VIVO Cannabis : Q1 2021 – Financial Statements

VIVO CANNABIS INC.

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020

(In Canadian Dollars)

NOTICE OF NO AUDITOR REVIEW

The accompanying condensed interim consolidated financial statements for VIVO Cannabis Inc. (the "Company") have been prepared by management. Pursuant to subsection 4.3(3)(a) of National Instrument 51-102 Continuous Disclosure Requirements, the Company advises that the accompanying condensed interim consolidated financial statements, which are the responsibility of management, are unaudited and have not been reviewed by the Company's auditor. The Company's auditor has not performed a review of the accompanying condensed interim consolidated financial statements in accordance with standards established by the Chartered Professional Accountants of Canada for a review of interim financial statements by an entity's auditor.

VIVO CANNABIS INC.

Condensed Interim Consolidated Statements of Financial Position (Unaudited) (Expressed in Canadian dollars)

		March 31,	December 31,
As at		2021		2020
Assets
Current assets
Cash and cash equivalents	$	16,931,717	$	5,702,983
Other financial assets (note 9)		561,454		7,048,944
Accounts receivable (note 13)		2,845,182		2,523,659
Inventories (note 3)		12,437,361		12,623,038
Biological assets (note 4)		1,604,412		2,015,573
Prepaid expenses		1,078,402		1,670,268
		35,458,528		31,584,465
Property, plant and equipment (note 5)		42,881,333		43,621,537
Right-of-use assets		432,533		473,037
Intangible assets (notes 6)		113,055,538		114,000,346
Goodwill		12,336,947		12,336,947
	$	204,164,879	$	202,016,332
Liabilities
Current liabilities
Accounts payable and accrued liabilities	$	5,292,807	$	7,056,880
Current portion of lease liabilities		135,809		135,809
		5,428,616		7,192,689
Convertible debentures (note 11)		4,442,504		5,265,934
Deferred revenue (note 8)		8,800,000		8,800,000
Lease liabilities		378,789		414,172
Deferred income taxes		33,433,450		33,199,750
		52,483,359		54,872,545
Shareholders' equity
Share capital (note 7)		288,821,496		282,308,066
Contributed surplus (note 7)		21,128,641		21,190,895
Warrant reserve (note 7)		3,076,252		1,335,900
Deficit		(161,304,448)	(157,757,071)
Accumulated other comprehensive income		(40,421)		65,997
		151,681,520		147,143,787
	$	204,164,879	$	202,016,332

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

Nature of operations (note 1)

Going concern (note 2(a))

Commitments and contingencies (note 8)

Subsequent events (note 18)

Approved and authorized for issue by the Board of Directors on May 17, 2021

"Richard Fitzgerald"		"Christie Henderson"
Director		Director

3

VIVO CANNABIS INC.

Condensed Interim Consolidated Statements of Loss and Comprehensive Loss (Unaudited) (Expressed in Canadian dollars)

		For the 3 months ended
		March 31, 2021		March 31, 2020
			(as restated Note 2(d))
Net revenue (note 15)	$	5,503,458		8,739,268
Cost of sales and production
Cost of inventory sold (note 3)		(2,746,018)		(4,252,616)
Production salaries and wages		(918,831)		(915,164)
Production amortization and depreciation (notes 5 & 6)		(877,381)		(819,035)
Production supplies and expense		(153,095)		(624,545)
Revenues less cost of sales and production before fair value adjustments		808,133		2,127,908
Realized gain on biological transformation (note 4)		(2,335,430)		(5,240,981)
Increase in fair value due to biological transformation (note 4)		2,195,511		3,205,423
Revenue less cost of sales and production and fair value adjustments		668,214		92,350
Expenses
General and administrative		3,976,355		5,335,977
Sales and marketing		105,065		190,344
Amortization and depreciation (notes 3,5 & 6)		1,078,370		1,108,057
Stock-based payments (notes 7,10 & 11)		109,855		355,675
Finance expense (notes 11 & 13)		216,506		1,512,530
Loss (gain) on other financial assets (note 9)		(1,270,432)		2,699,943
Foreign exchange loss		12,294		26,458
Other income		(61,753)		(72,668)
		4,166,260		11,156,316
Loss from operations before income taxes		(3,498,046)		(11,063,966)
Income tax expense (recovery) - current (note 17)		(184,370)		417,371
Income tax expense (recovery) - deferred (note 17)		233,701		(420,433)
Net loss		(3,547,377)		(11,060,904)
Other comprehensive loss)
Amounts that may be reclassified subsequently to profit or loss:
Foreign exchange translation loss		(106,418)		(30,140)
Comprehensive loss	$	(3,653,795)	$	(11,091,044)
Net loss per share
Loss per share, basic and diluted	$	(0.01)	$	(0.04)
Weighted average shares outstanding, basic and diluted		345,500,565		295,888,654

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

4

VIVO CANNABIS INC.

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

(Expressed in Canadian dollars)

						Other
		Common	Contributed	Warrant		Comprehensive
		Shares	Surplus	Reserve	Deficit	Loss	Total
	Balance, January 1, 2021	$282,308,066	$21,190,895	$1,335,900	$ (157,757,071)	$65,997	$147,143,787
	Stock-based payments (note 7)	-	109,854	-	-	-	109,854
	Issuance of unit (note 7)	6,095,361	-	1,954,639	-	-	8,050,000
	Net loss for the period	-	-	-	(3,547,377)	-	(3,547,377)
	Conversion of debentures (note	1,081,248	(172,108)	-	-	-	909,140
	11)
	Issuance Costs	(665,963)	-	(213,558)	-	-	(879,521)
	Conversion of warrants (note 7)	2,784	-	(729)	-	-	2,055
	Foreign exchange translation	-	-	-	-	(106,418)	(106,418)
	Balance, March 31, 2021	$288,821,496	$21,128,641	$3,076,252	$(161,304,448)	$ (40,421)	$151,681,520
						Other
			Contributed	Warrant		Comprehensive
		Common Shares	Surplus	Reserve	Deficit	Loss	Total
	Balance, January 1, 2020	$275,676,482	$	$	$ (102,099,860)	$4,976	$ 194,899,695
	17,287,440	4,030,657
	Stock-based payments (note 7)	29,484	309,022	-	-	-	338,506
	Expiry of warrants (note 7)	(264,377)	4,173,146	(3,908,769)	-	-	-
	Net loss for the period	-	-	-	(11,060,904)	-	(11,060,904)
	Other comprehensive loss	-	-	-	-	(30,140)	(30,140)
	Balance, March 31, 2020	$275,441,589	$21,769,608	$121,888	$(113,160,764)	$ (25,164)	$ 184,147,157

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

5