PEI Cannabis Annual Report 2025

PRINCE EDWARD ISLAND CANNABIS MANAGEMENT CORPORATION Notes to Financial Statements Year Ended March 31, 2025

17. FINANCIAL RISK MANAGEMENT (continued) (d) Liquidity risk

Liquidity risk is the risk that the Corporation would be unable to meet its obligations. The Corporation manages liquidity needs by monitoring scheduled debt servicing payments for long term financial liabilities as well as cash inflows and outflows due in day-to-day business. The data used for analyzing these cash flows is consistent with that used in the contractual maturity analysis below. Liquidity needs are monitored in various time bands, on a day-to-day and week-to-week basis, as well as on the basis of a rolling 30 day outlook. Net cash requirements are compared to available borrowing facilities in order to determine any surplus or shortfall. The Corporation's objective is to maintain cash and marketable securities to meet its liquidity requirements for a minimum 60 day period. This objective was met for the reporting period. Funding for long term liquidity needs are secured by adequate amounts of committed credit facilities. The Corporation's existing cash resources, trade receivables, and cash generated from operations significantly exceed the current cash outflow requirements. The Corporation's contractual financial liabilities as at March 31, 2025 matures as follows:

Current

Non-current

Within 6 months

6 to 12 months 1 to 5 years After 5 years

Accounts payable and accrued liabilities

$ 3,197,907 $

-

$

- -

$

- -

Due to the Province Lease liabilities

-

4,062,277 119,400

119,400 484,426 $ 3,317,307 $ 4,181,677 $ 1,028,624 $ 484,426 1,028,624

18. CAPITAL MANAGEMENT The capital structure of the Corporation currently consists of amounts due to related parties and lease liabilities. The Corporation manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the company may arrange more loans or advances from related parties. Management reviews its capital management approach on a regular basis. The Corporation is not subject to externally imposed capital requirements.

42

PEICMC 2024-2025 Annual Report

17