SEDAR Interim Financial Statements

Red White & Bloom Brands Inc. Condensed Interim Consolidated Financial Statements For the periods ended March 31, 2025, and 2024 Filed October 1, 2025 CSE: RWB Page | 2 RED WHITE & BLOOM BRANDS, INC. MANAGEMENT RESPONSIBILITY FOR FINANCIAL REPORTING To the Shareholders of Red White & Bloom Brands Inc.: Management is responsible for the preparation and presentation of the accompanying Condensed Interim Consolidated Financial Statements, including responsibility for significant accounting judgments and estimates in accordance with International Financial Reporting Standards. This responsibility includes selecting appropriate accounting principles and methods and making decisions affecting the measurement of transactions in which objective judgment is required. In discharging its responsibilities for the integrity and fairness of the Condensed Interim Consolidated Financial Statements, management designs and maintains the necessary accounting systems and related internal controls to provide reasonable assurance that transactions are authorized, assets are safeguarded, and financial records are properly maintained to provide reliable information for the preparation of the Condensed Interim Consolidated Financial Statements. The Board of Directors is responsible for overseeing management in the performance of its financial reporting responsibilities. The Board has the responsibility of meeting with management and external auditors to discuss the internal controls over the financial reporting process, auditing matters and financial reporting issues. The Board is also responsible for recommending the appointment of the Company's external auditors. October 1, 2025 /s/ “Brad Rogers” Director /s/ “Colby De Zen” Director Page | 3 TABLE OF CONTENTS PAGE Management’s Responsibility for Financial Reporting ................................................................. 1 Independent Registered Public Accounting Firm Report ............................................................. 2 Consolidated Statements of Financial Position ............................................................................ 4 Consolidated Statements of Loss and Comprehensive Loss ......................................................... 5 Consolidated Statements of Changes in Shareholders’ Equity ..................................................... 6 Consolidated Statements of Cash Flows ...................................................................................... 7 Notes to the Condensed Interim Consolidated Financial Statements............................................8 Page | 4 RED WHITE & BLOOM BRANDS, INC. CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (In thousands of Canadian Dollars, except number of shares and per share amounts) Notes As at 31-Mar-25 As at 31-Dec-24 $ $ Current assets Cash and cash equivalents 8 5,083 7,285 Accounts receivable 9 16,394 16,112 Notes receivable 10 13,150 11,397 Prepaid expenses 11 2,184 1,993 Deposits 12 9,577 11,186 Inventory 13 44,734 47,556 Biological assets 14 1,482 1,728 Assets held for Sale 15 13,279 13,192 Other current assets - 957 913 Total current assets 106,841 111,362 Non-current assets Property, plant and equipment, net 16 42,970 43,644 Intangible assets, net 17 100,623 100,709 Right-of-use assets, net 18 17,842 17,976 Long-term notes receivables 10 4,438 4,439 Investments 7 2,479 2,479 Goodwill 17 13,769 13,782 Other non-current assets - 1,312 - Total non-current assets 183,433 183,029 Total assets 29 --- 0,274 294,391 Liabilities and Shareholders’ Equity Current liabilities Accounts payable and accrued liabilities 21 33,413 24,074 Short-term notes payable 22 3,047 207,419 Short-term convertible notes 22 4,558 45,187 Short-term lease obligations 18 786 701 Income taxes payable - 19,750 18,313 Liabilities held for Sale 15 16,472 46,199 Other current liabilities - 1,185 1,140 Total current liabilities 79,211 343,033 Non-current liabilities Long-term lease obligations 18 22,191 22,028 Long-term convertible notes 22 45,239 44,071 Long-term notes payable 22 290,606 39,157 Deferred tax liability - 18,698 19,009 Other non-current liabilities - 123 122 Total non-current liabilities 376,857 124,387 Total liabilities 456,068 467,420 Shareholders' equity Share capital 23 342,111 342,111 Contributed surplus - 17,336 17,315 Cumulative translation adjustment - (21,318) (21,888) Accumulated deficit - (503,072) (511,134) Non-controlling interest 27 (851) 567 Total shareholders' equity (deficit) (166,794) (173,029) Total liabilities and shareholders' equity 290,274 294,391 Nature of operations and going concern (note 1) Segmented results (note 30) Reclassifications (note 33) Subsequent events (note 34) Commitments and contingencies (note 29) Approved by the Board /s/ “Brad Rogers” Director /s/ “Colby De Zen” Director The accompanying notes are an integral part of these Condensed Interim Consolidated Financial Statements Page | 5 RED WHITE & BLOOM BRANDS, INC. CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS (In thousands of Canadian Dollars, except number of shares and per share amounts) Notes 3 months ended 31-Mar-25 3 months ended 31-Mar-24 $ $ Revenue Sales revenue 25 19,192 19,534 Cost of goods sold, before fair value adjustments - 11,889 12,694 Gross Profit before fair market value adjustments 7,303 6,840 Unrealized changes in fair value of biological assets 13 174 (3,067) Realized fair value amounts included in inventory sold - (3,197) (933) Gross profit after fair market value adjustments 4,280 2,840 Operating Expenses General and administration 26 6,461 6,400 Marketing expenses - 1,295 1,207 Share-based compensation 23 21 50 Depreciation 16 611 962 Bad debt expense 9 606 1,488 Total Operating Expenses 8,994 10,107 Loss from operations before other expenses (income) (4,714) (7,267) Other expense (income) Interest earned on promissory notes 22 (724) (209) Other income - (5,803) (660) Finance expense - 37 179 Accreted interest on convertible notes 22 - 1,281 Accreted interest on promissory notes 22 - 82 Accreted interest, leases 18 687 636 Interest on credit facilities 22 - 586 Interest on convertible notes 22 1,715 1,445 Interest on promissory notes 22 8,141 5,666 Acquisition costs 7 5 112 Business transaction costs - 39 38 Loss on disposal of assets 16 235 Gain on valuation of financial instruments 22 - (145) Loss on debt extinguishment 22 - 100 Gain on settlement of debt 22 - (636) (Gain) loss on investments 7 340 (7,645) Foreign exchange - 204 (4,092) Total other expenses (income) 4,641 (3,027) Loss before income taxes (9,355) (4,240) Current income tax expense - (2,145) (899) Deferred income tax recovery - 295 343 Net loss from continuing operations (11,205) (4,796) Profit (loss) from discontinued operations 32 17,849 (1,295) Net profit (loss) for the period 6,644 (6,091) Translation adjustment - (570) 9,358 Net income and Comprehensive income 6,074 3,267 Net loss attributable to: Shareholders (9,787) (2,912) Non-controlling interests (1, --- 418) (1,884) Net loss and comprehensive loss attributable to: Shareholders 8,062 (4,206) Non-controlling interests (1,418) (1,885) Net loss per share, basic and diluted (0.02) (0.01) Weighted average number of outstanding common shares, basic and diluted 470,221,901 469,521,901 The accompanying notes are an integral part of these Condensed Interim Consolidated Financial Statements. Page | 6 RED WHITE & BLOOM BRANDS, INC. CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (In thousands of Canadian Dollars, except number of shares and per share amounts) 3 months ended 31-Mar-24 Common Shares Common Shares Non-Controlling Interests Contributed surplus Cumulative translation adjustment Accumulated Deficit Total equity # $ $ $ $ $ $ Balance, January 1, 2024 470,221,901 342,111 7,450 17,120 2,970 (484,920) (115,269) Stock based compensation (note 23) - - - 50 - - 50 Currency translation adjustments - - - - (24,965) - (24,965) Net loss from continuing operations - - (4,242) - - (9,786) (14,028) Net loss from discontinued operations (note 32) - - - - - 17,850 17,850 Balance, March 31, 2024 470,221,901 342,111 3,208 17,170 (21,995) (476,856) (136,362) 3 months ended 31-Mar-25 Common Shares Common Shares Non-Controlling Interests Contributed surplus Cumulative translation adjustment Accumulated Deficit Total equity # $ $ $ $ $ $ Balance, January 1, 2025 470,221,901 342,111 567 17,315 (21,888) (511,134) (173,029) Stock based compensation (note 23) - - - 21 - - 21 Currency translation adjustments - - - - 570 - 570 Net loss from continuing operations - - (1,418) - - (9,787) (11,205) Net loss from discontinued operations (note 32) - - - - - 17,850 17,850 Balance, March 31, 2025 470,221,901 342,111 (851) 17,336 (21,318) (503,072) (165,794) The accompanying notes are an integral part of these Condensed Interim Consolidated Financial Statements. Page | 7 RED WHITE & BLOOM BRANDS, INC. CONDENSED INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS (In thousands of Canadian Dollars, except number of shares and per share amounts) Notes 3 months ended 31-Mar-25 3 months ended 31-Mar-24 $ $ Cash flow from operating activities: Net loss for the period 6,644 (6,091) Items not involving cash (466) 7,802 Changes in non-cash working capital items: Accounts receivable 9 (288) 3,639 Prepaid expenses 11 (193) 1,294 Deposits 12 1,606 (937) Inventory 13 (401) (4,793) Biological Assets 14 420 (1,040) Accounts payable and accrued liabilities 21 (11,298) (3,070) Current Income tax payable - 1,454 997 Deferred income taxes - (296) (776) Other assets - 260 421 Other liabilities - 30 1,525 Net cash provided by (used in) operating activities (2,528) (1,029) Cash flows from investing activities Acquisition of property, plant and equipment in held for sale 15 (2,185) (123) Acquisition of right-of-use assets 18 (312) (190) Advances on notes receivable 10 (1,614) - Interest receipts on notes receivable 10 71 - Principal receipts on notes receivable 10 500 - Acquisition of Aleafia - 1,009 Net cash provided by (used in) investing activities (3,540) 696 Cash flow from financing activities: Advances on notes payable 22 4,373 7,688 Interest payments on notes payable 22 (88) (263) Principal payments on notes payable 22 (529) (27) Addition to leases 18 313 190 Principal payments on lease obligations 18 (44) (104) Interest payments on lease obligations 18 (687) (636) Net cash provided by (used in) financing activities 3,338 6,848 Foreign exchange affecting cash equivalents 528 (5,295) C --- hange in cash during the period 8 (2,202) 1,220 Cash equivalents, beginning of year 8 7,285 2,251 Cash, end of period 5,083 3,471 The accompanying notes are an integral part of these Condensed Interim Consolidated Financial Statements RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 8 1. NATURE OF OPERATIONS AND GOING CONCERN Red White & Bloom Brands Inc., (the "Company" or "RWB") is publicly traded, with its common shares currently trading on the Canadian Securities Exchange (the “CSE”) under the trading symbol "RWB". The Company was incorporated on March 12, 1980, pursuant to the Business Corporations Act, British Columbia, with its registered office located at 1890-1075 West Georgia Street, Vancouver, British Columbia, V6E 3C9. RWB is a multi-jurisdictional, vertically integrated cannabis operator with a presence in established legal markets across the United States, Canada, and international territories. The Company's core business activities include: 1. United States Distribution: Production and distribution of a diverse portfolio of premium cannabis products sold to licensed cannabis retailers in Michigan and California through established retailer networks. 2. Canadian Distribution: Vertically integrated cultivation, production, and distribution facilitating sales of premium medical (wholesale) and recreational cannabis products for both adult-use and medical purposes under a portfolio of distinct brands in Canada including Platinum Vape. 3. International Distribution: Wholesale distribution of cannabis biomass to licensed retailers in legal state within the European Union. 4. Retail Operations: As of the filing date of these Financial Statements, six (6) licensed medical and adult-use cannabis dispensaries in Michigan and Florida in addition to an online, subscription based medical dispensary platform servicing thousands of patients throughout Canada. 5. Brand Licensing: Extension of brand presence through arm’s length licensing of flagship Platinum and Platinum Vape product lines in multiple US states. The Condensed Interim Consolidated Financial Statements for the period ended March 31, 2025, and 2024 (the “Financial Statements”) have been prepared under the assumption of a going concern, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. As at March 31, 2025, the Company incurred accumulated net comprehensive losses of $503,072, (2024; $511,134) since inception, including non-cash impairments of $257,897 realized in fiscal years 2021 through 2023. For the three months ended March 31, 2025, the Company incurred net income and other comprehensive income of $6,074 (March 31, 2024; $3,267), including the impact of unrealized foreign exchange losses on intercompany balances amounting to $196 (2024; $6,865). These unrealized foreign exchange losses arise from the translation of intercompany monetary balances denominated in foreign currencies between the Company's various subsidiaries with different functional currencies. Under IAS 21, The Effects of Changes in Foreign Exchange Rates, exchange differences arising on intercompany monetary items between entities with different functional currencies are recognized in profit or loss and are not eliminated on consolidation, as they --- represent genuine economic exposure to foreign currency fluctuations. The working capital (current assets less current liabilities) as at March 31, 2025, was $27,630 (December 31, 2024; $231,671 working capital deficit). Net cash used in operations was $2,528 (March 31, 2024; $1,029). The Company has traditionally relied on debt and equity financing to support operations. Due to current challenges in global cannabis capital markets, access to financing remains limited, potentially impacting the Company's ability to sustain operations, invest in growth initiatives, or meet debt obligations. The Company recently negotiated favorable terms with key lenders to renew and restructure maturing debt (note 22), providing additional cash flow availability. However, if further funding is not accessible, it could lead to material changes in operational activities. In evaluating going concern appropriateness, the Company considered all relevant information for the twelve-month period following this report. The Company is actively pursuing strategies including securing financing through existing or prospective debt resources, monetizing tangible assets, and reducing operating costs through streamlined operations. There can be no assurance the Company will achieve profitability. If going concern were not appropriate, adjustments to carrying values of assets and liabilities, reported expenses, and statement classifications would be necessary and could be material. RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 9 2. BASIS OF PRESENTATION A. STATEMENT OF COMPLIANCE The Company's Financial Statements have been prepared in accordance with and using accounting policies consistent with International Financial Reporting Standards ("IFRS"), as issued by the International Accounting Standards Board ("IASB") and the interpretations of the IFRS Interpretations Committee ("IFRIC"), effective for the Company's reporting for the periods ended March 31, 2025, and 2024. Certain comparative amounts have been reclassified to conform with the current year presentation due to Pharmaco Inc. (“Pharmaco”), a wholly owned subsidiary of Red White & Bloom Brands Inc., being classified as discontinued operations. On December 26, 2024, a court-appointed receiver was authorized to manage and divest Pharmaco's assets following loan defaults. The business operations of Pharmaco no longer aligned with the strategic objectives of the Company The following amounts have been reclassified from continuing operations to discontinued operations (note 31) for all periods presented: • Assets and liabilities of the discontinued subsidiaries have been reclassified and presented separately as assets and liabilities held for sale in the consolidated statement of financial position. • Revenues and expenses of the discontinued subsidiaries have been removed from their respective line items in the consolidated statements of profit and loss and presented separately as discontinued operations. • Cash flows of the discontinued subsidiaries have been separately disclosed as discontinued operations in the consolidated statements of cash flows. Other than the above referenced reclassifications, there are no other material changes to the comparative periods originally presented in the Interim Condensed Consolidated Financial --- Statements for the three months and six months ended June 30, 2024, filed August 29, 2024. Refer to note 33 for details of amounts reclassified in the comparative period. These Financial Statements were authorized for issuance by the Company's Board of Directors and Audit Committee on October 1, 2025. B. BASIS OF MEASUREMENT These Financial Statements have been prepared on a historical cost basis except for biological assets and certain financial instruments classified as fair value through profit or