AI assistant
Herbal Dispatch Inc. Management Reports 2026
47656_rns_2026-04-24_daefc362-cbb2-4747-b934-4cc2189f99ef.pdf
Management Reports
Open in viewerOpens in your device viewer
HERBAL DISPATCH INC.
Management’s Discussion and Analysis
For the Year Ended December 31, 2025
(Stated in Canadian Dollars)
Dated April 23, 2026
Herbal Dispatch Inc.
Management's Discussion and Analysis
For the Year Ended December 31, 2025
This Management's Discussion and Analysis (MD&A) for Herbal Dispatch Inc. ("Herbal Dispatch", the "Company", the "Corporation", "we", "us" or "our") was prepared as of April 23, 2026 to assist readers in understanding our financial performance for the year ended December 31, 2025. This MD&A should be read in conjunction with the accompanying audited consolidated financial statements for the year ended December 31, 2025, which were prepared in accordance with International Financial Reporting Standards (IFRS) and presented in Canadian dollars, our functional currency.
This MD&A contains forward-looking statements. Please see "Note Regarding Forward-Looking Statements" for a discussion of the risks, uncertainties and assumptions used to develop our forward-looking statements. Accounting principles applied under IFRS require us to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosures. We believe our estimates and assumptions are reasonable based on the information available at the time that these estimates and assumptions are made. Actual results may differ from these estimates.
This MD&A also refers to a non-IFRS financial measure "Adjusted EBITDA" that we present to assist users in assessing our performance. Adjusted EBITDA does not have any standard meaning under IFRS and may not be comparable to similar measures presented by other issuers. This measure is further described under "Non-IFRS Financial Measures".
Our registered office is located at Suite 1801 – 808 Nelson Street, Vancouver, British Columbia V6Z 2H2. The Board of Directors approved the content of this MD&A on April 23, 2026.
Additional information on Herbal Dispatch, including our most recently filed audited consolidated financial statements, is available on the System for Electronic Document Analysis and Retrieval (SEDAR+) website at www.sedarplus.ca.
Corporate Highlights
- Gross sales reached $6.2 million in Q4 2025, up 115% from sales of $2.9 million in Q4 2024. For the full year, gross sales rose 37% to $16.5 million from $12.1 million in 2024.
- Adjusted EBITDA improved to positive $0.1 million in Q4 2025, compared to negative $0.6 million in Q4 2024. For the fiscal year ended December 31, 2025, adjusted EBITDA improved by 30% to negative $0.7 million from negative $1.0 million last year.
- In October 2025, we closed our oversubscribed non-brokered equity private placement (the "Private Placement"), with the sale of 41,564,220 units (each a "Unit") at a price of CAD$0.05 per Unit, for aggregate subscription proceeds of $2.1 million.
- Subsequent to year end, the Company's common shares commenced trading on the OTCQB® Venture Market ("OTCQB") under the ticker symbol "LUFFF".
2 | Page
Herbal Dispatch Inc.
Management's Discussion and Analysis
For the Year Ended December 31, 2025
Business Overview
We are a leading operator of cannabis e-commerce platforms in Canada, delivering quality medical and recreational products to discerning consumers at competitive prices. Our flagship marketplace has earned trust as a premier destination for exclusive access to small-batch craft cannabis and a wide selection of curated cannabis products. We are also actively expanding through exports to international markets, positioning ourselves for sustained growth and new revenue opportunities.
We generate revenue from four sales channels: (i) medical sales – direct to consumer; (ii) recreational sales – wholesale and direct to retailer; (iii) export sales; and (iv) packaging and processing services.
Our common shares trade on the Canadian Securities Exchange ("CSE") under the symbol "HERB" and on the OTCQB® Venture Market ("OTCQB") under the ticker symbol "LUFFF"
We were originally incorporated with the name Ascent Industries Corp. under the Business Corporations Act (British Columbia) on May 30, 2013. We completed an amalgamation with Paget Minerals Corp. on August 9, 2018 and subsequently listed our common shares for trading on the CSE. Effective May 15, 2020, we changed our name to Luff Enterprises Ltd. and on January 20, 2023, we changed our name to Herbal Dispatch Inc.
Overall Performance
For the three months ended December 31, 2025, gross sales increased by 115% to $6.2 million, from sales of $2.9 million in Q4 2024. Net revenue, excluding excise taxes, also increased to $4.1 million from $2.3 million in Q4 last year. On a full fiscal year basis, gross sales increased by 37%, reaching $16.5 million compared to $12.1 million in 2024. Net revenue, excluding excise taxes, rose to $12.1 million from $9.9 million last year.
The year 2025 represented a significant milestone for Herbal Dispatch as we advanced our growth trajectory and reinforced our position in both Canadian and international markets. We achieved double-digit growth for the third consecutive year, broadened our product portfolio, and secured strategic investments to support ongoing innovation. We have established a reputable brand focused on quality, convenience, and customer satisfaction.
Consequently, adjusted EBITDA also improved significantly in Q4 2024, rising to positive $0.1 million, from negative $0.6 million in Q4 2024, driven by the higher sales and gross profit. If specific non-recurring investor relations costs and professional fees incurred related to the October 2025 Private Placement are excluded, our adjusted EBITDA for Q4 2025 would have been positive $0.2 million. For the full fiscal year ended December 31, 2025, adjusted EBITDA improved by 30% to negative $0.7 million from negative $1.0 million last year.
3 | Page
Herbal Dispatch Inc.
Management's Discussion and Analysis
For the Year Ended December 31, 2025
Outlook and Strategy for 2026:
Our strategic plan for 2026 consists of key priorities designed to expand market share, foster innovation, and deliver long-term value to stakeholders.
1) Enhancing Medical Cannabis Sales to Veterans: Through partnerships with veterans' organizations such as the Royal Canadian Legion and Veterans Affairs Canada, development of veteran-specific product bundles, and targeted marketing campaigns focused on benefits for conditions such as PTSD, pain, and anxiety. Key performance indicators (KPIs) include 30% year-over-year (YoY) growth in veteran customer acquisition and maintaining a retention rate above 89%.
2) Expanding Recreational Sales to Additional Provinces and Deepening Penetration in British Columbia (BC): We aim to achieve 40% YoY growth in recreational sales. This will involve securing listings with additional provincial cannabis wholesalers, expanding SKU counts in existing markets from 44 to over 100 in British Columbia alone (with similar growth targeted in new provinces), and investing in e-commerce platform upgrades featuring AI-driven personalization and recommendations. KPIs include entering new provinces and increasing the British Columbia market share.
