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Artificial Intelligence Ventures Incorporated — Interim / Quarterly Report 2025
Jul 31, 2025
46604_rns_2025-07-30_c5cc8415-987b-4d62-8c90-c0d7bf768fc5.pdf
Interim / Quarterly Report
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AI ARTIFICIAL INTELLIGENCE VENTURES INC.
Condensed Interim Consolidated Financial Statements
Nine Months Ended May 31, 2025
(Unaudited - Expressed in Canadian dollars)
NOTICE OF NO AUDITOR REVIEW OF CONDENSED INTERIM FINANCIAL STATEMENTS
Under National Instrument 51-102, Part 4, subsection 4.3(3) (a), if an auditor has not performed a review of the condensed interim financial statements they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor. The accompanying condensed interim financial statements of the Company have been prepared by and are the responsibility of the Company's management. The Company's independent auditor has not performed a review of these financial statements in accordance with standards established by the Canadian Institute of Chartered Accountants for a review of condensed interim financial statements by an entity's auditor.
(The accompanying notes are an integral part of these consolidated financial statements)
AI ARTIFICIAL INTELLIGENCE VENTURES INC.
Condensed Interim Consolidated Statements of Financial Position
(Unaudited - Expressed in Canadian dollars)
| May 31, 2025 $ | August 31, 2024 $ | |
|---|---|---|
| Assets | ||
| Current assets | ||
| Cash | 80,788 | 114,022 |
| Investments (Note 3) | 1,957,113 | 1,950,408 |
| Advances for investment | – | 363,447 |
| Loans and other receivable (Note 6) | 371,891 | – |
| 2,409,792 | 2,427,877 | |
| Investment in mineral properties (Note 5) | 1 | 1 |
| Total assets | 2,409,793 | 2,427,878 |
| Liabilities | ||
| Current liabilities | ||
| Accounts payable and accrued liabilities | 739,701 | 785,419 |
| Notes payable (Note 7) | 360,500 | 350,713 |
| Due to related parties (Note 8) | 264,905 | 259,405 |
| Total liabilities | 1,365,106 | 1,395,405 |
| Shareholders’ equity | ||
| Share capital (Note 9) | 18,585,823 | 18,585,823 |
| Share-based payment reserve | 1,729,772 | 1,729,772 |
| Preferred shares (Note 9) | 6,388,000 | 6,388,000 |
| Deficit | (25,658,908) | (25,671,254) |
| Shareholders’ equity | 1,044,687 | 1,032,341 |
| Total liabilities and shareholders’ equity | 2,409,793 | 2,427,878 |
Nature of operations and continuance of business (Note 1)
Approved for issuance on behalf of the Board of Directors on July 30, 2025:
/s/ 'David Berg'
/s/ 'Christopher Cherry'
David Berg, Director
Christopher Cherry, Director
(The accompanying notes are an integral part of these consolidated financial statements)
AI ARTIFICIAL INTELLIGENCE VENTURES INC.
Condensed Interim Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)
(Unaudited - Expressed in Canadian dollars)
| Three months ended | Nine months ended | |||
|---|---|---|---|---|
| May 31, 2025 $ | May 31, 2024 $ | May 31, 2025 $ | May 31, 2024 $ | |
| Gain (Loss) on sale of investments | 104,005 | (46,825) | 115,159 | 32,241 |
| Gain on debt settlement (Note 7) | – | – | – | 185,000 |
| Interest revenue | 7,547 | 3,700 | 22,641 | 13,325 |
| Unrealized gain (loss) on investments | (163,815) | 158,461 | (36,323) | (1,160,546) |
| Total Gain (loss) * | (52,263) | 115,336 | 101,477 | (929,980) |
| Expenses | ||||
| Consulting fees (Note 8) | 12,000 | 27,500 | 36,000 | 87,500 |
| Filing fees | 1,000 | 1,000 | 26,341 | 25,020 |
| General and administrative | 404 | 255 | 778 | 868 |
| Professional fees (Note 8) | 5,000 | 8,311 | 15,000 | 32,007 |
| Total expenses | 18,404 | 37,066 | 78,119 | 145,395 |
| Gain before other income (expense) | (70,667) | 78,270 | 23,358 | (1,075,375) |
| Other income (expense) | ||||
| Impairment of investments (Note 4) | – | – | – | – |
| Interest expense | (3,262) | 186 | (11,012) | (225) |
| Foreign exchange | – | – | – | – |
| Recapture (write-down) of loans (Note 5c,d) | – | – | – | – |
| Total other income (expense) | (3,262) | 186 | (11,012) | (225) |
| Net income (loss) and comprehensive income (loss) for the period | (73,929) | 78,456 | 12,346 | (1,075,600) |
| Earnings (loss) per share | (0.00) | 0.00 | 0.00 | (0.03) |
| Basic (Note 9e) | ||||
| Weighted average number of shares outstanding (Note 9e) | 32,025,453 | 32,025,453 | 32,025,453 | 32,025,453 |
(The accompanying notes are an integral part of these consolidated financial statements)
AI ARTIFICIAL INTELLIGENCE VENTURES INC.
