SEDAR Interim Financial Statements

Red White & Bloom Brands Inc. Condensed Interim Consolidated Financial Statements For the three and six months ended June 30, 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 30-Jun-25 As at 31-Dec-24 $ $ Current assets Cash and cash equivalents 8 2,749 7,285 Accounts receivable 9 12,003 16,112 Notes receivable 10 17,297 11,397 Prepaid expenses 11 1,952 1,993 Deposits 12 8,741 11,186 Inventory 13 41,953 47,556 Biological assets 14 1,462 1,728 Assets held for Sale 15 12,607 13,192 Other current assets - 959 913 Total current assets 99,723 111,362 Non-current assets Property, plant and equipment, net 16 41,281 43,644 Intangible assets, net 17 95,817 100,709 Right-of-use assets, net 18 17,383 17,976 Long-term notes receivables 10 3,000 4,439 Investments 7 2,479 2,479 Goodwill 17 13,067 13,782 Other non-current assets - 1,245 - Total non-current assets 174,272 18 --- 3,029 Total assets 273,995 294,391 Liabilities and Shareholders’ Equity Current liabilities Accounts payable and accrued liabilities 21 18,425 24,074 Short-term notes payable 22 2,948 207,419 Short-term convertible notes 22 4,422 45,187 Short-term lease obligations 18 763 701 Income taxes payable - 14,706 18,313 Liabilities held for Sale 15 14,121 46,199 Other current liabilities - 1,174 1,140 Total current liabilities 56,559 343,033 Non-current liabilities Long-term lease obligations 18 304,494 22,028 Long-term convertible notes 22 44,126 44,071 Long-term notes payable 22 21,803 39,157 Deferred tax liability - 17,743 19,009 Other non-current liabilities - 117 122 Total non-current liabilities 388,283 124,387 Total liabilities 444,842 467,420 Shareholders' equity Share capital 23 342,111 342,111 Contributed surplus - 17,358 17,315 Cumulative translation adjustment - (6,794) (21,888) Accumulated deficit - (521,127) (511,134) Non-controlling interest 27 (2,395) 567 Total shareholders' equity (deficit) (170,847) (173,029) Total liabilities and shareholders' equity 273,995 294,391 Nature of operations and going concern (note 1) Segmented results (note 31) Reclassifications (note 34) Subsequent events (note 35) Commitments and contingencies (note 30) 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 30-Jun 25 3 months ended 30-Jun 24 6 months ended 30-Jun-25 6 months ended 30-Jun-24 $ $ $ $ Revenue Sales revenue 25 16,405 20,757 35,597 40,291 Cost of goods sold, before fair value adjustments - 8,702 14,808 20,591 27,503 Gross Profit before fair market value adjustments 7,703 5,949 15,006 12,788 Unrealized changes in fair value of biological assets 14 (300) 3,155 (125) 87 Realized fair value amounts included in inventory sold (4,437) 895 (7,634) (38) Gross profit after fair market value adjustments 2,966 9,999 7,247 12,837 Operating Expenses General and administration 26 6,895 7,555 13,355 13,955 Marketing expenses - 1,348 1,136 2,643 2,343 Share-based compensation 23 22 57 43 106 Depreciation 16 623 513 1,235 1,475 Bad debt expense 9 578 731 1,184 2,219 Total Operating Expenses 9,466 9,992 18,460 20,098 Loss from operations before other expenses (income) (6,500) 7 (11,213) (7,261) Other expense (income) Interest earned on promissory notes 22 (861) (29) (1,584) (238) Interest income - - - (6) - Other income - (175) 687 (5,975) 27 Finance expense 22 (61) 95 (24) 274 Interest on credit facilities 22 - 604 - 1,190 Interest on convertible notes 22 1,308 1,654 3,023 3,099 Interest on promissory notes 22 8,840 6,062 16,981 11,728 Accreted interest on convertible notes 22 - 1,049 - 2,330 Accreted interest on promissory notes 22 - 84 - 166 Accreted interest, leases 18 661 645 1,348 1,281 Acquisition costs - 14 54 19 166 Business transaction costs 16 19 9 59 47 (Gain) loss on disposal of assets 22 - (8) - 227 Gain (loss) on valuation of financial instruments 22 - 80 - (65) Loss on debt extinguishment 22 - - - 100 (Gain) loss on settlement of debt 22 - (125) - (760) Gain on investments - - - 340 (7,645) Inventory write downs - 174 - 174 - Foreign exchange - 7,720 (3,066) 7,924 (7,157) Total other expenses (income) 17,639 7,795 2 --- 2,279 4,770 Loss before income taxes (24,139) (7,789) (33,491) (12,030) Current income tax expense - - (2,471) (2,145) (3,370) Deferred income tax recovery - 304 799 599 1,142 Net loss from continuing operations (23,835) (9,461) (35,037) (14,258) Profit (loss) from discontinued operations 33 4,234 (1,189) 22,084 (2,484) Net profit (loss) for the period (19,601) (10,650) (12,953) (16,741) Translation adjustment - (14,523) 26,537 (15,093) 14,908 Net income and Comprehensive income (34,124) 15,887 (28,046) (1,833) Net loss attributable to: Shareholders (22,559) (9,461) (32,075) (14,258) Non-controlling interests (1,276) - (2,962) - Net loss and comprehensive loss attributable to: Shareholders (32,848) 15,887 (25,084) (1,833) Non-controlling interests (1,276) - (2,962) - Net loss per share, basic and diluted (0.05) (0.02) (0.07) (0.03) Weighted average number of outstanding common shares, basic and diluted 470,221,901 474,738,811 470,221,901 469,521,901 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) 6 months ended 30-Jun-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) - - - 106 - - 106 Currency translation adjustments - - - - (24,968) - (24,968) Net loss from continuing operations - - - - - (14,258) (14,258) Net loss from discontinued operations (note 32) - - - - - (2,484) (2,484) Balance, June 30, 2024 470,221,901 342,111 7,450 17,226 (21,998) (501,662) (156,873) 6 months ended 30-Jun-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) (511,135) (173,030) Stock based compensation (note 23) - - - 43 - - 43 Currency translation adjustments - - - - 15,093 - 15,093 Net loss from continuing operations - - (2,962) - - (32,075) (35,037) Net loss from discontinued operations (note 32) - - - - - 22,084 22,084 Balance, June 30, 2025 470,221,901 342,111 (2,395) 17,358 (6,795) (521,126) (170,847) 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 6 months ended 30-Jun-25 6 months ended 30-Jun-24 $ $ Cash flow from operating activities: Net loss for the period (12,953) (16,741) Items not involving cash: 4,888 15,727 Changes in non-cash working capital items: Accounts receivable 9 3,517 (402) Prepaid expenses 11 (51) (773) Deposits 12 1,952 (4,256) Inventory 13 4,154 (3,276) Biological Assets 14 (7,563) (3,251) Accounts payable and accrued liabilities 21 (4,902) (1,805) Current Income tax payable - (2,657) 3,581 Deferred income taxes - (281) (1,704) Other assets - (1,327) 135 Other liabilities - 1,617 2,008 Net cash provided by (used in) operating activities (13,606) (10,757) Cash flows from investing activities Acquisition of property, plant and equipment in held for sale 15 (1,510) (1,125) --- Acquisition of Intangible assets 18 - (197) Acquisition of right-of-use assets 10 (1,138) 1,009 Advances on notes receivable 10 (6,105) - Interest receipts on notes receivable 10 169 9 Principal receipts on notes receivable 10 2,214 - Net cash provided by (used in) investing activities (6,370) (304) Cash flow from financing activities: Issuance of promissory note - 5,750 Advances on notes payable 2 20,058 31,767 Interest payments on notes