Consolidated Financial Statements of
WAVEFRONT TECHNOLOGY SOLUTIONS INC.
August 31, 2021 and 2020
TABLE OF CONTENTS
CONSOLIDATED FINANCIAL STATEMENTS | ||
Consolidated statements of financial position | 1 | |
Consolidated statements of net loss and comprehensive loss | 2 | |
Consolidated statements of changes in shareholders' equity | 3 | |
Consolidated statements of cash flows | 4 | |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | ||
Note 1 | Nature of operations and corporate information | 5 |
Note 2 | Basis of presentation and going concern | 5 |
Note 3 | Significant accounting policies | 6 |
Note 4 | Changes in accounting polices and new accounting standards issued but not yet adopted | 15 |
Note 5 | Critical accounting estimates and judgements | 16 |
Note 6 | Impairment | 18 |
Note 7 | Cash and cash equivalents | 18 |
Note 8 | Property, plant and equipment | 18 |
Note 9 | Right-of-use assets and lease liabilities | 20 |
Note 10 | Intangible assets | 21 |
Note 11 | Share capital | 22 |
Note 12 | Expenses by nature | 25 |
Note 13 | Government assistance | 26 |
Note 14 | Income taxes | 26 |
Note 15 | Loss per share | 28 |
Note 16 | Capital management | 29 |
Note 17 | Financial instruments | 30 |
Note 18 | Commitments and guarantees | 34 |
Note 19 | Segmented information and significant customers | 34 |
Note 20 | Subsequent events | 35 |
Deloitte LLP
700, 850 2 Street SW
Calgary, AB T2P 0R8
Canada
Tel: 403-267-1700
Fax: 587-774-5379
www.deloitte.ca
Independent Auditor's Report
To the Shareholders and the Board of Directors of Wavefront Technology Solutions Inc.
Opinion
We have audited the consolidated financial statements of Wavefront Technology Solutions Inc., (the "Company"), which comprise the consolidated statements of financial position as at August 31, 2021 and 2020, and the consolidated statements of net loss and comprehensive loss, changes in shareholders equity and cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies (collectively referred to as the "financial statements").
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as at August 31, 2021 and 2020, and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards ("IFRS").
Basis for Opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards ("Canadian GAAS"). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material Uncertainty related to Going Concern
We draw attention to Note 2 in the financial statements, which indicates that the Company incurred a net loss of $1,374,357 during the year ended August 31, 2021 and has a net decrease in cash and cash equivalents of $615,778. As stated in Note 2, these events or conditions, along with other matters as set forth in Note 2, indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
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Other Information
Management is responsible for the other information. The other information comprises:
- Management's Discussion and Analysis
Our opinion on the financial statements does not cover the other information and we do not and will not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
We obtained Management's Discussion and Analysis prior to the date of this auditor's report. If, based on the work we have performed on this other information, we conclude that there is a material misstatement of this other information, we are required to report that fact in this auditor's report. We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with IFRS, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company's financial reporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with Canadian GAAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with Canadian GAAS, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
- Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
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- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
- Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
- Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
- Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
The engagement partner on the audit resulting in this independent auditor's report is David Langlois.
Chartered Professional Accountants
Calgary, Alberta
December 6, 2021
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WAVEFRONT TECHNOLOGY SOLUTIONS INC.
Consolidated Statements of Financial Position
As at August 31, 2021, and 2020
(Canadian dollars)
Note | August 31, | August 31, | |||||||||
ASSETS | 2021 | 2020 | |||||||||
CURRENT ASSETS | |||||||||||
Cash and cash equivalents | 7 | $ | 1,201,893 | $ | 1,817,671 | ||||||
Trade and other receivables | 17 | 193,604 | 764,629 | ||||||||
Inventories | 52,428 | 90,859 | |||||||||
Prepaid expenses and other current assets | 58,855 | 74,429 | |||||||||
TOTAL CURRENT ASSETS | 1,506,780 | 2,747,588 | |||||||||
NON-CURRENT ASSETS | |||||||||||
Deposits | 14,150 | 14,150 | |||||||||
Property, plant and equipment | 8 | 439,631 | 484,883 | ||||||||
Right-of-use assets | 9 | 459,929 | 62,648 | ||||||||
Intangible assets | 6, 10 | - | 62,229 | ||||||||
TOTAL ASSETS | $ | 2,420,490 | $ | 3,371,498 | |||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||
CURRENT LIABILITIES | |||||||||||
Unearned revenue | 78,041 | 79,639 | |||||||||
Trade accounts payable and accrued liabilities | 17 | 490,985 | 564,911 | ||||||||
Lease liabilities | 9 | 97,248 | 64,203 | ||||||||
TOTAL CURRENT LIABILITIES | 666,274 | 708,753 | |||||||||
NON-CURRENT LIABILITIES | |||||||||||
Other accrued liabilities | 20,268 | - | |||||||||
Lease liabilities | 9 | 398,481 | - | ||||||||
TOTAL LIABILITIES | $ | 1,085,023 | $ | 708,753 | |||||||
SHAREHOLDERS' EQUITY | |||||||||||
Share capital | 11 b | 67,299,083 | 67,299,083 | ||||||||
Warrants | 11 c | 467,716 | 467,716 | ||||||||
Contributed surplus | 11 e | 9,463,336 | 9,414,471 | ||||||||
Accumulated other comprehensive income | 565,366 | 567,152 | |||||||||
Deficit | (76,460,034) | (75,085,677) | |||||||||
1,335,467 | 2,662,745 | ||||||||||
(2,420,490) | (3,371,498) | ||||||||||
The accompanying notes are an integral part of these consolidated financial statements | |||||||||||
APPROVED BY THE BOARD | |||||||||||
"Brett Davidson" (signed) | Director | ||||||||||
"Dennis Minano" (signed) | Director |
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Wavefront Technology Solutions Inc. published this content on 08 December 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 December 2021 09:05:07 UTC.