. In May 2023, Tilray Medical received authorization from Italy’s Ministry of Health to distribute three new medical cannabis compounds. These medical cannabis compounds are distributed by FL Group, our wholly-owned subsidiary, to pharmacies across Italy. With FL Group, we have an established broad national pharmaceutical distribution network in Italy, where medical cannabis is prescribed by doctors and reimbursed by the healthcare system to eligible patients. In 2025, Tilray has received additional cannabis flower and extract product authorizations and has formed a strategic partnership with Molteni Farmaceutici with the commitment to broaden the availability of Tilray Medical products for patients across Italy.

Australia. In 2016, the Australian Government legalized medicinal cannabis, which is regulated by the Therapeutic Goods Administration. Medical cannabis is prescribed by a doctor but there is no coverage under the Pharmaceutical Benefits Scheme. Tilray Medical supplies the market with wide portfolio of medical cannabis extracts as well as whole flower products. As the market continues to mature, we have seen increased demands and differentiation specifically with medical cannabis flowers. In response, we launched the Broken Coast, Redecan and Good Supply brands and products, which provides the patient with a segmented portfolio of products while we continue to deliver on the trust, safety and consistency that has become expected from our Tilray Medical brand.

Luxembourg. Luxembourg established its medical cannabis framework in 2018, with the national program operational since February 2019. Medical cannabis is tightly regulated, accessible only through trained physicians and dispensed exclusively via hospital pharmacies. Prescriptions are limited to patients with defined, severe medical conditions, and all treatments are covered by public health insurance. In January 2025, Luxembourg updated its regulations to phase-out high-THC flower products, now permitting only balanced or high-CBD flower and oil-based extracts. This shift reflects the government’s commitment to standardized, pharmaceutical-grade cannabis therapies and patient safety. Tilray Deutschland GmbH was awarded the official government tender in 2025 to supply medical cannabis flower, demonstrating our leadership in centralized procurement and compliance with Luxembourg’s rigorous standards.

Portugal. Portugal legalized medical cannabis in July 2018. The regulatory framework is overseen by INFARMED, requiring Market Placement Authorization (ACM) for all non-pharmaceutical cannabis products, with strict GACP and GMP compliance. While domestic patient access remains limited due to stringent product approvals and the absence of public reimbursement, Portugal has emerged as a leading European producer and exporter of medical cannabis, supplying high-value markets such as Germany, Poland, and Australia. In 2021, Tilray received the first Authorization for Placement on the Market for dried flower, with additional product approvals in 2024, reinforcing our pioneering role in Portugal’s medical cannabis sector. Our strategic investments in cultivation and manufacturing, combined with robust compliance and documentation standards, enable Tilray to deliver EU-GMP quality products to both domestic and international markets. As Portugal explores adult-use reform, Tilray’s established reputation and operational excellence position us to capitalize on future regulatory developments and market expansion.

Wellness market trends:

Tilray Wellness’s branded business continues to grow across brick-and-mortar retail as well as ecommerce, further establishing its leading market share position in better-for-you categories. The Company continues to focus on value-added innovation within natural and organic food and beverages across branded and ingredient sales. We continue to participate in multiple growing categories including super-seeds, better for you breakfast, better for you snacking, and natural energy drinks. Within our Ingredients sales business, we have expanded our range of offerings in hemp protein and hemp oil, helping us further develop our business in North America and Asia.

Acquisitions, Strategic Transactions and Synergies

We strive to continue to expand our business, on a consolidated basis, through a combination of organic growth and acquisition. While we continue to execute against our strategic initiatives that we believe will result in long-term, sustainable growth and value to our stockholders, we continue to evaluate potential acquisitions and other strategic transactions of businesses that we believe complement our existing portfolio, infrastructure and capabilities or provide us with the opportunity to enter attractive new geographic markets and product categories as well as expand our existing capabilities. In addition, we have exited certain businesses and continue to evaluate certain businesses within our portfolio that are dilutive to profitability and cash flow. As a result, we incur transaction costs in connection with identifying and completing acquisitions and strategic transactions, as well as ongoing integration and restructuring costs as we combine acquired companies and continue to achieve synergies, which is offset by income generated in connection with the execution of these transactions. For the six months ended November 30, 2025, we incurred $1.0 million of transaction expenses, as discussed further below.