Condensed Interim Consolidated Statements of Changes in Equity
(Unaudited - Expressed in Canadian dollars)
| Share capital | Share-based payment reserve $ | Preferred shares $ | Deficit $ | Non-Controlling Interest $ | Total shareholders' equity $ | ||
|---|---|---|---|---|---|---|---|
| Number of shares | Amount $ | ||||||
| Balance, August 31, 2023 | 32,025,453 | 18,585,823 | 1,729,772 | 6,388,000 | (24,465,516) | – | 2,238,079 |
| Net loss for the period | – | – | – | – | (1,075,600) | – | (1,075,600) |
| Balance, May 31, 2024 | 32,025,453 | 18,585,823 | 1,729,772 | 6,388,000 | (25,541,116) | – | 1,162,479 |
| Balance, August 31, 2024 | 32,025,453 | 18,585,823 | 1,729,772 | 6,388,000 | (25,671,254) | – | 1,032,341 |
| Net gain (loss) for the period | – | – | – | – | 12,346 | – | 12,346 |
| Balance, May 31, 2025 | 32,025,453 | 18,585,823 | 1,729,772 | 6,388,000 | (25,658,908) | – | 1,044,687 |
(The accompanying notes are an integral part of these consolidated financial statements)
AI ARTIFICIAL INTELLIGENCE VENTURES INC.
Condensed Interim Consolidated Statements of Cash Flows
(Unaudited - Expressed in Canadian dollars)
| For the nine-month period ended May 31, | 2025
$ | 2024
$ |
| --- | --- | --- |
| Operating activities | | |
| Net income (loss) for the period | 12,346 | (1,075,600) |
| Items not involving cash: | | |
| Adjustments to fair value of investments | 36,323 | 1,160,546 |
| Finance cost | 11,012 | 225 |
| Finance income | (22,641) | (13,325) |
| Gain (Loss) on sale of investments | (115,159) | (23,686) |
| Gain on debt settlement | | (185,000) |
| Changes in non-cash operating working capital: | | |
| Accounts payable and accrued liabilities | (45,718) | 197,483 |
| Due to related parties | 5,500 | 72,500 |
| Net cash used in operating activities | (118,337) | 133,143 |
| Investing activities | | |
| Acquisition of investments | (453,998) | (870,915) |
| Cash advanced to loans and other receivable | – | 180,351 |
| Proceeds from sale of investments | 539,101 | 402,883 |
| Proceeds from debt settlement | – | 185,000 |
| Repayment of notes payable | – | (13,167) |
| Net cash used by investing activities | 85,103 | (115,848) |
| Financing activities | | |
| Bank indebtedness | – | – |
| Proceeds from warrant exercise | – | – |
| Net cash provided by (used in) financing activities | – | – |
| Change in cash | (33,234) | 17,295 |
| Cash, beginning of period | 114,022 | 84,003 |
| Cash, end of period | 80,788 | 101,298 |
(The accompanying notes are an integral part of these consolidated financial statements)
AI ARTIFICIAL INTELLIGENCE VENTURES INC.
Notes to the Condensed Interim Consolidated Financial Statements
For the nine-month period ended May 31, 2025
(Unaudited - Expressed in Canadian dollars)
- Nature of Operations and Going Concern
AI Artificial Intelligence Ventures Inc. (formerly, ESG Global Impact Capital Inc.) (the "Company") was incorporated on February 10, 2010 pursuant to the Canada Business Corporations Act and was continued under the Business Corporations Act (British Columbia) on February 14, 2017. The Company completed its initial public offering ("IPO") on December 7, 2010, and is listed on the TSX-V under the symbol "AIVC". The registered office of the Company is Suite 1000, 925 West Georgia Street, Vancouver, BC V6C 3L2.
The Company's stated business goal is to build a portfolio of investments, with a view to participating in income and capital growth from the ultimate sale or other disposal of those investments.
These consolidated financial statements have been prepared on the going concern basis, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. As at May 31, 2025, the Company has an accumulated deficit of $25,658,908 (August 31, 2024 - $25,671,254). The continued operations of the Company are dependent on its ability to generate future cash flows or obtain additional financing. Although management is of the opinion that its current working capital is sufficient to meet the Company's liabilities and commitments as they become due, the company recognizes that liquidity of investments may change with ongoing results and, as a result, it may be required to obtain additional financing. While the Company has been successful in securing financings in the past there can be no assurance that it will be able to do so in the future. These consolidated financial statements do not give effect to any adjustments which would be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts different from those reflected in the accompanying financial statements.
These interim consolidated financial statements were authorized for issue by the Board of Directors on July 30, 2025.
- Significant Accounting Policies
(a) Statement of Compliance, Basis of Presentation and Principles of Consolidation
The accompanying financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS"), as issued by the International Accounting Standards Board ("IASB").
These consolidated financial statements have been prepared on a historical cost basis, except for certain investments in equity securities and certain assets, each of which are measured at fair value as determined at each reporting date. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting, except for cash flow information. These consolidated financial statements are presented in Canadian dollars, which is the Company's functional currency.
These consolidated financial statements include the financial statements of the Company, Soilgenic Nutrients Inc. and EMC Energy Metals Corp. Soilgenic Nutrients Inc. is a wholly owned of the Company, whereas, the Company acquired a 94.1% controlling interest of EMC Energy Metals Corp. (as of year-end the controlling interest was 83%). All intercompany transactions have been eliminated in these consolidated financial statements. Subsidiary is fully consolidated from the date on which control is obtained by the Company and is subsequently deconsolidated from the consolidated financial statements on the date that control ceases.
