Wi2Wi Corporation
Condensed Consolidated Interim Financial Statements
(Unaudited, expressed in US Dollars)
Three Month Period March 31, 2024 and March 31, 2023
Notice to Reader
These condensed consolidated interim financial statements of Wi2Wi Corporation for the three months ended March 31, 2024 have been prepared by Management and were authorized for issue in accordance with a resolution of the Board of directors on May 8, 2024. Wi2Wi Corporation's independent auditor has not performed a review of these condensed consolidated interim financial statements, in accordance with the standards established by the Chartered Professional Accountants of Canada for a review of interim financial statements by an entities auditors.
Toronto, Canada
May 9, 2024
Wi2Wi Corporation
Table of Contents | |
Condensed Consolidated Interim Financial Statements (unaudited) | |
Unaudited Condensed Consolidated Interim Statements of Financial Position | 3 |
Unaudited Consolidated Interim Statements of Loss and Comprehensive Loss | 4 |
Consolidated Statements of Changes in Shareholders' Equity | 5 |
Unaudited Consolidated Interim Statements of Cash Flows | 6 |
Notes to unaudited Condensed Consolidated Interim Financial Statements | 7-23 |
Wi2Wi Corporation
Unaudited Condensed Consolidated Interim Statements of Financial Position
(In thousands of U.S. dollars)
March 31, | December 31, | |||
2024 | 2023 | |||
Assets | ||||
Current Assets | ||||
Cash | $ | 636 | $ | 917 |
Restricted cash (Note 22) | - | - | ||
Trade accounts receivable (Note 7) | 1,235 | 956 | ||
Inventories (Note 8) | 2,271 | 2,378 | ||
Prepaid expenses and other current assets | 200 | 156 | ||
Total current assets | 4,342 | 4,407 | ||
Property and equipment (Note 9) | 855 | 732 | ||
Right of use assets (Note 10) | 1,834 | 1,946 | ||
Total Assets | $ | 7,031 | $ | 7,085 |
Liabilities | ||||
Current Liabilities | ||||
Accounts payable | $ | 625 | $ | 380 |
Accrued liabilities (Note 12) | 289 | 299 | ||
Current portion of lease obligations (Note 13) | 445 | 445 | ||
Current portion of note payable (Note 15) | 40 | 19 | ||
Total current liabilities | 1,399 | 1,143 | ||
Lease obligations (Note 13) | 1,653 | 1,760 | ||
Note payable (Note 15) | 216 | 56 | ||
Economic injury disaster loan (Note 14) | 148 | 149 | ||
Total Liabilities | 3,416 | 3,108 | ||
Shareholders' Equity | ||||
Common shares (Note 17) | 29,093 | 29,093 | ||
Reserves (Note 18) | 3,857 | 3,857 | ||
Accumulated other comprehensive loss | (2) | (2) | ||
Accumulated deficit | (29,333) | (28,971) | ||
Total shareholders' equity | 3,615 | 3,977 | ||
Total Liabilities and Shareholders' Equity | $ | 7,031 | $ | 7,085 |
Nature and Description of Company and Going Concern (Note 1)
See accompanying notes to consolidated financial statements.
Approved on behalf of the Board of Directors:
/s/ Ted Clark, CEO and Director | /s/ Gary DuBroc, Chairman |
3
Wi2Wi Corporation
Unaudited Consolidated Interim Statements of Loss and Comprehensive Loss
(In thousands of U.S. dollars, except net income per share)
For the three months ended March 31, | 2024 | 2023 | ||
Revenues | $ | 1,508 | $ | 1,840 |
Cost of revenues (Notes 8, 9 and 14) | 1,357 | 1,551 | ||
Gross profit | 151 | 289 | ||
Operating expenses (Note 19) | ||||
Research and development (Notes 9 and 14) | 86 | 86 | ||
Selling, general and administrative (Notes 9 and 14) | 397 | 406 | ||
Total operating expenses | 483 | 492 | ||
Loss from operations | (332) | (203) | ||
Other income (Note 14) | 3 | 2 | ||
Interest income (expense) | (33) | (327) | ||
Loss before income taxes | (362) | (233) | ||
Provision for (benefit from) income tax (Note 23) | - | - | ||
Net and comprehensive loss | $ | (362) | $ | (233) |
Net loss per share, basic and diluted (Note 17) | $ | (0.00) | $ | (0.00) |
See accompanying notes to consolidated financial statements.
