Indigenous Bloom Hemp Corp. — Audit Report / Information 2021

Dec 9, 2021

Form 51-102F4 Business Acquisition Report

Item 1 Identity of Company

1.1 Name and Address of Company

Indigenous Bloom Hemp Corp. c/o 3200 – 650 West Georgia Street Vancouver, BC V6B 4P7

1.2 Executive Officer

Peter McFadden, Chief Financial Officer Tel: 250-763-4660

Item 2 Details of Acquisition

2.1 Nature of Business Acquired

Indigenous Bloom Hemp Corp. (the “ Issuer ”), Indigenous Bloom Hemp Corporation (“ Hempco”) and 12302161 Canada Inc. (which was a wholly-owned Subsidiary of the Issuer) entered into a Business Combination Agreement and an Amalgamation Agreement which provided for for the Issuer to acquire all of the outstanding common shares of Hempco by way of a three-cornered amalgamation (the “ Amalgamation ”). Pursuant to the Amalgamation, 12302161 Canada Inc. and Hempco amalgamated to form a corporation named Indigenous Bloom Hemp Corporation (“ Amalco ”), which is a wholly-owned subsidiary of the Issuer.

Amalco currently operates a large-scale industrial hemp farm in Southern Manitoba on approximately 310 acres of zoned farmland. The farmland is leased by Chris Federowich and Delores Federowich, pursuant to a lease agreement dated April 2, 2021 with Amy LaRose. The lease is for a term of two years expiring on April 1, 2023 and covers 310 acres. Lease costs are $75 plus GST per acre per year and are paid by Amalco.

Amalco has entered into a contract for farming services dated July 20, 2020, as extended May 18, 2021 (the “ Independent Contractors Services Agreement ”) with Federowich Farms (the “ Contractor ”) to provide farming, cultivating and harvesting services for industrial hemp on the leased farmland. The agreement expires on May 31, 2022. The Contractor is operating under a licence from Health Canada which allows for the cultivation of hemp and the sale of seed, grain, flowering heads, leaves and branches. The licence expires on April 16, 2026. In consideration for the farming services, Amalco pays the contractor a fee of $200 per acre planted. The Contractor has also been granted the option to purchase 50,000 Common Shares at a price of $0.34 per share on or before June 1, 2022.

Under the Independent Contractors Services Agreement, the Contractor is required to farm, cultivate and harvest 200 acres.

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Amalco has made an application to Health Canada for an Industrial Hemp Licence which will allow for the cultivation and sale of industrial hemp in the form of seed, grain, flowering heads, leaves and branches. Amalco’s licence application is currently being processed by Health Canada and Amalco has been advised by Health Canada that its application is in the final stage.

The primary business of Amalco is the sale of hemp biomass and flower for processing into phytocannabinoid rich (“ PCR ”) extracts derived from hemp biomass. Amalco is currently planting crops using CBD dominant genetics. Amalco also intends to develop or acquire the rights to additional hemp products such as health supplements, nutritional products, food stuffs and beauty products for general consumer end-use. All of the PCR hemp, hemp extracts and hemp products produced or sold by Amalco will contain less than 0.3% THC, ensuring that they are compliant with the Industrial Hemp Regulations, thus falling under the definition of industrial hemp. Plans include the development of various product lines and propagation through A-Sexual reproduction which is expected to increase production capacity and accelerate the development of genetic stock.

2.2 Acquisition Date

September 24, 2021

2.3 Consideration

The consideration paid by the Issuer was 62,221,972 common shares which were distributed on a pro rata basis to the shareholders of Hempco.

2.4 Effect on Financial Position

Not applicable.

2.5 Prior Valuations

Marrschalk Valuations Inc. (the “ Valuator ”) was retained to prepare a valuation report entitled “ Fair Market Value of the Shares of Indigenous Bloom Hemp Corp.” dated August 31, 2020 (the “ Valuation Report ”). Within the scope, assumptions and limitations of its engagement, the Valuator concluded that the fair market value of Hempco’s business enterprise on August 31, 2020 was in the range of $25,500,000 to $31,800,000. This is the estimated value of the net business assets of Hempco (including goodwill), before taking account of assumed and contingent liabilities. After deducting long-term loans and long-term lease liabilities and making a notional adjustment for the latent or notional tax on goodwill, the Valuator concluded that the fair market value of Hempco’s shares on August 31, 2020 was in the range $24,000,000 to $30,000,000. The Valuator’s calculations are contained in the Valuation Report, a copy of which is available under the Issuer’s profile on the SEDAR website at www.sedar.com.

Fair market value (“ FMV ”) is value in a “fair” market and for the purposes of the Valuation Report is defined as “the highest price available in an open and unrestricted market, between informed and prudent parties, acting at arm’s length and under no

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compulsion to act. Fair market value is expressed in terms of current cash or money’s worth.” FMV is a notional concept and its calculation does not involve exposing the business to the market for sale. FMV is not the same as price. The price at which a business may ultimately be sold is influenced by many factors, such as unique negotiating positions, non-cash settlement terms or differing motivations for undertaking the sale, which are not usually considered in determining FMV.

In the calculation of the fair market value of the shares of Hempco, the Valuator used the discounted cashflow method. This method is considered suitable for businesses that have limited financial history, but which are expected to generate strong cash flows for at least the next few years, within a changing risk environment.

Key assumptions made in the Valuation Report include the following:

1. That all contracts required for the fulfillment of management’s projections, none of which were verified by the Valuator, will be in place in a timely manner and that the crop will be grown, processed and sold commencing in the 2021 calendar year;

2. That management’s inputs used for the base case scenario are broadly achievable, notwithstanding that it is realistic to expect some variations and shortfalls;

3. That production will reach full capacity in 2021;

4. That the final market for Hempco’s products will be sufficient to absorb all of Hempco’s production of oil starting in 2021; and

5. That the impact of the Covid-19 pandemic on Hempco’s business would be limited.

The Valuation Report was an update and replacement to two previous reports by the Valuator, one dated February 29, 2020 and one dated April 30, 2020.

In the February 29, 2020 report, the Valuator concluded that the fair market value of Hempco’s business enterprise on February 29, 2020 was in the range of $51,000,000 to $62,000,000. This is the estimated value of the net business assets of Hempco (including goodwill), before taking account of assumed and contingent liabilities. After deducting an assumed liability to related parties for capital inputs and making a notional adjustment for the latent or notional tax on goodwill, the Valuator concluded that the fair market value of Hempco’s shares on February 29, 2020 was in the range $48,000,000 to $59,000,000.

