Wi2Wi : Financial Statements for the period ending March 31, 2024

Wi2Wi Corporation

Condensed Consolidated Interim Financial Statements

(Unaudited, expressed in US Dollars)

Three Month Period March 31, 2024 and March 31, 2023

Notice to Reader

These condensed consolidated interim financial statements of Wi2Wi Corporation for the three months ended March 31, 2024 have been prepared by Management and were authorized for issue in accordance with a resolution of the Board of directors on May 8, 2024. Wi2Wi Corporation's independent auditor has not performed a review of these condensed consolidated interim financial statements, in accordance with the standards established by the Chartered Professional Accountants of Canada for a review of interim financial statements by an entities auditors.

Toronto, Canada

May 9, 2024

Wi2Wi Corporation

Table of Contents
Condensed Consolidated Interim Financial Statements (unaudited)
Unaudited Condensed Consolidated Interim Statements of Financial Position	3
Unaudited Consolidated Interim Statements of Loss and Comprehensive Loss	4
Consolidated Statements of Changes in Shareholders' Equity	5
Unaudited Consolidated Interim Statements of Cash Flows	6
Notes to unaudited Condensed Consolidated Interim Financial Statements	7-23

Wi2Wi Corporation

Unaudited Condensed Consolidated Interim Statements of Financial Position

(In thousands of U.S. dollars)

		March 31,		December 31,
		2024		2023
Assets
Current Assets
Cash	$	636	$	917
Restricted cash (Note 22)		-		-
Trade accounts receivable (Note 7)		1,235		956
Inventories (Note 8)		2,271		2,378
Prepaid expenses and other current assets		200		156
Total current assets		4,342		4,407
Property and equipment (Note 9)		855		732
Right of use assets (Note 10)		1,834		1,946
Total Assets	$	7,031	$	7,085
Liabilities
Current Liabilities
Accounts payable	$	625	$	380
Accrued liabilities (Note 12)		289		299
Current portion of lease obligations (Note 13)		445		445
Current portion of note payable (Note 15)		40		19
Total current liabilities		1,399		1,143
Lease obligations (Note 13)		1,653		1,760
Note payable (Note 15)		216		56
Economic injury disaster loan (Note 14)		148		149
Total Liabilities		3,416		3,108
Shareholders' Equity
Common shares (Note 17)		29,093		29,093
Reserves (Note 18)		3,857		3,857
Accumulated other comprehensive loss		(2)		(2)
Accumulated deficit		(29,333)		(28,971)
Total shareholders' equity		3,615		3,977
Total Liabilities and Shareholders' Equity	$	7,031	$	7,085

Nature and Description of Company and Going Concern (Note 1)

See accompanying notes to consolidated financial statements.

Approved on behalf of the Board of Directors:

/s/ Ted Clark, CEO and Director

/s/ Gary DuBroc, Chairman

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Wi2Wi Corporation

Unaudited Consolidated Interim Statements of Loss and Comprehensive Loss

(In thousands of U.S. dollars, except net income per share)

For the three months ended March 31,		2024		2023
Revenues	$	1,508	$	1,840
Cost of revenues (Notes 8, 9 and 14)		1,357		1,551
Gross profit		151		289
Operating expenses (Note 19)
Research and development (Notes 9 and 14)		86		86
Selling, general and administrative (Notes 9 and 14)		397		406
Total operating expenses		483		492
Loss from operations		(332)		(203)
Other income (Note 14)		3		2
Interest income (expense)		(33)		(327)
Loss before income taxes		(362)		(233)
Provision for (benefit from) income tax (Note 23)		-		-
Net and comprehensive loss	$	(362)	$	(233)
Net loss per share, basic and diluted (Note 17)	$	(0.00)	$	(0.00)

See accompanying notes to consolidated financial statements.

