CANNAPHARMARX, INC. Material Event - What Happened

Hey there! Let's break down what's been going on with CannaPharmaRX, Inc. in a way that makes sense, without all the confusing business talk. Think of this as me explaining the news to you over coffee.

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1. What happened? (The actual event, in plain English)

Okay, so CannaPharmaRX, Inc. just got a big piece of good news from Canadian regulators. A while back, the British Columbia Securities Commission (BCSC) had issued a "cease trade order" against the company. Think of this like a temporary ban or a red light that stopped people from trading the company's shares because CannaPharmaRX hadn't filed some important financial documents.

The big news is that this cease trade order has now been lifted! This means the red light is off, and the company is back in good standing with the BCSC, which is a crucial step towards its shares being able to trade again, potentially on platforms like the OTC Pink Sheets.

2. When did it happen?

The BCSC officially revoked (lifted) the cease trade order on December 12, 2025.

To give you some context:

• The original cease trade order was issued on May 11, 2023.
• CannaPharmaRX finally submitted all the missing financial documents (called "Delinquent Filings") by October 19, 2023. It took some time after that for the order to be officially lifted.

3. Why did it happen? (The backstory and context)

The cease trade order was put in place because CannaPharmaRX failed to submit several required financial reports for the year ended December 31, 2022. These included their annual audited financial statements, management's discussion and analysis, and other annual filings. These documents are super important because they give investors a clear picture of the company's financial health.

The order was revoked because CannaPharmaRX eventually caught up and filed all those missing documents with both Canadian regulators (on SEDAR) and the U.S. Securities and Exchange Commission (SEC). Getting these filings up to date was a necessary step to get the trading ban lifted.

However, it's important to know that while this regulatory hurdle is cleared, the company is still facing some serious financial challenges. They've developed a strategic plan to tackle these issues, and getting the cease trade order revoked was a key part of that plan to get back on track.

4. Why does this matter? (The "so what?" for the company)

This is a pretty big deal for CannaPharmaRX, but it's a mixed bag.

The Good:

• Regulatory Compliance: It shows the company is taking steps to meet its legal obligations and is now in good standing with a key regulator. This builds trust.
• Path to Trading: Lifting the cease trade order is a critical step towards getting their shares trading again, which is essential for investors and for the company to raise money.

The Challenges (and why this matters for their future): Despite this good news, CannaPharmaRX is still in a tough spot financially. The company itself has stated there's "substantial doubt" about its ability to continue operating as a business. Here's why:

• Cash Shortage: As of September 30, 2025, they had a "working capital deficiency" of over $27 million. This means they don't have enough short-term assets (like cash) to cover their short-term debts. This problem has actually gotten worse recently.
• Big Debts: They owe a lot of money, especially to "related parties" (people or entities closely connected to the company). This debt totals over $10.7 million in principal, plus another $3.2 million in accrued interest, making up a significant chunk of their total liabilities.

So, while they've cleared a regulatory hurdle, the company is still fighting for its financial survival. This matters because it means they need to execute their new strategic plan perfectly to stay afloat.

5. Who is affected? (Who feels the ripple effect?)

When something like this happens, it doesn't just affect the company itself. A lot of people feel the impact:

• Investors (people who own stock): This is a crucial development. While the regulatory ban is lifted, the underlying financial health is still very concerning. Investors will be watching to see if trading resumes and how the company addresses its massive debt and cash problems.
• Regulators: The BCSC is now satisfied with their filings, but other regulators will likely keep a close eye on the company's financial situation.
• Creditors: The company plans to negotiate with those it owes money to, including related parties, to try and restructure or settle those debts. This directly impacts them.
• Employees: If the company can stabilize its finances and expand production (as planned), it could mean more job security or even new opportunities, especially at the Cremona facility.
• Customers: If the company successfully expands into European markets, new customers in Germany and Israel could gain access to their products.

6. What happens next? (The immediate future and long-term outlook)

CannaPharmaRX has a clear strategic plan to tackle its financial challenges and grow the business:

• Debt Management: They're going to negotiate with their creditors (including those related parties) to try and reorganize or settle their outstanding debts.
• Raising Money: They'll be looking for ways to secure more working capital (cash) to pay off liabilities and fund operations.
• Boosting Production: At their Cremona, Alberta facility, only 6 out of 10 growing rooms are currently active. They plan to open the remaining 4 rooms over the next one to two years to increase cannabis production.
• European Expansion: They're focusing on growing their presence in Germany and Israel. This involves building a sales network and applying for a special certification called EU-GMP (European Union Good Manufacturing Practices). Getting this certification would allow them to ship products directly to EU countries, cutting down on costs and delivery times.
• Resuming Trading: A key goal is to get their shares trading again, specifically on the OTC Pink Sheets.

In the short term, expect a lot of focus on these strategic initiatives. Long-term, if successful, these steps could transform the company's financial health and market reach.

7. What should investors/traders know? (Practical takeaways for your money)

If you own shares in CannaPharmaRX, or you're thinking about buying or selling, here are a few things to keep in mind:

• A Step Forward, But Not Out of the Woods: The lifting of the cease trade order is positive news, removing a major regulatory roadblock. However, the company's financial situation remains very precarious, with significant debt and a stated doubt about its ability to continue as a "going concern."
• High Risk, Potentially High Reward: This is a classic turnaround story in the making. If the company successfully executes its strategic plan (restructures debt, raises capital, increases production, expands into Europe), it could lead to significant growth. But there's a very real risk that they might not succeed, given the scale of their financial challenges.
• Watch the Execution: Don't just look at the plans; watch for concrete results. Are they successfully negotiating with creditors? Are they securing new funding? Is production actually increasing? Are they getting that EU-GMP certification?
• Market Reaction: If trading resumes, the stock price could be very volatile as investors react to both the good news (regulatory clearance) and the ongoing financial risks.
• Long-Term View: This is likely a long-term play. Short-term swings might not reflect the true progress (or lack thereof) in their strategic plan. Keep an eye on their future financial reports for signs of improvement.