NOTE 10 – BUSINESS COMBINATIONS

Safe Accessible Solutions, Inc.

On May 1, 2024, the Company executed an amended and restated binding letter of intent (the “Amended LOI”) with Safe Accessible Solutions, Inc. ("SAS") wherein the Company and the stockholders of SAS shall enter into a Stock Sale and Purchase Agreement in which the Company will acquire 100% of the common stock of SAS. The Company paid an aggregate consideration of $1,671,451 as follows: (i) a secured promissory note in the aggregate principal amount of $1,000,071 to be paid in monthly installments of approximately $23,811 per month over 42 months; and (ii) the issuance of 945,605 shares of Common Stock of the Company valued at $671,380 based on the closing share price, of which 196,507 shares of the Company's Common Stock shall be issued and transferred no later than 12 months from closing date. The Company issued and transferred 749,097 shares of Common Stock on May 1, 2024. On the date which is 24 months subsequent to the closing date, the previous stockholders of SAS shall have the option, but not the obligation, to exchange shares of the Company's Common Stock received as part of the purchase price for a promissory note (the "Put Option"). The Put Option is exercisable for a period of 90 days thereafter. Refer to "Note 14 - Derivative Liabilities" for the Put Option. The Note may be converted into Common Stock of the Company at the transaction valuation, on terms to be agreed upon. The Stock Sale and Purchase Agreement is subject to close upon regulatory approval.
 
On May 1, 2024, the Company, through its wholly-owned subsidiary Blum Management, executed a management services agreement with SAS pursuant to which the Company shall manage the operations of SAS. SAS operates Cookies Sacramento, a retail dispensary located in Sacramento, California. As consideration for such services, the Company shall receive a management fee of 100% of the economic benefit of SAS. The Company shall pay all expenses and liabilities incurred to operate SAS. The term of the management services agreement is indefinite and may only be terminated by the Company or upon the closing of the Stock Sale and Purchase Agreement. The fair value of non-controlling interest related to SAS was nil as of May 1, 2024 as a result of the management fee.

Coastal Pine Holdings, Inc.

On May 1, 2024, the Company, through its wholly-owned subsidiary Blum Management, executed an advisory and consulting engagement letter (the "Agreement") with Coastal Pine Holdings, Inc. ("Coastal") pursuant to which Blum Management shall provide advisory and consulting services and related business support to Coastal. Coastal is a holding company involved in the management of retail dispensaries throughout Northern California. As compensation for such services, the Company shall receive a monthly fee of $75,000. The term of the Agreement is indefinite and may only be terminated by the Company. The Agreement includes an option by Blum Management to purchase all of the outstanding equity of Coastal in exchange for (i) a promissory note in the amount of $940,974 payable to the shareholders of Coastal and (ii) the issuance of 889,725 shares of the Company's Common Stock, of which 496,712 shares of the Company’s Common Stock were issued and transferred on May 1, 2024 and 393,013 shares of the Company’s Common Stock shall be issued and transferred on the 12-month anniversary of the date of the Agreement. On the date which is 24 months subsequent to the closing date, the previous stockholders of Coastal shall have the option, but not the obligation, to exchange shares of the Company's Common Stock received as part of the purchase price for a promissory note, which is exercisable for a period of 90 days thereafter. Refer to "Note 14 - Derivative Liabilities" for the Put Option. The sale of the equity of Coastal is subject to close upon regulatory approval.
 
The transactions are intended to expand the Company's retail footprint in Northern California and to achieve synergies with the Company's existing retail operations in Northern California. Transaction-related costs and issuance costs related to the business combination were nil. As a result of the agreements entered into on May 1, 2024, the Company determined these entities are variable interest entities under ASC 810, “Consolidation” (“ASC 810”) of which the Company is a primary beneficiary. The entities are under common control and accounted for as a single transaction under Coastal Pines Group (“CPG”) for presentation purposes. Refer to "Note 15 – Stockholders' Deficit" for variable interest entities.

EWCR

On May 13, 2025, the Company executed an Amended and Restated Binding Letter of Intent ("A&R LOI") with EWC Resources Inc. ("EWCR") wherein the Company and the sellers of EWCR shall enter into a Stock Sale and Purchase Agreement in which the Company will acquire 100% of the common stock of EWCR. The total consideration paid shall consist of: (i) $800,000 in cash upon execution of the MSA dated May 15, 2025, (ii) assignment of a senior secured convertible promissory note in the amount of $500,000, (iii) the issuance of 434,783 shares of Common Stock of the Company valued at $500,000 based on a per share price of $1.15, which shall be issued at closing and subject to a 12-month holdback, and (iv) an earn-out provision in the amount of $200,000 payable in cash or Common Stock at the seller’s election. Refer to "Note 14 - Derivative Liabilities" for the earn-out provision. The proposed transaction is subject to definitive documentation upon regulatory approval.

