CannAmerica Brands : ON Form 13-502F1 (Class 1 and 3B Reporting Issuers - Participation Fee)

CannAmerica Brands Corp.

Consolidated Financial Statements

For the Years Ended March 31, 2021 and 2020

INDEPENDENT AUDITORS' REPORT

To the Shareholders and the Directors of CannAmerica Brands Corp.

Opinion

We have audited the consolidated financial statements of CannAmerica Brands Corp. and its subsidiaries (the "Company"), which comprise the consolidated statements of financial position as at March 31, 2021 and 2020, and the consolidated statements of operations and comprehensive loss, changes in deficiency and cash flows for the years then ended and the related notes comprising a summary of significant accounting policies and other explanatory information.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the Company as at March 31, 2021 and 2020, and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Basis for Opinion

We conducted our audits in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audits of the consolidated financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matter - Material Uncertainty Related to Going Concern

We draw attention to Note 1 of the consolidated financial statements, which describes matters and conditions that indicate the existence of a material uncertainty that may cast significant doubt about the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Other Information

Management is responsible for the other information, which comprises the information included in the Company's Management Discussion and Analysis to be filed with the relevant Canadian securities commissions. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audits of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed on this other information, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company's financial reporting process.

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audits.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

The engagement partner on the audit resulting in this independent auditors' report is Fernando J. Costa.

CHARTERED PROFESSIONAL ACCOUNTANTS

Vancouver, British Columbia

October 5, 2021

CannAmerica Brands Corp. Consolidated statements of financial position (Expressed in Canadian dollars)

		March 31,	March 31,
		2021	2020
	Notes	$	$
Assets
Current		39,599
Cash		15,973
Accounts receivable	3	62,694	139,031
Prepaid expenses and deposits		141,398	391,063
		243,691	546,067
Investment in licensee	4	-	886,689
Equipment	5	61,745	60,844
Intangible assets	6	1	1,375,000
Total assets		305,437	2,868,600
Liabilities and deficiency
Current liabilities		297,169
Accounts payable and accrued liabilities	10	884,764
Deferred revenue		348,875	293,457
Notes payable	7	3,846,128	4,040,917
Loan payable	9	115,044	-
Debentures	8	467,545	608,152
Total liabilities		5,074,761	5,827,290
Deficiency		9,210,252
Share capital	11	8,060,711
Shares issuable		118,521	108,521
Contributed surplus		2,829,187	2,759,676
Deficit		(17,098,050)	(13,547,087)
Accumulated other comprehensive income (loss)		170,766	(340,511)
Total deficiency		(4,769,324)	(2,958,690)
Total liabilities and deficiency		305,437	2,868,600
Going concern (Note 1)
Approved by the Board of Directors:
"Austin Sims"	"Dan Anglin"
Austin Sims, Director	Dan Anglin, CEO and Director

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

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CannAmerica Brands Corp.

Consolidated statements of operations and comprehensive loss (Expressed in Canadian dollars)

		Years ended March 31,
		2021	2020
	Notes	$	$
Revenue		386,494	915,096
Cost of sales		58,079	132,004
Gross margin		328,415	783,092
Expenses		303,556	747,772
Advertising and promotion
Bad debt recovery		-	(29,433)
Bank charges		2,492	3,060
Depreciation	5	19,439	17,117
Interest and accretion expense	7,8	511,551	340,461
Office and administration		38,995	215,897
Professional fees		249,082	528,143
Salaries and benefits	10	207,663	713,701
Share-based compensation	10,11	494,511	1,010,140
Loss before other items		(1,498,874)	(2,763,766)
Other items		(1,392)	(18,666)
Foreign exchange gain
Loss on asset disposal		-	11,638
Loss on investment	4	733,413	148,963
Impairment of intangible assets	6	1,374,999	1,725,000
Loss on debt settlement	11	41,620	-
Gain on de-recognition of liabilities		(89,298)	-
Other income		(7,253)	-
Net loss for the year		(3,550,963)	(4,630,701)
Other comprehensive income (loss) for the year:
Item that may be reclassified subsequently to income		511,277	(219,565)
Unrealized gain (loss) on foreign currency translation
Comprehensive loss for the year		(3,039,686)	(4,850,266)
Loss per common share - basic and diluted		(0.06)	(0.09)
Weighted average number of common shares outstanding		56,039,579	53,241,355

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

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