Navigant Consulting Inc.
Annual Report 2023

Simplifying Digital 
Transformation 
NTG Clarity Networks Inc. 
Annual Report 2023 

30+ Years of Service 

  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

Who We Are 

NTG Clarity is a digital transformation business. By providing outsourced software development solutions and 
proprietary software products, we accelerate and simplify the digital journey for our clients in the enterprise 
telecom, financial, and IT sectors. 

NTG Clarity helps clients scale and stay connected by serving as a long-term technology partner in a rapidly- 
changing and increasingly digital world. 

Our Vision 

Our Mission 

Is to make digital transformation accessible 
worldwide, capitalizing on our deep 
knowledge and experience in different 
industries to provide competitive, top-tier 
products and services. 

Enabling clients’ Business Excellence 
and  efficiency by architecting and 
delivering world class portfolios of 
integrated IT solutions owned by 
distinguished and highly motivated 
professionals. 

2 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

Industry Context 

Digital transformation is a booming global market sized at $937 Billion in 2023 and 
expected to hit $7 trillion by 2032 (Prector Research). 

20.9% 

Compounded Annual Growth Rate 
Of Global  Digital Transformation Market 

)

D
S
U
n
o

i
l
l
i

B

(
e
z
S

i

Digital Transformation Market Size, 2022 to 2032 

8000 

7000 

6000 

5000 

4000 

)
n
3000 
o

i
l
l
i

B
2000 

1000 

0 

2022, 

2024, 

2026, 

2028, 

2030, 

2032 

Year 

Since the pandemic in 2020, business 
leaders all over the world have 
recognized the importance of digitizing 
their organization. (Flexera). 

74% 

Over 74% of organizations 
consider  digital transformation a 
top priority. 

Our primary sectors of Financial Services, Telecom, and IT make up half of the digital 
transformation  market (Fortune). 

With more than 30 years of industry knowledge and a wide network of professionals, NTG Clarity is 
positioned to be a key player in this growing market. 

Other 
2.0% 

Transportation 
12.0% 

Healthcare 
8.0% 

Digital Transformation Market by Sector 

Banking & Financial 

26.0% 

Retail and Consumer 
15.0% 

Manufacturing 
4.0% 

Government 
10.0% 

IT and Telecom 
23.0% 

3 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

About NTG Clarity 

Team of Over 700 

30+ Years of 
Service 

More than 30 years of experience 
providing enterprise services and 
software solutions to major tier-one 
enterprises worldwide. 

Rapid Cost Reduction and Revenue Growth 

50000000 

40000000  

30000000 

20000000 

10000000 

57% Revenue 
Growth in 2023 

$27.7 Million in 2023 Revenue 

2019 

2020 

 Other Expenses  

2021 

2022 

2023 

2024 Projection 

Operating Ex pens es  

Cost of Revenue 

Revenue 

NTG Clarity Revenue by Sector 

50+ Enterprise 
Clients 

Government 
9.1% 

Telecom & IT 
19.2% 

4 
4 

Other 
1.9% 

Financial 
69.8% 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

Lines of Business 

Outsourced Software Development 
A booming trend in Digital Transformation means enterprises around the world are looking to rapidly expand 
their software development teams. 

78% 

Onsite 
Services 

12% 

Offshore 
Services 

Software Products 
More than 30 years in Digital Transformation has given us insight into gaps in the market that we’ve sought 
to fill with proprietary software products and implementations. 

NTGapps 

10% 

NIS 

5 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

Praise From Our Customers 

I was extremely impressed with the quality of the people NTG Clarity provided to our team. These 
individuals were made available quickly despite our short timeframe requirements, yet they brought with 
them a wealth of technical skills and experience. 

NTG’s team was quick to learn the intricacies of our complex systems and showed great professionalism 
and attention to detail. I was also impressed by how proactive NTG’s personnel were, providing solutions 
and alternatives to challenges of any magnitude. I would definitely recommend NTG Clarity to anyone in 
need of technical services. 

I wanted to extend a thank you note to the NTG Clarity team as they worked with us in the Mobile site control 
project for the last 9 months and ongoing. 

We see NTG as an important and effective partner, and we would not hesitate to recommend their products 
and services. We look forward to working with NTG team on future projects. 

NTG Clarity implemented its Network Inventory and Network Projects Workflow (NIS) for Ooredoo Oman. 

We have been very satisfied with the solution, the implementation and the team. The NIS system meets 
our needs and has been flexible to accommodate our new requirements. 

We have been impressed by the NTG Clarity team, their knowledge, dedication and professionalism in the 
inventory domain and we liked their flexibility and commitment. 

We would recommend NTG Clarity Network solution for other operators. 

6 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

Letter to shareholders 

Dear NTG Clarity Investor, 

2023 has been a historic year for NTG Clarity. With every quarter breaking all-time revenue records, we’re 
experiencing growth never before seen in our more than 30 years in business. 

Revenues for 2023 were up 57% to $27.7 Million compared to $17.65 Million in 2022 with a profit of $2.3 
Million in 2023, up 190% from $788,433 in 2022, making three consecutive profitable years. With a global 
trend of enterprises undergoing rapid digital transformation, both our offerings of outsourced software 
development resources and proprietary software products have seen rapidly growing demand that shows 
no signs of slowing down. 

Since embracing our new offshore model in 2021, we’ve been able to connect more clients with talented 
candidates faster, accelerating their digital transformation journeys. All while at a lower cost to clients and a 
higher margin for us. This is the primary driver behind our profitability in the last three years. 

To accommodate the increase in demand, we expanded our Egypt Offshore Center by opening a new 
office in Cairo, Egypt in 2023. This office in the Al-Aghouza district along the Nile River, our third in Cairo, 
has since become our flagship offshore resource campus, with space for more than one hundred new 
staff and room to expand further when needed in the future. 

In 2023, we solidified our commitment to education, training, and personal development by opening the NTG 
School in cooperation with the Egyptian Ministry of Education. This partnership aims to equip Egyptian 
secondary school students with a dual curriculum, integrating NTG’s specialized technology training 
alongside the ministry’s curriculum. NTG proudly dedicates a team of educational engineers ensuring 
comprehensive training for the next generation in the exciting field of digital transformation. 

Although most of our growth was due to increased 
demand for our outsourcing services, our software 
product line is picking up. Many of our existing 
customers in the Finance, Telecom, and IT sectors are 
embracing the NTGapps platform as a way to rapidly 
develop business apps to simplify day-to-day operations 
with no developer resources required. New customers in 
sectors like Food & Beverage and Logistics & 
Distribution are also signing on to have end-to-end ERP 
systems developed on our NTGapps platform. 

With every quarter breaking 
all-time revenue records, 
we’re experiencing growth 
never before seen in our 
more than 30 years in 
business. 

We continue to improve our working capital, with our 
deficit  down  41%  to  $2,092,663  from  2022  to  2023. 
Our growth in 2023 has enabled us to prioritize getting 
legacy debts repaid. Going into 2024, we also  look
forward to paying down our long-term debts incurred when refocusing the business in 2019. Our non-current 
liabilities are majority management-owned and relatively low- cost with flexible repayment terms. 

We kick-started this growth and repayment process in December 2023 with the closing of a private placement 
with  the  proceeds  of  $1,110,000,  to  be  used  for  accounts  payable  and  other  corporate  initiatives.  As  our 
revenues continue to grow and we remain comfortably self-funded, we’re constantly looking for ways to invest 
and grow even faster. 

In July 2023, we received approval from shareholders to perform a five-to-one share consolidation. Although 
the consolidation has not been executed by the end of 2023, we’re looking forward to cleaning up our count 
of shares outstanding and bringing a little more stability to the stock with a higher price per share. 
Shareholders can also enjoy higher earnings per share due to the lower share count, but also due to our 
strong growth trajectory. 

7 

 
 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

Entering 2024, we’d like to share our four-part commitment to: 

1.  Customers by providing flexible, quality 

3.  Shareholders by continuing our growth 

services at a competitive price. 
We accelerate and simplify the digital 
transformation journey for our clients by 
providing the right solution delivered by 
passionate professionals both on their sites and 
offshore. 

2.  People by helping our staff grow and develop 

personally and professionally. 
We empower our staff to build and deliver 
challenging projects while providing opportunities 
for training and career advancement both 
internally and outside NTG. 

trajectory and profitability. 
With purchase orders on-hand and contracts we 
expect to close, we project our 2024 revenue to 
approximately double to $50 Million. 

With three years of consistent profitability 
under our belt, we’re actively identifying 
opportunities to make sure as much of this 
new revenue as possible flows on to the 
bottom line. 

4.  Community by passing our experience down 

to the next generation. 
We provide youth education and employment 
opportunities tailored to the modern job market   
through the NTG School. 

We’re very excited to continue our successful growth into 2024 and use our growing funds to create value for 
our shareholders by reinvesting into further growth, and also paying down our longer-standing debts. I’d like 
to thank you, our valued investor, for your continued confidence. Looking forward to another successful year 
in 2024. 

Sincerely, 

Ashraf Zaghloul 

Chairman and Chief Executive Officer 
NTG Clarity Networks Inc. 

1. Customers 

2. People 

We accelerate and simplify the 
digital transformation journey for 
our clients by providing the right 
solution delivered by passionate 
professionals both on their sites 
and offshore. 

We empower our staff to build and 
deliver challenging projects while 
providing opportunities for training 
and career advancement both 
internally and outside NTG. 

3. Shareholders 

4. Community 

With three years of consistent 
profitability under our belt, we’re 
actively identifying opportunities to 
make sure our revenue growth 
continues and as much of this new 
revenue as possible flows on to the 
bottom line. 

8 

We provide youth education and 
employment opportunities 
tailored to the modern job market 
through the NTG School. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

Table of Contents 

10 

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

31 

Audited  Financial Statements 

31  Consolidated Statements of Financial Position 
32  Consolidated Statements of Changes in Equity 
33  Consolidated Statements of Profit and Loss 

and Comprehensive Income 

10  Business Overview 

34  Consolidated Statements of Cash Flows 

35 

Notes to the Audited Financial 
Statements 

74 

Corporate Information 

13  Summary of Quarterly Results 
14  Quarterly and Annual Results 

of Operations 

19  Assets and non-current liabilities 
19 Liquidity and Capital Resources 
21  Proposed Transactions 
22  Business Risk and Management 

27 

Management’s Statement of 
Responsibility 

28 

Independent Auditor’s Report 

9 

 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

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 digital transformation, telecom and 
consulting industries. 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 27, 2024, for the year ending 
December 31, 2023 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 

Business Overview 

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. 

