ICANIC BRANDS COMPANY INC. (FORMERLY INTEGRATED CANNABIS COMPANY, INC.)

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTH PERIOD ENDED APRIL 30, 2021 (Expressed in Canadian Dollars)

(Unaudited – prepared by management)

NOTICE TO READER

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

The accompanying condensed interim consolidated financial statements of the Company have been prepared by and are the responsibility of the Company’s management.

The Company’s independent auditor has not performed a review of these condensed interim consolidated financial statements in accordance with the standards established by the Chartered Professional Accountants of Canada for a review of interim financial statements by an entity’s auditor.

ICANIC BRANDS COMPANY INC. (FORMERLY INTEGRATED CANNABIS COMPANY, INC.) Condensed Interim Consolidated Statements of Financial Position (Expressed in Canadian Dollars) (Unaudited)

(Expressed in Canadian Dollars) (Unaudited)
	April 30, 2021	July 31, 2020
	(Unaudited)	(Audited)
AS AT	$	$
Current assets
Cash and cash equivalents	2,553,138	2,037,795
Accounts receivable	1,390,727	1,039,681
Taxes recoverable	97,352	76,062
Prepaid expenses and deposits	903,528	1,078,807
Inventory (note 5)	2,076,613	694,855
Promissory note receivable	1,290,848	1,408,427
Loans receivable (note 6)	4,699,735	4,699,735
	13,011,941	11,035,362
Investments	2	2
Property and equipment (note 4)	4,830,163	4,477,230
Brands and licenses (notes 7)	52,300,945	52,300,945
Total Assets	70,143,051	67,813,539
EQUITY AND LIABILITIES
Current liabilities
Amounts payable and other liabilities (note 8)	1,613,021	1,557,759
Lease liability (note 10)	193,566	172,084
Loan payable	23,258	25,758
Derivative liability (note 9)	63,882	129,745
Notes payable (note 9)	716,818	149,636
	2,610,545	2,034,982
Lease liability (note 10)	754,074	992,497
Total liabilities	3,361,619	3,027,479
Shareholders' Equity
Common share capital (note 14)	83,735,183	80,965,645
Shares to be issued (note 14)	-	9,800
Share subscriptions receivable	-	(195,663)
Reserves (note 14)	5,879,309	5,692,472
Deficit	(22,836,060)	(21,686,194)
Total shareholders' equity	66,778,432	64,786,060
Total liabilities and shareholders' equity	70,143,051	67,813,539

Nature of operations (Note 1) Going concern (Note 2) Subsequent events (Note 19)

Approved on behalf of the board of directors on June 29, 2021

“Brandon Kou, Director”

“Nishal Kumar, Director”

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

ICANIC BRANDS COMPANY INC. (FORMERLY INTEGRATED CANNABIS COMPANY, INC.) Condensed Interim Consolidated Statements of Loss and Comprehensive Loss (Expressed in Canadian Dollars)

( Unaudited )

(Expressed in Canadian Dollars) (Unaudited)
	For the three	month period	For the nine	month period
	ended April 30,		ended April 30,
	2021	2020	2021	2020
Sales	3,236,199	1,717,350	8,507,210	5,324,844
Cost of sales	(1,679,771)	(947,328)	(5,755,755)	(3,736,558)
Gross Margin	1,556,428	770,022	2,751,455	1,588,286
Operating Expenses
Advertising and promotion	68,476	18,593	380,367	986,360
Accretion (Note 10)	-	6,481	-	8,666
Bank charges	1,183	8,555	18,051	17,373
Depreciation (Note 4)	24,892	(16,409)	76,499	33,645
Filing and listing fees	4,825	4,329	43,940	38,815
Foreign exchange	-	(45,042)	-	-
Interest (Note 10)	40,029	2,662	97,789	2,662
Payroll expense	338,693	230,516	1,242,208	230,516
Legal and professional fees (Note 13)	67,567	347,380	627,079	941,820
Consulting fees (Note 13)	22,819	15,886	68,950	983,914
Office and general expenses	304,645	66,487	655,050	279,650
Share-based compensation (Notes 14)	226,418	132,730	743,853	1,121,057
Regulatory and licensing fees	204,243	(6,604)	56,746	20,907
Total operating expenses	(1,303,790)	(765,564)	(4,010,532)	(4,665,385)
Net income (loss) before other items	252,638	4,458	(1,259,077)	(3,077,099)
Gain on foreign exchange	132	104,543	(2,208)	104,543
Gain on sale or marketable securities	-	4,976	-	4,976
Gain on settlement of accounts receivable	-	15,763	-	15,763
Gain on settlement of debt	-	3,629,032	-	3,629,032
Recapture on disposition of mineral property	-	-	175,000	-
Revaluation of derivative liability (Note 9)	10,193	30,084	47,404	30,084
Interest revenue	1	111	225	1,343
Net income (loss) before income taxes	262,964	3,788,967	(1,038,656)	708,642
Income taxes	(64,099)	-	(111,210)	-
Net income (loss)	198,865	3,788,967	(1,149,866)	708,642
Foreign currency translation	(486,055)	356,182	(705,417)	363,240
Net comprehensive income (loss)	(287,910)	4,145,149	(1,855,283)	1,071,882
Basic and diluted net loss per share	(0.00)	0.02	(0.01)	0.01
Weighted average number of common	226,200,948	211,865,173	195,200,100	160,956,855
shares outstanding

