Exhibit 99.2







SANGOMA TECHNOLOGIES
CORPORATION



Consolidated financial statements for the

years ended June 30, 2023 and 2022

(in thousands of US dollars)



100 Renfrew Drive, Suite 100,

Markham, Ontario,

Canada L3R 9R6





1







Sangoma Technologies Corporation



June 30, 2023 and 2022



Table of contents



|Independent auditor’s report                                   | 3    
|-------------------------------------------------------------- | -----
|                                                               |      
|Consolidated statements of financial position                  | 10   
|                                                               |      
|Consolidated statements of loss and comprehensive
    loss     | 11   
|                                                               |      
|Consolidated statements of changes in shareholders’
    equity | 12   
|                                                               |      
|Consolidated statements of cash flows                          | 13   
|                                                               |      
|Notes to the consolidated financial statements                 | 14-52





2











Report of Independent Registered Public Accounting
Firm



KPMG LLP

Vaughan Metropolitan Centre

100 New Park Place, Suite 1400

Vaughan ON L4K 0J3

Canada

Tel 905-265-5900

Fax 905-265-6390



To the Shareholders and Board of Directors of
Sangoma Technologies Corporation



Opinion on the Consolidated Financial Statements



We have audited the accompanying consolidated
statement of financial position of Sangoma Technologies Corporation (the "Company") as of June 30, 2023, the related consolidated
statements of loss and comprehensive loss, changes in shareholders' equity, and cash flows for the year ended June 30, 2023, and
the related notes (collectively, the "consolidated financial statements"). In our opinion, the consolidated financial statements
present fairly, in all material respects, the financial position of the Company as of June 30, 2023 and the results of its operations
and its cash flows for the year ended June 30, 2023, in conformity with International Financial Reporting Standards as issued by
the International Accounting Standards Board.



Basis for Opinion



These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based
on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board ("PCAOB") and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.



We conducted our audit in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were
we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an
understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the
Company's internal control over financial reporting. Accordingly, we express no such opinion.



Our audit included performing procedures to assess
the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures
that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the
consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides
a reasonable basis for our opinion.





3







Page 2



/s/ KPMG LLP



Chartered Professional Accountants, Licensed
Public Accountants



We have served as the Company's auditor since
2022.



Vaughan, Canada



September 27, 2023





4











Independent Auditor's Report



To the Shareholders of Sangoma Technologies Corporation:



Opinion



We have audited the consolidated financial statements of Sangoma
Technologies Corporation and its subsidiaries (the “Company”), which comprise the consolidated statements of financial position
as at June 30, 2022, June 30, 2021, and July 1, 2020, and the consolidated statements of income (loss) and comprehensive
income (loss), changes in shareholders’ equity and cash flows for the years ended June 30, 2022 and June 30, 2021, and
notes to the consolidated financial statements, including a summary of significant accounting policies.



In our opinion, the accompanying consolidated
financial statements present fairly, in all material respects, the consolidated financial position of the Company as at June 30,
2022, June 30, 2021, and July 1, 2020, and its consolidated financial performance and its consolidated cash flows for the years
ended June 30, 2022 and June 30, 2021 in accordance with International Financial Reporting Standards.



Basis for Opinion



We conducted our audits in accordance with Canadian
generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities
for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Company in accordance with the
ethical requirements that are relevant to our audits of the consolidated financial statements in Canada, and we have fulfilled our other
ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.



Emphasis of Matter - Change in Accounting
Policy



As discussed in Note 2 to the consolidated financial
statements, the Company has elected to change its presentation currency from the Canadian dollar to the US dollar effective July 1,
2021. This change has been retrospectively applied. The statement of financial position as of July 1, 2020 has been included pursuant
to the requirements of International Financial Reporting Standards.



Key Audit Matters



Key audit matters are those matters that, in
our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These
matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.







5







Acquisition of NetFortris Corporation



Key Audit Matter Description



As described in Note 20(c) to the
consolidated financial statements, on March 28, 2022, the Company completed its acquisition of NetFortris Corporation for a
total purchase price of $64,820 (in thousands). The identifiable assets acquired and the liabilities assumed are measured at fair
value as of the acquisition date. Where the net of the fair value of the assets acquired and liabilities assumed is less than the
fair value of consideration transferred, the difference is accounted for as goodwill. In assessing fair value of the acquired
assets, management used various valuation techniques involving significant judgement and subjectivity.



We considered this to be a key audit matter due
to the complexity of the transaction, which included valuation of the acquired intangible assets. This resulted in a high degree of auditor
judgment, subjectivity and effort in performing procedures and evaluating the audit evidence related to management's estimates. As such,
an increased extent of audit effort was required, which included the involvement of internal valuation specialists.



Audit Response



We responded to this matter by performing procedures
over management's valuation techniques in determining fair value of the acquired assets and in determining goodwill. Our audit work in
relation to this included, but was not limited to, the following:



| | · | Analyzed the signed purchase agreement to obtain an understanding
of the key terms and conditions and to identify the necessary accounting considerations.                                                                      
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | · | Tested the mathematical accuracy of management's valuation models
and supporting calculations.                                                                                                                                  
| | · | Evaluated the fair value of the consideration transferred including
the fair value of common shares and consideration payable.                                                                                                  
| | · | Evaluated the reasonableness of key assumptions in management's
models, including testing of historical financial results that were used as a basis for future projections.                                                     
| | · | Assessed the appropriateness of the disclosures relating to
the assumptions used in the acquisition in the notes to the consolidated financial statements.                                                                      
| | · | With the assistance of internal valuation specialists, evaluated
the reasonableness of management's model, through assessing the appropriateness of valuation models used and testing the significant
assumptions and inputs by:



|o | Comparing to externally available industry and economic trends;
|- | ---------------------------------------------------------------
|o | Evaluating budgets and forecasts for future operations; and    
|o | Comparing against guideline companies within the same industry.



Impairment Analysis of Goodwill and Long-Lived
Assets



Key Audit Matter Description



We draw attention to Notes 7, 8, 9 and 12 to
the consolidated financial statements. The Company has recorded goodwill, property and equipment, right-of-use assets and intangibles
assets of USD $428,626 (in thousands) as of June 30, 2022. The Company performs impairment testing for goodwill and long-lived assets
on an annual basis or more frequently when there is an indication of impairment. An impairment is recognized if the carrying amount of
an asset, or its cash generating unit (CGU), exceeds its estimated recoverable amount. The recoverable amount of an asset is the greater
of its value-in-use and its fair value less costs to sell. In determining the estimated recoverable amounts, the Company’s significant
assumptions include future cash flows based on expected operating results, long term growth rates, the revenue exit multiple, and the
discount rate.







6







We considered this a key audit matter due to
the significant judgment made by management in estimating the recoverable amount for goodwill and long-lived assets and a high degree
of auditor judgment, subjectivity and effort in performing procedures and evaluating audit evidence relating to management’s estimates.
This resulted in an increased extent of audit effort, including the involvement of internal valuation specialists.



Audit Response



We responded to this matter by performing procedures
over the impairment of goodwill and long-lived assets. Our audit work in relation to this included, but was not limited to, the following:



| | · | Tested management’s key assumptions, including performing
a ‘retrospective review’ to compare management’s assumptions in the prior year expected future cash flows to the actual
results to assess the accuracy of the Company’s budgeting process.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | · | Evaluated the reasonableness of key assumptions in the impairment
model, including future cash flows based on expected operating results, long-term growth rates, the revenue exit multiple, and the discount
rate.                                 
| | · | Tested the mathematical accuracy of management’s impairment
model and supporting calculations.                                                                                                                                                      
| | · | Assessed the appropriateness of the disclosures relating to
the assumptions used in the impairment assessment in the notes to the consolidated financial statements.                                                                                
| | · | With the assistance of internal valuation specialists, evaluated
the reasonableness of the Company’s impairment model, which included:                                                                                                              



| | o | Evaluating the reasonableness of the discount rate and revenue exit multiple by comparing the
                                                                             Company’s weighted average cost of capital and revenue exit multiple against publicly available market data;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | o | Developing a range of independent estimates and comparing those to the discount rate selected by
                                                                             management; and                                                                                          
| | o | Performing a sensitivity analysis of the recoverable amount of the CGU by varying the weighted
                                                                             average cost of capital and the revenue exit multiple.                                                     



Other Information



Management is responsible for the other information.
The other information comprises:



| | · | Management’s Discussion and Analysis; and                                                                                             
| | - | --------------------------------------------------------------------------------------------------------------------------------------
| | · | The information, other than the consolidated financial statements
and our auditor’s report thereon, in the Annual Report on Form 40-F.



Our opinion on the consolidated financial statements
does not cover the other information and we do not express any form of assurance conclusion thereon.



In connection with our audits of the consolidated
financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is
materially inconsistent with the consolidated financial statements or our knowledge obtained in the audits or otherwise appears to be
materially misstated. We obtained Management’s Discussion and Analysis and the Annual Report on Form 40-F prior to the date
of this auditor’s report. If, based on the work we have performed on this other information, we conclude that there is a material
misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.







7







Responsibilities of Management and Those Charged
with Governance for the Consolidated Financial Statements



Management is responsible for the preparation and fair presentation
of the consolidated financial statements in accordance with International Financial Reporting Standards and for such internal control
as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement,
whether due to fraud or error.



In preparing the consolidated financial statements,
management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or
to cease operations, or has no realistic alternative but to do so.



Those charged with governance are responsible for overseeing
the Company’s financial reporting process.



Auditor’s Responsibilities for the Audit
of the Consolidated Financial Statements



Our objectives are to obtain reasonable assurance
about whether the consolidated 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 a guarantee that
an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when
it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of these financial statements.



As part of an audit in accordance with Canadian generally accepted
auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:



| | · | Identify and assess the risks of material misstatement of the
consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. 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 omissions, misrepresentations,
or the override of internal control.                                                                                                                                                                                                               
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | · | Obtain an understanding of internal control relevant to the
audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the Company’s internal control.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | · | Evaluate the appropriateness of accounting policies used and
the reasonableness of accounting estimates and related disclosures made by management.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | · | Conclude on the appropriateness of management's use of the going
concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions
that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements
or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date
of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
| | · | Evaluate the overall presentation, structure and content of
the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                              







8







| | · | Obtain sufficient appropriate audit evidence regarding the financial
information of the entities or business activities within the Company to express an opinion on the consolidated financial statements.
We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



We communicate with those charged with governance
regarding, among other matters, the planned scope and timing of the audits and significant audit findings, including any significant
deficiencies in internal control that we identify during our audits.



We also provide those charged with governance
with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships
and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.



From the matters communicated with those charged
with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the
current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes
public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in
our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.



The engagement partner on the audit resulting
in this independent auditor's report is Ajmer Singh Sran.



/s/ MNP LLP



Toronto, Ontario Chartered Professional Accountants

September 26, 2022 Licensed Public Accountants









9











Sangoma Technologies
Corporation

Consolidated statements
of financial position

As at June 30,
2023, and June 30, 2022

(in thousands
of US dollars, except per share data)








|                                                     |  |      |  |  | June 30 |          |   | June 30 | 
|---------------------------------------------------- |  | ---- |  |  | ------- | -------- | - | ------- | 
|                                                     |  | Note |  |  | 2023    |          |   | 2022    | 
|                                                     |  |      |  |  | $       |          |   | $       | 
|Assets                                               |  |      |  |  |         |          |   |         | 
|Current assets                                       |  |      |  |  |         |          |   |         | 
|Cash and cash equivalents                            |  | 4    |  |  |         | 11,156   |   |         | 
|Trade and other receivables                          |  | 4    |  |  |         | 21,905   |   |         | 
|Inventories                                          |  | 6    |  |  |         | 17,970   |   |         | 
|Income tax receivable                                |  |      |  |  |         | 3,192    |   |         | 
|Contract assets                                      |  |      |  |  |         | 1,762    |   |         | 
|Derivative assets                                    |  | 15   |  |  |         | 1,218    |   |         | 
|Other current assets                                 |  |      |  |  |         | 4,420    |   |         | 
|                                                     |  |      |  |  |         | 61,623   |   |         | 
|Non-current assets                                   |  |      |  |  |         |          |   |         | 
|Property and equipment                               |  | 7    |  |  |         | 9,152    |   |         | 
|Right-of-use assets                                  |  | 8    |  |  |         | 13,152   |   |         | 
|Intangible assets                                    |  | 9    |  |  |         | 157,437  |   |         | 
|Development costs                                    |  | 10   |  |  |         | 6,569    |   |         | 
|Deferred income tax assets                           |  | 11   |  |  |         | 3,210    |   |         | 
|Goodwill                                             |  | 12   |  |  |         | 187,502  |   |         | 
|Contract assets                                      |  |      |  |  |         | 2,911    |   |         | 
|Derivative assets                                    |  | 15   |  |  |         | 768      |   |         | 
|Other non-current assets                             |  |      |  |  |         | 422      |   |         | 
|                                                     |  |      |  |  |         | 442,746  |   |         | 
|Liabilities                                          |  |      |  |  |         |          |   |         | 
|Current liabilities                                  |  |      |  |  |         |          |   |         | 
|Accounts payable and accrued liabilities             |  | 4    |  |  |         | 24,077   |   |         | 
|Provisions                                           |  | 13   |  |  |         | 237      |   |         | 
|Sales tax payable                                    |  |      |  |  |         | 5,594    |   |         | 
|Income tax payable                                   |  |      |  |  |         | 61       |   |         | 
|Consideration payable                                |  | 14   |  |  |         | 1,894    |   |         | 
|Operating facility and loans                         |  | 15   |  |  |         | 17,700   |   |         | 
|Contract liabilities                                 |  | 16   |  |  |         | 10,909   |   |         | 
|Lease obligations on right-of-use assets             |  | 8    |  |  |         | 2,719    |   |         | 
|                                                     |  |      |  |  |         | 63,191   |   |         | 
|Long term liabilities                                |  |      |  |  |         |          |   |         | 
|Consideration payable                                |  | 14   |  |  |         | -        |   |         | 
|Operating facility and loans                         |  | 15   |  |  |         | 83,125   |   |         | 
|Contract liabilities                                 |  | 16   |  |  |         | 3,642    |   |         | 
|Non-current lease obligations on right-of-use assets |  | 8    |  |  |         | 11,612   |   |         | 
|Deferred income tax liabilities                      |  | 11   |  |  |         | 14,295   |   |         | 
|Other non-current liabilities                        |  |      |  |  |         | 766      |   |         | 
|                                                     |  |      |  |  |         | 176,631  |   |         | 
|Shareholders’ equity                                 |  |      |  |  |         |          |   |         | 
|Share capital                                        |  |      |  |  |         | 379,924  |   |         | 
|Shares to be issued                                  |  |      |  |  |         | -        |   |         | 
|Contributed surplus                                  |  |      |  |  |         | 18,132   |   |         | 
|Accumulated other comprehensive income               |  |      |  |  |         | 1,335    |   |         | 
|Accumulated deficit                                  |  |      |  |  |         | (133,276 | ) |         | 
|                                                     |  |      |  |  |         | 266,115  |   |         | 
|                                                     |  |      |  |  |         | 442,746  |   |         | 



|Approved by the Board |             |         
|--------------------- | ----------- | --------
|(Signed)              | Al Guarino  | Director
|(Signed)              | Allan Brett | Director



