Financial Analysis

28. COMMITMENTS AND CONTINGENCIES On September 22, 2022, the Securities Exchange Commission (SEC) issued an Order Instituting Proceedings (OIP) pursuant to Section 12(j) of Securities Exchange Act of 1934 (1934 Act), against the Company alleging violations of the 1934 Act, as amended, and the rules promulgated thereunder, by failing to timely file periodic reports. Section 12(j) authorizes the SEC as it deems necessary or appropriate for the protection of investors to suspend for a period not exceeding 12 months, or to revoke, the registration of a security if the SEC finds, on the record after notice and opportunity for hearing, that the issuer of such security has failed to comply with any provision of the 1934 Act, as amended, or the rules promulgated thereunder. The Company has filed an answer to the Order Instituting Proceedings and is seeking a hearing in the matter. The Company is currently fully compliant with all of its filings and has recently filed a form F1 which is pending acceptance by the SEC. The Company anticipates that it will be able to waive this OIP after acceptance. On December 8, 2025, ABCO, entered into an agreement with Blackwell & Associates, (Blackwell ) for the construction of the Grandview Phase II project located at 1425 Grandview Avenue, Paulsboro, New Jersey. Under the agreement, payment is structured on a cost-plus-a-fee basis without a guaranteed maximum price. The total estimated cost of the project is approximately $1,430,000 which incl …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

22. INCOME TAXES The Company is a Canadian resident company, as defined in the Income Tax Act (Canada) (the ITA), for Canadian income tax purposes. However, the Company and its subsidiaries are treated as United States corporations for US federal income tax purposes per the Internal Revenue Code (US) (IRC) and are thereby subject to federal income tax on their worldwide income. As a result, the Company is subject to taxation both in Canada and the United States. The domestic and foreign components of loss before income taxes for the years ended December 31, 2025 and 2024 were as follows: Schedule of components of loss before income taxes Year ended December 31, Year ended December 31, 2025 2024 $ $ Domestic - Canada 5,346,719 (12,838,299 ) Foreign - outside of Canada (513,323 ) 723,495 Income (loss) before provision for income taxes 4,833,396 (12,114,804 ) The components of the income tax expense for the year ended December 31, 2025 and 2024 consisted of the following: Schedule of income tax expense Year ended December 31, Year ended December 31, 2025 2024 $ $ Current income tax expense: Federal 2,673,235 4,749,433 State 51,822 494,207 Total current tax expense 2,725,057 5,243,640 Deferred income tax benefit: Federal (868,695 ) (1,124,831 ) State (252,923 ) (254,262 ) Total deferred income tax benefit (1,121,618 ) (1,379,093 ) Net income tax expense 1,603,439 3,864,547 A reconciliation of the Companys effective tax rate to the statutory United States federal income tax rate f …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

13. LONG-TERM DEBT Transactions related to the Companys long-term debt for the year ended December 31, 2025 and 2024 include the following: Schedule of long-term debt 13.1 13.2 13.3 13.4 13.5 13.6 13.7 Total $ $ $ $ $ $ $ $ Balance, December 31, 2023 389,283 397,013 76,408 - - - - 862,704 Advances - - - 1,285,000 662,251 450,000 - 2,397,251 Interest expense 34,752 40,580 11,890 85,112 - 10,938 - 183,272 Payments (383,333 ) (395,055 ) (88,298 ) (223,991 ) (50,760 ) - - (1,141,437 ) Balance, December 31, 2024 40,702 42,538 - 1,146,121 611,491 460,938 - 2,301,790 Amortization - - - - 630,345 - 12,000,000 12,630,345 Debt issuance costs - - - - - - (739,313 ) (739,313 ) Accretion - - - - - - 181,694 181,694 Interest expense 3,048 3,405 - 66,170 68,365 68,438 479,108 688,534 Payments (43,750 ) (45,943 ) - (361,103 ) (723,876 ) - (1,292,849 ) (2,467,521 ) Balance, December 31, 2025 - - - 851,188 586,325 529,376 10,628,640 12,595,529 Current portion - - - 851,188 216,474 - 1,508,566 2,576,228 Non-current portion - - - - 369,851 529,376 9,120,074 10,019,301 13.1 Note payable owed by Golden Harvests On May 1, 2021, the Company assumed a note payable owed by Golden Harvests with a carrying value of $ 227,056 . The note is for a principal amount of $ 250,000 , interest payable monthly at 10% per annum, and a maturity date of January 14, 2024 . After the maturity date, additional interest payments are due quarterly, at amounts that cause total interest paid over the life of the debt to eq …

LongTermDebtTextBlock · excerpt; the full note is in the filing

3.19 Recently adopted accounting pronouncements Emerging Growth Company The Company is an emerging growth company as defined in Section 102 (b)(1) of the Jumpstart Our Business Startups Act of 2012 (the JOBS Act), which exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has not elected to opt out of such extended transition period, which means that when a standard is issued or revised, and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make the comparison of the Companys consolidated financial statements with another public company difficult or impossible because of the potential differences in accounting standards used. In November 2023, the Financial Accounting Standards Board (FASB) issued ASU 2023-07, Improvements to Reportable …

