Planet 13 Holdings Inc. - Quarter Report: 2022 September (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

________________________________

FORM 10-Q

________________________________

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

	OR

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission File Number: 000-566374

________________________________

PLANET 13 HOLDINGS INC.

(Exact name of Registrant as Specified in its Charter)

British Columbia		83-2787199
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

2548 West Desert Inn Road, Suite 100 Las Vegas, Nevada 89109		89109
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (702) 815-1313

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Shares

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated Filer	☒	Smaller reporting company	☒
Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 10, 2022, there were 220,227,361 Common Shares outstanding.

Planet 13 Holdings Inc.

Quarterly Report on Form 10-Q

For Quarterly Period Ended September 30, 2022

Table of Contents

		Page
PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements.	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	35
Item 4.	Controls and Procedures.	35

PART II	OTHER INFORMATION
Item 1.	Legal Proceedings.	36
Item 1A.	Risk Factors.	36
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	36
Item 3.	Defaults Upon Senior Securities.	36
Item 4.	Mine Safety Disclosures.	36
Item 5.	Other Information.	36
Item 6.	Exhibits.	37
SIGNATURES		38

USE OF NAMES AND CURRENCY

In this Quarterly Report on Form 10-Q, unless the context otherwise requires, the terms “we,” “us,” “our,” “Company,” or “Planet 13” refer to Planet 13 Holdings Inc. together with its wholly-owned subsidiaries.

Unless otherwise indicated, all references to “$,” “US$” or “USD” in this Quarterly Report on Form 10-Q refer to United States dollars, and all references to “C$” or “CAD” refer to Canadian dollars.

IMPLICATIONS OF BEING AN EMERGING GROWTH COMPANY

As a company with less than $1.07 billion in revenue during our most recently completed fiscal year, we qualify as an “emerging growth company” as defined in Section 2(a) of the Securities Act of 1933, as amended, which we refer to as the “Securities Act,” as modified by the Jumpstart Our Business Startups Act of 2012, or the “JOBS Act.” As an emerging growth company, we may take advantage of specified reduced disclosure and other exemptions from requirements that are otherwise applicable to public companies that are not emerging growth companies. These provisions include:

	·	Reduced disclosure about our executive compensation arrangements;

	·	Exemptions from non-binding shareholder advisory votes on executive compensation or golden parachute; and

	·	Exemption from auditor attestation requirement in the assessment of our internal control over financial reporting.

We may take advantage of these exemptions for up to five years or such earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company if we had more than $1.07 billion in annual revenues as of the end of a fiscal year, if we are deemed to be a large accelerated filer under the rules of the Securities and Exchange Commission the (“SEC”) or if we issued more than $1.0 billion of non-convertible debt over a three-year period.

In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an emerging growth company to delay the adoption of some accounting standards until those standards would otherwise apply to private companies. We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act.

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DISCLOSURES REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q includes “forward-looking information” and “forward-looking statements” within the meaning of applicable Canadian securities laws and United States securities laws. All information, other than statements of historical facts, included in this Quarterly Report on Form 10-Q that addresses activities, events or developments that we expect or anticipate will or may occur in the future is forward-looking information. Forward-looking information is often identified by the words “may,” “would,” “could,” “should,” “will,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “expect” or similar expressions and may include, among others, information regarding: the anticipated benefits of the March 2, 2022 acquisition of Next Green Wave Holdings Inc. (“NGW”), including the corporate, operational and financial benefits, our strategic plans and expansion and expectations regarding the growth of the California cannabis market; statements relating to the business and future activities of, and developments related to, us after the date of this Quarterly Report on Form 10-Q, including such things as future business strategy, competitive strengths, goals, expansion and growth of our business, operations and plans, new revenue streams, the completion by us of contemplated acquisitions of additional real estate, cultivation and licensing assets, the roll out of new dispensaries, the application for additional licenses and the grant of licenses or renewals of existing licenses that have been applied for, the expansion of existing cultivation and production facilities, the completion of cultivation and production facilities that are under construction, the construction of additional cultivation and production facilities, the expansion into additional U.S. markets, any potential future legalization of adult-use and/or medical cannabis under U.S. federal law; expectations of market size and growth in the United States and the states in which we operate or contemplate future operations; expectations for other economic, business, regulatory and/or competitive factors related to us or the cannabis industry generally; and other events or conditions that may occur in the future.

Readers are cautioned that forward-looking information and statements are not based on historical facts but instead are based on reasonable assumptions and estimates of our management at the time they were provided or made and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, as applicable, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information and statements. Such factors include, among others our actual financial position and results of operations differing from management’s expectations; our business model; a lack of business diversification; increasing competition in the industry; public opinion and perception of the cannabis industry; expected significant costs and obligations; current reliance on limited jurisdictions; development of our business; access to capital; risks relating to the management of growth; risks inherent in an agricultural business; risks relating to energy costs; risks related to research and market development; risks related to breaches of security at our facilities; reliance on suppliers; risks relating to the concentrated voting control of the Company; risks related to our being a holding company; risks related to service providers withdrawing or suspending services under threat of prosecution; risks related to proprietary intellectual property and potential infringement by third parties; risks of litigation relating to intellectual property; negative clinical trial results; insurance related risks; risk of litigation generally; risks associated with cannabis products manufactured for human consumption, including potential product recalls; risks relating to being unable to attract and retain key personnel; risks relating to obtaining and retaining relevant licenses; risks relating to integration of acquired businesses; risks related to quantifying our target market; risks related to industry growth and consolidation; fraudulent activity by employees, contractors and consultants; cyber-security risks; conflicts of interest; risks related to reputational damage in certain circumstances; leased premises risks; risks related to the COVID-19 pandemic; U.S. regulatory landscape and enforcement related to cannabis, including political risks; heightened scrutiny by Canadian regulatory authorities; risks related to capital raising due to heightened regulatory scrutiny; risks related to tax liabilities; risks related to U.S. state and local law regulations; risks related to access to banks and credit card payment processors; risks related to potential violation of laws by banks and other financial institutions; ability and constraints on marketing products; risks related to lack of U.S. federal trademark and patent protection; risks related to the enforceability of contracts; the limited market for our securities; difficulty for U.S. holders of Common Shares to resell over the Canadian Securities Exchange ; price volatility of Common Shares; uncertainty regarding legal and regulatory status and changes; risks related to legislation and cannabis regulation in the states in which we operate or contemplate future operations; future sales by shareholders; no guarantee regarding use of available funds; currency fluctuations; risks related to entry into the U.S; and other factors beyond our control, as more particularly described under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021.

Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which may have been used. Although we have attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such forward-looking information and statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such information and statements. Accordingly, readers should not place undue reliance on forward-looking information and statements. The forward-looking information and statements contained herein are presented for the purposes of assisting readers in understanding our expected financial and operating performance and our plans and objectives and may not be appropriate for other purposes.

The forward-looking information and statements contained in this Quarterly Report on Form 10-Q represent our views and expectations as of the date of this Quarterly Report on Form 10-Q. We anticipate that subsequent events and developments may cause our views to change. However, while we may elect to update such forward-looking information and statements at a future time, we have no current intention of doing so except to the extent required by applicable law.

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PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

PLANET 13 HOLDINGS INC.

Interim Condensed Consolidated Balance Sheets

(Unaudited, In United States Dollars)

	September 30,			December 31,
	2022			2021
ASSETS
Current Assets:
Cash	$	50,876,087		$	61,588,843
Accounts Receivable		1,227,275			1,216,128
Inventory		13,471,123			14,225,369
Prepaid Expenses and Other Current Assets		3,056,579			3,977,524

Total Current Assets		68,631,064			81,007,864

Property and Equipment		73,489,138			50,778,277
Intangible Assets		81,738,007			63,398,007
Goodwill		17,583,460			-
Right of Use Assets - Operating		20,743,087			20,399,965
Long-term Deposits and Other Assets		1,019,630			1,061,879
Deferred Tax Asset		206,421			162,804

TOTAL ASSETS	$	263,410,807		$	216,808,796

LIABILITIES AND SHAREHOLDERS’ EQUITY

LIABILITIES
Current Liabilities:
Accounts Payable	$	3,034,170		$	3,266,783
Accrued Expenses		5,990,412			7,032,620
Income Taxes Payable		147,323			1,126,249
Notes Payable - Current Portion		884,000			884,000
Operating Lease Liabilities		448,232			423,573

Total Current Liabilities		10,504,137			12,733,225

Long-Term Liabilities:
Operating Lease Liabilities		25,177,758			23,134,012
Warranty Liability		200,482			7,206,049
Other Long-term Liabilities		28,000			28,000

Total Liabilities		35,910,377			43,101,286

Shareholders’ Equity
Common Shares, no par value, unlimited Common Shares authorized, 220,146,277 issued and outstanding at September 30, 2022 and 198,687,950 at December 31, 2021		-			-
Additional Paid-In Capital		310,010,745			245,861,704
Retained Earnings (Deficit)		(82,510,315	)		(72,154,194	)
Total Shareholders’ Equity		227,500,430			173,707,510

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	263,410,807		$	216,808,796

On behalf of the Board:
Michael Harman		Adrienne O’Neal
/s/ Michael Harman		/s/ Adrienne O’Neal
Director		Director

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PLANET 13 HOLDINGS INC.

Interim Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited, in United States Dollars)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2022			2021			2022			2021

Revenues, net of discounts	$	25,623,217		$	32,952,254		$	79,729,842		$	89,612,050
Cost of Goods Sold		(15,064,315	)		(15,208,926	)		(42,445,429	)		(39,827,876	)
Gross Profit		10,558,902			17,743,328			37,284,413			49,784,174

Expenses:
General and Administrative		11,309,955			19,825,147			36,807,699			44,185,685
Sales and Marketing		938,269			1,959,579			2,428,947			4,162,934
Lease Expense		723,955			673,880			1,984,252			1,934,138
Depreciation		1,978,403			1,376,521			5,982,392			3,325,524

Total Expenses		14,950,582			23,835,127			47,203,290			53,608,281

Loss From Operations		(4,391,680	)		(6,091,799	)		(9,918,877	)		(3,824,107	)

Other Income (Expense):
Interest income (expense), net		121,285			(6,996	)		193,896			(23,698	)
Foreign exchange gain (loss)		(1,834	)		79,688			(23,000	)		1,805,953
Transaction costs		-			-			-			(256,666	)
Change in fair value of warrant liability		197,721			6,522,787			6,992,955			(2,728,386	)
Other Income, net		41,487			152,466			270,254			338,890

Total Other Income		358,659			6,747,945			7,434,105			(863,907	)

Income (Loss) Before Provision for Income Taxes		(4,033,021	)		656,146			(2,484,772	)		(4,688,014	)

Provision For Income Taxes
Current Tax Expense		(2,238,493	)		(3,601,094	)		(7,914,966	)		(10,046,821	)
Deferred Tax Recovery		15,989			203,273			43,617			414,013
		(2,222,504	)		(3,397,821	)		(7,871,349	)		(9,632,808	)

Loss and Comprehensive Loss for the Period	$	(6,255,525	)	$	(2,741,675	)	$	(10,356,121	)	$	(14,320,822	)

Loss per Share
Basic and diluted loss per share	$	(0.03	)	$	(0.01	)	$	(0.05	)	$	(0.07	)

Weighted Average Number of Common Shares
Basic and diluted		220,146,277			196,292,786			215,321,796			194,576,544

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PLANET 13 HOLDINGS INC.