payable 22 (112) (1,458) Principal payments on notes payable 22 (649) (3,027) Settlement of credit facility in discontinued operations (12,723) - Addition to leases 18 1,141 192 Principal payments on lease obligations 18 (94) (245) Interest payments on lease obligations 18 (1,348) (1,281) Net cash provided by (used in) financing activities 6,273 31,698 Foreign exchange affecting cash equivalents 9,167 (8,256) Change in cash during the period 8 (4,536) 12,381 Cash equivalents, beginning of year 8 7,285 2,251 Cash, end of period 2,749 14,632 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 THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares 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 June 30, 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 June 30, 2025, the Company incurred accumulated net comprehensive losses of $ --- 521,127, (December 31, 2024; $511,134) since inception, including non-cash impairments of $257,897 realized in fiscal years 2021 through 2023. For the three and six months ended June 30, 2025, the Company incurred net loss and other comprehensive loss of $34,125, and $28,046 (2024; $15,887 income, and $1,833 loss), including the impact of unrealized foreign exchange losses on intercompany balances amounting to $7,702 and $7,989 for each period (2024; $2,481 and $9,212). 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 June 30, 2025, was $43,164 (December 31, 2024; $231,671 deficit). During the six months ended June 30, 2025, net cash used in operations was $13,606 (2024; 10,757). 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 THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares 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 three and six months ended June 30, 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 loa --- n 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 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 34 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 THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares 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 30-June-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% R --- WB 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 THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares 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, a --- nd ‘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 Statements. 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 THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares 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 Financial 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 THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares 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 and six months ended June 30, 2024, the Company expensed $112, and $39, respectively, in acquisition costs relating to the Aleafia Acquisition. Revenue of the Purchased Entities post-acquisition for the three and six months ended June 30, 2024, amounted to $4,031 and $7,622, respectively and net loss totalled $1,576 and $3,127, respectively. If the Aleafia Acquisition had closed on January 1, 2024, the Company estimates it would have recorded consolidated revenues of $40,823 and a consolidated net loss of $17,245 for the six months ended June 30, 2024, resulting in an increase in revenue of $532 and an increase in net loss of $504 for six months ended June 30, 2024, including the impact of a bargain purchase amounting to $7,645 recorded by the Company to gain on investments during the period. 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 THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares per share amounts) Page | 14 8. CASH AND EQUIVALENTS Cash as at June 30, 2025, and December 31, 2024, includes the following: As at 30-Jun-25 As at 31-Dec-24 $ $ Cash in bank 1,945 6,622 Cash on hand 179 116 Cash in transit 396 318 Restricted cash 229 229 Total cash 2,749 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 process of being transferred to the Company's financial institution. 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 Notes (note 22). Net proceeds from these advances are included in cash and cash equivalents as at June 30, 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 June 30, 2025, and December 31, 2024, accounts receivable consists of the following: As at 30-Jun-25 As at 31-Dec-24 $ $ Trade receivables 18,469 22,466 Sales tax recoverable 1,110 1,106 Other receivables 1,865 1,726 Total receivables before expected credit losses 21,444 25,298 Provision for expected credit losses (9,441) (9,186) Ending Balance 12,003 16,112 Sales tax recoverable represents input tax credits on purchased goods or services. The Company assessed the carrying amount of trade receivables at June 30, 2025, for expected credit loss (“ECL”) and included an ECL of $9,441 (December 31, 2024; $9,186) against receivables. In the three and six months ended June 30, 2025, the Company expensed $468 and $1,074, respectively, to ECL and bad debt expense on its condensed interim consolidated statement of loss and other comprehensive income (loss) (2024; $$468 and $1,956, respectively). RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares per share amounts) Page | 15 The aging of the Company’s trade receivables and the corresponding ECL as at June 30, 2025, is as follows: Rate of expected credit loss: 0.41% 10.06% 27.80% 29.44% 62.29% 93.48% Total Aging classification Current 1-30 Days 31-60 Days 61-90 Days 91-120 Days 121+ Days $ $ $ $ $ $ $ Trade receivables 4,618 2,296 536 1,525 899 8,594 18,468 Expected credit losses – trade receivables (19) (231) (149) (449) (560) (8,033) (9,441) Net trade receivables 4,599 2,065 387 1,076 339 561 9,027 Sales tax recoverable 1,110 Other receivables 1,866 Balance, June 30, 2025 12,003 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. 10. NOTES RECEIVABLE Continuity of the outstanding notes receivable owed to the Company as at June 30, 2025, is as foll --- ows: Balance 24-Dec-31 Additions Accrued Interest Interest Payments Principal Payments FX (Gain)/Loss Balance 25- Jun 30 OPRC Note 3,000 - 120 (120) - - 3,000 PD Note 12,093 5,672 1,423 - (2,100) (791) 16,297 KMI Note 743 432 41 (49) (113) (54) 1,000 Total 15,836 6,104 1,584 (169) (2,213) (845) 20,297 Short-term 11,397 17,297 Long-term 4,439 3,000 RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares per share amounts) Page | 16 Continuity of the outstanding notes receivable owed to the Company as at December 31, 2024, is as follows: Balance 31-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 the 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+. 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 financi --- al 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 USD $1,000 by May RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares per share amounts) Page | 17 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 USD$1,000. In addition, the maximum principal limit was increased to USD $20,000 and the annual repayment threshold was reset to USD $8,000. These changes 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. 