Delta CleanTech : INTERIM FINANCIAL STATEMENTS 1ST QUARTER END MARCH 31, 2024

INTERIM

FINANCIAL STATEMENTS

1ST QUARTER END MARCH 31, 2024

To the Shareholders of Delta CleanTech Inc.

("Delta" or the "Corporation")

Management's Accountability for Management's Discussion and Analysis and Consolidated Financial Statements

The unaudited interim consolidated financial statements for the period ending March 31, 2024 ("Financial Statements") have been prepared by management in accordance with International Financial Reporting Standards in Canada. Management is responsible for ensuring that these Financial Statements, which include amounts based upon estimates and judgment, are consistent with other information and operating data contained in management's discussion and analysis for the period ending March 31, 2024 ("MD&A") and reflect Delta's business transactions and financial position.

Management is also responsible for the information disclosed in the MD&A, including responsibility for the existence of appropriate information systems, procedures and controls, to ensure that the information used internally by management and disclosed externally is complete and reliable in all material respects.

In addition, management is responsible for establishing and maintaining an adequate system of internal control over financial reporting. Such systems are designed to provide reasonable assurance that the financial information is relevant, reliable and accurate and that the Corporation's assets are appropriately accounted for and adequately safeguarded.

The board of directors ("Board") annually appoints an audit committee which includes directors who are not employees of the Corporation. This committee meets regularly with management and the shareholders' auditors to review significant accounting, reporting and internal control matters. The shareholders' auditors have unrestricted access to the audit committee. The audit committee reviews the interim and annual financial statements, the report of the shareholders' auditors, and the interim and annual management's discussion and analysis and has delegated authority to approve the interim filings and makes recommendations to the Board regarding annual filings.

Management has reviewed the filings of the Corporation's MD&A, Financial Statements and attachments thereto. Based on our knowledge, having exercised reasonable diligence, these filings do not contain any untrue statement of material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it is made, with respect to the period covered by the interim filings. Based on our knowledge, having exercised reasonable diligence, the Financial Statements together with the other financial information included in the interim filings fairly present in all material respects the financial condition, the financial performance, and cash flows of the Corporation, as of the date of and for the periods presented in the interim filings.

Signed "Jeffrey Allison"	Signed "Jacelyn Case"
JEFF ALLISON	JACELYN CASE
PRESIDENT & CEO	CFO

NOTICE TO READER OF THE

UNAUDITED INTERIM CONSOLIDATED

FINANCIAL STATEMENTS

The unaudited interim consolidated financial statements for the three-month period ending March 31, 2024, have been prepared by management in accordance with the International Financial Reporting Standards and have not been reviewed by the auditor of Delta CleanTech Inc.

Signed "Jeffrey Allison"

JEFFREY ALLISON

PRESIDENT & CEO

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Consolidated Statements of Financial Position (Expressed in Canadian dollars)

For the period ended	Note	March 31, 2024	December 31, 2023
		$	$
ASSETS
Current Assets:
Cash		459,642	283,382
Investments	8	-	-
Accounts receivable and accrued receivables	21	36,692	82,408
Government receivables		6,628	11,279
Prepaid expenses and deposits	5	30,576	45,908
Inventory	6	375,980	79,117
		919,518	502,094
Advances to associate	7	389,196	365,113
Investments	8	253,250	278,149
Property, plant and equipment	9	64,739	43,545
Right-of-use assets	10	40,325	52,422
Patents	11	61,616	54,995
Intangible assets	12	1,942,342	2,005,767
Goodwill	13	-	-
Total assets		3,660,986	3,302,085
LIABILITIES
Current Liabilities:
Accounts payable and accrued liabilities	21	596,453	310,701
Deferred revenue	13	20,109	4,860
Short term debt - convertible debenture	14	100,000	-
Current portion of lease liability	15	41,671	53,711
		758,233	369,272
Lease liability	15	668	668
Total liabilities		758,901	369,940
EQUITY
Equity:
Share capital	16	10,224,407	10,127,247
Warrants	17	2,051,688	1,548,848
Contributed surplus	17,18	778,791	770,645
Accumulated deficit		(10,042,764)	(9,421,078)
Total equity attributable to shareholders of the Corporation		3,012,122	3,025,662
Total deficit attributable to non-controlling interest		(110,037)	(93,517)
		2,902,085	2,932,145
Total liabilities and equity		3,660,986	3,302,085

The accompanying notes are an integral part of these Financial Statements.

