Wavefront Technology Solutions Inc. — Interim / Quarterly Report 2022

Apr 29, 2022

Unaudited Condensed Consolidated Interim Financial Statements of

WAVEFRONT TECHNOLOGY SOLUTIONS INC.

Three and six months ended February 28, 2022 and 2021

TABLE OF CONTENTS

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

TABLE OF CONTENTS CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS	TABLE OF CONTENTS CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
Condensed consolidated interim statements of financial position		1
Condensed consolidated interim statements of net loss and comprehensive loss		2
Condensed consolidated interim statements of changes in shareholders' equity		3
Condensed consolidated interim statements of cash flows		4
NOTES	TO THE CONDENSED CONSOLIDATED INTERIM FINANICAL STATEMENTS
Note 1	Nature of operations and corporate information	5
Note 2	Statement of compliance and going concern	5
Note 3	Property, plant and equipment	8
Note 4	Right-of-use assets and lease liabilities	9
Note 5	Share capital	10
Note 6	Government assistance	13
Note 7	Loss per share	13
Note 8	Financial instruments	14
Note 9	Segmented information	17

NOTICE OF NO AUDITOR REVIEW OF INTERIM FINANCIAL STATEMENTS

In accordance with National Instrument 51-102 released by the Canadian Securities Administrators, the Company is disclosing that its auditors have not reviewed the unaudited condensed consolidated interim financial statements for the periods ended February 28, 2022 and 2021.

WAVEFRONT TECHNOLOGY SOLUTIONS INC. Condensed Consolidated Interim Statements of Financial Position As at February 28, 2022 and August 31, 2021

(Canadian dollars)

(Unaudited)

Note ASSETS CURRENT ASSETS Cash and cash equivalents Trade and other receivables Inventories Prepaid expenses and other current assets	February 28, 2022 1,120,076 $ 443,165 134,276 132,541	August 31, 2021 1,201,893 $ 193,604 52,428 58,855
TOTAL CURRENT ASSETS	1,830,058	1,506,780
NON-CURRENT ASSETS Deposits Property, plant and equipment 3 Right-of-use assets 4	14,150 400,204 407,862	14,150 439,631 459,929
TOTAL ASSETS	2,652,274 $	2,420,490 $

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
Unearned revenue			58,410		78,041
Trade accounts payable and accrued liabilities			941,363		490,985
Lease liabilities	4		100,167		97,248
TOTAL CURRENT LIABILITIES			1,099,940		666,274
NON-CURRENT LIABILITIES
Other accrued liabilities	4		17,302		20,268
Lease liabilities	4		347,538		398,481
TOTAL LIABILITIES			1,464,780		1,085,023
SHAREHOLDERS' EQUITY
Share capital	5 b		68,383,516		67,299,083
Warrants	5 c		67,737		467,716
Contributed surplus	5 e		9,633,953		9,463,336
Accumulated other comprehensive income			566,132		565,366
Deficit			(77,463,844)		(76,460,034)
			1,187,494		1,335,467
		$	2,652,274	$	2,420,490

Going concern 2

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

Page 1 of 18

WAVEFRONT TECHNOLOGY SOLUTIONS INC. Condensed Consolidated Interim Statements of Net Loss and Comprehensive Loss Three and six month periods ended February 28, 2022 and 2021

(Canadian dollars)

(Unaudited)

Note Revenue Cost of sales	February 28, February 28, 2022 2021 535,752 $ 373,118 $ 34,642 15,465 For the three months ended	February 28, February 28, 2022 2021 535,752 $ 373,118 $ 34,642 15,465 For the three months ended	February 28, February 28, 2022 2021 963,383 $ 818,878 $ 56,635 33,907 For the six months ended	February 28, February 28, 2022 2021 963,383 $ 818,878 $ 56,635 33,907 For the six months ended
Gross Profit General and administrative Sales and marketing Amortization and depreciation 3, 4 Research and development	501,110 698,406 153,531 50,595 17,734	357,653 602,229 108,592 75,239 18,237	906,748 1,421,462 352,504 102,868 32,909	784,971 1,204,172 223,848 153,528 57,241
	920,266	804,297	1,909,743	1,638,789
OPERATING LOSS	(419,156)	(446,644)	(1,002,995)	(853,818)
OTHER INCOME (EXPENSES) Financing costs Government grants 6 Financing income Foreign exchange loss	(5,740) - 723 (6,351)	(3,236) 40,275 3,700 (9,934)	(12,222) 15,269 1,452 (5,314)	(4,694) 89,918 13,594 (8,358)
	(11,368)	30,805	(815)	90,460
NET LOSS OTHER COMPREHENSIVE INCOME GAIN (LOSS) Items that may be reclassified subsequently to net loss Translationgain(loss)on foreign operations	(430,524) (1,176)	(415,839) (1,160)	(1,003,810) 766	(763,358) (1,464)
COMPREHENSIVE LOSS	(431,700) $	(416,999) $	(1,003,044) $	(764,822) $
WEIGHTED AVERAGE NUMBER OF SHARES Basic and diluted 7 LOSS PER COMMON SHARE Basic and diluted 7	89,715,359 (0.005) $	87,572,573 (0.005) $	89,715,359 (0.011) $	87,572,573 (0.009) $

