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

Condensed Interim Consolidated Financial Statements of

Kaizen Discovery Inc.

For the three and six months ended June 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)

			June 30,		December 31,
	Notes		2022		2021
Assets
Current assets
Cash		$	2,894	$	5,911
Short-term financial assets			159		59
Receivables			42		57
Prepaid expenses and deposits	10		345		397
Total current assets			3,440		6,424
Non-current assets
Financial assets			9		26
Other assets			44		44
Property, plant and equipment			67		59
Mineral properties	3		3,239		3,182
Total assets		$	6,799	$	9,735
Liabilities
Current liabilities
Accounts payable and accrued liabilities	10	$	1,024	$	327
Provision			599		586
Total current liabilities			1,623		913
Non-current liabilities
Non-current provision	4		423		971
Total liabilities		$	2,046	$	1,884
Shareholders' equity
Share capital	5	$	62,916	$	62,916
Share-based payment reserve	8		4,539		4,103
Other reserves			452		452
Share purchase warrants	5		1,291		1,291
Accumulated other comprehensive loss			(693)		(744)
Accumulated deficit			(63,752)		(60,167)
Total shareholders' equity		$	4,753	$	7,851
Total liabilities and shareholders' equity		$	6,799	$	9,735

Description of business and going concern (Note 1)

Approved and authorized for issue on behalf of the Board on August 4, 2022:

/s/ Terry Krepiakevich

Terry Krepiakevich, 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		Six months ended
					June 30,				June 30,
Notes		2022		2021		2022		2021
Operating expenses
Exploration expenses	6	$	(2,001)	$	(768)	$	(2,941)	$	(1,133)
Administrative expenses	7		(402)		(406)		(1,154)		(677)
Loss from operations			(2,403)		(1,174)		(4,095)		(1,810)
Other income (expenses)
Interest income			14		1		24		2
(Loss) gain on foreign exchange			(14)		78		(67)		181
Interest expense			(2)		(153)		(13)		(294)
Depreciation expense			(3)		-		(6)		(1)
Other (expense) income	4		(7)		68		572		678
Loss before income taxes			(2,415)		(1,180)		(3,585)		(1,244)
Income taxes			-		-		-		-
Net loss for the period		$	(2,415)	$	(1,180)	$	(3,585)	$	(1,244)
Other comprehensive income (loss)
Items that will not be reclassified subsequently to loss:
Change in fair value of marketable securities			(8)		4		5		15
Items that may be reclassified subsequently to loss:
Currency translation adjustment			97		(33)		46		(64)
Total other comprehensive income (loss) for the period		$	89	$	(29)	$	51	$	(49)
Total comprehensive loss for the period		$	(2,326)	$	(1,209)	$	(3,534)	$	(1,293)
Loss per share (basic and diluted)		$	(0.04)	$	(0.03)	$	(0.05)	$	(0.04)
Weighted average number of basic and diluted shares outstanding		65,828,426		34,355,482		65,828,426		34,355,482

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)

					Share-based				Share		Accumulated
			Share			Other			other		Accumulated
	Number of			payment			purchase comprehensive
	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	-		-		-		-		-		-		(1,244)		(1,244)
Other comprehensive loss	-		-		-		-		-		(49)		-		(49)
Share-based payments	-		-		174		-		-		-		-		174
Balance at June 30, 2021	34,355,482	$	48,576	$	4,013	$	452	$	891	$	(789)	$	(57,122)	$	(3,979)
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	-		-		-		-		-		-		(3,585)		(3,585)
Other comprehensive income	-		-		-		-		-		51		-		51
Share-based payments	-		-		436		-		-		-		-		436
Balance at June 30, 2022	65,828,426	$	62,916	$	4,539	$	452	$	1,291	$	(693)	$	(63,752)	$	4,753

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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