Nextleaf : Condensed Interim Consolidated Financial Statements For the six months ended March 31, 2022

Nextleaf Solutions Ltd.

Condensed Interim Consolidated Financial Statements

For the six months ended

March 31, 2022

Unaudited - Prepared by Management

(Expressed in Canadian Dollars)

NOTICE OF NO AUDITOR REVIEW OF CONDENSED

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

The accompanying unaudited condensed interim consolidated financial statements of Nextleaf Solutions Ltd. ("the Company") for the three and six months ended March 31, 2022 and March 31, 2021, have been prepared by the management of the Company and approved by the Company's Audit Committee and the Company's Board of Directors.

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 an auditor has not reviewed the financial statements.

The accompanying unaudited condensed interim consolidated financial statements of the Company have been prepared by and are the responsibility of the Company's management. The Company's independent auditor has not performed a review of these financial statements in accordance with standards established by CPA Canada for a review of the condensed interim financial statements by an entity's auditor.

Nextleaf Solutions Ltd.

Condensed Interim Consolidated Statements of Financial Position

Unaudited - Prepared by Management (Expressed in Canadian Dollars)

As at March 31, 2022 and September 30, 2021

		March 31,	September 30,
	Note	2022	2021
	$	$
Assets
Current assets
Cash		864,522	915,385
Receivables and prepayments	3	954,503	1,221,174
Inventory	4	2,240,650	1,824,066
		4,059,675	3,960,625
Non-current assets
Deposits		114,773	57,751
Property and equipment	5	4,298,214	4,693,175
Intangible assets	6	348,048	481,204
		4,761,035	5,232,130
Total assets		8,820,710	9,192,755
Liabilities and shareholders' equity
Current liabilities
Accounts payable and accrued liabilities	9	2,607,254	2,476,946
Customer deposits		42,500	42,500
Lease liability - current	5	37,936	35,300
Convertible debenture	7	1,060,926	2,852,122
		3,748,616	5,406,868
Non-current liabilities
Lease liability	5	298,988	318,634
Government loan	15	40,000	40,000
		338,988	358,634
Total liabilities		4,087,604	5,765,502
Shareholders' equity
Share capital	8	25,084,645	22,341,574
Reserves	8	4,150,389	4,085,276
Deficit		(24,501,928)	(22,999,597)
Total shareholders' equity		4,733,106	3,427,253
Total liabilities and shareholders' equity		8,820,710	9,192,755
Nature of operations and going concern	1
Other receivables and contingency	16
Subsequent events	17

Approved on behalf of the Board of Directors on May 30, 2022:

"Paul Pedersen"	Director	"Kevin Keagan"	Director

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

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Nextleaf Solutions Ltd.

Condensed Interim Consolidated Statements of Loss and Comprehensive Loss

Unaudited - Prepared by Management (Expressed in Canadian Dollars)

For the three and six months ended March 31, 2022, and March 31, 2021

		Three months ended	Six months ended
		March 31,	March 31,	March 31,	March 31,
		2022	2021	2022	2021
	Note	$	$	$	$
Revenue
Cannabis concentrate sales		319,602	130,515	743,384	1,387,104
Product sales		825,710	-	1,551,275	-
		1,145,312	130,515	2,294,659	1,387,104
Cost of sales		723,871	609,646	1,529,799	1,806,646
Gross margin		421,441	(479,131)	764,860	(419,542)
Expenses
Accretion/interest on convertible debenture	7	109,976	-	362,929	-
Administrative expenses		114,131	33,628	196,044	120,066
Amortization	6	43,144	87,172	133,156	174,424
Depreciation	5	3,340	3,340	6,680	6,680
Finance costs, net	5	8,567	12,103	17,345	18,864
Investor relations and marketing		76,922	74,941	305,045	193,365
Professional fees and consulting	9	205,847	309,780	464,002	479,042
Research and operational supplies		20,853	5,104	36,800	29,597
Share-based payments	8	-	117,559	-	169,113
Salaries and fees	9	445,578	393,450	792,150	750,770
		(1,028,358)	(1,037,077)	(2,314,151)	(1,941,921)
Gain on disposal of equipment	5	-	16,846	-	16,846
Government assistance	15	-	389,665	22,473	447,463
Loss provision on receivables	16	-	(99,243)	-	(223,296)
Loss on settlement of accounts payable	8	-	-	-	(13,676)
		-	307,268	22,473	227,337
Loss and comprehensive loss for the period		(606,917)	(1,208,940)	(1,526,818)	(2,134,126)
Loss per share
Weighted average number of common shares
outstanding:
Basic #		141,662,416	122,129,475	134,208,739	121,460,597
Diluted #		141,662,416	122,129,475	134,208,739	121,460,597
Basic loss per share		(0.00)	(0.01)	(0.01)	(0.02)
Diluted loss per share		(0.00)	(0.01)	(0.01)	(0.02)

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

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Nextleaf Solutions Ltd.

Condensed Interim Consolidated Statements of Cash Flows

Unaudited - Prepared by Management

(Expressed in Canadian Dollars)

For the six months ended March 31, 2022 and March 31, 2021

		March 31,	March 31,
		2022	2021
	Note	$	$
Operating activities
Loss for the period		(1,526,818)	(2,134,126)
Adjustments for:
Accretion/interest on convertible debenture		362,929	-
Amortization		133,156	174,424
Depreciation		381,204	229,401
Finance costs		17,345	18,864
Share-based payments		-	169,113
Shares issued for services		-	187,390
Gain on disposal of equipment		-	(16,846)
Loss provision on receivables		-	223,296
Loss on settlement of accounts payable		-	13,676
Non-cash working capital items:
Receivables and prepayments		266,671	553,994
Inventory		(401,556)	225,379
Deposits		(57,022)	-
Accounts payable and accrued liabilities		237,868	(495,740)
Customer deposits		-	42,500
		(586,223)	(808,675)
Investing activities
Purchases of property and equipment		(108,831)	(87,508)
Proceeds on disposal of equipment	5	-	47,500
Payments for intangible assets		-	(3,229)
		(108,831)	(43,237)
Financing activities
Lease payments	5	(34,355)	(32,556)
Issuance of convertible debenture	7	-	3,000,000
Repayment of convertible debenture	7	(2,154,125)	-
Transaction costs on convertible debenture	7	-	(30,000)
Issuance of units/common shares, net of share issue costs	8	2,832,671	50,750
		644,191	2,988,194
Change in cash		(50,863)	2,136,282
Cash, beginning of period		915,385	988,675
Cash, end of period		864,522	3,124,957
Supplemental cash flow information	11

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

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