Nubeva Technologies Ltd. — Interim / Quarterly Report 2021

Sep 29, 2021

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Nubeva Technologies Ltd.

Condensed Consolidated Financial Statements

For the Three Months Ended July 31, 2021 and 2020

UNAUDITED

NOTICE OF NO AUDITOR REVIEW OF INTERIM FINANCIAL STATEMENTS

Under National Instrument 51-102, Part 4, Subsection 4.3(3)(a), if an auditor has not performed a review of the interim financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor. The accompanying unaudited condensed consolidated interim financial statements of the Company have been prepared by and are the responsibility of the Company ’ s management. The Company ’ s independent auditor has not performed a review of these financial statements in accordance with standards established by the Canadian Institute of Chartered Accountants for a review of interim financial statements by an entity ’ s auditor.

Nubeva Technologies Ltd.

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION As at July 31, 2021 and April 30, 2021

(Expressed in United States Dollars)

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July 31, 2021 April 30, 2021
Assets
Current assets:
Cash and money market instruments (note 4) $ 1,667,857 $ 2,280,420
Accounts receivable (note 5) 139,773 335,002
Tax credit receivable (notes 6 and 13) 281,515 241,260
Prepaid expenses and deposits (note 7) 118,197 129,967
Total current assets 2,207,342 2,986,649
Total Assets $ 2,207,342 $ 2,986,649
Liabilities
Current liabilities:
Accounts payable and accrued liabilities (notes 8 and 10) $ 151,659 $ 198,922
Current portion of term loans payable (note 11) 111,627 182,915
Deferred revenue (note 9) 21,077 38,501
Total current liabilities 284,363 420,338
Term loans payable (note 11) 8,756 26,387
Total Liabilities 293,119 446,725
Shareholders’ Equity
Common share capital (note 12) 15,043,965 14,936,186
Obligation to issue shares (note 12) - 1,891
Reserves (note 12) 1,445,559 1,306,357
Deficit (14,465,197) (13,612,967)
Accumulated other comprehensive loss (110,104) (91,543)
Total Equity 1,914,223 2,539,924
Total Liabilities and Shareholders' Equity $ 2,207,342 $ 2,986,649
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Subsequent events – note 17

Approved by the directors:

“Randy Chou” “Greig Bannister”

The accompanying notes are an integral part of these condensed consolidated interim financial statements

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Nubeva Technologies Ltd.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Expressed in United States Dollars)

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Three Months Ended July 31,
2021 2020
Revenue (note 14) $ 31,514 $ 39,613
Operating expenses:
General and administrative (notes 10 and 13) 239,844 195,693
Research and development (notes 10 and 13) 356,555 338,347
Sales and marketing (notes 10 and 13) 255,586 259,658
Share-based compensation (notes 10 and 13) 152,595 28,266
Total expenses 1,004,580 821,964
Other Items
Interest and other income 343 417
Interest expense (note 11) (6,370) -
Gain on digital currency - 8,727
Foreign exchange loss (876) (16,070)
Government assistance (note 11) 127,739 207,399
Net loss (852,230) (581,878)
Other comprehensive income (loss), items that will be recycled through
profit and loss
Foreign currency translation adjustment (18,561) 42,051
Total comprehensive loss $ (870,791) $ (539,827)
Loss per share - basic and dliuted $ (0.01) $ (0.01)
Weighted average number of common shares outstanding 61,115,493 56,256,017
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The accompanying notes are an integral part of these condensed consolidated interim financial statements

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Nubeva Technologies Ltd.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

For the Three Months Ended July 31, 2021 and 2020

(Expressed in United States Dollars)

