Relevium Technologies Inc. — Interim / Quarterly Report 2021

Jan 25, 2021

RELEVIUM TECHNOLOGIES INC.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS THREE-MONTH PERIODS ENDED SEPTEMBER 30, 2020 AND 2019

UNAUDITED - PREPARED BY MANAGEMENT EXPRESSED IN CANADIAN DOLLARS

CONTENTS Interim Condensed Consolidated Financial Statements

Interim Condensed Consolidated Financial Statements
Notice to reader	2
Unaudited Interim Condensed Consolidated Statements of Financial Position	3
Unaudited Interim Condensed Consolidated Statements of Operations
and Comprehensive Loss	4
Unaudited Interim Condensed Consolidated Statements of Cash Flows	5
Unaudited Interim Condensed Consolidated Statements of Changes in Equity	6
Notes to the Unaudited Interim Condensed Consolidated Financial Statements	7-21

RELEVIUM TECHNOLOGIES INC.

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 interim financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor.

The accompanying unaudited 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 interim consolidated financial statements in accordance with standards established by the Canadian Institute of Chartered Accountants for a review of interim financial statements by an entity’s auditor.

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RELEVIUM TECHNOLOGIES INC.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Expressed in Canadian dollars)

(Expressed in Canadian dollars)
As at,	September 30, 2020	June 30, 2020
		(audited)
	$	$
ASSETS
Current Assets
Cash and cash equivalents	103,107	194,919
Cash in trust account (note 7)	15,721,826	-
Short-term investments (note 8)	5,000	5,000
Receivables (note 9)	634,835	380,546
Inventory	80,298	126,189
Deposits and prepaid expenses (note 7)	12,019,043	85,348
Total current assets	28,564,109	792,002
Non-current assets
Property and equipment	8,682	9,847
Intangible assets (note 10)	3,324,802	3,324,802
Goodwill (note 10)	207,815	207,815
TOTAL ASSETS	32,105,408	4,334,466
LIABILITIES
Current liabilities
Bank advances	231,614	237,373
Accounts payable and accrued liabilities	1,449,483	1,390,688
Customer deposits (note 7)	27,811,768	-
Loans payable (note 11)	280,295	303,520
Loan from officer (note 17)	28,802	74,954
Current portion of long-term debt (note 13)	2,195,124	2,195,124
Total current liabilities	31,997,086	4,201,659
Non-current liabilities
Warrant liability (note 14)	77,285	77,285
TOTAL LIABILITIES	32,074,371	4,278,944
SHAREHOLDERS' EQUITY
Share capital (note 13)	14,135,751	14,067,808
Share purchase warrants (note 14)	3,197,570	3,172,766
Equity component of convertible debt (note 14)	99,738	99,738
Subscription receivable (note 14)	-	(210,000)
Contributed surplus	1,418,935	1,418,935
Accumulated Other Comprehensive	(30,067)	(42,392)
Deficit	(18,790,890)	(18,451,333)
TOTAL EQUITY	31,037	55,522
TOTAL LIABILITIES AND EQUITY	32,105,408	4,334,466

Going Concern (note 2), Commitments (note 20) and Subsequent Events (note 21)

Approved on behalf of the Board:

/s/ Aurelio Useche /s/ Andre Godin Director Director

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

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RELEVIUM TECHNOLOGIES INC.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Expressed in Canadian dollars)

(Expressed in Canadian dollars)
For the three-month periods ended,	September 30, 2020	September 30, 2019
	$	$
Sales	333,116	1,017,686
Cost of Sales	139,844	472,351
Gross Profit	193,272	545,335
Expenses
Accreted interest	-	51,070
Administration fees	31,970	82,505
Amortization of assets	1,165	1,165
Change in fair value of warrants (note 14)	-	(153,000)
Consulting fees	61,951	183,167
General and administrative expenses	135,748	307,952
Interest on long-term debt	50,202	67,995
Loss (gain) on foreign exchange	(23)	316
Professional fees	135,542	52,991
Selling and marketing	116,274	801,520
	532 829	1,395,681
Net loss	(339,557)	(850,346)
Other Comprehensive items
Exchange differences on translation
of foreign operations	12,325	(2,654)
Comprehensive loss	12,325	(2,654)
Net Comprehensive loss	(327,232)	(853,000)
Lossper share - Basic and fully diluted	(0.002)	(0.006)
Weighted average number of
common shares outstanding	205,386,700	144,483,924

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

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RELEVIUM TECHNOLOGIES INC.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in Canadian dollars)

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF (Expressed in Canadian dollars)	CASH FLOWS
For the three-month periods ended,	September 30, 2020	September 30, 2019
	$	$
OPERATING ACTIVITIES
Net loss and comprehensive loss	(339,557)	(850,346)
Items not affecting cash:
Change in fair value of warrants (note 14)	-	(153,000)
Unrealized (gain) loss on foreign exchange	12,325	(2,654)
Amortization of property and equipment	1,165	1,165
	(326,067)	(1,004,835)
Net changes in non-cash working capital items (note 16)	(12,083,298)	306,458
	(12,409,365)	(698,377)
INVESTING ACTIVITIES
Advances to Lifeline Pharma	-	(77,909)
Deposit on acquisition	-	(163,925)
	-	(241,834)
FINANCING ACTIVITIES
Bank advances	(5,759)	-
Customer deposits	27,811,768	-
Issuance of bridge loan	-	200,000
Issuance of shares, net of issue costs (note 13)	92,747	386,683
Issue of long-term debt	-	51,070
Obligation to issue shares and warrants	-	(193,920)
Repayment of loan payable (note 11)	(23,225)	(103,930)
Repayment of loan from Officer (note 17)	(46,152)	-
Subscription receivable (note 14)	210,000	-
	28,039,379	339,903
Net increase (decrease) in cash and cash equivalents	15,630,014	(600,308)
Cash and cash equivalents beginning of period	194,919	875,000
Cash and cash equivalents end ofperiod	15,824,933	274,692
Supplemental information:
Cash and cash equivalents	103,107	274,692
Cash in trust account (note 7)	15,721,826	-
	15,824,933	274,692

