ZIM (ZIMCF) 20-F 26 Jul 19 2019 FY Annual report (foreign) Financial data

Document and Entity Information

Document and Entity Information - shares	12 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Document And Entity Information
Entity Registrant Name	ZIM CORP
Entity Central Index Key	0001124160
Document Type	20-F
Document Period End Date	Mar. 31, 2019
Amendment Flag	false
Current Fiscal Year End Date	--03-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		8,136,348
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2019
EntityEmergingGrowthCompany	false
EntityShellCompany	false
EntityInteractiveDataCurrent	Yes
EntityIncorporationStateCountryCode	A6

Consolidated Statements of Oper

Consolidated Statements of Operations - USD ($)	12 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2017
Revenue
Mobile	$ 122,638	$ 108,485	$ 188,654
Software	117,533	34,435	90,452
Software maintenance and consulting	459,878	360,322	391,795
Total revenue	700,049	503,242	670,901
Operating expenses
Cost of revenue	20,588	15,774	18,600
Selling, general and administrative	521,794	542,688	677,325
Research and development	72,120	49,031	76,243
Amortization of intangible assets
Total operating expenses	614,502	607,493	772,168
Income (loss) from operations	85,547	(104,251)	(101,267)
Other income:
Gain on disposition of assets		45,758	582
Gain on settlement			9,008
Gain on revaluation of Investment	604,013
Interest income , net	13,956	15,591	22,229
Total other income	617,969	61,349	31,819
Income tax benefit
Income (loss) from continuing operations	703,516	(42,902)	(69,443)
Loss from discontinued operations
Net income (loss)	$ 703,516	$ (42,902)	$ (69,448)
Other comprehensive income, net of tax
Foreign currency translation adjustment	$ (72,890)	$ (5,781)	$ (32,570)
Comprehensive Income	$ 630,626	$ (48,683)	$ (102,018)
Basic and diluted income (loss) per share from continuing operations	$ .086	$ (0.005)	$ (0.009)
Basic and diluted loss per share from discontinued operations	$ (.000)	$ 0	$ 0
Weighted average number of shares outstanding	8,136,348	8,126,222	7,973,352

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($)	Mar. 31, 2018	Mar. 31, 2017
Current assets
Cash and cash equivalents	$ 418,507	$ 419,676
Accounts receivable, net	38,463	81,688
Investment tax credits receivable	131,220	168,963
Other tax credits	82,997	117,658
Prepaid expenses	25,595	12,819
Total Current Assets	696,782	800,804
Investments	117,109	114,200
Long term deposits
Intangible assets
Property and equipment, net	24,334	23,758
Total Assets	838,225	938,762
Current liabilities
Accounts payable	9,057	20,451
Accrued liabilities	19,041	19,125
Deferred revenue	60,224	92,770
Total current liabiliities	838,225	132,346
Deferred rent		8,173
Shareholders' equity:
Preferred shares, no par value, non-cumulative dividend at a rate to be determined by the Board of Directors redeemable by the holder for CDN $1 per share. Unlimited authorized shares; issued and outstanding NIL shares at March 31, 2018 and 2017.
Common shares, no par value, Unlimited authorized shares; 8,136,348 shares issued and outstanding as at March 31, 2018 and 8,120,348 shares as at March 31, 2017.	19,491,842	19,491,757
Additional paid-in capital	2,962,105	2,961,848
Accumulated deficit	(21,325,620)	(21,282,718)
Accumulated other comprehensive income	(378,425)	(372,644)
Total shareholders' equity	749,902	793,243
Total liability and equity	$ 838,225	$ 938,762

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2018	Mar. 31, 2017
Statement of Financial Position [Abstract]
Dividend rate redeemable	$ 1	$ 1
Common shares issued	8,136,348	8,120,348
Common shares outstanding	8,120,348	7,890,493

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2017
OPERATING ACTIVITIES
Net income	$ 703,516	$ (42,902)	$ (69,448)
Items not involving cash:
Depreciation of property and equipment	10,575	11,341	12,170
Amortization of intangible asset
Gain on disposition of assets		(45,758)	(582)
Impairment of investment	(604,013)
Stock-based compensation	1,807	342	8,334
Changes in operating working capital:
Decrease (increase) in accounts receivable	(21,168)	43,225	(23,381)
Decrease (increase) in investment tax credits	(39,984)	37,743	112,681
Increase in other tax credits	47,646	34,661	(33,006)
Decrease (increase) in prepaid expenses	(2,316)	(12,776)	12,140
Increase (decrease) in accounts payable	27,745	(11,394)	11,290
Increase (decrease) in accrued liabilities	2,446	(84)	(22,393)
Increase (decrease) in deferred revenue	29,620	(32,546)	(18,199)
Cash flows provided by operating activities	155,874	(18,147)	(10,394)
INVESTING ACTIVITIES
Purchase of property and equipment	(7,040)	(11,917)	(9,611)
Proceeds on sale of assets		45,758	582
Purchase of intangible asset
Purchase of investment
Cash flows used in investing activities	(7,040)	33,841	(9,029)
FINANCING ACTIVITIES
Effect of changes in exchange rates on cash	(60,817)	(16,863)	(33,218)
Increase in cash and cash equivalents	148,834	(1,169)	(52,641)
Cash and cash equivalents, beginning of year	418,507	419,676	472,317
Cash and cash equivalents, end of year	$ 506,524	$ 418,507	$ 419,676

