Abaxx Technologies Inc.

ANNUAL INFORMATION FORM

FOR THE FINANCIAL YEAR ENDED DECEMBER 31, 2020

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March 31, 2021

GLOSSARY ..................................................................... 2 CAUTIONARY NOTE REGARDING FORWARDLOOKING INFORMATION AND RISKS ..................... 4 INTRODUCTION ............................................................ 5 CORPORATE STRUCTURE .......................................... 6 Name, Address, Incorporation, and Corporate Organizational Chart .................................................... 6 GENERAL DEVELOPMENT OF THE BUSINESS ...... 7 Three Year History ....................................................... 7 Anticipated Changes in the Company’s Business ...... 11 Significant Acquisitions ............................................. 11 BUSINESS OF THE COMPANY ................................. 11 Risk Factors ................................................................ 16 DIVIDENDS OR DISTRIBUTIONS ............................. 30 CAPITAL STRUCTURE ............................................... 30 MARKET FOR SECURITIES ....................................... 30 ESCROWED SECURITIES .......................................... 30 DIRECTORS AND OFFICERS .................................... 31 Cease Trade Orders, Bankruptcies, Penalties or Sanctions .................................................................... 33 Conflicts of Interest .................................................... 34 AUDIT COMMITTEE INFORMATION ...................... 35 Audit Committee Charter ........................................... 35

Composition of the Audit Committee ........................ 35
PROMOTERS ................................................................ 36
LEGAL PROCEEDINGS AND REGULATORY
ACTIONS ....................................................................... 36
INTEREST OF MANAGEMENT AND OTHERS IN
MATERIAL TRANSACTIONS .................................... 36
TRANSFER AGENT AND REGISTRAR .................... 36
MATERIAL CONTRACTS ........................................... 36
INTERESTS OF EXPERTS ........................................... 37
ADDITIONAL INFORMATION .................................. 38
ABAXX INC. AUDIT COMMITTEE CHARTER ... 39
1.0 Mandate ........................................................ 39
2.0 Composition and Membership ...................... 39
3.0 Duties and Responsibilities ........................... 40
4.0 Funding for the Independent Auditor and
Retention of Other Independent Advisors .................. 43
5.0 Procedures for Receipt of Complaints and
Submissions Relating to Accounting Matters............. 43
6.0 Procedures for Approval of Non-Audit
Services44
8.0 Access to Information and Authority ............ 45
9.0 Review of Charter ......................................... 45

GLOSSARY

“ Abaxx ” means Abaxx Technologies Inc.;

“ Abaxx Tech ” or “ Abaxx Barbados ” means Abaxx Technologies Corp., a corporation incorporated under the laws of Barbados and a wholly-owned subsidiary of Abaxx;

“ ABCA ” means the Alberta Business Corporations Act , or its successor legislation and the regulations made thereunder;

“ACH” means approved clearinghouse licensed by MAS;

“ ACX ”, or “ Abaxx Exchange and Clearing ” means Abaxx Singapore Pte. Ltd., a Singapore incorporated holding company with two operating exchange subsidiaries Abaxx Exchange Pte. Ltd. and Abaxx Clearing Pte. Ltd.;

“ ACX MLA ” means the exclusive software master license agreement, executed on May 15, 2019, between Abaxx Tech and ACX;

“ ACX Royalty ” means the royalty agreement executed on February 1, 2019 whereby ACX grants to Abaxx Tech a two percent (2%) royalty on gross revenue during the indefinite royalty term;

“ AIF ” means this annual information form for the financial year ended December 31, 2020;

“ Board ” means the board of directors of the Company;

“ CBCA ” means the Canada Business Corporations Act , or its successor legislation and the regulations made thereunder;

“ Common Share ” means a common share of the Company;

“ Company ” means Abaxx Technologies Inc. (formerly New Millennium Iron Corp.) (Aequitas NEO Exchange: ABXX);

“ ESG ” means Environmental, Social and Governance;

“ Exchange Ratio ” means the exchange of one (1) pre-arrangement Abaxx common share for 0.809 post-arrangement Abaxx share and the exchange of one (1) pre-arrangement Abaxx option for 0.809 post-arrangement Abaxx option, and the exchange of one (1) pre-arrangement Abaxx warrant for 0.203 post-arrangement Abaxx share;

“ Escrow Agent ” means Computershare Trust Company of Canada, 100 University Ave., Toronto, Ontario M5J 2Y1;

“ FCM ” means futures commission merchant;

“ LNG ” means liquified natural gas;

“ MAS ” means Monetary Authority of Singapore;

“ NEO ” means the Aequitas NEO Exchange;

“ New Millennium ” means New Millennium Iron Corp.;

“ Pre-Listing Abaxx Financing ” means the non-brokered private placement of 6,484,020 Abaxx Common Shares at a price of $0.80 per Abaxx Common Share for gross proceeds of $5,187,216;

“ Preference Share ” means a preference share of the Company;

“ Recognized Market Operator ” or “ RMO ” means a securities or commodity exchange licensed by the Monetary Authority of Singapore or “ MAS ”;

“ Share Consolidation ” means the consolidation of New Millennium shares in accordance with the Share Consolidation Ratio;

“ Share Consolidation Ratio ” means the consolidation of the New Millennium shares on the basis of twelve (12) preconsolidation New Millennium shares for one (1) post-consolidation New Millennium share;

“ Shareholder ” means a holder of Common Shares;

“ Sponsor ” has the meaning specified in TSX Venture Exchange Policy 2.2 – Sponsorship and Sponsorship Requirements .

“ Transaction ” means the business combination involving New Millennium and Abaxx, that resulted in a reverse take-over of New Millennium by Abaxx pursuant to a “three-cornered Business Combination” among New Millennium, 12404206 Canada Inc., and Abaxx, following which, securityholders of Abaxx owned the substantial majority of the Common Shares.

“ TSXV ” means the TSX Venture Exchange; and

“ TSX ” means the Toronto Stock Exchange;

CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION AND RISKS

This AIF contains or refers to certain forward-looking information. Forward-looking information can often be identified by forward-looking words such as “anticipate”, “believe”, “expect”, “plan”, “intend”, “estimate”, “may”, “potential” and “will” or similar words suggesting future outcomes, or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. All information, other than information regarding historical fact that addresses activities, events or developments that the Company believes, expects or anticipates will or may occur in the future is forwardlooking information. Forward-looking information does not constitute historical fact but reflects the current expectations the Company regarding future results or events based on information that is currently available. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur. Such forward-looking statements in this AIF speak only as of the date of this AIF. Forward-looking statements in this AIF include, but are not limited to, statements with respect to:

the performance of the Company’s business and operations;
the intention to grow Company’s business and operations;
the introduction and continued offering of services and product features;
the market for the Company’s products and services and competitive conditions;
the Company’s pricing and revenue models;
the future liquidity and financial capacity;
the treatment of the Company and its subsidiaries under government regulatory and taxation regimes;
the Company’s intellectual property;
the Company’s ability to operate in certain markets; and
the Company’s ability to monitor, assess and manage the impact of the COVID-19 pandemic.

With respect to the forward-looking information contained in this AIF, the Company has made certain assumptions regarding, among other things: (i) cash flow from the Company’s operations; (ii) general economic, financial market, regulatory and political conditions in which the Company operates; (iii) consumer interest in the Company’s products; (iv) competition; (v) anticipated and unanticipated costs; (vi) government regulations applicable to the Company’s business and operations, and its impacts thereon; (vii) the Company’s ability to obtain qualified staff, equipment, and services in a timely and cost-efficient manner; (viii) the Company’s ability to conduct operations in a safe, efficient and effective manner; (ix) the Company’s ability to carry out its marketing plans and their effectiveness; (x) the efficacy of the Company’s security measures; and (xi) the Company’s product development plans and timeframes for completion. Although the Company believes that the assumptions inherent in any forward-looking information are reasonable, forward-looking information is not a guarantee of future events or performance and, accordingly, readers are cautioned not to place undue reliance on such information due to the inherent uncertainty therein.

Risks and other factors that could cause actual results or events to differ materially those expressed in forward-looking information include, but are not limited to: the limited operating history of the Company; the competitive nature of the financial technology industry; fluctuations in the market price of the Company’s securities; the need for the Company to manage its planned growth and expansion; the effects of product development and need for continued technology change; protection of proprietary rights; the effect of government regulation and compliance on the Company and the industry in which it operates; the impact of the Company’s marketing efforts; efficacy of the company’s risk management and internal controls; availability and adequacy of insurance; future capital needs; global economic climate; dilution; currency exchange risks; network security risks; the ability of the Company to maintain properly working systems; disruption of operations due to global events and pandemics; theft and risk of physical harm to personnel; reliance on key personnel; as well as those risk factors discussed in this AIF. Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended. Accordingly, readers should not place undue reliance on forward-looking information. The Company does not undertake any obligation to update or revise any forward-looking information, except as required by law.

INTRODUCTION

The Company is a financial technology business developing software tools which enable commodity traders and finance professionals to communicate, trade and transact faster and more securely. The Company’s business strategy is comprised of two core components: i) investing in new internet communication protocols and proprietary financial software architecture used in global commodity market trading ii) commercializing the Company’s exchange and clearinghouse subsidiaries, using the Company’s proprietary technology, towards liquified natural gas benchmark contracts, and a new market structure vision for metals and emerging Environmental, Social, and Governance (“ ESG ”) certified-commodity markets. The Company’s operations are conducted through the following primary subsidiaries:

Abaxx Technologies Holdco Inc. is a wholly-owned subsidiary of the Company and majority shareholder of Abaxx Singapore Pte Ltd. Abaxx Technologies Holdco Inc. was incorporated under the CBCA on January 25, 2018 under its original name Abaxx Technologies Inc. Abaxx Technologies Inc. was subject to the Abaxx arrangement by way of arrangement on December 14, 2020. As a result of the arrangement, Abaxx Technologies Inc. was renamed to Abaxx Technologies Holdco Inc.;
Abaxx Technologies Corp. is a wholly-owned subsidiary, incorporated under the laws of Barbados, of the Company and owns the Company’s software portfolio;
Abaxx Singapore Pte. Ltd. is a subsidiary, incorporated under the laws of Singapore, of the Company and acts as a holding company with two operating exchange subsidiaries Abaxx Exchange Pte. Ltd. and Abaxx Clearing Pte. Ltd.;
Abaxx Exchange Pte. Ltd. is a commodity exchange and wholly-owned subsidiary, incorporated under the laws of Singapore, of Abaxx Singapore Pte. Ltd.; and
Abaxx Clearing Pte.Ltd. is a clearinghouse that settles matched trades and wholly-owned subsidiary, incorporated under the laws of Singapore, of Abaxx Singapore Pte. Ltd.

Through these businesses, the Company intends to generate revenue through software licensing sales and royalties and through its exchange and clearinghouse subsidiaries.

The Common Shares of the Company are listed on the Aequitas NEO Exchange under the trading symbol “ABXX”.

CORPORATE STRUCTURE

Name, Address, Incorporation, and Corporate Organizational Chart

Abaxx Technologies Inc. (formerly New Millennium Iron Corp.) is a company incorporated under the Alberta Business Corporations Act . Its corporate headquarters is located at 18 King Street East, Suite 902, Toronto, Ontario, M5C 1C4 and its registered office is located at 855- 2[nd] Street S.W., Suite 3500, Bankers Hall East Tower, Calgary, Alberta, T2P 4J8.

The following organization chart outlines the corporate structure of the Company:

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----- Start of picture text -----

Abaxx Technologies Inc. (formerly New
Millennium Iron Corp.)
( ABCA )
100%
100%
100% 80%
Abaxx Technologies Holdco Inc. LabMag Services LabMag GP Inc.
( CBCA) Inc. ( CBCA ) (ABCA)
100%
100% 100%
Abaxx Technologies Corp. LabMag Limited Partnership
( Barbados ) (Alberta)
81%
Abaxx Singapore Pte. Ltd.
( Singapore )
100% 100%
Abaxx Abaxx
Exchange Clearing Pte.
Pte. Ltd. Ltd. (Abaxx
(Abaxx Clearing)
Exchange) ( Singapore )
( Singapore )
----- End of picture text -----

Material Amendments to the Company’s Articles

The Company was originally incorporated under the ABCA as a capital pool company named New Millennium Capital Corp. and was later renamed to New Millennium Iron Corp. on June 14, 2011 pursuant to a certificate of amendment issued under the ABCA. On November 10, 2003, the Company’s articles of incorporation were amended to remove the “private company” restrictions. New Millennium Iron Corp. operated as an iron ore exploration and development company with ownership of two primary iron ore deposits: (i) the LabMag deposit situated in Western Labrador, in Elross Township, about 30 km northwest of Schefferville, Québec; and (ii) the KéMag deposit situated in Rivière Koksoak in Northern Québec, 40 km northwest of Schefferville, Québec. New Millennium Iron Corp. was subject to a reverse take over by Abaxx by way of arrangement pursuant to the CBCA on December 14, 2020. Prior to the effective date of the arrangement, the Company filed articles of amendment to undergo a share consolidation whereby Abaxx shareholders would exchange Abaxx common shares at a ratio of one (1.000) Abaxx common share for 0.809 post-consolidation shares of the Company. In addition, each holder of Abaxx options received 0.809 postconsolidation options of the Company. Additionally, each holder of Abaxx warrants received 0.203 postconsolidation warrants of the Company. Upon closing of the reverse take-over, New Millennium Iron Corp. filed articles of amendment to rename itself to Abaxx Technologies Inc.

