Published: 2022-09-28 00:00:00 ET

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1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CRITICAL ACCOUNTING ESTIMATES

Basis of Presentation and Preparation

These interim consolidated financial statements have been prepared by management in accordance with United States generally accepted accounting principles (“U.S. GAAP”). They do not include all of the disclosures required by U.S. GAAP for annual financial statements and should be read in conjunction with the audited consolidated financial statements of BlackBerry Limited (the “Company”) for the year ended February 28, 2022 (the “Annual Financial Statements”), which have been prepared in accordance with U.S. GAAP. In the opinion of management, all normal recurring adjustments considered necessary for fair presentation have been included in these interim consolidated financial statements. Operating results for the three and six months ended August 31, 2022 are not necessarily indicative of the results that may be expected for the full year ending February 28, 2023. The consolidated balance sheet at February 28, 2022 was derived from the audited Annual Financial Statements but does not contain all of the footnote disclosures from the Annual Financial Statements.

The preparation of the consolidated financial statements requires management to make estimates and assumptions with respect to the reported amounts of assets, liabilities, revenue and expenses and the disclosure of contingent assets and liabilities. Actual results could differ from these estimates and any such differences may be material to the Company’s consolidated financial statements.

Certain of the comparative figures have been reclassified to conform to the current period’s presentation.

The Company is organized and managed as three reportable operating segments: Cybersecurity, IoT (collectively, “Software & Services”), and Licensing and Other, as further discussed in Note 10.

Significant Accounting Policies and Critical Accounting Estimates

There have been no material changes to the Company’s accounting policies or critical accounting estimates from those described in the Annual Financial Statements.

Accounting Standards Adopted During Fiscal 2023

ASU 2020-06, Debt with Conversion and Other Options

In August 2020, the Financial Standards Accounting Board (“FASB”) issued a new accounting standard on the topic of debt with conversion and other options, accounting standards update (“ASU”) 2020-06. The amendment in this update simplifies the accounting for convertible instruments by reducing the number of accounting models available for convertible debt instruments and convertible preferred stock. This update also amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions and requires the application of the if-converted method for calculating diluted earnings per share. The update also requires entities to provide expanded disclosures about the terms and features of convertible instruments, how the instruments have been reported in the entity’s financial statements, and information about events, conditions, and circumstances that can affect how to assess the amount or timing of an entity’s future cash flows related to those instruments. The guidance is effective for interim and annual periods beginning after December 15, 2021. The Company adopted this guidance in the first quarter of fiscal 2023 and it did not have a material impact on its results of operations, financial position and disclosures as the fair value option accounting model used by the Company is not impacted by this ASU and the Company already utilizes the if-converted method in its calculation of diluted earnings per share relating to the 1.75% Debentures (as defined in Note 5).

ASU 2021-08, Business Combinations

In October 2021, the FASB issued a new accounting standard on the topic of business combinations, accounting for contract assets and contract liabilities from contracts with customers, ASU 2021-08. The amendment in this update improves the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency. This update requires entities to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606, Revenue from Contracts with Customers. The guidance is effective for interim and annual periods beginning after December 15, 2022 and requires entities to prospectively apply business combinations occurring on or after the effective date of the amendments. The Company early adopted this guidance in the first quarter of fiscal 2023, and will apply it prospectively to any business acquisitions subsequent to the date of adoption.

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ASU 2021-10, Government Assistance

In November 2021, the FASB issued a new accounting standard on the topic of government assistance, ASU 2021-10. The standard requires additional disclosures for transactions with a government accounted for by applying a grant or contribution accounting model by analogy, including: (i) information about the nature of the transactions and related accounting policy used to account for the transactions; (ii) the line items on the balance sheet and income statement affected by these transactions including amounts applicable to each line; and (iii) significant terms and conditions of the transactions, including commitments and contingencies. The update also requires entities that omit any of the information because it is legally prohibited from being disclosed to include a statement to that effect. The guidance is effective for annual periods beginning after December 15, 2021. The Company adopted this guidance in the first quarter of fiscal 2023 and does not expect the adoption to have a material impact on its annual disclosures.

Fair Value

The Company defines fair value as 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 measurements for assets and liabilities required to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use in pricing the asset or liability, such as inherent risk, non-performance risk and credit risk. The Company applies the following fair value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value into three levels:

•Level 1 - Unadjusted quoted prices at the measurement date for identical assets or liabilities in active markets.

•Level 2 - Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

•Level 3 - Significant unobservable inputs that are supported by little or no market activity.

The fair value hierarchy also requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

Recurring Fair Value Measurements

The Company’s cash and cash equivalents, accounts receivable, other receivables, accounts payable and accrued liabilities are measured at an amount that approximates their fair values (Level 2 measurement) due to their short maturities.

In determining the fair value of investments held, the Company primarily relies on an independent third-party valuator for the fair valuation of securities. The Company also reviews the inputs used in the valuation process and assesses the pricing of the securities for reasonableness after conducting its own internal collection of quoted prices from brokers. Fair values for all investment categories provided by the independent third-party valuator that are in excess of 0.5% from the fair values determined by the Company are communicated to the independent third-party valuator for consideration of reasonableness. The independent third-party valuator considers the information provided by the Company before determining whether a change in their original pricing is warranted.

The Company’s investments largely consist of debt securities issued by major corporate and banking organizations, the provincial and federal governments of Canada, international government banking organizations and the United States Department of the Treasury and are all investment grade. The Company also holds certain public equity securities obtained through an initial public offering by the issuer of a previously held non-marketable equity investment.

For a description of how the fair value of the 1.75% Debentures (as defined in Note 5) was determined, see the “Convertible debentures” accounting policies in Note 1 to the Annual Financial Statements. The 1.75% Debentures are classified as Level 3.

Non-Recurring Fair Value Measurements

Upon the occurrence of certain events, the Company re-measures the fair value of non-marketable equity investments for which it utilizes the measurement alternative, and long-lived assets, including property, plant and equipment, operating lease ROU assets, intangible assets and goodwill if an impairment or observable price adjustment is recognized in the current period.