Interim Condensed Consolidated Statements of Changes in Shareholders’ Equity

(Unaudited, in United States Dollars, except Share Amounts)

	Number of
	Common Shares		Class A Restricted Shares			Warrants			Additional Paid-in Capital		Accumulated Deficit			Total Shareholders’ Equity

Balance, January 1, 2021		126,573,250		55,232,940			150,963		$	159,399,056	$	(52,693,242	)	$	106,705,814

Shares Issued on Conversion of Class A Restricted Shares		55,232,940		(55,232,940	)
Shares Issued on Settlement of RSUs		915,803		-			-			-		-			-
Share Based Compensation - RSUs		-		-			-			12,208,463		-			12,208,463
Shares Issued on Exercise of Broker Warrants		446,801		-			(446,801	)		2,163,065		-			2,163,065
Shares Issued on Exercise of Other Warrants		3,312,139		-			-			20,868,784		-			20,868,784
Shares Issued on Exercise of Options		121,336		-			-			86,216		-			86,216
Share Based Compensation - Options		-		-			-			3,104		-			3,104
Shares Issued on Bought Deal Financings, net		9,861,250		-			591,676			47,729,735		-			47,729,735
Loss for the Period		-		-			-			-		(14,320,822	)		(14,320,822	)

Balance, September 30, 2021		196,463,519		-			295,838		$	242,458,423	$	(67,014,064	)	$	175,444,359

Balance, January 1, 2022		198,687,950		-			295,838			245,861,704		(72,154,194	)		173,707,510

Share Based Compensation - RSUs		-		-			-			6,154,338		-			6,154,338
Shares Issued on Acquisition		21,361,002		-			-			56,656,905		-			56,656,905
Replacement Options issued on Acquisition		-		-			-			1,239,818		-			1,239,818
Shares Issued on Exercise of Options		97,325		-			-			97,980		-			97,980
Loss for the Period		-		-			-			-		(10,356,121	)		(10,356,121	)

Balance, September 30, 2022		220,146,277		-			295,838		$	310,010,745	$	(82,510,315	)	$	227,500,430

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PLANET 13 HOLDINGS INC.

Interim Condensed Consolidated Statements of Cash Flows

(Unaudited, In U.S. Dollars)

	Nine Months Ended
	September 30, 2022			September 30, 2021
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
Net loss	$	(10,356,121	)	$	(14,320,822	)
Adjustments for items not involving cash:
Shared based compensation expense		6,154,338			12,211,567
Non-cash lease expense		3,364,265			3,332,858
Depreciation		8,156,634			4,725,546
Amortization of lease incentive		(238,469	)		-
Change in fair value of warrant liability		(6,992,955	)		2,728,386
Loss on translation of warrant liability		(12,612	)		48,924
Loss on disposal of fixed assets		4,048			-
Transaction costs		-			256,666
Deferred tax liability		-			(414,013	)
Proceeds from lease incentive		1,100,000			-
Unrealized gain (loss) on foreign currency exchange		-			(35,558	)
		1,179,127			8,533,554

Net Changes in Non-cash Working Capital Items		3,800,775			(6,290,402	)
Repayment of lease liabilities		(2,645,471	)		(2,469,078	)
Total Operating		2,334,432			(225,926	)

FINANCING ACTIVITIES

Proceeds from private placements		-			53,852,980
Proceeds from exercise of warrants and options		97,980			14,162,689
Financing issuance expenses		-			(3,494,930	)
Total Financing		97,980			64,520,739

INVESTING ACTIVITIES

Purchase of property, plant and equipment		(14,642,193	)		(14,560,627	)
Purchase of licenses		-			(258,060	)
Proceeds on disposal of property & equipment		-			194,214
Cash acquired through NGW acquisition		1,493,922			-
Total Investing		(13,148,271	)		(14,624,473	)

Effect of foreign exchange on cash		3,103			23,118

NET CHANGE IN CASH DURING THE PERIOD		(10,712,756	)		49,693,458

CASH
Beginning of Period		61,588,843			79,000,850

End of Period	$	50,876,087		$	128,694,308

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PLANET 13 HOLDINGS INC.

Notes to the Interim Condensed Consolidated Financial Statements

(Unaudited, in United States Dollars, except share amounts)

1. Nature of Operations

Planet 13 Holdings Inc. (“Planet 13” or the “Company”) was incorporated under the Canada Business Corporations Act on April 26, 2002 and continued under the British Columbia Business Corporations Act on September 24, 2019.

The Company is a vertically integrated cultivator and provider of cannabis and cannabis-infused products that is licensed under the laws of the States of Nevada, California, and Florida, and is a licensed retailer for cannabis and cannabis infused products in Illinois. The Company is licensed in these jurisdictions as follows: six Nevada cultivation licenses (three medical and three adult-use), six Nevada production licenses (three medical and three adult-use), three Nevada dispensary licenses (one medical and two adult-use), one Nevada distribution license, one California adult-use dispensary license, one California distribution license, one Florida Medical Marijuana Treatment Center license (unlimited medical dispensary, cultivation, and processing facilities), and one Illinois conditional adult-use dispensary license. On March 2, 2022, by way of acquisition and in addition to the licenses listed above, the Company 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 adult-use cultivation processing. On July 12, 2022, the California Department of Cannabis Control approved the Company’s cultivation processing license.

Planet 13 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 “PLNHF”.

The Company’s registered office is located at 595 Howe Street, 10^th Floor, Vancouver, BC V6C 2T5 and the head office address is 2548 W. Desert Inn Road, Las Vegas, NV 89109.

While cannabis and CBD-infused products are legal under the laws of several U.S. states (with varying restrictions applicable), the United States Federal Controlled Substances Act classifies all “marijuana” as a Schedule I drug, whether for medical or recreational use. Under U.S. federal law, a Schedule I drug or substance has a high potential for abuse, no accepted medical use in the United States, and a lack of safety for use under medical supervision.

The federal government currently is prohibited from prosecuting businesses that operate in compliance with applicable state and local medical cannabis laws and regulations; however, this does not protect adult use cannabis. In addition, if the federal government changes this position, it would be financially detrimental to the Company.

2. Basis of Presentation

These unaudited interim condensed consolidated financial statements reflect the accounts of the Company and have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for all periods presented. Certain information and footnote disclosures normally included in the audited annual consolidated financial statements prepared in accordance with GAAP have been omitted or condensed. The information included in these unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2021. These unaudited interim condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments), which, in the opinion of management, are necessary for the fair presentation of the results for the interim periods presented. Interim results are not necessarily indicative of results for a full year.

These unaudited interim condensed consolidated financial statements have been prepared on a going concern basis, which assumes that the Company will continue in operation for the foreseeable future and, accordingly, will be able to realize its assets and discharge its liabilities in the normal course of operations as they come due.

Failure to arrange adequate financing on acceptable terms and/or achieve profitability may have an adverse effect on the financial position, results of operations, cash flows and prospects of the Company. These unaudited interim condensed consolidated financial statements do not give effect to adjustments to assets or liabilities that would be necessary should the Company be unable to continue as a going concern. Such adjustments could be material. These unaudited interim condensed consolidated financial statements are presented in U.S. dollars, which is also the Company’s and its subsidiaries’ functional currency.

These consolidated financial statements were authorized for issuance by the Board of Directors of the Company on November 10, 2022.

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PLANET 13 HOLDINGS INC.

Notes to the Interim Condensed Consolidated Financial Statements

(Unaudited, in United States Dollars, except share amounts)

i)	Basis of consolidation

The accompanying consolidated financial statements include the accounts of the Company and all subsidiaries. Subsidiaries are entities in which the Company has a controlling voting interest or is the primary beneficiary of a variable interest entity. Subsidiaries are fully consolidated from the date control is transferred to the Company and are deconsolidated from the date control ceases. All intercompany accounts and transactions have been eliminated upon consolidation. The consolidated financial statements include all the assets, liabilities, revenues, expenses and cash flows of the Company and its subsidiaries after eliminating intercompany balances and transactions.

These consolidated financial statements include the accounts of the Company and the following entities which are subsidiaries of the Company:

Subsidiaries as at September 30, 2022	Jurisdiction of Incorporation	Ownership Interest 2022			Ownership Interest 2021			Nature of Business

MM Development Company, Inc. (“MMDC”)	Nevada, USA		100	%		100	%	NV license holding company; vertically integrated cannabis operations
BLC Management Company LLC	Nevada, USA		100	%		100	%	Holding company
LBC CBD LLC (“LBC”)	Nevada, USA		100	%		100	%	CBD retail sales and marketing
Newtonian Principles Inc.	California, USA		100	%		100	%	CA license holding company; cannabis retail sales
Crossgate Capital U.S. Holdings Corp.	Nevada, USA		100	%		0	%	Holding company
Next Green Wave, LLC	California, USA		100	%		0	%	CA license holding company; cannabis cultivation and processing
Planet 13 Illinois, LLC	Illinois, USA		49	%		49	%	IL license holding company
BLC NV Food, LLC	Nevada, USA		100	%		100	%	Holding company
By The Slice, LLC	Nevada, USA		100	%		100	%	Food retailing
Planet 13 Chicago, LLC	Illinois, USA		100	%		100	%	Holding company
Planet 13 Florida, Inc.	Florida, USA		100	%		100	%	FL license holding company
Club One Three, LLC	Nevada, USA		100	%		N/A		Inactive

ii)	Functional currency

The Company’s functional currency is the Unites States dollar (“USD”), and management has chosen to present these unaudited interim condensed consolidated financial statements in USD. The functional currency of the Company’s subsidiaries is USD. All amounts are presented in USD values unless otherwise stated.

Canadian currency transactions are translated into USD at exchange rates in effect on the date of the transaction. Monetary assets and liabilities denominated in Canadian dollars (“CAD”) are translated to USD at the foreign exchange rate applicable at the end of each reporting period.

Realized and unrealized foreign exchange gains and losses are recognized in the unaudited interim condensed consolidated statements of operations and comprehensive loss. Non-monetary assets and liabilities that are measured in terms of historical cost in CAD are translated using the exchange rate at the date of the transaction.

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PLANET 13 HOLDINGS INC.

Notes to the Interim Condensed Consolidated Financial Statements

(Unaudited, in United States Dollars, except share amounts)

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.

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 has 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. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public and private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.

iv)	Business Combinations and Goodwill

The Company accounts for business combinations using the acquisition method in accordance with ASC 805, Business Combinations, which requires recognition of assets acquired and liabilities assumed, including contingent assets and liabilities, at their respective fair values on the date of acquisition. Any excess of the purchase consideration over the net fair value of tangible and identified intangible assets acquired less liabilities assumed is recorded as goodwill. The costs of business acquisitions, including fees for accounting, legal, professional consulting and valuation specialists, are expensed as incurred within general and administrative expenses. Purchase price allocations may be preliminary and, during the measurement period not to exceed one year from the date of acquisition, changes in assumptions and estimates that result in adjustments to the fair value of assets acquired and liabilities assumed are recorded in the period the adjustments are determined.

The estimated fair value of acquired assets and assumed liabilities are determined primarily using a discounted cash flow approach, with estimated cash flows discounted at a rate that the Company believes a market participant would determine to be commensurate with the inherent risks associated with the asset and related estimated cash flow streams.

