"Notice to Reader"

The accompanying unaudited interim financial statements of Plaintree Systems Inc. for the three months ended June 30, 2022 have been prepared by management and approved by the Audit Committee and the Board of Directors of the Company. These statements have not been reviewed by the Company's external auditors.

Date: August 25, 2022

"David Watson"

_____________

David Watson

CEO

Plaintree Systems Inc.

Consolidated statements of financial position (unaudited)

(in Canadian dollars)

June 30, 2022

March 31, 2022

$

$

Assets

Current assets

Cash

1,325,275

1,911,201

Trade receivables and other receivables

2,931,224

2,787,415

Unbilled revenue

2,317,763

2,012,856

Inventories (Note3)

3,031,020

3,093,664

Prepaid expenses and other receivables

482,919

331,868

Current portion of mortgage receivable (Note 4)

5,663

5,578

10,093,864

10,142,582

Long-term portion of mortage receivable (Note 4)

282,783

284,231

Property, plant and equipment (Note 8)

3,026,384

3,047,340

Right of use asset, building (Note 8)

2,348,162

2,428,686

Intangible assets (Note 9)

1,326,426

1,291,353

Goodwill (Note 9)

853,302

853,302

17,930,921

18,047,494

Liabilities

Current liabilities

Trade and other payables

2,309,926

2,614,742

Deferred revenue

814,202

867,233

Current portion of taxes payable

170,000

170,000

Current portion of long-term debt and lease obligation (Note 5,6)

4,238,812

4,324,490

Current portion of due to related parties (Note 10)

50,000

50,000

Current portion of government assistance (Note 7)

65,031

74,099

7,647,971

8,100,564

Long-term debt and lease obligation (Note 5,6)

2,405,937

2,403,761

Deferred government assistance (Note 7)

478,191

470,490

Due to related parties (Note 10)

4,953,063

4,965,564

Deferred tax liabilities

340,000

340,000

15,825,162

16,280,379

Shareholders' equity (deficiency)

Issued capital

2

2

Contributed surplus

2,159,842

2,159,842

(54,085)

(392,729)

2,105,759

1,767,115

17,930,921

18,047,494

Approved by the Board "David Watson"

"Girvan Patterson"

Plaintree Systems Inc.

Consolidated statements of comprehensive earnings

For the three months ended June 30, 2022 and June 30, 2021

(unaudited)

(in Canadian dollars)

Three months ended

June 30, 2022

June 30, 2021

$

$

Revenue

5,446,500

3,643,370

Cost of sales

3,989,688

2,581,132

Gross margin

1,456,812

1,062,238

Operating expenses

Research and development

403,281

343,576

Finance and administration

351,629

301,654

Sales and marketing

340,987

118,208

Interest expense

87,673

46,207

(Gain) on foreign exchange

(65,402)

(9,552)

1,118,168

800,093

Net earnings and comprehensive earnings

338,644

262,145

Basic and diluted (loss) per common share (Note 12)

(0.00)

(0.01)

Weighted average common shares outstanding

12,925,253

12,925,253

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

Plaintree Systems Inc.

Consolidated statements of cash flows

For the three months ended June 30, 2022 and June 30, 2021

(unaudited)

(in Canadian dollars)

Three months ended

June 30, 2022

June 30, 2021

$

$

Operating activities

Comprehensive earnings

338,644

262,145

Add (deduct) items not affecting cash:

Depreciation of intangible assets

43,965

36,446

Depreciation of property, plant and equipment

376,226

194,634

Write-down of inventory

53,886

-

Changes in non-cash operating working capital items

Deferred revenue

(53,031)

204,928

Inventories

8,758

18,610

Prepaid expenses and other receivables

(151,051)

(471,446)

Trade and other payables

(304,816)

(287,250)

Trade and other receivables

(143,809)

171,196

Unbilled revenue

(304,907)

594,026

Mortgage receivable

1,363

1,283

Cash (used) provided by operations

(134,772)

724,572

Investing activities

Payments to acquire intangible assets

(79,038)

-

Payments to acquire property, plant and equipment

(41,457)

(71,740)

Cash (used) in investing activities

(120,495)

(71,740)

Financing activities

Repayment of government assistance

(1,367)

(22,649)

Repayment of long-term debt

(116,290)

(80,097)

Proceeds from financing

165,281

-

Repayment of capital lease obligations

(365,782)

(129,981)

Repayment of related party borrowings (Note 10)

(12,501)

(29,014)

Cash (used) in financing activities

(330,659)

(261,741)

Net cash inflow

(585,926)

391,091

Net cash (beginning of the year)

1,911,201

2,066,688

Net cash, end of the period

1,325,275

2,457,779

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

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Plaintree Systems Inc. published this content on 28 August 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 September 2022 14:49:04 UTC.