LED Medical Diagnostics Inc.
TSX VENTURE : LMD
OTCQX : LEDIF
FRANKFURT : LME

LED Medical Diagnostics Inc.

May 02, 2013 22:21 ET

LED Medical Diagnostics Reports 2012 Fourth Quarter and Full-Year Financial Results

Company restates prior year financial statements

BURNABY, BRITISH COLUMBIA--(Marketwired - May 2, 2013) - LED Medical Diagnostics Inc. (TSX VENTURE:LMD)(OTCQX:LEDIF)(FRANKFURT:LME) ("LED" or the "Company") today announced its financial results for the fourth quarter and full year ended December 31, 2012, reported in United States dollars and in accordance with International Financial Reporting Standards ("IFRS"). The Company's results are presented in comparison to the three months and twelve months ended December 31, 2011, also in accordance with IFRS which have been restated due to the Company's transition to United States dollar ("U.S.") functional and reporting currency and for the revision of its revenue recognition policy pertaining to sales made to Henry Schein Inc. All balances are expressed in U.S. dollars unless otherwise stated.

Financial Highlights

  • Revenues for fiscal 2012 were approximately $6.3 million, an 11% increase over fiscal 2011
  • Revenues for Q4 2012 were approximately $1.4 million, which is consistent with Q4 2011
  • EBITDA(1) for fiscal 2012 of ($728,000) and Q4 2012 of ($84,000) compared to 2011 comparable periods to approximately ($2.5) million and ($631,000), respectively.

"During late fiscal 2012, we terminated our exclusive distribution relationship with Henry Schein Inc. During the same time frame we reached an agreement with DenMat Holdings, LLC ("Denmat") to assume the role of exclusive manager of LED's global distribution strategy. The shift in alliance from Henry Schein to DenMat caused a temporary disruption to our activities in the marketplace. As a result of the transition in our sales and marketing activities to our new distribution partner in late 2012, the Company's revenues were lower than anticipated but still resulted in increase from prior year," stated Peter Whitehead, LED Founder and Chief Executive Officer. "With the DenMat relationship now in place, we expect to see an aggressive sales and marketing program working at full pace by mid 2013 which is expected to result in increased future revenue after 2013. The Denmat relationship should allow the Company's financial situation to improve significantly in the longer term by optimizing our sales and marketing efforts. Our optimism is further buoyed by our experience that demand for the VELscope Vx appears to remain strong."

Three Month Comparative Results

For the three months ended December 31, 2012, the Company reported revenues of approximately $1.4 million which is consistent with approximately $1.4 million for the fourth quarter of 2011. Revenues were lower in the three months ended December 31, 2012 compared to revenues of approximately $2.9 million for the three months ended September 30, 2012.

Gross margins(2) were 46% during the three months ended December 31, 2012, which was higher than the three months ended December 31, 2011 of 44%. The Company's margins vary depending on the mix of equipment versus disposables sales for any given period.

Total operating expenses (excluding other operating expenses and mark to market adjustments on Canadian dollar denominated warrants)(3) for the three months ended December 31, 2012 of approximately $726,000 were 49% lower than the three months ended December 31, 2011 of approximately $1.4 million.

EBITDA for the three months ended December 31, 2012 was approximately ($84,000) compared to approximately ($630,000) for the three months ended December 31, 2011. The Company reported a net loss of approximately $175,000 for the three months ended December 31, 2012 compared to a net loss of approximately $3.1 million for the three months ended December 31, 2011.

Twelve Month Comparative Results

For the year ended December 31, 2012 the Company reported revenues of approximately $6.3 million as compared to approximately $5.7 million for the year ended December 31, 2011, an increase of 11% over the comparable period. The increase is attributable to the increased sales by Henry Schein to its end customers in during the first half of fiscal 2012 in addition to sales orders received from the Company's new distribution partner, Denmat in late fiscal 2012.

Gross margins were 57% during the year ended December 31, 2012 which was higher than the gross margins of 52% for the year ended December 31, 2011. The Company's margins vary depending on the mix of equipment versus disposables sales for any given period.

Total operating expenses (excluding other operating expenses and mark to market adjustments on Canadian dollar denominated warrants) for the year ended December 31, 2012 of approximately $4.4 million were 24% lower than the year ended December 31, 2011 of approximately $5.7 million.