GENERAL DEVELOPMENT OF THE BUSINESS

Three Year History

The following is a summary of the general development of the Company’s business over the three most recently completed financial years:

2018

On February 27, 2018, Abaxx entered into an executable term sheet with Operem Inc. (“ Operem ”), a U.S. based developer of a technologically innovative intellectual property asset exchange, to purchase 2,500,000 series A preferred stock and a gross revenue royalty in exchange for US$2,530,000 and 2,750,000 Abaxx Common Shares. Abaxx also entered into an agreement to co-develop certain exchange-supporting software products and intellectual property with Operem.

On February 28, 2018, Abaxx entered into an executable term sheet with CleerX Pte. Ltd. (“ Cleer ”), a Singapore based developer of a technologically-innovative liquified natural gas and energy market exchange, to purchase 2,500,000 series A preferred stock and a gross revenue royalty in exchange for US$5,000,000 in two tranches and 1,375,000 Abaxx Common Shares. In addition, Abaxx entered into an agreement to co-develop certain exchangesupporting software products and intellectual property with Cleer.

On March 26, 2018, Abaxx completed the non-brokered initial seed financing (“ Initial Seed Financing ”) through the issuance of 13,700,000 Abaxx Common Shares at a price of $0.01 per Abaxx Common Share to certain founders, of, and key investors in, Abaxx, for gross proceeds of $137,000.

On March 27, 2018, Abaxx completed a non-brokered private placement through the issuance of 5,033,365 Abaxx Common Shares at a price of $0.15 per Abaxx Common Shares to certain Abaxx founding partners for gross proceeds of $755,004.80.

On April 4, 2018, Abaxx terminated its executable term sheet with Cleer and decided not to proceed with an investment in the CleerX exchange project.

On April 11, 2018, Abaxx completed a non-brokered private placement of 11,532,062 Abaxx Common Shares at a price of $0.40 per Abaxx Common Shares for gross proceeds of $4,612,825. As part of the private placement, that closed on April 11, 2020, Abaxx also issued 2,830,000 Abaxx Preference Shares at a price of $0.40 for gross proceeds of $1,132,000. Abaxx completed a second tranche of this non-brokered private placement, consisting of 2,197,237 Abaxx Common Shares at a price of $0.40 per Abaxx Common Shares for gross proceeds of $878,894.80, on August 1, 2018.

On April 11, 2018, Abaxx executed an investment agreement (the “ Pasig & Hudson Investment Agreement ”) whereby Abaxx purchased 1,972,649 ordinary shares in Pasig & Hudson (“ Pasig & Hudson Shares ”), a digital business incubator, in exchange for $250,000 aggregate cash consideration and 1,250,000 Abaxx Common Shares. The Pasig & Hudson Investment Agreement allowed Abaxx to subscribe for an additional 726,764 Pasig & Hudson Shares for aggregate cash consideration of $350,000 as part of a second tranche of financing, which was exercised by Abaxx. As at the date of this AIF, Abaxx holds 2,699,413 ordinary shares in Pasig & Hudson, representing 18% of the issued and outstanding shares of Pasig & Hudson.

On April 18, 2018, Abaxx entered into an investment agreement with Operem (the “ Operem Investment Agreement ”). Under the Operem Investment Agreement, Abaxx purchased 2,500,000 series A-1 preferred stock in Operem (“ Operem Preferred Stock ”) in exchange for $2,530,000 aggregate cash consideration and 2,750,000 Abaxx Common Shares, which were issued on May 3, 2018. Contingent upon certain conditions, Abaxx also agreed to purchase an additional 1,800,000 series A-2 Operem Preferred Stock up until November 15, 2018 as part of a second tranche financing (the “ Operem Option ”). On November 15, 2018, Abaxx chose not to exercise the Operem Option. As part of the Operem Investment Agreement, Abaxx was also granted a royalty conversion right (the “ Royalty Conversion Right ”). The Royalty Conversion Right allows Abaxx to convert up to 4,300,000 Operem Preferred Stock into a revenue royalty percentage, at the rate of 860,000 Operem Preferred Stock for every 0.5% of a revenue royalty (the “ Operem Royalty ”). Abaxx Tech is the registered holder of the Operem Preferred Stock and the Operem Royalty. Through Abaxx Tech, Abaxx owns 2,500,000 Operem Preferred Stock (or approximately 45.05% of voting equity of Operem) as of the date of this AIF.

On September 14, 2018, Abaxx entered into an agreement for future equity with Smart Crowd Holdings Limited (“ Smart Crowd ”), a Dubai based digital real estate investment company, (the “ Smart Crowd SAFE ”). Under the Smart Crowd SAFE, Abaxx contributed $140,000 to the capital of Smart Crowd (the “ Smart Crowd Initial Investment ”), whereby the Smart Crowd Initial Investment will convert into conversion shares upon certain triggering events, such as a SAFE Liquidity Event (defined below), an equity financing in excess of USD$750,000, or an insolvency event such as the dissolution of Smart Crowd. The conversion shares’ priority will be dependent on the event triggering conversion. If Smart Crowd raises at least $750,000 in equity financing, the Smart Crowd Initial Investment will convert into the highest class of shares issued under that equity financing. If Smart Crowd experiences a liquidity event (“ SAFE Liquidity Event ”), being: (a) Smart Crowd or a shareholder entering into a binding agreement with a third party on arms’ length terms under which the third party is to acquire (other than by way of a subscription for new shares) beneficial ownership of 50% or more of the voting shares of Smart Crowd; (b) Smart Crowd enters into a binding agreement to dispose of assets comprising more than half the value of its assets, and that agreement become unconditional; (c) Smart Crowd resolves to amalgamate with any other company in a transaction that is in substance the same as described under (a) and (b); or (d) Smart Crowd enters into a listing agreement with a recognized stock exchange, then the Smart Crowd Initial Investment will convert into ordinary shares. Under the Smart Crowd SAFE, shareholders also have the option of converting investment dollars into shares via an option conversion event (“ Option Conversion Event ”), being the receipt by Smart Crowd of a notice signed by investors in the Smart Crowd SAFE representing at least 50% of the total investment amount. If the Smart Crowd Initial Investment is converted pursuant to an Option Conversion Event, Abaxx will receive the highest class of Smart Crowd shares in issue at the time. The number of Smart Crowd conversion shares that Abaxx will receive will equal the Valuation Cap divided by the Fully Diluted Capitalization (as defined below) immediately prior to the event that triggers conversion. Fully diluted capitalization (“ Fully Diluted Capitalization ”) means the number of issued and outstanding Smart Crowd common shares on the date of the triggering event and the valuation cap (“ Valuation Cap ”) is defined as USD$2,200,000.

On November 19, 2018, Abaxx Singapore Pte. Ltd. was incorporated under the laws of Singapore to continue the development pursuit of a commodity exchange and clearinghouse, with an initial focus on liquified natural gas benchmark contracts.

2019

On February 1, 2019, Abaxx Tech entered into a royalty agreement with ACX (the “ ACX Royalty Agreement ”). Under the terms of the ACX Royalty Agreement, ACX granted Abaxx Tech a two percent (2%) royalty on gross revenue during the indefinite royalty term (the “ ACX Royalty ”). Under the ACX Royalty Agreement, Abaxx Tech

has the right to increase the ACX Royalty to three percent (3%) of gross revenues upon the payment of US$10,000,000 to ACX within five years from date thereof.

On February 1, 2019, ACX and Abaxx Tech entered into an agreement whereby Abaxx Tech agreed to advance up to US$10,000,000 to ACX (the “ ACX Convertible Debenture ”). Under the terms of the ACX Convertible Debenture, Abaxx Tech has the right to convert all outstanding indebtedness thereunder into ACX Shares at a price of US$1.00 per ACX Share upon delivery of a conversion notice to ACX by Abaxx Tech. As of December 14, 2020, Abaxx Tech submitted a conversion notice to ACX requesting all outstanding indebtedness to be converted into ACX Shares. As a result, Abaxx Tech now owns 81% of the issued and outstanding ACX Shares. Following conversion of the ACX Convertible Debenture, ACX and Abaxx Tech intend to continue use the undrawn portion of the ACX Convertible Debenture to fund the development of ACX Exchange and ACX Clearing.

On April 17, 2019, Abaxx completed a private placement of 2,112,227 units in Abaxx (each, a “ Unit ”) at a price of $1.00 per Unit for gross proceeds of $2,112,227. Each Unit issued on April 17, 2019 consisted of one (1) Abaxx Common Share and one (1) Abaxx Warrant. Each whole Abaxx Warrant granted under the April 17, 2019 private placement expired on December 31, 2020 and was exercisable for $2.00 per Abaxx Common Share.

On May 1, 2019, Abaxx Tech and ACX entered into a technology assignment agreement (the “ ACX Assignment Agreement ”), whereby Abaxx Tech delivered and transferred possession to ACX of all technology possessed by Abaxx Tech as of the date of the agreement (the “ Assigned Technology ”). ACX agreed under the ACX Assignment Agreement to assume the responsibility of research and development of all Assigned Technology.

On May 15, 2019 and in connection with the ACX Assignment Agreement, Abaxx Tech and ACX entered into an exclusive software master license agreement (the “ ACX MLA ”), whereby ACX licensed certain intellectual property relating to computer software products and applications developed by Abaxx Tech (the “ Licensed Software ”). The geographical territory of the exclusive license granted to ACX includes Singapore, Hong Kong, the People’s Republic of China, all member states within the European Economic Community, the United Kingdom and the United States. Under the ACX MLA, in addition to receiving the Licensed Software, ACX also received the right for Abaxx Tech to provide support and maintenance, monitoring services, and development services (e.g., functionality enhancements, consultancy services and on-site support) (collectively, the “ Support Services ”). As consideration for the Licensed Software and the Support Services, ACX agreed to pay Abaxx Tech a royalty on revenues that it earns from sublicensing equal to 20% of gross revenues up to US$2,000,000, 10% of gross revenues in excess of US$2,000,000 and up to US$5,000,000 and 5% of gross revenues in excess of US$5,000,000 (collectively, the “ ACX MLA Royalty ”).

On June 14, 2019, ACX completed a non-brokered private placement (the “ ACX Financing ”) of 6,037,500 common shares in the capital of ACX (“ ACX Shares ”) at a price per ACX Share of US$0.01. Under the ACX Financing, Abaxx Tech subscribed for 3,500,000 ACX Shares for total consideration of US$35,000, and former members of Cleer subscribed for 2,350,000 Shares.

On October 21, 2019, James Harmon and Geoff Osler, founders of Operem (the “ Operem Founders ”), entered into an option agreement (the “ Operem Option Agreement ”) with Abaxx whereby the Operem Founders agreed sell their 1,237,500 Abaxx Common Shares to Abaxx at the greater of: (a) US$0.75 per Abaxx Common Share, or (b) the price of the Abaxx Common Shares issued under the Pre-Listing Abaxx Financing. As of the date of this AIF, Abaxx decided not to exercise its rights under the Operem Option Agreement.

On December 23, 2019, Abaxx completed a non-brokered private placement of US$2,000,000 aggregate principal amount of Abaxx Convertible Debentures. The Abaxx Convertible Debentures mature on a date that is twenty-four (24) months from the date of issuance; however, the holder thereof had the right to effect a conversion of all or part of the principal amount then outstanding under the Abaxx Convertible Debenture at a price of $0.55 per Abaxx Common Share (the “ Conversion Right ”). The Abaxx Convertible Debentures bear interest at eight percent (8%) per annum, calculated quarterly. On January 3, 2020, Abaxx completed a second non-brokered private placement of US$1,000,000 aggregate principal amount of the Abaxx Convertible Debentures. Following the issuance of the Abaxx Convertible Debenture with a US$1,000,000 principal amount, Mr. Crumb held 11,350,000 Abaxx Common Shares on a partially diluted, representing 24.8% of the partially diluted issued and outstanding Abaxx Common Shares. On May 15, 2020, Abaxx completed a final non-brokered private placement of US$250,000 aggregate principal amount of the Abaxx Convertible Debentures. As of the date of this AIF, all holders of Convertible Debentures exercised their

Conversion Right on the day prior to December 14, 2020. Upon exercise of the Conversion Right, Abaxx issued approximately 8,295,664 Abaxx Common Shares to holders of the Abaxx Convertible Debentures.

2020

On January 8, 2020, Abaxx was assigned interest in the following United States patent applications pursuant to an assignment agreement dated January 8, 2020: (1) Patent Application No. 16/708,405; (2) Patent Application No. 16/708/398; (3) Patent Application No. 16/708,377; (4) Patent Application No. 16/708,265; (5) Patent Application No. 16/706,457; (6) Patent Application No. 16/706,586; (7) Patent Application No. 16/703,726; (8) Patent Application No. 16/684,522; and (9) Patent Application No. 16/692,211 (collectively, the “ Assigned U.S. Patents ”).

On August 1, 2020, Abaxx assigned the Assigned U.S. Patents to Abaxx Tech under individual assignment agreements each dated as of August 1, 2020.

