Condensed Interim Consolidated Financial Statements

Bhang Inc.

For the Three and Nine Month Periods ended September 30, 2021 and 2020

(Expressed in United States Dollars)

Unaudited

INDEX

Condensed Interim Consolidated Statements of Financial Position

1

Condensed Interim Consolidated Statements of Loss

and Comprehensive Loss

2

Condensed Interim Consolidated Statements of Changes in

3 - 4

Shareholders' Equity (Deficiency)

Condensed Interim Consolidated Statements of Cash Flows

5

Notes to the Condensed Interim Consolidated

Financial Statements

6 - 43

NOTICE TO READER

The accompanying unaudited condensed interim consolidated financial statements have been prepared by the Company's management and the Company's independent auditors have not performed a review of these condensed interim consolidated financial statements

Bhang Inc.

Unaudited Condensed Interim Consolidated Statements of Financial Position

Expressed in United States Dollars

September

December 31,

30, 2021

2020

(Unaudited)

(Audited)

Assets

Current Assets

Cash

$

154,782

$

69,654

Trade and other receivables, net (note 22(c))

189,094

246,434

Inventory (note 7)

221,173

204,736

Marketable securities (note 9)

939,369

-

Prepaid expenses

265,162

169,760

Contract assets (note 22(c))

56,953

54,418

Promissory note receivable (note 10)

8,772

-

Total Current Assets

1,835,305

745,002

Non-Current Assets

Marketable securities (note 9)

-

989,509

Property and equipment (note 11)

141,915

152,667

Total Assets

$

1,977,220

$

1,887,178

Liabilities

Current Liabilities

Accounts payable and accrued liabilities

Contract liability (note 22(c))

Due to shareholder (note 17)

Promissory note - current portion (note 13)

Total Current Liabilities

Non-Current Liabilities

Promissory note (note 13)

Contract liability (note 22(c))

Total Liabilities

Shareholders' Equity (Deficiency)

Share capital (note 18)

Contributed surplus (note 19)

Accumulated other comprehensive loss

Accumulated deficit

Total Liabilities and Shareholders' Equity (Deficit)

Going Concern (Note 1)

Commitments (Note 30)

Contingencies (Note 31)

$ 944,110 $ 1,176,151

304,542 150,242

  • 1,191,539
  • 5,354

1,248,652 2,523,286

-2,246

750,000 750,000

1,998,652 3,275,532

20,782,895 18,178,610

3,021,074 2,877,652

(104,319) (97,957)

(23,721,082) (22,346,659)

(21,432) (1,388,354)

$ 1,977,220 $ 1,887,178

The accompanying notes form an integral part of these condensed interim consolidated financial statements.

Approved on behalf of the Board

Signed "Jamie Pearson" ,Director

Signed "Stephen Gledhill"

, Director

-1-

Bhang Inc.

Unaudited Condensed Interim Consolidated Statements of Loss and Comprehensive Loss For the three and nine month periods ended September 30, 2021 and 2020

Expressed in United States Dollars

Three Months Ended

Nine Months Ended

September

September

September

September

30, 2021

30, 2020

30, 2021

30, 2020

(notes 32

(notes 32

and 33)

and 33)

Revenue

Product sales (note 21(i) and 28)

Licensing (note 21(i) and 28)

Other (note 28)

Cost of Sales

Gross Profit

Expenses

Wages and salaries (note 21(ii)

Sales and marketing

Professional fees

Publicity and investor relations

Product development

General and administrative (note 24)

Share-based compensation (note 21)

Provision for (recovery of) bad debts

Loss before the undernoted

Interest expense

Interest expense on lease liabilities (note 14) Interest accretion (note 16)

Unrealized loss on marketable securities (note 9) Realized loss on marketable securities (note 9) Loss on debt settlement

Gain on Disposal of Asset (note 11) Foreign exchange gain (loss)

Loss on disposition of investment in Indiva JV (note 8) Government assistance

Net loss for the period from continuing operations Loss from discontinued

operations (note 32)

Net loss for the period

Currency translation adjustment

Comprehensive loss for the period

Net loss per share - basic and diluted

Weighted average number of SVS and MVS outstanding - basic and diluted

$

21,322

$

47,459

$

62,017

$

161,903

260,689

189,164

814,976

1,075,755

1,008

6,559

4,793

22,396

283,019

243,182

881,786

1,260,054

109,162

103,850

242,646

110,093

173,857

139,332

639,140

1,149,961

190,004

234,577

476,159

741,549

175,347

71,378

433,306

222,823

233,866

209,014

732,491

1,129,493

3,992

5,254

11,720

14,923

30,000

-

40,000

-

96,972

87,281

267,197

302,600

25,303

87,269

141,788

265,620

(50,000)

-

(50,000)

-

705,484

694,773

2,052,661

2,677,008

(531,627)

(555,441)

(1,413,521)

(1,527,047)

-

(41,424)

(17,498)

(56,199)

-

(166)

-

(659)

-

-

-

(14,561)

(249,949)

(23,653)

(58,832)

(31,780)

-

-

-

(104,008)

-

(1,675,384)

-

(1,675,384)

-

-

-

56,535

19,231

-

25,542

(4,686)

-

(100,000)

-

(100,000)

73,832

-

89,886

-

(688,513)

(2,396,068)

(1,374,423)

(3,457,789)

-

123,932

-

3,316

(688,513)

(2,272,136)

(1,374,423)

(3,454,473)

(42,231)

13,139

(6,362)

(14,034)

$

(730,744)

$

(2,258,997)

$

(1,380,785)

$

(3,468,507)

$

-

$

(0.02)

$

(0.01)

$

(0.03)

200,487,818

147,077,136

183,935,158

133,254,414

The accompanying notes form an integral part of these condensed interim consolidated financial statements.

