Navigant Consulting Inc. Annual Report 2022

FY2022 Annual Report · Navigant Consulting Inc.

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www.ntgclarity.com

NTG Clarity Networks Inc.
Simplifying Business Solutions

www.ntgapps.com

ANNUAL REPORT 2022

Our Vision

To be the leading provider of high-quality systems and solutions
while creating an environment of success
for our customers, employees and shareholders.

OSS/BSS
NTS

Telecom
Services

Smart2Go

NTG Core
Competencies

E-solutions

Consulting &
Outsourcing

IoT

NTGapps

Mobile
Applications

Our Value Proposition

NTG Clarity partners with groups who design, build, manage, and support networks and network software
applications.

We are the experts in applying technology, methodology, process, and people to provide quality and on
time network services; on your premises or ours. We help you, our customer, to increase revenue, improve
customer satisfaction, and focus on your bottom line.

“We are your software and network services partner!”

Table of Contents
Letter to our Shareholders..........................................................................................................................5
Management’s Discussion & Analysis of Financial Conditions and Results of Operations ............................6
Forward-Looking Statements ................................................................................................................ 6
Business Overview ................................................................................................................................ 6
Summary of Major NTG Events in 2022 ..................................................................................................................7
Outlook....................................................................................................................................................................8
Summary of Quarterly Results ............................................................................................................... 9
Quarterly and Annual Results of Operations .......................................................................................... 9
Revenue.................................................................................................................................................................10
Cost of Sales and Gross Margin .............................................................................................................................10
Operating Expenses...............................................................................................................................................11
Other Expenses .....................................................................................................................................................13
Total Comprehensive Income after Taxes (Net Income) .......................................................................................14
Assets and non-current liabilities......................................................................................................... 14
Property and equipment .......................................................................................................................................14
Intangible assets ....................................................................................................................................................14
Non-current liabilities............................................................................................................................................15
Liquidity and Capital Resources ........................................................................................................... 15
Cash Flow Provided by Operations .......................................................................................................................15
Cash Flow from Financing Activities ......................................................................................................................15
Cash Flow from Investing Activities.......................................................................................................................15
Commitments and Contractual Obligations ......................................................................................... 15
Off-Balance Sheet Arrangements ........................................................................................................ 16
Transactions with Related Parties ........................................................................................................ 16
Basis of Preparation and Significant Accounting Policies ...................................................................... 16
Proposed Transactions ........................................................................................................................ 17
Business Risk and Management .......................................................................................................... 17
Market risk ............................................................................................................................................................17
Interest rate risk ....................................................................................................................................................18
Credit risk ..............................................................................................................................................................18
Devaluation of Egyptian pound .............................................................................................................................18
Foreign currency risk .............................................................................................................................................18
Liquidity risk ..........................................................................................................................................................19
Capital Management .............................................................................................................................................20
Legal claim contingency ........................................................................................................................................20
Guarantees ............................................................................................................................................................20
Collateral ...............................................................................................................................................................20
Disclosure Controls and Procedures and Internal Controls over Financial Reporting ............................ 20
Standards issued but not yet effective ................................................................................................. 21
Management’s Statement of Responsibility ..............................................................................................21
Independent Auditor’s Report ..................................................................................................................22
Consolidated Statements of Financial Position..........................................................................................25
Consolidated Statements of Changes in Equity .........................................................................................26
Consolidated Statements of Profit and Loss and Comprehensive Income ..................................................27
Consolidated Statements of Cash Flows....................................................................................................28
CORPORATE INFORMATION .................................................................................................... 29
GOING CONCERN .................................................................................................................... 29
BASIS OF PRESENTATION ........................................................................................................ 29
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ............................................................... 30
SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES, AND ASSUMPTIONS ............................ 45

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STANDARDS ISSUED BUT NOT YET EFFECTIVE ......................................................................... 47
OPERATING SEGMENT INFORMATION .................................................................................... 47
INCOME TAXES ....................................................................................................................... 50
EARNINGS PER SHARE ............................................................................................................. 51
CASH AND CASH EQUIVALENTS ............................................................................................... 52
TRADE AND OTHER RECEIVABLES ............................................................................................ 52
PREPAID EXPENSES AND DEPOSITS ......................................................................................... 53
BID/PERFORMANCE BONDS .................................................................................................... 53
PROPERTY AND EQUIPMENT ................................................................................................... 54
INTANGIBLE ASSETS ................................................................................................................ 54
RIGHT OF USE ASSET ............................................................................................................... 55
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES ..................................................................... 56
OTHER FINANCIAL ASSETS AND FINANCIAL LIABILITIES............................................................ 57
GOVERNMENT GRANT ............................................................................................................ 59
EQUITY INSTRUMENTS ............................................................................................................ 60
CONTRIBUTED SURPLUS ......................................................................................................... 62
DIVIDENDS PAID AND PROPOSED............................................................................................ 62
COST OF SALES........................................................................................................................ 62
EXPENSES: DISCLOSURE OF FUNCTION EXPENSES ................................................................... 62
LOANS PAYABLE ...................................................................................................................... 63
RELATED PARTY DISCLOSURES ................................................................................................ 63
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES .................................................... 65
COMMITMENTS, CONTINGENCIES, AND GUARANTEES ........................................................... 68
SALE OF ENTERPRISE LICENSES................................................................................................ 69
Corporate Information .............................................................................................................................70

Letter to our Shareholders

2022 was another excellent year for NTG with an increase in revenue and a continuing profitability.
Revenues for 2022 were up 48% to $17.65M compared to about $11.9M in 2021 and we are profitable for
the year, despite significant devaluation challenges in Egypt. We have capitalized on our track record and
experience, and the goodwill we have built with our customers and partners over the years. NTG is now
recognized as a provider of top-tier, high quality services with very competitive pricing, and we have added
new clients to our customer base, especially in the financial sector where we have been focusing expansion
this year. This sector is outside our traditional telecom vertical and is an important growth opportunity for
us as they are going through a digital transformation. We are working hard to capitalize on the booming
demands for IT and telecom services and on establishing NTG as a major offshoring hub for technology and
IT services.

During the year, we continued developing our product NTGapps -- a digital transformation tool providing a
low-code platform that enables users to develop applications quickly and easily. In 2022, we have seen the
demand for the system reflected in purchase orders and we look forward to increasing product sales and
the professional services to implement and support the system. The NTGapps software platform is being
sold as a service either on the cloud or implemented on premises for large corporate clients.

Going forward, NTG will focus on promoting and expanding the following:

1. Our product offerings that provide a high profit margin. We are focused on our NTGapps digital
transformation platform that integrates with our Network Asset Management product. Digital
Transformation is one of the current key objectives of most organizations and NTGapps provides a tool
to enable these organization to achieve this goal in using a phased approach while integrating with
their legacy systems. We believe that NTGapps is one of the best digital transformation platforms
available. It enables our customers to consolidate their end-to-end business software and integrate
with specialty third-party platforms, enhancing operational efficiency and saving clients time that can
instead be used to create new revenue streams.

2. Our outsourcing/offshoring services. These services provide consistent cash flow and margins for the
business. They help in acquiring new customers on a short sale cycle. This gives us the opportunity to
introduce our products to these customers. NTG has invested in expanding our offshore centre in Egypt
and that has proven to be very successful.

We would like to thank our valued shareholders for their continued support during these challenging times.
As management’s interests are closely aligned with our shareholder base, we remain committed to working
diligently to increase our profitability and working towards reducing our debts. We look forward to growing
the company further in the years ahead.

"Ashraf Zaghloul"
Ashraf Zaghloul, Chair and Chief Executive Officer
NTG Clarity Networks Inc.

Management’s Discussion & Analysis of Financial Conditions and
Results of Operations

This management discussion and analysis (MD&A) focuses on key statistics from the consolidated financial
statements and pertains to known risks and uncertainties relating to the telecommunications and
consulting industry. This discussion should not be considered all-inclusive, as it excludes changes that may
occur in general economic, political and environmental conditions. This discussion and analysis of the
financial condition and results of operations has been prepared as of April 26, 2023, for the year ending
December 31, 2022 and should be read in conjunction with the audited consolidated financial statements
and related notes and material contained in other parts of this annual report.

Additional information related to the Corporation is available on SEDAR at www.sedar.com.

Forward-Looking Statements

Certain statements in this MD&A and associated notes and financial statements may be considered
“forward-looking” within the meaning of applicable securities laws. These statements reflect the
Corporation’s plans and expectations based on our experience, interpretation of past trends, key
assumptions and other relevant information available at the date that such statements are made.

The statements involve business, economic and competitive risks, uncertainties and contingencies. There
is significant risk that predictions, projections or conclusions will not prove to be accurate and actual results
may differ materially from estimates, expectations, or intentions expressed.

The forward-looking statements in this MD&A and associated notes and financial statements are based on
what we believe are reasonable assumptions, however we caution readers not to place undue reliance on
our forward-looking statements. We assume no obligation to update or revise these forward-looking
statements to reflect new events or circumstances, except as required by securities law.

Business Overview

NTG Clarity is a Canadian publicly traded Corporation (TSXV:NCI) that provides telecommunications
engineering, Information Technology, networking and related software solutions. We have been developing
niche software products directed at telecom service providers and utilities markets since our inception in
1993. We also provide professional services and managed services to this same vertical. We have also
expanded into the financial and government sectors, providing products and technical resources to assist
customers with projects that include digital transformation.

We are headquartered in Toronto, Canada and have subsidiaries/branch offices in Cairo, Egypt; the USA;
Riyadh, Saudi Arabia and Oman. The Corporation is organized into two business segments: the Canadian
segment, which is made up of activities in Canada and our offices in Saudi Arabia and Oman; and the Egypt
segment, which is our software development group and also provides professional services, offshoring
services and network services to customers in Egypt.

Summary of Major NTG Events in 2022

Announcements made over the course of the year highlighted our new customers and contracts/POs. The
following outlines the events that occurred in 2022:

In Q1 2022, we announced:

 multiple POs, contracts and contract extensions worth $3.6M.

 a new 1-year renewable Framework Agreement for outsource and offshore resources with a leading

bank in the Gulf Region worth an estimated value of $3.5M.

 an amendment to an existing 1-year renewable Framework Agreement for a credit bureau in the Middle

East, bringing the estimated value to $6.8M.

In Q2 2022, we announced:

 multiple POs valued at $2.521M.

 multiple POs against existing Framework Agreements valued at $793K.

 a new 7-month renewable Framework Agreement for outsource and offshore resources for a digital
factory with a leading bank in the Gulf Region. The annual income is estimated to be $3M CAD and the
expenses are estimated to be $2M CAD.

In Q3 2022, we announced:

 a $4.16M PO from a major financial institution in the Middle East to provide onshore and offshore

professional resources.

 multiple POs valued at approximately $6.33M with $5.98M of the amount being for new work.

In Q4 2022, we announced:

 multiple POs for our software products valued at over $2M.

 multiple POs for resources at existing customers valued at approximately $2.248M.



the signing of a significant Memo of Understanding (MOU) with OMB (Outsource Management Business
is a division under Etisalat Services Holding) to cooperate in providing IT products and services in the
Middle East.

Canada
Our Canadian operations added a new professional services customer this year and Canadian customers
and customers billed through our Canadian office account for 12% of NTG’s revenue. We continued to work
on implementation of two projects through our Canadian office to:



license and install NTG’s NTS Asset Management, Network Discovery, Discrepancy and Reconciliation
software, including our new low-code NTGapps digital toolbox. Implementation revenue over 2022
was $1.3M.

license, install and support our NTS Utility Billing software. 2022 revenue for this project was $373K.

Egypt
Egypt continues to be a challenging place to do business with restrictions on using foreign currency for
business operations and on moving funds out of the country. Over the year, the Egyptian Central Bank
moved the Egyptian pound (EGP) to a more flexible exchange rate because of the terms of an International

Monetary Fund (IMF) financial support package. By the end of 2022 the EGP’s value dropped from around
12.3 EGP to the Canadian dollar in January to about 18.2 EGP in December 2022, a 48% drop in value.

Other effects in the economy include an interest rates and inflations, with costs driven up further by higher
global energy prices, official inflation hit 21.9 percent in December, and food prices rose 37.9 percent. This
has resulted in NTG Egypt having to increase salaries to help personnel cope with the changing economy.

Despite the devaluation, NTG Egypt's revenue has increased 57% over last year with a 76% increase in
revenue from our top 5 customers and 4 new customers in the region. We continue to mitigate much of
the risk of doing business in the country as our expenses and the majority of our contracts in Egypt are both
in the local currency. NTG Egypt's unconsolidated revenue of approximately 76.9M EGP in 2022 translated
to around $4.29M CAD at year end, resulting in a devaluation of over $1.1M CAD. This was recorded as a
reduction in revenues for Q4 2022 of approximately $410K, and just over $750K in exchange loss on
translation and foreign exchange loss.

We are also working to diversify our customer base in the country. In addition to our now 5 major customers
who represent 94% of Egypt’s annual revenue (2021: 95%), we are increasing work with other existing
customers and have added 4 new customers (3% of revenue) in the financial and telecom sectors.

In 2022, Egypt’s revenue contribution continues to be strong with the subsidiary contributing 24% of the
Corporation’s revenue (2021: 23%).

Kingdom of Saudi Arabia (KSA)
KSA’s continued economic strength, due in large part to a booming economy, has shown increased demand
for our products and services and has resulted in a 56% increase in revenue contribution for the country
this year. 76% of our professional service work and 62% of our revenue being from KSA (2021: 70% and 58%
respectively). NTG has developed good brand recognition and a solid track record over the years, which is
an asset to our work in the region and we resulted in a shift in our major customers from telecom to the
banking and public sectors.

We have licensed our NTGapps software to new and existing customers in the country, and product demos
show promising interest across multiple sectors.

With KSA being reported as the world’s fastest-growing major economy, we are well-positioned to continue
to grow our revenue here (source: https://www.eiu.com/n/saudi-arabia-set-to-be-the-worlds-fastest-growing-
major-economy/).

Oman
In 2022, we continued work for our customer in Oman, who is using our NTS Network Inventory and Project
Management modules. Recurring revenues in Oman from product maintenance, support, and change
requests as well as professional services contributed 5% to NTG’s revenue in 2022 (2021: 5%).

Outlook
KSA’s robust economy, due in large part to strong oil prices, has shown an increasing demand for our
products and services. Customers continue to recognize our quality of work and track record and this has
resulted in large increases in the volume of work from our major customers and expansion into several new
customers, primarily in the financial sector.

Some customers are now making use of the technical, IT and professional services we offer through our
Egypt Offshore Centre. We are excited about the increasing demand for this offering model as we expand
our business into new verticals that include government and financial sectors.

With the demand for our software product; NTGapps digital toolbox, we anticipate being able to continue
to expand into new verticals. As NTGapps includes tools related to small and medium enterprise (SME) end-
to-end business operations, we are already seeing demand in the financial and government sectors and we
see this as an opportunity to present our product for use in other verticals.

We now have a dedicated team of sales personnel that are targeting new customers in this currently
booming KSA economy. We are targeting small and medium enterprises (SME) across multiple verticals that
now include the medical sectors and the food industry, in addition to the telecom and financial sectors. We
anticipate the sales of NTGapps to increase significantly in 2023. For more information, visit
www.ntgapps.com.

As of the beginning of 2023, NTG has a backlog of $20.95M in unbilled amounts for POs/contracts on hand.
This amount exceeds the total revenue for 2022. This put us in a healthy position to continue our
profitability going forward and contributes to the growth of our organization. Additionally, we are expecting
to renew several contracts with major customers that are coming up for renewal within the next six months.

Summary of Quarterly Results

Historically, NTG’s operating results have fluctuated due to the timing of new contracts and their
corresponding billing, and we expect this trend to continue.

The following table shows a summary of our eight most recent quarters (in Canadian dollars).

2022

Revenue

Net Income

Profit per
Share

Diluted Profit
per Share

Quarter One

Quarter Two

Quarter Three

Quarter Four

TOTAL

2021

Quarter One

Quarter Two

Quarter Three

Quarter Four

TOTAL

$ 4,320,604
$ 3,403,633
$ 4,185,208
$ 5,742,867
$ 17,652,313

Revenue

$ 2,298,307
$ 2,621,252
$ 2,844,338
$ 4,132,046
$ 11,895,943

$ 554,342

$ 191,362

$ 434,489

$ (391,759)

$ 788,434

$ 0.00

$ 0.01

$ 0.00

$ 0.01

$ 0.00

$ 0.01

$ 0.00

$ 0.01

Net Income
(Loss)

Profit (Loss)
per Share

Diluted Profit
per Share

$ 249,727

$ 459,813

$ 237,671

$ 416,748

$ 1,363,958

$ 0.00

$ 0.01

$ 0.00

$ 0.01

Total Assets

$ 6,524,801

$ 6,398,118

$ 7,260,075

$ 8,167,611

Total Assets

$ 3,390,312

$ 4,409,643

$ 5,115,346

$ 6,490,706

Quarterly and Annual Results of Operations

NTG’s business continues to operate and support customers’ operations, with significant increasing
revenues in Saudi Arabia. The hard work and dedication resulted in 2022 having the highest revenue in
NTG’s recent history, with Q4 2022 being the highest single quarter revenue. We continue to rely on
collections and short-term loans to finance operations. Generally, in 2022, collections have been within
acceptable limits and management continues to work to reduce legacy payables.

Financial highlights for the three months and year ending December 31, 2022:

Revenue
Consolidated revenues for the three months ending December 31, 2022 was $5,742,867 compared to
$4,132,046 for the same period in 2021. Revenue for the year increased 48% to $17,652,313 compared to
$11,895,943 reported in the prior year.

Professional service revenue continues to be a significant source of revenue for us, given its generally
recurring nature (81% as compared to 81% in 2021). We continue to work to make product sales a more
balanced part of NTG’s revenue stream.