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24. RELATED PARTY TRANSACTIONS During the years ended December 31, 2025 and 2024, the Company incurred the following related party transactions. Transactions with Key Management Personnel Key management personnel consist of the President and Chief Executive Officer (CEO); the Chief Financial Officer (CFO), and General Manager (GM) of the Company. The compensation to key management is presented in the following table: Schedule of related party transactions Year ended December 31, 2025 2024 $ $ Salaries and consulting fees 1,289,551 1,297,145 Acquisition-related fees paid to GM (Michigan) Royalty fees paid to GM - 263,000 Consulting fees paid to GM 120,000 - Distribution payments 115,000 530,000 Transactions with majority owner of ABCO Consulting fees 21,667 - Other fees 50,000 50,000 Fees paid to entity controlled by spouse of majority owner 553,997 3,695,399 Share-based compensation expense 591,978 409,708 Total 2,742,193 6,245,252 Included in accounts payable and accrued liabilities as at December 31, 2025 are $ 159,413 (December 31, 2024 - $ 1,204,421 ) due to key management related to the above noted transactions. During the year ended December 31, 2025, 2,000,000 options were granted to the GM and the GM exercised 1,000,000 stock options into SV Shares. During the year ended December 31, 2025, an independent Director forfeited 250,000 stock options originally granted in January 2023, and 170,000 stock options originally granted in August 2024. During the year ended Decemb …

RelatedPartyTransactionsDisclosureTextBlock · excerpt; the full note is in the filing

26. SEGMENT REPORTING The reportable segments are those operations whose operating results are reviewed by the chief operating decision maker (CODM) to make decisions about resources to be allocated. The Companys CODM is the CEO and is responsible for the management of the Company. Operating results are reviewed with respect to resource allocation and for which discrete financial information is available. Inter-segment transactions are recorded at amounts that reflect normal third-party terms and conditions, with inter-segment profits eliminated from the cost base of the segment incurring the charge. The Company has identified three operating segments: Oregon segment represents cannabis production and sales activities in Oregon; Michigan segment represents cannabis production and sales activities in Michigan; and New Jersey segment represents cannabis production and sales activities in New Jersey. The Companys general corporate administration expenses are included within Corporate to reconcile the reportable segments to the consolidated financial statements. The Companys CODM reviews the results of the Companys operating segments based on the total revenues, gross profit and net income (loss) in his evaluation of the performance of the operating segments to make decisions regarding resource allocations within the Company. Segmented operational activity for the year ended December 31, 2025 and 2024 is as follows: Schedule of segmented operational activity Segments Oregon Michi …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

3. SIGNIFICANT ACCOUNTING POLICIES 3.1 Foreign currency translation The Companys functional currency is the Canadian dollar, and the functional currency of its subsidiaries is the USD. All transactions in subsidiaries denominated in a currency other than USD are initially remeasured into the USD using exchange rates in effect at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated into USD using exchange rates prevailing at the end of the reporting period. All exchange gains and losses are included in the consolidated statements of comprehensive income (loss). For the Company, assets and liabilities are translated into USD using exchange rates prevailing at the end of the reporting period and income and expense items are translated at the average exchange rates for the period. Exchange differences arising, if any, are recognized in other comprehensive income (loss) and reported as currency translation reserve in shareholders equity. 3.2 Cash and cash equivalents Cash and cash equivalents held in financial institutions have carrying values that approximate fair value. The failure of any bank in which the Company deposits funds may reduce the amount of cash and cash equivalents available for operations or delay the ability to access such funds. The Company does not currently have a commercial relationship with a bank that has failed or has shown indications of experiencing operational distress, nor has the Company exper …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

29. SUBSEQUENT EVENTS The Company evaluated subsequent events through the date the consolidated financial statements were issued, and determined that the following subsequent events occurred as of that date: On January 12, 2026, the Company issued 200,000 SV Shares pursuant to the exercise of stock options for total proceeds of $21,615 (CAD$30,000). On March 12, 2026, the Company announced it has taken operational control of a cannabis production facility in Dwight, Illinois, through its affiliates Grown Rogue Management Associates (GRMA) and Sea Craft, LLC (SEA Craft). GRMA (became an 80% owned susidiary of the Company in January 2026) entered into a membership interest purchase agreement (MIPA) to acquire a 49% interest in SEA Craft, the holder of an Illinois craft grow license and an existing cash balance of $1,000,000, with an option to acquire the remaining 51% subject to regulatory and performance-based considerations. The MIPA is subject to regulatory approval by the Illinois Department of Agriculture, and the Company expects the transaction to close in the second quarter of 2026. Concurrently, SEA Craft entered into a three-year lease with Innovative Industrial Properties, Inc. (IIP) for a 43,000 square foot facility in Dwight, Illinois, including approximately 10,000 square feet of indoor flowering canopy, with capacity to expand to the 14,000 square foot permitted under the craft grow license. The lease with IIP included a corporate guarantee provided by the Company …

SubsequentEventsTextBlock · excerpt; the full note is in the filing