x200B; Akanda Corp. Unaudited Condensed Consolidated Statements of Financial Position (Expressed in US Dollars) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

0.040.010.100.132683544413129212268354440.03000.030013129212

Unaudited Condensed Consolidated Statements of Financial Position

(Expressed in US Dollars)

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

Unaudited Condensed Consolidated Statements of Loss and Comprehensive Loss

(Expressed in US Dollars)

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

Unaudited Condensed Consolidated Statements of Shareholders' Equity (Deficit)

(Expressed in US Dollars)

For the Six Months Ended June 30, 2022

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

Unaudited Condensed Consolidated Statements of Cash Flows

(Expressed in US Dollars)

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

Notes to the Unaudited Condensed Consolidated Financial Statements

(Expressed in US Dollars)

Akanda Corp. (the Company ) is domiciled in Canada and was incorporated on July 16, 2021. The Company's registered office is 77 King Street West, Suite 400, Toronto-Dominion Centre, Toronto Canada, Ontario, M5K 0A1.

Prior to the liquidation event on July 15, 2022 described below, the Company, through its indirectly held subsidiary, Bophelo Bio Science and Wellness (Pty) Ltd. is in the business of cultivating and manufacturing cannabis biomass and medical cannabis products in Lesotho (specifically near Ts'akholo, in the Mafeteng district of the Kingdom of Lesotho, Southern Africa), for export to international markets. At June 30, 2022, the Company determined that it no longer controlled Bophelo Bio Science and Wellness (Pty) Ltd. as a result of the insolvent liquidation order signed by the Lesotho Court on July 15, 2022 (see note 5 and 17). As a result of the loss of control, the Company derecognized all assets and liabilities at their book values on June 30, 2022 and wrote down all balances receivable from the entity to nil. During the six months ended June 30, 2022, recorded a loss on loss of control of Bophelo Bio Science and Wellness (Pty) Ltd. of $2,338,342, which included $800,794 of cash held by Bophelo Bio Science and Wellness (Pty) Ltd. The Company accounted for the operating results of Bophelo Bio Science and Wellness (Pty) Ltd. as a discontinued operation during the six months ended June 30, 2022 and has reclassified the operating results of Bophelo Bio Science and Wellness (Pty) Ltd as a discontinued operation for the six months ended June 30, 2021. At the date of these condensed consolidated financial statements, the liquidation of Bophelo Bio Science and Wellness (Pty) Ltd. is still ongoing. The Company is also in the business of sales and distribution of cannabis-based products for medical use, through its subsidiary Canmart Ltd which is based in the UK.

The Company was incorporated for the designed purpose of becoming the ultimate parent company of Cannahealth Ltd. ( Cannahealth ), through a reorganization of entities with common control. The share purchase agreement became unconditional on or about November 3, 2021 and the Company acquired the shares in the aforementioned entities from Halo Collective Inc. ( Halo ).

The Company's condensed consolidated financial statements have been prepared on a going concern basis which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. Attention is drawn to the fact that the Company incurred a net cash outflow of $8,353,721 from operating activities for the six months ended June 30, 2022. The continuing operations of the Company are dependent upon its ability to raise further cash funding by way of issuing debt and/or equity, as well as its ability to generate cash profits from its investments in Canmart Ltd. and Holigen Ltd. in the near future.

The Company is an early-stage company and is primarily dependent on externally provided financing to continue as a going concern. Additional funds will be required to enable the Company to pursue such an initiative and the Company may be unable to obtain such financing on satisfactory terms. Furthermore, there is no assurance that the Company will be profitable. Management intends to finance operating costs over the next twelve months with its cash on hand, and/or additional cash that will be generated from operations. The Company does not at this stage have any firm plans or commitments regarding further financing.

These uncertainties may cast significant doubt upon the Company's ability to continue as a going concern. These financial statements do not include any adjustments relating to the recoverability and classification of assets and liabilities which might be necessary should the Company be unable to continue in existence.

In March 2020, the World Health Organization declared COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, potentially leading to an economic downturn. It is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on the Company's business or ability to raise funds.

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

These condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard ( IAS ) 34 Interim Financial Reporting and have been prepared using the same accounting policies and methods of application as those used in the Company's audited consolidated financial statements for the year ended December 31, 2021. These condensed consolidated interim financial statements do not include all of the information required for full annual consolidated financial statements and should be read in conjunction with the Company's audited consolidated financial statements for the year ended December 31, 2021.