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





10









Sangoma Technologies
Corporation

Consolidated statements
of loss and comprehensive loss

For the years
ended June 30, 2023 and 2022

(in thousands
of US dollars, except per share data)








|                                                        |  |      |           |  | June 30 |   |            | June 30 | 
|------------------------------------------------------- |  | ---- | --------- |  | ------- | - | ---------- | ------- | 
|                                                        |  | Note |           |  | 2023    |   |            | 2022    | 
|                                                        |  |      |           |  | $       |   |            | $       | 
|Revenue                                                 |  |      | 19        |  |         |   | 252,530    |         | 
|Cost of sales                                           |  |      |           |  |         |   | 79,739     |         | 
|Gross profit                                            |  |      |           |  |         |   | 172,791    |         | 
|                                                        |  |      |           |  |         |   |            |         | 
|Expenses                                                |  |      |           |  |         |   |            |         | 
|Sales and marketing                                     |  |      |           |  |         |   | 61,922     |         | 
|Research and development                                |  |      |           |  |         |   | 37,470     |         | 
|General and administration                              |  |      |           |  |         |   | 76,363     |         | 
|Foreign currency exchange (gain) loss                   |  |      |           |  |         |   | (15        | )       | 
|Interest expense (net)                                  |  |      | 4,8,14,15 |  |         |   | 6,767      |         | 
|Business acquisition costs                              |  |      | 20        |  |         |   | -          |         | 
|Restructuring and business integration costs            |  |      |           |  |         |   | 2,710      |         | 
|Exchange listing expense                                |  |      |           |  |         |   | -          |         | 
|Gain on change in fair value of consideration payable   |  |      | 14        |  |         |   | (2,975     | )       | 
|Goodwill impairment                                     |  |      | 12        |  |         |   | 22,507     |         | 
|Loss before income tax                                  |  |      |           |  |         |   | (31,958    | )       | 
|Provision for income taxes                              |  |      |           |  |         |   |            |         | 
|Current                                                 |  |      | 11        |  |         |   | (172       | )       | 
|Deferred                                                |  |      | 11        |  |         |   | (2,760     | )       | 
|Net loss                                                |  |      |           |  |         |   | (29,026    | )       | 
|Other comprehensive income                              |  |      |           |  |         |   |            |         | 
|Items to be reclassified to net income                  |  |      |           |  |         |   |            |         | 
|Change in fair value of interest rate swaps, net of tax |  |      | 15        |  |         |   | 496        |         | 
|Comprehensive loss                                      |  |      |           |  |         |   | (28,530    | )       | 
|                                                        |  |      |           |  |         |   |            |         | 
|Loss per share                                          |  |      |           |  |         |   |            |         | 
|Basic                                                   |  |      | 17(iii)   |  |         | $ | (0.88      | )       | 
|Diluted                                                 |  |      | 17(iii)   |  |         | $ | (0.88      | )       | 
|Weighted average number of shares outstanding           |  |      |           |  |         |   |            |         | 
|Basic                                                   |  |      | 17(iii)   |  |         |   | 33,118,980 |         | 
|Diluted                                                 |  |      | 17(iii)   |  |         |   | 33,118,980 |         | 



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





11









Sangoma Technologies
Corporation

Consolidated statements
of changes in shareholders' equity

For the years
ended June 30, 2023 and 2022

(in thousands
of US dollars, except per share data)








|                                                            |  | Note      |  | Number of
 common shares |            |   | Share 
capital |  |         | Shares to be
 issued |  |  | Contributed
 surplus |   |  | Accumulated other
 comprehensive
 (loss) earnings |        |   | Retained earnings
 (accumulated
 deficit) |  |       | Total
 shareholders'
 equity | 
|----------------------------------------------------------- |  | --------- |  | ------------------------ | ---------- | - | -------------- |  | ------- | -------------------- |  |  | -------------------- | - |  | ------------------------------------------------- | ------ | - | ----------------------------------------- |  | ----- | ---------------------------- | 
|                                                            |  |           |  |                          |            |   | $              |  |         | $                    |  |  | $                    |   |  | $                                                 |        |   | $                                         |  |       | $                            | 
|Balance, July 1, 2021                                       |  |           |  |                          | 19,021,642 |   |                |  | 172,462 |                      |  |  | 192,102              |   |  |                                                   | 5,393  |   |                                           |  | (333  | )                            | 
|Net loss                                                    |  |           |  |                          | -          |   |                |  | -       |                      |  |  | -                    |   |  |                                                   | -      |   |                                           |  | -     |                              | 
|Change in fair value of interest rate swaps, net of tax     |  | 15        |  |                          | -          |   |                |  | -       |                      |  |  | -                    |   |  |                                                   | -      |   |                                           |  | 1,172 |                              | 
|Common shares issued through business combination           |  | 17(i), 20 |  |                          | 1,494,536  |   |                |  | 16,801  |                      |  |  | -                    |   |  |                                                   | -      |   |                                           |  | -     |                              | 
|Deferred tax benefit on share issuance costs                |  | 11        |  |                          | 857,142    |   |                |  | 12,970  |                      |  |  | (12,970              | ) |  |                                                   | -      |   |                                           |  | -     |                              | 
|Common shares issued for options exercised                  |  | 17(i)     |  |                          | 66,340     |   |                |  | 799     |                      |  |  | -                    |   |  |                                                   | (267   | ) |                                           |  | -     |                              | 
|Rounding of fractional shares after share consideration     |  |           |  |                          | (28        | ) |                |  | -       |                      |  |  | -                    |   |  |                                                   | -      |   |                                           |  | -     |                              | 
|Share-based compensation expense                            |  | 17(ii)    |  |                          | -          |   |                |  | -       |                      |  |  | -                    |   |  |                                                   | 9,929  |   |                                           |  | -     |                              | 
|Balance, June 30, 2022                                      |  |           |  |                          | 21,439,632 |   |                |  | 203,032 |                      |  |  | 179,132              |   |  |                                                   | 15,055 |   |                                           |  | 839   |                              | 
|Net loss                                                    |  |           |  |                          | -          |   |                |  | -       |                      |  |  | -                    |   |  |                                                   | -      |   |                                           |  | -     |                              | 
|Change in fair value of interest rate swaps, net of tax     |  | 15        |  |                          | -          |   |                |  | -       |                      |  |  | -                    |   |  |                                                   | -      |   |                                           |  | 496   |                              | 
|Common shares issued as installment for shares to be issued |  | 17(i)     |  |                          | 11,838,457 |   |                |  | 179,132 |                      |  |  | (179,132             | ) |  |                                                   | -      |   |                                           |  | -     |                              | 
|Common shares issued for options exercised                  |  | 17(i)     |  |                          | 11,024     |   |                |  | 67      |                      |  |  | -                    |   |  |                                                   | (23    | ) |                                           |  | -     |                              | 
|Common shares purchased and cancelled                       |  | 17(i)     |  |                          | (108,622   | ) |                |  | (605    | )                    |  |  | -                    |   |  |                                                   | -      |   |                                           |  | -     |                              | 
|Common shares returned from escrow and cancelled            |  | 4         |  |                          | (142,124   | ) |                |  | (1,702  | )                    |  |  | -                    |   |  |                                                   | -      |   |                                           |  | -     |                              | 
|Share-based compensation expense                            |  | 17(ii)    |  |                          | -          |   |                |  | -       |                      |  |  | -                    |   |  |                                                   | 3,100  |   |                                           |  | -     |                              | 
|Balance, June 30, 2023                                      |  |           |  |                          | 33,038,367 |   |                |  | 379,924 |                      |  |  | -                    |   |  |                                                   | 18,132 |   |                                           |  | 1,335 |                              | 



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





12









Sangoma Technologies
Corporation

Consolidated statements
of cash flows

For the years
ended June 30, 2023 and 2022

(in thousands
of US dollars, except per share data)








|                                                                 |  |        |  | June 30 |         |   | June 30 | 
|---------------------------------------------------------------- |  | ------ |  | ------- | ------- | - | ------- | 
|                                                                 |  | Note   |  | 2023    |         |   | 2022    | 
|                                                                 |  |        |  | $       |         |   | $       | 
|Operating activities                                             |  |        |  |         |         |   |         | 
|Net loss                                                         |  |        |  |         | (29,026 | ) |         | 
|Adjustments for:                                                 |  |        |  |         |         |   |         | 
|Depreciation of property and equipment                           |  | 7      |  |         | 4,729   |   |         | 
|Depreciation of right-of-use assets                              |  | 8      |  |         | 3,778   |   |         | 
|Amortization of intangible assets                                |  | 9      |  |         | 33,932  |   |         | 
|Amortization of development costs                                |  | 10     |  |         | 2,705   |   |         | 
|Income tax expense (recovery)                                    |  | 11     |  |         | (2,932  | ) |         | 
|Income tax paid                                                  |  |        |  |         | (4,473  | ) |         | 
|Income tax refunds                                               |  |        |  |         | 450     |   |         | 
|Share-based compensation expense                                 |  | 17(ii) |  |         | 3,100   |   |         | 
|Interest on obligation on right-of-use assets                    |  | 8      |  |         | 476     |   |         | 
|Unrealized foreign exchange loss                                 |  |        |  |         | 193     |   |         | 
|Goodwill Impairment                                              |  | 12     |  |         | 22,507  |   |         | 
|Accretion expense                                                |  | 14     |  |         | 435     |   |         | 
|Gain on lease modification                                       |  | 8      |  |         | (36     | ) |         | 
|Loss on disposal of property and equipment                       |  | 7      |  |         | 409     |   |         | 
|Gain on change in fair value of consideration payable            |  | 14     |  |         | (2,975  | ) |         | 
|Changes in working capital                                       |  |        |  |         |         |   |         | 
|Trade and other receivables                                      |  |        |  |         | (15     | ) |         | 
|Inventories                                                      |  |        |  |         | (544    | ) |         | 
|Contract assets                                                  |  |        |  |         | (881    | ) |         | 
|Other assets                                                     |  |        |  |         | 231     |   |         | 
|Sales tax payable                                                |  |        |  |         | (301    | ) |         | 
|Accounts payable and accrued liabilities                         |  |        |  |         | (4,491  | ) |         | 
|Provisions                                                       |  |        |  |         | 37      |   |         | 
|Other non current liabilities                                    |  |        |  |         | (305    | ) |         | 
|Contract liabilities                                             |  |        |  |         | (516    | ) |         | 
|Net cash provided by operating activities                        |  |        |  |         | 26,487  |   |         | 
|Investing activities                                             |  |        |  |         |         |   |         | 
|Purchase of property and equipment                               |  | 7      |  |         | (4,016  | ) |         | 
|Development costs                                                |  | 10     |  |         | (7,250  | ) |         | 
|Business combinations, net of cash and cash equivalents acquired |  | 20     |  |         | -       |   |         | 
|Net cash flows used in investing activities                      |  |        |  |         | (11,266 | ) |         | 
|Financing activities                                             |  |        |  |         |         |   |         | 
|Proceeds from operating facility and loan                        |  | 15     |  |         | 13,900  |   |         | 
|Repayments of operating facility and loan                        |  | 15     |  |         | (17,700 | ) |         | 
|Repayment of lease obligations on right-of-use assets            |  | 8      |  |         | (4,072  | ) |         | 
|Payment of consideration payable                                 |  | 14     |  |         | (8,334  | ) |         | 
|Common shares purchased and cancelled                            |  | 17(i)  |  |         | (605    | ) |         | 
|Issuance of common shares for stock options exercised            |  | 17(i)  |  |         | 44      |   |         | 
|Net cash flows provided by (used in) financing activities        |  |        |  |         | (16,767 | ) |         | 
|                                                                 |  |        |  |         |         |   |         | 
|Increase (decrease) in cash and cash equivalents                 |  |        |  |         | (1,546  | ) |         | 
|Cash and cash equivalents, beginning of the year                 |  |        |  |         | 12,702  |   |         | 
|Cash and cash equivalents, end of the year                       |  |        |  |         | 11,156  |   |         | 



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





13









Sangoma Technologies
Corporation

Notes to the consolidated
financial statements

For the years
ended June 30, 2023 and 2022

(in thousands
of US dollars, except per share data)








1. General information



Founded in 1984, Sangoma Technologies Corporation
(“Sangoma” or the “Company”) is publicly traded on the Toronto Stock Exchange (TSX: STC) and NASDAQ (NASDAQ: SANG).
The Company’s shares were traded on the TSX Venture Exchange under the symbol STC until November 1, 2021, at which point the
Company’s shares commenced trading on the TSX. In conjunction with listing on the TSX, the Company’s shares were delisted
from the TSX Venture Exchange. The Company’s shares commenced trading on NASDAQ on December 16, 2021. The Company was incorporated
in Canada, its legal name is Sangoma Technologies Corporation and its primary operating subsidiaries for fiscal 2023 are Sangoma Technologies
Inc., Sangoma US Inc., Digium Inc., NetFortris Corporation, Star2Star Communications LLC, VoIP Supply LLC, and VoIP Innovations LLC.



Sangoma is a leading provider of hardware and
software components that enable or enhance Internet Protocol Communications Systems for both telecom and datacom applications. Enterprises,
small to medium sized businesses (“SMBs”) and telecom operators in over 150 countries rely on Sangoma’s technology as
part of their mission critical infrastructures. The product line includes data and telecom boards for media and signal processing, as
well as gateway appliances and software.



The Company is domiciled in Ontario, Canada. The
address of the Company’s registered office is 100 Renfrew Dr., Suite 100, Markham, Ontario, L3R 9R6 and the Company operates
in multiple jurisdictions.



2. Significant accounting policies



(i) Statement
of compliance and basis of presentation



The accompanying consolidated financial statements
have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International
Accounting Standards Board (“IASB”).



These audited consolidated financial statements
were prepared using the same basis of presentation, accounting policies and methods of computation as those of the audited consolidated
financial statements for the year ended June 30, 2022.



(ii) Basis
of consolidation



The consolidated financial statements include
the accounts of the Company and its wholly-owned subsidiaries. Sangoma Technologies Inc. (Canada), Sangoma HK Ltd. (Hong Kong), Sangoma
Technologies Ltd. (Ireland), Sangoma Technologies Private Ltd. (India), Sangoma US Inc. (United States), Sangoma Technologies US Inc.
(United States), Digium Inc. (United States), Digium Cloud Services LLC (United States), .E4 LLC (United States), NetFortris Corporation
(United States), NetFortris Acquisition Co. Inc. (United States), NetFortris Operating Co. Inc. (United States), Fonality Inc. (United
States), Fonality Pty Ltd. (Australia), NetFortris (Philippines) Inc. (Philippines), StarBlue Inc. (United States), Star2Star Communications
LLC (United States),VoIP Supply LLC (United States), VoIP Innovations LLC (United States), Vocaly LLC (United States), Trybe Labs LLC
(United States). and Sangoma Columbia SAS (Columbia).



Subsidiaries are entities controlled by the Company
where control is defined as the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.
Subsidiaries are included in the consolidated financial statements from the date control is obtained until the date control ceases. All
intercompany balances, transactions, income and expenses have been eliminated on consolidation.





14









Sangoma Technologies
Corporation

Notes to the consolidated
financial statements

For the years
ended June 30, 2023 and 2022

(in thousands
of US dollars, except per share data)








(iiii) Financial
instruments



Non-Derivative
Financial Assets



Recognition and initial measurement



The Company recognizes financial assets when it
becomes party to the contractual provisions of the instrument. Financial assets are measured initially at their fair value plus, in the
case of financial assets not subsequently measured at fair value through profit or loss, transaction costs that are directly attributable
to their acquisition. Transaction costs attributable to the acquisition of financial assets subsequently measured at fair value through
profit or loss are expensed in profit or loss when incurred.



Classification and subsequent measurement



On initial recognition, financial assets are classified
as subsequently measured at amortized cost, fair value through other comprehensive income (“FVOCI”) or fair value through
profit or loss (“FVTPL”). The Company determines the classification of its financial assets, together with any embedded derivatives,
based on the business model for managing the financial assets and their contractual cash flow characteristics.



Financial assets are classified as follows:



·Amortized
cost - Assets that are held for collection of contractual cash flows where those cash flows are solely payments of principal and interest
are measured at amortized cost. Interest revenue is calculated using the effective interest method and gains or losses arising from impairment,
foreign exchange and derecognition are recognized in profit or loss. Financial assets measured at amortized cost are comprised of cash
and cash equivalents, trade receivables, contract assets and other current assets.



·Fair value
through other comprehensive income - Assets that are held for collection of contractual cash flows and for selling the financial assets,
and for which the contractual cash flows are solely payments of principal and interest, are measured at fair value through other comprehensive
income. Interest income calculated using the effective interest method and gains or losses arising from impairment and foreign exchange
are recognized in profit or loss.



All other changes in the carrying amount of the
financial assets are recognized in other comprehensive income. Upon derecognition, the cumulative gain or loss previously recognized in
other comprehensive income is reclassified to profit or loss. The Company does not hold any financial assets measured at fair value through
other comprehensive income.



·Mandatorily
at fair value through profit or loss - Assets that do not meet the criteria to be measured at amortized cost, or fair value through other
comprehensive income, are measured at fair value through profit or loss. All interest income and changes in the financial assets’
carrying amount are recognized in profit or loss. The Company does not hold any financial assets mandatorily measured at fair value through
profit or loss.



·Designated
at fair value through profit or loss - On initial recognition, the Company may irrevocably designate a financial asset to be measured
at fair value through profit or loss in order to eliminate or significantly reduce an accounting mismatch that would otherwise arise from
measuring assets or liabilities, or recognizing the gains and losses on them, on different bases. All interest income and changes in the
financial assets’ carrying amount are recognized in profit or loss. The Company does not hold any financial assets designated to
be measured at fair value through profit or loss.



