Tilray Brands, Inc.

Notes to Consolidated Financial Statements

Note1. 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* August 31, 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 donot 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 Form10-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 arenot necessarily indicative of results for a full fiscal year.

These 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.

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Earnings (loss) per share

Basic earnings (loss) per share is computed by dividing reported net income (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 income (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 TLRY27 Notes, see Note12 (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 arenot 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 thethree months ended* August 31, 2025* and* August 31,* 2024, the dilutive potential common share equivalents outstanding consisted of the following:52,107,218 and 23,411,577 common shares from RSUs,3,032,011 and 3,359,144 common shares from share options,6,209,000 and 6,209,000 common shares for warrants and 37,664,780 and 64,971,746 common shares for convertible debentures, respectively.

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 (Subtopic805*-60) Recognition and Initial Measurement (“ASU2023-05”), which is intended to address the accounting for contributions made to a joint venture. ASU2023-05 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 ASU2023-06, 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 hasnot* 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 willnot become effective for any entity. The Company is currently evaluating the effect of adopting this ASU.

In* December 2023,the FASB issued ASU2023*-09, Income Taxes (Topic740) 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. ASU2023-09 is effective for the Company beginning with its fiscal year ended* May 31, 2026and will be disclosed in the Financial Statements reported in our Annual Report on Form10*-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 ASU2024*-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic220-40): Disaggregation of Income Statement Expenses, which requires disaggregated disclosure of income statement expenses for public business entities. ASU2024-03 is effective for the Company beginning* June 1, 2026.*The Company is currently evaluating the effect of adopting this ASU.

New accounting pronouncements recently adopted

In* November 2024,the FASB issued ASU2024*-04, Debt with Conversion and Other Options (Subtopic470-20): 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 ASU2024-04 beginning* June 1, 2025,however, it didnot* have any impact on our unaudited interim consolidated financial statements.

Digital Assets

In* December 2023,FASB issued ASU2023*-08, Intangibles—Goodwill and Other—Crypto Assets (Subtopic350-60): Accounting for and Disclosure of Crypto Assets. ASU2023-08 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. ASU2023-08 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 ASC820, Fair Value Measurement, based on quoted prices in its principal market for Bitcoin (Level1). 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.

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Note2. Inventory

Inventory consisted of the following:

Note3. Capital assets

Capital assets consisted of the following:

Assets held for sale consisted of the following:

As of* August 31, 2025*, the Company classified the Fort Collins, CO partially vacant warehouse facility from its Cannabis reporting segment as held for sale. The Company expects the sale of the asset to be completed during the fiscal year ended* May 31, 2026.*

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Note4. Leases

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

The following table presents the future undiscounted payments associated with lease liabilities as of* August 31, 2025*:

Note5. Intangible Assets

Intangible assets consisted of the following items:

Licenses, permits & applications are predominantly comprised of multi-period sponsorship rights.

Expected future amortization expense for intangible assets as of* August 31, 2025* is as follows:

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Note6. Goodwill

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

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Note7. Business a****cquisitions

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:

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 for thethree* months ended* August 31, 2025* and approximately $13,700 for thethree months ended* August 31,* 2024, respectively, and its consolidated net income and comprehensive net income would have increased by approximately$nil for thethree months ended* August 31, 2025* and approximately $4,000 for thethree months ended* August 31,* 2024, respectively. This unaudited pro forma financial information doesnot reflect the realization of any expected ongoing synergies relating to the integration of the Craft Acquisition II.

Note8. Long term investments

Long term investments consisted of the following:

As of* August 31, 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 Note24 (Financial risk management and financial instruments).

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Note9. 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* August 31, 2025*, the Company hasnot drawn on the line of credit. The operating line of credit is secured by a security interest on certain real property located at265 Talbot St. West, Leamington, Ontario.

CC Pharma GmbH, a subsidiary of the Company, hastwo 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* August 31, 2025*, a total of€7,459 ($8,185) 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 itsfifth* 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 thefour* quarters, beginning* May 31, 2025and (ii) minimum liquidity. ABC Group has a revolving credit facility of $25,000, which bears interest at SOFR plus an applicable margin. As of August 31, 2025*, the Company has drawn$nil on the revolving line of credit.