In the April 30, 2020 report, the Valuator concluded that the fair market value of Hempco’s business enterprise on April 30, 2020 was in the range of $24,700,000 to $30,100,000. This is the estimated value of the net business assets of Hempco (including goodwill), before taking account of assumed and contingent liabilities. After deducting an assumed liability to related parties for capital inputs and making a notional adjustment for the latent or notional tax on goodwill, the Valuator concluded that the fair market

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value of Hempco’s shares on April 30, 2020 was in the range $23,000,000 to $28,000,000.

Both the February 29, 2020 report and the April 30, 2020 report are available under the Issuer’s profile on the SEDAR website at www.sedar.com.

2.6 Parties to Transaction

Lorne Mark Roseborough, the CEO, Chairman of the Board and a director of the Issuer, Blair Lowther, a director of the Issuer, Sharon Blady, a director of the Issuer, Peter McFadden, the CFO of the Issuer and Michael Matvieshen, who holds more than 10% of the issued and outstanding common shares of the Issuer, and Nick Standish, a former director of the Issuer, were also shareholders of Hempco. Mr. Roseborough owned 2,414,214 common shares of Hempco representing 12.07% of the issued and outstanding Hempco common shares, Mr. Lowther owned 345,266 common shares of Hempco Shares representing 1.73% of the issued and outstanding Hempco common shares, Ms. Blady owned 226,415 common shares of Hempco representing 1.13% of the issued and outstanding Hempco common shares, Mr. McFadden owned 322,624 common shares of Hempco representing 1.61% of the issued and outstanding Hempco common shares, Mr. Matvieshen owned, or controlled or directed, directly or indirectly, 3,432,387 common shares of Hempco representing 17.16% of the issued and outstanding Hempco common shares and Mr. Standish owned 387,754 common shares of Hempco representing 1.94% of the issued and outstanding Hempco common shares.

2.7 Date of Report

December 8, 2021

Item 3 Financial Statements and Other Information

The financial statements included with this Business Acquisition Report are the audited financial statements of Hempco for the year ended May 31, 2021 and the period from July 31, 2019 (date of incorporation) to May 31, 2020 and the unaudited condensed financial statements of Hempco for the three months ended August 31, 2021. The auditors of Hempco have not given their consent to include their audit report in this Business Acquisition Report.

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INDIGENOUS BLOOM HEMP CORPORATION

Financial Statements

For the Year Ended May 31, 2021 and Period from July 31, 2019 (date of incorporation) to May 31, 2020 (Expressed in Canadian dollars)

INDEPENDENT AUDITORS’ REPORT

To the Shareholders of Indigenous Bloom Hemp Corporation

Report on the Audit of the Financial Statements

Opinion

We have audited the financial statements of Indigenous Bloom Hemp Corporation (the “Company”), which comprise the statement of financial position as at May 31, 2021, and the statement of operations and comprehensive loss, statement of changes in shareholders’ equity (deficit) and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as at May 31, 2021, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRS).

Basis for Opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material Uncertainty Related to Going Concern

Without qualifying our opinion, we draw attention to Note 1 to the financial statements which indicates the existence of a material uncertainty that may cast significant doubt about Indigenous Bloom Hemp Corporation ability to continue as a going concern.

Comparative Information

The financial statements of the Company for the year ended May 31, 2020 were audited by another auditor who expressed an unmodified opinion on those statements on January 11, 2021.

Information other than the Financial Statements and the Auditor’s Report thereon

Management is responsible for the other information. The other information comprises the information, other than the financial statements and our auditor’s report thereon, included in Management's discussion and analysis report.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

We obtained Management's discussion and analysis report prior to the date of this auditor’s report. If, based on the work we have performed on this other information, we conclude that there is a material misstatement of this other information, we are required to report that fact in this auditor’s report. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with IFRS, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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In preparing the financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;

• Obtain an understanding of internal control relevant to the audit 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 Company’s internal control;

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management;

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern;

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the financial statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

The engagement partner on the audit resulting in this independent auditor’s report is Mickey Goldstein.

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Vancouver, British Columbia December 7, 2021

Harbourside CPA, LLP Chartered Professional Accountants

Statements of Financial Position (Expressed in Canadian dollars)

INDIGENOUS BLOOM HEMP CORPORATION

INDIGENOUS BLOOM HEMP CORPORATION Statements of Financial Position (Expressed in Canadian dollars)
	May 31,	May 31,
	2021	2020
	$	$
Assets
Current assets
Cash	25,841	–
Prepaid expenses	48,290	5,000
Due from Veritas Pharma Inc. (Note 11)	61,252	–
Total current assets	135,383	5,000
Non-current assets
Property and equipment (Note 3)	415,491	419,074
Right-of-use assets (Note 4)	134,287	183,207
Total non-current assets	549,778	602,281
Total assets	685,161	607,281
Liabilities
Current liabilities
Accounts payable and accrued liabilities	243,829	190,672
Current portion of loans payable (Note 5)	127,050	11,514
Current portion of lease liabilities (Note 6)	41,434	39,117
Due to related parties (Note 7)	652,981	556,317
Total current liabilities	1,065,294	797,620
Non-current liabilities
Loans payable (Note 5)	25,525	37,574
Lease liabilities (Note 6)	92,271	156,535
Total non-current liabilities	117,796	194,109
Total liabilities	1,183,090	991,729
Shareholders’ deficit
Share capital	347,501	1
Share subscriptions receivable (Notes 7 and 9)	(61,166)	–
Deficit	(784,264)	(384,449)
Total shareholders’deficit	(497,929)	(384,448)
Total liabilities and shareholders’ deficit	685,161	607,281

Nature of operations and continuance of business (Note 1) Commitments (Note 10) Subsequent event (Note 14)

Approved and authorized for issuance on behalf of the Board of Directors on December 7, 2021:

/s/ “Allen Szmyrko” /s/ “Joshua Matvieshen” Allen Szmyrko, Director Joshua Matvieshen, Director

(The accompanying notes are an integral part of these financial statements)

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INDIGENOUS BLOOM HEMP CORPORATION Statements of Operations and Comprehensive Loss (Expressed in Canadian dollars)

INDIGENOUS BLOOM HEMP CORPORATION Statements of Operations and Comprehensive Loss (Expressed in Canadian dollars)
		For the period
		from July 31,
		2019 (date of
	Year ended	incorporation) to
	May 31,	May 31,
	2021	2020
	$	$
Expenses
Depreciation (Notes 3 and 4)	117,044	78,801
Licenses	1,089	42,350
Production costs	196,774	225,979
Professional fees	72,330	12,285
Repairs and maintenance	1,005	2,593
Travel	–	7,806
Total expenses	388,242	369,814
Loss before other expense	(388,242)	(369,814)
Other expense
Interest expense	(11,573)	(14,635)
Net loss and comprehensive loss for theperiod	(399,815)	(384,449)
Net lossper share,basic and diluted	(0.02)	(3,844.49)
Weighted average shares outstanding	19,178,086	100

