Jackpot Digital : Q2 June 30, 2023 FS

JACKPOT DIGITAL INC.

Consolidated Interim Financial Statements Six Months Ended June 30, 2023 and 2022 (Expressed in Canadian Dollars)

(Unaudited)

Index	Page
Notice of No Auditor Report	2
Consolidated Condensed Interim Financial Statements
Consolidated Balance Sheets	3
Consolidated Statements of Comprehensive Loss	4
Consolidated Statements of Changes in Shareholders' Deficiency	5
Consolidated Statements of Cash Flows	6
Notes to Consolidated Financial Statements	7 - 40

Notice of No Auditor Review of Condensed Interim Financial Statements

In accordance with National Instrument 51-102 released by the Canadian Securities Administrators, the Company discloses that its auditors have not reviewed these unaudited condensed interim financial statements as at June 30, 2023 and for the six months ended June 30, 2023 and 2022.

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JACKPOT DIGITAL INC.

Consolidated Balance Sheets

(Expressed in Canadian Dollars)

			June 30, 2023	December 31, 2022
	Assets (note 11)				(audited)
	Current
	Cash and cash equivalents (note 5)	$	109,623	$	101,289
	Accounts receivable (note 5)		254,623		326,339
	Due from related parties (note 8)		83,886		120,139
	Prepaid expenses and deposits		52,915		51,792
	Gaming Systems		501,047		599,559
		2,216,392		2,483,000
	Investment in 37 Capital Inc. ("37 Capital") (note 9)		8,515		9,111
	Deposit (note 10)		38,000		38,000
	Equipment		224,580		281,410
	Intangible Assets		256,751		156,437
	Right-of Use Assets (note 12)		102,440		276,133
	Total Assets	$	3,347,725	$	3,843,650
	Liabilities
	Current
	Accounts payable and accrued liabilities	$	1,546,899	$	1,532,582
	Deferred royalty liability (note 6)		121,767		70,201
	Lease liability (note 12)		113,388		297,962
	Interest payable		4,094,274		3,837,751
	Deferred revenue (note 13)		188,670		305,100
	Loans payable (note 11)		7,277		7,277
	Convertible debentures (note 11)		403,000		2,279,631
	Non-convertible secured debentures (note 11)		6,620		2,905,887
	Deferred Royalty Liability (note 6)		6,481,895		11,236,391
		216,262		259,133
	Deferred Revenue (note 13)		492,024		503,321
	Non-Convertible Secured Debentures (note 11)		2,582,726		-
	Convertible Debentures (note 11)		2,428,945		-
	Total Liabilities		12,201,852		11,998,845
	Shareholders' Deficiency
	Capital Stock (note 7)		62,056,043		62,041,953
	Reserves (notes 7)		2,125,788		2,775,009
	Convertible Debentures - Equity Portion (note 11)		221,941		12,536
	Deficit		(73,257,899)		(72,984,693)
	Total Shareholders' Deficiency		(8,854,127)		(8,155,195)
	Total Liabilities and Shareholders' Deficiency	$	3,347,725	$	3,843,650
On behalf of the Board:
"Jake H. Kalpakian" (signed)	"Neil Spellman" (signed)
.....................................................................	………………………………………….…
Jake H. Kalpakian, Director	Neil Spellman, Director

See notes to consolidated financial statements.

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JACKPOT DIGITAL INC.

Consolidated Statements of Comprehensive Loss

(Expressed in Canadian Dollars)