Classification and subsequent measurement



The Company measures all equity investments at
fair value. Changes in fair value are recorded in profit or loss.





15











Sangoma Technologies
Corporation

Notes to the consolidated
financial statements

For the years
ended June 30, 2023 and 2022

(in thousands
of US dollars, except per share data)








Business model assessment



The Company assesses the objective of its business
model for holding a financial asset at a level of aggregation which best reflects the way the business is managed, and information is
provided to management. Information considered in this assessment includes stated policies and objectives.



Contractual cash flow assessment



The cash flows of financial assets are assessed
as to whether they are solely payments of principal and interest on the basis of their contractual terms. For this purpose, ‘principal’
is defined as the fair value of the financial asset on initial recognition. ‘Interest’ is defined as consideration for the
time value of money, the credit risk associated with the principal amount outstanding, and other basic lending risks and costs. In performing
this assessment, the Company considers factors that would alter the timing and amount of cash flows such as prepayment and extension features,
terms that might limit the Company’s claim to cash flows, and any features that modify consideration for the time value of money.



Impairment



The Company recognizes a loss allowance for the
expected credit losses associated with its financial assets, other than financial assets measured at fair value through profit or loss.
Expected credit losses are measured to reflect a probability-weighted amount, the time value of money, and reasonable and supportable
information regarding past events, current conditions and forecasts of future economic conditions. The Company applies the simplified
approach for trade receivables. Using the simplified approach, the Company records a loss allowance equal to the expected credit losses
resulting from all possible default events over the assets’ contractual lifetime.



The Company assesses whether a financial asset
is credit-impaired at the reporting date. Regular indicators that a financial instrument is credit-impaired include significant financial
difficulties as evidenced through borrowing patterns or observed balances in other accounts and breaches of borrowing contracts such as
default events or breaches of borrowing covenants.



For financial assets assessed as credit-impaired
at the reporting date, the Company continues to recognize a loss allowance equal to lifetime expected credit losses.



For financial assets measured at amortized cost,
loss allowances for expected credit losses are presented in the consolidated statements of financial position as a deduction from the
gross carrying amount of the financial asset. Financial assets are written off when the Company has no reasonable expectations of recovering
all or any portion thereof.



Derecognition of financial assets



The Company derecognizes a financial asset when
its contractual rights to the cash flows from the financial asset expire.



Non-Derivative Financial Liabilities



Recognition and initial measurement



The Company recognizes a financial liability when
it becomes party to the contractual provisions of the instrument. At initial recognition, the Company measures financial liabilities at
their fair value plus transaction costs that are directly attributable to their issuance, with the exception of financial liabilities
subsequently measured at fair value through profit or loss for which transaction costs are immediately recorded in profit or loss.





16







Sangoma Technologies
Corporation

Notes to the consolidated
financial statements

For the years
ended June 30, 2023 and 2022

(in thousands
of US dollars, except per share data)








Where an instrument contains both a liability
and equity component, these components are recognized separately based on the substance of the instrument, with the liability component
measured initially at fair value and the equity component assigned the residual amount.



Classification and subsequent measurement



Subsequent to initial recognition, all financial
liabilities are measured at amortized cost using the effective interest rate method. Interest, gains and losses relating to a financial
liability are recognized in profit or loss.



Derecognition of financial liabilities



The Company derecognizes a financial liability
only when its contractual obligations are discharged, cancelled or expire.



Derivative Financial Liabilities



The Company holds interest rate swaps to hedge
its interest rate risk exposures on the variable-interest credit arrangement. At the inception of the hedging relationship, there is formal
designation and documentation prepared by the Company of the hedging relationship between the hedging instruments and hedged items and
the risk management objective and strategy for undertaking the hedge including how the Company will assess whether the hedging relationship
meets the hedge effectiveness requirements. The Company assesses at the inception of the hedging relationship, and on ongoing basis, whether
the hedging relationship meets the hedge effectiveness requirements.



Recognition and initial measurement



The Company recognizes interest rate swaps at
fair value initially; attributable transaction costs are recognized in comprehensive loss as incurred.



Classification and subsequent measurement



Subsequent to initial recognition, interest rate
swaps are measured at fair value and the effective portion of changes in fair value of the derivative that is designated and meets the
definition of the hedge is recognized in accumulated other comprehensive loss. The amount recognized in other comprehensive loss is removed
and included in earnings in the same period as the hedged cash flows affect earnings under the same line item in the consolidated statements
of comprehensive loss as the hedged item. Any ineffective portion of changes in the fair value of the derivative is recognized immediately
in earnings.



(iv) Inventories



Parts and finished goods are stated at the lower
of cost and net realizable value. Inventory cost includes all expenses directly attributable to the manufacturing process, which include
the cost of materials. Costs of ordinary interchangeable items are assigned using weighted average cost method. Net realizable value is
the estimated selling price in the ordinary course of business less any applicable selling expenses.



(v) Property
and equipment



Property and equipment are stated at cost
less accumulated depreciation and impairment losses. Cost includes expenditures that are directly attributable to the acquisition of
the asset. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the Company and the cost can be
measured reliably. The carrying amount of a replaced asset is derecognized when replaced. Repairs and maintenance costs are charged
to the consolidated statements of loss and comprehensive loss during the period in which they are incurred.





17









Sangoma Technologies
Corporation

Notes to the consolidated
financial statements

For the years
ended June 30, 2023 and 2022

(in thousands
of US dollars, except per share data)








Depreciation is calculated on a straight-line
basis for all classes of property and equipment over their useful life as outlined below:

|                                                                |             |  |  |  | 
|--------------------------------------------------------------- | ----------- |  |  |  | 
|Leasehold improvements, tradeshow equipment, software and books | 5 years    
|Office furniture and computer equipment                         | 3 - 5 years
|Stockroom and production equipment                              | 3 - 7 years



Residual values, method of depreciation and useful
lives of the assets are reviewed annually and adjusted, if required.



Gains and losses on disposals of property and
equipment are determined by comparing the proceeds with the carrying amount of the asset and are included as part of other gains and losses
in the consolidated statements of loss and comprehensive loss.



(vi) Leases



At commencement of the contract, the Company evaluates
if the contract is a lease based on whether the contract conveys the right to control the use of a specific asset for a period of time
in exchange for a consideration. To determine whether the contract results in right of control, the Company assesses whether it has both
the right to direct the identified asset’s use and to obtain substantially all the economic benefits from that use.



Once the Company has determined that the contract
conveys the right to control the use of the asset, the Company recognizes a right-of-use asset and a lease liability at the lease commencement
date.



The asset is initially measured at cost which
comprises of the lease liability, lease payments made at or before the commencement date less any lease incentives. Subsequently the asset
is measured at net carrying value, which is cost less accumulated depreciation and impairment losses, adjusted for any remeasurement of
the lease liability. The assets are depreciated to the earlier of the end of the useful life of the right-of-use asset or the lease term
using the straight-line method as this most closely reflects the expected pattern of consumption of the future economic benefits. The
lease term includes periods covered by an option to extend if the Company is reasonably certain to exercise that option.



The lease liability is initially measured at the
present value of the future lease payments discounted using the Company’s incremental borrowing rate as the discount rate. Subsequently,
the lease liability is measured at amortized cost using the effective interest method. It is remeasured when there is a change in future
lease payments arising from a change in an index or rate, or if the Company changes its assessment of whether it will exercise a purchase,
extension or termination option.



The Company applies recognition exemptions for
short-term leases (leases with term less than 12 months) and low-dollar value leases.



The Company leases properties which make up the
entire right-of-use asset and lease liability balances.





18











Sangoma Technologies
Corporation

Notes to the consolidated
financial statements

For the years
ended June 30, 2023 and 2022

(in thousands
of US dollars, except per share data)








(vii) Intangible
assets



Intangible assets with finite lives that are
acquired separately are measured on initial recognition at cost, which comprises its purchase price plus any directly attributable costs
of preparing the asset for its intended use. Following initial recognition, such intangible assets are carried at cost less any accumulated
amortization on a straight-line basis over the following periods:

|                            |              |  |  |  | 
|--------------------------- | ------------ |  |  |  | 
|Purchased technology        | 6 - 10 years
|Customer relationships      | 3 - 10 years
|Brand                       | 6 - 10 years
|Other purchased intangibles | 3 - 10 years



Amortization expense is included in the consolidated statements of loss and comprehensive loss in general and administration expense.



The estimated useful life and amortization method
are reviewed annually, with the effect of any change in estimate being accounted for on a prospective basis. These assets are subject
to impairment testing as described below in Note 2(xviii).



(viii) Revenue
recognision



The Company derives its revenues primarily from
services and subscriptions, sale of products, and professional services. Revenues are recognized when control of these services is transferred
to the customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for products and services.



The Company determines revenue recognition through
the following steps:



·Identification
of the contract, or contracts, with a customer;

·Identification
of the performance obligations in the contract;

·Determination
of the transaction price;

·Allocation
of the transaction price to the performance obligations in the contract

·Recognition
of revenue when, or as, the Company satisfies a performance obligation.



The Company recognizes revenues as follows:



Product revenue



Product revenue primarily includes revenue generated
from sale of pre-configured phones, connectivity hardware and professional implementation services.



Revenue is recognized upon transfer of control
to the customer which is generally upon shipment from the Company’s warehouse.



Services revenue



Services revenue is generated from fees that provide
customers access to one or more of the Company’s software applications and related services and the rental for the hardware required
to deliver these services. These arrangements have contractual terms typically ranging from one month to seven years and include recurring
fixed fee subscription fees, variable usage-based fees for usage in excess of plan limits, one-time fees, recurring license and other
fees, derived from sales through our direct and indirect sales channels, including resellers and distributors.



Arrangements with customers do not provide the
customer with the right to take possession of the Company’s software at any time. Instead, customers are granted continuous access
to the services over the contractual period. The Company transfers control evenly over the contractual period by providing stand-ready
service. Accordingly, the fixed consideration related to subscription is recognized over time on a straight-line basis over the contract
term beginning on the date the Company’s service is made available to the customer. The Company may offer from time to time its
customers, services for no consideration during the initial months. Such discounts are recognized ratably over the term of the contract.



Fees for additional minutes of usage in excess of plan limits are deemed
to be variable consideration that meet the allocation exception for variable consideration as they are specific to the month that the
usage occurs.





19









|Sangoma Technologies Corporation                       
|-------------------------------------------------------
|Notes to the consolidated financial
    statements     
|For the years ended June 30, 2023
    and 2022         
|(in
    thousands of US dollars, except per share data)



The Company’s subscription contracts typically
allow the customers to terminate their services within the first 30 days and receive a refund for any amounts paid for the remaining contract
period. After the end of the termination period, the contract is non-cancellable and the customer is obligated to pay for the remaining
term of the contract. Accordingly, the Company considers the non-cancellable term of the contract to begin after the expiration of the
30 day termination period.



The Company records reductions to revenue for estimated sales returns
and customer credits at the time the related revenue is recognized. Sales returns and customer credits are estimated based on the Company’s
historical experience, current trends and the Company’s expectations regarding future experience. The Company monitors the accuracy
of its sales reserve estimates by reviewing actual returns and credits and adjusts them for its future expectations to determine the adequacy
of its current and future reserve needs. If actual future returns and credits differ from past experience, additional reserves may be
required.



Principal vs. Agent



A portion of the Company’s revenues are
generated through sales by resellers who offer add-ons which may not be controlled to the Company prior to transfer to the customer. The
Company does not recognize any revenue for these add-ons.



However, when the Company controls the performance
of these contractual obligations prior to the delivery to the customer, it records these revenues at the gross amount paid by the customer
with amounts retained by the resellers recognized as sales and marketing expenses. The Company assesses control of goods or services when
it is primarily responsible for fulfilling the promise to provide the good or service, has inventory risk and has discretion in establishing
the price.



(ix) Cost
of sales



Cost of product sales includes the cost of finished
goods inventory and costs related to shipping and handling. Cost of service sales include cost of delivery of service, third party carrier
charges, data center and software licenses.



(x) Foreign
currency



The Company and all of its significant wholly-owned
operating subsidiaries are measured in US dollar as the functional currency. Transactions in currencies other than USD are initially recorded
in the US dollar by applying the exchange rate prevailing at the date of the transaction. Monetary assets and liabilities denominated
in other than US dollar are revaluated at the foreign exchange rate at the reporting date. Foreign exchange differences arising on translation
are recognized in the consolidated statement of loss and comprehensive loss.



(xi) Interest
income



Interest income from financial assets is recognized
when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income
is accrued on the basis of time that has passed, by reference to the principal outstanding and at the effective interest rate applicable.



(xii) Share-based
payments



Under the Legacy Plan (as defined in note 17(ii)),
the Company grants stock options to its employees. Stock options vest over and expire after various periods of time. The general vesting
policy is 25% of the options vest on the first anniversary of the grant and the remainder vest in equal amounts every 3 months thereafter
until the fourth anniversary of the commencement date. The fair value of each tranche is measured at the date of grant using the Black-Scholes
option pricing model. Share-based compensation expense is recognized over the tranche’s vesting period based on the number of awards
expected to vest. The number of awards expected to vest is reviewed at least annually, with any impact being recognized immediately.



On December 13, 2022, the Company adopted
the Omnibus Equity Incentive Plan (the “Plan”), which replaces the Legacy Plan. No further grants will be made under the Legacy
Plan.





20









|Sangoma Technologies Corporation                       
|-------------------------------------------------------
|Notes to the consolidated financial statements         
|For the years ended June 30, 2023 and 2022             
|(in thousands of
    US dollars, except per share data)



Under the Omnibus Plan, the Company may grant
participants Options, Performance Share Units (PSUs), Restricted Share Units (RSUs) and Deferred Share Units (DSUs). The PSUs, RSUs and
DSUs are redeemable either for one common share or for an amount in cash equal to the fair market value of one common share (at the option
of the Company and as set out in the participant’s equity award agreement). All PSUs, RSUs and DSUs are accounted for as equity-settled
awards.



DSUs generally vest immediately and become
redeemable once a director no longer serves on the board of the Company. RSUs vest over a three-year period after the date of grant.
The expense is measured based on the fair value of the awards at the grant date.



PSUs vest in full at the end of a three-year
period and the final amount is based 50% on market-based performance targets being met and 50% on non-market-based performance
targets, with the conversion ratio for vested PSUs being from 0% to 150%. The expense related to the PSUs is measured (i) based
on the fair value of the awards at the grant date using the Monte Carlo simulation, with respect to the 50% based on the
market-based performance targets, and (ii) based on the fair value of the awards at the grant date using the volume weighted
average trading price per share on the TSX during the immediately preceding five trading days.



(xiii) Income
taxes and deferred taxes



The income tax provision comprises current and
deferred tax. Income tax is recognized in the consolidated statements of loss and comprehensive loss except to the extent that it relates
to items recognized directly in equity, in which case the income tax is also recognized directly in equity.



Current tax is the expected tax payable on the
taxable income for the year, using tax rates enacted, or substantively enacted, at the end of the reporting period, and any adjustment
to tax payable in respect of previous years.



Deferred tax is recognized in respect of temporary
differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements.
Deferred tax is determined on a non-discounted basis using tax rates and laws that have been enacted or substantively enacted at the end
of the reporting period and are expected to apply when the asset is realized or liability is settled. Deferred tax assets are recognized
for deductible temporary differences, unused tax losses and other income tax deductions to the extent that it is probable the Company
will have taxable loss against which those deductible temporary differences, unused tax losses and other income tax deductions can be
utilized.



The extent to which deductible temporary differences,
unused tax losses and other income tax deductions are expected to be realized is reassessed at the end of each reporting period.



In a business combination, temporary differences
arise as a result of differences in the fair values of identifiable assets and liabilities acquired and their respective tax bases. Deferred
tax assets and liabilities are recognized for the tax effects of these differences. Deferred tax assets and liabilities are not recognized
for temporary differences arising from goodwill or from the initial recognition of assets and liabilities acquired in a transaction other
than a business combination which do not affect either accounting or taxable income or loss.



(xiv) Research
and development expenditures



The Company qualifies for certain investment tax
credits related to its research and development activities in Canada. Research costs are expensed as incurred and are reduced by related
investment tax credits, which are recognized when it is probable that they will be realized.





