SEDAR Interim Financial Statements

Nextleaf Solutions Ltd. Condensed Interim Consolidated Financial Statements For the three months ended December 31, 2025 Unaudited – Prepared by Management (Expressed in Canadian Dollars) NOTICE OF NO AUDITOR REVIEW OF CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS The accompanying unaudited condensed interim consolidated financial statements of Nextleaf Solutions Ltd. (“the Company”) for the three months ended December 31, 2025, have been prepared by the management of the Company and approved by the Company’s Audit Committee and the Company’s Board of Directors. Under National Instrument 51-102, Part 4, subsection 4.3 (3) (a), if an auditor has not performed a review of the interim financial statements, they must be accompanied by a notice indicating that an auditor has not reviewed the financial statements. The accompanying unaudited condensed interim consolidated financial statements of the Company have been prepared by and are the responsibility of the Company’s management. The Company’s independent auditor has not performed a review of these financial statements in accordance with standards established by CPA Canada for a review of the condensed interim financial statements by an entity’s auditor. Nextleaf Solutions Ltd. Condensed Interim Consolidated Statements of Financial Position Unaudited – Prepared by Management (Expressed in Canadian Dollars) As at December 31, 2025 and September 30, 2025 The accompanying notes are an integral part of these condensed interim consolidated financial statements. 4 Note Assets Current assets Cash 680,277 446,563 Receivables and prepayments 3 1,957,031 906,383 Inventory 4 3,969,644 3,469,499 6,606,952 4,822,445 Non-current assets Deposits 335,242 335,242 Property and equipment 5 2,163,221 2,275,341 Intangible assets 6 388,902 389,179 2,887,365 2,999,762 Total assets 9,494,317 7,822,207 Liabilities and shareholders' equity Current liabilities Accounts payable and accrued liabilities 1,979,875 770,537 Government taxes payable 2,223,778 2,026,155 Customer deposits - - Lease liability - current 5 119,814 114,757 4,323,467 2,911,449 Non-current liabilities Lease liability 5 307,951 339,530 Total liabilities 4,631,418 3,250,979 Shareholders' equity Share capital 7 27,068,156 27,035,656 Reserves 7 1,664,977 1,697,277 Deficit (23,870,234) (24,161,705) Total shareholders' equity 4,862,899 4,571,228 Total liabilities and shareholders' equity 9,494,317 7,822,207 Nature of operations and going concern 1 Contingency 13 December 31, 2025 $ September 30, 2025 $ Approved on behalf of the Board of Directors on March 2, 2026: “Fred Bonner” Director “Sherry Boodram” Director Nextleaf Solutions Ltd. Condensed Interim Consolidated Statements of Income and Comprehensive Income Unaudited – Prepared by Management (Expressed in Canadian Dollars) For the three months ended December 31, 2025 and December 31, 2024 The accompanying notes are an integral part of these condensed interim consolidated financial statements. 5 Note Revenue 9 3,994,369 3,852,505 Excise taxes (973,850) (965,832) Net revenue 3,020,519 2,886,673 Cost of sales 1,732,322 1,649,153 Gross profit 1,288,197 1,237,520 Expenses Administrative expenses 124,154 76,531 Amortization 6 17,169 11,771 Depreciation 5 8,749 6,442 Finance costs 5 15,810 12,779 Investor relations and marketing 244,026 224,742 Professional fees and consulting 8 90,987 47,465 Research and operational supplies 61,456 68,865 Salaries and fees 8 466,675 463,594 (1,029,026) (912,189) Gai --- n on settlement of accounts payable 7 - 205,101 Income and comprehensive income for the period 259,171 530,432 Earnings per share Weighted average number of common shares outstanding: Basic # 7 168,505,092 166,062,062 Diluted # 7 168,505,092 166,062,062 Basic earnings per share 7 0.00 0.00 Diluted earnings per share 7 0.00 0.00 December 31, 2025 $ December 31, 2024 $ Nextleaf Solutions Ltd. Condensed Interim Consolidated Statements of Cash Flows Unaudited – Prepared by Management (Expressed in Canadian Dollars) For the three months ended December 31, 2025 and December 31, 2024 The accompanying notes are an integral part of these condensed interim consolidated financial statements. 6 Note December 31, 2025 $ December 31, 2024 $ Operating activities Income for the period 259,171 530,432 Adjustments for: Amortization 17,169 11,771 Depreciation (cost of sales and operating expenses) 5 57,811 55,509 Finance costs 15,810 12,779 Shares issued for salaries and fees 7 32,500 - Gain on settlement of accounts payable - (205,101) Non-cash items: Receivables and prepayments (1,050,648) (113,231) Inventory (390,165) 138,686 Deposits - (225,551) Accounts payable and accrued liabilities 1,209,338 (234,378) Government tax payable 197,623 - Customer deposits - (18,511) 348,609 (47,595) Investing activities Purchases of property and equipment (55,671) - Development costs for intangible assets (16,892) - (72,563) - Financing activities Lease payments 5 (42,332) (31,084) (42,332) (31,084) Change in cash 233,714 (78,679) Cash, beginning of period 446,563 438,536 Cash, end of period 680,277 359,857 Supplemental cash flow information 10 Nextleaf Solutions Ltd. Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity Unaudited – Prepared by Management (Expressed in Canadian Dollars) For the three months ended December 31, 2025 and December 31, 2024 The accompanying notes are an integral part of these condensed interim consolidated financial statements. 7 Common shares # Share capital $ Reserves $ Deficit $ Total $ September 30, 2024 164,667,134 26,806,424 1,740,295 (24,041,779) 4,504,940 Re-allocated on expiry of options - - (43,018) 43,018 - Shares issued - settlement of accounts payable 1,666,667 125,000 - - 125,000 Income and comprehensive income for the period - - - 530,432 530,432 December 31, 2024 166,333,801 26,931,424 1,697,277 (23,468,329) 5,160,372 September 30, 2025 168,228,906 27,035,656 1,697,277 (24,161,705) 4,571,228 Shares issued - salaries and benefits 590,909 32,500 - - 32,500 Re-allocated on expiry of options - - (32,300) 32,300 - Income and comprehensive income for the period - - - 259,171 259,171 December 31, 2025 168,819,815 27,068,156 1,664,977 (23,870,234) 4,862,899 Nextleaf Solutions Ltd. Notes to the Condensed Interim Consolidated Financial Statements Unaudited – Prepared by Management (Expressed in Canadian Dollars) For the three months ended December 31, 2025 and December 31, 2024 8 1. NATURE OF OPERATIONS AND GOING CONCERN Nextleaf Solutions Ltd. (“Nextleaf” or the “Company”) was incorporated under the laws of the Province of British Columbia on December 8, 2016. The Company’s head office is located at #3 – 68 Schooner Street, Coquitlam, British Columbia, V3B 7B1 and its registered and records office is located at #600 – 1090 West Georgia Street, Vancouver, British Columbia, V6E 3V7. The Company’s common shares trade on the Canadian Securities Exchange under the trading symbol “OILS”. The Company through its whol --- ly-owned subsidiary, Nextleaf Labs Ltd. (“Labs”), is a licensed Canadian cannabis processor and biotech company, with a portfolio of federally regulated emerging consumer brands, cannabis derivative products, and high-purity and high-potency bulk ingredients. The Company manufactures several products, across various categories for white label clients and house brands. Formulated products and bulk ingredients are sold domestically to business-to-business (B2B) partners and exported to applicable international jurisdictions. With national distribution within Canada, the Company’s brands are sold through both medical and recreational channels and includes its “Glacial Gold” brand and its “High Plains” house brand. These condensed interim consolidated financial statements (the “financial statements”) are prepared on the assumption that the Company will continue as a going concern, which assumes that the Company will be able to continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of operations. These financial statements do not include any adjustments relating to the recoverability and classification of assets and liabilities that might be necessary should the Company be unable to continue in existence. As at December 31, 2025, the Company had working capital of $2,283,485 (September 30, 2025 – $1,910,996). Although the Company has been profitable and has generated positive operating cash flows in certain historical fiscal quarters, and successful in raising funds to date, there can be no assurance that the Company will consistently generate sufficient revenue, profitability, and positive cash flows from operations, or that sufficient funding will continue to be available under terms acceptable to the Company. The continuance of operations is dependent on the Company continuing to generate profits and positive operating cash flows from commercial operations, and continuing to obtain financing on acceptable terms, if and as necessary. These conditions may cast significant doubt about the Company’s ability to continue as a going concern. 2. MATERIAL ACCOUNTING POLICY INFORMATION Basis of presentation These financial statements have been prepared in conformity with International Accounting Standard (“IAS”) 34, Interim Financial Reporting, using the same accounting policies as detailed in the Company‘s audited annual consolidated financial statements for the year ended September 30, 2024, and do not include all the information required for full annual financial statements in accordance with IFRS Accounting Standards (“IFRS”), as issued by the International Accounting Standards Board ("IASB"). It is suggested that these financial statements be read in conjunction with the audited annual consolidated financial statements. These financial statements have been prepared on a historical cost basis, except