Halo : Q3 2021 Financials

Halo Collective Inc. (formerly Halo Labs Inc.) Condensed Interim Consolidated Financial Statements

For the three and nine months ended September 30, 2021, and 2020 Expressed in US dollars

Unaudited

Halo Collective Inc. (formerly Halo Labs Inc.)

Condensed Interim Consolidated Financial Statements

For the three and nine months ended September 30, 2021, and 2020

Expressed in US dollars

Unaudited

Table of contents

Condensed Interim Consolidated Statements of Financial Position	3
Condensed Interim Consolidated Statements of Loss and Comprehensive Loss	4
Condensed Interim Consolidated Statements of Changes in Shareholders' Equity	5
Condensed Interim Consolidated Statements of Cash Flow	6
Notes to the Condensed Interim Consolidated Financial Statements	7

2

Halo Collective Inc.

Condensed Interim Consolidated Statements of Financial Position

Unaudited, expressed in US dollars

		September 30, 2021	December 31, 2020
Assets
Current
Cash		7,994,749	2,758,119
Restricted cash	Note 16	523,432	921,746
Accounts receivable	Note 8	3,776,731	1,785,372
Inventory	Note 9, 10	18,497,059	10,281,455
Biological assets	Note 10	2,612,208	-
Notes receivable	Note 11	2,669,903	9,629,553
Deposits and pre-paid expenses	Note 12	3,879,198	3,318,061
Total current assets		39,953,280	28,694,306
Long-term
Property, plant and equipment	Note 13	20,998,802	16,230,987
Intangible assets and goodwill	Note 14	85,490,587	39,640,881
Investments and deposits	Note 6	14,544,493	3,188,071
Total long-term assets		121,033,882	59,059,939
Total assets		160,987,162	87,754,245
Liabilities
Short-term liabilities
Accounts payable and accrued liabilities		11,164,864	8,662,179
Debenture liability	Note 16	9,499,688	-
Other loans	Note 18	2,757,608	435,839
Income tax payable	Note 21	590,390	580,720
Sales & cultivation tax payable	Note 21	1,596,045	301,257
Total current liabilities		25,608,595	9,979,995
Long-term liabilities
Debenture liability	Note 16	1,234,960	8,398,727
Lease liability	Note 7	6,219,807	3,157,069
Other loans	Note 18	4,882,460	6,598,912
Total long-term liabilities		12,337,227	18,154,708
Total Liabilities		37,945,822	28,134,703
Shareholders' equity
Share capital	Note 17	221,982,744	136,827,655
Share capital reserve	Note 17	12,969,720	8,307,521
Convertible debenture equity reserve	Note 16	862,630	653,557
Equity reserve	Note 17	7,252,816	3,338,204
Accumulated other comprehensive income		(394,352)	524,779
Deficit		(119,632,218)	(90,032,174)
Total shareholders' equity		123,041,340	59,619,542
Total shareholders' equity and liabilities		160,987,162	87,754,245

These notes are an integral part of the Condensed Interim Consolidated Financial Statements

Going concern Note 2

Commitments and contingencies Note 22

Subsequent events Note 23

Approved on behalf of the Board of Directors:
Kiran Sidhu	Philip van den Berg
CEO and Director	CFO and Director

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						Halo Collective Inc.
	Condensed Interim Consolidated Statements of Loss and Comprehensive Loss
					Unaudited, expressed in US dollars
		For the 3 months ending:		For the 9 months ending:
	September 30, 2021	September 30, 2020	September 30, 2021	September 30, 2020
Revenue		8,738,964		6,829,782		27,813,954		16,521,841
Cost of finished cannabis inventory sold	Note 9, 10	6,996,419		4,675,810		21,330,294		13,098,695
Gross profit, excluding fair value items		1,742,545		2,153,972		6,483,660		3,423,146
Unrealized fair value (gain) loss on growth of biological assets	Note 10	(891,530)		(2,431,481)		(1,063,491)		(2,017,002)
Realized fair value (gain) loss included in the cost of inventory sold	Note 10	994,879		-		1,749,707		-
Gross profit		1,639,196		4,585,453		5,797,444		5,440,148
General and administration		2,845,483		901,195		6,558,321		2,012,695
Salaries		3,738,209		1,176,942		9,139,730		3,265,287
Professional fees		2,862,570		789,372		7,240,884		5,714,179
Sales and marketing		1,316,825		908,368		4,269,940		2,606,710
Investor relations		7,843		(366,862)		515,596		904,241
(Gain) Loss on settlements and contigencies	Note 17, 22	(12,522)		(56,431)		(84,628)		216,357
Share based compensation	Note 17	1,157,203		333,233		4,551,367		1,170,211
Accretion expense		337,095		305,220		967,185		895,920
Loss on intangible assets	Note 14	-		2,876,849		-		4,630,615
Other income		(342,918)		-		(342,918)		-
Depreciation	Note 13, 14	682,790		152,557		1,910,838		661,556
(Gain) loss on foreign exchange		(1,427,049)		412,217		(265,142)		162,737
Interest expense	Note 16, 18	519,776		319,848		1,701,140		949,865
Loss before income taxes		(10,046,109)		(3,167,055)		(30,364,869)		(17,750,225)
Deferred income tax (recovery)	Note 21	-		-		-		295,000
Net loss		(10,046,109)		(3,167,055)		(30,364,869)		(18,045,225)
Other comprehensive income
Unrealized (gain) loss on foreign currency translation		1,628,761		(526,370)		919,131		(230,709)
Comprehensive loss		(11,674,870)		(2,640,685)		(31,284,000)		(17,814,516)
Net loss per share, basic and diluted:	$	(0.40)	$	(0.56)	$	(1.50)	$	(4.12)
Weighted average number of outstanding common shares, basic and		24,918,579		5,653,375		20,277,238		4,383,449
diluted:
These notes are an integral part of the Condensed Interim Consolidated Financial Statements

