Exhibit 99.2
Notes |
December 31, 2021 |
December 31, 2020 |
||||||||||
| ASSETS |
||||||||||||
| Current assets |
||||||||||||
| Cash and cash equivalents |
$ | $ | ||||||||||
| Trade and other receivables |
6 | |||||||||||
| Current portion of prepaid expenses and other assets |
7 | |||||||||||
| Current portion of long-term receivables |
6 | |||||||||||
| Total current assets |
$ | $ | ||||||||||
| Non-current assets |
||||||||||||
| Prepaid expenses and other assets |
7 | |||||||||||
| Long-term receivables |
6 | |||||||||||
| Right-of-use assets |
8 | |||||||||||
| Property and equipment |
9 | |||||||||||
| Intangible assets |
10 | |||||||||||
| Goodwill |
10 | |||||||||||
| Total non-current assets |
$ | $ | ||||||||||
| Total assets |
$ |
$ |
||||||||||
| LIABILITIES |
||||||||||||
| Current liabilities |
||||||||||||
| Bank indebtedness |
13 | $ | $ | |||||||||
| Trade payables and accrued liabilities |
11 | |||||||||||
| Deferred revenue |
5 | |||||||||||
| Current portion of loans and borrowings |
12 | |||||||||||
| Current portion of convertible debentures |
14 | |||||||||||
| Warrant liabilities |
15 | |||||||||||
| Current portion of lease liabilities |
8 | |||||||||||
| Current portion of other liabilities |
16 | |||||||||||
| Current portion of business acquisition payable |
18 | |||||||||||
| Total current liabilities |
$ | $ | ||||||||||
| Non-current liabilities |
||||||||||||
| Convertible debentures |
14 | |||||||||||
| Lease liabilities |
8 | |||||||||||
| Loans and borrowings |
12 | |||||||||||
| Deferred income tax liabilities |
25 | |||||||||||
| Other liabilities |
16 | |||||||||||
| Business acquisition payable |
18 | |||||||||||
| Total liabilities |
$ |
$ |
||||||||||
| EQUITY |
||||||||||||
| Share capital |
19 | |||||||||||
| Contributed surplus |
||||||||||||
| Accumulative other comprehensive income |
||||||||||||
| Deficit |
( |
) | ( |
) | ||||||||
| Total shareholders’ equity |
$ | $ | ||||||||||
| Non-controlling interest |
21 | |||||||||||
| Total equity |
$ |
$ |
||||||||||
| Total liabilities and equity |
$ |
$ |
||||||||||
“Russ McMeekin” |
“Michael Allman” |
| ||||
Director |
Director |
Year ended December 31, |
||||||||||||||||
Notes |
2021 |
2020 |
2019 |
|||||||||||||
Revenue |
4, 5 | $ | |
$ | |
$ | |
|||||||||
Cost of sales |
( |
) | ( |
) | ( |
) | ||||||||||
Gross profit |
$ | $ | $ | |||||||||||||
Expenses |
||||||||||||||||
Salaries, wages and benefits |
||||||||||||||||
Sales and marketing |
||||||||||||||||
Research and development |
||||||||||||||||
General and administration |
||||||||||||||||
Professional and consulting fees |
||||||||||||||||
Share-based compensation |
20 | |||||||||||||||
Depreciation and amortization |
8-10 | |||||||||||||||
Total expenses |
$ | $ | $ | |||||||||||||
Operating loss |
$ | $ | $ | |||||||||||||
Other expenses (income) |
||||||||||||||||
Finance costs |
22 | |||||||||||||||
Foreign exchange loss (gain) |
( |
) | ||||||||||||||
Business acquisition costs and other expenses |
17 | |||||||||||||||
Impairment |
9,10(a) | – | – | |||||||||||||
Fair value loss on derivatives |
23 | – | – | |||||||||||||
Other income |
24 | ( |
) | ( |
) | ( |
) | |||||||||
Loss before tax |
$ | $ | $ | |||||||||||||
Current tax expense (recovery) |
25 | ( |
) | |||||||||||||
Deferred tax (recovery) expense |
25 | ( |
) | ( |
) | ( |
) | |||||||||
Net loss for the year |
$ | $ | $ | |||||||||||||
Other comprehensive (income) loss |
||||||||||||||||
Foreign subsidiary translation differences |
( |
) | ( |
) | ||||||||||||
Comprehensive loss for the year |
$ |
$ |
$ |
|||||||||||||
Net loss (income) for the year attributable to: |
||||||||||||||||
mCloud Technologies Corp. shareholders |
||||||||||||||||
Non-controlling interest |
( |
) | ( |
) | ||||||||||||
$ |
$ |
$ |
||||||||||||||
Comprehensive loss (income) for the year attributable to: |
||||||||||||||||
mCloud Technologies Corp. shareholders |
||||||||||||||||
Non-controlling interest |
( |
) | ( |
) | ||||||||||||
$ |
$ |
$ |
||||||||||||||
Loss per share attributable to mCloud shareholders – basic and diluted |
$ |
$ |
$ |
|||||||||||||
Weighted average number of common shares outstanding - basic and diluted |
||||||||||||||||
Notes |
Number of Shares |
Share Capital |
Contributed Surplus |
Accumulated Other Comprehensive Income |
Deficit |
Total Shareholder’s Equity |
Non- controlling Interest |
Total Equity |
||||||||||||||||||||||||||||
Balance, December 31, 2020 |
$ | $ | $ | $ | ( |
) | $ | $ | $ | |||||||||||||||||||||||||||
Share-based payments |
20 | – | – | – | – | – | ||||||||||||||||||||||||||||||
RSUs exercised |
20 | ( |
) | – | – | ( |
) | – | ( |
|||||||||||||||||||||||||||
Broker warrants issued |
19(b) | – | – | – | – | – | ||||||||||||||||||||||||||||||
Shares issued in public offering, net of costs |
19(a) | – | – | – | – | |||||||||||||||||||||||||||||||
Warrants issued in public offering, net of costs |
19(a) | – | – | – | – | – | ||||||||||||||||||||||||||||||
Shares issued in private placement |
19(a) | – | – | – | – | |||||||||||||||||||||||||||||||
Shares issued on 2021 Debentures conversion, net |
19(a) | – | – | – | – | |||||||||||||||||||||||||||||||
Shares issued in USD public offering, net of costs |
19(a) | – | – | – | – | |||||||||||||||||||||||||||||||
Underwriter warrants issued in USD public offering |
19(a) | – | – | – | – | – | ||||||||||||||||||||||||||||||
Net loss for the year |
– | – | – | – | ( |
) | ( |
) | ( |
( |
||||||||||||||||||||||||||
Other comprehensive (loss) income for the year |
– | – | – | ( |
) | – | ( |
) | ( |
|||||||||||||||||||||||||||
Balance, December 31, 2021 |
$ |
$ |
$ |
$ |
( |
) |
$ |
$ |
$ |
|||||||||||||||||||||||||||
Notes |
Number of Shares |
Share Capital |
Contributed Surplus |
Accumulated Other Comprehensive Income |
Deficit |
Total Shareholder’s Equity |
Non- controlling Interest |
Total Equity |
||||||||||||||||||||||||||||
Balance, December 31, 2019 |
$ | $ | $ | $ | ( |
) | $ | $ | $ | |||||||||||||||||||||||||||
Share-based payments |
20 | – | – | – | – | – | ||||||||||||||||||||||||||||||
RSUs exercised |
20(b) | ( |
) | – | – | ( |
) | – | ( |
|||||||||||||||||||||||||||
Stock options exercised |
20(a) | ( |
) | – | – | – | ||||||||||||||||||||||||||||||
Warrants exercised |
( |
) | – | – | – | |||||||||||||||||||||||||||||||
Shares issued in business combination - CSA |
17(d) | – | – | – | – | |||||||||||||||||||||||||||||||
Shares issued in business combination - kanepi |