for financial instruments measured at fair value. In addition, these financial statements have been prepared using the accrual basis of accounting, except for cash flow information. All amounts in these financial statements are presented in Canadian dollars, which is the functional currency of the Company and its subsidiaries. Nextleaf Solutions Ltd. Notes to the Condensed Interim Consolidated Financial Statements Unaudited – Prepared by Management (Expressed in Canadian Dollars) For the three months ended December 31, 2025 and December 31, 2024 9 2. MATERIAL ACCOUN --- TING POLICY INFORMATION (continued) Principles of consolidation These financial statements include the accounts of the Company and its wholly-owned subsidiaries as follows: A subsidiary is an entity controlled by the Company and is included in these financial statements from the date that control commences until the date that control ceases. The accounting policies of a subsidiary are changed where necessary to align them with the policies adopted by the Company. Material accounting policies The accounting policies, estimates and critical judgments, methods of computation and presentation applied in these financial statements are consistent with those of the most recent audited annual consolidated financial statements and are those the Company expects to adopt in its annual consolidated financial statements for the year ended September 30, 2026. Accordingly, these financial statements should be read in conjunction with the Company’s most recent audited annual consolidated financial statements. New accounting policies Certain pronouncements have been issued by the IASB that are effective for the Company’s accounting period beginning on October 1, 2025. The adoption of these standards has not had a material impact on disclosures or amounts reported in theses financial statements. Standards issued but not yet effective The Company has not yet adopted certain new standards, amendments and interpretations to existing standards as outlined below, which have been published but are only effective for future accounting periods. IFRS 18, Presentation and Disclosure in Financial Statements (“IFRS 18”), which will replace IAS 1, Presentation of Financial Statements aims to improve how companies communicate in their financial statements, with a focus on information about financial performance in the statement of profit or loss, in particular additional defined subtotals, disclosures about management-defined performance measures and new principles for aggregation and disaggregation of information. IFRS 18 is accompanied by limited amendments to the requirements in IAS 7 Statement of Cash Flows. IFRS 18 is effective from January 1, 2027. Companies are permitted to apply IFRS 18 before that date. The Company has not yet determined the impact of these amendments on its financial statements. Nextleaf Innovations Ltd. 100% Extraction solutions company Nextleaf Labs Ltd. 100% Licensed processor Nextleaf Solutions Ltd. Notes to the Condensed Interim Consolidated Financial Statements Unaudited – Prepared by Management (Expressed in Canadian Dollars) For the three months ended December 31, 2025 and December 31, 2024 10 3. RECEIVABLES AND PREPAYMENTS Receivables and prepayments comprise the following: December 31, September 30, 2025 2025 $ $ Prepaid expenses (Note 8) 218,877 135,103 Trade receivables 1,738,154 771,280 1,957,031 906,383 4. INVENTORY Inventory is comprised of the following: December 31, September 30, 2025 2025 $ $ Production work in progress - distillate 330,424 231,683 Cannabis products 2,217,812 1,446,213 Supplies and hardware 796,310 1,387,420 Finished goods - distillate 625,098 404,183 3,969,644 3,469,499 Inventory expensed to cost of sales during the three months ended December 31, 2025, totaled $1,203,630 (2024 - $1,486,479). Nextleaf Solutions Ltd. Notes to the Condensed Interim Consolidated Financial Statements Unaudited – Prepared by Management (Expressed in Canadian Dollars) For the three months ended December 31, 2025 and December 31, --- 2024 11 5. PROPERTY AND EQUIPMENT Extraction and manufacturing Leasehold Right-of-use Furniture equipment improvements assets and equipment Total $ $ $ $ $ Cost September 30, 2024 3,639,119 3,125,617 555,873 221,379 7,541,988 Additions 1,214 60,504 153,500 - 215,218 September 30, 2025 3,640,333 3,186,121 709,373 221,379 7,757,206 Accumulated depreciation September 30, 2024 2,663,111 1,730,640 261,076 154,635 4,809,462 Depreciation(1) 195,201 374,987 88,866 13,349 672,403 September 30, 2025 2,858,312 2,105,627 349,942 167,984 5,481,865 Cost September 30, 2025 3,640,333 3,186,121 709,373 221,379 7,757,206 Additions 55,671 - - - 55,671 December 31, 2025 3,696,004 3,186,121 709,373 221,379 7,812,877 Accumulated depreciation September 30, 2025 2,858,312 2,105,627 349,942 167,984 5,481,865 Depreciation(1) 41,412 96,366 27,343 2,670 167,791 December 31, 