3. Inventory

Finished goods inventory consists of dried cannabis, concentrates, edibles, and other products that are complete and available for sale (both internally generated inventory and third-party products purchased in the wholesale market). Work in process inventory consists of cannabis after harvest, in the processing stage. Packaging and miscellaneous consist of consumables for use in the transformation of biological assets and other inventory used in production of finished goods. The Company’s inventory is comprised of:

	September 30,		December 31,
	2022		2021

Raw materials	$	4,526,255	$	3,093,646
Packaging and miscellaneous		1,686,670		1,825,514
Work in progress		2,139,114		2,883,955
Finished goods		5,119,084		6,422,254
	$	13,471,123	$	14,225,369

Cost of Inventory is recognized as an expense when sold and included in the cost of goods sold. During the three and nine months ended September 30, 2022, the Company recognized $15,064,315 and $42,445,429 (2021 - $15,208,926 and $39,827,876) of inventory expensed to cost of goods sold.

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PLANET 13 HOLDINGS INC.

Notes to the Interim Condensed Consolidated Financial Statements

(Unaudited, in United States Dollars, except share amounts)

4. Prepaid Expenses and Other Current Assets

	September 30,		December 31,
	2022		2021

Security deposits	$	781,143	$	2,287,596
Advertising and Marketing		-		306,415
Prepaid rent		234,944		218,599
Insurance		556,290		804,608
License fees		823,858		36,008
Miscellaneous		660,344		324,298
	$	3,056,579	$	3,977,524

5. Property and Equipment

	Land and							Leasehold		Construction
	Improvements		Buildings		Equipment			Improvements		in Progress			Total
Gross carrying amount

At December 31, 2021	$	630,299	$	1,707,894	$	11,105,241		$	54,718,371	$	127,680		$	68,289,485
Additions		5,808,295		12,552,755		1,471,663			1,798,279		9,240,551			30,871,543
Transfers		-		-		-			6,114,711		(6,114,711	)		-
Disposals		-		-		(8,786	)		-		-			(8,786	)
At September 30, 2022	$	6,438,594	$	14,260,649	$	12,568,118		$	62,631,361	$	3,253,520		$	99,152,242

Depreciation

At December 31, 2021	$	179,297	$	246,447	$	3,801,166		$	13,284,298	$	-		$	17,511,208
Additions		39,169		215,084		1,884,871			6,017,510		-			8,156,634
Transfers		-		-		-			-		-			-
Disposals		-		-		(4,738	)		-		-			(4,738	)
At September 30, 2022	$	218,466	$	461,531	$	5,681,299		$	19,301,808	$	-		$	25,663,104

Carrying amount

At December 31, 2021	$	451,002	$	1,461,447	$	7,304,075		$	41,434,073	$	127,680		$	50,778,277
At September 30, 2022	$	6,220,128	$	13,799,118	$	6,886,819		$	43,329,553	$	3,253,520		$	73,489,138

As at September 30, 2022, costs related to construction of facilities were capitalized as construction in progress and not depreciated. Once construction is completed, the construction in progress balance is moved to the appropriate fixed asset account and depreciation commences. The contractual construction commitment as of September 30, 2022 was $1,509,641 (December 31, 2021 - $nil).

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PLANET 13 HOLDINGS INC.

Notes to the Interim Condensed Consolidated Financial Statements

(Unaudited, in United States Dollars, except share amounts)

For the nine months ended September 30, 2022, depreciation expense was $8,156,634 (2021 - $4,725,546) of which $2,174,242 (2021 - $1,400,022) was included in cost of goods sold.

During the nine months ended September 30, 2022, the Company transferred $6,114,711 in gross asset value construction in progress to leasehold improvements.

6. Intangible Assets

	Retail Dispensary Santa Ana		Retail Dispensary Clark County		Cultivation and Production Clark County		Master License Florida		Cultivation Coalinga, California		Total

Carrying amount
Balance, December 31, 2021	$	6,151,343	$	690,000	$	709,798	$	55,846,866	$	-	$	63,398,007
Additions – NGW		-		-		-		-		18,340,000		18,340,000
Balance, September 30, 2022	$	6,151,343	$	690,000	$	709,798	$	55,846,866	$	18,340,000	$	81,738,007

On March 2, 2022, the Company closed on its acquisition of Next Green Wave Holdings, Inc. (“NGW”) resulting in the Company acquiring a California cultivation and distribution license held by NGW in Coalinga, California. The acquisition was accounted for as a stock purchase acquisition as NGW was deemed to be a business under ASC 805 Business Combinations (Note 20). The value assigned to identifiable intangible assets was $18,340,000.

7. Leases

The Company’s lease agreements are for cultivation, manufacturing, retail office premises and for vehicles. The property lease terms range between 7 years and 21 years depending on the facility and are subject to an average of 2 renewal periods of equal length as the original lease. Leases for vehicles are typically between 4 years and 6 years with no renewal terms. Certain leases include escalation clauses or payment of executory costs such as property taxes, utilities, or insurance and maintenance. Rent expense for leases with escalation clauses is accounted for on a straight-line basis over the lease term. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The following table provides the components of lease costs recognized in the unaudited interim condensed consolidated statement of operations and comprehensive loss for three- and nine-month periods ended September 30, 2022 and 2021:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021

Operating lease costs	$	1,183,959	$	1,131,328	$	3,364,265	$	3,306,488

Finance lease costs:
Amortization of lease assets		-		13,086		-		38,173
Interest on lease liabilities		-		608		-		3,295
Finance lease costs		-		13,694		-		41,468
Short term lease expense		3,473		4,289		5,057		12,866
Total lease costs	$	1,187,432	$	1,149,311	$	3,369,322	$	3,360,822

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PLANET 13 HOLDINGS INC.

Notes to the Interim Condensed Consolidated Financial Statements

(Unaudited, in United States Dollars, except share amounts)

Other information related to operating and finance leases as of and for the nine months ended September 30, 2022 and 2021 are as follows:

September 30, 2022

September 30, 2021

Finance

Operating

Finance

Operating

Lease

Weighted average discount rate

15.00

Weighted average remaining lease term

11.12

0.14

16.21

The maturity of the contractual undiscounted lease liabilities as of September 30, 2022 and December 31, 2021 are:

	September 30, 2022					December 31, 2021
	Finance		Operating			Finance		Operating
	Lease		Lease			Lease		Lease

One year	$	-	$	3,871,019		$	-	$	3,595,030
Two years		-		4,082,366			-		3,729,936
Three years		-		4,199,585			-		3,870,217
Four years		-		4,199,263			-		3,956,923
Five years		-		4,242,544			-		3,880,082
Thereafter		-		58,109,534			-		54,138,155

Total undiscounted lease liabilities		-		78,704,311			-		73,170,343
Interest on lease liabilities		-		(53,078,321	)		-		(49,612,758	)
Total present value of minimum lease payments		-		25,625,990					23,557,585
Lease liability - current portion		-		(448,232	)		-		(423,573	)
Lease liability	$	-	$	25,177,758		$	-	$	23,134,012

Principally all leases relate to real estate. Additional information on the right-of-use assets is as follows:

	September 30, 2022						December 31, 2021
	Finance			Operating			Finance		Operating
	Lease			Lease			Lease		Lease
Gross carrying amount
Balance, beginning of period	$	133,561		$	22,830,123		$	133,561	$	21,962,564
Lease additions and modifications		-			2,326,202			-		867,559
Lease incentives		-			(861,531	)		-		-
Disposals		(96,601	)		(406,351	)		-		-
Balance, end of period	$	36,960		$	23,888,443		$	133,561	$	22,830,123

Depreciation
Balance, beginning of period	$	133,561		$	2,430,158		$	88,889	$	1,464,669
Additions		-			772,021			44,672		965,489
Disposals		(96,601	)		(56,823	)		-		-
Balance, end of period	$	36,960		$	3,145,356		$	133,561	$	2,430,158

Carrying amount, beginning of period	$	-		$	20,399,965		$	44,672	$	20,497,895
Carrying amount, end of period	$	-		$	20,743,087		$	-	$	20,399,965

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PLANET 13 HOLDINGS INC.

Notes to the Interim Condensed Consolidated Financial Statements

(Unaudited, in United States Dollars, except share amounts)

For the three and nine months ended September 30, 2022, the Company incurred $1,183,959 and $3,364,265 of operating lease costs, respectively (2021 - $1,131,328 and $3,306,488), of which $460,004 and $1,380,013, respectively (2021 - $457,448 and $1,372,350) was capitalized to inventory or included in cost of goods sold.

8. Notes Payable

	September 30,			December 31,
	2022			2021

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

	$	884,000		$	884,000
Less current portion		(884,000	)		(884,000	)
	$	-		$	-
Started maturities of debt obligations are as follow:

Next 12 months Promissory Note	$	884,000		$	884,000

9. Share Capital

The Company is authorized to issue an unlimited number of common shares and an unlimited number of Class A shares.

		Number of Common Shares
		September 30,		December 31,
		2022		2021
Common Shares
Balance at January 1			198,687,950		126,573,250
Shares issued on settlement of RSU’s	i.		-		3,126,534
Shares issued on exercise of options	ii.		97,325		121,336
Shares issued on exercise of warrants	iii.		-		3,772,640
Shares issued on financing - February 2021	iv.		-		9,861,250
Shares issued on conversion of Class A shares	v.		-		55,232,940
Shares issued on acquisition (Note 20)	vi.		21,361,002		-

Total common shares outstanding			220,146,277		198,687,950

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PLANET 13 HOLDINGS INC.

Notes to the Interim Condensed Consolidated Financial Statements

(Unaudited, in United States Dollars, except share amounts)

i. Shares issued for Restricted Share Units

During the nine months ended September 30, 2022, no Restricted Share Units (“RSUs”) were awarded, vested or settled and 18,000 RSUs were cancelled.

During the year ended December 31, 2021, the Company issued 3,126,534 common shares on the settlement of RSUs that had vested during the period. The Company did not receive any cash proceeds on the settlement.

ii. Shares issued for Stock Options

During the nine months ended September 30, 2022, 1,106,925 replacement options were issued to holders of NGW options in connection with the Company’s acquisition of NGW. The Company issued 97,325 common shares on the exercise of options that had a strike price of CAD$1.31 resulting in cash proceeds of $97,980 (CAD$127,496). Other than the replacement options, no options were awarded, and 386,250 options expired.

During the year ended December 31, 2021, the Company issued 121,336 common shares on the exercise of options that had a strike price in the range of CAD$0.75 to CAD$1.55 per common share resulting in cash proceeds of $86,216 (CAD$108,987).

iii. Shares issued on the exercise of Warrants

During the nine months ended September 30, 2022, no warrants were issued or exercised, and 728,347 warrants expired.

During the year ended December 31, 2021, the Company issued 3,772,640 common shares to warrant holders who exercised 3,772,640 warrants resulting in cash proceeds of $14,093,793 (CAD$17,848,084).

iv. Shares issued on Financing – February 2021

During the year ended December 31, 2021, the Company completed a bought deal financing on February 2, 2021 for aggregate gross proceeds of $53,852,980 (CAD$69,028,750) at a price of CAD$7.00 per unit. The Company issued 9,861,250 units of the Company. Each unit was comprised of one common share in the capital of the Company and one-half of one Common Share purchase warrant. Each whole warrant entitles the holder to acquire one common share at an exercise price of CAD$9.00 per common share for a period of 24 months.

The Company also issued 591,676 broker warrants that entitle the holder to purchase one common share for a period of 24 months from the closing of the offering at a price of CAD$7.00 per common share. The broker warrants were measured based on the fair market value of the warrants using a Black Scholes valuation model.