11. PREPAID EXPENSES As at June 30, 2025, and December 31, 2024, prepaid expenses are comprised of the following amounts: As at 30-Jun-25 As at 31-Dec-24 $ $ Prepaid operating licenses 1,540 1,741 Prepaid taxes - 4 Prepaid dues and subscriptions 3 129 Other prepaid fees 409 119 Total prepaid expenses 1,952 1,993 Prepaid operating licenses include licenses held by the Company’s various subsidiaries that allow for the legal c --- onduct 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. RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares per share amounts) Page | 18 12. DEPOSITS As at June 30, 2025, and December 31, 2024, the Company had the following deposits: As at 30-Jun-25 As at 31-Dec-24 $ $ Vendor deposits 7,889 10,202 Security deposits 330 333 Other deposits 522 651 Total deposits 8,741 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 June 30, 2025, the remaining committed balances included in vendor deposits is $2,570. The Company continues to work collaboratively with the arm’s length vendor towards settlement of their commitment under this contract. As of June 30, 2025, the Company has an additional $1,749 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. 13. INVENTORY The Company's inventory as at June 30, 2025, and December 31, 2024, consists of the following: As at 30-Jun-25 As at 31-Dec-24 $ $ Cannabis and CBD derivative finished goods 8,150 5,376 Raw materials 10,404 5,493 Cannabis and CBD derivative work in process 25,537 38,964 Consumables and non-cannabis merchandise 473 443 Inventory provisions (2,611) (2,720) Total 41,953 47,556 During the period ended June 30, 2025, the total inventory included in cost of sales was $19,676 (2024; $53,136), which includes an allocation for salaries and wages amounting to $2,697 (2024; $5,701). $2,242 of provisions at June 30, 2025, relate to inventory held by entities acquired as part of the Aleafia Acquisition (December 31, 2024; $2,463) (note 7). RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares per share amounts) Page | 19 14. BIOLOGICAL ASSETS The Company's biological assets consist of 11,222 plants growing as at June 30, 2025 (2024; 6,879). The continuity of biological assets is as follows: As at 30-Jun-25 As at 31-Dec-24 $ $ Carrying amount, beginning of year 1,728 829 Acquired from Aleafia Acquisition (note 7) - 1,136 Capitalized cost 2,293 11,940 Unrealized changes in fair value of biological assets (380) 856 Transferred to inventory (2,986) (13,092) Effects of foreign exchange 807 59 Carrying value, end of year 1,462 1,728 Sensitivity Analysis Significant unobservable assumptions used in the valuation of biological assets, including the sensitivities on changes in these assumpti --- ons and their effect on the fair value of biological assets, are as follows: For the period ended For the period ended 30-Jun-25 31-Dec-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) $2.88 $3.17 $6,763 $2.90 $3.18 $7,240 Yield by plant (grams) 96 106 6,017 359 395 6,490 Post-harvest costs ($/gram) $1.14 $1.25 $4,572 $1.11 $1.22 $5,017 15. 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. 1 Related party (note 28) RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares per share amounts) Page | 20 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 p --- roceeds from the court- approved asset sale as settlement in full. Upon execution of the 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. 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. Amounts owing to RGR were settled by the Company on April 30, 2025. Assets acquired by Red White & Bloom Michigan (2024), Inc. remain in property, plant and equipment for sale. The carrying amounts of assets and liabilities held by the Company’s Discontinued Operations as at June 30, 2025, and December 31, 2024 are as follows: As at 30-Jun-25 As at 31-Dec-24 $ $ Current assets Accounts receivable - 4 Deposits 40 42 Lease receivables - 1,617 Non-current assets Property, plant and equipment, net 12,567 11,529 Right-of-use assets, net - - Intangible assets, net - - Assets classified as held for sale 12,607 13,192 Current liabilities Accounts payable and accrued liabilities 5,922 8,358 Credit facility - 21,851 Promissory notes 759 798 Tax payables 7,440 15,192 Liabilities classified as held for sale 14,121 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 June 30, 2025, and December 31, 2024. RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 21 16. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment as at June 30, 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 - - 1,829 175 78 180 101 675 4 2,456 5,498 Additions through business combinations (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 18,088 4,179 8,335 204 640 12,293 95 3,388 55,723 Additions cost - - - - 36 - 1 103 - 332 472 Foreign currency movement (36) (67) (423) - 681 (11) 35 (519) - (881) (1,221) Balance, June 30, 2025 7,163 1,235 17,665 4,179 9,052 193 676 11,877 95 2,839 54,974 Accumulated depreciation Balance, December 31, 2023 restated - 21 631 - 2,402 9 197 3,745 - - 7,005 Depreciation this 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 Depr --- eciation this period - 7 347 199 625 20 45 991 16 - 2,250 Foreign currency movement - (2) (55) (1) (262) (2) (17) (297) - - (636) Balance, June 30, 2025 - 43 1,688 616 5,021 45 342 5,889 49 - 13,693 Net book value Balance, December 31, 2024 7,199 1,264 16,692 3,761 3,677 177 326 7,098 62 3,388 43,644 Balance, June 30, 2025 7,163 1,192 15,977 3,563 4,031 148 334 5,988 46 2,839 41,281 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 $1,015 in depreciation expense to inventory within the period ended June 30, 2025 (December 31, 2024; $3,408). RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 22 17. INTANGIBLE ASSETS A continuity of the intangible assets for June 30, 2025, and December 31, 2024, is as follows: Brand Licenses Total $ $ $ 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 (1,925) (2,967) (4,892) Balance, June 30, 2025 37,325 58,492 95,817 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 periods ended June 30, 2025, and 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. 18. RIGHT OF USE ASSETS AND LEASE OBLIGATIONS A continuity of the Company’s right-of-use assets is as follows: As at 30-Jun-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 1,138 3,675 Depreciation for the period (815) (1,576) Dispositions - ROU Asset (76) (3,447) Dispositions - ROU Accumulated Depreciation 76 936 Gain on Disposals - 390 Effects of foreign exchange (916) 771 Balance, June 30, 2025 17,383 17,976 RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares per share amounts) Page | 23 A continuity of the Company’s lease obligations related to right-of-use assets is as follows: As at 30-Jun-25 As at 31-Dec-24 $ $ Opening balance 22,729 20,503 Additions/(Disposals) 1,142 415 Interest accretion 1,348 2,577 Interest payments (1,348) (2,824) Principal payments (94) (149) Ending balance 23,777 20,522 Effects of foreign exchange (1,210) 2,207 Less: Short-term lease obligations (763) (701) Long-term lease obligation 21,804 22,028 Futu --- re minimum lease payments (principal and interest) are as follows: As at 30-Jun-25 $ 2025 1,570 2026 3,213 2027 3,255 2028 3,301 2029 3,527 Thereafter 30,993 Total minimum lease payments 45,859 Present value of minimum lease payments 14,896 Effect of discounting 8,396 Current portion lease obligations 763 Long-term lease obligations 21,804 19. 