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

ICANIC BRANDS COMPANY INC. (FORMERLY INTEGRATED CANNABIS COMPANY, INC.) Condensed Interim Consolidated Statements of Cash Flows (Expressed in Canadian Dollars) ( Unaudited )

Condensed Interim Consolidated Statements of Cash Flows (Expressed in Canadian Dollars) (Unaudited)
	2021	2020
For the nine months ended April 30,	$	$
Operating activities
Net income (loss) for the period	(1,149,866)	708,642
Finance expense	143,350	9,217
Revaluation of derivative liability	(35,204)	(30,084)
Depreciation	76,499	33,645
Foreign exchange	20,504	63,798
Gain on settlement of accounts receivable	-	(15,763)
Realized gain on sale of marketable security	-	(4,976)
Gain on settlement of debt	-	(3,629,032)
Consulting services	-	731,500
Share-based compensation	743,853	1,121,057
Net changes in non-cash working capital
Accounts receivable	(351,045)	(673,431)
Government HST recoverable	(21,290)	(25,532)
Prepaid expenses and deposits	275,279	(1,938,725)
Inventory	(1,381,758)	(50,402)
Accounts payable and accrued liabilities	55,262	(62,091)
Net cash used in operating activities	(1,624,416)	(3,762,177)
Investing activities
Investment in CA Brands	-	(233,230)
Purchase of property and equipment	(429,432)	(651,687)
Loan receivable	-	(300,000)
Repayment of loans receivable	-	(43,432)
Proceeds from sale of marketable securities	-	354,790
Rent repayments	(139,187)	(42,560)
Net cash used in investing activities	(568,619)	(916,119)
Financing activities
Proceeds from issuance of shares, net of share issuance cost	907,500	59,423
Loan payable	412,494	-
Secured Loan payable	-	284,543
Share subscription received	185,863	-
Exercise of warrants	1,705,438	260,100
Exercise of Options	205,000	-
Repayment of loan payable	(2,500)	(60,490)
Net cash provided by financing activities	3,413,795	543,576
Net change in cash	1,220,760	(4,134,720)
Effect of foreign exchange on cash	(705,417)	363,229
Cash, beginning of year	2,037,795	4,681,677
Cash, end of period	2,553,138	910,196
Repaid interest	-	-
Taxespaid	-	-

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

ICANIC BRANDS COMPANY INC. (FORMERLY INTEGRATED CANNABIS COMPANY, INC.) Condensed Interim Consolidated Statement of Equity For the Nine Months Ended April 30, 2021 (Expressed in Canadian Dollars)

( Unaudited )

(Unaudited)
	Common	Share Capital
						Reserve for
					Share	foreign		Reserve for
	Number of		Shares to be		subscription	currency		share-based
	shares	Amount		issued	s receivable	translation		payments	Deficit	Total
Balance at July 31, 2019	134,209,393	$ 52,491,279	$ 17,600,000		$ (95,286)	$ (43,443)		$ 4,436,246	$ (20,910,757)	$ 53,478,039
Exercise of warrants	693,594	260,100		-	-		-	-	-	260,100
Shares for services	1,550,000	731,500		-	-		-	-	-	731,500
Shares exchange agreement	40,000,000	17,600,000	(17,600,000)		-		-	-	-	-
Shares for debt	40,322,580	8,870,968		-	-		-	-	-	8,870,968
Share subscriptions received	-	-		9,800	49,623		-	-	-	59,423
Share-based compensation	-	-		-	-		-	1,121,057	-	1,121,057
Foreign currency translation	-	-		-	-	363,240		-	-	363,240
Loss for the period	-	-		-	-		-	-	708,642	708,642
Balance at April 30, 2020	216,775,567	$ 79,953,847	$	9,800	$ (45,663)	$ 319,797		$ 5,557,303	$(20,202,115)	$65,592,968
Balance at July 31, 2020	221,065,567	$ 80,965,645	$	9,800	$(195,663)	$ (61,912)		$ 5,754,384	$ (21,686,194)	$ 64,786,060
Private placements	3,710,000	779,100		-	-		-	148,400	-	927,500
Share issuance costs	-	(20,000)		-	-		-	-	-	(20,000)
Exercise of warrants	4,670,101	1,705,438		-	-		-	-	-	1,705,438
Exercise of options	600,000	205,000		-	-		-	-	-	205,000
Reclassification	-	-		(9,800)	9,800		-	-	-	-
Shares issued for services	183,150	100,000		-	-		-	-	-	100,000
Share subscription received	-	-		-	185,863		-	-	-	185,863
Share-based compensation	-	-		-	-		-	743,854	-	743,854
Foreign currency translation	-	-		-	-	(705,417)		-	-	(705,417)
Loss for the period	-	-		-	-		-	-	(1,149,866)	(1,149,866)
Balance at April 30, 2021	230,228,818	$ 83,735,183	$	-	$ -	$ (767,329)		$ 6,646,638	$ (22,836,060)	$ 66,778,432

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

ICANIC BRANDS COMPANY INC. (FORMERLY INTEGRATED CANNABIS COMPANY, INC.) Notes to the Condensed Interim Consolidated Financial Statements For the Nine Months Ended April 30, 2021 (Expressed in Canadian Dollars) (Unaudited)

1. Nature of Operations

Icanic Brands Company Inc. (Formerly Integrated Cannabis Company, Inc.) (“iCannaCo” or the “Company”) was incorporated on September 15, 2011, under the laws of the province of British Columbia and is registered extra-provincially under the laws of Ontario. The Company is a cannabis branded products manufacturer based in California and Nevada. The Company is a public company whose common shares are listed for trading on the Canadian Securities Exchange ("CSE") under the symbol “ICAN”. The head office of the Company is located at Suite 810 - 789 West Pender Street, Vancouver, BC, V6C 1H2, Canada.

