Hemlo Mining Corp. — Interim / Quarterly Report 2020

Aug 25, 2020

Condensed interim consolidated financial statements (Expressed in Canadian dollars)

NEXJ HEALTH HOLDINGS INC.

Three and six months ended June 30, 2020 and 2019 (Unaudited)

NOTICE OF NO AUDITOR REVIEW OF 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 interim financial statements; they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor.

The accompanying unaudited condensed interim condensed interim consolidated financial statements of NexJ Health Holdings Inc. have been prepared by and are the responsibility of management. NexJ Health Holdings Inc.'s independent auditor has not performed a review of these unaudited condensed interim condensed interim consolidated financial statements in accordance with standards established by the Chartered Professional Accountants of Canada for a review of interim financial statements by an entity's auditor.

Condensed Interim Consolidated Statements of Financial Position (Expressed in thousands of Canadian dollars) (Unaudited)

	June 30,		December 31,
		2020		2019
Assets
Current assets:
Cash and cash equivalents	$	279	$	227
Accounts receivable		234		218
Prepaid expenses and other assets		337		163
Total current assets		850		608
Non-current assets:
Property and equipment		68		79
Right-Of-Use asset (note 4)		272		326
Contract costs (note 5)		148		131
Total non-current assets		488		536
Total assets	$	1,338	$	1,144
Liabilities and Shareholders'Deficiency
Current liabilities:
Accounts payable and accrued liabilities	$	1,949	$	1,571
Deferred revenue		933		528
Lease liability (note 6)Due to Former Parent (note 10(a), (b) and (c))		121		1171,839
Bridge loan (note 10(d))		1,410		795
Total current liabilities		4,413		4,850
Non-current liabilities
Lease liability (note 6)		206		268
Deferred revenue		23		48
Total non-current liabilities		229		316
Total liabilities		4,642		5,166
Shareholders' deficiency:
Share capital (note 7)		7,017		7,016
Contributed surplus (note 8)		286		235
Deficit		(10,607)		(11,273)
Total shareholders' deficiency		(3,304)		(4,022)
Going concern (note 3)
Related party transactions (note 10)
Total liabilities and shareholders' deficiency	$	1,338	$	1,144

See accompanying notes to condensed interim consolidated financial statements.

Condensed Interim Consolidated Statements of Comprehensive Loss (Expressed in thousands of Canadian dollars) (Unaudited)

		Three months endedJune 30,		Six months endedJune 30,
	2020	2019	2020	2019
Revenue:
Subscription fees	$143	$ 60	$ 222	$ 120
Professional services	221	88	389	287
	364	148	611	407
Expenses:
Professional services, net	112	158	311	284
Research and development, net (note 13)	10	488	609	956
Sales and marketing, net	173	240	366	464
General and administrative, net	186	215	402	414
	481	1,101	1,688	2,118
Loss from operations	(117)	(953)	(1,077)	(1,711)
Foreign exchange loss (gain)	3	(1)	2	7
Finance costs (note 9)	11	8	27	36
Finance income	(1)	_	(2)	_
Other Income (note 10 (b))	(1,770)	–	(1,770)	–
	(1,757)	7	(1,743)	43
Income (loss before income taxes)	1,640	(960)	666	(1,754)
Income taxes	–	–	–	–
Net income (loss) for the period and comprehensive loss	$1,640	$ (960)	$666	$ (1,754)
Income (loss) per share (note 9):
Basic	$ 0.03	$ (0.02)	$ 0.01	$ (0.04)
Diluted	$ 0.03	$ (0.02)	$ 0.01	$ (0.04)
Weighted average number of common sharesoutstanding, in thousands (note 9):
Basic	49,229	40,469	49,200	39,768
Diluted	50,007	40,469	49,939	39,768

See accompanying notes to the condensed interim consolidated financial statements.