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Impairment of Long-Lived Assets

During the second quarter of fiscal 2023, the Company decided to exit and seek subleases for certain leased facilities. The Company recorded a non-cash, pre-tax and after-tax impairment charge of $4 million related to the operating lease right-of-use (“ROU”) assets for those facilities. The impairment was determined by comparing the fair value of the impacted ROU asset to the carrying value of the asset as of the impairment measurement date, as required under ASC Topic 360, Property, Plant, and Equipment, using Level 2 inputs. The fair value of the ROU asset was based on the estimated sublease income for certain facilities taking into consideration the time period it will take to obtain a sublessor, the applicable discount rate and the sublease rate. The Company conducts an evaluation of the related liabilities and expenses and revises its assumptions and estimates as appropriate as new or updated information becomes available.

Non-Marketable Equity Investments Measured Using the Measurement Alternative

Non-marketable equity investments measured using the measurement alternative include investments in privately held companies without readily determinable fair values in which the Company does not own a controlling interest or have significant influence. The estimation of fair value used in the fair value measurements required the use of significant unobservable inputs, and as a result, the fair value measurements were classified as Level 3.

Cash, Cash Equivalents and Investments

The components of cash, cash equivalents and investments by fair value level as at August 31, 2022 were as follows:

			Cost Basis (1)						Unrealized Gains						Unrealized Losses												Fair Value						Cash and Cash Equivalents						Short-term Investments						Long-term Investments						Restricted Cash and Cash Equivalents
Bank balances			$	114					$	—					$	—											$	114					$	112					$	—					$	—					$	2
Other investments			27						2						—												29						—						—						29						—
			141						2						—												143						112						—						29						2
Level 1:
Equity securities			10						—						(10)												—						—						—						—						—
Level 2:
Term deposits and certificates of deposits			35						—						—												35						10						—						—						25
Bearer deposit notes			126						—						—												126						126						—						—						—
Commercial paper			198						—						—												198						83						115						—						—
Non-U.S. promissory notes			79						—						—												79						44						35						—						—
Non-U.S. treasury bills/notes			25						—						—												25						25						—						—						—
Non-U.S. government sponsored enterprise notes			75						—						—												75						13						62						—						—
U.S. treasury bills/notes			18						—						—												18						18						—						—						—
			556						—						—												556						319						212						—						25
			$	707					$	2					$	(10)											$	699					$	431					$	212					$	29					$	27

______________________________

(1) Cost basis for other investments includes the effect of returns of capital and impairment.

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The components of cash, cash equivalents and investments by fair value level as at February 28, 2022 were as follows:

			Cost Basis (1)						Unrealized Gains						Unrealized Losses												Fair Value						Cash and Cash Equivalents						Short-term Investments						Long-term Investments						Restricted Cash and Cash Equivalents
Bank balances			$	105					$	—					$	—											$	105					$	104					$	—					$	—					$	1
Other investments			8						—						—												8						—						—						8						—
			113						—						—												113						104						—						8						1
Level 1:
Equity securities			10						—						(9)												1						—						1						—						—
Level 2:
Term deposits, certificates of deposits, and GICs			157						—						—												157						65						65						—						27
Bankers’ acceptances/bearer deposit notes			58						—						—												58						58						—						—						—
Commercial paper			247						—						—												247						62						185						—						—
Non-U.S. promissory notes			71						—						—												71						46						25						—						—
Non-U.S. government sponsored enterprise notes			58						—						—												58						—						58						—						—
Non-U.S. treasury bills/notes			43						—						—												43						43						—						—						—
			634						—						—												634						274						333						—						27
Level 3:
Other investments			17						5						—												22						—						—						22						—
			$	774					$	5					$	(9)											$	770					$	378					$	334					$	30					$	28

______________________________

(1) Cost basis for other investments includes the effect of returns of capital and impairment.

As at August 31, 2022, the Company had private non-marketable equity investments without readily determinable fair value of $29 million (February 28, 2022 - $30 million). As of August 31, 2022, the Company has recorded a cumulative impairment of $3 million to the carrying value of certain other non-marketable equity investments without readily determinable fair value (February 28, 2022 - $3 million).

There were no realized gains or losses on available-for-sale securities for the three and six months ended August 31, 2022 and August 31, 2021.

The Company has restricted cash and cash equivalents, consisting of cash and securities pledged as collateral to major banking partners in support of the Company’s requirements for letters of credit. These letters of credit support certain leasing arrangements entered into in the ordinary course of business. The letters of credit are for terms ranging from one month to three years. The Company is legally restricted from accessing these funds during the term of the leases for which the letters of credit have been issued; however, the Company can continue to invest the funds and receive investment income thereon.

The following table provides a reconciliation of cash, cash equivalents, restricted cash, and restricted cash equivalents as at August 31, 2022 and February 28, 2022 from the consolidated balance sheets to the consolidated statements of cash flows:

			As at
			August 31, 2022						February 28, 2022
Cash and cash equivalents			$	431					$	378
Restricted cash and cash equivalents			27						28
Total cash, cash equivalents, restricted cash, and restricted cash equivalents presented in the consolidated statements of cash flows			$	458					$	406

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The contractual maturities of available-for-sale investments as at August 31, 2022 and February 28, 2022 were as follows:

			As at
			August 31, 2022																		February 28, 2022
			Cost Basis						Fair Value												Cost Basis						Fair Value
Due in one year or less			$	556					$	556											$	634					$	634
No fixed maturity			10						—												10						1
			$	566					$	556											$	644					$	635

3.    CONSOLIDATED BALANCE SHEET DETAILS

Accounts Receivable, Net of Allowance

The allowance for credit losses as at August 31, 2022 was $4 million (February 28, 2022 - $4 million).

The Company recognizes current estimated credit losses (“CECL”) for accounts receivable. The CECL for accounts receivable are estimated based on days past due and region for each customer in relation to a representative pool of assets consisting of a large number of customers with similar risk characteristics that operate under similar economic environments. The Company determined the CECL by estimating historical credit loss experience based on the past due status and region of the customers, adjusted as appropriate to reflect current conditions and estimates of future economic conditions. When specific customers are identified as no longer sharing the same risk profile as their current pool, they are removed from the pool and evaluated separately. The Company also has long-term accounts receivable included in Other Long-term Assets. The CECL for long-term accounts receivable is estimated using the probability of default method and the default exposure due to limited historical information. The exposure of default is represented by the assets’ amortized carrying amount at the reporting date.

