SEDAR Interim Financial Statements

1933 INDUSTRIES INC. Condensed Interim Consolidated Financial Statements For the three months ended October 31, 2025 and 2024 (Unaudited - Expressed in Canadian dollars) Notice of Disclosure of Non-auditor Review of the Condensed Interim Consolidated Financial Statements for the Three Months Ended October 31, 2025 and 2024 Pursuant to National Instrument 51-102 Continuous Disclosure Obligations, part 4, subsection 4.3(3)(a) issued by the Canadian Securities Administrators, if an auditor has not performed a review of the interim financial statements, they must be accompanied by a notice indicating that the interim financial statements have not been reviewed by an auditor. The accompanying unaudited condensed interim consolidated financial statements of 1933 Industries Inc. for the interim periods ended October 31, 2025 and 2024, have been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting, as issued by the International Accounting Standards Board, and are the responsibility of management. The independent auditors, MNP LLP, have not performed a review of these unaudited condensed interim consolidated financial statements. December 22, 2025 1933 INDUSTRIES INC. Condensed Interim Consolidated Statements of Financial Position (Unaudited - Expressed in Canadian dollars) The accompanying notes are an integral part of these condensed interim consolidated financial statements. 3 Note October 31, 2025 July 31, 2025 $ $ ASSETS Current Cash 405,843 545,977 Receivables 5 1,501,764 2,032,690 Inventory 6 3,051,149 2,925,940 Biological assets 7 593,415 599,113 Prepaid expenses and deposits 8 396,155 316,341 5,948,326 6,420,061 Property and equipment 9 10,249,053 10,379,415 Total assets 16,197,379 16,799,476 LIABILITIES Current Accounts payable and accrued liabilities 10,15 2,945,398 3,481,491 Income tax payable 315,262 312,215 Current portion of lease liability 11 281,470 438,158 Convertible debentures 12 3,086,835 3,441,642 6,628,965 7,673,506 Lease liability 11 13,998,985 13,724,110 Total liabilities 20,627,950 21,397,616 SHAREHOLDERS’ DEFICIENCY Share capital 13(b) 83,891,761 83,891,761 Reserves 13(c) 10,801,106 10,800,598 Accumulated other comprehensive loss (506,567) (534,596) Deficit (98,616,871) (98,755,903) Deficiency attributable to shareholders of the Company (4,430,571) (4,598,140) Total shareholders’ deficiency (4,430,571) (4,598,140) Total liabilities and shareholders’ deficiency 16,197,379 16,799,476 Nature of operations and going concern (Note 1) Subsequent events (Note 20) Approved and authorized for the issue on behalf of the Board of Directors: /s/ “Brian Farrell” /s/ “Paul Rosen” Director Director 1933 INDUSTRIES INC. Condensed Interim Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) (Unaudited - Expressed in Canadian dollars, except share numbers) The accompanying notes are an integral part of these condensed interim consolidated financial statements. 4 Three months ended Note 2025 October 31, 2024 $ $ Revenues 3,965,932 3,993,007 Cost of sales (3,073,164) (2,756,077) Gross profit, excluding fair value adjustments 892,768 1,236,930 Change in fair value due to biological transformation 590,511 411,780 Fair value adjustment on sale of biological assets (504,976) (341,271) Gross profit 978,303 1,307,439 Expenses (income) Accretion expense 12 59,060 63,938 Depreciation 9 38,630 20,814 Gain on extinguishment of convertible debenture 12 (431,851) - Gain on sale of property --- and equipment 9 - (14,407) General and administration 14 217,220 294,690 Interest expense 67,257 482,124 License taxes and insurance 513,942 776,886 Management and consulting fees 15 91,045 183,552 Other income - (96) Professional fees 119,050 (38,275) Share-based compensation 15 508 3,110 Wages and benefits 164,223 112,932 839,084 1,885,268 Income (Loss) before income tax expense 139,219 (577,829) Current income tax expense - - Net income (loss) for the period 139,219 (577,829) Net loss from discontinued operations 19 (188) (4,173) Foreign currency translation adjustment 28,217 227,098 Comprehensive income (loss) for the period 167,249 (354,904) Net income (loss) attributable to: Shareholders of the Company 139,032 (587,031) Non-controlling interest - 5,029 Foreign currency translation adjustment attributable to: Shareholders of the Company 28,030 206,829 Non-controlling interest - 20,269 Comprehensive income (loss) attributable to: Shareholders of the Company 167,249 (380,202) Non-controlling interest - 25,298 Earnings (loss) per share Basic and diluted 0.00 (0.00) Weighted average number of shares Basic and diluted 495,975,107 490,471,657 1933 INDUSTRIES INC. Condensed Interim Consolidated Statements of Cash Flows (Unaudited - Expressed in Canadian dollars) The accompanying notes are an integral part of these condensed interim consolidated financial statements. 5 Three months ended 2025 October 31, 2024 $ $ Operating activities Net income (loss) for the period 139,219 (586,175) Adjustments for: Depreciation included in cost of sales 219,912 247,059 Fair value adjustment on sale of biological assets (590,511) (411,780) Fair value adjustment on sale of inventory 504,976 341,271 Accretion expense 59,060 63,938 Depreciation 38,630 11,439 Gain on extinguishment of debenture (431,851) - Gain on sale of property and equipment - (14,407) Interest expense 450,455 480,790 Share-based compensation 508 3,110 Changes in non-cash working capital: Receivables 530,926 (109,832) Inventory (125,209) 355,957 Biological assets 91,233 216,831 Prepaid expenses and deposits (79,814) (29,696) Accounts payable and accrued liabilities (536,820) (649,279) Income tax payable 3,047 2,140 Lease liability 49,232 - Net cash provided by (used in) operating activities 322,993 (78,634) Investing activities Proceeds from sale of property and equipment - 14,407 Net cash provided by (used in) investing activities - 14,407 Financing activities Repayment of lease liability (447,819) (359,510) Repayment of note payable (47,500) - Net cash used in financing activities (495,319) (359,510) Effect of exchange rate on changes on cash 32,380 204,215 Change in cash from discontinuing operations (188) 11,948 Change in cash from continuing operations (139,946) (219,522) Cash, beginning of period 545,977 449,184 Cash, end of period 405,843 241,610 Supplemental disclosure with respect to cash flows (Note 16) 1933 INDUSTRIES INC. Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity (Deficiency) (Unaudited - Expressed in Canadian dollars, except share numbers) The accompanying notes are an integral part of these condensed interim consolidated financial statements. 6 Common shares Share capital Reserves Accumulated other comprehensive loss Deficit Non- controlling interest Total shareholders’ equity (deficiency) # $ $ $ $ $ $ Balance, July 31, 2024 490,471,657 83,856,671 10,795,979 (787,569) (97,399,298) (1,301,255) (4,835,472) Share-based compensation - - 3,110 - --- - - 3,110 Non-controlling interest - - - - - 5,029 5,029 Foreign currency translation adjustment - - - 206,829 - 20,269 227,098 Net loss for the period - - - - (587,031) - (587,031) Balance, October 31, 2024 490,471,657 83,856,671 10,799,089 (580,740) (97,986,329) (1,275,957) (5,187,266) Shares issued - acquisition of AMA 5,503,450 35,090 - - (714,224) 1,107,763 428,629 Share-based compensation - - 1,509 - - - 1,509 Non-controlling interest - - - - - 145,673 145,673 Foreign currency translation adjustment - - - 46,144 - 22,521 68,665 Net loss for the period - - - - (55,350) - (55,350) Balance, July 31, 2025 495,975,107 83,891,761 10,800,598 (534,596) (98,755,903) - (4,598,140) Share-based compensation - - 508 - - - 508 Foreign currency translation adjustment - - - 28,029 - - 28,029 Net income for the period - - - - 139,032 - 139,032 Balance, October 31, 2025 495,975,107 83,891,761 10,801,106 (506,567) (98,616,871) - (4,430,571) 1933 INDUSTRIES INC. Notes to the Condensed Interim Consolidated Financial Statements For the three months ended October 31, 2025 and 2024 (Unaudited - Expressed in Canadian dollars, except where noted) 7 1. NATURE OF OPERATIONS AND GOING CONCERN 1933 Industries Inc. (the “Company”) was incorporated pursuant to the provisions of the Business Corporations Act of Alberta and later continued into the Province of British Columbia. The Company is a publicly traded company with its registered office located at 300 - 1055 West Hastings Street, Vancouver, British Columbia, Canada. The Company’s common shares are listed under the symbol “TGIF” on the Canadian Securities Exchange and under the symbol “TGIFF” on the OTCID. The Company operates in the medical and recreational cannabis sectors in Nevada, USA. Alternative Medicine Association (“AMA”), a 100% owned subsidiary of the Company, is licensed in the State of Nevada as (i) a cultivation facility; and (ii) a production facility for edible, or cannabis-infused products. Infused Mfg (“Infused”), a 100% owned subsidiary of the Company, was focused on developing, and manufacturing hemp and cannabidiol (“CBD”) infused products and brands for retail sale and use in jurisdictions where permitted. During the year ended July 31, 2024, Infused operations were discontinued (Note 19). While some states in the United States (“U.S.”) have authorized the use and sale of cannabis, it remains illegal under federal law and the approach to enforcement of U.S. federal laws against cannabis is subject to change. The Company assumes certain risks due to conflicting state and federal laws because the Company engages in cannabis related activities in the U.S. The federal law relating to cannabis could be enforced at any time and this would put the Company at risk of being prosecuted and having its assets seized. The Company may be irreparably harmed by a change in enforcement policies of the federal government depending on the nature of such change. Given the current illegality of cannabis under U.S. federal law, the Company’s ability to access both public and private capital may be hindered by the fact that certain financial institutions are regulated by the U.S. federal government and are thus prohibited from providing financing to companies engaged in cannabis-related activities. The Company’s ability to access public capital markets in the U.S. is directly hindered as a result. The Company may, however, be able to access public and private capital markets in Canada in order to support co --- ntinuing operations. Going concern The Company has not yet achieved profitable operations and during the three months ended October 31, 2025, the Company incurred a net income of $139,219 (2024 – net loss of $577,829). As at October 31, 2025, the Company had an accumulated deficit of $98,616,871 (July 31, 2025 - $98,755,903) and a working deficiency of $680,639 (July 31, 2025 - $1,253,445). Included in current liabilities are convertible debentures maturing on December 31, 2025. The Company does not currently have sufficient cash resources to settle these debentures upon maturity and is therefore dependent on obtaining continued financial support from the debenture holders, renegotiating the terms of the debentures, or securing additional financing. These factors represent a material uncertainty that may raise significant doubt regarding the Company’s ability to continue as a going concern. As a result, the Company may be unable to realize its assets and discharge its liabilities in the normal course of business. These condensed interim consolidated financial statements for the three months ended October 31, 2025 and 2024 (“financial statements”) have been prepared on a going concern basis, which assumes that the Company will be able to meet its obligations and continue its operations for at least the next twelve months. The Company evaluates if the going concern assumption at each reporting period is appropriate and will consider removing the going concern and uncertainty note when the Company can depend on profitable operations or is confident of obtaining additional debt, equity or other financing to fund ongoing operations until profitability is achieved. These financial statements do not reflect adjustments that would be necessary if the going concern assumption were not appropriate. Should the Company be unable to obtain additional capital in the future and the Company’s ability to continue as a going concern be impaired, material adjustments may be necessary to these financial statements. Such adjustments could be material. 