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 June 30, 2025, the carrying value of the investment is $2,479. Below is a continuity of the Company’s investment in OPRC: $ Balance, January 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, June 30, 2025 2,479 RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares per share amounts) Page | 24 20. 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 (715) Balance, June 30, 2025 13,067 Balances in goodwill as at June 30, 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 June 30, 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. 21. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES The Company had the following accounts payable and accrued liabilities at June 30, 2025, and December 31, 2024: As at 30-Jun-25 As at 31-Dec-24 $ $ Trade payables 9,264 14,761 Accrued liabilities and other 5,286 5,857 Sales and excise tax payable 3,442 3,335 Customer deposits 433 121 Total 18,425 24,074 During the period ended June 30, 2025, the Company had one significant vendor representing 35% of its total trade payables. During the year ended December 31, 2024, the Company had two significant vendors representing 10% and 20% of its total trade payables. RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares per share amounts) Page | 25 22. DEBT A. NOTES PAYABL --- E Terms for notes payable held by the Company as at June 30, 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 restructure 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 THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 26 Continuity of the outstanding notes payable held by the Company for the period ended June 30, 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 30-Jun-25 ELL Note 5,743 - - 189 (47) (189) - - 5,696 MV Ops Note 1,637 - - 99 - - - (88) 1,648 Oakshire Note 1,665 - - - - (435) - (61) 1,169 iiRGR Note C 33,541 - - 2,032 - - - (1,803) 33,770 iBJSD Note 3,214 - - 188 - - (181) - 3,221 iCPIL Note - - 20,644 1,053 - - - - 21,697 iRGR Note A 52,038 - - 2,910 - - (4,502) (2,528) 47,918 iRGR CAD Grid Note 56,946 4,000 - 3,631 - - - - 64,577 iRGR USD Grid Note 75,902 16,058 - 4,961 - (25) - (4,387) 92,509 iSDIL Note A 10,091 - - 573 - - (699) (501) 9,465 SIL Note 521 - - 30 - - (27) (26) 498 TAII Note 5,278 - - 295 (65) - (395) (257) 4,856 iDCIL Note - - 10,312 510 - - - (613) 10,209 iSDIL Note B - - 10,312 510 - - - (613) 10,209 Total 246,576 20,058 41,268 16,981 (1 --- 12) (649) (5,804) (10,876) 307,442 Short-term 207,419 2,948 Long-term 39,157 304,494 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 THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 27 Notes payable transactions during the six months ended June 30, 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 Note 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 THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares per share amounts) Page | 28 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 (CA --- D $395) owing under the TAII Note was forgiven and included in other income on the consolidated statement of income (loss) and comprehensive income (loss). Additionally, the lender agreed to reduce the interest rate from 15% to 12% per annum and extend the maturity date from September 12, 2024, to September 12, 2027, with interest continuing to accrue and compound monthly. The debt maintains comprehensive security through a multi-layered collateral structure. Default provisions remain in effect with 20% per annum interest on overdue amounts, while prepayment is permitted with a 1.75% penalty after the first anniversary. Continuity of the TAII Note can be reviewed in the continuity schedule above. f) RGR CAD Grid Note (amendment of the CAD$ 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 THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares per share amounts) Page | 29 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 execute --- d 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 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 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. RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares per share amounts) Page | 30 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. 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 June 30, 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 THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 31 B. CONVERTIBLE DEBENTURES Below are the terms of each of the convertible notes held by the Company as at June 30, 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% Below is a continuity of the Company’s convertible debt for the six months ended June 30, 2025. Convertible Note Balance 01-Jan-25 Amendments Accrued interest FX (Gain)/loss Balance 30-Jun-25 AB Convertible Note 1,487 - 66 (79) 1,474 FCC Convertible Note 2,973 - 132 (158) 2,947 IBGL Convertible Note 2,973 - 132 (158) 2,947 VMOS Convertible Note 2,082 - 93 (111) 2,064 MV Convertible Note 39,015 - 2,192 (2,091) 39,116 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) 3,023 (2,465) 48,548 Short-term 45,187 4,422 Long-term 44,071 44,126 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 Amendment s 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 June 30, 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 THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares per share amounts) Page | 32 Convertible note transactions during the six months ended June 30, 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 abo --- ve. 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 Company 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 June 30, 2025, and 2024, the Company substantially satisfied all material financial covenants in relation to its convertible debentures. RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares per share amounts) Page | 33 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 June 30, 2025, and December 31, 2024, there was no evidence of a derivative liability resulting from the Company's convertible debentures. 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 result 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). i Related party (note 28) RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares per share amounts) Page | 34 F. OFF BALANCE SHEET ARRANGEMENTS The Company did not enter any off-balance sheet arrangements during period ending June 30, 2025 (December 31, 2024; nil). 23. SHARE CAPITAL AND RESERVES A. AUTHORIZED As at June 30, 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 June 30, 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, June 30, 2025 470,221,901 342,111 Share Capital transactions the during the period ended June 30, 2025: No share capital transactions were undertaken by the Company during the six months ended June 30, 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 eliminat --- ed 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 shareholders. 