Condensed Interim Consolidated Statements of Changes in Shareholders' Deficiency (Expressed in thousands of Canadian dollars and thousands of common shares) (Unaudited)

					Totalshareholders'
Six month endedJune 30, 2020	Common sharesContributedNumberAmountSurplus(deficiency)				equity
Balance, January 1, 2020	49,712	$ 7,016	$ (11,273)	$ 235	$ (4,022)
Comprehensive income	–	–	666	–	666
Share-based payment expense	–	–	–	51	51
Exercise of stock options	75	1	–	–	1
Balance, June 30, 2020	49,787	7,017	$ (10,607)	$ 286	$ (3,304)

Six month endedJune 30, 2019	Number	Common sharesAmount	Deficit	Contributedsurplus	Totalshareholders'equity(deficiency)
Balance, January 1, 2019	39,165	$ 4,519	$ (7,728)	$ 110	$ (3,099)
Comprehensive loss	–	–	(1,754)	–	(1,754)
Share-based payment expense	–	–	–	56	56
Exercise of stock options	4	–	–	–	–
Issuance of common shares as partof private placement (note 7)	1,300	325	–	–	325
Balance, June 30, 2019	40,469	4,844	$ (9,482)	$ 166	$ (4,472)

See accompanying notes to condensed interim consolidated financial statements.

Condensed Interim Consolidated Statements of Cash Flows (Expressed in thousands of Canadian dollars) (Unaudited)

		Six months endedJune 30,
	2020	2019
Cash flows from (used in) operating activities:
Loss for the period	$666	$(1,754)
Adjustments for:
Depreciation	65	64
Amortization of contracts costs (note 4(a))	50	27
Share-based payment expense	51	55
Finance costs	27	36
Finance income	(2)	--
Other income	(1,770)
Change in non-cash operating working capital:
Accounts receivable	(16)	27
Prepaid expenses and other assets	(175)	53
Accounts payable and accrued liabilities	229	359
Deferred revenue	380	98
Net cash flows used in operating activities	(495)	(1,035)
Cash flows from financing activities:
Payment of lease liability	(70)	(66)
Bridge loan	615	765
Proceeds of exercise of options	1	-
Proceeds from private placement (note 7)	-	325
Net cash flows from financing activities	546	1,024
Cash flows from (used in) investing activities:
Purchase of property and equipment	-	(19)
Interest received	2	-
Net cash flows from (used in) investing activities	2	(19)
Increase (decrease) in cash and cash equivalents	52	(30)
Cash and cash equivalents, beginning of period	227	60
Cash and cash equivalents, end of period	$279	$30
Supplemental cash flow information:
Acquisition of property and equipment not yet paid for	$-	$19

See accompanying notes to condensed interim consolidated financial statements.

Notes to Condensed interim consolidated financial statements (Expressed in thousands of Canadian dollars)

Three months ended June 30, 2019 and 2018

1. Nature of operations:

Business:

NexJ Health Holdings Inc. ("the Company") is incorporated in Canada with its corporate headquarters located at 10 York Mills Road, Suite 700, Toronto, Ontario M2P 2G4.

The Company is a provider of cloud-based patient-facing population health management solutions that deliver patient engagement for chronic disease prevention and management.

2. Basis of preparation:

(a) Statement of compliance:

These condensed interim condensed interim consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS"), International Accounting Standard ("IAS") 34, Interim Financial Reporting and International Financial Reporting Interpretations Committee ("IFRIC") interpretations, as issued by the International Accounting Standards Board ("IASB"). The notes presented in these condensed interim condensed interim consolidated financial statements include, in general, only significant changes and transactions occurring since the Company's last year end, and are not fully inclusive of all disclosures required by IFRS for annual financial statements. These condensed interim condensed interim consolidated financial statements should be read in conjunction with the annual audited condensed interim consolidated financial statements, including the notes thereto, for the years ended December 31, 2019 and 2018.

These condensed interim condensed interim consolidated financial statements were approved by the Board of Directors on August 25, 2020.

(b) Plan of Arrangement:

On January 25, 2016, NexJ Systems Inc. (the "Former Parent"), NexJ Health Inc. and NexJ Health Holdings Inc., completed a Plan of Arrangement (the "Arrangement"), pursuant to the Canada Business Corporations Act, under which, the Healthcare Business was spun out to the Former Parent's shareholders as a new corporation, NexJ Health Holdings Inc., formed to acquire the entire Healthcare Business of the Former Parent. The Arrangement was approved by the Board of Directors of the Former Parent on December 10, 2015 and by the Former Parent's shareholders on January 13, 2016 and the Arrangement closed on January 25, 2016, the effective date. Upon the effective time of the Arrangement, the Former Parent spun out the assets and liabilities of the Healthcare Business to the Company in exchange for common shares. The Former Parent then distributed the

Notes to Condensed interim consolidated financial statements (continued) (Expressed in thousands of Canadian dollars) (Unaudited)

Three months ended June 30, 2020 and 2019

2. Basis of preparation (continued):

common shares in NexJ Health Holdings Inc. to the Former Parent's shareholders, such that the Former Parent's shareholders received one common share of NexJ Health Holdings Inc. for every common share held in the Former Parent immediately prior to the Arrangement becoming effective.