1933 INDUSTRIES INC. Notes to the Condensed Interim Consolidated Financial Statements For the three months ended October 31, 2025 and 2024 (Unaudited - Expressed in Canadian dollars, except where noted) 8 2. BASIS OF PREPARATION a) Statement of compliance These financial statements have been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting, using accounting policies consistent with IFRS® Accounting Standards issued by the International Accounting Standards Board (“IASB”) and the IFRIC® Interpretations of the IFRS Interpretations Committee. As such, these financial statements do not contain all the disclosures required by IFRS for annual financial statements and should be read in conjunction with the Company’s audited consolidated financial statements for the years ended July 31, 2025 and 2024 (“Annual Financial Statements”). These financial statements were approved by the Board of Directors and authorized for issue on December 22, 2025. b) Basis of measurement The financial statements have been prepared using the historical cost basis, except for biological assets, which are measured at fair value, as specified by IFRS Accounting Standards, as well as information presented in the consolidated statements of cash flows. c) Functional and presentation currency These financial statements are presented in Canadian dollars. The functional currency of the Company is the Can --- adian dollar. References to “CAD” are to Canadian dollars and “USD” or “USD$” are to United States dollars. d) Basis of consolidation These financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and balances are eliminated on consolidation. Control exists where the parent entity has power over the investee and is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Subsidiaries are included in the financial statements from the date control commences until the date control ceases. A summary of the Company’s subsidiaries included in these financial statements as at October 31, 2025 is as follows: Name of subsidiary Abbreviation Country of Incorporation Percentage Ownership Functional Currency Principal Activity 1080034 B.C. Ltd. 0034 BC Canada 100% CAD Inactive 1933 Management Services Inc. FNM USA 100% USD Holding company 1933 Legacy Inc. Legacy USA 100% USD Inactive Infused Mfg LLC Infused MFG USA 100% USD Discontinued FN Pharmaceuticals LLC FNP USA 100% USD Inactive Alternative Medicine Association LLC AMA USA 100% USD Cannabis cultivation and production AMA Productions LLC AMA Pro USA 100% USD Inactive Spire Secure Logistics Inc. Spire Canada 100% CAD Inactive 3. MATERIAL ACCOUNTING POLICIES These financial statements were prepared using accounting policies consistent with those in Note 3 to the Annual Financial Statements. 1933 INDUSTRIES INC. Notes to the Condensed Interim Consolidated Financial Statements For the three months ended October 31, 2025 and 2024 (Unaudited - Expressed in Canadian dollars, except where noted) 9 4. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS The preparation of financial statements in accordance with IFRS requires the Company to make estimates and judgments, in applying accounting policies. Management continually evaluates these estimates and judgments based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Actual results may differ from these estimates and judgments which may cause a material adjustment to the carrying amounts of assets and liabilities. The Company’s interim results are not necessarily indicative of its results for a full year. The significant estimates and judgments applied in the preparation of these financial statements are consistent with those applied and disclosed in Note 4 to the Annual Financial Statements. 5. RECEIVABLES A summary of the Company’s receivables is as follows: October 31, 2025 July 31, 2025 $ $ Trade receivables 1,495,764 2,026,764 Other 6,000 5,926 1,501,764 2,032,690 A summary of the Company’s aging of receivables is as follows: October 31, 2025 July 31, 2025 $ $ Current 1,147,346 1,449,656 1 – 30 days 252,669 414,782 31 – 60 days 79,512 81,468 61 – 90 days 83,225 95,405 > 90 days 111,119 164,285 1,673,871 2,205,596 Expected credit loss provision (172,107) (172,906) 1,501,764 2,032,690 A summary of the Company’s Expected Credit Loss provision is as follows: $ Balance, July 31, 2024 422,366 Provision for expected credit loss 45,804 Recovery for expected credit loss (41,799) Write off 295,264 Balance, July 31, 2025 172,906 Provision for expected credit loss (1,170) Recovery for expected credit loss 371 Balance, October 31, 2025 172,107 As at October 31, 2025, trade receivables are presented net of lifetime expected cre --- dit losses of $172,107 (July 31, 2025 - $172,906). During the three months ended October 31, 2025, general and administration included a provision for expected credit losses on trade receivables of $1,170 (2024 - $42,378). 