Xebec Adsorption : Financial Statements for the three month period ended September 30, 2021

Xebec Adsorption Inc.

Condensed Interim Consolidated Financial Statements (Unaudited)

For the period ended September 30, 2021

(Expressed in thousands of Canadian dollars)

Xebec Adsorption Inc.

Condensed Interim Consolidated Statements of Financial Position (Unaudited)

(Expressed in thousands of Canadian dollars)

		September 30,			December 31,
		2021	2020
		$	$
Assets
Current assets
Cash	51,967	160,938
Restricted cash (Note 3)	9,883	7,642
Trade and other receivables	43,584	35,123
Inventories	46,057	21,145
Investment tax credits receivable	-	16
Finance leases receivable	252	129
Prepaid expenses	856		1,131
Total current assets	152,599	226,124
Non-current assets
Finance leases receivable	9,563	3,016
Investment and advance to related companies	1,677	116
Deferred financing costs	431	985
Property, plant and equipment	35,565	36,578
Intangible assets	14,412	15,004
Goodwill	221,588	162,802
Other non-current assets	47		53
Total non-current assets	283,283		218,554
Total assets	435,882	444,678
Liabilities
Current liabilities
Credit facility	5,000	975
Trade, other payables and accrued liabilities	37,143	27,571
Contract liabilities	13,549	7,507
Current portion of long-term debt	22,710	14,052
Current portion of government royalty program obligation (Note 4)	190	185
Current portion of provisions	1,963	1,541
Current portion of obligation arising from shares issued by a subsidiary (Note 5)	-	2,972
Income taxes payable	818		109
Total current liabilities	81,373	54,912
Non-current liabilities
Long-term debt	37,561	42,626
Government royalty program obligation (Note 4)	59	183
Provisions	311	348
Deferred tax liabilities	2,393		2,576
Total non-current liabilities	40,324	45,733
Total liabilities	121,697	100,645
Equity
Share capital (Note 6)	403,329	396,609
Contributed surplus	7,211	8,145
Accumulated other comprehensive loss	(10,675)	(914)
Deficit	(85,680)		(59,807)
Total equity	314,185		344,033
Total liabilities and equity		435,882		444,678

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

Approved by the Board of Directors

______(signed) Kurt Sorschak______ Director

_______(signed) Peter Bowie________ Director

Xebec Adsorption Inc.

Condensed Interim Consolidated Statements of Loss (Unaudited)

(Expressed in thousands of Canadian dollars, except net loss per share)

	For the three-month period	For the nine-month period
	ended September 30,	ended September 30,
	2021	2020	2021	2020
	$	$		$		$
Revenue (Note 8)
Revenue from contracts	26,120	18,389	77,883	50,170
Government grants	586		-	2,111	-
	26,706		18,389	79,994	50,170
Cost of goods sold
16,629		14,018	60,742	38,464
Gross margin
10,077		4,371	19,252	11,706
Research and development expenses
463		74	1,868	94
Selling and administrative expenses	10,844	4,868	31,719	13,039
Other (gains) and losses (Note 9)	6,335		1,137	7,024	932
	17,642		6,079	40,611	14,065
Operating loss
(7,565)		(1,708)	(21,359)	(2,359)
Other charge (income)
Finance income	(482)	(247)	(922)	(343)
Finance expenses (Note 10)	1,762		762	4,662	1,691
	1,280		515	3,740	1,348
Loss before income taxes
(8,845)		(2,223)	(25,099)	(3,707)
Income taxes	324		(37)	774	(14)
Net loss for the period
(9,169)		(2,186)	(25,873)	(3,693)
Net loss per share
Basic and diluted net loss per share (Note 6)	(0.06)		(0.02)	(0.17)	(0.04)

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

Xebec Adsorption Inc.

Condensed Interim Consolidated Statements of Comprehensive Loss (Unaudited)

(Expressed in thousands of Canadian dollars)

	For the three-month period ended	For the nine-month period ended
			September 30,			September 30,
	2021	2020	2021	2020
	$	$	$	$
Net loss for the period	(9,169)	(2,186)	(25,873)	(3,693)
Other comprehensive loss
Cumulative translation adjustment	2,957	(119)		(9,761)		763
Comprehensive loss for the period	(6,212)		(2,305)		(35,634)		(2,930)

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

Xebec Adsorption Inc.

Condensed Interim Consolidated Statements of Changes in Equity (Unaudited)

(Expressed in thousands of Canadian dollars)

						Accumulated
				Share capital		other
		Common	Warrants and	- Common	Contributed	comprehensive
		shares	Compensation Shares	shares	surplus	loss	Deficit	Total
		#	#	$	$	$	$	$
Balance - January 1, 2020	84,378,678	11,975,544	63,484	4,569	(1,247)	(27,849)	38,957
Net loss for the year	-	-	-	-	-	(3,693)	(3,693)
Other comprehensive income	-	-	-	-	762	-	762
Comprehensive income (loss) for the year	-	-	-	-	762	(3,693)	(2,931)
Issuance of warrants from new financing	-	3,000,000	-	2,954	-	-	2,954
Share issued from the exercise of options (Note 7)	1,503,333	-	682	(319)	-	-	363
Share issued from public offering	7,986,750	-	26,432	-	-	-	26,432
Warrants and compensation shares issued from public offering
		-	826,965	(631)	631	-	-	-
Warrants and compensation shares exercised from public
offering	11,881,796	(11,881,796)	20,279	(437)	-	-	19,842
Warrants from public offering - Cancelled
		-	(14,357)	-	-	-	-	-
Stock-based compensation expense (Note 7)
		-	-	-	151	-	-	151
Deferred share unit compensation expense (Note 7)
		-	-	-	105	-	-	105
Balance - September 30, 2020	105,750,557	3,906,356	110,246	7,654	(485)	(31,542)	85,873

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