iSIGN Media Solutions Inc. — Interim / Quarterly Report 2022

Sep 30, 2021

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iSIGN Media Solutions Inc.

Condensed Consolidated Interim Financial Statements For the Three Months Ended July 31, 2021 and 2020 Expressed in Canadian Dollars

ATTRACT . TRANSACT . MEASURE .

iSIGN MEDIA SOLUTIONS INC.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED JULY 31, 2021 and 2020

Contents

Notice to Shareholders	2
Consolidated Statements of Financial Position	3
Consolidated Statements of Changes in Shareholders’ Equity (Deficiency)	4
Consolidated Statements of Loss and Comprehensive Loss	5
Consolidated Statements of Cash Flows	6
Notes to Consolidated Financial Statements	7 - 27

iSIGN MEDIA SOLUTIONS INC.

Notice of no auditor review of the condensed consolidated 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 consolidated interim financial statements of iSIGN Media Solutions Inc. (the “Company”) have been prepared by and are the responsibility of the Company’s management and approved by the Board of Directors.

The Company’s independent auditor has not performed a review of these condensed consolidated interim financial statements in accordance with the standards established by The Canadian Institute of Chartered Accountants, for a review of interim financial statements by an entity’s auditor.

September 29 2021

iSIGN Media Solutions Inc. Condensed Consolidated Interim Statements of Financial Position (Unaudited) Expressed in Canadian Dollars

	[Notes]	July 31, 2021		April 30, 2021
Assets
Current assets
Cash		$ 98,933	$	3,396
Restricted cash		10,000		10,000
Accounts receivable (net of allowance of $77,157, 2021 - $77,157)		-		-
Other receivables and sales taxes recoverable		44,860		46,045
Inventories		9,498		9,498
Prepaid expenses and deposits		18,237		9,237
Total current assets		181,528		78,176
Non-current assets
Property and equipment	[4]	22,242		3,561
Intangible assets	[5]	44,898		45,823
Right-of-use lease		95,766		106,407
Total non-current assets		162,906		155,791
Total assets		$ 344,434	$	233,967
Liabilities
Current liabilities
Bank indebtedness		$ -	$	12,800
Accounts payable and accrued liabilities	[12]	1,352,719		1,278,158
Advances	[12.xiv, xvi, xvii]	328,000		328,000
Notes payable	[6, 12.iv, xi]	660,700		644,350
Convertible notes payable	[7, 12.v, viii, ix, x, xii, xiii, xv]	2,010,639		2,010,639
Lease obligation	[15]	43,536		43,536
Total current liabilities		4,395,594		4,317,483
Non-current liabilities
Lease obligation	[15]	52,087		61,676
Government of Canada COVID funding	[8]	60,243		57,299
Other liabilities	[9]	302,337		302,337
Total liabilities		4,810,261		4,738,795
Shareholders’ (deficiency)
Share capital	[10.a]	16,773,579		16,516,329
Warrants	[10.d]	248,096		247,100
Contributed surplus	[11]	11,050,752		10,911,748
Convertible debenture conversion option		162,359		162,359
Deficit		(32,700,613)		(32,342,364)
Total shareholders’ (deficiency)		(4,465,827)		(4,504,828)
Total liabilities and shareholders’ (deficiency)		$ 344,434	$	233,967
Going Concern [Note 2]
Commitments and Contingencies [Note 15]
Subsequent Events [Note 16]
Approved by the board
_"B. MacBean"______	_"Alex Romanov"_______
Director	Director

3

The accompanying notes form an integral part of these consolidated financial statements.

iSIGN Media Solutions Inc. Condensed Consolidated Interim Statements of Changes in Shareholders’ Equity (Deficiency) For the Three Months Ended July, 31, 2021 and 2020 (Unaudited) Expressed in Canadian Dollars

[Notes]	Share Capital Warrants Number Amount Number Amount Contributed Surplus Deficit $ $ $ $	Convertible Debenture Conversion Option Total Shareholders’ Equity (Deficiency) $ $
Balance at April 30, 2020 Transfer to/from contributed surplus: Ascribed value of expired warrants [10.d, 11] Ascribed value of warrant bonus [10.d, 11] Net loss Balance at July 31, 2020 Balance at April 30, 2021 Issuance of common shares with warrants [10.a] Transfer to/from contributed surplus: Ascribed value of expired warrants [10.d, 11] Net loss Balance at July 31, 2021	137,954,385 15,770,936 677,777 90,145 10,755,603 (31,168,637) (677,777) (90,145) 90,145 12,014,000 139,004 - - - - - (226,529)	162,359 (4,389,594) - 139,004 - (226,529)
	137,954,385 15,770,936 12,014,000 139,004 10,845,748 (31,395,166)	162,359 (4,477,119)
	155,426,373 16,516,329 18,028,200 247,100 10,911,748 (32,342,364) 8,000,000 257,250 8,000,000 140,000 - - - - (12,014,000) (139,004) 139,004 - - - - - - (358,249)	162,359 (4,504,828) - 397,250 - - - (358,249)
	163,426,373 16,773,579 14,014,200 248,096 11,050,752 (32,700,613)	162,359 (4,465,827)

4

The accompanying notes form an integral part of these consolidated financial statements.

iSIGN Media Solutions Inc. Condensed Consolidated Interim Statements of Loss and Comprehensive Loss For the Three Months Ended July 31, 2021 and 2020 (Unaudited) Expressed in Canadian Dollars

[Notes]	2021 2020
Revenues Sales Total revenue Cost of Sales Gross (Loss) Expenses Amortization - intangible assets [5] Depreciation – property and equipment [4] Depreciation – right of use General and administration [20] Research and development Interest Selling and marketing [19] Accretion interest [6,8] Total expenses Net loss and comprehensive loss Loss per share (basic and diluted) [13] Weighted average number common shares outstanding (basic and diluted) [13]	$- $-
	- - 4,147 4,184
	(4,147) (4,184)
	925 924 570 315 10,641 - 225,829 139,623 36,000 - 60,843 56,578 - 374 19,294 24,531
	354,102 222,345
	$ (358,249) $ (226,529)
	(0.003) (0.002) 153,635,884 133,796,654

5

The accompanying notes form an integral part of these consolidated financial statements.

iSIGN Media Solutions Inc. Condensed Consolidated Interim Statements of Cash Flows For the Three Months Ended July 31, 2021 and 2020 (Unaudited) Expressed in Canadian Dollars