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Wi2Wi Corporation
Consolidated Statements of Changes in Shareholders' Equity
(In thousands of U.S. dollars, except per share data)
Accumulated | ||||||||||||
Common Shares | Other | Accumulated | Total | |||||||||
Reserves | Comprehensive | shareholders' | ||||||||||
Deficit | ||||||||||||
Loss | Equity | |||||||||||
Shares | Amount | |||||||||||
Balances, | 152,933,313 | $ | 29,092 | $ | 3,835 | $ | (2) | $ | (26,410) | $ | 6,515 | |
January 1, 2022 | ||||||||||||
Share-based compensation | - | - | 1 | - | - | 1 | ||||||
Net comprehensive loss | - | - | - | - | (1,236) | (1,236) | ||||||
Balances, | 152,933,313 | 29,092 | 3,836 | (2) | (27,646) | 5,280 | ||||||
December 31, 2022 | ||||||||||||
Share-based compensation | - | - | - | - | - | - | ||||||
Net comprehensive loss | - | - | - | - | (233) | (233) | ||||||
Balances, | 152,933,313 | $ | 29,092 | $ | 3,836 | $ | (2) | $ | (27,879) | $ | 5,047 | |
March 31, 2023 | ||||||||||||
Share-based compensation | 100,000 | 1 | 21 | - | - | 22 | ||||||
Net comprehensive loss | - | - | - | - | (1,092) | (1,092) | ||||||
Balances, | 153,933,313 | $ | 29,093 | $ | 3,857 | $ | (2) | $ | (28,971) | $ | 3,977 | |
December 31, 2023 | ||||||||||||
Share-based compensation | - | - | - | - | - | - | ||||||
Net comprehensive loss | - | - | - | - | (362) | (362) | ||||||
Balances, | 153,933,313 | $ | 29,093 | $ | 3,857 | $ | (2) | $ | (29,333) | $ | 3,615 | |
March 31, 2024 | ||||||||||||
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Wi2Wi Corporation
Unaudited Consolidated Interim Statements of Cash Flows
(All dollar amounts in thousands of U.S. dollars, unless otherwise noted)
For years ended March 31, | 2024 | 2023 | |||
Cash Flows from Operating Activities | |||||
Net loss for the year | $ | (362) | $ | (233) | |
Adjustments for non-cash items: | |||||
Depreciation and amortization | 177 | 193 | |||
Share-based compensation | - | - | |||
Changes in non-cash working capital: | |||||
Trade accounts receivable | (279) | (237) | |||
Inventories | 107 | 252 | |||
Prepaid expenses and other current assets | (44) | 30 | |||
Accounts payable | 245 | (30) | |||
Accrued liabilities | 11 | (94) | |||
Net Cash Used in Operating Activities | (145) | (119) | |||
Cash Flows from Investing Activity | |||||
Additions to property and equipment | (188) | (2) | |||
Net Cash Used in Investing Activity | (188) | (2) | |||
Cash Flows from Financing Activities | |||||
Note payable | 160 | (14) | |||
Repayment of economic injury disaster loan | (1) | - | |||
Lease payments | (107) | (114) | |||
Net Cash Provided by (Used in) Financing Activities | 52 | (128) | |||
Net decrease in Cash | (281) | (249) | |||
Cash, beginning of year | 917 | 1,022 | |||
Cash, end of year | $ | 636 | $ | 1,022 | |
Supplemental cash flow information | |||||
Cash paid for interest | $ | 33 | $ | 32 | |
Cash paid for income taxes | - | - |
During the three months ended March 31, 2024 the Company acquired $178 of property and equipment via a note payable, there were no material non-cash financing nor investing activities in the three months ended March 31, 2024.
See accompanying notes to consolidated financial statements.
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Wi2Wi Corporation
Notes to Unaudited Condensed Consolidated Interim Financial Statements
(All dollar amounts in thousands of U.S. dollars, unless otherwise noted)
1. Nature and Description of the Company and Going Concern
Sargeant Bay Capital, Inc., a Canadian entity, was incorporated pursuant to the Canada Business Corporations Act on July 9, 2004. On December 12, 2005, Sargeant Bay Capital, Inc. changed its name to Wi2Wi Corporation (the "Company") and became the legal parent of its wholly owned operating subsidiary, Wi2Wi Inc., a Delaware company, through a reverse takeover transaction. Wi2Wi Inc., was incorporated on April 29, 2005 and was mainly inactive until it acquired the original equipment manufacturing (OEM) products division of Actiontec Electronics on October 1, 2005.
Wi2Wi is a vertically integrated manufacturer providing wireless connectivity solutions, precision timing devices, frequency control products and microwave filters to the global market addressing various applications in the market segments; Internet of Things (IoT), Industrial Internet of Things (IoT/M2M/Industry 4.0), Avionics, Space, Military and Industrial. The Company shares trade on the TSX Venture Exchange under the symbol "YTY".
On February 4, 2016, Wi2Wi LLC was organized in the State of Wisconsin, a wholly owned subsidiary of Wi2Wi Inc. to conduct all or a portion of the Company's business in the State of Wisconsin.