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Share capital Reserves
Accumulated
Obligation Share Based
Common Warrants Other
Amount to Issue Payment Deficit Total
Shares Reserve Comprehensive
Shares Reserve
Loss
Balance April 30, 2020 56,153,155 $ 13,730,668 $ - $ 603,282 $ 101,346 $ (12,960,121) $ (130,385) $ 1,344,790
Options exercised 69,677 3,037 - (506) - - - 2,531
Share-based compensation - - - 28,266 - - - 28,266
RSU issued 117,544 28,434 - (28,434) - - - -
Foreign currency translation - - - - - - 42,051 42,051
- - - - - -
Net loss for the period (581,878) (581,878)
Balance July 31, 2020 56,340,376 $ 13,762,139 $ - $ 602,608 $ 101,346 $ (13,541,999) $ (88,334) $ 835,760
Balance April 30, 2021 60,986,929 $ 14,936,186 $ 1,891 $ 758,383 $ 547,974 $ (13,612,967) $ (91,543) $ 2,539,924
Share issuance costs - 2,320 - - - - - 2,320
Share-based compensation (note 12) - - - 152,595 - - - 152,595
Options exercised (note 12) 38,710 1,891 (1,891) - - - - -
Warrants exercised (note 12) 94,500 64,237 - - (13,393) - - 50,844
Shares for services 46,052 39,331 - - - - - 39,331
Foreign currency translation - - - - - - (18,561) (18,561)
- - - - - -
Net loss for the period (852,230) (852,230)
Balance July 31, 2021 61,166,191 $ 15,043,965 $ - $ 910,978 $ 534,581 $ (14,465,197) $ (110,104) $ 1,914,223
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The accompanying notes are an integral part of these condensed consolidated interim financial statements

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Nubeva Technologies Ltd.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Three Months Ended July 31, 2021 and 2020

(Expressed in United States Dollars)

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2021 2020
Operating activities
Net loss for the period $ (852,230) $ (581,878)
Items not involving cash:
Share-based compensation 152,595 28,266
Interest accrued (13,805) -
Gain on digital currency - (8,727)
Foreign exchange - 19,834
Government assistance (75,988) (197,399)
Shares for services 39,332 -
Changes in non-cash working capital items related to operations:
Accounts receivable 195,229 21,014
Prepaid expenses 11,770 24,167
Tax credit receivable (51,751) (62,898)
Accounts payable and accrued liabilities (49,240) (12,448)
Deferred revenue (17,424) 1,000,000
Cash used in operating activities (661,512) 229,931
Financing activities:
Share issuance costs 2,320 -
Term loans - 42,600
Warrants exercised 50,844 2,531
Cash from financing activities 53,164 45,131
Effect of foreign exchange on cash (4,215) -
Net increase (decrease) in cash during the period (612,563) 275,062
Cash and money market investments, beginning of the period 2,280,420 1,873,375
Cash and money market investments, end of the period $ 1,667,857 $ 2,148,437
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The accompanying notes are an integral part of these condensed consolidated interim financial statements

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Nubeva Technologies Ltd. Notes to the Unaudited Condensed Consolidated Interim Financial Statements. For the three months ended July 31, 2021 and 2020 (Expressed in United States Dollars)

1. NATURE OF OPERATIONS

Nubeva Technologies Ltd. (“the Company” or “Nubeva”) was incorporated under the provisions of The Business Corporations Act (British Columbia) on February 3, 2017. The Company was a Capital Pool Company and had no business operations prior to February 28, 2018. The Company’s shares trade on the TSX Venture Exchange (“TSX-V”). The Company’s registered and records office are located at Suite 1080, 789 West Pender Street, Vancouver, BC, V6C 1H2.

Nubeva develops and licenses proprietary software for the decryption of network traffic.