[Notes]	2021 2020
Net (outflow) inflow of cash related to the following activities: Operating Net loss Adjustments for non-cash items: Depreciation – property and equipment [4] Amortization – intangible assets [5] Depreciation – right of use Accretion interest [6,8] Net change in non-cash working capital [18] Net cash used in operating activities Investing Additions to property and equipment [4] Net cash used in investing activities Financing Issuance of common shares with warrants [10.a.v] Share issuance costs [10.a.v] Retirement of bank indebtedness Advances [12.xvii] Government of Canada COVID funding [8] Net cash provided by financing activities Change in cash Cash (bank indebtedness) – beginning of year Cash (Bank Indebtedness) – end of period Cash positions consist of: Cash (defined as unrestricted bank balance) Bank indebtedness Supplemental Information: Warrants ‘issued’ in lieu of cash interest	$ (358,249) $ (226,529) 570 315 925 924 10,641 - 19,294 24,531
	(326,819) (200,759) 57,157 129,247
	$ (269,662) $ (71,512)
	$ (19,251) $-
	$ (19,251) $-
	$ 400,000 $ - (2,750) - (12,800) - - 20,000 - 40,000
	$384,450 $60,000
	$ 95,537 $ (11,512) 3,396 (7,310)
	$ 98,933 $(18,822)
	$ 98,933 $ 5,878 - (24,700)
	$ 98,933 $(18,822)
	$ - $ 139,004

6

The accompanying notes form an integral part of these consolidated financial statements.

iSIGN Media Solutions Inc. Notes to the Condensed Consolidated Interim Financial Statements For the Three Months Ended July 31, 2021 and 2020 Expressed in Canadian Dollars

1. Description of Business

iSIGN Media Solutions Inc. (“iSIGN” or the “Company”) was incorporated under the laws of Ontario on May 15, 2007. The Corporation's head office is located at 45A West Wilmot Street, Unit 3 in Richmond Hill, Ontario, L4B 2P2.

iSIGN is a data focused Software-as-a-Service (“SaaS”) company in the areas of location-based security alert messaging and proximity messaging utilizing Bluetooth® and Wi-Fi connectivity. Creators of the Smart Suite of products, a patented interactive proximity messaging technology, iSIGN enables the delivery of messages to mobile devices, with real-time reporting and analytics.

2. Going Concern

While these unaudited condensed consolidated interim financial statements have been prepared on the basis of accounting principles applicable to a going concern, certain material uncertainties and events cast significant doubt upon the validity of this assumption. As at the three-month period ended July 31, 2021, the Company has incurred significant losses since its inception in the amount of $32,700,613 (April 30, 2021 - $32,342,364). As at the threemonth period ended July 31, 2021, the Company reported a working capital deficiency of $4,214,066 (April 30, 2021 - $4,239,307) and its notes payable and convertible notes are past due.

The Company’s ability to continue as a going concern will depend on management’s ability to successfully execute its business plan and to raise capital through equity or debt financing until such time as the Company can support its activities through its own cash flow. It is not possible to predict whether financing efforts will be successful or if the Company will attain profitable levels of operation.

If the going concern assumption were not appropriate for these consolidated financial statements, adjustments would be necessary to the carrying values of assets and liabilities, the reported loss and comprehensive loss and the statement of financial position classifications used. The financial statement items most likely to be subject to adjustment would be property and equipment and intangible assets.

Novel Coronavirus (“COVID-19”)

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

3. Basis of Preparation

Statement of Compliance

These unaudited condensed interim consolidated financial statements have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting (“IAS 34”), as issued by the International Accounting Standards Board (“IASB”). They do not include all the information and footnotes required by the International Financial Reporting Standards (“IFRS”) as issued by the IASB for full annual financial statements and should be read in Conjunction with the Company’s annual financial statements for the years ended April 30, 2021 and 2020.

7

iSIGN Media Solutions Inc. Notes to the Condensed Consolidated Interim Financial Statements For the Three Months Ended July 31, 2021 and 2020 Expressed in Canadian Dollars

3. Basis of Preparation – continued

These unaudited condensed interim consolidated financial statements have been prepared on a historical basis using the accrual basis of accounting except for available-for-sale financial assets. The policies applied in these condensed consolidated financial statements are based on IFRS and IFRIC policies issued and effective as of July 31 2021.

The accounting policies and methods adopted are consistent with those disclosed in Note 4 to the Company’s consolidated financial statements for the years ended April 30, 2021 and 2020.

These unaudited condensed consolidated interim financial statements of the Company for the three months ended July 31, 2021 and 2020, were approved and authorized for issue by the Audit Committee and the Board of Directors on September 29 2021.

Basis of Measurement

These consolidated financial statements have been prepared on the basis of historical costs.

In addition, these consolidated financial statements have been prepared using the accrual basis of accounting except for cash flow information.

Functional and Presentation Currency

These consolidated financial statements are presented in Canadian dollars, which is the functional currency of the Company and its subsidiaries.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, iSIGN Media Corp., iSIGN Media Network Corp. and Pinpoint Commerce Inc.

Subsidiaries consist of entities over which the Company is exposed to, or has rights to, variable returns as well as the ability to affect those returns through the power to direct the relevant activities of the entity. Subsidiaries are fully consolidated from the date control is transferred to the Company and are de-consolidated from the date control ceases.

Intra-group balances and transactions, and any unrealized gains and losses or income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements.

Use of Estimates and Judgments

The preparation of these consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses during the reporting periods. Although these estimates are based on management's best knowledge of the amount, event or actions, actual results ultimately may differ from those estimates and these differences could be material.

Intangible assets – The Company has capitalized certain costs to internally generated intangible assets related to intellectual property development; for costs incurred for a US patent that the Company has been awarded. Judgment is required in identifying whether a particular project can be properly classified as being in the development phase or not. In addition, judgment is required in order to identify and reliably measure the expenditures attributable to these development initiatives.

8

iSIGN Media Solutions Inc. Notes to the Condensed Consolidated Interim Financial Statements For the Three Months Ended July 31, 2021 and 2020 Expressed in Canadian Dollars

3. Basis of Preparation – continued

Use of Estimates and Judgments – continued

Inventories – The Company carries inventory on its accounts at the lower of cost and net realizable value. Judgment is required to evaluate when a write-down of inventory might be necessary and is required in the evaluation of available data to determine net realizable value.

Accounts receivable – The Company carries trade accounts receivable at cost net of an allowance for expected credit losses which provides for any uncertainty of collection. Judgment is required on the evaluation of future probable events that might impact a customer’s ability or intention to make full payment of these accounts.

Provisions – Provisions necessarily involve extensive judgment about the impact that a past event may have on future outlays and what amount would be required to be recorded in the current period to adequately reflect the obligation at the end of the reporting period.

Depreciation - Depreciation is calculated to amortize the cost, less estimated residual value, of property and equipment on a declining balance or a straight-line basis over their expected useful lives. Estimates of residual value and useful lives are based on data and information from various sources including vendors, industry practice, and company-specific history (Note 4).

Amortization - Amortization is calculated to amortize the cost of intangible assets on a straight-line basis over their expected useful lives. Useful lives are based on data and information from industry practice and company-specific history (Note 5).

Impairment - The determination of whether indicators of impairment exist and the aggregation of assets into cash generating units ("CGUs") based on their ability to generate independent cash flows is subject to management’s judgment. The recoverable amounts used for impairment calculations require estimates of future cash flows related to the assets or CGUs and estimates of discount rates applied to these cash flows.

The Company reviews impairment based on the following:

Property and equipment (Note 4) - Whenever there are indicators of impairment Intangible assets (Note 5) - Whenever there are indicators of impairment

Share-based payments - Management is required to make certain estimates when determining the fair value of stock option awards, the number of awards that are expected to vest, and warrants related to deferred stock-based payments. These estimates affect the amount recognized as share-based payments in the consolidated statements of loss, and the amounts ascribed to warrants in the statements of financial position (Note 10).