The Company was incorporated for the purposes of participating in the Arrangement. The Company was not a business as defined under IFRS 3, Business Combinations and no independent parties were involved in the Arrangement; therefore, the Company cannot be an acquiree and thus no business combination occurred. Accordingly, in the Company's condensed interim consolidated financial statements, book value accounting has been used to account for the assets acquired and liabilities assumed upon completion of the Arrangement on the basis that there has been no business combination.

(c) Basis of presentation:

These condensed interim condensed interim consolidated financial statements include the accounts of the Company and its wholly owned subsidiary (together referred to as the "Company"). Intercompany balances and transactions, and any unrealized income and expenses arising from intercompany transactions are eliminated in preparing the condensed interim condensed interim consolidated financial statements. These condensed interim condensed interim consolidated financial statements have been prepared principally under the historical cost basis. Other measurement bases used are described in the applicable notes.

3. Going concern:

The accompanying condensed interim consolidated financial statements have been prepared pursuant to IFRS applicable to a going concern, which contemplates the realization of assets and settlement of liabilities in the normal course of business as they come due.

The Company has incurred operating losses and in the current fiscal year has relied on the proceeds of a Bridge Loan to support its operations. The Company's ability to continue its operations is dependent on its ability to raise additional financial capital if it is to remain as a going concern. In the Six months ended June 30, 2020 the Company received a Bridge Loan as described in note 9(c).

The Company's current cash resources are not sufficient to fund its planned business operations over the next 12 months. In order to fund the planned business operations over the next year, the Company will have to raise additional capital. The Company will continue to explore

Notes to Condensed interim consolidated financial statements (continued) (Expressed in thousands of Canadian dollars) (Unaudited)

Three months ended June 30, 2020 and 2019

3. Going concern (continued):

alternatives to generate positive cash flow including seeking additional funding; however, there is no assurance that these initiatives will be successful. This condition results in a material uncertainty which may cast significant doubt on the Company's ability to continue as a going concern. Management has assessed the Company's ability to raise additional capital and continue as a going concern, and has concluded that the going concern basis of accounting is appropriate.

These condensed interim consolidated financial statements do not include any adjustments to the amounts and classifications of assets and liabilities, and the reported revenues and expenses that might be necessary should the Company be unable to continue as a going concern.

4. Right of Use Assets:

Balance, beginning of periodDepreciation	$32654
Balance, end of period	$272

As a result of applying IFRS 16, the Company has recognized depreciation and net accretion expenses, instead of lease expense. During the three and six months ended June 30, 2020, the Company recognized $ 27 and $ 54 (2019 – ($ 9) and $ 54), respectively of depreciation expense.

5. Contract Costs:

	June 30,2020	December 31,	2019
Balance, beginning of periodContract costs incurredAmortization	$13167(50)	$	7698(43)
Balance, end of period	$148	$	131

The Company's total capitalized contract costs net of accumulated depreciation are $147 as at June 30, 2020 (December 31, 2019 - $80) and relates to incremental commission fees paid to certain sales and marketing employees as a result of obtaining client contracts.

Notes to Condensed interim consolidated financial statements (continued) (Expressed in thousands of Canadian dollars) (Unaudited)

Three months ended June 30, 2020 and 2019

5. Contract Costs (continued):

These costs are amortized consistent with the pattern of transfer to the customer for the goods and services to which the asset relates. The amortization period includes specifically identifiable contract renewals where there is no substantive renewal commission paid on renewals. The expected customer renewal period is estimated based over the life of the intellectual property including expected software upgrades by the customer, which the Company has determined to be approximately three years. During the three and six months ended June 30, 2020, amortization amounting to $31 and $50 (2019 - $11 and $27) was recognized as part sales and marketing in the condensed interim statements of comprehensive loss.

6. Lease liability:

The Company's lease is for office space. The lease contains no renewal options.

