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:

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.