17(e) | – | – | – | – | |||||||||||||||||||||||||||||||
Shares issued for transaction costs - kanepi |
17(e) | – | – | – | – | |||||||||||||||||||||||||||||||
Shares issued for asset acquisition - AirFusion |
– | – | – | – | ||||||||||||||||||||||||||||||||
Shares issued on conversion of 2019 debentures |
19(b) | – | – | – | ||||||||||||||||||||||||||||||||
Issue of special warrants, net |
– | – | – | – | – | |||||||||||||||||||||||||||||||
Conversion of special warrants |
( |
) | – | – | – | – | – | |||||||||||||||||||||||||||||
Settlement of debt with RSUs |
– | – | – | – | – | |||||||||||||||||||||||||||||||
Shares issued in public offering, net of costs |
– | – | – | |||||||||||||||||||||||||||||||||
Net (loss) income for the year |
– | – | – | – | ( |
) | ( |
) | ( |
|||||||||||||||||||||||||||
Other comprehensive (loss) income for the year |
– | – | – | – | ( |
) | ||||||||||||||||||||||||||||||
Balance, December 31, 2020 |
$ |
$ |
$ |
$ |
( |
) |
$ |
$ |
$ |
|||||||||||||||||||||||||||
Notes |
Number of Shares |
Share Capital |
Contributed Surplus |
Accumulated Other Comprehensive Income |
Deficit |
Total Shareholder’s Equity |
Non- controlling Interest |
Total Equity |
||||||||||||||||||||||||||||
Balance, December 31, 2018 |
$ | |
$ | |
$ ( |
) | $ ( |
) | $ | $ | – | $ | ||||||||||||||||||||||||
Share-based payments |
20 | – | – | – | – | – | ||||||||||||||||||||||||||||||
RSUs exercised |
20(b) | ( |
) | – | – | – | – | – | ||||||||||||||||||||||||||||
Stock options exercised |
20(a) | ( |
) | – | – | – | ||||||||||||||||||||||||||||||
Share purchase warrants exercised |
18(b) | ( |
) | – | – | – | ||||||||||||||||||||||||||||||
Shares issued on business combination |
17(c) | – | – | – | – | |||||||||||||||||||||||||||||||
Transaction costs on business combination |
17(c) | – | – | – | – | |||||||||||||||||||||||||||||||
Shares issued to extinguish the loan from Flow Capital |
17(a) | – | – | – | – | |||||||||||||||||||||||||||||||
Shares issued to settle liabilities |
19(a) | – | – | – | – | |||||||||||||||||||||||||||||||
Share issuance costs |
– | ( |
) | – | – | ( |
) | – | ( |
|||||||||||||||||||||||||||
Warrants issued |
– | – | – | – | – | |||||||||||||||||||||||||||||||
Equity component of convertible debentures |
– | – | – | – | – | |||||||||||||||||||||||||||||||
Contingent shares issuable to Flow Capital |
17(a) | – | – | – | – | – | ||||||||||||||||||||||||||||||
Non-controlling interest recognized in business combination |
– | – | – | – | – | – | ( |
) | ( |
|||||||||||||||||||||||||||
Net (loss) income for the year |
– | – | – | – | ( |
) | ( |
) | ( |
|||||||||||||||||||||||||||
Other comprehensive income for the year |
– | – | – | – | ||||||||||||||||||||||||||||||||
Balance, December 31, 2019 |
$ |
$ |
$ |
$ ( |
$ |
$ |
$ |
|||||||||||||||||||||||||||||
Year ended December 31, |
||||||||||||||||
Notes |
2021 |
2020 |
2019 |
|||||||||||||
Operating activities |
||||||||||||||||
Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||||||
Items not affecting cash: |
||||||||||||||||
Depreciation and amortization |
8-10 | |||||||||||||||
Share-based compensation |
20 | |||||||||||||||
Finance costs |
22 | |||||||||||||||
Fair value loss on derivatives |
23 | – | – | |||||||||||||
Impairment |
– | – | ||||||||||||||
Other income |
24 | ( |
) | ( |
) | ( |
) | |||||||||
Provision for expected credit loss |
26 | |||||||||||||||
Unrealized foreign currency exchange gain |
( |
) | ||||||||||||||
Business acquisition costs |
– | |||||||||||||||
Current tax expense (recovery) |
25 | ( |
) | |||||||||||||
Deferred income tax recovery |
25 | ( |
) | ( |
) | ( |
) | |||||||||
Gain on settlement of lease liability |
– | – | ( |
) | ||||||||||||
Decrease in working capital |
30 | ( |
) | ( |
) | ( |
) | |||||||||
Interest paid |
( |
) | ( |
) | ( |
) | ||||||||||
Taxes paid |
– | ( |
) | ( |
) | |||||||||||
Net cash used in operating activities |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||||||
Investing activities |
||||||||||||||||
Acquisition of property and equipment |
9 | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||||
Acquisition of and expenditure on intangible assets |
10 | ( |
) | ( |
) | – | ||||||||||
Acquisition of royalty agreement |
17(a) | – | – | ( |
) | |||||||||||
Acquisition of assets of AirFusion |
– | ( |
) | – | ||||||||||||
Acquisition of business, net of cash acquired |
17 | – | ( |
) | ( |
) | ||||||||||
Net cash used in investing activities |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||||||
Financing activities |
||||||||||||||||
Payment of lease liabilities |
8 | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||||
Repayment of loans |
12 | ( |
) | ( |
) | ( |
) | |||||||||
Proceeds from loans and bank indebtedness, net of transaction costs |
12, 13 | |
|
|||||||||||||
Net (repayments) advances of bank indebtedness |
13 | ( |
) | ( |
) | |||||||||||
Proceeds from issuance of shares, net of issuance costs |
19(a) | |
– | |||||||||||||
Proceeds from issuance of convertible debentures, net of costs |
14 | |||||||||||||||
Proceeds from issuance of warrants, net of issuance costs |
19(a) | |||||||||||||||
Proceeds from the exercise of stock options, net of issuance costs |
||||||||||||||||
Proceeds from exercise of warrants, net |
– | – | ||||||||||||||
Income tax withholding on RSUs |
( |
) | ( |
) | – | |||||||||||
Net cash provided by financing activities |
$ | $ | $ | |||||||||||||
Increase in cash and cash equivalents |
$ | $ | $ | ( |
) | |||||||||||
Effect of exchange rate fluctuations on cash held |
( |
) | ( |
) | ( |
) | ||||||||||
Cash and cash equivalents, beginning of year |
||||||||||||||||
Cash and cash equivalents, end of year |
$ |
$ |
$ |
|||||||||||||
(a) |
Critical judgements in applying accounting policies |
(b) |
Key sources of estimation uncertainty |
(b) |
Key sources of estimation uncertainty (continued) |
Year ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
Canada |
$ | $ | $ | |||||||||
United States |
||||||||||||
Japan |
– | |||||||||||
Australia |
– | |||||||||||
Other |
– | |||||||||||
Total revenue |
$ |
$ |
$ |
|||||||||
For the years ended December 31, |
2021 |
2020 |
2019 | |||
Customer A |
Less than |
n/a | ||||
Customer B |
Less than |
|||||
Customer C |
Less than |
|||||
Customer D |
Less than |
n/a | ||||
December 31, 2021 |
December 31, 2020 |
|||||||
Canada |
$ | $ | ||||||
Australia |
||||||||
United States |
||||||||
Total non-current assets |
$ |
$ |