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. RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares per share amounts) Page | 35 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. 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 June 30, 2025: Grant Date Vesting Start Date Expiry Date Share price on Date of Grant Exercise Price Volatility Risk Free Rate Dividends $ $ % % $ 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 0.75 105.2 --- 7% 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 THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares per share amounts) Page | 36 The number of stock options and weighted average exercise prices as at June 30, 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 (496,429) 1.00 Balance Outstanding, June 30, 2025 15,090,000 0.31 Exercisable Exercisable as at June 30, 2025 13,021,252 0.34 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 and six months ended Jun 30, 2025, the Company had share-based compensation expenses relating to stock options amounting to $22 and $43, respectively (2024; $57 and $106, respectively). The following reflects remaining contractual life for outstanding and exercisable options as at June 30, 2025: Outstanding Exercisable Expiry date Exercise price Options Remaining contractual life Options Remaining contractual life $ # (years) # (years) 6-Jul-25 1.10 75,000 0.02 75,000 0.02 10-Sep-25 0.66 15,000 0.20 15,000 0.20 1-Oct-25 0.65 3,400,000 0.25 3,400,000 0.25 12-Oct-25 0.65 50,000 0.28 50,000 0.28 18-Nov-25 0.67 150,000 0.39 150,000 0.39 3-Dec-25 0.75 800,000 0.43 800,000 0.43 12-Nov-26 0.63 400,000 1.37 400,000 1.37 26-Nov-26 0.63 75,000 1.41 75,000 1.41 7-Oct-27 0.14 6,500,000 2.27 6,500,000 2.27 7-Oct-27 0.20 200,000 2.27 200,000 2.27 7-Oct-27 0.50 250,000 2.27 250,000 2.27 3-Oct-29 0.10 1,925,000 4.26 481,250 4.26 15-Mar-33 0.10 1,250,000 7.71 625,002 7.71 Total 15,090,000 2.36 13,021,252 1.89 RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares per share amounts) Page | 37 24. EARNINGS (LOSS) PER SHARE Earnings/loss per share for the three and six months ended June 30, 2025, and 2024 is as follows: 3 months ended 30-Jun-25 3 months ended 30-Jun-24 6 months ended 30-Jun-25 6months ended 30-Jun-24 Outstanding common sh --- ares 470,221,901 470,221,901 470,221,901 470,221,901 Earnings (loss) from continuing operations attributable to RWB shares ($) (22,559) (8,557) (32,075) (11,469) Weighted average number of shares outstanding, basic and dilutive 470,221,901 474,738,811 470,221,901 469,521,901 Earnings/loss per share, basic and diluted ($) (0.05) (0.02) (0.07) (0.02) No stock options have been included in the computation of diluted loss per share as their effect would be anti-dilutive. 25. REVENUES The Company generates revenue through three distinct channels: Retail, Distribution and Licensing. Revenues by channel for the three and six months ended June 30, 2025, and 2024 is as follows: 3 months ended 30-Jun-25 3 months ended 30-Jun-24 6 months ended 30-Jun-25 6 months ended 30-Jun-24 $ $ $ $ Distribution 11,032 17,985 24,295 34,051 Licensing 200 - 1,045 269 Retail 5,173 2,772 10,257 5,971 Total revenue 16,405 20,757 35,597 40,291 Revenue as a percentage of total sales for the three and six months ended June 30, 2025, and 2024 is as follows: 3 months ended 30-Jun-25 3 months ended 30-Jun-24 6 months ended 30-Jun-25 6 months ended 30-Jun-24 % % % % Distribution 67% 87% 68% 85% Licensing 1% 0% 3% 1% Retail 32% 13% 29% 15% Total revenue 100% 100% 100% 100% During the three and six months ended June 30, 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. During the period ended June 30, 2025, the Company had two significant customers representing 25% and 12% of total revenues earned by the Company (2024; no significant customers). RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares per share amounts) Page | 38 26. GENERAL AND ADMINISTRATIVE EXPENSES The Company’s general and administrative expenses for the three and six months ended June 30, 2025, and 2024 were as follows: 3 months ended 30-Jun-25 3 months ended 30-Jun-24 6 months ended 30-Jun-25 6 months ended 30-Jun-24 $ $ $ $ Salaries and wages 3,417 4,268 7,088 8,367 Facilities expense 437 495 668 725 Professional fees 1,676 1,549 2,859 2,811 Office and administrative fees 609 502 1,274 861 Travel expense 136 123 222 228 Licenses and permits 181 63 359 115 Insurance 411 468 828 751 Penalty and late fees 28 87 57 97 Tax expense - - - - Total general and administrative expenses 6,895 7,555 13,355 13,955 27. 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 THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares per share amounts) Page | 39 The following table presents the summarized financial position before intragroup eliminations for non-wholly owned subsidiaries at three and six months ended June 30, 2025, and December 31, 2024: As at 30-Jun-25 As at 30-Jun-24 $ $ Assets Current 5,623 91,696 Non-current 184,751 93,873 Total assets 190,374 185,569 Liabilities Current 10,964 68,889 Non-current 108,127 31,920 Total liabilities 119,091 100,809 Net Assets 71,283 84,760 The following summarizes the financial results before intragroup eliminations for non-wholly owned subsidiaries for the three and six months ended June 30, 2025, and 2024: 3 months ended 30-Jun-25 3 months ended 30-Jun-24 6 months ended 30-Jun-25 6 months ended 30-Jun-24 Net Income (loss) (5,585) (3,957) (12,967) (12,209) Interests Controlling interests – 77% (4,309) (3,053) (10,005) (9,420) Non-controlling interests – 23% (1,276) (904) (2,962) (2,789) 28. 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 June 30, 2025, and 2024, is as follows: 3 months ended 30-Jun-25 3 months ended 30-Jun-24 6 months ended 30-Jun-25 6 months ended 30-Jun-24 $ $ $ $ Management salaries, bonuses, and other benefits 46 304 312 609 Consulting fees by a company controlled by a director of the company 15 51 30 102 Share-based payments – officers 4 10 8 20 Share-based payments – directors - 22 - 43 Total 65 387 350 774 RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares per share amounts) Page | 40 B. AMOUNTS DUE TO/FROM RELATED PARTIES • Included in accounts payable and accrued liabilities is $1,249 in management salaries, bonuses, and other benefits to be paid out in future periods (2024; $1,337) • 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 mat --- ured 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. • 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 six months ended June 30, 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. • 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 he --- ld 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 RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares per share amounts) Page | 41 (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. The amount due to RGR was 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 June 30, 2025, 5,825,002 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 o --- fficers. • 