Halo : Q3 2022 Financials

Halo Collective Inc.

Condensed Interim Consolidated Financial Statements

For the three and nine months ended September 30, 2022, and 2021 Expressed in US dollars

Unaudited

Notice of No Auditor Review of

Condensed Interim Consolidated Financial Statements

Under National Instrument 51-102, Part 4, subsection 4.3(3)(a), if an auditor has not performed a review of the condensed interim consolidated financial statements, they must be accompanied by a notice indicating that the interim financial statements have not been reviewed by an auditor.

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 condensed interim consolidated financial statements, in accordance with standards established by the Canadian Institute of Chartered Professional Accountants for a review of interim financial statements by an entity's auditor.

2

Halo Collective Inc.

Condensed Interim Consolidated Financial Statements

For the three and nine months ended September 30, 2022, and 2021

Expressed in US dollars

Unaudited

Table of contents

Condensed Interim Consolidated Statements of Financial Position	4
Condensed Interim Consolidated Statements of Loss and Comprehensive Loss	5
Condensed Interim Consolidated Statements of Changes in Shareholders' Equity	6
Condensed Interim Consolidated Statements of Cash Flow	7-8
Notes to the Condensed Interim Consolidated Financial Statements	9-36

3

Halo Collective Inc.

Condensed Interim Consolidated Statements of Financial Position

Expressed in US dollars

		September 30, 2022	December 31, 2021
Assets
Current
Cash		1,711,855	1,711,677
Restricted cash	Note 12	-	126,947
Accounts receivable	Note 6	5,168,004	6,073,229
Inventory	Note 7	14,891,935	16,820,432
Biological assets	Note 8	1,582,435	-
Notes receivable	Note 9	2,276,648	7,775,433
Deposits and pre-paid expenses	Note 10	9,259,841	3,208,452
Total current assets		34,890,718	35,716,170
Long-term
Property, plant and equipment		12,914,690	17,512,938
Intangible assets and goodwill		37,672,629	29,131,934
Notes receivable	Note 9	2,942,216	3,160,745
Investments and deposits	Note 5	22,548,439	19,275,132
Total long-term assets		76,077,974	69,080,749
Total assets		110,968,692	104,796,919
Liabilities
Short-term liabilities
Accounts payable and accrued liabilities		12,310,760	11,634,468
Debenture liability	Note 12	-	9,661,212
Other loans	Note 14	3,606,474	6,875,442
Income tax payable		583,010	585,689
Sales & cultivation tax payable		1,934,282	1,530,447
Total current liabilities		18,434,526	30,287,258
Long-term liabilities
Debenture liability	Note 12	9,434,693	1,286,625
Lease liability		4,795,336	5,665,582
Other loans	Note 14	1,076,136	1,100,975
Total long-term liabilities		15,306,165	8,053,182
Total Liabilities		33,740,691	38,340,440
Shareholders' equity
Share capital	Note 13	273,080,293	231,683,918
Share capital reserve	Note 13	10,557,561	12,953,614
Convertible debenture equity reserve	Note 12	2,703,997	862,630
Equity reserve	Note 13	6,302,397	6,302,397
Non-controlling interest	Note 18	(2,965,451)	(2,295,905)
Accumulated other comprehensive income		(2,912,635)	214,544
Deficit		(209,538,161)	(183,264,719)
Total shareholders' equity		77,228,001	66,456,479
Total shareholders' equity and liabilities		110,968,692	104,796,919
These notes are an integral part of the Condensed Interim Consolidated Financial Statements
Going concern Note 2
Commitments and contingencies Note 17
Subsequent events Note 19
Approved on behalf of the Board of Directors:
Katie Field		Marshall Minor
CEO and Director		Interim CFO

4

Halo Collective Inc. Condensed Interim Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)

Expressed in US dollars

		For the 3 months ended:		For the 9 months ended:
	September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021
Revenue		5,541,144		8,738,964		19,973,252		27,813,954
Cost of finished cannabis inventory sold	Note 7	3,816,905		6,996,419		14,640,941		21,330,294
Gross profit, excluding fair value items		1,724,239		1,742,545		5,332,311		6,483,660
Unrealized fair value gain on growth of biological assets		-		(891,530)		-		(1,063,491)
Realized fair value loss included in the cost of inventory sold		23,377		994,879		190,130		1,749,707
Gross profit		1,700,862		1,639,196		5,142,181		5,797,444
General and administration		821,681		2,845,483		4,161,912		6,558,321
Salaries		1,944,012		3,738,209		8,591,595		9,139,730
Professional fees		2,578,988		2,862,570		10,759,658		7,240,884
Sales and marketing		789,804		1,316,825		2,818,386		4,269,940
Investor relations		15,910		7,843		247,086		515,596
Gain on settlements and contigencies	Note 13, 17	28,494		(12,522)		(278,968)		(84,628)
Share based compensation	Note 13	(6,341)		1,157,203		713,559		4,551,367
Accretion expense		181,499		337,095		1,148,587		967,185
Other expense		844,974		(342,918)		986,224		(342,918)
Share of loss from investment in associates	Note 5	1,176,547		-		3,345,987		-
Depreciation		503,006		682,790		1,623,474		1,910,838
(Gain) Loss on foreign exchange		(1,914,425)		(1,427,049)		(1,952,176)		(265,142)
Loss on the sale of Land		-		-		867,770		-
Interest expense	Note 12, 14	510,167		519,776		3,087,181		1,701,140
Loss before income taxes		(5,773,454)		(10,046,109)		(30,978,094)		(30,364,869)
Income tax		43,941		-		57,331		-
Net loss		(5,817,395)		(10,046,109)		(31,035,425)		(30,364,869)
Other comprehensive (income) loss
Unrealized (gain) loss on foreign currency translation		3,629,248		1,628,761		3,127,179		919,131
Comprehensive loss		(9,446,643)		(11,674,870)		(34,162,604)		(31,284,000)
Net comprehensive loss attributable to:
Halo Collective Inc.		(5,633,859)		(10,046,109)		(30,365,879)		(30,364,869)
Non-controlling interests	Note 18	(183,536)		-		(669,546)		-
Net loss per share, basic and diluted:	$	(0.23)	$	(806.31)	$	(2.66)	$	(2,994.97)
Weighted average number of outstanding common shares,		25,305,629		12,459		11,662,260		10,139
basic and diluted:

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

5