Ultra Brands Ltd. — Annual Report 2020

Apr 30, 2021

NHS INDUSTRIES LTD.

CONSOLIDATED FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 2020

(Expressed in Canadian dollars)

	Index
		Page
Independent Auditor’s Report		1 - 2
Consolidated Statements of Financial Position		3
Consolidated Statements of Operations and Comprehensive Operations		4
Consolidated Statements of Changes in Shareholders’ Equity		5
Consolidated Statements of Cash Flows		6
Notes to the Consolidated Financial Statements		7 - 18

SAM S. MAH INC. Chartered Professional Accountant UNIT 114B 8988 FRASERTON COURT BURNABY, BC, V5J 5H8

T: 604-617-8858

F: 604-239-0866

INDEPENDENT AUDITOR’S REPORT

To: the Shareholders of NHS Industries Ltd.

Opinion

I have audited the consolidated financial statements of NHS Industries Ltd. and its subsidiaries (the “Company”), which comprise the consolidated statement of financial position as at December 31, 2020, and the consolidated statement of loss and comprehensive loss, consolidated statement of cash flows and consolidated statement of changes in equity for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In my opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as at December 31, 2020, and its consolidated financial performance and its cash flow for the year then ended in accordance with International Financial Reporting Standards (IFRSs).

Basis for Opinion

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

Material Uncertainty Related to Going Concern

I draw attention to Note 1 in the consolidated financial statements, which indicates that the Company incurred a net loss of $46,824 during the year ended December 31, 2020 and, as of that date, the Company had not yet achieved profitable operations, had accumulated losses of $554,897 since its inception, and expects to incur further losses in the development of its business. As stated in Note 1, these events or conditions, along with other matters as set forth in Note 1, indicate that a material uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern. My opinion is not modified in respect of this matter.

Other Information

Management is responsible for the other information. The other information comprises the Management Discussion and Analysis.

My opinion on the consolidated financial statements does not cover the other information and I do not express any form of assurance conclusion thereon.

In connection with my audit of the consolidated financial statements, my responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or my knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work I have performed, I conclude that there is a material misstatement of this other information, I am required to report that fact. I have nothing to report in this regard.

Other Matter

The consolidated financial statements of the Company for the year ended December 31, 2019, were audited by another auditor who expressed an unmodified opinion on those consolidated statements on June 9, 2020.

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

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

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

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

1

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

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

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

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

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

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

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

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. I am responsible for the direction, supervision and performance of the group audit. I remain solely responsible for my audit opinion.

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

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

The engagement partner on the audit resulting in this independent auditor’s report is Sam Mah, CPA, CA.

“Sam S. Mah”

Chartered Professional Accountant

Unit# 114B – 8988 Fraserton Court Burnaby, BC, Canada V5J 5H8 April 30, 2021

2

NHS INDUSTRIES LTD. Consolidated Statements of Financial Position

(expressed in Canadian dollars)

NHS INDUSTRIES LTD. Consolidated Statements of Financial Position (expressed inCanadian dollars)
	December 31, 2020 December 31, 2019
Current Cash GST receivable Due from related parties (Note 4) Due from related party(Note 4) Investments(Note 4, Note 6 and Note 10) Property, plant and equipment(Note 3) Total assets	$ 21,894 $ 9,487 16,383 - - 27,500
	38,277 36,987 400,000 400,000 175,001 - 1,291,630 1,343,181
	$ 1,904,908 $1,780,168
Current Accounts payable and accrued liabilities (Note 4) GST payable Due to relates party (Note 4) Security deposit Current portion of mortgage (Note 5) Long term portion of mortgage(Note 5) Long term loan(Note 12) Total liabilities Shareholders’ equity Shares capital (Note 6) Contributed surplus Deficit, per accompanying statement Total shareholders’ equity Total liabilities and shareholders’ equity	$ 166,468 $ 576,996 - 9,195 182,210 149,712 7,000 7,000 22,902 21,951
	378,580 764,854 532,349 555,428 30,246 -
	941,175 1,320,282
	4,431,038 3,596,507 343,686 279,082 (3,810,991) (3,415,703)
	963,733 459,886
	$ 1,904,908 $1,780,168

Nature and continuance of operations (Note 1)

Approved on behalf of the Board on April 30, 2021:

“Robert Nygren” “Anthony Chan”

Director – Robert Nygren Director – Anthony Chan

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

3

NHS INDUSTRIES LTD.

Consolidated Statements of Operations and Comprehensive Operations (expressed in Canadian dollars)

(expressed inCanadian dollars)
	Year	Ended
	December 31,	December 31,
	2020		2019
Revenue
Rent	$ 72,857	$	97,143
Net food service revenue	30		-
Interest	32,009		1,385
Total revenue	104,896		98,528
Expenses
Accretion (Note 12)	2,740		-
Advertising and promotion	1,714		-
Amortization (Note 3)	45,705		26,626
Bank charges	254		134
Consulting fees (Note 4)	87,800		648,700
Director fees (Note 4)	88,000		96,000
Interest on long term loans (Note 4 and Note 5)	57,434		42,315
Professional fees	15,732		21,409
Share based payments (Note 6)	64,604		-
Transfer agent & filing fees	9,993		15,867
Office, utility, property taxes and	17,836		26,005
miscellaneous
Total expenses before other items	391,812		877,056
Other items
Gain on settlement of debts (Note 6)	(360,700)		-
Write down of property and equipment (Note 3)	6,567		-
Write down of investment (Note 10)	399,999		-
Government grant (Note 12)	(12,494)		-
Fair value adjustment to investment(Note 4)	75,000		-
Total expenses	**500,184 **		-
Net loss and comprehensive loss for the year	(395,288)		(778,528)
Net loss per share	$ (0.02)	$	(0.09)
Weighted average number of shares	22,058,611		8,407,024
outstanding

4

NHS INDUSTRIES LTD.

