Cover
Cover | 12 Months Ended |
Dec. 31, 2022 shares | |
Entity Addresses [Line Items] | |
Document Type | 40-F |
Amendment Flag | false |
Document Registration Statement | false |
Document Annual Report | true |
Document Period End Date | Dec. 31, 2022 |
Document Fiscal Period Focus | FY |
Document Fiscal Year Focus | 2022 |
Current Fiscal Year End Date | --12-31 |
Entity File Number | 001-40688 |
Entity Registrant Name | Draganfly Inc. |
Entity Central Index Key | 0001786286 |
Entity Incorporation, State or Country Code | A1 |
Entity Address, Address Line One | 2108 St. George Avenue |
Entity Address, City or Town | Saskatoon |
Entity Address, State or Province | SK |
Entity Address, Country | CA |
Entity Address, Postal Zip Code | S7M 0K7 |
City Area Code | 800 |
Local Phone Number | 979-9794 |
Title of 12(b) Security | Common Shares |
Trading Symbol | DRPO |
Security Exchange Name | NASDAQ |
Annual Information Form | true |
Audited Annual Financial Statements | true |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Emerging Growth Company | true |
Elected Not To Use the Extended Transition Period | false |
Entity Common Stock, Shares Outstanding | 34,270,579 |
Auditor Name | Dale Matheson Carr-Hilton Labonte LLP |
Auditor Firm ID | 1173 |
Auditor Location | Vancouver, Canada |
Business Contact [Member] | |
Entity Addresses [Line Items] | |
Entity Address, Address Line One | 1015 15th Street |
Entity Address, Address Line Two | N.W.,Suite 1000 |
Entity Address, City or Town | Washington |
Entity Address, State or Province | DC |
Entity Address, Postal Zip Code | 20005 |
City Area Code | 202 |
Local Phone Number | 572-3111 |
Contact Personnel Name | C T Corporation System |
Consolidated Statements of Fina
Consolidated Statements of Financial Position - CAD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Current Assets | ||
Cash and cash equivalents | $ 7,894,781 | $ 23,075,713 |
Receivables | 2,088,965 | 1,407,127 |
Inventory | 1,055,942 | 3,390,822 |
Notes receivable | 169,300 | 190,170 |
Prepaids | 2,307,724 | 5,494,877 |
Total current assets | 13,516,712 | 33,558,709 |
Non-current Assets | ||
Goodwill | 5,940,409 | |
Equipment | 404,691 | 297,043 |
Intangible assets | 179,801 | 593,901 |
Investments | 192,583 | 291,066 |
Notes receivable | 964,006 | |
Right of use assets | 344,746 | 468,106 |
TOTAL ASSETS | 14,638,533 | 42,113,240 |
Current Liabilities | ||
Trade payables and accrued liabilities | 2,816,676 | 799,139 |
Customer deposits | 194,758 | 172,134 |
Deferred income | 63,690 | 73,286 |
Loans payable | 81,512 | 6,745 |
Derivative liability | 57,314 | 5,560,002 |
Lease liabilities | 133,962 | 110,481 |
Total current liabilities | 3,347,912 | 6,721,787 |
Non-current Liabilities | ||
Loans payable | 5,059 | 86,572 |
Lease liabilities | 244,681 | 378,642 |
TOTAL LIABILITIES | 3,597,652 | 7,187,001 |
SHAREHOLDERS’ EQUITY | ||
Share capital | 83,600,089 | 81,038,365 |
Reserves – share-based payments | 7,264,340 | 6,406,117 |
Accumulated deficit | (79,976,546) | (52,322,182) |
Accumulated other comprehensive income (loss) | 152,998 | (196,061) |
TOTAL SHAREHOLDERS’ EQUITY | 11,040,881 | 34,926,239 |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ 14,638,533 | $ 42,113,240 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - CAD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
REVENUE | ||
Sales of goods | $ 5,550,432 | $ 5,103,399 |
Provision of services | 2,054,627 | 1,950,466 |
TOTAL REVENUE | 7,605,059 | 7,053,865 |
COST OF SALES | (6,814,384) | (4,410,777) |
GROSS PROFIT | 790,675 | 2,643,088 |
OPERATING EXPENSES | ||
Amortization | 179,482 | 135,966 |
Depreciation | 593,277 | 175,098 |
Director fees | 522,349 | 370,094 |
Insurance | 3,722,237 | 2,962,767 |
Office and miscellaneous | 5,397,961 | 6,455,998 |
Professional fees | 6,821,583 | 4,445,949 |
Research and development | 651,302 | 510,895 |
Share-based payments | 3,311,024 | 3,952,595 |
Travel | 396,388 | 143,904 |
Wages and salaries | 6,105,020 | 2,768,010 |
Total operating expenses | (27,700,623) | (21,921,276) |
OTHER INCOME (EXPENSE) | ||
Change in fair value of derivative liability | 5,502,688 | 8,149,812 |
Finance and other costs | 44,345 | 5,074 |
Foreign exchange gain (loss) | 745,102 | 362,448 |
Loss on disposal of assets | (10,755) | |
Loss on write-off of notes receivable | (309,385) | (891,471) |
Government income | 2,446 | 24,148 |
Write down of deposit | (228,572) | |
Loss on impairment of goodwill and intangibles | (6,454,914) | (4,579,763) |
Other income (expense) | (35,371) | 4,968 |
NET LOSS | (27,654,364) | (16,202,972) |
Items that may be reclassified to profit or loss | ||
Foreign exchange translation | 447,542 | 136,475 |
Items that will not be reclassified to profit or loss | ||
Change in fair value of equity investments at FVOCI | (98,483) | (332,640) |
COMPREHENSIVE LOSS | $ (27,305,305) | $ (16,399,137) |
Net loss per share | ||
Basic & diluted | $ (0.82) | $ (0.59) |
Weighted average number of common shares outstanding - basic & diluted | 33,556,969 | 27,787,348 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - CAD ($) | Issued capital [member] | Reserve of share-based payments [member] | Retained earnings [member] | Reserve of gains and losses from investments in equity instruments [member] | Reserve of exchange differences on translation [member] | Total |
Balance at Dec. 31, 2020 | $ 36,943,304 | $ 3,024,007 | $ (36,119,210) | $ 104 | $ 3,848,205 | |
Balance, shares at Dec. 31, 2020 | 17,218,695 | |||||
IfrsStatementLineItems [Line Items] | ||||||
Shares issued for acquisition of Vital | $ 2,303,999 | 1,241,250 | 3,545,249 | |||
Balance, shares | 1,200,000 | |||||
Shares issued for financing | $ 36,092,187 | 36,092,187 | ||||
Balance, shares | 11,584,657 | |||||
Share issue costs | $ (4,678,821) | 864,060 | (3,814,761) | |||
Shares issued for the exercise of RSUs | $ 1,752,052 | (1,752,052) | ||||
Shares issued for the exercise of RSUs, shares | 448,660 | |||||
Shares issued for exercise of warrants | $ 4,929,790 | 4,929,790 | ||||
Shares isued for exercise of warrants, shares | 1,939,534 | |||||
Shares issued for exercise of stock options | $ 1,937,866 | (923,743) | 1,014,123 | |||
Shares issued for exercise of stock options, shares | 405,499 | |||||
Shares issued in lieu of cash | $ 1,757,988 | 1,757,988 | ||||
Balance, shares | 371,901 | |||||
Share-based payments | 3,952,595 | 3,952,595 | ||||
Net loss | (16,202,972) | (16,202,972) | ||||
Change in fair value of equity investments at FVOCI | (332,640) | (332,640) | ||||
Translation of foreign operations | 136,475 | 136,475 | ||||
Balance at Dec. 31, 2021 | $ 81,038,365 | 6,406,117 | (52,322,182) | (332,640) | 136,579 | 34,926,239 |
Balance, shares at Dec. 31, 2021 | 33,168,946 | |||||
IfrsStatementLineItems [Line Items] | ||||||
Share issue costs | $ (5,122) | (5,122) | ||||
Shares issued for the exercise of RSUs | $ 2,427,801 | (2,427,801) | ||||
Shares issued for the exercise of RSUs, shares | 1,072,595 | |||||
Shares issued for exercise of warrants | $ 87,170 | 87,170 | ||||
Shares isued for exercise of warrants, shares | 16,538 | |||||
Shares issued for exercise of stock options | $ 51,875 | (25,000) | 26,875 | |||
Shares issued for exercise of stock options, shares | 12,500 | |||||
Share-based payments | 3,311,024 | 3,311,024 | ||||
Net loss | (27,654,364) | (27,654,364) | ||||
Change in fair value of equity investments at FVOCI | (98,483) | (98,483) | ||||
Translation of foreign operations | 447,542 | 447,542 | ||||
Balance at Dec. 31, 2022 | $ 83,600,089 | $ 7,264,340 | $ (79,976,546) | $ (431,123) | $ 584,121 | $ 11,040,881 |
Balance, shares at Dec. 31, 2022 | 34,270,579 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - CAD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
OPERATING ACTIVITIES | ||
Net loss | $ (27,654,364) | $ (16,202,972) |
Adjustments for: | ||
Amortization | 179,482 | 135,966 |
Depreciation | 593,277 | 175,098 |
Change in fair value of derivative liability | (5,502,688) | (8,149,812) |
Write down of inventory | 1,976,514 | |
Impairment of notes receivable | 309,385 | 891,471 |
Impairment of goodwill and intangibles | 6,454,914 | 4,579,763 |
Write down of deposit | 228,572 | |
Finance and other costs | (34,427) | (926) |
Income from government assistance | (24,148) | |
Share-based payments | 3,311,024 | 3,952,595 |
Adjustment for profit loss | (20,138,311) | (14,642,965) |
Net changes in non-cash working capital items: | ||
Receivables | (681,838) | (596,336) |
Inventory | (150,241) | (2,157,203) |
Prepaids | 2,958,581 | (3,401,868) |
Trade payables and accrued liabilities | 1,661,697 | (1,044,133) |
Customer deposits | 22,624 | (213,315) |
Deferred income | (21,543) | 51,186 |
Cash used in operating activities | (16,349,031) | (22,004,634) |
INVESTING ACTIVITIES | ||
Cash paid for acquisition, net of cash received | (466,643) | |
Purchase of equipment | (79,713) | (212,579) |
Disposal of equipment | 10,755 | |
Purchase of intangible assets | (4,684) | |
Purchase of investments | (623,706) | |
Repayment (Issuance) of notes receivable | 842,297 | (2,002,678) |
Cash provided by (used in) investing activities | 768,655 | (3,305,606) |
FINANCING ACTIVITIES | ||
Proceeds from issuance of common shares for financing | 44,255,651 | |
Share issue costs | (5,122) | (3,814,762) |
Proceeds from issuance of common shares for warrants exercised | 87,170 | 4,929,790 |
Proceeds from issuance of common shares for stock options exercised | 26,875 | 1,014,123 |
Proceeds from issuance of loans | 60,000 | |
Repayment of loans | (6,746) | (48,747) |
Repayment of lease liabilities | (150,275) | (128,996) |
Cash provided by (used in) financing activities | (48,098) | 46,267,059 |
Effects of exchange rate changes on cash | 447,542 | 136,478 |
Change in cash | (15,628,474) | 20,956,819 |
Cash and cash equivalents, beginning of year | 23,075,713 | 1,982,416 |
Cash and cash equivalents, end of year | 7,894,781 | 23,075,713 |
Cash and cash equivalents consist of the following: | ||
Cash held in banks | 7,500,607 | 22,729,212 |
Guaranteed investment certificate | 394,174 | 346,501 |
Cash and cash equivalents | $ 7,894,781 | $ 23,075,713 |
NATURE AND CONTINUANCE OF OPERA
NATURE AND CONTINUANCE OF OPERATIONS | 12 Months Ended |
Dec. 31, 2022 | |
Nature And Continuance Of Operations | |
NATURE AND CONTINUANCE OF OPERATIONS | 1. NATURE AND CONTINUANCE OF OPERATIONS Draganfly Inc. (the “Company”) was incorporated on June 1, 2018 under the Business Corporations Act (British Columbia). The Company creates quality, cutting-edge unmanned and remote data collection and analysis platforms and systems that are designed to revolutionize the way companies do business. Share consolidation During the year ended December 31, 2021 in conjunction with its Regulation A financing, the Company underwent a share consolidation at a 5-1 ratio. All reference to share, per share amounts, warrants, RSU’s and stock options in these financial statements have been retroactively restated to reflect the consolidation. These consolidated financial statements have been prepared on the assumption that the Company will continue as a going concern, meaning it will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the ordinary course of operations. To date, the Company has not been profitable and has an accumulated deficit of $ 79,976,546 |
BASIS OF PREPARATION
BASIS OF PREPARATION | 12 Months Ended |
Dec. 31, 2022 | |
BASIS OF PREPARATION | 2. BASIS OF PREPARATION Statement of Compliance These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and interpretations issued by the International Reporting Interpretation Committee (“IFRIC”). The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all years presented, unless otherwise stated. These consolidated financial statements were authorized for issue by the Board of Directors on March 27, 2023. Basis of consolidation Each subsidiary is fully consolidated from the date of acquisition, being the date on which the Company obtains control, and continue to be consolidated until the date when such control ceases. The consolidated financial statements include the accounts and results of operations of the Company and its wholly owned subsidiaries listed in the following table: SCHEDULE OF RESULTS OF OPERATIONS Name of Subsidiary Place of Incorporation Ownership Interest Draganfly Innovations Inc. Canada 100 Draganfly Innovations USA, Inc. US 100 Dronelogics Systems Inc. Canada 100 All intercompany balances and transactions were eliminated on consolidation. Significant estimates and assumptions The preparation of consolidated financial statements in accordance with IFRS requires the Company to make estimates and assumptions about reported amounts at the date of the consolidated financial statements and in the future. The Company’s management reviews these estimates and underlying assumptions on an ongoing basis, based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Revisions to estimates are adjusted for prospectively in the period in which the estimates are revised. Draganfly Inc. Notes to the Consolidated Financial Statements For the Year Ended December 31, 2022 Expressed in Canadian Dollars 2. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (CONT’D Impairment of Non-financial assets The CGU’s recoverable amount is evaluated using the higher of the value in use and fair value less costs to sell. In determining the recoverable amount, the Company utilizes discounted cash flow techniques. Management calculates the discounted cash flows based upon its best estimate of a number of economic, operating, engineering, environmental, political and social assumptions. Any changes in the assumptions due to changing circumstances may affect the recoverable amount estimate. Share-based payments The cost of share-based payment transactions with directors, officers and employees are measured by reference to the fair value of the equity instruments. Estimating fair value for share-based payment transactions requires determining the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determining and making assumptions about the most appropriate inputs to the valuation model including the expected life, volatility, risk-free interest rate, expected forfeiture rate and dividend yield of the stock option. Income taxes Provisions for income taxes are made using the best estimate of the amount expected to be paid based on a qualitative assessment of all relevant factors. The Company reviews the adequacy of these income tax provisions at the end of each reporting period. However, it is possible that at some future date an additional liability could result from audits by tax authorities. Where the final outcome of these tax-related matters is different from the amounts that were initially recorded, such differences will affect the tax provisions in the period in which such determination is made. Deferred tax assets are recognized when it is determined that the company is likely to recognize their recovery from the generation of taxable income. Inventory Inventory is valued at the lower of cost and net realizable value. Net realizable value is determined with reference to the estimated selling price less costs to sell. The Company estimates selling price based upon assumptions about future demand and current and anticipated retail market conditions. The future realization of these inventories may be affected by future technology or other market- driven changes that may reduce future selling prices. Contingencies The assessment of contingencies involves the exercise of significant judgment and estimates of the outcome of future events. In assessing loss contingencies related to legal proceedings that are pending against the Company and that may result in regulatory or government actions that may negatively impact the Company’s business or operations, the Company and its legal counsel evaluate the perceived merits of the legal proceeding or unasserted claim or action as well as the perceived merits of the nature and amount of relief sought or expected to be sought, when determining the amount, if any, to recognize as a contingent liability or when assessing the impact on the carrying value of the Company’s assets. Contingent assets are not recognized in the consolidated financial statements. Investments in Private companies Where the fair value of investments in private companies recorded on the statement of financial position cannot be derived from active markets, they are determined using a variety of valuation techniques. The inputs to these models are derived from observable market data where possible, but where observable market data is not available, judgment is required to establish fair value and this value may not be indicative of recoverable value. Draganfly Inc. Notes to the Consolidated Financial Statements For the Year Ended December 31, 2022 Expressed in Canadian Dollars 2. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (CONT’D Expected credit losses on trade receivables and notes receivable When determining expected credit losses (“ECLs”), the Company considers the historic credit losses observed by the Company, customer-specific payment history and economic conditions. When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL’s, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Company’s historical experience, informed credit assessment ad forward-looking information Useful lives of equipment and intangible assets Estimates of the useful lives of equipment and intangible assets are based on the period over which the assets are expected to be available for use. The estimated useful lives are reviewed annually and are updated if expectations differ from previous estimates due to physical wear and tear, technical or commercial obsolescence, and legal or other limits on the use of the relevant assets. In addition, the estimation of the useful lives of the relevant assets may be based on internal technical evaluation and experience with similar assets. It is possible, however, that future results of operations could be materially affected by changes in the estimates brought about by changes in the factors mentioned above. The amounts and timing of recorded expenses for any period would be affected by changes in these factors and circumstances. A reduction in the estimated useful lives of the equipment would increase the recorded expenses and decrease the non-current assets. Significant judgments The preparation of consolidated financial statements in accordance with IFRS requires the Company to make judgments, apart from those involving estimates, in applying accounting policies. The most significant judgments in applying the Company’s consolidated financial statements include: Business combinations The definition of whether a set of assets acquired and liabilities assumed constitute a business may require the Company to make certain judgements taking into account all facts and circumstances. A business is presumed to be an integrated set of activities and assets capable of being conducted and managed for the purpose of providing a return in the form of dividends, lower costs, or economic benefits. Business combination versus asset acquisition The Company considered the applicability of IFRS 3 – Business Combinations (“IFRS 3”) with respect to acquisitions (Note 3). IFRS 3 defines a business as having a system where inputs enter a process to produce outputs. The Company has determined that the acquisition of Dronelogics Systems Inc. and certain assets of Vital Intelligence Inc. are business combinations and, accordingly, have accounted for as such. Other significant judgments − The assessment of the Company’s ability to continue as a going concern and whether there are events or conditions that may give rise to significant uncertainty; − the classification of financial instruments; − the assessment of revenue recognition using the five-step approach under IFRS 15; and − the determination of the functional currency of the company. Foreign currency translation Transactions in foreign currencies are translated into the functional currency at rates of exchange at the time of such transactions. Monetary assets and liabilities are translated at the reporting period rate of exchange. Non-monetary assets and liabilities are translated at historical exchange rates. Gains and losses resulting from foreign exchange adjustments are included in profit or loss. Draganfly Inc. Notes to the Consolidated Financial Statements For the Year Ended December 31, 2022 Expressed in Canadian Dollars 2. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (CONT’D The functional currencies of the parent company and each subsidiary are as follows: SCHEDULE OF FUNCTIONAL CURRENCIES Draganfly Inc. Canadian Dollar Draganfly Innovations Inc. Canadian Dollar Draganfly Innovations USA, Inc. US Dollar Dronelogics Systems Inc. Canadian Dollar Financial statements of subsidiaries for which the functional currency is not the Canadian dollar are translated into Canadian dollars as follows: all asset and liability accounts are translated at the year-end exchange rate and all revenue and expense accounts and cash flow statement items are translated at average exchange rates for the year. The resulting translation gains and losses are recorded as exchange differences on translation of foreign operations in other comprehensive loss. Share-based payments The Company operates a stock option plan. Share-based payments to employees are measured at the grant date fair value of the instruments issued and amortized over the vesting periods. Share-based payments to non-employees are measured at the fair value of the goods or services received or the fair value of the equity instruments issued, if it is determined the fair value of the goods or services cannot be reliably measured, and are recorded at the date the goods or services are received. The corresponding amount is recorded to the share-based payment reserve. The fair value of options is determined using a Black–Scholes Option Pricing Model. The number of options expected to vest is reviewed and adjusted at the end of each reporting period such that the amount recognized for services received as consideration for the equity instruments granted shall be based on the number of equity instruments that eventually vest. Amounts recorded for forfeited or expired unexercised options are transferred to deficit in the year of forfeiture or expiry. Amounts recorded for forfeited unvested options are reversed in the period the forfeiture occurs. Restricted Share Units The restricted share units (“RSUs”) entitle employees, directors, or officers to either the issuance of common shares or cash payments payable upon vesting based on vesting terms determined by the Company’s Board of Directors at the time of the grant. On the grant date of RSUs, the Company determines whether it has a present obligation to settle in cash. If the Company has a present obligation to settle in cash, the RSUs are accounted for as liabilities, with the fair value remeasured at the end of each reporting period and at the date of settlement, with any changes in fair value recognized in profit or loss for the period. RSUs settled in common share are measured at the fair value of awards on the grant date using the prior days closing price. Amounts recorded for forfeited unvested RSUs are reversed in the period the forfeiture occurs. The expense is recognized on a graded vesting basis over the vesting period, with a corresponding charge to profit or loss. Loss per share Basic loss per share is calculated by dividing the loss attributable to common shareholders by the weighted average number of common shares outstanding in the period. For all periods presented, the loss attributable to common shareholders equals the reported loss attributable to owners of the Company. Diluted income per share is calculated by the treasury stock method. Under the treasury stock method, the weighted average number of common shares outstanding for the calculation of diluted loss per share assumes that the proceeds to be received on the exercise of dilutive share options and warrants are used to repurchase common shares at the average market price during the period. For the periods presented, the Company incurred a loss and therefore basic loss per share equals diluted loss per share. Draganfly Inc. Notes to the Consolidated Financial Statements For the Year Ended December 31, 2022 Expressed in Canadian Dollars 2. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (CONT’D Financial Instruments Financial instruments are accounted for in accordance with IFRS 9 Financial Instruments: Classification and Measurement. A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. SCHEDULE OF FINANCIAL INSTRUMENTS Financial assets/liabilities Classification Cash Amortized cost Accounts receivable Amortized cost Notes receivable Amortized cost Investments Fair value through other comprehensive income Accounts payable Amortized cost Customer deposits Amortized cost Loans payable Amortized cost Derivative liability Fair value through profit or loss a) Financial assets Classification and measurement The Company classifies its financial assets in the following categories: at fair value through profit or loss (“FVTPL”), at fair value through other comprehensive income (“FVTOCI”) or at amortized cost. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition. The classification of debt instruments is driven by the business model for managing the financial assets and their contractual cash flow characteristics. Debt instruments are measured at amortized cost if the business model is to hold the instrument for collection of contractual cash flows and those cash flows are solely principal and interest. If the cash flows are not solely principal and interest, it is classified as FVTPL. Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payments of principal and interest. Equity instruments that are held for trading (including all equity derivative instruments) are classified as FVTPL, for other equity instruments, on the day of acquisition the Company can make an irrevocable election (on an instrument by-instrument basis) to designate them as at FVTOCI. Financial assets at FVTPL Financial assets carried at FVTPL are initially recorded at fair value and transaction costs are recorded to profit or loss. Realized and unrealized gains and losses arising from changes in the fair value of financial assets held at FVTPL are included in the profit or loss in the period in which they arise. Derivatives are also categorized as FVTPL unless they are designated as hedges. Financial assets at FVTOCI Financial assets carried at FVTOCI are initially recognized at fair value plus transaction costs. Subsequently they are measured at fair value, with gains and losses arising from changes in fair value recognized in other comprehensive income. Draganfly Inc. Notes to the Consolidated Financial Statements For the Year Ended December 31, 2022 Expressed in Canadian Dollars 2. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (CONT’D Financial assets at amortized cost Financial assets at amortized cost are initially recognized at fair value and subsequently carried at amortized cost less any impairment. They are classified as current assets or non-current assets based on their maturity date. Impairment of financial assets at amortized cost The Company recognizes a loss allowance for expected credit losses on financial assets that are measured at amortized cost. At each reporting date, the loss allowance for the financial asset is measured at an amount equal to the lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. If at the reporting date, the financial asset has not increased significantly since initial recognition, the loss allowance is measured for the financial asset at an amount equal to twelve month expected credit losses. For trade receivables the Company applies the simplified approach to providing for expected credit losses, which allows the use of a lifetime expected loss provision. Impairment losses on financial assets carried at amortized cost are reversed in subsequent periods if the amount of the loss decreases and the decrease can be objectively related to an event occurring after the impairment was recognized. Derecognition of financial assets Financial assets are derecognized when the risks and rewards of ownership have been transferred. Gains and losses on derecognition of financial assets classified as FVTPL or amortized cost are recorded to profit or loss. Gains or losses on financial assets classified as FVTOCI remain within accumulated other comprehensive loss. b) Financial liabilities The Company classifies its financial liabilities into one of two categories as follows: FVTPL - This category comprises derivatives and financial liabilities incurred principally for the purpose of selling or repurchasing in the near term. They are carried at fair value with changes in fair value recognized in profit or loss. Other financial liabilities - This category consists of liabilities carried at amortized cost using the effective interest method. Trade payables, customer deposits and loans are included in this category. Derecognition of financial liabilities Financial liabilities are derecognized when its contractual obligations are discharged, cancelled, or expire. The Company also derecognizes a financial liability when the terms of the liability are modified such that the terms and/or cash flows of the modified instrument are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value. Gains and losses on derecognition are recognized in profit or loss. Impairment of non-financial assets The carrying amounts of the non-financial assets are reviewed at each reporting date to determine whether there is any indication of impairment. If indicators exist, then the asset’s recoverable amount is estimated. The recoverable amounts of the following types of intangible assets are measured annually, whether or not there is any indication that it may be impaired: ● an intangible asset with an indefinite useful life; ● an intangible asset not yet available for use; and ● goodwill recognized in a business combination. The recoverable amount of an asset or cash-generating unit (“CGU”) is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest identifiable group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets. Draganfly Inc. Notes to the Consolidated Financial Statements For the Year Ended December 31, 2022 Expressed in Canadian Dollars 2. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (CONT’D If there is an indication that a corporate asset may be impaired, then the recoverable amount is determined for the CGU to which the corporate asset belongs. An impairment loss is recognized if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount. Impairment losses are recognized in profit or loss. Impairment losses recognized in respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the units, and then to reduce the carrying amounts of the other assets in the unit (group of units) on a pro rata basis. In respect of assets other than goodwill and intangible assets that have indefinite useful lives, impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed in a subsequent period when there has been an increase in the recoverable amount of a previously impaired asset or CGU. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized. Income taxes Current income tax: Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date, in the countries where the Company operates and generates taxable income. Current income taxes relating to items recognized directly in other comprehensive income or equity is recognized in other comprehensive income or equity and not in profit or loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate. Deferred income tax: Deferred income tax is recognized, using the asset and liability method, on temporary differences at the reporting date arising between the tax bases of assets and liabilities and their carrying amounts for financial reporting. The carrying amount of deferred income tax assets is reviewed at the end of each reporting period and recognized only to the extent that it is probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation authority. Inventory Inventory consists of raw materials and finished goods for manufacturing of multi-rotor helicopters, industrial areal video systems, civilian small unmanned aerial systems or vehicles, health monitoring equipment, and wireless video systems. Inventory is initially valued at cost and subsequently at the lower of cost and net realizable value. Net realizable value is determined as the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. Cost is determined using the weighted average cost basis. The Company reviews inventory for obsolete and slow-moving goods and any such inventory is written-down to net realizable value. Draganfly Inc. Notes to the Consolidated Financial Statements For the Year Ended December 31, 2022 Expressed in Canadian Dollars 2. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (CONT’D Revenue recognition Revenue comprises the fair value of consideration received or receivable for the sale of goods and consulting services in the ordinary course of the Company’s business. Revenue is shown net of return allowances and discounts. Sales of goods The Company manufactures and sells a range of multi-rotor helicopters, industrial aerial video systems, and civilian small unmanned aerial systems or vehicles. Sales are recognized at a point-in-time when control of the products has transferred, being when the products are delivered to the customer and there is no unfulfilled obligation that could affect the customer’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location or picked up by the customer. Revenue from these sales is recognized based on the price specified in the contract, net of the estimated discounts and returns. Accumulated experience is used to estimate and provide for the discounts and returns, using the expected value method, and revenue is only recognized to the extent that it is highly probable that a significant reversal will not occur. To date, returns have not been significant. No element of financing is deemed present as the sales are made with a credit term of 30 days, which is consistent with market practice. Some contracts include multiple performance obligations, such as the manufacturing of hardware and support. Support is performed by another party and does not include an integration service. It is therefore accounted for as a separate performance obligation. In this case, the transaction price will be allocated to each performance obligation based on stand-alone selling price. Where is the stand-alone selling price is not directly observable, the price is estimated based on expect cost plus margin. Services The Company provides consulting, custom engineering, drones as a service, and investigating and solving on a project-by-project basis under fixed-price and variable price contracts. Revenue from providing services is recognized over time as the services are rendered. Rental equipment The Company provides rental of equipment which is measured based on rates through contracts or other written agreements with customers. Revenue is recognized in the period when services are performed and only when there is reasonable assurance that the revenue will be collected. Deferred Revenue A payment received is included as deferred revenue when products has yet be shipped to customers as of the period end. The amount to be recognized within twelve months following the year-end date is classified as current Cost of Goods Sold Cost of sales includes the expenses incurred to acquire and produce inventory for sale, including product costs, freight costs, as well as provisions for reserves related to product shrinkage, or lower of cost and net realizable value adjustments as required. Intangible Assets and Goodwill An intangible asset is an identifiable asset without physical substance. An asset is identifiable if it is separable, or arises from contractual or legal rights, regardless of whether those rights are transferrable or separable from the Company or from other rights and obligations. Intangible assets include intellectual property, which consists of patent and trademark applications, brands and software. Intangible assets acquired externally are measured at cost less accumulated amortization and impairment losses. The cost of a group of intangible assets acquired is allocated to the individual intangible assets based on their relative fair values. The cost of intangible assets acquired externally comprises its purchase price and any directly attributable cost of preparing the asset for its intended use. Research and development costs incurred subsequent to the acquisition of externally acquired intangible assets and on internally generated intangible assets are accounted for as research and development costs. Draganfly Inc. Notes to the Consolidated Financial Statements For the Year Ended December 31, 2022 Expressed in Canadian Dollars 2. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (CONT’D Intangible assets with finite useful lives are amortized on a straight line basis over the expected life of each intellectual property to write off the cost of the assets from the date they are available for use. SCHEDULE OF INTANGIBLE ASSETS USEFUL LIVES Class of intangible asset Useful live Customer relationship 5 years Brand 5 years Software 5 years Goodwill represents the excess of the value of the consideration transferred over the fair value of the net identifiable assets and liabilities acquired in a business combination. Goodwill is allocated to the cash generating unit to which it relates. Equipment Equipment is stated at historical cost less accumulated depreciation and accumulated impairment losses. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to the statement of comprehensive loss during the financial period in which they are incurred. Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognized in the statement of comprehensive loss. Depreciation is generally calculated on a declining balance method to write off the cost of the assets to their residual values over their estimated useful lives. Depreciation for leasehold improvements is fully expensed over the expected term of the lease. The depreciation rates applicable to each category of equipment are as follows: SCHEDULE OF DEPRECIATION RATES Class of equipment Depreciation rate Computer equipment 30 Furniture and equipment 20 Leasehold improvements Expected lease term Vehicles 30 Research and development expenditures Expenditures on research are expensed as incurred. Research activities include formulation, design, evaluation and final selection of possible alternatives, products, processes, systems or services. Development expenditures are expensed as incurred unless the Company can demonstrate all of the following: (i) the technical feasibility of completing the intangible asset so that it will be available for use or sale; (ii) its intention to complete the intangible asset and use or sell it; (iii) its ability to use or sell the intangible asset; (iv) how the intangible asset will generate probable future economic benefits. The Company can also demonstrate the existence of a market for the output of the intangible asset or the intangible asset itself or, if it is to be used internally, the usefulness of the intangible asset; (v) the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and (vi) its ability to measure reliably the expenditure attributable to the intangible asset during its development. Draganfly Inc. Notes to the Consolidated Financial Statements For the Year Ended December 31, 2022 Expressed in Canadian Dollars 2. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (CONT’D Government Assistance Government grants are recognized when there is reasonable assurance that the grant will be received and all attached conditions will be complied with. When the grant relates to an expense item, it is recognized as income on a systematic basis over the period that the related costs, for which it is intended to compensate, are expensed. When the grant relates to an asset, the cost of the asset is reduced by the amount of the grant and the grant is recognized as income in equal amounts over the expected useful life of the asset. SR&ED Investment tax |
VITAL INTELLIGENCE ACQUISITION
VITAL INTELLIGENCE ACQUISITION | 12 Months Ended |
Dec. 31, 2022 | |
Vital Intelligence Acquisition | |
VITAL INTELLIGENCE ACQUISITION | 3. VITAL INTELLIGENCE ACQUISITION On March 25, 2021, the Company acquired the assets of Vital Intelligence Inc. (“Vital”), a company that had developed a health/telehealth platform that could detect a number of key underlying respiratory symptoms. The Company acquired it for consideration of: (a) a cash payment of $ 500,000 and (b) 1,200,000 units of the Company with each unit being comprised of one common share and one warrant (the “Acquisition”). Each warrant will entitle the holder to acquire one common share for a period of 24 months following closing for $ 13.35 300,000 . The units were issued on March 22, 2021. On August 19, 2021 the parties agreed to reduce the final payment from $250,000 to $227,984 due to certain assets listed in the purchase agreement had not been delivered by Vital . The units of the Company are to be releasable from escrow in accordance with the terms and conditions of the agreement, as follows: a) 300,000 b) 300,000 2,000,000 c) 300,000 4,000,000 d) 300,000 6,000,000 Upon acquisition, the 900,000 ● A weighted average probability of achieving the milestones necessary to release the shares held in escrow, and ● Discounted due to the lack of liquidity. On acquisition, the fair value of the derivative liability (note 17) was $ 4,797,717 . At December 31, 2022, the liability was revalued based upon new weighted average probabilities of achieving the revenue milestones. As a result, the fair value was adjusted to $ 57,314 (2021 – $ 694,230 ), with the difference flowing through profit or loss. Draganfly Inc. Notes to the Consolidated Financial Statements For the Year Ended December 31, 2022 Expressed in Canadian Dollars 3. VITAL INTELLIGENCE ACQUISITION (CONT’D) SCHEDULE OF CONTINGENT CONSIDERATION Contingent consideration Fair value of contingent consideration $ 4,797,717 Change in fair value of contingent consideration (4,103,487 ) Contingent consideration at December 31, 2021 694,230 Change in fair value of contingent consideration (636,916 ) Contingent consideration at December 31, 2022 (note 17) $ 57,314 The PPA is as follows: SCHEDULE OF PURCHASE PRICE ALLOCATION FOR VITAL INTELLIGENCE Number of units of Draganfly Inc. 578,248 Fair value of units $ 14.43 Fair value of units of Draganfly Inc. $ 8,342,966 Cash portion of purchase price 466,643 Total $ 8,809,609 Identifiable intangible assets Brand $ 23,000 Software 433,000 Identifiable intangible assets 456,000 Goodwill 8,353,609 Total consideration $ 8,809,609 Significant estimates were as follows: ● Number of units issued based upon a weighted average calculation for the Company achieving the revenue targets. ● Brand fair value based on an income approach, specifically relief from royalty methodology, using a reasonable royalty rate of 0.25 14.4 ● Software fair value based on an income approach, specifically relief from royalty methodology, using a reasonable royalty rate of 5.0 14.4 Furthermore, the excess of the consideration paid over the fair value of the identifiable assets (liabilities) acquired was recognized as goodwill, which primarily consisted of continued development of the technology platform integrating the latest technological developments. |
CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS | 12 Months Ended |
Dec. 31, 2022 | |
Cash and cash equivalents [abstract] | |
CASH AND CASH EQUIVALENTS | 4. CASH AND CASH EQUIVALENTS SCHEDULE OF CASH AND CASH EQUIVALENTS December 31, 2022 December 31, 2021 Cash held in banks $ 7,500,607 $ 22,729,212 Guaranteed investment certificates 394,174 346,501 Cash and Cash Equivalents $ 7,894,781 $ 23,075,713 Draganfly Inc. Notes to the Consolidated Financial Statements For the Year Ended December 31, 2022 Expressed in Canadian Dollars 4. CASH AND CASH EQUIVALENTS (CONT’D) On March 27, 2020, the Company purchased a $ 142,000 1 0.50 142,710 1 0.10 142,852 1 1.00 143,436 143,436 1 4.5 On May 28, 2021, the Company purchased an additional $ 140,000 1 0.35 140,493 1 0.75 140,738 140,738 1 4.5 On December 21, 2021, the Company purchased an additional $ 50,000 1 0.05 50,000 50,018 nd five months 0.05 All GIC’s must be maintained and renewed upon maturity until such time as the associated credit cards are cancelled. At any time, the Company can redeem the GIC’s and correspondingly cancel the credit cards at its discretion. |
RECEIVABLES
RECEIVABLES | 12 Months Ended |
Dec. 31, 2022 | |
Schedule Of Amounts Receivable | |
RECEIVABLES | 5. RECEIVABLES SCHEDULE OF AMOUNTS RECEIVABLE December 31, 2022 December 31, 2021 Trade accounts receivable $ 1,343,795 $ 951,314 Corporate taxes receivable - 182,820 Taxes receivable 745,170 272,993 Trade and other receivables $ 2,088,965 $ 1,407,127 |
INVENTORY
INVENTORY | 12 Months Ended |
Dec. 31, 2022 | |
INVENTORY | 6. INVENTORY SCHEDULE OF INVENTORIES December 31, 2022 December 31, 2021 Finished goods $ 542,934 $ 3,017,363 Parts 513,008 373,459 Inventories $ 1,055,942 $ 3,390,822 During the year ended December 31, 2022, $ 6,048,348 3,420,713 1,976,514 nil Cost of sales consist of the following: SCHEDULE OF COST OF SALES December 31, 2022 December 31, 2021 Inventory $ 6,048,348 $ 3,420,713 Consulting and services 730,170 679,345 Other 35,866 310,719 Cost of sales $ 6,814,384 $ 4,410,777 Draganfly Inc. Notes to the Consolidated Financial Statements For the Year Ended December 31, 2022 Expressed in Canadian Dollars |
NOTES RECEIVABLE
NOTES RECEIVABLE | 12 Months Ended |
Dec. 31, 2022 | |
Notes Receivable | |
NOTES RECEIVABLE | 7. NOTES RECEIVABLE DISCLOSURE OF NOTES RECEIVABLE Maturity Date Rate Principal Interest Accretion (Impairment)/ Recovery Repayments Balance December 31, 2022 Note 1 (1) 2023-03-31 0 % $ 190,396 $ - $ 12,764 $ - $ (33,860 ) $ 169,300 Note 2 (1) 2024-09-22 5 % 1,003,682 48,992 27,971 (1,080,645 ) - - Note 3 2022-04-26 8 % - 37,177 - 771,260 (808,437 ) - Total $ 1,194,078 $ 86,169 $ 40,735 $ (309,385 ) $ (842,297 ) $ 169,300 Maturity date Rate Principal Interest Accretion (Impairment)/ Recovery Repayments Balance Maturity Date Rate Principal Interest Accretion (Impairment)/ Recovery Repayments Balance December 31, 2021 Note 1 (1) 2022-10-21 0 % $ 180,597 $ - 9,573 - - 190,170 Note 2 (1) 2024-09-22 5 % 943,385 13,156 7,465 - - 964,006 Note 3 2022-04-26 8 % 750,000 21,260 - (771,260 ) - - Note 4 (1) 2023-06-01 8 % 114,833 5,378 - (120,211 ) - - Total $ 1,988,815 $ 39,794 $ 17,038 $ (891,471 ) $ - $ 1,154,176 (1) These notes are denominated in US dollars and are converted to Canadian dollars at the reporting date. Note 1 was issued on April 4, 2021, is non-interest bearing and is secured by intellectual property. This note is measured at fair value through profit or loss. The parties agreed on an amended maturity date, whereby $ 34,860 ($ 25,000 USD) was paid on October 21, 2022, the original maturity date, and the remaining balance will be paid January 21, 2023. Subsequent to the year ended December 31, 2022, the parties mutually agreed to extend the maturity date to March 31, 2023 , with a partial repayment of $ 33,369 ($ 25,000 USD) due January 30, 2023. Note 2 was issued on September 9, 2021, bears interest at 5 %, is unsecured, and contains a conversion feature upon sale of the recipient. This note is measured at fair value through profit or loss. Management has determined that it is unlikely that the loan will be repaid or the Company will receive some other type of return. Therefore, the loan has been written down to $ Nil Note 3 was issued on November 17, 2021 pursuant to letter of intent on an acquisition that the Company is no longer pursuing. The loan is interest bearing at 8 April 26, 2022 nil 550,000 258,437 Note 4 bears interest at 8% Nil |
PREPAIDS
PREPAIDS | 12 Months Ended |
Dec. 31, 2022 | |
PREPAIDS | 8. PREPAIDS SCHEDULE OF PREPAID EXPENSES AND DEPOSITS December 31, 2022 December 31, 2021 Insurance $ 1,148,455 $ 2,938,246 Prepaid director fees - 107,763 Prepaid interest 1,889 6,969 Prepaid marketing services 733,417 1,638,179 Prepaid rent 12,485 - Prepaid subscriptions 29,194 35,687 Deposits (1) 382,284 768,033 Prepaid expenses and deposits $ 2,307,724 $ 5,494,877 (1) A deposit in the amount of $ 228,572 Draganfly Inc. Notes to the Consolidated Financial Statements For the Year Ended December 31, 2022 Expressed in Canadian Dollars |
INVESTMENTS
INVESTMENTS | 12 Months Ended |
Dec. 31, 2022 | |
INVESTMENTS | 9. INVESTMENTS SCHEDULE OF INVESTMENTS Balance at December 30, 2020 - Acquisitions 623,706 Change in fair value (332,640 ) Balance at December 31, 2021 291,066 Balance 291,066 Change in fair value (98,483 ) Balance at December 31, 2022 $ 192,583 Balance $ 192,583 Fair value of investments is comprised of: SCHEDULE OF FAIR VALUE OF INVESTMENT Public company shares $ 57,143 Private company shares 135,440 Balance at December 31, 2022 $ 192,583 Fair value of investments $ 192,583 Public company shares $ 142,857 Public company warrants 21,429 Private company shares 126,780 Balance at December 31, 2021 $ 291,066 Fair value of investments $ 291,066 On March 10, 2021, the Company purchased 1,428,571 500,000 The warrants have an exercise price of $ 0.50 March 17, 2023 SCHEDULE OF WEIGHTED AVERAGE ASSUMPTION FOR FAIR VALUES WARRANTS December 31, 2022 December 31, 2021 March 10, 2020 Risk free interest rate 4.07 % 0.91 % 0.28 % Expected volatility 116.00 % 124.09 % 150.88 % Expected life 0.21 2 2 Expected dividend yield 0 % 0 % 0 % On October 27, 2021, the Company purchased 50,000 common shares of a private company for USD$ 100,000 . Draganfly Inc. Notes to the Consolidated Financial Statements For the Year Ended December 31, 2022 Expressed in Canadian Dollars |
EQUIPMENT
EQUIPMENT | 12 Months Ended |
Dec. 31, 2022 | |
EQUIPMENT | 10. EQUIPMENT SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT Computer Equipment Furniture and Equipment Leasehold Improvements Software Vehicles Total Cost Balance at December 31, 2020 $ 24,397 $ 171,606 $ 4,352 $ 29,967 $ 27,652 $ 257,974 Additions 29,713 170,866 - - 12,000 212,579 Revaluation - - - - (3,619 ) (3,619 ) Balance at December 31, 2021 $ 54,110 $ 342,472 $ 4,352 $ 29,967 $ 36,033 $ 466,934 Property, plant and equipment, cost, beginning balance $ 54,110 $ 342,472 $ 4,352 $ 29,967 $ 36,033 $ 466,934 Additions 60,240 528,080 - - - 588,320 Disposals (18,688 ) (36,099 ) (4,352 ) (29,967 ) - (89,106 ) Balance at December 31, 2022 $ 95,662 $ 834,453 $ - $ - $ 36,033 $ 966,148 Property, plant and equipment, cost, ending balance $ 95,662 $ 834,453 $ - $ - $ 36,033 $ 966,148 Accumulated depreciation Balance at December 31, 2020 $ 12,392 $ 59,963 $ 3,220 $ 22,496 $ 6,033 $ 104,104 Charge for the year 12,899 42,314 1,132 2,241 7,201 65,787 Balance at December 31, 2021 $ 25,291 $ 102,277 $ 4,352 $ 24,737 $ 13,234 $ 169,891 Accumulated depreciation Property, plant and equipment, beginning balance $ 25,291 $ 102,277 $ 4,352 $ 24,737 $ 13,234 $ 169,891 Charge for the year 32,627 433,855 - - 3,435 469,917 Disposals (15,920 ) (33,342 ) (4,352 ) (24,737 ) - (78,351 ) Balance at December 31, 2022 $ 41,998 $ 502,790 $ - $ - $ 16,669 $ 561,457 Accumulated depreciation Property, plant and equipment, ending balance $ 41,998 $ 502,790 $ - $ - $ 16,669 $ 561,457 Net book value: December 31, 2021 $ 28,819 $ 240,195 $ - $ 5,230 $ 22,799 $ 297,043 December 31, 2022 $ 53,664 $ 331,663 $ - $ - $ 19,364 $ 404,691 Property, plant and equipment, net $ 53,664 $ 331,663 $ - $ - $ 19,364 $ 404,691 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL | 12 Months Ended |
Dec. 31, 2022 | |
