Jasper Commerce Inc. — Audit Report / Information 2023

Nov 29, 2023

Jasper Commerce Inc.

Audited Consolidated Financial Statements

For the years ended July 31, 2023 and 2022

(Expressed in Canadian Dollars)

To the Shareholders of Jasper Commerce Inc.:

Opinion

We have audited the consolidated financial statements of Jasper Commerce Inc. and its subsidiary (the "Company"), which comprise the consolidated statements of financial position as at July 31, 2023 and July 31, 2022, and the consolidated statements of loss and comprehensive losschanges in shareholders' equity, and cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as at July 31, 2023 and July 31, 2022, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with International Financial Reporting Standards.

Basis for Opinion

We conducted our audits in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audits of the consolidated financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material Uncertainty Related to Going Concern

We draw attention to Note 1 in the consolidated financial statements, which indicates that the Company is dependent upon its ability to obtain additional financing to support its operations or to generate sufficient and sustained cash flows from its operating activities. As stated in Note 1, these events or conditions, along with other matters as set forth in Note 1, indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Except for the matter described in the Material Uncertainty Related to Going Concern section, we have determined that there are no key audit matters to communicate in our report.

Other Information

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

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

In connection with our audits of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audits or otherwise appears to be materially misstated. We obtained Management's Discussion and Analysis prior to the date of this auditor's report. If, based on the work we have performed on this other information, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

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

In preparing the consolidated financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

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

• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audits and significant audit findings, including any significant deficiencies in internal control that we identify during our audits.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partner on the audit resulting in this independent auditor's report is Andrew Kevin Spidle.

Mississauga, Ontario Chartered Professional Accountants

November 27, 2023 Licensed Public Accountants

Jasper Commerce Inc. Consolidated Statements of Financial Position As at July 31, 2023 and 2022 (in Canadian Dollars)

	Note	2023	2022
Assets
Current assets:
Cash and cash equivalents		$142,853	$2,315,762
Accounts receivable	13	85,227	226,593
Government tax and subsidy receivable	17	104,900	385,255
Contract assets		508	20,598
Prepaid expenses and deposits		74,638	222,412
		408,126	3,170,620
Non-current assets:
Contract assets		-	1,888
Furniture and equipment	4	32,575	77,712
		$ 440,701	$ 3,250,220
Liabilities
Current liabilities:
Accounts payable and accrued liabilities		$ 606,104	$ 778,401
Contract liabilities		54,355	101,646
Loans	5	152,360	133,385
		812,819	1,013,432
Non-current liabilities:
Contract liabilities		28,874	48,974
Loans	5,17	60,995	180,040
Convertible debentures	6	567,476	-
		1,470,164	1,242,446
Shareholders' deficiency:
Share capital	7	14,671,804	14,671,804
Options reserve	8	606,210	725,256
Warrants reserve	8	2,902,412	2,754,415
Conversion feature reserve	6	77,829	-
Accumulated deficit		(19,287,718)	(16,143,701)
		(1,029,463)	2,007,774
		$ 440,701	$ 3,250,220

Nature of operations and going concern (see Note 1) Subsequent events (see Note 19) Approved by: Approved by: "Mag Saad" "Jeffrey Klam" Mag Saad, Director Jeffrey Klam, Director

Jasper Commerce Inc. Consolidated Statements of Loss and Comprehensive Loss For the years ended July 31, 2023 and 2022 (in Canadian Dollars)

	Note	2023	2022
Revenues	15	$ 1,439,824	$ 1,679,089
Expenses
General and administrative		1,656,561	2,455,461
Research and development		940,219	1,010,519
Selling and marketing		1,075,276	1,342,048
Hosting		375,029	324,680
Customer support		615,348	1,003,447
Stock-based compensation	8	111,837	441,000
Depreciation		48,943	21,855
Foreign exchange loss		6,058	9,410
Finance costs	16	63,579	2,956,708
		4,892,850	9,565,128
Net loss before income tax		(3,453,026)	(7,886,039)
Income taxrecovery	14	78,126	-
Net loss and comprehensive loss		$ (3,374,900)	$ (7,886,039)
Basic and diluted loss per share		$ (0.06)	$ (0.19)
Weighted average number of common shares -diluted	basic and	58,079,619	41,172,599

Jasper Commerce Inc. Consolidated Statements of Changes in Shareholders' Equity (Deficiency) For the years ended July 31, 2023 and 2022 (in Canadian Dollars)

		Number ofcommon		Options	Warrants	Conversionfeature	Accumulated
	Note	shares	Share capital	reserve	reserve	reserve	deficit	Total
Balance, August 1, 2022		58,079,619	$ 14,671,804	$ 725,256	$ 2,754,415	$ -	$ (16,143,701)	$ 2,007,774
Stock based compensation		-	-	111,837	-	-	-	111,837
Stock options expired unexercised		-	-	(230,883)	-	-	230,883	-
Debenture conversion feature, net of costs and tax	6	-	-	-	-	77,829	-	77,829
Warrants issued with debentures, net of costs and tax	6	-	-	-	138,860	-	-	138,860
Finders' warrants issued with debentures	6	-	-	-	9,137	-	-	9,137
Comprehensive loss for the year		-	-	-	-	-	(3,374,900)	(3,374,900)
Balance, July 31, 2023		58,079,619	$ 14,671,804	$ 606,210	$ 2,902,412	$ 77,829	$ (19,287,718)	$ (1,029,463)

		Number ofCommon		Options	Warrants	ConversionFeature	Accumulated
	Note	Shares	Share capital	Reserve	Reserve	Reserve	Deficit	Total
Balance, August 1, 2021		27,069,258	$ 4,220,507	$ 342,458	$ 778,488	$ -	$ (8,315,864)	$ (2,974,411)
Surrender of shares	7	(34,870)	(15,000)	-	-	-	-	(15,000)
Reverse takeover	3	7,940,784	3,181,567	-	34,676	-	-	3,216,243
Debenture conversion	3	11,104,447	3,145,695	-	-	-	-	3,145,695
Warrant liability	8	-	-	-	701,432	-	-	701,432
Private placement	3,7	12,000,000	4,139,035	-	1,239,819	-	-	5,378,854
Stock based compensation		-	-	441,000	-	-	-	441,000
Stock options expired unexercised		-	-	(58,202)	-	-	58,202	-
Comprehensive loss for the year		-	-	-	-	-	(7,886,039)	(7,886,039)
Balance, July 31, 2022		58,079,619	$ 14,671,804	$ 725,256	$ 2,754,415	$ -	$ (16,143,701)	$ 2,007,774