Consolidated revenues for Q4 2022 for the Egypt operating segment were $1,114,021 compared to
$1,183,846 in 2021. Despite the devaluation of the Egyptian pound in Q4 2022, consolidated revenues for
the year ending December 31, 2022 revenues increased 57% to $4,293,173 compared to $2,735,335 in
2021.

For the Canadian operating segment, revenues increased 57% to $4,628,846 compared to $2,948,200 in Q4
2021. For the year ending December 31, 2022 revenues increased to $13,359,140 compared to $9,160,608
in 2021.

Revenues are 46% higher this year primarily due to:

 a 74% increase in work for our largest customer in the financial sector in KSA
 a 76% increase in work for NTG Egypt’s top 5 customers



significant increases in work for 6 of our existing customers in KSA and 5 in Egypt
revenue from new customers in Canada, Iraq, KSA and Egypt (12%).

Though we currently have 6 Canadian customers, the Middle East continues to be where the majority of
NTG’s revenue comes from and as of December 31, 2022, represents 98% of total revenue. We are hopeful
that 2023 will continue to see improved results from our past efforts with both existing and new customers.

Unbilled Revenue

Unbilled revenue is revenue which had been earned and therefore recognized in compliance with IFRS, but
which has not been billed to the client(s) due to contract terms and/or billing cycle. NTG derives revenue
from fees charged to customers for licenses for software products and professional services: support,
consulting, development, training, and other services.

Revenue can be recognized for projects based on time and materials for professional services, or on a
percentage of completion basis for product implementation and support. Both can result in unbilled
revenue until the customer is invoiced. Based on NTG’s contracts, the customer is invoiced upon the
completion of defined milestones and/or the required customer acceptance. For many contracts, revenue
is recognized each month, but billed on a quarterly basis and we anticipate this to continue.

At December 31, 2022, unbilled revenue was $354,485 compared to $342,574 at December 31, 2021.

Cost of Sales and Gross Margin
Cost of sales consists of the expense of personnel providing professional services, and services to implement
and provide technical support for our solutions. In addition, it includes an allocation of certain direct and
indirect costs attributable to these activities.

Cost of sales for the three months and year ending December 31, 2022 were $4,143,610 and $10,929,917
(2021: $881,903 and $5,307,491).

Cost of sales

Salaries and wages
Travel

Hardware

Other expenses

Total

December 31, 2022

December 31, 2021

9,695,623
742,196

79,907

412,191

4,942,357
384,477

76,990

(96,333)

10,929,917

5,307,491

For the Egypt operating segment, the cost of sales for the three months and year ending December 31,
2022 were $1,532,508 and $3,584,913 respectively compared to $652,876 and $1,616,186 in 2021.

For the Canadian operating segment, the cost of sales for the three months and year ending December 31,
2022 were $2,611,102 and $7,345,003 respectively compared to $229,027 and $3,691,305 in 2021.

The gross margin for the year ending December 31, 2022 was 38% compared to 55% in 2021. Realistic
margins are anticipated to be between 30-40%, based on the product mix.

Operating Expenses
Costs for travelling and marketing events were higher than 2021, as we participated in numerous trade
shows including:

 Mobile World Congress (MWC) in Barcelona (February 23-March3, 2022), where we had the

opportunity to meet existing and potential customers and showcase our NTGapps software product.

 MWC in Las Vegas (September 28-31, 2022) where we presented our network inventory and telecom
in a box use cases that solve the urgent need for a fast, reliable digital enablement needs; all of them
built using our 100% configurable platform - NTGapps.

 GITEX in Dubai (October 10-14, 2022), the world's largest tech show, where we signed an MOU with

OMB (Outsource Management Business), a division under Etisalat Services Holding.

 AfricaCom in South Africa (November 8-10, 2022) where we engaged in several opportunities with
companies in South Africa, Tanzania, Sudan, and introduced companies to our key products including
NTS OSS/BSS and our NTGapps digital toolbox.

For the three months and year ending 2022, expenses were $1,104,607 and $4,468,091 respectively
compared to $2,315,416 and $3,992,545 in 2021.

Selling and Marketing
Selling and marketing expenses consist primarily of sales staff remuneration, commissions, travel,
advertising, consulting, and trade show costs.

Sales and marketing expenses for the three months and year ending December 31, 2022 were $451,922
and $1,717,956 respectively compared to $641,731 and $1,257,849 in 2021.

Selling

Salary and wages

Marketing and advertising
Mailing and courier
Professional services
Meals and entertainment

Total

For the twelve months ended

December 31, 2022

December 31, 2021

1,416,599

1,053,291

248,356
7,481
29,617
15,904

68,456
7,223
25,805
103,074

1,717,956

1,257,849

Though Q4 expenses were lower, our sales and marketing expenses YTD increased due to:

 participation in several trade shows

 an increase in the number of sales staff in KSA and Egypt supported by the increasing number of

customers and revenue.

General and Administrative
General and administration expenses (G&A) consist primarily of salary and benefits, rent and office
expenses, insurance, professional fees, accounting and legal fees, director’s fees, etc.

G&A expenses for the three months and year ending December 31, 2022 were $619,872 and $2,455,510
respectively compared to $1,329,679 and $2,440,239 in 2021. Insurance has increased significantly due to
the increased number of outsourced personnel in KSA. Accruals for penalties and fees were higher than
anticipated.

General and Administrative

December 31, 2022

December 31, 2021

Salary and wages
Occupancy
Consulting
Professional fees
Bid/performance bond fees
Insurance
Dues and subscriptions
Penalties and fees
Office and general

Total

1,648,646
114,484
52,878
113,650
–
480,172
27,941
(50,020)
67,759

1,674,735
138,121
25,430
117,733
–
276,562
22,006
133,098
52,554

2,455,510

2,440,239

Foreign Exchange Gain/Loss

Each entity in the Corporation determines its own functional currency and items included in the financial
statements of each entity are measured using that functional currency. The functional currency and the
presentation currency of the parent entity is the Canadian dollar. Transactions in foreign currencies are
initially recorded in respective functional currency rates at the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies are retranslated at the functional currency rate at the reporting
date. Differences are taken to the statement of profit or loss and comprehensive income. Non-monetary
items that are measured in terms of historical cost in a foreign currency are translated using the exchange
rates as at the dates of the initial transactions.

The functional currency of the subsidiary NTG Egypt Advanced is the Egyptian pound, and the functional
currency of the subsidiary NTG Clarity Networks US Inc. is the US Dollar.

An entity may present its financial statements in any currency (or currencies). If the presentation currency
differs from the entity's functional currency, it translates its results and financial position into the
presentation currency. For example, when a group contains individual entities with different functional
currencies, the results and financial position of each entity are expressed in a common currency so that
consolidated financial statements may be presented.

For practical reasons, a rate that approximates the exchange rates at the dates of the transactions, for
example an average rate for the period, is often used to translate income and expense items. However, if
exchange rates fluctuate significantly, the use of the average rate for a period is inappropriate.

IAS 21.–47, in addition to IAS 21.–43, apply when the results and financial position of a foreign operation
are translated into a presentation currency so that the foreign operation can be included in the financial
statements of the reporting entity by consolidation or the equity method.

For the quarter ended December 31, 2022, the Corporation recognized a foreign currency exchange loss of
$147,308 compared to $344,006 for the same period in 2021. For the year ending December 31, 2022, the
Corporation recognized a foreign currency exchange loss of $294,625 compared to a loss of $294,457 the
year ending 2021. For more information on foreign exchange, see Note 4(b): Foreign currency translation.

Other Expenses

Research and Development
With the exception of NTGapps, our flagship product, research and development is paid for by customer
requests and is therefore, included in cost of sales.

Provision for Bad Debt
NTG has made a provision for bad debt in 2022 of $Nil (2021: $21,524).

Amortization of Intangible Assets

Intangible assets are related to the NTGapps low-code digital transformation platform initially capitalized
in 2020 and 2021. Expenditures on development of the software are recognized as an asset from the time
the Corporation has determined an indefinite future economic benefit exists.

The amortization costs for the three months and year ending December 31, 2022 were $78,756 and
$277,416 respectively compared to $44,933 and $131,222 in 2021.

Interest Expense
As of December 31, 2022, the interest expense for the three months and year was $4,400 and $315,656
compared to $(6,935) and $200,310 for the same periods in 2021. YTD Interest expenses increased as we
increased/extended our long-term investment in KSA and our loan/line of credit in Egypt.

Share-based Compensation
NTG has a formal stock option plan allowing the issuance of options to directors, officers, employees and
consultants in order to attract and retain qualified and experienced individuals. All options granted are non-
assignable, generally expire five years after the grant date, and usually vest over one year but can have
varying vesting periods.

No options were granted to non-employees during 2022. Stock options granted during the three months
and year ending December 31, 2022 totalled Nil and 7,045,000 compared to 7,420,000 and 17,415,000 in
2021. The weighted average expected contractual lives of outstanding and exercisable options are shown
in Note 18(b). 17,565,000 options have vested and there are 17,715,000 issued. The difference of 150,000
will vest in the foreseeable future (within the next 12 months) and the expense will be charged in the future
quarters.

Income Taxes
There are no income taxes for the taxation year ending December 31, 2022 as NTG has income tax losses
in the amount of $15,063,997 that are available for Canadian federal and provincial tax purposes which may
be carried forward to reduce future years’ taxable income (December 31, 2021: $16,512,842).

Total Comprehensive Income after Taxes (Net Income)
For Q4 2022, the Corporation recorded a net loss of $391,759 compared to a net income of $416,748 for
the same period in 2021. For the year ending December 31, 2022, the Corporation recorded a net income
of $788,434 compared to $1,363,958 in 2021.

The Egypt operating segment, for the three months ending December 31, 2022 recorded a net loss of
$846,779 compared to a net income of $102,129 in 2021. For the year ending December 31, 2022 there
was a net loss of $43,356 compared to a net income of $158,673 in 2021. The devaluation of about the EGP
resulted in a reduction in revenues for Q4 2022 of approximately $800K, and just over $750K in exchange
loss on translation and foreign exchange loss.

For the Canadian operating segment, for the three months ending December 31, 2022 recorded a net
income of $455,021 compared to $314,620 in 2021. For the year ending December 31, 2022 there was a
net income of $831,790 compared to $1,205,285 in 2021.

Assets and non-current liabilities

As of December 31, 2022, the Corporation closed the year with $725,020 cash on hand (2021: $158,870),
bid/performance bonds of $17,431 (2021: $55,764) and prepaid amounts of $86,751 (2021: $64,446).

Differences in prepaid amounts are due to the timing of insurance and rental renewals. The decrease in
bond values compared to year-to-date 2021 occurred because of bonds that expired in Egypt KSA. There
were no bonds in KSA.

Property and equipment
Property and equipment of $221,732 as of December 31, 2022 (2021: $183,294) consists mainly of
computer equipment and office furniture with a useful life of 4-10 years. We are not dependent on tangible
assets and we expect the purchase and disposal of property and equipment to be consistently modest in
the foreseeable future. NTG had additions of $128,299 during 2022 (2021: $97,032) and depreciation of
$89,861 (2021: $112,873). The additions were in Egypt for furniture and laptops in anticipation of the
expansion of our new office. Note the depreciation includes depreciation of our right-of-use asset of
$70,934 (see Note 16 for more information).

Intangible assets
In past years, intangible assets were related to the upgrade of our internally developed Operations Support
System/Business Support System (OSS/BSS) software product called NTS, and StageEM, our enterprise
solution that allows companies to manage many current and/or proposed projects and maintain control of
resources, budgets and other elements. As of December 2019, these products were impaired and removed
from NTG’s balance sheet, though we consider both products to be valuable assets.

In 2021 and 2022, intangible assets relate to the upgrade of our internally developed NTGapps platform.
NTGapps is a powerful development tool that offers rapid application development and whose users need
no knowledge of development languages. Powerful templates allow users to create their own tools for HR,
CRM, asset management, etc. In 2022, NTGapps development was capitalized for $1,302,221 (2021:
$1,451,381). The amortization cost for 2022 was $277,416 (2021: $131,222).

An impairment test is performed on the non-current assets at year end, or when indicators warrant it. A
test was performed at year end 2022 and there was no impairment. We will continue to assess on a
quarterly basis for indicators of impairment.

Non-current liabilities
As of December 31, 2022, NTG had the following non-current liabilities:

 The outstanding indebtedness of $6,512,880 held by a numbered Company is disclosed as a long-term

debt on the Statements of Financial Position. See Note 18(a) and Note 26 for more information.

 An amount due from and owed to related parties includes balances owing to key management and key

management compensation. See Note 26 for more information.

 Several loans payable of $701,760, provided by international investors.

Liquidity and Capital Resources

NTG’s principal requirement for capital is to provide working capital to fund its operations and support its
organic growth. Historically, we have funded operations by using profits generated by operations and
through the issuance of equity. In 2022, we funded operations, changes in non-cash working capital and
capital expenditures using internally generated cash flows, cash on hand and short-term loans.

As of December 31, 2022, we had a declining working capital deficit of $3,557,883 compared to a deficit of
$3,757,061 at December 31, 2021.

Cash Flow Provided by Operations
The cash in-flow from operating activities for the year ending December 31, 2022 was $2,493,322 compared
to $1,801,557 for the same period in 2021. The cash inflow differences are primarily due to a lower net
income because of Egypt’s pound devaluation, and a $2M Shares for Debt transaction in 2021.

Cash Flow from Financing Activities
The cash out-flow from financing activities for the year ending December 31, 2022 was $496,652 compared
to an out-flow of $239,498 for the same period in 2021. This was primarily due to:



the increase in long-term debt ($121,311 compared to a decrease of $670,708 in 2021).

the doubling of interest amounts ($315,656 compared to $182,652 in 2021). Interest rates have
increased over the year and we have increased the size of the long-term debt in Egypt and the short-
term loans in KSA to support the increased activity.

Cash Flow from Investing Activities
Cash out-flow from investing activities for the year ending December 31, 2022, was $1,430,520 compared
to an out-flow of $1,548,413 for the same period in 2021. This was due to the capitalization of development
costs for our NTGapps software product and the purchase of computers and furniture associated with our
new office in Egypt.

Commitments and Contractual Obligations

NTG was committed under agreements for the rental of office space in Canada at a monthly rate of $9,232
for the period from June 1, 2016 to May 31, 2021. As of June 1, 2021, we renewed the agreement and
committed to pay $6,639 monthly for the period from June 1, 2021 to May 31, 2022 and $8,195 monthly
for the period from June 1, 2022 to May 31, 2023. The deferred rent balance due of $80,847 that was related
to a Forbearance Agreement signed in April 2020 was repaid in full as of March 2022.

Subsequent to year end, we renewed the agreement and committed to pay $8,195 monthly for the period
from June 1, 2023 to May 31, 2024 and $9,232 monthly for the period from June 1, 2024 to May 31, 2025.

Additionally, we are committed under agreements for the rental of office spaces in Egypt and Oman at a
monthly rate ranging from $1,200 to $3,000 for the periods from August 2022 to August 2025.

Debt and Credit Facilities

As of December 31, 2022, NTG’s indebtedness continues to be controlled by a numbered Company,
controlled by Ashraf Zaghloul, NTG CEO and Kristine Lewis, NTG President. The numbered Company retains
the Indebtedness and the Security, and all the rights, title and interest together with the full benefit of all
powers and all covenants and provisions contained in the Security. The Company has agreed to extend the
grace period for principal installment repayments until December 2022. This has helped NTG significantly
by helping with cash flow and reducing pressure on management to allow them to focus on business. The
Indebtedness held by the Company is secured by a General Security Agreement (GSA) over the assets of the
Corporation. It is listed as Long-term debt on the Interim Consolidated Statements of Financial Position.

As of December 31, 2022, NTG Egypt Advanced Software, a subsidiary of NTG, had the following:

 an overdraft facility with QNB bank in Egypt in the amount of 7,091,454 Egyptian pounds (EGP)

(approximately $389,321; 2021: $626,068) with an interest rate of 18%.

 a loan with CIB bank in Egypt in the amount of 5,583,000 EGP at interest rate of 7% per annum,
repayable in monthly principal payments of 232,625 EGP plus interest (approximately $306,507; 2021:
$161,000). The loan matures on January 1, 2025. In December 2022, the original 3M EGP loan was
renegotiated to increase the amount and extend the maturity date.

In 2020, NTG received $60,000 the interest-free for the Canadian Emergency Business Account (CEBA)
revolving line of credit. As of December 31, 2022, the balance owed on this line of credit is $30,000.
Subsequent to year end, as of the date of this report, we have repaid $8,000. See Note 19 for more
information.

Off-Balance Sheet Arrangements

The Corporation has not entered into off-balance sheet financing arrangements. All commitments are
reflected on the Corporation’s balance sheet.

Transactions with Related Parties

Transactions between the Corporation and its subsidiaries, which are related parties to the Corporation,
have been eliminated on consolidation. Related parties include key management, the Board of Directors,
close family members and entities which are controlled by these individuals as well as certain persons
performing similar functions.

The standard key management compensation is listed in Note 26.

The Corporation’s long-term debt is controlled by a numbered Company, controlled by Ashraf Zaghloul,
NTG CEO and Kristine Lewis, NTG President.

Basis of Preparation and Significant Accounting Policies

The audited consolidated financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

Significant accounting policies are presented in detail in Note 3 of our audited consolidated financial
statements for the year ending December 31, 2022. These are available on SEDAR (www.sedar.com). The

policies applied in these statements are based on IFRS issued and outstanding as of April 26, 2023, the date
the Board of Directors approved the consolidated financial statements.

Proposed Transactions

There are no Proposed Transactions.

Business Risk and Management

NTG’s primary risk management objective is to protect our balance sheet and cash flow. Principal financial
liabilities are made up of a Company Indebtedness and trade and other payables. NTG has also taken on
short-term debt from overseas to assist with cash flow.

