Ionic Brands : Consolidated Financial Statements for the Three and Twelve Month Periods Ended December 31, 2021

IONIC BRANDS CORP.

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE THREE-ANDTWELVE-MONTHS ENDED DECEMBER 31, 2021, AND 2020 (UNAUDITED, EXPRESSED IN UNITED STATES DOLLARS)

NOTICE TO READER

Under National Instrument 51-102, Part 4, subsection 4.3(3)(a), if an auditor has not performed a review of the interim financial statements, they must be accompanied by a notice indicating that the condensed consolidated interim financial statements have not been reviewed by an auditor.

The accompanying unaudited condensed consolidated interim financial statements of the Company have been prepared by and are the responsibility of the Company's management.

The Company's independent auditors have not audited, reviewed or otherwise attempted to verify the accuracy or completeness of these condensed consolidated interim financial statements. Readers are cautioned that these statements may not be appropriate for their intended purposes.

February 28, 2022

IONIC BRANDS CORP.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION

AS AT DECEMBER 31, 2021

(Unaudited, Expressed in United States Dollars)

		Notes		December 31, 2021		December 31, 2020
ASSETS
Current Assets			133,605	$
	Cash		$	288,383
	Trade and other receivables	7		2,493,861		1,284,934
	Prepaid expenses and deposits	8		301,895		111,699
	Inventory	9		2,708,295		140,542
	Biological assets	10		63,814		-
	Due from related parties	16		1,764,688		644,688
Non-Current Assets			7,446,158		2,470,246
		1,059,299
	Property and equipment	11			782,086
	Patents, brands and goodwill	13		19,262,965		2,102,251
	Right-of-Use assets	12		3,574,813		752,382
TOTAL ASSETS		$	31,363,235	$	6,106,965
LIABILITIES AND SHAREHOLDERS' DEFICIENCY
Current Liabilities			3,918,029	$
	Accounts payable and accrued liabilities	14	$	3,992,197
	Loans payable	15		1,802,439		2,815,025
	Current portion of lease liability	12		453,606		381,600
	Current portion of vehicle loans	19		26,512		30,094
	Due to Related Parties			-
Non-Current Liabilities			6,200,586		7,218,916
		1,056,632
	Convertible debentures	17			13,994,255
	Lease liability	12		3,053,725		193,905
	Vehicle loans	19		92,246		87,249
TOTAL LIABILITIES		$	10,403,189	$	21,494,325
SHAREHOLDERS' DEFICIENCY			61,848,219
	Share capital	18			41,883,795
	Preferred shares			26,260,672		-
	Reserves	18		8,805,989		6,662,439
	Other comprehensive income			(1,200,545)		(142,430)
	Accumulated deficit			(74,754,289)		(63,791,164)
TOTAL SHAREHOLDERS' DEFICIENCY			20,960,046		(15,387,360)
TOTAL LIABILITIES AND SHAREHOLDERS'
DEFICIENCY		$	31,363,235	$	6,106,965
Nature and continuance of operations	1
Commitments and contingencies	19
Subsequent event	24

Approved and authorized for issue by the Board of Directors on February 28, 2022.

_____"John Gorst"_____	_____"Christian Vara"_____
Director	Director

The accompanying notes are integral to these financial statements.

IONIC BRANDS CORP.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF LOSS AND COMPREHENSIVE LOSS FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2021, AND 2020 (Unaudited)

(Expressed in United States Dollars)

			Three Months Ended	Twelve Months Ended
	Notes		December 31,		December	December	cember 31,
			2021		31, 2020	31, 2021	2020
REVENUE		$	5,300,402			$ 18,838,013
Product sales	20	$	414,167	$ 2,183,154
Brokerage sales			182,292		-	3,803,023	-
Equipment rental income	20		(30,500)		230,251	383,752	921,004
Royalty and service income	20		(14,956)		1,012,265	2,141,690	5,863,265
			5,437,238		1,656,683	25,166,478	8,967,432
Unrealized gain (loss) on			(62,501)			(49,062)
changes in fair value of	10				-		-
biological assets
COST OF GOODS SOLD	9		(5,040,177)		(1,355,046)	(21,4797,8	7,146,621)
						20)
GROSS PROFIT			334,560		301,637	3,619,596	1,820,820
OPERATING EXPENSES			31,876			562,880
Accretion	17			269,963	1,136,772
Advertising and promotion			15,834		915	30,936	5,476
Bad debts (recovery)			-		1,293,026	338,000	1,293,026
Depreciation and amortization	12		862,538		526,990	3,088,891	1,247,235
Financing fees			-		11,514	-	26,162
Interest and finance charges	12,15,16		416,895		1,592,001	1,412,585	1,939,846
Marketing and investor			198,260		6,328	407,051	19,700
relations			290,530			956,074
Office and administration				(51,715)	434,096
Professional fees			433,265		414,919	1,678,222	906,736
Rent expense	12		(38,079)		(11,490)	16,171	4,785
Research and development			10,000		15,000	46,320	71,682
Salaries and wages	16		694,809		218,459	2,735,457	1,129,916
Share-based payments	18		-		314	4,699,516	57,625
Transfer agent and regulatory			4,103		12,484	94,767	57,625
fees			67,808			215,221
Travel				29,772	78,710
			2,987,839		4,328,480	16,282,091	8,394,494
OTHER ITEMS			-			9,696
Gain (loss) from asset disposal				(17,641)	(17,641)
Gain from forgiveness of debts			10,534		366,134	1,866,580	477,162
Gain on settlement of debts			-		-	-	-
Gain (loss) from revaluation of	18		-		(951,487)	-	(547,984)
warrants			2,139			98,686
Foreign exchange gain (loss)				56,084	(18,587)
Write-off of inventory			(275,592)		-	(275,592)	-
			(262,919)		(546,910)	1,699,370	(107,050)
NET LOSS BEFORE INCOME			(2,916,198)		(4,573,753)	(10,963,12	6,680,742)
TAXES						5)

OTHER COMPREHENSIVE LOSS

Unrealized foreign exchange

loss on translation of foreign operations

		6		(22,428)		(929,512)		190,436
COMPREHENSIVE LOSS	$	(2,916,192)	$	(4,596,181)	$	(12,021,240	$	6,490,306)
						)
LOSS PER SHARE - BASIC AND
DILUTED	$	(.02)	$	(0.02)	$	(.09)	$	(0.04)
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING -
BASIC AND DILUTED				116,599,093				189,342,039

The accompanying notes are integral to these financial statements.