UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~December~~March 31, ~~2021~~2022

☐	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

000-56090

Commission File Number

PHARMAGREEN BIOTECH INC.

(Exact name of registrant as specified in its charter)

Nevada

98-0491567

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

2987 Blackbear Court, Coquitlam, BC		V3E 3A2
2987 Blackbear Court, Coquitlam, British Columbia		V3E 3A2
(Address of principal executive offices)		(Zip Code)

702-803-9404

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☐ Yes ☒ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer	☐	Non-accelerated Filer	☒
Accelerated filer	☐	Smaller reporting company	☒
		Emerging Growth	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. ☐ Yes ☐ No

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of ~~February~~May 2116, 2022, we had ~~397~~404,221,269 shares of common stock issued and outstanding.

TABLE of CONTENTS

	PART I—FINANCIAL INFORMATION
Item 1.	Financial Statements.	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	19
Item 4.	Controls and Procedures.	19
	PART II—OTHER INFORMATION
Item 1.	Legal Proceedings.	20
Item 1A.	Risk Factors.	20
Item 2.	Unregistered Sales of Securities and Use of Proceeds.	20
Item 3.	Defaults Upon Senior Securities.	20
Item 4.	Mine Safety Disclosure.	20
Item 5.	Other Information.	20
Item 6.	Exhibits.	21
	SIGNATURES	22

PART I—FINANCIAL INFORMATION	3
Item 1. Financial Statements.	3
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.	18
Item 3. Quantitative and Qualitative Disclosures About Market Risk.	21
Item 4. Controls and Procedures.	21

PART II—OTHER INFORMATION	22
Item 1. Legal Proceedings.	22
Item 1A. Risk Factors.	22
Item 2. Unregistered Sales of Securities and Use of Proceeds.	22
Item 3. Defaults Upon Senior Securities.	23
Item 4. Mine Safety Disclosure.	23
Item 5. Other Information.	23
Item 6. Exhibits.	24
SIGNATURES	26

Table of Contents

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

PHARMAGREEN BIOTECH INC.

Condensed Consolidated Financial Statements

For the ~~Three~~Six Months Ended ~~December~~March 31, ~~2021~~2022

(Expressed in U.S. Dollars)

(Unaudited)

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PHARMAGREEN BIOTECH INC.

Condensed Consolidated Balance Sheets

(Expressed in U.S. dollars)

	December 31, 2021			September 30, 2021
	March 31, 2022			September 30, 2021
	$			$
	(Unaudited)
	(unaudited)
Assets
Current assets
Cash		103,~~474~~045			25,300
Amounts receivable		6270			290
Prepaid expenses and deposits (Note 11)		347,217			347,491
Prepaid expenses and deposits (Notes 11 and 12)		195,288			347,491
Total assets		~~357~~198,~~753~~403			373,081
Liabilities and Stockholders’ Deficit
Current liabilities
Accounts payable and accrued liabilities (Notes 3 and 7)		~~699~~721,~~454~~228			659,437
Advances from Alliance Growers Corp. (Note 12(a))		5960,~~258~~055			59,122
Loans payable (Note 4)		40,000			40,000
Convertible notes – current portion (Note 5)		190,834			190,834
Convertible notes – current portion, net of unamortized discount of $14,282 and $nil, respectively (Note 5)		206,552			190,834
Derivative liabilities (Note 6)		237,729			472,003
Derivative liabilities (Notes 5 and 6)		816,657			472,003
Due to related parties (Note 7)		~~673~~712,~~680~~535			605,019
Total current liabilities		12,~~900~~557,~~955~~027			2,026,415
Loan payable (Note 4)		31,604			31,532
Loans payable (Note 4)		32,029			31,532
Convertible notes, net of unamortized discount of $17,434 and $19,233, respectively (Note 5)		9,633			7,834
Convertible notes, net of unamortized discount of $15,271 and $19,233, respectively (Note 5)		11,797			7,834
Total liabilities		12,~~942~~600,~~192~~853			2,065,781
Stockholders’ deficit
Preferred stock
Preferred stock Authorized: 1,000,000 shares, $0.001 par value; 10,000 shares issued and outstanding		10			10
Authorized: 1,000,000 shares, $0.001 par value;10,000 and nil shares issued and outstanding, respectively		10			10
Common stock Authorized: 2,000,000,000 shares, $0.001 par value; 397,221,269 and 381,171,269 shares issued and outstanding, respectively (Note 8)		397,221			381,171
Common stock
Additional paid-in capital (Note 8)		9,991,722			9,680,572
Authorized: 2,000,000,000 shares, $0.001 par value;385,171,269 and 381,171,269 shares issued and outstanding, respectively		385,171			381,171
Accumulated other comprehensive loss		(28,311	)		(8,378	)
Additional paid-in capital		9,768,572			9,680,572
Deficit		(12,716,434	)		(11,699,417	)
Accumulated other comprehensive loss		(10,841	)		(8,378	)
Total Pharmagreen Biotech Inc. stockholders’ deficit		(2,355,792	)		(1,646,042	)
Deficit		(11,680,693	)		(11,699,417	)
Total Pharmagreen Biotech Inc. stockholders’ deficit		(1,537,781	)		(1,646,042	)
Non-controlling interest		(46,658	)		(46,658	)
Total stockholders’ deficit		(12,~~584~~402,~~439~~450	)		(1,692,700	)
Total liabilities and stockholders’ deficit		~~357~~198,~~753~~403			373,081
Nature of business and continuance of operations (Note 1)
Commitments and contingency (Note 12)
Subsequent event (Note 13)

Nature of business and continuance of operations (Note 1) Contingency (Note 4) Commitments (Note 12) Subsequent event (Note 13)

(The accompanying notes are an integral part of these condensed consolidated financial statements)

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PHARMAGREEN BIOTECH INC.

Condensed Consolidated Statements of Operations and Comprehensive ~~Income (~~Loss)

(Expressed in U.S. dollars)

(Unaudited)

	Three months endedDecember 31, 2021$			Three months endedDecember 31, 2020$
	Three months endedMarch 31, 2022$			Three monthsendedMarch 31, 2021$			Six monthsendedMarch 31, 2022$			Six monthsendedMarch 31, 2021$
Expenses
Consulting fees (Note 7)		~~139~~424,~~528~~363			5056,~~140~~053			563,891			106,193
Foreign exchange loss (gain)		576			(11,106	)
Foreign exchange loss		(3,657	)		(2,801	)		(3,081	)		(13,907	)
General and administrative		2720,~~213~~904			2419,~~412~~248			48,117			43,660
Professional fees		3112,~~459~~115			3359,~~508~~451			43,574			92,959
Salaries and wages		45,~~884~~135			4,~~670~~998			10,019			9,668
Total expenses		~~203~~458,~~660~~860			~~101~~136,~~624~~949			662,520			238,573
Net loss before other income (expense)		(203,660	)		(101,624	)
Net loss before other income (expenses)		(458,860	)		(136,949	)		(662,520	)		(238,573	)
Other income (expense)
Accretion of discount on convertible notes (Note 5)		(12,~~799~~893	)		(7213,~~376~~246	)		(4,692	)		(85,622	)
Interest and finance costs (Notes 4 and 5)		(10,091	)		(36,230	)
Interest and finance costs (Note 4 and 5)		(10,071	)		(626,807	)		(20,162	)		(663,037	)
Gain (loss) on change in fair value of derivative liabilities (Note 6)		234,274			(674,912	)
Loss on change in fair value of derivative liabilities (Note 6)		(563,917	)		(2,509,926	)		(329,643	)		(3,184,838	)
Gain on settlement on convertible notes		-			~~468~~145,~~032~~494			-			613,526
Total other income (expense)		~~222~~(576,~~384~~881	)		(~~315~~3,~~486~~004,485	)		(354,497	)		(3,319,971	)
Net income (loss)		18,724			(417,110	)
Net loss		(1,035,741	)		(3,141,434	)		(1,017,017	)		(3,558,544	)
Less: net loss attributable to non-controlling interest		-			144			-			45
Net income (loss) attributable to Pharmagreen Biotech Inc.		18,724			(417,109	)
Net loss attributable to Pharmagreen Biotech Inc.		(1,035,741	)		(3,141,390	)		(1,017,017	)		(3,558,499	)
Comprehensive loss
Foreign currency translation loss		(217,~~463~~470	)		(4212,~~455~~744	)		(19,933	)		(55,199	)
Comprehensive income (loss) attributable to Pharmagreen Biotech Inc.		16,261			(459,564	)
Comprehensive loss attributable to Pharmagreen Biotech Inc.		(1,053,211	)		(3,154,134	)		(1,036,950	)		(3,613,698	)
Basic and diluted income (loss) per share attributable to Pharmagreen Biotech Inc. stockholders		0.00			(0.00	)
Basic and diluted loss per share attributable to Pharmagreen Biotech Inc. stockholders		(0.00	)		(0.01	)		(0.00	)		(0.02	)
Weighted average number of shares outstanding used in the calculation of net loss per share attributable to Pharmagreen Biotech Inc.		~~384~~394,~~214~~410,~~747~~713			~~157~~307,~~102~~043,~~642~~543			389,278,687			231,249,242

(The accompanying notes are an integral part of these condensed consolidated financial statements)

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PHARMAGREEN BIOTECH INC.

Condensed Consolidated Statements of Stockholders’ Deficit

(Expressed in U.S. dollars)

(Unaudited)

	Preferred stock				Common stock				Common stock			Additionalpaid-in		Accumulatedothercomprehensive						Non -controlling			Total stockholders’
														Accumulated
									Common			Additional		other						Non -			Total
	Preferred stock				Common stock				stock			paid-in		comprehensive						controlling			stockholders’
	Number of shares		Amount$		Number of shares		Amount$		issuable$			capital$		income (loss)$			Deficit$			interest$			deficit$
Balance, September 30, 2020		–-		-		95,806,289		95,806		180,000			3,967,261		36,679			(7,167,346	)		(46,505	)		(2,934,105	)
Issuance of units for cash		–-		-		5,400,000		5,400		-			21,600		-			-			-			27,000
Issuance of preferred shares for cash		10,000		10		–-		-		-			-		-			-			-			10
Issuance of common stock pursuant to the conversion of convertible notes		–-		-		144,315,380		144,316		(180,000	)		1,647,737		-			-			-			1,612,053
Issuance of common stock for services		–-		-		90,000		90		-			1,265		-			-			-			1,355
Foreign currency translation loss		–-		-		–-		-		-			-		(42,455	)		-			-			(42,455	)
Net loss for the period		–-		-		–-		-		-			-		-			(417,109	)		(1	)		(417,110	)
Balance, December 31, 2020		10,000		10		245,611,669		245,612		-			5,637,863		(5,776	)		(7,584,455	)		(46,506	)		(1,753,252	)
Issuance of units for cash		-		-		17,411,250		17,411		6,113			72,701		-			-			-			96,225
Issuance of common stock pursuant to the conversion of convertible notes		-		-		84,845,100		84,845		-			2,848,372		-			-			-			2,933,217
Issuance of common stock for services		-		-		300,000		300		-			7,020		-			-			-			7,320
Foreign currency translation loss		-		-		-		-		-			-		(12,744	)		-			-			(12,744	)
Net loss for the period		-		-		-		-		-			-		-			(3,141,390	)		(44	)		(3,141,434	)
Balance, March 31, 2021		10,000		10		348,168,019		348,168		6,113			8,565,956		(18,520	)		(10,725,845	)		(46,550	)		(1,870,668	)
Balance, September 30, 2021		10,000		10		381,171,269		381,171		-			9,680,572		(8,378	)		(11,699,417	)		(46,658	)		(1,692,700	)
Issuance of shares for cash, net of issuance costs		-		-		4,000,000		4,000		-			88,000		-			-			-			92,000
Foreign currency translation loss		-		-		-		-		-			-		(2,463	)		-			-			(2,463	)
Net income for the period		-		-		-		-		-			-		-			18,724			-			18,724
Balance, December 31, 2021		10,000		10		385,171,269		385,171		-			9,768,572		(10,841	)		(11,680,693	)		(46,658	)		(1,584,439	)
Issuance of shares for cash		-		-		1,450,000		1,450		-			25,050		-			-			-			26,500
Issuance of common shares for services		-		-		10,600,000		10,600		-			198,100		-			-			-			208,700
Foreign currency translation loss		-		-		-		-		-			-		(17,470	)		-			-			(17,470	)
Net loss for the period		-		-		-		-		-			-		-			(1,035,741	)		-			(1,035,741	)
Balance, March 31, 2022		10,000		10		397,221,269		397,221		-			9,991,722		(28,311	)		(12,716,434	)		(46,658	)		(2,402,450	)

(The accompanying notes are an integral part of these condensed consolidated financial statements)

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PHARMAGREEN BIOTECH INC.

