“Item 1A. Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended May 31, 2025 includes a discussion of our known material risk factors, other than risks that could apply to any issuer or offering. A summary of our risk factors is included below. Except for the below risk factors, there have been no material changes from the risk factors described in our Form 10-K.
| ● | We may not achieve the expected revenue or other benefits from the craft beer operations we acquired in the past several years. |
| ● | We may experience difficulties integrating operations and realizing the expected benefits of recent acquisitions, including the Craft brands and BrewDog acquisitions. |
| ● | Our cannabis business is dependent upon regulatory approvals and licenses, ongoing compliance and reporting obligations, and timely renewals. |
| ● | There are regulatory risks associated with the rescheduling of cannabis from Schedule I to Schedule III under the Controlled Substances Act in the U.S. and uncertainties in the implementation of our planned medical cannabis platform. |
| ● | There are regulatory risks associated with evolving government regulations, including in November 2025, new U.S. federal legislation which was enacted and banned the production or sale of hemp-derived cannabis, including Delta-9. This restriction is scheduled to go into effect on November 12, 2026. |
| ● | We are subject to potential modifications to existing regulatory frameworks outside of North America, as well as uncertainties and potential delays in receiving required export/import permits in Europe and Australia. Any unfavorable changes to or lack of commercial legalization, or extended delays in receipt of required permits, could negatively impact our businesses and the potential planned expansion of our business. |
| ● | We face intense competition, including from the illicit cannabis market, and anticipate competition will increase, which could hurt our business. |
| ● | Our production and processing facilities are integral to our business and adverse changes or developments affecting our facilities may have an adverse impact on our business. |
| ● | Regulations constrain our ability to market and distribute our products in Canada. |
| ● | United States regulations relating to hemp-derived CBD products, Delta-9 products, and medical cannabis products are new and rapidly evolving, and changes may not develop in the timeframe or manner most favorable to our business objectives. |
| ● | Changes in consumer preferences or public attitudes about alcohol could decrease demand for our beverage products. |
| ● | SweetWater, Breckenridge, Montauk, BrewDog and our recently-acquired craft beer brands each face substantial competition in the beer industry or the broader market for beverage products, which could impact our business and financial results. |
| ● | We are subject to litigation, arbitration and demands, which could result in significant liability and costs, and impact our resources and reputation. |
| ● | Our business may be materially adversely affected by the imposition of duties and tariffs and other trade barriers and retaliatory countermeasures implemented by the U.S. and other governments. |
| ● | Additional impairments of our goodwill and impairments of our long-lived assets could have a material adverse impact on our financial results. |
| ● | We have a limited operating history and a history of net losses, and we may not achieve or maintain profitability in the future |
| ● | Our strategic alliances and other third-party business relationships may not achieve the intended beneficial impact and expose us to risks. |
| ● | We may not be able to successfully identify and execute future acquisitions, dispositions or other equity transactions or to successfully manage the impacts of such transactions on our operations. |
| ● | We are subject to risks inherent in an agricultural business, including the risk of crop failure. |
| ● | We depend on recurring customers for a substantial portion of our revenue. If we fail to retain or expand our customer relationships or these customers reduce their purchases, our revenue could decline significantly. |
| ● | Our products may be subject to recalls for a variety of reasons, which could require us to expend significant management and capital resources. |
| ● | Significant interruptions in our access to certain supply chains for key inputs such as raw materials, supplies, electricity, water and other utilities may impair our operations. |
| ● | Management may not be able to successfully establish and maintain effective internal controls over financial reporting. |
| ● | The price of our common stock in public markets has experienced and may continue to experience severe volatility and fluctuations. |
| ● | The volatility of our stock and the stockholder base may hinder or prevent us from engaging in beneficial corporate initiatives. |
| ● | We may not have the ability to raise the funds necessary to settle conversions of the convertible securities in cash or to repurchase the convertible securities upon a fundamental change. |
| ● | Our cryptocurrency strategy faces high risk and uncertainty in light of market volatility and an evolving regulatory landscape. |
| ● | We may be exposed to financial losses and operational risks due to our decision to self-insure certain real property assets. |
| ● | We are subject to other risks generally applicable to our industry and the conduct of our business. |
Geopolitical instability involving the conflict in Iran could increase fuel and energy costs in Europe and adversely affect our operations and results.
Ongoing geopolitical instability in the Middle East, including the conflict involving Iran, has contributed to volatility in global oil and natural gas markets. Disruptions or perceived risks to energy supply routes, including shipping through key transit points, have resulted in increased fuel and energy prices in Europe and could continue to do so for an extended period. Europe remains exposed to global energy price fluctuations, and increases in fuel, transportation, and utility costs could adversely affect our operating expenses, supply chain costs, margins, and the cost of energy‑intensive activities, including our brewing and cannabis cultivation operations, particularly within our European businesses. The duration and severity of the conflict remain uncertain, and any escalation or prolongation could exacerbate these risks.
*Our ability to complete the BrewDog U.S. acquisition is subject to regulatory approvals, and we may face risks associated with integrating all of the acquired BrewDog businesses. *
The completion of our proposed acquisition of BrewDog' U.S. assets is dependent on receipt of certain regulatory approvals. There can be no assurance that such approvals will be obtained on a timely basis or at all, or that they will not include conditions that could delay or otherwise adversely affect the anticipated benefits of the transaction. In addition, we will be subject to risks commonly associated with integrating acquired businesses, including difficulties integrating operations, systems and controls; challenges in retaining customers; and potential disruptions to ongoing business activities. The integration process of BrewDog's operations may require significant management attention and financial resources and may not achieve the anticipated synergies or strategic benefits within the expected timeframes. Any of these factors could adversely affect our business, financial condition, and results of operations.