Jasper Commerce Inc. Consolidated Statements of Cash Flows For the years ended July 31, 2023 and 2022 (in Canadian Dollars)

	Note	2023	2022
Cash flows used in operating activities:
Loss for the year		$ (3,374,900)	$ (7,886,039)
Adjustments for items not affecting cash:
Stock-based compensation	8	111,837	441,000
Depreciation	4	48,943	21,855
Finance costs	16	63,579	2,956,708
Income tax recovery	14	(78,126)	-
Changes in non-cash working capital balances:
Accounts receivable		141,366	(99,080)
Government tax and subsidy receivable		280,355	(13,209)
Contract assets		21,978	56,163
Prepaid expenses and deposits		147,774	(184,650)
Accounts payable and accruedliabilities		(217,170)	198,512
Contract liabilities		(67,391)	(63,800)
		(2,921,755)	(4,572,540)
Cash flows from financing activities:
Common share financing, net of issue costs	7	-	5,378,853
Debenture financing, net of issue costs	6	856,573	-
Share buyback	7	-	(15,000)
Proceeds from loans	5	-	100,000
Interest paid		(3,851)	(269,352)
Debenture repayments		-	(290,000)
Loan repayments		(100,070)	(211,524)
		752,652	4,692,977
Cash flows used in investing activities:
Cash from reverse takeover	3	-	990,519
Purchase of furniture and equipment	4	(3,806)	(84,519)
		(3,806)	906,000
Net increase in cash and cash equivalents		(2,172,909)	1,026,437
Cash and cashequivalents, beginning of year		2,315,762	1,289,325
Cash and cash equivalents, end of year		$ 142,853	$ 2,315,762

1. Nature of operations and going concern

Jasper Commerce Inc. (together with its subsidiary, the "Company" or "Jasper") was incorporated on March 22, 2021, under the Business Corporations Act (British Columbia). The Company is domiciled in Canada and its head office, principal address and records office are located at 44 Victoria Street, Suite 820, Toronto, Ontario M5C 1Y2.

On February 16, 2022, SaaSquatch Capital Corp. ("SCC"), a Capital Pool Company as defined in Policy 2.4 of the TSX Venture Exchange, acquired Jasper Interactive Studios Inc. in a reverse takeover transaction ("RTO") (see Note 3) and began trading its common shares on the TSX Venture Exchange under the symbol JPIM.

Jasper is a Software-as-a-service ("SaaS") Product Information Management ("PIM") solution empowering eCommerce retailers, wholesalers or distributors to centralize, organize and richly merchandise their products from a single central repository.

Jasper's ability to continue as a going concern is dependent upon its ability to obtain additional financing to support its operations or to generate sufficient and sustained cash flows from its operating activities. It is not possible to predict whether financing efforts will be successful in the future. Failure to obtain such financing could result in delay or indefinite postponement of the Company's strategic goals. These material uncertainties may cast significant doubt upon the Company's ability to continue as a going concern.

2. Significant accounting policies

Statement of compliance

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

The statements were authorized for issue by the Board of Directors on November 27, 2023.

Basis of preparation

These financial statements have been prepared on the basis that Jasper will continue as a going concern, and do not reflect the adjustments to the carrying values of assets and liabilities and the reported revenues and expenses, and classifications of statements of financial position that would be necessary if it were unable to realize its assets and settle its liabilities as a going concern in the normal course of operations. Such adjustments could be material.

Basis of measurement and functional currency

These financial statements have been prepared on a historical cost basis except for financial instruments classified as financial instruments at fair value through profit or loss, which are stated at their fair value. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting, except for cash flow information. These consolidated financial statements are presented in Canadian dollars, which is also the Company's functional currency.

Principles of consolidation

The consolidated financial statements include the accounts of Jasper Commerce Inc. and its wholly owned subsidiary Jasper Interactive Studios Inc. All intercompany transactions and balances have been eliminated on consolidation.

Summary of accounting estimates and judgements

The preparation of consolidated financial statements in accordance with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from these estimates in the future. The most significant estimates and judgements include but are not limited to the following:

Estimates:

Expected credit losses

The Company monitors the financial stability of its customers and the environment in which they operate to make estimates regarding the likelihood that the individual trade receivable balances will be paid. Credit risks for outstanding customer receivables are regularly assessed and allowances are recorded for lifetime estimated losses.

Stock-based compensation

Determining the fair value of equity-settled stock-based compensation awards at the grant date requires estimating the value of the Company's stock, the expected term of stock options, the expected volatility of the Company's stock, the expected dividends, and the number of stock-based awards that are expected to be forfeited.

Convertible debentures and debentures with detached equity features

Convertible debentures and debentures issued with features that may be settled in the entity's own equity instruments are accounted for in accordance with their substance and are presented in their component parts of debt and equity. The Company estimates the fair value of each component on initial recognition. Instruments may have certain features that, while similar, may differ, such as the term, amount, security, and credit risk, and therefore the Company is required to make significant estimates in determining an appropriate discount rate and fair value (see note 6).

Income Taxes

Provisions for taxes are made using the best estimate of the amount expected to be paid based on a qualitative assessment of all relevant factors. The Company reviews the adequacy of these provisions at the end of the reporting period. However, it is possible that at some future date an additional liability could result from audits by taxing authorities. Where the final outcome of these tax‑related matters is different from the amounts that were initially recorded, such differences will affect the tax provisions in the period in which such determination is made.

Judgements:

COVID-19

The outbreak of the novel strain of the coronavirus, specifically identified as the COVID-19 pandemic, has caused governments worldwide to enact emergency measures to combat the spread of the virus. Jasper applied for and received certain government funding (see Note 17) which was integral to the Company's financial condition.