21









|Sangoma Technologies Corporation                       
|-------------------------------------------------------
|Notes to the consolidated financial statements         
|For the years ended June 30, 2023 and 2022             
|(in thousands of
    US dollars, except per share data)



Costs that are directly attributable to the development
phase of identified new products are recognized as intangible assets and amortized over a useful life of three years provided they meet
the following recognition requirements:



|• | Completion of the intangible asset is technically feasible so that it will be available for use or sale.                                                                                                                                                                                           
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|• | The Company intends to complete the intangible asset and use or sell it and also has the ability to use or sell it.                                                                                                                                                                                
|• | The intangible asset will generate probable future economic benefits. Among other things, this requires that there is a market for the
output from the intangible asset or for the intangible asset itself, or, if it is to be used internally, the asset will be used in generating
such benefits.
|• | There are adequate technical, financial and other resources to complete the development and to use or sell the intangible asset.                                                                                                                                                                   
|• | The expenditure attributable to the intangible asset during its development can be measured reliably.                                                                                                                                                                                              



Development costs not meeting these criteria for
capitalization are expensed as incurred.



Directly attributable costs include employee costs
incurred on software development along with an appropriate portion of relevant overheads and borrowing costs (if any). Internally generated
software development costs recognized as intangible assets are subject to the same subsequent measurement method as externally acquired
software licenses. These assets are subject to impairment testing as described below in Note 2(xviii).



Any gain or loss arising on the disposal of an
intangible asset is determined as the difference between the proceeds and the carrying amount of the asset and is recognized in profit
or loss within “other income” or “other expenses”.



(xv) Foreign
currency hedging



The Company periodically enters into forward foreign
currency exchange contracts to hedge the cash flow risk associated with forecasted transactions in foreign currencies and foreign-currency
denominated balances. The Company does not enter into derivative contracts for speculative purposes. The contracts, which have not been
designated as hedges for accounting purposes, are marked to market each period. The resulting gain or loss is recorded as foreign currency
exchange (gain) loss on the consolidated statements of loss and comprehensive loss. The Company does not hold any forward foreign currency
exchange contracts as at June 30, 2023, and June 30, 2022.



(xvi) Investment
tax credits



Investment tax credits (“ITCs”) are
recognized where there is reasonable assurance that the ITCs will be received, and all attached conditions will be complied with. When
the ITCs relates to an expense item, it is netted against the related expense. Where the ITCs relates to an asset, it reduces the carrying
amount of the asset. The ITCs are then recognized as income over the useful life of a depreciable asset by way of a reduced depreciation
charge. The Company is actively engaged in scientific research and development (“R&D”) and, accordingly, has previously
filed for ITC refunds under both the Canadian federal and Ontario provincial Scientific Research and Experimental Development (“SR&ED”)
tax incentive programs. The ITCs recorded in the accounts are based on management’s interpretation of the Income Tax Act of Canada,
provisions which govern the eligibility of R&D costs. The claims are subject to review by the Canada Revenue Agency and the Minister
of Revenue for Ontario before the refunds can be released.



(xvii) Goodwill



Goodwill represents the excess of the acquisition
cost in a business combination over the fair value of the Company’s share of the identifiable net assets acquired. Goodwill is carried
at cost less accumulated impairment losses.





22









|Sangoma Technologies Corporation                       
|-------------------------------------------------------
|Notes to the consolidated financial statements         
|For the years ended June 30, 2023 and 2022             
|(in thousands of
    US dollars, except per share data)



(xviii) Impairment
testing of goodwill and long-lived assets



For purposes of assessing impairment under IFRS,
assets are grouped at the lowest levels for which there are largely independent cash inflows (cash-generating unit). The Company has one
cash generating unit and intangible assets not yet available for use are tested for impairment at least annually. All other long-lived
assets and finite life intangible assets are tested for impairment whenever events or changes in circumstances indicate that the carrying
amount may not be recoverable. An impairment loss is recognized for the amount by which the asset’s or cash-generating unit’s
carrying amount exceeds its recoverable amount, which is the higher of fair value less costs to sell or value-in-use. To determine the
value-in-use, management estimates expected future cash flows from the cash-generating unit and determines a suitable pre-tax discount
rate in order to calculate the present value of those cash flows. The data used for impairment testing procedures are directly linked
to the Company’s latest approved budget, adjusted as necessary to exclude the effects of future reorganizations and asset enhancements.
Discount factors have been determined for the cash-generating unit and reflect its risk profile as assessed by management.



Impairment losses for the cash-generating unit
reduce first the carrying amount of any goodwill allocated to that cash-generating unit, with any remaining impairment loss charged pro
rata to the other assets in the cash-generating unit. In allocating an impairment loss, the Company does not reduce the carrying amount
of an asset below the highest of its fair value less costs of disposal or its value in use and zero. With the exception of goodwill, all
assets are subsequently reassessed for indications that an impairment loss previously recognized may no longer exist. An impairment charge
is reversed if the assets’ recoverable amount exceeds its carrying amount only to the extent the new carrying amount does not exceed
the carrying value of the asset had it not originally been impaired.



(xix) Provisions



Provisions represent liabilities of the Company
for which the amount or timing is uncertain. Provisions are recognized when the Company has a present legal or constructive obligation
as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and the amount can
be reliably estimated. Provisions are not recognized for future operating losses. Where material, provisions are measured at the present
value of the expected expenditures to settle the obligation using a discount rate that reflects current market assessments of the time
value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognized as interest
expense.



(xx) Earnings
per Share



Basic earnings per share is computed by dividing
the net loss available to common shareholders by the weighted average number of shares outstanding during the reporting period. Diluted
earnings per share is computed similarly to basic earnings per share except that the weighted average number of shares outstanding is
increased to include additional shares for the assumed exercise of stock options and warrants. The average number of shares is calculated
by assuming that outstanding conversions were exercised and that the proceeds from such exercises were used to acquire common shares at
the average market price during the reporting period.





23









|Sangoma Technologies Corporation                       
|-------------------------------------------------------
|Notes to the consolidated financial statements         
|For the years ended June 30, 2023 and 2022             
|(in thousands of
    US dollars, except per share data)



Share consolidation (reverse stock split)



On November 2, 2021, the Company
implemented a consolidation of its outstanding Common Shares (the “reverse stock split”) on the basis of one new Common
Share for every seven currently outstanding Common Shares (the “Consolidation Ratio”). At the special meeting of the
Company’s shareholders held on September 23, 2021, the Company’s shareholders granted the Company’s Board of
Directors discretionary authority to implement a consolidation of the issued and outstanding common shares of the Company on the
basis of a consolidation ratio of up to 20 pre-consolidation common shares for one post-consolidation common share. The Board of
Directors selected a share consolidation ratio of seven pre-consolidation common shares for one post-consolidation common share. The
Company’s common shares began trading on the TSX on a post-consolidation basis under the Company’s existing trade symbol
"STC" on November 8, 2021. In accordance with IFRS, the change has been applied retrospectively.



The reverse stock split did not cause an adjustment
to the par value or the authorized shares of the common stock. As a result of the reverse stock split, the Company further adjusted the
share amounts and exercise prices under its option plans and outstanding options.



IAS 33 Earnings per Share (paragraph 64) requires
retrospective adjustment of earnings per share for a reverse stock split that occurs subsequent to the balance sheet date but before the
date of authorization of the consolidated financial statements. As a result, all disclosures of common shares, per common share data and
data related to options in the accompanying consolidated financial statements and related notes reflect this reverse stock split for all
years presented.



(xxi) Business
combinations



On the acquisition of a business, the acquisition
method of accounting is used, whereby the purchase consideration is allocated to the identifiable assets and liabilities on the basis
of fair value as of the date of acquisition. Provisional fair values allocated at a reporting date are finalized as soon as the relevant
information is available, within a period not to exceed twelve months from the acquisition date with retroactive restatement of the impact
of adjustment to those provisional fair values effective as at the acquisition date. Incremental costs related to acquisitions are expensed
as incurred. When the consideration transferred by the Company in a business combination includes assets or liabilities resulting from
a contingent consideration arrangement, the contingent consideration is measured at its acquisition-date fair value and included as part
of the consideration transferred in a business combination. Changes in the fair value of the contingent consideration that qualify as
measurement period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill. Measurement period adjustments
are adjustments that arise from additional information obtained during the measurement period (which cannot exceed one year from the acquisition
date) about facts and circumstances that existed at the acquisition date. The subsequent accounting for changes in the fair value of the
contingent consideration that do not qualify as measurement period adjustments depends on how the contingent consideration is classified.
Contingent consideration that is classified as equity is not re-measured at subsequent reporting dates and its subsequent settlement is
accounted for within equity. Contingent consideration that is classified as an asset or a liability is re-measured at subsequent reporting
dates in accordance with IFRS 9 Financial Instruments, or IAS 37 Provisions, Contingent Liabilities and Contingent Assets, as appropriate,
with the corresponding gain or loss being recognized in profit or loss.



3. Significant accounting judgements,
estimates and uncertainties



The preparation of consolidated financial statements in accordance
with IFRS requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements
and notes to the consolidated financial statements. These estimates are based on management’s best knowledge of current events and
actions the Company may undertake in the future. Actual results could differ from those estimates. Estimates and underlying assumptions
are reviewed on an ongoing basis. Revisions to the accounting estimates are recognized in the period in which the estimates are revised.





24









|Sangoma Technologies Corporation                       
|-------------------------------------------------------
|Notes to the consolidated financial statements         
|For the years ended June 30, 2023 and 2022             
|(in thousands of
    US dollars, except per share data)



In December 2019, there was a global outbreak
of coronavirus, identified as “COVID-19”, which has had a significant impact on businesses worldwide, and there continues
to be uncertainty regarding the full impact, duration and pace of recovery from the COVID-19 pandemic on the Company’s operations
and markets, due to the evolving nature of the virus and the global economic slowdown. Despite these uncertainties, the Company believes
it is well equipped to handle the uncertainty and has taken several proactive steps in an attempt to better manage the challenges of the
COVID-19 pandemic including potential future impact on the Company’s assets, cash flows and liquidity, operations and financial
reporting.



Significant areas requiring the Company to make
estimates include goodwill impairment testing and recoverability of long-lived assets, business combinations, income taxes, estimated
useful life of long-lived assets, internally generated development costs, the fair value of share-based payments, provision for expected
credit losses, inventory obsolescence, investment tax credits receivable, warranty provision, sales returns and allowances provision,
and stock rotation provision. These estimates and judgments are further discussed below:



(i)Goodwill
impairment testing and recoverability of long-lived assets



Goodwill and long-lived assets are reviewed annually
for impairment, or more frequently when there are indicators that impairment may have occurred, by comparing the carrying value to its
recoverable amount. The recoverable amounts of the cash-generating unit was estimated based on an assessment of value in use using a discounted
cash flow approach and fair value less costs to sell. The approach uses cash flow projections based upon a financial forecast approved
by management, covering a four-year period. Cash flows for the years thereafter are extrapolated using the estimated terminal growth rate
for value in use impairment analysis. Cash flows for the terminal period for fair value less costs to sell impairment analysis is determined
using an exit multiple. The risk premiums expected by market participants related to uncertainties about the industry and assumptions
relating to future cash flows may differ or change quickly, depending on economic conditions and other events.



(ii)Business
combinations



In a business combination, all identifiable assets,
liabilities and contingent liabilities acquired are recorded at their fair values. One of the most significant estimates relates to the
determination of the fair value of these assets and liabilities. For any intangible asset identified, depending on the type of intangible
asset and the complexity of determining its fair value, an independent valuation expert or management may develop the fair value, using
appropriate valuation techniques, which are generally based on a forecast of the total expected future net cash flows. The evaluations
are linked closely to the assumptions made by management regarding the future performance of the assets concerned and any changes in the
discount rate applied. All acquisitions have been accounted for using the acquisition method.



Certain fair values may be estimated at the acquisition
date pending confirmation or completion of the valuation process. Where provisional values are used in accounting for a business combination,
they may be adjusted retrospectively in subsequent periods. The measurement period ends as soon as the Company receives the information
it was seeking about facts and circumstances that existed as of the acquisition date or learns that more information is not obtainable.
However, the measurement period shall not exceed one year from the acquisition date.





25









|Sangoma Technologies Corporation                       
|-------------------------------------------------------
|Notes to the consolidated financial statements         
|For the years ended June 30, 2023 and 2022             
|(in thousands of
    US dollars, except per share data)



(iii)Income
taxes



At the end of each reporting period, the Company
assesses whether the realization of deferred tax benefits is sufficiently probable to recognize deferred tax assets. This assessment requires
the exercise of judgment on the part of management with respect to, among other things, benefits that could be realized from available
income tax strategies and future taxable income, as well as other positive and negative factors. The recorded amount of total deferred
tax assets could be reduced if estimates of projected future taxable income and benefits from available income tax strategies are lowered,
or if changes in current income tax regulations are enacted that impose restrictions on the timing or extent of the Company’s ability
to utilize deferred tax benefits.



The Company’s effective income tax rate
can vary significantly period-to-period for various reasons, including the mix and volume of business in lower income tax jurisdictions
and in jurisdictions for which no deferred income tax assets have been recognized because management believed it was not probable that
future taxable profit would be available against which income tax losses and deductible temporary differences could be utilized.



(iv) Estimated
useful lives of long-lived assets



Management reviews useful lives of depreciable
assets at each reporting date. Management assessed that the useful lives represent the expected utilization in terms of duration of the
assets to the Company. Actual utilization, however, may vary due to technical obsolescence, particularly relating to software and information
technology equipment.



(v)Internally
generated development costs



Management monitors the progress of internal research
and development projects and uses judgment to distinguish research from the development phase. Expenditures during the research phase
are expensed as incurred. Development costs are recognized as an intangible asset when the Company can demonstrate certain criteria listed
in Note 2((xiv)). Otherwise, research and development costs are expensed as incurred.



(vi)Fair value
of share-based payments



The fair value of all share-based payments granted
are determined using the Black-Scholes option pricing model and Monte Carlo simulation which incorporates assumptions regarding risk-free
interest rates, dividend yield, expected volatility, estimated forfeitures, and the expected life of the options. The Company has a significant
number of options outstanding and expects to continue to make grants.



(vii)Provision
for expected credit losses (“ECLs”)



The Company is exposed to credit risk associated
with its trade receivables. This risk is reduced by having customers’ trade receivables insured by Export Development Canada (“EDC”)
wherever possible. Management reviews the trade receivables at each reporting date in accordance with IFRS 9. The ECL model requires considerable
judgment, including consideration of how changes in economic factors affect ECLs, which are determined on a probability-weighted basis.
IFRS 9 outlines a three-stage approach to recognizing ECLs which is intended to reflect the increase in credit risks of a financial instrument
based on 1) 12-month expected credit losses or 2) lifetime expected credit losses. The Company measures provision for ECLs at an amount
equal to lifetime ECLs.





26









|Sangoma Technologies Corporation                       
|-------------------------------------------------------
|Notes to the consolidated financial statements         
|For the years ended June 30, 2023 and 2022             
|(in thousands of
    US dollars, except per share data)



(viii)Inventory
obsolescence



Inventory consists of parts and finished goods
recorded at the lower of cost and net realizable value. Inventory represents a significant portion of the asset base of the Company and
its value is reviewed at each reporting period. Inventories are written down to net realizable value when the cost of inventories is estimated
to be unrecoverable due to obsolescence, damage or slow movement. Actual net realizable value can vary from the estimated provision.



(ix)Investment
tax credits receivable



Investment tax credits are recorded based on management’s
estimate that all conditions attached to its receipt have been met. The Company has significant investment tax credits receivable and
expects to continue to apply for future tax credits as their research and development activities remain applicable. Therefore, the estimates
related to the recoverability of these investment tax credits are important to the Company’s financial position.



(x)Warranty
provision



The warranty provision represents management’s
best estimate of costs of product and service warranties at the time the product is installed or delivered. Therefore, the estimates and
assumptions related to costs of repairs and/or replacement costs to correct product failures impact the Company’s financial position.



(xi)Sales returns
and allowances provision



The sales returns and allowances provision represent
management’s best estimate of the value of the products sold in the current financial year that may be returned in a future year.



(xii)Stock rotation
provision



The stock rotation provision represents management’s
best estimate of the value of the products sold in the current financial year that may be rotated in a future year.



(xiii)Fair value
of interest rate swaps



The estimated fair values of derivative instruments
resulting in financial assets and liabilities, by their very nature, are subject to measurement uncertainty. The Company determines the
fair value of interest rate swaps based on the present value of projected future cash flows using the implied zero-coupon forward swap
yield curve. The change in the difference between the discounted cash flow streams for the hedged item and the hedging item is deemed
to be hedge ineffectiveness and is recorded in the consolidated statements of loss and comprehensive loss. The fair value of the interest
rate swap is based on forward yield curves, which are observable inputs provided by banks and available in other public data sources and
are classified within Level 2.



