Delta CleanTech : 2023 First Quarter Report

INTERIM

FINANCIAL STATEMENTS

1ST QUARTER END MARCH 31, 2023

To the Shareholders of Delta CleanTech Inc.

("Delta" or the "Corporation")

Management's Accountability for Management's Discussion and Analysis and Consolidated Financial Statements

The unaudited consolidated interim financial statements for the period ending March 31, 2023 ("Financial Statements") have been prepared by management in accordance with International Financial Reporting Standards in Canada. Management is responsible for ensuring that these Financial Statements, which include amounts based upon estimates and judgment, are consistent with other information and operating data contained in management's discussion and analysis for the period ending March 31, 2023 ("MD&A") and reflect Delta's business transactions and financial position.

Management is also responsible for the information disclosed in the MD&A, including responsibility for the existence of appropriate information systems, procedures and controls, to ensure that the information used internally by management and disclosed externally is complete and reliable in all material respects.

In addition, management is responsible for establishing and maintaining an adequate system of internal control over financial reporting. Such systems are designed to provide reasonable assurance that the financial information is relevant, reliable and accurate and that the Corporation's assets are appropriately accounted for and adequately safeguarded.

The board of directors ("Board") annually appoints an audit committee which includes directors who are not employees of the Corporation. This committee meets regularly with management and the shareholders' auditors to review significant accounting, reporting and internal control matters. The shareholders' auditors have unrestricted access to the audit committee. The audit committee reviews the interim and annual financial statements, the report of the shareholders' auditors, and the interim and annual management's discussion and analysis and has delegated authority to approve the interim filings and makes recommendations to the Board regarding annual filings.

Management has reviewed the filings of the Corporation's MD&A, Financial Statements and attachments thereto. Based on our knowledge, having exercised reasonable diligence, these filings do not contain any untrue statement of material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it is made, with respect to the period covered by the interim filings. Based on our knowledge, having exercised reasonable diligence, the Financial Statements together with the other financial information included in the interim filings fairly present in all material respects the financial condition, the financial performance, and cash flows of the Corporation, as of the date of and for the periods presented in the interim filings.

Signed "Jeffrey Allison"	Signed "Jacelyn Case"
JEFF ALLISON	JACELYN CASE
PRESIDENT & CEO	CFO

Unaudited Interim Consolidated Statements of Financial Position (Expressed in Canadian dollars)

				Audited
For the period ended	Note	March 31, 2023	December 31, 2022
ASSETS
Current Assets:
Cash		$	178,368	$	401,172
Investments	6		1,311,947		1,500,000
Accounts receivable and accrued receivables	19		451,970		397,410
Government receivables			4,977		-
Prepaid expenses and deposits	5		40,066		58,636
			1,987,328		2,357,218
Investments	6		658,985		253,160
Property, plant and equipment	7		28,961		28,875
Right-of-use assets	8		88,715		100,791
Patents	9		55,319		49,865
Intangible assets	10		2,196,042		2,259,467
Goodwill	11		365,622		365,622
Total assets		$ 5,380,972	$ 5,414,998
LIABILITIES
Current Liabilities:
Accounts payable and accrued liabilities	19	$	337,130	$	351,437
Government payables			-		18,778
Deferred revenue	12		37,500		64,226
Customer deposits			200,015		-
Current portion of lease liability	13		39,822		51,550
			614,467		485,991
Lease liability	13		49,619		49,619
Total liabilities			664,086		535,610
EQUITY
Equity:
Share capital	14		9,875,501		9,043,155
Warrants	15		1,375,594		1,375,594
Contributed surplus	15,16		717,331		1,496,285
Accumulated deficit		(7,136,772)	(6,962,529)
Total equity attributable to shareholders of the Corporation			4,831,654		4,952,505
Total deficit attributable to non-controlling interest			(114,768)		(73,117)
			4,716,886		4,879,3,88
Total liabilities and equity		$ 5,380,972	$ 5,414,998

The accompanying notes are an integral part of these Financial Statements.

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Unaudited Interim Consolidated Statement of Income (Loss)

and Comprehensive Income (Loss)

(Expressed in Canadian dollars)

For the period ended	Note	March 31, 2023	March 31, 2022
Revenue
Engineering, process design and consulting		$ 465,552	$ 116,700
Expenses
Engineering, process design and consulting		173,750	46,561
Operating wages and benefits		326,162	125,732
Consulting and contractor costs		184,274	148,265
Business development		94,525	87,750
General and administrative		186,862	269,735
Amortization	7,8,9,10	79,554	78,701
		1,045,127	756,682
Operating loss		(579,575)	(639,982)
Interest income		13,022	6,109
Interest expense	13	(1,774)	(361)
Net interest income		11,248	5,748
Stock compensation expense	16	(53,392)	(215,392)
Fair value gain on Common Shares	6	405,825	49,198
Loss before taxes		(215,894)	(800,428)
Income tax expense		-	-

Net loss and comprehensive loss for the period		$	(215,894)	$	(800,428)
Net loss for the period attributable to:
Shareholders of the Corporation		$	(174,243)	$	(800,428)
Non-controlling interest			(41,651)		-
Net Loss for the period		$	(215,894)	$	(800,428)
Loss per share - basic and diluted*	17	$	(0.004)	$	(0.01)

*Fully diluted earnings per share is not presented when there is a loss as the impact would be anti-dilutive.

The accompanying notes are an integral part of these Financial Statements.

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Unaudited Interim Consolidated Statements of Changes in Equity

(Expressed in Canadian dollars)

							Non-
		Number of	Share		Contributed		Controlling
	Note	shares	Capital	Warrants	Surplus	Deficit	Interest	Total Equity
Balance, December 31, 2021		58,523,100	$ 8,993,655	$ 1,375,594	$ 1,042,631	$ (4,258,236)	$	-	$ 7,153,644
Options and RSU's issued	16	-	-	-	503,154	-		-	503,154
Shares issued under RSU plan	16	300,000	49,500	-	(49,500)	-		-	-
Change in ownership interest in		-	-	-	-	70,031		(49,031)	21,000
Carbon RX
Net loss		-	-	-	-	(2,774,324)		(24,086)	(2,798,410)
Balance, December 31, 2022		58,823,100	$ 9,043,155	$ 1,375,594	$ 1,496,285	$ (6,962,529)	$	(73,117)	$ 4,879,388
Options and RSU's issued	16	5,000,000	832,346	-	(832,346)	-		-	-
Shares issued under RSU plan	16	-	-	-	53,392				53,392
Net loss		-	-	-	-	(174,242)		(41,651)	(215,893)
Balance, March 31, 2023		63,823,100	$ 9,875,501	$ 1,375,594	$ 717,331	$ (7,136,771)	$	(114,768)	$ 4,716,887

The accompanying notes are an integral part of these Financial Statements.

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