FY2022 Net Revenue Grew 22% to $628 Million Compared to the Prior Year; On a Constant Currency Basis, Net Revenue Increased by 29%

Fourth Quarter Net Revenue Grew 8% to $153 Million Compared to the Prior Year Period; On a Constant Currency Basis, Net Revenue Increased by 14% to $163 Million

Company Expects to Generate $70-$80 Million of Adjusted EBITDA and be Free-Cash Flow Positive in Its Operating Business Units in FY2023

Foundation in Place for Profitable and Sustainable Growth

Fourth Quarter International Cannabis Increased 205% from the Prior Year Q4; Tilray Medical Leads European Medical Cannabis Market with 20% Market Share in Germany
Delivered $85 Million in Cost Savings to Date, Exceeding Original Target on Accelerated Timeline; Company Now Expects to Deliver $100 Million by the End of FY2023
Significantly Strengthened Balance Sheet, Reduced Debt, and Ended FY2022 with $416 Million in Cash
Tilray Brands Sets Stage for Next Evolution of Cannabis Following HEXO Transaction, which Positions the Company for Additional Growth Opportunities in Canada, Europe, and the U.S

NEW YORK and LEAMINGTON, Ontario, July 28, 2022 (GLOBE NEWSWIRE) -- Tilray Brands, Inc. ("Tilray" or the "Company") (NASDAQ:TLRY, TSX:TLRY), a leading global cannabis-lifestyle and consumer packaged goods company inspiring and empowering the worldwide community to live their very best life, today reported financial results for the fourth quarter and full fiscal year ended May 31, 2022. All financial information in this press release is reported in U.S. dollars, unless otherwise indicated, and presented in accordance with accounting principles generally accepted in the U.S. ("GAAP").

Irwin D. Simon, Tilray Brands' Chairman and Chief Executive Officer, stated, "Over the past year, we have accelerated the optimization of our operations and sharpened execution against our most profitable core business opportunities in medical, adult-use, wellness, and beverage-alcohol across Canada, Europe, and the U.S. At the same time, we accelerated our growth potential through tactical execution and strategic initiatives that enable accelerated revenue growth through improved cultivation, brand building, and distribution. These actions should also contribute to bottom-line performance improvement through production efficiencies and cost reductions. The outcome of this work is that we have driven top line growth across our markets, significantly improved our operating performance, and strengthened our balance sheet."

He continued, "We are confident that our proactive steps to plan for the evolution of the cannabis business in each of our markets has positioned Tilray Brands to be at the forefront of the industry on a global basis while delivering profitability and driving shareholder value."

Financial Highlights - 2022 Fiscal Fourth Quarter¹

Net revenue grew 8% to $153.3 million during the fourth quarter from $142.2 million in the prior year quarter. On a constant currency basis, net revenue increased 14.5%.
Net loss of $457.8 million during the fourth quarter compared to net income of $33.6 million in the prior year quarter. Net loss in the fiscal 2022 fourth quarter includes a non-cash impairment of $395.0 million primarily impacting inventory, goodwill and other intangible assets. The impact was related to changes in market opportunities causing a shift in our strategic priorities, and market conditions inclusive of higher rates of borrowing and lower foreign exchange rates.
Adjusted EBITDA of $11.5 million, marking the Company's 13th consecutive quarter of positive Adjusted EBITDA.

Financial Highlights- 2022 Fiscal Year

Net revenue increased 22% to $628.4 million during fiscal 2022 from $513.1 million in the prior fiscal year. The increase was driven by 17.9% growth in cannabis net revenue to $237.5 million, a 150.0% increase in beverage alcohol net revenue of $71.5 million, and a 928.8% increase in wellness net revenue to $59.6 million. On a constant currency basis, net revenue increased by 29%.
Net loss of $434 million in fiscal 2022 includes the non-cash impairment of $395.0 million in the fourth quarter (discussed above).
Adjusted EBITDA increased 17.8% to $48.0 million in fiscal year 2022 from $40.8 million in the prior fiscal year.
Ended the year with a strong balance sheet and liquidity, including cash and cash equivalents of $415.9 million.

