Consolidated Financial Statements (Expressed in Canadian dollars)

For the years ended December 31, 2019 and 2018

Independent Auditor's Report

To the Shareholders of AnalytixInsight Inc.

Opinion

We have audited the consolidated financial statements of AnalytixInsight Inc. and its subsidiaries (the "Company"), which comprise the consolidated statements of financial position as at December 31, 2019 and 2018, and the consolidated statements of loss and comprehensive loss, consolidated statements of cash flows and consolidated statements of changes in shareholders' equity for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as at December 31, 2019 and 2018, and its consolidated financial performance and its consolidated 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. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the consolidated 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 consolidated financial statements in Canada. 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.

Other information

Management is responsible for the other information. The other information comprises Management's Discussion and Analysis.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated 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, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

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Responsibilities of management and those charged with governance for the consolidated financial statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated 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 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 consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated 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 generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated 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 risks 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.
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 consolidated 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 consolidated financial statements, including the disclosures, and whether the consolidated 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 consolidated 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 of the audit resulting in this independent auditor's report is Glen McFarland.

McGovern Hurley LLP

Chartered Professional Accountants Licensed Public Accountants

Toronto, Ontario April 16, 2020

Consolidated statements of financial position (Expressed in Canadian dollars)

	Notes	December 31, 2019	December 31, 2018
ASSETS
Current
Cash		$1,354,612	$1,051,618
Restricted deposits	4	58,684	40,940
Accounts and other receivables	5	725,457	649,111
Prepaid expenses		144,463	167,808
Total current assets		2,283,216	1,909,477
Receivables	5	-	58,814
Equipment	6	34,347	38,951
Intangible assets	7	591,262	1,127,125
Goodwill	7	700,931	736,226
Investment in associate	8	1,876,511	1,165,974
Other investment	11	60,000	60,000
Total assets		$5,546,267	$5,096,567
LIABILITIES
Current
Accounts payable and accrued liabilities	12	$447,418	$506,364
Lease liability	16	1,527	-
Deferred revenue		69,156	157,390
Total current liabilities		518,101	663,754
Lease liability	16	5,752	-
Total liabilities		523,853	663,754

SHAREHOLDERS' EQUITY
Share capital	9	19,993,820	17,605,259
Reserves	10	1,687,466	1,671,486
Deficit		(16,890,938)	(15,196,978)
Currency translation reserve		232,066	353,046
Total shareholders' equity		5,022,414	4,432,813
Total liabilities and shareholders' equity		$5,546,267	$5,096,567
	1
Nature of operations and going concernCommitments and contingencies	13

Approved by the Board of Directors on April 16, 2020.

"Prakash Hariharan" "Chaith Kondragunta"

Prakash Hariharan – Director Chaith Kondragunta – Director

Consolidated statements of loss and comprehensive loss (Expressed in Canadian dollars)

		Year ended
	Notes	December 31,
		2019	2018
REVENUE
Services	14	$ 3,672,715	$ 4,837,809
TOTAL REVENUE		3,672,715	4,837,809
Cost of sales		2,377,215	3,271,613
Amortization	7	492,251	480,709
Gross profit		803,249	1,085,487
EXPENSES
Consulting and compensation	12	1,785,063	1,735,046
Professional fees		223,655	245,444
General and administration		340,239	533,735
Selling and marketing		118,116	180,020
Travel		573,563	416,900
Share-based compensation	10, 12	129,640	213,411
TOTAL EXPENSES		3,170,276	3,324,556
Loss before other items		(2,367,027)	(2,239,069)
OTHER ITEMS
Interest expense		(2,550)	(5,195)
Share of income from investment in associate	8	710,537	197,654
Loss on disposal of assets	6	-	(100,709)
Allowance for doubtful accounts		-	(98,342)
Foreign exchange (loss) / gain		(5,654)	4,348
Other tax expense		(5,264)	(60,225)
Net loss for the year		(1,669,958)	(2,301,538)
Other comprehensive (loss) gain
Foreign currency translation		(120,980)	236,600
Loss and comprehensive loss for the year		$ (1,790,938) $ (2,064,938)
Weighted average number of shares outstanding – basic and dilutedBasic loss per share		74,018,897$(0.02) $	69,284,851(0.03)

Consolidated statements of cash flows (Expressed in Canadian dollars)

		Year endedDecember 31,
	Notes	2019	2018

Cash provided by (used in):
Operations:
Net loss for the year	$	(1,669,958)	$(2,301,538)
Items not involving cash:
Depreciation	6	17,932	26,142
Loss on disposal of assets	6	-	100,709
Amortization of intangible assets	7	492,251	480,709
Income from investment in associate	8	(710,537)	(197,654)
Share-based compensation	10	129,640	213,411
Net cash from operating activities before changes in working capital		(1,740,672)	(1,678,221)
Change in non-cash operating working capital		(175,048)	323,219
Net cash flows from operating activities		(1,915,720)	(1,355,002)
Investing:
Additions to equipment	6	(7,673)	(44,249)
Net cash flows from investing activities		(7,673)	(44,249)
Financing:
Exercise of stock options	9, 10	140,400	100,724
Exercise of warrants	9, 10	600,000	960,532
Private placement	9	1,600,000	-
Share issuance costs	9	(89,500)
Net cash flows from financing activities		2,250,900	1,061,256
Effect of exchange rate change on cash		(24,513)	32,553
Change in cash for the year		327,507	(337,995)
Cash, beginning of the year		1,051,618	1,357,060
Cash, end of the year		$1,354,612	$1,051,618
Supplementary information:
Right-of-use asset		$7,279	$-
Finders' warrants issued in connection with private placement		26,450	-

Consolidated statement of changes in shareholders' equity (Expressed in Canadian dollars)

	Number ofshares	Share capital	Reserves	Deficit	Currencytranslationreserve		Shareholders'equity
Balance, December 31, 2017		66,605,662 $ 16,429,281		$ 1,723,230 $ (13,045,873)	$116,446		$5,223,084
Share-based compensation	-	-	213,411	-		-	213,411
Warrant exercise	3,171,125	1,003,706	(43,174)	-		-	960,532
Stock option exercise	455,000	172,272	(71,548)	-		-	100,724
Stock option expiration	-	-	(60,472)	60,472		-	-
Warrant expiration	-	-	(89,961)	89,961		-	-
Other comprehensive gain for the year	-	-	-	-	236,600		236,600
Net loss for the year	-	-	-	(2,301,538)		-	(2,301,538)
Balance, December 31, 2018		70,231,787 $ 17,605,259		$ 1,671,486 $ (15,196,978)	$353,046		$4,432,813
Share-based compensation	-	-	224,174	(44,747)		-	179,427
Private placement	4,000,000	1,342,845	283,605	-		-	1,626,450
Cost of issue	-	(115,950)	-	-		-	(115,950)
Warrant exercise	3,000,000	943,361	(343,361)	-		-	600,000
Option exercise	520,000	218,305	(77,905)	-		-	140,400
Option expiration	-	-	(20,745)	20,745		-	-
Option forfeiture	-	-	(49,788)	-		-	(49,788)
Other comprehensive loss for the year	-	-	-	-	(120,980)		(120,980)
Net loss for the year	-	-	-	(1,669,958)		-	(1,669,958)
Balance, December 31, 2019		77,751,787 $ 19,993,820		$ 1,687,466 $ (16,890,938)	$232,066		$5,022,414

1. Nature of operations and going concern

AnalytixInsight Inc. (the "Company") was continued as a corporation under the Ontario Business Corporations Act on August 18, 2014*.* The Company's registered and head office address is located at 65 Queen Street West, Suite 815, Toronto, ON, M5H 2M5. The Company's shares are listed on the TSX Venture Exchange ("TSX.V") under the symbol "ALY". The Company has a wholly owned subsidiary in the United States named Euclides Technologies, Inc. ("Euclides", formerly named CapitalCube Corp.) and a 49% interest in an Italian company named Marketwall SRL ("Marketwall").