Note10. Accounts payable and accrued liabilities

Accounts payable and accrued liabilities are comprised of:

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Note11. Long-term debt

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

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Note12. Convertible debentures payable

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

TLRY27* Notes*

The TLRY27 convertible debentures were issued on* May 30, 2023and on June 9, 2023by way of overallotment, in the principal amount of $172,500 (the “TLRY27* Notes”). The TLRY27 Notes bear interest at a rate of 5.20% per annum, payable semi-annually in arrears on* June 15and December 15of each year, and mature on June 15, 2027,unless earlier converted. The TLRY27* 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 isnot 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 TLRY27 Notes into shares of Tilray’s Common Stock at their option, at any time, until the close of business on thesecond scheduled trading day immediately before* June 15, 2027.The initial conversion rate is 376.6478 shares per $1,000 principal amount of TLRY27* Notes, which represents a conversion price of approximately $2.66 per share. The conversion rate and conversion price will be subject to adjustment upon the occurrence of certain events.

The TLRY27 Notes are now redeemable, in whole andnot in part, at Tilray’s option at any time on or after* June 20, 2025at 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 mayrequire Tilray to repurchase their TLRY27* 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 TLRY27 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 38,500,000 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* maybe used by purchasers of the TLRY27* Notes to sell up to 38,500,000 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 TLRY27 Notes. The Company didnot receive any proceeds from the sale of the Borrowed Shares.

During thethree months ended* August 31, 2025*, the Company exchanged an aggregate $5,000 of its TLRY27 Notes for cancellation, by issuing 12,591,816 shares of Common Stock and paying $6 in cash to settle accrued interest. Upon exchanging the TLRY27 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 Note23 (Non-operating income (expense)). Following consummation of the exchange, the number of outstanding Borrowed Shares of Common Stock was reduced by 1,209,696 shares which were then returned as Treasury Stock. As of* August 31, 2025* and* May 31, 2025*, a total of 22,318,841 and 23,434,783 shares remained outstanding under the share lending arrangement, respectively.

During thethree months ended* August 31, 2025*, the Company recognized interest expense of $1,367 and accretion of amortized discount interest of $1,976. During thethree months ended* August 31,* 2024, the Company recognized interest expense of $2,243 and accretion of amortized discount interest of $3,067.

As of* August 31, 2025*, there was $100,000 principal outstanding compared to $105,000 principal outstanding as of* May 31, 2025* under the TLRY27 Notes.

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Note13. Warrant liability

As of* August 31, 2025* and* May 31, 2025*, there were 6,209,000 warrants outstanding, with an original exercise price of $5.95 per warrant, expiring* September 17, 2025.*Each warrant is exercisable forone share of Common Stock of the Company.

The warrants contain anti-dilution price protection features, which adjust the exercise price of the warrants if the Company subsequently issues Common Stock at a price lower than the exercise price of the warrants. In the event additional warrants or convertible debt are issued with a lower and/or variable exercise price, the exercise price of the warrants will be adjusted accordingly. During thethree months ended* August 31, 2025*, the Company issued shares of its Common Stock which triggered the anti-dilution price protection feature and, accordingly, lowered the exercise price of each warrant to $0.38. These warrants are classified as liabilities as they are to be settled in registered shares, and the registration statement is required to be active, unless such shares* maybe subject to an applicable exemption from registration requirements. The holders, at their sole discretion, mayelect to affect a cashless exercise, and be issued exempt securities in accordance with Section3*(a)(9) of the Securities Act of1933, as amended. In the event the Company doesnot maintain an effective registration statement, the Company* maybe required to pay a daily cash penalty equal to 1% of the number of shares of Common Stock due to be issued multiplied by any trading price of the Common Stock between the exercise date and the share delivery date, as selected by the holder. Alternatively, the Company maydeliver registered Common Stock purchased by the Company in the open market. The Company mayalso be required to pay cash if it doesnot* have sufficient authorized shares to deliver to the holders upon exercise.