Cost-Saving Synergies and Strengthened Balance Sheet

Since the closing of the Tilray-Aphria transaction, the Company has delivered $85 million in cost synergies, exceeding its original target of delivering $80 million of cost savings by the end of fiscal year 2023. These synergies are due to consolidation in key areas of cultivation and production, cannabis and product purchasing, sales and marketing, and corporate expenses. The Company has subsequently identified an additional $20 million of savings, and now expects to deliver a total of $100 million in cost synergies from the transaction by the end of fiscal year 2023.

Further, with the benefit of an additional $80 million of shared cost savings, synergies and financial benefits over the next two years associated with the HEXO transaction, management expects that Tilray Brands will be free cash flow positive in its business units in fiscal year 2023.

Upside Potential of HEXO Transaction

Tilray Brands' acquisition of HEXO Corp.'s senior secured convertible note, on highly favorable terms, closed on July 12, 2022, bringing immediate accretion to the Company and facilitating collaboration and the sharing of best practices that will help Tilray Brands to drive ongoing international expansion and take advantage of the opportunities expected to come with federal legalization in the U.S. In addition, due to significant operating efficiencies, the companies expect to deliver a total of $80 million of shared cost savings over the next two years.

Highlights of Strategic Growth Actions in Fiscal 2022

United States:

August '21 - Tilray Acquires Majority Position in Amended MedMen Convertible Notes
November '21 - Tilray's SweetWater Brand Enters Spirits Category Through New Ready-To-Drink Cocktail Now Available in the United States
December '21 - Tilray Strengthens Strategic Position in the U.S. with Acquisition of Breckenridge Distillery
December '21 - SweetWater Brewing announced the acquisition of Alpine Beer Company and Green Flash Brewing Company
January '22 – Manitoba Harvest Launches 2022 Wellness Boost Campaign
February '22 - SweetWater Brewing Company Expands Distribution Across California
February '22 - SweetWater Brewing Company Continues Rapid Expansion with Distribution Rollout Across Washington & Oregon
April '22 - SweetWater Brewing Company celebrated 25^th anniversary and hosted 420 music Festival in Atlanta, Georgia with 75 thousand festival goers
April '22 - Manitoba Harvest Enters Exclusive Partnership with Whole Foods Market
April '22 - Breckenridge Distillery Takes Home Two Double Gold and One Gold Medal at the 2022 San Francisco World Spirits Competition
April '22 – Breckenridge Distillery Launches New Collectors Art Series with Denver Artist Alexandrea Pangburn

Canada:

June '21 - Tilray Launches New Medical Cannabis Brand, Symbios
June '21 - Tilray Launches Canadian Craft Cannabis Brand, Broken Coast, in the U.S. with Broken Coast Lager
August '21 – Tilray Medical Launches New Medical Cannabis Edibles in Canada
October '21 - Tilray Strengthens Leadership Position in Canada with new addition of Blair MacNeil, President of Canada
October '21 - Tilray Expands Distribution across Canada with Great North Distributors
December '21 - Launch of Tilray's Fast-Acting Oral Strips Highlights Commitment to Medical Cannabis Innovation and Patient Care
March '22 - Good Supply Brand Expands Its Award-Winning Cannabis Portfolio with Hash Bats™; A New ‘Hard-Hitting' Infused Pre-Roll
March '22 - Solei Brand Launches New Wellness Product for Nighttime Use
April '22 - Solei Brand Launches the First Cannabis Edible Available in Quebec
April '22 - Tilray Brands hosts sold-out ‘Holy Smokes' 420 Budtender event in Toronto
May '22 - Good Supply Brand Expands High-Potency Cannabis Portfolio with Launch of Liquid Wax Vapes and New Exclusive Strains

Europe and International:

