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ICEsoft Technologies Canada Corp. — Interim / Quarterly Report 2024
Nov 29, 2024
47055_rns_2024-11-29_753156fb-4f57-4666-a976-22bf3e556449.pdf
Interim / Quarterly Report
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ICEsoft Technologies Canada Corp.
Condensed Consolidated Interim Financial Statements
($CAD) (Unaudited)
For the period ended September 30, 2024
NOTICE OF NO AUDITOR REVIEW OF INTERIM FINANCIAL STATEMENTS
Under National Instrument 51-102, continuous disclosure obligations, if an auditor has not performed a review of the interim financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor. The Corporation's independent auditor has not performed a review of these financial statements in accordance with standards established for a review of interim financial statements by an entity's auditor.
The accompanying unaudited condensed interim financial statements of the Corporation have been prepared by and are the responsibility of the ICEsoft Management team.
ICEsoft Technologies Canada Corp.
Condensed Consolidated Interim Statements of Financial Position
($CAD)
As at September 30, 2024
| (Unaudited) September 30, 2024 $ | (Audited) December 31, 2023 $ | |
|---|---|---|
| ASSETS | ||
| Current Assets | ||
| Cash | 111,953 | 70,871 |
| Accounts receivable | 177,876 | 107,456 |
| Prepaid expenses and deposits | 5,052 | 25,874 |
| Total Current Assets | 294,887 | 204,201 |
| Property and equipment | 8,052 | 10,332 |
| TOTAL ASSETS | 302,939 | 214,533 |
| LIABILITIES AND EQUITY | ||
| Liabilities | ||
| Current Liabilities | ||
| Accounts payable and accrued liabilities | 681,065 | 1,012,952 |
| Current portion of deferred revenue (note 4) | 1,119,337 | 892,508 |
| Current portion of convertible notes (note 5) | 646,526 | |
| Total Current Liabilities | 2,446,928 | 1,905,459 |
| Deferred revenue (note 4) | 99,433 | 32,998 |
| Convertible notes (note 5) | 687,917 | 1,079,984 |
| Total Liabilities | 3,324,278 | 3,018,431 |
| Shareholders' Deficiency | ||
| Share capital (note 6) | 27,826,697 | 27,826,697 |
| Equity portion of convertible notes (note 5) | 148,779 | 77,028 |
| Warrants (note 7) | 20,005 | 343,656 |
| Reserves (note 8) | 5,009,983 | 4,685,621 |
| Foreign currency translation reserve | (2,015,790) | (1,944,392) |
| Deficit | (33,831,013) | (33,792,508) |
| Total Shareholders' Deficiency | (2,931,339) | (2,803,898) |
| TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIENCY | 302,939 | 214,533 |
Going concern (note 1)
Approved on behalf of the Board of Directors:
'Brian McKinney', Director
The accompanying notes are an integral part of the consolidated financial statements.
ICEsoft Technologies Canada Corp.