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Wi2Wi Corporation

Consolidated Statements of Changes in Shareholders' Equity

(In thousands of U.S. dollars, except per share data)

						Accumulated
	Common Shares			Other			Accumulated		Total
					Reserves	Comprehensive			shareholders'
						Deficit
						Loss				Equity
	Shares		Amount
Balances,	152,933,313	$	29,092	$	3,835	$	(2)	$	(26,410)	$	6,515
January 1, 2022
Share-based compensation	-		-		1		-		-		1
Net comprehensive loss	-		-		-		-		(1,236)		(1,236)
Balances,	152,933,313		29,092		3,836		(2)		(27,646)		5,280
December 31, 2022
Share-based compensation	-		-		-		-		-		-
Net comprehensive loss	-		-		-		-		(233)		(233)
Balances,	152,933,313	$	29,092	$	3,836	$	(2)	$	(27,879)	$	5,047
March 31, 2023
Share-based compensation	100,000		1		21		-		-		22
Net comprehensive loss	-		-		-		-		(1,092)		(1,092)
Balances,	153,933,313	$	29,093	$	3,857	$	(2)	$	(28,971)	$	3,977
December 31, 2023
Share-based compensation	-		-		-		-		-		-
Net comprehensive loss	-		-		-		-		(362)		(362)
Balances,	153,933,313	$	29,093	$	3,857	$	(2)	$	(29,333)	$	3,615
March 31, 2024

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Wi2Wi Corporation

Unaudited Consolidated Interim Statements of Cash Flows

(All dollar amounts in thousands of U.S. dollars, unless otherwise noted)

For years ended March 31,			2024	2023
Cash Flows from Operating Activities
Net loss for the year	$		(362)	$	(233)
Adjustments for non-cash items:
Depreciation and amortization			177		193
Share-based compensation			-		-
Changes in non-cash working capital:
Trade accounts receivable			(279)		(237)
Inventories			107		252
Prepaid expenses and other current assets			(44)		30
Accounts payable			245		(30)
Accrued liabilities			11		(94)
Net Cash Used in Operating Activities			(145)		(119)
Cash Flows from Investing Activity
Additions to property and equipment			(188)		(2)
Net Cash Used in Investing Activity			(188)		(2)
Cash Flows from Financing Activities
Note payable			160		(14)
Repayment of economic injury disaster loan			(1)		-
Lease payments			(107)		(114)
Net Cash Provided by (Used in) Financing Activities			52		(128)
Net decrease in Cash			(281)		(249)
Cash, beginning of year			917		1,022
Cash, end of year		$	636	$	1,022
Supplemental cash flow information
Cash paid for interest		$	33	$	32
Cash paid for income taxes			-		-

During the three months ended March 31, 2024 the Company acquired $178 of property and equipment via a note payable, there were no material non-cash financing nor investing activities in the three months ended March 31, 2024.

See accompanying notes to consolidated financial statements.

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Wi2Wi Corporation

Notes to Unaudited Condensed Consolidated Interim Financial Statements

(All dollar amounts in thousands of U.S. dollars, unless otherwise noted)

1. Nature and Description of the Company and Going Concern

Sargeant Bay Capital, Inc., a Canadian entity, was incorporated pursuant to the Canada Business Corporations Act on July 9, 2004. On December 12, 2005, Sargeant Bay Capital, Inc. changed its name to Wi2Wi Corporation (the "Company") and became the legal parent of its wholly owned operating subsidiary, Wi2Wi Inc., a Delaware company, through a reverse takeover transaction. Wi2Wi Inc., was incorporated on April 29, 2005 and was mainly inactive until it acquired the original equipment manufacturing (OEM) products division of Actiontec Electronics on October 1, 2005.

Wi2Wi is a vertically integrated manufacturer providing wireless connectivity solutions, precision timing devices, frequency control products and microwave filters to the global market addressing various applications in the market segments; Internet of Things (IoT), Industrial Internet of Things (IoT/M2M/Industry 4.0), Avionics, Space, Military and Industrial. The Company shares trade on the TSX Venture Exchange under the symbol "YTY".

On February 4, 2016, Wi2Wi LLC was organized in the State of Wisconsin, a wholly owned subsidiary of Wi2Wi Inc. to conduct all or a portion of the Company's business in the State of Wisconsin.

On September 3, 2016, WI2WI (India) PRIVATE LIMITED was incorporated in India, as a wholly owned subsidiary of Wi2Wi, Inc. This is an engineering office for the wireless connectivity products, which works on developing new products.

In the first several months of 2020, the virus COVID-19 spread worldwide. On March 23, 2020, the United States Department of Homeland Security designated the Company as part of the Critical Infrastructure Sector. The Company continues to operate with a reduced manufacturing work force in essential product lines and continues to monitor and insure employee welfare. As of the filing date, the extent of the impact of COVID-19 on the Company's operational and financial performance will depend on future developments, including the duration of the outbreak and related governmental or other regulatory actions.

