Femto Technologies Inc 20-F for FY2023

Femto Technologies Inc. (FMTOF)

20-F 2024-04-03 For: 2023-12-31

Added on April 06, 2026

About this 20-F

Femto Technologies Inc filed this 20-F on April 3, 2024, covering the fiscal year ended December 31, 2023 (FY2023).

Headline figures

Fiscal year ended December 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: 1.08M CAD; down 4.1% from 1.12M CAD a year earlier
Net loss: 18.5M CAD; compared with a net loss of 1.66M CAD a year earlier
Diluted EPS: -91.20 CAD; compared with -9.88 CAD a year earlier

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Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Shares		BCAN		Nasdaq

Large accelerated filer ☐	Accelerated filer ☐	Non-accelerated filer ☒
		Emerging growth company ☒

GENERAL		1
NOTE REGARDING FORWARD-LOOKING STATEMENTS		6
PART I		6
ITEM 1	IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS	6
A.	DIRECTORS AND SENIOR MANAGEMENT	6
B.	ADVISERS	6
C.	AUDITOR	6
ITEM 2	OFFER STATISTICS AND EXPECTED TIMETABLE	6
A.	OFFER STATISTICS	6
B.	METHOD AND EXPECTED TIMETABLE	7
ITEM 3	KEY INFORMATION	7
A.	SELECTED FINANCIAL DATA	7
B.	CAPITALIZATION AND INDEBTEDNESS	7
C.	REASONS FOR THE OFFER AND USE OF PROCEEDS	7
D.	RISK FACTORS	7
ITEM 4	INFORMATION ON THE COMPANY	24
A.	HISTORY AND DEVELOPMENT OF THE COMPANY	24
B.	BUSINESS OVERVIEW	27
C.	ORGANIZATIONAL STRUCTURE	39
D.	PROPERTY, PLANTS AND EQUIPMENT	40
ITEM 4A	UNRESOLVED STAFF COMMENTS	40
ITEM 5	OPERATING AND FINANCIAL REVIEW AND PROSPECTS	40
A.	OPERATING RESULTS	40
B.	LIQUIDITY AND CAPITAL RESOURCES	42
C.	RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES	43
D.	TREND INFORMATION	43
E.	CRITICAL ACCOUNTING ESTIMATES	43
ITEM 6.	DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES	44
A.	DIRECTORS AND SENIOR MANAGEMENT	44
B.	COMPENSATION	46
C.	BOARD PRACTICES	49
D.	EMPLOYEES	57
E.	SHARE OWNERSHIP	57
ITEM 7	MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS	58
A.	MAJOR SHAREHOLDERS	58
B.	RELATED PARTY TRANSACTIONS	59
C.	INTERESTS OF EXPERTS AND COUNSEL	59
ITEM 8	FINANCIAL INFORMATION	59
A.	CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION	59
B.	SIGNIFICANT CHANGES	60
ITEM 9	THE OFFER AND LISTING	60
A.	OFFER AND LISTING DETAILS	60
B.	PLAN OF DISTRIBUTION	60

C.	MARKETS	60
D.	SELLING SHAREHOLDERS	60
E.	DILUTION	60
F.	EXPENSES OF THE ISSUE	60
ITEM 10	ADDITIONAL INFORMATION	60
A.	SHARE CAPITAL	60
B.	MEMORANDUM AND ARTICLES OF ASSOCIATION	61
C.	MATERIAL CONTRACTS	62
D.	EXCHANGE CONTROLS	63
E.	TAXATION	63
F.	DIVIDENDS AND PAYING AGENTS	74
G.	STATEMENT BY EXPERTS	74
H.	DOCUMENTS ON DISPLAY	74
I.	SUBSIDIARY INFORMATION	74
ITEM 11	QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK	74
ITEM 12	DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES	74
PART II
ITEM 13	DEFAULTS, DIVIDENDS ARREARAGES AND DELINQUENCIES	74
ITEM 14	MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS	75
ITEM 15	CONTROLS AND PROCEDURES	75
ITEM 16	[RESERVED]	75
A.	AUDIT COMMITTEE FINANCIAL EXPERT	75
B.	CODE OF ETHICS	75
C.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	76
D.	EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES	76
E.	PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS	76
F.	CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT	76
G.	CORPORATE GOVERNANCE	77
PART III
ITEM 17	FINANCIAL STATEMENTS	78
ITEM 18	FINANCIAL STATEMENTS	78
ITEM 19	EXHIBITS	78

