Reklaim : Interim Financial Statements 1Q24 - Consolidated

Reklaim Ltd.

Unaudited Condensed Consolidated Interim Statements of Financial Position As at March 31, 2024 and December 31, 2023

(in Canadian Dollars)

		Note		March 31, 2024		December 31, 2023
Assets
Current Assets
Cash and cash equivalents			$	554,618	$	164,279
Trade and other receivables	4, 14		564,430		1,191,121
Prepaid expenses				48,036		66,882
Total current assets				1,167,084		1,422,282
Non Current Assets
Property and equipment, net	5		18,960		22,977
Total assets			$	1,186,044	$	1,445,259
Liabilities and Shareholders' Equity (Deficit)
Current Liabilities
Trade and other liabilities	6	$	1,045,064	$	1,162,398
Contract liabilities				1,867		1,867
Current portion of loans payable	7		8,395		8,272
Current portion of secured debentures	8		943,586		58,036
Total current liabilities				1,998,912		1,230,573
Non-current portion of loans payable	7		5,124		7,271
Non-current portion of secured debentures	8		-		888,105
Total liabilities			$	2,004,036	$	2,125,949
Shareholders' equity (deficit)
Share capital	10		29,166,806		29,128,164
Warrants	10		915,766		921,376
Contributed surplus				3,505,382		3,505,092
Cumulative translation adjustment				148,287		138,682
Deficit				(34,554,233)		(34,374,004)
Total Shareholders' equity (deficit)				(817,992)		(680,690)
Total Shareholders' equity (deficit) and liabilities			$	1,186,044	$	1,445,259
Going concern uncertainity, related party, commitments, and
subsequent event	2, 9, 12, 17
Approved on behalf of the Board of Directors:
Original signed by		Original signed by
Neil Sweeney, CEO & Founder		Andrew Elinesky, Chair of the Audit Committee

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

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Reklaim Ltd.

Unaudited Condensed Consolidated Interim Statements of Income and Comprehensive Income Three months ended March 31, 2024 and 2023

(in Canadian Dollars)

			Three months ended March 31,
	Note		2024		2023
Revenue	13	$	728,427	$	728,304
Cost of services	14		132,398		210,168
Gross profit
		596,029		518,136
Expenses			298,437
General and administrative	9, 12			404,100
Research and development			105,082		111,124
Selling and business development			296,608		82,741
Marketing			76,131		71,165
			776,258		669,130
Net loss
		(180,229)		(150,994)
Other comprehensive income			9,605
Foreign currency translation differences				1,241
Total comprehensive loss		$	(170,624)	$	(149,753)
Earnings (loss) per share			0.00
Earnings (loss) per share, basic and diluted				(0.00)
Weighted average shares outstanding, basic and diluted			114,293,156		92,640,206

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

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Reklaim Ltd.

Unaudited Condensed Consolidated Interim Statements of Changes in Equity Three months ended March 31, 2024 and 2023

(in Canadian Dollars)

										Cumulative
		Number of Common	Shares to be						Contributed	translation		Accumulated		Total Equity
		Shares	Issued		Share Capital		Warrants		Surplus	adjustment		Deficit		(Deficiency)
Balance as at January 1, 2023		92,640,206	-	$	28,240,932	$	2,428,131	$	1,878,379	$	176,275	$	(35,283,736)	$	(2,560,019)
Reclassing expired warrants	10	-	-		-		(1,529,381)		1,529,381		-		-		-
Share-based compensation	11	-	-		-		-		67,815		-		-		67,815
Net loss and comprehensive loss		-	-		-		-		-		1,241		(150,994)		(149,753)
Balance as at March 31, 2023		92,640,206	-		28,240,932		898,750		3,475,575		177,516		(35,434,730)		(2,641,957)
Balance as at January 1, 2024		114,421,495	1,832,241		29,128,164		921,376		3,505,092		138,682		(34,374,004)		(680,690)
Shares issued related to prior peroid		1,832,241	(1,832,241)		-		-		-		-		-		-
Exercise of warrants	10	330,000	-		38,642		(5,610)								33,032
Share-based compensation	11	-	-		-		-		290		-		-		290
Net income and comprehensive income		-	-		-		-		-		9,605		(180,229)		(170,624)
Balance as at March 31, 2024		116,583,736	-	$	29,166,806	$	915,766	$	3,505,382	$	148,287		(34,554,233)	$	(817,992)

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

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Reklaim Ltd.

