INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Consolidated Statement of Financial Position as of May 31, 2026 and 2025 68 Consolidated Statements of Loss and Comprehensive Loss for the Years ended May 31, 2026, 2025, and 2024 69 Consolidated Statements of Changes in Equity for the Years ended May 31, 2026, 2025, and 2024 70 Consolidated Statements of Cash Flows for the Years ended May 31, 2026, 2025, and 2024 71 Notes to the Consolidated Financial Statements 72 Report of Independent Registered Public Accounting Firm PCAOB ID 271 112 All financial statement schedules have been omitted, since the required information is not applicable or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the consolidated financial statements and accompanying notes. 67 Tilray Brands, Inc. Consolidated Statements of Financial Position (In thousands of U.S. dollars) May 31, May 31, 2026 2025 Assets Current assets Cash and cash equivalents $ 225,977 $ 221,666 Restricted cash 3,365 — Marketable securities 5,289 34,697 Accounts receivable, net 189,170 121,489 Inventory 301,192 270,882 Prepaids and other current assets 64,692 34,092 Assets held for sale 2,449 5,800 Total current assets 792,134 688,626 Capital assets 680,225 568,433 Operating lease, right-of-use assets 42,318 22,279 Digital assets 674 — Intangible assets 42,779 21,423 Goodwill 752,350 752,350 Long-term investments 6,551 10,132 Other assets 10,981 11,084 Total assets $ 2,328,012 $ 2,074,327 Liabilities Current liabilities Bank indebtedness $ 8,775 $ 7,181 Accounts payable and accrued liabilities 318,088 235,322 Contingent consideration — 15,000 Warrant liability — 1,092 Current portion of lease liabilities 13,357 6,941 Current portion of long-term debt 18,160 14,767 Total current liabilities 358,380 280,303 Long - term liabilities Lease liabilities 158,155 64,925 Long-term debt 120,425 148,493 Convertible debentures payable 79,529 86,428 Deferred tax liabilities, net 12,256 3,748 Other liabilities 4,400 855 Total liabilities 733,145 584,752 Commitments and contingencies (refer to Note 27) Stockholders' equity Common stock ($0.0001 par value; 1,416,000,000 common shares authorized;131,683,075 and 106,067,875 common shares issued and outstanding, respectively)(1) 132 106 Treasury Stock (589,217 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 6,627,056 6,401,657 Accumulated other comprehensive loss (44,233 ) (43,063 ) Accumulated deficit (4,968,623 ) (4,847,226 ) Total Tilray Brands, Inc. stockholders' equity 1,614,332 1,511,474 Non-controlling interests (19,465 ) (21,899 ) Total stockholders' equity 1,594,867 1,489,575 Total liabilities and stockholders' equity $ 2,328,012 $ 2,074,327 (1)Current and prior year share amounts have been retrospectively adjusted to reflect the Reverse Stock Split, which became effective on December 2, 2025. See Note 2 (Basis of preparation). The accompanying notes are an integral part of these consolidated financial statements. 68 Tilray Brands, Inc. Consolidated Statements of Loss and Comprehensive Loss (In thousands of U.S. dollars, except share and per share amounts) For the years ended May 31, 2026 2025 2024 Net revenue $ 915,454 $ 821,309 $ 788,942 Cost of goods sold 655,013 580,739 565,591 Gross profit 260,441 240,570 223,351 Operating expenses: General and administrative 203,629 167,324 167,358 Selling 49,328 56,039 37,233 Amortization 19,585 88,616 84,752 Marketing and promotion 42,290 37,048 41,933 Research and development 361 284 635 Change in fair value of contingent consideration (15,000 ) — (15,790 ) Impairment of intangible assets and goodwill — 2,096,139 — Other than temporary change in fair value of convertible notes receivable — 21,661 42,681 Litigation costs, net of recoveries 3,902 17,347 8,251 Restructuring costs 13,113 34,283 15,581 Transaction costs (income), net 6,260 4,534 15,462 Total operating expenses 323,468 2,523,275 398,096 Operating loss (63,027 ) (2,282,705 ) (174,745 ) Interest expense, net (23,663 ) (29,952 ) (36,433 ) Non-operating income (expense), net (1,370 ) 10,284 (37,842 ) Loss before income taxes (88,060 ) (2,302,373 ) (249,020 ) Income tax expense (recovery), net 17,098 (121,017 ) (26,616 ) Net loss $ (105,158 ) $ (2,181,356 ) $ (222,404 ) Total net income (loss) attributable to: Stockholders of Tilray Brands, Inc. (121,397 ) (2,186,738 ) (244,981 ) Non-controlling interests 16,239 5,382 22,577 Other comprehensive gain (loss), net of tax Foreign currency translation gain (loss) 207 430 3,121 Comprehensive loss $ (104,951 ) $ (2,180,926 ) $ (219,283 ) Total comprehensive income (loss) attributable to: Stockholders of Tilray Brands, Inc. (122,567 ) (2,186,302 ) (241,870 ) Non-controlling interests 17,616 5,376 22,587 Weighted average number of common shares - basic(1) 111,832,375 89,032,602 74,264,948 Weighted average number of common shares - diluted(1) 111,832,375 89,032,602 74,264,948 Net loss per share - basic(1) $ (1.09 ) $ (24.56 ) $ (3.30 ) Net loss per share - diluted(1) $ (1.09 ) $ (24.56 ) $ (3.30 ) 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 2 (Basis of preparation). The accompanying notes are an integral part of these consolidated financial statements. The accompanying notes are an integral part of these consolidated financial statemen 69 Tilray Brands, Inc. Consolidated Statements of Changes in Equity (In thousands of U.S. dollars, except share amounts) 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 year ended May 31, 2023 65,665,546 $ 66 — $ — $ 5,777,743 $ (46,610 ) $ (2,415,507 ) $ 14,251 $ 3,329,943 Share issuance - HEXO acquisition 3,970,596 4 — — 65,158 — — — 65,162 Share issuance - settlement of contractual change of control severance incurred from HEXO acquisition 86,543 — — — 1,500 — — — 1,500 Share issuance - Double Diamond Holdings dividend settlement 2,478,099 2 — — 47,702 — — (26,217 ) 21,487 Share issuance - HTI convertible note 1,818,116 2 — — 52,311 — — — 52,313 Shares effectively repurchased for employee withholding tax — — — — (4,860 ) — — — (4,860 ) Equity component related to issuance of convertible debt, net of issuance costs — — — — 3,953 — — — 3,953 Share issuance - Settlement of litigation claims from MediPharm Labs Inc 157,315 — — — 3,477 — — — 3,477 Share issuance - Repurchase of TLRY 23 convertible note 700,000 1 — — 20,457 — — — 20,458 Share issuance - Settlement of equity component of TLRY 23 convertible note — — — — (1,672 ) — — — (1,672 ) Share issuance - Repurchase of APHA 24 convertible note 7,348,415 8 — — 140,653 — — — 140,661 Share issuance - At-the-Market (“ATM”) program 532,784 — — — 8,619 — — — 8,619 Share issuance - options exercised 429 — — — — — — — — Share issuance - RSUs exercised 434,695 — — — — — — — — Stock-based compensation — — — — 31,769 — — — 31,769 Dividends declared to non-controlling interests — — — — — — — (10,349 ) (10,349 ) Comprehensive income (loss) for the period — — — — — 3,111 (244,981 ) 22,587 (219,283 ) Balance at year ended May 31, 2024 83,192,538 $ 83 — $ — $ 6,146,810 $ (43,499 ) $ (2,660,488 ) $ 272 $ 3,443,178 Share issuance - At-the-Market (“ATM”) program 13,593,874 14 580,737 — 161,174 — — — 161,188 Share issuance - Repurchase of TLRY 27 convertible note 7,175,505 7 (781,159 ) — 67,251 — — — 67,258 Share issuance - Settlement of TLRY 27 convertible note — — — — (19,028 ) — — — (19,028 ) Share issuance - Double Diamond Holdings dividend settlement 1,321,759 1 — — 23,823 — — (25,368 ) (1,544 ) Share issuance - RSUs exercised 782,651 1 — — (1 ) — — — — Share issuance - options exercised 1,548 — — — — — — — — Shares effectively repurchased for employee withholding tax — — — — (2,661 ) — — — (2,661 ) Stock-based compensation — — — — 24,289 — — — 24,289 Disposal of SH Acquisition non-controlling interests — — — — — — — (2,179 ) (2,179 ) Comprehensive income (loss) for the period — — — — — 436 (2,186,738 ) 5,376 (2,180,926 ) Balance at year ended 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 19,625,505 20 — — 157,954 — — — 157,974 Share issuance - Repurchase of TLRY 27 convertible note 3,138,878 3 (379,420 ) — 17,157 — — — 17,160 Share issuance - Settlement of TLRY 27 convertible note — — — — (4,394 ) — — — (4,394 ) Share issuance - Double Diamond Holdings dividend settlement 861,707 1 — — 14,821 — — (15,182 ) (360 ) Share issuance - Warrant exercised 620,900 1 — — 6,954 — — — 6,955 Fractional shares cancelled pursuant to Reverse Stock Split (20,652 ) — — — (159 ) — — — (159 ) Shares effectively repurchased for employee withholding tax — — — — (1,427 ) — — — (1,427 ) Share issuance - Lyphe acquisition 398,666 — — — 2,795 — — — 2,795 Share issuance - RSUs exercised, net of cancellations 990,196 1 (9,375 ) — (1 ) — — — — Stock-based compensation — — — — 31,699 — — — 31,699 Comprehensive income (loss) for the period — — — — — (1,170 ) (121,397 ) 17,616 (104,951 ) Balance at year ended May 31, 2026 131,683,075 $ 132 (589,217 ) $ — $ 6,627,056 $ (44,233 ) $ (4,968,623 ) $ (19,465 ) $ 1,594,867 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 2 (Basis of preparation). The accompanying notes are an integral part of these consolidated financial statements. The accompanying notes are an integral part of these consolidated financial statemen 70 Tilray Brands, Inc. Consolidated Statements of Cash Flows (In thousands of U.S. dollars, except share amounts) For the year ended May 31, 2026 2025 2024 Cash provided by (used in) operating activities: Net loss $ (105,158 ) $ (2,181,356 ) $ (222,404 ) Adjustments for: Income tax expense (recovery), net 17,098 (121,017 ) (38,872 ) Unrealized foreign exchange (gain) loss (9,543 ) (18,218 ) 3,756 Amortization 67,601 133,490 126,913 Loss (gain) on sale of capital assets (509 ) 928 (4,198 ) Accretion of convertible debt discount 7,914 10,863 14,459 Impairments — 2,096,139 — Other than temporary change in fair value of convertible notes receivable — 21,661 42,681 Unrealized loss on digital assets 326 — — Other non-cash items 1,518 (2,203 ) 13,626 Stock-based compensation 45,940 24,289 31,769 Loss on long-term investments 4,533 5,550 4,855 Loss (gain) on derivative instruments 3,495 (2,161 ) 21,172 Change in fair value of contingent consideration (15,000 ) — (15,790 ) Change in non-cash working capital: Accounts receivable (66,423 ) (17,801 ) (6,575 ) Prepaids and other current assets (26,898 ) (8,264 ) 13,069 Inventory (13,439 ) (13,561 ) (15,578 ) Accounts payable and accrued liabilities 19,401 (22,938 ) 212 Net cash used in operating activities (69,144 ) (94,599 ) (30,905 ) Cash provided by (used in) investing activities: Investment in capital and intangible assets (32,987 ) (32,917 ) (29,249 ) Proceeds from disposal of capital and intangible assets 3,507 6,824 8,509 Investment in digital assets (1,000 ) — — Sale (purchase) of marketable securities, net 29,408 (2,515 ) 209,715 Investment in long-term investments (3,595 ) — — Proceeds from long-term investments 2,566 — — Business acquisitions, net of cash acquired (53,699 ) (18,110 ) (60,626 ) Net cash provided by (used in) investing activities (55,800 ) (46,718 ) 128,349 Cash provided by (used in) financing activities: Share capital issued, net of cash issuance costs 157,974 161,188 8,619 Cash paid in lieu of fractional shares (159 ) — — Proceeds from warrants 2,367 — — Proceeds from long-term debt — 3,450 32,621 Repayment of long-term debt (25,353 ) (15,506 ) (22,402 ) Proceeds from convertible debt — — 21,553 Repayment of convertible debt — (330 ) (107,330 ) Repayment of lease liabilities (5,429 ) (2,900 ) (2,900 ) Net increase (decrease) in bank indebtedness 1,594 (10,852 ) (5,348 ) Dividend paid to NCI — (1,544 ) — Net cash provided by (used in) financing activities 130,994 133,506 (75,187 ) Effect of foreign exchange on cash and cash equivalents 1,626 1,137 (549 ) Net decrease in cash and cash equivalents 7,676 (6,674 ) 21,708 Cash and cash equivalents, beginning of year 221,666 228,340 206,632 Cash and cash equivalents, end of year $ 229,342 $ 221,666 $ 228,340 Within the consolidated statements of cash flows, cash and cash equivalents includes $3,365 of restricted cash as of May 31, 2026, and $nil as of May 31, 2025. The accompanying notes are an integral part of these consolidated financial statements. 71 Tilray Brands, Inc. Notes to the Consolidated Financial Statements (In thousands of U.S. dollars, except share and per share amounts) 1. Description of business 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. Tilray’s mission is to be the trusted partner for its patients and consumers by providing them with a cultivated experience and health and wellbeing through high-quality, differentiated brands and innovative products. Focused in cannabis research, cultivation and distribution, Tilray’s production platform supports over 20 brands in over 20 countries, including beverages, comprehensive cannabis offerings, and hemp-based foods. 2. Basis of preparation The policies applied in these consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). These consolidated financial statements have been prepared on the 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 and digital assets that are measured at fair value, as detailed in the Company’s accounting policies. 72 Foreign currency These consolidated financial statements are presented in U.S. dollars (“USD”), which is the Company’s reporting currency; however, the functional currency of the entities in these financial statements are their respective local currencies, including Canadian dollar, USD, Euro, Australian dollar, Argentinian peso, Colombian peso, and British Pound Sterling. Foreign currency transactions are remeasured to the respective functional currencies of the Company’s entities at the exchange rates in effect on the date of the transactions. Monetary assets and liabilities denominated in foreign currencies are remeasured to the functional currency at the foreign exchange rate applicable at the statement of financial position date. Non-monetary items carried at historical cost denominated in foreign currencies are remeasured to the functional currency at the date of the transactions. Non-monetary items carried at fair value denominated in foreign currencies are remeasured to the functional currency at the date when the fair value was determined. Realized and unrealized exchange gains and losses are recognized through profit and loss. On consolidation, the assets and liabilities of foreign operations reported in their functional currencies are translated into USD, the Group’s presentation currency, at period-end exchange rates. Income and expenses, and cash flows of foreign operations are translated into USD using average exchange rates. Exchange differences resulting from translating foreign operations are recognized in other comprehensive income (loss) and accumulated in equity. 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. In certain circumstances, such as with the BrewDog US acquisition, the Company may also consolidate an entity or a group of acquired assets and assumed liabilities where the Company has obtained effective control over the relevant operations, notwithstanding that certain regulatory approvals, licensing transfers, or other administrative matters remain pending as of the date control is obtained. In such cases, consolidation commences on the date the Company obtains the power to direct the relevant activities and is exposed to the variable returns of the operations, consistent with the guidance in ASC 810 and, where applicable, the acquisition date determined under ASC 805, see Note 9 (Business combinations). 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 consolidated financial statements of the Company and notes thereto have been retroactively adjusted to reflect the Reverse Stock Split for all prior periods presented. Equity method investments In accordance with ASC 323, Investments – Equity Method and Joint Ventures, investments in entities over which the Company does not have a controlling financial interest but has significant influence are accounted for using the equity method, with the Company’s share of earnings or losses reported in earnings or losses from equity method investments on the statements of net loss and comprehensive loss. Equity method investments are recognized initially at cost, which includes transaction costs. After initial recognition, the consolidated financial statements include the Company’s share of undistributed earnings or losses, and impairment, if any, until the date on which significant influence ceases. If the Company’s share of losses in an equity investment equals or exceeds its interest in the entity, including any net advances, the group does not recognize further losses, unless it has guaranteed obligations of the investee or is otherwise committed to provide further financial support for the investee. Unrealized gains on transactions between the Company and its equity-method investees are eliminated only to the extent of the Company’s interest in these entities. Unrealized losses are also eliminated, except to the extent that the underlying asset is impaired. 3. Significant accounting policies The significant accounting policies used by the Company are as follows: Cash and cash equivalents Cash and cash equivalents are comprised of cash and highly liquid investments that are both readily convertible into known amounts of cash with original maturities of three months or less. Cash and cash equivalents include amounts held in United States dollar, Canadian dollar, Euro, Australian dollar, Colombian peso, Argentine peso, British Pound Sterling, and corporate bonds, commercial paper, treasury bills and money market funds. Restricted cash We classify cash that is legally or contractually restricted as to withdrawal or usage as restricted cash. As of May 31, 2026, the Company reported $3,365 of restricted cash related to the funds held in trust in connection with the acquisition of BrewDog, which was completed on March 2, 2026. 