The following table sets forth the activity in the Company’s allowance for credit losses:

			As at
			August 31, 2022
Beginning balance as of February 28, 2021			$	10
Prior period recovery for expected credit losses			(2)
Write-offs charged against the allowance			(4)
Ending balance of the allowance for credit loss as at February 28, 2022			4
Current period recovery for expected credit losses			—
Ending balance of the allowance for credit loss as at August 31, 2022			$	4

The allowance for credit losses as at August 31, 2022 consists of $1 million (February 28, 2022 - $2 million) relating to CECL estimated based on days past due and region and $3 million (February 28, 2022 - $2 million) relating to specific customers that were evaluated separately.

There was no customer that comprised more than 10% of accounts receivable as at August 31, 2022 (February 28, 2022 - no customer comprised more than 10%).

Other Receivables

As at August 31, 2022, other receivables included items such as an intellectual property licensing receivable, among other items, none of which were greater than 5% of the current assets balance.

As at February 28, 2022, other receivables included items such as receivables from the Government of Canada’s Hardest-Hit Business Recovery Program (“HHBRP”) and an intellectual property licensing receivable, among other items, none of which were greater than 5% of the current assets balance.

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Other Current Assets

Other current assets comprised the following:

			As at
			August 31, 2022						February 28, 2022
Intellectual property			$	132					$	118
Other			41						41
			$	173					$	159

On January 29, 2022, the Company entered into a patent sale agreement with Catapult IP Innovations, Inc. (“Catapult”), pursuant to which the Company agreed to sell substantially all of its non-core patent assets to Catapult for a total transaction price of $600 million. Patents that are essential to the Company’s current core business operations are excluded from the transaction. Pursuant to the patent sale agreement, the Company would receive a license back to the patents being sold, which relate primarily to mobile devices, messaging and wireless networking. Completion of the revenue transaction is subject to the satisfaction of closing conditions. Catapult continues to work on securing its required financing; however, the Company is no longer under exclusivity with Catapult and is continuing to explore alternative options in parallel. For the year ended February 28, 2022, the Company had classified $118 million of intellectual property that would be sold under the patent sale agreement with Catapult as other current assets on the Company’s consolidated balance sheets relating to the patent sale agreement. As at August 31, 2022, the Company continues to classify $132 million of intellectual property, which includes the initial $118 million of intellectual property that would be sold under the patent sale agreement with Catapult with additions related to patent maintenance, as other current assets on the Company’s consolidated balance sheets.

Other current assets also included items such as the current portion of deferred commissions and prepaid expenses, among other items, none of which were greater than 5% of the current assets balance in any of the periods presented.

Property, Plant and Equipment, Net

Property, plant and equipment comprised the following:

			As at
			August 31, 2022						February 28, 2022
Cost
BlackBerry operations and other information technology			$	94					$	92
Leasehold improvements and other			18						53
Furniture and fixtures			10						10
Manufacturing, repair and research and development equipment			2						1
			124						156
Accumulated amortization			97						115
Net book value			$	27					$	41

Sale of Property, Plant and Equipment, Net

During the second quarter of fiscal 2023, the Company completed the sale of its corporate aircraft. As a result, the Company recorded proceeds of approximately $17 million and incurred a gain on disposal of approximately $6 million (cost of $29 million, accumulated amortization of $18 million, and a net book value of approximately $11 million).

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Intangible Assets, Net

Intangible assets comprised the following:

			As at August 31, 2022
			Cost						Accumulated Amortization						Net Book Value
Acquired technology			$	1,023					$	802					$	221
Other acquired intangibles			494						302						192
Intellectual property			120						60						60
			$	1,637					$	1,164					$	473

			As at February 28, 2022
			Cost						Accumulated Amortization						Net Book Value
Acquired technology			$	1,023					$	776					$	247
Other acquired intangibles			494						283						211
Intellectual property			117						53						64
			$	1,634					$	1,112					$	522

For the six months ended August 31, 2022, amortization expense related to intangible assets amounted to $50 million (six months ended August 31, 2021 - $89 million).

Total additions to intangible assets for the six months ended August 31, 2022 amounted to $16 million (six months ended August 31, 2021 - $14 million). During the six months ended August 31, 2022, additions to intangible assets primarily consisted of payments for intellectual property relating to patent maintenance, registration and license fees.

Based on the carrying value of the identified intangible assets as at August 31, 2022, and assuming no subsequent impairment of the underlying assets, the annual amortization expense for the remainder of fiscal 2023 and each of the five succeeding years is expected to be as follows: fiscal 2023 - $50 million; fiscal 2024 - $95 million; fiscal 2025 - $90 million; fiscal 2026 - $86 million; fiscal 2027 - $79 million and fiscal 2028 - $44 million.

Goodwill

Changes to the carrying amount of goodwill during the six months ended August 31, 2022 were as follows:

			Carrying Amount
Carrying amount as at February 28, 2021			$	849
Effect of foreign exchange on non-U.S. dollar denominated goodwill			(5)
Carrying amount as at February 28, 2022			844
Effect of foreign exchange on non-U.S. dollar denominated goodwill			(7)
Carrying amount as at August 31, 2022			$	837

In the fourth quarter of fiscal 2022, the Company announced that it had agreed to the sale of a significant amount of patent assets to Catapult subject to the satisfaction of closing conditions. The completion of the sale would accelerate the timing of estimated cash flows for the Intellectual Property reporting unit and, based upon changes in the estimates to future cash flows following the contemplated sale, could potentially result in impacts that would be material to the consolidated financial statements in relation to the recoverability of the carrying value of that reporting unit.

Other Long-term Assets

As at August 31, 2022 and February 28, 2022, other long-term assets included long-term portion of deferred commission and long-term receivables, among other items, none of which were greater than 5% of total assets in any of the periods presented.

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Accrued Liabilities

Accrued liabilities comprised the following:

			As at
			August 31, 2022						February 28, 2022
Accrued settlement (note 9)			$	164					$	—
Accrued royalties			20						20
Operating lease liabilities, current			25						28
Other			91						109
			$	300					$	157

Other accrued liabilities include accrued director fees, accrued vendor liabilities, accrued carrier liabilities, variable incentive accrual and payroll withholding taxes, among other items, none of which were greater than 5% of the current liabilities balance in any of the periods presented.