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

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RELEVIUM TECHNOLOGIES INC.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

(Expressed in Canadian dollars)

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Expressed in Canadian dollars)
Equity component Foreign Number of Share convertible Subscription Contributed currency shares capital Warrants debt receivable surplus translation (note 13) (note 13) (note 14) (note 12) (note 13) (note 15) Deficit reserve # $ $ $ $ $ $ $	$
Balance - June 30, 2020 202,820,472 14,067,808 3,172,766 99,738 (210,000) 1,418,935(18,451,333)(42,392)	55 522
Net loss for the period - - - - - - (339,557) - Other comprehensive loss - - - - - - - 12,325 Private placement 2,649,916 67,943 24,804 - - - - - Warrants exercised 1,500,000 - - - - - - - Subscription receivable - - - - 210,000 - - -	(339,557) 12,325 92,747 - 210,000
Balance - September 30, 2020 206,970,388 14,135,751 3,197,570 99,738 - 1,418,935(18,790,890)(30,067)	31,037

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

RELEVIUM TECHNOLOGIES INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(Expressed in Canadian dollars)
Equity Obligation component to issue Foreign Number of Share convertible shares and Contributed currency shares capital Warrants debt warrants surplus Deficit translation (note 13) (note 13) (note 14) (note 12) (note 13) (note 15) reserve # $ $ $ $ $ $ $	$
Balance - June 30, 2019 141,265,106 13,373,632 1,521,276 99,738 193,920 1,418,935(11,519,705)(39,488)	5,048,308
Net loss for the period - - - - - (850,346) - Other comprehensive loss - - - - - - (2,654) Private placement 2,000,000 104,000 56,000 (160,000) Shares issue costs 400,000 18,880 2,240 - (33,920) - - - Private placement 3,437,500 182,188 41,250 - - - - - Shares issue costs 343,750 (22,000) 4,125- - - - -	(850,346) (2,654) - (12,800) 223,438 (17,875)
Balance - September 30, 2019 147,446,356 13,656,700 1,624,891 99,738 - 1,418,935(12,370,051)(42,142)	4,388,071

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

RELEVIUM TECHNOLOGIES INC. Notes to interim condensed consolidated financial statements As at September 30, 2020 and 2019 UNAUDITED - PREPARED BY MANAGEMENT IN CANADIAN DOLLARS

1. General information and nature of operations

Relevium Technologies Inc. (the "Company"), was incorporated under the Canada Business Corporations Act on July 19, 2012, is a publicly traded company currently trading under ticker symbol "RLV" on the TSX Venture Exchange and "6BX" on the Open Market Segment of the Frankfurt Stock Exchange.

The address of the Company's registered head office is 1000 Sherbrooke St. West, Suite 2700, Montreal, Quebec, Canada.

The principal business of the Company is the identification, evaluation, acquisition and operation of brands and businesses in the health and wellness markets, including medical cannabis.

2. Going concern disclosure and impact of COVID-19

The accompanying interim condensed consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) on the going concern basis, which presumes the Company will continue its operations for the foreseeable future and will be able to realize its assets and discharge its liabilities in the ordinary course of business. The Company has a history of losses, has consumed significant amount of cash resources in the past and has continued to do so in the period ended September 30, 2020.

During the three-month period ended September 30, 2020, the Company incurred a net loss of $339,557 (September 30, 2019 - $850,346) and had negative cash flow from operations of $12,409,365 (September 30, 2019 - $698,377). As at September 30, 2020, the Company had a negative working capital of $3,432,977 (June 30, 2020 - $3,409,657).

Historically, the Company has successfully raised financing through the issuance of debts and common shares. However, the Company expects that cash disbursements over the next 12 months will exceed cash resources and additional funds will be required to finance the operations of the Company. Therefore, as at September 30, 2020, there is a material uncertainty that may cast significant doubt on the Company's ability to continue as a going concern without obtaining additional financial resources.

To date, the Company has financed its cash requirements primarily by issuing shares, warrants and debt instruments. The Company’s ability to continue as a going concern is subject to its ability to raise additional financing, generate cash flows from operations and continued support from existing creditors. These consolidated financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary if the Company is unable to continue as a going concern. Such adjustments could be material.

The recent outbreak of a novel and highly contagious form of coronavirus (“COVID-19”), which the World Health Organization declared to be a pandemic on March 11, 2020, has resulted in numerous deaths, adversely impacted global commercial activity and contributed to significant volatility in certain equity and debt markets. It has created challenges for the entire market.

Recent state of emergency or shutdown declarations by several governments have impacted the Company’s operations for the period ended September 30, 2020, resulting in a decrease in sales as well as earnings. Given the recent developments in the COVID-19 global pandemic, Management is closely monitoring the evolution of this pandemic, As the uncertainty regarding the full extent and duration of the pandemic continues, Management is focussing on a cash conservation plan aimed at ensuring maximum available liquidity and financial flexibility until crisis abates and market conditions stabilize.

