IFabric : Interim Financial Statements Q3 2022

iFABRIC CORP.

CONDENSED CONSOLIDATED INTERIM

FINANCIAL STATEMENTS

JUNE 30, 2022

(EXPRESSED IN CANADIAN DOLLARS)

(UNAUDITED)

CONTENTS

Condensed Consolidated Interim Statements of Financial Position	1
Condensed Consolidated Interim Statements of Earnings (Loss) and
Comprehensive Earnings (Loss)	2
Condensed Consolidated Interim Statements of Changes in Equity	3
Condensed Consolidated Interim Statements of Cash Flows	4
Notes to Condensed Consolidated Interim Financial Statements	5

NOTICE TO READER

The accompanying unaudited condensed consolidated interim financial statements of iFabric Corp. have been prepared by, and are the responsibility of, management. The unaudited condensed consolidated interim financial statements have not been reviewed by iFabric Corp.'s auditors.

iFABRIC CORP.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION (Unaudited, Expressed in Canadian Dollars)

	June 30,	September 30,
As at	2022	2021
ASSETS
Current assets
Cash	2,608,493	8,901,718
Accounts receivable (note 4)	5,960,094	6,452,896
Inventories (note 5)	10,792,400	3,015,010
Income taxes recoverable	22,219	90,521
Prepaid expenses and deposits (note 6)	4,734,741	4,734,352
Total current assets	24,117,947	23,194,497
Non-current assets
Due from related parties (note 7)	87,248	131,404
Property, plant and equipment	3,132,808	2,942,104
Right-of-use assets	57,350	54,168
Deferred development costs	396,256	231,658
Deferred income taxes	1,155,800	1,020,984
Goodwill	55,050	55,050
Total non-current assets	4,884,512	4,435,368
Total assets	29,002,459	27,629,865
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities (note 9)	4,283,454	2,941,445
Customer deposits	80,216	151,315
Income taxes payable	213,210	256,426
Deferred revenue	14,610	25,609
Current portion of contract liability	20,535	180,509
Current portion of lease liability	19,208	30,613
Current portion due to related parties	59	-
Current portion of car loan payable	12,792	-
Current portion of bank loan payable (note 10)	1,150,250	1,215,464
Total current liabilities	5,794,334	4,801,381
Non-current liabilties
Non-current portion of lease liability	38,142	20,855
Non-current portion of car loan payable	35,915	-
Due to related parties	530,422	530,422
Total non-current liabilities	604,479	551,277
Total liabilities	6,398,813	5,352,658
Commitments (note 14)
EQUITY
Equity attributable to iFabric Corp. shareholders
Capital stock (note 13)	13,656,894	13,585,774
Reserves	3,566,207	3,264,746
Retained earnings	5,454,010	5,612,925
Accumulated other comprehensive earnings	(94,142)	(196,551)
Total equity attributable to iFabric Corp. shareholders	22,582,969	22,266,894
Non-controlling interest	20,677	10,313
Total equity	22,603,646	22,277,207
Total liabilities and equity	29,002,459	27,629,865

Approved on behalf of the Board of Directors on August 11, 2022:

"Hylton Karon"		"Hilton Price"
Director		Director

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

Page 1 of 10

iFABRIC CORP.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF (LOSS) EARNINGS AND COMPREHENSIVE (LOSS) EARNINGS (Unaudited, Expressed in Canadian Dollars)

	Three months	Nine months
For the period ended June 30,	2022	2021	2022	2021
REVENUE	5,238,900	4,155,829	13,710,058	14,559,390
COST OF SALES	3,155,998	2,142,121	8,537,889	8,466,644
GROSS PROFIT	2,082,902	2,013,708	5,172,169	6,092,746
EXPENSES
General and administrative costs	1,310,629	989,300	3,623,152	2,952,100
Selling costs	308,860	218,968	879,317	652,579
Interest expense	12,711	12,223	34,271	43,260
Depreciation of property, plant and equipment and right-of-use assets	30,629	21,584	76,566	63,565
Amortization of deferred development costs	6,705	6,705	20,115	20,115
Share-based compensation	2,150	5,653	332,581	18,996
	1,671,684	1,254,433	4,966,002	3,750,615
EARNINGS FROM OPERATIONS	411,218	759,275	206,167	2,342,131
OTHER EXPENSES (INCOME)
(Gain) loss on foreign exchange	(54,146)	(9,775)	175,522	(110,391)
Gain on disposal of capital assets	(17,500)	-	(17,500)	-
Government Grants	(1,519)	(85,506)	(16,375)	(281,656)
	(73,165)	(95,281)	141,647	(392,047)
EARNINGS BEFORE INCOME TAXES	484,383	854,556	64,520	2,734,178
PROVISION (RECOVERY OF) FOR INCOME TAXES
Current	105,246	182,016	347,887	156,502
Deferred	32,800	(39,700)	(134,816)	392,400
	138,046	142,316	213,071	548,902
NET EARNINGS (LOSS)	346,337	712,240	(148,551)	2,185,276
NET EARNINGS (LOSS) ATTRIBUTABLE TO:
iFabric Corp. shareholders	344,805	705,406	(158,915)	2,166,533
Non-controlling interest	1,532	6,834	10,364	18,743
	346,337	712,240	(148,551)	2,185,276
OTHER COMPREHENSIVE EARNINGS (LOSS)
Unrealized gain (loss) on translation of foreign operations	14,132	(68,795)	102,409	(386,045)
TOTAL COMPREHENSIVE EARNINGS (LOSS)	360,469	643,445	(46,142)	1,799,231
EARNINGS (LOSS) PER SHARE (note 12)
Basic	0.012	0.024	(0.005)	0.078
Diluted	0.012	0.023	(0.005)	0.075