Total future lease payments as at June 30 are as follows:

	2020
Less than 1 yearBetween 1 and 5 years	$121206
Balance, end of period	$327

7. Share capital:

During the year ended December 31, 2019, the Company issued 7,300,000 common shares at a price of $0.25 per share, to Tatham Family Holdings II Ltd. upon conversion of $ 1,825 of the bridge loan (note 9 (c)). The Company issued 400,000 common shares at a price of $0.25 per share, to Mr., Errol Singer upon conversion of $100 of the bridge loan. During the year ended December 31, 2019, the Company secured $570 in financing by way of a private placement of 2,285,071 common shares at a price of $0.25 per share.

As of the date of these condensed interim consolidated financial statements, the Company has 49,246,798 issued and outstanding common shares.

Notes to Condensed interim consolidated financial statements (continued) (Expressed in thousands of Canadian dollars) (Unaudited)

Three months ended June 30, 2020 and 2019

8. Share-based payment arrangements:

The total share-based payment expense and the amount credited to contributed surplus for the three and six months ended June 30, 2020 was $ 19 and $51 (2019 - $34 and $ 56) respectively.

The following table outlines the activity for stock options for the Six month period ended June 30, 2020 and 2019:

	2020	2019
		Weighted		Weighted
		average
	Number	exercise	Number	exercise
	of options	price	of options	price
	(000s)		(000s)
Outstanding, beginning of period	3,409	$0.19	2,377	$0.17
Granted	1,225	0.25	1,055	0.25
Exercised	(75)	0.01	(4)	0.01
Cancelled	(50)	0.25	(45)	0.25
Outstanding, end of period	4,509	0.21	3,383	0.19
Exercisable	2,232	$0.17	1,515	$0.12

At June 30, 2019, the following table provides the outstanding options at their respective exercise prices and the related weighted average remaining contractual life:

		Weightedaverageremainingcontractual
	Number	life
Exercise price	outstanding	(years)
	(000s)
$0.01	732	2.92
$0.25	3,777	5.66
	4,509	5.22

Notes to Condensed interim consolidated financial statements (continued) (Expressed in thousands of Canadian dollars) (Unaudited)

Three months ended June 30, 2020 and 2019

9. Income (loss) per share:

The following table sets forth the calculation of basic and diluted loss per share:

		Three months endedJune 30,		Six months endedJune 30,
	2020	2019	2020	2019
Numerator:Income (loss) for the period	$1,640	$(960)	$666	$(1,754)
Denominator:Weighted average numberof shares (in thousands):
BasicDiluted	49,22950,007	40,36940,369	49,20049,939	39,76839,768
Income (loss) per share:Basic	$0.03	$ (0.02)	$ 0.01	$ (0.04)
Diluted	$ 0.03	$ (0.02)	$ 0.01	$ (0.04)

During the three and six months ended June 30, 2019, there were 797 and 801 weighted average outstanding stock options excluded from the computation of diluted loss per share as they were anti-dilutive.

10. Related party transactions:

(a) Interim loan agreement:

Pursuant to the Arrangement, the Company entered into an interim loan agreement with its Former Parent that provides that the Former Parent will advance funds to the Company as required from time to time up to a maximum of $1,000; the loan bears annual interest at prime rate, as published by the Royal Bank of Canada. The Former Parent advanced $994 (2019 - $994) as of June 15, 2020. With respect to this loan, the Company has recorded an interest expense of $5 and $14 (2019 - $10 and $20) as finance cost in the consolidated statements of comprehensive loss. The loan receivable is repayable on the date of the closing of a rights offering or other such financing by the Company, or such later date as agreed to by the parties. The terms of the agreement were agreed upon by the parties.

Notes to Condensed interim consolidated financial statements (continued) (Expressed in thousands of Canadian dollars) (Unaudited)

Three months ended June 30, 2020 and 2019

10. Related party transactions (continued):

(b) Shared services agreement:

Pursuant to the completed plan of arrangement in 2016 between the Company and the Former Parent, the Company also entered into a shared services agreement with its Former Parent under which the Former Parent was to provide services and support functions relating to facilities, human resources, finance and IT services for a monthly fee agreed upon between the parties. The Company incurred $636 ($719 inclusive of HST) for these services for the year ended December 31, 2016 which have been included under due to Former Parent on the condensed interim consolidated statements of financial position as of that date. The amounts are due on demand and are non-interest bearing.