||||||
Year ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
AssetCare initialization 1 |
$ | $ | $ | |||||||||
AssetCare over time 2 |
||||||||||||
Engineering services 3 |
||||||||||||
$ |
$ |
$ |
||||||||||
1 |
Revenues from initial implementation and activation of AssetCare projects, including the sale of hardware. |
2 |
Revenues include sales of subscriptions to AssetCare, other subscriptions, post contract support and maintenance, perpetual software licenses, and installation and engineering services. |
3 |
Revenues includes consulting, implementation and integration services entered into on a time and materials basis or fixed fee basis without the use of AssetCare. |
Year ended December 31, |
||||||||||||
| Timing of revenue recognition | 2021 |
2020 |
2019 |
|||||||||
Over time |
$ | $ | $ | |||||||||
At a point in time upon completion |
||||||||||||
$ |
$ |
$ |
||||||||||
Unbilled revenue |
Deferred revenue |
|||||||||
Balance at January 1, 2019 |
$ |
— |
$ |
|||||||
Acquired in business combination (Note 17(c)) |
||||||||||
Acquired in business combination (Note 17(b)) |
— |
|||||||||
Additions |
||||||||||
Less: transferred to trade and other receivables |
( |
) |
— |
|||||||
Less: recognized in revenue |
— |
( |
) | |||||||
Less: Loss allowance |
( |
) |
— |
|||||||
Effect of movement in exchange rates |
— |
( |
) | |||||||
Balance at December 31, 2019 |
$ | $ | ||||||||
Acquired in business combination |
– | |||||||||
Additions |
||||||||||
Less: transferred to trade and other receivables |
( |
) | – | |||||||
Less: write-offs |
( |
) | – | |||||||
Less: recognized in revenue |
– | ( |
) | |||||||
Less: applied to outstanding trade receivables |
– | ( |
) | |||||||
Effect of movement in exchange rates |
( |
) | ||||||||
Balance at December 31, 2020 |
$ |
$ |
||||||||
Additions |
|
|||||||||
Less: transferred to trade and other receivables |
( |
) | – | |||||||
Less: recognized in revenue |
– | ( |
) | |||||||
Effect of movement in exchange rates |
– | |||||||||
Balance at December 31, 2021 1 |
$ |
$ |
||||||||
1 |
Unbilled revenue is included in trade and other receivables (Note 6) and relates to the Company’s right to consideration for work completed but not billed at the reporting date. Unbilled revenue is transferred to trade and other receivables when services are billed to customers. |
December 31, 2021 |
December 31, 2020 |
|||||||
Trade receivables from contracts with customers |
$ | $ | ||||||
Unbilled revenue (Note 5) |
||||||||
Indirect taxes receivable |
||||||||
Income taxes receivable |
||||||||
Other receivables |
||||||||
Contract asset 1 |
||||||||
Loss allowance (Note 26(b)) |
( |
) | ( |
) | ||||
Total trade and other receivables - current |
$ |
$ |
||||||
1 |
At December 31, 2021, the total contract assets were $ |
December 31, 2021 |
December 31, 2020 |
|||||||
| Current portion of long-term receivables 1 |
$ | $ | ||||||
| Non-current portion of long-term receivables 2 |
||||||||
| Total long-term receivables |
$ |
$ |
||||||
1 |
Net of expected credit loss allowance of $ $ |
2 |
Net of expected credit loss allowance of $ |
December 31, 2021 |
December 31, 2020 |
|||||||
| Prepaid insurance |
$ | $ | ||||||
| Advances |
||||||||
| Deposits |
||||||||
| Prepaid licenses |
||||||||
| Prepaid services |
||||||||
| Other prepaid costs |
||||||||
| Other assets |
||||||||
| Prepaid expenses and other assets |
$ |
$ |
||||||
| Current portion |
$ |
$ |
||||||
| Non-current portion |
||||||||
$ |
$ |
|||||||
Office |
Equipment and Vehicles |
Total |
||||||||||
| Balance at January 1, 2019 |
$ | $ | – | $ | ||||||||
| Acquired right-of-use assets (Note 17) |
||||||||||||
| Additions to right-of-use assets |
– | |||||||||||
| Depreciation charge for the year |
( |
) | ( |
) | ( |
) | ||||||
| Impairment charge for the year |
( |
) | – | ( |
) | |||||||
| Effect of movement in exchange rates |
( |
) | – | ( |
) | |||||||
| Balance at January 1, 2020 |
$ |
$ |
$ |
|||||||||
| Acquired right-of-use assets (Note 17) |
– | |||||||||||
| Additions to right-of-use assets |
||||||||||||
| Depreciation charge for the year |
( |
) | ( |
) | ( |
) | ||||||
| Impact of lease modification |
( |
) | – | ( |
) | |||||||
| Effect of movement in exchange rates |
( |
) | ||||||||||
| Balance at December 31, 2020 |
$ |
$ |
$ |
|||||||||
| Depreciation charge for the year |
( |
) | ( |
) | ( |
) | ||||||
| Impact of lease modification |
( |
) | – | ( |
) | |||||||
| Effect of movement in exchange rates |
( |
) | ||||||||||
| Balance at December 31, 2021 |
$ |
$ |
$ |
|||||||||
Year ended December 31, |
||||||||||||
| 2021 |
2020 |
2019 |
||||||||||
| Accretion of lease liabilities included in finance costs |
$ | $ | $ | |||||||||
| Depreciation of right-of-use assets 1 |
||||||||||||
| Expense related to variable lease payments 2 |
– | |||||||||||
| Expense related to short-term leases 2 |
– | – | ||||||||||
$ |
$ |
$ |
||||||||||
1 |
Included in depreciation and amortization expense. |
2 |
Included in rent expense within general and administrative expense. |
Year ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
Total cash outflows included in operating activities |
$ | $ | $ | |||||||||
Total cash outflows included in financing activities |
$ | |
$ | |
$ | |
||||||
Office Furniture and Equipment |
Leasehold Improvements |
Computer Equipment |
Total |
|||||||||||||||||||
Cost: |
||||||||||||||||||||||
At January 1, 2019 |
$ | $ | $ | $ | ||||||||||||||||||
Additions |
||||||||||||||||||||||
Acquisitions |
||||||||||||||||||||||
Impairment |
– | – | ( |
) | ( |
) | ||||||||||||||||
Effect of movement in exchange rates |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||
At December 31, 2019 |
$ |
$ |
$ |
$ |
||||||||||||||||||
Additions |
– | |||||||||||||||||||||
Effect of movement in exchange rates |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||
Balance at December 31, 2020 |
$ |
$ |
$ |
$ |
||||||||||||||||||
Additions |
– | – | ||||||||||||||||||||
Disposals |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||
Effect of movement in exchange rates |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||
Balance at December 31, 2021 |
$ |
$ |
$ |
$ |
||||||||||||||||||
Accumulated depreciation: |
||||||||||||||||||||||
At January 1, 2019 |
$ | $ | $ | $ | ||||||||||||||||||
Depreciation |
||||||||||||||||||||||
Effect of movement in exchange rates |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||
At December 31, 2019 |
$ |
$ |
$ |