9

iSIGN Media Solutions Inc. Notes to the Condensed Consolidated Interim Financial Statements For the Three Months Ended July 31, 2021 and 2020 Expressed in Canadian Dollars

3. Basis of Preparation – continued

Use of Estimates and Judgments – continued

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

Compound financial instruments – The Company has entered into convertible notes payable as described in Note 15. The fair value of the liability is estimated at the date of the transaction as the value of a similar liability that does not have an equity conversion option. Assumptions are made, and judgments are used in applying valuation techniques. Such judgement is inherently uncertain. Changes in the valuation assumptions could materially affect the fair value estimates of the liability and equity components of the convertible debentures.

Lease Discount rate for leases

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

Going concern assumption – Refer to Note 2

Contingencies – Refer to Note 15

10

iSIGN Media Solutions Inc. Notes to the Condensed Consolidated Interim Financial Statements For the Three Months Ended July 31, 2021 and 2020 Expressed in Canadian Dollars

4. Property and Equipment

	Furniture and Fixtures Computer Equipment Leasehold Improvements Total $ $ $ $
Balance April 30, 2020 Disposals Balance April 30, 2021 Additions Balance July 31, 2021 Balance April 30, 2020 Disposals Depreciation Balance April 30, 2021 Depreciation Balance July 31, 2021 Balance April 30, 2021 Balance July 31, 2021	22,599 43,557 8,733 74,889 (11,069) - - (11,069)
	11,530 43,557 8,733 63,820 11,781 - 7,470 19,251
	23,311 43,557 16,203 83,071
	14,436 42,098 8,733 65,267 (6,290) - - (6,290) 565 717 - 1,282
	8,711 42,815 8,733 60,259 107 56 407 570
	8,818 42,871 9,140 60,829
	2,819 742 - 3,561
	14,493 686 7,063 22,242

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iSIGN Media Solutions Inc. Notes to the Condensed Consolidated Interim Financial Statements For the Three Months Ended July 31, 2021 and 2020 Expressed in Canadian Dollars

5. Intangible Assets

	Cost Balance April 30, 2020 and 2021 Additions Balance July 31, 2021 Accumulated amortization Balance April 30, 2020 Amortization Balance April 30, 2021 Amortization Balance July 31, 2021 Net book value	Internally generated Patents Total $ $ 73,960 73,960 - -
		73,960 73,960
		24,439 24,439 3,698 3,698
		28,137 28,137 925 925
		29,062 29,062
		45,823 45,823
	Balance April 30,2021
	Balance July 31, 2021	44,898 44,898
	Remaining amortization period (in months)	80 to 173

6. Notes Payable

• i) On March 13, 2015, the Company entered into a secured $100,000 note with Korona Group Ltd., a company controlled by the Company’s Chief Executive Officer, at an interest rate of 8% compounded monthly, due and payable July 30, 2015. On June 29, 2015, the Company repaid $40,000 against the outstanding $100,000. The Company and the note holder have agreed to further extend the due date of the remaining $60,000 to December 31, 2018 at 8% interest compounded monthly. The note is past due at April 30 2020 and 2019 (Note 12.iv).

• ii) On August 8, 2017, the Company entered into a secured $600,700 note with Korona Group Ltd., a company controlled by the Company’s Chief Executive Officer, of which $198,700 was received during the year ended April 30, 2017 and was recorded under Advances. The note included the issuance of a 15% bonus paid in common shares of the Company, based upon the value of the note and utilizing a share price of $0.08 in lieu of cash interest payments (Note 12.xi).

12

iSIGN Media Solutions Inc. Notes to the Condensed Consolidated Interim Financial Statements For the Three Months Ended July 31, 2021 and 2020 Expressed in Canadian Dollars

6. Notes Payable - continued

On January 21, 2019, the Company and Note Holder extended the due date of the note to January 31, 2020, by the issuance of a warrant bonus of 6,007,000 warrants in lieu of future interest payments. The exercise price of the warrants is $0.10 and the expiry date is January 31, 2020 (Note 12.xi).

On June 15, 2020, the Company and Note holder extended the due date of the note to June 30, 2021 by the issuance of a warrant bonus of 12,014,000 warrants in lieu of future interest payments. The exercise price of the warrants is $0.05 and the expiry date is June 30, 2021. On June 30, 2021 these warrants expired (Note 10.d.i and 10.d.iii and 12.xi).

[Notes] Balance April 30, 2020 Accretion interest 6.(ii) Warrants issued for interest 6.(ii) Balance April 30, 2021 Accretion interest 6.(ii) Balance July 31, 2021	Amount
	$ 660,700 81,770 (98,120)
	$ 644,350 16,350
	$660,700

7. Convertible Notes Payable

• i) On May 7, 2015, the Company entered into a secured convertible promissory note in the amount of $360,000 due May 7, 2016 and bearing an interest rate of 10% per annum to 1454602 Ontario Inc., a company controlled by two shareholders, one being the Company’s Chief Executive Officer and the other being a person considered to be an insider of the Company due to diluted ownership in excess of 10% of the common shares of the Company (Note 12.v).

On May 7, 2016, the $360,000 note was replaced with a new convertible promissory note for the same amount and interest rate, due May 7, 2019, with conversion into common shares of the Company at $0.11 per share, with a warrant exercisable at $0.17 per share for a period of two years (Note 12.v).

• ii) On September 22, 2016, the Company entered into two secured convertible promissory notes in the total amount of $204,000 due September 22, 2017 and bearing an interest rate of 10% per annum, due upon maturity. One of the note holders, 1454602 Ontario Inc., is a company controlled by two shareholders, one being the Company’s Chief Executive Officer and the other being a person considered to be an insider of the Company due to diluted ownership in excess of 10% of the common shares of the Company. Both notes are convertible into common shares of the Company at $0.095, with a warrant exercisable at $0.15 per share for a period of two years (Note 12.viii).

• iii) On October 13, 2016, the Company entered into two secured convertible promissory notes in the total amount of $139,000 due October 13, 2017 and bearing an interest rate of 10% per annum, due upon maturity. One of the note holders, 1454602 Ontario Inc., is a company controlled by two shareholders, one being the Company’s Chief Executive Officer and the other being a person considered to be an insider of the Company due to diluted ownership in excess of 10% of the common shares of the Company. The other note holder, Unicare Inc., is a company partially controlled by the Company’s Chief Executive Officer. Both notes are convertible into common shares of the Company at $0.10, with a warrant exercisable at $0.15 per share for a period of two years (Note 12.ix).

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iSIGN Media Solutions Inc. Notes to the Condensed Consolidated Interim Financial Statements For the Three Months Ended July 31, 2021 and 2020 Expressed in Canadian Dollars

7. Convertible Notes Payable - continued

• iv) On October 24, 2016, the Company entered into three secured convertible promissory notes in the total amount of $225,000 due October 24, 2017 and bearing an interest rate of 10% per annum, due upon maturity. One of the note holders, Cancore Enterprise, is a company controlled by a shareholder, who is considered to be an insider of the Company due to diluted ownership in excess of 10% of the common shares of the Company. These notes are convertible into common shares of the Company at $0.12, with a warrant exercisable at $0.18 per share for a period of two years (Note 12.x).