Condensed Consolidated Statements of ~~Stockholders’~~Cash ~~Deficit (continued)~~Flows

(Expressed in U.S. dollars)

(Unaudited)

	Preferred stock						Common stock				Common stock		Additionalpaid-in		Accumulatedothercomprehensive						Non -controlling			Total stockholders’
	Six months endedMarch 31, 2022			Six months endedMarch 31, 2021
	Number of shares			Amount$			Number of shares		Amount$		issuable$		capital$		income (loss)$			Deficit$			interest$			deficit$
OPERATING ACTIVITIES
Balance, September 30, 2021		10,000			10			381,171,269		381,171		-		9,680,572		(8,378	)		(11,699,417	)		(46,658	)		(1,692,700	)
Net loss		(1,017,017	)		(3,558,544	)
Issuance of shares for cash, net of issuance costs		–			-			4,000,000		4,000		-		88,000		-			-			-			92,000
Adjustments to reconcile net loss to net cash used in operating activities:
Foreign currency translation loss		–			-			–		-		-		-		(2,463	)		-			-			(2,463	)
Accretion of discount on convertible notes		4,692			85,622
Net income for the period		–			-			–		-		-		-					18,724			-			18,724
Financing fees and default penalties		-			663,037
Balance, December 31, 2021		10,000			10			385,171,269		385,171		-		9,768,572		(10,841	)		(11,680,693	)		(46,658	)		(1,584,439	)
Gain on settlement of convertible note		-			(613,526	)
Loss on change in fair value of derivative liabilities		329,643			3,184,838
Shares issued for services		208,700			8,675
Changes in non-cash operating assets and liabilities:
Accounts receivable		220			34
Prepaid expenses and deposits		152,203			3,754
Accounts payable and accrued liabilities		61,791			84,334
Due to related parties		55,450			36,232
Net cash used in operating activities		(204,318	)		(105,544	)
FINANCING ACTIVITIES
Proceeds from issuance of convertible note		30,000			-
Proceeds from issuance of units		-			123,225
Proceeds from issuance of preferred shares		-			10
Proceeds from issuance of shares, net of issuance costs		118,500			-
Proceeds from loans from related party		66,912			33,646
Repayment of loans from related parties		(14,846	)		-
Net cash provided by financing activities		200,566			156,881
Effect of foreign exchange rate changes on cash		(18,503	)		(50,018	)
Change in cash		(22,255	)		1,319
Cash, beginning of period		25,300			12,196
Cash, end of period		3,045			13,515
Non-cash investing and financing activities:
Common shares issued for settlement of convertible notes		-			4,545,270
Supplemental disclosures:
Interest paid		-			-
Income taxes paid		-			-

(The accompanying notes are an integral part of these condensed consolidated financial statements)

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PHARMAGREEN BIOTECH INC.

~~Condensed~~Notes ~~Consolidated~~to ~~Statements~~the ofCondensed ~~Cash~~Consolidated ~~Flows~~Financial Statements

March 31, 2022

(Expressed in U.S. dollars)

(Unaudited)

	Three months endedDecember 31, 2021$			Three months endedDecember 31, 2020$
OPERATING ACTIVITIES
Net income (loss)		18,724			(417,110	)
Adjustments to reconcile net loss to net cash used in operating activities:
Accretion of discount on convertible notes		1,799			72,376
(Gain) loss on change in fair value of derivative liabilities		(234,274	)		674,912
Gain on settlement of convertible note		-			(468,032	)
Shares issued for services		-			1,355
Changes in non-cash operating assets and liabilities:
Amounts receivable		228			498
Prepaid expenses and deposits		274			-
Accounts payable and accrued liabilities		40,017			93,862
Due to related parties		24,702			37,759
Net cash used in operating activities		(148,530	)		(4,380	)
FINANCING ACTIVITIES
Proceeds from issuance of units		-			27,000
Proceeds from issuance of preferred shares		-			10
Proceeds from issuance of shares, net of issuance costs		92,000			-
Proceeds from loans from related parties		50,000			33,646
Repayment of loans from related parties		(6,041	)		-
Net cash provided by financing activities		135,959			60,656
Effect of foreign exchange rate changes on cash		(2,255	)		(38,708	)
Change in cash		(14,826	)		17,568
Cash, beginning of period		25,300			12,196
Cash, end of period		10,474			29,764
Non-cash investing and financing activities:
Common stock issuable pursuant to conversion of convertible notes		-			1,612,053
Supplemental disclosures:
Interest paid		-			-
Income taxes paid		-			-

Nature of Business and Continuance of Operations

Pharmagreen Biotech Inc. (“the Company”) was incorporated under the laws of the State of Nevada, U.S. on November 26, 2007, under the name Azure International, Inc. On October 30, 2008, and effective as of the same date, the Company filed Articles of Merger (“Articles”) with the Secretary of State of the State of Nevada, to effect a merger by and between Air Transport Group Holdings, Inc., a Nevada corporation and Azure International, Inc. As a result of the merger, the Company changed its name to Air Transport Group Holdings, Inc. The Company was previously in the business of providing technical advisory and appraisals to the aircraft and aviation business as well as providing sourcing for aircraft leases and parts. Pursuant to a Share Exchange Agreement with WFS Pharmagreen Inc. (“WFS”) on May 2, 2018, the Company changed its name to Pharmagreen Biotech Inc. and changed its principal business to the production of starter plantlets for the North American high CBD hemp and medical cannabis industries through the application of the proprietary plant tissue culture in vitro process called “Chibafreen”. This proprietary process will produce plantlets that will be genetically identical and free of pests and disease free with consistent and certifiable constituent properties.

Going Concern

These condensed consolidated financial statements have been prepared on the going concern basis, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. As at March 31, 2022, the Company has not earned any revenues from operations, has a working capital deficit of $2,358,624, and has an accumulated deficit of $12,716,434. During the six months ended March 31, 2022, the Company used cash flows for operations of $204,318. Furthermore, the Company has defaulted on convertible notes. These factors raise substantial doubt upon the Company’s ability to continue as a going concern. These condensed consolidated financial statements do not reflect any adjustments that may be necessary if the Company is unable to continue as a going concern.

The outbreak of the novel coronavirus COVID-19, which was declared a pandemic by the World Health Organization on March 11, 2020, has led to adverse impacts on the U.S. and global economies, disruptions of financial markets, and created uncertainty regarding potential impacts to the Company’s supply chain, operations, and customer demand. The COVID-19 pandemic has impacted and could further impact the Company’s operations and the operations of the Company’s suppliers and vendors as a result of quarantines, facility closures, and travel and logistics restrictions. Specifically, the Company attributes the pandemic to a delay in a planned financing which was to be used for the construction of the biotech complex, resulting in an impairment of the capitalized construction-in-progress at September 30, 2020. The extent to which the COVID-19 pandemic further impacts the Company’s business, results of operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to the duration, spread, severity, and impact of the COVID-19 pandemic, the effects of the COVID-19 pandemic on the Company’s customers, suppliers, and vendors and the remedial actions and stimulus measures adopted by local and federal governments, and to what extent normal economic and operating conditions can resume. The management team is closely following the progression of COVID-19 and its impact on the Company. Even after the COVID-19 pandemic has subsided, the Company may continue to experience adverse impacts to its business as a result of any economic recession or depression that has occurred or may occur in the future. Therefore, the Company cannot reasonably estimate the impact at this time our business, liquidity, capital resources, and financial results.

(The accompanying notes are an integral part of these condensed consolidated financial statements)

2.	Significant Accounting Policies

	(a)	Interim Financial Statements

		These condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s financial position, results of operations and cash flows for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for a full year or for any future period.

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PHARMAGREEN BIOTECH INC.

Notes to the Condensed Consolidated Financial Statements

~~December~~March 31, ~~2021~~2022

(Expressed in U.S. dollars)

(~~unaudited~~Unaudited)

12. ~~Nature~~Significant ofAccounting ~~Business~~Policies ~~and Continuance of Operations Pharmagreen Biotech Inc.~~ (~~“the Company”~~continued) was incorporated under the laws of the State of Nevada, U.S. on November 26, 2007, under the name Azure International, Inc. On October 30, 2008, and effective as of the same date, the Company filed Articles of Merger (“Articles”) with the Secretary of State of the State of Nevada, to effect a merger by and between Air Transport Group Holdings, Inc., a Nevada corporation and Azure International, Inc. As a result of the merger, the Company changed its name to Air Transport Group Holdings, Inc. The Company was previously in the business of providing technical advisory and appraisals to the aircraft and aviation business as well as providing sourcing for aircraft leases and parts. Pursuant to a Share Exchange Agreement with WFS Pharmagreen Inc. (“WFS”) on May 2, 2018, the Company changed its name to Pharmagreen Biotech Inc. and changed its principal business to the production of starter plantlets for the North American high CBD hemp and medical cannabis industries through the application of the proprietary plant tissue culture in vitro process called “Chibafreen”. This proprietary process will produce plantlets that will be genetically identical and free of pests and disease free with consistent and certifiable constituent properties. Going Concern These condensed consolidated financial statements have been prepared on the going concern basis, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. As at December 31, 2021, the Company has not earned any revenues from operations, has a working capital deficit of $1,543,202, and has an accumulated deficit of $11,680,693. During the three months ended December 31, 2021, the Company used cash flows for operations of $148,530. Furthermore, the Company has defaulted on convertible notes. These factors raise substantial doubt upon the Company’s ability to continue as a going concern. These condensed consolidated financial statements do not reflect any adjustments that may be necessary if the Company is unable to continue as a going concern. The outbreak of the novel coronavirus COVID-19, which was declared a pandemic by the World Health Organization on March 11, 2020, has led to adverse impacts on the U.S. and global economies, disruptions of financial markets, and created uncertainty regarding potential impacts to the Company’s supply chain, operations, and customer demand. The COVID-19 pandemic has impacted and could further impact the Company’s operations and the operations of the Company’s suppliers and vendors as a result of quarantines, facility closures, and travel and logistics restrictions. Specifically, the Company attributes the pandemic to a delay in a planned financing which was to be used for the construction of the biotech complex, resulting in an impairment of the capitalized construction-in-progress at September 30, 2020. The extent to which the COVID-19 pandemic further impacts the Company’s business, results of operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to the duration, spread, severity, and impact of the COVID-19 pandemic, the effects of the COVID-19 pandemic on the Company’s customers, suppliers, and vendors and the remedial actions and stimulus measures adopted by local and federal governments, and to what extent normal economic and operating conditions can resume. The management team is closely following the progression of COVID-19 and its impact on the Company. Even after the COVID-19 pandemic has subsided, the Company may continue to experience adverse impacts to its business as a result of any economic recession or depression that has occurred or may occur in the future. Therefore, the Company cannot reasonably estimate the impact at this time our business, liquidity, capital resources, and financial results.