EBITDA for the year ended December 31, 2012 was approximately ($728,000) compared to approximately ($2.5 million) for the year ended December 31, 2011. The Company reported a net loss of approximately $867,000 for its fiscal 2012 compared to a net loss of approximately $4.1 million for the year ended December 31, 2011.

Cash was approximately $970,000 (inclusive of the net proceeds from the approximately $1.1 million equity financing completed by the Company in late 2012) with negative net working capital of approximately $97,000 as of December 31, 2012 compared to cash of approximately $976,000 with negative net working capital of approximately $356,000 as of December 31, 2011.

Business Highlights

Notable developments and achievements during the fourth quarter included the following:

  • On October 12, 2012, the Corporation announced that, subject to TSX Venture Exchange approval, it has agreed to extend the term of certain warrants to acquire a total of 5,599,897 common shares of the Company that are scheduled to expire between October 31, 2012 and February 22, 2013. The extension ranges from between three to seven months. As a result of the extension, all outstanding series of LED warrants will now expire on May 22, 2013, other than warrants previously granted to one of LED''s product distributors. The warrants were originally issued between July 9, 2010 and February 22, 2011 when the Company was a private issuer, and have exercise prices ranging from $0.65 to $1.00 per common share.
  • On November 7, 2012, the Corporation announced that its VELscope® enhanced oral assessment technology has been used to conduct an estimated 25 million oral cancer exams since its 2006 introduction.
  • On November 20, 2012, the Corporation announced that the VELscope Vx Enhanced Oral Assessment System, the market-leading early-stage oral cancer detection device approved by the FDA, Health Canada, and European regulators, has been chosen by Dentistry Today magazine for one of its annual "Top 50 Technology Products" awards. Dentistry Today''s "Top 50 Technology Products" represent the best and brightest technologies available to dental professionals each year. The recipients are determined based on input from readers of Dentistry Today.
  • On December 21, 2012, the Corporation announced that it raised CDN $1,162,500 on a planned minimum raise of one million dollars.

The Audit Committee of the Company has reviewed the contents of this news release.

Non-GAAP Measures

The following and preceding discussion of financial results includes reference to Gross Margin, EBITDA and Working Capital, which are all non-IFRS financial measures. The measure of gross margin is provided as management believes this is a good indicator in evaluation the operating performance of the Company. EBITDA is defined as operating loss less other operating expenses. The measure is provided as a proxy for the cash earnings from the operations of the business as operating loss for the Company includes non-cash amortization and depreciation expense. The measure of working capital is provided as management believes this is a good indicator of the operating liquidity available to the Company.

Change in Functional and Reporting Currency

The Company has changed the functional currency of the parent company entity from Canadian dollar to United States dollar as of January 1, 2012 to reflect the transition from an entity with some operations to a holding company for the group companies upon the completion of the reverse takeover ("RTO") in November 2011. This change was effected prospectively from January 1, 2012 onwards.

The Company also changed their reporting currency on December 31, 2012 from Canadian dollars to U.S. dollars given LED's listing on the OTC stock exchange in the United States and on the Frankfurt Stock Exchange in early 2013 reflective of LED becoming a global Company. This change also results in increased comparability for LED to other global technology companies.

Revision to Revenue Recognition Policy

The Company also revised its prior revenue recognition policy pertaining to the sales of its product in fiscal 2011 and 2012 to Henry Schein from "sell to this distributor" to "sell through this distributor to their end customers". While legal title with the risks and rewards of ownership is transferred to Henry Schein as at the date at which the Company's products are sold to this distributor, the participation by the Company in the provision to this distributor of special market development pricing adjustments pertaining to LED product to increase overall market share of the Company results in the Company not being able to reasonably estimate such marketing oriented expenses at the time of sale and shipment to Henry Schein resulting in the required deferral of revenue recognition until all such marketing oriented expenses are fully determinable. There is no such issue in the Company's distribution arrangement with Denmat resulting in the Company recognizing revenue at the time of sale and shipment to Denmat. As a result, the financial results for prior periods have been restated.