(The accompanying notes are an integral part of these financial statements)

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Statements of Changes in Deficit (Expressed in Canadian dollars)

INDIGENOUS BLOOM HEMP CORPORATION

	Share subscriptions receivable $ Deficit $ Total shareholders’ deficit $ Share capital Number of shares Amount $
Balance, July 31, 2019 (date of incorporation) Net loss for the period	100 1 – – 1 – – – (384,449) (384,449)
Balance, May 31, 2020 Shares issued for private placement Shares returned and cancelled Net loss for the year	100 1 – (384,449) (384,448) 20,000,000 347,500 (61,166) – 286,334 (100) – – – – – – – (399,815) (399,815)
Balance,May31,2021	20,000,000 347,501 (61,166) (784,264) (497,929)

(The accompanying notes are an integral part of these financial statements)

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INDIGENOUS BLOOM HEMP CORPORATION Statements of Cash Flows (Expressed in Canadian dollars)

INDIGENOUS BLOOM HEMP CORPORATION Statements of Cash Flows (Expressed in Canadian dollars)
		For the period
		from July 31,
		2019 (date of
	Year ended	incorporation) to
	May 31,	May 31,
	2021	2020
	$	$
Operating activities
Net loss for the period	(399,815)	(384,449)
Items not involving cash:
Depreciation	117,044	78,801
Interest expense	11,573	14,635
Changes in non-cash operating working capital:
Prepaid expenses	(43,290)	–
Due from Veritas Pharma Inc.	(61,252)	–
Accounts payable and accrued liabilities	53,157	189,730
Due to relatedparties	(52,910)	101,283
Net cash used in operatingactivities	(375,493)	–
Financing activities
Proceeds from loan payable	115,000	–
Proceeds from issuance of common shares	286,334	–
Net cash provided by financing activities	401,334	–
Change in cash	25,841	–
Cash,beginningofperiod	–	–
Cash, end ofperiod	25,841	–
Non-cash investing and financing activities:
Property and equipment purchases paid by related parties	64,541	393,716
Property and equipment financed by loan payable	–	55,612
Lease payments paid by related parties	70,959	48,527
Loan repaymentspaid byrelatedparties	14,074	6,850
Cash paid for:
Interest	11,573	14,635
Income taxes	–	–

(The accompanying notes are an integral part of these financial statements)

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Notes to the Financial Statements

INDIGNEOUS BLOOM HEMP CORPORATION

Year Ended May 31, 2021 and Period from July 31, 2019 (date of incorporation) to May 31, 2020 (Expressed in Canadian dollars)

1. Nature of Operations and Continuance of Business

Indigenous Bloom Hemp Corporation (the “Company”) was incorporated on July 31, 2019 under the Canada Business Corporations Act. Its current focus is the production of hemp for commercial use. The Company’s head office is located at 2220 Horizon Drive E. Kelowna, BC. V1Z 3L4, Canada.

On March 11, 2020, the World Health Organization declared COVID-19 a global pandemic. This contagious disease outbreak and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, leading to an economic downturn. The impact on the Company is not material and management continues to monitor the situation.

These financial statements have been prepared on the going concern basis, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. During the period ended May 31, 2021, the Company did not generate any revenue and had a net loss of $399,815. As at May 31, 2021, had a working capital deficit of $929,911 and an accumulated deficit of $784,264. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholder and related parties, the ability to raise equity or debt financing, and the attainment of profitable operations from the Company's future business. These factors indicate the existence of a material uncertainty that may cast significant doubt on the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. These adjustments could be material.

2. Significant Accounting Policies

(a) Basis of Presentation

These financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board on a going concern basis.

These financial statements have been prepared on a historical cost basis and are presented in Canadian dollars, which is also the Company’s functional currency.

(b) Use of Estimates and Judgments

The preparation of these financial statements in conformity with IFRS requires the Company’s management to make judgments, estimates, and assumptions that affect the application of accounting policies and reported amounts of assets, liabilities, revenues, and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised and in any future periods affected.

Significant areas requiring the use of estimates include useful lives and recoverability of property and equipment, assessment of incremental borrowing rate related to the recognition of lease liabilities, and unrecognized deferred income tax assets.

The assessment of whether the going concern assumption is appropriate requires management to take into account all available information about the future, which is at least, but is not limited to, 12 months from the end of the reporting period. The Company is aware that material uncertainties related to events or conditions may cast significant doubt upon the Company’s ability to continue as a going concern.

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INDIGNEOUS BLOOM HEMP CORPORATION Notes to the Financial Statements

Year Ended May 31, 2021 and Period from July 31, 2019 (date of incorporation) to May 31, 2020 (Expressed in Canadian dollars)

2. Significant Accounting Policies (continued)

• (c) Biological Assets

The Company defines biological assets as hemp plants up to the point of harvest. Biological assets are recorded at fair value less estimated costs to sell, unless fair value cannot be reliably measured, in which case they are measured at cost less accumulated depreciation and impairment losses, in accordance with IAS 41 – Agriculture.

Production costs are capitalized to biological assets and include all direct and indirect costs relating to biological transformation. As at May 31, 2021 and 2020, the Company has no biological assets.

• (d) Property and Equipment

Property and equipment are recorded at cost. The Company depreciates the cost of property and equipment over their estimated useful lives at the following rates:

Building 4% declining balance Farm equipment 30% declining balance

Residual values and useful economic lives are reviewed at least annually, and adjusted if appropriate, at each reporting date. Subsequent expenditure relating to an item of property and equipment is capitalized when it is probable that future economic benefits from the use of the assets will be increased. All other subsequent expenditures are recognized as repairs and maintenance expenses during the period in which they are incurred. Gains and losses on disposal of equipment are determined by comparing the proceeds from disposal with the carrying amount of the asset and are recognized net within other income in the statement of operations.

• (e) Impairment of Non-Financial Assets

At each reporting date, the Company assesses whether there are indicators of impairment for its non-financial assets. If indicators exist, the Company determines if the recoverable amount of the asset or cash generating unit (”CGU”) is greater than its carrying amount. A CGU is defined as the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows of other assets or groups of assets. The Company has used geographical proximity, geological similarities, analysis of shared infrastructure, commodity type, assessment of exposure to market risks, and materiality to define its CGUs.