	(b)	Basis of Presentation

		The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States and are expressed in U.S. dollars. These condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, WFS Pharmagreen Inc. (“WFS”), and its 89.7% owned subsidiary 1155097 B.C. Ltd. (“115BC”), companies incorporated in British Columbia, Canada. All inter-company accounts and transactions have been eliminated. The Company’s fiscal year-end is September 30.

	(c)	Use of Estimates and Judgments

		The preparation of these condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the equity component of convertible notes, fair value of derivative liabilities, fair value of stock-based payments, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience, and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. The Company applies judgment in the application of the going concern assumption which requires management to take into account all available information about the future, which is at least, but not limited to, 12 months from the end of the reporting period.

	(d)	Recently Adopted Accounting Pronouncements

		The Company has implemented all new accounting pronouncements that are in effect and that may impact its condensed consolidated financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations

3.	Accounts Payable and Accrued Liabilities

	Accounts payable and accrued liabilities consists of the following:

	March 31, 2022 $		September 30, 2021 $

Accounts payable		622,554		579,851
Accrued interest payable		98,674		79,586

Balance, March 31, 2022		721,228		659,437

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PHARMAGREEN BIOTECH INC.

Notes to the Condensed Consolidated Financial Statements

~~December~~March 31, ~~2021~~2022

(Expressed in U.S. dollars)

(~~unaudited~~Unaudited)

2. Significant Accounting Policies

4.	Loans Payable

	(a)	On November 22, 2019, the Company entered into a promissory note with an unrelated party for $40,000 in connection with an equity purchase agreement (Refer to Note 12(b)). The promissory note is unsecured, was due on November 30, 2020, and bears interest on the unpaid principal balance at a rate of 10% per annum. At March 31, 2022, the Company has recorded accrued interest payable of $9,402 (September 30, 2021 - $7,410) and the promissory note is in default. Refer to Note 12(j).

	(b)	On April 22, 2020, the Company received a loan for Cdn$40,000 from the Government of Canada under the Canada Emergency Business Account program (“CEBA”). As at March 31, 2022, the balance owing is $32,029 (Cdn$40,000) (September 30, 2021 - $31,532 (Cdn$40,000)). These funds are interest free until December 31, 2023, at which time the remaining balance will convert to a 2-year term loan at an interest rate of 5% per annum. If the Company repays the loan prior to December 31, 2023, there will be loan forgiveness of 25% of the principal balance repaid, up to a maximum of Cdn$10,000.

(a) Interim Financial Statements These condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s financial position, results of operations and cash flows for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for a full year or for any future period. (b) Basis of Presentation The accompanying condensed interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States and are expressed in U.S. dollars. These condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, WFS Pharmagreen Inc. (“WFS”), and its 89.7% owned subsidiary 1155097 B.C. Ltd. (“115BC”), companies incorporated in British Columbia, Canada. All inter-company accounts and transactions have been eliminated. The Company’s fiscal year-end is September 30. (c) Use of Estimates and Judgments The preparation of these condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the equity component of convertible notes, fair value of derivative liabilities, fair value of stock-based payments, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience, and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. The Company applies judgment in the application of the going concern assumption which requires management to take into account all available information about the future, which is at least, but not limited to, 12 months from the end of the reporting period. (d) Recently Adopted Accounting Pronouncements The Company has implemented all new accounting pronouncements that are in effect and that may impact its condensed consolidated financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

5.	Convertible Notes

	(a)	On April 4, 2018, the amount of $32,485 owed to related parties was converted to Series A convertible notes, which are unsecured, non-interest bearing, and due on April 4, 2023. These notes are convertible in whole or in part, at any time until maturity, to common shares of the Company at $0.0001 per share. The outstanding balance remaining at maturity shall bear interest at 12% per annum until fully paid. The Company evaluated the convertible notes for a beneficial conversion feature in accordance with ASC 470-20 Debt with Conversion and Other Options. The Company determined that the conversion price was below the closing stock price on the commitment date, and the convertible notes contained a beneficial conversion feature. The Company recognized the intrinsic value of the embedded beneficial conversion feature of $32,485 as additional paid-in capital and reduced the carrying value of the convertible note to $nil. The carrying value will be accreted over the term of the convertible notes up to their face value of $32,485.

		During the year ended September 30, 2018, the Company issued 31,745,000 shares of common stock upon the conversion of $3,174 of Series A convertible notes, which included 18,000,000 common shares to the President of the Company and 5,320,000 common shares to family members of the President of the Company. Upon conversion, the Company immediately recognized the related remaining debt discount of $3,112 as accretion expense. During the year ended September 30, 2019, the Company issued 3,900,000 shares of common stock upon the conversion of $390 of Series A convertible notes. Upon conversion, the Company immediately recognized the related remaining debt discount of $375 as accretion expense. During the year ended September 30, 2020, the Company issued 18,525,000 shares of common stock upon the conversion of $1,853 of Series A convertible notes. Upon conversion, the Company immediately recognized the related remaining debt discount of $1,670 as accretion expense. As at March 31, 2022, the carrying value of the convertible notes was $11,797 (September 30, 2021 – $7,834) and had an unamortized discount of $15,271 (September 30, 2021 - $19,233). During the six months ended March 31, 2022, the Company recorded accretion expense of $3,963 (2021 - $1,744).

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PHARMAGREEN BIOTECH INC.

Notes to the Condensed Consolidated Financial Statements

~~December~~March 31, ~~2021~~2022

(Expressed in U.S. dollars)

(~~unaudited~~Unaudited)

35. ~~Accounts~~Convertible ~~Payable~~Notes ~~and Accrued Liabilities Accounts payable and accrued liabilities consists of the following:~~(continued)

		December 31,2021$		September 30,2021$
	(b)	On January 14, 2020, the Company entered into a convertible note with an unrelated party for $78,000, of which $3,000 was paid for financing costs, resulting in net proceeds to the Company of $75,000. The note was due on January 14, 2021, and bears interest on the unpaid principal balance at a rate of 12% per annum, which increases to 15% per annum upon default of the note. The note may be converted at any time after the date of issuance into shares of Company’s common stock at a conversion price equal to lower of: 65% of the lowest trading price during the 20-trading day period prior to the issuance date; or (ii) 65% of the lowest trading price during the 20-trading day period prior to the conversion date. In connection with the issuance of the above convertible note, the Company evaluated the conversion option for derivative treatment under ASC 815-15, Derivatives and Hedging, and determined the note and conversion feature qualified as derivatives. The Company classified the conversion feature as a derivative liability at fair value. The initial fair value of the conversion feature was determined to be $76,330. The Company recognized the maximum intrinsic value of the embedded beneficial conversion feature of $74,500, resulting in a loss on change in fair value of derivative liabilities of $1,830, and reduced the carrying value of the convertible note to $500. The carrying value will be accreted over the term of the convertible note up to its face value of $78,000.
Accounts payable			611,215		579,851
		The financing costs were netted against the convertible note and are being amortized over the term using the effective interest rate method. During the year ended September 30, 2020, the Company recognized accretion expense of $16,447. During the year ended September 30, 2021, the Company issued 2,600,000 shares of common stock upon the conversion of $18,923 of the convertible note and $4,500 of conversion fees. On January 14, 2021, the Company failed to repay the note upon maturity and recorded additional default principal of $53,007. As at March 31, 2022, the carrying value of the convertible note was $112,084 (September 30, 2021 - $112,084), and the fair value of the derivative liability was $447,469 (September 30, 2021 - $264,481).
Accrued interest payable			88,239		79,586
	(c)	On January 22, 2020, the Company entered into a convertible note with an unrelated party for $78,750, of which $9,750 was paid directly to third parties for financing costs, resulting in proceeds to the Company of $69,000. The note is due on January 22, 2021, and bears interest on the unpaid principal balance at a rate of 10% per annum, payable in common stock, which increases to 24% per annum upon default of the note. The note may be converted at any time after the date of issuance into shares of Company’s common stock at a conversion price equal to 65% of the lowest trading price during the 20-trading day period ending on the latest complete trading day prior to the conversion date. In connection with the issuance of the above convertible note, the Company evaluated the conversion option for derivative treatment under ASC 815-15, Derivatives and Hedging, and determined the note and conversion feature qualified as derivatives. The Company classified the conversion feature as a derivative liability at fair value. The initial fair value of the conversion feature was determined to be $75,179. The Company recognized the maximum intrinsic value of the embedded beneficial conversion feature of $68,500, resulting in a loss on change in fair value of derivative liabilities of $6,679, and reduced the carrying value of the convertible note to $500. The carrying value will be accreted over the term of the convertible note up to its face value of $78,750.
			699,454		659,437
		The financing costs were netted against the convertible note and are being amortized over the term using the effective interest rate method. During the year ended September 30, 2020, the Company defaulted on the convertible note and recognized accretion expense of $78,250. On January 22, 2021, the Company failed to repay the note upon maturity. As at March 31, 2022, the carrying value of the convertible note was $78,750 (September 30, 2021 - $78,750) and the fair value of the derivative liability was $359,055 (September 30, 2021 - $207,522).

4. Note and Loan Payable

	(a)	On November 22, 2019, the Company entered into a promissory note with an unrelated party for $40,000 in connection with an equity purchase agreement (Refer to Note 12(b)). The promissory note is unsecured, was due on November 30, 2020, and bears interest on the unpaid principal balance at a rate of 10% per annum. At December 31, 2021, the Company has recorded accrued interest payable of $8,415 (September 30, 2021 - $7,410) and the promissory note is in default. On March 10, 2021, this noteholder filed a Notice of Motion for Summary Judgement in Lieu of Complaint (the “Notice”) with the State of New York Supreme Court, County of New York for $40,504 plus interest at the rate of 10% per annum from January 6, 2021, plus costs. On July 31, 2021, the Notice was dismissed without prejudice by the State of New York Supreme Court. On September 23, 2021, the noteholder filed a new Notice of Motion for Summary Judgement in Lieu of Complaint with the State of New York Supreme Court, County of New York for $44,504 plus interest at the rate of 10% per annum from January 6, 2021, plus costs. The Company believes that the claim has no merit and intends to defend its position vigorously.
	(b)	On April 22, 2020, the Company received a loan for Cdn$40,000 from the Government of Canada under the Canada Emergency Business Account program (“CEBA”). As at December 31, 2021, the balance owing is $31,604 (Cdn$40,000) (September 30, 2021 - $31,532 (Cdn$40,000)). These funds are interest free until December 31, 2023, at which time the remaining balance will convert to a 2-year term loan at an interest rate of 5% per annum. If the Company repays the loan prior to December 31, 2023, there will be loan forgiveness of 25% of the principal balance repaid, up to a maximum of Cdn$10,000.