INTANGIBLE ASSETS AND GOODWILL | 11. INTANGIBLE ASSETS AND GOODWILL SCHEDULE OF INTELLECTUAL PROPERTY Patents Customer Relationships Brand Software (1) Goodwill Total Cost Balance at December 31, 2020 $ 41,931 $ 197,000 $ - $ 119,000 $ 2,166,563 $ 2,524,494 Additions - - 23,000 433,000 8,353,609 8,809,609 Impairment - - - - (4,579,763 ) (4,579,763 ) Balance at December 31, 2021 $ 41,931 $ 197,000 $ 23,000 $ 552,000 $ 5,940,409 $ 6,754,340 Cost, beginning balance $ 41,931 $ 197,000 $ 23,000 $ 552,000 $ 5,940,409 $ 6,754,340 Additions - - - 4,684 - 4,684 Foreign exchange translation - - 1,571 29,576 257,782 288,929 Impairment - - (24,571 ) (462,577 ) (6,198,191 ) (6,685,339 ) Balance at December 31, 2022 $ 41,931 $ 197,000 $ - $ 123,683 $ - $ 362,614 Cost, ending balance $ 41,931 $ 197,000 $ - $ 123,683 $ - $ 362,614 Accumulated amortization Balance at December 31, 2020 $ 41,931 $ 26,267 $ - $ 15,866 $ - $ 84,064 Charge for the year - 34,147 3,450 98,369 - 135,966 Balance at December 31, 2021 41,931 60,414 3,450 114,235 - 220,030 Accumulated amortization, beginning balance 41,931 60,414 3,450 114,235 - 220,030 Charge for the year - 27,317 4,719 147,446 - 179,482 Accumulated amortization, Change for the period - 27,317 4,719 147,446 - 179,482 Foreign exchange translation - - 431 13,295 - 13,726 Impairment - - (8,600 ) (221,825 ) - (230,425 ) Accumulated amortization, Foreign exchange translation - - 431 13,295 - 13,726 Balance at December 31, 2022 $ 41,931 $ 87,731 $ - $ 53,151 $ - $ 182,813 Accumulated amortization, ending balance $ 41,931 $ 87,731 $ - $ 53,151 $ - $ 182,813 Net book value: December 31, 2021 $ - $ 136,586 $ 19,550 $ 437,765 $ 5,940,409 $ 6,534,310 December 31, 2022 $ - $ 109,269 $ - $ 70,532 $ - $ 179,801 Net book value $ - $ 109,269 $ - $ 70,532 $ - $ 179,801 (1) Software acquired via acquisition of Vital and Dronelogics. Brand On March 25, 2021, the Company acquired the assets of Vital (note 3) and assigned $ 23,000 to the fair value of the brand. Software On March 25, 2021, the Company acquired the assets of Vital and assigned $ 433,000 Goodwill On April 30, 2020, the Company acquired a 100 2,166,563 On March 25, 2021, the Company acquired the assets of Vital, which included goodwill. Goodwill was valued at $ 8,353,609 Draganfly Inc. Notes to the Consolidated Financial Statements For the Year Ended December 31, 2022 Expressed in Canadian Dollars 11. INTANGIBLE ASSETS AND GOODWILL (CONT’D) On December 31, 2022 the Company performed its annual goodwill impairment test on Vital and Dronelogics. The Company determined the recoverable amount based on a value in use calculation using the following key assumptions: ● 5 year post tax cash flow projections expected to be generated based on a financial forecast with a terminal growth rate of 2 % (2021 – 2 %). ● Budgeted cash flows calculated using a weighted average revenue EBITDA margin of 6.5 % (2021 – 14 %) for Dronelogics and 0 % (2021 – 42 %) for Vital respectively were estimated by management based on the past performance and future growth prospects as well as observed trends among comparable companies. ● Cash flows were discounted at the weighted average cost of capital of 19 % (2021 – 17 %) for Dronelogics and 29 % (2021 – 24 %) for Vital based on peer group averages and adjusted for the Company’s risk factors. Based on the annual goodwill impairment test, the Company determined that the goodwill for Dronelogics and Vital required impairment, as such the Company recorded an impairment charge of $ 2,166,563 (2021 – nil ) for Dronelogics and $ 4,031,628 (2021 - $ 4,579,763 ) for Vital. In addition to the goodwill, the Company deemed that the brand and software for Vital required impairment, as such the Company recorded an impairment charge of $ 15,971 and $ 240,752 respectively. The most sensitive inputs to the value in use model are the growth and discount rates. All else being equal: ● A 10 % reduction in the Value in use for the discounted cash flow model would result in a reduction of $ 104,248 for Dronelogics (2021 – $ 597,100 ) and $ Nil for Vital (2021 - $ 570,133 ). Changing the above assumption would have no impact on the carrying amount for Dronelogics and Vital. |
RIGHT OF USE ASSETS
RIGHT OF USE ASSETS | 12 Months Ended |
Dec. 31, 2022 | |
RIGHT OF USE ASSETS | 12. RIGHT OF USE ASSETS SCHEDULE OF RIGHT OF USE ASSETS Total Cost Balance at December 31, 2020 $ 242,967 Additions 447,242 Lease adjustment (7,092 ) Balance at December 31, 2021 and 2022 $ 683,117 Accumulated depreciation Balance at December 31, 2020 $ 98,548 Charge for the year 109,311 Historical correction 7,152 Balance at December 31, 2021 $ 215,011 Charge for the year 123,360 Balance at December 31, 2022 $ 338,371 Net book value: December 31, 2021 $ 468,106 December 31, 2022 $ 344,746 Draganfly Inc. Notes to the Consolidated Financial Statements For the Year Ended December 31, 2022 Expressed in Canadian Dollars |
LEASE LIABILITES
LEASE LIABILITES | 12 Months Ended |
Dec. 31, 2022 | |
LEASE LIABILITES | 13. LEASE LIABILITES The Company leases certain assets under lease agreements. The lease liabilities consist of leases of facilities and vehicles with terms ranging from one to five years. The leases are calculated using incremental borrowing rates ranging from 7.5% to 10.5% SCHEDULE OF OPERATING LEASE LIABILITIES Total Balance at December 31, 2020 $ 158,124 Additions 440,675 Interest expense 26,964 Lease payments (128,995 ) Lease removal (7,645 ) Balance at December 31, 2021 $ 489,123 Interest expense 39,795 Lease payments (150,275 ) Balance at December 31, 2022 $ 378,643 Which consists of: December 31, 2022 December 31, 2021 Current lease liability $ 133,962 $ 110,481 Non-current lease liability 244,681 378,642 Ending balance $ 378,643 $ 489,123 SCHEDULE OF OPERATING MATURITY ANALYSIS Maturity analysis Total Less than one year $ 147,340 One to three years 209,078 Four to five years 83,850 Total undiscounted lease liabilities 440,268 Amount representing interest (61,625 ) Lease liability $ 378,643 |
TRADE PAYABLES AND ACCRUED LIAB
TRADE PAYABLES AND ACCRUED LIABILITIES | 12 Months Ended |
Dec. 31, 2022 | |
TRADE PAYABLES AND ACCRUED LIABILITIES | 14. TRADE PAYABLES AND ACCRUED LIABILITIES SCHEDULE OF TRADE PAYABLES AND ACCRUED LIABILITIES December 31, 2022 December 31, 2021 Trade accounts payable $ 751,422 $ 362,890 Accrued liabilities 2,031,545 402,540 Government grant payable 33,709 33,709 Trade payables and accrued liabilities $ 2,816,676 $ 799,139 |
DEFERRED INCOME
DEFERRED INCOME | 12 Months Ended |
Dec. 31, 2022 | |
DEFERRED INCOME | 15. DEFERRED INCOME At times, the Company may take payment in advance for services to be rendered. These amounts are held and recognized as services are rendered. SCHEDULE OF DEFERRED INCOME December 31, 2022 December 31, 2021 Deferred income from customers $ 58,457 $ 68,053 Deferred income from government 5,233 5,233 Deferred Income $ 63,690 $ 73,286 Draganfly Inc. Notes to the Consolidated Financial Statements For the Year Ended December 31, 2022 Expressed in Canadian Dollars |
LOANS PAYABLE
LOANS PAYABLE | 12 Months Ended |
Dec. 31, 2022 | |
LOANS PAYABLE | 16. LOANS PAYABLE SCHEDULE OF LOANS PAYABLE December 31, 2022 December 31, 2021 Opening balance $ 93,317 $ 97,916 Issuance of loans payable - 60,000 Fair value adjustment (4,891 ) (24,576 ) Repayment of loans payable (6,746 ) (44,428 ) Accretion expense 4,891 4,405 Ending balance $ 86,571 $ 93,317 SCHEDULE OF LOANS Start Date Maturity Date Rate Carrying Value December 31, 2022 Carrying Value December 31, 2021 CEBA 2020-05-19 2023-12-31 0 % $ 37,383 $ 37,384 CEBA 2021-04-23 2023-12-31 0 % 37,383 37,383 Vehicle loan 2019-08-30 2024-09-11 6.99 % 11,805 18,550 Total $ 86,571 $ 93,317 On May 19, 2020, Dronelogics received a $ 40,000 25 10,000 three-year term 5 20,000 10,000 On April 23, 2021, Draganfly Innovations Inc. received a $ 60,000 20,000 three-year term 5 The CEBA loans are unsecured, and the vehicle loan is secured by the vehicle. Draganfly Inc. Notes to the Consolidated Financial Statements For the Year Ended December 31, 2022 Expressed in Canadian Dollars |
SHARE CAPITAL
SHARE CAPITAL | 12 Months Ended |
Dec. 31, 2022 | |
SHARE CAPITAL | 17. SHARE CAPITAL Authorized share capital Unlimited number of common shares without par value. Issued share capital During the year ended December 31, 2022, ● The Company issued 16,538 common shares for the exercise of warrants for $ 87,170 . ● The Company issued 12,500 26,875 ● The Company issued 1,072,595 During the year ended December 31, 2021, ● The Company issued 1,939,534 common shares for the exercise of warrants for $ 4,929,790 . ● The Company issued 448,660 common shares for the vesting of Restricted Share Units. ● The Company issued 405,499 common shares for the exercise of stock options for $ 1,014,123 . ● The Company issued 371,901 common shares in lieu of cash for services rendered. ● The Company issued 6,488,669 18,815,485 Each unit is comprised of one common share and one share purchase warrant. These warrants had a fair value of $0.57 USD allocated to them, have an exercise price of $3.55 USD per warrant, each convert to one common share, and have a life of two years. The fair value of $ 8,261,511 ● The Company issued 1,200,000 Each unit is comprised of one common share and one warrant. These warrants have an exercise price of $13.35 per warrant, each convert to one common share, and have a life of two years. ● The Company issued 5,095,966 25,538,213 Draganfly Inc. Notes to the Consolidated Financial Statements For the Year Ended December 31, 2022 Expressed in Canadian Dollars 17. SHARE CAPITAL (CONT’D) Stock Options The Company has adopted an incentive share compensation plan, which provides that the Board of Directors of the Company may from time to time, in its discretion, and in accordance with the CSE requirements, grant to directors, officers, employees, and technical consultants to the Company, non-transferable stock options to purchase common shares. The total number of common shares reserved and available for grant and issuance pursuant to this plan shall not exceed 20% (in the aggregate) of the issued and outstanding common shares from time to time. The number of options awarded and underlying vesting conditions are determined by the Board of Directors in its discretion. As at December 31, 2022, the Company had the following options outstanding and exercisable: SCHEDULE OF STOCK OPTIONS OUTSTANDING AND EXERCISABLE Grant Date Expiry Date Exercise Price Remaining Contractual Life (years) Number of Options Outstanding Number of Options Exercisable October 30, 2019 October 30, 2029 $ 2.50 6.84 286,665 286,665 November 19, 2019 November 19, 2029 $ 2.50 6.89 50,000 50,000 April 30, 2020 April 30, 2030 $ 2.50 7.33 85,000 85,000 April 30, 2020 April 30, 2030 $ 3.85 7.33 110,000 110,000 July 3, 2020 July 3, 2025 $ 3.20 2.51 100,000 100,000 November 24, 2020 November 24, 2030 $ 2.50 7.90 32,000 32,000 February 2, 2021 February 2, 2031 $ 13.20 8.10 30,000 20,000 March 8, 2021 March 8, 2026 $ 13.90 3.19 10,000 10,000 April 27, 2021 April 27, 2031 $ 10.15 8.33 147,666 50,326 September 9, 2021 September 9, 2026 $ 4.84 3.69 25,826 8,608 877,157 752,599 SCHEDULE OF STOCK OPTIONS OUTSTANDING AND EXERCISABLE Number of Options Weighted Average Exercise Price Outstanding, December 31, 2020 1,193,659 $ 2.75 Exercised (405,494 ) 2.50 Granted 247,826 10.12 Outstanding, December 31, 2021 1,035,991 $ 4.60 Exercised (12,500 ) 2.15 Forfeited (146,334 ) 4.77 Outstanding, December 31, 2022 877,157 $ 4.60 No options were granted by the Company for the year ended December 31, 2022 During the year ended December 31, 2021, ● The Company granted 30,000 13.20 10 ● The Company granted 10,000 13.90 5 ● The Company granted 182,000 10.15 10 ● The Company granted 25,826 4.84 5 During the year ended December 31, 2022, the Company recorded $ 502,837 (2021- $ 1,660,894 ) in stock-based compensation in relation to the vesting of stock options. The fair values of stock options granted were estimated using the Black-Scholes option pricing model with the following weighted average assumptions: Draganfly Inc. Notes to the Consolidated Financial Statements For the Year Ended December 31, 2022 Expressed in Canadian Dollars 17. SHARE CAPITAL (CONT’D) SCHEDULE OF WEIGHTED AVERAGE ASSUMPTIONS Year ended December 31, 2022 2021 Risk free interest rate - 0.69 %- 1.40 % Expected volatility - 111.87 113.16 % Expected life - 5 Expected dividend yield - 0 % Exercise price $ - $ 13.20 13.90 Volatility is calculated using the historical volatility method based on a comparative company’s stock price. Restricted Share Units The Company has adopted an incentive share compensation plan, which provides that the Board of Directors of the Company may from time to time, in its discretion, and in accordance with the Exchange requirements, grant to directors, officers, employees and technical consultants to the Company, restricted stock units (RSUs). The number of RSUs awarded and underlying vesting conditions are determined by the Board of Directors in its discretion. RSUs will have a 3-year vesting period following the award date. The total number of common shares reserved and available for grant and issuance pursuant to this plan, and the total number of Restricted Share Units that may be awarded pursuant to this plan, shall not exceed 20% (in the aggregate) of the issued and outstanding common shares from time to time. The aggregate sales price (meaning the sum of all cash, property, notes, cancellation of debt, or other consideration received or to be received by the Company for the sale of the securities) or amount of common shares issued during any consecutive 12-month period will not exceed the greatest of the following: (i) USD $1,000,000; (ii) 15% of the total assets of the Company, measured at the Company’s most recent balance sheet date; or (iii) 15% of the outstanding amount of the common shares of the Company, measured at the Company’s most recent balance sheet date. At the election of the Board of Directors, upon each vesting date, participants receive (a) the issuance of common shares from treasury equal to the number of RSUs vesting, or (b) a cash payment equal to the number of vested RSUs multiplied by the fair market value of a common share, calculated as the closing price of the common shares on the CSE for the trading day immediately preceding such payment date; or (c) a combination of (a) and (b). On the grant date of RSUs, the Company determines whether it has a present obligation to settle in cash. If the Company has a present obligation to settle in cash, the RSUs are accounted for as liabilities, with the fair value remeasured at the end of each reporting period and at the date of settlement, with any changes in fair value recognized in profit or loss for the period. The Company has a present obligation to settle in cash if the choice of settlement in shares has no commercial substance, or the Company has a past practice or a stated policy of setting in cash, or generally settles in cash whenever the counterparty asks for cash settlement. If no such obligation exists, RSUs are accounted for as equity settled share-based payments and are valued using the share price on grant date. Upon settlement: a) If the Company elects to settle in cash, the cash payment is accounted for as the repurchase of an equity interest (i.e. as a deduction from equity), except as noted in (c) below. b) If the Company elects to settle by issuing shares, the value of RSUs initially recognized in reserves is reclassified to share capital, except as noted in (c) below. c) If the Company elects the settlement alternative with the higher fair value, as at the date of settlement, the Company recognizes an additional expense for the excess value given (i.e. the difference between the cash paid and the fair value of shares that would otherwise have been issued, or the difference between the fair value of the shares and the amount of cash that would otherwise have been paid, whichever is applicable). As at December 31, 2022, the Company had the following RSUs outstanding: SUMMARY OF CHANGES IN RESTRICTED STOCK UNITS Number of RSUs Outstanding, December 31, 2020 614,666 Vested (448,660 ) Issued 348,826 Outstanding, December 31, 2021 514,832 Vested (1,072,595 ) Issued 1,820,972 Forfeited (64,334 ) Outstanding, December 31, 2022 1,198,875 During the year ended December 31, 2022, 1,072,595 1,820,972 64,334 During the year ended December 31, 2021, 323,661 124,999 348,826 During the year ended December 31, 2022, the Company recorded share-based payment expense of $ 2,808,187 (2021: $ 2,291,701 ) for RSUs, based on the fair values of RSUs granted which were calculated using the closing price of the Company’s stock on the day prior to grant. Warrants During the years ended December 31, 2021 and 2020, the Company issued warrants (“USD Warrants”) with a USD exercise price. Being in a foreign currency that is not the Company’s functional currency and these warrants were not issued in exchange for services, these USD Warrants are required to be recorded as a financial liability and not as equity. As a financial liability, these USD Warrants are revalued on a quarterly basis to fair market value with the change in fair value being recorded profit or loss. The initial fair value of these USD Warrants was parsed out from equity and recorded as a financial liability. Draganfly Inc. Notes to the Consolidated Financial Statements For the Year Ended December 31, 2022 Expressed in Canadian Dollars 17. SHARE CAPITAL (CONT’D) To reach a fair value of the USD Warrants, a Black Scholes calculation is used, calculated in USD as the Company also trades on the Nasdaq. The Black Scholes value per USD Warrant is then multiplied by the number of outstanding warrants and then multiplied by the foreign exchange rate at the end of the period from the Bank of Canada. Warrant Derivative Liability SCHEDULE OF WARRANT DERIVATIVE LIABILITY Balance at December 31, 2020 $ 748,634 Warrant issuance 8,261,511 Exercised (98,048 ) Change in fair value of warrants outstanding (4,046,325 ) Balance at December 31, 2021 $ 4,865,772 Change in fair value of warrants outstanding (4,865,772 ) Balance at December 31, 2022 $ - Derivative liability balance at December 31, 2022 December 31, 2021 Warrants $ - $ 4,865,772 Contingent consideration (note 3) 57,314 694,230 Ending balance $ 57,314 $ 5,560,002 Details of these warrants and their fair values are as follows: SCHEDULE OF WARRANTS AND FAIR VALUE OUTSTANDING Issue Date Exercise Price Number of Warrants Outstanding at December 31, 2022 Fair Value at December 31, 2022 Number of Warrants Outstanding at December 31, 2021 Fair Value at December 31, 2021 November 30, 2020 US$ 3.55 - $ - 482,425 $ 182,262 February 5, 2021 US$ 3.55 1,319,675 - 1,323,275 951,226 March 5, 2021 US$ 3.55 5,142,324 - 5,154,321 3,732,284 July 29, 2021 US$ 5.00 250,000 - 250,000 - September 14, 2021 US$ 5.00 4,798 - 4,798 - 6,716,797 $ - 7,214,819 $ 4,865,772 1) Subsequent to December 31, 2022, the warrants expired on February 5, 2023. 2) Subsequent to December 31, 2022, the warrants expired on March 5, 2023 3) The warrants expire July 29, 2024. 4) The warrants expire September 14, 2024 T SCHEDULE OF WEIGHTED AVERAGE ASSUMPTION FOR WARRANTS December 31, 2022 December 31, 2021 Risk free interest rate 4.07 % 0.23 0.95 % Expected volatility 91.66 93.48 % 70.95 144.59 % Expected life 0.10 0.18 2 3 Expected dividend yield 0 % 0 % Volatility is calculated using the historical volatility method. Draganfly Inc. Notes to the Consolidated Financial Statements For the Year Ended December 31, 2022 Expressed in Canadian Dollars 17. SHARE CAPITAL (CONT’D) SUMMARY OF CHANGES IN WARRANTS Number of Warrants Weighted Average Exercise Price Outstanding, December 31, 2020 2,416,864 $ 2.95 Exercised (1,939,534 ) 2.54 Forfeited (6,000 ) 2.50 Issued 7,943,489 5.10 Outstanding, December 31, 2021 8,414,819 $ 4.99 Exercised (16,538 ) 4.51 Expired (481,484 ) 4.61 Outstanding December 31, 2022 7,916,797 $ 5.08 As at December 31, 2022, the Company had the following warrants outstanding: SCHEDULE OF WARRANTS OUTSTANDING Date issued Expiry date Exercise price Number of warrants outstanding February 5, 2021 February 5, 2023 US$ 3.55 1,319,675 March 5, 2021 March 5, 2023 US$ 3.55 5,142,324 March 22, 2021 March 22, 2023 CDN$ 13.35 1,200,000 July 29, 2021 July 29, 2024 US$ 5.00 250,000 September 14, 2021 September 14, 2024 US$ 5.00 4,798 7,916,797 The weighted average remaining contractual life of warrants outstanding as of December 31, 2022, was 0.47 1.20 The 1,200,000 warrants issued on March 22, 2021 to acquire Vital, 900,000 of the warrants are currently held in escrow, to be released upon completion of the milestones (note 3). |
SEGMENTED INFORMATION
SEGMENTED INFORMATION | 12 Months Ended |
Dec. 31, 2022 | |
SEGMENTED INFORMATION | 18. SEGMENTED INFORMATION The Company organizes its three segments based on product lines as well as a Corporate segment. The three segments are Drones, Vital (Vital Intelligence), and Corporate. The Drones segment derives its revenue from products and services related to the sale of unmanned aerial vehicles (UAV). The Vital segment derives its revenue from the sale of products that measure vitals to help detect symptoms from large groups of people from a distance. The Corporate segment includes all costs not directly associated with the Drone and Vital segments. The Company aggregates the information for the segments by analyzing the revenue steam and allocating direct costs to that respective segment. The Corporate segment is aggregated by relying on the entity that includes corporate costs (Draganfly Inc.) SCHEDULE OF SEGMENTED INFORMATION December 31, 2022 Drones Vital Corporate Total Sales of goods 5,388,262 162,170 - 5,550,432 Provision of services 2,054,627 - - 2,054,627 Total revenue $ 7,442,889 $ 162,170 $ - $ 7,605,059 Segment loss $ 9,929,789 $ 602,580 $ 12,926,884 $ 23,459,253 Finance and other costs (3,529 ) - (40,816 ) (44,345 ) Depreciation 586,185 - 7,092 593,277 Amortization 179,482 - - 179,482 Impairment of goodwill and intangibles 2,166,563 4,288,351 - 6,454,914 Change in fair value of derivative liability - - (5,502,688 ) (5,502,688 ) Loss (recovery) on write-off of notes receivable 1,080,645 - (771,260 ) 309,385 Loss on write down of inventory 251,754 1,724,760 - 1,976,514 Write down of deposit - 228,572 - 228,572 Net loss for the year $ 14,190,889 $ 6,844,263 $ 6,619,212 $ 27,654,364 December 31, 2021 Drones Vital Corporate Total Sales of goods 4,957,134 146,265 - 5,103,399 Provision of services 1,950,466 - - 1,950,466 Total revenue $ 6,907,600 $ 146,265 $ - $ 7,053,865 Segment loss $ 7,819,739 $ 257,656 $ 10,498,164 $ 18,575,560 Finance and other costs 16,272 - (21,346 ) (5,074 ) Depreciation 175,098 - - 175,098 Amortization 135,966 - - 135,966 Impairment of goodwill and intangibles - 4,579,763 - 4,579,763 Change in fair value of derivative liability - - (8,149,812 ) (8,149,812 ) Loss on write-off of notes receivable - - 891,471 891,471 Net loss for the year $ 8,147,075 $ 4,837,419 $ 3,218,477 $ 16,202,972 SCHEDULE OF GEOGRAPHIC REVENUE 2022 2021 Geographic revenue segmentation is as follows: For the years ended December 31, 2022 2021 Canada $ 6,919,038 $ 4,982,373 United States 686,021 2,071,492 Revenue $ 7,605,059 $ 7,053,865 Geographic revenue is measured by aggregating sales based on the country and the entity where the sale was made. Draganfly Inc. Notes to the Consolidated Financial Statements For the Year Ended December 31, 2022 Expressed in Canadian Dollars |
OFFICE AND MISCELLANEOUS
OFFICE AND MISCELLANEOUS | 12 Months Ended |
Dec. 31, 2022 | |
OFFICE AND MISCELLANEOUS | 19. OFFICE AND MISCELLANEOUS SCHEDULE OF OFFICE AND MISCELLANEOUS EXPENSES For the years ended December 31, 2022 2021 Advertising, Marketing, and Investor Relations $ 4,431,818 $ 5,165,791 Compliance fees 152,826 432,874 Contract Work 441,798 300,975 Other 371,519 556,358 Office and Miscellaneous Expenses $ 5,397,961 $ 6,455,998 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2022 | |
RELATED PARTY TRANSACTIONS | 20. RELATED PARTY TRANSACTIONS On August 1, 2019, the Company entered in a business services agreement (the “Agreement”) with Business Instincts Group (“BIG”), a company that Cameron Chell, CEO and director has a material interest in that he previously controlled, to provide: corporate development and governance, strategic facilitation and management, general business services, office space, corporate business development video content, website redesign and management, and online visibility management. The services are provided by a team of consultants and the costs of all charges are based on the fees set in the Agreement and are settled on a monthly basis. The Company records these charges under Professional Fees. For the year ended December 31, 2022, the company incurred fees of $ 442,485 (December 31, 2021 - $ 315,643) . As at December 31, 2022, the Company was indebted to this company in the amount of $ 30,804 (December 31, 2021 - $ nil ). On October 1, 2019, the Company entered into an independent consultant agreement (“Consultant Agreement”) with 1502372 Alberta Ltd, a company controlled by Cameron Chell, CEO and director, to provide executive consulting services to the Company. The costs of all charges are based on the fees set in the Consultant Agreement and are settled on a monthly basis. The Company records these charges under Professional Fees. For the year ended December 31, 2022, the Company incurred fees of $ 566,487 (December 31, 2021 - $ 290,225). As at December 31, 2022, the Company was indebted to this company in the amount of $ nil (December 31, 2021 - $ nil ). On July 3, 2020, the Company entered into an executive consultant agreement (“Executive Agreement”) with Scott Larson, a director of the Company, to provide executive consulting services, as President, to the Company. The costs of all charges are based on the fees set in the Executive Agreement and are settled on a monthly basis. The Company records these charges under Professional Fees. On May 9, 2022, Scott Larson ceased to be President of the Company and entered into an agreement to provide executive consulting services to the Company. The costs of all charges are based on the fees set in the consulting agreement and are settled on a monthly basis. The Company records these charges under Professional Fees. For the year ended December 31, 2022, the Company incurred fees of $ 383,288 (December 31, 2021 - $ 205,191) . As at December 31, 2022, the Company was indebted to this company in the amount of $ 20,745 (December 31, 2021 - $ nil ). Draganfly Inc. Notes to the Consolidated Financial Statements For the Year Ended December 31, 2022 Expressed in Canadian Dollars 20. RELATED PARTY TRANSACTIONS (CONT’D) Trade receivables/payables and accrued receivables/payables: As at December 31, 2022, the Company had $ nil (December 31, 2021 - $ 155,108 ) receivable from related parties outstanding that were included in accounts receivable and $ 51,549 (December 31, 2021 - $ nil ) payable from related parties that was included in accounts payable. The balances outstanding are unsecured, non-interest bearing and due on demand. Key management compensation Key management personnel include those persons having authority and responsibility for planning, directing and controlling the activities of the Company as a whole. Compensation awarded to key management for the year ended December 31, 2022 and 2021 included: SCHEDULE OF KEY COMPENSATION AWARDS For the years ended December 31, 2022 2021 Director fees $ 522,349 $ 370,094 Salaries 843,917 722,068 Share-based payments 2,106,906 2,475,949 Total $ 3,473,172 $ 3,568,111 Other related party transactions SCHEDULE OF KEY MANAGEMENT TRANSACTIONS For the years ended December 31, 2022 2021 Management fees paid to a company controlled by CEO and director 566,487 290,225 Management fees paid to a company that the CEO holds an economic interest in 442,485 315,643 Management fees paid to a company controlled by the former President and director 383,288 205,691 Management fees paid to a company 394,039 500,074 Salaries - - Total $ 1,392,260 $ 811,559 |
