UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549


 
FORM 10-K
 


 
x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 20112012.
 
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ______ TO ______.
 
 
Commission File No. 333-141875
 
IGEN Networks Corp.
(Exact name of registrant as specified in its charter)

Nevada20-5879021
(State or Other Jurisdiction of 
incorporation or organization)
(I.R.S. Employer
Identification No.)

1100 H
119 North Henry Street, NW, Suite 920, Washington, DC, 20005Alexandria, Virginia, 22314
(Address of principal executive offices) (Zip Code)

1-888-244-3650
(Registrant's telephone number including area code)
 
Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act:  

Common Stock
Title of Class
 
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.Yes Act.Yes o No x
 
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.Yes Act.Yes o No x
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:  Yes x No o
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes ox No xo
 
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x
 
Indicate by check mark whether the registrant is large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
 Large accelerated filer: o
 Accelerated filer: o
 Non-accelerated filer: o
 Smaller reporting company: x
(Do not check if a smaller reporting company) 
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes Yeso No xNo o
 
The aggregate market value of the Common Stock of IGEN Networks Corp. held by non-affiliates as of March 19, 2012April 5, 2013 was $5,057,692$2,247,372 based on the closing price of the common stock of $0.36.$0.15.
 
The number of shares of the registrant's common stock outstanding as of December 31, 20112012 is 14,049,045.14,982,478.
 
 
 

 
TABLE OF CONTENTS
 
PART I Page
   
ITEM 1.3
ITEM 1A.4
ITEM 1B.4
ITEM 2.4
ITEM 3.4
ITEM 4.4
   
PART II  
   
ITEM 5.5
ITEM 6.9
ITEM 7.9
ITEM 7A.11
ITEM 8.12
ITEM 9.14
ITEM 9A.14
ITEM 9B.14
   
PART III  
   
ITEM 10.15
ITEM 11.17
ITEM 12.18
ITEM 13.20
ITEM 14.20
   
PART IV  
   
ITEM 15.22
   
 23
 
 
 

 
 
Part I

Item 1.  Business

Description of Business
 
IGEN Networks Corp. (“IGEN”,  the “Company”, “we”, “our”) was incorporated in the State of Nevada on November 14, 2006 under the name of Nurse Solutions Inc.  On September 19, 2008 the Company changed its name to Sync2 Entertainment Corporation and traded under the symbol SYTO.  On May 26, 2009, the Company changed its name to IGEN Networks Corp., the Company’s common stock was assigned 45172B 10 2 as its new Cusip number, and the Company’s trading symbol was changed to IGEN effective June 30, 2009.  On November 4, 2011, IGEN Business Solutions Inc., a wholly owned Canadian subsidiary of IGEN Networks Corp., was incorporated.

Through August 2011, IGEN was in the business of providing high-speed Internet, Phone and Data services to rural communities via licensed third party technology.  As of September 2011, in concert with securing new management and investment, the company adopted a newexpanded its business model to invest and actively manage the growth of investing in and managing for growth private high-techprivately held technology companies that offer products and services  to global marketsspecialized in the domains of wireless broadband solutions, Software as a Service (Saas), and Machine to Machine (M2M) solutions.   A secondary part of IGEN’srevenue models serving small business, is negotiating distribution agreements with relevant organizationsgovernment agencies and selling their products and services through the distribution channels of our portfolio companies, or newly developed IGEN sales channels.commercial enterprise.   

The Company has offices in the United States and Canada.  The U.S. head office is located at 1100 H119 North Henry Street, NW, Suite 920, Washington DC, USA, 20005.Alexandria, Virginia 22314.  The Canadian office is located at Suite 102, 3833 Henning Drive, Burnaby BC, Canada, V5C 6N5.  The Company’s phone number is 1-888-244-3650.

The Company itself currently owns no patents,patents.  The Company is in the process of securing trademarks orand distribution licenses and performsthrough increased ownership of privately held technology companies.
During the fiscal year ending December 31, 2011, the company did no research and development.  During the fiscal year ending December 31, 2011, the company spent approximately $54,725 on research and development, 96% of which was borne by customers.

The Company is not aware of any government approval or regulations, other than those governing the normal course of business, which will affect its own business.  However, the Company is invested in and foresees future investment in, or possible joint ventures with, companies for which local, regional or national regulatory approvals, particularly those pertaining to wireless networks, may apply .apply.

The Company is not aware of any significant costs or effects of compliance with environmental laws.

The Company currently has twofour full-time employees.employees and one part-time employee.  All management activities are currently undertaken by Directors of the Company and the Company also relies on subcontractors for a number of professional services.
 
 
3

 
Item 1A. Risk Factors
 
For a discussion of risk factors affecting the Company please refer to the Cautionary Note Regarding Forward-looking Statements included in Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations.
 
Item 1B.  Unresolved Staff Comments
 
As a smaller reporting company, the Company is not required to provide the information required by this item.

Item 2.  Properties
 
The Company owns no plants, mines and other materially important physical properties.  The Company’s office locations are specified in Item 1 of this document.

Item 3.  Legal Proceedings
 
The Company is not party to any legal proceedings.

Item 4.  Mine Safety Disclosures
 
The Company is not an operator, nor has a subsidiary that is an operator, of a coal or other mine.

 
 
4

 
Part II

Item 5.  Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market Information

Principal Market
 
IGEN’sThe Company’s common shares currently trade on the OTC market in the United States and are quoted on the Over the Counter Bulletin Board (OTCBB) exchange sponsored by the National Association of Securities Dealers (NASDAQ)OTCQB under the symbol IGEN.

High and Low Sales Prices

Quarter Ended High  Low  High Low 
2010      
March 31, 2010 $1.01  $0.06 
June 31, 2010 $1.05  $0.40 
September 31, 2010 $0.95  $0.40 
December 31, 2010 $1.08  $0.48 
        
2011             
March 31, 2011 $0.67  $0.31  $0.67 $0.31 
June 31, 2011 $0.65  $0.24  $0.65 $0.24 
September 31, 2011 $0.50  $0.20  $0.50 $0.20 
December 31, 2011 $0.39  $0.25  $0.39 $0.25 
     
2012     
March 31, 2012 $0.36 $0.20 
June 31, 2012 $0.35 $0.24 
September 31, 2012 $0.23 $0.23 
December 31, 2012 $0.23 $0.16 

Holders
 
As of December 31, 2011,2012, there were 6558 registered shareholders of common shares and an unknown number of holders whose stock is held in “street name”.

Dividends
 
The Company has paid no cash dividends in the past and as of yet has had no retained earnings from which to do so.

 
5


 
Securities authorized for issuance under equity compensation plans
 
The following table details theAs of December 31, 2012 there were no securities authorized for issuance under equity compensation plans as of December 31, 2011:

Equity Compensation Plan Information

Plan Category Number of securities to be issued upon exercise of outstanding options, warrants, and rights  Weighted average exercise price of outstanding options, warrants, and rights  Number of securities remaining available for future issuance under equity compensation plan s (excluding securities reflected in column (a)) 
  (a)  (b)  (c) 
Equity compensation plans approved by security holders  0   0   0 
Equity compensation plans not approved by security holders  1,591,665  $0.47   0 
Total  1,591,665  $0.47   0 

The equity compensation not approved by security holders includes:
-  1,591,665 warrants of the Company granted in 2011 as part of received subscriptions for common shares
plans.

Performance Graph
 
As a smaller reporting company, the Company is not required to provide the information required by this item.

Recent sales of unregistered securities

2009
 
During the twelve months ending December 31, 2009 there were no issuances or sales of our securities with or without registration.

2010
 
During the twelve months ended December 31, 2010, the company issued the following shares under the Securities Act of 1933 exemption Rule 144:

On February 15, 2010, the Company issued 550,000 restricted common shares to two related parties for services as directors and officers of the Company, at fair value of $0.06 per share and a recorded value of$33,000.

On February 15, 2010, the Company issued 1,650,000 restricted common shares to three independent parties pursuant to agreements for consulting services, at fair value of $0.06 per share and a recorded value of $99,000.
 
6

On February 15, 2010, the Company issued 3,250,000 common shares to six non-affiliated parties for conversion of $195,000 debt which was incurred by the Company in March 2009, recorded at fair value of$0.06 per share.

On March 30, 2010, the Company issued 3,000,000 restricted common shares to Bio Business Development Corp. International Inc. pertaining to the memorandum of understanding regarding the acquisition of rights to intellectual property. The shares are recorded at $3,000 par value with an offsetting amount in additional paid-in capital. Pursuant to the MOU, the shares will be held in trust by the Company,and will be released or cancelled, subject to the negotiation of terms and conditions in a mutually beneficial license agreement.

On April 13, 2010, the Company issued 2,000,000 restricted common shares to Machlink Inc. pertaining to memorandum of understanding and to be held in trust subject to the signing of a License Agreement with Machlink for the technology license rights. On May 7, 2010, the Company signed an exclusive distribution License Agreement with Machlink Inc. for rights to its existing patent pending and proprietary technology in wireless broadband Internet technology, pursuant to the initial memorandum of understanding the parties entered into on April 13, 2010. In consideration, the Company acknowledged the two million restricted shares issued on April 13, 2010 pertaining to the memorandum of understanding, which will be held in trust and released in six months from the signing of the May 7, 2010 License Agreement. During the six month hold period, IGEN has the option to pay $1 per share in lieu of release of the shares. The shares were recorded at fair value of $0.65 per share for a recorded value of $1,300,000.

6

On May 10, 2010, the Company issued 350,000 shares on receipt of $210,000 for subscription to 350,000 common shares at a price of $0.60 per share.

On May 25, 2010, the Company cancelled and returned to treasury, the 3,000,000 restricted common shares originally issued to Bio Business Development Corp. International Inc. and held in-trust, pertaining to the memorandum of understanding regarding the acquisition of rights to intellectual property. The parties did not negotiate a mutually beneficial license agreement and the MOU was terminated. The $3,000 par value recording and offsetting amount in additional paid-in capital was reversed.

On May 27, 2010, the Company issued 750,000 restricted common shares to two related parties for services as directors and officers of the Company, at fair value of $0.77 per share and a recorded value of $577,500 held in-trust, pertaining to the memorandum of understanding regarding the acquisition of rights to intellectual property. The parties did not negotiate a mutually beneficial license agreement and the MOU was terminated.  The $3,000 par value recording and offsetting amount in additional paid-in capital was reversed.

On May 27, 2010, the Company issued 750,000 restricted common shares to two related parties for services as directors and officers of the Company, at fair value of $0.77 per share and a recorded value of $577,500.

On May 27, 2010, the Company issued 350,000 restricted common shares to three independent parties in consideration for their appointments to the advisory board of the Company, at fair value of $0.77 per share and a recorded value of $269,500.
 
7

On May 27, 2010, the Company issued 650,000 restricted common shares to two independent consultants pursuant to consulting agreements entered into, at fair value of $0.77 per share and a recorded value of $500,500.

On July 5, 2010, the Company issued 200,000 restricted common shares to an independent consultant pursuant to a consulting agreement entered into, at fair value of $0.50 per share and a recorded value of $100,000.
 