5. Convertible Notes

(a) On April 4, 2018, the amount of $32,485 owed to related parties was converted to Series A convertible notes, which are unsecured, non-interest bearing, and due on April 4, 2023. These notes are convertible in whole or in part, at any time until maturity, to common shares of the Company at $0.0001 per share. The outstanding balance remaining at maturity shall bear interest at 12% per annum until fully paid. The Company evaluated the convertible notes for a beneficial conversion feature in accordance with ASC 470-20 Debt with Conversion and Other Options. The Company determined that the conversion price was below the closing stock price on the commitment date, and the convertible notes contained a beneficial conversion feature. The Company recognized the intrinsic value of the embedded beneficial conversion feature of $32,485 as additional paid-in capital and reduced the carrying value of the convertible note to $nil. The carrying value will be accreted over the term of the convertible notes up to their face value of $32,485. During the year ended September 30, 2018, the Company issued 31,745,000 shares of common stock upon the conversion of $3,175 of Series A convertible notes, which included 18,000,000 common shares to the President of the Company and 5,320,000 common shares to family members of the President of the Company. Upon conversion, the Company immediately recognized the related remaining debt discount of $3,112 as accretion expense. During the year ended September 30, 2019, the Company issued 3,900,000 shares of common stock upon the conversion of $390 of Series A convertible notes. Upon conversion, the Company immediately recognized the related remaining debt discount of $375 as accretion expense. During the year ended September 30, 2020, the Company issued 18,525,000 shares of common stock upon the conversion of $1,853 of Series A convertible notes. Upon conversion, the Company immediately recognized the related remaining debt discount of $1,670 as accretion expense. As at December 31, 2021, the carrying value of the convertible notes was $9,633 (September 30, 2021 – $7,834) and had an unamortized discount of $17,434 (September 30, 2021 - $19,233). During the three months ended December 31, 2021, the Company recorded accretion expense of $1,799 (2020 - $793).

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PHARMAGREEN BIOTECH INC.

Notes to the Condensed Consolidated Financial Statements

~~December~~March 31, ~~2021~~2022

(Expressed in U.S. dollars)

(~~unaudited~~Unaudited)

Convertible Notes (continued)

	(b)	On January 14, 2020, the Company entered into a convertible note with an unrelated party for $78,000, of which $3,000 was paid for financing costs, resulting in net proceeds to the Company of $75,000. The note is due on January 14, 2021, and bears interest on the unpaid principal balance at a rate of 12% per annum, which increases to 15% per annum upon default of the note. The note may be converted at any time after the date of issuance into shares of Company’s common stock at a conversion price equal to lower of: (i) 65% of the lowest trading price during the 20-trading day period prior to the issuance date; or (ii) 65% of the lowest trading price during the 20-trading day period prior to the conversion date. In connection with the issuance of the above convertible note, the Company evaluated the conversion option for derivative treatment under ASC 815-15, Derivatives and Hedging, and determined the note and conversion feature qualified as derivatives. The Company classified the conversion feature as a derivative liability at fair value. The initial fair value of the conversion feature was determined to be $76,330. The Company recognized the maximum intrinsic value of the embedded beneficial conversion feature of $74,500, resulting in a loss on change in fair value of derivative liabilities of $1,830, and reduced the carrying value of the convertible note to $500. The carrying value will be accreted over the term of the convertible note up to its face value of $78,000.
		The financing costs were netted against the convertible note and are being amortized over the term using the effective interest rate method. During the year ended September 30, 2020, the Company recognized accretion expense of $16,447. During the year ended September 30, 2021, the Company issued 2,600,000 shares of common stock upon the conversion of $18,923 of the convertible note and $4,500 of conversion fees. On January 14, 2021, the Company failed to repay the note upon maturity and recorded additional default principal of $53,007. As at December 31, 2021, the carrying value of the convertible note was $112,084 (September 30, 2021 - $112,084), and the fair value of the derivative liability was $132,829 (September 30, 2021 - $264,481).
	(c)	On January 22, 2020, the Company entered into a convertible note with an unrelated party for $78,750, of which $9,750 was paid directly to third parties for financing costs, resulting in proceeds to the Company of $69,000. The note is due on January 22, 2021, and bears interest on the unpaid principal balance at a rate of 10% per annum, payable in common stock, which increases to 24% per annum upon default of the note. The note may be converted at any time after the date of issuance into shares of Company’s common stock at a conversion price equal to 65% of the lowest trading price during the 20-trading day period ending on the latest complete trading day prior to the conversion date. In connection with the issuance of the above convertible note, the Company evaluated the conversion option for derivative treatment under ASC 815-15, Derivatives and Hedging, and determined the note and conversion feature qualified as derivatives. The Company classified the conversion feature as a derivative liability at fair value. The initial fair value of the conversion feature was determined to be $75,179. The Company recognized the maximum intrinsic value of the embedded beneficial conversion feature of $68,500, resulting in a loss on change in fair value of derivative liabilities of $6,679, and reduced the carrying value of the convertible note to $500. The carrying value will be accreted over the term of the convertible note up to its face value of $78,750.
		The financing costs were netted against the convertible note and are being amortized over the term using the effective interest rate method. During the year ended September 30, 2020, the Company defaulted on the convertible note and recognized accretion expense of $78,250. On January 22, 2021, the Company failed to repay the note upon maturity. As at December 31, 2021, the carrying value of the convertible note was $78,750 (September 30, 2021 - $78,750) and the fair value of the derivative liability was $104,900 (September 30, 2021 - $207,522).

	(d)	On March 11, 2022, the Company entered into a convertible note with an unrelated party for $30,000, with an advance on January 18, 2022 for the full amount. The note is due on January 18, 2023, and bears interest on the unpaid principal balance at a rate of 10% per annum. The note may be converted at any time after the date of issuance into shares of Company’s common stock at a conversion price equal to the closing price on the day of receiving the notice to convert. In connection with the issuance of the above convertible note, the Company evaluated the conversion option for derivative treatment under ASC 815-15, Derivatives and Hedging, and determined the note and conversion feature qualified as derivatives. The Company classified the conversion feature as a derivative liability at fair value. The initial fair value of the conversion feature was determined to be $15,011, which reduced the carrying value of the convertible note to $14,989. The carrying value will be accreted over the term of the convertible note up to its face value of $30,000.

		As at March 31, 2022, the carrying value of the convertible note was $15,718 (September 30, 2021 - $nil), had an unamortized discount of $14,282 (September 30, 2021 - $nil), and the fair value of the derivative liability was $10,133 (September 30, 2021 - $nil). During the six months ended March 31, 2022, the Company recorded accretion expense of $729.

12 Table of Contents

6.	Derivative Liabilities

	The embedded conversion option of the Company’s convertible notes described in Note 5 contain a conversion feature that qualifies for embedded derivative classification. The fair value of this liability will be re-measured at the end of every reporting period and the change in fair value will be reported in the statement of operations as a gain or loss on change in fair value of derivative liabilities. The table below sets forth a summary of changes in the fair value of the Company’s Level 3 financial liabilities:

	Balance$
Balance, September 30, 2021		472,003
Change in fair value of embedded conversion option		(234,274	)
Additions		15,011
Balance, December 31, 2021		237,729
Change in fair value of embedded conversion option		329,643
Balance, March 31, 2022		816,657

The Company uses Level 3 inputs for its valuation methodology for the embedded conversion option liabilities as their fair values were determined by using a binomial model based on various assumptions. Significant changes in any of these inputs in isolation would result in a significant change in the fair value measurement. As required, these are classified based on the lowest level of input that is significant to the fair value measurement. The following table shows the assumptions used in the calculations:

	Expectedvolatility			Risk-free ~~interestrate~~interest rate			Expected ~~dividendyield~~dividend yield			Expected life (in years)
As at December 31, 2021		150	%		0.39	%		0	%		0.75
As at March 11, 2022		149	%		1.22	%		0	%		0.86
As at March 31, 2022		101	%		1.63	%		0	%		0.52

7. Related Party Transactions

7.	Related Party Transactions

	(a)	As at March 31, 2022, the Company owed $603,681 (Cdn$753,911) (September 30, 2021 - $547,079 (Cdn$693,998)) to the President of the Company, which is non-interest bearing, unsecured, and due on demand. During the six months ended March 31, 2022, the Company incurred consulting fees of $47,495 (2021 - $47,384) to the President of the Company.

	(b)	As at March 31, 2022, the Company owed $108,854 (Cdn$135,943) (September 30, 2021 - $57,940 (Cdn$73,500)) to the father of the President of the Company, which is non-interest bearing, unsecured, and due on demand.

	(c)	As at March 31, 2022, the Company owed $27,385 (Cdn$34,200) (September 30, 2021 – $26,960 (Cdn$34,200)) to a company owned by the father of the President of the Company, which is included in accounts payable and accrued liabilities. The amount due is non-interest bearing, unsecured, and due on demand.

~~(a)~~12 AsTable ~~at December 31, 2021, the Company owed $565,608 (Cdn$715,868) (September 30, 2021 - $547,079 (Cdn$693,998)) to the President~~ of the Company, which is non-interest bearing, unsecured, and due on demand. During the three months ended December 31, 2021, the Company incurred consulting fees of $23,808 (2020 - $23,018) to the President of the Company. (b) As at December 31, 2021, the Company owed $108,072 (Cdn$136,783) (September 30, 2021 - $57,940 (Cdn$73,500)) to the father of the President of the Company, which is non-interest bearing, unsecured, and due on demand. (c) As at December 31, 2021, the Company owed $27,021 (Cdn$34,200) (September 30, 2021 – $26,960 (Cdn$34,200)) to a company owned by the father of the President of the Company, which is included in accounts payable and accrued liabilities. The amount due is non-interest bearing, unsecured, and due on demand. (d) As at December 31, 2021, the Company owed $469,870 (Cdn$594,697) (September 30, 2021 – $445,591 (Cdn$565,256)) to a company controlled by the Chief Financial Officer of WFS, which is included in accounts payable and accrued liabilities. The amount due is non-interest bearing, unsecured, and due on demand. During the three months ended December 31, 2021, the Company incurred consulting fees of $23,808 (2020 - $23,018) to the company controlled by the Chief Financial Officer of WFS.Contents

PHARMAGREEN BIOTECH INC.

Notes to the Condensed Consolidated Financial Statements

March 31, 2022

(Expressed in U.S. dollars)

(Unaudited)

Related Party Transactions(continued)

(d)

As at March 31, 2022, the Company owed $497,614 (Cdn$621,448) (September 30, 2021 – $445,591 (Cdn$565,256)) to a company controlled by the Chief Financial Officer of WFS, which is included in accounts payable and accrued liabilities. The amount due is non-interest bearing, unsecured, and due on demand. During the six months ended March 31, 2022, the Company incurred consulting fees of $47,495 (2021 - $47,384) to the company controlled by the Chief Financial Officer of WFS.

8.	Common Stock

	Six months ended March 31, 2022

	(a)	On October 21, 2021, the Company issued 4,000,000 shares of common stock at $0.025 per share for proceeds of $100,000. In connection with the financing, the Company incurred commission fees of $8,000.