2025 2,899,724 2,201,993 377,285 170,654 5,649,656 Net book value September 30, 2025 782,021 1,080,494 359,431 53,395 2,275,341 December 31, 2025 796,280 984,128 332,088 50,725 2,163,221 (1) Depreciation for the three months ended December 31, 2025 and December 31, 2024, is allocated as follows: December 31, 2025 $ December 31, 2024 $ Cost of sales 49,062 49,067 Inventory 109,980 109,026 Operating expenses 8,749 6,442 167,791 164,535 Nextleaf Solutions Ltd. Notes to the Condensed Interim Consolidated Financial Statements Unaudited – Prepared by Management (Expressed in Canadian Dollars) For the three months ended December 31, 2025 and December 31, 2024 12 5. PROPERTY AND EQUIPMENT (continued) Right-of-use asset and lease liabilities The Company has two agreements to lease manufacturing, storage, and office facilities in Coquitlam, BC. The Company has determined that the agreements are a lease contract as defined under IFRS 16 – Leases (“IFRS 16”). The Company’s lease liabilities have been calculated at initial recognition with a discount rate ranging between 13.5% to 16%. The Company has identified the following leases: Location Asset Type Terms of leases as at December 31, 2025 (years) Coquitlam, BC Building Manufacturing and office 2.5 Coquitlam, BC Building Distribution and storage 4.4 A reconciliation of the carrying amount of the lease liabilities as at December 31, 2025 and September 30, 2025, and changes during the period/year then ended is as follows: December 31, 2025 $ September 30, 2025 $ Beginning of year/period 454,287 384,693 Lease payments (42,332) (139,060) Addition of lease - 153,500 Lease interest (finance costs) 15,810 55,154 End of year/period 427,765 454,287 Current portion of lease liability 119,814 114,757 Non-current portion of lease liability 307,951 339,530 427,765 454,287 Maturity analysis - contractual undiscounted cash flows Less than one year 171,678 170,553 One to five years 356,955 400,411 528,633 570,964 During the three months ended December 31, 2025, the Company incurred $16,206 (2024 - $10,594) in variable lease payments allocated between cost of sales and rent expense (administrative expenses) that were not included within the measurement of the lease liability. Short-term leases are leases with a lease term of twelve months or less. As at December 31, 2025 and September 30, 2025, the Company did not have any low value leases or short-term leases. Nextleaf Solutions Ltd. Notes to the Condensed Interim Consolidated Financial Statements Unaudited – Prepared by Management (Expressed in Canadian Dollars) For the three months ended December 31, 2025 and December --- 31, 2024 13 6. INTANGIBLE ASSETS A continuity of intangible assets is as follows: Issued Software patents Licences Brand costs Total $ $ $ $ $ Cost September 30, 2024 40,352 270,325 110,000 - 420,677 Additions - - - 206,072 206,072 September 30, 2025 40,352 270,325 110,000 206,072 626,749 Accumulated amortization September 30, 2024 11,009 142,229 37,249 - 190,487 Amortization 2,018 34,065 11,000 - 47,083 September 30, 2025 13,027 176,294 48,249 - 237,570 Cost September 30, 2025 40,352 270,325 110,000 206,072 626,749 Additions - - - 16,892 16,892 December 31, 2025 40,352 270,325 110,000 222,964 643,641 Accumulated amortization September 30, 2025 13,027 176,294 48,249 - 237,570 Amortization 504 8,525 2,750 5,390 17,169 December 31, 2025 13,531 184,819 50,999 5,390 254,739 Net book value September 30, 2025 27,325 94,031 61,751 206,072 389,179 December 31, 2025 26,821 85,506 59,001 217,574 388,902 Amortization on software costs commenced effective October 1, 2025, when the software was put into use within the Company. 7. SHAREHOLDERS’ EQUITY The authorized share capital of the Company consists of unlimited common shares without par value. All issued shares are fully paid. Issued and outstanding Transactions involving the issuance of share capital during the three months ended December 31, 2025: • In November 2025, the Company issued 590,909 common shares at a fair value of $32,500 ($0.06 each) for services in recognition of employee performance. Transactions involving the issuance of share capital during the three months ended December 31, 2024: • In October 2024, the Company issued 1,666,667 common shares at a fair value of $125,000 ($0.075 each) in settlement of accounts payable totaling $330,101. Accordingly, $205,101 was recognized as a gain on settlement of accounts payable during the three months ended December 31, 2024. Nextleaf Solutions Ltd. Notes to the Condensed Interim Consolidated Financial Statements Unaudited – Prepared by Management (Expressed in Canadian Dollars) For the three months ended December 31, 2025 and December 31, 2024 14 7. SHAREHOLDERS’ EQUITY (continued) Employee Equity Participation Plan In 2020, the Company implemented an Employee Equity Participation Plan (the “Plan”). The Plan is fully voluntary and permits non-executive