Beverage segment Project 420:

In November 2020, we entered the beverage category with the acquisition of SweetWater Brewing Company, one of the largest independent craft brewers in the U.S. by volume, with the vision of creating a more diversified global lifestyle consumer products company.

This initial acquisition provided us with a foundation to pursue additional acquisitions in the beverage category and scale our business on a national basis. We acquired Alpine Beer Company, Green Flash and Breckenridge Distillery in December 2021, Montauk Brewing Company in November 2022, Craft Acquisition I in October 2023 and Craft Acquisition II in September 2024.

With Craft Acquisition I and Craft Acquisition II, we capitalized on opportunities to acquire additional beverage businesses that consisted of strong brands in decline due to lack of focus and in need of investment in order to promote growth, all at a significantly reduced purchase price. To support the growth of these acquired brands and establish a clear path to profitability, we implemented Project 420, which is a comprehensive plan covering (i) SKU optimization/rationalization; (ii) Geographic rationalization; (iii) Distributor rationalization; and (iv) synergy optimization plan through which we expect to invest in the acquired brands for growth and improve profitability:

SKU optimization/rationalization – In response to the declining growth in the craft beer industry and consolidation of distributors, we are working with our distributors in various markets to streamline our portfolio by eliminating duplicative, lower margin and slower growth products, which has the immediate effect of reducing revenue. However, by eliminating these slower moving and lower margin SKUs, we are able to focus our attention and resources on our higher margin and faster growing SKUs, as well as the introduction of new innovation, which we expect will accelerate our revenue growth in future quarters.

Geographic rationalization – On a consolidated basis, we generate sales in all states however, our brands are significantly stronger in their home markets. For example, SweetWater is located in Georgia and, as a result, its revenues are stronger in Georgia, Alabama, North Carolina and Florida, while 10 Barrel, which is located in Oregon has stronger revenue in Oregon, Washington, Idaho and Wyoming. In away markets, like Oregon for SweetWater, and Georgia for 10 Barrel, the brands are not as strong in these “away” states. Our geographic rationalization works to concentrate our efforts in individual states with our strongest brands in those states. As we reduce the distribution of away markets brands in those states, we are working to increase the distribution and shelf space of home market brands. This initiative is consistent with our Regional Jewel strategy developed in conjunction with the Boston Consulting Group.

Distributor rationalization – As a result of our various acquisitions in the last five years, we have over 750 distributors and 975 distributor shipping locations. As a result, we are shipping to multiple distributors in the same geography as well as splitting the allocation of local brands between multiple distributors. The goal of the distributor rationalization is to reduce our distributor footprint down to between 450 and 500 distributors, concentrating those distributors’ effort on our brands and SKUs, while minimizing logistical complexities.

Synergy optimization plan – We previously announced a $33 million synergy plan focused on optimizing our production footprint and eliminating redundancies in manufacturing and warehouse assets. By integrating the newly acquired facilities into our existing footprint, we are optimizing capacities, utilization and better absorbing fixed overheads. This in turn is improving our gross margins. As of November 30, 2025, we have achieved $27.2 million of those savings to date. We expect to complete the synergy optimization plan in the fourth quarter of fiscal 2026.

Brand and business investment – We have been and are continuing to increase our investment in the marketing, promotion and infrastructure of our recently acquired brands in order to re-establish their dominance in their core markets. Our intention is to fund this investment through the cost savings and synergies achieved through Project 420.