We are exposed to market risk, interest rate risk, foreign exchange risk, credit risk, and liquidity risk. Senior
management oversees the management of these risks and is supported by a Committee that advises on
financial risks and the appropriate financial risk governance framework. The Board of Directors reviews and
agrees policies for managing risks.

In addition to risks described elsewhere, NTG is subject to a number of risk factors. We have significant
reliance on certain key personnel, some of whom are also key shareholders; Ashraf Zaghloul, CEO; Kristine
Lewis, President; and Yaser Yousef, CTO.

Though we have worked hard to diversify our customer base, we are dependent on a few large customers.
As of December 31, 2022, 35% of NTG’s revenue was from two customers (2021: 35%). Management
continues to work to diversify the customer base and country concentration. In 2022, 15% (2021: 34%) of
our trade accounts receivable balance was from one customer.

The uncertainties around COVID-19 has required the use of significant judgement and estimates as of
December 31, 2022, we have not noted any resulting significant impairment.

Additional risks and uncertainties not described below or not presently known to the Corporation may also
impact our business. If any of these risks occur, our company’s business, financial condition or results of
operations could be harmed and the trading price of NTG’s common shares could be materially affected.
The purpose of discussing these risks and uncertainties is to highlight factors that could cause actual results
to differ materially from past results or from those described in forward-looking statements. It is not to
describe facts, trends and circumstances that could have a positive impact on the results or financial
position.

Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because
of changes in market prices. Market prices comprise several types of risk: interest rate risk, currency risk,
commodity price risk, and other price risk, such as equity risk. The Corporation is not subject to price risk
from fluctuations in market prices of commodities and has no exposure to equity price risk.

There is a high concentration of competition in the telecom industry and no barrier of entry for new
competitors into the market. Many of our competitors are larger companies that have greater resources.
To help mitigate this risk, we have partnered with, or signed agreements to work through; a few of the large
competitors, as we can offer seasoned resources at extremely competitive rates.

Changes in the regulatory environment would always affect our plans and investments. As we continue to
grow, we will continually monitor and evaluate the various policies and procedures to ensure that they
consider any changes in the Corporation and its marketplace.

In 2022, approximately 62% of our revenue came from work done in KSA (2021: 71%). The majority of NTG’s
KSA customers are consistently within our payment terms.

Historically 7-11% of our revenue comes from work done through our subsidiary, NTG Egypt, based in Cairo,
Egypt. Since 2014, the contribution percentage has grown from 13.7% to 20% in 2022. The economic
challenges in the region continue have a positive impact on our Egypt operations.

Oman’s major customer contributed 5% of the revenue in 2022 (2021: 5%).

Interest rate risk

NTG's exposure to interest rate fluctuations is primarily interest paid on its indebtedness and long-term
loans. The Corporation has performed sensitivity analysis on interest rates on December 31, 2022 to
determine how a change in interest rates would impact equity and net loss.

During the year, NTG paid $315,656 (2021: $200,310) on its loans and liabilities. An increase or decrease of
100 basis points in the average interest rate paid during the period would have adjusted net earnings by
approximately $41,670 (2021: $20,031). This analysis assumes that all other variables remain constant.

Credit risk

Credit risk is the risk of an unexpected loss if a customer or counterparty to a financial instrument fails to meet
its contractual obligation. NTG’s financial instruments that are exposed to credit risk consist primarily of trade
receivable. Our exposure to credit risk is impacted by the economic conditions for the industry which could
affect the customers' ability to satisfy their obligations. To reduce risks, we perform periodic credit evaluations
of the financial conditions of its customers and typically does not require collateral from them. Management
assesses the need for allowance for potential credit losses by considering the credit risk of specific customers,
historical trends and other information.

The credit quality of all the accounts receivable of the Corporation that are neither past due nor impaired
and the age of accounts receivable that are past due but not impaired have been assessed on an individual
basis and determined to have a mitigated risk profile due to their payment history. NTG previously had
receivables and pre-shipping insurance; however, we did not renew this insurance due to cash flow (see
Note 26). This introduces a new level of risk of non-payment by customers which was not previously there.

Devaluation of Egyptian pound
Over the year, the Egyptian Central Bank moved the Egyptian pound (EGP) to a more flexible exchange rate
because of the terms of an International Monetary Fund (IMF) financial support package. By the end of
2022 the EGP’s value dropped from around 12.3 EGP to the Canadian dollar in January to about 18.2 EGP
in December 2022, a 48% drop in value.

We continue to mitigate much of the risk of doing business in the country as our expenses and the majority
of our contracts in Egypt are both in the local currency. Management has decided to work on alternatives
that include offshoring personnel to increase our USD revenue.

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in foreign exchange rates. Our exposure to the risk of changes in foreign exchange rates

relates primarily to operating activities, when revenue or expense are denominated in a different currency
from our functional currency, the Canadian dollar.

We do not hedge the risk related to fluctuations of the exchange rate between USA and Canadian dollars from
the date of the sales transactions to the collection date due to the short-term nature of this exposure. The
Corporation does not hedge the risk related to fluctuations of the exchange rate between USA and Canadian
dollars from the date of the sales transactions to the collection date due to the short-term nature of this
exposure.

A 10% change in exchange rates on December 31, 2022 would have the following approximate impacts:

10% impact to:

U.S.
Dollar
USD

Omani
Riyal
OMR

Kuwait
Dinar
KWD

P&L in CAD

$36,150

$17,662

$25,258

Equity in CAD

$26,570

$12,981

$18,564

Saudi
Riyal
SAR

Turkish
Lira
TRY

$56,577

$41,584

$22

$16

Iraqi
Dinar
IQD

$4,158

$3,056

Egyptian
Pound
LE

$141,840

$104,252

Liquidity risk

Liquidity risk is the risk that NTG will not be able to meet its financial obligations as they fall due. Our
approach to managing liquidity is to ensure, as far as possible, that we will always have sufficient liquidity
to meet our liabilities when due, under normal and stressed conditions. We manage liquidity risk by
reviewing capital requirements on an ongoing basis. We continuously review both actual and forecasted
cash flows to ensure that we have appropriate capital capacity.

The following table summarizes the amount of contractual undiscounted future cash flow requirements for
financial instruments as of December 31, 2022:

Contractual obligations

2023

2024

2025

2026 and after

Total

Operating line of credit

389,321

Accounts payable and
accrued liabilities

Operating lease

Long-term debt

Loans payable

6,985,267

100,681

153,253

701,760

– $

–

22,399

14,549

6,676,134

–

389,321

6,985,267

137,629

6,829,387

701,760

The aging of trade accounts payable are as follows:

December 31,

Current
31 – 60 days
61 – 90 days
91 – 180 days
More than 180 days

2022

696,460
74,446
40,653
137,668
539,614

1,488,841

2021

1,531,550
1,959
6,898
13,106
622,523

2,176,036

Expenses are accrued when incurred. Accounts are deemed payable once an event occurs that requires
payment by a specific date. The contractual maturity of the majority of accounts payable is within one
month.

Capital Management
NTG manages its capital, which consists of cash provided from operations and long term debt, with the
primary objective being safeguarding sufficient working capital to sustain operations. The Board of
Directors has not established capital benchmarks or other targets.

There have been no changes in NTG’s approach to capital management during the year ending December
31, 2022. Also, no changes were made in the objectives, policies, or processes during the year ending
December 31, 2022. We will continually assess the adequacy of our capital structure and capacity and make
adjustments within the context of NTG’s strategy, economic conditions, and the risk characteristics of the
business.

NTG’s objectives when managing capital are to:

(i)

(ii)

safeguard the Corporation's ability to continue as a going concern, so that it can provide adequate
returns for shareholders and benefits for other stakeholders;
fund capital projects for facilitation of business expansion provided there is sufficient liquidly of
capital to enable the internal financing; and

(iii) maintain a capital base to maintain investor, creditor, and market confidence.

NTG considers the items included in the consolidated statements of changes in shareholders' equity as
capital. We manage and adjust the capital structure in light of changes in economic conditions and the risk
characteristics of the underlying assets. In order to maintain or adjust the capital structure, we may issue
new shares. We are not subject to externally imposed capital requirements.

Legal claim contingency

NTG is subject to a variety of claims and suits that arise from time to time in the ordinary course of business.
Although management currently believes that resolving claims against NTG, individually or in aggregate, will
not have a material adverse impact on our financial position, results of operations, and cash flows, these
matters are subject to inherent uncertainties and management's view of these matters may change in the
future. To date, there are no claims or suits outstanding.

Guarantees

NTG indemnifies its directors and officers against claims reasonably incurred and resulting from the
performance of their services to the Corporation. NTG has been unable to renew its Directors and Officers
liability insurance since March 2021. The insurance remains a concern and we are looking for alternatives.

Collateral

NTG has pledged its assets under a General Security Agreement ("GSA") as disclosed in Note 18(a). NTG did
not hold collateral on December 31, 2022 and December 31, 2021.

Disclosure Controls and Procedures and Internal Controls over Financial Reporting

The Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the Corporation’s
disclosure controls and procedures as of December 31, 2022 and have concluded that such disclosure
controls and procedures were effective to provide reasonable assurance that material information relating
to the Corporation or its subsidiaries is made known to them.

In contrast to the certificate required for non-venture issuers under National Instrument 52-109
Certification of Disclosure in Issuers’ Annual and Interim Filings (NI 52-109), this Venture Issuer Basic

Certificate does not include representations relating to the establishment and maintenance of disclosure
controls and procedures (DC&P) and internal control over financial reporting (ICFR), as defined in NI 52-
109. In particular, the certifying officers (CFO and CEO) filing the NI 52-109 certificate is not making any
representations relating to the establishment and maintenance of:

i) controls and other procedures designed to provide reasonable assurance that information required to
be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted under
securities legislation is recorded, processed, summarized and reported within the time periods specified
in securities legislation; and

ii) a process to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with the issuer’s GAAP (IFRS).
The issuer’s certifying officers are responsible for ensuring that processes are in place to provide them with
sufficient knowledge to support the representations they are making in the NI 52-109 certificate. Investors
should be aware that inherent limitations on the ability of certifying officers of a venture issuer to design
and implement on a cost-effective basis DC&P and ICFR as defined in NI 52- 109 may result in additional
risks to the quality, reliability, transparency and timeliness of interim and annual filings and other reports
provided under securities legislation.

Standards issued but not yet effective

As of April 26, 2023, the date of authorization of these financial statements, certain new standards,
amendments, and interpretations to existing IFRS standards have been published but are not yet effective
and have not been adopted by the Corporation. All other standards were early adopted as explained in the
prior year's financial statements.

Management’s Statement of Responsibility

The management of NTG Clarity Networks Inc. is responsible for the preparation of the accompanying
consolidated financial statements and the preparation and presentation of information in the Annual
Report. The consolidated financial statements have been prepared in accordance with International
Financial Reporting Standards, and are considered by management to present fairly the financial position
and operating results of the Corporation.

The Corporation maintains various systems of internal control to provide reasonable assurance that
transactions are properly authorized and recorded, that assets are safeguarded, and that financial reports
are properly maintained to provide reliable financial statements.

The Corporation's audit committee is comprised of independent directors and a management
representative and is appointed by the Board of Directors annually. The committee meets periodically with
the Corporation's management and independent auditors to review the consolidated financial statements
and the independent auditors report. The audit committee has approved the consolidated financial
statements and reported its findings to the Board of Directors.

The Corporation's independent auditors, NVS Professional Corporation, have examined the consolidated
financial statements and their report follows.

"Ashraf Zaghloul"

Ashraf Zaghloul
Chief Executive Officer
April 26, 2023

"Kristine Lewis"

Kristine Lewis
President
April 26, 2023

Independent Auditor’s Report

To the Shareholders of
NTG Clarity Networks Inc.:

Report on the Audit of the Consolidated Financial Statements

Opinion
We have audited the accompanying consolidated financial statements of NTG Clarity Networks Inc. and its subsidiaries (the
"Corporation"), which comprise the consolidated statements of financial position as of December 31, 2022 and December 31,
2021, and the consolidated statements of profit and loss and comprehensive income, consolidated statements of changes in
equity and consolidated statements of cash flows for the years then ended, and notes to the consolidated financial statements,
including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated
financial position of the Corporation as at December 31, 2022 and December 31, 2021, and its consolidated financial
performance and its consolidated cash flows for the years then ended in accordance with International Financial Reporting
Standards (IFRS).

Basis for Opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those
standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section
of our report. We are independent of the Corporation in accordance with the ethical requirements that are relevant to our
audit of the consolidated financial statements in Canada, and we have fulfilled our ethical responsibilities in accordance with
these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.

Material Uncertainty Related to Going Concern

We draw attention to Note 2 in the consolidated financial statements, which indicates that the Corporation has attained income
from operations of $788,434 (2021: $1,363,958) during the year ended December 31, 2022 and, as of that date, the Corporation
has an accumulated deficit of $22,178,630 and current assets are less than current liabilities by a ratio of 1:1.80. As stated in
Note 2, these events or conditions, along with other matters as set forth in Note 2, indicate that a material uncertainty exists
that may cast significant doubt on the Corporation’s ability to continue as a going concern. Our opinion is not modified in respect
of this matter.

Other Information
Management is responsible for the other information. The other information comprises:

• Management's Discussion and Analysis
•

The information, other than the financial statements and our auditor's report thereon, in the Annual Report.

Our opinion on the financial statements does not cover the other information and we do not and will not express any form of
assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other
information identified above and, in doing so, consider whether the other information is materially inconsistent with the
financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

We obtained Management's Discussion and Analysis prior to the date of this auditor's report. If, based on the work we have
performed on this other information, we conclude that there is a material misstatement of this other information, we are
required to report that fact in this auditor's report. We have nothing to report in this regard.

The Annual Report is expected to be made available to us after the date of the auditor's report. If, based on the work we will
perform on this other information, we conclude that there is a material misstatement of this other information, we are required
to report that fact to those charged with governance.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance
with IFRS, and for such internal control as management determines is necessary to enable the preparation of consolidated
financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Corporation’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless management either intends to liquidate the Corporation or to cease operations, or has no realistic alternative
but to do so.

Those charged with governance are responsible for overseeing the Corporation’s financial reporting process.

Auditor's Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian
generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and
maintain professional skepticism throughout the audit. We also:

•

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations,
or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Corporation’s internal
control.

•

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on
the Corporation’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required
to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the
date of our auditor’s report. However, future events or conditions may cause the Corporation to cease to continue as a
going concern.



Evaluate the overall presentation, structure, and content of the consolidated financial statements, including the
disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a
manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within
the Corporation to express an opinion on the consolidated financial statements. We are responsible for the direction,
supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought
to bear on our independence, and where applicable, related safeguards.

The engagement partner on the audit resulting in this independent auditor’s report is Sadik Najarali.

NVS Professional Corporation

NVS Professional Corporation
Chartered Professional Accountants
Authorized to practice public accounting by
The Chartered Professional Accountants

Markham, Ontario
April 26, 2023

NTG CLARITY NETWORKS INC.
Consolidated Statements of Financial Position
(In Canadian Dollars)
As at December 31,
ASSETS
Current assets
Cash and cash equivalents (Note 10)
Trade and other receivables (Note 11)
Prepaid expenses and deposits (Note 12)
Bid/performance bonds (Note 13)

Total current assets

Non-current assets
Property, plant and equipment (Note 14)
Intangible assets (Note 15)
Right-of-use of assets (Note 16)

Total non-current assets

Total Assets

LIABILITIES
Current liabilities
Current portion of leasehold liability (Note 16)
Accounts payable and accrued liabilities (Note 17)
Bank indebtedness (Note 18)
Current portion of long-term debt (Note 18)
Loans payable (Note 25)
Total current liabilities

Non-current liabilities
Leasehold liability (Note 16)
Long-term debt (Note 18) (Note 26)
Total non-current liabilities

Total liabilities

SHAREHOLDER’S EQUITY
Capital stock (Note 20)
Contributed surplus (Note 21)
Foreign exchange account
Deficit
Total shareholders’ equity

2022

2021

725,020
3,881,520
86,751
17,431

4,710,722

221,732
3,205,601
29,556

3,456,889

158,870
3,747,046
64,446
55,764

4,026,126

183,294
2,180,796
100,490

2,464,580

8,167,611

6,490,706

39,004
6,985,267
389,321
153,253
701,760
8,268,605

–
6,676,134
6,676,134

14,944,739

13,606,986
2,617,273
(822,757)
(22,178,630)
(6,777,128)

74,049
6,540,227
626,068
120,750
422,093
7,783,187

39,005
6,587,326
6,626,331

14,409,518

13,561,986
2,309,023
(363,334)
(23,426,487)
(7,918,812)

Total liabilities and shareholders’ equity

8,167,611

6,490,706

Approved on behalf of the Board:
"Ashraf Zaghloul"
Director

See accompanying notes to consolidated financial statements.