1933 INDUSTRIES INC. Notes to the Condensed Interim Consolidated Financial Statements For the three months ended October 31, 2025 and 2024 (Unaudited - Expressed in Canadian dollars, except where noted) 10 6. INVENTORY A summary of the Company’s inventory is as follows: October 31, 2025 July 31, 2025 $ $ Raw materials 241,489 237,871 Harvested cannabis and trim 830,285 1,477,381 Cannabis oil and equivalent 223,204 481,720 Finished goods 1,756,171 728,968 3,051,149 2,925,940 During the three months ended October 31, 2025, the Company recorded $3,073,164 (2024 - $2,756,077) for inventory expensed to cost of sales. 7. BIOLOGICAL ASSETS A summary of the Company’s biological assets is as follows: $ Balance, July 31, 2024 425,729 Capitalized production costs 6,712,820 Change in fair value less costs to sell due to biological transformation 4,613,076 Transferred to inventory upon harvest (11,154,415) Effects of movement in foreign exchange 1,903 Balance, July 31, 2025 599,113 Capitalized production costs 2,277,225 Change in fair value less costs to sell due to biological transformation (849,517) Transferred to inventory upon harvest (1,266,465) Effects of movement in foreign exchange (166,941) Balance, October 31, 2025 593,415 As at October 31, 2025, the carrying value of biological assets comprises cannabis plants. On average, the grow cycle is approximately 6 weeks (July 31, 2025 - 6 weeks). The fair value less costs to sell is estimated using an expected cash flow model which assumes the biological assets will grow to maturity, be harvested, converted into finished goods inventory, and sold in the retail cannabis market. The fair value measurement for biological assets is categorized as Level 3 (as defined in the fair value hierarchy - Note 17). These estimates are subject to volatility in market prices and several uncontrollable factors, which will be reflected in profit or loss on biological assets in future periods. The following significant unobservable inputs, all of which are classified as Level 3 on the fair value hierarchy, were used by management as part of the model: ? Selling price - calculated as the weighted average selling price for all expected grades and strains of cannabis based on actual selling prices of the fair value of cannabis forms on a per pound basis. ? Yield per plant - represents the number of grams of finished cannabis that are expected to be obtained from each harvested cannabis plant. ? Stage of growth - represents the weighted average number of weeks out of the expected 6-week growing cycle that cannabis plants have reached as of the measurement date. ? Wastage - represents the weighted average percentage of cannabis plants expected to fail to mature to the point of harvest. ? Post-harvest processing costs - calculated as the cost per gram of harvested cannabis to convert into finished dry bulk flower ready to be packaged into finished goods. 1933 INDUSTRIES INC. Notes to the Condensed Interim Consolidated Financial Statements For the three months ended October 31, 2025 and 2024 (Unaudited - Expressed in Canadian dollars, except where noted) 11 7. BIOLOGICAL ASSETS (continued) A summary of the Company’s significant unobservable inputs used in the model to estimate fair value less costs to s --- ell is as follows: October 31, 2025 July 31, 2025 Estimated sales price per gram (1) $2.27 $2.66 Weighted average stage of growth 6 weeks 6 weeks Expected yield per plant 132 grams 172 grams Wastage 0.31% 2.20% Post-harvest processing cost per gram (2) $0.84 $0.98 (1) Estimated sales price per gram input is translated from USD$1.62 (July 31, 2025 - USD$1.93). (2) Post-harvest processing cost per gram input is translated from USD$0.60 (July 31, 2025 - USD$0.71). Increases in costs required up to the point of harvest, harvesting costs and selling costs will decrease the fair value of biological assets, while increases in sales price and expected yield for the cannabis plant will increase the fair value of biological assets. A summary of the impact on the Company’s net income and comprehensive income due to a 10% increase or decrease of each input used in the estimation of fair value less costs to sell is as follows: October 31, 2025 July 31, 2025 $ $ Estimated sales price per gram 66,725 65,687 Weighted average stage of growth 61,450 60,494 Expected yield per plant 61,450 60,494 Wastage (637) (627) Post-harvest processing cost per gram (27,450) (27,023) 8. PREPAID EXPENSES AND DEPOSITS A summary of the Company’s prepaid expenses and deposits is as follows: October 31, 2025 July 31, 2025 $ $ Prepaid expenses 151,607 74,827 Security deposit on leased facilities 244,548 241,514 396,155 316,341 1933 INDUSTRIES INC. Notes to the Condensed Interim Consolidated Financial Statements For the three months ended October 31, 2025 and 2024 (Unaudited - Expressed in Canadian dollars, except where noted) 12 9. PROPERTY AND EQUIPMENT A summary of the Company’s property and equipment is as follows: Leasehold improvements Production equipment Office equipment Right of use assets Total $ $ $ $ $ Cost Balance, July 31, 2024 1,667,305 4,797,569 484,832 14,421,493 21,371,199 Additions 6,521 162,702 - - 169,223 Disposals - (29,738) (484,832) - (514,570) Modifications - (145,653) - (344,291) (489,944) Effects of movement in foreign exchange (264,001) (199,758) - (365,579) (829,337) Balance, July 31, 2025 1,409,825 4,585,122 - 13,711,623 19,706,570 Effects of movement in foreign exchange 169,454 157,601 - 129,320 456,375 Balance, October 31, 2025 1,579,279 4,742,723 - 13,840,943 20,162,945 Accumulated depreciation Balance, July 31, 2024 910,166 4,601,759 430,872 4,543,875 10,486,672 Depreciation 112,006 135,980 53,960 - 301,946 Disposals - (1,692) (484,832) - (486,524) Modification - - - (166,695) (166,695) Effects of movement in foreign exchange (228,266) (287,751) - (292,227) (808,243) Balance, July 31, 2025 793,906 4,448,296 - 4,084,953 