United States dollar (US$) per Canadian dollar ($)	High		Low		Average		End of Period
Year Ended December 31, 2023		0.7617		0.7207		0.7409		0.7561
Year Ended December 31, 2022		0.8031		0.7217		0.7685		0.7383
Year Ended December 31, 2021		0.8306		0.7727		0.7980		0.7888
Year Ended December 31, 2020		0.7863		0.6898		0.7455		0.7854
Year Ended December 31, 2019		0,7699		0.7353		0.7537		0.7699

	●	not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act; and

	●	not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis).

	●	market perception of the investment opportunity presented by companies in the cannabis business;
	●	actual or anticipated fluctuations in our quarterly results of operations;

	●	recommendations by securities research analysts;
	●	changes in the economic performance or market valuations of companies in the industries in which we operate;
	●	addition or departure of our executive officers and other key personnel;
	●	sales or perceived sales of additional Common Shares;
	●	significant acquisitions or business combinations, strategic partnerships, joint ventures or capital commitments by or involving us or our competitors;
	●	operating and share price performance of other companies that investors deem comparable to us fluctuations to the costs of vital production materials and services;
	●	changes in global financial markets and global economies and general market conditions, such as interest rates and pharmaceutical product price volatility;
	●	operating and share price performance of other companies that investors deem comparable to the Company or from a lack of market comparable companies; and
	●	news reports relating to trends, concerns, technological or competitive developments, regulatory changes and other related issues in our industry or target markets.

	●	not being required to comply with the auditor attestation requirements in the assessment of our internal control over financial reporting;

	●	Section 107 of the JOBS Act, which provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, or the Securities Act, for complying with new or revised accounting standards. This means that an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to delay such adoption of new or revised accounting standards. As a result of this adoption, our financial statements may not be comparable to companies that comply with the public company effective date;

	●	not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements;

	●	reduced disclosure obligations regarding executive compensation; and

	●	exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

	●	laws and business practices favoring local competitors;

	●	compliance with multiple, conflicting and changing governmental laws and regulations, including employment, tax, privacy and data protection laws and regulations;

	●	regional data privacy laws that apply to the transmission of our customers’ data across international borders;

	●	foreign currency fluctuations;

	●	different or lesser protection of our intellectual property; and

	●	regional economic conditions, including the affect of general economic and financial market conditions in the markets in which we operate.

	●	the Company must hold the BYND Israel Shares for at least two years from the closing date of the Share Exchange and, subject to certain exceptions, must not cause a dilution of its interest in BYND Israel;

	●	former BYND Israel Shareholders who received Consideration Shares, must continue to hold not less than 25% of the outstanding Common Shares for the two years following the closing date of the Share Exchange; and

	●	BYND Israel must continue to operate its business as presently conducted (i.e., its main economic activity) for at least two years from the closing date of the Share Exchange Transaction and will not at any time be permitted to sell its intellectual property rights and assets outside Israel without ITA consent.

	●	On April 22, 2019, BYND Israel entered into a convertible loan agreement with an investor (the “Convertible Loan Agreement”) to borrow USD$100,000 to facilitate the completion of the Business Combination Transaction and the listing of the shares of the Company on the CSE.

	●	On June 30, 2020, Fundingco completed a private placement financing wherein it issued 20,451 Fundingco special warrants to investors, at an issue price of $7.6 per special warrant, for gross proceeds of $155,424.

	●	On October 1, 2020

	○	BYND Israel assigned its obligations under the Convertible Loan Agreement to Fundingco and recorded a gain of $116,473 related to the debt assignment. As the consideration for the debt assignment, BYND Israel issued a demand promissory note to Fundingco with the principal amount of $155,548 equal to the principal amount of the convertible debenture together with all unpaid interest owing to the creditor. The demand promissory note is unsecured and bears no interest.

