Omni-Lite Industries Canada Inc.
Unaudited Condensed Consolidated Financial Statements For the interim three and nine months ended September 30, 2024, and 2023
(in United States Dollars)
Contents | ||
Notice to Reader | 2 | |
Unaudited Condensed Consolidated Financial Statements | ||
Statements of Financial Position | 3 | |
Statements of Income (Loss) and Comprehensive Income (Loss) | 4 | |
Statements of Changes in Shareholders' Equity | 5 | |
Statements of Cash Flows | 6 | |
Notes to Unaudited Condensed Consolidated Financial Statements | 7 - 18 |
Omni-Lite Industries Canada Inc. Condensed Consolidated Financial Statements For the interim three and nine months ended September 30, 2024, and 2023
United States Dollars Unaudited
UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
In accordance with National Instrument 51-102 released by the Canada Securities Administrators, the Company discloses that its auditors have not reviewed the unaudited condensed consolidated financial statements for the three months ended September 30, 2024, and 2023.
NOTICE TO THE READER OF THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The unaudited condensed consolidated financial statements of Omni-Lite Industries Canada Inc. including the consolidated statements of financial position as at September 30, 2024 and 2023 and the consolidated statements of income (loss) and comprehensive income (loss), changes in shareholders' equity, and cash flows for the three and nine months ended September 30, 2024 and 2023 are the responsibility of the Company's management.
These unaudited condensed consolidated financial statements have not been reviewed on behalf of the shareholders by the independent external auditors of the Company, MNP LLP.
The unaudited condensed consolidated financial statements have been prepared by management and include the selection of appropriate accounting principles, judgments and estimates necessary to prepare these unaudited condensed consolidated financial statements in accordance with IAS 34, Interim Financial Reporting as issued by the International Accounting Standards Board ("IASB").
"David Robbins" signed | "Roger Dent" signed |
David Robbins | Roger Dent |
Director and Chief Executive Officer | Director |
Cerritos, California, USA | Cerritos, California, USA |
November 5, 2024 | November 5, 2024 |
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Omni-Lite Industries Canada Inc. Condensed Consolidated Financial Statements For the interim three and nine months ended September 30, 2024, and 2023
United States Dollars Unaudited
Consolidated Statements of Financial Position
Note | September 30, 2024 | December 31, 2023 | |||
Assets | |||||
Current | |||||
Cash | $ | 2,559,229 | $ | 1,108,029 | |
Accounts Receivable | 2,487,871 | 2,225,700 | |||
Inventory | 3 | 4,498,096 | 4,700,064 | ||
Prepaid Expenses | 227,926 | 181,826 | |||
Total Current Assets | $ | 9,773,122 | $ | 8,215,619 | |
Long-Term | |||||
Investment | 4 | 8,342,432 | 1,341,108 | ||
Property, Plant and Equipment, net | 5 | 9,333,436 | 10,182,244 | ||
Due from Related Parties | 7 | 383,697 | 852,338 | ||
Intangible Assets | 6 | 521,667 | 562,568 | ||
Deposits | 55,946 | 56,546 | |||
Total Assets | $ | 28,410,301 | $ | 21,210,423 | |
Liabilities | |||||
Current | |||||
Accounts Payable and Accrued | |||||
Liabilities | $ | 1,231,026 | $ | 1,555,392 | |
Lease Liability | 8 | 613,545 | 324,334 | ||
Deferred Revenue | 24,866 | 109,349 | |||
Total Current Liabilities | $ | 1,869,437 | 1,989,075 | ||
Long-Term | |||||
Lease Liability | 8 | 5,100,145 | 5,659,009 | ||
Deferred Tax Liability | 318,419 | 55,563 | |||
Total Liabilities | $ | 7,288,001 | $ | 7,703,647 | |
Shareholders' Equity | |||||
Share Capital | 9 | 11,252,443 | 11,252,443 | ||
Contributed Surplus | 10 | 2,291,896 | 2,251,896 | ||
Retained Earnings | (126,430) | (720,195) | |||
Accumulated Other Comprehensive | |||||
Income (Loss) | 7,704,391 | 722,632 | |||
Total Shareholders' Equity | $ | 21,122,300 | $ | 13,506,776 | |
Total Liabilities and Shareholders' Equity | $ | 28,410,301 | $ | 21,210,423 |
The accompanying notes are an integral part of these consolidated financial statements.