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Consolidated Statements of Income (Loss)

and Comprehensive Income (Loss)

(Expressed in Canadian dollars)

For the period ended	Note	March 31, 2024	March 31, 2023
		$	$
Revenue
Engineering, process design and consulting		15,860	465,552
Expenses
Engineering, process design and consulting		5,837	173,750
Operating wages and benefits		240,210	326,162
Consulting and contractor costs		89,832	184,274
Business development		90,501	94,525
General and administrative		140,228	186,862
Stock compensation expense	18	8,146	53,392
Amortization	9,10,11,12	79,873	79,554
		654,627	1,098,519
Operating loss		(638,767)	(632,967)
Interest income		15,146	13,022
Interest expense	15	(1,633)	(1,774)
Net interest income		13,513	11,248
Fair value gain(loss) on Common Shares	8	(24,899)	405,825
Unrealized foreign exchange gain		8,947	-
Loss before taxes		(641,206)	(215,894)
Income tax expense		-	-

Net loss and comprehensive loss for the period		(641,206)	(215,894)
Net loss for the year attributable to:
Shareholders of the Corporation		(624,686)	(174,243)
Non-controlling interest		(16,520)	(41,651)
Net loss for the period		(641,206)	(215,894)
Loss per share - basic and diluted*	19	(0.01)	(0.004)

*Fully diluted earnings per share is not presented when there is a loss as the impact would be anti-dilutive.

The accompanying notes are an integral part of these Financial Statements.

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Consolidated Statements of Changes in Equity

(Expressed in Canadian dollars)

							Non-
		Number of	Share		Contributed		Controlling
	Note	shares	Capital	Warrants	Surplus	Deficit	Interest	Total Equity
			$	$	$	$	$	$
Balance, December 31, 2022		58,823,100	9,043,155	1,375,594	1,496,285	(6,962,529)	(73,117)	4,879,388
Options and RSU's issued	18	5,000,000	832,346	-	(832,346)	-	-	-
Stock compensation expense	18	-	-	-	53,392	-	-	53,392
Net loss		-	-	-	-	(174,242)	(41,651)	(215,893)
Balance, March 31, 2023		65,823,100	9,975,501	1,375,594	717,331	(7,136,771)	(114,768)	4,716,887
							Non-
		Number of	Share		Contributed		Controlling
	Note	shares	Capital	Warrants	Surplus	Deficit	Interest	Total Equity
			$	$	$	$	$	$
Balance, December 31, 2023		85,073,100	10,127,247	1,548,848	770,645	(9,421,078)	(93,517)	2,932,145
Private Placement	16	30,000,000	97,160	502,840	-	-	-	600,000
Stock compensation expense	18	-	-	-	8,146	-	-	8,146
Net loss		-	-	-	-	(624,686)	(16,520)	(641,206)
Balance, March 31, 2024		115,073,100	10,224,407	2,051,688	778,791	(10,042,764)	(110,037)	2,902,085

The accompanying notes are an integral part of these Financial Statements.