(xiv)Contract
costs



Contract costs include customer acquisition costs,
which consist primarily of sales commissions paid to sales personnel. These costs are deferred as a contract cost asset as they are considered
to be incremental costs incurred to obtain a customer contract and amortized on a straight-line basis over a period consistent with the
pattern of transfer of the products and services to which the asset relate, including specifically identifiable expected renewals. The
Company has determined this to be an average of 4.2 years. The Company uses judgement to determine the period of benefit by taking into
consideration its customer contracts and customer life, life of its revenue generating platform technology and other factors.





27









|Sangoma Technologies Corporation                       
|-------------------------------------------------------
|Notes to the consolidated financial statements         
|For the years ended June 30, 2023 and 2022             
|(in thousands of
    US dollars, except per share data)



4. Financial instruments



The fair values of the cash and cash equivalents,
trade and other receivables, contract assets, other current assets, accounts payable and accrued liabilities approximate their carrying
values due to the relatively short-term nature of these financial instruments. The fair values of operating facility and loans approximate
their carrying values due to variable interest loans or fixed rate loan, which represent market rate. Derivative assets and liabilities
and consideration payable are recorded at fair value.



Cash and cash equivalents are comprised of:



|                         |  | June 30 |        |  | June 30 | 
|------------------------ |  | ------- | ------ |  | ------- | 
|                         |  | 2023    |        |  | 2022    | 
|                         |  | $       |        |  | $       | 
|Cash at bank and on hand |  |         | 11,156 |  |         | 



Cash includes demand deposits with financial institutions
and cash equivalents consist of short-term, highly liquid investments purchased with original maturities of three months or less. As at
June 30, 2023 and June 30, 2022 the Company had no cash equivalents.



Total interest income and interest expense for
financial assets or financial liabilities that are not at fair value through profit or loss can be summarized as follows:



|                       |  |      |       |  | June 30 |  |       | June 30 | 
|---------------------- |  | ---- | ----- |  | ------- |  | ----- | ------- | 
|                       |  | Note |       |  | 2023    |  |       | 2022    | 
|                       |  |      |       |  | $       |  |       | $       | 
|Interest income        |  |      |       |  |         |  | (41   | )       | 
|Interest expense       |  |      | 15    |  |         |  | 5,897 |         | 
|Accretion expense      |  |      | 8, 14 |  |         |  | 911   |         | 
|Interest expense (net) |  |      |       |  |         |  | 6,767 |         | 



The Company examines the various financial instrument
risks to which it is exposed and assesses the impact and likelihood of those risks. These risks may include credit risk, liquidity risk,
foreign currency risk, interest rate risk and market risk.





28









|Sangoma Technologies Corporation                       
|-------------------------------------------------------
|Notes to the consolidated financial statements         
|For the years ended June 30, 2023 and 2022             
|(in thousands of
    US dollars, except per share data)



Credit risk



Credit risk is the risk of financial loss to the
Company if a customer or counterparty to a financial instrument fails to meet its obligations. Where possible, the Company uses an insurance
policy with Export Development Canada (“EDC”) for its trade receivables to manage this risk and minimize any exposure.



|                                                 |  |      |    |  | June 30 |  |        | June 30 | 
|------------------------------------------------ |  | ---- | -- |  | ------- |  | ------ | ------- | 
|                                                 |  | Note |    |  | 2023    |  |        | 2022    | 
|                                                 |  |      |    |  | $       |  |        | $       | 
|Trade receivables                                |  |      |    |  |         |  | 16,060 |         | 
|Receivable related to working capital adjustment |  |      | 20 |  |         |  | 5,845  |         | 
|Trade and other receivables                      |  |      |    |  |         |  | 21,905 |         | 



During the year ended June 30, 2023, the
parties finalized the working capital provision in respect of the acquisition of NetFortris and the company received $2,053 from the escrow
account, consisting of $351 in cash and $1,702 in the form of 142,124 common shares. The remaining balance of $5,845 as at June 30,
2023 relates to certain indemnification assets recorded in respect of liabilities assumed on the acquisition of Netfortris (June 30,
2022 - $7,898).



The Company’s maximum exposure to credit risk for its trade receivables
is summarized as follows with some of the over 90-day receivable not being covered by EDC:



|                               |  | June 30 |        |   | June 30 | 
|------------------------------ |  | ------- | ------ | - | ------- | 
|                               |  | 2023    |        |   | 2022    | 
|                               |  | $       |        |   | $       | 
|Trade receivables aging:       |  |         |        |   |         | 
|0-30 days                      |  |         | 11,759 |   |         | 
|31-90 days                     |  |         | 3,313  |   |         | 
|Greater than 90 days           |  |         | 2,554  |   |         | 
|                               |  |         | 17,626 |   |         | 
|Expected credit loss provision |  |         | (1,566 | ) |         | 
|                               |  |         | 16,060 |   |         | 





29









|Sangoma Technologies Corporation                       
|-------------------------------------------------------
|Notes to the consolidated financial statements         
|For the years ended June 30, 2023 and 2022             
|(in thousands of
    US dollars, except per share data)



The movement in the provision for expected credit
losses can be reconciled as follows:



|                                                             |  | June 30 |        |   | June 30 | 
|------------------------------------------------------------ |  | ------- | ------ | - | ------- | 
|                                                             |  | 2023    |        |   | 2022    | 
|                                                             |  |         | $      |   |         | 
|Expected credit loss provision:                              |  |         |        |   |         | 
|Expected credit loss provision, beginning balance            |  |         | (2,281 | ) |         | 
|Net change in expected credit loss provision during the year |  |         | 715    |   |         | 
|Expected credit loss provision, ending balance               |  |         | (1,566 | ) |         | 



The Company applies the simplified approach
to provide for expected credit losses as prescribed by IFRS 9, which permits the use of the lifetime expected loss provision for all
trade receivables and contract assets. The expected credit loss provision is based on the Company’s historical collections and
loss experience and incorporates forward-looking factors, where appropriate.



The provision matrix below shows the expected
credit loss rate for each aging category of trade receivables.



|                               |  | June 30, 2023 |       
|------------------------------ |  | ------------- | ------
|                               |  |               |       
|                               |  |               |       
|                               |  |               |       
|                               |  |               | Total 
|Default rates                  |  |               |       
|Trade receivables              |  | $             | 17,626
|Expected credit loss provision |  | $             | 1,566 



|                               |  | June 30, 2022 |       
|------------------------------ |  | ------------- | ------
|                               |  |               |       
|                               |  |               |       
|                               |  |               |       
|                               |  |               | Total 
|Default rates                  |  |               |       
|Trade receivables              |  | $             | 18,326
|Expected credit loss provision |  | $             | 2,281 



Substantially all of the Company’s cash
and cash equivalents are held with major Canadian and US financial institutions and thus the exposure to credit risk is considered insignificant.
Management actively monitors the Company’s exposure to credit risk under its financial instruments, including with respect to trade
receivables.



Liquidity risk



Liquidity risk is the risk that the Company will
not be able to meet its obligations associated with financial liabilities. The Company has a planning and budgeting process in place by
which it anticipates and determines the funds required to support its normal operating requirements. The Company coordinates this planning
and budgeting process with its financing activities through its capital management process.





30









|Sangoma Technologies Corporation                       
|-------------------------------------------------------
|Notes to the consolidated financial statements         
|For the years ended June 30, 2023 and 2022             
|(in thousands of
    US dollars, except per share data)



The Company holds sufficient cash and cash equivalents
and working capital, maintained through stringent cash flow management, to ensure sufficient liquidity is maintained. The following are
the undiscounted contractual maturities of significant financial liabilities of the Company as at June 30, 2023:



|                                         |  | within 12 months |        |  | 12-24 months |  |        | 24-36 months |  |  | >36 months |  |  | Total |       
|---------------------------------------- |  | ---------------- | ------ |  | ------------ |  | ------ | ------------ |  |  | ---------- |  |  | ----- | ------
|                                         |  |                  | $      |  |              |  | $      |              |  |  | $          |  |  |       | $     
|Accounts payable and accrued liabilities |  |                  | 24,077 |  |              |  | -      |              |  |  | -          |  |  |       | -     
|Sales tax payable                        |  |                  | 5,594  |  |              |  | -      |              |  |  | -          |  |  |       | -     
|Consideration payable                    |  |                  | 1,894  |  |              |  | -      |              |  |  | -          |  |  |       | -     
|Operating facility and loans             |  |                  | 17,700 |  |              |  | 19,875 |              |  |  | 22,050     |  |  |       | 41,200
|Lease obligations on right of use assets |  |                  | 3,097  |  |              |  | 3,084  |              |  |  | 2,308      |  |  |       | 7,353 
|Other non-current liabilities            |  |                  | -      |  |              |  | -      |              |  |  | -          |  |  |       | 766   
|                                         |  |                  | 52,362 |  |              |  | 22,959 |              |  |  | 24,358     |  |  |       | 49,319



Foreign currency risk



A portion of the Company’s transactions
occur in a foreign currency (Canadian Dollars (CAD), Euros (EUR), and Great British Pounds (GBP), Hong Kong Dollars (HKD), Indian
Rupees (INR), Philippine Peso (PHP), Australian Dollar (AUD), and Columbia Peso (COP) , therefore, the Company is exposed to foreign currency
risk at the end of the reporting period through its foreign denominated cash, trade receivables, contract assets, accounts payable and
accrued liabilities, and operating facility and loans. As at June 30, 2023, a 10% depreciation or appreciation of the CAD, EUR, GBP,
HKD, INR, PHP, AUD and COP currencies against the U.S. dollar would have resulted in an approximate $76 (June 30, 2022 - $59)
increase or decrease, respectively, in total comprehensive loss.



Interest rate risk



The Company’s exposure to interest rate
fluctuations is with its credit facility (Note 15) which bears interest at a floating rate. As at June 30, 2023, a change in the
interest rate of 1% per annum would have an impact of approximately $779 (June 30, 2022 - $522) per annum in finance costs. The Company
also entered an interest rate swap arrangement for its loan facility (Note 15) to manage the exposure to changes in SOFR-rate based interest
rate. The fair value of the interest rate swaps was estimated based on the present value of projected future cash flows using the SOFR
forward rate curve. The model used to value the interest rate swaps included inputs of readily observable market data, a level 2 input.
As described in detail in Note 15, the fair value of the interest rate swaps was a current asset of $1,218 and non-current asset of $768
on June 30, 2023 (June 30, 2022 - current asset of $648 and non-current asset of $700).



5. Capital management



The Company’s objectives in managing capital
are to safeguard the Company’s assets, to ensure sufficient liquidity to sustain the future development of the business via advancement
of its significant research and development efforts, to conservatively manage financial risk and to maximize investor, creditor, and market
confidence. The Company considers its capital structure to include its shareholders’ equity and operating facilities and loans.
Working capital is optimized via stringent cash flow policies surrounding disbursement, foreign currency exchange and investment decision-making.
There have been no changes in the Company’s approach to capital management during the year and apart from the financial covenants
as discussed in Note 15, the Company is not subject to any other capital requirements imposed by external parties.





31









|Sangoma Technologies Corporation                       
|-------------------------------------------------------
|Notes to the consolidated financial statements         
|For the years ended June 30, 2023 and 2022             
|(in thousands of
    US dollars, except per share data)



6. Inventories



Inventories recognized in the consolidated statements
of financial position are comprised of:



|                             |  | June 30 |        |   | June 30 | 
|---------------------------- |  | ------- | ------ | - | ------- | 
|                             |  | 2023    |        |   | 2022    | 
|                             |  |         | $      |   |         | 
|Finished goods               |  |         | 13,860 |   |         | 
|Parts                        |  |         | 5,234  |   |         | 
|                             |  |         | 19,094 |   |         | 
|Provision for obsolescence   |  |         | (1,124 | ) |         | 
|Net inventory carrying value |  |         | 17,970 |   |         | 



During the year ended June 30, 2023, inventories
in the amount of $40,473 (June 30, 2022 - $42,585) were included in cost of sales.





32









|Sangoma Technologies Corporation                       
|-------------------------------------------------------
|Notes to the consolidated financial statements         
|For the years ended June 30, 2023 and 2022             
|(in thousands of
    US dollars, except per share data)



7. Property and equipment



|                                        |  |      |  | Office furniture |   |              |   | Stockroom      |   |           |  |              |   |        |  
|--------------------------------------- |  | ---- |  | ---------------- | - | ------------ | - | -------------- | - | --------- |  | ------------ | - | ------ | -
|                                        |  |      |  | and computer     |   | Software and |   | and production |   | Tradeshow |  | Leasehold    |   |        |  
|                                        |  | Note |  | equipment        |   | books        |   | equipment      |   | equipment |  | improvements |   | Total  |  
|                                        |  |      |  | $                |   | $            |   | $              |   | $         |  | $            |   | $      |  
|Cost                                    |  |      |  |                  |   |              |   |                |   |           |  |              |   |        |  
|Balance at July 1, 2021                 |  |      |  | 3,329            |   | 417          |   | 6,255          |   | 47        |  | 348          |   | 10,396 |  
|Additions through business combinations |  | 20   |  | 540              |   | 2            |   | 3,619          |   | -         |  | 11           |   | 4,172  |  
|Additions                               |  |      |  | 893              |   | 41           |   | 808            |   | -         |  | 126          |   | 1,868  |  
|Disposals                               |  |      |  | (25              | ) | (2           | ) | (231           | ) | -         |  | (10          | ) | (268   | )
|Balance at June 30, 2022                |  |      |  | 4,737            |   | 458          |   | 10,451         |   | 47        |  | 475          |   | 16,168 |  
|Additions                               |  |      |  | 846              |   | -            |   | 3,170          |   | -         |  | -            |   | 4,016  |  
|Disposals                               |  |      |  | (217             | ) | -            |   | (754           | ) | -         |  | (25          | ) | (996   | )
|Balance at June 30, 2023                |  |      |  | 5,366            |   | 458          |   | 12,867         |   | 47        |  | 450          |   | 19,188 |  
|                                        |  |      |  |                  |   |              |   |                |   |           |  |              |   |        |  
|Accumulated depreciation                |  |      |  |                  |   |              |   |                |   |           |  |              |   |        |  
|Balance at July 1, 2021                 |  |      |  | 1,371            |   | 314          |   | 872            |   | 41        |  | 146          |   | 2,744  |  
|Depreciation expense                    |  |      |  | 1,081            |   | 99           |   | 1,889          |   | 6         |  | 78           |   | 3,153  |  
|Disposals                               |  |      |  | -                |   | -            |   | (2             | ) | -         |  | (1           | ) | (3     | )
|Balance at June 30, 2022                |  |      |  | 2,452            |   | 413          |   | 2,759          |   | 47        |  | 223          |   | 5,894  |  
|Depreciation expense                    |  |      |  | 976              |   | 21           |   | 3,670          |   | -         |  | 62           |   | 4,729  |  
|Disposals                               |  |      |  | (64              | ) | -            |   | (523           | ) | -         |  | -            |   | (587   | )
|Balance at June 30, 2023                |  |      |  | 3,364            |   | 434          |   | 5,906          |   | 47        |  | 285          |   | 10,036 |  
|                                        |  |      |  |                  |   |              |   |                |   |           |  |              |   |        |  
|Net book value as at:                   |  |      |  |                  |   |              |   |                |   |           |  |              |   |        |  
|Balance at June 30, 2022                |  |      |  | 2,285            |   | 45           |   | 7,692          |   | -         |  | 252          |   | 10,274 |  
|Balance at June 30, 2023                |  |      |  | 2,002            |   | 24           |   | 6,961          |   | -         |  | 165          |   | 9,152  |  



For the year ended June 30, 2023, depreciation
expense of $994 (June 30, 2022 - $1,289) was recorded in general and administration expense in the consolidated statements of loss
and comprehensive loss. Depreciation expense in the amount of $3,735 was included in cost of sales for the year ended June 30, 2023
(June 30, 2022 - $1,864).





