What changed in this filing

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Item 9A. Controls and Procedures

2025-03-26 compared with 2024-03-13 · 360 added, 378 removed, 1594 unchanged (32% of the section changed)

4 unchanged sentences

In connection with the preparation of this Form 10-K, as of December 31, 2024, an evaluation was performed under the supervision and with the participation of our management, including the co-CEOs and CFO, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act).

Based on that evaluation, our management concluded that our disclosure controls and procedures were ineffective as of December 31, 2023 due to the identification of the material weaknesses discussed below.

Based on that evaluation, our management concluded that our disclosure controls and procedures were effective as of December 31, 2024 .

Management ’ s Report on Internal Control Over Financial Reporting

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Management conducted an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2024, based on the framework established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.

Based upon that assessment, our management, including the co-CEOs and CFO, concluded that our internal controls over financial reporting were ineffective as of December 31, 2023 due to the identification of the material weaknesses discussed below.

Identified Material Weaknesses

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

We identified that certain process-level controls associated with third party vendor selection, retention and monitoring and well as processes designed to mitigate risks associated with fraud were not operated effectively.

These ineffective controls were attributable to insufficient policies and procedures and training that impaired our ability to timely discover potential third party fraudulent activity.

The control deficiencies described above created a reasonable possibility that a material misstatement to the consolidated financial statements would not be prevented or detected on a timely basis.

Therefore, we concluded that the deficiencies, in the aggregate, represent material weaknesses in our internal control over financial reporting.

Accordingly, we concluded that our internal controls over financial reporting and disclosure controls and procedures were not effective as of December 31, 2023.

These material weaknesses resulted in an increase to the net loss for the year ended December 31, 2022 by $10,300,000 and an increase to the net loss for the year ended December 31, 2023 by $2,000,000.

Management ’ s Plan to Remediate the Identified Material Weaknesses

The above-described material weaknesses have not been remediated as of the filing of this Annual Report on Form 10-K/A.

Since identifying the material weaknesses described above, management, with oversight from the Audit Committee, has already implemented and continues to implement enhanced policies and procedures intended to address both the identified material weaknesses and to enhance the Company’s overall internal control over financial reporting and disclosure controls and procedures.

As part of the remediation, we have also added an independent director to the Board who now serves as chairman of the audit committee.

The former chair of the audit committee has become an executive director and has taken on the role of Chief Administrative Officer and is overseeing the internal audit function for the Company.

Based upon that assessment, our management, including the co-CEOs and CFO, concluded that our internal controls over financial reporting were effective as of December 31, 2024 .

Remediation of the Identified Material Weaknesses

Following the identification of the material weakness described in our Annual Report on Form 10-K for the year ended December 31, 2023, related certain process-level controls associated with third party vendor selection, retention and monitoring and well as processes designed to mitigate risks associated with fraud, we initiated remediation measures to address the material weaknesses.

Management believes that it has completed its updates to the design and implementation of internal controls to remediate the material weaknesses and enhance the Company’s internal control environment.

We completed our remediation activities by testing the operating effectiveness of the enhanced controls and found them to be effective.

Based on the implementation work and results of testing performed, we have concluded that the previously identified material weaknesses were remediated as of September 30, 2024.

As we continue to evaluate and improve our internal control over financial reporting and disclosure controls and procedures, management may determine to take additional measures to improve controls and determine to modify the remediation plan described above.

We are working to remediate the material weaknesses as efficiently and effectively as possible, but the material weaknesses cannot be considered fully remediated until the updated policies and training have been in place and operated for a sufficient period of time to enable management to conclude, through testing, that these controls are designed and operating effectively.

Accordingly, management will continue to monitor and evaluate the effectiveness of our internal control over financial reporting in the activities affected by the material weaknesses described above.

The material weaknesses previously identified can be as considered to have been fully remediated through updated policies and training.

The remediations have been in place and operated for a sufficient period of time to enable management to conclude, through testing, that these controls are designed and operating effectively.

Management will continue to monitor and evaluate the effectiveness of our internal control over financial reporting on an ongoing basis.

Independent Registered Accounting Firm's Report on Internal Control Over Financial Reporting

1 unchanged sentence

Changes in Internal Control Over Financial Reporting

Other than the material weaknesses and remediation plan discussed above, there were no changes in our internal control over financial reporting (as such term is defined by Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Other than the remediation actions to address the previously reported material weakness as described above, there were no changes in our internal control over financial reporting (as such term is defined by Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter ended December 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Other Information.

13 unchanged sentences

Director, Co-Chairman and Co-CEO

Director, Chief Administrative Officer

Adrienne O’Neal

1 unchanged sentence

Vice President of Operations

Vice President of Midwestern Operations

Tatev Oganyan

General Counsel

Chief Administrative Officer

Director and Executive Officer Biographies

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Scheffler’s broad management experience and past success with guiding the growth of the Company qualifies him to serve on the Board.

Lee Fraser has served as Chief Administrative Officer of the Company since February 2024 and as a director of the Company since May 2023.

Fraser has previously held financial leadership roles at Fox Corp.

from 2019 to 2021 and Warner Bros.

from 2007 to 2019 where he developed business strategies and helped manage the construction and real estate portfolios for both companies.

At Warner Bros.

he was directly responsible for financial oversight of the worldwide Harry Potter Tour, and the Harry Potter Flagship Retail Stores.

Fraser’s expertise also includes corporate finance and financial planning at Gemstar-TV Guide and Waste Management.

Fraser has a Bachelor of Commerce degree from the University of Ottawa and received his Master’s degree in Business Administration from the Andersen School of Management at UCLA.

David Loop has been a director of the Company since June 2024.

After the Company’s acquisition of VidaCann LLC.

Loop has spent his entire career in the horticulture industry, beginning with Loop’s Nursery & Greenhouses in 1980.

Founded in 1949, Loop’s Nursery used environmentally friendly, best management practices to become the largest supplier of potted plants to the supermarket industry in the southeast.

Taking over as CEO in 1983, Mr.

Loop became an industry leader through the introduction of new varieties and production techniques, growing Loop’s Nursery into one of the top 100 greenhouse facilities in the US.

Loop was instrumental in the founding of VidaCann in 2017 by gaining one of the first medical cannabis licenses in the state of Florida and paving the way for greenhouse grown cannabis practices.

Loop currently sits on the Board of Directors for Aris Horticulture, the Advisory Board of North Florida Farm Credit, and is a member of the Jacksonville Civic Council.

He graduated with a Bachelor of Science in Economics and a Bachelor of Science in Horticulture from North Carolina State University.

We believe that Mr.

Fraser’s experience in business development and finance at publicly traded companies qualify him to serve on the Board.

Loop’s experience in the horticulture industry, founding and growing the business of VidaCann LLC and his financial experience qualify him to serve on the Board.

Kevin Martin , CPA , joined Planet 13 as an independent director in February 2024.

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Logan started his career in finance and accounting at Ernst & Young LLP in 1992.

Lee Fraser has served as Chief Administrative Officer of the Company since February 2024 and as a director of the Company since May 2023.

Fraser has previously held financial leadership roles at Fox Corp.

from 2019 to 2021 and Warner Bros.

from 2007 to 2019 where he developed business strategies and helped manage the construction and real estate portfolios for both companies.

At Warner Bros.

he was directly responsible for financial oversight of the worldwide Harry Potter Tour, and the Harry Potter Flagship Retail Stores.

Fraser’s expertise also includes corporate finance and financial planning at Gemstar-TV Guide and Waste Management.

Fraser has a Bachelor of Commerce degree from the University of Ottawa and received his Master’s degree in Business Administration from the Andersen School of Management at UCLA.

Chris Wren has been the Vice President Operations of the Company since March 2014 and is responsible for the oversight of all production and cultivation operations.

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Wren is an internationally recognized cannabis horticulturist and has won several awards for his cultivation efforts, including first place in the 2015 International Cannagraphic Growers Cup.

Todd Hybels has served as Vice President of Midwestern Operations of the Company since March 2022.

Prior to that, Mr.

Hybels was the Chief Operating Officer of NGW (which was acquired by the Company on March 2, 2022) from January 2021 to March 2022.

Hybels was the Director of Development and Construction at NGW from October 2019 to January 2021 and a construction consultant to NGW from March 2019 to October 2019.

Hybels’ insight and initiative were integral in scaling NGW operations to a fully operational premium cultivation facility.

Prior to his time at NGW, Mr.

Hybels provided executive leadership for multi-million dollar construction projects both domestically and internationally, provided strategic leadership to both for-profit and non-profit organizations, and envisioned and built the thriving teams and effective systems necessary to achieve profitable outcomes in each fast-paced, growth-oriented opportunity.

Hybels has a financial background, with a focus on calculated, high-risk commodities.

Tatev Oganyan joined Planet 13 in February 2024 and is responsible for overseeing legal matters for the company.

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Oganyan has a Bachelor of Arts in Political Science and History from UCLA and holds a law degree and Master’s in Dispute Resolution from Pepperdine Caruso School of Law.

Sara Adams has been part of the legal department at Planet 13 since September 2021.

Adams serves as the Company’s Secretary and is generally responsible for corporate governance and regulatory compliance matters.

Adams’ prior experience includes paralegal and accounting services for a sole proprietor attorney from June 2020 to July 2022, accounting and tax services at Barrick Gold Corporation and RubinBrown LLP from January 2019 to July 2020, and paralegal services at Fabian VanCott from 2015 to 2019.

Adams holds a Bachelor of Science in Business Administration, Accounting from the University of Nevada - Las Vegas.

Family Relationships

There are no family relationships between any director or executive officer of the Company.

Involvement in Certain Legal Proceedings

Our directors and our executive officers have not been involved in any of the following events during the past ten years:

bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his/her involvement in any type of business, securities or banking activities;

being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.

Such person was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;

Such person was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;

Such person was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:(i) Any Federal or State securities or commodities law or regulation;

or(ii) Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order;

or(iii) Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity;

Such person was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C.

78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C.

1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

Board Committees

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The current members of the Audit Committee include the following directors:

Kevin Martin (Chair), Lee Fraser, and Adrienne O’Neal.

Kevin Martin (Chair), David Loop, and Adrienne O’Neal.

Martin is an audit committee financial expert within the meaning of Item 407(d) of Regulation S-K under the Securities Act.