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

Page 2 of 10

iFABRIC CORP.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY (Unaudited, Expressed in Canadian Dollars)

			Attributable to iFabric Corp. shareholders
		Reserves
					Accumulated Other
		Contributed		Retained	Comprehensive		Non-controlling
	Capital stock	surplus	Options	earnings	Earnings (Loss)	Total	interest	Total equity
Balance at September 30, 2021	13,585,774	852,679	2,412,067	5,612,925	(196,551)	22,266,894	10,313	22,277,207
Total comprehensive earnings (loss)	-	-	-	(158,915)	102,409	(56,506)	10,364	(46,142)
Exercise of options	71,120	-	(31,120)	-	-	40,000	-	40,000
Share-based compensation	-	-	332,581	-	-	332,581	-	332,581
Balance at June 30, 2022	13,656,894	852,679	2,713,528	5,454,010	(94,142)	22,582,969	20,677	22,603,646
			Attributable to iFabric Corp. shareholders
		Reserves
					Accumulated Other
		Contributed		Retained	Comprehensive		Non-controlling
	Capital stock	surplus	Options	earnings	Earnings (Loss)	Total	interest	Total equity
Balance at September 30, 2020	3,282,276	852,679	1,915,538	3,243,227	46,146	9,339,866	5,005	9,344,871
Total comprehensive earnings (loss)	-	-	-	-	-	-	18,743	18,743
Private placement (note 13)	11,499,996	-	-	-	-	11,499,996	-	11,499,996
Share issue costs - cash (note 13)	(1,271,563)	-	-	-	-	(1,271,563)	-	(1,271,563)
Share issue costs - fair value of agent compensation options
issued on private placement (note 13)	(383,923)	-	383,923	-	-	-	-	-
Exercise of options	372,112	-	(122,112)	-	-	250,000	-	250,000
Share-based compensation	-	-	18,996	-	-	18,996	-	18,996
Balance at June 30, 2021	13,498,898	852,679	2,196,345	3,243,227	46,146	19,837,295	23,748	19,861,043

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

Page 3 of 10

iFABRIC CORP.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS (Unaudited, Expressed in Canadian Dollars)

For the nine months ended June 30,	2022	2021
CASH WAS PROVIDED BY (USED IN)
OPERATING ACTIVITIES
Net earnings (loss)	(148,551)	2,185,276
Items not affecting cash
Interest on lease liability	2,053	2,207
Depreciation of property, plant and equipment and right-of-use assets	76,566	63,565
Amortization of deferred development costs	20,115	20,115
Share-based compensation	332,581	18,996
Deferred income tax provision	(134,816)	392,400
	147,948	2,682,559
Changes in operatings assets and liabilities
Accounts receivable	492,802	36,910
Inventories	(7,777,390)	(453,696)
Income taxes recoverable	68,302	87,175
Prepaid expenses and deposits	(389)	(280,211)
Foreign exchange forward contracts	-	126,994
Due from related parties	44,156	7,500
Accounts payable and accrued liabilities	1,342,009	(30,187)
Customer deposits	(71,099)	(3,761,900)
Deferred revenue	(10,999)	(24,094)
Contract liability	(159,974)	(201,476)
Income taxes payable	(43,216)	(105,816)
	(6,115,798)	(4,598,801)
	(5,967,850)	(1,916,242)
FINANCING ACTIVITIES
Due to related parties	59	281
Share and warrant issuances (note 13)	40,000	11,749,996
Share and warrant issuances costs (note 13)	-	(1,271,563)
Increase in bank loan	-	60,000
Repayment of bank loan	(65,214)	(82,276)
Interest paid	(2,053)	(2,207)
Increase in car loan	48,707	-
Repayment of lease liability	(21,815)	(22,672)
	(316)	10,431,559
INVESTING ACTIVITIES
Purchase of property, plant and equipment	(242,755)	(5,982)
Investment in intangible assets	(184,713)	-
	(427,468)	(5,982)
CHANGE IN CASH POSITION	(6,395,634)	8,509,335
CASH, beginning of period	8,901,718	1,160,428
Effect of foreign currency translation	102,409	(386,045)
CASH, end of period	2,608,493	9,283,718

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

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