July '21 – Tilray's Aphria RX GmbH Completes First Harvest and Delivery of Medical Cannabis Grown in Germany
October '21 – Tilray Launches Medical Cannabis in Luxembourg
November '21 - Tilray Expands Medical Cannabis Footprint in Malta
January '22 - Tilray Expands Medical Cannabis Product Offering in Australia
February ‘22 - Tilray Brands Consolidates its Global Medical Offering into Tilray Medical, a Comprehensive Portfolio of Brands and Products
February '22 - Tilray Launches Medical Cannabis Products in Malta
March '22 - Tilray Medical Expands Offering in Malta and Launches First Medical Cannabis Oil Products in Market
May '22 - Announced the launch of CBD lifestyle brand, POLLEN, on Amazon UK

Webcast

Tilray Brands will host a webcast to discuss these results today at 8:30 a.m. ET. Investors may join the live webcast available on the Investors section of the Company's website at www.tilray.com. The webcast will also be archived after the call concludes.

About Tilray Brands

Tilray Brands, Inc. (NASDAQ:TLRY, TSX:TLRY), is a leading global cannabis-lifestyle and consumer packaged goods company with operations in Canada, the United States, Europe, Australia, and Latin America that is changing people's lives for the better – one person at a time. Tilray Brands delivers on this mission by inspiring and empowering the worldwide community to live their very best life, enhanced by moments of connection and wellbeing. Patients and consumers trust Tilray Brands to be the most responsible, trusted and market leading cannabis consumer products company in the world with a portfolio of innovative, high-quality and beloved brands that address the needs of the consumers, customers and patients we serve. A pioneer in cannabis research, cultivation, and distribution, Tilray Brands' unprecedented production platform supports over 20 brands in over 20 countries, including comprehensive cannabis offerings, hemp-based foods, and craft beverages.

For more information on Tilray Brands, visit www.Tilray.com and follow @Tilray

Cautionary Statement Concerning Forward-Looking Statements

Certain statements in this press release constitute forward-looking information or forward-looking statements (together, "forward-looking statements") under Canadian securities laws and within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are intended to be subject to the "safe harbor" created by those sections and other applicable laws. Forward-looking statements can be identified by words such as "forecast," "future," "should," "could," "enable," "potential," "contemplate," "believe," "anticipate," "estimate," "plan," "expect," "intend," "may," "project," "will," "would" and the negative of these terms or similar expressions, although not all forward-looking statements contain these identifying words. Certain material factors, estimates, goals, projections or assumptions were used in drawing the conclusions contained in the forward-looking statements throughout this communication.

Forward-looking statements include statements regarding our intentions, beliefs, projections, outlook, analyses or current expectations concerning, among other things: the Company's ability to become the world's leading cannabis-focused consumer branded company and achieve $4B in revenue by the end of fiscal 2024; the Company's ability to generate $70-$80 million of Adjusted EBITDA and expectation to be free-cash flow positive in its operating business units in FY 2023; the Company's ability to achieve operational scale, market share, distribution, profitability and revenue growth in particular markets, including in Canada, the U.S. and the EU; and the Company's ability to successfully achieve the expected production efficiencies, synergies and cost savings relating to the HEXO transactions and agreed commercial arrangements; and the Company's anticipated investments, including in organic and strategic growth, partnership efforts, product offerings and other initiatives.

Many factors could cause actual results, performance or achievement to be materially different from any forward-looking statements, and other risks and uncertainties not presently known to the Company or that the Company deems immaterial could also cause actual results or events to differ materially from those expressed in the forward-looking statements contained herein. For a more detailed discussion of these risks and other factors, see the most recently filed annual information form of the Company and the Annual Report on Form 10-K (and other periodic reports filed with the SEC) of the Company made with the SEC and available on EDGAR. The forward-looking statements included in this communication are made as of the date of this communication and the Company does not undertake any obligation to publicly update such forward-looking statements to reflect new information, subsequent events or otherwise unless required by applicable securities laws.