73 Marketable Securities We classify term deposits and other investments that have maturities of greater than three months but less than one year as marketable securities. The fair value of marketable securities is based on quoted market prices for publicly traded securities. Marketable securities are carried at fair value with changes in fair value recorded in the consolidated statement of net loss and comprehensive loss within the line “Non-operating income (expense), net”. Accounts receivable The Company maintains an allowance for credit losses at an amount sufficient to absorb losses inherent in its accounts receivable portfolio as of the reporting dates based on the projection of expected credit losses. The Company applies the aging method to estimate the allowance for expected credit losses. The aging method is applied to accounts receivable at the business unit level to reflect shared risk characteristics, such as receivable type, customer type and geographical location. The aging method assigns accounts receivable to a level of delinquency and applies loss rates to each class based on historical loss experience. The Company also considers relevant qualitative and quantitative factors to assess whether historical loss experience should be adjusted to better reflect the risk characteristics of the current classes and the expected future loss. This assessment incorporates all available information relevant to considering the collectability of its current classes, including considering economic and business conditions, default trends, changes in its class composition, among other internal and external factors. The expected credit loss estimates are adjusted for current conditions and reasonable supportable forecasts. As part of the Company’s analysis of expected credit losses, it may analyze contracts on an individual basis in situations where such accounts receivables exhibit unique risk characteristics and are not expected to experience similar losses to the rest of their class. Inventory Inventory is valued at the lower of cost and net realizable value, and determined by using the weighted average cost. All direct and indirect costs related to inventory are capitalized as they are incurred, and they are subsequently recorded in cost of goods sold on the consolidated statements of loss and comprehensive loss at the time inventory is sold. Net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. At the end of each reporting period, the Company performs an assessment of inventory and records write-downs for excess and obsolete inventories based on the Company’s estimated forecast of product demand, production requirements, market conditions, regulatory environment, and spoilage. Actual inventory losses may differ from management’s estimates and such differences could be material to the Company’s consolidated statements of financial position, statements of loss and comprehensive loss and statements of cash flows. Capital assets Capital assets are recorded at cost and amortized on a straight-line basis over the estimated useful lives or lease term, whichever is shorter. The Company’s capital assets are reviewed when impairment indicators are present by analyzing the underlying cash flow projections. Maintenance and repairs are charged to expenses as incurred. The Company uses the following ranges of asset lives: Asset type Depreciation method Depreciation term (estimated useful life) Production facility Straight-line 20 – 30 years Equipment Straight-line 3 – 25 years Leasehold improvements Straight-line Lesser of estimated useful life or lease term Finance lease right-of-use assets Straight-line Lesser of the lease term and the useful life of the leased asset 74 Assets held for sale We classify capital assets that are available for immediate sale in their present condition, which the Company has approved the action or plan to sell, and the sale is probable within one year, as assets held for sale. As of May 31, 2026, the Company reported $2,449 in assets held for sale related to Atwater Brewing from its Beverage reporting unit, see Note 6 (Capital assets). Assets held for sale are measured at the lower of carrying amount and the fair value less costs to sell, and are no longer depreciated. Disposition of assets held for sale are recorded in the consolidated statement of net loss and comprehensive loss. When there are changes in circumstances that were previously considered unlikely to occur, and it is decided not to proceed with a sale, an asset that was previously classified as assets held for sale is reclassified as held and used. The asset is then remeasured at the lower of its carrying amount before being classified as held for sale less the amortization that would have occurred and the fair value on the date the decision not to proceed with a sale was made. Changes in the carrying amount are recorded in the consolidated statement of net loss and comprehensive loss. Intangible assets Intangible assets are recorded at cost and amortized on a straight-line basis over the estimated useful lives. The Company uses the following ranges of asset lives: Asset type Amortization term Customer relationships & distribution channel 14 – 16 years Licences, permits & applications 12 months – indefinite Intellectual property, trademarks & brands 15 months – 25 years Non-compete agreements Over term of non-compete Know how 5 years Multi-year sports and other sponsorships rights are capitalized in Licenses, permits & applications and are amortized over the life of the contract. Impairment of long-lived assets The Company reviews long-lived assets, including capital assets and definite life intangible assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. In order to determine if assets have been impaired, assets are grouped and tested at the lowest level for which identifiable independent cash flows are available (“asset group”). An impairment loss is recognized when the sum of projected undiscounted cash flows is less than the carrying value of the asset group. The measurement of the impairment loss to be recognized is based on the difference between the fair value and the carrying value of the asset group. Fair value may be determined using a market approach or income approach. Business combinations and goodwill The Company accounts for business combinations using the acquisition method in accordance with Accounting Standards Codification, ASC 805, Business Combinations which requires recognition of assets acquired and liabilities assumed, including contingent assets and liabilities, at their respective fair values on the date of acquisition. Contingent consideration is measured at its acquisition-date fair value and included as part of the consideration transferred in a business combination. Contingent consideration that is classified as a liability is remeasured at subsequent reporting dates, with the corresponding gain or loss recognized in profit or loss. Non-controlling interests in the acquiree are measured at fair value on acquisition date. Acquisition-related costs are recognized as expenses in the periods in which the costs are incurred and the services are received (except for the costs to issue debt or equity securities which are recognized according to specific requirements). Purchase price allocations may be preliminary and, during the measurement period not to exceed one year from the date of acquisition, changes in assumptions and estimates that result in adjustments to the fair value of assets acquired and liabilities assumed are recorded in the period the adjustments are determined. Goodwill represents the excess of the consideration transferred for the acquisition of subsidiaries over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. Following initial recognition, goodwill is measured at cost less any accumulated impairment losses. 75 Impairment of goodwill and indefinite-lived intangible assets Goodwill is allocated to the reporting unit in which the business that created the goodwill resides. A reporting unit is an operating segment, or a business unit one level below that operating segment, for which discrete financial information is prepared and regularly reviewed by segment management. We operate in four operating segments, which are our reporting units, and goodwill is allocated at the operating segment level. The Company reviews goodwill and indefinite-lived intangible assets annually for impairment in the fourth quarter, or more frequently if events or circumstances indicate that the carrying amount of an asset may not be recoverable. In performing its annual goodwill impairment test, the Company first assesses qualitative factors including macroeconomic factors, industry trends, cost factors, overall financial performance and the Company’s share price and resultant market value capitalization in comparison to its book value to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If further testing is required, the Company estimates the fair value of the reporting unit using valuation approaches that may include discounted cash flow, market, and asset-based methodologies. These analyses require significant judgment, including assumptions related to future cash flows, long-term growth rates, probability of anticipated EU and U.S. cannabis regulatory changes, profitability, and discount rates. If the carrying value of a reporting unit exceeds its fair value, an impairment charge is recognized for the amount by which the carrying value exceeds the reporting unit’s fair value, not to exceed the carrying amount of goodwill. Leases Arrangements containing leases are evaluated as an operating or finance lease at lease inception. For operating leases, the Company recognizes an operating lease right-of-use (“ROU”) asset and operating lease liability at lease commencement based on the present value of lease payments over the lease term. With the exception of certain finance leases, an implicit rate of return is not readily determinable for the Company's leases. For these leases, an incremental borrowing rate is used in determining the present value of lease payments and is calculated based on information available at the lease commencement date. The incremental borrowing rate is determined using a portfolio approach based on the rate of interest the Company would have to pay to borrow funds on a collateralized basis over a similar term. The Company references market yield curves which are risk-adjusted to approximate a collateralized rate in the currency of the lease. These rates are updated on a quarterly basis for measurement of new lease obligations. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the option will be exercised. Leases with an initial term of 12 months or less are not recognized on the Company's consolidated statements of financial position. Operating lease assets are presented as right-of-use assets, and corresponding operating lease liabilities are presented within lease liabilities, on the Company’s consolidated statements of financial position. Finance lease assets are included in capital assets, and corresponding finance lease liabilities are included within current lease liabilities, on the Company’s consolidated statements of financial position. Long-term investments Investments in equity securities of entities over which the Company does not have a controlling financial interest or significant influence are classified as an equity investment and accounted for at fair value. Equity investments without readily determinable fair values are measured at cost with adjustments for observable changes in price or impairments (referred to as the “measurement alternative”). In applying the measurement alternative, the Company performs a qualitative assessment on a quarterly basis and recognizes an impairment if there are sufficient indicators that the fair value of an individual equity investment is less than its carrying value. Changes in value are recorded in the consolidated statement of net loss and comprehensive loss, within the line, “Non-operating income (expense), net”. 76 Equity method investments Investments in entities over which the Company does not have a controlling financial interest but has significant influence, are accounted for using the equity method, with the Company’s share of losses reported in loss from equity method investments on the statements of loss and comprehensive loss in "Other non-operating (losses) gains, net". Equity method investments are recorded at cost, plus the Company’s share of undistributed earnings or losses, and impairment, if any, within interest in equity investees on the statements of financial position. Convertible debentures The Company accounts for its convertible debentures in accordance with ASC 470-20 Debt with Conversion and Other Options, whereby the convertible instrument is initially accounted for as a single unit of account, unless it contains a derivative that must be bifurcated from the host contract in accordance with ASC 815-15 Derivatives and Hedging – Embedded Derivatives or the substantial premium model in ASC 470-20 Debt – Debt with Conversion and Other Options applies. Where the substantial premium model applies, the premium is recorded in additional paid-in capital. The resulting debt discount is amortized over the period during which the convertible notes are expected to be outstanding as additional non-cash interest expenses. Upon repurchase of convertible debt instruments, ASC 470-20 requires the issuer to allocate total settlement consideration, inclusive of transaction costs, amongst the liability and equity components of the instrument based on the fair value of the liability component immediately prior to repurchase. The difference between the settlement consideration allocated to the liability component and the net carrying value of the liability component, including unamortized debt issuance costs, would be recognized as gain (loss) on extinguishment of debt in the statements of loss and comprehensive loss. The remaining settlement consideration allocated to the equity component would be recognized as a reduction of additional paid-in capital in the statements of financial position. For convertible debentures with an embedded conversion feature that did not meet the equity scope exception from derivative accounting pursuant to ASC 815-15, the Company elected the fair value option under ASC 825 Fair Value Measurements. When the fair value option is elected, the convertible debenture is initially recognized at fair value on the statements of financial position and all subsequent changes in fair value, excluding the impact of the change in fair value related to instrument-specific credit risk are recorded in non-operating income (loss). The changes in fair value related to instrument-specific credit risk is recorded through other comprehensive income (loss). Transaction costs directly attributable to the issuance of the convertible debenture is immediately expensed in the statements of loss and comprehensive loss. Warrants Warrants are accounted for in accordance with applicable accounting guidance provided in ASC 815 Derivatives and Hedging – Contracts in Entity's Own Equity, as either liabilities or as equity instruments depending on the specific terms of the warrant agreement. Warrants classified as liabilities are recorded at fair value and are remeasured at each reporting date until settlement. Changes in fair value are recognized as change in fair value of the warrant liability in the consolidated statements of loss and comprehensive loss. Transaction costs allocated to warrants that are presented as a liability are immediately expensed in the statements of loss and comprehensive loss. Warrants classified as equity instruments are initially recognized at fair value and are not subsequently remeasured. 