6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 OF THE

SECURITIES EXCHANGE ACT OF 1934

For the month of, September 2022

Commission File Number

001-40848

GUARDFORCE AI CO., LIMITED

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(Translation of registrant’s name into English)

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10 Anson Road, #28-01 International Plaza

Singapore 079903

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F ☒

Form 40-F ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐

EXPLANATORY NOTE

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Guardforce AI Co., Limited (the “Company”) is furnishing this Form 6-K to provide the unaudited consolidated financial statements for the six months ended June 30, 2022 and 2021 and incorporate such financial statements into the Company’s registration statements referenced below.

As previously disclosed, the Company completed the acquisitions of Shenzhen Keweien Robot Service Co., Ltd. (“Shenzhen Keweien”) and Guangzhou Kewei Robot Technology Co., Ltd. (“Guangzhou Kewei”) on March 22, 2022. The purchase price of $10,000,000 consisted of $1,000,000 paid in cash (10%) and restricted ordinary shares of the Company at $4.2 per share (90%). On June 22, 2022, the Company completed the acquisition of Beijing Wanjia Security System Co., Ltd. (“Beijing Wanjia”, together with Shenzhen Keweien and Guangzhou Kewei, the “Acquired Businesses”) for $8,400,000 consisted of $840,000 paid in cash (10%) and restricted ordinary shares of the Company at $2 per share (90%).

The Company is furnishing this Form 6-K to provide the (i) audited combined financial statements as of December 31, 2021 and 2020 and for the years ended December 31, 2021 and 2020 for the Acquired Businesses; and (ii) unaudited pro forma combined financial statements for the year ended December 31, 2021 for the Acquired Businesses, and incorporate such financial statements into the Company’s registration statements referenced below.

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This report on Form 6-K and the attached Exhibits 99.1, 99.2, 99.3, 99.4 and 99.5 are incorporated by reference into (i) the prospectus contained in the Company’s registration statement on Form F-3 (SEC File No. 333-261881) declared effective by the Securities and Exchange Commission on January 5, 2022, (ii) the prospectus dated February 9, 2022 contained in the Company’s registration statement on Form F-3 (SEC File No. 333-262441) declared effective by the Securities and Exchange Commission on February 9, 2022, and (iii) the prospectus dated June 14, 2022 contained in the Company’s post-effective Amendment No. 1 to the Form F-1 registration statement on Form F-3 (SEC File No. 333-258054) declared effective by the Securities and Exchange Commission on June 14, 2022.

FORWARD-LOOKING INFORMATION

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This Report on Form 6-K contains forward-looking statements and information relating to us that are based on the current beliefs, expectations, assumptions, estimates and projections of our management regarding our company and industry. When used in this report, the words “may”, “will”, “anticipate”, “believe”, “estimate”, “expect”, “intend”, “plan” and similar expressions, as they relate to us or our management, are intended to identify forward-looking statements. These statements reflect management’s current view of us concerning future events and are subject to certain risks, uncertainties and assumptions, including among many others: our negative operating profits may raise substantial doubt regarding our ability to continue as a going concern, our substantial customer concentration, with a limited number of customers accounting for a substantial portion of our recent revenues, our subsidiaries’ ability to distribute dividends to us may be subject to restrictions under the laws of their respective jurisdictions, the emergence of additional competing technologies, changes in domestic and foreign laws, regulations and taxes, political and social events in Thailand, the volatility of the securities markets, and other risks and uncertainties which are generally set forth under the heading, “Key information - Risk Factors” and elsewhere in our Annual Report on Form 20-F filed on April 1, 2022 (the “Annual Report”). Should any of these risks or uncertainties materialize, or should the underlying assumptions about our business and the commercial markets in which we operate prove incorrect, actual results may vary materially from those described as anticipated, estimated or expected in the Annual Report.

All forward-looking statements included herein attributable to us or other parties or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Except to the extent required by applicable laws and regulations, we undertake no obligations to update these forward-looking statements to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: September 30, 2022	Guardforce AI Co., Limited
	By:	/s/ Lei Wang
		Lei Wang
		Chief Executive Officer

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EXHIBIT INDEX

ExhibitNumber	Description
99.1	Audited Combined Financial Statements as of December 31, 2021 and 2020 and for the years ended December 31, 2021 and 2020
99.2	Unaudited Pro Forma Condensed Combined Financial Statements for the year ended December 31, 2021
99.3	Unaudited Interim Consolidated Financial Statements as of June 30, 2022 and for the six months ended June 30, 2022 and 2021
99.4	Operating and Financial Review and Prospects in Connection with the Interim Consolidated Financial Statements for the six months ended June 30, 2022
99.5	Press Release dated September 30, 2022
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File – the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

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Exhibit99.1

GFAIBusiness in the PRC

(Through acquisition from Kewei Group)

Audited Combined Financial Statements

As of December 31, 2021 and 2020

And for the years ended December 31, 2021 and 2020

(With Report of Independent Auditor Thereon)

INDEXTO COMBINED FINANCIAL STATEMENTS

	Page(s)
REPORT OF INDEPENDENT AUDITOR	1
COMBINED<br> STATEMENT OF FINANCIAL POSITION	3
COMBINED<br> STATEMENT OF PROFIT OR LOSS	4
COMBINED STATEMENT OF COMPREHENSIVE LOSS	5
COMBINED STATEMENT OF CHANGES IN EQUITY	6
COMBINED STATEMENT OF CASH FLOWS	7
NOTES TO THE COMBINED FINANCIAL STATEMENTS	8-36

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REPORT OF INDEPENDENT AUDITOR

To those charged with governance of GFAI Business in the People’s Republic of China

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Opinion

We have audited the accompanying Combined Financial Statements of GFAI Business in the People’s Republic of China (the “Group”), which comprise the Combined Statement of Financial Position as of December 31, 2021 and 2020, and the related Combined Statements of Profit or Loss, Comprehensive Loss, Changes in Equity and Cash Flows for the years then ended, and the related notes (collectively referred to as the “Combined Financial Statements”).

In our opinion, the Combined Financial Statements present fairly, in all material respects, the financial position of the Group as of December 31, 2021 and 2020, and the results of its operations and its cash flows for the years then ended in accordance with the basis of presentation set out in Note 2.

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Basisfor Opinion

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Our responsibility under those standards are further described in the Auditor’s Responsibilities for the Audit of the Combined Financial Statements section of our report. We are required to be independent of the Group and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

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Emphasis-of-Matter

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Basisof presentation

We draw attention to Note 2 to the Combined Financial Statements, which describes that the accompanying Combined Financial Statements were prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission. Our Opinion is not modified with respect to this matter.

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Acquisitionof the Group’s interest

We draw attention to Note 13 to the Combined Financial Statements, whereby the Group’s interests were purchased by a related party Guardforce AI Co., Limited during 2022. Our opinion on the Combined Financial Statements is not modified with respect to this matter.

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SubstantialDoubt about the Group’s Ability to Continue as a Going Concern

The accompanying Combined Financial Statements have been prepared assuming that the Group will continue as a going concern. The ability to continue as a going concern is dependent upon the Group’s profit generating operations in the future and/or obtaining the necessary financing to meet its obligations and to repay its liabilities arising from normal business operations when they become due. Management’s evaluation of the events and conditions and management’s plans regarding those matters are also described in Note 2.1. The Combined Financial Statements do not include any adjustments that might result from the outcome of this uncertainty. Our opinion is not modified with respect to that matter.

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Responsibilitiesof Management for the Combined Financial Statements

Management is responsible for the preparation and fair presentation of the Combined Financial Statements in accordance with the basis of presentation set out in Note 2, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of Combined Financial Statements that are free from material misstatements, whether due to fraud or error.

In preparing the Combined Financial Statements, management is required to evaluate whether there are conditions or events, considering in the aggregate, that raise substantial doubt about the Group’s ability to continue as a going concern within one year after the date that the Combined Financial Statements are available to be issued.

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Auditor’sResponsibilities for the Audit of the Combined Financial Statements

Our objectives are to obtain reasonable assurance about whether the Combined Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omission, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the Combined Financial Statements.

In performing an audit in accordance with generally accepted auditing standards, we:

●	Exercise<br> professional judgment and maintain professional skepticism throughout the audit.
●	Identify<br> and assess the risks of material misstatement of the Combined Financial Statements, whether<br> due to fraud or error, and design and perform audit procedures responsive to those risks.<br> Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures<br> in the Combined Financial Statements.
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●	Obtain<br> an understanding of internal control relevant to the audit in order to design audit procedures<br> that are appropriate in the circumstance, but not for the purpose of expressing an opinion<br> on the effectiveness of the Group’s internal control. Accordingly, no such opinion<br> is expressed.
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●	Evaluate<br> the appropriateness of accounting policies used and the reasonableness of significant accounting<br> estimates made by management, as well as evaluate the overall presentation of the Combined<br> Financial Statements.
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●	Conclude<br> whether, in our judgment, there are conditions or events, considered in the aggregate, that<br> raise substantial doubt about the Group’s ability to continue as a going concern for<br> a reasonable period of time.
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We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.

/s/ PKF Littlejohn LLP
PKF Littlejohn LLP
London, United Kingdom
September 30, 2022

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COMBINEDSTATEMENT OF FINANCIAL POSITIONAS OF DECEMBER 31, 2021 AND 2020

(Expressedin U.S. Dollars)

****	****	As of December 31,					****
****	Note	2021		****	2020		****
Assets
Current assets:
Cash and cash equivalents		$	186,772		$	197,158
Trade receivables	3		1,176,675			1,017,269
Other receivables	4		1,466,907			3,445,671
Inventories	5		2,066,079			2,220,085
Amount due from related parties	12		337,857			372,046
Total current assets			5,234,290			7,252,229
Non-current assets:
Property, plant and equipment	6		2,138,272			1,154,600
Intangible assets	7		444,537			241,660
Right-of-use assets	9		294,443			469,990
Deferred tax assets			63,769			520
Total non-current assets			2,941,021			1,866,770
Total assets		$	8,175,311		$	9,118,999
Liabilities and equity
Current liabilities:
Trade and other payables	8	$	1,574,918		$	1,639,034
Contract liabilities			89,315			-
Income tax payables			307			-
Lease liabilities	9		230,075			211,795
Amounts due to related parties	12		3,779,432			1,883,924
Total current liabilities			5,674,047			3,734,753
Non-current liabilities:
Lease liabilities	9		64,368			258,195
Total non-current liabilities			64,368			258,195
Total liabilities		$	5,738,415		$	3,734,753
Equity
Paid-in capital		$	5,026,352		$	5,026,352
Surplus reserves			34,354			34,354
Translation reserve			416,246			321,714
Retained earnings			(3,040,056	)		(256,369	)
Total equity			2,436,896			5,126,051
Total liabilities & equity		$	8,175,311		$	9,118,999

The accompanying notes are an integral partof these combined financial statements

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COMBINED STATEMENT OF PROFIT OR LOSS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in U.S. Dollars)

****	****	For the years ended December 31,					****
****	Note	2021		****	2020		****
Revenue		$	6,339,737		$	3,701,567
Cost of sales			(4,129,917	)		(2,602,930	)
Gross profit			2,209,820			1,098,637
Other income, net			111,620			2,250
Selling and distribution expenses			(2,138,752	)		(1,042,202	)
Administrative expenses			(3,029,222	)		(596,735	)
Loss before income tax			(2,846,534	)		(538,050	)
Income tax credit/ (expense)	10		62,847			(667	)
Loss for the year		$	(2,783,687	)	$	(538,717	)
Loss per paid-in capital		$	(0.55	)	$	(0.11	)

The accompanying notesare an integral part of these combined financial statements

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COMBINEDSTATEMENT OF COMPREHENSIVE LOSS

FORTHE YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressedin U.S. Dollars)

		For the years endedDecember 31,
	Note	2021			2020
Loss for the year		$	(2,783,687	)	$	(538,717	)
Currency translation differences			94,532			321,714
Total comprehensive loss for the year		$	(2,689,155	)	$	(217,003	)

The accompanying notes are an integral partof these combined financial statements

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COMBINEDSTATEMENT OF CHANGES IN EQUITYFOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020(Expressed in U.S. Dollars)

	Paid-incapital		Surplusreserve		Translation reserve		Retainedearnings			Total equity
Balance as at December 31, 2019	$	4,308,302	$	34,354	$	-	$	282,348		$	4,625,004
Total comprehensive loss for the year
Loss for the year		-		-		-		(538,717	)		(538,717	)
Other comprehensive income for the year		-		-		321,714		-			347,611
		-		-		321,714		(538,717	)		(217,003	)
Contributions
Capital paid-in		718,050		-		-		-			718,050
Balance as at December 31, 2020		5,026,352		34,354		321,714		(256,369	)		5,126,051
Total comprehensive loss for the year
Loss for the year		-		-		-		(2,783,687	)		(2,783,687	)
Other comprehensive income for the year		-		-		94,532		-			94,532
		-		-		94,532		(2,783,687	)		(2,689,155	)
Balance as at December 31, 2021	$	5,026,352	$	34,354	$	416,246	$	(3,040,056	)	$	2,436,896

The accompanying notes are an integral partof these combined financial statements

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COMBINEDSTATEMENT OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressedin U.S. Dollars)

	For the years ended<br> December 31,
	2021			2020
Cash flows from operating activities
Loss for the year	$	(2,783,687	)	$	(538,717	)
Adjustments for:
Depreciation		607,849			260,917
Amortization		39,708			27,101
Impairment loss on trade and other receivables		2,133,010			138,051
Impairment loss on inventories		589,118			-
Increase in deferred tax assets		(63,249	)		(520	)
Total adjustments		3,306,436			425,549
Changes in:
Increase in trade and other receivables		(411,869	)		(429,732	)
Increase in inventories		(435,112	)		(313,073	)
Decrease/ (increase) in amounts due from related parties		144,417			(199,459	)
Decrease in trade and other payables		(57,542	)		(136,790	)
Increase in contract liabilities		89,315			-
Increase in amounts due to related parties		1,895,508			1,883,924
Net cash generated from operating activities		1,747,466			691,702
Cash flows from investing activities
Acquisition of property, plant and equipment		(1,313,133	)		(1,123,189	)
Acquisition of intangible assets		(233,917	)		(218,687	)
Net cash used in investing activities		(1,547,050	)		(1,341,876	)
Cash flows from financing activities
Proceeds from capital paid-in		-			718,050
Payment of lease liabilities		(236,785	)		(203,661	)
Net cash (used in)/ generated from financing activities		(236,785	)		514,389
Net decrease in cash and cash equivalents		(36,369	)		(135,785	)
Effect of movement in exchange rates on cash held		25,983			57,277
Cash and cash equivalents at January 1,		197,158			275,666
Cash and cash equivalents at December 31,	$	186,772		$	197,158

The accompanying notes are an integral partof these combined financial statements

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NOTESTO COMBINED FINANCIAL STATEMENTSFOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

1.	NATURE OF OPERATIONS

GFAI business in the People’s Republic of China (the “PRC”) is a business (the “Group”) acquired from Kewei Group (“Kewei”), a related party of the Group. The accompanying combined financial statements present, on a historical cost basis, the combined assets, liabilities, revenue and expenses related to the Group.

The Group offers robot sales, robot rental and general security solutions in the PRC and is composed of the following 3 companies:

-	Shenzhen<br> Keweien Robot Service Co., Ltd.
-	Guangzhou<br> Kewei Robot Technology Co., Ltd.
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-	Beijing<br> Wanjia Security System Co., Ltd.
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2.	SIGNIFICANT ACCOUNTING<br> POLICIES
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The following is a summary of significant accounting policies used in the preparation of these combined financial statements.

2.1	Basis of presentation

The combined financial statements as of December 31, 2021 and 2020 and for each of the years ended December 31, 2021 and 2020 containing the combined statements of financial position, profit or loss, comprehensive loss, changes in equity and cash flows of the Group have been prepared for the purpose of complying with the provisions of Rule 3-05 of Regulation S-X promulgated by the Securities and Exchange Commission (the “SEC”), which requires certain information with respect to acquisitions to be included with certain filings with the SEC.

The basis of presentation describes how the combined financial statements have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (IFRS), except as described below. IFRS does not provide for the preparation of combined financial information, and accordingly in preparing the combined financial information certain accounting conventions commonly used for the preparation of historical financial information for inclusion in investment circulars have been applied. The application of these conventions results in the following material departures from IFRS. In other respects IFRS have been applied.

The combined financial statements are prepared in accordance with IFRS except in respect of the following matters:

●	The combined financial information does not comply with IAS 27 Separate Financial<br>Statements paragraph 4 and IFRS 10 Consolidated Financial Statements paragraph 2. The financial information has therefore been prepared<br>on a combined basis by applying the principles underlying the consolidation procedures of IFRS 10.
●	The combined financial information does not constitute a set of general purpose<br>financial statements under IAS 1, Presentation of Financial Statements, and consequently, the acquired companies do not make an explicit<br>and unreserved statement of compliance with IFRS as required by IAS 1.
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●	As the Group is not in the process of filing its financial statements with<br>a securities commission for the purpose of issuing shares in a public market, no earnings per share calculation is presented.
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●	The Group’s deemed transition date to IFRS is 1 January 2020. The principles<br>and requirements for first time adoption of IFRS are set out in IFRS 1. IFRS 1 allows certain exemptions in the application of particular<br>standards to prior periods in order to assist companies with the transition process. The Group has not applied any of the exemptions set<br>out in IFRS 1. The Group has not previously prepared or reported any combined financial information in accordance with any other generally<br>accepted accounting principles (“GAAP”). Consequently, it is not possible to provide IFRS 1 reconciliations between financial<br>information prepared under any previous GAAP and the financial information prepared in accordance with IFRS included in this combined<br>financial information, as required by IFRS 1 on transition to IFRS.
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The basis of the combined financial statements is prepared in a form that is consistent with Guardforce AI Co., Limited’s accounting policies in its latest annual accounts. The accounting policies set out below have been applied consistently for all periods presented in the combined financial information.

Significant intercompany accounts and transactions have been eliminated in the combined financial statements, while transactions with Kewei and the controlling shareholder are disclosed as related party transactions.

Going concern

The Group incurred a net loss of $2,783,687 and $538,717 during the years ended December 31, 2021 and 2020, respectively. As of December 31, 2021, the Group had net current liabilities of $439,757. During the year ended December 31, 2021, the Group made an allowance for impairment of trade and other receivables balances amounting to $2,133,010 to derecognise the uncollectible accounts from trade and other receivables.

The ability to continue as a going concern is dependent upon the Group’s profit generating operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they become due.

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The Group expects to finance operations primarily through cash flows from operating activities and capital contributions from Guardforce AI Co., Limited (“GFAI”). In the event that the Group requires additional funding to finance the growth of the Group’s current and expected future operations as well as to achieve their strategic objectives, GFAI indicated its intent and ability to provide additional equity financing.

2.2	Segment reporting

IFRS 8, Operating Segments, establishes standards for companies to report in their financial statement information about operating segments, products, services, geographic areas, and major customers. Based on the criteria established by IFRS 8, the Group’s chief operating decision maker (“CODM”) has been identified as the Chief Executive Officer. Since the Group’s long-lived assets are substantially located in the PRC, no geographical segments are presented.

2.2	Segment<br>reporting

The Group reports financial and operating information in the following 2 reportable segments:

(1) Robotic AI solutions; and

(2) General security solutions

Selected information by segment is presented in the following tables for the years ended December 31, 2021 and 2020.

	For the year endedDecember 31,
	2021		2020
Revenue
Robotic AI solutions	$	2,805,405	$	888,372
General security solutions		3,534,332		2,813,195
	$	6,339,737	$	3,701,567
	For the year endedDecember 31,
---	---	---	---	---	---	---
	2021			2020
Loss for the year
Robotic AI solutions	$	(292,641	)	$	(59,735	)
General security solutions		(2,491,046	)		(478,982	)
	$	(2,783,687	)	$	(538,717	)

Depreciation and amortization by segment for the years ended December 31, 2021 and 2020 are as follows:

	For the year endedDecember 31,
	2021		2020
Depreciation and amortization
Robotic AI solutions	$	386,699	$	49,253
General security solutions		260,858		238,765
	$	647,557	$	288,018

Provision for allowance for credit losses on trade and other receivables by segment for the years ended December 31, 2021 and 2020 are as follows:

	For the year endedDecember 31,
	2021		2020
Provision for allowance for credit losses on trade and other receivables
Robotic AI solutions	$	5,776	$	1,970
General security solutions		2,127,234		136,081
	$	2,133,010	$	138,051

The Group did not perform impairment assessment on trade and other receivables for the year ended December 31, 2020. The management assessment was made upon the acquisition by GFAI that the provision for allowance amount of $2,133,010 is considered necessary to be made as of December 31, 2021.

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2.2	Segment<br>reporting

Provision for inventory impairment by segment for the years ended December 31, 2021 and 2020 are as follows:

	For the year endedDecember 31,
	2021		2020
Provision for inventory impairment
Robotic AI solutions	$	-	$	-
General security solutions		589,118		-
	$	589,118	$	-

Capital expenditures by segment for the years ended December 31, 2021 and 2020 are as follows:

	For the year endedDecember 31,
	2021		2020
Capital expenditures
Robotic AI solutions	$	1,310,206	$	1,123,189
General security solutions		2,927		-
	$	1,313,133	$	1,123,189

Total assets by segment as of December 31, 2021 and 2020 are as follows:

	As at December 31,
	2021		2020
Total assets
Robotic AI solutions	$	4,213,954	$	2,707,176
General security solutions		3,961,357		6,411,823
	$	8,175,311	$	9,118,999

Total liabilities by segment as of December 31, 2021 and 2020 are as follows:

	As at December 31,
	2021		2020
Total liabilities
Robotic AI solutions	$	3,810,018	$	2,145,950
General security solutions		1,928,397		1,846,998
	$	5,738,415	$	3,992,948

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2.3	Critical accounting estimate<br> and judgements

The preparation of the combined financial statements in conformity with IFRS requires management to make estimates and judgements that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from these estimates. Significant estimates during the years ended December 31, 2021 and 2020 include the provision for sales returns, provision for obsolete inventory, allowance for doubtful accounts, lease accounting and useful life of fixed assets. The estimated amount for provision for sales warranty on the sale of robots at December 31, 2021 and 2020 were $nil.

2.4	Cash and cash equivalents

Cash and cash equivalents include highly liquid investments with original maturities of three months or less.

2.5	Trade and other<br> receivables

Trade and other receivables are recorded at net realizable value consisting of the carrying amount less an allowance for doubtful accounts as needed. The allowance for doubtful accounts is the Group’s best estimate of the amount of probable credit losses in the Group’s existing accounts and other receivables and accounts receivable from related parties. The Group determines the allowance for its trade receivable based on aging data, historical collection experience, customer specific facts and economic conditions. The Group writes-off trade receivable when amounts are deemed uncollectible. During the year ended December 31, 2021 and 2020, the Group has made provision for allowance for credit losses on trade and other receivables of $2,133,010 and $138,051, respectively. The Group extends unsecured credit to its customers in the ordinary course of business but mitigates the associated risks by performing credit checks and actively pursuing past due accounts.

2.6	Inventories

Inventories consist of robots, alarm and surveillance equipment and are stated at the lower of cost, determined on a weighted average basis, or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business less the estimated cost of completion and the estimated costs necessary to make the sale. When inventory is sold, the carrying amount is charged to expense in the period in which the revenue is recognized. Write-downs for declines in net realizable value or for losses on inventories are recognized as an expense in the period the impairment or loss occurs.

2.7	Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation. Cost represents the purchase price of the asset and other costs incurred to bring the asset into its existing use. Maintenance, repairs and betterments, including replacement of minor items, are charged to expense; major additions to physical properties are capitalized.

Depreciation is calculated using the straight-line method over the following estimated useful lives.

	Estimated useful life
Leasehold improvements	Lesser of useful life or remaining lease term
Computer equipment	3 years
Furniture, fixtures and office equipment	5 years
Vehicles	10 years
Robots	5 years

11

2.8	Intangible<br> assets, net

Intangible assets represent a computer software system. The intangible assets are recorded at historic acquisition cost, and amortized on a straight-line basis over their estimated useful lives.

Costs associated with maintaining computer software programs are recognized as an expense as incurred. Development costs that are directly attributable to the design and testing of identifiable and unique software systems controlled by the Group will be recognized as intangible assets when the criteria of intangible assets are met.

	Estimated useful life
Computer software systems	10 years
2.9	Trade and other payables
---	---

These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial tear which are unpaid. They are initially recognized at fair value and subsequently measured at amortized cost using the effective interest method.

2.10	Revenue from contracts<br> with customers

The Group generates its revenue primarily from two service lines: (1) Robotics AI solutions and (2) General security solutions.

Each service line primarily renders the following services:

(1) Robot AI solutions

(i) sales of robots and (ii) rental of robots

(2) General security solutions

(i) security equipment sales and (ii) security service

The Group recognizes revenue at a point in time as products are delivered and services are performed. Consultancy fees typically cover a period of time, the revenue is recognized on a ratable basis over the contract term.

12

2.10	Revenue from contracts<br> with customers

The reported revenue reflects services delivered at the contract or agreed-upon price.

The following conditions are normally accomplished when the services are rendered to the customers and this moment is considered a point in time.