Consolidated Statements of Shar

Consolidated Statements of Shareholders' Equity - USD ($)	Common shares	Additional paid-in capital	Accumulated deficit	Accumulated other comprehensive income	Total
Beginning Balance, Shares at Mar. 31, 2016	7,890,493
Beginning Balance, Amount at Mar. 31, 2016	$ 19,484,482	$ 2,960,789	$ (21,213,270)	$ (340,074)	$ 891,927
Shares issued, shares	229,855
Shares issued, amount	$ 7,275
Stock options granted		1,059
Net income			(69,448)		$ (69,448)
Cumulative translation adjustment				(32,570)
Ending Balance, Shares at Mar. 31, 2017	8,120,348				8,120,348
Ending Balance, Amount at Mar. 31, 2017	$ 19,491,757	2,961,848	(21,282,718)	372,644	$ 793,243
Shares issued, amount					51,687
Stock options granted					11,899
Net income					(42,902)
Cumulative translation adjustment					$ (194,758)
Ending Balance, Shares at Mar. 31, 2018	8,136,348				8,136,348
Ending Balance, Amount at Mar. 31, 2018	$ 19,491,842	2,962,105	(21,325,620)	(378,425)	$ 749,902
Beginning Balance, Shares at Mar. 31, 2017	8,120,348				8,120,348
Beginning Balance, Amount at Mar. 31, 2017	$ 19,491,757	2,961,848	(21,282,718)	372,644	$ 793,243
Shares issued, shares	16,000
Shares issued, amount	$ 85				85
Stock options granted		257			257
Net income			(42,902)		(42,902)
Cumulative translation adjustment				(5,781)	(5,781)
Ending Balance, Shares at Mar. 30, 2018	8,136,348
Ending Balance, Amount at Mar. 30, 2018	$ 19,491,842	2,962,105	(21,325,620)	(378,425)	$ 749,902
Beginning Balance, Shares at Mar. 31, 2018	8,136,348				8,136,348
Beginning Balance, Amount at Mar. 31, 2018	$ 19,491,842	2,962,105	(21,325,620)	(378,425)	$ 749,902
Shares issued, amount		1,807			1,807
Net income		703,516			703,516
Cumulative translation adjustment				(72,890)	(72,890)
Ending Balance, Shares at Mar. 31, 2019	8,136,348
Ending Balance, Amount at Mar. 31, 2019	$ 19,491,842	$ 2,963,912	$ (20,622,104)	$ (451,316)	$ 1,382,334

Nature of Operations

Nature of Operations	12 Months Ended
	Mar. 31, 2019
Notes to Financial Statements
Nature of Operations	1 - NATURE OF OPERATIONS COMPANY OVERVIEW ZIM Corporation (“ZIM” or the “Company”) is a provider of software products and services for the database and mobile markets. ZIM products and services are used by enterprises in the design, development and management of business, database and mobile applications. ZIM also provides mobile content to the consumer market. BUSINESS DEVELOPMENT ZIM was formed under the laws of Canada on October 17, 2002, in order to purchase ZIM Technologies International Inc. (“ZIM Technologies”), which was formed in 1997 to acquire the software technology now called the ZIM Integrated Development Environment (the “ZIM IDE software”). On February 10, 2004, ZIM purchased UK-based short messaging service (“SMS”) firms EPL Communications Limited and E-Promotions Limited (together referred to as “EPL”). During the fiscal year ended March 31, 2006, EPL was dissolved and all operations were transferred to ZIM Corporation in Canada. ZIM is also the sole shareholder of ZIM Technologies do Brazil Ltda., a company incorporated in Brazil that distributes the ZIM IDE Software, and PCI Merge, Inc., a Florida based holding company with no operations. Until March 31, 2004, ZIM was the sole shareholder of ZIM Technologies, a Canadian federal corporation and the chief operating company of the ZIM group of companies. On April 1, 2004, ZIM Corporation and ZIM Technologies amalgamated into ZIM Corporation. On April 1, 2006, ZIM purchased a US-based mobile content company called Advanced Internet Inc. (“AIS”). In April 2016, ZIM incorporated a wholly owned subsidiary called GeneSpans Corporation. GeneSpans is . Genespans name was changed to NuvoBio Corporation on August 25, 2016. BUSINESS OF THE COMPANY ZIM started operations as a developer and provider of database software known as ZIM IDE software. ZIM IDE software is used by companies in the design, development, and management of information databases and mission critical applications. The Company continues to provide this software and support services to its client base. Beginning in 2002, the Company expanded its business to include opportunities associated with mobile products. Prior to fiscal 2007, the Company focused on developing products and services for the wireless data network infrastructure known as “SMS” or “text messaging”. Although SMS will continue to provide a minimal amount of revenue within the mobile segment of ZIM’s operations, with the acquisition of AIS, the Company shifted its corporate focus to include offering mobile content directly to end users. In fiscal 2008, ZIM added the ZIM TV service and in partnership with the International Table Tennis Federation (“ITTF”) provided development and hosting services for IPTV to ITTF end users. However, due to low sales volumes ZIM exited this market in fiscal 2009. In fiscal 2019, ZIM continued to develop and sell enterprise database software to end users as well as maintain its SMS messaging business. At March 31, 2013 ZIM discontinued the sale of mobile content. Also, in 2017, NuvoBio signed strategic partnerships and exclusive global licensing agreements with leading drug research institutes and companies. The Company is currently funding research and development projects in the following areas: New peptide-derived inhibitors for therapeutic intervention against various cancer cell lines in the presence or absence of chemotherapeutics to characterize the in vivo effects of promising inhibitors; and

Going Concern

Going Concern	12 Months Ended
	Mar. 31, 2019
Notes to Financial Statements
Going Concern	2 - GOING CONCERN These consolidated financial statements have been prepared on a going concern basis in accordance with accounting principles generally accepted in the United States ("US GAAP").The going concern basis of presentation assumes that the Company w il commitment Although the company had a small operating income and positive cash flows from operations during the year ended March 31, 2019, to date has a history of operating losses and negative fro commitment is i I assumption y