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Omni-Lite Industries Canada Inc. Condensed Consolidated Financial Statements For the interim three and nine months ended September 30, 2024, and 2023
United States Dollars Unaudited
Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)
For the three and nine months ended Sept 30 Note | For the nine | For the nine | For the three | For the three | |||||||
month period | month period | month period | month period | ||||||||
ended | Sept | ended | Sept | ended | ended | ||||||
30, 2024 | 30, 2023 | Sept 30, 2024 | Sept 30, 2023 | ||||||||
Revenue | $ | 12,385,125 | $ | 9,096,862 | $ | 3,778,058 | $ | 3,322,023 | |||
Cost of goods sold | 3 | 9,760,394 | 7,452,950 | 3,268,441 | 2,630,348 | ||||||
Gross margin | $ | 2,624,731 | $ | 1,643,912 | $ | 509,617 | $ | 691,675 | |||
Overhead expenses | |||||||||||
Selling, general and administrative | 974,145 | 1,310,982 | 326,410 | 379,601 | |||||||
Share-based compensation | 9 | 40,000 | 66,318 | 40,000 | 22,106 | ||||||
Amortization of intangible assets | 6 | 37,484 | 48,500 | 12,461 | 27,176 | ||||||
Total overhead expenses | 1,051,629 | 1,425,800 | 378,871 | 428,883 | |||||||
Research and product design | 232,968 | 251,449 | 64,282 | 105,436 | |||||||
(Loss)/Income from operations | $ | 1,340,134 | $ | (33,337) | $ | 66,464 | $ | 157,356 | |||
Other income (expense) | |||||||||||
Interest income | 41,356 | 74,846 | 14,196 | 23,021 | |||||||
Interest expense | 8 | (411,284) | (417,538) | (136,995) | (137,589) | ||||||
Other income | 99,464 | 439,716 | 49,464 | 100,000 | |||||||
Loss before income taxes | $ | 1,069,671 | $ | 63,688 | $ | (6,871) | $ | 142,788 | |||
Income tax expense (recovery) | |||||||||||
Current | 429,030 | 131,886 | 78,537 | 52,544 | |||||||
Deferred | 46,876 | 318,687 | 22,055 | 97,830 | |||||||
475,906 | 450,574 | 100,592 | 150,374 | ||||||||
Net income/(loss) | $ | 593,765 | $ | (386,885) | $ | (107,463) | $ | (7,586) | |||
Other comprehensive income/(loss) | |||||||||||
Translation of foreign subsidiary | (19,565) | 2,081 | 102,059 | (95,083) | |||||||
Gain on investment | 4 | 7,001,324 | 532,719 | 5,892,350 | 113,328 | ||||||
Comprehensive income | $ | 7,575,523 | $ | 147,915 | $ | 5,886,946 | $ | 10,659 | |||
Income/(loss) per share | |||||||||||
- basic | 10 | 0.04 | (0.03) | (0.01) | (0.00) | ||||||
- diluted | 10 | 0.03 | (0.03) | (0.01) | (0.00) | ||||||
Weighted average shares outstanding | |||||||||||
- basic | 13 | 15,412,564 | 15,412,564 | 15,412,564 | 15,412,564 | ||||||
- diluted | 13 | 17,827,564 | 15,412,564 | 17,827,564 | 15,412,564 |
The accompanying notes are an integral part of these consolidated financial statements.
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Omni-Lite Industries Canada Inc. Condensed Consolidated Financial Statements For the interim three and nine months ended September 30, 2024, and 2023
United States Dollars Unaudited
Consolidated Statements of Changes in Shareholders' Equity
Accumulated | ||||||||||||||||
Other | ||||||||||||||||
Share | Contributed | Retained | Comprehensive | Shareholders' | ||||||||||||
Note | Capital | Surplus | Earnings | Income/(Loss) | Equity | |||||||||||
Balance at | ||||||||||||||||
December 31, | ||||||||||||||||
2022 | $ | 11,252,443 | $ | 2,185,578 | $ | (810,422) | $ | (209,905) | $ | 12,417,694 | ||||||
Share-based | ||||||||||||||||
compensation | 9 | - | 66.319 | - | - | 66,319 | ||||||||||
Net loss | - | - | (386,885) | - | (386,885) | |||||||||||
Gain on | ||||||||||||||||
investment | 4 | - | - | - | 532,719 | 532,719 | ||||||||||
Cumulative | ||||||||||||||||
translation | ||||||||||||||||
adjustment | - | - | - | 2,080 | 2,080 | |||||||||||
Shares | ||||||||||||||||
issuance | 9 | - | - | - | - | - | ||||||||||
Balance at | ||||||||||||||||
September | ||||||||||||||||
30, 2023 | $ | 11,252,443 | $ | 2,251,897 | $ | (1,197,307) | $ | 324,894 | $ | 12,631,927 | ||||||
Accumulated | ||||||||||||||||
Other | ||||||||||||||||
Share | Contributed | Retained | Comprehensive | Shareholders' | ||||||||||||
Note | Capital | Surplus | Earnings | Income/(Loss) | Equity | |||||||||||
Balance at December | ||||||||||||||||
31, 2023 | $ | 11,252,443 | $ | 2,251,896 | $ | (720,195) | $ | 722,632 | $ | 13,506,776 | ||||||
Share-based | ||||||||||||||||
compensation | 9 | - | 40,000 | - | - | 40,000 | ||||||||||
Net loss | - | - | 593,765 | - | 593,765 | |||||||||||
Gain on investment | 4 | - | - | - | 7,001,324 | 7,001,324 | ||||||||||
Cumulative | ||||||||||||||||
translation | ||||||||||||||||
adjustment | - | - | - | (19,565) | (19,565) | |||||||||||
Shares issuance | 9 | - | - | - | - | - | ||||||||||
Balance at | ||||||||||||||||
September 30, 2024 | $ | 11,252,443 | $ | 2,291,896 | $ | (126,430) | $ | 7,704,391 | $ | 21,122,300 |
The accompanying notes are an integral part of these consolidated financial statements.