9,327,155 Depreciation 27,079 32,301 - 199,161 258,542 Effects of movement in foreign exchange 58,966 20,258 - 248,971 328,195 Balance, October 31, 2025 879,951 4,500,855 - 4,533,085 9,913,892 Carrying amount Balance, July 31, 2025 615,919 136,826 - 9,626,670 10,379,415 Balance, October 31, 2025 699,328 241,868 - 9,307,858 10,249,053 1933 INDUSTRIES INC. Notes to the Condensed Interim Consolidated Financial Statements For the three months ended October 31, 2025 and 2024 (Unaudited - Expressed in Canadian dollars, except where noted) 13 9. PROPERTY AND EQUIPMENT (continued) During the three months ended October 31, 2025: Total depreciation of property and equipment for the three months ended October 31, 2025 was $258,542 (2024 - $267,873). Of the total depreciation during three months ended October 31, 2025, $219,912 was capital --- ized to inventory (2024 - $247,059). As a result of the capitalization to inventory, the Company recognized a depreciation expense for the three months ended October 31, 2025 of $38,630 (2024 - $20,814) in profit or loss. During the year ended July 31, 2025: Total depreciation of property and equipment for the year ended July 31, 2025 was $301,946 (2024 - $2,094,108). Of the total depreciation during year ended July 31, 2025, $130,485 was capitalized to inventory (2024 - $1,993,824). As a result of the capitalization to inventory, the Company recognized a depreciation expense for the year ended July 31, 2025 of $171,461 (2024 - $100,284) in profit or loss. 10. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES A summary of the Company’s accounts payable and accrued liabilities is as follows: October 31, 2025 July 31, 2025 $ $ Trade payables 2,241,090 3,001,919 Accrued liabilities 372,346 370,182 Payroll liabilities 331,962 109,390 2,945,398 3,481,491 11. LEASE LIABILITY A summary of the Company’s lease liability is as follows: $ Balance, July 31, 2024 13,852,011 Repayments (1,524,638) Addition 579,648 Modification of lease (302,114) Interest expense 1,550,890 Penalties and interest 150,000 Effects of movement in foreign exchange (143,529) Balance, July 31, 2025 14,162,268 Repayments (447,819) Interest expense 388,594 Effects of movement in foreign exchange 177,412 Balance, October 31, 2025 14,280,455 Current portion 281,470 Non-current portion 13,998,985 1933 INDUSTRIES INC. Notes to the Condensed Interim Consolidated Financial Statements For the three months ended October 31, 2025 and 2024 (Unaudited - Expressed in Canadian dollars, except where noted) 14 11. LEASE LIABILITY (continued) During the year ended July 31, 2023, the Company entered into an agreement with the landlord of its AMA manufacturing facility for a rent reduction for two years beginning July 1, 2023 and ending May 31, 2025. As a result of the amendments to the lease payments, the Company recognized a decrease to right of use asset of $481,319 (USD$365,272) resulting from the incremental decrease in lease liability. In consideration for the rent reductions, the Company issued a promissory note which will increase for the difference between the original rent payments and the amended rent reduction payments monthly up to USD$400,000. Pursuant to the agreement, the promissory note will be forgiven on May 31, 2031 if the Company remains in compliance and in good standing with its lease obligations. In the event the Company defaults the outstanding principal of the promissory note and a penalty of USD$50,000 will be due on demand. As at July 31, 2024, the Company is in good standings with its lease obligations. During the year ended July 31, 2025, the Company entered into the following modifications to its existing lease arrangements: The Company executed an amendment to extend the lease for its production facility for an additional three years. The extension resulted in a remeasurement of the associated lease liability based on the revised future lease payments discounted at the Company’s incremental borrowing rate on the modification date. The lease for the Company’s Nevada head office was amended to reduce the number of units under lease and to extend the lease term for the unit being retained. The modification was accounted for as a partial termination of the original lease combined with a remeasurement of the remaining lease component, resulting in an adjustment to both the rig --- ht-of-use asset and lease liability. The lease for the cultivation facility was modified to reflect changes in the scheduled monthly lease payments as a result of missed payments during the year. The amendment also resulted in the recognition of additional interest and penalties charged by the landlord. These amounts were expensed in the period incurred and the lease liability was remeasured to reflect the revised payment schedule. A summary of the Company’s future minimum lease payments related to the leases under is as follows: October 31, 2025 $ 2025 1,835,108 2026 1,840,289 2027 1,686,095 2028 1,696,680 Thereafter 23,835,492 Total future minimum lease payments1 30,893,664 Effects of discounting (16,613,209) Total present value of minimum lease payments 14,280,455 1 Total future minimum lease payments include true contractual obligations of the Company’s leases with the option to renewal. 