Going concern

The consolidated financial statements have been prepared on a going concern basis, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The assessment of the Company's ability to source future operations and continue as a going concern involves judgement. Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. If the going concern assumption was not appropriate for the financial statements, then adjustments would be necessary in the carrying value of assets and liabilities, the reported revenue and expenses and the statement of financial position classifications used.

Provisions

The Company assesses a provision for legal obligations at each reporting period or when new material information becomes available. The Company applies judgement in assessing whether a past event will result in a probable outflow of resources embodying economic benefits. If such an outflow is determined to be probable (more likely than not to occur), and it can be reliably estimated, a provision will be recorded. Legal and contractual matters are subject to interpretation and the Company may engage external advisors to assist with periodic assessments. The actual judgments or settlement amounts may vary significantly from management's estimates.

Revenue recognition

The recognition of revenue requires judgement in assessing the performance obligations within a contract and whether the performance obligations are satisfied at a point in time or over a period of time. In instances of bundled contracts, the Company estimates and allocates the transaction price to each performance obligation based on its stand-alone selling price. When a PIM contract requires significant customization costs, the Company uses judgement to determine whether the customization is a separate performance obligation or a part of a bundled service, in which case the Company estimates the expected contract life, based on renewal terms and the Company's historical experience with similar sized contracts, and amortizes the revenue and related costs over the life. For transactions with resellers, determining whether revenue should be reported on a gross or net basis is based on an assessment of whether the Company is acting as the principal or an agent and involves judgment based on an evaluation of the terms of each arrangement.

Research and development

Costs incurred in the development and testing of subscription software products related to research, project planning, training, maintenance and general and administrative activities, and overhead costs are expensed as incurred. The costs of relatively minor upgrades and enhancements to the software are also expensed as incurred. Costs for the development of new software solutions and substantial enhancements to existing software solutions are expensed as incurred until technological feasibility has been established, at which time any additional costs would be capitalized. Jasper developed the PIM software internally and owns the IP. The Company uses guidance under IAS 38 Intangible Assets to determine if research and development costs qualify as an internally generated intangible asset. To date, research and development costs have not been capitalized as the Company does not have sufficient history to demonstrate the software will generate future economic benefits.

Functional currency

Judgment is used in the determination of the Company's functional currency because a significant portion of the Company's revenues are denominated in US dollars whereas the majority of the Company's expenses are denominated in Canadian dollars. The Company considered other factors, including the currency of the Company's debt and equity financing.

Revenue

Revenue is measured based on the value of the expected consideration in a contract with a customer and excludes sales taxes and other amounts collected on behalf of third parties. The Company recognizes revenue when control of a product or service is transferred to a customer based on the five-step model outlined in IFRS 15. For bundled arrangements, the Company accounts for individual products and services when they are separately identifiable, and the customer can benefit from the product or service on its own or with other readily available resources. The total arrangement consideration is allocated to each product or service included in the contract with the customer based on its stand-alone selling price. Services purchased by a customer in excess of those included in the bundled arrangement are accounted for separately.

The timing of revenue recognition sometimes differs from the contract payment schedule, resulting in revenues that have been billed but not earned, which are recorded as deferred revenue. As at July 31, 2023, the Company had $83,229 (2022 – $150,620) in deferred revenue presented as contract liabilities. From time to time, a customer may request a significant modification to the Company's standard software offering for a specific use case. In such an arrangement, the Company capitalizes the required customization costs as a contract asset and expenses those costs over the expected contract life as part of research and development expense.

In instances where the Company collects payment in advance and there is a significant financing component, the practical expedient is applied as the period from delivery of the goods or services is within one year of when the customer pays. No adjustment is made to the transaction price. The practical expedient is also applied to commission contract costs and these are expensed as incurred.

Subscription fees for cloud-based PIM software

The Company's revenue is derived from PIM software subscriptions purchased through monthly, annual or multi year contracts. The software is delivered over a period of time through the cloud from the Company's third-party hosting facilities. Therefore, these arrangements are treated as service agreements and revenue is recognized pro-rata over the contract term as the service is delivered.

The cloud-based software subscription consists of a bundle of services including assistance with setup, software licensing, data hosting, backups, updates and technical support. The Company accounts for this bundle of services as a single performance obligation as the individual services do not have stand alone value to the customer. Rarely a customer contract requires significant upfront customization of the PIM software to satisfy the customer's performance obligation, such that the value of the customization exceeds the fees that the Company normally charges for PIM subscriptions. In these instances, the Company may determine that the significant customization is not a separate performance obligation as the PIM software cannot be used as the customer intends without incurring the upfront customization costs.

Consulting services

Consulting services are generally services that assist customers to implement PIM solutions, such as identifying and proposing PIM solutions, assisting with setup, data onboarding and software development, and providing training services. Consulting services are typically separate contracts, represent distinct performance obligations and are recognized when the services are delivered to the customer.

Financing costs

Costs incurred to obtain equity financing are deducted from the value assigned to shares issued. When costs are incurred prior to the closing of a financing arrangement, these amounts are presented as a deferred asset until the financing has closed. When an expected financing arrangement does not occur, any deferred costs are recorded as an expense.

Income taxes

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

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted at the end of the reporting period, and any adjustment to tax payable in respect of previous years. Current tax assets and current tax liabilities are only offset if a legally enforceable right exists to offset the amounts and the Company intends to settle on a net basis, or to realize the asset and settle the liability simultaneously.

Income taxes (continued)

Deferred tax is recognized in respect of all qualifying temporary differences arising between the tax basis of assets and liabilities and their carrying amounts in the financial statements. Deferred income tax is determined on a nondiscounted basis using tax rates and laws that have been enacted or substantively enacted at the end of the reporting period and are expected to apply when the deferred tax asset or liability is settled. Deferred tax assets are recognized to the extent that it is probable that the assets can be recovered. Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset tax assets and liabilities and when the deferred tax balances relate to the same taxation authority.

Deferred tax assets are recognized to the extent future recovery is probable. At each reporting period end, deferred tax assets are reduced to the extent that it is no longer probable that sufficient taxable earnings will be available to allow all or part of the asset to be recovered.