The Company provides financial research and content for investors, information providers, finance portals and media through its online portal www.capitalcube.com and through its institutional partner Connect platform (collectively referred to as the big data and artificial intelligence business segment). It also provides system integration services for the WorkForce Management ("WFM") industry through its Euclides Technologies, Inc. subsidiary (referred to as the professional services business). Marketwall focuses on mobile opportunities especially in the business to business and business to business to consumer spaces.

The Company has a history of operating losses and expects to incur further losses in the development of its businesses. As at December 31, 2019, the Company has a working capital of $1,765,115 (December 31, 2018 – $1,245,773). If the Company is unable to achieve profitable operations, other sources of funding will be required, and if not available, it is possible that the Company will be unable to continue as a going concern.

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") with the assumption that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. These consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Such adjustments could be material.

2. Significant accounting policies

a) Basis of preparation

These annual consolidated financial statements of the Company and its subsidiaries were prepared in accordance with IFRS, as issued by the International Accounting Standards Board ("IASB"), and have been prepared in accordance with accounting policies based on the IFRS standards and International Financial Reporting Interpretations Committee ("IFRIC") interpretations. The policies set out below were consistently applied to all the years presented unless otherwise noted.

The preparation of financial statements in accordance with International Account Standards ("IAS") 1, Presentation of Financial Statements, requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies.

These consolidated financial statements have been prepared on a historical cost basis except for financial instruments classified as FVPL, which are stated at their fair value. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting, except for cash flow information.

The consolidated financial statements are presented in Canadian dollars and include the accounts of the Company, having a Canadian dollar functional currency, and its wholly-owned subsidiary, Euclides, having a US dollar functional currency. The functional currency was determined through an analysis of factors outlined in IAS 21. In the event that there are changes impacting the factors used to determine the functional currency, the Company re-evaluates its functional currency. No such evaluation was necessary during the reporting periods presented.

b) Basis of presentation

The consolidated financial statements consolidate the accounts of AnalytixInsight Inc. and its subsidiary, Euclides Technologies Inc. All intercompany transactions, balances and unrealized gains and losses from intercompany transactions are eliminated on consolidation.

Subsidiaries consist of entities over which the Company is exposed to, or has rights to, variable returns as well as the ability to affect hose returns through the power to direct the relevant activities of the entity. Subsidiaries are fully consolidated from the date control is transferred to the Company and are de-consolidated from the date control ceases. The consolidated financial statements include all the assets, liabilities, revenues, expenses and cash flows of the Company and its subsidiary after eliminating inter-entity balances and transactions.

c) Foreign currency translation

In preparing the financial statements of the individual entities, transactions in currencies other than the entity's functional currency ("Foreign Currencies") are recognized at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in Foreign Currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in Foreign Currencies are retranslated at the rates prevailing at the date when the fair value was determined.

Exchange differences are recognized in the consolidated statement of loss in the period in which they arise except for:

exchange differences on foreign currency borrowings relating to assets under construction for future productive use are included in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings;
exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned nor likely to occur (therefore forming part of the net investment in the foreign operation), are recognized initially in other comprehensive income and reclassified from equity to profit or loss on disposal or partial disposal of the net investment.

Foreign exchange gains and losses that relate to borrowings and cash are presented in the consolidated statement of loss within "foreign exchange gain (loss)". All other foreign exchange gains and losses are also presented in the consolidated statement of loss within "foreign exchange (loss) gain".

The assets and liabilities of foreign operations, including goodwill and fair values adjustments arising on acquisition, are translated at the exchange rates at the reporting date. The income and expenses of foreign operations are translated at the exchange rates at the dates of the transactions.

Foreign currency differences are recognized in other comprehensive loss ("OCL") and accumulated in the translation reserve except to the extent that the translation difference is allocated to non-controlling interest ("NCI").

When a foreign operation is disposed of in its entirety or partially such that control, significant influence or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit and loss as part of the gain and loss on disposal. When only a part of the interest in subsidiary is disposed and control is retained, then the relevant portion of the cumulative amount is reattributed to NCI. When only a part of an associate or joint venture is disposed and significant influence or joint control is retained, the relevant portion of the cumulative amount is reclassified to profit and loss.

d) Income tax

Income tax comprises current and deferred tax. Income tax is recognized in the consolidated statement of loss except to the extent that it relates to items recognized directly in other comprehensive income or directly in equity, in which case the income tax is also recognized directly in other comprehensive loss or equity, respectively.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted, at the end of the reporting period, and any adjustment to tax payable in respect of previous years.

Deferred tax is recognized, using the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequence attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and for operating losses or tax credits. Deferred income tax is determined on a non-discounted basis using tax rates and laws that have been enacted or settled. Deferred tax assets are recognized to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences can be utilized.

e) Cash

Cash is comprised of cash on hand and current balances with banks and similar institutions. They are readily convertible into known amounts of cash and have insignificant risk of changes in value.

f) Share capital

Incremental costs directly attributable to the issuance of common shares and warrants are recognized as a deduction from equity. The proceeds from the exercise of stock options or warrants together with amounts previously recorded over the vesting periods are recorded as share capital. Share capital issued for non-monetary consideration is recorded in accordance with the Company's share-based compensation policy.

g) Loss per share

The Company calculates basic loss per share using the weighted average number of common shares outstanding during the period. Diluted loss per share is calculated by adjusting the weighted average number of common shares outstanding by an amount that assumes that the proceeds to be received on the exercise of dilutive stock options and warrants are applied to repurchase common shares at the average market price for the period in calculating the net dilution impact. Stock options and warrants are dilutive when the Company has income from operations and the average market price of the common shares during the period exceeds the exercise price of the options and warrants. Options and warrants are not included in the loss per share calculation as they are anti-dilutive for the periods presented.

h) Research and development

Expenditure on research activities is recognized in profit and loss as incurred. Development expenditures are capitalized only if the expenditure can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable, and the Company intends to and has sufficient resources to complete development and to use or sell the asset. Otherwise, these expenditures are recognized in profit and loss as incurred. Subsequent to initial recognition, development expenditures are measured at cost less accumulated amortization and any accumulated impairment losses.

i) Financial instruments

Financial assets

Initial recognition and measurement

Non-derivative financial assets within the scope of IFRS 9 are classified and measured as "financial assets at fair value", as either FVPL or FVOCI, and "financial assets at amortized costs", as appropriate. The Company determines the classification of financial assets at the time of initial recognition based on the Company's business model and the contractual terms of the cash flows.

All financial assets are recognized initially at fair value plus, in the case of financial assets not at FVPL, directly attributable transaction costs on the trade date at which the Company becomes a party to the contractual provisions of the instrument.

Subsequent measurement – financial assets at FVPL

Financial assets measured at FVPL include financial assets management intends to sell in the short term and any derivative financial instrument that is not designated as a hedging instrument in a hedge relationship. Financial assets measured at FVPL are carried at fair value in the consolidated statements of financial position with changes in fair value recognized in other income or expense in the consolidated statements of loss. The Company measures its other investment at FVPL.