1933 INDUSTRIES INC. Notes to the Condensed Interim Consolidated Financial Statements For the three months ended October 31, 2025 and 2024 (Unaudited - Expressed in Canadian dollars, except where noted) 15 12. CONVERTIBLE DEBENTURES A summary of the Company’s convertible debentures is as follows: 2025 Debentures $ Balance, July 31, 2024 2,869,327 Accretion expense 265,015 Interest expense 307,300 Balance, July 31, 2025 3,441,642 Cash repayment (47,500) Gain on extinguishment of debenture (431,851) Accretion expense 59,060 Interest expense 65,484 Balance, October 31, 2025 3,086,835 On December 31, 2023, the maturity date of the convertible debentures was extended to December 31, 2025 through the settlement of the Amended Debentures excluding interest in arrears, and replacement through the issuance of 3,073,000 10% unsecured convertible debentures (the “2024 Debentures”). A cash payment of $41,000 was paid to certain holders that did not renegotiate their terms. The 2024 Debentures have a one-year maturity date and are convertible into Units at a price of $0.05 per unit. Each Unit is comprised of one common share and one common share purchase warrant entitling the holder to purchase one additional common share at a price of $0.05 for a period of five years from the date of issuance of the new convertible debentures. As the terms of the 2024 Debentures are substantially different from those of the Amended Debentures, the Company treated this as an issuance of new convertible debentures and extinguishment of the Amended Debentures. During the year ended July 31, 2025, gain on extinguishment of debenture was recognized $nil (2024 - $483,941), as there were no additional modifications or settlements of the 2025 Debentures. On September 9, 2025, the Company closed with two arm’s length parties for the repurchase and cancellation of a portion of the Company’s outstanding unsecured convertible debentures. Pursuant to the agreements, the Company repurchased $475,000 in principal value of debentures for total cash consideration of $47,500 and recognized a gain on extinguishment of debenture of $431,851. Following the closing, the debentures were transferred, cancelled, and removed from the Company’s outstanding liabilities. 1933 INDUSTRIES INC. Notes to the Condensed Interim Consolidated Financial Statements For the three months ended October 31, 2025 and 2024 (Unaudited - Expressed in Canadian dollars, except where noted) 16 13. SHARE CAPITAL AND RESERVES a) Authorized Unlimited common shares with no par value and unlimited preferred shares issuable in serie --- s. b) Issued common shares As of October 31, 2025, there were 495,975,107 common shares outstanding (July 31, 2025 – 495,975,107). The Company did not record any common share transactions During the three months ended October 31, 2025. The Company had the following common share transaction during the year ended July 31, 2025: ? On May 30, 2025, the Company issued 5,503,450 common shares with the fair value of $35,090 ($25,000 USD) pursuant to the Membership Interest Purchase Agreement (the “MIPA”) originally entered into between its wholly owned subsidiary, FN Pharmaceuticals, LLC, and for the acquisition of the Seller’s remaining 9% membership interest in Alternative Medicine Association LC (“AMA”). c) Reserves A summary of the Company’s reserves activity is as follows: Stock options Convertible debentures Warrants Total $ $ $ $ Balance, July 31, 2024 6,461,791 64,491 4,269,697 10,795,979 Share-based compensation 4,619 - - 4,619 Balance, July 31, 2025 6,466,410 64,491 4,269,697 10,800,598 Share-based compensation 508 - - 508 Balance, October 31, 2025 6,466,918 64,491 4,269,697 10,801,106 d) Warrants A summary of the Company’s share purchase warrant activity is as follows: Number of warrants Weighted average exercise price # $ Balance, October 31, 2025 and July 31, 2025 3,700,000 0.08 During the year ended July 31, 2024, the Company amended the expiry date of its outstanding 3,700,000 warrants from June 13, 2024, to November 9, 2025. The Warrants were originally issued on November 9, 2020, and have an exercise price of $0.08 and was amended to an exercise price of $0.05. The exercise price and all other terms of the Warrants will remain in full force and effect. 1933 INDUSTRIES INC. Notes to the Condensed Interim Consolidated Financial Statements For the three months ended October 31, 2025 and 2024 (Unaudited - Expressed in Canadian dollars, except where noted) 17 13. SHARE CAPITAL AND RESERVES (continued) A summary of the Company’s share purchase warrants outstanding and exercisable as at October 31, 2025 is as follows: Number of warrants Weighted average exercise price Weighted average remaining life # $ Years November 9, 2025 3,700,000 0.08 0.02 e) Stock options The Company has adopted a stock option plan (the "Plan") for its directors, officers, employees and consultants to acquire common shares of the Company at a price determined by the fair market value of the shares at the date immediately preceding the date on which the option is granted. The terms and conditions of the stock options are determined by the Board of Directors. The aggregate number of stock options granted will not exceed 10% of the issued and outstanding common shares of the Company at the time of shareholder approval of the Plan, with no one individual being granted more than 5% of the issued and outstanding common shares. In addition, the exercise price of stock options granted under the Plan will not be lower than the exercise price permitted by the Canadian Securities Exchange, and all stock options granted under the Plan will have a maximum term of five years. A summary of the Company’s stock option activity is as follows: Number of options Weighted average exercise price # $ Balance, July 31, 2024 22,040,000 0.07 Expired (1,750,000) 0.05 Balance, October 31, 2025 and July 31, 2025 20,290,000 0.08 A summary of the Company’s stock options outstanding and exercisable as at October 31, 2025 is as follows: Expiry date Number of options Number of exercisable opti --- ons Weighted average exercise price Weighted average remaining life # # $ Years November 8, 2025 10,550,000 10,550,000 0.10 0.02 August 24, 2027 8,740,000 8,740,000 0.05 1.81 October 27, 2028 1,000,000 1,000,000 0.05 2.99 20,290,000 20,290,000 0.08 0.94 1933 INDUSTRIES INC. Notes to the Condensed Interim