Significant Accounting Policies

Significant Accounting Policies	12 Months Ended
	Mar. 31, 2019
Notes to Financial Statements
Significant Accounting Policies	3 - SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP"). PRINCIPLES OF CONSOLIDATION These consolidated financial statements include the accounts of the Company and its subsidiaries, all of which are wholly owned. The results of operations for acquisitions are included in these consolidated financial statements from the date of acquisition. Inter-company transactions and balances are eliminated upon consolidation . USE OF ESTIMATES The preparation of consolidated financial statements in accordance with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amount of revenue and expenses during the period. Estimates have been made by management in several areas, including, but not limited to, the realizability of accounts receivable and investments, the valuation allowance associated with deferred income tax assets, investment tax credits, the calculations supporting the revaluation of investments, expected useful life of equipment, the fair value calculation with respect to the stock options. Actual results may differ from those estimates. CASH AND CASH EQUIVALENTS The Company considers all highly liquid investments with an original term to maturity of three months or less to be cash equivalents. ALLOWANCE FOR DOUBTFUL ACCOUNTS Accounts receivable are recorded at the invoiced amount net of an allowance for doubtful accounts. The Company determines its allowance for doubtful accounts by considering a number of factors, including the age of the receivable, the financial stability of the customer, discussions that may have occurred with the customer and management's judgment as to the overall collectability of the receivable from that customer. The Company writes off accounts receivable when they become uncollectible, and payments subsequently received on such receivables are credited to selling, general and administration accounts in the period of recovery. REVENUE RECOGNITION The Company derives revenue from two sources: enterprise software, including maintenance and consulting services and mobile services and applications. Enterprise software involves providing enterprise software for designing, developing and manipulating database systems and applications. Mobile services involve providing SMS applications and services. The Company presents revenues net of sales tax and other related taxes. ENTERPRISE SOFTWARE REVENUE RECOGNITION ZIM records revenues from the perpetual license of the Company's software products and the sale of related maintenance and consulting. The Company's standard license agreement provides a license to use the Company's products based on the number of licensed users. The Company may license its software in multiple element arrangements if the customer purchases any combination of maintenance, consulting or training services in conjunction with the license. The Company recognizes revenue pursuant to the requirements of ASC 606, Revenue from Contracts with Customers The following steps are taken to recognize revenue: 1. Identification of the contract(s) with the customer(s). 2. Identify the performance obligations in the contract. 3. Determine the transaction price. 4. Allocate the transaction price to the performance obligations in the contract. 5. Recognize revenue when (or as) the Company satisfies the performance obligations. The Company recognizes revenue from software license agreements at the point in time that the related performance obligation is satisfied, which is generally when the software key is delivered. Discounts are allocated among the various performance obligations on a pro-rata basis. If at the outset of an arrangement the Company determines that the arrangement fee is not fixed or determinable, revenue is deferred until the arrangement fee becomes fixed or determinable. Collectability is assessed based on the collection history of the client, current economic trends, customer concentrations and customer credit worthiness. Delivery of the software has occurred once the customer has accepted the product or has been provided with permanent keys to the file transfer protocol ("FTP") site. If an arrangement allows for customer acceptance of the software or services, the Company defers revenue recognition until the earlier of customer acceptance or when the acceptance right lapses. MAINTENANCE AND CONSULTING REVENUE RECOGNITION Maintenance revenues are recognized using a time-based approach equally over the term of the maintenance contract. The liability relating to the received but unearned portion of maintenance revenues is recognized as deferred revenues. Consulting revenue, which represents services provided on a per diem basis to customers, is recognized as the services are performed as there are no customer acceptance provisions involved in these types of arrangements. Consulting revenue, which represents services provided on a fixed price basis to customers, is recognized upon achieving the related performance obligation. In general, credit terms of 30 days are extended to customers with a small number of customers receiving longer payment terms based on the long-standing relationship with ZIM. MOBILE REVENUE RECOGNITION Aggregation services occur when ZIM sends messages from its content provider customers through mobile operators to end users on their cell phones. In this situation, the Company contracts with its customers that cannot connect directly to the mobile operators and with the third-party mobile operators or other aggregators directly for the transmission of the messages. The performance obligation is to transmit a message. Revenues are recognized in the month in which the performance obligation is satisfied, provided no significant ZIM obligations remain. We work with aggregators to provide delivery routes and receive statements and billing in real time. We prepay for message credits and bill customers for message delivery at the end of each month. We purchase service credits from the aggregators and bill our customers directly for the delivery of messages on a monthly basis. RESEARCH AND DEVELOPMENT EXPENSES Costs related to research, design and development of products and applications are charged to research and development expense as incurred. Software development costs are capitalized beginning when a product's technological feasibility has been established, which generally occurs upon completion of a working model, and ending when a product is available for general release to customers. All subsequent costs are expensed as incurred. To date, completing a working model of the Company's products and the general release of the products has substantially coincided. The Company has not capitalized any software development costs since such costs have not been significant. The Company qualifies for scientific research and experimental development refundable investment tax credits. These credits are recorded as a reduction of research and development expense when it is more likely than not that the credits will be realized. Other non-refundable investment tax credits not utilized in the current year can be used to offset income taxes otherwise payable in future years. TRANSLATION OF FOREIGN CURRENCIES The Company's reporting currency is the US dollar and the functional currency is the Canadian dollar for ZIM Corporation and NuvoBio, US Dollar for AIS and Brazilian Reals for ZIM do Brazil. Transactions denominated in currencies other than the functional currency of the Company or its subsidiaries are initially measured using the exchange rate in effect on the date of the transaction. At each balance sheet date, monetary assets and liabilities are remeasured into the functional currency using the exchange rate in effect on that date. Any foreign exchange gains or losses resulting from this remeasurement are recognized in the statement of income (loss) and comprehensive income (loss) of the respective entity for that period. For the years ended March 31, 2019, 2018, and 2017, the Company recognized a foreign exchange