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RELEVIUM TECHNOLOGIES INC. Notes to interim condensed consolidated financial statements As at September 30, 2020 and 2019 UNAUDITED - PREPARED BY MANAGEMENT IN CANADIAN DOLLARS

3. Basis of preparation

These interim condensed consolidated financial statements were authorized for issuance on January 25, 2021 by the Board of Directors of the Company.

Statement of Compliance: these unaudited interim condensed consolidated financial statements have been prepared in accordance with International Accounting Standard 34 - Interim Financial Reporting (“IAS 34”) as issued by the International Accounting Standards Board (“IASB”). These consolidated financial statements should be read in conjunction with the Company’s most recently issued Annual Report which includes information necessary or useful to understanding the Company’s business and financial statement presentation. In particular, the Company’s significant accounting policies were presented in the annual consolidated financial statements for the years ended June 30, 2020 and 2019 and have been consistently applied in the preparation of these interim consolidated financial statements. These consolidated financial statements have been prepared on a historical cost basis except for certain financial assets which are recorded at fair value. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting except for cash flow information.

Functional and presentation currency: these consolidated financial statements are presented in Canadian dollars, which is the Company’s functional currency.

Basis of Consolidation: t he consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Ovid Acquisition Corp., Biocannabix Health Corporation, Relevium E-Health Inc. and BGX E-Health LLC. Control is achieved when the Company is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. The subsidiaries are included in the consolidated financial statements from the date the Company gains control until it ceases to control. Intercompany balances and transactions, and unrealized gains and losses arising from intercompany transactions are eliminated in preparing the consolidated financial statements. A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Company loses control over a subsidiary, it derecognizes the related assets (including goodwill), liabilities, non-controlling interest, and other components of equity, while any resultant gain or loss is recognized in profit or loss. Any investment retained is recognized at fair value.

4. Summary of significant accounting policies

Accordingly, the accounting policies adopted by the Company for the Company’s IFRS annual consolidated financial statements will be determined as at June 30, 2021. In the event that accounting policies adopted at June 30, 2021 differ materially from the accounting policies used in the preparation of these financial statements, these financial statements would be restated retrospectively to account for the application of those policies adopted at June 30, 2021.

See the annual consolidated financial statements for the years ended June 30, 2020 and 2019 for a list of accounting policies used by the Company.

5. Summary of accounting estimates and judgements

The preparation of the financial statements in conformity with IFRS requires management to make estimates and judgements that affect the reported amounts of assets, liabilities, and contingent liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Estimates and judgments are continuously evaluated and are based on management’s experience and other factors, including on historical experience and expectations of future events that are believed to be reasonable under the circumstances. Actual results may differ from these estimates and assumptions. The estimates and judgments that, in management’s opinion, have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities are disclosed in the annual audited consolidated financial statements.

See annual consolidated financial statements for the years ended June 30, 2020 and 2019 for a list of accounting estimates and judgements considered significant by management.

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RELEVIUM TECHNOLOGIES INC. Notes to interim condensed consolidated financial statements As at September 30, 2020 and 2019 UNAUDITED - PREPARED BY MANAGEMENT IN CANADIAN DOLLARS

6. Future accounting policies

Information on new standards, amendments and interpretations that are expected to be relevant to these interim condensed consolidated financial statements is provided in the Company’s annual consolidated financial statements for the year ended June 30, 2020. Certain other amendments and interpretations have been issued but had no material impact on the Company’s interim condensed consolidated financial statements ended September 30, 2020.

See annual consolidated financial statements for the years ended June 30, 2020 and 2019 for a list of accounting pronouncements.

7. Cash in trust account

A client of the Company ordered during the period $20 million (USD) for PPE gloves. The funds were deposited in an escrow account in the name of the Company. The Company placed $9 million (USD) with the vendor of these products. The rest remains in the trust account. Details of the transaction are as follows:

	September 30, 2020
	USD$ CAD$
Cash in trust account Deposit to the vendor Deposit from the customer	11,786,360 15,721,826 8,964,864 11,958,232 (20,849,965) (27,811,768)

8. Short-term investments held for trading

The short-term investment is a cashable guaranteed investment certificate with the Company's bank bearing interest at the rate of 0.5% maturing within one year and whose market value approximates cost.

9. Receivables

Receivables are comprised of the following:

	September 30, 2020	June 30, 2020
	$	$
Trade and other receivables (net)	519,389	290,496
Sales tax receivable	115,446	90,050
	634,835	380,546

10. Intangible assets

Intangible assets were comprised of the following balances:

		Amortizable	Non
		Licenses	amortizable	Goodwill
	Brand Trademarks	note (a)	Licenses	note (b) Total
	$ $	$	$	$ $
As at June 30, 2019	901,263 7,502	1,154,267	2,411,837	2,275,061 6,749,930
Additions	- 4,200	-	-	- 4,200
Impairment	- -	(1,154,267)	-	(2,067,246) (3,221,513)
As at June 30, 2020	901,263 11,702	-	2,411,837	207,815 3,532,617
Additions and impairment	- -	-	-	- -
As at September 30, 2020	901,263 11,702	-	2,411,837	207,815 3,532,617

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RELEVIUM TECHNOLOGIES INC. Notes to interim condensed consolidated financial statements As at September 30, 2020 and 2019 UNAUDITED - PREPARED BY MANAGEMENT IN CANADIAN DOLLARS

Note (a) – In January 2019, the Company entered into an agreement with CK Properties to acquire an exclusive licence to use the trademarks, including formulations, Standard Operating Procedures (SOPs) and sampling of patient data for pediatric applications for the Canadian market, with a 13% royalty on gross sales. This licensing agreement is for an initial three-year period and is renewable for two consecutive three-year terms upon reaching certain targets. The acquisition of the license which belongs to the Pediatric Biopharma segment was structured as follows:

• Issuance of 11,733,333 shares valued at fair value for a total value of $880,000 and 5,866,666 warrants that are giving the holders the ability to purchase 5,866,666 shares at $0.15 for a period of one year valued at $76,267 according to the value determined by the black Scholes option pricing model;

• Cash payment of $198,000 (US$150,000).