	(b)	On January 19, 2022, the Company issued 650,000 units at $0.01 per unit for proceeds of $6,500. Each unit is comprised of one share of common stock and one share purchase warrant exercisable at $0.05 per share of common stock expiring 24 months from the date of issuance.

	(c)	On January 19, 2022, the Company issued 800,000 shares of common stock at $0.025 per share for proceeds of $20,000.

	(d)	On January 19, 2022, the Company issued 6,800,000 shares of common stock with a fair value of $136,000 for consultation communication and media services (Note 12(g)).

	(e)	On January 19, 2022, the Company issued 1,800,000 shares of common stock with a fair value of $36,000 for strategic and business development advisory services (Note 12(h)).

	(f)	On January 21, 2022, the Company issued 1,000,000 shares with a fair value of $19,700 for management consulting and strategic business advisory services (Note 12(f)).

	(g)	On February 10, 2022, the Company issued 1,000,000 shares of common stock with a fair value of $17,000 for market awareness services (Note 12(i)).

Preferred Stock

On October 13, 2020. The Company filed a certificate of amendment to its articles of incorporation, whereby it increased the authorized capital to 2,000,000,000 shares of common stock with a par value of $0.001 per share and 1,000,000 preferred shares with a par value of $0.001. On October 14, 2020, the Company designated 10,000 preferred shares as Series A Super Voting Preferred Stock.

The Series A Super Voting Preferred Stock has the following rights and restrictions:

Dividends - Initially, there will be no dividends due or payable on the Series A Super Voting Preferred Stock. Any future terms with respect to dividends shall be determined by the Board consistent with the Corporation’s Certificate of Incorporation. Any and all such future terms concerning dividends shall be reflected in an amendment to this Certificate, which the Board shall promptly file or cause to be filed.

Liquidation and Redemption Rights - Upon the occurrence of a Liquidation Event, the holders of Series A Super Voting Preferred Stock are entitled to receive net assets on a pro-rata basis. Each holder of Series A Super Voting Preferred Stock is entitled to receive ratably any dividends declared by the Board, if any, out of funds legally available for the payment of dividends.

Rank - All shares of the Series A Super Voting Preferred Stock shall rank (i) senior to the Corporation’s (A) Common Stock, par value $0.001 per share ( “Common Stock” ), and any other class or series of capital stock of the Corporation hereafter created, except as otherwise provided in clauses (ii) and (iii) of this Section 4, (ii) pari passu with any class or series of capital stock of the Corporation hereafter created and specifically ranking, by its terms, on par with the Series A Super Voting Preferred-Stock and (iii) junior to any class or series of capital stock of the Corporation hereafter created specifically ranking, by its terms, senior to the Series A Preferred Stock, in each case as to distribution of assets upon liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary.

Table of Contents

PHARMAGREEN BIOTECH INC.

Notes to the Condensed Consolidated Financial Statements

~~December~~March 31, ~~2021~~2022

(Expressed in U.S. dollars)

(~~unaudited~~Unaudited)

89. ~~Common~~Preferred Stock ~~Three months ended December 31, 2021~~(continued)

OnVoting ~~October~~Rights ~~21,~~- ~~2021~~If at least one share of Series A Super Voting Preferred Stock is issued and outstanding, then the ~~Company~~total aggregate issued 4shares of Series A Super Voting Preferred Stock at any given time,~~000~~ regardless of their number,~~000~~ shall have voting rights equal to 20 times the sum of: i) the total number of shares of ~~common~~Common stock atwhich ~~$0.025~~are ~~per~~issued ~~common~~and ~~stock~~outstanding ~~for~~at ~~proceeds~~the time of ~~$100~~voting,~~000.~~ Inplus ~~connection~~ii) ~~with~~ the ~~financing,~~total ~~the~~number ~~Company~~of ~~incurred~~shares ~~commission~~of ~~fees~~all Series of ~~$8,000~~Preferred stocks which are issued and outstanding at the time of voting. Each individual share of Series A Super Voting Preferred Stock shall have the voting rights equal to:

9. Preferred Stock On October 13, 2020. The Company filed a certificate of amendment to its articles of incorporation, whereby it increased the authorized capital to 2,000,000,000 shares of common stock with a par value of $0.001 per share and 1,000,000 preferred shares with a par value of $0.001. On October 14, 2020, the Company designated 10,000 preferred shares as Series A Super Voting Preferred Stock. The Series A Super Voting Preferred Stock has the following rights and restrictions: Dividends - Initially, there will be no dividends due or payable on the Series A Super Voting Preferred Stock. Any future terms with respect to dividends shall be determined by the Board consistent with the Corporation’s Certificate of Incorporation. Any and all such future terms concerning dividends shall be reflected in an amendment to this Certificate, which the Board shall promptly file or cause to be filed. Liquidation and Redemption Rights - Upon the occurrence of a Liquidation Event, the holders of Series A Super Voting Preferred Stock are entitled to receive net assets on a pro-rata basis. Each holder of Series A Super Voting Preferred Stock is entitled to receive ratably any dividends declared by the Board, if any, out of funds legally available for the payment of dividends. Rank - All shares of the Series A Super Voting Preferred Stock shall rank (i) senior to the Corporation’s (A) Common Stock, par value $0.001 per share ( “Common Stock” ), and any other class or series of capital stock of the Corporation hereafter created, except as otherwise provided in clauses (ii) and (iii) of this Section 4, (ii) pari passu with any class or series of capital stock of the Corporation hereafter created and specifically ranking, by its terms, on par with the Series A Super Voting Preferred-Stock and (iii) junior to any class or series of capital stock of the Corporation hereafter created specifically ranking, by its terms, senior to the Series A Preferred Stock, in each case as to distribution of assets upon liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary. Voting Rights - If at least one share of Series A Super Voting Preferred Stock is issued and outstanding, then the total aggregate issued shares of Series A Super Voting Preferred Stock at any given time, regardless of their number, shall have voting rights equal to 20 times the sum of: i) the total number of shares of Common stock which are issued and outstanding at the time of voting, plus ii) the total number of shares of all Series of Preferred stocks which are issued and outstanding at the time of voting. Each individual share of Series A Super Voting Preferred Stock shall have the voting rights equal to:

	·	[twenty times the sum of: {all shares of Common stock issued and outstanding at the time of voting + all shares of Series A, Series A and any newly designated Preferred stock issued and outstanding at the time of voting}] Divided by:

	·	[the number of shares of Series A Super Voting Preferred Stock issued and outstanding at the time of voting]

	With respect to all matters upon which stockholders are entitled to vote or to which stockholders are entitled to give consent, the holders of the outstanding shares of Series A Super Voting Preferred Stock shall vote together with the holders of Common Stock without regard to class, except as to those matters on which separate class voting is required by applicable law or the Certificate of Incorporation or Bylaws. Protective Provisions - So long as any shares of Series A Super Voting Preferred Stock are outstanding, the Corporation shall not, without first obtaining the unanimous written consent of the holders of Series A Super Voting Preferred Stock, alter or change the rights, preferences or privileges of the Series A Super Voting Preferred so as to affect adversely the holders of Series A Super Voting Preferred Stock. On October 14, 2020, the Company issued 10,000 shares of Series A Super Voting Preferred Stock to a Director of the Company for proceeds of $10. In connection with the issuance of the Series A Super Voting Preferred Stock, the Company evaluated whether the preferred stock should be classified as a liability based on the guidance under ASC 480, Distinguishing Liabilities from Equity. The Series A Super Voting Preferred Stock are not considered mandatorily redeemable, are not settleable in a variable number of shares, and do not contain any features embedded that required a separate assessment. As a result, the Company determined the Series A Super Voting Preferred Stock were not a liability and classified the preferred stock within equity in the amount of the aggregate par value of the issued shares of preferred stock, with any excess attributed to additional paid-in capital.

·10. ~~[twenty~~Share ~~times~~Purchase ~~the~~Warrants ~~sum~~The ~~of:~~following ~~{all~~table ~~shares~~summarizes ~~of Common stock issued and outstanding at~~ the ~~time~~continuity of ~~voting + all shares of Series A, Series A and any newly designated Preferred stock issued and outstanding at~~ the ~~time~~Company’s ofshare ~~voting}]~~purchase ~~Divided by~~warrants: ~~· [the number of shares of Series A Super Voting Preferred Stock issued and outstanding at the time of voting]~~

With respect to all matters upon which stockholders are entitled to vote or to which stockholders are entitled to give consent, the holders of the outstanding shares of Series A Super Voting Preferred Stock shall vote together with the holders of Common Stock without regard to class, except as to those matters on which separate class voting is required by applicable law or the Certificate of Incorporation or By-laws.

	Number of warrants		Weighted average exercise price $

Balance, September 30, 2021		37,986,786		0.05

Issued		650,000		0.05

Balance, March 31, 2022		38,636,786		0.05

Table of Contents

PHARMAGREEN BIOTECH INC.

Notes to the Condensed Consolidated Financial Statements

~~December~~March 31, ~~2021~~2022

(Expressed in U.S. dollars)

(~~unaudited~~Unaudited)

910. ~~Preferred~~Share ~~Stock~~Purchase Warrants (continued) Protective Provisions - So long as any shares of Series A Super Voting Preferred Stock are outstanding, the Corporation shall not, without first obtaining the unanimous written consent of the holders of Series A Super Voting Preferred Stock, alter or change the rights, preferences or privileges of the Series A Super Voting Preferred so as to affect adversely the holders of Series A Super Voting Preferred Stock. On October 14, 2020, the Company issued 10,000 shares of Series A Super Voting Preferred Stock to a Director of the Company for proceeds of $10. In connection with the issuance of the Series A Super Voting Preferred Stock, the Company evaluated whether the preferred stock should be classified as a liability based on the guidance under ASC 480, Distinguishing Liabilities from Equity. The Series A Super Voting Preferred Stock are not considered mandatorily redeemable, are not settleable in a variable number of shares, and do not contain any features embedded that required a separate assessment. As a result, the Company determined the Series A Super Voting Preferred Stock were not a liability and classified the preferred stock within equity in the amount of the aggregate par value of the issued shares of preferred stock, with any excess attributed to additional paid-in capital.

10. Share Purchase Warrants The following table summarizes the continuity of the Company’s share purchase warrants:

Number of warrants		Exercise price		Expiry date
	114,286		$0.55	July 16, 2022
	400,000		$0.05	December 2, 2022
	3,000,000		$0.05	December 11, 2022
	2,000,000		$0.05	December 30, 2022
	2,300,000		$0.05	January 11, 2023
	13,500,000		$0.05	January 30, 2023
	1,000,000		$0.05	February 16, 2023
	611,250		$0.05	March 1, 2023
	6,961,250		$0.05	May 14, 2023
	6,100,000		$0.05	August 25, 2023
	2,000,000		$0.05	September 24, 2023
	650,000		$0.05	January 19, 2024
	38,636,786

		Number ofwarrants				Weighted average exercise price$
Balance, September 30, 2021 and December 31, 2021			37,986,786				0.05

11.	Memorandum of Understanding

	On July 25 2021, the Company entered into a Memorandum of Understanding (“MOU”) to acquire all the assets and cannabis business operation, including 12 acres of property, structure and cannabis licenses, existing sales channels and distribution networks, from a private company situated in Northern California. Upon reaching a definitive agreement, the Company intends to further develop a state- of-the-art flowering greenhouse of approximately 12,000 square feet or the maximum allowed by California State and Regional County. The acquisition price is $2,400,000 to be paid through a combination of cash and shares. The Company also has an option from the seller to acquire an additional 120 acres or more of land for business expansion and development. As at March 31, 2022, the Company has advanced $68,100 (September 30, 2021 - $nil) under the MOU, which will be applied against the final purchase price upon completion of a definitive agreement. This amount has been included in prepaid expenses and deposits. The Company currently lacks funds with which to consummate the contemplated transaction and has not negotiated a definitive agreement with respect to the contemplated transaction. Thus, there is no assurance that the Company will ever enter into, and consummate, a definitive agreement with respect to the contemplated transaction.