(b) Use of Estimates and Judgments
The preparation of these consolidated financial statements in conformity with IFRS requires the Company's management to make judgments, estimates, and assumptions that affect the application of accounting policies and reported amounts of assets, liabilities, revenues, and expenses. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised and in any future periods affected.
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AI ARTIFICIAL INTELLIGENCE VENTURES INC.
Notes to the Condensed Interim Consolidated Financial Statements
For the nine-month period ended May 31, 2025
(Unaudited - Expressed in Canadian dollars)
- Significant Accounting Policies (continued)
(b) Use of Estimates and Judgments (continued)
The preparation of these consolidated financial statements in conformity with IFRS requires the Company's management to make judgments, estimates, and assumptions that affect the application of accounting policies and reported amounts of assets, liabilities, revenues, and expenses. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised and in any future periods affected.
Estimates
Collectability of loans and other receivable
The Company reviews the loans and other receivable balances on a regular basis and estimates the likelihood of collection and records allowance for estimated losses. Management bases its estimates on historical experience and other relevant factors.
Fair value of investment in private companies
The fair value of investments in private companies are not quoted in an active market may be determined by using third-party pricing information and are usually based on valuation methods and techniques generally recognized as standard within the industry. Models use observable data to the extent practicable. Changes in assumptions about these factors could affect the reported fair value of the investments in private companies. When the fair value cannot be determined, the Company uses the carrying value of the investments.
Fair value of investment in warrants
Management uses Black-Scholes option pricing model in measuring the fair value of investment in warrants, where active market quotes are not available. In applying the valuation technique, management is required to determine and make assumptions about the most appropriate inputs to the valuation model including the expected life, volatility, dividend yield and forfeiture rate. Such assumptions are inherently uncertain and changes in these assumptions affect the fair value estimates.
Fair value of share-based payments
The Company uses the Black-Scholes option pricing model to calculate the fair value of stock options and warrants at the date of grant. Measurement inputs include share price on measurement date, exercise price of the instrument, expected volatility, weighted average expected life of the instruments, expected dividends, and the risk-free interest rate. Changes in these assumptions can materially affect the fair value estimate.
Fair value measurement
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. Changes in estimates and assumptions about these inputs could affect the reported fair value.
Unrecognized deferred income tax assets
Deferred tax assets and liabilities are determined based on differences between the financial statement carrying values of assets and liabilities and their respective income tax bases ("temporary differences") and losses carried forward. The determination of the ability of the Company to utilize tax loss carryforwards to offset deferred tax liabilities requires management to exercise judgement and make certain assumptions about the future performance of the Company. Management is required to assess whether it is "probable" that the Company will benefit from these prior losses and other deferred tax assets. Changes in economic conditions and other factors could result in revisions to the estimates of the benefits to be realized or the timing of utilization of the losses.
9
AI ARTIFICIAL INTELLIGENCE VENTURES INC.
Notes to the Condensed Interim Consolidated Financial Statements
For the nine-month period ended May 31, 2025
(Unaudited - Expressed in Canadian dollars)
- Significant Accounting Policies (continued)
(b) Use of Estimates and Judgments (continued)
Judgements
Judgments made by management include the factors used to assess whether the going concern assumption is appropriate. The assessment of the going concern assumption requires management to take into account all available information about the future, which is at least, but is not limited to, 12 months from the end of the reporting period. Management has concluded that the cash position of the Company is sufficient to finance continued operations for the twelve-month period subsequent to May 31, 2024.
The continuity of the Company's operations is dependent on the continued growth and building of its portfolio of investments. Should it be determined that the Company is no longer a going concern, adjustments which may be significant could be required to the carrying value of the assets and liabilities. These consolidated financial statements do not reflect any adjustments to the carrying value of the assets or liabilities or any impact on the consolidated statements of income (loss) and comprehensive income (loss), and consolidated statements of financial position classifications that would be necessary should the going concern assumption not be appropriate.
(c) Cash and Cash Equivalents
The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance, are readily convertible to known amounts of cash, and which are subject to insignificant risk of changes in value to be cash equivalents.
(d) Financial Instruments
(i) Recognition and initial measurement
The Company's financial instruments consist of cash, loans and other receivable, investments, bank indebtedness, amounts due to related parties, accounts payable and accrued liabilities, and notes payable.
All other financial assets and liabilities are initially recognized when the Company becomes a party to the contractual provisions of the instrument.
A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at fair value through profit or loss ("FVTPL"), transaction costs that are directly attributable to its acquisition or issue.
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AI ARTIFICIAL INTELLIGENCE VENTURES INC.
Notes to the Condensed Interim Consolidated Financial Statements
For the nine-month period ended May 31, 2025
(Unaudited - Expressed in Canadian dollars)
- Significant Accounting Policies (continued)
(d) Financial Instruments (continued)
(ii) Classification and subsequent measurement
Financial assets
On initial recognition, a financial asset is classified as measured at: amortized cost; fair value through other comprehensive income ("FVOCI") – debt investment; FVOCI - equity investment; or FVTPL. Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business model for managing financial assets in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.