Consolidated Statements of Changes in Shareholders’ Equity (expressed in Canadian dollars)

					Retained
	Number of	Share Capital		Contributed	Earnings	Shareholders’
	Shares	& subscribed		Surplus	(Deficit)	Equity
Balance, December 31, 2018	7,328,933	$	3,362,507	$ 279,082	$ (2,637,175)	$ 1,004,414
Adjustment for spin-out shares	30,967		-	-	-	-
Common shares issued for services	1,300,000		234,000	-	-	234,000
Net loss for theyear	-		-	-	(778,528)	(778,528)
Balance, December 31, 2019	8,659,900		3,596,507	279,082	(3,415,703)	459,886
Common shares issued to settle debts	2,725,000		184,300	-	-	184,300
Common shares issued as an investment	1,250,000		250,000	-	-	250,000
Common shares issued to acquire Plenty-full	11,406,000		400,231	-	-	400,231
Shared based payments	-		-	64,604	-	64,604
Net loss for theyear	-		-	-	(395,288)	(395,288)
Balance, December 31, 2020	24,040,900	$	4,431,038	$343,686	$(3,810,991)	$963,733

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

5

NHS INDUSTRIES LTD.

Consolidated Statements of Cash Flows

(expressed in Canadian dollars)

	NHS INDUSTRIES LTD. Consolidated Statements of Cash Flows (expressed inCanadian dollars)
	Year Ended	December 31, 2020 December 31,2019
	Cash flows from (used in) Operating activities Net loss for the year $ Items not affecting cash: Accretion expense Amortization of tangible assets Accrued interest expense to due to related party Common shares issued for services Fair value adjustment to investment Gain on settlement of debts Government grant Write down of property and equipment Write down on investment Share based payments Changes in non-cash working capital items: Accounts receivable Accounts payable and accrued liabilities and GST payable GST receivable acquired from Plenty-full Accounts payable and accrued liabilities acquired from Plenty-full Net cash used in operating activities Investing activities Cash acquired from Plenty-full Due from related parties Net cash provided by investing activities Financing activities First mortgage Repayment of second mortgage Long term loan Due to related parties Net cash provided by (used in) financing activities Increase (decrease) in cash and cash equivalents during the year Cash and cash equivalents, beginning of the year	(395,288) $ (778,528) 2,740 - 45,705 26,626 33,458 - - 234,000 75,000 - (360,700) - (12,494) - 6,567 - 399,999 - 64,604 -
		(140,409) (517,902) (16,383) (102,000) 125,277 453,680 9,978 - (16,213) -
		(37,750) (166,222)
		5,745 - 27,500 -
		33,245 -
		(22,128) (21,288) - (700,000) 40,000 - (960) 149,712
		16,912 (571,576)
		12,407 (737,798) 9,487 747,285
	Cash and cash equivalents, end of the year $	21,894 $ 9,487
	Interest paid $ Income tax paid $ Non-cash Transactions: Settlement of debts into shares $ Shares issued for services $ Shares issued as an investment $ Long term due from related party receivable $	23,976 $ 42,315 -$ - 545,000$ - -$ 234,000 250,000 $ - - $ 400,000

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

6

NHS Industries Ltd. Notes to the Consolidated Financial Statements For The Year Ended December 31, 2020 (expressed in Canadian dollars)

1. NATURE AND CONTINUANCE OF OPERATIONS

627073 B.C. Ltd. was incorporated on May 4, 2001 under the British Columbia Business Corporations Act and changed its name to “NHS Industries Ltd.” (“NHS” or the “Company”) on September 17, 2010. The Company’s principal business is the provisions of a property rental service and a development of real estate property and facility. On August 13, 2014, the Company completed the amalgamation between 0998955 BC. Ltd., a wholly owned subsidiary of New Age Farm Inc. (“New Age”), and has since become a wholly owned subsidiary of New Age. New Age had issued 6,882,885 of its common shares to the shareholders of the Company to complete the amalgamation.

On August 31, 2016, the Company entered into an arrangement agreement with New Age in which New Age has spun-off NHS, together with all its assets and liabilities, as a separate operating entity and NHS would operate the Company’s Langley property located in Langley, British Columbia (the “Arrangement”). In return, following completion of the Arrangement, shareholders of New Age would hold one new share (each, a “New Share”, collectively the “New Shares”) in the capital of New Age and its pro–rata share of the post-consolidation NHS shares (“NHS Shares”) be distributed under the Arrangement for each currently held New Age share. On September 27, 2016, shareholders of New Age approved the Arrangement on its Annual and Special General Meeting of shareholders.The board of directors of New Age also have set the share distribution record date of the plan of Arrangement at close of business on November 30, 2016 (the “Share Distribution Record Date”). Shareholders as of the Share Distribution Record Date would be entitled to receive the New Shares and the NHS Shares. As part of the spin-off process, the Company consolidated its common shares at 5:1 ratio and had 6,899,116 common shares outstanding prior to the spin-off and these shares were to be distributed to shareholders of New Age as of the Share Distribution Record Date. The management of New Age also determined that the Company has separated from New Age on December 31, 2016. The Company completed the re-distribution of the spin-off of NHS Shares in September 2017. The Company completed its listing requirement and commenced trading of its common shares on Canadian Securities Exchange (“CSE”) on April 5, 2018.

