Condensed Consolidated Interim Financial Statements
For the three and six months ended December 31, 2021 and 2020
(Unaudited, expressed in Canadian dollars, unless otherwise stated)
191 West 2nd Avenue
Vancouver, BC, V5Y 1B8
CHOOM HOLDINGS INC.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION (Unaudited, expressed in Canadian Dollars)
Notes | December 31, | June 30, | |||||
2021 | 2021 | ||||||
ASSETS (Note 11) | |||||||
Current | |||||||
Cash | $ | 684,628 | $ | 268,507 | |||
Short-term investments | 46,000 | 46,000 | |||||
Trade and accounts receivable | 3 | 220,831 | 356,860 | ||||
Notes receivable | 4 | - | 485,245 | ||||
Inventory | 5 | 517,581 | 909,478 | ||||
Prepaid expenses and deposits | 20 | 196,215 | 225,272 | ||||
1,665,255 | 2,291,362 | ||||||
Non-Current | |||||||
Prepaid expenses and lease deposits | 20 | 369,293 | 575,292 | ||||
Property and equipment | 6 | 3,483,665 | 4,477,387 | ||||
Right-of-use assets | 8 | 6,747,853 | 7,366,878 | ||||
Intangible assets | 7 | 6,619,536 | 10,433,974 | ||||
Investment | 715,282 | 715,282 | |||||
Goodwill | 7 | - | 346,091 | ||||
Total assets | $ | 19,600,884 | $ | 26,206,266 | |||
LIABILITIES | |||||||
Current | |||||||
Trade and other payables | 9,10,11,15 | $ | 2,461,798 | $ | 6,035,477 | ||
Convertible debentures | 11 | - | 3,907,348 | ||||
Provision for restructuring fee | 11,23 | 200,266 | - | ||||
Lease liabilities | 8 | 1,492,189 | 2,242,435 | ||||
Notes payable | 10 | 1,250,000 | - | ||||
Government assistance | 21 | 445,321 | 201,618 | ||||
5,849,574 | 12,386,878 | ||||||
Non-Current | |||||||
Lease liabilities | 8 | 6,912,239 | 6,652,660 | ||||
Notes payable | 10 | - | 1,250,000 | ||||
Government assistance | 21 | - | 240,000 | ||||
Convertible debentures | 11 | 8,399,827 | 15,871,343 | ||||
Provision for restructuring fee | 11,23 | 924,233 | - | ||||
Deferred tax liability | 7 | 329,446 | 961,740 | ||||
Total liabilities | $ | 22,415,319 | 37,362,621 | ||||
SHAREHOLDERS' DEFICIENCY | |||||||
Share capital | 12 | 139,476,539 | 131,147,686 | ||||
Equity portion of convertible debentures | 11 | 1,929,933 | 5,739,326 | ||||
Contributed surplus | 11,12,13 | 14,434,956 | 9,779,911 | ||||
Accumulated other comprehensive loss | (13,066) | (10,673) | |||||
Accumulated deficit | (158,642,797) | (157,812,605) | |||||
Total shareholders' deficiency | (2,814,435) | (11,156,355) | |||||
Total liabilities and shareholders' deficiency | $ | 19,600,884 | $ | 26,206,266 |
Approved on behalf of the Board of Directors by: | |||
"Stephen Tong" | "Christopher Bogart" | ||
Stephen Tong | Christopher Bogart |
The accompanying notes form an integral part of these condensed consolidated interim financial statements.