Condensed Consolidated Interim Statements of Loss and Comprehensive Loss
($CAD) (Unaudited)
For the periods ended September 30
| Three months ended | 9 Months Ended | |||
|---|---|---|---|---|
| Sept. 30, 2024 $ | Sept. 30, 2023 $ | Sept. 30, 2024 $ | Sept. 30, 2023 $ | |
| Revenues (note 3) | ||||
| Subscription income | 483,107 | 432,013 | 1,385,384 | 1,289,088 |
| Other | 8,143 | 24,585 | 29,557 | 39,481 |
| Total Revenue | 491,250 | 456,598 | 1,414,941 | 1,328,569 |
| Cost of Revenue | ||||
| Information services | 113,731 | 126,063 | 335,694 | 408,500 |
| Commissions and bonus | 7,506 | - | 102,854 | - |
| Total Cost of Revenue | 121,237 | 126,063 | 438,548 | 408,500 |
| Total Gross Profit | 370,013 | 330,535 | 976,393 | 920,069 |
| Operating Expenses | ||||
| Research and development | 140,624 | 249,005 | 389,200 | 687,316 |
| General and Administrative | 71,264 | 22,642 | 225,383 | 182,694 |
| Sales, Marketing and Operations | 115,941 | 12,423 | 276,636 | 208,207 |
| Share-based payments | 193 | - | 581 | - |
| Depreciation of property and equipment | 665 | - | 2,281 | - |
| Total Operating Expenses | 328,687 | 284,070 | 894,081 | 1,078,217 |
| Net Operating Income (Loss) | 41,326 | 46,465 | 82,312 | (158,148) |
| Other Income (Expense) | ||||
| Other Income | 1,635 | - | 3,272 | - |
| One-time Restructuring Cost | - | - | - | (332,881) |
| Finance expense (note 9) | (42,042) | (11,802) | (123,016) | (54,072) |
| Total Other Income (Expense) | (40,407) | (11,802) | (119,744) | (386,953) |
| Net Income (Loss) | 919 | 34,663 | (37,431) | (545,101) |
| Other Comprehensive Income (Loss) | ||||
| Items which may be subsequently reclassified to profit or loss | ||||
| Translation of foreign operations | (95,190) | - | (161,398) | - |
| Comprehensive loss | (94,271) | 34,663 | (198,902) | (545,101) |
| Income (Loss) per share - basic and diluted (note 6 (i)) | (0.00) | (0.00) | (0.00) | (0.00) |
The accompanying notes are an integral part of the consolidated financial statements.
ICEsoft Technologies Canada Corp.
Condensed Consolidated Interim Statements of Changes in Shareholders' Deficiency
($CAD) (Unaudited)
For the periods ended September 30
| Share Capital | Equity component of convertible notes | Warrants | Reserves | Deficit | Accumulated Other Comprehensive Loss | Total | |
|---|---|---|---|---|---|---|---|
| $ | $ | $ | $ | $ | $ | $ | |
| Balance December 31, 2022 | 27,826,697 | 57,363 | 373,830 | 4,649,025 | (33,101,353) | (1,946,571) | (2,141,191) |
| Convertible notes issues | - | 16,307 | - | - | - | - | 16,307 |
| Share-based payments | - | - | - | 775 | - | - | 775 |
| Expiration of warrants | - | - | - | 35,821 | - | - | - |
| Net Loss and Comprehensive Loss | - | - | - | - | 541,101 | 2,179 | (580,152) |
| Balance September 30, 2023 | 27,826,697 | 73,670 | 373,860 | 4,649,025 | (33,681,687) | (1,944,392) | (1,576,829) |
| Balance December 31, 2023 | 27,826,697 | 77,028 | 343,656 | 4,685,621 | (33,792,508) | (1,944,392) | (2,803,898) |
| Convertible Notes Issued | - | 71,751 | - | - | - | - | 71,751 |
| Share-based payments | - | - | - | 581 | - | - | 581 |
| Expiration of Warrants | - | - | (323,651) | 323,651 | - | - | - |
| Net Loss and Comprehensive Loss | - | - | - | - | (37,431) | (161,398) | (198,829) |
| Balance September 30, 2024 | 27,826,697 | 148,779 | 20,005 | 5,009,853 | (33,829,939) | (2,105,790) | (2,908,395) |
The accompanying notes are an integral part of the consolidated financial statements.
ICEsoft Technologies Canada Corp.