Commencing January 1, 2017, as agreed to between the parties, the Former Parent will charge for facilities and any third party costs paid on behalf of NexJ Health Inc. On January 1, 2019, the parties entered into an agreement for the sublease of the office space occupied by NexJ Health Inc. Currently, the Former Parent charges for the sublease of office space, based on agreement signed between the parties, as well as for any third-party costs paid on behalf of NexJ Health Inc. Accordingly, the Former Parent charged $84 and $ 171 (2019 - $110 and $209) for the three and six months ended June 30, 2020.

(c) Separation Agreement:

On June 24, 2020, the Company and the Former Parent entered into a separation agreement effective June 15, 2020, terminating the interim loan agreement shared services agreement as well as the software license agreement between the two parties. As a result, the Company's liability of $ 1,770 to the Former Parent has been extinguished as at June 15. The liabilities have been written off and the Company recorded as other income of $ 1,770 for the three months and six months ended June 30, 2020.

(d) Bridge loans:

In the year ended December 31, 2018, the Company received a bridge loan of $1,565 from Tatham Family Holdings II Ltd. The Executive Chairman, Mr. William Tatham is also the President and a director of Tatham Family Holdings II Ltd. In December 2018, $ 700 of the outstanding bridge loan was converted into common shares with the issuance of 2,800,000 common shares to Tatham Family Holdings II Ltd. In the year ended December 31, 2019, the Company received a bridge loan of $1,570 from Tatham Family Holdings II Ltd. During the year ended December 2019, $1,825 of the outstanding bridge loan was converted into

Notes to Condensed interim consolidated financial statements (continued) (Expressed in thousands of Canadian dollars) (Unaudited)

Three months ended June 30, 2020 and 2019

10. Related party transactions (continued):

common shares with the issuance of 7,300,000 common shares to Tatham Family Holdings II Ltd. (note 6). In the six months ended June 30, 2020, the Company received a further bridge loan of $640 from Tatham Family Holdings II Ltd. The balance of the bridge loan at June 30, 2020 is $ 1,250. Subsequent to June 30, 2020, the Company received a further bridge loan of $150 from Tatham Family Holdings II Ltd. The bridge loan will be repaid or converted into the Company's common shares at a price to be determined.

In the year ended December 31, 2019, the Company received a bridge loan of $285 from Mr. Errol Singer, the Chief Financial Officer of the Company. During the year ended December 2019, $100 of the bridge loan was converted into common shares with the issuance of 400,000 common shares. (note 6). The balance of the bridge loan at June 30, 2020 is $ 160. The bridge loan will be repaid or converted into the Company's common shares at a price to be determined.

11. Financial instruments and capital management:

(a) Classification and fair values of financial instruments:

The following table sets out the Company's classification and carrying value, together with the fair value, for each type of financial asset and financial liability as at December 31, 2019 and 2018:

June 30, 2020					December 31, 2019
Classification		Carryingvalue		Fairvalue	Carryingvalue		Fairvalue
Financial assets:Held-for-trading:
Cash equivalentsLoans and receivables:	$	25	$	25	$25	$	25
Accounts receivableFinancial liabilities:Other financial liabilities:Accounts payable and	$	234	$	234	$218	$	218
accrued liabilitiesDue to Former ParentBridge loanLease Liability		1,949-1,410272		1,949-1,410272	1,5711,839795385		1,5711,839795385

The carrying values of accounts receivable, accounts payable and accrued liabilities, due to Former Parent and the bridge loan approximate their fair values due to the short-term nature of these financial instruments.

Notes to Condensed interim consolidated financial statements (continued) (Expressed in thousands of Canadian dollars) (Unaudited)

Three months ended June 30, 2020 and 2019

11. Financial instruments and capital management (continued):

Fair value measurements:

The Company provides disclosure of the three-level hierarchy that reflects the significance of the inputs used in making the fair value measurement. The three levels of fair value hierarchy based on the reliability of inputs are as follows:

• Level 1 inputs are quoted prices in active markets for identical assets and liabilities;
• Level 2 inputs are based on observable market data, either directly or indirectly other than quoted prices; and
• Level 3 inputs are not based on observable market data.