Unaudited Condensed Consolidated Interim Statements of Cash Flows Three months ended March 31, 2024 and 2023

(in Canadian Dollars)

			Three months ended March 31,
	Note		2024		2023
Operating activities		$	(180,229)
Net loss		$	(150,994)
Depreciation of property and equipment	5		4,017		6,242
Interest and accretion expense			98,989		45,128
Share based compensation	11		290		67,815
Net change in non-cash operating working capital	15		540,578		(100,360)
Net cash flows provided by/(used in) operating activities			463,645		(132,169)
Financing activities			33,032
Proceeds on exercise of warrants	11			-
Proceeds from debt / secured debentures	8		-		23,733
Repayment of debt	7		(2,147)		(2,024)
Interest paid	8		(113,796)		(72,953)
Cash flows used in financing activities			(82,911)		(51,244)
Investing activities			-
Purchase of property and equipment	5			(4,486)
Cash flows used in investing activities			-		(4,486)
Effect of foreign exchange on working capital			9,605		1,241
Net increase/(decrease) in cash and cash equivalents			390,339		(186,658)
Cash and cash equivalents, beginning of year			164,279		244,464
Cash and cash equivalents, end of period
	$	554,618	$	57,806

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

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Reklaim Ltd.

Notes to the Condensed Consolidated Interim Financial Statements For the three months ended March 31, 2024 and 2023

(in Canadian Dollars)

1. CORPORATE INFORMATION

Reklaim Ltd. ("Reklaim," the "Company") is a company driven by consumer data and privacy evolution. Offering compliant, first-party data to brands & agencies, platforms, and data companies, Reklaim allows consumers to visit the platform, confirm their identity and unveil data that has been collected and sold on them for years. Reklaim enables consumers to take back control of this data by setting up a Reklaim account where, should they choose to, consumers can be compensated for using their data.

The address of the Company's corporate office is 145 King Street West, Suite 2200, Toronto, ON M5H 4G2.

Reklaim, formerly Killi Ltd., was incorporated on January 14, 1997, according to the ABCA as 723765 Alberta Ltd.

On May 25, 2020, the Company changed its name from Freckle Ltd. to Killi Ltd., and the Company's common shares commenced trading on the TSX Venture Exchange (the "TSXV") under the symbol "MYID."

On November 4, 2020, the Company completed its up-list, and the Company's common shares commenced trading on the OTCQB Venture Market under the symbol "MYIDF."

On November 1, 2021, the Company name was changed from Killi Ltd. to Reklaim Ltd.

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Reklaim Ltd.

Notes to the Condensed Consolidated Interim Financial Statements For the three months ended March 31, 2024 and 2023

(in Canadian Dollars)

2. GOING CONCERN UNCERTAINTY

These consolidated financial statements have been prepared on a going concern basis in accordance with International Financial Reporting Standards ("IFRS") as issued by International Accounting Standards Board (IASB). The going concern basis of presentation assumes the Company will continue to operate for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of business. During the three months ended March 31, 2024, the Company generated a comprehensive loss of $170,624 (2023 - ($149,753)) and cash flows from operations of $463,645 (2023 - ($132,169)). In addition, the Company has an accumulated deficit of $34,554,233 (December 31, 2023 - $34,374,004).

In assessing whether the going concern assumption is appropriate, management considers all available information about the future, which is at least, but not limited to, twelve months from the end of the reporting period. This assessment is based upon planned actions that may or may not occur for several reasons, including the Company's own resources and external market conditions.

The Company's ability to continue as a going concern, realize its assets and discharge its liabilities in the normal course of business, meet its corporate administrative expenses, continue its research and development activities and support the operations of its subsidiaries is dependent upon management's ability to obtain additional financing, through various means including but not limited to equity financing. No assurance can be given that any such additional funding will be available or that it can be obtained on terms favorable to the Company. The above factors indicate a material uncertainty that may cast significant doubt about the Company's ability to continue operating as a going concern.

These unaudited condensed consolidated interim financial statements do not reflect adjustments that would be necessary if the going concern assumption were not appropriate. If the going concern basis were not appropriate for these financial statements, then adjustments would be necessary to the carrying amounts of assets and liabilities, the reported expenses, and the classifications used in the statements of financial position. These adjustments could be material.

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Reklaim Ltd.

Notes to the Condensed Consolidated Interim Financial Statements For the three months ended March 31, 2024 and 2023

(in Canadian Dollars)

3. MATERIAL ACCOUNTING POLICIES

The following accounting policies have been used throughout all periods presented in the consolidated financial statements.