On July 14, 2020, New Millennium Iron Corp. (“ New Millennium ”) entered into a letter of intent with Abaxx whereby New Millennium, 12404206 Canada Inc., and Abaxx would enter into a three-cornered business combination, share exchange, plan of arrangement or such other transaction structure that would result in the acquisition of all the of the issued and outstanding Abaxx common shares, Abaxx warrants and Abaxx options by New Millennium.

On July 24, 2020, Abaxx completed the first tranche of the Pre-Listing Abaxx Financing of 1,284,375 Abaxx Common Shares at a price of $0.80 per Abaxx Common Share for gross proceeds of $1,027,500.

On July 31, 2020, Abaxx completed the second tranche of the Pre-Listing Abaxx Financing of 1,319,500 Abaxx Common Shares at a price of $0.80 per Abaxx Common Share for gross proceeds of $1,055,600.

On September 7, 2020, ACX received approval-in-principle for the Monetary Authority of Singapore (“ MAS ”) to act as a recognized market operator (“ RMO ”) for Abaxx Exchange. The outstanding deliverables required by ACX to receive final approval with respect to the RMO for Abaxx Exchange relate to providing MAS evidence of financial resources (i.e. US$600,000 in unallocated assets held by ACX) as well as submission of complete product checklists. ACX expects the outstanding deliverables can be satisfied during Q2 2021.

On September 11, 2020, Abaxx completed the third and final tranche of the Pre-Listing Abaxx Financing of 3,880,145 Abaxx Common Shares at a price of $0.80 per Abaxx Common Shares for gross proceeds of $3,104,116. In addition, Abaxx issued 300,000 Abaxx Common Shares to certain consultants of Abaxx for services rendered. Each Abaxx Common Share issued to the consultants carried a deemed value of $0.80 per Abaxx Common Share.

On September 14, 2020, Abaxx was assigned interests in the following PCT patent applications pursuant to assignment agreements dated September 14, 2020: (1) International Application No. PCT/US2019/045158; (2) International Application No. PCT/US2019/061863; and (3) International Application No. PCT/US2019/045170 (the “ Assigned PCT Patents ”).

On September 15, 2020, Abaxx assigned the Assigned PCT Patents to Abaxx Tech under individual assignment agreements each dated as of September 15, 2020.

On September 18, 2020, New Millennium and Abaxx entered into a definitive agreement which superseded the letter of intent. Pursuant to the definitive agreement, New Millennium indirectly acquired all of the issued and outstanding Abaxx Common Shares through a reverse take-over transaction. New Millennium would rename itself to Abaxx on December 14, 2020 pursuant to the reverse take-over.

On December 11, 2020, Abaxx issued 433,666 Abaxx Common Shares to certain consultants and service providers of Abaxx for settlement of an aggregate of $346,932 of indebtedness. Each Abaxx Common Share issued to consultants and service providers carried a deemed value of $0.80 per Abaxx Common Share. In addition, Abaxx issued 187,500 Abaxx Common Shares to the Sponsor for settlement of an aggregate of $150,000 of indebtedness. Each Abaxx Common Share issued to the Sponsor carried a deemed value of $0.80 per Abaxx Common Share.

On December 14, 2020, Abaxx successfully completed its reverse take-over transaction with New Millennium.

10 -

On December 17, 2020, Abaxx received final approval to be listed on the Aequitas NEO Exchange and subsequently began trading on the NEO on December 18, 2020 under the symbol “ABXX”.

Anticipated Changes in the Company’s Business

Over the next 12 months, the Company intends to continue executing its business strategy of licensing its software portfolio and developing its exchange and clearinghouse subsidiaries.

Significant Acquisitions

The Company has not engaged in any significant acquisitions of property, equipment or shares in the most recently completed financial year, ended December 31, 2020.

BUSINESS OF THE COMPANY

The Company will execute on a business strategy comprised of two core components: (i) investing in new internet communications protocols and proprietary financial software architecture used towards global commodity market trading; and (ii) commercializing the Company’s exchange and clearinghouse subsidiaries, using the Company’s proprietary technology, towards liquified natural gas benchmark contracts, and a new market structure vision for metals and emerging ESG certified-commodity markets.

Business Overview

Abaxx is a development-stage financial technology company with approximately 20 employees and consultants. Abaxx’s mission is to advance commodity financing markets as the global economy embarks on a great energy transition from oil and coal, to mass electrification based on natural gas, renewable energy, and smart grid energy storage.

Abaxx intends to generate revenue through software license sales and royalties, including royalties granted by ACX and Operem, and through the inception of new subsidiaries and new software licensee partners in other market segments. The licensing business model is scalable and requires much lower capital investment than internally launching products that utilize the Software and IP Portfolio. By licensing its technology, Abaxx has an opportunity to address several market segments concurrently, incrementally and in rapid succession by building on earlier success.

Abaxx also intends to generate revenue through its majority-owned ACX, which intends to address the growing demand for price-risk transfer in energy and metals markets in Asia and globally. Abaxx also intends to generate revenue through its ACX MLA and ACX Royalty. Abaxx holds a right to increase its ACX Royalty by an additional 1% by making a payment of US$10,000,000. Over time Abaxx may choose to dilute its interest in ACX equity by selling new equity to future market participants or to local institutions in Singapore or other third-party equity investors, while maintaining the ACX MLA and ACX Royalty.

Abaxx Technologies

The Abaxx vision for Global Commodity Market Trading Infrastructure 3.0, which Abaxx describes as the “Commoditization of Trust®”, is a software architecture which is natively comprised of emerging software technologies including deep learning and natural language processing (“ DL/NPL ”), self-sovereign digital identity (“ ssdID ”), encrypted content-addressing distributed file systems, smart contracting languages and protocols, and distributed ledger and decentralized datastore technology (DLT/DDS).

As a development stage business, the Company has generated nine (9) process and software user interface patent applications. The Company has also engineered a foundational internet ssdID and messaging protocol called "ID++", and developed alpha-stage software applications (e.g. Abaxx Console) using the Commoditization of Trust architecture in the fields of:

 ssdID based verified-credential management, authentication, and identity and access management (IDAM);

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end-to-end encrypted and compliant financial messaging and video chat with enhanced deep learning and natural language processing applications;
multi-cloud financial-data storage using encrypted content-addressing distributed file systems;
ssdID-enabled electronic document and smart contract signing; and
digital-contract custody and other financial workflow management applications.

The Company is also developing new proprietary software and middleware related to the ACX exchange and clearing operations with a goal to tests alpha stage software in the second quarter of 2021.

Abaxx intends to commercialize its software technology suite and the Software and IP Portfolio through business to business (“ B2B ”) strategic partnerships where emerging technologies can be applied to specific markets heavily reliant on transactional transparency and transaction execution velocity.

Abaxx Tech currently holds an intercompany gross revenue royalty over ACX for the licensed use of its proprietary software, which includes the Assigned Patents, and seeks to expand this software licensing and intellectual property royalty model into other financial service segments. Abaxx Tech is still in a development stage and does not currently generate revenue.

Abaxx Exchange and Clearing (ACX)

ACX is development-stage commodity futures exchange and clearinghouse currently seeking regulatory licenses to operate from the MAS. As of the date of this AIF, Abaxx controls 81% of the issued and outstanding ACX common shares, and a two percent (2%) royalty pursuant to the ACX Royalty. Abaxx Tech converted all outstanding intercompany indebtedness as at December 14, 2020 under the ACX Convertible Debenture (US$7,500,000). Following conversion of indebtedness under the ACX Convertible Debenture, Abaxx controls 81% of ACX. ACX and Abaxx Tech intend to continue to use the undrawn portion of the ACX Convertible Debenture to fund the development of Abaxx Exchange and Abaxx Clearing, with subsequent conversion rights to increase Abaxx ownership in ACX up to 84%.

ACX has developed foundational products, such as its LNG benchmark contracts, in consultation with the global energy industry over the past two years. ACX is also currently developing a new derivative market product suite derived from a new vision for precious metals and battery metal exchange market structure, and emerging ESG certified-commodity markets. Management believes that as the global economy seeks to re-base our energy needs from oil and coal to natural gas and renewables, many trillions of dollars of new capital infrastructure investments will require transparent markets and new price risk management tools. Abaxx believes that transparent pricing for LNG, facilitating a more seamless transition of coal to gas switching in Asia, is a key marketplace requirement for accelerating this new energy economy. Abaxx seeks to build a new physical commodity focused exchange around these core markets.

The primary values of ACX are: (1) its derivative-execution venue, which is designed to be a forum for price discovery, risk transfer, and reduced transaction costs through contract standardization; and (2) a clearinghouse which is designed to mitigate credit and trade performance risk throughout the market by mutualizing wholesale market trading risk against a single central counterparty (“ CCP ”).

In order to execute on delivering a modern exchange and clearinghouse that meets the price risk transfer needs of the wholesale commodity market, Abaxx has made the following development investments:

Building Abaxx Exchange: the exchange is the place where buyers and sellers get matched. Modern exchanges facilitate millions of transactions every day through rule-based order matching via software systems. ACX has licensed the necessary software systems to facilitate global order books and market matching, and has developed the necessary rulebooks and compliance procedures to operate the exchange.
Building Abaxx Clearing: the clearinghouse is where trades are settled from match to offset/delivery and daisy chain transactions are simplified with trade compression. The clearinghouse is made up of Abaxx
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Clearing through its association with its clearing members. In order for firms to trade futures through Abaxx Clearing, they will have to engage with a clearing member to open accounts, “clear” their trades, and manage their collateral and positions. The clearinghouse does risk calculations on the underlying futures and calculates margin offsets to generate minimum margin thresholds that it requires clearing members to assess on their clients. Additionally, through the existence of the guarantee fund required by MAS, the clearinghouse guarantees the financial performance of all trades executed on the exchange and all future contracts that go to physical delivery. Modern clearinghouses also facilitate these transactions and risk calculations via robust software systems. ACX has licensed the necessary software systems to facilitate global order clearing and risk monitoring, and has developed the necessary rulebooks and compliance procedures, and risks analysis monitoring systems to operate the exchange.

Write contracts to be traded on exchange: ACX has developed LNG deliverable-futures contracts in conjunction with global LNG trading firms over the past 18 months; ACX is currently in consultation with global gold trading firms for deliverable-futures contracts for gold and they are currently investigation opportunities in regard to other physical commodity contacts at a preliminary market assessment stage.
Obtain Regulatory Approvals: On September 7, 2020, ACX received approval-in-principle from the Monetary Authority of Singapore to act as an exchange operator (“ Recognized Market Operator ” or “ RMO ”). The outstanding deliverables required by ACX to receive final approval with respect to the RMO for Abaxx Exchange relate to satisfying the MAS requirement for financial resources (i.e. US$600,000 in unallocated assets held by ACX) as well as submission of complete product checklists.
Staff Abaxx Exchange and Abaxx Clearing: ACX has hired key executive roles with decades of experience building and operating key markets at some of the largest global exchanges, both in region and globally.
Engage with the market to develop a trading infrastructure ecosystem: in addition to the software and rulebooks developed by Abaxx Exchange and Abaxx Clearing, ACX will need to onboard FCMs’ members to facilitate individual client account clearing and settlement, and develop integration software with existing electronic trading platforms and back office data management systems.
Assemble sufficient levels of risk capital to support performance guarantees of the clearinghouse.

ACX is still under development and seeking final regulatory approvals; it is preparing to onboard customers and FCMs, and does not currently generate revenue. Commencing operations of ACX is dependent upon receiving approval from the MAS to operate Abaxx Exchange as an RMO. The regulatory process in Singapore is prone to delays given the profile of Abaxx as a startup tech-focused company that is not affiliated with any operating exchange group.

Although ACX has obtained agreement-in-principle from the MAS with respect to Abaxx Exchange and its status as an RMO, to address the risk of regulatory inertia and delay in Singapore with respect to receiving its ACH license for Abaxx Clearing, ACX has evaluated numerous alternative paths without the regulatory approvals necessary to engage its target customers. Moreover, ACX will require SGD 10,000,000 (CAD $9,700,000) from equity capital to be set aside for Abaxx Clearing as a minimum capital requirement to contribute towards the ACH default fund (the “ ACH Capital Requirement ”). While Abaxx expects to raise these funds in ACX from founding market participants and Singapore-based investors and institutions, there is no assurance that ACX or Abaxx will be successful in raising the required funds to satisfy the ACH Capital Requirement. Abaxx Clearing’s ongoing contribution to the ACH default fund will depend on the overall level of risk and open interest in the markets it operates, and not expected to surpass the initial contribution over the next 18 months.

To ensure Abaxx Exchange begins to commercialize prior to ACX satisfying the ACH Capital Requirement, ACX intends to contract with an existing US clearinghouse that already provides clearing and regulatory services for exchanges on an outsourced basis. This alternative would involve contracting with that clearinghouse and Abaxx Exchange completing an application to operate as a Foreign Board of Trade (“ FBOT ”) in the US. Given that a FBOT application is necessary for Abaxx Clearing to operate in the United State, ACX expects to initially subcontract the clearinghouse functionality of ACX a pre-existing US-based FBOT-approved clearinghouse.