NTG Clarity is a Canadian publicly traded 
Corporation (TSXV: NCI; OTC: NYWKD) that 
provides digital transformation solutions: 
software development outsourcing and 
software products. We have been providing 
engineering, Information Technology, and 
networking services and developing niche 
software products for telecommunications 
and utilities providers since our start in 1992. 
We have also expanded into the financial 
and government sectors, providing technical 
resources and products 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 Muscat, 
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 primary 
delivery centre for software development 
and professional services, offshoring services 
and network services to customers 
worldwide. 

10 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Summary of Major NTG Events in 2023 

This year’s announcements highlighted $41.788 Million in contracts and POs 
signed with customers including 14 new customers in 2023. We have been 
increasing our customer base across multiple verticals and regions as 
announced throughout the year. 

NTG Clarity Networks Inc. 
Annual Report 2023 

41.788M 
in contracts 

In Q1 2023, we announced the following: 

•  The receipt of multiple POs valued at $12.22 Million. Of this amount, $6.852 Million was recurring 

revenue and $5.368 Million was for new work including work from new customers. 

• 

In February, we attended Mobile World Congress (MWC) in Barcelona. This is one of the biggest 
events for IT and telecommunications in the world. We presented to prospective customers and 
increased the awareness of NTG’s products and services. We look forward to marketing our 
NTGapps product in other such events throughout the year. 

In Q2 2023, we announced the following: 

• 

In April we received multiple POs for professional services work valued at approximately $1.069 
Million for new work and renewals of ongoing contracts. 

•  We signed a 3-year Professional Services Supply Agreement with a leading IT services company in 
the Gulf Region that provides services to both the public and private sectors. This is one of the 
largest offshoring agreements for us to-date with a maximum value ceiling amount of approximately 
$10.7 Million and estimated expenses of $8M. 

In Q3 2023, we announced the following: 

•  The receipt of 49 POs received were valued at $9 Million including approximately $3.6 Million 

from new customers. 

•  We also announced a new office space in Cairo dedicated to projects stemming from the $10.7 

Million Frame Agreement announced in April 2023 as well as other new customers. 

In Q4 2023, we announced the following: 

•  The receipt of 11 POs that were valued at $8.8 Million. Of this amount, half was recurring revenue 

and half was for new customers. 

• 

In December, we closed a private placement of 37,000,000 common shares at a price of $0.03 
per Common Share for gross proceeds of $1,110,000. The Common Shares issued pursuant to 
the Private Placement will be subject to a four-month hold period. 

11 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

Canada 

Our Canadian office serves as our corporate 
headquarters and accounts for 7% of NTG’s 
revenue (2022: 12%). We continued to work on two 
projects through our Canadian office and brought 
on 2 new customers for products. 

Egypt 

Our Egypt offices serve as our primary delivery 
centre for offshore professional services and 
software development. 

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. The Egyptian pound (EGP) has 
continued to drop in value, dropping from around 
18.2 EGP to the Canadian dollar in January to 
about 23.3 EGP in December 2023, a 28% drop in 
value (https://www.exchange-rates.org/exchange-
rate- history/cad-egp-2023). Other effects in the 
economy include an interest rates of 19.25% and 
official inflation rate of 33.6 percent in December. 
This has resulted in NTG Egypt having to increase 
salaries to help personnel cope with the changing 
economy. 

The continuing devaluation of the Egyptian 
Pound and the resulting economic slowdown has 
resulted in reduced revenue on translation. 
Egypt’s contribution in 2023 was 9% of the 
Corporation’s revenue (2022: 24%). 

This drop in revenue was expected and planned, 
as since 2021, as well as supporting Egypt’s 
legacy customers, management has transformed 
NTG Egypt into primarily a delivery centre for 
offshore services for international customers 
through our Egypt Offshore Centre. Since 
embracing our new model, we have connected 
clients with talented candidates faster, and 
accelerated their digital transformation journeys, 
all the while at a lower cost to them and 
consistent margins for us. This is the primary 
driver behind our profitability in the last three 
years. 

In 2023, we solidified our commitment to education, 
training, and personal development by opening the 
NTG School in cooperation with the Egyptian 
Ministry of Education. This partnership aims to 
equip Egyptian secondary technology school 
students with a dual curriculum, integrating NTG’s 
specialized technology training alongside the 
ministry’s standard curriculum. NTG donates the 
time of a team of educational engineers to ensure 
comprehensive training for the next generation in 
the exciting field of digital transformation. 

Despite difficult economic times in Egypt, NTG has 
been able to thrive by providing employment and 
professional development opportunities for the 
local population and providing offshore services to 
customers worldwide. 

Kingdom of Saudi Arabia (KSA) 

KSA has shown an unprecedented increase in 
demand for our products and services and for our 
offshore services, with a 109% increase in revenue 
contribution for the country this year with 91% of 
our professional service work and 81% of our 
revenue being from KSA (2022: 76% and 62% 
respectively). 

NTG has developed excellent brand recognition 
and a solid track record over the years, which is 
an asset to our work in the region. As a result of 
the onboarding of new customers over the past 
few years, 70% of our revenue in 2023 was from 
customers in the Banking & Finance sectors, 
whereas historically most of NTG’s revenue has 
come from the Telecom sector. 

Oman 

In 2023, we continued work for our customer in 
Oman, who is using our NTS Network Inventory 
and Project Management software products. This 
customer has been with NTG for over 10 years 
and while recurring revenues have decreased as 
the development and implementation was 
completed, annual support fees and change 
requests contributed 2% to NTG’s revenue in 
2023 (2022: 5%) 

12 

 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

Outlook 

NTG has had incredible growth this year with 
each quarter breaking revenue records, and with 
Q4 having our highest single-quarter revenue 
ever. 

As KSA continues to focus on diversifying its 
economy away from Oil & Gas, we expect the 
strong demand for our services in other sectors 
like Banking & Finance and other large enterprises 
to continue as these sectors rapidly build out 
technical infrastructure and software. 

Consolidated revenue for Q4 2023 was $8,224,124, 
up 43% from $5,742,867 for the same period in 
2022. Year-to-date revenues are up by 57% from 
2022 ($27,728,117 compared to $17,652,313). 

With the existing backlog of $22.7 Million in POs 
and contracts, we anticipate that 2024 will be 
another record-breaking year with revenue 
projections of over $50 Million. 

Since 2021, as well as supporting NTG Egypt’s 
legacy customers, management has transformed 
NTG Egypt into a supplier of offshore services for 
international customers through our Egypt Offshore 
Centre. Since embracing our new offshore model, 
we have been able to connect more clients with 
talented candidates faster, accelerating their digital 
transformation journeys, all the while at a lower cost 
to them and consistent margins for us. This is the 
primary driver behind our profitability in the last 
three years. 

Entering 2024, our two main focuses are: 

1.  Continuing our growth trajectory. With POs 
on-hand and contracts we expect to close, we 
project our 2024 revenue to almost double to 
$50 Million. 

2.  Driving further profitability. With three years 
of consistent profitability under our belt, we are 
actively identifying opportunities to make sure 
as much of this new revenue as possible flows 
on to the bottom line. 

Summary of Quarterly Results 

In Q4 2023, NTG recorded its highest quarter revenue in its history, and each quarter in 2023 has had 
increasing record-setting revenues. 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). 

2023 

Revenue 

Net Income 
(Loss) 

Profit (Loss) 
per Share 

Diluted Profit 
per Share 

Total Assets 

Quarter One 

$  6,127,177 

$  637,745 

Quarter Two 

$  6,373,261 

$  698,261 

Quarter Three 

$  7,003,553 

$  509,880 

Quarter Four 

$  8,224,124 

$  469,848 

$  0.004 

$  0.005 

$  0.003 

$  0.000 

$  0.004 

$  9,826,280 

$  0.004 

$ 10,014,812 

$  0.003 

$ 11,332,113 

$  0.000 

$ 12,392,158 

TOTAL 

$ 27,728,117 

$ 2,315,735 

$ 

0.01 

$ 

0.01 

$ 12,392,158 

13 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

2022 

Revenue 

Net Income  Profit per Share 

Quarter One 

Quarter Two 

$ 4,320,604 

$  554,342 

$ 3,403,633 

$  191,362 

Quarter Three 

$ 4,185,208 

$  434,489 

Quarter Four 

$ 5,742,867 

$ (391,759) 

TOTAL 

$ 17,652,313 

$ 788,434 

$  0.00 

$  0.00 

$  0.01 

$  0.00 

$ 0.01 

Diluted Profit 
per Share 

Total Assets 

$  0.00 

$  0.00 

$  0.01 

$  0.00 

$ 0.01 

$ 6,524,801 

$ 6,398,118 

$ 7,260,075 

$ 8,167,611 

$ 8,167,611 

Quarterly and Annual Results of 
Operations 

Our team’s hard work and dedication has resulted 
in 2023 having the highest revenue in NTG’s 
history, with Q4 2023 being the highest-ever single 
quarter revenue. NTG’s business continues to 
operate and support customers’ operations, with 
significant increasing revenues in Saudi Arabia. 
We continue to rely on collections and short-term 
loans to finance operations. Generally, in 2023, 
collections have been within acceptable limits and 
with our increase in revenues we anticipate 
eliminating the majority of legacy accounts 
payable by the end of 2024. 

Financial highlights for the three months and 
year ending December 31, 2023: 

Revenue 

Consolidated revenues for the three months ending 
December 31, 2023 was $8,224,124 compared to 
$5,742,867 for the same period in 2022. Revenue 
for the year increased 57% to $27,728,117 
compared to $17,652,313 reported in the prior 
year. 

Outsourced professional services revenue continues 
to be the primary source of revenue for us. Offshore 
work has been a significant contributor to this year’s 
record revenue amount ($12%). In total, professional 
services contributed $24,875,456 or 90% to revenue, 
as compared to 81% in 2022. Product-related revenue 
was $2,852,662. 

Consolidated revenues for Q4 2023 for the Egypt 
operating segment were down 49% to $573,474 
compared to $1,114,021 in 2022. Though we support 
Egypt’s legacy customers, NTG Egypt is now primarily 
the delivery centre for offshore services for our 
international customers. 

For the Canadian operating segment, revenues 
increased 65% to $7,650,650 compared to 
$4,628,846 in Q4 2022. For the year ending 
December 31, 2023 revenues increased 88% to 
$25,123,148 compared to $13,359,140 in 2022. The 
increase in revenue in Canada is driven primarily by 
expansion in the KSA market, which has recently 
become a rapidly growing emerging market in  
need of technology and software to help meet their 
growth goals. 

57% 

Consolidated revenues are 57% higher this year primarily due 
to: 

a 50% and 73% increase in work for our two largest customers 
respectively in the financial sector in KSA. 

the addition of 14 new customers bringing in 20.4%  ($5,670,146) 
of our 2023 revenue 

14 

 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

Though we currently have 3 Canadian customers, 
the Middle East continues to be where the majority 
of NTG’s revenue comes from and as of 
December 31, 2023, represents 99% of total 
revenue. 