These condensed 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. As at July 31, 2021, the Company had working capital of $2,566,311 (April 30, 2021 - $2,566,311) and incurred a net loss for period ended July 31, 2021 of $762,004 (2020 – $581,878). Management estimates that its working capital position will provide the Company with sufficient financial resources to carry out planned operations through the next ten months. Realization values may be substantially different from carrying values as shown and these condensed consolidated financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. Such adjustments could be material. The Company is dependent upon making sales or raising debt and equity financing to provide the funding necessary to meet its general operating expenses and will require additional financing to continue to develop and deploy its technology. The Company has incurred losses since inception and expects to incur further losses in the development of its business. These factors indicate a material uncertainty which may cast significant doubt upon the Company’s ability to continue as a going concern and, therefore, the Company may be unable to realize its assets and discharge its liabilities in the normal course of business. Although the Company has been successful in the past in obtaining financing, there is no assurance that it will be able to obtain adequate financing in the future or that such financing will be on terms advantageous to the Company.

Since January 31, 2020, several measures have been implemented in the United States, Canada and Australia in response to the increased impact from novel coronavirus (COVID-19). The Company continues to operate its United States office from remote work sites and is continuing software development and sales and marketing activities at this time. However, as the COVID-19 pandemic continues, the heightened economic uncertainty may have significant implications for the Company. Management has taken action to ensure the Company has adequate financing throughout fiscal 2022 and will continue to take action to mitigate the impact on its business in the event that future economic conditions reduce its ability to secure financing in fiscal 2023.

2. STATEMENT OF COMPLIANCE

Basis of Preparation

These condensed 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 International Financial Reporting Interpretation Committee (“IFRIC”). These condensed consolidated financial statements were approved by the Company’s Audit Committee on September 29, 2021.

Basis of Consolidation

The Company’s condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries:

Nubeva Pty Ltd. registered in New South Wales, Australia; and

Nubeva, Inc., registered in Delaware USA.

A subsidiary is an entity (including special purpose entities) controlled by the Company, where control is achieved by the Company having the power to govern the financial and operating policies of the entity so as to

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Nubeva Technologies Ltd.

Notes to the Unaudited Condensed Consolidated Interim Financial Statements. For the three months ended July 31, 2021 and 2020 (Expressed in United States Dollars)

obtain benefits from its activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Company controls another entity. The financial statements are condensed consolidated from the date on which control is obtained by the Company and are de-consolidated from the date that control ceases. All intercompany transactions and balances have been eliminated.

Basis of Measurement

These condensed consolidated financial statements have been prepared on a historical cost basis since inception, except for those assets and liabilities that are measured at fair value at the end of each reporting period. Additionally, these condensed consolidated financial statements have been prepared using the accrual basis of accounting, except for cash flow information.

3. ACCOUNTING STANDARDS AND AMENDMENTS ISSUED

Accounting standards or amendments to existing accounting standards that have been issued but have future effective dates are either not applicable or are not expected to have a significant impact on the Company’s condensed consolidated financial statements.

4. CASH AND MONEY MARKET INSTRUMENTS

	July 31, 2021 April 30, 2021
Cash	$ 254,350 $ 1,466,913
Moneymarket funds	1,413,507 813,507
	$ 1,667,857 $ 2,280,420
See note 16.

5. ACCOUNTS RECEIVABLE

ACCOUNTS RECEIVABLE
	July 31, 2021 April 30, 2021
Trade receivables and contract assets	$ 126,925 $ 322,547
GST receivable	12,848 12,455
	$ 139,773 $ 335,002

6. TAX CREDIT RECEIVABLE

The Company is eligible to receive tax credits from its eligible research and development expenditures. The Company records the anticipated tax credits as a reduction in the costs to which they apply, at such time that the amount of tax credits is estimable, and their receipt is reasonably assured.