These condensed consolidated financial statements have been prepared on an accrual basis, except for cash flow information, and are based on the historical cost, modified where applicable and related to the valuation of certain financial assets and financial liabilities to fair value.

Cannahealth and its subsidiaries, Bophelo Holdings Ltd, Bophelo Bio Science and Wellness (Pty) Ltd, and Canmart Ltd were under the common control of Halo until the acquisition by the Company had occurred. As of November 2021, shareholdings in each of the three separate entities were made consistent through the issuance of shares or the repurchase of shares for cash to the relevant shareholders (the Reorganization Transactions'). As of November 2021, shareholdings in each of the four entities were identical. When the Company was formed in July 2021 with a view to ultimately acquiring Cannahealth and its subsidiaries, its majority shareholders were also consistent with each of the three existing entities. Therefore, immediately prior to the acquisition, the majority shareholder ownership of the Company and Cannahealth were demonstrated common control, and immediately after the acquisition, the shareholdings held in the Company by each individual shareholder were also identical.

The Company performed an assessment and determined Bophelo Bio Science and Wellness (Pty) Ltd to be the predecessor entity to the Company, and that the corporate restructuring in which Akanda became the parent company did not have economic substance. As such, in preparing the Company's condensed consolidated financial statements, the Company accounted for the acquisition in as a transaction between entities under common control combining the Company and Cannahealth from the earliest reporting date using the pooling of interests method' of accounting, where assets for the Companies that came under common control were transferred into the consolidated group at the book value on the date in which common control was achieved.

In the acquisition described above, shares were issued to existing shareholders for no consideration. Therefore, the number of shares outstanding was increased without an increase in resources. The number of shares outstanding before the exchange have been adjusted for the change in shares as if the issuance had occurred at the beginning of the earliest period presented. All share and per share information presented herein has been retrospectively adjusted to give effect to the culmination of the reorganization and the issuance of shares on incorporation of Akanda on January 1, 2019.

These condensed consolidated financial statements are prepared and presented in United States Dollars ( USD or $ ), which is the Company's reporting currency. All financial information has been rounded to the nearest dollar except where indicated otherwise.

The preparation of consolidated financial statements in conformity with IFRS requires management to make estimates, judgements and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, revenue and expenses during the period. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. Areas

in which management has made critical judgments in the process of applying accounting policies and that have the most significant effect on the amounts recognized in the condensed consolidated financial statements include the determination of the Company's and its subsidiaries' functional currencies.

In January 2020, the IAS issued an amendment to IAS 1 Presentation of Financial Statements that clarifies the criterion for classifying a liability as non-current relating to the right to defer settlement of a liability for at least 12 months after the reporting period.

1.Liabilities are classified as non-current if the entity has a substantive right to defer settlement for at least 12 months at the end of the reporting period. The amendment no longer refers to unconditional rights. The assessment determines whether a right exists, but it does not consider whether the entity will exercise the right.

2. Settlement' is defined as the extinguishment of a liability with cash, other economic resources or an entity's own equity instruments. There is an exception for convertible instruments that might be converted into equity, but only for those instruments where the conversion option is classified as an equity instrument as a separate component of a compound financial instrument.

The amendment applies to annual reporting periods beginning on or after January 1, 2023 and is applied retrospectively upon adoption. The Company does not expect the amendments to have a significant impact on the condensed consolidated financial statements upon adoption.

On April 29, 2022, the Company, through its wholly owned subsidiary, Cannahealth, acquired 100% of the Ordinary Shares of Holigen Limited ( Holigen ) and its wholly-owned operating subsidiary, RPK Biopharma Unipessoal, LDA ( RPK ) from the Flowr Corporation. Through its operations in RPK, Holigen is a producer of premium EU GMP grade indoor grown cannabis flower. The acquisition of Holigen enables the Company to immediately have the ability to produce EU GMP grade cannabis flower for the European market. Consideration for the acquisition consisted of a payment of $3,000,000 in cash and 1,900,000 common shares of the Company's share capital.

RPK's operations consist of a 20,000 square foot indoor EU GMP certified grow facility located near Sintra, Lisbon, Portugal, dedicated to the cultivation of high-THC premium cannabis as well as a large seven million square foot (180+ acre) outdoor facility located in Aljustrel, Portugal. Holigen is a Maltese-based entity and provides the added superior genetics, capacity, and route-to-market in the EMEA region, of which the Company intends to augment the Company's current operations.