• v) On February 28, 2018, the Company entered into a secured convertible promissory note with Korona Group Ltd., a company controlled by the Company’s Chief Executive Officer in the amount of $285,000 due February 26, 2019 and bearing an interest rate of 10% per annum, due upon maturity. The note is convertible into common shares of the Company at $0.07, with a warrant exercisable at $0.105 per share for a period of two years (Note 12.xii).

• vi) On June 27, 2018, the Company entered into a secured convertible promissory note with Korona Group Ltd., a company controlled by the Company’s Chief Executive Officer in the amount of $297,639 due June 27, 2019 and bearing an interest rate of 10% per annum, due upon maturity. The note is convertible into common shares of the Company at $0.08, with a warrant exercisable at $0.12 per share for a period of two years (Note 12.xiii).

• vii) On September 14, 2018, the Company entered into secured convertible promissory notes in the aggregate amount of $500,000 due September 14, 2019 and bearing an interest rate of 10% per annum, due upon maturity. One of the note holders, Cancore Enterprises, is a company controlled by a shareholder, who is considered to be an insider of the Company due to diluted ownership in excess of 10% of the common shares of the Company. The notes are convertible into common shares of the Company at $0.10, with a warrant exercisable at $0.15 per share for a period of two years (Note 12.xv).

[Notes] Balance April 30, 2020 and 2021 Payments Balance July 31, 2021	Amount
	$ 2,010,639 -
	$ 2,010,639

The convertible notes payable are past due as of July 31, 2021.

8. Government of Canada COVID funding

Canada Emergency Business Account (“CEBA”) funding provides interest free loans to support businesses during the Novel Coronavirus (”COVID-19”) pandemic. Under the terms of this financing, repayment of the loans on or before December 31, 2022 will result in loan forgiveness of 25% ($40,000).

If these loans are not repaid by December 31, 2022, they will be extended for an additional 3-year term bearing an interest rate of 5% per annum and maturing on December 25, 2025.

The total principal amount of $120,000 was initially measured at its fair value based on contractual cash flows and discounted using an interest rate of 20%.

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iSIGN Media Solutions Inc. Notes to the Condensed Consolidated Interim Financial Statements For the Three Months Ended July 31, 2021 and 2020 Expressed in Canadian Dollars

8. Government of Canada COVID funding - continued

Balance April 30, 2020 COVID funding COVID forgiveness Discount to estimated fair value Accretion Balance April 30, 2021 Accretion Balance July 31, 2021	Amount $ - 120,000 (40,000) (29,693) 6,992
	$ 57,299 2,944
	$ 60,243

9. Other Liabilities

During fiscal 2019, the Company transferred $302,337 of accounts payable and provisions (the “Statute-Barred Claims”) to non-current liabilities on the basis that any claims in respect of the Statute-Barred Claims were statute barred under the Limitations Act (Ontario). For accounting purposes under IFRS, a debt can only be removed from the Company’s Statement of Financial Position when it is extinguished, meaning only when the contract is discharged, cancelled or expires. The effect of the Limitations Act is to prevent a creditor from enforcing an obligation, but it does not formally extinguish the debt for accounting purposes. It is the position of the Company’s management that the Stature-Barred Claims cannot be enforced by the creditors, do not create any obligation for the Company to pay out any cash and do not affect the financial or working capital position of the Company. The Stature-Barred Claims are required to be reflected on the Company’s Statement of Financial Position as a result of the current interpretation of IFRS, but they are classified as long-term liabilities since the Company has no intention to pay these Stature-Barred Claims and the creditors cannot enforce their payment. While inclusion of these items is intended solely to comply with the IFRS requirements, the Company in no way acknowledges any of the Stature-Barred Claims.

10. Share Capital

a. Common Shares

Common shares issued

[Notes] Balance April 30, 2020 Issuance in exchange for debt 10.a.(i) Issuance in exchange for cash 10.a.(ii) Issuance in exchange for cash 10.a.(iii) Issuance in exchange for cash 10.a.(iv) Cost of share issuances Balance April 30, 2021 Issuance in exchange for cash 10.a.(v) Cost of share issuances Balance July 31, 2021	Number Amount
	137,954,385 $ 15,770,936 11,457,788 572,889 1,280,000 41,906 2,134,000 69,256 2,600,200 81,452 - (20,110)
	155,426,373 $ 16,516,329 8,000,000 260,000 - (2,750)
	163,426,373 $ 16,773,579

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iSIGN Media Solutions Inc. Notes to the Condensed Consolidated Interim Financial Statements For the Three Months Ended July 31, 2021 and 2020 Expressed in Canadian Dollars

10. Share Capital - continued

a. Common Shares

• i. On August 6, 2020, the Company completed a shares for debt transaction by issuing 11,457,788 shares at a price of $0.05 in settlement of interest charges, totaling $572,889, with the shares valued at the amount of the debt that was settled (Note 12.xix).

• ii. On November 30, 2020, the Company completed a private placement with the Company’s former Chief Executive Officer of 1,280,000 units comprised of one common share and one common share warrant priced at $0.05, with each warrant exercisable at $0.075 for a period of two years, for proceeds of $64,000 (common share fair value of $41,906 and warrant fair value of $22,094) less the cost of issuance for a net cash flow of $62,930 (Note 12.xviii).

• iii. On January 14 and 26, 2021, the Company completed a private placement of 2,134,000 units comprised of one common share and one common share warrant priced at $0.05, with each warrant exercisable at $0.075 for a period of two years, for proceeds of $106,700 (common share fair value of $69,256 and warrant fair value of $37,444) less the cost of issuance for a net cash flow of $104,766 (Note 12.xx).

• iv. On February 17 and 24, 2021, the Company completed a private placement of 2,600,200 units comprised of one common share and one common share warrant priced at $0.05, with each warrant exercisable at $0.075 for a period of two years, for proceeds of $130,010 (common share fair value of $81,452 and warrant fair value of $48,558) less the cost of issuance for a net cash flow of $116,268 (Note 12.xxi).

• v. On June 3, 2021, the Company completed a private placement of 8,000,000 units comprised of one common share and one common share warrant priced at $0.05, with each warrant exercisable at $0.075 for a period of two years, for proceeds of $106,700 (common share fair value of $260,000 and warrant fair value of $140,000) less the cost of issuance for a net cash flow of $397,250.

b. Compensation Based Options

On January 18, 2019, the shareholders of the Company ratified a Stock Option Plan (the “Plan”) which is administered by the directors of the Company. Under the Plan, the Company may grant to directors, officers, employees and consultants’ options to purchase shares of the Company. The Plan provides for the issuance of stock options to acquire up to 10% of the Company’s issued and outstanding common shares. The Plan is a rolling plan such that the number of shares reserved for issuance will increase as the Company’s issued and outstanding common shares increases. Options granted under the Plan are exercisable for a period up to five years, as determined by the Board, from the date of the grant. The exercise price of the options shall be determined by the Board at the time of the grant but shall not be less than the Discounted Market Price as set by the TSX Venture Exchange Policy 1.1 as amended from time to time. The options are subject to several vesting periods as outlined in the Plan.

