Environmental Waste International : EWI FS September 30, 2023

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the nine months ended September 30, 2023 and 2022 (Unaudited)

Management's Responsibility for Interim Condensed Financial Statements

The accompanying unaudited condensed interim financial statements of Environmental Waste International Inc. for the three and nine months ended September 30, 2023 and 2022 have been prepared by Management in accordance with International Financial Accounting Standards, IAS 34 - Interim Financial Reporting.

Auditor Involvement

The auditor of Environmental Waste International Inc. has not performed a review of these interim condensed consolidated financial statements.

December 5, 2023

Q3 2023 Interim Condensed Consolidated Financial Statements Environmental Waste International Inc. 1

Environmental Waste International Inc.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

As at

	Note	September 30,	December 31,
(Canadian $)	2023	2022
Assets
Current assets
Cash		2,246	53,792
Government remittances recoverable		15,088	31,713
Prepaid expenses and sundry		89,583	127,700
Total current assets		106,917	213,205
Non-current assets
Property and equipment, net	5	2,787,894	2,483,078
Right-of-use asset	6	65,306	87,816
Total non current assets		2,853,200	2,570,894
Total Assets		2,960,117	2,784,099
Liabilities and shareholders' deficiency
Current
Accounts payable and accrued liabilities		1,109,300	938,174
Current portion of lease liability	7	35,443	31,840
Current portion of long term debt	8	3,376,501	3,277,770
Total current Liabilities		4,521,244	4,247,784
Lease liability	7	47,912	75,142
Long term debt	8	815,845	838,129
Total non-current Liabilities		863,757	913,271
Total Liabilities		5,385,001	5,161,055
Shareholders' deficiency
Capital stock	9	58,428,271	57,427,142
Contributed surplus	10	8,296,721	7,841,199
Deficit		(70,053,540)	(68,572,139)
Shareholders' deficit attributable to the parent		(3,328,548)	(3,303,798)
Non-controlling interest	11	903,664	926,842
Total shareholders' deficit		(2,424,884)	(2,376,956)
Total liabilities and shareholders' deficit		2,960,117	2,784,099
Going concern	3
Commitment and contingencies	16
Subsequent events	18

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

Approved on behalf of the Board of Directors

"Paul Orlin"	"Robert MacBean"
Paul Orlin	Robert MacBean
Director	Director

Q3 2023 Interim Condensed Consolidated Financial Statements Environmental Waste International Inc. 2

Environmental Waste International Inc.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF NET LOSS AND COMPREHENSIVE LOSS
For the three and nine months ended September 30
		Three months ended	Three months ended	Nine months ended	Nine months ended
(Canadian $ except per share information)	Note	September 30, 2023	September 30, 2022	September 30, 2023	September 30, 2022
Expenses
Technology development	12	116,326	117,071	356,081	325,578
Plant operations	12	18,980	18,572	60,239	77,951
Selling, marketing and administration	12	174,073	360,034	615,687	818,874
Stock-based compensation	10	41,263	100,740	171,966	360,865
Depreciation of property plant and equipment	5	20,697	21,162	62,090	63,466
Amortization of right-of-use asset	6	7,587	7,586	22,511	22,511
		378,926	625,165	1,288,574	1,669,245
Operating loss		(378,926)	(625,165)	(1,288,574)	(1,669,245)
Other income (expenses)
Finance costs	13	(61,809)	(50,682)	(202,587)	(142,616)
Foreign exchange gain (Loss)		(30,829)	(4,470)	(13,419)	(3,810)
Change in fair value of derivative		-	-	-	90,214
		(92,638)	(55,152)	(216,006)	(56,212)
Net loss and comprehensive loss for the period		(471,564)	(680,317)	(1,504,580)	(1,725,457)
Net loss and comprehensive loss attributable to
parent		(463,840)	(672,738)	(1,481,402)	(1,700,841)
Net loss and comprehensive loss attributable to non-
controlling interest	11	(7,724)	(7,579)	(23,178)	(24,616)
Loss per share
Basic and diluted	14	(0.002)	(0.003)	(0.005)	(0.007)
The accompanying notes are an integral part of these interim condensed consolidated financial statements

Q3 2023 Interim Condensed Consolidated Financial Statements Environmental Waste International Inc. 3