A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:
- it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
- its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:
- it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and
- its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment's fair value in OCI. This election is made on an investment-by-investment basis. All financial assets not classified as measured at amortized cost or FVOCI as described above are measured at FVTPL. This includes all derivative financial assets. On initial recognition, the Company may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortized cost or at FVOCI as FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.
Financial assets: Subsequent measurement and gains and losses
- Financial assets at FVTPL: These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in the statements of income (loss) and comprehensive income (loss).
- Financial assets at amortized cost: These assets are subsequently measured at amortized cost using the effective interest method. The amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognized in the statements of income (loss) and comprehensive income (loss). Any gain or loss on derecognition is recognized in the statements of income (loss) and comprehensive income (loss).
- Debt investments at FVOCI: These assets are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognized in the statements of income (loss) and comprehensive income (loss). Other net gains and losses are recognized in OCI. On derecognition, gains and losses accumulated in OCI are reclassified to the statements of income (loss) and comprehensive income (loss).
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AI ARTIFICIAL INTELLIGENCE VENTURES INC.
Notes to the Condensed Interim Consolidated Financial Statements
For the nine-month period ended May 31, 2025
(Unaudited - Expressed in Canadian dollars)
- Significant Accounting Policies (continued)
(d) Financial Instruments (continued)
(ii) Classification and subsequent measurement (continued)
- Equity investments at FVOCI: These assets are subsequently measured at fair value. Dividends are recognized as income in the statements of income (loss) and comprehensive income (loss) unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in OCI and are never reclassified to the statements of income (loss) and comprehensive income (loss).
The Company's cash and loans and other receivable are classified as amortized cost. Investments are classified as fair value through profit or loss.
Financial liabilities
Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in the statements of income (loss) and comprehensive income (loss). Other financial liabilities are subsequently measured at amortized cost using the effective interest method.
Interest expense and foreign exchange gains and losses are recognized in the statements of income (loss) and comprehensive income (loss). Any gain or loss on derecognition is also recognized in the statements of income (loss) and comprehensive income (loss).
The Company's bank indebtedness, accounts payable and accrued liabilities, notes payable, and amounts due to related parties are classified as amortized cost.
(iii) Derecognition
Financial assets
The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset. The Company enters into transactions whereby it transfers assets recognized in its statement of financial position but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognized.
Financial liabilities
The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled or expire. The Company also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.
On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in the statements of income (loss) and comprehensive income (loss).
(iv) Offsetting
Financial assets and financial liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.
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AI ARTIFICIAL INTELLIGENCE VENTURES INC.
Notes to the Condensed Interim Consolidated Financial Statements
For the nine-month period ended May 31, 2025
(Unaudited - Expressed in Canadian dollars)
- Significant Accounting Policies (continued)
(d) Financial Instruments (continued)
(v) Impairment (continued)
Financial assets and contract assets
The Company recognizes loss allowances for expected credit losses ("ECLs") on:
- financial assets measured at amortized cost;
- debt investments measured at FVOCI; and
- contract assets (as defined in IFRS 15).
The Company measures loss allowances at an amount equal to lifetime ECL, except for the following, which are measured as 12-month ECL:
- debt securities that are determined to have low credit risk at the reporting date; and
- other debt securities and bank balances for which credit risk (i.e., the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.
Loss allowances for trade receivables and contract assets are always measured at an amount equal to lifetime ECL. When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Company's historical experience and informed credit assessment and including forward-looking information.
The Company assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due.
The Company considers a financial asset to be in default when:
- the borrower is unlikely to pay its credit obligations to the Company in full, without recourse by the Company to actions such as realizing security (if any is held); or
- the financial asset is more than 90 days past due.
The Company considers a debt security to have low credit risk when its credit risk rating is equivalent to the globally understood definition of 'investment grade'.
Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.
12-month ECLs are the portion of ECL's that result from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).
The maximum period considered when estimating ECLs is the maximum contractual period over which the Company is exposed to credit risk.
Measurement of ECLs
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e., the difference between the cash flows due to the entity in accordance with the contract and the cash flows that the Company expects to receive).
ECLs are discounted at the effective interest rate of the financial asset.
Credit-impaired financial assets
At each reporting date, the Company assesses whether financial assets carried at amortized cost and debt securities at FVOCI are credit-impaired. A financial asset is 'credit-impaired' when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.
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AI ARTIFICIAL INTELLIGENCE VENTURES INC.
Notes to the Condensed Interim Consolidated Financial Statements
For the nine-month period ended May 31, 2025
(Unaudited - Expressed in Canadian dollars)
- Significant Accounting Policies (continued)
(d) Financial Instruments (continued)
(v) Impairment (continued)
Evidence that a financial asset is credit-impaired includes the following observable data:
- significant financial difficulty of the borrower or issuer;
- a breach of contract such as a default or being more than 90 days past due;
- the restructuring of a loan or advance by the Company on terms that the Company would not consider otherwise;
- it is probable that the borrower will enter bankruptcy or other financial reorganization; or
- the disappearance of an active market for a security because of financial difficulties.
Presentation of allowance for ECL in the statement of financial position
Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets.
For debt securities at FVOCI, the loss allowance is charged to the statements of income (loss) and comprehensive income (loss) and is recognized in OCI.
Write-off
The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery. This is generally the case when the Company determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Company's procedures for recovery of amounts due.