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Consolidated Statements of Cash Flows (Express in Canadian dollars)

For the period ended	Note	March 31, 2024	March 31, 2023
		$	$
Cash flows used in operating activities:
Net loss		(641,206)	(215,894)
Items not affecting cash:
Amortization	9,10,11,12	79,873	79,554
Accrued interest		(15,142)	1,950
Interest expense		-	1,009
Stock compensation expense		8,146	53,392
Fair value gain or loss on listed Common Shares	8	24,899	(405,825)
Unrealized foreign exchange loss		(8,937)	-
Change in working capital and other	20	69,834	99,234
		(481,657)	(386,583)
Cash flows used in investing activities:
Purchase of property and equipment	9	(24,509)	(3,248)
Purchase of patents	11	(7,657)	(7,320)
Redemption (purchase) of GIC		-	187,082
		(32,165)	176,514
Cash flows from financing activities:
Private placement	16	600,000	-
Lease payment	15	(12,917)	(12,735)
Cash received on issuance of debenture in Carbon RX		100,000	-
Cash received on issuance of shares Carbon RX		3,000	-
		690,083	(12,735)
Increase (decrease) in cash during the period		176,260	(228,804)
Cash - beginning of period		283,382	401,172
Cash - end of period		459,642	178,368

The accompanying notes are an integral part of these Financial Statements.

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Notes to the Financial Statements

For the periods ended March 31, 2024 and December 31, 2023 (Express in Canadian dollars)

1. Operations

Delta CleanTech Inc. ("Delta" or "Corporation") was incorporated on December 22, 2020, under the Business Corporations Act Alberta and is domiciled in Canada. The registered office of the Corporation is located at #2308 Palisade Dr. SW, Calgary, AB, T2V 3V1.

The principal activity of the Corporation and its subsidiary consists of five main clean energy pillars: 1) CO2 capture; 2) hydrogen production (CO2 capture); 3) solvent and ethanol purification; 4) methane collection and destruction; and 5) carbon credit certification and trading (collectively the "Business Sectors"). These Business Sectors will be accomplished by capitalizing on the Corporation's patented process design intellectual property ("IP"), as well as its CO2 capture and related solvent IP, whose focused mandate will be on positioning itself as a leading technology provider in the clean energy technology sector.

The Corporation operates its Business Sectors primarily in one principal field of business, that being clean energy. The Corporation's Chief Operating Decision-Maker ("CODM") is the President. The CODM is the highest level of management responsible for assessing the Corporation's overall performance and making operational decisions such as resource allocations related to operations, product prioritization, and delegation of authority. Management has determined that the Corporation operates in a single operating and reportable segment, and all of the Corporation's operations are within Canada.

1. Basis of Presentation
2. 1. Statement of Compliance

These unaudited interim consolidated financial statements of the Corporation (the "Financial Statements") for the 3-month period ended March 31, 2024 (the "Q1" or "Period") have been prepared by management in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and with interpretation of the International Financial Reporting Interpretations Committee ("IFRIC").

These Financial Statements were authorized for issuance by the Audit Committee of the Board of Directors ("Board") on May 30, 2024.

Certain comparative figures have been reclassified to conform to the current presentation.

b) Basis of presentation

The Financial Statements have been prepared on a going concern basis, under the historical cost convention, except for financial assets and liabilities that have been measured at amortized cost or fair value through profit and loss.

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1. Material Uncertainty Related to Going Concern

The Corporation's financial statements were prepared on a going concern basis. The going concern basis assumes that the Corporation will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business.

For the Period, the Corporation incurred a net loss of $641,206 and had negative operating cash flows of $428,828 and cash of $477,516. Based on the Corporation's current level of expenditures, it will have insufficient cash to fund its operations if sales do not improve and will need to raise additional funds. While the Corporation has been successful in obtaining financing to date and believes it will be able to obtain sufficient funds in the future and ultimately achieve profitability and positive cash flows from operations, there can be no certainty that these events will occur.

These conditions indicate that there is a material uncertainty that may cast significant doubt about the Corporation's ability to continue as a going concern.