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

Page 2 of 18

WAVEFRONT TECHNOLOGY SOLUTIONS INC. Condensed Consolidated Interim Statements of Changes in Shareholders' Equity Three and six month periods ended February 28, 2022 and 2021

(Canadian dollars)

(Unaudited)

Balance at August 31, 2020 Net Loss Translation loss on foreign operations	Share capital	Warrants	Contributed surplus	Accumulated other comprehensive (loss)income	Deficit	Total
	67,299,083 - -	467,716 - -	9,414,471 - -	567,152 - (1,464)	(75,085,677) (763,358) -	2,662,745 $ (763,358) (1,464)
Balance at February 28, 2021 Net Income Translation loss on foreign operations Recognition of share-basedpayments	67,299,083 - - -	467,716 - - -	9,414,471 - - 48,865	565,688 - (322) -	(75,849,035) (610,999) - -	1,897,923 (610,999) (322) 48,865
Balance at August 31, 2021 Net Loss Translation loss on foreign operations Exercise of warrants Expiry of warrants Recognition of share-basedpayments	67,299,083 - - 1,054,806 29,627 -	467,716 - - (370,352) (29,627) -	9,463,336 - - - - 170,617	565,366 - 766 - - -	(76,460,034) (1,003,810) - - - -	1,335,467 (1,003,810) 766 684,454 - 170,617
Balance at February 28, 2022	68,383,516 $	67,737 $	9,633,953 $	566,132 $	(77,463,844) $	1,187,494 $

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

Page 3 of 18

WAVEFRONT TECHNOLOGY SOLUTIONS INC. Condensed Consolidated Statements of Cash Flows Six month period ended February 28, 2022 and 2021 (Canadian dollars) (Unaudited)

Note OPERATING ACTIVITIES Net loss Changes to net loss not involving cash Share-based payments 5 d Amortization and depreciation 3, 4 Impairment Impact of foreign translation Interest expense Changes to working capital Change in trade and other receivables Change in inventories Change in prepaid expenses Change in unearned revenue Interest paid Change in trade and otherpayables	February 28, 2022 (1,003,810) $ 170,617 102,868 1,546 (2,312) (12,222) (249,561) (81,848) (73,686) (19,631) 12,222 447,411	February 28, 2021 (763,358) $ - 153,528 - 1,625 (4,694) 254,696 19,609 (52,578) 13,804 4,694 (13,797)
Cash used in operatingactivities	(708,406)	(386,471)
FINANCING ACTIVITIES Payment for the principal portion of lease liability 4 Netproceeds from sharepurchase warrant exercise	(48,024) 684,454	(64,204) -
Cashproceeds from(used in)financingactivities	636,430	(64,204)
INVESTING ACTIVITIES Purchase of property, plant and equipment 3 Proceeds on disposal ofproperty, plant and equipment 3	(12,846) -	(46,613) (494)
Cash used in investingactivities	(12,846)	(47,107)
Foreign exchangegain(loss)on cash held in foreign currency	3,004	(2,387)
NET DECREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS,BEGINNING OF PERIOD	(81,817) 1,201,893	(500,169) 1,817,671
CASH AND CASH EQUIVALENTS,END OF PERIOD	1,120,076 $	1,317,502 $
CASH AND CASH EQUIVALENTS Cash denominated in CDN Cash denominated in USD Foreign currencytranslation amount	873,374 $ 194,284 52,418	1,290,369 $ 21,390 5,743
CASH AND CASH EQUIVALENTS,END OF PERIOD	1,120,076 $	1,317,502 $

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

Page 4 of 18

WAVEFRONT TECHNOLOGY SOLUTIONS INC. Notes to the Condensed Consolidated Interim Financial Statements Three and six months ended February 28, 2022 and 2021 (Canadian dollars) (Unaudited)

1. NATURE OF OPERATIONS AND CORPORATE INFORMATION

Wavefront Technology Solutions Inc.’s (“Wavefront” or the “Company”) is a technology service provider offering the oil and gas industry revolutionary technologies that optimize oil and gas well stimulation, workovers and cleanouts, and applications related to Improved/Enhanced Oil (“IOR/EOR”) recovery, marketed under the brand name, “Powerwave[TM] ”. Wavefront operates in the global marketplace dealing directly with E&P companies, and through a network of international distributors and agents.