●	To identify the contract and quotation with the agreed service price.
●	To evaluate the services engaged in the customer’s contract and<br>identify the related performance obligations.
---	---
●	To consider the contract terms and commonly accepted business practices<br>to determine the transaction price. The transaction price is the consideration that the Group expects to be entitled for delivering the<br>services engaged with the customer. The consideration engaged in a customer’s contract is generally a fixed amount.
---	---
●	To allocate the transaction price, if necessary, to each performance<br>obligation (to each good or service that is different) for an amount that represents the part of the benefit that the Group expects to<br>receive in exchange for the right of delivering the services engaged with the customer.
---	---
●	To recognize revenue when the Group satisfies the performance obligation<br>through the rendering of services engaged.
---	---

Contract liabilities consist of deferred revenue related to prepaid fees received from customers for future information security service over the term of the service agreement.

2.11	Cost of sales

Cost of sales consists primarily of robots, alarm and surveillance equipment, internal costs and related benefits, and other overhead costs that are directly attributable to products sold or services provided.

13

2.12	Income tax

Income tax expense represents the sum of the tax currently payable and deferred tax. Income tax expense is charged to the combined statements of profit or loss as they incur.

Current income taxes are recorded in the results of the year they are incurred.

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the combined financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences, including tax loss carry forwards and certain tax credits, to the extent that it is probable that future taxable profits, reversal of existing taxable temporary differences will be available against which those deductible temporary differences can be utilized after considering future tax planning strategies. Such deferred tax assets and liabilities are not recognized if the temporary difference arises from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

Deferred tax assets are recognized for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognized to the extent that it is probable that taxable profit and reversal of existing taxable temporary differences will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits and reversal of existing taxable temporary differences will allow the deferred tax asset to be recovered.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries, associates, and interests in joint ventures, except where the Business is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset is realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Business expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

14

2.13	Provisions

Provisions are recognized for liabilities of uncertain timing or amount when the Group has a legal or constructive obligation arising as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation and the amount can be estimated reliably. Where the time value of money is material, provisions are stated at the present value of the expenditures expected to settle the obligation.

Where it is probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events, are also disclosed as contingent liabilities unless the probability of outflow of economic benefits is remote.

A provision for warranties is recognized when the underlying products or services are sold, based on historical warranty data and a weighting of possible outcomes against their associated probabilities. Since the management considers the probability they will require settlement at the Group’s expense on warranty claims to be remote, the estimated amount for provision for sales warranty at December 31, 2021 and 2020 were $nil.

2.14	Leases

As a lessee

From January 1, 2019, in accordance with IFRS 16, leases with terms greater than 12 months are recognized as a right-of-use asset (“ROU”) and a corresponding lease liability at the date in which the leased asset is available for use by the Group. Contracts may contain both lease and non-lease components. The Group allocates the consideration in the contract to the lease and non-lease components based on their relative stand-alone prices. Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of fixed payments.

Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.

The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases of the Group, the lessee’s incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions. To determine the incremental borrowing rate, the Business uses recent third-party financing received by the individual lessee as a starting point, adjusted to reflect changes in financing conditions.

Lease payments are allocated between principal and finance cost. The finance cost is charged to profit and loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

15

2.14	Leases

Right-of-use assets are measured at cost comprising the following:

●	The amount of the initial<br> measurement of the lease liability
●	any lease payments made<br> at or before the commencement date less any lease incentives received
---	---

Right-of-use assets are depreciated over the shorter of the asset’s useful life or the lease term on a straight-line basis. The lease terms of buildings and others are generally less than ten years and less than five years, respectively.

Payments associated with leases with a lease term of 12 months or less on the Group’s equipment and all leases of low-value assets are recognized on a straight-line basis as an expense in profit or loss.

As a lessor

As a lessor, the Group classifies its leases as either operating or finance leases at lease inception. The Group assessed whether it transfers substantially all the risks and rewards of ownership. Those assets that do not transfer substantially all the risks and rewards are classified as operating leases. As part of this assessment, the Group considers certain indicators such as whether the lease is for the major party of the economic life of the assets. Rental income is accounted for on a straight-line basis over the lease term and is included in revenue due to its operating nature.

The Group applies the derecognition and impairment requirements in IFRS 9 to lease receivables.

2.15 Foreign currency translation

The functional currency of the Group is the Renminbi (“RMB”) as the currency of the primary economic environment in which the entity operates. All amounts are presented in United States dollars (“USD”). Transactions and balances are not subject to currency risk as the Group carried out transactions in RMB only

2.16 Equity

Paid-in capital represents capital that has been received from the shareholders.

Other components of equity include the following:

●	translation reserve – comprises foreign currency translation<br>differences arising from the translation of the Group’s combined financial statements from functional currency to presentation currency
●	surplus<br>reserve – comprises the annual appropriation of 10% of an entity’s profit after taxation as determined in accordance with<br>the PRC accounting standards for each calendar year until the balance reaches 50% of the relevant PRC entity’s registered paid-in<br>capital.
---	---

Retained earnings includes all current and prior period retained profit or loss.

16

2.17	Financial instruments

Financial assets and financial liabilities are recognized in the combined statement of financial position when a group entity becomes a party to the contractual provisions of the instrument. All regular purchases or sales of financial assets are recognized on a trade date basis. Regular purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the market place.

Financial assets and financial liabilities are initially measured at fair value except for trade receivables arising from contracts with customers which are initially measured in accordance with IFRS 15. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss (“FVTPL”)) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognized immediately in profit or loss. The effective interest method is a method of calculating the amortized cost of a financial asset or financial liabilities and of allocating interest income and interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts and payments (including all fees paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial asset or financial liability, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.

Financialassets

Subsequent measurement of financial assets

Financial assets that meet the following conditions are subsequently measured at amortized cost:

●	the<br>financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows;<br>and
●	the<br>contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest<br>on the principal amount outstanding.
---	---

Financial assets that meet the following conditions are subsequently measured at fair value through other comprehensive income (“FVTOCI”):

●	the<br>financial asset is held within a business model whose objective is achieved by both selling and collecting contractual cash flows; and
●	the<br>contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount<br>outstanding. All other financial assets are subsequently measured at FVTPL, except that at the date of initial application of IFRS 9,<br>initial recognition of a financial asset that the Group may irrevocably elect to present subsequent changes in fair value of an equity<br>investment in other comprehensive income (“OCI”) if that equity investment is neither held for trading nor contingent consideration<br>recognized by an acquirer in a business combination to which IFRS 3 Business Combinations applies.
---	---

17

2.17	Financial instruments

Financialassets

Impairment of financial assets

The Group performs impairment assessment under an expected credit loss (“ECL”) model on financial assets (including deposits, trade and other receivables, pledged bank deposits, restricted cash and bank balances and cash) which are subject to impairment under IFRS 9. The amount of ECL is updated at each reporting date to reflect changes in credit risk since initial recognition.

Lifetime ECL represents the ECL that will result from all possible default events over the expected life of the relevant instrument. In contrast, 12-month ECL (“12m ECL”) represents the portion of lifetime ECL that is expected to result from default events that are possible within 12 months after the reporting date. Assessment are done based on the Group’s historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current conditions at the reporting date as well as the forecast of future conditions.

The Group measures the loss allowance for deposits, other receivables, pledged bank deposits, restricted cash and bank balances and cash equal to 12m ECL, unless there has been a significant increase in credit risk since initial recognition, in which case the Group recognized lifetime ECL. The assessment of whether lifetime ECL should be recognized is based on significant increases in the likelihood or risk of a default occurring since initial recognition.

The Group recognizes lifetime ECL for trade receivables. The ECL on these assets are assessed collectively using a provision matrix with appropriate grouping.

(i) Significant increase in credit risk

In assessing whether the credit risk has increased significantly since initial recognition, the Group compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial instrument as at the date of initial recognition. In making this assessment, the Group considers both quantitative and qualitative information that is reasonable and supportable, including historical experience and forward – looking information that is available without undue cost or effort.

In particular, the following information is taken into account when assessing whether credit risk has increased significantly:

●	an<br>actual or expected significant deterioration in the financial instrument’s external (if available) or internal credit rating;
●	significant<br>deterioration in external market indicators of credit risk;
---	---
●	existing<br>or forecast adverse changes in business, financial or economic conditions that are expected to cause a significant decrease in the debtor’s<br>ability to meet its debt obligations;
---	---
●	an<br>actual or expected significant deterioration in the operating results of the debtor;
---	---
●	an<br>actual or expected significant adverse change in the regulatory, economic, or technological environment of the debtor that results in<br>a significant decrease in the debtor’s ability to meet its debt obligations.
---	---

Irrespective of the outcome of the above assessment, the Group presumes that the credit risk has increased significantly since initial recognition when contractual payments are more than 30 days past due, unless the Group has reasonable and supportable information that demonstrates otherwise.

The Group regularly monitors the effectiveness of the criteria used to identify whether there has been a significant increase in credit risk and revises them as appropriate to ensure that the criteria are capable of identifying significant increase in credit risk before the amount becomes past due.

18

2.17	Financial instruments

Financialassets

Impairment of financial assets

(ii) Definition of default

For internal credit risk management, the Group considers an event of default occurs when information developed internally or obtained from external sources indicates that the debtor is unlikely to pay its creditors, including the Group, in full (without taking into account any collaterals held by the Group).

(iii) Credit-impaired financial assets

A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of that financial asset have occurred. Evidence that a financial asset is credit-impaired includes observable data about the following even

(a) significant financial difficulty of the counterparty;

(b) a breach of contract, such as a default or past due event;

It is becoming probable that the borrower will enter bankruptcy or other financial reorganization.

(iv) Write-off policy

The Group writes off a financial asset when there is information indicating that the counterparty is in severe financial difficulty and there is no realistic prospect of recovery, for example, when the counterparty has been placed under liquidation or has entered into bankruptcy proceedings. Financial assets written off may still be subject to enforcement activities under the Group’s recovery procedures, taking into account legal advice where appropriate. A write-off constitutes a derecognition event. Any subsequent recoveries are recognized in profit or loss.

(v) Measurement and recognition of ECL

The measurement of ECL is a function of the probability of default, loss given default (i.e. the magnitude of the loss if there is a default) and the exposure at default. The assessment of the probability of default and loss given default is based on historical data adjusted by forward-looking information. Estimation of ECL reflects an unbiased and probability-weighted amount that is determined with the respective risks of default occurring as the weights.

Generally, the ECL is estimated as the difference between all contractual cash flows that are due to the Group in accordance with the contract and all the cash flows that the Group expects to receive, discounted at the effective interest rate determined at initial recognition. For a lease receivable, the cash flows used for determining the ECL is consistent with the cash flows used in measuring the lease receivable in accordance with IFRS 16.

For collective assessment, the Group takes into consideration the following characteristics when formulating the grouping:

●	Past-due<br>status;
●	Nature,<br>size and industry of debtors; and
---	---
●	External<br>credit ratings where available.
---	---

19

2.17	Financial instruments

Financialassets

Impairment of financial assets

(v) Measurement and recognition of ECL

The grouping is regularly reviewed by management to ensure the constituents of each group continue to share similar credit risk characteristics.

Interest income is calculated based on the gross carrying amount of the financial asset unless the financial asset is credit impaired, in which case interest income is calculated based on amortized cost of the financial asset.

The Group recognizes an impairment gain or loss in profit or loss for all financial instruments by adjusting their carrying amount, with the exception of trade and other receivables where the corresponding adjustment is recognized through a loss allowance account.

Derecognitionof financial assets

The Group recognized a financial asset only when the contractual rights to the cash flows from the asset expire or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.

On derecognition of a financial asset measured at amortized cost, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss.

Financialliabilities and equity instruments

Classification as debt or equity

Debt and equity instruments issued by a group entity are classified either as financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.

Measurement of financial liabilities

All financial liabilities are subsequently measured at amortized cost using the effective interest method or at FVTPL.

Financial liabilities at amortized cost

Financial liabilities including borrowings and other payables are subsequently measured at amortized cost, using the effective interest method.

Financial liabilities at FVTPL

Financial liabilities are classified as at FVTPL when the financial liability is contingent consideration of an acquirer in a business combination to which IFRS 3 applies.

Derecognition of financial liabilities

The Group recognizes financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability recognized and the consideration paid and payable is recognized in profit or loss.

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2.18	Impairment<br>of financial and non-financial assets

Financial assets are reviewed at each balance sheet date, or whenever an event indicates that the carrying amount may not be recoverable. With effect from January 1, 2018, loss allowances for ECL on financial assets which are held at amortized cost are recognized on the initial recognition of the underlying asset. As permitted by IFRS 9, the loss allowance on trade receivables arising from the recognition of revenue under IFRS 15 are initially measured at an amount equal to lifetime expected losses. Allowances in respect of loans and other receivables are initially recognized at an amount equal to 12m ECL. Where the credit risk on the receivables has increased significantly since initial recognition, allowances are measured at an amount equal to the lifetime ECL.

Non-financial assets are reviewed for impairment whenever events indicate that the carrying amount of an asset may not be recoverable. In addition, assets that have indefinite useful lives are tested annually for impairment. An impairment loss is recognized to the extent that the carrying value exceeds the higher of the asset’s fair value less costs to sell and its value in use.

2.19	Related parties

Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or significant influence, such as a family member or relative, shareholder, or a related corporation.

2.20	New and amended accounting<br> standards

All new standards and amendments that are effective for annual reporting period commencing January 1, 2021 have been applied by the Group for the year ended December 31, 2021. The adoption of these new and amended standards did not have material impact on the combined financial statements of the Group. A number of new standards and amendments to standards have not come into effect for the year beginning January 1, 2021, and they have not been early adopted by the Group in preparing these combined financial statements. None of these new standards and amendments to standards is expected to have a significant effect on the combined financial statements of the Group.

The following new and amended standards are not expected to have a significant impact on the Group’s combined financial statements.

–	COVID-19-Related<br>Rent Concessions beyond 30 June 2021 (Amendment to IFRS 16)
–	Annual<br>Improvements to IFRS Standards 2018–2020
---	---
–	Property,<br>Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16)
---	---
–	Reference<br>to Conceptual Framework (Amendments to IFRS 3)
---	---
–	Classification<br>of Liabilities as Current or Non-current (Amendments to IAS 1)
---	---
–	Disclosure<br>of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2)
---	---
–	Definition<br>of Accounting Estimates (Amendments to IAS 8)
---	---

Adoption of new standards in 2020

The following other standards, interpretations and amendments to existing standards became effective on 1 January 2020 and have not had a material impact on the Group:

●	Amendments<br>to IAS 1 and IAS 8 – “Definition of Material”;
●	Amendments<br>to IFRS 3 – “Definition of a Business”;
---	---
●	Amendments<br>to IFRS 9, IAS 39 and IFRS 7 – “Interest Rate Benchmark Reform”;
---	---
●	Amendments<br>to IFRS 16 “Leases” in relation to COVID-19 related rent concessions; and
---	---
●	Amendments<br>to References to the Conceptual Framework in IFRS Standards.
---	---

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3.	TRADE<br>RECEIVABLES
****	As of December 31,					****
---	---	---	---	---	---	---
****	2021		****	2020		****
Trade receivables	$	1,246,205		$	1,163,012
Impairment provision for trade receivables		(69,530	)		(145,743	)
Trade receivables, net	$	1,176,675		$	1,017,269

The following tables details the Group’s trade receivables, net:

****	Trade receivables, net – as of December 31, 2021
****	Current		<30 days		31-90 days		91-180 days		181-365 days		1 year and over		Total
Trade receivables, net	$	539,889	$	65,321	$	50,995	$	443,496	$	30,420	$	46,554	$	1,176,675
****	Trade receivables, net – as of December 31, 2020
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
****	Current		<30 days		31-90 days		91-180 days		181-365 days		1 year and over		Total
Trade receivables, net	$	609,974	$	86,078	$	11,042	$	1,213	$	147,451	$	161,511	$	1,017,269

The impairment provision for trade receivables are as below:

****	2021		****	2020
Balance at January 1,	$	145,743		$	-
Charge to the statement of profit or loss		-			137,941
Releases		(78,904	)		-
Exchange difference		2,691			7,802
Balance at December 31,	$	69,530		$	145,743
4.	OTHER<br>RECEIVABLES
---	---
****	As of December 31,					****
---	---	---	---	---	---	---
****	2021		****	2020		****
Other receivables	$	3,707,571		$	3,445,787
Impairment provision for other receivables		(2,240,664	)		(116	)
Other receivables, net	$	1,466,907		$	3,445,671

The impairment provisions for other receivables are as below:

****	2021		2020
Balance at January 1,	$	116	$	-
Charge to the statement of profit or loss		2,211,914		110
Exchange difference		28,634		6
Balance at December 31,	$	2,240,664	$	116

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5.	INVENTORIES
****	As of December 31,
---	---	---	---	---
****	2021		2020
Robots	$	1,382,647	$	1,287,703
Alarm and surveillance equipment		683,432		932,382
	$	2,066,079	$	2,220,085
****	As of December 31,
---	---	---	---	---	---
****	2021		****	2020
Inventories	$	2,662,823		$	2,220,085
Impairment provision for inventories		(596,744	)		-
Inventories, net	$	2,066,079		$	2,220,085

The impairment provision for inventories are as below:

****	2021		2020
Balance at January 1,	$	-	$	-
Charge to the statement of profit or loss		589,118		-
Exchange difference		7,626		-
Balance at December 31,	$	596,744	$	-

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6.	PROPERTY, PLANT AND EQUIPMENT
****	Office equipment		****	Motor vehicles		****	Robots		****	Total		****
---	---	---	---	---	---	---	---	---	---	---	---	---
Cost
At January 1, 2020	$	158,406		$	136,252		$	-		$	294,658
Additions		3,467			-			1,119,722			1,123,189
Exchange difference		10,637			8,981			63,334			82,952
At December 31, 2020		172,510			145,233			1,183,056			1,500,799
Additions		5,362			-			1,307,771			1,313,133
Exchange difference		4,463			3,699			47,062			55,224
At December 31, 2021	$	182,335		$	148,932		$	2,537,889		$	2,869,156
Accumulated depreciation
At January 1, 2020	$	(142,532	)	$	(125,505	)	$	-		$	(268,037	)
Depreciation charged for the year		(9,399	)		(3,270	)		(44,587	)		(57,256	)
Exchange difference		(9,927	)		(8,457	)		(2,522	)		(20,906	)
At December 31, 2020		(161,858	)		(137,232	)		(47,109	)		(346,199	)
Depreciation charged for the year		(5,693	)		(2,011	)		(363,360	)		(371,064	)
Exchange difference		(4,196	)		(3,522	)		(5,903	)		(13,621	)
At December 31, 2021	$	(171,747	)	$	(142,765	)	$	(416,372	)	$	(730,884	)
Net book value
At December 31, 2021	$	10,588		$	6,167		$	2,121,517		$	2,138,272
At December 31, 2020	$	10,652		$	8,001		$	1,135,947		$	1,154,600

There was no impairment of property, plant and equipment recorded for the years ended December 31, 2021 and 2020. No property, plant and equipment were pledged as security for bank borrowings.

24

7.	INTANGIBLE<br>ASSETS
****	Computer software system		****
---	---	---	---
Cost
At January 1, 2020	$	220,881
Additions		218,687
Exchange difference		26,930
At December 31, 2020		466,498
Additions		233,917
Exchange difference		14,909
At December 31, 2021	$	715,324
Accumulated amortization
At January 1, 2020	$	(185,820	)
Amortization charged for the year		(27,101	)
Exchange difference		(11,917	)
At December 31, 2020		(224,838	)
Amortization charged for the year		(39,708	)
Exchange difference		(6,241	)
At December 31, 2021	$	(270,787	)
Net book value
At December 31, 2021	$	444,537
At December 31, 2020	$	241,660
8.	TRADE AND OTHER PAYABLES
---	---
****	As of December 31,
---	---	---	---	---
****	2021		2020
Trade payables – third parties	$	1,321,616	$	1,017,391
Accrued salaries and bonus		75,434		152,624
Other payables		177,868		469,019
Trade and other payables	$	1,574,918	$	1,639,034
9.	RIGHT-OF-USEASSETS AND OPERATING LEASE LIABILTIES
---	---

The carrying amounts of right-of-use assets are as below:

	2021			2020
Balance at January 1,	$	469,990		$	635,037
Additions		51,665			7,831
Depreciation for the year		(236,785	)		(203,661	)
Exchange difference		9,573			30,783
Balance at December 31,	$	294,443		$	469,990

Lease liabilities were measured at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate. The weighted average incremental borrowing rate applied to new leases during year 2021 and 2020 was 4.752% and 4.752%, respectively.

During the years ended December 31, 2021 and 2020, interest expense of $18,430 and $25,170 arising from lease liabilities was included in administrative expenses, respectively. Depreciation expense related to right-of-use assets was $236,785 and $203,661, respectively during the years ended December 31, 2021 and 2020.

25

10.	TAXATION

Valueadded tax (“VAT”)

The Group is subject to statutory VAT of 13% and 7% for goods and services respectively in the PRC. The output VAT is charged to customers who purchase goods and receive services from the Group and the input VAT is paid when the Group purchases goods and services from its vendors. The input VAT can be offset against the output VAT. The VAT payable is presented on the statements of financial position when input VAT is less than the output VAT. A recoverable balance is presented on the balance sheets when input VAT is larger than the output VAT.

Incometaxes

The Group’s companies incorporated in the PRC are subject to corporate income tax rate of 25% on taxable income in the PRC. Qualified high and new technology enterprises are entitled to a preferential corporate income tax rate of 15%.

The components of income tax provision are:

****	For the years ended December 31,					****
****	2021		****	2020		****
Current income tax (credit)/ expense for the year	$	(419	)	$	1,159
Deferred taxation		(62,428	)		(492	)
Total income tax (credit)/ expense	$	(62,847	)	$	667

The total income tax (credit)/charge differs from the amount computed by applying the statutory income tax rate of 25% for the year to loss before tax as a result of the following:

****	For the years ended December 31,					****
****	2021		****	2020		****
Loss before income tax expense	$	(2,846,534	)	$	(538,050	)
Income tax statutory rate		25	%		25	%
Income tax at statutory rate		(711,634	)		(134,513	)
Tax effect of preferential tax rate granted		-			(4,607	)
Tax effect of tax loss not recognized		694,783			136,713
Tax effect of deductible temporary differences not recognized		(62,428	)		(492	)
Tax effect of expenses not deductible for tax purposes		16,432			3,566
Income tax (credit)/ expense for the year	$	(62,847	)	$	667

26

10.	TAXATION

Deferredtaxation

---

Deferredtax assets

---

****	As of December 31,
****	2021		2020
The balance comprises temporary differences attributable to:
Impairment provision for trade and other receivables	$	63,769	$	520
****	Provision
---	---	---
Movements
At January 1, 2020	$	-
Credit to profit or loss		492
Exchange difference		28
At December 31, 2020	$	520
Credit to profit or loss	$	62,428
Exchange difference		821
At December 31, 2021	$	63,769

27

---

11.	FINANCIAL INSTRUMENTS
11.1	Classification<br>of financial instruments
---	---

The Group’s financial instruments are managed through operational strategies and internal controls to assure liquidity, profitability, and transaction security. Transactions involving financial instruments are regularly reviewed to assess the effectiveness of the risk exposure that management intends to cover (foreign exchange, and interest rate, among others).

The table below shows all of the financial instruments recognized in the financial statements, segregated by category:

****	As of December 31,
****	2021		2020
	Amortized cost
Financial assets
Cash and cash equivalents	$	186,772	$	197,158
Trade receivables		1,176,675		1,017,269
Other receivables		1,466,907		3,445,671
Amount due from related parties		337,857		372,046
Total	$	3,168,211	$	5,032,144
Financial liabilities
Trade and other payables	$	1,574,918	$	1,639,034
Total	$	1,574,918	$	1,639,034
11.2	Financial<br>management
---	---

The Group’s objectives on managing capital are to safeguard the Group’s ability to continue as a going concern and support the sustainable growth of the Group in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to enhance shareholders’ value in the long term.

11.3	Credit<br>risk

Prudent liquidity management implies maintaining sufficient cash and cash equivalents and the availability of funding through an adequate amount of committed credit facilities. The Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. The Group manages its operations to avoid any excessive concentration of counterparty risks. The Group takes all reasonable steps to seek assurance from the counterparties that they can fulfil their obligations. In addition, financial assets are monitored on an ongoing basis with the result that the Group’s exposure to credit loss remains low.

The Group had two customers constituting 10% or more of the revenue during the year ended December 31, 2021 and 2020 as follows:

	2021					2020
	Amount		%			Amount		%
Customer A	$	1,273,282		20.1	%	$	1,466,083		39.6	%
Customer B		904,692		14.3	%		486,169		13.1	%
	$	2,177,974		34.4	%	$	1,952,252		52.7	%

The following customers had trade receivables balance greater than 10% of total trade receivables at December 31, 2021 and 2020.

	2021					2020
	Amount		%			Amount		%
Customer A	$	47,751		4.1	%	$	140,110		13.8	%
Customer B		216,381		18.4	%		74,776		7.4	%
	$	264,132		22.5	%	$	214,886		21.2	%

28

11.	FINANCIAL INSTRUMENTS
11.3	Credit risk
---	---

Creditrisk exposure

---

The book value of financial assets represents the maximum credit exposure. The maximum risk exposure on financial information date was:

****	As of December 31,
****	2021		2020
Cash and cash equivalents	$	186,772	$	197,158
Trade receivables		1,176,675		1,017,269
Other receivables		1,466,907		3,445,671
Amount due from related parties		337,857		372,046
Total	$	1,363,447	$	1,214,427
11.4	Market<br>risk
---	---

Interest rate and inflation risk: Interest rate risk arises from the portion of debt and interest earning bank deposits remunerated at the PRC Interbank Deposit rate, which may adversely affect the financial income or expenses in the event an unfavorable change in interest and inflation rates takes place.