During the year ended July 31, 2019, the Company completed the acquisition of all of the issued and outstanding shares of 1200665 B.C. Ltd. (note 15), which completed the acquisition of a Nevada cultivation manufacturing and real property interests of V6E Holdings LLC (“V6E”) and Sullivan Park Capital LLC. (“Sullivan Park”), and also completed the acquisition of all of the issued and outstanding shares of Ganja Gold Inc. (note 16), which holds a California cannabis manufacturing interests.

2. Going Concern Assumption

These condensed interim consolidated financial statements have been prepared on a going concern basis, which contemplates continuity of normal business activities and the realization of assets and discharge of liabilities in the normal course of business. As at April 30, 2021, the Company has yet to generate a positive net income and had an accumulated deficit of $22,836,060 (July 31, 2020 - $21,686,194). The Company is actively seeking additional sources of financing. In assessing whether the going concern assumption is appropriate, management takes into account all available information about the future, which is at least, but not limited to, twelve months from the end of the reporting period. Management is aware, in making its assessment, of uncertainties related to events or conditions that may cast significant doubt upon the entity’s ability to continue as a going concern that these uncertainties are material and, therefore, that it may be unable to realize its assets and discharge its liabilities in the normal course of business. Accordingly, they do not give effect to adjustments that would be necessary should the Company be unable to continue as a going concern and therefore to realize its assets and discharge its liabilities and commitments in other than the normal course of business and at amounts different from those in the accompanying condensed interim consolidated financial statements.

3. Statement of Compliance and Basis of Presentation

Statement of compliance

These condensed consolidated interim financial statements are prepared by the Company in accordance with International Accounting Standards 34 - Interim Financial Reporting of the International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board (“IASB”) and interpretations of the International Financial Reporting Interpretation Committee (“IFRIC”). The condensed consolidated interim financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Company’s annual consolidated financial statements as at and for the year ended July 31, 2020.

These condensed interim consolidated financial statements have been prepared using the accrual basis of accounting, except for cash flow information. Furthermore, these condensed consolidated interim financial statements are presented in Canadian dollars which is the functional currency of the Company.

3. Statement of Compliance and Basis of Presentation (Continued)

Basis of consolidation

These condensed interim consolidated financial statements include the financial statements of the Company and the entity controlled by the Company as follows:

Name	Date of acquisition
1127466 B.C. Ltd.	October 25, 2017
X-Sprays Industries Inc.	October 25, 2017
1200665 B.C. Ltd.	May 21, 2019
Ganja Gold Inc.	July 31,2019

All inter-company transactions and balances have been eliminated in the condensed interim consolidated financial statement presentation.

Use of Estimates

The preparation of these condensed interim consolidated financial statements requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed interim consolidated financial statements and the reported expenses during the period. Actual results could differ from these estimates.

Significant assumptions about the future and other sources of estimation uncertainty that management has made at the end of the reporting period, that could result in a material adjustment to the carrying amounts of assets and liabilities in the event that actual results differ from assumptions made, relate to:

Critical accounting estimates

i. Share-based payments and fair value adjustment to contingent liability are subject to estimation of the value of the award and warrants at the date of grant and measurement date using pricing models such as the Black-Scholes option valuation model. The option valuation model requires the input of highly subjective assumptions including the expected stock price volatility. Because the Company’s stock options have characteristics significantly different from those of traded options and because the subjective input assumptions can materially affect the calculated fair value, such value is subject to measurement uncertainty.
ii. The determination of income tax is inherently complex and requires making certain estimates and assumptions about future events. While income tax filings are subject to audits and reassessments, the Company has adequately provided for all income tax obligations. However, changes in facts and circumstances as a result of income tax audits, reassessments, jurisprudence and any new legislation may result in an increase or decrease in our provision for income taxes.
iii. Management reviews the useful lives of depreciable assets including property and equipment and customer contracts at each reporting date based on the expected utility of the assets to the Company. Actual results, however, may vary due to technical obsolescence.

Critical accounting judgments

i. The determination that the Company will continue as a going concern for the next year.
ii. The revenue recognition of sale revenue.
iii. The determination of related parties.

4. Property and Equipment

			Right-of-Use
	Building(1)	Equipment(2)	Asset	TOTAL
COSTS
Balance, July 31, 2019	$ 2,704,188	$ -	$ -	$ 2,704,188
Additions (note 12)	-	940,522	1,526,019	2,466,541
Lease termination (note 12)	-	-	(369,712)	(369,712)
Foreign currency adjustments	-	-	72,589	72,589
Balance, July 31, 2020	2,704,188	940,522	1,228,896	4,873,606
Additions	-	555,380	-	555,380
Foreign currency adjustments	-	-	94,473	94,473
Balance, April 30, 2021	2,704,188	1,495,902	1,323,369	5,523,459
ACCUMULATED DEPRECIATION
Balance, July 31, 2019 and 2020	-	299,122	97,254	396,376
Depreciation	-	220,421	76,499	295,097
Balance, April 30, 2021	-	519,543	173,753	671,473
NET BOOK VALUE
Balance, July 31, 2020	2,704,188	596,689	1,097,395	4,398,272
Balance, April 30, 2021	$ 2,704,188	$ 976,359	$ 1,149,616	$ 4,830,163

(1) During the year ended July 31, 2019, the Company acquired 1200665BC (note 14) resulting in the acquisition of certain property and equipment with a carrying value of $2,704,188. The building is not ready for its intended use and as a result, the Company did not record amortization on the building.