Loss per share

The Company presents basic and diluted loss per share data for its common shares, calculated by dividing the loss attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the year. Diluted loss per share does not adjust the loss attributable to common shareholders or the weighted average number of common shares outstanding when the effect is anti‐dilutive. Diluted loss per common share is calculated by adjusting the weighted average number of common shares outstanding to assume conversion of all dilutive potential common shares. As the effect of all outstanding stock options and warrants is anti-dilutive during a year when the Company incurs a loss, diluted earnings per share do not differ from basic loss per share.

Foreign currency translation

Foreign currency transactions are translated into the functional currency (Canadian dollars) at exchange rates in effect on the date of the transactions. Monetary assets and liabilities denominated in foreign currencies at the end of the reporting period are translated to Canadian dollars at the foreign exchange rate applicable at that date. Realized and unrealized exchange gains and losses are recognized through profit or loss. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.

Financial instruments

Financial assets and liabilities are recognized when the Company becomes a party to the contractual provision of the respective instrument. Fair value estimates are made at the statement of financial position date based upon the relevant market conditions and information about the financial instrument. The Company's financial instrument classifications are described in Note 12.

Financial instruments (continued)

Fair value through profit or loss ("FVTPL") financial assets

Financial assets classified and measured at FVTPL are those assets that do not meet the criteria to be classified at amortized cost or at FVTOCI. This category includes debt instruments whose cash flow characteristics are not solely payments of principal and interest or are not held within a business model whose objective is either to collect contractual cash flows, or to both collect contractual cash flows and sell the financial asset.

Amortized cost financial assets

Financial assets at amortized cost are non-derivative financial assets which are held within a business model whose objective is to hold assets to collect contractual cash flows and its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. A financial asset is initially measured at fair value, including transaction costs and subsequently at amortized cost.

Impairment of financial assets

Financial assets, other than those classified at fair value through profit and loss, are assessed for indicators of impairment at the end of the reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected.

Financial liabilities

Financial liabilities are classified as either financial liabilities at FVTPL or other financial liabilities. Financial liabilities at FVTPL are stated at fair value, with changes being recognized through the statements of income. Other financial liabilities are initially measured at fair value, net of transaction costs, and are subsequently measured at amortized cost using the effective interest method.

Impairment of non-financial assets

The carrying amounts of the Company's non-financial assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists or if the asset is still under development, then the asset's recoverable amount is estimated in accordance with IAS 36. No impairment has been recorded to date.

Stock-based compensation

The Company accounts for its stock-based compensation programs with employees using the fair value method, based on the number of stock options that are expected to vest. Under this method, stock-based compensation expense related to these programs is charged to operations with the corresponding amount increasing option reserves over the vesting period. On the exercise of options, consideration received and the related accumulated options reserves is credited to share capital. Compensation expense is adjusted for subsequent changes in management's estimate of the number of stock options that are expected to vest.

Stock-based compensation (continued)

For equity-settled share-based payment transactions with non-employees, the Company measures the goods or services received, and the corresponding increase in equity, directly, at the fair value of the goods or services received, unless that fair value cannot be estimated reliably, in which cases, the Company measures their value, and the corresponding increase in equity, indirectly, by reference to the fair value of the equity instruments granted.

Segment reporting

The Company operates a single reportable operating segment, conducting business in two geographic areas of operations (see Note 15).

3. Reverse takeover

On February 16, 2022, Jasper completed a reverse takeover ("RTO") transaction pursuant to an agreement between Jasper Interactive Studios Inc. ("JISI") and SaaSquatch Capital Corp. ("SCC") whereby JISI amalgamated with a subsidiary of SCC. The amalgamation constituted a reverse acquisition of SCC by JISI (the subsidiary for legal purposes and the acquirer for accounting purposes). SCC then changed its name to Jasper Commerce Inc.

Immediately prior to the completion of the transaction: (i) SCC consolidated its issued and outstanding SCC common shares on the basis of one post-consolidation SCC common share for every 2 pre-consolidation SCC common shares and (ii) JISI shares were exchanged for shares of Jasper Commerce Inc. on a 13.95 for one basis.

For accounting purposes, JISI was deemed to be the accounting acquiror and was deemed to split its common shares on a 13.95 for every 1 common share outstanding immediately prior to the transaction and to issue 6.5M shares to the shareholders of SCC to acquire SCC. The effect of the deemed stock split was applied retrospectively through these consolidated financial statements.

On closing, Jasper: (iii) was deemed to have issued 6,500,000 common shares valued at $2,604,300 and 100,000 common share warrants valued at $34,676 in exchange for all the issued and outstanding common shares and warrants of SCC, (iv) issued 1,440,784 common shares valued at 577,267 as a finders' fee for the RTO transaction, (v) converted $3,483,000 principal amount of debentures plus $125,942 accrued interest into 11,104,447 common shares, and (vi) issued 12,000,000 common shares and 6,000,000 common share warrants for gross proceeds of $6,000,000 in a concurrent financing (see Note 7).

3. Reverse takeover (continued)

The RTO transaction did not constitute a business combination as SCC did not meet the definition of a business under IFRS 3, Business Combinations. As a result, the transaction was accounted for as an asset acquisition, JISI was identified as the acquirer, and the equity consideration was accounted for in accordance with IFRS 2, Sharebased payments, and measured at fair value. Accordingly, there was no goodwill recognized, and the difference between the consideration and fair value of the net assets acquired results in an RTO listing expense of $2,292,750 (see Note 16). The non-cash listing expense was determined as follows:

Consideration:
Fair value of 6,500,000 common shares	$2,604,300
Fair value of 100,000 common share warrants	34,676
Fair value of 1,440,784 finder's shares	577,267
Total consideration	$3,216,243
Net assets acquired (liabilities assumed):
Cash	$ 995,269
Accounts payable and accrued liabilities	(71,776)
Total net assets acquired
	$ 923,493