11.5	Liquidity<br>risk

The Group’s primary cash requirements are for operating expenses and purchases of fixed assets. The Group mainly finances its working capital requirements from cash generated from funds raised from operation and advances from related parties.

The Group’s policy is to regularly monitor current and expected liquidity requirements to ensure it maintains sufficient cash and cash equivalents and an adequate amount of committed credit facilities to meet its liquidity requirements in the short and long term.

At the reporting date, the contractual undiscounted cash flows of the Group’s current financial liabilities approximate their respective carrying amounts due to their short maturities.

The table below shows the contractual maturities of financial liabilities:

	As of December 31, 2021
	Carrying amount		Cash contractual cash flow		6 months or less
Trade and other payables	$	1,574,918	$	1,574,918	$	1,574,918
Contract liabilities		89,315		89,315		89,315
Income tax payables		307		307		307
	$	1,664,540	$	1,664,540	$	1,664,540
****	As of December 31, 2020
---	---	---	---	---	---	---
****	Carrying amount		Cash contractual cash flow		6 months or less
Trade and other payables		1,639,034		1,639,034		1,639,034

29

11.6	Impact<br>of COVID-19

The Coronavirus Disease (COVID-19) outbreak and the measures taken to contain the spread of the pandemic have created a high level of uncertainty to global economic prospects and this has impacted the Group’s operations and its financial performance in year 2021. As COVID-19 continues to evolve with significant level of uncertainty, management of the Group is unable to reasonably estimate the full financial impact of COVID-19 on the Group’s financial results in year 2022. The Group is monitoring the situation closely and to mitigate the financial impact, it is conscientiously managing its cost by adopting an operating cost reduction strategy and conserving liquidity by working with major creditors to align repayment obligations with receivable collections.

11.7	Fair<br>value measurements

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurement for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability.

Accounting guidance establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level input that is significant to the fair value measurement. Accounting guidance establishes three levels of inputs that may be used to measure fair value:

Level 1—Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2—Include other inputs that are directly or indirectly observable in the marketplace.

Level 3—Unobservable inputs which are supported by little or no market activity.

Accounting guidance also describes three main approaches to measuring the fair value of assets and liabilities: the (1) market approach, (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset.

Financial assets and liabilities of the Group mainly consist of cash and cash equivalents, restricted cash, trade and other receivables, amounts due from related parties, other current assets, trade payables, amounts due to related parties, accruals and other liabilities. As of December 31, 2021 and 2020, the carrying values of cash and cash equivalents, restricted cash, trade and other receivables, amounts due from related parties, trade and other payables, contract liabilities, amounts due to related parties approximate their fair values due to the short-term maturity of these instruments.

30

12.	RELATED<br>PARTY BALANCES AND TRANSACTIONS

The table below sets forth the major related parties and their relationship with the Group as of December 31, 2021:

Name of related parties	Relationship with the Group
Tu Jingyi (“Mr. Tu”)	Controlling shareholder
Shenzhen Kewei Robot Technology Co., Ltd. (“Shenzhen<br> Kewei”, 深圳科卫机器人科技有限公司)	Mr. Tu is the majority shareholder of its immediate<br> holding company
Shenzhen<br> Zhongzhi Yonghao Robot Co., Ltd.<br><br> <br>(“Shenzhen<br> Zhongzhi Yonghao”, 深圳中智永浩机器人有限公司)	Mr. Tu is the majority shareholder of its immediate<br> holding company
Shenzhen<br> Qinban Technology Co., Ltd.<br><br> <br>(深圳市秦班科技有限公司)	Mr. Tu is the majority shareholder of its immediate<br> holding company
Shenzhen<br> Intelligent Guardforce Robot Technology Co., Ltd.<br><br> <br>(深圳中智卫安机器人科技有限公司)	Controlled by Mr. Tu
China<br> Security & Fire Daming Technology Co., Ltd.<br><br> <br>(中安消达明科技有限公司)	Mr. Tu’s father is the majority shareholder of<br> its immediate holding company
Shanghai<br> Nanshao Kewei Intelligent Technology Co., Ltd.<br><br> <br>(上海南晓科卫智能科技有限公司)	Mr. Tu is the majority shareholder of its immediate<br> holding company
Security<br> and Surveillance Investment (China) Co., Ltd.<br><br> <br>(安防投资（中国）有限公司)	Mr. Tu’s father is the majority shareholder of<br> its ultimate holding company
Security<br> and Surveillance Operation Service (China) Co., Ltd. Beijing Branch<br><br> <br>(安防运营服务（中国）有限公司北京分公司)	Mr. Tu’s father is the majority shareholder of<br> its ultimate holding company
Shanghai<br> Nanshao Fire Engineering and Equipment Co., Ltd.<br><br> <br>(上海南晓消防工程设备有限公司)	Mr. Tu’s father is the majority shareholder of<br> its ultimate holding company
Guardforce<br> Security Service (Shanghai) Co., Ltd.<br><br> <br>(卫安保安服务（上海）有限公司)	Mr. Tu’s father is the majority shareholder of<br> its immediate holding company
China<br> Security and Fire Technology Co., Ltd.<br><br> <br>(中安消技术有限公司)	Mr. Tu’s father is the majority shareholder of<br> its ultimate holding company

31

12.	RELATED PARTY BALANCES AND TRANSACTIONS

The table below sets forth the major related parties and their relationship with the Group as of December 31, 2021:

Name of related parties	Relationship with the Group
Beijing<br> Keweian Robot Technology Co., Ltd.<br><br> <br>(北京科卫安机器人技术有限公司)	Mr. Tu is the majority shareholder of its ultimate<br> holding company
Chongqing<br> Kewei Robot Technology Co., Ltd.<br><br> <br>(重庆科卫机器人技术有限公司)	Mr. Tu is the majority shareholder of its ultimate<br> holding company
Shaanxi<br> Kewei China North Industries Robot Service Co., Ltd.<br><br> <br>(陕西科卫中兵机器人服务有限公司)	Mr. Tu is the majority shareholder of its ultimate<br> holding company
Xinjiang<br> Keweian Robot Technology Co., Ltd.<br><br> <br>(新疆科卫安机器人科技有限公司)	Mr. Tu is the majority shareholder of its ultimate<br> holding company
Inner<br> Mongolia Kewei Robot Technology Co., Ltd.<br><br> <br>(内蒙古科卫机器人科技有限公司)	Mr. Tu is the majority shareholder of its ultimate<br> holding company
Sichuan<br> Qiantu Guardforce Robot Technology Co., Ltd.<br><br> <br>(四川前途卫安机器人科技有限公司)	Mr. Tu is the majority shareholder of its ultimate<br> holding company
Yunan<br> Kewei Robot Technology Co., Ltd.<br><br> <br>(云南科卫机器人科技有限公司)	Mr. Tu is the majority shareholder of its ultimate<br> holding company
Gansu<br> Keweian Robot Technology Co., Ltd.<br><br> <br>(甘肃科卫安机器人科技有限公司)	Mr. Tu is the majority shareholder of its ultimate<br> holding company
Hubei<br> Kewei Robot Technology Co., Ltd.<br><br> <br>(湖北科卫机器人技术有限公司)	Mr. Tu is the majority shareholder of its ultimate<br> holding company
Zhuhai<br> Kewei Robot Technology Co., Ltd.<br><br> <br>(珠海科卫机器人科技有限公司)	Mr. Tu is the majority shareholder of its ultimate<br> holding company
Hangzhou<br> Kewei Robot Co., Ltd.<br><br> <br>(杭州科卫机器人有限公司)	Mr. Tu is the majority shareholder of its ultimate<br> holding company
Hainan<br> Kewei Robot Technology Co., Ltd.<br><br> <br>(海南科卫机器人科技有限公司)	Mr. Tu is the majority shareholder of its ultimate<br> holding company
Jilin<br> Kewei Robot Technology Co., Ltd.<br><br> <br>(吉林科卫机器人技术有限公司)	Mr. Tu is the majority shareholder of its ultimate<br> holding company
Guizhou<br> Kewei Robot Technology Co., Ltd.<br><br> <br>(贵州科卫机器人科技有限公司)	Mr. Tu is the majority shareholder of its ultimate<br> holding company
Nanjing<br> Zhongzhi Yonghao Robot Co., Ltd.<br><br> <br>(南京中智永浩机器人有限公司)	Mr. Tu is the majority shareholder of its ultimate<br> holding company
Jinan<br> Kewei Robot Technology Co., Ltd<br><br> <br>(济南科卫机器人科技有限公司)	Mr. Tu is the majority shareholder of its ultimate<br> holding company

32

12.	RELATED PARTY BALANCES AND TRANSACTIONS

The table below sets forth the major related parties and their relationship with the Group as of December 31, 2021:

Name of related parties	Relationship with the Group
Guangxi<br> Kewei Robot Technology Co., Ltd.<br><br> <br>(“Guangxi<br> Kewei”, 广西科卫机器人科技有限公司)	Mr. Tu is the majority shareholder of its ultimate<br> holding company
Anhui<br> Keweien Robot Technology Co., Ltd.<br><br> <br>(安徽科卫恩机器人科技有限公司)	Mr. Tu is the majority shareholder of its ultimate<br> holding company
Tianjin Kewei Robot Technology Co., Ltd. (天津科卫机器人科技有限公司)	Mr. Tu is the majority shareholder of its ultimate<br> holding company
Fuzhou Kewei Robot Technology Co., Ltd. (福州科卫机器人科技有限公司)	Mr. Tu is the majority shareholder of its ultimate<br> holding company
Henan<br> Kewei Robot Technology Co., Ltd.<br><br> <br>(河南科卫机器人科技有限公司)	Mr. Tu is the majority shareholder of its ultimate<br> holding company
Nanchang<br> Zongkun Intelligent Technology Co., Ltd.<br><br> <br>(南昌踪坤智能科技有限公司)	Mr. Tu is the majority shareholder of its ultimate<br> holding company
Hunan<br> Keweian Robot Technology Co., Ltd.<br><br> <br>(湖南科卫安机器人科技有限公司)	Mr. Tu is the majority shareholder of its ultimate<br> holding company
Shanxi<br> Keweian Robot Technology Co., Ltd.<br><br> <br>(山西科卫安机器人科技有限公司)	Mr. Tu is the majority shareholder of its ultimate<br> holding company
Heilongjiang<br> Kewei Robot Technology Co., Ltd.<br><br> <br>(黑龙江科卫机器人科技有限公司)	Mr. Tu is the majority shareholder of its ultimate<br> holding company
Hebei<br> Kewei Robot Technology Co., Ltd.<br><br> <br>(河北科卫机器人科技有限公司)	Mr. Tu is the majority shareholder of its ultimate<br> holding company
Ningbo<br> Kewei Robot Technology Co., Ltd.<br><br> <br>(宁波科卫机器人科技有限公司)	Mr. Tu is the majority shareholder of its ultimate<br> holding company
Suzhou<br> Keweien Robot Technology Co., Ltd.<br><br> <br>(苏州科卫恩机器人科技有限公司)	Mr. Tu is the majority shareholder of its ultimate<br> holding company
Shenyang<br> Keweian Robot Technology Co., Ltd.<br><br> <br>(沈阳科卫安机器人科技有限公司)	Mr. Tu is the majority shareholder of its ultimate<br> holding company
Xiamen<br> Kewei Robot Technology Co., Ltd.<br><br> <br>(厦门科卫机器人科技有限公司)	Mr. Tu is the majority shareholder of its ultimate<br> holding company
Dalian<br> Kewei Robot Technology Co., Ltd.<br><br> <br>(大连科卫机器人科技有限公司)	Mr. Tu is the majority shareholder of its ultimate<br> holding company
Qinghai<br> Kewei Robot Technology Co., Ltd.<br><br> <br>(青海科卫机器人科技有限公司)	Mr. Tu is the majority shareholder of its ultimate<br> holding company

33

12.	RELATED PARTY BALANCES AND TRANSACTIONS

The table below sets forth the major related parties and their relationship with the Group as of December 31, 2021:

Name of related parties	Relationship with the Group
Ningxia<br> Kewei Robot Technology Co., Ltd.<br><br> <br>(宁夏科卫机器人科技有限公司)	Mr. Tu is the majority shareholder of its ultimate<br> holding company
Xizhuang<br> Kewei Robot Technology Co., Ltd.<br><br> <br>(西藏科卫机器人科技有限公司)	Mr. Tu is the majority shareholder of its ultimate<br> holding company
Qingdao<br> Kewei Robot Technology Co., Ltd.<br><br> <br>(青岛科卫机器人科技有限公司)	Mr. Tu is the majority shareholder of its ultimate<br> holding company

34

12.	RELATED PARTY BALANCES AND TRANSACTIONS

The principal related party balances and transactions as of and for the years ended December 31, 2021 and 2020 are as follows:

Amountsdue from related parties:

****	As of December 31,
****	2021		2020
Beijing Keweian Robot Technology Co., Ltd.	$	552	$	-
Chongqing Kewei Robot Technology Co., Ltd.		5,213		-
Shaanxi Kewei China Northern Industries Robot Service Co., Ltd.		9,396		-
Xinjiang Keweian Robot Technology Co., Ltd.		565		-
Inner Mongolia Kewei Robot Technology Co., Ltd.		5,892		-
Sichuan Qiantu Guardforce Robot Technology Co., Ltd.		4,096		-
Yunan Kewei Robot Technology Co., Ltd.		4,390		-
Gansu Keweian Robot Technology Co., Ltd.		2,071		-
Hubei Kewei Robot Technology Co., Ltd		6,468		-
Zhuhai Kewei Robot Technology Co., Ltd.		188		-
Hangzhou Kewei Robot Co., Ltd.		4,698		-
Hainan Kewei Robot Technology Co., Ltd.		7,308		-
Jilin Kewei Robot Technology Co., Ltd.		3,726		-
Guizhou Kewei Robot Technology Co., Ltd.		5,011		-
Shenzhen Intelligent Guardforce Robot Technology Co., Ltd.		188		-
Shenzhen Kewei		14,128		306
Nanjing Zhongzhi Yonghao Robot Co., Ltd.		5,581		-
Jinan Kewei Robot Technology Co., Ltd.		4,135		-
Guangxi Kewei Robot Technology Co., Ltd.		2,785		-
Anhui Keweien Robot Technology Co., Ltd.		6,507		-
Tianjin Kewei Robot Technology Co., Ltd.		5,063		-
Fuzhou Kewei Robot Technology Co., Ltd.		2,973		-
Henan Kewei Robot Technology Co., Ltd.		5,932		-
Nanchang Zongkun Intelligent Technology Co., Ltd.		6,477		-
Hunan Keweian Robot Technology Co., Ltd.		4,670		-
Shanxi Keweian Robot Technology Co., Ltd.		5,092		-
Heilongjiang Kewei Robot Technology Co., Ltd.		11,327		-
Hebei Kewei Robot Technology Co., Ltd.		579		-
Ningbo Kewei Robot Technology Co., Ltd.		3,481		-
Suzhou Keweien Robot Technology Co., Ltd.		3,445		-
Shenyang Keweian Robot Technology Co., Ltd.		10,088		-
Xiamen Kewei Robot Technology Co., Ltd.		4,621		-
Dalian Kewei Robot Technology Co., Ltd.		7,845		-
Qinghai Kewei Robot Technology Co., Ltd.		4,687		-
Ningxia Kewei Robot Technology Co., Ltd.		3,120		-
Xizhuang Kewei Robot Technology Co., Ltd.		1,110		-
Qingdao Kewei Robot Technology Co., Ltd.		565		-
Shanghai Nanshao Kewei Intelligent Technology Co., Ltd.		47,093		45,923
Shanghai Nanshao Fire Engineering and Equipment Co., Ltd.		109,883		107,153
Security and Surveillance Investment (China) Co., Ltd.		-		30,681
Security and Surveillance Operation Service (China) Co., Ltd. – Beijing Branch		-		25,793
Guardforce Security Service (Shanghai) Co., Ltd.		-		151,545
China Security & Fire Daming Technology Co., Ltd.		6,908		10,645
				-
	$	337,857	$	372,046

35

12.	RELATED<br>PARTY BALANCES AND TRANSACTIONS

Amounts due from related parties as of December 31, 2021 and December 31, 2020 mainly represent business advances for operational purpose.

Amountsdue to related parties:

---

****	As of December 31,
****	2021		2020
Shenzhen Kewei	$	3,119,084	$	1,677,271
Shenzhen Qinban Technology Co., Ltd.		106,809		-
Shenzhen Zhongzhi Yonghao		335,343		-
Guardforce Security Service (Shanghai) Co., Ltd.		204,068		198,999
China Security and Fire Technology Co., Ltd.		7,849		7,654
Guangxi Kewei		6,279		-
	$	3,779,432	$	1,883,924
Amounts due to Shenzhen Kewei Robot<br> Technology Co., Ltd. represent accounts payable for the purchase of robots.
---

Relatedparty transactions:

---

****	For the years ended December 31,
****	2021		2020
Service/ Products received from related parties:
Shenzhen Zhongzhi Yonghao  (Note (a))	$	819,690	$	-
Shenzhen Kewei  (Notes (a) & (b))		1,505,073		3,633,324
Guangxi Kewei  (Note (a))		5,486		-
	$	2,330,249	$	3,633,324
(a)	Shenzhen Zhongzhi Yonghao,<br> Shenzhen Keiwei and Guangxi Kewei sold robots to the Group.
---	---
(b)	Shenzhen Kewei also provided<br> technical support services to the Group.
---	---
13.	SUBSEQUENT<br>EVENTS
---	---

On March 11, 2022, Shenzhen Kewei Robot Technology Co., Limited (“Shenzhen Kewei”) entered into a Sale and Purchase Agreement with Guardforce AI Co., Limited (“GFAI”) to sell 100% of the equity interests in Shenzhen Keweien Robot Service Co., Ltd. (“Shenzhen GFAI”) and Guangzhou Kewei Robot Technology Co., Ltd. (“Guangzhou GFAI”) to GFAI. The acquisition serves an integral role in the growth of GFAI’s robotic AI solution business as a service (RaaS) business initiative. The acquisition was closed on March 22, 2022. The acquisition purchase price of $10,000,000 was paid in a mix of cash (10%) and restricted ordinary shares of GFAI (90%). On March 14, 2022, GFAI issued 2,142,852 restricted Ordinary Shares to the Shenzhen Kewei’s designated parties.

On May 24, 2022, Shenzhen Yeantec Co., Limited (“Yeantec”) entered into a Sale and Purchase Agreement with Guardforce AI Co., Limited (“GFAI”) to sell 100% of the equity interests in Beijing Wanjia Security System Co., Ltd. (“Beijing Wanjia”) to GFAI. The acquisition serves the growth of GFAI’s other security business. The acquisition was closed on June 22, 2022. The acquisition purchase price of $8,400,000 was paid in a mix of cash (10%) and restricted ordinary shares of GFAI (90%). On June 16, 2022, GFAI issued 3,780,000 restricted Ordinary Shares to Yeantec’s designated parties. The subsequent events disclosed are unaudited. The discussion of pro forma condensed combined financial statements is outside the Combined Financial Statements.

36

Exhibit 99.2

GUARDFORCE AI CO., LIMITED.

UNAUDITED PRO FORMA

CONDENSED COMBINED FINANCIAL STATEMENTS

On March 22, 2022, Guardforce AI Co., Limited (the “Company” or “GFAI”) completed the acquisition of Shenzhen Keweien Robot Service Co., Ltd. (“Shenzhen Keweien”) and Guangzhou Kewei Robot Technology Co., Ltd. (“Guangzhou Kewei”). The purchase price of $10,000,000 consisted of $1,000,000 paid in cash (10%) and restricted ordinary shares of the Company at $4.2 per share (90%).

On June 22, 2022, the Company completed the acquisition of Beijing Wanjia Security System Co., Ltd. (“Beijing Wanjia”) for $8,400,000 consisted of $840,000 paid in cash (10%) and restricted ordinary shares of the Company at $2 per share (90%).

The acquisitions were accounted for under the acquisition method of accounting pursuant to IFRS 3—Business Combinations. Accordingly, the assets acquired and liabilities assumed have been recorded at their estimated fair values at the date of the acquisition. The purchase price has been allocated to the assets acquired and the liabilities assumed based upon estimates of their respective fair values, which are subject to adjustment.

Included herein are the unaudited pro forma combined financial statements, which are not necessarily indicative of what the Company’s financial position or results of operations would have been had the Company completed the acquisitions at the dates indicated. In addition, the unaudited pro forma condensed combined financial information does not purport to project the future financial position or operating results of the Company after the acquisitions. The pro forma information is based on the assumptions, adjustments and eliminations described in the accompanying notes to the unaudited pro forma combined financial statements, which form an integral part of the statements. The unaudited pro forma condensed combined financial information does not reflect any cost savings, operating synergies or revenue enhancements that may be achieved as a result of the acquisitions, the costs necessary to achieve these cost savings, operating synergies and revenue enhancements or the costs to be incurred to integrate the operations of each acquisition.

The following unaudited pro forma condensed combined financial statements combined the historical consolidated financial statements of the Company and the historical financial statements of Shenzhen Keweien, Guangzhou Kewei and Beijing Wanjia adjusted to give effect to the impact of the acquisitions. The unaudited pro forma condensed combined balance sheet presents the combined financial position giving effect to the acquisitions as if they had occurred on December 31, 2021. The unaudited pro forma combined statements of operations for the year ended December 31, 2021 present the combined results of operations as if the acquisitions had occurred on January 1, 2021. These unaudited pro forma condensed combined financial statements have been prepared in accordance with Regulation Article 11 of Regulation S-X.

These unaudited proforma condensed combined financial statements should be read in connection with separate historical financial statements of the Company as of and for the year ended December 31, 2021, which are incorporated by reference to its Annual Report on Form 20-F.

GUARDFORCE AI CO., LIMITED.

UNAUDITED PRO FORMA

CONDENSED COMBINED BALANCE SHEET

As of December 31, 2021

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	GFAIhistorical		ShenzhenKeweienhistorical		GuangzhouKeweihistorical		BeijingWanjiahistorical		Pro FormaAdjustments			Pro Forma<br><br> <br>Combined
ASSETS
Current assets:
Cash and cash equivalents	$	12,728,783	$	10,892	$	25,674	$	150,207	$	(1,000,000	)(a)	$	11,075,556
										(840,000	)(b)
Restricted cash		1,600,000		-		-		-		-			1,600,000
Trade receivables		4,939,568		295,215		145,807		735,654		-			6,116,244
Other current assets		1,275,981		14,004		23,475		1,437,828		(8,400	)(c)		2,742,888
Inventories		1,387,549		679,660		702,987		683,432		-			3,453,628
Amount due from related parties		26,007		159,846		-		178,011					363,864
Total current assets		21,957,888		1,159,617		897,943		3,185,132		-			25,352,180
Non-current assets
Restricted cash	$	1,525,028		-		-		-				$	1,525,028
Property, plant and equipment		9,897,301		644,643		1,482,607		11,021					12,035,572
Right-of-use assets		2,364,993		5,947		29,602		258,894		-			2,659,436
Intangible assets, net		164,316		-		-		444,537		1,592,783	(d)		2,977,820
										776,184	(e)
Goodwill		329,534		-		-		-		1,867,009	(f)		2,608,405
										411,862	(g)
Withholding taxes receivables, net		3,531,953		-		-		-					3,531,953
Deferred tax assets, net		1,635,638		1,455		541		61,773					1,699,407
Other non-current assets		345,586		-		-		-					345,586
Total non-current assets		19,794,349		652,045		1,512,750		776,225					27,383,207
Total assets	$	41,752,237	$	1,811,662	$	2,410,693	$	3,961,357		-		$	52,735,387

2

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	GFAIhistorical		ShenzhenKeweienhistorical		GuangzhouKeweihistorical		BeijingWanjiahistorical		Pro FormaAdjustments			Pro FormaCombined
LIABILITIES AND EQUITY
Current liabilities:
Trade and other payable	$	1,028,721	$	73,250	$	52,481	$	1,457,588	$	(8,400	)(c)	$	2,603,640
Borrowings		933,110		-		-		-		-			933,110
Borrowings from related parties		13,506,184		-		-		-		-			13,506,184
Current portion of operating lease liabilities		2,366,045		3,894		21,505		204,677		-			2,596,121
Current portion of finance lease liabilities, net		619,301		-		-		-		-			619,301
Contract liabilities		-		56,717		32,598		-		-			89,315
Other current liabilities		1,824,635		-		-		-		-			1,824,635
Income tax payables		-		-		307		-		-			307
Amount due to related parties		2,217,752		1,585,841		1,981,675		211,916		-			5,997,184
Total current liabilities		22,495,748		1,719,702		2,088,566		1,874,181					28,169,797
Non-current liabilities:
Borrowings	$	859,120		-		-		-		-		$	859,120
Borrowings from related parties		5,332,803		-		-		-		-			5,332,803
Operating lease liabilities		-		2,053		8,098		54,217					64,368
Finance lease liabilities, net		666,455		-		-		-		-			666,455
Other non-current liabilities		54,000		-		-		-		-			54,000
Provision for employee benefits		5,819,132		-		-		-		-			5,819,132
Total non-current liabilities		12,731,510		2,053		8,098		54,217					12,795,878
Total liabilities	$	35,227,258		1,721,755		2,096,664		1,928,398				$	40,965,675

---

3

	GFAIhistorical			ShenzhenKeweienhistorical			GuangzhouKeweihistorical		BeijingWanjiahistorical			Pro FormaAdjustments			Pro FormaCombined
Equity:
Ordinary shares – par value $0.003 authorized 300,000,000 shares, issued and outstanding 21,201,842 shares	$	63,606			-			-				$	6,428	(h)	$	81,374
													11,340	(i)
Share capital		-			430,830			287,220		4,308,302			(5,026,352	)		-
Subscription receivable		(50,000	)		-			-		-			-			(50,000	)
Additional paid-in capital		15,379,595			-			-		-			2,613,636	(j)		19,947,461
													1,954,260	(k)
Surplus reserve		-			-			-		34,354			(34,354	)
Legal reserve		223,500			-			-		-			-			223,500
Warrants reserve		251,036			-			-		-						251,036
Exchange reserve		-			31,078			26,216		358,952			(74,189	)(l)		232,276
													(109,781	)(m)
Deficit		(10,204,220	)		(372,000	)		593		(2,668,649	)		631,966	(n)		(9,777,427	)
													2,834,883	(o)
Accumulated other comprehensive income		821,527			-			-		-						821,527
Capital & reserves attributable to equity holders of the Company		6,485,014			89,908			314,029		2,032,959						11,729,747
Non-controlling interests		39,965			-			-		-						39,965
Total equity		6,524,979			89,908			314,029		2,032,959						11,769,712
Total liabilities and equity	$	41,752,237			1,811,663			2,410,693		3,961,357					$	52,735,387

4

GUARDFORCE AI CO., LIMITED.