(2) As at April 30, 2021, the amortization of the Company’s equipment with Ganja Gold has been included in Cost of Sales on the consolidated statements of loss and comprehensive loss.

5. Inventory

As at April 30, 2021, Inventory consists of the following:

	April 30, 2021	July 31, 2020
	$	$
Finished goods	1,466,056	515,107
Raw material	610,557	179,748
Total	2,076,613	694,855

6. Loans Receivable

	Amount
	$
Balance, July 31, 2019	4,305,303
Additions made by 1200665BC	458,230
Repayments to Ganja Gold	(63,798)
Balance, July 31, 2020 and April 30, 2021	4,699,735

6. Loans Receivable (Continued)

During the year ended July 31, 2019, the Company acquired 1200665BC (Note 15) and Ganja Gold (note 16) resulting in the acquisition of certain loans receivable as follows:

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|||
|---|---|
|Entity|Amount|
|1200665BC|$ 4,241,505|
|Ganja Gold|63,798|
|Total|$ 4,305,303|

----- End of picture text -----

During the year ended July 31, 2020, the Company through 1200665BC advanced $225,000 to V6E and $233,230 to Sullivan Park.

The loans receivable acquired from 1200665BC are due from V6E and Sullivan Park as the closing conditions for the acquisitions of V6E and Sullivan Park by 1200665BC have not been met as at January 31, 2021. The loans receivable acquired from Ganja Gold are due from the shareholders which were repaid during the period ended January 31, 2021. The loans are unsecured, non-interest bearing and due on demand.

7. Intangible Assets

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|||
|---|---|
|Amount|
|$|
|Balance, July 31, 2019 and July 31, 2020 and|
|April 30, 2021|52,300,945|

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During the year ended July 31, 2019, the Company acquired brands and cannabis license via the acquisition of Ganja Gold Inc. and 1200665 B.C. Ltd.

8. Accounts Payable

As at April 30, 2021, accounts payable consists of the following:

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||||
|---|---|---|
|April 30, 2021|July 31, 2020|
|$|$|
|Accounts payable|1,348,814|1,507,759|
|Payroll liabilities|219,207|-|
|Accrued liabilities|45,000|50,000|
|Total|1,613,021|1,557,759|

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9. Secured Convertible Note Payable

On March 1, 2020, the Company entered into a Secured Note Payable for gross proceeds of $US $200,000 (“Secured Loan”). The Secured Loan bears interest of 6%, matures on December 31, 2020 and the principal and interest is convertible into common stock of the Company at a market rate less an allowable discount (“Conversion Price”).

9. Secured Convertible Note Payable (Continued)

The following table reconciles the recorded value of the liability and derivative components of the secured note payable.

	Secured loan payable	Derivative liability	Total
	$	$	$
Balance, July 31, 2019	-	-	-
Additions	122,356	144,764	267,120
Accretion	20,226	-	20,226
Interest	6,731	-	6,731
Foreign exchange	323	588	911
Revaluation of derivative liability	-	(15,607)	(15,607)
Balance, July 31, 2020	149,636	129,745	279,381
Amended terms adjustment	(25,577)	25,577	-
Finance expense	104,513	-	104,513
Foreign exchange	(14,375)	(44,036)	(58,411)
Revaluation of derivative liability	-	(47,404)	(47,404)
Balance, April 30, 2021	214,197	63,882	278,079

For the Secured Loan, the variability of the Conversion Price would result in a variable number of shares on conversion. For the Secured Loan, the conversion does not meet the fixed for fixed requirement because a variable number of shares could be issued. On initial recognition, the derivative liability of $144,764 was recognized, with the residual value of $122,356 allocated to debt. The Company estimated the fair value of equity as $Nil. The Secured Loan are being accreted to the face value of the debt plus interest to maturity. On December 30, 2020, the Company amended the repayment date from December 31, 2020 to June 30, 2021. Pursuant to the amended terms, the derivative liability of $25,577 was additionally recognized, with the residual value of $25,577 being reduced to debt.

10. Lease Liability

The Company has a lease contract for its facility used in the Company’s operations. Lease of the facility is 11 years. The Company utilized a discount rate of 15%.

Set below are the carry amounts of the lease liability recognized and the movements during the period:

	Santa Rosa Lease	Concord Lease	Total
As at August 1, 2019	403,322	-	403,322
Additions	-	1,122,697	1,122,697
Payments	(42,560)	(31,906)	(74,466)
Termination	(369,712)	-	(369,712)
Foreign exchange	7,887	71,274	79,161
Accretion	1,063	2,516	3,579
As at July 31, 2020	-	1,164,581	1,164,581
Payments	-	(139,157)	(139,017)
Foreign exchange	-	(97,221)	(97,221)
Accretion	-	19,297	19,297
Current lease liability	-	193,566	193,566
Non-current lease liability	-	754,074	754,074
As at April 30, 2021	-	947,640	947,640

10. Lease Liability (continued)

During the year ended July 31, 2020, the Santa Rosa lease was terminated.