The Company incurred $3,494,930 in cash share issuance costs and $1,296,170 in broker warrant costs. The warrants are initially measured at fair value (Note 10) with residual proceeds being allocated to the common shares. Issuance costs have been allocated in the same proportion, with costs allocated to the warrant liability being expensed as incurred. The net proceeds were allocated as follows:

	Gross Proceeds		Issuance Costs

February 2, 2021, Financing
Common shares (APIC)	$	50,967,999	$	(4,534,434	)
Warrant liability (Note 10)		2,884,981		(256,666	)
Total	$	53,852,980	$	(4,791,100	)

viii. Shares issued on Acquisition

On March 2, 2022, the Company completed a business combination acquisition of NGW.

The Company acquired all of the NGW Shares for a total consideration of 21,361,002 common shares of the Company and NGW then amalgamated with Planet 13 (Note 20).

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PLANET 13 HOLDINGS INC.

Notes to the Interim Condensed Consolidated Financial Statements

(Unaudited, in United States Dollars, except share amounts)

10. Warrants

The following table summarizes the fair value of the warrant liability at September 30, 2022 and December 31, 2021.

	September 30,			December 31,
	2022			2021

Opening balance	$	7,206,049		$	13,204,211
Additions		-			2,884,981
Exercises		-			(8,976,258	)
Foreign exchange		(12,612	)		100,635
Change in fair value		(6,992,955	)		(7,520	)
Closing balance	$	200,482		$	7,206,049

The warrant liability is adjusted to fair value on the date the warrants are exercised and at the end of each reporting period. The amount that is reclassified to equity on the date of exercise is the fair value at that date.

The following table summarizes the number of warrants outstanding at September 30, 2022 and December 31, 2021.

	September 30, 2022			Weighted Average Exercise Price - CAD		December 31, 2021			Weighted Average Exercise Price - CAD

Balance - beginning of period		8,861,951		$	7.46		7,158,337		$	4.98
Issued		-		$	-		5,522,301		$	8.79
Exercised		-		$	-		(3,772,640	)	$	4.73
Expired		(728,347	)	$	3.97		(46,047	)	$	3.75
Balance - end of period		8,133,604		$	7.77		8,861,951		$	7.46

No warrants were exercised during the nine months ended September 30, 2022. The Company received cash proceeds of $14,093,793 (CAD$17,848,084) from the exercise of warrants during the year ended December 31, 2021.

Fair values

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. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs utilize data points that are observable such as quoted prices, interest rates and yield curves. Fair values determined by Level 3 inputs are unobservable data points for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. The fair value hierarchy requires the use of observable market inputs whenever such inputs exist. A financial instrument is classified to the lowest level of the hierarchy for which a significant input has been considered in measuring fair value.

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PLANET 13 HOLDINGS INC.

Notes to the Interim Condensed Consolidated Financial Statements

(Unaudited, in United States Dollars, except share amounts)

The following tables present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2022, and December 31, 2021:

	Quoted prices in active markets for identical asset (Level 1)			Total
September 30, 2022
Warrant liability	$	(200,482	)	$	(200,482	)

December 31, 2021
Warrant liability		(7,206,049	)		(7,206,049	)

11. Share Based Compensation

(a) Stock Options

The Company has established an incentive stock option plan (the “Plan”) for employees, management, directors, and consultants of the Company, as designated and administered by a committee of the Company’s Board of Directors. Under the Plan, the Company may grant options for up to 10% of the issued and outstanding common shares of the Company. The maximum term of an option is five years and the related vesting period runs from immediate to the life of the grant.

During the three and nine months ended September 30, 2022 and the year ended December 31, 2021

No incentive stock options were granted during the three and nine months ended September 30, 2022 or the year ended December 31, 2021. During the nine months ended September 30, 2022, the Company issued 1,106,925 options in exchange for all NGW options outstanding (Note 20), 97,325 options were exercised, and 386,250 options were forfeited or expired.

The following table summarizes information about stock options outstanding at September 30, 2022:

Expiry Date	Exercise price CAD$		September 30, 2022 Outstanding		September 30, 2022 Exercisable		December 31, 2021 Outstanding		December 31, 2021 Exercisable

July 4, 2022	$	2.65		-		-		100,000		100,000
June 11, 2023	$	0.80		61,668		61,668		61,668		61,668
June 30, 2024	$	2.60		7,500		7,500		7,500		7,500
November 21, 2024	$	1.31		185,203		185,203		-		-
February 27, 2025	$	1.31		51,525		51,525		-		-
July 6, 2025	$	1.31		97,325		97,325		-		-
December 15, 2025	$	3.06		269,075		269,075		-		-
September 30, 2026	$	4.37		120,222		120,222		-		-
				792,518		792,518		169,168		169,168

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PLANET 13 HOLDINGS INC.

Notes to the Interim Condensed Consolidated Financial Statements

(Unaudited, in United States Dollars, except share amounts)

The following table reflects the continuity of stock options for the period presented:

	September 30, 2022			Weighted Average Exercise Price - CAD		December 31, 2021			Weighted Average Exercise Price - CAD

Balance - beginning of period		169,168		$	2.01		293,838		$	1.52
Issued		1,106,925			2.58		-			-
Exercised		(97,325	)		1.31		(121,336	)		0.91
Expired		(386,250	)		3.11		(3,334	)		0.80
Balance - end of period		792,518		$	2.36		169,168		$	2.01

Share based compensation expense attributable to employee options was $nil and $3,104 for the nine months ended September 30, 2022, and 2021, respectively.

The total intrinsic value of options exercised, outstanding and exercisable as of September 30, 2022, was $58,363, $87,141 and $87,141, respectively.

The total intrinsic value of stock options exercised, outstanding and exercisable as of December 31, 2021, was $274,611, $238,010 and $238,010, respectively.

(b) Restricted Share Units

The Company has established a Restricted Share Unit incentive plan (the “RSU Plan”) for employees, management, directors, and consultants of the Company, as designated and administered by a committee of the Company’s Board of Directors. Under the RSU Plan, the Company may grant RSUs and/or options for up to 10% of the issued and outstanding common shares of the Company.

The following table summarizes the RSUs that are outstanding as at September 30, 2022 and December 31, 2021:

	September 30, 2022			December 31, 2021

Balance - beginning of period		2,591,929			1,764,250
Issued		-			4,086,178
Exercised		-			(3,126,534	)
Expired		-			(131,965	)
Cancelled		(18,000	)		-
Balance - end of period		2,573,929			2,591,929

The Company recognized $6,154,338 in share-based compensation expense attributable to the RSU vesting schedule for the nine months ended September 30, 2022 ($12,208,463 for the nine months ended September 30, 2021).

During the nine months ended September 30, 2022

No RSUs were granted, exercised or vested.

During the nine months ended September 30, 2021

On January 4, 2021, the Company issued 852,154 common shares to settle 852,154 RSUs that had vested. The Company did not receive any cash from this issuance.

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PLANET 13 HOLDINGS INC.

Notes to the Interim Condensed Consolidated Financial Statements

(Unaudited, in United States Dollars, except share amounts)

On April 19, 2021, the Company granted 4,082,474 RSUs to officers, directors, and employees pursuant to the Company’s RSU Plan. The RSUs granted vest in three equal tranches on November 1, 2021, November 1, 2022, and November 1, 2023, unless otherwise varied pursuant to the terms of the plan.

On June 10, 2021, the Company granted 3,704 RSUs to a consultant of the Company. Pursuant to the Company’s RSU Plan. The RSUs vested immediately and were exercised on June 10, 2021. The company issued 3,704 common shares on the exercise and did not receive any cash proceeds from the issuance.

12. Loss Per Share

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2022			2021			2022			2021

Loss available to common shareholders	$	(6,255,525	)	$	(2,741,675	)	$	(10,356,121	)	$	(14,320,822	)

Weighted average number of shares outstanding, basic and diluted		220,146,277			196,292,786			215,321,796			194,576,544

Basic and diluted loss per share	$	(0.03	)	$	(0.01	)	$	(0.05	)	$	(0.07	)

Approximately 11,500,051 and 13,979,446 of potentially dilutive securities for the three and nine months ended September 30, 2022 and 2021, respectively were excluded in the calculation of diluted EPS as their impact would have been anti-dilutive due to the net losses for such periods.

13. General and Administrative

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021

Salaries and wages	$	3,574,835	$	6,134,539	$	11,369,684	$	14,481,158
Share based compensation		2,037,764		6,613,846		6,154,338		12,211,567
Executive compensation		780,169		447,800		2,214,009		1,385,009
Licenses and permits		710,951		969,610		2,168,616		2,258,551
Payroll taxes and benefits’		929,679		931,950		2,990,456		2,380,171
Supplies and office expenses		258,468		621,642		758,924		1,562,832
Subcontractors		399,982		953,356		1,532,880		2,166,299
Professional fees (legal, audit and other)		947,922		938,028		4,458,370		2,842,599
Miscellaneous general and administrative expenses		1,670,185		2,214,376		5,160,422		4,897,499
	$	11,309,955	$	19,825,147	$	36,807,699	$	44,185,685

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PLANET 13 HOLDINGS INC.

Notes to the Interim Condensed Consolidated Financial Statements

(Unaudited, in United States Dollars, except share amounts)

14. Supplemental Cash Flow Information

	September 30,
Change in Working Capital	2022			2021

Accounts Receivable	$	1,363,675			(394,191	)
Inventory		3,831,613			(6,303,221	)
Prepaid Expenses and Other Assets		923,625			(3,620,412	)
Long-term Deposits and Other Assets		199,109			(12,376	)
Deferred Tax Assets		(43,617	)		-
Accounts Payable		(259,295	)		1,677,256
Accrued Expenses		(1,109,964	)		3,977,028
Income Taxes Payable		(1,104,371	)		(1,614,486	)
	$	3,800,775		$	(6,290,402	)

Cash Paid

Income Taxes	$	7,925,000		$	11,631,307
Interest	$	-		$	-

Non-cash Financing and Investing Activities

Initial Recognition of ROU Assets and Lease Liabilities	$	2,326,202		$	867,561
Fixed Asset Amounts in Accounts Payable	$	363,077		$	-
Warrant liability reclassified to APIC on settlement	$	-		$	8,955,993
Reclassification of long term lease liabilities to current	$	24,659		$	-
Early Termination of Operating Lease	$	371,381		$	-

15. Related Party Transactions and Balances

Related party transactions are summarized as follows:

a) Building Lease

The Company is the sub-lessee of approximately 2,000 square feet of office space and purchases certain printed marketing collateral and stationery items from a company previously owned by one of the Company’s Co-CEOs. Amounts paid for rent for the nine months ended September 30, 2022 and 2021 equaled $6,010 and $16,027, respectively. Amounts paid for printed marketing collateral and stationery items to the same company were $183,914 and $382,264 for the nine months ended September 30, 2022 and 2021, respectively.

The Company leased a cultivation facility from an entity owned by the Company’s Co-CEOs. Rent paid for this facility for the nine months ended September 30, 2022 and 2021 equaled $nil and $301,894, respectively. On April 30, 2021, the Company’s Co-CEOs sold this building to an arm’s length third party who assumed the lease.

(b) Other

A company previously owned by one of the Company’s executives pays the Company for storage space. Amounts paid to the Company for storage space equaled $nil and $122,447 for the nine months ended September 30, 2022 and 2021, respectively, and is recorded in other income.