employees to receive common shares of the Company in lieu of a portion of their cash compensation. Shareholder Rights Plan In November 2023, the Company adopted a shareholder rights plan (the “Rights Plan”) that provides for the issuance of one right for each outstanding common share of the Company. Under the terms of the Rights Plan, any bid that meets certain criteria intended to protect the interests of all shareholders will be deemed a “permitted bid”. These criteria require, among other things, that the bid be made by means of a take-over bid circular to all holders of voting shares other than the offeror under the bid, and be left open for at least 105 days. In the event a take-over bid does not meet the permitted requirements of the Rights Plan, the rights issued under the Rights Plan will entitle shareholders, other than any shareholder or shareholders involved in the take-over bid, to purchase additional common shares of the Company at a specified exercise price which is a substantial discount to the market price. The Rights Plan was approved by the Company’s shareholders in December 2023. Stock options The Company has adopted a stock option plan (the “Plan”) which provides eligib --- le Directors, Officers, employees, and consultants with the opportunity to acquire common shares of the Company. The maximum number of common shares issuable under the Plan shall not exceed 20% of the number of common shares of the Company issued and outstanding as of each award date, inclusive of all common shares reserved for issuance pursuant to previously granted stock options. The stock options have a maximum term of five years from the date of grant, and vest over periods as determined by the Board of Directors. The exercise price of stock options granted under the Plan will be determined by the Board of Directors but may not be less than the closing market price of the Company’s common shares on the date of grant. A summary of the status of the Company’s stock options as at December 31, 2025 and September 30, 2025, and changes during the period/year then ended is as follows: Weighted average Weighted average Options exercise price Options exercise price # $ # $ Options outstanding, beginning of period/year 11,585,000 0.16 11,735,000 0.17 Expired (250,000) 0.25 (150,000) 0.50 Options outstanding, end of period/year 11,335,000 0.16 11,585,000 0.16 Period ended December 31, 2025 Year ended September 30, 2025 Nextleaf Solutions Ltd. Notes to the Condensed Interim Consolidated Financial Statements Unaudited – Prepared by Management (Expressed in Canadian Dollars) For the three months ended December 31, 2025 and December 31, 2024 15 7. SHAREHOLDERS’ EQUITY (continued) Stock options (continued) As at December 31, 2025, the Company has stock options outstanding and exercisable as follows: Options Options Weighted average Weighted average outstanding exercisable exercise price Expiry date remaining life # # $ (years) (1) 390,000 390,000 0.35 January 13, 2026 0.04 (1) 160,000 160,000 0.35 February 15, 2026 0.13 790,000 790,000 0.28 August 4, 2026 0.59 70,000 70,000 0.18 April 19, 2027 1.30 9,925,000 9,925,000 0.14 March 1, 2029 3.17 11,335,000 11,335,000 0.16 2.83 (1) Subsequently expired unexercised. During the three months ended December 31, 2025, 250,000 stock options expired unexercised. Accordingly, their original fair value of $32,300 was reversed from reserves and credited to deficit. During the year ended September 30, 2025, 150,000 stock options expired unexercised. Accordingly, their original fair value of $43,018 was reversed from reserves and credited to deficit. There was no share-based payment expense incurred during the three months ended December 31, 2025 and December 31, 2024. Warrants As an incentive to complete private placements, the Company may issue units which include common shares and common share purchase warrants. Using the residual value method, the Company determines whether a value should be allocated to warrants attached to units sold in completed private placements. Finders’ warrants may be issued as a private placement share issue cost and are valued using the Black-Scholes option pricing model. Additionally, warrants have been issued as an incentive to complete convertible debenture financings which are fair valued using the Black-Scholes option pricing model and allocated to the equity component of the convertible debenture on a relative fair value basis with the equity conversion feature. A summary of the Company’s common share purchase warrants as at December 31, 2025 and September 30, 2025, and changes during the period/year then ended is as follows: Weighted average Weighted average Warrants exercise p --- rice Warrants exercise price # $ # $ Warrants outstanding, beginning of period/year 6,875,000 0.11 6,875,000 0.11 Warrants outstanding, end of period/year 6,875,000 0.11 6,875,000 0.11 Period ended December 31, 2025 Year ended