The following table shows the maturity profile of the Company’s financial liabilities based on contractual undiscounted payments as at April 30, 2021, denominated in USD:

	$
July 31, 2021	38,745
July 31, 2022	159,500
July 31, 2023	167,475
July 31, 2024	175,849
July 31, 2025	184,641
Thereafter	1,171,451
Total	1,897,662

11. Financial Risk Management

Classification of financial instruments

	Financial	Financial assets –	Financial liabilities
As at April30, 2021	assets- FVTPL	amortized costs	–amortized costs
	$	$	$
Cash	2,553,138	-	-
Accounts receivable	-	1,390,727	-
Promissory note receivable	-	1,290,848	-
Loans receivable	-	4,699,735	-
Accounts payable and accrued liabilities	-	-	1,613,021
Derivative liability	63,882	-	-
Lease liability	-	-	947,640
Secured notespayable	-	-	716,818

	Financial assets	Financial assets –	Financial liabilities
As at July 31, 2020	- FVTPL	amortized costs	–amortized costs
	$	$	$
Cash	2,037,795	-	-
Accounts receivable	-	1,039,681	-
Promissory note receivable	-	1,408,427	-
Loans receivable	-	4,699,735	-
Accounts payable and accrued liabilities	-	-	1,557,759
Derivative liability	129,745
Lease liability	-	-	1,164,581
Secured notespayable	-	-	149,636

The carrying values of the Company’s financial instruments carried at amortized cost approximate fair values due to their short duration.

11. Financial Risk Management (Continued)

Financial Risk Management Objectives and Policies

The Company is exposed to various financial risks resulting from both its operations and its investments activities. The Company's management, with the Board of Directors oversight, manages financial risks. Where material, these risks will be reviewed and monitored by the Board of Directors.

Financial Risks

The Company's main financial risk exposure and its financial risk management policies are as follows:

Credit risk

Credit risk is the risk of loss associated with a counter-party’s inability to fulfill its payment obligations. The credit risk is limited to the carrying value amount carried on the statement of financial position. Credit risk associated with accounts receivable, the promissory note receivable and loans receivable arises from the possibility that the principal and/or interest due may become uncollectible. The Company mitigates this risk by managing and monitoring the underlying business relationship. The Company is currently exposed to moderate credit risk associated with its trade receivable.

Market and Other Risks

Market risk is the risk of uncertainty arising primarily from possible commodity market price movements and their impact on the future economic viability of the Company’s projects and ability of the Company to raise capital. These market risks are evaluated by monitoring changes in key economic indicators and market information on an on-going basis and adjusting operating and exploration budgets accordingly.

Liquidity Risk

Liquidity risk is the risk the Company will not be able to meet its financial obligations as they fall due. The Company manages its liquidity needs by carefully monitoring cash outflows due in day-to-day business.

Liquidity needs are monitored in various time bands, including 30-day, 180-day and 360-day lookout periods. As at April 30, 2021, the Company has a working capital of $10,401,396 (July 31, 2020 – $9,000,380) and will require additional financing to meet its short term obligations.

12. Capital Management

The Company considers its capital to be comprised of shareholders’ equity.

The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the Company may attempt to issue new shares. Although the Company has been successful at raising funds in the past through the issuance of capital stock, it is uncertain whether it will continue this method of financing due to the current difficult market conditions.

In order to facilitate management of its capital requirements, the Company prepares expenditure budgets that are updated as necessary depending on various factors, including successful capital deployment and general industry conditions.

There have been no changes to the Company’s approach to capital management during the period.

13. Related Party Transactions and Disclosures

As of April 30, 2021, the amount due to related parties is $5,062 (July 31, 2020 - $2,814). This amount consists of amounts due to a former director of the Company. These amounts were made to provide working capital and are non-interest bearing and without fixed terms of repayment.

		April 30,	April 30,
Relation to Icanic	Type of service	2021	2020
	Management
Former CEO and Director	fees	$ -	$ -
	Legal and
CFO and Director has a minority interest in a firm	professional fees
providing accounting services.		35,000	33,750
CFO and Director has a minority interest in a firm	Consulting fees
providing corporate consulting services		50,250	34,050
Former CFO and Director controls a firm providing	Consulting fees
corporate consulting services			17,100
	Share-based
CEO and Director	compensation	142,811	16,429
		$ 228,061	$ 101,329

14. Share Capital

(i) Authorized capital

The Company's authorized share capital consists of:

an unlimited number of common shares without par value; and
an unlimited number of preferred shares issuable in series. No preferred shares are issued as of April 30, 2021.

(ii) Common shares

For the period ended April 30, 2021:

a) On August 13, 2020, the Company issued 3,710,000 units (each a “Unit”) at a price of $0.25 per Unit for aggregate gross proceeds of $927,500. Each Unit is comprised of one common share in the capital of the Company (a “Share”) and one common share purchase warrant (a “Warrant”). Each Warrant shall be exercisable to acquire one additional Share at a price of $0.31 for a period of two years from the date of issuance. In the event that the Shares trade at a closing price of greater than $0.50 per Share for ten (10) consecutive trading days, the Company may accelerate the expiry date of the Warrants to expire on the 30th day after the date on which such notice is given. The fair value of the warrants was $148,400, using the residual method. The Company paid share issuance cost of $20,000.

b) During the period ended April 30, 2021, the Company issued 4,670,101 common shares upon exercise of warrants for total proceeds of $1,705,438.

c) During the period ended April 30, 2021, the Company issued 600,000 common shares upon exercise of options for total proceeds of $205,000.

d) During the period ended April 30, 2021, the Company issued 183,150 common shares with a fair value of $100,000 to a consultant of the Company for services rendered.

