TraceSafe Inc.

Condensed Interim Consolidated Financial Statements

Period Ended June 30, 2022

(Expressed in United States Dollars)

(Unaudited)

- 1 -

TraceSafe Inc.

Condensed Interim Consolidated Statements of Financial Position

(Expressed in US Dollars-Unaudited)

June 30

December 31

Notes

2022

2021

ASSETS

Current assets

Cash

$

67,069

$

356,665

Restricted term deposits

5

51,528

51,543

Trade and other receivables

6

122,781

510,245

Prepaids

7

162,553

343,408

Inventories

8

419,852

556,962

Deferred contract asset

14

168,895

209,429

Total current assets

992,678

2,028,252

Property and equipment

9

41,312

64,294

Investment

10

2,202,449

2,202,449

Total Assets

$

3,236,439

$

4,294,995

LIABILITIES AND SHAREHOLDERS' DEFICIENCY

Current liabilities

Trade payables and accrued liabilities

13

$

1,831,234

$

2,387,692

Deferred revenue

14

413,905

1,154,921

Loans payable

15

623,075

756,275

Total current liabilities

2,868,214

4,298,888

Loans payable

15

2,150,457

-

Derivative liabilities

15

155,068

-

Total Liabilities

5,173,739

4,298,888

Shareholders' Deficiency

16

20,095,592

19,840,230

Share capital

Reserves

16

1,703,167

898,122

Accumulated other comprehensive income

1,251,057

1,279,742

Deficit

(18,358,235)

(15,806,306)

Equity attributable to owners of the parent

4,691,580

6,211,788

Equity attributable to non-controlling interest

4

(6,628,880)

(6,215,681)

Total Shareholders' Deficiency

(1,937,300)

(3,893)

Total Liabilities and Shareholders' Deficiency

$

3,236,439

$

4,294,995

Nature and continuance of operations (note 1)

Commitment (note 22)

Subsequent events (note 25)

Approved and authorized for issuance by the Board of Directors on Aug 25, 2022.

"James Passin"

"Wayne Lloyd"

Director

Director

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

- 2 -

TraceSafe Inc.

Condensed Interim Consolidated Statements of Comprehensive Loss

(Expressed in US Dollars-Unaudited)

Three months ended June 30

Six months ended June 30

Notes

2022

2021

2022

2021

Revenue

Product sales

20

$

550,941

2,849,701

$

985,109

$ 3,689,936

Service income

20

265,744

549,608

1,088,560

996,548

816,685

3,399,309

2,073,669

4,686,484

Cost of revenue

20

(37,508)

(3,010,170)

(438,384)

(4,150,094)

779,177

389,139

1,635,285

536,390

Operating expenses

Bad debt expense

6

950

-

950

5,000

Bank Fees

2,312

3,505

6,347

7,367

Amortization

9,11

14,108

1,697

22,965

2,440

Research and development

17

337,678

489,124

776,657

945,038

General and administration

17

127,588

139,464

247,210

382,242

Marketing

18,848

95,687

77,907

123,875

Personnel

17

776,981

955,696

1,766,458

1,898,439

Professional fees

17

439,858

300,235

1,023,042

532,482

Regulatory

7,923

9,157

10,892

23,075

Share-based compensation

16,17

264,129

-

805,045

2,126,286

1,900,375

1,994,565

4,737,473

6,046,243

Operating loss

(1,211,198)

(1,605,426)

(3,102,188)

(5,509,853)

Other items

Change in fair value of

15

(261,184)

-

(603,448)

-

derivative liability

Other income

24

(15,305)

-

(68,277)

(11,891)

Finance costs

16

248,805

129,944

506,283

243,716

Foreign exchange

(48,102)

11,193

(21,645)

22,692

Net loss

(1,135,113)

(1,746,563)

(2,915,101)

(5,764,370)

Tax expense

49,731

60,288

50,030

60,288

Net loss after tax

(1,184,844)

(1,806,851)

(2,965,131)

(5,824,658)

Other comprehensive loss

Items that may be reclassified

to profit or loss

Exchange differences on

translation of foreign

(28,680)

-

(28,680)

-

operations

Total comprehensive loss

$

(1,213,524)

(1,806,851)

$

(2,993,814)

$ (5,824,658)

Total comprehensive loss for

the period attributable to:

Owners of the parent

4

$

(1,239,211)

$ (393,134)

$

(2,580,616)

$ (3,278,036)

Non-controlling interest

33,340

(1,413,717)

(413,200)

(2,546,622)

Total comprehensive loss

$

(1,205,871)

$ (1,806,851)

$

(2,993,814)

$ (5,824,658)

Loss per share - basic and

diluted

$

(0.03)

$ (0.01)

$

(0.06)

$ (0.08)

Weighted average number of

shares outstanding

43,178,086

40,606,041

43,178,086

40,606,041

- basic and diluted

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

- 3 -

TraceSafe Inc.