On July 8, 2010, the Company issued 500,000 restricted common shares to related parties for services as a director and officer of the Company, at fair value of $0.50 per share and a recorded value of $250,000.

On September 17, 2010 the Company received of $150,000 for subscription to 300,000 common shares at a price of $0.50 per share.

On November 22, 2010 the Company issued 30,927 restricted common shares to an independent consultant for services, at fair value of $0.97 per share and a recorded value of $30,000.

7

2011
 
During the twelve months ended December 31, 2011, the company issued the following shares under the Securities Act of 1933 exemption Rule 144:

On May 16, 2011 the company issued a total of 650,000 restricted common shares at a fair value of $0.60 per share to thirteen non-related parties for services specific to acting in the capacity of IGEN advisory board members.

On September 8, 2011, the company issued a total of 91,667 restricted common shares for which the company received a total of $55,000 in subscriptions for shares at a price of $0.60 per share

On September 12, 2011, the company issued a total of 1,499,999 restricted common shares for which the company received a total of $450,000 in subscriptions for shares at a price of $0.30 per share.

On December  5, 2011, the company issued a total of  1,271,052 restricted common shares at a fair value of $0.30 per share and a total recorded value of $381,315.60, to six related parties to retire shareholder loans.

On December  7, 2011, the company issued 100,000 restricted common shares at a fair value of $0.30 per share and a total recorded value of $30,000 to a related party for services rendered to the company.

On December 31, 2011 the Machlink Inc agreement was modified resulting in the issuance to Machlink of 1,000,000 shares of common stock of the Company and fairly valued at $250,000 in return for the 2,000,000 shares originally issued to Machlink being delivered to the Company for cancellation.
2012
During the twelve months ended December 31, 2012, the company issued the following shares under the Securities Act of 1933 exemption Rule 144:

On June 28, 2012 the company issued 50,000 restricted common shares at a fair value of $0.32 per share and a total recorded value of $16,000 to a related party for services rendered to the company.

On June 29, 2012 the company issued a total of 550,000 restricted common shares for which the company received a total of $192,500 in subscriptions for shares at a price of $0.35 per share as part of the exercising of warrants.

On August 17, 2012 the company issued a total of 333,000 restricted common shares for which the company received a total of $116,667 in subscriptions for shares at a price of $0.35 per share as part of the exercising of warrants.

 
8

 
Item 6.  Selected Financial Data
 
As a smaller reporting company, the Company is not required to provide the information required by this item.

Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations
(“MD&A”) provides information for the year ended December 31, 2011.2012.  This MD&A should be read together with our audited consolidated financial statements and the accompanying notes for the year ended December 31, 20112012 (the “consolidated financial statements”). The consolidated financial statements have been prepared in accordance with generally accepted accounting
principles in the United States (“U.S. GAAP”). Except where otherwise specifically indicated, all amounts in this MD&A are expressed in United States dollars.

Certain statements in this MD&A constitute forward-looking statements or forward-looking information within the meaning of applicable securities laws. You should carefully read the cautionary note in this MD&A regarding forward-looking statements and should not place undue reliance on any such forward-looking statements. See “Cautionary Note Regarding Forward-Looking Statements”.

Additional information about the Company, including our most recent consolidated financial statements and our Annual Information Form, is available on our website at www.sierrawireless.com,www.igen-networks.com, or on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.

Cautionary Note Regarding Forward-looking Statements
 
Certain statements and information in this MD&A are not based on historical facts and constitute forward- looking statements or forward-looking information within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and Canadian securities laws (“forward-looking statements”), including our business outlook for the short and longer term and our strategy, plans and future operating performance. Forward-looking statements are provided to help you understand our views of our short and longer term prospects. We caution you that forward-looking statements may not be appropriate for other purposes. We will not update or revise our forward-looking statements unless we are required to do so by securities laws. Forward-looking statements:

 • Typically include words and phrases about the future such as “outlook”, “may”, “estimates”, “intends”, “believes”, “plans”, “anticipates” and “expects”;

 • Are not promises or guarantees of future performance. They represent our current views and may change significantly;

 • Are based on a number of assumptions, including those listed below, which could prove to be significantly incorrect:

-  Our ability to find viable companies in which to invest
-  Our ability successfully manage companies in which we invest
-  Our ability to successfully raise capital
-  Our ability to successfully expand and leverage the distribution channels of our portfolio companies;
-  Our ability to develop new distribution partnerships and channels
-  Expected tax rates and foreign exchange rates.
 
 
9

 
 • Are subject to substantial known and unknown material risks and uncertainties. Many factors could cause our actual results, achievements and developments in our business to differ significantly from those expressed or implied by our forward-looking statements.    Actual revenues and growth projections of the Company or companies in which we are invested may be lower than we expect for any reason, including, without limitation:

-  the continuing uncertain economic conditions
-  price and product competition
-  changing product mixes,
-  the loss of any significant customers,
-  competition from new or established companies,
-  higher than expected product, service, or operating costs,
-  inability to leverage intellectual property rights,
-  delayed product or service introductions

Investors are cautioned not to place undue reliance on these forward-looking statements. No forward-looking statement is a guarantee of future results.

Overview
 
In 2011, primarily over the second half of the year,2012 the Company focusedcontinued to focus its efforts on redefining it’sexecuting to its new business model introducing new management, securing new initial investment, reducing debt and cleaning up the balance sheet, retaining best-in-class legal, accounting, marketing and IR firms, and beginning to make investments in resources and companies consistent with the new business model’s objectives of generating revenues and increasing shareholder value through managing growth inof our invested companies.companies, building infrastructure platforms to support future cloud-based services, and continued to reduce debt, expenses and net loss.

As a result, we exited 20112012 with a positive balance sheet, reportedsignificantly increased revenues, for the first time, significantly reduced expenses and net losses, growing investments in several exciting high-tech companies, several distribution agreements, cloud-based server infrastructure in hand,place, and we believe we are in a solid position to raise capital and move the Company and its portfolio companies forward toward profitable growth.
 
Financial Condition and Results of Operations

Capital Resources and Liquidity

Current Assets and Liabilities, Working Capital

As of December 31, 2011,2012, the Company had total current assets of $223,879, up$152,550, a decrease of $71,329 from $746 in 2010, an increasethe end of $223,133 or 29,911%.the year previous. Current assets were primarily $197,331$106,894 in cash, the remainder being made up of prepaid expenses and accounts receivable, all owed by Gogiro Internet Group for income generated from our Canadian subsidiary.sales commissions and a combination of development services, IT services and management services provided by iGen to Gogiro.

The Company’s current liabilities as of December 31, 20112012 were $86,361, up marginally from the $81,798 down from $675,331 in 2010.  This represents a reduction in current liabilitiesreported at the end of $593,540, or 88%.  This was achieved primarily by the retirement of debt through issuances of common shares.year previous.   Current liabilities were allprimarily payables the majority beingfor development, IT infrastructure and services, advertising, contractor fees, for professional services.legal fees and accounting fees.

IGEN ended 20112012 with a working capital surplus of $66,189, down from $142,081 compared to a deficiencyat the end of $674,586 in 2010, a net increase of $816,667.2011.
 
 
10

 
Total Assets and Liabilities, Net Assets
 
As of December 31, 20112012 the Company’s total assets was $524,849 compared with $1,767,746 in 2010.  Total assets consisted$409,753, a net reduction of $223,879$115.096 from the year prior. This includes the reduction in current assets asof $71,329 described above, plus $300,970coupled with a net reduction of $43,767 in capital assets.  The Company’s capital assets wereremained primarily investments of $50,000 cash in Gogiro Inc.,Internet Group and $250,000Machlink Inc.  During 2012 the Company invested a further $50,000 to purchase additional shares of Gogiro, but recorded a $100,000 impairment in its investment in Machlink Inc., by issuancedue to share dilution, resulting in a net reduction of 1,000,000 IGEN common shares at $0.25

The 2011 reduction$43,767 in capital assets, over 2010 is due to revision ofand as the Company’s agreement with Machlink Inc., such thattotal liabilities were limited to its current liabilities, this resulted in 2012 year end net assets of $323,392, a reduction of $119,659 from the licensing rights of Machlink technology was cancelled and the asset value of $467,000 written off.  (The revised agreement also included the return and cancellation of 2,000,000 IGEN common shares originally issued at $0.65 per share.)year prior.

As of December 31, 2011, the Company’s total liabilities were its current liabilities of $81,798, Net Assets were $443,051, compared with $1,092,414 for 2010, and the2012, Company had an accumulated deficit of $4,275,471, up from $3,399,792 in 2010$4,720,297.

The Company believes it has adequate working capital and projected revenues to maintain existing operations for approximately three quartersone quarter without requiring additional funding.  However the Company’s business plan is predicated on raising further capital for the purpose of further investments and in expansion of distribution channels.  It is anticipated the Company will raise capital through private placements.

Results of Operations

Revenues and Net Income (Loss)
 
As of December 31, 2011,2012, the Company had record revenues of $2950,$134,683, compared with $0$2,950 in 2010.  These2011.   Reported revenues were the initial flow of sales commissions fromare currently all attributable to Gogiro Internet Group Inc, in whom IGEN is invested and with whom IGEN signed a Market Development Agreement in November 2011.  This is the first revenue ever reported by the Company.  The company anticipates these revenues will grow as IGEN works with Gogiro to further develop its market.Revenues include sales commissions, development and IT services, and management fees.

Expenses as of December 31, 2012 totaled $490,133, a significant 30% reduction from 2011 totaled $702,637, compared with $2,983,401 in the prior year, a reductionexpenses of $2,280,764 or 76%.$698,207 and 2010 expenses of $2,280,761.   The reduction in 2012 over 2011 was primarily attributed to significant reduction in consulting and business development fees from $1,075,170 to $432,281 (a net reduction of $642,889), reduction in management fees from $910,500 to $29,451 (a net reduction of $881,049), and a reduction of stock-based compensation to zero (a net reduction of $716,656).fees.

Other additional expenses, not included in the above, include the write-off of $467,000 invested$100,000 impairment on the investment in the licensing of Machlink Inc. technology, as part of a revision of the Company’s agreement with Machlink Inc,  and a net gain of $291,008 resulting from the settlement of debt.due to share dilution.

As of December 31, 20112012 the Company had a net loss of $875,679$444,826 or $0.09$0.03 per basic & diluted share.  This is a significant improvement over net losses of $875,679 in 2011, and diluted share, compared to a net losslosses of $2,983.401 in 2010, of $2,983.401, or $032 per basic and diluted share.  This represents a year on year reduction in net loss of 71%49%

Cash Flows
 
As of December 31, 20112012 the Company saw a net increasedecrease in cash of $196,585, compared with a net increase of $713 in the year prior.$161,453.  The primary source of cash was net proceeds of $484,089 from financing activities which was received from non-brokeredof $309,167, all due to the exercising warrants granted as part of private placement subscriptions for restricted common shares.placements done in 2011.  This was offset by $51,078 cash investments, of which$58,613, including a second $50,000 wasdirect investment in Gogiro Internet Group, and a net loss of cash fromused operating activities of $236,426.$412,007.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
 
As a smaller reporting company, the Company is not required to provide the information required by this item.

