DIRTT Environmental Solutions Ltd. — Interim / Quarterly Report 2022

Jan 19, 2022

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Condensed Consolidated Interim Financial Statements

Six Months Ended

August 31, 2021

Notice of No Auditor Review of Financial Statement Condensed Consolidated Interim Statements of Financial Position Condensed Consolidated Interim Statement of Changes in Equity Condensed Consolidated Interim Statements of Comprehensive Income (Loss) Condensed Consolidated Interim Statements of Cash Flow Notes to Condensed Consolidated Interim Financial Statements

908, 938 Howe Street, Vancouver BC V6Z 1N9 T 604 314.9293 www.ashantisankofa.com E info@ashantisankofa.com

NOTICE OF NO AUDITOR REVIEW OF INTERIM FINANCIAL STATEMENTS

Under National Instrument 51-102, Part 4, subsection 4.3 (3) (a), if an auditor has not performed a review of the interim financial statements, they must be accompanied by a notice indicating that an auditor has not reviewed the financial statements.

The accompanying unaudited interim 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 the Chartered Professional Accountants of Canada for a review of interim financial statements by an entity’s auditor.

ASHANTI SANKOFA INC.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION

Unaudited - Expressed in Canadian Dollars

	Note	August 31, 2021 $ 12,641 4,076 2,100 18,817 250,000	February 28, 2021 $ 85,638 9,584 2,100 97,322 250,000
ASSETS Current assets Cash Other receivables Prepaid expenses Non-current assets Exploration and evaluation assets	3 4
TOTAL ASSETS		268,817	347,322 309,438 206,078 515,516 9,540,988 4,371,346 (14,080,528) (168,194)
LIABILITIES Current liabilities Accounts payable and accrued liabilities Due to related parties SHAREHOLDERS’ EQUITY (DEFICIT) Share capital Reserves Accumulated deficit	3 6 5 5	284,915 176,024 460,939 9,540,988 4,371,346 (14,104,457) (192,123)
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)		268,817	347,322

Nature of operations and going concern (Note 1)

The accompanying notes are integral to these condensed consolidated interim financial statements.

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ASHANTI SANKOFA INC.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE LOSS

Unaudited - Expressed in Canadian Dollars

For the six months ended August 31, 2021 August 31, 2020 $ $ EXPENSES Foreign exchange gain or loss - (4,320) Management fees (Note 6) 12,000 24,000 Office and general 40.47 455 Professional fees (Note 6) 10,628 26,100 Transfer agent and filing fees [ 1,260 ][ 4,520] NET LOSS AND COMPREHENSIVE LOSS (23,929) (50,745) Weighted Average Number of Shares Outstanding 51,900,860 44,400,860 Basic Loss Per Share (0.00) (0.00)

The accompanying notes are integral to these condensed consolidated interim financial statements.

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ASHANTI SANKOFA INC. CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY

Unaudited - Expressed in Canadian Dollars

		Share Capital Number of Shares Amount	Share Capital Number of Shares Amount	$ $ $ $ 2,435,395 1,935,951 (13,905,488) (138,154) Reserves Equity settled Accumulated benefits Warrants Deficit Total -- (50,745) (50,745) **2,435,395 1,935,951 (13,956,233) (188,899) **
Balance, February 29, 2020 Net loss for the period		44,400,860 -	$ 9,395,988 -
Balance, August 31, 2020		44,400,860	9,395,988
Balance, February 28, 2021		51,900,860	9,540,988	2,435,395 1,935,951 (14,080,528) (168,194)
Net loss for theperiod		-	-	- - (23,929) (23,929)
Balance, August 31, 2021		51,900,860	9,540,988	2,435,395 1,935,951 (14,104,457) (192,123)

The accompanying notes are integral to these condensed consolidated interim financial statements.

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ASHANTI SANKOFA INC. CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOW

Unaudited - Expressed in Canadian Dollars

		Six months ended August 31, 2021August 31, 2020 $ $ (23,929) (22,531) - (699) - (5,000) (6,206)(27,630) 15,856 25,387 (14,279) (30,472) -- - (37,844) - (37,844) (14,279) (68,316) 26,919 85,638	Six months ended August 31, 2021August 31, 2020 $ $ (23,929) (22,531) - (699) - (5,000) (6,206)(27,630) 15,856 25,387 (14,279) (30,472) -- - (37,844) - (37,844) (14,279) (68,316) 26,919 85,638
CASH FLOWS USED IN OPERATING ACTIVITIES Net loss for the period Items not involving cash: Changes in non-cash working capital items: Other receivables Prepaid expenses Accounts payable and accrued liabilities Due to related parties CASH FLOWS FROM FINANCING ACTIVITIES Shareholder advance Shareholder advance repayment Net (decrease) increase in cash Cash, beginning of the period		$ (23,929) - - (6,206) 15,856 (14,279)
		- - -	- (37,844) (37,844)
		(14,279) 26,919	(68,316) 85,638
	12,640

The accompanying notes are integral to these condensed consolidated interim financial statements.