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Omni-Lite Industries Canada Inc. Condensed Consolidated Financial Statements For the interim three and nine months ended September 30, 2024, and 2023
United States Dollars Unaudited
Consolidated Statements of Cash Flows
For the three and nine months ended Sept 30 | Note | For the nine | For the nine | For the three | For the three | ||||
month period | month period | month period | month period | ||||||
ended | ended | ended | ended | ||||||
Sept 30, 2024 | Sept 30, 2023 | Sept 30, 2024 | Sept 30, 2023 | ||||||
Cash flows from operating activities | |||||||||
Net Income/(loss) for the period | $ | 593,765 | $ | (386,885) | $ | (107,463) | $ | (7,586) | |
Adjustments for: | |||||||||
Depreciation | 5 | 851,886 | 858,909 | 283,583 | 288,137 | ||||
Inventory reserve | 19,796 | 86,993 | - | - | |||||
Amortization of intangible assets | 6 | 37,484 | 86,391 | 12,461 | 27,176 | ||||
Deferred tax (recovery) expense | 260,999 | 461,059 | 41,837 | 150,374 | |||||
Share-based compensation | 9 | 40,000 | 66,318 | 40,000 | 22,106 | ||||
Lease interest expense | 8 | 411,284 | 417,538 | 136,995 | 137,626 | ||||
$ | 2,215,214 | $ | 1,590,322 | $ | 407,413 | $ | 617,833 | ||
Net change in non-cash working capital items | |||||||||
Accounts receivable | (261,171) | 149,696 | 258,568 | (116,680) | |||||
Inventory | 182,172 | (1,067,701) | 121,906 | (50,457) | |||||
Prepaid expenses | (46,100) | 44,683 | (93,583) | (60,038) | |||||
Accounts payable and accrued liabilities | (324,366) | (12,902) | (37,659) | (100,456) | |||||
Deferred Revenue | (84,458) | 49,800 | (17,013) | 49,800 | |||||
Deposits | 1,332 | (19) | (379) | 617 | |||||
(Decrease)/Increase in cash from operating activities | $ | 1,682,623 | $ | 753,879 | $ | 639,253 | $ | 340,619 | |
Cash flow from investing activities | |||||||||
Purchase of property, plant and equipment | 5 | (86,362) | (126,754) | (3,617) | (85,845) | ||||
Decrease in cash from investing activities | $ | (86,362) | $ | (126,754) | $ | (3,617) | $ | (85,845) | |
Cash flows from financing activities | |||||||||
Employee Receivables | - | 2,000 | - | - | |||||
Repayment of lease liability | 8 | (646,182) | (648,220) | (215,190) | (216,491) | ||||
Sale of investments | 44,417 | 44,417 | |||||||
Relatad parties payments | 458,335 | - | 338,335 | - | |||||
Increase/(Decrease) in cash from financing activities | $ | (143,430) | $ | (646,220) | $ | 167,562 | $ | (216,491) | |
Currency translation | (1,630) | (3,823) | 30,720 | (30,759) | |||||
Increase/(Decrease) in cash | $ | 1,451,200 | $ | (22,918) | $ | 833,918 | $ | 7,524 | |
Cash, beginning of period | $ | 1,108,029 | $ | 1,328,430 | $ | 1,725,311 | $ | 1,297,988 | |
Cash, end of period | $ | 2,559,229 | $ | 1,305,512 | $ | 2,559,229 | $ | 1,305,512 |
The accompanying notes are an integral part of these consolidated financial statements.
