Koios Beverage Corp. (Formerly Super Nova Petroleum Corp.)

KOIOS BEVERAGE CORP. (FORMERLY SUPER NOVA PETROLEUM CORP.) Notes to the Condensed Interim Consolidated Financial Statement For the nine months ended February 28, 2019 and 2018 Expressed in US Dollars, unless otherwise stated These condensed interim consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue its existence. 1. NATURE AND CONTINUANCE OF OPERATIONS (cont’d ) d) Basis of consolidation These condensed interim consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Koios Inc. (formerly Koios, LLC) (“Koios”), Cannavated Beverage Co. (BC) (“Cannavated BC”) and Cannavated Beverage Corp. (Nevada) (“Cannavated Nevada”). Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. Inter-company balances and transactions, and any unrealized income and expenses arising from inter-company transactions, are eliminated in preparing the consolidated financial statements. 2. SIGNIFICANT ACCOUNTING POLICIES In preparing these condensed interim consolidated 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 consolidated financial statements for the year ended May 31, 2018, with exception to the new accounting policies adopted by the Company discussed below. The preparation of condensed interim consolidated 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, 2018 and were first adopted by the Company in the nine-month period ended February 28, 2019: Accounting policies effective after June 1, 2018 Financial instruments The Company adopted all of the requirements of IFRS 9 Financial Instruments on June 1, 2018. IFRS 9 replaces IAS 39 Financial Instruments: Recognition and Measurement. IFRS 9 utilizes a revised model for recognition and measurement of financial instruments in a single, forward-looking “expected loss” impairment model. The following is the Company’s new accounting policy for financial instruments under IFRS 9: Classification The Company classifies its financial instruments in the following categories: at fair value through profit and loss (“FVTPL”), at fair value through other comprehensive loss (“FVTOCI”) or at amortized cost. The Company determines the classification of financial assets at initial recognition. The classification of debt instruments is driven by the Company’s business model for managing the financial assets and their contractual cash flow characteristics. Equity 15

KOIOS BEVERAGE CORP. (FORMERLY SUPER NOVA PETROLEUM CORP.) Notes to the Condensed Interim Consolidated Financial Statement For the nine months ended February 28, 2019 and 2018 Expressed in US Dollars, unless otherwise stated instruments that are held for trading are classified as FVTPL. For other equity instruments, on the day of acquisition the Company can make an irrevocable election (on an instrument-by-instrument basis) to designate them as at FVTOCI. Financial liabilities are measured at amortized cost, unless they are required to be measured at FVTPL (such as instruments held for trading or derivatives) or if the Company has opted to measure them at FVTPL. 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) The Company completed a detailed assessment of its financial assets and liabilities as at January 1, 2018. The following table shows the original classification under IAS 39 and the new classification under IFRS 9: Financial assets/liabilities Cash Accounts payable and accrued liabilities Original classification IAS 39 Amortized cost Amortized cost New classification IFRS 9 Amortized cost Amortized cost The Company did not restate prior periods as it recognized the effects of retrospective application to shareholders’ equity at the beginning of the 2018 annual reporting period, which also includes the date of initial application. The adoption of IFRS 9 resulted in no impact to the opening accumulated deficit nor to the opening balance of accumulated comprehensive loss on June 1, 2018. Measurement Financial assets and liabilities at amortized cost Financial assets and liabilities at amortized cost are initially recognized at fair value plus or minus transaction costs, respectively, and subsequently carried at amortized cost less any impairment. Financial assets and liabilities at FVTPL Financial assets and liabilities carried at FVTPL are initially recorded at fair value and transaction costs are expensed in the statements of loss and comprehensive loss. Realized and unrealized gains and losses arising from changes in the fair value of the financial assets and liabilities held at FVTPL are included in the statements of loss and comprehensive loss in the period in which they arise. Where management has opted to recognize a financial liability at FVTPL, any changes associated with the Company’s own credit risk will be recognized in other comprehensive loss. Financial assets through other comprehensive income (“FVTOCI”) Financial assets that meet the following conditions are measured at FVTOCI: - The financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and - The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. The Company does not currently hold any financial instruments designated as FVTOCI. Equity instruments designated as FVTOCI On initial recognition, the Company may make an irrevocable election (on an instrument-by-instrument basis) to designate investments in equity instruments that would otherwise be measured at fair value through profit or loss to present subsequent changes in fair value in other comprehensive income. Designation at FVTOCI is not permitted if the equity investment is held for trading or if it is contingent consideration recognized by an acquirer in a business combination. Investments in equity instruments at FVTOCI are initially measured at fair value plus transaction costs. Subsequently, they are measured at fair value with gains and losses arising from changes in fair value recognized in other OCI. The cumulative gain or loss is not reclassified to profit or loss on disposal of the equity instrument, instead, 16