 
11


 
Item 8. Financial Statements and Supplementary Data.

The Company’s audited consolidated financial statements for the year ended December 31, 20112012 are included herewith.





 





IGEN NETWORKS CORP.



Consolidated Financial Statements
For the years ended December 31, 20112012 and 20102011
 
 
12

 

 
 
SUITE 1850
1066 WEST HASTINGS STREET
VANCOUVER, BC V6E 3X2
ACAL GROUP                                
CHARTERED ACCOUNTANTS
PCAOB & CPAB Registrant      
T: 604.683.3850
F: 604.688.8479
ACAL GROUP
CHARTERED ACCOUNTANTS
PCAOB & CPAB Registrant
SUITE 1850
1066 WEST HASTINGS STREET                                                                                                                          
VANCOUVER, BC V6E 3X2

T: 604.683.3850
F: 604.688.8479                                                                                                                                                     


REPORT ONOF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To:the Board of Directors and Stockholders of
IGEN Networks Corp.

To:          the Board of Directors and Stockholders of
IGEN Networks Corp.

We have audited the accompanying consolidated balance sheets of IGEN Networks Corp. (the “Company”) (a development stage company) as of December 31, 20112012 and 2010,2011, and the related consolidated statements of operations, stockholders’ equity (deficit), and cash flows for the years ended December 31, 20112012 and 2010 and the period from November 14, 2006 (inception) through December 31, 2011.  These consolidated financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these consolidated financial statements based on our audits. The consolidated financial statements of the Company for the period from November 14, 2006 (inception) to December 31, 2008 were reported upon by other auditors whose report, dated April 13, 2008, expressed an unqualified opinion on those statements and included an explanatory paragraph regarding the Company’s ability to continue as a going concern.  The financial statements of the Company for the period from November 14, 2006 (inception) to December 31, 2008 reflect a net loss of $93,814 of the accumulated deficit as of December 31, 2009.  The other auditors’ report have been furnished to us, and our opinion, insofar as it relates to amounts included for such prior periods, is based solely on the report of such other auditors.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of IGEN Networks Corp. as of December 31, 20112012 and 2010,2011, and the results of its operations and its cash flows for the years ended December 31, 20112012 and 2010 and the period from November 14, 2006 (inception) through December 31, 2011 in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 1 to the consolidated financial statements, the Company has not generated revenues since inception, has incurred losses in developing its business, and further losses are anticipated.  The Company requires additional funds to meet its obligations and the costs of its operations.  These factors raise substantial doubt about the Company’s ability to continue as a going concern.  Management’s plans in this regard are described in Note 1.  The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.


“ACAL Group”
  “ACAL Group”
Chartered Accountants
                                                                                                                                                         Chartered Accountants
Vancouver, British Columbia
April 16, 20122013

 
13

 
IGEN NETWORKS CORP.
(A Development Stage Company)
Consolidated Balance Sheets
(Expressed in U.S. dollars)

 December 31, 2011  December 31, 2010  December 31, 2012  December 31, 2011 
Assets            
Current            
Cash $197,331  $746  $35,878  $197,331 
Accounts receivable  2,950   -   106,894   2,950 
HST Receivable  4,778   - 
Prepaid expenses  23,598   -   5,000   23,598 
          152,550   223,879 
  223,879   746         
        
Investment (Note 3)  300,000   -   250,340   300,000 
Technology License (Note 3)  -   1,767,000 
Office equipment (Note 4)  970   - 
        
Equipment (Note 4)  6,863   970 
Total Assets $524,849  $1,767,746  $409,753  $524,849 
                
Liabilities and Shareholders' Equity                
Current liabilities                
Accounts payable $56,481  $173,378  $59,790  $56,481 
Accrued liabilities  25,317   10,000   26,571   25,317 
Shareholder's loans (Note 5)  -   204,954 
Due to related party (Note 6)  -   287,000 
          86,361   81,798 
Shareholders’ Equity        
Capital Stock (Note 7)
Authorized - 375,000,000 common shares with $0.001 par value
Issued and outstanding - 14,982,478 and 14,049,145 respectively
  14,982   14,049 
Additional paid-in capital  5,028,707   4,704,473 
Deficit accumulated  (4,720,297)  (4,275,471)
  81,798   675,332   323,392   443,051 
Shareholders’ Equity (Deficit)        
Capital Stock (Note 7)
Authorized - 375,000,000 common shares with $0.001 par value
Issued and outstanding - 14,049,145 and 11,436,427 respectively
  14,049   11,436 
Additional paid-in capital  4,704,473   4,480,770 
Deficit accumulated during the development stage  (4,275,471)  (3,399,792)
  443,051   1,092,414 
 $524,849  $1,767,746 
Total Liabilities and Shareholders' Equity $409,753  $524,849 
 
Approved on Behalf of the Board  
    
"Neil Chan"
 Director
  
    
"Richard Freeman"
 Director
  
    
The accompanying notes are an integral part of these consolidated financial statements.

 
F-1

 
IGEN NETWORKS CORP.
(A Development Stage Company)
Consolidated Statements of Operations
(Expressed in U.S. dollars)
 Year  Year 
 Year  Year  Cumulative Totals  Ended  Ended 
 Ended  Ended  from Inception  December 31,  December 31, 
 December 31,  December 31,  (November 14, 2006)  2012  2011 
 2011  2010  to Dec 31, 2011       
Revenue               
Sales commissions $2,950  $-  $2,950 
Management services $50,666  $- 
Commission fees  84,017   2,950 
  2,950   -   2,950   134,683   2,950 
Expenses                    
Advertising expense  -   -   20,000   29,241   - 
Consulting and business development fees  432,281   1,075,170   1,780,710   32,649   432,280 
Depreciation  2,380   108 
General and administrative  153,639   55,855 
Interest expense  2,839   20,000   22,839   -   2,839 
Depreciation  108   -   108 
Management fees (Note 6)  29,451   910,500   962,451   123,908   29,451 
Professional fees  81,173   120,994   296,914   90,431   81,173 
Stock-based compensation  -   716,656   716,656   -   - 
Transfer agent & filing fees  13,908   19,302   34,139   8,315   13,908 
Travel and accommodation  82,595   82,170   163,764   49,570   82,593 
General and administrative  60,282   38,609   104,848 
                    
  702,637   2,983,401   4,102,429   490,133   698,207 
Other items            
        
Foreign exchange loss  1,718   4,430 
Impairment on investment  100,000   - 
Write-off of prepaid expenses  14,682   - 
Write-off of technology license  467,000   -   467,000   -   467,000 
Gain on debt settlement  (291,008)  -   (291,008)  (27,024)  (291,008)
                    
  175,992   -   175,992   89,376   180,422 
            
Net Income (Loss) Applicable to Common Shares $(875,679) $(2,983,401) $(4,275,471)
Net Loss and Comprehensive Loss Applicable to Common Shares $(444,826) $(875,679)
Net Loss per Basic and Diluted Shares $(0.09) $(0.32)     $(0.03) $(0.09)
Weighted Average Number of Common Shares Outstanding  10,236,080   9,213,873       14,476,422   10,236,080 
 
The accompanying notes are an integral part of these consolidated financial statements.

 
F-2

 
IGEN NETWORKS CORP.
(A Development Stage Company)
Consolidated Statements of Cash Flows
(Expressed in U.S. dollars)
 
 Year  Year  Cumulative Totals  Year  Year 
 Ended  Ended  from Inception  Ended  Ended 
 December 31,  December 31,  (November 14, 2006)  December 31,  December 31, 
 2011  2010  to Dec 31, 2011  2012  2011 
Cash Flows from Operating Activities               
Net loss $(875,679) $(2,983,401) $(4,275,471) $(444,826) $(875,679)
Adjustments to reconcile net loss to net cash
provided by (used in) operations:
                    
Depreciation  108   -   108   2,380   108 
Write-off of prepaid expenses  14,682   - 
Write-off of technology license  467,000   -   467,000   -   467,000 
Impairment on investment in Machlink  100,000   - 
(Increase) decrease in prepaid expenses  (23,598)  -   (23,598)  3,916   (23,598)
(Increase) decrease in accounts receivable  (2,950)  -   (2,950)  (103,944)  (2,950)
(Increase) decrease in HST receivable  (4,778)  - 
Increase (decrease) in accounts payable and accrued liabilities  99,701   23,004   478,079   47,587   99,701 
Increase (decrease) in shareholder's loans  -   204,954   204,954   -   - 
Shares issued for services  390,000   1,859,500   2,249,500   -   390,000 
Gain on debt settlement  (291,008)  -   (291,008)  (27,024  (291,008)
Stock-based compensation  -   716,656   716,656   -   - 
                    
Net cash used in operating activities  (236,426)  (179,287)  (476,730)  (412,007)  (236,426)
                    
Cash Flows from Investing Activities                    
Investment in Gogiro  (50,000)  -   (50,000)  (50,340)  (50,000)
Acquisition of capital assets  (1,078)  -   (1,078)  (8,273)  (1,078)
Acquisition of technology license  -   (467,000)  (467,000)  -   - 
                    
Net cash provided from investing activities  (51,078)  (467,000)  (518,078)  (58,613)  (51,078)
                    
Cash Flows from Financing Activities                    
Common stock issued for cash  505,000   360,000   926,050   -   505,000 
Proceeds received from exercised warrants  309,167   - 
Proceeds received from loans - related parties  -   287,000   287,100   -   - 
Payments made on loans - related parties  (20,911)  -   (21,011)  -   (20,911)
Net cash provided by financing activities  309,167   484,089 
                    
Net cash provided by financing activities  484,089   647,000   1,192,139 
Net Increase (Decrease) in cash  196,585   713   197,331   (161,453)  196,585 
Cash, Beginning of Period  746   33   - 
Cash, End of Period  197,331   746   197,331 
Cash, Beginning of Year  197,331   746 
Cash, End of Year $35,878  $197,331 
                    
Supplemental Cash Flow Information                    
Cash paid for interest $-  $-  $-  $-  $- 
Cash paid for income taxes $-  $-  $-  $-  $- 
Non-cash operating, financing and investing activities                    
Shares issued for services $420,000  $1,829,500  $-  $-  $420,000 
Shares issued for technology $-  $1,300,000  $-  $-  $- 
Shares issued for settlement of debt $381,316  $195,000  $-  $16,000  $381,316 
Shares issued for investment $250,000  $-  $-  $-  $250,000 

The accompanying notes are an integral part of these consolidated financial statements.
 