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Omni-Lite Industries Canada Inc. Condensed Consolidated Financial Statements For the interim three and nine months ended September 30, 2024, and 2023
United States Dollars Unaudited
Notes to Condensed Consolidated Financial Statements
-
Nature of Operations
Omni-Lite Industries Canada Inc. ("Omni-Lite" or the "Company") was incorporated under the
Laws of the Business Corporations Act of Alberta in 1992. The consolidated financial statements of the Company for the three and nine months ended September 30, 2024, include the accounts of the Company and its wholly owned subsidiaries. The consolidated financial statements were authorized for issue by the Board of Directors on November 7, 2024, its head office, research and development, and production operations are located at 17210 Edwards Road, Cerritos, California, U.S.A, 90703. A corporate, registered office is located at 18 Kings
Street East, Suite 902, Toronto, ON M5C2C4. The Company's core mission is the adaptation of material science for mission critical applications. These products include components for the aerospace, military, specialty automotive and sports and recreational industries. Since the most significant portion of the Company's operations is located in the United States ("U.S.") and its functional currency is U.S. dollars, these consolidated financial statements are presented in U.S. dollars. The Company is listed for trading on the TSX Venture Exchange under the symbol OML and the OTCQX under the symbol OLNCF. - Significant Accounting Policies
These condensed consolidated financial statements have been prepared by management in accordance with International Financial Reporting Standards ("IFRS") as issued by the
International Accounting Standards Board and the International Financial Reporting Interpretations Committee ("IFRIC") in effect at September 30, 2024.
These condensed consolidated financial statements are unaudited and have been prepared in accordance with IAS 34, Interim Financial Reporting.
The significant accounting policies of the Company are the same as those applied in the
Company's annual audited consolidated financial statements for the years ended December
31, 2023, and 2022.These policies have been consistently applied to each of the periods presented. - Estimates and Judgements
The preparation of consolidated financial statements requires management to make estimates and judgments that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The consolidated financial statements have, in the management's opinion, been properly prepared using careful judgment within reasonable limits of materiality and within the framework of the significant accounting policies.
- Estimates and Judgements
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Omni-Lite Industries Canada Inc. Condensed Consolidated Financial Statements For the interim three and nine months ended September 30, 2024, and 2023
United States Dollars Unaudited
3. Inventory
The major components of inventory are classified as follows:
The cost of inventories recognized as expense and included in cost of goods sold for the three months ended September 30, 2024, was $3,268,441 (2023 - $2,630,348). The cost of inventories recognized as expense and included in cost of goods sold for the nine months ended September 30, 2024, was $9,760,394 (2023 - $7,452,950).
September 30, | September 30, | ||||
2024 | 2023 | ||||
Raw Materials | 816,400 | 928,849 | |||
Tooling | 730,315 | 625,879 | |||
Work in Progress | 1,387,466 | 1,250,117 | |||
Finished Goods | 1,563,915 | 1,597,694 | |||
Total | $ | 4,498,096 | $ | 4,402,539 |
4. Investment
At September 30, 2024, the long-term investment consists of an equity investment of 7,144,970 common shares of California Nanotechnologies Corp. ("CalNano"), a public company related through a common director. The Company's investment is recorded at the fair value as supported by the market price listed on the TSX Venture Exchange.
