Exhibit 4.5

VERSES AI INC.

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED JUNE 30, 2024 and 2023

(Expressed in United States dollars)

VERSES AI INC.

Condensed Consolidated Interim Statements of Financial Position

(Expressed in United States dollars)

Approved and authorized for issue on behalf of the Board on August 14, 2024.

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

VERSES AI INC.

Condensed Consolidated Interim Statements of Comprehensive Loss

For the three months ended June 30, 2024 and 2023

(Expressed in United States dollars)

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

VERSES AI INC.

Condensed Consolidated Interim Statements of Changes in Shareholders’ Deficiency

For the three months ended June 30, 2024 and 2023

(Expressed in United States dollars)

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

VERSES AI INC.

Condensed Consolidated Interim Statements of Cash Flows

For the three months ended June 30, 2024 and 2023

(Expressed in United States dollars)

Supplemental cash flow information (Note 18).

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

VERSES AI INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended June 30, 2024 and 2023

(Expressed in United States dollars)

Chromos Capital Corp. was incorporated under the Business Corporations Act (British Columbia) on November 19, 2020. On June 17, 2021, Chromos Capital Corp. changed its name to Verses Technologies Inc. On March 31, 2023, Verses Technologies Inc. changed its name to Verses AI Inc. (“VAI”, “VERSES” or the “Company”).

VERSES is a cognitive computing company specializing in biologically inspired distributed intelligence. Their flagship offering, Genius^TM, is patterned after natural systems and neuroscience. Key features of Genius^TM include generalizability, predictive queries, real-time adaptation, and an automated computing network. Built on

open standards, Genius^TM transforms disparate data into knowledge models that foster trustworthy collaboration between humans, machines, and artificial intelligence, across digital and physical domains.

On June 28, 2022, the Class A Subordinate Voting Shares of the Company (the “Subordinate Voting Shares”) were listed and started trading on the Cboe Canada Exchange (“Cboe Canada”) (“Listing”) under the symbol “VERS”.

On October 4, 2022, the Company announced that the Company’s Subordinate Voting Shares have commenced trading on the OTCQX® Best Market, an over-the-counter public market in the United States, under the ticker symbol “VRSSF”. VERSES will continue to trade on Cboe Canada in Canada, as its primary listing.

The Company’s head office and registered and records office is located at 205 - 810 Quayside Drive, New Westminster, British Columbia, V3M 6B9, Canada.

For the three months ended June 30, 2024, the Company incurred a net loss of $10,399,595 (June 30, 2023 - $8,138,503) which was funded by the issuance of convertible debenture, special warrants, and exercises of options and warrants. As of June 30, 2024, the Company has an accumulated deficit of $91,483,122 (March 31, 2024 - $81,083,527). The Company’s ability to continue its operations and to realize its assets at their carrying values is dependent upon obtaining additional financing and generating revenues sufficient to cover its operating costs.

The necessity that the Company raise sufficient funds to carry out its growth plans are conditional, in part, on the continuation of its agreements and investor support. The material uncertainty raised by these events and conditions may cast substantial doubt about the Company’s ability to continue as a going concern. These condensed consolidated interim financial statements do not give effect to any adjustments, which would be necessary should the Company be unable to continue as a going concern. In such circumstances, the Company would be required to realize its assets and discharge its liabilities outside of the normal course of business, and the amounts realized could differ materially from those reflected in the accompanying condensed consolidated interim financial statements.

The condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard (“IAS”) 34 “Interim Financial Reporting”. They do not include all of the information required for full annual financial statements and should be read in conjunction with the Company’s audited annual consolidated financial statements for the fiscal year ended March 31, 2024, which have been prepared in accordance with International Financial Reporting Standards (“IFRS”).

The condensed consolidated interim financial statements were authorized for issue in accordance with a resolution from the Board of Directors on August 14, 2024.