$ |
||||||||||||||||||
Depreciation |
||||||||||||||||||||||
Effect of movement in exchange rates |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||
Balance at December 31, 2020 |
$ |
$ |
$ |
$ |
||||||||||||||||||
Depreciation |
||||||||||||||||||||||
Disposals |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||
Other movements |
– | ( |
) | – | ||||||||||||||||||
Effect of movement in exchange rates |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||
Balance at December 31, 2021 |
$ |
$ |
$ |
$ |
||||||||||||||||||
Carrying amounts: |
||||||||||||||||||||||
Balance at December 31, 2020 |
$ | $ | $ | $ | ||||||||||||||||||
Balance at December 31, 2021 |
$ |
$ |
$ |
$ |
||||||||||||||||||
Patents and trademarks |
Customer relationships |
Technology |
Total |
|||||||||||||
Cost: |
||||||||||||||||
At January 1, 2019 |
$ | |
$ | $ | $ | |||||||||||
Additions |
– | – | – | – | ||||||||||||
Acquisitions |
– | |||||||||||||||
Effect of movements in exchange rates |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Balance at December 31, 2019 |
$ |
$ |
$ |
$ |
||||||||||||
Additions |
– | – | ||||||||||||||
Acquisitions |
– | |||||||||||||||
Effect of movements in exchange rates |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Balance at December 31, 2020 |
$ |
$ |
$ |
$ |
||||||||||||
Additions |
– | – | ||||||||||||||
Effect of movement in exchange rates |
( |
) | ( |
) | ( |
) | ||||||||||
Balance at December 31, 2021 |
$ |
$ |
$ |
$ |
||||||||||||
Accumulated amortization and impairments: |
||||||||||||||||
At January 1, 2019 |
$ | $ | $ | $ | ||||||||||||
Amortization 1 |
||||||||||||||||
Impairment |
– | – | ||||||||||||||
Effect of movements in exchange rates |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Balance at December 31, 2019 |
$ | $ | $ | $ | ||||||||||||
Amortization 1 |
||||||||||||||||
Effect of movements in exchange rates |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Balance at December 31, 2020 |
$ |
$ |
$ |
$ |
||||||||||||
Amortization 1 |
||||||||||||||||
Effect of movement in exchange rates |
||||||||||||||||
Balance at December 31, 2021 |
$ |
$ |
$ |
$ |
||||||||||||
Carrying amounts: |
||||||||||||||||
Balance at December 31, 2020 |
$ | $ | $ | $ | ||||||||||||
Balance at December 31, 2021 |
$ | $ | $ | $ | ||||||||||||
1 |
Amortization charges are included in depreciation and amortization in the consolidated statements of loss and comprehensive loss. |
December 31, 2021 |
December 31, 2020 |
|||||||
Opening balance |
$ | |
$ | |||||
Acquisitions, business combinations (Note 18) |
– | |||||||
Effect of movements in exchange rates |
( |
( |
||||||
Total goodwill |
$ |
$ |
||||||
December 31, 2021 |
December 31, 2020 |
|||||||
Trade payables |
$ | $ | ||||||
Accrued liabilities |
||||||||
Interest payable |
||||||||
Mastercard facility (Note 13) |
||||||||
Due to related parties (Note 28) |
||||||||
Income taxes payable |
||||||||
Indirect taxes payable |
||||||||
Other |
||||||||
Total trade payables and accrued liabilities |
$ |
$ |
||||||
December 31, 2021 |
December 31, 2020 |
|||||||
Term loan |
$ | $ | ||||||
Nations Interbanc facility |
||||||||
Debenture payable to Industry Canada |
||||||||
Loan payable to related party 1 |
||||||||
Oracle financing 2 |
||||||||
Other loans and financing |
||||||||
Total 3 |
$ |
$ |
||||||
Current |
||||||||
Non-current |
||||||||
$ |
$ |
|||||||
1 |
Loan assumed as part of CSA Acquisition (Note 17(d)) which bears interest at |
2 |
Financing arrangements provided by Oracle Credit Corporation (“Oracle”) bearing interest between |
3 |
Note 30(b) includes the reconciliation of movements of liabilities to cash flows arising from financing activities. |
December 31, 2021 |
December 31, 2020 |
|||||||
ATB Financial revolving operating facility |
$ | |
$ | – | ||||
Operating loan facility 1 |
– | |||||||
Bank overdraft 1 |
– | |||||||
Total |
$ |
$ |
||||||
1 |
At December 31, 2020, the Company had access to an operating loan facility and Mastercard facility. On April 15, 2021, the operating loan facility was repaid and closed. The Mastercard facility remains in place and at December 31, 2021, $ |
December 31, 2021 |
December 31, 2020 |
|||||||
| 2019 Convertible debentures liability (a) |
$ | $ | |
|||||
| 2021 Convertible debentures liability (b) |
– | |||||||
| 2021 Convertible debentures embedded derivative (b) |
– | |||||||
| Total |
$ |
$ |
||||||
| Current debentures |
$ | |
$ | – | ||||
| Non-current debentures |
||||||||
$ |
$ |
|||||||
a) |
2019 Convertible debentures |
December 31, 2021 |
December 31, 2020 |
|||||||
| Opening balance |
$ | |
$ | |
||||
| Conversion of debentures into common shares |
– | ( |
||||||
| Interest paid |
( |
( |
||||||
| Accreted interest at effective interest rate |
||||||||
| Carrying amount of liability component |
$ | $ | ||||||
| Less: interest payable |
( |
( |
||||||
| Total |
$ |
$ |
||||||
a) |
2019 Convertible debentures (continued) |
b) |
2021 Convertible debentures |
b) |
2021 Convertible debentures (continued) |
December 31, 2021 |
||||
Proceeds from issue of convertible debentures |
$ | |
||
Fair value adjustments (Note 23) |
||||
Total fair value of convertible debentures |
||||
Less: fair value of embedded derivative |
( |
) | ||
Less: transaction costs 1 |
( |
) | ||
Carrying value of liability at inception |
||||
Interest expense associated with liability |
||||
Debt extinguishment, including interest payable |
( |
) | ||
Foreign exchange adjustments |
( |
) | ||
Less: accrued interest included in accrued liabilities |
( |
) | ||
Carrying value of liability at end of period 2 |
$ |
|||
1 |
Total transaction costs were $ |
2 |
Convertible debt in the principal amount of US$ |
December 31, 2021 |
||||
Fair value of embedded derivative at inception |
$ | |
||
Fair value decrease 1 |
( |
) | ||
Derecognition of embedded derivative on conversion |
( |
) | ||
Foreign exchange adjustments |
( |
) | ||
Balance, embedded derivative |
$ |
|||
1 |
The fair value of the embedded derivative is remeasured at the end of each reporting period and on conversion and recognized in fair value (gain) loss on derivatives in the consolidated statements of loss and comprehensive loss (Note 23). |
December 31, 2021 |
December 31, 2020 |
|||||||
Derivative warrant liabilities - 2021 Debentures (a) |
$ | |
$ | – | ||||
Derivative warrant liabilities - USD equity financing (b) |
– | |||||||
Warrant liability related to business acquisition (c) |