(e) Investment in Mineral Properties
The Company's investment in mineral properties are currently in exploration and evaluation phase or in preparation for their development. The Company defers all expenditures related to its mineral properties once the legal rights to a property have been acquired. Exploration costs incurred prior to acquiring the legal rights to a property are charged to operations as general exploration expense.
Exploration costs that are not attributable to a specific property are charged to operations as general exploration expense. Mineral property option proceeds, if received, are credited against the deferred costs incurred by the Company on the property or properties being optioned. Under this method, the amounts shown as mineral property represent net costs incurred to date less amounts amortized and/or written off, and do not necessarily represent present or future values.
Although the Company has taken steps to verify title to the mining properties in which it holds an interest, in accordance with industry practices for the current stage of exploration and development of such properties, these procedures do not guarantee the validity of the Company's titles. Property titles may be subject to unregistered prior agreements and non-compliance with regulatory requirements.
Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying amount of any such assets may exceed their recoverable amount. When facts and circumstances suggest that the carrying amount exceeds the recoverable amount, the Company shall measure, present and disclose any resulting impairment loss.
The recovery of costs of mining claims and deferred exploration is dependent upon the existence of economically recoverable reserves, the ability of the Company to obtain the necessary financing to complete exploration and development and future profitable production or proceeds from disposition of such properties.
Management performs impairment tests on exploration and evaluation assets before the assets are transferred to development properties. If the properties are put into commercial production, the expenditures will be depleted using the unit of production basis. If the properties are impaired, sold or abandoned, the expenditures will be charged to operations in the related period.
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AI ARTIFICIAL INTELLIGENCE VENTURES INC.
Notes to the Condensed Interim Consolidated Financial Statements
For the nine-month period ended May 31, 2025
(Unaudited - Expressed in Canadian dollars)
- Significant Accounting Policies (continued)
(f) Impairment of Non-financial Assets
At the end of each reporting period the carrying amounts of the Company's assets are reviewed to determine whether there is any indication that those assets are impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment, if any. The recoverable amount is the higher of an asset's fair value less costs to sell and its value-in-use. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount and the impairment loss is recognized in the income or loss for the period.
Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but only to an amount that does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset in prior years. A reversal of an impairment loss is recognized immediately in profit or loss.
(g) Share Capital
Common shares are classified as equity. Transaction costs directly attributable to the issue of common shares, warrants and stock options are recognized as a deduction from equity, net of any tax effects.
The Company has adopted a residual value method with respect to the measurement of shares and warrants issued as private placement units. The residual value method first allocates value to the more easily measurable component based on fair value and then the residual value, if any, to the less easily measurable component. The Company considers the fair value of common shares issued in the private placements to be the more easily measurable component and the common shares are valued at their estimated fair value. The balance, if any, is allocated to the attached warrants. Any fair value attributed to the warrants is recorded as reserves.
(h) Revenue Recognition
As an investment company, the Company may earn revenue in the form of interest or dividends which derive from its investments or from cash on hand. Investment income includes interest, dividends, and realized gains on the sale of investments. Revenue is recognized in accordance with IFRS 15, Revenues, only when: (i) the borrower can be identified; (ii) the performance obligations in the contract can be identified; (iii) the transaction price has been determined; (iv) the transaction price can be allocated to the performance obligations in the contract; and (v) when the entity satisfied a performance obligation.
(i) Foreign Currency Translation
The functional and reporting currency is the Canadian dollar. Transactions denominated in foreign currencies are translated using the exchange rate in effect on the transaction date or at an average rate. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange in effect at the statement of financial position date. Non-monetary items are translated using the historical rate on the date of the transaction. Revenue and expenses are translated at average rates for the period. Foreign exchange gains and losses are included in the statements of income (loss) and comprehensive income (loss).
(j) Income Taxes
Current income tax
Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Current income tax relating to items recognized directly in other comprehensive income or equity is recognized in other comprehensive income or equity and not in the statements of income (loss) and comprehensive income (loss). Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
15
AI ARTIFICIAL INTELLIGENCE VENTURES INC.
Notes to the Condensed Interim Consolidated Financial Statements
For the nine-month period ended May 31, 2025
(Unaudited - Expressed in Canadian dollars)
- Significant Accounting Policies (continued)
(j) Income Taxes (continued)
Deferred income tax
Deferred income tax is provided using the statement of financial position method on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. The carrying amount of deferred income tax assets is reviewed at the end of each reporting period and recognized only to the extent that it is probable that sufficient taxable income will be available to allow all or part of the deferred income tax asset to be utilized. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation authority.
(k) Earnings (Loss) Per Share
Basic earnings (loss) per share is computed using the weight average number of common shares outstanding during the period. The treasury stock method is used for the calculation of diluted loss per share, whereby all "in the money" stock options and share purchase warrants are assumed to have been exercised at the beginning of the period and the proceeds from their exercise are assumed to have been used to purchase common shares at the average market price during the period. When a loss is incurred during the period, basic and diluted loss per share are the same as the exercise of stock options and share purchase warrants is considered to be anti-dilutive.
(l) Other Comprehensive Income (Loss)
Other comprehensive income (loss) is the change in the Company's net assets that results from transactions, events and circumstances from sources other than the Company's shareholders and includes items that are not included in the statements of income (loss) and comprehensive income (loss). As at May 31, 2025 and 2024 the Company had no items that represent other comprehensive income (loss).