The registered address, head office, principal address and records office of the Company are located at Unit 114B – 8988 Fraserton Court, Burnaby, BC V5J 5H8.

At December 31, 2020, the Company had working capital (deficit) of ($340,303) (December 31, 2019 – ($727,867)), had not yet achieved profitable operations, has accumulated losses of $3,810,991 since its inception and expects to incur further losses in the development of its business, all of which casts significant doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to conduct its planned business, meet its on-going levels of corporate overhead and discharge its liabilities as they come due. These consolidated financial statements have been prepared on a going concern basis which assumes that the Company will be able to realize its assets and discharge liabilities in the normal course of business. Although the Company presently has sufficient financial resources to undertake its currently planned business and has been successful in the past in obtaining financing, there is no assurance that it will be able to obtain adequate financing in the future or that such financing will be on terms advantageous to the Company. Accordingly, it does not give effect to adjustments, if any, that would be necessary should the Company be unable to continue as a going concern and, therefore, be required to realize its assets and liquidate its liabilities in other than the normal course of business and at amounts which may differ from those shown in these consolidated financial statements.

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

7

NHS Industries Ltd. Notes to the Consolidated Financial Statements For The Year Ended December 31, 2020 (expressed in Canadian dollars)

2. SIGNIFICANT ACCOUNTING POLICIES

(a) Statement of Compliance and Basis of Presentation

These consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and Interpretations issued by the International Financial Reporting Interpretations Committee (“IFRIC”).

These consolidated financial statements have been prepared on the historical cost basis except for certain financial instruments, which are measured at fair value, as explained in the accounting policies set out in the below.

(b) Basis of consolidation

Consolidated financial statements include the assets, liabilities and results of operations of all entities controlled by the Company. Inter-company balances and transactions, including unrealized income and expenses arising from inter-company transactions, are eliminated in preparing the Company’s the consolidated financial statements. Where control of an entity is obtained during a financial year, its results are included in the consolidated statements of comprehensive loss from the date on which control commences. Where control of an entity ceases during a financial year, its results are included for that part of the year during which control exists.

These consolidated financial statements include the accounts of the Company and its subsidiaries as follows:

Name	Country of		Functional
	**incorporation **	Holding	currency
			Canadian
Plenty-full Food Services Corp.	Canada	100.0%	dollar

Plenty-full Food Services Corp. (“Plenty-full”) was acquired effective February 27, 2020. These consolidated financial statements include the financial statements of Plenty-full from the date of acquisition.

(c) Revenue recognition

IFRS 15 and its related amendments supersede IAS 11 Construction Contracts, IAS 18 Revenue and related Interpretations. It applies to all revenue arising from contracts with its customers and became effective for annual periods beginning on or after 1 January 2018. IFRS 15 establishes a five-step model to account for revenue arising from contracts with customers. It requires revenue to be recognized when (or as) control of a good or service transfers to a customer at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. IFRS 15 requires entities to exercise judgement, taking into consideration all of the relevant facts and circumstances when applying each step of the model to contracts with their customers. The standard also specifies the accounting for the incremental costs of obtaining a contract and the costs directly related to fulfilling a contract. In addition, the standard requires enhanced and extensive disclosures about revenue to help investors better understand the nature, amount, timing and uncertainty of revenue and cash flows from contracts with customers.

The Company adopted IFRS 15 since January 1, 2018. The Company undertook an analysis of the impact of the new revenue standard based on a review of the contractual terms with the primary focus being to understand whether the timing and amount of revenue recognized could differ under IFRS 15. Based on the Company’s analysis, there were no changes identified with respect to the timing of revenue recognition in relation to rental revenue charged to the tenant.

Rental revenue includes rent from tenants, incidental income and sale of meal-prep kits. Rental revenue is recognized when rents are due and interest income is recognized when earned and food service revenue is recognized upon delivery of meal-prep kits.

8

NHS Industries Ltd. Notes to the Consolidated Financial Statements For The Year Ended December 31, 2020 (expressed in Canadian dollars)

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

(d) Foreign currency translation

The functional currency of the Company, as determined by management, is the Canadian dollar and this is also the currency in which it presents these financial statements. The Company recognizes transactions in currencies other than the Canadian dollar (foreign currencies) at the rates of exchange prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at the period end exchange rates are recognized in the statement of operation and comprehensive operation. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

(e) Share based Compensation

The Company operates an employee stock option plan. Share based payments to employees are measured at the fair value of the instruments issued and amortized over the relevant vesting periods. Share based payments to non-employees are measured at the fair value of goods or services received or the fair value of the equity instruments issued, if it is determined the fair value of the goods or services cannot be reliably measured, and are recorded at the date the goods or services are received. The fair value of options is determined using a BlackScholes pricing model. The number of shares and options expected to vest is reviewed and adjusted at the end of each reporting period such that the amount recognized for services received as consideration for the equity instruments granted shall be based on the number of equity instruments that eventually vest.

(f) Property, plant and equipment

The Company records property, plant and equipment at cost less accumulated amortization and accumulated impairment losses. It recognizes amortization to write off the cost of assets less their residual values over their useful lives, using the following methods and rates:

useful lives, using the following methods and rates:
Building	-	15 years straight line
Greenhouse	-	35 years straight line
Tenant improvements on greenhouse	-	10 years straight line
Furniture, fixtures and equipment	-	10-20% declining balance
Motor vehicle and tractor	-	30% declining balance

An item of property, plant and equipment is de-recognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on disposal of the asset, determined as the difference between the net disposal proceeds and the carrying amount of the asset, is recognized in profit or loss. Where an item of property, plant and equipment consists of major components with different useful lives, the components are accounted for as separate items of property, plant and equipment. Expenditures incurred to replace a component of an item of property, plant and equipment that is accounted for separately, including major inspection and overhaul expenditures, are capitalized.