Balance, April 30, 2021	241,260
Tax credit accrual (note 14)	51,751
Foreignexchange	(11,496)
Balance, July 31, 2021	$ 281,515

7. PREPAID EXPENSES AND DEPOSITS

	July	31, 2021 April 30, 2021
Deposit and prepaid office rent	$	6,904 $ 14,983
Other		111,293 114,984
	$	118,197 $ 129,967

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Nubeva Technologies Ltd. Notes to the Unaudited Condensed Consolidated Interim Financial Statements. For the three months ended July 31, 2021 and 2020 (Expressed in United States Dollars)

8. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

	July 31, 2021 April 30, 2021
Accounts payable (note 11)	$ 82,033 $ 82,033
Accrued liabilities(note 11)	116,889 116,889
	$ 151,659 $ 198,922

9. DEFERRED REVENUE

Deferred revenue of $21,077 at July 31, 2021 (April 30, 2021 - $38,501) represents amounts received prior to goods or services being delivered.

10. RELATED PARTY TRANSACTIONS

The following amounts, included in accounts payable and accrued liabilities (note 8), are payable to related parties as at July 31, 2021 and April 30, 2021:

parties as at July 31,2021andApril30,2021:
	July 31, 2021 April 30, 2021
Expenses incurred on behalf of Company	$ 3,660 $ 13,930
Accrued payroll	18,990 19,263
Board services	15,000 22,000
	$ 37,650 $ 55,193

These amounts are unsecured, non-interest bearing and have no fixed terms of repayment.

Key Management Compensation

The Company incurred the following expenses with directors, officers and companies that are controlled by directors of the Company, during the periods ended July 31, 2021 and 2020:

Three months ended Three months ended
July 31, 2021 July 31, 2020 Salary $ 224,453 $ 219,284 Board services 15,000 15,000 Share-based compensation 121,69612,066
$ 361,149 $ 246,350

11. TERM LOANS PAYABLE

During the period ended July 31, 2021, the Company received a loan in the amount of $42,700 under the Economic Injury Disaster Loan Program (“EIDL”) administered by the U.S. Small Business Administration (“SBA”). The program provides working capital to small businesses suffering substantial economic injury as a result of the Coronavirus. The loan bears interest at a rate of 3.75% per annum and is repayable in monthly payments of principal and interest over 30 years commencing one year after the date the loan was advanced. The loan has been discounted at a market rate of interest of 20% and the discount of $32,484 has been recorded as government assistance in the condensed consolidated statement of comprehensive loss for the current period. During the period ended July 31, 2021, interest and accretion of $1,730 have been recorded on the loan and are included in interest expense in the condensed consolidated statement of comprehensive loss.

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Nubeva Technologies Ltd.

Notes to the Unaudited Condensed Consolidated Interim Financial Statements. For the three months ended July 31, 2021 and 2020 (Expressed in United States Dollars)

Transactions for the period ended July 31, 2021 are as follows:
Balance, April 30, 2021			$	209,302
Accretion and interest				(13,805)
Recognition of government assistance				(75,988)
Foreign exchange				873
Balance, July 31, 2021			$	120,382
		July31,2021		April 30,2021
Current portion	$	111,626	$	182,915
Longtermportion		8,756		26,387
	$	120,382	$	209,302

12. SHARE CAPITAL AND RESERVES

• (a) Authorized

Unlimited common shares without par value; and

Unlimited Restricted Voting Common Shares without par value. Restricted Voting Common Shares may be entitled to receive dividends as and when declared by the board of directors, only if the same dividend is declared or paid on the common shares. Restricted Voting Common Shares may be converted into common shares on a one-for-one basis without payment of additional consideration, at the option of the holder with consent of the board of directors, and at any time at the option of the board of directors.

• (b) Issued Share Capital

At July 31, 2021, there were 46,395,224 (April 30, 2021 – 46,215,962) common shares issued and fully paid and 14,770,967 (April 30, 2021 – 14,770,967) Restricted Voting Common Shares issued and fully paid.

• (c) Shares Issued during the Year

During the period ended July 31, 2021, the following shares were issued:

The Company issued 38,710 common shares pursuant to the exercise of options for proceeds of $1,575.

The Company issued 94,500 common shares pursuant to the exercise of warrants for proceeds of $50,844.

The Company issued 46,052 common shares pursuant to the shares for debt in the amount of $39,331.