4. Furniture and equipment

	Computer hardware	Office furniture	Total
Cost
August 1, 2021	112,623	45,987	158,610
Additions	83,926	593	84,519
July 31, 2022	196,549	46,580	243,129
Additions	3,806	-	3,806
July 31, 2023	200,355	46,580	246,935
Accumulated amortization
August 1, 2021	104,915	38,647	143,562
Amortization for the year	16,348	5,507	21,855
July 31, 2022	121,263	44,154	165,417
Amortization for the year	46,517	2,426	48,943
July 31, 2023	167,780	46,580	214,360
Net book value July 31, 2022	75,286	2,426	77,712
Net book value July 31, 2023	32,575	-	32,575

5. Loans payable

		Original	Revised
	Rate of Interest	Maturity	Maturity*	Jul 31, 2023	Jul 31, 2022
BDC Term Loan -04	Floating+2.5%	October 2024	Apr 2025	$ 33,000	$ 59,400
BDC Term Loan -06	Floating+2%	March 2024	Sep 2024	7,120	17,800
BDC Term Loan -07	Floating+2%	May 2024	Nov 2024	26,800	58,960
BDC Term Loan -08	Floating-1.75%	April 2026	Oct 2026	33,315	44,225
BDC Term Loan -09	Floating+2%	March 2026	Sep 2026	53,120	73,040
CEBA Loan		Dec 2023	Dec 2023	60,000	60,000
				213,355	313,425
Current portion				(152,360)	(133,385)
Non-current				$ 60,995	$ 180,040

BDC loans are guaranteed by a director of the Company. During the year, BDC agreed to extend Term Loan -08 from April 15, 2023 to April 15, 2026.

* After year-end, on August 24, 2023, BDC agreed to defer principal payments until March 2025, and to defer the maturity dates of each loan in the portfolio. The revised schedule had the effect of reducing the current portion by $41,720, from $152,360 to $110,640 and increasing the non-current portion from $60,995 to $102,715.

6. Convertible debentures

	Rate of	Principal Amount	Amortized Cost	Amortized Cost
	Interest	Jul 31, 2023	Jul 31, 2023	Jul 31, 2022
Debenture	12.0%	$ 900,000	$ 567,476	$ -
		900,000	567,476	-
Current portion		-	-	-
Non-current portion		$ 900,000	$ 567,476-	$ -

On February 15, 2023 and April 5, 2023 Jasper closed two tranches of non-brokered private placement of convertible debenture units for aggregate gross proceeds of $900,000. Each convertible debenture unit is comprised of: (i) $1,000 principal amount of 12% secured convertible debenture that matures on February 15, 2028; and (ii) 20,000 common share purchase warrants. Interest is payable annually in cash.

In connection with the private placements, Jasper paid legal and regulatory fees of $19,627 and finder's fees to certain registered brokerage firms, which were comprised of cash payments of $23,800 and the issuance of 476,000 finders' warrants exercisable at a price per common share of $0.05 and having a term of twenty-four months following issuance. The Company determined the fair value of the warrants of $9,137 using the Black-Scholes option valuation model assuming a share price of $0.035, a risk-free rate of 4.17%, an expected volatility of 120% and an expected life of 2 years.

6. Convertible debentures (continued)

Jasper assessed the fair value of the liability portion of the convertible debentures on the assumption that the market rate of interest for arms-length debt would be 25%. The Company calculated a fair value of $586,899 on initial recognition. The difference between the face value of the debt of $900,000, being a remainder of $313,101 was allocated to the two equity components, being the conversion feature and the warrants. The total financing costs of $52,564 was then proportionally allocated $34,278 to the liability portion and $18,287 to the equity portion. The resulting effective interest rate on the liability portion is 25.9%.

Each convertible debenture is convertible at the holder's option into fully-paid common shares at any time prior to the maturity date at a conversion price of $0.05 per common share during the first year and at $0.10 per common share thereafter. If the volume weighted average price of the Company's common shares for any 60-day period prior to the maturity date equals or exceeds $0.35 per common share then any outstanding convertible debentures at that time automatically will be converted into common shares at the then applicable conversion price effective the 60th day of such period. The convertible debentures are secured obligations of the Company and have a floating charge over the Company's assets but will be subordinate to existing secured loans.

Each warrant is exercisable into one common share of the Company at an exercise price of $0.10 for a period of 48 months.

The total equity value of $313,101 was allocated between the conversion feature and the warrants based on an estimate of their relative fair values. Jasper allocated $112,458 to the conversion feature and $200,643 to the warrants. The Company estimated a fair value for the equity instruments using the Black-Scholes option valuation model assuming a share price of $0.035, a risk-free rate of 3.43% to 4.17%, an expected volatility of 120% and an expected life of 1 to 5 years. The equity value is offset by $18,287 in financing costs and $78,126 in tax allocations.

7. Share capital

• a) Authorized Unlimited common shares without par value
• b) Issued and outstanding common shares
  • i) On February 16, 2022, immediately prior to an RTO transaction (see Note 3), Jasper Interactive Studios Inc. shares were exchanged for shares of Jasper Commerce Inc. on a 13.95 for one basis. The issued and outstanding common shares shown in these consolidated financial statements have been retroactively restated to reflect the exchange.
  • ii) On February 16, 2022, concurrent with the RTO transaction, Jasper completed a brokered private placement for aggregate gross proceeds of $6,000,000 at a price of $0.50 per unit. Each unit consisted of one common share and one-half common share purchase warrant, with each whole warrant exercisable for 2 years at a price of $0.70.

7. Share capital (continued)

The fair value of the common share of $0.40 and the one-half warrant of $0.10 was determined using the Black-Scholes option pricing model and the following assumptions:

• Resulting unit price: $0.50
• Exercise price: $0.70
• Expected life: 2 years
• Volatility: 120%
• Dividend yield: 0%
• Risk free rate: 1.53%

In connection with the brokered private placement, Jasper incurred share issue costs totaling $853,320. Jasper paid a cash commission of $471,080 to the broker, paid legal costs and disbursements totaling $168,786 and issued 942,160 broker warrants valued at $213,454. The net proceeds from the financing, totaling $5,378,854, was split between $4,139,035 common shares and $1,239,819 common share purchase warrants based on the relative fair value of the two equity instruments.