Consolidated Financial Statements For the three months ended October 31, 2025 and 2024 (Unaudited - Expressed in Canadian dollars, except where noted) 18 14. GENERAL AND ADMINISTRATION A summary of the Company’s general and administration for the three months ended October 31, 2025 and 2024 is as follows: Three months ended October 31, 2025 2024 $ $ Advertising, promotion and selling costs 27,858 62,395 Investor relations 419 (2,705) Office expenses and general administration 186,163 190,611 Provision for expected credit losses on receivables (Note 5) (1,170) 42,378 Travel and entertainment 3,950 2,011 217,220 294,690 15. RELATED PARTY TRANSACTIONS Key management personnel include those persons having the authority and responsibility of planning, directing, and executing the activities of the Company. The Company has determined that its key management personnel consist of executive and non- executive members of the Company’s Board of Directors and corporate officers. A summary of the Company’s related party transactions is as follows: Three months ended October 31, 2025 2024 $ $ Directors’ fees included in general and administration (1) - 8,000 Management and consulting fees 90,285 183,552 Share-based compensation 508 2,542 90,793 194,094 (1) Included under office expenses and general administration within general and administration (Note 14). As at October 31, 2025, $nil (July 31, 2025 - $377,463) was owed to directors and officers or their related companies in respect of the services rendered and were included in accounts payable and accrued liabilities. These are non-interest bearing and payable on demand. On May 22, 2025, the Membership Interest Purchase Agreement (the “MIPA”) between the Company’s wholly owned subsidiary, FN Pharmaceuticals, and Mr. Caleb Zobrist (the “Seller”) was amended. Under the amended terms, FN Pharmaceuticals agreed to acquire the Seller’s nine percent (9%) membership interest in Alternative Medicine Association LC (“AMA”) for total consideration of USD$50,000, consisting of USD$25,000 in cash and USD$25,000 payable through the issuance of 5,503,450 common shares of 1933 Industries (the “Shares”). The number of Shares was determined using the 10- day VWAP as of November 27, 2024, the date on which the Nevada Cannabis Compliance Board approved the transactions contemplated under the MIPA. The Shares are subject to a Canadian hold period expiring October 1, 2025, and are also subject to applicable restrictions under the U.S. Securities Act of 1933, as amended. The parties agreed to a closing date of May 30, 2025. Upon completion of the MIPA, FN Pharmaceuticals owns 100% of the membership interests in AMA, the Company’s cultivation and production subsidiary. 1933 INDUSTRIES INC. Notes to the Condensed Interim Consolidated Financial Statements For the three months ended October 31, 2025 and 2024 (Unaudited - Expressed in Canadian dollars, except where noted) 19 16. SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS A summary of the significant non-cash transactions and supplemental disclosure for the three months ended October 31, 2025 and 2024 is as follows: 2025 2024 $ $ Cash interest on lease paid 388,594 27 --- 5,659 Cash interest paid - - 17. FINANCIAL INSTRUMENT AND RISK MANAGEMENT a) Fair value IFRS 13 Fair Value Measurement, establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three levels of the fair value hierarchy are as follows: ? 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 either directly or indirectly; and ? Level 3 - Inputs that are not based on observable market data. The Company measures biological assets at fair value which is categorized as Level 3. The carrying values of cash, receivables, accounts payable and accrued liabilities, and convertible debentures approximate their respective fair values due to the short-term nature of these instruments. The Company’s financial instruments are classified as and measured at amortized cost. The Company’s financial instruments are exposed to certain financial risks. The risk exposures and the impact on the Company’s financial instruments are summarized below. The types of risk exposure and the way in which such exposures are managed are as follows: b) Credit risk Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to fulfill its contractual obligations. The Company’s credit risk relates primarily to cash and receivables. The Company minimizes its credit risk related to cash by placing cash with major financial institutions. The Company regularly reviews the collectability of its receivables. The Company considers the credit risk related to both cash and receivables to be minimal, as the amounts presented in the financial statements already show the expected recoverable amount, which, based on historical trends, is considered reasonable. For the three months ended October 31, 2025, the Company had no customer (July 31, 2025 - two) which individually contributed 10% or more of the Company’s total revenue for the period. Individually, no customers represented a significant portion of total revenue attributed to cannabis products for the three months ended October 31, 2025 (2024 – two customers represented 12.5% and 11.9%) 1933 INDUSTRIES INC. Notes to the Condensed Interim Consolidated Financial Statements For the three months ended October 31, 2025 and 2024 (Unaudited - Expressed in Canadian dollars, except where noted) 20 17. FINANCIAL INSTRUMENT AND RISK MANAGEMENT (continued) c) Liquidity risk Liquidity risk is the risk that the Company will not be able to meet its financial obligations when they become due. The Company’s liquidity risk relates primarily to accounts payable and accrued liabilities, lease liability, note payable, as well as convertible debentures. To mitigate this risk, the Company has a planning and budgeting process