If the carrying amount exceeds the recoverable amount, the asset or CGU is recorded at its recoverable amount with the reduction recognized in the statement of operations. The recoverable amount is the greater of the value in use or fair value less costs to sell. Fair value is the amount the asset could be sold for in an arm’s length transaction. The value in use is the present value of the estimated future cash flows of the asset from its continued use. The fair value less costs to sell considers the continued development of a property and market transactions in a valuation model.

Impairments are reversed in subsequent periods when there has been an increase in the recoverable amount of a previously impaired asset or CGU and these reversals are recognized in the statement of operations. The recovery is limited to the original carrying amount less depreciation, if any, that would have been recorded had the asset not been impaired.

Intangible assets with indefinite useful lives are not amortized but are tested for impairment annually, either individually or at the CGU level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.

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INDIGNEOUS BLOOM HEMP CORPORATION Notes to the Financial Statements

Year Ended May 31, 2021 and Period from July 31, 2019 (date of incorporation) to May 31, 2020 (Expressed in Canadian dollars)

2. Significant Accounting Policies (continued)

• (f) Financial Instruments

Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the respective instrument.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are included in the initial carrying value of the related instrument and are amortized using the effective interest method. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in the statement of operations.

Fair value estimates are made at the statement of financial position date based on relevant market information and information about the financial instrument. All financial instruments are classified into either: fair value through profit or loss (“FVTPL”) or amortized cost.

The Company has made the following classifications:

Cash	Amortized cost
Due from Veritas Pharma Inc.	Amortized cost
Accounts payable	Amortized cost
Loans payable	Amortized cost
Lease liabilities	Amortized cost
Due to related parties	Amortized cost

Financial Assets

The classification of financial assets depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.

Financial assets at FVTPL

Financial assets are classified as FVTPL when the financial asset is either held for trading or it is designated as FVTPL. A financial asset is classified as held for trading if:

• it has been acquired principally for the purpose of selling it in the near term; or

• on initial recognition it is part of a portfolio of identified financial instruments that the Company manages together and has a recent actual pattern of short-term profit-taking; or

• it is a derivative that is not designated and effective as a hedging instrument.

Financial assets at amortized cost

Financial assets at amortized cost are non-derivative financial assets which are held within a business model whose objective is to hold assets to collect contractual cash flows and its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. A financial asset (unless it is a trade receivable without a significant financing component that is initially measured at the transaction price) is initially measured at fair value plus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition. Subsequent to initial recognition, financial assets are measured at amortized cost using the effective interest method, less any impairment.

Impairment of financial assets

Financial assets, other than those classified as FVTPL, are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been decreased.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account.

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INDIGNEOUS BLOOM HEMP CORPORATION Notes to the Financial Statements

Year Ended May 31, 2021 and Period from July 31, 2019 (date of incorporation) to May 31, 2020 (Expressed in Canadian dollars)

2. Significant Accounting Policies (continued)

• (f) Financial Instruments (continued)

Financial Assets (continued)

Impairment of financial assets (continued)

When a trade receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are offset against the allowance account. Changes in the carrying amount of the allowance account are recognized in the statement of operations. Loss allowances are based on the lifetime ECL’s that result from all possible default events over the expected life of the trade receivable, using the simplified approach.

For financial assets measured at amortized cost, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed through the statement of operations to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortized cost would have been had the impairment not been recognized.

Financial Liabilities and Equity Instruments

Classification as debt or equity

Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognized as the proceeds received, net of direct issue costs.

Other financial liabilities

Other financial liabilities (including loans and borrowings and trade payables and other liabilities) are initially measured at fair value, net of transaction costs. Subsequently, other financial liabilities are measured at amortized cost using the effective interest method.

The effective interest method is a method of calculating the amortized cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

• (g) Leases

At inception of the contract, the Company assesses whether a contract is, or contains, a lease by evaluating if the contract conveys the right to control the use of an identified asset. For contracts that contain a lease, the Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted by any initial direct costs, and costs to dismantle and remove the underlying asset less any lease incentives. The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the underlying asset or the end of the lease term. Under IFRS 16, right-of-use assets are tested for impairment in accordance with IAS 36, Impairment of Assets.

10

INDIGNEOUS BLOOM HEMP CORPORATION Notes to the Financial Statements

Year Ended May 31, 2021 and Period from July 31, 2019 (date of incorporation) to May 31, 2020 (Expressed in Canadian dollars)

2. Significant Accounting Policies (continued)

(g) Leases (continued)

The lease liability is initially measured at the present value of lease payments to be paid subsequent to the commencement date of the lease, discounted either at the interest rate implicit in the lease or the Company’s incremental borrowing rate. The lease payments measured in the initial lease liability include payments for an optional renewal period, if any, if the Company is reasonably certain that it will exercise a renewal extension option. The liability is measured at amortized cost using the effective interest method and will be remeasured when there is a change in either the future lease payments or assessment of whether an extension or other option will be exercised. The lease liability is subsequently adjusted for lease payments and interest on the obligation. Interest expense on the lease obligation is included in the statement of operations.

The Company has elected not to recognize right ‐ of ‐ use assets and lease liabilities for leases with a lease term of less than 12 months and low value assets, and recognizes the lease payments ‐ associated with these leases as an expense on a straight line basis over the lease term, as permitted by IFRS 16.

• (h) Foreign Currency Translation

The functional and reporting currency is the Canadian dollar. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange in effect at the statement of financial position date. Non-monetary items are translated using the historical rate on the date of the transaction. Revenue and expenses are recorded at the rates on the transaction dates. Foreign exchange gains and losses are included in the statement of operations.

• (i) Income Taxes

Current income tax

Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Current income tax relating to items recognized directly in other comprehensive income or equity is recognized in other comprehensive income or equity and not in the statement of operations. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

Deferred income tax

Deferred income tax is provided using the statement of financial position method on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. The carrying amount of deferred income tax assets is reviewed at the end of each reporting period and recognized only to the extent that it is probable that sufficient taxable income will be available to allow all or part of the deferred income tax asset to be utilized. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation authority.

11

INDIGNEOUS BLOOM HEMP CORPORATION Notes to the Financial Statements Year Ended May 31, 2021 and Period from July 31, 2019 (date of incorporation) to May 31, 2020 (Expressed in Canadian dollars)

2. Significant Accounting Policies ( continued)

(j) Loss Per Share

Basic loss per share is computed using the weighted average number of common shares outstanding during the year. The treasury stock method is used for the calculation of diluted loss per share, whereby all “in the money” stock options and share purchase warrants are assumed to have been exercised at the beginning of the period and the proceeds from their exercise are assumed to have been used to purchase common shares at the average market price during the period. When a loss is incurred during the period, basic and diluted losses per share are the same as the exercise of stock options and share purchase warrants is considered to be anti-dilutive. As at May 31, 2021 and 2020, the Company had no potentially dilutive shares outstanding.