For the six months ended August 31, 2022, the Company’s net effective income tax expense rate was approximately 4% compared to a net effective income tax expense rate of 2% for the six months ended August 31, 2021. The Company’s income tax rate reflects the change in unrecognized income tax benefit, if any, and the fact that the Company has a significant valuation allowance against its deferred income tax assets, and in particular, the change in fair value of the 1.75% Debentures (as defined in Note 5), amongst other items, is offset by a corresponding adjustment of the valuation allowance. The Company’s net effective income tax rate also reflects the geographic mix of earnings in jurisdictions with different income tax rates.

The Company’s total unrecognized income tax benefits as at August 31, 2022 were $20 million (February 28, 2022 - $20 million). As at August 31, 2022, $20 million of the unrecognized income tax benefits have been netted against deferred income tax assets and nil has been recorded within income taxes payable on the Company’s consolidated balance sheets.

The Company is subject to ongoing examination by tax authorities in certain jurisdictions in which it operates. The Company regularly assesses the status of these examinations and the potential for adverse outcomes to determine the adequacy of the provision for income taxes as well as the provisions for indirect and other taxes and related penalties and interest. While the final resolution of audits is uncertain, the Company believes the ultimate resolution of these audits will not have a material adverse effect on its consolidated financial position, liquidity or results of operations.

On September 1, 2020, Hamblin Watsa Investment Counsel Ltd., in its capacity as investment manager of Fairfax Financial Holdings Limited (“Fairfax”), and another institutional investor invested in the Company through a $365 million private placement of new debentures (the “1.75% Debentures”), which replaced $605 million of debentures issued in a private placement on September 7, 2016 (the “3.75% Debentures”).

Due to the conversion option and other embedded derivatives within the 1.75% Debentures, the Company has elected to record the 1.75% Debentures, including the debt itself and all embedded derivatives, at fair value and present the 1.75% Debentures as a single hybrid financial instrument. No portion of the fair value of the 1.75% Debentures has been recorded as equity, nor would be if the embedded derivatives were bifurcated from the host debt contract.

Each period, the fair value of the 1.75% Debentures is recalculated and resulting gains and losses from the change in fair value of the 1.75% Debentures associated with non-credit components are recognized in income, while the change in fair value associated with credit components is recognized in accumulated other comprehensive loss (“AOCL”). The fair value of the 1.75% Debentures has been determined using the significant Level 2 inputs interest rate curves, the market price and volatility of the Company’s listed common shares, and the significant Level 3 inputs related to credit spread and the implied discount of the 1.75% Debentures at issuance.

The Company originally determined its credit spread by calibrating to observable trades of the 3.75% Debentures and trending the calibrated spread to valuation dates utilizing an appropriate credit index. The Company’s credit spread was determined to be 7.90% as of the issuance date of the 1.75% Debentures and 7.19% as of August 31, 2022. An increase in credit spread will result in a decrease in the fair value of 1.75% Debentures and vice versa. The fair value of the 1.75% Debentures on September 1, 2020 was determined to be approximately $456 million and the implied discount approximately $91 million. The Company determined the implied discount on the 1.75% Debentures by calculating the

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fair value of the 1.75% Debentures on September 1, 2020 utilizing the above credit spread and other inputs described above.

The following table summarizes the change in fair value of the 1.75% Debentures for the six months ended August 31, 2022, which also represents the total changes through earnings of items classified as Level 3 in the fair value hierarchy:

						As at
						August 31, 2022
Balance as at February 28, 2022						$	507
Change in fair value of the 1.75% Debentures						(58)
Balance as at August 31, 2022						$	449

The difference between the fair value of the 1.75% Debentures and the unpaid principal balance of $365 million is $84 million.

The following table shows the impact of the changes in fair value of the 1.75% Debentures for the three and six months ended August 31, 2022 and August 31, 2021:    

						Three Months Ended												Six Months Ended
						August 31, 2022						August 31, 2021						August 31, 2022						August 31, 2021
Income (charge) associated with the change in fair value from non-credit components recorded in the consolidated statements of operations						$	10					$	(67)					$	56					$	(63)
Income associated with the change in fair value from instrument-specific credit components recorded in AOCL						—						—						2						1
Total decrease (increase) in the fair value of the 1.75% Debentures						$	10					$	(67)					$	58					$	(62)

For the three and six months ended August 31, 2022, the Company recorded interest expense related to the 1.75% Debentures of $2 million, and $3 million which has been included in investment loss, net on the Company’s consolidated statements of operations (three and six months ended August 31, 2021 - $2 million and $3 million).

The following details the changes in issued and outstanding common shares for the six months ended August 31, 2022:

			Capital Stock and Additional Paid-in Capital
			Stock Outstanding (000s)						Amount
Common shares outstanding as at February 28, 2022			576,228						$	2,869
Exercise of stock options			57						—
Common shares issued for restricted share unit settlements			673						—
Stock-based compensation			—						15
Common shares issued for employee share purchase plan			458						3
Common shares outstanding as at August 31, 2022			577,416						$	2,887

The Company had 577 million voting common shares outstanding, 1 million options to purchase voting common shares, 15 million RSUs and 1 million DSUs outstanding as at September 23, 2022. In addition, 60.8 million common shares are issuable upon conversion in full of the 1.75% Debentures as described in Note 5.

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The following table sets forth the computation of basic and diluted loss per share:

			Three Months Ended												Six Months Ended
			August 31, 2022						August 31, 2021						August 31, 2022						August 31, 2021
Net loss for basic loss per share available to common shareholders			$	(54)					$	(144)					$	(235)					$	(206)
Less: 1.75% Debentures fair value adjustment (1) (2)			(10)						—						(56)						—
Add: interest expense on 1.75% Debentures (1) (2)			2						—						3						—
Net loss for diluted loss per share available to common shareholders			$	(62)					$	(144)					$	(288)					$	(206)
Weighted average number of shares outstanding (000’s) - basic (3) (4)			577,314						568,082						577,097						567,724
Effect of dilutive securities (000’s)
Conversion of 1.75% Debentures (1) (2)			60,833						—						60,833						—
Weighted average number of shares and assumed conversions (000’s) diluted			638,147						568,082						637,930						567,724
Loss per share - reported
Basic			$	(0.09)					$	(0.25)					$	(0.41)					$	(0.36)
Diluted			$	(0.10)					$	(0.25)					$	(0.45)					$	(0.36)

______________________________

(1) The Company has presented the dilutive effect of the 1.75% Debentures using the if-converted method, assuming conversion at the beginning of the quarter for the three and six months ended August 31, 2022. Accordingly, to calculate diluted loss per share, the Company adjusted net loss by eliminating the fair value adjustment made to the 1.75% Debentures and interest expense incurred on the 1.75% Debentures for the three and six months ended August 31, 2022, and added the number of shares that would have been issued upon conversion to the diluted weighted average number of shares outstanding. See Note 5 for details on the 1.75% Debentures.