The granting of options is subject to the following conditions: (a) not more than 10% of the outstanding issue of the shares may be reserved for the granting of options to insiders; (b) not more than 10% of the outstanding issue of the shares may be reserved for the granting of options to insiders or issued to insiders within any one year period; (c) not more than 5% of the issued and outstanding common shares may be granted to any one individual in a one year period; (d) not more than 2% of the issued and outstanding common shares may be granted to any one consultant in any one-year period; and (e) not more than an aggregate 2% of the issued and outstanding common shares may be granted to an employee conducting investor relations activities in any one-year period.

16

iSIGN Media Solutions Inc. Notes to the Condensed Consolidated Interim Financial Statements For the Three Months Ended July 31, 2021 and 2020 Expressed in Canadian Dollars

10. Share Capital - continued

c. Stock Options

A summary of the stock options outstanding and exercisable under the plan as of July 31, 2021 and April 30, 2021 and changes during the three and twelve-month periods are as follows:

Options outstanding at April 30, 2020 Expired Options outstanding at April 30, 2021 and July 31, 2021 Options exercisable at April 30, 2020 Vested during the year Expired during the year Options exercisable at April 30, 2021 Vested during the period Options exercisable at July 31, 2021	Options	Weighted Price
	4,300,000 (1,000,000)	$ 0.14 0.26
	3,300,000	$0.10
	Options 2,466,668 933,332 (1,000,000) 2,400,000 - 2,400,000	Weighted Price
		$ 0.18
		0.10
		0.26
		$ 0.12
		-
		$ 0.12

The following table summarizes additional disclosures on the stock options outstanding at July 31, 2021:

Exercise Price	Options Outstanding	Options Outstanding	Options Exercisable Number Remaining Average Fair Value at Time of Issue Expensed to Outstanding Life(Mths) Notyet Expired 31-July-21	Options Exercisable Number Remaining Average Fair Value at Time of Issue Expensed to Outstanding Life(Mths) Notyet Expired 31-July-21	Not Expensed at 31-July-21
	Number Outstanding	Remaining Average Life(Mths)	Number Outstanding
$ 0.15 0.10 0.10 0.10	250,000 350,000 400,000 2,300,000	12.5	250,000 350,000 266,666 1,533,334	12.5 $ 6,250 $ 6,250 29.5 24,500 24,500 38.5 30,000 20,000 40.0 161,000 107,334	$ - - 10,000 53,666
		29.5
		38.5
		40.0
	3,300,000		2,400,000	$221,750 $158,087	$63,666

The 2,700,000 options granted in the year ended April 30, 2020 vest one-third on the date of grant; one-third on the first anniversary of their grant and one-third on the second anniversary of their grant.

The Company has an additional 500,000 options owing to officers to be issued at a later date (April 30, 2021 – 500,000).

17

iSIGN Media Solutions Inc. Notes to the Condensed Consolidated Interim Financial Statements For the Three Months Ended July 31, 2021 and 2020 Expressed in Canadian Dollars

10. Share Capital – continued

d. Warrants

. Warrants
[Notes] Balance April 30, 2020 Issuance of warrants in private placements 10.a.(ii), (iii), (iv) Issuance of warrants as a bonus 10.d.(i) Expiry of warrants 10.d (ii) Balance April 30, 2021 Issuance of warrants in private placements 10.a.(v) Expiry of warrants 10.d.(iii) Balance July 31, 2021	Warrants Number Amount
	677,777 $ 90,145 6,014,200 108,096 12,014,000 139,004 (677,777) (90,145)
	18,028,200 $ 247,100 8,000,000 140,000 (12,014,000) (139,004)
	14,014,200 $ 248,096

i. On June 15, 2020, the Company entered into an agreement with Korona Group Inc., a company controlled by the Company’s Chief Executive Officer, to extend the due date of a $600,700 loan to June 30, 2021 and issued a warrant bonus of 12,014,000 warrants in lieu of future interest payments. The exercise price of the warrants is $0.05, with an expiry date of June 30, 2021. (Note 6.ii and 12.xi).

• ii. On May 11, 2020, 677,777 warrants valued at $90,145 expired without being exercised and their value was transferred to contributed surplus.

• iii. On June 30, 2021, 12,014,000 warrants valued at $139,004 expired without being exercised and their value was transferred to contributed surplus (Note 6.ii and 12.xi).

The following table summarizes information about stock warrants outstanding at July 31, 2021:

Issue Date Number of Warrants Outstanding 30-Nov-20 1,280,000 14-Jan-21 1,734,000 26-Jan-21 400,000 17-Feb-21 600,200 24-Feb-21 2,000,000 3-June-21 8,000,000	Weighted Average Exercise Price Expiry Date Weighted Average Remaining Life (months) $ 0.075 30-Nov-22 16.0 0.075 14-Jan-23 17.5 0.075 26-Jan-23 18.0 0.075 17-Feb -23 18.5 0.075 24-Feb-23 19.0 0.075 3-June-23 22.0
14,014,200	$0.075

18

iSIGN Media Solutions Inc. Notes to the Condensed Consolidated Interim Financial Statements For the Three Months Ended July 31, 2021 and 2020 Expressed in Canadian Dollars

11. Contributed Surplus

Contributed surplus resulted from the following:

ontributed surplus resulted from the following:
[Notes] Balance at April 30, 2020 Amounts resulting from share-based compensation 10.c. Ascribed value of expired warrants 10.d.(ii) Balance at April 30, 2021 Ascribed value of expired warrants 10.d. (iii) Balance at July 31, 2021	Amount
	$ 10,755,603 66,000
	90,145
	$ 10,911,748 139,004
	$ 11,050,752

12. Related Party Transactions and Balances

During the fiscal years 2021 and to date for 2022, the Company entered into the following related party transactions. The outstanding amounts included in accounts payable and accrued liabilities are unsecured, non-interest bearing with no fixed terms of repayment.

• i. Recorded the fees of the Strategic Advisor to the Chief Executive Officer, formerly iSIGN’s Interim Chief Executive Officer, to a company owned by him. During the three months ended July 31, 2021, the Company expensed fees totaling $49,636 (July 31, 2020 - $18,938) and fixed allowances of $Nil (July 31, 2020 – $740). The amount outstanding in trade accounts payable at July 31, 2021 was $74,334 (July 31, 2020 - $6,300).

• ii. Recorded the fees of the Company’s former Chief Financial Officer to a company controlled by him. During the three months ended July 31, 2021, the Company expensed fees totaling $9,000 (July 31, 2020 - $9,000). The amount outstanding in trade accounts payable at July 31, 2021 was $3,390 (July 31, 2020 - $6,780).

• iii. Recorded fees for strategic consulting services to a company controlled by one of the Company’s former Directors. During the three months ended July 31, 2021, the Company expensed fees totaling $7,454 (July 31, 2020 - $Nil). The amount outstanding in trade accounts payable at July 31, 2021 was $1,767 (July 31, 2020 - $Nil).