14. Share Capital (Continued)

For the period ended April 30, 2020:

a) On August 14, 2019, the Company issued 150,000 common shares, valued at $76,500 to a consultant of the Company for services rendered.

b) On August 16, 2019, the Company issued 1,250,000 common shares, valued at $625,000 to a consultant of the Company for services rendered.

c) In September 2019, the Company issued 693,594 common shares upon exercise of warrants at $0.375 per share for total proceeds of $260,100.

d) On November 12, 2019, the Company issued 150,000 common shares with a fair value of $30,000 to a consultant of the Company for services rendered.

(ii) Share options

The Company has a share option plan in place under which the Board of Directors may grant options to acquire common shares of the Company to qualified directors, officers, employees and other service

providers. The share options vest according to the provisions of the individual option agreements approved by the directors’ resolutions and have a maximum life of ten years. The plan allows for the issuance of up to 10% of the number of issued and outstanding common shares of the Company at any time on a nondiluted basis.

On March 1, 2021, the Company granted 500,000 stock options to a director at an exercise price of $0.55 per share expiring March 1, 2026 and vests over 30 months, commencing September 1, 2021. The fair value of these 500,000 stock options was determined to be $371,545 using the Black Scholes Option Pricing Model using the assumptions at the time of grant of risk free interest rates of 0.63%, expected life of 5 years, expected volatility of 228%, forfeiture rate of 0% and a dividend rate of 0%. During the period ended April 30, 2021, the Company recognized share-based compensation of $18,773.

On February 9, 2021, the Company granted 100,000 stock options to a consultant at an exercise price of $0.70 per share expiring February 9, 2026 and vested immediately. The fair value of these 100,000 stock options was determined to be $61,291 using the Black Scholes Option Pricing Model using the assumptions at the time of grant of risk free interest rates of 0.39%, expected life of 5 years, expected volatility of 228%, forfeiture rate of 0% and a dividend rate of 0%.

On October 14, 2020, the Company granted 4,869,000 common shares of the Company at an exercise price of $0.35 per share and expiring on October 14, 2025. 3,6199,000 options vest in 30 months, 250,000 options vest in 24 months and 1,000,000 options vested immediately. The fair value of these 4,869,000 stock options was determined to be $1,819,591 using the Black Scholes Option Pricing Model using the assumptions at the time of grant of risk free interest rates of 0.35%, expected life of 5 years, expected volatility of 110%, forfeiture rate of 0% and a dividend rate of 0%. During the period ended April 30, 2021, the Company recognized share-based compensation of $307.018.

14. Share Capital (Continued)

(ii) Share options (continued)

On July 31, 2019, the Company granted 4,100,000 share options to consultants at an exercise price of $0.33 per share expiring July 31, 2024. 1,650,000 options vest in 6 months and 2,450,000 options vest over 4 years. The fair value of these 4,100,000 stock options was determined to be $1,796,211 using the Black Scholes Option Pricing Model using the assumptions at the time of grant of risk free interest rates of 1.47%, expected life of 5 years, expected volatility of 250%, forfeiture rate of 0% and a dividend rate of 0%. During the period ended April 30, 2021, the Company recognized share-based compensation of $213,368.

The issued and outstanding options balance as at April 30, 2021 and July 31, 2020 and 2019 is comprised as follows:

	Number of		Weighted
	Options	Average Price
Balance July 31, 2019 and July 31, 2020	13,200,000	$	0.35
Options granted	5,469,000		0.37
Exercised	(600,000)		0.34
Cancelled	(3,500,000)		0.34
Balance April 30, 2021	14,569,000		0.36

As at April 30, 2021, 9,213,750 options are exercisable with a weighted average price of $0.35 and average life of 3.40 years.

As of April 30, 2021, the Company had share purchase options outstanding and exercisable to acquire common shares of the Company as follows:

Exercise price	Exercise price	Number of options	Number of exercisable options
Expiry date	$	#	#
June 8, 2023	0.40	2,750,000	2,750,000
July 4, 2024	0.33	3,750,000	3,750,000
July 31, 2024	0.33	2,950,000	1,932,500
October 14, 2025	0.35	4,519,000	681,250
February 9, 2026	0.70	100,000	100,000
March 1, 2026	0.55	500,000	-
		14,569,000	9,213,750

(iii) Warrants

The issued and outstanding warrants balance as at April 30, 2021 and July 31, 2020 and 2019 are comprised as follows:

14. Share Capital (Continued)

(iii) Warrants (continued)

	Exercise	Average	Expiry Date	Number of
	Price	Life		Warrants
Balance July 31, 2019	$0.375	0.56		11,712,816
Private placements warrants	$0.310	0.55	July 22, 2022	4,290,000
Warrants exercised	$0.375	-		(693,594)
Balance July 31, 2020	$0.357	1.11		15,309,222
Private placements warrants	$0.310	0.40	August 13, 2022	3,710,000
Warrants exercised	$0.371	-		(4,670,101)
Balance April 30, 2021	$0.344	0.67		14,349,121

As of April 30, 2021, the Company had warrants outstanding and exercisable to acquire common shares of the Company as follows:

	Exercise price	Number of warrants issued and exercisable
Expiry date	$	#
May 7, 2021	0.375	3,694,214
May 13, 2021	0.375	2,335,617
May 14, 2021	0.375	839,290
July 22, 2022	0.31	3,770,000
August 13, 2022	0.31	3,710,000
		14,349,121

(iv) Reserves

Reserves includes accumulated foreign currency translation adjustments and the accumulated fair value of share-based compensation and warrants transferred from share-based payment reserve and warrant reserve upon cancellation or expiry of the share options and warrants.