It is important to note, however, that there is a lag between the discontinuation of the SKUs and the associated reduction in revenue, which has an immediate effect, and the acceleration of the growth of our existing SKUs and the introduction of new innovation and the associated increase in revenue, which takes time due to retailer resets. We also expect these efforts will lead to improved sales and margins, with benefits realized through lower selling costs, as well as reduced requirements for working capital through inventory reductions and an improvement in our cash conversion cycle.

Political and Economic Environment

Our results of operations may continue to be affected by economic, political, legislative, regulatory, legal actions, global volatility and general market disruption resulting from geopolitical tensions, such as Russia's continued incursion into Ukraine, the ongoing events in the Middle East and political uncertainty in certain countries in Europe. Economic conditions, such as recessionary trends, inflation, supply chain disruptions, interest and monetary exchange rates, government fiscal policies, and the recent economic uncertainties resulting from certain changes in U.S. global economic policy, including changes on global trade policies can have a significant effect on operations. More specifically, there are no expected impacts on revenue from the recently enacted U.S. tariffs and foreign enacted retaliatory tariffs (“Tariffs”). From a cost perspective, we believe the recently enacted Tariffs could impact input materials such as aluminum, hops, barley, malt and vape componentry, which are partially imported but we intend to mitigate these impacts to the extent possible.

In addition, U.S. federal regulatory developments regarding cannabis rescheduling represent a significant shift in the political and legislative environment. This regulatory evolution is expected to create a more credible framework for medical cannabis research, clinical development, and compliance, aligning with Tilray’s established global expertise in regulated medical cannabis markets; although, there are no assurances whether such rescheduling will be implemented as and when anticipated. The Company intends to leverage its proven compliance infrastructure, scientific knowledge, and operational scale to expand responsibly in the U.S. market, introducing medical-grade cannabis products in targeted therapeutic formats. While these developments present significant long-term growth opportunities, they also introduce new regulatory complexities and potential risks that we will continue to monitor closely.

Reverse Stock Split

Effective December 2, 2025, we implemented a Reverse Stock Split of our outstanding shares of Common Stock, at a ratio of one-for-ten.

Results of Operations

Our consolidated results, in thousands except for per share data, are as follows:

	For the three months ended												For the six months ended
	November 30,			November 30,			Change			% Change			November 30,			November 30,			Change			% Change
(in thousands of U.S. dollars)	2025			2024			2025 vs. 2024						2025			2024			2025 vs. 2024
Net revenue	$	217,507		$	210,950		$	6,557			3	%	$	427,008		$	410,994		$	16,014			4	%
Cost of goods sold		160,010			149,730			10,280			7	%		312,042			290,068			21,974			8	%
Gross profit		57,497			61,220			(3,723	)		(6	)%		114,966			120,926			(5,960	)		(5	)%
Operating expenses:
General and administrative		51,175			45,997			5,178			11	%		92,228			90,110			2,118			2	%
Selling		11,781			16,162			(4,381	)		(27	)%		24,704			27,852			(3,148	)		(11	)%
Amortization		4,358			22,927			(18,569	)		(81	)%		8,287			44,731			(36,444	)		(81	)%
Marketing and promotion		9,981			9,720			261			3	%		20,136			21,286			(1,150	)		(5	)%
Research and development		78			60			18			30	%		119			165			(46	)		(28	)%
Change in fair value of contingent consideration		—			—			—			NM			(15,000	)		—			(15,000	)		NM
Litigation costs, net of recoveries		869			901			(32	)		(4	)%		1,876			2,496			(620	)		(25	)%
Restructuring costs		965			6,869			(5,904	)		(86	)%		1,834			11,116			(9,282	)		(84	)%
Transaction costs (income), net		569			802			(233	)		(29	)%		969			1,958			(989	)		(51	)%
Total operating expenses		79,776			103,438			(23,662	)		(23	)%		135,153			199,714			(64,561	)		(32	)%
Operating loss		(22,279	)		(42,218	)		19,939			(47	)%		(20,187	)		(78,788	)		58,601			(74	)%
Interest expense, net		(5,374	)		(7,766	)

Tilray Brands, Inc. 10-Q