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PLANET 13 HOLDINGS INC.

Notes to the Interim Condensed Consolidated Financial Statements

(Unaudited, in United States Dollars, except share amounts)

16. Commitments and Contingencies

(a) Construction Commitments

The Company had $1,509,641 of outstanding construction commitments as of September 30, 2022.

(b) Contingencies

The Company’s operations are subject to a variety of local and state regulations. Failure to comply with one or more of those regulations could result in fines, restrictions on its operations, or losses of permits that could result in the Company ceasing operations. While management of the Company believes that the Company is in compliance with applicable local and state regulations at September 30, 2022, medical and adult use cannabis regulations continue to evolve and are subject to differing interpretations. As a result, the Company may be subject to regulatory fines, penalties, or restrictions in the future.

(c) Claims and Litigation

From time to time, the Company may be involved in litigation relating to claims arising out of operations in the normal course of business. At September 30, 2022, and December 31, 2021, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of the Company’s operations. There are also no proceedings in which any of the Company’s directors, officers or affiliates is an adverse party or has a material interest adverse to the Company’s interest.

(d) Operating Licenses

Although the possession, cultivation, and distribution of marijuana for medical and adult use is permitted in Nevada and California, marijuana is a Schedule-I controlled substance and its use remains a violation of federal law. Since federal law criminalizing the use of marijuana pre-empts state laws that legalize its use, strict enforcement of federal law regarding marijuana would likely result in the Company’s inability to proceed with our business plans. In addition, the Company’s assets, including real property, cash, equipment, and other goods, could be subject to asset forfeiture because marijuana is still federally illegal.

17. Risks

Credit risk

Credit risk is the risk that a third party might fail to discharge its obligations under the terms of a financial instrument. Credit risk arises from cash with banks and financial institutions. It is management’s opinion that the Company is not exposed to significant credit risk arising from these financial instruments. The Company limits credit risk by entering into business arrangements with high credit-quality counterparties.

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.

Concentration risk

The Company operates exclusively in Southern Nevada and Southern California. Should economic conditions deteriorate within that region, its results of operations and financial position would be negatively impacted.

Banking risk

Notwithstanding that a majority of states have legalized medical marijuana, there has been no change in US federal banking laws related to the deposit and holding of funds derived from activities related to the marijuana industry. Given that US federal law provides that the production and possession of cannabis is illegal, there is a strong argument that banks cannot accept or deposit funds from businesses involved with the marijuana industry. Consequently, businesses involved in the marijuana industry often have difficulty accessing the US banking system and traditional financing sources. The inability to open bank accounts with certain institutions may make it difficult to operate the business of the Company and leave the Company’s cash holdings vulnerable.

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PLANET 13 HOLDINGS INC.

Notes to the Interim Condensed Consolidated Financial Statements

(Unaudited, in United States Dollars, except share amounts)

Asset forfeiture risk

Because the cannabis industry remains illegal under US federal law, any property owned by participants in the cannabis industry which are either used in the course of conducting such business, or are the proceeds of such business, could be subject to seizure by law enforcement and subsequent civil asset forfeiture. Even if the owner of the property was never charged with a crime, the property in question could still be seized and subject to an administrative proceeding by which with minimal due process, it could be subject to forfeiture.

Currency rate risk

As at September 30, 2022, a portion of the Company’s financial assets and liabilities held in Canadian dollars consist of cash of $311,998 (2021 - $1,621,021). 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 is exposed to currency rate risk in other comprehensive income, relating to foreign subsidiaries which operate in a foreign 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.

18. Disaggregated Revenue

The following table presents the Company’s disaggregated revenue by sales channel:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021

Retail	$	19,714,983	$	31,691,248	$	69,660,303	$	87,304,231
Wholesale		5,908,234		1,261,006		10,069,539		2,307,819

Net revenues	$	25,623,217	$	32,952,254	$	79,729,842	$	89,612,050

19. COVID-19

In March 2020, the World Health Organization declared coronavirus COVID-19 a global pandemic. The outbreak of this contagious disease and its subsequent variants, along with the related adverse public health developments, have negatively affected workforces, economies, and financial markets on a global scale. Currently, the Company is closely monitoring the impact of the pandemic on all aspects of its business and it is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on the Company’s business or results of operations.

20. Next Green Wave Acquisition

On March 2, 2022 (the “Closing Date”), the Company completed a business combination acquisition of NGW. The Company entered into an arrangement agreement (the “Arrangement Agreement”) with NGW on December 20, 2021 pursuant to which Planet 13 agreed to acquire (the “Arrangement”) all of the issued and outstanding common shares of NGW (the “NGW Shares”) pursuant to a plan of arrangement (the “Plan of Arrangement”) under the Business Corporations Act (British Columbia). The Arrangement was approved by the holders of NGW Shares (the “NGW Shareholders”) at a special meeting of NGW Shareholders held on February 25, 2022 and approved by the Supreme Court of British Columbia on March 1, 2022.

Pursuant to the Plan of Arrangement, on March 2, 2022, the Company acquired all of the NGW Shares for a total consideration of 21,361,002 common shares of the Company and NGW then amalgamated with Planet 13. The NGW Shareholders received 0.1145 of one Planet 13 Share (the “Exchange Ratio”) and a nominal cash payment of C$0.0001 for each NGW Share held immediately prior to the Effective Time. As a result, 21,361,002 Planet 13 Shares and $14,788 in cash were issued in exchange for the NGW Shares. In addition, the number of Planet 13 Shares issued to any person pursuant to the Arrangement was rounded down to the nearest whole Planet 13 Share, with a cash consideration paid in lieu of the issuance of such fractional Planet 13 Share of C$3.36 per share.

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PLANET 13 HOLDINGS INC.

Notes to the Interim Condensed Consolidated Financial Statements

(Unaudited, in United States Dollars, except share amounts)

Based upon the Exchange Ratio, all NGW options to acquire NGW Shares that were outstanding immediately prior to the Effective Time were also exchanged for Planet 13 options that will entitle the holders to receive, upon exercise thereof, Planet 13 Shares. As a result, the Company issued 1,106,925 options in exchange for the NGW options.

The NGW acquisition was accounted for as a stock purchase acquisition as NGW was deemed to be a business under ASC 805 Business Combinations and the Company is in the process of obtaining a third-party purchase price allocation analysis related to this acquisition. In the interim, the following table summarizes the initial allocation of consideration exchanged to the estimated fair value of identifiable intangible assets acquired assumed:

Consideration paid:

Cash	$	14,788
Issuance of 21,361,002 Common Shares		56,656,905
Issuance of 1,106,925 replacement options		1,239,818
	$	57,911,511

Fair value of net assets acquired:

Cash	$	1,493,922
Inventory		3,077,367
Accounts Receivable		1,374,142
Other current assets		156,860
Property, plant and equipment, net of accumulated depreciation		16,229,350
Intangible assets		18,340,000
Goodwill		17,583,460
Accounts Payable and Accrued Liabilities		(218,145	)
Income Taxes Payable		(125,445	)
	$	57,911,511

The Company acquired NGW in order to become vertically integrated in California and to create a pathway to introduce it Nevada-based brands into the market. NGW’s post-acquisition revenues, gross profit and net income (loss) included in the Company’s results for the three months ended September 30, 2022 were $3,245,231, $(83,236) and $(96,257), respectively, and NGW’s post-acquisition results for the nine months ended September 30, 2022 were $6,506,529, $7,627 and $(37,555). The following table reflects the revenue, gross profit and comprehensive income (loss) that would have been reported if the acquisition had occurred at the beginning of the periods indicated:

	Three Months Ended September 30, 2022								Three Months Ended September 30, 2021
	As Reported			NGW		Pro Forma			As Reported			NGW		Pro Forma

Revenue, net of discounts	$	25,623,217		$	-	$	25,623,217		$	32,952,254		$	4,294,386	$	37,246,640

Gross Profit		10,558,901			-		10,558,901			17,717,134			2,081,192		19,798,326

Comprehensive income (loss) for the period		(6,255,525	)		-		(6,255,525	)		(2,732,461	)		1,436,158		(1,296,303	)

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PLANET 13 HOLDINGS INC.

Notes to the Interim Condensed Consolidated Financial Statements

(Unaudited, in United States Dollars, except share amounts)

	Nine Months Ended September 30, 2022									Nine Months Ended September 30, 2021
	As Reported			NGW			Pro Forma			As Reported			NGW		Pro Forma

Revenue, net of discounts	$	79,729,842		$	870,651		$	80,600,493		$	89,612,050		$	12,712,607	$	102,324,657

Gross Profit		37,284,412			(131,700	)		37,152,712			49,784,174			6,340,159		56,124,333

Comprehensive income (loss) for the period		(10,356,121	)		(868,125	)		(11,224,246	)		(14,320,822	)		2,501,056		(11,819,766	)

The NGW cannabis licenses acquired have an indefinite life and as such will not be subject to amortization. The ultimate amount of goodwill and other intangible assets resulting from the third-party purchase price allocation analysis will be assessed for impairment on at least an annual basis. The Company does not expect that any of the goodwill of other identified intangible assets will be deductible for tax purposes.

21. Subsequent Events

On October 4, 2022, we received notice from the Nevada Cannabis Compliance Board that our conditional distribution license had been transferred from our subsidiary MM Development Company, Inc. to the buyer, pursuant to an April 22, 2022 purchase and sale agreement. The transaction is pending further closing conditions before our receipt of the $125,000 escrowed funds. The license transfer and eventual closing will have no impact on our sales or ability to operate in Nevada.

On October 14, 2022, the Company, through its wholly owned subsidiary, Planet 13 Chicago, LLC, entered into a $2,500,000 real property purchase agreement for a proposed dispensing location in Waukegan, Illinois, for an approximately 8,000 square foot building on 1.9 acres, previously occupied by a financial institution tenant. The Company’s obligation to close on the transaction is conditioned upon obtaining local jurisdiction zoning and land-use approvals, completion of customary due diligence, and that the current non-occupying tenant terminate their lease at the property. On November 1, 2022, the Company provided notice of this site selection to the Illinois cannabis regulator.

On November 1, 2022, the Company issued 81,084 common shares on the vesting of RSUs. The Company did not receive any cash proceeds on the issuance.

On November 1, 2022, 32,417 previously issued RSUs expired unexercised.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

This management’s discussion and analysis (“MD&A”) of the financial condition and results of operations of Planet 13 is for the three and nine months ended September 30, 2022. It is supplemental to, and should be read in conjunction with, our unaudited condensed interim consolidated financial statements and the accompanying notes presented herein. Our financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Financial information presented in this MD&A is presented in United States dollars (“$”, “USD” or “US$”), unless otherwise indicated.

This MD&A contains certain “forward-looking statements” and certain “forward-looking information” as defined under applicable United States securities laws. Please refer to the discussion of forward-looking statements and information set out under the heading “Disclosure Regarding Forward-Looking Statements,” identified in this Quarterly Report on Form 10-Q. As a result of many factors, our actual results may differ materially from those anticipated in these forward-looking statements and information.

Overview of the Company

We are a multi-state cannabis operator with licenses to operate in Nevada, California, and Florida, and a conditional dispensing license in Illinois. We are headquartered in Las Vegas, Nevada, at our superstore dispensary located adjacent to the Las Vegas Strip. A detailed description of our corporate history and our business can be found in our Annual Report on Form 10-K for the year ended December 31, 2021.