Condensed Consolidated Interim Statements of Cash Flows
($CAD) (Unaudited)
For the periods ended September 30
| Three months ended | Nine months ended | |||
|---|---|---|---|---|
| 2024 $ | 2023 $ | 2024 $ | 2023 $ | |
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||
| Net Income (Loss) | 919 | 34,663 | (37,431) | (545,091) |
| Add back (deduct) items not involving cash: | ||||
| Finance expense | 42,042 | 37,183 | 123,016 | 96,068 |
| Amortization of property and equipment | 667 | 808 | 2,281 | 2,424 |
| Stock-based compensation | 193 | - | 581 | - |
| 43,821 | 72,654 | 88,447 | (446,609) | |
| Changes in non-cash working capital items: | ||||
| Accounts receivable | 34,303 | 23,355 | (70,420) | (34,621) |
| Prepaid expenses and deposits | 8,824 | 52,776 | 20,816 | 19,343 |
| Accounts payable and accrued liabilities | (222,033) | (142,934) | (331,887) | (396,839) |
| Severance liability | - | (47,838) | - | 231,695 |
| Deferred revenue (note 4) | (49,629) | (31,070) | 293,274 | 202,761 |
| Net cash (used) in operating activities | (184,714) | (73,057) | 230 | (424,270) |
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||
| Proceeds from Convertible Debt | 220,000 | - | 220,000 | 250,000 |
| Repayment of convertible debt | (100,000) | - | (100,000) | - |
| Interest paid | (3,850) | - | (10,080) | |
| Net cash generated by financing activities | 116,150 | - | 109,920 | 250,000 |
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||
| Acquisition of property and equipment | - | - | ||
| Net cash generated by investing activities | - | - | - | - |
| Effect of change in foreign exchange rates on cash | (2,474) | 52,895 | (69,068) | (32,499) |
| Change in cash for the period | (71,038) | (20,162) | 41,082 | (206,769) |
| Cash, beginning of the period | 182,991 | 133,742 | 70,871 | 320,349 |
| Cash, end of the period | 111,953 | 113,580 | 111,953 | 113,580 |
See notes 10 for the details of non-cash transactions.
The accompanying notes are an integral part of the consolidated financial statements.
ICEsoft Technologies Canada Corp.
Notes to the Condensed Consolidated Interim Financial Statements
($CAD) (Unaudited)
For the period ended September 30, 2024
NATURE OF OPERATIONS
ICEsoft Technologies Canada Corp. (the "Corporation" or "ICEsoft"), was incorporated on May 10, 2002 under the Canada Business Corporations Act. ICEsoft and its subsidiaries develop and license a comprehensive suite of web technologies and Software as a Service (SaaS) solutions for both enterprise and government clients. The Corporation's primary products consist of its Clickware product, ICEfaces, and the SaaS-based Voyent Alert! Notification Service which is licensed to government and enterprise clients on a subscription basis.
ICEsoft's head office is located at 340-600 Crowfoot Cres. N.W., Calgary, Alberta, Canada, T3G 0B4.
These condensed consolidated interim financial statements of the Corporation as at September 30, 2024 and December 31, 2023 and for the periods ended September 30, 2024 and 2023 ("Financial Statements") consist of the Corporation and its wholly-owned subsidiaries. ICEsoft wholly owns ICEsoft Technologies Holdings Ltd, which acts as the Corporation's main Canadian operating entity; and wholly owns ICEsoft Technologies Inc., incorporated in the State of Delaware, which acts as the United States operating entity.
1. GOING CONCERN
These Financial Statements have been prepared on the basis that the Corporation will continue as a going concern, which assumes that the Corporation will be able to realize its assets and discharge its liabilities for the foreseeable future. Management is aware, in making its going concern assessment, of events and conditions that indicate the existence of a material uncertainty that may cast significant doubt upon the Corporation's ability to continue as a going concern.
As at September 30, 2024, the Corporation had negative net working capital of $2,152,041 (December 31, 2023 - $1,701,258) and an accumulated deficit of $33,831,013 (December 31, 2023 - $33,792,508). The Corporation incurred a net loss during the nine months ended September 30, 2024 of $104,558 (nine months ended September 30, 2023 – $545,101).