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 THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 42 D. RELATED PARTY NOTES PAYABLE CONTINUITY SCHEDULE A notes payable continuity schedule for related party short-term notes payable for period ended June 30, 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 30-Jun-25 RGR Note C 33,541 - - 2,032 - - - (1,803) 33,770 BJSD Note 3,214 - - 189 - - (181) - 3,222 CPIL Note - - 20,644 1,053 - - - - 21,697 RGR Note A 52,038 - - 2,910 - - (4,503) (2,528) 47,917 RGR CAD Grid Note 56,946 4,000 - 3,631 - - - - 64,577 RGR USD Grid Note 75,902 16,058 - 4,961 - (26) - (4,387) 92,508 SDIL Note A 10,091 - - 573 - - (698) (501) 9,465 DCIL Note - - 10,312 510 - - - (613) 10,209 SDIL Note B - - 10,312 510 - - - (613) 10,209 Total 231,732 20,058 41,268 16,369 - (26) (5,382) (10,445) 293,574 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 THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares per share amounts) Page | 43 E. RELATED PARTY CONVERTIBLE DEBT CONTINUITY SCHEDULE Below is the continuity schedule for related party convertible debt for the year ended June 30, 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 93 102 102 205 501 Amendment - (10,312) (10,312) (20,644) (41,268) Effects of foreign exchange (111) 67 67 - 23 Balance, June 30, 2025 2,065 - - - 2,065 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 $ $ $ $ $ Balance, January 1, 2024 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 Balance, 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 June 30, 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, January 1, 2024 (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 THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares and per share amounts) Page | 44 29. 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 June 30, 2025, the Company held an accounts receivable balance of $12,003 (2024; $16,112). Included in this balance is a provision for expected credit losses (“ECL”) in the amount of $9,441 (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 June 30, 2025, and 2024. As at June 30, 2025, the Company held a note receivable balance of $17,297 (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 June 30, 2025, the Company had a cash and cash equivalents balance of $2,749 (2024; $7,285) available to apply against short-term business requirements and current liabilities of $56,559 (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 June 30, 2025 are short-term notes payable $2,948 (2024; $207,416) and short-term convertible debentures $4,422 (2024; $45,187). In addition, a total of $14,121 is included in Liabilities Held for Sale representing liabilities in discontinued operations (2024; $46,199). 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 RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares per share amounts) Page | 45 of strategic operating initiatives with greater expected returns and targeting reductions in operating and administrative costs as feasible. 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 June 30, 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 and six months ended June 30, 2025, the Company incurred net loss and other comprehensive loss of $34,125, and $28,046 (2024; $15,887 income, and $1,833 loss), including the impact of unrealized foreign exchange losses on intercompany balances amounting to $7,702 and $7,989 for each period (2024; $2,481 and $9,212). 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 Com --- pany 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 June 30, 2025, and December 31, 2024, the Company was exposed to the following foreign currency risk: As at 30-Jun-25 As at 31-Dec-24 $ $ Financial assets denominated in foreign currencies (USD) 49,848 388,614 Financial liabilities denominated in foreign currencies (USD) (184,457) (205,616) Net exposure (134,609) 182,998 RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares per share amounts) Page | 46 A three (3%) and ten (10%) percent increase in the US dollar exchange rate relative to the Canadian dollar would decrease the Company’s net loss for the six months ended June 30, 2025, by $1,381 and $4,603, respectively (2024; $1,535 and $5,115 increase in net loss, respectively). 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 June 30, 2025, the Company has shareholders' deficit of $170,848 (2024; $173,029). Included in the consolidated statements of financial position as of June 30, 2025, is an accumulated deficit of $521,127 (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 June 30, 2025. The Company is not subject to any external capital requirements. 30. 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 THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares per share amounts) Page | 47 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. 31. 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 June 30, 2025, and 2024. 3 months ended 30-Jun-25 Corporate Distribution Licensing Retail Other Consolidated Sales revenue - 11,026 200 5,179 - 16,405 Cost of goods sold - 6,442 20 2,240 - 8,702 Gross profit before fair value adjustments 4,584 180 2,939 - 7,703 Gross profit % before fair value adjustments Unrealized changes in fair value of biological assets - 17 - (317) - (300 --- ) Realized fair value amounts included in inventory sold - (2,610) - (1,827) - (4,437) Gross profit after fair value adjustments - 1,991 180 795 - 2,966 Gross profit % after fair value adjustments 0% 18% 90% 15% 0% 18% Total operating expenses 1,276 4,620 221 3,166 183 9,466 Total other expenses (income) 14,783 (919) 101 3,273 401 17,639 Profit (loss) before Income Taxes (16,059) (1,710) (142) (5,644) (584) (24,139) Income tax - - - - 304 304 Net profit (loss) from continuing operations (16,059) (1,710) (142) (5,644) (280) (23,835) Loss from discontinued operations - - - - (4,234) (4,234) Net loss for the year (16,059) (1,710) (142) (5,644) 3,954 (19,601) Attributed to: Red White and Bloom (16,059) (1,710) (142) (4,368) (280) (22,559) Non-controlling interests - - - (1,276) - (1,276) RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares per share amounts) Page | 48 3 months ended 30-Jun-24 Corporate Distribution Licensing Retail Other Consolidated Sales revenue - 17,983 - 2,772 - 20,755 Cost of goods sold - 11,022 - 3,785 - 14,807 Gross profit before fair value adjustments - 6,961 - (1,013) - 5,948 Gross profit % before fair value adjustments Unrealized changes in fair value of biological assets - 166 - 2,989 - 3,155 Realized fair value amounts included in inventory sold - 1,345 - (450) - 895 Gross profit after fair value adjustments - 8,472 - 1,526 - 9,998 Gross profit % after fair value adjustments 0% 47% 0% 55% 0% 48% Total operating expenses 1,870 5,179 124 2,817 - 9,990 Total other expenses (income) 4,252 1,166 42 2,200 134 7,794 Profit (loss) before Income Taxes (6,122) 2,127 (166) (3,491) (134) (7,785) Income tax - (2,415) - 764 (21) (1,672) Net profit (loss) from continuing operations (6,122) (288) (166) (2,726) (155) (9,458) Loss from discontinued operations - - - - (1,189) (1,189) Net loss for the year (6,122) (288) (166) (2,726) (1,344) (10,647) Attributed to: Red White and Bloom (6,122) (288) (166) (1,822) (155) (8,553) Non-controlling interests - - - (904) - (904) The following exhibits summarize the condensed interim consolidated financial information of the Company’s reportable segments for the six months ended June 30, 2025, and 2024. 