As of September 30, 2022, we employed approximately 600 people and remain focused on providing our customers with the best products, best services, and an experiential shopping experience at our superstore-themed dispensaries, while expanding our products and sales through neighborhood stores. Each of our state operations is held in state-focused subsidiaries: (a) Newtonian Principles, Inc. for California licensed cannabis dispensing and distribution activities, (b) Next Green Wave, LLC for California licensed cannabis cultivation and production activities, (c) MM Development Company, Inc. for all licensed Nevada cannabis cultivation, production, distribution, and dispensing, (d) Planet 13 Florida, Inc. (“Planet 13 Florida”) which holds our Florida Medical Marijuana Treatment Center (“MMTC”) license, and (e) a 49% minority interest in Planet 13 Illinois, LLC (“Planet 13 Illinois”) which, as of July 22, 2022, holds a conditional Illinois social-equity justice impaired dispensing license. We have focused on our large-store dispensing stores as superstores which offer an experiential approach to our customers, including drones, robotics, 3-D mapping projection, cannabis-culture inspired social-media backdrops for customer interaction, customer facing production, one-on-one sales staffing and customer education, and other interactive marketing elements to differentiate from more traditional dispensing locations, which we refer to herein as “neighborhood stores”. Each of our cannabis facilities is state-licensed as an adult-use cannabis facility, a medical cannabis facility, or a dual-use facility allowing for both adult-use and medical cannabis licensed activity, as designated below in the state-by-state breakdown.

Nevada

As of September 30, 2022, we held the following licensed operations in Nevada: (a) one dual-licensed dispensary superstore adjacent to the Las Vegas Strip with 24,000 square feet of licensed dispensary (the “Planet 13 Las Vegas Superstore”), (b) one adult-use “neighborhood store” at 2,300 square feet of licensed dispensary (the “Medizin dispensary”), (c) three dual-licensed production facilities, one of which is co-located and customer-facing at the superstore in Las Vegas with 18,500 square feet of licensed production, (d) three dual-licensed cultivation facilities, one with approximately 16,100 square foot indoor cultivation facility under perpetual harvest cycle, a second with 45,000 square feet co-located with our production license at that facility, and a small-indoor rural site in Beatty, Nevada that is expandable up to 2,300,000 square feet of greenhouse located on 80-acres owned by us, also co-located with our production license at that facility, and (e) one cannabis distribution license.

At the Planet 13 Las Vegas Superstore, we also offer ancillary services to our customers, including a restaurant with a liquor license, a retail store, and our online cannabidiol (“CBD”) store which also sells products in our facility.

California

As of September 30, 2022, we held the following licensed operations in California: (a) an adult-use dispensary superstore co-located with a distribution license at our 33,000 square foot facility in Santa Ana which we built and opened on July 1, 2021 (the “Planet 13 OC Superstore”), (b) following the closing of our Plan of Arrangement with Next Green Wave Holdings Inc. (“NGW”) on March 2, 2022, as more fully discussed in Acquisitions below, one dual-use and two adult-use cultivation licenses along with a nursery license and distribution license at our 35,000 square foot cultivation facility, and one Type P production license at a 4,000 square foot facility. As of May 5, 2022, we received notification that our application to enhance the Type P production license to Type 6 non-volatile extraction license had been approved by the California Department of Cannabis Control (“DCC”), to produce our existing product lines, including gummies, concentrates, chocolates, and beverages and distribute them for wholesale sales in California. Further, on July 12, 2022, the DCC granted to NGW a cultivation processing license to trim, cure, dry, grade, package, and label the cannabis grown at NGW facilities.

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Florida

As of September 30, 2022, we are continuing capital outlays to utilize our Florida MMTC license issued by the Florida Department of Health that was acquired by our wholly owned subsidiary, Planet 13 Florida Inc., on October 1, 2021 for $55 million in cash. Licensed MMTCs are vertically integrated and the only businesses in Florida authorized to dispense medical marijuana cannabis to qualified patients and caregivers. MMTCs are authorized to cultivate, process, transport and dispense medical marijuana. As of September 30, 2022 there were 22 companies with MMTC licenses in Florida, many of which are not yet operational. License holders are not subject to restrictions on the number of dispensaries that may be opened or on the number or size of cultivation and processing facilities they may operate.

On July 1, 2022, we, through our subsidiary Planet 13 Florida, Inc., closed on a $3,300,000 USD purchase of a 23-acre parcel of real property, inclusive of a 10,500 square foot building, near Ocala, Florida. The property was previously leased by Planet 13 Florida, Inc., and has received Florida OMMU approvals for cultivation, processing, and dispensing activities.

As part of our Florida expansion, as of the date of this report, we have entered into three leases for dispensing locations in Florida, which remain subject to completion of tenant improvements and regulatory inspection prior to sales to customers.

Illinois

On August 5, 2021, Planet 13 Illinois, in which entity we hold a minority interest, won a Conditional Adult Use Dispensing Organization License in the Chicago-Naperville-Elgin region from the Illinois Department of Financial and Professional Regulation. The conditional license was issued to Planet 13 Illinois on July 22, 2022. We own 49% of Planet 13 Illinois and 51% is owned by Frank Cowan.

On August 5, 2022, we entered into an option purchase agreement that gives the us the option to purchase 51% of Planet 13 Illinois that it does not already own from Frank Cowan for $866,250 in cash and 1,063,377 common shares of the Company. The option is exercisable at our discretion for a period of two years.

On October 14, 2022, the Company, through its wholly owned subsidiary Planet 13 Chicago, LLC, entered into a $2,500,000 real property purchase agreement for a proposed dispensing location in Waukegan, Illinois, for an approximately 8,000 square foot building on 1.9 acres, previously occupied by a financial institution tenant. The Company’s obligation to close on the transaction is conditioned upon obtaining local jurisdiction zoning and land-use approvals, completion of customary due diligence, and that the current non-occupying tenant terminate their lease at the property. On November 1, 2022, the Company provided notice of this site selection to the Illinois cannabis regulator.

COVID-19 Pandemic Update for Third Quarter 2022

Starting on February 10, 2022, COVID-19 protocols in Nevada no longer include mask mandates in Clark and Nye County, where we have operations, for all individuals within public indoor settings.

On March 1, 2022, the State of California changed mask requirements arising under the general industry safety order by Cal/OSHA, with a strong recommendation that masks were required statewide for unvaccinated individuals in indoor public settings and workplaces, as opposed to the previous requirement for mask use by unvaccinated individuals.

These policies have continued through the date of this report.

We caution that current global uncertainty with respect to the spread of COVID-19 or its variants and its effect on the broader global economy may have a significant negative effect on us. As reflected in this MD&A, the COVID-19 pandemic has had a negative effect on our business. While the continued impact of COVID-19 on us remains unknown, continued spread of COVID-19 or its variants may have a material adverse effect on global economic activity and can, and in some cases, has resulted in volatility and disruption to global supply chains, operations, mobility of people and the financial markets, which could and may continue to affect interest rates, credit ratings, credit risk, inflation, business, financial conditions, results of operations and other factors relevant to us. Long-term economic impacts relating to COVID-19 and state and national fiscal policy related to combatting the economic impacts of COVID-19 may have a long-term detrimental impact on customer spending, costs of customer acquisition, and may be a driver for rapid inflation which could negatively affect our customers’ discretionary spending capability or increase our materials and labor costs in future periods.

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Acquisitions

On March 2, 2022 (the “Closing Date”), we completed our acquisition of NGW. We entered into an arrangement agreement (the “Arrangement Agreement”) with NGW on December 20, 2021, pursuant to which we agreed to acquire (the “Arrangement”) all of the issued and outstanding common shares of NGW (the “NGW Shares”) pursuant to a plan of arrangement (the “Plan of Arrangement”) under the Business Corporations Act (British Columbia). The Arrangement was approved by the holders of NGW Shares (the “NGW Shareholders”) at a special meeting of NGW Shareholders held on February 25, 2022, and approved by the Supreme Court of British Columbia on March 1, 2022.

Pursuant to the Plan of Arrangement, at 12:01 a.m. (Vancouver time) (the “Effective Time”) on the Closing Date, we acquired all of the NGW Shares for a total consideration of approximately C$71,791,700 (based on the closing price of our Common Shares (the “Planet 13 Shares”) on the Canadian Securities Exchange on February 28, 2022), and NGW then amalgamated with us. The NGW Shareholders received 0.1145 of one Planet 13 Share (the “Exchange Ratio”) and a nominal cash payment of C$0.0001 for each NGW Share held immediately prior to the Effective Time. As a result, 21,361,002 Planet 13 Shares and $14,788 in cash were issued in exchange for the NGW Shares. In addition, the number of Planet 13 Shares issued to any person pursuant to the Arrangement was rounded down to the nearest whole Planet 13 Share, with a cash consideration paid in lieu of the issuance of such fractional Planet 13 Share of C$3.379 per share.

Based upon the Exchange Ratio, all NGW options to acquire NGW Shares that were outstanding immediately prior to the Effective Time were also exchanged for our options that will entitle the holders to receive, upon exercise thereof, Planet 13 Shares. As a result, we issued 1,106,925 options in exchange for the NGW options.

Results of Operations

*Expressed in USD$*	Three Months Ended
	September 30, 2022			September 30, 2021			Percentage Change
Revenue
Net revenue		25,623,217			32,952,254			(22.2	)%
Cost of Goods Sold		(15,064,315	)		(15,208,926	)		(1.0	)%
Gross Profit		10,558,902			17,743,328			(40.5	)%
Gross Profit Margin %		41.2	%		53.8	%

Expenses
General and Administrative		11,309,955			19,825,147			(43.0	)%
Sales and Marketing		938,269			1,959,579			(52.1	)%
Lease expense		723,955			673,880			7.4	%
Depreciation and Amortization		1,978,403			1,376,521			43.7	%

Total Expenses		14,950,582			23,835,127			(37.3	)%

Loss From Operations		(4,391,680	)		(6,091,799	)		(27.9	)%

Other Income (Expense):
Interest income (expense), net		121,285			(6,996	)		(1,833.6	)%
Foreign exchange gain (loss)		(1,834	)		79,688			114.0	%
Transaction costs		-			-		-		%
Change in fair value of warrants		197,721			6,522,787			(99.6	)%
Other income (expense)		41,487			152,466			(72.8	)%
Total Other Income (Expense)		358,659			6,747,945			(94.7	)%

Income (loss) for the period before tax		(4,033,021	)		656,146			(714.7	)%
Provision for income tax (current and deferred)		2,222,504			3,397,821			(34.6	)%
Loss for the period		(6,255,525	)		(2,741,675	)		128.2	%

Loss per share for the period
Basic and fully diluted loss per share	$	(0.03	)	$	(0.01	)

Weighted Average Number of Shares Outstanding
Basic and diluted		220,146,277			196,292,786

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*Expressed in USD$*	Nine Months Ended
	September 30, 2022			September 30, 2021			Percentage Change
Revenue
Net revenue		79,729,842			89,612,050			(11.0	)%
Cost of Goods Sold		(42,445,429	)		(39,827,876	)		6.6	%
Gross Profit		37,284,413			49,784.174			(25.1	)%
Gross Profit Margin %		46.8	%		55.6	%

Expenses
General and Administrative		36,807,699			44,185,685			(16.7	)%
Sales and Marketing		2,428,947			4,162,934			(41.7	)%
Lease expense		1,984,252			1,934,138			2.6	%
Depreciation and Amortization		5,982,392			3,325,524			79.9	%

