Zentek : ZEN Jun 30 2023 FS Aug 11

ZENTEK LTD.

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended June 30, 2023 and 2022

(Unaudited)

(Expressed in Canadian Dollars)

	ZENTEK LTD.
JUNE 30, 2023 AND 2022	PAGE
Unaudited Condensed Interim Consolidated Statements of Financial Position	1
Unaudited Condensed Interim Consolidated Statements of Loss and Comprehensive Loss	2
Unaudited Condensed Interim Consolidated Statements of Changes in Equity	3
Unaudited Condensed Interim Consolidated Statements of Cash Flows	4
Notes to the Unaudited Condensed Interim Consolidated Financial Statements	5-15

1

ZENTEK LTD. UNAUDITED CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

	As at	As at
	June 30,	March 31,
	2023	2023
(Stated in Canadian Dollars)	$	$
ASSETS
Current assets	10,726,070
Cash and cash equivalents [note 12]	10,357,317
Accounts and other receivables - net [note 3]	295,050	569,008
Loan receivable [note 4]	533,474	2,983,642
Inventories [note 5]	2,990,273	2,849,073
Prepaids and deposits [note 5]	883,575	1,193,969
Total current assets	15,428,442	17,953,009
Non-current assets	8,308,513
Property and equipment - net [note 6]	8,335,867
Exploration and evaluation assets [note 7]	7,134,933	7,000,000
Total non-current assets	15,443,446	15,335,867
Total assets	30,871,888	33,288,876
LIABILITIES
Current liabilities	1,286,677
Accounts payable and accrued liabilities [note 8]	1,292,474
Current portion of lease liability [note 9]	129,863	129,264
Current portion of long-term debt [note 10]	492,762	998,080
Total current liabilities	1,909,302	2,419,818
Non-current liabilities	448,994
Lease liability [note 9]	484,856
Long-term debt [note 10]	385,884	-
Total non-current liabilities	834,878	484,856
Total liabilities	2,744,180	2,904,674
SHAREHOLDERS' EQUITY	85,890,798
Share capital [note 11(a)]	85,754,399
Share-based payment reserve [note 11(c)]	11,118,758	10,355,611
Shares to be issued [note 7(a)]	472,500	472,500
Deficit	(69,354,348)	(66,198,308)
Total shareholders' equity	28,127,708	30,384,202
Total shareholders' equity and liabilities	30,871,888	33,288,876
Nature of Business and Going Concern [note 1]
Commitments and Contingencies [note 14]
Subsequent Events [note 18]

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

These consolidated financial statements were authorised for issue by the Board of Directors on August 11, 2023.

Approved on behalf of the Board of Directors:

"Eric Wallman"

, Director

"Ilse Treurnicht"

, Director

2

ZENTEK LTD. UNAUDITED CONDENSED INTERIM CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS

(Stated in Canadian Dollars)	2023	2022
FOR THE THREE MONTHS ENDED JUNE 30	$	$
REVENUE	-
Sales	33,105
Other income	-	15,000
	-	48,105
EXPENSES	139,815
Amortisation [note 6]	155,700
Consulting fees	79,438	579,481
Directors fees [note 13]	30,000	-
Insurance	97,056	87,684
Investor relations and promotion	11,213	40,425
Listing and filing fees	93,465	136,271
Office expenses	33,041	40,563
Professional fees	408,725	489,235
Rent	123,617	31,630
Research and development	433,677	674,107
Salaries and benefits [note 13]	914,518	844,114
Share-based compensation [notes 11(c) and 13]	809,147	1,276,127
Supplies and materials	(5,046)	532,769
Travel	23,072	53,866
Other expenses [note 17]	181,635	159,411
	3,373,373	5,101,383
Loss before the undernoted	(3,373,373)	(5,053,278)
Interest income	143,402	58,074
Interest expense	(24,744)	(38,998)
Other income (expense)	9,853	-
Government grants [note 16]	88,822	-
Total other items	217,333	19,076
Net and comprehensive loss for the period	(3,156,040)	(5,034,202)
Basic and diluted net loss per share [note 15]	(0.03)	(0.05)

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

3

ZENTEK LTD.

UNAUDITED CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

				Share-Based
		Share		Payment	Share to be		Total
	Number of	Capital	Warrants	Reserve	Issued	Deficit	Equity
(Stated in Canadian Dollars)	Shares	$	$	$	$	$	$
Balance as at March 31, 2022	99,248,058	85,494,266	-	7,761,541	472,500	(52,179,246)	41,549,061
Stock options exercised [note 11(a)]	115,000	68,850	-	(22,850)	-	-	46,000
Recognition of share-based compensation [note 11(c)]	-	-	-	1,276,127	-	-	1,276,127
Net loss and comprehensive loss for the period	-	-	-	-	-	(5,034,202)	(5,034,202)
Balance as at June 30, 2022	99,363,058	85,563,116	-	9,014,818	472,500	(57,213,448)	37,836,986
Balance as at March 31, 2023	99,533,982	85,754,399	-	10,355,611	472,500	(66,198,308)	30,384,202
Stock options exercised [note 11(a)]	50,000	134,000	-	(46,000)	-	-	88,000
Shares issued	2,999	2,399	-	-	-	-	2,399
Recognition of share-based compensation [note 11(c)]	-	-	-	809,147	-	-	809,147
Net loss and comprehensive loss for the period	-	-	-	-	-	(3,156,040)	(3,156,040)
Balance as at June 30, 2023	99,586,981	85,890,798	-	11,118,758	472,500	(69,354,348)	28,127,708

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