Subsequent measurement – financial assets at amortized cost

After initial recognition, financial assets measured at amortized cost are subsequently measured at the end of each reporting period at amortized cost using the Effective Interest Rate ("EIR") method. Amortized cost is calculated by taking into account any discount or premium on acquisition and any fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the consolidated statements of loss. Accounts and other receivables held for collection of contractual cash flows, cash and restricted deposits are measured at amortized cost.

Financial assets (continued)

Subsequent measurement – financial assets at FVOCI

Financial assets measured at FVOCI are non-derivative financial assets that are not held for trading and the Company has made an irrevocable election at the time of initial recognition to measure the assets at FVOCI. The Company does not measure any financial assets at FVOCI.

After initial measurement, investments measured at FVOCI are subsequently measured at fair value with unrealized gains or losses recognized in other comprehensive income or loss in the consolidated statements of comprehensive loss. When the investment is sold, the cumulative gain or loss is not reclassified to profit or loss. Dividends from such investments are recognized in other income in the consolidated statements of loss when the right to receive payments is established.

Derecognition

A financial asset is derecognized when the contractual rights to the cash flows from the asset expire, or the Company no longer retains substantially all the risks and rewards of ownership.

Impairment of financial assets

The Company's only financial assets subject to impairment are other accounts receivable, which are measured at amortized cost. The Company has elected to apply the simplified approach to impairment as permitted by IFRS 9, which requires the expected lifetime loss to be recognized at the time of initial recognition of the receivable. To measure estimated credit losses, accounts receivable have been grouped based on shared credit risk characteristics, including the number of days past due. An impairment loss is reversed in subsequent periods if the amount of the expected loss decreases and the decrease can be objectively related to an event occurring after the initial impairment was recognized.

Financial liabilities

Initial recognition and measurement

Financial liabilities are measured at amortized cost, unless they are required to be measured at FVPL as is the case for held for trading or derivative instruments, or the Company has opted to measure the financial liability at FVPL. The Company's financial liabilities include trade and other payables, and lease liability, which are each measured at amortized cost. All financial liabilities are recognized initially at fair value.

Subsequent measurement – financial liabilities at amortized cost

After initial recognition, financial liabilities measured at amortized cost are subsequently measured at the end of each reporting period at amortized cost using the EIR method. Amortized cost is calculated by taking into account any discount or premium on acquisition and any fees or costs that are an integral part of the EIR. The Company's accounts payable and accrued liabilities are classified at amortized cost.

Subsequent measurement – financial liabilities at FVPL

Financial liabilities measured at FVPL include financial liabilities management intends to sell in the short term and any derivative financial instrument that is not designated as a hedging instrument in a hedge relationship. Financial liabilities measured at FVPL are carried at fair value in the consolidated statements of financial position with changes in fair value recognized in other income or expense in the consolidated statements of loss.

Derecognition

A financial liability is derecognized when the obligation under the liability is discharged, cancelled or expires with any associated gain or loss recognized in other income or expense in the consolidated statements of loss.

j) Equipment

Equipment is carried at acquisition cost less accumulated depreciation and impairment losses. Depreciation is determined at rates which will reduce the original cost to estimated residual values over the expected useful life of each asset. Average depreciation time for computers and other equipment is approximately 8 years; furniture is approximately 15 years.

Equipment that is withdrawn from use or have no reasonable prospect of being recovered through use or sale, are regularly identified and written off. Residual values and useful economic lives are reviewed at least annually, and adjusted if appropriate, at each reporting date.

Subsequent expenditure relating to an item of property, furniture and equipment is capitalized when it is probable that future economic benefits from the use of the assets will be increased. All other subsequent expenditures are recognized as repairs and maintenance.

k) Revenue recognition

The Company derives revenues from subscription fees, licensing fees, advertising and development work.

The Company recognizes revenue when there is evidence a sales arrangement exists, specific performance obligations have been satisfied, the sales price is fixed and determinable, and collectability is reasonably assured. Revenue from fixedprice service contracts and subscriptions are recognized over the life of a contract on a straight–line basis. Revenue billed in advance of its recognition is reflected as deferred revenue. Revenue and income from custom service contracts are determined based on completion of specific performance obligations.

l) Lease liabilities and right-of-use assets

At inception of the contract, the Company assesses whether a contract is, or contains, a lease by evaluating if the contract conveys the right to control the use of an identified asset. For contracts that contain a lease, the Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted by any initial direct costs, and costs to dismantle and remove the underlying asset less any lease incentives. The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the underlying asset or the end of the lease term. Under IFRS 16, right-of-use assets are tested for impairment in accordance with IAS 36 Impairment of Assets.

The lease liability is initially measured at the present value of lease payments to be paid subsequent to the commencement date of the lease, discounted either at the interest rate implicit in the lease or the Company's incremental borrowing rate. The lease payments measured in the initial lease liability include payments for an optional renewal period, if any, if the Company is reasonably certain that it will exercise a renewal extension option. The liability is measured at amortized cost using the effective interest method and will be remeasured when there is a change in either the future lease payments or assessment of whether an extension or other option will be exercised. The lease liability is subsequently adjusted for lease payments and interest on the obligation. Interest expense on the lease obligation is included in the consolidated statement of loss.

The Company has elected not to recognize right-of-use assets and lease liabilities for leases with a lease term of less than 12 months and low value assets and recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term, as permitted by IFRS 16.

The Company reports its right-of-use asset as part of property, plant and equipment on the consolidated statement of financial position. See Note 6 for continuity schedule of the right-of-use asset and Note 16 for lease liability.

m) Intangible assets

Following initial recognition, intangible assets are carried at cost less any accumulated amortization and any accumulated impairment losses. The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are amortized over their useful economic life and assessed for impairment whenever there is an indication that the intangible asset could be impaired. The amortization period and the amortization method for an intangible asset are reviewed at least at each financial year end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for on a prospective basis by changing the amortization period or method, as appropriate, and treated as changes in accounting estimates. Intangible assets are derecognized on disposal, or when no future economic benefits are expected from their use. Intangible assets with indefinite useful lives are tested for impairment annually, and whenever there is an indication that the intangible asset could be impaired, either individually or at the CGU level. Such intangibles are not amortized. The useful life of an intangible asset with an indefinite useful life is reviewed annually to determine whether the indefinite life assessment continues to be supportable. If not, the change in the useful life assessment from indefinite to finite is made on a prospective basis. Management determined the useful life of its intangible assets to be between 4 and 7 years during the years ended December 31, 2019 and 2018.

n) Business combinations and goodwill

Accounting for business combinations acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of acquisitiondate fair values of the assets transferred and liabilities assumed by the Company, liabilities incurred by the Company to former owners of the acquiree in exchange for control of the acquiree. Acquisition-related costs are recognized in the statement of loss as incurred. At the acquisition date, the identifiable assets acquired, liabilities and contingent liabilities assumed are recognized at their fair values, except for deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements, which are recognized and measured in accordance with IAS 12 Income tax and IAS 19 Employee Benefits, respectively.

Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer's previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after assessment, the net of the acquisition-date amounts of the identifiable assets acquired and liabilities assumed exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree and the fair value of the acquirer's previously held interest in the acquiree (if any), the excess is recognized immediately in the consolidated statement of loss as a bargain purchase gain.

o) Impairment of non-financial assets

The carrying amount of the Company's non-financial assets (which include investment in associate, non-financial assets available for sale, intangible assets, and goodwill) is reviewed at each reporting date to determine whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. An impairment loss is recognized whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. Impairment losses are recognized in the consolidated statement of loss and comprehensive loss. The recoverable amount of assets is the greater of an asset's fair value less cost to sell and valuein-use. In assessing value-in-use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of the time value of money and the risks specific to the assets. For an asset that does not generate cash inflows largely independent of those from other assets, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

An impairment loss is only reversed if there is an indication that the impairment loss may no longer exist and there has been a change in the estimate used to determine the recoverable amount, however, not to an amount higher than the carrying amount that would have been determined had no impairment loss been recognized in previous year.