33









|Sangoma Technologies Corporation                       
|-------------------------------------------------------
|Notes to the consolidated financial statements         
|For the years ended June 30, 2023 and 2022             
|(in thousands of
    US dollars, except per share data)



8. Leases: Right-of-use assets
and lease obligations



The Company’s lease obligations and right-of-use
assets are presented below:



|                                        |  | Note |    |  | Right-of-use assets | 
|--------------------------------------- |  | ---- | -- |  | ------------------- | 
|                                        |  |      |    |  |                     | 
|Present value of leases                 |  |      |    |  |                     | 
|Balance as at July 1, 2021              |  |      |    |  |                     | 
|Additions                               |  |      |    |  |                     | 
|Addition through business combination   |  |      | 20 |  |                     | 
|Terminations                            |  |      |    |  |                     | 
|Adjustments due to lease modification   |  |      |    |  |                     | 
|Balance at June 30, 2022                |  |      |    |  |                     | 
|Additions                               |  |      |    |  |                     | 
|Terminations                            |  |      |    |  |                     | 
|Balance at June 30, 2023                |  |      |    |  |                     | 
|Accumulated depreciation and repayments |  |      |    |  |                     | 
|Balance as at July 1, 2021              |  |      |    |  |                     | 
|Depreciation expense                    |  |      |    |  |                     | 
|Terminations                            |  |      |    |  |                     | 
|Balance at June 30, 2022                |  |      |    |  |                     | 
|Depreciation expense                    |  |      |    |  |                     | 
|Terminations                            |  |      |    |  |                     | 
|Balance at June 30, 2023                |  |      |    |  |                     | 
|Net book value as at:                   |  |      |    |  |                     | 
|June 30, 2022                           |  |      |    |  |                     | 
|June 30, 2023                           |  |      |    |  |                     | 





34









|Sangoma Technologies Corporation                       
|-------------------------------------------------------
|Notes to the consolidated financial statements         
|For the years ended June 30, 2023 and 2022             
|(in thousands of
    US dollars, except per share data)



|                                       |  | Note |    |  | Lease Obligations | 
|-------------------------------------- |  | ---- | -- |  | ----------------- | 
|                                       |  |      |    |  |                   | 
|Present value of leases                |  |      |    |  |                   | 
|Balance as at July 1, 2021             |  |      |    |  |                   | 
|Additions                              |  |      |    |  |                   | 
|Addition through business combination  |  |      | 20 |  |                   | 
|Adjustments due to lease modification  |  |      |    |  |                   | 
|Repayments                             |  |      |    |  |                   | 
|Accretion expense                      |  |      |    |  |                   | 
|Terminations                           |  |      |    |  |                   | 
|Balance at June 30, 2022               |  |      |    |  |                   | 
|Additions                              |  |      |    |  |                   | 
|Adjustments due to lease modification  |  |      |    |  |                   | 
|Repayments                             |  |      |    |  |                   | 
|Accretion expense                      |  |      |    |  |                   | 
|Terminations                           |  |      |    |  |                   | 
|Effects of movements on exchange rates |  |      |    |  |                   | 
|Balance at June 30, 2023               |  |      |    |  |                   | 
|Lease Obligations - Current            |  |      |    |  |                   | 
|Lease Obligations - Non-current        |  |      |    |  |                   | 
|                                       |  |      |    |  |                   | 



(1)Includes the
impact of recognition exemptions including those for short-term and low-dollar value leases; includes the impact of judgment applied
with regard to renewal options in the lease terms in which the Company is a lessee.



(2)Right-of-use
assets opening balance includes the impact of estimated restoration costs.



(3)Addition through
business combination represents the right-of-use asset and leased obligation of the leased office buildings of NetFortris Corporation
which was acquired on March 28, 2022.



|                                                                             |  | June 30 |       |   | June 30 | 
|---------------------------------------------------------------------------- |  | ------- | ----- | - | ------- | 
|Amounts recognized in consolidated statements of loss and comprehensive loss |  | 2023    |       |   | 2022    | 
|                                                                             |  |         | $     |   |         | 
|Depreciation charge on right-of-use assets                                   |  |         | 3,778 |   |         | 
|Interest expense on lease obligations                                        |  |         | 476   |   |         | 
|Income from sub-leasing right-of-use assets                                  |  |         | (90   | ) |         | 
|Expenses relating to leases of low-value assets                              |  |         | 99    |   |         | 





35









Sangoma Technologies Corporation

Notes to the consolidated
financial statements

For the years
ended June 30, 2023 and 2022

(in
thousands of US dollars, except per share data)



9. Intangible assets



|                         |  |      |  |  |            |         |  |               |  |         |       |  |  | Other       |  |  |       |      
|------------------------ |  | ---- |  |  | ---------- | ------- |  | ------------- |  | ------- | ----- |  |  | ----------- |  |  | ----- | -----
|                         |  |      |  |  | Purchased  |         |  | Customer      |  |         |       |  |  | purchased   |  |  |       |      
|                         |  | Note |  |  | technology |         |  | relationships |  |         | Brand |  |  | intangibles |  |  | Total |      
|                         |  |      |  |  |            | $       |  |               |  | $       |       |  |  | $           |  |  |       | $    
|Cost                     |  |      |  |  |            |         |  |               |  |         |       |  |  |             |  |  |       |      
|Balance at July 1, 2021  |  |      |  |  |            | 95,323  |  |               |  | 112,256 |       |  |  | 6,787       |  |  |       | 2,748
|Business combinations    |  | 20   |  |  |            | 14,800  |  |               |  | 14,200  |       |  |  | -           |  |  |       | -    
|Balance at June 30, 2022 |  |      |  |  |            | 110,123 |  |               |  | 126,456 |       |  |  | 6,787       |  |  |       | 2,748
|Balance at June 30, 2023 |  |      |  |  |            | 110,123 |  |               |  | 126,456 |       |  |  | 6,787       |  |  |       | 2,748
|Accumulated amortization |  |      |  |  |            |         |  |               |  |         |       |  |  |             |  |  |       |      
|Balance at July 1, 2021  |  |      |  |  |            | 7,809   |  |               |  | 11,336  |       |  |  | 2,135       |  |  |       | 1,856
|Amortization expense     |  |      |  |  |            | 16,097  |  |               |  | 14,128  |       |  |  | 685         |  |  |       | 699  
|Balance at June 30, 2022 |  |      |  |  |            | 23,906  |  |               |  | 25,464  |       |  |  | 2,820       |  |  |       | 2,555
|Amortization expense     |  |      |  |  |            | 17,670  |  |               |  | 15,357  |       |  |  | 766         |  |  |       | 139  
|Balance at June 30, 2023 |  |      |  |  |            | 41,576  |  |               |  | 40,821  |       |  |  | 3,586       |  |  |       | 2,694
|Net book value as at:    |  |      |  |  |            |         |  |               |  |         |       |  |  |             |  |  |       |      
|Balance at June 30, 2022 |  |      |  |  |            | 86,217  |  |               |  | 100,992 |       |  |  | 3,967       |  |  |       | 193  
|Balance at June 30, 2023 |  |      |  |  |            | 68,547  |  |               |  | 85,635  |       |  |  | 3,201       |  |  |       | 54   



Amortization expense is included in general and
administration expense in the consolidated statements of loss and comprehensive loss). For the year ended June 30, 2023, amortization
expense was $33,932 (June 30, 2022 - $31,609).



36









Sangoma Technologies
Corporation

Notes to the consolidated
financial statements

For the years
ended June 30, 2023 and 2022

(in
thousands of US dollars, except per share data)



10. Development costs



|                         |  |  | $      |  
|------------------------ |  |  | ------ | -
|Cost                     |  |  |        |  
|Balance at July 1, 2021  |  |  | 3,360  |  
|Additions                |  |  | 3,237  |  
|Investment tax credits   |  |  | (628   | )
|Balance at June 30, 2022 |  |  | 5,969  |  
|Additions                |  |  | 7,250  |  
|Cost fully amortized     |  |  | (380   | )
|Investment tax credits   |  |  | (788   | )
|Balance at June 30, 2023 |  |  | 12,051 |  
|                         |  |  |        |  
|Accumulated amortization |  |  |        |  
|Balance at July 1, 2021  |  |  | (1,827 | )
|Amortization             |  |  | (1,281 | )
|Balance at June 30, 2022 |  |  | (3,108 | )
|Amortization             |  |  | (2,705 | )
|Cost fully amortized     |  |  | 331    |  
|Balance at June 30, 2023 |  |  | (5,482 | )



|                                  |  | June 30, 2023 |       |  | June 30, 2022 | 
|--------------------------------- |  | ------------- | ----- |  | ------------- | 
|                                  |  |               | $     |  |               | 
|Net capitalized development costs |  |               | 6,569 |  |               | 



Each period, additions to development costs are
recognized net of investment tax credits accrued. In addition to the above amortization, the Company has recognized $34,765 of engineering
expenditures as an expense during the year ended June 30, 2023 (June 30, 2022 - $32,877).





37









Sangoma
Technologies Corporation

Notes
to the consolidated financial statements

For
the years ended June 30, 2023 and 2022

(in
thousands of US dollars, except per share data)



11. Income tax



(a.) Amounts recognized in profit or loss:



|                                                  |  | June 30 |        |   | June 30 | 
|------------------------------------------------- |  | ------- | ------ | - | ------- | 
|                                                  |  | 2023    |        |   | 2022    | 
|                                                  |  |         | $      |   |         | 
|Current tax expense                               |  |         |        |   |         | 
|Current year                                      |  |         | 1,510  |   |         | 
|Changes in prior years position                   |  |         | (1,682 | ) |         | 
|                                                  |  |         | (172   | ) |         | 
|Deferred tax expense                              |  |         |        |   |         | 
|Origination and reversal of temporary differences |  |         | (2,236 | ) |         | 
|Reduction/increase in tax rate                    |  |         | (588   | ) |         | 
|Changes in prior years position                   |  |         | 174    |   |         | 
|Recognition of previously unrecognized tax losses |  |         | (110   | ) |         | 
|                                                  |  |         | (2,760 | ) |         | 



(b.) Amounts recognized in OCI:



|                                                        |  | June 30, 2023 |     |  | June 30, 2022          | 
|------------------------------------------------------- |  | ------------- | --- |  | ---------------------- | 
|                                                        |  | Before tax    |     |  | Tax (expense)
 benefit | 
|                                                        |  |               | $   |  |                        | 
|Change in fair value of interest rate swaps, net of tax |  |               | 638 |  |                        | 
|                                                        |  |               | 638 |  |                        | 





38









Sangoma Technologies
Corporation

Notes to the consolidated
financial statements

For the years
ended June 30, 2023 and 2022

(in
thousands of US dollars, except per share data)



(c.) Reconciliation of effective tax rate:



|                                                                  |  | June 30, 2023 |         |   | June 30, 2022 | 
|----------------------------------------------------------------- |  | ------------- | ------- | - | ------------- | 
|                                                                  |  | $             |         |   | $             | 
|Loss before tax from continuing operations                        |  |               | (31,958 | ) |               | 
|Tax using the Company's domestic tax rate                         |  |               | (8,186  | ) |               | 
|Effect of tax rates in foreign jurisdictions                      |  |               | 90      |   |               | 
|Tax rate changes and other adjustments                            |  |               | (588    | ) |               | 
|Tax effect of:                                                    |  |               |         |   |               | 
|Share based compensation                                          |  |               | 642     |   |               | 
|Other non-deductible expenses                                     |  |               | (92     | ) |               | 
|Scientific Research and Experimental Development                  |  |               | 90      |   |               | 
|Business acquisition cost                                         |  |               | -       |   |               | 
|Section 481(a) adjustment                                         |  |               | -       |   |               | 
|Gain on contingent consideration                                  |  |               | (753    | ) |               | 
|Stock options deduction revaluation adjustment                    |  |               | 1,749   |   |               | 
|Goodwill impairment                                               |  |               | 5,623   |   |               | 
|Earn-out amortization                                             |  |               | 110     |   |               | 
|Current year losses for which no deferred tax asset is recognized |  |               | -       |   |               | 
|Recognition of previously unrecognized tax losses                 |  |               | (110    | ) |               | 
|Change in prior years position                                    |  |               | (1,507  | ) |               | 
|                                                                  |  |               | (2,932  | ) |               | 





39









Sangoma Technologies
Corporation

Notes to the consolidated
financial statements

For the years
ended June 30, 2023 and 2022

(in
thousands of US dollars, except per share data)



(d.) Movements in deferred tax balances:



|                                                     |  | Balance
    at
 July 1, 2022 |         |   |                                  |  |        |                       |  |  |       |   |  | Balance
    at  June 30, 2023 |    
|---------------------------------------------------- |  | ---------------------------- | ------- | - | -------------------------------- |  | ------ | --------------------- |  |  | ----- | - |  | ----------------------------- | ---
|                                                     |  | DTA/(DTL)                    |         |   | Recognized
    in profit or loss |  |        | Recognized
    in OCI |  |  | Other |   |  | Net                           |    
|                                                     |  |                              | $       |   |                                  |  | $      |                       |  |  | $     |   |  |                               | $  
|Non-deductible
    reserves                          |  |                              | 5,444   |   |                                  |  | (403   | )                     |  |  | -     |   |  |                               | -  
|SR&ED
    investment tax credits, net of 12(1)(x)    |  |                              | 2,001   |   |                                  |  | -      |                       |  |  | -     |   |  |                               | 192
|Property,
    plant and equipment                    |  |                              | (2,432  | ) |                                  |  | 472    |                       |  |  | -     |   |  |                               | -  
|Intangible
    assets including goodwill             |  |                              | (41,927 | ) |                                  |  | 8,727  |                       |  |  | -     |   |  |                               | -  
|Deferred
    development costs                       |  |                              | (886    | ) |                                  |  | 206    |                       |  |  | -     |   |  |                               | -  
|Non-capital/Net
    operating losses carried forward |  |                              | 15,620  |   |                                  |  | (2,020 | )                     |  |  | -     |   |  |                               | -  
|Right
    of use assets net of obligations & other   |  |                              | 269     |   |                                  |  | 32     |                       |  |  | -     |   |  |                               | -  
|Share
    issuance cost                              |  |                              | 834     |   |                                  |  | (313   | )                     |  |  | -     |   |  |                               | -  
|Equity
    Incentive Plan                            |  |                              | -       |   |                                  |  | 152    |                       |  |  | -     |   |  |                               | -  
|Stock
    options                                    |  |                              | 4,096   |   |                                  |  | (4,096 | )                     |  |  | -     |   |  |                               | -  
|163J
    interest                                    |  |                              | 3,593   |   |                                  |  | 3      |                       |  |  | -     |   |  |                               | -  
|Interest
    Swap                                    |  |                              | (507    | ) |                                  |  | -      |                       |  |  | (142  | ) |  |                               | -  
|Tax
    assets (liabilities) before set-off          |  |                              | (13,895 | ) |                                  |  | 2,760  |                       |  |  | (142  | ) |  |                               | 192
|Set-off
    of tax                                   |  |                              |         |   |                                  |  |        |                       |  |  |       |   |  |                               |    
|Net
    tax assets (liabilities)                     |  |                              |         |   |                                  |  |        |                       |  |  |       |   |  |                               |    





40









Sangoma Technologies
Corporation

Notes to the consolidated
financial statements

For the years
ended June 30, 2023 and 2022

(in
thousands of US dollars, except per share data)



|                                                   |  | Balance
    at  July 1, 2021 |         |   |                                   |  |        |                        |  |  |                                   |   |  |       |        |   | Balance
    at
 June 30, 2022 | 
|-------------------------------------------------- |  | ---------------------------- | ------- | - | --------------------------------- |  | ------ | ---------------------- |  |  | --------------------------------- | - |  | ----- | ------ | - | ----------------------------- | 
|                                                   |  | DTA/(DTL)                    |         |   | Recognized
    in
 profit or loss |  |        | Recognized
    
in OCI |  |  | Other
    - Business
 combination |   |  | Other |        |   | Net                           | 
|                                                   |  |                              | $       |   |                                   |  | $      |                        |  |  | $                                 |   |  |       | $      |   |                               | 
|Non-deductible
    reserves                        |  |                              | 5,028   |   |                                   |  | (380   | )                      |  |  | -                                 |   |  |       | 796    |   |                               | 
|SR&ED
    investment tax credits, net of 12(1)(x)  |  |                              | 1,457   |   |                                   |  | (157   | )                      |  |  | -                                 |   |  |       | -      |   |                               | 
|Property,
    plant and equipment                  |  |                              | (1,704  | ) |                                   |  | 324    |                        |  |  | -                                 |   |  |       | (1,041 | ) |                               | 
|Intangible
    assets including goodwill           |  |                              | (41,628 | ) |                                   |  | 4,622  |                        |  |  | -                                 |   |  |       | (4,921 | ) |                               | 
|Deferred
    development costs                     |  |                              | (608    | ) |                                   |  | (227   | )                      |  |  | -                                 |   |  |       | -      |   |                               | 
|Non-capital/Net
    losses carried forward         |  |                              | 5,159   |   |                                   |  | (1,853 | )                      |  |  | -                                 |   |  |       | 12,314 |   |                               | 
|Right
    of use assets net of obligations & other |  |                              | 182     |   |                                   |  | 87     |                        |  |  | -                                 |   |  |       | -      |   |                               | 
|Share
    issuance cost                            |  |                              | 1,146   |   |                                   |  | (312   | )                      |  |  | -                                 |   |  |       | -      |   |                               | 
|Stock
    options                                  |  |                              | 8,260   |   |                                   |  | (4,164 | )                      |  |  | -                                 |   |  |       | -      |   |                               | 
|163J
    interest                                  |  |                              | -       |   |                                   |  | (350   | )                      |  |  | -                                 |   |  |       | 3,943  |   |                               | 
|Interest
    Swap                                  |  |                              | -       |   |                                   |  | -      |                        |  |  | (417                              | ) |  |       | -      |   |                               | 
|Tax
    assets (liabilities) before set-off        |  |                              | (22,708 | ) |                                   |  | (2,410 | )                      |  |  | (417                              | ) |  |       | 11,091 |   |                               | 
|Set-off
    of tax                                 |  |                              |         |   |                                   |  |        |                        |  |  |                                   |   |  |       |        |   |                               | 
|Net
    tax assets (liabilities)                   |  |                              |         |   |                                   |  |        |                        |  |  |                                   |   |  |       |        |   |                               | 



41









|Sangoma Technologies Corporation                       
|-------------------------------------------------------
|Notes to the Consolidated financial
    statements     
|For the years ended June 30, 2023
    and 2022         
|(in
    thousands of US dollars, except per share data)



(e.) Unrecognized
deferred tax asset:



|                                      |  | June 30, 2023 |        |  | June 30, 2022 | 
|------------------------------------- |  | ------------- | ------ |  | ------------- | 
|                                      |  | Gross amount  |        |  | Tax effect    | 
|                                      |  | $             |        |  | $             | 
|Capital losses carried forward Canada |  |               | 48     |  |               | 
|Capital losses carried forward USA    |  |               | 12,885 |  |               | 
|Non-capital losses - STC Canada       |  |               | 48     |  |               | 
|Net operating loss - Ireland          |  |               | -      |  |               | 
|Net operating loss - Australia        |  |               | -      |  |               | 



Capital losses
carried forward do not expire while the non-capital loss will expire in 2042.