Historically, the majority of our revenue has come 
from the telecommunications industry; however, 
since 2021 we have been increasing work with 
customers in Banking & Finance and Government 
sectors.  

Banking is rapidly growing and undergoing a 
digital transformation, so by offering customers IT 
and software development services, 70% of 
NTG’s 2023 revenue now comes from the Banking 
& Finance sector. 

Unbilled Revenue 

Unbilled revenue (now called Contract Assets) is 
revenue which has 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. 

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. 

As of December 31, 2023, unbilled revenue was 
$198,729 compared to $354,485 at December 31, 2022. 

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. 

NTG derives revenue from fees charged to 
customers for licenses for software products and 
professional services: support, consulting, 
development, training, and other services. 

Cost of sales for the three months and year 
ending December 31, 2023 were $6,766,407 
and $18,504,982 (2022: $4,143,609 and 
$10,929,917). 

Cost of sales 

Salaries and wages 

Consulting 

Travel 

Hardware 

Other expenses 

TOTAL 

December 31, 2023 

December 31, 2022 

$ 13,794,531 

3,533,530 

518,168 

57,522 

601,231 

$ 9,695,623 

– 

742,196 

79,907 

412,191 

$ 18,504,982 

$ 10,929,917 

For the Egypt operating segment, the cost of sales 
for the three months and year ending December 
31, 2023 were $2,928,137 and $3,366,344 
respectively compared to $1,532,508 and 
$3,584,913 in 2022. 

For the Canadian operating segment, the cost of 
sales for the three months and year ending 
December 31, 2023 were $3,838,270 and 
$15,138,638 respectively compared to 
$2,611,102 and $7,345,003 in 2022. 

The gross margin for the year ending December 31, 
2023 was 33% compared to 38% in 2022. Realistic 
margins are anticipated to be between 30-40%, based 
on the product and service mix of the clients served. 

Operating Expenses 

For the three months and year ending 2023, expenses 
were $2,127,157 and $6,619,501 respectively 
compared to $1,219,102 and $4,468,092 in 2022. 

15 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

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, 2023 were $817,485 and 
$2,172,925 respectively compared to $451,922 and $1,717,956 in 2022. 

For the twelve months 
ended 

December 31, 2023 

December 31, 2022 

Selling 

Salary and wages 

Marketing and advertising 

Mailing and courier 

Professional services 

Meals and entertainment 

Travel 

Total 

Sales and marketing expenses increased in 2023 
by 26% as we actively visited potential customers. 
We also required more sales personnel to service 
multiple departments in our existing KSA 
customers. Major drivers for the increase in sales 
and marketing expenses were: 

•  Participation in several trade shows: 

•  Mobile World Congress (MWC) in 

Barcelona (February 27 to March 2, 2023): 
we met existing and potential customers 
and showcased our NTGapps software 
product. 

•  MWC in Las Vegas (September 26-28, 

2023): we presented our network inventory 
and telecom in a box use cases that solve 
the urgent need for fast and reliable digital 
enablement; all of them built using our 
100% configurable NTGapps platform. 

•  GITEX in Dubai (October 16-20, 2023), 

the world’s largest tech show 

•  AfricaCom in South Africa (November 
14-16, 2023): 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. 

16 

$ 1,636,417 

391,821 

6,903 

19,538 

19,756 

98,490 

$ 1,416,599 

248,356 

7,481 

29,617 

15,904 

– 

$ 2,172,925 

$ 1,717,956 

• 

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, 2023 were $963,855 and 
$3,863,576 respectively compared to $619,872 
and $2,455,510 in 2022. 

Though salaries are lower as we capitalize our 
development of our software product NTGapps, 
there have been significant increases in: 

•  Occupancy and rent, as well as Office and 

general as we opened new offices in Egypt, 
expanded our office in KSA, and purchased 
two floors of our main Egypt location in El-
Haram. 

• 

Insurance due to the increased number of 
outsourced personnel in KSA. 

The remainder of lines contained within G&A saw 
increases commensurate with our 57% increase in 
revenue. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

General and Administrative 

December 31, 2023 

December 31, 2022 

Salary and wages 

Occupancy 

Consulting 

Professional fees 

Insurance 

Dues and subscriptions 

Penalties and fees 

Office and general 

Total 

$ 2,147,792 

$ 1,648,646 

151,522 

47,016 

155,675 

954,900 

40,853 

24,215 

341,603 

114,484 

52,878 

113,650 

480,172 

27,941 

(50,020) 

67,759 

$ 3,863,576 

$ 2,455,510 

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, 2023, the 
Corporation recognized a foreign currency 
exchange loss of $345,818 compared to a loss of 
$147,308 for the same period in 2022. For the year 
ending December 31, 2023, the Corporation 
recognized a foreign currency exchange loss of 
$583,000 compared to a loss of $294,625 for the 
year ending 2022. For more information on foreign 
exchange, see Note 4(b): Foreign currency 
translation. 

17 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

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 made a provision for bad debt in 2023 of 
$66,606 (2022: $ Nil). 

Amortization of Intangible Assets 

Intangible assets are related to the NTGapps 
low-code digital transformation platform being 
capitalized since late 2020. 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, 2023 were $122,033 
and $421,218 respectively compared to $78,756 
and $277,416 in 2022. 

Interest Expense 

As of December 31, 2023, the interest expense 
for the three months and year was $128,236 and 
$378,985 compared to $4,401 and $315,656 for 
the same periods in 2022. In Q4 2022, an 
interest accrual was reversed, resulting in an 
abnormally low interest expense for that quarter. 
YTD interest  expenses were 20% lower as we 
repaid some of our long-term investment in KSA 
and some of 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. 

18 

No options were granted to non-employees during 
2023. Stock options granted during the three 
months and year ending December 31, 2023 
totalled 300,000 and 3,230,000 compared to Nil and 
7,045,000 in 2022.  

The weighted average expected contractual lives of 
outstanding and exercisable options are shown in 
Note 18(b). 19,706,000 options have vested and 
there are 19,806,000 issued. The difference of 
100,000 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, 2023 as NTG has income 
tax losses in the amount of $12,657,781 that are 
available for Canadian federal and provincial tax 
purposes which may be carried forward to reduce 
future years’ taxable income (2022: $16,512,842). 

Total Comprehensive Income after Taxes 
(Net Income) 

For Q4 2023, the Corporation recorded a net income 
of $469,848 compared to a net loss of $391,759 
for the same period in 2022. For the year ending 
December 31, 2023, the Corporation recorded a 
net income of $2,315,735 compared to $788,434 
in 2022. 

The Egypt operating segment, for the three 
months ending December 31, 2023 recorded a net 
loss of $1,051,006 compared to a net loss of 
$846,779 in 2022. For the year ending December 
31, 2023 there was a net loss of $563,883 
compared to a net loss of $43,356 in 2022. 

For the Canadian operating segment, for the three 
months ending December 31, 2023 recorded a net 
income of $1,520,854 compared to $455,021 in 
2022. For the year ending December 31, 2023 there 
was a net income of $2,879,618 compared to 
$831,790 in 2022. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

Assets and non-current liabilities 

Non-current liabilities 

As of December 31, 2023, the Corporation 
closed the year with $358,088 cash on hand 
(2022: $725,020), bid/performance bonds of 
$293 (2022: $17,431) and prepaid amounts of 
$129,842 (2022: $86,751). 

Differences in prepaid amounts are due to the 
timing of insurance and rental renewals. The 
decrease in bond values compared to year-to-date 
2022 occurred because of bonds that expired in 
Egypt. There were no bonds in KSA. 

Property and equipment 

Property and equipment of $814,911 as of 
December 31, 2023 (2022: $221,732) consists 
mainly of computer equipment and office furniture 
with a useful life of 4-10 years. In 2023, we also 
purchased real estate in Egypt for $418,772 (2022: 
Nil) to accommodate the growth in staff working out 
of our Egypt Offshore Centre offices. 

NTG had additions of $689,149 in 2023 (2022: 
$128,299) and depreciation of $86,580 (2022: 
$89,861). Furniture and computer equipment 
additions were in Egypt and KSA for our new and 
expanded offices, and laptops for our expanding 
workforce. Note the depreciation includes 
depreciation of our right-of-use asset of $79,202 
(see Note 17 for more information). 

Intangible assets 

In 2022 and 2023, intangible assets relate to the 
upgrade of our internally developed NTGapps 
platform capitalized from 2020 to 2023.  

NTGapps facilitates the digital transformation 
journey for enterprises in all business verticals 
and allows them to automate their processes 
and create applications without the need for 
development. 

In 2023, NTGapps development was capitalized for 
$1,673,091 (2022: $1,302,221). The amortization 
cost for 2023 was $421,218 (2022: $277,416). 

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 2023 
and there was no impairment. We will continue to 
assess on a quarterly basis for indicators of 
impairment. 

As of December 31, 2023, 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 19(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 
27 for more information. 

•  Several loans payable of $493,767, provided 
by international investors. See Note 26 for 
more information. 

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 2023, 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, 2023, we had a declining 
working capital deficit of $2,092,663 compared to 
a deficit of $3,557,883 at December 31, 2022, 
which is a 42% improvement. 

Cash Flow Provided by Operations 

The cash in-flow from operating activities for the 
year ending December 31, 2023 was $1,862,380 
compared to $2,213,655 for the same period in 
2022. The differences included: 

• 

• 

• 

a significantly larger net income ($2,315,735)  
compared to $788,434 in 2022) 

increased amortization amount ($421,218) 
compared to $277,416 in 2022) 

a $2.5 Million increase in receivables and a 
$962 Thousand decrease in payables 
compared to  2022 

19 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

Cash Flow from Financing Activities 

The cash in-flow from financing activities for the 
year ending December 31, 2023 was $275,064 
compared to an out-flow of $216,985 for the same 
period in 2022. This was mainly because of: 

• 

• 

• 

a paydown of our loans payable of $207,993 
compared to an increase of $279,667 in 2022 

a decrease ($207,993) in interest paid 
compared to an increase ($279,667) in 2022 

the Private Placement in the amount of 
$1,110,000 that took place in 2023 

Cash Flow from Investing Activities 

Cash out-flow from investing activities for the year 
ending December 31, 2023, was $2,504,376 
compared to $1,430,520 for the same period in 
2022. This was mainly because of: 

• 

purchased real estate in Egypt to accommodate 
the growth in staff working out of our Egypt 
Offshore Centre offices. 

• 

purchased computers and furniture associated 
with our new office in Egypt and our expanded 
office in KSA. 

•  Capitalization of our intangible asset 

Commitments and Contractual Obligations 

NTG was committed under agreements for the 
rental of office space in Canada at a monthly rate of 
$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. 