loss, which are measured at fair value (note 6). In addition, these Financial Statements have been prepared using the accrual basis of accounting, except for cash flow information. C. FUNCTIONAL AND PRESENTATION CURRENCY All figures presented in these Financial Statements are reflected in thousands (‘000’s) of Canadian dollars, unless otherwise noted; Canadian dollars being the functional currency of the Company. Foreign currency transactions and translation into Canadian dollars is computed in accordance with the Company’s foreign currency and foreign currency translation accounting policies found in note 6. Functional currencies of subsidiaries included in these Financial Statements can be found in note 3. RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 10 3. BASIS OF CONSOLIDATION SUBSIDIARIES Subsidiaries are those entities which the Company has power over the investee, is exposed to or has rights to variable returns from its involvement with an investee and has the ability to affect these returns through its power over the investee. The Company has applied the full consolidation method for entities that meet the criteria for consolidation. Consequently, all significant balances and effects of any transactions taking place between them have been eliminated in the consolidation process. If necessary, adjustments are made to the financial statements of the subsidiaries to adapt the accounting policies used to those used by the Company. Subsidiaries with controlling interest within these Financial Statements include the following: Subsidiary Source Currency Jurisdiction % Ownership As at 31-Mar-25 % Ownership As at 31-Dec-24 Continuing Operations Red White & Bloom Brands Inc. (Parent) CAD British Columbia, Canada 100% 100% 1RWB (PV) Canada, Inc. CAD Alberta and Ontario, Canada 100% 100% RWB Licensing Inc. CAD British Columbia, Canada 100% 100% 2Aleafia Inc. CAD Ontario, Canada 100% 100% 2Aleafia Farms Inc. CAD Ontario, Canada 100% 100% 2Aleafia Retail Inc. CAD Ontario, Canada 100% 100% 2Canabo Medical Corporation CAD Ontario, Canada 100% 100% 2Emblem Cannabis Corporation CAD Ontario, Canada 100% 100% 2Growwise Health Ltd. CAD Ontario, Canada 100% 100% 3Emblem Lands LP CAD Ontario, Canada 100% 100% 4Emblem Lands GP CAD Ontario, Canada 100% 100% MichiCann Medical Inc. CAD Ontario, Canada 100% 100% PV CBD, LLC USD California, United States 100% 100% 5RWB California, Inc. USD California, United States 100% 100% RWB Platinum Vape Inc. USD California, United States 100% 100% RWB Florida, LLC USD Florida, United States 77% 77% Red White & Bloom Florida, Inc. USD Florida, United States 77% 77% 6Red White & Bloom Michigan (2024), Inc. USD Michigan, United States 100% 100% RWB Michigan LLC USD Michigan, United States 100% 100% RWB (PV) Licensing, LLC USD Nevada, United --- States 100% 100% Discontinued Operations Vista Prime Management, LLC USD California, United States 100% 100% 7Vista Prime 3, Inc. USD California, United States 100% 100% 8Vista Prime 2, Inc. USD California, United States 100% 100% Mid-American Growers, Inc. USD Delaware, United States 100% 100% Pharmaco, Inc. USD Michigan, United States 100% 100% RLTY USA Corp. USD Delaware, United States 100% 100% RWB Illinois, Inc. USD Delaware, United States 100% 100% Real World Business Integration, LLC USD Illinois, United States 100% 100% 9GC Ventures 2, LLC USD Michigan, United States 100% 100% 1Incorporated March 7, 2023 2Acquired January 12, 2024 (note 7) 3 Established April 29, 2024 4Incorporated April 29, 2024 5Incorporated February 7, 2023 6 Incorporated December 17, 2024 7 Dissolved November 6, 2024 8 Dissolved November 6, 2024 9 Dissolved November 19, 2024 RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 11 4. ACCOUNTING PRONOUNCEMENTS A. ACCOUNTING PRONOUNCEMENTS RECENTLY ADOPTED Amendments to IAS 1 Presentation of Financial Statements (“IAS 1”) In January 2020, the IASB issued an amendment to IAS 1, which affects the presentation of liabilities in the statement of financial position and not the amount or timing of their recognition. The amendments clarify that the classification of liabilities as current or non-current should be based on rights that are in existence at the end of the reporting period and align the wording in all affected paragraphs to refer to the right to defer settlement by at least twelve (12) months. That classification is unaffected by the likelihood that an entity will exercise its deferral right. The amendments were effective for annual periods beginning on or after January 1, 2023, and are to be applied retrospectively. In October 2022, the IASB issued another amendment to IAS 1, which affects the classification of liabilities as current or non-current, clarifying requirements for the classification of liabilities as non-current which is effective for annual periods beginning on or after January 1, 2024. The amendments do not have a material impact on the Financial Statements. Amendments to Amendments to IAS 7 and IFRS 7 Supplier Finance Arrangements (“IAS 7”) On 25 May 2023, the IASB issued Supplier Finance Arrangements to add disclosure requirements, and ‘signposts’ within existing disclosure requirements, that ask entities to provide qualitative and quantitative information about supplier finance arrangements. The amendments are effective for reporting periods beginning on or after 1 January 2024. The amendments do not have a material impact on the Financial Statements. Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors (“IAS 8”) In February 2021, the IASB issued “Definition of Accounting Estimates,” which amends IAS 8. The amendment replaces the definition of accounting estimates. Under the new definition, accounting estimates are “monetary amounts in financial statements that are subject to measurement uncertainty.” The amendment provides clarification to help entities distinguish between accounting policies and accounting estimates. The amendments are effective for annual reporting periods beginning on or after January 1, 2023. The amendments do not have a material impact on the Financial Statem --- ents. Amendments to IFRS 16, Lease liability in a Sale and Leaseback The amendment specifies the requirements that a seller-lessee should use in measuring the lease liability arising in a sale and leaseback transaction to ensure the seller-lessee does not recognize any amount of the gain or loss that relates to the right of use it retains that is effective for annual periods beginning on or after January 1, 2024. The Company is currently evaluating the potential impact of these amendments on the Company’s Financial Statements. The amendments do not have an impact on the Financial Statements. Amendments to IAS 1, Non-current Liabilities with Covenants In October 2022, the IASB issued amendments to IAS 1, which specifies that covenants whose compliance is assessed after the reporting date do not affect the classification of debt as a current or non-current at the reporting date. Instead, the amendment requires disclosure of information about these covenants in the notes to the financials statements. The amendments are effective for annual reporting periods belonging to January 1, 2024, with early adoption permitted. B. STANDARDS, AMENDMENTS, AND INTERPRETATIONS NOT YET EFFECTIVE New and amended accounting standards are effective for the Company for annual periods beginning on or after January 1, 2025, and earlier application is permitted. The Company has not early adopted new or amended standards in preparing these Financial Statements. The Company has not yet determined the impact of these amendments on its Financial Statements. The following are relevant new and amended standards under review by the Company. Amendments to IAS 21, Lack of Exchangeability On 15 August 2023, the IASB issued Lack of Exchangeability to provide guidance to specify when a currency is exchangeable and how to determine the exchange rate when it is not. The amendments are effective for reporting periods beginning on or after January 1, 2025. New standard, IFRS 18 Presentation and Disclosures in Financial Statements replacing IAS 1 'Presentation of Financial Statements. The IASB has published its new standard IFRS 18 ‘Presentation and Disclosures in Financial Statements' that will replace IAS 1 'Presentation of Financial Statements'. The new standard is the result of the so-called primary financial statements project, which aims at improving how entities communicate in their financial statements and will be effective for annual periods beginning on or after January 1, 2027. RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 12 5. CRITICAL ASSUMPTIONS AND SOURCES OF UNCERTAINITY The preparation of these Financial Statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, revenues, and expenses. Actual results may differ from these estimates. Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. Significant estimates and judgments used in the preparation of these Finan --- cial Statements are described in note 5 of the Company’s most recently filed Audited Consolidated Financial Statements for the year ended December 31, 2024, which can be found on the Company’s profile on Sedar+. 6. MATERIAL ACCOUNTING POLICIES The accounting policies adopted in these Financial Statements are consistent with those followed in preparation of the Company’s most recently filed Audited Consolidated Financial Statements for the year ended December 31, 2024, which can be found on Sedar+, which were prepared in accordance with IFRS as issued by the IASB. 7. ACQUISITIONS ALEAFIA ACQUISITION On January 12, 2024 (the “Acquisition Date”), the Company, through its subsidiary RWB (PV) Canada, Inc., acquired 100% of a newly created class of common shares of Emblem Cannabis Corporation ("ECC"), Canabo Medical Corporation ("CMC"), and Aleafia Retail Inc. ("ARI") (collectively, the "Purchased Entities"). This acquisition (the "Aleafia Acquisition") was executed in connection with proceedings under the Companies' Creditors Arrangement Act (the "CCAA Proceedings") involving Aleafia Health Inc. and certain of its subsidiaries (collectively, the "Aleafia Group"). Upon completion of the Aleafia Acquisition, the Company became the sole shareholder of the Purchased Entities and their respective subsidiaries. The total consideration for the Aleafia Acquisition was $30,565, comprising: • $24,195 through the release of debt obligations payable by the Aleafia Group under the AH Note Receivable and the AH DIP Note (refer to Note 10); and • $6,370 in cash consideration, funded through a combination of existing cash reserves held by the Purchased Entities and a drawdown under the Company's CAD RGR Grid Note (refer to Note 22). These funds were allocated to discharge outstanding obligations under a pre-existing credit agreement and to finance closing costs and post-closing expenses incurred by the Monitor and respective legal counsel. All identifiable net assets held by the Purchase Entities, including inventory, biological assets, property, plant and equipment, investments, intangible assets and goodwill, have been recorded at their respective fair market values as assessed on Acquisition Date. RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 13 The purchase price allocation for the Aleafia Acquisition is as follows: $ AH DIP Note allocated to purchase of shares 7,241 AH Note Receivable allocated to purchase of shares 16,954 Cash consideration 6,370 Total consideration 30,565 Identifiable assets (liabilities) acquired Cash and equivalents 1,009 Receivables 2,230 Prepaids and deposits 1,722 Inventory 7,267 Biological assets 692 Land 11,700 Property, plant and equipment 9,686 Right of use assets 36 Intangible assets 4,681 Investments 1,837 Payables (2,360) Taxes payable (72) Accrued liabilities (843) Other payables (65) Lease obligations (41) Total identifiable net assets 37,479 Excess consideration over net identifiable assets (6,914) Total consideration 30,565 During the three months ended March 31, 2024, the Company expensed $112 in acquisition costs relating to the Aleafia Acquisition. Revenue of the Purchased Entities post-acquisition for the three months ended March 31, 2024, amounted to $3,591 and net loss totalled $1,551. If the Aleafia Acquisition had closed on Janu --- ary 1, 2024, for the three months ended March 31, 2024, the Company estimates it would have recorded revenue of $22,618 and a net income of $15,583, resulting in an increase in revenue of $532 and a decrease in net loss of $16,975 for three months ended March 31, 2024. During the year ended December 31, 2024, the Company completed its reassessment of the purchase price allocation related to the Aleafia Transaction. This reassessment resulted in the following adjustments to the fair values of acquired assets: • An increase of $267 in inventory • A decrease of $444 in biological assets • A decrease of $554 in investments These purchase price allocation adjustments resulted in a corresponding adjustment to the bargain purchase gain initially recorded. The bargain purchase gain decreased from $7,645, as previously reported in the Company's interim consolidated financial statements for the three and six months ended June 30, 2024, to $6,914, representing a net reduction of $700. The reassessment was completed within the measurement period as prescribed under IFRS 3, Business Combinations, and reflects management's refined estimates of the fair values of the acquired assets based on additional information obtained subsequent to the acquisition date. RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 14 8. CASH AND EQUIVALENTS Cash as at March 31, 2025, and December 31, 2024, includes the following: As at 31-Mar-25 As at 31-Dec-24 $ $ Cash in bank 4,525 6,622 Cash on hand 123 116 Cash in transit 206 229 Restricted cash 229 318 Total cash 5,083 7,285 • Cash on Hand: Comprised of currency maintained at retail locations and petty cash funds utilized for immediate operational requirements. • Cash in Bank: Represents balances held in deposit accounts at the Company's authorized financial institutions. • Cash in Transit: Consists of retail location deposits in the process of being transferred to the Company's financial institution accounts. These deposits typically require twenty-four to forty-eight hours to be recognized and credited to the Company's accounts. • Restricted Cash: Includes funds held in a non-redeemable 12-month guaranteed investment certificate ("GIC") maturing on August 29, 2025. This GIC bears an effective interest rate of 4.41% with monthly compounding. The Company received cash advances throughout the year under the CAD and USD RGR Grid Note (note 22). Net proceeds from these advances are included in cash and cash equivalents as at March 31, 2025. 9. ACCOUNTS RECEIVABLE The Company's trade accounts receivable are incurred as a result of sales through its Distribution and Licensing segments. The Company extends credit terms to customers at its sole discretion based on the customers’ creditworthiness. The Company’s typical credit terms, for customers who have met the Company’s creditworthiness criteria particular to their business attributes, range between 15 and 60 days. As at March 31, 2025, and December 31, 2024, accounts receivable consists of the following: As at 31-Mar-25 As at 31-Dec-24 $ $ Trade receivables 21,320 22,466 Sales tax recoverable 1,208 1,106 Other receivables 3,221 1,726 Total receivables before expected credit losses 25,749 25,298 Provision for expected credit losses (9,355) (9,186) Ending Balance 16,394 16,112 Sales tax recoverable --- represents input tax credits on purchased goods or services. The Company assessed the carrying amount of trade receivables at March 31, 2025, for expected credit loss (“ECL”) and included an ECL of $9,355 (2024; $9,186) against receivables. In the period ended March 31, 2025, the Company expensed $606 to ECL and bad debt expense on its condensed interim consolidated statement of loss and other comprehensive loss (2024; $1,488). RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 15 The aging of the Company’s trade receivables and the corresponding ECL as at March 31, 2025, is as follows: Rate of expected credit loss: 0.59% 7.35% 11.84% 14.34% 16.19% 83.41% Total Aging classification Current 1-30 Days 31-60 Days 61-90 Days 91-120 Days 121+ Days $ $ $ $ $ $ $ Trade receivables 6,392 1,959 1,022 2,238 624 7,856 20,091 Expected credit losses – trade receivables (38) (144) (121) (321) (101) (6,553) (7,278) Net trade receivables 6,354 1,815 901 1,917 523 1,303 12,813 Sales tax recoverable 1,208 Other receivables 3,221 Expected credit losses – other receivables (848) Provision for credit disputes - Balance, March 31, 2025 16,394 The aging of the Company’s trade receivables and the corresponding ECL as at December 31, 2024, is as follows: Rate of expected credit loss: 0.98% 17.13% 9.41% 28.06% 25.00% 81.54% Total Aging classification Current 1-30 Days 31-60 Days 61-90 Days 91-120 Days 121+ Days $ $ $ $ $ $ $ Trade Receivables 6,492 3,399 593 1,804 771 9,407 22,466 Expected Credit Losses (33) (141) (96) (215) (239) (7,587) (8,311) Net Trade Receivables 6,459 3,258 497 1,589 532 1,820 14,155 Sales tax recoverable 1,106 Other receivables 1,726 Expected credit losses – other receivables (679) Provision for credit disputes (196) Balance, December 31, 2024 16,112 The Company does not include sales tax recoverable within its ECL calculations as management deems this as fully collectible as of the date of these Financial