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ASHANTI SANKOFA INC. NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED AUGUST 31, 2021 AND 2020 Unaudited - Expressed in Canadian Dollars

1. NATURE OF OPERATIONS

Ashanti Sankofa Inc. (the “Company” or “ASI”) through its wholly-owned subsidiary AMI Africa Exploration Ltd. (“AMI Africa”), both resident Canadian companies, and its wholly owned Ghanaian subsidiary Ashanti Sankofa Limited (“Ashanti”) is engaged primarily in gold exploration activity in West Africa.

The head office and the principal address of the Company is located at Suite 908 - 938 Howe Street, Vancouver, British Columbia, V6Z 1N9 and the records office and registered office is located at Suite 700 - 838 West Hastings Street, Vancouver, British Columbia, V6C 2A0.

The Company holds interests in mineral properties and has not yet determined whether these properties contain reserves that are economically recoverable.

These condensed consolidated interim financial statements have been prepared on the assumption that the Company will continue as a going concern, meaning it will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the ordinary course of operations. Different bases of measurement may be appropriate if the Company is not expected to continue operations for the foreseeable future. The Company has incurred a net loss of $23,929 for the period ended August 31, 2021 and has incurred cumulative losses since inception of $14,104,457. As at August, 2021, the Company had negative working capital of $442,122, had not advanced its mineral properties to commercial production and is not able to finance day to day activities through operations. The Company’s continuation as a going concern is dependent upon the successful results from its mineral property exploration activities and its ability to attain profitable operations and generate funds there from and/or raise equity capital or borrowings sufficient to meet current and future obligations and ongoing operating losses. These uncertainties cast significant doubt on the ability of the Company to continue operations as a going concern. Management intends to finance operating costs over the next twelve months with loans from directors and companies controlled by directors and/or private placement of common shares. These financial statements do not include any adjustments that might result from this uncertainty.

On March 11, 2020, the World Health Organization declared COVID-19 a global pandemic and has adversely affected global workforces, financial markets, and the general economy. It is not possible for the Company to determine the duration or magnitude of the adverse results of COVID-19 nor its effects on the Company’s business or operations. The Company anticipates this could have an adverse impact on its business, results of operations, financial position and cash flows in 2021.

2. BASIS OF PRESENTATION

Statement of compliance

These unaudited condensed consolidated interim financial statements have been prepared in accordance with IAS 34 – Interim Financial Reporting as issued by the International Accounting Standards Board (“IASB”). Accordingly, certain disclosures included in annual financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the IASB have been condensed or omitted and these unaudited condensed consolidated interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended February 28, 2021. The condensed consolidated interim financial statements were authorized for issue by the Board of Directors on July 26, 2021.

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ASHANTI SANKOFA INC. NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED AUGUST 31, 2021 AND 2020 Unaudited - Expressed in Canadian Dollars

2. BASIS OF PRESENTATION (Continued)

Significant estimates and assumptions

The preparation of financial statements in accordance with IFRS requires the Company to make estimates and assumptions concerning the future. The Company’s management reviews these estimates and underlying assumptions on an ongoing basis, based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Revisions to estimates are adjusted for prospectively in the period in which the estimates are revised.

Estimates and assumptions where there is significant risk of material adjustments to assets and liabilities in future accounting periods include the recoverability of the carrying value of exploration and evaluation assets, fair value measurements for financial instruments, and the recoverability and measurement of deferred tax assets.

Significant judgments

The preparation of financial statements in accordance with IFRS requires the Company to make judgments, apart from those involving estimates, in applying accounting policies. The most significant judgments applying to the Company’s financial statements include: the assessment of the Company’s ability to continue as a going concern and whether there are events or conditions that may give rise to significant uncertainty; the classification/allocation of expenditures as exploration and evaluation expenditures or operating expenses; and the classification of financial instruments.

Accounting standards and interpretations issued but not yet effective

The Company has reviewed the accounting standards or amendments to existing accounting standards that have been issued but have future effective dates and determined that these are either not applicable or are not expected to have a significant impact on the Company’s financial statements.