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Our Bylaws include an advance notice policy, pursuant to which, any additional director nomination for an annual meeting of Stockholders or a special meeting of the Stockholders (which is not also an annual meeting) must be received by the Secretary of the Company as described in our Bylaws under the heading “ Advance Notice Policy .”

In addition to satisfying the foregoing requirements under our Bylaws, to comply with the universal proxy rules, Stockholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than April 12, 2025.

However, if our 2025 annual meeting of Stockholders is not held between May 12, 2025 and July 11, 2025, then notice must be provided on the later of (a) 60 calendar days prior to the 2025 annual meeting of Stockholders or (b) the 10th day following the date on which notice of the date of the 2025 annual meeting of Stockholders is first made to the Stockholders.

However, if we did not hold an annual meeting during the previous year, or if our date for the annual meeting of Stockholders has changed by more than 30 calendar days from the previous year, then notice must be provided on the later of (a) 60 calendar days prior to the date of the annual meeting of Stockholders or (b) the 10th day following the date on which notice of the date of the annual meeting of Stockholders is first made to the Stockholders.

Stockholders may recommend director candidates for consideration by the Board by writing to our ‎Secretary at the address set forth above in accordance with the notice provisions described above.

Subject to compliance with the Exchange Act and the Company’s Bylaws, to be in proper written form, such notice must (i) set forth all information relating to the nominee that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required pursuant to and in accordance with the Exchange Act, such nominee’s written consent to being named in the proxy statement as a nominee and to serving as a director of the Company if elected, and such other information regarding such nominee as may reasonably be requested by the Board in writing prior to the meeting of Stockholders at which such candidate’s nomination is to be acted upon in order for the Board of Directors to determine the eligibility of such candidate for nomination to be an independent director of the Company, (ii) include the completed and signed questionnaire, representation and agreement required by Section 3.13 of the Company’s Bylaws, (iii) as to the Stockholder giving the notice, set forth (a) the name and address of such Stockholder, as they appear on the Company’s books, and of such beneficial owner, (b) the class or series and number of Stock which are owned beneficially and of record by such Stockholder and such beneficial owner, except that such Stockholder shall in all events be deemed to beneficially own any shares of any class or series of Stock of the Corporation as to which such Stockholder has a right to acquire beneficial ownership at any time in the future, (c) a description of any agreement, arrangement or understanding with respect to the nomination or proposal between or among such Stockholder and/or such beneficial owner, any of their respective affiliates or associates, and any others acting in concert with any of the foregoing, including, in the case of a nomination, the nominee, (d) a description of any agreement, arrangement or understanding (including any derivative or short positions, profit interests, options, warrants, convertible securities, stock appreciation or similar rights, hedging transactions, and borrowed or loaned shares) that has been entered into as of the date of the Stockholder’s notice by, or on behalf of, such Stockholder and such beneficial owners, whether or not such instrument or right shall be subject to settlement in underlying Stock, the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of, such Stockholder or such beneficial owner, with respect to securities of the Corporation, (e) a representation that the Stockholder is a holder of record of Stock entitled to vote at such meeting and intends to appear in person or by proxy at the meeting, and (f) a representation that the Stockholder or the beneficial owner, if any, intends or is part of a group which intends (1) to solicit proxies or votes in support of such Director nominees or nomination in accordance with Rule 14a-19 promulgated under the Exchange Act, and (2) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Company’s outstanding capital stock required to approve or adopt the proposal or elect the nominee.

Insider Trading Policy

We have adopted a timely disclosure confidentiality and insider trading policy (“ Insider Trading Policy ”), governing the purchase, sale and other transactions in our securities that applies to our directors, executive officers, employees, and other covered persons, including agents, and independent contractors (who are engaged in an employee like capacity), any person or company responsible for a principal business unit, division or function of the Company, 10% shareholders of the Company, a major subsidiary of the Company, and persons in a special relationship with the Company, (together the “Covered Persons”) all as defined in the Insider Trading Policy in Schedule “A.”

The Insider Trading Policy prohibits, among other things, insider trading and certain speculative transactions in our securities (including short sales (other than selling in advance of an option exercise where the options will be used to immediately cover the short position) and buying or selling put or call options) and establishes a regular blackout period schedule during which Covered Persons may not trade in the Company’s securities, as well as certain pre-clearance procedures that all directors and executive officers, and from time to time additional employees or independent contractors, must observe prior to effecting any transaction in our securities.

The Company believes that the Insider Trading Policy is reasonably designed to promote compliance with insider trading laws, rules and regulations, and listing standards applicable to the Company.

A copy of the Insider Trading Policy is filed as Exhibit 19.1 to this Form 10-K.

Executive Compensation.

12 unchanged sentences

up to two additional individuals for whom disclosure would have been provided under the above but for the fact that the individual was not serving as an executive officer at the end of the last completed fiscal year.

For the year ended December 31, 2023, we had four NEOs:

For the year ended December 31, 2024, we had five NEOs:

Robert Groesbeck, Co-CEO;

1 unchanged sentence

Dennis Logan, Chief Financial Officer;

and Chris Wren, Vice President of Operations.

Lee Fraser, Chief Administrative Officer, was not serving as an executive officer at December 31, 2023 but, as of February 7, 2024, is one of the two most highly compensated executive officers other than the Co-CEOs.

and Chris Wren, Vice President of Operations and Lee Fraser, Chief Administrative Officer.

Elements of Compensation

40 unchanged sentences

Vice President of Operations

Chief Administrative Officer

Lee Fraser, Chief Administrative Officer, assumed his role as of February 7, 2024, and is one of the two most highly compensated executive officers other than the Co-CEOs.

Fraser’s annual salary beginning at his February 7, 2024 appointment is $300,000.

4 unchanged sentences

Non-equity incentive plan compensation is weighted 80% for each Co-CEO and 60% for other executive officers and 20% for each Co-CEO and 40% for other executive officers, for corporate objectives and key metrics applicable to the executive, respectively, and is reviewed and approved by the Compensation Committee before payment.

The amounts consist of car allowance ($29,608 for 2023 and $29,608 for 2022) and health benefits ($27,800 for 2023 and $27,792 for 2022).

The amounts consist of car allowance ($29,608 for 2023 and $29,608 for 2022) and health benefits ($38,822 for 2023 and $39,816 for 2022).

The amounts consist of car allowance ($29,608 for each of 2024 and 2023) and health benefits ($21,640 for 2024 and $27,800 for 2023).

The amounts consist of car allowance ($29,608 for each of 2024 and 2023) and health benefits ($21,640 for 2024 and $38,822 for 2023).

The amounts consist of car allowance ($13,017 for 2024 and $13,800 for 2023) and health benefits ($6,659 for 2024 and $7,114 for 2023).

The amounts consist of car allowance ($15,170 for each of 2024 and 2023) and health benefits ($31,930 for 2024 and $43,244 for 2023).

The amounts consist of car allowance ($13,906 for 2024 and $0 for 2023) and health benefits ($17,292 for 2024 and $0 for 2023).

Narrative Discussion

For a summary of the significant terms of each NEO’s employment agreement or arrangement, please see below under the heading “ Employment Agreements and Termination and Change of Control Benefits ”.

Outstanding Equity Awards at Fiscal Year-End Table

The following table sets forth outstanding equity awards for the NEOs at December 31, 2023.

All amounts are expressed in US Dollars:

Option Awards

Number of securities underlying unexercised options (#)

Number of securities underlying unexercised option (#)

Equity incentive plan awards:

Number of securities underlying unexercised unearned

Option exercise price

Option expiration

Number of shares or units of stock that have not vested

Market value of shares of units of stock that have not

Equity incentive plan awards:

Number of unearned shares, units or other rights that have not vested (#)

Equity incentive plan awards:

Market or payout value of unearned shares, units or other rights that have not vested ($)

unexercisable

Robert Groesbeck

Larry Scheffler

For each named executive officer 100% of the listed incentive awards vested on December 1, 2023.

Based on the closing share price of the Common Stock as traded on the CSE on December 31, 2023 of CAD$0.86 at an exchange rate of USD$1.00=CAD$1.3226.

Equity Grant Practices

The Compensation Committee monitors our equity grant practices to evaluate whether such policies comply with governing regulations and are consistent with good corporate practices.

Grants of equity awards to executive officers are approved by the Compensation Committee and are typically made at scheduled Compensation Committee meeting dates or in connection with a new hire or promotion, and irrespective of the timing of any financial announcement.

We do not grant, and in 2024 did not grant, stock options in anticipation of the release of material non-public information.

We attempt to make equity awards during periods when we do not have material non-public information that could impact our stock price and we do not time, and in 2024 did not time, the release of material non-public information based on equity grant dates or for the purpose of affecting the value of executive compensation.

Employment Agreements and Termination and Change of Control Benefits

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All other compensation

Michael Harman

Adrienne O’Neal

1 Amounts were paid to Mr.

Fraser while he was an independent director

Compensation Committee Interlocks and Insider Participation

During 2023, our Compensation Committee members were Adrienne O’Neal (Chair) and Lee Fraser, neither of whom currently is, or formerly was, an officer or employee of the Company.

During 2024, our Compensation Committee members were Adrienne O’Neal (Chair) and Kevin Martin, neither of whom currently is, or formerly was, an officer or employee of the Company.

None of our executive officers served as a member of the Board or Compensation Committee of any other company that had one or more executive officers serving as a member of our board of directors or Compensation Committee.

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(the “ Code of Ethics ”) to assist all directors, officers, employees, and where practical key consultants of the Company and its subsidiaries to maintain the highest standards of ethical conduct in business affairs.

A copy of the Code of Ethics can be found in the investors section of our website at www.planet13.com/investors-information/ .

A copy of the Code of Ethics can be found in the Governance Documents section of our website at https://investors.planet13.com/governance/governance-documents/default.aspx .

We intend to satisfy the disclosure requirements of the SEC regarding amendments to, or waivers from, the Code of Ethics, by posting such information on the same website.

We will provide a written copy of the Code of Ethics to anyone without charge, upon request written to Planet 13 Holdings Inc., Attention:

Corporate Secretary, 2548 West Desert Inn Road, Suite 100, Las Vegas, Nevada, 89109, (702) 815-1313.

Principal Accounting Fees and Services.