VERSES AI INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended June 30, 2024 and 2023

(Expressed in United States dollars)

These condensed consolidated interim financial statements have been prepared on the historical cost basis, using the accrual basis of accounting, except for cash flow information and certain financial instruments, which are measured at fair value. The preparation of financial data is based on accounting principles and practices consistent with those used in the preparation of the audited annual consolidated financial statements as of March 31, 2024. The condensed consolidated interim financial statements should be read in conjunction with the Company’s audited annual consolidated financial statements for the year ended March 31, 2024.

These condensed consolidated interim financial statements include the accounts of the Company and its wholly owned subsidiaries. The results of the subsidiaries will continue to be included in the condensed consolidated interim financial statements of the Company until the date that the Company’s control over the subsidiaries ceases. Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

Details of the Company’s principal subsidiaries at June 30, 2024 and March 31, 2024 are as follows:

The preparation of these condensed consolidated interim financial statements requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed consolidated interim financial statements and reported amounts of expenses during the reporting period. These condensed consolidated interim financial statements include estimates that, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the condensed consolidated interim financial statements and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and future periods if the revision affects both current and future periods. These estimates are based on historical experience, current and future economic conditions and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Actual outcomes could differ from these estimates.

The significant judgements made by management in the Company’s accounting policies and key sources of estimation uncertainty were the same as those applied in the annual audited consolidated financial statements for the year ended March 31, 2024.

VERSES AI INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended June 30, 2024 and 2023

(Expressed in United States dollars)

The Company recognized revenues from contracts with customers in accordance with the following timing under IFRS 15 Revenue from Contracts with Customers.

(1) Includes revenues from completed Proof of Concept contracts (“POCs”).

(2) Includes revenue from Software as a Service (“SaaS”).

Contracts with an expected duration of greater than a year contain performance obligations which are not yet satisfied in an amount of $4,147,924 as of March 31, 2024 (2023 - $4,147,924).

On August 14, 2024, the Company announced the existing SaaS contract with its customer is being voided by both parties (Note 21). As a result, the Company has not recognized any revenues related to SaaS services in the current quarter, and has recorded a provision for the contract settlement for $1,252,076 (Note 4).

The Company’s contract assets and unbilled revenues are summarized as follows:

The Company’s accounts payable and accrued liabilities are summarized as follows:

VERSES AI INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended June 30, 2024 and 2023

(Expressed in United States dollars)

Loan activity consisted of the following:

On June 5, 2020, the Company received a $142,400 loan from the U.S. Small Business Administration. The loan is secured by all tangible and intangible personal property of VTU, and bears interest of 3.75% per annum and requires monthly payments of $646 starting in June 2021 with a maturity of 30 years. As of June 30, 2024 $140,285 (March 31, 2024 - $140,904) remains outstanding.

The Company has an Omnibus Equity Incentive Plan (the “Plan”) available to employees, directors, officers, and consultants with grants under the Plan approved from time to time by the Board of Directors. Under the Plan, the Company is authorized to issue options to purchase an aggregate of up to 25% of the Company’s issued and outstanding Subordinate Voting Shares. Each option can be exercised to acquire one Subordinate Voting Share of the Company. The exercise price for an option granted under the Plan may not be less than the market price at the date of grant.

Options to purchase Subordinate Voting Shares have been granted to directors, employees, and consultants as follows:

VERSES AI INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended June 30, 2024 and 2023

(Expressed in United States dollars)

A summary of the Company’s stock options as at June 30, 2024 and changes for the periods then ended is as follows:

During the period ended June 30, 2024, 1,000,000 stock options were exercised at an exercise price of CAD$0.80 for the net proceeds of $584,400. The original fair value of these stock options of $513,376 was reclassified from contributed surplus to share capital upon exercise.