Number of warrants		Exercise price		Expiry date
	114,286	$	0.55	July 16, 2022
	400,000	$	0.05	December 2, 2022
	3,000,000	$	0.05	December 11, 2022
	2,000,000	$	0.05	December 30, 2022
	2,300,000	$	0.05	January 11, 2023
	13,500,000	$	0.05	January 30, 2023
	1,000,000	$	0.05	February 16, 2023
	611,250	$	0.05	March 1, 2023
	6,961,250	$	0.05	May 14, 2023
	6,100,000	$	0.05	August 25, 2023
	2,000,000	$	0.05	September 24, 2023
	37,986,786

12.

Commitments and Contingency

(a)

Effective December 11, 2017, the Company entered into a binding Letter of Intent (“LOI”) with Alliance Growers Corp. (“Alliance”), whereby the Company will build a new cannabis biotech complex located in Deroche, British Columbia, through their subsidiary, 115BC. On January 25, 2019, the Company’s subsidiaries WFS and 115BC entered into an option agreement with Alliance, which superseded the LOI entered into on December 11, 2017. The option agreement grants an option to Alliance to purchase 10% equity interest in 115BC for Cdn$1,350,000 and previously granted a second option to purchase an additional 20% equity interest in 115BC for funding of 30% of the total construction and equipment costs for the biotech complex less Cdn$1,350,000. On January 25, 2019, 115BC issued 8 shares of common stock to Alliance upon exercise of the first option for consideration of $1,018,182 (Cdn$1,350,008), which was recognized as additional paid-in capital. The second option expired unexercised. As at March 31, 2022, the Company received advances of $60,055 (Cdn$75,000) (September 30, 2021 - $59,122 (Cdn$75,000)) from Alliance, which is unsecured, non-interest bearing, and due on demand.

Table of Contents

PHARMAGREEN BIOTECH INC.

Notes to the Condensed Consolidated Financial Statements

~~December~~March 31, ~~2021~~2022

(Expressed in U.S. dollars)

(~~unaudited~~Unaudited)

1112. ~~Memorandum~~Commitments ofand ~~Understanding~~Contingency (continued)

(b) On ~~July~~November 2522, ~~2021~~2019, the Company entered into an equity purchase agreement with an unrelated party, whereby the third party is to purchase up to $10,000,000 of the Company’s common stock. The equity purchase agreement is effective for a ~~Memorandum~~term of ~~Understanding~~2 years from the effective date of the registration statement. The purchase price would be 85% of the market price. In return, the Company issued a promissory note of $40,000 (~~“MOU”~~Refer to Note 4(a)). In addition, the Company is required to ~~acquire~~pay ~~all~~an additional commitment fee of $10,000, of which $5,000 was paid upon signing the ~~assets~~term sheet and ~~cannabis~~the ~~business~~remaining ~~operation~~$5,000 is due upon completion of the first tranche of the financing. (c) Effective May 14, 2021, the Company entered into a Software as a Service Agreement with Novation Solutions Inc. (“DealMaker”) to effect the Company’s planned Regulation A offering, including 12the ~~acres~~set-up of ~~property~~an automated tracking, ~~structure~~signing, and ~~cannabis~~reconciliation ~~licenses~~portal. The Company will pay DealMaker $3,000 ~~existing~~upon ~~sales~~signing ~~channels~~the ~~and~~agreement, ~~distribution~~$7,000 ~~networks~~30 days prior to launching the portal, ~~from~~and a ~~private~~post ~~company~~launch ~~situated~~monthly infee ~~Northern~~of ~~California~~$1,000. ~~Upon~~The ~~reaching~~monthly afee ~~definitive~~will ~~agreement~~automatically renew each month for the shorter of the duration of the offering period, or one year. (d) Effective August 23, 2021, the Company ~~intends~~entered into an infomercial production and broadcast agreement with New to ~~further~~the ~~develop~~Street aGroup ~~state-~~LLC. Pursuant to the terms of- the~~-art~~ ~~flowering~~agreement, ~~greenhouse~~New ofto ~~approximately~~the 12Street Group LLC will provide investor relations and consulting services in consideration for 6,000,000 ~~square~~shares ~~feet~~of orcommon ~~the~~stock ~~maximum~~for ~~allowed~~the byfirst ~~California~~3 ~~State~~months and, ~~Regional~~at ~~County.~~the ~~The~~option ~~acquisition~~of ~~price~~the isCompany, at $240,~~400,~~000 toper month for a further 9 months, which can be paid ~~through~~in acash ~~combination~~or shares of ~~cash~~common ~~and~~stock at the Company’s discretion. On September 22, 2021, the Company issued 6,000,000 shares of common stock with a fair value of $210,000. ~~The~~During the six months ended March 31, 2022, the Company ~~also~~recognized consulting fees of $210,000 pursuant to the agreement. As at March 31, 2021, the Company has anrecognized ~~option~~$nil ~~from~~(September 30, 2021 – $188,137) in prepaid expenses and deposits. (e) Effective August 27, 2021, the ~~seller~~Company entered into a consulting agreement for investor relations and consulting services for a period of 6 months. Pursuant to ~~acquire~~the anagreement, ~~additional~~the ~~120~~Company ~~acres~~agreed orto ~~more~~issue shares of ~~land~~common ~~for~~stock ~~business~~of ~~expansion~~the ~~and~~Company ~~development~~with a fair value of $100,000. On September 22, 2021, the Company issued 4,340,000 shares of common stock with a fair value of $147,560. During the six months ended March 31, 2022, the Company recognized consulting fees of $95,763 pursuant to the agreement. As at ~~December~~March 31, 2021, the Company has ~~advanced~~recognized $33nil (September 30,~~100~~ ~~under~~2021 – $95,763) in prepaid expenses and deposits. (f) On January 12, 2022, the ~~MOU~~Company entered into a consulting agreement with a six-month term. Pursuant to the agreement, ~~which~~the ~~will~~Company beagreed ~~applied~~to ~~against~~issue 1,000,000 shares of common stock in exchange for management consulting and strategic business advisory services. On January 21, 2022, the ~~final~~Company ~~purchase~~issued ~~price~~a ~~upon~~total ~~completion~~of 1,000,000 shares of common stock with a ~~definitive~~fair value of $19,700 pursuant to the agreement (Note 8(f)). ~~This~~As ~~amount~~at ~~has~~March ~~been~~31, ~~included~~2022, the Company recognized $11,210 (September 30, 2021 - $nil) in prepaid expenses and deposits. ~~The~~During the six months ended March 31, 2022, the Company ~~currently~~recognized ~~lacks~~consulting ~~funds~~fees of $8,490 (2021 - $nil) pursuant to the agreement. (g) On January 18, 2022, the Company entered into a consulting agreement with ~~which~~a six-month term. Pursuant to ~~consummate~~the agreement, the ~~contemplated~~Company ~~transaction~~agreed to issue shares of common stock of the Company with a fair value of Cdn$100,000 in exchange for consultation communication and ~~has~~media ~~not~~services. ~~negotiated~~In addition, the Company may choose to pay a ~~definitive~~bonus if certain predetermine milestones is met during the term of the agreement. On January 19, 2022, the Company issued a total of 6,800,000 shares of common stock with ~~respect~~a fair value of $136,000 pursuant to the ~~contemplated~~agreement ~~transaction~~(Note 8(d)). ~~Thus~~As at March 31, ~~there~~2022, isthe noCompany ~~assurance~~recognized ~~that~~$81,901 (September 30, 2021 - $nil) in prepaid expenses and deposits. During the six months ended March 31, 2022, the Company ~~will~~recognized ~~ever~~consulting ~~enter~~fees of $54,099 (2021 - $nil) pursuant to the agreement. (h) On January 18, 2022, the Company entered into a consulting agreement with a six-month term. Pursuant to the agreement, the Company agreed to issue 1,800,000 shares of common stock in exchange for strategic and ~~consummate~~business development advisory services. On January 19, 2022, the Company issued a ~~definitive~~total ~~agreement~~of 1,800,000 shares of common stock with ~~respect~~a fair value of $36,000 pursuant to the ~~contemplated~~agreement ~~transaction~~(Note 8(e)). As at March 31, 2022, the Company recognized $21,680 (September 30, 2021 - $nil) in prepaid expenses and deposits. During the six months ended March 31, 2022, the Company recognized consulting fees of $14,320 (2021 - $nil) pursuant to the agreement.

~~12.~~16 ~~Commitments~~Table of Contents

~~(a)~~PHARMAGREEN ~~Effective~~BIOTECH ~~December 11, 2017, the Company entered into a binding Letter of Intent (“LOI”) with Alliance Growers Corp~~INC. (“Alliance”), whereby the Company will build a new cannabis biotech complex located in Deroche, British Columbia, through their subsidiary, 115BC. On January 25, 2019, the Company’s subsidiaries WFS and 115BC entered into an option agreement with Alliance, which superseded the LOI entered into on December 11, 2017. The option agreement grants an option to Alliance to purchase 10% equity interest in 115BC for Cdn$1,350,000 and previously granted a second option to purchase an additional 20% equity interest in 115BC for funding of 30% of the total construction and equipment costs for the biotech complex less Cdn$1,350,000. On January 25, 2019, 115BC issued 8 shares of common stock to Alliance upon exercise of the first option for consideration of $1,018,182 (Cdn$1,350,008), which was recognized as additional paid-in capital. The second option expired unexercised. As at December 31, 2021, the Company received advances of $59,258 (Cdn$75,000) (September 30, 2021 - $59,122 (Cdn$75,000)) from Alliance, which is unsecured, non-interest bearing, and due on demand. (b) On November 22, 2019, the Company entered into an equity purchase agreement with an unrelated party, whereby the third party is to purchase up to $10,000,000 of the Company’s common stock. The equity purchase agreement is effective for a term of 2 years from the effective date of the registration statement. The purchase price would be 85% of the market price. In return, the Company issued a promissory note of $40,000 (Refer to Note 4(a)). In addition, the third party is required to pay an additional commitment fee of $10,000, of which $5,000 was paid upon signing the term sheet and the remaining $5,000 is due upon completion of the first tranche of the financing. (c) Effective May 14, 2021, the Company entered into a Software as a Service Agreement with Novation Solutions Inc. (“DealMaker”) to effect the Company’s planned Regulation A offering, including the set-up of an automated tracking, signing, and reconciliation portal.The Company will pay DealMaker $3,000 upon signing the agreement, $7,000 30 days prior to launching the portal, and a post launch monthly fee of $1,000. (d) Effective August 23, 2021, the Company entered into an infomercial production and broadcast agreement with New to the Street Group LLC. Pursuant to the terms of the agreement, New to the Street Group LLC will provide investor relations and consulting services for a period of 12 months. Pursuant to the agreement, the Company agreed to pay New to the Street Group LLC 6,000,000 shares of common stock for the first 3 months of the term, and $40,000 per month for the remaining 9 months, which can be paid in cash or shares of common stock at the Company’s discretion. On September 22, 2021, the Company issued 6,000,000 shares of common stock with a fair value of $210,000. (e) Effective August 27, 2021, the Company entered into a consulting agreement for investor relations and consulting services for a period of 6 months. Pursuant to the agreement, the Company agreed to issue shares of common stock of the Company with a fair value of $100,000. On September 22, 2021, the Company issued 4,340,000 shares of common stock with a fair value of $147,560.

