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TLLTF • CIK 0001761510
1. Nature of Operations TILT Holdings Inc. (“TILT” or the “Company”) is a business solutions provider to the global cannabis industry offering a diverse range of value-added products and services to industry participants. Through a portfolio of companies providing technology, hardware, cultivation and production, TILT services brands and cannabis retailers in regulated markets across 40 states in the United States (“U.S.”), as well as Canada, South America, and the European Union. TILT was incorporated under the laws of Nevada pursuant to NRS Chapter 78 on June 22, 2018. The Company was continued under the Business Corporations Act (British Columbia) pursuant to a Certificate of Continuance dated November 14, 2018. The Company is a reporting issuer in Canada in the Provinces of British Columbia, Alberta, and Ontario and its common shares are listed for trading on the Cboe Canada (formerly known as the NEO Exchange) under the symbol “TILT.” In addition, the common shares are quoted on the OTCQB in the U.S. under the symbol “TLLTF.” The Company’s head office is in Phoenix, Arizona and its registered office is located at Suite 2400, 745 Thurlow Street, Vancouver, BC V6C 0C5 Canada. The following are the Company’s major consolidated entities and the ownership interest in each that are included in these consolidated financial statements for the years ended December 31, 2024 and 2023: Ownership Percentage Major Subsidiaries Place of Incorporation 2024 2023 Jimmy Jang Holdings, Inc. British Columbia 100% 100% Jimmy Jang, L.P. Delaware 100% 100% Jupiter Research, LLC Arizona 100% 100% Baker Technologies, Inc. Delaware 100% 100% Standard Farms LLC Pennsylvania 100% 100% Standard Farms Ohio, LLC Ohio 100% 100% Sea Hunter Therapeutics, LLC Delaware 100% 100% Commonwealth Alternative Care, Inc. Massachusetts 100% 100% SFNY Holdings, Inc. Delaware 100% 100% CGSF Group, LLC Delaware 0% 0% On September 1, 2023, due to a strategic shift to focus on the Company’s core business, the Company divested its investment interests in its joint venture in Standard Farms New York LLC (“SFNY”) pursuant to a membership interest purchase agreement (“MIPA”) by and among SFNY Holdings Inc. (“SFNY Holdings”), SFNY, each wholly owned subsidiaries of the Company, and CGSF Investments, LLC (“CGSF”), a wholly owned subsidiary of PowerFund Holdings II LLC (the “CGSF/SFNY Divestiture”). See Note 11 — Notes Payable for additional information. Liquidity and Going Concern The Company has experienced operating losses since its inception and may continue to incur losses in the development of its business. The Company incurred a comprehensive loss of $99,679 during the year ended December 31, 2024 and has an accumulated deficit of $1,125,757 as of December 31, 2024. Additionally, as of December 31, 2024, the Company had negative working capital of $46,608 compared to negative working capital of $19,798 as of December 31, 2023. The decrease in working capital year-over-year was primarily driven by higher interest, a decrease in inventories driven by the Company’s shift to an asset-light model with a focus on just-in-time production and shipping, and decreased trade receivables driven mainly by lower revenue. The following events had a significant impact on liquidity during the years ended December 31, 2024 and 2023: On May 2, 2024, Standard Farms, LLC (“Standard Farms PA”) entered into a Secured Promissory Note with a third-party experienced retailer and operator (the “Lender”) for borrowings up to $ 10,500 (the “2024 Standard Farms Loan”). Proceeds from the 2024 Standard Farms Loan will be used to construct dispensaries obtained via a permit issued from the Department of Health, Bureau of Medical Marijuana, of the Commonwealth of Pennsylvania (the “Commonwealth”). The Standard Farms PA permit will allow the construction and operation of up to three medical marijuana dispensaries in the Commonwealth (collectively, the “Retail Locations”). Proceeds from the 2024 Standard Farms Loan will also be utilized for the initial setup and operation of the Retail Locations. The 2024 Standard Farms Loan will mature on December 31, 2027, and will initially bear interest at 20% . The interest rate will automatically increase to 30% upon Standard Farm PA’s opening a Retail Location and completing a first commercial sale in the Commonwealth (“Location Opening Date”).…