	○	Fundingco settled the amount owing to the investor under the Convertible Loan Agreement, by issuing 3,195 Fundingco special warrants, to the investor.

●	Enhance operational efficiency and streamline processes within the cannabis cultivation domain.
●	Ensure regulatory compliance and mitigate risks inherent in the industry.
●	Improve data-driven decision-making and optimize resource allocation to maximize yield and profitability.

●	Real-time monitoring of environmental conditions.
●	Automated control of irrigation and nutrient delivery systems.
●	Tracking of inventory levels and batch traceability.
●	Generation of customizable reports and analytics powered by BI tools.
●	Integration of AI algorithms for predictive analytics and optimization.
●	Intuitive user interface design for enhanced usability.
●	Seamless integration with IoT sensors and CRM systems.

	December 31, 2023		December 31, 2022
Software development	$	758,307	$	761,166
Software license		200,593		213,749
Software supports		47,102		71,460
Cloud hosting		59,926		67,334
Others		10,933		9,363
	$	1,076,861	$	1,123,072

	●	Revenues during the period were $1,076,861 as compared to $1,123,072 for the same period in 2022. This decrease is mainly a result of decreased revenues from support services in the amount of $24,358 and decreased revenues from software licenses in the amount of $13,156. This decrease is due to foreign exchange effect between the NIS and $CAD.

	●	Approximately 82% of our sales during the period and 83% of our sales for the same period in 2022 were to our largest customer and as a result, we are highly dependent on this customer to continue our operating activities.

	●	Development of the Company’s New CRM Platform is now complete and we began to generate revenues from it in 2023.

	●	Development of the Company’ New Cannabis CRM Platform is now complete and is currently being tested at the Weizmann Institute of Science, however, we do not expect to generate revenues from the platform in the foreseeable future.

	●	The Company’s proposed development of a medical cannabis facility is on hold and we do not expect to generate revenues from the sale of cannabis or cannabis infused products from the cannabis facility in the near future; however there is a possibility we will generate revenues from the sale of cannabis using our contactless business license if we choose to re apply for it in the second quarter of 2024.

	●	For the fiscal year ended December 31, 2023, general and administrative expenses increased to $1,254,089 from $947,300 for the same period in 2022. The increase was mainly due to a $478,238 increase in compensation to senior management and directors.

	●	Professional fees increased to $1,739,430 from $1,220,746 for the same period in 2022, mainly due to a $575,547 increase in fees in the area of financial advisory, M&A and corporate finance.

	●	Consulting and marketing expenses increased to $1,387,628 from $8,190 for the same period in 2022 due to an $1,384,462 increase in investor relations and public relations as well as digital marketing expenses.

	●	Depreciation and amortization expenses increased to $93,354 from $30,702 for the same period in 2022, mainly due to $81,406 amortization of our New Cannabis CRM software.

	●	Share-based compensation expenses increased to $343,252 from $153,909 for the same period in 2022 due to higher amounts of stock options and RSUs granted to officers and directors of the Company.

	●	Research and development expenses increased to $836,833 from $Nil for the same period in 2022 due to development of the EZ-G Device.

Item	Year Ended December 31, 2023 (CAD$)			Year Ended December 31, 2022 (CAD$)
Cash used in operating activities		(3,468,099	)		(2,067,162	)
Cash used in investing activities		(374,028	)		(2,008,389	)
Cash provided by financing activities		4,650,401			848,791
Net increase (decrease) in cash		808,274			(3,226,760	)

●	The Company believes that it will be able to generate sufficient cash flows to maintain its current capacity.

●	On January 13, 2022, the Company completed a non-brokered private placement financing wherein it raised $122,950 through the issuance of 40,983 Common Shares (216 Common Shares post reverse split) at a price of $3.00 per share.

●	On May 3, 2022, 150,000 stock options (790 Stock options post reverse split) were exercised into Common Shares for total proceeds of $123,000.

●	On September 20, 2022, 140,000 stock options (737 Stock options post reverse split) were exercised into Common Shares for total proceeds of $114,800.

