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Total Telcom Inc. — Interim / Quarterly Report 2025
Mar 3, 2025
44268_rns_2025-03-03_b9a16136-08e7-44a4-a26c-76bfae6b308c.pdf
Interim / Quarterly Report
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TOTAL TELCOM INC.
Condensed Interim Consolidated Financial Statements
For the three and six months ended December 31, 2024
(Unaudited)
Notice to Reader
The following condensed interim consolidated financial statements and notes have not been reviewed by the Company's auditors but have been reviewed and approved by the Company's Audit Committee and Board of Directors.
TABLE OF CONTENTS
| PAGE | |
|---|---|
| Condensed Interim Consolidated Balance Sheets | 1 |
| Condensed Interim Consolidated Statements of Income and Comprehensive Income | 2 |
| Condensed Interim Consolidated Statement of Changes in Shareholders’ Equity | 3 |
| Condensed Interim Consolidated Statements of Cash Flows | 4 |
| Notes to the Condensed Interim Consolidated Financial Statements | 5 - 13 |
TOTAL TELCOM INC.
Condensed Interim Consolidated Balance Sheets
| | December 31, 2024
(unaudited) | June 30, 2024
(audited) |
| --- | --- | --- |
| ASSETS | | |
| CURRENT | | |
| Cash and cash equivalents | $ 979,162 | $ 842,584 |
| Term deposits | 2,035,457 | 1,948,530 |
| Trade and other receivables | 163,176 | 236,235 |
| Inventories | 293,046 | 340,046 |
| Prepaid expenses | 15,599 | 10,374 |
| | 3,486,440 | 3,377,769 |
| RACE MANAGEMENT EQUIPMENT (Note 4) | 76,950 | 89,100 |
| PRODUCT DEVELOPMENT (Note 5) | 1,450,753 | 1,435,741 |
| PROPERTY, PLANT AND EQUIPMENT (Note 6) | 3,864 | 4,830 |
| RIGHT OF USE ASSET (Note 7) | 358,809 | 400,052 |
| DEFERRED INCOME TAX ASSET | 185,000 | 222,000 |
| | $ 5,561,816 | $ 5,529,492 |
| LIABILITIES | | |
| CURRENT | | |
| Trade and other payables | $ 151,557 | $ 202,625 |
| Deferred revenue | 24,440 | 35,734 |
| Current portion of lease liabilities (Note 8) | 102,761 | 106,162 |
| | 278,758 | 344,521 |
| LEASE LIABILITIES (Note 8) | 261,825 | 293,540 |
| | 540,583 | 638,061 |
| SHAREHOLDERS' EQUITY | | |
| Share capital | 2,273,498 | 2,273,498 |
| Contributed surplus | 188,845 | 160,245 |
| Retained earnings | 2,558,890 | 2,457,688 |
| | 5,021,233 | 4,891,431 |
| | $ 5,561,816 | $ 5,529,492 |
TOTAL TELCOM INC.
Condensed Interim Consolidated Statements of Income and Comprehensive Income
Unaudited
| Three months ended December 31 | Six months ended December 31 | |||
|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |
| SALES | $ 444,063 | $ 619,578 | $ 927,819 | 961,924 |
| COST OF SALES (Note 4) | 184,857 | 233,699 | 381,153 | 376,699 |
| GROSS PROFIT | 259,206 | 385,879 | 546,666 | 585,225 |
| GENERAL AND ADMINISTRATIVE EXPENSES | 218,705 | 183,329 | 371,194 | 402,687 |
| INTEREST ON LEASE LIABILITIES (Note 8) | 6,406 | 1,204 | 13,132 | 2,687 |
| AMORTIZATION OF RIGHT OF USE ASSETS (Note 7) | 20,621 | 17,965 | 41,243 | 35,930 |
| AMORTIZATION OF PRODUCT DEVELOPMENT COSTS (Note 5) | 54,399 | 42,867 | 105,895 | 85,733 |
| DEPRECIATION (Note 6) | 483 | 676 | 966 | 1,353 |
| 300,614 | 246,041 | 532,430 | 528,390 | |
| INCOME (LOSS) FROM OPERATIONS | (41,408) | 139,838 | 14,236 | 56,835 |
| OTHER ITEMS | ||||
| Foreign exchange gains (losses) | 65,180 | (31,474) | 65,220 | 7,148 |
| Finance income | 27,132 | 31,189 | 58,746 | 53,308 |
| 92,312 | (285) | 123,966 | 60,456 | |
| INCOME BEFORE INCOME TAXES | 50,904 | 139,553 | 138,202 | 117,291 |
| PROVISION FOR DEFERRED INCOME TAXES | 13,000 | 38,000 | 37,000 | 32,000 |
| NET INCOME AND COMPREHENSIVE INCOME | $ 37,904 | $ 101,553 | $ 101,202 | $ 85,291 |
| EARNINGS PER SHARE | ||||
| Basic | $ 0.001 | $ 0.004 | $ 0.003 | $ 0.003 |
| Diluted | $ 0.001 | $ 0.004 | $ 0.003 | $ 0.003 |
| WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING | 26,423,015 | 26,423,015 | 26,364,682 | 26,364,682 |
TOTAL TELCOM INC.