(g) Loss per share

The Company calculates basic loss per share by dividing the loss for the year by the weighted average number of common shares outstanding during the year. It calculates diluted loss per share in a similar manner, except that it increases the weighted average number of common shares outstanding, using the treasury stock method, to include common shares potentially issuable from the assumed exercise of stock options and other instruments, if dilutive. In the Company’s case, these potential issuances are “anti-dilutive” as they would decrease the loss per share; consequently, the amounts calculated for basic and diluted loss per share are the same.

(h) Income taxes

Income tax expense comprises current and deferred tax. Income tax is recognized in profit or loss except to the extent that it relates to items recognized directly in equity. Current tax expense is the expected tax payable on taxable income for the year, using tax rates enacted or substantively enacted at period end, adjusted for amendments to tax payable with regards to previous years.

9

NHS Industries Ltd. Notes to the Consolidated Financial Statements For The Year Ended December 31, 2020 (expressed in Canadian dollars)

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

(h)

Income taxes (continued)

Deferred tax is recorded using the liability method, providing for temporary differences, between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Temporary differences are not provided for relating to goodwill not deductible for tax purposes, the initial recognition of assets or liabilities that affects neither accounting nor taxable loss, and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the end of the reporting period. A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the asset can be utilized.

(i) Impairment of long-lived assets

At the end of each reporting period, the Company reviews the carrying amounts of its property, plant and equipment to determine whether any indication exists that any of those assets have suffered an impairment loss. If any such indication exists, it estimates the asset’s recoverable amount to determine the extent of the impairment loss (if any). Where it is not possible to estimate an individual asset’s recoverable amount, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. Where it can identify a reasonable and consistent basis of allocation, it also allocates corporate assets to individual cash-generating units, or otherwise allocates them to the smallest group of cash-generating units for which it can identify a reasonable and consistent allocation basis.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the Company discounts estimated future cash flows to their present value using a pre-tax discount rate. This rate reflects current market assessments of the time value of money and also reflects the risks specific to the asset (unless these risks are reflected in the estimates of future cash flows).

If the Company estimates an asset or cash-generating unit’s recoverable amount to be less than its carrying amount, it reduces the carrying amount to the recoverable amount, recognizing an impairment loss immediately in profit or loss. Where an impairment loss subsequently reverses, the Company increases the asset or unit’s carrying amount to the revised estimate of its recoverable amount, without exceeding the carrying amount that would have been existed if no impairment loss had been recognized in prior years. It recognizes a reversal of an impairment loss immediately in profit or loss.

(j) Financial Instruments

Effective January 1, 2018, the Company has adopted IFRS 9 Financial Instruments (“IFRS 9”) which replaced IAS 39 Financial Instruments and elected to use the exemption to not restate comparative information for prior periods. Prior periods were not restated and no material changes resulted from adopting this new standard. IFRS 9 introduced a revised model for classification and measurement, and there were no quantitative impacts from adoption on the Company’s financial statements.

As a result of the adoption of IFRS 9, The Company’s accounting policy for financial instruments under IFRS 9 has been updated as follows:

Financial instruments are measured on initial recognition at fair value, plus, in the case of financial instruments other than those classified at FVTPL, directly attributable transaction costs. Measurement of financial assets in subsequent periods depends on whether the financial instrument has been classified and measured at:

(i) amortized cost; (ii) fair value through other comprehensive income (“FVOCI”); or (iii) fair value through profit or loss (“FVTPL). All financial assets not classified and measured at amortized cost or FVOCI are measured at FVTPL. On initial recognition of an equity instrument that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment’s fair value in OCI. The classification determines the method by which financial assets are carried on the balance sheet subsequent to inception and how changes in value are recorded. Cash and cash equivalents and investments are measured at FVTPL with subsequent impairments recognized in the statements of operations and comprehensive loss while accounts

10

NHS Industries Ltd. Notes to the Consolidated Financial Statements For The Year Ended December 31, 2020 (expressed in Canadian dollars)

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

(j) Financial Instruments (continued)

receivable and due from related party are measured at amortized cost. Financial liabilities are designated as either: (i) fair value through profit or loss; or (ii) other financial liabilities. Financial liabilities, other than financial liabilities classified as FVTPL, are measured in subsequent periods at amortized cost using the effective interest method. Accounts payable and accrued liabilities, due to related party and long‐term loan and mortgage are classified as other financial liabilities and carried on the balance sheet at amortized cost.

- Impairment and un collectability of financial assets:

The Company assesses at each reporting date whether there is objective evidence that a financial asset or a group of financial assets is impaired. A financial asset is considered impaired if objective evidence that can be estimated reliably indicates that one or more events have had a negative effect on the estimated future cash flows of that asset. If a financial asset measured at amortized cost is impaired, an amount equal to the difference between its carrying value and the present value of the estimated future cash flows discounted at the original effective interest rate is recognized as an impairment loss in the consolidated statement of operations. If it has been determined that the impairment has reversed, the carrying amount of the asset is increased to its recoverable amount to a maximum of the carrying amount that would have been determined had no impairment charge been recognized in prior periods. Reversals of impairment charges are recognized in the consolidated statements of operations and comprehensive loss in the period in which they occur.