 
F-3

 
IGEN NETWORKS CORP.
(A Development Stage Company)
Consolidated Statement of Stockholders' Equity (Deficit)
(Expressed in U.S. dollars)
 
           Deficit    
           Accumulated    
           During the  Total 
  Common Stock  Additional  Development  Stockholders’ 
  Shares  Amount  Paid-in-capital  Stage  Equity (Deficit) 
                
Balance from inception November 14, 2006
 $-  $-  $-  $-  $- 
Common stock issued for cash:                    
- November 14, 2006  853,300   853   16,197   -   17,050 
- November 20, 2006  2,200   2   43,998   -   44,000 
Net loss  -   -   -   (1,288)  (1,288)
                     
                     
Balance December 31, 2006  855,500   855   60,195   (1,288)  59,762 
Net loss  -   -       (46,112)  (46,112)
                     
                     
Balance December 31, 2007  855,500   855   60,195   (47,400)  13,650 
Net loss  -   -       (46,414)  (46,414)
                     
                     
Balance December 31, 2008  855,500   855   60,195   (93,814)  (32,764)
Net loss  -   -       (322,577)  (322,577)
                     
                     
Balance December 31, 2009  855,500   855   60,195   (416,391)  (355,341)
Common shares issued for services on February 15, 2010 at $0.06 per share  2,200,000   2,200   129,800   -   132,000 
Common shares issued for debt on February 15, 2010 at $0.06 per share  3,250,000   3,250   191,750   -   195,000 
Common shares issued for technology (in-trust) on March 30, 2010 at $nil per share  3,000,000   3,000   (3,000)  -   - 
Common shares issued for technology on April 13, 2010 at $0.65 per share  2,000,000   2,000   1,298,000   -   1,300,000 
Common shares issued for cash on May 10, 2010 at $0.60 per share  350,000   350   209,650   -   210,000 
Cancel and return to treasury,  shares  held (in-trust) on May 25, 2010 at $nil per share  (3,000,000)  (3,000)  3,000   -   - 
Common shares issued for services on May 27, 2010 at $0.77 per share  1,750,000   1,750   1,345,750   -   1,347,500 
Common shares issued for services on Jul 5, 2010 at $0.50 per share  200,000   200   99,800   -   100,000 
Common shares issued for services on Jul 8, 2010 at $0.50 per share  500,000   500   249,500   -   250,000 
Incentive stock options granted on July 15, 2010 at a $0.70 exercise price  -   -   716,656   -   716,656 
Common shares issued for cash on Sep 17, 2010 at $0.50 per share  300,000   300   149,700   -   150,000 
Common shares issued for services on Nov 22, 2010 at $0.97 per share  30,927   31   29,969   -   30,000 
Net loss  -   -   -   (2,983,401)  (2,983,401)
                     
                     
Balance December 31, 2010  11,436,427   11,436   4,480,770   (3,399,792)  1,092,414 
Cancellation of common shares issued for technology on April 13, 2010 at $0.65 per share  (2,000,000)  (2,000)  (1,298,000)  -   (1,300,000)
Common shares issued for services on May 16, 2011 at $0.60 per share  650,000   650   389,350   -   390,000 
Common shares issued for cash on September 8, 2011 at $0.60 per share  41,667   42   24,959   -   25,000 
Common shares issued for cash on September 8, 2011 at $0.60 per share  50,000   50   29,950   -   30,000 
Common shares issued for cash on September 12, 2011 at $0.30 per share  1,499,999   1,500   448,500   -   450,000 
Common shares issued for debt on December 5, 2011 at $0.30 per share  1,271,052   1,271   380,045   -   381,316 
Common shares issued for services on December 7, 2011 at $0.30 per share  100,000   100   29,900   -   30,000 
Common shares issued for investment on December 31, 2011 at $0.25 per share  1,000,000   1,000   249,000   -   250,000 
Share issuance costs  -   -   (30,000)  -   (30,000)
Net loss  -   -   -   (875,679)  (875,679)
                     
                     
Balance December 31, 2011  14,049,145   14,049   4,704,473   (4,275,471)  443,051 
                
                
              Total 
  Common Stock  Additional  Deficit  Stockholders’ 
  Shares  Amount  Paid-in-capital  Accumulated  Equity (Deficit) 
                
                
Balance December 31, 2010  11,436,427  $11,436  $4,480,770  $(3,399,792) $1,092,414 
Cancellation of common shares issued for technology on April 13, 2010 at $0.65 per share  (2,000,000)  (2,000)  (1,298,000)  -   (1,300,000)
Common shares issued for services on May 16, 2011 at $0.60 per share  650,000   650   389,350   -   390,000 
Common shares issued for cash on September 8, 2011 at $0.60 per share  41,667   42   24,959   -   25,000 
Common shares issued for cash on September 8, 2011 at $0.60 per share  50,000   50   29,950   -   30,000 
Common shares issued for cash on September 12, 2011 at $0.30 per share  1,499,999   1,500   448,500   -   450,000 
Common shares issued for debt on December 5, 2011 at $0.30 per share  1,271,052   1,271   380,045   -   381,316 
Common shares issued for services on December 7, 2011 at $0.30 per share  100,000   100   29,900   -   30,000 
Common shares issued for investment on December 31, 2011 at $0.25 per share  1,000,000   1,000   249,000   -   250,000 
Share issuance costs  -   -   (30,000)  -   (30,000)
                     
Net loss  -   -   -   (875,679)  (875,679)
                     
                     
Balance December 31, 2011  14,049,145   14,049   4,704,473   (4,275,471)  443,051 
Common shares issued for debt on June 28, 2012 at $0.32 per share  50,000   50   15,950   -   16,000 
Exercised warrants on June 29, 2012 at 0.35 per share  333,333   333   116,334   -   116,667 
Exercised warrants on June 29, 2012 at 0.35 per share  166,667   167   58,166   -   58,333 
Exercised warrants on June 29, 2012 at 0.35 per share  50,000   50   17,450   -   17,500 
Exercised warrants on August 17, 2012 at 0.35 per share  333,333   333   116,334   -   116,667 
                     
Net loss  -   -   -   (444,826)  (444,826)
                     
                     
Balance December 31, 2012  14,982,478  $14,982  $5,028,707  $(4,720,297) $323,392 
 
The accompanying notes are an integral part of these consolidated financial statements.

 
F-4

 
IGEN Networks Corp
(A Development Stage Company)
Notes to Financial Statements
For the Years ended December 31, 20112012 and 20102011
(expressed in U.S. dollars)

1.Nature and Continuance of Operations
 
IGEN Networks Corp, together with its subsidiary IGEN Business Solutions Inc., (collectively, “the company, we, our”) was incorporated in the State of Nevada on November 14, 2006.  The company has been primarily in a development state since inception pursuing a variety of different technologies and markets, but in September of 2011 took on new investment and management and a new business model.  The Company is no longer a Development Stage Company, as defined by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (”ASC”) 915, Development Stage Entities as of January 1, 2012.  IGEN’s primary business is investing in and managing for growth private high-tech companies that offer products and services in the domains of wireless broadband, Software as a Service (Saas), and Machine to Machine (M2M) solutions.   A secondary part of IGEN’s business is negotiating distribution agreements with relevant organizations and selling their products and services through the distribution channels of our portfolio companies, or newly developed IGEN sales channels.

These financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company generated revenue for the first time in the fourth quarter of 2012.2011 and continued to grow revenue through 2012, and is no longer considered to be in a development stage.  The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, on the ability of the company to grow its revenue base, to successfully grow the companies in which it is invested the ability of the Company to obtain necessary equity financing to both support the latter objectives and to invest in and grow new companies. As at December 31, 20112012 the Company has accumulated losses of $4,275,471$4,720,297 since inception.  This factor raises substantial doubt regarding the Company’s ability to continue as a going concern. Although there are no assurances that management’s plans will be realized, management believes that the Company will be able to continue operations into the future.  These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

2.Summary of Significant Accounting Policies
 
a)  Basis of Presentation and Consolidation
 
These consolidated financial statements and related notes include the records of the Company and of IGEN Business Solutions Inc., the wholly owned subsidiary of the Company, are presented in accordance with accounting principles generally accepted in the United States expressed in US dollars and, in management’s opinion, have been properly prepared within reasonable limits of materiality and within the framework of the significant accounting policies summarized below.

b)  Use of Estimates

The preparation of these financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to donated expenses, and deferred income tax asset valuations. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

 
F-5

 
IGEN Networks Corp
(A Development Stage Company)
Notes to Financial Statements
For the Years ended December 31, 20112012 and 20102011
(expressed in U.S. dollars)
 
 
2.      Summary of Significant Accounting Policies (continued)
 
c)  Basic and Diluted Net Income (Loss) Per Share
 
Basic earnings per share are computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period.
 
Diluted earnings per share give effect to all dilutive potential common shares outstanding during the period including stock options, using the treasury stock method, and convertible preferred stock, using the if-converted method.
 
In computing diluted earnings per share, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted earnings per share exclude all dilutive potential shares if their effect is anti-dilutive. Because the effect of conversion of the Company’s dilutive securities is anti-dilutive, diluted loss per share is the same as basic loss per share for the periods presented.
 
d)  Financial Instruments
 
The Company adopted FASB ASC 820-10-50, “Fair Value Measurements”.  This guidance defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures.  The three levels are defined as follows:
 
-   Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
 
-   Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instrument.
 
-   Level 3 inputs to valuation methodology are unobservable and significant to the fair measurement.
 
The fair values of cash, accounts receivable, accounts payable and accrued liabilities approximate their carrying values due to the immediate or short-term maturity of these financial instruments.  Foreign currency transactions are primarily undertaken in Canadian dollars.  The financial risk is the risk to the Company’s operations that arise from fluctuations in foreign exchange rates and the degree of volatility to these rates.  Currently, the Company does not use derivative instruments to reduce its exposure to foreign currency risk.  Financial instrument that potentially subject the Company to concentrations of credit risk consists of cash. The Company places its cash in what it believes to be credit-worthy financial institutions.
 
e)  Office Equipment
 
Office equipment  isand computer are recorded at cost. Amortization is provided annually at rates and methods over their estimated useful lives as follows, except in the year of acquisition when one half of the rate is used. Management reviews the estimates of useful lives of the assets every year and adjust them on prospective basis, if needed.
 