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Warrant Indenture, dated April 26, 2018, among 10653918 Canada Inc., Odyssey Trust Company and Carpincho Capital Corp

Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934

Description of Capital Stock.

Specimen Common Stock Certificate of Planet 13 Holdings Inc., a Nevada corporation.

32 unchanged sentences

Employment Agreement, dated February 7, 2024, between Lee Fraser and BLC Management Company LLC.

First Amendment to Membership Interest Purchase Agreement, dated April 26, 2024, by and between Planet 13 Holdings Inc., VidaCann LLC, Loop’s Dispensaries, LLC, Ray of Hope 4 Florida, LLC, Loops Nursery & Greenhouses, Inc., David Loop and Mark Ascik and David Loop, solely in his capacity as Seller Representative.

Form of Promissory Note, dated May 10, 2024 (Seller Note)

Form of Promissory Note, dated May 10, 2024 (Related Party Note)

Business Loan Agreement, dated February 2, 2022, by and between VidaCann, LLC and Lafayette State Bank

Promissory Note, dated February 2, 2022, issued by VidaCann, LLC

Form of Lock-Up Agreement, dated May 10, 2024

Agreement of Lease by and between Loop’s Nursery & Greenhouses, Inc., a Florida corporation and Family Trust Created Under the Ruth F.

Loop Revocable Trust Dated November 1, 1991, as Amended, a Florida revocable trust as Landlord and VidaCann, LLC, a Florida limited liability company as Tenant, concerning 4842 & 4844 Race Track Road, St.

John’s County, Florida 32259, dated August 25, 2023.

Insider Trading Policy

List of Subsidiaries of Planet 13 Holdings Inc.

Consent of Independent Registered Public Accounting Firm

Consent of Masters, Smith & Wisby, P.A.

(VidaCann 2022)

Consent of Masters, Smith & Wisby, P.A.

(VidaCann 2023)

Certification of Principal Executive Officer (Robert Groesbeck) Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

4 unchanged sentences

Description of Capital Stock.

Audited financial statements of VidaCann, LLC as of December 31, 2023 and for the year ended December 31, 2023, and the notes related thereto

Unaudited financial statements of VidaCann, LLC as of March 31, 2024 and for the three months ended March 31, 2024, and the notes related thereto

Audited financial statements of VidaCann, LLC as of December 31, 2022 and for the year ended December 31, 2022, and the notes related thereto

Unaudited Pro Forma Consolidated Financial Statements

Inline XBRL Instance Document

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This filing omits exhibits and/or schedules pursuant to Item 601(a)(5) of Regulation S-K.

A copy of any omitted schedule and/or exhibit will be furnished to the SEC upon request.

Indicates a management contract or compensatory plan, contract or arrangement in which directors or executive officers participate.

Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K.

A copy of any omitted schedule and/or exhibit will be furnished to the SEC upon request.

Certain confidential portions of this exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K.

Copies of the unredacted exhibit will be furnished to the SEC upon request.

Form 10-K Summary

24 unchanged sentences

/s/ Lee Fraser

Chief Administrative Officer and Director

Chief Administrative Officer

March 26, 2025

/s/ David Loop

March 26, 2025

/s/ Kevin Martin

45 unchanged sentences

Restricted Cash

2,050,584 5,450,584

Accounts Receivable

6 unchanged sentences

54,299,043 47,310,987

Property and Equipment

Property, Plant and Equipment

63,511,423 67,551,697

24 unchanged sentences

46,448,666 25,271,706

Warrant Liability

Other Long-term Liabilities

1,220,722 33,000

Uncertain Tax Positions

Deferred Tax Liability

17 unchanged sentences

Revenues, net of discounts

$ 98,505,170 $ 104,574,377

Cost of Goods Sold

( 53,682,026 ) ( 56,599,623 )

44,823,144 47,974,754

General and Administrative

42,421,172 49,395,500

Sales and Marketing

5,368,473 3,504,309

Lease Expense

3,105,996 2,744,532

Impairment loss

46,846,866 32,750,466

Depreciation and Amortization

8,180,465 8,337,476

Total Expenses

105,922,972 96,732,283

Loss From Operations

( 61,099,828 ) ( 48,757,529 )

Other Income (Expense):

Interest income (expense), net

195,722 189,473

Foreign exchange gain (loss)

3,653 ( 25,528 )

Change in fair value of warrant liability

18,127 7,177,805

Gain on Sale-Leaseback

Provision for stolen funds

( 2,000,000 ) ( 10,300,000 )

Other Income, net

807,023 413,029

Total Other Income (Expense)

( 975,475 ) ( 2,035,829 )

Loss Before Provision for Income Taxes

( 62,075,303 ) ( 50,793,358 )

Provision For Income Taxes

Current Tax expense

( 9,868,881 ) ( 10,672,538 )

Deferred Tax Recovery

( 1,664,574 ) 1,920,177

( 11,533,455 ) ( 8,752,361 )

Deferred Tax recovery (expense)

Net Loss and Comprehensive Loss

$ ( 73,608,758 ) $ ( 59,545,719 )

Loss per Share

Basic and diluted loss per share

$ ( 0.33 ) $ ( 0.27 )

Weighted Average Number of Shares of Common Stock

Basic and diluted

221,964,287 216,586,621

The accompanying notes are an integral part of these consolidated financial statements.

7 unchanged sentences

( 134,701,804

Shares Issued on Settlement of RSUs

81,084 - - - -

Share based Compensation - RSUs

- - 7,459,267 - 7,459,267

Shares Issued on Acquisition

21,361,002 - 56,320,332 - 56,320,332

Replacement Options Issued on Acquisition

- - 1,239,818 - 1,239,818

Shares Issued on Exercise of Other Warrants

242,700 - 1,044,258 - 1,044,258

Shares Issued on Exercise of Options

97,325 - 97,980 - 97,980

Share based Compensation - RSUs - Taxes Paid in Lieu of Share Issuance

Shares Issued on Settlement of RSUs

Shares Issued on Exercise of Purchase Option-Illinois License

Shares Issued on SDC Settlement

Net Loss for the Year

- - - ( 59,545,719 ) ( 59,545,719 )

Balance, December 31, 2023

( 208,310,562

- ( 295,838 ) - - -

Share based Compensation - RSUs

- - 2,520,407 - 2,520,407

Share based Compensation - RSUs - Taxes Paid in Lieu of Share Issuance

- - ( 267,529 ) - ( 267,529 )

Shares Issued on Settlement of RSUs

783,832 - - - -

Shares Issued on Exercise of Purchase Option-Illinois License

1,063,377 - 946,406 - 946,406

Shares Issued on SDC Settlement

1,000,000 - 728,700 - 728,700

Proceeds from public offering

Share issuance costs

Shares Issued in VidaCann acquisition

Finder shares issued in connection with VidaCann acquisition

Net Loss for the Year

- - - ( 73,608,758 ) ( 73,608,758 )

Balance, December 31, 2024

7 unchanged sentences

CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES

$ ( 73,608,758 ) $ ( 59,545,719 )

Adjustments for items not involving cash:

Share based compensation

2,520,407 7,459,267

Non-cash lease expense

4,974,644 4,737,162

12,147,052 11,258,697

Amortization of intangibles

Change in fair value of warrant liability

( 18,127 ) ( 7,177,805 )

Gain on translation of warrant liability

Deferred tax recovery

2,024,355 ( 1,736,724 )

Proceeds from lease incentive

Lease incentive amortization

( 109,902 ) ( 239,133 )

Impairment of goodwill

Impairment of intangible assets

46,846,866 6,947,778

Gain on sale leaseback

- ( 509,392 )

Shares issued for SDC settlement

Loss on impairment of fixed assets

Loss on impairment of ROU assets

Loss on impairment of intangible assets

Loss on disposal of intangible assets

Loss on disposal of property and equipment

180,177 70,601

( 4,314,586 ) ( 11,470,475 )

Finders shares issued in VidaCann acquisition

Shares issued for SDC settlement

Net Changes in Non-cash Working Capital Items

( 3,589,711 ) 8,273,643

Repayment of lease liabilities

( 4,141,221 ) ( 3,566,817 )

Total Operating

( 12,045,518 ) ( 6,763,649 )

FINANCING ACTIVITIES

Proceeds from exercise of warrants and options

Taxes paid in lieu of share issuance - RSUs

Proceeds from public share issuance, net of share issuance costs

Net Cash From VidaCann Acquisition

VidaCann Acquisition-Cash Component

Total Financing

( 267,529 ) 1,142,238

INVESTING ACTIVITIES

Purchase of property, plant and equipment

( 8,393,593 ) ( 16,674,704 )

Proceeds from sale of fixed assets

Net cash acquired through NGW acquisition

Purchase of licenses

( 866,250 ) -

Proceeds from sale/lease back

Purchase of domain name

Proceeds from sale of licenses

Total Investing

( 9,194,965 ) ( 14,175,937 )

NET CHANGE IN CASH DURING THE YEAR

( 21,508,012 ) ( 19,797,348 )

CASH AND RESTRICTED CASH

Beginning of Year

38,789,604 58,586,952

$ 17,281,592 $ 38,789,604

Supplemental cash flow information (Note 16)

8 unchanged sentences

We are licensed in these jurisdictions as follows:

six Nevada licenses for cultivation ( three medical and three adult-use), six Nevada licenses for production ( three medical and three adult-use), three Nevada dispensary licenses ( one medical and two adult-use), two Nevada licenses for distribution ( one active, one conditional), one medical and adult-use dispensary license in California, one distribution license in California, one event organizer license in California, one Medical Marijuana Treatment Center license in Florida (unlimited medical dispensaries, cultivation and processing) and one adult-use dispensary license in Illinois.

On March 2, 2022, by way of acquisition and in addition to the licenses listed above, we added three California cultivation licenses ( one medical and two adult-use), one California cultivation nursery license, one California distribution license, one California license for adult-use manufacture, and one pending California license for cultivation packaging.

six Nevada licenses for cultivation ( three medical and three adult-use), six Nevada licenses for production ( three medical and three adult-use), three Nevada dispensary licenses ( one medical and two adult-use), two Nevada licenses for distribution ( one active, one conditional), one medical and adult-use dispensary license in California, two distribution licenses in California, one event organizer license in California, one medium indoor cultivation license in California, one non-volatile manufacturing license in California, one Medical Marijuana Treatment Center license in Florida (unlimited medical dispensaries, cultivation and processing) and one adult-use dispensary license in Illinois.