3) Growing B2B Exports to Federally Legal Countries: We target tripling export volumes by 2028. Efforts will focus on strengthening partnerships in existing markets (Australia, Portugal, Germany, Brazil, and Czech Republic) and entering new markets including the UK, Switzerland, Costa Rica and New Zealand, with investments in GMP/EU-GMP compliance and participation in international trade shows. KPIs include 100% YoY export revenue growth and adding 2-3 new markets (countries) annually.
With strong sales momentum and a clear strategic roadmap ahead, we believe we are well-positioned for sustained growth and new opportunities in fiscal 2026 and beyond.
4 | Page
Herbal Dispatch Inc.
Management's Discussion and Analysis
For the Year Ended December 31, 2025
Selected Financial Data
The following table displays a summary of our consolidated statements of operations for the three months and years ended December 31, 2025 and 2024 and a summary of select balance sheet data as at December 31, 2025 and 2024.
| $ | Three Months Ended | Year Ended | ||
|---|---|---|---|---|
| Dec 31 2025 | Dec 31 2024 | Dec 31 2025 | Dec 31 2024 | |
| Gross revenue | 6,198,457 | 2,880,387 | 16,508,349 | 12,048,203 |
| Net revenue | 4,096,001 | 2,282,425 | 12,124,027 | 9,923,474 |
| Gross profit | 1,084,069 | 184,241 | 2,754,907 | 1,994,797 |
| Operating expenses | 1,100,586 | 895,839 | 3,985,311 | 3,488,596 |
| Other expenses (income), net | 343,462 | 934,336 | 611,063 | 1,279,250 |
| Adjusted EBITDA(1) | 84,621 | (578,364) | (727,941) | (1,046,742) |
| Net loss | (359,979) | (1,645,934) | (1,841,467) | (2,773,049) |
| Loss per share – basic and diluted | (0.01) | (0.02) | (0.02) | (0.04) |
Note 1. See Non-IFRS Financial Measures.
| As at $ | Dec 31 2025 | Dec 31 2024 |
|---|---|---|
| Assets | ||
| Cash | 197,138 | 274,786 |
| Total assets | 8,445,095 | 7,915,525 |
| Liabilities | ||
| Current liabilities | 5,158,263 | 3,862,220 |
| Long-term liabilities | 261,311 | 1,276,603 |
| Total liabilities | 5,419,574 | 5,138,823 |
| Shareholders' equity | 3,035,521 | 2,776,702 |
Results of Operations for the Fourth Quarter Ended December 31, 2025
Gross revenue in Q4 2025 increased to $6.2 million, reflecting an increase of 115% from gross sales of $2.9 million reported in Q4 2024. Net revenue, excluding excise taxes, also increased to $4.1 million from $2.3 million in Q4 last year. A breakdown of our revenue by category for the three months ended December 31, 2025 and 2024 was as follows:
5 | Page
Herbal Dispatch Inc.
Management's Discussion and Analysis
For the Year Ended December 31, 2025
| Fourth Quarter Ended $ | Dec 31 2025 | Dec 31 2024 |
|---|---|---|
| Breakdown of net revenue | ||
| Direct to consumer medical sales | 387,637 | 360,523 |
| Recreational cannabis sales | 3,033,002 | 1,294,542 |
| Export sales | 290,066 | 351,300 |
| Packaging and processing services | 385,296 | 276,060 |
| 4,096,001 | 2,282,425 |
Strong Q4 2025 revenue was driven by increased recreational cannabis sales, aided by expansion efforts and the BC General Employees' Union (the "BCGEU") strike beginning September 22, 2025. The strike halted wholesale shipments from the BC Liquor Distribution Branch, prompting retailers to rely on independent wholesalers and Herbal Dispatch's direct delivery platform, which led to a surge in order volumes. Although the strike ended October 26, 2025, new partnerships formed during this time are expected to support continued growth in our direct delivery operations.
Gross profit
| Fourth Quarter Ended $, except gross margin % | Dec 31 2025 | Dec 31 2024 | |
|---|---|---|---|
| Revenue - net | 4,096,001 | 2,282,425 | |
| Costs of sales | 3,011,932 | 2,098,184 | |
| Gross profit | 1,084,069 | 184,241 | |
| Gross margin % | 26.5% | 8.1% |
With the higher revenue, our gross profit rose to $1.1 million, compared to just $0.2 million last year. Our gross margin also improved significantly, reaching 26.5% from 8.1%. This improvement was due to several factors: (i) economies of scale, as certain fixed costs like labour did not increase at the same rate as sales; (ii) a shift in our sales mix, with a larger share of Q4 2025 sales coming from our own branded products, which generally yield higher margins than partner-branded consignment sales; (iii) pricing changes for partner-branded sales implemented during the third quarter of 2025; and (iv) other non-recurring inventory adjustments that adversely affected the comparison quarter in 2024.
General and administrative expenses increased to $0.8 million for the three months ended December 31, 2025 from $0.6 million in Q4 2024. The increase primarily consisted of non-recurring investor relations expenses and professional fees of $0.2 million, that were incurred in connection with the October 2025 equity Private Placement. Excluding these non-recurring expenditures, our general and administrative expenses in Q4 2025 would have been similar to the prior year. In Q4 2025, sales and marketing expenditures as well as depreciation and amortization expenses were consistent with the expenses reported in Q4 last year.
6 | Page
Herbal Dispatch Inc.
Management's Discussion and Analysis
For the Year Ended December 31, 2025
Adjusted EBITDA improved significantly in Q4 2024, rising to positive $0.1 million, from negative $0.6 million in Q4 2024, driven by the higher sales and gross profit. Excluding the non-recurring general and administrative expenses discussed above, our adjusted EBITDA for Q4 2025 would have improved further to positive $0.2 million.
Other expenses (income) for the three months ended December 31, 2025, primarily consisted of (i) interest costs and accretion related to loans payable of $72 thousand; and (ii) a $0.3 million fair value loss related to our royalty receivable with Enhanced Pet Sciences Corporation (“EPS”). As at December 31, 2025, we recognized an additional fair value loss of $0.3 million and reduced the carrying amount to $nil, given the significant credit risk associated with the royalty receivable and the low likelihood that a substantial amount of payments under the royalty receivable will be received.
Our net loss for the three months ended December 31, 2025 was $0.4 million compared to a loss of $1.6 million in 2024. The higher net loss in 2024 included a non-recurring foreign currency translation loss of $0.8 million related to foreign currency translation amounts previously recognized in other comprehensive income.