FINANCIAL INSTRUMENTS AND FINAN
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | 12 Months Ended |
Dec. 31, 2022 | |
Financial Instruments And Financial Risk Management | |
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | 21. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT The Company is exposed in varying degrees to a variety of financial instrument related risks. The Board of Directors approves and monitors the risk management processes, inclusive of documented investment policies, counterparty limits, and controlling and reporting structures. The type of risk exposure and the way in which such exposure is managed is provided as follows: Credit risk Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Company’s primary exposure to credit risk is on its cash held in bank accounts and trade receivables. Trade receivables include balances of $ 920,062 Draganfly Inc. Notes to the Consolidated Financial Statements For the Year Ended December 31, 2022 Expressed in Canadian Dollars 21. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (CONT’D) Liquidity risk Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company has a planning and budgeting process in place to help determine the funds required to support the Company’s normal operating requirements on an ongoing basis. The Company ensures that there are sufficient funds to meet its short-term business requirements, taking into account its anticipated cash flows from operations and its holdings of cash and cash equivalents. Historically, the Company’s sole source of funding has been the issuance of equity securities for cash, primarily through private placements. The Company’s access to financing is always uncertain. There can be no assurance of continued access to significant equity funding. The following is an analysis of the contractual maturities of the Company’s financial liabilities at December 31, 2022: SCHEDULE OF CONTRACTUAL MATURITIES OF FINANCIAL LIABILITIES 1 year 1 – 5 years More than 5 years Trade payables and accrued liabilities $ 2,816,676 $ - $ - Customer deposits 194,758 - - Deferred income 63,690 - - Loans payable 81,512 5,059 - Derivative liability 57,314 - - Lease liability 133,962 244,681 - Contractual maturities of financial liabilities $ 3,347,912 $ 249,740 $ - Foreign exchange risk Foreign currency risk is the risk that the fair values of future cash flows of a financial instrument will fluctuate because they are denominated in currencies that differ from the respective functional currency. The Company does not hedge its exposure to fluctuations in foreign exchange rates. The following table summarizes the sensitivity of the fair value of the Company’s risk to foreign exchange rates, with all other variables held constant. Fluctuations of 10 percent in the foreign exchange rate between US dollars and Canadian dollars could have resulted in a change impacting net loss upon consolidation as follows: SCHEDULE OF CHANGES IN FOREIGN EXCHANGE RATES December 31, 2022 December 31, 2021 Foreign exchange rate $ 969,977 $ 150,715 Interest rate risk Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to interest rate risk on its cash equivalents as these instruments have original maturities of three months or less and are therefore exposed to interest rate fluctuations on renewal. Fair value A number of the Company’s accounting policies and disclosures require the measurement of fair values for financial assets and liabilities. The Company has established a control framework with respect to the measurement of fair values. Fair values are categorized into different levels of a fair value hierarchy based on the inputs used in the valuation techniques as follows: Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities. Draganfly Inc. Notes to the Consolidated Financial Statements For the Year Ended December 31, 2022 Expressed in Canadian Dollars 21. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (CONT’D) Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly. Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data. Equity securities in investee companies and warrants are measured at fair value. The financial assets and liabilities measured at fair value by hierarchy are shown in the table below. The amounts shown are based on the amounts recognized in the statements of financial position. These financial assets are measured at fair value through profit and loss. SCHEDULE OF FINANCIAL ASSETS MEASURED FAIR VALUE THROUGH PROFIT AND LOSS December 31, 2022 Level 1 Level 2 Level 3 Total Equity securities in investee companies $ 57,143 $ 135,440 $ - $ 192,583 Notes receivable - - 169,300 169,300 Derivative liability - - 57,314 57,314 Total $ 57,143 $ 135,440 $ 226,614 $ 419,197 December 31, 2021 Level 1 Level 2 Level 3 Total Equity securities in investee companies $ 164,286 $ 126,780 $ - $ 291,066 Notes receivable - 1,154,176 - 1,154,176 Derivative liability - - 5,560,002 5,560,002 Total $ 164,286 $ 1,280,956 $ 5,560,002 $ 7,005,244 Capital Management The Company manages its capital to maintain its ability to continue as a going concern and to provide returns to shareholders and benefits to other stakeholders. The capital structure of the Company consists of shareholders’ equity The Company manages its capital structure and makes adjustments to it in light of economic conditions. The Company, upon approval from its board of directors, will balance its overall capital structure through new equity issuances or by undertaking other activities as deemed appropriate under the specific circumstances. The Company is not subject to externally imposed capital requirements and the Company’s overall strategy with respect to capital risk management remains unchanged from the year ended December 31, 2021. Draganfly Inc. Notes to the Consolidated Financial Statements For the Year Ended December 31, 2022 Expressed in Canadian Dollars |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2022 | |
INCOME TAXES | 22. INCOME TAXES The following table reconciles the expected income taxes at the Canadian statutory income tax rates to the amounts recognized in the statements of comprehensive loss for the years ended December 31, 2022, 2021: SCHEDULE OF INCOME TAX December 31, 2022 December 31, 2021 Loss before income taxes $ 27,654,364 $ 16,202,972 Canadian statutory rates 27% 27% Expected income tax recovery 7,338,900 4,196,600 Impact of different foreign statutory tax rates - 34,900 Non-deductible items (1,214,400 ) 116,400 Share issue costs 1,400 887,600 Adjustments to prior years provision versus statutory tax returns (742,400 ) 376,500 Differences between prior year provision and final tax return 867,500 (206,000 ) Change in deferred tax asset not recognized (6,251,000 ) (5,406,000 ) Income tax $ - $ - The Company’s unrecognized deductible temporary differences and unused tax losses for which no deferred tax asset is recognized consist of the following amounts: SCHEDULE OF DEFERRED TAXES December 31, 2022 December 31, 2021 Deferred income tax assets (liabilities): Share issuance costs $ 568,000 $ 728,000 Non-capital losses 14,602,000 7,043,000 Property and equipment 953,000 449,000 Capital gain reserve - 74,000 Scientific Research and Experimental Development 367,000 291,000 Total deferred income tax assets $ 16,490,000 $ 8,585,000 Deferred income tax not recognized (16,490,000 ) (8,585,000 ) Net deferred tax assets $ - $ - The Company has non-capital loss carry forward of approximately $ 48,808,245 which may be carried forward to apply against future year income tax for Canadian income tax purposes, subject to the final determination by taxation authorities, expiring in the years 2036 to 2041. Draganfly Inc. Notes to the Consolidated Financial Statements For the Year Ended December 31, 2022 Expressed in Canadian Dollars |
SUPPLEMENTAL CASH FLOW DISCLOSU
SUPPLEMENTAL CASH FLOW DISCLOSURES | 12 Months Ended |
Dec. 31, 2022 | |
Supplemental Cash Flow Disclosures | |
SUPPLEMENTAL CASH FLOW DISCLOSURES | 23. SUPPLEMENTAL CASH FLOW DISCLOSURES During the year ended December 31, 2022: - During the year ended December 31, 2022, $ 508,607 During the year ended December 31, 2021: - The Company issued 371,901 common shares in lieu of cash for services rendered. - The Company issued 1,200,000 These warrants have an exercise price of $ 13.35 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2022 | |
SUBSEQUENT EVENTS | 24. SUBSEQUENT EVENTS Subsequent to December 31, 2022, the Company entered into an equity distribution agreement. The agreement will allow the Company from time to time, to distribute in an at-the-market offering (“ATM”) up to $ 15,000,000 From February 1, 2023 to February 17, 2023, the Company distributed 650,729 2.62 1,705,013 |
BASIS OF PREPARATION (Policies)
BASIS OF PREPARATION (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Statement of Compliance | Statement of Compliance These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and interpretations issued by the International Reporting Interpretation Committee (“IFRIC”). The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all years presented, unless otherwise stated. These consolidated financial statements were authorized for issue by the Board of Directors on March 27, 2023. |
Basis of consolidation | Basis of consolidation Each subsidiary is fully consolidated from the date of acquisition, being the date on which the Company obtains control, and continue to be consolidated until the date when such control ceases. The consolidated financial statements include the accounts and results of operations of the Company and its wholly owned subsidiaries listed in the following table: SCHEDULE OF RESULTS OF OPERATIONS Name of Subsidiary Place of Incorporation Ownership Interest Draganfly Innovations Inc. Canada 100 Draganfly Innovations USA, Inc. US 100 Dronelogics Systems Inc. Canada 100 All intercompany balances and transactions were eliminated on consolidation. |
Significant estimates and assumptions | Significant estimates and assumptions The preparation of consolidated financial statements in accordance with IFRS requires the Company to make estimates and assumptions about reported amounts at the date of the consolidated financial statements and in the future. The Company’s management reviews these estimates and underlying assumptions on an ongoing basis, based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Revisions to estimates are adjusted for prospectively in the period in which the estimates are revised. Draganfly Inc. Notes to the Consolidated Financial Statements For the Year Ended December 31, 2022 Expressed in Canadian Dollars 2. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (CONT’D Impairment of Non-financial assets The CGU’s recoverable amount is evaluated using the higher of the value in use and fair value less costs to sell. In determining the recoverable amount, the Company utilizes discounted cash flow techniques. Management calculates the discounted cash flows based upon its best estimate of a number of economic, operating, engineering, environmental, political and social assumptions. Any changes in the assumptions due to changing circumstances may affect the recoverable amount estimate. Share-based payments The cost of share-based payment transactions with directors, officers and employees are measured by reference to the fair value of the equity instruments. Estimating fair value for share-based payment transactions requires determining the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determining and making assumptions about the most appropriate inputs to the valuation model including the expected life, volatility, risk-free interest rate, expected forfeiture rate and dividend yield of the stock option. Income taxes Provisions for income taxes are made using the best estimate of the amount expected to be paid based on a qualitative assessment of all relevant factors. The Company reviews the adequacy of these income tax provisions at the end of each reporting period. However, it is possible that at some future date an additional liability could result from audits by tax authorities. Where the final outcome of these tax-related matters is different from the amounts that were initially recorded, such differences will affect the tax provisions in the period in which such determination is made. Deferred tax assets are recognized when it is determined that the company is likely to recognize their recovery from the generation of taxable income. Inventory Inventory is valued at the lower of cost and net realizable value. Net realizable value is determined with reference to the estimated selling price less costs to sell. The Company estimates selling price based upon assumptions about future demand and current and anticipated retail market conditions. The future realization of these inventories may be affected by future technology or other market- driven changes that may reduce future selling prices. Contingencies The assessment of contingencies involves the exercise of significant judgment and estimates of the outcome of future events. In assessing loss contingencies related to legal proceedings that are pending against the Company and that may result in regulatory or government actions that may negatively impact the Company’s business or operations, the Company and its legal counsel evaluate the perceived merits of the legal proceeding or unasserted claim or action as well as the perceived merits of the nature and amount of relief sought or expected to be sought, when determining the amount, if any, to recognize as a contingent liability or when assessing the impact on the carrying value of the Company’s assets. Contingent assets are not recognized in the consolidated financial statements. Investments in Private companies Where the fair value of investments in private companies recorded on the statement of financial position cannot be derived from active markets, they are determined using a variety of valuation techniques. The inputs to these models are derived from observable market data where possible, but where observable market data is not available, judgment is required to establish fair value and this value may not be indicative of recoverable value. Draganfly Inc. Notes to the Consolidated Financial Statements For the Year Ended December 31, 2022 Expressed in Canadian Dollars 2. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (CONT’D Expected credit losses on trade receivables and notes receivable When determining expected credit losses (“ECLs”), the Company considers the historic credit losses observed by the Company, customer-specific payment history and economic conditions. When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL’s, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Company’s historical experience, informed credit assessment ad forward-looking information Useful lives of equipment and intangible assets Estimates of the useful lives of equipment and intangible assets are based on the period over which the assets are expected to be available for use. The estimated useful lives are reviewed annually and are updated if expectations differ from previous estimates due to physical wear and tear, technical or commercial obsolescence, and legal or other limits on the use of the relevant assets. In addition, the estimation of the useful lives of the relevant assets may be based on internal technical evaluation and experience with similar assets. It is possible, however, that future results of operations could be materially affected by changes in the estimates brought about by changes in the factors mentioned above. The amounts and timing of recorded expenses for any period would be affected by changes in these factors and circumstances. A reduction in the estimated useful lives of the equipment would increase the recorded expenses and decrease the non-current assets. |
Significant judgments | Significant judgments The preparation of consolidated financial statements in accordance with IFRS requires the Company to make judgments, apart from those involving estimates, in applying accounting policies. The most significant judgments in applying the Company’s consolidated financial statements include: Business combinations The definition of whether a set of assets acquired and liabilities assumed constitute a business may require the Company to make certain judgements taking into account all facts and circumstances. A business is presumed to be an integrated set of activities and assets capable of being conducted and managed for the purpose of providing a return in the form of dividends, lower costs, or economic benefits. Business combination versus asset acquisition The Company considered the applicability of IFRS 3 – Business Combinations (“IFRS 3”) with respect to acquisitions (Note 3). IFRS 3 defines a business as having a system where inputs enter a process to produce outputs. The Company has determined that the acquisition of Dronelogics Systems Inc. and certain assets of Vital Intelligence Inc. are business combinations and, accordingly, have accounted for as such. Other significant judgments − The assessment of the Company’s ability to continue as a going concern and whether there are events or conditions that may give rise to significant uncertainty; − the classification of financial instruments; − the assessment of revenue recognition using the five-step approach under IFRS 15; and − the determination of the functional currency of the company. |
Foreign currency translation | Foreign currency translation Transactions in foreign currencies are translated into the functional currency at rates of exchange at the time of such transactions. Monetary assets and liabilities are translated at the reporting period rate of exchange. Non-monetary assets and liabilities are translated at historical exchange rates. Gains and losses resulting from foreign exchange adjustments are included in profit or loss. Draganfly Inc. Notes to the Consolidated Financial Statements For the Year Ended December 31, 2022 Expressed in Canadian Dollars 2. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (CONT’D The functional currencies of the parent company and each subsidiary are as follows: SCHEDULE OF FUNCTIONAL CURRENCIES Draganfly Inc. Canadian Dollar Draganfly Innovations Inc. Canadian Dollar Draganfly Innovations USA, Inc. US Dollar Dronelogics Systems Inc. Canadian Dollar Financial statements of subsidiaries for which the functional currency is not the Canadian dollar are translated into Canadian dollars as follows: all asset and liability accounts are translated at the year-end exchange rate and all revenue and expense accounts and cash flow statement items are translated at average exchange rates for the year. The resulting translation gains and losses are recorded as exchange differences on translation of foreign operations in other comprehensive loss. |
Share-based payments | Share-based payments The Company operates a stock option plan. Share-based payments to employees are measured at the grant date fair value of the instruments issued and amortized over the vesting periods. Share-based payments to non-employees are measured at the fair value of the goods or services received or the fair value of the equity instruments issued, if it is determined the fair value of the goods or services cannot be reliably measured, and are recorded at the date the goods or services are received. The corresponding amount is recorded to the share-based payment reserve. The fair value of options is determined using a Black–Scholes Option Pricing Model. The number of options expected to vest is reviewed and adjusted at the end of each reporting period such that the amount recognized for services received as consideration for the equity instruments granted shall be based on the number of equity instruments that eventually vest. Amounts recorded for forfeited or expired unexercised options are transferred to deficit in the year of forfeiture or expiry. Amounts recorded for forfeited unvested options are reversed in the period the forfeiture occurs. |
Restricted Share Units | Restricted Share Units The restricted share units (“RSUs”) entitle employees, directors, or officers to either the issuance of common shares or cash payments payable upon vesting based on vesting terms determined by the Company’s Board of Directors at the time of the grant. On the grant date of RSUs, the Company determines whether it has a present obligation to settle in cash. If the Company has a present obligation to settle in cash, the RSUs are accounted for as liabilities, with the fair value remeasured at the end of each reporting period and at the date of settlement, with any changes in fair value recognized in profit or loss for the period. RSUs settled in common share are measured at the fair value of awards on the grant date using the prior days closing price. Amounts recorded for forfeited unvested RSUs are reversed in the period the forfeiture occurs. The expense is recognized on a graded vesting basis over the vesting period, with a corresponding charge to profit or loss. |
Loss per share | Loss per share Basic loss per share is calculated by dividing the loss attributable to common shareholders by the weighted average number of common shares outstanding in the period. For all periods presented, the loss attributable to common shareholders equals the reported loss attributable to owners of the Company. Diluted income per share is calculated by the treasury stock method. Under the treasury stock method, the weighted average number of common shares outstanding for the calculation of diluted loss per share assumes that the proceeds to be received on the exercise of dilutive share options and warrants are used to repurchase common shares at the average market price during the period. For the periods presented, the Company incurred a loss and therefore basic loss per share equals diluted loss per share. Draganfly Inc. Notes to the Consolidated Financial Statements For the Year Ended December 31, 2022 Expressed in Canadian Dollars 2. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (CONT’D |