September 30, 2025 Nextleaf Solutions Ltd. Notes to the Condensed Interim Consolidated Financial Statements Unaudited – Prepared by Management (Expressed in Canadian Dollars) For the three months ended December 31, 2025 and December 31, 2024 16 7. SHAREHOLDERS’ EQUITY (continued) Warrants (continued) The following table summarizes information about the warrants outstanding and exercisable as at December 31, 2025: Weighted average Weighted average Warrants exercise price Expiry Date remaining life # $ (years) 3,200,000 0.08 September 21, 2027 1.72 3,675,000 0.14 September 21, 2027 1.72 6,875,000 0.11 1.72 Reserves Reserves are comprised of the accumulated fair value of stock options recognized as share-based payments, and the fair value of finders’ or brokers’ warrants issued on private placements and as other forms of consideration. Reserves are increased by the fair value of these items on vesting/issuance and are reduced by corresponding amounts when stock options or warrants expire, are exercised, or are cancelled. Stock options Warrants Total $ $ $ September 30, 2024 1,394,183 346,112 1,740,295 Options expired (43,018) - (43,018) December 31, 2024 1,351,165 346,112 1,697,277 September 30, 2025 1,351,165 346,112 1,697,277 Options expired (32,300) - (32,300) December 31, 2025 1,318,865 346,112 1,664,977 Earnings per share The calculation of basic and diluted earnings per share for the three months ended December 31, 2025 and December 31, 2024, is based on the following: 2025 2024 Income for the period 259,171 $ 530,432 $ Weighted average number of common shares outstanding - basic 168,505,092 166,062,062 Dilutive effect of stock options and warrants - - Weighted average number of common shares outstanding - diluted 168,505,092 166,062,062 Basic earnings per share $ 0.00 $ 0.00 $ Diluted earnings per share $ 0.00 $ 0.00 $ Three months ended December 31, The calculation of basic earnings per share for the three months ended December 31, 2025 and December 31, 2024, was based on the income attributable to common shareholders, and the weighted average number of common shares outstanding. The calculation of diluted earnings per share reflects the potential dilution of common share equivalents, such as outstanding stock options and warrants, in the weighted average number of common shares outstanding, if dilutive. During the three months ended December 31, 2025 and December 31, 2024, none of the stock options or warrants had a dilutive impact. Nextleaf Solutions Ltd. Notes to the Condensed Interim Consolidated Financial Statements Unaudited – Prepared by Management (Expressed in Canadian Dollars) For the three months ended December 31, 2025 and December 31, 2024 17 8. RELATED PARTY TRANSACTIONS 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 executive and non-executive members of the Company’s Board of Directors and Corporate Officers, and companies controlled by them. Key management personnel compensation The remuneration of key management for the three months ended December 31, 2025 and December 31, 2024, is as follows: December 31, D --- ecember 31, 2025 2024 $ $ Directors' fees (professional fees and consulting) 12,000 12,000 Salaries and fees (paid or accrued) 60,750 68,250 72,750 80,250 During the year ended September 30, 2025, 636,364 common shares with a fair value of $35,000 ($0.055 each) were issued for executive salaries. This amount was recognized within salaries and benefits for past services during the year then ended. As at December 31, 2025 September 30, 2025, there were no balances payable or receivable to or from the Company involving related parties. 9. FINANCIAL INSTRUMENTS Fair value Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the relative reliability of the inputs used to estimate the fair values. 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 assets or liability either directly or indirectly; and • Level 3 - Inputs that are not based on observable market data. Classification of financial instruments Financial assets: Classification: Subsequent measurement: Cash Amortized cost Amortized cost Trade receivables (Note 3) Amortized cost Amortized cost Deposits Amortized cost Amortized cost Financial liabilities: Classification: Subsequent measurement: Accounts payable and accrued liabilities Other financial liabilities Amortized cost Government taxes payable Other financial liabilities Amortized cost Customer deposits Other financial liabilities Amortized cost Lease liabilities (Note 5) Other financial liabilities Amortized cost The Company’s financial instruments approximate their fair values. The carrying values of cash, trade receivables, deposits, accounts payable and accrued liabilities, government taxes payable, and customer deposits all approximate their fair values due to their short-term nature. The carrying value of the Company’s lease liabilities approximate fair value as they bear a rate of interest