Results of Operations for the Year Ended December 31, 2025
Selected Annual Financial Information
| $ Year Ended and as at | Dec 31 2025 | Dec 31 2024 | Dec 31 2023 |
|---|---|---|---|
| Gross revenue | 16,508,349 | 12,048,203 | 5,735,700 |
| Net revenue | 12,124,027 | 9,923,474 | 4,743,796 |
| Gross profit | 2,754,907 | 1,994,797 | 1,294,256 |
| Net loss | (1,841,467) | (2,773,049) | (2,071,310) |
| Loss per share – basic and diluted | (0.02) | (0.04) | (0.03) |
| Total assets | 8,455,095 | 7,915,525 | 8,186,930 |
| Total non-current liabilities | 261,311 | 1,276,603 | 1,372,002 |
Since commencing sales in Canada on the acquired marketplace herbaldispatch.com in the fall of 2022, we have achieved significant revenue growth across all of our sales channels as we grew our customer base and established ourselves as a leading provider of quality medical and recreational products to discerning consumers at competitive prices.
Along with the strong revenue growth, our gross profit also increased. The higher net loss in fiscal 2024 was due to non-recurring items, including the realization of a foreign currency translation loss of $0.8 million.
7 | Page
Herbal Dispatch Inc.
Management's Discussion and Analysis
For the Year Ended December 31, 2025
Revenue
For the year ended December 31, 2025, gross sales increased by 37%, reaching $16.5 million compared to $12.1 million in 2024. Net revenue, excluding excise taxes, rose to $12.1 million from $9.9 million last year. A breakdown of net revenue by category for the years ended December 31, 2025 and 2024 was as follows:
| 5 Year Ended | Dec 31
2025 | Dec 31
2024 |
| --- | --- | --- |
| Net revenue | | |
| Canada | | |
| Direct to consumer medical sales | 1,554,188 | 1,490,887 |
| Recreational cannabis sales | 7,156,372 | 4,694,547 |
| Export sales | 1,748,174 | 2,903,968 |
| Packaging and processing services | 1,665,293 | 834,072 |
| | 12,124,027 | 9,923,474 |
Revenue growth in fiscal 2025 was principally driven by increased recreational cannabis sales, underpinned by continued expansion initiatives and further bolstered by the BCGEU strike, which took place from September 22, 2025, to October 26, 2025. This upward trend was partially counterbalanced by a decrease in export sales, which declined to $1.7 million in 2025 compared to $2.9 million in the prior year, primarily as a result of order delays.
Furthermore, services revenue also demonstrated growth in 2025, largely attributable to in-house packaging and processing services, including pre-roll manufacturing for third-party clients. Direct-to-consumer medical sales remained stable relative to the previous year.
Gross profit
| Year Ended
$, except gross margin % | | Dec 31
2025 | Dec 31
2024 |
| --- | --- | --- | --- |
| Revenue - net | | 12,124,027 | 9,923,474 |
| Costs of sales | | 9,369,120 | 7,928,677 |
| Gross profit | | 2,754,907 | 1,994,797 |
| Gross margin % | | 22.7% | 20.1% |
8 | Page
Herbal Dispatch Inc.
Management's Discussion and Analysis
For the Year Ended December 31, 2025
Gross profit rose to $2.8 million for the year ended December 31, 2025, compared to $2.0 million in 2024, mainly because of the revenue growth. Our gross margin also improved, reaching 22.7% in 2025, up from 20.1% the previous year. This was influenced by changes in our sales mix; in 2025, a greater share of sales came from in-house branded products, which generally have higher gross margins than partner-branded consignment sales. In addition, we also implemented pricing changes for partner-branded sales during the third quarter of 2025, which positively impacted gross margins in the latter part of the fiscal year.
Operating expenses
| $ Year Ended | Dec 31
2025 | Dec 31
2024 |
| --- | --- | --- |
| General and Administrative | | |
| Personnel | 1,464,556 | 1,420,177 |
| Professional service fees | 719,370 | 463,836 |
| Other operating expenses | 563,666 | 360,399 |
| | 2,747,592 | 2,244,412 |
| Sales and Marketing | | |
| Personnel | 153,980 | 213,231 |
| Advertising, promotions and selling costs | 581,276 | 583,896 |
| | 735,256 | 797,127 |
General and administrative expenses increased by $0.5 million, reaching $2.7 million for the year ended December 31, 2025 from $2.2 million last year. This increase was primarily attributable to elevated professional and consulting fees associated with cannabis industry regulatory compliance and various public company securities matters. Additionally, the rise included non-recurring investor relations expenses and professional fees totaling $0.2 million, incurred in connection with the October 2025 equity Private Placement. Sales and marketing expenditures for fiscal 2025 were similar to the amounts reported in 2024.
Shared based compensation expense of $95 thousand in 2025 (2024 - $43 thousand) represented the compensation cost of stock options issued during the previous year. In August 2024, we granted 6,100,000 stock options to certain directors, officers, employees and consultants in accordance with our stock option plan. Each option is exercisable to acquire one common share at an exercise price of $0.05 per share. The options vest in equal annual tranches over a period of 3 years from the date of grant and will expire on August 21, 2029.
Depreciation and amortization expense of $0.4 million for the year ended December 31, 2025 was consistent with the expenses incurred in the prior year. This expense primarily related to the amortization of equipment and intangible assets acquired from business acquisitions in 2022.
9 | Page
Herbal Dispatch Inc.
Management's Discussion and Analysis
For the Year Ended December 31, 2025
Adjusted EBITDA
For the full fiscal year ended December 31, 2025, adjusted EBITDA improved by 30% to negative $0.7 million from negative $1.0 million last year due to the higher revenue and gross profit achieved in 2025, partially offset by higher general and administrative expenses, as discussed above.
Other expenses (income)
Other expenses (income) of $0.6 million for the year ended December 31, 2025, primarily consisted of (i) interest costs and accretion related to loans payable of $0.3 million; and (ii) a loss on revaluation of the Company's royalty receivable of $0.3 million.
Other expenses (income) of $1.3 million for the year ended December 31, 2024, primarily consisted of (i) interest costs and accretion related to loans payable of $0.3 million; (ii) a loss on revaluation of the Company's royalty receivable of $0.2 million; and (iii) realization of currency translation of $0.8 million.
The loss on revaluation of the Company's royalty receivable pertains to a royalty receivable from EPS. As at December 31, 2025, we recognized an additional fair value loss of $0.3 million (2024 - $0.2 million) and reduced the carrying amount to $nil, given the significant credit risk associated with the royalty receivable and the low likelihood that a substantial amount of payments under the royalty receivable will be received.
The realization of currency translation loss of $0.8 million in the prior year related to foreign currency translation amounts previously recognized in other comprehensive income. Due to the full wind down of foreign operations in the United States, the remaining balance in accumulated other comprehensive income was fully recognized in profit and loss in fiscal 2024.
Net loss
For the year ended December 31, 2025, our net loss was $1.8 million, an improvement compared to a net loss of $2.8 million in 2024. This reduction in net loss primarily resulted from higher gross profit achieved during fiscal 2025. Additionally, the comparative period in 2024 was adversely affected by the foreign currency translation loss of $0.8 million.