Goodwill represents the excess of the cost of an acquired business over the fair value of the identifiable assets acquired and liabilities assumed. Goodwill is measured at cost less accumulated impairment losses and is not amortized. Goodwill is tested for impairment on an annual basis or whenever facts or circumstances indicate that the carrying amount may exceed its recoverable amount.

p) Share-based compensation

Share-based payments to employees are measured at the fair value of the instruments issued and amortized over the vesting periods. Share-based payments to non-employees are measured at the fair value of goods or services received or the fair value of the equity instruments issued, if it is determined the fair value of the goods or services cannot be reliably measured. Share-based payments are recorded at the date the goods or services are received. The corresponding amount is recorded in equity as the option reserve. The fair value of options is determined using a Black-Scholes pricing model which incorporates all market vesting conditions. The number of options expected to vest is reviewed and adjusted at the end of each reporting period such that the amount recognized for services received as consideration for the equity instruments granted shall be based on the number of equity instruments that eventually vest. On exercise, the value recorded is reallocated from option reserve to share capital along with any proceeds received. On expiry, the value recorded is reallocated to deficit.

q) Investment in associates

An associate is an entity over which the Company has significant influence but not control. Investments in associates are based on the Company's ability to exercise significant influence over the operating and financial policies of the investee. Investments in associates are accounted for using the equity method whereby the investment is initially recorded at cost and adjusted thereafter for additional investments made, dividends received and to recognize the Company's proportionate share of the associate's post acquisition income or loss.

The Company's share of the associate's profit or loss is recognized in the consolidated statement of loss, and its share of movements in other comprehensive income is recognized in the consolidated statement of other comprehensive loss with a corresponding adjustment to the carrying amount of the investment. When the Company's share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Company does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

The Company determines at each reporting date whether there is any objective evidence that the investment in the associate is impaired. If this is the case, the Company calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognizes the amount in the consolidated statement of loss and comprehensive loss.

The Company classifies its investment in Marketwall as an investment in associate, as the Company's direct ownership has been diluted to 49% as of December 31, 2019 and 2018, and the Company no longer has control over Marketwall.

r) Accounting changes

The consolidated financial statements were prepared using the same accounting policies and methods as those used in the Company's consolidated financial statements as at and for the year ended December 31, 2018, except for the adoption of the following new standards and interpretations issued by the IASB that were effective as of January 1, 2019.

The Company adopted IFRS 16, Leases ("IFRS 16") on January 1, 2019. Adoption of this standard did not have a significant impact on the consolidated financial statements.

s) Future accounting standards issued but not yet effective

Certain pronouncements were issued by the IASB or the IFRIC that are mandatory for accounting periods commencing on or after January 1, 2020. Many are not applicable or do not have a significant impact to the Company and have been excluded. The following have not yet been adopted and are being evaluated to determine their impact on the Company.

IAS 1 – Presentation of Financial Statements ("IAS 1") and IAS 8 – Accounting Policies, Changes in Accounting Estimates and Errors ("IAS 8") were amended in October 2018 to refine the definition of materiality and clarify its characteristics. The revised definition focuses on the idea that information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general-purpose financial statements make on the basis of those financial statements. The amendments are effective for annual reporting periods beginning on or after January 1, 2020.

IFRS 10 – Consolidated Financial Statements ("IFRS 10") and IAS 28 – Investments in Associates and Joint Ventures ("IAS 28") were amended in September 2014 to address a conflict between the requirements of IAS 28 and IFRS 10 and clarify that in a transaction involving an associate or joint venture, the extent of gain or loss recognition depends on whether the assets sold or contributed constitute a business. The effective date of these amendments is yet to be determined, however early adoption is permitted.

There are no other standards/amendments or interpretations that are expected to have a significant effect on the consolidated financial statements of the Company.

3. Critical accounting estimates and judgments

The preparation of the consolidated financial statements in conformity with IFRS requires management to make estimates, judgments and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

Critical accounting estimates are estimates and assumptions made by management that may result in a material adjustment to the carrying amount of assets and liabilities within the next financial year and include, but are not limited to:

Intangible assets and goodwill

The Company makes use of experience and assumptions in estimating the useful lives and residual values of intangible assets and goodwill. Management reviews annually at December 31, whether any indications of impairment exist for intangible assets and goodwill. Information that the Company considers includes changes in the market, economic and legal environment in which the Company operates as well as internal sources of information. Estimates include but are not limited to estimates of the discounted future after‐tax cash flows expected to be derived from the Company's intangible assets and goodwill, costs to sell the assets and the appropriate discount rate.

Reductions in the number of subscribers and customers, increases in estimated future costs of sales, increases in estimated future capital costs, depreciation of the US dollar relative to the Canadian dollar and/or adverse current economics could result in a write-down of the carrying amounts of the intangible assets and goodwill.

Income, value added, withholding and other taxes

The Company is subject to income, value added, withholding and other taxes. Significant judgment is required in determining the Company's provisions for taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Company recognizes liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. The determination of the Company's income, value added, withholding and other tax liabilities requires interpretation of complex laws and regulations. The Company's interpretation of taxation law as applied to transactions and activities may not coincide with the interpretation of the tax authorities. All tax related filings are subject to government audit and potential reassessment subsequent to the financial statement reporting period. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the tax related accruals and deferred income tax provisions in the period in which such determination is made.

3. Critical accounting estimates and judgments (continued)

Income taxes and recoverability of potential deferred tax assets

In assessing the probability of realizing income tax assets recognized, management makes estimates related to expectations of future taxable income, applicable tax planning opportunities, expected timing of reversals of existing temporary differences and the likelihood that tax positions taken will be sustained upon examination by applicable tax authorities. In making its assessments, management gives additional weight to positive and negative evidence that can be objectively verified. Estimates of future taxable income are based on forecasted cash flows from operations and the application of existing tax laws in each jurisdiction. The Company considers whether relevant tax planning opportunities are within the Company's control, are feasible, and are within management's ability to implement. Examination by applicable tax authorities is supported based on individual facts and circumstances of the relevant tax position examined in light of all available evidence. Where applicable tax laws and regulations are either unclear or subject to ongoing varying interpretations, it is reasonably possible that changes in these estimates can occur that materially affect the amounts of income tax assets recognized. Also, future changes in tax laws could limit the Company from realizing the tax benefits from the deferred tax assets. The Company reassesses unrecognized income tax assets at each reporting period.

Asset carrying values and impairment charges

In the determination of carrying values and impairment charges, management looks at the higher of recoverable amount or fair value less costs to sell in the case of assets and at objective evidence, significant or prolonged decline of fair value on financial assets indicating impairment. These determinations and their individual assumptions require that management make a decision based on the best available information at each reporting period.

Share-based payments

Management determines costs for share-based payments using market-based valuation techniques. The fair value of the market-based and performance-based share awards are determined at the date of grant using generally accepted valuation techniques. Assumptions are made and judgment used in applying valuation techniques. These assumptions and judgments include estimating the future volatility of the stock price, expected dividend yield, future employee turnover rates and future employee stock option exercise behaviors and corporate performance. Such judgments and assumptions are inherently uncertain. Changes in these assumptions could materially affect the fair value estimates.