Forward-Looking Statements

This press release contains statements which, to the extent that they are not recitations of historical fact, may constitute forward-looking information under applicable Canadian securities legislation. Such forward-looking statements or information includes financial and other projections as well as statements regarding the Corporation's future plans, objectives, performance, revenues, growth, profits, operating expenses or the Corporation's underlying assumptions and the Company's intention to expand its technology beyond dental applications. The words "may", "would", "could", "will", "likely", "expect", "anticipate", "intend", "plan", "forecast", "project", "estimate" and "believe" or other similar words and phrases may identify forward-looking statements or information. Persons reading this Management's Discussion and Analysis are cautioned that such statements or information are only predictions, and that the Corporation's actual future results or performance may be materially different. Factors that could cause actual events or results to differ materially from those suggested by these forward-looking statements include, but are not limited to: economic conditions; dilution; limited history of profits and operations; operational risk; distributor risks; working capital; potential conflicts of interest; speculative investment; volatility of stock price; intellectual property risks; disruptions in production; reliance on key personnel; seasonality; management's estimates; development of new customers and products risks; stock price volatility risk; sales and marketing risk; competitors and competition risk; regulatory requirements; reliance on few suppliers; reliance on subcontractors; operating cost and quarterly results fluctuations; fluctuations in exchange rates; product liability and medical malpractice claims; access to credit and additional financing; taxation; market acceptance of the Corporation's products and services; customer and industry analyst perception of the Corporation and its technology vision and future prospects; technological change, new products and standards; risks related to acquisitions and international expansion; reliance on large customers; concentration of sales; international operations and sales; management of growth and expansion; dependence upon key personnel and hiring; the Corporation not adequately protecting its intellectual property; risks related to product defects and product liability; and including, but not limited to, other factors described in the Corporation's reports filed on SEDAR, including its financial statements and management's discussion and analysis for the year ended December 31, 2012.

In drawing a conclusion or making a forecast or projection set out in the forward-looking information, the Corporation takes into account the following material factors and assumptions in addition to the above factors: the Corporation's ability to execute on its business plan; the acceptance of the Corporation's products and services by its customers; the timing of execution of outstanding or potential customer contracts by the Corporation; the sales opportunities available to the Corporation; the Corporation's subjective assessment of the likelihood of success of a sales lead or opportunity; the Corporation's historic ability to generate sales leads or opportunities; and that sales will be completed at or above the Corporation's estimated margins. This list is not exhaustive of the factors that may affect the Corporation's forward-looking information. These and other factors should be considered carefully and readers should not place undue reliance on such forward-looking information. All forward-looking statements made in this Annual Information Form (AIF) are qualified by this cautionary statement and there can be no assurance that actual results or developments anticipated by the Corporation will be realized. The Corporation disclaims any intention or obligation to update or revise forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.

About LED Medical Diagnostics Inc.

Founded in 2003 and headquartered in Burnaby, British Columbia, Canada, LED Medical Diagnostics Inc. is a leading developer of LED-based visualization technologies for the medical industry. The Company is currently listed on the Toronto Stock Exchange (TSX-V) under the symbol "LMD", the OTCQX under the symbol "LEDIF", as well as the Frankfurt Stock Exchange under the symbol "LME". For more information, visit www.ledmd.com. Through its wholly-owned subsidiary, LED Dental Inc., the company manufactures the VELscope® Vx Enhanced Oral Assessment System, the first system in the world to apply tissue fluorescence visualization technology to the oral cavity. VELscope® Vx devices are now used to conduct more screenings for oral cancer and other oral tissue abnormalities than any other adjunctive device. For more information, visit www.leddental.com.

LED MEDICAL DIAGNOSTICS INC.
Consolidated Statements of Financial Position
(Expressed in U.S. Dollars)
As at
December 31, 2012
As at
December 31, 2011 (Restated)
ASSETS
CURRENT
Cash $ 969,584 $ 975,772
Restricted cash 5,026 24,582
Receivables 1,514,577 298,722
Inventory 296,467 770,617
Inventory held by the distributor 518,400 467,353
Prepayments 69,300 68,597
3,373,354 2,605,643
PROPERTY AND EQUIPMENT 28,015 45,930
PATENTS AND INTELLECTUAL PROPERTY 88,167 113,972
$ 3,489,536 $ 2,765,545
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Trades payable and accrued liabilities $ 1,689,009 $ 1,398,985
Due to shareholders - 102,796
Advances from the distributor 1,778,112 1,457,362
Current portion of finance lease obligation 2,982 2,410
3,470,103 2,961,553
LONG TERM LIABILITIES
Long term portion of finance lease obligation 6,879 9,861
Warrants 140,467 -
3,617,449 2,971,414
SHAREHOLDERS' EQUITY (DEFICIT)
Share capital 24,658,241 23,713,352
Stock-based payments reserve 62,495 62,495
Warrants reserve 277,748 277,748
Accumulated other comprehensive income 474,458 474,458
Deficit (25,600,855 ) (24,733,922 )
(127,913 ) (205,869 )
$ 3,489,536 $ 2,765,545
LED MEDICAL DIAGNOSTICS INC.
Consolidated Statements of Operations and Deficit and Comprehensive Loss
(Expressed in U.S. Dollars)