As of June 30, 2020, the license was not available for use due to delays in getting access to the SOP, formulations, and scientific data. The Company believes that the license will not be ready for use prior to the expiry of the initial license term in January 2022. As at June 30, 2020, the Company does not expect to derive any economic benefits from the license. Therefore, the Company recorded an impairment of 100% of the value of the license ($1,154,267).

Note (b) – Goodwill allocation was to a single cash generating unit (“CGU”), BioGanix E-Health LLC (“BGX”). The recoverable amount of the goodwill was based on value in use, determined by discounting the future cash flows to be generated from the continuing use of the CGU. The carrying amount was determined to be more than the recoverable amount. Therefore, the Company recorded an impairment of $2,067,246 against the goodwill for a net value of $207,815 as at June 30, 2020.

Key assumptions used in the estimate of value in use for the year ended June 30, 2020 were as follows:

Pre-tax Discount Rate	23%
Terminal Growth Rate	2%
Budgeted revenue growth rate (average)	65%
EBITDA margin (average)	1%
Cash flow period	3 years

11. Loan payable

The loan is the balance of a US$350,000 product development and marketing facility issued on June 13, 2019. It bears interest at a rate of 15.22% per annum, repayable in 12 monthly payments of US$31,627, including interest. The loan is repaid automatically from ongoing sales and cash flows from the Company's Amazon account and is secured by the inventory in Amazon fulfillment centers and the Company's Amazon account administered by Amazon Services LLC. As at June 30, 2020 the balance is $103,520 (June 30, 2019 - $458,045). The Company can only use funds from this loan for Amazon marketing campaigns.

The previous balance of loan of US$350,000 product development and marketing facility issued on April 3, 2018 was repaid in full on October 4, 2018. It was bearing interest at a rate of 13.99% per annum, repayable in 9 monthly payments of US$41,191, including interest. On October 4, 2018, the Company contracted a new product development and marketing facility of US$219,000 that was bearing interest at a rate of 15.22% per annum, repayable in 12 monthly payments of US$25,902, including interest. This loan was repaid in full on June 10, 2019.

During the year ended June 30, 2020, the Company entered into a letter of intent to roll its interest in its wholly-owned subsidiary BGX E-Health LLC into Newscope Capital Corporation (“Newscope”). Due to poor economic conditions, the transaction was cancelled. From the potential transaction, the Company received $200,000 in advanced funds from Newscope, which have been captured as a payable to Newscope as at June 30, 2020

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RELEVIUM TECHNOLOGIES INC. Notes to interim condensed consolidated financial statements As at September 30, 2020 and 2019 UNAUDITED - PREPARED BY MANAGEMENT IN CANADIAN DOLLARS

12. Long term debt

	September	30, 2020	June 30,	2020
	$		$
Convertible notes payable bearing interest at the 12-month $US Libor rate
plus 8% (10% if in default) per year, payable monthly, in advance, maturing
December 20, 2020, secured by a general assignment of all of the assets of
the Company. The note holders have a right to convert 85% of the outstanding
capital of $1,176,471 at a strike price of $0.15 per share. The Company may
prepay any portion of the principal amount together with accrued interest
thereon at any time (1).	1,097,562		1,097,562
Convertible notes payable bearing interest at the 12-month $US Libor rate
plus 8% (10% if in default) per year, payable monthly, in advance, maturing
December 20, 2020, secured by a general assignment of all of the assets of
the Company. The note holders have a right to convert 85% of the outstanding
capital of $1,176,471 at a strike price of $0.15 per share. The Company may
prepay any portion of the principal amount together with accrued interest
thereon at any time (2).	1,097,562		1,097,562
Total obligations	2,195,124		2,195,124
Less due within one period	(2,195,124)		(2,195,124)
		-		-

• (1) On December 20, 2018, the bridge loan was converted into convertible notes in the aggregate principal amount of $1,176,471, which includes a discount of $176,471 and $1,000,000 of which would be convertible into shares of the Company at $0.15 per share. On initial recognition, the convertible notes of $1,000,000 were broken down into the following financial components: a financial liability of $950,131 and an equity instrument of $49,869. In addition, 4,500,000 cashless warrants exercisable at $0.15 per warrant were issued to the lenders. On June 26, 2019, the exercise price of these warrants was changed to $0.12. On February 1, 2020, the exercise price of these warrants was changed to $0.05 (note 14).

• (2) On December 20, 2018, the Company issued convertible notes in the aggregate principal amount of $1,176,471, which includes a discount of $176,471 and $1,000,000 of which would be convertible into shares of the Company at $0.15 per share. On initial recognition, the convertible notes of $1,000,000 were broken down into the following financial components: a financial liability of $950,131 and an equity instrument of $49,869. In addition, 5,000,000 warrants exercisable at $0.15 per warrant were issued to the lenders. On June 26, 2019, the exercise price of these warrants was changed to $0.12. On February 1, 2020, the exercise price of these warrants was changed to $0.05 (note 14).