The Company is incorporated under the Canada Business Corporations Act. Its shares are listed on the TSX Venture Exchange under the symbol of WEE, and also trades on the OTCQB International under the symbol of WFTSF.

The address of the registered head office of the Company is 5621 – 70 Street NW, Edmonton, Alberta. The Company is domiciled in Canada.

2. STATEMENT OF COMPLIANCE AND GOING CONCERN

a) Statement of compliance

These unaudited condensed consolidated interim financial statements (the “Financial Statements”) have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting using accounting policies under International Financial Reporting Standards (“IFRS”) for interim financial information. These Financial Statements have been prepared using the same accounting policies and methods of computation as the annual consolidated financial statements for the fiscal year ended August 31, 2021.

These Financial Statements were approved for issue on April 27, 2022.

b) Principles of consolidation

These unaudited condensed consolidated financial statements incorporate the financial statements of the Company and the entity controlled by the Company (its wholly owned subsidiary, Wavefront Technology Solutions USA Inc.). Control is achieved when the Company has the power to, directly or indirectly, govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that are presently exercisable or convertible are taken into account. Although the Company is domiciled in Canada, the Company’s principal focus is on international operations, and as such revenue generation is mainly outside Canada. Revenues derived in Canada for the three and six months ended February 28, 2022 and 2021 was $nil.

The financial statements of the subsidiary are included in the unaudited condensed consolidated financial statements from the date that control commences until the date that control ceases.

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WAVEFRONT TECHNOLOGY SOLUTIONS INC. Notes to the Condensed Consolidated Interim Financial Statements Three and six months ended February 28, 2022 and 2021 (Canadian dollars) (Unaudited)

All subsidiary companies are wholly owned and inter-company transactions, balances, revenues and expenses, and unrealized gains and losses have been eliminated on consolidation.

Unearned revenue, which was included in the contract liability balance at the beginning of the fiscal year, that was recognized in the three and six months ended February 28, 2022 was $19 and $51,137, respectively (2021 - $nil).

c) Going concern

These Financial Statements were prepared on a going concern basis. The going concern basis of accounting assumes that the Company will continue its operations for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business.

At February 28, 2022, the Company had yet to achieve profitable operations, had an accumulated deficit of $77,463,844 (August 31, 2021 - $76,460,034), and for the six month period ended February 28, 2022 had a net loss of $1,003,810 (February 28, 2021 - $763,358) and cash used in operations totaled $708,406 (February 28, 2021 – $386,471). It is unclear whether and when the Company can obtain profitability and positive cash flows from operations. These events and conditions form a material uncertainty that may raise significant doubt regarding the Company’s ability to continue as a going concern.

The Company currently has a working capital of $730,118 (August 31, 2021 - $840,506).

Although the Company has commenced certain expenditure curtailment to reduce monthly cash consumption, the Company, in accordance with its strategic plan, is currently consuming cash resources at a rate in excess of its operational cash inflow. As such, the Company’s ability to continue as a going concern is dependent on obtaining additional capital investment, the realization of assets, the further achievement of successful commercialization of its technologies and the improvement of cash flows from operations. Note 8 provides a more detailed description of the liquidity risk. During the prior reporting quarter the Company secured a $12,000,000 equity facility (“Facility”), which has yet to be drawn down. There can be no assurance that a draw against the Facility would be accepted, that the Facility will not be cancelled, or that the Company will be successful in raising additional capital, realizing assets, discharging liabilities or generating sufficient cash flows from operations to continue as a going concern.

These Financial Statements do not reflect the adjustments that might be necessary to the carrying amount of the reported assets, liabilities, revenues and expenses, and balance sheet classifications used if the Company was unable to continue operations in accordance with this assumption. Such adjustments may be material.