Office equipment20%20%declining balance
Computer55%declining balance
 
 
F-6

 
IGEN Networks Corp
(A Development Stage Company)
Notes to Financial Statements
For the Years ended December 31, 20112012 and 20102011
(expressed in U.S. dollars)
 
 
2.      Summary of Significant Accounting Principles (continued)

Property, plant and equipment are reviewed for impairment whenever events or changes in the circumstances indicate that the carrying value may not be recoverable. If the total of the estimated undiscounted future cash flows is less than the carrying value of the asset, an impairment loss is recognized for the excess of the carrying value over the fair value of the asset during the year the impairment occurs. Subsequent expenditure relating to an item of office equipment is capitalized when it is probable that future economic benefits from the use of the assets will be increased.
 
f)  Revenue recognition
 
The Company recognizes revenue when earned, specifically when all the following conditions are met:
 
-  Services are provided or products are delivered to customers.
-  There is clear evidence that an arrangement exists.
-  Amounts are fixed or can be determined.
-  The ability to collect is reasonably assured.
-  There is no significant obligation for future performance.
-  The amount of future returns can be reasonably estimated.
 
g)  Foreign Currency Transactions/Balances

The Company’s functionalreporting currency is the United States dollar and theseU.S. dollar. The consolidated financial statements are presented in United States dollar unless otherwise stated. Monetary assets and liabilities denominated in foreign currenciesof the Company are translated to U.S. dollars in accordance with ASC 830, Foreign Currency Translation Matters, using the exchange rate prevailing at the balance sheet date. Non-monetary items are translated at historical exchange rates, except for items carried at market value, which are translated at the rate of exchange in effect at the balance sheet date.  Revenues and expenses are translated at average rates of exchange during the year. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income. Foreign currency transactions

Assets and liabilities of the Company’s Canadian subsidiary are primarily undertaken in Canadian dollars. The Company has not, totranslated into U.S. dollars at the dateyear-end exchange rates, and revenue and expenses are translated at the average exchange rates during the period. Exchange differences arising on translation are disclosed as a separate component of these financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.stockholders’ equity.

h)  Income Taxes

The Financial Accounting Standards Board (FASB) has issued FASB ASC 740-10.  FASB ASC 740-10 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with prior literature FASB Statement No. 109, Accounting for Income Taxes.  This standard requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more likely than not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements.  As a result of the implementation of this standard, the Company performed a review of its material tax positions in accordance with recognition and measurement standards established by FASB ASC 740-10.

Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry-forwards and deferred tax liabilities are recognized for taxable temporary differences.  Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.  Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
 
 
F-7

 
IGEN Networks Corp
(A Development Stage Company)
Notes to Financial Statements
For the Years ended December 31, 20112012 and 20102011
(expressed in U.S. dollars)
 
2.Summary of Significant Accounting Principles (continued)
 
i)  Changes in Accounting Policies and Recent Accounting Pronouncements
 
The Company does not expect the adoption of any recently issued accounting pronouncements to have a significant effect on its consolidated financial statements.statements on the adoption of the following issued accounting pronouncements.

In June 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income”, which is effective for annual reporting periods beginning after December 15, 2011. ASU 2011-05 will become effective for the Company on January 1, 2012. This guidance eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. In addition, items of other comprehensive income that are reclassified to profit or loss are required to be presented separately on the face of the financial statements. This guidance is intended to increase the prominence of other comprehensive income in financial statements by requiring that such amounts be presented either in a single continuous statement of income and comprehensive income or separately in consecutive statements of income and comprehensive income. The adoption of ASU 2011-05 is not expected to have a material impact on our financial position or results of operations.

In May 2011, the FASB issued ASU 2011-04, “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs”, which is effective for annual reporting periods beginning after December 15, 2011. This guidance amends certain accounting and disclosure requirements related to fair value measurements. Additional disclosure requirements in the update include:
 
(1) for Level 3 fair value measurements, quantitative information about unobservable inputs used, a description of the valuation processes used by the entity, and a qualitative discussion about the sensitivity of the measurements to changes in the unobservable inputs;
(2) for an entity’s use of a nonfinancial asset that is different from the asset’s highest and best use, the reason for the difference;
(3) for financial instruments not measured at fair value but for which disclosure of fair value is required, the fair value hierarchy level in which the fair value measurements were determined; and
(4) the disclosure of all transfers between Level 1 and Level 2 of the fair value hierarchy. ASU 2011-04 will become effective for the Company on January 1, 2012. The Company does not expect that the guidance effective in future periods will have a material impact on its financial statements.

In April 2011, the FASB issued ASU 2011-02, “Receivables (Topic 310): A Creditor’s Determination of Whether a Restructuring is a Troubled Debt Restructuring”. This amendment explains which modifications constitute troubled debt restructurings (“TDR”). Under the new guidance, the definition of a troubled debt restructuring remains essentially unchanged, and for a loan modification to be considered a TDR, certain basic criteria must still be met. For public companies, the new guidance is effective for interim and annual periods beginning on or after June 15, 2011, and applies retrospectively to restructuring occurring on or after the beginning of the fiscal year of adoption. The Company does not expect that the guidance effective in future periods will have a material impact on its financial statements.

j)  Reclassifications
 
Certain reclassifications have been made to the prior year’s financial statements to conform to the current period’s presentation.

 
IGEN Networks Corp
(A Development Stage Company)
Notes to Financial Statements
For the Years ended December 31, 20112012 and 20102011
(expressed in U.S. dollars)
 
 
2.Summary of Significant Accounting Principles (continued)

k)  Comprehensive loss

FASB ASC 220, “Comprehensive Income”, establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As at December 31, 20112012 the Company has no items that represent a comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.

l)  Impairment of Intangible and Other Long-lived Assets

The Company periodically evaluates the carrying value of intangible and other long-lived assets. Impairment losses are recognized when the estimated undiscounted future cash flows associated with the asset or group of assets is less than their carrying value.  If impairment exits, an adjustment is made to write the asset down to its fair value, and a loss is recorded as the difference between the carrying value and fair value. Based on its review, the Company believes there were no impairments of its intangible and other long-lived assets as of December 31, 2011.

3.  Investments

On May 7, 2010 the Company obtained an exclusive license from Machlink Inc. (“Machlink”), for rights to its proprietary technology in wireless broadband Internet and pursuant to a memorandum of understanding the parties entered into on April 13, 2010, amended September 28, 2010 and further amended by agreement December 31, 2011. The License is for a period of ten years, renewable in ten year increments thereafter.

Under the amended agreement dated December 31, 2011, IGEN willwould negotiate a license to sell, distribute, sub-license and market Machlink’s system, platform and proprietary information in all countries and global markets excluding: Mexico, Belize, Bahamas, Cambodia, Thailand, Vietnam, and the Ectel Countries of the SE Caribbean. Furthermore, IGEN iswas licensed to market Machlink technology in Canada, Australia, Europe, South America and the United States, on a non-exclusive basis.

In consideration two million (2,000,000) common shares of the Company were issued to Machlink at fair value of $0.65 per share and recorded at $1,300,000. The Company also paid $267,000 on October 1, 2010, under the terms of the amended agreement, for a new system from Machlink. This in addition to the $200,000 consideration already paid to Machlink under the terms of the original May 7, 2010 agreement, including, $50,000 down, $50,000 paid on July 23, 2010, and $100,000 paid on September 17, 2010. Further, IGEN willwould pay a platform fee at the rate of 3% of gross revenue for any systems deployed through the efforts of IGEN.

On December 31, 2011 the Machlink agreement was modified to the issuance to Machlink of 1,000,000 shares of common stock of the Company in return for the 2,000,000 shares originally issued to Machlink being delivered to the Company for cancellation and 43 shares of Machlink.

On November 23, 2011 the Company expended $50,000 to Gogiro Internet Group (Gogiro) to acquireeacquire 200,000 shares of Gogiro pursuant to an option agreement to purchase up to 9.5% of Gogiro represented by total of 800,000 shares at $0.25 per share under the following terms:
 
(a) 200,000 of the Common Shares Option expiring at 4:30 p.m. PST on March 31th, 2012 (exercised),
(b) 200,000 of the Common Shares Option expiring at 4:30 p.m. PST on June 30th, 2012 (Not exercised),
(c) 200,000 of the Common Shares Option expiring at 4:30 p.m. PST on September 30th, 2012,2012(Not exercised),
(d) 200,000 of the Common Shares Option expiring at 4:30 p.m. PST on December 31th, 2012
(Exercised)

On October 17, 2012 the Company expended $50,000 to Gogiro Internet Group (Gogiro) to acquire a further 200,000 shares of Gogiro at $0.25 pursuant to the above option agreement.
 

IGEN Networks Corp
(A Development Stage Company)
Notes to Financial Statements
For the Years ended December 31, 20112012 and 20102011
(expressed in U.S. dollars)
 
 
3.  Investments (Continued)

Summary:
 
Investment in Machlink 43 common shares acquired $250,000  
43 common shares acquired
 
$
150,000
 
           
Investment in Gogiro 200,000 common shares acquired $50,000  
400,000 common shares acquired
 
$
100,340
 
           
Total Investments
   $300,000    
$
250,340
 
 
Investments in Machlink and Gogiro are carried at cost values less impairment as these investments do not have a quoted market price in an active market. The company recorded impairment of $100,000 in investment in Machlink for the year-ended December 31, 2012.

4.  Office Equipment

        Net Book Value 
  Cost  Accumulated Amortization  2011  2010 
Office equipment $1,078  $108  $970  $- 
  $1,078  $108  $970  $- 

        Net Book Value 
  Cost  Accumulated Amortization  2012  2011 
Office equipment $1,603  $354  $1,248  $970 
Computer $7,760  $2,145  $5,615  $0 
TOTAL $9,363  $2,500  $6,863  $970 

5.     Shareholders’ loans

The amounts due to shareholdersAs of the Company have been reduced to nil by the issuance of common shares in settlement of the debt. (December 2010 - $204,954)December 31, 2012 and December 31, 2011, there were no shareholder loans.

6.     Related Party Transactions

During the twelve months ended December 31, 2012 the Company incurred $123,908 in management fees paid in cash to directors and officers of the Company (December 2011 - $29,450).

During the twelve months ended December 31, 2012 the Company recorded the following transactions with Gogiro Internet Group, which shares a common Officer and Director with the Company:

-  Commissions and Consulting Income from Gogiro of $84,017
-  Management, Development and Service Fees from Gogiro of $50,666
-  Advertising Expenses to Gogiro of $26,860
-  Office Rent Expenses to Gogiro of $7,490

As of December 31, 2012 the Company had Account Receivables of $106,894 and Accounts Payable of $9,520 with Gogiro Internet Group.

As of December 31, 2012 the Company had total investment of $100,340 representing 400,000 shares in Gogiro Internet Group.  (December 2011 - $50,000/200,000 shares)
The amount due to a related party of December 31, 2011 of $266,089 (December 2010 - $287,000) was forgiven during the yeartwelve months ended December 31, 2011 pursuant to the renegotiation of the contract with the Machlink (please refer to note 3). The reversal of the loan amount is shown as an expense recovery in the statement of operations at December 31, 2011.

During the twelve months ended December 31, 2011, the Company incurred $29,450 in management fees paid in cash to directors and officers of the Company (December 2010 - $860,500 in the form of share issuances).
On December 5, 2011, the company issued a total of 1,271,052 restricted common shares at a fair value of $0.30 per share and a total recorded value of $381,315.60,to retire shareholder loans.
On December 7, 2011, the company issued 100,000 restricted common shares at a fair value of $0.30 per share and a total recorded value of $30,000 to a former officer for services rendered to the company.
The above transactions have been recorded at an exchange amount which is the amount of consideration established and agreed to by the related parties.