gain (loss) of $7,221, ($2,504), and ($1,246), respectively, in the accompanying consolidated statements of income (loss) and comprehensive income (loss) included in the selling, general and administrative expenses. The translation of the Company's financial statements and those of its subsidiaries from their respective functional currencies to the Company’s reporting currency is performed as follows: all assets and liabilities are translated into US dollars at the rate of exchange in effect at the balance sheet date. Equity transactions are translated at the exchange rate in effect at the date of the transaction. Revenues, expenses and cash flow amounts are translated at the weighted average exchange rates for the period. The resulting translation adjustments are included in accumulated other comprehensive income (loss) in shareholders' equity. The translation adjustments did not result in a tax impact. INCOME TAXES Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss and tax credit carry-forwards using enacted tax rates and laws in effect in the year in which the differences are expected to reverse. When necessary, a valuation allowance is recorded to reduce the tax assets to an amount for which realization is more likely than not. The effect of changes in tax rates is recognized in the period in which the rate change occurs. The Company is subject to examination by taxing authorities in the jurisdictions of Canada, Brazil and the United States. Management does not believe that there are any uncertain tax positions that would result in an asset or liability for taxes being recognized in the accompanying consolidated financial statements. EARNINGS PER SHARE Basic earnings per share are computed by dividing net earnings available to common shareholders by the weighted average number of common shares outstanding during the reporting period. Diluted earnings per share are calculated giving effect to the potential dilution that could occur if securities or other contracts to issue common shares were exercised or converted to such shares at the later of the beginning of the period or the issuance date. This method is used to determine the dilutive effect of common shares. The treasury stock method is used to determine the dilutive effect of warrants and stock options. The treasury stock method assumes that proceeds received from the exercise of in-the-money share purchase warrants and stock options are used to repurchase common shares at the average market price during the period. STOCK OPTIONS AND GRANTS Compensation cost for all stock-based awards is measured at fair value on the date of grant and recognized as compensation expense over the service period for awards expected to vest. Stock-based awards granted to consultants are measured at fair value on the grant date and compensation expense is recognized on the date at which the consultant's performance is complete which, for the Company, is on the date of grant. The fair value of stock options is determined using the Black Scholes-Merton option pricing model. The expected dividend yield is based on historical dividend payouts, the expected volatility is based on historical volatilities of company stock (management believes that the historical volatility is an appropriate measure of expected volatility) for a period approximating the expected life; the risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the option; and the expected life represents the period of time the options are expected to be outstanding and is based on historical trends. The weighted average assumptions used in the computations are as follows: Year ended Year ended Year ended Risk-free interest rates 2.52% 1.93% 1.36% Expected volatility 120% 433% 206% Dividend yield - - - Expected life of options (years) 3.0 3.0 3.0 EQUIPMENT Equipment is recorded at cost net of depreciation and any impairment losses. Depreciation is provided over the estimated useful lives of the underlying assets using the following methods and rates: Computer equipment 40% Declining balance Software 40% Declining balance Office furniture and equipment 20% Declining balance Voice communications equipment 20% Declining balance Leasehold improvements 5 years Straight line over the IMPAIRMENT OF EQUIPMENT Equipment is tested for impairment when evidence of a decline in value exists, and adjustments to estimated fair value are made if the asset is impaired. Whenever events or changes in circumstances indicate that the Company may not be able to recover the net book value of its productive assets, that the assets are deemed impaired and are to be written down to their estimated fair value through a charge to earnings. The guidance states that fair values may be estimated using discounted cash flow analysis or quoted market prices, together with other available information. The Company reviewed its property and equipment assets for impairment to determine if there were events or changes in circumstances that would indicate that the carrying amount of the assets may not be recoverable through future cash flows. It was determined that no impairment was evident. INVESTMENTS ZIM measures the value if its equity investments in privately-held companies, which do not have readily determinable fair values, using the alternative measurement basis permitted under Accounting Standards Update (“ASU”) 2016-01, Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities ACCOUNTING PRONOUNCEMENTS ADOPTED DURING THE YEAR In January 2016, the FASB issued Accounting Standards Update 2016-01, Financial Instruments–Overall: Recognition and Measurement of Financial Assets and Financial Liabilities (the ASU). Changes to the current GAAP model primarily affects the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, the FASB clarified guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The accounting for other financial instruments, such as loans, investments in debt securities, and financial liabilities is largely unchanged. The classification and measurement guidance is effective for public business entities in fiscal years beginning after December 15, 2017. This standard was adopted on April 1, 2018 by applying the standard prospectively to its equity investments without readily determinable fair values since the Company has elected to use the alternative measurement approach. The effect of the adoption of this standard was an increase in the carrying value of the Equispheres investment at April 1, 2018 of $604,013 to a carrying value of $721,122. In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718) share-based payment award. The ASU is effective for the annual reporting periods beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period, for (1) public business entities for reporting periods for which financial statements have not yet been issued and (2) all other entities for reporting periods for which financial statements have not yet been made available for issuance. The Company has had no changes to its share-based payment awards and therefore the adoption of this standard had no impact on the consolidated financial statements of the Company. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standards setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company’s management believes that the impact of recently issued standards that are not yet effective will not have any significant impact on the consolidated financial statements upon adoption. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230) – Restricted Cash In August 2016 the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230) – Classification of Certain Cash Receipts and Cash Payments In February 2016, the FASB issued Accounting Standards Codification (“ASC”) Topic 842, Leases In June 2016, FASB issued Accounting Standards Update (ASU) 2016-13, Financial Instruments—Credit Losses (Topic 326) The new standard is effective for annual and interim reporting periods beginning after December 15, 2019 for a public business entity. Early adoption is permitted. We are currently evaluating the impact ASU 2016-13 will have on the Company’s consolidated financial statements.