Condensed Interim Consolidated Statements of Changes in Shareholders' Deficiency

(Expressed in US Dollars-Unaudited)

Share Capital

Accumulated Other

Equity attributable

to non-controlling

Number of

Obligation to

Comprehensive

Equity attributable to

interest

Shares

Amount

issue shares

Reserves

Income

Deficit

owners of parent

Total

Balance, December 31, 2020

35,765,784

$

15,946,318

$

820,690

$

1,752,881

$

2,195,480

$

(15,916,656)

$

4,798,713

$

3,514,415

$

8,313,128

Shares issued pursuant to acquisition

agreement

4,400,000

1,848,049

-

-

-

-

1,848,049

(1,848,049)

-

Options exercised

455,000

166,727

-

(72,600)

-

-

94,127

-

94,127

Warrants exercised

1,300,170

511,433

-

-

-

-

511,433

-

511,433

Shares issued for services

1,240,301

566,638

-

-

-

-

566,638

-

566,638

Stock-based compensation

-

-

-

328,052

-

-

328,052

-

328,052

Performance shares issued

2,550,000

820,690

(820,690)

-

-

-

-

-

Option reserve adjusted due to

forfeiture

-

-

-

(1,218,132)

-

1,218,132

-

-

-

Warrant reserve adjusted from share

capital

-

(19,625)

-

22,619

-

-

2,994

-

2,994

Equity component on convertible

debenture

-

-

-

85,302

-

-

85,302

-

85,302

Remeasurement investment in

Airbeam

-

-

-

-

(900,255)

-

(900,255)

-

(900,255)

Translation difference

-

-

-

-

(15,483)

-

(15,483)

-

(15,483)

Net loss for the year

-

-

-

-

-

(1,107,782)

(1,107,782)

(7,882,047)

(8,989,829)

Balance December 31, 2021

45,711,255

$

19,840,230

$

-

$

898,122

$1,279,742

$

(15,806,306)

$6,211,788

$

(6,215,681)

$

(3,893)

Shares issued for services

809,403

216,090

-

-

-

-

216,090

-

216,090

Shares issued on conversion of

promissory notes

336,666

39,272

-

-

-

-

39,272

-

39,272

Stock-based compensation

-

-

-

805,045

-

-

805,045

-

805,045

Translation difference

-

-

-

-

(28,680)

-

(28,680)

-

(28.680)

Net loss for the period

-

-

-

-

-

(2,551,931)

(2,551,931)

(413,200)

(2,965,130)

Balance June 30, 2022

46,857,324

$

20,095,592

$

-

$

1,703,167

$1,251,057

$

(18,358,235)

$4,691,584

$

(6,628,881)

$

(1,937,298)

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

- 4 -

TraceSafe Inc.

Condensed Interim Consolidated Statements of Cash Flows

(Expressed in US Dollars-Unaudited)

Six months ended June 30,

2022

2021

Cash provided by (used in):

Operating activities

Net loss

$

(2,965,129)

$

(5,824,687)

Adjustment to reconcile non-cash items

Amortization

22,446

73,573

Finance costs

279,771

-

Change in fair value of derivative liability

(603,448)

Shares issued for services

216,090

-

Share-based compensation

805,045

-

Foreign exchange

346

-

Changes in working capital

Trade and other receivables

375,559

(991,244)

Prepaids

192,760

651,938

Inventories

137,110

-

Trade payables and accrued liabilities

(542,968)

856,451

Deferred revenue

(741,016)

2,770,910

Deferred contract asset

40,534

-

Net cash used in operating activities

(2,782,900)

(2,463,059)

Investing activities

Purchase of property and equipment

-

(31,444)

Net cash used in investing activities

-

(31,444)

Financing activities

(13,235)

-

Lease payments

Proceeds from share issuance

-

2,924,396

Proceeds from issuance of convertible debt

3,000,000

-

Convertible debt transaction costs

(298,865)

-

Repayment of loan payable

(205,183)

(682,194)

Proceeds from loan payable

39,272

311,594

Net cash provided by financing activities

2,521,989

2,553,796

Change in cash

(260,911)

59,293

Effect of change in foreign exchange rates

(28,685)

1

Cash, beginning of period

356,665

605,426

Cash, end of period

$

67,069

$

664,720

Supplemental cash flow information (note 23)

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

- 5 -

Attachments

  • Original Link
  • Original Document
  • Permalink

Disclaimer

TraceSafe Inc. published this content on 26 August 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 08 September 2022 19:39:00 UTC.