On May 15, 2025, the Company, through its wholly-owned subsidiary Blum Management, executed a management services agreement with EWCR (the "MSA") pursuant to which the Company shall have immediate operational and economic control of EWCR. EWCR operates a retail dispensary located in Santa Clara County. As consideration for such services, the Company shall receive a management fee of 100% of the economic benefit of EWCR. The Company shall pay all expenses and liabilities incurred to operate EWCR. The term of the MSA is indefinite and may only be terminated by the Company or upon the closing of the proposed transaction. As a result of the MSA effective on May 15, 2025, the Company determined EWCR to be a variable interest entity under ASC 810 of which the Company is a primary beneficiary. Refer to "Note 15 – Stockholders' Deficit" for variable interest entities.

Green Door Redding, LLC

On July 1, 2025, the Company entered into a binding term sheet with Green Door Redding, LLC ("GDR") pursuant to which the Company intends to acquire 80% of the membership interests in GDR (the "Transaction") in exchange for 3,633,540 shares of the Company's Common Stock, which shall be heldback in escrow until closing of the transaction and subject to consideration adjustments. The total purchase consideration will be determined based on the greater of: (i) GDR’s trailing twelve months revenue or (ii) the best consecutive six-month revenue period during the 12-month period following closing multiplied by 2.0x, and reduced by verified and unrecorded liabilities as of the closing date. The exchange valuation may be further increased by 125% of any available cash at closing that is contributed to or invested directly into the Company. In addition, up to $750,000 of contingent consideration, payable in shares of the Company’s Common Stock, is contingent upon GDR’s achievement of specified revenue and EBITDA margin thresholds during the 12-month period following closing (the "Earnout Provision"). The equity consideration includes a redemption right permitting the seller, if the average closing price of the Company’s Common Stock over any 15 consecutive trading-day period between 24 and 26 months after closing is below $1.15 per share, to redeem all of the Common Stock received in exchange for the return of their original equity interests in GDR (the "Put Option"). The final purchase price will be determined 12 months after the closing date and payable in shares of Common Stock. The preliminary exchange valuation was determined using a Monte Carlo simulation model and consists of 1,428,696 shares of Common Stock with an aggregate value of $1,643,000 based on a per share price of $1.15. The fair value of the equity consideration was measured at $914,000 based on the Company's closing stock price on July 1, 2025. Refer to "Note 15 – Stockholders' Deficit" for further information. The fair value of the Earnout Provision was determined to be nil based on a Monte Carlo simulation model reflecting the probability-weighted outcomes of the specified revenue and EBITDA performance thresholds. The fair value of the Put Option was estimated to be $327,000 based on a Monte Carlo simulation model incorporating the expected volatility of the Company’s stock price, the option exercise window, and risk-free interest rates as of the valuation date. The closing of the Transaction is subject to customary regulatory approvals at the state and municipal levels. 

On July 1, 2025, the Company, through its wholly-owned subsidiary Blum Management, entered into a management services agreement with GDR pursuant to which the Company has been granted exclusive operational and economic control of GDR. GDR operates Cookies Redding, a retail dispensary located in Redding, California. As consideration for such management services, the Company shall receive 100% of the economic benefit of GDR. The Company shall pay all expenses and liabilities incurred to operate GDR. The term of the MSA is indefinite and may only be terminated by the Company or upon the closing of the proposed transaction. As a result of the MSA effective on July 1, 2025, the Company determined GDR to be a variable interest entity under ASC 810 of which the Company is a primary beneficiary. Refer to "Note 15 – Stockholders' Deficit" for variable interest entities.

The preliminary allocation was based upon the Company’s estimates and assumptions of the assets and liabilities of EWCR and GDR and are subject to change within the measurement period, which is not to exceed one year from the acquisition date. The Company is in the process of obtaining additional information necessary to finalize the valuation of the assets acquired and liabilities assumed, including intangible assets and income tax related amounts. Therefore, the preliminary fair values set forth below are subject to adjustment as additional information is obtained and the valuations are completed.

The table below summarizes the allocation of the purchase price based on fair value of net assets acquired, which is a preliminary estimate as it relates to EWCR and GDR:

CPG contributed revenue of $0.91 million and $4.8 million for the three and nine months ended September 30, 2025, respectively, and net loss of $0.98 million and $2.48 million for the three and nine months ended September 30, 2025, respectively. CPG contributed revenue of $2.93 million and $5.06 million for the three and nine months ended September 30, 2024, respectively, and net loss of $0.52 million and $1.1 million for the three and nine months ended September 30, 2024, respectively.

EWCR contributed revenue of $2.89 million and $4.53 million for the three and nine months ended September 30, 2025, respectively, and net loss of $0.81 million and $1.03 million for the three and nine months ended September 30, 2025, respectively.

GDR contributed revenue of $0.98 million and net income of $0.18 million for the three and nine months ended September 30, 2025.

Supplemental information on an unaudited pro forma basis is reflected as if the transactions described above had occurred on  January 1, 2024. The supplemental unaudited pro forma financial information is presented for comparative purposes only and is not necessarily indicative of what the Company’s financial position or results of operations would have been had the Company completed the transaction at the dates indicated, nor is it intended to project the future financial position or operating results of the Company as a result of the transactions described above.