x☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Nevada		20-5879021
(State or ~~other jurisdiction~~Other Jurisdiction of incorporation or organization)		(~~IRS~~I.R.S. Employer Identification No.)

~~1075 St. David Street, Victoria BC, Canada~~		~~V8S 4Y7~~
~~(Address of principal executive offices)~~		~~(Postal~~

~~(Former name, former address and former fiscal year, if changed since last report)~~

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.~~ x ~~YES~~ o NOdays: Yes ☒ No ☐

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). x ~~YES~~ o NOYes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated ~~filer~~filer:	¨	☐	Accelerated ~~filer~~filer:	¨☐
Non-accelerated ~~filer~~filer:	¨☐	Smaller reporting company:	☒
(Do not check if a smaller reporting company)		~~Smaller reporting company~~	x
			Emerging growth company	¨☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the ~~Exchange~~ Act)o ~~YES~~ x NO. Yes ☐ No ☒

~~APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS~~

Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. o ~~YES~~ o NO

~~Indicate the~~The number of ~~shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.~~

~~As of November 15, 2017, there were 1,174,408,155~~ shares of the registrant’s common stock ~~par value $0.001 per share, outstanding.~~issued and outstanding as of August 12, 2020 is 1,089,088,573.

The Company’s unaudited condensed consolidated interim financial statements for the ~~nine~~three and six month ~~period~~periods ended ~~September~~June 30, ~~2017~~2020 are included herewith.

September 30,

December 31,

2017

2016

Note

$

$

Assets

(unaudited)

Current Assets

Cash

74,129

38,680

Accounts and other receivables

3

226,286

156,538

Inventory

24,809

17,226

Prepaid expenses and deposits

28,663

15,309

Restricted cash

25,000

15,000

Assets from discontinued operations

15

5,894

10,984

Total Current Assets

384,781

253,737

Equipment

4

4,123

7,137

Goodwill

505,508

505,508

Total Assets

894,412

766,382

Liabilities and Shareholders’ Deficit

Current Liabilities

Accounts payable and accrued liabilities

5,6,9

705,270

581,852

Current portion of deferred revenue

214,410

239,168

Notes payable

6

8,720

79,998

Convertible debentures, net of unamortized discount of $160,035 and $nil, respectively

7

51,215

-

Derivative liabilities

8

254,878

27,930

Liabilities from discontinued operations

15

159,587

161,024

Total Current Liabilities

1,394,080

1,089,972

Convertible debentures, net of unamortized discount of $26,420 and $nil, respectively

7

23,580

-

Deferred revenue

181,980

73,985

Total Liabilities

1,599,640

1,163,957

Nature and Continuance of Operations (Note 1)

Subsequent Events (Note 16)

Stockholders’ Deficit

Common stock: Authorized - 375,000,000 shares with $0.001 par value Issued and outstanding – 36,836,926 and 32,389,585 shares, respectively

36,837

32,390

Share subscriptions received

-

25,000

Additional paid-in capital

8,637,329

8,109,286

Deferred compensation

-

(19,592 )
Accumulated other comprehensive loss

(66,915 )

(32,349 )
Deficit

(9,312,479 )

(8,512,310 )
Total Stockholders’ Deficit

(705,228 )

(397,575 )
Total Liabilities and Stockholders’ Deficit

894,412

766,382

~~Approved on Behalf of the Board~~

~~“Neil Chan”~~		~~Director~~

~~“Robert Nealon”~~		~~Director~~

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

Condensed Consolidated Interim Statements of Operations ~~and Comprehensive Loss~~

Three Months Ended

Nine Months Ended

September 30,

September 30,

2017

2016

2017

2016

Note

$

$

$

$

Revenue

Sales, hardware

246,189

365,083

761,394

692,446

Sales, services

74,090

11,393

280,395

136,124

Total Revenue

320,279

376,476

1,041,789

828,570

Cost of goods sold

202,268

289,679

633,472

523,705

Gross Profit

118,011

86,797

408,317

304,865

Expenses

Advertising

45,386

28,678

122,827

50,869

Consulting and business development fees

9

67,721

32,297

117,607

127,294

Depreciation

937

2,556

3,014

7,727

Foreign exchange loss

10,928

-

11,110

-

General and administrative

41,064

36,146

122,756

122,888

Management fees

9

101,643

(5,894 )

82,583

67,324

Professional fees

(51,656 )

-

29,844

-

Salaries

145,146

80,565

386,274

254,544

Stock-based compensation

11,12

(13,663 )

4,500

137,635

24,590

Travel

20,077

-

66,701

-

Total Expenses

367,583

178,848

1,080,351

655,236

Loss Before Other Income (Expense)

(249,572 )

(92,051 )

(672,034 )

(350,371 )
Other Income (Expense)

Accretion of discounts on convertible debentures

(39,439 )

(1,900 )

(52,322 )

(5,636 )
Change in fair value of derivative liabilities

8

1,796

9,700

579

14,413

Interest expense

(7,809 )

(18,216 )

(10,710 )

(49,181 )
Total Other Income (Expense)

(45,452 )

(10,416 )

(62,453 )

(40,404 )
Net Loss from continuing operations

(295,024 )

(102,467 )

(734,487 )

(390,775 )

Income (loss) from discontinuing operations

32,005

(47,223 )

(65,682 )

(160,392 )

Net loss

(263,019 )

(149,690 )

(800,169 )

(551,167 )

Other Comprehensive Loss

Foreign currency translation loss

(3,094 )

(7,262 )

(34,566 )

(20,796 )
Comprehensive Loss for the Period

(266,113 )

(156,952 )

(834,735 )

(571,963 )

Basic and diluted loss per common share from:

Continuing operations

(0.01 )

(0.01
)

(0.02 )

(0.01 )
Discontinuing operations

-

-

-

(0.01 )

(0.01 )

(0.01 )

(0.02 )

(0.02 )

Weighted Average Number of Common Shares Outstanding

34,750,404

29,807,935

34,241,351

29,197,519

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

Condensed Consolidated ~~Interim~~ Statements of ~~Stockholders'~~Redeemable Convertible Preferred Stock and Stockholders’ Deficit

Accumulated

Total

Share

Additional

Other

Stockholders’

Common Stock

Subscriptions

Paid-in

Deferred

Comprehensive

Equity

Shares

Amount

Received

Capital

Compensation

Loss

Deficit

(Deficit)

#

$

$

$

$

$

$

$

Balance, December 31, 2015

28,215,349

28,215

25,000

7,586,514

(54,570 )

(11,871 )

(7,675,552 )

(102,264 )

Stock-based compensation

-

-

-

20,090

-

-

-

20,090

Shares issued for cash

1,150,740

1,151

-

133,371

-

-

-

134,522

Shares issued for services

386,290

386

-

64,164

-

-

-

64,550

Shares issued for exercise of options

55,556

56

-

4,944

-

-

-

5,000

Deferred compensation charged to operations

-

-

-

-

26,234

-

-

26,234

Foreign currency translation loss

-

-

-

-

-

(20,796 )

-

(20,796 )
Net loss for the period

-

-

-

-

-

-

(551,167 )

(551,167 )

Balance, September 30, 2016

29,807,935

29,808

25,000

7,809,083

(28,336 )

(32,667 )

(8,226,719 )

(423,831 )

Balance, December 31, 2016

32,389,585

32,390

25,000

8,109,286

(19,592 )

(32,349 )

(8,512,310 )

(397,575 )

Stock-based compensation

-

-

-

137,635

-

-

-

137,635

Units issued for cash

2,369,281

2,369

(25,000 )

222,631

-

-

-

200,000

Shares issued for cash

1,875,000

1,875

-

148,125

-

-

-

150,000

Shares issued for services

203,060

203

-

19,652

-

-

-

19,855

Deferred compensation charged to operations

-

-

-

-

19,592

-

-

19,592

Foreign currency translation loss

-

-

-

-

-

(34,566 )

-

(34,566 )
Net loss for the period

-

-

-

-

-

-

(800,169 )

(800,169 )

Balance, September 30, 2017

36,836,926

36,837

-

8,637,329

-

(66,915 )

(9,312,479 )

(705,228 )

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

	Nine Months Ended
	September 30,
	2017			2016			Six Months Ended June 30,
	$			$			2020			2019
Cash Flows from Operating Activities
Net loss from continuing operations for the period		(734,487	)		(390,775	)
Net loss							$	(2,482,469	)	$	(328,123	)
Adjustments to reconcile net loss to net cash used in operating activities:
Accretion of discounts on convertible debentures		52,322			5,636			110,064			120,000
Change in fair value of derivative liabilities		(579	)		(14,413	)		1,347,701			(177,877	)
Depreciation		3,014			7,727			-			-
Accrued interest convertible debenture		-			4,680
Loss on extinguishment of debt								273,518			-
Shares issued for services		39,447			64,550			-			-
Stock-based compensation		137,635			24,590			292,449			34,500

Changes in operating assets and liabilities:
Accounts and other receivables		(69,748	)		(161,377	)		14,628			(2,695	)
Inventory		(7,583	)		(104	)		(4,041	)		33,460
Prepaid expenses and deposits		(13,354	)		-			-			4,484
Restricted cash		(10,000	)		-
Accounts payable and accrued liabilities		123,418			263,774			165,488			162,825
Deferred revenue		83,237			166,255			(72,787	)		(115,246	)
Net Cash Used in Continued Operating Activities		(396,678	)		(29,457	)

Net Cash Used in Operating Activities								(355,449	)		(268,672	)
Cash Flows from Financing Activities
Proceeds from notes payable		8,000			-
Repayment of notes payable		(80,678	)		(8,846	)
Proceeds from convertible debentures		250,000			54,087
Repayment of notes payable and convertible debentures								(50,000	)		-
Proceeds from issuance of common stock		350,000			134,522			151,250			60,000
Proceeds from share subscription received		-			35,277
Proceeds from options exercised		-			5,000
Proceeds from notes payable and convertible debentures, net								129,199			40,000
Proceeds from issuance of preferred stock, net								125,000			125,000
Net Cash Provided by Financing Activities		527,322			220,040			355,449			225,000

Cash Flows from Discontinued Operations
Net cash used in operating activities		(62,029	)		(160,392	)
Net Cash Used In Discontinued Operations		(62,029	)		(160,392	)

Effect of Foreign Exchange Rate Changes on Cash		(33,166	)		(11,789	)

Change in Cash		35,449			18,402			-			(43,672	)
Cash, Beginning of Period		38,680			33,590			-			56,823
Cash, End of Period		74,129			51,992		$	-		$	13,151

Supplemental Disclosures:
Interest paid		7,000			-
Income taxes paid		-			-

Non-Cash Investing and Financing Activities
Discount on convertible debt for derivative liabilities		227,527			-
Non-cash Investing and Financing Activities:
Conversion of notes payable and accrued interest:
Fair value of common shares issued							$	1,533,960		$	-
Derecognition of notes payable and accrued interest							$	(321,776	)	$	-
Derecognition of unamortized discount							$	199,710		$	-
Derecognition of derivative liabilities							$	(1,330,331	)	$	-
Conversion of preferred stock
Fair value of common shares issued							$	340,132		$	-
Derecognition of preferred stock							$	(208,839	)	$	-
Derecognition of unamortized discount							$	177,313		$	-
Derecognition of derivative liabilities							$	(182,687	)	$	-
Deemed dividend							$	(314,437	)	$	-
Discount related to issuance of preferred stock							$	131,962		$	125,000
Deemed dividends on preferred stock (excluding conversions)							$	(65,286	)	$	(169,709	)
Cashless exercise of warrants							$	62,579		$	-
Original issue discount on convertible debt							$	-		$	8,500
Increase in value of warrants							$	370,726		$	-
Conversion of accrued liabilities with issuance of common stock							$	67,073		$	-
Reclassification of security deposit to accounts payable							$	4,013		$	-

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

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 September 15, 2008, the Company became a reporting issuer in British Columbia, Canada. On May 26, 2009, the Company changed its name to IGEN Networks Corp. On March 25, 2015, the Company was listed on the Canadian Securities Exchange (CSE) under the trading symbol IGN and the Company became a reporting Venture Issuer in British Columbia and Ontario, Canada.

The Company’s principal business is the development and marketing of software services for the automotive industry. The Company works with wireless carriers, hardware suppliers and software developers to provide direct and secure access to information on the vehicle and the driver’s behavior. The software services are delivered from the AWS Cloud to the consumer and their families over the wireless networks and accessed from any mobile or desktop device. The software services are marketed to automotive dealers, financial institutions, and direct-to-consumer through various commercial and consumer brands.

The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has experienced recurring losses from operations, has negative operating cash flows since inception, has a working capital deficit of $1,686,400 and an accumulated deficit of $14,822,302 as of June 30, 2020, and is dependent on its ability to raise capital from stockholders or other sources to sustain operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Ultimately, the Company plans to achieve profitable operations through the increase in revenue base and successfully grow its operations organically or through acquisitions. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

These consolidated financial statements and related notes include the records of the Company and the Company’s wholly-owned subsidiary, Nimbo Tracking LLC which is formed in the USA.

The condensed consolidated balance sheet as of December 31, 2019, which has been derived from audited consolidated financial statements, and these unaudited condensed consolidated financial statements have been prepared by management in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”), and include all assets, liabilities, revenues and expenses of the Company and its wholly-owned subsidiary. All material intercompany transactions and balances have been eliminated. These interim unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2019. Certain information required by U.S. GAAP has been condensed or omitted in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). The results for the three and six month periods ended June 30, 2020 are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2020, or for any future period.

The preparation of these condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to allowance for doubtful accounts, valuation of inventory, the useful life and recoverability of equipment, impairment of goodwill, valuation of notes payable and convertible debentures, fair value of stock-based compensation and derivative liabilities, and deferred income tax asset valuation allowances. 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.