"Kristine Lewis"
Director

NTG CLARITY NETWORKS INC.
Consolidated Statements of Changes in Equity
For the years ended December 31, 2022 and December 31, 2021
(In Canadian Dollars)

Share
Capital

Contributed

Surplus

Deficit

Foreign
Exchange
Reserve

Total
Shareholders’
Equity

Balance, January 1, 2021

$ 10,808,186 $ 1,809,523 $ (24,796,575) $

(357,204) $ (12,536,070)

Income from continuing operations
Other comprehensive income
Share-based compensation
Issuance of share capital (Note 20)

Debt for share exchange (Note 20)

Reallocation of contributed surplus
(Note 20) (Note 21)

–

443,000

2,000,000
310,800

–

810,300

–

(310,800)

1,370,088

–

–
–

–
(6,130)
–
–

–
–

1,370,088

(6,130)

810,300

443,000

2,000,000

–

Balance, December 31, 2021

$ 13,561,986 $ 2,309,023 $ (23,426,487) $

(363,334) $ (7,918,812)

Income from continuing operations
Other comprehensive income
Issuance of share capital (Note 20)

–

–
25,000

Share-based compensation (Note 21)

–

Reallocation of contributed surplus
(Note 20) (Note 21)

20,000

–

–
–

328,250
(20,000)

1,247,857

–
–

–
(459,423)
–

–
–

1,247,857

(459,423)

25,000

328,250

–

Balance, December 31, 2022

$ 13,606,986 $ 2,617,273 $ (22,178,630) $

(822,757) $ (6,777,128)

NTG CLARITY NETWORKS INC.
Consolidated Statements of Profit and Loss and Comprehensive Income
(In Canadian Dollars)
For the years ended December 31,

2022

2021

REVENUE (Note 7)
COST OF SALES (Note 23)

GROSS MARGIN

OPERATING EXPENSES
Selling (Note 24)
General and administration (Note 24)
Loss on foreign exchange

Total operating expenses
INCOME (LOSS) FROM OPERATIONS

OTHER (INCOME) EXPENSES
Amortization (Note 15)
Depreciation (Note 14) (Note 16)
Accretion (Note 19)
Provision for bad debts (Note 11)
Interest
Share-based payments (Note 21)
Other income

Total other expenses

INCOME (LOSS) FROM CONTINUING OPERATIONS

Other comprehensive income:
Exchange gain (loss) arising on translation of foreign operations

TOTAL COMPREHENSIVE INCOME (LOSS) FOR THE YEAR

Earnings (loss) per share (Note 9)

Basic
Diluted

Weighted average number of shares outstanding

Basic
Diluted

See accompanying notes to consolidated financial statements.

17,652,313
10,929,917

11,895,943
5,307,491

6,722,396

6,588,452

1,717,956
2,455,510
294,625

4,468,091
2,254,305

1,257,849
2,440,239
294,457

3,992,545
2,595,907

277,416
160,795
5,804
–
315,656
328,250
(81,473)

131,222
112,873
5,697
21,524
200,310
810,300
(56,107)

1,006,448

1,225,819

1,247,857

1,370,088

(459,423)

(6,130)

788,434

1,363,958

0.01
0.00

$
$

0.01
0.01

147,972,355
165,687,355

147,472,355
159,947,355

$
$

For the years ended December 31,

Cash provided by (used in)
OPERATING ACTIVITIES
Net income (loss) for the year
Add-Items not affecting cash:
Depreciation (Note 14)
Amortization (Note 15)
Interest expense
Share-based payment (Note 20)
Shares for debt issued (Note 20)

Net change in non-cash working capital items,
Decrease (increase) in trades and other receivable
(Decrease) increase in deferred revenue
Increase in bid/performance bond
(Increase) decrease in prepaid expenses and deposits
(Decrease) increase in accounts payable and accrued

liabilities

Increase (decrease) in leasehold liability
Increase (decrease) in loans payable

TOTAL CASH IN-FLOW FROM OPERATING ACTIVITIES

FINANCING ACTIVITIES
Proceeds from Loans (Note 18)
Drawdown (repayment) in long-term debt (Note 18)
Increase in bank indebtedness (Note 18)
Interest paid
Issuance of common shares (Note 20)
Lease payment (Note 16)

TOTAL CASH (OUT-FLOW) FROM FINANCING
ACTIVITIES

INVESTING ACTIVITIES
Disposal of property, plant and equipment (Note 14)
(Additions) intangible assets (Note 15)

TOTAL CASH (OUT-FLOW) FROM INVESTING ACTIVITIES

NET INCREASE IN CASH

Cash balance, beginning of period

Cash balance, end of period

NTG CLARITY NETWORKS INC.
Consolidated Statements of Cash Flows
(In Canadian Dollars)

2022

2021

788,434

1,363,958

160,795
277,416
315,656
328,250
–
1,870,551

(134,474)
–
38,333
(22,305)
445,040

16,510
279,667

2,493,322

–
121,311
(236,747)
(315,656)
25,000
(90,560)

(496,652)

112,873
131,222
200,310
810,300
2,000,000
4,618,663

(1,631,974)
(133,797)
4,468
3,055
(819,852)

(1,552)
(237,454)

1,801,557

161,000
(670,708)
56,334
(182,652)
443,000
(46,472)

(239,498)

(128,299)
(1,302,221)

(97,032)
(1,451,381)

(1,430,520)

(1,548,413)

566,150

158,870

725,020

13,646

145,224

158,870

See accompanying notes to consolidated financial statements.

NTG CLARITY NETWORKS INC.
Notes to the Audited Consolidated Financial Statements
December 31, 2022 and 2021

CORPORATE INFORMATION

NTG Clarity Networks Inc. (the “Corporation”) is domiciled in Canada and its shares are traded publicly
on the TSX Venture Exchange under ticker symbol NCI.V. The Corporation is domiciled in Canada and
was incorporated on May 15, 2001 under the laws of Alberta. The Corporation’s principal and registered
office is Suite 202, 2820 14th Avenue, Markham, Ontario, L3R 0S9.

The Corporation provides network, telecom, IT and infrastructure solutions to medium and large
network service providers. The Corporation specializes in providing telecommunications engineering,
networking and related software solutions and has developed niche software products directed at the
telecom service providers. NTG continues to offer professional telecom and IT services in the North
American and Middle Eastern markets.

The telecom industry is subject to rapid and substantial technological change which could reduce
marketability of the Corporation’s technology and services.

2. GOING CONCERN

The Corporation prepares consolidated financial statements on a going concern basis which presume
the realization of assets and discharge of liabilities in a normal course of business for the foreseeable
future. The Corporation’s ability to continue operations and to realize assets at their carrying values is
dependent upon generating revenues sufficient to cover its operating costs, obtaining additional
financing aid and the continued support of its shareholders.

As at December 31, 2022, the Corporation had a working capital deficit of $3,557,883 (2021: deficit of
$3,757,061), Income from operations of $2,254,305 (2021: $2,595,907), and accumulated losses since
inception of $22,178,630 (2021: $23,426,487).

The financial statements have been prepared under the assumption that the Corporation is a going
concern and will continue to be in operation for the foreseeable future.

3. BASIS OF PRESENTATION

The audited consolidated financial statements have been prepared on a historical cost basis, except for
certain financial instruments that have been measured at fair value.

NTG CLARITY NETWORKS INC.
Notes to the Audited Consolidated Financial Statements
December 31, 2022 and 2021

3. BASIS OF PRESENTATION (cont’d)

Statement of Compliance
The audited consolidated financial statements of the Corporation have been prepared in accordance
with International Financial Reporting Standards (IFRS) as issued by the International Accounting
Standards Board (IASB), London, and the Interpretations of the International Financial Reporting
Interpretations Committee (IFRIC) and in effect at the closing date of April 26, 2023.

Management of the Corporation prepared the consolidated financial statements of the Corporation
during January and February 2023, and the Board of Directors approved them. The Audit Committee of
the Corporation discussed the audited consolidated financial statements at its meeting on April 26,
2023, and the Board of Directors approved them at its meeting on April 26, 2023.

The audited consolidated financial statements of the Corporation are presented in Canadian dollars.
Amounts are stated in Canadian dollars except where otherwise indicated. The financial statements of
the individual companies is prepared as of the closing date of the Corporation’s financial statements
using the same accounting policies.

In the audited consolidated statement of profit and loss and comprehensive income, consolidated
statement of financial position, consolidated statement of cash flows, and consolidated statement of
changes in equity, certain items are combined for the sake of clarity. These are explained within the
notes. The consolidated statement of profit and loss and comprehensive income is prepared using the
cost-of-sales method. Assets and liabilities are classified by maturity. They are regarded as current if
they mature within one year or within the normal business cycle of the Corporation. The normal
business cycle is defined for this purpose as beginning with the procurement of the resources necessary
for the production process and ending with the receipt of cash or cash equivalents as consideration for
the sale of the goods or services produced in that process. Trade accounts receivable and payable,
claims for tax refunds, and tax liabilities are always presented as current items; deferred tax assets and
liabilities, if any, are presented as non- current items. Provisions (if any), debt and other liabilities are
shown between current and non- current.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of consolidation

The audited consolidated financial statements comprise the financial statements of the Corporation
and its subsidiaries as at December 31, 2022.

The subsidiaries are fully consolidated from the date of acquisition, being the date on which the
Corporation obtains control, and continues to be consolidated until the date that such control ceases.
The financial statements of the subsidiary is prepared for the same reporting period as the parent
corporation using consistent accounting policies. All intra-group balances, income and expenses,
unrealized gains and losses, and dividends resulting from intra-group transactions, if any, are
eliminated in full.

A change in the ownership interest of a subsidiary, without a change of control, is accounted for as
an equity transaction.

NTG CLARITY NETWORKS INC.
Notes to the Audited Consolidated Financial Statements
December 31, 2022 and 2021

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

(a) Basis of consolidation (cont’d)

The subsidiary of the Corporation as of December 31, 2022 is its 95% owned subsidiary, NTG Egypt
Advanced Software, and its wholly owned U.S. subsidiary, NTG Clarity Networks US Inc.

(b) Foreign currency transaction

Translation to the presentation currency

Each entity in the Corporation determines its own functional currency and items included in the
financial statements of each entity are measured using that functional currency. The functional
currency and the presentation currency of the parent entity is the Canadian dollar. Transactions in
foreign currencies are initially recorded in respective functional currency rates at the date of the
transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the
functional currency rate at the reporting date. Differences are taken to the statement of profit or loss
and comprehensive income. Non-monetary items that are measured in terms of historical cost in a
foreign currency are translated using the exchange rates as at the dates of the initial transactions.

The functional currency of the subsidiary NTG Egypt Advanced is the Egyptian pound, and the
functional currency of the subsidiary NTG Clarity Networks US Inc. is the US Dollar.

An entity may present its financial statements in any currency (or currencies). If the presentation
currency differs from the entity's functional currency, it translates its results and financial position
into the presentation currency. For example, when a group contains individual entities with different
functional currencies, the results and financial position of each entity are expressed in a common
currency so that consolidated financial statements may be presented.

The results and financial position of an entity whose functional currency is not the currency of a
hyperinflationary economy shall be translated into a different presentation currency using the
following procedures:

 Assets and liabilities for each statement of financial position presented (i.e. including
comparatives) shall be translated at the closing rate at the date of that statement of financial
position;



Income and expenses for each statement presenting profit or loss and other comprehensive
income (i.e. including comparatives) shall be translated at exchange rates at the dates of the
transactions; and

 All resulting exchange differences shall be recognized in other comprehensive income.

For practical reasons, a rate that approximates the exchange rates at the dates of the transactions,
for example an average rate for the period, is often used to translate income and expense items.
However, if exchange rates fluctuate significantly, the use of the average rate for a period is
inappropriate.

NTG CLARITY NETWORKS INC.
Notes to the Audited Consolidated Financial Statements
December 31, 2022 and 2021

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

(b) Foreign currency transaction (cont'd)

Translation to the presentation currency (cont’d)

The exchange differences referred to in IAS 21.39(c) result from:

 Translating income and expenses at the exchange rates at the dates of the transactions and assets

and liabilities at the closing rate.

 Translating the opening net assets at a closing rate that differs from the previous closing rate.

These exchange differences are not recognized in profit or loss because the changes in exchange rates
have little or no direct effect on the present and future cash flows from operations. The cumulative
amount of the exchange differences is presented in a separate component of equity until disposal of
the foreign operation. When the exchange differences relate to a foreign operation that is
consolidated but not wholly-owned, accumulated exchange differences arising from translation and
attributable to non-controlling interests are allocated to, and recognized as part of, non-controlling
interests in the consolidated statement of financial position.

The results and financial position of an entity whose functional currency is the currency of a
hyperinflationary economy shall be translated into a different presentation currency using the
following procedures:

 All amounts (i.e. assets, liabilities, equity items, income and expenses, including comparatives)
shall be translated at the closing rate at the date of the most recent statement of financial
position, except that

 When amounts are translated into the currency of a non-hyperinflationary economy,
comparative amounts shall be those that were presented as current year amounts in the relevant
prior year financial statements (i.e. not adjusted for subsequent changes in the price level or
subsequent changes in exchange rates).

When an entity's functional currency is the currency of a hyperinflationary economy, the entity shall
restate its financial statements in accordance with before applying the translation method set out in
IAS 21., except for comparative amounts that are translated into a currency of a non-
hyperinflationary economy (see IAS 21.42(b)). When the economy ceases to be hyperinflationary and
the entity no longer restates its financial statements in accordance with IAS 29, it shall use as the
historical costs for translation into the presentation currency the amounts restated to the price level
at the date the entity ceased restating its financial statements.

Translation of a foreign operation

IAS 21.–47, in addition to IAS 21.–43, apply when the results and financial position of a foreign
operation are translated into a presentation currency so that the foreign operation can be included
in the financial statements of the reporting entity by consolidation or the equity method.

NTG CLARITY NETWORKS INC.
Notes to the Audited Consolidated Financial Statements
December 31, 2022 and 2021

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

(b) Foreign currency transaction (cont'd)

Translation of a foreign operation (cont’d)

The incorporation of the results and financial position of a foreign operation with those of the
reporting entity follows normal consolidation procedures, such as the elimination of intra-group
balances and intra-group transactions of a subsidiary (see Consolidated Financial Statements).
However, an intra-group monetary asset (or liability), whether short-term or long-term, cannot be
eliminated against the corresponding intra-group liability (or asset) without showing the results of
currency fluctuations in the consolidated financial statements. This is because the monetary item
represents a commitment to convert one currency into another and exposes the reporting entity to
a gain or loss through currency fluctuations. Accordingly, in the consolidated financial statements of
the reporting entity, such an exchange difference is recognized in profit or loss or, if it arises from
the circumstances described in IAS 21, it is recognized in other comprehensive income and
accumulated in a separate component of equity until the disposal of the foreign operation.

When the financial statements of a foreign operation are as of a date different from that of the
reporting entity, the foreign operation often prepares additional statements as of the same date as
the reporting entity's financial statements. When this is not done, allows the use of a different date
provided that the difference is no greater than three months and adjustments are made for the
effects of any significant transactions or other events that occur between the different dates. In such
a case, the assets and liabilities of the foreign operation are translated at the exchange rate at the
end of the reporting period of the foreign operation. Adjustments are made for significant changes
in exchange rates up to the end of the reporting period of the reporting entity in accordance with
IFRS 10.

Disposal or partial disposal of a foreign operation

On the disposal of a foreign operation, the cumulative amount of the exchange differences relating
to that foreign operation, recognized in other comprehensive income and accumulated in the
separate component of equity, shall be reclassified from equity to profit or loss (as a reclassification
adjustment) when the gain or loss on disposal is recognized.

In addition to the disposal of an entity's entire interest in a foreign operation, the following partial
disposals are accounted for as disposals:

 When the partial disposal involves the loss of control of a subsidiary that includes a foreign
operation, regardless of whether the entity retains a non-controlling interest in its former
subsidiary after the partial disposal; and

 When the retained interest after the partial disposal of an interest in a joint arrangement or a
partial disposal of an interest in an associate that includes a foreign operation is a financial asset
that includes a foreign operation.

On disposal of a subsidiary that includes a foreign operation, the cumulative amount of the exchange
differences relating to that foreign operation that have been attributed to the non-controlling
interests shall be unrecognized, but shall not be reclassified to profit or loss.

NTG CLARITY NETWORKS INC.
Notes to the Audited Consolidated Financial Statements
December 31, 2022 and 2021

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

(b) Foreign currency transaction (cont'd)

Disposal or partial disposal of a foreign operation (cont’d)

On the partial disposal of a subsidiary that includes a foreign operation, the entity shall re- attribute
the proportionate share of the cumulative amount of the exchange differences recognized in other
comprehensive income to the non-controlling interests in that foreign operation. In any other partial
disposal of a foreign operation the entity shall reclassify to profit or loss only the proportionate share
of the cumulative amount of the exchange differences recognized in other comprehensive income.

A partial disposal of an entity's interest in a foreign operation is any reduction in an entity's ownership
interest in a foreign operation, except those reductions in paragraph that are accounted for as
disposals.

An entity may dispose or partially dispose of its interest in a foreign operation through sale,
liquidation, repayment of share capital or abandonment of all, or part of, that entity. A write-down
of the carrying amount of a foreign operation, either because of its own losses or because of an
impairment recognized by the investor, does not constitute a partial disposal. Accordingly, no part of
the foreign exchange gain or loss recognized in other comprehensive income is reclassified to profit
or loss at the time of a write-down.

The Corporation derives revenue from fees charged to customers for licenses for software products
and professional services: support, consulting, development, training, and other services. Some of
the Corporation's software arrangements include product sales and professional services.

If, for any of the Corporation's product or service offerings, the Corporation determines at the outset
of an arrangement that the amount of revenue cannot be measured reliably, the Corporation
concludes that the inflow of economic benefits associated with the transaction is not probable and
defers revenue until the arrangement fee becomes due and payable by the customer. If, at the outset
of an arrangement, it is determined that collectability is not probable, the Corporation concludes that
the inflow of economic benefits associated with the transaction is not probable, and recognition of
revenue is deferred until the earlier of when collectability becomes probable or payment is received.
If collectability becomes unlikely before all revenue from an arrangement is recognized, revenue is
recognized only to the extent of the fees that are successfully collected unless collectability becomes
reasonably assured again. If a customer is specifically identified as a bad debtor, the Corporation stops
recognizing revenue from this customer except to the extent of the fees that have already been
collected.

Software revenue represents fees earned from the sale or license of software to customers for use
on the customer’s premises, in other words, where the customer has the right to take possession of
the software for installation on the customer’s premises (on-premise software). The fee of the sale is
recognized net of returns and allowances, trade discounts, and volume rebates. In general, the
Corporation's software license agreements do not include acceptance-testing provisions.