 
F-10

 
IGEN Networks Corp
(A Development Stage Company)
Notes to Financial Statements
For the Years ended December 31, 20112012 and 20102011
(expressed in U.S. dollars)
 
 
7.     Stockholders' Equity (Deficit)

a)  Upon incorporation in November 2006, the company undertook a private offering of 853,000 (post 5:1 forward split and 1:100 reverse split) shares of its common stock for $17,050 in cash.  Also in November 2006, the company issued 2,200 (post 5:1 forward split and 1:100 reverse split) shares of its common stock for $44,000 in cash.

b)  The Company approved a 5:1 forward split of the Company’s common stock October 15, 2008, such that each shareholder of record as of the effective date received five new shares for each one old share.

c)  The Company approved a 1:100 reverse split of the Company’s common stock May 18, 2009, such that each shareholder of record as of the effective date received one new share for one hundred old shares. All references to issued and outstanding shares in these financial statements are shown as post forward and reverse splits as if the splits had been effective at the beginning of the first period presented.

d)  During the twelve months ended December 31, 2010,2011, the company issued the following shares under the Securities Act of 1933 exemption Rule 144:
 
On February 15, 2010, the Company issued 550,000 restricted common shares to two related parties for services as directors and officers of the Company, at fair value of $0.06 per share and a recorded value of $33,000.

On February 15, 2010, the Company issued 1,650,000 restricted common shares to three independent parties pursuant to agreements for consulting services, at fair value of $0.06 per share and a recorded value of $99,000.

February 15, 2010, the Company issued 3,250,000 common shares to six non-affiliated parties for conversion of $195,000 debt which was incurred by the Company in March 2009, recorded at fair value of $0.06 per share.
On March 30, 2010, the Company issued 3,000,000 restricted common shares to Bio Business Development Corp. International Inc. pertaining to the memorandum of understanding regarding the acquisition of rights to intellectual property. The shares are recorded at $3,000 par value with an offsetting amount in additional paid-in capital. Pursuant to the MOU, the shares will be held in trust by the Company,
and will be released or cancelled, subject to the negotiation of terms and conditions in a mutually beneficial license agreement.

On April 13, 2010, the Company issued 2,000,000 restricted common shares to Machlink Inc. pertaining to memorandum of understanding and to be held in trust subject to the signing of a License Agreement with Machlink for the technology license rights.  On May 7, 2010, the Company signed an exclusive distribution License Agreement with Machlink Inc. for rights to its existing patent pending and proprietary technology in wireless broadband Internet technology, pursuant to the initial memorandum of understanding the parties entered into on April 13, 2010. In consideration, the Company acknowledged the two million restricted shares issued on April 13, 2010 pertaining to the memorandum of understanding, which will be held in trust and released in six months from the signing of the May 7, 2010 License Agreement.  During the six month hold period, IGEN has the option to pay $1 per share in lieu of release of the shares. The shares were recorded at fair value of $0.65 per share for a recorded value of $1,300,000.

F-11

IGEN Networks Corp
(A Development Stage Company)
Notes to Financial Statements
For the Years ended December 31, 2011 and 2010
(expressed in U.S. dollars)
7.     Stockholders' Equity (Deficit) – continued
On May 10, 2010, the Company issued 350,000 shares on receipt of $210,000 for subscription to 350,000 common shares at a price of $0.60 per share.

On May 25, 2010, the Company cancelled and returned to treasury, the 3,000,000 restricted common shares originally issued to Bio Business Development Corp. International Inc. and  held in-trust, pertaining to the memorandum of understanding regarding the acquisition of rights to intellectual property. The parties did not negotiate a mutually beneficial license agreement and the MOU was terminated. The $3,000 par value recording and offsetting amount in additional paid-in capital was reversed.

On May 27, 2010, the Company issued 750,000 restricted common shares to two related parties for services as directors and officers of the Company, at fair value of $0.77 per share and a recorded value of $577,500 held in-trust, pertaining to the memorandum of understanding regarding the acquisition of rights to intellectual property. The parties did not negotiate a mutually beneficial license agreement and the MOU was terminated. The $3,000 par value recording and offsetting amount in additional paid-in capital was reversed.

On May 27, 2010, the Company issued 750,000 restricted common shares to two related parties for services as directors and officers of the Company, at fair value of $0.77 per share and a recorded value of $577,500.

On May 27, 2010, the Company issued 350,000 restricted common shares to three independent parties in consideration for their appointments to the advisory board of the Company, at fair value of $0.77 per share and a recorded value of $269,500.

On May 27, 2010, the Company issued 650,000 restricted common shares to two independent consultants pursuant to consulting agreements entered into, at fair value of $0.77 per share and a recorded value of$500,500.

On July 5, 2010, the Company issued 200,000 restricted common shares to an independent consultant pursuant to a consulting agreement entered into, at fair value of $0.50 per share and a recorded value of$100,000.

On July 8, 2010, the Company issued 500,000 restricted common shares to related parties for services as a director and officer of the Company, at fair value of $0.50 per share and a recorded value of $250,000.
On September 17, 2010 the Company received of $150,000 for subscription to 300,000 common shares at a price of $0.50 per share.

On November 22, 2010 the Company issued 30,927 restricted common shares to an independent consultant for services, at fair value of $0.97 per share and a recorded value of $30,000.
e)  During the twelve months ended December 31, 2011 the Company issued the following shares under the Securities Act of 1933 exemption Rule 144:
On May 16, 2011 the company issued a total of 650,000 restricted common shares at a fair value of $0.60 per share for services specific to acting in the capacity of IGEN advisory board members.
F-12

IGEN Networks Corp
(A Development Stage Company)
Notes to Financial Statements
For the Years ended December 31, 2011 and 2010
(expressed in U.S. dollars)
7.     Stockholders' Equity (Deficit) – continued

On September 8, 2011 the Company issued 91,667 restricted shares of common stock on receipt of $55,000 at a price of $0.60 per share.

On September 12, the company issued a total of 1,499,999 restricted common shares for which the company received a total of $450,000 in subscriptions for shares at a price of $0.30 per share

On December 5, 2011, the company issued a total of 1,271,052 restricted common shares at a fair value of $0.30 per share and a total recorded value of $381,315.60, to six related parties to retire shareholder loans.
 
On December 7, 2011, the company issued 100,000 restricted common shares at a fair value of $0.30 per share and a total recorded value of $30,000 to a related party for services rendered to the company.
 
On December 31, 2011 the Machlink agreement was modified to the issuance to Machlink of 1,000,000 shares of common stock of the Company and fairly valued at $260,000 in return for the 2,000,000 shares originally issued to Machlink being delivered to the Company for cancellation.

e)  During the twelve months ended December 31, 2012, the company issued the following shares under the Securities Act of 1933 exemption Rule 144:

On June 28, 2012 the company issued 50,000 restricted common shares at a fair value of $0.32 per share and a total recorded value of $16,000 to a related party for services rendered to the company. The issuancegain of 1,000,000 shares certificates and cancellation$27,024 on this settlement was recognized in the consolidated statement of 2,000,000 shares certificates were in process as ofoperations during the twelve months ended December 31, 2011.2012.
 
On June 29, 2012 the company issued a total of 550,000 restricted common shares for which the company received a total of $192,500 in subscriptions for shares at a price of $0.35 per share as part of the exercising of warrants.

On August 17, 2012 the company issued a total of 333,000 restricted common shares for which the company received a total of $116,667 in subscriptions for shares at a price of $0.35 per share as part of the exercising of warrants.

F-11

Notes to Financial Statements
For the Years ended December 31, 2012 and 2011
(expressed in U.S. dollars)
7.     Stockholders' Equity (Deficit) – continued

f)  Common share purchase warrants:

During the year ended December 31, 2011, the Company issued 91,667 units pursuant to a private placement at a price of $0.60 per unit for gross proceeds of $55,000.  Each unit consists of one common share and one share purchase warrant.  Each warrant entitles the holder to purchase one additional share of common stock at a price of $0.75$0.35 for one year.  The Company allocated $41,078 to the common shares and $13,922 to the share purchase warrants based on the relative fair values.

During the year ended December 31, 2011, the Company issued 1,499,999 units pursuant to a private placement at a price of $0.30 per unit for gross proceeds of $450,000.  Each unit consists of one common share and one share purchase warrant, with each warrant entitling the holder to purchase one share at an exercise price of $0.45$0.35 per share for one year. The Company allocated $304,415 to the common shares and $145,585 to the share purchase warrants based on the relative fair values.
The Company calculated the value of the warrants using the Black & Scholes warrant pricing model, and recorded $159,507 as warrants issued. Assumptions used in the option pricing model were as follows:
  Sept 6 2011  Nov 18 2011 
       
Expected Life of the warrants  1   1 
Volatility  118.52%  118.52%
Expected Dividends  0.00%  0.00%
Risk-Free Rate  0.92%  0.95%

F-13

IGEN Networks Corp
(A Development Stage Company)
Notes to Financial Statements
ForDuring the Yearsyear ended December 31, 2011 and 20102012, the Company issued a total of 883,333 restricted common shares at a price of $0.35 per share pursuant to exercising of warrants issued in 2011.  The remaining 708,333 warrants expired unexercised during the year ended December 31, 2012. As of December 31, 2012, the Company had no warrants outstanding.
(expressed in U.S. dollars)
7.     Stockholders' Equity (Deficit) – continued

The following table summarizes information about warrants outstanding and exercisable at December 31, 2011:2012:

  
Number of warrants
$
  
Weighted average exercise price
$
 
       
Warrants outstanding – Beginning of year  1,591,666   0.35 
Exercised  (883,333)  0.35 
Expired  (708,333)  0.35 
         
Warrants outstanding – End of year  -   - 
 

Exercise Price ($) Expiry date No. of Warrants Outstanding  Weighted Average Remaining Life (Years) 
 0.45 September 8, 2012  1,499,999   0.67 
 0.75 November 18, 2012  91,666   0.88 
      1,591,665   0.78 

g)d)  Stock Options
On July 15 2010, the Company granted 2 million incentive stock options to various directors, officers, advisors and consultants.  The stock options are exercisable at a rate of $0.70 per share over a period of three years.
 
On April 21, 2011, all the options were cancelled. As at December 31, 2012 and December 31, 2011, the Company has no options outstandingoutstanding.

F-12

IGEN Networks Corp
Notes to Financial Statements
For the Years ended December 31, 2012 and 2011
(expressed in U.S. dollars)


8.     Income Taxes

Reconciliation of the Company’s income tax expenses are as follows:

 Dec 31, 2011  Dec 31, 2010  Dec 31, 2012  Dec 31, 2011 
            
(Loss) Income for the year $(875,679) $(2,983,401)
Loss for the year $(444,826) $(875,679)
Expected income tax recovery at statutory rates of 35%  (306,488)  (1,044,190)  (155,689)  (306,488)
Non-deductible item  63,721   251,793   26,227   63,721 
Increase in valuation allowance  242,767   792,397   129,462   242,767 
 $-  $-  $-  $- 
 
The components of future income tax assets are as follows:

  Dec 31, 2011  Dec 31, 2010 
Future income tax assets      
Non-capital losses carried forward and others $1,180,901  $938,100 
Less:  Valuation allowance  (1,180,901)  (938,100)
Net future income tax assets $-  $- 
F-14

IGEN Networks Corp
(A Development Stage Company)
Notes to Financial Statements
For the Years ended December 31, 2011 and 2010
(expressed in U.S. dollars)
8.     Income Taxes (Continued)
  Dec 31, 2012  Dec 31, 2011 
Future income tax assets      
Non-capital losses carried forward and others $1,310,363  $1,180,901 
Less:  Valuation allowance  (1,310,363)  (1,180,901)
Net future income tax assets $-  $- 

The Company has adopted FASB ASC 740-10 to account for income taxes.  The Company currently has no issues creating timing differences that would mandate deferred tax expense.  Net operating losses would create possible tax assets in future years.  Due to the uncertainty of the utilization of net operating loss carry forwards, an evaluation allowance has been made to the extent of any tax benefit that net operating losses may generate.  A provision for income taxes has not been made due to net operating loss carry-forwards of $3,374,000$3,741,000 and $2,680,384$3,374,000 as of December 31, 2011and2012and December 31, 2010,2011, respectively, which may be offset against future taxable income through to 2031.2032.