On September 3, 2016, WI2WI (India) PRIVATE LIMITED was incorporated in India, as a wholly owned subsidiary of Wi2Wi, Inc. This is an engineering office for the wireless connectivity products, which works on developing new products.
In the first several months of 2020, the virus COVID-19 spread worldwide. On March 23, 2020, the United States Department of Homeland Security designated the Company as part of the Critical Infrastructure Sector. The Company continues to operate with a reduced manufacturing work force in essential product lines and continues to monitor and insure employee welfare. As of the filing date, the extent of the impact of COVID-19 on the Company's operational and financial performance will depend on future developments, including the duration of the outbreak and related governmental or other regulatory actions.
These financial statements have been prepared on a going concern basis which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company's ability to continue as a going concern is dependent upon its success in generating future profitable operations sufficient to eliminate its cumulative deficit, and continuing lender and shareholder support. There is no assurance that the steps the Company is taking to maintain future profitable operations will be successful. These conditions indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern.
2. Basis of Preparation
The consolidated financial statements are presented in U.S. dollars ("USD") and all values are rounded to the nearest thousand dollars except where otherwise indicated. The consolidated financial statements have been prepared on an accrual basis except for cash flow information, and are based on historical costs except for certain financial instruments, which are measured at fair value.
Statement of Compliance and Authorization
These unaudited condensed consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) under IAS 34, Interim Financial Reporting (IAS 34) as issued by the International Accounting Standards Board (IASB). These unaudited condensed consolidated interim financial statements do not include all the information and notes required by IFRS for annual financial statements and, therefore, should be read in conjunction with the audited consolidated financial
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Wi2Wi Corporation
Notes to Unaudited Condensed Consolidated Interim Financial Statements
(All dollar amounts in thousands of U.S. dollars, unless otherwise noted)
statements and notes for the Company's year ended December 31, 2023, which are available on SEDAR at www.sedar.com.
The unaudited condensed consolidated interim financial statements include the financial statements of Wi2Wi Corporation and its wholly owned subsidiaries, Wi2Wi Inc., Wi2Wi LLC and Wi2Wi (India) PRIVATE LIMITED. All intercompany balances and transactions have been eliminated on consolidation.
The Company operates as one segment. Substantially all assets of the Company are located in the United States.
Notice of No Auditor Review of Condensed Consolidated Interim Financial Statements
These condensed consolidated interim financial statements of Wi2Wi Corporation for the three months ended March 31, 2024 have been prepared by Management and were authorized for issue in accordance with a resolution of the Board of Directors on May 8, 2024. Wi2Wi Corporation's independent auditor has not performed a review of these condensed consolidated interim financial statements, in accordance with the standards established by the Chartered Professional Accountants of Canada for a review of interim financial statements by an entities auditors.
3. Capital Management
The Company considers its capital to be comprised of the items included in the consolidated statements of changes in shareholders' equity, which totaled $3,615 at March 31, 2024 (2023 - $5,047). The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may issue new shares through private placements, sell assets to reduce debt or return capital to shareholders. The Company is not subject to externally imposed capital requirements. There have been no changes in the Company's definition of capital or capital management objectives during the three months ended March 31, 2024 and 2023.
The Company's objective when managing capital is to safeguard the Company's ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders.
4. Material Accounting Policy Information
Inventories
Inventories are recorded at the lower of cost or net realizable value. Cost is determined on a first in first out basis and includes all costs of purchase, costs of conversion (direct costs and an allocation of fixed and variable production overheads) and other costs incurred in bringing the inventory to their present location and condition. Net realizable value is the estimated selling price less estimated costs to complete. As a supplier of system in package and modular products, inventory cost consists of amounts paid to the Company's contract manufacturers for product that is drop shipped to customers or shipped to the Company.
Property and Equipment
Property and equipment is stated at cost less accumulated depreciation and impairment losses. Depreciation is computed using the straight line method over estimated useful lives of:
- Three years for computer equipment and software;
- Five years for furniture and fixtures;
- Five to ten years for machinery and equipment; and
- Over the term of lease or estimated useful life of leaseholds, whichever is shorter.
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Wi2Wi Corporation
Notes to Unaudited Condensed Consolidated Interim Financial Statements
(All dollar amounts in thousands of U.S. dollars, unless otherwise noted)
Useful lives, residual values, and depreciation methods are reviewed at least annually, and any changes in previous estimates are accounted for prospectively.