Page 6 of 18

WAVEFRONT TECHNOLOGY SOLUTIONS INC. Notes to the Condensed Consolidated Interim Financial Statements Three and six months ended February 28, 2022 and 2021 (Canadian dollars) (Unaudited)

d) New standards issued but not yet adopted

The following are the standards, amendments, and interpretations that the Company reasonably expects to be applicable at a future date and intends to adopt when they become effective. The Company is currently considering the impact of adopting these standards, amendments, and interpretations on its consolidated financial statements and cannot reasonably estimate the effect at this time, unless specifically mentioned below.

• (i) In January 2020, the IASB issued Classification of Liabilities as Current or Non-current (Amendments to IAS 1, First-time Adoption of International Financial Reporting Standards ). The amendments aim to promote consistency in applying the requirements by helping companies determine whether, in the statement of financial position, debt and other liabilities with an uncertain settlement date should be classified as current (due or potentially due to be settled within one year) or non-current. The amendments include clarifying the classification requirements for debt a company might settle by converting it into equity. The amendments are effective for annual reporting periods beginning on or after January 1, 2022, with earlier application permitted.

• (ii) In May 2020, the IASB issued Onerous Contracts-Cost of Fulfilling a Contract (Amendments to IAS 37, Provisions, Contingent Liabilities and Contingent Assets ). The amendments clarify which costs to include in assessing whether a contract is onerous. The amendments are effective January 1, 2022, with earlier application permitted.

• (iii) In February 2021, the IASB issued Definition of Accounting Estimates (Amendments to IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors ). The amendments define accounting estimates and clarify the distinction between changes in accounting estimates and changes in accounting policies. The amendments are effective for annual reporting periods beginning on or after January 1, 2023, with earlier application permitted.

• (iv) In February 2021, the IASB issued Disclosure of Accounting Policies (Amendments to IAS 1, Presentation of Financial Statements , and IFRS Practice Statement 2). The amendments provide guidance to help entities disclose the material (previously “significant”) accounting policies. The amendments are effective for annual reporting periods beginning on or after January 1, 2023, with earlier adoption permitted.

• (v) In April 2021, the IFRS Interpretations Committee (“IFRIC”) issued an agenda decision on the treatment of configuration and customization costs associated with cloud computing arrangements where the underlying software is not recognized as an intangible asset. The decision concluded that these costs may be capitalized as a separate intangible asset if they meet both the definition of an intangible asset and the recognition criteria in IAS 38, Intangible Assets . When these costs do not qualify for separate recognition as an intangible

Page 7 of 18

WAVEFRONT TECHNOLOGY SOLUTIONS INC. Notes to the Condensed Consolidated Interim Financial Statements Three and six months ended February 28, 2022 and 2021 (Canadian dollars) (Unaudited)

asset and not distinct from the software, these costs are expensed over the term of the software contract as provided.

• (vi) In May 2021, the IASB issued Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12, Income Taxes ). The amendments narrow the scope of the recognition exemption so that companies would be required to recognize deferred tax for transactions that give rise to equal amounts of taxable and deductible temporary differences, such as leases. The amendments are effective for annual reporting periods beginning on or after January 1, 2023, with earlier adoption permitted, applied retroactively.

The Company is currently considering the impact of adopting these standards, amendments, and interpretations on its consolidated financial statements.

3. PROPERTY, PLANT AND EQUIPMENT

Asat February28,2022	Tools and equipment	Computer, automotive and office equipment	Leasehold improvements Total
Cost Balance at August 31, 2021 Additions Impairment Impactof foreign translation	3,308,557 $ 11,002 (7,025) 1,243	727,830 $ 1,843 - 739	620,807 $ 4,657,194 $ - 12,845 - (7,025) - 1,982
Balanceat February28,2022	3,313,777	730,412	620,807 4,664,996
Accumulated depreciation Balance at August 31, 2021 Depreciation Impairment Impactof foreign translation	(2,921,424) (44,375) 5,479 (1,135)	(701,796) (3,460) - (772)	(594,343) (4,217,563) (2,966) (50,801) - 5,479 - (1,907)
Balanceat February28,2022	(2,961,455)	(706,028)	(597,309) (4,264,792)
Net book value Balance at February28,2022	352,322 $	24,384 $	23,498 $ 400,204 $

Depreciation expense on property, plant and equipment for the three and six months ended February 28, 2022 was $24,562 and $50,801, respectively (February 28, 2021 - $40,272 and $79,742, respectively). The net impairment of $1,546 (2021 - $nil) relates to the specific Powerwave tools and was recorded to costs of goods sold in the Condensed Consolidated Interim Statements of Net Loss and Comprehensive Loss.

Page 8 of 18

WAVEFRONT TECHNOLOGY SOLUTIONS INC. Notes to the Condensed Consolidated Interim Financial Statements Three and six months ended February 28, 2022 and 2021 (Canadian dollars) (Unaudited)

4. RIGHT-OF-USE ASSETS AND LEASE LIABILITIES

The Company’s leases consist of a lease for its office and warehouse space, and various short-term and/or low value leases for other equipment, such as cellular phones and office equipment.

The Company leases a building for its office and warehouse space in Edmonton, Alberta. In a previous reporting period, the Company entered into a new lease for a period of five years commencing February 1, 2021. The building lease does not include a lease extension option.

The Company reassesses leases when a significant event or a significant change in circumstances within the Company’s control has occurred.

Additions Depreciation Payment As at August 31, 2021	Right-of-useasset Leaseliability
	Building Total
	459,929 $ (495,729) $ - - (52,067) - - 48,024
As at February28,2022	407,862 $ (447,705) $
statement of net loss and comprehensive loss Amounts recognized in the condensed consolidated interim	Three months ended Six months ended February 28, February 28, 2022 2022
Depreciation expense on right-of-use asset Interest expense on lease liabilities Expense related to variable lease payments not included in the measurement of the lease liability Expense related to leases of low value assets Expense related to leases of short-term leases	26,034 $ 52,067 $ 5,740 11,776 14,739 29,478 3,552 7,171 - -
Total	50,065 $ 100,492 $

Variable lease payments include operating and maintenance expenses, property taxes, and other variable costs. The estimated balance of future variable lease payments is estimated at $230,910. Overall, the variable payments constitute up to 31.9% of the Company’s entire lease payments.

Page 9 of 18

WAVEFRONT TECHNOLOGY SOLUTIONS INC. Notes to the Condensed Consolidated Interim Financial Statements Three and six months ended February 28, 2022 and 2021 (Canadian dollars) (Unaudited)

Amounts recognized in consolidated statement		Six months ended
of cash flows		February 28, 2022
Cash payments for interest portion of lease liabilities	$	11,776
Cash payments for leases not included in measurement of lease liability		29,478
Cash outflows in operating activities		41,254
Cash payments for the principal portion of lease liability		48,024
Cash outflows in financing activities		48,024
Total cash outflows for leases	$	89,278

The Company also leases cellular telephone and other equipment with terms of three years or shorter. These leases are generally short-term or for low-value assets that the Company has elected not to recognize in the right-of-use assets and lease liabilities.

5. SHARE CAPITAL

The Company’s authorized and issued share capital is as follows:

a) Authorized share capital

Unlimited common shares without par value.

b) Issued common shares

The Company’s issued share capital is as follows:

The changes in the Company’s outstanding common shares were as follows:

Balance, beginning of period Warrants exercised(i) Expiryof$0.20 Warrants(i)	February28,2022
	Stated Number capital 87,572,573 67,299,083 $ 3,437,592 1,054,806 - 29,627
Balance,end ofperiod	91,010,165 68,383,516 $

Page 10 of 18

WAVEFRONT TECHNOLOGY SOLUTIONS INC. Notes to the Condensed Consolidated Interim Financial Statements Three and six months ended February 28, 2022 and 2021 (Canadian dollars) (Unaudited)

• (i) During the prior reporting period ended November 30, 2021, 3,437,592 share purchase warrants exercisable at $0.20 were exercised into an equal number of common shares, for gross proceeds of $687,518, with 275,000 share purchase warrants exercisable at $0.20 expiring unexercised as at November 25, 2021.

• c) Share purchase warrants

Balance, August 31, 2021 Exercises Expiry	Number	Weighted average Amount exercise price
	4,341,333 (3,437,592) (275,000)	467,716 $ 0.24 $ (370,352) (0.20) (29,627) (0.20)
Balance,February28,2022	628,741	67,737 $ 0.45 $

• (i) As part of the Private Placement in fiscal 2018, subscribers received 4,341,333 Warrants (“Warrants”), with each Warrant being exercisable for one common share of the Company at an exercise price of $0.45 for a period of 12 months after the closing date, expiring July 17, 2019; provided that, commencing on the date that is four months and one day after the closing of the Offering, if the volume weighted average trading price of a common share on the Exchange is at a price equal to or greater than $0.65 for a period of more than 20 consecutive trading days.

• (ii) During the year ended August 31, 2019, the Company extended the Warrants term by one year, such that their expiry is July 17, 2020. All other terms of the Warrants remained the same.

During the fiscal ended August 31, 2020, the Company elected to further extend the term of the 4,341,333 Warrants one additional year to July 17, 2021, and to decrease the exercise price of 3,712,592 of those Warrants from $0.45 to $0.20 per share. In accordance with TSX Venture Exchange (“TSX-V”) policies re-priced insider Warrants were restricted to 10% of the repriced Warrants; and thus, the remaining 628,741 warrants had no reduction in exercise price.

Consistent with the TSX-V policies, the amended Warrants that are repriced will include an accelerated expiry clause such that their exercise period will be reduced to 30 days if, for any ten consecutive trading days during their unexpired term, the closing trading price of the common shares of the Company exceeds $0.25 per share.

• (iii) During the fiscal ended August 31, 2021, the Company elected to further extend the term of the 4,341,333 Warrants for one more additional year to July 17, 2022. All other terms of the Warrants remained the same.

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WAVEFRONT TECHNOLOGY SOLUTIONS INC. Notes to the Condensed Consolidated Interim Financial Statements Three and six months ended February 28, 2022 and 2021 (Canadian dollars) (Unaudited)

• (iv) During the first quarter 2022 (i.e., the period ended November 30, 2021), the Company announced that a Triggering Event had occurred in relation to the 3,712,592 share purchase warrants exercisable at $0.20, as originally issued by the Company on July 17, 2018. The Triggering Event, resulting from the 10-day closing price of the common shares of the Company, as traded on the TSX Venture Exchange exceeding $0.20 per common share, and thus, the expiry date of the 3,712,592 share purchase warrants exercisable at $0.20 was no longer July 17, 2022 but November 25, 2021.

As a result of the Triggering Event, during the reporting period ended November 30, 2021, 3,437,592 share purchase warrants exercisable at $0.20 were exercised into an equal number of common shares, for net proceeds of $684,454, with 275,000 share purchase warrants exercisable at $0.20 expiring unexercised as at November 25, 2021.

d) Stock-based compensation plan

The Company maintains an Employee, Director, Officer and Consultant Stock Option Plan under which the Company may grant incentive stock options for up to 10,771,558 shares of the Company at an exercise price not be less than the “Discounted Market Price” (as defined in the policies of the TSX Venture Exchange), provided that the exercise price shall not be less than $0.05 per share. All stock options awarded are exercisable for a period of up to ten years and vest, at a minimum, in equal tranches at three-month intervals over a period of eighteen months.

Movements in stock options during the period

A summary of the status of the Company’s Stock Option Plan is presented below:

Outstanding, beginning of period Granted	February28,2022
	Number Weighted average exercise price
	2,800,000 $ 0.22 1,800,000 0.17
Outstanding,end ofperiod	4,600,000 $ 0.20

Of the 1,800,000 stock options that were issued in the prior reporting quarter ended November 30, 2021, 1,200,000 were issued to Directors and Officers of the Company.

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WAVEFRONT TECHNOLOGY SOLUTIONS INC. Notes to the Condensed Consolidated Interim Financial Statements Three and six months ended February 28, 2022 and 2021 (Canadian dollars) (Unaudited)

Fair value of stock options granted during the period

The fair value for the compensation costs of stock options issued to both employees and nonemployees were calculated using the Black-Scholes option pricing model resulting in an additional charge to general and administrative expense with a corresponding increase in share-based payment reserve.

During the three and six months ended February 28, 2022, the Company incurred $170,617 and $83,611, respectively (February 28, 2021 - $nil) in compensation expense relating to outstanding stock options.

e) Contributed surplus

Balance, beginning of period Share-based payments	February28,2022
	9,463,336 $ 170,617
Balance,end ofperiod	9,633,953 $

6. GOVERNMENT ASSISTANCE

In response to the World Health Organization’s declared coronavirus (“COVID-19”) pandemic, governments have established various programs to assist companies through this period of uncertainty, like the implementation of the Canada Emergency Wage Subsidy (“CEWS”) and Canada Emergency Rent Subsidy (“CERS”) programs. The Company recorded non-refundable contributions under the CEWS and CERS programs in the comparable periods for three and six months ended February 28, 2022 of $nil and $15,269, respectively (three and six months ended February 28, 2021 - $40,275 and $89,918, respectively), with $nil included in accounts receivable (August 31, 2020 - $31,944).

7. LOSS PER SHARE

The weighted average number of common shares outstanding for basic and diluted loss per share is 89,715,359 (February 28, 2021 – 87,572,573).

In determining diluted loss per share, the weighted average number of shares outstanding for the period ended February 28, 2022 excluded 3,000,329 (February 28, 2021 – nil) for stock options and share purchase warrants eligible for exercise where the average market price of the common shares for the year exceeds the exercise price because the result was anti-dilutive in both periods.

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WAVEFRONT TECHNOLOGY SOLUTIONS INC. Notes to the Condensed Consolidated Interim Financial Statements Three and six months ended February 28, 2022 and 2021 (Canadian dollars) (Unaudited)

8. FINANCIAL INSTRUMENTS

a) Categories of financial instruments

The Company has classified its financial instruments as follows:

Financial assets Cash and cash equivalents Trade and other receivables Deposits Financial liabilities Unearned revenue Trade accountspayable and accrued liabilities	February 28, August 31, 2022 2021 1,120,076 $ 1,201,893 $ 443,165 193,604 14,150 14,150 58,410 78,041 941,363 490,985

b) Foreign currency risk

The following table provides an indication of the Company’s exposure to changes in the value of the U.S. dollar relative to the Canadian dollar as at and for the periods ended February 28, 2022 and August 31, 2021. The analysis is based on financial assets and liabilities denominated in U.S. dollars at the statement of financial position date (“statement of financial position exposure”), and U.S. dollar denominated revenue and operating expenses during the year (“operating exposure”).

Financial assets Cash and cash equivalents Trade and other receivables Financial liabilities Unearned revenue Trade accounts payable and accruedliabilities	February 28, August 31, 2022 2021 U.S.Dollars U.S.Dollars 194,284 $ 263,089 $ 332,619 125,795 (62,764) (71,026) (376,221) (93,134)
Net statement of financialposition exposure	87,918 224,724

Based on the Company’s foreign currency exposure, as noted above, with other variables unchanged, a 5% change in the Canadian dollar against the US dollar as at February 28, 2022 would have impacted the comprehensive net loss by $4,396 (August 31, 2021 - $11,236).

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WAVEFRONT TECHNOLOGY SOLUTIONS INC. Notes to the Condensed Consolidated Interim Financial Statements Three and six months ended February 28, 2022 and 2021 (Canadian dollars) (Unaudited)

c) Credit risk

Assets that subject the Company to credit risk consist primarily of cash and cash equivalents, trade and other receivables, and, if applicable, any indemnifications. The Company applies the simplified approach to trade and other receivables and recognizes a loss allowance provision based on lifetime expected credit losses (“ECLs”). The loss provision is based on the Company’s historical collection and loss experience and incorporates forward-looking factors, where appropriate. The loss provision is included in administrative costs in the Financial Statements and is net of any recoveries that were provided for in a prior period.

Trade receivables are included in trade and other receivables on the statements of financial position and consist of the following:

Trade and other receivables Current Past due but not impaired Aged between 31 - 90 days Aged between 91 - 120 days Aged greater than 121days	February 28, August 31, 2022 2021 330,109 $ 143,468 $ 88,251 19,197 - 31,543 28,411 -
Total trade and other receivables Allowancefordoubtful accounts	446,771 194,208 (3,606) (604)
	443,165 $ 193,604 $

Reconciliation of allowance for doubtful accounts:

Balance, beginning of period Increase in allowance Net ofwrite-offs andrecoveries	February 28, August 31, 2022 2021 604 $ 1,761 $ 4,708 604 (1,706) (1,761)
Balance,end ofperiod	3,606 $ 604 $

The maximum exposure to credit risk at the reporting date by geographical region was (carrying amount):

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WAVEFRONT TECHNOLOGY SOLUTIONS INC. Notes to the Condensed Consolidated Interim Financial Statements Three and six months ended February 28, 2022 and 2021 (Canadian dollars) (Unaudited)

North America Middle East Other International	February 28, August 31, 2022 2021 71,260 $ 108,728 $ 371,905 84,876 - -
	443,165 $ 193,604 $

d) Liquidity risk

Liquidity risk is the risk that an entity will encounter difficulty in meeting its obligations associated with financial liabilities as they become due. The Company manages liquidity risk through various sources, including cash generated from operations, cash management and by monitoring forecasted cash flows.

The timing of undiscounted cash flows of financial liabilities based on the earliest date on which the Company may be required to pay is outlined below.

Contractual commitments Trade accounts payable and accrued liabilities Commitments and variable lease paymentsi Lease liabilitiesi	0 to 3 months	4 to 12 months	Year 2	Years After 5 3 to 5 years
	27,576 $ 615,225 14,884 29,900	- $ 320,205 44,652 90,187	- $ - 59,537 125,721	- $ - $ - - 114,112 - 246,675 -
	687,585 $	455,044 $	185,258 $	360,787 $ - $

i) The Company entered into a new lease for a period of five years commencing February 1, 2021. For the balance of the term of the new five-year lease, the total estimated commitments and variable lease payments are estimated to be $230,910, with the future lease liabilities estimated at $445,884. The new lease commitments are included in the above table.

Despite the re-opening of many countries, COVID-19 and the various variants continue to have some impact on the Company’s access to oil fields. In addition, various end users or clients continue to be impacted by supply chain (i.e., acid manufacturing and availability, coiled tubing and rig parts and availability, etc.) issues and operating budget constraints, which have created additional delays in most of the regions in which the Company operates. Wavefront, however, has not been materially directly impacted by supply chain issues related to Powerwave tool development or deployment. The timeframe to gain access and the resolution of end user or client supply chain issues is currently unknown.

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WAVEFRONT TECHNOLOGY SOLUTIONS INC. Notes to the Condensed Consolidated Interim Financial Statements Three and six months ended February 28, 2022 and 2021 (Canadian dollars) (Unaudited)

These factors, amongst others, are likely to have a negative impact on the Company’s credit and liquidity risks, as well as, maintaining revenues and earnings, cash flows, and Wavefront’s financial condition.

9. SEGMENTED INFORMATION

The Company is an oil field service provider and operates with one reportable segment that covers all aspects of the Company’s business.

Wavefront considers the basis on which it is organized, including the economic characteristics and geographic areas, in identifying its reportable segment. The operating segment(s) of the Company is defined as a component(s) of the Company for which separate financial information is available and is evaluated regularly by the chief operating decision maker in allocating resources and assessing performance. The chief operating decision maker of the Company is the President and Chief Executive Officer. The Company has one group of similar products due to having a similar underlying technology, class of customers, and economic characteristics.

Geographic information

North America Middle East Other International	Revenue three months ended	Revenue three months ended	Revenue six months ended	Revenue six months ended	Assets
	February 28, 2022	February 28, 2021	February 28, 2022	February 28, 2021	February 28, August 31, 2022 2021
	53,886 $ 481,866 -	42,181 $ 320,945 9,992	105,541 $ 788,907 68,935	95,309 $ 704,338 19,231	2,132,280 $ 2,164,339 $ 515,356 243,420 4,638 12,731
	535,752 $	373,118 $	963,383 $	818,878 $	2,652,274 $ 2,420,490 $

For its geographic segments, the Company has allocated assets based on their physical location and revenue based on the location of the customer. Of the revenues recognized for the three months ended February 28, 2022 in the Middle East, revenues of $287,925 (February 28, 2021 - $285,315) were derived from Kuwait, and revenues of $124,298 (February 28, 2021 - $35,630) were derived from the Kingdom of Saudi Arabia; whereas of the revenues recognized in North America, $53,886 (February 28, 2021 - $42,181) were derived from the United States.

Of the revenues recognized for the six months ended February 28, 2022 in the Middle East, revenues of $571,845 (February 28, 2021 - $577,672) were derived from Kuwait, and revenues of $145,931 (February 28, 2021 - $126,666) were derived from the Kingdom of Saudi Arabia; whereas of the revenues recognized in North America, $105,541 (February 28, 2021 - $95,309) were derived from the United States.

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WAVEFRONT TECHNOLOGY SOLUTIONS INC. Notes to the Condensed Consolidated Interim Financial Statements Three and six months ended February 28, 2022 and 2021 (Canadian dollars) (Unaudited)

Significant customers

Sales in the three months ended February 28, 2022 from the top three customers amounted to $287,925, $45,478 and $41,676, which represented 53.7%, 8.5% and 7.8%, respectively, of total revenue. Sales in the three months ended February 28, 2021, from the top three customers amounted to $285,315, $35,199 and $23,237, which represented 76.5%, 9.4% and 6.2%, respectively, of total revenue.

Sales in the six months ended February 28, 2022 from the top three customers amounted to $571,845, $57,981 and $53,082, which represented 59.4%, 6.0% and 5.5% respectively, of total revenue. Sales in the six months ended February 29, 2021, from the top three customers amounted to $577,672, $100,472 and $45,029, which represented 70.5%, 12.3% and 5.5%, respectively, of total revenues.

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