(2) The Company has not presented the dilutive effect of the 1.75% Debentures using the if-converted method in the calculation of diluted loss per share for the three and six months ended August 31, 2021, as to do so would be antidilutive. See Note 5 for details on the 1.75% Debentures.

(3) The three and six months ended August 31, 2021, includes approximately 1,421,945 common shares (Exchange Shares) remaining that were subsequently issued on the third anniversary date of the Cylance acquisition completed on February 21, 2019 in consideration for the acquisition.

(4) The Company has not presented the dilutive effect of in-the-money options and RSUs that will be settled upon vesting by the issuance of new common shares in the calculation of diluted loss per share for the three and six months ended August 31, 2022 and August 31, 2021, as to do so would be antidilutive.

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8.    ACCUMULATED OTHER COMPREHENSIVE LOSS

The changes in AOCL by component net of tax, for the three and six months ended August 31, 2022 and August 31, 2021 were as follows:

			Three Months Ended												Six Months Ended
			August 31, 2022						August 31, 2021						August 31, 2022						August 31, 2021
Cash Flow Hedges
Balance, beginning of period			$	1					$	2					$	—					$	1
Other comprehensive loss before reclassification			(2)						(2)						(1)						—
Amounts reclassified from AOCL into net loss			—						—						—						(1)
Accumulated net unrealized gains on derivative instruments designated as cash flow hedges			$	(1)					$	—					$	(1)					$	—
Foreign Currency Cumulative Translation Adjustment
Balance, beginning of period			$	(14)					$	(3)					$	(10)					$	(4)
Other comprehensive loss			(6)						(3)						(10)						(2)
Foreign currency cumulative translation adjustment			$	(20)					$	(6)					$	(20)					$	(6)
Change in Fair Value From Instrument-Specific Credit Risk On 1.75% Debentures
Balance, beginning of period			$	(6)					$	(8)					$	(8)					$	(9)
Other comprehensive income before reclassification			—						—						2						1
Change in fair value from instruments-specific credit risk on 1.75% Debentures			$	(6)					$	(8)					$	(6)					$	(8)
Other Post-Employment Benefit Obligations
Actuarial losses associated with other post-employment benefit obligations			$	(1)					$	(1)					$	(1)					$	(1)
Accumulated Other Comprehensive Loss, End of Period			$	(28)					$	(15)					$	(28)					$	(15)

(a)Letters of Credit

The Company had $26 million in collateralized outstanding letters of credit in support of certain leasing arrangements entered into in the ordinary course of business as of August 31, 2022. See the discussion of restricted cash in Note 2.

(b)Contingencies

Litigation

The Company is involved in litigation in the normal course of its business, both as a defendant and as a plaintiff. The Company is subject to a variety of claims (including claims related to patent infringement, purported class actions and other claims in the normal course of business) and may be subject to additional claims either directly or through indemnities against claims that it provides to certain of its partners and customers. In particular, the industry in which the Company competes has many participants that own, or claim to own, intellectual property, including participants that have been issued patents and may have filed patent applications or may obtain additional patents and proprietary rights for technologies similar to those used by the Company in its products. The Company has received, and may receive in the future, assertions and claims from third parties that the Company’s products infringe on their patents or other intellectual property rights. Litigation has been, and will likely continue to be, necessary to determine the scope, enforceability and validity of third-party proprietary rights or to establish the Company’s proprietary rights. Regardless of whether claims against the Company have merit, those claims could be time-consuming to evaluate and defend, result in costly litigation, divert management’s attention and resources and subject the Company to significant liabilities.

Management reviews all of the relevant facts for each claim and applies judgment in evaluating the likelihood and, if applicable, the amount of any potential loss. Where a potential loss is considered probable and the amount is reasonably

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estimable, provisions for loss are made based on management’s assessment of the likely outcome. Where a range of loss can be reasonably estimated with no best estimate in the range, the Company records the minimum amount in the range. The Company does not provide for claims for which the outcome is not probable or claims for which the amount of the loss cannot be reasonably estimated. Any settlements or awards under such claims are provided for when reasonably determinable.

As of August 31, 2022, with the exception of the U.S. class actions settlement discussed in “Litigation Settlement” below in this Note 9, there are no other material claims outstanding for which the Company has assessed the potential loss as both probable to result and reasonably estimable; therefore, no accrual has been made. Further, there are claims outstanding for which the Company has assessed the potential loss as reasonably possible to result; however, an estimate of the amount of loss cannot reasonably be made. There are many reasons that the Company cannot make these assessments, including, among others, one or more of the following: the early stages of a proceeding does not require the claimant to specifically identify the patent claims that have allegedly been infringed or the products that are alleged to infringe; damages sought are unspecified, unsupportable, unexplained or uncertain; discovery has not been started or is incomplete; the facts that are in dispute are highly complex; the difficulty of assessing novel claims; the parties have not engaged in any meaningful settlement discussions; the possibility that other parties may share in any ultimate liability; and the often slow pace of litigation.

The Company has included the following summaries of certain of its legal proceedings though they do not meet the test for accrual described above.

Between October and December 2013, several purported class action lawsuits and one individual lawsuit were filed against the Company and certain of its former officers in various jurisdictions in the U.S. and Canada alleging that the Company and certain of its officers made materially false and misleading statements regarding the Company’s financial condition and business prospects and that certain of the Company’s financial statements contain material misstatements. The individual lawsuit was voluntarily dismissed and the consolidated U.S. class actions reached an agreement in principle to settle; see “Litigation Settlement” below in this Note 9.