The Company considers all highly liquid instruments purchased with an original maturity of three months or less at the time of acquisition to be cash equivalents.

Accounts receivable are recognized and carried at the original invoice amount less an allowance for expected uncollectible amounts. Inherent in the assessment of the allowance for doubtful accounts are certain judgments and estimates including, among others, the customer’s willingness or ability to pay, the Company’s compliance with customer invoicing requirements, the effect of general economic conditions and the ongoing relationship with the customer. Accounts with outstanding balances longer than the payment terms are considered past due. We do not charge interest on past due balances. The Company writes off trade receivables when all reasonable collection efforts have been exhausted. Bad debt expense is reflected as a component of general and administrative expenses in the consolidated statements of operations. As of June 30, 2020 and December 31, 2019, the allowance for doubtful accounts was approximately $36,000 and $21,000, respectively.

Inventory consists of vehicle tracking and recovery devices and is comprised entirely of finished goods that can be resold. Inventory is stated at the lower of cost or net realizable value. Cost is determined on a first-in, first-out (FIFO) basis. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and selling costs. There was no provision for inventory impairment recorded as of June 30, 2020 and December 31, 2019.

Office equipment, computer equipment, and software are recorded at cost. Depreciation is provided annually at rates and methods over their estimated useful lives. Management reviews the estimates of useful lives of the assets every year and adjusts them on prospective basis, if needed. All equipment was fully depreciated as of December 31, 2019. For purposes of computing depreciation, the method of depreciating equipment is as follows:

Goodwill represents the excess of the acquisition price over the fair value of identifiable net assets acquired. Goodwill is allocated at the date of the business combination. Goodwill is not amortized, but is tested for impairment annually on December 31 of each year or more frequently if events or changes in circumstances indicate the asset may be impaired. These events and circumstances may include a significant change in legal factors or in the business climate, a significant decline in the Company’s share price, an adverse action of assessment by a regulator, unanticipated competition, a loss of key personnel, significant disposal activity and the testing of recoverability for a significant asset group.

Goodwill impairment is measured as the amount by which a reporting unit’s carrying value exceeds its fair value.

The Company has only one reporting unit. Therefore, all of the Company’s goodwill relates to that reporting unit, and at June 30, 2020 and December 31, 2019, the carrying value for that reporting unit is negative.

The Company reviews long-lived assets, such as equipment, 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.

In accordance with Financial Accounting Standard Board (“FASB”) Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures,” the Company is to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

See Note 4 for fair value measurement information related to the Company’s derivative liabilities.

The fair values of cash and cash equivalents, accounts and other receivables, restricted cash, and 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 fair value of cash and cash equivalents is determined based on “Level 1” inputs and the fair value of derivative liabilities is determined based on “Level 3” inputs. The recorded values of notes payable, approximate their current fair values because of their nature and respective maturity dates or durations. 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 instruments that potentially subject the Company to concentrations of credit risk consists of cash. The Company places its cash and cash equivalents in what it believes to be credit-worthy financial institutions.

We recognize revenue in accordance with ASC 606, “Revenue from Contracts with Customers”, using the five-step model, including (1) identify the contract with the customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue in accordance with U.S. GAAP. Title and risk of loss generally pass to our customers upon delivery, as we have insurance for lost shipments. In limited circumstances where either title or risk of loss pass upon destination or acceptance or when collection is not reasonably assured, we defer revenue recognition until such events occur. We derive revenues from two primary sources: products and services. Product revenue includes the shipment of product according to the agreement with our customers and only represents a small percentage of our revenues, less than 5%. Services include vehicle tracking services and customer support (technical support), installations and consulting. A contract may include both product and services. For these contracts, the Company accounts for individual performance obligations separately if they are distinct. Performance obligations include, but are not limited to, pass-thru harnesses and vehicle tracking services. Almost all of our revenues are derived from customers located in United States of America in the auto industry. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. Standalone selling prices are typically estimated based on observable transactions when these services are not sold on a standalone basis. At contract inception, an assessment of the goods and services promised in the contracts with customers is performed and a performance obligation is identified for each distinct promise to transfer to the customer a good or service (or bundle of goods or services). To identify the performance obligations, the Company considers all of the goods or services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices. Revenue is recognized when our performance obligation has been met. The Company considers control to have transferred upon delivery because the Company has a present right to payment at that time, the Company has transferred use of the asset, and the customer is able to direct the use of, and obtain substantially all of the remaining benefits from, the asset. For arrangements under which the Company provides vehicle tracking services, the Company satisfies its performance obligations as those services are performed whereby the customer simultaneously receives and consumes the benefits of such services under the agreement. Revenues are recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities.

The Company provides product warranties with varying lengths of time and terms. The product warranties are considered to be assurance-type in nature and do not cover anything beyond ensuring that the product is functioning as intended. Based on the guidance in ASC 606, assurance-type warranties do not represent separate performance obligations. The Company has historically experienced a low rate of product returns under the warranty program.

Management assesses the business environment, customers’ financial condition, historical collection experience, accounts receivable aging, and customer disputes to determine whether collectability is reasonably assured. If collectability is not reasonably assured at the time of sale, the Company does not recognize revenue until collection occurs.

Revenue relating to the sale of service fees on its vehicle tracking and recovery services is recognized over the life of the contact. The service renewal fees are offered in terms ranging from 12 to 36 months and are generally payable upon delivery of the vehicle tracking devices or in full upon renewal.

Deferred revenues are recorded net of contract assets and when cash payments are received from customers in advance of the Company’s performance. Deferred revenues totaled $261,447 and $405,553 as of June 30, 2020 and December 31, 2019, respectively. During the six months ended June 30, 2020, the Company recorded additions to deferred revenues of $60,194 and recognized total revenues of $204,300 through the amortization of deferred revenues. During the six months ended June 30, 2020, the Company recognized revenues of $187,766 related to deferred revenues outstanding as of December 31, 2019 as the services were performed.

Any revenue that has been deferred and is expected to be recognized beyond one year is classified as deferred revenue, net of current portion.

Deferred revenues are recorded net of contract assets. Contract assets represent the costs of the underlying hardware to enable the Company to perform on its contracts with customers. As of June 30, 2020 and December 31, 2019, the contract asset balance totaled $71,769 and $143,088, respectively, which have been recorded as reductions in deferred revenues in the accompanying condensed consolidated balance sheets.

Financing costs and debt discounts are recorded net of notes payable and convertible debentures in the consolidated balance sheets. Amortization of financing costs and the debt discounts is calculated using the effective interest method over the term of the debt and is recorded as interest expense in the consolidated statement of operations.

Deferred income taxes are provided on the asset and liability method whereby deferred income 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 bases. Deferred income 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 income tax assets will not be realized. Deferred income tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

The Company accounts for stock-based payments in accordance with stock-based payment accounting guidance which requires all stock-based payments to be recognized based upon their fair values. The fair value of stock-based awards is estimated at the grant date using the Black-Scholes Option Pricing Model and the portion that is ultimately expected to vest is recognized as compensation cost over the requisite service period. The determination of fair value using the Black-Scholes Option Pricing Model is affected by the Company’s stock price as well as assumptions regarding a number of complex and subjective variables, including expected stock price volatility, risk-free interest rate, expected dividends and projected employee stock option exercise behaviors. The Company accounts for forfeitures of unvested awards as they occur.

The Company classifies as equity any contracts that require physical settlement or net-share settlement or provide us a choice of net cash settlement or settlement in our own shares (physical settlement or net-share settlement) provided that such contracts are indexed to our own stock as defined in ASC Topic 815-40 "Contracts in Entity's Own Equity." The Company classifies as assets or liabilities any contracts that require net-cash settlement including a requirement to net cash settle the contract if an event occurs and if that event is outside our control or give the counterparty a choice of net-cash settlement or settlement in shares. The Company assesses classification of its free-standing derivatives at each reporting date to determine whether a change in classification between assets and liabilities is required.

Basic earnings (loss) 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 and warrants, using the treasury stock method, and convertible debentures, using the if-converted method. In computing diluted earnings (loss) 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 (loss) per share exclude all potentially issuable 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. As of June 30, 2020 and 2019, the Company has 400,697,063 and 8,089,673 potentially dilutive shares outstanding, respectively.

In August 2020, the FASB issued ASU 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815 – 40)” (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The ASU is part of the FASB’s simplification initiative, which aims to reduce unnecessary complexity in U.S. GAAP. The ASU’s amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. The Company is currently evaluating the impact ASU 2020-06 will have on its financial statements.

On May 17, 2019, the Company entered into a Convertible Promissory Note (“Promissory Note”) with Crown Bridge Partners, LLC (the “Holder”) for a total principal amount of up to $150,000 with cash proceeds of up to $124,500, resulting in an original issue discount of up to $25,500. The Promissory Note bears interest at 7% per annum (with the understanding that the first 12 months of interest of each tranche will be guaranteed). The maturity date is 18 months from the effective date of each payment.

The Conversion Price, as defined in the agreement, is the lesser of (i) the lowest Trading Price (as defined below) during the previous 25 trading day period ending on the latest complete trading day prior to the date of this Promissory Note or (ii) the Variable Conversion Price (as defined below). The Variable Conversion Price means the lowest one Trading Price (as defined below) for the common stock during the 25 Trading Day period ending on the last complete Trading Day prior to the Conversion Date. Trading Price means, for any security as of any date, the lesser of the (i) lowest traded price and (ii) lowest closing bid price. Based on the Company’s examination of the conversion feature and the relative accounting guidance, the Company has determined that the conversion feature should be treated as a derivative liability for accounting purposes.

Additionally, if at any time while the Promissory Note is outstanding, the Conversion Price is equal to or lower than $0.025, then an additional $10,000 will be automatically added to the principal balance of each tranche funded under the Note. During the quarter ended June 30, 2019, $10,000 was added to the principal balance for the first tranche.

In connection with the Promissory Note, the Company also entered into a Securities Purchase Agreement with the Holder which states that the Company will also issue to the Holder a warrant to purchase an amount of shares of its common stock equal to 50% of the face value of each respective tranche divided by $0.10 (for illustrative purposes, the first tranche face value is equal to $50,000, which resulted in the issuance of a warrant to purchase 250,000 shares of the Company’s common stock).

Per the terms of the Common Stock Purchase Warrant agreement, on May 17, 2019, the Company issued a warrant to purchase 250,000 shares of common stock with an Exercise Price of $0.10 subject to adjustment (standard anti-dilution features). The agreement contains a down-round provision that automatically resets the exercise price of the warrant to a new exercise price that is equal to the per share price of common stock subsequently issued (including conversions of debt and preferred stock). Upon the lowing of the exercise price, the number of warrants will be increased such that the total proceeds upon exercise is the same amount (see Note 7). If the Market Price of one shares of common stock is greater than the Exercise Price, the Holder may elect to receive Warrant Shares pursuant to cashless exercise, in lieu of cash exercise, per a defined formula in the agreement.

During the quarter ended June 30, 2019, the Company received $40,000 in net cash proceeds, after paying $1,500 of direct funding costs. The related principal amount due for the first tranche (“First Tranche”) was $50,000. For the first tranche, using the Binomial Lattice Model, the Company computed the estimated fair value of the embedded conversion feature to be $100,000 and recorded a related derivative liability. Related to the derivative liability, the bonus interest, and the direct financing costs, the Company recorded a full debt discount of $60,000 for the Promissory Note, which will be amortized to interest expense over the term of the Promissory Note using the effective interest method and an additional $50,000 directly to interest expense.

On December 9, 2019, the Holder converted a portion of the Promissory Note into shares of common stock. The Holder received 300,000 shares of common stock for the conversion of principal, accrued interest, and fees totaling $7,165.

During the quarter ended September 30, 2019, the Company received an aggregate of $213,250 in net cash proceeds, after paying $6,750 of direct funding costs, from three note holders under the same terms as the Promissory Note. The related principal amount due for the convertible debt instruments entered into during the quarter ended September 30, 2019 was $255,000. Using the Binomial Lattice Model, the Company computed the estimated fair value of the embedded conversion features to be approximately $354,000 and recorded the related derivative liabilities. Related to the derivative liabilities, the bonus interest, and the direct financing costs, the Company recorded full debt discounts totaling approximately $255,000 for the notes which will be amortized to interest expense over the term of the notes using the effective interest method and an additional approximately $106,000 directly to interest expense. As the Conversion Price fell below $0.025 per share, during the quarter ended September 30, 2019, $10,000 was added to the principal balance on one of the notes (per the terms of that note).

Related to the notes issued during the quarter ended September 30, 2019, the Company issued warrants to purchase a total of 525,000 shares of common stock with an Exercise Price of $0.10 subject to adjustment (standard anti-dilution features). If the Market Price of one shares of common stock is greater than the Exercise Price, the Holder may elect to receive Warrant Shares pursuant to cashless exercise, in lieu of cash exercise, per a defined formula in the agreement.

On October 1, 2019, the Company received $37,500 in net cash proceeds from a note holder under the same terms as the Promissory Note. The related principal amount due for the convertible debt instrument was $44,000. In connection with the note, the Company issued 100,000 shares of common stock, which were valued at the market price on the date of issuance of $0.05 per share. Using the Binomial Lattice Model, the Company computed the estimated fair value of the embedded conversion feature to be approximately $29,000 and recorded a related derivative liability. Related to the derivative liability, the shares issued, the bonus interest, and the direct financing costs, the Company recorded a debt discount totaling $41,000 for the note, which will be amortized to interest expense over the term of the note using the effective interest method.