P13 is a public company which is listed on the Canadian Securities Exchange (“CSE”) under the symbol PLTH and on the OTCQX exchange under the symbol “PLNH”.

66 unchanged sentences

100 % N/A Holding company

Planet 13 Lifestyles LLC

100 % 0 % Retail sales of apparel and accessories

VidaCann, LLC

100 % 0 % Florida license holding company

Planet 13 Innovations LLC

100 % 0 % Intellectual property holding company

Club One Three, LLC

12 unchanged sentences

iii) Emerging growth company

The Company is an “Emerging Growth Company”, as defined in Section 2 (a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it has taken advantage of certain exemptions that are not applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

The Company is an “Emerging Growth Company”, as defined in Section 2 (a) of the Securities Act, as modified by the JOBS Act, and it has taken advantage of certain exemptions that are not applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

Further, Section 102 (b)( 1 ) of the JOBS Act 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 reporting standards.

126 unchanged sentences

Loyalty Points Reward Programs

In certain of its markets, the Company offers a loyalty reward program to its dispensary customers that allows its customers to earn discounts on future purchases.

In certain of its markets, the Company offers a loyalty reward program to its dispensary customers that allows its customers to earn discounts or free product rewards on future purchases.

Loyalty points are earned when a qualifying purchase is made.

When a customer attains a certain number of points, the customer can redeem the credits on future in-store purchases.

Loyalty points do not have an expiration date.

Loyalty points expire at the sole discretion of the Company.

A portion of the revenue generated in a sale is allocated to the loyalty points earned.

75 unchanged sentences

Warrant liability is measured based on level 1 inputs (Note 11 ).

The Company's prepaid expenses and other current assets, long lived assets, including property and equipment, intangible assets and goodwill are measured at fair value when there is an indicator of impairment and are recorded at fair value only when an impairment charge is recognized.

The Company's prepaid expenses and other current assets, long lived assets, including property, plant and equipment, intangible assets and goodwill are measured at fair value when there is an indicator of impairment and are recorded at fair value only when an impairment charge is recognized.

(o) Loss per share

4 unchanged sentences

When the Company is incurring losses, basic and diluted loss per share are the same since including the exercise of outstanding options and warrants in the diluted loss per share calculation would be antidilutive.

(p) Operating segments

Operating segments are components of the Company that engage in business activities which generate revenues and incur expenses (including intercompany revenues and expenses related to transactions conducted with other components of the Company).

The operations of an operating segment are distinct, and the operating results are regularly reviewed by the chief operating decision maker (“CODM”) for the purposes of resource allocation decisions and assessing its performance.

The Company’s Co-Chief Executive Officers are the Company’s CODM.

The Company determined that each of its locations represents an operating segment.

These operating segments have been aggregated into a single reportable segment as the Company operates as a vertically integrated cannabis company with dispensary, cultivation, production and distribution operations in the state of Nevada and dispensary, cultivation and distribution operations in the state of California.

As at December 31, 2023 and 2022 , all the Company’s non-current assets were located in the United States and 100 % of the Company’s revenue was generated in the United States.

(p) Reportable Segment Information

Management has determined that the Company functions as a single operating segment, and thus reports as a single reportable segment.

This determination is based on rules prescribed by GAAP applied to the manner in which management operates the Company.

In particular, management assessed the discrete financial information routinely reviewed by the Company’s chief operating decision maker (“CODM”), its Co-Chief Executive Officers, to monitor the Company’s operating performance and support decisions regarding allocation of resources to its operations.

Specifically, performance is continuously monitored at the consolidated level as the Company is engaged in essentially the same business, which consists of cultivation, production, and sale of cannabis products, either for medicinal-use and/or adult-use, depending on applicable state laws and regulations.

The CODM evaluates the financial performance of the Company primarily by evaluating revenue (as disclosed on the consolidated statements of operations), adjusted EBITDA (a non-GAAP measure), and cash provided by operating activities (as disclosed on the consolidated statements of cash flows) to assess the Company's results and in the determination of allocating resources.

The CODM may use disaggregated revenue metrics to evaluate product pricing, store count, and customer retention, among other things.

The significant expenses reviewed by the CODM are cost of goods sold, sales and marketing expenses, and general and administrative expenses as presented on the consolidated statements of operations.

As at December 31, 2024 and 2023 , all of the Company’s assets were located in the United States and 100 % of the Company’s revenue was generated in the United States.

(q) Critical accounting estimates and judgements

24 unchanged sentences

Asset Impairment

Asset impairment tests require the allocation of assets to asset groups, where appropriate, which requires significant judgment and interpretation with respect to the integration between the assets and shared resources.

Asset impairment tests require the determination of whether there is an indication of impairment.

The assessment of whether an indication of impairment exists is performed at the end of each reporting period and requires the application of judgment, historical experience, and external and internal sources of information.

The Company evaluates the recoverability of long-lived assets, including property, plant and equipment, ROU assets, goodwill and other identifiable intangible assets, whenever events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverable.

The Company performs impairment tests of indefinite-lived intangible assets on an annual basis or more frequently in certain circumstances.

Factors which could trigger an impairment review include significant underperformance relative to historical or projected future operating results, significant changes in the manner of use of the assets or the strategy for the overall business, a significant decrease in the market value of the assets or significant negative industry or economic trends.

When the Company determines that the carrying value of long-lived assets may not be recoverable based upon the existence of one or more of the indicators, the assets are assessed for impairment based on the estimated future undiscounted cash flows expected to result from the use of the asset and its eventual disposition.

If the carrying value of an asset exceeds its estimated future undiscounted cash flows, an impairment loss is recorded for the excess of the asset’s carrying value over its fair value.

The fair value of the long-lived assets included in an impaired asset group may be determined using an income, market, or cost approach, or a combination thereof.

The income approach utilizes assumptions including management’s best estimates of the expected future cash flows and the estimated useful life of the asset group.

The cost approach utilizes assumptions for the current replacement costs of similar assets adjusted for estimated depreciation and deterioration of the existing equipment and economic obsolescence.

The market approach requires the use of judgment in evaluating market comparable assets.

Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors.

The fair value measurements for the asset group fair values represent Level 3 measurements.

During the year ended December 31, 2024 the Company recorded a full impairment charge of $ 17,118,954 associated with property, plant and equipment, ROU assets and the retail license for its Orange County, California dispensary as the fair value of these assets based on management's expected future cash flows equal $ 0 .

During the year ended December 31, 2024 the Company recorded a full impairment charge of $ 1,763,901 associated with property, plant and equipment and ROU assets related to its cultivation facility in Beatty Nevada.

Due the expected closure of this facility, management's expected future cash flows equal $ 0 .

During the year ended December 31, 2024 the Company recorded an impairment charge of $ 2,393,087 associated with property plant and equipment related to an abandoned cultivation project in Florida.

The fair value of these assets was determined to be $ 400,000 based on management's expected future cash flows.

During the year ended December 31, 2023 the Company recorded an impairment charge of $ 46,846,866 associated with a Florida license as the carrying value exceeded the fair value by that amount.

Deferred tax assets and uncertain tax positions

25 unchanged sentences

Changes in the regulatory structure, lack of retail distribution locations or lack of consumer demand could result in future inventory reserves.

Impairment of indefinite life intangible assets and goodwill

The Company makes estimates in determining the future cash flows and discount rates in the quantitative impairment test to compare the fair value to the carrying value.

(r) Accounting standards issued but not yet effective

Business Combinations

In October 2021, the FASB issued ASU 2021 - 08, Accounting for Contract Assets and Contact Liabilities from Contracts with Customers (“ASU 2021 - 08” ) (“ASC 805” ).

ASU 2021 - 08 requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities from acquired contracts using the revenue recognition guidance under ASC 606 in order to align the recognition of a contract liability with the definition of performance obligation.

This approach differences from the current requirement to measure contract assets and contract liabilities acquired in a business combination at fair value.

ASU 2021 - 08 is effective for financial statements of non-public business entities issued for fiscal years beginning after December 15, 2023 and early adoption is permitted.

The Company is currently evaluating the effect of adopting this ASU.

(r) Accounting standards update

ASU 2023 - 07 In November 2023, the FASB issued ASU No.

2023 - 07, “Segment Reporting (Topic 280 ):

Improvements to Reportable Segment Disclosures”.

The amendments in the ASU require disclosures to include significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”), a description of other segment items by reportable segment, and any additional measures of a segment's profit or loss used by the CODM when deciding how to allocate resources.

ASU 2023 - 07 is effective for fiscal years beginning after December 15, 2023, with early adoption allowed.

The Company adopted this guidance as of January 1, 2024, and the adoption did not have a material impact on our consolidated financial statements.

Refer to the "Reportable Segment Information," above in this Note 3, Summary of Significant Accounting Policies.

(s) Sale-leaseback transactions

43 unchanged sentences

414,570 779,638

1,211,694 126,923

Miscellaneous

1 unchanged sentence

$ 4,568,816 $ 4,072,820

Property and equipment

Property, plant and equipment

Gross carrying amount

8 unchanged sentences

- 26,786 1,157,443 7,392,523 ( 8,576,752 ) -

Asset Impairments

( 625,146 ) ( 1,718,076 ) ( 1,321,587 ) ( 14,940,679 ) ( 2,398,087 ) ( 21,003,575 )

- - ( 93,206 ) - ( 62,960 ) ( 156,166 )

At December 31, 2024

8 unchanged sentences

22,184 782,287 2,583,428 10,026,791 - 13,414,690

Asset Impairments

( 255,971 ) ( 374,751 ) ( 1,118,722 ) ( 7,369,068 ) - ( 9,118,512 )

Transfers & disposals

12 unchanged sentences

(in United States Dollars)

During the year ended December 31,2023 the Company disposed of various equipment for proceeds of $ 64,878 ( 2022 - $nil ) with a net book value of $ 245,055 ( 2022 - $ 8,786 ) resulting in a net loss of $ 180,177 ( 2022 - net loss of $ 3,898 ).

During the year ended December 31, 2024 the Company disposed of various equipment for proceeds of $ 21,000 ( 2023 - $ 64,878 ) with a net book value of $ 99,562 ( 2023 - $ 245,055 ) resulting in a net loss of $ 78,563 ( 2023 - net loss of $ 180,177 ).