Accounting for Uncertain Tax Po

Accounting for Uncertain Tax Positions	12 Months Ended
	Mar. 31, 2019
Notes to Financial Statements
Accounting for Uncertain Tax Positions	4 - ACCOUNTING FOR UNCERTAIN TAX POSITIONS The Company recognizes any interest accrued related to unrecognized tax benefits in interest and penalties in income tax benefit in the consolidated statement of loss and comprehensive loss.

Accounts Receivable

Accounts Receivable	12 Months Ended
	Mar. 31, 2019
Notes to Financial Statements
Accounts Receivable	5 - ACCOUNTS RECEIVABLE March 31, 2019 March 31, 2018 $ $ Trade accounts receivable 65,829 45,832 Allowance for doubtful accounts (8,560) (10,064) Other 2,362 2,695 59,631 38,463

Investments

Investments	12 Months Ended
	Mar. 31, 2019
Notes to Financial Statements
Investments	6 – INVESTMENTS Investments and long-term deposits Investment Date Value at Investment Date 2019 2018 Available For Sale CP4H June 29, 2012 187,367 - - No HostedBizz Dec. 31, 2013 1,005 - - No Equispheres Inc. August 26,2015 112,752 701,564 117,109 No Spiderwort August 24, 2018 7,725 7,483 - No Total 308,849 709,047 117,109 On April 30, 2016, ZIM Corporation made an equity investment in Equispheres Inc. The investment consisted of the purchase of 250,000 common shares at a price of $20,042. On August 26, 2016, ZIM Corporation made an equity investment in Equispheres Inc. The investment consisted of the purchase of 500,000 common shares at a price of $91,948. Equispheres Inc. is an advanced materials company developing new technologies for the production of metallic particles for use in additive manufacturing. On August 9, 2017, Connecting People for Health Co-operative Ltd. (CP4H) was acquired for an undisclosed amount. Various options to distribute the proceeds from the sale are being considered by the board of CP4H and will be finalized at a later date. ZIM has not recognized this transaction in its financial statements as of March 31, 2018. Once the distribution has been finalized ZIM will recognize its portion of the proceeds as a gain on the sale of assets. On February 9, 2018, ZIM sold 100,000 shares of HostedBizz to HostedBizz, for cancellation, for gross proceeds of $60,000 Canadian dollars ($45,758 United States dollars). On August 24, 2018, NuvoBio Corporation made an investment in Spiderwort Inc. The investment consisted of the purchase of a $10,000 Canadian dollar ($7,725 US dollar) convertible promissory note and is accounted for at amortized cost. The note accrues simple interest of 5% per annum and upon a future equity financing of Spiderwort Inc. in an amount greater than $3,000,000 Canadian dollars all principal and accrued interest will convert into the equity securities of the financing at a price per security equal to 80% of the equity financing price per security. Spiderwort Inc. is an advanced materials company developing novel, plant derived, biomaterial that will offer new avenues in 3D in vitro research and in regenerative medicine.

Property and Equipment

Property and Equipment	12 Months Ended
	Mar. 31, 2019
Notes to Financial Statements
Property and Equipment	7 - EQUIPMENT March 31, 2019 Cost Accumulated depreciation Net book value $ $ $ Computer equipment 834,420 825,004 9,416 Software 80,585 77,668 2,917 Office furniture and equipment 178,682 176,362 2,320 Voice communications equipment 4,610 4,385 225 Leasehold improvements 124,787 118,866 5,921 1,223,084 1,202,285 20,799 March 31, 2018 Cost Accumulated depreciation Net book value $ $ $ Computer equipment 865,864 850,561 15,303 Software 84,316 79,276 5,040 Office furniture and equipment 185,646 182,260 3,386 Voice communications equipment 4,810 4,520 290 Leasehold improvements 139,357 139,042 315 1,279,993 1,255,659 24,334 Depreciation expense for the year ended March 31, 2019 was $7,810 ($11,341 and $12,170 for the years ended March 31, 2018 and 2017 respectively). These expenses are included in the cost of revenue account, the selling, general, and administrative expenses and the research and development account.

Line of Credit

Line of Credit	12 Months Ended
	Mar. 31, 2019
Notes to Financial Statements
Line of Credit	8 – LINE OF CREDIT During fiscal 2019, a working capital line of credit, in the form of overdraft protection, was available at approximately $37,417 (equivalent to $50,000 Canadian, the Company’s functional currency) from the Company’s major financial institution. This credit facility is secured by the Company’s assets. Amounts can be drawn in Canadian funds on this credit facility and bear interest at the prime rate, as published by the Royal Bank of Canada, plus 2.15% (7.6% at March 31,2019). Amounts can also be drawn in United States of America funds on this credit facility and bear interest at the US Base Rate plus 2.15% (7.65% at March 31,2019). In order to maintain the working capital line of credit the Company must maintain a Tangible Net Worth of greater than $150,000 Canadian dollars (equivalent to $112,250 US dollars) and a ratio of current assets to current liabilities greater than 1.10:1. The Company was in compliance with these covenants as at March 31, 2019. As at March 31, 2019 nothing was drawn down on this line of credit. The line of credit does not have defined expiration or renewal dates.

Accrued Liabilities

Accrued Liabilities	12 Months Ended
	Mar. 31, 2019
Notes to Financial Statements
Accrued Liabilities	9 – ACCRUED LIABILITIES March 31, 2019 March 31, 2018 $ $ Employee related accruals 19,990 22,123 Trade 1,497 (3,082) 21,487 19,041

Common Share Issue

Common Share Issue	12 Months Ended
	Mar. 31, 2019
Notes to Financial Statements
Common Share Issue	10 – COMMON SHARE ISSUE The Company did not issue any common shares, except for those issued as compensation as described in notes 12 and 13, during the years ended March 31, 2019, March 31, 2018 or March 31, 2017 pursuant to the exercise of stock options by employees and the granting of stock for executive officers. On November 12, 2009, the Board of Directors approved a share repurchase plan. Shares may be repurchased by the Company to a maximum of $200 per day and $12,000 per quarter. The repurchase program has no expiration date. As of March 31, 2019, no shares have been repurchased as part of this program. On January 19, 2017, the Company undertook a corporate action to consolidate its outstanding common shares on the basis of one post-consolidation common share for every twenty pre-consolidation common shares. The share consolidation has been reflected retroactively in the consolidated financial statements.

