SEDAR Interim Financial Statements

[
  {
    "companyName": "Covalon Technologies Ltd.",
    "reportingPeriodEnd": "2025-12-31",
    "reportStatus": "Unaudited",
    "auditorName": null,
    "auditorKeyMatters": [],
    "balanceSheet": {
      "cashAndCashEquivalents": 17878098,
      "accountsReceivable": 2183719,
      "inventories": 6822490,
      "prepaidExpenses": 860061,
      "financeLeaseReceivable": 0,
      "totalCurrentAssets": 27744368,
      "propertyPlantAndEquipment": 1920595,
      "intangibleAssets": 1324165,
      "rightOfUseAssets": 1809994,
      "totalNonCurrentAssets": 5054754,
      "totalAssets": 32799122,
      "accountsPayableAndAccruedLiabilities": 3811606,
      "leaseLiabilitiesCurrent": 530394,
      "deferredRevenue": 530800,
      "totalCurrentLiabilities": 4872800,
      "leaseLiabilitiesNonCurrent": 1534677,
      "totalNonCurrentLiabilities": 1534677,
      "totalLiabilities": 6407477,
      "shareCapital": 52105143,
      "contributedSurplus": 8350948,
      "foreignExchangeTranslationReserve": 3591291,
      "accumulatedDeficit": -37655737,
      "totalShareholdersEquity": 26391645,
      "totalLiabilitiesAndShareholdersEquity": 32799122,
      "cashPerShare": 0.6485,
      "workingCapitalPerShare": 0.8294
    },
    "incomeStatement": {
      "revenueProduct": 6888302,
      "revenueDevelopmentAndConsultingServices": 0,
      "revenueLicensingAndRoyaltyFees": 0,
      "totalRevenue": 6888302,
      "costOfSales": 2880071,
      "grossProfit": 4008231,
      "operationsExpense": 689707,
      "researchAndDevelopmentActivities": 289258,
      "salesMarketingAndAgencyFees": 1011929,
      "generalAndAdministrative": 1965093,
      "totalOperatingExpenses": 3955987,
      "financeIncome": -123718,
      "lossOnFinanceLeaseReceivable": 50585,
      "netIncome": 125377,
      "foreignCurrencyTranslationAdjustment": -385459,
      "totalComprehensiveIncomeLoss": -260082,
      "basicEarningsPerShare": 0.00,
      "dilutedEarningsPerShare": 0.00,
      "weightedAverageSharesOutstanding": 27576319
    },
    "cashFlowStatement": {
      "netIncome": 125377,
      "depreciationOfPropertyPlantAndEquipment": 67268,
      "amortizationOfIntangibleAssets": 72914,
      "depreciationRightOfUseAssets": 102335,
      "shareBasedPaymentExpense": 67530,
      "interestExpenseAndAccretion": 31735,
      "lossOnFinanceLeaseReceivable": 50585,
      "cashFlowsFromOperatingActivitiesBeforeWorkingCapital": 517744,
      "changesInAccountsReceivable": 3611955,
      "changesInPrepaidExpenses": -34087,
      "changesInInventories": 498825,
      "changesInAccountsPayableAndAccruedLiabilities": 629727,
      "changesInDeferredRevenue": 527786,
      "totalNetChangesInWorkingCapital": 5234206,
      "totalCashFlowsFromOperatingActivities": 5751950,
      "purchaseOfPropertyPlantAndEquipment": -652547,
      "purchaseOfIntangibleAssets": -66005,
      "totalCashFlowsUsedInInvestingActivities": -718552,
      "dividendsPaid": -4142712,
      "financeLeaseReceivable": 34220,
      "paymentOfLeaseLiabilities": -213729,
      "totalCashFlowsUsedInFinancingActivities": -4322221,
      "effectOfForeignExchangeRateChangesOnCash": -200367,
      "totalCashFlowsDuringPeriod": 510810,
      "cashAndCashEquivalentsBeginningOfPeriod": 17367288,
      "cashAndCashEquivalentsEndOfPeriod": 17878098
    },
    "investmentsAndOtherAssets": [
      {
        "type": "Finance Lease Receivable",
        "description": "Sublease agreements for Seattle facility, considered finance leases. Both tenants vacated by Dec 31, 2025.",
        "ownershipPercentage": null,
        "value": 0,
        "notes": "Recognized loss of $50,585 in Q1 2025. Balance fully recovered/written off."
      },
      {
        "type": "Intangible Assets",
        "description": "Patents, trademarks, computer software, deferred development costs.",
        "ownershipPercentage": null,
        "value": 1324165,
        "notes": "Includes $62,402 in computer software not yet in service/amortizing."
      }
    ],
    "shareStructure": {
      "authorizedShares": "Unlimited",
      "issuedShares": 27618077,
      "classesOfShares": ["Common shares"],
      "warrants": [
        {
          "number": 200000,
          "exercisePrice": 4.00,
          "expiryDate": "2026-06-30"
        }
      ],
      "options": [
        {
          "number": 345000,
          "exercisePrice": 2.19,
          "expiryDate": "2027-03-28"
        },
        {
          "number": 110000,
          "exercisePrice": 2.50,
          "expiryDate": "2027-09-06"
        },
        {
          "number": 800000,
          "exercisePrice": 1.50,
          "expiryDate": "2029-01-10"
        },
        {
          "number": 150000,
          "exercisePrice": 2.50,
          "expiryDate": "2030-05-30"
        }
      ],
      "rightsConvertibleInstruments": "Deferred Share Units (DSUs) - 80,000 outstanding, convertible upon cessation of relationship."
    },
    "managementCompensation": {
      "currency": "CAD",
      "periods": {
        "2025": {
          "compensationAndShortTermEmployeeBenefits": 466383,
          "shareBasedPaymentExpense": 67530,
          "total": 533913
        },
        "2024": {
          "compensationAndShortTermEmployeeBenefits": 494772,
          "shareBasedPaymentExpense": 73343,
          "total": 568115
        }
      },
      "namedIndividuals": [],
      "otherRelatedPartyTransactions": [
        {
          "counterparty": "Former senior management",
          "description": "Termination benefits provision. Former executive filed wrongful dismissal claim for additional $1,832,031 not accrued.",
          "amount": 667969,
          "period": "Ongoing"
        },
        {
          "counterparty": "Key employee",
          "description": "Non-interest-bearing loan",
          "amount": 10000,
          "period": "Outstanding since 2013"
        }
      ]
    },
    "subsequentEvents": [
      {
        "eventDate": "2026-02-24",
        "description": "Financial statements authorized for issue by the Board of Directors.",
        "impactValue": null
      }
    ]
  }
]