For the
Three months ended December 31,
2012 (Unaudited)
Three months ended December 31,
2011 (Unaudited & restated)
Year ended
December 31,
2012
Year ended December 31,
2011 (Restated)
SALES $ 1,389,994 $ 1,427,136 $ 6,312,754 $ 5,707,670
COST OF GOODS SOLD 747,510 803,000 2,745,477 2,760,253
642,484 624,136 3,567,277 2,947,417
EXPENSES
Sales and marketing 348,950 966,689 2,564,798 3,696,533
Research and development 94,504 148,974 523,492 746,525
Administration 282,533 298,498 1,207,122 1,155,195
Mark to market adjustments on Canadian dollar denominated warrants 14,558 - 3,843 -
Other operating expenses 77,730 63,337 59,776 129,561

818,275
1,477,498
4,359,031
5,727,814
OPERATING LOSS (175,791 ) (853,362 ) (791,754 ) (2,780,397 )
OTHER INCOME (EXPENSES)
Foreign exchange gain (loss) 1,162 (446,606 ) (64,511 ) 342,513
Interest income 81 2,568 389 2,568
Loss on disposal of assets - - (702 ) -
Miscellaneous income (expenses) 10 (106,813 ) 2,485 4,840
Amalgamation transaction costs - (1,690,590 ) - (1,690,590 )
1,253 (2,241,441 ) (62,339 ) (1,340,669 )
NET LOSS BEFORE INCOME TAXES (174,538 ) (3,094,803 ) (854,093 ) (4,121,066 )
INCOME TAXES - 28,483 12,840 28,483
NET LOSS FOR THE PERIOD $ (174,538 ) $ (3,123,286 ) $ (866,933 ) $ (4,149,549 )
OTHER COMPREHENSIVE INCOME (LOSS) - 500,091 - (247,965 )
COMPREHENSIVE LOSS FOR THE PERIOD $ (174,538 ) $ (2,623,195 ) $ (866,933 ) $ (4,397,514 )
NET LOSS PER SHARE - BASIC AND DILUTED $ (0.00 ) $ (0.09 ) $ (0.02 ) $ (0.13 )
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED 36,840,943 33,493,375 36,462,905 31,495,226
LED MEDICAL DIAGNOSTICS INC.
Consolidated Statements of EBITDA and Loss
(Expressed in U.S. Dollars)
For the Three months ended December 31,
2012 (Unaudited)
Three months ended December 31,
2011 (Unaudited & restated)
Year ended
December 31,
2012
Year ended December 31,
2011 (Restated)
SALES $ 1,389,994 $ 1,427,136 $ 6,312,754 $ 5,707,670
COST OF GOODS SOLD 747,510 643,450 2,745,477 2,600,703
642,484 783,686 3,567,277 3,106,967
EXPENSES
Sales and marketing 348,950 966,689 2,564,798 3,696,533
Research and development 94,504 148,974 523,492 746,525
Administration 282,533 298,498 1,207,122 1,155,195
725,987 1,414,161 4,295,412 5,598,253
EBITDA (83,503 ) (630,475 ) (728,135 ) (2,491,286 )
OTHER INCOME (EXPENSES)
Warrants issued for distributor commitment - (159,550 ) - (159,550 )
Mark to market adjustments on Canadian dollar denominated warrants (14,558 ) - (3,843 ) -
Other operating expenses (77,730 ) (63,337 ) (59,776 ) (129,561 )
Foreign exchange gain (loss) 1,162 (446,606 ) (64,511 ) 342,513
Interest income 81 2,568 389 2,568
Loss on disposal of assets - - (702 ) -
Miscellaneous income (expenses) 10 (106,813 ) 2,485 4,840
Amalgamation transaction costs - (1,690,590 ) - (1,690,590 )
(91,035 ) (2,464,328 ) (125,958 ) (1,629,780 )
NET LOSS BEFORE INCOME TAXES (174,538 ) (3,094,803 ) (854,093 ) (4,121,066 )
INCOME TAXES - 28,483 12,840 28,483
NET LOSS FOR THE PERIOD $ (174,538 ) $ (3,123,286 ) $ (866,933 ) $ (4,149,549 )
LED MEDICAL DIAGNOSTICS INC.
Consolidated Statements of Changes in Shareholders' Equity (Deficit)
(Expressed in U.S. Dollars)