Under IFRS 9, the Company’s financial instruments are classified and subsequently measured as follows: cash and cash equivalents and investments are valued at FVTPL, accounts receivable, due from related parties, accounts payable and accrued liabilities, due to related party, securities deposit, long term loan and mortgages payable are valued at amortized cost.

(k) Significant accounting judgments and estimates

The preparation of financial statements in conformity with IFRS requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported revenues and expenses during the year. Although management uses historical experience and its best knowledge of the amount, events or actions to form the basis for judgments and estimates, actual results may differ from these estimates.

The most significant accounts that require estimates as the basis for determining the stated amounts include the amortization of plant, property and equipment, valuation of share-based payments and recognition of deferred income tax amounts.

Critical judgments and estimates exercised in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements are as follows:

Determination of functional currency

The Company determines the functional currency through an analysis of several indicators such as expenses and cash flow, financing activities, retention of operating cash flows, and frequency of transactions with the reporting entity.

Income taxes

In assessing the probability of realizing income tax assets, management makes estimates related to expectations of future taxable income, applicable tax opportunities, expected timing of reversals of existing temporary differences and the likelihood that tax positions taken will be sustained upon examination by applicable tax authorities. In making its assessments, management gives additional weight to positive and negative evidence that can be objectively verified.

Valuation of share-based payments

The Company uses the Black-Scholes Option Pricing Model for valuation of share-based payments. Option pricing models require the input of subjective assumptions including expected price volatility, interest rate, and forfeiture rate. Changes in the input assumptions can materially affect the fair value estimate and the Company’s earnings and equity reserves.

11

NHS Industries Ltd. Notes to the Consolidated Financial Statements For The Year Ended December 31, 2020 (expressed in Canadian dollars)

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

(l) Adoption of new accounting standards

IFRS 16 ‐ Leases

IFRS 16 provides a single lessee accounting model, requiring lessees to recognize assets and liabilities for all leases unless the lease term is 12 months or less or the underlying asset has a low value. Lessors continue to classify leases as operating or finance. The standard is effective for annual periods beginning on or after January 1, 2019.

The Company charged rental income to its tenant on a month by month basis without any long term leases. The Company also does not identify any other lease that is applicable under the IFRS 16. Therefore, the Company does not have any financial impact from the adoption of this new standard.

3. PROPERTY, PLANT AND EQUIPMENT

Land $ Building Greenhouse Furniture, fixture and equipment Motor vehicle Impairment - Equipment Impairment – Motor vehicle $		December 31, 2020	Net Carrying Amount 900,000 $ 21,379 367,042 4,455 5,322 1,298,198 (1,246) (5,322) 1,291,630 $	December 31, 2019
	Cost 900,000 $ 213,800 499,216 22,589 38,476 1,674,081 (10,627) (38,476) 1,624,978 $	Accumulated Amortization - $ 192,421 132,174 18,134 33,154 375,883 (9,381) (33,154) 333,348 $		Net Carrying Amount
				900,000 35,632 395,633 4,313 7,603
				1,343,181
				- -
				1,343,181

During the year ended December 31, 2019, the Company acquired a total of tenant’s improvement to the greenhouse in the amount of $200,590 incurred by the current tenant and offset against the accounts receivable from the tenant. During the year ended December 31, 2020, the Company wrote off certain equipment and motor vehicle considered as impaired.

4. DUE TO/FROM RELATED PARTY AND RELATED PARTY TRANSACTIONS

For management compensation information for the year ended December 31, 2020, please refers to below:

December 31 2019		Consulting Fees		Director Fees	Share compensation		Total Management Compensation
Carman Parente,CEO and director	180,000 $		$	24,000	234,000 $	438,000 $
AnthonyChan,CFO & Director	90,000 $		$	24,000	- $	114,000 $
David Johnson,Former Director	72,000 $		$	24,000	- $	96,000 $
Lorraine Pike,Former Director	72,000 $		$	24,000	- $	96,000 $
	414,000 $		$	96,000	234,000 $	744,000 $
December 31 2020
Robert Nygren,CEO & Director	15,500 $		$	20,000	19,878 $	55,378 $
AnthonyChan,CFO & Director	27,000 $		$	24,000	19,878 $	70,878 $
MingChiang,CSO & Director	12,000 $		$	20,000	19,878 $	51,878 $
Carman Parente,President and Director	30,000 $		$	24,000	- $	54,000 $
David Johnson,Former Director	- $		$	-	- $	- $
Lorraine Pike,Former Director	- $		$	-	- $	- $
	84,500 $		$	88,000	59,634 $	232,134 $

12

NHS Industries Ltd. Notes to the Consolidated Financial Statements For The Year Ended December 31, 2020 (expressed in Canadian dollars)

4. DUE TO/FROM RELATED PARTY AND RELATED PARTY TRANSACTIONS (continued)

The Company commenced accruing consulting fees and director fees to each of the directors in December 2018. During the year ended December 31, 2020, total consulting fees of $84,500 (2019 - $414,000) and directors fees of $88,000 (2019 - $96,000) have been accrued and recognized. On February 27, 2020, the Company granted a total of 3,000,000 stock options to the CEO, CFO and CSO and recognized share based compensation of $59,634 to these parties.

All related party transactions are in the normal course of operations and have been measured at the agreed to amounts, which is the amount of consideration established and agreed to by the related parties.