UNAUDITED PRO FORMA

CONDENSED COMBINED STATEMENT OF PROFIT AND LOSS

For the year ended December 31, 2021

	GFAI historical			Shenzhen Keweien historical			Guangzhou Kewei historical			Beijing Wanjia historical			Pro Forma Adjustments			Pro Forma Combined
Revenue	$	35,153,190		$	1,298,301		$	1,507,097		$	3,534,339					$41,492,927
Cost of sales		(31,084,833	)		(930,725	)		(632,642	)		(2,566,549	)				(35,214,749)
Gross profit		4,068,357			367,576			874,455			967,790					6,278,178
Provision for and write off of withholding taxes receivable		(190,038	)		-			-			-					(190,038)
Selling, distribution and administrative expenses		(7,582,043	)		(670,957	)		(865,190	)		(3,631,826	)				(12,750,016)
Operating (loss) / profit		(3,703,724	)		(303,381	)		9,265			(2,664,036	)				(6,661,876)
Other income (loss), net		285,220			235			101			111,284					396,840
Foreign exchange losses		(1,821,175	)		-			-			-					(1,821,175)
Finance costs		(984,843	)		-			-			-					(984,843)
(Loss) profit before income tax		(6,224,522	)		(303,146	)		9,366			(2,552,752	)				(9,071,054)
Provision for income tax benefit (expenses)		732,868			1,220			(78	)		61,706					795,716
Net (loss) profit for the year		(5,491,654	)		(301,926	)		9,288			(2,491,046	)				(8,275,338)
Less: net loss attributable to non-controlling interests		9,727			-			-			-					9,727
Net (loss) profit attributable to equity holders of the Company	$	(5,481,927	)	$	(301,926	)		9,288			(2,491,046	)				(8,265,611)
Loss per share
Basic and diluted loss attributable to equity holders of the Company	$	(0.31	)													$(0.35)
Weighted average number of shares used in computation:
Basic and diluted		17,537,238												5,922,852	(p)	23,460,090

5

Notes to Unaudited Pro Forma Condensed Combined Financial Statement

1. Unaudited Pro FormaCondensed Combined Balance Sheet

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Consideration for the acquisition of Shenzhen Keweien and Guangzhou Kewei consisted of 2,142,852 shares of the Company and $1,000,000 in cash. Based on the closing stock price on March 22, 2022, total consideration was $3,614,279.

The following table shows the allocation of the purchase price of Shenzhen Keweien and Guangzhou Kewei to the acquired identifiable assets, liabilities and goodwill:

Total consideration
Net assets acquired:
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
Property, plant and equipment
Right-of-use assets
Intangible assets
Trade and other payables		)
Current portion of operating lease liabilities		)
Income tax payables		)
Contract liabilities		)
Operating lease liabilities		)
Total identifiable net assets at fair value at March 22, 2022
Goodwill

All values are in US Dollars.

Consideration for the acquisition of Beijing Wanjia consisted of 3,780,000 shares of the Company and $840,000 in cash. Based on the closing stock price on June 22, 2022, total consideration was $2,805,600.

6

The following table shows the allocation of the purchase price of Beijing Wanjia to the acquired identifiable assets, liabilities and goodwill:

Total consideration
Net assets acquired:
Cash and cash equivalents
Trade and other receivables
Inventories
Property, plant and equipment
Intangible assets *
Deferred tax assets
Right-of-use assets
Trade and other payables		)
Lease liabilities		)
Total identifiable net assets at fair value at March 22, 2022
Goodwill

All values are in US Dollars.

---

*	Included pre-existing intangible assets with net book value of $817,214

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The following adjustments have been made to the unaudited pro forma condensed combined balance sheet as of December 31, 2021 to reflect the acquisition adjustments related to the acquisitions:

(a)	The acquisition of Shenzhen Keweien and Guangzhou Kewei is<br>satisfied by $1,000,000 in cash and 2,142,852 shares of the Company.
(b)	The acquisition of Beijing Wanjia is satisfied by $840,000<br>in cash and 3,780,000 shares of the Company.
---	---
(c)	Being elimination of inter-company balance at December 31,<br>2021 between Shenzhen Keweien and Guangzhou Kewei.
---	---
(d)	On acquisition of Shenzhen Keweien and Guangzhou Kewei, intangible<br>assets with fair value of $2,002,806 are identified.
---	---
(e)	On acquisition of Beijing Wanjia, intangible assets with fair value<br>of $776,184 are identified.
---	---

7

(f)	Goodwill arising from the acquisition of Shenzhen Keweien<br>and Guangzhou Kewei amounted $1,867,009.
(g)	Goodwill arising from the acquisition of Beijing Wanjia amounted $411,862.
---	---
(h)	2,142,852 shares issued for the acquisition of Shenzhen Keweien<br>and Guangzhou Kewei with par value of $0.003 each.
---	---

---

(i)	3,780,000 shares issued for the acquisition of Beijing Wanjia<br>with par value of $0.003 each.
(j)	The difference between the market close price of the share<br>of the Company at the date of the acquisition of Shenzhen Keweien and Guangzhou Kewei and the par value of the share of Company is recognized<br>in Additional paid-in capital.
---	---
(k)	The difference between the market close price of the share of the Company at the date of the<br> acquisition of Beijing Wanjia and the par value of the share of ecognizeds recognized in Additional paid-in capital.
---	---
(l)	Being the exchange reserve on the acquisition of Shenzhen<br>Keweien and Guangzhou Kewei.
---	---
(m)	Being the exchange reserve on the acquisition of Beijing<br>Wanjia.
---	---
(n)	Being the elimination of the pre-acquisition loss of Shenzhen<br>Keweien and Guangzhou Kewei.
---	---
(o)	Being the elimination of the pre-acquisition loss of Beijing<br>Wanjia.
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2. Unaudited Pro FormaCondensed Combined Statement of Profit and Loss

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The following adjustment has been made to the unaudited pro forma condensed combined statement of profit and loss to reflect the acquisitions were to be completed on January 1, 2021:

(p)

The pro forma basic and diluted loss per share calculation<br>are based on the basic and diluted weighted average number of the Company’s ordinary shares plus the shares issued by the Company<br>as equity consideration in connection with the acquisitions. The pro forma basic and diluted weighted average number of shares outstanding<br>are a combination of the historical weighted average shares of the Company and the ordinary share impact of the equity consideration.

Weighted average shares outstanding are as follows:

	Year ended<br><br> December 31, <br><br>2021
Historical weighted average shares outstanding – basic and diluted		17,537,238
Equity consideration in connection with the acquisition of Shenzhen<br><br>Keweien and Guangzhou Kewei		2,142,852
Equity consideration in connection with the acquisition of Beijing Wanjia		3,780,000
Pro forma weighted average shares outstanding – basic and diluted		23,460,090

8

Exhibit 99.3

FINANCIAL STATEMENTS

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GUARDFORCE AI CO., LIMITED AND SUBSIDIARIES

UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIALSTATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2022 and2021

Contents	Page(s)
Unaudited Interim Condensed Consolidated Statement of Financial Position	F-2
Unaudited Interim Condensed Consolidated Statement of Profit or Loss	F-3
Unaudited Interim Condensed Consolidated Statement of Comprehensive Loss	F-4
Unaudited Interim Condensed Consolidated Statement of Changes in Equity	F-5
Unaudited Interim Condensed Consolidated Statement of Cash Flows	F-6
Notes to the Unaudited Interim Condensed Consolidated Financial Statements	F-7 – F-31

F-1

Guardforce AI Co., Limited and Subsidiaries

Unaudited Interim Condensed Consolidated Statementof Financial Position

(Expressed in U.S. Dollars)

	As at<br> June 30,<br> 2022			As at<br> December 31,<br> 2021
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	7,728,491		$	12,728,783
Restricted cash		-			1,600,000
Trade receivables		5,464,069			4,939,568
Other receivables		1,016,220			-
Other current assets		2,457,334			1,275,981
Inventories		8,769,701			1,387,549
Amount due from related parties		6,416,362			26,007
Total current assets		31,852,177			21,957,888
Non-current assets:
Restricted cash		1,811,750			1,525,028
Property, plant and equipment		12,219,476			9,897,301
Right-of-use assets		2,133,297			2,364,993
Intangible assets		6,249,273			164,316
Goodwill		2,679,445			329,534
Deposits paid for business acquisitions		7,020,000			-
Withholding taxes receivable		2,451,616			3,531,953
Deferred tax assets, net		1,910,689			1,635,638
Other non-current assets		482,143			345,586
Total non-current assets		36,957,689			19,794,349
Total assets	$	68,809,866		$	41,752,237
Liabilities and Equity
Current liabilities:
Trade and other payables	$	3,650,442		$	1,028,721
Borrowings		1,011,749			933,110
Borrowings from related parties		16,209,546			13,506,184
Current portion of operating lease liabilities		1,423,063			2,366,045
Current portion of finance lease liabilities		261,940			619,301
Other current liabilities		1,683,355			1,824,635
Amount due to related parties		5,856,114			2,217,752
Total current liabilities		30,096,209			22,495,748
Non-current liabilities:
Borrowings		518,613			859,120
Operating lease liabilities		741,218			-
Borrowings from related parties		1,927,803			5,332,803
Finance lease liabilities		622,062			666,455
Other non-current liabilities		54,000			54,000
Provision for employee benefits		5,470,714			5,819,132
Total non-current liabilities		9,334,410			12,731,510
Total liabilities		39,430,619			35,227,258
Equity
Ordinary shares – par value 0.003 authorized 300,000,000 shares, issued and outstanding 54,879,075 shares at June 30, 2022; par value 0.003 authorized 300,000,000 shares, issued and outstanding 21,201,842 shares at December 31, 2021		164,638			63,606
Subscription receivable		(50,000	)		(50,000	)
Additional paid in capital		44,669,954			15,379,595
Legal reserve		223,500			223,500
Warrants reserve		251,036			251,036
Deficit		(16,511,042	)		(10,204,220	)
Accumulated other comprehensive income		623,618			821,527
Capital & reserves attributable to equity holders of the Company		29,371,704			6,485,044
Non-controlling interests		7,543			39,935
Total equity		29,379,247			6,524,979
Total liabilities and equity	$	68,809,866		$	41,752,237

All values are in US Dollars.

The accompanying notes are an integral partof these unaudited condensed consolidated financial statements.

F-2

Guardforce AI Co., Limited and Subsidiaries

Unaudited Interim Condensed Consolidated Statementof Profit or Loss

(Expressed in U.S. Dollars)

	Note	For the six months ended<br> June 30,
		2022			2021
		(Unaudited)			(Unaudited)
Revenue	2.11	$	16,942,522		$	18,405,025
Cost of sales	2.12		(14,998,727	)		(16,346,463	)
Gross profit			1,943,795			2,058,562
Provision for and write off of withholding taxes receivable			(263,340	)		(98,226	)
Stock based compensation	20		(252,095	)		-
Selling, distribution and administrative expenses	21		(6,977,996	)		(3,271,608	)
Operating loss			(5,549,636	)		(1,311,272	)
Other income			46,859			237,178
Foreign exchange losses, net			(745,759	)		(40,137	)
Finance costs			(410,861	)		(440,952	)
Loss before income tax			(6,659,397	)		(1,555,183	)
Provision for income tax benefit	17		320,183			-
Loss for the period			(6,339,214	)		(1,555,183	)
Less: loss (profit) attributable to non-controlling interests			32,392			(91	)
Loss attributable to equity holders of the Company		$	(6,306,822	)	$	(1,555,274	)
Loss per share attributable to equity holders of the Company
Basic		$	(0.18	)	$	(0.09	)
Diluted		$	(0.18	)	$	(0.09	)
Weighted average number of shares used in computation:
Basic			35,235,992			17,486,264
Diluted			35,235,992			17,486,264

The accompanying notes are an integral partof these unaudited interim condensed consolidated financial statements.

F-3

Guardforce AI Co., Limited and Subsidiaries

Unaudited Interim Condensed Consolidated Statementof Comprehensive Loss

(Expressed in U.S. Dollars)

	Note	For the six months ended<br><br> June 30,
		2022			2021
		(Unaudited)			(Unaudited)
Loss for the period		$	(6,339,214	)	$	(1,555,183	)
Currency translation differences	2.5		(197,909	)		(105,897	)
Total comprehensive loss for the period		$	(6,537,123	)	$	(1,661,080	)
Attributable to:
Equity holders of the Company		$	(6,502,884	)	$	(1,661,171	)
Non-controlling interests			(34,239	)		91
		$	(6,537,123	)	$	(1,661,080	)

The accompanying notes are an integral partof these unaudited interim condensed consolidated financial statements.

F-4

Guardforce AI Co., Limited and Subsidiaries

Unaudited Interim Condensed Consolidated Statementof Changes in Equity (Deficit)

(Expressed in U.S. Dollars)

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															Accumulated
	Number of Shares			Amount (0.003 par)	Subscription<br><br> Receivable			Additional<br><br> Paid-in<br><br> Capital			Legal<br><br> Reserve		Warrants <br><br>Reserves		Other<br> Comprehensive<br> Income			Retained<br><br> earnings<br><br> (Deficit)			Non- controlling Interests			Total<br><br> Equity
Balance as at December 31, 2020		17,356,090			$	(50,000	)	$	2,082,795		$	223,500	$	-	$	204,249		$	(4,722,294	)	$	49,663		$	(2,160,018	)
Currency translation adjustments		-				-			-			-		-		(105,897	)		-			-			(105,897	)
Stock-based compensation expenses		187,598				-			(563	)		-		-		-			-			-			-
Remeasurements of defined benefit plan		-				-			-			-		-		627,193			-			-			627,193
Issuance of ordinary shares for acquisition of Handshake		43,700				-			327,632			-		-		-			-			-			327,763
Net loss for the period		-				-			-			-		-		-			(1,555,274	)		91			(1,555,183	)
Balance as at June 30, 2021 (Unaudited)		17,587,388			$	(50,000	)	$	2,409,864		$	223,500	$	-	$	98,352		$	(6,277,568	)	$	49,754		$	(3,493,335	)
Balance as at December 31, 2021		21,201,842			$	(50,000	)	$	15,379,595		$	223,500	$	251,036	$	821,527		$	(10,204,220	)	$	39,935		$	6,524,979
Currency translation adjustments		-				-			-			-		-		(197,909	)		-			-			(197,909	)
Stock-based compensation expenses (see Note 20)		280,000				-			251,255			-		-		-			-			-			252,095
Cancellation of shares		(113	)			-			-			-		-		-			-			-			-
Issuance of ordinary shares through private placements (see Note 19)		16,659,348				-			18,225,749			-		-		-			-			-			18,275,727
Issuance of ordinary shares through exercise of warrants (see Note 19)		1,095,146				-			1,420,404			-		-		-			-			-			1,423,689
Issuance of ordinary shares for acquisition of subsidiaries (see Note 19)		5,922,852				-			4,562,111			-		-		-			-			-			4,579,880
Issuance of ordinary shares for deposit paid for acquisitions of subsidiaries (see Note 19)		9,720,000							4,830,840																4,860,000
Net loss for the period		-				-			-			-		-		-			(6,306,822	)		(32,392	)		(6,339,214	)
Balance as at June 30, 2022 (Unaudited)		54,879,075			$	(50,000	)	$	44,669,954		$	223,500	$	251,036	$	623,618		$	(16,511,042	)	$	7,543		$	29,379,247

All values are in US Dollars.

The accompanying notes are an integralpart of these unaudited interim condensed consolidated financial statements

F-5

Guardforce AI Co., Limited and Subsidiaries

Unaudited Interim Condensed Consolidated Statementof Cash Flows

(Expressed in U.S. Dollars)

	For the six months ended <br> June 30,
	2022			2021
Cash flows from operating activities	(Unaudited)			(Unaudited)
Loss for the period	$	(6,339,214	)	$	(1,555,183	)
Adjustments for:
Depreciation and Amortization of intangible assets		2,697,378			2,542,432
Stock-based compensation		252,095			-
Finance costs		506,818			341,123
Loss/(Gain) from fixed assets disposal		24,530			(2,189	)
Changes in operating assets and liabilities:
Increase in trade and other receivables		(205,716	)		(673,605	)
Increase in other current assets		(969,004	)		(1,005,395	)
Increase in inventories		(5,521,429	)		(2,105,633	)
(Increase)/Decrease in amount due from/to related parties		(6,111,443	)		2,932,310
Decrease/(Increase) in other non-current assets		901			(98,693	)
Increase in provision for and write off of withholding taxes receivable		263,340			98,226
Increase in deferred tax assets		(325,083	)		-
Increase in Trade and other payables and other current liabilities		1,265,752			900,767
Increase in withholding taxes receivable		663,095			522,688
(Decrease)/Increase in provision for employee benefits		(29,812	)		146,100
Net cash (used in) generated from operating activities		(13,827,792	)		2,042,948
Cash flows from investing activities
Acquisition of property and equipment		(2,309,334	)		(2,251,341	)
Proceeds from sale of property, plant and equipment		4,120			2,598
Acquisition of intangible assets		(3,082,880	)		-
Acquisition of subsidiary, net of cash acquired		(1,793,614	)		24,276
Deposits paid for business acquisitions		(2,160,000	)		-
Net cash used in investing activities		(9,341,708	)		(2,224,467	)
Cash flows from financing activities
Proceeds from issue of shares		18,275,728			-
Proceeds from exercise of warrants		1,423,690
Proceeds from borrowings		-			1,622,855
Repayment of borrowings		(840,762	)		(378,046	)
Payment of lease liabilities		(1,483,203	)		(1,246,462	)
Net cash generated from (used in) financing activities		17,375,453			(1,653	)
Net decrease in cash and cash equivalents, and restricted cash		(5,794,047	)		(183,172	)
Effect of movements in exchange rates on cash held		(519,523	)		(554,528	)
Cash and cash equivalents, and restricted cash at January 1,		15,853,811			10,129,910
Cash and cash equivalents, and restricted cash at June 30,	$	9,540,241		$	9,392,210
Non-cash investing and financing activities
Equity portion of purchase consideration paid for acquisition of subsidiaries		4,579,879			-

The accompanying notes are an integralpart of these unaudited interim condensed consolidated financial statements.

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F-6

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Guardforce AI Co., Limited and Subsidiaries

Notes to the Unaudited Interim Condensed ConsolidatedFinancial Statements

(Expressed in U.S. Dollars)

1.	NATURE OF OPERATIONS

Guardforce AI Co., Limited (“Guardforce”) is a company incorporated and domiciled in the Cayman Islands under the Cayman Islands Companies Act on April 20, 2018. The address of its registered office was 96 Vibhavadi Rangsit Road, Talad Bangkhen, Laksi, Bangkok 10210, Thailand, which has changed to 10 Anson Road, #28-01 International Plaza, Singapore 079903 since November 2021. Guardforce is controlled by Mr. Tu Jingyi (“Mr. Tu”) through Guardforce AI Technology Limited (“AI Technology”). The Company’s ordinary shares and warrants are listed under the symbol “GFAI” and “GFAIW”, respectively, on the Nasdaq Capital Market upon the completion of an initial public offering on September 28, 2021.

Guardforce AI Holding Limited (“AI Holdings”) was incorporated in the British Virgin Islands under the BVI Business Companies Act, 2004, on May 22, 2018. AI Holdings is a 100% owned subsidiary of Guardforce. AI Holdings is an investment holding company.

Guardforce AI Robots Limited (“AI Robots”) was incorporated in the British Virgin Islands under the BVI Business Companies Act, 2004, on May 22, 2018. AI Robots is a 100% owned subsidiary of Guardforce. AI Robots is an investment holding company.

Guardforce AI (Hong Kong) Co., Limited (“AI Hong Kong”) was incorporated in Hong Kong under the Hong Kong Companies’ Ordinance (Chapter 622), on May 30, 2018. AI Hong Kong is a 100% owned subsidiary of Guardforce. Beginning March 2020, AI Hong Kong commenced robotic AI solution business of selling and leasing robots.

Southern Ambition Limited (“Southern Ambition”) was incorporated in the British Virgin Islands under the BVI Business Companies Act, 2004, on August 3, 2018. Southern Ambition is a 100% owned subsidiary of AI Robots. Southern Ambition is an investment holding company.

Horizon Dragon Limited (“Horizon Dragon”) was incorporated in the British Virgin Islands under the BVI Business Companies Act, 2004, on July 3, 2018. Horizon Dragon is a 100% owned subsidiary of AI Holdings. Horizon Dragon is an investment holding company.

Guardforce AI Group Co., Limited (“AI Thailand”) was incorporated in Thailand under the Civil and Commercial Code at the Registry of partnerships and Companies, Bangkok Metropolis, Thailand, on September 21, 2018 and has 100,000 ordinary plus preferred shares outstanding. 48,999 of the shares in AI Thailand are owned by Southern Ambition Limited, with one share being held by Horizon Dragon Limited, for an aggregate of 49,000 ordinary shares, or 49%, and 51,000 cumulative preferred shares are owned by two individuals of Thailand. The two individuals owned in aggregate 49,000 ordinary shares with a value of approximately $16,000. The cumulative preferred shares are entitled to dividends of USD$0.03 per share when declared. The cumulative unpaid dividends of the preferred shares as of December 31, 2021 is approximately $1,700. Pursuant to article of associates of AI Thailand, the holder of an ordinary share may cast one vote per share at a general meeting of shareholders, the holder of preferred shares may cast one vote for every 20 preferred shares held at a general meeting of shareholders. Southern Ambition is entitled to cast more than 95% of the votes at a general meeting of shareholders. No dividends were declared during the years ended December 31, 2021, 2020 and 2019.

Guardforce Cash Solutions Security Thailand Co., Limited (“GF Cash (CIT)”) was incorporated in Thailand under the Civil and Commercial Code at the Registry of partnerships and Companies, Bangkok Metropolis, Thailand, on July 27, 1982 and has 3,857,144 outstanding shares. 3,799,544 ordinary shares and 21,599 preferred shares of the outstanding shares in GF Cash (CIT) (approximately 99.07% of the shares in GF Cash (CIT)) are owned by AI Thailand with one preferred share being held by Southern Ambition and 33,600 ordinary shares and 2,400 preferred shares (approximately 0.933% of the shares in GF Cash (CIT)) being held by Bangkok Bank Public Company Limited. Pursuant to the articles of association a shareholder may cast one vote per one share at a general meeting of shareholders. AI Thailand is entitled to cast 99.07% of the votes at a general meeting of shareholders. GF Cash (CIT)’s head office is located at No. 96 Vibhavadi-Rangsit Road, Talad Bang Khen Sub-District, Laksi District, Bangkok, Thailand. Beginning March 2020, GF Cash (CIT) commenced robotic AI solution business of selling and leasing of robots. No dividends were declared during the six months ended June 30, 2022 and 2021.

F-7

97% of shares in GF Cash (CIT) are owned by AI Thailand and Southern Ambition, which were previously held by Guardforce TH Group Co., Ltd and Guardforce 3 Limited, with the same majority shareholder.

The reorganization of Guardforce and its subsidiaries (collectively referred to as the “Company) was completed on December 31, 2018. Pursuant to the reorganization, Guardforce became the holding company of the companies, which were under the common control of the controlling shareholder before and after the reorganization. Accordingly, the Company’s financial statements have been prepared on a consolidated basis by applying the predecessor value method as if the reorganization had been completed at the beginning of the earliest reporting period. The Company engages principally in providing cash management and handling services located in Thailand.

On March 25, 2021, the Company acquired 51% majority stake in information security consultants Handshake Networking Ltd (“Handshake”), a Hong Kong-based company specializing in penetration testing and forensics analysis in Hong Kong and the Asia Pacific region since 2004.

On November 1, 2021, the Company entered into a Transfer Agreement (the “Singapore Agreement”) to acquire 100% of the equity interests in Guardforce AI Singapore Pte. Ltd. (“AI Singapore”), a company incorporated in Singapore. Pursuant to the Agreement, AI Singapore became a wholly owned subsidiary of the Company. AI Singapore and Guardforce are ultimately controlled by Mr. Tu before and after the acquisition was completed. AI Singapore commenced robotic AI solution business of selling and leasing robots.

On November 18, 2021, the Company entered into a Transfer Agreement (the “Macau Agreement”) to acquire 100% of the equity interests in Macau GF Robotics Limited, a company incorporated in Macau (“AI Macau”). The consideration is approximately $3,205 (MOP25,000). AI Macau commenced robotic AI solution business of selling and leasing robots. The acquisition was closed on February 9, 2022. AI Macau is a 100% owned subsidiary of AI Robotics.

On November 18, 2021, the Company entered into another Transfer Agreement (the “Malaysia Agreement”) to acquire 100% of the equity interests in GF Robotics Malaysia Sdn. Bhd., a company incorporated in Malaysia (“AI Malaysia”). The consideration is approximately $1 (RM1). AI Maylaysia commenced robotic AI solution business of selling and leasing robots. The acquisition was closed on January 20, 2022. AI Malaysia is a 100% owned subsidiary of AI Robotics.

GFAI Robotics Group Co., Limited (“AI Robotics”) was incorporated in the British Virgin Islands under the BVI Business Companies Act, 2004, on December 6, 2021. AI Robotics is a 100% owned subsidiary of Guardforce. AI Robotics is an investment holding company.

GFAI Robot Service (Hong Kong) Limited (“AI Robot Service”) was incorporated in Hong Kong under the Hong Kong Companies’ Ordinance (Chapter 622), on January 18, 2022. AI Robot Service is an investment holding company. AI Robot Service is a 100% owned subsidiary of AI Robotics.

Guardforce AI Robot Service (Shenzhen) Co., Limited (“AI Shenzhen”) was incorporated in the People’s Republic of China (“PRC”) on February 23, 2022. AI Shenzhen is an investment holding company. AI Shenzhen is a 100% owned subsidiary of AI Robot Service.

GFAI Robotics Services LLC (“AI US”) was incorporated in the State of Delaware on February 28, 2022. AI US commenced robotic AI solution business of selling and leasing robots. AI US is a 100% owned subsidiary of AI Robotics.

GFAI Robot Service (Australia) Pty Ltd. (“AI Australia”) was incorporated in Australia on February 28, 2022. AI Australia commenced robotic AI solution business of selling and leasing robots. AI Australia is a 100% owned subsidiary of AI Robot Service.

GFAI Robot & Smart Machines Trading LLC (“AI Dubai”) was incorporated in the United Arab Emirates (UAE) on March 13, 2022. AI Dubai commenced robotic AI solution business of selling and leasing robots. AI Dubai is a 100% owned subsidiary of AI Robot Service.

F-8

GFAI Robotic and Innovation Solution (Thailand) Company Limited (“AI R&I”) was incorporated in Thailand on March 30, 2022. AI R&I commenced robotic AI solution business of selling and leasing robots. AI R&I is 98% owned by AI Thailand, 1% owned by Horizon Dragon and 1% owned by Southern Ambition.

GFAI Robot Service (UK) Limited (“AI UK”) was incorporated in the United Kingdom on April 29, 2022. AI UK commenced robotic AI solution business of selling and leasing robots. AI UK is a 100% owned subsidiary of AI Robot Service.

GFAI Robot Service Limited (“AI Canada”) was incorporated in the Canada on May 6, 2022. AI Canada commenced robotic AI solution business of selling and leasing robots. AI Canada is a 100% owned subsidiary of AI Robot Service.

Guardforce AI Robot (Jian) Co., Limited (“AI Jian”) was incorporated in the People’s Republic of China (“PRC”) on May 16, 2022. AI Jian is an investment holding company. AI Jian is a 100% owned subsidiary of AI Robot Service.

GFAI Robot Service GK (“AI Japan”) was incorporated in Japan on May 24, 2022. AI Japan commenced robotic AI solution business of selling and leasing robots. AI Japan is a 100% owned subsidiary of AI Hong Kong.

GFAI Robot Service Co., Ltd. (“AI Korea”) was incorporated in South Korea on June 17, 2022. AI Korea commenced robotic AI solution business of selling and leasing robots. AI UK is a 100% owned subsidiary of AI Hong Kong.

On March 11, 2022, the Company entered into a Sale and Purchase Agreement (the “Kewei Agreement”) with Shenzhen Kewei Robot Technology Co., Limited (“Shenzhen Kewei”) to acquire 100% of the equity interests in Shenzhen Keweien Robot Service Co., Ltd. (“Shenzhen GFAI”) and Guangzhou Kewei Robot Technology Co., Ltd. (“Guangzhou GFAI”) from Shenzhen Kewei. Both acquirees are PRC-based companies. The acquisition serves an integral role in the growth of the Company’s robotic AI solution business as a service (RaaS) business initiative. The acquisition was closed on March 22, 2022. The acquisition purchase price of $10,000,000 was paid in a mix of cash (10%) and restricted ordinary shares of the Company (90%). On March 14, 2022, we issued 2,142,852 restricted Ordinary Shares to the sellers’ designated parties.

On May 24, 2022, the Company entered into a Sale and Purchase Agreement (the “Kewei Agreement”) with Shenzhen Yeantec Co., Limited (“Yeantec”) to acquire 100% of the equity interests in Beijing Wanjia Security System Co., Ltd. (“Beijing Wanjia”) from Yeantec. Beijing Wanjia is a PRC-based company with more than 25 years of experience in providing integrated security solution, focusing on fire alarm security systems, and a well-established customer base among retail businesses. The acquisition serves the growth of the Company’s other security business. The acquisition was closed on June 22, 2022. The acquisition purchase price of $8,400,000 was paid in a mix of cash (10%) and restricted ordinary shares of the Company (90%). On June 16, 2022, we issued 3,780,000 restricted Ordinary Shares to the sellers’ designated parties.

The following diagram illustrates the Company’s legal entity ownership structure as of June 30, 2022:

F-9

2.	SIGNIFICANT ACCOUNTING POLICIES

The accounting policies applied for the six months ended June 30, 2022 and 2021 are consistent with those of the audited consolidated financial statements for the years ended December 31, 2021 and 2020, as described in those audited consolidated financial statements, except for the adoption of new and amended International Financial Reporting Standards (“IFRS”) effective for the year ending December 31, 2021 which are relevant to the preparation of the June 30, 2022 and 2021 unaudited interim condensed consolidated financial statements.

On September 28, 2022, the unaudited interim condensed consolidated financial statements were approved by the board of directors and authorized for issuance.

2.1	Basis of presentation

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with International Accounting Standard (“IAS”) 34, “Interim Financial Reporting”. These statements should be read in conjunction with the audited consolidated financial statements for the years ended December 31, 2021 and 2020, which have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). The unaudited interim condensed consolidated financial statements have been prepared on a historical cost basis. In the opinion of management, all adjustments necessary for a fair presentation have been included in the accompanying unaudited condensed consolidated financial statements. The results of operations for the six months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the full year ended December 31, 2022.

All amounts are presented in United States dollars (“USD”) and have been rounded to the nearest USD.

As of June 30, 2022, the Company’s operating losses raise substantial doubt on the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern will require the Company to obtain additional financing to fund their operations. The perception of the Company’s ability to continue as a going concern may make it more difficult to obtain financing or obtain financing on favorable terms for the continuation of the Company’s operations and could result in the loss of confidence by investors, suppliers and employees. If the Company is not successful in raising capital through equity offerings, debt financings, collaborations, licensing arrangements or any other means or are not successful in reducing our expenses, the Company may exhaust the cash resources and be unable to continue our operations. If the Company cannot continue as a viable entity, the shareholders would likely lose most or all of their investment in the Company.

In addition, the accompanying condensed consolidated interim financial statements are presented on the basis that the Company is a going concern. The going concern assumption contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

The Company has a loan outstanding in the principal amount of $13.47 million due and payable in full on December 31, 2022, to Profit Raider Investment Limited, or Profit Raider. The Company will require an extension of the maturity date of this loan, and the Company cannot be sure whether or not Profit Raider will extend the maturity date of the loan, or if it does, under what terms. If Profit Raider does not extend the loan, the Company will (i) seek an alternative source of funding to replace the loan; and/or (ii) seek further negotiation with Profit Raider to convert the loan to shares; and/or (iii) seek support from the Company’s largest shareholder, Mr. Tu Jingyi (“Mr. Tu"), who owns 45.527% (as of June 30, 2022) of the Company’s ordinary shares, for repayment. There can be no assurance, however, that the Company would be able to find such alternative funding on terms acceptable to the Company, if at all. If the Company cannot obtain an extension of the maturity date of the loan and are not otherwise able to refinance the loan, the Company may default on the loan and such default would have a material adverse effect on the Company’s financial condition, cash flows and results of operations and could result in an action by Profit Raider against the Company to collect the amount due under the loan along with interest, fees and any other applicable chargers. The Company considers Profit Raider, one of the Company’s shareholders, who owns 3.037% (as of June 30, 2022) of the Company’s ordinary shares.

In assessing the going concern, management and the Board has considered:

-	The risk of default on Profit Raider loan is assessed as low.
-	Based on the statistics of the industry, management expects to see a positive trend in the Company’s future results. Management expects the business to recover in the future when the countries in which the Company operates begin to further ease Covid pandemic control and lockdown measures.
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-

The Company has generated cash from financing activities including liquidity capital injections from fund-raising activities and the receipt of the $10.3 million and the $10.0 proceeds from the private placements on January 20, 2022 and April 6, 2022, respectively. The Company’s principal uses of cash have been, and management expects will continue to be, for working capital to support a reasonable increase in the Company’s scale of operations as well as for business expansion investments, as disclosed in Note 1, the Company acquired Shenzhen Keweien Robot Service Co., Ltd. in March 2022, Guangzhou Kewei Robot Technology Co. in March 2022, and Beijing Wanjia Security System Co., Ltd. in June 2022.

F-10

-

The Company has conditional and unconditional obligations as disclosed in Note 22, these commitments and contingencies are in the normal and the course of business. Regarding legal proceedings, as of the date of this report, the Company is a defendant in various labor related lawsuits approximately $0.432 million. Management believes these cases are without merit and is confident that the Appeals Court will make the decision according to the consideration of the Court of First Instance and order the dismissal of such lawsuits.

-	On September 13, 2022, the Company signed a non-binding letter of intent with Shenzhen Intelligent Guardforce Robot Co., Ltd to acquire Shenzhen Kewei, a high-tech robotics company specializing in developing robotics software solutions and robotics management platforms, as well as robotics sales and technical services. Shenzhen Kewei’s RaaS platform currently operates approximately 65,000 robots that belong to Shenzhen Kewei, customers, and partners. Shenzhen Kewei’s customer base includes a roster of Fortune 500 corporations across various industries. The consideration will be paid in a mix of cash (10%) and restricted ordinary shares of the Company (90%). For the fiscal year of 2021, the unaudited revenue of Shenzhen Kewei was approximately $15 million. Management believes this acquisition will provide a variety of recurring revenue streams to the Company, which will expand the Company’s geographic revenue across China and contribute to the Company’s growth in other internal markets in the robotics AI solutions segment. The Company expects this acquisition will be closed in the second quarter of 2023.
-	GF Cash (CIT), the Company’s major subsidiary, was recently awarded<br>a 5-year contract by a government bank, namely Bank of Thailand to manage its Consolidated Cash Centers (CCCs) in the city of Ubonratchathani<br>and the city of Phitsanulok in Thailand. This long-term contract expands the Company’s current secured logistics services provided<br>to the Bank of Thailand. Management expects an increase in recurring revenue and further growth in the secured logistics segment to sustain<br>the business.
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2.2	Basis of consolidation

The consolidated statements of profit or loss and other comprehensive loss, changes in equity and cash flows of the Company for the relevant periods include the results of operations, financial position, cash flows, of all companies now comprising the Company from the earliest date presented or since the date when the subsidiaries and/or businesses first came under the common control of the controlling shareholders, wherever the period is shorter.

The unaudited interim condensed consolidated statements of financial position of the Company as at June 30, 2022 and 2021 have been prepared to present the assets and liabilities of the subsidiaries under the historical cost convention.

Equity interests in subsidiaries held by parties other than the controlling shareholders are presented as non-controlling interests in equity.

All intra-group and inter-company transactions and balances have been eliminated on consolidation.

2.3	Segment reporting

Segment information is consistent with how management reviews the businesses, makes investing and resource allocation decisions and assesses operating performance. Transfers and sales between reportable segments, if any, are recorded at cost.

The Company reports financial and operating information in the following five segments in Note 24:

(i)	Secured logistics;
(ii)	Information security;
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(iii)	Robotics AI solutions;
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(iv)	General security solutions; and
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(v)	Corporate and others
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The Company does not report geographical segmental data as over 94% of the Company’s revenue was derived from the secured logistics business segment operating in Thailand.

F-11

2.4	Assets under construction

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Assets under construction are stated at cost less impairment losses, if any. Cost comprises direct costs of construction as well as interest expense and exchange differences capitalized during the periods of construction and installation. Capitalization of these costs ceases and the construction in progress is transferred to property, plant and equipment when substantially all the activities necessary to prepare the assets for their intended use are completed. No depreciation is provided for assets under construction until they are completed and ready for intended use.

2.5	Business combinations

The Company accounts for business combinations using the acquisition method when control is transferred to the Company, other than those between and among entities under common control. The consideration transferred in the acquisition is generally measured at fair value, as are the identifiable net assets acquired. Any goodwill that arises is tested annually for impairment. Any gain on the bargain purchase is recognized in the statement of profit or loss immediately. Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities.

IFRS 3 Business combination does not include specific measurement guidance for transfers of businesses or subsidiaries between entities under common control. Accordingly, the Company has accounted for such transactions taking into consideration other guidance in the IFRS framework and pronouncements of other standard-setting bodies. The Company recorded assets and liabilities recognized as a result of transactions between entities under common control at the carrying value on the transferor’s financial statements, and to have the consolidated balance sheet, consolidated statement of profit or loss, comprehensive income, changes in equity and cash flows reflect the results of combining entities’ financial position for all periods presented for which the entities were under the transferor’s common control, irrespective of when the combination takes place.

2.6	Non-controlling interest

The non-controlling interest represents the portion of the equity (net assets) in the subsidiary not directly or indirectly attributable to the Company. Non-controlling interests are presented as a separate component of equity on the consolidated statements of financial position, profit or loss, comprehensive income and changes in equity attributed to controlling and non-controlling interests.

2.7	Critical accounting estimate and judgements

The preparation of the consolidated financial statements in conformity with IFRS requires management to make estimates and judgements that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from these estimates.

In preparing the unaudited interim condensed consolidated financial statements, the significant judgments made by management in applying the Company’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended December 31, 2021.

2.8	Foreign currency translation

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The presentational currency of the Company is the U.S. dollar (“USD”). The functional currency of Guardforce, AI Holdings, AI Robots, Horizon Dragon, Southern Ambition, AI Singapore, AI Robotics, AI Robots Service, AI Malaysia, AI Macau, AI US, AI Australia, AI Dubai, AI UK, AI Korea, AI Japan and AI Canada is the USD. The functional currency of AI Hong Kong and Handshake is the Hong Kong dollar (“HKD”). The functional currency of AI Thailand, GF Cash (CIT) and AI R&I is Thai Baht (“Baht” or “THB”). The functional currency of AI Shenzhen, AI Jian, Shenzhen GFAI, Guangzhou GFAI and Beijing Wanjia is Chinese Renminbi (“RMB”).

F-12

The currency exchange rates that impact our business are shown in the following table:

	Period End Rate				Average Rate
	June 30,		December 31,		For the six months ended<br><br> June 30,
	2022		2021		2022		2021
Thai Baht		0.0283		0.0300		0.0295		0.0325
Hong Kong Dollar		0.1282		0.1282		0.1282		0.1282
Chinese Renminbi		0.1493		N/A		0.1544		N/A

2.9	Financial risk management
2.9.1	Financial risk factors
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The Company’s activities expose it to a variety of financial risks: foreign exchange risk, interest rate risk and liquidity risk. The Company’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Company’s financial performance.

The unaudited interim condensed consolidated financial statements do not include all financial risk management information and disclosures required in the audited financial statements, and should be read in conjunction with the Company’s audited consolidated financial statements as at December 31, 2021 and 2020.

2.9.2	Liquidity risk

Prudent liquidity management implies maintaining sufficient cash and cash equivalents and the availability of funding through an adequate amount of committed credit facilities.

The Company’s primary cash requirements are for operating expenses and purchases of fixed assets. The Company mainly finances its working capital requirements from cash generated from operation and proceeds from bank borrowings and finance leases.

The Company’s policy is to regularly monitor current and expected liquidity requirements to ensure it maintains sufficient cash and cash equivalents and an adequate amount of committed credit facilities to meet its liquidity requirements in the short and long term.

At the reporting date, the contractual undiscounted cash flows of the Company’s current financial liabilities approximate their respective carrying amounts due to their short maturities.

2.9.3	Capital risk management

The Company’s objectives on managing capital are to safeguard the Company’s ability to continue as a going concern and support the sustainable growth of the Company in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to enhance shareholders’ value in the long term.

In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return of capital to shareholders, issue new shares or sell assets to reduce debt.

F-13

2.9.4	Impact of COVID-19

The Coronavirus Disease (COVID-19) outbreak and the measures taken to contain the spread of the pandemic have created a high level of uncertainty to global economic prospects and this has impacted the Company’s operations and its financial performance. As COVID-19 continues to evolve with significant levels of uncertainty, management of the Company is unable to reasonably estimate the full financial impact of COVID-19 on the Company’s financial results in year 2022. The Company is monitoring the situation closely and to mitigate the financial impact, it is conscientiously managing its costs by adopting an operating cost reduction strategy and conserving liquidity by working with major creditors to align repayment obligations with receivable collections. Based on the Company’s most recent projections for year 2022 and 2023 for a period of 12 months and with over $9.5 million in cash and cash equivalents and restricted cash, management of the Company believes that the Company will be able to continue to operate as a going concern in the foreseeable future for the next 12 months from the date of this report (see item 2.1).

2. 10	Goodwill

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Following initial recognition, goodwill is stated at costs less any accumulated impairment losses. Goodwill is reviewed for impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired.

At the acquisition date, any goodwill acquired is allocated to the cash-generating units (CGU) which are expected to benefit from the combination’s synergies. Impairment is determined by assessing the recoverable amount of the CGU to which the goodwill related. Where the recoverable amount of the CGU is less than the carrying amount, an impairment loss is recognized. Where goodwill forms part of a CGU and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of In these circumstances is measured on the basis of the relative values of the operation disposed of and the portion of the CGU retained.

2.11	Revenue from contracts with customers

The Company generates its revenue primarily from four service lines: (1) Secure logistics; (2) Robotics AI resolutions; (3) Information security; and (4) General security solutions.

Each service line primarily renders the following services:

(1)	Secure logistics
(i)	Cash-In-Transit – Non Dedicated<br> Vehicle (CIT Non-DV); (ii) Cash-In-Transit – Dedicated Vehicle (CIT DV); (iii) ATM<br> management; (iv) Cash Processing (CPC); (v) Cash Center Operations (CCT); (vi) Consolidate<br> Cash Center (CCC); (vii) Cheque Center Service (CDC); (viii) Express Cash; (ix) Coin Processing<br> Service; and (x) Cash Deposit Management Solutions
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(2)	Robotics AI solutions
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(i)	Sale of robots and (ii) Rental of robots
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(3)	Information security
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(i)	Penetration test; (ii) PCI ASV Scan<br> and (iii) Rapid7 Sales
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(4)	General security solutions
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(i)	Installation of fire alarm security<br> systems; (ii) Sale of security equipment
---	---

F-14

The Company recognizes revenue at a point in time as products are delivered and services are performed. Consultancy fees typically covers a period of time, the revenue is recognized on a ratable basis over the contract term. The Company applies the following five-step model in order to determine the amount:

●	To identify the contract or quotation with the agreed service price.
●	To evaluate the services engaged in the customer’s contract and<br>identify the related performance obligations.
---	---
●	To consider the contract terms and commonly accepted practices in the<br>business to determine the transaction price. The transaction price is the consideration that the Company expects to be entitled for delivering<br>the services engaged with the customer. The consideration engaged in a customer’s contract is generally a fixed amount.
---	---
●	To allocate the transaction price, if necessary, to each performance<br>obligation (to each good or service that is different) for an amount that represents the part of the benefit that the Company expects<br>to receive in exchange for the right of delivering the services engaged with the customer.
---	---
●	To recognize revenue when the Company satisfies the performance obligation<br>through the rendering of services engaged.
---	---

All of the conditions mentioned above are accomplished normally when the services are rendered to the customer and this moment is considered a point in time. The reported revenue reflects services delivered at the contract or agreed-upon price.

Contract liabilities consist of deferred revenue related to prepaid fees received from customers for future information security service over the term of the service agreement. The Company expects to recognize as revenue of $27,042 within the next 12 months and $48,600 after 12 months to 36 months.

Revenue is recognized when the related performance obligation is satisfied.

Disaggregation information of revenue by service type which was recognition based on the nature of performance obligation disclosed above is as follows:

	For the six months ended <br>June 30,
	2022	Percentage of <br> Total			2021	Percentage of <br> Total
Service Type		Revenue				Revenue
	(Unaudited)				(Unaudited)
Cash-In-Transit – Non-Dedicated Vehicles (CIT Non-DV)			31.8	%			32.3	%
Cash-In-Transit – Dedicated Vehicle to Banks (CIT DV)			12.6	%			12.9	%
ATM Management			27.9	%			31.5	%
Cash Processing (CPC)			8.3	%			7.6	%
Cash Center Operations (CCT)			7.1	%			8.4	%
Consolidate Cash Center (CCC)			1.3	%			0.3	%
Cheque Center Service (CDC)			0.05	%			0.2	%
Others **			0.05	%			0.3	%
Cash Deposit Management Solutions (GDM)			5.1	%			4.6	%
Robotics AI solutions			4.2	%			1.1	%
Information security			1.6	%			0.8	%
Total			100.0	%			100.0	%

All values are in US Dollars.

**	Others include primarily revenue from express cash and coin processing services.

F-15

During the six months ended June 30, 2022 and 2021, revenue amounting to $16,808,399 and $18,293,461 were generated from third parties, respectively; and $134,123 and $111,564 were generated from a related party (see Note 23).

2.12	Cost of sales

Cost of sales consists primarily of internal labor costs and related benefits, and other overhead costs that are directly attributable to services provided.

2.13	New and amended accounting standards

All new standards and amendments that are effective for annual reporting period commencing January 1, 2022 have been applied by the Company for the six months ended June 30, 2022. The adoption of these new and amended standards did not have material impact on the consolidated financial statements of the Company. A number of new standards and amendments to standards have not come into effect for the year beginning January 1, 2022, and they have not been early adopted by the Company in preparing these consolidated financial statements. None of these new standards and amendments to standards is expected to have a significant effect on the consolidated financial statements of the Company.

3.	BUSINESS COMBINATION

During the six months ended June 30, 2022, the Company acquired five subsidiaries, these acquisitions have been accounted for in accordance with IFRS 3 guidelines under acquisition accounting, whereby the Company recognized the assets and liabilities transferred at their carrying amounts with carry-over basis.

A Purchase Price Allocation exercise has been undertaken to establish the constituent parts of the acquired companies’ balance sheet at fair value on acquisition. As is customary in these circumstances, this will remain under review and subject to change during the twelve-month hindsight period.

(i)	On March 22, 2022, the Company closed an acquisition of Shenzhen GFAI<br>and Guangzhou GFAI. A total of $1,000,000 cash was paid and 2,142,852 shares were issued and valued at the $1.22 per share in consideration<br>of 100% of the equity interest in both companies.

The following represents the purchase price allocation at the date of the acquisition:

	March 22,<br><br> 2022
Cash and cash equivalents	$	2,188
Other current assets		6,007,837
Property, plant and equipment		2,055,610
Intangible assets		1,592,783
Other non-current assets		29,142
Current liabilities		(7,937,436	)
Other non-current liabilities		(2,854	)
Goodwill		1,867,009
Total purchase price	$	3,614,279

The total revenue included in the Consolidated Statement of Profit or Loss since March 22, 2022 contributed by Shenzhen GFAI and Guandzhou GFAI was $366,813. Total net loss incurred by Shenzhen GFAI and Guangzhou GFAI since March 22, 2022 was $486,000.

Had Shenzhen GFAI and Guangzhou GFAI been consolidated from January 1, 2022, the Consolidated Statement of Profit or Loss would show total revenue of $661,489 and total net loss of $589,749.

(ii)	On June 22, 2022, the Company closed an acquisition of Beijing Wanjia. A total of $840,000 cash was paid and 3,780,000 shares were issued and valued at $0.52 per share in consideration of 100% of the equity interest in Beijing Wanjia.