Summary of Quarterly Data
| Quarter ended
$ (000's, except per share) | Dec
2025 | Sept
2025 | June
2025 | Mar
2025 | Dec
2024 | Sept
2024 | June
2024 | Mar
2024 |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Gross sales | 6,198 | 3,509 | 3,480 | 3,321 | 2,880 | 3,260 | 4,270 | 1,638 |
| Net revenue | 4,096 | 2,573 | 2,738 | 2,717 | 2,282 | 2,722 | 3,648 | 1,271 |
| Adjusted EBITDA^{(1)} | 84 | (313) | (428) | (71) | (578) | 7 | 153 | (629) |
| Net (loss) income | (360) | (528) | (666) | (287) | (1,646) | (388) | 59 | (798) |
| (Loss) earnings per share^{(2)} | (0.00) | (0.01) | (0.01) | (0.00) | (0.02) | (0.00) | 0.00 | (0.01) |
Note 1: See "Non-IFRS Financial Measures".
10 | Page
Herbal Dispatch Inc.
Management’s Discussion and Analysis
For the Year Ended December 31, 2025
Note 2: Earnings (loss) per share represents both basic and diluted earnings (loss) per share. Quarterly earnings (loss) per share is not additive and may not equal the annual loss per share reported. This is due to the effect of rounding as well as shares issued during the year on the basic weighted average number outstanding.
In Q4 2025, we achieved strong revenue growth, reporting gross sales of $6.2 million compared to sales of $3.5 million in Q3 2025. The growth in Q4 2025 was due to growth in domestic recreational cannabis, which was bolstered by the BCGEU general strike that commenced from September 22, 2025 until October 26, 2025. With the higher revenue, we also reported positive Adjusted EBITDA and a lower net loss in the quarter.
Gross revenue for Q3 2025 remained consistent with Q2 2025 levels; however, net revenue experienced a slight decrease to $2.6 million from $2.7 million reported in Q2 2025. Despite the lower net revenue, both adjusted EBITDA and net loss showed an improvement of $0.1 million in Q3 2025 compared to Q2 2025, attributable to improved gross margin performance.
In Q2 2025, gross and net revenue were in line with results from Q1 2025. Nevertheless, adjusted EBITDA and net loss deteriorated, primarily due to adverse shifts in sales mix, notably an increased proportion of third-party branded cannabis products, which yield the lowest margins among our product offerings.
In Q1 2025, we achieved strong revenue growth, generating gross sales of $3.2 million, up from $2.9 million in Q4 2024. The increase was driven by higher domestic and export cannabis sales, as well as increased service income. As a result of the higher revenue, we also reported a significantly reduced adjusted EBITDA loss and net loss for the quarter.
Our gross revenue in Q4 2024 declined to $2.9 million from $3.3 million in Q3 2024. The decline was due to lower export sales in Q4 2024 (decreased to $0.4 million from $0.8 million in Q3 2024). With the lower sales volumes, as well as other expense items, including a realization of foreign currency translation of $0.8 million, our net loss also increased in Q4 2024 from the prior quarter.
In Q3 2024, we reported gross sales of $3.3 million compared to sales of $4.3 million in Q2 2024. The decline was due to lower export sales in Q3 2024 of $0.8 million compared to $1.8 million in Q2 2024. The timing of our export sales can vary quarter to quarter due to the typical large size of these sales orders. With the lower revenue, we also reported lower Adjusted EBITDA and net income (loss) in the quarter.
In Q2 2024, we achieved strong revenue growth, reporting gross sales of $4.3 million compared to sales of $1.6 million in Q1 2024. The growth in Q2 2024 was due in part to export sales of $1.8 million (compared to no export sales in Q1 2024) as well as continued growth in domestic sales volumes. With the higher revenue, we also reported positive Adjusted EBITDA and positive net income in the quarter.
11 | Page
Herbal Dispatch Inc.
Management's Discussion and Analysis
For the Year Ended December 31, 2025
Financial Condition and Liquidity
| As at $ | Dec 31 2025 | Dec 31 2024 |
|---|---|---|
| Current assets | 3,812,385 | 2,600,475 |
| Total assets | 8,455,095 | 7,915,525 |
| Current liabilities | 5,158,263 | 3,862,220 |
| Total liabilities | 5,419,574 | 5,138,823 |
| Shareholders’ equity | 3,035,521 | 2,776,702 |
| Working capital(1) | (1,345,878) | (1,261,745) |
| Year ended $ | Dec 31 2025 | Dec 31 2024 |
| Cash used in operating activities | (2,094,808) | (374,047) |
| Cash used in investing activities | (7,817) | (21,883) |
| Cash provided by financing activities | 2,024,977 | 450,536 |
Note: (1) Working capital is defined as current assets less current liabilities.
Working capital
At December 31, 2025, our working capital was negative $1.3 million, down slightly from December 31, 2024. This decrease mainly resulted from reclassifying $0.9 million of convertible debentures to current liabilities, as their maturity date became within 12 months. These debentures, owed to two directors, were extended until January 31, 2028 after year end.
The impact of this decline was mostly mitigated by an increase in inventory and a reduction in accounts payable and accrued liabilities. In October 2025, we used net proceeds from our equity private placement to invest in additional inventory and pay down obligations. By year-end 2025, our cash balance had slightly decreased to $0.2 million from $0.3 million at the close of 2024.
Our ability to fund our future operating expenses and capital expenditures will depend on our future operating performance, most notably our ability to achieve sales in the future that are sufficient to cover our operating expenses. Future sales levels will be affected by several factors, including general economic, financial, and regulatory factors, including factors beyond the Company's control (See "Risks and Uncertainties").
In 2025, we implemented cash conservation measures and effectively managed negative working capital through advantageous supplier payment terms and the postponement of discretionary expenditures. Additionally, in March 2025, we secured debt financing with gross proceeds of $600,000, and in October 2025, completed an equity Private Placement resulting in gross proceeds of $2.1 million. Both financing activities were directed toward supporting our working capital requirements.
Page
Herbal Dispatch Inc.
Management’s Discussion and Analysis
For the Year Ended December 31, 2025
Equity Private Placement
In October 2025, we completed an equity Private Placement, with the sale of 41,564,220 Units at a price of CAD$0.05 per Unit, for aggregate subscription proceeds of $2.1 million. Each Unit subscribed for under the Private Placement consisted of one common share and one-half Warrant, with each full Warrant transferable and exercisable for one common share at a price of $0.08 per share and expiring on October 15, 2027. The net proceeds from the Private Placement were allocated to invest in inventory to support customer demand; and to strengthen supplier relationships to ensure a reliable supply chain.