2
CHOOM HOLDINGS INC.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF LOSS AND COMPREHENSIVE LOSS (Unaudited, expressed in Canadian Dollars)
Three Months Ended | Six Months Ended | ||||||||
December 31, | December 31, | ||||||||
Notes | 2021 | 2020 | 2021 | 2020 | |||||
REVENUES | |||||||||
Revenue | $ | 4,214,584 | $ | 6,077,523 | $ | 9,055,341 | $ | 12,062,938 | |
Cost of sales | (2,632,747) | (3,867,299) | (5,674,061) | (7,730,638) | |||||
GROSS PROFIT | 1,581,837 | 2,210,224 | 3,381,280 | 4,332,300 | |||||
EXPENSES | |||||||||
General and administrative | 14 | $ | 817,883 | $ | 926,093 | $ | 1,679,492 | $ | 1,929,612 |
Salary, wages, and benefits | 15,21 | 1,265,217 | 1,107,617 | 2,563,569 | 2,152,401 | ||||
Depreciation and amortization | 6,7,8 | 1,034,214 | 633,217 | 1,952,706 | 1,210,236 | ||||
Share-based payments | 13(c) | 160,796 | 440,305 | 475,922 | 559,067 | ||||
Operating expenses | (3,278,110) | (3,107,232) | (6,671,689) | (5,851,316) | |||||
Loss from operations | (1,696,273) | (897,008) | (3,290,409) | (1,519,016) | |||||
OTHER ITEMS | |||||||||
Other income | 62,976 | 53,119 | 74,242 | 82,453 | |||||
Financing costs | 8,10,11 | (571,241) | (1,422,400) | (1,202,250) | (2,481,447) | ||||
Gain on extinguishment of debt | 11 | - | - | 7,044,619 | - | ||||
Change in fair value of provision for restructuring fee | 23 | 467,074 | - | 467,074 | - | ||||
Impairment of property and equipment | 6,8 | (1,168,602) | (35,595) | (1,168,602) | (151,030) | ||||
Impairment of intangible assets and goodwill | 6,7 | (3,643,248) | - | (3,643,248) | - | ||||
Other expenses | 12(a) | (40,650) | (778,205) | (326,110) | (927,842) | ||||
Loss before income tax | (6,589,964) | (3,080,089) | (2,044,684) | (4,996,882) | |||||
Current income tax recovery | 57,203 | - | 55,129 | - | |||||
Deferred tax recovery | 7,11 | 632,294 | - | 1,192,376 | - | ||||
Loss from continuing operations | (5,900,467) | (3,080,089) | (797,179) | (4,996,882) | |||||
Income/(loss) from discontinued operations | 17 | 1,525 | (282,938) | (33,013) | (1,345,285) | ||||
Net loss for the period | (5,898,942) | (3,363,027) | (830,192) | (6,342,167) | |||||
Other comprehensive loss | (554) | (6,034) | (2,393) | (4,356) | |||||
Net comprehensive loss | $ | (5,899,496) | $ | (3,369,061) | $ | (832,585) | $ | (6,346,523) | |
Net income/(loss) per share | |||||||||
Continuing operations, basic and diluted | 16 | $ | (0.01) | $ | (0.01) | $ | (0.00) | $ | (0.02) |
Discontinued operations, basic and diluted | 16 | $ | 0.00 | $ | (0.00) | $ | (0.00) | $ | (0.01) |
The accompanying notes form an integral part of these condensed consolidated interim financial statements.
3
CHOOM HOLDINGS INC.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIENCY (Unaudited, expressed in Canadian Dollars)
Share Capital | ||||||||||||||||
Equity | Accumulated | |||||||||||||||
Obligation | Portion of | Other | ||||||||||||||
to Issue | Convertible | Contributed | Comprehensive | Accumulated | ||||||||||||
Shares | Amount | Shares | Debentures | Surplus | Loss | Deficit | Total | |||||||||
June 30, 2020 | 225,753,870 | $ | 121,460,291 | $ | 771,900 | $ | 5,739,326 | $ | 8,801,591 | $ | - | $ | (136,189,760) | $ | 583,348 | |
Net loss for the period | - | - | - | - | - | (4,356) | (6,342,167) | (6,346,523) | ||||||||
Shares issued for acquisition | 64,608,187 | 6,460,819 | - | - | 134,384 | - | - | 6,595,203 | ||||||||
Shares issued for services | 2,530,010 | 212,083 | - | - | - | - | - | 212,083 | ||||||||
Shares issued for debt | 3,755,747 | 362,603 | - | - | - | - | - | 362,603 | ||||||||
Share commitments issued | 374,709 | 385,950 | (385,950) | - | - | - | - | - | ||||||||
Share-based payments | - | - | - | - | 559,068 | - | - | 559,068 | ||||||||
Share issue costs | - | (5,382) | - | - | - | - | - | (5,382) | ||||||||
December 31, 2020 | 297,022,523 | $ | 128,876,364 | $ | 385,950 | $ | 5,739,326 | $ | 9,495,043 | $ | (4,356) | $ | (142,531,927) | 1,960,400 | ||
Notes | ||||||||||||||||
June 30, 2021 | 325,504,273 | $ | 131,147,686 | $ | - | $ | 5,739,326 | $ | 9,779,911 | $ | (10,673) | $ | (157,812,605) | $ | (11,156,355) | |
Net loss for the period | - | - | - | - | - | (2,393) | (830,192) | (832,585) | ||||||||
Shares issued for debt | 4,12 | 3,174,603 | 200,000 | - | - | - | - | - | 200,000 | |||||||
Shares issued for services | 12 | 3,476,923 | 224,000 | - | - | - | - | - | 224,000 | |||||||
Extinguishment of debentures | 11 | 79,754,843 | 5,184,065 | - | (3,809,393) | 3,249,311 | - | - | 4,623,983 | |||||||
Shares issued for the Offering | 12 | 43,750,000 | 2,843,750 | - | - | 656,250 | - | - | 3,500,000 | |||||||
Shares issued for private placement | 12 | 10,000,000 | 350,000 | - | - | 150,000 | - | - | 500,000 | |||||||
Share-based payments | 13(c) | - | - | - | - | 475,922 | - | - | 475,922 | |||||||
Share issue costs | 12 | 1,312,500 | (472,962) | - | - | 123,562 | - | - | (349,400) | |||||||
December 31, 2021 | 466,973,142 | $ | 139,476,539 | $ | - | $ | 1,929,933 | $ | 14,434,956 | $ | (13,066) | $ | (158,642,797) | $ | (2,814,435) |
The accompanying notes form an integral part of these condensed consolidated interim financial statements.
