LIBERTY DEFENSE HOLDINGS, LTD. Liberty Defense Holdings, Ltd.
Interim Condensed Consolidated Financial Statements
Three and Nine Months Ended September 30, 2021 and 2020
UNAUDITED
Prepared by Management
(Expressed in U.S. dollars)
_____________________________
Liberty Defense Holdings, Ltd.
Interim Condensed Consolidated Statements of Financial Position
(Expressed in U.S. dollars)
Unaudited - Prepared by Management
September 30, 2021 | December 31, 2020 | |||
Assets | ||||
Current assets: | ||||
Cash | $ | 3,528,029 | $ | 57,047 |
Amounts receivable, prepaids and deposits (note 4) | 378,453 | 50,907 | ||
Loan receivable from Liberty (note 3 and 9) | - | 1,963,179 | ||
3,906,482 | 2,071,133 | |||
Non-current assets: | ||||
Property & equipment (note 5) | 842,813 | - | ||
Intangible assets and goodwill (note 3 and 6) | 8,902,306 | - | ||
9,745,119 | - | |||
Total assets | $ | 13,651,601 | $ | 2,071,133 |
Liabilities | ||||
Current liabilities: | ||||
Accounts payable and accrued liabilities | $ | 316,134 | $ | 449,230 |
Working capital loans (note 7) | - | 550,525 | ||
Paycheck protection program loan (note 8) | - | 67,588 | ||
Convertible debentures (note 10) | - | 1,531,309 | ||
Lease liabilities (note 11) | 145,523 | - | ||
461,657 | 2,598,652 | |||
Non-current liabilities: | ||||
Non-current lease liabilities (note 11) | 678,853 | - | ||
CEBA loan (note 12) | 27,152 | - | ||
Deferred income tax liability (note 3) | 2,365,612 | - | ||
Total liabilities | $ | 3,533,274 | $ | 2,598,652 |
Shareholders' equity (deficiency) | ||||
Share capital (note 13) | $ | 19,291,258 | $ | 2,866,502 |
Equity reserves (note 14) | 854,290 | 108,276 | ||
Accumulated other comprehensive (loss) income ("AOCI") | (156,864) | 59,746 | ||
Deficit | (9,870,357) | (3,562,043) | ||
Total shareholders' equity (deficiency) | 10,118,327 | (527,519) | ||
Total liabilities and shareholders' equity (deficiency) | $ | 13,651,601 | $ | 2,071,133 |
Nature of operations and going concern (note 1) | ||||
Subsequent events (note 19) |
Approved by the Board of Directors on Novemeber XX, 2021, and signed on the Company's behalf by:
"William Frain" | "Daryl Rebeck" |
Director | Director |
The accompanying notes form an integral part of these interim condensed consolidated financial statements.
Liberty Defense Holdings, Ltd.
Interim Condensed Consolidated Statements of Loss and Comprehensive Loss
(Expressed in U.S. dollars) | ||||||||
Unaudited - Prepared by Management | ||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||
2021 | 2020 | 2021 | 2020 | |||||
Research and development: | ||||||||
Consideration recovery for the DKL licensing agreement | ||||||||
(note 6 (b)) | $ | - | $ | - | $ | - | $ | (268,126) |
Product development | (17,755) | - | 613,050 | - | ||||
Technology costs | 278,325 | - | 312,265 | 66,124 | ||||
Legal fees | 67,083 | - | 139,522 | - | ||||
Salaries & Consulting Fees (note 8 and 16) | 943,358 | - | 1,489,373 | - | ||||
Stock-based Compensation (note 14 and 16) | 91,912 | - | 155,607 | - | ||||
Office, rent and administration | 29,428 | - | 40,672 | - | ||||
Travel and miscellaneous | 31,456 | - | 31,456 | - | ||||
Depreciation (note 5) | 31,184 | - | 75,757 | - | ||||
Amortization (note 6 (a)) | 2,684 | - | 6,808 | - | ||||
General Expenses: | - | |||||||
Consulting fees, salaries and benefits (note 8 and 16) | 913,445 | 79,163 | 1,324,627 | 410,206 | ||||
Depreciation (note 5) | 15,492 | - | 19,594 | - | ||||
Legal and professional fees | 85,824 | 63,517 | 203,528 | 213,987 | ||||
Stock based compensation (note 14) | 146,678 | 7,364 | 221,860 | 70,831 | ||||
Office, rent and administration | 47,419 | 1,405 | 97,032 | 5,880 | ||||
Regulatory and shareholder information | 12,938 | 346 | 48,019 | 8,827 | ||||
Travel, promotion and investor relations | 183,368 | 12,620 | 664,032 | 48,679 | ||||
RTO transaction costs (note 3) | (1,528) | - | 889,593 | - | ||||