• (d) Share-Based Compensation

The Company’s shareholders have reserved 11,100,000 common shares for issuance under all share compensation arrangements. On September 25, 2020 the Company’s shareholders amended the allocation of common shares reserved for equity compensation as follows: as follows:

• (i) 10,600,000 common shares reserved for issuance under the Company’s Fixed Share Option, and

• (ii) 500,000 common shares reserved for issuance under the Company’s Restricted Share Unit Plan.

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Nubeva Technologies Ltd.

Notes to the Unaudited Condensed Consolidated Interim Financial Statements. For the three months ended July 31, 2021 and 2020 (Expressed in United States Dollars)

The following table summarizes the Company’s outstanding equity compensation as at July 31, 2021 and April 30, 2021:

		July 31, 2021	July 31, 2021		April 30, 2021	April 30, 2021
		Weighted	Weighted		Weighted	Weighted
		average	average		average	average
		exercise	remaining		exercise	remaining
		price	life		price	life
	Units	(CAD $)	(years)	Units	(CAD $)	(years)
Stock	options(i) 7,605,881 0.34		7.82	7,517,172 0.34		8.11
Units	outstanding 7,605,881	0.34	7.82	7,517,172	0.34	8.11

(i) Options

Options to purchase common shares may be granted to directors, consultants, officers and employees of the Company and its subsidiary for terms up to ten years at a price at least equal to the market price prevailing on the date of the grant.

The continuity of stock options for the period ended July 31, 2021 is as follows:

		Weighted
	Number of	Average Exercise
	Options	Price (CAD$)
Balance, April 30, 2021	7,594,591	0.34
Granted	50,000	1.21
Exercised	(38,710)	0.05
Balance, July 31, 2021	7,605,881	0.34

During the period ended July 31, 2021, the Company granted 50,000 (2020 – Nil) stock options. The fair value of the options granted was estimated to be CDN$40,704 (2020 - $Nil) using the Black-Scholes Option Pricing Model and the assumptions below. The expected volatility was determined using the average historical volatility of similar listed entities on the basis that the Company has limited historical information. The options granted vest over periods of 24 months with exercise prices of CAD $1.21.

Share-based compensation of $152,595 (July 31, 2020 - $13,327) was recorded for options vested during the period ended July 31, 2021.

the period ended July 31, 2021.
Period ended July 31,	Period ended July 31,
2021	2020
2 years 110% 28.13% - Expected life of options Annualized volatility Risk-free interest rate Dividend rate	- 0% 0.00% -

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Nubeva Technologies Ltd.

Notes to the Unaudited Condensed Consolidated Interim Financial Statements. For the three months ended July 31, 2021 and 2020 (Expressed in United States Dollars)

Details of options outstanding at July 31, 2021 are as follows:

Number of Options Outstanding	Expiry Date	Weighted Average Exercise Price (CAD$)	Weighted Average Remaining Life (Years)
38,710	14-Apr-26	0.05	4.71
77,419	04-Jun-26	0.05	4.85
77,419	14-Jun-26	0.05	4.87
38,710	20-Jun-26	0.05	4.89
13,548	17-Sep-26	0.05	5.13
38,710	06-Oct-26	0.05	5.19
1,167,096	09-Jan-27	0.05	5.45
38,710	17-Jan-27	0.05	5.47
7,742	29-May-27	0.05	5.83
282,580	19-Jun-27	0.05	5.89
500,821	05-Sep-27	0.05	6.10
116,129	01-Nov-27	0.80	6.26
386,000	23-Mar-28	1.52	6.65
80,000	15-Jan-29	0.42	7.47
550,200	16-Apr-29	0.27	7.72
20,000	28-Sep-29	0.10	8.17
60,000	10-Oct-29	0.10	8.20
420,000	09-Mar-30	0.05	8.61
137,087	23-Apr-30	0.08	8.73
50,000	16-Sep-30	0.25	9.13
125,000	09-Dec-30	0.28	9.36
3,000,000	28-Dec-30	0.45	9.42
330,000	24-Feb-31	0.42	9.58
50,000	05-May-23	1.21	1.76
7,605,881		0.34	7.82

At July 31, 2021, there were 4,117,014 stock options exercisable (April 30, 2021 – 3,686,883).

