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Note 12 - Convertible Debentures Payable | 3 Months Ended
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Aug. 31, 2025
Notes to Financial Statements |
Convertible Debentures [Text Block] | Note 12. Convertible debentures payable The following table sets forth the net carrying amount of the convertible debentures payable:
|  | August 31, |  |  | May 31, |
|  | 2025 |  |  | 2025 |
5.20% Convertible Notes ("TLRY 27") |  | $ | 84,267 |  |  | $ | 86,428 |
Deduct - current portion |  |  | — |  |  |  | — |
Total convertible debentures payable, non current portion |  | $ | 84,267 |  |  | $ | 86,428 |
TLRY 27 Notes
|  | August 31, |  |  | May 31, |
|  | 2025 |  |  | 2025 |
5.20% Contractual debenture |  | $ | 172,500 |  |  | $ | 172,500 |
Debt settlement |  |  | (72,500 | ) |  |  | (67,500 | )
Unamortized discount |  |  | (15,733 | ) |  |  | (18,572 | )
Net carrying amount |  | $ | 84,267 |  |  | $ | 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 376.6478 shares per $1,000 principal amount of TLRY 27 Notes, which represents a conversion price of approximately $2.66 per share. The conversion rate and conversion price will be subject to adjustment upon the occurrence of certain events. The TLRY 27 Notes are now 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 38,500,000 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 38,500,000 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. During the three months ended August 31, 2025, the Company exchanged an aggregate $5,000 of its TLRY 27 Notes for cancellation, by issuing 12,591,816 shares of Common Stock and paying $6 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 $1,158 reduction of additional paid-in capital in the Consolidated Statements of Stockholders’ Equity. Additionally, this repurchase resulted in a gain of $495 which was recorded in other non-operating (losses) gains, net as shown in Note 23 (Non-operating income (expense)). Following consummation of the exchange, the number of outstanding Borrowed Shares of Common Stock was reduced by 1,209,696 shares which were then returned as Treasury Stock. As of August 31, 2025 and May 31, 2025, a total of 22,318,841 and 23,434,783 shares remained outstanding under the share lending arrangement, respectively. During the three months ended August 31, 2025, the Company recognized interest expense of $1,367 and accretion of amortized discount interest of $1,976. During the three months ended August 31, 2024, the Company recognized interest expense of $2,243 and accretion of amortized discount interest of $3,067. As of August 31, 2025, there was $100,000 principal outstanding compared to $105,000 principal outstanding as of May 31, 2025 under the TLRY 27 Notes.

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