• iv. On March 13, 2015, the Company entered into a secured $100,000 note with Korona Group Ltd., a company controlled by the Company’s Interim Chief Executive Officer, at an interest rate of 8% compounded monthly, due and payable July 30, 2015. On June 15, 2015, the Company repaid $40,000 to the note holder. The Company and the note holder agreed to extend the $60,000 note to December 31, 2018. Total interest expense on the note for the three months ended July 31, 2021 amounted to $1,304 (July 31, 2020 - $1,638) and the accrued interest payable included in accounts payable at July 31, 2021 was $4,300 (July 31, 2020 - $11,430) (Note 6.i).

• v. On May 7, 2015, the Company issued a secured convertible promissory note in the amount of $360,000, due May 7, 2016 and bearing an interest rate of 10% to 1454602 Ontario Inc., a company controlled by two shareholders, one being the Company’s Interim Chief Executive Officer and the other being a person formerly considered to be an insider of the Company due to diluted ownership in excess of 10% of the common shares of the Company (Note 7.i).

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iSIGN Media Solutions Inc. Notes to the Condensed Consolidated Interim Financial Statements For the Three Months Ended July 31, 2021 and 2020 Expressed in Canadian Dollars

12. Related Party Transactions and Balances - continued

Effective May 7, 2016, this note was replaced with a new convertible promissory note for the same amount and interest rate, due May 7, 2019. Total interest expense for these notes for the three months ended July 31, 2021, amounted to $9,074 (July 31, 2020 - $9,074) and the accrued interest payable included in accounts payable at July 31, 2021 was $102,225 (July 31, 2020 – $72,892) (Note 7.i).

• vi. During the three months ended July 31, 2021, the Company recorded directors’ fees of $12,000 (July 31, 2020 – $12,000). Included in accounts payable and accrued liabilities are unpaid directors’ fees at July 31, 2021 of $108,892 (July 31, 2020 – $148,025). These fees are non-interest bearing, are unsecured and have no fixed term for repayment.

• vii. Contracted with QDAC Inc., a company in which the Company’s Interim Chief Executive Officer is a minority owner, to undertake the manufacture of the Company’s hardware. The amount outstanding in trade accounts payable at July 31, 2021 was $463,828 (July 31, 2020- $415,518). Included in trade accounts payable at July 31, 2021 are late payment fees of $463,828 (July 31, 2020 - $415,518), of which late payments charges of $20,552 (July 31, 2020 - $19,242) are recorded in Office costs under General and Administration. This debt is non-interest bearing, unsecured and has no fixed term for repayment.

• viii. On September 22, 2016, the Company entered into a $79,000 secured convertible promissory note, with 1454602 Ontario Inc., a company controlled by two shareholders, one being the Company’s Interim Chief Executive Officer and the other being a person formerly considered to be an insider of the Company due to diluted ownership in excess of 10% of the common shares of the Company. The note, due September 22, 2017, bears an interest rate of 10%, is convertible at $0.095 per share, with a warrant priced at $0.15 exercisable for a period of two years from date of conversion. Total interest expense on the Note for the three months ended July 31, 2021 amounted to $1,991 (July 31, 2020 - $1,991) and the accrued interest payable included in accounts payable at July 31, 2021 was $10,562 (July 31, 2020 - $13,181) (Note 7.ii).

• ix. On October 13, 2016, the Company entered into 2 secured convertible promissory notes, totaling $139,000 due October 13, 2017, bearing an interest rate of 10%, is convertible at $0.10 per share, with a warrant priced at $0.15 exercisable for a period of two years from date of conversion. One of the note holders, 1454602 Ontario Inc., is a company controlled by two shareholders, one being the Company’s Interim Chief Executive Officer and the other being a person formerly considered to be an insider of the Company due to diluted ownership in excess of 10% of the common shares of the Company. The other note holder, Unicare Inc., is a company partially controlled by the Company’s Interim Chief Executive Officer. Total interest expense on these Notes for three months ended July 31, 2021, amounted to $3,504 (July 31, 2020 - $3,504) and the accrued interest payable included in accounts payable at July 31, 2021 was $18,584 (July 31, 2020 - $23,192) (Note 7.iii).

• x. On October 24, 2016, the Company entered into a $75,000 secured convertible promissory note with Cancore Enterprise, a company controlled by a shareholder, who was formerly considered to be an insider of the Company due to diluted ownership in excess of 10% of the common shares of the Company. The note due October 31, 2017, bears an interest rate of 10% per annum, is convertible at $0.12 per share, with a warrant priced at $0.18 exercisable for a period of two years from date of conversion. Total interest expense on the Note for the three months ended July 31, 2021, amounted to $1,890 (July 31, 2020 - $1,890) and the accrued interest payable included in accounts payable at July 31, 2021 was $10,027 (July 31, 2020 - $12,514) (Note 7.iv).

20

iSIGN Media Solutions Inc. Notes to the Condensed Consolidated Interim Financial Statements For the Three Months Ended July 31, 2021 and 2020 Expressed in Canadian Dollars

12. Related Party Transactions and Balances - continued

• xi. On September 5, 2017, the Company converted advances received during the period of February to August 2017 into a promissory note with Korona Group Ltd., a company controlled by the Company’s Interim Chief Executive Officer, in the amount of $600,700. The note matured on August 31, 2018. A share bonus of 1,126,312 common shares was issued by the Company in lieu of interest payments in 2018. The bonus was calculated as being 15% of the note and convertible into shares at a conversion rate of $0.08 (Note 6.ii).

On January 21, 2019, the Company and Note holder agreed to extend this note to January 31, 2020. A warrant bonus of 6,007,000 warrants was issued by the Company in lieu of interest payments. The exercise price of the warrants was $0.10, with an expiry date of January 31, 2020 (Notes 6.ii).

On October 18, 2019 and January 24, 2020, 2,560,000 of these warrants were exercised. The remaining 3,447,000 warrants expired on January 31, 2020.

On June 15, 2020, the Company and Note holder agreed to extend this note to June 30, 2021. A warrant bonus of 12,014,000 warrants was issued by the Company in lieu of future interest payments. The exercise price of the warrants is $0.05, with an expiry date of June 30, 2021 and cannot be extended. These warrants expired on June 30, 2021 (Note 6.ii, 10.d.i and 10.d.iii).

• xii. On February 28, 2018, the Company converted advances received during the period of August 2017 to January 2018 into a convertible promissory note with Korona Group Ltd., a company controlled by the Company’s Interim Chief Executive Officer, in the amount of $285,000. The note matured on February 26, 2019, is convertible at $0.07 a share, with a warrant priced at $0.105 for two years from the date of conversion. Total interest expense on the Note for the three months ended July 31, 2021, amounted to $7,184 (July 31, 2020 - $7,184) and the accrued interest payable included in accounts payable at July 31, 2021 was $38,104 (July 31, 2020 - $79,929) (Note 7.v).