The Company did not have any tax positions for which it is reasonably possible that the total amount of unrecognized tax benefits will significantly increase or decrease within the next 12 months.

The tax years that remain subject to examination by major taxing jurisdictions are those for the years ended December 31, 2012, 2011, 2010, 2009, 2008, 2007 and 2006.

F-13

IGEN Networks Corp
Notes to Financial Statements
For the Years ended December 31, 2012 and 2011
(expressed in U.S. dollars)

9.     Financial Instruments

Credit Risk

Financial instruments that potentially subject the Company to credit risk consist of cash and cash equivalents. The Company deposits cash and cash equivalents with high credit quality financial institutions as determined by rating agencies.  As a result, credit risk is considered insignificant.

Currency Risk

The Company’s major expenses and payables are in United States dollars and are expected to continue to incur in United States dollars.  Fluctuations in the exchange rate between the United States dollar and other currency may have a material effect on the Company’s business, financial condition and results of operations.  The Company is subject to foreign exchange risk for transactions in its Canadian subsidiary as at December 31, 2012. The Company does not actively hedge against foreign currency fluctuations.

Interest Rate Risk

The Company has cash balances and no interest bearing debt. The Company’s current policy is to invest excess cash in high yield term deposits and bankers’ acceptance. The Company regularly monitors its cash management policy. Interest rate risk is remote as the interest rates on the Company’s short-term investment have fixed interest rates.

Liquidity Risk

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with its financial liabilities.
The Company manages liquidity risk by continuously monitoring actual and projected cash flows and matching the maturity profile of financial assets and liabilities. As at December 31, 2012, the Company had a working capital surplus of $66,189 (2011 – $141,982).

10. Subsequent Event

The Company has evaluated subsequent events through the date of these financial statements were issued in accordance with FASB ASC 855 and all materialreports the following subsequent events have been disclosedevents:

On March 12 2013 the Company acquired 2,078,080 shares of Gogiro Internet Group, Inc. through the issuance of 1,731,733 restricted common shares of the Company.  Neil Chan, CEO and Director of both companies, exchanged 2,000,000 Gogiro shares for 1,666,667 shares of the Company.  The purchase was approved through Board of Director’s consent resolution in which Neil Chan abstained from voting and specified in a Stock Purchase Agreement signed between Neil Chan and the Company.  As of the date of the filing of this 10K the share issuances were in process.

On March 25, 2013 via Board of Directors Consent Resolution the Company ratified and adopted a Stock Option Plan, created an option pool of 4,000,000 options, and granted 1,475,000 options to Directors of the Company, consistent with employment agreements signed in 2011 and included as stated above.Exhibit 10.1 and 10.2.

On March 26, 2013, Neil Chan exercised his options to purchase 444,444 at the strike price of $0.09 per share for a total price of $39,999.96.  As of the date of the filing of this 10K the share issuance was in process.
 
F-15F-14


Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.
 
The Company did effect a change of accountants in 2010:  on March 5, 2010, the audit committee of the Company’s board of directors approved the dismissal of Child Van Wagoner & Bradshaw, PLLC (CVWB) as the Company’s independent registered public accounting firm, and on the same date the audit committee engaged ACAL Group, the Company’s current auditors, to serve as the Company’s independent accounting firm.

However there was no disagreements or any reportable events of the types described in paragraphs (a)(1)(iv) and (a)(1)(v) of Item 304(a) of Regulation S-K  in connection with this change, and there have been no disagreements with accountants over the past two years.

Item 9A. Controls and Procedures.

Disclosure Controls and Procedures
 
The Company carried out an evaluation of the effectiveness of the Company’s disclosure controls and procedures with the participation of all the Company’s executives, the effectiveness of the Company’s disclosure controls and procedures as of December 31, 2010.2012.  The conclusions of the Company’s principal executives was that the controls and procedures in place were effective such that the information required to be disclosed in our SEC reports was a) recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and b) accumulated and communicated to our management, including our chief executive offer and chief operation officer, as appropriate to allow timely decisions regarding required disclosure.

Internal Control over Financial Reporting
 
As of December 31, 2011,2012, management assessed the effectiveness of our internal control over financial reporting.  The Company’s management is responsible for establishing and maintain adequate internal control over financial reporting for the Company.  Internal control over financial reporting is a set of processes designed by or under the supervision of the Company’s CEO, COO and CFO (or executives performing equivalent functions) to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and includes those policies and procedures that:
-  pertain to the maintenance of records that in reasonable detail accurately and farily reflect our transactions and dispositions of our assets;
-  provide reasonable assurance our transactions are recorded as necessary to permit preparation of our financial statements in accordance with GAAP, and that receipts and expenditures are being made only in accordance with authorizations of our management and directors;
-  provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.  In evaluating the effectiveness of our internal control over financial reporting, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control – Integrated Framework.  Based on that evaluation, they concluded that during the period covered by this report, though there are weaknesses in the Company’s internal controls, given the current size of the organization, such internal controls and procedures as were in place were adequately effective to detect the inappropriate application of US GAAP.

Item 9B. Other Information.
 
During the fourth quarter of the fiscal year ended December 31, 20112012 there was no information required to be reported on Form 8K which was not previously reported.

 
14

 
PART III

Item 10. Directors, Executive Officers and Corporate Governance.

Directors and Executive Officers
 
The following lists the directors and executive officers of the Company as of December 31, 2011:2012:
 
NameAgePositionTerm of Office
Robert Nealon
56
57
Director, Chairman of the Board
8 July 2010 to present
Neil G. Chan
50
51
Director, Chief Executive Officer
1 September 2011 to present
Richard Freeman
51
52
Director, Chief Operating Officer
1 November 2011 to present
 
Business Experience
 
The following are brief backgrounds on the Directors and Officers of the Company

Robert Nealon, Chairman of the Board & Director
Mr. Nealon is the Principal Attorney in Nealon & Associates, P.C., and a Washington, D.C. based law and government relations firm. He has been practicing law for twenty-seven years and has achieved an AV rating from Martindale-Hubbell, the leading rating bureau for the legal profession. Mr. Nealon has a B.A. from University of Rochester (1977) and M.B.A. from Rochester Institute of Technology (1978). He received his Juris Doctorate, magna cum laude, from the University of Bridgeport in 1982 and his Masters of Law in Taxation (L.L.M.) degree from Georgetown University in 1984. He is a member of the bar associations of New York State and Virginia, the American Bar Association and the Federal Bar Association. Mr. Nealon served as Adjunct Instructor of Corporate Law, George Washington University from 1985 until 2005. Mr. Nealon has been lead counsel on hundreds of commercial trials, including multi-million dollar derivative action lawsuits, security fraud and government contract fraud. He has been counsel to hundreds of corporations, including insurance affinity marketing, manufacturing and multiple financial institutions. Mr. Nealon has been active over the years in national politics and government relations.

Mr. Nealon was appointed to the Virginia Small Business Advisory Board by former Virginia Governor Warner and was reappointed to this state board by Governor Kaine through 2010 as its Chairman. Mr. Nealon is also a current appointee to the George Mason University Advisory Board for the Institute for Conflict Analysis and Resolution in Arlington, Virginia. He  currently sits on the Board of the Virginia Chamber of Commerce Small Business Committee and is a Director of the Alexandria Small Business Development Corporation. He is also an active member of the U.S. Chamber of CommerceNational Press Club and the Democratic National Club.

Neil G. Chan, Chief Executive Officer & Director
Mr. Chan is a career technologist who has pioneered the early adoption of disruptive technologies in more than 45 countries over the last 30 years. From start-up to $400M in annual revenues, Mr Chan has led and created the best-in-class sales, marketing, and service organizations during the development of wireless data infrastructure, mobile content, Software-as-a-Service for commercial fleets, and HFC broadband infrastructure. Mr Chan led the first technology transfer initiative between Canada and Mainland China on behalf of Spar Aerospace and Gandalf Technologies Inc., during the mid-1980s along with training, product marketing and sales responsibilities for growing Gandalf's export markets; shortly after Mr Chan was recruited to Motorola Inc., to lead the product marketing of the industry's first mobile data solutions for public safety, taxi, utility, and field service markets. Mr Chan led Motorola's initiative to expand into public data networks throughout the Asia Pacific region during the 1990s and subsequently was promoted to Managing Director to lead the expansion of HFC data and voice broadband networks throughout the region. In the spring of 2000, Mr Chan joined Airvana Inc., to lead business development for the early adoption of CDMA-based broadband wireless networks which today continue to serve millions of users throughout North America and Latin America. Most recently, Mr Chan led worldwide sales and marketing of fleet management services for WebTech Wireless Inc., which contributed five years of record growth and industry leadership across government and transportation markets. Mr Chan has served on the Executive Review Board of Royal Roads University and continues to mentor and support early stage technology companies. Mr Chan is Chairman and CEO of the privately-held Gogiro Internet Group.
 
 
15

 
Richard Freeman, Chief Operating Officer & Director
Mr. Freeman is a senior high-tech operations and product development executive with over 25 years experience managing leading-edge hardware and software communications solutions and services across a broad-range of technologies and international markets. Mr. Freeman's career began with Mobile Data International where he spearhead adoption of early private wireless data networks for Taxi, Public Safety and Utility markets, overseeing 800Mhz radio Manufacturing Engineering, data terminal manufacturing, RF system design, and International sales support and system deployment.   In the early 90’s, Mr. Freeman was responsible for technical sales support and system implementation for Motorola’s Wireless Data Group located in London and Paris. Mr. Freeman was instrumental in Motorola’s successful launch into European Taxi markets, along with the global launch of data infrastructure with the responsibility for product definition, marketing, and implementation of wireless data infrastructure based on Motorola DataTAC and ARDIS network solutions.

Mr. Freeman subsequently joined Sierra Wireless where he led definition, development, and successful deployment of many world-class leading edge CDPD, 1xRTT, GPRS, and EVDO wireless data modem hardware and enabling software solutions for international markets.   In 2002 Mr. Freeman joined WebTech Wireless, where he defined target markets and requirements for mobile hardware and Fleet Management services.  Promoted to VP Operations he oversaw the successful growth of the organization, supporting ongoing 60% annual growth in shipments and software-as-a-service revenues, a tripling of personnel, five-fold growth in corporate and manufacturing facilities and infrastructure, and the successful implementation of many multiple multi-million dollar projects.