(a) Basis of preparation and statement of compliance with IFRS

These unaudited condensed consolidated interim financial statements, including comparatives, have been prepared in accordance with IAS 34 and International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and the Interpretations of the International Financial Reporting Interpretations Committee ("IFRIC") and in effect at the closing date of March 31, 2024.

On May 28, 2024, the Company's Board of Directors approved these unaudited condensed consolidated interim financial statements and authorized them for issue.

(b) Basis of preparation and statement of compliance with IFRS

The consolidated financial statements have been prepared on the historical cost basis except for certain financial instruments that are measured at fair value, as explained in the accounting policies.

(c) Basis of consolidation

The condensed consolidated interim financial statements include the accounts of the Company and its subsidiaries. The chart below summarizes the entities included in the consolidated financial statements as at March 31, 2024, and 2023.

Entity Name	Place of Incorporation	Ownership		Functional Currency
Reklaim Ltd.	Ontario, Canada	Parent			Canadian dollars
Reklaim Inc.	Ontario, Canada	Wholly	owned	Canadian dollars
		subsidiary	of
		Reklaim Ltd.
Reklaim Holdings Ltd.	Ontario, Canada	Wholly	owned	Canadian dollars
		subsidiary	of
		Reklaim Inc.
Reklaim USA Inc.	Delaware, USA	Wholly	owned	United States dollars
		subsidiary	of
		Reklaim Inc.

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3. MATERIAL ACCOUNTING POLICIES (continued)

(d) Functional currency and foreign currency translation

These condensed consolidated interim financial statements are presented in Canadian dollars, which is also the parent's functional currency. Transactions in foreign currencies are translated into the functional currency of the relevant parent/subsidiary company using the exchange rate in effect on the transaction date. Foreign exchange gains and losses resulting from the settlement of such transactions and the remeasurement of monetary items at the reporting date exchange rate are recognized in a net loss. Non- monetary items measured at historical cost are translated using the exchange rate at the date of the transaction. The functional currency of the subsidiaries remains unchanged during the reporting period.

Monetary assets and liabilities of Reklaim USA Inc. are translated into Canadian dollars at period-end exchange rates. In contrast, non-monetary items are measured at historical cost and are translated using the exchange rate at the date of the transaction. Income, expenses, and foreign operations cash flows are translated into Canadian dollars using monthly average exchange rates. Exchange differences resulting from the translation of foreign operations are recognized in other comprehensive losses.

(e) Critical accounting estimates and judgments

The Company's condensed consolidated interim financial statements are prepared in accordance with IFRS recognition and measurement principles that often require Management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts presented and disclosed in the consolidated financial statements.

Management reviews these estimates and assumptions on an ongoing basis based on historical experience, changes in business conditions and other relevant factors as it believes to be reasonable under the circumstances. Changes in facts and circumstances may result in revised estimates, and actual results could differ from those estimates. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

The estimates, judgments and assumptions applied in the unaudited condensed consolidated interim financial statements, including the key sources of estimation uncertainty were the same as those applied in the Company's last annual audited consolidated financial statements for the year ended December 31, 2023.

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4. TRADE AND OTHER RECEIVABLES

The amounts recognized in the consolidated statements of financial position relating to trade and other receivables are determined as follows:

		As at		As at
Input tax receivable		March 31, 2024		December 31, 2023
$	23,104	$	32,756
Trade accounts receivable, gross		565,022		1,201,110
Allowance for credit losses		(23,696)		(42,745)
	$	564,430	$	1,191,121

Trade receivables and other receivables consist of billings for revenue earned.

The changes in the expected credit loss are as follows:

All amounts are short-term. The net carrying value of trade receivables is considered a reasonable approximation of fair value.

5. PROPERTY AND EQUIPMENT

		Computer
Cost:		Equipment		Vehicle		Total
At December 31, 2022	$	105,022	$	40,053	$	145,075
Additions		9,492		-		9,492
At December 31, 2023	$	114,514	$	40,053	$	154,567
At March 31, 2024	$	114,514	$	40,053	$	154,567
Accumulated depreciation:
At December 31, 2022	$	90,622	$	21,139	$	111,761
Depreciation		13,153		6,676		19,829
Disposals		-		-		-
At December 31, 2023	$	103,775	$	27,815	$	131,590
Depreciation		2,348		1,669		4,017
At March 31, 2024	$	106,123	$	29,484	$	135,607
Carrying amounts:
At December 31, 2023	$	10,739	$	12,238	$	22,977
At March 31, 2024	$	8,391	$	10,569	$	18,960

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