NTG CLARITY NETWORKS INC.
Notes to the Audited Consolidated Financial Statements
December 31, 2022 and 2021

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

If an arrangement allows for customer acceptance-testing of the software, revenue is deferred until
the earlier of customer acceptance or when the acceptance right lapses. The Corporation may enter
into customer-specific on-premise software development agreements. Software revenue in
connection with these arrangements is recognized using the percentage-of completion method based
on contract costs incurred to date as a percentage of total estimated contract costs required to
complete the development work. If there is no sufficient basis to reasonably measure the progress of
completion or to estimate the total contract revenue and costs, revenue is recognized only to the
extent of the contract costs incurred for which recoverability is believed to be probable. When it
becomes that total contract costs exceed total contract revenue in an arrangement, the expected
losses are recognized immediately as an expense based on the costs attributable to the contract.

On-premise software may combine software and support service elements, as under these contracts
the customer is provided with current software products, rights to receive unspecified future
software products, and rights to services during the on-premise software subscription term.
Customers pay a periodic fee for a defined subscription term, and such fees are recognized ratably
over the term of the arrangement beginning with the delivery of the first product.

Support revenue represents fees earned from providing customers with unspecified future software
updates, upgrades, and enhancements, and technical product support for on-premise software
products. Support revenue is recognized based on the Corporation's performance under the support
arrangements. Under the major support services the Corporation's performance obligation is to stand
ready to provide technical product support and to provide unspecified updates and enhancements
on a when and- if-available basis. For these support services, revenue is recognized ratably over the
term of the support arrangement. Consulting and other service revenue is recognized when the
services are performed. Consulting revenue primarily results from implementation contracts to install
and configure our software products and offerings. Other service revenue consists of fees from
training services. Training services provide educational services to customers and partners regarding
the use of our software products. Training revenue is recognized when the services are rendered.

Some arrangements contain multiple elements. Software, consulting and other service deliverables
are accounted for as separate units of accounting and allocate revenue based on fair value. Fair value
is determined by establishing either corporation-specific objective evidence, or an estimated stand-
alone selling price. Revenue from multiple-element arrangements is allocated to the different
elements based on their individual fair values. The revenue amounts allocated to the individual
elements are recognized when the revenue recognition criteria described above have been met for
the respective element.

The Corporation determines the fair value of and allocate revenue to each element based on its
corporation-specific objective evidence of fair value, which is the price charged when that element is
sold separately or, for elements not yet sold separately, the price established by management if it is
probable that the price will not change before the element is sold separately.

NTG CLARITY NETWORKS INC.
Notes to the Audited Consolidated Financial Statements
December 31, 2022 and 2021

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

Revenues from customers of Zaha Tech (Note 29) are recognized on a net basis, as the Corporation
does not control the services provided by Zaha Tech to the end user. NTG invoices the customers of
Zaha Tech, and retains a 10% administrative fee upon receipt of the funds from the customer. All
liabilities of the contract lie with Zaha Tech and NTG holds no obligation for the performance of the
contract.

(d) Taxes

Current income tax

Current income tax assets and liabilities for the respective and prior years are measured at the
amount expected to be recovered from or paid to the Canadian taxation authorities. The tax rates
and tax laws used to compute the amount are those that are enacted or substantively enacted, by
the reporting date, in the country where the Corporation operates and generates taxable income.

Current income tax relating to items recognized directly in equity is recognized in equity and not in
the statement of profit and loss and comprehensive income. Management periodically evaluates
positions taken in the tax returns with respect to situations in which applicable tax regulations are
subject to interpretation and establishes provisions where appropriate in accordance with IAS 37
Provisions, Contingent Liabilities, and Contingent Assets.

Deferred tax

Deferred tax is provided using the liability method on temporary differences at the reporting date
between the tax bases of assets and liabilities and their carrying amounts for financial reporting
purposes.

Deferred tax liabilities are recognized for all taxable temporary differences, except:

 Where the deferred tax liability arises from an asset or liability in a transaction that is not a
business combination and, at the time of the transaction, affects neither the accounting profit nor
taxable profit or loss.



In respect of taxable temporary differences associated with investments in the subsidiary where
the timing of the reversal of the temporary differences can be controlled and it is probable that
the temporary differences will not reverse in the foreseeable future

Deferred tax assets are recognized for all deductible temporary differences, carry forward of unused
tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available
against which the deductible temporary differences, and the carry forward of unused tax credits and
unused tax losses can be utilized, except:

 Where the deferred tax asset relating to the deductible temporary difference arises from the
initial recognition of an asset or liability in a transaction that is not a business combination and, at
the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

NTG CLARITY NETWORKS INC.
Notes to the Audited Consolidated Financial Statements
December 31, 2022 and 2021

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

(d) Taxes (cont'd)

Deferred tax (cont’d)



In respect of deductible temporary differences associated with investments in the subsidiary,
deferred tax assets are recognized only to the extent that it is probable that the temporary
differences will reverse in the foreseeable future and taxable profit will be available against which
the temporary differences can be utilized.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the
extent that it is no longer probable that sufficient taxable profit will be available to allow all or part
of the deferred tax asset to be utilized.

Unrecognized deferred tax assets are reassessed at each reporting date and are recognized to the
extent that it has become probable that future taxable profits will allow the deferred tax asset to be
recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the
period when the asset is realized or the liability is settled, based on tax rates and tax laws that have
been enacted or substantively enacted at the reporting date.

Deferred tax relating to items recognized outside profit or loss is recognized outside profit or loss.
Deferred tax items are recognized in correlation to the underlying transaction either in other
comprehensive income or directly in equity.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off
current tax assets against current income tax liabilities and the deferred tax relates to the same
taxable entity and the same taxation authority.

Sales tax

Revenues, expenses, liabilities and assets are recognized net of the amount of sales tax except:

• Where the sales tax incurred on a purchase of assets or services is not recoverable from the
taxation authority, in which case the sales tax is recognized as part of the cost of acquisition of
the asset or as part of the expense item as applicable.

• Receivables and payables that are stated with the amount of sales tax included.

The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part
of receivables or payables in the statement of financial position.

(e) Government grants and assistance and investment tax credit

Government grants and assistance are recognized where there is reasonable assurance that the
grant or assistance will be received and all attached conditions will be complied with. When the
grant or assistance relates to an expense item, it is recognized as income over the period necessary
to match the grant or assistance on a systematic basis to the costs that it is intended to compensate.
Where the grant relates to an asset, it reduces the carrying amount of the asset.

NTG CLARITY NETWORKS INC.
Notes to the Audited Consolidated Financial Statements
December 31, 2022 and 2021

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

(e) Government grants and assistance and investment tax credit (cont’d)

The grant is then recognized as income over the useful life of a depreciable asset by way of a reduced
depreciation charge. When government assistance is received which relates to expenses of future
periods, the amount is deferred and amortized to income as the related expenditures are incurred.

(f) Financial instruments - initial recognition and subsequent measurement

Financial assets and financial liabilities are recognized when the Corporation becomes party to the
contractual provisions of the financial instrument.

Financial assets and financial liabilities are initially measured at fair value. Transactions costs that
are directly attributable to the acquisition or issue of financial instruments classified as amortized
costs or FVTOCI are included with the carrying amount of such instruments. Transaction costs that
are directly attributable to the acquisition or issue of the financial instruments classified as fair value
through profit and loss (FVTPL) are recognized immediately in the profit or loss within the
consolidated statements of comprehensive income.

(i) Financial assets

The corporation classifies its financial assets in the following measurement categories: those to
be measured at amortized cost and those to be measured subsequently at fair value (either
through other comprehensive income (FVTOCI), or through profit or loss (FVTPL)). The
classification depends on the entity's business model for managing the financial assets and the
contractual terms of cash flows.

Financial assets at amortized cost

Financial assets that meet the following conditions are measured at amortized cost less
impairment losses: the financial asset is held within a business model whose objective is to hold
financial assets in order to collect contractual cash-flows; the contractual terms of the financial
asset give rise on specific dates to cash flows that are solely payments of principal and interest
on the principal amount outstanding; and the financial asset was not acquired principally for the
purpose of selling in the near term or for short-term profit making (held-for-trading).

Financial assets at fair value through profit or loss (FVTPL)

All other financial assets, except equity and debt instruments as described below, are remeasured
at fair value and classified as fair value through profit or loss. The gains or losses, if any, arising
on remeasurement of FVTPL are recognized in profit or loss within the consolidated statements
of comprehensive income.

The method of measurement of instruments in debt instruments will depend on the business
model in which the instrument is held. For instruments in equity instruments, it will depend on
whether the Corporation has made an irrevocable election at the time of initial recognition to
account for the equity instrument at fair value through other comprehensive income (FVTOCI).

NTG CLARITY NETWORKS INC.
Notes to the Audited Consolidated Financial Statements
December 31, 2022 and 2021

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

(f) Financial instruments - initial recognition and subsequent measurement (cont'd)

(i) Financial assets (cont’d)

Financial assets at fair value through profit or loss (FVTPL) (cont’d)

Financial assets with embedded derivatives are considered in their entirety when determining
whether their cash flows are solely payment of principal and interest.

(ii) Financial liabilities

Financial liabilities are classified as FVTPL when the financial liability is either held-for-trading or
is designated at FVTPL. Financial liabilities at FVTPL are remeasured in subsequent reporting
periods at fair value. Any gains or losses arising on remeasurement of held for trading financial
liabilities are recognized in profit or loss within the consolidated statements of comprehensive
income. Such gains or losses recognized in profit or loss includes any interest paid on the financial
liabilities. Financial liabilities that are not held for trading and are not designated as FVTPL are
measured at amortized cost. The carrying amounts of financial liabilities that are measured at
amortized cost are determined based on the effective interest rate method. The effective interest
method is a method of calculating the amortized cost of a financial liability (or financial asset) and
of allocating interest expense (or income) over the expected life of the financial liability (or
financial asset). All financial assets and financial liabilities held by the Corporation are measured
at amortized cost.

Impairment

The Corporation assesses on a forward-looking basis the expected credit losses associated with
its assets carried at amortized cost and FVTOCI. The impairment methodology applied depends
on whether there has been a significant increase in credit risk. For trade receivables only, the
Corporation applies the simplified approach permitted by IFRS 9, which requires expected
lifetime losses to be recognized from initial recognition of the receivables.

The Corporation has applied IFRS 9 retrospectively, but has elected not to restate comparative
information as there is no impact on the financial statements of the Corporation from adopting
IFRS 9. As a result, the comparative information provided continues to be accounted for in
accordance with the Corporation’s previous accounting policy which reflects the same
measurement of IFRS 9.

The accounting policies were changed to comply with the full requirements of IFRS 9 as issued by
the IASB. IFRS 9 replaces the provisions of IAS 39 that relate to the recognition, classification and
measurement of financial assets and financial liabilities; derecognition of financial instruments;
impairment of financial assets and hedge accounting. IFRS 9 also significantly amends other
standards dealing with financial instruments such as IFRS 7 Financial Instruments: Disclosures.
The total impact on retained earnings due to classification and measurement of financial
instruments as at January 1, 2016 and the date of these financial statements was Nil.

NTG CLARITY NETWORKS INC.
Notes to the Audited Consolidated Financial Statements
December 31, 2022 and 2021

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

(f) Financial instruments - initial recognition and subsequent measurement (cont'd)

(iii) Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount reported in the statement
of financial position if, and only if, there is a currently enforceable legal right to offset the
recognized amounts and there is an intention to settle on a net basis, or to realize the assets and
settle the liabilities simultaneously.

(g) Compound instruments

The component parts of compound instruments (e.g., debt issued with warrants) issued by the
Corporation are classified separately as financial liabilities and equity in accordance with the
substance of the contractual arrangements and the definitions of a financial liability and an equity
instrument. At the date of issue, the fair value of the liability component is estimated using the
prevailing market interest rate for similar debt without warrants. This amount is recorded as a liability
on the amortized cost basis using the effective interest method until extinguished or at the
instrument’s maturity date.

The warrants classified as equity are determined by deducting the amount of the liability component
from the fair value of the instrument as a whole. This is recognized and included in equity and is not
subsequently remeasured. Warrants classified as equity will remain in equity until the conversion
option is exercised, in which case the balance recognized in equity will be transferred to common
shares within equity. When the warrants remain unexercised at their maturity date, the balance
recognized in equity will be transferred to retained earnings or deficit. No gain or loss is recognized
in profit or loss upon conversion or expiration of the warrants. Transaction costs that relate to the
issue of the instruments are allocated to the liability and equity components in proportion to the
allocation of the gross proceeds. Transaction costs relating to the equity component are recognized
directly in equity. Transaction costs relating to the liability component are included in the carrying
amount of the liability component and are amortized over the life of the debt using the effective
interest method.

(h) Derivative financial instruments and hedge accounting

The Corporation has not entered into any derivative financial instruments and has not applied hedge
accounting for the years ending December 31, 2022 and December 31, 2021.

(i) Treasury shares

Equity instruments of the entity which are reacquired (treasury shares) are recognized at cost and
deducted from equity. No gain or loss is recognized in the statement of profit and loss and
comprehensive income on the purchase, sale, issue, or cancellation of the Corporation’s own equity
instruments. Any difference between the carrying amount and the consideration is recognized in
capital reserves.

NTG CLARITY NETWORKS INC.
Notes to the Audited Consolidated Financial Statements
December 31, 2022 and 2021

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

(j) Property and equipment

Property and equipment is stated at cost, net of accumulated depreciation and accumulated
impairment losses (if any). Such cost includes the cost of replacing part of the property and equipment
and borrowing costs for long-term construction projects if the recognition criterion are met. When
significant parts of property and equipment are required to be replaced in intervals, the Corporation
recognizes such parts as individual assets with specific useful lives and depreciation, respectively.
Likewise, when a major inspection is performed, its cost is recognized in the carrying amount of the
property and equipment as a replacement if the recognition criteria are satisfied. All other repair and
maintenance costs are recognized in the statement of profit and loss and comprehensive income as
incurred. The present value of the expected cost for the decommissioning of the asset, if any, after
its use is included in the cost of the respective asset if the recognition criteria for a provision are met.

Depreciation is calculated on a straight-line basis over the estimated useful life of the asset as follows:

Computer software
Computer equipment
Office equipment
Leasehold improvements

Straight-line 1-2 years
Straight-line 2-4 years
Straight-line 4-10 years
Straight-line over the lesser of the expected term of the
lease or the useful life of the asset

An item of property and equipment and any significant part initially recognized is derecognized upon
disposal or when no future economic benefits are expected from its use. Any gain or loss arising on
derecognition of the asset (calculated as the difference between the net disposal proceeds and the
carrying amount of the asset) is included in the statement of profit and loss and comprehensive
income when the asset is derecognized.

The assets’ residual values, useful lives, and methods of depreciation are reviewed at each financial
year end and adjusted prospectively, if appropriate.

(k) Leases

Finance leases, which transfer to the Corporation substantially all the risks and benefits incidental to
ownership of the leased item, are capitalized at the commencement of the lease at the fair value of
the leased property or, if lower, at the present value of the minimum lease payments. Lease payments
are apportioned between finance charges and reduction of the lease liability so as to achieve a
constant rate of interest on the remaining balance of the liability. Finance charges are recognized in
the statement of profit and loss and comprehensive income.

Leased assets are depreciated over the useful life of the asset. However, if there is no reasonable
certainty that the Corporation will obtain ownership by the end of the lease term, the asset is
depreciated over the shorter of the estimated useful life of the asset and the lease term.

Operating lease payments are recognized as an expense in the statement of profit and loss and
comprehensive income on a straight-line basis over the lease term.

NTG CLARITY NETWORKS INC.
Notes to the Audited Consolidated Financial Statements
December 31, 2022 and 2021

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

(l) Borrowing costs

Borrowing costs directly attributable to the acquisition, construction, or production of an asset that
necessarily takes a substantial year of time to get ready for its intended use or sale are capitalized as
part of the cost of the respective assets. All other borrowing costs are expensed in the year they
occur. Borrowing costs consist of interest and other costs that the Corporation incurs in connection
with the borrowing of funds. For the years ending December 31, 2022 and December 31, 2021, the
Corporation did not capitalize any borrowing cost.

(m) Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. Following initial
recognition, intangible assets are carried at cost less any accumulated amortization and any
accumulated impairment losses. Certain internally generated intangible assets are capitalized, as they
meet the criterion under IAS 38.

(n) Inventories

Inventories are measured at the lower of cost and net realizable value. Net realizable value is the
estimated selling price in the ordinary course of business, less the estimated costs of completion and
the estimated costs necessary to make the sale.

(o) Product development costs

Research and product development costs include out-of-pocket cost and direct overhead. Research
costs are expensed as incurred. Product development costs are expensed as incurred unless they
meet the IAS 38 criterion for deferral and amortization.

Development activities involve a plan or design for the production of a new core of substantially
improved products and processes. Development expenditure is capitalized only if development costs
can be measured reliably, the product or process is technically and commercially feasible, future
economic benefits are probable, and the Corporation intends to and has sufficient resources to
complete development and to use or sell the asset. The expenditure capitalized includes the cost of
materials, direct labour and overhead costs that are directly attributable to preparing the asset for
its intended use. All other development expenditure is recognized in statement of profit and loss and
comprehensive income as incurred.

Capitalized development costs (intangible asset) with finite useful lives are amortized over their
estimated useful lives. The amortization methods and estimated useful lives of intangible assets are
reviewed annually. Intangible assets are tested for impairment as required by IAS 38 and IAS 36 if
there are indicators of impairment. If any such indication exists, the asset’s recoverable amount is
estimated. An impairment loss is recognized whenever the carrying amount of the intangible assets
or the cash-generating unit exceeds their recoverable amount. Impairment losses are recognized in
the statements of comprehensive income. Amortization is provided on a straight-line basis over 10
years.