~~13.~~Notes ~~Subsequent~~to ~~Events~~the Condensed Consolidated Financial Statements

~~(a)~~March ~~On January 12~~31, 2022, the Company entered into a consulting agreement with a six month term. Pursuant to the agreement, the Company will issue 1,000,000 shares of common stock in exchange for management consulting and strategic business advisory services. On January 21, 2022, the Company issued a total of 1,000,000 shares of common stock pursuant to the agreement. (b) On January 18, 2022, the Company entered into a consulting agreement with a six month term. Pursuant to the agreement, the Company will issue shares of common stock of the Company with a fair value of Cdn$100,000 in exchange for consultation communication and media services. In addition, the Company may choose to pay a bonus if certain predetermine milestones is met during the term of the agreement. On January 19, 2022, the Company issued a total of 6,800,000 shares of common stock pursuant to the agreement. (c) On January 18, 2022, the Company entered into a consulting agreement with a six month term. Pursuant to the agreement, the Company will issue 1,800,000 shares of common stock in exchange for strategic and business development advisory services. On January 19, 2022, the Company issued a total of 1,800,000 shares of common stock pursuant to the agreement. (d) On January 19, 2022, the Company issued 650,000 units at $0.01 per unit for proceeds of $6,500. Each unit is comprised of one share of common stock and one share purchase warrant exercisable at $0.05 per share of common stock expiring 24 months from the date of issuance. (e) On January 19, 2022, the Company issued 800,000 shares of common stock at $0.025 per share for proceeds of $20,000. (f) On February 7, 2022, the Company entered into a consulting agreement with a six month term. Pursuant to the agreement, the Company will issue 1,000,000 shares of common stock in exchange for market awareness services. On February 10, 2022, the Company issued a total of 1,000,000 shares of common stock pursuant to the agreement.

15(Expressed ~~Table~~in ofU.S. ~~Contents~~dollars)

(Unaudited)

12.

Commitments and Contingency (continued)

	(i)	On February 7, 2022, the Company entered into a consulting agreement with a six-month term. Pursuant to the agreement, the Company agreed to issue 1,000,000 shares of common stock in exchange for market awareness services. On February 10, 2022, the Company issued a total of 1,000,000 shares of common stock with a fair value of $17,000 pursuant to the agreement (Note 8(g)). As at March 31, 2022, the Company recognized $12,398 (September 30, 2021 - $nil) in prepaid expenses and deposits. During the six months ended March 31, 2022, the Company recognized consulting fees of $4,602 (2021 - $nil) pursuant to the agreement.

	(j)	On March 10, 2021, a noteholder filed a Notice of Motion for Summary Judgement in Lieu of Complaint (the “Notice”) with the State of New York Supreme Court, County of New York for $40,504 plus interest at the rate of 10% per annum from January 6, 2021, plus costs. On July 31, 2021, the Notice was dismissed without prejudice by the State of New York Supreme Court. On September 23, 2021, the noteholder filed a new Notice of Motion for Summary Judgement in Lieu of Complaint with the State of New York Supreme Court, County of New York for $44,504 plus interest at the rate of 10% per annum from January 6, 2021, plus costs. The Company believes that the claim has no merit and intends to defend its position vigorously.

13.	Subsequent Event

	On May 3, 2022, the Company issued 7,000,000 shares of common stock for consulting services.

Table of Contents

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements

This section of the Form 10-Q includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our predictions.

Company History Overview

Pharmagreen Biotech Inc. (“the Company”) was incorporated under the laws of Nevada, U.S. on November 26, 2007 under the name Azure International, Inc. On October 30, 2008 and effective as of the same date, the Company filed Articles of Merger with the Secretary of the State of Nevada, to effect a merger by and between Air Transport Group Holdings, Inc., a Nevada corporation incorporated on October 16, 2008, and Azure International, Inc. As a result of the merger, the Company changed its name to Air Transport Group Holdings, Inc.

On April 12, 2018, the Company entered into a share exchange agreement with WFS Pharmagreen Inc., a private company incorporated under the laws of British Columbia, Canada, whereby the Company acquired all of the issued and outstanding shares of WFS Pharmagreen Inc. in exchange for 37,704,500 shares of common stock of the Company. Upon completion of this transaction, the shareholders of WFS Pharmagreen hold 95.5% of voting control of the Company.

Immediately prior to closing of the Agreement, the majority shareholder of the Company was also the majority shareholder of WFS. As a result of the common ownership upon closing of the transaction, the acquisition was considered a common-control transaction and was outside the scope of the business combination guidance in ASC 805-50. The entities are deemed to be under common control as of February 27, 2018, which was the date that the majority shareholder acquired control of the Company and, therefore, held control over both companies. On May 2, 2018, the Share Exchange Agreement was effected. In connection with this transaction, the Company changed its name on May 8, 2018 to Pharmagreen Biotech Inc. and changed its year end from April 30th to September 30th.

Our principal executive offices are temporarily located at 2987 Blackbear Court, Coquitlam, British Columbia, Canada. Our telephone number is (702-803-9404). Our internet address is www.pharmagreen.ca.

On August 7, 2020, our company (including ~~our~~ subsidiaries) filed voluntary petitions under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Nevada, Case No. 20-13886.

We expect to continue to incur losses for at least the next 12 months. We do not expect to generate revenue that is sufficient to cover our expenses, and we do not have sufficient cash and cash equivalents to execute our plan of operations for at least the next twelve months. We will need to obtain additional financing, through equity security sales, debt instruments and private financing, to conduct our day-to-day operations, and to fully execute our business plan. We plan to raise the capital necessary to fund our business through the sale of equity securities, debt instruments or private financing. These factors raise substantial doubt upon the Company’s ability to continue as a going concern. This report does not reflect all the adjustments that may be necessary if the Company is unable to continue as a going concern.

1618 Table of Contents

Our Current Business

Pharmagreen Biotech Inc. (the “Company”) was incorporated under the laws of the State of Nevada on November 26, 2007. The Company is headquartered in Coquitlam, British Columbia. The Company’s mission is to advance the technology of tissue culture science and to provide the highest quality 100% germ free, disease free and all genetically the same plantlets of high CBD hemp and other flora and offering full spectrum DNA testing for plant identification, live genetics preservation using low temperature storage for various cannabis and horticulture plants; extraction of botanical oils mainly CBD oil, and to deliver laboratory based services to the North American high CBD hemp, Cannabis and agriculture sectors.

Management cannot provide assurance that the Company will ultimately achieve profitable operations or become cash flow positive, or raise additional debt and/or equity capital. However, if the Company is unable to raise additional capital in the near future, due to the Company’s liquidity problems, management expects that the Company will need to curtail operations, liquidate assets, seek additional capital on less favourable terms and/or pursue other remedial measures. ~~The~~These ~~condensed~~ consolidated financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

The Company has decided that immediate business development in the hemp ~~and~~industry ~~cannabis industries~~ provides a much greater opportunity in the United States. The project at Deroche has been placed on hold while the Company moves forward to build out a similar infrastructure planned for Deroche within the United States.

On July 25, 2021, the Company entered into a Memorandum of Understanding to acquire all the assets and cannabis business ~~operation~~operations (includes 12 acres property, structure and cannabis licenses, existing sales channels and distribution networks) from a private company situated in Northern California. Upon reaching a definitive agreement, the Company intends to further develop a state-of-the-art flowering greenhouse of approximately 12,000 square feet or the maximum allowed by California State and Regional County. The acquisition price is $2.4 million to be paid through a combination of cash and shares. The Company also has an option from the seller to acquire an additional 120 acres or more of land for business expansion and development. The Company currently lacks funds with which to consummate the contemplated transaction and has not negotiated a definitive agreement with respect to the contemplated transaction. Thus, there is no assurance that the Company will ever enter into, and consummate, a definitive agreement with respect to the contemplated transaction.

The ~~recent~~ outbreak of the novel coronavirus COVID-19, which was declared a pandemic by the World Health Organization on March 11, 2020, has led to adverse impacts on the U.S. and global economies, disruptions of financial markets, and created uncertainty regarding potential impacts to the Company’s supply chain, operations, and customer demand. The COVID-19 pandemic has impacted and could further impact the Company’s operations and the operations of the Company’s suppliers and vendors as a result of quarantines, facility closures, and travel and logistics restrictions. Specifically, the Company attributes the pandemic to a delay in a planned financing which was to be used for the construction of the biotech complex, resulting in an impairment of the capitalized construction-in-progress at September 30, 2020. The extent to which the COVID-19 pandemic further impacts the Company’s business, results of operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to the duration, spread, severity, and impact of the COVID-19 pandemic, the effects of the COVID-19 pandemic on the Company’s customers, suppliers, and vendors and the remedial actions and stimulus measures adopted by local and federal governments, and to what extent normal economic and operating conditions can resume. The management team is closely following the progression of COVID-19 and its ~~potential~~ impact on the Company. Even after the COVID-19 pandemic has subsided, the Company may continue to experience adverse impacts to its business as a result of any economic recession or depression that has occurred or may occur in the future. Therefore, the Company cannot reasonably estimate the impact at this time our business, liquidity, capital resources, and financial results.

Capital Resources and Liquidity

Our auditors have issued a “going concern” opinion, meaning that there is substantial doubt if we can continue as an on-going business unless we obtain additional capital. No substantial revenues from our planned business model are anticipated until we have completed financing the Company. As at ~~December~~March 31, ~~2021~~2022, the Company has a working capital deficit of $12,~~543~~358,~~202~~624 and an accumulated deficit of $1112,~~680~~716,~~693~~434. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

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We need to seek capital from resources such as the sale of private placements in the Company’s common stock or debt financing, which may not even be available to the Company. However, if such financing were available, because we are a, early-stage company with no or limited operations to date, it would likely have to pay additional costs associated with such financing and in the case of high risk loans be subject to an above market interest rate. At such time these funds are required, management would evaluate the terms of such financing. If the Company cannot raise additional proceeds via such financing, it may be required to cease business operations.

As of ~~December~~March 31, ~~2021~~2022, we had $103,~~474~~045 in cash, amounts receivable of $6270, and prepaid expenses and deposits of $~~347~~195,~~217~~288, as compared to $25,300 in cash, amounts receivable of $290 and prepaid expenses and deposits of $347,491 as of September 30, 2021. As of the date of this Form 10-Q, the current funds available to the Company will not be sufficient to fund the expenses related to maintaining our planned operations. We are in the process of seeking additional equity financing in the form of private placements, loans and registration statements to fund our intended business operations.