These financial statements have been prepared on a going concern basis which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company's ability to continue as a going concern is dependent upon its success in generating future profitable operations sufficient to eliminate its cumulative deficit, and continuing lender and shareholder support. There is no assurance that the steps the Company is taking to maintain future profitable operations will be successful. These conditions indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern.

2. Basis of Preparation

The consolidated financial statements are presented in U.S. dollars ("USD") and all values are rounded to the nearest thousand dollars except where otherwise indicated. The consolidated financial statements have been prepared on an accrual basis except for cash flow information, and are based on historical costs except for certain financial instruments, which are measured at fair value.

Statement of Compliance and Authorization

These unaudited condensed consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) under IAS 34, Interim Financial Reporting (IAS 34) as issued by the International Accounting Standards Board (IASB). These unaudited condensed consolidated interim financial statements do not include all the information and notes required by IFRS for annual financial statements and, therefore, should be read in conjunction with the audited consolidated financial

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Wi2Wi Corporation

Notes to Unaudited Condensed Consolidated Interim Financial Statements

(All dollar amounts in thousands of U.S. dollars, unless otherwise noted)

statements and notes for the Company's year ended December 31, 2023, which are available on SEDAR at www.sedar.com.

The unaudited condensed consolidated interim financial statements include the financial statements of Wi2Wi Corporation and its wholly owned subsidiaries, Wi2Wi Inc., Wi2Wi LLC and Wi2Wi (India) PRIVATE LIMITED. All intercompany balances and transactions have been eliminated on consolidation.

The Company operates as one segment. Substantially all assets of the Company are located in the United States.

Notice of No Auditor Review of Condensed Consolidated Interim Financial Statements

These condensed consolidated interim financial statements of Wi2Wi Corporation for the three months ended March 31, 2024 have been prepared by Management and were authorized for issue in accordance with a resolution of the Board of Directors on May 8, 2024. Wi2Wi Corporation's independent auditor has not performed a review of these condensed consolidated interim financial statements, in accordance with the standards established by the Chartered Professional Accountants of Canada for a review of interim financial statements by an entities auditors.

3. Capital Management

The Company considers its capital to be comprised of the items included in the consolidated statements of changes in shareholders' equity, which totaled $3,615 at March 31, 2024 (2023 - $5,047). The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may issue new shares through private placements, sell assets to reduce debt or return capital to shareholders. The Company is not subject to externally imposed capital requirements. There have been no changes in the Company's definition of capital or capital management objectives during the three months ended March 31, 2024 and 2023.

The Company's objective when managing capital is to safeguard the Company's ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders.

4. Material Accounting Policy Information

Inventories

Inventories are recorded at the lower of cost or net realizable value. Cost is determined on a first in first out basis and includes all costs of purchase, costs of conversion (direct costs and an allocation of fixed and variable production overheads) and other costs incurred in bringing the inventory to their present location and condition. Net realizable value is the estimated selling price less estimated costs to complete. As a supplier of system in package and modular products, inventory cost consists of amounts paid to the Company's contract manufacturers for product that is drop shipped to customers or shipped to the Company.

Property and Equipment

Property and equipment is stated at cost less accumulated depreciation and impairment losses. Depreciation is computed using the straight line method over estimated useful lives of:

• Three years for computer equipment and software;
• Five years for furniture and fixtures;
• Five to ten years for machinery and equipment; and
• Over the term of lease or estimated useful life of leaseholds, whichever is shorter.

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Wi2Wi Corporation

Notes to Unaudited Condensed Consolidated Interim Financial Statements

(All dollar amounts in thousands of U.S. dollars, unless otherwise noted)

Useful lives, residual values, and depreciation methods are reviewed at least annually, and any changes in previous estimates are accounted for prospectively.

Impairment of Non-Financial Assets

Non-financial assets to be held and used by the Company are reviewed for possible impairment annually, and whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If changes in circumstances indicate that the carrying amount of an asset that an entity expects to hold and use may not be recoverable, the Company must estimate the difference between the carrying amount of the asset and the recoverable amount. If the carrying amount exceeds the recoverable amount, the difference is recognized as an impairment loss. The recoverable amount is the higher of an asset's fair value less costs of disposal and its value in use. Impairment charges can be subsequently reversed if they no longer exist but cannot exceed the carrying amount that would have been determined (net of depreciation) had no impairment loss been recognized in the prior years. No impairment charges have been recorded for any of the periods presented.

