SPARQ : Interim financial statements - March 2022

SPARQ CORP. (formerly, MJ Innovation Capital Corp.)

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) FOR THE THREE MONTHS ENDED MARCH 31, 2022 AND 2021

(Expressed in Canadian dollars)

The accompanying unaudited Condensed Interim Consolidated Financial Statements for the three months ended March 31, 2022 and 2021 have been prepared by management, reviewed by the Audit Committee and approved by the Board of Directors of the Company.

In accordance with National Instrument 51-102, Continuous Disclosure Obligations of the Canadian Securities Administrators, the Company herewith discloses that the accompanying unaudited Condensed Interim Consolidated Financial Statements have not been reviewed by an auditor.

SPARQ CORP. (Formerly, MJ Innovation Capital Corp.)

CONSENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)

(Expressed in Canadian dollars)

		March 31,	December 31,
As at:	Note	2022	2021
		$	$
Assets
Current Assets
Cash and cash equivalents		8,162,251	9,297,999
Accounts and other amounts receivable		69,079	82,661
Investment tax credits recoverable	12	354,000	330,000
Inventory	5	613,127	529,331
Prepaid expenses		53,689	6,840
Total current assets		9,252,145	10,246,831
Property and equipment	6	52,102	40,004
Total assets		9,304,247	10,286,835
Liabilities
Current Liabilities
Accounts payable and accrued liabilities		263,407	607,440
Total current liabilities		263,407	607,440
Term loan	7	38,196	38,196
Total liabilities		301,603	645,636
Shareholders' Equity
Share Capital	8	26,462,308	26,462,308
Contributed Surplus	9	1,787,831	1,560,658
Warrants	8	3,946,176	3,946,176
Deficit		(23,193,671)	(22,327,943)
Total shareholders' equity		9,002,644	9,641,199
Total liabilities and shareholders' equity		9,304,247	10,286,835
Going concern (Note 2(e))
Commitments and contingencies (Note 13)
Approved on behalf of the Board of Directors:
"Praveen Jain", Director	"Nishith Goel", Director

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

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SPARQ CORP. (Formerly, MJ Innovation Capital Corp.)

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS (UNAUDITED)

FOR THE THREE MONTHS ENDED MARCH 31, 2022 AND MARCH 31, 2021

(Expressed in Canadian dollars)

	Note	2022	2021
Revenue		-	-
Cost of sales	5	34,780	11,686
Gross loss		(34,780)	(11,686)
Expenses
Research and development		275,642	258,211
Sales and marketing		1,051	12,358
General and administration	8(iv)	350,783	83,447
Depreciation of property and equipment	6	5,300	2,128
Stock based compensation	9	227,173	-
Loss before the undernoted items		(894,729)	(367,830)
Other income (expense)
Investment tax credits	12 (a)	24,000	90,000
Government assistance - wage subsidy	12 (b)	-	100,933
Interest income		4,156	667
Foreign exchange gain (loss)		846	1,414
		29,001	194,014
Net loss and comprehensive loss for the period		(865,728)	(173,816)
Basic and diluted loss per share		(0.01)	(0.00)
Weighted average shares outstanding		82,444,752	41,994,228

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

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SPARQ CORP. (Formerly, MJ Innovation Capital Corp.)

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' (DEFICIENCY) EQUITY (UNAUDITED)

FOR THE THREE MONTHS ENDED MARCH 31, 2022 AND 2021

(Expressed in Canadian dollars)

		Number of	Common	Contributed
		Shares	Shares	Surplus	Warrants	Deficit	Total
	Note		$	$	$	$	$
Balance, December 31, 2020		42,000,000	15,248,419	1,113,378	-	(14,521,866)	1,839,931
Net loss for the period		-	-	-	-	(173,816)	(173,816)
Balance, March 31, 2021		42,000,000	15,248,419	1,113,378	-	(14,695,682)	(1,666,115)
Balance, December 31, 2021		82,444,752	26,462,308	1,560,658	3,946,176	(22,327,943)	9,641,199
Share based payments	9	-	-	227,173	-	-	227,173
Net loss for the period		-	-	-	-	(865,728)	(865,728)
Balance, March 31, 2022		82,444,752	26,462,308	1,787,831	3,946,176	(23,193,671)	9,002,644

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

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SPARQ CORP. (Formerly, MJ Innovation Capital Corp.)

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE THREE MONTHS ENDED MARCH 31, 2022, AND 2021

(Expressed in Canadian dollars)

	Note	2022	2021
		$	$
Operating activities:
Net loss for the period		(865,728)	(173,816)
Items not involving cash
Depreciation expense	6	5,300	2,128
Stock-based compensation	9	227,173	-
Changes in non-cash working capital:
Accounts and other amounts receivable		13,582	(5,397)
Investment tax credits recoverable		(24,000)	(90,000)
Inventory		(83,796)	(87,343)
Prepaid expenses		(46,849)	(21,631)
Government assistance receivable		-	(35,411)
Accounts payable and accrued liabilities		(344,033)	38,734
Cash flow used in operating activities		(1,118,350)	(372,736)
Investing activities
Acquisition of equipment	6	(17,398)	(36,046)
Cash flow used in investing activities		(17,398)	(36,046)
Financing activities:
Advances of term loan	7	-	20,000
Cash flow from financing activities		-	20,000
Net decrease in cash and cash equivalents		(1,135,748)	(388,782)
Cash and cash equivalents at beginning of the period		9,297,999	1,346,904
Cash and cash equivalents at end of the period		8,162,251	958,122
Supplementary cash flow information:
Advances from shareholders converted to share capital		-	-

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

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