Use of Non-U.S. GAAP Financial Measures

This press release and the accompanying tables include non-GAAP financial measures, including adjusted gross margin, Adjusted EBITDA and free cash flow. Management believes that the non-GAAP financial measures presented provide useful additional information to investors about current trends in the Company's operations and are useful for period-over-period comparisons of operations. These non-GAAP financial measures should not be considered in isolation or as a substitute for the comparable GAAP measures. In addition, these non-GAAP measures may not be the same as similar measures provided by other companies due to potential differences in methods of calculation and items being excluded. They should be read only in connection with the Company's Consolidated Statements of Operations and Cash Flows presented in accordance with GAAP.

Certain forward-looking non-GAAP financial measures included in this press release are not reconciled to the comparable forward-looking GAAP financial measures. The Company is not able to reconcile these forward-looking non-GAAP financial measures to their most directly comparable forward-looking GAAP financial measures without unreasonable efforts because the Company is unable to predict with a reasonable degree of certainty the type and extent of certain items that would be expected to impact GAAP measures but would not impact the non-GAAP measures. Such items may include litigation and related expenses, transaction costs, impairments, foreign exchange movements and other items. The unavailable information could have a significant impact on the Company's GAAP financial results.

The Company believes presenting net sales at constant currency provides useful information to investors because it provides transparency to underlying performance in the Company's consolidated net sales by excluding the effect that foreign currency exchange rate fluctuations have on period-to-period comparability given the volatility in foreign currency exchange markets. To present this information for historical periods, current period net sales for entities reporting in currencies other than the U.S. dollar are translated into U.S. dollars at the average monthly exchange rates in effect during the corresponding period of the prior fiscal year, rather than at the actual average monthly exchange rate in effect during the current period of the current fiscal year. As a result, the foreign currency impact is equal to the current year results in local currencies multiplied by the change in average foreign currency exchange rate between the current fiscal period and the corresponding period of the prior fiscal year.

Adjusted EBITDA is calculated as net income (loss) before inventory valuation adjustments; interest expenses, net; other expenses (income), net; deferred income tax (recoveries) expenses, current income tax expenses (benefit); foreign exchange gain (loss), net; depreciation and amortization expenses; stock-based compensation expenses; loss from equity method investments; loss on disposal of property and equipment; amortization of inventory step-up; severance costs; impairment of assets; and change in fair value of warrant liability. A reconciliation of Adjusted EBITDA to net loss, the most directly comparable GAAP measure, has been provided in the financial statement tables included below in this press release. Gross margin, excluding inventory valuation adjustments, is calculated as revenue less cost of sales adjusted to add back inventory valuation adjustments and amortization of inventory step-up, divided by revenue. A reconciliation of Gross margin, excluding inventory valuation adjustments, to gross margin, the most directly comparable GAAP measure, has been provided in the financial statement tables included below in this press release. Free cash flow is comprised of two GAAP measures deducted from each other which are net cash flow provided by (used in) operating activities less investments in capital and intangible assets. A reconciliation of net cash flow provided by (used in) operating activities to free cash flow, the most directly comparable GAAP measure, has been provided in the financial statement tables included below in this press release.

For further information:

Media: Berrin Noorata, news@tilray.com

Investors: Raphael Gross, +1-203-682-8253, Raphael.Gross@icrinc.com

¹ This press release includes certain non-GAAP financial measures, which are intended to supplement, not substitute for, comparable GAAP financial measures. Reconciliations of non-GAAP financial measures to GAAP financial measures and other non-GAAP financial calculations are provided herein in the tables.