NTG CLARITY NETWORKS INC.
Notes to the Audited Consolidated Financial Statements
December 31, 2022 and 2021

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

(p) Impairment of non-financial assets

The Corporation assesses at each reporting date whether there is an indication that an asset or cash
generating unit (CGU) may be impaired. If any indication exists, or when annual impairment testing
for an asset is required, the Corporation estimates the asset’s (CGU) recoverable amount. An asset’s
(CGU) recoverable amount is the higher of its fair value less costs of disposal and its value in use.
Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered
impaired and is written down to its recoverable amount. In assessing value in use, the estimated
future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset or cash-
generating unit (CGU). In determining fair value less costs of disposal, an appropriate valuation model
is used. The Corporation has cash- generating units which impairment could be tested against. The
Corporation had no goodwill or indefinite life intangible assets for the years ending December 31,
2022 and December 31, 2021.

Impairment losses of continuing operations are recognized in the statement of profit and loss and
comprehensive income in those expense categories consistent with the function and nature of the
impaired asset.

For non-financial assets, an assessment is made at each reporting date as to whether there is any
indication that previously recognized impairment losses may no longer exist or may have decreased.
If such indication exists, the Corporation estimates the non-financial asset’s or cash- generating unit’s
recoverable amount.

A previously recognized impairment loss is reversed only if there has been a change in the
assumptions used to determine the non-financial asset’s recoverable amount since the last
impairment loss was recognized.

The reversal is limited so that the carrying amount of the non-financial asset does not exceed its
recoverable amount, nor exceed the carrying amount that would have been determined, net of
depreciation, had no impairment loss been recognized for the non-financial asset in prior periods.
Such reversal is recognized in the statement of profit and loss and comprehensive income.

(q) Cash and cash equivalents

Cash and cash equivalents in the statement of financial position comprise cash at banks and on hand
and short-term deposits with an original maturity of three months or less. The Corporation uses the
indirect method of reporting cash flow from operating activities.

(r) Provisions

Provisions are recognized when the Corporation has a present obligation, legal or constructive, as a
result of a past event, it is probable that an outflow of resources embodying economic benefits will
be required to settle the obligation, and a reliable estimate can be made of the amount of the
obligation. Where the Corporation expects some or all of a provision to be reimbursed, for example
under an insurance contract, the reimbursement is recognized as a separate asset but only when the
reimbursement is virtually certain.

NTG CLARITY NETWORKS INC.
Notes to the Audited Consolidated Financial Statements
December 31, 2022 and 2021

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

(r) Provisions (cont’d)

The expense relating to any provision is presented in the statement of profit and loss and
comprehensive income net of any reimbursement. If the effect of the time value of money is material,
provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks
specific to the liability. Where discounting is used, the increase in the provision due to the passage of
time is recognized as a finance cost.

A provision for warranties is recognized when the underlying products or services are sold. The
provision is based on the expected warranty data and an expected weighting of all possible outcome
against their associated probabilities.

A provision for restructuring is recognized when the Corporation has approved a detailed and formal
restructuring plan, and the restructuring either has commenced or has been announced publicly. No
provision is made for future operating losses.

A provision for onerous contracts is recognized when the expected benefits to be derived by the
Corporation from a contract are lower than the unavoidable cost of meeting its obligation under the
contract. The provision is measured at the present value of the lower of the expected cost of
terminating the contract and the expected cost net cost of continuing with the contract.

Before a provision is established, the Corporation recognizes any impairment loss on the asset
associated with the contract.

(s) Basic and diluted earnings per share

Basic earnings per share is calculated by dividing the income for the year by the weighted average
number of common shares outstanding during the year. The Corporation uses the treasury stock
method for calculating the dilutive effect of the outstanding stock options and other dilutive
securities. Under the treasury stock method, the weighted average number of common shares
outstanding used for the calculation of diluted income per share assumes that the proceeds to be
received on the exercise of dilutive share options are used to repurchase common shares at the
average market price during the year.

(t) Share-based compensation

The Corporation has a share-based compensation plan. The Corporation accounts for share-based
compensation options granted to employees and consultants using the fair value method. Under this
method, compensation expense for share-based compensation granted is measured at the fair value
at the grant date, using the Black-Scholes option valuation model. In accordance with the fair value
method, the Corporation recognizes estimated compensation expense related to share- based
compensation over the vesting period of the options granted, with the related credit being charged
to capital reserves. Consideration paid by employees on the exercise of share-based compensation is
recorded as capital stock and the related share-based compensation is transferred from capital
reserves to capital stock.

NTG CLARITY NETWORKS INC.
Notes to the Audited Consolidated Financial Statements
December 31, 2022 and 2021

SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES, AND ASSUMPTIONS

The preparation of the Corporation’s consolidated financial statements requires management to make
judgments, estimates, and assumptions that affect the reported amounts of revenues, expenses,
assets, and liabilities, and the disclosure of contingent liabilities, at the end of the reporting years.
However, uncertainty about these assumptions and estimates could result in outcomes that require a
material adjustment to the carrying amount of the asset or liability affected in future years.

In the process of applying the Corporation’s accounting policies, management has made the following
judgments, which has the most significant effect on the amounts recognized in the consolidated
financial statements.

Revenues

The Corporation derives revenue from fees charged to customers for licenses for software products
and for professional services (support, consulting, development, training, etc.). Some of the software
arrangements may contain multiple elements (product sales and professional services). The
Corporation accounts for software, consulting and other service deliverables as separate units of
accounting and allocate revenue based on their individual fair values. The revenue amounts allocated
to the individual elements are recognized when the revenue recognition criteria have been met for the
respective element. When services are essential to the functionality of the software, the software does
not have standalone value and is combined with the essential services as a single element.

Unbilled revenues

Unbilled revenue is revenue which had been earned and therefore recognized in compliance with IFRS,
but which has not been billed to the client(s) due to contract terms and/or billing cycle. Revenue can
be recognized for projects based on time and materials, for professional services or on a percentage of
completion basis for product implementation and support. Both can result in unbilled revenue until the
customer is invoiced.

Impairment of non-financial assets

Impairment exists when the carrying value of a non-financial asset or cash-generating unit exceeds its
recoverable amount, which is the higher of its fair value less costs to sell and its value in use. The value
in use calculation is based on a discounted cash flow model. The cash flows are derived from the
Corporation’s budget and do not include restructuring activities, if any, that the Corporation is not yet
committed to or significant future investments that will enhance the non- financial asset’s performance
of the cash-generating unit being tested. The recoverable amount is most sensitive to the discount rate
used for the discounted cash flow model as well as the expected future cash-inflows and the growth
rate used for extrapolation purposes. The key assumptions used to determine the recoverable amount
for the different cash-generating units may include a sensitivity analysis.

NTG CLARITY NETWORKS INC.
Notes to the Audited Consolidated Financial Statements
December 31, 2022 and 2021

5. SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES, AND ASSUMPTIONS (cont’d)

Taxes

Uncertainties exist with respect to the interpretation of complex tax regulations and the amount and
timing of future taxable income. Given the range of business relationships and the long-term nature of
existing contractual agreements, differences arising between the actual results and the assumptions
made, or future changes to such assumptions, could necessitate future adjustments to tax income and
expense already recorded. The Corporation may establish provisions, based on reasonable estimates,
for possible consequences of audits by the tax authorities. The amount of such provisions is based on
various factors, such as experience of previous tax audits and differing interpretations of tax regulations
by the taxable entity and the responsible tax authority. Deferred tax assets, if any, are recognized for
all unused tax losses to the extent that it is probable that taxable profit will be available against which
the losses can be utilized. Significant management judgment is required to determine the amount of
deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable
profits together with future tax planning strategies.

Share-based compensation

The Corporation has a share-based compensation plan. The Corporation accounts for share-based
compensation options granted to employees and consultants using the fair value method determined
using the Black-Scholes option valuation model. The estimated compensation expense related to share-
based compensation is recognized over the vesting period of the options granted, with the related
credit being charged to contributed surplus. Consideration paid by employees on the exercise of share-
based compensation is recorded as capital stock and the related share-based compensation is
transferred from capital reserves to capital stock.

Fair value of financial instruments

Where the fair value of financial assets and financial liabilities recorded in the statement of financial
position cannot be derived from active markets, they are determined using valuation techniques
including the discounted cash flows model. The inputs to these models are taken from observable
markets where possible, but where this is not feasible, a degree of judgment is required in establishing
fair values. The judgments include considerations of inputs such as liquidity risk, credit risk, and
volatility. Changes in assumptions about these factors could affect the reported fair value of financial
instruments.

Useful life of an intangible asset

Intangible assets with finite lives are amortized on a straight-line basis over their expected useful life
once the asset is available for use. Many factors are considered in determining the useful life of an
intangible asset, including technical, technological, commercial or other types of obsolescence and
typical product life cycles for the asset. Changes to the expected useful life of an asset is accounted for
prospectively.

NTG CLARITY NETWORKS INC.
Notes to the Audited Consolidated Financial Statements
December 31, 2022 and 2021

5. SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES, AND ASSUMPTIONS (cont’d)

Treatment of development costs

Costs to develop products are capitalized to the extent that the criteria are met for recognition as
intangible assets in accordance with IAS 38. Such criteria require that the product is technically and
economically feasible, the Company has the intention and ability to use the asset, and that the asset
will generate future benefits to the Company. Management assessed the capitalization of development
costs based on the attributes of each development project, perceived user needs, industry trends and
expected future economic conditions. Management considers these factors in aggregate and applies
significant judgment to determine whether the product is technically and economically feasible.

STANDARDS ISSUED BUT NOT YET EFFECTIVE

As at April 26, 2023, the date of authorization of these financial statements, certain new standards,
amendments, and interpretations to existing IFRS standards have been published but are not yet
effective and have not been adopted by the Corporation. All other standards were early adopted as
explained in the prior year’s financial statements.

7. OPERATING SEGMENT INFORMATION

For management purposes, the Corporation is organized into two operating segments. The
Corporation's chief decision makers; the Chief Executive Officer, the President and the Chief Financial
Officer, tracks the Corporation's operations by country.

These country segments represent the Corporation’s reportable operating segments, which are used
to manage the business. The Corporation analyses the performance of its operating segments based on
expenditures and revenue growth.

Statement of profit and loss for the year ending December 31, 2022

Revenue

Total revenue
Cost of sales

Gross margin

Expenses
Depreciation / Amortization
Other income
Accretion
Exchange gain (loss) arising on translation

NTG Canada
13,359,140 $

NTG Egypt
4,293,173

Consolidated
Total
17,652,313

13,359,140
7,345,003

4,293,173
3,584,913

17,652,313
10,929,917

6,014,137 $

708,260 $

6,722,396

(4,813,873)
(362,670)
–
(5,804)
–

(298,125)
(75,541)
81,473
–
(459,423)

(5,111,998)
(438,211)
81,473
(5,804)
(459,423)

Total comprehensive income (loss) for the year

831,790 $

(43,356) $

788,434

NTG CLARITY NETWORKS INC.
Notes to the Audited Consolidated Financial Statements
December 31, 2022 and 2021

7. OPERATING SEGMENT INFORMATION (cont’d)

Statement of profit and loss for the year ending December 31, 2021

Revenue
Cost of sales

Gross margin

Expenses
Depreciation / Amortization
Other income
Accretion
Exchange gain (loss) arising on translation

NTG Canada

9,160,608 $
3,691,305

NTG Egypt
2,735,335
1,616,186

Consolidated
Total
11,895,943
5,307,491

5,469,303 $

1,119,149 $

6,588,452

(4,066,114)
(192,207)
–
(5,697)
–

(958,565)
(51,888)
56,107
–
(6,130)

(5,024,679)
(244,095)
56,107
(5,697)
(6,130)

Total comprehensive income (loss) for the year

1,205,285 $

158,673 $

1,363,958

All of the Corporation’s assets are located in Canada and the Middle East.

Long term asset additions for the year ended December 31, 2022

Asset additions for the year ending December 31,
2022

Property and equipment (Note 14)
Intangible assets (Note 15)

NTG Canada

NTG Egypt

Consolidated
Total

2,555 $

125,744 $

1,302,221

–

128,299
1,302,221

1,304,776 $

125,744 $

1,430,520

Long term asset additions for the year ended December 31, 2021

Asset additions for the year ending December 31,
2021

Property and equipment (Note 14)
Intangible assets (Note 15)

NTG Canada

NTG Egypt

Consolidated
Total

6,047 $

1,451,381

90,985 $
–

97,032
1,451,381

1,457,428 $

90,985 $

1,548,413

Long term assets for the year ended December 31, 2022

Assets as at December 31, 2022

Property and equipment
Intangible assets

NTG Canada

NTG Egypt

Consolidated
Total

26,986 $

194,746 $

3,205,601

–

221,732
3,205,601

3,232,587 $

194,746 $

3,427,333

NTG CLARITY NETWORKS INC.
Notes to the Audited Consolidated Financial Statements
December 31, 2022 and 2021

7. OPERATING SEGMENT INFORMATION (cont’d)

Long term assets for the year ended December 31, 2021

Assets as at December 31, 2021

Property and equipment
Intangible assets

NTG Canada

NTG Egypt

Consolidated
Total

38,750 $

144,544 $

2,180,796

–

183,294
2,180,796

2,219,546 $

144,544 $

2,364,090

The Corporation determines the geographic location of revenues based on the location of its customers.

Sales by geographic location for the year ending December 31,

North America
Iraq
Saudi Arabia
Egypt
Oman
Kuwait

2022

428,665 $

1,608,208
10,281,966

4,293,173 $
953,883 $
86,418

2021

465,289
1,203,360
6,855,465
2,735,335
636,494
–

17,652,313 $

11,895,943

$
$
$

In the past, the majority of the Corporation’s revenue is derived from the telecommunication industry.
From 2021, the Corporation has been working within the IT field in the banking industry.

In 2022, approximately 35% (2021: 35%) of the Corporation’s revenue was derived from two customers
(2021: two customers).

Receivables by segment for the year ending December 31,

Canada

Egypt

2022

2,856,315

1,025,205

3,881,520

2021

2,595,374

1,151,672

3,747,046

As at December 31, 2022, approximately 37% (2021: 34%) of the Corporation’s trade accounts
receivable balance was from three customers (2021: one customer).

Payables by segment for the year ending December 31,

2022

2021

Canada

Egypt

Bank indebtedness by segment for the year ending December 31,

Canada

Egypt

6,270,838

5,819,456

714,429

720,771

6,985,267

6,540,227

2022

–

2021

–

389,321

626,068

389,321 $

626,068

NTG CLARITY NETWORKS INC.
Notes to the Audited Consolidated Financial Statements
December 31, 2022 and 2021

INCOME TAXES

The following is a reconciliation of the taxable losses for the years ended as indicated.

NTG Clarity Networks Inc.

As at December 31,

2022

2021

Gain / (loss) before income taxes

831,970

1,205,285

Income tax (recovery) at the combined Canadian federal
and provincial tax rate of 26.5%

Non-deductible share-based payments

Intercompany expenses

Depreciation/amortization of PPE and intangibles

Non-deductible meals & entertainment expenses

Tax effect of utilization of tax losses not previously
recognized

220,424

86,986

(273,288)

96,108

2,675

(132,905)

319,401

214,730

(244,053)

33,774

13,657

(337,509)

Income tax recognized on the statement of comprehensive
income

–

NTG Egypt Advanced Software

As at December 31,

2022

2021

Income before income taxes

416,067

164,803

Income tax at the combined Egyptian federal and provincial
tax rate of 22.5%

Tax effect of utilization of tax losses not previously
recognized

93,615

(93,615)

37,081

(37,081)

Income tax recognized on the statement of comprehensive
income

–

The Corporation has the following unrecognized deferred income tax assets for the years ended as
indicated. They were not recognized on the statements of financial position because it was not probably
that they would be utilized.

As at December 31,

Deferred tax asset in relation to:

Property and equipment

Non-capital loss carry-forwards

Deferred tax assets not recognized

Less: Valuation allowance

Deferred tax asset recognized

2022

2021

29,747

43,133

4,363,987

4,393,734

4,375,903

4,419,036

36,34 –

NTG CLARITY NETWORKS INC.
Notes to the Audited Consolidated Financial Statements
December 31, 2022 and 2021

INCOME TAXES (cont’d)

The corporation has available income tax losses in the amounts of $15,063,997 for the Canadian federal
and provincial tax purposes which may be carried forward to reduce future years' taxable income which
expire as follows:

2037
2039
2040

EARNINGS PER SHARE

6,606,612
6,834,650
1,622,735
15,063,997

Basic earnings per share amounts are calculated by dividing net income for the year attributable to
ordinary equity holders of the parent by the weighted average number of common shares outstanding
during the year.

Diluted earnings per share amounts are calculated by dividing the net income attributable to ordinary
equity holders of the parent by the weighted average number of common shares outstanding during
the year plus the weighted average number of common shares, if any, that would be issued on
conversion of all the dilutive potential effects.

The outstanding number and type of securities that could potentially dilute basic net income per share
in the future but that were not included in the computation of diluted net income per shares because
to do so would have reduced the earnings per share (anti-dilutive) for the year presented are as noted
below.

The following outstanding instruments could have a dilutive effect in the future:

As at December 31, 2022

Options – Share-based payments (Note 20(b))

17,715,000

Note a: Of which 17,565,000 had vested as of December 31, 2022.

The following reflects the earnings and unit data used in the basic and diluted earnings per share
computations:

December 31,

Net earnings (loss) attributable to ordinary equity holders of the parent for
basic earnings

Net earnings (loss) attributable to ordinary equity holders of the parent
adjusted for the effect of dilution

2022

2021

$788,434

$1,363,958

$788,434

$1,363,958

NTG CLARITY NETWORKS INC.
Notes to the Audited Consolidated Financial Statements
December 31, 2022 and 2021

9. EARNINGS PER SHARE (cont’d)

December 31,

2022

2021

Weighted average number of common shares outstanding for basic earnings
per share (Note 19)

147,972,355

147,472,355

Weighted average number with the effect of dilution on common shares

165,687,355

159,947,355

Income per share (basic)

Income per share (diluted)

10. CASH AND CASH EQUIVALENTS

$0.01

$0.00

$0.01

Cash and cash equivalents comprise of cash at banks and on hand in the amount of $725,020 as at
December 31, 2022 (2021: $158,870).