Related Party Transactions

Related Party Transactions	12 Months Ended
	Mar. 31, 2019
Notes to Financial Statements
Related Party Transactions	11 – RELATED PARTY TRANSACTIONS No remuneration has been recorded in these consolidated financial statements for the services of the Chief Executive Officer (CEO) for the fiscal years 2019, 2018 and 2017 except for the 11,000 post-consolidation shares of common stock, valued at $58, issued through the fiscal year 2018 and 32,293 post-consolidation shares of common stock, valued at $1,085, issued through the fiscal year 2017. The CEO is also a director and the controlling shareholder. A director of the Company is a director and principal owner of a company that provides computing and hosting services to ZIM. During the fiscal year ending March 31, 2019 the Company paid $59,829 for these services (March 31, 2018 - $21,984, March 31, 2017 - $31,127). At March 31, 2019, included in accounts payable is $7,366 connected to these services as compared to $2,761 at March 31, 2018. From April 1, 2019 to May 31, 2019 the Company paid $5,118 for these services. An Officer of the Company is the principal owner of a company that provides finance, accounting and bookkeeping services to ZIM. During the fiscal year ending March 31, 2019 the Company paid $12,821 for these services (March 31, 2018 - $12,178, March 31, 2017 - $17,245). At March 31, 2019, included in accounts payable is $2,854 connected to these services as compared to $894 at March 31, 2018. From April 1, 2019 to May 31, 2019 the Company paid $1,450 for these services.

Stock Options

Stock Options	12 Months Ended
	Mar. 31, 2019
Notes to Financial Statements
Stock Options	12 - STOCK BASED COMPENSATION During the year ended March 31, 2019 and March 31, 2018, the Company issued common shares and options to employees and non-employees, and as a result, common shares and additional paid in capital has been increased by $1,807 and $342 respectively. On November 22, 2017 Dr. Cowpland, Chief Executive Officer, was awarded a total of 11,000 post-consolidation shares of common stock in lieu of cash for services provided to the Company, valued at $58. On November 22, 2017 a Company controlled by Mr. Stechyson, Chairman of the Board, received a total of 5,000 post-consolidation shares of common stock in lieu of cash for services provided to the Company, valued at $27. At various times through fiscal year 2017 Dr. Cowpland received a total of 32,293 post-consolidation shares of common stock in lieu of cash for services provided to the Company, valued at $1,085. At various times through fiscal year 2017 a Company controlled by Mr. Stechyson received a total of 156,500 post-consolidation shares of common stock in lieu of cash for services provided to the Company, valued at $5,321. At various times through fiscal year 2017 a Company controlled by Mr. Chapman received a total of 41,063 shares of common stock in lieu of cash for services provided to the Company, valued at $869. The increase in additional paid in capital is the value associated with the common shares issued and the vesting of options, which is recorded as compensation expense in the statement of loss and comprehensive loss as a part of selling, general and administrative expense. Under ZIM’s Employee Stock Option Plan, the Company may grant options to its officers, directors and employees for up to 1,360,000 post consolidation common shares. As at March 31, 2019, 170,250 (March 31, 2018, 204,150) post consolidation options were outstanding under the Employee Stock Option Plan. Stock options are granted with an exercise price equal to the common share’s fair market value at the date of grant. Options are granted periodically, and both the maximum term of an option and the vesting period are set at the Board's discretion. All options granted in fiscal year 2019 vested on the day of the grant and have a three-year term. The expected life of the grants due to forfeitures and exercise of options is estimated based on recent history and is 3 years. The Company recognized the following expense relating to stock options and grants: Year ended Year ended Year ended March 31, 2017 $ $ $ Options compensation expense for employees 268 591 2,809 Options compensation expense for consultants 1,539 468 3,401 Stock grant compensation expense for consultants - 869 3,986 Stock grant compensation expense for executive officers - 6,406 44,867 Total expense 1,807 8,334 55,063 All options granted vested on the day of the grant resulting in the Company not having any non-vested awards as of March 31, 2019 or March 31, 2018. A summary of the status of the stock options is as follows: March 31, 2019 Number of options outstanding March 31, 2018 Number of options outstanding Options outstanding, beginning of year 204,150 225,500 Granted 79,250 48,500 Expired (113,150) (69,850) Options outstanding, end of year 170,250 204,150 The number of outstanding share options granted have been adjusted for the effect of the share consolidation. All share options outstanding at March 31, 2019 are exercisable. The following table represents a summary of the options outstanding as at March 31, 2019: Options outstanding and exercisable Range of exercise prices Number outstanding at March 31, 2019 Weighted average remaining contractual life $ Years 0.000-0.015 91,000 2.06 0.015-0.040 41,250 0.50 0.040-0.080 38,000 2.90 170,250 1.86 The weighted average grant-date fair value of options granted and vested in fiscal years 2019 and 2018 were $0.0169 and $0.00547 respectively. As at March 31, 2019 there were 91,000 options in the money. EMPLOYEE AND NON-EMPLOYEE OPTIONS During the year ended March 31, 2019, 16,750 post-consolidation options were granted to employees. In the year ended March 31, 2018, 9,500 post-consolidation options were granted to employees. During the year ended March 31, 2019, 62,500 post-consolidation options were granted to non-employees. In the year ended March 31, 2018, 39,000 post-consolidation options were granted to non-employees. No options have been granted with exercise prices below the market price on the respective grant dates during the year ended March 31, 2019 or March 31, 2018.