• xiii. On June 27, 2018, the Company entered into a secured convertible promissory note with Korona Group Ltd., a company controlled by the Company’s Interim Chief Executive Officer in the amount of $297,639 that matured June 27, 2019, bearing an interest rate of 10% per annum, due upon maturity. Included in this note were advances received during March 2018. The note is convertible into common shares of the Company at $0.08, with a warrant exercisable at $0.12 per share for a period of two years. Total interest expense on the Note for the three months ended July 31, 2021 amounted to $7,502 (July 31, 2020 - $7,502) and the accrued interest payable included in accounts payable at July 31, 2021 was $39,794 (July 31, 2020 - $64,993) (Note 7vi).

• xiv. During July 2018, the Company received advances of $150,000 from Korona Group Ltd., a company controlled by the Company’s Interim Chief Executive Officer. Total interest expense on the advance for the three months ended July 31, 2021, amounted to $3,781 (July 31, 2020 - $3,781) and the accrued interest payable included in accounts payable at July 31, 2021 was $20,055 (July 31, 2020 - $30,945).

21

iSIGN Media Solutions Inc. Notes to the Condensed Consolidated Interim Financial Statements For the Three Months Ended July 31, 2021 and 2020 Expressed in Canadian Dollars

12. Related Party Transactions and Balances - continued

• xv. On September 14, 2018, the Company entered into a $300,000 secured convertible promissory note with Cancore Enterprises, a company controlled by a shareholder, who was formerly considered to be an insider of the Company due to diluted ownership in excess of 10% of the common shares of the Company. The note matured September 14, 2019 and bears an interest rate of 10% per annum, due upon maturity. The note is convertible into common shares of the Company at $0.10, with a warrant exercisable at $0.15 per share for a period of two years. Total interest expense on the note for the three months ended July 31, 2021 amounted to $7,562 (July 31, 2020 - $7,562) and the accrued interest payable included in accounts payable at July 31, 2021 was $40,110 (July 31, 2020 - $57,288) (Note 7.vii).

• xvi. During the year ended April 30, 2020, the Company received advances of $158,000 from 1454602 Ontario Inc., a company controlled by two shareholders, one being the Company’s Interim Chief Executive Officer and the other being a person formerly considered to be an insider of the Company due to diluted ownership in excess of 10% of the common shares of the Company. Total interest expense on the advances for the three months ended July 31, 2021, amounted to $2,722 (July 31, 2020 - $2,722) and the accrued interest payable included in accounts payable at July 31, 2021 was $14,439 (July 31, 2020 - $3,777).

• xvii. On July 7, 2020, the Company received an advance of $20,000 from its Interim Chief Executive Officer. Total interest expense on the advance for the three months ended July 31, 2021, amounted to $504.10 (July 31, 2020, - $139) and the accrued interest payable included in accounts payable at July 31, 2021 was $2,641 (July 31, 2020 - $139).

• xviii. During August 2020, the Company received advances of $42,672 from its Interimr Chief Executive Officer. Total interest expense on the advance for the three months ended July 31, 2021, amounted to $Nil (July 31, 2020 - $Nil) and the accrued interest payable included in accounts payable at July 31, 2021 was $Nil (July 31, 2020 - $Nil).

On November 30, 2020, these advances were converted into a $64,000 private placement with the Company’s Interim Chief Executive Officer. This placement was completed by the Company issuing 1,280,000 shares and 1,280,000 warrants at a price of $0.05, with a warrant exercise price of $0.075 (Note 10.a.ii).

• xix. On August 5 and 10, 2020, the Company completed a shares for debt transaction by issuing 8,683,758 common shares at a price of $0.05 to various companies that are either wholly or partially owned and controlled by the Company’s Interim Chief Executive Officer and another shareholder, who was formerly considered to be an insider of the Company due to diluted ownership in excess of 10% of the common shares of the Company (Note 10.a.i).

• xx. On January 14, 2021, the Company completed a private placement of 2,134,000 units priced at $0.05. Among the participants in this placement was the Company’s Strategic Advisor to the Chief Executive Officer who contributed $21,700 in exchange for 434,000 shares and 434,000 warrants (Note 10.a.iii).

• xxi. On February 24, 2021, the Company completed a private placement of 2,600,200 units priced at $0.05. Among the participants in this placement was a son of the Company’s Strategic Advisor to the Chief Executive Officer who contributed $10,000 in exchange for 200,000 shares and 200,000 warrants (Note 10.a.iv).

22

iSIGN Media Solutions Inc. Notes to the Condensed Consolidated Interim Financial Statements For the Three Months Ended July 31, 2021 and 2020 Expressed in Canadian Dollars

12. Related Party Transactions and Balances - continued

xxii. Compensation of key management personnel and board of directors:

Wages and director fees Benefits Share based compensation (non-cash)	For the three months ended July 31, 2021 2020
	$ 78,090 $ 39,938 - 740 - -
	$ 78,090 $ 40,678

13. Loss per Share

Basic loss per share is calculated on the basis of the weighted average number of common shares outstanding for the period, which, for the three-month period ended July 31, 2021, amounted to 153,635,884 (July 31, 2020 – 133,796,654). For the periods presented, all stock options, warrants and convertible notes payables are anti-dilutive, therefore diluted loss per share is equal to the basic loss per share.

The following instruments have been excluded from the diluted earnings per share as these instruments are antidilutive:

	For the three months	ended July 31,
	2021	2020
Issued stock options	3,300,000	3,300,000
Issued warrants	14,014,200	12,014,000
	17,314,200	15,314,000

14. Financial Instruments and Risk Management

The fair value of a financial instrument is the amount of consideration that would be agreed upon in an arm's length transaction between knowledgeable and willing parties who are under no compulsion to act. When the independent prices are not available, fair values are determined using valuation techniques that refer to observable market data.

These techniques include comparisons with similar instruments where market observable prices exist, discounted cash flow analysis, and other valuation techniques commonly used by market participants.

Fair value

The Company uses the following methods and assumptions to estimate the fair value of each class of financial instruments:

The carrying amounts of cash, restricted cash, accounts receivable, other receivables, bank and government indebtedness, accounts payable and accrued liabilities, notes payable, convertible note payable and advances approximate fair value due to the short-term maturity of these financial instruments.

The Company had no financial instruments to classify within the fair value hierarchy as at July 31, 2021 and 2020.

23

iSIGN Media Solutions Inc. Notes to the Condensed Consolidated Interim Financial Statements For the Three Months Ended July 31, 2021 and 2020 Expressed in Canadian Dollars

14. Financial Instruments and Risk Management - continued

Interest rate risk

The Company has cash and restricted cash balances with rates that fluctuate with the prevailing market rate. The Company’s current policy is to invest excess cash in cash accounts or short-term interest-bearing securities issued by Canadian chartered banks. The Company periodically monitors the investments it makes and is satisfied with the credit ratings of its banks. The Company’s notes payable and convertible notes payable bear interest at fixed interest rates.

Credit risk

Credit risk is the risk of financial loss associated with the counterparty’s inability to fulfill its payment obligations in accordance with the terms and conditions of its contract with the Company. Credit risk arises from cash and deposits with banks as well as credit exposure to outstanding receivables.