Consolidated Statements of Financial Position

(In thousands of United States dollars)	May 31, 2022			May 31, 2021
Assets
Current assets
Cash and cash equivalents	$	415,909		$	488,466
Accounts receivable, net		95,279			87,309
Inventory		245,529			256,429
Prepaids and other current assets		46,786			48,920
Current portion of convertible notes receivable		—			2,485
Total current assets		803,503			883,609
Capital assets		587,499			650,698
Right-of-use assets		12,996			18,267
Intangible assets		1,277,875			1,605,918
Goodwill		2,641,305			2,832,794
Interest in equity investees		4,952			8,106
Long-term investments		10,050			17,685
Convertible notes receivable		111,200			—
Other assets		314			8,285
Total assets	$	5,449,694		$	6,025,362
Liabilities
Current liabilities
Bank indebtedness	$	18,123		$	8,717
Accounts payable and accrued liabilities		157,431			212,813
Contingent consideration		16,007			60,657
Warrant liability		14,255			78,168
Current portion of lease liabilities		6,703			4,264
Current portion of long-term debt		67,823			36,622
Total current liabilities		280,342			401,241
Lease liabilities		11,329			53,946
Long-term debt		117,879			167,486
Convertible debentures		401,949			667,624
Deferred tax liabilities, net		196,638			265,845
Other liabilities		191			3,907
Total liabilities		1,008,328			1,560,049
Commitments and contingencies (refer to Note 17)
Stockholders' equity
Common stock ($0.0001 par value; 990,000,000 shares authorized; 532,674,887 and 446,440,641 shares issued and outstanding, respectively)		53			46
Additional paid-in capital		5,382,367			4,792,406
Accumulated other comprehensive (deficit) income (loss)		(20,764	)		152,668
Accumulated deficit		(962,851	)		(486,050	)
Total Tilray Brands, Inc. stockholders' equity		4,398,805			4,459,070
Non-controlling interests		42,561			6,243
Total stockholders' equity		4,441,366			4,465,313
Total liabilities and stockholders' equity	$	5,449,694		$	6,025,362

Condensed Consolidated Statements of Net Income (Loss) and Comprehensive Income (Loss)

(In thousands of United States dollars, excpet for per share data)	For the three months ended May 31,						For the year ended May 31,
		2022			2021			2022			2021
Net revenue	$	153,325		$	142,236		$	628,372		$	513,085
Cost of goods sold		160,058			119,738			511,555			389,903
Gross profit		(6,733	)		22,498			116,817			123,182
Operating expenses:
General and administrative		41,400			32,839			162,801			111,575
Selling		9,643			8,525			34,926			26,576
Amortization		30,846			16,100			115,191			35,221
Marketing and promotion		10,771			5,103			30,934			17,539
Research and development		54			358			1,518			830
Change in fair value of contingent consideration		(15,585	)		—			(44,650	)		—
Impairment		378,241			—			378,241			—
Litigation costs		4,099			2,099			16,518			3,251
Transaction costs		1,221			31,161			31,739			60,361
Total operating expenses		460,690			96,185			727,218			255,353
Operating loss		(467,423	)		(73,687	)		(610,401	)		(132,171	)
Interest expense, net		(5,522	)		(9,466	)		(27,944	)		(27,977	)
Non-operating income (expense), net		11,342			121,510			197,671			(184,838	)
Loss before income taxes		(461,603	)		38,357			(440,674	)		(344,986	)
Income taxes (recovery)		(3,803	)		4,735			(6,542	)		(8,972	)
Net loss	$	(457,800	)	$	33,622		$	(434,132	)	$	(336,014	)
Net loss per share - basic and diluted	$	(0.90	)	$	0.38		$	(0.90	)	$	(1.25	)

Net Revenue by Operating Segment

(In thousands of United States dollars)	Year Ended May 31, 2022		% of Total Revenue		Year Ended May 31, 2022		% of Total Revenue
Cannabis business	$	237,522	38	%	$	201,392	39	%
Distribution business		259,747	42	%		277,300	54	%
Beverage alcohol business		71,492	11	%		28,599	6	%
Wellness business		59,611	9	%		5,794	1	%
Net revenue	$	628,372	100	%	$	513,085	100	%



(In thousands of United States dollars)	Three months ended May 31, 2022		% of Total Revenue		Three months ended May 31, 2021		% of Total Revenue
Cannabis business	$	53,253	35	%	$	53,703	38	%
Distribution business		61,160	39	%		66,792	47	%
Beverage alcohol business		22,727	15	%		15,947	11	%
Wellness business		16,185	11	%		5,794	4	%
Net revenue	$	153,325	100	%	$	142,236	100	%