Revenue recognition

The process of revenue recognition, including the valuation of barter transactions, involves significant management judgment. The Company performed focused procedures to test the valuation of revenue recorded in consideration of nonbarter contracts.

In its determination of the amount and timing of revenue to be recognized, management relies on assumptions and estimates supporting its revenue recognition policy. Estimates of the percentage of completion for applicable customer projects are based upon current actual and forecasted information and contractual terms.

Contingencies

By their nature, contingencies will only be resolved when one or more future events occur or fail to occur. The assessment of contingencies inherently involves the exercise of significant judgement and estimates of the outcome of future events. See Note 13.

Discount rate used for IFRS 16

The determination of the Company's lease liabilities, right-of-use assets, and net investment in leases depends on certain assumptions, which include the selection of the discount rate. The discount rate is set by reference to the Company's incremental borrowing rate. Significant assumptions are required to be made when determining which borrowing rates to apply in this determination. Changes in the assumptions used may have a significant effect on the Company's consolidated financial statements.

3. Critical accounting estimates and judgments (continued)

Determination of significant influence and impairment of investment in associate

Effective October 11, 2016, the Company has classified Marketwall as an associate based on management's judgment that the Company has significant influence through board representation and 49% of the voting rights. Other parties hold 51% of the voting rights and the Company can no longer exercise control over the board of directors and its operational decisionmaking process.

Impairment exists when the carrying value of the investment in associate exceeds its recoverable amount, which is the higher of its fair value less costs to sell and its value in use. The determination of impairment requires significant judgement and can be triggered by significant adverse changes in the market, economic or legal environment in which the associate operates.

Fair value of investment in securities not quoted in an active market or private company investments

Where the fair values of financial assets and financial liabilities recorded on the consolidated statement of financial position cannot be derived from active markets, they are determined using a variety of valuation techniques. The inputs to these models are derived from observable market data where possible, but where observable market data are not available, judgment is required to establish fair values. Refer to Note 11 for further details.

Expected credit losses

Determining allowance for expected credit losses ("ECLs") requires management to make assumptions about historical patterns for probability of default, the timing of collection and the amount of incurred credit losses, which are adjusted based on management's judgment about whether economic conditions and credit terms are such that actual losses may be higher or lower than what historical patterns suggest.

Functional currency

Functional currency is the currency of the primary economic environment in which the Company and its subsidiaries operate. If indicators of the primary economic environment are mixed, then management uses its judgement to determine the functional currency that most faithfully represents the economic effect of underlying transactions, events and conditions.

4. Restricted deposits

As at December 31, 2019, restricted deposits consist of $58,684 (US$45,000) on deposit with the bank as security for the Company's corporate credit card (December 31, 2018 - $40,940 (US$30,000)).

5. Accounts and other receivables

	December 31,	December 31,
	2019	2018
Trade receivables	$522,990	$589,154
Allowance for doubtful accounts	-	(102,123)
Other receivables	202,467	162,080
	$725,457	$649,111
Long-term receivables	-	58,814
	$725,457	$707,925

6. Equipment

		Right-of-useasset		Furniture andequipment		Computerhardware	Total
Cost:
Balance, December 31, 2017	$	-	$	114,445	$	16,624	$131,069
Additions		-		4,728		39,521	44,249
Disposals		-		(122,816)		(13,942)	(136,758)
Effect of foreign currency exchange difference		-		3,643		7,366	11,009
Balance, December 31, 2018	$	-	$	-	$	49,569	$49,569
Additions		7,279		-		7,673	14,952
Effect of foreign currency exchange difference		-		-		(2,510)	(2,510)
Balance, December 31, 2019	$	7,279	$	-	$	54,732	$62,011
Depreciation:
Balance, December 31, 2017	$	-	$	14,690	$	4,387	$19,077
Depreciation charge for the year		-		17,490		8,652	26,142
Disposals		-		(30,858)		(5,191)	(36,049)
Effect of foreign currency exchange difference		-		(1,322)		2,770	1,448
Balance, December 31, 2018	$	-	$	-	$	10,618	$10,618
Depreciation charge for the year		-		-		17,932	17,932
Effect of foreign currency exchange difference		-		-		(886)	(886)
Balance, December 31, 2019	$	-	$	-	$	27,664	$27,664

Net book value, December 31, 2018	$	-	$	-	$	38,951	$38,951
Net book value, December 31, 2019	$	7,279	$	-	$	27,068	$34,347

In September 2018, the Company moved one of its office locations and disposed of redundant and unnecessary assets from the office at the time of the move.

7. Intangible assets and goodwill

	Software		Customerrelationships	Total
Cost:
Balance, December 31, 2017	$1,521,353	$	1,022,209	$2,543,562
Effect of foreign currency exchange difference	133,035		89,389	222,424
Balance, December 31, 2018	$1,654,388	$	1,111,598	$2,765,986
Effect of foreign currency exchange difference	(79,311)		(53,290)	(132,601)
Balance, December 31, 2019	$1,575,077	$	1,058,308	$2,633,385
Amortization:
Balance, December 31, 2017	$839,367 $		202,312	$1,041,679
Charge for the year	216,747		263,962	480,709
Effect of foreign currency exchange difference	84,843		31,630	116,473
Balance, December 31, 2018	$1,140,957	$	497,904	$1,638,861
Charge for the year	221,951		270,300	492,251
Effect of foreign currency exchange difference	(59,395)		(29,594)	(88,989)
Balance, December 31, 2019	$1,303,513	$	738,610	$2,042,123
Net book value:
As at December 31, 2018	$513,431	$	613,694	$1,127,125
As at December 31, 2019	$271,564	$	319,698	$591,262
Goodwill
Balance, December 31, 2017				$677,024
Effect of foreign currency exchange difference				59,202
Balance, December 31, 2018				736,226
Effect of foreign currency exchange difference				(35,295)
Balance, December 31, 2019				$700,931

8. Investment in associate

In January 2014, the Company registered a wholly owned subsidiary, Marketwall, which was based in Milan, Italy. Marketwall focused on mobile opportunities especially in the business to business and business to business to consumer spaces. On April 8, 2016, the Company and Grupo Intesa Sanpaolo ("Intesa Sanpaolo") executed a definitive agreement pursuant to which Intesa Sanpaolo agreed to exercise their option to acquire a 33% share in the Company's mobile subsidiary, Marketwall, for EUR 212,691 ($315,230). The Company consolidated Marketwall from the date of incorporation to October 11, 2016, when the Company's ownership was further diluted to 49%. The Company's ownership of Marketwall during the years ended December 31, 2019 and 2018 was 49%.

A continuity of the investment in Marketwall as an associate is as follows:

Balance, December 31, 2017	$968,320
Share of income for the year	197,654
Balance, December 31, 2018	$1,165,974
Share of income for the year	710,537
Balance, December 31, 2019	$1,876,511

Summarized financial information for Marketwall as at and for the years ended December 31, 2019 and 2018, is as follows:

As at	December 31, 2019			December 31, 2018
Current and total assets	$	5,206,824	$	3,919,233
Current and total liabilities		2,139,151		2,250,174
Total shareholders' equity		3,067,673		1,169,059

Year ended	December 31, 2019	December 31, 2018
Revenue	6,219,613	3,759,255
Operating expenses	(4,769,537)	(3,355,880)
Net income and comprehensive income	1,450,076	403,375

9. Share capital

	Number ofshares	Stated value
Balance, December 31, 2017	66,605,662	$16,429,281
Warrant exercise (Note 10)Stock option exercise (Note 10)	3,171,125455,000	1,003,706172,272
Balance, December 31, 2018	70,231,787	$17,605,259
Warrant exercise (Note 10)Stock option exercise (Note 10)Private placementCost of issue	3,000,000520,0004,000,000-	943,361218,3051,342,845(115,950)
Balance, December 31, 2019	77,751,787	$19,993,820

On June 25, 2019, the Company closed a non-brokered private placement financing of 4,000,000 units at a price of CAD$0.40 per unit for gross proceeds of $1,600,000. Each unit is comprised of one common share and one half of one common share purchase warrant. Each whole warrant is exercisable to acquire one common share at a price of $0.65 for a period of three years from the date of issue. The Company paid finder's fees and other expenses of $115,950 in relation to this private placement, including the issuance of 180,000 non-transferrable finder's warrants. Each finder's warrant entitles the holder to acquire one common share at a price of $0.65 for a period of three years from the date of issue.