Total Expenses		47,203,290			53,608,281			(11.9	)%

Loss From Operations		(9,918,877	)		(3,824,107	)		159.4	%

Other Income (Expense):
Interest income (expense), net		193,896			(23,698	)		(918.2	)%
Foreign exchange gain (loss)		(23,000	)		1,805,953			(91.7	)%
Transaction costs		-			(256,666	)		n/a
Change in fair value of warrants		6,992,955			(2,728,386	)		(350.0	)%
Other income		270,254			338,890			(20.3	)%
Total Other Income (Expense)		7,434,105			(863,907	)		(960.5	)%

Loss for the period before tax		(2,484,772	)		(4,688,014	)		(47.0	)%
Provision for income tax (current and deferred)		7,871,349			9,632,808			(18.3	)%
Loss for the period		(10,356,121	)		(14,320,822	)		(27.7	)%

Loss per share for the period
Basic and fully diluted loss per share	$	(0.05	)	$	(0.07	)

Weighted Average Number of Shares Outstanding
Basic and diluted		215,321,796			194,576,544

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We experienced a 22.2% decrease in net revenue during the three months ended September 30, 2022, and a 11.0% decrease for the nine months ended September 30, 2022, when compared to the three and nine months ended September 30, 2021. The decrease is attributable to a reduction in the number of customers at our Planet 13 Las Vegas Superstore location compared to the prior year periods, partially offset by an increase of revenue from the Planet 13 OC Superstore and the addition of wholesale revenue from the NGW cultivation operations in California, and an increase in net wholesale revenue. Overall, net revenue decreased by ($7,329,037) or (22.2%) during the three months ended September 30, 2022, decreased by ($9,882,208) or (11.0%) during the nine months ended September 30, 2022, when compared to the nine months ended September 30, 2021. The potential recession and increase in inflation, including the increase in the price of gasoline and the increase in interest rates, combined to reduce the disposable income of our customers during the nine months ended September 30, 2022, and also had an impact on the number of customers and tourists visiting the Planet 13 Las Vegas Superstore and our other retail locations during both the three and nine months ended September 30, 2022.

Details of net revenue by product category are as follows:

	Three Months Ended
	September 30, 2022		September 30, 2021		Percentage Change
Flower	$	9,203,668	$	15,797,957		(41.7	)%
Concentrates		7,064,277		8,896,194		(20.6	)%
Edibles		4,140,211		5,197,188		(20.3	)%
Topicals and Other Revenue		1,467,792		1,947,811		(24.6	)%
Wholesale		3,747,269		1,113,104		236.7	%
Net revenue	$	25,623,217	$	32,952,254		(22.2	)%

	Nine Months Ended
	September 30, 2022		September 30, 2021		Percentage Change
Flower	$	28,036,203	$	46,400,764		(39.6	)%
Concentrates		22,406,354		22,365,768		0.2	%
Edibles		14,119,412		12,596,942		12.1	%
Topicals and Other Revenue		5,145,228		4,858,491		5.9	%
Wholesale		10,022,645		3,390,085		195.6	%
Net revenue	$	79,729,842	$	89,612,050		(11.0	)%

Gross profit margin for the three months ended September 30, 2022 was 41.2% compared to 53.8% for the three months ended September 30, 2021 and was 46.8% for the nine months ended September 30, 2022 compared to 55.6% for the nine months ended September 30, 2021. The decrease in gross profit margin for the three and nine months ended September 30, 2022 was a result of increased sales incentives during the period coupled with the increase in wholesale revenue, both from our Nevada wholesale business and from the recently acquired NGW cultivation assets in California, that has an inherently lower gross margin than retail sales revenue.

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The costs of internal cultivation have continued to trend down as we continue to improve our yields and cultivation efficiency across all of our cultivation facilities. In addition, margin enhancement through the creation of internally generated brands, such as TRENDI, Leaf & Vine, HaHa Gummies, Dreamland Chocolate, HaHa Beverages and Medizin, continued to have a positive impact on gross margins during the three and nine months ended September 30, 2022, helping offset the lower margins received on the sale of wholesale product and sales to local customers in the State of Nevada. We anticipate that margins will trend upward as tourist customers return to Las Vegas and the Planet 13 Las Vegas Superstore in greater numbers and through our ability to produce our award-winning brands in California and introduce those brands into our Planet 13 OC Superstore along with the recent introduction of NGW premium flower to the Planet 13 OC Superstore.

Our premium cultivation facilities were operating near capacity during the three and nine months ended September 30, 2022, and September 30, 2021, respectively. The amount of cannabis grown during the period increased significantly when compared to the prior year period due to the addition of the 35,000 square feet of cultivation capacity that was added as part of the NGW acquisition on March 2, 2022, and the September 26, 2022 initial planting in our substantially completed 22,000 square foot cultivation facility expansion in Nevada. The wholesale flower market in California came under pressure due to excess supply of flower and biomass from the harvest of outdoor crops during the November 2021 to March 2022 period. Wholesale flower prices experienced significant decline during this period, impacting gross margins and revenue at our NGW cultivation facility during the period. The supply of wholesale flower in California appears to be stabilizing and we have seen increases in both demand and the price received for premium indoor grown flower from late April through the end of October 2022.

Overall gross margin was $10,558,902 and $17,743,328 for the three months ended September 30, 2022, and 2021 respectively, a decrease of 40.5%, and was $37,284,413 and $49,784,174 for the nine months ended September 30, 2022, a decrease of 25.1%.

General and Administrative (“G&A”) expenses (which includes non-cash share-based compensation expenses,) decreased by 43.0% during the three months ended September 30, 2022, when compared to the three months ended September 30, 2021. The decrease in G&A expenses incurred during the three months ended September 30, 2022, was a result of focused cost cutting initiatives undertaken by the Company and a reduction in share-based compensation expense recorded during the period, partially offset by the addition of G&A expenses from the recently acquired NGW cultivation assets in California. G&A costs for the nine months ended September 30, 2022, decreased by 16.7% or $7,377,986 as a result of focused cost cutting initiatives undertaken by the Company and a reduction in share-based compensation expense recorded during the period, partially offset by the addition of G&A expenses from the recently acquired NGW cultivation assets in California, a full nine months of operations at our P13 OC Superstore compared with only three months in the prior year period, as well as increased expenditures related to corporate initiatives (registration of the class of our Common Shares through filing a Form 10 registration statement with the SEC and merger and acquisition related fees incurred on the closing of the NGW acquisition) that were expensed during the nine months ended September 30, 2022 when compared to the prior year period. Overall, excluding non-cash share-based compensation expenses, G&A expenses as a percentage of revenue equaled 36.2% for the three months ended September 30, 2022, compared to 40.1% for the three months ended September 30, 2021. And was 38.4% and 35.7% for the nine months ended September 30, 2022, and the nine months ended September 30, 2021. The increase in G&A as a percentage of revenue for the nine months ended September 30, 2022, was a direct result of the addition of one time legal and other professional fees associated with the acquisition of NGW and the Company becoming a US Domestic through the filing of a Form 10 registration statement in February 2022.

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A detailed breakdown of G&A expenses is as follows:

	Three Months Ended
	September 30, 2022		September 30, 2021		Percentage change

Salaries and wages	$	3,574,835	$	6,134,539		(41.7	)%
Executive compensation		780,169		447,800		74.2	%
Licenses and permits		710,951		969,610		(26.7	)%
Payroll taxes and benefits		929,679		931,950		(0.2	)%
Supplies and office expenses		258,468		621,642		(58.4	)%
Subcontractors		399,982		953,356		(58.0	)%
Professional fees (legal, audit and other)		947,922		938,028		1.1	%
Miscellaneous general and administrative expenses		1,670,185		2,214,376		(24.6	)%
Share-based compensation expense		2,037,764		6,613,846		(69.2	)%
	$	11,309,955	$	19,825,147		(43.0	)%

	Nine Months Ended
	September 30, 2022		September 30, 2021		Percentage change

Salaries and wages	$	11,369,684	$	14,481,158		(21.5	)%
Executive compensation		2,214,009		1,385,009		59.9	%
Licenses and permits		2,168,616		2,258,551		(4.0	)%
Payroll taxes and benefits		2,990,456		2,380,171		25.6	)%
Supplies and office expenses		758,924		1,562,832		(51.4	)%
Subcontractors		1,532,880		2,166,299		(29.2	)%
Professional fees (legal, audit and other)		4,458,370		2,842,599		56.8	%
Miscellaneous general and administrative expenses		5,160,422		4,897,499		5.4	%
Share-based compensation expense		6,154,338		12,211,567		(49.6	)%
	$	36,807,699	$	44,185,685		(16.7	)%

Non-cash, share based compensation of $2,037,764 was recognized during the three months ended September 30, 2022, decreasing from $6,613,846 incurred during the three months ended September 30, 2021. For the nine months ended September 30, 2022, non-cash share-based compensation expense was $6,154,338, a decrease of 49.6% over the $12,211,567 recognized during the nine months ended September 30, 2021. The decrease in both the three- and nine-month periods can be attributable to the vesting schedule for both Restricted Share Units (“RSUs”) and incentive stock options that were previously granted, particularly the net 3,954,213 RSUs that were granted on April 18, 2021, that vest 1/3 on December 1, 2021, and 1/3 on the first and second anniversary of the first vesting date. These amounts are non-cash, and the expense is recognized in accordance with the vesting schedule of the underlying stock options and RSUs. See Note 12 to our audited consolidated financial statements filed with our Annual Report on Form 10-K for the year ended December 31, 2021, for additional details on the assumptions used to calculate fair value as well as information regarding the vesting of the various components of the non-cash share-based compensation.

Sales and marketing expenses decreased by 52.1% during the three months ended September 30, 2022, and by 41.7% for the nine months ended September 30, 2022, when compared to the three and nine months ended September 30, 2021. The decrease during both the three- and nine-month periods was a result of us continuing to refine our marketing efforts to optimize marketing spend on initiatives that drive increased customer traffic to the Planet 13 Las Vegas Superstore and the Planet 13 OC Superstore and our Medizin dispensary in Nevada.

Lease expense increased by 7.4% during the three months ended September 30, 2022, when compared to the three months ended September 30, 2021 due to increases in contracted lease rates on the Company’s leased properties during the period. Lease expense for the nine months ended September 30, 2022, increased by 2.6% compared to the nine months ended September 30, 2021, due to a financial incentive from the landlord of the Planet 13 OC Superstore received during the period which offset increases in contractual lease rates. We are amortizing the financial incentive benefit received over the remaining life of the lease.

Depreciation and Amortization increased 43.7% during the three months ended September 30, 2022, when compared to the prior year period because of the recording of depreciation on the NGW cultivation facility during the period as well as depreciation from the Planet 13 OC Superstore location, both of which were not owned/open during the prior year comparative period. For the nine months ended September 30, 2022, depreciation and amortization increased 79.9% when compared to the prior year period because of the recording of depreciation on the NGW cultivation facility during the period as well as depreciation from the Planet 13 OC Superstore location.

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Interest income was $121,285 earned during the three months ended September 30, 2022, compared to interest expense of $6,996 during the three months ended September 30, 2021, (interest income of $193,896 for the nine months ended September 31, 2022, compared to interest expense of $23,698 during the nine months ended September 30, 2021). The interest expense relates to accrued interest on our long-term debt that is due and payable on demand offset by interest income earned on cash deposits. The balance of long-term debt as of September 30, 2022, was $884,000 compared to $884,000 as of December 31, 2021.