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ACX has engaged regulatory counsel to initiate the FBOT application for Abaxx Exchange and draft an agency agreement with one of the reputable clearinghouses that subcontract their clearing capabilities to third parties. ACX has established preliminary commercial terms with a US clearinghouse in order to evaluate associated costs in the context of the capital and operating budgets.

Initiating the FBOT process in the US establishes regulatory relationships necessary to proceed under the current and primary alternative paths and also would be helpful if, for whatever reason, Abaxx determined it would be best to domicile its business in the US. Abaxx continues to evaluate other alternative approaches to mitigate risks of regulatory delay with respect to obtaining the ACH license.

Material risks associated with the alternatives above include the potential that projected regulatory approval timelines in the US could change as a result of the 2020 United States federal election and new appointees and priorities for US regulatory bodies. Changes to commercial terms offered by a previously identified US clearinghouse could also presents risks to the ACX launch strategy.

Software and IP Portfolio

Abaxx, through Abaxx Tech, has built a robust intellectual property base and intends to protect and commercialize new innovations through licensing agreements. Abaxx’s technology and intellectual property is wholly-owned in 11 patent families providing or seeking protection in strategically important countries. Abaxx has 12 pending applications. The following table provides the particulars of the patent applications under the Software and IP Portfolio.

Country	Application Number	Title	Filing Date	Publication Number	Publication Date
World Intellectual Property Organization	PCT/US2019/045158	Computer Method and Apparatus for Administering a Commodity Material Transaction via a Distributed Ledger	August 5, 2019	WO 2020/0288911	February 6, 2020
United States	16/692,211	Automated Settlement Of A Provision Payment For A Commodity Using A Distributed Ledger	November 22, 2019	US 2020/0193540	June 18, 2020
United States	16/684,522	System and Method Of Authenticating Conformity To Specification Using A Distributed Ledger	November 14, 2019	US 2020/0193449	June 18, 2020
World Intellectual Property Organization	PCT/US2019/061863	System and Method Of Authenticating Conformity To Specification	November 15, 2019	WO 2020/102760	May 22, 2020

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Country	Application Number	Title	Filing Date	Publication Number	Publication Date
		Using A Distributed Ledger
United States	16/703,726	System and Computer Method for Trading a Commodity With Carry Costs	December 4, 2019	US 2020/0184558	June 11, 2020
United States	16/706,586	Method and GUI for Seller Determination of Delivery Location in a Commodity Trade	December 6, 2019	US 2020/0184546	June 11, 2020
United States	16/706,457	Method and GUI for Creating Fungibility in a Commodity Backed Exchange Trade Security	December 6, 2019	US 2020/0202434	June 25, 2020
United States	16/708,398	Method and GUI for Settlement of Commodity Contracts Denominated in Commodity Contract Tokens	December 9, 2019	US 2020/0184560	June 11, 2020
United States	16/708,264	Method and GUI for Creating Optionality in a Commodity Contract Settlement Price	December 9, 2019	US 2020/0184559	June 11, 2020
United States	16/708,405	Computer Method and GUI for Displaying a Reflexive Index Price From the Settlement of Commodity Contracts	December 9, 2019	US 2020/0219089	July 9, 2020
World Intellectual Property Organization	PCT/US2019/045170	Method and Apparatus for Tokenization of a Natural Resource	August 5, 2019	WO 2020/028917	February 6, 2020
United States	16/708,377	Computer Method for Real Estate Futures Trading Using a	December 9, 2019	US 2020/018456	June 11, 2020

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Country	Application Number	Title	Filing Date	Publication Number	Publication Date
		Distributed Ledger and GUI

Future Developments

Abaxx intends to achieve the following milestones for its Software and IP Portfolio:

Milestone	Projected Completion	Estimated Cost ($)
Beta Launch of Abaxx Console for Abaxx Internal Operations	November 2020	NA
Launch Abaxx Verify mobile application for iOS and Android	April 2021	NA
Launch AbaxxSign mobile application for iOS and Android	June 2021	170,000
Launch Abaxx Console Software as a Service for Members of ACX	June 2021	210,000
Deploy Abaxx Exchange Software Suite to ACX	May 2021	260,000
Initial online market campaign for ID++ vision, Abaxx Chat, Verify, and Sign	August 2021	500,000
Build enterprise sales team for Abaxx Verify and Abaxx Sign standalone applications	September 2021	50,000

Licensing Partners

ACX

On May 15, 2019, Abaxx Tech and ACX entered into the ACX MLA whereby ACX licensed the Licensed Software. The geographical territory of the exclusive license granted to ACX includes Singapore, Hong Kong, the People’s Republic of China, all member states within the European Economic Community, the United Kingdom and the United States. Under the ACX MLA, in addition to receiving the Licensed Software, ACX also received the right for Abaxx Tech to provide Support Services. As consideration for the Licensed Software and the Support Services, ACX agreed to pay Abaxx Tech the ACX Royalty. See “ Part III – Information Concerning the Target Company – General Development of the Business – History ”.

Pasig & Hudson

In partnership with Pasig & Hudson, Abaxx has developed digital identity intellectual property. Pasig & Hudson offers a gift card processing solution, Gifmo, which allows retailers to launch their own gift cards. Pasig & Hudson is also developing digital asset related products for the Philippines, trust networks, and a smart contract platform.

Operem

Abaxx’s third intellectual property licensing vertical relates to intellectual property developed in partnership with Operem. Operem has developed a portfolio of digital tools that manage intellectual property by allowing secure disclosure of patentable ideas, offering patent search services that identify conceptually similar patents, and by offering a smart contract builder. Operem has filed protection for its portfolio of intellectual property and patents are pending.

Risk Factors

AN INVESTMENT IN THE COMMON SHARES OF THE COMPANY IS SPECULATIVE IN NATURE AND INVOLVES A HIGH DEGREE OF RISK. Due to the nature of the Company’s business and its present stage of development, prospective investors in the Company’s securities should carefully consider the specific and general risks described below and elsewhere in this AIF. Additional risks and uncertainties not presently known to the Company or that the Company does not currently anticipate will be material, may impair the Company’s business

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operations and its operating results and as a result could materially impact its business, results of operations, prospects and financial condition.

Nature of Business

Abaxx is a software technology company focused on developing exchange and marketplace infrastructure including trading and clearing software, financial messaging and data services, digital identity and access management, and with a majority-owned subsidiary engaged in the development of a regulated commodity futures exchange. Each of these activities involve a high degree of risk. The long-term profitability of Abaxx’s operations will be directly related to success of Abaxx’s ability to license its Software and IP Portfolio, and/or commercialize Abaxx Exchange and Clearing (ACX) to which may be affected by a number of factors outside Abaxx’s control.

Limited Operating History and Financial Resources

Abaxx has a limited history of operations and is in an early stage of development. As such, Abaxx will be subject to many risks common to such enterprises, including under-capitalization, cash shortages, limitations with respect to personnel, financial and other resources, and lack of revenues. There is no assurance that Abaxx will be successful in achieving a return on shareholders’ investment and the likelihood of success must be considered in light of its early stage of operations. There can be no assurance that Abaxx will be able to achieve its stated business objectives of commercializing the Software and IP Portfolio or commercializing ACX, or that any of their activities will generate positive cash flow. Consequently, there can be no assurance that Abaxx will be able to operate profitably. There can be no assurance that Abaxx will be able to obtain adequate financing in the future or that the terms of such financing will be favorable. Abaxx incurs substantial expenses in the establishment and operation of its business. A significant portion of Abaxx’s financial resources have been and will continue to be, directed to the development of its business and related activities. If Abaxx does not have access to the required funds to continue the operation and development of its business and operational activities, and to the extent that it does not generate cash flow and income, Abaxx’s long-term viability may be materially and adversely affected.

Dividends

To date, Abaxx has not paid any dividends on its outstanding securities and Abaxx does not expect to do so in the foreseeable future. Any decision to pay dividends on Abaxx Shares will be made by the Board.

Reporting Issuer Risk

As a reporting issuer, Abaxx will be subject to reporting requirements under applicable laws and NEO Exchange Policies. Compliance with these requirements will increase legal and financial compliance costs, make some activities more difficult, time consuming or costly, and increase demand on existing systems and resources. Among other things, Abaxx will be required to file annual, quarterly and current reports with respect to its business and results of operations and maintain effective disclosure controls and procedures and internal controls over financial reporting. In order to maintain and, if required, improve disclosure controls and procedures and internal controls over financial reporting to meet this standard, significant resources and management oversight may be required. As a result, management’s attention may be diverted from other business concerns, which could harm Abaxx’s business and result of operations. Abaxx may need to hire additional employees to comply with these requirements in the future, which would increase its costs and expenses.

Management of Abaxx expects that being a reporting issuer will make it more expensive to maintain director and officer liability insurance. This factor could also make it more difficult for Abaxx to retain qualified directors and executive officers.

Limited Assets

Abaxx holds shares in multiple development stage companies which are at different stages of development and maturity, although all of these companies are early-stage businesses. Each of the businesses may be impacted by factors outside of their control or all of them could be impacted by fluctuations in access to capital markets. The likelihood of success of Abaxx must be considered in light of the potential problems, expenses, difficulties, complications and delays frequently encountered in connection with the establishment and growth of any business.

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Abaxx will have limited financial resources and there is no assurance that additional funding will be available to Abaxx for further investments in the Software and IP Portfolio or ACX if required. There is no assurance that Abaxx can generate revenues, operate profitably, or provide a return on investment. The ability of Abaxx to raise capital, satisfy its obligations and provide a return to its shareholders will be dependent upon the future performance of Abaxx’s ability to commercialize ACX and license its Software and IP Portfolio.

Market for Securities

Abaxx Shares are listed on the NEO Exchange; however, there can be no assurance that an active and liquid market for Abaxx Shares will develop or be maintained. The market price for Abaxx Shares could be subject to wide fluctuations. Factors such as government regulation, interest rates, share price movements of Abaxx’s peer companies and competitors, as well as overall market movements, may have a significant impact on the market price of the securities of Abaxx.

Risks related to insurance of Abaxx’s operations

Abaxx intends to insure its operations. However, given the nature of its business and the business of its subsidiaries, such insurance may not be available, uneconomical for Abaxx, or the nature or level may be insufficient to provide adequate insurance cover. The occurrence of an event that is not covered or fully covered by insurance could have a material adverse effect on Abaxx. While Abaxx believes its operations have or will have adequate insurance, such insurance will be subject to coverage limits and exclusions and may not be available for the risks and hazards to which Abaxx is exposed. In addition, no assurance can be given that such insurance will be adequate to cover Abaxx’s liabilities or will be generally available in the future or, if available, that premiums will be commercially justifiable. If Abaxx were to incur substantial liability and such damages were not covered by insurance or were in excess of policy limits, or if Abaxx were to incur such liability at a time when it is not able to obtain liability insurance, its business, results of operations and financial condition could be materially adversely affected.

Additional Financing Requirements

Abaxx will require additional financing to obtain MAS approval for Abaxx Clearing to be recognized as an ACH and may require additional financing to commercialize ACX and to license its Software and IP Portfolio, and such financing is not in place as of the date of this AIF. There can be no assurance that Abaxx will be able to obtain adequate financing in the future, or that the terms of such financing will be favourable. Failure to obtain such additional financing could result in delay or indefinite postponement of commercialization of ACX or development of the Software and IP Portfolio by Abaxx. Further, revenues, financings and profits, if any, will depend upon various factors, including the successful creation, adoption and utilization of technologies developed by Abaxx and its subsidiaries, which will largely depend on Abaxx’s ability to provide a compelling value proposition to potential customers. Any additional equity financing may cause dilution to shareholders and may result in a change of control.

Furthermore, any additional equity financing may be dilutive to shareholders and debt financing, if available, may involve restrictive covenants. If additional funds are raised through the issuance of equity securities, the percentage ownership of the shareholders of Abaxx will be reduced, shareholders may experience additional dilution in net book value per share, or such equity securities may have rights, preferences or privileges senior to those of the holders of the common shares. If adequate funds are not available on acceptable terms Abaxx may be unable to develop or enhance its business, take advantage of future opportunity or respond to competitive pressures, any of which could have a material adverse effect on Abaxx’s business, financial condition and operating results.

Exposure and Sensitivity to Macro-Economic Conditions

Given the nature of the proposed commercialization and licensing activities, the results of operations and financial condition of Abaxx will be dependent, in part, upon general macro-economic conditions. Various factors affecting a sector could have a negative impact on Abaxx’s commercialization and licensing efforts and thereby have an adverse effect on its business.

Macro factors such as fluctuations in commodity prices and global political and economic conditions could also negatively affect Abaxx’s performance. Abaxx may be adversely affected by the ability of its subsidiaries to continue to raise capital. Moreover, company-specific risks could have an adverse effect on one or more of the investments that may constitute Abaxx’s portfolio at any point in time. Company specific and industry specific risks that may materially

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adversely affect Abaxx’s ability to commercialize ACX and its Software and IP Portfolio may have a materially adverse impact on its operating results. Factors affecting macro-economic conditions are and will be beyond Abaxx’s control.