The Company’s credit risk arises primarily from the Company’s trade receivable. The carrying amount of financial assets represents the maximum credit exposure to the Company. The Company’s exposure to trade credit risk as at July 31, 2021 was $NIL (April 30, 2021 - $Nil) net of allowances.

The Company may also have credit risk relating to cash and restricted cash, of $98,933 and $10,000 (April 30, 2021 - $3,396 and $10,000), respectively, which it manages by dealing with highly rated financial institutions.

Liquidity risk

Liquidity risk is the risk that the Company will experience difficulty in meeting its obligations that are associated with financial liabilities. The Company’s approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet financial obligations when they fall due, from its funding sources, such as equity and debt issuances. The Company continues to actively pursue new equity financing to ensure that it will have funds available to meet liabilities when they fall due.

The following table represents the Company’s financial liabilities identified by type and future contractual dates of payment:

Bank Indebtedness Trade accounts payable and accrued liabilities Advances Notes payable Convertible notes payable Government of Canada COVID funding Lease obligation	Under 1 – 3 Total 1 Year Years	After 3 Years
	$ - $ - $ - 1,352,719 1,352,719 - 328,000 328,000 - 660,700 660,700 - 2,010,639 2,010,639 - 120,000 - 120,000 95,623 43,536 52,087	$ - - - - - -
	$ 4,567,682 $ 4,395,594 $ 172,087	$ -

24

iSIGN Media Solutions Inc. Notes to the Condensed Consolidated Interim Financial Statements For the Three Months Ended July 31, 2021 and 2020 Expressed in Canadian Dollars

15. Commitments and Contingencies

Rental and operating leases

The Company entered into a new thirty-six (36) month office contact effective October 1, 2020. At inception of this contract, the Company assessed that the contract contained a lease under the new IFRS 16 standards. At commencement, the Company recognized the right-of-use-asset and lease liability based on the present value of the lease payments discounted by the Company’s incremental borrowing rate. A depreciation charge for right-of-use assets is recorded in depreciation and an interest expense on lease obligations is recorded in interest expense in the consolidated statements of loss and comprehensive loss.

Balance at April 30, 2020 Additions Amortization Payments Interest Balance at April 20, 2021 Amortization Payments Interest Balance at July 31, 2021 Current Non-Current	Right-of-use Asset Lease Obligations
	$ - $ - 127,688 127,688 (21,281) - - (26,542) - 4,066
	$ 106,407 $ 105,212 (10,641) - - (11,375) - 1,786
	95,766 $95,623
	$ - $ 43,536
	$ - $ 52,087

The Company is party to certain contracts which contain minimum commitments of approximately $106,400 payable in fiscal 2022.

Contingencies and provisions

From time to time, the Company enters into software licensing agreements with a client/business partners whereby the Company has agreed to indemnify the counterparties for liabilities that may arise during the terms of the agreements. The maximum amount of any potential future payment cannot be reasonably estimated and it is not practicable to estimate the financial effects on its consolidated financial statements.

In the ordinary course of business, the Company and its subsidiaries are involved in legal claims and counter claims, as defendants or plaintiffs. The Company has evaluated its legal actions and has estimated potential settlements and legal costs based on the current information and have accrued a provision based on management's estimate of potential outcomes. It is management's opinion that any additional liability to the Company that may arise from these matters will not have a material effect upon the operating results, financial position or cash flows of the Company.

25

iSIGN Media Solutions Inc. Notes to the Condensed Consolidated Interim Financial Statements For the Three Months Ended July 31, 2021 and 2020 Expressed in Canadian Dollars

16. Subsequent Events

• i. On August 27, 2021, the Company completed a shares for debt transaction by issuing 2.2 million units comprised of one common share and one warrant priced at $0.05, with each warrant exercisable at $0.075, in settlement of $110,000 of debenture debt.

• ii. On September 3, 2021, the Company completed a private placement by issuing 16,650,200 units, comprised of one common share and one warrant priced at $0.05, with each warrant exercisable at $0.075 for gross proceeds of $832,510.

17. Capital Management

The Company considers that its capital is synonymous with the value of convertible notes payable, bank indebtedness and shareholders’ equity (deficiency).

The total of these items was as follows:

Convertible note payables Bank indebtedness Shareholders’ (deficiency)	July 31, 2021 April 30, 2021
	$ 2,010,639 $ 2,010,639 - (12,800) (4,465,827) (4,504,364)
	$ (2,455,188) $ (2,506,525)

The Company manages its capital structure and makes adjustments to it in light of general economic conditions and the risk characteristics of the underlying assets and the Company’s working capital requirements. In order to maintain or adjust the capital structure, the Company, upon approval from its Board of Directors, may issue longterm debt, convertible notes, issue shares or repurchase shares through a normal course issuer bid. The Board of Directors reviews and approves any material transactions not in the ordinary course of business which may include various acquisition proposals, as well as capital and operating budgets. The Company is not subject to any externally imposed capital requirements. There were no significant changes in the Company’s approach to capital management during the three-month period ended July 31, 2021 or the fiscal year ended April 30, 2021.

The Company is not subject to any capital requirements imposed by a lending institution or regulatory body, other than of the TSX Venture (“TSX-V”) which requires adequate working capital or financial resources of the greater of (i) $50,000 and (ii) an amount required to maintain operations and cover general and administrative expenses for a period of six months. As of July 31 2021, the Company may not be compliant with the policies of the TSX-V. The impact of this violation is not known and is ultimately dependent on the discretion of the TSX-V.

26

iSIGN Media Solutions Inc. Notes to the Condensed Consolidated Interim Financial Statements For the Three Months Ended July 31, 2021 and 2020 Expressed in Canadian Dollars

18. Net Change in Non-Cash Working Capital

Net change in non-cash working capital balances: Accounts receivable Other receivables and sales taxes recoverable Inventory Prepaid expenses and deposits Accounts payable and accrued liabilities Asset retirement obligations	For the three months ended July 31, 2021 2020
	$ - $ (13) 1,185 (5,331) - - (9,000) (2,474) 74,561 137,065 (9,589)
	$ 57,157 $ 129,247

19. Selling and Marketing

Other Total - Selling and marketing	For the three months ended July 31, 2021 2020	For the three months ended July 31, 2021 2020
	$- 100.0% $374	100.0%
	$ - 100.0% $ 374	100.0%

20. General and Administration

Salaries Benefits Contractual services Travel and auto Office costs Occupancy and operating costs Professional Consulting Directors' fees Other (income) expense Total - General and administration	For the three months ended July 31, 2021 2020	For the three months ended July 31, 2021 2020
	$ 21,330 9.5% $ 16,854 909 0.4% 659 82,965 36.7% 48,648 143 0.1% 755 47,010 20.8% 38,510 7,967 3.5% 15,683 26,194 11.6% 22,605 7,454 3.3% - 12,000 5.3% 12,000 19,857 8.8% (16,091)	12.1% 0.5% 34.8% 0.5% 27.6% 11.2% 16.2% -% 8.6% (11.5%)
	$ 225,829 100.0% $ 139,623	100.0%

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