On December 18, 2020, the Company signed an agreement with the convertible note holders to extend the term of the repayment of the convertible notes to January 31, 2021, subject to the conditions below:

• All warrants issued to convertible note holders, which have a strike price of $0.05 and were scheduled to expire on December 20, 2020, shall have their expiration date amended to December 20, 2022;

• The company agreed to pay an extension fee of $24,000 to the convertible note holders, which can be paid either in cash or through the issuance of 800,000 common shares of the Company and,

• Interest and monitoring fees for January 2021 must be paid by December 28, 2020

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RELEVIUM TECHNOLOGIES INC. Notes to interim condensed consolidated financial statements As at September 30, 2020 and 2019 UNAUDITED - PREPARED BY MANAGEMENT IN CANADIAN DOLLARS

Covenants

The Company has agreements in place with the convertible note holders, which require the Company to adhere to certain covenants. These agreements, which were amended, require the Company to:

• (1) Have a maximum senior debt-to-equity ratio of 1.25:1;

• (2) Generate revenues of at least $900,000 per quarter; and

• (3) Generate minimum EBITDA of $100,000 per fiscal year and positive EBITDA per quarter for the BGX E-Health subsidiary of the Company.

During and as at September 30, 2020, the Company was in default at times with respect to all three covenants.

13. Share capital

Authorized - an unlimited number of common shares and an unlimited number of preferred shares without nominal or par values

Authorized - an unlimited number of values	common shares and an unlimited number of	preferred shares without nominal or par
Issued	September 30, 2020 # $	June 30, 2020
		# $
Common shares	206,970,388 14,135,751	202,820,472 14,067,808

Capital stock transactions are summarized as follows for the three-month period ended September 30, 2020:

• On July 9, 2020, the Company completed a private placement (third tranche) that was originally announced on May 25, 2020. The Company issued 2,049,916 units of the Company at a price of $0.035 per unit and 600,000 common shares at a price of $0.035 per share, for gross proceeds of $92,747 to the Company. Each unit consists of one common share of the Company and one share purchase warrant entitling the holder thereof to purchase one common share at a price of $0.05 for the next 2 years. No finder’s fees were paid.

• On September 18, 2020, the convertible note holders elected to complete a cashless exercise of 4,500,000 warrants, with the warrant price to be deducted from the common shares issuable upon such exercise. The number of common shares received upon such cashless exercise was equal to 1,500,000 based on the closing price of $0.075 and $0.05 warrant price

Capital stock transactions are summarized as follows for the year ended June 30, 2020:

The Company issued a total of 61,555,366 shares pursuant to the following:

• On July 9, 2019, the Company completed a private placement and issued an aggregate amount of 2,000,000 units of the Company at a price of $0.08 per unit, for gross proceeds of $160,000 to the Company. Each unit consists of one common share of the Company and one share purchase warrant entitling the holder thereof to purchase one common share at a price of $0.12 until July 9, 2020. The Company had received these funds prior to the previous year-end of June 30, 2019 and recognized this as an obligation to issue shares in the prior fiscal year.

• On July 9, 2019, as part of the private placement, the Company issued 400,000 common shares and 400,000 share purchase warrants as finder’s fees, entitling the holder thereof to purchase one common share at a price of $0.12 until July 9, 2020. An amount of $12,800 was also paid as issue cost.

• On September 6, 2019, the Company completed a private placement and issued an aggregate amount of 3,437,500 units of the Company at a price of $0.065 per unit, for gross proceeds of $223,437 to the Company. Each unit consists of one common share of the Company and one share purchase warrant entitling the holder thereof to purchase one common share at a price of $0.12 until September 6, 2020;

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RELEVIUM TECHNOLOGIES INC. Notes to interim condensed consolidated financial statements As at September 30, 2020 and 2019 UNAUDITED - PREPARED BY MANAGEMENT IN CANADIAN DOLLARS

• On September 6, 2019, as part of the private placement, the Company issued 343,750 common shares as finders fees.

• On April 6, 2020, the Company issued 1,137,823 shares on exercise of warrants to settle $56,891 of interest expense due.

• On April 13, 2020, the Company issued 557,270 shares on exercise of warrants to settle $27,864 of interest expense due.

• On April 23, 2020, 784,829 shares were issued in exchange for professional and general and administrative fees of $39,241.

• On May 27, 2020, the Company completed a private placement (first tranche) and issued an aggregate amount of 46,894,194 units of the Company at a price of $0.035 per unit, for gross proceeds of $1,641,297 to the Company. Each unit consists of one common share of the Company and one share purchase warrant entitling the holder thereof to purchase one common share at a price of $0.05 until May 27, 2022. An amount of $25,584 was paid in cash and 730,980 broker warrants were issued as finder’s fees. Each broker share purchase warrant entitling the holder thereof to purchase one common share at a price of $0.05 until May 27, 2021.