commensurate with market rates. Government taxes payable represent the excise taxes applicable at the federal and provincial levels to the Company’s production of cannabis products. Nextleaf Solutions Ltd. Notes to the Condensed Interim Consolidated Financial Statements Unaudited – Prepared by Management (Expressed in Canadian Dollars) For the three months ended December 31, 2025 and December 31, 2024 18 9. FINANCIAL INSTRUMENTS (continued) Economic dependence and revenue from sale of goods Economic dependence Economic dependence risk refers to the potential risk of relying on a small number of customers, which can significantly impact the Company’s financial performance. For the three months ended December 31, 2025, the Company’s cannabis concentrate sales (sale of bulk distillate) and product sales were derived from multiple customers. However, three major customers collectively accounted for a significant portion of total revenue, per below. Together, these customers represented approximately 73% of the Company’s total revenue. • Customer A: 42% (2024 – 53%) • Customer B: 18% (2024 – 19%) • Customer C: 13% (2024 – 13%) Revenue from sale of goods and services The Company disaggregated its revenues from the sale of goods between sales of bulk distillate, branded (Glacial Gold) vape pens, oils, and softgels (“branded extract products”), and private label which includes toll processing and other services. --- Each type of revenue is produced by a single operating/production division. Revenue stream Bulk distillate $ Branded extract products $ Private label $ Total $ Bulk distillate $ Branded extract products $ Private label $ Total $ Wholesale 166,495 3,747,202 80,672 3,994,369 140,179 3,554,022 158,304 3,852,505 British Columbia - 2,037,438 752 2,038,190 50,000 2,031,439 5,340 2,086,779 Rest of Canada 166,495 1,709,764 79,920 1,956,179 90,179 1,522,583 152,964 1,765,726 Total 166,495 3,747,202 80,672 3,994,369 140,179 3,554,022 158,304 3,852,505 Period ended December 31, 2025 Period ended December 31, 2024 Credit risk Credit risk is the risk of financial loss to the Company if a counterparty to a financial instrument fails to meet its contractual obligations. As at December 31, 2025, credit risk for the Company arises from cash, trade receivables, and deposits. The carrying amount of these financial assets represents the maximum credit exposure as at December 31, 2025. Cash is held with a Canadian chartered bank and accordingly, the Company’s exposure to credit risk on cash is considered insignificant. As at December 31, 2025, the Company holds certain trade receivables that are aged in excess of 90 days to which management has determined the credit risk to be low. Nextleaf Solutions Ltd. Notes to the Condensed Interim Consolidated Financial Statements Unaudited – Prepared by Management (Expressed in Canadian Dollars) For the three months ended December 31, 2025 and December 31, 2024 19 9. FINANCIAL INSTRUMENTS (continued) Credit risk (continued) Impairment of financial assets The Company has the following financial assets that are subject to the expected credit loss model: • Trade receivables; and • Deposits. While cash is also subject to the impairment requirements of IFRS 9, the risk is insignificant. The Company applies the IFRS 9 simplified approach to measure expected credit losses which uses a lifetime expected loss allowance for its trade receivables, and deposits. The Company applies the general approach using practical expedients to loans receivable which involves recognition at each reporting date of a loss allowance based on a 12-month expected credit loss model without the requirement to re-assess whether any significant increases in credit risk have occurred at each reporting date. To measure the expected credit losses, trade receivables, and deposits are grouped by debtor, and each debtor’s circumstances are reviewed. The expected loss amount, if any, is based on historical payment profiles, and the corresponding historical credit losses experienced within specific periods for the debtors. During the three months ended December 31, 2025 and December 31, 2024, the Company did not recognize any loss provisions. There were no settlements of accounts payable during the three months ended December 31, 2025. During the three months ended December 31, 2024, the Company recorded a gain on settlement of accounts payable totaling $205,101 which included the forgiveness of accounts payable relating to the settlement involving the issuance of common shares (Note 7). Amounts are written-off when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include, amongst others, failure of a debtor to engage in a repayment plan with the Company (if applicable), and failure by the debtor to make contractual payments for a period of greater than 120 days past due, or shorter if specific ci --- rcumstances suggest otherwise. Impairment losses are presented