In the tables below, management has segregated all financial assets and financial liabilities that are measured at fair value into the most appropriate level within the fair value hierarchy, based on the inputs used to determine the fair value at the measurement date. Financial liabilities measured at fair value as at December 31, 2019 and 2018 in the condensed interim consolidated financial statements are summarized below:

June 30, 2020	Level 1	Level 2	Level 3	Total
Financial assets:Cash equivalents	$ 25	$	$	$ 25
Financial liabilities:Bridge Loan	$ 1,410	$	$	$ 1,410
December 31, 2019	Level 1	Level 2	Level 3	Total
Financial assets:Cash equivalents	$ 25	$–	$–	$25
Financial liabilities:Due to Former ParentBridge Loan	$ –79513	$––	$ 1,839–	$ 1,839795

Notes to Condensed interim consolidated financial statements (continued) (Expressed in thousands of Canadian dollars) (Unaudited)

Three months ended June 30, 2020 and 2019

11. Financial instruments and capital management (continued):

There were no transfers of financial assets and liabilities during the years between any of the levels.

(b) Market risk:

The Company, through its financial assets and liabilities, is exposed to various risks. The following analysis provides a measurement of these risks as at December 31, 2018:

(i) Credit risk:

Credit risk represents the financial loss that the Company would experience if a counterparty to a financial instrument, in which the Company has an amount owing from the counterparty, failed to meet its obligations in accordance with the terms and conditions of its contracts.

The Company's credit risk is primarily attributable to its accounts receivable. Management reviews the components of these accounts on a regular basis to evaluate and monitor this risk. The Company's customers are generally financially established organizations which limits the credit risk relating to the customers. In addition, credit reviews by management take into account the counterparty's financial position, past experience and other factors.

The following table summarizes the number of customers that individually comprise greater than 10% of total revenue or total accounts receivable and their aggregate percentage of the Company's total revenue and accounts receivable:

Notes to Condensed interim consolidated financial statements (continued) (Expressed in thousands of Canadian dollars) (Unaudited)

Three months ended June 30, 2020 and 2019

11. Financial instruments and capital management (continued):

	Revenue
	Number of	% of
	customers	total
Three months ended June 30, 2020	4	73
Three months ended June 30, 2019	4	72

	Accounts receivable
	Number of	% of
	customers	total
As at June 30, 2020	3	65
As at ended December 31, 2019	2	84

(ii) Liquidity risk and economic dependence:

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company's operations in the current fiscal year are financed through a combination of the cash inflows from operations and the issuance of equity in connection with the private placement undertaken in fiscal 2017. The Company has a history of operating losses and can be expected to generate continued operating losses and negative cash flows in the future while it carries out its current business plan (note 3).

(iii) Interest rate risk:

Interest rate risk arises because of the fluctuation in interest rates. The Company is subject to interest rate risk on its cash equivalents. The impact of change in interest rates is not expected to be significant.

(c) Capital management:

The Company's objective in managing capital is to ensure sufficient liquidity to operate as a going concern, to future fund research and development to enhance existing product

Notes to Condensed interim consolidated financial statements (continued) (Expressed in thousands of Canadian dollars) (Unaudited)

Three months ended June 30, 2020 and 2019

offerings, as well as develop new ones and provide sufficient resources to meet day-to-day operating requirements. In fiscal 2018, the Company received a bridge loan of $1,565 from Tatham Family Holdings II Ltd. In fiscal 2019, the Company received bridge loans of $1,855

11. Financial instruments and capital management (continued):

and secured $571 in financing by way of a private placement of 2,285,071 common shares (note 12). In the six months ended June 30, 2020, the Company received bridge loans of $615. The Company does not have any externally imposed capital requirements.

12. Segment reporting:

The Company has determined that it operates as a single reportable operating segment for purposes of making operating decisions and assessing performance. The Company's Executive Chairman, the chief operating decision maker, evaluates performance, makes operating decisions and allocates resources based on financial data consistent with the segmented reporting in these condensed interim consolidated financial statements. All of the Company's revenue has been earned in Canada. All of the Company's assets are located in Canada.

13. Research and development expense:

During the three and six months ended June 30, 2020, the Company received the 2019 Investment Tax Credit of $ 418 (2019 - $nil) and the amount has been recorded and offset against research and development expense,