The Corporation has been able to generate positive cash flows from operations over each of the prior four quarters. Whether and when the Corporation can continue to generate sufficient operating cash flows to pay for its expenditures and settle its obligations as they fall due subsequent to September 30, 2024 is uncertain. Management may have to raise funds by way of debt or equity issuances. The Corporation will closely monitor its cash and will take the necessary measures to preserve cash, such as reducing spending as needed until the Corporation succeeds in gathering sufficient sales volumes to consistently achieve profitable operations and generate positive cash flows from operations.
These consolidated Financial Statements do not reflect the adjustments to the carrying values of assets and liabilities and the reported expenses and statement of financial position classifications that would be necessary were the going concern assumption inappropriate. These adjustments could be material.
2. BASIS OF PRESENTATION
(a) Statement of compliance
These Financial Statements have been prepared in accordance with IAS 34 Interim Financial Reporting and International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"), and interpretations of the IFRS
ICEsoft Technologies Canada Corp.
Notes to the Condensed Consolidated Interim Financial Statements
($CAD) (Unaudited)
For the period ended September 30, 2024
Interpretations Committee (IFRIC's).
The Financial Statements were approved and authorized for issue by the Board of Directors on November 29, 2024.
(b) Basis of preparation
These Financial Statements have been prepared under the historical cost convention, except for certain financial instruments classified as financial instruments at fair value through profit and loss, which are stated at their fair value, and are expressed in in Canadian dollars unless otherwise indicated. Other measurement bases used are detailed in the Corporation's annual consolidated financial statements ("Annual Financial Statements").
Certain comparative figures have been reclassified to conform to the current period's presentation.
The notes presented in these Financial Statements include only significant events and transactions occurring since the Corporation's last fiscal year end and are not fully inclusive of all matters required to be disclosed by IFRS in the Corporation's annual consolidated financial statements. As a result, these Financial Statements should be read in conjunction with the Annual Financial Statements.
These Financial Statements follow the same accounting policies and methods of application as the most recent Annual Financial Statements.
- REVENUE
The Corporation disaggregates revenue by two major service lines: (1) "ICEfaces and Related Legacy Product" and (2) "Voyent Alert" revenue. Both categories include subscription revenue earned on software access licence agreements and support and maintenance revenue earned from providing customer-requested assistance and updates within the reporting period.
| Three months ended September 30, | Nine months ended September 30, | |||
|---|---|---|---|---|
| 2024 $ | 2023 $ | 2024 $ | 2023 $ | |
| Revenue by major category | ||||
| ICEfaces & Related Legacy Subscription income | 213,378 | 240,808 | 638,945 | 765,733 |
| Voyent Alert | ||||
| Subscription income | 271,072 | 191,205 | 750,287 | 523,355 |
| Usage fees & Customization | 6,800 | 24,585 | 25,709 | 39,481 |
| Total | 491,250 | 456,598 | 1,414,941 | 1,328,569 |
- DEFERRED REVENUE
Timing differences between invoicing, cash collection, and revenue recognition result in accounts receivable and also result in deferred revenue on the consolidated statements of financial position. Amounts are billed in accordance with the terms of each customer contract. For most contracts, the Corporation receives payments for contract subscriptions prior to satisfying contracted obligations and recognizing revenue, resulting in deferred revenue.
ICEsoft Technologies Canada Corp.
Notes to the Condensed Consolidated Interim Financial Statements
(S CAD) (Unaudited)
For the period ended September 30, 2024
All deferred revenue recorded in 2024 and 2023 relates to certain subscription agreements. Changes in deferred revenue during the periods consist of:
| Sept. 30, 2024 | December 31, 2023 | |
|---|---|---|
| $ | $ | |
| Deferred revenue | ||
| Opening balance | 925,496 | 830,859 |
| Sales collected | 1,659,679 | 1,816,724 |
| Recognized in revenue | ||
| From opening balances | (827,086) | (880,685) |
| From additions in the period | (558,298) | (840,774) |
| Foreign exchange effect | 18,979 | (628) |
| Total deferred revenue | 1,218,770 | 925,496 |
| Less: current portion | (1,119,337) | (892,508) |
| Long-term portion | 99,433 | 32,998 |
As at September 30, 2024, revenues allocated to remaining performance obligations from subscription contracts, extending through to end of 2026, total $1,211,158. Of this amount, approximately $457,103 is expected to be recognized in the remainder of 2024, $692,014 is expected to be recognized in 2025 and $62,041 is expected to be recognized in 2026.