Number of Shares


Share Capital
$
Stock-based Payments Reserves
$

Warrants Reserve
$


Deficit
$
Other Comprehensive Income
$
Total Shareholder's Equity
$
Balance, January 1, 2012 36,335,508 $ 23,713,352 $ 62,495 $ 277,748 $ (24,733,922 ) $ 474,458 $ (205,869 )
Issued for cash 4,650,000 1,170,223 - - - - 1,170,223
Share issuance costs - (88,710 ) - - - - (88,710 )
Reclassification of warrants - (136,624 ) - - - - (136,624 )
Total comprehensive loss for the year - - - -
(866,933
) - (866,933 )
Balance, December 31, 2012 40,985,508 $ 24,658,241 $ 62,495 $ 277,748 $ (25,600,855 ) $ 474,458 $ ( 127,913 )
Balance, January 1, 2011 (Restated) 29,178,524 $ 18,900,047 $ 1,524,542 $ 118,198 $ (22,018,168 ) $ 722,423 $ (752,958 )
Issued for cash 3,451,209 2,545,102 - - - - 2,545,102
Issued upon exercise of stock options 175,000 87,535 - - - - 87,535
Issued upon exercise of warrants 230,769 147,493 - - - - 147,493
Consideration for amalgamation 3,000,006 1,805,787 - - - - 1,805,787
Finder's Fee 300,000 180,578 - - - - 180,578
Reclassification of exercise of stock options - 90,747 (90,747 ) - - - -
Warrants issued for distributor commitment - - - 159,550 - - 159,550
Issuance of stock options - - 62,495 - - - 62,495
Reclassification of expired stock options - - (1,433,795 ) - 1,433,795 - -
Share issuance costs - (43,937 ) - - - - (43,937 )
Other comprehensive income - - - - - (247,965 ) (247,965 )
Net loss for the year - - - - (4,149,549 ) - (4,149,549 )
Balance, December 31, 2011 (Restated)
36,335,505
$ 23,713,352 $ 62,495 $ 277,748 $ (24,733,922 ) $ 474,458 $ (205,869 )
LED MEDICAL DIAGNOSTICS INC.
Consolidated Statements of Cash Flows
(Expressed in U.S. Dollars)
For the Three months ended December 31,
2012 (Unaudited)
Three months ended December 31,
2011 (Unaudited and Restated)
Year ended
December 31,
2012
Year ended December 31,
2011 (Restated)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period $ (174,538 ) $ (3,123,286 ) $ (866,933 ) $ (4,149,549 )
Adjustments to reconcile net loss to net cash flows:
Depreciation of equipment 8,107 13,760 33,971 41,260
Amortization of intangible assets 6,451 (12,918 ) 25,805 25,805
Loss on disposal of assets - - 702 -
Warrants issued to distributor - 159,550 - 159,550
Accrued interest on shareholder loans - 6,159 2,614 53,500
Amalgamation transaction costs - 1,690,590 - 1,690,590
Mark to market adjustments on Canadian dollar denominated warrants 77,730
-
3,843 -
Stock-based compensation - 62,495 - 62,495
Unrealized foreign exchange gain (loss), net - 500,091 - (247,965 )
(82,250 ) (703,559 ) (799,998 ) (2,364,314 )
Changes in working capital assets and liabilities:
Receivables (624,913 ) 202,645 (1,215,855 ) (36,117 )
Inventory 153,538 223,601 474,150 (515,135 )
Inventory held by distributor - (171,611 ) (51,047 ) (467,353 )
Investment tax credits recoverable - - - 344,149
Prepayments 42,956 140,081 (703 ) 35,015
Trades payable and accrued liabilities 4,268 (875,227 ) 290,024 (48,065 )
Income taxes payable - - - (10,534 )
Advances held for distributor - 535,139 320,750 1,457,362
Deferred income - - - (3,196 )
Changes in working capital assets and liabilities (424,151 ) 54,628 (182,681 ) 756,126
Cash flows used in operating activities (506,401 ) (648,931 ) (1,630,730 ) (1,608,188 )
CASH FLOWS FROM INVESTING ACTIVITIES
Cash and cash equivalents acquired on amalgamation - 270,738 - 270,737
Purchase of equipment - (10,242 ) (16,758 ) (56,864 )
Restricted cash 59 - 19,556 -
Cash flows provided by investing activities 59 260,496 2,798 213,873
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common shares, net of issuance costs 1,081,513 1,148,434 1,081,513 2,736,191
Repayment of capital lease obligation (652 ) 30 (2,410 ) (1,947 )
Proceeds (Repayment) of shareholder loans - - (105,410 ) (628,670 )
Cash flows provided by financing activities 1,080,861 1,148,464 973,693 2,105,574
CHANGE IN CASH AND CASH EQUIVALENTS 574,519 760,029 (6,188 ) 711,259
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 395,065 215,743 975,772 264,513
CASH AND CASH EQUIVALENTS - END OF PERIOD $ 969,584 $ 975,772 $ 969,584 $ 975,772