(m) Share-based Payments
The grant date fair value of share-based payment awards granted to employees is recognized as an employee expense, with a corresponding increase in equity, over the period that the employees unconditionally become entitled to the awards. The amount recognized as an expense is adjusted to reflect the number of awards for which the related service and non-market vesting conditions are expected to be met, such that the amount ultimately recognized as an expense is based on the number of awards that meet the related service and non-market performance conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant date fair value is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.
Share-based payment arrangements in which the Company fair values the goods or services it receives as consideration for its own equity instruments are accounted for as equity-settled, share-based payment transactions, regardless of how the equity instruments are obtained by the Company.
The fair value of the options is measured at the grant date using the Black-Scholes option pricing model. The fair value is recognized as an expense over the vesting period, which is the period over which all of the specified vesting conditions are satisfied with a corresponding increase in equity. For awards with graded vesting, the fair value of each tranche is recognized over its respective vesting period. Non-market vesting conditions are considered in making assumptions about the number of awards that are expected to vest. When the options are exercised, any proceeds received are credited to share capital along with the amount reflected in share-based payment reserve.
16
AI ARTIFICIAL INTELLIGENCE VENTURES INC.
Notes to the Condensed Interim Consolidated Financial Statements
For the nine-month period ended May 31, 2025
(Unaudited - Expressed in Canadian dollars)
- Investments
May 31, 2025
| Investment Type | Cost $ | Fair Value $ |
|---|---|---|
| Publicly Listed Companies | 3,044,064 | 1,925,653 |
| Warrants | - | 31,458 |
| Private Unlisted Companies | 1,050,000 | 2 |
| TOTAL INVESTMENTS | ||
| MAY 31, 2025 | $ 1,957,113 |
May 31, 2024
| Investment Type | Cost $ | Fair Value $ |
|---|---|---|
| Publicly Listed Companies | 3,446,799 | 1,890,781 |
| Warrants | - | 173,665 |
| Private Unlisted Companies | 1,050,000 | 6,252 |
| TOTAL INVESTMENTS | ||
| MAY 31, 2024 | $ 2,070,698 |
17
AI ARTIFICIAL INTELLIGENCE VENTURES INC.
Notes to the Condensed Interim Consolidated Financial Statements
For the nine-month period ended May 31, 2025
(Unaudited - Expressed in Canadian dollars)
4. Acquisition
In December 2022, the Company acquired debt with a face value of $280,000 of EMC Energy Metals Corp. ("EMC") for a cost of $140,000. The Company and EMC agreed to settle the debt by EMC issuing 14,000,000 common shares to the Company. After the issuance, the Company owned 94.1% of EMC. The transaction has been accounted for in accordance with guidance provided in IFRS 2 Share Based Payment and IFRS 3 Business Combinations. As EMC did not qualify as a business according to the definition in IFRS 3, this transaction does not constitute a business combination; rather it is treated as an asset acquisition.
| Receipt of EMC shares for settlement of receivable | $140,000 |
|---|---|
| Mineral property | $200,000 |
| Current liabilities assumed | (56,024) |
| Non-controlling interest | (3,976) |
| $140,000 |
5. Investment in Mineral Properties
On August 31, 2020, the Company acquired Encanto Potash Corp.'s 22.96% interest of potash resources in Saskatchewan through the issuance of 730,000 Series B redeemable convertible preferred shares of the Company. The Company determined the acquisition was an asset acquisition and the fair value of the assets acquired amounted to $6,388,000. During the year ended August 31, 2021 the investment in Encanto Potash was impaired down to $1. Also see Note 9a.
During the year, the Company acquired 94.1% of the issued and outstanding shares of EMC Energy Metals Corp. (formerly Glenmac Capital Inc.). EMC Energy Metals Corp. acquired in an arms-length transaction, 1381447 BC Ltd. ("138BC"), a private BC corporation whose sole asset is an option agreement to earn 100% interest in the 5,085 hectares Dion property, in Snow Lake Region of Manitoba prospective for lithium. The agreement provides for a 60-month option period for the optionee to earn a 100% interest in the Dion Property. See Note 4.
The agreement provides for aggregate cash and stock as follows:
- On signing of the definitive agreement, $50,000 cash (paid) and $250,000 in stock ($150,000 issued)
- On or before the 1st anniversary of signing the agreement, $50,000 cash and $150,000 in stock
- On or before the 2nd anniversary of signing the agreement, $100,000 cash and $100,000 in stock
- On or before the 3rd anniversary of signing the agreement $150,000 cash and $150,000 in stock
- On or before the 4th anniversary of signing the agreement $150,000 cash and $150,000 in stock
- On or before the 5th anniversary of signing the agreement $150,000 cash and $50,000 in stock
In addition, the optionor holds a 2% NSR of which one-half (1%) can be acquired for $1.5 million, provided that the option to acquire 100% of the property has been completed.
As at August 31, 2023, the Company determined it would not be fulfilling the terms of the option agreement and thus, has written-off all of the $200,000 in deferred costs incurred to date.
18
AI ARTIFICIAL INTELLIGENCE VENTURES INC.