In February 2023, 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 2022 to 2028. The total lease 
commitments for 2024 are $539,393. See Note 17 
and Note 29 for further explanation. 

20 

 
 
 
 
 
 
 
 
 
 
 
 
Debt and Credit Facilities 

As of December 31, 2023, 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 2024. 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. 

Additionally,  as  of  December  31,  2023,  NTG 
Egypt Advanced Software, a subsidiary of NTG, 
had the following: 

• 

• 

an overdraft facility with QNB bank in Egypt in 
the amount of 7 Million Egyptian pounds (EGP) 
with an interest rate of 18%. The amount 
drawn on the facility as of December 31, 2023 
is $298,743 (2022: $389,321). 

a loan with CIB bank in Egypt for 5,583,000 
EGP, repayable in monthly principal payments 
of 232,625 Egyptian pounds plus interest (10% 
plus bank corridor rate ) and with a maturity 
date of February 1, 2025. In December 2023, 
the loan was renegotiated to increase the 
amount to 5,750,000 EGP and charge principal 
repayments to 239,583 EGP plus interest and 
extend the maturity date to December 1, 2025. 

As of December 31, 2023, the amount due was 
5,750,000 EGP (approximately $245,496) 
(2022: $306,507). 

In 2020, NTG received $60,000 interest-free for the 
Canadian Emergency Business Account (CEBA) 
revolving line of credit. As of December 31, 2023, 
the Corporation has repaid the full $40,000 against 
the loan. According to the Bank and the CRA, the 
balance owed of $20,000 has been forgiven. 

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. 

NTG Clarity Networks Inc. 
Annual Report 2023 

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 27. 

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, 2023. These are available on SEDAR 
(www.sedar.com). 

The policies applied in these statements are 
based on IFRS issued and outstanding as of April 
27, 2023, the date the Board of Directors 
approved the consolidated financial statements. 

Proposed Transactions 

At the Annual and Special meeting of shareholders 
held on July 7, 2023, shareholders voted to 
consolidate the common shares of the Corporation 
on the basis of up to five (5) pre-consolidation 
common shares for each post-consolidation 
common share. 

Subsequent to year end, on board approval, in 
February 2024, management made an application 
to the TSX to proceed with the share consolidation 
at 5:1 ratio. As a result of the Consolidation, the 
number of issued and outstanding Shares will be 
reduced from 187,672,355 Shares to 37,534,471 
Shares, subject to treatment of fractional shares. 

21 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

Any fractional interest in shares that is less than 
0.5 of a share resulting from the Consolidation will 
be rounded down to the nearest whole share and 
any fractional interest in shares that is 0.5 or 
greater of a share will be rounded up to the nearest 
whole share. The new CUSIP number for the post-
consolidation shares is 62940V203 and the new 
ISIN number is CA62940V2030. The Shares began 
trading on a consolidated basis on the TSX 
Venture Exchange on March 20, 2024. 

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, 2023, approximately 
54% of NTG’s revenue was from three customers 
(2022: 35% from two customers). Management 
continues to work to diversify the customer base 
and country concentration. In 2023, 53% (2022: 
37%) of our trade accounts receivable balance was 
from three customers. 

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. 

22 

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 
digital transformation, IT, and telecom industries 
and is little 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 market place. 

In 2023, approximately 81% of our revenue came 
from work done in KSA (2022: 62%). 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. Egypt’s revenue contribution in 2023 
was 9% (2022: 20%).  

This drop in revenue was planned as NTG Egypt is 
now primarily a delivery centre for offshore services. 
Egypt continues to support our legacy customers in 
Egypt. 

Oman’s major customer contributed 2% of the 
revenue in 2023 (2022: 5%). 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

Other effects in the economy include interest 
rates and inflation with the official inflation hitting 
34.2% at year end. (https://www.egypttoday.com/ 
Article/3/129707/Egypt-s-annual-core-inflation- 
records-34-2 -in-December). This has resulted in 
NTG Egypt having to increase salaries to help 
personnel cope with the changing economy. 

We continue to mitigate much of the risk of doing 
business in the country as our expenses and our 
contracts with legacy customers in Egypt are both in 
the local currency. 

Additionally, we have transformed NTG Egypt into 
a supplier of offshore services for international 
customers. As a result, contracts for offshoring 
services are billed in more stable currencies such 
as USD or Saudi Riyals (SAR). 

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. 

Interest rate risk 

NTG’s exposure to interest rate fluctuations is 
primarily interest paid on its indebtedness and long- 
term loans. The Corporation performed sensitivity 
analysis on interest rates on December 31, 2023 to 
determine how a change in interest rates would 
impact equity and net loss. 

During the year, NTG paid $378,985 (2022: 
$315,656) 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 $37,899 
(2022: $31,566). 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 receivables. 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 do 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.  

Devaluation of Egyptian pound 

The Egyptian Central Bank continues to devalue 
the currency. By the end of 2023 the EGP’s 
value dropped from around 18 EGP to the 
Canadian dollar in January to about 22 EGP in 
December 2023, and the trend appears to be 
continuing. 

23 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

A 10% change in exchange rates on December 31, 2023 would have the following approximate impacts: 

10% impact to: 

P&L in CAD 

Equity in CAD 

Liquidity risk 

U.S. 
Dollar 
USD 

$63,360 

$46,569 

Omani 
Riyal 
OMR 

Kuwait 
Dinar 
KWD 

Saudi 
Riyal 
SAR 

Turkish 
Lira 
TRY 

Iraqi Dinar 
IQD 

Egyptian 
Pound 
LE 

$1,999 

$19,027 

$213,937 

$1,238 

$2,245 

$31,501 

$1,469 

$13,985 

$157,244 

$910 

$1,650 

$23,154 

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, 2023: 

Contractual obligations 

2024 

2025 

2026  2027 and after 

Total 

Operating line of credit 

Accounts payable and 
accrued liabilities 

Operating leases 

Long-term debt 

Loans payable 

$ 298,743 

6,999,324 

$ – 

– 

$ – 

– 

$ –  $ 298,743 

–  6,999,324 

242,820 

167,813 

110,260 

18,500 

539,393 

122,748 

6,635,628 

493,767 

– 

– 

– 

–  6,758,376 

– 

493,767 

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 

2023 

$  3,185,918 

39,432 

2,729 

151,434 

212,760 

2022 

$ 696,460 

74,446 

40,653 

137,668 

539,614 

$ 3,991,557 

$ 1,488,841 

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. 

24 

 
 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

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, 2023. Also, no changes 
were made in the objectives, policies, or 
processes during the year ending December 31, 
2023. 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)  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; 

(ii)  fund capital projects for facilitation of business 
expansion provided there is sufficient liquidity 
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. Subsequent to year end, in April 
2024, the Corporation submitted an application 
for Directors and Officers insurance. 

25 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

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, 2023 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 27, 2024, 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. 

26 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

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” 

“Kristine  Lewis” 

Ashraf Zaghloul 

Kristine  Lewis 

Chief Executive Officer 

President 

April 27, 2024 

April 27, 2024 

27 

 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 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 at  December 31, 2023 and December 31, 
2022, 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, 2023 and December 31, 2022, 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. 

Key Audit Matters 

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated 
financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial 
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. 

We have determined that there are no key audit matters to communicate in our report. 

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 $2,315,735 {2022: $788,434) during the year ended December 31, 2023 and, as of that date, the Corporation 
has an accumulated deficit of $20,468,919 and current assets are less than current liabilities by a ratio of 1:1.35. 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. 

28 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

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. 

29 

 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

• 

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 practise public accounting by 
The Chartered Professional Accountants 

Markham, Ontario 
April 27, 2024 

30 

 
 
 
 
 
 
 
 
 
 
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) 

  Investment in joint venture (Note 16) 

  Right-of-use of assets (Note 17) 

Total non-current assets 

Total Assets 

LIABILITIES 

Current liabilities 

 Current portion of leasehold liability (Note 17) 

 Accounts payable and accrued liabilities (Note 18) 

 Bank indebtedness (Note 19) 

 Current portion of long-term debt (Note 19) 

  Loans payable (Note 26) 

Total current liabilities 

Non-current liabilities 

  Leasehold liability (Note 17) 

  Long-term debt (Note 19) (Note 27) 

Total non-current liabilities 

Total liabilities 

SHAREHOLDER’S EQUITY 

Capital stock (Note 21) 

Contributed surplus (Note 22) 

Foreign exchange account 

Deficit 

Total shareholders’ equity 

NTG Clarity Networks Inc. 
Annual Report 2023 

2023   

2022 

$ 

358,088  $ 

725,020 

$ 

$ 

6,368,846   
129,842   
293   

3,881,520 

86,751 

17,431 

6,857,069  $ 

4,710,722 

814,911  $ 

221,732 

4,457,474   
142,136   
120,568   
5,535,089   

3,205,601 

– 

29,556 

3,456,889 

$ 

12,392,158  $ 

8,167,611 

$ 

86,829   
7,947,645   

298,743  $ 
122,748   
493,767   

39,004 

6,985,267 

389,321 

153,253 

701,760 

$ 

8,949,732  $ 

8,268,605 

43,941   
6,635,628   

– 

6,676,134 

$ 

$ 

6,679,569  $ 

6,676,134 

15,629,301  $ 

14,944,739 

14,736,986   
2,711,523   
(216,733)   
(20,468,919)   
(3,237,143)   

13,606,986 

2,617,273 

(822,757) 

(22,178,630) 

(6,777,128) 

Total liabilities and shareholders’ equity 

$ 

12,392,158  $ 

8,167,611 

Approved on behalf of the Board: 

“Ashraf Zaghloul” 
Director 

“Kristine Lewis” 
Director 

See accompanying notes to consolidated financial statements. 