Carrying Amount | Shares | ||
Investment at December 31, 2022 | $ | 487,704 | 6,004,970 |
Gain from market price valuation | 853,404 | 1,200,000 | |
Investment at December 31, 2023 | $ | 1,341,108 | 7,204,970 |
Gain from market price valuation | 7,001,324 | (60,000) | |
Investment at September 30, 2024 | $ | 8,342,432 | 7,144,970 |
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Omni-Lite Industries Canada Inc. Condensed Consolidated Financial Statements For the interim three and nine months ended September 30, 2024, and 2023
United States Dollars Unaudited
5. Property, Plant and Equipment
Other | Non- | Right-of- | |||||||
Production | Equipm | Consumable | Use | ||||||
Building | Equipment | ent | Tooling | Assets | Totals | ||||
At December 31, 2022 | $ | 4,353 | $18,435,319 | $302,372 | $7,886,989 | $4,467,377 | $31,096,410 | ||
Additions | - | 148,536 | 4,677 | - | - | 153,213 | |||
Currency translation | - | 57,679 | 2,370 | - | 55,536 | 115,485 | |||
At December 31, 2023 | $ | 4,353 | $18,641,534 | $309,419 | $7,886,989 | $4,522,813 | $31,365,108 | ||
Additions | - | 86,092 | 270 | - | - | 86,362 | |||
Currency translation | - | (52,740) | (2,005) | - | (49,976) | (134,741) | |||
At September 30, 2024 | $ | 4,353 | $18,674,886 | $307,684 | $7,886,989 | $4,472,837 | $31,346,749 | ||
Accumulated depreciation | |||||||||
At December 31, 2022 | $ | 4,353 | $11,287,938 | $212,626 | $7,885,566 | $624,494 | $20,014,977 | ||
Depreciation | - | 620,547 | 14,732 | 1,432 | 506,034 | 1,142,736 | |||
Currency translation | 10,935 | 339 | 13,877 | 25,151 | |||||
At December 31, 2023 | $4,353 | $11,919,420 | $227,697 | $7,886,989 | $1,144,405 | $21,182,864 | |||
Depreciation | - | 469,164 | 4,998 | - | 377,724 | 851,886 | |||
Currency translation | (9,620) | 25 | - | (11,842) | (21,437) | ||||
At June 30, 2024 | $4,353 | $12,378,964 | $232,720 | $7,886,989 | $1,510,287 | $22,013,313 | |||
At December 31, 2023 | $ | - | $6,722,114 | $81,722 | $ | - | $3,378,408 | $10,182,244 | |
At September 30, 2024 | $ | - | $6,295,922 | $74,965 | $ | - | $2,962,549 | $9,333,436 | |
6. Intangible Assets
Customer | Non-Compete | |||||||||
Relationships | Goodwill | Trademark | Agreements | Patents | Totals | |||||
Cost | ||||||||||
December 31, 2023 | $497,069 | $407,170 | $100,000 | $20,000 | $6,285 | $1,030,524 | ||||
Foreign currency translation | (5,441) | - | - | - | - | (5,441) | ||||
September 30, 2024 | $491,628 | $407,170 | $100,000 | $20,000 | $6,285 | $1,025,083 | ||||
Accumulated amortization | ||||||||||
December 31, 2023 | $347,956 | $ | - | $100,000 | $20,000 | $ | - | $467,956 | ||
Amortization | 37,484 | - | - | - | - | 37,484 | ||||
Foreign currency translation | (2,024) | - | - | - | - | (2,024) | ||||
September 30, 2024 | $383,416 | $ | - | $100,000 | $20,000 | $ | - | $503,416 | ||
Net book value | ||||||||||
December 31, 2023 | $149,113 | $407,170 | $ | - | $ | - | $6,285 | $562,568 | ||
September 30, 2024 | $108,212 | $407,170 | $ | - | $ | - | $6,285 | $521,667 |
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Omni-Lite Industries Canada Inc. Condensed Consolidated Financial Statements For the interim three and nine months ended September 30, 2024, and 2023
United States Dollars Unaudited
7. Related Party Transactions and Balances
During the three and nine months ended September 30, 2024, the Company had the following related party transactions and balances not disclosed elsewhere in these condensed consolidated financial statements:
The Company has a loan receivable from CalNano including accrued interest in the amount of $393,164. Of this amount, $383,697 accrues interest at 7.5% per annum and is paid on a monthly basis. In the three months ended September 30, 2024, CalNano paid in advance $338,335 of principal payments. In the nine months ended September 30, 2024, CalNano paid in advance $458,335 of principal payments. The loan is secured by all the assets of California Nanotechnologies Inc., a subsidiary of CalNano, which is due on May 30, 2025. On
March 31, 2020, the bank called CalNano's line of credit of $250,000, which was guaranteed by the Company. Omni-Lite repaid this amount on their behalf and has a loan receivable with interest at prime +1% from California Nanotechnologies Corp. During the nine months ended September 30, 2024, CalNano paid in advance $50,000 of principal towards this outstanding balance. This amount has been fully reserved.
Charles Samkoff is a member of the Company's Board of Directors and is a Managing Director of Cypress Partners LLC ("Cypress"), a firm retained by the Company to provide financial advisory services to the Company in support of the Company's strategic plan that includes, among others, the consideration of potential investments, strategic acquisitions, related growth opportunities, and near-term and long-term business objectives and initiatives. The Company incurred professional fees to this firm of nil for the nine months ended September 30, 2024, and $56,000 for the nine months ended September 30, 2023.
Roger Dent is a member of the Company's Board of Directors is also a member of the board of directors for CalNano.
Significant Subsidiaries:
The table below provides information relative to the Company's significant subsidiaries, including each such entity's name, its jurisdiction of incorporation/formation, the percentage of securities directly or indirectly owned by the Company, a brief description of the entity, and the market areas served, if applicable. The functional currency of each entity is U.S. Dollars.
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