||||||||
Other warrant liability (c) |
– | |||||||
Total, all current |
$ |
$ |
||||||
Derivative |
warrant liabilities |
December 31, 2021 |
August 13, 2021 |
|||||||
Share price at date of valuation |
$ | |
$ | |
||||
Exercise price |
$ | $ | ||||||
Risk free rate |
||||||||
Expected life (years) |
||||||||
Expected volatility 1 |
||||||||
Fair value per warrant 2 |
$ | $ | ||||||
1 |
Expected volatility at December 31, 2021 measured at implied volatility of traded warrants. |
2 |
Considers a liquidity discount of |
December 31, 2021 |
November 29, 2021 |
|||||||
Share price at date of valuation |
$ | |
$ | |
||||
Exercise price |
$ | $ | ||||||
Risk free rate |
||||||||
Expected life (years) |
||||||||
Expected volatility 1 |
||||||||
Fair value per warrant |
$ | $ | ||||||
1 |
Expected volatility at represents implied volatility of the Company’s traded warrants. |
c) |
Other warrant liabilities |
December 31, 2021 |
December 31, 2020 |
|||||||
US Government loans |
$ | – | $ | |||||
2021 Debentures subscriptions payable (Note 14(b)) |
– | |||||||
Total |
$ |
– |
$ |
|||||
Current portion 1 |
$ | – | ||||||
Non-current portion |
– | |||||||
$ |
– |
$ |
||||||
1 |
Includes US Government loans of $ |
a) |
Acquisition of Royalty interests |
| i. | a receivable owing by Agnity to Flow of USD $ |
| ii. | a monthly royalty payment stream until October 31, 2020 equal to the greater of: |
| • | A monthly amount of USD $ |
| • |
| iii. | commencing November 1, 2020, a monthly royalty payment stream equal to 4.25% of Agnity’s revenue for each calendar month in perpetuity. |
| (i) | A secured loan agreement for USD $ |
| • | Cash of USD $ |
| • | Issue |
Share price |
$ | |
Risk free rate |
||
Expected life |
||
Expected volatility |
||
Expected dividends |
a) |
Acquisition of Royalty interests (continued) |
| (i) | The Company also agreed to issue a quantity of its common shares based on the trading price of the Company. Specifically, for the period after January 22, 2019 and prior to January 22, 2025, if the five-day volume weighted average trading price of the Company’s common shares equals or exceeds: |
| • | $ |
| • | $ |
| • | $ |
| Barrier share price |
$ | |
| Risk free rate |
||
| Expected life |
||
| Expected volatility |
||
| Expected dividends |
b) |
Acquisition of Agnity |
b) |
Acquisition of Agnity (continued) |
| Consideration transferred: |
Final |
|||
| Change in fair-value of interest in Royalty Agreement (i) |
$ | |||
| Assumption of Agnity’s liabilities |
||||
| Total consideration transferred |
$ |
|||
(i) |
The fair value of interest in the Royalty Agreement at April 22, 2019 was estimated using the discounted cash flow model. The major inputs employed in the model include forecasted royalty payments and the discount rate of |
| Fair value of assets and liabilities recognized: |
Final |
|||
| Cash and cash equivalents |
$ | |||
| Trade and other receivables |
||||
| Prepaid expenses and deposits |
||||
| Long term receivable |
– | |||
| Property and equipment |
||||
| Intangible Asset – Technology |
||||
| Intangible Asset – Customer Relationship |
||||
| Accounts payable and accrued liabilities |
( |
) | ||
| Deferred revenue |
( |
) | ||
| Loans and borrowings |
( |
) | ||
| Warrant liability (i) |
( |
) | ||
| Due to related party |
( |
) | ||
| Deferred income tax liability |
( |
) | ||
| Net identifiable assets acquired (liabilities assumed) |
( |
) | ||
| Allocation to non-controlling interest |
$ |
|||
| (i) | A warrant was issued by Agnity in 2015 which entitles the warrant holder to acquire |
b) |
Acquisition of Agnity (continued) |
c) |
Acquisition of mCloud Technologies Services Inc. |
Consideration transferred: |
Final |
|||
Cash consideration |
$ | |||
Fair value of demand promissory notes issued (1) |
||||
Fair value of common shares transferred (2) |
||||
Total consideration transferred |
$ |
|||
c) |
Acquisition of mCloud Technologies Services Inc. (continued) |
Fair value of assets and liabilities recognized: |
Final |
|||
Cash and cash equivalents |
$ | |||
Trade and other receivables (includes Unbilled revenue of $ |
||||
Prepaid expenses and deposits |
||||
Right-of-use assets |
||||
Property and equipment |
||||
Intangible asset – Customer relationships |
||||
Intangible asset – Technology |
||||
Accounts payable and accrued liabilities |
( |
|||
Deferred revenue |
( |
) | ||
Lease liabilities |
( |
) | ||
Deferred income tax liability |
( |
) | ||
Fair value of net assets acquired |
||||
Goodwill |
$ |
|||
$ |
||||
d) |
Acquisition of Construction Systems Associates, Inc. USA |
Final |
||||
| Consideration transferred: |
||||
| Cash consideration |
$ | |||
| Fair value of common share consideration |
||||
| Fair value of contingent consideration payable |
||||
| Total consideration |
$ |
|||
| Fair value of assets and liabilities recognized: |
||||
| Cash |
$ | |||
| Trade and other receivables |
||||
| Prepaid expenses and other deposits |
||||
| Property and equipment |
||||
| Right of use assets |
||||
| Intangible - technology |
||||
| Intangible - customer relationships |
||||
| Accounts payable and accrued liabilities |
( |
) | ||
| Short-term loan |
( |
) | ||
| Lease liabilities |
( |
) | ||
| Deferred tax liabilities |
||||
| Fair value of net assets acquired |
$ |
|||
| Goodwill |
$ |
|||
e) |
Acquisition of kanepi |
Final |
||||
| Consideration transferred: |
||||
| Cash consideration |
$ | |||
| Fair value of common share consideration |
||||
| Fair value of contingent consideration payable |
||||
| Total consideration |
$ |
|||
| Fair value of assets and liabilities recognized: |
||||
| Cash |
$ | |||
| Trade and other receivables |
||||
| Other current assets |
||||
| Property and equipment |
||||
| Right of use assets |
||||
| Intangible - technology |
||||
| Intangible - customer relationships |
||||
| Accounts payable and accrued liabilities |
( |
) | ||
| Lease liabilities |
( |
) | ||
| Deferred tax liabilities |
( |
) | ||
| Fair value of net assets acquired |
$ |
|||
| Goodwill |
$ |
|||
December 31, 2021 |
December 31, 2020 |
|||||||
Opening balance |
$ | $ | ||||||
Contingent consideration changes related to CSA (Note 17) |
( |
) | ||||||
Contingent consideration changes related to kanepi (Note 17) |
( |
) | ||||||
Effect of foreign exchange differences |
( |
) | ( |
) | ||||
Current portion |
||||||||
Non-current portion |
||||||||
$ |
$ |
|||||||
a) |
Common shares |
b) Warrants |
Number of Warrants |
