XML 32 R15.htm IDEA: XBRL DOCUMENT
v3.24.2

Note 9 - Business Acquisitions | 12 Months Ended
--- | ---
May 31, 2024
Notes to Financial Statements |
Business Combination Disclosure [Text Block] |
9. | Business Acquisitions
Acquisition of Montauk Brewing Company, Inc. On November 7, 2022, Tilray acquired Montauk Brewing Company, Inc. (“Montauk”), a leading craft brewer based in Montauk, New York, which expanded our distribution network with a strong brand in the tri-state region of the U.S. In consideration for the acquisition of Montauk, and after giving effect to post-closing adjustments, the Company paid an aggregate purchase price equal to $35,123, which was comprised of $ 28,701 in cash and the remainder through the issuance of 1,708,521 shares of Tilray's common stock (having a value of $6,422 at closing). In the event that Montauk achieves certain volume and/or EBITDA targets on or before December 31, 2025, the stockholders of Montauk shall be eligible to receive additional contingent cash consideration of up to $18,000. The Company determined that the closing date fair value of this contingent consideration was $10,245 based on the inputs disclosed in Note 29 (Financial risk management and financial instruments). The table below summarizes the fair value of the assets acquired and liabilities assumed at the acquisition date:
|  | Amount |
Consideration |  |  |  |
Cash |  | $ | 28,701 |
Shares |  |  | 6,422 |
Contingent consideration |  |  | 10,245 |
Net assets acquired |  |  |  |
Current assets |  |  |  |
Cash and cash equivalents |  |  | 1,983 |
Accounts receivable |  |  | 1,116 |
Prepaids and other current assets |  |  | 467 |
Inventory |  |  | 1,570 |
Long-term assets |  |  |  |
Capital assets |  |  | 420 |
Customer relationships (15 years) |  |  | 18,540 |
Intellectual property, trademarks & brands (15 years) |  |  | 13,650 |
Goodwill |  |  | 17,803 |
Total assets |  |  | 55,549 |
Current liabilities |  |  |  |
Accounts payable and accrued liabilities |  |  | 1,580 |
Long-term liabilities |  |  |  |
Deferred tax liability |  |  | 4,851 |
Other liabilities |  |  | 3,750 |
Total liabilities |  |  | 10,181 |
Total net assets acquired |  | $ | 45,368 |
In the event that the Montauk acquisition had occurred on June 1, 2022, the Company would have had additional net revenue of approximately $nil and $12,100 for the year ended May 31, 2024 and 2023 respectively, and its consolidated net loss and comprehensive net loss would have increased by approximately $nil and $1,100 for the year ended May 31, 2024 and 2023, respectively, primarily as a result of amortization of the intangible assets acquired. This unaudited pro forma financial information does not reflect the realization of any expected ongoing synergies relating to the integration of Montauk. Acquisition of HEXO Corp. On June 22, 2023, Tilray acquired HEXO, a cannabis company in Canada (the “HEXO Acquisition”) for the purpose of expanding the Company’s revenue base, production capabilities around certain form factors and growth opportunities with the Redecan brand. In consideration for the HEXO Acquisition, the Company paid a total purchase price equivalent of $93,882, which consisted of stock consideration of $63,927, settlement of convertible notes receivable of $28,720, the fair value of HEXO stock-based compensation of $1,188 and the assumption of warrants with exercise prices that are out-of-the-money. In connection with the HEXO Acquisition, each outstanding HEXO common share was exchanged for 0.4352 of a share of Tilray common stock and each outstanding HEXO preferred share was exchanged for 0.7805 of a share of Tilray common stock. In the aggregate, the Company issued 39,705,962 shares of Tilray common stock, at a share price of $1.61 per share, in connection with the HEXO Acquisition. The Company intends to sell HEXO's Kirkland lake property and the Quebec cultivation facility, and has recorded the value of the associated capital assets as assets held for sale, see Note 6 (Capital assets). The table below summarizes the fair value of the assets acquired and liabilities assumed at the acquisition date:
|  | Amount |
Consideration |  |  |  |
Shares |  | $ | 63,927 |
Settlement of convertible notes receivable |  |  | 28,720 |
Warrants assumed |  |  | 47 |
Estimated fair value of HEXO stock-based compensation |  |  | 1,188 |
Net assets acquired |  |  |  |
Current assets |  |  |  |
Cash and cash equivalents |  |  | 14,634 |
Restricted cash |  |  | 1,656 |
Accounts receivable |  |  | 7,855 |
Asset held for sale |  |  | 755 |
Prepaids and other current assets |  |  | 2,709 |
Inventory |  |  | 24,122 |
Long-term assets |  |  |  |
Prepaid expenses |  |  | 8,384 |
Capital assets |  |  | 70,634 |
Intellectual property, trademarks & brands (15 years) |  |  | 4,505 |
Interest in equity investee |  |  | 3,145 |
Total assets |  |  | 138,399 |
Current liabilities |  |  |  |
Accounts payable and accrued liabilities |  |  | 44,517 |
Total liabilities |  |  | 44,517 |
Total net assets acquired |  | $ | 93,882 |