11. TRADE AND OTHER RECEIVABLES

December 31,

Trade receivables

Less: allowance for doubtful debt

Trade receivables after impairment

Unbilled revenue

Less: Impaired

Unbilled revenue after impairment

Total trade receivables and unbilled revenue
after impairment

Receivables from tax authorities

Other receivables

2022

3,188,290

(25,057)

3,163,233

354,485

–

354,485

3,517,718

296,173

67,629

2021

3,035,110

(36,741)

2,998,369

342,574

–

342,574

3,340,943

303,639

102,464

Total trade and other receivables

3,881,520

3,747,046

Trade receivables are non-interest bearing and are generally on 30-180 day terms. The Corporation had
a provision for bad debt in the amount of $25,057 (2021: $36,741). The amount relating to impairment
of trades receivables is $Nil (2021: $21,524).

Neither past due nor impaired

2022

2021

Current

31 – 60 days

61 – 90 days

91 – 180 days

Past due but not impaired

Greater than 180 days

2,230,177

2,092,958

311,791

326,625

199,960

119,737

351,627

74,706

378,893

136,926

3,188,290

3,035,110

Unbilled revenue consists of service revenue that has already been rendered as at December 31, 2022
and recognized in accordance with the Corporation's revenue recognition policy from Note 3.

NTG CLARITY NETWORKS INC.
Notes to the Audited Consolidated Financial Statements
December 31, 2022 and 2021

12. PREPAID EXPENSES AND DEPOSITS

December 31,

Prepaid rent

Prepaid insurance

Other prepaids

13. BID/PERFORMANCE BONDS

2022

47,660

32,372

6,719

86,751

2021

46,380

12,343

5,723

64,446

At December 31, 2022, of the $17,431 in performance bonds (2021: $55,764), $Nil (2021: $28,907) was
for Saudi Arabia (KSA) and $17,431 (2021: $26,857) was for various bonds in Egypt.

Performance bonds typically remain in place for a period of one year from the start of the project and
are released back to the Corporation when the project is completed subsequent to customer
acceptance. Bid bonds are typically in place for a 90-120 day period but can be extended. The bonds
are non-interest bearing.

Performance Bond - Opening Balance January 1,

Saudi Arabia

Egypt

Opening Balance - January 1,

Additions during the year:

Egypt

Total additions during the year

Refunded during the year:

Saudi Arabia

Egypt

Total refunded during the year

Performance Bond - Ending Balance December 31,

Saudi Arabia

Egypt

2022

28,907

26,857

55,764

–

(28,907)

(9,426)

(38,333)

–

17,431

Ending Balance – December 31,

17,431

2021

36,270

23,962

60,232

5,260

(7,363)

(2,365)

(9,728)

28,907

26,857

55,764

NTG CLARITY NETWORKS INC.
Notes to the Audited Consolidated Financial Statements
December 31, 2022 and 2021

14. PROPERTY AND EQUIPMENT

The amount of borrowing costs capitalized during the year ending December 31, 2022 was $Nil (2021:
$Nil).

Cost:
At January 1, 2021
Additions
Disposals
At December 31, 2021

Additions
Disposals

Furniture and
Equipment

Computer
Equipment

Computer
Software

$578,805
2,044
–
$580,849

36,661
–

$834,285
94,988
–
$929,273

91,638
–

$400,996
–
–
$400,996

–
–

Total

$1,814,086
97,032
–
$1,911,118

128,299
–

At December 31, 2022

$617,510

$1,020,911

$400,996

$2,039,417

Accumulated depreciation and impairment:
At January 1, 2021
Depreciation for the year

At December 31, 2021

Depreciation for the year
Impairment
Disposals

At December 31, 2022

Net book value:
At December 31, 2022
At December 31, 2021

15.

INTANGIBLE ASSETS

$470,549
15,204

$485,753

18,808
–
–

$829,450
56,291

$885,741

71,053
–
–

$356,330
–

$356,330

$1,656,329
71,495

$1,727,824

–
–
–

89,861
–
–

$504,561

$956,794

$356,330

$1,817,685

$112,949
$95,096

$64,117
$43,532

$44,666
$44,666

$221,732
$183,294

Intangible assets related to the upgrade of the internally developed the NTGapps (formerly Smart2Go)
platform capitalized from 2020 to 2022. Expenditures on development of the software are recognized
as an asset from the time the Corporation has determined an indefinite future economic benefit exists.

NTGapps will expedite and facilitate the digital transformation journey for enterprises in all business
verticals. It enables enterprises to automate their processes and create applications without need for
development. NTGapps offers the future of rapid application development with different output
format. It is a powerful development tool without the need for knowledge of development languages.
NTGapps is built on NTG's proven workflow technology and provides both a portal and mobile apps for
its users. NTG will provide its NTGapps platform and its associated marketplace of the applications
developed on it, on the cloud, software-as-a-service or on premise for its large enterprise customers.
The platform allows users to graphically build new screens, define and apply business rules, and create
required workflow. In addition, one of the most powerful features of NTGapps is the ease of integration
with other systems such as ERPs, CRMs, financial systems, engineering systems etc. With a mouse click,
supporting various popular integration protocols such as SOAP, REST and others. The development
costs are determined to have a useful life of 10 years are amortized on a straight-line basis.

NTG CLARITY NETWORKS INC.
Notes to the Audited Consolidated Financial Statements
December 31, 2022 and 2021

15. INTANGIBLE ASSETS (cont’d)

During 2022, $1,302,221 was capitalized (2021: $1,451,381), $277,416 was amortized (2021: $131,222).
NTGapps
Development Costs

Cost:
At January 1, 2021

Additions
Disposals

At December 31, 2021

Additions
Disposals

At December 31, 2022

At January 1, 2021
Amortization charge for the year
Impairment
Disposals

At December 31, 2021

Amortization charge for the year
Impairment
Disposals

At December 31, 2022

Net book value:
At December 31, 2022
At December 31, 2021

16. RIGHT OF USE ASSET

$
$

860,636

1,451,381
–

2,312,018

1,302,221
–

3,614,239

–
131,222
–
–

131,222

277,416
–
–

408,638

3,205,601
2,180,796

Right-of-use of Asset as at January 1, 2021

Effect of discounting at the incremental borrowing rate of 19%

Depreciation

Right-of-use of Asset as at January 1, 2022

Present value of lease commitments at a borrowing rate of 19%

Depreciation

Right-of-use Asset as at December 31, 2022

$ –

141,868

(41,378)

100,490

–

(70,934)

$ 29,556

On June 1, 2021, the Corporation leased office space for a period of 2 years, expiring May 31, 2023. The
Corporation recognized right-of-use assets and lease liability of $141,868. The lease liabilities were
measured at the present value of the remaining lease payments, discounted at the Corporation’s
incremental borrowing rate of 19%, which represents a significant accounting judgment.

NTG CLARITY NETWORKS INC.
Notes to the Audited Consolidated Financial Statements
December 31, 2022 and 2021

16. RIGHT OF USE ASSET (cont’d)

Subsequent to year end, we renewed the agreement and committed to pay $8,195 monthly for the
period from June 1, 2023 to May 31, 2024 and $9,232 monthly for the period from June 1, 2024 to May
31, 2025.

Lease liability

The lease liability as at December 31, 2022 is as follows:

Right-of-use of Asset as at January 1, 2021

Effect of discounting at the incremental borrowing rate of 19%

Add: interest accretion during the reporting period

Subtract: lease payments during the reporting period

Lease Liability as at January 1, 2022

Add: present value of new lease commitments at a borrowing rate of 19%

Add: interest accretion during the reporting period

Subtract: lease payments during the reporting period

Lease Liability as at December 31, 2021

Current portion

Long-term portion

The undiscounted future lease payments are as follows:

2023

17. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

$ –

141,868

17,658

(46,472)

113,054

–

16,510

(90,560)

$ 39,004

39,004

–

40,974

$ 40,974

December 31,

Trade payables

Accrued liabilities

Related parties payable

Payroll liability

Payroll taxes payable

Sales taxes payable

Other accounts payable

2022

2021

1,488,841

2,176,036

174,237

1,608,735

2,231,833

17,069

817,241

647,311

45,702

1,376,360

1,330,148

111,622

719,964

780,395

6,985,267

6,540,227

NTG CLARITY NETWORKS INC.
Notes to the Audited Consolidated Financial Statements
December 31, 2022 and 2021

17. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (cont’d)

Terms and conditions of the above financial liabilities:

• Trade payables and accrued liabilities are non-interest bearing.
• Related parties’ payables are interest bearing at 5-8% interest per annum, $103,363 (2021:
$111,277) was recognized as an interest accrued for the year ended December 31, 2022 and have
no specific terms of repayment.

18. OTHER FINANCIAL ASSETS AND FINANCIAL LIABILITIES

(a) Other financial liabilities

Long-term debt

December 31,

Long-term debt (i)

CEBA loan (Note 19)

Long-term portion of CIB loan (Note 18)

2022

2021

$ 6,512,880

10,000

153,254

34,196

40,250

$ 6,676,134

$ 6,587,326

(i) On September 16, 2019, the Corporation received a formal demand for payment of its Bank
facilities, requesting payment in full within ten (10) days. The Bank assigned the Bank
Indebtedness and the Security to 2729252 Ontario Inc., a company controlled by Ashraf Zaghloul,
NTG CEO and Kristine Lewis, NTG President.

Effective December 16, 2019, all the rights, title and interest of the Bank Indebtedness and the
Security together the full benefit of all powers and all covenants and provisions contained in the
Security were assigned to the above company. The loan remains secured by a General Security
Agreement over the assets of the Corporation and has an interest rate of bank prime plus 2.05%.
There are no specific repayment terms. The Corporation recognized interest expense of $74,312
(2021: $49,822) which is included in above loan balance.

In 2021, the corporation issued pursuant to the private placement, 15,000,000 common shares at
the deemed price of $0.05 cents to settle the partial indebtedness of $750,000.

December 31,

Bank indebtedness (i)

Bank indebtedness

Long-term debt (ii)

Long-term debt Payable (CIB Loan)

- Current portion

- Long term

2022

2021

$ 389,321

$ 626,068

$ 306,507

$ 161,000

$ 153,253

$ 153,254

$ 120,750

$ 40,250

As of December 31, 2022, NTG Egypt Advanced Software has the following credit facilities:

(i) Overdraft facility with QNB bank in Egypt in the amount of 7,091,454 Egyptian pounds

(approximately $389,321, 2021: $626,068) with an interest rate of 18%.

NTG CLARITY NETWORKS INC.
Notes to the Audited Consolidated Financial Statements
December 31, 2022 and 2021

18. OTHER FINANCIAL ASSETS AND FINANCIAL LIABILITIES (cont’d)

(a) Other financial liabilities (cont’d)

(ii) In May 2021, the company had a loan with CIB bank in Egypt in the amount of 3,000,000
Egyptian pounds at interest rate of 7% per annum, repayable in monthly principal payments of
125,000 Egyptian pounds plus interest. In 2022, the company increased the credit facility to
5,583,000 Egyptian pounds, repayable over 2 years in monthly principal payments of 232,625
Egyptian pounds plus interest. The loan outstanding as on year end is 5,583,000 Egyptian
pounds (approximately $306,507, (2021: $161,000).

(b) Fair values

Set out below is a comparison by class of the carrying amount and fair value of the Corporation's
financial instruments that are carried in the financial statements.

Carrying Amount

December 31,
2022

December
31, 2021

Fair Value

December 31,
2022

December
31, 2021

Financial assets

Cash and cash equivalents

Trade and accounts receivable

Bid/performance bonds

$ 725,020

3,881,520

17,431

$ 158,870

3,747,046

55,764

$ 725,020

$ 158,870

3,881,520

17,431

3,747,046

55,764

Total Financial Assets

$4,623,971

$3,961,680

$4,623,971

$3,961,680

Carrying Amount

Fair Value

December 31,
2022

December
31, 2021

December 31,
2022

December 31,
2021

$6,985,267

$6,540,227

$6,985,267

$6,540,227

389,321

153,254

626,068

120,750

389,321

153,254

626,068

120,750

Financial liabilities

Accounts payable and accrued
liabilities

Bank indebtedness

Current portion of long-term
debt

Long-term debt

6,676,134

6,587,326

6,676,134

6,587,326

Total Financial Liabilities

$14,203,975

$13,874,371

$14,203,975

$13,874,371

The fair value of the financial assets and financial liabilities are included at the amount at which the
instrument could be exchanged in an orderly transaction between market participants in an arm's
length transaction at the measurement date.

The following methods and assumptions were used to estimate the fair values:

•

Trade and other accounts receivables, accounts payable and accrued liabilities, other current
liabilities approximate their carrying amounts largely due to the short-term maturities of these
instruments.

NTG CLARITY NETWORKS INC.
Notes to the Audited Consolidated Financial Statements
December 31, 2022 and 2021

18. OTHER FINANCIAL ASSETS AND FINANCIAL LIABILITIES (cont’d)

(b) Fair values (cont’d)

•

Fair values of quoted instruments are based on price quotations at the reporting date. The fair
value of unquoted instruments and other financial liabilities (loans payable) are estimated by
discounting future cash flows using rates currently available for debt on similar terms, credit risk,
and remaining maturities.

Fair value hierarchy

As at December 31, 2022, the Corporation held cash measured at fair value.

The Corporation uses the following hierarchy for determining and disclosing the fair value of financial
instruments by valuation technique:

•

Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2: other techniques for which all inputs which have a significant effect on the recorded fair
value are observable, either directly or indirectly.

Level 3: techniques which use inputs which have a significant effect on the recorded fair value
that are not based on observable market data.

Assets measured at fair value

December 31, 2022

Level 1

Level 2

Level 3

Cash and cash equivalents

No liabilities were measured at fair
value

$ 725,020

$ –

During the reporting year ending December 31, 2022, there were no transfers between Level 1 and
Level 2 fair value measurements, and no transfers into and out of Level 3 fair value measurements.

19. GOVERNMENT GRANT

During the year 2020, the Corporation has received $60,000 for the Canadian Emergency Business
Account (CEBA) loan. The loan amount is interest-free and $20,000 forgivable if the $40,000 amount
is paid by December 31, 2023, after which the full amount is subject to a 5% annual interest rate and
due on December 31, 2025.

Initial recognition of the CAD$60,000 was at its fair value at a discount rate of 19.99%, representing
the Corporation’s estimated unsecured credit risk. The Corporation had repaid $30,000 against the
loan in 2022 and outstanding amount of $10,000 (2021: $34,196) and $5,804 (2021: $5,697) was
recognized as an interest accrued for the year ended December 31, 2022.

NTG CLARITY NETWORKS INC.
Notes to the Audited Consolidated Financial Statements
December 31, 2022 and 2021

20. EQUITY INSTRUMENTS

(a) Common shares

As at December 31, 2022, the authorized share capital consists of an unlimited number of first
preferred shares, second preferred shares and common shares. To date, no first or second preferred
shares have been issued. Before any shares of a particular preferred share series are issued the
directors of the Corporation, by resolution shall fix the dividend rates, whether the dividends are
cumulative and the redemption price of the redeemable shares.

Changes in the issued common shares of the Corporation are as follows:

Balance, January 1, 2021

Shares issued on exercise of share options (i)

Shares issued on debt for shares transaction (ii)

Allocation of contributed surplus (i)

Common Shares

Amount

100,102,355

10,808,186

7,370,000

40,000,000

–

443,000

2,000,000

310,800

Balance, December 31, 2021

147,472,355

13,561,986

Shares issued on exercise of share options (i)

Allocation of contributed surplus (i)

500,000

–

25,000

20,000

Balance, December 31, 2022

147,972,355

13,606,986

(i)

(ii)

In 2022, a total of 500,000 (2021: 7,370,000) options were exercised, with a total value of
$25,000 (2021: $443,000). This resulted in a re-allocation of contributed surplus to capital stock
in the amount of $20,000 (2021: $310,800).

In 2021, the Corporation offered employees and consultants the opportunity to participate in
debt for shares private placement. Subsequent to TSX approval, on August 6, 2021, the
Corporation closed the offering and issued 40,000,000 common shares (at $0.05 per share) for
a total value of $2,000,000. 5,090,000 of these shares were issued to directors of the
Corporation and 15,000,000 of these shares were issue to 2729252 Ontario Inc, a company
controlled by directors.

(b) Share-based payments

The Corporation has a formal stock option plan allowing the Corporation to issue options to its
directors, officers, employees and consultants in order to attract and retain qualified and experienced
individuals. The Board of Directors determines the exercise price and the number of options to be
granted as well as all the terms of conditions of the options. All options granted by the Corporation
are non-assignable. The options generally expire three to five years subsequent to the date of grant
and vest over two years.

No options were granted to non-employees during 2022 and 2021.

NTG CLARITY NETWORKS INC.
Notes to the Audited Consolidated Financial Statements
December 31, 2022 and 2021

20. EQUITY INSTRUMENTS (cont’d)

(b) Share-based payments (cont’d)

Details of stock options are as follows:

Balance, 1 January 2021

Granted

Exercised

Expired

Balance, December 31, 2021

Granted

Exercised

Expired

Balance, December 31, 2022

Options
3,412,000

17,415,000

(7,370,000)

(982,000)

12,475,000

7,045,000

(500,000)

(1,305,000)

17,715,000

Weighted average
exercise price
$ 0.10

0.05

0.06

0.10

$ 0.05

0.05

0.08

$ 0.05

The stock options expire at various dates between January 2023 and December 2027.

The weighted average expected contractual lives of outstanding and exercisable options are as
follows:

Options Outstanding
Number
outstanding
Dec 31/22

Remaining life of
option

Options Exercisable
Number
outstanding
Dec 31/22

Remaining life
of option

17,715,000

3.77

17,515,000

3.74

Exercise
Price

$ 0.05

Activity related to share-based compensation is as follows:

For the year ending December 31, 2022 the Corporation recorded $328,250 (2021: $810,300) as
contributed surplus and compensation expense, which is measured at fair value at the date of grant
and is expensed over the option’s vesting year. The weighted average fair value of options granted
during the year 2022 is $0.05 (2021: $0.05).