6 months ended 30-Jun-25 Corporate Distribution Licensing Retail Other Consolidated Sales revenue - 24,289 1,045 10,263 - 35,597 Cost of goods sold - 14,916 76 5,599 - 20,591 Gross profit before fair value adjustments - 9,373 969 4,664 - 15,006 Gross profit % before fair value adjustments Unrealized changes in fair value of biological assets - (33) - (92) - (125) Realized fair value amounts included in inventory sold - (5,021) - (2,613) - (7,634) Gross profit after fair value adjustments - 4,319 969 1,959 - 7,247 Gross profit % after fair value adjustments 0% 18% 93% 19% 0% 20% Total operating expenses 2,533 8,985 541 6,092 309 18,460 Total other expenses (income) 16,185 (1,466) 104 6,425 1,030 22,278 Profit (loss) before Income Taxes (18,718) (3,200) 324 (10,558) (1,339) (33,491) Income tax - (1,230) 41 66 (423) (1,546) Net profit (loss) from continuing operations (18,718) (4,430) 365 (10,492) (1,762) (35,037) Loss from discontinued operations - - - - 22,084 22,084 Net loss for the year (18,718) (4,430) 365 (10,492) 20,322 (12,953) Attributed to: Red White and Bloom (18,718) (4,430) 365 (7,531) (1,762) (32,076) Non-controlling inter --- ests - - - (2,962) - (2,962) As at 30-Jun-25 Intercompany Balances 333,457 (233,965) (37,936) (15,288) (46,268) - Total Assets 499,102 50,793 2,768 204,908 (483,576) 273,995 Total non-current assets 164,645 221,786 39,159 199,386 (450,704) 174,271 Total liabilities 250,211 32,220 (472) 120,495 42,388 444,842 Total non-current liabilities 244,740 1,089 (590) 108,127 34,917 388,282 % of sales revenue 0% 68% 3% 29% 0% 100% % of loss for the period 81% 19% 0% 0% 0% 100% % of income for the period 0% 0% 4% (103)% 199% 100% RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares per share amounts) Page | 49 6 months ended 30-Jun-24 Corporate Distribution Licensing Retail Other Consolidated Sales revenue - 34,049 269 5,972 - 40,290 Cost of goods sold - 20,445 159 6,898 - 27,502 Gross profit before fair value adjustments - 13,604 110 (926) - 12,788 Gross profit % before fair value adjustments Unrealized changes in fair value of biological assets - 81 - 7 - 88 Realized fair value amounts included in inventory sold - 1,089 - (1,127) - (38) Gross profit after fair value adjustments - 14,774 110 (2,046) - 12,837 Gross profit % after fair value adjustments 0% 43% 41% -34% 0% 32% Total operating expenses 3,578 9,975 570 5,975 - 20,098 Total other expenses (income) (1,710) 1,605 41 4,699 134 4,769 Profit (loss) before Income Taxes (1,868) 3,194 (501) (12,720) (134) (12,030) Income tax - (3,136) (23) 978 (48) (2,229) Net profit (loss) from continuing operations (1,868) 58 (524) (11,742) (182) (14,259) Loss from discontinued operations - - - - (2,484) (2,484) Net loss for the year (1,868) 58 (524) (11,742) (2,666) (16,743) Attributed to: Red White and Bloom (1,868) 57 (525) (8,952) (182) (11,470) Non-controlling interests - - - (2,789) - (2,789) As at 30-Jun-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% 85% 1% 15% 0% 100% % of loss for the period 0% 0% 4% 94% 1% 100% % of income for the period 103% -3% 0% 0% 0% 100% Revenues and total assets/liabilities by geographic region for the period ended June 30, 2025, and 2024: Canada USA Canada USA 3 months ended June 30, 2025 3 months ended June 30, 2024 $'000 $'000 $'000 $'000 Total revenues 7,439 8,966 4,030 16,727 Canada USA Canada USA 6 months ended June 30, 2025 6 months ended June 30, 2024 $'000 $'000 $'000 $'000 Total revenues 15,511 20,086 7,622 32,669 Canada USA Canada USA As at September 30, 2024 As at December 31, 2023 Total assets 58,468 215,527 191,882 102,509 Total liabilities 248,692 196,150 189,539 277,881 RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares per share amounts) Page | 50 32. 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 three and six months ended June 30, 2025, and 2024: 3 months ended 30-Jun-25 3 months ended 30-Jun-24 6 months ended 30-Jun-25 6 months ended 30-Jun-24 $ $ $ $ Revenue - 1,265 - 4,282 Cost of sales - 919 - 2,906 Gross profit (loss) - 346 - 1,376 General and administration 298 1,378 824 3,324 Sales and marketing - 57 - 112 Depreciation and amortization - 140 - 269 Bad debt expense (recovery) - 8 4 4 Loss from operations before other expenses (28) (140) (134) 88 Other expenses (income) 5 15 515 27 Finance expense - 36 - 62 (Gain) loss on disposal - capital assets - (94) (788) - Gain on extinguishment of payables - 6 - 6 Inventory write downs (1,606) - (18,924) - Impairment of intangible assets - - 18 - Net loss before taxes from discontinued operations 1,331 (1,060) 18,485 (2,516) Current income tax (recovery) expense (3,207) 129 (3,903) 400 Deferred income tax (recovery) expense 304 - 304 (432) Net loss from discontinued operations 4,234 (1,189) 22,084 (2,484) Net loss per share, basic and diluted on discontinued 0.00 0.00 0.00 0.00 Weighted average number of outstanding common shares, basic and diluted 470,221,901 469,940,379 470,221,901 469,940,379 RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares per share amounts) Page | 51 33. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Changes in non-cash working capital items during the period ended June 30, 2025, and 2024 are as follows: Note $ $ Items not involving cash: Accreted interest on leases 18 1,347 1,281 Depreciation of right-of-use assets 18 814 851 Depreciation of property, plant and equipment 16 2,249 2,418 Disposal of property, plant and equipment on discontinued operations 13 - 399 Disposal of right-of-use assets 18 - 28 Gain on valuation of financial instruments 22 - (65) Accrued interest on notes payable 21 15,395 11,891 Accrued interest on convertible debentures 22 3,022 3,099 Accreted interest on convertible debentures 22 38 2,329 Accrued interest on credit facility held for sale 22 - 1,189 Finance Fees - - 274 Accrued interest on interest receivable 10 - (180) Amendment fees on credit facility 22 - (45) Loan forgiveness on notes payable 22 (5,804) - Gain/(Loss) on Debt modification 22 - (100) Gain on investment 7 - (7,646) Stock based compensation 23 19 106 Realized fair value (gain) loss in cost of goods sold - 7,634 38 Fair value adjustment on biological assets 14 125 (88) Gain on discharge of credit facility in discontinued operation 15,22 (9,770) - Gain on payables on receivership in discontinued operation 32 (10,189) - Amortized discount on note receivable 10 - (60) Items not involving cash: 4,880 15,719 34. 