●	On October 5, 2022, the Company completed a non-brokered private placement financing wherein it raised $616,570 through the issuance of 142,395 Common Shares (750 Common Shares post reverse split) at a price of $4.33 per share.

●	On July 19, 2023, the Company issued 1,733,334 Common Shares (9,123 Common Shares post reverse split) at a price of US$1.50 per share following the closing of an underwritten U.S. public offering with gross proceeds to the Company of $3,424,201, before deducting underwriting discounts and other estimated expenses paid by the Company in the amount of $405,636, for net proceeds of $3,018,565.

●	On December 21, 2023, the Company issued 2,884,616 Common Shares (15,182 Common Shares post reverse split) at a price of US$0.52 per share following the closing of a registered direct public offering with gross proceeds to the Company of $1,996,650, before deducting underwriting discounts and other estimated expenses paid by the Company in the amount of $319,464, for net proceeds of $1,677,186. The offering was for the sale of 2,884,616 units (15,182 units post reverse split), each consisting of one Common Share and one warrant to purchase one Common Share at an exercise price of US$0.52.

●	On March 14, 2024, the Company closed a firm commitment underwritten U.S. public offering with gross proceeds to the Company of approximately US$7,000,000, before deducting underwriting discounts and other estimated expenses payable by the Company. The base offering consisted of (a) 16,166,667 common shares (or 85,088 common shares post reverse split), (b) 100,500,000 pre-funded warrants (or 528,947 post reverse split), (c) 16,166,667 (or 85,088 post reverse split) A warrants to purchase one common share (the “A Warrants”) at US$0.09 per common share (US$17.1 on a post-split basis), and (d) 32,333,334 (or 170,176 post reverse split) B warrants to purchase one common share (the “B Warrants”) at US$0.102 per common share (US$19.38 on a post-split basis). All pre-funded warrants were exercised. To date, 3,593,170 A Warrants (on a post-split basis) have been exercised on a cashless basis. 15,000 B Warrants have been exercised at an exercise price of $US1.3643 per common share. Under the terms of the Warrants, if the lowest volume weighted average price for the Common Shares for the period commencing five trading days immediately prior to the date of the Reverse Stock Split and ending five trading days thereafter is less than the exercise price of US$17.1 for the A Warrants (on a post-split basis) and US$19.38 for the B Warrants (on a post-split basis), the exercise price of the A Warrants and the B Warrants will be adjusted down to such lower price which is US$1.3643 as of April 1, 2024.

	The Company intends to use the net proceeds from this offering primarily for product design and manufacturing of the EZ-G Device, sales and marketing campaigns, patent prosecution and working capital.

Name, Age, Position(s) with the Company	Date Elected or Appointed (mm/dd/yy)	% of Time to be Devoted Company			Principal Occupation or Employment for the Past Five Years
Marcel (Moti) Maram, 66 President and Director	03/29/21		100	%	President at BYND Cannasoft and former CEO at BYND Israel.
Yftah Ben Yaackov, 45 CEO and Director	03/29/21		100	%	CEO at BYND Cannasoft
Avner Tal, 61 VP Sales & Marketing, CTO and Director	03/29/21		100	%	Acting CEO, Chief Technology Officer and Vice President - Sales & Marketing at BYND Israel.
*Gabi Kabazo, 51* Chief Financial Officer, Director and Corporate Secretary	03/29/21		100	%	CFO at BYND Cannasoft
Stefania Szabo, 51 ⁽¹⁾⁾ Director	06/23/21		5%-10	%	VP, HR and Organizational Development with JESSON + Company Communications Inc.
*Harold Wolkin, 72* ⁽¹⁾⁽²⁾ Director	03/29/21		5%-10	%	Retired Investment Banker and Senior Executive, currently acting as an independent director of three public companies.
Niv Shirazi, 27 ⁽¹⁾ Director	02/24/22		5%-10	%	Chief Operating Officer with H.N. Win Ltd.
Carmel Zigdon, 27 Director	9/22/22		5%-10	%	Manager at ZCRAVE.com
Mor Bzizinsky, 37 Director	02/08/24		5%-10	%	Attorney in Private Practice