In connection with the closing of the Private Placement, we incurred finder’s fees to qualified arm’s length finders as follows: (a) an aggregate cash payment of $0.1 million; and (b) the issuance of 599,900 Warrants.
Until we achieve sustainable ongoing profitability, we may need to raise additional equity and/or debt capital in the future to support our working capital needs. However, there can be no assurance that we will be successful in obtaining debt or equity capital in the future. If we are unsuccessful in securing additional equity and/or debt capital, we may be unable to meet our financial obligations as required, which could have a material adverse effect on our financial position and operations.
Cash used in operating activities
Cash used in operating activities for the year ended December 31, 2025 was $2.1 million (2024 – cash used of $0.4 million). The negative cash flow was primarily due to additional inventory purchased $1.0 million and to fund our net loss, which once adjusted for non-cash items of $0.8 million, was $1.0 million in fiscal 2025.
Cash used in investing activities
During the year ended December 31, 2025, we incurred capital expenditures of $8 thousand, compared to $16 thousand in 2024. Our current business model requires only minimal, occasional capital investments in miscellaneous equipment to support ongoing operations.
Cash from financing activities
Net cash provided by financing activities was $2.0 million for the year ended December 31, 2025, which consisted of net proceeds from the equity private placement of $2.0 million and net advances of $0.1 million from loans payable. These additions were partially offset by principal repayments on our right of use lease liability of $0.1 million. The net advances from loans payable included $0.6 million in proceeds from the Debt Financing described below.
13 | Page
Herbal Dispatch Inc.
Management's Discussion and Analysis
For the Year Ended December 31, 2025
Loans payable
Our loans payable at December 31, 2025 included a debt financing completed in March 2025 for gross proceeds of $0.6 million (the "Debt Financing"). The Debt Financing carries a two-year term, incurs interest at a rate of 18.0% per annum and is repayable in equal monthly instalments of $29,955. In conjunction with the loan agreement, the lenders were also issued 3,000,000 warrants, each entitling the holder to acquire one common share of the Company at an exercise price of $0.0650 per share. The warrants will expire on March 19, 2029. Of the total debt financing, $100,000 of the original principal amount was owing to Philip Campbell, the President and Chief Executive Officer of the Company.
Our loans payable at December 31, 2025 also included two convertible debentures with principal balances of $438,000 and $500,000, respectively, owing to two different directors of the Company. The debentures have a coupon rate of 14% per annum, payable monthly, and were scheduled to mature on January 31, 2026. The debentures are also convertible, at the holder's option into common shares of the Company at $0.06 per share, and at the Company's election, during any period where the trading price of the Company's common shares is $0.12 or greater for a period of 20 consecutive trading days.
Subsequent to year end, we extended the maturity date of the two convertible debentures until January 31, 2028.
Shareholders' Equity
Shareholders' equity increased to $3.0 million at December 31, 2025 from $2.8 million at December 31, 2024. The statements of shareholders' equity included in the accompanying consolidated financial statements for the year ended December 31, 2025 provide a schedule showing changes to all of the components of shareholders' equity during the period. The increase of $0.2 million was attributable to the net proceeds from the equity Private Placement of $2.0 million, partially offset by the net loss incurred for fiscal 2025.
14 | Page
Herbal Dispatch Inc.
Management's Discussion and Analysis
For the Year Ended December 31, 2025
Related Party Transactions
| $ Year Ended December 31 | 2025 | 2024 | ||
|---|---|---|---|---|
| Key management personnel compensation | ||||
| Wages and benefits and management fees | 199,123 | 225,314 | ||
| Directors’ fees | 81,000 | 111,258 | ||
| Share based compensation | 59,154 | 17,746 | ||
| 339,277 | 354,318 |
For the year ended December 31, 2025, we defined key management personnel as being the Chief Executive Officer, Chief Financial Officer, and Directors of the Company. As at December 31, 2025, amounts owing to key management personnel and directors included in trade and other payables was $14,000 (2024 - $334,502).
During the year ended December 31 2025, we also incurred interest expense of $141,272 (year ended December 31, 2024 - $142,447) related to convertible debentures and other loans from directors of the Company. Transactions with related parties are in the normal course of operations and are initially recorded at the exchange amount.
During the year ended December 31, 2025, we purchased $0.6 million of inventory processing services (2024 - $0.1 million) from a supplier of which Philip Campbell, the President and Chief Executive Officer of the Company, owns 15% of the common shares.
Outstanding Share Data
| | April 23
2026 | Dec 31
2025 |
| --- | --- | --- |
| Common Shares outstanding | 123,344,919 | 123,344,919 |
As at April 23, 2026, we also had outstanding:
(i) Warrants to acquire 21,382,010 common shares of the Company at an exercise price of $0.08 per share and expiring October 15, 2027;
(ii) Warrants to acquire 8,153,000 common shares of the Company at an exercise price of $0.06 per share and expiring on May 8, 2026;
(iii) Warrants to acquire 3,000,000 common shares of the Company at an exercise price of $0.065 per share and expiring on March 19, 2029;
(iv) Stock options exercisable into 5,700,000 common shares of the Company at a price of $0.05 per share and expiring on August 21, 2029;
(v) Restricted share units exercisable into 2,760,000 common shares of the Company;
15 | Page
Herbal Dispatch Inc.
Management's Discussion and Analysis
For the Year Ended December 31, 2025
(vi) A convertible debenture in the principal amount of $500,000 that is convertible into 8,333,333 common shares of the Company at a price of $0.06 per share and maturing on January 31, 2028;
(vii) A convertible debenture in the principal amount of $438,000 that is convertible into 7,300,000 common shares of the Company at a price of $0.06 per share and maturing on January 31, 2028; and
(viii) 75,000 issuable common shares contingent on certain revenue targets being achieved from the sale of Golden Spruce branded cannabis products in the future.
Financial Instrument Risks
We are exposed to risks of varying degrees of significance from our use of financial instruments which could affect our ability to achieve our strategic objectives for growth and stakeholder returns. The principal risks to which we are exposed, and the actions taken to manage them, are described below.
Credit Risk
Credit risk is the risk of a potential loss to the Company if a customer or third party to a financial instrument fails to meet its contractual obligations. Our exposure to credit risk from our cash is very limited as we hold our cash with highly rated financial institutions.
We have moderate exposure to credit risk related to trade and other receivables. The risk exposure is limited to the carrying amount at the balance sheet date. We provide credit to our business customers in the normal course and have established credit evaluation and monitoring processes to mitigate this credit risk. Our exposure to credit risk related to direct-to-consumer sales is limited as the majority of these sales are transacted with credit cards at the time the sale is completed.
