EarthRenew : Dec 31, 2023 Financial Statements

REPLENISH NUTRIENTS HOLDING CORP. (FORMERLY EARTHRENEW INC.)

CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2023 and 2022

Deloitte LLP

700, 850 2 Street SW

Calgary, AB T2P 0R8

Canada

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www.deloitte.ca

Independent Auditor's Report

To the Shareholders and Board of Directors of

Replenish Nutrients Holding Corp.

Opinion

We have audited the consolidated financial statements of Replenish Nutrients Holding Corp. (formerly EarthRenew Inc. (the "Company")), which comprise the consolidated statement of financial position as at December 31, 2023, and the consolidated statements of earnings (loss) and comprehensive income (loss), changes in cash flows and equity for the year then ended, and notes to the consolidated financial statements, including material accounting policy information (collectively referred to as the "financial statements").

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2023, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards ("IFRS").

Basis for Opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards ("Canadian GAAS"). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Other Matter

The financial statements of Replenish Nutrients Holding Corp for the year ended December 31, 2022 were audited by another auditor who expressed an unmodified opinion on those statements on April 27, 2023.

Material Uncertainty related to Going Concern

We draw attention to Note 2 in the financial statements, which indicates that the Company incurred a negative cash flow from operations of $520,453 during the year ended December 31, 2023 and, as of that date the Company has an accumulated deficit of $21,657,518. As stated in Note 2, these events or conditions, along with other matters as set forth in Note 2, indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Key Audit Matter

A key audit matter is a matter that, in our professional judgment, was of most significance in our audit of the consolidated financial statements for the year ended December 31, 2023. This matter was addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on this matter.

In addition to the matter described in the Material Uncertainty Related to Going Concern section, we have determined the matter described below to be the key audit matter to be communicated in our auditor's report.

Revenue Recognition - Product Revenue - Refer to Notes 3 and 18 to the financial statements

Key Audit Matter Description

The Company primarily generates revenue from its sales of products related to regenerative fertilizer solutions. Revenue is recognized by the Company when there is persuasive evidence of an arrangement and the customer has agreed on the price, payment terms, extent of the Company's performance obligations, and there is reasonable assurance of collecting the total consideration agreed upon in the contract.

Product revenue is a key audit matter due to the significant audit effort required in performing audit procedures related to the Company's product revenue recognition.

How the Key Audit Matter Was Addressed in the Audit

To test the revenue recognition for product revenue our audit procedures included among others, on a sample basis, identifying the performance obligation and evaluating revenue recognition by obtaining and inspecting a combination of the following audit evidence: external confirmations, sales invoices, bill of ladings/shipping documents, customer communication and cash receipts.

Other Information

Management is responsible for the other information. The other information comprises Management's Discussion and Analysis.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

We obtained Management's Discussion and Analysis prior to the date of this auditor's report. If, based on the work we have performed on this other information, we conclude that there is a material misstatement of this other information, we are required to report that fact in this auditor's report. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with IFRS, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian GAAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with Canadian GAAS, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our

auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partner on the audit resulting in this independent auditor's report is David Langlois.

/s/ Deloitte LLP

Chartered Professional Accountants

Calgary, Alberta

April 29, 2024

REPLENISH NUTRIENTS HOLDING CORP. (FORMERLY EARTHRENEW INC.)

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT DECEMBER 31, 2023 and 2022

STATED IN CANADIAN DOLLARS

	Note	31‐Dec‐2023	31‐Dec‐2022
ASSETS
Current Assets
Cash		1,037,599	3,632,195
Trade and other receivables	5	4,379,367	4,056,657
Inventory	6	5,302,406	11,927,163
Other current assets	7	209,535	96,636
Total Current Assets		10,928,907	19,712,651
Property, plant, and equipment	8	9,905,755	9,303,801
Intangibles	9	8,573,267	9,758,167
Total Assets		29,407,929	38,774,619
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued liabilities	10	6,021,038	12,235,686
Current portion of long‐term debt	11	728,809	521,455
Current portion of lease liabilities	12	230,431	129,885
Current portion of contingent consideration	13	‐	3,364,020
Total Current Liabilities		6,980,278	16,251,046
Long‐term debt	11	2,318,228	2,977,210
Lease liabilities	12	626,268	524,699
Contingent consideration	13	3,101,686	2,408,975
Deferred income tax liability	14	1,088,000	1,696,000
Total Liabilities		14,114,460	23,857,930
Shareholders' Equity
Share capital	15	29,916,521	29,916,521
Warrants	16	5,697,901	5,697,901
Share‐based payment reserve	17	1,336,565	1,721,860
Retained earnings (deficit)		(21,657,518)	(22,419,593)
Total Shareholders' Equity		15,293,469	14,916,689
Total Liabilities and Shareholders' Equity
	29,407,929	38,774,619
Going concern	2
Commitments and contingencies	26

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

Approved by the Board of Directors of Replenish Nutrients Holding Corp.