Statements. RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 16 NOTES RECEIVABLE Continuity of the outstanding notes receivable owed to the Company as at March 31, 2025, is as follows: Balance, 01-Jan-25 Additions Accrued Interest Interest Payments Principal Payments FX (Gain)/Loss Balance, 31-Mar-25 OPRC Note 3,000 - 60 (40) - - 3,020 PD Note 12,093 1,281 643 - (455) (13) 13,549 KMI Note 743 333 20 (31) (45) (1) 1,019 Total 15,836 1,614 723 (71) (500) (14) 17,588 Short-term 11,397 13,150 Long-term 4,439 4,438 Continuity of the outstanding notes receivable owed to the Company as at December 31, 2024, is as follows: Balance, 01-Jan-24 Additions Accrued interest Accreted Interest Interest Payments Principal Payments Acquisitions FX (Gain)/Loss Balance, 31-Dec-24 AH Note 16,778 - 117 59 - - (16,954) - - AH DIP Note 7,927 7,330 33 - - - (15,290) - - OPRC Note - 3,000 149 - (149) - - - 3,000 PD Note - 10,973 805 - - (149) - 464 12,093 KMI Note - 724 19 - - - - - 743 Total 24,705 22,027 1,123 59 (149) (149) (32,244) 464 15,836 Short-term 24,705 11,397 Long-term - 4,439 AH Note Receivable The AH Note was established as part of the Company's strategy to acquire the entities purchased in t --- he Aleafia transaction detailed in note 7. The AH Note Receivable carried a coupon interest rate of prime plus 9% per annum, matured on December 24, 2023, and was subsequently extended to January 12, 2024, with an additional 5% per annum triggered on the outstanding loan balance due to default provisions. Up to January 12, 2024, the Company accrued interest of $118 and amortized $59 of the purchase price discount to other income on its condensed interim consolidated statement of loss and other comprehensive loss. On January 12, 2024, as part of the consideration paid for the Aleafia Acquisition (note 7), the Company released all remaining amounts outstanding and obligations payable under the AH Note Receivable totaling $16,953, resulting in full settlement of the note. Additional background information is available in the Company's audited financial statements for the year ended December 31, 2024, found on Sedar+. RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 17 AH DIP Note The AH DIP Note was established as part of the Company's strategy to acquire the entities purchased in the Aleafia transaction detailed in note 7. The AH DIP Note provided debtor-in-possession financing to fund the Aleafia CCAA Proceedings and other short- term working capital requirements of up to $6,600, subsequently increased to $8,000. Interest on the principal outstanding was 12.5% per annum, compounded and calculated weekly and added to the principal amount on the first day of each month. On execution, a commitment fee of $198 was payable by Aleafia representing 3% of the maximum financing available under the terms of the AH DIP Note. Up to January 12, 2024, the Company advanced $7,330 under the AH DIP Note and accrued $32 in related interest income to other income on the condensed interim consolidated statement of profit and loss and other comprehensive profit and loss. On January 12, 2024, the Company acquired Aleafia trademarks and tradenames as a $1,679 reduction to the obligations payable under the AH DIP Note and released the remaining $7,241 outstanding as part of the consideration paid for the Aleafia Acquisition (note 7), rendering the AH DIP Note settled and paid in full. Additional background information is available in the Company's audited financial statements for the year ended December 31, 2024, found on Sedar+. PD Note On May 15, 2024, the Company extended a US$8,000 revolving line of credit note to a Michigan cultivation operation (the “Borrower”) bearing interest at 20% per annum to facilitate an arm’s length crop commitment that will serve to reduce the cost of raw material (cannabis biomass) inputs used in the Company’s finished goods sold in the state of Michigan. The note matures on May 15, 2027, and allows for borrowing, repayment, and reborrowing of principal up to the maximum principal limit, subject to the Company’s approval. Annual repayments are required to reduce the outstanding balance, including interest, to US$1,000 by May 15 of each year unless this condition is waived by the Company. For the first anniversary date, May 15, 2025, the Company waived the annual requirement for the loan to be reduced to US$1,000. In addition, the maximum principal limit was increased to US $20,000 and the annual repayment threshold was reset to US$8,000. These change --- s better reflected the seasonality and cash requirements of the cultivation operation for which the Company is the primary benefactor. The Company has secured a first- priority security interest on substantially all of the Borrower’s operating assets excluding inventory on hand at the inception of the loan agreement and may accelerate repayment in the event of default. OPRC Note On May 17, 2024, the Company entered into a $3,000 secured note receivable agreement with One Plant Retail Corporation (“OPRC”), (the “OPRC Note”). OPRC is a legal entity in which the Company retains an 8.94% minority investment (note 19). The OPRC Note matures on May 31, 2027, and bears an interest rate of 8% per annum. Interest payments of accrued interest are payable by OPRC on the first of each month. The OPRC note is secured by a comprehensive security agreement granting the Company a first priority security interest in all personal property and assets of the borrower, including but not limited to accounts, equipment, inventory, intellectual property, and investment property. The security agreement includes standard default provisions with a 10-day cure period for most events of default, after which the entire outstanding amount becomes immediately due and payable. KMI Note On December 19, 2024, the Company entered into a first priority, secured note receivable agreement with Kase Manufacturing Inc. (“KMI”), a vendor providing contract manufacturing and distribution services to the Company in the state of California. The KMI Note bears an interest rate of 12% per annum, compounded monthly until repaid in full. Default interest shall be at 20% after default, compounded monthly. The KMI Note is secured by all present and future right, title, and interest of Borrower’s assets. RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 18 10. PREPAID EXPENSES As at March 31, 2025, and December 31, 2024, prepaid expenses are comprised of the following amounts: As at 31-Mar-25 As at 31-Dec-24 $ $ Prepaid operating licenses 1,719 1,741 Prepaid taxes 7 4 Prepaid dues and subscriptions 97 129 Other prepaid fees 361 119 Total prepaid expenses 2,184 1,993 Prepaid operating licenses include licenses held by the Company’s various subsidiaries that allow for the legal conduct of cultivation, processing, distribution, and medical and adult-use retail sales by these entities. These licenses are regulated by the respective authorities in each state or province across the United States and Canada. 11. DEPOSITS As at March 31, 2025, and December 31, 2024, the Company had the following deposits: As at 31-Mar-25 As at 31-Dec-24 $ $ Vendor deposits 8,503 10,202 Security deposits 334 333 Other deposits 740 651 Total deposits 9,577 11,186 The Company advanced $3,776 to an arm’s length vendor as security for a crop commitment for cannabis biomass which delivery was to commence during the fourth quarter of fiscal 2024. Under the agreed upon terms of the crop commitment, the vendor must maintain select product parameters for the harvest as defined by the Company. As at March 31, 2025, the remaining committed balances included in vendor deposits is $2,033. The Company continues to work collaboratively with the arm’s length vendor towards settlement of their commitment under this contract. As of March 31, 2025, the C --- ompany has an additional $1,843 in vendor deposits held by a third-party vendor to secure the delivery of cannabis biomass. These deposits ensure supply chain security, stabilize prices, maintain operational continuity, and mitigate risks associated with supply disruptions. Concurrent with the closing of the Aleafia Acquisition (note 7), the Company also deposited $748 with a Canadian government institution to be held, in trust by the institution, on the account of Emblem Cannabis Corporation; one of the licensed Purchased Entities. RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2025 AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 19 12. INVENTORY The Company's inventory as at March 31, 2025, and December 31, 2024, consists of the following: As at 31-Mar-25 As at 31-Dec-24 $ $ Cannabis and CBD derivative finished goods 7,485 5,376 Raw materials 8,578 5,493 Cannabis and CBD derivative work in process 31,067 38,964 Consumables and non-cannabis merchandise 292 443 Inventory provisions (2,688) (2,720) Total 44,734 47,556 During the period ended March 31, 2025, the total inventory included in cost of sales was $11,383 (2024; $53,136), which includes an allocation for salaries and wages amounting to $1,453 (2024; $5,701). $2,242 of provisions at March 31, 2025, relate to inventory held by entities acquired as part of the Aleafia Acquisition (December 31, 2024; $2,463) (note 7). 13. BIOLOGICAL ASSETS The Company's biological assets consist of 20,299 plants growing as at March 31, 2025 (December 31, 2024; 4,858). The continuity of biological assets is as follows: As at 31-Mar-25 As at 31-Dec-24 $ $ Carrying amount, beginning of year 1,728 829 Acquired from Aleafia Acquisition (note 7) 1,136 Capitalized cost 5,462 11,940 Unrealized changes in fair value of biological assets 225 856 Transferred to inventory (4,205) (13,092) Effects of foreign exchange (1,729) 59 Carrying value, end of year 1,482 1,728 Sensitivity Analysis Significant unobservable assumptions used in the valuation of biological assets, including the sensitivities on changes in these assumptions and their effect on the fair value of biological assets, are as follows: For the period ended 31-Mar-25 For the period ended 31-Mar-24 Weighted average assumption 10% Change of inputs Effect on Biological Asset balance Weighted average assumption 10% Change of inputs Effect on Biological Asset balance Selling price ($/gram) $2.93 $3.23 $7,583 $2.94 $3.24 $1,002 Yield by plant (grams) 474 522 $6,834 739 813 $631 Post-harvest costs ($/gram) $1.16 $1.27 $5,361 $1.28 $1.41 $(314) RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 20 14. ASSETS & LIABILITIES HELD FOR SALE Assets and liabilities held by the Company’s discontinued operations as outlined in note 3 (the “Discontinued Operations”), have been included in assets held for sale and liabilities held for sale on the statement of financial position. Pharmaco Inc. (“Pharmaco”), a wholly owned subsidiary of the Company, operated licensed medical and adult-use retail outlets and conducted limited cultivation operations in Michigan since its acquisition by the Company on February 7, 2022. During the year ended December 31, 2024, management --- determined that Pharmaco’s operations no longer aligned with the Company’s core business objectives. On December 26, 2024, following defaults under a senior secured loan agreement, the senior secured lender, Royal Group Resources, Ltd. (“RGR”)1 submitted a Receivership Order to the Circuit Court in Pontiac, Michigan, requesting the appointment of a receiver to oversee the sale of all of Pharmaco’s assets. The court approved the Receivership Order, authorizing the Receiver to manage and/or divest Pharmaco’s assets, with the senior secured lender retaining its senior lien position and entitlement to proceeds from any sale. The initiation of the receivership proceedings led to the classification of Pharmaco’s assets and liabilities as a disposal group under IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. Revenue and expenses for the fiscal period ended December 31, 2024, and its restated 2023 comparative period, related to the Pharmaco operations have been eliminated from the Company’s continuing operations and are shown as discontinued operations (note 32) in the consolidated statement of profit or loss. On March 5, 2025, the Company's wholly owned subsidiary, Red White & Bloom Michigan (2024), Inc., was confirmed by the court as the successful bidder for select tangible assets of Pharmaco through a court-supervised receivership process. The court-approved purchase price was US$8,850 (C$12,722), subject to an appeal period, mandated by the appointed receiver, permitting objections for consideration by the court from unsecured creditors. The court's approval became final on March 28, 2025, following expiry of the aforementioned appeal period during which no creditor objections were filed, thereby confirming the validity and enforceability of the asset purchase agreement. On March 29, 2025, RGR executed a Release and Discharge Agreement with Pharmaco whereby RGR agreed to terminate the RGR Credit Facility (note 22), release Pharmaco and its affiliated parties from all repayment obligations and discharge all related security interests. In consideration for this release and discharge, RGR accepted the US$8,850 (C$12,722). in proceeds from the court- approved asset sale as settlement in full. Upon execution of the discharge agreement, the US$8,850 purchase price owed by Red White & Bloom Michigan (2024), Inc., the successful court approved bidder, became payable directly to RGR for settlement of the RGR Credit Facility. The Company recognized a gain on debt settlement of US$6,804 (C$9,770) in discontinued operations (note 32), representing the excess of the facility's carrying value over the settlement amount. As at March 31, 2025, the outstanding purchase price consideration of US$8,850 (CAD $ 12,722) due from the Company’s subsidiary was included in accrued liabilities and was subsequently settled on April 30, 2025. 1 Related party (note 28) RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 21 The carrying amounts of assets and liabilities held by the Company’s Discontinued Operations as at March 31, 2025, and 2024 are as follows: As at 31-Mar-25 As at 31-Dec-24 $ $ Current assets Accounts receivable - 4 Deposits 37 42 Lease receivables - 1,617 Non-current assets Property, plant and equipment, net 13,242 11,529 Right-of-use assets, net - - Int --- angible assets, net - - Assets classified as held for sale 13,279 13,192 Current liabilities Accounts payable and accrued liabilities 7,931 8,358 Credit facility - 21,851 Promissory notes 811 798 Tax payables 7,730 15,192 Liabilities classified as held for sale 16,472 46,199 During the period ended December 31, 2024, the Company recognized an impairment loss of $141 on a property, plant and equipment related to Discontinued Operations. These impairments stem from a re-assessment of the recoverable value of the acquired operations’ property, plant and equipment as the Company continued to evaluate restructuring alternatives for the operations. The balance of carrying value of property, plant and equipment, represents management’s best estimate of the aforementioned assets’ value in use as of March 31, 2025, and December 31, 2024. <<Remainder of page intentionally left blank>> RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2025 AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 22 15. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment as at March 31, 2025, and December 31, 2024 consists of the following: Land Land Improvements Building Building Improvements Leasehold Improvements Vehicles Furniture & Fixtures Machinery & Equipment Computer Hardware Construction In Progress Total $ $ $ $ $ $ $ $ $ $ $ Costs Balance, December 31, 2023, restated 651 1,197 7,482 - 6,453 16 477 11,706 - 2,056 30,038 Additions - - 1,828 175 78 180 101 675 4 2,456 5,498 Additions through business combination (note 7) 6,491 - 9,947 4,161 - - 87 605 95 - 21,386 Disposals - - - - (110) (2) (67) (634) - (1,212) (2,025) Foreign currency movement 57 105 (1,170) (157) 1,914 10 42 (59) (4) 88 826 Balance, December 31, 2024 7,199 1,302 18,087 4,179 8,335 204 640 12,293 95 3,388 55,723 Additions - - - - 36 - 1 103 - 332 472 Foreign currency movement - - (7) 0 (8) - - (11) - (4) (30) Balance, March 31, 2025 7,199 1,302 18,080 4,179 8,363 204 641 12,385 95 3,716 56,165 Accumulated depreciation Balance, December 31, 2023, restated - 21 631 - 2,402 9 197 3,745 - - 7,005 Depreciation for the period - 14 724 434 1,304 17 96 1,953 34 - 4,576 Disposals - - (528) (116) (13) (1) - (273) (3) - (934) Foreign currency movement - 3 569 100 965 2 21 (230) 2 - 1,432 Balance, December 31, 2024 - 38 1,396 418 4,658 27 314 5,195 33 - 12,079 Depreciation for the period 4 175 99 300 10 21 508 8 1,125 Foreign currency movement - - 1 - (5) - - (5) - - (9) Balance, March 31, 2025 - 42 1,572 517 4,953 37 335 5,698 41 - 13,195 Net book value Balance, December 31, 2024 7,199 1,264 16,691 3,761 3,677 177 326 7,098 63 3,388 43,644 Balance, March 31, 2025 7,199 1,260 16,509 3,662 3,410 167 306 6,687 54 3,716 42,970 During the period ended December 31, 2024, $21,386 in property, plant and equipment was acquired by the Company as a result of the Aleafia Acquisition (note 7). The Company capitalized $514 in depreciation expense to inventory within the period ended March 31, 2025 (December 31, 2024; $3,408). RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2025 AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 23 16. INTANGIBLE ASSETS A continuity of the intangible assets for March 31, 2025, and December 31, 2024, is as follows: Brand Licenses Tota --- l $ $ $ Costs Balance, January 1, 2024 34,123 52,600 86,723 Additions (note 7) 1,679 - 1,679 Aleafia Acquisition (note 7) 447 4,234 4,681 Foreign exchange movement 3,001 4,625 7,626 Balance, December 31, 2024 39,250 61,459 100,709 Foreign exchange movement (34) (52) (86) Balance, March 31, 2025 39,216 61,407 100,623 As part of the Aleafia Acquisition (note 7), the Company, through its acquisition of the common shares of select legal entities, acquired all of the operating licenses issued by regulatory authorities in Canada to the acquired group of companies. On acquisition, the fair value of these operating licenses were included in the intangible assets. Intangible asset impairments The Company assesses intangible assets for impairment at each annual reporting period by evaluating events or circumstances that may indicate impairment, considering external and internal factors including financial performance. During the three months ended March 31, 2025, and year ended December 31, 2024, no impairment charges were recognized against intangible assets in continuing operations. The Company continues to monitor for impairment indicators that may require interim assessments. 