(k) Comprehensive Loss

Comprehensive loss is the total non-owner change in equity for a reporting period. This change encompasses all changes in equity other than transactions from shareholders. For the periods ended May 31, 2021 and 2020, the Company did not have any transactions impacting comprehensive income (loss).

• (l) Accounting Standards Issued But Not Yet Effective

A number of new standards, and amendments to standards and interpretations, are not yet effective for the year ended May 31, 2021, and have not been early adopted in preparing these financial statements. These new standards, and amendments to standards and interpretations are either not applicable or are not expected to have a significant impact on the Company’s financial statements.

3. Property and Equipment

Property and Equipment
	Building	Equipment	Total
	$	$	$
Cost:
Balance, July 31, 2019 (date of incorporation)	–	–	–
Additions	249,548	199,780	449,328
Balance, May 31, 2020	249,548	199,780	449,328
Additions	22,105	42,436	64,541
Balance,May31,2021	271,653	242,216	513,869
Accumulated depreciation:
Balance, July 31, 2019 (date of incorporation)	–	–	–
Additions	1,834	28,420	30,254
Balance, May 31, 2020	1,834	28,420	30,254
Additions	10,351	57,773	68,124
Balance,May31,2021	12,185	86,193	98,378
Carrying amounts:
As at May31,2020	247,714	171,360	419,074
As at May31,2021	259,468	156,023	415,491

12

INDIGNEOUS BLOOM HEMP CORPORATION

Notes to the Financial Statements

Year Ended May 31, 2021 and Period from July 31, 2019 (date of incorporation) to May 31, 2020 (Expressed in Canadian dollars)

4. Right-of-use Assets

Right-of-use assets is comprised of the following:

Right-of-use assets is comprised of the following:
	Equipment
	$
Cost:
Balance, July 31, 2019 (date of incorporation)	–
Additions	231,754
Balance,May31,2020 and 2021	231,754
Accumulated depreciation:
Balance, July 31, 2019 (date of incorporation)	–
Additions	48,547
Balance, May 31, 2020	48,547
Additions	48,920
Balance,May31,2021	97,467
Carrying amount:
As at May31,2020	183,207
As at May31,2021	134,287

5. Loans Payable

• (a) As at May 31, 2021, the Company owed $37,575 (2020 - $49,088) to a non-related party. Under the term of the loan, the amount is secured by first charge over certain of the Company’s equipment, bears interest at 4.65% per annum, and is repayable in one payment of $7,749 and four equal annual installments of $13,797 to the maturity date of January 1, 2024.

• (b) As at May 31, the Company owed $115,000 (2020 - $nil) to a non-related party which is noninterest bearing, unsecured, and due on demand.

6. Lease Liabilities

Lease Liabilities
	2021	2020
	$	$
Balance, beginning of period		–
Additions	195,652	231,754
Principal payments	(70,959)	(48,527)
Interest payments	9,012	12,425
Balance, end of period	133,705	195,652
Less: current portion	41,434	39,117
Non-currentportion	92,271	156,535

The lease liability was discounted using the rates noted in the lease agreements, which range from 4.36% - 7.50%.

13

INDIGNEOUS BLOOM HEMP CORPORATION

Notes to the Financial Statements

Year Ended May 31, 2021 and Period from July 31, 2019 (date of incorporation) to May 31, 2020 (Expressed in Canadian dollars)

7. Related Party Transactions

• (a) As at May 31, 2021, the Company owed $647,981 (2020 - $551,317) to companies controlled by a significant shareholder of the Company which is unsecured, non-interest bearing, and due on demand.

• (b) As at May 31, 2021, the Company owed $5,000 (2020 - $5,000) to a company with a common director and where a significant shareholder of the Company is a director. The amount owed is unsecured, non-interest bearing, and due on demand.

8. Share Capital

Authorized: Unlimited number of Class A common shares without par value

• (a) On June 15, 2020, the Company issued 16,500,000 common shares at $0.02 per share for proceeds of $330,000 to a significant shareholder of the Company, of which $61,166 is receivable as at May 31, 2021.

• (b) On June 15, 2020, the Company issued 3,500,000 common shares at $0.005 per share for proceeds of $17,500 to a significant shareholder of the Company.

• (c) On June 15, 2020, the Company cancelled the 100 founder’s shares.

• (d) On July 31, 2019, the Company issued 100 common shares for proceeds of $1 as founder’s shares.

9. Capital Management

The Company manages its capital to maintain its ability to continue as a going concern and to provide returns to shareholders and benefits to other stakeholders. The capital structure of the Company consists of equity comprised of issued share capital.

The Company manages its capital structure and makes adjustments to it in light of economic conditions. The Company, upon approval from its Board of Directors, will balance its overall capital structure through new share issuances or by undertaking other activities as deemed appropriate under the specific circumstances.

The Company is not subject to externally imposed capital requirements and the Company’s overall strategy with respect to capital risk management remains unchanged from incorporation.

10. Commitments

• (a) On June 1, 2020, the Company entered into a one year service contract with a third-party contractor for farming and cultivation services. Per the agreement, the contractor is to receive $400 per acre planted and $600 per acre harvested, with a minimum area cultivated of 200 acres. The contract was extended for an additional year.

• (b) On January 21, 2021, the Company executed a Technology License Agreement dated November 30, 2020 (as amended on June 6, 2021) with a third party (“Licensor”). The Licensor has developed and invented patent pending technology that can efficiently separate hemp and cannabis plant matter making the harvesting costs effective and streamlined (the “Technology”). The Company and the Licensor intend to commercialize the Technology. The Licensor will be responsible for the support and services of the Technology for a period of five years from November 30, 2020. The Company has an exclusive, worldwide license for which it will pay a license fee of $1,200,000 to the Licensor. The license fee will become due and payable upon the Company completing its first commercial sale of hemp products harvested using the technology and having a commercial value equal to or greater than the license fee. The Licensor will also be entitled to a royalty of 8% of gross sales on licensed products which are manufactured and sold by the licensee during the term of the agreement.