-2-

Bhang Inc.

Unaudited Condensed Interim Consolidated Statements of Changes in Shareholders' Equity (Deficiency)

For the nine month periods ended September 30, 2021 and 2020

Expressed in United States Dollars

Equity

Accumulated

Share

Portion of

Other

Share Capital

Treasury

Contributed

Subscriptions

Promissory

Comprehensive

Accumulated

SVS

MVS

Amount

Shares

Surplus

Payable

Notes

Loss

Deficit

Total

Balance - January 1, 2020

51,512,502

61,377.202

$ 15,782,234

$

-

$

776,664

$

1,000,000

$

36,995

$

(65,903)

$ (18,181,634)

$

(651,644)

Proceeds of private placements

(note 18(ii))

3,571,428

-

270,075

-

106,148

-

-

-

-

376,223

Issued in connection with share

swap (note 18(ii))

14,285,714

-

967,541

-

-

-

-

-

-

967,541

Issued to acquire additional

interest in joint venture

(note 18(I))

536,016

-

80,616

-

-

-

-

-

-

80,616

Issued for upon conversion of

convertible promissory notes

payable (note 18 (vii))

6,666,667

-

483,154

-

254,408

-

(36,995)

-

36,995

737,562

Issued for services rendered

(note 18 (iii))

1,855,238

-

179,299

-

-

-

-

-

-

179,299

Conversion of MVS to SVS

(note 18(vi))

14,084,701

(14,084.701)

-

-

-

-

-

-

-

-

Issued in connection with

settlement of debt

(note 18(viii))

12,809,524

-

1,179,601

-

200,801

-

-

-

-

1,380,402

Share-based compensation

-

-

14,134

-

276,272

-

-

-

-

290,406

(note 19))

Issuance costs

-

-

(19,767)

-

-

-

-

-

-

(19,767)

Renegotiation of license agreement

(note 8(b))

-

-

-

-

-

(1,000,000)

-

-

-

(1,000,000)

MVS reacquired upon disposition

-

(2,379.122)

(170,444)

-

-

-

-

-

154,405

(16,039)

of Red Ace (note 18(ix))

Net loss for the period

-

-

-

-

-

-

-

-

(3,454,473)

(3,454,473)

Cumulative Translation Reserve

-

-

-

-

-

-

-

(14,034)

-

(14,034)

Balance - September 30, 2020

105,321,790

44,913.379

$ 18,766,443

$

-

$

1,614,293

$

-

$

-

$

(79,937)

$ (21,444,707)

$

(1,143,908)

The accompanying notes form an integral part of these condensed interim consolidated financial statements.

-3-

Bhang Inc.

Unaudited Condensed Interim Consolidated Statements of Changes in Shareholders' Equity (Deficiency)

For the nine month periods ended September 30, 2021 and 2020

Expressed in United States Dollars

Equity

Accumulated

Share

Portion of

Other

Share Capital

Treasury

Contributed

Subscriptions

Promissory

Comprehensive

Accumulated

SVS

MVS

Amount

Shares

Surplus

Payable

Notes

Loss

Deficit

Total

Balance - January 1, 2021

104,792,624

44,913.379

$ 18,178,610

$

-

$

2,877,652

$

-

$

-

$

(97,957)

$ (22,346,659)

$

(1,388,354)

Proceeds of private placements

(note 18(i))

27,240,192

-

1,408,416

-

-

-

-

-

-

1,408,416

Issued in connection with

settlement of amount due to

shareholder (note 18(ii))

23,661,623

-

1,214,088

-

-

-

-

-

-

1,214,088

Cancellation of SVS

(note 18(iii))

(170,000)

-

(13,100)

-

13,100

-

-

-

-

-

Conversion of MVS to SVS

(note 18 (iv))

10,000,000

(10,000)

-

-

-

-

-

-

-

-

Share-based compensation

(note 19))

-

-

11,467

-

130,322

-

-

-

-

141,789

Issuance costs

-

-

(16,586)

-

-

-

-

-

-

(16,586)

Net loss for the period

-

-

-

-

-

-

-

-

(1,374,423)

(1,374,423)

Cumulative Translation Reserve

-

-

-

-

-

-

-

(6,362)

-

(6,362)

Balance - September 30, 2021

165,524,439

34,913.379

$ 20,782,895

$

-

$

3,021,074

$

-

$

-

$

(104,319)

$ (23,721,082)

$

(21,432)

The accompanying notes form an integral part of these condensed interim consolidated financial statements.

-4-

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Bhang Inc. published this content on 07 December 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 December 2021 16:41:02 UTC.