On July 23, 2014, the plaintiff in the putative Ontario class action filed a motion for class certification and for leave to pursue statutory misrepresentation claims. On November 17, 2015, the Ontario Superior Court of Justice issued an order granting the plaintiffs’ motion for leave to file a statutory claim for misrepresentation. On December 2, 2015, the Company filed a notice of motion seeking leave to appeal this ruling. On November 15, 2018, the Court denied the Company’s motion for leave to appeal the order granting the plaintiffs leave to file a statutory claim for misrepresentation. On February 5, 2019, the Court entered an order certifying a class comprised persons (a) who purchased BlackBerry common shares between March 28, 2013, and September 20, 2013, and still held at least some of those shares as of September 20, 2013, and (b) who acquired those shares on a Canadian stock exchange or acquired those shares on any other stock exchange and were a resident of Canada when the shares were acquired. Notice of class certification was published on March 6, 2019. The Company filed its Statement of Defence on April 1, 2019. Discovery is proceeding and the Court has not set a trial date.

On March 17, 2017, a putative employment class action was filed against the Company in the Ontario Superior Court of Justice. The Statement of Claim alleges that actions the Company took when certain of its employees decided to accept offers of employment from Ford Motor Company of Canada amounted to a wrongful termination of the employees’ employment with the Company. The claim seeks (i) an unspecified quantum of statutory, contractual, or common law termination entitlements; (ii) punitive or breach of duty of good faith damages of CAD$20 million, or such other amount as the Court finds appropriate, (iii) pre- and post- judgment interest, (iv) attorneys’ fees and costs, and (v) such other relief as the Court deems just. The Court granted the plaintiffs’ motion to certify the class action on May 27, 2019. The Company commenced a motion for leave to appeal the certification order on June 11, 2019. The Court denied the motion for leave to appeal on September 17, 2019. The Company filed its Statement of Defence on December 19, 2019. Discovery is proceeding and the Court has not set a trial date.

Other contingencies

In the first quarter of fiscal 2019, the Board approved a compensation package for the Company’s Executive Chair and CEO as an incentive to remain as Executive Chair until November 23, 2023. As part of the package, the Company’s Executive Chair and CEO is entitled to receive a contingent performance-based cash award in the amount of $90 million that will become earned and payable should the 10-day average closing price of the Company’s common shares on the New York Stock Exchange reach $30 before November 3, 2023. As the award is triggered by the Company’s share price, it is considered stock-based compensation and accounted for as a share-based liability award. As at August 31, 2022, the liability recorded in association with this award is approximately $1 million (February 28, 2022 - $2 million).

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As at August 31, 2022, the Company has recognized $17 million (February 28, 2022 - $17 million) in funds from claims filed with the Ministry of Innovation, Science and Economic Development Canada relating to its Strategic Innovation Fund program’s investment in BlackBerry QNX. A portion of this amount may be repayable in the future under certain circumstances if certain terms and conditions are not met by the Company, which is not probable at this time.

(c)Litigation Settlement

On March 14, 2014, the four putative U.S. class actions were consolidated in the U.S. District Court for the Southern District of New York, and on May 27, 2014, a consolidated amended class action complaint was filed. On March 13, 2015, the Court issued an order granting the Company’s motion to dismiss. The Court denied the plaintiffs’ motion for reconsideration and for leave to file an amended complaint on November 13, 2015. On August 24, 2016, the U.S. Court of Appeals for the Second Circuit affirmed the District Court order dismissing the complaint, but vacated the order denying leave to amend and remanded to the District Court for further proceedings in connection with the plaintiffs’ request for leave to amend. The Court granted the plaintiffs’ motion for leave to amend on September 13, 2017. On September 29, 2017, the plaintiffs filed a second consolidated amended class action complaint (the “Second Amended Complaint”), which added the Company’s former Chief Legal Officer as a defendant. The Court denied the motion to dismiss the Second Amended Complaint on March 19, 2018. On August 2, 2019, the Magistrate Judge issued a Report and Recommendation that the Court grant the defendants’ motion for judgment on the pleadings dismissing the claims of additional plaintiffs Cho and Ulug. On September 24, 2019, the District Court Judge accepted the Magistrate Judge’s recommendation and dismissed the claims of Cho and Ulug against all defendants. On January 26, 2021, the District Court granted the plaintiffs’ motion for class certification. The class includes “all persons who purchased or otherwise acquired the common stock of BlackBerry Limited on the NASDAQ during the period from March 28, 2013, through and including September 20, 2013”. The class excludes (a) all persons and entities who purchased or otherwise acquired the Company’s common stock between March 28, 2013, and April 10, 2013, and who sold all their Company common stock before April 11, 2013, and (b) the defendants, officers and directors of the Company, members of their immediate families and their legal representatives, heirs, successors, or assigns, and any entity in which any of the Defendants have or had a controlling interest. The Second Circuit Court of Appeals denied the defendants’ petition for review of the class certification order on June 23, 2021. The Second Circuit Court of Appeals affirmed the District Court judgment dismissing Cho and Ulug’s claims on March 11, 2021, and denied Cho and Ulug’s petition for panel rehearing and rehearing en banc on April 28, 2021. On May 5, 2021, the parties participated in a mediation with the Hon. Layn Phillips (ret.), which did not result in an agreement. On September 10, 2021. the Court granted the plaintiffs’ unopposed motion for approval of the class notice plan. Postcard notice was mailed on October 8, 2021; publication notice was issued starting on October 18, 2021. On January 3, 2022, the Court denied defendants’ motion for summary judgment except with respect to seven statements the Court found were barred by the statute of repose. On April 6, 2022, the parties accepted a mediator’s settlement proposal, and reached an agreement in principle to settle the U.S. consolidated actions for $165 million. The Stipulation of Settlement was executed effective June 7, 2022. On June 14, 2022, the Court granted plaintiffs’ motion for preliminary approval of the settlement and scheduled the final approval hearing for September 29, 2022. In the first quarter of fiscal 2023, the Company accrued $165 million associated with this settlement within the line Litigation settlement on the consolidated statement of operations. On June 29, 2022, the Company paid $1 million of the settlement amount. The remaining $164 million was paid on September 6, 2022.

(d)Indemnifications

The Company enters into certain agreements that contain indemnification provisions under which the Company could be subject to costs and damages, including in the event of an infringement claim against the Company or an indemnified third party. Such intellectual property infringement indemnification clauses are generally not subject to any dollar limits and remain in effect for the term of the Company’s agreements. To date, the Company has not encountered material costs as a result of such indemnifications.