Risks related to regulation by governmental authorities

The activities of Abaxx may be subject to regulation by governmental authorities wherever its business is conducted. Achievement of Abaxx’s business objectives are contingent, in part, upon compliance with regulatory requirements enacted by these governmental authorities and obtaining all regulatory approvals. Abaxx cannot predict the time required to secure all appropriate regulatory approvals for its products, or the extent of testing and documentation that may be required by governmental authorities. Any delays in obtaining, or failure to obtain regulatory approvals could have a material adverse effect on the business, results of operations and financial condition of Abaxx. The business of Abaxx is subject to rapid regulatory changes. Failure to keep up with such changes may adversely affect the business of Abaxx. Failure to follow regulatory requirements will have a detrimental impact on the business. Timing and nature of changes in legislation cannot be predicted and could irreparably harm the business.

Operations in Foreign Jurisdictions

Abaxx’s investments and interests may be exposed to various degree of political, economic and other risks and uncertainties in a foreign jurisdiction. In particular, Abaxx’s business objectives may be affected by the local and governing political and economic developments including and not limited to: expropriation of property including intellectual property rights, invalidation of government orders, permits or agreements to operate, political unrest, labour disputes, limitations on repatriation of earnings, limitation on foreign ownership, inability to obtain or delays in obtaining necessary approvals, licenses, permits, or authorizations, government participation, royalties, rates of exchange, high rates of inflation, price controls, exchange controls, currency fluctuations, taxation and changes in laws, regulations or policies.

Abaxx’s investments may also be adversely affected by the laws and policies of Canada affecting foreign trade, taxation and investment. In the event of a dispute arising in connection with a business interest of Abaxx in an international jurisdiction, Abaxx may be subject to the exclusive jurisdiction of foreign courts and may not be successful in subjecting foreign persons to the jurisdiction of courts of Canada or enforcing Canadian judgments in other jurisdictions. Abaxx may also be hindered or prevented from enforcing its rights with respect to a governmental instrumentality because of the doctrine of sovereign immunity. Accordingly, regulated exchange activities in international jurisdictions involving Abaxx or a subsidiary could be substantially affected by factors beyond Abaxx’s control, and which could have a material adverse effect on Abaxx.

COVID-19 Global Pandemic

COVID-19 is an infectious disease caused by severe acute respiratory syndrome coronavirus 2 (“ SARS-CoV-2 ”). Since December 31, 2019, the outbreak of COVID-19 has led governments worldwide to enact emergency measures to combat the spread of the virus. These measures, which include, among other things, the implementation of travel bans, self-imposed quarantine periods and social distancing, have cause material disruption to businesses globally, resulting in an economic slowdown. Such events may result in a period of business disruption, and in reduced operations, any of which could have a material adverse impact on Abaxx’s result of operations, financial condition and the market and trading price of Abaxx’s securities.

As of the date of this AIF, the duration and immediate and eventual impact of the COVID-19 pandemic remains unknown. In particular, it is not possible to reliably estimate the length and severity of these developments and the impact on the financial results and condition of Abaxx. While the outbreak of COVID-19 has not caused disruptions to the Company’s business, it may yet cause disruptions to Abaxx’s business and operations plans. Such disruptions may result from (i) restrictions that governments and communities impose to address the COVID-19 global pandemic; (ii) restrictions that Abaxx and its contractors and subcontractors impose to ensure the safety of employees and others; (iii) shortages of employees and/or unavailability of contractors and subcontractors; (iv) interruption of supplies from third-parties upon which Abaxx relies; and/or (v) inability to raise capital due to the economic uncertainty caused by COVID-19. Further, it is presently not possible to predict the extent or durations of these disruptions. These disruptions may have a material adverse effect on Abaxx’s business, financial condition and results of operations,

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which could be rapid and unexpected. These disruptions may severely impact Abaxx’s ability to carry out its business plans.

Protection of Abaxx Tech Software and IP Portfolio

The future success of Abaxx’s business depends upon the intellectual property rights acquired through research and development and acquisitions of intellectual property. Although Abaxx will seek to protect its proprietary rights through, for example, trademark registrations and patent applications, its actions may be inadequate to protect any proprietary rights or to prevent others from claiming violations of their proprietary rights. There can be no assurance that other companies are not investing or developing other technologies that are similar or identical to the technologies that may be developed by Abaxx. In addition, effective intellectual property protection may be unenforceable or limited in certain countries, and the global nature of the internet makes it impossible to control the ultimate designation of intellectual property held by Abaxx. If the protection of proprietary rights is inadequate to prevent unauthorized use or appropriation by third parties, the value of Abaxx’s Software and IP Portfolio may be diminished. Any of these events could have an adverse effect on Abaxx’s business and financial results.

If third party patents or patent applications contain claims infringed by the Software and IP Portfolio and these claims are valid, Abaxx may be unable to obtain licenses to these patents at a reasonable cost, if at all, and may also be unable to develop or obtain alternative technology. If such licenses cannot be obtained at a reasonable cost, the business could be significantly impacted. Further, the enforceability of the patents owned by Abaxx may be challenged and Abaxx’s patents could be partially or wholly invalidated following challenges by third parties.

Abaxx cannot assure its shareholders that its activities will not infringe on patents, trademarks or other intellectual property rights owned by others. If Abaxx is required to defend itself against intellectual property rights claims, it may spend a significant time and effort and incur significant litigation costs, regardless of whether such claims have merit. If Abaxx is found to have infringed on the patents, trademarks or other intellectual property rights of others, Abaxx may also be subject to substantial claims for damages or a requirement to cease the use of such disputed intellectual property, which could have an adverse effect on Abaxx’s revenue. Such litigation or claims and the consequences that could follow could distract management of Abaxx from the ordinary operation of its business and could increase costs of doing business, resulting a negative impact on the business, financial condition or results of Abaxx.

Abaxx’s Software and IP Portfolio also relies on trade secrets, which include information relating to the development and administration of its technology. The protective measures that Abaxx employs may not provide adequate protection for their trade secrets. This could erode the competitive advantage of the Software and IP Portfolio and materially harm the value of the business of Abaxx. Abaxx cannot be certain that others will not independently develop the same or similar technologies on their own or gain access to trade secrets or disclose such technology, or that Abaxx will be able to meaningfully protect its trade secrets and unpatented know-how and keep them secret.

Global Financing Conditions

Market events and conditions, including disruption in the Canadian, United States and international financial markets and other financial systems and the deterioration of Canadian, United States and global economic and financial market conditions, could, among other things, impact currency trading and impede access to capital or increase the cost of capital, which would have an adverse effect on Abaxx’s ability to fund its stated business objectives of commercializing ACX and licensing its Software and IP Portfolio. Current and future conditions in the domestic and global economies remain uncertain. As a result, it is difficult to estimate the level of growth or contraction for the economy as a whole. It is even more difficult to estimate growth or contraction in various parts, sectors and regions of the economy, including the market areas in which Abaxx intends to license its Software and IP Portfolio. Moreover, access to financing continues to be negatively impacted by COVID-19. As such, Abaxx and its subsidiaries may be subject to counterparty risk and liquidity risk. Abaxx will be exposed to various counterparty risks including, but not limited to: (i) through financial institutions that hold Abaxx’s cash; (ii) through companies that have payables to Abaxx; and (iii) through Abaxx’s insurance providers. Abaxx will also be exposed to liquidity risks in meeting its operating expenditure requirements in instances where cash positions are unable to be maintained or appropriate financing is unavailable. These factors may impact the ability of Abaxx to obtain loans and other credit facilities in the future, and, if obtained, on terms favourable to Abaxx. If these increased levels of volatility and market turmoil continue, Abaxx’s operations could be adversely impacted and the trading price of Abaxx Shares could be adversely affected.

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Acquisition Risk

If appropriate opportunities present themselves, Abaxx intends to invest in businesses, technologies, services or products that Abaxx believes will add value to its Software and IP Portfolio. There can be no assurance that Abaxx will be able to identify, negotiate or finance future acquisitions successfully, or to integrate such acquisitions with its current business. The process of integrating an acquired business, technology, service or product into Abaxx may result in unforeseen operating difficulties and expenditures and may absorb significant management attention that would otherwise be available for ongoing development of Abaxx’ business. Future acquisitions could result in potentially dilutive issuances of equity securities, the incurrence of debt, contingent liabilities and/or amortization expenses related to goodwill and other intangible assets, which could materially adversely affect Abaxx’s business, results of operations and financial condition. Any such future acquisitions of other businesses, technologies, services or products might require Abaxx to obtain additional equity or debt financing, which might not be available on terms favourable to Abaxx, or at all, and such financing, if available, might be dilutive.

Risks related to volatility of share price, absence of dividends and fluctuation of operating results.

Market prices for the securities of technology companies have historically been highly volatile. Factors such as fluctuation of Abaxx’s operating results, announcements of technological innovations, patents or new commercial products by Abaxx or competitors, and other factors could have a significant effect on the share price or trading volumes for Abaxx Shares. Abaxx has not paid dividends to date and Abaxx does not expect to pay dividends in the foreseeable future.

Competition

Abaxx may face intense competition from other companies, some of which can be expected to have longer operating histories and more financial resources and more marketable intellectual property than Abaxx. To remain competitive, Abaxx will require a continued high level of investment in research and development, marketing, sales and client support. Abaxx may not have sufficient resources to maintain research and development, marketing, sales and client support efforts on a competitive basis which could materially and adversely affect the business, financial condition and results of operations of Abaxx.

Many of Abaxx’s competitors and potential competitors are larger and have greater name recognition, longer operating histories, larger marketing budgets and significantly greater resources than Abaxx does. With the introduction of new technologies and market entrants, Abaxx expects competition to continue to intensify in the future. If Abaxx fails to compete effectively, its business will be harmed. For these reasons, Abaxx may not be able to compete successfully against its current and future competitors.

Some of Abaxx’s current and potential competitors have significantly greater resources and better competitive positions in certain markets than Abaxx does. These factors may allow Abaxx’s competitors to respond more effectively than the Issuer to new or emerging technologies and changes in market requirements. Abaxx’s competitors may develop products, features, or services that are similar to Abaxx or that achieve greater market acceptance, may undertake more far-reaching and successful product development efforts or marketing campaigns, or may adopt more aggressive pricing policies. Certain competitors could use strong or dominant positions in one or more markets to gain a competitive advantage against Abaxx. As a result, Abaxx’s competitors may acquire and engage users at the expense of the growth or engagement of its user base, which may negatively affect Abaxx’s business and financial results. Abaxx believes that its ability to compete effectively depends upon many factors both within and beyond Abaxx’s control, including:

the usefulness, ease of use, performance, and reliability of Abaxx’s products and services compared to its competitors;
customer service and support efforts;
marketing and selling efforts;
Abaxx’s financial condition and results of operations;
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changes mandated by legislation, regulatory authorities, or litigation, some of which may have a disproportionate effect on Abaxx;
acquisitions or consolidation within Abaxx’s industry, which may result in more formidable competitors;
Abaxx’s ability to attract, retain, and motivate talented employees and consultants;
Abaxx’s ability to cost-effectively manage and grow its operations; and
Abaxx’s reputation and brand strength relative to that of its competitors.

The financial technology sector and start-up software technology businesses, given the market potential and innovation, are highly competitive. Abaxx has invested in technologies that will compete with numerous, wellestablished companies and individuals, including competitors with greater financial, technical and other resources than Abaxx or its subsidiaries, in the development and commercialization of financial software technologies. The ability of Abaxx to successfully develop financial technology assets in the future will depend not only on its ability to market its current Software and IP Portfolio, but also on its ability develop new intellectual property. There is no assurance that Abaxx will continue to be able to develop intellectual property that competes successfully with the development and deployment of potentially profitable financial software technologies.

Growth Risk

As new software technologies in Self-Sovereign Identity (SSI), Machine Learning and Natural Language Processing (ML/NLP), and blockchain become more widely available, Abaxx expects its Software and IP Portfolio to evolve. As a result, to stay current with the industry, Abaxx’s business model may need to evolve as well. From time to time, Abaxx may modify aspects of its business model. Abaxx cannot offer any assurance that these or any other modifications will be successful or will not result in harm to the business. Abaxx may not be able to manage growth effectively, which could damage Abaxx’s reputation, limit Abaxx’s growth and negatively affect its operating results.

Risks related to conflicts of interest

Certain of the directors and officers of Abaxx are also directors and officers of other companies, and conflicts of interest may arise between their duties as officers and directors of Abaxx and as officers and directors of such other companies.

In addition, certain directors may, from time to time, have positions or interests with ACX. For instance, Joshua Crumb is CEO and Chairman of Abaxx and a shareholder and director of ACX. In accordance with the ABCA, directors who have a material interest in any Person who is a party to a material contract or proposed material contract with Abaxx are required, subject to certain exemptions, to disclose that interest and generally abstain from voting on any resolution to approve the contract. In addition, the directors and the officers of Abaxx are required to act honestly and in good faith with a view to the best interests of Abaxx.

Political Regulatory Risks

Any changes in government policy may result in changes to laws affecting ownership of assets, monetary policies, taxation, rates of exchange, labour relations, repatriation of income and return of capital. This may affect both Abaxx’s ability to develop intellectual property and assist in the commercialization of ACX. The possibility that future governments may adopt substantially different policies, which might extend to expropriation of intellectual property, cannot be ruled out.