F-16

The following represents the purchase price allocation at the date of the acquisition:

	June 22,2022
Cash and cash equivalents	$	38,342
Other current assets		2,219,318
Property, plant and equipment		20,488
Intangible assets		1,593,398
Other non-current assets		203,765
Current liabilities		(1,681,573	)
Goodwill		411,862
Total purchase price	$	2,805,600

The revenue and net income included in the Consolidated Statement of Profit and Loss since June 22, 2022 contributed by Beijing Wanjia were $nil.

Had Beijing Wanjia been consolidated from January 1, 2022, the Consolidated Statement of Profit or Loss would show revenue of $1,457,046 and net loss of $345,824.

(iii)	On January 20, 2022, the Company closed an acquisition to obtain 100% equity interest in AI Malaysia. The consideration is approximately $1 (RM1).

The following represents the purchase price allocation at the date of the acquisition:

	January 20,<br><br> 2022
Cash and cash equivalents	$	12,500
Current liabilities		(13,184	)
Goodwill		685
Total purchase price	$	1

The revenue included in the Consolidated Statement of Profit and Loss since January 20, 2022 contributed by AI Malaysia was $nil. Net loss incurred by AI Malaysia was $46,497 over the same period.

Had AI Malaysia been consolidated from January 1, 2022, the Consolidated Statement of Profit or Loss would show revenue of $nil and net loss of $46,497.

(iv)	On February 9, 2022, the Company closed an acquisition to obtain 100% equity interest in AI Macau. The consideration is approximately $3,205 (MOP25,000).

The following represents the purchase price allocation at the date of the acquisition:

	February 9,2022
Cash and cash equivalents	$	21,038
Other current assets		4,162
Current liabilities		(92,350	)
Goodwill		70,355
Total purchase price	$	3,205

AI Macau acts as an agent-only subsidiary company, operating solely and for all purposes as the agent of AI Hong Kong for the deployment of robots and thus, AI Macau has no independent revenue of its own.

F-17

4.	CASH, CASH EQUIVALENTS AND RESTRICTED CASH
	As at<br> June 30,<br><br> 2022		As at<br> December 31, <br><br>2021
---	---	---	---	---
	(Unaudited)
Cash on hand	$	367,367	$	349,846
Cash in bank		7,361,124		12,378,937
Subtotal		7,728,491		12,728,783
Restricted cash		1,811,750		3,125,028
Cash, cash equivalents, and restricted cash	$	9,540,241	$	15,853,811
5.	INVENTORIES
---	---
	As at<br> June 30,<br> 2022			As at<br> December 31,<br> 2021
---	---	---	---	---	---
	(Unaudited)
Robots in warehouse	$	8,206,933		$	1,387,160
Robots in transit		-			389
Security equipment		1,130,207			-
Impairment provision for inventories		(567,439	)		-
Inventories	$	8,769,701		$	1,387,549

Impairment provision for inventories arose from the acquisitions through business combinations. No additional impairment provision for inventories was recorded for the six months ended June 30, 2022 and 2021.

6.	TRADE RECEIVABLES
	As at<br> June 30,<br> 2022			As at<br> December 31,<br> 2021
---	---	---	---	---	---
	(Unaudited)
Trade receivable	$	5,530,185		$	4,939,568
Impairment provision for trade receivables		(66,116	)		-
Trade receivable, net	$	5,464,069		$	4,939,568

Impairment provision for trade receivables arose from the acquisitions through business combinations. No additional impairment provision for trade receivables was recorded for the six months ended June 30, 2022 and 2021.

7.	WITHHOLDING TAXES RECEIVABLE

---

	As at<br> June 30,<br><br> 2022			As at<br> December 31,<br><br> 2021
	(Unaudited)
Balance at January 1,	$	3,531,953		$	4,225,039
Addition		381,966			826,634
Collection		(1,045,061	)		(648,025	)
Write off/ Allowance for uncollectible		(263,340	)		(190,038	)
Exchange difference		(153,902	)		(681,657	)
Balance at end of period/year	$	2,451,616		$	3,531,953

F-18

	As at<br> June 30,<br><br> 2022		As at<br> December 31,<br><br> 2021
	(Unaudited)
Current portion	$	-	$	-
Non-current portion		2,451,616		3,531,953
Withholding taxes receivable	$	2,451,616	$	3,531,953

During the six months ended June 30, 2022, the Company received a withholding tax refund of THB35,312,291 (approximately $1.0 million) in connection with the Company’s 2016 to 2017 withholding taxes refund applications (totaled THB56,107,574 or approximately $1.6 million). The Company wrote off approximately $0.6 million, representing the difference between the receivable recorded and amount of known refund from the Thai Revenue Department. The Company did not have any write offs during the six months ended June 30, 2021.

Out of prudence, based on amount written off for the receivable related to year 2013 to 2017, the Company recorded an allowance of approximately $0.09 million against its withholding taxes receivable for the six months ended June 30, 2022, and an allowance of approximately $0.1 million against its withholding taxes receivable for the six months ended June 30, 2021.

8.	OTHER RECEIVABLES
		As at<br> June 30,<br><br> 2022			As at<br> December 31, <br><br>2021
---	---	---	---	---	---	---
		(Unaudited)
Cash management systems	(a)	$	188,047		$	-
Cash advance to a third party vendor	(b)		828,173			-
Cash advances to unrelated third parties	(c)		2,130,628			-
Impairment provision for other receivables	(c)		(2,130,628	)		-
		$	1,016,220		$	-
(a)	On March 2, 2022, GF Cash (CIT) entered into a technical service agreement with Cash Processing Solutions Limited (“CPS”), a third -party vendor to develop a set of cash management systems for the Company’s CIT, ATM Management and CPC operations (“IMC project”). The contract sum was THB21,256,800 (approximately $0.6 million), in which $188,047 was paid during the six months ended June 30, 2022. The IMC project was terminated on July 1, 2022 due to the unsatisfactory performance by CPS during the development. GF Cash (CIT) is in the process of claiming back the amount paid to CPS.
---	---
(b)	The cash advance to third party vendors was arisen from the acquisitions through business combinations. Beijing Wanjia made a business advance to Beijing Security System Emergency Maintenance Service Center (“北京安防系统紧急维修维护服务中心”) for operational purposes.
---	---
(c)	The cash advances to unrelated third parties and the impairment provision<br>for other receivables arose from the acquisitions through business combinations. The Company made a full provision on the cash advances<br>to unrelated third parties as this balance is expected to be uncollectible. No additional impairment provision for other receivables was<br>recorded for the six months ended June 30, 2022 and 2021.
---	---

F-19

9.	OTHER CURRENT AND OTHER NON-CURRENT ASSETS
	As at<br> June 30,<br><br> 2022		As at<br> December 31,<br><br> 2021
---	---	---	---	---
	(Unaudited)
VAT receivable	$	312,722	$	125,981
Prepayments – office rental		1,224,564		807,172
Prepayments – insurance		421,724		110,408
Prepayments – others		136,520		92,234
Uniforms		18,657		19,963
Tools and supplies		146,704		81,343
Deferred costs		27,042		38,880
Staff advance		169,401		-
Other current assets	$	2,457,334	$	1,275,981
Deposits	$	433,543	$	296,986
Deferred costs		48,600		48,600
Other non-current assets	$	482,143	$	345,586
10.	DEPOSITS PAID FOR BUSINESS ACQUISITIONS
---	---
		As at<br> June 30,<br><br> 2022		As at<br> December 31,<br><br> 2021
---	---	---	---	---	---
		(Unaudited)
Cash portion	(a)	$	2,160,000	$	-
Equity portion			4,860,000		-
		$	7,020,000	$	-

On May 24, 2022, the Company entered into a securities purchase agreement with Shenzhen Kewei Robot Technology Co., Limited (“Shenzhen Kewei”) to acquire 100% of the equity interests in seven Kewei Group companies from Shenzhen Kewei. The acquisition purchase price of $21,600,000 were paid in a mix of cash (10%) and restricted ordinary shares of the Company (90%) at $2.00 per share. During the six months ended June 30, 2022, the Company has fully paid the purchase considerations. Cash amount of $2,160,000 was paid and 9,720,000 restricted ordinary shares of the Company were issued. The restricted ordinary shares issued was valued at the $0.50 per share based on the market share price at the issuance date, the equity portion of the deposit paid for business acquisitions was $4,860,000.

On September 13, 2022, the Company terminated the securities purchase agreement, the cash paid to Shenzhen Kewei will be refunded and the shares issued to Shenzhen Kewei will be cancelled within 90 days of the signing of the termination agreement.

F-20

11.	PROPERTY, PLANT and EQUIPMENT
	Leasehold improvements			Machinery and equipment			Office decoration and equipment			Vehicles			Assets under construction			GDM machines			Robots			Total
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
Cost
At<br> December 31, 2020	$	3,649,107		$	5,713,840		$	5,951,808		$	17,885,762		$	-		$	1,883,116		$	884,950		$	35,968,583
Additions		4,284			47,695			54,330			399,639			23,027			-			2,385,878			2,914,853
Disposals		-			(33,571	)		(3,136	)		(115,471	)					-			(7,443	)		(159,621	)
Exchange<br> differences		(231,811	)		(362,976	)		(378,093	)		(1,136,207	)		-			(119,627	)		(26,570	)		(2,255,284	)
At June 30, 2021 (Unaudited)		3,421,580			5,364,988			5,624,909			17,033,723			23,027			1,763,489			3,236,815			36,468,531
At<br> December 31, 2021	$	3,239,683		$	5,108,501		$	5,412,444		$	16,233,868		$	248,686		$	1,713,926		$	5,369,070		$	37,326,178
Acquisitions<br> through business combinations		-			-			205,070			141,619			-			-			2,571,013			2,917,702
Additions		26,342			18,698			18,603			80,350			-			318,905			2,178,914			2,641,812
Disposals		(101,834	)		(7,437	)		(15,463	)		(344,818	)		(211,659	)		(15,892	)		(12,273	)		(709,376	)
Exchange<br> differences		(173,963	)		(281,325	)		(298,630	)		(880,949	)		(4,472	)		(107,391	)		(392,122	)		(2,138,852	)
At June 30, 2022 (Unaudited)		2,990,228			4,838,437			5,322,024			15,230,070			32,555			1,909,548			9,714,602			40,037,464
Accumulated Depreciation
At<br> December 31, 2020	$	2,923,013		$	5,390,966		$	5,124,622		$	14,004,064		$	-		$	616,280		$	25,284		$	28,084,229
Depreciation<br> charged for the period		78,674			89,833			111,429			611,225			-			174,897			178,999			1,245,057
Disposals		-			(33,568	)		(3,091	)		(115,471	)					-			(248	)		(152,378	)
Exchange<br> differences		(185,685	)		(342,465	)		(325,546	)		(889,619	)		-			(39,150	)		(990	)		(1,783,455	)
As June 30, 2021 (Unaudited)		2,816,002			5,104,766			4,907,414			13,610,199			-			752,027			203,045			27,393,453
At<br> December 31, 2021	$	2,693,472		$	4,906,277		$	4,799,149		$	13,447,168		$	-		$	891,378		$	691,433		$	27,428,877
Acquisitions<br> through business combinations		-			-			184,364			136,723			-			-			520,516			841,603
Depreciation<br> charged for the period		51,903			57,623			96,235			416,775			-			188,620			762,874			1,574,030
Disposals		(99,439	)		(7,396	)		(15,432	)		(330,993	)		-			(5,303	)		(461	)		(459,024	)
Exchange<br> differences		(146,005	)		(271,901	)		(268,318	)		(742,974	)		-			(56,970	)		(81,330	)		(1,567,498	)
As June 30, 2022 (Unaudited)		2,499,931			4,684,603			4,795,998			12,926,699			-			1,017,725			1,893,032			27,817,988
Net book value
At June 30, 2021 (Unaudited)	$	605,578		$	260,222		$	717,495		$	3,423,524		$	23,027		$	1,011,462		$	3,033,770		$	9,075,078
At June 30, 2022 (Unaudited)	$	490,298		$	153,834		$	526,026		$	2,303,371		$	32,555		$	891,822		$	7,821,570		$	12,219,476

There was no impairment of property, plant and equipment recorded for the six months ended June 30, 2022 and 2021. No property, plant and equipment were pledged as security for bank borrowings.

12.	RIGHT-OF-USE ASSETS AND OPERATING LEASE LIABILITIES

The carrying amounts of right-of-use assets are as below:

	As at<br> June 30,<br><br> 2022			As at<br> December 31,<br><br> 2021
	(Unaudited)
As at January 1	$	2,364,993		$	4,190,351
New leases		804,500			824,734
New leases acquired through business combinations		167,597			-
Depreciation expense		(1,095,227	)		(2,279,722	)
Exchange difference		(108,566	)		(370,370	)
Net book amount	$	2,133,297		$	2,364,993

Lease liabilities were measured at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate. The weighted average incremental borrowing rate applied to new leases during the six months ended June 30, 2022 varies from 3.49% to 5% in different regions. The weighted average incremental borrowing rate applied to new leases during the six months ended June 30, 2021 was 3.25%.

F-21

During the six months ended June 30, 2022 and 2021, interest expense of $41,211 and $125,245 arising from lease liabilities was included in finance costs, respectively. Depreciation expense related to right-of-use assets was $1,064,623 and $1,223,282, respectively during the six months ended June 30, 2022 and 2021.

13.	INTANGIBLE ASSETS
												Assets<br> under construction
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	Computer<br><br> software			Right-of-use<br><br> Platform		Customer<br><br> base		Technical<br><br> know-how		Security<br><br><br> Surveillance<br><br> system		Cash<br><br> Management<br> Systems			Intelligent<br><br> Cloud<br> Platform		Total
Cost
At December 31, 2020	$	995,045		$	-	$	-	$	-	$	-	$	-		$	-	$	995,045
Additions		4,782			-		-		-		-		-			-		4,782
Exchange<br> differences		(63,211	)		-		-		-		-		-			-		(63,211	)
At June 30,<br> 2021 (Unaudited)		936,616			-		-		-		-		-			-		936,616
At December 31, 2021	$	907,304		$	-	$	-	$	-	$	-	$	-		$	-	$	907,304
Acquisitions through<br> business combinations		-			733,311		1,120,688		514,968		1,102,647		-			-		3,471,614
Additions		1,761			-				-		-		81,119			3,000,000		3,082,880
Exchange<br> differences		(49,955	)		-		-		-		-		(3,525	)				(53,480	)
At June 30,<br> 2022 (Unaudited)		859,110			733,311		1,120,688		514,968		1,102,647		77,594			3,000,000		7,408,318
Accumulated<br> amortization
At December 31, 2020	$	771,637		$	-	$	-	$	-	$	-	$	-		$	-	$	771,637
Amortization charged<br> for the period		24,559			-		-		-		-		-			-		24,559
Exchange<br> differences		(49,018	)		-		-		-		-		-			-		(49,018	)
As<br> June 30, 2021 (Unaudited)		747,178			-		-		-		-		-			-		747,178
At December 31, 2021	$	742,988		$	-	$	-	$	-	$	-	$	-		$	-	$	742,988
Acquisitions through<br> business combinations		-			-		-		-		285,433		-			-		285,433
Amortization charged<br> for the period		25,290			17,951		129,327		-		-		-			-		172,568
Exchange<br> differences		(41,944	)				-		-		-		-			-		(41,944	)
As<br> June 30, 2022 (Unaudited)		726,334			17,951		129,327		-		285,433		-			-		1,159,045
Net book value
At<br> June 30, 2021 (Unaudited)	$	189,438		$	-	$	-	$	-	$	-	$	-		$	-	$	189,438
At<br> June 30, 2022 (Unaudited)	$	132,776		$	715,360	$	991,361	$	514,968	$	817,214	$	77,594		$	3,000,000	$	6,249,273
14.	TRADE AND OTHER PAYABLES AND OTHER CURRENT LIABILITIES
---	---
	As atJune 30,2022		As atDecember 31,2021
---	---	---	---	---
	(Unaudited)
Trade payables – third parties	$	2,748,393	$	675,227
Accrued salaries and bonus		835,060		262,396
Accrued customer claims, cash loss and shortage **		66,989		91,098
Trade and other payables	$	3,650,442	$	1,028,721
Output VAT	$	90,392	$	95,348
Accrued expenses		499,835		572,157
Payroll payable		380,669		936,080
Other payables		420,214		177,850
Deferred revenue		292,245		43,200
Other current liabilities	$	1,683,355	$	1,824,635
**	Includes a provision for penalty<br>for failure to meet certain performance indicators as stipulated in certain customer contracts for approximately $11,800 and $14,600<br>as at June 30, 2022 and 2021, respectively.
---	---

F-22

15.	BORROWINGS
	As at<br> June 30,<br> 2022		As at<br> December 31,<br> 2021
---	---	---	---	---
	(Unaudited)
Current portion of borrowings	$	1,011,749	$	933,110
Non-current portion of borrowings		518,613		859,120
Borrowings	$	1,530,362	$	1,792,230

The Company maintains borrowings with one financial institution. The borrowings are used for working capital purposes to support its business operations in Thailand. Those borrowings carry interest at the rates varying from 2% to 5.47% per annum. The borrowings mature on various dates from August 13, 2022 to April 7, 2025. For the six months ended June 30, 2022 and 2021, the interest expense was $33,745 and $22,212, respectively.

As of June 30, 2022, the Company has unused bank overdraft availability of approximately $283,000 (THB10 million) and no unused trust receipts availability.

As of June 30, 2021, the Company has unused bank overdraft availability of approximately $312,000 (THB10 million) and unused trust receipts availability of approximately $1,560,000 (THB50 million).

16.	FINANCE LEASE LIABILITIES
	As at<br> June 30,<br> 2022		As at<br> December 31,<br> 2021
---	---	---	---	---
	(Unaudited)
Current portion	$	261,940	$	619,301
Non-current portion		622,062		666,455
Finance lease liabilities	$	884,002	$	1,285,756

For the six months ended June 30, 2022 and 2021, interest expense was $30,942 and $46,102, respectively.

The minimum lease payments under finance lease agreements are as follows:

	As at<br> June 30,<br> 2022			As at<br> December 31,<br> 2021
	(Unaudited)
Within 1 year	$	281,201		$	673,105
After 1 year but within 5 years		667,850			713,092
Less: Finance charges		(65,049	)		(100,441	)
Present value of finance lease liabilities, net	$	884,002		$	1,285,756

F-23

Finance lease assets comprise primarily vehicles and office equipment as follow:

	As at <br> June 30,<br> 2022			As at<br> December 31, <br> 2021
	(Unaudited)
Cost	$	2,669,252		$	2,819,697
Less: Accumulated depreciation		(877,936	)		(927,408	)
Net book value	$	1,791,316		$	1,892,290
17.	TAXATION
---	---

---

Value added tax (“VAT”)

---

GF Cash (CIT) and AI R&I are the subsidiaries operating in Thailand, which are subject to a statutory VAT of 7% for services in Thailand. Shenzhen GFAI, Guangzhou GFAI and Beijing Wanjia are the subsidiaries operating in the PRC, which are subject to a statutory VAT of 13% for goods delivered and 7% for services provided in the PRC. The output VAT is charged to customers who receive services from the Company and the input VAT is paid when the Company purchases goods and services from its vendors. The input VAT can be offset against the output VAT. The VAT payable is presented on the statements of financial position when input VAT is less than the output VAT. A recoverable balance is presented on the balance sheets when input VAT is larger than the output VAT.

Deferred taxes

---

Current income taxes are provided on the basis of net income for financial reporting purposes, adjusted for income and expense items which are not assessable or deductible for income tax purposes, in accordance with the regulations of the relevant tax jurisdictions. Deferred income taxes are accounted for using an asset and liability method. Under this method, deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. The tax base of an asset or liability is the amount attributed to that asset or liability for tax purposes. The effect on deferred taxes of a change in tax rates is recognized in the consolidated statements of profit or loss in the period of change. A valuation allowance is provided to reduce the amount of deferred tax assets if it is considered more likely than not that some portion of, or all of the deferred tax assets will not be realized.

The Company offsets deferred tax assets and deferred tax liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realize the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

18.	PROVISION FOR EMPLOYEE BENEFITS

The Company has a defined benefit plan based on the requirement of the Thailand Labor Protection Act B.E.2541 (1988) to provide retirement benefits to employees based on pensionable remuneration and length of service which are considered as unfunded. There were no plan assets set up and the Company will pay benefits when needed.

F-24

	Provision<br> for employee<br> benefits
	2022			2021
	(Unaudited)
Defined benefit obligations at January 1	$	5,827,355		$	6,841,673
Estimate for the six months period		(356,621	)		(294,175	)
Defined benefit obligations at June 30 (Unaudited)	$	5,470,714		$	6,547,498
19.	SHAREHOLDERS’ EQUITY
---	---

On January 20, 2022, the Company completed a private placement with certain investors to issue (i) 7,919,997 ordinary shares; and (ii) 11,879,993 ordinary shares issuable upon the exercise of warrants, at an initial exercise price of $1.30 per share. On April 6, 2022, the Company completed another private placement with certain investors that the Company agreed to sell to such investors an aggregate of 8,739,351 ordinary shares, the exercise price of both the Company’s IPO warrants which was issued on September 28, 2021 and private warrants which was issued on January 20, 2022, was adjusted to $1.15 pursuant to the antidilution provisions of warrants.

A total of 1,095,146 warrants were exercised during the six months ended June 30, 2022. 7,100,495 warrants were exercised subsequently from July 1, 2022 to the date of this report. As of June 30, 2022, we have an aggregate of 15,122,196 warrants issued and outstanding. On July 12, 2022, the Company entered into warrant solicitation inducement letters with several investors that are existing holders of its warrants through the private placement on January 20, 2022 (“Private Warrants”) wherein the investors agreed to exercise 5,581,918 outstanding warrants to purchase an aggregate of 5,581,918 ordinary shares for cash, at an exercise price reduced by the Company from $1.15 per share to $0.238 per share. In consideration for the immediate exercise of the existing warrants for cash, the Company issued one-half (1/2) of an ordinary share for each warrant exercise. As a result, the exercising holders received approximately 2,790,959 ordinary shares as share consideration. The Company received aggregate net proceeds of approximately $1.23 million. As a result of the warrant exercise, the exercise price of the Company’s warrants issued through the initial public offering on September 28, 2021 (“Public Warrants”) is adjusted to $0.16 and the exercise price of the Company’s Private Warrants is adjusted to $0.238.

On March 14, 2022, a total of 2,142,582 shares were issued to acquire 100% of the equity interests in Shenzhen GFAI and Guangzhou GFAI.

On June 16, 2022, a total of 3,780,000 shares were issued to acquire 100% of the equity interests in Beijing Wanjia.

On June 16, 2022, a total of 9,720,000 shares were issued for a deposit to acquire 100% of the equity interests in seven Kewei Group companies. On September 13, 2022, the Company and the shareholders of seven Kwei Group companies signed a termination agreement to terminate such acquisition. The shares issued will be cancelled (see Note 10).

On May 24, 2022, a total of 113 shares were cancelled as per shareholders’ request.

20.	STOCK-BASED COMPENSATION

On January 25, 2022, the Company granted and issued 260,000 restricted ordinary shares to certain employees under the Company’s 2022 Equity Incentive Plan. This stock-based compensation expense was amounting to $238,914.

On October 25, 2021, the Company entered into an agreement with a third party vendor to provide investors relations services for a term of one-year. The agreement was terminated on May 7, 2022. During the six months ended June 30, 2022, the Company issued 20,000 ordinary shares to the vendor as compensation for serving the Company. This stock-based compensation expense was amounting to $13,181.

F-25

21.	SELLING, DISTRIBUTION AND ADMINISTRATIVE EXPENSES
	For the six months ended<br> June 30,
---	---	---	---	---
	2022		2021
	(Unaudited)		(Unaudited)
Staff expense	$	2,988,331	$	1,248,056
Rental expense		77,999		340,752
Depreciation and amortization expense		1,176,705		235,604
Utilities expense		30,021		81,255
Travelling and entertainment expense		216,633		77,747
Marketing expense		228,054		-
Professional fees		1,262,085		331,522
Repairs and maintenance		26,835		26,226
Employee benefits		228,506		353,358
Other service fees		124,556		153,906
Other expenses**		618,271		423,182
	$	6,977,996	$	3,271,608
**	Other expenses mainly comprised<br>of office expenses, stamp duties, training costs, transportation of robots, etc.
---	---
22.	LEGAL RESERVE
---	---

Thailand

Under the provisions of the Civil and Commercial Code, GF Cash (CIT) is required to set aside as a legal reserve at least 5% of the profits arising from the business of the Company at each dividend distribution until the reserve is at least 10% of the registered share capital. The legal reserve is non-distributable. The Company reserve has met the legal reserve requirement of $223,500 as of June 30, 2022 and December 31, 2021.

The PRC

Pursuant to the laws applicable to the PRC’s Foreign Investment Enterprises, the Company must make appropriations from after-tax profit to non-distributable reserve funds. Subject to certain cumulative limits, the general reserve requires annual appropriations of 10% of after-tax profits as determined under the PRC laws and regulations at each year-end until the balance reaches 50% of the PRC entity registered capital; the other reserve appropriations are at the Company’s discretion. These reserves can only be used for specific purposes of enterprise expansion and are not distributable as cash dividends. During the six months ended June 30, 2022, the Company did not accrue any legal reserve.