We conduct our operations in both United States dollars and Canadian dollars, holding financial assets and incurring expenses in both currencies. On December 31, 2021, the value of the USD was USD$1.00=CAD$1.2678 compared to the value of the USD of USD$1.00=CAD$1.3707 at September 30, 2022 and averaged USD$1.00=CAD$1.2828 during the nine months ended September 30, 2022, resulting in our realizing a foreign exchange loss of $1,834 during the three months ended September 30, 2022 compared to a foreign exchange gain of $79,688 during the three months ended September 30, 2021. (Foreign exchange loss of $23,000 for the nine months ended September 30, 2022, compared to a gain of $1,805,953 for the nine months ended September 30, 2021). It is our policy not to hedge our CAD exposure.

Warrants are accounted for in accordance with the applicable authoritative accounting guidance in ASC Topic 815, Derivatives and Hedging - Contracts in Entity’s Own Equity (“ASC 815”), as derivative liabilities based on the specific terms of the warrant agreements. Liability-classified instruments are recorded at fair value at each reporting period with any change in fair value recognized as a component of change in fair value of derivative liabilities in the consolidated statements of operations and comprehensive loss. Transaction costs allocated to warrants that are presented as a liability are expensed immediately within other expenses (income) in the statements of net loss and comprehensive loss. During the three months ended September 30, 2022, the change in fair value of the warrants resulted in a gain of $197,721 (gain of $6,992,955 during the nine months ended September 30, 2022) compared to a gain of $6,522,787 for the three months ended September 30, 2021 (a loss of ($2,728,386) for the nine months ended September 30, 2021).

Other income (expense), consisting of Automated Teller Machine (“ATM”) fees, interest and other miscellaneous income/expense was income of $41,487 for the three months ended September 30, 2022, compared to other income of $152,466 for the three months ended September 30, 2021. Other income for the nine months ended September 30, 2022, was $270,254 compared to other income of $338,890 for the nine months ended September 30, 2021.

Transaction costs related to the issuance of warrants of $0 were incurred during the three and nine months ended September 30, 2022, compared to transaction costs of $0 and $256,666 during the three months and nine months ended September 30, 2021, respectfully. The transaction costs represent a portion of the issuance costs that were allocated to the issuance of warrants as part of the bought deal equity financing that was completed in February 2021.

The income tax expense for the three months ended September 30, 2022, was $2,222,504 compared to $3,397,821 for the prior year period. The tax expense decreased due to the decrease in taxable profitability during the three months ended September 30, 2022, when compared to the three months ended September 30, 2021. Income tax expense for the nine months ended September 30, 2022, was $7,871,349 compared to income tax expense of $9,632,808 for the nine months ended September 30, 2021. The tax expense decreased due to the decrease in taxable profitability during the nine months ended September 30, 2022, when compared to the nine months ended September 30, 2021. We are subject to Section 280E of the Internal Revenue Code (the “Code”), which prohibits businesses from taking deductions or credits in carrying on any trade or business consisting of trafficking in certain controlled substances that are prohibited by federal law. We, to the extent of our “trafficking” activities, and/or key contract counterparties directly engaged in trafficking in cannabis, have incurred significant tax liabilities from the application of Section 280E. Our income tax obligations under Section 280E of the Code are typically substantially higher as compared to companies to which Section 280E does not apply. Section 280E essentially requires us to pay federal, and as applicable, state income taxes on gross profit, which presents a significant financial burden that increases our net loss and may make it more difficult for us to generate net profit and cash flow from operations in future periods. In addition, to the extent that the application of Section 280E creates a financial burden on contract counterparties, such burdens may impact the ability of such counterparties to make full or timely payment to us, which would also have a material adverse effect on our business.

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The overall net loss for the three months ended September 30, 2022, was $6,255,525 (($0.03) per share) compared to an overall net loss of $2,741,675 (($0.01) per share) for the three months ended September 30, 2021. The overall net loss for the nine months ended September 30, 2022, was $10,356,121 (($0.05) per share) compared to a net loss of $14,320,822 ((0.07) per share) for the nine months ended September 30, 2021.

Segmented Disclosure

We operate in a single reportable operating segment as a vertically integrated cannabis company with cultivation, production and distribution operations in Nevada and cultivation, retail dispensary and distribution operations in California.

Liquidity and Capital Resources

As of September 30, 2022, our financial instruments consist of cash, deposits, accounts payable and accrued liabilities, and notes payable. We have no speculative financial instruments, derivatives, forward contracts, or hedges.

As of September 30, 2022, we had working capital of $58,126,927 compared to working capital of $68,274,639 as of December 31, 2021. The Company has adequate liquidity in the form of cash on hand to fund all its planned capital expenditures and expansion plans as well as to continue to fund its operation over the next 12 months, including the substantially completed expansion of a cultivation facility in Clark Country, Nevada the planned build-out of our operations in Florida, further expansion of operations in Nevada, and the conditional acquisition and build-out of an Illinois retail location.

The following table relates to the nine months ended September 30, 2022, and 2021:

	Nine Months Ended
	September 30, 2022			September 30, 2021
Cash flows provided by operating activities	$	2,334,432		$	(225,926	)
Cash flows used in investing activities		(13,148,271	)		(14,624,473	)
Cash flows provided by financing activities		97,980			64,520,739

Cash Flows from Operating Activities

Net cash provided by operating activities was $2,334,432 for the nine months ended September 30, 2022, compared to cash used in operating activities of ($225,926) for the nine months ended September 30, 2021. The increase is primarily due to the receipt of cash proceeds for lease incentives during the nine months ended September 30, 2022, when compared to the nine months ended September 30, 2021.

Cash Flows from Investing Activities

Net cash used in investing activities was $13,148,271 for the nine months ended September 30, 2022, compared to net cash used in investing activities of $14,624,473 for the nine months ended September 30, 2021. The decrease is due to lower amounts spent on capital expenditures during the period when compared to the nine months ended September 30, 2021.

Cash Flows from Financing Activities

Net cash provided by financing activities was $97,980 representing cash proceeds received on the exercise of stock options during the nine months ended September 30, 2022, compared to net cash provided by financing activities of $64,520,739 for the nine months ended September 30, 2021. The decrease was primarily related to no warrants being exercised during the period and no equity financings or private placements being completed during the nine months ended September 30, 2022, as compared to the nine months ended September 30, 2021.

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Capital Resources

We have a recent history of operating losses. It may be necessary for us to arrange for additional financing to meet our on-going growth initiatives.

Management believes it will be able to raise equity capital as required in the long term, but recognizes the risks attached thereto. There can be no assurance that it will be able to obtain adequate financing in the future or that the terms of such financing may be favorable.

Should financing not be available, the Company has adequate liquidity in the form of cash on hand to fund all of its planned capital expenditures and expansion plans as well as to continue to fund its operation over the next 12 months, including the planned expansion of a cultivation facility in Clark County, Nevada, the build-out of our operations in Florida, further expansion of operations in Nevada, and the conditional acquisition and build-out of an Illinois retail location.

Capital Management

Our capital consists of shareholders’ equity. Our objective when managing capital is to maintain adequate levels of funding to support the development of our businesses and maintain the necessary corporate and administrative functions to facilitate these activities. This is done primarily through equity financing and incurring debt. Future financings are dependent on market conditions and there can be no assurance we will be able to raise funds in the future. We invest all capital that is surplus to our immediate operational needs in short-term, highly liquid, and high-grade financial instruments. There were no changes to our approach to capital management during the period. We are not subject to externally imposed capital requirements.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements as of September 30, 2022, or as of December 31, 2021, or as of the date hereof.

Critical Accounting Estimates

The preparation of consolidated financial statements in conformity with GAAP requires our management to make judgements, estimates and assumptions about future events that affect the amounts reported in the consolidated financial statements. Although these estimates are based on management’s best knowledge of the amounts, events or actions, actual results may differ from those estimates. Estimates and judgements are continuously evaluated and are based on management’s experience and other factors, including expectations of future events that are believed to be reasonable.

Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

There have been no material changes to our critical accounting estimates as set forth in Part II Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2021.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

There have been no material changes to our market risk disclosures as set forth in Part II Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2021.

Item 4. Controls and Procedures

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our Co-Chief Executive Officers (“Co-CEOs”) and Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, as ours are designed to do, and management necessarily was required to apply its judgment in evaluating the risk related to controls and procedures.

In connection with the preparation of this Quarterly Report on Form 10-Q, as of September 30, 2022, 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 effective at a reasonable assurance level as of September 30, 2022.

Changes in Internal Control Over Financial Reporting

There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) identified in connection with the evaluation of our internal control performed during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

There are no actual or to our knowledge contemplated legal proceedings material to us or our subsidiaries or to which any of our or any of our subsidiaries’ property is the subject matter.

Item 1A. Risk Factors.

In addition to the risk factor set forth below and other information set forth in this report, you should carefully consider the risk factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021, which could materially affect our business, financial condition, financial results, or future performance. Other than as set forth below, there have been no material changes from the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021.

Implications of being a smaller reporting company

As of the last business day of our second fiscal quarter, we determined that we requalify as a smaller reporting company for the fiscal year ended December 31, 2022.

Similar to emerging growth companies, smaller reporting companies are able to provide simplified executive compensation disclosure and have certain other reduced disclosure obligations, including, among other things, being permitted to provide only two years of audited financial statements in our Annual Report on Form 10-K, with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” not being required to furnish a contractual obligations table in “Management's Discussion and Analysis of Financial Condition and Results of Operations” and not being required to furnish a stock performance graph in our annual report.

We may choose to take advantage of some, but not all, of the available exemptions. We have taken advantage of reduced reporting burdens in our other filings with the Securities and Exchange Commission. We cannot predict whether investors will find our common stock less attractive if we rely on certain or all of these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Not applicable.

Item 3. Defaults Upon Senior Securities.

Not applicable.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

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Item 6. Exhibits.

EXHIBIT INDEX

Exhibit No.			Description

3.1			Certificate of Amalgamation (incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K filed with the SEC on March 8, 2022).
3.2			Notice of Articles (incorporated by reference to Exhibit 3.2 to the Company’s Form 8-K filed with the SEC on March 8, 2022).
3.3			Articles of Planet 13 Holdings Inc. (incorporated by reference to Exhibit 3.3 to the Company’s Form 8-K filed with the SEC on March 8, 2022).
31.1			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 (filed herewith).
31.2			Certification of Principal Executive Officer (Larry Scheffler) 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 (filed herewith).
31.3			Certification of Principal Financial Officer 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 (filed herewith).
32.1			Certification of Principal Executive Officers and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
101. INS			Inline XBRL Instance Document
101.SCH			Inline XBRL Taxonomy Extension Schema Document
101. CAL			Inline XBRL Taxonomy Extension Calculation Linkbase Document
101. DEF			Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB			Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE			Inline XBRL Taxonomy Extension Presentation Linkbase Document
104			Cover Page Interactive Data File (embedded with Inline XBRL document)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: November 10, 2022	By:	/s/ Robert Groesbeck
		Robert Groesbeck
		Co-Chief Executive Officer

	By:	/s/ Larry Scheffler
		Larry Scheffler
		Co-Chief Executive Officer

	By:	/s/ Dennis Logan
		Dennis Logan
		Chief Financial Officer