During the year ended December 31, 2024 the Company recorded a full impairment charge of $ 7,752,871 associated with property, plant and equipment, for its Orange County, California dispensary as the fair value of these assets based on management's expected future cash flows equal $ 0 .

During the year ended December 31, 2024 the Company recorded a full impairment charge of $ 1,739,105 associated with property, plant and equipment related to its cultivation facility in Beatty Nevada.

Due the expected closure of this facility, management's expected future cash flows equal $ 0 .

During the year ended December 31, 2024 the Company recorded an impairment charge of $ 2,393,087 associated with property, plant and equipment related to building materials for its cultivation facility in Summerfield, Florida.

Due the abandonment of this project, the fair value of these building materials is $ 400,000 based on management's estimation of future cash flows.

Intangible assets and goodwill

Retail Dispensary Santa Ana

Retail Dispensary Clark County

Cultivation and Production Clark County

Master License Florida

Retail Dispensary

Cultivation and

Production Clark

Master License

Illinois License

Cultivation Coalinga CA Other Intangibles

Cultivation Coalinga CA Goodwill

Other Intangibles

License-VidaCann

carrying amount

2 unchanged sentences

- - - - 1,812,656 - - - - 1,812,656

Impairment loss

- - - - - ( 6,947,778 ) ( 25,802,688 ) - ( 32,750,466 )

Balance at December 31, 2022

$ 6,151,343 $ 690,000 $ 709,798 $ 55,846,866 $ - $ 6,232,222 $ - $ 30,000 $ 69,660,229

- - - - 1,812,656 - - - 1,812,656

Transfer to held for sale

4 unchanged sentences

$ 6,151,343 $ 690,000 $ 709,798 $ - $ 1,812,656 $ 5,860,000 $ - $ - $ 30,000 $ 15,253,797

At December 31, 2021

- - - - - - 9,000,000 30,661,477 - 39,661,477

- - - - - 372,222 - - 372,222

At December 31, 2022

$ - $ - $ - $ - $ - $ 372,222 $ - $ - $ 372,222

- - - - - - - - -

At December 31, 2023

$ - $ - $ - $ - $ - $ 372,222 $ - $ - $ 372,222

Carrying amount

Balance at December 31, 2022

Impairment loss

( 6,151,343 ) - - - - - - - - ( 6,151,343 )

4 unchanged sentences

(in United States Dollars)

NGW Acquisition

On March 2, 2022, the Company acquired 100 % ownership interest of Next Green Wave Holdings, Inc.

(“NGW”) and accounted for the transaction as a business combination pursuant to ASC 805.

NGW was incorporated in 2011 and was formed for the purpose of cultivating and selling cannabis products in the state of California, where it owns and operates a cultivation and manufacturing facility.

The Company executed the NGW transaction in order to introduce certain of its brands to the California market;

complement its dispensary operations in Santa Ana, California;

and expand its California revenue base.

The aggregate purchase price for the NGW transaction was $ 57,574,938 and consisted of $ 14,788 in cash consideration, $ 1,239,818 in replacement options and $ 56,320,332 in share consideration.

The share consideration was comprised of 21,361,002 common shares of the Company at a fair value of $C3.34 per common share, which were issued on March 2, 2022.

During the year ended December 31, 2024 the Company recorded a full impairment charge of $ 6,151,343 associated with the licenses, for its Orange County, California dispensary as the fair value of these licenses based on management's expected future cash flows are equal $ 0 .

During the year ended December 31, 2023 the Company recorded an impairment charge of $ 46,846,866 associated with the Florida MMTC license as the carrying value exceeded the fair value by that amount due to the planned sale of the license in 2025.

VidaCann Acquisition

On August 28, 2023, the Company entered into a Membership Interest Purchase Agreement (“ Purchase Agreement ”) with VidaCann, LLC (“ VidaCann ”), Loop’s Dispensaries, LLC (“ Dispensaries ”), Ray of Hope 4 Florida, LLC (“ Ray of Hope ”) and Loops Nursery & Greenhouses, Inc.

(“ Nursery ” and together with Dispensaries and Ray of Hope, the (“ Sellers ”), David Loop (“ Loop ”) and Mark Ascik (together with Loop, the “ Indemnifying Members ”) and Loop, solely in his capacity as Seller Representative, pursuant to which, upon the terms and subject to the conditions set forth therein, the Company would acquire from the Sellers all of the membership interests in VidaCann (the “ Transaction ”).

On May 9, 2024, the Company acquired 100 % ownership interest of VidaCann, LLC.

(“ VidaCann ”) and accounted for the transaction as a business combination acquisition pursuant to ASC 805.

VidaCann was established in 2003 and was formed for the purpose of cultivating and selling cannabis products in the state of Florida, where it owns and operates a cultivation and manufacturing facility.

The Company executed the VidaCann transaction in order to expedite its entrance into the attractive Florida cannabis market with an existing customer base and operational cultivation and manufacturing facilities.

Pursuant to the Purchase Agreement, the Company acquired VidaCann from the Sellers for agreed consideration at closing of the Transaction (the “ Closing ”) equal to the sum of:

(i) 80,564,554 shares of common stock of the Company (the “ Base Share Consideration ”), plus 1,307,698 shares with a fair value of $ 750,000 that were issued to VidaCann’s industry advisor (the “ VC Advisor ”) as acquisition-related costs;

(ii) a cash payment of US$4,000,000 (the “Closing Cash Payment”);

and (iii) promissory notes issued by the Company to the Sellers in the aggregate principal amount of US$5,000,000, with each of the above components subject to adjustments as set out in the Purchase Agreement.

Based on the closing price of the Company’s common shares of ( CAD$0.9100 ) US$0.6647 on May 9, 2024 on the Canadian Securities Exchange (the “ CSE ”) (based on the Bank of Canada CAD to USD exchange rate on May 9, 2024 of CAD$1.00=US$0.7304 ), the total consideration was valued at $ 50,755,443 .

As contemplated by the definitive agreement, VidaCann continued to have US$3 million of bank indebtedness and US$1.5 million of related party notes to former VidaCann managers at the time of closing, which were assumed by the Company.

The Seller of the majority interest in VidaCann also has the right to nominate a director to the Company’s board of directors effective the next business day following the Company’s 2024 annual meeting of stockholders in June.

The Seller has selected David Loop, the former Chief Executive Officer of VidaCann, as its board nominee.

The VidaCann acquisition was deemed to be a business combination under ASC 805.

The following table summarizes the allocation of consideration exchanged to the estimated fair value of the tangible and intangible assets acquired:

Consideration paid:

Issuance of 21,361,002 Class A Shares

Issuance of 1,106,925 replacement options

Issuance of 80,564,554 Common Shares

Note Payable to Former VidaCann Shareholders

Fair value of net assets acquired:

Accounts Receivable

Prepaids and other assets

Property, plant and equipment

Intangible assets

ROU Liabilities

( 21,371,614 )

Notes Payable

( 4,010,582 )

Accounts Payable and Accrued Liabilities

Income taxes payable

Deferred tax liability

( 4,131,686 )

The purchase price allocations for the NGW transaction reflect various fair value estimates and analyses relating to the determination of fair value of certain tangible and intangible assets acquired and residual goodwill.

The Company determined the estimated fair value of the acquired working capital, and identifiable intangible assets and goodwill after review and consideration of relevant information including discounted cash flow analyses, market data and management’s estimates, prepared by an independent valuation firm.

The purchase price allocations for the VidaCann transaction reflect various fair value estimates and analyses relating to the determination of fair value of certain tangible and intangible assets acquired and residual goodwill.

The estimated fair value of acquired working capital was determined to approximate carrying value.

The goodwill arising from the NGW transaction consists of expected synergies from combining operations of the Company and NGW, and intangible assets not qualifying for separate recognition such as formulations, proprietary technologies and acquired know-how.

The goodwill arising from the VidaCann transaction consists of expected synergies from combining operations of the Company and VidaCann, and intangible assets not qualifying for separate recognition such as formulations, proprietary technologies and acquired know-how.

None of the goodwill is deductible for tax purposes.

NGW’s state cannabis licenses and brands represented identifiable intangible assets acquired in the amounts of $ 11,840,000 and $ 1,340,000 , respectively.

The NGW cannabis licenses acquired have an indefinite life and as such will not be subject to amortization while the brands have a definite useful life of three years.

As of December 31, 2022, the Company evaluated whether intangible assets and goodwill showed any indicators of impairment, and it was determined that such indicators existed.

As a result of the Company’s analysis, it was determined that the brands and licenses were impaired, resulting in the Company recording an impairment charge of $ 6,947,778 .

VidaCann’s state cannabis license represented an identifiable intangible asset acquired in the amount of $ 9,000,000 .

The VidaCann cannabis license acquired has an indefinite life and as such will not be subject to amortization.

In connection with the VidaCann transaction, the Company expensed $ 1,020,563 of acquisition-related costs, which have been included in general and administrative expenses on the Company’s consolidated statement of operations and comprehensive loss for the year ended December 31, 2024, and $ 909,363 for the year ended December 31, 2023.

VidaCann contributed revenue, net of discounts, gross profit and net loss of $ 26,890,356 , $ 14,668,773 and ($ 1,878,533 ) included in the Company's Consolidated Comprehensive Net Income (loss) in the year ended December 31, 2024.

13 HOLDINGS INC.

1 unchanged sentence

(in United States Dollars)

In connection with the NGW transaction, the Company expensed $ 1,238,379 of acquisition-related costs, which have been included in general and administrative expenses on the Company’s consolidated statement of operations and comprehensive loss for the year ended December 31, 2022.

NGW’s post-acquisition revenues, gross profit and net income included in the Company’s results for the period since the closing of the transaction were $ 7,557,860 , $ 373,025 and ($ 37,555 ).

The following table reflects the revenue, gross profit and comprehensive loss that would have been reported if the acquisition had occurred at the beginning of the year ended December 31, 2023.

Year Ended December 31, 2022

For the Year Ended December 31, 2023

Revenue, net of discounts

1 unchanged sentence

44,823,144 12,574,426 57,397,570

Comprehensive income (loss) for the period

Comprehensive Income (loss) for the year

( 73,608,758 ) 1,502,402 ( 72,106,356 )

The carrying value of goodwill in each reporting unit is indicative of the expected growth and development of the business.