23.	RELATED PARTY TRANSACTIONS

The principal related party balances and transactions as of and for the period/year ended June 30, 2022 and December 31, 2021 are as follows:

Amounts due from related parties:

		As at<br> June 30,<br> 2022		As at<br> December 31, <br> 2021
		(Unaudited)
Guardforce TH Group Company Limited	(a)	$	856	$	6,335
Shenzhen Intelligent Guardforce Robot Technology Co., Limited	(b)		6,049,384		-
Shenzhen Kewei Robot Technology Co., Limited and its subsidiaries	(c)		354,645		-
CSF Mingda Technology Co., Ltd	(c)		11,477		-
Guardforce AI Service Limited			-		626
Guardforce AI Technology Limited			-		626
GF Robotics Malaysia Sdn. Bhd			-		11,973
Macau GF Robotics Limited			-		5,058
Quantum Infosec Inc			-		1,389
		$	6,416,362	$	26,007

F-26

(a)	Amounts due from Guardforce TH Group Company Limited represents business<br>advances for operational purposes.

(b)	Amounts due from Shenzhen Intelligent Guardforce Robot Technology Co.,<br>Limited comprised of $5,908,930 represent prepayments for the purchase of robots from a related party and $140,134 expense paid on behalf<br>of a related party.

(c)	These related parties are owned or controlled by Mr. Tu, the Company’s<br>majority shareholder or Mr. Tu’s father. Amounts due from related parties as of June 30, 2022 represent business advances for operational<br>purposes.

Amounts due to related parties:

		As at<br> June 30,<br> 2022		As at<br> December 31,<br> 2021
		(Unaudited)
Mr. Tu	(a)	$	109,607	$	109,607
Guardforce Holdings (HK) Limited	(b)		331,368		163,590
Profit Raider Investment Limited	(a)		1,926,544		1,626,726
Richard Stagg	(c)		17,624		15,976
GF Technovation Company Limited			4,487		-
Quantum Infosec Inc			724		-
Shenzhen Kewei Robot Technology Co., Limited and its subsidiaries	(d)		2,770,085		-
Shenzhen Zhongzhi Yonghao Robot Co., Ltd.	(d)		407,528		-
Shenzhen Qianban Technology Co., Ltd.	(e)		101,564		-
Guardforce Security Service (Shanghai) Co., Ltd.	(e)		186,583		-
Shenzhen Intelligent Guardforce Robot Technology Co., Limited			-		301,853
		$	5,856,114	$	2,217,752

(a)	Amounts due to Mr. Tu and Profit Raider Investment Limited represented interest accrued on the respective loans.

(b)	Amounts due to Guardforce Holdings (HK) Limited are comprised of $164,419 advances made and $166,949 accrued interests on the loans.

(c)	Amounts due to Richard Stagg are comprised of $15,976 advances made and $1,648 accrued interests on the advance at 3% interest rate per annum. The balance was fully repaid in July 20, 2022.

(d)	These related parties are owned or controlled by Mr. Tu, the Company’s majority shareholder. Amounts due to related parties as of June 30, 2022 represent accounts payable for the purchase of robots from the related parties.

(e)	Shenzhen Qianban Technology Co., Ltd is owned or controlled by Mr. Tu, the Company’s majority shareholder and Guardforce Security Service (Shanghai) Co., Ltd. is owned or controlled by Mr. Tu’s father. Amounts due to related parties as of June 30, 2022 represent business advances for operational purposes.

F-27

Short-term borrowings from related parties:

		As at<br> June 30,<br> 2022		As at<br> December 31,<br> 2021
		(Unaudited)
Profit Raider Investment Limited	(a)	$	13,474,546	$	13,506,184
Guardforce Holdings (HK) Limited	(b)		2,735,000		-
		$	16,209,546	$	13,506,184

Long-term borrowings from related parties:

		As at<br> June 30,<br> 2022		As at<br> December 31,<br> 2021
			(Unaudited)
Guardforce Holdings (HK) Limited	(b)	$	490,500	$	3,895,500
Mr. Tu	(c)		1,437,303		1,437,303
		$	1,927,803	$	5,332,803

(a)	The loan with Profit Raider Investment Limited is due on December 31, 2022, bearing interest rate at 4%. For the six months ended June 30, 2022 and 2021, interest expense was $299,817 and $117,150, respectively. As of the date of this report, the Company has been negotiating with Profit Raider on the further extension of loan.

(b)

On December 31, 2019, the Company entered into an agreement with Guardforce Holdings (HK) Limited whereby Guardforce Holdings (HK) Limited loaned $1,499,998 to the Company. The loan is unsecured and it bears an interest rate of 3%. The loan was initially due on December 31, 2020. During the year ended December 31, 2021 and 2020, the Company repaid $245,000 and $507,998 to partially settle the principal, respectively. The loan was extended to December 22, 2022 bearing interest rate at 2%. During the six months ended June 30, 2022, the Company repaid $670,000 to partially settle the principal. On July 26 2022, the outstanding balance of this loan was extended to June 30, 2025 with the same terms and conditions. For the six months ended June 30, 2022 and 2021, interest expense on this loan was $770 and $nil, respectively. This loan is classified as long-term borrowings from a related party.<br> <br><br> <br>On April 17, 2020, the Company borrowed $2,735,000. The loan is unsecured and bears an interest rate at 2%. The loan is due on April 16, 2023. For the six months ended June 30, 2022 and 2021, interest expense on this loan was $27,350 and $nil, respectively. This loan is classified as short-term borrowings from a related party.<br> <br><br> <br>On September 9, 2020, the Company borrowed $413,500. The loan is unsecured and it bears interest at 2%. The loan is due on September 8, 2023. For the six months ended June 30, 2022 and 2021, interest expense on this loan was $4,135 and $nil, respectively. This loan is classified as long-term borrowings from a related party.

(c)	On September 1, 2018, the Company entered into an agreement with Mr.<br>Tu whereby he lent $1,437,303 (RMB10 million) to the Company. The loan is due on August 31, 2022 with an interest rate at 1.5%. No interest<br>was accrued for the six months ended June 30, 2022 and 2021. On July 26 2022, the Company extended the loan to June 30, 2025 with the<br>same terms and conditions.

Related party transactions:

		For the six months ended<br> June 30,
Nature		2022		2021
		(Unaudited)		(Unaudited)
Service/ Products received from related parties:
Guardforce Security (Thailand) Company Limited	(a)	$	67,864	$	-
Shenzhen Intelligent Guardforce Robot Technology Co., Limited – Purchases	(b)		7,008,322		4,652,125
Shenzhen Kewei Robot Technology Co., Ltd. – Purchases	(b)		844,255		-
Shenzhen Kewei Robot Technology Co., Limited – ICP	(c)		3,000,000		-
		$	7,920,441	$	4,652,125
Service/ Products delivered to related parties:
GF Technovation Company Limited – Sales	(d)	$	134,123	$	111,564

Nature of transactions:

(a)	Guardforce Security (Thailand) Co., Ltd. provided security guard services to the Company;

F-28

(b)	The Company purchased robots from Shenzhen Intelligent Guardforce Robot<br>Technology Co., Limited and Shenzhen Kewei Robot Technology Co., Ltd.;
(c)	On February 8, 2022, the Company entered into a Commissioned Development Agreement with Shenzhen Kewei Robot Technology Co., Limited (“Shenzhen Kewei”) for the development of a robotics management platform named GFAI Intelligent Cloud Platform V2.0 (“ICP”). The contract amount was $3,000,000 which was paid as a one-time lump sum payment after the execution of the agreement.
(d)	The Company sold robots and spare parts to GF Technovation Company Limited.
24.	CONSOLIDATED SEGMENT DATA
---	---

Selected information by segment is presented in the following tables for the six months ended June 30, 2022 and 2021:

	For the six months ended<br> June 30,
Revenues^(1)^	2022		2021
	(Unaudited)		(Unaudited)
Secured logistics	$	15,960,547	$	18,061,004
Information security		262,934		140,149
Robotics AI solutions		719,041		203,872
	$	16,942,522	$	18,405,025
(1)	Revenue excludes intercompany sales.
---	---
	For the six months ended<br> June 30,
---	---	---	---	---	---	---
Loss from operations	2022			2021
	(Unaudited)			(Unaudited)
Secured logistics	$	(962,310	)	$	(455,312	)
Information security		(19,041	)		19,044
Robotics AI solutions		(1,977,324	)		(255,515	)
Corporate and others ^(2)^		(2,590,961	)		(619,489	)
Loss from operations		(5,549,636	)		(1,311,272	)
Total other income from five segments		46,859			237,178
Foreign exchange losses, net:
- Secured logistics		(751,622	)		(38,872	)
- Information security		44			-
- Robotics AI solutions		5,973			-
- Corporate and others		(154	)		(1,265	)
Finance costs:
- Secured logistics		(405,365	)		(440,707	)
- Information security		(1,648	)		(245	)
- Robotics AI solutions		(3,848	)		-
Loss before income taxes		(6,659,397	)		(1,555,183	)
Income tax benefit		320,183			-
Net loss		(6,339,214	)		(1,555,183	)
Less: Loss (Profit) attributable to the non-controlling interest		32,392			(91	)
Net loss attributable to the Company	$	(6,306,822	)	$	(1,555,274	)
(2)	Includes non-cash compensation, professional fees and consultancy fees for the Company.
---	---

Non-cash compensation of $252,095 was solely attributable the Corporate and others segment.

F-29

(3)	o the Segment of Corporate and others.

Depreciation and amortization by segment for six months ended June 30, 2022 and 2021 are as follows:

	For the six months ended<br> June 30,
Depreciation and amortization:	2022		2021
	(Unaudited)		(Unaudited)
Secured logistics	$	1,887,059	$	2,357,796
Robotics AI solutions		703,075		184,636
	$	2,590,134	$	2,542,432

Total assets by segment as of June 30, 2022 and December 31, 2021 are as follows:

Total assets	As atJune 30,2022		As atDecember 31,2021
	(Unaudited)		(Unaudited)
Secured logistics	$	26,002,159	$	27,905,474
Information security		595,899		670,444
Robotics AI solutions		24,049,052		6,354,853
General security solutions		4,487,173		-
Corporate and others		13,675,583		6,821,466
	$	68,809,866	$	41,752,237
25.	COMMITMENTS AND CONTINGENCIES
---	---

Executives/directors agreements

The Company has several employment agreements with executives and directors with the latest expiring in 2026. All agreements provide for automatic renewal options with varying terms of one year or three years unless terminated by either party. Future payments for employment agreements as of June 30, 2022, are as follows:

	Amount
Twelve months ending June 30:
2023	$	1,250,035
2024		838,984
2025		820,002
2026		136,667
Total minimum payment required	$	3,045,688

F-30

Contracted expenditure commitments

---

The Company’s contracted expenditures commitments as of June 30, 2022 but not provided in the consolidated financial statements are as follows:

		Payments Due by Period
				Less than		1-3		4-5		More<br> than
Contractual Obligations	Nature	Total		1 year		years		years		5 years
Service fee commitments	(a)	$	396,320	$	339,703	$	56,617	$	-	$	-
Operating lease commitments	(b)		2,958,414		2,096,585		834,442		27,387		-
Purchase commitments	(c)		3,106,786		3,106,786		-		-		-
		$	6,461,520	$	5,543,074	$	891,059	$	27,387	$	-
(a)	The Company has engaged Stander Information Company Limited (“Stander”)<br>to provide technical services relating to the cash management systems for the Company’s secure logistics business. The service agreement<br>with Stander comprised of a monthly fixed service fee and certain other fees as specified in the agreement, which will expire in August<br>2023.
---	---
(b)	From time to time, the Company entered into various short-term lease<br> agreements to rent warehouses and offices. In addition, the Company has various low value items with various lease terms<br> that the Company is committed to pay in the future.
---	---
(c)	AI Hong Kong entered into various purchase agreements with Shenzhen Intelligent Guardforce Robot<br> Technology Co., Limited and Shenzhen Kewei Robot Technology Co., Ltd. to establish mutual contractual obligations for future purchases<br> of robots.
---	---

Bank guarantees

---

As of June 30, 2022, the Company had commitments with banks for bank guarantees in favor of government agencies and others of approximately $5,000,000.

Litigation

---

As of the date of filing, the Company is a defendant in various labor related lawsuits totaling approximately $432,000. Management believes these cases are without merit and is confident that the Appeals Court will make the decision according to the consideration of the Court of First Instance and order the dismissal of such lawsuits. Therefore, no provision has been made for these liabilities in the financial statements.

26.	SUBSEQUENT EVENTS

Numerous subsequent events disclosures are being made elsewhere in this interim condensed consolidated financial statements. Subsequent events have been reviewed through the date the unaudited interim condensed consolidated financial statements were issued and required no adjustments or disclosures.

F-31

Exhibit 99.4

OPERATING AND FINANCIAL REVIEW AND PROSPECTS

---

IN CONNECTION WITH THE INTERIM CONDENSEDCONSOLIDATED FINANCIAL STATEMENTS FOR THE

SIX MONTHS ENDED JUNE 30, 2022

---

In this report, as used herein, and unless the context suggests otherwise, the terms “GFAI,” “Company,” “we,” “us” or “ours” refer to the combined business of Guardforce AI Co., Limited, its subsidiaries and other consolidated entities. References to “dollar” and “$” are to U.S. dollars, the lawful currency of the United States. References to “THB” are to the legal currency of Thailand. References to “RMB” are to the legal currency of the People’s Republic of China. References to “SEC” are to the Securities and Exchange Commission.

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our unaudited consolidated financial statements and the related notes included elsewhere in this Report on Form 6-K and with the discussion and analysis of our financial condition and results of operations contained in our Annual Report on Form 20-F for the fiscal year ended December 31, 2021 filed with the Securities and Exchange Commission on April 1, 2022 (the “2021 Form 20- F”). This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those identified elsewhere in this report on Form 6-K, and those listed in the 2021 Form 20-F under “Item 3. Key Information-D. Risk Factors” or in other parts of the 2021 Form 20-F.

---

Overview

Our businesses are categorized into four main units:

[i] Secure Logistics Business;

[ii] Information Security Business;

[iii] Robotics AI Solution Business; and

[iv] General security Business.

Secure Logistics Business

We conduct business mainly through Guardforce Cash Solutions Security Thailand Co., Limited, or GF Cash (CIT), our subsidiary, which provides secured logistics solutions in Thailand. This includes the following services:

(i) Cash-In-Transit – Non-Dedicated Vehicle (Non-DV):

CIT (Non-DV) includes the secure transportation of cash and other valuables between commercial banks and the Bank of Thailand, Thailand’s central bank. CIT (Non-DV) also includes the transportation of coins between the commercial banks, the Thai Royal Mints and the Bank of Thailand. As such, the main customers for this service are the local commercial banks. Charges to the customers are dependent on the value of the consignment; condition of the cash being collected (for example, seal bag collection, piece count collection, bulk count collection, or loose cash collection); and the volume of the transaction. Vehicles used for the delivery of this service are not dedicated to the specific customers.

(ii) Cash-In-Transit – Dedicated Vehicle (DV):

CIT (DV) includes the secure transportation of cash and other valuables between commercial banks. As part of this service, dedicated vehicles are assigned specifically to the contracted customer for their dedicated use between the contracted designated bank branches. As this is a dedicated vehicle service, customers will submit direct schedules to our CIT teams for the daily operational arrangements and planning. Charges to the customers are on a per vehicle per month basis.

(iii) ATM Management Services:

ATM management includes cash replenishment services and first and second line of maintenance services for the ATM machines. First line of maintenance services (FLM) includes rectification of issues related to jammed notes, dispenser failures and transaction record print-out issues. Second line of maintenance services (SLM) includes all other issues that cannot be rectified under the FLM. SLM includes, for example, complete machine failure, and damage to hardware and software.

(iv) Cash Processing (CPC):

Cash processing (CPC) services include counting, sorting, counterfeit detection and vaulting services. We provide these services to commercial banks in Thailand.

(v) Cash Center Operations (CCT):

Cash Center Operations (CCT) is an outsourced cash center management service. We operate the cash center on behalf of the customer, which includes note counting, sorting, storage, inventory management and secured transportation of the notes and coins to the various commercial banks in Thailand.

(vi) Cheque Center Service (CDC):

Cheque Center Service (CDC) includes secured cheque pickup and delivery service.

(vii) Express Cash:

The express cash service is an expansion of our Guardforce Digital Machine, or GDM, solution. We work with commercial banks to have a mobile GDM installed in our CIT vehicles to collect cash from retail customers at the retailers’ sites. The cash is immediately processed inside the CIT vehicle and the cash counting results are immediately transmitted to GF Cash (CIT) headquarters and to a commercial bank. The bank will then credit the counted amount to its customers’ bank accounts. We launched the Express Cash service in 2019.

(viii) Coin Processing Service:

The Coin Processing Service includes the secure collection of coins from retail businesses and banks. The coins are stored and then delivered to the Royal Thai Mint, a sub-division of the Thai Treasury Department, Ministry of Finance. We deploy manpower to work at the Royal Thai Mint as cashier services. Additionally, we use our existing vehicle fleet to deliver coins from the Royal Thai Mint to bank branches, and vice versa.

(ix) Cash Deposit Management Solutions:

Cash Deposit Management Solutions are currently delivered by our Guardforce Digital Machine solution. Our GDM product is deployed at customer sites to provide secured retail cash deposit services. Customers use our GDM product to deposit daily cash receipts. We then collect the daily receipts from our GDM in accordance with agreed schedules. All cash receipts are then securely collected and delivered to our cash processing center for further handling and processing.

Information Security Business

We acquired a majority stake in Handshake Networking (Handshake) on March 25, 2021, in furtherance of our strategy to diversify into information security as part of our portfolio of services. The purpose of this acquisition was to provide us with the experience, expertise and creditability to capitalize on the growing information security market.

The services offered under our Information Security business include:

●	External<br>and Internal Penetration Testing;
●	Wireless Network Testing;
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●	Web Application Testing;
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●	Hospitality Services Testing;
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●	Consulting Services, Training;
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2

●	PCI Services; and
●	Forensic Services.
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Robotics AI Solution Business

Our Robotics Solutions business was established in 2020 as part of our revenue diversification efforts. We do not manufacture the robots, but we operate on a Robots as a Service (RaaS) business model and purchase the robots from equipment manufacturers. We integrate various value add applications into the robots for leasing to generate recurring revenue. As part of our market penetration strategy, we have adopted a mass adoption strategy by providing the robots on a trial basis with an option to purchase or rent.

On March 22, 2022, we acquired 100% of the equity interests in Shenzhen GFAI and Guangzhou GFAI in Greater Bay Area of China. This acquisition is expected to serve an integral role in the growth of Guardforce AI’s robotics as a service (RaaS) business initiative.

General Security Business

On June 22, 2022, we acquired 100% of the equity interests in Beijing Wanjia Security System Co. Ltd (“Beijing Wanjia”) in the PRC. Beijing Wanjia is an integrated alarm security solution provider with over 25 years experience and a well-established customer base among retail businesses. The acquisition of a well-established integrated security solution provider in Beijing is truly transformative as it not only strengthens our foothold in Asia, but also expands our integrated security capabilities.

The business environment in which we operate can change quickly. We must quickly adapt to changes in the competitive landscape and local market conditions. To be successful, we must be able to balance, on a market-by market basis, the effects of changing demand on the utilization of our resources. We operate on a centralized basis but allow enough flexibility so local field management can adjust operations to the particular circumstances of their markets.

We measure financial performance on a long-term basis. We create value by focusing on yielding solid returns on capital, growing our revenues and earnings, and generating cash flows sufficient to fund our growth.

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Results of Operations

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The following table sets forth a summary of our unaudited interim condensed consolidated results of operations and the amounts as a percentage of total revenues for the periods indicated. This information should be read together with our unaudited interim condensed consolidated financial statements and related notes included elsewhere in this prospectus. Our historical results presented below are not necessarily indicative of the results that may be expected for any future period.

	For the six months ended June 30,
	2022					2021
			% of<br> Revenue					% of<br> Revenue
Revenue				100.0	%				100.0	%
Cost of sales		)		(88.5	)%		)		(88.2	)%
Gross profit				11.5	%				11.8	%
Provision for and write off of withholding tax receivables		)		(1.6	)%		)		(0.5	)%
Stock based compensation		)		(1.5	)%				-
Selling, distribution and administrative expenses		)		(41.1	)%		)		(17.8	)%
Operating loss		)		(32.8	)%		)		(6.5	)%
Other income, net				0.3	%				1.3	%
Foreign exchange losses, net		)		(4.4	)%		)		0.2	)%
Finance costs		)		(2.4	)%		)		(2.4	)%
Loss before income tax		)		(39.3	)%		)		(7.8	)%
Provision for income tax benefit				1.9	%				-	%
Net loss for the period		)		(37.4	)%		)		(7.8	)%
Net loss attributable to:
Equity holders of the Company		)					)
Non-controlling interests							)
		)					)

All values are in US Dollars.

3

Comparison of six months ended June 30,2022 and 2021

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Revenue

For the six months ended June 30, 2022, our revenue was $16,942,522, a decrease of $1,462,503, or 7.9%, compared to $18,405,025 for the six months ended June 30, 2021. The continuous spread of COVID-19 in 2022 led to the decrease in our revenue from our major secured logistics segment. The frequency of services delivered for our CIT and ATM management services business was affected as certain customers’ facilities were closed to curtail the spread of the coronavirus, especially during February 2022 to May 2022. In addition, as a result of two of our major bank customers, Thanachart Bank Public Company had merged with TMB Bank Public Company in June 2021 to become TTB Bank Public Company, our number of service activities were reduced compared to the six months ended June 30, 2021. Although there was a drop in revenue for CIT related business, we benefited from an increase and stronger demand for our Robotics AI Solutions business by our customers. For the six months ended June 30, 2022, the revenue contribution from our Robotics AI Solutions has experienced continuous increase in the past years and it increased by $515,169 or 252.7%, which represents approximately 4.2% of our total revenue as compared to 1.1% for the six months ended June 30, 2022.

Cost of sales and gross profit

Cost of sales:

Cost of revenue consists primarily of internal labor cost and related benefits, and other overhead costs that are directly attributable to services provided.

For the six months ended June 30, 2022, our cost of revenue was $14,998,727, a decrease of $1,347,736, or 8.2%, compared to $16,346,463 for the six months ended June 30, 2021. Cost of revenue as a percentage of our revenues slightly decreased from 88.8% for the six months ended June 30, 2021 to 88.5% for the six months ended June 30, 2022. This decrease was in line with the decrease in revenue. Despite the increase in fuel consumption costs in the past years by approximately 34.3% from THB25.76 ($0.7) average per liter as of June 2021 to THB34.60 ($1.0) average per liter as of June 2022, we continue our effective cost savings measures to control our direct labor and overhead cost which offset the impact on the increase fuel price.

Gross profit:

As a percentage of revenue, our gross margin slightly increased from 11.2% for the six months ended June 30, 2021 to 11.5% for the six months ended June 30, 2022, primarily due to the cost control.

Selling, distribution and administrative expenses

The Company’s total selling, distribution and administrative expenses are comprised of the following:

●	Selling and distribution expenses are mainly comprised of compensation and benefits for our sales and marketing personnel, travel and entertainment expenses, exhibitions, advertising and marketing promotion expenses, depreciation of motor vehicles, rental expenses, utility expenses and transportation charges.
●	Administrative expenses are mainly comprised of compensation and related expenses for our management and administrative personnel, depreciation of leasehold improvements, robots and motor vehicles and rental expenses of our offices in different countries.
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For the six months ended June 30, 2022, our total selling, distribution and administrative expenses were $6,977,996, an increase of $3,706,388, or 113.3%, compared to $3,271,608 for the six months ended June 30, 2021. The net increase was mainly due to:

●	Increase in headquarter expenses, including staff expenses, directors’ emoluments, sales and marketing and for general corporate purposes and legal and professional fees in connection with the private placements and acquisition of subsidiaries; and

4

●	Increase in robotics business expenses including staff expenses, rental expenses and marketing expenses to further our robotics as a service business and related technology capabilities. During the six months ended June 30, 2022, we acquired four robotics related subsidiaries and incorporated twelve robotics related entities around the globe.

Although we maintain our cost reduction measures, we expect our administrative expenses will increase over time as we continue to expand our business. Our selling expenses are expected to increase as we continue to expand our business and promote our Guardforce brand. Our administrative expenses are expected to increase, reflecting the hiring of additional personnel and other costs related to the anticipated growth of our business, as well as the higher costs of operating as a public company.

Other income

Other income is comprised mainly of miscellaneous income, interest income and gain (loss) from disposal of fixed assets.

For the six months ended June 30, 2022, other income was $46,859, a decrease of $190,319 or 80.2%, as compared to $237,178 for the six months ended June 30, 2021. The decrease was mainly due to amount due to a related party of $224,766 was forgiven in May 2021, no such event incurred during the six months ended June 30, 2022.

Finance costs

Finance costs are comprised of finance charges for leases, interest expense on interest-bearing bank borrowings and related party borrowings utilized for working capital purposes.

Income tax expense

For the six months ended June 30, 2022, our income tax benefit was $320,183, as compared to $nil for the six months ended June 30, 2021. We are subject to various rates of income tax under different jurisdictions. Income tax benefit and deferred tax assets were recognized for the six months ended June 30, 2022 as there was tax loss reported in 2022.

Net loss

For the six months ended June 30, 2022, our net loss was $6,339,214, an increase of $4,784,031, as compared to net loss $1,555,183 for the six months ended June 30, 2021. This was mainly due to lower revenue and an increase in selling, distribution and administrative.

Although we incurred a significant net loss for the year ended December 31, 2021, we expect to see a positive trend in our future results.