During the year ended December 31, 2018, the Company advanced a loan in the amount of $400,000 to a limited partnership managed by a company controlled by the CFO of the Company as a general partner with no beneficial interest. This loan is non-interest bearing, non-secured with no fixed terms of repayment. On December 31, 2019, a company controlled by the CFO assumed this loan from the limited partnership and converted the loan into a secured promissory note payable to the Company maturing on December 31, 2022, with interest payable at an annual rate of 8% and personal guaranteed by the CFO. As at December 31, 2020, interest revenue of $32,000 (2019 - $Nil) has been accrued and received by the Company on this note receivable. As at December 31, 2020, loan payable of $182,210 is due to the President and a Director of the Company, a non-secured loan, interest bearing at an annual rate of 10.80%, compound quarterly, with no fixed terms of repayment. During the year ended December 31, 2020, total interest of $33,458 (2019 - $Nil) was charged by this related party which includes catch-up interest for year 2019.

As at December 31, 2020, the amounts owing to related parties are as below:

December 31 2020	Accounts	Accrued liabilities	Accrued liabilities	Loans Receivable
	Payable	Director Fees	Consulting Fees	(Payable)
Robert Nygren,CEO & Director	37,275 $	- $	- $	- $
AnthonyChan,CFO & Director	202 $	- $	- $	- $
MingChiang,CSO & Director	33,600 $	- $	- $	- $
Carman Parente,President and Director	11,050 $	54,000 $	- $	(182,210) $
David Johnson,Former Director	5,200 $	- $	- $	- $
Lorraine Pike,Former Director	5,200 $	- $	- $	- $
A companycontrolled bythe CFO	- $	- $	- $	400,000 $
	92,527 $	54,000 $	- $	217,790 $

During the year ended December 31, 2020, the Company settled toal debts owing to the President and a Director of the Company in the amount of $221,000 by issuing 1,105,000 (pre-conolidated 4,420,000) common shares of the Company at a deemed price of $0.20 (pre-consolidated price of $0.05) per share and recognized gain on debt settlements of $154,700. The Company also settled total debts owing to the CFO and a Director of the Company in the amount of $116,000 by issuing 580,000 (pre-consolidated 2,320,000) common shares of the Company at a deemed price of $0.20 (pre-consolidated price of $0.05) per share and recognized gain on debt settlements of $81,200. In addition, a total amount of debts of $208,000 owing to two former directors of the Company has been assigned to several arms-length parties and these debts have been settled by the Company by issuing 1,040,000 (pre-consolidated 4,160,000) common shares of the Company at deemed price of $0.20 (pre-consolidated price of $0.05) per share and recogized gain on debt settlements of $124,800.

Durig the year ended December 31, 2020, the Company also invested in a limited partnerership with the genreal partner being related by common officers in the amount of $250,000 by issuing 1,250,000 (pre-consolidated 5,000,000) common shares of the Company at a deemed price of $0.20 (pre-consolidated price of $0.05) per share.

5. MORTGAGE / SECOND MORTGAGE

The Company has negotiated a credit facility with the BlueShore Financial (the “BSF”) for a commercial mortgage. The Company renewed the mortgage during 2017 under the same term and monthly payments. The commercial mortgage bears interest at 4.25% per annum until September 1, 2022. The mortgage requires monthly blended payments of $3,842. Payments will be adjusted at a time of term renewal based on the fixed rate of interest in effect and the remaining amortization period. The mortgage is secured by a rental property of the Company and an assignment of rents.

13

NHS Industries Ltd. Notes to the Consolidated Financial Statements For The Year Ended December 31, 2020 (expressed in Canadian dollars)

5. MORTGAGE / SECOND MORTGAGE (continued)

	December 31,2020 December 31,2019
Balance, beginning of the year $ Principal payments made during the year Balance, end of the year Amount payable within one year $	577,379 $ 598,667 (22,128) (21,288)
	555,251 577,379 (22,902) (21,951)
	532,349 $ 555,428

During the year ended December 31, 2016, the Company entered into a second mortgage agreement on its property in Langley, B.C., in the amount of $700,000 from a private lender. The principal amount of the mortgage is $700,000, bears interest at the rate of 10 per cent per year and is due on demand. During the year ended December 31, 2019, the Company repaid the second mortgage principal of $700,000 plus the accrued interest of $70,000 and has fully repaid the second mortgage.

6. SHARE CAPITAL

Authorized: Unlimited common shares without par value

• (a) Shares issued:

In January 2019, the Company issued additional 30,966 (pre-consolidated 123,870) common shares for $Nil as part of the spin-out shares.

In March 2019, the Company issued 1,300,000 (pre-consolidated 5,200,000) common shares at a fair value of $0.18 (pre-consolidated price of $0.045) per common share for services totaling $234,000 as compensation to the CEO of the Company as a result of his personal guarantees offered on the mortgages.

In January 2020, the Company issued a total of 2,725,000 (pre-consolidated 10,900,000) common shares at a deemed price of $0.20 (pre-consolidated price of $0.05) per share to settle total debts of $545,000 and recognized gain on debt settlements of $360,700.

In February 2020, the Company issued 1,250,000 (pre-consolidated 5,000,000) common shares of the Company at a deemed price of $0.20 (pre-consolidated price of $0.05) per share and invested in a limited partnership as the founding limited partner.

In February 2020, the Company acquired 100% ownership of a food serving company, Plenty-full Food Services Corp., from arms-length parties in exchange of 11,406,000 (pre-consolidated 45,624,000) common shares of the Company at total fair value of $400,231.