• On June 19, 2020, the Company completed a private placement (second tranche) and issued an aggregate amount of 6,000,000 units of the Company at a price of $0.035 per unit, for gross proceeds of $210,000 to the Company. Each unit consists of one common share of the Company and one share purchase warrant entitling the holder thereof to purchase one common share at a price of $0.05 until May 27, 2022. As of June 30, 2020, the Company had not received the proceeds of $210,000 from the subscriber. As a result, the Company has recorded a subscription receivable of $210,000

14. Share purchase warrants

Share purchase warrants outstanding and exercisable as at September 30, 2020 are summarized as follows :

Share purchase warrants outstanding and exercisabl	e as at September 30, 2020 are su	mmarized as follows:
		Weighted average
	Warrants	exercise price
	#	$
Balance - June 30, 2019	37,322,165	0.127
Private placement - July 2019	2,000,000	0.120
Private placement - September 2019	3,437,500	0.120
Issued for agent's fees	400,000	0.120
Private placement - May 2020	46,894,194	0.050
Issued for agent's fees	730,980	0.050
Private placement - June 2020	6,000,000	0.050
Exercised for fees	(1,695,093)	0.050
Warrants expired	(1,722,500)	0.113
Warrants expired	(16,849,999)	0.120
Warrants expired	(9,249,666)	0.150
Balance - June 30, 2020	67,267,581	0.056
Warrants expired	(5,837,500)	0.120
Warrants exercised	(4,500,000)	0.050
Privateplacement - July2020	2,049,916	0.050
Balance - September 30, 2020	58,979,997	0.050

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RELEVIUM TECHNOLOGIES INC. Notes to interim condensed consolidated financial statements As at September 30, 2020 and 2019 UNAUDITED - PREPARED BY MANAGEMENT IN CANADIAN DOLLARS

Share purchase warrants transactions are summarized as follows for the three-month period ended September 30, 2020:

• On September 18, 2020, the convertible note holders elected to complete a cashless exercise of 4,500,000 warrants, with the warrant price to be deducted from the common shares issuable upon such exercise. The number of common shares received upon such cashless exercise was equal to 1,500,000 based on the closing price of $0.075 and $0.05 warrant price (note 13).

Share purchase warrants transactions are summarized as follows for the period ended June 30, 2020:

The Company issued a total of 59,806,424 share purchase warrants pursuant to the following:

• On July 9, 2019, the Company issued 2,400,000 share purchase warrants entitling the holder thereof to purchase one common share at a price of $0.12 until July 9, 2020. The fair value of the warrants was determined using the Black Scholes option pricing model with the following assumptions: risk free interest rate at 1.51%, expected volatility at 98.27%, dividend yield at Nil, expected life 1 year and grant date fair value $0.026;

• On September 6, 2019, the Company issued 3,781,250 share purchase warrants entitling the holder thereof to purchase one common share at a price of $0.12 until September 6, 2020. The fair value of the warrants was determined using the Black Scholes option pricing model with the following assumptions: risk free interest rate at 1.51%, expected volatility at 98.27%, dividend yield at Nil, expected life 1 year and grant date fair value $0.026.

• On May 27, 2020, the Company issued 46,894,194 share purchase warrants entitling the holder thereof to purchase one common share at a price of $0.05 until May 27, 2022. The fair value of the warrants was determined using the Black Scholes option pricing model with the following assumptions: risk free interest rate at 0.28%, expected volatility at 100.68%, dividend yield at Nil, expected life 2 years and grant date fair value $0.0189.

• On May 27, 2020, the Company issued 730,980 broker share purchase warrants entitling the holder thereof to purchase one common share at a price of $0.05 until May 27, 2021. The fair value of the warrants was determined using the Black Scholes option pricing model with the following assumptions: risk free interest rate at 0.28%, expected volatility at 94,41%, dividend yield at Nil, expected life 1 year and grant date fair value $0.0118.

• On June 19, 2020, the Company issued 6,000,000 share purchase warrants entitling the holder thereof to purchase one common share at a price of $0.05 until June 19, 2022. The fair value of the warrants was determined using the Black Scholes option pricing model with the following assumptions: risk free interest rate at 0.27%, expected volatility at 99.83%, dividend yield at Nil, expected life 2 years and grant date fair value $0.0119.

Each share purchase warrant entitles the holder to purchase one common share of the Company. The share purchase warrants are summarized as follows:

warrants are summarized as follows:
		Weighted average
	Number outstanding	remaining contractual
Exerciseprice	and exercisable	life(months)	Expiry dates
$0.05	3,304,907	6 months	December 2020
$0.05	730,980	11 months	May 2021
$0.05	46,894,194	23 months	May 2022
$0.05	6,000,000	24 months	June 2022
$0.05	2,049,916	25 months	July2022
	58,979,997

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RELEVIUM TECHNOLOGIES INC. Notes to interim condensed consolidated financial statements As at September 30, 2020 and 2019 UNAUDITED - PREPARED BY MANAGEMENT IN CANADIAN DOLLARS

15. Share-based payments

On November 7, 2012, the Company established an incentive stock option plan (the "Stock Option Plan") which provides that the Board of Directors of the Company may from time to time, in its discretion, grant to directors, officers, employees and consultants of the Company, non-transferable options to purchase common shares.

On December 22, 2017, the Company amended the Stock Option Plan to increase the maximum number of common shares issuable to 6,983,684. These options vest over a period determined by the Board of Directors when granted and expire after a period of up to ten years, provided that the number of common shares reserved for issuance under the Stock Option Plan does not exceed ten percent of the outstanding common shares issued.

The Board of Directors determines the exercise price per common share and the number of common shares that may be allotted to each director, officer, employee and consultant of the Company and all other terms and conditions of the options granted under the Stock Option Plan.

In 2019, the fair value of the 250,000 options granted to consultants, which vested entirely on the date of grant, was estimated using the Black- Scholes option pricing model based on the following weighted average assumptions: risk free interest rate at 2.49%, expected volatility at 109.55%, dividend yield at Nil, expected life 10 years and grant date fair value $0.129.