Financial Instruments | Financial Instruments Financial instruments are accounted for in accordance with IFRS 9 Financial Instruments: Classification and Measurement. A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. SCHEDULE OF FINANCIAL INSTRUMENTS Financial assets/liabilities Classification Cash Amortized cost Accounts receivable Amortized cost Notes receivable Amortized cost Investments Fair value through other comprehensive income Accounts payable Amortized cost Customer deposits Amortized cost Loans payable Amortized cost Derivative liability Fair value through profit or loss a) Financial assets Classification and measurement The Company classifies its financial assets in the following categories: at fair value through profit or loss (“FVTPL”), at fair value through other comprehensive income (“FVTOCI”) or at amortized cost. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition. The classification of debt instruments is driven by the business model for managing the financial assets and their contractual cash flow characteristics. Debt instruments are measured at amortized cost if the business model is to hold the instrument for collection of contractual cash flows and those cash flows are solely principal and interest. If the cash flows are not solely principal and interest, it is classified as FVTPL. Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payments of principal and interest. Equity instruments that are held for trading (including all equity derivative instruments) are classified as FVTPL, for other equity instruments, on the day of acquisition the Company can make an irrevocable election (on an instrument by-instrument basis) to designate them as at FVTOCI. Financial assets at FVTPL Financial assets carried at FVTPL are initially recorded at fair value and transaction costs are recorded to profit or loss. Realized and unrealized gains and losses arising from changes in the fair value of financial assets held at FVTPL are included in the profit or loss in the period in which they arise. Derivatives are also categorized as FVTPL unless they are designated as hedges. Financial assets at FVTOCI Financial assets carried at FVTOCI are initially recognized at fair value plus transaction costs. Subsequently they are measured at fair value, with gains and losses arising from changes in fair value recognized in other comprehensive income. Draganfly Inc. Notes to the Consolidated Financial Statements For the Year Ended December 31, 2022 Expressed in Canadian Dollars 2. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (CONT’D Financial assets at amortized cost Financial assets at amortized cost are initially recognized at fair value and subsequently carried at amortized cost less any impairment. They are classified as current assets or non-current assets based on their maturity date. Impairment of financial assets at amortized cost The Company recognizes a loss allowance for expected credit losses on financial assets that are measured at amortized cost. At each reporting date, the loss allowance for the financial asset is measured at an amount equal to the lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. If at the reporting date, the financial asset has not increased significantly since initial recognition, the loss allowance is measured for the financial asset at an amount equal to twelve month expected credit losses. For trade receivables the Company applies the simplified approach to providing for expected credit losses, which allows the use of a lifetime expected loss provision. Impairment losses on financial assets carried at amortized cost are reversed in subsequent periods if the amount of the loss decreases and the decrease can be objectively related to an event occurring after the impairment was recognized. Derecognition of financial assets Financial assets are derecognized when the risks and rewards of ownership have been transferred. Gains and losses on derecognition of financial assets classified as FVTPL or amortized cost are recorded to profit or loss. Gains or losses on financial assets classified as FVTOCI remain within accumulated other comprehensive loss. b) Financial liabilities The Company classifies its financial liabilities into one of two categories as follows: FVTPL - This category comprises derivatives and financial liabilities incurred principally for the purpose of selling or repurchasing in the near term. They are carried at fair value with changes in fair value recognized in profit or loss. Other financial liabilities - This category consists of liabilities carried at amortized cost using the effective interest method. Trade payables, customer deposits and loans are included in this category. Derecognition of financial liabilities Financial liabilities are derecognized when its contractual obligations are discharged, cancelled, or expire. The Company also derecognizes a financial liability when the terms of the liability are modified such that the terms and/or cash flows of the modified instrument are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value. Gains and losses on derecognition are recognized in profit or loss. |
Impairment of non-financial assets | Impairment of non-financial assets The carrying amounts of the non-financial assets are reviewed at each reporting date to determine whether there is any indication of impairment. If indicators exist, then the asset’s recoverable amount is estimated. The recoverable amounts of the following types of intangible assets are measured annually, whether or not there is any indication that it may be impaired: ● an intangible asset with an indefinite useful life; ● an intangible asset not yet available for use; and ● goodwill recognized in a business combination. The recoverable amount of an asset or cash-generating unit (“CGU”) is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest identifiable group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets. Draganfly Inc. Notes to the Consolidated Financial Statements For the Year Ended December 31, 2022 Expressed in Canadian Dollars 2. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (CONT’D If there is an indication that a corporate asset may be impaired, then the recoverable amount is determined for the CGU to which the corporate asset belongs. An impairment loss is recognized if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount. Impairment losses are recognized in profit or loss. Impairment losses recognized in respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the units, and then to reduce the carrying amounts of the other assets in the unit (group of units) on a pro rata basis. In respect of assets other than goodwill and intangible assets that have indefinite useful lives, impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed in a subsequent period when there has been an increase in the recoverable amount of a previously impaired asset or CGU. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized. |
Income taxes | Income taxes Current income tax: Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date, in the countries where the Company operates and generates taxable income. Current income taxes relating to items recognized directly in other comprehensive income or equity is recognized in other comprehensive income or equity and not in profit or loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate. Deferred income tax: Deferred income tax is recognized, using the asset and liability method, on temporary differences at the reporting date arising between the tax bases of assets and liabilities and their carrying amounts for financial reporting. The carrying amount of deferred income tax assets is reviewed at the end of each reporting period and recognized only to the extent that it is probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation authority. |
Inventory | Inventory Inventory consists of raw materials and finished goods for manufacturing of multi-rotor helicopters, industrial areal video systems, civilian small unmanned aerial systems or vehicles, health monitoring equipment, and wireless video systems. Inventory is initially valued at cost and subsequently at the lower of cost and net realizable value. Net realizable value is determined as the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. Cost is determined using the weighted average cost basis. The Company reviews inventory for obsolete and slow-moving goods and any such inventory is written-down to net realizable value. Draganfly Inc. Notes to the Consolidated Financial Statements For the Year Ended December 31, 2022 Expressed in Canadian Dollars 2. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (CONT’D |
Revenue recognition | Revenue recognition Revenue comprises the fair value of consideration received or receivable for the sale of goods and consulting services in the ordinary course of the Company’s business. Revenue is shown net of return allowances and discounts. Sales of goods The Company manufactures and sells a range of multi-rotor helicopters, industrial aerial video systems, and civilian small unmanned aerial systems or vehicles. Sales are recognized at a point-in-time when control of the products has transferred, being when the products are delivered to the customer and there is no unfulfilled obligation that could affect the customer’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location or picked up by the customer. Revenue from these sales is recognized based on the price specified in the contract, net of the estimated discounts and returns. Accumulated experience is used to estimate and provide for the discounts and returns, using the expected value method, and revenue is only recognized to the extent that it is highly probable that a significant reversal will not occur. To date, returns have not been significant. No element of financing is deemed present as the sales are made with a credit term of 30 days, which is consistent with market practice. Some contracts include multiple performance obligations, such as the manufacturing of hardware and support. Support is performed by another party and does not include an integration service. It is therefore accounted for as a separate performance obligation. In this case, the transaction price will be allocated to each performance obligation based on stand-alone selling price. Where is the stand-alone selling price is not directly observable, the price is estimated based on expect cost plus margin. Services The Company provides consulting, custom engineering, drones as a service, and investigating and solving on a project-by-project basis under fixed-price and variable price contracts. Revenue from providing services is recognized over time as the services are rendered. Rental equipment The Company provides rental of equipment which is measured based on rates through contracts or other written agreements with customers. Revenue is recognized in the period when services are performed and only when there is reasonable assurance that the revenue will be collected. |
Deferred Revenue | Deferred Revenue A payment received is included as deferred revenue when products has yet be shipped to customers as of the period end. The amount to be recognized within twelve months following the year-end date is classified as current |
Cost of Goods Sold | Cost of Goods Sold Cost of sales includes the expenses incurred to acquire and produce inventory for sale, including product costs, freight costs, as well as provisions for reserves related to product shrinkage, or lower of cost and net realizable value adjustments as required. |
Intangible Assets and Goodwill | Intangible Assets and Goodwill An intangible asset is an identifiable asset without physical substance. An asset is identifiable if it is separable, or arises from contractual or legal rights, regardless of whether those rights are transferrable or separable from the Company or from other rights and obligations. Intangible assets include intellectual property, which consists of patent and trademark applications, brands and software. Intangible assets acquired externally are measured at cost less accumulated amortization and impairment losses. The cost of a group of intangible assets acquired is allocated to the individual intangible assets based on their relative fair values. The cost of intangible assets acquired externally comprises its purchase price and any directly attributable cost of preparing the asset for its intended use. Research and development costs incurred subsequent to the acquisition of externally acquired intangible assets and on internally generated intangible assets are accounted for as research and development costs. Draganfly Inc. Notes to the Consolidated Financial Statements For the Year Ended December 31, 2022 Expressed in Canadian Dollars 2. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (CONT’D Intangible assets with finite useful lives are amortized on a straight line basis over the expected life of each intellectual property to write off the cost of the assets from the date they are available for use. SCHEDULE OF INTANGIBLE ASSETS USEFUL LIVES Class of intangible asset Useful live Customer relationship 5 years Brand 5 years Software 5 years Goodwill represents the excess of the value of the consideration transferred over the fair value of the net identifiable assets and liabilities acquired in a business combination. Goodwill is allocated to the cash generating unit to which it relates. |
Equipment | Equipment Equipment is stated at historical cost less accumulated depreciation and accumulated impairment losses. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to the statement of comprehensive loss during the financial period in which they are incurred. Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognized in the statement of comprehensive loss. Depreciation is generally calculated on a declining balance method to write off the cost of the assets to their residual values over their estimated useful lives. Depreciation for leasehold improvements is fully expensed over the expected term of the lease. The depreciation rates applicable to each category of equipment are as follows: SCHEDULE OF DEPRECIATION RATES Class of equipment Depreciation rate Computer equipment 30 Furniture and equipment 20 Leasehold improvements Expected lease term Vehicles 30 |
Research and development expenditures | Research and development expenditures Expenditures on research are expensed as incurred. Research activities include formulation, design, evaluation and final selection of possible alternatives, products, processes, systems or services. Development expenditures are expensed as incurred unless the Company can demonstrate all of the following: (i) the technical feasibility of completing the intangible asset so that it will be available for use or sale; (ii) its intention to complete the intangible asset and use or sell it; (iii) its ability to use or sell the intangible asset; (iv) how the intangible asset will generate probable future economic benefits. The Company can also demonstrate the existence of a market for the output of the intangible asset or the intangible asset itself or, if it is to be used internally, the usefulness of the intangible asset; (v) the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and (vi) its ability to measure reliably the expenditure attributable to the intangible asset during its development. Draganfly Inc. Notes to the Consolidated Financial Statements For the Year Ended December 31, 2022 Expressed in Canadian Dollars 2. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (CONT’D |
Government Assistance | Government Assistance Government grants are recognized when there is reasonable assurance that the grant will be received and all attached conditions will be complied with. When the grant relates to an expense item, it is recognized as income on a systematic basis over the period that the related costs, for which it is intended to compensate, are expensed. When the grant relates to an asset, the cost of the asset is reduced by the amount of the grant and the grant is recognized as income in equal amounts over the expected useful life of the asset. |
SR&ED Investment tax credits | SR&ED Investment tax credits The Company claims federal investment tax credits as a result of incurring scientific research and experimental development (“SR&ED”) expenditures. Federal investment tax credits are recognized when the related expenditures are incurred and there is reasonable assurance of their realization. Federal investment tax credits are accounted for as a reduction of research and development expense for items of a period expense nature or as a reduction of property and equipment for items of a capital nature. Management has made a number of estimates and assumptions in determining the expenditures eligible for the federal investment tax credit claim. It is possible that the allowed amount of the federal investment tax credit claim could be materially different from the recorded amount upon assessment by Canada Revenue Agency. The Company claims provincial investment tax credits as a result of incurring SR&ED expenditures. Provincial investment tax credits are recognized when the related expenditures are incurred and there is reasonable assurance of their realization. Management has made a number of estimates and assumptions in determining the expenditures eligible for the provincial investment tax credit claim. The provincial investment tax credits are refundable and have been recorded as a SR&ED tax credit receivable, and as a reduction in research and development expenses on the statement of comprehensive loss. It is possible that the allowed amount of the provincial investment tax credit claim could be materially different from the recorded amount upon assessment by Canada Revenue Agency and the Alberta Tax and Revenue Administration. |
Leases | Leases A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. At the commencement date, the lease liability is recognized at the present value of the future lease payments and discounted using the interest rate implicit in the lease or the Company’s incremental borrowing rate. A corresponding right-of-use (“ROU”) asset is recognized at the amount of the lease liability, adjusted for any lease incentives received and initial direct costs incurred. Over the term of the lease, financing expense is recognized on the lease liability using the effective interest rate method and charged to net income, lease payments are applied against the lease liability and depreciation on the ROU asset is recorded by class of underlying asset. The lease term is the non-cancellable period of a lease plus periods covered by an optional lease extension option if it is reasonably certain that the Company will exercise the option to extend. Conversely, periods covered by an option to terminate are included if the Company does not expect to end the lease during that time frame. Leases with a term of less than twelve months or leases for underlying low value assets are recognized as an expense in net income on a straight-line basis over the lease term. A lease modification is accounted for as a separate lease if it materially changes the scope of the lease. For a modification that is not a separate lease, on the effective date of the lease modification, the Company will remeasure the lease liability and corresponding ROU asset using the interest rate implicit in the lease or the Company’s incremental borrowing rate. Any variance between the remeasured ROU asset and lease liability will be recognized as a gain or loss in net income to reflect the change in scope. |
New accounting standards issued not yet effective | New accounting standards issued not yet effective Accounting standards or amendments to existing accounting standards that have been issued but have future effective dates are either not applicable or are not expected to have a significant impact on the Company’s consolidated financial statements. |
BASIS OF PREPARATION (Tables)
BASIS OF PREPARATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
SCHEDULE OF RESULTS OF OPERATIONS | The consolidated financial statements include the accounts and results of operations of the Company and its wholly owned subsidiaries listed in the following table: SCHEDULE OF RESULTS OF OPERATIONS Name of Subsidiary Place of Incorporation Ownership Interest Draganfly Innovations Inc. Canada 100 Draganfly Innovations USA, Inc. US 100 Dronelogics Systems Inc. Canada 100 |
SCHEDULE OF FUNCTIONAL CURRENCIES | The functional currencies of the parent company and each subsidiary are as follows: SCHEDULE OF FUNCTIONAL CURRENCIES Draganfly Inc. Canadian Dollar Draganfly Innovations Inc. Canadian Dollar Draganfly Innovations USA, Inc. US Dollar Dronelogics Systems Inc. Canadian Dollar |
SCHEDULE OF FINANCIAL INSTRUMENTS | SCHEDULE OF FINANCIAL INSTRUMENTS Financial assets/liabilities Classification Cash Amortized cost Accounts receivable Amortized cost Notes receivable Amortized cost Investments Fair value through other comprehensive income Accounts payable Amortized cost Customer deposits Amortized cost Loans payable Amortized cost Derivative liability Fair value through profit or loss |
SCHEDULE OF INTANGIBLE ASSETS USEFUL LIVES | SCHEDULE OF INTANGIBLE ASSETS USEFUL LIVES Class of intangible asset Useful live Customer relationship 5 years Brand 5 years Software 5 years |
SCHEDULE OF DEPRECIATION RATES | SCHEDULE OF DEPRECIATION RATES Class of equipment Depreciation rate Computer equipment 30 Furniture and equipment 20 Leasehold improvements Expected lease term Vehicles 30 |
VITAL INTELLIGENCE ACQUISITION
VITAL INTELLIGENCE ACQUISITION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Vital Intelligence Acquisition | |
SCHEDULE OF CONTINGENT CONSIDERATION | SCHEDULE OF CONTINGENT CONSIDERATION Contingent consideration Fair value of contingent consideration $ 4,797,717 Change in fair value of contingent consideration (4,103,487 ) Contingent consideration at December 31, 2021 694,230 Change in fair value of contingent consideration (636,916 ) Contingent consideration at December 31, 2022 (note 17) $ 57,314 |
SCHEDULE OF PURCHASE PRICE ALLOCATION FOR VITAL INTELLIGENCE | The PPA is as follows: SCHEDULE OF PURCHASE PRICE ALLOCATION FOR VITAL INTELLIGENCE Number of units of Draganfly Inc. 578,248 Fair value of units $ 14.43 Fair value of units of Draganfly Inc. $ 8,342,966 Cash portion of purchase price 466,643 Total $ 8,809,609 Identifiable intangible assets Brand $ 23,000 Software 433,000 Identifiable intangible assets 456,000 Goodwill 8,353,609 Total consideration $ 8,809,609 |
CASH AND CASH EQUIVALENTS (Tabl
CASH AND CASH EQUIVALENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Cash and cash equivalents [abstract] | |
SCHEDULE OF CASH AND CASH EQUIVALENTS | SCHEDULE OF CASH AND CASH EQUIVALENTS December 31, 2022 December 31, 2021 Cash held in banks $ 7,500,607 $ 22,729,212 Guaranteed investment certificates 394,174 346,501 Cash and Cash Equivalents $ 7,894,781 $ 23,075,713 |
RECEIVABLES (Tables)
RECEIVABLES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Schedule Of Amounts Receivable | |
SCHEDULE OF AMOUNTS RECEIVABLE | SCHEDULE OF AMOUNTS RECEIVABLE December 31, 2022 December 31, 2021 Trade accounts receivable $ 1,343,795 $ 951,314 Corporate taxes receivable - 182,820 Taxes receivable 745,170 272,993 Trade and other receivables $ 2,088,965 $ 1,407,127 |
INVENTORY (Tables)
INVENTORY (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
SCHEDULE OF INVENTORIES | SCHEDULE OF INVENTORIES December 31, 2022 December 31, 2021 Finished goods $ 542,934 $ 3,017,363 Parts 513,008 373,459 Inventories $ 1,055,942 $ 3,390,822 |
SCHEDULE OF COST OF SALES | Cost of sales consist of the following: SCHEDULE OF COST OF SALES December 31, 2022 December 31, 2021 Inventory $ 6,048,348 $ 3,420,713 Consulting and services 730,170 679,345 Other 35,866 310,719 Cost of sales $ 6,814,384 $ 4,410,777 |
NOTES RECEIVABLE (Tables)
NOTES RECEIVABLE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Notes Receivable | |
DISCLOSURE OF NOTES RECEIVABLE | DISCLOSURE OF NOTES RECEIVABLE Maturity Date Rate Principal Interest Accretion (Impairment)/ Recovery Repayments Balance December 31, 2022 Note 1 (1) 2023-03-31 0 % $ 190,396 $ - $ 12,764 $ - $ (33,860 ) $ 169,300 Note 2 (1) 2024-09-22 5 % 1,003,682 48,992 27,971 (1,080,645 ) - - Note 3 2022-04-26 8 % - 37,177 - 771,260 (808,437 ) - Total $ 1,194,078 $ 86,169 $ 40,735 $ (309,385 ) $ (842,297 ) $ 169,300 Maturity date Rate Principal Interest Accretion (Impairment)/ Recovery Repayments Balance Maturity Date Rate Principal Interest Accretion (Impairment)/ Recovery Repayments Balance December 31, 2021 Note 1 (1) 2022-10-21 0 % $ 180,597 $ - 9,573 - - 190,170 Note 2 (1) 2024-09-22 5 % 943,385 13,156 7,465 - - 964,006 Note 3 2022-04-26 8 % 750,000 21,260 - (771,260 ) - - Note 4 (1) 2023-06-01 8 % 114,833 5,378 - (120,211 ) - - Total $ 1,988,815 $ 39,794 $ 17,038 $ (891,471 ) $ - $ 1,154,176 (1) These notes are denominated in US dollars and are converted to Canadian dollars at the reporting date. |
PREPAIDS (Tables)
PREPAIDS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
SCHEDULE OF PREPAID EXPENSES AND DEPOSITS | SCHEDULE OF PREPAID EXPENSES AND DEPOSITS December 31, 2022 December 31, 2021 Insurance $ 1,148,455 $ 2,938,246 Prepaid director fees - 107,763 Prepaid interest 1,889 6,969 Prepaid marketing services 733,417 1,638,179 Prepaid rent 12,485 - Prepaid subscriptions 29,194 35,687 Deposits (1) 382,284 768,033 Prepaid expenses and deposits $ 2,307,724 $ 5,494,877 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
SCHEDULE OF INVESTMENTS | SCHEDULE OF INVESTMENTS Balance at December 30, 2020 - Acquisitions 623,706 Change in fair value (332,640 ) Balance at December 31, 2021 291,066 Balance 291,066 Change in fair value (98,483 ) Balance at December 31, 2022 $ 192,583 Balance $ 192,583 |
SCHEDULE OF FAIR VALUE OF INVESTMENT | Fair value of investments is comprised of: SCHEDULE OF FAIR VALUE OF INVESTMENT Public company shares $ 57,143 Private company shares 135,440 Balance at December 31, 2022 $ 192,583 Fair value of investments $ 192,583 Public company shares $ 142,857 Public company warrants 21,429 Private company shares 126,780 Balance at December 31, 2021 $ 291,066 Fair value of investments $ 291,066 |
SCHEDULE OF WEIGHTED AVERAGE ASSUMPTION FOR FAIR VALUES WARRANTS | SCHEDULE OF WEIGHTED AVERAGE ASSUMPTION FOR FAIR VALUES WARRANTS December 31, 2022 December 31, 2021 March 10, 2020 Risk free interest rate 4.07 % 0.91 % 0.28 % Expected volatility 116.00 % 124.09 % 150.88 % Expected life 0.21 2 2 Expected dividend yield 0 % 0 % 0 % |
EQUIPMENT (Tables)
EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT | SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT Computer Equipment Furniture and Equipment Leasehold Improvements Software Vehicles Total Cost Balance at December 31, 2020 $ 24,397 $ 171,606 $ 4,352 $ 29,967 $ 27,652 $ 257,974 Additions 29,713 170,866 - - 12,000 212,579 Revaluation - - - - (3,619 ) (3,619 ) Balance at December 31, 2021 $ 54,110 $ 342,472 $ 4,352 $ 29,967 $ 36,033 $ 466,934 Property, plant and equipment, cost, beginning balance $ 54,110 $ 342,472 $ 4,352 $ 29,967 $ 36,033 $ 466,934 Additions 60,240 528,080 - - - 588,320 Disposals (18,688 ) (36,099 ) (4,352 ) (29,967 ) - (89,106 ) Balance at December 31, 2022 $ 95,662 $ 834,453 $ - $ - $ 36,033 $ 966,148 Property, plant and equipment, cost, ending balance $ 95,662 $ 834,453 $ - $ - $ 36,033 $ 966,148 Accumulated depreciation Balance at December 31, 2020 $ 12,392 $ 59,963 $ 3,220 $ 22,496 $ 6,033 $ 104,104 Charge for the year 12,899 42,314 1,132 2,241 7,201 65,787 Balance at December 31, 2021 $ 25,291 $ 102,277 $ 4,352 $ 24,737 $ 13,234 $ 169,891 Accumulated depreciation Property, plant and equipment, beginning balance $ 25,291 $ 102,277 $ 4,352 $ 24,737 $ 13,234 $ 169,891 Charge for the year 32,627 433,855 - - 3,435 469,917 Disposals (15,920 ) (33,342 ) (4,352 ) (24,737 ) - (78,351 ) Balance at December 31, 2022 $ 41,998 $ 502,790 $ - $ - $ 16,669 $ 561,457 Accumulated depreciation Property, plant and equipment, ending balance $ 41,998 $ 502,790 $ - $ - $ 16,669 $ 561,457 Net book value: December 31, 2021 $ 28,819 $ 240,195 $ - $ 5,230 $ 22,799 $ 297,043 December 31, 2022 $ 53,664 $ 331,663 $ - $ - $ 19,364 $ 404,691 Property, plant and equipment, net $ 53,664 $ 331,663 $ - $ - $ 19,364 $ 404,691 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