Interest

Interest	12 Months Ended
	Mar. 31, 2019
Notes to Financial Statements
Interest	13 - INTEREST Year ended Year ended Year ended $ $ $ Interest income 16,334 18,526 25,892 Interest expense (2,378) (2,934) (3,663) Total 13,956 15,591 22,229

Contract Liabilities

Contract Liabilities	12 Months Ended
	Mar. 31, 2019
Notes to Financial Statements
Contract Liabilities	14 – CONTRACT LIABILITIES Years ended March 31, 2019 March 31, 2018 $ $ Balance beginning of the year 60,224 92,770 Aggregate amount of revenue recognized (365,455) (260,436) Contract liabilities recognized 395,075 227,890 Balance, end of year 89,844 60,224 March 31, 2019 March 31, 2018 $ $ Current portion 89,844 60,224 The opening balance of deferred revenue was $92,770 as of April 1, 2017 and is all current.

Income Taxes

Income Taxes	12 Months Ended
	Mar. 31, 2019
Notes to Financial Statements
Income Taxes	15 - INCOME TAXES The Company recognizes in its consolidated financial statements the impact of a tax position if that position is more likely than not of not being sustained on an audit, based on the technical merits of the position. The Company and its subsidiaries file income tax returns in Canadian, Brazilian and U.S. federal jurisdictions, and various provincial jurisdictions. The Company’s federal income tax returns are generally subject to examination for a period of three years after filing of the respective return in the U.S. and Canada and five years in Brazil. Income tax expense varies from the amount that would be computed by applying the basic federal and provincial income tax rates to loss before taxes, as follows: Year ended March 31, 2019 Year ended March 31, 2018 Year ended March 31, 2017 $ $ $ Tax Rate, comprised of a federal rate of 9.75% and a provincial rate of 3.50% 13.25% 15.13% 15.50% Expected Canadian Income Tax (Recovery) 83,562 (4,136) (10,764) Change in valuation allowance (148,300) (102,732) 107,243 Permanent differences (39,088) (3,702) 6,940 Change in tax rates Difference between Canadian and foreign tax rates 99,278 (30,102) 110,694 (12,690) (75,293) (6,221) Other 34,650 12,566 (21,905) - - - The change in valuation allowance for originating temporary differences and losses available for carry forward, is calculated using an expected deferred tax rate of 13.25%, based on the application of the Small Business Deduction. The rate at which such amounts may be realized as disclosed as part of a deferred tax asset and related valuation allowance takes into account the enacted tax rate decreases over the expected period of realization. Refundable investment tax credits for research and development in Canada of $171,204 $124,234 and $171,457, and for the years ended March 31, 2019, March 31, 2018 and March 31, 2017, respectively is netted against research and development expense. The investment tax credits are subject to review and approval by taxation authorities and it is possible that the amounts granted will be different from the amounts recorded by the Company. Deferred taxes reflect the impact of temporary differences between amounts of assets and liabilities for financial reporting purposes and such amounts as measured by tax laws. The Company’s deferred tax assets are as follows: March 31, 2019 March 31, 2018 $ $ Losses available for carry forward 110,746 168,277 Property and equipment - differences in net book value and unamortized capital cost 69,560 116,545 Intangible assets - differences in net book value and tax basis 156,669 196,610 Unused scientific research and experimental development amounts deductible and investment tax credits available for carry forward 701,305 814,830 Other 116,622 117,215 Gross deferred tax asset 1,154,902 1,413,477 Valuation allowance (1,154,902) (1,413,477) Net deferred tax asset - - The Company has federal and provincial non-capital losses available to reduce taxable income in Canada, which expire in the following years: Federal & Provincial $ 2026 451,224 2027 306,030 2037 135,284 2038 2,306 2039 15,800 910,643 The Company has capital losses of $245,493, which are available indefinitely to reduce capital gains in future years as of March 31, 2019. The losses in Brazil of $167,352 have an indefinite carryforward period. However, the losses can only be used to offset 30% of taxable income in any given year. As at March 31, 2019, the Company had accumulated unclaimed federal and provincial scientific research and experimental development deductions of approximately $4,027,584 ($4,073,657 in 2018). This amount can be carried forward indefinitely to reduce income taxes payable in future years. The Company has federal scientific research and experimental development credits available to reduce income taxes in Canada, which expire in the following years: 2019 4,974 2021 1413,528 2022 265,076 2023 1,702 2024 2,131 2025 to 2033 9,329 296,740

Earnings (Loss) Per Share

Earnings (Loss) Per Share	12 Months Ended
	Mar. 31, 2019
Notes to Financial Statements
Earnings (Loss) Per Share	16 – INCOME (LOSS) PER SHARE For the purposes of the income (loss) per share computation, the weighted average number of common shares outstanding has been used. The following securities are considered "in the money" and could potentially dilute the basic income per share in the future but have not been included in diluted income per share because their effect was antidilutive: March 31, 2019 March 31, 2018 March 31, 2017 Stock options 91,000 - -

Financial Risks

Financial Risks	12 Months Ended
	Mar. 31, 2019
Notes to Financial Statements
Financial Risks	17 - FINANCIAL RISKS FOREIGN EXCHANGE RISK The Company operates internationally, giving rise to significant exposure to market risks from changes in foreign exchange rates. The Company’s financial assets are in the form of cash and cash equivalents held at institutions with high quality credit ratings. A hypothetical 10% change in the value of one Brazilian real expressed in U.S. dollars during the year ended March 31, 2019 would have caused an approximate $8,343 change in the Company’s net income for the fiscal year 2019. The Company is exposed to exchange risk due to the timing of the movement of funds between subsidiaries and the parent company related to the transfer pricing agreement and the pricing of contracts in non-functional currencies. Financial instruments denominated in foreign currencies that lead to foreign exchange risk when funds are moved include: Cash and cash equivalents includes the following amounts in their source currency: March 31, 2019 March 31, 2018 Canadian dollars 131,463 210,939 US dollars 153,406 42,374 Brazilian reals 1,013,757 704,236 Accounts receivable include the following amounts receivable in their source currency: March 31, 2019 March 31, 2018 Canadian dollars 44,287 13,396 US dollars 4,548 210 Brazilian reals 85,476 92,325 Accounts payable include the following amounts payable in their source currency: March 31, 2019 March 31, 2018 Canadian dollars 44,537 11,029 US dollars 3,275 - Brazilian reals 772 1,670 Accrued liabilities include the following accruals in their source currency: March 31, 2019 March 31, 2018 Canadian dollars 22,397 14,992 Brazilian reals 18,412 24,567 The Company does not use derivative financial instruments to reduce its foreign exchange risk exposure. CREDIT RISK The Company is exposed to credit-related losses in the event of non-performance by counterparties to financial instruments. Credit exposure is minimized by dealing with only creditworthy counterparties in accordance with established credit approval policies. Concentration of credit risk in accounts receivable is indicated below by the percentage of the total balance receivable from customers in the specified geographic area: March 31, 2019 March 31, 2018 Canada 55% 27% North America, excluding Canada 8% 1% South America 37% 72% 100% 100% One customer accounted for approximately 28% of revenue for the year ended March 31, 2017 with $12,031 in accounts receivable on March 31, 2017, one customer accounted for approximately 22% of revenue for the year ended March 31, 2018 with $7,772 in accounts receivable on March 31, 2018 and one customer accounted for approximately 24% of revenue for the year ended March 31, 2019 with nil in accounts receivable on March 31, 2019. FAIR VALUE OF FINANCIAL INSTRUMENTS The carrying values of accounts receivable and accounts payable and accrued liabilities approximate their fair value due to the relatively short periods to maturity of the instruments.