During the three-month period ended September 30, 2020, there were no options granted to directors and officers. The option activity, under the share option plan and information concerning outstanding and exercisable options is as follows:

	No. of Options	Weighted Average
	Vested	Exercise Price($)
Balance - June 30, 2018	4,812,800	0.1793
Options granted	250,000	0.1500
Options expired	(1,107,800)	0.2033
Balance - June 30, 2019	3,955,000	0.1707
No transactions	-	-
Balance - June 30, 2020	3,955,000	0.1707
No transactions	-	-
Balance - September 30, 2020	3,955,000	0.1707

As at September 30, 2020 stock option issued and outstanding are as follows:

			Weighted average
Options granted	Weighted Average		remaining contractual
and exercisable	Exercise Price($)	Expiry dates	life(months)
180,000	0.10	December 2022	27 months
1,250,000	0.15	September 2025	60 months
2,275,000	0.19	December 2027	87 months
250,000	0.15	October 2028	97 months
3,955,000

Page | 16

RELEVIUM TECHNOLOGIES INC. Notes to interim condensed consolidated financial statements As at September 30, 2020 and 2019

UNAUDITED - PREPARED BY MANAGEMENT IN CANADIAN DOLLARS

16. Statement of cash flows

Changes in non-cash working capital items:

Changes in non-cash working capital items:
	September 30, 2020	June 30, 2020	September 30, 2019
	$	$	$
Receivables	(254,289)	(370,335)	98,066
Inventory	45,891	432,929	67,732
Prepaid expenses	(11,933,695)	36,194	(163,304)
Accounts payable and accrued liabilities	58,795	819,579	303,964
	(12,083,298)	918,367	306,458

17. Related party transactions

The Company’s related parties include the CEO, CFO, directors, corporate secretary, and family members of these parties. Unless otherwise stated, none of the transactions incorporates special terms and conditions and no guarantees were given or received. Outstanding balances are usually settled in cash. All balance of advances receivable and advances payable are measured at fair value and occurred in the normal course of business. Transactions with related parties for the period ended September 30, 2020 were as follows:

ended September 30, 2020 were as follows:
	Three-months ended September 30,
	2020 2019 $ $
Management and directors’ fees Professional fees to corporate secretary Loan with a director and officer	123,805 60,988 9,000 11,165 28,779 -

Amounts payable to related parties included in the non-current liabilities and in the accounts payable and accrued liabilities were as follows:

were as follows:
		Amounts owed to
		Related Parties
	Period	$
Management and directors	September 30, 2020	316,450
	June 30, 2020	176,466
Corporate secretary	September 30, 2020	56,775
	June 30,2020	54,929

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RELEVIUM TECHNOLOGIES INC. Notes to interim condensed consolidated financial statements As at September 30, 2020 and 2019 UNAUDITED - PREPARED BY MANAGEMENT IN CANADIAN DOLLARS

18. Capital disclosure

The Company's objectives when managing capital are:

• to safeguard the Company's ability to continue as a going concern in order to provide returns for shareholders;

• to maintain sufficient cash resources to support its ongoing activities;

• to maintain a flexible capital structure which optimizes the cost of capital at an acceptable level of risk.

In the management of capital, the Company considers the items included in shareholders' equity in the definition of capital.

The Company manages its capital structure and makes adjustments to it in light of economic conditions and the risk characteristics of the underlying assets. The Company, upon the approval of the Board of Directors, will balance its overall capital structure through the issue of new shares, acquiring or disposing of assets, or by undertaking other activities as deemed appropriate under specific circumstances.

As previously reported, given the recent developments in the COVID-19 global pandemic, management has put in place a response plan and is closely monitoring the evolution of this pandemic, including how it may affect the Company, the economy and the general population.

The Company is exposed to the covenant requirements associated with the convertible notes, as disclosed in note 12.

19. Financial instruments and risk management

The Company thoroughly examines the various financial instrument risks to which it is exposed and assesses the impact and likelihood of those risks. These risks may include credit risk, liquidity risk, market risk and interest rate risk.

Fair value

Hierarchy of Fair Value Measurements

IFRS 13 requires disclosure of a three-level hierarchy for fair value measurements based upon transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows:

Level 1: Fair value is based on quoted market prices in active markets for identical assets or liabilities.

Level 2: Fair value is based on observable inputs other than Level 1 prices, such as quoted market prices for similar, but not identical, assets or liabilities in active markets, quoted market prices for identical assets or liabilities in markets that are not active, and other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3: Fair value is based on non-observable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Financial instruments classified within Level 3 of the fair value hierarchy are initially fair valued at their transaction price, which is considered the best estimate of fair value. After initial measurement, the fair value of Level 3 assets and liabilities is determined using valuation models, discounted cash flow methodologies, or similar techniques.

The carrying values of cash and cash equivalents, short-term investments, receivables, advances to Lifeline Pharma, bank advances, accounts payable and accrued liabilities, bridge loan payable and loan payable approximate their fair values due to the immediate or short-term maturity of these financial instruments.

The determination of the fair value of intangible assets and goodwill were calculated using level 3 fair value hierarchy. The determination of the contingent consideration payable and the convertible notes payable was calculated using level 2 fair value hierarchy.

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RELEVIUM TECHNOLOGIES INC. Notes to interim condensed consolidated financial statements As at September 30, 2020 and 2019 UNAUDITED - PREPARED BY MANAGEMENT IN CANADIAN DOLLARS

Credit risk

The Company is exposed to credit risk through its cash and cash equivalents and trade and other receivables. Credit risk results from the possibility that a loss may occur from the failure of another party to perform according to the terms of a contract.

Cash and cash equivalents are maintained with a high-quality financial institution. As the Company's cash is held by a single Canadian bank, there is a concentration of credit risk. The carrying amount of cash and cash equivalents represents the Company's maximum credit exposure. Trade and other receivables are all current and are recouped within the credit term allowed from the sale.