12.
Goodwill



The carrying amount
and movements of goodwill was as follows:



|                                       |  | Note |    |  | $ | 
|-------------------------------------- |  | ---- | -- |  | - | 
|Balance at July 1, 2021                |  |      |    |  |   | 
|Addition through business combinations |  |      | 20 |  |   | 
|Goodwill Impairment                    |  |      |    |  |   | 
|Balance at June 30, 2022               |  |      |    |  |   | 
|Goodwill Impairment                    |  |      |    |  |   | 
|Balance at June 30, 2023               |  |      |    |  |   | 



There is no addition
to goodwill for the year ended June 30, 2023.



The Company performed
an annual impairment test for its single CGU as at June 30, 2023. The recoverable amount of the Company’s only CGU (“Sangoma”)
was determined based on a fair value less costs to sell valuation model which used cash flow projections based on financial forecasts
from management covering a four-year period and an after-tax discount rate of 20.0% (pre-tax - 24.4%) per annum. The terminal value beyond
the four-year period was determined using an enterprise value to revenue exit multiple based on peer group valuations. The cash flow
projections used in estimating the recoverable amount were generally consistent with results achieved historically adjusted for anticipated
growth. The Company concluded that the carrying value of its Sangoma CGU was higher than the recoverable amount and a non-cash goodwill
impairment charge totaling $22,507 was recognized in the year ended June 30, 2023 (year ended June 30, 2022 - $91,685). As
at June 30, 2023, the carrying value of the Sangoma CGU was $288,551 and the recoverable amount was $266,044 giving rise to an impairment
of $22,507.



The Company performed
sensitivities of key assumptions used in the impairment test at June 30, 2023 and determined that if all other assumptions were
held constant:



| | · | A 0.5% increase or decrease in
the after-tax discount rate would change the estimated fair value by $5,000.
| | - | -----------------------------------------------------------------------------------------------------------



| | · | A 10% increase or decrease in
the enterprise value to the revenue exit multiple used in determining the terminal value would change the estimated fair value by $20,000.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------





42







|Sangoma Technologies Corporation                       
|-------------------------------------------------------
|Notes to the Consolidated financial
    statements     
|For the years ended June 30, 2023
    and 2022         
|(in
    thousands of US dollars, except per share data)



13.
Provisions



|                                           |  |           |      |   | Sales returns |  |     | Stock     |  |  |       |  
|------------------------------------------ |  | --------- | ---- | - | ------------- |  | --- | --------- |  |  | ----- | -
|                                           |  | Warranty  |      |   | & allowances  |  |     | rotation  |  |  |       |  
|                                           |  | provision |      |   | provision     |  |     | provision |  |  | Total |  
|                                           |  | $         |      |   | $             |  |     | $         |  |  | $     |  
|Balance at July 1, 2021                    |  |           | 241  |   |               |  | 175 |           |  |  | 26    |  
|Additional provision recognized            |  |           | (168 | ) |               |  | (48 | )         |  |  | (26   | )
|Balance at June 30, 2022                   |  |           | 73   |   |               |  | 127 |           |  |  | -     |  
|Additional provision recognized (reversed) |  |           | 11   |   |               |  | (68 | )         |  |  | 94    |  
|Balance at June 30, 2023                   |  |           | 84   |   |               |  | 59  |           |  |  | 94    |  



The provision for
warranty obligations represents the Company’s best estimate of repair and/or replacement costs to correct product failures. The
sales returns and allowances provision represent the Company’s best estimate of the value of the products sold in the current financial
period that may be returned in a future period. The stock rotation provision represents the Company’s best estimate of the value
of the products sold in the current financial period that may be exchanged for alternative products in a future period. The Company accrues
for product warranties, stock rotation, and sales returns and allowances at the time the product is delivered.



14.
Consideration payable



(i) Star Blue
Inc



During the year ended June 30,
2023, the Company made payments of $2,834 (June 30, 2022 - $1,421), recognized accretion expense of $177 (June 30, 2022 - $684),
and recognized a gain on change in fair value of $1,466 (June 30, 2022 - gain of $2,349).



The fair value
of consideration payable as of June 30, 2023 in the amount of $1,894 (June 30, 2022 - $6,017) was determined using an effective
tax rate of 26.22% (June 30, 2022 - 26.22%) and a discount rate of 4.9% (June 30, 2022 - 4.9%). The fair value of the consideration
payable is dependent upon the Company’s share price, foreign exchange rates and Company’s ability to utilize the underlying
tax losses as they become available in each reporting period.



(ii) Netfortris
Corporation



As described in
Note 20, additional consideration of up to $11,500 could be payable as part of the acquisition of NetFortris Corporation. During the
year ended June 30, 2023, the Company made full and final payments of $5,500 (June 30, 2022 - $nil), recognized accretion expense
of $258 (June 30, 2022 - $114), and recognized a gain on change in fair value of $1,509 (June 30, 2022 - loss of $95). The
fair value of consideration payable as of June 30, 2023 in the amount of $nil (June 30, 2022 - $6,751).





43







|Sangoma Technologies Corporation                       
|-------------------------------------------------------
|Notes to the Consolidated financial
    statements     
|For the years ended June 30, 2023
    and 2022         
|(in
    thousands of US dollars, except per share data)



The fair value of consideration payable
as at June 30, 2023 is summarized below:



|                                       |  | Note |    |  | $ | 
|-------------------------------------- |  | ---- | -- |  | - | 
|Opening balance, July 1, 2021          |  |      |    |  |   | 
|Additions through business combination |  |      | 20 |  |   | 
|Payments                               |  |      |    |  |   | 
|Accretion value of earn out            |  |      |    |  |   | 
|Gain on change in fair value           |  |      |    |  |   | 
|Ending balance, June 30, 2022          |  |      |    |  |   | 
|Payments                               |  |      |    |  |   | 
|Accretion value of earn out            |  |      | 4  |  |   | 
|Gain on change in fair value           |  |      |    |  |   | 
|Ending balance, June 30, 2023          |  |      |    |  |   | 
|                                       |  |      |    |  |   | 
|Consideration payable - Current        |  |      |    |  |   | 
|Consideration payable - Non-current    |  |      |    |  |   | 
|                                       |  |      |    |  |   | 



15.
Operating facility and loan and derivative assets and liabilities



(a) Operating
facility and loan



| | (i) | On October 18, 2019, the
Company entered into a new loan facility with two banks and drew down $34,800 which is repayable in quarterly installment of $1,450 over
5 years on a straight line basis. Separately, as required under the agreement, the Company locked in half of the original loan amount
by entering a 5-year interest rate credit swap with the two banks for $8,700 each. On March 28, 2022 the credit agreement was amended
and the LIBOR rate was replaced with the Secured Overnight Financing Rate (SOFR) and as at March 31, 2023 all loans were converted
to SOFR based loans. The repayment schedule for the loan has not been impacted by these changes. The balance outstanding against this
term loan facility as of June 30, 2023 is $13,050 (June 30, 2022 - $18,850). As at June 30, 2023, term loan facility balance
of $5,800 (June 30, 2022 - $5,800) is classified as current and $7,250 (June 30, 2022 - $13,050) as long-term in the consolidated
statements of financial position.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | On March 31, 2021, the Company
amended its term loan facility with its lenders and drew down a second loan of $52,500 to fund part of the acquisition of StarBlue Inc.
At the time of the draw down of the additional amounts, the following amendments were made to the agreement:
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | The provision for additional funding
related to VoIP Innovations under the original agreement was no longer necessary and has been cancelled.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------



| | · | The swingline facility was converted
from CAD $2,000 to USD $1,500
| | - | ------------------------------------------------------------------



| | · | The revolver facility was converted
from CAD $8,000 to USD $6,000
| | - | -----------------------------------------------------------------



| | · | The debt to equity ratio calculation
now allows the Company to offset up to $10,000 of unrestrained funds against the outstanding amount of the debt.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------



The incremental
draw is repayable, on a straight-line basis, through quarterly payments of $2,188 and is due to mature on December 31, 2024. As
at June 30, 2023, $8,750 (June 30, 2022 - $8,750) of the incremental facility is classified as current and $24,063 (June 30,
2022 - $32,812) is classified as long-term in the consolidated statements of financial position.





44







|Sangoma Technologies Corporation                       
|-------------------------------------------------------
|Notes to the Consolidated financial
    statements     
|For the years ended June 30, 2023
    and 2022         
|(in
    thousands of US dollars, except per share data)



| | (iii) | On March 28, 2022, the Company
amended its term loan facility with its lenders and drew down a third loan of $45,000 to fund part of the acquisition of NetFortris Corporation.
At the time of the draw down of the additional amounts, the following amendments were made to the agreement: As at March 31, 2023
all loans were converted to SOFR based loans. The incremental draw is repayable, on a straight-line basis, through quarterly payments
of $1,875 and is due to mature on March 28, 2027. On June 28, 2022, the Company amended its term loan facility with its lenders,
the amended repayment for the first twelve quarterly payments of $788 and $2,963 thereafter. As at June 30, 2023, $3,150 (June 30,
2022 - $3,150) of the incremental facility is classified as current and $37,912 (June 30, 2022 - $41,063) is classified as long-term
in the condensed consolidated statements of financial position.
| | ----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iv) | On April 6, 2023 the Company
further amended the term loan facility to reflect certain administrative amendments and to increase the amount of the revolving credit
facility from $6,000 to $20,000 and the amount of the swingline credit facility from $1,500 to $5,000. As of June 30, 2023, the
amount of $13,900 (June 30, 2022 - $nil) remains outstanding and is classified as long term in the consolidated statements of financial
position.
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



For the year ended
June 30, 2023, the Company incurred interest costs to service its borrowing facilities, comprising of the loans and operating facilities,
in the amount of $5,897 (June 30, 2022 - $2,635). During the year ended June 30, 2023, the Company borrowed $nil (June 30,
2022 - $45,000) in term loans and repaid $17,700 ( June 30, 2022 - $15,338). During the year ended June 30, 2023, the Company
borrowed $13,900 (June 30, 2022 - $nil) on its revolving credit facility as a part of the overall capital management.



Under its credit
agreements with its lenders, the Company must satisfy certain financial covenants, principally in respect of total funded debt to earnings
before interest, taxes and amortization (“EBITDA”), and debt service coverage ratio. As at June 30, 2023, and June 30,
2022 the Company was in compliance with all covenants related to its credit agreements.



(b) Derivative
assets and liabilities



The Company uses
derivative financial instruments to hedge its exposure to interest rate risks. All derivative financial instruments are recognized as
either assets or liabilities at fair value on the consolidated statements of financial position. Upon entering into a hedging arrangement
with an intent to apply hedge accounting, the Company formally documents the hedge relationship and designates the instrument for financial
reporting purposes as a fair value hedge, a cash flow hedge, or a net investment hedge. When the Company determines that a derivative
financial instrument qualifies as a cash flow hedge and is effective, the changes in fair value of the instrument are recorded in accumulated
other comprehensive loss, net of tax in the consolidated statements of financial position and will be reclassified to earnings when the
hedged item affects earnings.



On January 21,
2020, the Company converted its US Base Rate loan to a one-month LIBOR loan plus the credit spread based on the syndicated loan agreement
entered into on October 18, 2019. Separately, as required under the agreement, the Company locked in half of the original loan amount
by entering into a 5-year interest rate credit swap with the two banks for $8,700 each to manage its exposure to changes in LIBOR-based
interest rates. As of March 31, 2023 this was converted to a SOFR. The interest rate swap hedges the variable cash flows associated
with the borrowings under the loan facility, effectively providing a fixed rate of interest for five years of the six-year loan term.



The interest rate
swap arrangement with two banks became effective on January 31, 2020, with a maturity date of December 31, 2024. The notional
amount of the swap agreement at inception was $17,400 and decreases in line with the term of the loan facility. Effective March 31,
2022, Sangoma US Inc. entered into a fixed rate swap transaction worth $43,750 over a five year period and terminating on February 28,
2027. As of June 30, 2023, the notional amount of the interest rate swap was $39,621 (June 30, 2022 - $51,397). The interest
rate swap has a weighted
average fixed rate of 1.80% (June 30, 2022 - 1.80%) and have been designated as an effective cash flow hedge and therefore qualifies
for hedge accounting.





45







|Sangoma Technologies Corporation                       
|-------------------------------------------------------
|Notes to the Consolidated financial
    statements     
|For the years ended June 30, 2023
    and 2022         
|(in
    thousands of US dollars, except per share data)



As at June 30,
2023, the fair value of the interest rate swap assets were valued at current of $1,218 (June 31, 2022 - $648) and non-current $768
(June 30, 2022 - $700). The current and non-current derivative assets were recording in the consolidated statements of financial
position.



For the year ended
June 30, 2023, the change in fair value of the interest rate swaps, net of tax, was a gain of $496 (June 30, 2022 - gain of
$1,172) was recorded in other comprehensive loss in the consolidated statements of loss and comprehensive loss. The fair value of interest
rate swap is determined based on the market conditions and the terms of the interest rate swap agreement using the discounted cash flow
methodology. Any differences between the hedged SOFR rate and the fixed rate are recorded as interest expense on the same period that
the related interest is recorded for the loan facility based on the SOFR rate.



16.
Contract liabilities



Contract liabilities,
which includes deferred revenues, represent the future performance obligations to customers in respect of services or customer activation
fees for which consideration has been received upfront and is recognized over the expected term of the customer relationship.