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The Company reports segment information based on the “management” approach. The management approach designates the internal reporting used by the Chief Operating Decision Maker (“CODM”) for making decisions and assessing performance as a source of the Company’s reportable operating segments. The CODM, who is the Executive Chair and CEO of the Company, makes decisions and assesses the performance of the Company using three operating segments.

The CODM does not evaluate operating segments using discrete asset information. The Company does not specifically allocate assets to operating segments for internal reporting purposes.

Segment Disclosures

The Company is organized and managed as three operating segments: Cybersecurity, IoT, and Licensing and Other.

The following table shows information by operating segment for the three and six months ended August 31, 2022 and August 31, 2021:

			For the Three Months Ended
			Cybersecurity												IoT												Licensing and Other												Segment Totals
			August 31,																		August 31,																		August 31,																		August 31,
			2022						2021												2022						2021												2022						2021												2022						2021
Segment revenue			$	111					$	120											$	51					$	40											$	6					$	15											$	168					$	175
Segment cost of sales			50						49												9						7												2						6												61						62
Segment gross margin (1)			$	61					$	71											$	42					$	33											$	4					$	9											$	107					$	113
			For the Six Months Ended
			Cybersecurity												IoT												Licensing and Other												Segment Totals
			August 31,																		August 31,																		August 31,																		August 31,
			2022						2021												2022						2021												2022						2021												2022						2021
Segment revenue			$	224					$	227											$	102					$	83											$	10					$	39											$	336					$	349
Segment cost of sales			103						95												17						14												4						12												124						121
Segment gross margin (1)			$	121					$	132											$	85					$	69											$	6					$	27											$	212					$	228

______________________________

(1) A reconciliation of total segment gross margin to consolidated totals is set forth below.

Cybersecurity consists of the Company’s BlackBerry Spark® software platform, BlackBerry® AtHoc®, BlackBerry® Alert and BlackBerry® SecuSUITE®. The BlackBerry Spark platform is a comprehensive offering of security software products and services, including the BlackBerry® Cyber Suite and the BlackBerry Spark® Unified Endpoint Management Suite, which are also marketed together as the BlackBerry Spark® Suite, offering the Company’s broadest range of tailored cybersecurity and endpoint management options. The BlackBerry Spark UES Suite includes revenue from the Company’s Cylance® artificial intelligence and machine learning-based platform consisting of CylancePROTECT®, CylanceOPTICS®, CylancePERSONA™, CylanceGATEWAY™, CylanceGUARD® managed services, CylancePROTECT Mobile™ and other cybersecurity applications. The BlackBerry Spark UEM Suite includes the Company’s BlackBerry® UEM, BlackBerry® Dynamics™, and BlackBerry® Workspaces solutions. Cybersecurity revenue is generated predominantly through software licenses, commonly bundled with support, maintenance and professional services.

IoT consists of BlackBerry® QNX®, BlackBerry® Certicom®, BlackBerry Radar®, BlackBerry IVY™ and other IoT applications. IoT revenue is generated predominantly through software licenses, commonly bundled with support, maintenance and professional services.

Licensing and Other consists of the Company’s intellectual property arrangements and settlement awards. Other consists of the Company’s legacy service access fees (“SAF”) business, which ceased operations on January 4, 2022.

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The following table reconciles total segment gross margin for the three and six months ended August 31, 2022 and August 31, 2021 to the Company’s consolidated totals:

			Three Months Ended												Six Months Ended
			August 31, 2022						August 31, 2021						August 31, 2022						August 31, 2021
Total segment gross margin			$	107					$	113					212						$	228
Adjustments (1):
Less: Stock compensation			1						1						2						2
Less:
Research & development			54						58						107						115
Selling, marketing and administration			86						83						168						156
Amortization			25						45						52						91
Impairment of long-lived assets			4						—						4						—
Gain on sale of property, plant and equipment, net			(6)						—						(6)						—
Debentures fair value adjustment			(10)						67						(56)						63
Litigation settlement			—						—						165						—
Investment loss, net			2						1						3						3
Consolidated loss before income taxes			$	(49)					$	(142)					$	(227)					$	(202)

______________________________

(1) The CODM reviews segment information on an adjusted basis, which excludes certain amounts as described below:

Stock compensation expenses - Equity compensation is a non-cash expense and does not impact the ongoing operating decisions taken by the Company’s management.

Revenue

The Company disaggregates revenue from contracts with customers based on geographical regions, timing of revenue recognition, and the major product and service types, as discussed above in “Segment Disclosures”.

The Company’s revenue, classified by major geographic region in which the Company’s customers are located, was as follows:

			Three Months Ended												Six Months Ended
			August 31, 2022						August 31, 2021						August 31, 2022						August 31, 2021
North America (1)			$	85					$	101					$	174					$	212
Europe, Middle East and Africa			61						57						121						102
Other regions			22						17						41						35
Total			$	168					$	175					$	336					$	349
North America (1)			50.6		%				57.7		%				51.8		%				60.8		%
Europe, Middle East and Africa			36.3		%				32.6		%				36.0		%				29.2		%
Other regions			13.1		%				9.7		%				12.2		%				10.0		%
Total			100.0		%				100.0		%				100.0		%				100.0		%

______________________________

(1) North America includes all revenue from the Company’s intellectual property arrangements, due to the global applicability of the patent portfolio and licensing arrangements thereof.

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Revenue, classified by timing of recognition, was as follows:

			Three Months Ended												Six Months Ended
			August 31, 2022						August 31, 2021						August 31, 2022						August 31, 2021
Products and services transferred over time			$	95					$	107					$	193					$	213
Products and services transferred at a point in time			73						68						143						136
Total			$	168					$	175					$	336					$	349

Revenue contract balances

The following table sets forth the activity in the Company’s revenue contract balances for the six months ended August 31, 2022:

			Accounts Receivable						Deferred Revenue						Deferred Commissions
Opening balance as at February 28, 2022			$	138					$	244					$	16
Increases due to invoicing of new or existing contracts, associated contract acquisition costs, or other			326						283						11
Decrease due to payment, fulfillment of performance obligations, or other			(364)						(318)						(11)
Decrease, net			(38)						(35)						—
Closing balance as at August 31, 2022			$	100					$	209					$	16

Transaction price allocated to the remaining performance obligations

The table below discloses the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied as at August 31, 2022 and the time frame in which the Company expects to recognize this revenue. The disclosure includes estimates of variable consideration, except when the variable consideration is a sales-based or usage-based royalty promised in exchange for a license of intellectual property.