10. Reserves

	No. ofoptions	Weightedaverageexerciseprice	Value ofoptionsvested	No. ofwarrants	Weightedaverageexerciseprice	Value ofwarrantsvested	Total value
Balance, December 31, 2017	4,620,000	$	0.35 $ 1,211,123	11,058,138	$0.29		$ 512,107 $ 1,723,230
Exercised (Note 9)GrantedForfeitedExpired	(455,000)840,000(390,000)-	0.210.340.24-	(71,548)180,924(60,472)-	(3,171,125)--(4,575,888)	0.29--0.34	(43,174)--(89,961)	(114,722)180,924(60,472)(89,961)
Balance, December 31, 2018	4,615,000	$	0.37 $ 1,260,027	3,311,125	$0.20		$ 378,972 $ 1,638,999
GrantedVestedExpiredForfeitedExercised (Note 9)	695,000290,000(135,000)(280,000)(520,000)	0.36-0.250.370.27	188,05468,608(20,745)(49,788)(77,905)	2,180,000---(3,000,000)	0.65---0.20	283,604---(343,361)	471,65868,608(20,745)(49,788)(421,266)
Balance, December 31, 2019	4,665,000	$	0.38 $ 1,368,251	2,491,125	$0.59		$ 319,215 $ 1,687,466

At December 31, 2018, the Company had committed to grant 430,000 options at a future date. These options had an estimated fair value of $32,487 as of December 31, 2018, which has been recognized as share-based compensation during the year ended December 31, 2018. These options were forfeited during the year ended December 31, 2019.

10. Reserves (continued)

Stock option plan

The Company has an incentive stock option plan (the "Option Plan") which provides that the Board of Directors of the Company may from time to time, at its discretion, and in accordance with TSX.V requirements, grant to directors, officers, employees and consultants of the Company, non-transferable options to purchase common shares. Included in the Option Plan are provisions that provide that the number of common shares reserved for issuance will not exceed 10% of the issued and outstanding common shares of the Company at the grant date. Vesting terms are determined at the time of grant by the Board of Directors.

The following options and warrants were outstanding as at December 31, 2019:

Stock options

					Grant date
Number ofoptionsoutstanding	Number ofoptionsexercisable		Grant date Expirationdate	EstimatedExercisegrant datepricefair valuevested		Expectedvolatility	Expectedlife (years)	Expecteddividendyield	Risk-freeinterestrate		Shareprice
640,000	640,000	20-Dec-13	20-Dec-23	$ 0.75		$ 456,354	121%	10.00	0.00%	2.67%	$	0.85
100,000	100,000	1-Jul-15	1-Jul-20	$ 0.35	$	25,462	142%	5.00	0.00%	0.81%	$	0.29
495,000	495,000	29-Feb-16	1-Mar-21	$ 0.19	$	71,408	108%	5.00	0.00%	0.67%	$	0.17
565,000	565,000	26-Aug-16	26-Aug-21	$ 0.22	$	88,702	98%	5.00	0.00%	0.72%	$	0.22
750,000	690,000	16-Mar-17	16-Mar-22	$ 0.24		$ 117,936	83%	5.00	0.00%	0.81%	$	0.24
630,000	630,000	14-Nov-17	14-Nov-22	$ 0.47		$ 183,121	99%	5.00	0.00%	1.67%	$	0.46
200,000	200,000	11-Dec-17	11-Dec-22	$ 0.53	$	77,498	97%	5.00	0.00%	1.67%	$	0.61
75,000	75,000	6-Feb-18	6-Feb-23	$ 0.49	$	32,622	140%	5.00	0.00%	2.04%	$	0.49
515,000	515,000	10-Oct-18	10-Oct-23	$ 0.31		$ 127,094	114%	5.00	0.00%	2.33%	$	0.31
695,000	695,000	31-Oct-19	31-Oct-24	$ 0.36		$ 188,054	103%	5.00	0.00%	1.56%	$	0.37
4,665,000	4,605,000			$ 0.38		$1,368,251		5.69

Expected volatility is based on the Company's historical volatility.

The weighted average remaining life of the outstanding options at December 31, 2019 is 2.94 years (2018 – 3.4 years).

Warrants

								Grant date
Number ofwarrantsoutstanding	Number ofwarrantsexercisable		Grant date Expirationdate	Estimatedgrant datepricefair valuevested		ExerciseExpectedExpectedvolatilitylife (years)yield				Expecteddividend	Risk-freeinterestrate	Shareprice
311,125	311,125	16-Mar-17	16-Mar-20 $	0.20	$	35,610	63%	3.00	0.00%	0.81% $		0.24
2,000,000	2,000,000	25-Jun-19	25-Jun-22 $	0.65		$ 257,157	83%	3.00	0.00%	1.42% $		0.35
180,000	180,000	25-Jun-19	25-Jun-22 $	0.65	$	26,448	83%	3.00	0.00%	1.42% $		0.35
2,491,125	2,491,125			$ 0.59		$ 319,215		3.00

Expected volatility is based on the Company's historical volatility.

11. Financial instruments

Fair value of financial instruments

The Company's financial assets and financial liabilities as at December 31, 2019 and 2018 were as follows:

	Amortizedcost		FVPL	Total
December 31, 2018
Cash	$ 1,051,618	$	-	$ 1,051,618
Restricted deposits	40,940		-	40,940
Accounts and other receivables	707,925		-	707,925
Other investment	-		60,000	60,000
Accounts payable and accrued liabilities	(506,364)		-	(506,364)
December 31, 2019
Cash	$ 1,354,612	$	-	$ 1,354,612
Restricted deposits	58,684		-	58,684
Accounts and other receivables	725,457		-	725,457
Other investment	-		60,000	60,000
Accounts payable and accrued liabilities	(447,418)		-	(447,418)

The risk associated with any significant concentration of credit risk at December 31, 2019 and 2018 is mitigated by the quality of the receivables and customers. All receivables owing from these customers as at December 31, 2019 were received subsequent to the end of the reporting period. The carrying amount reflected above represents the Company's maximum exposure to credit risk for such receivables.

The fair values of these financial instruments approximate their carrying values because of their short-term nature and/or the existence of market related interest rate on the instruments.

Level 3 hierarchy

Other investment relates to shares received as debt settlement in the amount of $60,000 during the year ended December 31, 2016. The other investment is classified as a Level 3 financial instrument within the hierarchy of the Company's financial instruments, measured at FVPL in the consolidated statements of financial position as at December 31, 2019 and 2018.

Within Level 3, the Company includes private company investments which were not quoted on an exchange. The key assumptions used in the valuation of these instruments included (but were not limited to) the value at which a recent financing was done by the investee, company-specific information, trends in general market conditions and the share performance of comparable publicly traded companies. Information from recent financing was used to determine the value of the assets at $60,000 as at December 31, 2019 (December 31, 2018 - $60,000).