Included in accounts payable and accrued liabilities was $12,253 of litigation settlement accruals as of June 22, 2023. In the event the HEXO Acquisition had occurred on June 1, 2022, the Company would have had, on an unaudited proforma basis, additional net revenue of approximately $7,000 for the year ended May 31, 2024 and $78,000 for the year ended May 31, 2023, and its net loss and comprehensive net loss would have increased by approximately $1,800 for the year ended May 31, 2024, and $199,000 for the year ended May 31, 2023, respectively. This unaudited pro forma financial information does not reflect the realization of any expected ongoing synergies relating to the integration of HEXO. Acquisition of Truss Beverage Co. On August 3, 2023, Tilray acquired the remaining 57.5% equity interest in Truss Beverage Co. ("Truss"), a cannabis beverage company, from Molson Coors Canada ("Molson"). This purchase represents the equity portion of Truss that had not been previously acquired as part of the HEXO Acquisition. The consideration paid by Tilray consisted of $74 (CAD$100) in cash and contingent consideration fair valued at $4,181. During the year ended May 31, 2024, the contingent consideration liability was settled in exchange for a final payment equal to $760 with the resultant gain of $3,683 recorded in change in fair value of contingent consideration, offset by $262 of foreign exchange. Tilray initially planned to divest Truss' assets and recorded the value of the associated capital assets and lease obligations as an asset held for sale. During the quarter ended November 30, 2023, due to a change in circumstance in the Company's ability to sell these assets, they were subsequently reclassified as capital assets as the Company has made alternative plans for their utilization. The Company subsequently shifted production of Truss beverages to one of our existing facilities to maximize existing capacity utilization rates .The asset was 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 were recorded in the consolidated statement of net loss and comprehensive loss as amortization in cost of goods sold. During the quarter ended May 31, 2024, the Company sold Truss Beverage Co. to a third party but the Company continues to retain liability for all of Truss's pre-closing contingent obligations. The table below summarizes the fair value of the assets acquired and the liabilities assumed at the acquisition date:
|  | Amount |
Consideration |  |  |  |
Cash consideration |  | $ | 74 |
Investment in equity investees |  |  | 3,145 |
Contingent consideration |  |  | 4,181 |
Net assets acquired |  |  |  |
Current assets |  |  |  |
Cash and cash equivalents |  |  | 6,739 |
Accounts receivable |  |  | 1,038 |
Prepaids and other current assets |  |  | 78 |
Inventory |  |  | 2,573 |
Asset held for sale |  |  | 2,960 |
Long-term assets |  |  |  |
Intangible assets |  |  | 296 |
Total assets |  |  | 13,684 |
Current liabilities |  |  |  |
Accounts payable and accrued liabilities |  |  | 5,408 |
Other liabilities |  |  | 876 |
Total liabilities |  |  | 6,284 |
Total net assets acquired |  | $ | 7,400 |
In the event that the Truss acquisition had occurred on June 1, 2022 the Company would have had, on an unaudited proforma basis, additional net revenue of approximately $3,000 for the year ended May 31, 2024, and $16,100 for the year ended May 31, 2023, and its consolidated net loss and comprehensive net loss would have increased by approximately $700 for the year ended May 31, 2024, and $48,800 for the year ended May 31, 2023. Acquisition of Craft Beverage Business Portfolio On September 29, 2023, Tilray acquired a portfolio of craft brands, assets and businesses comprising eight beer and beverage brands from Anheuser-Busch Companies, LLC, ("AB") including breweries and brewpubs associated with them (the “Craft Acquisition”). The acquired businesses/brands include Shock Top, Breckenridge Brewery, Blue Point Brewing Company, 10 Barrel Brewing Company, Redhook Brewery, Widmer Brothers Brewing, Square Mile Cider Company, and HiBall Energy. The Company paid a total purchase price equivalent of $83,658 in cash, net of a preliminary working capital adjustment at closing of $1,342, which was subject to a final working capital adjustment. As described in Note 16 (Long-term debt), $20,000 was borrowed under the ABC Group Delayed Draw Term Loan Agreement to fund part of the purchase price paid for the Craft Acquisition. 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 Craft Acquisition at the effective acquisition date as follows:
|  | Amount |
Consideration |  |  |  |
Cash consideration |  | $ | 83,658 |
Net assets acquired |  |  |  |
Current assets |  |  |  |
Cash and cash equivalents |  |  | 77 |
Inventory |  |  | 21,493 |
Prepaids and other current assets |  |  | 573 |
Long-term assets |  |  |  |
Capital assets |  |  | 76,114 |
Finance lease, right-of-use assets |  |  | 45,496 |
Operating lease, right-of-use assets |  |  | 7,677 |
Other assets |  |  | 108 |
Total assets |  |  | 151,538 |
Current liabilities |  |  |  |
Accounts payable and accrued liabilities |  |  | 14,706 |
Current portion of finance lease liabilities |  |  | 1,031 |
Current portion of operating lease liabilities |  |  | 1,408 |
Long - term liabilities |  |  |  |
Finance lease liabilities |  |  | 44,465 |
Operating lease liabilities |  |  | 6,270 |
Total liabilities |  |  | 67,880 |
Total net assets acquired |  | $ | 83,658 |
In the event that the Craft Acquisition had occurred on June 1, 2022, the Company would have had, on an unaudited proforma basis, additional revenue of approximately $55,000 for the year ended May 31, 2024, and $155,000 for the year ended May 31, 2023, and its net loss and comprehensive net loss would have increased by approximately $5,000 for the year ended May 31, 2024, and $2,400 for the year ended May 31, 2023. This unaudited pro forma financial information does not reflect the realization of any expected ongoing synergies relating to the integration of the Craft Acquisition.

X
- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 805 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479907/805-20-50-5 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/805/tableOfContent + Details
Name: | us-gaap_BusinessCombinationDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_DisclosureTextBlockAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration