CBD Global Sciences Inc. — Interim / Quarterly Report 2021

Sep 17, 2021

CBD Global Sciences Inc.

Condensed Interim Consolidated Financial Statements For the Three Months Ended March 31, 2021 and 2020

(Expressed in United States dollars)

(Unaudited)

NOTICE OF NO AUDITOR REVIEW OF CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

The accompanying unaudited condensed interim consolidated financial statements of CBD Global Sciences Inc. (the “Company”) have been prepared by management in accordance with International Financing Reporting Standards (“IFRS”). These condensed interim consolidated financial statements, which are the responsibility of management, are unaudited and have not been reviewed by the Company’s auditors. The Company’s Audit Committee and Board of Directors have reviewed and approved these condensed interim consolidated financial statements. In accordance with the disclosure requirements of National Instrument 51-102 released by the Canadian Securities Administrators, the Company’s independent auditors have not performed a review of these condensed interim consolidated financial statements .

CBD Global Sciences Inc.

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

	Notes March 31, 2021 December 31, 2020
ASSETS Current assets Cash Amounts receivable Prepaid expenses Inventory	$ 4,433 $ 541 3,247 2,845 176,357 304,719 6 19,439 -
Total current assets Deferred financing fees Property and equipment	203,476 308,105 70,465 84,372 7 - 80,000
Total assets	$ 273,941 $ 472,477
LIABILITIES AND SHAREHOLDERS’ DEFICIENCY Current liabilities Accounts payable and other liabilities Customer deposit Due to related parties Notes payable Lease liabilities Obligation to issue shares Derivative liability Liabilities subject to compromise	8,13 $ 486,184 $ 1,878,496 - 25,000 13 11,776 43,012 9 358,940 394,271 10 - 834,847 12 248,515 218,515 11 287,192 154,160 4 4,061,735 -
Total current liabilities Due to related parties Convertible debt Lease liabilities Notes payable	5,454,342 3,548,301 13 - 1,212,135 11 4,012,569 3,884,070 10 - 71,801 9 5,569 31,578
Total liabilities	9,472,480 8,747,885
Shareholders’ deficiency Share capital Obligation to issue shares Preferred shares Capital reserves Deficit	12 6,560,587 6,560,587 12 294,177 131,705 12 2,079,237 2,079,237 12 4,266,475 4,120,815 (22,399,015) (21,167,752)
Total shareholders’deficiency	(9,198,539) (8,275,408)
Total liabilities and shareholders’ deficiency	$ 273,941 $ 472,477
Nature of operations and going concern (Note 1) Subsequent events (Note 18)

Approved and authorized by the Board of Directors on September 16, 2021: “Brad Wyatt” Director “Glenn Dooley” Director

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

CBD Global Sciences Inc.

Condensed Interim Consolidated Statements of Loss and Comprehensive Loss For the three months ended March 31, 2021 and 2020

(Expressed in United States dollars)

(Unaudited)

Notes	2021 2020
Sales 14 $	15,385 $ 148,094
Cost of sales Cost of sales 6	44,163 96,638
Gross profit (loss)	(28,778) 51,456
Accretion expense 9,11,13 Change in fair value of derivative liability 11 Consulting fees Depreciation 7 Foreign exchange loss (gain) Finance fees General and administrative expenses 15 Interest expense Interest income Marketing, sales and distribution Research and development (recovery) Share-based payments 12,13	171,012 138,094 133,032 - 137,359 51,246 - 51,132 445 (231) 15,753 - 362,731 266,895 78,080 189,477 (493) (583) 176,057 7,091 6,400 (6,360) 80,573 -
Total operating expenses	1,160,949 696,761
Loss from continuing operation Loss from discontinued operations 5	(1,189,727) (645,305) (41,536) (56,530)
Net loss and comprehensive loss $	(1,231,263) $ (701,835)
Weighted average number of shares–basic and diluted	34,525,758 28,739,169
Loss per share–basic and diluted $	(0.04) $ (0.02)
Loss from continuing operations per share – basic and diluted $	(0.03) $ (0.02)
Loss from discontinued operations per share – basic and diluted $	(0.00) $ (0.00)

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

CBD Global Sciences Inc.

Condensed Interim Consolidated Statement of Changes in Shareholders’ Deficiency

For the three months ended March 31, 2021 and 2020 (Expressed in United States dollars) (Unaudited)

Notes	Share capital Number of common shares Amount Number of preferred shares Preferred shares amount Obligation to issue shares Capital reserves Deficit Total shareholders’ equity (deficiency)
Balance, December 31, 2019 Shares issued pursuant to private placement 12 Issuance of warrants for debt 12 Discount to related party notes 13 Net loss for the period	27,605,672 $ 5,128,884 316,784 $ 2,079,237 $ 944,842 $ 2,928,862 $ (12,240,050) $ (1,158,225) 3,035,000 903,085 - - (786,015) - - 117,070 - - - - - 3,498 - 3,498 - - - - - 72,342 - 72,342 - - - - - - (701,835) (701,835)
Balance, March 31, 2020	30,640,672 $ 6,031,968 316,784 $ 2,079,237 $ 158,827 $ 3,004,702 $ (12,941,885) $ (1,667,150)
Balance, December 31, 2020 Share-based payments 12 Discount to related party notes 13 Equity portion of convertible debenture 11 Net loss for the period	34,525,758 $ 6,560,587 316,784 $ 2,079,237 $ 131,705 $ 4,120,815 $ (21,167,752) $ (8,275,408) - - - - 162,472 80,573 - 243,045 - - - - - 63,609 - 63,609 - - - - - 1,478 - 1,478 - - - - - - (1,231,263) (1,231,263)
Balance, March 31, 2021	34,525,758 $ 6,560,587 316,784 $ 2,079,237 $ 294,177 $ 4,266,475 $ (22,399,015) $ (9,198,539)

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

CBD Global Sciences Inc.

Condensed Interim Consolidated Statements of Cash Flows For the three months ended March 31, 2021 and 2020 (Expressed in United States dollars) (Unaudited)

	2021 2020
Operating activities Net loss for the period $ Items not affecting cash: Change in fair value of derivative liability Accretion Depreciation Finance fees Interest expense Share-based payments Shares issued for services Non-cash working capital items: Amounts receivable Prepaid expenses Inventory Accounts payable and other liabilities	(1,231,263)$ (701,835) 133,032 - 171,012 138,094 - 76,008 13,907 - 58,911 84,555 80,573 - 162,472 - (402) 120,197 126,278 187 (19,439) (53,342) (14,801) 57,534
Net cash used in operating activities	(519,720) (278,602)
Investing activities Proceeds on sales of assets under construction	80,000 -
Net cash provided by investing activities	80,000 -
Financing activities Proceeds from issuance of notes payable Repayment of notes payable Lease repayments Proceeds from issuance of shares Proceeds from shares to be issued Loans from related parties Government assistance	- 375,000 (34,317) (100,000) (12,166) (7,847) - 117,069 30,000 - 325,000 20,274 135,095 -
Net cash provided by financing activities	443,612 404,496
Change in cash Cash, beginning of the period	3,892 125,894 541 21,598
Cash, end of theperiod $	4,433$ 147,492

Supplemental cash flow information (Note 16)

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

CBD Global Sciences Inc. Notes to Condensed Interim Consolidated Financial Statements For the three months ended March 31, 2021 and 2020 (Expressed in United States dollars) (Unaudited)

1. NATURE OF OPERATIONS AND GOING CONCERN

CBD Global Sciences Inc. (the “Company” or “CBD Global”) is in the business of producing and selling industrial hemp derived cannabidiol (“CBD”) infused consumable and topical products. The Company’s head office, principal address and records office is located at 225 Union Boulevard, Suite 350, Lakewood, Colorado, 80228. The registered office in Nevada is located at 1085 Pleasure Lane, Henderson, Nevada, 89002 and 2754 Rockbridge Dr., Highlands Ranch, CO 80126 for Colorado.

During the three months ended March 31, 2021, two of the Company’s subsidiaries, Global NV Corp. (“Global NV”) and Strasburg Pharms, LLC, filed for protection under the Bankruptcy Code as a result of claims filed against Global NV by a former landlord during the year ended December 31, 2020 (Note 4). Prior to filing for bankruptcy, the Company’s position was to defend these claims; however the landlord became an aggressive creditor. In connection with the bankruptcy, a trustee has been appointed on behalf of the Company to liquidate assets and discharge the outstanding liabilities of Global NV and Strasburg Pharms LLC. The bankruptcy process will potentially allow the Company to implement operational and commercial plans to reposition the Company for future growth.

These condensed interim consolidated financial statements have been prepared on the basis of accounting principles applicable to a going concern, which assumes that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of operations. To date, the Company has incurred losses and will incur further losses in the development of its business. As at March 31, 2021, the Company had working capital deficit of $5,250,866 and an accumulated deficit of $22,399,015.

These factors, including the Company’s financial position, liquidity and the uncertain outcome of the matters arising from the bankruptcy proceedings, indicate the existence of a material uncertainty that may cast significant doubt about the Company’s ability to continue as a going concern.

The Company’s ability to continue its operations and to realize assets at their carrying values is dependent upon its ability to raise financing and generate profits and positive cash flows from operations in order to cover its operating costs. From time to time, the Company generates working capital to fund its operations by raising additional capital through equity or debt financing. However, there is no assurance it will be able to continue to do so in the future. These condensed interim consolidated financial statements do not give effect to any adjustments required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts different from those reflected in the accompanying condensed interim consolidated financial statements.

The outbreak of the coronavirus, also known as "COVID-19", has spread across the globe and is impacting worldwide economic activity. Conditions surrounding the coronavirus continue to evolve and government authorities have implemented emergency measures to mitigate the spread of the virus. The outbreak and the related mitigation measures may have an adverse impact on global economic conditions as well as on the Company’s business activities. The extent to which the coronavirus may impact the Company’s business activities will depend on future developments, such as the ultimate geographic spread of the disease, the duration of the outbreak, travel restrictions, business disruptions, and the effectiveness of actions taken in Canada and other countries to contain and treat the disease. These events are highly uncertain and as such, the Company cannot determine their financial impact at this time.

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CBD Global Sciences Inc. Notes to Condensed Interim Consolidated Financial Statements For the three months ended March 31, 2021 and 2020 (Expressed in United States dollars) (Unaudited)

2. BASIS OF PRESENTATION

These unaudited condensed interim consolidated financial statements have been prepared by management of the Company in accordance with International Accounting Standard (“IAS”) 34, “Interim Financial Reporting”, following the same accounting principles and methods of computation as outlined in the Company’s consolidated financial statements for the year ended December 31, 2020. A description of accounting standards and interpretations that have been adopted by the Company can be found in the notes to the consolidated financial statements for the year ended December 31, 2020. These unaudited condensed interim consolidated financial statements include all necessary disclosures required for interim financial statements but do not include all disclosures required for annual financial statements. Therefore, these unaudited condensed interim consolidated financial statements should be read in conjunction with the most recent audited annual consolidated financial statements and the notes thereto for the year ended December 31, 2020.

The condensed interim consolidated financial statements of the Company have been prepared on an accrual basis and are based on historical costs except for certain financial instruments which are measured at fair value. The condensed interim consolidated financial statements are presented in United States dollars, unless otherwise noted, which is the functional currency of the Company and its subsidiaries.

These condensed interim consolidated financial statements include the financial statements of the Company and entities controlled by the Company. Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The financial statements of the Company’s subsidiaries are included in these condensed interim consolidated financial statements. All intercompany balances and transactions, income and expenses have been eliminated upon consolidation. The Company’s subsidiaries are:

Name of subsidiary	Place of incorporation	Proportion of ownership	Principal activity
Strasburg Pharms, LLC	Colorado	100%	Farming operations
Global NV Corp.	Colorado	100%	CBD oil product sales
CannaOil, Inc.	Colorado	100%	CBD oil product sales
SMBT, LLC	Colorado	100%	CBD oil product sales
Global Sciences IP, LLC	Nevada	100%	Intellectual property
Dog Unleashed CBD, LLC	Colorado	100%	CBD oil product sales
Legacy Distribution Group LLC	Colorado	100%	CBD oil product sales
EnergyUnleased LLC	Colorado	100%	CBD oilproduct sales

3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

The preparation of these condensed interim consolidated financial statements requires management to make estimates, judgements and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed interim consolidated financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates. These condensed interim consolidated financial statements include estimates that, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the condensed interim consolidated financial statements and may require accounting adjustments based on future occurrences.

Other than noted below, the critical accounting estimates and judgements applied in these condensed interim consolidated financial statements are consistent with those applied and disclosed in the Company’s audited consolidated financial statements for the year ended December 31, 2020.

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CBD Global Sciences Inc. Notes to Condensed Interim Consolidated Financial Statements For the three months ended March 31, 2021 and 2020 (Expressed in United States dollars) (Unaudited)

3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (Continued)

Liabilities subject to compromise

Pursuant to Global NV and Strasburg Pharms, LLC filing for protection under the Bankruptcy Code (Note 4), the Court rendered a claims process order establishing the rules for creditors to submit a proof of claim. All claims are determined as at March 23, 2021. As of the date of the approval of these condensed interim consolidated financial statements, it is currently not possible to determine the quantum of the claims that will ultimately be allowed by the Court. Therefore, amounts identified as liabilities subject to compromise were based on the information available, which management believes to be reasonable under the circumstances. Such estimates and assumptions are adjusted when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Liabilities subject to compromise represent the Company’s best estimate of liabilities that will ultimately be subject to compromise to the Company’s creditors.

4. BANKRUPTCY PROCEEDINGS

During the three months ended March 31, 2021, Global NV and Strasburg Pharms, LLC filed for protection under the Bankruptcy Code as a result of claims against Global NV by a former landlord. The subsidiaries initially filed for protection on March 23, 2021 under Chapter 11 of the Bankruptcy Code and subsequently converted the case to Chapter 7 of the Bankruptcy Code on May 7, 2021. In connection with the bankruptcy, a trustee has been appointed on behalf of the Company to liquidate assets and discharge the outstanding liabilities of Global NV and Strasburg Pharms LLC. This liquidation process is ongoing.

As at March 31, 2021, total assets presented in the consolidated statement of financial position do not include amounts for Global NV or Strasburg Pharms on the basis that the entities did not maintain the rights to or control of assets as a result of commencing bankruptcy proceedings on March 23, 2021.

In connection with the bankruptcy proceedings, the Company identified the following liabilities subject to compromise:

		March 31,
		2021
Accounts payable and other liabilities (Note 8)	$	1,388,070
Due to related parties (Note 13)		1,590,688
Lease liabilities (Note 10)		895,619
Notes payable (Note 9)		162,358
Customer deposits		25,000
Total	$	4,061,735

Liabilities that are not subject to the bankruptcy proceedings are excluded from the liabilities subject to compromise. Liabilities incurred after the start of the bankruptcy proceedings are not subject to compromise.

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CBD Global Sciences Inc. Notes to Condensed Interim Consolidated Financial Statements For the three months ended March 31, 2021 and 2020 (Expressed in United States dollars) (Unaudited)

5. DISCONTINUED OPERATIONS

As a result of the bankruptcy proceedings and other related challenges (Note 4), the Company discontinued its farming and processing operations which were primarily performed by Strasburg Pharms, LLC.

During the three months ended March 31, 2021, the Company incurred farming and processing related expenses of $41,536 (2020 - $56,530) which have been presented as discontinued operations in the condensed interim consolidated statements of loss and comprehensive loss. The comparative period ended March 31, 2020 has been re-presented to show discontinued operations separately from continuing operations.

Net cash flows used in operating activities for the three months ended March 31, 2021 include $41,536 (2020 - $56,530) attributable to discontinued operations.

6. INVENTORY

As at March 31, 2021, inventory is comprised of Cannabidiol oil products in the amount of $19,439 (December 31, 2020 - $Nil).

During the three months ended March 31, 2021, the Company recognized $44,163 (2020 - $96,638) of inventory expensed to cost of goods sold.

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CBD Global Sciences Inc.

Notes to Condensed Interim Consolidated Financial Statements For the three months ended March 31, 2021 and 2020 (Expressed in United States dollars) (Unaudited)

7. PROPERTY AND EQUIPMENT

	Farm tools & equipment Greenhouses Assets under construction Leasehold improvements Land Lease assets Total
Cost Balance, December 31, 2019 $ Impairment of assets Disposals	517,804 $ 230,477 $ 185,575 $ 15,628 $ 726,769 $ 956,653 $ 2,632,906 (517,804) (230,477) (105,575) (15,628) - (956,653) (1,826,137) - - - - (726,769) - (726,769)
Balance, December 31, 2020 Disposals	- - 80,000 - - - 80,000 - - (80,000) - - - (80,000)
Balance, March 31, 2021 $	- $ - $ -$ -$ -$ - $ -
Accumulated Depreciation Balance, December 31, 2019 $ Depreciation Impairment of assets	194,607 $ 59,486 $ - $ 2,970 $ - $ 177,791 $ 434,854 70,049 16,285 - 2,531 - 71,096 159,961 (264,656) (75,771) - (5,501) - (248,887) (594,815)
Balance, December 31, 2020 Depreciation	- - - - - - - - - - - - - -
Balance, March 31, 2021 $	- $ - $ -$ -$ -$ - $ -
Net Book Value At December 31, 2020 $	-$ -$ 80,000$ -$ -$ - $ 80,000
At March 31, 2021 $	- $ - $ -$ -$ -$ - $ -

During the three months ended March 31, 2021, the Company sold assets under construction for proceeds of $80,000 pursuant to an asset purchase agreement.

During the three months ended March 31, 2021, depreciation of $nil (2020 - $24,876) was included in cost of sales.

During the year ended December 31, 2020, the Company entered into an agreement to sell two parcels of land for a total of 140 acres with a carrying value of $638,504 for a sale price of $700,000. Outstanding notes payable which were secured by these land parcels and totaled $583,232 were repaid from the sale proceeds (Note 9). The Company received net cash proceeds of $55,273 after deducting $61,495 in commissions and taxes. As a result of the sale, the Company recorded a loss on disposal of $88,265.

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CBD Global Sciences Inc. Notes to Condensed Interim Consolidated Financial Statements For the three months ended March 31, 2021 and 2020 (Expressed in United States dollars) (Unaudited)

7. PROPERTY AND EQUIPMENT (Continued)

During the year ended December 31, 2020, the Company recorded an impairment loss in the amount of $707,766 related to leased assets that were abandoned (Note 10).

During the year ended December 31, 2020, the Company recorded further impairment of $523,556 due to concerns and uncertainty with respect to pending bankruptcy proceedings (Note 4).

8. ACCOUNTS PAYABLES AND OTHER LIABILITIES

		March 31,		December 31,
		2021		2020
Trade payables	$	307,275	$	1,059,411
Accrued liabilities		133,729		771,112
Accrued interest		45,180		47,973
	$	486,184	$	1,878,496

As at March 31, 2021, accounts payables and other liabilities totaling $1,388,070 were reclassified to liabilities subject to compromise (Note 4), including trade payables of $718,508, accrued liabilities of $659,831 and accrued interest of $9,731.

9. NOTES PAYABLE

					**March 31, **	2021	December	December	31,2020
	Nominal
	interest	Date of			Face	Carrying	Face		Carrying
	rate	maturity			value	amount	value		amount
Promissory note	-	8/31/2020	(d)		3,173	3,173	18,173		18,173
Promissory note	-	12/27/2019	(e)		86,098	86,098	101,098		101,098
Promissory note	8.0%	10/1/2020	(f)		100,000	100,000	100,000		100,000
Promissory note	45.0%	4/23/2020	(g)		172,842	172,842	175,000		175,000
Promissory note	3.75%	6/3/2050	(h)		18,218	5,569	18,073		5,329
Promissory note	8.0%	9/1/2023	(i)		24,090	24,090	26,249		26,249
PPP loan	0.98%	5/22/2022	(j)		135,095	135,095	-		-
Total				$	539,516 $	526,867$	438,593	$	425,849
Reclassify to liabilities subject		to compromise
(Note 4)					(162,358)	(162,358)	-		-
Current					(358,940)	(358,940)	(394,271)		(394,271)
Long-term				$	18,218$	5,569$	44,322	$	31,578

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CBD Global Sciences Inc.

Notes to Condensed Interim Consolidated Financial Statements For the three months ended March 31, 2021 and 2020 (Expressed in United States dollars) (Unaudited)

9. NOTES PAYABLE (Continued)

	Face value Carrying value
Balance, December 31, 2019 $ Issued during the year Transaction costs Government assistance Accretion Interest Repayment of principal Proceeds on sale of land applied to repay principal	827,047 $ 825,477 421,030 421,030 - (3,498) - (12,989) - 5,313 377 377 (226,629) (226,629) (583,232) (583,232)
Balance, December 31, 2020 Issued during the period Accretion Interest Repayment of principal Reclassify to liabilities subject to compromise (Note 4)	438,593 425,849 135,095 135,095 - 95 145 145 (34,317) (34,317) (162,358) (162,358)
Balance, March 31, 2021 $	377,158 $ 364,509

• The difference between the face value and the carrying amount is attributed to the discount to approximate fair value using the assumptions described below.

• a) On May 25, 2017, an investor advanced $100,000 to the Company in exchange for a one-year promissory note and a 1.5% unit in the gross sales amount of the 2017 outdoor harvest due when sold in 2018. The note was secured by land owned by a company controlled by the President of the Company at the time, bore an interest rate of 10% per annum, required monthly interest payments, and a lump sum payment at the maturity date of May 25, 2018. On May 15, 2018, the terms of this note were renegotiated as follows: interest rate of 12% per annum from May 25, 2018, monthly payments of interest and principal starting August 1, 2018, maturing on June 30, 2019. The maturity date may be extended year to year upon written agreement between the parties. The note was secured by the 60-acre parcel of land acquired by the Company on May 10, 2018.

During the year ended December 31, 2020, the Company issued 40,172 common shares to settle $10,043 of accrued interest on the note.

During the year ended December 31, 2020, the Company sold the parcel of land secured by this promissory note and repaid the promissory note from the sale proceeds (Note 7).

• b) On May 10, 2018, the Company acquired a 60-acre parcel of farmland. In consideration for the land, the Company assumed a $210,000 note payable from a company controlled by the President and the Chief Operating Officer of the Company. The note was secured by the 60-acre parcel of land and bore interest at a rate of 12.5% per annum, with payments of interest only due monthly and maturing on May 19, 2019. On March 15, 2019, the Company entered into an agreement to extend the maturity date of the note to March 15, 2021. In connection with this agreement, the Company issued 1,715 common shares for consideration of the extension.

During the year ended December 31, 2020, the Company sold the parcel of land secured by this promissory note and repaid the promissory note from the sale proceeds (Note 7).

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CBD Global Sciences Inc. Notes to Condensed Interim Consolidated Financial Statements For the three months ended March 31, 2021 and 2020 (Expressed in United States dollars) (Unaudited)

9. NOTES PAYABLE (Continued)

• c) On May 10, 2018, the Company acquired an 80-acre parcel of farmland. In consideration for the land, the Company assumed a $280,000 note payable from a company controlled by the President of the Company and the Chief Operating Officer of the Company. The note was secured by the 80-acre parcel of land and bore interest at a rate of 12.5% per annum, with payments of interest only due monthly and maturing on March 1, 2019. On March 15, 2019, the Company entered into an agreement to extend the maturity date of the note to March 15, 2021. In connection with this agreement, the Company issued 2,285 common shares for consideration of the extension.

During the year ended December 31, 2020, the Company sold the parcel of land secured by this promissory note and repaid the promissory note from the sale proceeds (Note 7).

• d) On July 18, 2019, an investor advanced $200,000 in exchange for a promissory note. The principal and a lump sum interest payment of $41,600 were due at maturity on August 31, 2020. The note is secured against the Company’s biomass inventory and proceeds from the sale of biomass through a Biomass Processing Agreement. In connection with the promissory note, the Company incurred a financing fee of $8,000. As at March 31, 2021, the loan was in default; and as a result of the default the outstanding principal balance accrues interest at a rate of 36% per annum effective September 5, 2020.

During the period ended March 31, 2021, the Company paid principal and interest of $15,000 (December 31, 2020 – $49,855) and $Nil (December 31, 2020 – $25,163), respectively.

As at March 31, 2021, principal and accrued interest balances of $3,173 and $4,965, respectively, were reclassified to liabilities subject to compromise from notes payable and accounts payable and accrued liabilities, respectively (Note 4).

• e) On October 24, 2019, an investor advanced $200,000 in exchange for a promissory note. The principal and a lump sum interest payment of $20,848 were due at maturity on December 27, 2019. The note is secured against the Company’s biomass inventory and proceeds from the sale of biomass through a Biomass Processing Agreement. In connection with the promissory note, the Company incurred a financing fee of $4,000. As at March 31, 2021, this loan was in default; and as a result of the default the outstanding principal balance accrues interest at a rate of 20% per annum effective January 1, 2020.

As at March 31, 2021, accrued interest payable of $35,996 (December 31, 2020 - $29,765) is included in accounts payable and accrued liabilities.

During the period ended March 31, 2021, the Company paid principal of $15,000 (December 31, 2020 – $75,000).

• f) On February 6, 2020, an investor advanced $100,000 in exchange for a promissory note. The note is unsecured, and the principal and interest at a rate of 8% per annum were originally due at maturity on April 30, 2020. In connection with the promissory note, the Company issued 25,000 warrants with a fair value of $3,498 (Note 12). During the year ended December 31, 2020, the Company entered into a loan modification agreement to extend the maturity date to October 1, 2020. The loan modification provided for the issuance of an additional 100,000 warrants which had not been issued as at March 31, 2021 (Note 12). As at March 31, 2021, accrued interest payable of $9,184 (December 31, 2020 – $7,211) is included in accounts payable and accrued liabilities. As at March 31, 2021, the loan was in default.

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CBD Global Sciences Inc. Notes to Condensed Interim Consolidated Financial Statements For the three months ended March 31, 2021 and 2020 (Expressed in United States dollars) (Unaudited)

9. NOTES PAYABLE (Continued)

• g) On March 24, 2020, an investor advanced $175,000 in exchange for a promissory note. The principal and interest at a rate of 45% per annum were due at maturity on April 23, 2020.The note is secured by the assets of the Company and has been personally guaranteed by the President of the Company. As at March 31, 2021, accrued interest payable of $Nil (December 31, 2020 - $4,153) is included in accounts payable and accrued liabilities. As at March 31, 2021, the loan was in default.

During the period ended March 31, 2021, the Company paid principal and interest of $2,158 (December 31, 2020 – $Nil) and $17,530 (December 31, 2020 – $62,515), respectively.

• h) During the year ended December 31, 2020, the Company was granted a secured disaster loan from the U.S. Small Business Administration with a principal of $17,700. Interest accrues on the principal at a rate of 3.75% per annum. The Company may repay the loan in part or in full at any time without interest or penalty. The Company is required to pay principal and interest payments of $87 per month beginning in June 2021 with each payment being first applied to accrued interest and then principal. All remaining principal and accrued interest is due and payable on June 3, 2050. During the year ended December 31, 2020, the Company recorded government assistance income of $12,989 to discount the loan to present value at an effective interest rate of 20%.

During the period ended March 31, 2021, the Company recorded accretion and interest expense of $95 (December 31, 2020 – $245) and $145 (December 31, 2020 – $373), respectively.

• i) During the year ended December 31, 2020, the Company entered into a promissory note with a principal of $28,330 which was applied to lease payments and accrued late fees of $20,830 and $7,500, respectively (Note 10). The principal balance accrues interest at a rate of 8% per annum. The promissory note requires monthly payments of $888 beginning on October 1, 2020 which will continue until the promissory note is repaid in full. If not repaid in full sooner, all remaining principal and accrued interest is due on September 1, 2023. The promissory note is secured by certain capital assets of the Company. The principal balance of $24,090 is included in liabilities subject to compromise as at March 31, 2021 (Note 4).

• j) During the year ended December 31, 2020, the Company was granted a loan under the Paycheck Protection Program (the “PPP Loan”) totaling $135,095. The PPP Loan which was in the form of a Promissory Note matures in May 2022 and accrues interest at a rate of 0.98% per annum. The PPP Loan could be prepaid by the Company at any time prior to maturity with no prepayment penalties. Under the terms of the PPP Loan, certain amounts of the PPP Loan could be forgiven if the proceeds are used for qualifying expenses as described in the CARES Act.

During the year ended December 31, 2020, the requirements to forgive the PPP Loan were met and the Company recorded government assistance income of $140,045 consisting of the principal of $135,095, interest of $226 and accretion of $4,724.

During the period ended March 31,2021, the Company was granted a further loan under the Paycheck Protection Program (the “Second Draw PPP Loan”) totaling $135,095. The Second Draw PPP Loan has the same terms as the PPP Loan. As at March 31, 2021, the requirements to forgive the Second Draw PPP Loan have not been met. The principal balance of $135,095 is included in liabilities subject to compromise as at March 31, 2021 (Note 4).

• k) On February 25, 2020, an investor advanced $100,000 in exchange for a promissory note. The principal and interest at a rate of 45% per annum were due at maturity on March 26, 2020. During the year ended December 31, 2020, the principal balance of $100,000 and accrued interest of $4,153 were repaid in full.

10

CBD Global Sciences Inc. Notes to Condensed Interim Consolidated Financial Statements For the three months ended March 31, 2021 and 2020 (Expressed in United States dollars) (Unaudited)

10. LEASE LIABILITY

The Company leases certain assets under lease agreements. The lease liability consists of various leases for farmland and equipment. The leases are calculated using an incremental borrowing rate of 12% per annum.

Lease liability	March 31, 2021 December 31, 2020
Current portion Long-term portion	$ - $ 834,847 - 71,801
Total lease liability	$ - $ 906,648
Changes in the balance of lease liabilities are summarized in the table below.

Balance, December 31, 2019	$	806,444
Additions		159,973
Interest expense		27,359
Lease payments		(87,128)
Balance, December 31, 2020	$	906,648
Interest expense		3,220
Lease payments		(14,249)
Reclassify to liabilities subject to compromise (Note 4)		(895,619)
Balance, March 31, 2021	$	-

Lease payments for the period ended March 31, 2021 include cash payments of $12,166 (2020 - $7,847) and prepayments applied of $2,083 (2020 - $Nil).

11. CONVERTIBLE DEBT

A continuity of convertible debt for the period ended March 31, 2021 and year ended December 31, 2020 is as follows:

		Face value		Carrying value
Balance, December 31, 2019	$	3,874,410	$	3,610,386
Issued during the period		4,040,422		3,049,766
Settled with the issuance of common shares		(33,953)		(26,168)
Debt extinguished		(3,156,720)		(3,419,889)
Interest expense		-		260,589
Accretion		-		409,386
Balance, December 31, 2020	$	4,724,159	$	3,884,070
Interest expense		-		13,956
Accretion		-		114,543
Balance, March 31, 2021	$	4,724,159	$	4,012,569

11

CBD Global Sciences Inc. Notes to Condensed Interim Consolidated Financial Statements For the three months ended March 31, 2021 and 2020 (Expressed in United States dollars) (Unaudited)

11. CONVERTIBLE DEBT (Continued)

Brokered convertible debentures

During the year ended December 31, 2018, the Company closed brokered private placements of convertible debt (the “Debentures”) issuing $3,600,000 in Debentures. During the year ended December 31, 2019, the Company entered into an agreement to modify the terms of the convertible debentures as follows:

• Increased the principal amount of the convertible debt by 2.5%;

• Extended the maturity date of the convertible debt from October 2, 2019 to October 2, 2020;

• Modified the conversion terms of the convertible notes so that on conversion, the holder will receive CBD Global common shares rather than common shares of Global NV;

• Modified the exercise terms of warrants to provide that upon exercise, the holder will receive CBD Global common shares rather than common shares of Global NV; and

• Modified the conversion terms of the convertible debt and exercise terms of the warrants to prohibit the conversion of the debt or exercise of the warrants if the conversion or exercise, as the case may be, would result in CBD Global no longer qualifying as a foreign private issuer.

In consideration for the modification, the Company incurred a fee of 2% of the principal amount of the convertible debt of $65,500.

Of the outstanding convertible debt of $3,425,000, convertible notes in the principal amount of $3,275,000 were modified, and the remaining $150,000 were not modified.

The modification resulted in a change in cashflows of greater than 10% resulting in the extinguishment of the original debt and as such the Company recorded a loss on modification of $81,875 during the year ended December 31, 2019. Upon the modification of the loans, the residual value assigned to equity of $200,894 was allocated to capital reserves.

During the year ended December 31, 2019, $175,000 of convertible debt was converted into 230,977 common shares. On the conversion date, the carrying value of the converted portion was $187,696 which was allocated to share capital.

Brokered convertible debentures – Second modification

During the year ended December 31, 2020, the Company entered into an agreement to further modify the terms of the convertible debentures as follows:

• Increased the principal amount of the convertible debt by 32.5%;

• Extended the maturity date of the convertible debt to October 2, 2022;

• The accrual of interest payable on the convertible debt will commence on January 1, 2022 with the first interest payment due on March 1, 2022; and

• Extended the expiry date of the Investor Warrant to October 2, 2023; and

• Additional warrants shall be issued equal to 25% of the warrants initially issued at the inception of the convertible debentures at an exercise price equal to the lesser of 25% discount to the market price of the common shares of the Company or the lowest exercise price allowance in accordance with the policies of the Canadian Securities Exchange.

In addition, if the Company completes a private placement at a price lower than the current conversion price within 12 months of the second modification, the Company shall seek the approval of the Canadian Securities Exchange to reprice the conversion price at the lowest price allowable by the Canadian Securities Exchange.

Convertible notes in the principal amount of $3,049,375 were modified. The modification resulted in a change in cashflows of greater than 10% resulting in the extinguishment of the original debt and as such the Company recorded a loss on extinguishment of $216,841 during the year ended December 31, 2020.

12

CBD Global Sciences Inc. Notes to Condensed Interim Consolidated Financial Statements For the three months ended March 31, 2021 and 2020 (Expressed in United States dollars) (Unaudited)

11. CONVERTIBLE DEBT (Continued)

As the conversion price of the convertible debenture is subject to change in the event that the Company completes a private placement of equity at a price less than $0.70, it does not meet the fixed for fixed criteria and is classified as a derivative liability. The estimated fair value of the derivative liability as at October 31, 2020 was $159,864 using the Black-Scholes Option Pricing Model with the following assumptions: exercise price of $0.70; share price of $0.18; an annualized volatility of 125%; a forfeiture rate of 0%, an expected life of 1.0 year; a dividend yield of 0%; and a risk-free rate of 0.24%.

The derivative liability is remeasured at fair value through profit and loss at each reporting period end using the Black-Scholes Option Pricing Model. The estimated fair value of the derivative liability as at March 31, 2021 was $287,192 using the Black-Scholes Option Pricing Model with the following assumptions: exercise price of $0.70; share price of $0.33; an annualized volatility of 120%; a forfeiture rate of 0%, an expected life of 0.6 years; a dividend yield of 0%; and a risk-free rate of 0.23%. The Company recorded an unrealized loss related to the fair value of the derivative liability in the amount of $133,032 during the period ended March 31, 2021.

The expiry date of 7,633,764 warrants with an exercise price of $0.20 were extended to October 2, 2022. The incremental increase in the fair value of the warrants in the amount of $239,232 was included in the loss on debt extinguishment with a corresponding increase to capital reserves during the year ended December 31, 2020.

The Company is required to issue 1,916,690 additional warrants with an estimated fair value of $187,868 using the Black-Scholes Option Pricing Model with the following assumptions: exercise price of $0.14; share price of $0.18; an annualized volatility of 125%; a forfeiture rate of 0%, an expected life of 1.0 year; a dividend yield of 0%; and a risk-free rate of 0.24%. The fair value of the warrants to be issued was included in the loss on debt extinguishment with a corresponding increase to capital reserves during the year ended December 31, 2020. As at March 31, 2021, the warrants had not been issued.

During the year ended December 31, 2020, convertible debt with a principal balance of $33,953 and carrying value of $25,628 was converted into 248,508 common shares.

Subsequent to the period ended March 31, 2021, the Company entered into debt settlement agreements related to convertible debentures with total principal balances of $4,287,412 and accrued interest balances of $65,872 which are to be converted to 310,928 preferred shares of the Company (Note 18).

Other convertible debt

During the year ended December 31, 2019, an investor advanced $250,000 to the Company in exchange for a convertible promissory note and 50,000 warrants. The note is convertible at the option of the holder into units at a price of $0.37 per unit with each unit consisting of 0.25 common share and 0.0075 preferred shares of the Company. The note is secured by a personal guarantee from two directors of the Company. The note bears interest at a rate of 8% per annum and matured on June 30, 2020. As at March 31, 2021, the loan is in default.

During the year ended December 31, 2020, the Company issued a convertible debenture in the amount of $50,000. The debenture matures on August 11, 2022, bears interest at 12% per annum and is secured against the Company’s biomass inventory. The principal is convertible into units of the Company at $0.25 per unit and will automatically convert on the maturity date. Each unit consists of 0.5 common share and 0.005 preferred share of the Company. Accrued interest is payable quarterly, and at the option of the Company payable in common shares on the maturity date. As the convertible note converts automatically at the end of the term, the convertible debt of $50,000 and accrued interest of $3,812 have been classified as an equity instrument.

During the period ended March 31, 2021, the Company accrued interest of $1,478 that was recorded in capital reserves.

13

CBD Global Sciences Inc. Notes to Condensed Interim Consolidated Financial Statements For the three months ended March 31, 2021 and 2020 (Expressed in United States dollars) (Unaudited)

12. SHARE CAPITAL

a. Authorized capital

The Company is authorized to issue an unlimited number of common shares and preferred shares without par value.

Common share holders are entitled to one vote at each meeting of the shareholders of the Company.

Preferred share holders are entitled to one vote at each meeting of the shareholders of the Company in respect of each common share into which such preferred share could ultimately then be converted. In connection with the exercise of the voting rights relating to any proposed alteration of rights, each preferred share holder has one vote in respect of each preferred share held. Each preferred share is convertible, at the option of the holder thereof, at any time after the date of issuance of such share, into such number of fully paid and non-assessable common shares as is determined by multiplying the number of preferred shares by the conversion ratio applicable to such share in effect on the date the preferred share is surrendered for conversion. The conversion ratio for preferred shares is 100 common shares for each preferred share, subject to adjustment in certain events. To maintain its status as a foreign private issuer, the Company shall not affect any conversion of preferred shares and preferred share holders may not convert to the extent that the aggregate number of common shares and preferred shares held of record, directly or indirectly, by US Residents would exceed 40% of the aggregate number of common shares and preferred shares issued and outstanding after giving effect to such conversions. The Company may require preferred share holders to convert all the preferred shares at the applicable conversion ratio if the Company is subject to certain regulatory and reporting requirements that require the Company to do so.

b. Issued capital

The Company did not issue any shares during the three months ended March 31, 2021.

During the three months ended March 31, 2020, the Company completed the following transactions:

• a) On February 26, 2020, the Company closed a private placement for 340,000 units comprising of one common share and common share purchase warrant, and 2,695,000 common shares at a price of CAD $0.33 for gross proceeds of CAD $1,011,450.

c. Warrants

A summary of warrant activity is as follows:

							Weighted average
						Number of warrants	exercise price
Outstanding, December	31,	2019				18,399,380	$ 0.22
Issued						365,000	0.26
Exercised						(32,996)	0.20
Expired						(1,860,000)	0.27
Outstanding,December	31,	2020	and March	31,	2021	16,871,384	$0.22

During the year ended December 31, 2020, the Company completed the following transactions:

• a) On February 6, 2020, the Company issued 25,000 warrants in connection with a loan modification (Note 9). The warrants are exercisable for one common share at an exercise price of $0.25 on or before March 31, 2022. The warrants have a fair value of $3,498 using the Black-Scholes option pricing model with the following weighted average assumptions: no expected dividends to be paid; volatility of 150%; risk-free interest rate of 1.53%; and expected life of 2.15 years.

14

CBD Global Sciences Inc. Notes to Condensed Interim Consolidated Financial Statements For the three months ended March 31, 2021 and 2020 (Expressed in United States dollars) (Unaudited)

12. SHARE CAPITAL (Continued)

c. Warrants (continued)

• b) On February 26, 2020, the Company issued 340,000 warrants pursuant to a private placement. The warrants are exercisable into one common share of the Company at an exercise price of $0.26 per share until February 5, 2022. The warrants have a fair value of $56,576 using the Black-Scholes Option Pricing Model with the following weighted average assumptions: no expected dividends to be paid; volatility of 150%; risk-free interest rate of 1.25%; and expected life of 4.00 years.

As at March 31, 2021, the Company had outstanding share purchase warrants as follows:

Number of warrants	Exerciseprice	Expiry date
3,039,380	$0.20	July 31, 2021
1,182,943	$0.20	September 20, 2021
150,298	$0.20	October 1, 2021
2,700,000	$0.20	October 2, 2023
1,350,000	$0.20	October 2, 2023
400,000	$1.00	June 30, 2022
50,000	$0.37	December 31, 2021
25,000	$0.25	March 31, 2022
340,000	$0.26	February 5, 2022
7,633,763	$0.20	October 2, 2022
16,871,384

The weighted-average remaining contractual life of warrants outstanding at March 31, 2021 was 1.43 years.

As at March 31, 2021 and December 31, 2020, the Company was obligated to issue 100,000 warrants pursuant to a modification of a promissory note payable (Note 9). The warrants have a fair value of $13,161 determined using the Black-Scholes option pricing model with the following assumptions: no expected dividends to be paid; volatility of 150%; risk-free interest rate of 0.25%; and expected life of 2 years.

As at March 31, 2021 and December 31, 2020, the Company was obligated to issue 1,916,690 warrants pursuant to a modification of convertible debt (Note 11). The warrants have a fair value of $187,868 determined using the Black-Scholes option pricing model with the following assumptions: exercise price of $0.14; share price of $0.18; an annualized volatility of 125%; a forfeiture rate of 0%, an expected life of 1.0 year; a dividend yield of 0%; and a risk-free rate of 0.24%.

d. Options

On May 14, 2020, the Company granted 5,700,000 stock options to officers, directors and consultants of the Company. The stock options are exercisable at $0.20 per share until May 15, 2023. One-third of the options will vest immediately, one-third of the options on May 14, 2021 and the remaining one-third on May 14, 2022.

15

CBD Global Sciences Inc. Notes to Condensed Interim Consolidated Financial Statements For the three months ended March 31, 2021 and 2020 (Expressed in United States dollars) (Unaudited)

12. SHARE CAPITAL (Continued)

d. Options (continued)

Continuity of the Company’s stock options is as follows:

Number of options	Weighted average exercise price ($CAD) Weighted average exercise price ($USD)
Outstanding, December 31, 2019 - Granted 5,700,000	$ - $ - 0.20 0.15
Outstanding, December 31, 2020 and March 31, 2021 5,700,000	$ 0.20 $ 0.15
Exercisable, December 31, 2020 and March 31, 2021 1,900,000	$ 0.20 $ 0.15

The above options have an exercise price of $0.15 ($0.20 CAD) and expire on May 15, 2023. As at March 31, 2021, the weighted average remaining contractual life of outstanding options is 2.12 years.

Employee options were measured at fair value on the grant date and recognized over the vesting period from the date of grant. Nonemployee options were measured indirectly with reference to the fair value of the equity instruments granted as the fair value of goods and services received cannot be measured reliably. Nonemployee options are measured at the end of each reporting period over the term that goods and services are received.

During the year ended December 31, 2020, the grant date fair value of stock options of $653,537 was determined using the Black-Scholes option pricing model with the following weighted average assumptions: no expected dividends to be paid; volatility of 150%; risk-free interest rate of 1.71%; and expected life of 3.00 years.

For the period ended March 31, 2021, the Company recognized share-based payments of $80,573 (2020 - $Nil) related to the fair value of stock options vested.

e. Cashless Options

On August 11, 2020, the Company entered into an agreement for advisory services. In connection with this agreement, the Company granted 250,000 cashless options in exchange for services. The cashless options are exercisable into common shares at $0.25 per share until August 11, 2023. The number of shares is determined by the number of options outstanding multiplied by the difference between the “Current Market Price” and the exercise price, divided by the “Current Market Price”. “Current Market Price” is defined as the volume weighted average price of such security on the ten (10) consecutive trading days immediately preceding such date.

The cashless options have a fair value of $24,569 and were valued using the Black-Scholes option pricing model with the following weighted average assumptions: no expected dividends to be paid; volatility of 150%; risk-free interest rate of 0.25%; and expected life of 2.00 years.

16

CBD Global Sciences Inc. Notes to Condensed Interim Consolidated Financial Statements For the three months ended March 31, 2021 and 2020 (Expressed in United States dollars) (Unaudited)

12. SHARE CAPITAL (Continued)

f. Escrowed shares

As at March 31, 2021, the Company had 3,635,484 common shares and 101,344 preferred shares held in escrow pursuant to a reverse takeover transaction which closed on October 17, 2019. Of the total remaining securities, 908,871 common shares and 25,341 preferred shares will be released every six months until April 17, 2022.

g. Obligation to issue shares

As at March 31, 2021, the Company was obligated to issue common shares for proceeds received of $248,515 (December 31, 2020 - $218,515). During the period ended March 31, 2021, the Company received share subscription receipts of $30,000 for which common shares have not yet been issued. Share subscription receipts have been presented as obligation to issue shares within current liabilities in the condensed interim consolidated statements of financial position.

As at March 31, 2021, the Company was obligated to issue 1,126,017 common shares (December 31, 2020 – 515,000 common shares) with a cumulative fair value of $257,750 (December 31, 2020 – $95,278) for services received. During the period ended March 31, 2021, the Company recorded consulting fees and marketing, sales and distribution of $115,264 (2020 - $Nil) and $47,208 (2020 - $Nil), respectively, with respect to services totalling $162,472 (2020 - $Nil) to be paid by the issuance of common shares of the Company.

As at March 31, 2021 and December 31, 2020, the Company was obligated to issue stock options with a fair value of $36,427 for services received during the year ended December 31, 2019.

During the year ended December 31, 2019, the Company received $786,015 in share subscriptions for a private placement which had not yet closed, and which is included in obligation to issue shares. On February 26, 2020 these shares were issued.

13. RELATED PARTY TRANSACTIONS AND BALANCES

Related parties and related party transactions impacting the financial statements not disclosed elsewhere in these financial statements are summarized below.

Key management personnel include those persons having authority and responsibility for planning, directing and controlling the activities of the Company as a whole. Key management personnel comprise officers and directors of the Company.

Remuneration attributed to key management personnel for the periods ended March 31, 2021 and 2020 are summarized as follows:

		March 31,		March 31,
		2021		2020
Salaries (Note 15)	$	75,000	$	75,897
Share-based payments (Note 12)		53,009	$	-
	$	128,009	$	75,897

17

CBD Global Sciences Inc. Notes to Condensed Interim Consolidated Financial Statements For the three months ended March 31, 2021 and 2020 (Expressed in United States dollars) (Unaudited)

13. RELATED PARTY TRANSACTIONS AND BALANCES (Continued)

Other related party transactions and balances

The carrying values of loans payable to related parties as at March 31, 2021 and December 31, 2020 are summarized in the table below.

		March 31,		December 31,
		2021		2020
Beginning balance	$	1,255,147	$	453,892
Increase to principal amount		325,000		815,582
Discount to amortized cost, effective interest rate of 20%		(63,609)		(213,739)
Accretion		56,372		135,273
Interest		29,553		64,139
Reclassify to liabilities subject to compromise (Note 4)		(1,590,687)		-
Ending balance	$	11,776	$	1,255,147
Current		(11,776)		(43,012)
Long-term	$	-	$	1,212,135

• a) As at March 31, 2021, a revolving promissory note due to a company jointly controlled by the President and the Vice President had a carrying value of $534,663 (December 31, 2020 - $509,321), principal balance of $873,685 (December 31, 2020 - $873,685) and accrued interest balance of $67,897 (December 31, 2020 - $57,125). As at March 31, 2021, the carrying value and accrued interest balance were reclassified to liabilities subject to compromise from due to related parties (Note 4).

The Company recorded the promissory note at amortized cost using an effective interest rate of 20% which caused the carrying amount to be lower than the principal and accrued interest with the difference recognized as a related party contribution in capital reserve. During the period ended March 31, 2021, the Company recognized an additional $Nil (December 31, 2020 - $41,067) as related party contributions pursuant to proceeds received during the period and recorded accretion expense of $25,460.