On June 19, 2020, the Company received $19,250 in net cash proceeds from a note holder under the same terms as the Promissory Note. The related principal amount due for the convertible debt instrument was $25,000. Using the Binomial Lattice Model, the Company computed the estimated fair value of the embedded conversion feature to be approximately $142,000 and recorded a related derivative liability for that amount and a charge to interest expense of approximately $122,000. Related to the derivative liability, the shares issued, the bonus interest, and the direct financing costs, the Company recorded a debt discount totaling $25,000 for the note, which will be amortized to interest expense over the term of the note using the effective interest method.

During the six months ended June 30, 2020, the holders of the convertible notes converted a total of $321,776 of principal, interest and fees for a total of 620,057,793 shares of common stock. Related to these conversions during the quarter ended March 31, 2020, the Company recorded a reduction of the associated derivative liability for the conversion features of $1,138,404 and a reduction of the debt discount of $199,710 as components of the loss on settlement of debt. During the six months ended June 30, 2020, the Company recorded $110,064 of interest expense related to the amortization of the debt discounts.

During the three months ended March 31, 2020 the Company borrowed $50,000 from a shareholder under the terms of a note payable bearing interest of 8% per annum. The note was repaid with interest (totaling $922) during the three months ended March 31, 2020.

On May 4, 2020, the Company entered into a PPP Loan with a principal amount of $59,949 through a financial institution under the PPP administered by the SBA and established as part of the CARES Act. The PPP Loan bears interest at 1.0% per annum and matures on May 4, 2022 with the first six months of interest and principal payments deferred. The amount borrowed under the PPP Loan is guaranteed by the SBA and is eligible for forgiveness in an amount equal to the sum of the eligible costs, including payroll, benefits, rent and utilities, incurred by the Company during the 24-week period beginning on the date the Company received the procceds. The PPP Loan contains customary events of default, and the occurrence of an event of default may result in a claim for the immediate repayment of all amounts outstanding under the PPP Loan.

4.Derivative Liabilities

During the six months ended June 30, 2020 and during the year ended December 31, 2019, the Company had outstanding convertible debentures with variable exercise prices based on market rates (see Note 3). During the six month ended Jun 30, 2020 and during year ended December 31, 2019, the Company also issued series A preferred stock with variable exercise prices based on market rates (see Note 6). The Company records the fair value of the conversion features with variable exercise prices based on future market rates in accordance with ASC 815. The fair value of the derivative liabilities is revalued on each balance sheet date with corresponding gains and losses recorded in the consolidated statements of operations. The Company uses a multi-nominal lattice model to fair value the derivative liabilities. The following inputs and assumptions were used to value the conversion features outstanding during the six months ended June 30, 2020, assuming no expected dividends:

~~(a)~~

~~Basic of Presentation and Consolidation~~

June 30,

2020

Expected volatility

~~These condensed consolidated interim financial statements and related notes include the records of the Company and the following wholly-owned subsidiaries:~~

	~~IGEN Business Solutions Inc.~~		~~Incorporated in Canada (Refer to Note 15)~~
	~~Nimbo, LLC~~		~~Incorporated in USA~~

All inter-company transactions and balances have been eliminated. These condensed consolidated interim financial statements are presented in accordance with accounting principles generally accepted in the United States, are expressed in U.S. 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.

2.	~~Summary of Significant Accounting Policies~~ ~~(continued)~~
		271 – 322	%
Risk free interest rate	~~(b)~~	~~Reclassifications~~
		0.3 – 1.41	%
Expected life (in years)		~~Certain reclassifications have been made to the prior period figures to conform to the current period’s presentation.~~

	~~(c)~~	~~Use of Estimates~~

		The preparation of these condensed consolidated interim 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 condensed consolidated interim financial statements, and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to allowance for doubtful accounts, valuation of inventory, the useful lives and recoverability of equipment, impairment of goodwill, valuation of notes payable, fair value of derivative liabilities and convertible debentures, fair value of stock-based compensation, and deferred income tax asset valuation allowances. 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.

	~~(d)~~	~~Recent Accounting Pronouncements~~

		A number of new standards, and amendments to standards and interpretations, are not yet effective for the period ended September 30, 2017, and have not been applied in preparing these condensed consolidated interim financial statements.

		~~In September 2017, the FASB has issued Accounting Standards Update (ASU) No. 2017-13,~~ “Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments.” The amendments in ASU No. 2017-13 amends the early adoption date option for certain companies related to the adoption of ASU No. 2014-09 and ASU No. 2016-02. Both of the below entities may still adopt using the public company adoption guidance in the related ASUs, as amended. The effective date is the same as the effective date and transition requirements for the amendments for ASU 2014-09 and ASU 2016-02.

		~~In January 2017, the FASB issued Accounting Standards Update (“ASU”) 2017-04,~~ ~~“Intangibles~~0.5 – ~~Goodwill and Other”~~ (Topic 350). ASU 2017-04 simplifies the subsequent measurement of goodwill by removing the second step of the two-step impairment test. The amendment requires an entity to perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value but the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The amendment should be applied on a prospective basis and is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years.

		~~In November 2016, the FASB issued ASU No. 2016-18,~~ ~~“Statement of Cash Flows~~” (Topic 230), which update the guidance as to how restricted cash should be presented and classified. The updates are intended to reduce diversity in practice. The amendments are effective for fiscal years beginning after December 15, 2017, including interim periods within those annual periods, with early adoption permitted.

2.	~~Summary of Significant Accounting Policies~~ ~~(continued)~~

	~~(d)~~	~~Recent Accounting Pronouncements (continued)~~

		~~In May 2014, the FASB issued ASU 2014-09,~~ ~~“Revenue from Contracts with Customers”~~ (Topic 606), which updated the guidance in ASC Topic 606, Revenue Recognition. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should identify the contract(s) with a customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract and recognize revenue when (or as) the entity satisfies a performance obligation. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. The amendments in this update deferred the effective date for implementation of ASU 2014-09 by one year and is now effective for annual reporting periods beginning after December 15, 2017. Early application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that period. In April 2016, FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, and in May 2016, ASU 2016-12, Revenues from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients both of which provide supplemental adoption guidance and clarification to ASU 2014-09. ASU 2016-10 and ASU 2016-12 must be adopted concurrently with the adoption of ASU 2014-09.

3.	~~Accounts and Other Receivables~~

	~~As at September 30, 2017 and December 31, 2016, accounts and other receivables consisted of the following:~~

September 30,

December 31,

2017

2016

$

$

Trade accounts receivable

218,520

149,825

GST and other receivables

9,384

8,331

Allowance for doubtful accounts

(1,618 )

(1,618 )

226,286

156,538

4.	~~Equipment~~

	~~As at September 30, 2017 and December 31, 2016, equipment consisted of the following:~~

Net Carrying Value

Accumulated

September 30,

December 31,

Cost

Depreciation

2017

2016

$

$

$

$

Computer equipment

44,166

40,530

3,636

6,189

Office equipment

1,603

1,116

487

573

Software

6,012

6,012

-

375

Total

51,781

47,658

4,123

7,137

~~Depreciation expense for the nine months ended September 30, 2017 and 2016 was $3,014 and $7,727, respectively.~~

5.	~~Accounts Payable and Accrued Liabilities~~

	~~As at September 30, 2017 and December 31, 2016, accounts payable and accrued liabilities consisted of the following:~~

September 30,

December 31,

2017

2016

$

$

Trade accounts payable

614,447

494,492

Accrued liabilities

19,200

36,056

Accrued interest payable

13,341

12,862

Payroll and commissions payable

57,035

32,063

Taxes payable

1,247

��

6,379

705,270

581,852

6.	~~Notes Payable~~

	~~(a)~~	On September 30, 2014, the Company issued a note payable for $95,000 in exchange for settlement of accounts payable. The note payable is unsecured, bears interest at 5% per annum, and is due on demand. The note payable was accounted for at amortized cost using the effective interest rate method with the effective interest rate of 14% per annum. The Company recorded a debt discount of $16,163 to the note payable, which is amortized over the term of the note, and a corresponding amount to additional paid-in capital at issuance. During the year ended December 31, 2016, the Company repaid $30,000 of the principal. During the nine months ended September 30, 2017, the Company repaid $65,000 of the principal and $7,000 of accrued interest. As at September 30, 2017, the carrying value of the note payable is $nil (December 31, 2016 – $65,000) and the Company recorded accrued interest of $3,711 (December 31, 2016 – $10,711), which has been included in accounts payable and accrued liabilities.

	~~(b)~~	As at September 30, 2017, the Company had a note payable of $5,702 (Cdn$7,075) (December 31, 2016 – $14,998 (Cdn$20,000)) owed to a director, which is unsecured, bears interest at 5% per annum, and is due on October 30, 2017. During the nine months ended September 30, 2017, the Company repaid $10,000 (Cdn$12,925) of the principal. As at September 30, 2017, the Company recorded accrued interest of $2,386 (Cdn$2,960) (December 31, 2016 – $1,767 (Cdn$2,373)), which has been included in accounts payable and accrued liabilities.

	~~(c)~~	On March 23, 2017, the Company entered into the loan agreement with a third party for a principal amount of $8,695, which includes a one-time loan fee of $695, which was charged to interest expense. The note payable is unsecured, non-interest bearing, and requires minimum payments of 10% of the loan every ninety days from the start date of March 26, 2017. 25% of all funds processed through the Company’s PayPal account will be used to pay off the loan until the loan is repaid in full. As at September 30, 2017, the balance of the note payable was $3,018.

7.	~~Convertible Debentures~~

	~~(a)~~	On March 30, 2017, the Company issued a convertible debenture to a third party in the principal amount of $50,000 which is unsecured, bears interest at 12% per annum, calculated monthly and not in advance, and is due on September 30, 2017. Subject to the approval of the holder of the convertible debenture, the Company may convert any or all of the principal and/or interest at any time following the six month anniversary of the issuance date of the convertible debenture (September 30, 2017) into common shares of the Company at a price per share equal to a 20% discount to the fair market value of the Company’s common stock.
	1.5

The following table presents the Company’s embedded conversion features of its convertible debt and preferred stock measured at fair value on a recurring basis as of June 30, 2020.

~~Notes to~~The following table provides a reconciliation of the ~~Condensed Consolidated Interim Financial Statements~~

~~(Unaudited - Expressed in U.S. dollars)~~beginning and ending balances for the Company’s derivative liabilities measured at fair value using Level 3 inputs:

7.	~~Convertible Debentures~~ ~~(continued)~~

		~~The Company analyzed the conversion option under ASC 815,~~ ~~“Derivative and Hedging”~~ (“ASC 815”), and determined that the conversion feature should be classified as a liability and recorded at fair value due to there being no explicit limit to the number of shares to be delivered upon settlement of the conversion option. The fair value of the derivative liability resulted in a discount to the convertible debenture of $32,127. The carrying value of the convertible debenture will be accreted over the term of the convertible debenture up to the value of $50,000. During the nine months ended September 30, 2017, $32,127 (2016 - $nil) of accretion expense had been recorded. As at September 30, 2017, the carrying value of the convertible debenture is $50,000 (December 31, 2016 - $nil).

	~~(b)~~	On May 1, 2017, the Company issued two convertible debentures for aggregate proceeds of $50,000 which are unsecured, bear interest at 12% per annum, calculated monthly and not in advance, and are due on May 1, 2019. Subject to the approval of the holder of the convertible debenture, the Company may convert any or all of the principal and/or interest at any time following the six month anniversary of the issuance date of the convertible debenture (November 1, 2017) into common shares of the Company at a price per share equal to a 20% discount to the fair market value of the Company’s common stock. The fair value of the derivative liabilities resulted in a discount to the convertible debentures of $45,400. The carrying value of the convertible debentures will be accreted over the term of the convertible debentures up to the value of $50,000. During the nine months ended September 30, 2017, $18,980 (2016 - $nil) of accretion expense had been recorded. As at September 30, 2017, the carrying value of the convertible debentures is $23,580 (December 31, 2016 - $nil).

	~~(c)~~	On August 7, 2017, the Company issued a convertible debenture to a third party in the principal amount of $161,250 with an original issuance discount of $11,250 and incurred $3,500 of financing costs to a third party, which is unsecured, bears interest at 5% per annum, and is due on August 7, 2018. The holder may convert any or all of the principal and/or interest at any time following the six month anniversary of the issuance date of the convertible debenture (February 7, 2018) into common shares of the Company at a price per share equal to 75% multiplied by the closing price of the Company’s common stock preceding the trading day that the Company receives a notice of conversion. The fair value of the derivative liabilities resulted in a discount to the convertible debentures of $161,250. The carrying value of the convertible debentures will be accreted over the term of the convertible debentures up to the value of $161,250. During the nine months ended September 30, 2017, $1,215 (2016 - $nil) of accretion expense had been recorded. As at September 30, 2017, the carrying value of the convertible debenture is $1,215 (December 31, 2016 - $nil).