31 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

NTG CLARITY NETWORKS INC. 
Consolidated Statements of Changes in Equity 

For the years ended December 31, 2023 and December 31, 2022 
(In Canadian Dollars) 

Share 
Capital 

  Contributed 
Surplus 

Deficit   

Foreign 
Exchange 
Reserve 

Total 
Shareholders’ 
Equity 

$ 

13,561,986  $ 

2,309,023  $ 

(23,426,487)  $ 

(363,334)  $ 

(7,918,812) 

–   

–   

25,000   

–   

–   

–   

–   

328,250   

20,000   

(20,000)   

1,247,857   

–   

1,247,857 

–   

–   

–   

–   

(459,423)   

(459,423) 

–   

–   

–   

25,000 

328,250 

– 

$ 

13,606,986  $ 

2,617,273  $ 

(22,178,630)  $ 

(822,757)  $ 

(6,777,128) 

–   

–   

1,120,000   

–   

–   

–   

–   

104,250   

10,000   

(10,000)   

1,709,711   

–   

1,709,711 

–   

–   

–   

–   

606,024   

606,024 

–   

–   

–   

1,120,000 

104,250 

– 

$ 

14,736,986  $ 

2,711,523  $ 

(20,468,919)  $ 

(216,733)  $ 

(3,237,143) 

Balance,  
January 1, 2022 

Income from continuing 
operations 

Other comprehensive 
income 

Issuance of share    capital 
(Note 21) 

Share-based 
compensation 

Reallocation of 
contributed surplus  
(Note 21) 

Balance,  
December     31, 2022 

Income from continuing 
operations 

Other comprehensive 
income 

Issuance of share    capital 
(Note 21) 

Share-based 
compensation (Note 22) 

Reallocation of 
contributed surplus  
(Note 21) (Note 22) 

Balance,  
December     31, 2023 

32 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

NTG CLARITY NETWORKS INC. 
Consolidated Statements of Profit and Loss and Comprehensive Income 

(In Canadian Dollars) 

For the years ended December 31, 

REVENUE (Note 7) 

COST OF SALES (Note 24) 

GROSS MARGIN 

OPERATING EXPENSES 

Selling (Note 25) 

General and administration (Note 25) 

Loss on foreign exchange 

Total operating expenses 

$ 

2023   

27,728,117  $ 
18,504,982   
9,223,135   

2022 

17,652,313 

10,929,917 

6,722,396 

2,172,925   
3,863,576   
583,000   
6,619,501   

1,717,956 

2,455,510 

294,625 

4,468,091 

INCOME (LOSS) FROM OPERATIONS 

$ 

2,603,634  $ 

2,254,305 

OTHER (INCOME) EXPENSES 

Provision for bad debts (Note 11) 

Depreciation (Note 14) (Note 17) 

Amortization (Note 15)  

Accretion (Note 20) 

Interest 

Share-based payments (Note 22) 

Other income 

Loss on disposal of assets 

Total other expenses 

66,606   
165,782   
421,218   
–   
378,985   
104,250   
(252,308)   
9,390   
893,923   

– 

160,795 

277,416 

5,804 

315,656 

328,250 

(81,473) 

– 

1,006,448 

INCOME (LOSS) FROM CONTINUING OPERATIONS 

$ 

1,709,711  $ 

1,247,857 

Other comprehensive income: 

Exchange gain (loss) arising on translation of foreign operations 

606,024   

(459,423) 

TOTAL COMPREHENSIVE INCOME (LOSS) FOR THE YEAR 

$ 

2,315,735  $ 

788,434 

Earnings (loss) per share (Note 9) 

Basic 

Diluted 

Weighted average number of shares outstanding 

Basic 

Diluted 

See accompanying notes to consolidated financial statements. 

$ 

$ 

0.01  $ 

0.01  $ 

0.01 

0.00 

185,172,355   
204,978,355   

147,972,355 

165,687,355 

33 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

NTG CLARITY NETWORKS INC. 
Consolidated Statements of Cash Flows 

(In Canadian Dollars) 

For the years ended December 31, 

Cash provided by (used in) 

OPERATING ACTIVITIES 

Net income (loss) for the year 

Add-Items not affecting cash: 

Provision for bad debts (Note 11) 

Depreciation (Note 14) (Note 17) 

Amortization (Note 15) 

Interest expense 

Share-based payment (Note 21) 

Loss on disposal of asset 

Net change in non-cash working capital items, 

Increase in trades and other receivable 

Decrease in bid/performance bond 

(Increase) decrease in prepaid expenses and deposits 

Increase in accounts payable and accrued liabilities 

Increase in leasehold liability 

2023  

2022 

$ 

2,315,735  $ 

788,434 

66,606  
165,782  
421,218  
378,985  
104,250  
9,390  

– 

160,795 

277,416 

315,656 

328,250 

– 

$ 

$ 

3,461,966  $ 

1,870,551 

(2,553,932)  $ 
17,138  
(43,091)  
962,378  
17,921  

(134,474) 

38,333 

(22,305) 

445,040 

16,510 

TOTAL CASH IN-FLOW FROM OPERATING ACTIVITIES 

$ 

1,862,380  $ 

2,213,655 

FINANCING ACTIVITIES 

Principle payment of lease (Note 17) 

Drawdown (repayment) in long-term debt (Note 19) 

Increase (decrease) of bank indebtedness (Note 19) 

Increase (decrease) of loans payable 

Interest paid 

Issuance of common shares (Note 21) 

TOTAL CASH IN-FLOW (OUT-FLOW) FROM FINANCING 
ACTIVITIES 

INVESTING ACTIVITIES 
Purchase of property, plant and equipment (Note 14) 

(Additions) intangible assets (Note 15) 

Investments in joint venture (Note 16) 

(96,369)  
(71,011)  
(90,578)  
(207,993)  
(378,985)  
1,120,000  

(90,560) 

121,311 

(236,747) 

279,667 

(315,656) 

25,000 

$ 

275,064  $ 

(216,985) 

(689,149)  
(1,673,091)  
(142,136)  

(128,299) 

(1,302,221) 

– 

TOTAL CASH (OUT-FLOW) FROM INVESTING ACTIVITIES 

$ 

(2,504,376)  $ 

(1,430,520) 

NET INCREASE (DECREASE) IN CASH 

Cash balance, beginning of period 

Cash balance, end of period 

(366,932)  
725,020  
358,088  $ 

$ 

566,150 

158,870 

725,020 

See accompanying notes to consolidated financial statements. 

34 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

NOTES TO THE AUDITED FINANCIAL STATEMENTS 

1.  CORPORATE INFORMATION 

3.  BASIS OF PRESENTATION 

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. In the 
current year the registration of the 
Corporation was moved from Alberta to 
Ontario. 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, 2023, the Corporation had 
a working capital deficit of $2,092,663 (2022: 
deficit of $3,557,883), income from operations of 
$2,603,634 (2022: $2,254,305), and 
accumulated losses since inception of 
$20,468,919 (2022: $22,178,630). 

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. 

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. 

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 27, 2024. 

Management of the Corporation prepared the 
consolidated financial statements of the Corporation 
during January and February 2024, and the Board 
of Directors approved them. The Audit Committee 
of the Corporation discussed the audited 
consolidated financial statements at its meeting on 
April 27, 2024, and the Board of Directors approved 
them at its meeting on April 27, 2024. 

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 are 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. 

35 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

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. 

4.  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, 2023. 

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 are 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. 

The subsidiary of the Corporation as of 
December 31, 2023 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. 

36 

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 Software 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 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

• 

 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. 

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.

•  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. 

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 

37 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

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: 

38 

•  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. 

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. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(c)  Revenue Recognition 

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. 

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 

NTG Clarity Networks Inc. 
Annual Report 2023 

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. 

39 

 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

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. 

Revenues from customers of Zaha Tech 
(Note 30) 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 

40 

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. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
• 

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. 

NTG Clarity Networks Inc. 
Annual Report 2023 

•  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. 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 measure 

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. 

41 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

(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. 

Cash, trade and account receivables, bid/ 
performance bonds, prepaid expenses and 
deposits are classified as amortized cost. 
The investment in joint venture is classified 
as FVTPL.  

Similarly, accounts payable and accrued 
liabilities, long term debt, loans payable are 
classified as amortized cost. Carrying value 
of cash, trade and account receivables, bid/ 
performance bonds, prepaid expenses and 
deposits, accounts payable and accrued 
liabilities, long term debt and loans payable 
approximate fair value. 

The Company’s financial instruments are 
classified as follows: 

Investments in Joint 
venture 

Trade and other 
receivables 

FVTPL 

Amortized Cost 

Accounts payable and 
accrued liabilities 

Amortized Cost 

Cash 

Amortized Cost 

Long-term debt 

Amortized Cost 

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). 

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

Loan payable 

Amortized Cost 

(i)  Financial assets 

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

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

42 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(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. 

(iii) Expected credit loss 

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 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. 

NTG Clarity Networks Inc. 
Annual Report 2023 

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. 

(iv) 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. 

43 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

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, 2023 and December 
31, 2022. 

(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. 

(j)  Property, plant 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 

44 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 

The Corporation recognizes a right-of-use asset 
and lease liability as the present value of future 
lease payments when the lessor makes the 
leased asset available for use by the Company. 

Lease liabilities include the net present value of 
fixed payments, variable lease payments that 
are based on an index or a rate amounts 
expected to be payable by the Corporation 
under residual value guarantees, and the 
exercise price of a purchase option or penalties 
for terminating the lease, if the Corporation is 
reasonably certain to exercise those purchase 
or termination options. The lease payments are 
discounted using the interest rate implicit in the 
lease, or, if that rate cannot be readily 
determined, the Corporation’s incremental 
borrowing rate. 

Lease terms applied are the contractual 
non-cancellable periods of the lease, plus 
periods covered by renewal options or 
termination options, if the Corporation is 
reasonably certain to exercise those 
options.  

Lease liabilities are remeasured when there 
is a change in lease term, a change in the 
assessment of an option to purchase the 
leased asset, a change in expected residual 
value guarantee, or a change in future lease 
payments resulting from a change in an 
index or a rate used to determine those 
payments.  

NTG Clarity Networks Inc. 
Annual Report 2023 

initial direct costs and future restoration costs, 
less any lease incentives received. 

Right-of-use assets are depreciated on a straight-
line basis from the date that the underlying asset 
is available for use. Depreciation is recorded over 
the shorter of the lease term and the useful life of 
the underlying asset, unless the lease transfers 
ownership of the underlying asset to the lessee 
by the end of the lease term, in which case 
depreciation is recorded over the useful life of the 
underlying asset. 

Lease payments for assets that are exempt 
through the short-term exemption and variable 
payments not based on an index or rate continue 
to be recognized in office and general expenses  

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. 

(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, 2023 and 
December 31, 2022, the Corporation did not 
capitalize any borrowing cost. 

(m) 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. 

45 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

(n)  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. 

(o)  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. 

46 

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, 2023 and December 31, 2022. 

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. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

(p)  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. 

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

(r)  Basic and diluted earnings per share 

(q)  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. 

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. 

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. 

(s)  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. 

47 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

(t)  Investment in associates and joint 

ventures 

An associate is an entity over which the 
corporation has significant influence. 
Significant influence is the power to 
participate in the financial and operating 
policy decisions of the investee, but is not 
control or joint control over those policies.  

A joint venture is a type of joint arrangement 
whereby the parties that have joint control of 
the arrangement have rights to the net assets 
of the joint venture. Joint control is the 
contractually agreed sharing of control of an 
arrangement, which exists only when 
decisions about the relevant activities require 
the unanimous consent of the parties sharing 
control.  

The considerations made in determining 
significant influence or joint control are similar 
to those necessary to determine control over 
subsidiaries. The Corporation investment in 
its associate and joint venture are accounted 
for using the equity method. 