SCHEDULE OF INTELLECTUAL PROPERTY | SCHEDULE OF INTELLECTUAL PROPERTY Patents Customer Relationships Brand Software (1) Goodwill Total Cost Balance at December 31, 2020 $ 41,931 $ 197,000 $ - $ 119,000 $ 2,166,563 $ 2,524,494 Additions - - 23,000 433,000 8,353,609 8,809,609 Impairment - - - - (4,579,763 ) (4,579,763 ) Balance at December 31, 2021 $ 41,931 $ 197,000 $ 23,000 $ 552,000 $ 5,940,409 $ 6,754,340 Cost, beginning balance $ 41,931 $ 197,000 $ 23,000 $ 552,000 $ 5,940,409 $ 6,754,340 Additions - - - 4,684 - 4,684 Foreign exchange translation - - 1,571 29,576 257,782 288,929 Impairment - - (24,571 ) (462,577 ) (6,198,191 ) (6,685,339 ) Balance at December 31, 2022 $ 41,931 $ 197,000 $ - $ 123,683 $ - $ 362,614 Cost, ending balance $ 41,931 $ 197,000 $ - $ 123,683 $ - $ 362,614 Accumulated amortization Balance at December 31, 2020 $ 41,931 $ 26,267 $ - $ 15,866 $ - $ 84,064 Charge for the year - 34,147 3,450 98,369 - 135,966 Balance at December 31, 2021 41,931 60,414 3,450 114,235 - 220,030 Accumulated amortization, beginning balance 41,931 60,414 3,450 114,235 - 220,030 Charge for the year - 27,317 4,719 147,446 - 179,482 Accumulated amortization, Change for the period - 27,317 4,719 147,446 - 179,482 Foreign exchange translation - - 431 13,295 - 13,726 Impairment - - (8,600 ) (221,825 ) - (230,425 ) Accumulated amortization, Foreign exchange translation - - 431 13,295 - 13,726 Balance at December 31, 2022 $ 41,931 $ 87,731 $ - $ 53,151 $ - $ 182,813 Accumulated amortization, ending balance $ 41,931 $ 87,731 $ - $ 53,151 $ - $ 182,813 Net book value: December 31, 2021 $ - $ 136,586 $ 19,550 $ 437,765 $ 5,940,409 $ 6,534,310 December 31, 2022 $ - $ 109,269 $ - $ 70,532 $ - $ 179,801 Net book value $ - $ 109,269 $ - $ 70,532 $ - $ 179,801 |
RIGHT OF USE ASSETS (Tables)
RIGHT OF USE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
SCHEDULE OF RIGHT OF USE ASSETS | SCHEDULE OF RIGHT OF USE ASSETS Total Cost Balance at December 31, 2020 $ 242,967 Additions 447,242 Lease adjustment (7,092 ) Balance at December 31, 2021 and 2022 $ 683,117 Accumulated depreciation Balance at December 31, 2020 $ 98,548 Charge for the year 109,311 Historical correction 7,152 Balance at December 31, 2021 $ 215,011 Charge for the year 123,360 Balance at December 31, 2022 $ 338,371 Net book value: December 31, 2021 $ 468,106 December 31, 2022 $ 344,746 |
LEASE LIABILITES (Tables)
LEASE LIABILITES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
SCHEDULE OF OPERATING LEASE LIABILITIES | SCHEDULE OF OPERATING LEASE LIABILITIES Total Balance at December 31, 2020 $ 158,124 Additions 440,675 Interest expense 26,964 Lease payments (128,995 ) Lease removal (7,645 ) Balance at December 31, 2021 $ 489,123 Interest expense 39,795 Lease payments (150,275 ) Balance at December 31, 2022 $ 378,643 Which consists of: December 31, 2022 December 31, 2021 Current lease liability $ 133,962 $ 110,481 Non-current lease liability 244,681 378,642 Ending balance $ 378,643 $ 489,123 |
SCHEDULE OF OPERATING MATURITY ANALYSIS | SCHEDULE OF OPERATING MATURITY ANALYSIS Maturity analysis Total Less than one year $ 147,340 One to three years 209,078 Four to five years 83,850 Total undiscounted lease liabilities 440,268 Amount representing interest (61,625 ) Lease liability $ 378,643 |
TRADE PAYABLES AND ACCRUED LI_2
TRADE PAYABLES AND ACCRUED LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
SCHEDULE OF TRADE PAYABLES AND ACCRUED LIABILITIES | SCHEDULE OF TRADE PAYABLES AND ACCRUED LIABILITIES December 31, 2022 December 31, 2021 Trade accounts payable $ 751,422 $ 362,890 Accrued liabilities 2,031,545 402,540 Government grant payable 33,709 33,709 Trade payables and accrued liabilities $ 2,816,676 $ 799,139 |
DEFERRED INCOME (Tables)
DEFERRED INCOME (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
SCHEDULE OF DEFERRED INCOME | SCHEDULE OF DEFERRED INCOME December 31, 2022 December 31, 2021 Deferred income from customers $ 58,457 $ 68,053 Deferred income from government 5,233 5,233 Deferred Income $ 63,690 $ 73,286 Draganfly Inc. Notes to the Consolidated Financial Statements For the Year Ended December 31, 2022 Expressed in Canadian Dollars |
LOANS PAYABLE (Tables)
LOANS PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
SCHEDULE OF LOANS PAYABLE | SCHEDULE OF LOANS PAYABLE December 31, 2022 December 31, 2021 Opening balance $ 93,317 $ 97,916 Issuance of loans payable - 60,000 Fair value adjustment (4,891 ) (24,576 ) Repayment of loans payable (6,746 ) (44,428 ) Accretion expense 4,891 4,405 Ending balance $ 86,571 $ 93,317 |
SCHEDULE OF LOANS | SCHEDULE OF LOANS Start Date Maturity Date Rate Carrying Value December 31, 2022 Carrying Value December 31, 2021 CEBA 2020-05-19 2023-12-31 0 % $ 37,383 $ 37,384 CEBA 2021-04-23 2023-12-31 0 % 37,383 37,383 Vehicle loan 2019-08-30 2024-09-11 6.99 % 11,805 18,550 Total $ 86,571 $ 93,317 |
SHARE CAPITAL (Tables)
SHARE CAPITAL (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
SCHEDULE OF STOCK OPTIONS OUTSTANDING AND EXERCISABLE | SCHEDULE OF STOCK OPTIONS OUTSTANDING AND EXERCISABLE Grant Date Expiry Date Exercise Price Remaining Contractual Life (years) Number of Options Outstanding Number of Options Exercisable October 30, 2019 October 30, 2029 $ 2.50 6.84 286,665 286,665 November 19, 2019 November 19, 2029 $ 2.50 6.89 50,000 50,000 April 30, 2020 April 30, 2030 $ 2.50 7.33 85,000 85,000 April 30, 2020 April 30, 2030 $ 3.85 7.33 110,000 110,000 July 3, 2020 July 3, 2025 $ 3.20 2.51 100,000 100,000 November 24, 2020 November 24, 2030 $ 2.50 7.90 32,000 32,000 February 2, 2021 February 2, 2031 $ 13.20 8.10 30,000 20,000 March 8, 2021 March 8, 2026 $ 13.90 3.19 10,000 10,000 April 27, 2021 April 27, 2031 $ 10.15 8.33 147,666 50,326 September 9, 2021 September 9, 2026 $ 4.84 3.69 25,826 8,608 877,157 752,599 SCHEDULE OF STOCK OPTIONS OUTSTANDING AND EXERCISABLE Number of Options Weighted Average Exercise Price Outstanding, December 31, 2020 1,193,659 $ 2.75 Exercised (405,494 ) 2.50 Granted 247,826 10.12 Outstanding, December 31, 2021 1,035,991 $ 4.60 Exercised (12,500 ) 2.15 Forfeited (146,334 ) 4.77 Outstanding, December 31, 2022 877,157 $ 4.60 |
SCHEDULE OF STOCK OPTIONS OUTSTANDING AND EXERCISABLE | SCHEDULE OF STOCK OPTIONS OUTSTANDING AND EXERCISABLE Number of Options Weighted Average Exercise Price Outstanding, December 31, 2020 1,193,659 $ 2.75 Exercised (405,494 ) 2.50 Granted 247,826 10.12 Outstanding, December 31, 2021 1,035,991 $ 4.60 Exercised (12,500 ) 2.15 Forfeited (146,334 ) 4.77 Outstanding, December 31, 2022 877,157 $ 4.60 |
SCHEDULE OF WEIGHTED AVERAGE ASSUMPTIONS | SCHEDULE OF WEIGHTED AVERAGE ASSUMPTIONS Year ended December 31, 2022 2021 Risk free interest rate - 0.69 %- 1.40 % Expected volatility - 111.87 113.16 % Expected life - 5 Expected dividend yield - 0 % Exercise price $ - $ 13.20 13.90 |
SUMMARY OF CHANGES IN RESTRICTED STOCK UNITS | As at December 31, 2022, the Company had the following RSUs outstanding: SUMMARY OF CHANGES IN RESTRICTED STOCK UNITS Number of RSUs Outstanding, December 31, 2020 614,666 Vested (448,660 ) Issued 348,826 Outstanding, December 31, 2021 514,832 Vested (1,072,595 ) Issued 1,820,972 Forfeited (64,334 ) Outstanding, December 31, 2022 1,198,875 |
SCHEDULE OF WARRANT DERIVATIVE LIABILITY | Warrant Derivative Liability SCHEDULE OF WARRANT DERIVATIVE LIABILITY Balance at December 31, 2020 $ 748,634 Warrant issuance 8,261,511 Exercised (98,048 ) Change in fair value of warrants outstanding (4,046,325 ) Balance at December 31, 2021 $ 4,865,772 Change in fair value of warrants outstanding (4,865,772 ) Balance at December 31, 2022 $ - Derivative liability balance at December 31, 2022 December 31, 2021 Warrants $ - $ 4,865,772 Contingent consideration (note 3) 57,314 694,230 Ending balance $ 57,314 $ 5,560,002 |
SCHEDULE OF WARRANTS AND FAIR VALUE OUTSTANDING | Details of these warrants and their fair values are as follows: SCHEDULE OF WARRANTS AND FAIR VALUE OUTSTANDING Issue Date Exercise Price Number of Warrants Outstanding at December 31, 2022 Fair Value at December 31, 2022 Number of Warrants Outstanding at December 31, 2021 Fair Value at December 31, 2021 November 30, 2020 US$ 3.55 - $ - 482,425 $ 182,262 February 5, 2021 US$ 3.55 1,319,675 - 1,323,275 951,226 March 5, 2021 US$ 3.55 5,142,324 - 5,154,321 3,732,284 July 29, 2021 US$ 5.00 250,000 - 250,000 - September 14, 2021 US$ 5.00 4,798 - 4,798 - 6,716,797 $ - 7,214,819 $ 4,865,772 1) Subsequent to December 31, 2022, the warrants expired on February 5, 2023. 2) Subsequent to December 31, 2022, the warrants expired on March 5, 2023 3) The warrants expire July 29, 2024. 4) The warrants expire September 14, 2024 |
SCHEDULE OF WEIGHTED AVERAGE ASSUMPTION FOR WARRANTS | T SCHEDULE OF WEIGHTED AVERAGE ASSUMPTION FOR WARRANTS December 31, 2022 December 31, 2021 Risk free interest rate 4.07 % 0.23 0.95 % Expected volatility 91.66 93.48 % 70.95 144.59 % Expected life 0.10 0.18 2 3 Expected dividend yield 0 % 0 % |
SUMMARY OF CHANGES IN WARRANTS | SUMMARY OF CHANGES IN WARRANTS Number of Warrants Weighted Average Exercise Price Outstanding, December 31, 2020 2,416,864 $ 2.95 Exercised (1,939,534 ) 2.54 Forfeited (6,000 ) 2.50 Issued 7,943,489 5.10 Outstanding, December 31, 2021 8,414,819 $ 4.99 Exercised (16,538 ) 4.51 Expired (481,484 ) 4.61 Outstanding December 31, 2022 7,916,797 $ 5.08 |
SCHEDULE OF WARRANTS OUTSTANDING | As at December 31, 2022, the Company had the following warrants outstanding: SCHEDULE OF WARRANTS OUTSTANDING Date issued Expiry date Exercise price Number of warrants outstanding February 5, 2021 February 5, 2023 US$ 3.55 1,319,675 March 5, 2021 March 5, 2023 US$ 3.55 5,142,324 March 22, 2021 March 22, 2023 CDN$ 13.35 1,200,000 July 29, 2021 July 29, 2024 US$ 5.00 250,000 September 14, 2021 September 14, 2024 US$ 5.00 4,798 7,916,797 |
SEGMENTED INFORMATION (Tables)
SEGMENTED INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
SCHEDULE OF SEGMENTED INFORMATION | SCHEDULE OF SEGMENTED INFORMATION December 31, 2022 Drones Vital Corporate Total Sales of goods 5,388,262 162,170 - 5,550,432 Provision of services 2,054,627 - - 2,054,627 Total revenue $ 7,442,889 $ 162,170 $ - $ 7,605,059 Segment loss $ 9,929,789 $ 602,580 $ 12,926,884 $ 23,459,253 Finance and other costs (3,529 ) - (40,816 ) (44,345 ) Depreciation 586,185 - 7,092 593,277 Amortization 179,482 - - 179,482 Impairment of goodwill and intangibles 2,166,563 4,288,351 - 6,454,914 Change in fair value of derivative liability - - (5,502,688 ) (5,502,688 ) Loss (recovery) on write-off of notes receivable 1,080,645 - (771,260 ) 309,385 Loss on write down of inventory 251,754 1,724,760 - 1,976,514 Write down of deposit - 228,572 - 228,572 Net loss for the year $ 14,190,889 $ 6,844,263 $ 6,619,212 $ 27,654,364 December 31, 2021 Drones Vital Corporate Total Sales of goods 4,957,134 146,265 - 5,103,399 Provision of services 1,950,466 - - 1,950,466 Total revenue $ 6,907,600 $ 146,265 $ - $ 7,053,865 Segment loss $ 7,819,739 $ 257,656 $ 10,498,164 $ 18,575,560 Finance and other costs 16,272 - (21,346 ) (5,074 ) Depreciation 175,098 - - 175,098 Amortization 135,966 - - 135,966 Impairment of goodwill and intangibles - 4,579,763 - 4,579,763 Change in fair value of derivative liability - - (8,149,812 ) (8,149,812 ) Loss on write-off of notes receivable - - 891,471 891,471 Net loss for the year $ 8,147,075 $ 4,837,419 $ 3,218,477 $ 16,202,972 |
SCHEDULE OF GEOGRAPHIC REVENUE | SCHEDULE OF GEOGRAPHIC REVENUE 2022 2021 Geographic revenue segmentation is as follows: For the years ended December 31, 2022 2021 Canada $ 6,919,038 $ 4,982,373 United States 686,021 2,071,492 Revenue $ 7,605,059 $ 7,053,865 |
OFFICE AND MISCELLANEOUS (Table
OFFICE AND MISCELLANEOUS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
SCHEDULE OF OFFICE AND MISCELLANEOUS EXPENSES | SCHEDULE OF OFFICE AND MISCELLANEOUS EXPENSES For the years ended December 31, 2022 2021 Advertising, Marketing, and Investor Relations $ 4,431,818 $ 5,165,791 Compliance fees 152,826 432,874 Contract Work 441,798 300,975 Other 371,519 556,358 Office and Miscellaneous Expenses $ 5,397,961 $ 6,455,998 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
SCHEDULE OF KEY COMPENSATION AWARDS | Key management personnel include those persons having authority and responsibility for planning, directing and controlling the activities of the Company as a whole. Compensation awarded to key management for the year ended December 31, 2022 and 2021 included: SCHEDULE OF KEY COMPENSATION AWARDS For the years ended December 31, 2022 2021 Director fees $ 522,349 $ 370,094 Salaries 843,917 722,068 Share-based payments 2,106,906 2,475,949 Total $ 3,473,172 $ 3,568,111 |
SCHEDULE OF KEY MANAGEMENT TRANSACTIONS | SCHEDULE OF KEY MANAGEMENT TRANSACTIONS For the years ended December 31, 2022 2021 Management fees paid to a company controlled by CEO and director 566,487 290,225 Management fees paid to a company that the CEO holds an economic interest in 442,485 315,643 Management fees paid to a company controlled by the former President and director 383,288 205,691 Management fees paid to a company 394,039 500,074 Salaries - - Total $ 1,392,260 $ 811,559 |
FINANCIAL INSTRUMENTS AND FIN_2
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Financial Instruments And Financial Risk Management | |
SCHEDULE OF CONTRACTUAL MATURITIES OF FINANCIAL LIABILITIES | The following is an analysis of the contractual maturities of the Company’s financial liabilities at December 31, 2022: SCHEDULE OF CONTRACTUAL MATURITIES OF FINANCIAL LIABILITIES 1 year 1 – 5 years More than 5 years Trade payables and accrued liabilities $ 2,816,676 $ - $ - Customer deposits 194,758 - - Deferred income 63,690 - - Loans payable 81,512 5,059 - Derivative liability 57,314 - - Lease liability 133,962 244,681 - Contractual maturities of financial liabilities $ 3,347,912 $ 249,740 $ - |
SCHEDULE OF CHANGES IN FOREIGN EXCHANGE RATES | The following table summarizes the sensitivity of the fair value of the Company’s risk to foreign exchange rates, with all other variables held constant. Fluctuations of 10 percent in the foreign exchange rate between US dollars and Canadian dollars could have resulted in a change impacting net loss upon consolidation as follows: SCHEDULE OF CHANGES IN FOREIGN EXCHANGE RATES December 31, 2022 December 31, 2021 Foreign exchange rate $ 969,977 $ 150,715 |
SCHEDULE OF FINANCIAL ASSETS MEASURED FAIR VALUE THROUGH PROFIT AND LOSS | SCHEDULE OF FINANCIAL ASSETS MEASURED FAIR VALUE THROUGH PROFIT AND LOSS December 31, 2022 Level 1 Level 2 Level 3 Total Equity securities in investee companies $ 57,143 $ 135,440 $ - $ 192,583 Notes receivable - - 169,300 169,300 Derivative liability - - 57,314 57,314 Total $ 57,143 $ 135,440 $ 226,614 $ 419,197 December 31, 2021 Level 1 Level 2 Level 3 Total Equity securities in investee companies $ 164,286 $ 126,780 $ - $ 291,066 Notes receivable - 1,154,176 - 1,154,176 Derivative liability - - 5,560,002 5,560,002 Total $ 164,286 $ 1,280,956 $ 5,560,002 $ 7,005,244 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
SCHEDULE OF INCOME TAX | SCHEDULE OF INCOME TAX December 31, 2022 December 31, 2021 Loss before income taxes $ 27,654,364 $ 16,202,972 Canadian statutory rates 27% 27% Expected income tax recovery 7,338,900 4,196,600 Impact of different foreign statutory tax rates - 34,900 Non-deductible items (1,214,400 ) 116,400 Share issue costs 1,400 887,600 Adjustments to prior years provision versus statutory tax returns (742,400 ) 376,500 Differences between prior year provision and final tax return 867,500 (206,000 ) Change in deferred tax asset not recognized (6,251,000 ) (5,406,000 ) Income tax $ - $ - |
SCHEDULE OF DEFERRED TAXES | The Company’s unrecognized deductible temporary differences and unused tax losses for which no deferred tax asset is recognized consist of the following amounts: SCHEDULE OF DEFERRED TAXES December 31, 2022 December 31, 2021 Deferred income tax assets (liabilities): Share issuance costs $ 568,000 $ 728,000 Non-capital losses 14,602,000 7,043,000 Property and equipment 953,000 449,000 Capital gain reserve - 74,000 Scientific Research and Experimental Development 367,000 291,000 Total deferred income tax assets $ 16,490,000 $ 8,585,000 Deferred income tax not recognized (16,490,000 ) (8,585,000 ) Net deferred tax assets $ - $ - |
NATURE AND CONTINUANCE OF OPE_2
NATURE AND CONTINUANCE OF OPERATIONS (Details Narrative) - CAD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Nature And Continuance Of Operations | ||
Accumulated deficit | $ 79,976,546 | $ 52,322,182 |
SCHEDULE OF RESULTS OF OPERATIO
SCHEDULE OF RESULTS OF OPERATIONS (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Draganfly innovations inc. [member] | |
Reserve Quantities [Line Items] | |
Name of subsidiary | Draganfly Innovations Inc. |
Country of incorporation of subsidiary | Canada |
Proportion of ownership interest in subsidiary | 100% |
Draganfly innovations usa, inc. [member] | |
Reserve Quantities [Line Items] | |
Name of subsidiary | Draganfly Innovations USA, Inc. |
Country of incorporation of subsidiary | US |
Proportion of ownership interest in subsidiary | 100% |
Dronelogics systems inc. [member] | |
Reserve Quantities [Line Items] | |
Name of subsidiary | Dronelogics Systems Inc. |
Country of incorporation of subsidiary | Canada |
Proportion of ownership interest in subsidiary | 100% |
SCHEDULE OF FUNCTIONAL CURRENCI
SCHEDULE OF FUNCTIONAL CURRENCIES (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Draganfly inc [member] | |
Reserve Quantities [Line Items] | |
Name of company | Draganfly Inc. |
Functional currencies | Canadian Dollar |
Draganfly innovations inc [member] | |
Reserve Quantities [Line Items] | |
Name of company | Draganfly Innovations Inc. |
Functional currencies | Canadian Dollar |
Draganfly innovations usa inc [member] | |
Reserve Quantities [Line Items] | |
Name of company | Draganfly Innovations USA, Inc. |
Functional currencies | US Dollar |
Dronelogics systems inc. [member] | |
Reserve Quantities [Line Items] | |
Name of company | Dronelogics Systems Inc. |
Functional currencies | Canadian Dollar |
SCHEDULE OF FINANCIAL INSTRUMEN
SCHEDULE OF FINANCIAL INSTRUMENTS (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Financial cash [member] | |
IfrsStatementLineItems [Line Items] | |
Financial classification | Amortized cost |
Financial accounts receivable [member] | |
IfrsStatementLineItems [Line Items] | |
Financial classification | Amortized cost |
Financial notes receivable [member] | |
IfrsStatementLineItems [Line Items] | |
Financial classification | Amortized cost |
Financial investments [member] | |
IfrsStatementLineItems [Line Items] | |
Financial classification | Fair value through other comprehensive income |
Financial accounts payable [member] | |
IfrsStatementLineItems [Line Items] | |
Financial classification | Amortized cost |
Financial customer deposits [member] | |
IfrsStatementLineItems [Line Items] | |
Financial classification | Amortized cost |
Financial loans payable [member] | |
IfrsStatementLineItems [Line Items] | |
Financial classification | Amortized cost |
Financial derivative liability [member] | |
IfrsStatementLineItems [Line Items] | |
Financial classification | Fair value through profit or loss |
SCHEDULE OF INTANGIBLE ASSETS U
SCHEDULE OF INTANGIBLE ASSETS USEFUL LIVES (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Customer relationship [member] | |
IfrsStatementLineItems [Line Items] | |
Description of intangible assets with indefinite useful life supporting assessment of indefinite useful life | 5 years |
Brand [Member] | |
IfrsStatementLineItems [Line Items] | |
Description of intangible assets with indefinite useful life supporting assessment of indefinite useful life | 5 years |
Software [member] | |
IfrsStatementLineItems [Line Items] | |
Description of intangible assets with indefinite useful life supporting assessment of indefinite useful life | 5 years |
SCHEDULE OF DEPRECIATION RATES
SCHEDULE OF DEPRECIATION RATES (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Computer equipment [member] | |
IfrsStatementLineItems [Line Items] | |
Depreciation rate | 30% |
Fixtures and fittings [member] | |
IfrsStatementLineItems [Line Items] | |
Depreciation rate | 20% |
Leasehold improvements [member] | |
IfrsStatementLineItems [Line Items] | |
Depreciation rate, term | Expected lease term |
Vehicles [member] | |
IfrsStatementLineItems [Line Items] | |
Depreciation rate | 30% |
SCHEDULE OF CONTINGENT CONSIDER
SCHEDULE OF CONTINGENT CONSIDERATION (Details) - CAD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Vital Intelligence Acquisition | ||
Contingent consideration, beginning balance | $ 694,230 | $ 4,797,717 |
Change in fair value of contingent consideration | (636,916) | (4,103,487) |
Contingent consideration, ending balance | $ 57,314 | $ 694,230 |
SCHEDULE OF PURCHASE PRICE ALLO
SCHEDULE OF PURCHASE PRICE ALLOCATION FOR VITAL INTELLIGENCE (Details) | 12 Months Ended |
Dec. 31, 2022 CAD ($) $ / shares shares | |
Vital Intelligence Acquisition | |
Number of units of Draganfly Inc. | shares | 578,248 |
Fair value of units | $ / shares | $ 14.43 |
Fair value of units of Draganfly Inc. | $ 8,342,966 |
Cash portion of purchase price | 466,643 |
Total | 8,809,609 |
Brand | 23,000 |
Software | 433,000 |
Identifiable intangible assets | 456,000 |
Goodwill | 8,353,609 |
Total consideration | $ 8,809,609 |
VITAL INTELLIGENCE ACQUISITIO_2
VITAL INTELLIGENCE ACQUISITION (Details Narrative) | 12 Months Ended | |||
Aug. 19, 2021 CAD ($) shares | Mar. 25, 2021 CAD ($) $ / shares shares | Dec. 31, 2022 CAD ($) | Dec. 31, 2021 CAD ($) shares | |
IfrsStatementLineItems [Line Items] | ||||
Shares held in escrow | 900,000 | |||
Derivative financial liabilities | $ | $ 4,797,717 | |||
Increase (decrease) in credit derivative, fair value | $ | $ 57,314 | $ 694,230 | ||
Vital intelligence inc [member] | ||||
IfrsStatementLineItems [Line Items] | ||||
Number of shares issued | 1,200,000 | |||
Vital intelligence inc [member] | Brand [Member] | ||||
IfrsStatementLineItems [Line Items] | ||||
Royalty Percentage | 0.0025 | |||
Royalty discount percentage | 0.144 | |||
Vital intelligence inc [member] | Software [member] | ||||
IfrsStatementLineItems [Line Items] | ||||
Royalty Percentage | 0.050 | |||
Royalty discount percentage | 0.144 | |||
Asset purchase agreement [member] | Vital intelligence inc [member] | ||||
IfrsStatementLineItems [Line Items] | ||||
Payments to acquire assets | $ | $ 500,000 | |||
Number of shares issued | 1,200,000 | |||
Explanation of nature and amount of significant transactions | the holder to acquire one common share for a period of 24 months following closing for $13.35 and the Company will be able to accelerate the expiry date of the warrants after one year in the event the underlying common shares have a value of at least 30% greater than the exercise price of the warrants. The units will be held in escrow with 300,000 units being released at closing with a value of the of $3,545,249 and the remainder to be released upon the Company reaching certain revenue milestones received from the purchased assets | |||
Warrant exercise price per share | $ / shares | $ 13.35 | |||
[custom:EscrowDepositUnits-0] | 300,000 | |||
Description for Number of Shares Issued | The units were issued on March 22, 2021. On August 19, 2021 the parties agreed to reduce the final payment from $250,000 to $227,984 due to certain assets listed in the purchase agreement had not been delivered by Vital | |||
Escrow agreement one [member] | ||||
IfrsStatementLineItems [Line Items] | ||||
Stock issued, shares | 300,000 | |||
Escrow agreement two [member] | ||||
IfrsStatementLineItems [Line Items] | ||||
Stock issued, shares | 300,000 | |||
Shares issued, amount | $ | $ 2,000,000 | |||
Escrow agreement three [member] | ||||
IfrsStatementLineItems [Line Items] | ||||
Stock issued, shares | 300,000 | |||
Shares issued, amount | $ | $ 4,000,000 | |||
Escrow agreement four [member] | ||||
IfrsStatementLineItems [Line Items] | ||||
Stock issued, shares | 300,000 | |||
Shares issued, amount | $ | $ 6,000,000 |
SCHEDULE OF CASH AND CASH EQUIV
SCHEDULE OF CASH AND CASH EQUIVALENTS (Details) - CAD ($) | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Cash and cash equivalents [abstract] | |||
Cash held in banks | $ 7,500,607 | $ 22,729,212 | |
Guaranteed investment certificates | 394,174 | 346,501 | |
Cash and Cash Equivalents | $ 7,894,781 | $ 23,075,713 | $ 1,982,416 |
CASH AND CASH EQUIVALENTS (Deta
CASH AND CASH EQUIVALENTS (Details Narrative) - Guaranteed investment certificate [member] | Oct. 22, 2022 CAD ($) | Oct. 22, 2022 USD ($) | Aug. 23, 2022 CAD ($) | Aug. 23, 2022 CAD ($) | May 30, 2022 CAD ($) | Mar. 27, 2022 CAD ($) | Dec. 21, 2021 CAD ($) | May 28, 2021 CAD ($) | Mar. 27, 2021 CAD ($) | Mar. 27, 2020 CAD ($) |
IfrsStatementLineItems [Line Items] | ||||||||||
Purchase of financial instrument | $ 140,738 | $ 143,436 | $ 50,000 | $ 140,000 | $ 142,000 | |||||
Financial instrument term | 1 year | 1 year | 1 year | 1 year | ||||||
Average effective Instrument rate | 4.50% | 0.05% | 0.35% | 0.50% | ||||||
Renew of financial instruments | $ 50,000 | $ 50,018 | $ 140,738 | $ 143,436 | $ 140,493 | $ 142,852 | $ 142,710 | |||
Renewed financial instrument term | 5 months | 5 months | 1 year | 1 year | 1 year | 1 year | ||||
Renewed effective instrument rate | 0.05% | 0.05% | 4.50% | 0.75% | 1% | 0.10% |
SCHEDULE OF AMOUNTS RECEIVABLE
SCHEDULE OF AMOUNTS RECEIVABLE (Details) - CAD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Schedule Of Amounts Receivable | ||
Trade accounts receivable | $ 1,343,795 | $ 951,314 |
Corporate taxes receivable | 182,820 | |
Taxes receivable | 745,170 | 272,993 |
Trade and other receivables | $ 2,088,965 | $ 1,407,127 |
SCHEDULE OF INVENTORIES (Detail