8.	~~Derivative Liabilities~~

	The Company issues share purchase warrants as part of its private placements with exercise prices denominated in Canadian dollars, which differs from the Company’s functional currency of U.S. dollars and cannot be considered to be indexed to the Company’s own stock. The Company records the fair value of its share purchase warrants with a Cdn$ exercise price in accordance with ASC 815. The fair value of the derivative liabilities is revalued quarterly with corresponding gains and losses recorded in the consolidated statement of operations. As at September 30, 2017, the Company had derivative liabilities of $9,751 (December 31, 2016 - $27,930) relating to the share purchase warrants. The Company uses a multi-nominal lattice model to fair value the derivative liabilities. The following inputs and assumptions were used to value the share purchase warrants denominated in Canadian dollars during the nine months ended September 30, 2017 and 2016, assuming no expected dividends:

September 30,

September 30,

2017

2016

Expected volatility

196 %

88%-111%

Risk free interest rate

1.06 %

0.59%-0.73%

Expected life (in years)

0.5

1.37 – 4.25

8.	~~Derivative Liabilities~~ ~~(continued)~~

	During the nine months ended September 30, 2017, the Company issued four convertible debentures with variable exercise prices based on discount to market rates. The Company records the fair value of its convertible debentures with variable exercise prices based on future market rates in accordance with ASC 815. The fair value of the derivative liabilities is revalued on each balance sheet date with corresponding gains and losses recorded in the consolidated statement of operations. As at September 30, 2017, the Company had derivative liabilities of $245,127 (December 31, 2016 - $nil) relating to the fair value of the conversion feature of the convertible debentures. The Company uses a multi-nominal lattice model to fair value the derivative liabilities. The following inputs and assumptions were used to value the convertible debentures outstanding during the nine months ended September 30, 2017 and 2016, assuming no expected dividends:

September 30,

September 30,

2017

2016

Expected volatility

180 - 243%

-

Risk free interest rate

1.06 - 1.47%

-

Expected life (in years)

0.25 - 1.59

-

	~~During the nine months ended September 30, 2017, the Company recorded a gain on fair value of derivative liabilities of $579 (2016 – $14,413).~~

9.	~~Related Party Transactions~~

	(a)	During the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2020 and 2019, the Company incurred ~~$186,983 (2016 - $173,724)~~approximately $73,000 and $59,000, respectively, in management and consulting fees ~~to companies~~with an officer and an entity controlled by ~~three officers~~him. As of ~~the Company.~~

	~~(b)~~	~~As at September~~June 30, ~~2017,~~2020 and December 31, 2019, the Company owed ~~$128,500 (December 31, 2016 - $132,053)~~approximately $103,000 and $190,000, respectively, to directors and officers ~~of the Company~~ and ~~companies~~a company controlled by ~~officers of the Company,~~a director, which is included in accounts payable and accrued liabilities. The amounts owed are unsecured, non-interest bearing, and due on demand.

~~10.~~	~~Common Stock~~

	~~Share transactions for the period ended September 30, 2017:~~

	~~(a)~~	On March 2, 2017, the Company issued 2,222,222 units at $0.09 per unit for proceeds of $200,000. Each unit consisted of one share of common stock and one share purchase warrant exercisable until March 2, 2019. The share purchase warrant is exercisable at $0.18 per share for the first year and $0.23 per share thereafter.

	~~(b)~~	On March 2, 2017, the Company issued 56,000 shares of common stock with a fair value of $5,640 for consulting services rendered by a company controlled by the Vice President of Finance of the Company. The fair value of common shares was determined based on the end of day trading price of the Company’s common stock on the date of issuance.

	~~(c)~~	On April 20, 2017, the Company issued 49,020 shares of common stock with a fair value of $5,392 for consulting services rendered. The fair value of common shares was determined based on the end of day trading price of the Company’s common stock on the date of issuance.

	~~(d)~~	On June 23, 2017, the Company issued 147,059 units at $0.17 per unit for proceeds of $25,000 which was received as at December 31, 2016. Each unit consisted of one common share and one share purchase warrant exercisable at $0.35 per share for a period of two years from their date of issuance.

	~~(e)~~	On July 1, 2017, the Company issued 49,020 shares of common stock with a fair value of $4,902 for consulting services rendered. The fair value of common shares was determined based on the end of day trading price of the Company’s common stock on the date of issuance.

~~10.~~	~~Common Stock~~ ~~(continued)~~

	~~(f)~~	~~On August 29, 2017, the Company issued 1,875,000 shares of common stock at $0.08 per share for proceeds of $150,000.~~

	~~(g)~~	On September 7, 2017, the Company issued 49,020 shares of common stock with a fair value of $3,922 for consulting services rendered. The fair value of common shares was determined based on the end of day trading price of the Company’s common stock on the date of issuance.

	~~(h)~~	During the year ended December 31, 2015, the Company issued 498,801 common shares with a fair value of $107,944 for services. Of this amount, $70,300 relates to services to be rendered, which was recorded as deferred compensation. The fair value of the common stock was determined based on the closing price of the Company’s common stock on the date of issuance. During the nine months ended September 30, 2017, the Company expensed $19,592 (2016 - $26,234) of the deferred compensation as consulting fees, which reflects the pro-rata portion of the services provided to July 24, 2017. The services have been fully earned as of September 30, 2017.

~~11.~~	~~Share Purchase Warrants~~

(b)	~~The following table summarizes the continuity schedule of the Company’s share purchase warrants:~~

Weighted

average

exercise

Number of

price

warrants

$

Balance, December 31, 2016

4,055,294

0.20

Issued

2,419,281

0.17

Expired

(997,166 )

0.26

Balance, September 30, 2017

5,477,409

0.19

~~As at September 30, 2017, the following share purchase warrants were outstanding:~~

Number of warrants

Exercise price

outstanding

$

Expiry date

357,143

0.14

October 12, 2017

980,392

0.15

December 2, 2017

294,118

0.35

December 11, 2017

588,235

0.15

December 13, 2017

588,240

Cdn$0.34

March 29, 2018

250,000

0.15

May 4, 2018

2,222,222

0.18

March 2, 2019

50,000

0.20

January 2, 2022

147,059

0.35

June 23, 2019

5,477,409

During the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2020 and 2019, the Company incurred approximately $11,000 and $53,000, respectively, in purchases of hardware from a vendor controlled by a director of the Company. As of June 30, 2020 and December 31, 2019, the amounts owed to this related-party vendor were approximately $25,000 and $45,000 respectively.

~~12.~~	~~Stock Options~~

	~~The following table summarizes the continuity schedule of the Company’s stock options:~~

The Company is authorized to issue 10,000,000 shares of preferred stock with a par value of $0.001 per share. The Company has designated 9,000,000 of these shares as Series A Convertible Preferred Stock.

Weighted

average

Aggregate

Number of

exercise
price

intrinsic
value

options

$

$

Balance, December 31, 2016

4,000,000

0.16

-

Granted

1,550,000

0.13

-

Expired

(625,000 )

0.14

-

Balance, September 30, 2017

4,925,000

0.15

750

On April 9, 2019 and separately on June 11, 2019, the Company entered into a Series A Preferred Stock Purchase Agreement with an investor. On April 9, 2019, the Company issued 86,000 shares for net proceeds of $75,000 (after deducting $3,000 of direct legal costs) and on June 11, 2019, the Company issued 58,300 shares for net proceeds of $50,000 (after $3,000 deduction of direct legal costs).

Outstanding

Exercisable

Weighted

Weighted

Weighted

Range of

average

average

average

exercise
prices

Number of

remaining contractual

exercise
price

Number of

exercise
price

$

shares

life (years)

$

shares

$

0.07

75,000

0.50

0.07

75,000

0.07

0.09

910,000

0.50

0.09

910,000

0.09

0.13

1,425,000

4.61

0.13

1,100,000

0.13

0.16

225,000

3.37

0.16

112,500

0.16

0.19

2,270,000

2.98

0.19

2,270,000

0.19

Cdn$0.25

20,000

2.98

Cdn$0.25

20,000

Cdn$0.25

4,925,000

2.97

0.15

4,487,500

0.15

On September 17, 2019, the Company entered into a Series A Preferred Stock Purchase Agreement with an investor. The Company issued 58,300 shares for net proceeds of $50,000 (after $3,000 deduction of direct legal costs).

On February 25, 2020, the Company entered into a Series A Preferred Stock Purchase Agreement with an investor. The Company issued 47,300 shares for proceeds of $43,000.

During the quarter ended June 30, 2020, the Company entered into two Series A Preferred Stock Purchase Agreements with an investor. The Company issued 100,100 shares for proceeds of $91,000.

Based on the terms of the conversion feature, the Company could be required to issue an infinite number of shares of common stock. As such, the Company has determined the conversion feature to be a derivative liability under relevant accounting guidance. The Company estimated the fair value of the conversion feature using the Binomial Lattice Model on the date of issuance, on the date of each conversion notice, and remeasures the fair value at each reporting period. During 2019, on the issuance dates of the series A preferred stock, the combined estimated fair value of the conversion features were determined to be $207,000. In connection with the fair value of the derivative liability, the Company recorded a total discount to the series A preferred stock of $161,000 and also recorded a deemed distribution of $55,000. During the three months ended March 31, 2020, the Company issued 47,300 shares of series A preferred stock for proceeds of $40,000 and $3,000 of legal costs. Related to this issuance, the Company recorded a derivative liability and discount to the preferred stock of $41,392, which will be amortized to deemed dividends over the redemption period.

2017

2016

Expected volatility

132 %

200 %
Risk free interest rate

1.82 %

1.52 %
Expected life (in years)

4.8

5

During 2019, holders converted 42,000 shares of Series A Preferred stock into 2,977,226 shares of common stock at the Variable Conversion Price as defined above, resulting in a loss on extinguishment of $23,000.

During the six months ended June 30, 2020, the holder of the series A preferred stock converted 148,200 shares of series A preferred stock and accrued dividends into 199,206,989 shares of common stock. Related to these conversions during the six months ended June 30, 2020, the Company recorded a reduction of the associated derivative liability for the conversion features of $191,927 and a reduction of the preferred stock discount of $177,313 and $116,672 of deemed dividend.

~~IGEN NETWORKS CORP.~~On February 10, 2020, the Company designated and subsequently issued 1,000,000 shares of its newly formed Series B Super Voting Preferred Stock. Each share of Series B preferred stock has voting rights equal to 500 shares of common stock, is not entitled to receive dividends, is not convertible into shares of common stock. If the holder of the Series B preferred stock ceases to be a Board Member, the Company will repurchase any Series B preferred stock from the holder for a price of $0.001 per share. If the holder of the Series B preferred stock proposes to transfer any shares of Series B preferred stock, the Company will have 90 days to repurchase the shares for a price of $0.001 per share. The grant date fair value of the Series B preferred stock issued during the three months ended March 31, 2020 was $277,543 and was recorded to stock-based director compensation expense in the accompanying condensed consolidated statement of operations.

During the six months ended June 30, 2020, the Company sold a total of 26,750,000 shares of common stock for proceeds of $151,250.

During the six months ended June 30, 2020, the Company issued a total of 819,264,782 shares of common stock for the conversion of debt, accrued interest and fees, and the conversion of series A preferred stock and accrued dividends.

During the six months ended June 30, 2020, the Company issued 62,579,483 shares of common stock for the cashless exercise of warrants.

During the six months ended June 30, 2020, the Company issued 26,828,800 shares of common stock for the conversion of accrued expenses owed to the ~~Condensed Consolidated Interim Financial Statements~~

~~13.~~	~~Segmented Information~~

	The Company has one reportable segment: vehicle tracking and recovery solutions. The Company allocates resources to and assesses the performance of each reportable segment using information about its revenue and operating income (loss). The Company does not evaluate operating segments using discrete asset information.

	~~The following table summarizes the financial performance of the Company’s reportable segments:~~

Nine months ended

September 30,

2017

2016

$

$

Vehicle tracking and recovery solutions

1,041,789

828,570

Total consolidated net revenue

1,041,789

828,570

During the six months ended June 30, 2019, the Company sold a total of 1,500,000 shares of common stock for proceeds of $60,000.

	Segmentation by geographical location is not presented as all revenues are earned in U.S. Total assets by segment are not presented as that information is not used to allocate resources or assess performance at the segment level and is not reviewed by the Chief Operating Decision Maker of the Company.

~~14.~~	~~Concentration Risk~~

	The Company extends credit to customers on an unsecured basis in the normal course of business. The Company’s policy is to perform an analysis of the recoverability of its receivables at the end of each reporting period and to establish allowances where appropriate. The Company analyzes historical bad debts and contract losses, customer concentrations, and customer credit-worthiness when evaluating the adequacy of the allowances.

	~~During the nine months ended September 30, 2017, the Company had one (2016 - two) customers which accounted for 48% (2016 - 75%) of total revenues.~~

	~~As at September 30, 2017, the Company had one (December 31, 2016 - two) customers which accounted for 99% (December 31, 2016 - 90%) of accounts receivable.~~

~~15.~~	~~Discontinued Operations~~

	~~On November 7, 2017, the Company filed a Certification of Dissolution of IGEN Business Solutions Inc.~~

	~~The following table summarizes the carrying amounts of the assets and liabilities from discontinued operations;~~

7.Share Purchase Warrants

September 30,

December 31,

2017

2016

Assets from discontinued operations

$

$

Cash

(101 )

1,343

Accounts and other receivables

1,864

5,891

Prepaid expenses and deposits

3,947

3,502

Equipment

184

248

Total

5,894

10,984

The following table summarizes the continuity schedule of the Company’s share purchase warrants:

During the six months ended June 30, 2020, the Company recognized the triggering of the down-round provisions of certain warrants associated with the convertible debt instruments issued in 2019. As a result, reset the exercise price and increased the number of warrant shares accordingly. As of June 30, 2020, the new exercise price for the warrants is $0.000245 per share. Per the relevant accounting guidance, the Company valued the warrants before and after each triggering event and recorded the total increase in value as a deemed dividend to the warrant holder with an offset to additional paid in capital. For the six months ended June 30, 2020, the increase in value of the warrants due to the triggering events totaled $370,726 and was properly included in the Company’s earnings per share amounts on the accompanying statement of operations.

~~Notes to~~The following table summarizes the ~~Condensed Consolidated Interim Financial Statements~~

During the six months ended June 30, 2020, the Company did not issued any options to employees. During the six months ended June 30, 2020 and 2019, the Company recorded $15,000 and $15,000, respectively, of stock-based compensation expense related to stock option grants. As of June 30, 2020, the Company had no unrecognized compensation expense.