Under the equity method, the investment in 
an associate or a joint venture is initially 
recognized at cost. The carrying amount of 
the investment is adjusted to recognize 
changes in the Group’s share of net assets of 
the associate or joint venture since the 
acquisition date. 

The aggregate of the share of profit or loss of 
an associate and a joint venture is shown on 
the face of the statement of profit or loss 
outside operating profit and represents profit 
or loss after tax and noncontrolling interests in 
the subsidiaries of the associate or joint 
venture.  

The financial statements of the associate or 
joint venture are prepared for the same 
reporting period as the Group. When 
necessary, adjustments are made to bring the 
accounting policies in line with those of the 
corporation. 

48 

5.  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. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

Contract assets 

Contract assets 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. 

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. 

Impairment of non-financial assets 

Share-based compensation 

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. 

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 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. 

49 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

Useful life of an intangible asset 

6.  STANDARDS ISSUED BUT NOT 

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. 

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 Corporation has the intention and 
ability to use the asset, and that the asset will 
generate future benefits to the Corporation. 
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. 

YET EFFECTIVE 

As at April 27, 2024, the date of authorization 
of these financial statements, the Corporation 
performed and assessment of new and 
revised standards, issued by the IASB that are 
not yet effective.  

The Corporation has assessed that the impact 
of adopting these accounting standards on its 
consolidated financial statements would not 
be material. 

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, 2023 

Revenue 

Cost of sales 

Gross margin 

Expenses 

Depreciation / Amortization 

Other income 

Exchange gain arising on translation 

NTG Canada 

NTG Egypt 

Consolidated 
Total 

$ 

25,123,148  $ 

2,604,969  $ 

27,728,117 

15,138,638 

3,366,345 

18,504,982 

$ 

9,984,510  $ 

(761,376)  $ 

9,223,135 

(6,587,510) 

(590,790) 

(7,178,730) 

(516,952) 

– 

– 

(70,049) 

252,308 

606,024 

(587,001) 

252,308 

606,024 

Total comprehensive income for the year 

$ 

2,879,618  $ 

(563,883)  $ 

2,315,735 

50 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

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

Revenue 

Cost of sales 

Gross margin 

Expenses 

Depreciation / Amortization 

Other income 

Accretion 

NTG Canada 

NTG Egypt 

Consolidated 
Total 

$ 

13,359,140  $ 

4,293,173  $ 

17,652,313 

7,345,003 

3,584,913 

10,929,917 

$ 

6,014,137  $ 

708,260  $ 

6,722,396 

(4,813,873) 

(298,125) 

(5,111,998) 

(362,670) 

– 

(5,804) 

(75,541) 

81,473 

– 

(438,211) 

81,473 

(5,804) 

Exchange loss arising on translation 

– 

(459,423) 

(459,423) 

Total comprehensive income for the year 

$ 

831,790  $ 

(43,356)  $ 

788,434 

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

Long term asset additions for the year ended December 31, 2023 

NTG Canada   

NTG Egypt 

Consolidated Total 

Asset additions/dispositions for the 
year ending December 31, 2023 

Property and equipment (Note 14) 

  Additions 

  Dispositions 

$ 

30,315  $ 

658,834  $ 

–   

(22,146)   

Intangible assets (Note 15) 

1,673,091 

– 

$ 

1,703,406  $ 

636,688  $ 

689,149 

(22,146) 

1,673,091 

2,340,094 

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

NTG Canada 

NTG Egypt 

Consolidated Total 

Asset additions for the year ending 
December 31, 2023 

Property and equipment (Note 14) 

Intangible assets (Note 15) 

$ 

$ 

2,555  $ 

125,744  $ 

1,302,221 

– 

1,304,776  $ 

125,744  $ 

128,299 

1,302,221 

1,430,520 

51 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

Long term assets for the year ended December 31, 2023 

Assets as at December 31, 2023 

Property and equipment 

Intangible assets 

NTG Canada 

NTG Egypt 

Consolidated 
Total 

$ 

$ 

40,769  $ 

774,142  $ 

814,911 

4,457,474 

– 

4,457,474 

4,498,243  $ 

774,142  $ 

5,272,385 

Long term assets for the year ended December 31, 2022 

Assets as at December 31, 2023 

Property and equipment 

Intangible assets 

NTG Canada 

NTG Egypt 

Consolidated 
Total 

$ 

$ 

26,986  $ 

194,746  $ 

221,732 

3,205,601 

– 

3,205,601 

3,232,587  $ 

194,746  $ 

3,427,333 

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 

2023   

2022 

235,245  $ 

1,788,890 

22,479,963 

428,665 

1,608,208 

10,281,966 

2,604,969  $ 

4,293,173 

619,802  $ 

(752)  $ 

953,883 

86,418 

27,728,117  $ 

17,652,313 

$ 

$ 

$ 

$ 

$ 

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 2023, approximately 54% 
(2022: 35%) of the Corporation’s revenue was derived from three customers (2022: two customers). 

Receivables by segment for the year ending December 31, 

Canada 

Egypt 

2023   

2022 

$ 

5,725,885  $ 

2,856,315 

642,961 

1,025,205 

$ 

6,368,846  $ 

3,881,520 

As at December 31, 2023, approximately 53% (2022: 37%) of the Corporation’s trade accounts receivable 
balance was from three (2022: three) customers. 

Payables by segment for the year ending December 31, 

Canada 

Egypt 

52 

2023   

2022 

$ 

7,118,876  $ 

6,270,838 

828,769 

714,429 

$ 

7,947,645  $ 

6,985,267 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Bank indebtedness by segment for the year ending December 31, 

Egypt 

NTG Clarity Networks Inc. 
Annual Report 2023 

2023   

2022 

298,743 

389,321 

$ 

298,743  $ 

389,321 

8.  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, 

Income before income taxes 

Income tax 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 

2023   

2022 

$ 

2,879,618  $ 

831,970 

763,099 
27,626 

(70,022) 

136,992 

2,618 

220,424 
86,986 

(273,288) 

96,108 

2,675 

Tax effect of utilization of tax losses not previously recognized 

(860,313) 

(132,905) 

Income tax recognized on the statement of comprehensive income 

$ 

–  $ 

– 

NTG Egypt Advanced Software 
As at December 31, 

Income before income taxes 

2023  

2022 

$ 

(1,169,907)  $ 

416,067 

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

Tax effect of utilization of tax losses not previously recognized 

Income tax recognized on the statement of comprehensive income 

$ 

–   

–  
–  $ 

93,615 

(93,615) 

– 

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 probable 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 

2023   

2022 

$ 

38,438  $ 

29,747 

3,354,312   
3,392,750   
3,392,750   

4,363,987 

4,393,734 

4,393,734 

$ 

–  $ 

– 

The Corporation has available income tax losses in the amounts of $12,657,781 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 

$ 

4,200,396 

6,834,650 

1,622,735 

$ 

12,657,781 

53 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

9.  EARNINGS PER SHARE 

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, 2023 

Options – Share-based payments (Note 21(b)) 

19,806,000 

19,706,000 
Note a: of which 19,706,000 had vested as of December 31, 2023. 

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

December 31, 

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

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

2023   

2022 

2,315,735  $ 

788,434 

2,315,735  $ 

788,434 

$ 

$ 

December 31, 

Weighted average number of common shares outstanding for basic 
earnings per share (Note 21) 

2023 

2022 

185,172,355 

147,972,355 

Weighted average number with the effect of dilution on common shares 

204,978,355 

165,687,355 

Income per share (basic) 

Income per share (diluted) 

$0.01 

$0.01 

$0.01 

$0.00 

54 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

10. CASH AND CASH EQUIVALENTS 

Cash and cash equivalents comprise of cash at banks and on hand in the amount of $358,088 as at 
December 31, 2023 (2022: $725,020). 

11. TRADE AND OTHER RECEIVABLES 

December 31, 

Trade receivables 

Less: allowance for expected credit losses 

Net Trade receivables 

Contract assets 

Total trade receivables and contract assets 

Receivables from tax authorities 

Other receivables 

2023   

2022 

$ 

5,847,655  $ 

3,188,290 

– 

5,847,655 

198,729 

6,046,384 

275,066 

47,396 

(25,057) 

3,163,233 

354,485 

3,517,718 

296,173 

67,629 

$ 

6,368,846  $ 

6,376,870 

Trade receivables are non-interest bearing and are generally on 30-180 day terms. The Corporation had a 
provision for expected credit losses in the amount of $Nil (2022: $25,057). The amount relating to impairment 
of trades receivables is $66,606 (2022: $Nil). 

Neither past due nor impaired 

Current 

31 – 60 days 

61 – 90 days 

91 – 180 days 

Past due but not impaired 

Greater than 180 days 

$ 

2023   
2,983,147  $ 

2,111,346 

203,030 

337,372 

2022 

2,230,177 

311,791 

326,625 

199,960 

212,760 

119,737 

$ 

5,847,655  $ 

3,188,290 

Contract assets consists of service revenue that has already been rendered as at December 31, 2023 and 
recognized in accordance with the Corporation’s revenue recognition policy from Note 3. 

12. PREPAID EXPENSES AND DEPOSITS 

December 31, 

Prepaid rent 

Prepaid insurance 

Other prepaids 

2023   

2022 

$ 

87,090  $ 

47,660 

35,773 

6,979 

32,372 

6,719 

$ 

86,751  $ 

86,751 

55 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

13. BID/PERFORMANCE BONDS 

At December 31, 2023, $293 in performance bonds (2022: $17,431) was for a bond 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, 

Refunded during the year: 

Egypt 

Total refunded during the year 

Refunded during the year: 

Saudi Arabia 

Egypt 

Total refunded during the year 

Performance Bond - Ending Balance December 31, 

Saudi Arabia 

Egypt 

Ending Balance – December 31, 

$ 

2023   

– 

17,431 

$ 

17,431  $ 

– 

– 

– 

(17,138) 

(17,138) 

– 

293 

293  $ 

2022 

28,907 

26,857 

55,764 

– 

– 

(28,907) 

(9,426) 

(38,333) 

– 

17,431 

17,431 

14. PROPERTY, PLANT AND EQUIPMENT 

The amount of borrowing costs capitalized during the year ending December 31, 2023 was $Nil (2022: $Nil). 

