Magic Mushroom Stocks

[JohnCM]

Champignon Brands Inc. (Formerly, Nature Leaf Wellness Corp.)

Condensed Interim Financial Statements
(Expressed in Canadian Dollars)

For the three month period ended December 31, 2019

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

The accompanying unaudited interim financial statements of Champignon Brands Inc. have been prepared
by and are the responsibility of management.

These condensed interim financial statements for the three month period ended December 31, 2019 have
not been reviewed or audited by the Company’s independent auditors in accordance with standards
established by the Chartered Professional Accountants of Canada.
Champignon Brands Inc. (Formerly, Nature Leaf Wellness Corp.)

Statement of Financial Position
(Expressed in Canadian Dollars)

The accompanying notes are an integral part of these condensed interim financial statements 3

December 31,
2019
$
September 30,
2019
$

ASSETS

Current assets
Cash 705,385 855,669
GST receivable 12,152 -
Prepaid expenses 3 80,634 153,093
Inventory 4 106,532 33,783
904,703 1,042,545
Non-current assets
Intangible asset 5 114,929 117,929
TOTAL ASSETS 1,019,632 1,160,474

LIABILITIES

Current liabilities
Accounts payable and accrued liabilities 6, 7 60,908 53,263
TOTAL LIABILITIES 60,908 53,263
SHAREHOLDERS’ EQUITY
Share capital 8 1,269,500 1,269,500
Reserve 8 10,434 10,434
Deficit (321,210) (172,723)
TOTAL SHAREHOLDERS’ EQUITY 958,724 1,107,211

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
1,019,632 1,160,474

Nature and continuance of operations (Note 1)
Approved on behalf of the Board:
“Gareth Birdsall” “Matthew Fish”
Gareth Birdsall, Director Matthew Fish, Director
Champignon Brands Inc. (Formerly, Nature Leaf Wellness Corp.)
Statement of Loss and Comprehensive Loss
(Expressed in Canadian Dollars)
The accompanying notes are an integral part of these condensed interim financial statements.
The Company was incorporated on March 26, 2019 and has a September 30 year-end, therefore there are no
comparative period numbers prior to this date.

For the three month period ended,
December 31, 2019
$
Expenses
Advertising and promotion (66,500)
Amortization 5 (3,000)
Consulting fees 7 (37,750)
Design fees (12,940)
Foreign exchange 4,295
Legal fees (22,214)
Office and miscellaneous (3,207)
Net loss and comprehensive loss for the period (148,487)
Loss per share – basic and diluted (0.01)
Weighted average number of common shares outstanding – basic and
diluted 20,521,001

Champignon Brands Inc. (Formerly, Nature Leaf Wellness Corp.)
Statement of Changes in Shareholders’ Equity
(Expressed in Canadian Dollars)
The accompanying notes are an integral part of these condensed interim financial statements.

Share capital
Notes
Number of
shares
#
Amount
$
Reserve
$
Deficit
$
Total
$
Incorporation, March 26, 2019
Incorporation shares 8 1 - - - -
Private placements (net of share issuance costs) 8 17,276,000 1,204,500 - - 1,204,500
Shares issued for services 8 250,000 5,000 - - 5,000
Shares issued for asset acquisition of intangible asset 5, 8 3,000,000 60,000 - - 60,000
Warrants issued 8 - - 10,434 - 10,434
Loss and comprehensive loss for the year - - - (172,723) (172,723)
Balance at September 30, 2019 20,521,001 1,269,500 10,434 (172,723) 1,107,211
Loss and comprehensive loss for the period - - - (148,487) (148,487)
Balance at December 31, 2019 20,521,001 1,269,500 10,434 (321,210) 958,724

Champignon Brands Inc. (Formerly, Nature Leaf Wellness Corp.)

Statement of Cash Flows
(Expressed in Canadian Dollars)
The accompanying notes are an integral part of these condensed interim financial statements
6
For the period ended,
December 31, 2019
$
Operating activities
Net loss for the period (148,487)
Items not affecting operating cash:
Amortization 3,000
Shares issued for services
Changes in non-cash working capital items:
Increase in inventory (77,949)
Increase in accounts receivable (12,152)
Decrease in prepaid expenses 77,659
Increase in accounts payable and accrued liabilities 7,645
Net cash flows used in operating activities (150,284)
Decrease in cash (150,284)
Cash, beginning 855,669
Cash, ending 705,385
Supplemental cash flow disclosure $
Interest paid -
Income taxes paid -

The Company was incorporated on March 26, 2019 and has a September 30 year-end, therefore there are no
comparative period numbers prior to this date.