14

INDIGNEOUS BLOOM HEMP CORPORATION

Notes to the Financial Statements

Year Ended May 31, 2021 and Period from July 31, 2019 (date of incorporation) to May 31, 2020 (Expressed in Canadian dollars)

11. Proposed Transaction

On September 4, 2020, the Company entered into an agreement to be acquired by Veritas Pharma Inc. (“Veritas”). The Company will transfer 100% of its issued and outstanding shares for aggregate consideration of $28,000,000 to be provided in common shares of Veritas, at a deemed price per share equal to the closing price on the CSE on the day prior to closing.

On April 29, 2021, the acquisition agreement was approved by the shareholders of Veritas. The closing of the acquisition is subject to regulatory and Canadian Securities Exchange approval. Refer to Note 14.

As at May 31, 2021, the Company is owed $61,252 (2020 - $nil) from Veritas which is non-interest bearing, unsecured, and due on demand.

12. Financial Instruments and Risk Management

• (a) Fair Values

Fair value measurements are classified using a fair value hierarchy that reflects the significance of inputs used in making the measurements. The fair value hierarchy has the following levels:

• Level 1 - valuation based on quoted prices (unadjusted) in active markets for identical assets or liabilities;

• Level 2 - valuation techniques based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and,

• Level 3 - valuation techniques using inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The fair values of the Company’s financial instruments, which include cash, due from Veritas, accounts payable, loans payable, lease liabilities, and amounts due to related parties, approximate their carrying values due to the relatively short-term maturity of these instruments.

(b) Credit Risk

Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash. The Company limits its exposure to credit loss by placing its cash with high credit quality financial institutions. The carrying amount of financial assets represents the maximum credit exposure.

• (c) Foreign Exchange Rate Risk

Foreign exchange risk is the risk that the Company’s financial instruments will fluctuate in value as a result of movements in foreign exchange rates. Foreign exchange risk arises from purchase transactions. The Company is not exposed to significant currency risk.

• (d) Interest Rate Risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is not exposed to significant interest rate risk as it does not have any liabilities with variable rates.

• (e) Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company's objective to managing liquidity risk is to ensure that it has sufficient liquidity available to meet its liabilities when due. The Company relies on raising debt or equity financing in a timely manner.

15

INDIGNEOUS BLOOM HEMP CORPORATION

Notes to the Financial Statements

Year Ended May 31, 2021 and Period from July 31, 2019 (date of incorporation) to May 31, 2020 (Expressed in Canadian dollars)

13. Income Taxes

The Company is subject to Canadian federal and provincial taxes at the rate of 11%. The tax effect of the significant temporary differences, which comprise deferred income tax assets and liabilities, are as follows:

as follows:
	2021	2020
	$	$
Canadian statutory income tax rate	114%	11%
Income tax recovery at statutory rate	(43,980)	(42,289)
Tax effect of:
Permanent differences and other	(213)	276
Change in unrecognized deferred income tax assets	44,193	42,013
Income taxprovision		–

The significant components of deferred income tax assets and liabilities are as follows:

	2021	2020
	$	$
Deferred income tax assets (liabilities)
Non-capital losses carried forward	92,021	43,614
Property and equipment	(5,751)	(2,715)
Right-of-use assets	(64)	(980)
Unrecognized deferred income tax assets	(86,206)	(42,013)
Net deferred income tax asset	–	–

As at May 31, 2021, the Company has not recognized a deferred tax asset in respect of non-capital - loss carryforwards of $836,558 (2020 $396,487) which may be carried forward to apply against future income for Canadian income tax purposes, subject to the final determination by taxation authorities, expiring in the following years:

	$
2040	396,487
2041	440,071
	836,558

14. Subsequent Event

On September 1, 2021, the Company received conditional approval of the CSE in respect to its business combination with Veritas. On September 24, 2021, Veritas issued 62,221,972 common shares to complete the business combination with the Company.

16

INDIGENOUS BLOOM HEMP CORPORATION

Condensed Financial Statements

For the Three Months Ended August 31, 2021 (Expressed in Canadian dollars)

(unaudited)

INDIGENOUS BLOOM HEMP CORPORATION Condensed Statements of Financial Position (Expressed in Canadian dollars) (unaudited)

	August 31,	May 31,
	2021	2021
	$	$
Assets
Current assets
Cash	378,698	25,841
Biological assets (Note 3)	6,330,007	–
Prepaid expenses	2,353	48,290
Due from Veritas Pharma Inc. (Note 11)	–	61,252
Total current assets	6,711,058	135,383
Non-current assets
Property and equipment (Note 4)	489,021	415,491
Right-of-use assets (Note 5)	121,176	134,287
Total non-current assets	610,197	549,778
Total assets	7,321,255	685,161
Liabilities
Current liabilities
Accounts payable and accrued liabilities	492,895	243,829
Current portion of loans payable (Note 6)	127,050	127,050
Current portion of lease liabilities (Note 7)	32,524	41,434
Due to Veritas Pharma Inc. (Note 11)	369,364	–
Due to related parties (Note 8)	652,981	652,981
Total current liabilities	1,674,814	1,065,294
Non-current liabilities
Loans payable (Note 6)	25,525	25,525
Lease liabilities (Note 7)	89,980	92,271
Total non-current liabilities	115,505	117,796
Total liabilities	1,790,319	1,183,090
Shareholders’ equity (deficit)
Share capital	347,501	347,501
Share subscriptions receivable	(61,166)	(61,166)
Retained earnings (deficit)	5,244,601	(784,264)
Total shareholders’equity (deficit)	5,530,936	(497,929)
Total liabilities and shareholders’ equity (deficit)	7,321,255	685,161

Nature of operations and continuance of business (Note 1) Commitments (Note 9) Subsequent event (Note 12)

Approved and authorized for issuance on behalf of the Board of Directors on December 7, 2021:

/s/ Allen Szmyrko Allen Szmyrko, Director	/s/ Joshua Matvieshen
	Joshua Matvieshen, Director

(The accompanying notes are an integral part of these condensed financial statements)

1

INDIGENOUS BLOOM HEMP CORPORATION

Condensed Statements of Operations and Comprehensive Loss (Expressed in Canadian dollars)

	Three months	Three months
	ended	ended
	August 31,	August 31,
	2021	2020
	$	$
Expenses
Depreciation (Notes 4 and 5)	30,829	32,344
Insurance	14,664	–
Licenses	–	1,090
Production costs	13,052	9,656
Professional fees	9,238	2,048
Repairs and maintenance	2,199	–
Total expenses	69,982	45,138
Loss before other income (expense)	(69,982)	(45,138)
Other income (expense)
Interest expense	(2,853)	(3,768)
Unrealized gain on change in fair value of biological assets (Note 3)	6,101,700	–
Total other income (expense)	6,098,847	(3,768)
Net income(loss)and comprehensive income(loss)for theperiod	6,028,865	(48,906)
Net earnings(loss) per share,basic and diluted	0.30
Weighted average shares outstanding	20,000,000	16,739,147