Furniture & 
 Equipment 

Computer 
Equipment 

Computer 
Software 

Land & 
Buildings 

Total 

Cost: 

At January 1, 2022 

$580,849 

$929,273 

$400,996 

Additions 

36,661 

91,638 

– 

At December 31, 2022 

$617,510 

$1,020,911 

$400,996 

$– 

– 

$– 

$1,911,118 

128,299 

$2,039,417 

Additions 

Disposals 

77,417 

(22,146) 

192,960 

– 

– 

– 

418,772 

– 

689,149 

(22,146) 

At December 31, 2023 

$672,781 

$213,871 

$400,996 

$418,772 

$2,706,420 

56 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

Furniture & 
 Equipment 

Computer 
Equipment 

Computer 
Software 

Land & 
Buildings 

Total 

Accumulated depreciation and impairment: 

At January 1, 2022 

$485,753 

$885,741 

$356,330 

Depreciation for the year 

18,808 

71,053 

– 

At December 31, 2022 

$504,561 

$956,794 

$356,330 

$– 

– 

$– 

$1,727,824 

89,861 

$1,817,685 

Depreciation for the year 

Disposals 

22,327 

(12,756) 

53,340 

– 

– 

– 

10,913 

86,580 

– 

(12,756) 

At December 31, 2023 

$514,132 

$1,010,134 

$356,330 

$10,913 

$1,891,509 

Net book value: 

At December 31, 2023 

At December 31, 2022 

$158,649 

$112,949 

$203,737 

$64,117 

$44,666 

$44,666 

$407,859 

$814,911 

– 

$221,732 

Addition to land and buildings as at the end of the reporting period is as follows: 

Land 

Building 

15. INTANGIBLE ASSETS 

Intangible assets related to the upgrade of the 
internally developed the NTGapps (formerly 
Smart2Go) platform capitalized from 2020 to 
2023. 

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. 

2023   

2022 

$ 

83,755  $ 

335,017 

$ 

418,772  $ 

– 

– 

– 

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. 

57 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

During 2023, $1,673,091 was capitalized (2022: $1,302,221) and $421,218 was amortized (2022: $277,416). 

Cost: 

At January 1, 2022 

Additions 

At December 31, 2022 

Additions 

At December 31, 2023 

Accumulated amortization and impairment: 

At January 1, 2022 

Amortization for the year 

At December 31, 2022 

Amortization for the year 

At December 31, 2023 

Net book value: 

At December 31, 2023 

At December 31, 2022 

NTGapps 
Development 
Costs 

2,312,018 

1,302,221 

3,614,239 

1,673,091 

5,287,330 

131,222 

277,416 

408,638 

421,218 

829,856 

NTGapps 
Development 
Costs 

4,457,474 

3,205,601 

$ 

$ 

$ 

$ 

$ 

$ 

$ 

$ 

16. INVESTMENT IN JOINT VENTURE 

The corporation has a 50% interest in Alamat E-Commerce Systems Company, a joint venture originally 
valued at 500,000 EGP. The corporation interest in joint venture is accounted for using the equity 
method in the consolidated financial statements at $142,136. The aggregate of the share of profit or loss 
of an associate and a joint venture of $217,204 is included in other income on the face of the statement 
of profit or loss. 

58 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
NTG Clarity Networks Inc. 
Annual Report 2023 

17. RIGHT OF USE ASSET 

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

$ 

100,490 

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

Depreciation 

Right-of-use of Asset as at January 1, 2023 

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

Depreciation 

– 

(70,934) 

29,556 

170,214 

(79,202) 

Right-of-use Asset as at December 31, 2023 

$ 

120,568 

On June 1, 2021, the Corporation leased office space for a period of 2 years, expiring May 31, 2023. The 
lease was renewed for an additional 2 years, expiring May 31, 2025. The Corporation recognized right-of-use 
assets and lease liability of $170,214.  

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. 

Lease liability 

The lease liability as at December 31, 2023 is as follows: 

Lease Liability as at January 1, 2022 

$ 

113,054 

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 January 1, 2023 

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, 2023 

Current portion 

Long-term portion 

The undiscounted future lease payments are as follows: 

2024 

2025 

– 

16,510 

(90,560) 

39,004 

170,214 

17,921 

(96,369) 

$ 

130,770 

86,829 

43,941 

105,600 

46,161 

$ 

151,761 

59 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

18. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES 

December 31, 

Trade payables (i) 

Accrued liabilities (i) 

Related parties payable (ii) 

Payroll liability (iii) 

Payroll taxes payable 

Sales taxes payable 

Other accounts payable 

2023   

2022 

$ 

3,991,557  $ 

1,488,841 

196,845 

1,122,290 

1,197,000 

18,184 

930,137 

491,632 

174,237 

1,608,735 

2,231,833 

17,069 

817,241 

647,311 

$ 

7,947,645  $ 

6,985,267 

•  Trade payables and accrued liabilities are non-interest bearing. 

•  Related parties payables are interest bearing at 5-8% interest p.a, $87,439 (2022: $103,363) was 

recognized as an interest accrued for the year ended December 31, 2023 and have no specified 
terms of repayment. 

•  As of December 31, 2023, Key management (Ashraf Zaghloul and Kristine Lewis) is owed a total of 
$1,088,438 end of service payroll liability. Included in payroll liability is an amount owed to related 
parties for $22,971. 

19. OTHER FINANCIAL ASSETS AND FINANCIAL LIABILITIES 

(a) Other financial liabilities 

Long-term debt 

December 31, 

Long-term debt (i) 

CEBA loan 

Long-term portion of CIB loan (iii) 

(i)  The loan is due to 2729252 Ontario Inc., a 

company controlled by Ashraf Zaghloul, NTG 
CEO and Kristine Lewis, NTG President. 

2023 

2022 

$  6,512,880 

$  6,512,880 

– 

123,881 

10,000 

153,254 

$ 6,636,761 

$ 6,676,134 

The loan remains secured by a General 
Security Agreement over the assets of the 
Corporation and charge interest as per 
company ability to pay subject to maximum 
of bank prime plus 2.05%. 

There are no specific repayment terms and 
will not be repaid in the next 12 months. The 
Corporation recognized interest expense of 
$68,875 (2022: $74,312) which is included in 
above loan balance. 

60 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 

Bank indebtedness (ii) 

Bank indebtedness 

Long-term debt (iii) 

Long-term debt payable (CIB Loan) 

- Current portion 

- Long term 

NTG Clarity Networks Inc. 
Annual Report 2023 

2023  

2022 

$ 

$ 

$ 

$ 

298,743  $ 

389,321 

245,496  $ 

306,507 

122,748  $ 

153,253 

122,748  $ 

153,254 

As of December 31, 2023, NTG Egypt Advanced Software has the following credit facilities: 

(i)  Overdraft facility with QNB bank in Egypt in 

the amount of 7,000,000 Egyptian pounds 
with an interest rate of 18%. The amount 
drawn on the facility as at December 31, 
2023 is $298,743 (2022:$389,321). 

(ii)  In 2022, the Corporation had a loan with CIB 
bank in Egypt in the amount of 5,583,000 
Egyptian pounds at interest rate of 10% per 
annum plus bank corridor rate, repayable 
over 2 years in monthly principal payments of 

(b)  Fair values 

232,625 Egyptian pounds plus interest. In 
2023, the Corporation further increased the 
credit facility to 5,750,000 Egyptian 
pounds, repayable over 2 years in monthly 
principal payments of 239,584 Egyptian 
pounds plus interest.  

The loan outstanding as on year end is 
5,750,000 Egyptian pounds (approximately 
$245,496, (2022: $306,507). 

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 

Fair Value 

December 
31, 2023 

December 
31, 2022 

December 
31, 2023 

December 
31, 2022 

Financial assets 

Cash and cash equivalents 

$ 

358,088  $ 

725,020  $ 

358,088  $ 

725,020 

Trade and accounts receivable 

6,093,780 

3,585,347 

6,093,780 

3,585,347 

Performance bonds 

293 

17,431 

293 

17,431 

Total Financial Assets 

$ 

6,452,161  $ 

4,327,798  $ 

6,452,161  $ 

4,327,798 

61 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

Carrying Amount 

Fair Value 

December 
31, 2023 

December 
31, 2022 

December 
31, 2023 

December 
31, 2022 

Financial liabilities 

Accounts payable and 
accrued liabilities 

Bank indebtedness 
Current portion of long-term debt   

Long-term debt 

Loan payable 

$ 

6,999,324  $ 

6,150,957 

$ 

6,999,324  $ 

6,150,957 

298,743   
122,748   
6,635,628   
493,767   

389,321 

153,254 

6,676,134 

701,760 

298,743   
122,748   
6,635,628   
493,767   

389,321 

153,254 

6,676,134 

701,760 

Total Financial Liabilities 

$ 

14,550,210  $ 

14,071,425 

$ 

14,550,210  $ 

14,071,425 

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. 

•  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, 2023, 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 

Level 

2 

Level 

3 

Quoted 
(unadjusted) prices 
in active markets for 
identical assets or 
liabilities. 

62 

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

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

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

Assets measured at fair value 

December 31, 2023 

Level 1 

Level 2 

Level 3 

Cash and cash equivalents 

Investment in joint venture 

$ 358,088 

$ 358,088 

$ – 

$ – 

– 

– 

– 

142,136 

Assets measured at fair value 

$ 358,088 

$ 358,088 

$ –  $ 142,136 

No liabilities were measured at fair 
value 

$ – 

$ – 

$ – 

$ – 

During the reporting year ending December 31, 2023, 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. 

20. GOVERNMENT GRANT 

In 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 March 28, 2024, after which the full amount is 
subject to a 5% annual interest rate and due on 
December 31, 2025. 

21. EQUITY INSTRUMENTS 

(a) Common shares 

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 $10,000 against the loan in 
2023 and $30,000 in 2022 and outstanding amount 
of NIL (2022: $10,000) and NIL (2022: $5,804)) was 
recognized as an interest accrued for the year 
ended December 31, 2023. 

As at December 31, 2023, 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, 2022 

Shares issued on exercise of share options (i) 

Allocation of contributed surplus (i) 

As at, December 31, 2022 

Shares issued on exercise of share options (i) 

Shares issued for private placement (ii) 

Allocation of contributed surplus (i) 

Balance, December 31, 2023 

Common Shares 

Amount 

147,472,355  $ 

13,561,986 

500,000 

– 

25,000 

20,000 

147,972,355  $ 

13,606,986 

200,000 

10,000 

37,000,000 

1,110,000 

– 

10,000 

185,172,355  $ 

14,736,986 

63 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

(i) 

In 2023, a total of 200,000 (2022: 500,000) 
options were exercised, with a total value of 
$10,000 (2022: $25,000). This resulted in a re-
allocation of contributed surplus to capital 
stock in the amount of $10,000 (2022: 
$20,000). In 2022, a total of 500,000 options 
were exercised, with a total value of $25,000. 
This resulted in a re-allocation of contributed 
surplus to capital stock in the amount of 
$20,000.  

(ii)  On December 12, 2023, the Corporation 

completed a non-brokered private placement 
of 37,000,000 shares issued at a price of 
$0.03 per share for aggregate gross proceeds 
of $1,110,000. The common shared issued 
are subject to four-month hold period. 