Using the Black Scholes pricing model (Level3), the Company has estimated the fair value of the warrants outstanding as of* August 31, 2025* to be $1.00 per warrant. In applying the Black Scholes pricing model (Level3), the Company utilized the following assumptions: a risk-free interest rate of 2.64%, an expected volatility of 50%, an expected term of 0.05 years, strike price of $0.38 and fair value of Common Stock of $1.38. See Note26 (Subsequent events) as all outstanding warrants were exercised after the period.

Expected volatility is based on both historical and implied volatility of the Company’s common stock.

Note14. 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 (the “Common Stock”), and 10,000,000 shares of which are Preferred Stock (the “Preferred Stock”). As of* August 31, 2025*, the Company had issued and outstanding 1,118,291,159 shares of Common Stock,3,213,914 shares of Treasury Stock (the “Treasury Stock”) andno 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 thethree months ended* August 31, 2025*, the Company issued the following shares of Common Stock:

During thethree months ended* August 31, 2025*, the Company granted 44,802,378 time-based Restricted Stock Units (“RSUs”), andnil performance-based RSUs.

During the fiscal year ended* May 31, 2024,the Company issued 7,566,146 performance-based RSUs. These RSUs werenot* considered granted for accounting purposes at the time of issuance, as the performance conditions hadnot yet been established or approved andno amounts have been recorded within the Consolidated Statement of Income (Loss).

The Company's total stock-based compensation expense from RSUs incurred for thethree months ended* August 31, 2025* was $5,052, compared to $6,917 for thethree months ended* August 31,* 2024, respectively.

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Note15. Accumulated other comprehensive income (loss)

Accumulated other comprehensive income (loss) is comprised of foreign currency translation gain (loss) as follows:

Note16. 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: 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* August 31, 2025*:

The following table provides a summary of certain balance sheet information before intercompany eliminations relating to the above-referenced majority-owned subsidiaries of the Company in which there was a non-controlling interest as of* May 31, 2025*:

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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 thethree months ended* August 31, 2025*:

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 thethree months ended* August 31,* 2024:

Note17. 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 recovery of $2,285 for thethree months ended* August 31, 2025*, and income tax expense of $886 for thethree months ended* August 31,* 2024. The income tax benefit 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 withno tax benefit resulting from valuation allowances in certain jurisdictions.

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Note18. Commitments and contingencies

Purchase and other commitments

The Company has financial commitments on long-term debt, refer to Note11 (Long-term debt), convertible notes, refer to Note12 (Convertible debentures payable), material purchase commitments inclusive of multi-period sponsorship rights and construction commitments as follows:

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* maybe increased or decreased to reflect any relevant developments on a quarterly basis. Where a loss isnot* probable or the amount of loss isnot estimable, we donot 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 arenot 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 beenno material changes in the legal proceedings since our Annual Report on Form10-K for the fiscal year ended* May 31, 2025*.

Summary of litigation accruals

As described in Note10 (Accounts payable and accrued liabilities), the total estimated litigation expense accrual included in accrued liabilities as of* August 31, 2025* and* May 31, 2025*was $12,021 and $12,431, respectively. This estimated accrual is intended to cover various ongoing litigation matters with probable losses that can be reasonably estimated.

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Note19. Net revenue

The Company reports Net revenue infour reporting segments: beverage, cannabis, distribution, and wellness. Net revenue for thethree months ended* August 31, 2025* and* August 31, 2024*were as follows:

Note20. Cost of goods sold

The Company reports Cost of goods sold infour reporting segments: beverage, cannabis, distribution, and wellness. Cost of goods sold for thethree months ended* August 31, 2025* and* August 31, 2024*were as follows:

Note21. General and administrative expenses

General and administrative expenses for thethree months ended* August 31, 2025* and* August 31, 2024*were as follows:

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Note22. 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 $869 for thethree months ended* August 31, 2025*, compared to $4,247 for the prior year period. 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 thethree months ended* August 31, 2025*, the Company recognized $692 of expenses related to employee termination severance and benefits associated with the reorganization of the Canadian cannabis commercial function. Additionally, the Company recognized $177 of restructuring charges related to our decision to exit the New Zealand medical cannabis market announced during the fiscal year ended* May 31, 2025.*

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 Project420* initiatives within the Beverage segment, of which $1,249 was recognized in thethree months ended* August 31, 2025*thereby, reducing the accrual to $7,251.