(b) Stock Options

The Company has adopted an incentive stock option plan (the "Option Plan") dated which provides that the Board of Directors of the Company may from time to time, in its discretion, and in accordance with stock exchanges requirements, grant to directors, officers, employees and consultants to the Company, non-transferable options to purchase common shares. Included in the Option Plan are provisions that provide that the number of common shares reserved for issuance will not exceed 10% of the issued and outstanding common shares of the Company.

During the year ended December 31, 2020, the Company granted incentive stock options to several officers and directors and consultants of the Company to purchase up to an aggregate of 812,500 (pre-consolidated 3,250,000) common shares in the capital stock of the Company on February 27, 2020. These options are exercisable at a price of $0.20 (pre-consolidated price of $0.05) per share, and will expire on February 27, 2025. All options were fully vested at the date of grant. The fair value of these 812,500 (pre-consolidated 3,250,000) stock options was determined to be $64,604 using the Black Scholes option pricing model using the assumptions at the time of grant of risk free interest rates of 1.163%, expected life of 5 years, expected volatility of 257%, forfeiture rate of 0% and a dividend rate of 0%.

As at December 31, 2020, 150,000 (pre-consolidated 600,000) stock options at exercise price of $0.40 (preconsolidated price of $0.10) and 812,500 (pre-consolidated 3,250,000) stock options at exercise price of $0.20 (pre-consolidated price of $0.05) are still outstanding.

14

NHS Industries Ltd. Notes to the Consolidated Financial Statements For The Year Ended December 31, 2020 (expressed in Canadian dollars)

6. SHARE CAPITAL (continued)

• (c) Warrants

Warrants	Warrants
Warrants Outstanding & Exercisable Weighted Average Exercise Price
Balance, December 31, 2019 2,000,000 (pre-consolidated 8,000,000) $0.40 (pre-consolidated price of 0.10) Granted / Expired - -
Balance, December 31, 2020 2,000,000 (pre-consolidated 8,000,000) $0.40 (pre-consolidatedprice of 0.10)
Number ofShares Exercise Price 1,500,000 $0.40 500,000 $0.40 2,000,000 $0.40	Expiry Date July 31, 2022 November 30, 2022

7. CAPITAL DISCLOSURES

The Company's objective when managing capital is to maintain adequate cash resources to support planned activities which include administrative costs and general expenditures. In the management of capital, the Company includes cash, mortgages, due to related parties, due to shareholders and the components of shareholders’ equity. The Board of Directors does not establish quantitative return on capital criteria for management, but rather relies on the expertise of the Company's management to sustain future development of the business.

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. Historically, funding for the Company's plan is primarily managed through the issuance of additional common shares, through its commercial activities and through obtaining financing. There are no assurances that funds will be made available to the Company when required.

In order to carry out the planned development and pay for administrative costs, the Company will spend its existing working capital and expects to raise additional amounts as needed. The Company will continue to assess new business and seek to acquire an interest in additional business if it feels there is sufficient geologic or economic potential and if it has adequate financial resources to do so.

The Company invests all capital that is surplus to its immediate operational needs in short-term, liquid and highly rated financial instruments, such as cash, and all are held in major Canadian financial institutions. Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable.

There were no changes in the Company's approach to capital management during the year ended December 31, 2020 and the year ended December 31, 2019. The Company is not subject to externally imposed capital requirements.

8. FINANCIAL INSTRUMENTS AND RISK FACTORS

(a) Fair values

Fair value estimates of financial instruments are made at a specific point in time, based on relevant information about financial markets and specific financial instruments. As these estimates are subjective in nature, involving uncertainties and matters of significant judgment, they cannot be determined with precision. Changes in assumptions can significantly affect estimated fair values.

The fair value of transactions is classified according to the following hierarchy based on the amount of observable inputs used to value the instrument.

• Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities.

• Level 2 – Inputs are other than quoted prices in Level 1 that are either directly or indirectly observable for the asset or liability.

• Level 3 – Inputs for the asset or liability that are not based on observable market data.

15

NHS Industries Ltd. Notes to the Consolidated Financial Statements For The Year Ended December 31, 2020 (expressed in Canadian dollars)

9. FINANCIAL INSTRUMENTS AND RISK FACTORS (continued)

(a) Fair values (continued)

Assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the placement within the fair value hierarchy level. The company’s cash and cash equivalents have been valued using Level 1 inputs.

The fair value of the Company’s financial instruments has been classified within the fair value hierarchy as at December 31, 2020 as follows:

		Level 1	Level 2		Level 3		Total
Financial Assets
Cash	$	21,894	$ -	$	-	$	21,894
Cash equivalents		-	-		-		-
Investments			-		175,001		175,001
	$	21,894	$-	$	175,001	$	196,895

(b) Credit risk

Credit risk is the loss associated with a counter-party’s inability to fulfil its payment obligations. The Company’s credit risk is attributable to GST receivable from Canadian Federal government and term deposits. The credit risk is minimized by placing cash with major Canadian financial institutions. Management believes that the credit risk concentration with respect to financial instruments above is remote.

(c) Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations when they become due. The Company's exposure to liquidity risk is dependent on raising of funds to meet commitments and sustain operations. The Company controls liquidity risk by management of working capital and cash flows. The Company ensures that sufficient funds are raised from private placements or loans to meet its operating requirements, after taking into account existing cash. The Company’s cash and cash equivalents are held in business accounts which are available on demand for the Company’s business and are not invested in any asset-backed deposits or investments.

As at December 31, 2020, the Company had cash and cash equivalents of $21,894 to settle current liabilities of $378,580. The mortgage of $555,251 is to be due on September 1, 2022 (Note 5). The second mortgage of $700,000 has been repaid in March 2019.