Restatement

In the preparation of the Company's consolidated financial statements for the year ended December 31, 2012, management identified historical errors as follows:

  • the functional currency of its subsidiary, LED Dental Inc. should have been U.S. dollars rather than Canadian dollars from June 1, 2006, and,
  • revenue recognition for a distributor's agreement which had previously been recognized upon shipment to the distributor has been corrected to be recognized upon sell through to the end customer.

As a result, the Company has restated its consolidated financial statements for the year ended December 31, 2011.

The following table summarizes the impact of the restatement adjustments on the Company's previously reported consolidated financial statements:



As reported

Correcting adjustment


As restated
Consolidated statements of financial position
Inventory $ 694,347 $ 76,270 $ 770,617
Inventory held by Distributor $ - $ 467,353 $ 467,353
Prepayments $ 71,723 $ (3,126 ) $ 68,597
Property and equipment $ 45,844 $ 86 $ 45,930
Advances from the distributor $ - $ 1,457,362 $ 1,457,362
Current portion of finance lease obligation $ 2,437 $ (27 ) $ 2,410
Long term portion of finance lease obligation $ 9,971 $ (110 ) $ 9,861
Accumulated other comprehensive income $ - $ 474,458 $ 474,458
Deficit, beginning of year $ (21,339,350 ) $ (678,818 ) $ (22,018,168 )
Deficit, end of year $ (23,342,822 ) $ (1,391,100 ) $ (24,733,922
Consolidated statements of loss and comprehensive loss
Sales $ 7,165,032 $ (1,457,362 ) $ 5,707,670
Cost of goods sold $ 3,227,606 $ (467,353 ) $ 2,760,253
Depreciation $ 43,266 $ (2,006 ) $ 41,260
Foreign exchange gain (loss) $ 15,336 $ 327,177 $ 342,513
Net loss for the year $ (3,488,723 ) $ (660,826 ) $ (4,149,549 )
Other comprehensive income $ - $ (277,141 ) $ (277,141 )
Comprehensive loss for the year $ (3,488,723 ) $ (937,967 ) $ (4,426,690 )
Loss per share - basic and diluted $ (0.11 ) $ (0.02 ) $ (0.13 )
Consolidated statements of shareholders' equity (deficit)
Deficit, beginning of year $ (21,339,350 ) $ (678,818 ) $ 22,018,168
Accumulated other comprehensive income $ - $ 474,458 $ 474,458
Deficit, end of year $ (23,342,822 ) $ (1,391,100 ) $ (24,733,922

Impact on Consolidated Statements of Cash Flows

The errors noted above related to an overstatement of revenue and cost of goods sold and understatement of foreign exchange gain/loss and other comprehensive income on the consolidated statements of loss and comprehensive loss, the impact of the errors on the consolidated statements of cash flows are as follows:


Consolidated statements of cash flows

As reported

Correction

As restated
Unrealized foreign exchange gain (loss), net $ - $ (247,965 ) $ (247,965 )

(1) Non-IFRS measure that does not have a standardized meaning and may not be comparable to a similar measure disclosed by other issuers. This measure does not have a comparable IFRS measure. EBITDA referenced here relates to operating loss less other operating expenses and Mark to market adjustments on Canadian dollar denominated warrants. Please refer to the reconciliation of EBITDA to reported financial results attached to this press release.

(2) Non-IFRS measure that does not have a standard meaning and may not be comparable to a similar measure disclosed by other issuers. Gross margin referenced here relates to revenues less cost of sales.

(3) Non-IFRS measure that does not have a standard meaning and may not be comparable to a similar measure disclosed by other issuers. Total expenses excludes other operating expenses and Mark to market adjustments on Canadian dollar denominated warrants.

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