Currency Risk

Abaxx’s operations and revenue will be incurred primarily in US Dollars and Singapore Dollars, and its readily accessible market to raise future financing is in Canadian dollars. Depending on whether Abaxx operates profitably, currency fluctuations may affect future cash flow which Abaxx may realize. Abaxx may have financial risk exposure to varying degrees relating to the currency risk and volatility of each of the countries in which it operates. If income

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is generated in currency besides the US Dollar, Singapore Dollar or Canadian Dollar, there may be a material adverse effect on Abaxx’s revenue.

Contractual Risk

Abaxx is a party to various contracts essential to the execution of its stated business objectives of licensing intellectual property and commercializing ACX and it is always possible that the other contracting parties may not fully perform their obligations. Any dereliction of contractual duties could and may have a material adverse effect on Abaxx’s ability to generate revenue.

Profitability

There is no assurance that Abaxx will earn profits in the future, or that profitability will be sustained. There is no assurance that future revenues will be sufficient to generate the funds required to continue Abaxx’s operations, portfolio, and marketing activities. If Abaxx does not have sufficient capital to fund the development and maintenance of its Software and IP Portfolio or the commercialization of ACX, it may be required dispose of certain assets, reduce its marketing efforts or forego certain business development strategies, which could adversely affect an investment in Abaxx.

Risks related to value of securities.

The value of Abaxx’s Shares may be reduced for a number of reasons, many of which are outside the control of Abaxx, including:

general economic and political conditions in Canada, the United States and globally;
governmental regulation of digital commodity assets technology and exchange and marketplace industries;
failure to subdue the COVID-19 pandemic;
failure to achieve desired outcomes by Abaxx;
failure to obtain industry partner and other third-party consents and approvals, when required;
stock market volatility and market conditions;
competition for, among other things, capital, and skilled personnel;
the need to obtain required approvals from regulatory authorities;
revenue and operating results failing to meet expectations in any particular period;
investor perception of the financial technology sector and exchange and marketplace industries;
limited trading volume of Abaxx Shares;
announcements relating to Abaxx’s business or the businesses of Abaxx’s competitor’s; and
Abaxx’s ability or inability to raise additional funds.

Tax Amendment Risk

Legislation may be proposed, both in domestically and internationally, that could add a transaction tax or change the way market participants are taxed. If such proposals were to become law, they could have a negative impact on the securities industry and on the value of Abaxx.

In addition to proposed tax changes that could affect market participants, changes in tax laws, regulations or policies against corporations could result in Abaxx paying higher taxes, which would in turn reduce net income.

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Litigation Risks

Abaxx and/or its directors and officers may be subject to a variety of civil or other legal proceedings, with or without merit. From time to time in the ordinary course of its business, Abaxx may become involved in various legal proceedings, including commercial, employment and other litigation and claims, as well as governmental and other regulatory investigations and proceedings. If Abaxx is unable to resolve these disputes favourably, it may have a material and adverse effect on the financial performance of Abaxx. Even if Abaxx is involved in litigation and wins, such matters can be time-consuming, divert management’s attention and resources and cause Abaxx to incur significant expenses. Litigation may also create a negative perception of Abaxx’s brand. Securities litigation as well as potential future proceedings could result in substantial costs and damages and divert Abaxx’s management’s attention and resources. Any decision resulting from any such litigation that is adverse to Abaxx could have a negative impact on Abaxx’s financial position.

Going Concern Risk

Abaxx’s financial statements have been prepared on a going concern basis under which an entity is considered to be able to realize its assets and satisfy its liabilities in the ordinary course of business. Abaxx’s future operations dependent upon the identification and successful completion of equity or debt financing and the achievement of profitable investments at an indeterminate time in the future. There can be no assurance that Abaxx will be successful in completing an equity or debt financing or in achieving profitability.

The financial statements do not give effect to any adjustments relating to the carrying values and classification of assets and liabilities that would be necessary should Abaxx be unable to continue as a going concern.

Economic environment and global economic risk

Abaxx’s operations could be affected by the economic context should the unemployment level, interest rates or inflation reach levels that influence consumer trends and consequently, impact Abaxx’s sales and profitability. Any economic slowdown and downturn of global capital markets could make the raising of capital by equity or debt financing more difficult. Access to financing has been negatively impacted by the ongoing global economic risks. These factors may impact Abaxx’s ability to raise equity or obtain loans and other credit facilities in the future and on terms favourable to Abaxx. If uncertain market conditions persist, Abaxx’s ability to raise capital could be jeopardized, which could have an adverse impact on Abaxx’s operations and the trading price of Abaxx’s Shares on the stock exchange.

Third Party Risk

In order to grow its business, Abaxx anticipates that it will continue to depend on relationships with third parties, such as alliance partners, distributors, system integrators and developers. Identifying partners, and negotiating and documenting relationships with them, requires significant time and resources. Abaxx’s competitors may be more effective in providing incentives to third parties to favour their products or services, or to prevent or reduce subscriptions to the services offered by subsidiaries of Abaxx. In addition, acquisitions of Abaxx’s partners by its competitors could result in a decrease in the number of current and potential customers, as its partners may no longer facilitate the adoption of Abaxx’s technology by potential customers.

If Abaxx is unsuccessful in establishing or maintaining its relationships with third parties, its ability to compete in the marketplace or to grow its revenue could be impaired, and its operating results, and ultimately, Abaxx’s operating results, may suffer. Even if Abaxx is successful in retaining third party relationships, Abaxx cannot assure investors that these relationships will result in increased revenue or profitability for Abaxx. Furthermore, if Abaxx’s partners fail to perform as expected, the reputation of Abaxx and its subsidiaries may be harmed, and its business and operating results could be adversely affected, and ultimately, Abaxx may have to write-off certain assets.

Clearinghouse Risk

ACX expects to operate a clearinghouse operation as part of operating an exchange business utilizing its proprietary settlement and clearing technologies. Such a clearinghouse operation exposes Abaxx’s profitability to counterparties

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with differing risk profiles. ACX will need to guarantee transactions submitted by clearing firms with counterparties in the financial industry, including brokers and dealers, commercial banks, investment banks, mutual and hedge funds, and other institutional customers. ACX and ultimately Abaxx, could be adversely impacted by the financial distress or failure of one or more of its clearing firms.

Moreover, a substantial part of the working capital of ACX and other subsidiaries of Abaxx may be at risk if a clearing firm defaults on its obligations to the clearinghouse and its margin and guaranty fund deposits are insufficient to meet its obligations. Although ACX has risk mitigation policies and procedures to help ensure that clearing firms can meet their obligations, these policies and procedures may not succeed in detecting problems or preventing defaults. Abaxx cannot assure that these measures will be sufficient to protect market participants from a default or that they will be sufficient to protect Abaxx from being adversely affected in the event of such a default.

To become a clearing member, a firm must meet certain minimum capital requirements and must deposit collateral to meet performance bond and guaranty fund requirements. ACX, in particular, may accept a variety of collateral to satisfy these requirements, including cash, regulated money market mutual funds, Sovereign Treasury securities, Sovereign Government Agency securities, letters of credit, gold, equities, and foreign sovereign debt, and subject them to established discounts based on the type of collateral and maturity. ACX does not currently have access to SGD 10,000,000, the minimum capital requirement for ACHs. In the event ACX cannot satisfy the minimum capital requirements for ACHs imposed by MAS, ACX intends to subcontract the clearinghouse component of its strategy to a regulated third-party.

If and when ACX obtains financing to provide the minimum capital requirements for an ACH, there is no guarantee the collateral will maintain its value. To the extent a clearing firm is not compliant with capital, margin or guaranty fund requirements, it would be required to promptly come into compliance by adding capital or collateral, decreasing its proprietary trading activity and/or transferring customer accounts to another clearing firm. These actions could result in a decrease in trading activity on ACX, or any other exchange operated by a subsidiary of Abaxx, and in turn provide a negative adverse effect on Abaxx’s revenues.

Inadequacy of Risk Management Procedures

In the normal course of ACX’s business, matters are discussed with regulators during regulatory examinations, or ACX may otherwise become subject to their inquiry and oversight. The Monetary Authority of Singapore (“ MAS ”) has broad enforcement powers to censure, fine, issue cease-and-desist orders, prohibit ACX from operating as a recognized exchange, or suspend or revoke its designation as an approved exchange. ACX’s ability to comply with applicable laws and rules is largely dependent on the establishment and maintenance of compliance, review and reporting systems, as well as its ability to attract and retain qualified compliance and other risk management personnel. ACX faces the risk of significant intervention by regulatory authorities, including extensive examination and surveillance activity. In the case of alleged non-compliance with applicable laws or regulations, ACX could be subject to investigations and judicial or administrative proceedings that may result in substantial penalties or civil lawsuits, including by customers, for damages, which could be significant. Any of these outcomes may adversely affect Abaxx’s reputation, financial condition and operating results. In extreme cases, these outcomes could adversely affect ACX’s ability to operate, and ultimately, may adversely affect the potential revenues to Abaxx.

ACX’s policies and procedures to identify, monitor, and manage its risks may not be fully effective. Some of ACX’s risk management methods depend upon evaluation of information regarding markets, customers or other matters that are publicly available or otherwise accessible by ACX. That information may not in all cases be accurate, complete, up-to-date or properly evaluated. Management of operational, financial, legal, regulatory and strategic risk requires, among other things, policies and procedures to record properly and verify a large number of transactions and events. Abaxx cannot assure investors that ACX’s policies and procedures will always be effective or they will always be successful in monitoring or evaluating the risks to which ACX may be exposed.

Malicious Actor Risk

There have been a number of highly publicized cases involving fraud or other misconduct by employees of financial services firms in recent years. Misconduct by employees of Abaxx or its subsidiaries and/or agents could include hiding unauthorized activities, improper or unauthorized activities on behalf of customers or improper use or unauthorized disclosure of confidential information. Misconduct could subject Abaxx or its subsidiaries to financial losses or regulatory sanctions and seriously harm its reputation. It is not always possible to deter misconduct, and the precautions Abaxx takes to prevent and detect this activity may not be effective in all cases. The employees and agents

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of Abaxx or its subsidiaries may commit errors that could subject it to financial claims for negligence, as well as regulatory actions, which may impact the value of Abaxx.

Third-party Software License Risk

ACX currently licenses software that provides the technological framework to its business objectives. Abaxx anticipates that ACX may continue to rely on such third-party software and development tools in the future, including a software license ultimately managed by Nasdaq, Inc. Although Abaxx believes that there are commercially reasonable alternatives to the third-party software that ACX currently licenses, this may not always be the case, or it may be difficult or costly to replace. In addition, integration of the software used in technology licensed by Abaxx or services offered by ACX with new third-party software may require significant work and require substantial investment of Abaxx’s time and resources. Also, to the extent that Abaxx’s technology or ACX’s services depend upon the successful operation of third-party software in conjunction with its own software, any undetected errors or defects in this third-party software could prevent the deployment or impair the functionality of Abaxx’s technology or ACX’s services, delay new services introductions, result in a failure of Abaxx’s technology or ACX’s services, and injure Abaxx ACX’s reputation which could adversely affect the value of Abaxx. Abaxx’s or its subsidiaries’ use of additional or alternative third-party software would require the entering into of additional license agreements with third parties, which may or may not be on favourable terms to Abaxx or ACX.

Competitive Risks for Abaxx Tech

The success of Abaxx’s and its subsidiaries’ business depends, in part, on the ability of their technology to create interactive electronic marketplaces that have the required functionality, performance, capacity, reliability and speed to attract and retain customers. The electronic trading platform and financial messaging marketplaces continues to be competitive, and accordingly, Abaxx Tech will be subject to risks, expenses and uncertainties that are typically encountered in a rapidly evolving market. Certain risks to Abaxx Tech include the failure or inability to:

provide reliable and cost-effective services to its customers;
develop, in a timely manner, the required functionality to support electronic trading in a manner that is competitive with the functionality supported by other electronic markets;
match fees of its competitors;
respond to technological developments or service offerings by its competitors; and
generate sufficient revenue to justify the substantial capital investment it has made and will continue to make to enhance its electronic trading platform.

If Abaxx Tech does not develop and enhance their electronic trading systems, or are unable to develop electronic trading systems that incorporate other products and markets or if those electronic trading systems do not have the required functionality, performance, capacity, reliability, and speed desired by its customers, then either Abaxx Tech’s ability to successfully compete and its revenue and profits will be adversely affected.

To facilitate any interactive electronic marketplace utilizing Abaxx’s proprietary applications, Abaxx Tech may also have to rely on any potential client’s ability to have the necessary back office functionality to support their technology. To the extent the customers of Abaxx Tech are not prepared and/or lack the resources or infrastructure, the success of Abaxx Tech may be compromised, which may have a material adverse effect on Abaxx’s revenues and performance.

Competitive Risks for ACX

The commodity futures exchange industry continues to be highly competitive with several large global competitors, and accordingly, ACX will be subject to risks, expenses and uncertainties that are typically encountered in a rapidly evolving market. Certain risks to ACX include the failure or inability to:

provide reliable and cost-effective services to its customers;
develop, in a timely manner, the required functionality to support electronic trading in its key products in a manner that is competitive with the functionality supported by other electronic markets;
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match fees of its competitors;
attract independent software vendors to write front-end software that will effectively access its electronic trading system and automated order routing system;
respond to technological developments or service offerings by its competitors; and
generate sufficient revenue to justify the substantial capital investment it has made and will continue to make to enhance its electronic trading platform.