Condensed Interim Consolidated Statement of Changes in Shareholders' Equity
Unaudited
| 2024 | |||||
|---|---|---|---|---|---|
| Number of shares | Share Capital | Contributed Surplus | Retained Earnings | Total Shareholders' Equity | |
| Balance at June 30, 2024 | 26,423,015 | $ 2,273,498 | $ 160,245 | $ 2,457,688 | $ 4,891,431 |
| Share-based compensation related to stock options granted and vested | - | - | 28,600 | - | 28,600 |
| Net income for the six months ended December 31, 2024 | - | - | - | 101,202 | 101,202 |
| Balance at December 31 2024 | 26,423,015 | $ 2,273,498 | $ 188,845 | $ 2,558,890 | $ 5,021,233 |
| 2023 | |||||
| --- | --- | --- | --- | --- | --- |
| Number of shares | Share Capital | Contributed Surplus | Retained Earnings (Deficit) | Total Shareholders' Equity | |
| Balance at June 30, 2023 | 26,073,015 | $ 2,181,748 | $ 144,025 | $ 2,166,157 | $ 4,491,930 |
| Shares issued from exercise of stock options | 350,000 | 52,500 | 52,500 | ||
| Contributed surplus transferred on exercise of stock options | 39,250 | (39,250) | - | ||
| Share-based compensation related to stock options granted and vested | 55,470 | 55,470 | |||
| Net income for the six months ended December 31, 2023 | - | - | - | 85,291 | 85,291 |
| Balance at December 31, 2023 | 26,423,015 | $ 2,273,498 | $ 160,245 | $ 2,251,448 | $ 4,685,191 |
TOTAL TELCOM INC.
Condensed Interim Consolidated Statements of Cash Flows
Unaudited
| Three months ended December 31 | Six months ended December 31 | |||
|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |
| NET INFLOW (OUTFLOW) OF CASH RELATED TO THE FOLLOWING ACTIVITIES | ||||
| OPERATING | ||||
| Net income for the period | $ 37,904 | $ 101,553 | $ 101,202 | $ 85,291 |
| Items not affecting cash: | ||||
| Foreign Exchange loss (gain) | (65,180) | 31,474 | (65,220) | (7,148) |
| Deferred income tax expense | 13,000 | 38,000 | 37,000 | 32,000 |
| Share-based compensation | 28,600 | - | 28,600 | 55,470 |
| Amortization of product development costs | 54,399 | 42,867 | 105,895 | 85,733 |
| Amortization of right of use asset | 20,621 | 17,965 | 41,243 | 35,930 |
| Amortization of race management equipment | 6,075 | 25 | 12,150 | 2,178 |
| Depreciation of equipment | 483 | 676 | 966 | 1,353 |
| 95,902 | 232,560 | 261,836 | 290,807 | |
| Net change in non-cash working capital | 122,243 | (251,173) | 52,472 | (28,683) |
| CASH PROVIDED BY OPERATING ACTIVITIES | 218,145 | (18,613) | 314,308 | 262,124 |
| FINANCING | ||||
| Lease liability principal payments | (17,739) | (22,261) | (35,116) | (43,979) |
| Repayment of long term debt | - | (40,000) | - | (40,000) |
| Proceeds from exercise of stock options | - | - | - | 52,500 |
| CASH PROVIDED BY FINANCING ACTIVITIES | (17,739) | (62,261) | (35,116) | (31,479) |
| INVESTING | ||||
| Product development costs | (60,051) | (42,066) | (120,907) | (102,710) |
| Purchase of race management equipment | - | - | - | (404) |
| Purchase of term deposits | (75,582) | (599,141) | (86,927) | (1,004,269) |
| CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | (135,633) | (641,207) | (207,834) | (1,107,383) |
| NET FOREIGN EXCHANGE DIFFERENCE ON CASH | 65,180 | (31,474) | 65,220 | 7,148 |
| Net increase (decrease) in cash and cash equivalents | 129,953 | (753,555) | 136,578 | (869,590) |
| CASH, BEGINNING OF PERIOD | 849,209 | 1,139,650 | 842,584 | 1,255,685 |
| CASH, END OF PERIOD | $ 979,162 | $ 386,095 | $ 979,162 | $ 386,095 |
| SUPPLEMENTAL CASH FLOW INFORMATION | ||||
| Interest received | $ 27,132 | $ 31,189 | $ 58,746 | $ 53,308 |
| Interest paid on lease liability | $ 6,406 | $ 1,204 | $ 13,132 | $ 2,687 |
TOTAL TELCOM INC.
Notes to the Condensed Interim Consolidated Financial Statements
December 31, 2024
Unaudited
- NATURE OF OPERATIONS
Total Telcom Inc. (the “Company”), through its wholly owned subsidiary ROM Communications Inc. is a developer and provider of remote asset monitoring and tracking products and services primarily in North America.
The Company is incorporated under the Business Corporations Act of Alberta. The Company’s head office is located at #540, 1632 Dickson Avenue, Kelowna, British Columbia V1Y 7T2. The Company’s common shares are traded on the TSX Venture Exchange under the symbol TTZ.
- BASIS OF PRESENTATION
These financial statements for the six months ended December 31, 2024 have been prepared in accordance with International Financial Accounting Standard (“IAS”) 34 Interim Financial Reporting on a basis consistent with the accounting policies disclosed in the Company’s annual audited consolidated financial statements for the fiscal year ended June 30, 2024. Certain information and footnote disclosure normally included in annual financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”) have been omitted or condensed. These financial statements should be read in conjunction with the annual audited consolidated financial statements for the year ended June 30, 2024.
These condensed consolidated interim financial statements include the accounts of Total Telcom Inc. and its wholly owned subsidiary ROM Communications Inc. All intercompany balances and transactions have been eliminated.
These financial statements have been prepared on the historical cost basis except for cash and cash equivalents, long term debt and share-based payment arrangements that have been measured at fair value.
All amounts are reported in Canadian dollars.
These financial statements were approved and authorized for issue by the Board of Directors on March 2, 2025.
TOTAL TELCOM INC.
Notes to the Condensed Interim Consolidated Financial Statements
December 31, 2024
Unaudited
3. SIGNIFICANT ACCOUNTING POLICIES
The preparation of interim financial statements requires management to make judgments, estimates, and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. In preparing these interim financial statements, the significant judgments made by management in applying the Company’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended June 30, 2024.
4. RACE MANAGEMENT EQUIPMENT
| Race Management Equipment | |
|---|---|
| Cost or deemed cost | |
| Balance at June 30, 2024 | $ 407,951 |
| Additions | - |
| Disposals | (808) |
| Balance at December 31, 2024 | $ 407,143 |
| Depreciation and impairment losses | |
| Balance at June 30, 2024 | $ 318,851 |
| Amortization | 12,150 |
| Disposals | (808) |
| Balance at December 31, 2024 | $ 330,193 |
| Carrying amounts | |
| At June 30, 2024 | $ 89,100 |
| At December 31, 2024 | $ 76,950 |
Cost of sales includes amortization of race management equipment in the amounts of $6,075 (2023 - $25) and $12,150 (2023 - $2,178) for the three and six months ended December 31, 2024.
TOTAL TELCOM INC.
Notes to the Condensed Interim Consolidated Financial Statements
December 31, 2024
Unaudited
5. PRODUCT DEVELOPMENT
| Product Development Costs | |
|---|---|
| Cost or deemed cost | |
| Balance at June 30, 2024 | $ 2,058,705 |
| Additions | 120,907 |
| Disposals | - |
| Balance at December 31, 2024 | 2,179,612 |
| Depreciation and impairment losses | |
| Balance at June 30, 2024 | 622,964 |
| Amortization | 105,895 |
| Disposals | - |
| Balance at December 31, 2024 | 728,859 |
| Carrying amounts | |
| At June 30, 2024 | $ 1,435,741 |
| At December 31, 2024 | $ 1,450,753 |
6. PROPERTY, PLANT AND EQUIPMENT
| Computer equipment | Equipment and furniture | Leasehold improvements | Total | |
|---|---|---|---|---|
| Cost or deemed cost | ||||
| Balance at June 30, 2024 | $ 68,943 | $ 42,707 | $ 35,000 | $ 146,650 |
| Additions | - | - | - | - |
| Balance at December 31, 2024 | $ 68,943 | $ 42,707 | $ 35,000 | $ 146,650 |
| Depreciation and impairment losses | ||||
| Balance at June 30, 2024 | $ 68,169 | $ 38,651 | $ 35,000 | $ 141,820 |
| Depreciation | 386 | 580 | - | 966 |
| Balance at December 31, 2024 | $ 68,555 | $ 39,231 | $ 35,000 | $ 142,786 |
| Carrying amounts | ||||
| At June 30, 2024 | $ 774 | $ 4,056 | $ - | $ 4,830 |
| Balance at December 31, 2024 | $ 388 | $ 3,476 | $ - | $ 3,864 |
TOTAL TELCOM INC.
Notes to the Condensed Interim Consolidated Financial Statements
December 31, 2024
Unaudited
7. RIGHT OF USE ASSET
| | Right
Of Use
Asset |
| --- | --- |
| Cost or deemed cost | |
| Balance at June 30, 2024 | $ 434,038 |
| Additions | - |
| Disposals | - |
| Balance at December 31, 2024 | $ 434,038 |
| Depreciation and impairment losses | |
| Balance at June 30, 2024 | $ 33,986 |
| Amortization | 41,243 |
| Disposals | - |
| Balance at December 31, 2024 | $ 75,229 |
| Carrying amounts | |
| At June 30, 2024 | $ 400,052 |
| At December 31, 2024 | $ 358,809 |
TOTAL TELCOM INC.
Notes to the Condensed Interim Consolidated Financial Statements
December 31, 2024
Unaudited
8. LEASE LIABILITIES
The lease liabilities include a lease for occupied premises requiring monthly payments totaling $6,973 including interest at the Company's incremental borrowing rate of 7.2% per annum until May 2026 and $7,262 per month from June 2026 to May 2029, a lease for a vehicle requiring monthly payments totaling $453 including interest at 2.9% per annum until March 2025 and a final payment of $18,825 in April 2025 and a lease for a vehicle requiring bi-weekly payments totaling $267 including interest at 4.49% per annum until March 2025 and a final payment of $19,000 in April 2025.
| Lease Liabilities | |
|---|---|
| Balance at June 30, 2024 | $ 399,702 |
| Repayments | (48,248) |
| Interest | 13,132 |
| Balance at December 31, 2024 | 364,586 |
| Less Current Portion | (102,761) |
| Lease Liability - long term portion | $ 261,825 |
The future minimum payments required under these leases are as follows:
| Principal | Interest | Total | |
|---|---|---|---|
| 2025 | $ 102,761 | $ 21,733 | $ 124,494 |
| 2026 | 69,070 | 16,629 | 85,699 |
| 2027 | 75,736 | 11,408 | 87,144 |
| 2028 | 81,352 | 5,792 | 87,144 |
| 2029 | 35,667 | 643 | 36,310 |
| $ 364,586 | $ 56,205 | $ 420,791 |
TOTAL TELCOM INC.
Notes to the Condensed Interim Consolidated Financial Statements
December 31, 2024
Unaudited
9. SHARE-BASED COMPENSATION
Under the Total Telcom Inc. Employee Stock Option Plan, options to purchase common shares of the Company may be granted to key employees, independent contractors and directors of the Company that entitle the holder to purchase one common share at a subscription price of not less than 100% of the market value on the effective date of the grant. The holder has the right to exercise the options immediately after issue, but the resulting shares cannot be traded until four months after the date the options were granted. Options expire five years after being issued or 90 days after an employee ceases employment with the Company. The Board of Directors has the discretion to extend the expiration period on cessation of employment.
The maximum number of common shares authorized for issuance by the Board of Directors under the plan is limited to 10% of the total issued and outstanding common shares of the Company.
Under the Employee Stock Option Plan, certain key employees and directors have the following options to purchase common shares:
(a) 100,000 common shares at $0.15 per share – options expire May 31, 2026;
(b) 400,000 common shares at $0.15 per share – options expire December 30, 2026;
(c) 275,000 common shares at $0.30 per share – options expire May 31, 2028;
(d) 215,000 common shares at $0.34 per share – options expire June 30, 2028; and
(e) 200,000 common shares at $0.25 per share – options expire December 26, 2029
The average remaining contracted life of outstanding stock options is 3.05 years.
The following stock options were outstanding as at December 31, 2024:
| Share options outstanding | Number of options | Weighted average exercise price |
|---|---|---|
| Balance at June 30, 2024 | 990,000 | $ 0.23 |
| Exercised | - | $ - |
| Granted | 200,000 | $ 0.25 |
| Balance, December 31, 2024 | 1,190,000 | $ 0.24 |
At December 31, 2024, all stock options were exercisable.
The fair value of any stock options granted to directors, officers, employees and independent contractors is recorded in general and administrative expenses over the vesting period with the offset recorded to contributed surplus. During the three and six months ended December 31, 2024, the Company issued 200,000 (2023 – nil) and 200,000 (2023 – 215,000) stock options. These options were valued at $28,600 using Black-Scholes Option pricing model. This share based compensation is included in general and administrative expenses with an offset to contributed surplus.
TOTAL TELCOM INC.
Notes to the Condensed Interim Consolidated Financial Statements
December 31, 2024
Unaudited
9. SHARE-BASED COMPENSATION (CONTINUED)
Inputs for measurement of grant date fair values
The following inputs were used in the measurement of the fair value at grant date of the share based compensation plan:
| 2024 | 2023 | |
|---|---|---|
| Fair value of share options and assumptions | ||
| Share price at grant date | 0.22 | 0.36 |
| Exercise price | 0.25 | 0.34 |
| Expected volatility | 81% | 87% |
| Option life | 5 years | 5 years |
| Expected dividends | 0% | 0% |
| Risk-free interest rate | 3.9% | 5% |
Commitment
On November 27, 2024, the Board of Directors approved the issuance of 400,000 stock options exercisable at $0.25 per share. 200,000 of these options were issued to a director of the company during the quarter ended December 31, 2024. The remainder have not been issued as of the date of these financial statements.
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TOTAL TELCOM INC.
Notes to the Condensed Interim Consolidated Financial Statements
December 31, 2024
Unaudited
10. RELATED PARTY TRANSACTIONS
Transactions with related parties
General and administrative expenses for the three and six months ended December 31, 2024 include $7,500 (2023 - $7,500) and $15,000 (2023 - $15,000) respectively in management fees payable to a company controlled by a director.
Key management personnel compensation
Aggregate compensation to the directors and key management personnel of the Company during the period was as follows:
| Three months ended December 31, | Six months December 31, | |||
|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |
| Salaries and short-term employee benefits | $ 33,000 | $ 33,000 | $ 66,000 | $ 66,000 |
| Management fees | 7,500 | 7,500 | 15,000 | 15,000 |
| Director fees | 3,750 | 3,750 | 7,500 | 7,500 |
| $ 44,250 | $ 44,250 | $ 88,500 | $ 88,500 |
Salaries and short-term employee benefits consist of salaries, bonuses, directors' fees, and all other short-term monetary and non-monetary benefits. Share-based payment benefits consist of the fair value of share-option awards expensed in the period. There were no share-based benefits paid to key management personnel in the three and six months ended December 31, 2024 or 2023. However, share-based compensation totaling $28,600 (2023 - $nil) and $28,600 (2023 - $25,800) was paid to a director during the three and six months ended December 31, 2024 respectively. No long-term, post-employment or termination benefits were recognized in the three or six months ended December 31, 2024 or 2023.
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