Notes to the Condensed Interim Consolidated Financial Statements
For the nine-month period ended May 31, 2025
(Unaudited - Expressed in Canadian dollars)
6. Loans and Other Receivable
| Loan outstanding as at May 31, 2025 | Loan outstanding as at August 31, 2024 | |
|---|---|---|
| Encanto Potash Corp.(a) | 133,000 | 133,000 |
| King Global Ventures (b) | - | 580 |
| Laval Critical Elements Inc. (c) | 15,000 | 15,000 |
| 2638148 Alberta Inc. (d) | 223,891 | 201,250 |
| Miscellaneous | - | 13,617 |
| Total | 371,891 | 363,447 |
(a) During the year ended August 31, 2024, the Company advanced $nil (2024 – $nil) to an unrelated publicly traded company. During the year ended August 31, 2024 the Company received 320,000 common shares to satisfy $110,000 of the debt owed.
(b) During the year ended August 31, 2024, the Company advanced $21,470 (2024 – $nil) to an unrelated publicly traded company. The loan is unsecured and bears interest at 10% per annum. During the year ended August 31, 2024, the Company received repayment of $22,500.
(c) During the year ended August 31, 2024, the Company advanced $nil (2024 – $12,500) to an unrelated publicly traded company. The loan is unsecured and bears interest at 10% per annum. During the period ended May 31, 2025, the Company owed $15,000 (2024 – 15,000).
(d) During the period ended May 31, 2025, the Company loaned $223,891 (2024 - $201,250) to an unrelated private company. The loan us unsecured and bears interest at 15% per annum.
7. Notes Payable
(a) During the year ended August 31, 2021, the Company entered into a debt assignment agreement by which the Company agreed to purchase debt with a face value of $2,000,000 of an unrelated publicly traded company for a cost of $260,000. During the year ended August 31, 2021, the Company was able to collect $799,982 of the outstanding debt and recognized $539,983 as gain on debt assignment. As at February 28, 2025 the full balance of $260,000 was still outstanding. The amount owing is unsecured and non-interest bearing. The $10,000 was due upon execution of the debt assignment agreement. The remaining $250,000 was due in intervals of 90 days following the execution of the debt assignment agreement, with final payment due June 30, 2025.
(b) During the year ended August 31, 2024, the Company received $20,000 from an unrelated party. As of May 31, 2025, the total balance owing is $23,450 (2024 - $21,200). The loan is unsecured and bears interest at 15% per annum.
(c) During the year ended August 31, 2024, the Company received $67,000 from an unrelated party. The loan is unsecured and bears interest at 15% per annum. As of May 31, 2025, the total balance owing is $77,050 (2024 - $69,512).
19
AI ARTIFICIAL INTELLIGENCE VENTURES INC.
Notes to the Condensed Interim Consolidated Financial Statements
For the nine-month period ended May 31, 2025
(Unaudited - Expressed in Canadian dollars)
8. Related Party Transactions
Compensation of key management personnel
Key management personnel are those persons that have authority and responsibility for planning, directing and controlling the activities of the Company, directly and indirectly, and by definition include all the directors and officers of the Company.
(a) During the period May 31, 2025, the Company incurred consulting fees of $3,000 (2024 - $7,500) to a company controlled by the Chief Financial Officer ("CFO") of the Company. As at May 31, 2025, the Company had a payable of $71,125 (2024 - $62,125) to the company controlled by the CFO.
(b) During the period ended May 31, 2025, the Company incurred consulting fees of $6,000 (2024 - $15,000) to the Chief Executive Officer of the Company. As at May 31, 2025, the Company had $159,780 (2024 - $161,780) payable to the CEO.
(c) During the period ended May 31, 2025, the Company incurred consulting fees of $3,000 (2024- $nil) to a director of the Company. As at May 31, 2025, the Company had $6,500 (2024 - $nil) payable to the director.
(d) During the period ended May 31, 2025, the Company incurred consulting fees of $nil (2024- $7,500) to a director of the Company. As at May 31, 2025, the Company had $25,000 (2024 - $20,000) to the director.
These amounts are unsecured, non-interest bearing and have no specific terms of repayment.
9. Share Capital
Authorized: Unlimited common shares without par value and 5,000,000 Series B redeemable convertible preferred shares with stated face value of $10 per share.
(a) On August 31, 2020 the Company issued 730,000 Series B redeemable convertible preferred shares at a face value of $10 to acquire the Encanto Potash Corp.'s 22.96% interest of potash resources in Saskatchewan. The Series B redeemable convertible preferred shares are voting and carry preferential dividend rights over the common shares and are convertible at the option of the Company into ten common shares of the Company based upon either of the following options; redeem one dollar approximately every 180 days or a maximum of two dollar within a twelve month period. As of August 31, 2021 and up to the date of the audit report, none of the preferred shares have been redeemed or converted into common shares.
(b) On March 9, 2022 the Company settled an outstanding debt of $181,731 through the issuance of 2,307,692 shares.
(c) On April 25, 2023 the Company received proceeds and issued common shares for the exercise of 200,000 share purchase warrants at $0.15 per share.
10. Share Purchase Warrants
The following table summarizes the continuity of share purchase warrants:
| Number of warrants | Weighted average exercise price $ | |
|---|---|---|
| Outstanding, May 31, 2024 | – | – |
| Outstanding, May 31, 2025 | – | – |
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AI ARTIFICIAL INTELLIGENCE VENTURES INC.