On April 15, 2024, the Company granted 115,000 stock options to employees and independent contractors of the Company with an weighted average exercise price of CAD$1.23, expiring in 5 years, with 25% vesting on the date that is one (1) year from the vesting start date and 6.25% every subsequent quarter. The stock options were fair valued at $72,423 of which $19,457 is recognized in the current period using the Black-Scholes option pricing model with the following assumptions:

VERSES AI INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended June 30, 2024 and 2023

(Expressed in United States dollars)

On April 15, 2024, the Company granted 200,555 stock options to strategic consultants of the Company with an exercise price of CAD$1.14, expiring in 5 years, where 50,185 stock options vested on the grant date, 15,000 stock options will vest on May 1, 2024, and 15,000 stock options will vest at the beginning of every calendar month thereafter; the balance of 370 stock options will vest 33.33% every 6 months after the grant date. The stock options were fair valued at $104,650 of which $54,839 is recognized in the current period using the Black-Scholes option pricing model with the following assumptions:

On April 28, 2023, the Company granted 100,000 stock options to a strategic consultant of the Company with an exercise price of CAD$1.65, expiring in 5 years, where 50,000 stock options vest 6 months after the grant date and 50,000 vests 12 months after the grant date. The stock options were fair valued at $91,807 using the Black-Scholes option pricing model with the following assumptions:

For the period ended June 30, 2024, the Company derecognized $23,329 as share-based payment for stock options granted in April 2023 for strategic consultants of the Company. The fair value of stock options is estimated using the Black-Scholes option pricing model with the following weighted average assumptions:

VERSES AI INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended June 30, 2024 and 2023

(Expressed in United States dollars)

Included in the Plan, the Company may grant RSUs to employees, directors, officers, and consultants. The RSUs can be settled at the election of the holder for Subordinate Voting Shares, cash, or a combination of Subordinate Voting Shares and cash.

On April 15, 2024, the Company granted 50,000 RSUs to a strategic consultant of the Company, with no exercise price or expiry date, vesting 100% on the grant date. The RSUs were determined to be a liability instrument and were fair valued on day of grant at $36,895 based on the market price of one Subordinate Voting Share on the date of issuance.

On June 20, 2024, the Company granted 1,000,000 RSUs to a strategic investor of the Company, with no exercise price or expiry date, vesting equal installments of 10,000 RSU’s for every CAD$100,000 in revenue derived by the Company from commercial agreements it enters into with affiliates of the strategic investor. No value was attributed to these RSUs as the vesting is still uncertain.

On November 15, 2023, the Company granted 150,000 RSUs to a strategic consultant of the Company, with no exercise price, with expiry date of 10 years from the grant date, vesting 1/3 on the grant date, 1/3 on December 28, 2023, and 1/3 on March 28, 2024.

For the period ended June 30, 2024, the Company revalued the RSUs granted on November 15, 2023. The RSUs were fair valued at $110,686 (March 31, 2024 - $142,449) based on the market price of one Subordinate Voting Share on the revaluation date. The Company derecognized $47,336 as share-based payment for RSUs in the current period.

During the year ended March 31, 2023, 500,000 RSUs were granted to a director, with no exercise price or expiry date, vesting 1/3 on the first anniversary of the Listing and 1/3 each subsequent anniversary thereafter (Note 8). The RSUs were determined to be a liability instrument and were fair valued on day of grant at $309,400 based on the market price of one Subordinate Voting Share on the date of issuance. At June 30, 2024, the RSUs were valued at a fair value of $328,661 (March 31, 2024 - $433,765) based on the market price of one Subordinate Voting Share on revaluation date and the Company derecognized $105,104 as share-based payment for RSUs in the current period. The fair value will be recognized as an expense using the graded vesting method over the vesting period.

VERSES AI INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended June 30, 2024 and 2023

(Expressed in United States dollars)

A reconciliation of share based payments is as follows:

The Company’s related parties consist of the directors, executive officers, and companies controlled by them. Transactions are measured at the exchange amount, which is the amount agreed to by the parties.

Key management personnel include those persons having authority and responsibility for planning, directing, and controlling the activities of the Company as a whole. The Company has determined that key management personnel consist of executive and non-executive members of the Company’s Board of Directors and senior officers.

During the three months ended June 30, 2024 and 2023, related party transactions were as follows:

Included in accounts payable and accrued liabilities at June 30, 2024 were amounts totaling $46,006 (March 31, 2024 – $21,073) due to the a director of the Company, for services provided as Chairman Emeritus and International Director of Global Partnerships.