Environmental Waste International Inc.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF NET CHANGES IN SHAREHOLDERS' DEFICIT
			Contributed		Attribuatable to	Non-controlling
(Canadian $ except per share information)	Note	Capital stock	surplus	Deficit	parent	interest	Total
January 1, 2022		56,997,868	7,019,124	(66,312,558)	(2,295,567)	958,552	(1,337,015)
Shares issued pursuant to private placement		431,475	-	-	431,475	-	431,475
Warrants issued pursuant to private placement		-	393,525	-	393,525	-	393,525
Stock compensation expense		-	360,865	-	360,865	-	360,865
Share issue costs		(2,201)	(2,008)	-	(4,209)	-	(4,209)
Net loss and comprehensive loss for the period		-	-	(1,700,841)	(1,700,841)	(24,616)	(1,725,457)
September 30, 2022		57,427,142	7,771,506	(68,013,399)	(2,814,752)	933,936	(1,880,816)
Stock compensation expense		-	69,693	-	69,693	-	69,693
Net loss and comprehensive loss for the period		-	-	(558,740)	(558,740)	(7,094)	(565,834)
December 31, 2022		57,427,142	7,841,199	(68,572,139)	(3,303,798)	926,842	(2,376,956)
Shares issued pursuant to private placement		378,491	-	-	378,491	-	378,491
Warrants issued pursuant to private placement		-	283,556	-	283,556	-	283,556
Shares issued pursuant to settlement of debt		50,000	-	-	50,000	-	50,000
Shares issued pursuant to settlement of promissory notes		572,638	-	-	572,638	-	572,638
Stock-based compensation	11	-	171,966	-	171,966	-	171,966
Net loss and comprehensive loss for the period		-	-	(1,481,402)	(1,481,402)	(23,178)	(1,504,580)
September 30, 2023		58,428,271	8,296,721	(70,053,540)	(3,328,548)	903,664	(2,424,884)
The accompanying notes are an integral part of these interim condensed consolidated financial statements

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Environmental Waste International Inc.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
For the nine months ended September 30
(Canadian $ except per share information)	Note	2023	2022
Operating activities
Net loss		(1,504,580)	(1,725,457)
Adjustments for:
Stock-based compensation	8b	171,966	360,865
Depreciation of property and equipment	5	62,090	63,466
Amortization of right-of-use asset	6	22,510	22,511
Finance costs	7f	189,914	135,896
Accretion expense	7a	7,323	6,720
Change in fair value of derivative	7c	-	(90,214)
		(1,050,777)	(1,226,213)
Changes in non-cash working capital
Trade and other receivables		-	97,024
Government remittances recoverable		16,625	(13,970)
Prepaid expenses and sundry		38,117	(19,203)
Accounts payable and accrued liabilities		171,126	140,969
Cash used in operating activities		(824,909)	(1,021,393)
Investing activities
Purchase of property and equipment	5	-	(6,435)
Additions to construction in progress	5	(366,906)	(376,541)
Cash used in investing activities		(366,906)	(382,976)
Financing activities
Proceeds from private placement	8a	662,047	825,000
Proceeds from issuance of promissory notes	7g	530,634	357,365
Share and warrant issuance costs	9	-	(4,209)
Repayments of mortgage	7d	(22,500)	(22,500)
Repayments of lease obligations	6	(29,912)	(28,552)
Cash provided by financing activities		1,140,269	1,127,104
Net decrease in cash		(51,546)	(277,265)
Cash, beginning of period		53,792	297,235
Cash, end of period		2,246	19,970
The accompanying notes are an integral part of these interim condensed consolidated financial statements

Q3 2023 Interim Condensed Consolidated Financial Statements Environmental Waste International Inc. 5

Environmental Waste International Inc.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the nine months ended September 30, 2023 and 2022

(UNAUDITED)

1. CORPORATE INFORMATION

Environmental Waste International Inc. ("EWI" or the "Company") was incorporated under the Ontario Business Corporations Act on October 31, 1987. The Company's business is the design, development and sale of environmentally sound devices utilizing EWI's patented Reverse Polymerization process and dealing with environmental waste disposal, including the development, advancement, licensing and sale of its technology and related machines throughout the world. The Company's registered office is located at 1751 Wentworth Street, Unit 1, Whitby, Ontario, L1N 8R6.

2. BASIS OF PREPARATION AND STATEMENT OF COMPLIANCE

The unaudited interim condensed consolidated financial statements of EWI have been prepared in accordance with International Accounting Standard 34 "Interim Reporting" ("IAS 34"). The notes presented in these unaudited interim condensed consolidated financial statements include only significant events and transactions occurring since the last fiscal year end and are not fully inclusive of all matters required to be disclosed in our annual audited consolidated financial statements. The policies applied in these unaudited interim condensed consolidated financial statements are based on International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB").

These unaudited interim consolidated financial statements have been prepared on a historical cost basis and are presented in Canadian dollars.

3. GOING CONCERN ASSUMPTION

The interim condensed consolidated financial statements have been prepared on a basis that assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. These unaudited interim condensed consolidated financial statements do not reflect any adjustments that may be necessary should the Company be unable to continue as a going concern. The Company incurred a net loss of $1,504,580 during the nine months ended September 30, 2023, and, as at that date, had working capital deficiency of $4,414,326 (December 31, 2022 - $4,034,579) and a cumulative deficit of $70,053,540 (December 31, 2022 - $68,572,139).

Recurring sources of revenue have not yet proven to be sufficient as the commercialization of the Company's core technology is at an early stage and the Company has not yet achieved a level of profitability and positive cash flows. While the Company has been successful in raising additional financing and extending the repayment terms for deferred compensation, it will require additional financing to enable it to continue operations. In the absence of additional financing, the Company is not expected to have sufficient funds to meet its obligations. Management continues to monitor cash needs and is considering various alternatives to raise additional financing. There can be no assurances that the Company will be able to secure the necessary financing to enable it to continue as a going concern. The factors noted above indicate the existence of a material uncertainty that may cast significant doubt on the ability of the Company to continue as a going concern. If the going concern basis is not appropriate, material adjustments may be necessary to the carrying amounts and/or classification of assets and liabilities.