		Three Months Ended		Six Months Ended
		June 30		June 30
		2023		2022		2023		2022
Revenues	$		$		$		$
Electronic gaming tables	399,787	311,605	886,814	581,585
Table sales		101,400		30,000		204,015		30,000
		501,187		341,605		1,090,829		611,585
Cost of sales (recovery)		104,750		137,212		227,549		229,029
		104,750		137,212		227,549		229,029
Gross Profit / (Loss)		396,437		204,393		863,280		382,556
Expenses
Advertising and promotion		54,421		99,994		67,001		123,487
Amortization		222,311		223,742		454,449		445,205
Consulting fees		132,470		105,143		190,935		322,575
Donation		-		14,000		-		14,000
Foreign exchange loss/(gain)		(133,190)		178,774		(133,273)		98,379
Gain on extinguishment of debt		-		-		(614,087)		-
Impairment loss on gaming systems		34,893		24,290		35,589		50,654
Impairment of investment in 37 Capital Inc		-		-		-		25,681
Interest and other income		(205)		(35)		(205)		(270)
Interest and finance expense		265,755		262,979		568,958		517,572
Legal, accounting and audit		(18,637)		13,317		20,632		34,453
Management fees		99,000		99,000		198,000		198,000
Regulatory and transfer agent fees		60,694		60,273		120,728		108,237
Rent, office and miscellaneous		(9,768)		1,396		21,913		30,168
Salaries and benefits		390,507		447,134		781,705		826,050
Share net of (income)/loss of 37 Capital		(1,400)		3,346		596		6,334
Travel, meals and entertainment		54,324		49,948		127,602		111,047
		1,151,175		1,583,301		1,840,543		2,911,572
Net Loss and Comprehensive Loss
for the Period	$	(754,738)	$	(1,378,908)	$	(977,263)	$	(2,529,016)
Basic and Diluted Loss per common
share	$	(0.01)	$	(0.01)	$	(0.01)	$	(0.03)
Weighted average number of
common shares outstanding		131,990,071		106,003,714		131,974,772		97,116,662

See notes to consolidated financial statements.

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JACKPOT DIGITAL INC.

Consolidated Statements of Changes in Shareholders' Deficiency

(Expressed in Canadian Dollars)

	Capital Stock		Reserves		Equity Portion of
					Warrants and			Convertible			Shareholders'
	Common Shares		Amount		Other		Options	Debentures		Deficit		Deficiency
Balance, December 31, 2021	84,860,716	$	58,980,489	$	1,664,722	$	1,089,399	$	19,957	$	(68,173,900)	$	(6,419,333)
Net loss for the period	-		-		-		-		-		(2,529,016)		(2,529,016)
Private placements, net of issuance costs	21,498,554		1,803,516		52,323		-		-		-		1,855,839
Extinguishment of convertible debentures
conversion	-		-		-		-		(7,421)		7,421		-
Expiry of warrants	-		-		(78,000)		-		-		78,000		-
Cancellation of options	-		-		-		(21,434)		-		21,434		-
Share-based payment	-		-		-		175,916		-		-		175,916
Balance, June 30, 2022	106,359,270	$	60,784,005	$	1,639,045	$	1,243,881	$	12,536	$	(70,596,061)	$	(6,916,594)
Net loss for the period	-		-		-		-		-		(2,594,036)		(2,594,036)
Private placements, net of issuance costs	25,600,032		1,257,948		6,254		-		-		-		1,264,202
Share-based payment	-		-		-		91,233		-		-		91,233
Expiry of warrants	-		-		(151,532)		-		-		151,532		-
Cancellation of options	-		-		-		(1,916)		-		1,916		-
Expiry of options	-		-		-		(51,956)		-		51,956		-
Balance, December 31, 2022	131,959,302	$	62,041,953	$	1,493,767	$	1,281,242	$	12,536	$	(72,984,693)	$	(8,155,195)
Net loss for the period	-		-		-		-		-		(977,263)		(977,263)
Share-based payment	-		-		-		59,807		-		-		59,807
Convertible debenture issued	-		-		-		-		209,405		-		209,405
Broker warrants issued	-		-		3,119		-		-		-		3,119
Exercise of warrants	100,000		14,090		(8,090)		-		-		-		6,000
Expiry of warrants	-		-		(370,224)		-		-		370,224		-
Expiry of options	-		-		-		(333,833)		-		333,833		-
Balance, June 30, 2023	132,059,302	$	62,056,043	$	1,118,572	$	1,007,216	$	221,941	$	(73,257,899)	$	(8,854,127)

See notes to consolidated financial statements.

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