KOIOS BEVERAGE CORP. (FORMERLY SUPER NOVA PETROLEUM CORP.) Notes to the Condensed Interim Consolidated Financial Statement For the nine months ended February 28, 2019 and 2018 Expressed in US Dollars, unless otherwise stated it is transferred to retained earnings. The Company does not currently hold any equity instruments designated as FVTOCI. 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Accounting policies effective after January 1, 2018 (Continued) Financial instruments (Continued) Impairment of financial assets at amortized cost The Company recognizes a loss allowance for expected credit losses on financial assets that are measured at amortized cost. At each reporting date, the Company measures the loss allowance for the financial asset at an amount equal to the lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. If at the reporting date, the financial asset has not increased significantly since initial recognition, the Company measures the loss allowance for the financial asset at an amount equal to the twelve month expected credit losses. The Company shall recognize in the statements of comprehensive loss, as an impairment gain or loss, the amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized. Derecognition Financial assets The Company derecognizes financial assets only when the contractual rights to cash flows from the financial assets expire, or when it transfers the financial assets and substantially all of the associated risks and rewards of ownership to another entity. Gains and losses on derecognition are generally recognized in the statements of loss and comprehensive loss. Financial liabilities The Company derecognizes financial liabilities only when its obligations under the financial liabilities are discharged, cancelled or expired. Generally, the difference between the carrying amount of the financial liability derecognized and the consideration paid and payable, including any non-cash assets transferred or liabilities assumed, is recognized in the statements of loss and comprehensive loss. IFRS 15, Revenue from Contracts with Customers The Company adopted IFRS 15 – Revenue from contracts with customers on June 1, 2018 in accordance with the transitional provisions of the standard. IFRS 15 deals with revenue recognition and establishes principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. Revenue is recognized when a customer obtains control of a good or service and thus has the ability to direct the use and obtain the benefits from the goods or services. The standard replaces IAS 18 Revenue and IAS 11 Construction contracts and related interpretations. IFRS15 is effective for reporting periods beginning on or after January 1, 2018 with early application permitted. Since the Company has limited revenues from contracts with customers, there was no material impact on the Company’s financial statements upon adoption of this standard. 17

KOIOS BEVERAGE CORP. (FORMERLY SUPER NOVA PETROLEUM CORP.) Notes to the Condensed Interim Consolidated Financial Statement For the nine months ended February 28, 2019 and 2018 Expressed in US Dollars, unless otherwise stated Accounting standards issued but not yet effective Certain new accounting standards and interpretations have been published that are not mandatory for the February 28, 2019 reporting period. Management does not expect these standards will have a significant impact on the measurement or presentation of balances or transactions as reported in these consolidated financial statements. 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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 15. While the Company is currently evaluating the impact this new guidance will have on its consolidated financial statements, the recognition of certain leases is expected to increase the assets and liabilities on the consolidated statements of financial position. As a result, the Company expects IFRS 16 to have a significant change to the consolidated statements of financial position. Other accounting standards or amendments to existing accounting standards that have been issued but have future effective dates are either not applicable or are not expected to have a significant impact on the Company’s financial statements. 3. ACCOUNTS RECEIVABLE February 28, 2019 15,605 11,783 27,388 GST receivable Accounts receivable 4. May 31, 2018 6,944 6,944 INVENTORY February 28, 2019 316,213 90,991 407,204 Raw material Work in progress or finished goods May 31, 2018 - Included in work in progress or finished goods is inventory of 90,991 on consignment with a retailer. 5. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES February 28, 2019 376,984 11,391 388,375 Accounts payable Accrued liabilities (note 7) 18 May 31, 2018 253,681 89,130 342,811

KOIOS BEVERAGE CORP. (FORMERLY SUPER NOVA PETROLEUM CORP.) Notes to the Condensed Interim Consolidated Financial Statement For the nine months ended February 28, 2019 and 2018 Expressed in US Dollars, unless otherwise stated 6. SHARE CAPITAL Authorized - unlimited number of common shares without par value. Share issuances On October 11, 2018, the Company completed a non-brokered private placement consisting of 7,645,282 units (“Units”) at a price of USD 0.202 (C 0.265) for gross proceeds of 1,547,643 (C 2,026,000). Each Unit was comprised of one common share and one common share purchase warrant; each warrant will be exercisable by the holder to purchase one additional common share per warrant at an exercise price of USD 0.267 (C 0.35) for a threeyear period. During the period ended February 28, 2019, the Company issued 1,024,333 common shares pursuant to warrant exercises for gross proceeds of 72,906 (C 86,667). During the period ended February 28, 2019, the Company issued 366,667 common shares pursuant to option exercises for gross proceeds of 67,897 (C 86,667). The Company reclassified 54,006 from reserve to share capital. During the nine-month period ended February 28, 2019, the Company returned 29,250 to its subscribers. In July 2017, the Company issued 1,000,000 shares at C 0.075 per unit for total proceeds of 59,185. Each unit consisted of one common share and one common share purchase warrant exercisable at C 0.10 per share for a period of two years from the date of issuance. Share subscription receipts In relation with the acquisition of Koios (Note 10), the Company issued 11,900,000 Share Subscription Receipts at a price of 0.15 (C 0.20) per subscription receipt for gross proceeds of 1,761,863. The Company paid or accrued share issuance cost of 67,244. The gross proceeds were deposited in trust with Clark Wilson LLP (the “Escrow Agent”) pursuant to an escrow agreement (the “Escrow Agreement”) dated November 29, 2017 between the Company and the Escrow Agent. Special warrants In July 2017, the Company issued 2,377,505 special warrants to settle debts of C 178,313; 1,674,301 special warrants were issued to Golden Dawn Minerals Inc. (“GOM”) for C 125,573 and 703,204 special warrants were issued to a company controlled by the former CEO for C 52,740. Each warrant will automatically convert on the earlier of i) the second anniversary of the date of the issuance of the special warrants, and ii) the closing of a significant transaction involving the Company. At conversion, each special warrant shall convert into a unit of the Company. Each unit consists of one common share and one share purchase warrant. Each warrant shall be exercisable into a common share of the Company at 0.10 per share for a period of two years from conversion. The special warrants were valued at C 0.081 per special warrant for a total value of 148,845 (C 193,231); C 0.075 for the underlying common share and C 0.006 for the underlying warrant (calculated using the Black-Scholes model). A 11,730 loss on settlement of debt was recorded in the current period related to the issuance of the special warrants and settlement of debts noted above. The fair value of the warrants was determined using the following assumptions: 19