Interest rate risk

Interest rate risk is the risk that the value of a financial instrument might be adversely affected by a change in the interest rates. Changes in market interest rates may have an effect on the cash flows associated with some financial assets and liabilities, known as cash flow risk, and on the fair value of other financial assets or liabilities, known as price risk. The Company's exposure to the risk of changes in market interest rates relates primarily to the Company’s long-term debt obligations with floating interest rates, which were $Nil at September 30, 2020 (June 30, 2020 – $Nil).

Interest rate sensitivity

The following table demonstrates the sensitivity to a possible change in interest rates on its debts. With all other variables held constant, the Company’s loss before tax is affected through the impact on floating rate borrowings, as follows:

			Increase/	Effect on loss
			decrease	before tax
			%	$
September	30,	2020	1%	25,042
June	30,	2020	1%	25,736

Currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

Carrying amounts in the Company's consolidated financial statements are based upon best estimates of amounts ultimately realizable after conversion to Canadian funds. As at September 30, 2020, assets and liabilities in foreign currencies are approximately as follows:

approximately as follows:
	September 30, 2020	June 30,	2020
(US Dollars)	$	$
Cash and cash equivalents	41,964	15,144
Cash in trust account	11,786,360		-
Deposits and prepaid expenses	8,964,864		-
Accounts payable and accrued liabilities	431,529	314,438
Customer deposits	20,849,965		-

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RELEVIUM TECHNOLOGIES INC. Notes to interim condensed consolidated financial statements As at September 30, 2020 and 2019 UNAUDITED - PREPARED BY MANAGEMENT IN CANADIAN DOLLARS

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 ability to continue as a going concern is dependent on management's ability to raise required funding through future equity issuances. The Company manages its liquidity risk by continuously forecasting cash flows from operations and anticipating any investing and financing activities. Management and the Board of Directors are actively involved in the review, planning and approval of significant expenditures and commitments. Undiscounted cash flows, including capital and interest related to the Company's liabilities expire as follows:

to the Company's liabilities expire as	follows:
		Maturing	Maturing
	Carrying	in less than	in 1 to 3	September 30, 2020
	amount	12 months	years	Total
	$	$	$	$
Cash and cash equivalents	103,107	103,107	-	103,107
Cash in trust account	15,721,826	15,721,826	-	15,721,826
Short-term investments	5,000	5,000	-	5,000
Receivables	634,835	634,835	-	634,835
Bank advances	231,614	231,614	-	231,614
Accounts payable and accruals	1,449,483	1,449,483	-	1,449,483
Customer deposits	27,811,768	27,811,768	-	27,811,768
Loans payable	280,295	280,295	-	280,295
Loan from officer	28,802	28,802	-	28,802
Long-term debt	2,195,124	2,195,124	-	2,195,124
	48,461,854	48,461,854	-	48,461,854

20. Contingencies and commitments

Contingencies

In the ordinary course of business activities, the Company may be contingently liable for litigation and claims with customers, suppliers, location owners and former employees. Management has accrued for these contingent liabilities where an amount can be reasonable estimated:

• On April 8, 2019, the Company entered into an agreement with CK properties to acquire an exclusive licence to use the trademarks with a Royalty to be paid of 13% of Gross Sales. Per Note 10, this license was fully written off due to impairment, however the Company would be liable for royalty payments if the license were to be used in the future.

• On June 4, 2019, the Company signed a letter of intent with Weedsense Inc.(“Weedsense”) for the purchase of up to a 30% interest of Weedsense. A share purchase and sale agreement were later signed on October 16, 2019. Due to poor economic conditions, the Company no longer pursued the transaction and did not meet the obligations outlined in the share purchase agreement. On April 17, 2020, Weedsense claimed per a demand letter to the Company requesting payment in the amount of $809,326 and $500,000 in shares of the Company. The Company responded by preparing, but not filing, a judicial application originating a proceeding for declaratory judgement before the Superior Court seeking, inter alia, the cancellation of the share purchase agreement. Since these filings, no further action has been taken by either party. Due to the claim being in early stages and lack of any progress, management cannot reasonably determine the probable outcome and no reliable estimate of any contingent payments can be made relating to this claim.

Commitments

There are no commitments as at September 30, 2020.

Page | 20

RELEVIUM TECHNOLOGIES INC. Notes to interim condensed consolidated financial statements As at September 30, 2020 and 2019 UNAUDITED - PREPARED BY MANAGEMENT IN CANADIAN DOLLARS

21. Subsequent events

• On December 18, 2020, the Company signed an agreement with the convertible note holders (note 13) to extend the term of the repayment of the convertible notes. On December 20, 2020, the Company was due to repay convertible notes in the amount of $2,352,941. As per the agreement among the Company and all convertible note holders, the maturity date of these convertible notes has been extended to January 31, 2021, subject to the conditions below:

• All warrants issued to convertible note holders, which have a strike price of $0.05 and were scheduled to expire on December 20, 2020, shall have their expiration date amended to December 20, 2022;

• The Company agreed to pay an extension fee of $24,000 to the convertible note holders, which can be paid either in cash or through the issuance of 800,000 common shares of the Company; and

• Interest and monitoring fees for January 2021 must be paid by December 28, 2020.

The Company opted to pay the above extension fee in shares. In addition, the Company may at its option extend the maturity date of the convertible notes up to three times for an additional 30 days each by paying an additional extension fee equal to 2% of the principal balance of the convertible notes for each extension.

Page | 21