14. Acquisition of 1200665 B.C. Ltd.

On May 21, 2019, the Company entered into a share exchange agreement (the “BC Definitive Agreement”) among the Company, 1200665 B.C. Ltd., a private British Columbia company (“1200665BC”) and the shareholders of 1200665BC, pursuant to which, the Company will acquire all of the issued and outstanding shares of 1200665BC (‘BC Transaction”). 1200665BC, through its interests in V6E and Sullivan Park, is the owner of a cannabis cultivation business and license and prospective owner of a cannabis manufacturing business and license in the state of Nevada.

In consideration for the BC Transaction and pursuant to the terms of the BC Definitive Agreement, the Company: (a) has issued an aggregate of 30,645,161 common shares of the Company pro rata to shareholders of 1200665BC on the closing of the BC Transaction (the “BC Closing Date”); (b) will pay $5,019,900 in cash, payable within 120 days following the BC Closing Date; and (c) will pay up to an additional $7,480,100 in cash, payable upon 1200665BC completing certain milestones after the BC Closing Date.

The purchase price allocation of 1200665BC’s assets acquired and liabilities assumed is summarized below:

15. Acquisition of 1200665 B.C. Ltd. (Continued)

Purchase price:		Amount
Paid in shares	$	11,645,161
Payable in cash recorded as notes payable		12,500,000
Totalpurchaseprice	$	24,145,161
Assets acquired:
Cash	$	468,669
Accounts receivable		1,301
Investments		2
Property and equipment (note 4)		2,704,188
Loans receivable		2,740,373
Brands and licenses (Note 7)		18,333,221
Liabilities assumed:
Accounts payable and other liabilities		27,641
Loans payable		74,952
Net assets acquired	$	24,145,161

16. Acquisition of Ganja Gold Inc.

On July 31, 2019, the Company entered into a share exchange agreement (the “California Definitive Agreement”) among the Company, Ganja Gold Inc., a California company (“Ganja Gold”) and the shareholders of Ganja Gold, pursuant to which, the Company acquired all of the issued and outstanding shares of Ganja Gold (“California Transaction”). Ganja Gold is a State and municipally licensed cannabis manufacturing business.

In consideration for the California Transaction and pursuant to the terms of the California Definitive Agreement, the Company: (a) issued an aggregate of 40,000,000 common shares of the Company (the “Payment Shares”) pro rata to shareholders of Ganja Gold on the closing of the California Transaction (the “California Closing Date”) (Issued); (b) issued an additional 40,000,000 common shares valued at $17,600,000 upon Ganja Gold completing certain milestones (issued). The Payment Shares are subject to a voluntary hold period of 12 months from the California Closing Date which expires July 31, 2020.

In connection with the California Transaction, the Company issued 3,200,000 common shares to an arm’s length third party finder. The finder shares were subject to a statutory hold period which expired on December 1, 2019.

The purchase price allocation of Ganja Gold’s assets acquired and liabilities assumed is summarized below:

16. Acquisition of Ganja Gold Inc. (Continued)

Purchase price:		Amount
Paid in shares	$	35,200,000
Paid in shares–finder’s fees		1,408,000
Totalpurchaseprice	$	36,608,000
Assets acquired:
Cash	$	449,100
Accounts receivable		537,419
Inventory		454,115
Deposit		131,480
Promissory note		1,447,268
Loans receivable		63,798
Brands and licenses (Note 7)		33,967,724
Liabilities assumed:
Accounts payable and other liabilities		377,164
Loans payable		65,740
Net assets acquired	$	36,608,000

17. Segmented Information

The assets and operations of the Company are located in Canada and the United States. The Company has one reportable business segments in the cannabis sector.

	Canada	USA	TOTAL
Nine months ended
April 30, 2021	$	$	$
Revenues	-	8,507,210	8,507,210
Total expenses	(1,209,733)	(8,447,343)	(9,657,076)
Net income (loss)	(1,209,733)	59,867	(1,149,866)
As at April 30, 2021
Current assets	6,804,999	6,206,942	13,011,941
Total assets	6,804,999	63,338,052	70,143,051
Total liabilities	288,697	3,243,551	3,364,619
As at July 31, 2020
Current assets	5,757,470	5,277,892	11,035,362
Total assets	8,461,660	59,351,879	67,813,539
Total liabilities	339,641	2,687,838	3,027,479

18. Other investments

On August 30, 2019, the Company announced it entered into a term sheet (the “Term Sheet”) to acquire Nevada based CannaAmerican Brands LLC (“CA Brands”).

The term sheet contemplates the Company acquiring all of the issued and outstanding shares of CA Brands for $4,000,000 to be satisfied through the issuance of common shares of the Company at a deemed price of $0.45 per share.