System Failure Risk

ACX will be heavily dependent on the capacity, reliability and security of the computer and communications systems and software supporting their operations. The operation of interactive electronic trading marketplaces by ACX will require the receipt of all trade order information via electronic means, through either public and private communication networks. If ACX’s network, or its third-party providers, fail or operate slowly, one of the following may occur:

unanticipated disruptions in service to its customers;
slower response times;
delays in customers’ trade execution;
failed settlement of trades;
incomplete or inaccurate accounting, recording or processing of trades;
financial losses;
security breaches;
litigation or other customer claims;
loss of customers; and
regulatory sanctions.

Abaxx cannot assure that the customers of ACX will not experience system failures from power or telecommunication failure, acts of God, war or terrorism, human error, natural disasters, pandemics, fire, sabotage, hardware or software malfunctions or defects, computer viruses, acts of vandalism or similar occurrences. If the systems of ACX do not operate properly, are compromised or are disabled, including as a result of a system failure, employee or customer error or misuse of its systems, the financial performance of Abaxx could be materially affected.

The expansion or development of the business, including through acquisitions, increased product offerings or other strategic growth opportunities, may cause disruptions in Abaxx’s business, which may have an adverse effect on Abaxx’s business, operations or financial results.

Abaxx may seek to expand and develop its business, including through acquisitions, increased product offerings, or other strategic growth opportunities. In the ordinary course of business, Abaxx may review, analyze, and evaluate various potential transactions or other activities in which it may engage. Such transactions or activities could cause disruptions in, increase risk or otherwise negatively impact its business. Among other things, such transactions and activities may:

disrupt Abaxx’s business relationships with its customers, depending on the nature of or counterparty to such transactions and activities;
direct the time or attention of management away from other business operations;
fail to achieve revenue or margin targets, operational synergies or other benefits contemplated;
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increase operational risk or volatility in Abaxx’s business; and/or
result in current or prospective employees experiencing uncertainty about their future roles with Abaxx, which might adversely affect Abaxx’s ability to retain or attract key managers or other employees.

Security Threats

The infrastructure of ACX may be vulnerable to damage, disruptions, or shutdowns due to unauthorized access, computer viruses, cyber-attacks, and other security breaches. An attack attempt or security breach could potentially result in interruption or cessation of certain of the ACX services to its customers, an inability to meet expected levels of service, or compromise the data transmitted over customers’ networks. Abaxx cannot guarantee that security measures will not be circumvented, resulting in customer network failures, data breaches or interruptions that could impact their customers’ network availability and have a material adverse effect on their business, financial condition, or operational results.

ACX (or any other subsidiaries of Abaxx that may operate a marketplace exchange) may be required to expend significant resources to protect against or recover from such threats. If an actual or perceived breach of security systems occur, the market perception of the effectiveness of their security measures could be harmed, and ACX (or any other subsidiaries of Abaxx that may operate a marketplace exchange) may lose customers in the event of such a breach. Further, the perpetrators of cyber-attacks are not restricted to particular groups or persons. These attacks may be committed by employees, contractors, or external actors operating from any geography. Any such event could result in legal claims or penalties, disruption in operations, misappropriation of sensitive data, damage to the reputation of ACX (or any other subsidiaries of Abaxx that may operate a marketplace exchange), lead to negative market perception, or costly response measures, which could adversely affect the value of Abaxx.

Limited Management Experience

Although the Abaxx directors and executives have breadth and depth building these types of companies, the management teams of certain subsidiaries of Abaxx may have a limited history of past performance in managing marketplaces or software technology companies, and the past performances of management in other positions are no indication of their ability to successfully manage a start-up company. If the experience of management is inadequate or unsuitable to manage a subsidiary of Abaxx, operations may be adversely affected, which may negatively impact the value of Abaxx.

Reliance on Management and Key Personnel

Abaxx and subsidiaries thereof have small senior management groups, which are expected to be sufficient in the shortterm given the contemplated level of business activity. Abaxx’s future growth and its ability to develop depends, to a significant extent, on its ability to attract, train, and retain highly qualified personnel. Abaxx and its subsidiaries will rely on a limited number of key employees, consultants and members of senior management and there is no assurance that Abaxx or its subsidiaries will be able to retain such key employees, consultants, and senior management. The loss of one or more of such key employees, consultants, or members of senior management, if not replaced, could have a material adverse effect on Abaxx’s business, financial condition and prospects, which may negatively impact the value of Abaxx.

To operate successfully and manage its potential future growth, Abaxx must attract, train, and retain highly qualified managerial, financial, and technological personnel. Abaxx is expected to face fierce competition in the exchange and marketplace technology industry. If Abaxx is unable to hire and retain additional qualified personnel in the future to develop its business, then its financial condition and operating results could be adversely affected, which may negatively impact the value of Abaxx’s investments.

Abaxx does not plan to maintain, key-person insurance on the lives of any of their key personnel. Without key person insurance, Abaxx may not have the financial resources to develop or maintain its business until those individuals are replaced.

Software Development Risk

ACX’s services rely on software developed and maintained by third-party software vendors. ACX also expects that it may incorporate software from third-party vendors and open source software in its future services. ACX’s business

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may be disrupted if this software, or functional equivalents of this software, were either no longer available to ACX or no longer offered to it on commercially reasonable terms. In either instance, ACX would either be required to redesign services to function with alternate third-party software or open source software, or ACX may need to develop these components itself, which could result in increased costs and could result in delays in providing future services; furthermore, ACX might be forced to limit the features available in its current or future services, which may affect ACX’s ability to execute on its business plan, which may materially adversely affect the value of Abaxx.

Undetected Error Risk

Abaxx’s intellectual property and software suite are highly technical, and if contain undetected errors, the business of a Abaxx could be adversely affected. It is possible that Abaxx’s technology may now or in the future contain undetected errors, bugs or vulnerabilities. Some errors in software code may only be discovered after the code has been released. Any errors, bugs or vulnerabilities in code developed by Abaxx or its subsidiaries and discovered after release could result in damage to Abaxx’s reputation, loss of clients, loss of revenue, or liability for damages, any of which could adversely affect Abaxx’s Software and IP Portfolio and financial results. Several intellectual property applications are “pending” status and have not yet been examined by the United States Patent and Trademark Office or other global sovereign patent examiners. There is no assurance that the applications will be approved. There is no assurance that the development of software using Abaxx’s intellectual property will result in commercially viable software for customers.

Risk of Technological Change

To remain competitive, Abaxx must continue to enhance and improve the responsiveness, functionality and features of its software technology and intellectual property. The Internet and the electronic commerce industry are characterized by rapid technological change, changes in user and customer requirements and preferences, frequent new product and service introductions embodying new technologies and the emergence of new industry standards and practices that could render Abaxx’s existing operations and proprietary technology and systems obsolete. There can be no assurance Abaxx will successfully implement new technologies and transaction processing systems to meet industry standards and if unable to adapt in a timely matter, the business of Abaxx could be materially affected. The ability of Abaxx and its subsidiaries to effectively use the information generated by their information technology systems, as well as their success in implementing new systems and upgrades, may affect their ability to: conduct business with their clients, including delivering services and solutions; manage their inventory and accounts receivable; purchase, sell, ship and invoice their products and services efficiently and on a timely basis; and maintain their cost-efficient operation model while expanding their business in revenue and in scale. The failure of Abaxx or its subsidiaries to use, maintain and update proper technological systems may negatively impact the value of Abaxx. There can be no assurance that new and unforeseeable technology, either hardware-based or software-based, will not disrupt the existing state of technology and that the existing technology of Abaxx will not become obsolete.

Dependence of Technical Infrastructure

The ability for Abaxx or ACX to attract, retain and serve customers is dependent upon the reliable performance of their technology, including software platforms, and the underlying technical infrastructure. It is possible that Abaxx Tech or ACX may fail to effectively scale and grow its technical infrastructure to accommodate increased demands. In addition, the success of Abaxx will likely be reliant upon third party partners such as financial service providers, clearing and settlement organizations, telephone companies, on-line service providers, data processors, and software and hardware vendors. Any disruption or failure in the services Abaxx or any of its subsidiaries receive from third party partners used to facilitate its business could harm Abaxx’s business, and consequently, may adversely affect the value of Abaxx. Any financial or other difficulties these partners face may adversely affect Abaxx’s business, and Abaxx or its subsidiaries exercise little control over these partners, which increases vulnerability to problems with the services they provide.

Use and Storage of Personal Information and Compliance with Privacy Laws

Abaxx through ACX may receive, store and process personal information and other customer data including, addresses, telephone numbers, images of government identification, and information relating to financial transactions. As a result, Abaxx and each subsidiary thereof must comply with the applicable federal, state, and local laws of the

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relevant jurisdiction relating to the collection, use, disclosure, storage, and safeguarding of personal information. Any failure or perceived failure by a subsidiary of Abaxx to comply with its privacy policies, privacy-related obligations to customers or other third parties, privacy-related legal obligations, or any compromise of security that results in the unauthorized release or transfer of personally identifiable information or other customer data, may result in governmental enforcement actions, fines, or litigation, which could adversely affect the value of Abaxx.

Slow Acceptance of Products

The marketplace may be slow to accept or understand the significance of Abaxx’s or Abaxx Tech’s technology due to their unique nature and the competitive landscape. If Abaxx is unable to promote, market and licence its Software and IP Portfolio and secure relationships with strategic partners, Abaxx’s business and financial condition will be adversely affected.

DIVIDENDS OR DISTRIBUTIONS

To date, Abaxx has not paid any dividends on its outstanding securities and does not expect to do so in the foreseeable future. Any decision to pay dividends on Abaxx common shares will be made by its board of directors.

CAPITAL STRUCTURE

Following the reverse take-over with New Millennium Iron Corp., the capital structure of Abaxx is as follows:

Designation of Security	Number Authorized	Number outstanding
Abaxx Common Shares	Unlimited	63,558,062

MARKET FOR SECURITIES

The Company trades on the Aequitas NEO Exchange, under the ticker symbol “ABXX”, as of December 18, 2020.

The following table represents the price range and trading volume for the Common Shares, as reported by the Aequitas NEO Exchange, for each month since the Company’s initial listing:

Month	Price	Range	Volume
	High (CAD$)	Low (CAD $)
December 18 to 31, 2020	4.40	3.85	6,943,435

ESCROWED SECURITIES

The following table lists, to the knowledge of Abaxx, the holder of escrowed securities, the number of securities held in escrow (the “ Escrowed Securities ”) pursuant to the Abaxx Escrow Agreement (the “ Escrow Agreement ”), and the percentage of securities held in escrow by Mr. Joshua Crumb, a holder of escrowed securities before and after the arrangement between Abaxx and New Millennium.

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	Pre-Arrangement	Pre-Arrangement		Post-Arrangement	Post-Arrangement
Name and Municipality of Residence of Securityholder	Designation of class	Number of securities held in escrow	Percentage of class(1)(2)	Designation of Class(3)	Number of securities to be held in escrow(4)	Percentage of class(1)
Joshua Crumb Huntsville, Ontario	Abaxx Common Shares	13,652,512	21.4%	Abaxx Common Shares	11,055,032	17.4%

Notes:

(1) On an undiluted basis.

(2) After taking into effect the Share Consolidation and Exchange Ratio.

(3) The Escrow Agent of the Abaxx securities subject to escrow is Computershare Trust Company of Canada with an address at 100 University Ave., Toronto, Ontario M5J 2Y1.

The Escrow Agent is escrow agent for the Abaxx Escrow Agreement. The Escrow Agreement includes the following principal terms:

a. 25% of the escrowed securities released from escrow on December 17, 2020;
b. 33% of the remaining escrowed securities will be released from escrow on June 17, 2021;
c. 50% of the remaining escrowed securities will be released from escrow on December 17, 2021; and
d. The remaining escrowed securities will be released on the June 17, 2022.
e. While in escrow, none of the escrowed securities can be transferred, either directly or indirectly through a change in control of a holding company, without the consent of the NEO Exchange.