The unrealized gain (loss) recognized for these assets for the year ended December 31, 2019 was $nil (2018 - $nil).

Valuations of investments for which market quotations are not readily available, are inherently uncertain, may fluctuate within short periods of time and are based on estimates, and determination of fair value may differ materially from the values that would have resulted if a ready market existed for the investments. Given the size of the private investment portfolio, such changes may have a significant impact on the Company's financial condition or operating results.

11. Financial instruments (continued)

Level 3 hierarchy (continued)

For those investments valued based on a recent financing or transaction price, management has determined that there are no reasonably possible alternative assumptions that would change the fair value significantly as at December 31, 2019. A +/- 25% change in the fair value of these Level 3 investments as at December 31, 2019 will result in a corresponding +/- $15,000 (2018 - $15,000). The sensitivity analysis is intended to reflect the significant uncertainty inherent in the valuation of private investments under current market conditions, and that results cannot be extrapolated due to non-linear effects that changes in valuation assumptions may have on the estimated fair value of these investments. The analysis does not indicate a probability of changes occurring and it does not necessarily represent the Company's view of expected future changes in the fair value of these investments. Any management actions that may be taken to mitigate inherent risks are not reflected in this analysis.

Financial risk factors

The Company is exposed to a variety of financial instrument related risks:

Credit risk

Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations. At December 31, 2019, 58% (2018 – 68% due from three customers) of the accounts receivable were due from two customers with strong credit ratings. All receivables owing from these customers as at December 31, 2019 and 2018 were received subsequent to period end.

Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulties in meeting its financial liability obligations. The Company manages its liquidity risk through cash and debt management. The Company's objective in managing liquidity risk is to increase revenue, minimize operational costs and to maintain sufficient liquidity in order to meet these operational requirements at any point in time. As at December 31, 2019, the Company has a cash balance of $1,354,612 (December 31, 2018 – $1,051,618) current liabilities of $518,101 (December 31, 2018 - $663,754) and a working capital of $1,765,115 (December 31, 2018 - $1,245,723). The Company's ability to meet its financial liability obligations and continue to operate as a going concern may include raising capital through a share issuance to obtain sufficient funding. There is no certainty of the Company's ability to raise additional financing through this method.

Interest rate risk

The Company has cash balances and all amounts are held with accredited banks. As of December 31, 2019, and December 31, 2018, the Company did not have any investment in investment grade short term deposit certificates. Interest exposure with respect to its cash balances is minimal.

Currency risk

The Company generates revenue and incurs expenses and expenditures in Canada, the United States, and in the European Union. As a result, fluctuations in the rate of exchange between U.S. dollars, Euros, Canadian dollars and other currencies can have an effect on the Company's reported results. The Company has not utilized any financial instruments or cash management policies to mitigate the risks arising from changes in foreign currency rates. The net Canadian dollar equivalent of the total of its cost of sales, selling and administrative, and sales denominated in US dollars was approximately $702,126 for the year ended December 31, 2019. Accordingly, a 10% increase or decrease in the exchange rate between U.S. and Canadian dollars would result in an increase or decrease of approximately $70,213 in net loss for the period.

The net Canadian dollar equivalent of the total of its cost of sales, selling and administrative and sales denominated in Euros was approximately $27,565 for the year ended December 31, 2019. Accordingly, a 10% increase or decrease in the exchange rate between Euros and Canadian dollars would result in an increase or decrease of approximately $2,757 in net loss for the period.

The Canadian dollar equivalent of net assets denominated in US dollars as at December 31, 2019 was approximately $2,240,049. Accordingly, a 10% increase or decrease in the exchange rate between U.S. and Canadian dollars would impact net loss by approximately $224,005.

11. Financial instruments (continued)

Capital management

The Company defines capital that it manages as being composed of share capital, reserves, deficit and cash. Its objective when managing capital is to ensure that the Company will continue as a going concern, so that it can provide products and services to its customers and returns to its shareholders.

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. To maintain or adjust the capital structure, the Company may attempt to issue new shares, issue debt, acquire or dispose of assets or adjust the amount of cash and cash equivalents and investments. The Company requires capital to maintain its operating businesses, sustain corporate operations and repay existing obligations. The Company may seek additional financing by means of issuing share capital, the sale of assets or debt financing. There can be no certainty of the Company's ability to raise any additional financing from any of these sources.

In order to facilitate the management of its capital requirements, the Company prepares annual expenditure budgets that are updated as necessary depending on various factors, including successful capital deployment and general industry conditions. The annual and updated budgets are approved by the Board of Directors. The Company is currently not subject to externally imposed capital requirements.

The Company's capital management objectives, policies and processes have not changed during the year ended December 31, 2019.

The Company is not subject to any capital requirements imposed by a lending institution or regulatory body, other than of the TSX.V which requires adequate working capital or financial resources of the greater of (i) $50,000 and (ii) an amount required in order to maintain operations and cover general and administrative expenses for a period of 6 months. As of December 31, 2019, the Company believes it is compliant with the policies of the TSX.V.

12. Related party transactions

Unless otherwise specified, the period end balances of receivables/payables referred to are non-interest bearing, unsecured, receivable or payable on demand, and have arisen from the provision of services and expense reimbursements. There were no amounts owed to key management personnel not disclosed elsewhere in these consolidated financial statements.

Compensation of key management personnel

In accordance with IAS 24, key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company directly or indirectly, including any directors (executive and nonexecutive) of the Company.

The remuneration of directors and other members of key management personnel (officers) during the periods presented were as follows:

	December 31,	Year ended
	2019	2018
Short-term benefits	$ 464,200	$ 354,000
Share-based payments	146,114	111,052
	$ 610,314	$ 465,052

At December 31, 2019, the Company had $nil (December 31, 2018 – $3,454) in accounts payables owing to related parties. These amounts are unsecured, non-interest bearing and due on demand.

Directors and officers of the Company exercised 340,000 stock options during the year ended December 31, 2019 for proceeds to the Company of $91,800.

13. Commitments and contingencies

The Company is party to certain management contracts. These contracts require payments of $845,200 upon the occurrence of a change in control of the Company, as defined by each officer's respective consulting agreement. The Company is also committed to payments upon termination of $43,750 pursuant to the terms of these contracts.

The Company is subject to various claims, lawsuits and other complaints arising in the ordinary course of business. The Company records provisions for losses when claims become probable and the amounts are estimable. Although the outcome of such matters cannot be determined, it is the opinion of management that the final resolution of these matters will not have a material adverse effect on the Company's financial condition, operations or liquidity.

Novel Coronavirus

The Company's operations could be significantly adversely affected by the effects of a widespread global outbreak of a contagious disease, including the recent outbreak of respiratory illness caused by COVID-19. The Company cannot accurately predict the impact COVID-19 will have on its operations and the ability of others to meet their obligations with the Company, including uncertainties relating to the ultimate geographic spread of the virus, the severity of the disease, the duration of the outbreak, and the length of travel and quarantine restrictions imposed by governments of affected countries. In addition, a significant outbreak of contagious diseases in the human population could result in a widespread health crisis that could adversely affect the economies and financial markets of many countries, resulting in an economic downturn that could further affect the Company's operations and ability to finance its operations.