(ii) Warrants

The continuity of warrants for the period ended July 31, 2021 is as follows:

		Weighted
	Number of	Average Exercise
	Warrants	Price (CAD$)
Balance, April 30, 2021	2,575,953	0.74
Exercised	(94,500)	0.65
Balance, July 31, 2021	2,481,453	0.74

Warrants outstanding at July 31, 2021 are as follows:

ExercisePrice ($)	NumberofShares	ExpiryDate
0.65	1,016,610	March 25, 2024
0.80	1,464,843	April 8,2024
	2,481,453

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Nubeva Technologies Ltd. Notes to the Unaudited Condensed Consolidated Interim Financial Statements. For the three months ended July 31, 2021 and 2020 (Expressed in United States Dollars)

(e) Reserves

The share-based payment reserve is comprised of items recognized as stock-based compensation expense include RSU’s and stock options. Upon exercise of options or vesting of RSU’s the corresponding amount will be transferred from the reserve to share capital. In the event that stock-based compensation is cancelled or expires unexercised, the corresponding amount is removed from the share-based payment reserve and credited to retained earnings.

The warrants reserve is comprised of the value of warrants issued as part of private placements. The value of warrants is transferred to share capital on the date they are exercised. The Company does not adjust the reserve for warrants that expire unexercised.

13. EXPENSES BY NATURE

For period ended July 31, 2021

Forperiod ended July 31,2021
	General and Research and Sales and
	Administration Development( 1) Marketing
Office expense and operations	$ 108,298 $ 93,560 $ 15,510
Personnel	131,546 262,995 240,076
Totals	$ 239,844 $ 356,555 $ 255,586

(1) Research and development expenses are reported net of refundable tax credits in the amount of $51,751.

For the period ended July 31, 2020

	General and Research and Sales and
	Administration Development( 1) Marketing
Office expense and operations	$ 104,991 $ 46,529 $ 32,910
Personnel	90,702 291,818 226,748
Totals	$ 195,693 $ 338,347 $ 259,658

(1) Research and development expenses are reported net of refundable tax credits in the amount of $62,898.

See note 6.

14. REVENUE

	Three months	Three months
	ended July 31,	ended July 31,
	2021	2020
Software licenses and royalties	$ 5,594	$ 39,613
Support andmaintenance	25,920	-
Totals	$ 31,514	$ 39,613

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Nubeva Technologies Ltd. Notes to the Unaudited Condensed Consolidated Interim Financial Statements. For the three months ended July 31, 2021 and 2020 (Expressed in United States Dollars)

15. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

The Company is exposed in varying degrees to a variety of financial instrument related risks. The Board of Directors approves and monitors the risk management processes, inclusive of documented investment policies, counterparty limits, and controlling and reporting structures. The following provides information with respect to the Company’s exposure to certain financial risks:

Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they come due. The Company attempts to manage liquidity risk by maintaining sufficient cash. Liquidity requirements are managed based on expected cash flows to ensure that there is sufficient capital in order to meet short-term obligations. As at July 31, 2021 the Company had cash and marketable securities of $1,667,857 (April 30, 2021 - $2,280,420) to settle current liabilities of $284,363 (April 30, 2021 - $420,338) (note 4). The Company estimates it has adequate working capital to continue operations for ten months. There is substantial uncertainty that the Company will be able to continue to meet its financial obligations as they come due if it cannot generate sales or raise additional capital, and there is no assurance that the Company will be able to raise sufficient capital or raise capital on terms advantageous to the Company.