Net Cannabis Revenue by Market Channel

(In thousands of United States dollars)	For the year ended May 31,					For the year ended May 31,
(In thousands of United States dollars)		2022		2022			2021		2021
Revenue from Canadian medical cannabis products	$	30,599		13	%	$	25,539		13	%
Revenue from Canadian adult-use cannabis products		209,501		88	%		222,930		110	%
Revenue from wholesale cannabis products		6,904		3	%		6,615		3	%
Revenue from international cannabis products		53,887		23	%		9,250		5	%
Less excise taxes		(63,369	)	-27	%		(62,942	)	-31	%
Total	$	237,522		100	%	$	201,392		100	%



	For the three months ended May 31,					For the three months ended May 31,
(In thousands of United States dollars)		2022		2022			2021		2021
Revenue from Canadian medical cannabis products	$	7,246		14	%	$	6,968		13	%
Revenue from Canadian adult-use cannabis products		46,869		88	%		59,710		111	%
Revenue from wholesale cannabis products		141		0	%		56		0	%
Revenue from international cannabis products		14,095		26	%		4,623		9	%
Less excise taxes		(15,098	)	-28	%		(17,654	)	-33	%
Total	$	53,253		100	%	$	53,703		100	%

Gross Margin and Adjusted Gross Margin

(In thousands of United States dollars)	For the year ended May 31, 2022
	Cannabis			Beverage			Distribution			Wellness			Total
Revenue	$	300,891		$	74,959		$	259,747		$	59,611		$	695,208
Excise taxes		(63,369	)		(3,467	)		—			—			(66,836	)
Net revenue		237,522			71,492			259,747			59,611			628,372
Cost of goods sold		194,834			32,033			243,231			41,457			511,555
Gross profit		42,688			39,459			16,516			18,154			116,817
Gross margin		18.0	%		55.2	%		6.4	%		30.5	%		18.6	%
Adjustments:
Inventory valuation adjustments		59,500			—			7,500			—			67,000
Purchase price accounting step-up		—			2,214			—			—			2,214
Adjusted gross profit		102,188			41,673			24,016			18,154			186,031
Adjusted gross margin		43.0	%		58.3	%		9.2	%		30.5	%		29.6	%

(In thousands of United States dollars)	For the year ended May 31, 2021
	Cannabis			Beverage			Distribution			Wellness			Total
Revenue	$	264,334		$	29,661		$	277,300		$	5,794		$	577,089
Excise taxes		(62,942	)		(1,062	)		—			—			(64,004	)
Net revenue		201,392			28,599			277,300			5,794			513,085
Cost of goods sold		130,511			12,687			242,472			4,233			389,903
Gross profit		70,881			15,912			34,828			1,561			123,182
Gross margin		35.2	%		55.6	%		12.6	%		26.9	%		24.0	%
Adjustments:
Inventory valuation adjustments		19,919			—			—			—			19,919
Purchase price accounting step-up		—			835			—			—			835
Adjusted gross profit		90,800			16,747			34,828			1,561			143,936
Adjusted gross margin		45.1	%		58.6	%		12.6	%		26.9	%		28.1	%

(In thousands of United States dollars)	For the three months ended May 31, 2022
	Cannabis			Beverage			Distribution			Wellness			Total
Revenue	$	68,351		$	23,459		$	61,160		$	16,185		$	169,155
Excise taxes		(15,098	)		(732	)		—			—			(15,830	)
Net revenue		53,253			22,727			61,160			16,185			153,325
Cost of goods sold		72,342			11,359			65,138			11,219			160,058
Gross profit		(19,089	)		11,368			(3,978	)		4,966			(6,733	)
Gross margin		-35.8	%		50.0	%		-6.5	%		30.7	%		-4.4	%
Adjustments:
Inventory valuation adjustments		47,500			—			7,500			—			55,000
Purchase price accounting step-up		—			2,214			—			—			2,214
Adjusted gross profit		28,411			13,582			3,522			4,966			50,481
Adjusted gross margin		53.4	%		59.8	%		5.8	%		30.7	%		32.9	%