			As at August 31, 2022
			Less than 12 Months						12 to 24 Months						Thereafter						Total
Remaining performance obligations			$	176					$	24					$	9					$	209

Revenue recognized for performance obligations satisfied in prior periods

For the three and six months ended August 31, 2022, $1 million of revenue was recognized for performance obligations satisfied in a prior period (three and six months ended August 31, 2021 - no revenue was recognized relating to performance obligations satisfied in a prior period).

Property, plant and equipment, intangible assets, operating lease ROU assets and goodwill, classified by geographic region in which the Company’s assets are located, were as follows:

			As at
			August 31, 2022												February 28, 2022
			Property, Plant and Equipment, Intangible Assets, Operating Lease ROU Assets and Goodwill						Total Assets						Property, Plant and Equipment, Intangible Assets, Operating Lease ROU Assets and Goodwill						Total Assets
Canada			$	97					$	384					$	117					$	447
United States			1,253						1,898						1,313						1,989
Other			27						99						27						131
			$	1,377					$	2,381					$	1,457					$	2,567

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Information About Major Customers

There was one customer that comprised 16% and 15% of the Company’s revenue in the three and six months ended August 31, 2022, respectively (three and six months ended August 31, 2021 - one customer that comprised 12% and no customer that comprised more than 10% of the Company’s revenue, respectively).

(a)    Certain consolidated statements of cash flow information related to interest and income taxes paid is summarized as follows:

			Three Months Ended												Six Months Ended
			August 31, 2022						August 31, 2021						August 31, 2022						August 31, 2021
Interest paid during the period			$	2					$	2					$	3					$	3
Income taxes paid during the period			1						3						1						4
Income tax refunds received during the period			—						3						—						5

(b)    Additional Information

Foreign exchange

The Company is exposed to foreign exchange risk as a result of transactions in currencies other than its functional currency, the U.S. dollar. The majority of the Company’s revenue in the second quarter of fiscal 2023 was transacted in U.S. dollars. Portions of the revenue were denominated in Canadian dollars, euros and British pounds. Other expenses, consisting mainly of salaries and certain other operating costs, were incurred primarily in Canadian dollars, but were also incurred in U.S. dollars, euros and British pounds. At August 31, 2022, approximately 11% of cash and cash equivalents, 19% of accounts receivable and 43% of accounts payable were denominated in foreign currencies (February 28, 2022 – 37%, 23% and 30%, respectively). These foreign currencies primarily include the Canadian dollar, euro and British pound. As part of its risk management strategy, the Company maintains net monetary asset and/or liability balances in foreign currencies and engages in foreign currency hedging activities using derivative financial instruments, including currency forward contracts and currency options. The Company does not use derivative instruments for speculative purposes.

Interest rate risk

Cash and cash equivalents and investments are invested in certain instruments of varying maturities. Consequently, the Company is exposed to interest rate risk as a result of holding investments of varying maturities. The fair value of investments, as well as the investment income derived from the investment portfolio, will fluctuate with changes in prevailing interest rates. The Company has also issued 1.75% Debentures with a fixed interest rate, as described in Note 5. The fair value of the 1.75% Debentures will fluctuate with changes in prevailing interest rates. Consequently, the Company is exposed to interest rate risk as a result of the 1.75% Debentures. The Company does not currently utilize interest rate derivative instruments to hedge its investment portfolio or changes in the market value of the 1.75% Debentures.

Credit risk

The Company is exposed to market and credit risk on its investment portfolio. The Company reduces this risk by investing in liquid, investment-grade securities and by limiting exposure to any one entity or group of related entities. As at August 31, 2022, no single issuer represented more than 22% of the total cash, cash equivalents and investments (February 28, 2022 - no single issuer represented more than 10% of the total cash, cash equivalents and investments), with the largest such issuer representing cash balances and bearer deposits with one of the Company’s banking counterparties.

Liquidity risk

Cash, cash equivalents, and investments were approximately $699 million as at August 31, 2022. The Company’s management remains focused on efficiently managing working capital balances and managing the liquidity needs of the business. Based on its current financial projections, the Company believes its financial resources, together with expected future operating cash generating and operating expense reduction activities and access to other potential financing arrangements, should be sufficient to meet funding requirements for current financial commitments and future operating expenditures not yet committed, and should provide the necessary financial capacity for the foreseeable future.

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Government subsidies

During fiscal 2021, the Government of Canada announced the Canada Emergency Wage Subsidy (“CEWS”) and the Canada Emergency Rent Subsidy (“CERS”) for Canadian employers whose businesses were affected by the COVID-19 pandemic. The CEWS program initially ran for a thirty-six week period between March and November 2020 and the CERS program for a period between September 2020 and July 2021. The programs were subsequently extended to October 2021. The CEWS program provided a subsidy of up to 75% of eligible employees’ employment insurable remuneration, subject to certain criteria. The extension also included a gradual decrease to the subsidy rate. CEWS received after June 5, 2021 may be repayable in the future under certain circumstances if certain terms and conditions are not met by the Company, which is not probable at this time. The CERS program provided a subsidy of up to 65% of eligible fixed property expenses. The base subsidy was determined based on the percentage revenue decline experienced by businesses affected by the COVID-19 pandemic. The CERS program gradually reduced the amount and availability of subsidies in the months leading up to the program’s final claim period.

During the third quarter of fiscal 2022, the Government of Canada announced the HHBRP to continue supporting businesses affected by the COVID-19 pandemic. The HHBRP provides a subsidy of up to 50% of eligible employees’ employment insurable remuneration, subject to certain criteria, and rent and ran until May 7, 2022.

The Company applied for the CEWS, CERS and HHBRP to the extent it met the requirements to receive the subsidy and during the three and six months ended August 31, 2022, recorded nil and $4 million, respectively, in government subsidies as a reduction to operating expenses in the consolidated statement of operations (August 31, 2021 - $11 million and $27 million, respectively). As at August 31, 2022, the Company has recorded nil in accrued government subsidies within other receivables on the consolidated balance sheet (February 28, 2022 - $8 million).

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