(The accompanying notes are an integral part of these condensed financial statements)

2

INDIGENOUS BLOOM HEMP CORPORATION Condensed Statements of Changes in Equity (Deficit) (Expressed in Canadian dollars)

	Share subscriptions receivable $ Retained earnings (deficit) $ Total shareholders’ equity (deficit) $ Share capital Number of shares Amount $
Balance, May 31, 2021 Net income for the period	20,000,000 347,501 (61,166) (784,264) (497,929) – – – 6,028,865 6,028,865
Balance,August 31,2021	20,000,000 347,501 (61,166) 5,244,601 5,530,936
Balance, May 31, 2020 Shares returned and cancelled Shares issued Net loss for the period	100 1 – (384,449) (384,448) (100) – – – – 20,000,000 347,500 (307,500) – 40,000 – – – (48,906) (48,906)
Balance,August 31,2020	20,000,000 347,501 (307,500) (433,355) (393,354)

(The accompanying notes are an integral part of these condensed financial statements)

3

INDIGENOUS BLOOM HEMP CORPORATION Condensed Statements of Cash Flows (Expressed in Canadian dollars) (unaudited)

	Three months	Three months
	ended	ended
	August 31,	August 31,
	2021	2020
	$	$
Operating activities
Net income (loss) for the period	6,028,865	(48,906)
Items not involving cash:
Depreciation	30,829	32,344
Interest expense	2,412	3,193
Unrealized gain on change in fair value of biological assets	(6,101,700)	–
Changes in non-cash operating working capital:
Biological assets	(228,307)	–
Prepaid expenses	45,937	–
Due from Veritas Pharma Inc.	61,252	–
Accounts payable and accrued liabilities	144,205	16,505
Due to relatedparties	–	(3,136)
Net cash used in operatingactivities	(16,507)	–
Financing activities
Proceeds from loan payable	500,000	–
Repayment of loanpayable	(130,636)	–
Net cash provided by financing activities	369,364	–
Change in cash	352,857	–
Cash,beginningofperiod	25,841	–
Cash, end ofperiod	378,698	–
Non-cash investing and financing activities:
Property and equipment included in accounts payable	91,248	344,502
Property and equipment financed by loan payable	–	55,612
Leasepayments recorded in accountspayable and accrued liabilities	13,613	13,215
Cash paid for:
Interest	2,412	3,193
Income taxes	–	–

(The accompanying notes are an integral part of these condensed financial statements)

4

INDIGNEOUS BLOOM HEMP CORPORATION Notes to the Condensed Financial Statements Three Months Ended August 31, 2021 (Expressed in Canadian dollars) (unaudited)

1. Nature of Operations and Continuance of Business

Indigenous Bloom Hemp Corporation (the “Company”) was incorporated on July 31, 2019 under the Canada Business Corporations Act. Its current focus is the production of hemp for commercial use. The Company’s head office is located at 2220 Horizon Drive East, Kelowna, BC, V1Z 3L4.

On March 11, 2020, the World Health Organization declared COVID-19 a global pandemic. This contagious disease outbreak and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, leading to an economic downturn. The impact on the Company is not material and management continues to monitor the situation.

These condensed financial statements have been prepared on the going concern basis, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. During the period ended August 31, 2021, the Company did not generate any revenue and had negative cash flow from operations. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholder and related parties, the ability to raise equity or debt financing, and the attainment of profitable operations from the Company's future business. These factors indicate the existence of a material uncertainty that may cast significant doubt on the Company’s ability to continue as a going concern. These condensed financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. These adjustments could be material.

2. Significant Accounting Policies

• (a) Statement of Compliance

These condensed financial statements have been prepared in accordance with International Financial Reporting Standards applicable to interim financial information, as outlined in International Accounting Standard (“IAS”) 34, “Interim Financial Reporting” and using the accounting policies consistent with those in the audited financial statements as at and for the year ended May 31, 2021.

These condensed financial statements do not include all disclosures normally provided in annual financial statements and should be read in conjunction with the annual financial statements as at and for the year ended May 31, 2021. Interim results are not necessarily indicative of the results expected for the fiscal year.

• (b) Accounting Standards Issued But Not Yet Effective

A number of new standards, and amendments to standards and interpretations, are not yet effective for the period ended August 31, 2021, and have not been early adopted in preparing these financial statements. These new standards, and amendments to standards and interpretations are either not applicable or are not expected to have a significant impact on the Company’s financial statements.

3. Biological Assets

Biological Assets
	$
Balance, May 31, 2021	–
Increase due to capitalized costs	228,307
Unrealized fair value gain on growth of biological assets	6,101,700
Balance,August 31,2021	6,330,007

Biological assets consists of actively growing hemp plants to be harvested as agricultural produce.

5

INDIGNEOUS BLOOM HEMP CORPORATION Notes to the Condensed Financial Statements Three Months Ended August 31, 2021 (Expressed in Canadian dollars) (unaudited)

3. Biological Assets (continued)

The average grow cycle of plants up to the point of harvest is approximately 19 weeks. Plants in production are plants that are in the flowering stage and are valued at fair value less cost to complete and cost to sell, where fair value represents the Company’s selling price per kilogram of cannabidiol (“CBD”) oil extracted from hemp the hemp plants. As at August 31, 2021, it was expected that the Company’s biological assets would yield 12,348 kilograms of CBD oil from the hemp plants harvested. Refer to Note 10 – Fair Value Measurements, for the inputs and sensitivity analysis for the fair value of the biological assets.

4. Property and Equipment

	Building	Equipment	Total
	$	$	$
Cost:
Balance, May 31, 2021	271,653	242,216	513,869
Additions	–	91,248	91,248
Balance,August 31,2021	271,653	333,464	605,117
Accumulated depreciation:
Balance, May 31, 2021	12,185	86,193	98,378
Additions	2,595	15,123	17,718
Balance,August 31,2021	14,780	101,316	116,096
Carrying amounts:
As at May31,2021	259,468	156,023	415,491
As at August 31,2021	256,873	232,148	489,021
Right-of-use Assets
Right-of-use assets is comprised of the following:
			Equipment
			$
Cost:
Balance,May31,2021 and August 31,2021			231,754
Accumulated depreciation:
Balance, May 31, 2021			97,467
Additions			13,111
Balance,August 31,2021			110,578
Carrying amount:
As at May31,2021			134,287
As at August 31,2021			121,176

5. Right-of-use Assets

6

INDIGNEOUS BLOOM HEMP CORPORATION Notes to the Condensed Financial Statements Three Months Ended August 31, 2021 (Expressed in Canadian dollars) (unaudited)

6. Loans Payable

• (a) As at August 31, 2021, the Company owed $37,575 (May 31, 2021 - $37,575) to a non-related party. Under the term of the loan, the amount is secured by first charge over certain of the Company’s equipment, bears interest at 4.65% per annum, and is repayable in one payment of $7,749 and four equal annual installments of $13,797 to the maturity date of January 1, 2024.