4
CHOOM HOLDINGS INC.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS (Unaudited, expressed in Canadian Dollars)
Six Months Ended December 31,
Notes | 2021 | 2020 | |||
OPERATING ACTIVITIES | |||||
Net loss for the period from continuing operations | $ | (797,179) | $ | (4,996,882) | |
Items not affecting cash: | |||||
Depreciation and amortization | 6,7,8 | 1,952,706 | 1,210,236 | ||
Share-based payments | 13(c) | 475,922 | 559,067 | ||
Shares issued for services | 12 | 224,000 | 212,083 | ||
Financing costs | 8,10,11 | 421,084 | 1,080,852 | ||
Gain on extinguishment of debt | 11 | (7,044,619) | - | ||
Deferred tax recovery | 7,11 | (1,192,376) | - | ||
Foreign exchange loss | 3,640 | - | |||
Change in fair value of provision for restructuring fee | 23 | (467,074) | - | ||
Impairment of property and equipment | 6,8 | 1,168,602 | 333,558 | ||
Impairment of intangible assets and goodwill | 6,7 | 3,643,248 | - | ||
Fair value loss and impairment of marketable securities | - | 374 | |||
Accretion income | - | (30,799) | |||
Loss on settlement of debt | - | 54,132 | |||
Loss on sale of inventory | - | 100,218 | |||
Gain on derecognition of lease agreements | - | (40,018) | |||
Gain on sale of property and equipment | - | (2,342) | |||
Net cash used in operations prior to changes in working capital | (1,612,046) | (1,519,521) | |||
Changes in non-cash working capital: | |||||
Trade and accounts receivable | 3 | 99,758 | 61,798 | ||
Inventory | 5 | 391,897 | 71,338 | ||
Trade and other payables | 9,10,11,15 | (865,857) | 370,532 | ||
Prepaid expenses | 20 | (25,943) | 98,825 | ||
Net cash used in operating activities from continuing operations | (2,012,191) | (917,028) | |||
Net cash used in discontinued operations | 17 | (1,341) | (48) | ||
Net cash used in operating activities | (2,013,532) | (917,076) | |||
INVESTING ACTIVITIES | |||||
Capital expenditures | 6,7,8 | (488,477) | (264,383) | ||
Acquisition of Phivida | - | 1,438,249 | |||
Proceeds from sale of assets | - | 469,426 | |||
Net cash provided by/(used in) investing activities | (488,477) | 1,643,292 | |||
FINANCING ACTIVITIES | |||||
Proceeds from promissory note agreement | - | 350,000 | |||
Repayment of loans and borrowings | - | (105,000) | |||
Lease payments | 8 | (732,470) | (778,295) | ||
Issuances of shares | 12 | 4,000,000 | - | ||
Share issue costs | (349,400) | (5,382) | |||
Net cash provided by/(used in) financing activities | 2,918,130 | (538,677) | |||
Increase in cash from continuing operations | 417,462 | 187,587 | |||
Decrease in cash from discontinued operations | 17 | (1,341) | (48) | ||
Cash, beginning of the period | 268,507 | 461,100 | |||
Cash, end of the period | $ | 684,628 | $ | 648,639 |
Supplemental cash flow information - Note 19.
The accompanying notes form an integral part of these condensed consolidated interim financial statements.
5
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Choom Holdings Inc. published this content on 02 March 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 March 2022 00:29:02 UTC.