Harvest One Cannabis Inc.
Combined Consolidated financial statements of
Harvest One Cannabis Inc.
For the years ended June 30, 2017 and 2016
Harvest One Cannabis Inc.
Table of contents
Independent auditor's report ......................................................................................................... 2 Combined consolidated statements of financial position .............................................................. 3 Combined consolidated statements of loss and other comprehensive loss ................................. 4 Combined consolidated statements of changes in equity ............................................................. 5 Combined consolidated statements of cash flows ........................................................................ 6 Notes to the combined consolidated financial statements ....................................................... 7-30
Tel: 604 688 5421 Fax: 604 688 5132 bdo.ca
BDO Canada LLP 600 Cathedral Place 925 West Georgia Street Vancouver BC V6C 3L2 Canada
Independent Auditor's Report
To the Shareholders of Harvest One Cannabis Inc. We have audited the accompanying combined consolidated financial statements of Harvest One Cannabis Inc., which comprise the combined consolidated statement of financial position as at June 30, 2017 and the combined consolidated statements of loss and comprehensive loss, changes in equity and cash flows for the year then ended and a summary of significant accounting policies and other explanatory information.
Management's Responsibility for the Combined Consolidated Financial Statements Management is responsible for the preparation and fair presentation of these combined consolidated financial statements in accordance with International Financial Reporting Standards and for such internal control as management determines is necessary to enable the preparation of combined consolidated financial statements that are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility Our responsibility is to express an opinion on these combined consolidated financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the combined consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the combined consolidated financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the combined consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the combined consolidated financial statements 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 entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the combined consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion In our opinion, the combined consolidated financial statements present fairly, in all material respects, the financial position of Harvest One Cannabis Inc. as at June 30, 2017 and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards.
Emphasis of Matter Without qualifying our opinion, we draw attention to Note 1 in the combined consolidated financial statements, which indicates that the Company has a net loss, negative operating cash outflows and an accumulated deficit. These conditions, along with other matters as set forth in Note 1, indicate the existence of material uncertainties that may cast significant doubt upon the Company's ability to continue as a going concern.
Other Matter The combined financial statements of United Greeneries Holdings Limited and Satipharm AG for the year ended June 30, 2016 were audited by another auditor who expressed an unmodified opinion on those combined financial statements on April 18, 2017.
(signed) "BDO CANADA LLP"
Chartered Professional Accountants Vancouver, Canada September 28, 2017
BDO Canada LLP, a Canadian limited liability partnership, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms.
Page 2
Harvest One Cannabis Inc.
Combined consolidated statements of financial position
(Expressed in Canadian dollars)
Assets Current assets
Cash and cash equivalents Accounts receivable (note 5) Prepaid expenses and deposits Biological assets (note 6) Inventories (note 7)
Non-current asset Property, plant and equipment (note 8) Intangibles
Liabilities Current liabilities
Accounts payable and accrued liabilities (note 9) Notes payable (note 10) Due to related party (note 11)
Non-current liabilities Notes payable (note 10)
Equity Share capital (note 12) Other reserves (note 13) Accumulated other comprehensive (loss) income Accumulated deficit
Nature of operations and going concern (note 1) Commitments (note 17)
"Jason Bednar" Jason Bednar, Director
June 30 2017
$
June 30 2016
$
14,246,320 180,041 115,876 110,489
1,213,684 15,866,410
8,225,514 31,165
8,256,679
24,123,089
880,337 317,319
20,987 -
520,073 1,738,716
6,032,678 -
6,032,678
7,771,394
766,948 -
234,390 1,001,338
278,835 88,633
8,486,056 8,853,524
1,001,338
383,848 9,237,372
33,843,668 3,397,775 (89,019 )
(14,030,673 ) 23,121,751 24,123,089
4,859,005 197,143 9,990
(6,532,116 ) (1,465,978 ) 7,771,394
"Andreas Gedeon" Andreas Gedeon, Director
Page 3
The accompanying notes are an integral part of these combined consolidated financial statements.
Harvest One Cannabis Inc.
Combined consolidated statements of loss and comprehensive loss
(Expressed in Canadian dollars)
Revenue (note 16) Unrealized gain on changes in fair value of biological assets (note 6) Inventory expensed to cost of sales Cost of goods sold, net of unrealized gain on changes in fair value of biological assets Gross profit (loss)
Operating expenses Depreciation and amortization (note 8) General and administration Insurance Marketing and investor relations Professional and consulting services Rent Salaries, bonus and benefits Share-based payments (note 13) Regulatory Travel (Gain) loss relating to inventory impairment (note 7)
Loss from operations
Settlement cost (note 12(b)) Finance costs Foreign exchange loss Listing fee (note 2) Interest income Net loss
Foreign currency translation
Comprehensive loss
Net loss per share ? basic and diluted Weighted average number of outstanding common shares
For the year ended June 30
2017 $
June 30 2016
$
75,950 278,601 (102,180)
246,699 -
(319,827 )
176,421 252,371
(319,827 ) (73,128 )
1,095,754 493,327 44,775 470,608 785,215 172,062 780,396
1,894,356 360,043 406,254
(103,417) 6,399,373 (6,147,002)
(149,387 )
(69,297 ) (2,097,509 )
24,970 (8,438,225 )
(99,009 )
(8,537,234 )
(0.16) 53,797,482
26,963 335,480
46,294 30,835 185,151 172,802 793,516 197,143 123,100 18,660 878,000 2,807,944 (2,881,072 )
(375,000 ) (123,414 )
(19,700 ) -
5,814 (3,393,372 )
9,990
(3,383,382 )
(0.07) 50,916,423
Page 4
The accompanying notes are an integral part of these combined consolidated financial statements.
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