The following table summarizes the acquisition-date fair value of each major class of purchase consideration that was transferred to the Flowr Corporation in lieu of the acquisition of 100% of the Ordinary Shares of Holigen:

The cash purchase price of the acquisition is $3.0 million, of which $2.6 million has been paid and $400,000 to fund the holdback payable is currently included within cash held in trust at June 30, 2022. The holdback payable represents funds withheld until resolution of a potential liability between the vendor and a service provider, of which the Company expects resolution within the next twelve (12) months. The fair value of the 1,900,000 common shares was based on the fair value of the trading price of the Company's common shares on the Nasdaq Capital Markets exchange of $8.49 per common share on April 29, 2022. Of the equity component of the purchase consideration of 1,900,000 common shares of the Company that was transferred to the Flowr Corporation, an amount of 96,354 common shares was directly transferred to Apolo Capital Advisory, who acted as advisors to the Flowr Corporation in respect of the transaction. The purchase of Holigen has been accounted for by the acquisition method, with the results of Holigen included in the Company's results of operation from the date of acquisition. The purchase of Holigen was determined as being a business combination in accordance with the requirements of IFRS 3 Business Combinations, due to the fact that the Company acquired control over Holigen on the acquisition date through the purchase of 100% of its voting securities

and consequent transfer of the purchase consideration (set out in the table above) to the sellers of the Holigen, namely the Flowr Corporation.

The Company incurred acquisition-related costs of approximately $250,000 relating to external legal fees, due diligence costs and valuation services. These costs have been included in consulting and professional fees expenses in the unaudited condensed consolidated statement of profit or loss for the six months ended June 30, 2022.

The following table summarizes the fair value of the identifiable assets and liabilities as at the date of acquisition:

During the six months ended June 30, 2022, the Company recorded a bargain purchase gain of $12,760,563 within other income, representing the fair value of net assets acquired of $31,891,563 in excess of the fair value of consideration of $19,131,000. The fair value of the net asset acquired was determined by an independent valuer using the discounted cash flow method of valuation.

From the date of acquisition, the operations of Holigen contributed a net loss of $814,896 primarily due to the fact that Holigen was substantially in a pre-revenue stage. If the acquisition had taken place on January 1, 2022, the operations of Holigen would have contributed net loss of $1,725,371 for the six months ending June 30, 2022.

At June 30, 2022, the Company determined that it no longer controlled Bophelo Bio Science and Wellness (Pty) Ltd. as a result of the insolvent liquidation order signed by the Lesotho Court on July 15, 2022 (see note 17). As a result of the loss of control, the Company derecognized all assets and liabilities at their book values on June 30, 2022 and wrote down all balances receivable from the entity to nil. During the six months ended June 30, 2022, the Company recorded a loss on loss of control of Bophelo Bio Science and Wellness (Pty) Ltd. of $2,338,342, which included $800,794 of cash held by Bophelo Bio Science and Wellness (Pty) Ltd. The Company accounted for the operating results of Bophelo Bio Science and Wellness (Pty) Ltd. as a discontinued operation during the six months ended June 30, 2022 and has reclassified the operating results of Bophelo Bio Science and Wellness (Pty) Ltd as a discontinued operation for the six months ended June 30, 2021.

Set out below is the financial performance and cash flow information for the six months ended June 30, 2022 and 2021 related to the discontinued operation:

As at June 30, 2022, the carrying amounts of assets and liabilities of Bophelo Bio Science and Wellness (Pty) Ltd were as follows:

As at June 30, 2022, there were two customers with an amount greater than 10% of the Company's trade accounts receivable which represented 87% of the balance. As at December 31, 2021, there was one customer with an amount greater than 10% of the Company's trade accounts receivable which represented 94% of the balance. The Company did not record any bad debt expense during the six months ended June 30, 2022 (2021 - nil).

The Company's inventory included consumer packaging inventory and dried cannabis flower finished product at RPK in Portugal with a total carrying amount of $895,773.67 (2021 - $0). During the six months ended June 30, 2022, inventories with a cost of $34,704 were recorded as cost of sales (2021 - $5,849).