Most recentlyIn 2011 Mr. Freeman was Sr. VP Operations and Product Management for Saturna Green Systems, focusing on developing embedded telematics solutions for the electric vehicle industry.  Mr. Freeman holds a BaSC in Electrical Engineering from the University of British Columbia.

Code of Ethics
 
The Company has not yet adopted a complete code of ethics policy as defined in Item 406 of Regulation S-K, however the company has adopted a disclosure policy that applies to all directors, officers and employees of the Company, as part of a program to establish a comprehensive code of ethics.  The Company’s disclosure policy is available on its website www.igen-networks.com .

Audit Committee and Financial Expert
 
The Company does not have an audit committee.  The Company is still small and the functions of an audit committee are done by the board of directors as a whole, as specified in section 3(a)(58)(B) of the Exchange Act.  As such the company has no audit committee financial expert serving on an audit committee.  The board of directors however is confident in its ability as a whole to perform the functions required of an audit committee.
 
 
16

 
Item 11. Executive Compensation.

Summary Compensation Table
 
Name and principal positionYearSalary ($)Stock awards ($)
Option awards
Name and principal position Year  Salary ($)  Stock awards ($)  
Option awards
 ($)
  
Total($)
 
 
Neil G. Chan
Director, President & CEO
 
2012
2011
   
60,070
19,6794
 4
 4
  
0
0
   
0
0
   
60,070
19,679
 
Richard Freeman
Director, COO
 
2012
2011
   
63,8274
9,7714
 4
 4
  
0
0
   
0
0
   
63,827
9,771
 
Monty Ormsby
Director, President1
 
2012
2011
   
0
0
   0   
0
-123,500
 3  
0
-123,500
 
Richard Gilbertson
Director, CFO1
 
2012
2011
   
0
0
   
0
0
   
0
-71,600
 3  
0
-71600
 
Michael Grudman
Director, CFO2
 
2012
2011
   
0
0
   
0
0
   
0
-143,200
 3  
0
-143,200
 
 ($)
Total($)
Neil G. Chan
Director, President & CEO
2011
2010
19,6794
0
0
0
0
0
19,679
0
Richard Freeman
Director, COO
2011
2010
9,7714
0
0
0
0
0
9,771
0
Monty Ormsby
Director, President1
2011
2010
0
0
0
9,000
-123,5003
123,500
-123,500
132,000
Richard Gilbertson
Director, CFO1
2011
2010
0
0
0
385,000
-71,6003
71,600
-71600
456,600
Michael Grudman
Director, CFO2
2011
2010
0
0
0
24,000
-143,2003
143,200
-143,200
167,200
1Resigned September 1, 2011
2Resigned July 5, 2010
3Options granted in 2010 that were cancelled by board resolution in 2011.
Valuation of Stock and Option awards are based on the issuance details listed in the Statement of Stockholder’s Equity in the Company’s financial statements.
4Salary for services as an executive officer.  No compensation for services as a director received in 2011.2011 or 2012.

Outstanding Equity Awards at Fiscal Year-end
 
The company currently has no unearned, unvested, or unexercised options, shares, units, or other rights.    All previously granted stock awards were fully vested when granted, and any and all previously granted options were cancelled by board resolution in 2011.

Director Compensation1
 
Name and principal positionYearSalary ($)Stock awards ($)Option awards
Total($)
 
Robert Nealon
Director, COB
2012
2011
2010
0
0
0
250,000
-179,0003
179,000
-179,000
429,000
Chris Shade
Director2
2011
2010
0
0-179,000
0
192,500-179,000
0
0
0
192,500
1Provides information on Directors not serving as executive officers only.  Compensation for directors also servicing as executive officers is listed in the summary compensation table at the beginning of this Item.
2Resigned September 1, 2011
3Options granted in 2010 that were cancelled by board resolution in 2011.

 
17

 
Discussion of Executive and Director Compensation
 
Compensation of Directors
 
Directors are currently not paid any compensation for acting as directors.  None of the directors of the company were compensated for acting in their capacity as a director in 2011.2012.

Compensation of Executives
 
The CEO and COO of the Company, who are also directors of the Company, are both paid $60,000$60,070 and $63,827 per annum respectively as compensation for services in their respective capacities as executive officers.  No options or stock compensation were granted to executive officers in 2011.2012.

There are currently no long term incentive plans or pension plans for directors or officers of the Company.

The company does not currently provide indemnity insurance coverage for directors and officers of the Company.

Compensation Committee Interlocks and Insider Participation
 
The Company is small and has no compensation committee.  The board of directors as a whole acts in the capacity of a compensation committee.  All executive officers of the Company are also directors of the Company and as such were and are able to vote on matters of compensation.  Though the company is not legally obligated to establish a compensation committee, we may do so when the company reaches a critical mass and/or when deemed advisable by the board.

Compensation Committee Report
 
As a smaller reporting company, the Company is not required to report the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K, and as such there was no review or recommendation as to its inclusion in this report.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The following tables list information that is accurate as of December 31, 2011.2012.

Securities authorized for issuance under equity compensation plans

On July 15, 2010, the Company granted two million incentive stock option, exercisable at a rate of $0.70 per share over a period of three years,  to various directors, officers, advisors and consultants of the Company.  However on April 21, 2011, all options were cancelled by resolution of the board.  Therefore asAs of December 31 20112012 the Company had no options outstanding.
 
 
18


Equity Compensation Plan Information

 
 
Plan category
 
Number of securities to
be issued upon exercise of
outstanding options, warrants and rights
  
Weighted-average exercise
price of outstanding options, warrants and rights
  
Number of securities remaining
available for future issuance under equity
compensation plans (excluding securities reflected in column (a))
 
  (a)  (a)  (a) 
Equity compensation plans approved by security holders
  0   0   0 
Equity compensation plans not approved by security holders
  0   0   0 
Total
  0   0   0 


Security Ownership of certain beneficial owners

(1) Title of class (2) Name and address of beneficial owner(3) Amount and nature of beneficial ownership(4) Percent of class (2) Name and address of beneficial owner (3) Amount and nature of beneficial ownership  (4) Percent of class 
Common Shares
Machlink Inc
321 Port St. Charles, St. Peters, Barbados
1,000,000
7.1%
 
 
Machlink Inc
321 Port St. Charles, St. Peters, Barbados
  1,000,000   6.67%

Security Ownership of management

1) Title of class 
(2) Name and address of beneficial owner(3) Amount and nature of beneficial ownership4) Percent of class
 
Robert Nealon
Director, COB
521,5713.71%
 
Neil G. Chan
Director, President & CEO
00%
 
Richard Freeman
Director, COO
00%
1) Title of class(2) Name and address of beneficial owner 
(3) Amount and nature of
beneficial ownership
  4) Percent of class 
 
Robert Nealon
Director, COB
  521,571   3.48%
 
Neil G. Chan
Director, President & CEO
  20,000   0.13%
 
Richard Freeman
Director, COO
  0   0%

 
19


Item 13. Certain Relationships and Related Transactions, and Director Independence.

Transactions with related persons, promoters and certain control persons

In 2011 $266,089 due as
On March 12 2013 the Company acquired 2,078,080 shares of December 31, 2011 to a related party was forgiven duringGogiro Internet Group, Inc. through the year pursuant to the renegotiationissuance of a contract with Machlink Inc.

On December 5, 2011, the company issued a total of 1,271,0521,731,733 restricted common shares of the Company.  Neil Chan, CEO and Director of both companies, exchanged 2,000,000 Gogiro shares for 1,666,667 shares of the Company.  The purchase was approved through Board of Director’s consent resolution in which Neil Chan abstained from voting and specified in a Stock Purchase Agreement signed between Neil Chan and the Company.  As of the date of the filing of this 10K the share issuances were in process.  Between February 20 2013 and March 15 2013 the Company’s shares traded at a fairor closed at $0.10 on the OTCQB so the approximate value of $0.30 per sharethe transaction calculated on the basis of market value would be $207,808 and a total recorded value of $381,315.60,to retire shareholder loans, of which anthe amount of $35,114 was settled through issuance of 117,045 restricted shares for amounts due toNeil Chan’s interest in the chairman of the board.transaction would be $166,666.

On December 7, 2011, the company issued 100,000 restricted common shares at a fair value of $0.30 per share and a total recorded value of $30,000 to a former officer for services rendered to the company.

In 2010 restricted stock was awarded to Directors of the company as already identified is Item 11 Executive Compensation.

Director Independence
 
The Company’s common stock is listed on the OTC Bulletin BoardOTCQB inter-dealer quotation system, which does not have director independence requirements.

Item 14. Principal Accounting Fees and Services.

Audit Fees
 
Aggregate fees billed for professional services rendered by the Company’s principal accountant for the audit of the Company’s annual financial statements, review of financial statements in quarterly filings, or services associated with statutory and regulatory filings for the last two fiscal years are as follows:

2010: $17,3602011: $17,500
2011:2012: $17,500

Audit Related Fees
 
Aggregate fees billed in the last two fiscal years for assurance and related services by the Company’s principal accountant that are reasonably related to the performance of the audit or review of the registrant’s financial statements and are not reported above are as follows:

2010:2011:  $0
2011:2012:  $0
 
 
Tax Fees
 
Aggregate fees billed in each of the last two fiscal years for professional services rendered by the Company’s principal accountant for tax compliance, tax advice, and tax planning are as follows:

2010:2011:  $0
2011:2012:  $0

All Other Fees
 
Aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant, other than the services reported above, are as follows:

2010:2011:  $0
2011:2012:  $0

Audit Committee’s Pre-Approval Policies and Procedures
 
The Company does not at this time have an audit committee and no formal pre-approval policies or procedures have yet been implemented.  The board of directors acting in lieu of an audit committee is required to pre-approve the engagement of the Company’s principle accountant for non-auditing services.
 
 
PART IV
Item 15. Exhibits, Financial Statement Schedules.

(1)Financial statements:
- Audited Financial Statements for the year ended December 31, 20112012

(2) Financial statement schedules
- none

(3) Exhibits

Exhibit Index
 
3(i) 
3(ii) 
10.1 
10.2 
21 
31.1 
31.2 
32.1  
32.2 
101.INSXBRL Instance Document 
101.SCHXBRL Taxonomy Extension Schema Document 
101.CALXBRL Taxonomy Extension Calculation Linkbase Document 
101.DEFXBRL Taxonomy Extension Definition Linkbase Document 
101.LABXBRL Taxonomy Extension Label Linkbase Document 
101.PREXBRL Taxonomy Extension Presentation Linkbase Document 



 
 
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 IGEN Networks Corp 
    
April 16, 201215, 2013By:/s/ Neil Chan 
  Neil Chan 
  Director, Chief Executive Officer 
    
 
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
 
 Company Name 
    
April 16, 201215, 2013By:/s/ Richard Freeman 
  Richard Freeman 
  Director, Chief Operating Officer