Included in due from related parties at June 30, 2024 were amounts totaling $2,033,444 (March 31, 2024 - $1,872,334) due from companies controlled by key management personnel, and a loan granted to one member of the management of the Company. These amounts are unsecured, interest-free, and settlement generally occurs in cash.

Also, included in the amounts due from related parties, is a loan of $65,720 (March 31, 2024 - $64,936) to a key member of the management team that is unsecured and has an annual interest rate of 5% and requires principal and interest to be paid in full by May 1, 2033. No repayments were made in the period ended June 30, 2024.

VERSES AI INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended June 30, 2024 and 2023

(Expressed in United States dollars)

On December 15, 2023, the Company granted 489,506 stock options to the Chief Financial Officer (439,506) and the Chief Operating Officer (50,000) of the Company with an exercise price of CAD$1.35, expiring in 5 years, where 439,506 stock options are vested on the grant date, based on previous commitments, and 6.25% every subsequent quarter. The stock options were fair valued at $374,011 of which $2,363 (June 30, 2023 - $nil) is recognized in the current period using the Black-Scholes option pricing model (Note 7).

At June 30, 2024, the RSUs granted to a director were valued at a fair value of $328,661 (June 30, 2023 - $198,703) based on the market price of one Subordinate Voting Share on revaluation date.

At June 30, 2024, the stock options granted in prior periods to the directors recognized as an expense in the current period using the graded vesting method over the vesting period is $Nil (June 30, 2023 - $116,782).

The Company has an obligation to pay royalties to Cyberlab, LLC (“Cyberlab”) (a company controlled by a director and officer). Cyberlab shall be entitled to receive a share of the gross revenue derived from the sales, licensing, and other commercial activities involving Spatial Domain Names, pursuant to the following schedule:

As of June 30, 2024, no amounts are payable under the royalties agreement.

The Company is obligated to grant stock options (“Options”), deferred share units (“DSU”), or restricted stock units (“RSU”) to qualifying consultants and employees based on their respective contracts, to be determined at grant date based on the market price of the Company’s shares. As at June 30, 2024 the outstanding commitment balance is 8,580,300 (March 31, 2024 – 8,965,855) to be granted as options, RSUs or DSUs.

The Company has also entered into severance agreements with executives of the Company. In the case of involuntary termination or a change in control, the executives are entitled to a monetary payment equal to 12 month’s worth of base salary, continuation for 12 months of medical and dental insurance, and immediate, accelerated vesting of all stock options, equity, and related compensation.

VERSES AI INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended June 30, 2024 and 2023

(Expressed in United States dollars)

Effective July 20, 2021, the Company amended its Articles to create an unlimited number of Class A Subordinate Voting Shares and unlimited number of Class B Proportionate Voting Shares. Each Subordinate Voting Share shall entitle the holder thereof to one vote. Each Class B share shall entitle the holder thereof to 6.25 votes and such proportionate dividends and liquidation rights. Each Class B share is convertible, at the option of the holder, into 6.25 Subordinate Voting Shares.

On May 30, 2024, 10,000,000 Class B Proportionate Voting Shares were converted into 62,500,000 Subordinate Voting Shares

During the period ended June 30, 2024, the following equity instruments were exercised for gross proceeds of $1,171,988:

On April 9, 2024, 50,000 shares were issued to a strategic consultant of the Company. The shares were fair valued at $49,714 considering the share price of CAD$1.35 stated in the consulting agreement.

On April 18, 2024, the Company announced a non-brokered private placement of special warrants (“Special Warrants”) for gross proceeds of up to CAD$10,000,000 through the sale of 10,000,000 Special Warrants at a price of CAD$1.00 per Special Warrant (the “Private Placement”).

Each Special Warrant shall convert into one Unit of the Company (a “Unit”) at no additional cost upon the earlier of: (i) the Company obtaining a receipt from the applicable securities commission(s) in Canada for the final prospectus qualifying the distribution of the Units to be issued upon exercise or deemed exercise of the Special Warrants; and (ii) the date that is four months and a day after date of issuance of the Special Warrants.