77 Fair value measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The carrying values of accounts receivable, prepaids and other current assets, bank indebtedness and accounts payable and accrued liabilities approximate their fair values due to their short periods to maturity. The Company calculates the estimated fair value of financial instruments, including convertible notes receivable, long-term investments, warrant liability, contingent consideration, and convertible debentures, using quoted market prices when available. When quoted market prices are not available, fair value is determined based on valuation techniques using the best information available and may include quoted market prices, market comparable, and discounted cash flow projections. Income taxes Income taxes are recognized in the consolidated statements of loss and comprehensive loss and are comprised of current and deferred taxes. Current tax is recognized in connection with income for tax purposes, unrealized tax benefits and the recovery of tax paid in a prior period and measured using enacted tax rates and laws applicable to the taxation period during which the income for tax purposes arose. Deferred tax assets and liabilities are determined based on the differences between the financial reporting and the tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Management makes an assessment of the likelihood that a deferred tax asset will be realized, and a valuation allowance is provided to the extent that it is more likely than not that all or a portion of a deferred tax asset will not be realized. The Company recognizes uncertain income tax positions at the largest amount that is more likely than not to be sustained upon audit by the relevant tax authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. A change in the recognition or measurement of an unrealized tax benefit is reflected in the period during which the change occurs. Revenue Revenue is recognized when the control of the promised goods or services, through performance obligation, is transferred or provided to the customer in an amount that reflects the consideration we expect to be entitled to in exchange for the performance obligations. Excise taxes remitted to tax authorities are government-imposed excise taxes on cannabis and beer. Excise taxes are recorded as a reduction of sales in net revenue in the consolidated statements of loss and comprehensive loss and recognized as a current liability within accounts payable and accrued liabilities on the consolidated balance sheets, with the liability subsequently reduced when the taxes are remitted to the tax authority. In addition, amounts disclosed as net revenue are net of excise taxes, sales tax, duty tax, allowances, discounts and rebates. In determining the transaction price for the sale of goods or services, the Company considers the effects of variable consideration and the existence of significant financing components, if any. We may enter into certain contracts for the sale of goods or services, which provide customers with rights of return, volume discounts, bonuses for volume/quality achievement, and/or sales allowances. In addition, the Company may provide in certain circumstances, a retrospective price reduction to a customer based primarily on inventory movement. The inclusion of these items may give rise to variable consideration. The Company uses the expected value method to estimate the variable consideration because this method provides the most accurate estimation of the amount of variable consideration to which the Company will be entitled. The Company uses historical evidence, current information and forecasts to estimate the variable consideration. The Company reduces revenue and recognizes a contract liability, recorded in accounts receivable, net, equal to the amount expected to be refunded to the customer in the form of a future rebate or credit for a retrospective price reduction, representing its obligation to return the customer’s consideration. The estimate is updated at each reporting period date. 78 Cost of goods sold Cost of goods sold represents costs directly related to manufacturing and distribution of the Company’s products. Primary costs include raw materials, packaging, direct labor, overhead, shipping and handling, the amortization of manufacturing equipment and production facilities and tariffs. Manufacturing overhead and related expenses include salaries, wages, employee benefits, utilities, maintenance and property taxes. Cost of goods sold also includes inventory valuation adjustments. General and administrative General and administrative expenses are comprised primarily of (i) personnel related costs such as salaries, benefits, annual employee bonus expense and stock-based compensation costs; (ii) legal, accounting, consulting and other professional fees; and (iii) corporate insurance and other facilities costs associated with our corporate and administrative locations. Selling Selling expenses are comprised of direct selling costs which primarily consist of (i) commissions paid to our third-party workforce, (ii) patient acquisition and maintenance fees, (iii) Health Canada’s cannabis fees and (iv) outbound freight. Marketing and promotion Marketing and promotion expenses are comprised primarily of marketing and advertising expenses. Research and development Research and development costs are expensed as incurred. Research and development are comprised primarily of costs for clinical study costs, contracted research, consulting services, materials, supplies and other expenses incurred to sustain our overall research and development programs. Stock-based compensation The Company has an omnibus plan which includes issuances of stock options, restricted stock units (“RSUs”) and stock appreciation rights (“SARs”). The Company estimates the fair value of stock options on the date of grant using the Black-Scholes option pricing model. The fair value of RSUs is based on the share price as at date of grant and no SARs were issued to date. The share-based compensation expense is based on the fair value of the stock-based awards at the grant date and the expense is recognized over the related service period following a straight-line vesting expense schedule. The Company estimates forfeitures at the time of grant and revises these estimates in subsequent periods if actual forfeitures differ from those estimates. Any revisions are recognized in the consolidated statements of loss and comprehensive loss such that the cumulative expense reflects the revised estimate. For performance-based stock options and RSUs, the Company records compensation expense over the estimated service period adjusted for a probability factor of achieving the performance-based milestones. At each reporting date, the Company assesses the probability factor and records compensation expense accordingly, net of estimated forfeitures. Transaction (income) costs, net The Company expenses costs net of any gains directly attributable to business acquisitions and classifies these items as transaction (income) costs, net. These items include among other things, legal fees to complete the acquisition, financial advisor and due diligence costs, and transaction related compensation. These items are recognized as incurred. 79 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 year. 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 TLRY 27 Notes, see Note 16 (Convertible debentures payable) are excluded from the calculation of basic and diluted earnings per share because the borrower of the shares is required to refund any dividends paid on the shares lent under the share lending arrangement. In computing diluted earnings (loss) per share, common share equivalents are not considered in periods in which a net loss is reported, as the inclusion of the common share equivalents would be anti-dilutive. For the fiscal years ended May 31, 2026 and May 31, 2025, the dilutive potential common share equivalents outstanding consisted of the following: 7,583,186 and 2,132,358 common shares from RSUs, 303,148 and 303,139 common shares from share options, nil and 620,900 common shares for warrants and 3,314,080 and 3,954,802 common shares for convertible debentures, respectively. Current and prior year share amounts have been retrospectively adjusted to reflect the Reverse Stock Split, which became effective on December 2, 2025. Digital Assets In December 2023, FASB issued ASU 2023-08, Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets. ASU 2023-08 requires certain crypto assets to be measured at fair value separately on the balance sheet with gains and losses from changes in the fair value reported as unrealized gains or losses in the consolidated statement of income (loss) and comprehensive income (loss) each reporting period. ASU 2023-08 also enhances the other intangible asset disclosure requirements by requiring the name, cost basis, fair value, and number of units for each significant crypto asset holding. In conjunction with the acquisition of digital assets during the fiscal quarter ended August 31, 2025, the Company adopted and applied ASU-2023-08 henceforth. The Company's digital assets are initially recorded at cost, and are subsequently measured at fair value as of each reporting period. The Company determines the fair value of its digital assets in accordance with ASC 820, Fair Value Measurement, based on quoted prices in its principal market for Bitcoin (Level 1). Changes in fair value are recognized as incurred in the Company's consolidated statement of income (loss) and comprehensive income (loss), as “Unrealized (gain) loss on digital assets,” within non-operating (income) and expenses, net. Cash flows associated with the purchase and sale of digital assets are classified as investing activities in the Company's consolidated statements of cash flows. 80 Critical accounting estimates and judgments The preparation of the Company’s financial statements requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, revenues and expenses. These estimates and judgements are subject to change based on experience and new information which could result in outcomes that require a material adjustment to the carrying amounts of assets or liabilities affecting future periods. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized prospectively. Financial statement areas that require significant judgement and estimates are as follows: Estimated useful lives, impairment considerations and amortization of capital and intangible assets – Amortization of capital and intangible assets is dependent upon estimates of useful lives based on management’s judgment. Goodwill and indefinite-lived intangible asset impairment testing require management to make estimates in the impairment testing model. On at least an annual basis, the Company tests whether goodwill and indefinite-lived intangible assets are impaired. Impairment of definite long-lived assets is influenced by judgment in defining a reporting unit and determining the indicators of impairment, and estimates used to measure impairment losses. Management uses significant judgement in assessing the qualitative factors to be considered in the qualitative goodwill impairment assessment, including macroeconomic factors, industry trends, cost factors, overall financial performance and the Company’s share price and resultant market value capitalization in comparison to its book value. The reporting unit’s fair value is determined using discounted future cash flow models, which incorporate assumptions regarding future events, specifically future cash flows, growth rates, probability of anticipated EU and U.S. cannabis regulatory changes and discount rates. Business combinations – Judgement is used in determining whether an acquisition is a business combination or an asset acquisition. Judgment may also be required in determining the date on which control of an acquired business is obtained, particularly in situations involving pending regulatory approvals, licensing transfers or other administrative matters, where management must evaluate all relevant facts and circumstances to determine the acquisition date for accounting purposes. We use judgement in applying the acquisition method of accounting for business combinations and estimates to value contingent consideration, identifiable assets and liabilities assumed at the acquisition date. Estimates are used to determine cash flow projections, including the period of future benefit, and future growth and discount rates, among other factors. In certain circumstances, management also considers whether economic obsolescence or other market participant assumptions should be reflected in the valuation of acquired assets, including where external economic factors, market conditions, asset utilization, or the transaction price indicate that replacement cost may not be representative of acquisition-date fair value. The values allocated to the acquired assets and liabilities assumed affect the amount of goodwill recorded on acquisition. Fair value of assets acquired and liabilities assumed is typically estimated using an income approach, which is based on the present value of future discounted cash flows. Significant estimates in the discounted cash flow model include the discount rate, rate of future revenue growth and profitability of the acquired business and working capital effects. The discount rate considers the relevant risk associated with the business-specific characteristics and the uncertainty related to the ability to achieve projected cash flows. These estimates and the resulting valuations require significant judgment. Management engages third party experts to assist in the valuation of material acquisitions. 81 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 November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires disaggregated disclosure of income statement expenses for public business entities. ASU 2024-03 is effective for the Company beginning fiscal year ended May 31, 2028 and will be disclosed in the Annual Report on Form 10-K for such period. The Company is currently evaluating the effect of adopting this ASU. New accounting pronouncements recently adopted In November 2024, the FASB issued ASU 2024-04, Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments, which seeks to clarify the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. The Company adopted ASU 2024-04 beginning June 1, 2025, however, it did not have any impact on our consolidated financial statements. 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. We adopted ASU 2023-09 in our Form 10-K for the period ended May 31, 2026, on a prospective basis, see Note 12 (Income taxes and deferred income taxes). 82 4. Inventory Inventory is comprised of: May 31, May 31, 2026 2025 Beverage inventory $ 80,723 $ 63,965 Plants 38,253 24,045 Dried cannabis 106,467 103,507 Cannabis derivatives 5,463 7,877 Cannabis vapes 1,649 1,860 Packaging and other inventory items 14,255 15,366 Distribution inventory 40,054 38,735 Wellness inventory 14,328 15,527 Total $ 301,192 $ 270,882 Included in cost of goods sold for the fiscal year ended May 31, 2026 and May 31, 2025 are $nil and $1,610 of fair value step up adjustments under purchase accounting (PPA) for beverage inventory sold during the course of the fiscal year, respectively. 5. Related party transactions In the normal course of business, the Company enters into related party transactions with certain entities under common control and joint ventures as detailed below. Solana Life Group, S. de R.L. On October 13, 2025, the Company entered into a strategic partnership for medical cannabis operations in Panama. Under this partnership, the Company holds a 25% equity interest in Solana Life Group, S. de R.L., a Panamanian entity. The joint venture is engaged in the importation, distribution, and commercialization of medical cannabis products in Panama. During the fiscal year ended May 31, 2026, there were no transactions with this entity. RIKI Ventures, LLC The Company entered into a strategic partnership on December 12, 2022 with RIKI Ventures, LLC. in which the Company had a joint venture arrangement with a 50% ownership and voting interest. This venture was held by our craft beverage company Breckenridge. During the fiscal year ended May 31, 2025, there were no transactions with this entity and the Company dissolved its membership interest in RIKI Ventures, LLC. During the fiscal year ended May 31, 2026, as a result of the sold membership interest, RIKI Ventures paid a termination fee of $77 that was recorded within the Consolidated Statement of Loss, within other non-operating (losses) gains, net. The Company also has the following related party employment arrangements. Benjamin Persofsky (son of Director, Renah Persofsky) is employed as Senior Legal Counsel in the Company’s legal department. Garrett Simon (son of Irwin Simon) is employed in the Company’s beverage marketing group. In Fiscal Year 2026, (i) Mr. Persofsky earned total compensation equal to $130 and (ii) Mr. Simon earned total compensation equal to £90 ($127). Their respective compensation amounts are commensurate with that of similarly situated employees at other companies. The Company’s Board of Directors, through its Audit Committee, reviewed and approved these related party transactions. 