3. FINANCIAL AND CAPITAL RISK MANAGEMENT

The Company has determined the estimated fair values of its financial instruments based on appropriate valuation methodologies; however, considerable judgment is required to develop these estimates. The fair values of the Company’s financial instruments are not materially different from their carrying values.

	Ref. a b	August 31, 2021 $ 12,641 460,939	February 28, 2021 $ 85,638 462,435
Financial assets Financial liabilities

a. Comprises cash

b. Comprises accounts payable and amounts due to related parties (Note 6).

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ASHANTI SANKOFA INC. NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED AUGUST 31, 2021 AND 2020 Unaudited - Expressed in Canadian Dollars

3. FINANCIAL AND CAPITAL RISK MANAGEMENT (Continued)

Management of Industry and Financial Risk

The Company is engaged primarily in mineral exploration and manages related industry risk issues directly. The Company may be at risk for environmental issues and fluctuations in commodity pricing. Management is not aware of and does not anticipate any significant environmental remediation costs or liabilities in respect of its current operations.

The Company’s financial instruments are exposed to certain financial risks, which include the following:

Credit risk

Credit risk is the risk of loss due to the counterparty's inability to meet its obligations. The Company’s exposure to credit risk is on its cash and other receivables. Risk associated with cash is managed through the use of major banks which are high credit quality financial institutions as determined by rating agencies. Other receivables comprise sales tax refunds from the Canadian federal government.

Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulties in meeting obligations when they become due. The Company ensures that there is sufficient capital in order to meet short-term operating requirements, after taking into account the Company’s holdings of cash. The Company’s cash are held in corporate bank accounts available on demand. Liquidity risk has been assessed as being high.

Market Risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: currency risk, interest rate risk and price risk.

Currency Risk

The Company is subject to normal market risks including fluctuations in foreign exchange rates and interest rates. While the Company manages its operations in order to minimize exposure to these risks, the Company has not entered into any derivatives or contracts to hedge or otherwise mitigate this exposure.

Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is not exposed to significant interest rate risk relating to its related party balances (Note 7).

Price Risk

The Company is exposed to price risk with respect to equity prices. Price risk as it relates to the Company is defined as the potential adverse impact on the Company’s ability to raise financing due to movements in individual equity prices or general movements in the level of the stock market. The Company closely monitors individual equity movements and the stock market to determine the appropriate course of action to be taken by the Company.

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ASHANTI SANKOFA INC. NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED AUGUST 31, 2021 AND 2020 Unaudited - Expressed in Canadian Dollars

3. FINANCIAL AND CAPITAL RISK MANAGEMENT (Continued)

Capital management

The Company's policy is to maintain a strong capital base so as to maintain investor and creditor confidence and to sustain future development of the business. The capital structure of the Company consists of components of shareholders' equity. There were no changes in the Company's approach to capital management during the year. The Company is not subject to any externally imposed capital requirements.

Accounts payable and accrued liabilities:		August 31, 2021 $ 460,939 - 450,939	February 28, 2021 $ 515,516 - 515,516
Accounts payable & Accrued liabilities

4. EXPLORATION AND EVALUATION ASSETS

Exploration and evaluation assets comprise the North Ashanti - Anuoro project located in West Africa. The Company, through its wholly-owned subsidiary Ashanti, holds the 65 square km Anuoro license which is subject to a 10% carried interest held by the government of the Republic of Ghana. On June 27, 2019, the Company received a letter from Ministry of Lands and Natural Resources stating the Anuoro prospecting license had been renewed until June 27, 2022. As at February 29, 2020, management decided to write-down the value of the property to $250,000 to reflect its estimated fair value. As at May 31, 2021, the Company’s Anuoro property’s carrying value is $250,000 (February 29, 2020 - $250,000) (Note 7).

5. EQUITY AND RESERVES

Share Capital

Authorized share capital of the Company consists of an unlimited number of fully paid common shares without par value.

Year ended February 28, 2021

On February 23, 2021, the Company closed a non-brokered private placement and issued 7,500,000 units at a price of $0.02 per unit for gross proceeds of $150,000. Share issued costs of $5,000 were incurred. Each unit consists of one common share and one transferable share purchase warrant to purchase one additional common share at an exercise price of $0.05 per share for a term of two years. A total of 6,250,000 units were subscribed for by directors of the Company.

Period ended May 31, 2021

There were no common shares issued during the period ended May 31, 2021.

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ASHANTI SANKOFA INC. NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED AUGUST 31, 2021 AND 2020 Unaudited - Expressed in Canadian Dollars

5. EQUITY AND RESERVES (continued)

Share Purchase Warrants

Year ended February 29, 2021

On February 23, 2021, the Company issued 7,500,000 share purchase warrants as part of the $150,000 private placement. The warrants expire two years from the date of issuance and are exercisable at $0.05 per share. No value was assigned to these warrants under the residual method.