Commitments and Contingencies

Commitments and Contingencies	12 Months Ended
	Mar. 31, 2019
Notes to Financial Statements
Commitments and Contingencies	18 – COMMITMENTS AND CONTINGENCIES OPERATING LEASE COMMITMENTS The Company has the following financial commitments related to minimum rent expenses for facilities: $ 2020 12,662 2021 2,110 Total 14,772 For the year ended March 31, 2019, facilities expense was $39,113 ($69,777 for the year ended March 31, 2018 and OTHER The Company is committed to pay an unrelated third party $75,000 upon the listing of ZIM Corporation’s common shares on a national securities exchange.

Supplemental Cash Flow Disclosu

Supplemental Cash Flow Disclosure	12 Months Ended
	Mar. 31, 2019
Notes to Financial Statements
Supplemental Cash Flow Disclosure	19 - SUPPLEMENTAL CASH FLOW DISCLOSURE Year ended Year ended $ $ Interest paid (2,378) (2,934) Income taxes paid - - Investment tax credit on research and development received 171,204 131,220

Segment Reporting

Segment Reporting	12 Months Ended
	Mar. 31, 2019
Notes to Financial Statements
Segment Reporting	20 - SEGMENT REPORTING The Company operates in two reportable segments based on product differentiation: mobile and enterprise software. Mobile applications involve providing SMS and other content applications and services for mobile devices. Enterprise software involves providing enterprise software for designing, developing and manipulating database systems and applications. The Company considers all revenues and expenses to be of an operating nature and accordingly, allocates them to the segments. Costs specific to a segment are charged directly to the segment. Company operating expenses are allocated to either of the segments based on gross revenues. Significant assets of the Company include working capital, an investment and equipment. The accounting policies of the reportable segments are the same as those described in the summary of the significant accounting policies. The following table sets forth external revenues, cost of revenues (including depreciation expense), operating expenses (including depreciation expense) and other amounts attributable to these segments: Year ended March 31, 2019 Mobile Software, Maintenance and Consulting Total $ $ $ Revenue 122,638 577,411 700,049 Cost of revenue 2,071 18,517 20,588 Gross margin 120,567 558,894 679,461 Allocation of operating expenses 105,387 488,527 593,914 Allocation of interest income (2,476) (11,480) (13,956) 102,911 477,047 579,958 Revaluation of investments (604,013) Net income 17,656 81,847 703,516 Year ended March 31, 2018 Mobile Software, Maintenance and Consulting Total $ $ $ Revenue 108,485 394,757 503,242 Cost of revenue 2,886 12,888 15,774 Gross margin 105,599 381,869 487,468 Allocation of operating expenses 128,183 463,536 591,719 Allocation of gain on sales of assets (3,377) (12,214) (15,591) Allocation of dividend income (9,912) (35,846) (45,758) 114,893 415,477 530,370 Net loss (9,294) (33,608) (42,902) Year ended March 31, 2017 Mobile Software, Maintenance and Consulting Total $ $ $ Revenue 188,654 482,247 670,901 Cost of revenue 3,939 14,661 18,600 Gross margin 184,715 467,586 652,301 Allocation of operating expenses 213,391 541,177 753,568 Allocation of gain on sale of assets (165) (417) (582) Allocation of dividend income (2,551) (4,576) (9,008) Allocation of interest income, net (6,295) (15,934) (22,229) 204,381 517,368 721,749 Net loss (19,666) (49,782) (69,448) The following table sets forth total assets used by each segment: TOTAL ASSETS March 31, 2019 March 31, 2018 $ $ Mobile 268,115 180,698 Software 1,262,352 657,527 Total assets 1,530,467 838,225 The following tables set forth external revenues and long-lived assets attributable to geographic areas. External revenues are based on the location of the customer: March 31, 2019 March 31, 2018 $ $ Long-lived assets Canada 19,220 22,616 Brazil 1,579 1,718 Total long-lived assets 20,799 24,334 Total Revenue Year ended March 31, 2019 Year ended March 31, 2018 Year ended March 31, 2017 $ $ $ United States 235,592 34,076 47,057 Europe - - 5,885 Brazil 170,056 218,436 245,475 Canada 41,464 141,511 181,415 Singapore 22,775 108,485 188,596 Austria 130,163 735 2,473 Total revenue 700,049 503,242 670,901 Management evaluates each segment’s performance based upon revenues and gross margins achieved.

Subsequent Events

Subsequent Events	12 Months Ended
	Mar. 31, 2019
Notes to Financial Statements
Subsequent Events	21 – SUBSEQUENT EVENTS None.