SCHEDULE OF INVENTORIES (Details) - CAD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Finished goods | $ 542,934 | $ 3,017,363 |
Parts | 513,008 | 373,459 |
Inventories | $ 1,055,942 | $ 3,390,822 |
SCHEDULE OF COST OF SALES (Deta
SCHEDULE OF COST OF SALES (Details) - CAD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Inventory | $ 6,048,348 | $ 3,420,713 |
Consulting and services | 730,170 | 679,345 |
Other | 35,866 | 310,719 |
Cost of sales | $ 6,814,384 | $ 4,410,777 |
INVENTORY (Details Narrative)
INVENTORY (Details Narrative) - CAD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
IfrsStatementLineItems [Line Items] | ||
Cost of sales | $ 6,814,384 | $ 4,410,777 |
Reserve inventory write down | 1,976,514 | |
Inventory [member] | ||
IfrsStatementLineItems [Line Items] | ||
Cost of sales | $ 6,048,348 | $ 3,420,713 |
DISCLOSURE OF NOTES RECEIVABLE
DISCLOSURE OF NOTES RECEIVABLE (Details) - CAD ($) | 12 Months Ended | |||||||
Nov. 22, 2022 | Nov. 17, 2021 | Sep. 09, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | ||||
IfrsStatementLineItems [Line Items] | ||||||||
Principal | $ 1,194,078 | $ 1,988,815 | ||||||
Interest | 86,169 | 39,794 | ||||||
Accretion | 40,735 | 17,038 | ||||||
(Impairment)/ Recovery | (309,385) | (891,471) | ||||||
Repayments | (842,297) | |||||||
Balance | 169,300 | 1,154,176 | ||||||
(Impairment)/ Recovery | 309,385 | 891,471 | ||||||
Note receivable | $ (169,300) | $ (1,154,176) | ||||||
Note 1 [member] | ||||||||
IfrsStatementLineItems [Line Items] | ||||||||
Maturity date | [1] | Mar. 31, 2023 | Oct. 21, 2022 | |||||
Rate | [1] | 0% | 0% | |||||
Principal | [1] | $ 190,396 | $ 180,597 | |||||
Interest | [1] | |||||||
Accretion | [1] | 12,764 | 9,573 | |||||
(Impairment)/ Recovery | [1] | |||||||
Repayments | [1] | (33,860) | ||||||
Balance | [1] | 169,300 | 190,170 | |||||
(Impairment)/ Recovery | [1] | |||||||
Note receivable | [1] | $ (169,300) | $ (190,170) | |||||
Note 2 [member] | ||||||||
IfrsStatementLineItems [Line Items] | ||||||||
Maturity date | [1] | Sep. 22, 2024 | Sep. 22, 2024 | |||||
Rate | 5% | 5% | [1] | 5% | [1] | |||
Principal | [1] | $ 1,003,682 | $ 943,385 | |||||
Interest | [1] | 48,992 | 13,156 | |||||
Accretion | [1] | 27,971 | 7,465 | |||||
(Impairment)/ Recovery | [1] | (1,080,645) | ||||||
Repayments | [1] | |||||||
Balance | [1] | 964,006 | ||||||
(Impairment)/ Recovery | [1] | 1,080,645 | ||||||
Note receivable | [1] | $ (964,006) | ||||||
Note 3 [member] | ||||||||
IfrsStatementLineItems [Line Items] | ||||||||
Maturity date | Apr. 26, 2022 | Apr. 26, 2022 | Apr. 26, 2022 | |||||
Rate | 8% | 8% | 8% | |||||
Principal | $ 750,000 | |||||||
Interest | $ 258,437 | 37,177 | 21,260 | |||||
Accretion | ||||||||
(Impairment)/ Recovery | (771,260) | (771,260) | ||||||
Repayments | (808,437) | |||||||
Balance | ||||||||
(Impairment)/ Recovery | 771,260 | 771,260 | ||||||
Note receivable | ||||||||
Note 4 [Member] | ||||||||
IfrsStatementLineItems [Line Items] | ||||||||
Maturity date | [1] | Jun. 01, 2023 | ||||||
Rate | [1] | 8% | ||||||
Principal | [1] | $ 114,833 | ||||||
Interest | [1] | 5,378 | ||||||
Accretion | [1] | |||||||
(Impairment)/ Recovery | [1] | (120,211) | ||||||
Repayments | [1] | |||||||
Balance | [1] | |||||||
(Impairment)/ Recovery | [1] | 120,211 | ||||||
Note receivable | [1] | |||||||
[1]These notes are denominated in US dollars and are converted to Canadian dollars at the reporting date. |
NOTES RECEIVABLE (Details Narra
NOTES RECEIVABLE (Details Narrative) | 12 Months Ended | |||||||||||
Jan. 30, 2023 CAD ($) | Jan. 30, 2023 USD ($) | Nov. 22, 2022 CAD ($) | Oct. 21, 2022 CAD ($) | Oct. 21, 2022 USD ($) | Nov. 17, 2021 | Sep. 09, 2021 CAD ($) | Dec. 31, 2022 CAD ($) | Dec. 31, 2021 CAD ($) | ||||
IfrsStatementLineItems [Line Items] | ||||||||||||
Repayments of current borrowings | $ 842,297 | |||||||||||
Loans written down | ||||||||||||
Interest | 86,169 | $ 39,794 | ||||||||||
Upon execution [member] | ||||||||||||
IfrsStatementLineItems [Line Items] | ||||||||||||
Payment from notes receivable | $ 550,000 | |||||||||||
Note 1 [member] | ||||||||||||
IfrsStatementLineItems [Line Items] | ||||||||||||
Maturity date | [1] | Mar. 31, 2023 | Oct. 21, 2022 | |||||||||
Repayments of current borrowings | [1] | $ 33,860 | ||||||||||
Interest rate | [1] | 0% | 0% | |||||||||
Interest | [1] | |||||||||||
Note 2 [member] | ||||||||||||
IfrsStatementLineItems [Line Items] | ||||||||||||
Maturity date | [1] | Sep. 22, 2024 | Sep. 22, 2024 | |||||||||
Repayments of current borrowings | [1] | |||||||||||
Interest rate | 5% | 5% | [1] | 5% | [1] | |||||||
Interest | [1] | $ 48,992 | $ 13,156 | |||||||||
Note 3 [member] | ||||||||||||
IfrsStatementLineItems [Line Items] | ||||||||||||
Maturity date | Apr. 26, 2022 | Apr. 26, 2022 | Apr. 26, 2022 | |||||||||
Repayments of current borrowings | $ 808,437 | |||||||||||
Interest rate | 8% | 8% | 8% | |||||||||
Loans written down | ||||||||||||
Interest | $ 258,437 | $ 37,177 | $ 21,260 | |||||||||
Note 4 [Member] | ||||||||||||
IfrsStatementLineItems [Line Items] | ||||||||||||
Maturity date | [1] | Jun. 01, 2023 | ||||||||||
Repayments of current borrowings | [1] | |||||||||||
Interest rate | [1] | 8% | ||||||||||
Loans written down | ||||||||||||
Interest | [1] | $ 5,378 | ||||||||||
Nonadjusting events related party payment [member] | ||||||||||||
IfrsStatementLineItems [Line Items] | ||||||||||||
Payment from notes receivable | $ 34,860 | $ 25,000 | ||||||||||
Nonadjusting events related party payment [member] | Note 1 [member] | ||||||||||||
IfrsStatementLineItems [Line Items] | ||||||||||||
Maturity date | Mar. 31, 2023 | Mar. 31, 2023 | ||||||||||
Repayments of current borrowings | $ 33,369 | $ 25,000 | ||||||||||
[1]These notes are denominated in US dollars and are converted to Canadian dollars at the reporting date. |
SCHEDULE OF PREPAID EXPENSES AN
SCHEDULE OF PREPAID EXPENSES AND DEPOSITS (Details) - CAD ($) | Dec. 31, 2022 | Dec. 31, 2021 | |
Insurance | $ 1,148,455 | $ 2,938,246 | |
Prepaid director fees | 107,763 | ||
Prepaid interest | 1,889 | 6,969 | |
Prepaid marketing services | 733,417 | 1,638,179 | |
Prepaid rent | 12,485 | ||
Prepaid subscriptions | 29,194 | 35,687 | |
Deposits | [1] | 382,284 | 768,033 |
Prepaid expenses and deposits | $ 2,307,724 | $ 5,494,877 | |
[1]A deposit in the amount of $ 228,572 |
SCHEDULE OF PREPAID EXPENSES _2
SCHEDULE OF PREPAID EXPENSES AND DEPOSITS (Details) (Parenthetical) - CAD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Deposit written off | $ 228,572 |
SCHEDULE OF INVESTMENTS (Detail
SCHEDULE OF INVESTMENTS (Details) - CAD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Balance | $ 291,066 | |
Acquisitions | 623,706 | |
Change in fair value | (98,483) | (332,640) |
Balance | $ 192,583 | $ 291,066 |
SCHEDULE OF FAIR VALUE OF INVES
SCHEDULE OF FAIR VALUE OF INVESTMENT (Details) - CAD ($) | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
IfrsStatementLineItems [Line Items] | |||
Fair value of investments | $ 192,583 | $ 291,066 | |
Public company shares [member] | |||
IfrsStatementLineItems [Line Items] | |||
Fair value of investments | 57,143 | 142,857 | |
Private Company Shares [Member] | |||
IfrsStatementLineItems [Line Items] | |||
Fair value of investments | $ 135,440 | 126,780 | |
Public Company Warrants [Member] | |||
IfrsStatementLineItems [Line Items] | |||
Fair value of investments | $ 21,429 |
SCHEDULE OF WEIGHTED AVERAGE AS
SCHEDULE OF WEIGHTED AVERAGE ASSUMPTION FOR FAIR VALUES WARRANTS (Details) | 12 Months Ended | ||
Mar. 10, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | |
IfrsStatementLineItems [Line Items] | |||
Risk free interest rate | |||
Expected volatility | |||
Expected life | 5 years | ||
Expected dividend yield | 0% | ||
Warrants [member] | |||
IfrsStatementLineItems [Line Items] | |||
Risk free interest rate | 0.28% | 4.07% | 0.91% |
Expected volatility | 150.88% | 116% | 124.09% |
Expected life | 2 years | 2 months 15 days | 2 years |
Expected dividend yield | 0% | 0% | 0% |
SCHEDULE OF PROPERTY, PLANT AND
SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT (Details) - CAD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
IfrsStatementLineItems [Line Items] | ||
Property, plant and equipment, cost, beginning balance | $ 466,934 | $ 257,974 |
Additions | 588,320 | 212,579 |
Revaluation | (3,619) | |
Disposals | (89,106) | |
Property, plant and equipment, cost, ending balance | 966,148 | 466,934 |
Accumulated depreciation Property, plant and equipment, beginning balance | 169,891 | 104,104 |
Charge for the year | 469,917 | 65,787 |
Disposals | (78,351) | |
Accumulated depreciation Property, plant and equipment, ending balance | 561,457 | 169,891 |
Property, plant and equipment, net | 404,691 | 297,043 |
Computer equipment [member] | ||
IfrsStatementLineItems [Line Items] | ||
Property, plant and equipment, cost, beginning balance | 54,110 | 24,397 |
Additions | 60,240 | 29,713 |
Revaluation | ||
Disposals | (18,688) | |
Property, plant and equipment, cost, ending balance | 95,662 | 54,110 |
Accumulated depreciation Property, plant and equipment, beginning balance | 25,291 | 12,392 |
Charge for the year | 32,627 | 12,899 |
Disposals | (15,920) | |
Accumulated depreciation Property, plant and equipment, ending balance | 41,998 | 25,291 |
Property, plant and equipment, net | 53,664 | 28,819 |
Furniture and equipment [member] | ||
IfrsStatementLineItems [Line Items] | ||
Property, plant and equipment, cost, beginning balance | 342,472 | 171,606 |
Additions | 528,080 | 170,866 |
Revaluation | ||
Disposals | (36,099) | |
Property, plant and equipment, cost, ending balance | 834,453 | 342,472 |
Accumulated depreciation Property, plant and equipment, beginning balance | 102,277 | 59,963 |
Charge for the year | 433,855 | 42,314 |
Disposals | (33,342) | |
Accumulated depreciation Property, plant and equipment, ending balance | 502,790 | 102,277 |
Property, plant and equipment, net | 331,663 | 240,195 |
Leasehold improvements [member] | ||
IfrsStatementLineItems [Line Items] | ||
Property, plant and equipment, cost, beginning balance | 4,352 | 4,352 |
Additions | ||
Revaluation | ||
Disposals | (4,352) | |
Property, plant and equipment, cost, ending balance | 4,352 | |
Accumulated depreciation Property, plant and equipment, beginning balance | 4,352 | 3,220 |
Charge for the year | 1,132 | |
Disposals | (4,352) | |
Accumulated depreciation Property, plant and equipment, ending balance | 4,352 | |
Property, plant and equipment, net | ||
Computer software [member] | ||
IfrsStatementLineItems [Line Items] | ||
Property, plant and equipment, cost, beginning balance | 29,967 | 29,967 |
Additions | ||
Revaluation | ||
Disposals | (29,967) | |
Property, plant and equipment, cost, ending balance | 29,967 | |
Accumulated depreciation Property, plant and equipment, beginning balance | 24,737 | 22,496 |
Charge for the year | 2,241 | |
Disposals | (24,737) | |
Accumulated depreciation Property, plant and equipment, ending balance | 24,737 | |
Property, plant and equipment, net | 5,230 | |
Vehicles [member] | ||
IfrsStatementLineItems [Line Items] | ||
Property, plant and equipment, cost, beginning balance | 36,033 | 27,652 |
Additions | 12,000 | |
Revaluation | (3,619) | |
Disposals | ||
Property, plant and equipment, cost, ending balance | 36,033 | 36,033 |
Accumulated depreciation Property, plant and equipment, beginning balance | 13,234 | 6,033 |
Charge for the year | 3,435 | 7,201 |
Disposals | ||
Accumulated depreciation Property, plant and equipment, ending balance | 16,669 | 13,234 |
Property, plant and equipment, net | $ 19,364 | $ 22,799 |
SCHEDULE OF INTELLECTUAL PROPER
SCHEDULE OF INTELLECTUAL PROPERTY (Details) - CAD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | ||
IfrsStatementLineItems [Line Items] | |||
Impairment | $ (6,454,914) | $ (4,579,763) | |
Net book value | 179,801 | 6,534,310 | |
Patent [member] | |||
IfrsStatementLineItems [Line Items] | |||
Net book value | |||
Customer-related intangible assets [member] | |||
IfrsStatementLineItems [Line Items] | |||
Net book value | 109,269 | 136,586 | |
Brand names [member] | |||
IfrsStatementLineItems [Line Items] | |||
Net book value | 19,550 | ||
Computer software [member] | |||
IfrsStatementLineItems [Line Items] | |||
Net book value | [1] | 70,532 | 437,765 |
Goodwill [member] | |||
IfrsStatementLineItems [Line Items] | |||
Net book value | 5,940,409 | ||
Gross carrying amount [member] | |||
IfrsStatementLineItems [Line Items] | |||
Cost, beginning balance | 6,754,340 | 2,524,494 | |
Additions | 4,684 | 8,809,609 | |
Impairment | (6,685,339) | (4,579,763) | |
Foreign exchange translation | 288,929 | ||
Cost, ending balance | 362,614 | 6,754,340 | |
Gross carrying amount [member] | Patent [member] | |||
IfrsStatementLineItems [Line Items] | |||
Cost, beginning balance | 41,931 | 41,931 | |
Additions | |||
Impairment | |||
Foreign exchange translation | |||
Cost, ending balance | 41,931 | 41,931 | |
Gross carrying amount [member] | Customer-related intangible assets [member] | |||
IfrsStatementLineItems [Line Items] | |||
Cost, beginning balance | 197,000 | 197,000 | |
Additions | |||
Impairment | |||
Foreign exchange translation | |||
Cost, ending balance | 197,000 | 197,000 | |
Gross carrying amount [member] | Brand names [member] | |||
IfrsStatementLineItems [Line Items] | |||
Cost, beginning balance | 23,000 | ||
Additions | 23,000 | ||
Impairment | (24,571) | ||
Foreign exchange translation | 1,571 | ||
Cost, ending balance | 23,000 | ||
Gross carrying amount [member] | Computer software [member] | |||
IfrsStatementLineItems [Line Items] | |||
Cost, beginning balance | [1] | 552,000 | 119,000 |
Additions | [1] | 4,684 | 433,000 |
Impairment | [1] | (462,577) | |
Foreign exchange translation | [1] | 29,576 | |
Cost, ending balance | [1] | 123,683 | 552,000 |
Gross carrying amount [member] | Goodwill [member] | |||
IfrsStatementLineItems [Line Items] | |||
Cost, beginning balance | 5,940,409 | 2,166,563 | |
Additions | 8,353,609 | ||
Impairment | (6,198,191) | (4,579,763) | |
Foreign exchange translation | 257,782 | ||
Cost, ending balance | 5,940,409 | ||
Accumulated depreciation and amortisation [member] | |||
IfrsStatementLineItems [Line Items] | |||
Impairment | (230,425) | ||
Accumulated amortization, beginning balance | 220,030 | 84,064 | |
Accumulated amortization, Change for the period | 179,482 | 135,966 | |
Accumulated amortization, Foreign exchange translation | 13,726 | ||
Accumulated amortization, ending balance | 182,813 | 220,030 | |
Accumulated depreciation and amortisation [member] | Patent [member] | |||
IfrsStatementLineItems [Line Items] | |||
Impairment | |||
Accumulated amortization, beginning balance | 41,931 | 41,931 | |
Accumulated amortization, Change for the period | |||
Accumulated amortization, Foreign exchange translation | |||
Accumulated amortization, ending balance | 41,931 | 41,931 | |
Accumulated depreciation and amortisation [member] | Customer-related intangible assets [member] | |||
IfrsStatementLineItems [Line Items] | |||
Impairment | |||
Accumulated amortization, beginning balance | 60,414 | 26,267 | |
Accumulated amortization, Change for the period | 27,317 | 34,147 | |
Accumulated amortization, Foreign exchange translation | |||
Accumulated amortization, ending balance | 87,731 | 60,414 | |
Accumulated depreciation and amortisation [member] | Brand names [member] | |||
IfrsStatementLineItems [Line Items] | |||
Impairment | (8,600) | ||
Accumulated amortization, beginning balance | 3,450 | ||
Accumulated amortization, Change for the period | 4,719 | 3,450 | |
Accumulated amortization, Foreign exchange translation | 431 | ||
Accumulated amortization, ending balance | 3,450 | ||
Accumulated depreciation and amortisation [member] | Computer software [member] | |||
IfrsStatementLineItems [Line Items] | |||
Impairment | [1] | (221,825) | |
Accumulated amortization, beginning balance | [1] | 114,235 | 15,866 |
Accumulated amortization, Change for the period | [1] | 147,446 | 98,369 |
Accumulated amortization, Foreign exchange translation | [1] | 13,295 | |
Accumulated amortization, ending balance | [1] | 53,151 | 114,235 |
Accumulated depreciation and amortisation [member] | Goodwill [member] | |||
IfrsStatementLineItems [Line Items] | |||
Impairment | |||
Accumulated amortization, beginning balance | |||
Accumulated amortization, Change for the period | |||
Accumulated amortization, Foreign exchange translation | |||
Accumulated amortization, ending balance | |||
[1]Software acquired via acquisition of Vital and Dronelogics. |
INVESTMENTS (Details Narrative)
INVESTMENTS (Details Narrative) | Oct. 27, 2021 USD ($) shares | Mar. 10, 2021 CAD ($) $ / shares shares |
Number of shares purchased | shares | 50,000 | 1,428,571 |
Number of shares purchased, value | $ 100,000 | $ 500,000 |
Description for common stock and warrants activity | The warrants have an exercise price of $0.50 each and convert to one common share, and expire on March 17, 2023 | |
Warrant, exercise price | $ / shares | $ 0.50 | |
Warrants expiration date | Mar. 17, 2023 |
INTANGIBLE ASSETS AND GOODWIL_2
INTANGIBLE ASSETS AND GOODWILL (Details Narrative) - CAD ($) | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Mar. 25, 2021 | Apr. 30, 2020 | |
IfrsStatementLineItems [Line Items] | ||||
Goodwill | $ 5,940,409 | |||
Actuarial assumption of discount rates | 10% | |||
Vital [member] | ||||
IfrsStatementLineItems [Line Items] | ||||
[custom:PercentageOfWeightedAverageRevenueGrowthRateEarningsBeforeInterestTaxesDepreciationAndAmortization-0] | 0% | 42% | ||
[custom:PercentageOfWeightedAverageCostOfCapital-0] | 29% | 24% | ||
Impairment loss recognised in profit or loss, goodwill | $ 4,031,628 | $ 4,579,763 | ||
Impairment loss recognised in profit or loss, intangible assets other than goodwill | 15,971 | 240,752 | ||
Reserve of change in value of time value of options | $ 570,133 | |||
Dronelogics [member] | ||||
IfrsStatementLineItems [Line Items] | ||||
[custom:PercentageOfWeightedAverageRevenueGrowthRateEarningsBeforeInterestTaxesDepreciationAndAmortization-0] | 6.50% | 14% | ||
[custom:PercentageOfWeightedAverageCostOfCapital-0] | 19% | 17% | ||
Impairment loss recognised in profit or loss, goodwill | $ 2,166,563 | |||
Reserve of change in value of time value of options | $ 104,248 | $ 597,100 | ||
Vital and dronelogics [member] | ||||
IfrsStatementLineItems [Line Items] | ||||
Growth rate used to extrapolate cash flow projections | 2% | 2% | ||
Brand [Member] | ||||
IfrsStatementLineItems [Line Items] | ||||
Customer relationships | $ 23,000 | |||
Computer software [member] | Vital [member] | ||||
IfrsStatementLineItems [Line Items] | ||||
Customer relationships | 433,000 | |||
Goodwill [member] | Dronelogics [member] | ||||
IfrsStatementLineItems [Line Items] | ||||
Percentage of voting equity interests acquired | 100% | |||
Goodwill | $ 8,353,609 | $ 2,166,563 |
SCHEDULE OF RIGHT OF USE ASSETS
SCHEDULE OF RIGHT OF USE ASSETS (Details) - CAD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Right of use assets, at cost, beginning | $ 242,967 | |
Additions | 447,242 | |
Lease adjustment | (7,092) | |
Right of use assets, at cost, ending | 683,117 | $ 242,967 |
Accumulated amortization, Beginning | 215,011 | 98,548 |
Charge for the year | 123,360 | 109,311 |
Historical correction | 7,152 | |
Accumulated amortization, Ending | 338,371 | 215,011 |
Right of use assets | $ 344,746 | $ 468,106 |
SCHEDULE OF OPERATING LEASE LIA
SCHEDULE OF OPERATING LEASE LIABILITIES (Details) - CAD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Balance - Beginning of period | $ 489,123 | $ 158,124 |
Additions | 440,675 | |
Interest expense | 39,795 | 26,964 |
Lease Payments | (150,275) | (128,995) |
Lease removal | (7,645) | |
Balance - Ending of period | 378,643 | 489,123 |
Current lease liabilities | 133,962 | 110,481 |
Non-current lease liabilities | 244,681 | 378,642 |
Lease liabilities | $ 378,643 | $ 489,123 |
SCHEDULE OF OPERATING MATURITY
SCHEDULE OF OPERATING MATURITY ANALYSIS (Details) - CAD ($) | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
IfrsStatementLineItems [Line Items] | |||
Total undiscounted lease liabilities | $ 440,268 | ||
Amount representing interest | (61,625) | ||
Lease liability | 378,643 | $ 489,123 | $ 158,124 |
Not later than one year [member] | |||
IfrsStatementLineItems [Line Items] | |||
Total undiscounted lease liabilities | 147,340 | ||
Later than one year and not later than three years [member] | |||
IfrsStatementLineItems [Line Items] | |||
Total undiscounted lease liabilities | 209,078 | ||
Later than four years and not later than five years [member] | |||
IfrsStatementLineItems [Line Items] | |||
Total undiscounted lease liabilities | $ 83,850 |
SCHEDULE OF TRADE PAYABLES AND
SCHEDULE OF TRADE PAYABLES AND ACCRUED LIABILITIES (Details) - CAD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Trade accounts payable | $ 751,422 | $ 362,890 |
Accrued liabilities | 2,031,545 | 402,540 |
Government grant payable | 33,709 | 33,709 |
Trade payables and accrued liabilities | $ 2,816,676 | $ 799,139 |
SCHEDULE OF DEFERRED INCOME (De
SCHEDULE OF DEFERRED INCOME (Details) - CAD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred income from customers | $ 58,457 | $ 68,053 |
Deferred income from government | 5,233 | 5,233 |
Deferred Income | $ 63,690 | $ 73,286 |
SCHEDULE OF LOANS PAYABLE (Deta
SCHEDULE OF LOANS PAYABLE (Details) - CAD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Opening balance | $ 93,317 | $ 97,916 |
Issuance of loans payable | 60,000 | |
Fair value adjustment | (4,891) | (24,576) |
Repayment of loans payable | (6,746) | (44,428) |
Accretion expense | 4,891 | 4,405 |
Ending balance | $ 86,571 | $ 93,317 |
SCHEDULE OF LOANS (Details)
SCHEDULE OF LOANS (Details) - CAD ($) | 12 Months Ended | |||
Apr. 23, 2021 | May 19, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | |
IfrsStatementLineItems [Line Items] | ||||
Total | $ 86,571 | $ 93,317 | ||
Rate | 25% | |||
CEBA [member] | ||||
IfrsStatementLineItems [Line Items] | ||||
Total | $ 37,383 | 37,384 | ||
Start Date | May 19, 2020 | |||
Maturity Date | three-year term | three-year term | Dec. 31, 2023 | |
Rate | 5% | 5% | 0% | |
CEBA [member] | ||||
IfrsStatementLineItems [Line Items] | ||||
Total | $ 37,383 | 37,383 | ||
Start Date | Apr. 23, 2021 | |||
Maturity Date | Dec. 31, 2023 | |||
Rate | 0% | |||
Vehicle loan [member] | ||||
IfrsStatementLineItems [Line Items] | ||||
Total | $ 11,805 | $ 18,550 | ||
Start Date | Aug. 30, 2019 | |||
Maturity Date | Sep. 11, 2024 | |||
Rate | 6.99% |
LEASE LIABILITY (Details Narrat
LEASE LIABILITY (Details Narrative) | 12 Months Ended |
Dec. 31, 2022 | |
Depreciation lease liability | The Company leases certain assets under lease agreements. The lease liabilities consist of leases of facilities and vehicles with terms ranging from one to five years. The leases are calculated using incremental borrowing rates ranging from 7.5% to 10.5% |
LOANS PAYABLE (Details Narrativ
LOANS PAYABLE (Details Narrative) - CAD ($) | 12 Months Ended | |||
Apr. 23, 2021 | Dec. 04, 2020 | May 19, 2020 | Dec. 31, 2022 | |
IfrsStatementLineItems [Line Items] | ||||
Interest rate | 25% | |||
CEBA [member] | ||||
IfrsStatementLineItems [Line Items] | ||||
Loan received | $ 40,000 | |||
Interest rate | 5% | 5% | 0% | |
Loans forgivable amount | $ 20,000 | $ 10,000 | ||
Maturity | three-year term | three-year term | Dec. 31, 2023 | |
Proceeds from loan | $ 20,000 | |||
Loan forgiveness | $ 10,000 | |||
Unsecured loan received | $ 60,000 |
SCHEDULE OF STOCK OPTIONS OUTST
SCHEDULE OF STOCK OPTIONS OUTSTANDING AND EXERCISABLE (Details) | 12 Months Ended | |
Dec. 31, 2022 shares $ / shares | Dec. 31, 2021 shares $ / shares | |
IfrsStatementLineItems [Line Items] | ||
Remaining Contractual Life (years) | 5 months 19 days | 1 year 2 months 12 days |
Number of Options Outstanding | 877,157 | 1,035,991 |
Number of options outstanding, Beginning Balance | 1,035,991 | 1,193,659 |
Weighted average exercise price, Beginning Balance | $ / shares | $ 4.60 | $ 2.75 |
Number of options outstanding, Exercised | (12,500) | (405,494) |
Weighted average exercise price, forfeited | $ / shares | $ 4.77 | $ 2.50 |
Number of options outstanding, Granted | 247,826 | |
Weighted average exercise price, Granted | $ / shares | $ 10.12 | |
Weighted average exercise price, Granted | $ / shares | $ 2.15 | |
Number of options outstanding, forfeited | (146,334) | |
Number of options outstanding, Ending Balance | 877,157 | 1,035,991 |
Weighted average exercise price, Ending Balance | $ / shares | $ 4.60 | $ 4.60 |
Incentive Share Compensation Plan [Member] | ||
IfrsStatementLineItems [Line Items] | ||
Number of Options Outstanding | 877,157 | |
Number of Options Exercisable | 752,599 | |
Number of options outstanding, Ending Balance | 877,157 | |
Exercise price one [member] | Incentive Share Compensation Plan [Member] | ||
IfrsStatementLineItems [Line Items] | ||
Grant Date | Oct. 30, 2019 | |
Expiry Date | Oct. 30, 2029 | |
Exercise Price | $ / shares | $ 2.50 | |
Remaining Contractual Life (years) | 6 years 10 months 2 days | |
Number of Options Outstanding | 286,665 | |
Number of Options Exercisable | 286,665 | |
Number of options outstanding, Ending Balance | 286,665 | |
Exercise price two [member] | Incentive Share Compensation Plan [Member] | ||
IfrsStatementLineItems [Line Items] | ||
Grant Date | Nov. 19, 2019 | |
Expiry Date | Nov. 19, 2029 | |
Exercise Price | $ / shares | $ 2.50 | |
Remaining Contractual Life (years) | 6 years 10 months 20 days | |
Number of Options Outstanding | 50,000 | |
Number of Options Exercisable | 50,000 | |
Number of options outstanding, Ending Balance | 50,000 | |
Exercise price three [member] | Incentive Share Compensation Plan [Member] | ||
IfrsStatementLineItems [Line Items] | ||
Grant Date | Apr. 30, 2020 | |
Expiry Date | Apr. 30, 2030 | |
Exercise Price | $ / shares | $ 2.50 | |
Remaining Contractual Life (years) | 7 years 3 months 29 days | |
Number of Options Outstanding | 85,000 | |
Number of Options Exercisable | 85,000 | |
Number of options outstanding, Ending Balance | 85,000 | |