Interest Rate Risk
Interest rate risk is the risk that the value of a financial instrument and associated cash flows might be adversely affected by a change in interest rates. In seeking to minimize the risks from interest rate fluctuations, we manage exposure through our normal operating and financing activities. We have obtained primarily fixed rate debt which limits our exposure to interest rate fluctuations.
Liquidity Risk
Liquidity risk is the risk that we will not be able to meet our financial obligations associated with financial liabilities. We manage liquidity risk through the management of our capital structure. Our approach to managing liquidity is to ensure that we will have sufficient liquidity to settle obligations and liabilities when due.
16 | Page
Herbal Dispatch Inc.
Management's Discussion and Analysis
For the Year Ended December 31, 2025
At December 31, 2025, the undiscounted contractual obligations related to financial liabilities were as follows:
| | Less than
1 year
$ | 1-5
Years
$ | Total
$ |
| --- | --- | --- | --- |
| Accounts payable and accrued liabilities | 3,327,713 | - | 3,327,713 |
| Loans payable | 1,300,509 | 86,820 | 1,387,329 |
Off-Balance Sheet Arrangements
We have not entered into any off-balance sheet arrangements.
Risks and Uncertainties
Our business is subject to certain risks and uncertainties. Prior to making any investment decisions regarding Herbal Dispatch, investors should carefully consider, among other things, the risks described herein. These risks and uncertainties are not exhaustive. Additional risks presently known or currently deemed immaterial may also impair our business operations. If any of the events described in the following business risks actually occur, our overall business, operating results and financial condition could be materially adversely affected.
Industry Competition
The Canadian recreational and medical cannabis market is highly competitive. We face competition from other companies, some of which may have longer operating histories, and more financial resources than Herbal Dispatch. Increased competition by larger and well-financed competitors could materially and adversely affect our business, financial condition, and results of operations. Because of the early stage of the industry in which our Company operates, we expect to face additional competition from new entrants. To remain competitive, we will need to continue to invest in marketing and sales initiatives to promote our products.
The principal factors on which we compete with other Canadian license holders are the quality and variety of cannabis products, the speed with which our product offerings are brought to market, brand recognition, pricing, and product innovation. We believe our focus on providing top quality cannabis to informed consumers at affordable pricing will enable us to grow our business and capture increased market share in Canada and internationally.
17 | Page
Herbal Dispatch Inc.
Management’s Discussion and Analysis
For the Year Ended December 31, 2025
Given the rapid changes affecting the global, national and regional economies generally and the cannabis industry, in particular, we may not be able to create and maintain a competitive advantage in the marketplace. Our success will depend on our ability to keep pace with any changes in such markets, especially in light of legal and regulatory changes. Our success will also depend on our ability to respond to, among other things, changes in the economy, market conditions, and regulatory and competitive pressures. Any failure to anticipate or respond adequately to such changes could have a material adverse effect on our financial condition, operating results, liquidity, cash flow and operational performance.
Key Officers and Employees
Our success and future growth will depend, to a significant degree, on the continued efforts of the Company’s directors and officers to develop the business and manage operations, and on their ability to attract and retain key technical, sales, and marketing staff or consultants. The loss of any key person or the inability to attract and retain new key personnel could have a material adverse effect on the business. Competition for qualified technical, sales, and marketing staff, as well as officers and directors can be intense, and no assurance can be provided that we will be able to attract or retain key personnel in the future. Our inability to retain and attract the necessary personnel could materially adversely affect our business and financial results.
Growth Strategies
Our future depends, in part, on our ability to implement our growth strategy, including growing revenue through (i) medical sales; (ii) recreational sales; (iii) export sales; and (iv) co-packing and white labelling services. Our ability to implement this growth strategy depends on, among other things, our ability to market products that appeal to consumers, maintain and expand brand loyalty and brand recognition, maintain and improve competitive position in the markets, identify and successfully enter new geographic areas and segments as well as the ability to successfully navigate legislative and regulatory uncertainties.
Domestic Supply Risk
We use only cannabis products with full compliance under federal and provincial regulations to be sold across Canada, and internationally. The regulation of third-party suppliers may have a significant impact upon the business. Any provincial or federal enforcement activity or any additional uncertainties which may arise in the future, could cause substantial interruption or cessation of the business, including adverse impacts to our supply chain and distribution channels, and other civil and/or criminal penalties at the federal level.
Product Innovation and Consumer Trends
Our business is subject to changing consumer trends and preferences, which is dependent, in part, on continued consumer interest in new products. The success of new product offerings, depends upon several factors, including our ability to (i) accurately anticipate customer needs; (ii) develop new products that meet these needs; (iii) successfully commercialize new products; (iv) price products competitively; (v) deliver products in sufficient volumes and on a timely basis; and (vi) differentiate product offerings from those of competitors.
18 | Page
Herbal Dispatch Inc.
Management’s Discussion and Analysis
For the Year Ended December 31, 2025
Effectiveness and Efficiency of Advertising and Promotional Expenditures
Our future growth and profitability will depend on the effectiveness and efficiency of advertising and promotional expenditures, including our ability to (i) create greater awareness for our products; (ii) determine the appropriate creative message and media mix for future advertising expenditures; and (iii) effectively manage advertising and promotional costs to maintain acceptable operating margins. There can be no assurance that advertising and promotional expenditures will result in revenues in the future or will generate awareness of our products. In addition, no assurance can be given that we will be able to manage our advertising and promotional expenditures on a cost-effective basis.
Global Economic Uncertainty
Demand for our products and services is influenced by general economic and consumer trends and regulatory environments beyond our control. There can be no assurance that our business and corresponding financial performance will not be adversely affected by general regulatory economic or consumer trends. Furthermore, such economic conditions can produce downward pressure on stock prices and on the availability of credit for financial institutions and corporations. If these levels of market disruption and volatility continue, we might experience reductions in business activity, increased funding costs and funding pressures (as applicable), a decrease in the market price of our shares, a decrease in asset values, additional write-downs and impairment charges and lower profitability.
Additional Financings
If we are not able to achieve and sustain profitability in the future or if we require additional capital to fund growth or other initiatives, we may require additional equity or debt financing. There can be no assurances that we will be able to obtain additional financial resources on favorable commercial terms or at all. Failure to obtain such financial resources could affect our plans for growth or result in the Company being unable to satisfy its obligations as they become due, either of which could have a material adverse effect on our business, results of operations, and financial condition.
Insurance coverage
Due to our involvement in the cannabis industry, we may have a difficult time obtaining the various insurances at normal industry rates that are desired to operate the business, which may expose us to additional cost, risk and financial liability. Insurance that is otherwise readily available, such as general liability, and directors and officer’s insurance, may be more difficult to find, and more expensive because of the regulatory regime applicable to the industry. There are no guarantees that we will be able to find such insurances in the future, or that the cost will be affordable. If we are forced to go without such insurances, it may prevent us from entering into certain business sectors, may inhibit growth, and may expose us to additional risk and financial liabilities.