83 6. Capital assets Capital assets consisted of the following: May 31, May 31, 2026 2025 Land $ 59,764 $ 44,529 Production facility 464,415 407,650 Equipment 283,778 280,585 Leasehold improvement 32,954 20,415 Finance lease, right-of-use assets 117,976 40,308 Construction in progress 10,009 11,241 $ 968,896 $ 804,728 Less: accumulated amortization (288,671 ) (236,295 ) Total $ 680,225 $ 568,433 The Company performs ongoing impairment assessments whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. During the fiscal years ended May 31, 2026 and May 31, 2025, after completing an assessment for indicators of impairment, it was determined that the asset groups were recoverable and as a result there were $nil impairments during the respective fiscal years. Assets held for sale consisted of the following: May 31, May 31, 2026 2025 Production facilities $ — $ 5,800 Equipment 979 — Leasehold improvements 493 — Operating lease, right-of-use assets 977 — Total $ 2,449 $ 5,800 84 As of May 31, 2025, the Company classified $5,800 of the Fort Collins, CO partially vacant warehouse facility from its Cannabis reporting segment as assets held for sale. During the fiscal year ended May 31, 2026, the Company completed the sale of the Fort Collins asset group. The loss on the disposition of the Fort Collins asset group was recorded in the consolidated statement of net loss and comprehensive loss. Additionally, during the fiscal year ended May 31, 2026, the Company classified the assets of Atwater Brewing, with a carrying value of $2,449 from its Beverage reporting unit, as assets held for sale. These assets were acquired on September 1, 2024 as part of the transaction referred to as “Craft Acquisition II.” Following management’s assessment of facility utilizations, it was determined that such assets would be held for sale. Assets held for sale are measured at the lower of carrying amount and the fair value less costs to sell and are no longer depreciated. Changes in the carrying amount are recorded in the consolidated statement of net loss and comprehensive loss. 7. Leases The Company has operating leases for facilities, office spaces, production equipment and vehicles. Leases have varying terms with remaining lease terms of up to approximately 30 years. Certain of our lease arrangements provide us with the option to extend or to terminate the lease early. The table below presents the lease-related assets and liabilities recorded on the balance sheet. May 31, May 31, Classification on Balance Sheet 2026 2025 Assets Finance lease, right-of-use assets Capital assets $ 117,976 $ 40,308 Operating lease, right-of-use assets Operating lease, right-of-use assets 42,318 22,279 Total right-of-use asset $ 160,294 $ 62,587 Liabilities Current: Current portion of finance lease liabilities Current portion of lease liabilities $ 5,105 $ 1,560 Current portion of operating lease liabilities Current portion of lease liabilities 8,252 5,381 Non-current: Finance lease liabilities Lease liabilities 119,682 44,295 Operating lease liabilities Lease liabilities 38,473 20,630 Total lease liabilities $ 171,512 $ 71,866 85 For the fiscal year ended May 31, 2026, the Company had $4,980 of operating lease expenses, which included an offset of $nil for sublease income. For the fiscal year ended May 31, 2025, the Company had $3,453 of operating lease expenses, which included an offset of $761 for sublease income. Included in the total lease liabilities is $985 related to disposal groups classified as held for sale. See Note 6 (Capital Assets). The following table presents the future undiscounted payments associated with lease liabilities as of May 31, 2026: Operating Finance leases leases 2027 $ 16,724 $ 19,067 2028 15,588 19,067 2029 10,236 18,919 2030 6,671 18,683 Thereafter 13,200 148,357 Total minimum lease payments $ 62,419 $ 224,093 Imputed interest (15,694 ) (99,306 ) Obligations recognized $ 46,725 $ 124,787 8. Intangible assets Intangible assets are comprised of the following: Customer relationships & distribution channel Licenses, permits & applications Intellectual property, trademarks, knowhow & brands May 31, 2026 Cost $ 6,793 $ 24,573 $ 26,633 $ 57,999 Accumulated amortization (264 ) (5,707 ) (9,249 ) (15,220 ) Total $ 6,529 $ 18,866 $ 17,384 $ 42,779 As of May 31, 2026, the Company also has the following intangible assets which have been fully impaired; $444,208 of customer relationships and distribution channels, $367,022 of licenses, permits and applications, and $452,530 of intellectual property, trademarks, know-how and brands. Customer relationships & distribution channel Licenses, permits & applications Non-compete agreements Intellectual property, trademarks, knowhow & brands May 31, 2025 Cost $ 610,240 $ 387,238 $ 12,449 $ 618,514 $ 1,628,441 Accumulated amortization (166,032 ) (9,693 ) (12,449 ) (155,084 ) (343,258 ) Accumulated impairment losses (444,208 ) (367,022 ) — (452,530 ) (1,263,760 ) Total $ — $ 10,523 $ — $ 10,900 $ 21,423 As of May 31, 2026, included in licenses, permits & applications are multi-period sponsorship rights of $18,783 and $nil of indefinite-lived intangible assets compared to $15,047 and $nil as of May 31, 2025, respectively. See Note 3 (Significant accounting policies) for additional details. The Company’s indefinite-lived intangible assets were fully impaired in prior periods and had no remaining carrying value as of May 31, 2026. The Company performed the annual impairment test on its finite-lived intangible assets, management assessed for asset specific indicators of impairment during the fourth quarter ended May 31, 2026, and determined there were no impairments to finite-lived intangible assets during the year ended May 31, 2026. During the fiscal year ended May 31, 2025, the Company recorded non-cash impairments of $334,207 related to its finite-lived customer relationships & distribution channel, $186,649 related to its licenses, permits & applications, which were considered indefinite-lived intangible assets and $327,059 related to its finite-lived intellectual property, trademarks, knowhow & brands. This impairment charge resulted in a corresponding income tax recovery of $121,436, resulting in the corresponding reduction in deferred tax liabilities. In calculating the impairment charge, using an income approach, the Company used a discount rate of 10.00%-14.50%, a terminal growth rate of 2%, and an average revenue growth rate of 5%-30% over 5 years to correlate with the cash flows anticipated with the individual intangible assets that were assessed. A reasonably possible change in any of the inputs within the determination of fair value would not result in a material change to the impairment recorded. During the fiscal year ended May 31, 2024, there were no impairments to indefinite-lived intangible assets. 86 Estimated amortization expense for each of the five succeeding fiscal years and thereafter is as follows: Amortization 2027 $ 13,563 2028 13,563 2029 4,130 2030 4,130 2031 4,130 Thereafter 3,263 Total $ 42,779 9. 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 for the fiscal year ended May 31, 2026 and approximately $13,700 for the fiscal year ended May 31, 2025, and its net loss and comprehensive net loss would have increased by approximately $nil for the fiscal year ended May 31, 2026, and $5,500 for the fiscal year ended May 31, 2025. 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. Acquisition of BrewDog BrewDog UK I On March 2, 2026, Tilray Brands UK Ltd (“Tilray UK”), a wholly owned subsidiary of the Company, entered into a Business and Asset Sale Agreement (the “BrewDog BASA”). Under the BrewDog BASA, Tilray UK acquired certain business operations and assets of BrewDog plc and certain of its subsidiary undertakings (collectively, the “BrewDog Group”) through a pre-packaged administration process in Scotland under the Insolvency Act 1986, with the intent for Tilray UK to carry on the acquired business operations and assets as a going concern. The assets acquired included the brewery and distillery located in Ellon, Aberdeenshire, Scotland (the “UK Brewery”), the on-line business, the retail business, 11 of the BrewDog strategic pubs in Scotland, England and Ireland and all the world-wide intellectual property rights relating to the BrewDog brand, including sub-brands such as Punk IPA, Hazy Jane, Wingman, Elvis Juice and Dead Pony Club. The purpose of the acquisition is to broaden Tilray’s beverage brand strategy into international markets. In consideration for the acquisition, the Company paid a total cash purchase price of £33,000 ($44,220). BrewDog Australia On March 9, 2026, the Company acquired BrewDog Brewing Australia Pty Ltd., which included BrewDog’s Australian brewery, along with two hospitality venues in Australia. The purpose of the acquisition is to continue broadening Tilray’s beverage brand strategy into international markets. In consideration for the acquisition, the Company paid nominal consideration. BrewDog UK II On March 23, 2026, the Company acquired 5 additional BrewDog pubs in Scotland and England. The purpose of the acquisition is to broaden Tilray’s beverage brand strategy into international markets. In consideration for the acquisition, the Company paid a total purchase price of £418 ($560). BrewDog U.S. On March 16, 2026, Tilray BrewDog U.S., Inc., a wholly-owned subsidiary of the Company, entered into an asset purchase agreement to acquire certain strategic BrewDog assets in the U.S., including a brewery, pub, and hotel in Columbus, Ohio, as well as pubs located in New Albany, Ohio, Cleveland, Ohio, and Las Vegas, Nevada. The Company obtained control of the acquired assets and assumed liabilities on April 1, 2026, which represents the acquisition date for accounting purposes under ASC 805, notwithstanding certain regulatory approvals that remained pending as of that date. The purpose of the acquisition is to broaden Tilray’s beverage brand strategy. In consideration for the acquisition, the Company paid a total purchase price of $9,293 for BrewDog’s U.S. assets, subject to customary post‑closing adjustments. The Company is in the process of assessing the fair value of the net assets acquired and, as a result, the fair value may be subject to adjustments pending completion of final valuations and post-closing adjustments. The table below summarizes the preliminary estimated fair value of the assets acquired and the liabilities assumed for the BrewDog acquisitions at the effective acquisition dates as follows: BrewDog UK I BrewDog AUS BrewDog UK II BrewDog US Total March 2, March 9, March 23, April 1, 2026 2026 2026 2026 Consideration Cash consideration $ 44,220 $ — $ 560 $ 9,293 $ 54,073 Net assets acquired Current assets Cash and cash equivalents 159 392 — 19 570 Accounts receivable 336 797 — — 1,133 Inventory 16,173 604 — 2,098 18,875 Prepaids and other current assets 159 322 — — 481 Long-term assets Capital assets 60,664 2,769 1,738 7,176 72,347 Finance lease, right-of-use assets 44,640 17,318 — 17,881 79,839 Operating lease, right-of-use assets 16,713 — 5,213 3,697 25,623 Intangible assets 10,762 — — — 10,762 Total assets 149,606 22,202 6,951 30,871 209,630 Current liabilities Accounts payable and accrued liabilities 44,033 4,885 1,177 — 50,095 Current portion of finance lease liabilities 2,827 72 — 466 3,365 Current portion of operating lease liabilities 2,088 — 459 299 2,846 Long - term liabilities Finance lease liabilities 41,813 17,245 — 17,415 76,473 Operating lease liabilities 14,625 — 4,755 3,398 22,778 Total liabilities 105,386 22,202 6,391 21,578 155,557 Total net assets acquired $ 44,220 $ — $ 560 $ 9,293 $ 54,073 In the event that the BrewDog acquisition had occurred on June 1, 2025, the Company would have had, on an unaudited proforma basis for the asset groups purchased, additional net revenue of approximately $190,198 and its net loss and comprehensive net loss would have increased by approximately $41,428 for the fiscal year ended May 31, 2026. In the event that the BrewDog acquisition had occurred on June 1, 2024, the Company would have had, on an unaudited proforma basis for the asset groups purchased, additional net revenue of approximately $276,533 and its net loss and comprehensive net loss would have increased by approximately $32,288 for the fiscal year ended May 31, 2025. This unaudited pro forma financial information does not reflect the realization of any expected ongoing synergies relating to the integration of the BrewDog acquisition. Acquisition of Lyphe On April 15, 2026, the Company issued 398,666 shares of the Company’s Common Stock, as partial consideration pursuant to the share purchase agreement for the acquisition of the Lyphe Group. The purpose of the acquisition was driven by a strategic rationale tied to growth, vertical integration, and expansion in Europe, especially the UK medical cannabis market. In consideration for the acquisition, the Company paid a total purchase price of $3,074 (£2,200) which consisted of stock consideration of $2,795 and $279 of cash consideration. The Company is in the process of assessing the fair value of the net assets acquired and, as a result, the fair value may be subject to adjustments pending completion of final valuations and post-closing adjustments. The table below summarizes the preliminary estimated fair value of the assets acquired and the liabilities assumed for the Lyphe acquisition at the effective acquisition date as follows: Amount Consideration Shares $ 2,795 Cash consideration 279 Net assets acquired Current assets Cash and cash equivalents 83 Accounts receivable 125 Inventory 146 Prepaids and other current assets 118 Long-term assets Capital assets 34 Intangible assets 4,328 Total assets 4,834 Current liabilities Accounts payable and accrued liabilities 1,760 Total liabilities 1,760 Total net assets acquired $ 3,074 In the event that the Lyphe acquisition had occurred on June 1, 2025, the Company would have had, on an unaudited proforma basis, additional net revenue of approximately $3,041 for the fiscal year ended May 31, 2026 and its net loss and comprehensive net loss would have increased by approximately $1,573 for the fiscal year ended May 31, 2026. In the event that the Lyphe acquisition had occurred on June 1, 2024, the Company would have had, on an unaudited proforma basis, additional net revenue of approximately $4,041 for the fiscal year ended May 31, 2025 and its net loss and comprehensive net loss would have increased by approximately $723 for the fiscal year ended May 31, 2025. This unaudited pro forma financial information does not reflect the realization of any expected ongoing synergies relating to the integration of the Lyphe acquisition. 87 10. Goodwill The following tables shows the carrying amount of goodwill as of May 31, 2026 and as of May 31, 2025: May 31, 2026 Cannabis Goodwill $ 2,640,669 Accumulated impairment losses (1,888,319 ) Total $ 752,350 Reporting Units 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 ) (1,897,431 ) (68,186 ) (4,235 ) (2,090,654 ) Effect of foreign exchange — 9,112 (9,284 ) (223 ) (395 ) Total $ — $ 752,350 $ — $ — $ 752,350 The Company performed the annual impairment test during the fourth quarter ended May 31, 2026 by completing a qualitative assessment of relevant events and circumstances. Based on this assessment, the Company determined that it was not more likely than not that the fair value of any reporting unit was less than its carrying amount. Accordingly, no further goodwill impairment testing was performed and no goodwill impairment charges were recognized during the period. In the fiscal year ended May 31, 2025, the Company identified indicators of impairment based on a combination of factors, including a sustained decline in market capitalization, driven in part by uncertainty related to changes in U.S. and global economic conditions, including slower-than-anticipated progress in global cannabis legalization and continued declines in the craft beer industry. In addition, changes in non-discretionary market inputs, including increases in the Company’s discount rate, negatively impacted the estimated future cash flows of its reporting units. As a result, the Company concluded it was more likely than not that the fair value of certain reporting units was less than their carrying amounts as of May 31, 2025. Accordingly, the Company utilized the income approach, which uses future discounted cash flows, to determine the fair value of each reporting unit. As a result, the Company recorded non-cash impairment charges of $1,070,000 of cannabis goodwill, $120,815 of beverage goodwill, $53,173 of wellness goodwill and $4,235 of distribution goodwill. The non-cash charge had no impact on the Company’s compliance with debt covenants at May 31, 2025, its cash flows or available liquidity. In the Company’s cannabis goodwill assessment, the Company used a discount rate of 14.50%, a terminal growth rate of 5%, and an average revenue growth rate of 34% over 5 years, based on an 65% and 25% average probability of anticipated EU and U.S. cannabis legalization, respectively and/or changes in drug policy in various countries within the next 5 years. A 1% increase in the discount rate would result in an additional $133,800 in impairment, a 1% decrease in the terminal growth rate would result in an additional $93,500 in impairment, a 5% decrease in the average growth rate would result in an additional $23,400 in impairment, a 5% decrease in the probability of EU cannabis legalization would result in an additional $44,000 in impairment and a 5% decrease in the probability of US cannabis legalization would result in an additional $17,100 in impairment. Changes to those probabilities resulting in continued delays in or cessation of legalization of cannabis within the United States and internationally, or adverse regulatory changes to existing legislation, could have an unfavorable impact on the estimated future cash flows, and ultimately, the fair value of the cannabis reporting unit, which may result in a material impairment expense recognized in future reporting periods. In the Company’s beverage goodwill assessment, the Company used a discount rate of 10.00%, a terminal growth rate of 2%, and an average revenue growth rate of 2% over 5 years, which brought the remaining beverage goodwill balance to $nil. In the Company’s wellness goodwill assessment, the Company used a discount rate of 12.25%, a terminal growth rate of 2%, and an average revenue growth rate of 7% over 5 years, which brought the remaining wellness goodwill balance to $nil. In the Company’s distribution goodwill assessment, the Company recorded $4,235 of impairments which brought the remaining distribution goodwill balance to $nil. For the fiscal year ended May 31, 2024, the Company recognized $nil impairment expense. 