Compensation Securities
Name and position	Type of Compensation Security		Number of compensation securities, number of underlying securities		Date of issue or grant		Issue, conversion or exercise price ($)		Expiration date
Marcel (Moti) Maram President and Director		-		-		-		-		-
Yftah Ben Yaackov CEO and Director		RSU		789		January 10, 2024.	$	76		May 11, 2024
Avner Tal VP Sales & Marketing, Chief Technology Officer and Director		-		-		-		-		-
Gabi Kabazo		RSU		387		December 31, 2023	$	85.5		May 1, 2024
Director and CFO		RSU		605		January 10, 2024	$	76		May 11, 2024
Stefania Szabo⁽¹⁾ Director		RSU		17		April 27, 2023	$	725.8		April 27, 2024
RSU				26		August 8, 2023	$	366.7		August 8, 2024
RSU				106		January 10, 2024	$	76		May 11, 2024
Harold Wolkin⁽¹⁾⁽²⁾ Director		RSU		42		April 27, 2023	$	725.8		April 27, 2024
RSU				12		August 8, 2023	$	366.7		August 8, 2023
RSU				605		January 10, 2024	$	76		May 11, 2024
Niv Shirazi ⁽¹⁾ Director		RSU		53		January 10, 2024	$	76		May 11, 2024

	●	Marcel (Moti) Maram will serve as President of the Company until his employment agreement is terminated in accordance with the terms set forth therein. Mr. Maram will be entitled to an initial annual base salary of $111,940 and will thereafter be subject to annual review. Mr. Maram will also be eligible for bonuses and the granting of options, at the Board’s discretion. See “Options and Other Rights to Purchase Securities”.

	●	Yftah Ben Yaackov will serve as Chief Executive Officer of the Company until his employment agreement is terminated in accordance with the terms set forth therein. On June 29, 2021, the company entered into a consulting agreement with Mr. Yftah Ben Yaackov which provides inter alia that the Corporation will pay Mr. Ben Yaackov a consulting fee of $18,400 per month, for a period of 10 months; Since April 1, 2022 his compensation has changed to $250,000 annual salary. Since April 1, 2023 his compensation has changed to US $300,000 annual salary. Mr. Ben Yaackov will also be eligible for bonuses and the granting of options, at the Board’s discretion. See “Options and Other Rights to Purchase Securities”.

	●	Avner Tal will serve as VP Sales & Marketing and Chief Technology Officer of the Company until his employment agreement is terminated in accordance with the terms set forth therein. Mr. Tal will be entitled to an initial annual base salary of $140,400 and will thereafter be subject to annual review. Mr. Tal will also be eligible for bonuses and the granting of options, at the Board’s discretion. See “Options and Other Rights to Purchase Securities”.

	●	if the employee’s employment with the Company and BYND Israel, is terminated without cause, or

	●	if the employee elects to terminate his employment with the Company and BYND Israel in the event there has been a “substantial breach” by the Company or BYND Israel (including wrongful dismissal) or if there has been a change of control of the Company or BYND Israel, then such terminated employee will be entitled to severance payments equal to one-twelfth of the his then base salary plus coverage for any benefits to which he may be entitled pursuant to any benefit plan, for the lesser of: (i) twelve months, or (ii) until the such employee finds new employment.

	●	to assist the Board in establishing and maintaining a sound system of corporate governance through a process of continuing assessment and enhancement;

	●	to review and propose nominees for the Board of Directors, and

	●	to assist the Board in discharging its duties relating to compensation of the executive officers of the Company.

	●	to ensure the Board has the proper mix and number of directors, and mix of director skills and experience needed to ensure effective governance, and where necessary, to identify and recommend to the Board suitable candidates for nomination as new directors;

	●	to advise the Board on issues of conflict of interest for individual directors;

	●	to examine the effectiveness of the Company’s corporate governance practices at least annually and to propose such procedures and policies as the Committee believes are appropriate to ensure that the Board functions independently of management, management is accountable to the Board and procedures are in place to monitor the effectiveness of performance of the Board, committees of the Board and individual directors;

	●	to develop and conduct an annual Board self-evaluation process;

	●	to develop and review with the Board annual Board goals or improvement priorities;

	●	with assistance of management, to organize and provide an orientation program for new directors where appropriate;

	●	to periodically review the mandates of the Board and committees of the Board and determine what additional committees of the Board, if any, are required or appropriate;

	●	to develop such codes of conduct and other policies as are appropriate to deal with the confidentiality of the Company’s information, insider trading and the Company’s timely disclosure and other public Company obligations; and

	●	to take such other steps as the Committee decides are appropriate, in consultation with the Board, to ensure that proper corporate governance practices are in place for the Company, with reference to industry recommendations and other regulatory requirements on corporate governance.