Weighted Average Exercise Price $ | |||||
December 31, 2018 |
$ | |||||
Issued |
$ | |||||
Exercised |
( |
$ | ||||
Expired |
( |
|||||
December 31, 2019 |
$ | |||||
Issued |
||||||
Exercised |
( |
|||||
Expired |
( |
|||||
December 31, 2020 |
$ | |||||
Issued |
||||||
Expired |
( |
|||||
December 31, 2021 |
$ | |||||
| • |
| • |
| • |
| • |
| • |
| • |
Expiry Date |
Exercise Price $ |
Outstanding Warrants | ||||
June 2022 |
||||||
July 2022 |
||||||
December 2022 |
||||||
January 2023 |
||||||
January 2023 |
||||||
February 2023 |
||||||
March 2023 |
||||||
May 2023 |
||||||
April 2024 |
||||||
June 2024 |
||||||
August 2024 |
||||||
January 2025 |
||||||
May 2025 |
||||||
July 2025 |
||||||
November 2026 |
||||||
$ |
||||||
Year Ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
Stock options (a) |
$ | $ | $ | |||||||||
Restricted share units (b) |
||||||||||||
Total |
$ |
$ |
$ |
|||||||||
a) |
Stock Options |
Number of Options |
Weighted Average Exercise Price |
Number of Options |
Weighted Average Exercise Price |
Number of Options |
Weighted Average Exercise Price |
|||||||||||||||||||
2021 |
2021 |
2020 |
2020 |
2019 |
2019 |
|||||||||||||||||||
Opening balance |
$ | $ | $ | |||||||||||||||||||||
Granted |
||||||||||||||||||||||||
Exercised |
– | – | ( |
) | ( |
) | ||||||||||||||||||
Forfeited |
( |
) | ( |
) | ( |
) | ||||||||||||||||||
Expired |
( |
) | ( |
) | – | – | ||||||||||||||||||
Cancelled |
– | – | ( |
) | – | – | ||||||||||||||||||
Outstanding at December 31 |
$ |
$ |
$ |
|||||||||||||||||||||
Exercisable at December 31 |
$ |
$ |
$ |
|||||||||||||||||||||
a) |
Stock Options (continued) |
Options Outstanding |
Options exercisable | |||||||||||||||||||||||
Range of prices |
Number |
Weighted average exercise price |
Weighted average life (years) |
Number |
Weighted average exercise price |
|||||||||||||||||||
$ |
$ | $ | ||||||||||||||||||||||
$ |
$ | |
$ | |||||||||||||||||||||
$ |
$ | $ | |
|||||||||||||||||||||
$ |
$ | $ | ||||||||||||||||||||||
$ |
$ |
|||||||||||||||||||||||
2021 |
2020 |
2019 | ||||
Grant date share price |
$ |
$ |
$ | |||
Exercise price |
$ |
$ |
$ | |||
Risk-free rate |
||||||
Expected life, years |
||||||
Expected volatility |
||||||
Expected dividends |
– % | – % | – % | |||
Forfeiture rate |
– % | |||||
b) |
Restricted Share Units (“RSUs”) |
b) |
Restricted Share Units (“RSUs”) (continued) |
| Number of RSUs |
2021 |
2020 |
2019 |
|||||||||
| Outstanding at January 1 |
||||||||||||
| Granted |
||||||||||||
| Exercised 1 |
( |
( |
( |
|||||||||
| Forfeited |
( |
( |
( |
|||||||||
| Withheld 1 |
( |
( |
– | |||||||||
| Outstanding at December 31 |
||||||||||||
| Exercisable at December 31 |
||||||||||||
1 |
|
December 31, 2021 |
December 31, 2020 |
|||||||||||
| NCI percentage |
||||||||||||
| Current assets |
$ | $ | ||||||||||
| Non-current assets |
||||||||||||
| Current liabilities |
( |
( |
||||||||||
| Non-current liabilities |
( |
( |
||||||||||
| Net assets attributable to NCI |
$ | $ | ||||||||||
| For the years ended |
December 31, 2021 |
December 31, 2020 |
December 31, 20 19 |
|||||||||
| Revenue |
$ | $ | $ | |||||||||
| Income (loss) allocated to NCI |
( |
|||||||||||
| Other comprehensive income allocated to NCI |
( |
|||||||||||
| Total comprehensive (loss) income attributable to NCI |
$ | ( |
$ | $ | ||||||||
| Cash flows (used in) provided by operating activities |
$ | ( |
( |
|||||||||
| Cash flows used in investing activities |
( |
– | ( |
|||||||||
| Cash flows (used in) provided by financing activities |
( |
|||||||||||
| Foreign exchange impact on cash held in USD |
( |
|||||||||||
| Net (decrease) increase in cash and cash equivalents |
$ | ( |
$ | $ | ||||||||
Year Ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
| Interest on loans and borrowings (Note 12) |
$ | |
$ | $ | ||||||||
| Interest on convertible debentures (Note 14) |
||||||||||||
| Interest on lease liabilities (Note 8) |
||||||||||||
| Transaction costs expensed 1 |
– | – | ||||||||||
| Other finance costs |
– | – | ||||||||||
| Total finance costs |
$ |
$ |
$ |
|||||||||
1 |
Transaction costs include costs incurred associated with financing or equity transactions that are not otherwise netted against the debt or equity instrument. The majority of costs are associated with the USD brokered public offering (Note 19(a)), the 2021 Debentures (Note 14(b)), the Fiera term loan amendment (Note 12) and the ATB facility amendment (Note 13). |
Year Ended December 31, | ||
2021 |
||||
Gain on embedded derivatives 1 |
$ | ( |
) | |
Deferred charge loss 1 |
||||
Loss on substantial modification and conversion 1 |
||||
Gain on warrant liability remeasurement (Note 15) 2 |
( |
) | ||
Total |
$ |
|||
1 |
Associated with the 2021 Debentures (Note 14(b)) of which the majority is realized at December 31, 2021. |
2 |
Change in fair value unrealized (Note 26). |
Year Ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
Government assistance 1 |
$ | ( |
$ | ( |
$ | – | ||||||
US Government loan forgiveness 2 (Note 16) |
( |
( |
– | |||||||||
Derecognition of contingent consideration (Note 18) |
( |
– | – | |||||||||
Other |
( |
( |
( |
|||||||||
Total other income |
$ |
( |
$ |
( |
$ |
( |
||||||
1 |
Majority represents amounts received from the Canadian Government for wage and rental subsidies associated with COVID-19. The amount of government assistance available is dependent on the programs in place and the Company’s eligibility for these programs. |
2 |
Includes other income recognized as below market interest rate benefit. |
Year Ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
Current tax expense |
||||||||||||
Current year |
( |
) | ||||||||||
Changes in estimates related to prior years |
– | – | – | |||||||||
| ( |
||||||||||||
Deferred tax expense (recovery) |
||||||||||||
Origination and reversal of temporary differences |
( |
) | ( |
) | ( |
) | ||||||
Change in unrecognized deferred income tax assets |
||||||||||||
| ( |
( |
( |
||||||||||
Tax expense (recovery) |
$ |
( |
$ |
( |
$ |
( |
||||||
Year Ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
Loss before taxes |
$ | ( |
$ | ( |
$ | ( |
||||||
Statutory income tax rate 1 |
% | % | % | |||||||||
Income tax recovery at statutory rate |
( |
( |
( |
|||||||||
Increase (decrease) in taxes resulting from: |
||||||||||||
Change in deferred tax assets not recognized |
||||||||||||
Foreign tax rate and other foreign tax differences |
( |
( |
( |
|||||||||
Change in enacted rates |
( |
– | ||||||||||