Champignon Brands Inc. (Formerly, Nature Leaf Wellness Corp.)
Notes to the Condensed Interim Financial Statements
For the period ended December 31, 2019
(Expressed in Canadian Dollars)
7

1. Nature and continuance of operations
Champignon Brands Inc. (Formerly, Nature Leaf Wellness Corp.) (the “Company”) was incorporated on March
26, 2019, under the laws of the province of British Columbia, Canada. The Company is engaged in the business
of formulation and end distribution of a suite of artisanal mushroom infused beverage products, with the
objective of promoting holistic health and wellness through a healthy diet.
On June 7, 2019, the Company
changed its name from Nature Leaf Wellness Corp. to Champignon Brands Inc. The Company’s fiscal yearend is September 30.

The Company’s principal address, records office and registered address are located at Suite 810 – 789 West
Pender Street, Vancouver, BC, V6C 1H2.

These condensed interim financial statements have been prepared on the assumption that the Company will
continue as a going concern, meaning it will continue in operation for the foreseeable future and will be able to
realize assets and discharge liabilities in the ordinary course of operations. The Company is in the development
stage and currently has no sources of cash from operations.

Further funds will be required to successfully
develop the Company’s business and there is no certainty that these funds will be available. As at December
31, 2019 the Company had accumulated losses of $321,210 (September 30, 2019 - $172,723). Different bases
of measurement may be appropriate if the Company is not expected to continue operations for the foreseeable
future.

The Company’s continuation as a going concern is dependent upon its ability to raise equity capital or
borrowings sufficient to meet current and future obligations and ultimately achieve profitable operations. These
factors indicate the existence of a material uncertainty that may cast significant doubt on the Company’s ability
to continue as a going concern.

Management intends to finance operating costs over the next twelve months
with issuance of common shares, loans from directors and companies controlled by directors and or profits
from its business activities.

2. Significant accounting policies
Basis of presentation and statement of compliance
Statement of Compliance
These condensed interim financial statements have been prepared in accordance with International Financial
Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”), and in
accordance with IAS 34 – Interim Financial Reporting. The condensed interim financial statements do not
include all the information required for annual financial statements and should be read in conjunction with the
Company's audited financial statements for the year ended September 30, 2019. These condensed interim
financial statements have been prepared following the same accounting policies as the Company’s audited
financial statements for the year ended September 30, 2019.
The Board of Directors approved these condensed interim financial statements on February 20, 2020.
Basis of Presentation
These condensed interim financial statements have been prepared on the historical cost basis except for certain
financial instruments measured at fair value. All dollar amounts presented are in Canadian dollars unless
otherwise specified.
The functional and presentation currency of the Company is the Canadian dollar.