4

Halo Collective Inc.

Consolidated Statements of Change in Shareholders' Equity

Unaudited, expressed in US Dollars

												Convertible
												conversion		Accumulated
		Common shares Common shares		Options		Warrants	Equity reserve		option		OCI		Deficit		Total
Shareholders' equity, December 31, 2019		2,802,717	$	67,909,461	$	1,649,617	$	3,802,395	$	-	$	655,090	$	(589,124)	$	(49,135,109)	$	24,292,330
Share issuance in private placements	Note17	102,272		711,231		-		-		-		-		-		-		711,231
Share issuance from ATM offering	Note17	97,500		531,442		-		-		-		-		-		-		531,442
Shares issued for acquisitions	Note17	3,611,938		32,396,289		3,368		58,496		-		-		-		-		32,458,153
Shares issued to retire debt	Note17	93,825		920,091		-		-		-		-		-		-		920,091
Shares issued as finders' fees	Note17	151,626		1,178,165		-		-		-		-		-		-		1,178,165
Shares issued on conversion of debenture	Note17	230		10,601		-		-		-		(1,533)		-		-		9,068
Share issue costs	Note17	20,393		(218,226)		-		-		-		-		-		-		(218,226)
Share-based compensation for services	Note17	599,767		5,374,312		-		142,762		-		-		-		-		5,517,074
Share-based compensation for staff	Note17	75,782		623,071		1,164,062		-		-		-		-		-		1,787,133
Shares issued on exercise of warrants and options	Note17	10,000		119,409		-		(51,030)		-		-		-		-		68,379
Obligation to issue shares	Note17	-		-		-		-		121,834		-		-		-		121,834
Reserve for earn-out payments	Note17	-		-		-		-		3,610,686		-		-		-		3,610,686
Forfeiture warrants and options	Note17	-		-		(212,849)		(73,858)		-		-		-		286,707		-
Net loss and other comprehensive loss		-		-		-		-		-		-		230,709		(18,045,225)		(17,814,516)
																		-
Shareholders equity, September 30, 2020		7,566,050	$	109,555,846	$	2,604,199	$	3,878,765	$	3,732,520	$	653,557	$	(358,415)	$	(66,893,627)	$	53,172,845
												Convertible
												conversion		Accumulated
		Common shares Common shares		Options		Warrants	Equity reserve		option		OCI		Deficit		Total
Shareholders' equity, December 31, 2020		14,135,744	$	136,827,655	$	3,892,039	$	4,415,482	$	3,338,204	$	653,557	$	524,779	$	(90,032,174)	$	59,619,542
Share issuance in private placements	Note17	6,013,824		31,378,055		954,319		-		-		-		-		-		32,332,374
Shares issued for acquisitions	Note17	7,162,360		47,785,658		-		-		3,914,612		212,411		-		-		51,912,681
Shares issued to retire debt	Note17	125,000		1,183,319		-		-		-		-		-		-		1,183,319
Shares issued as finders' fees	Note17	491,540		3,398,131		-		-		-		-		-		-		3,398,131
Shares issued on conversion of debenture	Note17	461		23,684		-		-		-		(3,338)		-		-		20,346
Share issue costs	Note17	-		(1,747,479)		-		-		-		-		-		-		(1,747,479)
Share-based compensation for services	Note17	608,378		2,313,097		-		438,672		-		-		-		-		2,751,769
Share-based compensation for staff	Note17	91,355		437,385		4,169,985		-		-		-		-		-		4,607,370
Shares issued on exercise of warrants and options	Note17	42,860		383,239		(135,952)		-		-		-		-		-		247,287
Forfeiture warrants and options	Note17	-		-		(134,308)		(630,517)		-		-		-		764,825		-
Net loss and other comprehensive loss		-		-		-		-		-		-		(919,131)		(30,364,869)		(31,284,000)
Shareholders equity, September 30,2021		28,671,522	$	221,982,744	$	8,746,083	$	4,223,637	$	7,252,816	$	862,630	$	(394,352)	$	(119,632,218)	$	123,041,340

These notes are an integral part of the Condensed Interim Consolidated Financial Statements

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