• iii) On March 25, 2022, Jasper paid $15,000 to repurchase 34,870 common shares from a former shareholder.
• c) Common shares held in escrow

On July 31, 2023, a total of 12,331,947 shares were held in escrow pursuant to the policies of the TSX Venture Exchange applicable to the RTO that occurred on February 15, 2022 (see Note 3).

The shares will be released from escrow on the following dates:

Release Date	Number of Shares
August 22, 2023	3,270,487
February 22, 2024	3,020,487
August 22, 2024	3,020,487
February 22, 2025	3,020,486
Total	12,331,947

8. Reserves

Reservesrepresent the value attributable to all unexercised and outstanding stock options and warrants classified within equity.

a) Issued and outstanding common share purchase warrants

		Weighted
		Average Exercise	Numberof
	Note	Price ($)	Warrants
Outstanding, August 1, 2021		0.47	7,341,763
Issued on RTO	(ii)	0.20	100,000
Issued on concurrent financing	7(b)(ii)	0.70	6,000,000
Broker warrants issued on concurrent financing)	7(b)(ii)	0.50	942,160
Outstanding, July 31, 2022		0.53	14,383,923
Issued with debentures	6	0.10	18,000,000
Finders' warrants issued with debentures	6	0.05	476,000
Expired		0.31	(1,063,142)
Outstanding, July 31, 2023		0.30	31,796,781

• i) On February 16, 2022, immediately prior to an RTO transaction (see Note 3), Jasper Interactive Studios Inc. shares were exchanged for shares of Jasper Commerce Inc. on a 13.95 for one basis. The issued and outstanding common share purchase warrants and warrant exercise prices shown in these consolidated financial statements have been retroactively restated to reflect the exchange.
• ii) On February 16, 2022, in connection with the RTO transaction, Jasper issued 100,000 warrants to shareholders of SaaSquatch Capital Corp. with each warrant exercisable for approximately 5 years at a price of $0.20.

8. Reserves (continued)

Warrants outstanding as of July 31, 2023 are as follows:

	Weighted Average Remaining	Warrants
Exercise Price ($)	Contractual Life in Years	Outstanding
0.05	1.6	476,000
0.10	3.6	18,000,000
0.20	0.6	100,000
0.33	0.2	571,692
0.49	2.2	2,350,036
0.50	0.6	942,160
0.51	1.6	802,029
0.54	1.7	2,554,874
0.70	0.6	6,000,000
		31,796,781

b) Issued and outstanding convertible debt warrants

On April 21, 2021, Jasper issued 186 convertible debt warrants to brokers in a private placement. Each warrant entitles the holder to acquire the number of common shares as is equal to $1,000 divided by a variable conversion price. On closing of the RTO transaction, the debentures' conversion price was set at $0.325 and the number of broker warrants was set at 571,692, plus an additional 18,090 broker warrants exercisable at $0.4875 for approximately 4 years. These broker warrants have been added to the number of warrants outstanding in part (a) above.

c) Options

Under Jasper's current Stock Option Plan (the "Plan"), its directors may approve the issuance of stock options to directors, officers, employees and consultants of the Company and its affiliates. The aggregate number of shares reserved for issuance under the Plan is up to 10% of the number of outstanding common shares. As at July 31, 2023, 5,099,964 stock options remained outstanding at exercise prices ranging from $0.05 to $0.50 per share. Options for the Company's directors vest immediately, while options for employees generally vest ratably over a period of three years. All options have a life of five years and have expiry dates ranging from September 2023 to May 2028.

8. Reserves (continued)

Jasper measures compensation costs associated with stock-based compensation using the fair value method and the cost is recognized over the vesting period of the underlying security. Expected volatilities are based on market data of public companies in a similar industry and of a similar size as Jasper. The fair value of each option is determined at the grant date using the Black-Scholes option valuation model with the following weighted average assumptions:

	2023	2022
Share price	$ 0.05	$ 0.32
Exercise price	$ 0.08	$ 0.50
Life	5 years	5 years
Annualized volatility	120%	120%
Dividend yield	0%	0%
Risk-free rate	3.32%	1.55%
Fair value (per option)	$ 0.04	$ 0.25

During the year ended July 31, 2023, $111,837 (2022 – $441,000) was recognized as stock-based compensation in the consolidated statement of loss and comprehensive loss. This expense includes a reversal of $115,423 (2022 – $23,385) of expenses recognized in a previous period for which the award did not ultimately vest.

At July 31, 2023, the remaining unvested value of the Company's stock options is $114,251 which will be recognized through May 2026.

The following table sets out information concerning stock options issued to employees, consultants, directors and officers that were outstanding at July 31, 2023:

	Weighted Average	Number of
	Exercise Price ($)	Options
Outstanding, August 1, 2021	0.46	1,150,737
Granted	0.50	2,484,317
Forfeited	0.45	(244,096)
Forfeited	0.50	(174,353)
Outstanding, July 31, 2022	0.49	3,216,605
Granted	0.08	3,265,000
Forfeited	0.46	(1,381,641)
Outstanding, July 31, 2023	0.24	5,099,964

8. Reserves (continued)

The following table summarizes information about the stock options outstanding at July 31, 2023:

Exercise Prices per Share($)	Weighted AverageRemaining ContractualLife in Years	Number of OptionsOutstanding	Number of OptionsVested/Exercisable
0.05	4.8	1,600,000	-
0.06	4.8	125,000	-
0.13	4.2	1,415,000	-
0.45	0.4	348,709	348,709
0.50	3.3	1,611,255	653,321
	3.9	5,099,964	1,002,030

9. Related party transactions

A shareholder also has a controlling interest in one of Jasper's customers. During the year ended July 31, 2023, Jasper earned revenue of $11,700 (2022 – $241,603) from the customer. As of July 31, 2023, Jasper was owed $3,305 (2022 – $10,170) from the customer.

A director of the Company also provides services to the firm. During the year ended July 31, 2023, the director's firm charged $16,497 (2022 – $119,074) to Jasper.

All related party transactions are measured at the amounts agreed upon between the related parties.

10. Key management compensation

	2023	2022
Salaries	$ 541,125	$ 725,561
Stock-based compensation	60,886	131,874
	$ 602,011	$ 857,435

Key management includes the senior officers of the Company and directors.