Champignon Brands Inc. (Formerly, Nature Leaf Wellness Corp.)
Notes to the Condensed Interim Financial Statements
For the period ended December 31, 2019
(Expressed in Canadian Dollars)
8
2. Significant accounting policies (continued)
Significant Accounting Policies
In preparing these condensed interim financial statements, the significant accounting policies and the significant
judgments made by management in applying the Company’s significant accounting policies and key sources
of estimation uncertainty were the same as those that applied to the Company’s audited financial statements for
the year ended September 30, 2019, with exception to the new accounting policies adopted by the Company
discussed below.
The preparation of condensed interim financial statements requires that the Company’s management make
judgments and estimates of effects of uncertain future events on the carrying amounts of the Company’s assets
and liabilities at the end of the reporting period. Actual future outcomes could differ from present estimates and
judgments, potentially having material future effects on the Company’s condensed interim financial statements.
Estimates are reviewed on an ongoing basis and are based on historical experience and other facts and
circumstances. Revisions to estimates and the resulting effects on the carrying amounts of the Company’s assets
and liabilities are accounted for prospectively.
Changes in Accounting Standards
Several amendments to existing accounting standards became effective January 1, 2019 and were first adopted
by the Company during the period ended December 31, 2019:
IFRS 16, Leases: This new standard replaces IAS 17 “Leases” and the related interpretative guidance. IFRS
16 applies a control model to the identification of leases, distinguishing between a lease and a service contract
on the basis of whether the customer controls the asset being leased. For those assets determined to meet the
definition of a lease, IFRS 16 introduces significant changes to the accounting by lessees, introducing a single,
on-balance sheet accounting model that is similar to current finance lease accounting, with limited exceptions
for short-term leases or leases of low value assets. Lessor accounting is not substantially changed. The standard
is effective for annual periods beginning on or after January 1, 2019, with early adoption permitted for entities
that have adopted IFRS 16. During the period ended December 31, 2019, the Company had no leases.
3. Prepaid expenses
Prepaid expenses consists of $45,200 (September 30, 2019 - $45,200) advance for the construction of a pop-up
store, $25,000 (September 30, 2019 - $25,000) of research and development expenses, $Nil (September 30,
2019 - $72,459) for production orders to produce tea, and a prepayment of $10,434 (September 30, 2019 -
$10,434) on consignment and marketing services (Note 8).
4. Inventory
Inventory consists of the following:
December 31,
2019
$
September 30,
2019
$
Raw materials - 13,783
Finished goods 106,532 20,000
106,532 33,783
Raw materials consists of the ingredients used to produce tea. Finished goods consists of Auralite Minerals and
finished tea products.
Champignon Brands Inc. (Formerly, Nature Leaf Wellness Corp.)
Notes to the Condensed Interim Financial Statements
For the period ended December 31, 2019
(Expressed in Canadian Dollars)
9
5. Intangible asset
Website
$
Cost:
As at March 31, 2019 (incorporation) -
Additions 120,000
As at September 30, 2019 and December 31, 2019 120,000
Accumulated amortization:
As at March 31, 2019 (incorporation) -
Additions (2,071)
As at September 30, 2019 (2,071)
Additions (3,000)
As at December 31, 2019 (5,071)
Net carrying amounts:
As at September 30, 2019 117,929
As at December 31, 2019 114,929
On May 31, 2019, the Company entered into an asset purchase agreement with Tip Top Gizmos (“Tip Top”)
to acquire Tip Top’s website (“Website”) and all of the intellectual property related to the Website (“Acquired
Assets”). As consideration, the Company paid $50,000 in cash and issued 3,000,000 common shares with a fair
value of $60,000 (Note 8). The Company incurred an additional $10,000 for enhancing the features of the
Website for the Company’s operations. The Company uses the Website (https://vitalitysuperteas.com/) to
advertise and sell its products.
6. Accounts payables and accrued liabilities
December
31, 2019
$
September 30,
2019
$
Accounts payable (Note 7) 45,908 31,500
Accrued liabilities (Note 7) 15,000 21,763
60,908 53,263
7. Related party transactions and balances
The Company has identified its directors and certain senior officers as its key management personnel.
Key management compensation consist of the following for the period from March 26, 2019 (incorporation) to
September 30, 2019 and for the three month period ended December 31, 2019:
December 31,
2019
$
Period from March 26,
2019 (incorporation) to
September 30, 2019
$
Consulting fees charged by the CEO 15,000 31,500
Consulting fees charged by the CFO 1,500 -
16,500 31,500
Included in accounts payable and accrued liabilities at September 30, 2019 is $46,500 owed to the CEO of the
Company for consulting fees (Note 6). This amount is due on demand, unsecured, and without interest.
Champignon Brands Inc. (Formerly, Nature Leaf Wellness Corp.)
Notes to the Condensed Interim Financial Statements
For the period ended December 31, 2019
(Expressed in Canadian Dollars)
10
8. Share capital
Authorized share capital
Unlimited number of common shares without par value.
Issued share capital
During the three month period ended December 31, 2019, the Company did not issue any shares.
The Company was incorporated on March 26, 2019, therefore, the Company did not issue any shares in the
comparative period.
Escrow shares
As at December 31, 2019, 3,000,001 shares and 3,000,000 share purchase warrants are held in escrow and will
be released based on the following:
On the date on which the common shares are first listed for trading on the exchange, (“Listing Date”), 300,000
common shares and 300,000 share purchase warrants will be released from escrow. The remaining 2,700,001
common shares and 2,700,000 share purchase warrants will be released pursuant to the following schedule:
6 months after the Listing Date 1/6 of the remaining escrow securities
12 months after the Listing Date 1/5 of the remaining escrow securities
18 months after the Listing Date 1/4 of the remaining escrow securities
24 months after the Listing Date 1/3 of the remaining escrow securities
30 months after the Listing Date 1/2 of the remaining escrow securities
36 months after the Listing Date the remaining escrow securities
