Mason Graphite : Financial statements as of September 30, 2021

MASON GRAPHITE INC.

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS For the three-month periods ended September 30, 2021 and 2020

(Expressed in Canadian dollars)

(Unaudited)

Condensed consolidated interim financial statements for the three-month period ended September 30, 2021 and 2020 have not been reviewed by the auditors

Management's responsibility for financial reporting

Management is responsible for the preparation and presentation of the accompanying condensed consolidated interim financial statements, which includes ensuring that significant accounting judgments and estimates are made in accordance with International Financial Reporting Standards. This responsibility includes selecting appropriate accounting principles and methods, and making decisions affecting the measurement of transactions for which objective judgment is required.

The Board of Directors is responsible for overseeing management in the performance of its financial reporting responsibilities and for approving the financial information included in the condensed consolidated interim financial statements. The Board fulfils these responsibilities by reviewing the financial information prepared by management and discussing relevant matters with management. The Audit Committee has the responsibility of meeting with management to discuss internal controls over the financial reporting process, auditing matters and financial reporting issues. The Audit Committee reports its findings to the Board for its consideration in approving the condensed consolidated interim financial statements together with other financial information of the Company for issuance to the shareholders.

Management recognizes its responsibility for conducting the Company's affairs in compliance with established financial standards and applicable laws and regulations, and for maintaining proper standards of conduct for its activities.

"Jean L'Heureux"	" Pascale Choquet "
Jean L'Heureux	Pascale Choquet
Chief Operations Officer	Chief Financial Officer (Interim)

Laval, Québec

November 25, 2021

Mason Graphite Inc.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Expressed in Canadian dollars)

(Unaudited)

	September 30,			June 30,
	2021	2021
ASSETS	$			$
Current assets
Cash	14,336,348	20,125,836
Sales tax receivable	237,451	6,865
Government assistance	124,275	162,700
Prepaid and other receivables	66,626	64,461
	14,764,700		20,359,862
Non-current assets
Deferred charges for an upcoming transaction (Note 4)	-	255,447
Prepayment for the transaction (Note 4)	-	176,350
Intangible assets (Note 4)	9,380,509	-
Property, plant and equipment (Note 3)	5,711,612		5,718,782
Total assets	29,856,821	26,510,441
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities	1,786,035		1,618,559
Total liabilities	1,786,035	1,618,559
EQUITY
Share capital	107,819,916	107,819,916
Reserves	12,624,598	12,313,973
Deficit	(96,330,595)	(95,242,007)
	24,113,919		24,891,882
Non-controlling interest (Note 4)	3,956,857	-
Total equity	28,070,786		24,891,882
Total equity and liabilities
29,856,821		26,510,441

APPROVED ON BEHALF OF THE BOARD OF DIRECTORS:

Signed "Peter Damouni"

, Director

Signed "François Perron"

, Director

The notes to the financial statements are an integral part of these condensed consolidated interim financial statements.

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Mason Graphite Inc.

CONSOLIDATED STATEMENTS OF NET INCOME AND COMPREHENSIVE INCOME

(Expressed in Canadian dollars) (Unaudited)

	For the three-month periods
	ended September 30,
	2021		2020
	$	$
Expenses
Salaries and consulting fees	215,960	87,197
Director fees	52,902	66,652
Professional fees	35,494	12,050
General office expenses	56,769	46,332
Travel and accommodation expenses	1,457	7,213
Share-based compensation	310,625	-
Communication and promotion expenses	42,278	6,559
Transfer agent and filing fees	23,625	8,737
Value-added graphite product expenses (Note 5)	201,935	421,601
Research and development expenses	6,573	2,100
Government assistance	(140,448)	(105,955)
Care and maintenance for Lac Gueret project	119,092	540,738
Amortization of intangible assets	78,768	-
Depreciation of property, plant and equipment	7,170	5,570
Operating net foreign exchange loss (gain)	(2,297)		531
Operating loss	1,009,903	1,099,325
Finance income	(25,082)		(47,080)
Net loss and comprehensive loss	984,821	1,052,245
Attributable to:
Company shareholders	958,546	1,052,245
Non-controlling interest (Note 4)	26,275	-
Net loss per share
Basic and diluted	$0.01	$0.01

The notes to the financial statements are an integral part of these condensed consolidated interim financial statements.

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Mason Graphite Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Expressed in Canadian dollars)

(Unaudited)

	For the three-month periods
	ended September 30,
	2021		2020
	$	$
Cash flows from operating activities
Net loss	(984,821)	(1,052,245)
Items not affecting cash:
Share-based compensation	310,625	-
Amortization of intangible assets	78,768	-
Depreciation of property, plant and equipment	7,170	5,570
Changes in non-cash operating working capital items:
Sales tax receivable	(230,586)	386,917
Government assistance	38,425	133,000
Prepaid and other receivables	(2,164)	37,380
Accounts payable and accrued liabilities	201,667		304,847
	(580,916)	(184,531)
Cash flows from investing activities
Acquisition of intangible assets (Note 4)	(5,384,922)	-
Acquisition of property, plant and equipment	-		(1,193,701)
	(5,384,922)		(1,193,701)
Change in cash	(5,965,838)	(1,378,232)
Cash, beginning of the period	20,125,836		26,638,101
Cash, end of the period	14,336,348	25,259,869
Supplemental information:
Property, plant and equipment accounted for in accounts payable and accrued
liabilities	1,163,537	1,340,743
Intangible assets accounted for in accounts payable and accrued liabilities	134,680

The notes to the financial statements are an integral part of these condensed consolidated condensed interim financial statements.

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