19 | Page
Herbal Dispatch Inc.
Management’s Discussion and Analysis
For the Year Ended December 31, 2025
Data Security Breaches
The Company or our third-party service providers collect, process, maintain and use sensitive personal information relating to our customers and employees, including customer financial data (e.g., credit card information) and their personally identifiable information, and rely on third parties in connection with the operation of ecommerce and for the various social media tools and websites used as part of our marketing strategy. Any perceived, attempted or actual unauthorized disclosure of customer financial data (e.g., credit card information) or personally identifiable information regarding our employees, customers or website visitors could harm our reputation and credibility, reduce our e-commerce sales, impair our ability to attract website visitors, reduce our ability to attract and retain customers and could result in litigation against us or the imposition of significant fines or penalties.
Recently, data security breaches suffered by well-known companies and institutions have attracted a substantial amount of media attention, prompting new foreign, federal and provincial laws and legislative proposals addressing data privacy and security. As a result, we may become subject to more extensive requirements to protect the customer information that we process in connection with the purchase of our products, resulting in increased compliance costs.
Our on-line activities, including our e-commerce websites, may also be subject to denial of service or other forms of cyber-attacks. While we have taken measures to protect against those types of attacks, those measures may not adequately protect our on-line activities from such attacks. If a denial-of-service attack or other cyber event were to affect our e-commerce sites or other information technology systems, our business could be disrupted, we may lose sales or valuable data, and our reputation may be adversely affected.
Completion of future acquisitions, divestitures or business combinations
We believe that we may need to actively identify and source future acquisition opportunities. We are also actively pursuing strategic joint ventures and partnerships that will enable us to further broaden and diversify our product offerings and leverage current distribution facilities. Although we may engage in discussions with and submit proposals to acquisition and partnership candidates, suitable acquisitions and partnerships may not be available in the future on reasonable terms. Even if we identify an appropriate acquisition or partnership candidate, we may not be able to successfully negotiate the terms of the acquisition, finance the acquisition or, if the acquisition occurs, effectively integrate the acquired business into our business. In addition, the negotiation of a potential acquisition or partnership and the integration of an acquired business may require a disproportionate amount of management’s attention and resources.
Even if we complete additional business acquisitions, continued acquisition financing may not be available or available on reasonable terms, the new business acquired may not generate revenues as anticipated, and any anticipated costs efficiencies or synergies may not be realized. If we were unable to successfully identify, execute or integrate future acquisitions, this could negatively affect our results of operations. Even though we perform a due diligence review of the businesses we intend to acquire of a quality that we believe is consistent with industry practices, such reviews are inherently incomplete. Even an in-depth due diligence review of a business might not reveal existing or potential problems or permit us to become sufficiently familiar for a complete evaluation of the business. Even when problems are identified, we might assume certain risks and liabilities in connection with the acquired business.
20 | Page
Herbal Dispatch Inc.
Management's Discussion and Analysis
For the Year Ended December 31, 2025
Tariff Risks
Our business is engaged in the export of cannabis and cannabis-related products and is, therefore, subject to evolving international trade policies, including tariffs, duties, and regulatory restrictions imposed by importing countries. The imposition of new tariffs, changes to existing trade agreements, or retaliatory trade measures could impact the competitiveness of our products in international markets, increase costs, or limit market access. Additionally, cross-border cannabis trade is subject to heightened scrutiny and regulatory variability, which can amplify the financial and operational impact of tariff changes. We actively monitor global trade developments and engage with regulatory stakeholders to mitigate potential disruptions; however, there can be no assurance that future tariff changes will not materially affect our business, financial condition, or results of operations.
Epidemics and Pandemics
Our business could be materially and adversely affected by the outbreak of a widespread epidemic or pandemic or other public health crisis, including arising from the novel strain of the coronavirus known as "COVID-19." A local, regional, national or international outbreak of a contagious virus, including the novel coronavirus, COVID-19 could cause staff shortages, reduced customer traffic, supply shortages, and increased government regulation all of which may negatively impact our business, financial condition and results of operations.
Risks Related to the Regulatory Environment
Canadian Regulatory Landscape
The production, distribution and sale of cannabis in Canada is strictly regulated. On October 17, 2018, the Cannabis Act and accompanying regulations promulgated under the Cannabis Act (the "Cannabis Regulations"), and the new industrial hemp regulations (the "IHR", and together with the Cannabis Regulations, collectively, the "Regulations"), came into force, legalizing the production, distribution and sale of cannabis for adult recreational purposes, as well as incorporating the pre-existing medical cannabis regulatory scheme under one complete framework. Amendments legalizing the sale of edible cannabis, cannabis extracts, and cannabis topicals in the Canadian market came into force on October 17, 2019. A federally licensed entity with authorization to produce and sell any class of cannabis (except plants and seeds) must provide 60-days notice to Health Canada of its intent to sell any new cannabis retail product prior to making such product available for sale to provincially authorized purchasers or medical users. Pursuant to the federal regulatory framework in Canada, each province and territory may adopt its own laws governing the distribution, sale and consumption of cannabis and cannabis accessories within the province or territory provided that the provincial or territorial legislation contains certain measures that mirror the public health policy goals of the federal regime.
All Canadian provinces and territories have implemented mechanisms for the distribution and sale of cannabis for recreational purposes within those jurisdictions, and retail models vary between jurisdictions. The Cannabis Act maintains separate access to cannabis for medical purposes, including providing that import and export licences and permits will only be issued in respect of cannabis for medical or scientific purposes or in respect of industrial hemp. Patients who have the authorization of their healthcare provider may register with Health Canada to have access to cannabis, either purchased directly from a federally licensed entity authorized to sell for medical purposes, or by registering to produce a limited amount of cannabis for their own medical purposes or designating someone to produce cannabis for them.
21 | Page
Herbal Dispatch Inc.
Management's Discussion and Analysis
For the Year Ended December 31, 2025
Provincial Regulatory Framework
While the Cannabis Act provides for regulation of the commercial production of cannabis and related matters by the federal government, the provinces and territories of Canada have authority to adopt their own laws and regulations governing the distribution, sale and consumption of cannabis and cannabis accessory products within the province or territory, permitting for example, provincial and territorial governments to set lower possession limit for individuals and higher age requirements.
All Canadian provinces and territories have implemented regulatory regimes for the distribution and sale of cannabis for recreational purposes within those jurisdictions. In most provinces, provincial/territorial crown corporations act as intermediaries between entities licensed federally under the Cannabis Act and consumers, such bodies acting in some jurisdictions as exclusive cannabis wholesalers and distributors, and in some instances as exclusive retailers.