September 30,

December 31,

2017

2016

Liabilities from discontinued operations

$

$

Accounts payable and accrued liabilities

159,587

161,024

The following table shows the results of operations of IGEN Business Solutions Inc. for the three and nine months ended September 30, 2017 and 2016 which are included in the loss from discontinued operations:

Three months ended

Three months ended

Nine months ended

Nine months ended

September 30,

September 30,

September 30,

September 30,

2017

2016

2017

2016

Loss from discontinued operations

$

$

$

$

Consulting and business development fees

-

5,604

16,424

16,862

Depreciation

-

-

78

-

Foreign exchange gain

-

(4,568 )

(25,725 )

-

General and administrative

-

3,127

12,469

37,130

Management fees

-

38,500

49,728

106,400

Professional fees

(32,005 )

4,043

2,678

-

Travel

-

517

10,210

-

Other income

-

-

(180 )

-

(32,005 )

47,223

65,682

160,392

~~16.~~	~~Subsequent Events~~

	~~Subsequent to September 30, 2017, the Company issued shares of common stock as follows,~~

		·	~~1,428,571 shares of common stock for proceeds of $100,000;~~

		·	~~625,000 shares of common stock for conversion of debt and accrued interest of $50,000;~~

		·	~~174,020 shares of common stock for services rendered; and~~

		·	~~150,000 shares of common stock to an employee as a promotion bonus.~~

	~~On October 6, 2017, the Company granted 250,000 stock options to a consultant, which vest immediately, are exercisable at $0.08 per share, and expire on October 6, 2022.~~

The Company has one reportable segment: vehicle tracking and recovery solutions. The Company allocates resources to and assesses the performance of each reportable segment using information about its revenue and operating income (loss). The Company does not evaluate operating segments using discrete asset information.

Segmentation by geographical location is not presented as all revenues are earned in U.S. Total assets by segment are not presented as that information is not used to allocate resources or assess performance at the segment level and is not reviewed by the Chief Operating Decision Maker of the Company.

The Company extends credit to customers on an unsecured basis in the normal course of business. The Company’s policy is to perform an analysis of the recoverability of its receivables at the end of each reporting period and to establish allowances where appropriate. The Company analyzes historical bad debts and contract losses, customer concentrations, and customer credit-worthiness when evaluating the adequacy of the allowances.

During the six months ended June 30, 2020 and 2019, the Company had four and two customers which accounted for 82% and 67%, respectively, of total invoiced amounts, which are recorded as deferred revenues and amortized over the related service period to revenues.

As of June 30, 2020 and December 31, 2019, the Company had five and four customers, respectively, which accounted for 94% and 99%, respectively, of the gross accounts receivable balance.

On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency in response to a new strain of a coronavirus (the “COVID-19 outbreak”). In March 2020, the WHO classified the COVID-19 outbreak as a pandemic based on the rapid increase in exposure globally. The full impact of the COVID-19 outbreak continues to evolve as of the date of this report. Management is actively monitoring the global situation and its effects on the Company’s industry, financial condition, liquidity, and operations. Through June 30, 2020, COVID-19 has had an impact on the economy, the auto industry, and the Company’s 2020 revenue activity. Looking forward, it could continue to have a material adverse effect on the Company’s business, financial condition, liquidity, results of operations, and cash flows.

We have made certain indemnities and guarantees, under which we may be required to make payments to a guaranteed or indemnified party, in relation to certain transactions. We indemnify our officers and directors to the maximum extent permitted under the laws of the State of Nevada. The duration of these indemnities and guarantees varies and, in certain cases, is indefinite. These indemnities and guarantees do not provide for any limitation of the maximum potential future payments we could be obligated to make. Historically, we have not been obligated to make any payments for these obligations and no liabilities have been recorded for these indemnities and guarantees in the accompanying condensed consolidated balance sheets.

In the ordinary course of business, we may face various claims brought by third parties and may, from time to time, make claims or take legal actions to assert our rights, including intellectual property disputes, contractual disputes and other commercial disputes. Any of these claims could subject us to litigation. Management believes there are currently no claims that are likely to have a material effect on our consolidated financial position and results of operations.

The Company has filed a lawsuit against a distributor for breach of contract resulting in losses to the Company estimated to be in excess of $1,000,000. Management believes the currently scheduled trial date in October 2020 will be delayed into early 2021 as a result of the backlog of cases due to COVID-19.

During 2019, we discovered that an accounting error had been made related to the Company not properly recording contract assets as required under the relevant accounting guidance for revenue recognition. (As discussed in Note 1 “Revenue Recognition and Deferred Revenue”, contract assets are netted with deferred revenues for balance sheet presentation purposes.) It was determined that the error is immaterial to the 2018 consolidated financial statements; however, correcting the error related to 2018 in 2019 would materially misstate the condensed consolidated financial statements for the three and six months ended June 30, 2019. As such, we recorded the appropriate adjustment in 2018 and also computed the appropriate amounts related to June 30, 2019 and recorded such in the accompanying condensed consolidated financial statements. See below for a summary of the corrections made for this error:

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) provides information for the ~~nine-month period~~three and six month periods ended ~~September~~June 30, ~~2017.~~2020. This MD&A should be read together with our unaudited condensed consolidated interim financial statements and the accompanying notes for the ~~nine-month period~~three and six month periods ended ~~September~~June 30, ~~2017~~2019 (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.igen-networks.com, or on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.

Certain statements and information in this MD&A may not be based on historical facts and may 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 any 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”;

	-	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.

·☐

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

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 September 15, 2008, the Company became a reporting issuer in British Columbia, Canada. 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 March 25, 2015, the Company was listed on the Canadian Securities Exchange (CSE) under the trading symbol IGN and the Company became a reporting Venture Issuer in British Columbia and Ontario, Canada.

The Company’s principal business is to offer the consumer automotive and light-vehicle industries a broad-range of asset and driver based information that provide peace-of-mind to consumers and their families along with management and protection of the assets. IGEN’s cloud-based platform offer services that include stolen vehicle protection, real-time updates on asset health and driver behavior analytics.

During the ~~first, second, and third quarters~~six months of ~~2017,~~2020, the Company ~~continued~~continues to focus on initiatives to grow revenue, expand its customer base, and develop new ~~revenue streams. New car franchise dealerships continue~~channels through its wholly owned subsidiary Nimbo Tracking LLC and direct to ~~expand~~customer brands Medallion GPS PRO and CU TRAK. In addition to the Company’s Master Distributors and Sales Agents, all three brands are marketed through the T-Mobile IOT Factory platform and its respective Sales & Marketing Channels across the United States of America in ~~Southern California along with~~seven geographic markets and the ~~recent launch~~Territory of ~~IGEN’s direct-to-consumer brand “Medallion GPS”, targeted at the pre-owned automotive industry.~~Puerto Rico.

Notable highlights of the ~~9 months~~six-month period ended ~~September~~June 30, ~~2017~~2020 include the following Company achievements:

	·	~~On January 17, 2017, the Company announced a new nation-wide marketing initiative for increased exposure through Verizon Wireless’ B2B channels to automotive dealerships across the US.~~

	·	~~On March 7, 2017, the Company announced receipt of new orders for Nimbo’s pre-loaded automotive dealership product and services.~~

	·	~~On March 7, 2017, the Company announced expansion of Nimbo’s sales force including increased staffing in California and the opening of new sales office in Charlotte, NC.~~

	·	~~On April 24, 2017, the Company secured a contract with JStar Automotive Group contributing 400 pre-load activations per month.~~

	·	~~On May 22, 2017, the Company sponsored the 7~~^th ~~Annual Agent Summit, the largest gathering of sales representatives and dealer consultants for F&I products in the US.~~

	·	~~On June 15, 2017, the Company activated its first 1000 activations with Sprint.~~

	·	~~On September 26, 2017, the Company engages Darrow & Associates to Lead Strategic IR Programs~~

	·	~~On October 4, 2017, the Company announced the launch its Direct-to-Consumer brand “Medallion GPS” for the Pre-owned Automotive Aftermarket Industry.~~

	·	~~As of 3Q2017 subscriber base has reached 31,000 subscribers representing an annualized growth rate of 264% over the last 9 months.~~

The Company announced an exclusive and multi-year Nationwide Partnership Agreement with County Executives of America representing 700 Counties with over 450,000 self-insured commercial assets.

The Company launched Medallion GPS PRO for Light-Commercial Fleets with its Patent-Pending Digital Telematics Signature used for normalizing and scoring of driver behavior based on actuarial insurance metrics.

The Company signed a Sales & Marketing Agreement with Michigan Credit Union League Service Corporation (“MCULSC”) for the distribution of CU TRAK product line enabling Credit Unions to finance more members, improve loan performance, and to provide peace-of-mind for members and their families.

The Company launched the Next-Generation (NextGen) Platform for the Consumer Automotive Markets that included IGEN’s Patented “Digital Telematics Signature” for Universal Scoring of Driving Behavior.The NextGen Platform establishes a framework for the Company to expand its online presence along with expanding its customer base across the consumer automotive markets.

As of June 30, 2020, the Company’s current assets were $11,883, a decrease of 55% over the six-month period. Contributing to the net decrease to current assets was the reduction in sales during the period as a result of COVID-19 impacting Franchise and Pre-Owned Automotive Dealerships and the breach of terms of a distributor responsible for one of the Company’s house accounts. The Company expects to recover this loss business or receive monetary proceeds from settlement in 2020. The Company will focus its sales efforts on higher-margin opportunities across the T-Mobile/Sprint IoT Platform for all Company brands along with a focus on County Executive and Credit Union opportunities through recently announced partnerships.

Current liabilities increased $393,916, or 30%, over the three months, primarily due to the derivative liabilities that were established during 2019 and the six months ended June 30, 2020, and the amortization of debt issuance costs.

The Company finished the six-month period ended June 30, 2020, with a working capital deficiency of $1,686,400, a deterioration of $408,516 over the six months. Of the total working capital deficiency, $142,621 is short-term deferred revenue liabilities, net that will convert to revenues and cost of sales. During the six months ended June 30, 2020, the Company raised a total of $405,449 in cash proceeds from (1) the sale of shares of the Company’s common stock and series A preferred stock, (2) from the proceeds of a PPP loan and (3) a convertible note. The Company intends to improve its working capital position through ongoing equity and debt financing and continued focus on growth in its cash flow.

The Company’s total assets as of June 30, 2020 were $517,391, a decrease of $14,600 over the six months. This decrease was commensurate with the respective changes in current assets previously discussed.

Total liabilities increased $386,074 or 28% over the six months. This increase was composed primarily of the $515,447 increase in derivative liabilities, PPP loan, and convertible debt, net, and a decrease of $129,373 of accounts payable and deferred revenues, net, during the six months.

The above resulted in total stockholders’ deficit of $1,295,254, an increase of $436,052 from December 31, 2019. This change is a result of the net loss and deemed dividends for the six months ended June 30, 2020, offset by the $276,250 of cash proceeds from the sale of shares of the Company’s common stock and series A preferred stock during the six months.

As of the date of these financial statements, the Company requires additional capital to maintain adequate working capital and projected net revenues. The Company’s business plan is predicated on raising further capital for the purpose of further investment and acquisition of targeted technologies and companies, to fund growth in these technologies and companies, and to expand sales and distribution channels for companies it currently owns or is invested. It is anticipated the Company will continue to raise additional capital to fund growth and achieve profitability.

In December 2019, a novel strain of coronavirus diseases (“COVID-19”) was first reported in Wuhan, China. Less than four months later, on March 11, 2020, the World Health Organization declared COVID-19 a global pandemic. The extent of COVID-19’s effect on the Company’s operational and financial performance will depend on future developments, including the duration, spread and intensity of the pandemic, all of which are uncertain and difficult to predict considered the rapidly evolving landscape. The Company is currently analyzing the potential impacts to its business. At this time, it is not possible to determine the magnitude of the overall impact of COVID-19 on the Company. However, it could have a material adverse effect on the Company’s business, financial condition, liquidity, results of operations, and cash flows.

~~Three months ended September 30, 2017 compared to three months ended September 30, 2016.~~Revenues

Three Months Ended

September 30,

Change

2017

2016

Amount

%

Revenue

$ 320,279

$ 376,476

$ (56,197 )

(15
%)
Cost of goods sold

202,268

289,679

(87,411 )

(30
%)
Gross profit

118,011

86,797

31,214

36 %
Operating expenses

367,583

178,848

188,735

106 %
Net loss

$ (263,019
)

$ (149,690
)

$ (113,329
)

(76 %)

~~For the three months ended September 30, 2017, the~~The Company had revenues of ~~$320,279, a 15% decrease compared to the same period in 2016. The decrease in revenue was mainly due to cyclical purchasing pattern of new car sales during the summer months.~~

~~Gross profit~~$103,820 for the three months ended ~~September~~June 30, ~~2017~~2020, a 48% decrease over the similar period in 2019. Sales decrease was attributed to COVID-19 and ~~September 30, 2016 was $118,011~~its impact on Franchise and ~~$86,797, respectively. Gross~~Pre-owned automotive dealerships along with the breach of terms of a distributor responsible for one of the Company’s house accounts. As stated in the CEO Outlook for 2020, the Company expects resolution on breach of terms with its house account along with additional revenue contribution from its new partnerships with County Executives and MCULSC in second half of 2020.

The three-month gross profit ~~percentage for~~of $79,225 representing 76% gross margin compared to $84,383 and 43% gross margin over the similar period in 2019. During the three months ended ~~September~~June 30, ~~2017 was 37%, up from 23%~~2020, the Company had a one-time correction to the amounts owed its main supplier of GPS units, resulting in ~~the comparable period in 2016. The significant~~a reduction of cost of sales of approximately $20,000, or an increase in ~~gross profit percentage was mainly due to a 30% decrease in cost~~margin of ~~goods sold, primarily from sustainable volume purchases of inventory along with securing favorable vendor financing terms.~~

Operating expenses for the three months ended September 30, 2017 totaled $367,583, a 106% increase over the comparable period in 2016. The increase in expenses for the three months ended September 30, 2017 was mainly due to salaries and consulting and business developments fees. Salaries increased from $80,565 in 2016 to $145,146 in 2017, an increase of $64,581 or 80%19%. The increase was mainly due to increased overall sales and business activities. Consulting and development fees increased from $32,297 in 2016 to $67,721 in 2017, an increase of $35,424 or 110%, primarily to further develop the company’s software platform and migration to AWS for scalability of next generation software services.