88 11. Long-term investments Long-term investments are comprised of the following items: May 31, May 31, 2026 2025 Equity investments measured at fair value $ 2,187 $ 1,972 Equity investments under measurement alternative 4,364 8,160 Total $ 6,551 $ 10,132 The Company’s equity investments at fair value consist of publicly traded shares, equity interest in non-traded companies and warrants held by the Company. As of May 31, 2026 and May 31, 2025, included within equity investment under measurement alternative is an option to acquire a 68% membership interest in SH Acquisition for $1.00 upon U.S. federal cannabis legalization valued at $4,364 and $8,160 respectively. See Note 28 (Financial risk management and financial instruments). For the fiscal year ended May 31, 2026, the Company acquired $3,595 equity investments measured at fair value, which were subsequently sold for proceeds of $2,566 on the sale of investments, and recognized $812 of losses due to the change in fair value. Additionally, the Company recognized $3,796 of losses due to the change in fair value of equity investments under measurement alternative. For the fiscal years ended May 31, 2025 and 2024, the Company recognized fair value changes of $5,500 and $217, respectively. See Note 28 (Financial risk management and financial instruments) for additional details. 12. Income taxes and deferred income taxes Income (loss) before income taxes includes the following components: For the year ended May 31, 2026 2025 2024 United States $ (115,357 ) $ (1,648,187 ) $ (126,735 ) Canada (17,409 ) (277,811 ) (106,822 ) Other countries 44,706 (376,375 ) (15,463 ) $ (88,060 ) $ (2,302,373 ) $ (249,020 ) The (recoveries) expense for income taxes consists of: For the year ended May 31, 2026 Current: Federal $ 164 State 1,302 Foreign 7,617 Total $ 9,083 Deferred: Federal $ (10,552 ) State 1,572 Foreign 16,995 Total $ 8,015 Income tax expense, net $ 17,098 The (recoveries) expense for income taxes for the comparative periods are as follows: For the year ended May 31, 2025 2024 Current: United States $ 1,974 $ 497 Canada 177 10,819 Other countries 2,343 940 $ 4,494 $ 12,256 Deferred: United States $ (10,015 ) $ (723 ) Canada (7,435 ) (33,422 ) Other countries (108,061 ) (4,727 ) $ (125,511 ) $ (38,872 ) Income tax benefits, net $ (121,017 ) $ (26,616 ) 89 A reconciliation of income taxes at the statutory rate with the reported taxes under ASU No. 2023-09, Improvements to Income Tax Disclosures, is as follows: For the year ended May 31, 2026 Amount Percent Expected Income Tax Expense at the Federal Statutory Rate of 21% $ (18,492 ) 21.0 % Domestic Imputed Interest 6,314 (7.2 )% Pre-tax book income (loss) from DRE's 6,229 (7.1 )% Section 162(m) 2,862 (3.3 )% Return-to-provision and other prior period adjustments(2) 28,318 (32.2 )% Changes in valuation allowances (23,772 ) 27.0 % Other (1,578 ) 1.8 % State and Local Income Taxes, Net of Federal Income Tax Effect(1) 2,875 (3.3 )% Foreign Tax Effects Canada Tax rate differential 1,893 (2.1 )% Non-taxable portion of investment gains (3,053 ) 3.5 % Foreign exchange on subsidiaries (3,005 ) 3.4 % Return-to-provision and other prior period adjustments (1,593 ) 1.8 % Changes in valuation allowances(3) 20,187 (22.9 )% Other 394 (0.4 )% Germany Tax rate differential 1,572 (1.8 )% Return-to-provision adjustments (2,076 ) 2.4 % Changes in valuation allowances (103 ) 0.1 % Other 2 (0.0 )% Portugal Tax rate differential (196 ) 0.2 % Other 371 (0.4 )% Other Foreign Jurisdictions (51 ) 0.1 % Effective Tax Rate $ 17,098 (92.5 )% (1) New York (including New York City) contributed more than 50% to State and Local Income Taxes, Net of Federal Income Tax Effect. (2) United States return-to-provision relates primarily to prior-year impairment of intangible assets. The United States deferred taxes are fully covered by valuation allowance, therefore no net impact to the financial statements. (3) Increase in Canadian valuation allowance relates primarily to current period activity. Reconciliations of income taxes at the statutory rate with the reported taxes for the comparative periods are as follows: For the year ended May 31, 2025 2024 Loss before net income taxes: $ (2,302,373 ) $ (249,020 ) Income tax recovery at statutory rate of 21% (483,708 ) (51,325 ) Tax impact of foreign operations (41,680 ) (5,661 ) Foreign exchange and other (14,371 ) (15,586 ) Non-deductible expenses 6,292 6,147 Non-deductible (taxable) losses 32 (682 ) Changes in enacted rates (3,908 ) 2,394 Nondeductible Impairment 285,582 — Change in fair value of warrant liability (454 ) 302 Return to provision and other prior year items (33,098 ) 16,933 State Provision, net of federal benefit (14,794 ) 612 Change in valuation allowance 179,090 20,250 Income tax recovery, net $ (121,017 ) $ (26,616 ) Cash paid for income taxes, net of refunds, was as follows: For the year ended May 31, 2026 United States Federal $ 397 State New York 803 Colorado 13 Illinois 14 Massachusetts 12 North Carolina 25 New Jersey 17 Oregon 35 South Carolina 21 Tennessee 29 Other State 53 1,419 Foreign Canada Federal (529 ) British Columbia (468 ) Ontario 38 Germany (225 ) (1,184 ) Grand Total $ 235 The following table summarizes the components of deferred tax: For the year ended May 31, 2026 2025 Deferred assets Operating loss carryforwards - United States $ 73,188 $ 66,048 Operating loss carryforwards - Canada 437,272 408,718 Operating loss carryforwards - Other Countries 16,196 13,388 Capital loss carryforwards 57,869 35,603 Intangible assets 304,067 350,527 Property and equipment 30,793 27,567 Investments and convertible notes receivable 44,361 43,317 Investment tax credits and related pool balance 1,996 2,249 Accruals 12,199 20,932 Stock Compensation 26,596 21,599 Restricted interest carried forward 3,938 — Other Deferred Items 16,924 21,319 Total Deferred tax assets 1,025,399 1,011,267 Less valuation allowance (997,361 ) (968,929 ) Net deferred tax assets 28,038 42,338 Deferred tax liabilities Property and equipment (28,800 ) (20,419 ) Intangible assets (8,263 ) (1,418 ) Convertible Debentures Payable (3 ) (129 ) Other Deferred Items (3,228 ) (24,120 ) Total deferred tax liabilities (40,294 ) (46,086 ) Total Deferred Tax Asset/(Liability) $ (12,256 ) $ (3,748 ) 90 The Tax Cuts and Jobs Act (TCJA) was enacted on December 22, 2017 and reduced the U.S. statutory federal corporate tax rate from 35% to 21% and introduced several new international tax provisions, including the tax on Global Intangible Low-Taxed Income (‘‘GILTI’’). The Company has made a policy decision to record GILTI tax as a current-period expense when incurred. On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted, which extended and modified certain provisions of the TCJA, including bonus depreciation and interest expense limitations. OBBBA does not have a material impact to the Financial Statements. As of May 31, 2026, the Company had generated net operating loss carry-forwards in the United States of $347,553, which can be carried forward indefinitely and are generally limited in use annually to 80% of the current year taxable income, starting 2021. The Company has generated net operating loss carry-forwards in Canada of $1,650,146, which can be carried forward for 20 years and begin to expire in 2028. Management believes that it is more-likely-than-not that the benefit from certain United States and foreign net operating loss carry-forwards will not be realized. In recognition of this risk, the Company has provided a valuation allowance on the deferred tax assets relating to these carry-forwards. The net change in the total valuation allowance was an increase of $28,432 and $179,090 for the fiscal years ended May 31, 2026 and 2025, respectively. The total valuation allowance was increased $37,627 by current period earnings and $19,429 by effects of currency translation. The total valuation allowance was decreased by $28,740 related to return-to-provision and other prior period adjustments. The largest component of prior period adjustments to valuation allowances was a decrease of $29,602 in the United States, primarily related to the prior year impairment of intangible assets. These adjustments also reduced corresponding deferred tax assets and liabilities. The Company recognizes the financial statement impact of a tax position only after determining that the relevant tax authority would more-likely-than-not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the Financial Statements is the largest impact that has a greater than fifty percent likelihood of being realized upon ultimate settlement with the relevant tax authority. The total amount of gross unrecognized tax benefits (“GUTB”) was $nil for periods May 31, 2026, 2025 and 2024, respectively. There is a reasonable possibility that the Company’s unrecognized tax benefits will change within twelve months due to audit settlements or the expiration of statute of limitations, but the Company does not expect the change to be material to Financial Statements. The Company recognizes interest and, if applicable, penalties for any uncertain tax positions. Interest and penalties are recorded as a component of income tax expenses. In the fiscal years ended May 31, 2026, 2025 and 2024, the Company recorded $nil, $nil and $nil, respectively, of interest and penalty expenses related to uncertain tax positions. As of May 31, 2026, and 2025, the Company had a cumulative balance of accrued interest and penalties on unrecognized tax positions of $nil and $nil, respectively. The Company and its subsidiaries are subject to United States federal income tax as well as the income tax of multiple state and foreign jurisdictions. Major jurisdictions where there are wholly owned subsidiaries of Tilray Brands, Inc. which require income tax filings include Canada, Portugal, Germany, and Australia. The earliest periods open for review by local taxing authorities are fiscal years 2022 for Canada, 2022 for Portugal, 2021 for Germany, 2022 for Australia, and 2023 for United States. 13. 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 May 31, 2026, the Company has not drawn on the line of credit. The operating line of credit is secured by a security interest on certain real property located at 265 Talbot St. West, Leamington, Ontario. CC Pharma GmbH, a subsidiary of the Company, has two operating lines of credit for €7,000 and €500 each, which bear interest at Euro Short-Term Rate (“ESTR”) plus 2.50% and Euro Interbank Offered Rate (“EURIBOR”) plus 4.00%, respectively. As of May 31, 2026, a total of €7,500 ($8,775) was drawn down from the 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 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 May 31, 2026, the Company has drawn $nil on the revolving line of credit under the ABC Group Credit Agreement. See Note 30 (Subsequent events) for disclosure of the sixth amendment to the Credit Agreement. . 91 14. Accounts payable and accrued liabilities Accounts payable and accrued liabilities comprised of: May 31, May 31, 2026 2025 Trade payables $ 114,538 $ 107,348 Accrued liabilities 135,906 103,260 Litigation accrual 11,931 12,431 Accrued payroll and employment related taxes 20,013 1,436 Income taxes payable 12,667 58 Accrued interest 3,258 4,193 Sales taxes payable 19,775 6,596 Total $ 318,088 $ 235,322 92 15. Long-term debt The following table sets forth the net carrying amount of long-term debt instruments: May 31, May 31, 2026 2025 Mortgage payable - 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 $ 34,310 $ 38,690 Mortgage payable - 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 8,420 11,501 Mortgage payable - 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 10,356 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 23 157 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 1,890 2,020 Term loan ‐ €3,500 ‐ at 4.59%, 5‐year term, repayable in monthly installments of €52 plus interest, due in August 2028 1,822 2,546 Mortgage payable - $22,635 - EURIBOR rate plus 1.5%, 10-year term, repayable in monthly installments of $57 to $69, due in October 2030 18,669 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 63,688 80,438 Carrying amount of long-term debt 139,178 164,124 Unamortized financing fees (593 ) (864 ) Net carrying amount 138,585 163,260 Less principal portion included in current liabilities (18,160 ) (14,767 ) Total noncurrent portion of long-term debt $ 120,425 $ 148,493 The Company, entered into a secured credit agreement on November 28, 2022, for a credit facility through its 51% owned subsidiary Aphria Diamond Inc. (“Aphria Diamond”). The principal amount of loans outstanding is secured by the property at 620 Country Road 14, Leamington, Ontario, which is owned by Aphria Diamond and a guarantee from Aphria Inc. During the fiscal year ended May 31, 2025, the Company refinanced this debt by entering into a new Credit Agreement. The Credit Agreement provides for a term loan equal to CAD $53,000 with a maturity date of February 21, 2028. The Company used CAD $48,171 of the proceeds from the Credit Agreement to repay in full all outstanding obligations under the prior credit facility. The mortgage payable of C$25,000 was entered into on July 27, 2018 and is secured by the property at 223, 231, 239, 265, 269, 271 and 275 Talbot Street West, Leamington Ontario, a first position on a general security agreement, and an assignment of fire insurance to the lender. 93 The term loan of C$25,000 was entered into on May 9, 2017 and is secured by the property at 265 Talbot Street West, Leamington Ontario, a first position on a general security agreement, and an assignment of fire insurance to the lender. The term loan of C$1,250 and mortgage payable of C$3,750 were entered into on July 22, 2016 and are secured by the property at 265 Talbot Street West, Leamington, Ontario and a first position on a general security agreement. The Company entered into term loans in June 2023 for €3,500 through wholly owned subsidiary CC Pharma. These term loans are secured against the distribution inventory held by CC Pharma and by the land where the facility is located and the building. On December 1, 2021, the Company acquired all the membership interests in Cheese Grits, LLC, a Georgia limited liability company that owns the SweetWater Brewing Company brewery and taproom in Atlanta, Georgia, which facility was previously leased to the Company. Cheese Grits, LLC, was owned by certain former equity holders of SweetWater and current employees. As part of this purchase, the Company, through subsidiary Cheese Grits, LLC, acquired the mortgage payable which is secured against the Sweetwater brewery and taproom. The term loan of $90,000 was fully drawn on September 29, 2023 to fund part of the purchase price for Craft Acquisition I. Under the terms of the ABC Group Secured Credit Agreement, the Company pledged all of ABC Group and the Wellness segment’s and its subsidiaries’ assets and the related equity interests, and Tilray Brands, Inc. provided a full guarantee of the borrowing obligations under the ABC Group Secured Credit Agreement, as well as requiring the lenders approval to transfer assets to Tilray Brands, Inc. The Company maintains certain financial covenants or minimum balances in certain cash operating accounts, and as of May 31, 2026, the Company was in compliance with all the long-term debt covenants. 16. Convertible debentures payable The following table sets forth the net carrying amount of the convertible debentures: May 31, May 31, 2026 2025 5.20% Convertible Notes ("TLRY 27") $ 79,529 $ 86,428 Deduct - current portion — — Total convertible debentures payable, non current portion $ 79,529 $ 86,428 94 TLRY 27 May 31, May 31, 2026 2025 5.20% Contractual debenture $ 172,500 $ 172,500 Debt settlement (84,500 ) (67,500 ) Unamortized discount (8,471 ) (18,572 ) Net carrying amount $ 79,529 $ 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 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. 95 During the fiscal year ended May 31, 2026, the Company exchanged an aggregate $17,000 of its TLRY 27 Notes for cancellation, by issuing 3,138,878 shares of Common Stock and paying $208 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 $4,394 reduction of additional paid-in capital in the Consolidated Statements of Stockholders’ Equity. Additionally, this repurchase resulted in a gain of $2,047 which was recorded in other non-operating (losses) gains, net as shown in Note 26 (Non-operating income (expense)). Following consummation of the exchange, the number of outstanding Borrowed Shares of Common Stock was reduced by 379,420 shares which were then returned as Treasury Stock. As of May 31, 2026 and May 31, 2025, a total of 1,964,058 and 2,434,378 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, see Note 2 (Basis of preparation). During the fiscal year ended May 31, 2026, the Company recognized interest expense of $5,138 and accretion of amortized discount interest of $7,914. For the same periods in the prior year Company recognized interest expense of $7,775 and accretion of amortized discount interest of $10,863. As of May 31, 2026, there was $88,000 principal outstanding compared to $105,000 principal outstanding as of May 31, 2025 under the TLRY 27 Notes. See Note 30 (Subsequent events) for additional transactions after the period. 96 17. Warrant Liability Between September 5, 2025 and September 15, 2025, certain holders elected to exercise an aggregate of 620,900 of the Company’s issued and outstanding warrants in accordance with their terms. Pursuant to the exercise of such warrants, Tilray received $2,367 of cash consideration and issued 620,900 shares of common stock to such holders. As of May 31, 2026 and May 31, 2025, there were nil and 620,900 warrants outstanding, respectively. Current and prior year share amounts have been retrospectively adjusted to reflect the Reverse Stock Split, which became effective on December 2, 2025, See Note 2 (Basis of presentation). 