Net loss (profit) attributable to non-controlling Interests:

For the six months ended June 30, 2022 and 2021, net loss (profits) attributable to non-controlling interests were $32,392 and $(91) respectively.

Net loss attributable to equity holders of the Company:

For the six months ended June 30, 2022 and 2021, our net loss attributable to equity holders of the Company were $6,306,822 and $1,555,274, respectively.

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Inflation.

Inflation is not expected to materially affect our business or the results of our operations.

5

Foreign Currency Fluctuations.

Our activities expose it to a variety of financial risks: foreign exchange risk, interest rate risk and liquidity risk. Our overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on our financial performance.

Critical Accounting Policies.

IFRS 15 Revenue from Contracts with Customers supersedes IAS 11 Construction Contracts, IAS 18 Revenue and related Interpretations and it applies, with limited exceptions, to all revenue arising from contracts with customers. IFRS 15 establishes a five-step model to account for revenue arising from contracts with customers and requires that revenue be recognized at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring services or goods to a customer. IFRS 15 requires entities to exercise judgment, taking into consideration all of the relevant facts and circumstances when applying each step of the model to contracts with our customers. The standard also specifies the accounting for the incremental costs of obtaining a contract and the costs directly related to fulfilling a contract. In addition, the standard requires extensive disclosures.

IFRS 9 Financial Instruments replaces IAS 39 Financial Instruments: Recognition and Measurement for annual periods beginning on or after January 1, 2018, bringing together all three aspects of the accounting for financial instruments: classification and measurement; impairment: and hedge accounting.

The IASB issued a new standard IFRS 16 for leases. This standard replaced IAS 17. The main impact on lessees is that almost all leases are reflected on the balance sheet. This is because the balance sheet distinction between operating and finance leases is removed for lessees. Instead, under the new standard an asset (the right to use the leased item) and a financial liability to pay rentals are recognized. The only exemptions are short-term and low-value leases. The Company has adopted IFRS 16 from January 1, 2019 and has not restated comparatives for the prior reporting periods, as permitted under the specific transitional provisions in the standard. The reclassifications and the adjustments arising from the new leasing rules are therefore recognized in the opening consolidated balance sheet on January 1, 2019.

Non-IFRS Financial Measures

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To supplement our unaudited interim condensed consolidated financial statements, which are prepared and presented in accordance with IFRS, we use the non-IFRS adjusted EBITDA as financial measures for our consolidated results.

We believe that adjusted EBITDA helps identify underlying trends in our business that could otherwise be distorted by the effect of certain income or expenses that we include in income (loss) from operations and net income (loss). We believe that these non-IFRS measures provide useful information about our core operating results, enhance the overall understanding of our past performance and future prospects and allow for greater visibility with respect to key metrics used by our management in its financial and operational decision-making. We present the non-IFRS financial measures in order to provide more information and greater transparency to investors about our operating results.

EBITDArepresents net (loss) income before (i) finance costs, income tax benefit and depreciation of fixed assets and amortization of intangible assets, which we do not believe are reflective of our core operating performance during the periods presented.

Non-IFRS adjusted net (loss) incomerepresents net (loss) income before (i) finance costs, income tax benefit and depreciation of fixed assets and amortization of intangible assets, (ii) certain non-cash expenses, consisting of stock-based compensation expense and allowance for and write off of withholding tax receivables.

Non-IFRS (loss) earnings per sharerepresents non-IFRS net (loss) income attributable to ordinary shareholders divided by the weighted average number of shares outstanding during the periods. Non-IFRS diluted (loss) earnings per sharerepresents non-IFRS net (loss) income attributable to ordinary shareholders divided by the weighted average number of shares outstanding during the periods on a diluted basis.

6

The table below is a reconciliation of our net income to EBITDA and non-IFRS net income for the periods indicated:

	For the six months ended <br> June 30,
	2022			2021
Net loss - IFRS	$	(6,339,214	)	$	(1,555,183	)
Finance costs		410,861			440,952
Income tax benefit		(320,183	)		-
Depreciation and amortization expense		2,697,378			2,542,432
EBITDA		(3,551,158	)		1,428,201
Allowance for and write off of withholding tax receivables		263,340			98,226
Stock-based compensation expenses		252,095			-
Adjusted net (loss) income (Non-IFRS)	$	(3,035,723	)	$	1,526,427
Non-IFRS (loss) earnings per share
Earnings per share attributable to equity holders of the Company
Basic and diluted	$	(0.09	)	$	0.09
Weighted average number of shares used in computation:
Basic and diluted		35,235,992			17,486,264

Liquidity and Capital Resources

Our principal sources of liquidity and capital resources have been, and are expected to continue to be, cash flow from operations and bank borrowings. Our principal uses of cash have been, and we expect will continue to be, for working capital to support a reasonable increase in our scale of operations as well as for business expansion investments.

As of June 30, 2022 and 2021, we had cash and cash equivalents and restricted cash of approximately $9.5 million and $9.4 million, respectively.

The following table summarizes the key cash flow components from our unaudited interim condensed consolidated statements of cash flows for the periods indicated.

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	For the six months ended <br> June 30,
	2022			2021
Net cash (used in) generated from operating activities	$	(13,827,792	)	$	2,042,948
Net cash used in investing activities		(9,341,708	)		(2,224,467	)
Net cash generated from (used in) financing activities		17,375,453			(1,653
Effect of exchange rate changes on cash		(519,523	)		(554,528	)
Net decrease in cash and cash equivalents, and restricted cash		(6,313,570	)		(737,700	)
Cash and cash equivalents, and restricted cash at January 1,		15,853,811			10,129,910
Cash and cash equivalents, and restricted cash at June 30,	$	9,540,241		$	9,392,210

Operating Activities

---

Net cash used in operating activities was $13,827,792 for the six months ended June 30, 2022. The difference between our net loss of $6,339,214 and net cash used in operating activities was mainly due to (i) depreciation and amortization of $2,697,378 comprised of depreciation of fixed assets, depreciation of right-of-use assets and amortization of intangible assets mainly acquired through the business combinations; (ii) interest expense of $506,818 for the bank loans and loans from related parties and finance costs related to the finance lease and operating lease liabilities; and (iii) the decrease in other operating assets and liabilities of $10,969,399 which was generally due to the increase in amount due from/to related parties of $6,111,443 including an amount due from a related party in connection with the prepayment of $5,908,930 for the purchase of robots and the increase in the inventories of $5,521,429 that during the six months ended June 30, 2022, we purchased robots from a related party totaled amounting to $7,008,322.

7

Investing Activities

Net cash used in from investing activities was $9,341,708 for the six months ended June 30, 2022, which was mainly due to (i) the purchase of intangible assets of $3,082,880 including the $3,000,000 paid to a related party for the development of the GFAI Intelligent Cloud Platform V2.0 (“ICP”) to help better manage the remotely deployed robots and to facilitate the development of additional features and applications.; (ii) purchase of property and equipment of $2,309,334; (iii) payment for the acquisitions of subsidiaries of $1,840,000; and (iv) deposits paid for business acquisitions of $2,160,000 which the acquisitions were terminated in September 2022 and this deposit will be fully refunded.

Financing Activities

Net cash generated from financing activities was $17,375,453 for the six months ended June 30, 2022, which was mainly attributable to the two private placements we completed. On January 20, 2022, we completed a private placement, wherein a total of 7,919,997 ordinary shares, with each investor also receiving a warrant for aggregate gross proceeds of approximately $10.3 million. On April 6, 2022, we completed another private placement to sell a total of 8,739,351 ordinary shares for aggregate gross proceeds of approximately $10.0 million.

The cash generated was offset with (i) repayment of borrowings of $840,762; and (ii) lease payments and interest paid of $1,483,203.

Research and Development, Patents and Licenses,Etc.

The Company has no research and development plans at present and there is no intellectual property owned by the Company at this moment.

Trend Information

Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demand, commitments or events that are reasonably likely to have a material effect on our net revenues and income from operations, profitability, liquidity, capital resources, or would cause reported financial information not to be indicative of future operation results or financial condition.

Off-Balance Sheet Arrangements

We do not have off balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial position, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that are material.

Tabular Disclosure of Contractual Obligations

Executives/directors agreements

The Company has several employment agreements with executives and directors with the latest expiring in 2026. All agreements provide for automatic renewal options with varying terms of one year or three years unless terminated by either party. Future payments for employment agreements as of June 30, 2022, are as follows:

Twelve months ending June 30:	Amount
2023	$	1,250,035
2024		838,984
2025		820,002
2026		136,667
Total minimum payment required	$	3,045,688

8

Contracted expenditure commitments

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The Company’s contracted expenditures commitments as of June 30, 2022 but not provided in the consolidated financial statements are as follows:

			Payments Due by Period
					Less than		1-3		4-5		More than
Contractual Obligations	Nature		Total		1 year		years		years		5 years
Service fee commitments		(a)	$	396,320	$	339,703	$	56,617		-	$	-
Operating lease commitments		(b)		2,958,414		2,096,585		834,442		27,387		-
Purchase commitments		(c)		3,106,786		3,106,786		-		-
				6,461,520	$	5,543,074	$	891,059		27,387		-
(a)	The Company<br> has engaged Stander Information Company Limited (“Stander”) to provide technical services relating to the cash management<br> systems for the Company’s secure logistics business. The service agreement with Stander comprised of a monthly fixed service fee<br> and certain other fees as specified in the agreement, which will be expired in August 2023.
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(b)	From time to time, the Company entered into various<br> short-term lease agreements to rent warehouses and offices. In addition, the Company has various low value items with various lease terms<br> that the Company is committed to pay in the future.
(c)	AI Hong Kong entered into various purchase agreements<br> with Shenzhen Intelligent Guardforce Robot Technology Co., Limited and Shenzhen Kewei Robot Technology Co., Ltd. to establish mutual contractual<br> obligations for future purchases of robots.

9

Exhibit 99.5

Guardforce AI Reports Interim Resultsfor the Fiscal Year 2022 and Provides Business Update

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Robotics AI revenue increases 253% over thesame period last year

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NEW YORK, NY / September 30, 2022 / GuardforceAI Co., Limited (“Guardforce AI” or the “Company”) (NASDAQ:GFAI, GFAIW), an integrated security solutions provider, today provided a business update and announced interim financial results for the six months ended June 30, 2022 (“1H 2022”).

Olivia Wang, Chairwoman and Chief Executive Officer of Guardforce AI, stated, “In the first half of 2022 we made significant progress transforming Guardforce AI into an integrated AI and robotics business, complementing our well-established secured logistics business. Due to the impact of COVID-19 and the shutdown of certain customers’ facilities in the secured logistics business segment, we experienced a slight decrease in revenue less than 10%. However, even though the robotic AI segment revenue counts for approximately 4% of the total revenue, it has grown by 253% and increased nearly four-fold as a percentage of our total revenue compared to the six months ended June 30, 2021.”

“Despite the impact of the COVID-19 pandemic, we continue to expand and grow our global presence and our Robot-as-a-Service (RaaS) business. We are now operating in 8 countries including China, Singapore, Malaysia, Thailand, Japan, Australia, UAE, and the United States.”

“We are also excited about the development progress we made on the Guardforce AI Intelligent Cloud Platform (GFAI ICP). In the first half of 2022, we successfully set up three main hubs for the GFAI ICP in Mainland China, the United States, and Hong Kong, each of which has the ability to manage well over 10,000 robots. At the end of June 30, 2022, approximately 6,000 robots were managed through the GFAI ICP across the globe. We are currently piloting value-added services such as robotics-based advertising in Thailand and Macau through the GFAI ICP with the deployed robots that are on a trial and rental basis. As we increase the number of robots deployed worldwide, we will work with our partners to expand and add value-added services to our platform, such as hotel self-check-in/out, restaurant waitlist management, and food delivery services.”

“On the acquisition front, we continue to strengthen our presence in the Asia Pacific region, as we expanded into mainland China, one of the largest and fastest-growing markets for robotics and security solutions. We completed three target acquisitions in China, providing us immediate access to thousands of valuable clients. Towards that end, we recently announced that we are acquiring Shenzhen Kewei Robot Technology Company Limited (“Kewei”), a high-tech robotics company specializing in developing robotics software solutions and robotics management platforms, as well as robotics sales and technical services. This acquisition will provide new RaaS capabilities, add over a dozen key robotics-related patents and expand our global Fortune 500 customer base. Kewei’s RaaS platform currently operates more than 65,000 robots that belong to Kewei, clients, and partners, of which more than 40,000 are equipped with screens for advertising and interactive features. Our goal is to capture a significant share of the rapidly growing, multi-billion-dollar RaaS market.”

“Overall, we are highly encouraged by the outlook for the business and expect to resume strong organic revenue growth company-wide as pandemic-related restrictions begin to ease. We believe the recent realignment of our management team is timely, given the success and increased focus on our RaaS business line, which positions us to become a dominant player in this rapidly emerging market. Moreover, we have built a highly scalable business model that we believe will drive significant value for shareholders as we continue to execute on our business model.”

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Financial Overview

Net revenue decreased by $1.46 million or 7.9%, to $16.9 million for 1H 2022, compared to $18.4 million for 1H 2021. This decrease was primarily due to COVID-19 and the shutdown of certain customer facilities to curtail the spread of the coronavirus, especially during February 2022 to May 2022. Gross profit decreased slightly to $1.9 million for the first half of 2022 compared to $2.1 million for the same period last year, and gross margin increased from 11.2% for the six months ended June 30, 2021 to 11.5% for the six months ended June 30, 2022, primarily due to cost control initiatives. For the six months ended June 30, 2022, total selling, distribution, and administrative (SD&A) expenses were $7.0 million an increase of $3.7 million, or 113.3%, compared to $3.3 million for the six months ended June 30, 2021. The net increase was mainly due to an increase in headquarter expenses, including staff expenses, directors’ salaries, sales and marketing and for general corporate purposes and legal and professional fees in connection with the private placements and acquisition of subsidiaries as well as the higher costs of operating as a public company and an increase in robotics business expenses including staff expenses, rental expenses and marketing expenses to further the RaaS business and related technology capabilities. Operating loss was $5.5 million for 1H 2022, compared to $1.3 million for 1H 2021. The primary reason for the increase in operating loss was an increase in SD&A. Net loss was $6.3 million or $0.18 per basic and diluted share for 1H 2022, compared to $1.5 million or $0.09 per basic and diluted share for 1H 2021. This was mainly due to lower revenue and an increase in SD&A. As of June 30, 2022, and December 31, 2021, the Company had approximately $9.5 million and $14.3 million cash and cash equivalents and restricted cash, respectively.

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About Guardforce AI Co., Ltd.

Guardforce AI Co., Ltd. (NASDAQ:GFAI, GFAIW) is a global integrated security solutions provider that is focused on developing robotic solutions and information security services that complement its well-established secured logistics business. With more than 40 years of professional experience, Guardforce AI is a trusted brand name that protects and transports high-value assets belonging to public and private sector organizations. Guardforce AI develops and provides innovative technologies and services that enhance safety and protection. For more information, visit www.guardforceai.com.

Safe Harbor Statement

This press release contains statements thatdo not relate to historical facts but are “forward-looking statements” within the meaning of the safe harbor provisions of theU.S. Private Securities Litigation Reform Act of 1995. These statements can generally (although not always) be identified by their useof terms and phrases such as anticipate, appear, believe, continue, could, estimate, expect, indicate, intend, may, plan, possible, predict,project, pursue, will, would and other similar terms and phrases, as well as the use of the future tense. Forward-looking statements areneither historical facts nor assurances of future performance. Instead, they are based only on current beliefs, expectations and assumptionsregarding the future of the business of the Company, future plans and strategies, projections, anticipated events and trends, the economyand other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risksand changes in circumstances that are difficult to predict and many of which are outside of our control, including the risks describedin our registration statements and reports under the heading “Risk Factors” as filed with the Securities and Exchange Commission.Actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you shouldnot rely on any of these forward-looking statements. Forward-looking statements in this press release speak only as of the date hereof.Unless otherwise required by law, we undertake no obligation to publicly update or revise these forward-looking statements, whether becauseof new information, future events or otherwise.

Investor Relations:

David Waldman or Natalya Rudman

Crescendo Communications, LLC

Email: gfai@crescendo-ir.com

Tel: 212-671-1020

Guardforce AI Corporate Communications

Hu Yu

Email: yu.hu@guardforceai.com

(tables follow)

2

Guardforce AI Co., Limited and Subsidiaries

Unaudited Interim Condensed Consolidated Statementof Operations

(Expressed in U.S. Dollars)

	For the six months ended<br><br> June 30,
	2022			2021
	(Unaudited)			(Unaudited)
Revenue	$	16,942,522		$	18,405,025
Cost of sales		(14,998,727	)		(16,346,463	)
Gross profit		1,943,795			2,058,562
Provision for and write off of withholding taxes receivable		(263,340	)		(98,226	)
Stock based compensation		(252,095	)		-
Selling, distribution and administrative expenses		(6,977,996	)		(3,271,608	)
Operating loss		(5,549,636	)		(1,311,272	)
Other income, net		46,859			237,178
Foreign exchange losses, net		(745,759	)		(40,137	)
Finance costs		(410,861	)		(440,952	)
Loss before income tax		(6,659,397	)		(1,555,183	)
Provision for income tax benefit		320,183			-
Loss for the period		(6,339,214	)		(1,555,183	)
Less: loss (profit) attributable to non-controlling interests		32,392			(91	)
Loss attributable to equity holders of the Company	$	(6,306,822	)	$	(1,555,274	)
Loss per share attributable to equity holders of the Company
Basic	$	(0.18	)	$	(0.09	)
Diluted	$	(0.18	)	$	(0.09	)
Weighted average number of shares used in computation:
Basic		35,235,992			17,486,264
Diluted		35,235,992			17,486,264

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3

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Guardforce AI Co., Limited and Subsidiaries

Unaudited Interim Condensed Consolidated BalanceSheet

(Expressed in U.S. Dollars)

			As of<br> December 31,<br> 2021
Assets
Current assets:
Cash and cash equivalents	7,728,491		$	12,728,783
Restricted cash	-			1,600,000
Trade receivables	5,464,069			4,939,568
Other receivables	1,016,220			-
Other current assets	2,457,334			1,275,981
Inventories	8,769,701			1,387,549
Amount due from related parties	6,416,362			26,007
Total current assets	31,852,177			21,957,888
Non-current assets:
Restricted cash	1,811,750			1,525,028
Property, plant and equipment	12,219,476			9,897,301
Right-of-use assets	2,133,297			2,364,993
Intangible assets, net	6,249,273			164,316
Goodwill	2,679,445			329,534
Deposits paid for business acquisitions	7,020,000			-
Withholding taxes receivable, net	2,451,616			3,531,953
Deferred tax assets, net	1,910,689			1,635,638
Other non-current assets	482,143			345,586
Total non-current assets	36,957,689			19,794,349
Total assets	68,809,866		$	41,752,237
Liabilities and Equity
Current liabilities:
Trade and other payables	3,650,442		$	1,028,721
Borrowings	1,011,749			933,110
Borrowings from related parties	16,209,546			13,506,184
Current portion of operating lease liabilities	1,423,063			2,366,045
Current portion of finance lease liabilities, net	261,940			619,301
Other current liabilities	1,683,355			1,824,635
Amount due to related parties	5,856,114			2,217,752
Total current liabilities	30,096,209			22,495,748
Non-current liabilities:
Borrowings	518,613			859,120
Operating lease liabilities	741,218			-
Borrowings from related parties	1,927,803			5,332,803
Finance lease liabilities, net	622,062			666,455
Other non-current liabilities	54,000			54,000
Provision for employee benefits	5,470,714			5,819,132
Total non-current liabilities	9,334,410			12,731,510
Total liabilities	39,430,619			35,227,258
Equity
Ordinary shares – par value 0.003 authorized 300,000,000 shares, issued and outstanding 54,879,075 shares at June 30, 2022; par value 0.003 authorized 300,000,000 shares, issued and outstanding 21,201,842 shares at December 31, 2021	164,638			63,606
Subscription receivable	(50,000	)		(50,000	)
Additional paid in capital	44,669,954			15,379,595
Legal reserve	223,500			223,500
Warrants reserve	251,036			251,036
Deficit	(16,511,042	)		(10,204,220	)
Accumulated other comprehensive income	623,618			821,527
Capital & reserves attributable to equity holders of the Company	29,371,704			6,485,044
Non-controlling interests	7,543			39,935
Total equity	29,379,247			6,524,979
Total liabilities and equity	68,809,866		$	41,752,237

All values are in US Dollars.

4

Guardforce AI Co., Limited and Subsidiaries

Unaudited Interim Condensed Consolidated Statementof Cash Flows

(Expressed in U.S. Dollars)

	For the six months ended <br> June 30,
	2022			2021
Cash flows from operating activities	(Unaudited)			(Unaudited)
Loss for the period	$	(6,339,214	)	$	(1,555,183	)
Adjustments for:
Depreciation and Amortization of intangible assets		2,697,378			2,542,432
Stock-based compensation		252,095			-
Finance costs		506,818			341,123
Loss/(Gain) from fixed assets disposal		24,530			(2,189	)
Changes in operating assets and liabilities:
Increase in trade and other receivables		(205,716	)		(673,605	)
Increase in other current assets		(969,004	)		(1,005,395	)
Increase in inventories		(5,521,429	)		(2,105,633	)
(Increase)/Decrease in amount due from/to related parties		(6,111,443	)		2,932,310
Decrease/(Increase) in other non-current assets		901			(98,693	)
Increase in provision for and write off of withholding taxes receivable		263,340			98,226
Increase in deferred tax assets		(325,083	)		-
Increase in Trade and other payables and other current liabilities		1,265,752			900,767
Increase in withholding taxes receivable		663,095			522,688
(Decrease)/Increase in provision for employee benefits		(29,812	)		146,100
Net cash (used in) generated from operating activities		(13,827,792	)		2,042,948
Cash flows from investing activities
Acquisition of property and equipment		(2,309,334	)		(2,251,341	)
Proceeds from sale of property, plant and equipment		4,120			2,598
Acquisition of intangible assets		(3,082,880	)		-
Acquisition of subsidiary, net of cash acquired		(1,793,614	)		24,276
Deposits paid for business acquisitions		(2,160,000	)		-
Net cash used in investing activities		(9,341,708	)		(2,224,467	)
Cash flows from financing activities
Proceeds from issue of shares		18,275,728			-
Proceeds from exercise of warrants		1,423,690
Proceeds from borrowings		-			1,622,855
Repayment of borrowings		(840,762	)		(378,046	)
Payment of lease liabilities		(1,483,203	)		(1,246,462	)
Net cash generated from (used in) financing activities		17,375,453			(1,653	)
Effect of movements in exchange rates on cash held		(519,523	)		(554,528	)
Net decrease in cash and cash equivalents, and restricted cash		(5,794,047	)		(737,700	)
Cash and cash equivalents, and restricted cash at January 1,		15,853,811			10,129,910
Cash and cash equivalents, and restricted cash at June 30,	$	9,540,241		$	9,392,210
Non-cash investing and financing activities
Equity portion of purchase consideration paid for acquisition of subsidiaries		4,579,879			-

5

Non-IFRS Financial Measures

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To supplement our unaudited interim condensed consolidated financial statements, which are prepared and presented in accordance with IFRS, we use the non-IFRS adjusted EBITDA as financial measures for our consolidated results.

We believe that adjusted EBITDA helps identify underlying trends in our business that could otherwise be distorted by the effect of certain income or expenses that we include in income (loss) from operations and net income (loss). We believe that these non-IFRS measures provide useful information about our core operating results, enhance the overall understanding of our past performance and future prospects and allow for greater visibility with respect to key metrics used by our management in its financial and operational decision-making. We present the non-IFRS financial measures in order to provide more information and greater transparency to investors about our operating results.

EBITDArepresents net (loss) income before (i) finance costs, income tax benefit and depreciation of fixed assets and amortization of intangible assets, which we do not believe are reflective of our core operating performance during the periods presented.

Non-IFRS adjusted net (loss) incomerepresents net (loss) income before (i) finance costs, income tax benefit and depreciation of fixed assets and amortization of intangible assets, (ii) certain non-cash expenses, consisting of stock-based compensation expense and allowance for and write off of withholding tax receivables.

Non-IFRS (loss) earnings per sharerepresents non-IFRS net (loss) income attributable to ordinary shareholders divided by the weighted average number of shares outstanding during the periods. Non-IFRS diluted (loss) earnings per sharerepresents non-IFRS net (loss) income attributable to ordinary shareholders divided by the weighted average number of shares outstanding during the periods on a diluted basis.

The table below is a reconciliation of our net income to EBITDA and non-IFRS net income for the periods indicated:

	For the six months ended <br> June 30,
	2022			2021
Net loss - IFRS	$	(6,339,214	)	$	(1,555,183	)
Finance costs		410,861			440,952
Income tax benefit		(320,183	)		-
Depreciation and amortization expense		2,697,378			2,542,432
EBITDA		(3,551,158	)		1,428,201
Allowance for and write off of withholding tax receivables		263,340			98,226
Stock-based compensation expenses		252,095			-
Adjusted net (loss) income (Non-IFRS)	$	(3,035,723	)	$	1,526,427
Non-IFRS (loss) earnings per share
Earnings per share attributable to equity holders of the Company
Basic and diluted	$	(0.09	)	$	0.09
Weighted average number of shares used in computation:
Basic and diluted		35,235,992			17,486,264

6