17. RIGHT OF USE ASSETS AND LEASE OBLIGATIONS A continuity of the Company’s right-of-use assets is as follows: As at 31-Mar-25 As at 31-Dec-24 $ $ Opening balance 17,976 17,191 Additions from Aleafia acquisition (note 7) - 121 Accumulated depreciation from Aleafia acquisition (note 7) - (85) Additions during the period 312 3,675 Depreciation for the period (428) (1,576) Dispositions - ROU Asset - (3,447) Dispositions - ROU Accumulated Depreciation - 936 Gain on Disposals - 390 Effects of foreign exchange (18) 771 Balance, end of period 17,842 17,976 RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 24 A continuity of the Company’s lease obligations related to right-of-use assets is as follows: As at 31-Mar-25 As at 31-Dec-24 $ $ Opening balance 22,729 20,503 Additions/(Disposals) 313 415 Interest accretion 687 2,577 Interest payments (687) (2,824) Principal payments (44) (149) Ending balance 22,998 20,522 Effects of foreign exchange (21) 2,207 Less: Short-term lease obligations (786) (701) Long-term lease obligation 22,191 22,028 Future minimum lease payments (principal and interest) are as follows: As at 31-Mar-25 $ 2025 2,410 2026 3,264 2027 3,307 2028 3,353 2029 3,590 Thereafter 30,720 Total minimum lease payments 46,644 Present value of minimum lease payments 15,288 Effect of discounting 8,379 Current portion lease obligations 786 Long-term lease obligations 22,191 18. MINORITY INTEREST EQUITY INVESTMENT As part of the Aleafia Acquisition (note 7), the Company acquired an 8.94% equity interest in One Plant (Retail) Corp. ("OPRC"), a privately held cannabis retail operator in Canada. The Company does not exercise significant influence over OPRC and has elected to measure this investment at fair value through profit or loss in accordance with IFRS 9. The Company assesses the carrying value of this investment annually as part of its year-end procedures. For the year ended December 31, 2024, the Company recorded a $641 fair value gain on this investment. As at March 31, 2025, the carrying value of the investment is $2,479. Below is a continuity of the Company’s investment in OPRC: $ Balance, J --- anuary 1, 2024 - Equity investment as a result of business combinations (note 7) 1,837 Gain on fair value adjustment 642 Balance, December 31, 2024 2,479 Balance, March 31, 2025 2,479 RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 25 19. GOODWILL Goodwill as of March 31, 2025, and December 31, 2024, was comprised of the following: $ Balance, January 1, 2024 12,668 Foreign exchange movement 1,114 Balance, December 31, 2024 13,782 Foreign exchange movement (13) Balance, March 31, 2025 13,769 Balances in goodwill as at March 31, 2025, and December 31, 2024, is associated with the Company’s Retail segment. Goodwill impairment The Company assesses goodwill for impairment on an annual basis, by comparing the carrying value of each cash-generating unit ("CGU") to its recoverable amount, being the greater of fair value less costs to sell and value in use (see note 6 for CGU methodology). As at March 31, 2025, and December 31, 2024, no material impairment indicators were present, and no impairment charges were recognized. Key assumptions in the 2024 annual impairment assessment included the applicable discount rate and revenue growth rates. Material changes to these assumptions could impact estimated fair value and result in future impairment charges. The Company continues to monitor impairment indicators that may require interim assessments. 20. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES The Company had the following accounts payable and accrued liabilities as at March 31, 2025, and December 31, 2024: As at 31-Mar-25 As at 31-Dec-24 $ $ Trade payables 11,213 14,761 Accrued liabilities and other 18,555 5,857 Sales and excise tax payable 3,522 3,335 Customer deposits 123 121 Total 33,413 24,074 On March 29, 2025, Royal Group Resources, Ltd. ("RGR"), as lender under the RGR Credit Facility, executed a release and discharge agreement (the "RGR Release and Discharge") following the completion of receivership proceedings for Pharmaco Inc. ("Pharmaco") that commenced in December 2024 (note 15). Through a court-approved asset purchase transaction, Pharmaco realized US$8,850 ($12,722) in proceeds which were applied as a repayment against the, representing the sole source of funds available for debt repayment. These funds were included in Accrued liabilities and other as at March 31, 2025, and settled to RGR on April 30, 2025. During the period ended March 31, 2025, the Company had one significant vendor representing 21% of its trade payables. During the year ended December 31, 2024, the Company had two significant vendors representing 10% and 20% of its trade payables. RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 26 21. DEBT A. NOTES PAYABLE Terms for notes payable held by the Company as at March 31, 2025, is as follows: Note Purpose: Note/ Amended value: Note currency: Execution date: Maturity date: Interest rate per annum: iBJSD Note Debt restructure 3,065 CAD 1-Feb-25 12-Sep-27 12.00% i CPIL Note Debt restructure 20,644 CAD 1-Feb-25 12-Sep-27 12.00% iDCIL Note Debt restructure 7,120 CAD 1-Feb-25 12-Sep-27 12.00% ELL Note Capital 5,750 CAD 5-Jun-24 1-Jul-29 6.72% iRGR CAD Grid Note Debt res --- tructure 59,022 CAD 1-Feb-25 12-Sep-27 12.00% MV Ops Note Retail construction 1,130 USD 4-Jun-24 4-Dec-25 12.00% Oakshire Note Debt settlement 3,000 USD 19-Jul-24 On Demand 0.00% iRGR Note A Debt restructure 33,418 USD 1-Feb-25 12-Sep-27 12.00% iRGR Note C Debt restructure 21,742 USD 29-Nov-24 30-Nov-26 12.00% iRGR USD Grid Note Operations & acquisitions 53,779 USD 1-Feb-25 12-Sep-27 12.00% iSDIL Note A Debt restructure 6,901 USD 1-Feb-25 12-Sep-27 12.00% iSDIL Note B Debt restructure 7,120 USD 1-Feb-25 12-Sep-27 12.00% SIL Note Debt restructure 347 USD 1-Feb-25 12-Sep-27 12.00% TAII Note Debt restructure 3,387 USD 1-Feb-25 12-Sep-27 12.00% Terms for notes payable held by the Company as at December 31, 2024, is as follows: Note Purpose: Note/ Amended value: Note currency: Execution date: Maturity date: Interest rate per annum: i CAD 2,710,000 BJMDSD Note Debt restructure 2,710 CAD 1-Feb-25 12-Sep-27 *15.00% CAD 5,750,000 ELL Note Capital 5,750 CAD 19-Jul-24 28-Feb-25 6.72% i CAD RGR Grid Note Debt restructure 31,198 CAD 1-Feb-25 12-Sep-27 12.00% MV Ops Note Operations 1,130 USD 1-Feb-25 12-Sep-27 12.00% Oakshire Note Debt settlement 3,000 USD 1-Feb-25 12-Sep-27 0.00% i USD 25,885,000 RGR Note Debt restructure 25,885 USD 4-Jun-24 4-Dec-25 *15.00% i RGR Note C Debt restructure 21,742 USD 1-Feb-25 12-Sep-27 12.00% i USD RGR Grid Note Debt restructure 7,850 USD 1-Feb-25 12-Sep-27 12.00% i USD 6,349,000 SDIL Note Debt restructure 6,349 USD 1-Feb-25 12-Sep-27 *15.00% USD 269,000 SIL Note Debt restructure 269 USD 29-Nov-24 30-Nov-26 *15.00% USD 2,887,000 TAII Note Debt restructure 2,887 USD 19-Jul-24 On Demand *15.00% *Post maturity to date of amendment on February 1, 2025, accrued interest was calculated with a 12% interest rate. i Classified as a related party (refer to note 28) RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2025 AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 27 Continuity of the outstanding notes payable held by the Company for the period ended March 31, 2025, is as follows. Balance, 01-Jan-25 Additions Additions due to amendments Accrued interest Interest payments Principal payments iLoan forgiveness FX (gain)/loss Balance, 31-Mar--25 ELL Note 5,743 - - 94 (23) (95) - - 5,719 MV Ops Note 1,637 - - 49 - - - (1) 1,685 Oakshire Note 1,665 - - - - (434) - 1 1,232 iiRGR Note C 33,541 - - 1,014 - - - (29) 34,526 iBJSD Note 3,214 - - 94 - - (181) - 3,127 iCPIL Note - - 20,644 415 - - - - 21,059 iRGR Note A 52,038 - - 1,492 - - (4,502) (20) 49,008 iRGR CAD Grid Note 56,946 1,500 - 1,762 - - - - 60,208 iRGR USD Grid Note 75,902 2,873 - 2,352 - - - (76) 81,051 iSDIL Note A 10,091 - - 293 - - (699) (5) 9,680 SIL Note 521 - - 15 - - (27) - 509 TAII Note 5,278 - - 151 (65) - (395) (2) 4,967 iDCIL Note - - 10,312 205 - - - (76) 10,441 iSDIL Note B - - 10,312 205 - - - (76) 10,441 Total 246,576 4,373 41,268 8,141 (88) (529) (5,804) (284) 293,653 Short-term 207,419 3,047 Long-term 39,157 290,606 Continuity of the outstanding notes payable held by the Company for the year ended December 31, 2024, is as follows. Balance, 01-Jan-24 Additions Accrued interest Accreted interest Interest Payments Principal Payments Transaction costs (Gain)/loss on amendments FX (gain)/loss Balance, 31-Dec-24 ELL Note - 5,750 218 - (187) (38) - - - 5,743 MV Ops Note - 1,626 11 - - - - - - 1,637 Oakshire Note 1,123 3,485 - - - (3,005) --- - - 62 1,665 iRGR Note C 25,138 - 4,045 - - (27) 1,842 (67) 2,610 33,541 iCAD$2,710,000 BJMDSD Note 3,029 - 461 12 (138) (150) - - - 3,214 iUSD$25,885,000 RGR Note 41,454 - 6,490 124 - - - - 3,970 52,038 iRGR CAD Grid Note 31,098 23,062 5,801 - (15) (3,000) 50 (50) - 56,946 iRGR USD Grid Note 30,293 34,649 6,189 - - - 50 (50) 4,771 75,902 iUSD$6,349,000 SDIL Note 9,366 - 1,323 73 (460) (1,032) - - 821 10,091 USD$269,000 SIL Note 412 - 65 4 - - - - 40 521 USD$2,887,000 TAII Note 4,303 - 663 35 (128) - - - 405 5,278 Total 146,216 68,572 25,266 248 (928) (7,252) 1,942 (167) 12,679 246,576 Short-term 146,216 207,419 Long-term 39,157 i Loan forgiveness is included in other income on the consolidated statement of income (loss) and comprehensive income (loss). ii Classified as a related party note (refer to note 28) RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2025 AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 28 Notes payable transactions during the period ended March 31, 2025: a) BJSD Note (amendment of the CAD$2,710,000 BJMDSD Note) On February 1, 2025, the Company executed a second amendment to the existing CAD$2,710,000 BJMDSD Note, resulting in the amended BJSD Note. The amendment provided relief to the Company through both principal reduction and revised terms. The outstanding balance of $3,315 (representing the original principal plus accrued interest due on the original maturity date) was reduced to $3,064. On date of amendment, $251 in amounts due under the BJSD Note was forgiven and included in other income on the consolidated statement of income (loss) and comprehensive income (loss). Additionally, the lenders agreed to reduce the interest rate from 15% to 12% per annum and extend the maturity date September 12, 2024, to September 12, 2027, with interest continuing to accrue and compound monthly. The debt maintains comprehensive security through a multi-layered collateral structure. Default provisions remain in effect with 20% per annum interest on overdue amounts, while prepayment is permitted after the first anniversary subject to a 1.75% penalty. Continuity of the BJSD Note can be reviewed in the continuity schedule above. b) RGR Note A (amendment of the USD$25,885,000 RGR Note) On February 1, 2025, the Company executed a third amendment to the existing USD$25,885,000 RGR Note, resulting in the RGR Note A. The amendment provided relief to the Company through both principal reduction and revised terms. The outstanding balance of USD$34,892 (representing the original principal plus accrued interest due on the original maturity date) was reduced to USD$33,418. On date of amendment, USD$3,109 (CAD$4,503) in amounts due under the RGR Note was forgiven and included in other income on the consolidated statement of income (loss) and comprehensive income (loss). Additionally, the lender agreed to reduce the interest rate from 15% to 12% per annum and extend the maturity date from September 12, 2024, to September 12, 2027, with interest continuing to accrue and compound monthly. The debt maintains comprehensive security through a multi-layered collateral structure. Default provisions remain in effect with 20% per annum interest on overdue amounts, while prepayment is permitted without penalty at the borrower's option. Continuity of the RGR Note A can be reviewed in the continuity schedule above. c) SDIL No --- te A (amendment of the USD$6,349,000 SDIL Note) On February 1, 2025, the Company executed a second amendment to the existing USD$6,349,000 SDIL Note, resulting in the SDIL Note A. The amendment provided relief to the Company through both principal reduction and revised terms. The outstanding balance of USD$6,900 (representing the original principal plus accrued interest due on the original maturity date) was reduced to USD$6,601. On date of amendment, USD$482 (CAD$699) in amounts due under the SDIL Note A was forgiven and included in other income on the consolidated statement of income (loss) and comprehensive income (loss). Additionally, the lender agreed to reduce the interest rate from 15% to 12% per annum and extend the maturity date from September 12, 2024, to September 12, 2027, with interest continuing to accrue and compound monthly. The debt maintains comprehensive security through a multi-layered collateral structure. Default provisions remain in effect with 20% per annum interest on overdue amounts, while prepayment is permitted after the first anniversary subject to a 1.75% penalty. Continuity of the SDIL Note A can be reviewed in the continuity schedule above. RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 29 d) SIL Note (amendment of the USD$269,000 SIL Note) On February 1, 2025, the Company executed a second amendment to the existing USD$269,000 SIL Note, resulting in the SIL Note. The amendment provided relief to the Company through both principal reduction and revised terms. The outstanding balance of USD$349 (representing the original principal plus accrued interest due on the original maturity date) was reduced to USD$347. On date of amendment USD$18 (CAD $27) owing under the SIL Note was forgiven and included in other income on the consolidated statement of income (loss) and comprehensive income (loss). Additionally, the lender agreed to reduce the interest rate from 15% to 12% per annum and extend the maturity date from September 12, 2024, to September 12, 2027, with interest continuing to accrue and compound monthly. The debt maintains comprehensive security through a multi- layered collateral structure. Default provisions remain in effect with 20% per annum interest on overdue amounts, while prepayment is permitted after the first anniversary subject to a 1.75% penalty. Continuity of the SIL Note can be reviewed in the continuity schedule above. e) TAII Note (amendment of the USD$2,887,000 TAII Note) On February 1, 2025, the Company executed a second amendment to the existing USD$2,887,000 TAII Note, resulting in the TAII Note. The outstanding balance of USD$3,538 (representing the original principal plus accrued interest due on the original maturity date) was reduced to USD$3,387. On date of amendment USD$273 (CAD $395) owing under the TAII Note was forgiven and included in other income on the consolidated statement of income (loss) and comprehensive income (loss). Additionally, the lender agreed to reduce the interest rate from 15% to 12% per annum and extend the maturity date from September 12, 2024, to September 12, 2027, with interest continuing to accrue and compound monthly. The debt maintains comprehensive security through a multi-layered collateral structure. Default provisions remain in effect with 20% per annum interest on --- overdue amounts, while prepayment is permitted with a 1.75% penalty after the first anniversary. Continuity of the TAII Note can be reviewed in the continuity schedule above. f) RGR CAD Grid Note (amendment of the CAD$ RGR Grid Note) On February 1, 2025, the Company executed a second amendment to the existing CAD$ RGR Grid Note, resulting in the RGR CAD Grid Note. The outstanding balance of $59,022 (representing the original principal plus accrued interest) remains unchanged with no principal reduction or debt forgiveness. The lender agreed to extend the maturity date from September 12, 2024, to September 12, 2027, with interest continuing to accrue at 12% per annum, compounded monthly. The debt maintains its secured debenture structure with all original terms and provisions remaining in full force and effect except for the specified maturity date extension. Continuity of the RGR CAD Grid Note can be reviewed in the continuity schedule above. g) RGR USD Grid Note (amendment of the USD$ RGR Grid Note) On February 1, 2025, the Company executed a second