11. Management of capital

The Company's objective when managing capital is to ensure that it has adequate financial resources to maintain liquidity necessary to fund its operations and provide returns for shareholders and benefits to other stakeholders. The capital structure of the Company is as follows:

	2023	2022
Share capital	$ 14,671,804	$ 14,671,804
Options reserve	606,210	725,256
Warrants reserve	2,902,412	2,754,415
Conversion feature reserve	77,829	-
Deficit	(19,287,718)	(16,143,701)
	$ (1,029,463)	$ 2,007,774

The Company manages its capital structure and adjusts it based on the level of funds available to manage its operations. Upon approval of the Board of Directors, the Company balances its overall capital through new share, debenture, and warrant issuances or by undertaking other activities as deemed appropriate in the circumstances. The Company is not subject to externally imposed capital requirements.

There have been no changes in the Company's approach to capital management during the year.

12. Financial instruments

a) Classification of financial instruments

		Carrying Value($)	Fair Value($)
	Classification	July 31, 2023	July 31, 2023
Financial assets:
Cash and cash equivalents	Amortized cost	142,853	142,853
Accounts receivable	Amortized cost	85,227	85,227
Financial liabilities:
Accounts payable and accrued liabilities	Amortized cost	606,104	606,104
Loans payable (Note 5)	Amortized cost	213,355	194,332
Convertible debentures (Note 6)	Amortized Cost	567,476	644,063

12. Financial instruments (continued)

b) Fair value of financial instruments

The carrying values of cash and cash equivalents, accounts receivable and accounts payable and accrued liabilities approximate their fair values due to the immediate or short-term maturity of these financial instruments.

The fair values for loans payable and convertible debentures are estimated assuming a market rate of interest for arms-length debt would be 25%.

Financial instruments recorded at fair value are classified using a fair value hierarchy that reflects the significance of inputs used in making the measurements. The hierarchy is summarized as follows:

• Level 1 Quoted prices (unadjusted) in active markets for identical assets and liabilities.
• Level 2 Inputs that are observable for the asset or liability, either directly (prices) or indirectly (derived from prices) from observable market data.
• Level 3 Inputs for assets and liabilities not based upon observable market data.

The Company's loans and debentures are measured on initial recognition using level 3 inputs.

There were no transfers between Level 1, Level 2, or Level 3 for the years ending July 31, 2023 and 2022.

13. Financial risk management

a) Currency risk

Jasper operates internationally and is exposed to risk from changes in foreign currency rates. Foreign currency risk arises from the fluctuation of foreign exchange rates and the degree of volatility of these rates relative to the Canadian dollar. The Company sells PIM software subscriptions and consulting services in both Canadian and foreign currencies. The sale of software and services in foreign currencies gives rise to the risk that the Company's income and cash flows may be adversely impacted by fluctuations in foreign exchange rates. Certain purchases of services and equipment are also made in non-Canadian currencies. The Company does not actively manage this risk and uses its natural hedge to mitigate, to the extent possible, the impact of foreign exchange fluctuations.

Jasper is primarily exposed to foreign exchange risk from transactions in U.S. dollars. The sensitivity analysis of its exposure to currency risk has been determined based on a hypothetical change in the foreign exchange rates taking place at the reporting date. Fluctuations of 10% in the exchange rates for these currencies, when compared to the Canadian dollar, are not expected to individually have a material effect on the Company's results of financial performance.

13. Financial risk management (continued)

b) Credit risk

Credit risk is the risk of financial loss to Jasper if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Company's financial assets that are exposed to credit risk consist primarily of cash and cash equivalents and accounts receivable.

At July 31, 2023, all Jasper's cash and cash equivalents were held at one major Canadian bank.

In the normal course of business, Jasper continuously monitors the financial condition of its customers and reviews the credit history of each new customer. As of July 31, 2023, four customers represented 63% (2022 – four customers represented 59%) of the Company's trade receivables. The Company is using the simplified expected credit losses method to estimate its provision for credit losses, which considers the specific credit risk of its customers, the expected lifetime of its financial assets, historical trends and economic conditions.

The following table provides the details of the aged receivables and the related expected credit losses:

		1 to 30	31 to 60	61 to 90	Over 90
Balance, July 31, 2023	Current	days	days	days	days	Total
Accounts receivable	$ 41,269	$ 25,016	$ 12,665	$ 6,277	$ 6,277	$ 91,504
Expected credit losses	(6,277)	-	-	-	-	(6,277)
	$ 34,992	$ 25,016	$ 12,665	$ 6,277	$ 6,277	$ 85,227
		1 to 30	31 to 60	61 to 90	Over 90
Balance, July 31, 2022	Current	days	days	days	days	Total
Accounts receivable	$ 71,480	$ 46,040	$ 5,462	$ 5,501	$ 162,929	$ 291,412
Expected credit losses	-	-	-	-	(64,819)	(64,819)
	$ 71,480	$ 46,040	$ 5,462	$ 5,501	$ 98,110	$ 226,593

For the year ending July 31, 2023, Jasper reflected expected credit losses of $632 (2022 – $17,019) in the consolidated statements of operations and comprehensive loss which are included in selling and marketing expenses.

13. Financial risk management (continued)

c) Liquidity risk:

Liquidity risk is the risk that Jasper will not be able to meet its obligations as they fall due (see also Note 1).

Jasper manages its liquidity risk by forecasting cash flows from operations and anticipated investing and financing activities. Senior management is also actively involved in the review and approval of planned expenditures.