In the fourth quarter of fiscal 2022, the Company identified qualitative indicators of impairment as a result of a downturn in the wholesale pricing of cannabis.

The reduction in the price of wholesale cannabis resulted in a downward adjustment of the future financial forecasts for the Company’s NGW business, which indicated that impairment of the goodwill asset was a more-likely-than- not outcome.

A qualitative step zero impairment test was performed on the NGW business which indicated a potential impairment.

The Company conducted a quantitative impairment analysis of its NGW reporting unit using the income approach as at December 31, 2022.

The recoverable amount of the reporting unit to which goodwill is allocated and the asset group to which indefinite life intangibles are allocated were determined based on fair value using Level 3 inputs in a discounted cash flow analysis.

Management tested the NGW asset group for the definite lived assets impairment.

The result was impairment for the definite lived assets of the NGW asset group.

Where applicable, the Company uses its market capitalization and comparative market multiples to corroborate discounted cash flow results.

The significant assumptions applied in the determination of the recoverable amount are described below:

Estimated cash flows were projected based on actual operating results from internal sources as well as industry and market trends.

Estimated cash flows are primarily driven by sales volumes, selling prices and operating costs.

The forecasts are extended to a total of six years (and a terminal year thereafter);

Terminal value growth rate:

The terminal growth rate was based on historical and projected consumer price inflation, historical and projected economic indicators and projected industry growth;

Post-tax discount rate:

The post-tax discount rate is reflective of the reporting unit's Weighted Average Cost of Capital ("WACC").

The WACC was estimated based on the risk-free rate, equity risk premium, beta adjustment to the equity risk premium based on a direct comparison approach, an unsystematic risk premium, and after-tax cost of debt based on corporate bond yields;

The tax rates used in determining the future cash flows were those substantively enacted at the respective valuation date.

The following table outlines the key assumptions used in calculating the recoverable amount for each CGU and operating segment tested for impairment as at December 31, 2022:

Goodwill impairment testing

Significant estimates used by management

Years of cash flows before terminal value

Discount rate

Terminal value multiple

13 HOLDINGS INC.

1 unchanged sentence

(in United States Dollars)

Based on the results of the goodwill impairment test, the carrying value of the NGW reporting unit exceeded the fair value and the Company recognized a pre-tax impairment loss of $ 25,802,688 during the year ended December 31, 2022, relating to the NGW reporting unit.

Acquisition of 51% Interest in Planet 13 Illinois

On February 7, 2023, the Company purchased the remaining 51 % ownership interest in Planet 13 Illinois from a third party pursuant to an option purchase agreement that was entered into between such third party and the Company on August 4, 2022.

The aggregate purchase price for the interest was $ 1,812,656 and consisted of $ 866,250 in cash consideration and $ 946,406 in share consideration.

The share consideration was comprised of 1,063,377 common shares of the Company at a fair value of C$1.18 (USD $ 0.89 ) per common share, which were issued on February 7, 2023.

Florida License

On January 22, 2024, the Company entered into a definitive agreement to sell its Planet 13 Florida, Inc.

entity for $ 9,000,000 which, at the time of sale will hold no assets other than a Florida medical marijuana treatment center (“ MMTC ”) license.

entity for $ 9,000,000 which, at the time of sale held no assets other than a Florida medical marijuana treatment center (“MMTC”) license.

The value of the Florida license at December 31, 2023 was less than the carrying amount of the license.

2 unchanged sentences

Accordingly, the license held by the Company's Florida subsidiary was presented as an asset held for sale on the consolidated balance sheet as of December 31, 2023.

(“ Nursery ” and together with Dispensaries and Ray of Hope, the “ Sellers ”), the Company will acquire from the Sellers all of the membership interests in VidaCann (the “ Transaction ”).

Pursuant to the Purchase Agreement, the Company will acquire VidaCann from the Sellers for agreed consideration at closing of the Transaction (the “ Closing ”) equal to the sum of:

(i) 78,461,538 shares of common stock of the Company (the “ Base Share Consideration ”), of which 1,307,698 shares will be issued to VidaCann’s industry advisor (the “ VC Advisor ”);

(ii) a cash payment of US$4,000,000 (the “ Closing Cash Payment ”);

and (iii) promissory notes to be issued by the Company to the Sellers in the aggregate principal amount of US$5,000,000, with each of the above components subject to adjustments as set out in the Purchase Agreement.

The sale of Planet 13 Florida, Inc.

is contingent on the closing of the Transaction, both of which are subject to regulatory approval.

Illinois License

On February 7, 2023, the Company acquired the remaining 51 % stake in the Illinois adult use dispensary license for $ 1,812,656 .

Consideration included $ 866,250 in cash and 1,063,377 in Planet 13 common shares valued at $ 0.89 per share for a total of $ 946,406 in Planet 13 common shares.

The Illinois cannabis license acquired has as an indefinite life and as such will not be subject to amortization.

was completed on May 6, 2024.

Transaction costs incurred for the sale of the license equaled $ 762,091 .

The Company’s lease agreements are for cultivation, manufacturing, retail, and office premises and for vehicles.

9 unchanged sentences

$ 7,773,169 $ 5,004,484

Finance lease costs:

Amortization of lease assets

Interest on lease liabilities

Finance lease costs

Short term lease expense

8 unchanged sentences

Weighted average remaining lease term

- 14.56 - 14.43

The maturity of the contractual undiscounted lease liabilities as of December 31, 2024 and 2023 is:

16 unchanged sentences

$ 46,448,666 $ 25,271,706

Principally, all leases relate to real estate.

For the year ended December 31, 2023 the Company incurred $ 5,004,484 of operating lease costs ( 2022 - $ 4,584,550 ), of which $ 1,898,488 ( 2022 - $ 1,840,018 ) was allocated to cost of goods sold.

On December 22, 2022, the Company entered into a sale-leaseback transaction with an unrelated third -party related to certain real property acquired in connection with the NGW acquisition.

The Company received cash proceeds of $ 1,049,633 and recorded a gain on sale-leaseback of $ 509,392 .

The following are the key terms of the related lease agreement:

All leases relate to real estate.

For the year ended December 31, 2024 the Company incurred $ 7,773,169 of operating lease costs ( 2023 - $ 5,004,484 ), of which $ 3,275,515 ( 2023 - $ 1,898,488 ) was allocated to cost of goods sold and inventory.

During the year ended December 31, 2024 the Company recorded a full impairment charge of $ 3,214,740 associated with ROU assets related to its Orange County, California dispensary as the fair value of these assets based on management's expected future cash flows equal $ 0 .

During the year ended December 31, 2024 the Company recorded a full impairment charge of $ 24,796 associated with ROU assets related to its cultivation facility in Beatty Nevada.

Due the expected closure of this facility, management's expected future cash flows equal $ 0 .

See Note 16 for additional supplemental cash flow information related to leases.

13 HOLDINGS INC.

1 unchanged sentence

(in United States Dollars)

Initial term:

Renewal options:

3 additional terms of five years each

Monthly payment:

See Note 16 for additional supplemental cash flow information related to leases.

Notes payable

Non-related parties

Stated Interest

Interest Rate

Promissory note dated November 4, 2015, with semi-annual interest at 5.0%, secured by deed of trust, due December 1, 2019

884,000 884,000 5.0 % 5.0 % 12/1/2019

Promissory Note to Former VidaCann Shareholders, unsecured with interest accrued at 5.0%, maturity date April 1, 2025

4,869,695 - 5.0 % (1)

15.0 % 4/1/2025

Promissory Note to La Fayette State Bank, unsecured with interest paid monthly at 10%, maturity date February 20, 2025

2,927,989 - 10.0 % (2)

15.0 % 2/20/2025

Promissory Note to VidaCann former managers, unsecured with interest paid monthly at 7.5%, maturity date May 6, 2029

1,177,722 - 7.5 % (3)

15.0 % 5/6/2029

$ 9,859,406 $ 884,000

Less current portion

( 8,681,684 ) ( 884,000 )

Stated maturities of debt obligations are as follow:

Next 12 months Promissory Note

$ 1,177,722 $ -

Stated maturities of debt obligations are as follows:

$ - $ 884,000

$ 9,859,406 $ 884,000

( 1 ) The Promisory note to former VidaCann Shareholders has a face value of $ 5,000,000 .

The Company determined a fair value of $ 4,632,129 at the May 9, 2024 acquisition date using a 15 % estimated borrowing rate.

Total interest expense including accrued interest and amortization of the note discount for the year ended December 31, 2024 equaled $ 378,662 .

( 2 ) The Promisory note to Lafayette State Bank has a face value of $ 2,947,632 .

The Company determined a fair value of $ 2,862,159 at the May 9, 2024 acquisition date using a 15 % estimated borrowing rate.

Total interest expense including paid and accrued interest and amortization of the note discount for the year ended December 31, 2024 equaled $ 260,658 .

( 3 ) The Promisory note to VidaCann former managers has a face value of $ 1,500,000 .

The Company determined a fair value of $ 1,148,423 at the May 9, 2024 acquisition date using a 15 % estimated borrowing rate.

Total interest expense including paid interest and amortization of the note discount for the year ended December 31, 2024 equaled $ 98,339 .

Share capital

4 unchanged sentences

1,224,278 783,832

Shares issued on exercise of options

Shares issued on exercise of warrants

Shares issued on acquisition (Note 7)

Shares issued on exercise of purchase option (Note 7)

Shares issued on legal settlement

Shares issued on public offering

Shares issued on VidaCann acquisition

Finders shares issued on VidaCann acquisition

Total shares of common stock outstanding on December 31

1 unchanged sentence

Shares issued for Restricted Share Units

During the year ended December 31, 2023 , the Company issued 783,832 common shares on the settlement of RSUs that had vested during the year.

The Company did not receive any cash proceeds on the settlement.

During the year ended December 31, 2022 , the Company issued 81,084 common shares on the settlement of RSUs that had vested during the year.

During the year ended December 31, 2024 , 485,185 RSUs were awarded under the 2023 Equity incentive plan.

185,185 of these RSUs vested (of which 83,333 RSUs were surrendered in exchange for tax withholding payments), 1,224,278 of vested RSUs were settled and no RSUs were cancelled.