5. CONVERTIBLE NOTES
The balance of convertible notes as of September 30, 2024 and December 31, 2023 is reconciled as follows:
| September 30, 2024 | December 31, 2023 | |
|---|---|---|
| $ | $ | |
| Opening Balance | 1,079,984 | 714,925 |
| Modification of notes | - | (10,425) |
| Accretion | 26,936 | 16,130 |
| Interest accrued | 115,060 | 143,019 |
| Interest paid | (10,080) | (14,000) |
| Repayment of convertible note | (97,457) | |
| Additions Net of Equity Conversion Feature | 220,000 | 230,335 |
| Total debt outstanding | 1,334,443 | 1,079,984 |
| Less: current portion | (646,526) | - |
| Long-term portion | 687,917 | 1,079,984 |
(i) The convertible note with a face value of $100,000 was extended for one year on each of December 31, 2020, November 15, 2021 and December 12, 2022. As part of the first loan extension in 2020, the note holder was entitled to 300,000 warrants which could be converted to common shares. There was no change to the expiry date of the warrants due to extensions. The 300,000 warrants are set to expire December 1, 2024. During the year ended December 31, 2022, 300,000 warrants were granted to the lender as compensation for the loan extension. The warrants have an expiry date of December 12, 2025, and are exercisable at $0.06 per common share. The warrants are valued at $Nil.
On December 31, 2023, the corporation the Corporation extended the maturity date by two
ICEsoft Technologies Canada Corp.
Notes to the Condensed Consolidated Interim Financial Statements
(SCAD) (Unaudited)
For the period ended September 30, 2024
years to December 12, 2025 and increase the interest rate to 15% per annum. During the year ended December 31, 2023, 200,000 warrants were granted to the lender as compensation for the loan extension. The warrants have an expiry date of December 10, 2027 and are exercisable at $0.06 per common share.
The note is convertible to common shares at a conversion price of 0.15 per share. The convertible note is secured by all assets, including the intellectual property, of the Corporation.
(ii) On September 21, 2022, the Corporation concluded a secured convertible note financing transaction raising gross cash proceeds of $650,175 from various related parties. The issued secured convertible promissory notes bear simple interest at a rate of 15% per annum with for a term of 36 months from date of issuance. The notes bear a conversion feature allowing the note holder to convert all or part of the principal balance and accrued interest into common shares of the Corporation at a conversion price of $0.05 per share. The convertible notes were fair valued using a discount rate of 18%. The resulting calculations allocated $51,289 as the value of the equity conversion feature.
(iii) On February 27, 2023, the Corporation concluded a secured convertible note financing transaction raising gross cash proceeds of $100,000 and conversion of $150,000 in prior debt from various related parties. The issued secured convertible promissory notes bear simple interest at a rate of 15% per annum with for a term of 36 months from date of issuance. The notes bear a conversion feature allowing the note holder to convert all or part of the principal balance and accrued interest into common shares of the Corporation at a conversion price of $0.05 per share. The convertible notes were fair valued using a discount rate of 18%. The resulting calculations allocated $77,616 as the value of the equity conversion feature.
(iv) On August 29, 2024, the Corporation concluded a secured convertible note financing transaction raising gross cash proceeds of $100,000 and conversion of $120,000 in prior debt from various related parties. The issued secured convertible promissory notes bear simple interest at a rate of 15% per annum with for a term of 36 months from date of issuance. The notes bear a conversion feature allowing the note holder to convert all or part of the principal balance and accrued interest into common shares of the Corporation at a conversion price of $0.05 per share. The convertible notes were fair valued using a discount rate of 18%. The resulting calculations allocated $71,751 as the value of the equity conversion feature.