~~The Company continues to incur increases particularly in salaries and expenses related to sales, and anticipates this will continue as~~Additionally, the Company continues to ~~invest in growing~~focus its sales organization. The Company also anticipates increases in development-associated labor and material costs in the next several quarters as it prepares for continued subscriber growth and new consumer automotive services for both franchise and pre-owed automotive markets.

For the three months ended September 30, 2017, the Company had a net loss of $263,019, an increase of $113,329 over the same period in 2016. The increase in net loss was mainly due to an increase in operating expenses as explained above and change in other expenses of $35,036.

~~Nine months ended September 30, 2017 compared to nine months ended September 30, 2016.~~

Nine Months Ended

September 30,

Change

2017

2016

Amount

%

Revenue

$ 1,041,789

$ 828,570

$ 213,219

26 %
Cost of goods sold

633,472

523,705

109,767

21 %
Gross profit

408,317

304,865

103,452

34 %
Operating expenses

1,080,351

655,236

425,115

65 %
Net loss

$ (800,169
)

$ (551,167
)

$ (249,002
)

(45 %)

For the nine months ended September 30, 2017, the Company had revenues of $1,041,789, a 26% increase compared to the same period in 2016. Sales growth was due primarily to growth of pre-loaded product and services into automotive dealer markets.

Gross profit for the nine months ended September 30, 2017 and September 30, 2016 was $408,317 and $304,865, respectively. Gross profit percentage for the nine months ended September 30, 2017 was 39%, up from 37% in the comparable period in 2016.efforts on sales that generate higher than average margins.

The Company continues to review hardware, inventory, and order fulfillment strategies as well as product and service pricing and delivery models to ~~continue~~grow sales ~~growth~~ and maximize overall margins.

In 2016, the Company implemented a pricing model based on initial lower margin sales of services and hardware that is pre-loaded in automotive dealership lots, with follow-on high margin revenue generated by subsequent sell-through to end customers. The Company anticipates this pricing, margin, and revenue recognition model will continue to grow in 2017.Expenses

Operating expenses for the ~~nine~~three months ended ~~September~~June 30, ~~2017~~2020 totaled ~~$1,080,351,~~$233,103 representing a ~~65% increase over~~15% decrease in the ~~comparable~~operating expenses reported in the same period in ~~2016. The increase~~2019. Included in ~~expenses~~other income (expenses) for the ~~nine and nine~~three months ended ~~September~~June 30, ~~2017 was mainly due~~2020 and 2019 is $(1,048,462) and $177,877, respectively of change in fair value of derivative liabilities. During the three months ended June 30, 2020, the Company recorded a loss on the settlement of debt totaling $195,908 for the conversions of debt. During the three months ended June 30, 2020, the Company recorded $191,712 of interest expense related to ~~stock-based compensation expense~~its convertible debt and ~~salaries. Stock-based compensation fees increased from $24,590 in 2016 to $137,635 in 2017, an increase by $113,045 or 460%.~~embedded conversion feature. The Company ~~granted an additional 1,550,000 stock options during~~anticipates increases in development-associated labor and material costs as it completes the ~~nine months ended September 30, 2017 with substantial options being fully vested during~~launch of its next generation platform. The Company will also expand its sales channels to support the quarter. Salaries increased from $254,544 in 2016 to $386,274 in its first nine months operations in 2017, an increase of $131,730 or 52%. The increase was mainly due to increased overall sales and business activities.Sprint IoT Factory initiatives.

The Company had a net loss of ~~$800,169,~~$1,623,296 for the three months ended June 30, 2020, an increase of ~~$249,002~~$1,491,680 over the same period in ~~2016. The increase in net loss was mainly due to an increase in operating expenses as explained above and change in other expenses of $22,049.~~2019, for the reasons noted above.

The Company ~~will continue~~continues to invest in personnel, channels, and product development in order to drive revenue growth and increase gross profits sufficient to ~~reach~~enable the Company to achieve profitability.

~~Liquidity~~Revenues and ~~Capital Resources~~Net Loss For the Six Months Ended June 30, 2020

~~The following table provides selected financial data about our company as of September 30, 2017 and December 31, 2016, respectively.~~

September 30,

December 31,

Change

2017

2016

Amount

%

Cash

$ 74,129

$ 38,680

$ 35,449

92 %

Total current assets

$ 384,781

$ 253,737

$ 131,044

52 %
Total current liabilities

$ 1,394,080

$ 1,089,972

$ 304,108

28 %
Working capital deficit

$ (1,009,299
)

$ (836,235
)

$ (173,064
)

(21 %)

Nine Months Ended

September 30,

Change

2017

2016

Amount

Net cash used in operating activities

$ (396,678 )

$ (29,457 )

$ (367,221 )
Net cash provided by financing activities

$ 527,322

$ 220,040

$ 307,282

Net cash used in discontinued operations

(62,029 )

(160,392 )

98,363

Effect of foreign exchange rate changes on cash

$ (33,166 )

$ (11,789 )

$ (21,377 )
Decrease in cash

$ 35,449

$ 18,402

$ 17,047

As of September 30, 2017, the Company’s current assets were $384,781, an increase of 52% from December 31, 2016. The most significant increase to current assets was an increase in cash and accounts and other receivables due to continue expansion of its distribution channels across its core markets in Southern California.

Current liabilities increased by $304,108, or 28%, from December 31, 2016. The Company increased its accounts payable by $123,418 due to increase in inventory demand from its distributors and derivative liabilities by $226,948, mainly due to three additional convertible debentures totaling $261,250 over the nine months.Revenues

The Company ~~finished~~had revenues of $215,619 for the ~~third quarter~~six months ended June 30, 2020, a 51% decrease over the similar period in 2019. Sales decrease was attributed to COVID-19 and its impact on Franchise and Pre-owned automotive dealerships along with the breach of terms of a ~~working capital deficiency of $1,009,299, an increase of $173,064 from December 31, 2016. In order to support the expansion~~distributor responsible for one of the ~~business,~~Company’s house accounts. As stated in the CEO Outlook for 2020, the Company ~~increased~~expects resolution on breach of terms with its ~~debt financing through issuing three convertible debentures totaling $261,250.~~ house account along with additional revenue contribution from its new partnerships with County Executives and MCULSC in second half of 2020.

The six-month gross profit of $123,075 represents a 57% gross margin compared to $192,757 and 43% gross margin over the similar period in 2019. During the six months ended June 30, 2020, the Company ~~intends~~had a one-time correction to ~~improve~~the amounts owed its ~~working capital position through ongoing equity and long-term debt financing and continued focus on growth~~main supplier of GPS units, resulting in ~~its cash flow.~~a reduction of cost of sales of approximately $20,000. As revenues have decreased over the prior year, more of the Company’s sales are with one particular distributor whose pricing with the Company is lower than our average selling price, resulting in lower margins for the six-month period ended June 30, 2020 compared to the same period during 2019.

The Company ~~monitors~~continues to review hardware, inventory, and order fulfillment strategies as well as product and service pricing and delivery models to grow sales and maximize overall margins.

Operating expenses for the six months ended June 30, 2020 totaled $676,818 representing a 17% increase in the operating expenses reported in the same period in 2019. This increase is due to the value of the Series B preferred stock that was issued during the six months ended June 30, 2020 and valued at $277,543. Included in other income (expenses) for the six months ended June 30, 2020 and 2019 is $(1,347,701) and $177,877, respectively of change in fair value of derivative liabilities. During the six months ended June 30, 2020, the Company recorded a loss on the settlement of debt totaling $273,518 for the conversions of debt. During the six months ended June 30, 2020, the Company recorded $197,443 of interest expense related to its convertible debt ~~to ensure that its capital structure is maintained by a strong balance sheet to fund its future growth. The main focus is to raise more financing through equity.~~and embedded conversion feature. The Company ~~successfully raised additional financing through equity subsequent~~anticipates increases in development-associated labor and material costs as it completes the launch of its next generation platform. The Company will also expand its sales channels to support the ~~quarter end and will seek to attract further equity financing in the future.~~Sprint IoT Factory initiatives.

~~During~~The Company had a net loss of $2,482,469 for the ~~nine~~six months ended ~~September~~June 30, ~~2017, our~~2020, an increase of $2,154,346 over the same period in 2019, for the reasons noted above.

The Company ~~used $396,678~~continues to invest in ~~operating activities for continuing operations compared~~personnel, channels, and product development in order to ~~$29,457 used during~~drive revenue growth and increase gross profits sufficient to enable the ~~nine~~Company to achieve profitability.

The Company saw no change in its ending cash balance ($0) over the six months ended ~~September~~June 30, ~~2016. The increase in~~2020. Net cash of $355,449 used in operating activities was ~~due to an increase in net loss and accounts receivable~~ offset by net financing cash of $355,449 raised via private placements and from the issuance of convertible debt and a ~~decrease in accounts payable. During~~PPP loan. Cash at the ~~nine months ended September 30, 2017, our Company used $62,029 in operating activities for discontinued operations compared to $160,392 used during~~end of the ~~nine months ended September 30, 2016.~~period was $0.

~~During the nine months ended September 30, 2017 and 2016, our Company did not have any investing activities.~~

During the nine months ended September 30, 2017, our Company received $527,322 from financing activities compared to $220,040 received from financing activities during the nine months ended September 30, 2016. The increase in cash flows from financing activities was mainly a result of an increase in proceeds from convertible debentures and issuance of common stock, offset by repayment of notes payable.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, and capital expenditures or capital resources that are material to stockholders.

As a ~~“smaller~~smaller reporting ~~company”, we are~~company, the Company is not required to provide the information required by this ~~Item.~~item.

~~Our management is responsible for establishing and maintaining a system~~The Company carried out an evaluation, with the participation of all the Company’s officers, of the effectiveness of the Company’s disclosure controls and procedures ~~(as defined~~as of June 30, 2020. The conclusions of the Company’s principal officers was that the controls and procedures in ~~Rule 13a-15(e) and 15d-15(e) under~~place were not effective such that, the ~~Exchange Act) that is designed to ensure that~~ information required to be disclosed ~~by us~~ in ~~the~~our exchange and commission reports ~~that we file or submit under the Exchange Act is~~was a) recorded, processed, summarized and reported within the time periods specified in the ~~Commission’s~~appropriate exchange and commission rules and ~~forms. Disclosure controls~~forms, and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act isb) accumulated and communicated to ~~the issuer’s~~our management, including our ~~principal~~chief executive ~~officer or officers~~offer and ~~principal financial~~chief operating officer, ~~or officers, or persons performing similar functions,~~ as appropriate to allow timely decisions regarding required disclosure.

During the last fiscal quarter there was ~~conducted under~~no change in the ~~supervision and with~~Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the ~~participation of our management of~~Company’s internal control over financial reporting. In evaluating the effectiveness of ~~the design and operation of~~ our ~~disclosure controls and procedures as of September 30, 2017. Based on that evaluation,~~internal control over financial reporting, our management ~~concluded that our disclosure controls and procedures were not effective as~~used the criteria set forth by the Committee of ~~such date~~Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control – Integrated Framework (2013). We identified the following material weakness:

As additional resources become available, we will work to ~~ensure that information required~~remediate this identified material weakness.

The Company has filed a lawsuit against a distributor for breach of contract resulting in losses to the Company estimated to be ~~disclosed~~ in excess of $1,000,000. Management believes the ~~reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified~~currently scheduled trial date in ~~SEC rules and forms~~October 2020 will be delayed into early 2021 as a result of the ~~following material weaknesses:~~backlog of cases due to COVID-19.

The specific material weakness identified by our management was ineffective controls over certain aspects of the financial reporting process because of a lack of a sufficient complement of personnel with a level of accounting expertise and an adequate supervisory review structure that is commensurate with our financial reporting requirements and inadequate segregation of duties. A "material weakness" is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the company's annual or interim financial statements would not be prevented or detected on a timely basis.

We expect to be materially dependent upon a third party to provide us with accounting consulting services for the foreseeable future. Until such time as we have a chief financial officer with the requisite expertise in U.S. GAAP, there are no assurances that the material weaknesses in our disclosure controls and procedures and internal control over financial reporting will not result in errors in our financial statements which could lead to a restatement of those financial statements.

There have been no changes in our internal controls over financial reporting identified in connection with the evaluation required by paragraph (d) of Securities Exchange Act Rule 13a-15 or Rule 15d-15 that occurred in the quarter ended September 30, 2017 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Management is not aware of any legal proceedings contemplated by any governmental authority or any other party involving us or our properties. As of the date of this Quarterly Report, no director, officer or affiliate is: (i) a party adverse to us in any legal proceeding, or (ii) has an adverse interest to us in any legal proceedings. Management is not aware of any other legal proceedings pending or that have been threatened against us.

As a ~~“smaller~~smaller reporting ~~company”, we are~~company, the Company is not required to provide the information required by this ~~Item.~~item, however for a discussion of risk factors affecting the Company please refer to the Cautionary Note Regarding Forward-looking Statements included in Part I Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations

During the ~~nine~~six months covered by this report and ended ~~September~~June 30, ~~2017~~2020, the following securities were sold or issued:

~~On March 2, 2017,~~During the six months ended June 30, 2020, the Company ~~issued 2,222,222 units at $0.09 per unit for proceeds~~sold a total of $200,000. Each unit consisted of one share of common stock and one share purchase warrant exercisable until March 2, 2019. The share purchase warrant is exercisable at $0.18 per share for the first year and $0.23 per share thereafter.