as loss provision on receivables. Subsequent recoveries of amounts previously written-off are credited against the same line item and presented as loss recovery on receivables. Liquidity risk The Company manages liquidity risk by maintaining an adequate level of cash to meet its ongoing obligations. The Company has been successful in raising equity financing in the past, however, there is no assurance that it will be able to do so in the future. Refer to Note 1 for disclosures on the Company’s working capital and ability to continue as a going concern. Nextleaf Solutions Ltd. Notes to the Condensed Interim Consolidated Financial Statements Unaudited – Prepared by Management (Expressed in Canadian Dollars) For the three months ended December 31, 2025 and December 31, 2024 20 9. FINANCIAL INSTRUMENTS (continued) Market risk Market risk is the risk that the fair value or future cash flows from a financial instrument will fluctuate because of changes in market prices or prevailing conditions. Market risk comprises three types of risk: currency risk, interest rate risk, and price risk as follows: (i) Currency risk Currency risk is the risk of change in profit or loss that arises from fluctuations of foreign exchange rates and the degree of volatility of these rates. The Company is exposed to currency risk as it incurs transactions in the United States dollar. As at December 31, 2025, the Company held cash, and accounts payable and accrued liabilities in United States dollars. A 10% change in the exchange rate between the United States dollar and the Canadian dollar, would not have impacted loss and comprehensive loss for the period by a material amount. (ii) Interest rate risk The Company is not exposed to interest rate risk because it does not have any assets or liabilities subject to variable rates of interest. (iii) Price risk Equity price risk is defined as the potential adverse impact on the Company’s results of operations and the ability to obtain financing, due to movements in individual equity prices or general movements in the level of the stock market. The Company closely monitors individual equity movements and the stock market to determine the appropriate course of action to be taken by the Company. Fluctuations in value may be significant. The Company is also subject to price risk in respect of the raw materials acquired which fluctuations may also be significant and impact future operating results. 10. SUPPLEMENTAL CASH FLOW INFORMATION The Company incurred non-cash financing activities during the three months ended December 31, 2025 and December 31, 2024, as follows: December 31, 2025 December 31, 2024 $ $ Non-cash financing activities: Shares issued for settlements of accounts payable - 125,000 During the three months ended December 31, 2025 and December 31, 2024, there were no non-cash investing incurred by the Company. During the three months ended December 31, 2025 and December 31, 2024, no amounts were paid for interest or income tax expenses. 11. CAPITAL RISK MANAGEMENT The Company defines capital as the components of shareholders’ equity. The Company’s objectives when managing capital are to support further advancement of the Company’s business objectives, as well as to ensure that the Company can meet its financial obligations as they come due. The Company manages its capital structure to maximize its financial flexibility adjusting it in response to change --- s in economic conditions and the risk characteristics of the underlying assets and business opportunities. The Company relies on the expertise of the Company’s management to sustain the future development of the business. Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable. There were no changes in the Company’s approach to capital management during the three months ended December 31, 2025. The Company is not subject to externally imposed capital requirements. Nextleaf Solutions Ltd. Notes to the Condensed Interim Consolidated Financial Statements Unaudited – Prepared by Management (Expressed in Canadian Dollars) For the three months ended December 31, 2025 and December 31, 2024 21 12. SEGMENTED INFORMATION The Company has a single reportable segment being the provision of goods and services to the cannabis industry in Canada. All the Company’s revenues are generated in Canada, and its non-current assets are located in Canada. 13. CONTINGENT LIABILITY On September 8, 2025, the Company received a legal claim from its former CEO alleging wrongful dismissal. The Company has prepared a response to the claim and believes its position is substantiated and supportable. The parties are currently engaged in settlement discussions; however, the outcome and any potential financial impact cannot be reasonably estimated as at the date of approval of these financial statements. Accordingly, as at December 31, 2025 and September 30, 2025, there was no contingent liability recognized.