During the six months ended June 30, 2022, concurrent to the acquisition of Holigen (refer to note 4 above), the Company subscribed for, and purchased 14,285,714 ordinary shares of The Flowr Corporation (TSX-V: FLWR) by way of a private placement for a consideration of approximately $801,160 (CDN$ 1,000,000). The subscription for the 14,285,714 ordinary shares of the Flowr Corporation was a closing deliverable requirement in terms of the sale and purchase agreement between the Company and the Flowr Corporation with respect to the acquisition of Holigen. Set out below is a reconciliation of the movement of the Company's investment during the six months ended June 30, 2022:

(*) Reflects closing price of CAD$0.03 on June 30, 2022.

As at June 30, 2022, the Company derecognized property, plant and equipment with a net book value of $2,233,028 in connection with the loss of control of Bophelo Bio Science and Wellness (Pty) Ltd. As at December 31, 2021 and 2020 the Company's Capital

work in progress related to the ongoing civil, gravelling, storm drainage work on site, as well as the construction of hoop houses and a Cravo A-Frame style greenhouse for future medical cannabis cultivation in Bophelo, Lesotho, which was derecognized at June 30, 2022 as a result of the loss of control of Bophelo Bio Science and Wellness (Pty) Ltd.

During the six months ended June 30, 2022, the Company recorded depreciation of its property, plant and equipment of $372,723 (2021 $70,293) of which $115,890 (2021 $90,974) related to the operations of Bophelo Bio Science and Wellness (Pty) Ltd was recorded within discontinued operations.

During the six months ended June 30, 2022, the Company recorded amortization on its right-of-use assets of $58,010 (2021 - $61,447) within discontinued operations. As at June 30, 2022, the Company derecognized right-of-use assets with a net book value of $1,888,715 in connection with the loss of control of Bophelo Bio Science and Wellness (Pty) Ltd.

The Company's licenses consist of a cannabis distribution license with a carrying value of $15,318 at June 30, 2022 (December 31, 2021 - $17,016) a cannabis API manufacturing and GMP license with a carrying value of $23,415,814 (December 31, 2021 - $0). As at June 30, 2022, the Company derecognized a cannabis operator's license with a net book value of $227,704 (December 31, 2021 $242,086) in connection with the loss of control of Bophelo Bio Science and Wellness (Pty) Ltd. The Company considered

indicators of impairment at June 30, 2022 and December 31, 2021. The Company did not record any impairment loss during the six months ended June 30, 2022 (2021 nil).

At June 30, 2022, the remaining useful life of the Company's finite life intangible assets is approximately 9.5 years. The Company's cannabis distribution license has been classified as an indefinite-life intangible asset as the Company expects to maintain this asset and the end point of the useful life of such asset cannot be determined. The Company evaluates the assumption of the indefinite life of the cannabis distribution license at least annually.

Included in the loan receivable at June 30, 2022 is an amount of $485,272 (December 31, 2021 - $134,770) owed by Cellen Life Sciences Limited to the Company pursuant to a Bridge Loan Arrangement entered into in December 2021. The amount payable to the Company in terms of the Bridge Loan Agreement was subject to a restructuring arrangement entered into by the Company (the Loan Restructuring Agreement) after the end of the reporting period, namely June 30, 2022. Refer to note 18 for further information.

As at June 30, 2022, the Company derecognized the lease liability with a net book value of $2,570,939 (December 31, 2021 - $2,418,706) in connection with the loss of control of Bophelo Bio Science and Wellness (Pty) Ltd.

Bophelo Bio Science and Wellness (Pty) Ltd has committed to the following undiscounted minimum lease payments remaining as at June 30, 2022:

The loans described below have been granted to the Company to fulfill its capital and operational requirements. The terms of the loans are described below:

This is a short-term loan facility of approximately $135,226 in capital value lent. to assist the Company in funding working capital deficits. This loan was unsecured, repayable within 30 days of receiving the payment and carried interest at the rate linked to the prime lending rate in the Republic of South Africa. The capital balance of this loan was repaid in full before the end of the financial year December 31, 2020. At June 30, 2022, the Company determined that it no longer controlled

Bophelo Bio Science and Wellness (Pty) Ltd. as a result of the insolvent liquidation order signed by the Lesotho Court on July 15, 2022 (see note 17). As a result of the loss of control, the Company derecognized all assets and liabilities at their book values on June 30, 2022 and wrote down this payable to Nil (see Note 5. The unpaid interest balance on this loan as at December 31, 2021 was $9,068.