(signed) "Catherine Stretch"	(signed) "Chris Best"
CATHERINE STRETCH, DIRECTOR	CHRIS BEST, DIRECTOR

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REPLENISH NUTRIENTS HOLDING CORP. (FORMERLY EARTHRENEW INC.)

CONSOLIDATED STATEMENT OF EARNINGS (LOSS) AND COMPREHENSIVE INCOME (LOSS)

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

STATED IN CANADIAN DOLLARS

	Note	31‐Dec‐2023	31‐Dec‐2022
Revenue	18	13,918,301	17,270,400
Direct costs	19	12,563,620	15,120,463
Gross Profit		1,354,681	2,149,937
Operating Expenses
Depreciation and amortization	8,9	2,200,588	1,903,470
Selling, general and administration	20	2,462,543	3,105,925
		4,663,131	5,009,395
Earnings (Loss) from Operations		(3,308,450)	(2,859,458)
Non‐Operating Expense (Income)
Finance costs	21	211,594	170,648
Transaction costs	22	‐	525,021
Research and development		105,116	282,456
Share‐based compensation expense	4,17	292,590	613,726
(Gain) loss on disposal of assets		(4,606)	176,938
Bad debt expense (recovery)	5	(141,994)	(401,280)
Impairment	8,9	‐	3,035,642
(Gain) loss on foreign exchange		7,005	44,999
Other (income) expense	23	(583,036)	(292,508)
(Gain) loss on contingent consideration	13	(2,671,309)	719,601
		(2,784,640)	4,875,243
Earnings (Loss) before Income Tax		(523,810)	(7,734,701)
Income Tax
Current tax expense (recovery)	14	‐	‐
Deferred tax expense (recovery)	14	(608,000)	(650,000)
		(608,000)	(650,000)
Net Earnings (Loss)		84,190	(7,084,701)
Other comprehensive income (loss)		‐	‐
Comprehensive Income (Loss)		84,190	(7,084,701)
Net Earnings (Loss) per Common Share
Basic		0.00	(0.06)
Diluted		0.00	(0.06)

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

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REPLENISH NUTRIENTS HOLDING CORP. (FORMERLY EARTHRENEW INC.)

CONSOLIDATED STATEMENT OF CASH FLOW

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

STATED IN CANADIAN DOLLARS

	Note	31‐Dec‐2023	31‐Dec‐2022
OPERATING ACTIVITIES
Net income (loss)		84,190	(7,084,701)
Items not affecting cash:
Depreciation and amortization	8,9	2,200,588	1,903,470
Impairment	8,9	‐	3,035,642
Deferred tax expense (recovery)	14	(608,000)	(650,000)
Finance costs	21	211,594	170,648
(Gain) loss on foreign exchange		7,005	44,999
(Gain) loss on disposal of assets		(4,606)	176,938
(Gain) loss on contingent consideration	13	(2,671,309)	719,601
Share‐based compensation expense	17	292,590	613,726
Bad debt expense (recovery)	5	(141,994)	(401,280)
Funds from (used in) operations		(629,942)	(1,470,957)
Changes in non‐cash working capital	28	109,489	(4,808,008)
Cash from (used in) operations		(520,453)	(6,278,965)
INVESTING ACTIVITIES
Purchase of property, plant, and equipment		(1,680,504)	(2,421,852)
Disposal of property, plant, and equipment		468,710	104,787
Cash from (used in) investing activities		(1,211,794)	(2,317,065)
FINANCING ACTIVITIES
Proceeds from debt		‐	889,472
Repayment of debt		(451,628)	(546,063)
Repayment of lease liabilities		(199,127)	(76,786)
Cash interest paid		(211,594)	(164,740)
Proceeds from share issuance, net of issue costs		‐	9,418,865
Proceeds from stock options	17	‐	12,500
Proceeds from warrants	16	‐	1,420,000
Cash from (used in) financing activities		(862,349)	10,953,248
Increase (decrease) in cash and equivalents		(2,594,596)	2,357,218
Cash beginning of period		3,632,195	1,274,977
Cash end of period		1,037,599	3,632,195

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

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REPLENISH NUTRIENTS HOLDING CORP. (FORMERLY EARTHRENEW INC.)