Exercise price four [member] | Incentive Share Compensation Plan [Member] | ||
IfrsStatementLineItems [Line Items] | ||
Grant Date | Apr. 30, 2020 | |
Expiry Date | Apr. 30, 2030 | |
Exercise Price | $ / shares | $ 3.85 | |
Remaining Contractual Life (years) | 7 years 3 months 29 days | |
Number of Options Outstanding | 110,000 | |
Number of Options Exercisable | 110,000 | |
Number of options outstanding, Ending Balance | 110,000 | |
Exercise price five [member] | Incentive Share Compensation Plan [Member] | ||
IfrsStatementLineItems [Line Items] | ||
Grant Date | Jul. 03, 2020 | |
Expiry Date | Jul. 03, 2025 | |
Exercise Price | $ / shares | $ 3.20 | |
Remaining Contractual Life (years) | 2 years 6 months 3 days | |
Number of Options Outstanding | 100,000 | |
Number of Options Exercisable | 100,000 | |
Number of options outstanding, Ending Balance | 100,000 | |
Exercise price six [member] | Incentive Share Compensation Plan [Member] | ||
IfrsStatementLineItems [Line Items] | ||
Grant Date | Nov. 24, 2020 | |
Expiry Date | Nov. 24, 2030 | |
Exercise Price | $ / shares | $ 2.50 | |
Remaining Contractual Life (years) | 7 years 10 months 24 days | |
Number of Options Outstanding | 32,000 | |
Number of Options Exercisable | 32,000 | |
Number of options outstanding, Ending Balance | 32,000 | |
Exercise price seven [member] | Incentive Share Compensation Plan [Member] | ||
IfrsStatementLineItems [Line Items] | ||
Grant Date | Feb. 02, 2021 | |
Expiry Date | Feb. 02, 2031 | |
Exercise Price | $ / shares | $ 13.20 | |
Remaining Contractual Life (years) | 8 years 1 month 6 days | |
Number of Options Outstanding | 30,000 | |
Number of Options Exercisable | 20,000 | |
Number of options outstanding, Ending Balance | 30,000 | |
Exercise price eight [member] | Incentive Share Compensation Plan [Member] | ||
IfrsStatementLineItems [Line Items] | ||
Grant Date | Mar. 08, 2021 | |
Expiry Date | Mar. 08, 2026 | |
Exercise Price | $ / shares | $ 13.90 | |
Remaining Contractual Life (years) | 3 years 2 months 8 days | |
Number of Options Outstanding | 10,000 | |
Number of Options Exercisable | 10,000 | |
Number of options outstanding, Ending Balance | 10,000 | |
Exercise price nine [member] | Incentive Share Compensation Plan [Member] | ||
IfrsStatementLineItems [Line Items] | ||
Grant Date | Apr. 27, 2021 | |
Expiry Date | Apr. 27, 2031 | |
Exercise Price | $ / shares | $ 10.15 | |
Remaining Contractual Life (years) | 8 years 3 months 29 days | |
Number of Options Outstanding | 147,666 | |
Number of Options Exercisable | 50,326 | |
Number of options outstanding, Ending Balance | 147,666 | |
Exercise price pen [member] | Incentive Share Compensation Plan [Member] | ||
IfrsStatementLineItems [Line Items] | ||
Grant Date | Sep. 09, 2021 | |
Expiry Date | Sep. 09, 2026 | |
Exercise Price | $ / shares | $ 4.84 | |
Remaining Contractual Life (years) | 3 years 8 months 8 days | |
Number of Options Outstanding | 25,826 | |
Number of Options Exercisable | 8,608 | |
Number of options outstanding, Ending Balance | 25,826 |
SCHEDULE OF WEIGHTED AVERAGE _2
SCHEDULE OF WEIGHTED AVERAGE ASSUMPTIONS (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
IfrsStatementLineItems [Line Items] | ||
Risk free interest rate | ||
Expected volatility | ||
Expected life | 5 years | |
Expected dividend yield | 0% | |
Exercise price | ||
Bottom of range [member] | ||
IfrsStatementLineItems [Line Items] | ||
Risk free interest rate | 0.69% | |
Expected volatility | 111.87% | |
Exercise price | $ 13.20 | |
Top of range [member] | ||
IfrsStatementLineItems [Line Items] | ||
Risk free interest rate | 1.40% | |
Expected volatility | 113.16% | |
Exercise price | $ 13.90 |
SUMMARY OF CHANGES IN RESTRICTE
SUMMARY OF CHANGES IN RESTRICTED STOCK UNITS (Details) - shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
IfrsStatementLineItems [Line Items] | ||
Number of RSUs outstanding, Beginning of the period | 7,214,819 | |
Number of RSUs outstanding, Ending of the period | 6,716,797 | 7,214,819 |
Restricted stock units rsu [member] | ||
IfrsStatementLineItems [Line Items] | ||
Number of RSUs outstanding, Beginning of the period | 514,832 | 614,666 |
Vested | (1,072,595) | (448,660) |
Issued | 1,820,972 | 348,826 |
Forfeited | (64,334) | |
Number of RSUs outstanding, Ending of the period | 1,198,875 | 514,832 |
SCHEDULE OF WARRANT DERIVATIVE
SCHEDULE OF WARRANT DERIVATIVE LIABILITY (Details) - Warrants [member] | 12 Months Ended | |||
Dec. 31, 2022 CAD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CAD ($) | Dec. 31, 2021 USD ($) | |
IfrsStatementLineItems [Line Items] | ||||
Beginning of the period | $ 4,865,772 | $ 748,634 | ||
Warrants issuance | 8,261,511 | |||
Exercised | (98,048) | |||
Change in fair value of warrants outstanding | (4,865,772) | (4,046,325) | ||
End of the period | $ 4,865,772 | |||
Warrants | $ 4,865,772 | |||
Contingent consideration | 57,314 | 694,230 | ||
Derivative liability | $ 57,314 | $ 5,560,002 |
SCHEDULE OF WARRANTS AND FAIR V
SCHEDULE OF WARRANTS AND FAIR VALUE OUTSTANDING (Details) | 12 Months Ended | |
Dec. 31, 2022 USD ($) shares $ / shares | Dec. 31, 2021 USD ($) shares | |
IfrsStatementLineItems [Line Items] | ||
Number of Warrants Outstanding | shares | 6,716,797 | 7,214,819 |
Fair Value of warrants | $ | $ 4,865,772 | |
Range 1 [member] | ||
IfrsStatementLineItems [Line Items] | ||
Issue date | Nov. 30, 2020 | |
Exercise price | $ / shares | $ 3.55 | |
Number of Warrants Outstanding | shares | 482,425 | |
Fair Value of warrants | $ | $ 182,262 | |
Range 2 [member] | ||
IfrsStatementLineItems [Line Items] | ||
Issue date | Feb. 05, 2021 | |
Exercise price | $ / shares | $ 3.55 | |
Number of Warrants Outstanding | shares | 1,319,675 | 1,323,275 |
Fair Value of warrants | $ | $ 951,226 | |
Range 3 [member] | ||
IfrsStatementLineItems [Line Items] | ||
Issue date | Mar. 05, 2021 | |
Exercise price | $ / shares | $ 3.55 | |
Number of Warrants Outstanding | shares | 5,142,324 | 5,154,321 |
Fair Value of warrants | $ | $ 3,732,284 | |
Range 4 [Member] | ||
IfrsStatementLineItems [Line Items] | ||
Issue date | Jul. 29, 2021 | |
Exercise price | $ / shares | $ 5 | |
Number of Warrants Outstanding | shares | 250,000 | 250,000 |
Fair Value of warrants | $ | ||
Range 5 [Member] | ||
IfrsStatementLineItems [Line Items] | ||
Issue date | Sep. 14, 2021 | |
Exercise price | $ / shares | $ 5 | |
Number of Warrants Outstanding | shares | 4,798 | 4,798 |
Fair Value of warrants | $ |
SCHEDULE OF WEIGHTED AVERAGE _3
SCHEDULE OF WEIGHTED AVERAGE ASSUMPTION FOR WARRANTS (Details) | 12 Months Ended | ||
Mar. 10, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | |
IfrsStatementLineItems [Line Items] | |||
Risk free interest rate | |||
Expected volatility | |||
Expected life | 5 years | ||
Expected dividend yield | 0% | ||
Bottom of range [member] | |||
IfrsStatementLineItems [Line Items] | |||
Risk free interest rate | 0.69% | ||
Expected volatility | 111.87% | ||
Top of range [member] | |||
IfrsStatementLineItems [Line Items] | |||
Risk free interest rate | 1.40% | ||
Expected volatility | 113.16% | ||
Warrants [member] | |||
IfrsStatementLineItems [Line Items] | |||
Risk free interest rate | 0.28% | 4.07% | 0.91% |
Expected volatility | 150.88% | 116% | 124.09% |
Expected life | 2 years | 2 months 15 days | 2 years |
Expected dividend yield | 0% | 0% | 0% |
Warrants [member] | Bottom of range [member] | |||
IfrsStatementLineItems [Line Items] | |||
Risk free interest rate | 0.23% | ||
Expected volatility | 91.66% | 70.95% | |
Expected life | 1 month 6 days | 2 years | |
Warrants [member] | Top of range [member] | |||
IfrsStatementLineItems [Line Items] | |||
Risk free interest rate | 0.95% | ||
Expected volatility | 93.48% | 144.59% | |
Expected life | 2 months 4 days | 3 years |
SUMMARY OF CHANGES IN WARRANTS
SUMMARY OF CHANGES IN WARRANTS (Details) | 12 Months Ended | |
Dec. 31, 2022 shares $ / shares | Dec. 31, 2021 shares $ / shares | |
IfrsStatementLineItems [Line Items] | ||
Number of RSUs outstanding, Beginning of the period | shares | 7,214,819 | |
Number of RSUs outstanding, Ending of the period | shares | 6,716,797 | 7,214,819 |
Weighted Average Exercise Price, Outstanding, Ending Balance | ||
Warrants [member] | ||
IfrsStatementLineItems [Line Items] | ||
Number of RSUs outstanding, Beginning of the period | 8,414,819 | 2,416,864 |
Weighted Average Exercise Price, Outstanding, Beginning Balance | $ 4.99 | $ 2.95 |
Warrants, Excercised | (16,538) | (1,939,534) |
Weighted Average Exercise Price, Exercised | $ 4.51 | $ 2.54 |
Warrants, Forfeited | (6,000) | |
Weighted Average Exercise Price, Forfeited | $ 2.50 | |
Warrants, Issued | 7,943,489 | |
Weighted Average Exercise Price, Issued | $ 5.10 | |
Warrants, Expired | (481,484) | |
Weighted Average Exercise Price, Expired | $ 4.61 | |
Number of RSUs outstanding, Ending of the period | 7,916,797 | 8,414,819 |
Weighted Average Exercise Price, Outstanding, Ending Balance | $ 5.08 | $ 4.99 |
SCHEDULE OF WARRANTS OUTSTANDIN
SCHEDULE OF WARRANTS OUTSTANDING (Details) | 12 Months Ended | |
Dec. 31, 2022 $ / shares shares | Dec. 31, 2022 $ / shares shares | |
Warrant one [member] | ||
IfrsStatementLineItems [Line Items] | ||
Date issued | Feb. 05, 2021 | |
Expiry date | Feb. 05, 2023 | |
Exercise price | $ / shares | $ 3.55 | |
Number of warrants outstanding | 1,319,675 | 1,319,675 |
Warrant two [member] | ||
IfrsStatementLineItems [Line Items] | ||
Date issued | Mar. 05, 2021 | |
Expiry date | Mar. 05, 2023 | |
Exercise price | $ / shares | $ 3.55 | |
Number of warrants outstanding | 5,142,324 | 5,142,324 |
Warrant three [member] | ||
IfrsStatementLineItems [Line Items] | ||
Date issued | Mar. 22, 2021 | |
Expiry date | Mar. 22, 2023 | |
Exercise price | $ / shares | $ 13.35 | |
Number of warrants outstanding | 1,200,000 | 1,200,000 |
Warrant four [member] | ||
IfrsStatementLineItems [Line Items] | ||
Date issued | Jul. 29, 2021 | |
Expiry date | Jul. 29, 2024 | |
Exercise price | $ / shares | $ 5 | |
Number of warrants outstanding | 250,000 | 250,000 |
Warrant five [member] | ||
IfrsStatementLineItems [Line Items] | ||
Date issued | Sep. 14, 2021 | |
Expiry date | Sep. 14, 2024 | |
Exercise price | $ / shares | $ 5 | |
Number of warrants outstanding | 4,798 | 4,798 |
Warrants [member] | ||
IfrsStatementLineItems [Line Items] | ||
Number of warrants outstanding | 7,916,797 | 7,916,797 |
SHARE CAPITAL (Details Narrativ
SHARE CAPITAL (Details Narrative) - CAD ($) | 12 Months Ended | ||
Mar. 22, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
IfrsStatementLineItems [Line Items] | |||
[custom:StockIssuedDuringPeriodValueExerciseOfWarrants] | $ 87,170 | $ 4,929,790 | |
Issued shares | 6,488,669 | ||
Issued value | $ 18,815,485 | ||
Share capital issuance description | (i) USD $1,000,000; (ii) 15% of the total assets of the Company, measured at the Company’s most recent balance sheet date; or (iii) 15% of the outstanding amount of the common shares of the Company, measured at the Company’s most recent balance sheet date. At the election of the Board of Directors, upon each vesting date, participants receive (a) the issuance of common shares from treasury equal to the number of RSUs vesting, or (b) a cash payment equal to the number of vested RSUs multiplied by the fair market value of a common share, calculated as the closing price of the common shares on the CSE for the trading day immediately preceding such payment date; or (c) a combination of (a) and (b). | Each unit is comprised of one common share and one share purchase warrant. These warrants had a fair value of $0.57 USD allocated to them, have an exercise price of $3.55 USD per warrant, each convert to one common share, and have a life of two years. The fair value of $8,261,511 was allocated to warrant derivative liability. | |
Warrant derivative liability | $ 8,261,511 | ||
Number of stock issued for private placement | 5,095,966 | ||
Value of stock issued for private placement | $ 25,538,213 | ||
Number of share options granted in share-based payment arrangement | 247,826 | ||
Weighted average exercise price of share options granted in share-based payment arrangement | $ 10.12 | ||
Adjustments for share-based payments | $ 3,311,024 | $ 3,952,595 | |
Weighted average remaining contractual life of outstanding share options | 5 months 19 days | 1 year 2 months 12 days | |
Warrants issued | 1,200,000 | ||
Warrants held in escrow | 900,000 | ||
Stock options [member] | |||
IfrsStatementLineItems [Line Items] | |||
Adjustments for share-based payments | $ 502,837 | $ 1,660,894 | |
Restricted stock units [member] | |||
IfrsStatementLineItems [Line Items] | |||
Number of accelerated vesting shares | 1,072,595 | 323,661 | |
Number of shares vested | 1,820,972 | 124,999 | |
Number of shares forfeited | 64,334 | ||
Number of shares granted post consolidation | 348,826 | ||
Share-based payment expense | $ 2,808,187 | $ 2,291,701 | |
Employee [member] | |||
IfrsStatementLineItems [Line Items] | |||
Number of share options granted in share-based payment arrangement | 30,000 | ||
Weighted average exercise price of share options granted in share-based payment arrangement | $ 13.20 | ||
Contractual life of exercisable share options | 10 years | ||
Consultant [member] | |||
IfrsStatementLineItems [Line Items] | |||
Number of share options granted in share-based payment arrangement | 10,000 | ||
Weighted average exercise price of share options granted in share-based payment arrangement | $ 13.90 | ||
Contractual life of exercisable share options | 5 years | ||
Employees and consultant [member] | |||
IfrsStatementLineItems [Line Items] | |||
Number of share options granted in share-based payment arrangement | 182,000 | ||
Weighted average exercise price of share options granted in share-based payment arrangement | $ 10.15 | ||
Contractual life of exercisable share options | 10 years | ||
Employee one [member] | |||
IfrsStatementLineItems [Line Items] | |||
Number of share options granted in share-based payment arrangement | 25,826 | ||
Weighted average exercise price of share options granted in share-based payment arrangement | $ 4.84 | ||
Contractual life of exercisable share options | 5 years | ||
Vital intelligence inc [member] | |||
IfrsStatementLineItems [Line Items] | |||
Share capital issuance description | Each unit is comprised of one common share and one warrant. These warrants have an exercise price of $13.35 per warrant, each convert to one common share, and have a life of two years. | ||
Number of stock units issued for acquisition | 1,200,000 | ||
Common stock 1 [member] | |||
IfrsStatementLineItems [Line Items] | |||
Number of stock issued for exercise of warrants | 16,538 | 1,939,534 | |
[custom:StockIssuedDuringPeriodValueExerciseOfWarrants] | $ 87,170 | $ 4,929,790 | |
Number of stock issued for exercise of options | 12,500 | 405,499 | |
Value of stock issued for exercise of options | $ 26,875 | $ 1,014,123 | |
Restricted share units | 1,072,595 | 448,660 | |
Number of shares issued | 371,901 |
SCHEDULE OF SEGMENTED INFORMATI
SCHEDULE OF SEGMENTED INFORMATION (Details) - CAD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
IfrsStatementLineItems [Line Items] | ||
Sales of goods | $ 5,550,432 | $ 5,103,399 |
Provision of services | 2,054,627 | 1,950,466 |
Total revenue | 7,605,059 | 7,053,865 |
Segment loss | 23,459,253 | 18,575,560 |
Finance and other costs | (44,345) | (5,074) |
Depreciation | 593,277 | 175,098 |
Amortization | 179,482 | 135,966 |
Impairment of goodwill and intangibles | 6,454,914 | 4,579,763 |
Change in fair value of derivative liability | (5,502,688) | (8,149,812) |
Loss on write-off of notes receivable | 309,385 | 891,471 |
Loss on write down of inventory | 1,976,514 | |
Write down of deposit | 228,572 | |
Net loss for the year | 27,654,364 | 16,202,972 |
Drones [Member] | ||
IfrsStatementLineItems [Line Items] | ||
Sales of goods | 5,388,262 | 4,957,134 |
Provision of services | 2,054,627 | 1,950,466 |
Total revenue | 7,442,889 | 6,907,600 |
Segment loss | 9,929,789 | 7,819,739 |
Finance and other costs | (3,529) | 16,272 |
Depreciation | 586,185 | 175,098 |
Amortization | 179,482 | 135,966 |
Impairment of goodwill and intangibles | 2,166,563 | |
Change in fair value of derivative liability | ||
Loss on write-off of notes receivable | 1,080,645 | |
Loss on write down of inventory | 251,754 | |
Write down of deposit | ||
Net loss for the year | 14,190,889 | 8,147,075 |
Vital [member] | ||
IfrsStatementLineItems [Line Items] | ||
Sales of goods | 162,170 | 146,265 |
Provision of services | ||
Total revenue | 162,170 | 146,265 |
Segment loss | 602,580 | 257,656 |
Finance and other costs | ||
Depreciation | ||
Amortization | ||
Impairment of goodwill and intangibles | 4,288,351 | 4,579,763 |
Change in fair value of derivative liability | ||
Loss on write-off of notes receivable | ||
Loss on write down of inventory | 1,724,760 | |
Write down of deposit | 228,572 | |
Net loss for the year | 6,844,263 | 4,837,419 |
Corporate [Member] | ||
IfrsStatementLineItems [Line Items] | ||
Sales of goods | ||
Provision of services | ||
Total revenue | ||
Segment loss | 12,926,884 | 10,498,164 |
Finance and other costs | (40,816) | (21,346) |
Depreciation | 7,092 | |
Amortization | ||
Impairment of goodwill and intangibles | ||
Change in fair value of derivative liability | (5,502,688) | (8,149,812) |
Loss on write-off of notes receivable | (771,260) | 891,471 |
Loss on write down of inventory | ||
Write down of deposit | ||
Net loss for the year | $ 6,619,212 | $ 3,218,477 |
SCHEDULE OF GEOGRAPHIC REVENUE
SCHEDULE OF GEOGRAPHIC REVENUE (Details) - CAD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
IfrsStatementLineItems [Line Items] | ||
Revenue | $ 7,605,059 | $ 7,053,865 |
CA country [member] | ||
IfrsStatementLineItems [Line Items] | ||
Revenue | 6,919,038 | 4,982,373 |
United states [member] | ||
IfrsStatementLineItems [Line Items] | ||
Revenue | $ 686,021 | $ 2,071,492 |
SCHEDULE OF OFFICE AND MISCELLA
SCHEDULE OF OFFICE AND MISCELLANEOUS EXPENSES (Details) - CAD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Advertising, Marketing, and Investor Relations | $ 4,431,818 | $ 5,165,791 |
Compliance fees | 152,826 | 432,874 |
Contract Work | 441,798 | 300,975 |
Other | 371,519 | 556,358 |
Office and Miscellaneous Expenses | $ 5,397,961 | $ 6,455,998 |
SCHEDULE OF KEY COMPENSATION AW
SCHEDULE OF KEY COMPENSATION AWARDS (Details) - CAD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Director fees | $ 522,349 | $ 370,094 |
Salaries | 843,917 | 722,068 |
Share-based payments | 2,106,906 | 2,475,949 |
Total | $ 3,473,172 | $ 3,568,111 |
SCHEDULE OF KEY MANAGEMENT TRAN
SCHEDULE OF KEY MANAGEMENT TRANSACTIONS (Details) - CAD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
IfrsStatementLineItems [Line Items] | ||
Management fees paid to a company | $ 6,821,583 | $ 4,445,949 |
Total | 3,473,172 | 3,568,111 |
C E O And Director [Member] | ||
IfrsStatementLineItems [Line Items] | ||
Management fees paid to a company | 566,487 | 290,225 |
CEO [Member] | ||
IfrsStatementLineItems [Line Items] | ||
Management fees paid to a company | 442,485 | 315,643 |
President And Director [Member] | ||
IfrsStatementLineItems [Line Items] | ||
Management fees paid to a company | 383,288 | 205,691 |
Former Director [Member] | ||
IfrsStatementLineItems [Line Items] | ||
Management fees paid to a company | 394,039 | 500,074 |
Former owner [member] | ||
IfrsStatementLineItems [Line Items] | ||
Salaries | ||
Other related parties [member] | ||
IfrsStatementLineItems [Line Items] | ||
Total | $ 1,392,260 | $ 811,559 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - CAD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
IfrsStatementLineItems [Line Items] | ||
Professional fees expense | $ 6,821,583 | $ 4,445,949 |
Amounts payable, related party transactions | 51,549 | |
Amounts receivable, related party transactions | 155,108 | |
Business service agreement [member] | Business instincts group [member] | ||
IfrsStatementLineItems [Line Items] | ||
Professional fees expense | 442,485 | 315,643 |
Amounts payable, related party transactions | 30,804 | |
Consultant agreement [member] | Alberta ltd [member] | ||
IfrsStatementLineItems [Line Items] | ||
Professional fees expense | 566,487 | 290,225 |
Executive agreement [member] | Scott larson [member] | ||
IfrsStatementLineItems [Line Items] | ||
Professional fees expense | 383,288 | $ 205,191 |
Amounts payable, related party transactions | $ 20,745 |
SCHEDULE OF CONTRACTUAL MATURIT
SCHEDULE OF CONTRACTUAL MATURITIES OF FINANCIAL LIABILITIES (Details) - CAD ($) | Dec. 31, 2022 | Dec. 31, 2021 | Mar. 25, 2021 | Dec. 31, 2020 |
IfrsStatementLineItems [Line Items] | ||||
Derivative liability | $ 4,797,717 | |||
Lease liability | $ 378,643 | $ 489,123 | $ 158,124 | |
Later than one year [member] | ||||
IfrsStatementLineItems [Line Items] | ||||
Trade payables and accrued liabilities | 2,816,676 | |||
Customer deposits | 194,758 | |||
Deferred income | 63,690 | |||
Loans payable | 81,512 | |||
Derivative liability | 57,314 | |||
Lease liability | 133,962 | |||
Contractual maturities of financial liabilities | 3,347,912 | |||
Later than one year and not later than five years [member] | ||||
IfrsStatementLineItems [Line Items] | ||||
Trade payables and accrued liabilities | ||||
Customer deposits | ||||
Deferred income | ||||
Loans payable | 5,059 | |||
Derivative liability | ||||
Lease liability | 244,681 | |||
Contractual maturities of financial liabilities | 249,740 | |||
Later than five years [member] | ||||
IfrsStatementLineItems [Line Items] | ||||
Trade payables and accrued liabilities | ||||
Customer deposits | ||||
Deferred income | ||||
Loans payable | ||||
Derivative liability | ||||
Lease liability | ||||
Contractual maturities of financial liabilities |
SCHEDULE OF CHANGES IN FOREIGN
SCHEDULE OF CHANGES IN FOREIGN EXCHANGE RATES (Details) - CAD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Financial Instruments And Financial Risk Management | ||
Foreign exchange rate | $ 969,977 | $ 150,715 |
SCHEDULE OF FINANCIAL ASSETS ME
SCHEDULE OF FINANCIAL ASSETS MEASURED FAIR VALUE THROUGH PROFIT AND LOSS (Details) - CAD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
IfrsStatementLineItems [Line Items] | ||
Equity securities in investee companies | $ 192,583 | $ 291,066 |
Notes receivable | 169,300 | 1,154,176 |
Derivative liability | 57,314 | 5,560,002 |
Total | 419,197 | 7,005,244 |
Level 1 of fair value hierarchy [member] | ||
IfrsStatementLineItems [Line Items] | ||
Equity securities in investee companies | 57,143 | 164,286 |
Notes receivable | ||
Derivative liability | ||
Total | 57,143 | 164,286 |
Level 2 of fair value hierarchy [member] | ||
IfrsStatementLineItems [Line Items] | ||
Equity securities in investee companies | 135,440 | 126,780 |
Notes receivable | 1,154,176 | |
Derivative liability | ||
Total | 135,440 | 1,280,956 |
Level 3 of fair value hierarchy [member] | ||
IfrsStatementLineItems [Line Items] | ||
Equity securities in investee companies | ||
Notes receivable | 169,300 | |
Derivative liability | 57,314 | 5,560,002 |
Total | $ 226,614 | $ 5,560,002 |
FINANCIAL INSTRUMENTS AND FIN_3
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (Details Narrative) | Dec. 31, 2022 CAD ($) |
Financial Instruments And Financial Risk Management | |
Trade receivable | $ 920,062 |
SCHEDULE OF INCOME TAX (Details
SCHEDULE OF INCOME TAX (Details) - CAD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Loss before income taxes | $ 27,654,364 | $ 16,202,972 |
Canadian statutory rates | 27% | 27% |
Expected income tax recovery | $ 7,338,900 | $ 4,196,600 |
Impact of different foreign statutory tax rates | 34,900 | |
Non-deductible items | (1,214,400) | 116,400 |
Share issue costs | 1,400 | 887,600 |
Adjustments to prior years provision versus statutory tax returns | (742,400) | 376,500 |
Differences between prior year provision and final tax return | 867,500 | (206,000) |
Change in deferred tax asset not recognized | (6,251,000) | (5,406,000) |
Income tax |
SCHEDULE OF DEFERRED TAXES (Det
SCHEDULE OF DEFERRED TAXES (Details) - CAD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Share issuance costs | $ 568,000 | $ 728,000 |
Non-capital losses | 14,602,000 | 7,043,000 |
Property and equipment | 953,000 | 449,000 |
Capital gain reserve | 74,000 | |
Scientific Research and Experimental Development | 367,000 | 291,000 |
Total deferred income tax assets | 16,490,000 | 8,585,000 |
Deferred income tax not recognized | (16,490,000) | (8,585,000) |
Net deferred tax assets |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) | 12 Months Ended |
Dec. 31, 2022 CAD ($) | |
Tax effect of tax losses | $ 48,808,245 |
SUPPLEMENTAL CASH FLOW DISCLO_2
SUPPLEMENTAL CASH FLOW DISCLOSURES (Details Narrative) - CAD ($) | 12 Months Ended | ||
Mar. 10, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
IfrsStatementLineItems [Line Items] | |||
Description for common stock and warrants activity | The warrants have an exercise price of $0.50 each and convert to one common share, and expire on March 17, 2023 | ||
Vital intelligence inc [member] | |||
IfrsStatementLineItems [Line Items] | |||
Number of shares issued | 1,200,000 | ||
Description for common stock and warrants activity | These warrants have an exercise price of $13.35 per warrant, each convert to one common share, and have a life of two years. | ||
Warrant exercise price | $ 13.35 | ||
Common shares [member] | |||
IfrsStatementLineItems [Line Items] | |||
Number of shares issued | 371,901 | ||
Rental Services [Member] | |||
IfrsStatementLineItems [Line Items] | |||
Non - cash transfer of equipment from inventory | $ 508,607 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - Non adjusting event [member] | 1 Months Ended | |
Feb. 17, 2023 CAD ($) $ / shares shares | Feb. 17, 2023 USD ($) shares | |
IfrsStatementLineItems [Line Items] | ||
Shares distributed | shares | 650,729 | 650,729 |
Share price | $ / shares | $ 2.62 | |
Net proceeds from distributed of shares | $ 1,705,013 | |
Equity distribution agreement [member] | ||
IfrsStatementLineItems [Line Items] | ||
Shares distributed | $ 15,000,000 |