During the year ended February 28, 2021, 24,666,663 warrants expired without exercise.

Period ended May 31, 2021

There were no warrants issued during the period ended May 31, 2021.

For three months ended May 31, 2021, warrant transactions are summarized as follows:

		Number of Warrants 14,500,000 14,500,000	Weighted Average Exercise Price $ 0.05 0.05	Weighted Average Life Remaining (Years) 1.16 0.91
Balance, February 28, 2021
Balance, May 31, 2021

As at May 31, 2021, the following warrants were outstanding:

Number of Warrants	Number of Warrants	Exercise Price	Expiry Date
	7,500,000 7,000,000	$0.05 $0.05	February 23, 2023 June 10, 2021*

(Note 7)

Stock Options

Stock-Option Plan

The Company has a stock option plan, approved by the Board of Directors and by the shareholders, that allows the Company to grant incentive stock options to its directors, officers, employees and consultants. The maximum number of shares reserved for issuance under the plan are 5,546,839. The exercise price, term (not to exceed ten years) and vesting provisions are authorized by the Board of Directors at the time of the grant and pursuant to the terms of the Stock Option Plan. Stock options granted to a consultant performing investor relations activity shall vest over a minimum of twelve months with no more than ¼ of such options vesting in any three months period.

Year ended February 28, 2021

There were no options granted during the year ended February 28, 2021.

Period ended May 31, 2021

There were no options granted during the period ended May 31, 2021.

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ASHANTI SANKOFA INC. NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED AUGUST 31, 2021 AND 2020 Unaudited - Expressed in Canadian Dollars

5. EQUITY AND RESERVES (continued)

Stock Options (continued)

Stock option transactions are summarized as follows:

	Number of Options 2,675,000 2,675,000	Weighted Average Exercise Price $0.05 $0.05	Weighted Average Life Remaining (Years) 2.44 2.19
Balance, February 28, 2021
Balance, May 31, 2021

As at May 31, 2021, the following options were outstanding and exercisable:

Number of Options	Number of Options		Exercise Price	Expiry Date
	1,150,000 1,525,000		$0.05 $0.05	February 15, 2023 October 30, 2023

6. RELATED PARTY TRANSACTIONS

The Company’s related parties include its subsidiaries, significant shareholder, and key management personnel. Transactions with related parties for goods and services are made on normal commercial terms and are considered to be at arm’s length. The remuneration of the Company’s directors and other key management personnel during the years ended August 31, 2021 are as follows:

	August 31, 2021	February 28, 2020
Management fees (a) Professional fees (b)	$ 12,000 10,628	$ 48,000 103,955

As at May 31, 2021, the Company was indebted to its related parties for the amounts as below:

	August 31, 2021	February 28, 2021
	$	$
Due to related parties (a) (b)	145,672	168,234
Due to shareholder (c)	30,353	37,844
	145,672	206,078

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ASHANTI SANKOFA INC. NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED AUGUST 31, 2021 AND 2020 Unaudited - Expressed in Canadian Dollars

6. RELATED PARTY TRANSACTIONS (continued)

• (a) During the period ended May 31, 2021, the Company incurred $12,000 (2020 - $12,000) for management fees to the CEO and a director for services provided. As at May 31, 2021, $94,000 (February 29, 2021 - $82,000) remains unpaid.

• (b) During the period ended May 31, 2021, the Company incurred $9,000 (2020 - $9,000) for professional fees to the CFO for accounting services performed. The Company also incurred $3,750 (2020 – $3,750) of professional fees to the Corporate Secretary for the legal services performed. As at May 31, 2021, $99,622 (February 28, 2021 - $86,234) remains unpaid to these two parties.

• (c) During the period ended May 31, 2021, the Company repaid $37,844 to a significant shareholder. As at May 31, 2021, $Nil (February 28, 2021 - $37,844) remains unpaid to this shareholder. These amount owing are unsecured, non-interest bearing and have no fixed repayment terms.

7. SUBSEQUENT EVENTS

On June 10, 2021, 7,000,000 share purchase warrants expired unexercised.

On June 30, 2021, the Company received a notice from Minerals Commission (dated on June 18, 2021). The notice demands the Company to pay Annual Mineral Right Fees for Anuora River Prospecting Licence a total of US$69,090 from 2019 to 2021 (US$23,030 each year) within 14 days from the date of the notice. The notice also indicates that the Minister on the recommendation of the Commission may suspend or cancel the licence if the Company fails to pay the fees.

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