Kaizen Discovery : Consolidated financial statements as at September 30, 2022

Condensed Interim Consolidated Financial Statements of

Kaizen Discovery Inc.

For the three and nine months ended September 30, 2022 and 2021 (Unaudited)

Kaizen Discovery Inc.
Condensed Interim Consolidated Financial Statements
Table of contents
Condensed interim consolidated statements of financial position.........................................................................	1
Condensed interim consolidated statements of loss and comprehensive loss .....................................................	2
Condensed interim consolidated statements of changes in shareholders' equity (deficit)....................................	3
Condensed interim consolidated statements of cash flows ..................................................................................	4
Notes to the condensed interim consolidated financial statements .................................................................	5-12

Kaizen Discovery Inc.

Condensed Interim Consolidated Statements of Financial Position

(Unaudited)

(Stated in thousands of Canadian dollars)

					September 30,		December 31,
			Notes		2022		2021
Assets
Current assets
	Cash		$	1,438	$	5,911
	Short-term financial assets			169		59
	Receivables			33		57
	Prepaid expenses and deposits	11		323		397
Total current assets			1,963		6,424
Non-current assets
	Financial assets			8		26
	Other assets			44		44
	Property, plant and equipment			68		59
	Mineral properties	3		3,463		3,182
Total assets		$	5,546	$	9,735
Liabilities
Current liabilities
	Accounts payable and accrued liabilities	11	$	231	$	327
	Provision			607		586
Total current liabilities			838		913
Non-current liabilities
	Non-current provision	4		443		971
Total liabilities		$	1,281	$	1,884
Shareholders' equity
	Share capital	5	$	62,916	$	62,916
	Share-based payment reserve	8		4,625		4,103
	Other reserves			452		452
	Share purchase warrants	5		1,291		1,291
	Accumulated other comprehensive loss			(477)		(744)
	Accumulated deficit			(64,542)		(60,167)
Total shareholders' equity		$	4,265	$	7,851
Total liabilities and shareholders' equity		$	5,546	$	9,735
Description of business and going concern (Note 1)
Approved and authorized for issue on behalf of the Board on November 8, 2022:
	/s/ Terry Krepiakevich				/s/ Eric Finlayson
	Terry Krepiakevich, Director			Eric Finlayson, Director

See accompanying notes to the condensed interim consolidated financial statements.

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Kaizen Discovery Inc.

Condensed Interim Consolidated Statements of Loss and Comprehensive Loss

(Unaudited)

(Stated in thousands of Canadian dollars, except for share and per share amounts)

			Three months ended		Nine months ended
				September 30,			September 30,
	Notes		2022		2021		2022		2021
Operating expenses
Exploration expenses	6	$	(510)	$	(198)	$	(3,451)	$	(1,331)
Administrative expenses	7		(283)		(822)		(1,437)		(1,499)
Loss from operations			(793)		(1,020)		(4,888)		(2,830)
Other income (expenses)
Interest income			12		3		36		5
Gain (loss) on foreign exchange			10		(113)		(57)		68
Interest expense			(8)		(201)		(21)		(495)
Depreciation expense			(3)		(1)		(9)		(2)
Other (expense) income	4		(8)		(17)		564		661
Loss before income taxes			(790)		(1,349)		(4,375)		(2,593)
Income taxes			-		-		-		-
Net loss for the period		$	(790)	$	(1,349)	$	(4,375)	$	(2,593)
Other comprehensive income (loss)
Items that will not be reclassified subsequently to loss:
Change in fair value of marketable securities			(1)		(6)		4		9
Items that may be reclassified subsequently to loss:
Currency translation adjustment			217		70		263		6
Total other comprehensive income for the period		$	216	$	64	$	267	$	15
Total comprehensive loss for the period		$	(574)	$	(1,285)	$	(4,108)	$	(2,578)
Loss per share (basic and diluted)		$	(0.01)	$	(0.04)	$	(0.07)	$	(0.07)
Weighted average number of basic and diluted shares outstanding		65,828,426		37,233,811		65,828,426		35,325,468

See accompanying notes to the condensed interim consolidated financial statements.

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Kaizen Discovery Inc.

Condensed Interim Consolidated Statements of Shareholders' Equity (Deficit)

(Unaudited)

(Stated in thousands of Canadian dollars, except for share amounts)

											Accumulated
					Share-based				Share		other
	Number of		Share		payment		Other		purchase comprehensive	Accumulated
	shares		capital		reserve		reserves		warrants		(loss) income		deficit		Total
Balance at January 1, 2021	34,355,482	$	48,576	$	3,839	$	452	$	891	$	(740)	$	(55,878)	$	(2,860)
Net loss for the period	-		-		-		-		-		-		(2,593)		(2,593)
Shares issued pursuant to conversion of promissory note,															-
net of share issue costs	14,806,278		7,374		-		-		-		-		-		7,374
Shares and share purchase warrants issued pursuant to
rights offering, net of share issue costs	16,666,666		6,970		-		-		400		-		-		7,370
Other comprehensive income	-		-		-		-		-		15		-		15
Share-based payments	-		-		225		-		-		-		-		225
Balance at September 30, 2021	65,828,426	$	62,920	$	4,064	$	452	$	1,291	$	(725)	$	(58,471)	$	9,531
Balance at January 1, 2022	65,828,426	$	62,916	$	4,103	$	452	$	1,291	$	(744)	$	(60,167)	$	7,851
Net loss for the period	-		-		-		-		-		-		(4,375)		(4,375)
Other comprehensive income	-		-		-		-		-		267		-		267
Share-based payments	-		-		522		-		-		-		-		522
Balance at September 30, 2022	65,828,426	$	62,916	$	4,625	$	452	$	1,291	$	(477)	$	(64,542)	$	4,265

The number of common shares outstanding and per share amounts have been updated retrospectively to reflect the consolidation of the Company's common shares on a ratio of one post-consolidation common share for every ten pre-consolidation shares ("Consolidation") which became effective on December 9, 2021 (Note 2(b)).

See accompanying notes to the condensed interim consolidated financial statements.

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