Business Description

2. BASIS OF PRESENTATION These consolidated financial statements for the years ended December 31, 2025 and 2024 have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). These consolidated financial statements have been prepared on an accrual basis and are based on historical costs, except for certain financial instruments measured at fair value. The Company determined that more than 50% of its common shares are held by U.S. stockholders, and accordingly no longer meets the definition of a foreign private issuer under the United States securities laws. As a result, commencing with the year ended December 31, 2025, the Company is required to use forms and rules prescribed for U.S. domestic companies, including the requirement that financial statements be presented in accordance with U.S. GAAP instead of IFRS ® Accounting Standards as issued by the International Accounting Standards Board (“IFRS”). These consolidated financial statements have been prepared in accordance with U.S. GAAP effective for the financial year ended December 31, 2025 and 2024. The 2024 comparative figures, which were previously presented in accordance with IFRS, have been adjusted as necessary to be compliant with the Company’s policies under U.S. GAAP. The transition to U.S. GAAP has been applied retrospectively to all periods presented, including comparative information for the year ended December 31, 2024, and the consolidated balance sheet as of December 31, 2024 and January 1, 2024. A summary of the impacts of the transition are described below. Reconciliation of consolidated balance sheets as at January 1, 2024 Schedule of reconciliation of consolidated balance sheets Note IFRS Effect of transition to U.S. GAAP U.S. GAAP $ $ $ ASSETS Current assets Cash and cash equivalents 6,804,579 - 6,804,579 Accounts receivable, net 1,642,990 - 1,642,990 Biological assets (B) 1,723,342 (1,723,342 ) - Inventory (B) 5,021,290 (444,799 ) 4,576,491 Prepaid expenses 420,336 - 420,336 Total current assets 15,612,537 (2,168,141 ) 13,444,396 Warrant asset 8,820,897 - 8,820,897 Notes receivable (A) 2,449,122 (2,192,372 ) 256,750 Property and equipment, net (A)(C) 1,761,382 (669,459 ) 1,091,923 Right of use assets (A) (C) - 2,976,405 2,976,405 Intangible assets 725,668 - 725,668 Deferred tax asset 246,294 - 246,294 TOTAL ASSETS 29,615,900 (2,053,567 ) 27,562,333 LIABILITIES Current liabilities Accounts payable and accrued liabilities 1,358,962 - 1,358,962 Current portion of lease liabilities (C) 925,976 (925,976 ) - Current portion of operating lease liabilities (A)(C) - 925,976 925,976 Current portion of long-term debt 780,358 - 780,358 Current portion of consideration payable on business acquisitions 360,000 - 360,000 Derivative liability (D) 7,471,519 10,863 7,482,382 Warrant liability (D) - 4,270,342 4,270,342 Income tax payable 873,388 - 873,388 Total current liabilities 11,770,203 4,281,205 16,051,408 Lease liabilities, net of current portion (C) 1,972,082 (1,972,082 ) - Operating lease liabilities, net of current portion (A)(C) - 1,901,645 1,901,645 Long-term debt, net of discounts and current portion 82,346 - 82,346 Convertible debentures (D) 2,459,924 (1,876,795 ) 583,129 Other non-current liabilities (F) - 2,128,057 2,128,057 TOTAL LIABILITIES 16,284,555 4,462,030 20,746,585 SHAREHOLDERS’ EQUITY Subordinate voting common shares, convertible into multiple voting common shares, no par value; unlimited shares authorized; 249,738,980 and 222,446,113 shares issued and outstanding as at December 31, 2025 and 2024, respectively (D)(E) 24,593,422 7,205,942 31,799,364 Multiple voting common shares, no par value; unlimited shares authorized; nil and nil shares issued and outstanding as at December 31, 2025 and 2024, respectively - - - Contributed surplus (E) 8,186,297 (8,186,297 ) - Accumulated other comprehensive loss (108,069 ) - (108,069 ) Accumulated deficit (A)(B)(C)(D)(F) (20,353,629 ) (5,535,242 ) (25,888,871 ) Equity attributable to Grown Rogue International, Inc. shareholders 12,318,021 (6,515,597 ) 5,802,424 Non-controlling interests 1,013,324 - 1,013,324 TOTAL SHAREHOLDERS’ EQUITY 13,331,345 (6,515,597 ) 6,815,748 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 29,615,900 (2,053,567 ) 27,562,333 Reconciliation of consolidated balance sheets as at December 31, 2024 Note IFRS Effect of transition to U.S. GAAP U.S.…