2,861,311 | 164,415 | 6,332,795 | 556,408 | |||||
Other expense (income): | ||||||||
Interest income | 189 | (44,333) | (55,021) | (97,075) | ||||
interest expense | 344 | 35,498 | 42,378 | 63,521 | ||||
Accretion expense | 571 | 34,934 | 41,181 | 63,071 | ||||
Foreign exchange (gain) loss | (107,428) | 66,474 | (53,019) | (3,779) | ||||
(106,324) | 92,573 | (24,481) | 25,738 | |||||
Total loss for the period | $ | (2,754,987) | $ | (256,988) | $ | (6,308,314) | $ | (582,146) |
Other comprehensive income (loss) | ||||||||
Items that may be reclassified subsequently to profit or (loss) | ||||||||
Foreign currency translation adjustment | $ | (257,104) | $ | 49,812 | (216,610) | $ | (57,833) | |
Total items that may be reclassified subsequently to profit | ||||||||
or loss | (257,104) | 49,812 | (216,610) | (57,833) | ||||
Total loss and comprehensive loss for the period | $ | (3,012,091) | $ | (207,176) | $ | (6,524,924) | $ | (639,979) |
Weighted average number of common shares outstanding | ||||||||
Basic and diluted | 62,783,872 | 27,361,671 | 44,034,831 | 32,041,067 | ||||
Loss per share | ||||||||
Basic and diluted loss per share (note 15) | $ | (0.04) | $ | (0.01) | $ | (0.14) | $ | (0.02) |
The accompanying notes form an integral part of these interim condensed consolidated financial statements.
Liberty Defense Holdings, Ltd.
Consolidated Statements of Changes in Shareholder' Equity (Deficiency)
(Expressed in U.S. dollars) Unaudited - Prepared by Management
common | capital | issue shares | reserves | ||||||||||
shares* | |||||||||||||
Balance as at December 31, 2019 | 20,843,336 | $ | 3,105,995 | $ | 188,126 | $ | - | $ | 47,654 | $ | (2,752,232) | $ | 589,543 |
DKL shares returned to treasury (note 13) | (1,500,000) | (230,982) | - | - | - | 230,982 | - | ||||||
Common shares returned to treasury (note 13) | (5,662,500) | (8,511) | - | - | - | 8,511 | - | ||||||
Obligation to issue shares | - | - | (188,126) | - | - | - | (188,126) | ||||||
Fair value of finder's warrants | - | - | - | 31,884 | - | - | 31,884 | ||||||
Stock based compensation (note 14) | - | - | - | 70,831 | - | - | 70,831 | ||||||
Foreign currency translation adjustment | - | - | - | - | (57,833) | - | (57,833) | ||||||
Loss for the period | - | - | - | - | - | (582,146) | (582,146) | ||||||
Balance as at September 30, 2020 | 13,680,836 | $ | 2,866,502 | $ | - | $ | 102,715 | $ | (10,179) | $ | (3,094,885) | $ | (135,847) |
Balance as at December 31, 2020 | 13,680,836 | $ | 2,866,502 | $ | - | $ | 108,276 | $ | 59,746 | $ | (3,562,043) | $ | (527,519) |
Common shares retained by Liberty shareholders on RTO (note 3) | 10,733,792 | 3,444,458 | - | - | - | - | 3,444,458 | ||||||
Convertible debentures converted into common shares (note 10) | 5,825,467 | 1,495,507 | - | - | - | - | 1,495,507 | ||||||
Issue of subscription receipts and private placement (note 13) | 31,510,000 | 10,408,864 | - | - | - | - | 10,408,864 | ||||||
Fair value of finder's warrants (note 13) | - | - | - | 379,270 | - | - | 379,270 | ||||||
Stock based compensation (note 14) | - | - | - | 377,467 | - | - | 377,467 | ||||||
Warrants exercised | 50,000 | 30,610 | - | (10,723) | - | - | 19,887 | ||||||
Performance shares released from escrow (note 13 (a)) | 2,193,250 | 1,045,317 | - | - | - | - | 1,045,317 | ||||||
Foreign currency translation adjustment | - | - | - | - | (216,610) | - | (216,610) | ||||||
Loss for the period | - | - | - | - | - | (6,308,314) | (6,308,314) | ||||||
Balance as at September 30, 2021 | 63,993,345 | $ | 19,291,258 | $ | - | $ | 854,290 | $ | (156,864) | $ | (9,870,357) | $ | 10,118,327 |
Number of common share information has been updated retroactively to reflect the share consolidation, please refer to note 3 and 13. | 10118327 | ||||||||||||
854290 | $ | - |
The accompanying notes form an integral part of these interim condensed consolidated financial statements.