Notes to the Condensed Interim Consolidated Financial Statements
For the nine-month period ended May 31, 2025
(Unaudited - Expressed in Canadian dollars)
11. Stock Options
The Company has adopted an incentive stock option plan in accordance with policies of TSX-V (the "Stock Option Plan") whereby the Board of Directors of the Company may from time to time, in its discretion, grant to directors, officers, employees, and consultants of the Company non-transferable options to purchase common shares, provided that the number of common shares reserved for issuance under the Stock Option Plan shall not exceed 10% of the issued and outstanding common shares exercisable for the period of up to ten years. In addition, the number of common shares reserved for issuance to any one person shall not exceed 5% of the issued and outstanding common shares and the number of common shares reserved for issuance to any one consultant will not exceed 2% of the issued and outstanding common shares. The Board of Directors determines the price per common share and the number of common shares which may be allocated to each director, officer, employee, and consultant and all other terms and conditions of the option, subject to the rules of the TSX-V.
The following table summarizes the continuity of the Company's stock options:
| Number of options | Weighted average exercise price $ | |
|---|---|---|
| Outstanding, May 31, 2023 | 500,000 | 0.24 |
| Expired | (100,000) | 0.24 |
| Outstanding, May 31, 2024 | 400,000 | 0.23 |
| Outstanding, May 31, 2025 | 400,000 | 0.24 |
During the period ended May 31, 2025 and 2024, there were no stock options granted.
As at May 31, 2025, the following stock options were outstanding:
| Number of options outstanding | Exercise price $ | Expiry date |
|---|---|---|
| 400,000 | 0.24 | April 6, 2026 |
| 400,000 | 0.24 |
21
AI ARTIFICIAL INTELLIGENCE VENTURES INC.
Notes to the Condensed Interim Consolidated Financial Statements
For the nine-month period ended May 31, 2025
(Unaudited - Expressed in Canadian dollars)
12. Financial Instruments and Risks
(a) Fair Values
Assets and liabilities measured at fair value on a recurring basis were presented on the Company's consolidated statement of financial position as at May 31, 2025, as follows:
| Fair value measurements using | Balance, May 31, 2024 | |||
|---|---|---|---|---|
| Quoted prices in active markets for identical instruments (Level 1) $ | Significant other observable inputs (Level 2) $ | Significant unobservable inputs (Level 3) $ | ||
| Cash | 80,788 | – | – | 80,788 |
| Investments | 1,925,653 | 31,458 | 2 | 1,957,113 |
| 2,006,441 | 31,458 | 252 | 2,037,901 |
The fair values of other financial instruments, which include loans and other receivable, accounts payable and accrued liabilities, notes payable, and amount due to related parties approximate their carrying values due to the relatively short-term maturity of these instruments.
(b) Credit Risk
Credit risk represents the risk associated with the inability of a counterparty to fulfill its financial obligations. Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash. The Company limits its exposure to credit loss by placing its cash with high credit quality financial institutions. Loans and other receivable is comprised of loans to third party companies. All investments are monitored closely by management and credit loss is limited to the carrying amount of these financial assets.
(c) Foreign Exchange and Interest Rate Risk
Foreign exchange risk is the risk that the fair value of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company is exposed to currency risk through the following assets and liabilities denominated in currencies other than the Canadian dollar: cash, loans and other receivable and prepaid expense.
(c) Foreign Exchange and Interest Rate Risk (continued)
Interest rate risk is the risk that fair value of a financial instrument will fluctuate because of changes in market interest rates. The Company has loans and other receivable and notes payable that bear interest at fixed rates or are non-interest bearing. Changes in market interest rates will not have a material impact on the cash flows of the Company. Accordingly, management does not consider there to be significant interest rate risk.
(d) Market Risk
The Company's investments are primarily in the form of publicly traded shares and share purchase warrants of publicly traded companies, of which the market values may fluctuate.
(e) Liquidity Risk
Liquidity risk arises through the excess of financial obligations over available financial assets due at any point in time. The Company's objective in managing liquidity risk is to maintain sufficient readily available capital in order to meet its liquidity requirements. A portion of the Company's equity holdings are in private unlisted investments for which no active markets exist. Accordingly, timely disposition may not be possible and the realized price may be significantly different from the carrying value. The Company's policy is to maintain sufficient cash to meet normal operating requirements.
22
AI ARTIFICIAL INTELLIGENCE VENTURES INC.
Notes to the Condensed Interim Consolidated Financial Statements
For the nine-month period ended May 31, 2025
(Unaudited - Expressed in Canadian dollars)
- Capital Management
The Company manages its capital to maintain its ability to continue as a going concern and to provide returns to shareholders and benefits to other stakeholders. The capital structure of the Company consists of cash and equity comprised of issued share capital and share-based payment reserve.
The Company manages its capital structure and makes adjustments to it in light of economic conditions. The Company, upon approval from its Board of Directors, will balance its overall capital structure through new share issues or by undertaking other activities as deemed appropriate under the specific circumstances. The investment objective of the Company is to achieve long-term capital growth from investments in public and private companies and the Company's objective in managing capital is to ensure it has the ability to continue to make new investments and to have sufficient cash for operations and to continue to operate as a going concern.
The Company is not subject to externally imposed capital requirements and the Company's overall strategy with respect to capital risk management remained unchanged from the year ended August 31, 2024.
23