Share issuance costs and other |
( |
|||||||||||
Non-deductible transaction costs |
||||||||||||
Other non-deductible items |
||||||||||||
Tax expense (recovery) |
$ |
( |
$ |
( |
$ |
( |
||||||
1 |
Comprised of the Canadian Federal effective corporate tax rate of |
At December 31, 2020 |
Recovery/ (expense) through earnings |
Recovery/ (expense) through equity |
Recovery/ (expense) through OCI |
At December 31, 2021 |
||||||||||||||||||
Property and equipment |
$ | $ | ( |
$ | – | $ | $ | |||||||||||||||
Intangible assets |
( |
– | ( |
|||||||||||||||||||
Loans and accrued liabilities |
( |
– | ( |
( |
||||||||||||||||||
Share issuance costs |
– | – | ||||||||||||||||||||
Foreign exchange |
– | ( |
– | ( |
||||||||||||||||||
Non-capital losses/net operating losses |
( |
– | ( |
|||||||||||||||||||
Total |
$ |
( |
$ |
$ |
– |
$ |
$ |
( |
||||||||||||||
At December 31, 2019 |
Acquired in business combinations |
Recovery/ (expense) through earnings |
Recovery/ (expense) through equity |
Recovery/ (expense) through OCI |
At December 31, 2020 |
|||||||||||||||||||
Property and equipment |
$ | – | $ | ( |
$ | $ | – | $ | ( |
$ | ||||||||||||||
Intangible assets |
( |
( |
– | ( |
||||||||||||||||||||
Loans and accrued liabilities |
( |
– | ( |
( |
( |
|||||||||||||||||||
Share issuance costs |
– | – | – | – | ||||||||||||||||||||
Foreign exchange |
( |
– | – | – | ||||||||||||||||||||
Non-capital losses/net operating losses |
– | ( |
– | ( |
||||||||||||||||||||
Total |
$ |
( |
$ |
( |
$ |
$ |
$ |
$ |
( |
|||||||||||||||
d) |
Deferred tax assets not recognized and tax losses carried forward |
Year Ended December 31, |
||||||||
2021 |
2020 |
|||||||
Net operating losses - United States |
$ | $ | ||||||
Non-capital losses - Canada |
||||||||
Foreign tax losses |
||||||||
Investment tax credits and research and development expenditures |
||||||||
Property and equipment |
||||||||
Share issuance costs |
||||||||
Other |
||||||||
$ |
$ |
|||||||
a) |
Classification and measurement of financial assets and liabilities by category |
Financial assets |
Measurement basis |
December 31, 2021 |
December 31, 2020 |
|||||||
Cash and cash equivalents |
Amortized cost | $ | $ | |||||||
Trade and other receivables 1 |
Amortized cost | |||||||||
Long-term receivables |
Amortized cost | |||||||||
Derivative asset |
FVTPL | |||||||||
$ |
$ |
|||||||||
Financial liabilities |
||||||||||
Bank indebtedness |
Amortized cost | $ | $ | |||||||
Trade payables and accrued liabilities 1 |
Amortized cost | |||||||||
Loans and borrowings |
Amortized cost | |||||||||
Lease liabilities 2 |
Amortized cost | |||||||||
2019 Debentures - host liability 3 |
Amortized cost | |||||||||
2021 Debentures - host liability 3 |
Amortized cost | |||||||||
2021 Debentures embedded derivative |
FVTPL | |||||||||
Warrant liability - business acquisition |
FVTPL | |||||||||
Warrant liabilities - derivatives (Note 15) |
FVTPL | |||||||||
Business acquisition payable |
Amortized cost | |||||||||
Other liabilities |
Amortized cost | |||||||||
$ |
$ |
|||||||||
1 |
Excludes amounts for indirect taxes, income taxes and contract asset, where applicable. Note 27 describes credit risk associated with trade receivables including reconciliation of expected credit loss allowance. |
2 |
Lease liabilities are not subject to classification in the fair value hierarchy. |
3 |
2019 Debentures (Note 14(a)) and 2021 Debentures host liability (Note 14(b)). |
b) |
Measurement of fair value |
b) |
Measurement of fair value (continued) |
b) |
Measurement of fair value (continued) |
a) |
Liquidity risk (continued) |
At December 31, 2021 |
Undiscounted Contractual Cash Flows |
|||||||||||||||||||
Carrying Amount |
< 1 year |
1 – 2 years |
> 2 years |
Total |
||||||||||||||||
Bank indebtedness 1 |
$ | $ | $ | – | $ | – | $ | |||||||||||||
Trade payables and accrued liabilities |
– | – | ||||||||||||||||||
Loans and borrowings 2 |
– | |||||||||||||||||||
Lease liabilities 3 |
||||||||||||||||||||
2019 Debentures |
– | – | ||||||||||||||||||
2021 Debentures |
– | |||||||||||||||||||
Warrant liabilities 4 |
– | – | ||||||||||||||||||
Business acquisition payable |
– | – | ||||||||||||||||||
$ |
$ |
$ |
$ |
$ |
||||||||||||||||
1 |
No contractual maturity. Excludes interest charged on facility as detailed in Note 13. |
2 |
Includes term loan with a carrying value of $ |
3 |
Variable costs due under leases not included in this amount. Minimum payment related to leases which have not yet commenced are not included in this amount. See Note 29. |
4 |
Majority of liability will be settled by issuing common shares of the Company when warrants are exercised during the year. The remaining amount may be settled in cash or common shares of Agnity (Note 15). |
As at December 31, 2020 |
Undiscounted Contractual Cash Flows |
|||||||||||||||||||
Carrying Amount |
< 1 year |
1 – 2 years |
> 2 years |
Total |
||||||||||||||||
Bank indebtedness |
$ | $ | $ | – | $ | – | $ | |||||||||||||
Trade payables and accrued liabilities |
– | – | ||||||||||||||||||
Loans and borrowings |
||||||||||||||||||||
Lease liabilities |
||||||||||||||||||||
2019 Debentures |
– | |||||||||||||||||||
Warrant liabilities |
– | – | ||||||||||||||||||
Business acquisition payable |
– | |||||||||||||||||||
Other liabilities |
– | |||||||||||||||||||
$ |
$ |
$ |
$ |
$ |
||||||||||||||||
b) |
Credit risk |
b) |
Credit risk (continued) |
December 31, 2021 |
December 31, 2020 |
|||||||
Beginning balance |
$ | $ | ||||||
Increase in loss allowance |
||||||||
Amounts written off during the year as uncollectible |
( |
) | ( |
) | ||||
Effects of movement in exchange rates |
– | |||||||
Total |
$ |
$ |
||||||
c) |
Market risk |
For the years ended December 31, |
2021 |
2020 |
2019 |
|||||||||
| Salaries, management and directors’ fees |
$ | $ | $ | |||||||||
| Share-based payments |
||||||||||||
| Total |
$ |
$ |
$ |
|||||||||
December 31, 2021 |
December 31, 2020 |
|||||||
| Due to principal owner of Agnity 2 |
$ | $ | ||||||
| Due to officer of Company for working capital loan 2 |
||||||||
| Due to key management personnel 2 |
||||||||
| Due to Agnity Communications Private Ltd. 3 |
||||||||
| Loan due to former shareholder of CSA 4 |
||||||||
| Amount due to related parties |
$ |
$ |
||||||
1 |
Unless otherwise noted, all amounts due are unsecured, non-interest bearing and due on demand. |
2 |
Included in trade accounts payable and accrued liabilities on the consolidated statements of financial position. |