amendment to the existing USD$ RGR Grid Note, resulting in the RGR USD Grid Note. The outstanding balance of USD$53,779 (representing the original principal plus accrued interest) remains unchanged with no principal reduction or debt forgiveness. The lender agreed to extend the maturity date from September 12, 2024, to September 12, 2027, with interest continuing to accrue at 12% per annum, compounded monthly. The debt maintains its secured debenture structure with all original terms and provisions remaining in full force and effect except for the specified maturity date extension. Continuity of the RGR USD Grid Note can be reviewed in the continuity schedule above. RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 30 h) CPIL Convertible Note (amendment of the CPIL Convertible Note) On February 1, 2025, the Company executed a second amendment to the existing CPIL Convertible Note, resulting in the CPIL Note. The outstanding balance of $20,644 (representing the original principal plus accrued interest) remains unchanged with no principal reduction or debt forgiveness. The conversion rights under the original note expired on September 12, 2024, and the lender agreed to extend the maturity date from September 12, 2024, to September 12, 2027, with interest accruing at 12% per annum, compounding monthly on a 360-day year basis. All original terms and provisions remain in full force and effect except for the specified maturity date extension and interest rate adjustment from the original 8% to 12% per annum. Continuity of the CPIL Note can be reviewed in the continuity schedule above. i) DICL Convertible Note (amendment of the DICL Convertible Note) On February 1, 2025, the Company executed a third amendment to the existing DICL Convertible Note, resulting in the DICL Note. The outstanding balance of USD$7,120 (representing the original principal plus accrued interest) remains unchanged with no principal reduction or debt forgiveness. The conversion rights under the original note expired on September 12, 2024, and the lender agreed to extend the maturity date from September 12, 2024, to September 12, 2027, with interest to accrue at 12% per annum, compounding monthly on a 360-day year basis. All original terms and prov --- isions remain in full force and effect except for the specified maturity date extension and interest rate adjustment from the original 8% to 12% per annum. Continuity of the DICL Note can be reviewed in the continuity schedule above. j) SDIL Note B (amendment of the SDIL Convertible Note) On February 1, 2025, the Company executed a third amendment to the existing SDIL Convertible Note, resulting in the SDIL Note B. The outstanding balance of USD$7,120 (representing the original principal plus accrued interest) remains unchanged with no principal reduction or debt forgiveness. The conversion rights under the original note expired on September 12, 2024, and the lender agreed to extend the maturity date from September 12, 2024, to September 12, 2027, with interest to accrue at 12% per annum, compounding monthly on a 360-day year basis. The debt no longer contains a convertible promissory note structure although all original terms and provisions remain in full force and effect except for the specified maturity date extension and interest rate adjustment from the original 8% to 12% per annum. Continuity of the SDIL Note can be reviewed in the continuity schedule above. Original terms of each of the above amended notes can be found in note 22 of the Company’s 2024 Audited Financial Statements published on Sedar+. Notes payable transactions during the year ended December 31, 2024: a) RGR Grid Note Amendments On January 1, 2024, the Company and Royal Group Resources, Ltd. (“RGR”) executed agreements to amend the CAD RGR Grid Note and the USD RGR Grid Note (the “RGR Grid Notes”). Under the terms of the amendments, effective January 1, 2024, the RGR Grid Notes will bear interest at an aggregate rate of 12% per annum, compounding monthly, and calculated on a monthly basis in arrears at the end of each month, and shall be paid, together with principal, on the maturity date; September 12, 2024. All other terms and conditions remain unchanged. The amendments were subject to review under IFRS 9 and as a result, both the CAD RGR Grid Note and the USD RGR Grid Note were extinguished resulting in $100 loss on extinguishment related to the RGR Grid Notes amendment. The RGR Grid Notes were subsequently renewed, post maturity, on February 1, 2025. The reader is referred to note 37 for further details on the renewals. RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 31 b) FL Ops Note On June 4, 2024, the Company's subsidiaries, Red White & Bloom Florida Inc. and RWB Florida LLC (as joint borrowers), entered into an operating loan agreement with Red White and Bloom Brands Inc. and a consortium of arm’s-length lenders, for an aggregate principal amount of up to USD $6,000 (the "FL Ops Note"). The FL Ops Note carries a 12% annual interest rate (increasing to 15% in the event of default), compounds monthly, and matures on December 4, 2025. The arm’s-length lenders advanced $1,626 (USD $1,130) of the total principal while Red White and Bloom Brands, Inc. advanced $6,708 (USD $4,662). For the purpose of these Financial Statements, amounts advanced by Red White and Bloom Brands, Inc. have been eliminated on consolidation. The FL Ops Note was issued to fund ongoing operating costs and fixturing of the Florida retail stores to be activated through fiscal 2025. c) ELL Note On June 4, 2024, --- the Company completed a mortgage financing with a third-party Canadian lender in the amount of $5,750 (the “ELL Note”) secured by a property owned by the Company. Proceeds from the financing will be used for working capital and general corporate purposes. The ELL Note matures on July 1, 2029, and has a sixty (60) month term, amortizing over three hundred (300) months at an annual interest rate of 6.72% per annum. Computershare acts as agent, nominee and custodian in administering the note. The ELL Note is supported by a guarantee provided by an existing related party lender. d) Oakshire Note On July 19, 2024, under the terms of the Oakshire Settlement (see Debt Settlement below), the Company entered into a promissory note for $3,357 (the “Oakshire Note”) to settle financial obligations and claims, including the extinguishment of $1,123 due to Oakshire. The Oakshire Note is non-interest bearing and is required to be settled, in full, by February 28, 2025 unless this condition is otherwise waived by the applicable lender. Payments are structured in installments, with specific deadlines outlined in the Oakshire Settlement Agreement. If payments are not made as scheduled, an 18% default interest rate will apply (at the discretion of the lender, and the total outstanding balance will become immediately due unless this condition is otherwise waived by the applicable lender. The Oakshire Note is secured by specific operating assets held by the Company. e) RGR Note C (amendment of the USD$18,300,000 RGR Note) On November 29, 2024, the Company and RGR executed an agreement, effective June 4, 2024, to amend the USD$18,300,000 RGR Note resulting in RGR Note C. Prior to the amendment, the Company incurred USD$1,339 in penalties and interest in accordance with the default terms of the USD$18,300,000 RGR Note. Under the terms of the amendment, RGR Note C will bear interest of 12% per annum, compounded monthly, with interest and principal payable on the maturity date, defined as November 30, 2026. The amendment was subject to review under IFRS 9 and as a result, the USD$18,300,000 RGR Note was extinguished resulting in $67 loss on extinguishment. Details of the transaction are included in the notes payable continuity schedule above. During the period ended March 31, 2025, and December 31, 2024, the Company satisfied all financial covenants associated with its issued debt. RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2025 AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 32 B. CONVERTIBLE DEBENTURES Below are the terms of each of the convertible notes held by the Company as at March 31, 2025, and December 31, 2024. Convertible Note Purpose Note/Amended Value Note currency Execution Date Maturity Date Interest Rate per annum AB Convertible Note Florida acquisition 781 USD 22-Apr-21 22-Apr-24 12.00% FCC Convertible Note Florida acquisition 1,563 USD 22-Apr-21 22-Apr-24 12.00% iIBGL Convertible Note Florida acquisition 1,938 USD 31-Dec-24 30-Nov-26 12.00% VMOS Convertible Note Florida acquisition 1,356 USD 31-Dec-24 30-Nov-26 12.00% MV Convertible Note Florida acquisition 25,340 USD 29-Nov-24 30-Nov-26 12.00% iiDICL Convertible Note Debt restructure - USD 4-Oct-21 12-Sep-24 8.00% iiSDIL Convertible Note Debt restructure - USD 4-Oct-21 12-Sep-24 8.00% iiCPIL Convertible Note Debt restructure - CAD 15-Sep-22 12-Sep-24 8.00% Belo --- w is a continuity of the Company’s convertible debt for the three months ended March 31, 2025. Convertible Note Balance, 01-Jan-25 Amendments Accrued interest FX (Gain)/loss Balance, 31-Mar-25 AB Convertible Note 1,487 - 35 (1) 1,521 FCC Convertible Note 2,973 - 67 (2) 3,038 IBGL Convertible Note 2,973 - 67 (2) 3,038 VMOS Convertible Note 2,082 - 47 (2) 2,127 MV Convertible Note 39,015 - 1,091 (33) 40,073 iiDICL Convertible Note 10,144 (10,312) 102 66 - iiSDIL Convertible Note 10,144 (10,312) 102 66 - iiCPIL Convertible Note 20,440 (20,644) 204 - - Total Convertible Debt 89,258 (41,268) 1,715 92 49,797 Short-term 45,187 4,558 Long-term 44,071 45,239 Below is a continuity of the Company’s convertible debt for the year ended December 31, 2024. Convertible Note Balance, 01-Jan-24 Interest Accured Interest Accretion Extinghish- ment Amendments Interest post maturity FX (Gain)/loss Balance, 31-Dec-24 AB Convertible Note 1,242 26 14 - - 92 113 1,487 FCC Convertible Note 2,485 52 28 - - 184 225 2,974 IBGL Convertible Note 2,485 52 28 (2,658) 2,658 184 225 2,974 VMOS Convertible Note 1,739 37 20 (1,860) 1,860 129 157 2,082 MV Convertible Note 30,987 1,078 1,506 (34,684) 34,684 2,486 2,958 39,015 iiDICL Convertible Note 8,378 829 153 - - - 783 10,143 iiSDIL Convertible Note 8,378 829 153 - - - 783 10,143 iiCPIL Convertible Note 18,030 1,673 737 - - - - 20,440 Balance, end of period 73,724 4,576 2,639 (39,202) 39,202 3,075 5,244 89,258 Short-term - 45,187 Long-term 73,724 44,071 As at March 31, 2025, and December 31, 2024, the Company's assessment determined that no derivative liability was associated with the existing convertible debentures. i Related party convertible note (note 28) ii Convertible note was amended into a note payable (note 22a), related party (note 28) RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 33 Convertible note transactions during the period ended March 31, 2025: a) The AB Convertible AB Note and the FCC Convertible Note As at the date of these Financial Statements, the Company remained actively engaged in negotiations to renew the AB and FCC Convertible debt that matured on April 22, 2024. As such, the lenders have not provided formal notification of default to the Company despite the expiration of the original maturity dates. The principal renewal terms of the debt instruments have been acknowledged as acceptable by the lenders with current discussions solely focused on collateral arrangements. Given that the original maturity dates have expired, these loan obligations continue to be classified as short-term debt in the Company's Consolidated Statement of Financial Position. Details of the transactions are included in the convertible debenture continuity schedule above. Convertible note transactions during the period ended December 31, 2024: a) MV Convertible Note (amendment of the USD$20,112,015 MV Convertible Note) On November 29, 2024, the Company and M&V Investments One LLC (“MV”) executed an agreement to amend the USD$20,112,015 MV Convertible Note resulting in the MV Convertible Note, with an effective date of June 4, 2024. Under the terms of the amendment, the MV Convertible Note will bear interest of 12% per annum, compounded annually, with interest and principal payable on the maturity date, defined as November 30, 2026. The Comp --- any and MV also agreed that MV may convert all or any portion of the outstanding principal balance of the MV Convertible Note at a price of USD $2.75 per common share of the Company at any time prior to maturity. The amendment was subject to review under IFRS 9 and as a result, the USD$20,112,015 MV Convertible Note was extinguished and the MV Convertible Note was established. Details of the transaction are included in the convertible debenture continuity schedule above. b) IBGL and VMOS Convertible Notes (amendment of the USD$1,562,500 IBGL, USD$1,093,750 VMOS Convertible Notes) On December 31, 2024, the Company and lenders of the USD$1,562,500 IBGL and, USD$1,093,750 VMOS Convertible Notes amended existing notes, with an effective date of April 22, 2024, resulting in the IBGL and VMOS Convertible Notes. Under the terms of the amendments, interest is set at 12% per annum, with interest and principal payable on the maturity date, defined as November 30, 2026. The Company and the holders of the IBGL and VMOS Convertible Notes also agreed that the lenders may convert all or any portion of the principal balance of the respective Convertible Notes at a price of USD $2.75 per common share of the Company at any time prior to the next respective maturity date. The amendment was subject to review under IFRS 9 and as a result, the USD$1,562,500 IBGL and USD$1,093,750 VMOS Convertible Notes were extinguished and the IBGL and VMOS Convertible Notes were established. Details of the transactions are included in the convertible debenture continuity schedule above. During the period ended March 31, 2025, and 2024, the Company substantially satisfied all material financial covenants in relation to its convertible debentures. C. DERIVATIVE LIABILITIES RELATING TO CONVERTIBLE DEBENTURES The Company assesses its convertible debentures each reporting period to determine if a derivative liability exists in accordance with IFRS 9 Financial Instruments and IAS 32. When a derivative liability is identified, the Company values its derivative liabilities to fair market value each period, with fair market value gains and losses recorded to the consolidated statement of income (loss) and comprehensive income (loss). The Company's derivative liabilities associated with convertible debentures are listed in section B of this note. As at March 31, 2025, and December 31, 2024, there was no evidence of a derivative liability resulting from the Company's convertible debentures. RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 34 D. CREDIT FACILITY A continuity of the Company’s secured credit facility is as follows: $ Balances, January 1, 2024 19,430 Accrued interest 1,082 Recovery of amendment fees (45) Allocation to liabilities available for sale (note 15) (20,467) Balances, December 31, 2024 - On June 14, 2024, a previously held credit facility between the Company and PWC was terminated as a result of a loan purchase agreement (the “RGR-BFI Loan Purchase Agreement”) between Royal Group Resources, Ltd. (“RGR”)i, and existing lender related to the Company, and PWC. As a result of the RGR-BFI Purchase Agreement, the Company recovered $45 in amounts owing to PWC for the amendment fee resulting from the January 30, 2023, extension. There were no material changes to the Credit Facility as a resul --- t of the RGR-BFI Loan Purchase Agreement. On December 26, 2024, following defaults under Credit Facility, RGR submitted a Receivership Order to the Circuit Court in Pontiac, Michigan, requesting the appointment of a receiver to oversee the sale of all of Pharmaco’s assets. The court approved the Receivership Order, authorizing the Receiver to manage and/or divest Pharmaco’s assets, with RGR retaining its senior lien position and entitlement to proceeds from any sale or credit bid (note 15, 32). For additional details on the Pharmaco Receivership, refer to the Company’s most recently filed audited financial statements for the period ended December 31, 2024 found on Sedar+. E. DEBT SETTLEMENTS On July 19, 2024, the Company entered into a settlement agreement between with Oakshire Holdings Inc. and its affiliates (the “Oakshire Parties”) to resolve a series of financial obligations and claims, including the extinguishment of $1,123 due under the Due to Oakshire Note (the “Oakshire Settlement Agreement”). Under the terms of the agreement, the Company will pay the Oakshire Parties $3,357 in scheduled installments. The obligations under the Oakshire Settlement Agreement are secured by tangible assets held by the Company, in concert with the Oakshire Note (note 22). Payments made by the Company in connection with the Oakshire Note amounted to $3,005 (see Note 22 a above). F. OFF BALANCE SHEET ARRANGEMENTS The Company did not enter any off-balance sheet arrangements during period ending March 31, 2025 (December 31, 2024; nil). i Related party (note 28) RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 35 22. SHARE CAPITAL AND RESERVES A. AUTHORIZED As at March 31, 2025, the authorized shares were as follows: • Unlimited number of common shares without par value with special rights and restrictions. • An unlimited number of preferred shares without par value with special rights and restrictions, which are non-voting except in specific circumstances related to dividend defaults. B. ISSUED