Cannara Biotech : Q1 2022 Cannara Biotech Inc. Financial Statements

CANNARA BIOTECH INC.

Condensed Interim Consolidated Financial Statements

For the three-month periods ended November 30, 2021 and 2020 (Unaudited)

CANNARA BIOTECH INC.

Table of Contents (Unaudited)

	Page
Financial Statements of Cannara Biotech Inc.
Condensed Interim Consolidated Statement of Financial Position	1
Condensed Interim Consolidated Statement of Net Loss and Comprehensive Loss	2
Condensed Interim Consolidated Statement of Changes in Equity	3
Condensed Interim Consolidated Statement of Cash Flows	4
Notes to Condensed Interim Consolidated Financial Statements	5 - 22

CANNARA BIOTECH INC.

Condensed Interim Consolidated Statement of Financial Position As at November 30, 2021 and August 31, 2021

(Unaudited - in Canadian dollars)

		November 30,		August 31,
			2021		2021
Assets
Current assets
	Cash	$	14,143,313	$	8,159,305
	Accounts receivable		3,609,827		2,847,725
	Sales tax receivable		-		47,756
	Lease receivable		100,468		72,680
	Biological assets (note 3)		1,654,558		1,902,206
	Inventory (note 4)		6,471,033		5,508,258
	Prepaid expenses and other assets		822,424		708,803
			26,801,623		19,246,733
Lease receivable		65,632		73,164
Deposits		396,114		396,114
Deposits on property, plant and equipment		1,387,977		556,803
Property, plant and equipment (note 5)		73,313,054		71,517,251
Right-of-use asset (note 6)		176,175		232,548
		$	102,140,575	$	92,022,613
Liabilities and Shareholders' Equity
Current liabilities
	Accounts payable and accrued liabilities	$	6,256,122	$	6,263,201
	Sales tax payable		171,284		-
	Deferred lease revenue		293,636		3,348
	Current portion of long-term debt		3,386		9,564
	Current portion of deferred grant income		38,101		32,043
	Current portion of lease liabilities (note 6)		237,561		225,642
	Current portion of mortgages payable (note 7)		1,100,000		300,000
			8,100,090		6,833,798
Long-term debt (note 7)		2,046		2,611
Lease liabilities (note 6)		152,667		216,854
Convertible debentures (note 7)		8,733,193		8,466,008
Deferred grant income		829,142		705,079
Mortgages payable (note 7)		20,801,628		11,682,451
			38,618,766		27,906,801
Shareholders' equity
	Share capital		83,208,150		83,208,150
	Contributed surplus		9,378,622		9,412,746
	Deficit		(29,135,648)		(28,605,149)
	Accumulated other comprehensive income		70,685		100,065
Total equity		63,521,809		64,115,812
Contingencies (note 15)
Subsequent events (note 17)
		$	102,140,575	$	92,022,613

See accompanying notes to condensed interim consolidated financial statements.

1

CANNARA BIOTECH INC.

Condensed Interim Consolidated Statement of Net Loss and Comprehensive Loss For the three-month periods ended November 30, 2021 and 2020

(Unaudited)

				Three-month periods ended
			November 30,		November 30,
			2021		2020
Revenue
	Revenue from sale of goods (note 12)	$	6,967,318	$	777,406
	Excise taxes		(1,538,987)		-
	Net revenue from sale of goods		5,428,331		777,406
	Lease revenue (note 12)		899,004		556,932
	Other income		237,241		33,843
			6,564,576		1,368,181
Cost of sales
	Cost of goods sold (note 4)		3,480,123		773,189
	Lease operating costs		70,428		98,847
Gross profit before fair value adjustments		3,014,025		496,145
Changes in fair value of inventory sold (note 4)		(1,866,480)		(203,310)
Unrealized gain (loss) on changes in fair value of biological assets (note 3)		1,472,497		(790,195)
Gross profit (loss)		2,620,042		(497,360)
Operating expenses
	General and administrative (note 10)		1,605,257		1,143,535
	Research and development		256,495		550,394
	Selling, marketing and promotion		299,592		265,079
	Professional and legal fees		232,380		323,344
	Share-based compensation (note 9)		(34,124)		103,721
	Amortization (note 5 and 6)		231,901		274,489
	Gain on sublease agreement (note 6)		(12,876)		-
	Loss on disposal of property, plant and equipment		24,662		-
			2,603,287		2,660,562
Operating income (loss)		16,755		(3,157,922)
Net finance expense (note 11)		547,254		337,111
Net loss		(530,499)		(3,495,033)
Other comprehensive income (loss)
	Foreign currency translation adjustments		(29,380)		13,787
Total comprehensive loss	$	(559,879)	$	(3,481,246)
Basic and diluted loss per share	$	(0.01)		(0.01)
Weighted average number of outstanding shares		876,481,321		737,746,649

See accompanying notes to condensed interim consolidated financial statements.

2

CANNARA BIOTECH INC.

Condensed Interim Consolidated Statement of Changes in Equity For the three-month periods ended November 30, 2021 and 2020 (Unaudited)

				Share		Contributed				Accumulated other		Total
		Shares		capital		surplus		Deficit	comprehensive income		equity
As at August 31, 2021	876,481,321	$	83,208,150	$	9,412,746	$	(28,605,149)	$	100,065	$	64,115,812
Net loss	-		-		-		(530,499)		-		(530,499)
Other comprehensive loss
	Foreign currency translation adjustments	-		-		-		-		(29,380)		(29,380)
Comprehensive loss	-		-		-		(530,499)		(29,380)		(559,879)
Share-based compensation (note 9)
	Employee compensation	-		-		(34,983)		-		-		(34,983)
	Other services	-		-		859		-		-		859
		-		-		(34,124)		-		-		(34,124)
As at November 30, 2021	876,481,321	$	83,208,150	$	9,378,622	$	(29,135,648)	$	70,685	$	63,521,809
				Share		Contributed				Accumulated other		Total
		Shares		capital		surplus		Deficit	comprehensive income		equity
As at August 31, 2020	737,738,815	$	58,361,592	$	7,034,550	$	(27,077,006)	$	45,725	$	38,364,861
Net loss	-		-		-		(3,495,033)		-		(3,495,033)
Other comprehensive income
	Foreign currency translation adjustments	-		-		-		-		13,787		13,787
Comprehensive loss	-		-		-		-		13,787		13,787
Share-based compensation (note 9)
	Employee compensation	-		-		131,836		-		-		131,836
	Other services	-		-		3,888		-		-		3,888
		-		-		135,724		-		-		135,724
Issuance of shares to settle a liability	100,720		10,072		-		-		-		10,072
As at November 30, 2020	737,839,535	$	58,371,664	$	7,170,274	$	(30,572,039)	$	59,512	$	35,029,411

See accompanying notes to condensed interim consolidated financial statements.

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