This is a short-term loan facility of approximately $190,444 in capital value lent to assist the Company in funding its day-to-day operating costs. This loan does not have a fixed repayment date, is unsecured and is interest free. At June 30, 2022, the Company determined that it no longer controlled Bophelo Bio Science and Wellness (Pty) Ltd. as a result of the insolvent liquidation order signed by the Lesotho Court on July 15, 2022 (see note 17). As a result of the loss of control, the Company derecognized all assets and liabilities at their book values on June 30, 2022 and wrote down this payable to Nil (see Note 5). The balance on this loan at December 31, 2021 was $174,840

During the year ended December 31, 2021, the Company received short term loan facility of approximately $258,900 (L 4,000,000) to assist the Company in funding its day-to-day operating costs. At June 30, 2022, the Company determined that it no longer controlled Bophelo Bio Science and Wellness (Pty) Ltd. as a result of the insolvent liquidation order signed by the Lesotho Court on July 15, 2022 (see note 17). As a result of the loss of control, the Company derecognized all assets and liabilities at their book values on June 30, 2022 and wrote down this payable to Nil (see Note 5). As at December 31, 2021 the balance remaining was $248,293. This loan does not have a fixed repayment date, is unsecured and is interest free.

The below loans have been granted to Holigen Ltd. and its subsidiaries in order to fund their capital and operational needs on site.

As at June 30, 2022, the balance of the loans from Caixa was $1,262,785 which consisted of loans for the purpose of building construction and purchase of equipment. The repayment date on these loans are February 22, 2026 and June 5, 2026 respectively. These loans are charged interest at the rate of 3,00% and are secured by mortgage of building and equipment.

As at June 30, 2022, the balance of the loans from Caixa was $2,570,127 which consisted of loans for the purpose of building construction and purchase of equipment. The repayment date on these loans are February 22, 2026 and June 5, 2026 respectively. These loans are charged interest at the rate of 3,00% and are secured by mortgage of building and equipment.

The Company has authorized share capital of an unlimited amount of common shares with no par value.

Shares issued and outstanding are as follows:

The weighted average number of common shares outstanding for basic and diluted earnings per share for the six months ended June 30, 2022 was 26,835,444 (2021 13,129,212). The Company did not have any potential dilution during the six months ended June 30, 2022 or 2021.

In order to incentivize senior executive management and key staff, the Company makes use of equity incentives awarded pursuant to the Employee Share Ownership Plan ( ESOP ). In terms of the ESOP, the Company may award up to 20% of the Company's issued share capital (at any point in time) in qualifying ESOP incentives.

On April 22, 2022, the Company granted 2,480,532 restricted stock units ( RSUs ) to directors, officers, and employees of the Company, of which service cost of $576,340 was included in general and administrative expenses during the six months ended June 30, 2022 (2021 - $0).

Secured convertible debenture

On November 3, 2021 (the Issuance Date ), the Company entered into an agreement with Halo in which the Company issued Halo a secured convertible debenture with an initial value of $6,559,294. The notes were convertible into common shares of the Company's capital receiving the number of shares, at its current market price, required to satisfy the principal and interest payable. The obligation to convert the note within six months of the Issuance Date is triggered by (a) an initial public offering by the Company on a stock exchange; (b) an amalgamation, arrangement, merger, reverse takeover, reorganization or similar event; (c) a sale or conveyance of all or substantially all of the property and assets of the Company to any arm's length third party for consideration consisting of free trading securities and the subsequent distribution of all of such consideration to all of the holders of common shares, on a pro rata basis; (d) the sale or exchange of all or substantially all of shares of the Borrower for free trading securities. The debt bears interest at one percent per annum, matures on November 3, 2022 and is secured by all of the assets of the Company other than the interests in the securities of Bophelo Bio Science and Wellness (Pty) Ltd. and ranks ahead of all other debt issued by the Company. On March 15, 2022, upon completion of the Company's initial public offering the Company issued 1,645,745 common shares to Halo Collective, Inc. ( Halo ) at a price of $4 each to settle the principal amount of $6,559,294 plus accrued interest $23,686 owing to Halo in terms of a convertible debenture agreement, which totaled $6,582,980 at the time of conversion (see note 13(b)(ix)).

Transactions with Key Management Personnel

The Company has identified its Board of Directors, Executive Chairman, Chief Executive Officer ( CEO ), Chief Operating Officer ( COO ), Chief Financial Officer ( CFO ) and its President as its key management personnel who have the authority and responsibility for planning, directing and controlling the Company's main activities.

The Key Management remuneration is included in Professional and Consulting fees in the Statement of Operations.