Liberty Defense Holdings, Ltd.
Consolidated Statements of Cash Flows | ||||
(Expressed in U.S. dollars) | ||||
Unaudited - Prepared by Management | ||||
Nine months ended September 30, | ||||
2021 | 2020 | |||
Cash (used in) provided by: | ||||
Operating activities: | ||||
Loss and comprehensive loss for the period | $ | (6,308,314) | $ | (582,146) |
Items not involving cash: | ||||
(Recovery of) consideration for DKL licensing agreement | - | (188,126) | ||
Convertible debenture accretion expense (note 10) | 39,054 | 63,071 | ||
Accrued interest on convertible debentures (note 10) | 36,973 | 63,317 | ||
Unrealized foreign exchange | (53,019) | 22,176 | ||
Accrued interest income on loan receivable from Liberty (note 3 and 9) | (55,021) | (92,753) | ||
Accretion expense (note 11) | 2,127 | - | ||
Depreciation | 95,351 | - | ||
Amortization (note 6 (a)) | 6,808 | - | ||
Government loans forgiven (note 8) | (424,102) | - | ||
Performance shares issued (note 13 (a)) | 1,045,317 | - | ||
Stock based compensation (note 14) | 377,467 | 70,831 | ||
Changes in non-cash working capital: | ||||
Amounts receivable and prepaids | (296,984) | 25,730 | ||
Accounts payable and accrued liabilities | (411,476) | 167,199 | ||
Cash used in operating activities | (5,945,819) | (450,701) | ||
Investing activities: | ||||
Addition to intangible (MIT) | (23,915) | - | ||
Cash used in investing activities | (23,915) | - | ||
Financing activities: | ||||
Proceeds from issuance of common shares, net of share issue costs (note 13) | 10,788,134 | - | ||
Proceeds in connection to warrants exercised | 19,887 | - | ||
Overdraft acquired in RTO paid (note 3) | (107,556) | - | ||
Cash advanced to Liberty as part of the loan (note 9) | (360,910) | (1,526,118) | ||
Convertible debentures issued, net of transaction costs (note 10) | - | 1,273,837 | ||
Working capital loans repayment (note 7) | (550,525) | - | ||
Repayment of leases | (79,105) | - | ||
Interest paid on convertible deventures | (137,175) | - | ||
Cash provided by (used in) financing activities | 9,572,750 | (252,281) | ||
Effect of foreign exchange rate changes on cash | (132,034) | (43,169) | ||
Increase (decrease) in cash | 3,470,982 | (746,151) | ||
Cash, beginning of the period | 57,047 | 967,947 | ||
Cash, end of the period | $ | 3,528,029 | $ | 221,796 |
During the period ended September 30, 2021 and 2020, the Company paid $nil in income taxes and $137,175 in interest expenses
Suplemental cash flow information | ||||
Fair value of brokers and finder's warrants (note 13 (a)) | $ | 379,270 | $ | 31,884 |
Performance shares issued (note 13 (a)) | 1,045,317 | - | ||
Fair value of shares ratianed by Liberty shareholders (note 3) | 3,444,458 | - | ||
Convertible debentures converted into common shares (note 13 (a)) | 1,495,507 | - | ||
Additions to right of use assets (note 5) | 701,274 | - | ||
DKL shares returned to treasury (note 6 (b)) | - | 230,932 | ||
Common shares returned to treasury (note 6 (b)) | - | 8,511 |
The accompanying notes form an integral part of these interim condensed consolidated financial statements.
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Liberty Defense Holdings Ltd. published this content on 30 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 November 2021 02:40:02 UTC.