Impairment of Non-Financial Assets
Non-financial assets to be held and used by the Company are reviewed for possible impairment annually, and whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If changes in circumstances indicate that the carrying amount of an asset that an entity expects to hold and use may not be recoverable, the Company must estimate the difference between the carrying amount of the asset and the recoverable amount. If the carrying amount exceeds the recoverable amount, the difference is recognized as an impairment loss. The recoverable amount is the higher of an asset's fair value less costs of disposal and its value in use. Impairment charges can be subsequently reversed if they no longer exist but cannot exceed the carrying amount that would have been determined (net of depreciation) had no impairment loss been recognized in the prior years. No impairment charges have been recorded for any of the periods presented.
Financial Instruments
Financial assets and financial liabilities, including derivatives, are recognized on the consolidated statement of financial position when the Company becomes a party to the financial instrument or derivative contract.
Classification
The Company classifies its financial assets and financial liabilities in the following measurement categories i) those to be measured subsequently at fair value through profit or loss (FVTPL); ii) those to be measured subsequently at fair value through other comprehensive income (FVOCI); and iii) those to be measured at amortized cost, using the effective interest method. The effective interest method is a method of calculating the amortized cost of a financial asset or liability and of allocating interest income or expense over the relevant period. The classification of financial assets depends on the business model for managing the financial assets and the contractual terms of the cash flows. Financial liabilities are classified as measured at amortized cost unless they are designated as measured subsequently at FVTPL (irrevocable election at the time of recognition). For assets and liabilities measured at fair value, gains and losses are either recorded in profit or loss or other comprehensive income (loss).
The Company reclassifies financial assets when and only when its business model for managing those assets changes. Financial liabilities are not reclassified.
Measurement
All financial instruments are required to be measured at fair value on initial recognition, plus, in the case of a financial asset or financial liability not at FVTPL, transaction costs that are directly attributable to the acquisition or issuance of the financial asset or financial liability. Transaction costs of financial assets and financial liabilities carried at FVTPL are expensed in profit or loss. Financial assets and financial liabilities with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest. Financial assets that are held within a business model whose objective is to collect the contractual cash flows, and that have contractual cash flows that are solely payments of principal and interest on the principal outstanding are generally measured at amortized cost at the end of the subsequent accounting periods. All other financial assets including equity investments are measured at their fair values at the end of subsequent accounting periods, with any changes taken through profit and loss or other comprehensive income (irrevocable election at the time of recognition). For financial liabilities measured subsequently at FVTPL, changes in fair value due to the Company's own credit risk are recorded in other comprehensive income.
9
Wi2Wi Corporation
Notes to Unaudited Condensed Consolidated Interim Financial Statements
(All dollar amounts in thousands of U.S. dollars, unless otherwise noted)
Expected Credit Losses and Impairment
The Company assesses all information available, including on a forward-looking basis the expected credit losses associated with its assets carried at amortized cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk. To assess whether there is a significant increase in credit risk, the Company compares the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition based on all information available, and reasonable and supportable forward-looking information.
For trade accounts receivable, the Company applies the simplified approach as permitted by IFRS 9. The simplified approach to the recognition of expected losses does not require the Company to track the changes in credit risk; rather, the Company recognizes a loss allowance based on lifetime expected credit losses at each reporting date. Trade accounts receivable are stated net of the loss allowance.
Evidence of impairment may include indications that the counterparty debtor or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganization and where observable data indicates that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults. Receivables are reviewed qualitatively on a case-by-case basis and management's estimates include providing for 100% of specific customer balances when it is deemed probable that the balance is uncollectable.
Expected credit losses are measured as the difference in the present value of the contractual cash flows that are due to the Company under the contract, and the cash flows that the Company expects to receive. The Company assesses all information available, including aging and turnover, credit worthiness, credit concentration, the existence of third-party insurance, customer relationships, and forward looking macro-economic factors in the measurement of the expected credit losses associated with trade accounts receivable.
The Company measures expected credit losses by considering the risk of default over the contract period and incorporates forward-looking information into its measurement. Recoveries of trade accounts receivable previously written off are recorded in profit or loss when received.
The Company's financial instruments are accounted for as follows:
Classification | Measurement | |
Cash and restricted cash | Amortized cost | Amortized cost |
Trade accounts receivable | Amortized cost | Amortized cost |
Accounts payable | Amortized cost | Amortized cost |
Accrued liabilities | Amortized cost | Amortized cost |
Warrant liability | FVTPL | Fair value |
Note payable | Amortized cost | Amortized cost |
Economic injury disaster loan | Amortized cost | Amortized cost |
Income Taxes |
The Company applies the asset and liability approach to recording current and deferred taxes. Current tax is the amount of income taxes payable (recoverable) in respect of the taxable profit (tax loss) for a period. Deferred tax assets and liabilities are recognized for the deferred tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using substantively enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are recognized to the extent that the realization of the related tax benefit through future taxable income is probable. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in profit or loss in the period that includes the enacted or substantively enacted date.
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Wi2Wi Corporation published this content on 10 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 10 May 2024 21:09:14 UTC.