CONSOLIDATED STATEMENT OF EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

STATED IN CANADIAN DOLLARS

	Note	31‐Dec‐2023	31‐Dec‐2022
Share Capital
Balance, beginning of period	15	29,916,521	24,195,577
Issuance of share capital, net of issue costs	15	‐	9,418,865
Warrants granted	15	‐	(5,529,767)
Warrants exercised	15	‐	1,808,541
Stock options exercised	15	‐	23,305
Balance, end of period	15	29,916,521	29,916,521
Warrants
Balance, beginning of period	16	5,697,901	1,120,601
Warrants granted	16	‐	5,529,767
Warrants exercised	16	‐	(388,541)
Warrants expired	16	‐	(563,926)
Balance, end of period	16	5,697,901	5,697,901
Share‐Based Payment Reserve
Balance, beginning of period	17	1,721,860	1,224,504
Share‐based payments expense	17	292,590	613,726
Stock options exercised	17	‐	(10,805)
Stock options expired	17	‐	‐
Stock options forfeited	17	(677,885)	(105,565)
Balance, end of period	17	1,336,565	1,721,860
Retained Earnings (Deficit)
Balance, beginning of period		(22,419,593)	(16,004,383)
Net income (loss)		84,190	(7,084,701)
Warrants expired	16	‐	563,926
Stock options expired/forfeited	17	677,885	105,565
Balance, end of period		(21,657,518)	(22,419,593)
Total Shareholders' Equity
	15,293,469	14,916,689

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

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REPLENISH NUTRIENTS HOLDING CORP. (FORMERLY EARTHRENEW INC.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 (EXCEPT WHERE OTHERWISE NOTED)

STATED IN CANADIAN DOLLARS

1. Description of the Business

Replenish Nutrients Holding Corp. (formerly EarthRenew Inc.) ("Replenish" or the "Company") is incorporated in the province of Alberta, Canada. The Company's common shares are traded on the Canadian Securities Exchange ("CSE") under the symbol "ERTH". The head office is located at PO Box 1186 Station Main, Okotoks, Alberta, Canada, T1S 1B1.

The Company delivers regenerative fertilizer solutions to support a farm system that prioritizes healthy soils and grower profitability. By combining essential macro and micro nutrients with biological material and a proprietary zero waste manufacturing process, the Company has developed a sustainable alternative to synthetic fertilizers that enhances overall soil function and biology while providing valuable plant‐available nutrients farmers rely upon for healthy crops.

The Company's revenue and profits are impacted by seasonality. Activity peaks in the second and fourth fiscal quarters where higher fertilizer sales and application occur during spring seeding and after crop harvesting in the fall.

2. Basis of Presentation

These consolidated financial statements (the "financial statements") have been prepared by management using accounting policies in accordance with International Financial Reporting Standards ("IFRS").

These financial statements were approved by the Company's Board of Directors on April 29, 2024.

These financial statements are recorded and presented in Canadian dollars, the Company's functional currency, and have been prepared on a historical cost basis, except for certain financial instruments that have been measured at fair value. All values are rounded to the nearest dollar, except where otherwise indicated.

The financial statements of the Company comprise the financial statements of the Company and the entities it controls. Control is achieved when the Company is exposed, or has rights, to variable returns from its involvement with subsidiaries and has the ability to affect those returns through its power over the subsidiaries' relevant activities. Subsidiaries are consolidated from the date control is obtained and deconsolidated from the date control ceases. All intercompany transactions, balances, income, and expenses are eliminated on consolidation. The Company has applied uniform accounting policies throughout all consolidated entities and the reporting dates of the subsidiaries are all consistent with that of the Company.

Going Concern

These consolidated financial statements have been prepared in accordance with IFRS on the assumption that the Company will continue as a going concern, meaning it will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the ordinary course of operations. Although the Company has raised funds through the issuance of equity securities and debt financing in the past, there can be no assurance the Company will be able to raise sufficient funds in the future if it is not able to generate positive cash flows. During the current year, the Company incurred net earnings of $84,190 (2022 net loss - $7,084,701) and negative operating cash flows of $520,453 (2022 - negative operating cash flow of $6,278,965) and had a deficit of $21,657,518 (2022 - deficit of $22,419,593). While the Company has a positive working capital balance and anticipates generating positive cash flow from operations in the coming year from higher margins on product sales and reductions in selling, general and administrative expenses, there can be no assurance these initiatives will be successful and that the positive working capital balance will be sufficient to fund the Company's operations. Further, it is not possible to predict whether financing efforts will be successful if they are required to fund the Company's operations. These conditions indicate that material uncertainties exist that cast a significant doubt on the Company's ability to continue as a going concern.

The Company's ability to continue as a going concern is dependent upon its ability to generate positive cash flow from operations or obtain additional financing to fund its operations. These consolidated financial statements do not include any adjustments to the carrying value of the assets and liabilities, the reported revenues and expenses or the balance sheet classifications that would be necessary if the Company was unable to realize its assets and settle its liabilities as a going concern in the normal course of operations. Such adjustments could be material.

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