KOIOS BEVERAGE CORP. (FORMERLY SUPER NOVA PETROLEUM CORP.) Notes to the Condensed Interim Consolidated Financial Statement For the nine months ended February 28, 2019 and 2018 Expressed in US Dollars, unless otherwise stated 6. SHARE CAPITAL (Cont’d ) Special warrants (Cont’d ) Weighted average assumptions Risk free interest rate Volatility Expected life of warrants Dividend rate Liquidity discount At issuance July 5, 2017 1.13% 125% 2 years 0% 90% Stock options The Company grants stock options to employees, directors, officers, and consultants of the Company as compensation for services pursuant to its Stock Option Plan (the “Plan”). Options have a maximum expiry period of up to five years from the grant date and are subject to minimum vesting requirements, as determined by the Board of Directors. The number of options that may be issued under the Plan may not exceed 10% of the number of issued and outstanding common shares of the Company at the time of granting of options. During the period ended February 28, 2019: 262,500 of stock options were cancelled during the nine months ended December 31, 2018. The Company reclassified 48,022 from reserve to deficit. On November 28, 2018, the Company granted 300,000 stock options with an exercise price of C 0.37 per share expiring on November 28, 2020. The fair value of the stock options was estimated to be 71,711 using the BlackScholes pricing model with the following assumptions: term of 2 years; expected volatility of 202%; risk-free rate of 2.21%; and expected dividends of zero. As at February 28, 2019, the number of exercisable options was 300,000. On February 20, 2019, the Company granted 1,000,000 stock options with an exercise price of C 0.30 per share expiring on February 20, 2021. The options vest 100% on June 20, 2019. The fair value of the stock options was estimated to be 9,215 using the Black-Scholes pricing model with the following assumptions: term of 2 years; expected volatility of 138%; risk-free rate of 1.77%; and expected dividends of zero. As at February 28, 2019, the number of exercisable options was nil. On February 22, 2019, the Company granted 1,500,000 stock options with an exercise price of C 0.28 per share expiring on February 21, 2021. The options vest 33% immediately and 33% thereafter every 6 months from the date of grant. The fair value of the stock options was estimated to be 75,034 using the Black-Scholes pricing model with the following assumptions: term of 2 years; expected volatility of 138%; risk-free rate of 1.78%; and expected dividends of zero. As at February 28, 2019, the number of exercisable options was 333,333. During the year ended May 31, 2018: On April 30, 2018, the Company granted 1,500,000 stock options to two directors of the Company, an officer of Koios, an employee of Koios and two consultants of the Company, pursuant to its stock option plan, at an exercise price of C 0.20 per common share. Each option granted to the optionees is exercisable for a period of two years. Of the stock options granted, 1,000,000 of the stock options vest on April 30, 2019 and 500,000 of the stock options vest on August 30, 2018. During the nine months ended February 28, 2019, the Company recognized 357,916 in the consolidated statements for loss and comprehensive loss for the value of the options that vested during the year using Black Scholes option pricing method. 20

KOIOS BEVERAGE CORP. (FORMERLY SUPER NOVA PETROLEUM CORP.) Notes to the Condensed Interim Consolidated Financial Statement For the nine months ended February 28, 2019 and 2018 Exp

KOIOS BEVERAGE CORP. (FORMERLY SUPER NOVA PETROLEUM CORP.) Condensed Interim Consolidated Statements of Changes in Shareholders' Equity (Unaudited) For the nine months ended February 28, 2019 and 2018 (Expressed in US dollars) 5 Number of Shares Share Capital Number of Special Warrants Special Warrants Obligation to