Each Unit is comprised of one Subordinate Voting Share (a “Unit Share”), and one-half of one C Subordinate Voting Share purchase warrant (each full warrant, a “Unit Warrant”). Each Unit Warrant shall be exercisable into one Subordinate Voting Share (a “Unit Warrant Share”) at a price of CAD$1.50 per Unit Warrant Share for a period of two (2) years from the date of issue of the Unit Warrants.

The proceeds received from the Private Placement are to be used for general corporate and working capital purposes, for the continued development of Genius^TM and the release of the Genius beta program, and the repayment of outstanding loans. In particular, US$2,000,000 of the proceeds received will be used to repay the outstanding principal amount of loans accepted by VTU, from two arms’-length investors (Note 15). All securities issued pursuant to the Private Placement will be subject to a four-month hold period from the date of issue.

VERSES AI INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended June 30, 2024 and 2023

(Expressed in United States dollars)

The Company completed the issuance of 10,000,000 Units for gross proceeds of CAD$10,000,000 and paid fees to eligible finders consisting of: (i) CAD$317,286; and (ii) 316,536 finder warrants (the “Finder Warrants”). Each Finders Warrant will be exercisable into one unit (a “Finder Unit”) at a price of CAD$1.00 per Finder Unit until the date that is two (2) years from the date of issue of the Finder Warrants, which Finder Unit will be comprised of a Subordinate Voting Share and one-half of one Subordinate Voting Share purchase warrant (each, whole warrant, a “Finder Unit Warrant”). Each Finder Unit Warrant shall be exercisable into one Subordinate Voting Share (a “Finder Unit Warrant Share”) at a price of CAD$1.50 per Finder Unit Warrant Share for a period of two (2) years from the date of issue of the Finder Unit Warrants.

The total fair value of the broker warrants was $181,394, estimated using the Black-Scholes option pricing model with the following weighted average assumptions:

In connection with the issuance of convertible debenture (Note 12) the Company issued 6,890,000 warrants. Because the unit price of the convertible debenture (CAD$1.00) is lower than the price of the units on announcement date (CAD$1.02), there is no value to be allocated to the warrants according to the residual value method.

Warrants outstanding as at June 30, 2024 are summarized below:

VERSES AI INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended June 30, 2024 and 2023

(Expressed in United States dollars)

As of June 30, 2024, the Company’s outstanding share purchase warrants expire as follows:

On June 20, 2024 the Company entered into a funding agreement with Group 42 Holding Ltd (“G42”), a leading UAE-based AI technology group (the “Strategic Investment”).

Pursuant to the Strategic Investment, G42 has invested $10,000,000 via a private placement of unsecured convertible debenture units of VERSES (the “Units”). Each Unit will consist of: (i) CAD$1,000 in principal amount of unsecured convertible debenture (“Convertible Debenture”); and (ii) 500 detachable share purchase warrants (the “Warrants”) to purchase Subordinate Voting Shares. The Convertible Debenture shall bear interest at a rate of 10% per annum and mature on June 20, 2026 (the “Maturity Date”).

The principal amount of the Convertible Debenture (the “Principal Amount”), together with all accrued interest (collectively, the “Convertible Amount”), shall be convertible, for no additional consideration, on the earliest to occur of: (A) the date on which the Company completes an equity financing, in one or more tranches, for aggregate gross proceeds of at least CAD$15,000,000 at a price per Subordinate Voting Share of not less than CAD$1.00 (an “Equity Financing”), (B) the date on which G42 elects to convert the Convertible Debenture, and (C) the Maturity Date.

VERSES AI INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended June 30, 2024 and 2023

(Expressed in United States dollars)

In the event of a conversion of the Convertible Debenture: (i) on the Maturity Date or at the election of G42, the Convertible Amount shall be converted into such number of Subordinate Voting Shares as is equal to the Convertible Amount divided by CAD$1.20 per Share; and (ii) in connection with an Equity Financing, the Convertible Amount shall be converted into such number of Subordinate Voting Shares as is equal to the Convertible Amount divided by the issue price per Subordinate Voting Share sold pursuant to the Equity Financing, multiplied by 80%, provided that, in no event shall such conversion price be greater than CAD$1.20.