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 THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares 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 AND SIX MONTHS ENDED JUNE 30, 2024 For the three months ended 30-Jun-24 As previously reported Discontinued operations As reclassified $ $ $ Revenue Sales revenue (note 25) 22,022 1,265 20,757 Cost of goods sold, before fair value adjustments 15,727 919 14,808 Gross Profit before fair market value adjustments 6,295 346 5,949 Unrealized changes in fair value of biological assets 3,155 - 3,155 Realized fair value amounts included in inventory sold 895 - 895 Gross profit after fair market value adjustments 10,345 346 9,999 Operating Expenses General and administration (note 26) 8,865 1,310 7,555 Marketing expenses 1,193 57 1,136 Share-based compensation (note 23) 57 - 57 Depreciation and amortization (note 16, 17) 653 140 513 Bad debt expense (note 9) 731 - 731 Total Operating Expenses 11,499 1,507 9,992 Loss from operations before other expenses (1,154) (1,161) 7 Other expense (income) Interest earned on promissory notes (note 22) (29) - (29) Interest income - - - Other income 547 (140) 687 Finance expense 97 2 95 Accreted interest on convertible notes (note 22) 1,049 - 1,049 Accreted interest on promissory notes (note 22) 84 - 84 Accreted interest, leases (note 18) 681 36 645 Interest on credit facilities (note 22) 604 - 604 Interest on convertible notes (note 22) 1,654 - 1,654 Interest on promissory notes (note 22) 6,062 - 6,062 Acquisition costs (note 7) 54 - 54 Business transaction costs 16 7 9 (Gain) loss on disposal of assets (note 16) (8) - (8) Gain (loss) on valuation of financial instruments (note 22) 80 - 80 Loss on debt extinguishment (note 22) - - - (Gain) loss on settlement of debt (note 22) (125) - (125) Gain on investments - - - Inventory write-downs - - - Foreign exchange (3,066) - (3,066) Total other expenses (income) 7,700 (95) 7,795 Profit (loss) before income taxes (8,854) (1,065) (7,789) Current income tax expense (recovery) (2,600) (129) (2,471) Deferred income tax expense (recovery) 798 - 799 Net loss from continuing operations (10,654) (1,193) (9,461) Profit (loss) from discontinued operations (note 31) 4 1,193 (1,189) Net loss for the period (10,650) - (10,650) Translation adjustment 16,043 (10,494) 26,537 Net loss and Comprehensive profit (loss) 5,394 (10,494) 15,887 RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares per share amounts) Page | 53 For the six months ended 30-Jun-24 As previously reported Discontinued operations As reclassified $ $ $ Revenue Sales revenue (note 23) 44,573 4,282 40,291 Cost of goods sold, before fair value adjustments 30,409 2,906 27,503 Gross Profit before fair market value adjustments 14,165 1,376 12,788 Unrealized changes in fair value of biological assets --- 87 - 87 Realized fair value amounts included in inventory sold (38) - (38) Gross profit after fair market value adjustments 14,214 1,376 12,837 Operating Expenses 17,067 3,112 13,955 General and administration (note 24) 2,455 112 2,343 Marketing expenses 106 - 106 Share-based compensation (note 21) 1,744 269 1,475 Depreciation and amortization (note 15, 16) 2,219 - 2,219 Bad debt expense (note 9) 23,591 3,493 20,098 Total Operating Expenses (9,378) (2,117) (7,261) Loss from operations before other expenses Other expense (income) (238) - (238) Interest earned on promissory notes (note 22) - - - Interest income (118) (145) 27 Other income 276 2 274 Finance expense 2,330 - 2,330 Accreted interest on convertible notes (note 22) 166 - 166 Accreted interest on promissory notes (note 22) 1,354 73 1,281 Accreted interest, leases (note 22) 1,190 - 1,190 Interest on credit facilities (note 22) 3,099 - 3,099 Interest on convertible notes (note 22) 11,728 - 11,728 Interest on promissory notes (note 22) 166 - 166 Acquisition costs (note 7) 54 6 47 Business transaction costs 227 - 227 (Gain) loss on disposal of assets (note 16) (65) - (65) Gain (loss) on valuation of financial instruments (note 22) 100 - 100 Loss on debt extinguishment (note 22) (760) - (760) (Gain) loss on settlement of debt (note 22) (7,645) - (7,645) Gain on investments - - - Inventory write-downs (7,157) - (7,157) Foreign exchange 4,705 (63) 4,770 Total other expenses (income) (14,083) (2,053) (12,030) Profit (loss) before income taxes (3,769) (399) (3,370) Current income tax expense (recovery) 1,574 432 1,142 Deferred income tax expense (recovery) (16,278) (2,020) (14,258) Net loss from continuing operations (463) 2,020 (2,484) Profit (loss) from discontinued operations (note 32) (16,741) - (16,741) Net loss for the period 14,908 - 14,908 Translation adjustment (1,834) - (1,833) RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares per share amounts) Page | 54 B. RECLASSIFICATIONS IN THE CONSOLIDATED STATEMENT OF CHANGES IN STATEMENT OF CASHFLOW FOR THE SIX MONTHS ENDED JUNE 30, 2024 For the six months ended 30-Jun-24 As previously reported Adjustments As reclassified Cash flow from operating activities: Net loss for the period (16,741) - (16,741) Items not involving cash: 15,803 (75) 15,728 Changes in non-cash working capital items: Accounts receivable (402) - (402) Short-term notes receivable - - - Prepaid expenses (773) - (773) Deposits (4,256) - (4,256) Inventory (3,276) - (3,276) Biological Assets (3,251) - (3,251) Accounts payable and accrued liabilities (1,806) 1 (1,805) Current Income tax payable 3,581 - 3,581 Deferred income taxes (1,704) - (1,704) Other assets 135 - 135 Other current liabilities 2,008 - 2,008 Net cash provided by (used in) operating activities (10,683) (73) (10,756) Cash flows from investing activities Acquisition of property, plant and equipment (1,125) - (1,125) Acquisition of property, plant and equipment, held for sale - - - Sale of property, plant and equipment, held for sale - - - Acquisition of Intangible assets (197) - (197) Acquisition of right-of-use assets 1,009 - 1,009 Advances on notes receivable - - - Interest receipts on notes receivable 9 - 9 Principal receipts on notes receivable - - - Acquisition of Aleafia - - - Net cash provided by (used in) investing activities (304) - (304 --- ) Cash flow from financing activities: Issuance of promissory note 5,750 - 5,750 Advances on notes payable 31,767 - 31,767 Interest payments on notes payable (1,458) - (1,458) Principal payments on notes payable (3,027) - (3,027) Amendment of convertible debt - - - Settlement of credit facility in discontinued operations - - - Addition to leases 192 - 192 Principal payments on lease obligations (245) - (245) Interest payments on lease obligations (1,354) 73 (1,281) Net cash provided by (used in) financing activities 31,624 73 31,697 Foreign exchange affecting cash equivalents (8,256) - (8,256) Change in cash during the period 12,382 - 12,381 Cash equivalents, beginning of year 2,251 - 2,251 Cash, end of period 14,633 - 14,633 RED WHITE & BLOOM BRANDS, INC. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND 2024 (In thousands of Canadian Dollars, except number of shares per share amounts) Page | 55 35. 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 $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 $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 $8,850 (C$12,722) in sale proceeds. The excess, US $6.8 million (C$ 9.8 million), 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 Pharma --- co 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 Advances on existing notes: Subsequent to the six months ended June 30, 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.