Financial Instruments

Financial assets and financial liabilities, including derivatives, are recognized on the consolidated statement of financial position when the Company becomes a party to the financial instrument or derivative contract.

Classification

The Company classifies its financial assets and financial liabilities in the following measurement categories i) those to be measured subsequently at fair value through profit or loss (FVTPL); ii) those to be measured subsequently at fair value through other comprehensive income (FVOCI); and iii) those to be measured at amortized cost, using the effective interest method. The effective interest method is a method of calculating the amortized cost of a financial asset or liability and of allocating interest income or expense over the relevant period. The classification of financial assets depends on the business model for managing the financial assets and the contractual terms of the cash flows. Financial liabilities are classified as measured at amortized cost unless they are designated as measured subsequently at FVTPL (irrevocable election at the time of recognition). For assets and liabilities measured at fair value, gains and losses are either recorded in profit or loss or other comprehensive income (loss).

The Company reclassifies financial assets when and only when its business model for managing those assets changes. Financial liabilities are not reclassified.

Measurement

All financial instruments are required to be measured at fair value on initial recognition, plus, in the case of a financial asset or financial liability not at FVTPL, transaction costs that are directly attributable to the acquisition or issuance of the financial asset or financial liability. Transaction costs of financial assets and financial liabilities carried at FVTPL are expensed in profit or loss. Financial assets and financial liabilities with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest. Financial assets that are held within a business model whose objective is to collect the contractual cash flows, and that have contractual cash flows that are solely payments of principal and interest on the principal outstanding are generally measured at amortized cost at the end of the subsequent accounting periods. All other financial assets including equity investments are measured at their fair values at the end of subsequent accounting periods, with any changes taken through profit and loss or other comprehensive income (irrevocable election at the time of recognition). For financial liabilities measured subsequently at FVTPL, changes in fair value due to the Company's own credit risk are recorded in other comprehensive income.

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Wi2Wi Corporation

Notes to Unaudited Condensed Consolidated Interim Financial Statements

(All dollar amounts in thousands of U.S. dollars, unless otherwise noted)

Expected Credit Losses and Impairment

The Company assesses all information available, including on a forward-looking basis the expected credit losses associated with its assets carried at amortized cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk. To assess whether there is a significant increase in credit risk, the Company compares the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition based on all information available, and reasonable and supportable forward-looking information.

For trade accounts receivable, the Company applies the simplified approach as permitted by IFRS 9. The simplified approach to the recognition of expected losses does not require the Company to track the changes in credit risk; rather, the Company recognizes a loss allowance based on lifetime expected credit losses at each reporting date. Trade accounts receivable are stated net of the loss allowance.

Evidence of impairment may include indications that the counterparty debtor or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganization and where observable data indicates that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults. Receivables are reviewed qualitatively on a case-by-case basis and management's estimates include providing for 100% of specific customer balances when it is deemed probable that the balance is uncollectable.

Expected credit losses are measured as the difference in the present value of the contractual cash flows that are due to the Company under the contract, and the cash flows that the Company expects to receive. The Company assesses all information available, including aging and turnover, credit worthiness, credit concentration, the existence of third-party insurance, customer relationships, and forward looking macro-economic factors in the measurement of the expected credit losses associated with trade accounts receivable.

The Company measures expected credit losses by considering the risk of default over the contract period and incorporates forward-looking information into its measurement. Recoveries of trade accounts receivable previously written off are recorded in profit or loss when received.

The Company's financial instruments are accounted for as follows:

	Classification	Measurement
Cash and restricted cash	Amortized cost	Amortized cost
Trade accounts receivable	Amortized cost	Amortized cost
Accounts payable	Amortized cost	Amortized cost
Accrued liabilities	Amortized cost	Amortized cost
Warrant liability	FVTPL	Fair value
Note payable	Amortized cost	Amortized cost
Economic injury disaster loan	Amortized cost	Amortized cost
Income Taxes

The Company applies the asset and liability approach to recording current and deferred taxes. Current tax is the amount of income taxes payable (recoverable) in respect of the taxable profit (tax loss) for a period. Deferred tax assets and liabilities are recognized for the deferred tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using substantively enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are recognized to the extent that the realization of the related tax benefit through future taxable income is probable. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in profit or loss in the period that includes the enacted or substantively enacted date.

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