• (b) As at August 31, 2021, the Company owed $115,000 (May 31, 2021 - $115,000) to a non-related party which is non-interest bearing, unsecured, and due on demand.

7. Lease Liabilities

Lease Liabilities
	$
Balance, May 31, 2021	133,705
Additions	-
Principal payments	(13,613)
Interest payments	2,412
Balance, August 31, 2021	122,504
Less: current portion	32,524
Non-currentportion	89,980

The lease liability was discounted using the rates noted in the lease agreements, which range from 4.36% - 7.50%.

8. Related Party Transactions

• (a) As at August 31, 2021, the Company owed $647,981 (May 31, 2021 - $647,981) to companies controlled by a significant shareholder of the Company which is unsecured, non-interest bearing, and due on demand.

• (b) As at August 31, 2021, the Company owed $5,000 (May 31, 2021 - $5,000) to a company with a common director and where a significant shareholder of the Company is a director. The amount owed is unsecured, non-interest bearing, and due on demand.

9. Commitments

• (a) On June 1, 2020, the Company entered into a one year service contract with a third-party contractor for farming and cultivation services. Per the agreement, the contractor is to receive $400 per acre planted and $600 per acre harvested, with a minimum area cultivated of 200 acres. The contract was extended for an additional year.

• (b) On January 21, 2021, the Company executed a Technology License Agreement dated November 30, 2020 (as amended on June 6, 2021) with a third party (“Licensor”). The Licensor has developed and invented patent pending technology that can efficiently separate hemp and cannabis plant matter making the harvesting costs effective and streamlined (the “Technology”). The Company and the Licensor intend to commercialize the Technology. The Licensor will be responsible for the support and services of the Technology for a period of five years from November 30, 2020. The Company has an exclusive, worldwide license for which it will pay a license fee of $1,200,000 to the Licensor. The license fee will become due and payable upon the Company completing its first commercial sale of hemp products harvested using the technology and having a commercial value equal to or greater than the license fee. The Licensor will also be entitled to a royalty of 8% of gross sales on licensed products which are manufactured and sold by the licensee during the term of the agreement.

7

INDIGNEOUS BLOOM HEMP CORPORATION Notes to the Condensed Financial Statements Three Months Ended August 31, 2021 (Expressed in Canadian dollars) (unaudited)

10. Fair Value Measurements

The fair values of the Company’s financial instruments, which include cash, due from/to Veritas, accounts payable, loans payable, lease liabilities, and amounts due to related parties, approximate their carrying values due to the relatively short-term maturity of these instruments.

Biological assets

The fair value of biological assets is categorized in Level 3 on the fair value hierarchy. The Company measures its biological assets at fair value less costs to sell. This is determined using a model which estimates the expected harvest yield in kilograms for plants that are actively growing, and then adjusts that amount for the expected selling price per kilogram in the market in which the biological asset is growing. The estimates used in determining the fair value of biological assets are subject to volatility and several uncontrollable factors, which could significantly affect the fair value of biological assets in future periods. The significant assumptions used in determining the fair value of biological assets include:

• Expected yield by plant – represents the expected number of kilograms of finished hemp inventory which are expected to be obtained from each harvested hemp plant;

• Wastage of plants – represents the weighted average percentage of biological assets which are expected to fail to mature into hemp plants that can be harvested;

• Duration of the production cycle – represents the weighted average number of weeks out of the 19 week growing cycle that biological assets have reached as of the measurement date;

• Percentage of costs incurred as of this date compared to the total costs expected to be incurred – this is calculated as cost per kilogram of CBD oil extracted from harvested hemp to complete the sale of CBD oil post harvest, consisting of the cost of direct and indirect materials and labour related further production, labeling, and packaging;

• Percentage of costs incurred for each stage of plant growth – represents the direct and indirect production costs incurred that are capitalized; and

• Market values – this is calculated as the current market price per kilogram in the market in which the biological asset is being produced. This is expected to approximate future selling price.

The Company accretes fair value on a straight-line basis according to stage of growth. As a result, a hemp plant that is 50% through its 19 week growing cycle would be ascribed approximately 50% of its harvest date expected fair value. All plants are to be harvested hemp and as at August 31, 2021, on average, were 30% complete. An increase or decrease in the estimated sale price would result in a significant change in the fair value of biological assets.

The following table highlights the sensitivities and impact of changes in significant assumptions to the fair value of biological assets:

fair value of biological assets:
Significant inputs and assumptions Sensitivity inputs Sensitivity	(+/-) Impact on fair value
August 31, 2021 $ Total completed kilograms 7,881 (+/-) 10% kilograms yield Average cost per kilogram to complete production 8,000 (+/-) $800 per kilogram Average selling price per kilogram, less costs 8,000 (+/-) $800 per kilogram	August 31, 2021 $
	6,304,800 6,304,800 12,609,600

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INDIGNEOUS BLOOM HEMP CORPORATION Notes to the Condensed Financial Statements Three Months Ended August 31, 2021 (Expressed in Canadian dollars) (unaudited)

11. Proposed Transaction

On September 4, 2020, the Company entered into an agreement to be acquired by Indigenous Bloom Hemp Corp. (formerly Veritas Pharma Inc.) (“Veritas”). The Company will transfer 100% of its issued and outstanding shares for aggregate consideration of $28,000,000 to be provided in common shares of Veritas, at a deemed price per share equal to the closing price on the CSE on the day prior to closing.

On April 29, 2021, the acquisition agreement was approved by the shareholders of Veritas. The closing of the acquisition is subject to regulatory and Canadian Securities Exchange approval. Refer to Note 12.

As at August 31, 2021, the Company owed $369,364 to (May 31, 2021 – was owed $61,252 from) Veritas which is non-interest bearing, unsecured, and due on demand.

12. Subsequent Event

On September 1, 2021, the Company received conditional approval of the CSE in respect to its business combination with Veritas. On September 24, 2021, Veritas issued 62,221,972 common shares to complete the business combination with the Company.

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