Note23. Non-operating income (expense), net

Non-operating income (expense), net for thethree months ended* August 31, 2025* and* August 31, 2024*were as follows:

The other non-operating losses (gains), net for thethree months ended* August 31, 2025*, were losses of $543 which was mainly comprised of the $495 gain resulting from the exchange transaction of the TLRY27 Note, as described in Note12 (Convertible debentures payable).

Note24. Financial risk management and financial instruments

Financial instruments

The Company's classification of its financial instruments is described in Note3 (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* August 31, 2025* and* May 31, 2025*, the Company had long-term debt of $2,437 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.

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The following tables present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of* August 31, 2025* and* May 31, 2025* and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value:

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 thethree months ended* August 31, 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 Level1. The following table presents the Company’s digital asset holdings as of* August 31, 2025*:

Certain equity investments recorded at fair value have quoted prices in active markets for identical assets and are classified as Level1. The Company classified securities with observable inputs as Level2 and without a quoted market price as Level3.

The warrants associated with the warrant liability are classified as Level3 derivatives. Consequently, the estimated fair value of the warrant liability is determined using the Black-Scholes pricing model. Until the warrants are exercised, expire, or other facts and circumstances lead the warrant liability to be reclassified to stockholders’ equity, the warrant liability (which relates to warrants to purchase shares of Common Stock) is marked-to-market each reporting period with the change in fair value recorded as the change in fair value of warrant liability within the consolidated statements of loss and comprehensive loss. Any significant adjustments to the unobservable inputs disclosed in the table below would have a direct impact on the fair value of the warrant liability.

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 2025.If achieved, such contingent consideration is payable in cash. During thethree months ended August 31, 2025*, the contingent consideration amount was estimated by applying a probability of achievement of0% on the $15,000 sales earn-out component and 0% on the remaining criteria, which isnot expected to be achieved and as such resulted in a corresponding change in fair value of $15,000 for the contingent consideration liability recognized. During thethree months ended* August 31,* 2024, the contingent consideration amount was estimated by applying a probability of achievement of 100% on the $15,000 sales earn-out component and0% on the remaining criterion, which isnot expected to be achieved. The unobservable inputs into the future expected cash outflows result in a fair value measurement classified as Level3.

The balances of assets and liabilities categorized within Level3 of the fair value hierarchy measured at fair value on a recurring basis are reconciled, as follows for the period ended* August 31, 2025*:

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The balances of assets and liabilities categorized within Level3 of the fair value hierarchy measured at fair value on a recurring basis are reconciled, as follows for the period ended* August 31,* 2024:

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:

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 beenno changes to the Company’s capital management approach in the period. The Company considers its cash and cash equivalents and marketable securities as capital.

Note25. 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 infour segments.1) cannabis operations, which encompasses the production, distribution, sale, co-manufacturing and advisory services of both medical and adult-use cannabis, as well as, produce operations which are managed by the cannabis team,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, and4) 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 havenot been aggregated andno asset information is provided for the segments because the Company’s CODM doesnot 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:

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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:

Channels of Cannabis revenue were as follows:

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Geographic net revenue:

Geographic capital assets:

Major customers are defined as customers that are materially significant to the Company’s annual revenues. For thethree months ended* August 31, 2025and2024*, there wereno major customers representing a material contribution to our quarterly revenues.

Note26. Subsequent Events

Between* September 5and15,* 2025, certain holders elected to exercise an aggregate of 6,209,000 of the Company’s issued and outstanding warrants in accordance with their terms. Pursuant to the exercise of such warrants, Tilray received$2,108 of cash consideration and delivered 6,209,000 shares of common stock to such holders.

On* October 9, 2025,*Tilray entered into an assignment and assumption agreement with Double Diamond Holdings Ltd. (“DDH”), an Ontario corporation, pursuant to which, among other things, Tilray acquired from DDH a promissory note in the amount of $14,821 (the “Note”) payable by Aphria Diamond Inc. (“Aphria Diamond”). DDH is a joint venturer with Aphria Inc. (Tilray’s wholly-owned subsidiary) in Aphria Diamond. As consideration for the Note, Tilray issued 8,617,068 shares of its Common Stock to DDH.

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