	●	to review and approve corporate goals and objectives;

	●	to review the compensation of the Chief Executive Officer and to make recommendations to the Board with respect to the CEO’s compensation level;

	●	to make recommendations to the Board with respect to the compensation of other senior management and executive officers of the Company;

	●	to review the compensation and benefits of the directors and to ensure that such compensation reflects the responsibilities and risks involved in being a director;

	●	to review and make recommendations to the Board as to the general compensation and benefits policies and practices of the Company, including incentive stock options for all employees, consultants, directors and officers;

	●	to review and approve the disclosure to be made of director and executive remuneration in the Management Information Circular;

	●	to ensure there are appropriate training, development and benefit programs in place for management and staff;

	●	to review and make recommendation to the Board for its approval on any special compensation and benefit arrangements;

	●	to review its compensation practices by comparing them to surveys of relevant competitors and to set objective compensation based on this review; and

	●	to perform such other functions as the Board may from time to time assign to the Committee.

	●	recommend to the Board the external auditor to be nominated by the shareholders for the purpose of preparing or issuing an auditor’s report or performing other audit, review or attest services for the Company;
	●	review (by discussion and enquiry) the external auditors’ proposed audit scope and approach;
	●	review the performance of the external auditors and recommend to the Board the appointment or discharge of the external auditors;
	●	review and recommend to the Board the compensation to be paid to the external auditors; and
	●	review and confirm the independence of the external auditors by reviewing the non-audit services provided and the external auditors’ assertion of their independence in accordance with professional standards.

	●	evaluate the adequacy and effectiveness of management’s system of internal controls over the accounting and financial reporting system within the Company; and
	●	ensure that the external auditors discuss with the audit committee any event or matter which suggests the possibility of fraud, illegal acts or deficiencies in internal controls.

	●	review significant accounting and financial reporting issues, especially complex, unusual and related party transactions;
	●	review and ensure that the accounting principles selected by management in preparing financial statements are appropriate;
	●	review the draft annual financial statements and provide a recommendation to the Board with respect to the approval of the financial statements;
	●	meet with management and the external auditors to review the financial statements and the results of the audit, including any difficulties encountered;
	●	review management’s discussion & analysis respecting the annual reporting period prior to its release to the public;
	●	review and approve the interim financial statements prior to their release to the public;
	●	review management’s discussion & analysis respecting the interim reporting period prior to its release to the public; and
	●	where reasonably possible, review and approve all public disclosure, including news releases, containing financial information, prior to its release to the public.

	●	the aggregate amount of all non-audit services that were not pre-approved is reasonably expected to constitute no more than five per cent of the total amount of fees paid by the Company and its subsidiaries to the external auditor during the fiscal year in which the services are provided; or
	●	the services are brought to the attention of the audit committee and approved, prior to the completion of the audit, by the audit committee or by one or more of its members to whom authority to grant such approvals has been delegated.

	●	the pre-approval policies and procedures are detailed as to the particular service;
	●	the audit committee is informed of each non-audit service; and
	●	the procedures do not include delegation of the audit committee’s responsibilities to management.

	●	establish procedures for the receipt, retention and treatment of complaints received by the company regarding accounting, internal accounting controls, or auditing matters;
	●	establish procedures for the confidential, anonymous submission by employees of the company of concerns regarding questionable accounting or auditing matters;

	●	ensure that significant findings and recommendations made by management and external auditor are received and discussed on a timely basis;
	●	review the policies and procedures in effect for considering officers’ expenses and perquisites;
	●	perform other oversight functions as requested by the Board; and
	●	review and update this Charter and receive approval of changes to this Charter from the Board.