Management believes that if subsequent private placements are successful or we are successful in raising funds from registered securities, we will generate sales revenue within twelve months thereof. However, additional equity financing may not be available to us on acceptable terms or at all, and thus we could fail to satisfy our future cash requirements.

We do not anticipate researching any further products nor the purchase or sale of any significant equipment. We also do not expect any significant additions to the number of employees.

Results of Operations

Three Months Ended ~~December~~March 31, ~~2021~~2022

We had no revenue for the three months ended ~~December~~March 31, ~~2021~~2022 and ~~2020~~2021.

Operating expenses in the three months ended ~~December~~March 31, ~~2021~~2022 were $~~203~~458,~~660~~860 as compared to operating expenses for the three months ended ~~December~~March 31, ~~2020~~2021 of $~~101~~136,~~624~~949. The net increase in expenses during the current period is mainly due to an increase in consulting fees from $5056,~~140~~053 in ~~2020~~2021 to $~~139~~424,~~528~~363 in ~~2021~~2022, which was mainly related to an infomercial production agreement entered into with New to the Street Group LLC on May 13, 2021. and August 23, 2021.

We incurred a comprehensive ~~income~~loss of $161,~~261~~053,211 during the three months ended ~~December~~March 31, ~~2021~~2022, compared to a comprehensive loss of $~~459~~3,~~564~~154,134 during the three months ended ~~December~~March 31, ~~2020~~2021. The decrease in comprehensive loss in ~~2021~~2022 was mainly attributable to a change in fair value of derivative liabilities from a loss of $~~674~~2,~~912~~509,926 in ~~2020~~2021 to a ~~gain~~loss of $~~234~~563,~~274~~917 in ~~2021~~2022, as the Company had significantly more convertible debt in the prior year which resulted in more fluctuations of the derivative liability due to the floating rates attached to the conversion rights to the convertible debt.

During the three months ended ~~December~~March 31, ~~2021~~2022 and ~~2020~~2021, we incurred a net ~~income~~loss of $181,~~724~~035,741 and ~~a net loss of~~ $~~417~~3,~~110~~141,434 respectively.

18Six ~~Table~~Months ofEnded ~~Contents~~March 31, 2022

We had no revenue for the six months ended March 31, 2022 and 2021.

Operating expenses in the six months ended March 31, 2022 were $662,520 as compared to operating expenses for the six months ended March 31, 2021 of $238,573. The net increase in expenses during the current period is mainly due to an increase in consulting fees from $106,193 in 2021 to $563,891 in 2022, which was mainly related to infomercial production agreements entered into with New to the Street Group LLC on May 13, 2021 and August 23, 2021.

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We incurred a comprehensive loss of $1,036,950 during the six months ended March 31, 2022, compared to a comprehensive loss of $3,613,698 during the six months ended March 31, 2021. The decrease in comprehensive loss in 2022 was mainly attributable to a change in fair value of derivative liabilities from a loss of $3,184,838 in 2021 to a loss of $329,643 in 2022, as we had significantly more convertible debt in the prior year which resulted in more fluctuations of the derivative liability due to the floating rates attached to the conversion rights to the convertible debt and a decrease in interest and finance costs from $663,037 in 2021 to $20,162 in 2022 due to a lower overall face value of outstanding convertible debentures in the current period compared to last year. The decreases were offset by a gain of $613,526 for a settlement of convertible notes in 2021 that was a one-time settlement.

During the six months ended March 31, 2022 and 2021, we incurred a net loss of $1,017,017 and $3,558,544 respectively.

Off-balance Sheet Arrangements

The Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect or change on the company’s financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. The term “off-balance sheet arrangement” generally means any transaction, agreement or other contractual arrangement to which an entity unconsolidated with the company is a party, under which the company has (i) any obligation arising under a guarantee contract, derivative instrument or variable interest; or (ii) a retained or contingent interest in assets transferred to such entity or similar arrangement that serves as credit, liquidity or market risk support for such assets.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time period specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is accumulated and communicated to management including our principal executive officer and principal financial officer as appropriate, to allow timely decisions regarding required disclosure.

In connection with this quarterly report, as required by Rule 15d-15 under the Securities Exchange Act of 1934, we have carried out an evaluation of the effectiveness of the design and operation of our company’s disclosure controls and procedures. This evaluation was carried out under the supervision and with the participation of our company’s management, including our company’s principal executive officer and principal financial officer. Based upon that evaluation, our company’s principal executive officer and principal financial officer concluded that as of ~~December~~March 31, ~~2021~~2022 our disclosure controls and procedures were not effective due to the existence of material weaknesses in our internal controls over financial reporting.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) or 15d-15(f)) during the quarter ended ~~December~~March 31, ~~2021~~2022 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

Saturna Group Chartered Professional Accountants LLP, our independent auditors, are not required to and have not performed an assessment of our internal controls over financial reporting.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

On July 22, 2020, the Company received a preliminary statement of claim from a convertible note holder for failure of the Company to deliver shares of common stock upon receipt of notices of conversion. Pursuant to the claim, the plaintiff has requested receipt of all shares of common stock requested in the notices of conversion, and also damages in an amount to be determined at trial but in any event in excess of principal amount of $78,000 for a total sum of $180,000, including without limitation the balance of any portion of the convertible note that ultimately is not converted into shares of common stock, along with default interest, liquidated damages, and damages as provided for in the convertible note.

On October 9, 2020, a stay order was lifted by a United States District Judge of the United States District Court for the Southern District of New York, on an action filed by a lender. This effectively removed the Company from its Chapter 11 bankruptcy proceedings and protection. The lifting of the stay order further allowed the convertible note holders to convert thereby increasing the number of shares issued and outstanding.

On October 29, 2020 a second note holder filed a statement of claim. This lender, as of December 24, 2020, has completely converted the full amount of the note of $100,000, interest of $8,690 and penalty and fees aggregating $19,500.

Also, as mentioned above, the Company filed voluntary petitions for reorganization under chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Nevada on August 7, 2020. The Company’s filing with the Court was designated as Case No. 20-13886. During the pendency of this matter, the Company has also filed motions with the Court seeking authorization to continue to operate its businesses as “debtors-in-possession” under the jurisdiction of the Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Court. Due to the stay order mentioned, the Company did not file a plan of reorganization with the Court for approval.

On March 12, 2021, the Company entered into a settlement agreement with the convertible noteholder that had filed a preliminary statement of claim on July 22, 2020. Pursuant to the agreement the Company was required to honor various conversion notices and the noteholder agreed to wave all principal, interest and penalties incurred.

On March 10, 2021, the promissory note holder referred to in Note 4 (a) of the accompanying consolidated financial statements filed a Notice of Motion For Summary Judgement in Lieu of Complaint (the “Notice”) with the State of New York Supreme Court, County of New York for $40,504 plus interest at the rate of 10% per annum from January 6, 2021 plus costs. On July 31, 2021, the Notice was dismissed without prejudice by the State of New York Supreme Court. On October 20, 2021, the promissory note holder filed an Amended Notice of Motion for Summary Judgment in Lieu of Complaint with the State of New York Supreme Court, County of New York for $44,504 plus interest at the rate of 10% per annum from January 6, 2021, plus costs and attorney fees. The Company believes the claim is without merit, as evidenced by the initial claim being dismissed by the same courts, and will vigorously defend its position.

Except as mentioned in the preceding paragraphs, there are no pending legal proceedings to which the Company is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or stockholder is a party adverse to the Company or has a material interest adverse to the Company.

Item 1A. Risk Factors.

As a “smaller reporting company,” as defined in Rule 12b-2 of the Exchange Act, we are not required to provide the information called for by this Item.

Item 2. Unregistered Sales of Securities and Use of Proceeds.

None

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Item 3. Defaults Upon Senior Securities.

The commencement of the Chapter 11 Cases discussed above constituted an event of default under certain of the Company’s debt instruments, including various convertible notes, which resulted in automatic acceleration of the Company’s obligations under such debt instruments. Any efforts to enforce payment obligations under the aforementioned debt instruments are automatically stayed as a result of the filing of the Chapter 11 Cases and the creditors’ rights of enforcement in respect of the debt instruments are subject to the applicable provisions of the Bankruptcy Code.

Item 4. Mine Safety Disclosure.

N/A

Item 5. Other Information.

None

2023 Table of Contents

Item 6. Exhibits.

The following documents are filed as a part of this report or are incorporated by reference to previous filings, if so indicated:

ExhibitNumber		Description
(3)		Articles of Incorporation; and (ii) Bylaws
3.1		Articles of Incorporation and Bylaws dated November 26, 2007, as previously filed with the SEC on March 20, 2019.
3.2		Articles of Merger dated, October 30, 2008 (Azure International, Inc./ Air Transport Group Holding, Inc. as previously filed with the SEC on March 20, 2019.
3.3		Securities Exchange Agreement dated April 12, 2018, by and among Air Transport Group Holdings Inc. and WFS Pharmagreen Inc., as previously filed with the SEC on March 20, 2019.
3.4		Articles of Incorporation and Bylaws dated December 19, 2013 for WFS Pharmagreen Inc. as previously filed with the SEC on March 20, 2019.
3.5		Articles of Incorporation and Bylaws dated March 2, 2018 for BC1155097 as previously filed with the SEC on March 20, 2019.
3.6		Articles of Incorporation and Bylaws dated August 2, 2018 for BC1174505 as previously filed with the SEC on March 20, 2019.
(10)		Material Contracts
10.1		Option Agreement with Alliance Growers January 25, 2019 as previously filed with the SEC on March 20, 2019.
10.2		Equity Purchase Agreement with Oscaleta Partners LLC as previously filed with the SEC on December 2, 2019.
10.3		Registration Rights Agreement with Oscaleta Partners LLC as previously filed with the SEC on December 2, 2019.
(31)		Rule 13a-14(a)/15d-14(a) Certifications
31.1		Certification of Chief Executive Officer Pursuant to Rule 13a–14(a) or 15d-14(a) of the Securities Exchange Act of 1934.
31.2		Certification of Principle Financial Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934.*
(32)		Section 1350 Certifications
32.1		Certification of Chief Executive Officer under Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification of Principle Financial Officer under Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
101.INS		Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).
101.SCH		Inline XBRL Taxonomy Extension Schema Document.
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB		Inline XBRL Taxonomy Extension Labels Linkbase Document.
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).

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(31)		Rule 13a-14(a)/15d-14(a) Certifications

31.1		Certification of Chief Executive Officer Pursuant to Rule 13a–14(a) or 15d-14(a) of the Securities Exchange Act of 1934.

31.2		Certification of Principle Financial Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934.*

(32)		Section 1350 Certifications

32.1		Certification of Chief Executive Officer under Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of Principle Financial Officer under Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**

101.INS		Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document).

101.SCH		Inline XBRL Taxonomy Extension Schema Document.

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB		Inline XBRL Taxonomy Extension Labels Linkbase Document.

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).

* Included in Exhibit 31.1

** Included in Exhibit 32.1

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SIGNATURES*

Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Pharmagreen Biotech Inc.
Dated February 22, 2022	By:	/s/ Peter Wojcik
Dated May 16, 2022	By:	/s/ Peter Wojcik
		Peter Wojcik
		President and DirectorPrincipal Executive Officer

	By:	/s/ Terry Kwan
		Terry Kwan
		Principal Accounting Officer

2226

Filing Compare · Pharmagreen Biotech Inc.