On December 15, 2020, Tilray entered into an Arrangement Agreement (as amended, the “Arrangement Agreement” with Aphria Inc. (“Aphria”), or the “Aphria-Tilray business combination”, pursuant to which Tilray acquired all of the issued and outstanding common shares of Aphria pursuant to a plan of arrangement (the “Plan of Arrangement”) under the Ontario Business Corporations Act (the “Arrangement”) with the primary objective to increase its scalable operational footprint, expand its portfolio of diverse medical and adult-use cannabis brands and products, expand its multi-continent distribution network, and gain a robust capital structure to fund a global expansion strategy. The transaction closed on April 30, 2021 (“Closing Date”).

	April 30, 2021
Number of Tilray common shares outstanding at acquisition date		179,635,973
Conversion ratio		0.8381
Tilray common shares issued at closing		214,337,159
Market share price of Aphria converted stock units	$	14.62
Fair value of Tilray common stock transferred to Aphria shareholders		3,133,609
Consideration related to stock-based compensation ⁽¹⁾		71,297
Total fair value of consideration transferred	$	3,204,906

The Company is in the process of assessing the fair value of the net assets acquired and, as a result, the fair value of the net assets acquired may be subject to adjustments pending completion of final valuations and post-closing adjustments. The table below summarizes preliminary estimated fair value of the assets acquired and the liabilities assumed at the effective acquisition date.

	April 30, 2021
Assets
Cash and cash equivalents	$	375,673
Accounts receivable		28,054
Inventory		76,547
Prepaids and other current assets		8,960
Capital assets		136,637
Right-of-use assets, operating leases		12,606
Definite-lived intangible assets (estimated useful life)
Distribution channel (15 years)		404,000
Customer relationships (15 years)		59,000
Know how (5 years)		115,000
Brands (10 to 25 years)		301,000
Indefinite-lived intangible assets
Licenses		200,000
Goodwill		2,221,613
Other assets		22,879
Total assets		3,961,969
Liabilities
Accounts payable		62,292
Accrued expenses and other current liabilities		85,120
Accrued lease obligations		21,962
Warrant liability		79,402
Deferred tax liability		236,391
Convertible notes		267,862
Other liabilities		4,034
Total liabilities		757,063
Net assets acquired	$	3,204,906

In connection with the reverse acquisition, the Company incurred transaction costs of $42,000. The goodwill of $2,221,613 is primarily related to factors such as synergies and market share and reportable under the Company’s Cannabis and Wellness segment is as follows on a preliminary basis:

Goodwill is not deductible for tax purposes. The financial results of Tilray are included in the Company’s financial statements since acquisition date. The Consolidated Statements of Loss and Comprehensive Loss include net revenue of $13,018 and net income of $645.

The unaudited pro forma information for the periods set forth below gives effect to the reverse acquisition as if the reverse acquisition had occurred as of June 1, 2019. This pro forma information is presented for informational purposes only and is not necessarily indicative of the results of operations that actually would have been achieved had the transactions been consummated as of that time.

	Years ended May 31,
	2021			2020
Revenue	$	692,270		$	624,950
Net loss	$	(795,251	)	$	(649,276	)
Net loss per share - basic and diluted	$	(1.77	)	$	(1.71	)

The above pro forma revenue and net loss include adjustments directly attributable to the business combination and related primarily non-recurring transaction costs of $37,000, increase in intangible assets amortization expense of $28,000 and decrease in interest expense associated with Tilray’s convertible senior notes of 5,000

On November 25, 2020, the Company, through its wholly-owned subsidiary Four Twenty Corporation, completed the purchase of all the shares of SW Brewing Company, LLC which is the holding company of 100% of the common shares of SweetWater. The purchase price consisted of cash consideration of $255,543, share consideration of 8,232,810 shares, and additional cash consideration of up to $66,000 contingent on SweetWater achieving specified EBITDA targets. The fair value of the shares on the date the Company closed the acquisition was $65,889, the fair value of the contingent consideration on the date the Company closed the acquisition was $58,959.

	Amount
Consideration
Cash	$	255,543
Shares		65,889
Contingent consideration		58,959
Total consideration		380,391
Net assets acquired
Current assets
Cash and cash equivalents		6,988
Accounts receivable		3,810
Prepaids and other current assets		528
Inventory		4,815
Long-term assets
Capital assets		43,093
Customer relationships		155,000
Intellectual property, trademarks & brands		92,000
Non-compete agreements		10,000
Goodwill		100,202
Total assets		416,436
Current liabilities
Accounts payable and accrued liabilities		5,289
Current portion of lease liabilities		434
Long-term liabilities
Lease liabilities		30,322
Total liabilities		36,045
Total net assets acquired	$	380,391

The contingent consideration from the acquisition of SweetWater is a fair value measurement and as such is carried at fair value. The fair value has been determined by discounting future expected cash outflows at a discount rate of 5%. The inputs into the future expected cash outflows are level 3 on the fair value hierarchy and are subject to volatility and uncertainty, which could significantly affect the fair value of the contingent consideration in future periods. As at May 31, 2021, the fair value of the contingent consideration was $60,657, expected to be paid in December 2023. The goodwill of $102,202 is primarily related to factors such as synergies and market opportunities and reportable under the Company’s Beverage Alcohol segment.

The unaudited pro forma information for the periods set forth below gives effect to the acquisition of SW Brewing Company, LLC as if the transaction had occurred as of June 1, 2019. This pro forma information is presented for informational purposes only and is not necessarily indicative of the results of operations that actually would have been achieved had the transactions been consummated as of that time.

	Years ended May 31,
	2021			2020
Revenue	$	542,000		$	470,000
Net loss	$	(328,000	)	$	(80,000	)
Net loss per share - basic and diluted	$	(0.73	)	$	(0.37	)