in place to determine the funds required to support its ongoing operations and capital expenditures. The Company endeavors to ensure that there is sufficient capital to meet short term business requirements. One of management’s goals is to maintain an optimal level of liquidity through the active management of assets, liabilities and cash flows. A summary of the Company’s undiscounted financial liabilities as at October 31, --- 2025 is as follows: Within 1 year 1 - 3 years Greater than 3 years Total $ $ $ $ Accounts payable and accrued liabilities 2,945,398 - - 2,945,398 Lease liability 1,835,108 5,223,064 23,835,492 30,893,664 Convertible debentures 2,583,975 - - 2,583,975 7,364,481 5,223,064 23,835,492 36,423,037 A summary of the Company’s undiscounted liabilities as at July 31, 2025 is as follows: Within 1 year 1 - 3 years Greater than 3 years Total $ $ $ $ Accounts payable and accrued liabilities 3,481,491 - - 3,481,491 Lease liability 1,798,773 5,192,296 23,965,778 30,956,847 Convertible debentures 3,073,000 - - 3,073,000 8,353,264 5,192,296 23,965,778 37,511,338 The Company’s cash is deposited in major banks, which is available on demand to fund the Company’s operating costs and other financial demands. 1933 INDUSTRIES INC. Notes to the Condensed Interim Consolidated Financial Statements For the three months ended October 31, 2025 and 2024 (Unaudited - Expressed in Canadian dollars, except where noted) 21 17. FINANCIAL INSTRUMENT AND RISK MANAGEMENT (continued) d) Foreign exchange risk The Company’s operational activities are conducted in the U.S. and is exposed to foreign exchange risk due to fluctuations in the U.S. dollar relative to the Canadian dollar. Foreign exchange risk arises from financial assets and liabilities that are denominated in U.S. dollars. The Company has not entered into any agreements or purchased any foreign currency hedging instruments to hedge possible currency risks at this time. Management believes the foreign exchange risk derived from currency conversions is significant. A summary of the Company’s financial assets and liabilities held in U.S. dollar, expressed in Canadian dollars, is as follows: October 31, 2025 July 31, 2025 $ $ Cash 388,664 528,798 Receivables 1,380,100 1,917,722 Accounts payable and accrued liabilities (2,181,422) (2,768,526) Income tax payable (315,262) (312,215) Lease liability (14,280,455) (14,162,268) Net financial liabilities (15,008,375) (14,796,489) The effect on net income and comprehensive income for the three months ended October 31, 2025 of a 10% change in Canadian dollar against the U.S dollar on the above-mentioned net financial liabilities of the Company is estimated to have an increase or decrease in foreign exchange gain or loss of $1,500,838. e) Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is not subject to any cash flow interest rate volatility as its convertible debentures and note payable are carried at a fixed interest rate throughout their term. 18. CAPITAL RISK MANAGEMENT The Company’s objective when managing capital is to safeguard the Company’s ability to continue as a going concern in order to pursue the development of its business. The capital structure of the Company consists of shareholder’s deficiency, which was 4,430,571 as at October 31, 2025 (July 31, 2025 - $4,598,140), and convertible debentures, which was $3,086,835 as at October 31, 2025 (July 31, 2025 - $3,441,642). The Company manages its capital structure and adjusts it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust its capital structure, the Company may issue new equity instruments, new debt, or acquire and/or dispose of assets. The Company’s ability to continue as a going concern is uncertain and depe --- ndent upon the continued financial support of its shareholders, future profitable operations, the lack of adverse political developments in the United States with respect to cannabis legislation and securing additional financing. As at October 31, 2025, the Company is not subject to externally imposed capital requirement. 1933 INDUSTRIES INC. Notes to the Condensed Interim Consolidated Financial Statements For the three months ended October 31, 2025 and 2024 (Unaudited - Expressed in Canadian dollars, except where noted) 22 19. DISCONTINUED OPERATIONS During the three months ended October 31, 2025, the Company’s subsidiary, Infused, ceased operations. This decision was prompted by a key customer halting purchases, and due to the declining CBD market which contributed to the unfeasibility of sustaining operations. As a result, management ceased operations as of May 2024 and has classified these operations separately as discontinued operations. A summary of the net (loss) income and comprehensive (loss) income from discontinued operations are as follows: Three months ended October 31, 2025 2024 $ $ Revenues - 7,037 Cost of sales - (45) Gross profit - 6,992 Expenses (income) Depreciation - 8,994 General and administration 118 2,035 License taxes and insurance 70 136 188 11,165 Net (loss) income from discontinued operations before income tax (188) (4,173) Income tax expense - - Net (loss) income and comprehensive (loss) income from discontinued operations (188) (4,173) Net (loss) earnings per share from discontinuing operations Basic and diluted (0.00) (0.00) A summary of the statement of cash flow from discontinued operations are as follows: Net cash provided by (used in) operating activities (188) 11,948 Net cash provided by investing activities - - Net cash used in financing activities - - Change in cash from discontinuing operations (188) 11,948 20. SUBSEQUENT EVENTS On November 8, 2025, a total of 10,550,000 stock options with an exercise price of $0.10 expired. On November 9, 2025, a total of 3,700,000 share purchase warrants with an exercise price of $0.08 expired.