In determining the amount of share-based compensation, the Corporation used the Black- Scholes
option pricing model to establish the fair value of options granted by applying the following
assumptions:

Stock price

Risk-free interest rate

Expected life (years)

Expected dividend yield

Expected volatility

2022

$0.03

2021

$0.05

1.04 – 3.28%

0.17 – 1.15%

5 years

0.00– 225.27%

0.0 – 224.91%

Fair value of options issued in fiscal year

0.05

NTG CLARITY NETWORKS INC.
Notes to the Audited Consolidated Financial Statements
December 31, 2022 and 2021

21. CONTRIBUTED SURPLUS

Contributed surplus for the year ending consisted of $328,250 (2021: $810,300) for share-based
payments and re-allocation of contributed surplus on exercise of share options $20,000 (2021:
$310,800).

Opening balance January 1, 2022

Share-based payments

Reallocation on exercise of share options

Balance as at December 31, 2022

$ 2,309,023

328,250

(20,000)

$ 2,617,273

22. DIVIDENDS PAID AND PROPOSED

Cash dividends

The Corporation’s practice is to not make dividend payments to shareholders.

23. COST OF SALES

The details of the Corporation’s cost of sales are as follows:

Cost of sales

Salaries

Travel

Hardware

Other

Total

2022

2021

$ 9,695,623

$ 4,942,357

742,196

79,907

412,191

384,477

76,990

(96,333)

$ 10,929,917

$ 5,307,491

24. EXPENSES: DISCLOSURE OF FUNCTION EXPENSES

The details of the Corporation’s function expenses are as follows:

Selling

Salary and wages

Marketing

Mailing and courier

Professional services

Meals and entertainment

Total

2022

2021

$ 1,416,599

$ 1,053,291

248,356

7,481

29,617

15,904

68,456

7,223

25,805

103,074

$ 1,717,956

$ 1,257,849

NTG CLARITY NETWORKS INC.
Notes to the Audited Consolidated Financial Statements
December 31, 2022 and 2021

24. EXPENSES: DISCLOSURE OF FUNCTION EXPENSES (cont’d)
2022

General and Administrative

2021

Salary and wages

Occupancy

Consulting

Professional fees

Insurance

Dues and subscriptions

Penalties and fees

Office and General

Total

25. LOANS PAYABLE

$ 1,648,646

$ 1,674,735

114,484

52,878

113,650

480,172

27,941

(50,020)

67,759

138,121

25,430

117,733

276,562

22,006

133,098

52,554

$ 2,455,510

$ 2,440,239

In 2020, the Corporation entered into an agreement for funding on a sales project in the amount of
$338,080 (USD $ 266,667). The agreement states that the lender will be paid 67% of funding for one
sixth of the profit from the project. The Corporation renewed the agreement in July 2021 and as per the
revised term the investor will be paid 63% of funding for one-eleventh of the profit from the project,
and the capital investment is payable on demand with 90 days’ notice. All other terms remain same.

In 2022, the Corporation entered into an agreement for funding on a sales project in the amount of
$325,000 (USD $ 240,000). The agreement states that the lender will be paid 63% of funding for one
eleventh of the profit from the project, and the capital investment is payable on demand with 90 days’
notice.

This transaction does not qualify as a joint arrangement or a principal-agent relationship. The amount
is non-secured.

The Corporation entered into a non-secured loan agreement in the amount of CAD $15,530 (US$11,467)
with no interest rate payable within 1 year. The amount is non-secured, and was paid by January 2023.

As of December 31, 2022, the Loans Payable amount owed is $701,760 (US$518,134).

26. RELATED PARTY DISCLOSURES

The financial statements include the financial statements of the Corporation and the subsidiaries listed
in the following table:

Name

Country of Incorporation

Equity Interest

NTG Egypt Advanced Software (Subsidiary)

NTG Clarity Networks US Inc. (Subsidiary)

Egypt

USA

95%

100%

a) All related party transactions are carried out in the normal course of operation and are recorded at fair

value.

NTG CLARITY NETWORKS INC.
Notes to the Audited Consolidated Financial Statements
December 31, 2022 and 2021

26. RELATED PARTY DISCLOSURES (cont’d)

The following tables provide the balances owing to key management and key management
compensation for the years:

Interest Received

Amounts Owed by
Related Parties

Amounts Owed to
Related Parties

Key management personnel of the Corporation:

December 31, 2022 (i)

December 31, 2021

Key management compensation

Short term employee benefits
Post-retirement employee benefits
Share-based payments

Total

–

2022

861,045
37,083
136,300

$ 1,657,562

$ 1,588,722

2021

515,592
44,500
96,000

$ 1,034,428

656,092

(i) As of December 31, 2022, Key management (Ashraf Zaghloul and Kristine Lewis) is owed a total of
$1,657,562 for unpaid salaries, expenses, benefits and compensation, outstanding since 2016.
These amounts are part of Accounts Payable in Note 17.

b) The Ultimate Parent

The Corporation is the ultimate parent entity.

Related Party Transactions

Certain inter-company transactions between the Corporation and its subsidiaries, which are related
parties to the Corporation, have been eliminated.

Related parties include key management, the Board of Directors, close family members and entities
which are controlled by these individuals as well as certain persons performing similar functions.

c) During the year 2022, directors and officer of the company were granted a total number of 4,300,000
(2021: 2,550,000) options, as described in Note 20 (b), that were valued at $215,000 (2021: $127,500).
In the year 2022, the directors and officer had not exercised any options (2021: 1,650,000).

On November 29, 2019, the Corporation entered into an Assignment of Debt and Security agreement
with Royal Bank of Canada and 2729252 Ontario Inc. The debt amount of $7,100,712 was assigned to
2729252 Ontario Inc., which is a private company owned by two directors of the Corporation. See Note
18 (a) for more information. All terms, including annual interest rates, remain the same as with the
Bank (bank prime plus 2.05%).

The Indebtedness held by the Company is secured by a General Security Agreement over the assets of
the Corporation. As of December 31, 2022, the loan amount is $6,512,880 (2021: $6,512,880).

NTG CLARITY NETWORKS INC.
Notes to the Audited Consolidated Financial Statements
December 31, 2022 and 2021

27. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Corporation’s primary risk management objective is to protect the Corporation’s balance sheet and
cash flow.

The Corporation’s principal financial liabilities comprise of bank overdraft, long term debt and trade and
other payables. The main purpose of these financial liabilities is to raise finances for the Corporation’s
operations.

The Corporation is exposed to market risk, interest rate risk, foreign exchange risk, credit risk, and
liquidity risk.

The Corporation’s senior management oversees the management of these risks. The Corporation’s
senior management is supported by a Committee that advises on financial risks and the appropriate
financial risk governance framework for the Corporation.

The Committee provides assurance to the Corporation’s senior management that the Corporation’s
financial risk-taking activities are governed by appropriate policies and procedures and that financial
risks are identified, measured, and managed in accordance with the Corporation’s policies and group
risk appetite. All derivative activities, if any, for risk management purposes are carried out by a team
that has the appropriate skills, experience, and supervision. It is the Corporation’s policy that no trading
in derivatives for speculative purposes shall be undertaken.

The Board of Directors reviews and agrees policies for managing each of these risks which are
summarized below.

Market risk

Interest rate risk

The Corporation’s exposure to interest rate fluctuations is primarily interest paid on its bank
indebtedness and long-term loans. The Corporation has performed sensitivity analysis on interest rates
at December 31, 2022 to determine how a change in interest rates would impact equity and net loss.
During the year the Corporation paid $315,656 (2021: $200,310) on its loans and liabilities. An increase
or decrease of 100 basis points in the average interest rate paid during the period would have adjusted
net earnings by approximately $31,566 (2021: $20,031). This analysis assumes that all other variables
remain constant.

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in foreign exchange rates. The Corporation’s exposure to the risk of changes
in foreign exchange rates relates primarily to the Corporation’s operating activities, when revenue or
expense are denominated in a different currency from the Corporation’s functional currency. The parent
entity’s functional currency is the Canadian dollar.

NTG CLARITY NETWORKS INC.
Notes to the Audited Consolidated Financial Statements
December 31, 2022 and 2021

27. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont’d)

Foreign currency risk (cont’d)

The Corporation does not hedge the risk related to fluctuations of the exchange rate between USA and
Canadian dollars from the date of the sales transactions to the collection date due to the short-term
nature of this exposure.

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in foreign exchange rates. The Corporation's exposure to the risk of changes
in foreign exchange rates relates primarily to the Corporation's operating activities, when revenue or
expenses are denominated in a different currency from the Corporation's functional currency. The parent
entity's functional currency is the Canadian dollar.

A 10% change in exchange rates on December 31, 2022 would have the following approximate impacts:

10% impact to:

U.S.
Dollar
USD

Omani
Riyal
OMR

Kuwait
Dinar
KWD

P&L in CAD

$36,150

$17,662

$25,258

Equity in CAD

$26,570

$12,981

$18,564

Saudi
Riyal
SAR

Turkish
Lira
TRY

$56,577

$41,584

$22

$16

Qatari
Riyal
QAR

$Nil

Egyptian
Pound
LE

$141,840

$104,252

A 10% change in exchange rates on December 31, 2021 would have the following approximate impacts:

10% impact to:

U.S.
Dollar
USD

Omani
Riyal
OMR

Kuwait
Dinar
KWD

Saudi
Riyal
SAR

P&L in CAD

$117,569

$8,263

$30,417

$13,555

Equity in CAD

$86,413

$6,095

$22,356

$9,963

Qatari
Riyal
QAR

$11

Egyptian
Pound
LE

$48,903

$35,944

Commodity price risk

The Corporation is not subject to price risk from fluctuations in market prices of commodities.

Equity price risk

The Corporation has no exposure to equity price risk.

Credit risk

Credit risk is the risk of an unexpected loss if a customer or counterparty to a financial instrument fails to
meet its contractual obligation. The Corporation’s financial instruments that are exposed to credit risk
consist primarily of trade receivable. The Corporation’s exposure to credit risk is impacted by the
economic conditions for the industry which could affect the customers' ability to satisfy their obligations.

In order to reduce risks, the Corporation performs periodic credit evaluations of the financial conditions
of its customers and typically does not require collateral from them. Management assesses the need for
allowance for potential credit losses by considering the credit risk of specific customers, historical trends
and other information.

NTG CLARITY NETWORKS INC.
Notes to the Audited Consolidated Financial Statements
December 31, 2022 and 2021

27. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont’d)

Credit risk (cont’d)

The aging of trade accounts receivable are as follows:

Neither past due nor impaired

2022

2021

Current

31 – 60 days

61 – 90 days

91 – 180 days

Past due but not impaired

Greater than 180 days

2,230,177

2,092,958

311,791

326,625

199,960

119,737

351,627

74,706

378,893

136,926

3,188,290

3,035,110

Liquidity risk

Liquidity risk is the risk that the Corporation will not be able to meet its financial obligations as

they fall due. The Corporation’s approach to managing liquidity is to ensure, as far as possible, that it
will always have sufficient liquidity to meet its liabilities when due, under normal and stressed
conditions.

The Corporation manages liquidity risk by reviewing its capital requirements on an ongoing basis. The
Corporation continuously reviews both actual and forecasted cash flows to ensure that the Corporation
has appropriate capital capacity.

The following table summarizes the amount of contractual undiscounted future cash flow requirements
for financial instruments as at December 31, 2022:

Contractual obligations

2023

2024

2025

2026 and after

Total

Operating line of credit

389,321

Accounts payable and
accrued liabilities

Operating lease

Long-term debt

Loans payable

6,985,267

100,681

153,253

701,760

– $

–

22,399

14,549

6,676,134

–

389,321

6,985,267

137,629

6,829,387

701,760

The Corporation accrues expenses when incurred. Accounts are deemed payable once an event occurs
that requires payment by a specific date. The contractual maturity of accounts payable is within one
month.

NTG CLARITY NETWORKS INC.
Notes to the Audited Consolidated Financial Statements
December 31, 2022 and 2021

27. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont’d)

Credit risk (cont’d)

The aging of trade accounts payable are as follows:

December 31,

Current
31 – 60 days
61 – 90 days
91 – 180 days
More than 180 days

Capital management

2022

696,460
74,446
40,653
137,668
539,614

1,488,841

2021

1,531,550
1,959
6,898
13,106
622,523

2,176,036

The Corporation manages its capital, which consists of cash provided from operations and long-term
debt, with the primary objective being safeguarding sufficient working capital to sustain operations.
The Board of Directors has not established capital benchmarks or other targets. As at December 31,
2022, the Corporation was considering pursuing additional capital through the issuance of additional
equity or debt financing. There can be no guarantee that they will be successful in raising additional
capital.

There have been no changes in the Corporation’s approach to capital management during the year
ending December 31, 2022. Also, no changes were made in the objectives, policies, or processes during
the year ending December 31, 2022. The Corporation will continually assess the adequacy of its capital
structure and capacity and will make adjustments within the context of the Corporation’s strategy,
economic conditions, and the risk characteristics of the business.

The Corporation's objectives when managing capital are to:

(i)

(ii)

(iii) maintain a capital base to maintain investor, creditor, and market confidence.

The Corporation considers the items included in the consolidated statements of changes in
shareholders' equity as capital. The Corporation manages the capital structure and makes adjustments
to it in the light of changes in economic conditions and the risk characteristics of the underlying assets.
In order to maintain or adjust the capital structure, the Corporation may issue new shares. The
Corporation is not subject to externally imposed capital requirements.

28. COMMITMENTS, CONTINGENCIES, AND GUARANTEES

Operating lease commitments – Corporation as lessee

The Corporation is committed under agreements for the rental of office spaces in Egypt and Oman at a
monthly rate ranging from $1,200 to $3000 for the periods from October 2021 to November 2025.

NTG CLARITY NETWORKS INC.
Notes to the Audited Consolidated Financial Statements
December 31, 2022 and 2021

28. COMMITMENTS, CONTINGENCIES, AND GUARANTEES (cont’d)

Operating lease commitments – Corporation as lessee (cont’d)

December 31,

2023
2024
2025

Legal claim contingency

2022

100,681
22,399
14,549

137,629

The Corporation is subject to a variety of claims and suits that arise from time to time in the ordinary
course of business. Although management currently believes that resolving claims against the
Corporation, individually or in aggregate, will not have a material adverse impact on the Corporation’s
financial position, results of operations, and cash flows. These matters are subject to inherent
uncertainties and management's view of these matters may change in the future. To date, there are no
claims or suits outstanding.

Guarantees

The Corporation indemnifies its directors and officers against claims reasonably incurred and resulting
from the performance of their services to the Corporation, and maintains liability insurance for its
directors and officers. In March 2021, the Corporation was unable to renew its Directors and Officers
insurance.

29. SALE OF ENTERPRISE LICENSES

On May 1, 2020, NTG signed an Agreement for licensing a copy of Product IP Rights and Support with an
Egyptian company, owned by a former Director of the Corporation. This Board- approved agreement
allows this Egyptian company to purchase NTG Egypt’s Enterprise business including a copy of the non-
exclusive rights for the IP of two software products (Utility Billing and HMIS) for 1.2 million Egyptian
pounds (approximately $99,428). The Enterprise revenue is approximately 3-4 million Egyptian pounds
per year. The divesting of these non-core older technology legacy products allows NTG management to
focus on core products and services going forward.

Upon execution of the agreement, both the Corporation and the company would own a copy of the
software listed (NTS UBS and HMIS), and both Parties would own the Copyright and Intellectual Property
of their software copy. Either Party is free without any limitations whatsoever, to license their source code
and the right to reproduce work, create derivative works, distribute and sell copies of the software
worldwide without the consent of the other Party. Each Party could sell their interest, in whole or in part
of their owned software to a 3rd Party without the consent of the other Party. The carrying value of these
intangible assets was zero, thus, the full proceeds of EGP 1,200,000 (approximately $99,428) has been
fully recognized as other income in the consolidated statements of profit and loss and comprehensive
income.

Upon signing of the Agreement, Zaha Tech will be the sole and exclusive provider of all support to all
current customers for a period of 30 months. NTG invoices the customers and retains a 10% fee upon
collection of the dues from these customers, and recognizes revenue on a Net basis. During the year, the
corporation recognized net revenue of $Nil (2021: $52,135) under these contracts.

Corporate Information

Board of Directors
Ashraf Zaghloul
Kristine Lewis
Mohamed Saleem Siddiqi
Syed Zeeshan Hasnain

Officers
Ashraf Zaghloul
Chair & Chief Executive Officer

Kristine Lewis
President & Chief Financial Officer

Registrar and Transfer Agent
Computershare Investor Services
100 University Ave., 8th Floor, North Tower
Toronto, Ontario M5J 2Y1
Telephone: 1-800-564-6253
Fax: 1-888-453-0330

Auditors
NVS Chartered Accountants Professional Corporation
100 Allstate Parkway, Suite 303
Markham ON L3R 6H3
Telephone: (905) 415-2511
Fax: (905) 415-2011

Legal Counsel
Borden Ladner Gervais
Centennial Place, East Tower
1900, 520 - 3rd Avenue S.W.
Calgary, Alberta T2P 0R3
Telephone: (403) 232-9500
Fax: (403) 266-1395

International Work

Stock Exchange Listing
The TSX Venture Exchange
Trading Symbol: NCI

Investor Relations
klewis@ntgclarity.com

Corporate Office
NTG Clarity Networks Inc.
2820 Fourteenth Avenue, Suite 202
Markham, Ontario
Canada L3R 0S9
Telephone: (905) 305 1325

Toll-free (North America):
(800) 838-7894
Fax: (800) 838-7895
E-mail: info-ntg@ntgclarity.com
www.ntgclarity.com