~~On March 2, 2017, the Company issued 56,000~~26,750,000 shares of common stock ~~with~~for proceeds of $151,250.

During the six months ended June 30, 2020, the Company issued a ~~fair value~~total of ~~$5,640~~819,264,782 shares of common stock for ~~consulting services rendered by a company controlled by~~ the ~~Vice President~~conversion of ~~Finance~~debt, accrued interest and fees, and the conversion of series A preferred stock and accrued dividends.

During the ~~Company.~~six months ended June 30, 2020, the Company issued 62,579,483 shares of common stock for the cashless exercise of warrants.

During the six months ended June 30, 2020, the Company issued 26,828,800 shares of common stock for the conversion of accrued expenses owed to the CEO and VP of Operations.

On April ~~20, 2017,~~9, 2019 and separately on June 11, 2019, the Company entered into a Series A Preferred Stock Purchase Agreement with an investor. On April 9, 2019, the Company issued ~~49,020~~86,000 shares for net proceeds of ~~common stock with a fair value~~$75,000 (after deducting $3,000 of ~~$5,392 for consulting services rendered.~~

Ondirect legal costs) and on June ~~23, 2017,~~11, 2019, the Company issued ~~147,059 units at $0.17 per unit~~58,300 shares for net proceeds of ~~$25,000 which was received as at December 31, 2016. Each unit consisted~~$50,000 (after $3,000 deduction of ~~one common share and one share purchase warrant exercisable at $0.35 per share for a period of two years from their date of issuance.~~

~~On July 1, 2017, the Company issued 49,020 shares of common stock with a fair value of $4,902 for consulting services rendered.~~

~~On August 29, 2017, the Company issued 1,875,000 shares of common stock at $0.08 per share for proceeds of $150,000.~~direct legal costs).

On September ~~7, 2017,~~17, 2019, the Company entered into a Series A Preferred Stock Purchase Agreement with an investor. The Company issued ~~49,020~~58,300 shares for net proceeds of ~~common stock~~$50,000 (after $3,000 deduction of direct legal costs).

On February 25, 2020, the Company entered into a Series A Preferred Stock Purchase Agreement with ~~a fair value~~an investor. The Company issued 47,300 shares for proceeds of ~~$3,922~~$43,000.

During the quarter ended June 30, 2020, the Company entered into two Series A Preferred Stock Purchase Agreements with an investor. The Company issued 100,100 shares for ~~consulting services rendered.~~proceeds of $91,000.

~~None.~~There has been no material default in the payment of any element of indebtedness of the Company. The Company has no preferred stock for which dividends are paid, hence no related arrearage or delinquencies in payments of dividends.

~~Not Applicable.~~The Company is not an operator, nor has a subsidiary that is an operator, of a coal or other mine.

~~None.~~During the period covered by this report there was no information, required to be disclosed in a report on Form 8-K, that was not reported.

During the period covered by this report there were no material changes to the procedures by which security holders may recommend nominees to the registrant’s board of directors.

** XBRL Information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 ofPursuant to the ~~Securities Act of 1933, as amended, is deemed not filed for purposes~~requirements of Section 1813 or 15(d) of the Securities Exchange Act of 1934, ~~as amended, and otherwise is not subject to liability under these sections.~~

~~In accordance with Section 13 or 15(d) of the Exchange Act,~~ the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		IGEN Networks ~~Corp.~~Corp
		~~(Registrant)~~

~~Dated: November 20, 2017~~August 19, 2020	By:	/s/ Neil Chan
		Neil Chan
		Chief Executive Officer and Director
		(Principal Executive Officer, Principal ~~Financial~~ Financing
		Officer and Principal Accounting Officer)

☐
	~~For the quarterly period ended~~ ~~September 30, 2017~~

	or

¨	TRANSITION REPORT ~~UNDER~~PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	~~For the transition period from ____________ to ____________~~

	~~Commission File Number~~ ~~000-55289~~

~~PART I - FINANCIAL INFORMATION~~
				Page
~~Item 1.~~		~~Financial Statements~~			~~F-1~~
~~Item 2.~~	~~Management's Discussion and Analysis of Financial Condition or Plan of Operation~~			3
~~Item 3.~~	~~Quantitative and Qualitative Disclosures About Market Risk~~			7
~~Item 4.~~	~~Controls and Procedures~~			7

PART ~~II - OTHER INFORMATION~~I

~~Item~~ITEM 1.	~~Legal Proceedings~~FINANCIAL STATEMENTS		F-1 to F-17
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		3
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		6
ITEM 4.	CONTROLS AND PROCEDURES		6

PART II

ITEM 1.	LEGAL PROCEEDINGS		7
ITEM 1A.	RISK FACTORS		7
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		7
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES		7
ITEM 4.	MINE SAFETY DISCLOSURES		7
ITEM 5.	OTHER INFORMATION		7
ITEM 6.	EXHIBITS		8
~~Item 1A.~~	~~Risk Factors~~

	June 30, 2020			December 31, 2019
	(unaudited)
Assets

Current Assets
Cash	$	-		$	-
Accounts and other receivables, net		3,508			18,136
Inventory		8,375			4,334
Prepaid expenses and deposits		-			4,013
Total Current Assets		11,883			26,483

Goodwill		505,508			505,508
Total Assets	$	517,391		$	531,991

Liabilities and Stockholders’ Deficit

Current Liabilities
Accounts payable and accrued liabilities	$	926,772		$	983,358
Current portion of deferred revenue, net of contract assets		142,621			207,566
PPP note payable		60,049			-
Convertible debentures, net of discount of $58,623 and $343,398, respectively		29,148			21,121
Derivative liabilities		539,693			92,322
Total Current Liabilities		1,698,283			1,304,367

Deferred revenue, net of current portion and contract assets		47,057			54,899
Total Liabilities		1,745,340			1,359,266

Commitment and contingencies

Redeemable convertible preferred stock – Series A:
Authorized – 9,000,000 shares with $0.001 par value, 159,800 shares and 160,600 shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively, net of discount of $142,425 and $121,934, respectively, aggregate liquidation preference of $88,375 and $153,862 as of June 30, 2020 and December 31, 2019, respectively		67,305			31,927

Stockholders’ Deficit
Series B preferred stock: Authorized – 1,000,000 shares with $0.001 par value issued and outstanding – 1,000,000 and 0 shares, as of June 30, 2020 and December 31, 2019, respectively, aggregate liquidation preference of $1,000 as of June 30, 2020		1,000			-
Common stock: Authorized – 1,490,000,000 shares with $0.001 par value issued and outstanding – 1,009,665,261 and 74,242,196 shares, as of June 30, 2020 and December 31, 2019, respectively		1,009,665			74,242

Additional paid-in capital		12,516,383			10,697,216

Accumulated Deficit		(14,822,302	)		(11,630,660	)
Total Stockholders’ Deficit		(1,295,254	)		(859,202	)
Total Liabilities and Stockholders’ Deficit	$	517,391		$	531,991

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Revenues:
Sales, services	$	97,058		$	198,481		$	207,183		$	443,878
Sales, other		6,762			-			8,436			-
Total Revenues		103,820			198,481			215,619			443,878
Cost of goods sold		24,595			114,098			92,544			251,121
Gross Profit		79,225			84,383			123,075			192,757

Expenses:
Selling, general and administrative		136,953			138,774			212,200			308,642
Management and consulting fees		61,784			34,414			114,836			79,898
Payroll and related		34,366			100,180			72,239			189,709
Stock-based director expense		-			-			277,543			-
Total Expenses		233,103			273,368			676,818			578,249
Loss Before Other Income (Expense)		(153,878	)		(188,985	)		(553,743	)		(385,492	)
Other Income (Expense):
Accretion of discounts on convertible debentures		(33,336	)		-			(110,064	)		-
Change in fair value of derivative liabilities		(1,048,462	)		177,877			(1,347,701	)		177,877
Loss on extinguishment of debt		(195,908	)		-			(273,518	)		-
Interest expense		(191,712	)		(120,508	)		(197,443	)		(120,508	)
Total Other Expense, net		(1,469,418	)		57,369			(1,928,726	)		57,369

Net Loss		(1,623,296	)		(131,616	)		(2,482,469	)		(328,123	)
Increase in value of warrants		(370,726	)		-			(370,726	)		-
Accrued and deemed dividends on redeemable convertible preferred stock		(245,676	)		(169,709	)		(338,447	)		(169,709	)
Net loss attributable to common stockholders	$	(2,239,698	)	$	(301,325	)	$	(3,191,642	)	$	(497,832	)
Basic and Diluted Loss per Common Share	$	(0.00	)	$	(0.00	)	$	(0.01	)	$	(0.01	)
Weighted Average Number of Common Shares Outstanding		711,546,667		$	68,214,970		$	406,173,893		$	67,680,440

	Redeemable Series A																				Total
	Convertible Preferred Stock						Series B Preferred Stock				Common Stock				Additional Paid In			Accumulated			Stockholders' Equity
	Shares			Amount			Shares		Amount		Shares		Amount		Capital			Deficit			(Deficit)
Balance, December 31, 2019		160,600		$	31,927			-	$	-		74,242,196	$	74,242	$	10,697,216		$	(11,630,660	)	$	(859,202	)

Shares of Series A preferred stock for cash, net of costs and discounts		47,300			1,608			-		-		-		-		-			-			-

Issuance of Series B preferred stock		-			-			1,000,000		1,000		-		-		276,543			-			277,543

Conversion of Series A preferred shares to common stock		(107,700	)		(21,411	)		-		-		81,700,258		81,700		103,693			(91,029	)		94,364

Accrued dividends on Series A preferred stock		-			1,742			-		-		-		-		-			(1,742	)		(1,742	)

Shares of common stock issued for cash		-			-			-		-		26,750,000		26,750		124,500			-			151,250

Shares of common stock issued for exercise of convertible note, including fees		-			-			-		-		95,216,504		95,217		175,753			-			270,970

Stock-based compensation		-			-			-		-		-		-		14,906			-			14,906

Net loss		-			-			-		-		-		-		-			(859,173	)		(859,173	)

Balance, March 31, 2020		100,200			13,866			1,000,000		1,000		277,908,958		277,909		11,392,611			(12,582,604	)		(911,084	)

Shares of Series A preferred stock for cash, net of costs and discounts		100,100			-			-		-		-		-		-			(156,472	)		(156,472	)

Conversion of Series A preferred shares to common stock		(40,500	)		(10,115	)		-		-		117,506,731		117,507		37,230			(25,650	)		129,087

Accrued dividends on Series A preferred stock		-			63,554			-		-		-		-		-			(63,554	)		(63,554	)

Shares of common stock issued for exercise of convertible note, including fees		-			-			-		-		524,841,289		524,841		738,152			-			1,262,993

Cashless exercise of warrant		-			-			-		-		62,579,483		62,579		(62,579	)		-			-

Issuance of common stock for conversion of payables		-			-			-		-		26,828,800		26,829		40,243			-			67,072

Increase in value of warrants		-			-			-		-		-		-		370,726			(370,726	)		-

Net loss																			(1,623,296	)		(1,623,296	)

Balance, June 30, 2020		159,800		$	67,305			1,000,000	$	1,000		1,009,665,261	$	1,009,665	$	12,516,383		$	(14,822,302	)	$	(1,295,254	)

		September 30,			December 31,
		2017			2016
	Note	$			$
Assets		(unaudited)

Current Assets
Cash			74,129			38,680
Accounts and other receivables	3		226,286			156,538
Inventory			24,809			17,226
Prepaid expenses and deposits			28,663			15,309
Restricted cash			25,000			15,000
Assets from discontinued operations	15		5,894			10,984
Total Current Assets			384,781			253,737

Equipment	4		4,123			7,137
Goodwill			505,508			505,508
Total Assets			894,412			766,382

Liabilities and Shareholders’ Deficit

Current Liabilities
Accounts payable and accrued liabilities	5,6,9		705,270			581,852
Current portion of deferred revenue			214,410			239,168
Notes payable	6		8,720			79,998
Convertible debentures, net of unamortized discount of $160,035 and $nil, respectively	7		51,215			-
Derivative liabilities	8		254,878			27,930
Liabilities from discontinued operations	15		159,587			161,024
Total Current Liabilities			1,394,080			1,089,972

Convertible debentures, net of unamortized discount of $26,420 and $nil, respectively	7		23,580			-
Deferred revenue			181,980			73,985
Total Liabilities			1,599,640			1,163,957

Nature and Continuance of Operations (Note 1)
Subsequent Events (Note 16)

Stockholders’ Deficit
Common stock: Authorized - 375,000,000 shares with $0.001 par value Issued and outstanding – 36,836,926 and 32,389,585 shares, respectively			36,837			32,390
Share subscriptions received			-			25,000
Additional paid-in capital			8,637,329			8,109,286
Deferred compensation			-			(19,592	)
Accumulated other comprehensive loss			(66,915	)		(32,349	)
Deficit			(9,312,479	)		(8,512,310	)
Total Stockholders’ Deficit			(705,228	)		(397,575	)
Total Liabilities and Stockholders’ Deficit			894,412			766,382

		Three Months Ended						Nine Months Ended
		September 30,						September 30,
		2017			2016			2017			2016
	Note	$			$			$			$

Revenue
Sales, hardware			246,189			365,083			761,394			692,446
Sales, services			74,090			11,393			280,395			136,124
Total Revenue			320,279			376,476			1,041,789			828,570
Cost of goods sold			202,268			289,679			633,472			523,705
Gross Profit			118,011			86,797			408,317			304,865