Some provinces also authorize municipal governments to impose additional requirements and regulations on the sale of recreational cannabis, such as by restricting the number of recreational cannabis retail outlets that are permitted in a certain geographical area. Municipal zoning authority also generally permits a municipality to restrict the geographical locations wherein such retail outlets may be opened.
Non-IFRS Financial Measures
This MD&A contains the Non-IFRS financial measure “Adjusted EBITDA”. Adjusted EBITDA does not have any standardized meaning prescribed by IFRS and, therefore, may not be comparable to similar measures presented by other issuers. Investors are cautioned that this financial measure should not be construed as an alternative to net income or to cash provided by operating, investing and financing activities determined in accordance with IFRS, as indicators of our performance.
Adjusted EBITDA is defined as earnings before interest, income taxes, depreciation, amortization, share based compensation, loss (gain) on disposal of assets, loss (gain) on investments, loss (gain) on extinguishment of debt, impairment losses, loss (gain) on foreign exchange and accretion expense. We believe that, in addition to net income (loss), adjusted EBITDA is a useful measure as it provides an indication of the financial results generated by our principal business activities prior to consideration of how these activities are financed or how the results are taxed in various jurisdictions and before certain non-cash items such as depreciation, amortization, and other items.
22 | Page
Herbal Dispatch Inc.
Management's Discussion and Analysis
For the Year Ended December 31, 2025
A reconciliation of net loss to adjusted EBITDA for each of the periods presented in this MD&A follows:
| $ | Three Months Ended | Year Ended | ||
|---|---|---|---|---|
| Dec 31 2025 | Dec 31 2024 | Dec 31 2025 | Dec 31 2024 | |
| Net loss | (359,979) | (1,645,934) | (1,841,467) | (2,773,049) |
| Add/subtract | ||||
| Interest | 62,885 | 110,843 | 305,218 | 288,675 |
| Impairment of investments | 272,340 | - | 272,340 | 195,510 |
| Share based compensation | (1,183) | 31,766 | 94,646 | 42,591 |
| Gain on settlement of debt | - | - | - | (19,912) |
| Currency translation | - | 820,310 | - | 820,310 |
| (Gain) loss on foreign exchange | (734) | 489 | (95) | (10,966) |
| Accretion expense | 8,971 | 2,694 | 33,600 | 5,633 |
| Depreciation & amortization | 102,321 | 101,468 | 407,817 | 404,466 |
| Adjusted EBITDA | 84,621 | (578,364) | (727,941) | (1,046,742) |
A reconciliation of net (loss) income to adjusted EBITDA for each of the previous eight fiscal quarters follows:
| Quarter ended $ (000's) | Dec 2025 | Sept 2025 | June 2025 | Mar 2025 | Dec 2024 | Sept 2024 | June 2024 | Mar 2024 |
|---|---|---|---|---|---|---|---|---|
| Net (loss) income | (360) | (528) | (666) | (287) | (1,646) | (388) | 59 | (798) |
| Add/subtract: | ||||||||
| Interest and other | 63 | 72 | 96 | 74 | 111 | 84 | 45 | 48 |
| Loss on disposal of assets | - | - | - | - | - | - | - | - |
| Impairment of investments | 272 | - | - | - | - | 196 | - | - |
| Loss on settlement of debt | - | - | - | - | - | - | (40) | 20 |
| Currency translation | - | - | - | - | 820 | - | - | - |
| Foreign exchange gain/loss | (1) | 1 | - | - | 1 | 2 | (13) | (1) |
| Accretion expense | 9 | 8 | 8 | 8 | 3 | 1 | 1 | 1 |
| Depreciation & amortization | 102 | 102 | 102 | 102 | 101 | 101 | 101 | 101 |
| Share based compensation | (1) | 32 | 32 | 32 | 32 | 11 | - | - |
| Adjusted EBITDA | 84 | (313) | (428) | (71) | (578) | 7 | 153 | (629) |
23 | Page
Herbal Dispatch Inc.
Management's Discussion and Analysis
For the Year Ended December 31, 2025
Forward Looking Information
Certain statements in this MD&A, including statements or information containing terminology such as "anticipate", "believe", "intend", "expect", "estimate", "may", "could", "will", and similar expressions constitute "forward-looking statements" within the meaning of applicable Canadian securities legislation. All statements, other than statements of historical fact, that address activities, events, or developments that we or a third party expect or anticipate will or may occur in the future, including our future growth, results of operations, performance, and business prospects and opportunities are forward-looking statements.
These forward-looking statements reflect our current beliefs and are based on information currently available to us. These statements require us to make assumptions we believe are reasonable and are subject to inherent risks and uncertainties. Actual results and developments may differ materially from the anticipated results and developments discussed in the forward-looking statements as certain of these risks and uncertainties are beyond our control. These risks include several of the factors discussed further under "Risks and Uncertainties" above. These risk factors are interdependent and the impact of any one risk or uncertainty on a particular forward-looking statement is not determinable.
Examples of forward-looking statements in this MD&A and the key assumptions and risk factors involved in such statements include, but are not limited to, executing our strategic growth initiatives for 2026, which includes growing our medical sales to Veterans, expanding recreational sales and growing export sales. The successful execution of these initiatives is subject to a number of risks and uncertainties, including industry competition, and future customer demand for our products, among others.
Consequently, all of the forward-looking statements made in this MD&A are qualified by these cautionary statements and other cautionary statements or factors contained herein, and there can be no assurance that the actual results or developments will be realized or, even if substantially realized, that they will have the expected effects on Herbal Dispatch. These forward-looking statements are made as of the date of this MD&A. Except as required by applicable securities legislation, we assume no obligation to update publicly or revise any forward-looking statements to reflect subsequent information, events, or circumstances.
Page
Herbal Dispatch Inc.
Management's Discussion and Analysis
For the Year Ended December 31, 2025
Additional information
Additional information relating to the Company is available on SEDAR* at www.sedarplus.ca.
Corporation information
Registered Office: Suite 1801 – 808 Nelson Street, Vancouver, BC V6Z 2H2
Directors: Philip Campbell
Drew Malcolm
Herb Dhaliwal
Senior Officers: Philip Campbell, Chief Executive Officer
Jason Vandenberg, Chief Financial Officer
Aron Tegenfeldt, Chief Commercial Officer
Auditor: Kingston Ross Pasnak LLP
Suite 1500, 9888 Jasper Avenue NW
Edmonton, Alberta, T5J 5C6
Transfer Agent: Odyssey Trust Company
350 – 409 Granville Street
Vancouver, BC, V6C 1T2
25 | Page