9,000,000 of these shares were issued to 
directors of the corporation and 28,000,000 
of these shares were issued to 2729252 
Ontario Inc., a company controlled by 
directors. 

(b) Share-based payments 

The Corporation has a formal stock option plan 
allowing the Company 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 2023 and 2022. Details of stock options are as follows: 

As at, January 1, 2022 

Granted 

Exercised 

Expired 

As at, December 31, 2022 

Granted 

Exercised 

Expired 

As at, December 31, 2023 

Options 

Weighted average 
exercise price 

12,475,000  $ 

7,045,000  $ 

(500,000) 

(1,305,000) 

17,715,000  $ 

3,230,000  $ 

(200,000) 

(939,000) 

19,806,000  $ 

0.05 

0.05 

0.05 

0.08 

0.05 

0.05 

0.05 

0.05 

0.05 

The stock options expire at various dates between December 2025 and December 2028. 

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

Exercise Price 

Options Outstanding  

Options Exercisable 

Number 
outstanding 
Dec 31/23 

Remaining 
life of option 

Number 
outstanding 
Dec 31/23 

Remaining 
life of option 

$ 0.05 

19,806,000  $ 

2.97 

19,706,000  $ 

2.97 

64 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

Activity related to share-based compensation is as follows: 

For the year ending December 31, 2023 the Corporation recorded $104,250 (2022: $328,250) 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 2023 is $0.05 (2022: $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 

Fair value of options issued in fiscal year 

22. CONTRIBUTED SURPLUS 

2023 

$0.04 

2022 

$0.03 

3.72 – 4.93% 

1.04 – 3.28% 

5 years 

0% 

5 years 

0% 

0.0 – 219.05% 

0.0 – 225.27% 

$   0.03 

   $   0.05 

Contributed surplus for the year ending consisted of $104,250 (2022: $328,250) for share-based payments 
and re-allocation of contributed surplus on exercise of share options $10,000 (2022: $20,000). 

$ 

2,617,273 

104,250 

(10,000) 

$ 

2,711,523 

Opening balance December 31, 2022 

Share-based payments 

Reallocation on exercise of share options 

Balance as at December 31, 2023 

23. DIVIDENDS PAID AND PROPOSED 

Cash dividends 

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

24. COST OF SALES 

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

Cost of sales 

Salaries 

Travel 

Hardware 

Consulting 

Other 

Total 

2023  

2022 

$  13,794,531  $ 

9,695,623 

518,168 

57,522 

3,533,530 

742,196 

79,907 

– 

601,231 

412,191 

$  18,504,982  $  18,173,278 

65 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

25. EXPENSES: DISCLOSURE OF FUNCTION EXPENSES 

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

2023   

2022 

$ 

1,636,417  $ 

1,416,599 

391,821 

248,356 

6,903 

19,538 

19,756 

98,490 

7,481 

29,617 

15,904 

– 

$ 

2,172,925  $ 

1,717,956 

2023   

2022 

$ 

2,147,792  $ 

1,648,646 

151,522 

47,016 

155,675 

954,900 

40,853 

24,215 

341,603 

114,484 

52,878 

113,650 

480,172 

27,941 

(50,020) 

67,759 

$ 

3,863,576  $ 

2,455,510 

Selling 

Salary and wages 

Marketing 

Mailing and courier 

Professional services 

Meals and entertainment 

Travel 

Total 

General and Administrative 

Salary and wages 

Occupancy 

Consulting 

Professional fees 

Insurance 

Dues and subscriptions 

Penalties and fees 

Office and General 

Total 

66 

 
 
 
 
 
 
 
 
 
 
 
 
NTG Clarity Networks Inc. 
Annual Report 2023 

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

In 2022, the Corporation entered into a non-
secured loan agreement in the amount of $15,530 
(USD $11,467) with no interest rate payable within 
1 year. The amount is non-secured, and was paid 
by January 2023. 

During the year, the Corporation entered into a non-
secured loan agreement in the amount of $141,077 
(USD 106,667) with no interest rate payable by 
January 2024. 

As of December 31, 2023, the Loans Payable 
amount owed is $493,767 (2022: $701,760). 

26. LOANS PAYABLE 

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% interest on the 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% 
interest on the 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. The Capital investment was 
paid in July 2023. 

27. 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. 

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, 2023 (i) 

December 31, 2022 

$ – 

$ – 

$ – 

$ – 

$ 2,210,728 

$ 1,657,562 

Key management compensation 

2023 

2022 

Short term employee benefits 

Post-retirement employee benefits 

Share-based payments 

Total 

$ 557,457 

56,667 

18,000 

$ 861,045 

37,083 

136,300 

$ 634,124 

$ 1,034,428 

67 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
   
 
 
 
 
 
 
28. 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. 

NTG Clarity Networks Inc. 
Annual Report 2023 

(i)  As of December 31, 2023, Key management 

(Ashraf Zaghloul and Kristine Lewis) is owed a 
total of $2,210,728 for unpaid salaries, 
expenses, benefits and compensation, 
outstanding since 2016. These amounts are 
part of Accounts Payable in Note 18. 

(ii)  Included in other receivables is an amount 
receivable from related parties for $26,303 
(2022: $2,744). The balance is unsecured, non-
interest bearing and has no specific terms of 
repayment. Included in payroll liability is an 
amount owed to related parties for $22,971. 

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 2023, directors and officers of 

the Corporation were granted a total number of 
900,000 options (2022: 4,300,000), as 
described in Note 20(b), that were valued at 
$27,000 (2022: $215,000). In the year 2023, 
the directors and officer had not exercised any 
options (2022: None). 

The loan is due to 2729252 Ontario Inc, which is 
a private company owned by two directors of 
the Corporation. See Note 19 (a) for more 
information.  

The Indebtedness held by the Corporation 
is secured by a General Security Agreement 
over the assets of the Corporation. As of 
December 31, 2023, the loan amount is 
$6,512,880 (2022: $6,512,880).  

The Corporation recognized interest expense of 
$68,875 (2022: $74,312) in the statement of 
profit and loss. 

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Market risk 

Foreign currency 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. 

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, 2023 to 
determine how a change in interest rates 
would impact equity and net loss.  

During the year the Corporation paid $378,985 
(2022: $315,656) 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 $37,899 (2022: $31,566). This 
analysis assumes that all other variables 
remain constant. 

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. 

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. 

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Foreign currency risk 

A 10% change in exchange rates on December 31, 2023 would have the following approximate impacts: 

10% impact to: 

U.S. 
Dollar 
USD 

Omani 
Riyal 
OMR 

Kuwait 
Dinar 
KWD 

Saudi 
Riyal 
SAR 

Turkish 
Lira 
TRY 

Iraqui 
Dinar 
IQD 

Egyptian 
Pound 
LE 

P&L in CAD 

$63,360 

$1,999 

$19,027 

$213,937 

$1,238 

$2,245 

$31,501 

Equity in CAD 

$46,569 

$1,469 

$13,985 

$157,244 

$910 

$1,650 

$23,154 

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 

Saudi 
Riyal 
SAR 

Turkish 
Lira 
TRY 

Iraqui 
Dinar 
IQD 

Egyptian 
Pound 
LE 

P&L in CAD 

$36,150 

$17,662 

$25,258 

$56,577 

Equity in CAD 

$26,570 

$12,981 

$18,564 

$41,584 

$22 

$16 

$Nil 

$141,840 

$Nil 

$104,252 

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. 

The aging of trade accounts receivable are as follows: 

December 31,  

Neither past due nor impaired 

Current 

30 – 60 days 

61 – 90 days 

90 – 180 days 

Past due but not impaired 

Greater than 180 days 

2023   

2022 

$ 

2,983,147  $ 

2,230,177 

2,113,346 

203,030 

337,372 

311,791 

326,625 

199,960 

212,760 

119,737 

$ 

5,847,655  $ 

3,188,290 

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. 

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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 continuously reviews both 
actual and forecasted cash flows to ensure that 
the Corporation has appropriate capital capacity. 

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 following table summarizes the amount of 
contractual undiscounted future cash flow 
requirements for financial instruments as at 
December 31, 2023: 

Contractual obligations   

2023   

2022   

2026 

2027 and after  

Total 

Operating line of credit 

$ 

298,743  $ 

Accounts payable 
and accrued liabilities 

6,999,324  

–  $ 
–   

–  $ 

– 

–  $ 

298,743 

– 

6,999,324 

Operating lease 

Long-term debt 

Loans payable 

242,820 

122,748 
493,767  

167,813 
6,635,628  
–   

110,260 

18,500 

539,393 

– 

– 

– 

– 

6,758,376 

493,767 

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. 

The aging of trade accounts payable are as follows: 

December 31, 

Neither past due nor impaired 

Current 

30 – 60 days 

61 – 90 days 

90 – 180 days 

Greater than 180 days 

2023   

2022 

$ 

3,185,918  $ 

696,460 

39,432 

  2,729 

151,434 

612,044 

74,446 

40,653 

137,668 

539,614 

$ 

3,991,557  $ 

1,488,841 

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Capital management 

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, 2023, 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, 2023. Also, no changes were 
made in the objectives, policies, or processes during 
the year ending December 31, 2023. 

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)  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; 

December 31, 

2024 

2025 

2026 

2027 and thereafter 

Legal claim contingency 

(ii)  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. 

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. 

29. 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 $3,000 
for the periods from 2022 to 2028. 

2023 

$ 

242,820 

167,813 

110,260 

18,500 

$ 

539,393 

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. The Corporation was unable to renew its Directors and Officers insurance. In March 2022, the 
corporation was unable to renew its Directors and officers insurance. Subsequent to year end, in April 2024, 
the corporation submitted an application for Directors and officers insurance. 

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Annual Report 2023 

30. 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 
Boardapproved 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 $25,147 (2022: $NIL) 
under these contracts. 

31. EVENTS AFTER THE REPORTING YEAR 

a)   On March 18, 2023, the Corporation closed a 

consolidation of its outstanding common shares 
on the basis of one (1) post-consolidation Share 
for every five (5) pre-consolidation Shares. The 
Consolidation was approved by shareholders at 
the annual and special meeting of shareholders 
held on July 7, 2023. Shares began trading on a 
consolidated basis on the TSX Venture 
Exchange on March 20, 2024. 

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Annual Report 2023 

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 

Odyssey Trust Company 
702 - 67 Yonge Street 
Toronto, Ontario M5E 1J8 
Telephone: 1-888-290-1175 
https://odysseytrust.com 

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 

74 

International 
Work 

Stock Exchange Listing 

The TSX Venture 
Exchange Trading Symbol: 
NCI 

Investor Relations 
Adam Zaghloul 
Vice President - Strategy & Planning 
adam@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