Foreign Exchange Risk

Foreign currency risk is the risk that the fair values of future cash flows of a financial instrument will fluctuate because they are denominated in currencies that differ from the respective functional currency. The functional currency of Nubeva is the Canadian dollars, the functional currency of one operating subsidiary is the Australian dollar and the functional currency of its other operating subsidiary is the United States dollar. At July 31, 2021, the Company held financial instruments in the aggregate amount of $1,424,413 (April 30, 2021 - $1,024,893) denominated in currencies that differ from their functional currencies. A 10% change in the value of the United States dollar would impact the Company’s net gain or loss by $142,441 (April 30, 2021 - $102,489).

Capital Management

The Company’s objective in managing capital is to ensure sufficient liquidity to fund research and development and engage in sales and marketing activities while at the same time taking a conservative approach toward financial leverage and management of financial risk. The Company’s capital is composed entirely of equity. The Company uses capital to finance its operating losses. There is substantial uncertainty that the Company will be able to continue to finance its operating losses. The Company currently funds these requirements from cash raised through the issuance of common shares. There is a risk that the Company will not be able to raise funds through the issuance of shares or on terms advantageous to the Company or its shareholders. The Company’s objectives when managing capital are to ensure that the Company will have enough liquidity to continue to develop its software and services and engage in sales and marketing activities in order to obtain returns on investment.

The Company monitors its capital on the basis of the adequacy of its cash resources to fund its business plan. In order to maximize flexibility to finance growth, the Company does not currently pay a dividend to holders of its common shares. There is no external restriction on the Company’s capital. The Company did not initiate any changes to its capital management strategy during the year.

Investment Risk

As at July 31, 2021 the Company’s cash and marketable securities were comprised of cash in the amount of $254,350 (April 30, 2021 - $1,466,913), and money market funds in the amount of $1,413,507 (April 30, 2021 - $813,507).

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Nubeva Technologies Ltd. Notes to the Unaudited Condensed Consolidated Interim Financial Statements. For the three months ended July 31, 2021 and 2020 (Expressed in United States Dollars)

Money market funds were comprised as follows:

• i) 38% of Blackrock BLF FedFund, AAA rated with investments in cash, U.S. Treasury bills, notes and other obligations issued or guaranteed as to principal and interest by the U.S. Government; and ii) 62% Morgan Stanley MSBNA Preferred Savings Account insured by the Federal Deposit Insurance Corporation (“FDIC”) up to applicable limits.

Although certain money market fund investments may be guaranteed, the funds themselves are not insured or guaranteed and the Company could lose money. An investment in the Blackrock BLF FedFund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The prices of fixed income securities respond to economic developments, including interest rate changes. Prices may be inversely affected by changes in interest rates. Accordingly, money market funds are subject to interest rate risk, and in a rising interest rate environment, portfolio shares can decline in value.

16. SEGMENT REPORTING

At July 31, 2021, the Company operates in one operating segment, the development and commercialization of software to support deep packet inspection of network traffic to enable security and network monitoring applications.

17. SUBSEQUENT EVENTS

On August 11, 2021, the Company accelerated the expiry of 1,016,610 warrants with an original expiry date of March 25, 2024 to September 10, 2021. Each warrant entitles the holder to acquire one common share at CAD $0.65 per share. In September 2021 the warrants were exercised for gross proceeds of $520,312 (CAD $660,796).

Subsequent to July 31, 2021 100,000 share purchase warrants were exercised at a price of CAD $0.80 per share for gross proceeds of $62,922 (CAD $80,000). In addition,140,000 stock options were exercised for cash proceeds of $31,181 (CAD $39,600).

On September 16, 2021, the Company announced the closing of a non-brokered private placement of 655,000 Units at a price of CAD $0.80 per Unit for gross proceeds of CAD $524,000. Each Unit is comprised of one common shares of the Company and one half of a share purchase warrant. Each whole Warrant entitles the holder to acquire a share at a price of CAD$1.25 for period of three years.

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