14. Segmented information

IFRS 8 requires operating segments to be determined based on the Company's internal reporting to the Chief Operating Decision Maker ("CODM"). The CODM has been determined to be the Company's Chief Executive Officer as he is primarily responsible for the allocation of resources and the assessment of performance. The CODM uses net income, as reviewed at periodic business review meetings, as the key measure of the Company's results as it reflects the Company's underlying performance for the period under evaluation.

The CODM's primary focus for review and resource allocation is the Company as a whole and not any component part of the business. Having considered these factors, management has judged that the Company's operations comprise two operating segments under IFRS 8 – Big Data and WorkForce Management.

Information about the Company's revenues based on the type of services provided is as follows:

		Year endedDecember 31,
	2019		2018
Big data	$	165,504	$366,562
WorkForce Management		3,507,211	4,471,247
	$	3,672,715	$ 4,837,809

Information about the Company's expenses based on the type of services provided is as follows:

	Year endedDecember 31,
	2019	2018
Big data	$1,451,650	$ 1,644,327
WorkForce Management	1,718,626	1,680,229
	$3,170,276	$ 3,324,556

The Company's revenues are substantially derived from customers in the United States during the years ended December 31, 2019 and 2018. There were nominal revenues derived from other geographical locations during 2019 and 2018. Substantially all of the Company's revenues recognized as services are rendered throughout the term of the contract for the years ended December 31, 2019 and 2018.

14. Segmented information (continued)

Assets of the Company are segmented based on the type of services provided and were as follows:

	Currentassets	Equipment	Intangibleassets andgoodwill	Other noncurrent assets	Totalassets
Balance, December 31, 2018
Big data	$1,056,888	$-	$513,431	$1,225,974	$2,796,293
WorkForce Management	852,589	38,951	1,349,920	58,814	2,300,274
	$1,909,477	$38,951	$1,863,351	$1,284,788	$5,096,567
Balance, December 31, 2019
Big data	$1,100,469	$-	$271,564	$1,936,511	$3,308,544
WorkForce Management	1,182,747	34,347	1,020,629	-	2,237,723
	$2,283,216	$34,347	$1,292,193	$1,936,511	$5,546,267

Significant customers

In each respective year, revenues from customers that amounted to more than 10% of the Company's revenues accounted for the following percentage of the Company's total revenues and accounts receivable, as follows:

	% of revenuesfor the year endedDecember 31, 2019	% of accounts receivableat December 31, 2019	% of revenuesfor the year endedDecember 31, 2018	% of accounts receivableat December 31, 2018
Customer 1	43%	40%	36%	33%
Customer 2	46%	18%	34%	24%

15. Income taxes

Provision for income taxes

Major items causing the Company's effective income tax rate to differ from the combined Canadian federal and provincial statutory rate of 26.5% (2018 – 26.5%) were as follows:

	2019	2018

Loss before income taxes	$(1,669,958) $	(2,301,538)
Expected income tax recovery based on statutory rate	443,000	610,000
Adjustment to expected income tax benefit:
Stock-based compensation	(34,000)	(57,000)
Other permanent differences and change in tax rates	(651,000)	221,000
Foreign tax differences	(1,000)	117,000
Change in benefit of tax assets not recognized	243,000	(891,000)
Income tax provision (recovery)	$-	$-

15. Income taxes (continued)

Deferred income taxes

Deferred income tax assets (liabilities) recorded are as follows:

	2019	2018
Investment in associateNon-capital loss carry-forwards	$(185,000)185,000	$(52,000)52,000
Net tax assets (liabilities)	$-	$-

Deferred income tax assets have not been recognized in respect of the following deductible temporary differences:

	2019	2018
Non-capital loss carry-forwards	$12,522,000	$11,577,000
Share issue costs	136,000	83,000
Investment in subsidiaries	1,240,000	1,978,000
Capital loss carry-forwards	8,000	8,000
Intangible assets	1,831,000	1,831,000
Total	$15,737,000	$15,477,000

As at December 31, 2019, the Company had estimated non-capital losses for Canadian income tax purposes of approximately $9,165,000 (2018 - $7,424,000) available to use against future taxable income.

The Company's US subsidiary has non-capital losses of approximately $4,056,000 (2018 - $4,153,000) available to use against future taxable income.

No deferred taxes are recognized in the temporary differences related to the investment in associate.

As at December 31, 2019, the Company's non-capital losses, stated in Canadian dollars, expire as follows:

Year of Expiry	Canada		US
2029	$184,000	$	-
2030	356,000		-
2031	303,000		-
2032	490,000		-
2033	701,000		695,000
2034		-	1,171,000
2035	1,391,000		1,151,000
2036	1,323,000		-
2037	1,525,000		-
2038	1,348,000		-
2039	1,544,000		-
Indefinitely		-	1,039,000
	$9,165,000	$	4,056,000

Deferred tax assets have not been recognized in respect of these items because it is not probable that future taxable profit will be available against which the Company can use the benefits.

16. Lease liability

In December 2019, the Company entered into a lease for office equipment. The monthly lease payment is $388 a quarter for a fixed term of five years, commencing on December 20, 2019. The Company used a discount rate of 7.5% in determining the present value of the lease payments. No payments have been made on the lease as at and for the year ending December 31, 2019.

	December 31, 2019
Current lease liability	$	1,527
Non-current lease liability		5,752
	$	7,279

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AnalytixInsight Inc. — Audit Report / Information 2019

44938_rns_2020-04-23_f5303f9d-7845-499f-86eb-f739117828dd.pdf

Independent Auditor's Report

Opinion

Basis for opinion

Other information

Responsibilities of management and those charged with governance for the consolidated financial statements

Auditor's responsibilities for the audit of the consolidated financial statements

1. Nature of operations and going concern

2. Significant accounting policies

a) Basis of preparation

b) Basis of presentation

c) Foreign currency translation

d) Income tax

e) Cash

f) Share capital

g) Loss per share

h) Research and development

i) Financial instruments

Financial assets

Initial recognition and measurement

Subsequent measurement – financial assets at FVPL

Subsequent measurement – financial assets at amortized cost

Financial assets (continued**)**

Subsequent measurement – financial assets at FVOCI

Derecognition

Impairment of financial assets

Financial liabilities

Initial recognition and measurement

Subsequent measurement – financial liabilities at amortized cost

Subsequent measurement – financial liabilities at FVPL

Derecognition

j) Equipment

k) Revenue recognition

l) Lease liabilities and right-of-use assets

m) Intangible assets

n) Business combinations and goodwill

o) Impairment of non-financial assets

p) Share-based compensation

q) Investment in associates

r) Accounting changes

s) Future accounting standards issued but not yet effective

3. Critical accounting estimates and judgments

Intangible assets and goodwill

Income, value added, withholding and other taxes

3. Critical accounting estimates and judgments (continued)

Income taxes and recoverability of potential deferred tax assets

Asset carrying values and impairment charges

Share-based payments

Revenue recognition

Contingencies

Discount rate used for IFRS 16

3. Critical accounting estimates and judgments (continued)

Determination of significant influence and impairment of investment in associate

Fair value of investment in securities not quoted in an active market or private company investments

Expected credit losses

Functional currency

4. Restricted deposits

5. Accounts and other receivables

6. Equipment

7. Intangible assets and goodwill

8. Investment in associate

9. Share capital

10. Reserves

10. Reserves (continued)

Stock option plan

Stock options

Warrants

11. Financial instruments

Fair value of financial instruments

Level 3 hierarchy

11. Financial instruments (continued)

Level 3 hierarchy (continued)

Financial risk factors

Credit risk

Liquidity risk

Interest rate risk

Currency risk

11. Financial instruments (continued)

AnalytixInsight Inc. Audit Report / Information 2019

Financial assets (continued)