(d) Market risk

Market risk is the risk of loss that may arise from changes in market factors such as interest rates, foreign exchange rates, and commodity and equity prices.

• i) Interest rate risk

• Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. If interest rates decrease, the Company will generate smaller interest revenue. Presently the Company is not at risk of realizing a loss as a result of a decline in the fair value of its financial instruments because of the short-term nature of the investments. The Company is susceptible to interest rate fair value risk on its mortgages, secured note payable and convertible secured debt payable that bear fixed interest rates.

ii) Foreign currency risk

• The Company's functional currency is the Canadian dollar and major expenditures are transacted in Canadian dollars.

16

NHS Industries Ltd. Notes to the Consolidated Financial Statements For The Year Ended December 31, 2020 (expressed in Canadian dollars)

10. ACQUISITION OF PLENTY-FULL

On February 27, 2020, the Company acquired a 100% interest in Plenty-full Food Services Corp. by issuing 11,406,000 (pre-consolidated 45,624,000) common shares of the Company at a fair value of $400,232 with details of fair value of asset and liabilities as below:

value of asset and liabilities as below:
Assets acquired, and liabilities assumed Cash GST receivable Investment in 20% of Nova Foods Equipment Accounts payable & accrued liabilities	$ 5,745 9,978 400,000 722 (16,213)
	$400,232
Purchase price consideration Consideration issued	$400,232

Due to the pandemic resulted from COVID-19, Nova Foods has completely shut down its operation during the year of 2020. As at December 31, 2020, the Company has determined to write down its investment of 20% interest in Nova Foods to a minimal value of $1.

11. INCOME TAX

The income taxes shown in the Statements of Operations differ from the amounts obtained by applying statutory rates to the loss before income taxes due to the following:

Net loss for theyear	2020 27.0% $ (395,288)	2019 27.0% $ (778,528) (210,203) - - 210,203 - 2019 $ 806,549 6,825 5,739 (819,113)
Expected income tax (recovery) Items deductible and not deductible for income tax purposes Current tax attributes recognized Current and prior tax attributes not recognized Details of deferred tax assets are as follows: Non-capital and capital loss carry-forwards Investments Equipment and others Unrecognized deferred tax assets	(106,728) 34,270 43,803 28,655 - 2020 $ 743,518 70,950 14,072 (847,768) -
		-

As at December 31, 2020, the Company had approximately $2,754,000 of non-capital losses available, which begin to expire through to 2040 and may be applied against future taxable income.

At December 31, 2020, the net amount which would give rise to a deferred income tax asset has not been recognized as it is not probable that such benefit will be utilized in the future years.

17

NHS Industries Ltd. Notes to the Consolidated Financial Statements For The Year Ended December 31, 2020 (expressed in Canadian dollars)

12. LONG TEEM LOAN

The Company obtained a CEBA loan in the amount of $40,000 from the Bank of Montreal guaranteed by the Canadian government. This loan is non-interest bearing until December 31, 2022 and repayment of the loan prior to December 31, 2022 will result on loan forgiveness of 25% or $10,000. After January 1, 2023, the loan may be converted into a 3-year term loan at a fixed annual interest rate of 5%.

The CEBA loan was initially fair valued using a discount rate of 15% and was measured at $27,506 with difference of $12,494 being recognized as government grant. The accretion expense of $2,740 was recorded on this CEBA loan during the year ended December 31, 2020.

13. SUBSEQUENT EVENTS

On March 10, 2021, the Company announced that it will be seeking the Canadian Securities Exchange (the “ CSE ”) approval to consolidate all of its issued and outstanding common shares (the “ NHS Shares ”) on the basis of one (1) post-consolidated NHS Share for every four (4) pre-consolidated NHS Shares (the “ Consolidation ”). The proposed Consolidation would result in the number of issued and outstanding NHS Shares being reduced from the current outstanding 96,163,602 NHS Shares to approximately 24,040,900 NHS Shares. The Company has outstanding warrants to purchase 8,000,000 NHS Shares reserved for issuance, equal to 2,000,000 NHS Shares on a post Consolidation basis and also has outstanding incentive stock options to purchase 3,850,000 NHS Shares reserved for issuance, equal to 962,500 NHS Shares on a post Consolidation basis. The Company has completed the Consolidation with effective date on March 11, 2021. As at December 31, 2020, these consolidated financial statements has already reflected the Consolidation as if it has taken place on December 31, 2020.

On March 19, 2021, the Company announced that it has executed an acquisition agreement with Be Good Plant Based Foods Ltd ("Be Good"), pursuant to which the Company will acquire a 100% interest in the plant based foods company in exchange for common shares of NHS Industries Ltd. The Company will issue an aggregate of 22,050,000 common shares to the holders of 100% of Be Good shares, on a pro rata basis, in exchange for their 22,050,000 Be Good common shares.

On April 20, 2021, the Company announced a non-brokered private placement (the " Private Placement ") of 7,000,000 units (the " Units ") at a price of $0.22 per Unit, for gross proceeds of $1,540,000. Each Unit is comprised of one common share and one-half of one share purchase warrant. Each whole warrant will entitle the holder to acquire one additional common share in the capital of the Company at a price of $0.30 per share, for a period of two years from the date the Units are issued.

If during the exercise period of the warrants, but after the resale restrictions on the shares have expired, the Company's shares trade at or above a weighted average trading price of $0.60 per share for 10 consecutive trading days, the Company may accelerate the expiry time of the warrants by giving written notice to warrant holders that the warrants will expire 30 days from the date of providing such notice.

18