AND OUTSTANDING Changes in share capital for the period ended March 31, 2025, and December 31, 2024, and the balances outstanding is as follows: Common Shares Common Shares Share Capital # $ Balance, December 31, 2024 470,221,901 342,111 Balance, March 31, 2025 470,221,901 342,111 Share Capital transactions the during the period ended March 31, 2025: No share capital transactions were undertaken by the Company during the three-months ended March 31, 2025. Share Capital transactions the during the period ended December 31, 2024: On June 14, 2024, all authorized Series 1 Convertible Preferred shares and Series II Convertible Preferred shares outstanding, of which none were allotted or issued, were eliminated by approved resolution. On the same date, the Company authorized a new class of preferred shares (the “Preferred Shares”). The Preferred Shares are unlimited, issuable in series, without par value, and have special rights and restrictions, under directors’ discretion, which impact (1) dividend entitlements, (2) redemption terms and (3) conversion rights provided that no other preferred shares are issued and outstanding. In the event of liquidation, Preferred shareholders have priority in receiving paid-in capital plus any accrued dividends before any distribution to common sharehold --- ers. The Preferred shareholders do not have voting rights or the right to attend general meetings, except in specific circumstances related to dividend defaults. On June 14, 2024, the common shares were concurrently amended to include the following special rights and restrictions: in the event of the Company’s liquidation or dissolution, common shareholders are entitled to share in the remaining assets of the Company after the claims of the Preferred shareholders and any other classes with priority have been satisfied. C. STOCK OPTIONS The Company established a 20% rolling stock option plan (the “Option Plan”) to provide the Company with a share-related mechanism to attract, retain and motivate directors, employees, and consultants, to reward such persons with the grant of options under the Option Plan from time to time for their contributions toward the long-term goals of the Company and to enable and encourage such persons to acquire shares as long-term investments. RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 36 Under the Option Plan, the Board of Directors may from time to time, in its discretion, grant stock options to directors, officers, employees and consultants of the Company. Pursuant to the Option Plan, the Company may issue options for such period and exercise price as may be determined by the Board of Directors, and in any case not exceeding ten (10) years from the date of grant. The minimum exercise price of an option granted under the Option Plan must not be less than the closing price of the common shares on the date preceding the option grant date. In any 12-month period, and in relation to the number of issued and outstanding common shares of the Company, the total number of options awarded cannot exceed: • 5% to any one individual as at the grant date • 2% to any one Consultant as of the grant date • 2% to employees performing investor relations activities for the Company The Company uses the Black-Scholes model to establish the fair value of the options on the date of grant by applying the assumptions below. The fair value of the option is expensed over the option’s vesting period. The following assumptions were used by the Company to value the stock options outstanding as at March 31, 2025: Grant Date Vesting Start Date Expiry Date Share price on Date of Grant Exercise Price Volatility Risk Free Rate Dividends $ $ % % $ 1-Apr-20 1-Apr-21 1-Apr-25 1.15 1.00 105.27% 0.45% $nil 10-Sep-20 10-Dec-20 10-Sep-25 0.66 0.66 105.27% 0.45% $nil 1-Oct-20 1-Oct-20 1-Oct-25 0.54 0.65 105.27% 0.45% $nil 1-Oct-20 1-Jan-21 1-Oct-25 0.54 0.65 105.27% 0.45% $nil 12-Oct-20 12-Oct-20 12-Oct-25 0.60 0.65 105.27% 0.45% $nil 18-Nov-20 18-Nov-20 18-Nov-25 0.67 0.67 105.27% 0.45% $nil 3-Dec-20 3-Dec-20 3-Dec-25 0.69 0.75 105.27% 0.45% $nil 6-Jul-21 6-Jul-21 6-Jul-25 1.10 1.10 105.27% 1.23% $nil 12-Nov-21 21-Nov-21 26-Nov-26 0.63 0.63 88.00% 1.23% $nil 12-Nov-21 22-Jan-22 26-Nov-26 0.63 0.63 88.00% 1.23% $nil 12-Nov-21 8-Nov-21 12-Nov-26 0.63 0.63 88.00% 1.23% $nil 12-Nov-21 1-Jul-22 12-Nov-26 0.63 0.63 88.00% 1.23% $nil 12-Nov-21 20-Sep-22 12-Nov-26 0.63 0.63 88.00% 1.23% $nil 12-Nov-21 4-Oct-22 12-Nov-26 0.63 0.63 88.00% 1.23% $nil 7-Oct-22 7-Jan-23 7-Oct-27 0.15 0.14 94.35% 3.98% $nil 7-Oct-22 7-Jan-23 7-Oct-27 0.15 0.20 94.35% 3.98% $nil 7-Oct-22 7-Jan-23 7 --- -Oct-27 0.15 0.50 94.35% 3.98% $nil 15-Mar-23 15-Mar-24 15-Mar-33 0.10 0.10 94.35% 3.98% $nil 3-Oct-24 3-Oct-25 3-Oct-29 0.07 0.10 150.63% 3.28% $nil Volatility was estimated by using the historical volatility of the Company. The expected life in years represents the period of time that options granted are expected to be outstanding. The risk-free rate was based on the rate prescribed for Canada government bonds as of the date of the Financial Statements with a remaining term equal to the expected life of the options. RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 37 The number of stock options and weighted average exercise prices as at March 31, 2025, and December 31, 2024, are as follows: Options Weighted average exercise price # $ Balance Outstanding, January 1, 2024 16,960,931 0.80 Issued 1,925,000 0.12 Expired (3,197,002) 2.70 Forfeited (102,500) 0.21 Balance Outstanding, December 31, 2024 15,586,429 0.33 Expired (371,429) 1.00 Balance Outstanding, March 31, 2025 15,215,000 0.32 Exercisable Exercisable as at March 31, 2025 12,801,460 0.36 Exercisable as at December 31, 2024 12,828,097 0.38 Stock Options are measured at fair value at the date of grant and are expensed to share based compensation over the option’s vesting period. For the three months ended March 31, 2025, the Company had share-based compensation expenses relating to stock options amounting to $21 (March 31, 2024; $50). The following reflects remaining contractual life for outstanding and exercisable options as at March 31, 2025: Outstanding Exercisable Expiry date Exercise price Options Remaining contractual life Options Remaining contractual life $ # (years) # (years) 1-Apr-25 1.00 125,000 - 125,000 - 6-Jul-25 1.10 75,000 0.27 75,000 - 10-Sep-25 0.66 15,000 0.45 15,000 0.27 1-Oct-25 0.65 3,400,000 0.50 3,400,000 0.45 12-Oct-25 0.65 50,000 0.53 50,000 0.50 18-Nov-25 0.67 150,000 0.64 150,000 0.53 3-Dec-25 0.75 800,000 0.68 800,000 0.64 12-Nov-26 0.63 400,000 1.62 400,000 0.68 26-Nov-26 0.63 75,000 1.66 75,000 1.62 7-Oct-27 0.14 6,500,000 2.52 6,500,000 1.66 7-Oct-27 0.20 200,000 2.52 200,000 2.52 7-Oct-27 0.50 250,000 2.52 250,000 2.52 3-Oct-29 0.10 1,925,000 4.51 240,625 2.52 15-Mar-33 0.10 1,250,000 7.96 520,835 4.51 Total 15,215,000 2.59 12,801,460 2.03 RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 38 23. EARNINGS (LOSS) PER SHARE Earnings/loss per share for the period ended March 31, 2025, and 2024 is as follows: 3 months ended 31-Mar-25 3 months ended 31-Mar-24 Outstanding common shares 470,221,901 470,221,901 Earnings (loss) from continuing operations attributable to RWB shares ($) (9,787) (2,912) Weighted average number of shares outstanding, basic and dilutive 470,221,901 470,221,901 Earnings/loss per share, basic and diluted ($) (0.02) (0.01) No stock options have been included in the computation of diluted loss per share as their effect would be anti-dilutive. 24. REVENUES The Company generates revenue through three distinct channels: Retail, Distribution and Licensing. Revenues by channel for the period ended March 31, 2025, and 2024 is as follows: 3 months ended 31-Mar-25 3 months ended 31-Mar --- -24 $ $ Distribution 13,263 16,066 Licensing 845 269 Retail 5,084 3,199 Total revenue 19,192 19,534 Revenue as a percentage of total sales for the period ended March 31, 2025, and 2024 is as follows: 3 months ended 31-Mar-25 3 months ended 31-Mar-24 % % Distribution 69% 82% Licensing 4% 2% Retail 27% 16% Total revenue 100% 100% During the period ended March 31, 2025, and 2024, the Company did not have any contracts where the period between the transfer of the promised goods to the customer and payment by the customer exceeds one year. As a result, the Company has not adjusted any of the transaction prices for the time value of money. The period ended March 31, 2025, the Company had one significant customer representing 21% of total revenues earned by the Company (March 31, 2024; no significant customers). RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 39 25. GENERAL AND ADMINISTRATIVE EXPENSES The Company’s general and administrative expenses for March 31, 2025, and 2024 were as follows: 3 months ended 31-Mar-25 3 months ended 31-Mar-24 $ $ Salaries and wages 3,671 3,950 Facilities expense 231 230 Professional fees 1,169 1,262 Office and administrative fees 665 359 Travel expense 87 106 Licenses and permits 192 52 Insurance 417 283 Penalty and late fees 29 9 Tax expense - 149 Total general and administrative expenses 6,461 6,400 26. NON-CONTROLLING INTERESTS RWB FLORIDA, LLC AND RED WHITE & BLOOM, FLORIDA, INC. RWB Florida, LLC (“Florida LLC") is a member-managed limited liability company that serves as the sole shareholder of Red White & Bloom Florida Inc. (“Florida Inc”). The Florida Inc. is responsible for all management, operational, and day-to-day commercial activities conducted by the Company in the state of Florida. Membership Structure The LLC has issued two classes of membership interests: • Class A: Held exclusively by RWB • Class B: RWB maintains a 54% controlling interest, with the remaining 46% held by multiple minority members Non-Controlling Interests Several Class B members collectively own 23% of the issued and outstanding Class B membership interests, representing the non- controlling interest in both Florida LLC and Florida Inc. No individual non-controlling Class B member holds an ownership stake exceeding 4.99% of total issued and outstanding interests. Regulatory Compliance Florida Inc. holds a Medical Marijuana Treatment Center ("MMTC") license issued by the Florida Department of Health, Office of Medical Marijuana Use ("OMMU") and operates pursuant to the MMTC license throughout the State of Florida. RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 40 The following table presents the summarized financial position before intragroup eliminations for non-wholly owned subsidiaries at March 31, 2025, and December 31, 2024: As at 31-Mar-25 As at 31-Dec-24 $ $ Assets Current 9,655 16,655 Non-current 194,559 95,737 Total assets 204,214 112,392 Liabilities Current 11,307 62,733 Non-current 110,777 31,938 Total liabilities 122,084 94,671 Net Assets 82,130 17,721 The following summarizes the financial results before intragroup eliminations for non-wholly owned subs --- idiaries for the period ended March 31, 2025, and 2024: 3 months ended 31-Mar-25 3 months ended 31-Mar-24 Net Income (loss) (6,209) (6,092) Interests Controlling interests – 77% (4,791) (4,207) Non-controlling interests – 23% (1,418) (1,885) 27. RELATED PARTY TRANSACTIONS A. KEY MANAGEMENT Key management personnel include those persons having authority and responsibility for planning, directing, and controlling the activities of the Company as a whole. The Company has determined that key management personnel consist of certain executive members of the Company’s Board of Directors and corporate officers. Remuneration attributed to key management personnel for the three months ended March 31, 2025, and 2024, is as follows: 3 months ended 31-Mar-25 3 months ended 31-Mar-24 $ $ Management salaries, bonuses, and other benefits 265 296 Consulting fees by a company controlled by a director of the company 15 51 Share-based payments – officers 4 22 Share-based payments – directors - 10 Total 284 379 RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 41 B. AMOUNTS DUE TO/FROM RELATED PARTIES • Included in accounts payable and accrued liabilities is $1,262 in management salaries, bonuses, and other benefits to be paid out in future periods (2024; $1,090) • The CPIL Convertible Note represented an obligation to an entity affiliated with the Company's President. This note was originally issued with a two-year term, scheduled to mature on September 15, 2024, bearing interest at 8% per annum. Upon initial recognition, the Company valued the CPIL Convertible Note using the residual method, allocating $14,893 to long-term convertible debt liability and $2,107 to convertible debt reserve. The liability portion amortized over the two- year loan term at an effective interest rate of 16.43%. At maturity, due to the expiry of the embedded conversion rights, the Company transferred the convertible debt reserve to contributed surplus. The matured debt was formally amended on February 1, 2025, with the amendments retroactively effective as of September 15, 2024, transforming the CPIL Convertible Note into a note payable (the “CPIL Note”). The terms were amended to extend the maturity date to September 12, 2027, adjust and align the annual interest rate to 12%, defer principal and interest payments to the respective maturity dates, and remove convertible features. For complete details regarding outstanding amounts and terms, the reader is referred to note 22. • The VMOS Convertible Note represents an obligation to an entity affiliated with a member of the Company's Board of Directors. Originally scheduled to mature on April 22, 2024, the note was formally amended on December 31, 2024, with the amendment retroactively effective as of June 4, 2024. The amendment extended the maturity date to November 30, 2026, deferred the payment of interest and principal to the next maturity date, and increased the annual interest rate from 8% to 12%. Upon amendment, the Company reassessed the note's value using the Binomial lattice method based on the Cox-Ross-Rubinstein market model, resulting in no derivative liability. For complete details regarding outstanding amounts and terms of the VMOS Convertible Note, the reader is referred to note 22. • For the period ending March 31, 2025, liabilities owin --- g to RGR relating to the settlement of the RGR Credit Facility amounting to $12,722 are included in accounts payable accrued liabilities. This amount was subsequently settled to RGR on April 30, 2025. Refer to note 15 and 22, and to Related Party Transactions below for additional information on the amounts included in accounts payable and accrued liabilities pertaining to the RGR Credit Facility settlement. • The Company has identified other close family members of key management personnel that currently represent lenders to the Company (note 22) during its ongoing review of related party disclosures in accordance with IFRS and Securities and Exchange Commission protocols. The list of family members is non exhaustive and does not preclude other family members from being considered as close family members. The reader is referred to section D and E below for a continuity schedule of notes payable and convertible debentures payable to the individuals or entities identified during the review. C. RELATED PARTY TRANSACTIONS Related party transactions during the period ended March 31, 2025 • On March 5, 2025, the Company’s wholly owned subsidiary, Red White & Bloom Michigan (2024), Inc., was confirmed by the presiding court as the successful bidder for the tangible assets of Pharmaco Inc. The approved purchase price for the assets was US$8,850 (C$12,722). The approved transaction was subject to an appeal period, mandated by the court appointed receiver, to allow for objections from unsecured creditors for consideration by the court. This court-supervised sale process was initiated following Pharmaco’s placement into receivership on December 26, 2024, due to uncured defaults under its senior secured loan agreement with Royal Group Resources Ltd. (“RGR”), referred to as the RGR Credit Facility (see Note 22). The receivership was intended to protect the interests of the secured lender and facilitate the orderly liquidation of Pharmaco’s assets. The court’s approval of the asset sale became final on March 28, 2025, upon the expiry of the mandated appeal period. During the appeal period, there were no further objections filed by creditors of Pharmaco Inc., thereby confirming the validity and enforceability of the aforementioned asset purchase agreement. RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 42 • On March 29, 2025, a Release and Discharge Agreement was executed between RGR and Pharmaco Inc. Under the terms of this agreement, RGR agreed to terminate the RGR Credit Facility, release Pharmaco and its affiliated credit parties from all repayment obligations and discharge all security interests previously held under the facility. In consideration for the release and discharge of the RGR Credit Facility, RGR accepted the US$8,850 (C$12,722) in proceeds from the court- approved asset sale as full and final repayment. Upon execution of the Release and Discharge Agreement, the US$8,850 (C$12,722) purchase price owed by Red White & Bloom Michigan (2024), Inc., the successful court approved bidder, became payable directly to RGR for settlement of the RGR Credit Facility and a gain on debt settlement of US$6,804 (C$9,770) was recorded by the Company in discontinued operations (note 32), representing the excess of the facility's carrying value over the settlement amount. T --- he amount due to RGR has been included in accounts