Expenses
Advertising			45,386			28,678			122,827			50,869
Consulting and business development fees	9		67,721			32,297			117,607			127,294
Depreciation			937			2,556			3,014			7,727
Foreign exchange loss			10,928			-			11,110			-
General and administrative			41,064			36,146			122,756			122,888
Management fees	9		101,643			(5,894	)		82,583			67,324
Professional fees			(51,656	)		-			29,844			-
Salaries			145,146			80,565			386,274			254,544
Stock-based compensation	11,12		(13,663	)		4,500			137,635			24,590
Travel			20,077			-			66,701			-
Total Expenses			367,583			178,848			1,080,351			655,236
Loss Before Other Income (Expense)			(249,572	)		(92,051	)		(672,034	)		(350,371	)
Other Income (Expense)
Accretion of discounts on convertible debentures			(39,439	)		(1,900	)		(52,322	)		(5,636	)
Change in fair value of derivative liabilities	8		1,796			9,700			579			14,413
Interest expense			(7,809	)		(18,216	)		(10,710	)		(49,181	)
Total Other Income (Expense)			(45,452	)		(10,416	)		(62,453	)		(40,404	)
Net Loss from continuing operations			(295,024	)		(102,467	)		(734,487	)		(390,775	)

Income (loss) from discontinuing operations			32,005			(47,223	)		(65,682	)		(160,392	)

Net loss			(263,019	)		(149,690	)		(800,169	)		(551,167	)

Other Comprehensive Loss
Foreign currency translation loss			(3,094	)		(7,262	)		(34,566	)		(20,796	)
Comprehensive Loss for the Period			(266,113	)		(156,952	)		(834,735	)		(571,963	)

Basic and diluted loss per common share from:
Continuing operations			(0.01	)		(0.01	)		(0.02	)		(0.01	)
Discontinuing operations			-			-			-			(0.01	)
			(0.01	)		(0.01	)		(0.02	)		(0.02	)

Weighted Average Number of Common Shares Outstanding			34,750,404			29,807,935			34,241,351			29,197,519

													Accumulated						Total
					Share			Additional					Other						Stockholders’
	Common Stock				Subscriptions			Paid-in		Deferred			Comprehensive						Equity
	Shares		Amount		Received			Capital		Compensation			Loss			Deficit			(Deficit)
	#		$		$			$		$			$			$			$

Balance, December 31, 2015		28,215,349		28,215		25,000			7,586,514		(54,570	)		(11,871	)		(7,675,552	)		(102,264	)

Stock-based compensation		-		-		-			20,090		-			-			-			20,090
Shares issued for cash		1,150,740		1,151		-			133,371		-			-			-			134,522
Shares issued for services		386,290		386		-			64,164		-			-			-			64,550
Shares issued for exercise of options		55,556		56		-			4,944		-			-			-			5,000
Deferred compensation charged to operations		-		-		-			-		26,234			-			-			26,234
Foreign currency translation loss		-		-		-			-		-			(20,796	)		-			(20,796	)
Net loss for the period		-		-		-			-		-			-			(551,167	)		(551,167	)

Balance, September 30, 2016		29,807,935		29,808		25,000			7,809,083		(28,336	)		(32,667	)		(8,226,719	)		(423,831	)

Balance, December 31, 2016		32,389,585		32,390		25,000			8,109,286		(19,592	)		(32,349	)		(8,512,310	)		(397,575	)

Stock-based compensation		-		-		-			137,635		-			-			-			137,635
Units issued for cash		2,369,281		2,369		(25,000	)		222,631		-			-			-			200,000
Shares issued for cash		1,875,000		1,875		-			148,125		-			-			-			150,000
Shares issued for services		203,060		203		-			19,652		-			-			-			19,855
Deferred compensation charged to operations		-		-		-			-		19,592			-			-			19,592
Foreign currency translation loss		-		-		-			-		-			(34,566	)		-			(34,566	)
Net loss for the period		-		-		-			-		-			-			(800,169	)		(800,169	)

Balance, September 30, 2017		36,836,926		36,837		-			8,637,329		-			(66,915	)		(9,312,479	)		(705,228	)

1.
~~Nature and Continuance of Operations~~F-6

Table of Contents

Computer equipment	IGEN Networks Corp, (“IGEN”, or the “Company”) was incorporated in the State of Nevada on November 14, 2006. As of May 5, 2014, through the acquisition of Nimbo LLC based in Murrieta, California, the Company has focused on the automotive industry in offering GPS based services to the consumer through dealership channels across the United States. Services that are offered on an annual renewal basis include stolen vehicle protection solutions, lot inventory management, smart phone based roadside assistance programs, and real-time vehicle health and driver behavior information direct to the consumer.3 years straight-line
Office equipment
	The accompanying condensed consolidated interim financial statements of the Company should be read in conjunction with the consolidated financial statements and accompanying notes filed with the U.S. Securities and Exchange Commission in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016. In the opinion of management, the accompanying condensed consolidated interim financial statements reflect all adjustments of a recurring nature considered necessary to present fairly the Company’s financial position and the results of its operations and its cash flows for the periods shown.5 years straight-line
Software	3 years straight-line


F-7

	~~The preparation~~Table of these condensed consolidated interim financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ materially from those estimates. The results of operations and cash flows for the periods shown are not necessarily indicative of the results to be expected for the full year.Contents


F-10

2.	~~Summary~~Table of ~~Significant Accounting Policies~~Contents

					Net Carrying Value
			Accumulated		September 30,		December 31,
	Cost		Depreciation		2017		2016
	$		$		$		$
Computer equipment		44,166		40,530		3,636		6,189
Office equipment		1,603		1,116		487		573
Software		6,012		6,012		-		375
Total		51,781		47,658		4,123		7,137

	Level 3 Carrying Value as of June 30, 2020
Derivative liabilities:
Embedded conversion feature – convertible debt	$	425,352
Embedded conversion feature – preferred stock		114,341
	$	539,693

	For The Six Months Ended June 30, 2020
Embedded Conversion Features – Convertible Debt
Balances, as of the beginning of the year	$	87,571
Derivative liabilities recorded upon issuance of convertible debt		141,667
Derivative liabilities derecognized upon debt conversion		(1,138,404	)
Net changes in fair value included in net loss		1,334,518
Ending balance	$	425,352

Embedded Conversion Features – Preferred Stock
Balances, as of the beginning of the year	$	4,751
Derivative liabilities recorded upon issuance of preferred stock		288,435
Derivative liabilities removed upon preferred stock conversion		(191,927	)
Net changes in fair value included in net loss		13,082
Ending balance	$	114,341

Total ending balance	$	539,693

				Weighted
				average
				exercise
	Number of			price
	warrants			$

Balance, December 31, 2016		4,055,294			0.20
Issued		2,419,281			0.17
Expired		(997,166	)		0.26
Balance, September 30, 2017		5,477,409			0.19

Number of warrants		Exercise price
outstanding		$		Expiry date
	357,143		0.14	October 12, 2017
	980,392		0.15	December 2, 2017
	294,118		0.35	December 11, 2017
	588,235		0.15	December 13, 2017
	588,240		Cdn$0.34	March 29, 2018
	250,000		0.15	May 4, 2018
	2,222,222		0.18	March 2, 2019
	50,000		0.20	January 2, 2022
	147,059		0.35	June 23, 2019
	5,477,409

				Weighted
				average		Aggregate
	Number of			exercise price		intrinsic value
	options			$		$
Balance, December 31, 2016		4,000,000			0.16		-
Granted		1,550,000			0.13		-
Expired		(625,000	)		0.14		-
Balance, September 30, 2017		4,925,000			0.15		750

		Outstanding						Exercisable
				Weighted		Weighted				Weighted
Range of				average		average				average
exercise prices		Number of		remaining contractual		exercise price		Number of		exercise price
$		shares		life (years)		$		shares		$

	0.07		75,000		0.50		0.07		75,000		0.07
	0.09		910,000		0.50		0.09		910,000		0.09
	0.13		1,425,000		4.61		0.13		1,100,000		0.13
	0.16		225,000		3.37		0.16		112,500		0.16
	0.19		2,270,000		2.98		0.19		2,270,000		0.19
Cdn$0.25			20,000		2.98	Cdn$0.25			20,000	Cdn$0.25
			4,925,000		2.97		0.15		4,487,500		0.15

	On May 11, 2017, the Company granted 1,550,000 stock options to officers, directors, employees, and consultants of the Company, which are exercisable at $0.13 per share and expire on May 11, 2022. Of this amount, 1,150,000 stock options vested on the date of grant, 50,000 stock options vests on October 21, 2017, 50,000 stock options vests on November 11, 2017, and the remaining 300,000 stock options vests on May 11, 2018.☐	Voting – Series A Preferred Stock holders have no voting rights
	☐	Dividends – 8% cumulative dividend, compounded daily, payable solely upon redemption, liquidation, or conversion. (increases to 22% for an event of default)
	~~The fair values~~☐	Redemption – Company has the right to redeem the shares from the issuance date through 270 days following the issuance date using the table noted in the Certificate of ~~stock options granted are amortized over~~Designations, Preferences, Rights and Limitations of Series A Convertible Preferred Stock agreement. After 270 days, except for the ~~vesting period where applicable. During the nine months ended September 30, 2017,~~Mandatory Redemption, the Company ~~recorded $135,450 (2016 - $24,590)~~does not have the right to redeem the shares.
	☐	Mandatory Redemption – 18 months after the Issuance Date or upon the occurrence of ~~stock-based compensation in connection with~~an Event of Default, the ~~vesting~~Company is required to redeem all of ~~options granted.~~the shares of Series A Preferred Stock of the Holder. The Company ~~uses~~shall make a cash payment in an amount equal to the ~~Black-Scholes option pricing model~~total number of shares of Series A Preferred Stock held by the Holder multiplied by the then current Stated Value as adjusted (including but not limited to ~~establish~~ the ~~fair value~~addition of ~~options granted assuming no expected~~any accrued unpaid dividends ~~or forfeitures~~ and the Default Adjustment
	☐	Conversion – At any time after 6 months following ~~weighted~~the Issuance Date, the Holder may convert all or any part of the outstanding Series A Preferred Stock into shares of Common Stock. The Variable Conversion Price is defined as 75% of the the Market Price. The Market Price is defined as the average ~~assumptions:~~of the 3 lowest Trading Prices for the Common Stock during the 15 day Trading Period ending on the last complete Trading Day prior to the Conversion Date.
	☐	Default Adjustments – Upon the occurrence of any Event of Default, the Stated Value will be increased between 150% and 200%, depending on the Event of Default.

	Number of warrants			Weighted average exercise price

Balance, December 31, 2019		4,527,614			0.18
Issued		-			-
Adjusted for triggered down-round provisions		315,521,528			0.00
Exercised		(63,623,768	)		0.00
Expired		(500,000	)		0.12
Balance, June 30, 2020		255,925,374		$	0.00

Number of warrants outstanding		Exercise price		Expiration date
	2,222,222	$	0.23	February 23, 2022
	252,672,760	$	0.00	September 23, 2024
	980,392	$	0.15	December 2, 2021
	50,000	$	0.20	January 2, 2022
	255,925,374

	Number of options		Weighted average exercise price		Aggregate intrinsic value

Balance, December 31, 2019		5,690,000	$	0.13
Granted		-		-
Exercised		-		-
Cancelled / forfeited		-		-
Balance, June 30, 2020		5,690,000	$	0.13	$	-

		Outstanding						Exercisable
Range of exercise prices		Number of shares		Weighted average remaining contractual life (years)		Weighted average exercise price		Number of shares		Weighted average exercise price

$	0.04		1,500,000		4.1		0.04		1,125,000		0.04
$	0.08		250,000		2.5		0.08		250,000		0.08
$	0.13		1,425,000		2.1		0.13		1,425,000		0.13
$	0.16		225,000		0.9		0.16		225,000		0.16
$	0.19		2,270,000		0.5		0.19		2,270,000		0.19
Cdn$	0.25		20,000		0.5	Cdn$	0.25		20,000	Cdn$	0.25
			5,690,000		2.4	$	0.13		5,315,000	$	0.14

Account	Previously Recorded Balance			Corrected Balance			Correction Made

For the three months ended June 30, 2019:
Statement of Operations
Cost of revenues	$	85,098		$	114,098		$	29,000
Net loss	$	(102,616	)	$	(131,616	)	$	29,000
Loss per share	$	(0.00	)	$	(0.00	)	$	-

For the six months ended June 30, 2019:
Statement of Operations
Cost of revenues	$	117,121		$	251,121		$	134,000
Net loss	$	(194,123	)	$	(328,123	)	$	134,000
Loss per share	$	(0.01	)	$	(0.01	)	$	-

Statement of Cash Flows
Deferred revenues, net	$	(249,246	)	$	(115,495	)	$	(134,000	)


	·☐	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:

	Three Months Ended
	September 30,						Change
	2017			2016			Amount			%
Revenue	$	320,279		$	376,476		$	(56,197	)	(15		%)
Cost of goods sold		202,268			289,679			(87,411	)	(30		%)
Gross profit		118,011			86,797			31,214			36	%
Operating expenses		367,583			178,848			188,735			106	%
Net loss	$	(263,019	)	$	(149,690	)	$	(113,329	)		(76	%)

Exhibit ~~Number~~		~~Description~~Index
~~(31)~~		~~Rule 13a-14 (d)/15d-14d) Certifications~~
31.1*31.1		~~Section 302~~ Certification ~~by the Principal Executive Officer~~– Rule 13(a)-14(a)/15d-14(a) - CEO
~~(32)~~		~~Section 1350 Certifications~~
32.1*32.1		Certification – Section ~~906 Certification by the Principal Executive Officer~~1350 - CEO
~~101~~*		~~Interactive Data File~~
101.INS**101.INS		XBRL Instance Document
101.SCH**101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL**101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF**101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB**101.LAB		XBRL Taxonomy Extension Label Linkbase Document
101.PRE**101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document