Warrants
The continuity of the Company's share purchase warrants pursuant is as follows:
Number of share
purchase
warrants
#
Weighted average
exercise price
$
Outstanding, incorporation - -
Granted 5,900,000 0.08
Outstanding, September 30, 2019 and December 31, 2019 5,900,000 0.08
As at December 31, 2019 and September 30, 2019, the Company had share purchase warrants exercisable to
acquire common shares of the Company as follows:
Expiry date
Exercise price
$
Number of warrants
#
August 22, 2022 0.15 2,500,000
September 11, 2021 0.15 400,000
May 9, 2024 0.005 3,000,000
5,900,000
Champignon Brands Inc. (Formerly, Nature Leaf Wellness Corp.)
Notes to the Condensed Interim Financial Statements
For the period ended December 31, 2019
(Expressed in Canadian Dollars)
11
8. Share capital (Continued)
Warrants (Continued)
Consignment and Marketing Agreement
The Company entered into an agreement (the “Consignment Agreement”) dated September 11, 2019, with Drip
Coffee Social Ltd. ( the “Consignee”) whereas the Company (“Consignor”) is willing to deliver and sell
consigned goods and the consignee is willing to assist in marketing consigned goods at pop-up events.
Pursuant to the Consignment Agreement, the Company issued 400,000 share purchase warrants (“consideration
warrants”) in consideration of the marketing services. The consideration warrants are exercisable at a price of
$0.15 per share for a period of 2 years from the date of issue. The consideration warrants shall vest on
completion of the following milestones:
1. 100,000 shall vest following Consignee providing the services for a period of at least one month;
2. 75,000 shall vest upon gross revenues from the sale of the goods exceeding $25,000;
3. 75,000 shall vest upon gross revenues from the sale of the goods exceeding $50,000; and
4. 150,000 shall vest upon gross revenues from the sale of the good exceeding $100,000.
The term of the agreement is 6 months and shall automatically renew for successive 6 month periods.
As at September 30, 2019 and December 31, 2019, the fair value of the warrants was determined to be $10,434
using the Black-Scholes Option Pricing Model, assuming a 0% dividend yield, 100% volatility, a risk free
interest rate of 1.59%, and a term of 2 years. The fair value was also calculated based on the estimated
probability of completing each milestone. As at September 30, 2019 and December 31, 2019, the Consignee
has not provided any services, therefore the fair value assigned to the warrants was recognized as a prepaid
expense (Note 3).
Reserve
The warrant reserve records the fair value of the common shares purchase warrants recorded using the BlackScholes Option Pricing Model.
9. Financial risk and capital management
The Company is exposed in varying degrees to a variety of financial instrument related risks. The Board of
Directors approves and monitors the risk management processes, inclusive of documented investment policies,
counterparty limits, and controlling and reporting structures. The type of risk exposure and the way in which
such exposure is managed is provided as follows:
Credit risk
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the
other party to incur a financial loss. The Company’s primary exposure to credit risk is on its cash held in bank
accounts. The majority of cash is deposited in bank accounts held with a major bank in Canada. As most of
the Company’s cash is held by one bank there is a concentration of credit risk. This risk is managed by using
major banks that are high credit quality financial institutions as determined by rating agencies. Credit risk
related to cash is assessed as low.
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 has a planning and budgeting process in place to help determine the funds required to support the
Company’s normal operating requirements on an ongoing basis. The Company ensures that there are sufficient
funds to meet its short-term business requirements, taking into account its anticipated cash flows from
operations and its holdings of cash. As of December 31, 2019, the Company had working capital of $843,795
(September 30, 2019 -$989,282) to cover short term obligations.
Champignon Brands Inc. (Formerly, Nature Leaf Wellness Corp.)
Notes to the Condensed Interim Financial Statements
For the period ended December 31, 2019
(Expressed in Canadian Dollars)
12
10. Financial risk and capital management (Continued)
Liquidity risk (Continued)
Historically, the Company's sole source of funding has been loans from related parties and private placements.
The Company’s access to financing is always uncertain. There can be no assurance of continued access to
significant equity funding. Liquidity risk is assessed as moderate.
Foreign exchange risk
Foreign currency risk is the risk that the fair values of future cash flows of a financial instrument will fluctuate
because they are denominated in currencies that differ from the respective functional currency. The Company
is not exposed to foreign exchange risk.
Interest rate risk
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because
of changes in market interest rates. As at December 31, 2019 and September 30, 2019, the Company did not
have any financial instruments subject to interest rate risk.
Capital management
The Company's policy is to maintain a strong capital base so as to maintain investor and creditor confidence
and to sustain future development of the business. The capital structure of the Company consists of equity and
cash. There were no changes in the Company's approach to capital management during the period. The
Company is not subject to any externally imposed capital requirements.
Fair value
The fair value of the Company’s financial assets and liabilities approximates the carrying amount. Financial
instruments measured at fair value are classified into one of three levels in the fair value hierarchy according
to the relative reliability of the inputs used to estimate the fair values. The three levels of the fair value hierarchy
are:
• Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities;
• Level 2 – Inputs other than quoted prices that are observable for the asset or liability either directly or
indirectly; and
• Level 3 – Inputs that are not based on observable market data.
The following is an analysis of the Company’s financial assets measured at fair value using level inputs as at
December 31, 2019 and September 30, 2019:
As at December 31, 2019
Level 1
$
Level 2
$
Level 3
$
Cash 705,385 - -
As at September 30, 2019
Level 1
$
Level 2
$
Level 3
$
Cash 855,669 - -
Accounts payable approximates its fair value due to its short-term maturity.