The note is unsecured and, bears interest at 5% per annum. The interest was due monthly with the principal balance due on demand. On January 1, 2019, the Company entered into a modification agreement to amend the maturity date of the principal balance to December 31, 2024.

• b) On September 1, 2018, a company jointly controlled by the President of the Company and the Chief Operating Officer of the Company advanced $7,500 to the Company in exchange for a promissory note. The note is unsecured and bears interest at 6% per annum. Payments of interest only are due monthly on the first day of every calendar month starting January 1, 2018 with payment in full at maturity on December 31, 2019. Should the Company default on an interest payment, the interest rate shall increase to 12% per annum. On January 1, 2019, the Company entered into an agreement amending the maturity date of the note to December 31, 2021.

As of March 31, 2021, the balance due on this note was $8,260 (December 31, 2020 - $8,177), including principal balance of $7,500 and accrued interest of $760 (December 31, 2020 - $677). As at March 31, 2021, the principal and accrued interest balances were reclassified to liabilities subject to compromise from due to related parties (Note 4).

18

CBD Global Sciences Inc. Notes to Condensed Interim Consolidated Financial Statements For the three months ended March 31, 2021 and 2020 (Expressed in United States dollars) (Unaudited)

13. RELATED PARTY TRANSACTIONS AND BALANCES (Continued)

• c) On April 1, 2019, the Company entered into an unsecured promissory note with a company jointly controlled by the President and the Chief Operating Officer (the “Related Entity”) whereby the Related Entity loaned a balance up to $500,000 to the Company. As at March 31, 2021, the promissory note had a carrying value of $905,863 (December 31, 2020 - $623,560), principal balance of $1,064,505 (December 31, 2020 - $749,505) and accrued interest balance of $40,808 (December 31, 2020 - $21,580). As at March 31, 2021, the carrying value and accrued interest balance were reclassified to liabilities subject to compromise from due to related parties (Note 4).

The note is unsecured, bears interest at 8% per annum, has payments of interest only due monthly with the principal balance due on June 30, 2022.

The Company recorded the promissory note at amortized cost using an effective interest rate of 20% which caused the carrying amount to be lower than the principal and accrued interest with the difference recognized as a related party contribution in capital reserve. During the period ended March 31, 2021, the Company recognized an additional $63,609 (December 31, 2020 - $172,672) as related party contributions pursuant to proceeds received during the period and recorded accretion expense of $30,912.

• d) On December 31, 2018, the Company entered into an unsecured promissory note with a company controlled by a director (the “Related Entity”) whereby the Related Entity loaned $33,736 to the Company. As at March 31, 2021, the promissory note had principal and accrued interest balances of $33,736 (December 31, 2020 - $33,736) and $3,036 (December 31, 2020 - $2,024), respectively. The note is unsecured and bears interest at 6% per annum. Interest and principal are due and payable on the maturity date of December 31, 2020. As at March 31, 2021, the loan was in default; and as a result of the default the outstanding principal balance accrues interest at a rate of 12% per annum effective January 1, 2021. As at March 31, 2021, principal and accrued interest balances were reclassified to liabilities subject to compromise from due to related parties and accounts payable and accrued liabilities, respectively (Note 4).

• e) During the period ended March 31, 2021, the Company incurred $7,157 (2020 - $13,096) in professional fees to a company controlled by the Chief Financial Officer of the Company recorded in general and administrative expenses.

• f) During the period ended March 31, 2021, the Company incurred $3,167 (2020 - $18,733) in professional fees to a company controlled by a director of the Company recorded in general and administrative expenses.

• g) As at March 31, 2021, the Company owed $39,332 (December 31, 2020 - $41,923) to a company jointly controlled by the President and Chief Operating Officer for rental fees and expense reimbursement. As at March 31, 2021, the amount was reclassified to liabilities subject to compromise from accounts payable and accrued liabilities (Note 4).

• h) As at March 31, 2021, the Company owed $39,852 (December 31, 2020 - $46,452) to the President of the Company for salaries and wages. As at March 31, 2021, the amount was reclassified to liabilities subject to compromise from accounts payable and accrued liabilities (Note 4).

• i) As at March 31, 2021, the Company owed $128,305 (December 31, 2020 - $126,029) to a company controlled by Chief Financial Officer of the Company for professional fees. As at March 31, 2021, $124,893 of the amount outstanding was reclassified to liabilities subject to compromise from accounts payable and accrued liabilities (Note 4).

19

CBD Global Sciences Inc. Notes to Condensed Interim Consolidated Financial Statements For the three months ended March 31, 2021 and 2020 (Expressed in United States dollars) (Unaudited)

13. RELATED PARTY TRANSACTIONS AND BALANCES (Continued)

• j) As at March 31, 2021, the Company owed $173,737 (December 31, 2020 - $170,478) for professional fees to a company controlled by a director of the Company. As at March 31, 2021, $17,397 of the amount outstanding was reclassified to liabilities subject to compromise from accounts payable and accrued liabilities (Note 4).

• k) As at March 31, 2021, the Company owed $413,955 (December 31, 2020 - $412,943) for consulting fees to a company controlled by a director of the Company. As at March 31, 2021, the amount was reclassified to liabilities subject to compromise from accounts payable and accrued liabilities (Note 4).

• l) As at March 31, 2021, the Company owed $11,776 (December 31, 2020 - $1,776) to a company jointly controlled by the President and the Chief Operating Officer related to advances included in due to related parties.

14. REVENUE

During the periods ended March 31, 2021 and 2020 sales relate to CBD Oil products.

15. GENERAL AND ADMINISTRATIVE EXPENSES

Three months ended March 31,		2021	2020
Investor relations	$	100,895 $	986
Office expenses		75,478	47,965
Professional fees		57,313	90,464
Rent		3,855	50,075
Salaries		124,201	62,471
Small tools and equipment		-	850
Travel		989	14,084
	$	362,731$	266,895

16. SUPPLEMENTAL CASH FLOW INFORMATION

Significant non-cash transactions during the three months ended March 31, 2021 and 2020 affecting cash flows from investing and financing activities included:

		2021		2020
Cash paid for interest	$	19,678	$	95,167
Cashpaid for income taxes	$	-	$	-

17. SEGMENTED INFORMATION

The Company has a single reportable segment, the production, sale and distribution of CBD products. All assets are domiciled in the United States.

20

CBD Global Sciences Inc. Notes to Condensed Interim Consolidated Financial Statements For the three months ended March 31, 2021 and 2020 (Expressed in United States dollars) (Unaudited)

18. SUBSEQUENT EVENTS

The Company entered into debt settlement agreements related to convertible debentures with total principal balances of $4,287,412 and accrued interest balances of $65,872 which are to be converted to 310,928 preferred shares of the Company (Note 11).

The Company received share subscriptions of $25,000 for 83,333 units at a price of $0.30 per unit. Each unit will consist of one common share of the Company and one-half of one warrant. Each whole warrant shall entitle the holder to acquire one common share of the Company at a price of $0.60 for a period of 24 months.

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