payable and accrued liabilities as at March 31, 2025, and subsequently settled on April 30, 2025. • Officers and Directors of the Company held an aggregate of 37,219,510 common shares and 6,450,000 stock options. As at March 31, 2025, 5,720,835 of these stock options are fully vested. • The Company expensed a nominal amount stock-based compensation related to stock options held by directors and officers. • The ELL Note (note 22) is supported by a guarantee provided by DICL, a related party lender, which was subject to a fee payable to DICL by the Company. The fee was calculated based on a percentage of the principal of the ELL Note as is standard practice within capital markets for a transaction of this nature. • On February 1, 2025, the Company successfully concluded negotiations with various individuals or entities identified as close family members as interpreted above, to renew multiple previously issued notes payable and convertible debentures, originally scheduled to mature on September 12, 2024. These amendments were made retroactively effective as of September 15, 2024. The amended related party notes include: (i) CAD$2,710,000 BJMDSD Note (renewed as the “BJSD Note”), (ii) USD$25,885,000 RGR Note (renewed as the “RGR Note A”), (iii) USD$6,349,000 SDIL Note (renewed as the “SDIL Note A”), (iv) USD RGR Grid Note, (v) CAD RGR Grid Note, (vi) CPIL Convertible Note (renewed as the “CPIL Note”), (vii) DICL Convertible Note (renewed as the “DICL Note”), and (viii) SDIL Convertible Note (renewed as the “SDIL Note B”). Each of these instruments was amended to extend the maturity date to September 12, 2027, standardize the annual interest rate to 12%, defer all principal and interest payments to maturity, and remove convertible features where applicable. Details of the terms are disclosed in note 22 of these Financial Statements. To review the previous terms of the aforementioned debts, , the reader is referred to the Company’s most recently filed audited financial statements for the period ended December 31, 2024. • Refer to sections D and E below for debt related transactions involving individuals or entities identified as close family members as interpreted above. Related party transactions during the year ended December 31, 2024 • Officers and Directors of the Company held an aggregate of 37,220 common shares and 6,450 stock options. As at December 31, 2024, 5,167 of these stock options were fully vested. • During the period, 22 stock options held by Directors of the Company expired. • The Company expensed $107 in stock-based compensation related to stock options held by directors and officers. • The ELL Note (note 22) is supported by a guarantee provided by DICL, a related party lender, which was subject to a fee payable to DICL by the Company. The fee was calculated based on a percentage of the principal of the ELL Note as is standard practice within capital markets. • Refer to sections D and E below for debt related transactions involving individuals or entities identified as close family members as interpreted above. RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2025 AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 43 D. RELATED PARTY NOTES PAYABLE CONTINUITY SCHEDULE A notes payable continuity schedule for related party short-term notes payable for pe --- riod ended March 31, 2025, is as follows: Balance, 01-Jan-25 Additions Additions due to amendments Accrued interest Interest payments Principal payments (Gain)/loss on amendments FX (gain)/loss Balance, 31-Mar-25 RGR Note C 33,541 - - 1,014 - - - (29) 34,526 BJSD Note 3,214 - - 94 - - (181) - 3,127 CPIL Note - - 20,644 415 - - - - 21,059 RGR Note A 52,038 - - 1,492 - - (4,502) (20) 49,008 RGR CAD Grid Note 56,946 1,500 - 1,762 - - - - 60,208 RGR USD Grid Note 75,902 2,873 - 2,352 - - - (76) 81,051 SDIL Note A 10,091 - - 293 - - (699) (5) 9,680 DCIL Note - - 10,312 205 - - - (76) 10,441 SDIL Note B - - 10,312 205 - - - (76) 10,441 Total 231,732 4,373 41,268 7,832 - - (5,382) (282) 279,541 Continuity of the outstanding notes payable held by the Company for the year ended December 31, 2024, is as follows. Balance, 01-Jan-24 Additions Accrued interest Accreted interest Interest Payments Principal Payments Transaction costs (Gain)/loss on amendments FX (gain)/loss Balance, 31-Dec-24 RGR Note C 25,138 - 4,045 - - (27) 1,842 (67) 2,610 33,541 CAD$2,710,000 BJMDSD Note 3,029 - 461 12 (138) (150) - - - 3,214 USD$25,885,000 RGR Note 41,454 - 6,490 124 - - - - 3,970 52,038 RGR CAD Grid Note 31,098 23,062 5,801 - (15) (3,000) 50 (50) - 56,946 RGR USD Grid Note 30,293 34,649 6,189 - - - 50 (50) 4,771 75,902 USD$6,349,000 SDIL Note 9,366 - 1,323 73 (460) (1,032) - - 821 10,091 Total 140,378 57,711 24,309 209 (613) (4,209) 1,942 (167) 12,172 231,732 RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 44 E. RELATED PARTY CONVERTIBLE DEBT CONTINUITY SCHEDULE Below is the continuity schedule for related party convertible debt for the year ended March 31, 2025: VMOS Convertible Note DICL Convertible Note SDIL Convertible Note CPIL Convertible Note Total $ $ $ $ $ Balance, January 1, 2025 2,083 10,143 10,143 20,439 42,808 Interest accrued 47 102 102 205 456 Amendment - (10,312) (10,312) (20,644) (41,268) Effects of foreign exchange (1) 67 67 - 133 Balance, March 31, 2025 2,129 - - - 2,129 Below is the continuity schedule for related party convertible debentures for the year ended December 31, 2024: VMOS Convertible Note DICL Convertible Note SDIL Convertible Note CPIL Convertible Note Total $ $ $ $ $ Carrying Value, December 31, 2023, restated 1,739 8,378 8,378 18,030 36,525 Interest accrued 37 829 829 1,672 3,367 Interest Accretion 20 153 153 737 1,063 Extinguishment (1,860) - - - (1,860) Amendment 1,860 - - - 1,860 Interest accrued post-amendment 129 - - - 129 Effects of foreign exchange 158 783 783 - 1,724 Carrying Value, December 31, 2024 2,083 10,143 10,143 20,439 42,808 The Company did not have any related party derivative liabilities as at March 31, 2025. Derivative liabilities associated with related party convertible debentures for the year ended December 31, 2024 is as follows: DICL Convertible Note SDIL Convertible Note Total $ $ $ Balance, December 31, 2023, restated (337) (337) (674) Gain on FMV adjustments of derivative liability 345 345 690 Effects of Foreign exchange (8) (8) (16) Balance, December 31, 2024 - - - See note 22 for corresponding terms and conditions of each of the debt related notes. RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2025 AND 2024 (In thousands of Canadian Doll --- ars, except number of shares and per share amounts) Page | 45 28. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT A. FAIR VALUE OF FINANCIAL INSTRUMENTS The fair values of other financial instruments, which include accounts receivable, accounts payable and accrued liabilities, notes receivable, and notes payable, approximate their carrying values due to the relatively short-term maturity of these instruments. The three levels of the fair value hierarchy are: • Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities; • Level 2 – Inputs other than quoted prices that are observable for the asset or liability, directly or indirectly; and • Level 3 – Inputs that are not based on observable market data. In determining the fair value of investments, Level 3 input includes subjective estimates in assessing indicators of impairment. B. CREDIT RISK Credit risk is the risk of loss associated with a counterparty’s inability to fulfill its payment obligations. Financial instruments that are subject to such risk include cash and cash equivalents, accounts receivable and notes receivable. Accounts receivable are amounts due by customers purchasing through the Company’s distribution channel, who have exhibited a strong credit standing and continued good payment history with the Company. Notes receivable are amounts due from third party debtors (note 10). The Company limits its exposure to credit loss on cash and cash equivalents by placing its cash with reputable financial institutions. Deposits held with these institutions may exceed the amount of insurance provided on such deposits. As at March 31, 2025, the Company held an accounts receivable balance of $16,394 (2024; $16,112). Included in this balance is a provision for expected credit losses (“ECL”) in the amount of $9,355 (2024; $9,186). The reader is referred to note 9 for details relating to the Company’s accounts receivable and ECL provision for the period ended March 31, 2025, and 2024. As at March 31, 2025, the Company held a note receivable balance of $17,588 (2024: $15,836) (note 10). C. LIQUIDITY RISK Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company manages its liquidity risk by forecasting cash flows from operations and anticipated investing and financing activities. As at March 31, 2025, the Company had a cash and cash equivalents balance of $5,083 (2024; $7,285) available to apply against short-term business requirements and current liabilities of $79,211 (2024; $343,033), including short-term lease obligations (note 18), short term notes and convertible debentures (note 22), and income taxes payable and other current liabilities, noting that included in the current liabilities reported as of March 31, 2025 are short-term notes payable $3,047 and short-term convertible debentures $4,558. In addition, a total of $ 16,472 is included in Liabilities Held for Sale representing liabilities in discontinued operations. The Company also continues to pursue other means of debt or equity financing to further mitigate its liquidity risk in addition to seeking out opportunities to monetize captive or redundant tangible assets should they present themselves. Finally, the Company maintains a constant vigilance on proactively exploring and implementing ways to improve its cash flow through the prioritization of strategic operating initiatives with greater expected returns and targeting reductions in --- operating and administrative costs as feasible. RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 46 D. INTEREST RATE RISK Interest rate risk is the risk that future cash flows will fluctuate as a result of changes in market interest rates. Interest earned on cash is at nominal interest rates, and therefore the Company does not consider the interest rate risk for cash to be significant. As at March 31, 2025, and 2024, the interest rate on notes payable and convertible debentures are fixed based on the terms agreed to within the respective debt contracts. As such, the Company’s interest rate risk exposure is limited to the aforementioned interest rate terms within the aforementioned contracts. E. FOREIGN CURRENCY RISK The Company is exposed to foreign currency risk arising from exchange rate fluctuations and their volatility, primarily affecting the timing and valuation of accounts payable settlements. Management mitigates this risk through prompt creditor payments and active monitoring of currency market movements. Additional exposure stems from maintaining balances and conducting transactions in currencies different from the Company's functional currency. With operations in jurisdictions using the United States Dollar (USD) and US-based subsidiaries, the Company faces risks from: • Translation exposure when consolidating US subsidiary financial statements • Transaction exposure from intercompany loans, dividends, and cross-border transactions • Economic exposure affecting competitive positioning in US markets For the three months ended March 31, 2025, the Company incurred net income and other comprehensive income of $6,074 (March 31, 2024; $3,267), including the impact of unrealized foreign exchange losses on intercompany balances amounting to $196 (2024; $6,865). These unrealized foreign exchange losses arise from the translation of intercompany monetary balances denominated in foreign currencies between the Company's various subsidiaries with different functional currencies. Under IAS 21, The Effects of Changes in Foreign Exchange Rates, exchange differences arising on intercompany monetary items between entities with different functional currencies are recognized in profit or loss and are not eliminated on consolidation, as they represent genuine economic exposure to foreign currency fluctuations. Currently, the Company does not utilize derivative financial instruments or hedging strategies to manage these foreign currency risks, which may impact reported earnings and cash flows. As at March 31, 2025, and December 31, 2024, the Company was exposed to the following foreign currency risk: As at 31-Mar-25 As at 31-Dec-24 $ $ Financial assets denominated in foreign currencies (USD) 55,382 388,614 Financial liabilities denominated in foreign currencies (USD) (210,340) (205,616) Net exposure (154,958) 182,998 A three (3%) and ten (10%) percent increase in the US dollar exchange rate relative to the Canadian dollar would increase the Company’s net income for the period ended March 31, 2025, by $1,395 and $4,649, respectively (2024; $1,535 and $5,115 increase in net loss, respectively). RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2025, AND 2024 (In thousands of Canadian Dollars, e --- xcept number of shares and per share amounts) Page | 47 F. CAPITAL RISK MANAGEMENT The Company monitors its capital structure and adjusts according to market conditions in an effort to continue to meet its financial and strategic objectives. The Company may manage its capital structure by restructuring existing debt, issue new debt or shares (common or preferred), or repurchasing issued and outstanding shares (common or preferred). The capital structure is reviewed by management and the board of directors on an ongoing basis. The Company manages capital through its financial and operational forecasting processes. The Company's equity is comprised of share capital, contributed surplus, stock option reserves, and accumulated deficit. As at March 31, 2025, the Company has shareholders' deficit of $165,794 (2024; $173,029). Included in the consolidated statements of financial position as of March 31, 2025, is an accumulated deficit of $503,072 (2024; $ 511,134) including the impact of non-cash impairments totaling $257,897 realized in fiscal years 2021 through 2023. The Company's capital management objectives, policies and processes have remained unchanged during the period ended March 31, 2025. The Company is not subject to any external capital requirements. 29. CONTINGENCIES AND COMMITMENTS A. CLAIMS AND LITIGATION On September 11, 2025, the Company resolved litigation initiated by a former supplier relating to a prior supply relationship. The parties reached a mediated settlement under which RWB agreed to pay USD $100 by October 6, 2025, with final dismissal of claims entered with the presiding court authority. The settlement fully resolved all claims and counterclaims with no admission of liability by either party. On August 11, 2025, the Company reached a settlement with a former consultant. The claims were initiated to resolve competing allegations regarding property ownership interests and related obligations. The parties entered into a binding mediation agreement, with RWB agreeing to pay USD $400 by September 25, 2025. In exchange, deeds to certain properties were conveyed and all claims were dismissed with prejudice, with mutual releases provided. In the normal course of business, the Company is involved in various legal proceedings, the outcomes of which cannot be determined at this time, and, accordingly, no provision has been recorded in these condensed interim Condensed Interim Consolidated Financial Statements. Management believes that the resolutions of these proceedings will not have a material unfavorable effect on the Company's condensed interim Condensed Interim Consolidated Financial Statements. B. CONTINGENCIES The Company may be contingently liable with respect to claims incidental to the ordinary course of its operations. In the opinion of management, as of the date of the financial statements, and based on management's consultation with legal counsel, the ultimate outcome of any such matters will not have a material adverse effect on the Company. Accordingly, no provision has been made in these condensed interim Condensed Interim Consolidated Financial Statements for losses, if any, which might result from the ultimate disposition of these matters should they arise. The Company continues to proactively monitor risks in this regard to ensure it has accounted for any and all material liabilities that may arise. RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERI --- OD ENDED MARCH 31, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 48 The Company’s operations are subject to a variety of local and state regulations. Failure to comply with one or more of those regulations could result in fines, sanctions, restrictions on its operations, or losses of licenses and permits that could result in the Company ceasing operations in that specific state or local jurisdiction. While management believes that the Company is in compliance with presiding municipal and state regulations, these regulations continue to evolve and are subject to differing interpretations. As a result, the Company may be subject to costs associated with a potential breach of the aforementioned regulations that could include but are not limited to fines, penalties, taxes, or operating restrictions. 