The Financial Statements do not include any adjustments to the amounts and classification of assets and liabilities and related expenses that might be necessary should the Corporation be unable to continue as a going concern, and therefore be required to realize its assets and liquidate its liabilities and commitments in other than the normal course of business at amounts different from those stated herein. Such adjustments could be material.

d) Functional Currency

The Financial Statements are presented in Canadian dollars, which is the Corporation's functional currency.

e) Principles of consolidation

Subsidiaries are entities controlled by the Corporation. The financial statements of the subsidiaries are included in the Financial Statements from the date that control commences until the date that control ceases.

Intercompany balances and transactions, and any unrealized income and expenses arising from intercompany transactions are eliminated in preparing the Financial Statements. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.

The Financial Statements include the accounts of Delta, consolidated with those of its wholly owned subsidiaries: Delta CleanTech Inc. - Abu Dhabi ("DeltaUAE"); CO2 Technologies Pty. Ltd. ("CO2 Technologies"); and majority owned subsidiary Carbon RX Inc. ("Carbon RX"). All inter-company transactions, balances, revenues, and expenses have been eliminated on consolidation. On April 18, 2022, Carbon RX obtained an interest in Pure Sky Registry, LLC, ("Pure Sky") a Delaware corporation. The Corporation accounts for its investment in Pure Sky using the equity method of accounting. On June 20, 2023, Delta incorporated DeltaUAE in Abu Dhabi, in order to conduct its business projects in the United Arab Emirates. On November 21, 2023. Delta obtained a 46% interest in Methanator RX Inc. ("Methanator"). The Corporation accounts for its investment in Methanator RX using the equity method of accounting.

3) Use of Estimates and Judgement

The effect of a change in an accounting estimate is recognized prospectively by including it in comprehensive income (loss) in the period of the change, if the change affects that period only, or in the period of the change and future periods, if the change affects both.

Preparation of the Corporation's Financial Statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, and contingent

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liabilities as at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Estimates and assumptions are continuously evaluated and are based on management's experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. However, actual outcomes can differ from these estimates.

Key judgments and estimates made by management with respect to those areas noted previously have been disclosed in the notes to the Financial Statements ("Notes"), as appropriate.

Significant accounting judgements

Fair value measurement of financial instruments

When the fair value of financial assets recorded in the Statement of Financial Position cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the discounted cash flow method. The inputs to these models are taken from observable markets where possible.

Goodwill and intangible asset impairment

The carrying amounts of the Corporation's non-financial assets are reviewed at each reporting date to determine whether there is any indication of impairment. Goodwill is tested for impairment annually as at December 31. If any such indication exists, then the asset's recoverable amount is estimated and compared to the carrying amount of the cash generating unit ("CGU") to which the asset belongs. Significant judgements used in the determination of the recoverable amount include the discount rate, forecasted sales and expenses, and the resulting earnings before interest, taxes, depreciation and amortization, as well and working capital and the terminal growth rate.

Estimated useful lives of patents and intangibles

Amortization of patents and intangibles are dependent upon estimates of useful lives which are determined through the exercise of judgment. The assessment of any impairment of these assets is dependent upon estimates of recoverable amounts that take into account factors such as economic and market conditions and the useful lives of assets.

Stock compensation and warrants

The Corporation utilizes the Black-Scholes Option Pricing Model to determine the fair value of stock compensation and warrants issued as part of the Units. The Corporation uses judgment in the evaluation of the input variables in the Black-Scholes Calculation which includes: estimates of the future volatility of the Corporation's share price, forfeiture rates, expected lives of the underlying security, expected dividends and other relevant assumptions.

4) Summary of significant accounting policies

a) Business combinations and goodwill

Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured at the fair value of the assets given, equity instruments and liabilities incurred or assumed at the date of exchange. Acquisition costs for business combinations are expensed and included in general and administrative expenses. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at fair values at the date of acquisition.

Goodwill is initially measured at cost, being the excess of the cost of the business combination over the Corporation's share in the net fair value of the acquiree's identifiable assets, liabilities, and contingent liabilities.

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