Playgon Games : DEAL Q2 June 30 2022 FS

PLAYGON GAMES INC.

Condensed Interim Consolidated Financial Statements

For the three and six months ended June 30, 2022 and 2021

(Unaudited - expressed in Canadian Dollars)

NOTICE OF NO AUDITOR REVIEW OF

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

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

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

PLAYGON GAMES INC.

Condensed Interim Consolidated Statements of Financial Position (Unaudited - expressed in Canadian Dollars)

		June 30,	December 31,
	Note	2022	2021
		$	$
ASSETS
Current assets
Cash		539,485	5,930,003
Amounts receivable		281,047	162,480
Sales tax receivable		104,227	81,365
Prepaids		219,420	333,711
Other assets	3	435,890	440,145
		1,580,069	6,947,704
Property and equipment	4	865,651	1,060,567
Intangible assets	5	7,269,697	8,497,522
Right-of-use asset	6	381,050	573,670
		10,096,467	17,079,463
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities	7, 11	2,061,224	1,911,411
Loans payable	8	1,100,000	200,000
Purchase obligation payable		32,338	42,881
Current portion of lease liability	6	315,285	389,084
		3,508,847	2,543,376
Long-term debt	9	565,229	559,231
Long-term portion of lease liability	6	78,740	190,346
		4,152,816	3,292,953
SHAREHOLDERS' DEFICIENCY
Share capital	10	54,533,474	54,533,474
Reserves	10	4,468,426	4,051,237
Accumulated other comprehensive loss		109,515	67,655
Accumulated deficit		(53,167,764)	(44,865,856)
		5,943,651	13,786,510
		10,096,467	17,079,463

Nature and continuance of operations (Note 1)

Subsequent event (Note 15)

Approved on behalf of the Board of Directors on August 26, 2022:

/s/ Darcy Krogh	/s/ Mike Marrandino
Darcy Krogh	Mike Marrandino
Director	Director

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

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PLAYGON GAMES INC.

Condensed Interim Consolidated Statements of Loss and Comprehensive Loss (Unaudited - expressed in Canadian Dollars)

		Three months ended June	Six months ended
			30,		June 30,
	Note	2022	2021	2022	2021
		$	$	$	$
Revenue	14	216,881	2,218	357,758	2,218
Operating expenses
Advertising and promotion		25,704	16,385	135,512	166,003
Consulting fees		395,911	71,873	792,179	184,479
Data access fees		278,373	88,830	479,040	237,581
Depreciation and amortization	4, 5, 6	831,410	760,752	1,659,583	1,507,553
Interest and bank charges		30,220	34,548	61,441	82,457
Management and director's fees	11	212,749	233,397	413,407	417,306
Other general and administrative
expenses		271,755	197,331	465,039	364,200
Professional fees		117,699	87,934	187,648	249,298
Regulatory and shareholder services		3,876	21,478	23,538	64,746
Rent	6	35,530	50,268	63,729	111,816
Sales commissions		40,944	-	40,944	-
Salaries and benefits		2,128,644	1,584,824	3,828,525	2,819,240
Share-based compensation	10	176,612	415,658	417,189	860,700
Travel		30,822	23,738	52,709	35,327
		4,580,249	3,587,016	8,620,483	7,100,706
Loss before other income (expenses)		(4,363,368)	(3,584,798)	(8,262,725)	(7,098,488)
Other income (expenses)
Interest income		4,986	6,963	14,235	8,347
Foreign exchange gain/(loss)		(43,971)	(12,226)	(53,418)	13,059
		(38,985)	(5,263)	(39,183)	21,406
Loss for the period		(4,402,353)	(3,590,061)	(8,301,908)	(7,077,082)
Foreign currency translation adjustment		34,004	(14,733)	41,860	(37,831)
Comprehensive loss for the period		(4,368,349)	(3,604,794)	(8,260,048)	(7,114,913)
Basic and diluted loss per common share		(0.02)	(0.02)	(0.03)	(0.03)
Weighted average number of common
shares outstanding
Basic and diluted		253,331,449	213,134,122	253,331,449	203,245,809

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

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PLAYGON GAMES INC.

Condensed Interim Consolidated Statements of Cash Flows (Unaudited - expressed in Canadian Dollars)

	Six months ended
		June 30,
	2022	2021
	$	$
Cash flows used in operating activities
Loss for the period	(8,301,908)	(7,077,082)
Items not affecting cash:
Accrued interest expense	31,826	41,826
Depreciation and amortization	1,659,583	1,507,553
Share-based compensation	417,189	860,700
Unrealized foreign exchange	(6,288)	2,004
Changes in non-cash working capital:
Amounts receivable	(118,567)	(1,769)
Sales tax receivable	(22,862)	13,666
Prepaids	114,291	1,408
Accounts payable and accrued liabilities	136,056	239,914
	(6,090,680)	(4,411,780)
Cash flows provided by investing activity
Acquisition of property and equipment	(25,325)	(325,439)
	(25,325)	(325,439)
Cash flows provided by financing activities
Loan proceeds	900,000	20,000
Loan repayments	-	(564,750)
Interest paid on loans	-	(21,318)
Repayment of lease liability	(208,632)	(89,410)
Warrants exercised	-	7,070,924
	691,368	6,415,446
Effect of foreign exchange on cash	34,119	(31,283)
Change in cash during the period	(5,390,518)	1,646,944
Cash, beginning of period	5,930,003	781,456
Cash, end of period	539,485	2,428,400

Supplemental disclosure with respect to cash flows (Note 12)

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

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