The Company did not receive any cash proceeds on the settlement of the RSUs.

During the year ended December 31, 2023 , the Company issued 783,832 common shares on the settlement of RSUs that had vested during the period.

The Company did not receive any cash proceeds on the settlement.

2 unchanged sentences

(in United States Dollars)

Shares issued for Stock Options

During the year ended December 31, 2023 , the Company issued nil common shares on the exercise of options.

During the year ended December 31, 2022 , the Company issued 97,325 common shares on the exercise of options that had a strike price of CAD$1.31 per common share resulting in cash proceeds of $ 97,980 ( CAD$127,496 ).

Shares issued on the exercise of Warrants

During the year ended December 31, 2023 , the Company issued nil common shares to warrant holders.

During the year ended December 31, 2022 , the Company issued 242,700 common shares to warrant holders who exercised 242,700 warrants resulting in cash proceeds of $ 1,044,258 ( CAD$1,407,660 ).

Shares issued in legal settlement

On November 14, 2024, pursuant to a settlement agreement, we issued 1,000,000 shares of common stock and paid $ 300,000 in consideration for settlement of claims advanced by the SDC parties against Next Green Wave Holdings, Inc.

Shares issued on exercise of purchase option

On February 7, 2023, the Company acquired the 51 % ownership interest in Planet 13 Illinois LLC pursuant to an option agreement in exchange for cash consideration and the issuance of 1,063,377 shares of common stock of the Company (See Note 7 ).

Shares issued on legal settlement

On November 14, 2023, pursuant to a settlement agreement, the Company issued 1,000,000 shares of common stock and paid $ 300,000 in consideration for settlement of claims advanced by the SDC parties against Next Green Wave Holdings, Inc.

As a result of our acquisition of Next Green Wave Holdings Inc.

on March 2, 2022, we assumed all the liabilities of Next Green Wave Holdings.

on March 2, 2022, the Company assumed all the liabilities of Next Green Wave Holdings.

The value of the shares at time of settlement were CAD$1.00 with an exchange rate of 0.7287 CAD to USD for a total value of $ 728,700 .

Shares issued on public offering

On March 7, 2024, the Company issued and sold 18,750,000 units of the Company (the “Units”) at a public offering price of $ 0.60 per unit (the "Offering").

Each Unit consisted of one share (each, a “Share”) of common stock, no par value, of the Company (“Common Stock”) and one warrant.

Each warrant (a “Warrant”) entitles the holder to purchase one share of Common Stock for a period of 5 years following the closing date of the Offering at an exercise price of US$0.77, subject to adjustments in certain events.

Total gross proceeds to the Company were approximately US$11.3 million.

Shares issued on VidaCann acquisition

On May 9, 2024, the Company issued 80,564,554 shares of common stock of Planet 13 (the “Share Consideration”);

see note 7 above for details of the transaction.

Finders shares issued on VidaCann acquisition

On May 9, 2024, the Company issued 1,307,698 shares of common stock of Planet 13 in finders shares related to the VidaCann acquisition;

see note 7 above for details of the transaction.

The following table summarizes the fair value of the warrant liability at December 31, 2024 and 2023 :

3 unchanged sentences

Change in fair value

( 18,127 ) ( 7,177,805 )

Closing balance as at December 31

3 unchanged sentences

December 31, 2024

Weighted Average Exercise Price - CAD

Weighted Average Exercise Price - USD

December 31, 2023

6 unchanged sentences

18,750,000 $ 0.77 - $ -

The Company complies with ASC 820, Fair Value Measurement, for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.

Financial instruments recorded at fair value in the consolidated balance sheet are classified using a fair value hierarchy that reflects the observability of significant inputs used in making the measurements.

On March 7, 2024, the Company issued and sold 18,750,000 units of the Company (the “Units”) at a public offering price of $ 0.60 per unit (the "Offering").

Each Unit consisted of one share (each, a “Share”) of common stock, no par value, of the Company (“Common Stock”) and one warrant.

The warrants expire on March 7, 2029.

13 HOLDINGS INC.

1 unchanged sentence

(in United States Dollars)

The following tables present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2023 and 2022 :

Quoted prices in active markets for identical asset (Level 1)

Significant unobservable inputs (Level 3)

December 31, 2023

Warrant liability

December 31, 2022

Warrant liability

$ ( 18,127 ) $ - $ ( 18,127 )

Share based compensation

7 unchanged sentences

As of September 15, 2023, 1,926,861 awards issued under the Prior Plans remained outstanding and, as of December 31, 2024, a maximum number of 19,587,954 shares of Common Stock are available for issuance under the 2023 Equity Plan, subject to adjustment pursuant to the terms of the 2023 Equity Plan.

Terms of the grants, including vesting terms are at the sole discretion of the Compensation Committee.

(a) Stock options

During the years ended December 31, 2024 and 2023

No incentive stock options were granted during the years ended December 31, 2023 and 2022 , and 1,106,925 replacement options were issued in connection with the NGW acquisition (see Note 7 ).

The replacement options were fully vested upon issuance.

No incentive stock options were granted during the years ended December 31, 2024 and 2023

The following table summarizes information about stock options outstanding at December 31, 2024 and 2023 :

5 unchanged sentences

CAD$ Outstanding

November 21, 2024

$ 1.31 185,203 185,203 185,203 185,203

February 27, 2025

4 unchanged sentences

$ 4.37 97,322 97,322 97,322 97,322

$ 1.31 - - 97,325 97,325

June 11, 2023

$ 0.80 - - 61,668 61,668

June 30, 2024

November 21, 2024

$ 1.31 - - 185,203 185,203

4 unchanged sentences

The following assumptions were used to arrive at the value ascribed to the options issued using a Black Scholes Option Pricing model:

Risk-free rate

Expected dividend yield

Expected volatility

Option life in years

Share-based compensation expense attributable to employee options was $nil for the year ended December 31, 2024 .

The fair value of the replacement options issued during 2022 of $ 1,239,818 was recognized as part of the consideration paid related to the business combination of NGW (Note 7 ).

The fair value of the replacement options issued during 2023 of $ 1,239,818 was recognized as part of the consideration paid related to the business combination of NGW.

The outstanding options have a weighted average CAD$ exercise price of:

8 unchanged sentences

( 185,203 ) 1.31 ( 189,393 ) 2.46

- - ( 97,325 ) 1.31

( 189,393 ) 2.46 ( 386,250 ) 3.11

Balance - end of year

8 unchanged sentences

485,185 ( 783,832 )

Surrendered for taxes

( 1,224,278 ) ( 477,506 )

Surrendered for taxes

( 83,333 ) ( 81,161 )

Rounding adjustment

Balance - end of year

5 unchanged sentences

During the year ended December 31, 2024

No RSUs were granted during the year ended December 31, 2023 .

The Company issued 783,832 common shares on the exercise of 783,832 RSUs during the year ended December 31, 2023 .

In conjunction with exercise of these shares during the year ended December 31, 2023, 477,506 RSU shares were surrendered to the Company at a value of $ 267,529 in exchange for the Company remitting all withholding taxes resulting from the RSU exercise.

During the year ended December 31, 2023 , 81,161 RSUs were forfeited.

485,185 RSU's were granted, and 185,185 RSUs vested and were exercised, of which 83,333 were surrendered in exchange for payment of tax withholdings.

The Company did not receive any cash proceeds from the settlement of the RSUs.

During the year ended December 31, 2024 , no RSUs were forfeited.

During the year ended December 31, 2023

1 unchanged sentence

The Company issued 783,832 common shares on the exercise of 783,832 RSUs during the year ended December 31, 2023.

During the year ended December 31, 2023, 81,161 RSUs were forfeited.

13 unchanged sentences

$ 13,195,875 $ 9,574,371

1,014,207 294,510

Current tax expense (benefit)

2 unchanged sentences

( 1,578,197 ) 211,127

( 441,642 ) 1,453,447

Deferred tax expense (benefit)

17 unchanged sentences

Change in fair value of warrant liability

( 3,807 ) ( 1,507,339 )

Expenses disallowed under IRC Section 280E

2 unchanged sentences

Nondeductible penalties

Other permanent differences

489,813 154,155

Other permanent differences

Book Impairment

Change in valuation allowance

847,315 16,675,011

Difference in tax rates

- ( 362,832 )

Change in state rate

1 unchanged sentence

200,817 ( 1,837,217 )

2023 UTP related to Holdco

UTP Penalties & Interests

Other adjustments

1 unchanged sentence

$ 12,190,243 $ 11,533,455

Section 280E of the Internal Revenue Code prohibits businesses engaged in the trafficking of Schedule I or Schedule II controlled substances from deducting normal business expenses, such as payroll and rent, from gross income (revenue less cost of goods sold).

Section 280E was originally intended to penalize criminal market operators, but because cannabis remains a Schedule I controlled substance for Federal purposes, the Internal Revenue Service (“IRS”) has subsequently applied Section 280E to state-legal cannabis businesses.

Cannabis businesses operating in states that align their tax codes with the IRC are also unable to deduct normal business expenses from taxable income subject to state taxes.

The non-taxable amounts shown in the effective rate reconciliation above include the impact of applying IRC Section 280E to the Company’s businesses that are involved in selling cannabis, along with other typical non-deductible expenses.

Therefore, the effective tax rate can be highly variable and may not necessarily correlate with pre-tax income or loss.

As the application and IRS interpretations on Section 280E continue to evolve, the impact of this cannot be reliably estimated.

Any changes to the application of Section 280E may have a material effect on the Company’s consolidated financial statements.

The IRS has taken the position that cannabis companies are subject to the limits of Section 280E of the Code for U.S.

federal income tax purpose, under which, they are only allowed to deduct expenses directly related to costs of goods sold.

The company has taken a position that its deduction of ordinary and necessary business expenses is not limited by Section 280E of the Code.

The position by the Company does not achieve a more likely than not tax position, therefore the financial statements are presented on the basis that 280E does apply.

Deferred taxes are provided using as asset and liability method whereby deferred tax assets are recognized based on the rates at which they are expected to reserve in the future.

Temporary differences are the differences between the reported amount of assets and liabilities and their tax basis.

The effect on deferred tax assets and liabilities of a change in tax law or tax rates is recognized in income in the period that enactment occurs.