18. 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 May 31, 2026, the Company had issued and outstanding 131,683,075 shares of Common Stock, 589,217 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 fiscal year ended May 31, 2026, the Company issued the following shares: a) 19,625,505 shares of Common Stock were issued pursuant to its At-the-Market (“ATM”) program, which generated gross proceeds of $161,636 and net proceeds of $157,974, after deducting $3,662 in commissions and other fees associated with these issuances. b) 3,138,878 shares of Common Stock were issued in the amount of $17,157 to exchange the aggregate principal of $17,000 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 $4,394 reduction of additional paid-in capital. Following consummation of the exchange, the number of outstanding Borrowed Shares of Common Stock was reduced by 379,420 shares which were then returned as Treasury Stock, see Note 16 (Convertible debentures). c) 861,707 shares of Common Stock to settle dividends payable to the non-controlling shareholders of Aphria Diamond in the amount of $14,821. d) 620,900 shares of Common Stock were issued to settle exercised warrants. e) 20,652 shares of Common Stock were cancelled pursuant to the treatment of fractional shares in connection with the Reverse Stock Split. f) 398,666 shares of Common Stock were issued for Lyphe acquisition, see Note 9 (Business Acquisition) g) 990,196 shares of Common Stock were issued in connection with the exercise of previously awarded stock-based compensation awards, net of cancellations. In aggregate, during the year ended May 31, 2026, 379,420 shares were returned in connection with the share lending agreement related to the TLRY 27 Notes which were recorded as Treasury stock. All current and prior year share amounts have been retrospectively adjusted to reflect the Reverse Stock Split, which became effective on December 2, 2025, see Note 2 (Basis of preparation). Stock-based compensation The Company maintains stock-based compensation plans as disclosed in our Annual Financial Statements. For the fiscal year ended May 31, 2026, the total stock-based compensation was $45,940. For the fiscal years ended May 31, 2025 and May 31, 2024, the total stock-based compensation was $24,289 and $31,769, respectively. During the fiscal year-ended May 31, 2026, the Company granted 4,562,669 time-based RSUs, and nil performance-based RSUs. For the fiscal year ended May 31, 2025, the Company granted 1,350,513 time-based RSUs and nil performance-based RSUs. During the fiscal year ended May 31, 2024, the Company issued (i) 756,615 performance‑based restricted stock units (the “Performance‑Based RSUs”) and (ii) additional performance‑based awards payable in cash or, at the discretion of the Company’s Compensation Committee, in shares of the Company’s common stock (the “Performance‑Based Elective Settlement Award,” and together with the Performance‑Based RSUs, the “Performance‑Based Awards”). The Performance‑Based Awards were not considered granted for accounting purposes at the time of issuance because the applicable performance conditions had not yet been established or approved. Accordingly, no compensation expense was recognized within the Consolidated Statements of Loss at that time. During the period from issuance through the fiscal year-ended May 31, 2026, the number of outstanding Performance‑Based RSUs was reduced from 756,615 to 744,117 as a result of employee attrition, and the Performance‑Based Elective Settlement Awards were also correspondingly reduced. In September 2025, the Company established and approved the relevant performance conditions for the Performance‑Based Awards and, as a result, the awards were considered granted for accounting purposes. Beginning in the quarter ended November 30, 2025, the Company commenced recognition of stock‑based compensation expense based on the grant‑date fair value of the Performance‑Based Awards, which is being recognized over the remaining requisite service period. The Company currently expects the Performance‑Based Elective Settlement Award to be settled in shares of common stock. Moreover, because the Performance‑Based Elective Settlement Award has a fixed monetary value and is settleable in a variable number of shares, it is classified as a liability within the statement of Financial Position. The Performance‑Based RSUs are classified as equity awards and are reflected within stockholders’ equity. The Company operates multiple stock-based award plans as follows: Tilray 2018 Equity Incentive Plan and Original Plan The 2018 Equity Incentive Plan (EIP) authorizes the award of stock options, restricted stock units (“RSUs”) and stock appreciation rights (“SARs”) to employees, including officers, non-employee directors and consultants and the employees and consultants of our affiliates. Shares subject to awards granted under the EIP that expire or terminate without being exercised in full, or that are paid out in cash rather than in shares, do not reduce the number of shares available for issuance under the EIP. Additionally, shares become available for future grant under the EIP if they were issued under the EIP and if the Company repurchases them or they are forfeited. This includes shares used to pay the exercise price of an award or to satisfy the tax withholding obligations related to an award. The maximum number of shares of common stock subject to stock awards granted under the EIP or otherwise during any one calendar year to any non-employee director, taken together with any cash fees paid by the Company to such non-employee director during such calendar year for service on the Board of Directors, will not exceed five hundred thousand dollars in total value, calculating the value of any such stock awards based on the grant date fair value of such stock awards for financial reporting purposes, or, with respect to the calendar year in which a nonemployee director is first appointed or elected to our Board of Directors, one million dollars. 97 Stock options represent the right to purchase shares of our common stock on the date of exercise at a stated exercise price. The exercise price of a stock option generally must be at least equal to the fair market value of our shares of common stock on the date of grant. The Company’s compensation committee may provide for stock options to be exercised only as they vest or to be immediately exercisable with any shares issued on exercise being subject to the Company’s right of repurchase that lapses as the shares vest. The maximum term of stock options granted under the EIP is ten years. RSUs represent a right to receive common stock or their cash equivalent for each RSU that vests, which vesting may be based on time or achievement of performance conditions. Unless otherwise determined by our compensation committee at the time of grant, vesting will cease on the date the participant no longer provides services to the Company and unvested shares will be forfeited. If an RSU has not been forfeited, then on the date specified in the RSUs, the Company will deliver to the holder a number of whole shares of common stock, cash or a combination of shares of our common stock and cash. Additionally, dividend equivalents may be credited in respect of shares covered by the RSUs. Any additional shares covered by the RSU credited by reason of such dividend equivalents will be subject to all of the same terms and conditions of the underlying RSU agreement to which they relate. The RSUs generally vest over a 3-or-4 year period. The fair value of RSUs are based on the share price as at date of grant. SARs provide for a payment, or payments, in cash or shares of common stock to the holder based upon the difference between the fair market value of shares of our common stock on the date of exercise and the stated exercise price. The maximum term of SARs granted under the EIP is ten years. No SARs were issued to date. The EIP permits the grant of performance-based stock and cash awards. The performance goals may be based on Company-wide performance or performance of one or more business units, divisions, affiliates or business segments and may be either absolute or relative to the performance of one or more comparable companies or the performance of one or more relevant indices. The length of any performance period, the performance goals to be achieved during the performance period, and the measure of whether and to what degree such performance goals have been attained will be conclusively determined by the Board of Directors. In conjunction with the reverse acquisition with Aphria Inc on April 30, 2021, 980,685 shares of common stock had been reserved for issuance under the EIP. The number of shares of common stock reserved for issuance under the 2018 EIP will automatically increase on January 1 of each calendar year, for a period of not more than ten years, starting on January 1, 2019 and ending on and including January 1, 2027, in an amount equal to 4% of the total number of shares of our common stock outstanding on December 31 of the prior calendar year, or a lesser number of shares determined by our Board of Directors. The shares reserved include only the outstanding shares related to stock options and RSUs and excludes stock options outstanding under the Original Plan. Certain employees and other service providers of the Company participate in the equity-based compensation plan of Privateer Holdings, Inc (the “Original Plan”) under the terms and valuation method detailed below. The expected life of the stock options represented the period of time stock options were expected to be outstanding and was estimated considering vesting terms and employees’ historical exercise and post-vesting employment termination behavior. Expected volatility was based on historical volatilities of public companies operating in a similar industry to Privateer Holdings. The risk-free rate is based on the United States Treasury yield curve in effect at the time of grant. The expected dividend yield was determined based on the stock option’s exercise price and expected annual dividend rate at the time of grant. No stock options were granted under the EIP during the fiscal years ended May 31, 2026 and 2025. 98 Stock-based activity under the EIP and Original Plan for the fiscal year ended May 31, 2026 is as follows: EIP Time-based stock option activity Weighted- Weighted- average average remaining Stock exercise contractual Aggregate Options price term (years) intrinsic value Balance, May 31, 2025 278,603 $ 145.54 3.0 $ — Granted — — — — Exercised — — — — Forfeited — — — — Cancelled — — — — Balance, May 31, 2026 278,603 $ 145.54 2.0 $ — Original plan time-based stock option activity Weighted- Weighted- average average remaining Stock exercise contractual Aggregate Options price term (years) intrinsic value Balance, May 31, 2025 1,296 $ 47.66 2.6 $ — Exercised — — — — Forfeited — — — — Cancelled — — — — Balance, May 31, 2026 1,296 $ 47.66 1.6 $ — Time-based and Performance-based RSU activity Weighted- Weighted- average average grant-date remaining Time-based fair value contractual Aggregate RSUs per share term (years) intrinsic value Balance, May 31, 2025 2,770,571 $ 26.05 2.9 $ 11,794 Granted 4,562,669 5.94 — 28,214 Vested (1,249,757 ) 20.84 — (6,886 ) Forfeited (192,922 ) 10.73 — (1,133 ) Cancelled (82,241 ) 115.15 — (55 ) Balance, May 31, 2026 5,808,320 $ 10.62 0.9 $ 31,934 Predecessor Plan - Aphria Aphria had established the Aphria Omnibus Incentive Plan (the “Aphria Predecessor Plan”). Following stockholder approval of the EIP, no new awards have been granted under the Aphria Predecessor Plan. In connection with the reverse acquisition Aphria stock options, Aphria RSUs and DSUs issued under the Predecessor Plan were exchanged for options, RSUs under the EIP. As a result of the modification, all grantees were affected, and the Company recognized nil incremental compensation cost. No stock options were granted under the Aphria Predecessor Plan during the fiscal years ended May 31, 2026 and 2025. As of May 31, 2026, there were 4,523 awards outstanding and which are vested and exercisable. 99 Stock option, RSU and DSU activity for the Company under the Predecessor Plan is as follows: Time-based stock option activity Weighted Weighted Weighted average average average grant remaining Aggregate Number of exercise date fair contractual Intrinsic options price value term (years) Amount Outstanding, beginning of the year 4,523 $ 91.20 $ — 2.53 $ — Exercised during the year — — — — — Granted during the year — — — — — Forfeited during the year — — — — — Expired during the year — — — — — Outstanding, end of the year 4,523 $ 91.20 $ — 1.53 $ — Vested and exercisable, end of the year 4,523 $ 91.20 $ — 1.53 $ — Time-based and Performance-based DSU activity May 31, 2026 Weighted average grant - date fair Time-based value per DSUs share Non-vested, beginning of the year 21,092 $ 160.32 Granted during the year — — Vested during the year — — Forfeited during the year — — Non-vested, end of the year 21,092 $ 160.32 100 Predecessor Plan - HEXO Prior to the acquisition of HEXO Corp, HEXO had established the Formal Plan and Omnibus Incentive Plan (the “HEXO Predecessor Plan”). In connection with the acquisition, HEXO stock options issued under these plans were exchanged at a rate of 4.352 for 126,779 options under the Tilray 2018 EIP. As a result of the modification, all grantees were affected, and the Company recognized nil incremental compensation cost. Following stockholder approval of the EIP, no new awards have been granted under the Predecessor Plan. As of May 31, 2026, 18,717 awards are outstanding and 18,717 are vested and exercisable. May 31, 2026 Weighted Weighted Weighted average average average grant remaining Aggregate Number of exercise date fair contractual Intrinsic options price value term (years) Amount Outstanding, beginning of the year 18,717 $ 2,345.31 $ — 5.84 $ — Exercised during the year — — — — — Converted upon acquisition — — — — — Forfeited during the year — — — — — Expired during the year — — — — — Outstanding, end of the year 18,717 $ 2,345.31 $ — 4.81 $ — Vested and exercisable, end of the year 18,717 $ 2,345.31 $ — 4.81 $ — All current and prior year share amounts have been retrospectively adjusted to reflect the Reverse Stock Split, which became effective on December 2, 2025. 19. Accumulated other comprehensive loss Accumulated other comprehensive loss includes the following components: Foreign currency translation gain (loss) Balance May 31, 2023 $ (46,610 ) Other comprehensive income (loss) 3,111 Balance May 31, 2024 $ (43,499 ) Other comprehensive income (loss) 436 Balance May 31, 2025 $ (43,063 ) Other comprehensive income (loss) (1,170 ) Balance May 31, 2026 $ (44,233 ) 101 20. 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%). Summarized balance sheet information of the entities in which there is a non-controlling interest as of May 31, 2026: Aphria ColCanna May 31, Enroot Diamond S.A.S. 2026 Current assets $ 201 $ 110,664 $ 1 $ 110,866 Non-current assets — 105,278 3,756 109,034 Current liabilities (4 ) (129,883 ) (7,147 ) (137,034 ) Non-current liabilities — (38,231 ) (1,440 ) (39,671 ) Net assets $ 197 $ 47,828 $ (4,830 ) $ 43,195 Summarized balance sheet information of the entities in which there is a non-controlling interest as of May 31, 2025: 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 On January 7, 2025, the Company dissolved its 75% ownership interest in CC Pharma Nordic ApS., and as a result, the Company no longer controls CC Pharma Nordic ApS. and thus no longer consolidates this entity. On January 16, 2025, MedMen exited receivership and substantially all of its remaining assets were transferred to a new entity owned by MedMen’s secured creditors, including SH Acquisition. In connection with this restructuring, the Company disposed of its MedMen Convertible Note in exchange for on option to acquire a 68% membership interest in SH Acquisition for $1.00 upon U.S. federal cannabis legalization. As a result, the Company no longer controls SH Acquisition and thus no longer consolidates this entity. Summarized income statement information of the entities in which there is a non-controlling interest for the fiscal year ended May 31, 2026: Aphria ColCanna May 31, Enroot Diamond S.A.S. 2026 Revenue $ 29 $ 81,477 $ — $ 81,506 Total expenses 39 48,459 (622 ) 47,876 Net (loss) income (10 ) 33,018 622 33,630 Other comprehensive (loss) income — 2,899 (425 ) 2,474 Net comprehensive (loss) income $ (10 ) $ 35,917 $ 197 $ 36,104 Non-controlling interest % 25 % 49 % 10 % NA Comprehensive (loss) income attributable to NCI (3 ) 17,599 20 17,616 Additional income attributable to NCI — — — - Net comprehensive (loss) income attributable to NCI $ (3 ) $ 17,599 $ 20 $ 17,616 102 Summarized income statement information of the entities in which there is a non-controlling interest for the fiscal year ended May 31, 2025: SH CC Pharma Aphria ColCanna May 31, Acquisition Nordic ApS Diamond S.A.S. 2025 Revenue $ — $ — $ 78,414 $ — $ 78,414 Total expenses 20,000 11 54,274 290 74,575 Net (loss) income (20,000 ) (11 ) 24,140 (290 ) 3,839 Other comprehensive (loss) income — 8 (45 ) (12 ) (49 ) Net comprehensive (loss) income $ (20,000 ) $ (3 ) $ 24,095 $ (302 ) $ 3,790 Non-controlling interest % 32 % 25 % 49 % 10 % NA Comprehensive (loss) income attributable to NCI (6,400 ) (1 ) 11,807 (30 ) 5,376 Additional income attributable to NCI — — — — — Net comprehensive (loss) income attributable to NCI $ (6,400 ) $ (1 ) $ 11,807 $ (30 ) $ 5,376 Summarized income statement information of the entities in which there is a non-controlling interest for the fiscal year ended May 31, 2024: SH CC Pharma Aphria ColCanna May 31, Acquisition Nordic ApS Diamond S.A.S. 2024 Revenue $ — $ — $ 103,331 $ — $ 103,331 Total expenses 42,681 (1,064 ) 40,935 (203 ) 82,349 Net (loss) income (42,681 ) 1,064 62,396 203 20,982 Other comprehensive (loss) income — (9 ) 171 (334 ) (172 ) Net comprehensive (loss) income $ (42,681 ) $ 1,055 $ 62,567 $ (131 ) $ 20,810 Non-controlling interest % 32 % 25 % 49 % 10 % NA Comprehensive (loss) income attributable to NCI (13,658 ) 264 30,658 (13 ) 17,251 Additional income attributable to NCI — — 5,336 — 5,336 Net comprehensive (loss) income attributable to NCI $ (13,658 ) $ 264 $ 35,994 $ (13 ) $ 22,587 21. Net revenue Net revenue is comprised of: For the year ended May 31, 2026 2025 2024 Beverage revenue $ 265,457 $ 253,181 $ 213,614 Beverage excise taxes (11,481 ) (12,586 ) (11,520 ) Net beverage revenue 253,976 240,595 202,094 Cannabis revenue 352,306 330,609 370,692 Cannabis excise taxes (83,964 ) (81,608 ) (97,894 ) Net cannabis revenue 268,342 249,001 272,798 Distribution revenue 327,244 271,228 258,740 Wellness revenue 65,892 60,485 55,310 Total $ 915,454 $ 821,309 $ 788,942 Included in revenue from Canadian adult-use cannabis is $nil of advisory services revenue for the fiscal year ended May 31, 2026, compared to $1,460 and $1,500 of advisory services for the fiscal year ended May 31, 2025 and May 31, 2024, respectively. 103 22. Cost of goods sold Cost of goods sold is comprised of: For the year ended May 31, 2026 2025 2024 Beverage costs $ 162,743 $ 147,591 $ 113,522 Cannabis costs 161,256 150,005 182,594 Distribution costs 286,589 241,896 230,596 Wellness costs 44,425 41,247 38,879 Total $ 655,013 $ 580,739 $ 565,591 23. General and administrative expenses General and administrative expenses are comprised of the following items: For the year ended May 31, 2026 2025 2024 Salaries and wages $ 91,448 $ 88,015 $ 83,673 Office and general 42,171 28,314 28,460 Stock-based compensation 45,940 24,289 31,769 Insurance 9,792 11,843 12,586 Professional fees 4,238 4,765 5,345 (Gain) loss on sale of capital assets (509 ) 928 (4,198 ) Travel and accommodation 5,569 5,717 5,138 Rent 4,980 3,453 4,585 Total $ 203,629 $ 167,324 $ 167,358 Included in (Gain) loss on sale of capital assets for the fiscal year ended May 31, 2025, was a loss of $1,787 related to the sale of the Avanti facility, which was closed as part of our restructuring efforts during the fiscal year ended May 31, 2025. 24. Restructuring In connection with the execution of our acquisition strategy and strategic transactions, the Company has incurred restructuring and exit costs associated with the integration efforts of these transactions. In connection with these efforts, the Company incurred $13,113, $34,283 and $15,581 of restructuring costs for the fiscal years ended May 31, 2026, 2025 and 2024, respectively. All restructuring plans are approved at the executive level, and their associated expenses are recognized in the period in which the plan is committed. Within the Cannabis segment, during the fiscal year ended May 31, 2026, the Company incurred restructuring expenses totaling $6,258. These charges included $4,573 associated with the restructuring of the Quebec facility to transition from vegetable cultivation to cannabis cultivation in response to increased global cannabis demand, $1,093 related to employee termination severance and benefits associated with the reorganization of the Canadian cannabis commercial function, and $221 related to the wind-down of certain non-operating entities. Additionally, the Company recognized $371 related to its Fort Collins, CO partially vacant warehouse that was previously held for sale and was divested during the fiscal year ended May 31, 2026. See Note 6 (capital assets). Within the Beverage segment, restructuring activities primarily related to Project 420, a business optimization plan designed to consolidate production, streamline operations, and improve the Company’s cost structure. Activities under the plan included the closure and consolidation of certain brewery and related facilities, including Redhook, Terrapin, Atwater, Hop Valley, and Revolver, as well as costs incurred by the restructuring team established to execute the plan. Restructuring charges primarily consisted of employee termination benefits, facility closure and exit costs, contract and other termination costs, costs associated with SKU rationalization activities, and other costs directly associated with the execution of the plan. During the fiscal year ended May 31, 2025, the Company accrued $8,500 of restructuring charges related to these initiatives. During the fiscal year ended May 31, 2026, the related accrual was fully utilized. In addition, during the fiscal year ended May 31, 2026, the Company incurred $6,771 of additional restructuring related expenses associated with these efforts, including costs related to facility closures, production consolidation, and other activities under Project 420. The Company expects these initiatives to be substantially completed by the end of fiscal 2027. 25. Interest expense, net Interest expense, net is comprised of: For the year ended May 31, 2026 2025 2024 Interest income $ 6,249 $ 11,379 $ 12,831 Interest expense (29,912 ) (41,331 ) (49,264 ) Total $ (23,663 ) $ (29,952 ) $ (36,433 ) 104 26. Non-operating (expense) income Non-operating (expense) income is comprised of: For the year ended May 31, 2026 2025 2024 Change in fair value of convertible debenture payable $ — $ — $ (19,736 ) Change in fair value of warrant liability (3,495 ) 2,161 (1,436 ) Foreign exchange gain (loss) 6,592 9,639 (4,086 ) (Loss) gain on long-term investments (4,533 ) (5,550 ) (217 ) Unrealized loss on digital assets (326 ) — — Other non-operating (losses) gains, net 392 4,034 (12,367 ) Total $ (1,370 ) $ 10,284 $ (37,842 ) Included in other non-operating (losses) gains, net for the fiscal year ended May 31, 2026, was 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 6 (capital assets), offset by a gain of $2,047 resulting from the exchange transaction of the TLRY 27 Note, as described in Note 16 (Convertible debentures payable). Included in other non-operating (losses) gains, net for the fiscal year ended May 31, 2025, were gains of $4,034 which were mainly comprised of a $5,792 gain resulting from the exchange transaction of the TLRY 27 Note, offset by a $975 loss resulting from the downside protection from the Double Diamond Holdings dividend settlement. 27. Commitments and contingencies Purchase and other commitments The Company has payments on long-term debt (refer to Note 15 Long-term debt), convertible notes (refer to Note 16 Convertible Debentures), material purchase commitments and construction commitments as follows: Total 2027 2028 2029 2030 Thereafter Long-term debt repayment $ 139,178 18,160 41,708 49,833 3,677 25,800 Convertible debentures payable 88,000 — 88,000 — — — Material purchase obligations 59,562 48,256 9,568 551 579 608 Construction commitments 663 663 — — — — Total $ 287,403 $ 67,079 $ 139,276 $ 50,384 $ 4,256 $ 26,408 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. Class Action Suits and Stockholder Derivative Suits Aphria Inc. Securities Litigation (New York, United States) On December 5, 2018, a putative securities class action was commenced in SDNY against Aphria and certain current and former officers and directors. The action claims that the defendants misrepresented the value of three cannabis-producing properties Aphria acquired in Jamaica, Colombia, and Argentina (the “LATAM Assets”). On December 3, 2018, two notorious short-sellers issued a report about the acquisitions, claiming the LATAM Assets were non-functional or non-existent, which allegedly caused Aphria’s stock price to fall. On April 15, 2019, Aphria took impairment charges on the LATAM Assets, which also allegedly caused Aphria’s stock price to decline. The putative class action claims that Aphria artificially inflated the price of its publicly-traded stock by making false statements about the LATAM Assets, and, when the purported truth was revealed by a short-seller report and write-down, the stock price declined, harming investors. On September 30, 2020, the Court denied the motion to dismiss the complaint as to Aphria, Vic Neufeld, and Carl Merton, and granted the motion as to Cole Cacciavillani, John Cervini, Andrew DeFrancesco, and SOL Global Investments. On October 1, 2020, Plaintiffs moved for reconsideration of the order dismissing DeFrancesco and SOL or, in the alternative, to amend their complaint. On October 14, 2020, Aphria, Neufeld, and Merton moved for reconsideration of the order denying their motion to dismiss. On September 28, 2021, the Court denied all motions for reconsideration and provided Plaintiffs with the opportunity to amend their complaint. Plaintiffs did not amend, and so the dismissals of Cacciavillani, Cervini, DeFrancesco, and SOL Investments became dismissals with prejudice. On January 28, 2022, Plaintiffs moved for class certification, and briefing on the motion was complete as of June 28, 2022. The motion was granted, and a class was certified. On April 12, 2024, the parties filed a revised schedule for the remainder of the proceeding through trial. As of the date of this Form 10-K, the parties have completed fact discovery. The Company and the individual defendants believe the claims are without merit and will continue to vigorously defend against them, but there can be no assurances as to the outcome. MMIRF, LLC v. Tilray Brands, Inc., et al On December 31, 2025, MMIRF, LLC filed a complaint in the Superior Court of California, Los Angeles County, against Tilray Brands, Inc., Serruya Private Equity Inc., Superhero Acquisition Corp., Superhero Acquisition L.P., Irwin Simon, Michael Serruya, and Denise Faltischek, asserting claims for breach of fiduciary duty, aiding and abetting breach of fiduciary duty, and civil conspiracy against all defendants. The plaintiff allegedly is an assignee of claims previously possessed by MM CAN USA, Inc., a former subsidiary of MedMen Enterprises, Inc. (“MedMen”). The complaint alleges that, following a series of transactions in August 2021 pursuant to which Tilray (and other investors) acquired an interest in senior secured convertible notes of MedMen through its investment in Superhero Acquisition L.P. as a limited partner (as previously disclosed in a current report filed on Form 8-K on August 17, 2021), Tilray and the other defendants gained “de facto” control over, and thereby became fiduciaries of, MedMen. The complaint further alleges that the defendants breached those purported fiduciary duties in taking certain actions that detrimentally impacted MedMen’s business, which ultimately entered bankruptcy and receivership proceedings in April 2024. The plaintiff seeks damages in excess of $1.0 billion. Tilray intends to vigorously defend against the claims asserted in the complaint. Based on the information available as of the date of this Annual Report on Form 10-K, management does not believe that a loss is probable or reasonably estimable. Legal Proceedings Related to Contractual Obligations Fotmer Corporation S.A. v. Tilray Brands Inc. et al. On January 4, 2023, Fotmer Corporation S.A. commenced an arbitration demanding $1,233 for alleged breaches by Tilray under a 2019 purchase agreement. On July 5, 2023, Tilray commenced proceedings in the Berlin Regional Court seeking $2,250 under a 2021 supply agreement, asserting that Fotmer’s alleged monetary claims under the 2019 and 2021 supply agreements are unfounded and that Fotmer owes Tilray amounts in respect of advance payments made for future deliveries, defective products, and EU GMP certification costs. On August 8, 2023, an arbitral award was issued ordering Tilray to pay Fotmer $1,233 in connection with the 2019 supply agreement. Tilray has not paid the arbitral award and has asserted that its claims against Fotmer and the issues being litigated in Germany support equitable setoff. On June 25, 2026, the Berlin Regional Court issued judgment decisively in Tilray’s favor, ordering Fotmer to pay Tilray $2,250, plus applicable interest and costs. The court also dismissed Fotmer’s counterclaim, which sought more than €11,000 in damages, in its entirety. Tilray is evaluating and pursuing available enforcement options in multiple jurisdictions. Tilray will continue to vigorously pursue enforcement of the judgment against Fotmer and defend its interests in any related proceedings. Summary of litigation accruals As described in Note 14 (Accounts payable and accrued liabilities), the total estimated litigation expense accrual included in accrued liabilities as of May 31, 2026 and May 31, 2025 was $11,931 and $12,431, respectively. During the intervening period, the accrual decreased by $410 from settled claims and decreased $90 due to a net change in the estimated likelihood of certain claim’s settlement, with the remaining change attributable to foreign exchange effects. This estimated accrual is intended to cover various ongoing litigation matters with probable losses that can be reasonably estimated. 105 28. Financial risk management and financial instruments Financial instruments The Company has classified its financial instruments as described in Note 3 (Significant accounting policies). 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. As of May 31, 2026 and May 31, 2025, the Company had long-term debt of $1,822 and $2,546, respectively, and the principal portion of convertible debentures payable of $88,000 and $105,000, respectively, subject to fixed interest rates. Fair value hierarchy Financial instruments recorded at fair value are classified using a fair value hierarchy that reflects the significance of inputs used in making the measurements. Cash and cash equivalents are Level 1. The hierarchy is summarized as follows: Level 1 Quoted prices (unadjusted) in active markets for identical assets and liabilities Level 2 Inputs that are observable for the asset or liability, either directly (prices) or indirectly (derived from prices) from observable market data Level 3 Inputs for assets and liabilities not based upon observable market data 106 The following tables present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of May 31, 2026 and 2025 and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value: May 31, Level 1 Level 2 Level 3 2026 Financial assets Cash and cash equivalents $ 225,977 $ — $ — $ 225,977 Marketable securities 5,289 — — 5,289 Equity investments measured at fair value 1,197 990 4,364 6,551 Total recurring fair value measurements $ 232,463 $ 990 $ 4,364 $ 237,817 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 fiscal year ended May 31, 2026, the Company purchased 9.16 units of Bitcoin. Digital assets recorded at fair value have quoted prices in active markets for identical assets and are classified as Level 1. The following table presents the Company’s digital asset holdings as of May 31, 2026: Quantity Cost Basis Fair Value Cumulative Unrealized Gain (Loss) Bitcoin 9.16 $ 1,000 $ 674 $ (326 ) Total digital assets 9.16 $ 1,000 $ 674 $ (326 ) Certain equity investments recorded at fair value have quoted prices in active markets for identical assets and are classified as Level 1. The Company classified securities with observable inputs as Level 2 and without a quoted market price as Level 3. As of May 31, 2026 and May 31, 2025, included within equity investment under measurement alternative is an option to acquire a 68% membership interest in SH Acquisition for $1.00 upon U.S. federal cannabis legalization valued at $4,364 and $8,160 respectively. During the fiscal year ended May 31, 2026, the fair value of this option decreased by $3,796 due to changes in the discounted cash flow model used to value the underlying business. Specifically, projected cash flows associated with retail operations were reduced to $nil as a result of restructuring activities, with the remaining valuation attributable solely to projected brand-related cash flows. A portion of the total consideration to be paid in connection with the Company’s acquisition of Montauk Brewing Company (“Montauk”) was contingent upon the achievement by Montauk of certain financial measures as of December 31, 2025. In the event that Montauk achieved either the pre-determined sales volume target or EBITDA target, then $15,000 of contingent consideration would be deemed earned and payable. If both the sales volume target and the EBITDA target were achieved, an additional $3,000 would be deemed earned and payable for a total contingent consideration payment of $18,000. For the year ended, May 31, 2025, the Company assessed the estimated value of the contingent consideration liability as $15,000, which was estimated to be achieved based on management’s forecast, applying a probability of achievement of 100% for the sales volume target and 0% on the remaining criteria, which was not expected to be achieved as EBITDA targets were not forecasted to be met. During the three months ended August 31, 2025, the Company reassessed the