18. Other investments (Continued)

The Term Sheet sets out certain terms and conditions pursuant to which the proposed transaction will be completed. The proposed transaction remains subject to certain closing conditions including, without limitation, (a) the receipt by the Company of all necessary corporate and regulatory approval; (b) customary due diligence; (c) definitive agreements; (d) each party's representations and warranties in the share purchase agreement being true and correct in all aspects, and each party meeting its terms and conditions and completing its covenants and obligations as contained therein; and (e) all of the requisite municipal and State approvals. There can be no guarantees that the proposed transaction will be completed as contemplated at all. The Company may pay a finder’s fee in relation to the proposed transaction in accordance with CSE policies.

The Company has not yet entered into a definitive agreement with CA Brands as at April 30, 2021.

19. Subsequent events

On May 6, 2021, the Company signed a binding Letter of Intent (“LOI”) with Heavenly Sweet (“Heavenly Sweet”), a leading California edibles company to partner with in the Nevada market.

The Company and Heavenly Sweet will form a new entity (“NewCo”), based on the agreed upon terms and conditions, whereby Heavenly Sweet shall retain 75% and ICAN shall retain 25% of all rights, title and interests in NewCo.

On May 7, 2021, the Company completed the acquisition (the “Acquisition”) of THC Engineering, LLC (“THC Engineering”) and THC Engineering Holdings, LLC (“THC Holdings”, and collectively with THC Engineering, “THC”) pursuant to the terms of a share exchange agreement dated April 7, 2021 (the “Share Exchange Agreement”) among the Company, THC and the unitholders of THC (the “THC Unitholders”).

Pursuant to the terms of the Share Exchange Agreement and in consideration for the Acquisition, the Company issued 3,734,208 common shares in the capital of the Company (the “Consideration Shares”) to the Unitholders pro rata in proportion to their holdings of Units at the time of closing (“Closing”).

Further, the Unitholders shall pro rata receive fifteen percent (15%) of net revenue profit derived from the Company licensing solely the intellectual property rights owned by THC throughout North America for a period ending until May 6, 2024. In addition, subject to completion of certain technological milestones, the Company may issue additional common shares in the capital of the Company (the “Technology Shares”) to the Unitholders pro rata in proportion to their holdings of Units at Closing having an aggregate value of USD$2,750,000.

On June 2, 2021, the Company entered into a share exchange agreement dated June 1, 2021 (the “Definitive Agreement”) among the Company, De Krown Enterprises LLC (“De Krown”), and the unitholders of De Krown (the “Unitholders”), pursuant to which the Company will acquire 100% of the issued and outstanding units of membership interest (the “Units”) of De Krown (the “Transaction”).

Subsequent to the period ended April 30, 2021, the Company issued 30,000 common shares for total proceeds of $11,250 pursuant to exercise of warrants and the Company issued 224,050 common shares pursuant to share exchange agreement with THC Engineering.

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Leef Brands Inc. — Interim / Quarterly Report 2021

47135_rns_2021-06-29_7c7530d0-f565-43f1-8f92-d1a8f632a36f.pdf

ICANIC BRANDS COMPANY INC. (FORMERLY INTEGRATED CANNABIS COMPANY, INC.)

NOTICE TO READER

ICANIC BRANDS COMPANY INC. (FORMERLY INTEGRATED CANNABIS COMPANY, INC.) Condensed Interim Consolidated Statements of Financial Position (Expressed in Canadian Dollars) (Unaudited)

ICANIC BRANDS COMPANY INC. (FORMERLY INTEGRATED CANNABIS COMPANY, INC.) Condensed Interim Consolidated Statements of Loss and Comprehensive Loss (Expressed in Canadian Dollars)

ICANIC BRANDS COMPANY INC. (FORMERLY INTEGRATED CANNABIS COMPANY, INC.) Condensed Interim Consolidated Statements of Cash Flows (Expressed in Canadian Dollars) ( Unaudited )

ICANIC BRANDS COMPANY INC. (FORMERLY INTEGRATED CANNABIS COMPANY, INC.) Condensed Interim Consolidated Statement of Equity For the Nine Months Ended April 30, 2021 (Expressed in Canadian Dollars)

1. Nature of Operations

2. Going Concern Assumption

3. Statement of Compliance and Basis of Presentation

Statement of compliance

3. Statement of Compliance and Basis of Presentation (Continued)

Basis of consolidation

Use of Estimates

Critical accounting estimates

Critical accounting judgments

4. Property and Equipment

5. Inventory

6. Loans Receivable

6. Loans Receivable (Continued)

7. Intangible Assets

8. Accounts Payable

9. Secured Convertible Note Payable

9. Secured Convertible Note Payable (Continued)

10. Lease Liability

10. Lease Liability (continued)

11. Financial Risk Management

Classification of financial instruments

11. Financial Risk Management (Continued)

Financial Risk Management Objectives and Policies

Financial Risks

Credit risk

Market and Other Risks

Liquidity Risk

12. Capital Management

13. Related Party Transactions and Disclosures

14. Share Capital

(i) Authorized capital

(ii) Common shares

For the period ended April 30, 2021:

14. Share Capital (Continued)

For the period ended April 30, 2020:

(ii) Share options

14. Share Capital (Continued)

(ii) Share options (continued)

(iii) Warrants

14. Share Capital (Continued)

(iii) Warrants (continued)

(iv) Reserves

14. Acquisition of 1200665 B.C. Ltd.

15. Acquisition of 1200665 B.C. Ltd. (Continued)

16. Acquisition of Ganja Gold Inc.

16. Acquisition of Ganja Gold Inc. (Continued)

17. Segmented Information

18. Other investments

18. Other investments (Continued)

19. Subsequent events

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Leef Brands Inc. Interim / Quarterly Report 2021