RYU Apparel : March 31 2022 Interim Financial Statements

RYU APPAREL INC.

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three months ended March 31, 2022 (Unaudited - Expressed in Canadian dollars)

NOTICE OF NO AUDITOR REVIEW OF CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

Under National Instrument 51-102 "Continuous Disclosure Obligations", if an auditor has not performed a review of the interim financial statements, the financial statements must be accompanied by a notice indicating that they have not been reviewed by an auditor.

The accompanying unaudited condensed interim consolidated financial statements of the Company have been prepared by and are the responsibility of the Company's management.

The Company's independent auditor has not performed a review of these financial statements in accordance with standards established by CPA (Chartered Professional Accountants) Canada for a review of interim financial statements by an entity's auditor.

May 30, 2022

RYU APPAREL INC.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION (Unaudited - Expressed in Canadian dollars)

As at

			March 31,		December 31,
	Note		2022		2021
ASSETS
Current
Cash		$	327,574	$	681,215
Trade and other receivables	3		56,868		71,933
Inventory	4		2,038,714		1,812,459
Prepaid expenses and deposits	5		105,366		351,010
			2,528,522		2,916,617
Non-current
Property and equipment	6		4,764		8,588
Lease asset	9		42,250		84,501
		$	2,575,536	$	3,009,706
LIABILITIES AND SHAREHOLDERS' DEFICIENCY
Current
Trade and other payables	14	$	3,901,726	$	4,218,079
Accrued liabilities			206,722		450,256
Lease settlement liability	10		293,183		-
Loans payable	7, 14		1,000,000		1,006,667
Loans from related parties	13		50,000		-
Current portion of lease obligations	9		47,357		679,280
Deferred revenue			35,980		65,995
			5,534,968		6,420,277
Non-current
Lease obligations	9		10,986		3,271,296
Lease settlement liability- non-current	10		204,912		-
Convertible debt	8		3,305,714		-
Convertible debentures to be issued			-		2,846,000
			9,056,580		12,537,573
Shareholders' deficiency
Share capital	11		91,070,922		90,937,517
Shares to be issued	11, 14		380,917		380,917
Equity reserve	11		14,537,415		14,503,456
Convertible debenture reserve	8		275,065
Deficit			(112,812,457)		(115,416,851)
Accumulated other comprehensive income			67,094		67,094
			(6,481,044)		(9,527,867)
		$	2,575,536	$	3,009,706

Nature of operations and going concern (note 1)

Contingencies and provisions (note 15)

Subsequent events (note 16)

Approved and authorized for issue by the Board of Directors on May 30, 2022.

"Bill Marcus"

Director

"Roger Edwards"

Director

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

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RYU APPAREL INC.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF LOSS AND COMPREHENSIVE INCOME AND LOSS (Unaudited - Expressed in Canadian dollars)

For the three months ended March 31, 2022 and 2021

	Note		2022		2021
Revenue	12	$	347,938	$	198,825
Cost of sales	4		261,319		175,243
Gross profit			86,619		23,582
Expenses
Depreciation	6,9		45,008		51,382
Foreign exchange gain			(19,137)		(3,900)
Interest and bank charges	7,8,9		159,561		201,137
Investor relations			150,821		75,104
Office and general			175,028		256,966
Product creation			43,784		74,388
Professional fees			142,474		360,060
Salaries and benefits			395,365		218,804
Selling and marketing			164,351		422,227
Share-based payments	11		54,838		2,753,994
Travel and entertainment			19,477		14,578
			1,331,570		4,424,740
Loss before other items			(1,244,951)		(4,401,158)
Other items
Accretion	8		(3,339)
Gain on lease modifications and
terminations	9, 10		3,852,684		466,536
Net and comprehensive income (loss) for the
period		$	2,604,394	$	(3,934,622)
Earnings/(loss) per share - basic and diluted		$	0.01	$	(0.03)
Weighted average number of common shares
outstanding - basic and diluted			205,514,544		112,570,866

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

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RYU APPAREL INC.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF SHAREHOLDERS' DEFICIENCY (Unaudited - Expressed in Canadian dollars)

For the three months ended March 31, 2022 and 2021

													Accumulated
	Number of								Convertible				other		Total
	common		Share		Shares to be				Debenture			comprehensive		shareholders'
	shares		capital		issued	Equity reserve		Reserve		Deficit		income		deficiency
Balance, January 1, 2021	179,193,537	$	88,944,010	$	-	$	11,996,543	$	-	$	(105,376,998)	$	67,094	$	(4,369,351)
Shares issued upon exercise of warrants (note 10)	6,980,000		383,900		-		-				-		-		383,900
Shares issued upon exercise of options (note 10)	50,000		11,805		-		(5,805)				-		-		6,000
Shares issued for debt issuance costs (note 10)	1,306,667		163,334		-		-				-		-		163,334
Funds received for exercise of options (note 10, 12)	-		-		165,000		-				-		-		165,000
Share issuance costs (note 10)	-		(38,040)		-		-				-		-		(38,040)
Share-based payments (note 10)	-		-		-		2,753,994				-		-		2,753,994
Net loss (note 10)	-		-		-		-				(3,934,622)		-		(3,934,622)
Balance, March 31, 2021	187,530,204	$	89,465,009	$	165,000	$	14,744,732	$	-	$	(109,311,620)	$	67,094	$	(4,869,785)
Balance, January 1, 2022	205,270,100	$	90,937,517		$ 380,917	$	14,503,457	$	-	$	(115,416,851)	$	67,094	$	(9,527,866)
RSUs released	1,000,000		139,999		-		(139,999)		-						-
Share-based compensation							54,838								54,838
Share issuance costs			(6,594)				36,600								30,006
Issuance of Convertible Debt							82,519		275,065						357,584
Net income											2,604,394				2,604,394
Balance, March 31, 2022	206,270,100		91,070,922		380,917		14,537,415		275,065		(112,812,457)	$	67,094	$	(6,481,044)

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

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