Contract liabilities
as at June 30, 2023, and June 30, 2022 are below:



|                                                       |  | Note |    |  | $ | 
|------------------------------------------------------ |  | ---- | -- |  | - | 
|Opening balance, July 1, 2021                          |  |      |    |  |   | 
|Revenue deferred during the year                       |  |      |    |  |   | 
|Deferred revenue recognized as revenue during the year |  |      |    |  |   | 
|Additions through business combination                 |  |      | 20 |  |   | 
|Ending balance, June 30, 2022                          |  |      |    |  |   | 
|Revenue deferred during the year                       |  |      |    |  |   | 
|Deferred revenue recognized as revenue during the year |  |      |    |  |   | 
|Ending balance, June 30, 2023                          |  |      |    |  |   | 
|                                                       |  |      |    |  |   | 
|Contract liabilities - Current                         |  |      |    |  |   | 
|Contract liabilities - Non-current                     |  |      |    |  |   | 
|                                                       |  |      |    |  |   | 





46









|Sangoma Technologies Corporation                       
|-------------------------------------------------------
|Notes to the Consolidated financial
    statements     
|For the years ended June 30, 2023
    and 2022         
|(in
    thousands of US dollars, except per share data)



17.
Shareholders' equity



(i)Share
capital



The Company’s
authorized share capital consists of an unlimited number of common shares without par value. As at June 30, 2023 and 2022, the Company’s
issued and outstanding common shares consist of the following:



|                                                                |  |      |    |  | June 30 |  |            | June 30 | 
|--------------------------------------------------------------- |  | ---- | -- |  | ------- |  | ---------- | ------- | 
|                                                                |  | Note |    |  | 2023    |  |            | 2022    | 
|                                                                |  |      |    |  | #       |  |            | #       | 
|Shares issued and outstanding:                                  |  |      |    |  |         |  |            |         | 
|Outstanding, beginning of the year                              |  |      |    |  |         |  | 21,439,632 |         | 
|Shares issued for business combinations                         |  |      | 20 |  |         |  | -          |         | 
|Shares issued as installment for shares to be issued            |  |      |    |  |         |  | 11,838,457 |         | 
|Shares purchased and cancelled                                  |  |      |    |  |         |  | (108,622   | )       | 
|Shares returned from escrow and cancelled                       |  |      | 4  |  |         |  | (142,124   | )       | 
|Shares issued upon exercise of options                          |  |      |    |  |         |  | 11,024     |         | 
|Rounding of fractional shares in 2021 after share consolidation |  |      |    |  |         |  | -          |         | 
|Outstanding, end of the year                                    |  |      |    |  |         |  | 33,038,367 |         | 



On March 31,
2021, the Company acquired StarBlue Inc. and issued 3,018,685 common shares valued in the amount of $66,873 as part of the consideration,
and 18,456 common shares valued in the amount of $330 as part of the acquisition costs. Under the terms of the agreement, a further 12,695,599
common shares valued in the amount of $192,102 were to be issued in installments commencing on April 1, 2022. As of June 30,
2023, 12,695,599 common shares have been issued to StarBlue sellers in accordance with the installment schedule defined in the amended
share purchase agreement and the related amendment to accelerate the issuance of these shares. Following this issuance, the Company has
no further obligation to issue any additional shares in connection with the StarBlue acquisition.



During the year
ended June 30, 2023, a total of 11,024 (June 30, 2022 - 66,340) options were exercised for cash consideration of $44 (June 30,
2022 - $532), and the Company recorded a charge of $23 (June 30, 2022 - $267) from contributed surplus to share capital.



In the fourth quarter
of fiscal 2022, the Company announced its intention to make an Normal Course Issuer Bid (“NCIB”) with respect to its Shares.
Pursuant to the NCIB, Sangoma may, during the 12-month period commencing June 23, 2022 and ending no later than June 22, 2023,
purchase up to 1,071,981 shares, representing 5% of the total number of 21,439,632 Shares outstanding, through the facilities of the
TSX, the Nasdaq Global Select Market or alternative Canadian trading systems. Under the term of the NCIB, during the year ended June 30,
2023, the Company purchased a total of 103,122 common shares (June 30, 2022 - nil ) at an average price of $5.42 per share, for
total consideration of $559. During the year ended June 30, 2023, the total of 103,122 of those common shares were settled and cancelled
along with 5,500 common shares that were purchased in the fourth fiscal quarter of 2022 and cancelled in 2023, and the company recorded
a total reduction of $605 (June 30, 2022 - nil) in share capital for the value of share repurchased.



(ii) Share
based payments



On December 13,
2022, the Corporation’s shareholders approved the Omnibus Equity Incentive Plan (the “Plan”), which replaces the previous
share option plan (the “Legacy Plan”). No further grants will be made under the Legacy Plan.





47









|Sangoma Technologies Corporation                       
|-------------------------------------------------------
|Notes to the Consolidated financial statements         
|For the years ended June 30, 2023 and 2022             
|(in thousands of US dollars, except per
    share data)



For the year ended June 30, 2023, the Company
recognized share-based compensation expense in the amount of $3,100 (June 30, 2022 - $9,929).



Stock Options



Under the Plan (and previously under the Legacy
Plan), employees are periodically granted share options to purchase common shares at prices not less than the market price of the common
shares on the day prior to the date of grant or the volume weighted average trading price per share on the TSX during the five trading
days immediately preceding the grant date. The fair value of each option grant is estimated at the date of grant using the Black-Scholes
option pricing model. Expected volatility is determined by the amount the Corporation’s daily share price fluctuated over a period
commensurate with the expected life of the options. During the year ended June 30, 2023, the Corporation did not grant any options
(June 30, 2022 - 590,211).



The following table shows the movement in the
stock option plan:



|                              |  | Number     |           |   | Weighted      | 
|----------------------------- |  | ---------- | --------- | - | ------------- | 
|                              |  | of options |           |   | average price | 
|                              |  | #          |           |   | $             | 
|Balance, July 1, 2021         |  |            | 1,587,310 |   |               | 
|Granted                       |  |            | 590,211   |   |               | 
|Exercised                     |  |            | (66,340   | ) |               | 
|Forfeited                     |  |            | (290,644  | ) |               | 
|Cancelled                     |  |            | (612,497  | ) |               | 
|Rounding of fractional shares |  |            | (132      | ) |               | 
|Balance, June 30, 2022        |  |            | 1,207,908 |   |               | 
|Exercised                     |  |            | (11,024   | ) |               | 
|Expired                       |  |            | (171,133  | ) |               | 
|Forfeited                     |  |            | (302,700  | ) |               | 
|Balance, June 30, 2023        |  |            | 723,051   |   |               | 



The key assumptions used to fair value the grants
were as follows:



|                        |  |  | June 30 |  |  |  | June 30        | 
|----------------------- |  |  | ------- |  |  |  | -------------- | 
|                        |  |  | 2023    |  |  |  | 2022           | 
|Share price             |  |  | -       |  |  |  | $8.47 - $18.62 | 
|Exercise price          |  |  | -       |  |  |  | $8.47 -$18.62  | 
|Expected volatility     |  |  | -       |  |  |  | 57.63% -60.16% | 
|Expected option life    |  |  | 0 years |  |  |  | 4.5 - 5 years  | 
|Risk-free interest rate |  |  | -       |  |  |  | 0.78% - 2.58%  | 





48







|Sangoma Technologies Corporation                       
|-------------------------------------------------------
|Notes to the Consolidated financial
    statements     
|For the years ended June 30,
    2023 and 2022         
|(in
    thousands of US dollars, except per share data)



The following table summarizes information about
the stock options outstanding and exercisable at the end of each year:



|                |  | June 30, 2023 |         |  | June 30, 2022   | 
|--------------- |  | ------------- | ------- |  | --------------- | 
|                |  |               |         |  | Number of       | 
|                |  | Number of     |         |  | stock options   | 
|                |  | stock options |         |  | outstanding and | 
|Exercise price  |  | outstanding   |         |  | exercisable     | 
|$3.01 - $5.00   |  |               | -       |  |                 | 
|$5.01 - $7.00   |  |               | 67,012  |  |                 | 
|$7.01 - $9.00   |  |               | 210,125 |  |                 | 
|$9.01 - $12.00  |  |               | 107,039 |  |                 | 
|$12.01 - $15.00 |  |               | 55,000  |  |                 | 
|$15.01 - $18.00 |  |               | 157,897 |  |                 | 
|$18.01 - $20.00 |  |               | 22,856  |  |                 | 
|$20.01 - $27.00 |  |               | 103,122 |  |                 | 
|                |  |               | 723,051 |  |                 | 



The following table summarizes information about
the DSUs, RSUs and PSUs granted and forfeited during the year ended June 30, 2023.



|                                 |  | DSU |        |  | PSU |  |          | RSU |  |  | Total    |  
|-------------------------------- |  | --- | ------ |  | --- |  | -------- | --- |  |  | -------- | -
|Awards outstanding July 1, 2022  |  |     | -      |  |     |  | -        |     |  |  | -        |  
|Awards granted during the year   |  |     | 66,391 |  |     |  | 302,500  |     |  |  | 352,500  |  
|Awards forfeited during the year |  |     | -      |  |     |  | (172,500 | )   |  |  | (222,500 | )
|Awards outstanding June 30, 2023 |  |     | 66,391 |  |     |  | 130,000  |     |  |  | 130,000  |  



The average fair value of each DSU issued during
the year ended June 30, 2023 is $3.52 per share (June 30, 2022 - nil).



The fair value of each RSU is $4.20 per share.



The fair value of each of the PSUs tied to non-market
based performance targets is $4.20 per share. The fair value of each of the PSUs tied to market-based performance targets is $3.69 per
share using the Monte Carlo simulation. The key assumptions used in the Monte Carlo simulation are:



|                        |  | June 30, 2023 |            |   | June 30, 2022 | 
|----------------------- |  | ------------- | ---------- | - | ------------- | 
|Share price             |  |               | 3.69       |   |               | 
|Expected volatility     |  |               | 60.00      | % |               | 
|Time to expiry          |  |               | 2.52 years |   |               | 
|Risk-free interest rate |  |               | 4.08       | % |               | 



(iii)Loss
per share



Both the basic and diluted loss per share have
been calculated using the net loss attributable to the shareholders of the Company as the numerator.





49







|Sangoma Technologies Corporation                       
|-------------------------------------------------------
|Notes to the Consolidated financial
    statements     
|For the years ended June 30,
    2023 and 2022         
|(in
    thousands of US dollars, except per share data)





|                                                                     |  | June 30 |            |   | June 30 |  
|-------------------------------------------------------------------- |  | ------- | ---------- | - | ------- | -
|                                                                     |  | 2023    |            |   | 2022    |  
|Number of shares:                                                    |  |         |            |   |         |  
|Weighted average number of shares outstanding                        |  |         | 33,118,980 |   |         |  
|Shares to be issued                                                  |  |         | -          |   |         |  
|Weighted average number of shares used in basic earnings per share   |  |         | 33,118,980 |   |         |  
|Weighted average number of shares used in diluted earnings per share |  |         | 33,118,980 |   |         |  
|                                                                     |  |         |            |   |         |  
|Net loss for the period                                              |  | $       | (29,026    | ) |         | $
|                                                                     |  |         |            |   |         |  
|Loss per share                                                       |  |         |            |   |         |  
|Basic loss per share                                                 |  | $       | (0.88      | ) |         | $
|Diluted loss per share                                               |  | $       | (0.88      | ) |         | $



18. Related parties



The Company’s related parties include key
management personnel and directors. Unless otherwise stated, none of the transactions incorporated special terms and conditions and no
guarantees were given or received. Outstanding balances payable are usually settled in cash and relate to director fees.



The Company had incurred no related party transactions
and had no outstanding balance with related parties for the years ended June 30, 2023 and 2022.



Compensation of key management personnel



Key management personnel are those individuals
having authority and responsibility for planning, directing and controlling the activities of the Company, including members of the Company's
Board of Directors. The Company considers key management to be the members of the Board of Directors and five officers.



The remuneration of directors and other members
of key management personnel during the fiscal years ended June 30, 2023 and 2022 were as follows:



|                                  |  | June 30 |       |  | June 30 | 
|--------------------------------- |  | ------- | ----- |  | ------- | 
|                                  |  | 2023    |       |  | 2022    | 
|                                  |  |         | $     |  |         | 
|Short-term benefits               |  |         | 2,162 |  |         | 
|Long-term benefits                |  |         | 90    |  |         | 
|Shared-based payment transactions |  |         | 1,208 |  |         | 
|Total compensation                |  |         | 3,460 |  |         | 



19. Segment disclosures



The Company operates in one operating segment;
development, manufacturing, distribution and support of voice and data connectivity components for software-based communication applications.
The majority of the Company’s assets are located in Canada and the United States of America (“USA”). The Company sells
into three major geographic centers: USA, Canada and other foreign countries. The Company has determined that it has a single reportable
segment as the Company’s decision makers review information on a consolidated basis.







50







|Sangoma Technologies Corporation                       
|-------------------------------------------------------
|Notes to the Consolidated financial statements         
|For the years ended June 30, 2023 and 2022             
|(in thousands of
    US dollars, except per share data)



Revenues for group of similar products and services
can be summarized for the years ended June 30, 2023 and 2022 as follows:



|               |  | June 30 |         |  | June 30 | 
|-------------- |  | ------- | ------- |  | ------- | 
|               |  | 2023    |         |  | 2022    | 
|               |  |         | $       |  |         | 
|Products       |  |         | 54,018  |  |         | 
|Services       |  |         | 198,512 |  |         | 
|Total revenues |  |         | 252,530 |  |         | 



The sales in each of these geographic locations
for the years ended June 30, 2023 and 2022 as follows:



|                    |  | June 30 |         |  | June 30 | 
|------------------- |  | ------- | ------- |  | ------- | 
|                    |  | 2023    |         |  | 2022    | 
|                    |  |         | $       |  |         | 
|USA                 |  |         | 234,858 |  |         | 
|Canada              |  |         | 3,785   |  |         | 
|All other countries |  |         | 13,887  |  |         | 
|Total revenues      |  |         | 252,530 |  |         | 



The non-current assets, in US dollars, in each
of the geographic locations as at June 30, 2023, and June 30, 2022 are below:



|                         |  | June 30 |         |  | June 30 | 
|------------------------ |  | ------- | ------- |  | ------- | 
|                         |  | 2023    |         |  | 2022    | 
|                         |  | $       |         |  | $       | 
|Canada                   |  |         | 6,309   |  |         | 
|USA                      |  |         | 374,814 |  |         | 
|Total non-current assets |  |         | 381,123 |  |         | 



20. Business combinations



On March 28, 2022, the Company acquired NetFortris
Corporation. The Company paid an aggregate purchase price of $64,820, net of a net working capital adjustment of $(8,942), and comprised
of $50,418 cash consideration, 1,494,536 common shares at a fair value of $16,801. The Company issued 1,494,536 common shares including
327,241 shares representing a holdback for indemnification purposes on closing of the acquisition. The Company estimates that a further
payment of $6,543 will be paid as part of an earn out that is up to $11,500 if certain operating targets are met. The Company incurred
estimated transaction costs in the amount of $2,939 which were expensed in the fiscal year ended June 30, 2022. The acquisition has
been accounted for using the acquisition method under IFRS 3, Business Combinations.



The following table summarizes the fair value
of consideration paid on the acquisition date and the allocation of the purchase price to the assets and liabilities acquired.





51







|Sangoma
    Technologies Corporation                   
|-------------------------------------------------------
|Notes
    to the Consolidated financial statements     
|For
    the years ended June 30, 2023 and 2022         
|(in
    thousands of US dollars, except per share data)



|Consideration                                        |  | $ |       
|---------------------------------------------------- |  | - | ------
|Cash consideration on closing                        |  |   | 43,868
|Net working capital adjustment                       |  |   | (8,942
|Cash held in escrow for working capital              |  |   | 350   
|Cash held in escrow for telecom taxes                |  |   | 3,400 
|Cash held in escrow for indemnification              |  |   | 2,800 
|Additional consideration for earn out                |  |   | 6,543 
|Common shares issued on closing                      |  |   | 13,122
|Common shares reserved in escrow for indemnification |  |   | 3,679 
|                                                     |  |   | 64,820



|Purchase price allocation                |  | $ |       
|---------------------------------------- |  | - | ------
|Cash                                     |  |   | 1,706 
|Trade receivables                        |  |   | 1,822 
|Inventories                              |  |   | 416   
|Property and equipment                   |  |   | 4,172 
|Right-of-use assets                      |  |   | 3,277 
|Other current assets                     |  |   | 796   
|Other non-current assets                 |  |   | 370   
|Deferred income tax asset                |  |   | 11,091
|Accounts payable and accrued liabilities |  |   | (9,442
|Sales tax payable                        |  |   | (5,506
|Contract liabilities                     |  |   | (1,666
|Lease obligations on right-of-use assets |  |   | (3,277
|Other non-current liabilities            |  |   | (235  
|Intangible assets                        |  |   | 29,000
|Goodwill                                 |  |   | 32,296
|                                         |  |   | 64,820



21. Authorization of the consolidated
financial statements



The consolidated financial statements were authorized
for issuance by the Board of Directors on September 27, 2023.





52