As at July 31, 2023, Jasper has current liabilities of $812,819 (2022 – $1,013,432), cash of $142,853 (2022 - $2,315,762), and working capital deficit of $404,693 (2022 – working capital of $2,157,188). The Company's financial liabilities are due as follows:

	2024	2025	2026	2027	2028
Accounts payable and accrued liabilities	$ 606,104	-	-	-	-
Loanspayable	110,640	$ 64,340	$ 32,040	$ 6,335	-
Convertible debentures	-	-	-	-	$567,476
	$ 716,744	$ 64,340	$ 32,040	$ 6,335	$ 567,476

14. Income tax

The reconciliation of the combined Canadian federal and provincial statutory income tax rate of 26.5% (2022 – 26.5%) to the effective tax rate is as follows:

	2023	2022
Net loss before recovery of income taxes	$ (3,453,026)	$ (7,886,039)
Expected income tax (recovery) expense	(915,050)	(2,089,800)
Stock-based compensation and other non-deductible items	32,820	119,690
Share issuance costs booked directly to equity	-	(217,050)
Adjustments in respect of prior periods	(108,710)	-
Listing fees	-	608,840
Investment tax credits earned but not recorded	(79,140)	(52,390)
Change in tax benefits not recognized	991,954	1,630,710
Deferred income tax (recovery) expense	(78,126)	-

14. Income tax (continued)

The following table summarizes the components of deferred tax:

	2023	2022
Deferred tax assets
Operating tax losses carried forward	$ 88,120	$ 10,610
Subtotal of assets	88,120	10,610
Deferred tax liabilities
Property, plantand equipment	-	(10,610)
Convertible debentures	(88,120)	-
Subtotal of liabilities	(88,120)	(10,610)
Net deferred tax liability	-	-

Deferred tax assets and liabilities have been offset where they relate to income taxes levied by the same taxation authority and the Company has the legal right and intent to offset. Movement in net deferred tax liabilities:

	2023	2022
Balance atthe beginning of the year	$ -	$-
Recognized in profit/loss	78,140	-
Recognized in equity	(78,140)	-
Balance at the end of the year	$ -	$ -

Unrecognized deferred tax assets

Deferred taxes are provided as a result of temporary differences that arise from the differences between income tax values and the carrying amount of assets and liabilities. Deferred tax assets have not been recognized in respect of the following deductible temporary differences:

	2023	2022
Operating tax lossescarried forward	$ 12,928,250	$ 10,108,120
Tax pools	1,984,650	1,387,200
Share issuance costs	780,400	902,170
Investment tax creditsfrom schedule 81	204,290	84,880
Property and equipment	157,340	-
Reserves	20,000	20,880
Total	$ 16,074,930	12,503,250

14. Income tax (continued)

The Canadian operating tax loss carry forwards expire as noted in the table below. Investment tax credit expire from 2037- 2043. The remaining deductible temporary differences may be carried forward indefinitely. Deferred tax assets have not been recognized in respect of these items because it is not probable that future taxable profit will be available against which the group can utilize the benefits therefrom.

The Company's Canadian unrecognized operating tax losses expire as follows:

Year-ending July 31,
2038	$ 1,182,750
2039	1,858,220
2040	1,422,600
2041	1,194,200
2042	4,331,220
2043	2,939,260
Total	$ 12,928,250

15. Segmented information

Jasper identified its operating segment based on the financial information that is reviewed and used by executive management (collectively, the Chief Operating Decision Maker, or "CODM") in assessing performance and in determining the allocation of resources. The CODM considers the business from a single operating segment perspective and assess the performance of the segment-based measures of profit and loss as well as assets and liabilities.

As the operations are a single segment, all amounts disclosed in the consolidated financial statements represent segment amounts.

Product categorization information

For the year ended July 31, 2023, Jasper earned revenue attributed to the following product categories based on the main product or service sold to the customer:

	2023	2022
SaaS PIM subscriptions	$ 1,281,255	$ 1,221,167
Professional services	158,569	457,922
Total	$ 1,439,824	$ 1,679,089

For the year ended July 31, 2023, the Company earned 1% (2022 – 14%) of its revenue from customers controlled by a shareholder (see Note 9).

15. Segmented information (continued)

Geographic information

Jasper earned revenue attributed to the following regions based on the geographical location of the customer:

	2023	2022
United States	$ 756,609	$ 797,382
Canada	168,590	305,804
Rest of world	514,625	575,903
Total	$ 1,439,824	$ 1,679,089

All of the Company's non-current assets are located in Canada.

16. Finance costs

Finance costs comprise the following:

	Note	2023	2022
Interest and accretion on debentures	6	$ 59,728	$ 332,504
Interest on loans	5	20,262	247,860
(Gain) Loss on settlement of debentures		-	(5,896)
Listing cost	3	-	2,292,750
Fair value adjustment of the debenture conversion feature		-	(64,180)
Fair value adjustment of the warrant liability		-	161,155
Interest earned on invested funds		(18,171)	(12,235)
Other financing costs		1,760	4,750
		$ 63,579	$ 2,956,708

17. Government support

Since March 2020, the Canadian federal government made certain government support programs available to eligible entities as part of its COVID-19 economic response plan. The Company applied and received support under the Canada Emergency Wage Subsidy ("CEWS") and Canada Emergency Business Account ("CEBA") programs. Each applicant's eligibility for these programs is subject to validation and detailed verification by the federal government. Due to nature of the eligibility requirements and related calculations, it is possible that the eligibility requirements may not be considered to be met upon validation, and as such the benefits received may be repayable.

During the year ended July 31, 2023, Jasper received $nil (2022 – $36,474) of wage subsidies in connection with the CEWS program. These amounts are included in salaries that are related to general and administrative, research and development and sales and marketing.

During the year ended July 31, 2021, Jasper received $60,000 of loan proceeds in connection with the CEBA program. As at July 31, 2023, this loan amount is included in loans payable under current liabilities.

The Government tax and subsidy receivable of $104,900 (2022 – $348,255) is comprises GST/HST receivable of $24,026 (2022 – $131,676) and Scientific Research and Experimental Development Receivable of $80,874 (2022 – $216,579).

18. Contingencies

A lawsuit relating to a former employee was resolved after year-end. Since resolution of the matter confirmed conditions existing at year end, a provision of $75,000 was recognised in accounts payable and accrued liabilities on July 31, 2023.

19. Subsequent events

The Company obtained funding from a shareholder on August 16, September 7, October 11, October 30, and November 9, 2023, in the form of five secured promissory notes of $50,000 each, totaling $250,000 in aggregate. Four of the notes are payable 6 months from issuance and the fifth note is due December 31, 2023. All notes bear interest at a rate of eight percent (8%) per annum.

On August 24, 2023, the Company's Term Loans were extended (see Note 5).