13 HOLDINGS INC.

7 unchanged sentences

$ 15,885,208 $ 18,302,796

Share issue costs

Share based compensation

1,611,565 1,562,759

Exchange rate difference on monetary assets

Accrued expenses

Charitable Contribution

Loyalty points

513,959 280,182

Capital loss carry forward

Lease liabilities

4,913,815 2,305,188

Inventory Reserve

49,463 28,705

Lease liabilities

COGS related Impairment

Florida License

6 unchanged sentences

Deferred Tax Liabilities:

Property and equipment

94,959 1,842,051

Other Licenses

1 unchanged sentence

Right-of-use assets

4,452,567 1,675,133

Property and equipment

71,220 94,959

Net deferred tax liabilities

11 unchanged sentences

As a result, the Company filed final Canadian income tax returns for the 2023 tax year and no longer has any Canadian income tax attributes as of December 31, 2024 .

As of December 31, 2024, the company recorded an uncertain tax liability on the consolidated balance sheet for tax position taken that it does not owe taxes attributable to the application of Section 280E of the Internal Revenue Code.

Based on the information currently available, we do not anticipate a significant increase or decrease to our income tax contingencies for these issues within the next 12 months.

A reconciliation of the beginning and ending amount of uncertain tax liabilities is as follow:

Balance at Beginning of Year

Additions based on tax position related to the current year 280E position

Additions based on tax position related to the prior year

Reduction based on lapse of statute of limitations

Balance at End of Year

A reconciliation of the beginning and ending amount of uncertain tax benefits is as follow:

Balance at Beginning of Year

Increase related to tax position in a prior period

Decrease related to tax position in a prior period

Increase relted to tax positions in the current period

Interest and penalties in income tax expense

Decrease related to tax position in the current period

Balance at End of Year

Deferred taxes arise from temporary differences in the recognition of certain expenses for tax and financial reporting purposes.

8 unchanged sentences

state jurisdictions.

With the exception of net operating losses created in prior years that may potentially be adjusted, the federal statute of limitations remains open for the 2020 tax year to present, and the state statutes of limitations remain open for the 2019 tax year to present.

The Company filed a final Canadian income tax return for the 2023 tax year, but the Canadian statute of limitations remains open for the 2018 tax year to the 2023 tax year.

The federal statute of limitations remains open for the 2021 tax year to present and the state statutes of limitations remain open for the 2020 tax year to present.

13 HOLDINGS INC.

23 unchanged sentences

Change in Working Capital

HST Receivable

$ - $ ( 79,012 )

Accounts Receivable

12 unchanged sentences

Other Liabilities

1,187,722 5,000

Notes Payable

( 845,026 ) -

Uncertain Tax Positions

Income Taxes Payable

9 unchanged sentences

$ 42,123,314 $ -

Shares Issued on Exercise of Purchase Option

Finders shares issued in business combination

$ 750,000 $ -

Issuance of NGW replacement options on acquisition

Shares Issued on Exercise of Purchase Option

$ - $ 946,406

4 unchanged sentences

Fixed Asset Amounts in Accounts Payable

$ 318,717 $ 84,160

Reclassification of long term lease liabilities to current

3 unchanged sentences

(in United States Dollars)

PLANET 13 HOLDINGS INC.

Notes to the Consolidated Financial Statements

(in United States Dollars)

Related Party Transactions and Balances

1 unchanged sentence

(a) Building Lease

Prior to March 15, 2022 , the Company was the sub-lessee of approximately 2,000 square feet of office space and purchased certain printed marketing collateral and stationery items from a company owned by one of the Company’s Co-CEOs.

This entity was sold to an unrelated third -party on March 15, 2022 .

Amounts paid for rent for the years ended December 31 , 2023 and 2022 to the related party equaled $nil and $ 6,010 , respectively.

Amounts paid for printed marketing collateral and stationery items to the related party were $nil and $ 183,914 for the years ended December 31 , 2023 and 2022, respectively.

A company previously owned by one of the Company’s Co-CEOs until March 15, 2022 paid the Company for storage space.

Amounts paid to the Company from the related party for storage space were $nil and $ 5,968 for the years ended December 31 , 2023 and 2022, respectively, and is recorded in Other Income for such period.

As part of the VidaCann acquisition on May 9, 2024, the Company entered into a long-term lease agreement with Loop's Nursery for a property in St John's Florida that is used as the Company's primary cultivation facility in Florida.

Loop's Nursery is primarily owned by David Loop, one of the Company's board members.

Payments for rent and associated costs related to the use of this property for the year ended December 31, 2024 equaled $ 1,208,531 .

As part of the VidaCann acquisition on May 9, 2024, the Company acquired related party notes payable due to David Loop, one of the Company's board members and Mark Ascik, Co-President Florida Operations in the amounts of $ 750,000 each (see Note 9 ).

Payments for interest on the related party notes for the year ended December 31, 2024 totaled $ 75,206 combined.

For the years ended December 31, 2024 and 2023 , no amounts were due to related parties.

1 unchanged sentence

(a) Construction Commitments

The Company had $ 3,140,447 of outstanding construction commitments as of December 31, 2023 payable as construction is completed over an estimated six month period.

The Company had $ 786,490 of outstanding construction commitments as of December 31, 2024 ($ 3,140,447 - December 31, 2023) payable as construction is completed over an estimated six month period.

(b) Contingencies

19 unchanged sentences

The Company further limits credit risk to a maximum of $ 250,000 to any individual counterparty at a given time.

Total maximum credit risk for all counterparties combined is estimated at $ 1,200,000 .

The Company evaluates the collectability of its accounts receivable and maintains an allowance for credit losses at an amount sufficient to absorb losses inherent in the existing accounts receivable portfolio as of the reporting dates based on the estimate of expected net credit losses.

26 unchanged sentences

Currency rate risk

As at December 31, 2023 , a portion of the Company’s financial assets and liabilities held in Canadian dollars consist of cash of $ 65,202 ( 2022 - $ 1,172,859 ).

As at December 31, 2024 , none of the Company’s financial assets and liabilities were held in Canadian dollars ( 2023 - $ 65,202 ).

The Company’s objective in managing its foreign currency risk is to minimize its net exposure to foreign currency cash flows by transacting, to the greatest extent possible, with third parties in the functional currency.

The Company does not currently use foreign exchange contracts to hedge its exposure of its foreign currency cash flows as management has determined that this risk is not significant at this point in time.

The Company’s exposure to a 10% change in the foreign exchange conversion rate at December 31, 2023 equals $ 6,520 .

The Company’s exposure to a 10% change in the foreign exchange conversion rate at December 31, 2024 equals $nil.

Government Assistance Program

8 unchanged sentences

The Company qualifies for the ERC credit under the CARES Act, as modified.

On June 15, 2023, the Company’s wholly-owned subsidiary, MM Development Company, Inc., received and recorded payment from the Internal Revenue Service in the amount of $ 1,955,711 ( 2022 - $nil ) related to the ERC credit for the first quarter of 2021.

On June 15, 2023, the Company’s wholly-owned subsidiary, MM Development Company, Inc., received and recorded payment from the Internal Revenue Service in the amount of $ 1,955,711 related to the ERC credit for the first quarter of 2021.

This amount is included in Other Income, Net on the Company’s Consolidated Statements of Operations and Comprehensive Loss for the year ended December 31, 2023.

11 unchanged sentences

The Company has secured a partial settlement with Casa Verde for the release of $ 3.4 million of the WAB Funds, which the Company received on January 31, 2024.

The remaining approximately $ 2 million of the WAB Funds (the “ Remaining Levied Funds ”) is still in the possession of the Sheriff’s Office while litigation is ongoing.

The Company has not relinquished any right to the Remaining Levied Funds and continues to pursue their return.

A hearing on the ultimate disposition of the Remaining Levied Funds is scheduled for April 29, 2024.

The remaining approximately $ 2 million of the WAB Funds (the “ Remaining Levied Funds ”) is still in the possession of the Sheriff’s Office pending release to the Company, expected in late March 2025 ( see Note 22.

Subsequent events, below)

After filing the WAB Claim in November 2023, the Company also took immediate action to withdraw the remaining approximately $ 16.5 million that the Company held in two additional Company accounts managed by El Capitan (the “ Additional Funds ”).

6 unchanged sentences

The Company alleges that each Defendant is liable for their involvement in a scheme to defraud the Company of funds managed by El Capitan in its capacity as the Company’s fiduciary.

The loss provision for the year ended December 31, 2023 was $ 2,000,000 ( 2022 - $ 10,300,000 ).

The loss provision for the year ended December 31, 2024 was $nil ( 2023 - $ 2,000,000 ).

Subsequent events

On March 6, 2024, the Company issued 166,952 shares of Common Stock on the vesting of RSU's to former employees.

The Company did not receive any cash proceeds from the issuance.

On March 7, 2024, the Company issued and sold 18,750,000 units of the Company (the “ Units ”) at a public offering price of $ 0.60 per Unit.

Each Unit consisted of one share (each, a “ Share ”) of common stock, no par value, of the Company (“ Common Stock ”) and one warrant.

Each warrant (a “ Warrant ”) entitles the holder to purchase one share of Common Stock for a period of 5 years following the closing date of the Offering at an exercise price of US$0.77, subject to adjustments in certain events.

Total gross proceeds to the Company were approximately US$11.3 million.

On February 27, 2025, 51,525 stock options with an exercise price of $ 1.31 CAD per share expired unexercised.

On March 3, 2025, the Company announced significant recovery of funds related to the El Capitan matter.

This includes a settlement and recovery of US$2.1 million of funds which were held at BridgeBank, a division of Western Alliance Bank (collectively "WAB"), bringing the total recovery of funds held at WAB to US$5.5 million.

Additionally, the Company, through a wholly-owned subsidiary, will also obtain real estate (the "Real Property") valued at approximately US$5.0 million based on recent comparable sales, which it intends to sell.

In total the Company has recovered approximately $ 10.5 million, including the expected value from the sale of the Real Property.

This settlement does not conclude the Company’s lawsuit against El Capitan Advisors, Inc.

("El Capitan") and its founder and Chief Executive Officer, Andrew Nash, in which it is seeking approximately US$10.3 million, which is based on $ 15.3 million less the expected net proceeds Planet 13 receives from the sale of the Real Property, in additional compensatory damages and other relief.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures