AgJunction : 2nd Quarter FS

Condensed Consolidated Interim Financial Statements of

Three and six month periods ended June 30, 2021

(Unaudited - expressed in U.S. dollars)

AgJunction Inc.

Condensed Consolidated Statements of Financial Position (Unaudited - expressed in U.S. thousand dollars)

	June 30,	December 31,
	2021	2020
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	5,807	$	6,773
Accounts receivable, net		846		2,051
Current portion of notes receivable, net		320		320
Inventories		8,572		8,694
Contract assets, net		-		7
Prepaid expenses and deposits		530		781
		16,075		18,626
Notes receivable, less current portion, net		869		1,002
Property, plant and equipment, net		893		950
Right-of-use assets, net (note 6)		703		661
Intangible assets, net		9,578		9,957
Goodwill		143		143
	$	28,261	$	31,339
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued liabilities	$	2,555	$	2,901
Provisions (note 5)		45		352
Current portion of lease liability (note 6)		409		368
Current portion of deferred revenue		2,052		1,288
		5,061		4,909
Deferred revenue, less current portion		1,959		2,425
Lease liability, net of current portion (note 6)		332		334
Paycheck Protection Program Loan (note 8)		1,466		-
Total liabilities		8,818		7,668
Shareholders' equity:
Share capital (note 3)		23,495		23,495
Equity reserve		5,308		5,103
Accumulated deficit		(9,360)		(4,927)
		19,443		23,671
	$	28,261	$	31,339

• The December 31, 2020 balance sheet figures have been derived from the audited consolidated financial statements as of that date.

See accompanying notes to condensed consolidated interim financial statements.

AgJunction Inc.

Condensed Consolidated Statements of Profit or Loss

Three and six months ended June 30, 2021 and 2020 (Unaudited - expressed in U.S. thousand dollars)

See accompanying notes to condensed consolidated interim financial statements.

		Three months ended		Six months ended
			June 30,				June 30,
		2021		2020		2021		2020
Revenue (note 4)	$	3,356	$	4,601	$	5,812	$	9,802
Cost of sales		1,840		2,745		3,310		5,003
Gross Profit		1,516		1,856		2,502		4,799
		45.2%		40.3%		43.0%		49.0%
Expenses:
Research and development		1,228		1,110		2,538		2,164
Sales and marketing		566		302		1,092		1,142
General and administrative		1,733		1,758		3,299		3,359
Total Operating Expenses		3,527		3,170		6,929		6,665
Operating (loss) income		(2,011)		(1,314)		(4,427)		(1,866)
Interest and other income		(2)		(19)		(7)		(78)
Foreign exchange (gain) loss, net		4		4		13		32
Total Other (Income) Expenses		2		(15)		6		(46)
Net (loss) income	$	(2,013)	$	(1,299)	$	(4,433)	$	(1,820)
Loss per share	$	(0.02)	$	(0.01)	$	(0.04)	$	(0.01)

AgJunction Inc.

Condensed Consolidated Statements of Changes in Equity (Unaudited - expressed in U.S. thousand dollars)

	Share		Equity					Total	Number of
	capital		reserve		Deficit		equity	shares
Balance at January 1, 2020	$	148,495		$	4,890		$	(124,622)		$	28,763	117,073
Net (loss)		-			-			(1,820)			(1,820)	-
Share-based payment transactions		-			20			-			20	-
Issue of restricted stock awards,		-			-			-			-	4,019
net of cancellations
Reduction in stated capital		(125,000)			-			125,000			-	-
Balance at June 30, 2020	$	23,495	$		4,910	$		(1,442)	$		26,963	121,092
Balance at January 1, 2021	$	23,495		$	5,103		$	(4,927)		$	23,671	121,092
Net (loss)		-			-			(4,433)			(4,433)	-
Share-based payment transactions		-			205			-			205	-
Issue of restricted stock awards,		-			-			-			-	(274)
net of cancellations
Balance at June 30, 2021	$	23,495	$		5,308	$		(9,360)	$		19,443	120,818

See accompanying notes to condensed consolidated interim financial statements.

AgJunction Inc.

Condensed Consolidated Statements of Cash Flows

Six months ended June 30, 2021 and 2020 (Unaudited - expressed in U.S. thousand dollars)

	2021		2020
Cash flows used in operating activities:
Net (loss) income		(4,433)	$	(1,820)
Items not involving cash:
Depreciation		319		382
Amortization		1,351		880
Share-based payment transactions		205		20
Allowance loss on trade receivables		-		2
Recovery (write down) of reserve for slow moving
and obsolete inventories		-		7
Change in operating working capital:
Accounts receivable		1,205		(745)
Inventories		122		3
Contract assets		7		-
Prepaid expenses and deposits		251		132
Accounts payable and accrued liabilities		(346)		867
Provisions (note 5)		(307)		(571)
Deferred revenue		298		(445)
Cash flows (used in) operating activities:		(1,328)		(1,288)
Cash flows used in financing activities:
Interest payments on lease liabilities (note 6)		(15)		(24)
Principal payments on lease liabilities (note 6)		(171)		(229)
Paycheck Protection Program Loan proceeds		1,466		1,540
Paycheck Protection Program Loan repayment		-		(1,540)
Cash flows provided by (used in) financing activities:		1,280		(253)
Cash flows used in investing activities:
Principal payments received on notes receivable		133		134
Purchase of property, plant and equipment		(79)		(30)
Intangible asset addition, net		(972)		(1,016)
Cash flows (used in) investing activities:		(918)		(912)
Increase (decrease) in cash and cash equivalents		(966)		(2,453)
Cash and cash equivalents, beginning of period		6,773		17,248
Cash and cash equivalents, end of period	$	5,807	$	14,795

See accompanying notes to condensed consolidated interim financial statements.