6. SHARE CAPITAL
The Corporation is authorized to issue an unlimited number of Preferred Shares without nominal or par value and an unlimited number of Common Shares without nominal or par value. No Preferred Shares were issued in the current period or prior year.
The Corporation has the following Common Shares issued and outstanding:
| Number of Shares | Share Capital | |
|---|---|---|
| # | $ | |
| Balance, December 31, 2020 | 80,116,026 | 26,861,053 |
| Issuance of shares with units for cash (i) | 30,000,000 | 973,149 |
| Issuance of shares with units on settlement of debt (ii) | 2,000,000 | 64,877 |
| Share issuance costs | - | (72,382) |
| Balance, December 31, 2021/22/23, | 112,116,025 | 27,826,697 |
ICEsoft Technologies Canada Corp.
Notes to the Condensed Consolidated Interim Financial Statements
($CAD) (Unaudited)
For the period ended September 30, 2024
Balance, September 30, 2024
112,116,025
27,826,697
(i) No new shares were issued during the nine months ended September 30, 2024 and FY 2023.
The weighted average number of common shares outstanding used to calculate basic and diluted loss per share is 112,116,026 for the nine months ended September 30, 2024 (nine months ended September 30, 2023 – 112,116,026). The Corporation excluded all convertible notes, warrants, and stock options from the calculation of diluted loss per share for the three months ended September, 2024 and 2023, as they would be anti-dilutive.
7. WARRANTS
Warrants are used to recognize the fair value of financial instruments which are granted to agents of the Corporation typically as a form of compensation related to capital raising activities. When warrants are subsequently exercised, the fair value of such warrants is credited to the share capital account. When warrants expire, their value is credited to reserves.
A summary of warrant transactions is as follows:
| Number of Warrants | Weighted average exercise price | Expiry Date | |
|---|---|---|---|
| Outstanding at December 31, 2021 | 65,667,734 | 0.12 | |
| Issued | 300,000 | 0.06 | Dec. 2025 |
| Expired | (29,939,818) | 0.20 | March, April, September 2022 |
| Outstanding at December 31, 2022 | 36,027,917 | 0.09 | |
| Issued | 350,000 | 0.05 | Feb., Dec 2027 |
| Expired | (2,400,000) | 0.20 | March, April September 2027 |
| Outstanding at December 31, 2023 | 33,977,917 | 0.09 | |
| Issued | 650,000 | 0.05 | February, March |
| Expired | (32,000,000) | 0.20 | September 2024 |
| Outstanding at September 30, 2024 | 2,627,917 | 0.09 |
No warrants were exercised during the three or nine months ended September 30, 2024 or the year ended December 31, 2023. The weighted average remaining life of all warrants outstanding at September 30, 2024 is 1.27 years (December 31, 2023 – 1.81 years).
The fair value of the warrants used in the input into the bifurcation of units and of other warrants issued was estimated on the date of the grant, as determined by using the Black-Scholes option-pricing model with the following weighted average assumptions:
| Nine months ended Sept. 30, 2024 | Year ended December 31, 2023 | |
|---|---|---|
| Exercise Price | $0.08 | $0.08 |
| Share Price | $0.055 | $0.055 |
| Dividend Yield | - | - |
| Forfeiture % | - | - |
| Risk-free interest rate | 1.00% | 1.00% |
ICEsoft Technologies Canada Corp.
Notes to the Condensed Consolidated Interim Financial Statements
(SCAD) (Unaudited)
For the period ended September 30, 2024
Expected life of warrants
3 years
4 years
Expected volatility
100.00%
100.00%
8. RESERVES
Reserves are used to recognize the fair value of stock options granted and the fair market value of expired warrants. When options are subsequently exercised, the fair value of such options in reserves are credited to share capital. Should the options expire unexercised, their fair market value remains in the reserves account.