3 |
Associated with consulting services paid to a company partially owned by the principal owner of Agnity. Consulting services were $ ; December 31, 2019 - $ Balance due included in trade accounts payable and accrued liabilities on the consolidated statements of financial position. |
4 |
Included in loans and borrowings (Note 12) on the consolidated statements of financial position. |
Undiscounted Contractual Cash Flows |
||||||||||||||||||||
< 1 year |
2 - 3 years |
4 - 5 years |
More than 5 years |
Total |
||||||||||||||||
| Variable lease payments 1 |
$ | $ | $ | $ | $ | |||||||||||||||
| Lease payments related to leases which have not yet commenced 2 |
||||||||||||||||||||
| $ | |
$ | |
$ | |
$ | |
$ | |
|||||||||||
1 |
Variable lease payments associated lease liabilities (Note 8). |
2 |
In October 2021, the Company executed a |
2021 |
2020 |
2019 |
||||||||||
| Trade and other receivables ( increase) |
$ ( |
$ ( |
$ ( |
|||||||||
| Long-term receivables decrease (increase) |
( |
( |
||||||||||
| Prepaid expenses and other assets decrease ( increase) |
( |
( |
||||||||||
| Trade payables and accrued liabilities (decrease) increase |
( |
|||||||||||
| Deferred revenue increase |
||||||||||||
| Decrease in working capital |
$ ( |
$ ( |
$ ( |
|||||||||
2021 |
2020 |
2019 |
||||||||||
| Balance of loans, borrowings and PPP loans, beginning of year |
$ |
$ |
$ |
|||||||||
| New advances |
||||||||||||
| Repayments of principal |
( |
( |
( |
|||||||||
| Repayments of interest |
( |
( |
( |
|||||||||
| Liability assumed |
– | – | ||||||||||
| Liability related items |
||||||||||||
| Assumption of loans in business combination |
– | |||||||||||
| Forgiveness of PPP Loans |
( |
( |
– | |||||||||
| Finance fees paid |
( |
– | ||||||||||
| Non-cash related items |
||||||||||||
| Accretion of interest and debt issuance costs |
||||||||||||
| Loss on debt modification |
– | – | ||||||||||
| Foreign exchange and other |
( |
( |
||||||||||
| Balance of loans, borrowings and PPP loans, end of year |
$ |
$ |
$ |
|||||||||
For the years ended December 31, |
2021 |
2020 |
2019 |
|||||||||||||
| Value of shares issued in business combination |
$ | – | $ | |
$ | |
||||||||||
| Value of shares issued on conversion of 2021 Debentures |
14(b) | $ | |
$ | – | $ | – | |||||||||
| Value of share issued on conversion of 2019 Debentures |
$ | – | $ | $ | – | |||||||||||
| Value of shares issued on AirFusion asset acquisition |
$ | – | $ | $ | – | |||||||||||
| Settlement of liabilities through issuance of common shares or RSUs |
$ | – | $ | $ | ||||||||||||
| Non-cash accretion of interest included in finance cost |
$ | $ | $ | |||||||||||||
| Non-cash broker warrants compensation |
19 (b) |
$ | $ | – | $ | – | ||||||||||
| Non-cash underwriter warrants compensation |
1 9 (b) |
$ | $ | – | $ | – | ||||||||||
| Non-cash warrants consideration associated with credit facility |
$ | $ | – | $ | – | |||||||||||
| Shares issued to extinguish the loan from Flow Capital |
$ | – | $ | – | $ | |||||||||||
| Addition to right-of-use assets |
$ | – | $ | $ | ||||||||||||
| Addition to lease liabilities |
$ | – | $ | $ | ||||||||||||
Principle activity |
Place of business and operations |
Functional currency |
||||||
| |
||||||||
| |
||||||||
| |
||||||||
| |
||||||||
| |
||||||||
| |
||||||||
| |
||||||||
| |
||||||||
| |
||||||||
| |
||||||||
| |
||||||||
| |
||||||||
| |
||||||||
| |
||||||||
| |
||||||||
A. |
Basis of Consolidation (continued) |
B. |
Foreign currency |
C. |
Revenue recognition |
D. |
Financial Instruments |
i. |
Recognition and initial measurement |
ii. |
Classification and subsequent measurement |
| • | it is held within a business model whose objective is to hold assets to collect contractual cash flows; and |
| • | its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. |
| • | it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and |
| • | its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. |
iii. |
Derecognition of financial assets and liabilities |
iv. |
Impairment of non-derivative financial assets |
iv. |
Impairment of non-derivative financial assets (continued) |
E. |
Property and equipment |
Life | ||
| Computer equipment |
||
| Office furniture and equipment |
||
| Leasehold improvements |
F. |
Intangible assets and goodwill |
Life | ||
| Patents and trademarks |
||
| Customer relationships |
||
| Technology |
F. |
Intangible assets and goodwill (continued) |
| • | Technical feasibility of completing the intangible asset results in the intangible asset being available for use or sale; |
| • | There is an intention to complete the intangible asset and use or sell it; |
| • | There is an ability to use or sell the intangible asset; |
| • | Evidence to suggest how the intangible asset will generate probable future economic benefits; |
| • | There is availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and, |
| • | An ability to reliably measure the expenditure(s) attributable to the intangible asset during its development exists. |
G. |
Impairment of non-financial assets |
G. |
Impairment of non-financial assets (continued) |
H. |
Leases |
i. |
Recognition and initial measurement as a lessee |
| • | fixed payments (including in-substance fixed payments), less any lease incentives receivable; |
| • | variable lease payments that depend on an index or a rate (such as CPI), initially measured using the index or rate as at the commencement date; |
| • | amounts expected to be payable by the Company under residual value guarantees; |
| • | exercise price of a purchase option if the Company is reasonably certain to exercise that option; and |
| • | payments of penalties for terminating the lease, if the lease term reflects the Company exercising an option to terminate the lease. |
ii. |
Classification and subsequent measurement as a lessee |
H. |
Leases (continued) |
I. |
Government grants |
J. |
Provisions |
K. |
Share related items |
K. |
Share related items (continued) |
L. |
Fair value measurement |
| • | Level 1 inputs are quoted prices in active markets for identical assets or liabilities that the Company can access at the measurement date; |
| • | Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and |
| • | Level 3 inputs are unobservable inputs for the asset or liability. |
M. |
Convertible debentures |
M. |
Convertible debentures (continued) |
N. |
Warrant liabilities |
O. |
Income taxes and deferred taxation |
P. |
Accounting standards development |