30. SEGMENTED RESULTS Operating segments are components of the Company that engage in business activities which generate revenues and incur expenses (including intercompany revenues and expenses related to transactions conducted with other components of the Company). The operations of an operating segment are distinct, and the operating results are regularly reviewed by the chief operating decision maker ("CODM") for the purposes of resource allocation decisions and assessing its performance. Reportable segments are operating segments whose revenues, profit (loss), or total assets exceed ten percent or more of those of the combined entity. Key measures used by the CODM’s to assess performance and make resource allocation decisions include revenues, gross profit and net (loss) income. The Company’s operating segments consist of (1) Corporate, (2) Distribution, (3) Licensing, (4) Retail and (5) Other. Comparative revenues, cost of goods before fair value adjustments, fair value adjustments, operating expenses and other expenses have been reclassified to confirm to the current period’s financial statement presentation. The following exhibits summarize the condensed interim consolidated financial information of the Company’s reportable segments for the period ending March 31, 2025, and 2024. 3 months ended 31-Mar-25 Corporate Distribution Licensing Retail Other Consolidated Sales revenue - 13,263 845 5,084 - 19,192 Cost of goods sold - 8,474 56 3,359 - 11,889 Gross profit before fair value adjustments - 4,789 789 1,725 - 7,303 Gross profit % before fair value adjustments 0% 36% 93% 34% 0% 38% Unrealized changes in fair value of biological assets - (50) - 224 - 174 Realized fair value amounts included in inventory sold - (2,412) - (785) - (3,197) Gross profit after fair value adjustments - 2,327 789 1,164 - 4,280 Gross profit % after fair value adjustments 0% 18% 93% 23% 0% 22% Total operating expenses 1,257 4,365 320 2,926 126 8,994 Total other expenses (income) 1,402 (547) 3 3,154 629 4,641 Profit (loss) before Income Taxes (2,659) (1,491) 466 (4,916) (755) (9,355) Income tax - (1,229) 41 65 (727) (1,850) Net profit (loss) from continuing operations (2,659) (2,720) 507 (4,851) (1,482) (11,205) Loss from discontinued operations - - - - 17,849 17,849 Net loss for the year (2,659) (2,720) 507 (4,851) 16,367 6,644 Attributed to: Red White and Bloom (2,659) (2,720) 507 (3,433) (1,482) (9,787) Non-controlling interests - - - (1,418) - (1,418) As at 31-Mar-25 Intercompany Balances 337,471 (267,166) (38,436) (13,901) (66,057) (48,089) Total Assets 503,474 31,135 3,713 219,545 (467,595) 290,272 Total --- non-current assets 164,645 234,421 39,159 209,202 (463,994) 183,433 Total liabilities 233,910 22,906 (641) 129,666 70,227 456,067 Total non-current liabilities 229,607 1,206 (622) 110,457 36,206 376,855 % of sales revenue 0% 69% 4% 26% 0% 100% % of loss for the period 26% 27% 0% 47% 0% 100% % of income for the period 0% 0% 3% 0% 97% 100% RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 49 3 months ended 31-Mar-24 Corporate Distribution Licensing Retail Other Consolidated Sales revenue - 16,066 269 3,199 - 19,534 Cost of goods sold - 9,423 159 3,112 - 12,694 Gross profit before fair value adjustments - 6,643 110 87 - 6,840 Gross profit % before fair value adjustments 0% 41% 41% 3% 0% 35% Unrealized changes in fair value of biological assets - (85) - (2,982) - (3,067) Realized fair value amounts included in inventory sold - (256) - (677) - (933) Gross profit after fair value adjustments - 6,302 110 (3,572) - 2,839 Gross profit % after fair value adjustments 0% 39% 41% -112% 0% 15% Total operating expenses 1,708 4,795 446 3,157 - 10,106 Total other expenses (income) (5,962) 439 (1) 2,498 - (3,026) Profit (loss) before Income Taxes 4,254 1,068 (335) (9,227) - (4,241) Income tax - (721) (23) 215 (27) (556) Net profit (loss) from continuing operations 4,254 347 (358) (9,012) (27) (4,797) Loss from discontinued operations - - - - (1,295) (1,295) Net loss for the year 4,254 347 (358) (9,012) (1,322) (6,092) Attributed to: Red White and Bloom 4,254 346 (359) (4,769) (27) (555) Non-controlling interests - - - (4,242) - (4,242) As at 31-Mar-24 Intercompany Balances 394,340 (234,860) (38,396) (65,349) (55,735) (0) Total Assets 560,509 68,756 1,777 183,967 (520,618) 294,391 Total non-current assets 164,645 234,913 39,159 209,822 (465,509) 183,029 Total liabilities 251,305 36,993 (595) 157,175 22,543 467,421 Total non-current liabilities - 1,298 (582) 108,271 15,400 124,388 % of sales revenue 0% 82% 1% 16% 0% 100% % of loss for the period 0% 0% 4% 96% 0% 100% % of income for the period 92% 8% 0% 0% 0% 100% Revenues and total assets/liabilities by geographic region for the period ended March 31, 2025, and 2024: Canada USA Canada USA Period ended March 31, 2025 For the period ended March 31, 2024 $ $ $ $ Total revenues 8,072 11,120 3,591 15,943 Canada USA Canada USA As at 31-Mar-25 As at 31-Dec-24 $ $ $ $ Total assets 46,042 244,232 111,156 183,235 Total liabilities 233,884 222,184 249,558 217,862 RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 50 31. DISCONTINUED OPERATIONS Discontinued operations of the Company’s wholly owned subsidiaries include Mid-American Growers, Inc., Real World Business Integration, LLC, Vista Prime Management, LLC, GC Ventures 2, LLC, Vista Prime 3, Inc, Royalty USA Corp, RWB Illinois, Inc, and Pharmaco Inc. Components of residual loss from discontinued operations for the period ended March 31, 2025, and 2024: 3 months ended 31-Mar-25 3 months ended 31-Mar-24 $ $ Revenue - 3,018 Cost of sales - 1,988 Gross profit (loss) - 1,030 General and administration 526 1,944 Sales and marketing - 56 Depreciation and amortization - 130 Bad debt expense (recovery) 4 (5) Loss from --- operations before other expenses (530) (1,095) Other expenses (income) (106) 228 Finance expense 510 12 Accreted interest: leases - 37 (Gain) loss on disposal - capital assets (788) 84 (Gain) loss on debt settlement (17,318) - Unrealized/realized (gain) loss on foreign exchange 18 - Net loss before taxes from discontinued operations 17,154 (1,456) Current income tax (recovery) expense (696) 271 Deferred income tax (recovery) expense - (432) Net loss from discontinued operations 17,850 (1,295) Net loss per share, basic and diluted on discontinued 0.04 (0.00) Weighted average number of outstanding common shares, basic and diluted 470,221,901 469,940,379 RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 51 32. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Changes in non-cash working capital items during the period ended March 31, 2025, and 2024 are as follows: Notes For the period ended 31-Mar-25 For the period ended 31-Mar-24 Items not involving cash: Accreted interest on leases 18 687 636 Depreciation of right-of-use assets 18 428 419 Depreciation of property, plant and equipment 16 1,125 1,178 Depreciation allocated to inventory 13 - 377 Gain on valuation of financial instruments 22 - (145) Accrued interest on notes payable 22 8,141 5,668 Accreted interest on notes 22 - 82 Accrued interest on convertible debentures 22 1,715 1,445 Accreted interest on convertible debentures 22 - 1,281 Accrued interest on credit facility held for sale 15,22 13 586 Finance Fees - 37 179 Accrued interest on interest receivable 10 (724) (150) Amortized discount on note receivable 10 - (59) Loan forgiveness on notes payable 22 (5,804) - Gain/(Loss) on Debt modification 22 - (100) Gain on investment 7 - (7,645) Stock based compensation 23 21 50 Realized fair value (gain) loss in cost of goods sold 13 3,197 933 Fair value adjustment on biological assets 14 (174) 3,067 Gain on discharge of credit facility in discontinued operation 15 (9,128) - Total Items not involving cash (466) 7,802 33. RECLASSIFICATIONS During the last quarter of 2024, the Company classified certain subsidiary operations as discontinued operations in accordance with IFRS 5. To enhance comparability, the accompanying the below tables present amounts that have been reclassified to conform with the current period presentation of discontinued operations. The following amounts have been reclassified from continuing operations to discontinued operations for all periods presented: • Revenues and expenses of the discontinued subsidiaries have been removed from their respective line items in the consolidated statements of profit and loss and presented separately as discontinued operations. • Cash flows of the discontinued subsidiaries have been separately disclosed as discontinued operations in the consolidated statements of cash flows Refer to note 15 for assets and liabilities held for sale and note 32 for net income (loss) related to discontinued operations. RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 52 A. RECLASSIFICATIONS IN THE CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND COMPREHENSIVE PROFIT AND PROFIT AND LOSS FOR THE THREE M --- ONTHS ENDED MARCH 31, 2024 For the three months ended 31-Mar-24 As previously reported Discontinued operations As reclassified $ $ $ Revenue Sales revenue 22,551 3,017 19,534 Cost of goods sold, before fair value adjustments 14,682 1,988 12,694 Gross Profit before fair market value adjustments 7,869 1,029 6,840 Unrealized changes in fair value of biological assets (3,067) - (3,067) Realized fair value amounts included in inventory sold (933) - (933) Gross profit after fair market value adjustments 3,869 1,029 2,840 Operating Expenses General and administration 8,203 1,803 6,400 Marketing expenses 1,262 55 1,207 Share-based compensation 50 - 50 Depreciation and amortization 1,091 129 962 Bad debt expense 1,488 - 1,488 Total Operating Expenses 12,094 1,987 10,107 Loss from operations before other expenses (8,225) (958) (7,267) Other expense (income) Interest earned on notes receivable (209) - (209) Interest income - - - Other income (666) (6) (660) Finance expense 179 - 179 Interest on credit facilities 586 - 586 Interest on convertible notes 1,445 - 1,445 Interest on promissory notes 5,666 - 5,666 Accreted interest on convertible notes 1,281 - 1,281 Accreted interest on promissory notes 82 - 82 Accreted interest, leases) 673 37 636 Acquisition costs 112 - 112 Business transaction costs 38 - 38 (Gain) loss on disposal of assets 235 - 235 Gain (loss) on valuation of financial instruments (145) - (145) Loss on debt extinguishment 100 - 100 (Gain) loss on settlement of debt (636) - (636) (Gain) loss on investments (7,645) - (7,645) Foreign exchange (4,092) - (4,092) Total other expenses (income) (2,996) 31 (3,027) Profit (loss) before income taxes (5,229) (989) (4,240) Current income tax expense (recovery) (1,170) (271) (899) Deferred income tax expense (recovery) 776 433 343 Net loss from continuing operations (5,623) (827) (4,796) Profit (loss) from discontinued operations (468) 827 (1,295) Net loss for the period (6,091) - (6,092) Translation adjustment (1,136) (10,494) 9,358 Net loss and Comprehensive profit (loss) (7,227) (10,494) 3,267 Net loss attributable to: Shareholders (3,739) (2,912) Non-controlling interests (1,884) (1,884) Net loss and comprehensive loss attributable to: Shareholders (5,343) 5,151 Non-controlling interests (1,884) (1,884) Net loss per share, basic and diluted (0.02) (0.02) Weighted average number of outstanding common shares, basic & diluted 469,521,901 469,521,901 RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 53 B. RECLASSIFICATIONS IN THE CONSOLIDATED STATEMENT OF CHANGES IN STATEMENT OF CASHFLOW FOR THE THREE MONTHS ENDED MARCH 31, 2024 For the three months ended 31-Mar-24 As previously reported Adjustments As reclassified Cash flow from operating activities: Net loss for the period (6,091) - (6,091) Items not involving cash: 7,838 (36) 7,802 Changes in non-cash working capital items: - - - Accounts receivable 3,639 - 3,639 Short-term notes receivable - - - Prepaid expenses 1,294 - 1,294 Deposits (937) - (937) Inventory (4,793) - (4,793) Biological Assets (1,040) - (1,040) Accounts payable and accrued liabilities (3,070) - (3,070) Current Income tax payable 997 0 997 Deferred income taxes (776) - (776) Other assets 421 - 421 Other liabilities 1,525 - 1,525 Net cash provided by (used in) operating activities (993) (36) (1,029) --- Cash flows from investing activities Acquisition of property, plant and equipment (123) - (123) Acquisition of Intangible assets - - - Acquisition of right-of-use assets (190) - (190) Issuance of notes receivable - - - Interest receipts on notes receivable - - - Principal receipts on notes receivable - - - Acquisition of Aleafia 1,090 (81) 1,009 Net cash provided by (used in) investing activities 777 (81) 696 Cash flow from financing activities: Issuance of shares, net - - - Advances on notes payable 7,688 - 7,688 Interest payments on notes payable (263) - (263) Principal payments on notes payable (27) - (27) Amendment of convertible debt - - - Addition to leases 190 - 190 Principal payments on lease obligations (104) - (104) Interest payments on lease obligations (673) 37 (636) Net cash provided by (used in) financing activities 6,811 37 6,848 Foreign exchange affecting cash equivalents (5,296) 1 (5,295) Change in cash during the period 1,299 (79) 1,220 Cash equivalents, beginning of year 2,251 0 2,251 Cash, end of period 3,550 (79) 3,471 RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 54 34. SUBSEQUENT EVENTS A. PHARMACO RECEIVERSHIP & SALE OF ASSETS Pharmaco Inc. “(Pharmaco”), previously acquired by the Company on February 7, 2022, and classified as a disposal group as of December 31, 2024, was placed under receivership on December 26, 2024, following uncured defaults under its senior secured loan agreement with Royal Group Resources Ltd. (RGR). On March 5, 2025, the Company's subsidiary, Red White & Bloom Michigan (2024), Inc., was confirmed by the presiding court authority as the successful bidder for the assets of Pharmaco. The purchase price for the assets was US$8,850 (C$12,722). On March 28, 2025, the court approval of the bid for the assets was formally confirmed with the expiry of a mandated appeal period for the benefit of all unsecured creditors of Pharmaco. A Release and Discharge Agreement was executed on March 29, 2025, which facilitated the settlement of debt obligations, being the RGR Credit Facility, between RGR and Pharmaco. In consideration of the receipt of the asset sale proceeds of US$8,850 (C$12,722)., RGR agreed to terminate the RGR Credit Facility, release all borrowers from their repayment obligations, and discharge all security interests, with the understanding that Pharmaco's capacity to repay was limited to the US$8,850 (C$12,722) in sale proceeds. The excess, US$6,804 (C$9,770), was recorded by the Company as a gain on debt settlement and included in the (gain) loss from discontinued operations (note 32). As at March 31, 2025, sale proceeds amount remaining owing to RGR, as previously noted, upon execution of the Release and Discharge Agreement were included in accounts payable and accrued liabilities in the Company’s Statement of Financial Position and subsequently settled on April 30, 2025. On June 9, 2025, a motion to terminate the Pharmaco receivership was filed with the presiding court authority by the receiver-in- charge confirming that the receiver had, in its opinion, completed its mandate of liquidating substantially all of Pharmaco’s assets with the proceeds distributed to RGR. In addition, as of the motion filing date, substantially all of Pharmaco’s contracts and agreements had been terminated and the interests of --- unsecured creditors addressed to the fullest extent possible. On June 25, formal approval of the motion to terminate was issued by the presiding court. The financial impact of the termination of the receivership will be reflected in the Company’s 2025-Q2 consolidated financial statements. This Pharmaco receivership and the associated sale of its assets represents the completion of a strategic realignment and divestiture of the Company's Michigan retail operations which were deemed to be no longer be aligned with the Company's core business objectives. The Company remains focused on continuing to build and invest in its first mover distribution operations in the state of Michigan backstopped by the premium Platinum Vape branded product family. B. FINANCING ACTIVITIES Subsequent to the three months ended March 31, 2025, and up to the date of this filing, the Company was advanced USD $18,246 and CAD $2,500, under the RGR USD Grid Note and the RGR CAD Grid Note, respectively. Proceeds of the advances were used to fund working capital requirements and general corporate costs. C. STATUS AS AN US EXCHANGE ACT REGISTRANT AND US TRADING IN OUR COMMON STOCK In September 2023, the SEC commenced proceedings to de-register the Company's common stock under Section 12(j) due to historical filing deficiencies, resulting in a settlement and trading suspension order effective November 7, 2023, which prohibits U.S. resident shareholders from trading on OTCQX. Following a March 2024 settlement with the Company's former auditors and their subsequent alleged non-compliance with settlement terms, the Company engaged a new audit services provider to complete outstanding audit engagements. As of the report date, audit work is underway with targeted completion, including SEC consent requirements necessary to lift the Section 12(j) order, in early to mid-2026. The Company is concurrently working to reactivate its OTC marketplace listing and, upon resolution of compliance issues, intends to seek cancellation of its SEC registration as the Company does not require it to trade on the OTC given what will be its foreign private issuer status.