The Corporation has a stock option plan ("the Plan"). Under the Plan, the Board of Directors of the Corporation may from time to time, in its discretion, grant to directors, officers, employees and consultants of the Corporation non-transferable options to purchase common shares. The maximum number of common shares reserved for issuance under the Plan shall not exceed 15% of the then issued and outstanding common shares of the Corporation. The options will be exercisable for a period of up to ten years. The Board of Directors will determine 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 Canadian Securities Exchange (CSE), and the TSX Venture Exchange.
A summary of the Plan transactions for the nine months ended September 30, 2024 and for the year ended December 31, 2023 are as follows:
| September 30, 2024 | December 31, 2023 | |||
|---|---|---|---|---|
| Number of Options | Weighted average exercise price | Number of Options | Weighted average exercise price | |
| Outstanding at beginning of period | 6,378,000 | 0.10 | 6,668,000 | 0.10 |
| Granted | - | - | - | - |
| Expired | (5,925,000) | 0.10 | (290,000) | 0.10 |
| Outstanding at end of period | 453,000 | 0.05 | 6,378,000 | 0.10 |
| Exercisable at end of period | 453,000 | 0.05 | 6,078,000 | 0.10 |
The weighted average remaining life of all options outstanding at September 30, 2024 is 1.75 years (December 31, 2023 – 0.58 years). No options were exercised during the three months ended September 30, 2024 or the year ended December 31, 2023.
9. FINANCE EXPENSE
| Three months ended September 30 | Nine months ended September 30 | |||
|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |
| $ | $ | |||
| Interest on convertible notes | 42,042 | 37,183 | 123,016 | 96,068 |
| Interest on lease liability | - | - | - | - |
| Other finance expense | - | - | - | - |
| 42,042 | 37,183 | 123,016 | 96,068 |
ICEsoft Technologies Canada Corp.
Notes to the Condensed Consolidated Interim Financial Statements
(S CAD) (Unaudited)
For the period ended September 30, 2024
Finance expense includes cash and non-cash interest of $42,042 (2023 - $37,183) on the convertible notes.
10. RELATED PARTY TRANSACTIONS AND PERSONNEL COSTS
The Corporation considers its key management personnel to be its Chief Executive Officer; Chief Financial Officer, directors, and close family members of the previously mentioned individuals. Key management compensation is comprised of wages and salaries, stock-based compensation and consulting fees paid to key management and companies controlled by key management. During the three months ended September 30, 2024, key management compensation amounted to $74,503 (three months ended September 30, 2023 - $46,609), split between general and administrative, marketing and operations, and research and development expenses based on work performed.
Key management personnel have accounts payable owing from the Corporation, including payroll and vacation accruals, in the amount of $423,549 at June 30, 2024 (June 30, 2023 - $378,000).
Total personnel expenses for employees, consultants, directors and management included in expenses in the consolidated statement of loss and comprehensive loss total $219,383 for the three months ended September, 2024 (three months ended September, 2023 - $304,070), split between general and administrative, marketing and operations, and research and development expenses, based on work performed.
11. FAIR VALUE OF FINANCIAL INSTRUMENTS
Due to the short-term nature of cash, accounts receivable, deposits, and accounts payable and accrued liabilities, the Corporation determined that the carrying amounts of these financial instruments approximate their fair value. The carrying amounts of the term loans and convertible notes approximate their fair value due either to the interest rate approximating market rates or because of the short period to maturity.
12. CORPORATE RESTRUCTURING / REDUCTION IN FORCE
In December 2022, the Corporation released its 2.0 upgrade to its Voyent Alert! product, which saw extensive usage an in-service validation throughout Q1 and early Q2. In May 2023 the Corporation underwent a restructuring and associated reduction in force resulting in a forecast monthly saving of approximately $50,000 per month. In association with this action, the Corporation incurred a one time expense of $332,902 related severance obligations. As of September 30, 2024 the outstanding liability associated with the restructuring has been reduced to $57,380.