Q3 2023 Interim Condensed Consolidated Financial Statements Environmental Waste International Inc. 6

Environmental Waste International Inc.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the nine months ended September 30, 2023 and 2022

(UNAUDITED)

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company's principal accounting policies were outlined in the Company's annual audited consolidated financial statements for the year ended December 31, 2022, and have been applied consistently to all periods presented in these unaudited interim condensed consolidated financial statements. These statements should be read in conjunction with the annual audited consolidated financial statements for the year ended December 31, 2022. New accounting policies for matters that have occurred subsequent to December 31, 2022, are included below:

Principles of consolidation

The consolidated financial statements include the accounts of the Company and the following subsidiaries at the following ownership percentages: Environmental Waste Management Corporation (100%), Ellsin Environmental Ltd. (90%) EWI Rubber Inc. (100%) Jaguar Carbon Sales Limited (100%), and 2228641 Ontario Limited (100%). The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at December 31, 2022. Control is achieved when the Company is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Company controls an investee if and only if the Company has:

• Power over the investee [i.e., existing rights that give it the current ability to direct the relevant activities of the investee];
• Exposure, or rights, to variable returns from its involvement with the investee; and
• The ability to use its power over the investee to affect its returns.

When the Company has less than a majority of the voting or similar rights of an investee, the Company considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

• The contractual arrangement with the other vote holders of the investee;
• Rights arising from other contractual arrangements; and
• The Company's voting rights and potential voting rights.

The Company re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated statements of loss and comprehensive loss from the date that the Company gains control until the date that the Company ceases to control the subsidiary.

Profit or loss and each component of other comprehensive income are attributed to the equity holders of the parent and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Company's accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Company are eliminated in full on consolidation.

Future changes to accounting standards

The following amendments to standards issued by the IASB have not yet been adopted by the Company:

Amendments to IAS 1 - Presentation of Financial Statements: These amendments require that entities disclose material accounting policies, as defined, instead of significant accounting policies. We are currently assessing the impact of these amendments on the disclosure of our accounting policies. Effective for annual reporting periods beginning on or after January 1, 2023 and any changes will be reflected in our financial statements for the year ended December 31, 2023.

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Environmental Waste International Inc.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the nine months ended September 30, 2023 and 2022

(UNAUDITED)

5. PROPERTY AND EQUIPMENT

	Asset under					Office and
(Canadian $)	construction	Land	Building	Gas engine	Leaseholds	Equipments	Total
Cost
At January 1, 2022	1,095,029	68,261	984,994	719,169	17,195	153,462	3,038,110
Additions	529,761	-	-	-	-	6,435	536,196
At December 31, 2022	1,624,790	68,261	984,994	719,169	17,195	159,897	3,574,306
Additions	366,906	-	-	-	-	-	366,906
At September 30, 2023	1,991,696	68,261	984,994	719,169	17,195	159,897	3,941,212
Accumulated depreciation
At January 1, 2022	-	-	354,937	525,666	3,325	122,744	1,006,672
Depreciation	-	-	25,202	47,945	3,439	7,970	84,556
At December 31, 2022	-	-	380,139	573,611	6,764	130,714	1,091,228
Additions			18,158	35,958	2,579	5,394	62,090
At September 30, 2023			398,297	609,569	9,343	136,108	1,153,318
Carrying amount
At December 31, 2022	1,624,790	68,261	604,855	145,558	10,431	29,183	2,483,078
At September 30, 2023	1,991,696	68,261	586,697	109,600	7,852	23,789	2,787,894

During 2021, the Company began upgrading its pilot plant in Sault Ste. Marie to a commercial production facility. All expenditures relating to this upgrade have been classified as asset under construction. No depreciation has been charged on these expenditures until the plant is fully commissioned.

6. RIGHT-OF-USE ASSET

(Canadian $)
At January 1, 2022	117,913
Amortization	(30,097)
As at December 31, 2022	87,816
Amortization	(22,510)
At September 30, 2023	65,306

The company's right of use asset includes a lease contract for office space.

Q3 2023 Interim Condensed Consolidated Financial Statements Environmental Waste International Inc. 8

Environmental Waste International Inc.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the nine months ended September 30, 2023 and 2022

(UNAUDITED)

7. LEASE LIABILITY
(Canadian $)
At January 1, 2022	134,351
Interest expense on lease obligations	10,700
Rent payments	(38,069)
As at December 31, 2022	106,982
Interest expense on lease obligations	6,285
Rent payments	(29,912)
As at September 30, 2023	83,355
Current portion	35,443
Non-current portion	47,912
As at September 30, 2023	83,355

The following table presents the contractual undiscounted cash flows for the lease obligation at September 30, 2023:

Year 1	41,392
Year 2	43,205
Year 3	7,251
Total undiscounted lease obligation	91,848

Q3 2023 Interim Condensed Consolidated Financial Statements Environmental Waste International Inc. 9