(In thousands of United States dollars)	For the three months ended May 31, 2021
	Cannabis			Beverage			Distribution			Wellness			Total
Revenue	$	71,357		$	16,549		$	66,792		$	5,794		$	160,492
Excise taxes		(17,654	)		(602	)		—			—			(18,256	)
Net revenue		53,703			15,947			66,792			5,794			142,236
Cost of goods sold		49,731			5,350			60,424			4,233			119,738
Gross profit		3,972			10,597			6,368			1,561			22,498
Gross margin		7.4	%		66.5	%		9.5	%		26.9	%		15.8	%
Adjustments:
Inventory valuation adjustments		19,919			—			—			—			19,919
Purchase price accounting step-up		—			835			—			—			835
Adjusted gross profit		23,891			11,432			6,368			1,561			43,252
Adjusted gross margin		44.5	%		71.7	%		9.5	%		26.9	%		30.4	%

Adjusted Earnings before Interest, Taxes, and Amortization


(In thousands of United States dollars)	Three months ended May 31,						Year ended May 31,
Adjusted EBITDA reconciliation:		2022			2021			2022			2021
Net loss	$	(457,800	)	$	33,622		$	(434,132	)	$	(336,014	)
Income taxes		(3,803	)		4,735			(6,542	)		(8,972	)
Interest expense, net		5,522			9,466			27,944			27,977
Non-operating expense (income), net		(11,350	)		(121,510	)		(197,671	)		184,838
Amortization		40,768			24,540			154,592			67,832
Stock-based compensation		8,969			5,937			35,994			17,351
Change in fair value of contingent consideration		(15,577	)		—			(44,650	)		—
Impairment		378,241			—			378,241			—
Inventory valuation adjustments		55,000			19,919			67,000			19,919
Purchase price accounting step up		2,214			835			2,214			835
Facility start-up and closure costs		3,300			2,056			13,700			2,056
Lease expense		700			335			3,100			1,337
Litigation costs		4,099			2,099			16,518			3,251
Transaction costs		1,221			31,161			31,739			60,361
Adjusted EBITDA	$	11,504		$	13,195		$	48,047		$	40,771

Key Operating Metrics



	For the three months ended May 31,						For the years ended May 31,
(In thousands of United States dollars)		2022			2021			2022			2021
Net cannabis revenue	$	53,253		$	53,703		$	237,522		$	201,392
Net beverage alcohol revenue		22,727			15,947			71,492			28,599
Distribution revenue		61,160			66,792			259,747			277,300
Wellness revenue		16,185			5,794			59,611			5,794
Cannabis cost of sales		72,342			49,731			194,834			130,511
Beverage alcohol cost of sales		11,359			5,350			32,033			12,687
Distribution cost of sales		65,138			60,424			243,231			242,472
Wellness cost of sales		11,219			4,233			41,457			4,233
Gross profit (excluding inventory valuation adjustments and step-up)		50,481			43,252			186,031			143,936
Cannabis gross margin (excluding inventory valuation adjustments and step-up)		53.4	%		44.5	%		43.0	%		45.1	%
Beverage gross margin (excluding inventory valuation adjustments and step-up)		59.8	%		71.7	%		58.3	%		58.6	%
Distribution gross margin (excluding inventory valuation adjustments and step-up)		5.8	%		9.5	%		9.2	%		12.6	%
Wellness gross margin (excluding inventory valuation adjustments and step-up)		30.7	%		26.9	%		30.5	%		26.9	%
Adjusted EBITDA		11,504			13,195			48,047			40,771
Cash and cash equivalents		415,909			488,466			415,909			488,466
Working capital		523,161			479,883			523,161			482,368

Tilray Brands, Inc. Reports Record Fiscal Year 2022 Results