estimated fair value of the contingent consideration liability as $nil, based on subsequent information regarding Montauk’s operating results and revised expectations for the remainder of the earn‑out period. As a result of lower‑than‑anticipated sales volumes during the peak selling periods of June, July and August 2025, and the loss of certain national retail programs, management concluded that Montauk no longer had a viable path to achieving the sales volume target or the EBITDA target within the earn‑out period. Accordingly, the Company applied a probability of achievement of 0% to the sales volume target and 0% to the remaining criteria. The resulting $15,000 change in fair value of the contingent consideration liability was recorded within the statement of profit and loss and contributed to the Company’s net income generated during the period ended August 31, 2025, despite historically reporting a net loss. During the three months ended February 28, 2026, the earn-out period concluded and neither financial measure was achieved. Accordingly, no further changes to the fair value of the contingent consideration liability were recognized during the year ended May 31, 2026 as no contingent consideration obligation was payable. The fair value measurement was based on significant unobservable inputs related to projected operating performance and expected cash outflows and was therefore classified was a Level 3 fair value measurement. The balances of assets and liabilities categorized within Level 3 of the fair value hierarchy measured at fair value on a recurring basis are reconciled, as follows for the period ended May 31, 2026: 107 Equity Warrant Contingent Investments Liability Consideration Balance, May 31, 2025 $ 8,160 $ (1,092 ) $ (15,000 ) Unrealized gain (loss) on fair value (3,796 ) (3,495 ) 15,000 Instruments exercised — 4,587 — Balance, May 31, 2026 $ 4,364 $ — $ — The balances of assets and liabilities categorized within Level 3 of the fair value hierarchy measured at fair value on a recurring basis are reconciled, as follows for the period ended May 31, 2025: 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) (12,000 ) 8,160 — — 330 Unrealized gain (loss) on fair value — (5,500 ) 2,161 — — Impairments (20,000 ) — — — — Balance, May 31, 2025 $ — $ 8,160 $ (1,092 ) $ (15,000 ) $ — The unrealized gain (loss) on assets and liabilities categorized within Level 3 of the fair value hierarchy are recognized in the consolidated statements of loss and comprehensive loss using the following inputs: Significant Valuation unobservable Financial asset / financial liability technique input Inputs Equity investments Discounted cash flows Probability of achievement 70% Items measured at fair value on a non-recurring basis The Company's prepayments 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. 108 Financial risk management The Company has exposure to the following risks from its use of financial instruments: credit; liquidity; currency rate; interest rate price; equity price risk; and capital management risk. (a) Credit risk Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The maximum credit exposure at May 31, 2026, is the carrying amount of cash and cash equivalents, accounts receivable, prepaids and other current assets. All cash and cash equivalents are placed with major financial institutions in Canada, Australia, Portugal, Germany, Colombia, Argentina, United Kingdom and the United States. To date, the Company has not experienced any losses on its cash deposits. Accounts receivable are unsecured, and the Company does not require collateral from its customers. The Company evaluates the collectability of its accounts receivable and maintains an allowance for credit losses at an amount sufficient to absorb losses inherent in the existing accounts receivable portfolio as of the reporting dates based on the estimate of expected net credit losses. Trade receivables included an allowance for doubtful accounts and credit loss provision of $3,156 as of May 31, 2026 (2025-$3,702) and are broken out below as follows: Total 0-30 days 31-60 days 61-90 days 90+ days Accounts receivable, net $ 189,170 $ 128,759 $ 23,833 $ 27,480 $ 9,098 100 % 68 % 13 % 15 % 5 % Balance at the beginning of period Movement during the year(1) Balance at end of period Fiscal year ended May 31, 2026 Allowance for doubtful accounts and credit loss provision $ 3,702 $ (546 ) $ 3,156 Fiscal year ended May 31, 2025 Allowance for doubtful accounts and credit loss provision 7,714 (4,012 ) 3,702 Fiscal year ended May 31, 2024 Allowance for doubtful accounts and credit loss provision 6,641 1,073 7,714 (1) Included in movements for the period is the total movements for foreign exchange, additions to the provisions and utilization of the credit loss provision and allowance for doubtful accounts. (b) Liquidity risk As of May 31, 2026, the Company’s financial liabilities consisted of bank indebtedness and accounts payable and accrued liabilities, which have contractual maturity dates within one-year, as well as long-term debt and convertible debentures which have contractual maturities over the next five years. The Company maintains a minimum deposit on certain cash operating accounts tied to loans secured by its Aphria One, SweetWater, and craft beverage facilities. The Company maintains debt service charge and leverage covenants on certain loans secured by its Aphria Diamond facilities and ABC Group that are measured quarterly. The Company believes that it has sufficient operating room with respect to its financial covenants for the next fiscal year and does not anticipate being in breach of any of its financial covenants. See Note 30, (Subsequent events) for additional details. The Company manages its liquidity risk by reviewing its capital requirements on an ongoing basis. Based on the Company’s working capital position as of May 31, 2026, management regards liquidity risk to be low. (c) Currency rate risk As of May 31, 2026, a portion of the Company’s financial assets and liabilities held in Canadian dollars and Euros consist of cash and cash equivalents, and long-term investments. The Company’s objective in managing its foreign currency risk is to minimize its net exposure to foreign currency cash flows by transacting, to the greatest extent possible, with third parties in the functional currency. The Company is exposed to currency rate risk in other comprehensive income, relating to foreign subsidiaries which operate in a foreign currency. The Company does not currently use foreign exchange contracts to hedge its exposure to its foreign currency cash flows as management has determined that this risk is not significant at this point in time. 109 (d) Interest rate risk The Company’s exposure to changes in interest rates relate primarily to the Company’s outstanding debt. The Company manages interest rate risk by restricting the type of investments and varying the terms of maturity and issuers of marketable securities. Varying the terms to maturity reduces the sensitivity of the portfolio to the impact of interest rate fluctuations. (e) Capital management The Company’s objectives when managing its capital are to safeguard its ability to continue as a going concern, to meet its capital expenditures for its continued operations, and to maintain a flexible capital structure which optimizes the cost of capital within a framework of acceptable risk. The Company manages its capital structure and adjusts it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust its capital structure, the Company may issue new shares, issue new debt, or acquire or dispose of assets. The Company is not subject to externally imposed capital requirements. 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 year. The Company considers its cash and cash equivalents and marketable securities as capital. 29. 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 hemp foods and cannabidiol (“CBD”) products. 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 year ended May 31, 2026 2025 2024 Beverage Net beverage revenue $ 253,976 $ 240,595 $ 202,094 Beverage costs 162,743 147,591 113,522 Beverage gross profit 91,233 93,004 88,572 Cannabis Net cannabis revenue 268,342 249,001 272,798 Cannabis costs 161,256 150,005 182,594 Cannabis gross profit 107,086 98,996 90,204 Distribution Distribution revenue 327,244 271,228 258,740 Distribution costs 286,589 241,896 230,596 Distribution gross profit 40,655 29,332 28,144 Wellness Wellness revenue 65,892 60,485 55,310 Wellness costs 44,425 41,247 38,879 Wellness gross profit 21,467 19,238 16,431 Total Total revenue 915,454 821,309 788,942 Total costs 655,013 580,739 565,591 Total gross profit $ 260,441 $ 240,570 $ 223,351 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 year ended May 31, 2026 2025 2024 Gross profit $ 260,441 $ 240,570 $ 223,351 Operating expenses: General and administrative 203,629 167,324 167,358 Selling 49,328 56,039 37,233 Amortization 19,585 88,616 84,752 Marketing and promotion 42,290 37,048 41,933 Research and development 361 284 635 Change in fair value of contingent consideration (15,000 ) — (15,790 ) Impairment of intangible assets and goodwill — 2,096,139 — Other than temporary change in fair value of convertible notes receivable — 21,661 42,681 Litigation costs, net of recoveries 3,902 17,347 8,251 Restructuring costs 13,113 34,283 15,581 Transaction costs (income), net 6,260 4,534 15,462 Total operating expenses 323,468 2,523,275 398,096 Operating loss (63,027 ) (2,282,705 ) (174,745 ) Interest expense, net (23,663 ) (29,952 ) (36,433 ) Non-operating income (expense), net (1,370 ) 10,284 (37,842 ) Loss before income taxes (88,060 ) (2,302,373 ) (249,020 ) Income tax expense (recovery), net 17,098 (121,017 ) (26,616 ) Net loss $ (105,158 ) $ (2,181,356 ) $ (222,404 ) 110 Channels of cannabis revenue were as follows: For the year ended May 31, 2026 2025 2024 Revenue from Canadian medical cannabis $ 23,726 $ 24,998 $ 25,211 Revenue from Canadian adult-use cannabis 236,352 224,048 266,846 Revenue from wholesale cannabis 7,318 18,207 25,340 Revenue from international cannabis 84,910 63,356 53,295 Less excise taxes (83,964 ) (81,608 ) (97,894 ) Total $ 268,342 $ 249,001 $ 272,798 There was $nil of cannabis advisory services revenue for the fiscal year ended May 31, 2026, compared to $1,460 and $1,500 for the fiscal years ended May 31, 2025 and 2024, respectively. Geographic net revenue: For the year ended May 31, 2026 2025 2024 USA $ 242,390 $ 273,695 $ 233,141 Canada 215,661 212,860 243,722 EMEA 445,698 323,350 296,450 Rest of World 11,705 11,404 15,629 Total $ 915,454 $ 821,309 $ 788,942 Geographic capital assets: May 31, May 31, 2026 2025 USA $ 207,592 $ 200,003 Canada 245,799 267,458 EMEA 202,598 97,371 Rest of World 24,236 3,601 Total $ 680,225 $ 568,433 Major customers are defined as customers that each individually account for greater than 10% of the Company’s annual revenues. For the fiscal years ended May 31, 2026, 2025 and 2024, there were no major customers representing greater than 10% of our annual revenues. 30. Subsequent Events From June 1, 2026 to June 4, 2026, the Company issued an additional 639,581 shares in connection with the Company’s ATM Program, thereby generating gross proceeds of $3,528. The Company netted proceeds of $3,457 after commissions and other fees associated with these issuances in the amount of $71. From June 1, 2026 to June 24, 2026, Tilray entered into three private debt-for-equity Exchange Transactions with unrelated parties. Pursuant to the Exchange Transactions, the Company issued an aggregate of 3,852,527 shares of Common Stock in exchange for $18,000 aggregate principal amount of the TLRY 27 Notes due June 15, 2027. As a result, $70,000 of principal remains outstanding on the Company’s TLRY 27 Notes as of the date of this filing. On July 24, 2026, American Beverage Crafts Group, Inc., a wholly owned subsidiary of the Company, entered into a Sixth Amendment to Credit Agreement (the “Sixth Amendment”) with Bank of America, N.A., as administrative agent, and the lenders party thereto. The Sixth Amendment amends the Credit Agreement dated June 30, 2023 and, among other things, reflects revisions to the Company’s credit facilities, including a reduction in the revolving commitments from $25,000 to $15,000 and modifications to certain of the financial covenants. The Sixth Amendment also acknowledges a voluntary principal prepayment of $10,000 million made on May 29, 2026, and includes various amendments, consents and other provisions relating to certain corporate and financing transactions. 111 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Shareholders of Tilray Brands, Inc. Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated statements of financial position of Tilray Brands, Inc. and its subsidiaries (the Company) as of May 31, 2026 and 2025, and the related consolidated statements of loss and comprehensive loss, of changes in equity and of cash flows for the years then ended, including the related notes (collectively referred to as the consolidated financial statements). We also have audited the Company’s internal control over financial reporting as of May 31, 2026, based on criteria established in Internal Control ‒ Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of May 31, 2026 and 2025, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of May 31, 2026, based on criteria established in Internal Control ‒ Integrated Framework (2013) issued by the COSO. Basis for Opinions The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. As described in Management's Report on Internal Control over Financial Reporting, management has excluded certain business operations and assets of BrewDog plc and certain of its subsidiary undertakings (BrewDog UK I), BrewDog Brewing Australia Pty Ltd (BrewDog AUS), certain BrewDog assets in the U.S (BrewDog US), 5 BrewDog brewpubs in Scotland and England (BrewDog UK II), and the Lyphe Group (Lyphe) from its assessment of internal control over financial reporting as of May 31, 2026, because they were acquired by the Company in purchase business combinations during the year ended May 31, 2026. The business operations and assets of BrewDog UK 1, BrewDog AUS, BrewDog US, BrewDog UK II and Lyphe are wholly-owned subsidiaries whose total assets and total revenues excluded from management’s assessment and our audit of internal control over financial reporting represent 9.5%, 1.0%, 1.5%, 0.2% and 0.2% of total assets and 3.8%, 0.2%, 0.5%, o% and 0% of net revenues, respectively, of the related consolidated financial statement amounts as of and for the year ended May 31, 2026. 112 Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Qualitative Goodwill Impairment Assessment related to Cannabis Reporting Unit As described in Notes 3 and 10 to the consolidated financial statements, the Company’s goodwill balance was $752.4 million as at May 31, 2026 related to the Cannabis Reporting Unit. Goodwill is tested annually for impairment in the fourth quarter, or more frequently if events or changes in circumstances indicate that goodwill might be impaired. In the annual impairment test, the Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value (the qualitative goodwill impairment assessment). If further testing is required, the Company estimates the fair value of the reporting unit and compares it to the carrying value. Management uses significant judgment in assessing the qualitative factors to be considered in the qualitative goodwill impairment assessment, including macroeconomic factors, industry trends, cost factors, overall financial performance and the Company’s share price and resultant market value capitalization in comparison to its book value. The principal considerations for our determination that performing procedures relating to the qualitative goodwill impairment assessment related to Cannabis Reporting Unit is a critical audit matter are (i) the significant judgment by management in assessing the qualitative factors in the qualitative goodwill impairment assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value; (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating audit evidence related to management’s qualitative goodwill impairment assessment; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge in assessing the appropriateness of market data and industry trends. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s qualitative goodwill impairment assessment. These procedures also included, among others, evaluating the reasonableness of management’s qualitative goodwill impairment assessment which includes the following factors: macroeconomic factors, industry trends, cost factors, overall financial performance and the Company’s share price and resultant market value capitalization in comparison to its book value by (i) considering consistency with current and past performance of the reporting unit; (ii) considering consistency with external market and industry data; (iii) comparing share price trends and market value capitalization for the Company at various points during the year to third party market data; and (iv) considering consistency with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in evaluating the appropriateness of market data and industry trends used in the qualitative goodwill impairment assessment. 113 /s/PricewaterhouseCoopers LLP Chartered Professional Accountants, Licensed Public Accountants Toronto, Canada July 28, 2026 We have served as the Company's auditor since 2017. 114