If the conversion occurs prior to the Maturity Date, the Holder shall be entitled to all accrued and outstanding unpaid interest, plus an amount equal to the amount of interest that would have otherwise accrued on the Principal Amount to the Maturity Date but for such prior Conversion.

Each Warrant will be exercisable into one Subordinate Voting Share at a price of CAD$1.50 per share until June 20, 2027 (the “Expiry Date”), subject to acceleration. If at any time prior to the Expiry Date, the volume-weighted average trading price of the Subordinate Voting Shares on Cboe Canada (or such other principal exchange or market where the Subordinate Voting Shares are then listed or quoted for trading) exceeds CAD$5.55, as adjusted in accordance with the terms of the certificate representing the Warrants (the “Warrant Certificates”), for a period of 10 consecutive trading days, Verses may, at its option, accelerate the Expiry Date to the date that is 30 days following the written notice to G42, in the form of a press release or other form of notice permitted by the Warrant Certificates.

In connection with commercial agreements that may be entered into between Verses and affiliates of G42, G42 will also receive 1,000,000 restricted stock units (“RSUs”) of Verses, each vested RSU to be settled through the issuance of one (1) Subordinate Voting Share. The RSUs will vest in installments of 10,000 RSUs for every CAD$100,000 of revenue derived by Verses from such commercial agreements.

A reconciliation of convertible debenture is as follows:

(1) The Company measured the embedded derivative liability using the Monte-Carlo binomial model, with the following assumptions: share price of CAD$1.120 based on the market price of the Company’s shares; risk-free interest rate of 4.63% based on the Canadian bond yield rate; expected volatility of 100% based on comparable publicly listed entities; and an expected life between 0.20 and 2.0 years based on management’s estimate of the probability of the conversion feature being exercised.

(2) IFRS 9 requires entities to calculate the fair value of the embedded derivative first, with the residual value being assigned to the host liability. Subsequently, the derivative liability is measured at FVTPL, while the host debt liability component is measured at amortized cost.

VERSES AI INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended June 30, 2024 and 2023

(Expressed in United States dollars)

Prepaid expenses consisted of the following:

On March 11, 2024, the Company’s wholly owned subsidiary VTU, has accepted an interest free loan in the amount of $2,000,000 from two arms-length investors for $1,000,000 each. The loan matures on the earlier of (i) March 10, 2025; and (ii) the date the Company completes a bona fide transaction or series of transactions with the principal purpose of raising capital, pursuant to which the Company issues and sells its securities to one or more bona fide third parties. On the maturity date, the Company may elect to repay loan by way of cash, or through the issuance of Subordinate Voting Shares in the capital of the Company at a per share price equal to the price of the securities issued in the Equity Financing, subject to the approval of CBOE Canada Inc.

On April 18, 2024, the promissory notes were settled through the issuance of Special Warrants (Note 11).

VERSES AI INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended June 30, 2024 and 2023

(Expressed in United States dollars)

As of June 30, 2024, the Company’s financial instruments consist of cash, accounts receivable, due from related parties, accounts payable and accrued liabilities, restricted share unit liability, provision for legal claim, and loans payable.

IFRS 13 Fair Value Measurement establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. IFRS 13 prioritizes the inputs into three levels that may be used to measure fair value:

The Company uses judgment to select the methods used to make certain assumptions and in performing the fair value calculations in order to determine (a) the values attributed to each component of a transaction at the time of their issuance; (b) the fair value measurements for certain instruments that require subsequent measurement at fair value on a recurring basis; and (c) for disclosing the fair value of financial instruments subsequently carried at amortized cost. These valuation estimates could be significantly different because of the use of judgment and the inherent uncertainty in estimating the fair value of these instruments that are not quoted in an active market.

The fair value of cash, accounts receivable, due from related parties, accounts payable, promissory notes, provision for legal claim, and loans payable are measured using Level 1 inputs, the fair value of restricted share unit liability and convertible debentures are measured using Level 2 and Level 3 inputs.

The carrying value of the Company’s other financial instruments approximate their fair values due to their short-term maturities.

There were no transfers between the levels of the fair value hierarchy during the period.