DIRECTORS AND OFFICERS

The following table sets out, for each of the Company’s directors and executive officers, the person’s name, province and country of residence, positions with the Company, principal occupation, and, if a director, the date upon which the person became a director. Each director will hold office until the next annual meeting of the Company unless his or her office is earlier vacated:

Name, Municipality of Residence, Proposed Offices	Principal Occupation During Last Five Years(1)	Prior Position with New Millennium or Abaxx and Term of Such Position	Number of Abaxx Shares(2)	Percentage of Class Held or Controlled(2)
Joshua Crumb(4) (5) Huntsville, Canada Director (Chairman)	Chief Strategy Officer of Bitgold Inc. (August 2014 to July 2015); Chief Strategy Officer of Goldmoney Inc. (July 2015 to June 2018); Director of various public companies including: Mene Inc. (TSXV: MENE) (October 2018 to present); Fortress Technologies Inc. (TSXV: FORT) (August 2018 to present); Solitario Zinc Corp. (TSX: SLR) (July 2017 to present); and COIN HODL Inc. (TSXV: COIN) (May 2018 to present)	Chairman and Director of Abaxx: (January 25, 2018 – present).	11,055,032(4)	17.4%

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Name, Municipality of Residence, Proposed Offices		Prior Position with New Millennium or Abaxx and Term of Such Position	Number of Abaxx Shares(2)	Percentage of Class Held or Controlled(2)
	Principal Occupation During Last Five
	Years(1)
Thom McMahon(4)(5) Singapore Director	Managing Director of UD Trading Group Holdings Pte Ltd. (April 2014 to December 2016) Director Asia of Dillon Gage Asia Pte Ltd. (January 2017 to December 2018) Co-Founder CEO of Aircarbon Pte Ltd. (January 2019 to Present)	No prior role	Nil	Nil
Dan McElduff New York, USA President, ACX	Compliance Manager, Vice President of State Street Corporation (November 2013 to June 2016) Sole Proprietor (November 2016 to April 2019)	President of Abaxx Singapore Pte Ltd. (May 2019 to Present)	20,225	0.03%
Joe Raia New Jersey, USA Chief Commercial Officer, ACX	Managing Director of Goldman Sachs & Co. (April 2011 to April 2018) Managing Director, Head of Global Energy Markets of R.J. O’Brien and Associates (April 2018 to December 2019)	Chief Commercial Officer of Abaxx Exchange (December 2019 to Present)	Nil	Nil
Margot Naudie(3) Toronto, Ontario Director	Senior Portfolio Manager at Marret Asset Management (September 2015-June 2017); Senior Portfolio Manager of the IP Alpha Fund (December 2017 to present); President of Elephant Capital Inc. (December 2017 to present); Director of Osino Resources Corp. (August 2020 to present); Director of Polaris Infrastructure Inc. (June 2020 to present);	No prior role	107,033	0.2%
Catherine Flax(3)(4)(5) New York, USA Director	Managing Director of BNP Paribas (November 2013 to March 2016) CEO of Pefin (March 2016 to October 2018) Managing Director of CRA, Inc. (April 2019 to Present)	No prior role	100,000	0.1%
Robert Boisjoli Montreal, Quebec Chief Financial Officer	Chairman of Palos Management Inc. (August 2016 to July 2020) Managing director of Atwater Financial Group, a firm providing back-office services for reporting issuers Partner at Robert Boisjoli & Associates S.E.C., a consulting firm specializing mainly in business valuations	Chief Financial Officer of New Millennium: (November 2018 – present).	30,000	0.1%
W. Scott Leckie(3) Toronto, Ontario	Experienced value investor, Portfolio Manager, and a founding partner of several companies. He is currently the	Director of New Millennium	70,000	0.1%

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Name, Municipality of Residence, Proposed Offices		Prior Position with New Millennium or Abaxx and Term of Such Position	Number of Abaxx Shares(2)	Percentage of Class Held or Controlled(2)
	Principal Occupation During Last Five
	Years(1)
Director	Principal of Takota Asset Management Inc. He was previously a portfolio manager PM and an exempt market dealer EMD. He is also a Director of Acerus Pharmaceuticals Corp.	(June 23, 2016 to Present)
Daniel P. Owen(5) Toronto, Ontario Director	Investor and entrepreneur. He is currently Chairman and Chief Executive Officer of a private investment management company, Chairman and Chief Executive Officer of a private aerodrome management company. He has served on the boards of directors and on all the committees of a number of Canadianpublic companies.	Director of New Millennium (June 23, 2016 to Present)	285,919	0.4%
Ryan Ingram Hong Kong Chief Risk Officer, ACX	Vice President, Credit Risk Management and Advisory, Goldman Sachs Group Inc. (March 2015 to September 2016) Senior Vice President, Group Regulatory Analytics, Risk Policy & FMI Strategy, Hong Kong Exchanges and Clearing Limited (September 2016 to Present)	Chief Risk Officer of ACX (August 1, 2020 to Present)	Nil	Nil
Tan Tock Siong Singapore Chief Regulatory Officer, ACX	Chief Regulatory Officer of Singapore Mercantile Exchange (2010 to 2015) Head of compliance for Bank of China in Singapore (2015 to 2016) Chief Regulatory Officer of Asia Pacific Exchange (2016 to 2019)	Chief Compliance Officer (October 1 to Present)	Nil	Nil
Mason Wallick Singapore Director, ACX	Managing Director/CEO of Infunde Capital Pte. Ltd.(January 2013 to March 2016) Managing Director/CEO of Infunde Development Pte. Ltd. (April 2016 to June 2020) Managing Director, CEO of Clime Capital Pte. Ltd. (June 2020 to Present)	Director of ACX (November 2018 to Present)	8,090	0.01%

Notes:

(1) The information as to principal occupation, business or employment and shares beneficially owned or controlled is not within the knowledge of Abaxx and has been furnished by the respective individuals.

(2) Based on 63,558,062 issued and outstanding Abaxx Shares and excludes the exercise of any Abaxx options. (3) Members of the Audit Committee.

(4) Members of the Compensation Committee.

(5) Members of the Nominating and Corporate Governance Committee.

Cease Trade Orders, Bankruptcies, Penalties or Sanctions

Other than as set out below, no director or officer of the Company is, as at the date hereof, or has been, within the previous 10 years, a director, chief executive officer or chief financial officer, of any company that:

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while that person was acting in the capacity was the subject of a cease trade order or similar order or an order that denied the relevant company access to any exemption under securities legislation, for a period of more than 30 consecutive days;
was the subject of a cease trade or similar order or an order that denied the relevant company access to any exemption under securities legislation, for a period of more than 30 consecutive days that was issued after the director ceased to be a director, chief executive officer or chief financial officer of such company and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer; or
within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets.

Other than as set out below, no director of the Company (or any personal holding company of any such individual):

is at the date hereof, or has been within the previous 10 years, a director or executive officer of any corporation that, while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver manager or trustee appointed to hold its assets; or
has, within 10 years before the date of this AIF, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets such individual.
No director or officer of the Company (or any personal holding company of any such individual) has been subject to any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority; or any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable investor in making an investment decision.

Robert Boisjoli

Mr. Boisjoli was the chief financial officer of First Gold Exploration Inc. (“ First Gold ”). In October 2010, Mr. Boisjoli participated in a private placement of First Gold’s securities. As a result of the transaction, Mr. Boisjoli paid an administrative penalty of $5000 for late filing of an insider transaction.

Mr. Boisjoli was the chief financial officer of Canadian Metals Inc. (“ CMI ”), a Québec corporation listed on Canadian Securities Exchange. On July 28, 2016, the Autorité des marchés financiers (Québec) issued a temporary management cease trade order (“ MCTO ”), against the directors and officers of CMI. The MCTO was issued in connection with the filing by CMI of a technical report that did not comply with the requirements of Regulation 43-101. The MCTO was lifted on October 4, 2016, following the filing of a compliant revised technical report.

Mr. Boisjoli was a director of Palos Management Inc. (“ Palos ”) when on November 23, 2011, Palos reached a settlement with the Autorité des marches financiers whereby Palos agreed to pay a monetary administrative penalty of $26,500 for a failure by Palos to include certain components of certain financial statements that were filed for the periods ending June 30, 2009, December 31, 2009 and June 30, 2010. The settlement relates to investment funds managed by Palos and offered under statutory prospectus exemptions, and another investment vehicle.

Scott Leckie

Mr. Leckie was a director of Groupe Bikini Village Inc. until he resigned in July 2014. Groupe Bikini Village Inc. filed a notice of intention to make a proposal under the Bankruptcy and Insolvency Act on February 17, 2015.

On June 30, 2005, Mr. Leckie agreed to pay a fine of $100,000 under a settlement agreement with Market Regulation Services Inc. with regard to certain trading activities.

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Conflicts of Interest

Directors and officers of Abaxx also serve as directors and/or officers of other companies and may be presented from time to time with situations or opportunities which give rise to apparent conflicts of interest which cannot be resolved by arm’s length negotiations, but only through exercise by the officers and directors of such judgment as is consistent with their fiduciary duties to Abaxx which arise under Ontario corporate law, especially insofar as taking advantage, directly or indirectly, of information or opportunities acquired in their capacities as directors or officers of Abaxx. All conflicts of interest will be resolved in accordance with the ABCA. Any transactions with officers and directors will be on terms consistent with industry standards and sound business practice in accordance with the fiduciary duties of those persons to Abaxx, and depending upon the magnitude of the transactions and the absence of any disinterested board members, may be submitted to the shareholders for their approval.

AUDIT COMMITTEE INFORMATION

The Audit Committee oversees the accounting and financial reporting practices and procedures of the Company and the audits of the Company’s financial statements. The principal responsibilities of the Audit Committee are: (i) overseeing the quality and integrity of the internal controls and accounting procedures of the Company, including review of the Company’s procedures for internal control with the Company’s auditor and chief financial officer; (ii) reviewing and assessing the quality and integrity of the Company’s annual and quarterly financial statements and related management discussion and analysis, as well as all other material continuous AIFs; (iii) monitoring compliance with legal and regulatory requirements related to financial reporting; (iv) reviewing and approving the engagement of the auditor of the Company and independent audit fees; (v) reviewing the qualifications, performance and independence of the auditor of the Company, considering the auditor’s recommendations and managing the relationship with the auditor, including meeting with the auditor as required in connection with the audit services provided to the Company; (vi) assessing the Company’s financial and accounting personnel; (vii) reviewing the Company’s risk management procedures; (viii) reviewing any significant transactions outside the Company’s ordinary course of business and any pending litigation involving the Company; and (ix) examining improprieties or suspected improprieties with respect to accounting and other matters that affect financial reporting.

Audit Committee Charter

The full text of the charter of the Audit Committee is attached as Schedule “A” to this AIF.

Composition of the Audit Committee

The Audit Committee of the Company is comprised of Margot Naudie (Chair), Catherine Flax, and W. Scott Leckie. All members of the Audit Committee are “independent” within the meaning of National Instrument 52-110 – Audit Committees. In addition, each Audit Committee member is “financially literate”, within the meaning of National Instrument 52-110 – Audit Committees and possess education or experience that is relevant for the performance of their responsibilities as Audit Committee members.

The following table summarizes the relevant education and experience of the members of the Audit & Risk Committee:

Name of Member	Education	Experience
Margot Naudie	B.A,McGill University M.B.A,Western University – Ivey School of Business CFA Designation	Managing Director at TD Asset Management, Inc. (2005 to 2010) Senior Portfolio Manager & Head of Materials Sector at Canadian Pension Plan Investment Board (February 2010 to May 2013) Senior Portfolio Manager at Marret Asset Management (September 2015-June 2017); Senior Portfolio Manager of the IP Alpha Fund (December 2017 to present);

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Name of Member	Education	Experience

Catharine Flax	B.Econ,Texas A&M University M.Econ,Brown University	Managing Director of BNP Paribas (November 2013 to March 2016) CEO of Pefin (March 2016 to October 2018) Managing Director of CRA, Inc. (April 2019 to Present)
W. Scott Leckie (Chair)	B.PHE,University of Toronto CFA designation	Principal of Takota Asset Management Inc. Director of Acerus Pharmaceuticals Corp.

PROMOTERS

Joshua Crumb is considered a promoter of Abaxx through his initiative in founding and organizing Abaxx. Joshua Crumb holds in the aggregate 11,055,032 Common Shares, representing 17.5% of the issued and outstanding Common Shares on a non-diluted basis. In addition, Joshua Crumb holds in the aggregate 202,250 options of Abaxx.

LEGAL PROCEEDINGS AND REGULATORY ACTIONS

Abaxx is not currently a party to any actual or pending legal proceedings or regulatory actions which would materially affect Abaxx, nor is Abaxx currently contemplating any legal proceedings, which are material to its business or of which any of its assets are likely to be subject. Furthermore, Abaxx is not aware of any such proceeding known to be contemplated or threatened which would materially affect Abaxx.

INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS

Other than as described in this AIF, no director, executive officer, person or company that beneficially owns, or controls, or directs, directly or indirectly, more than 10% of the Common Shares or any associate or affiliate of any such person or company, has or had any material interest, direct or indirect, in any transaction either within the three most recently completed financial years or during the current financial year that has materially affected or is reasonably expected to materially affect the Company.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Common Shares is Computershare Trust Company of Canada, 100 University Avenue, 8[th] Floor, Toronto, Ontario M5J 2Y1.

MATERIAL CONTRACTS

The following material contracts of the Company were either entered into during the last financial year or entered into prior to the last financial year and still in effect:

ACX Shareholders’ Agreement (December 14, 2020) - Under the terms of the ACX Shareholders’ Agreement, ACX and the ACX Shareholders agreed to the following terms: (a) ACX granting pre-emptive rights to each ACX Shareholder prior to the issuance of any voting ACX Shares; (b) ACX Shareholders providing a right of first refusal to other ACX Shareholders prior to any transfer of ACX Shares; (c) “tag along” rights granted to ACX Shareholders whereby any third party offer for ACX Shares must provide an offer to all ACX Shareholders; (d) “drag along” rights granted to ACX Shareholders whereby if fifty percent (50%) of issued and outstanding ACX Shares accept an offer for ACX Shares, all ACX Shareholders can participate in the offer on the same terms; and (e) upon certain “buy-out events”, the ACX Shareholder triggering the “buy-out event” must surrender their ACX Shares for purchase to other ACX Shareholders.
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Business Combination Agreement (September 18, 2020) – Under the terms of the agreement, New Millennium Iron Corporation would create a subsidiary corporation that would merge with Abaxx Technologies Inc. and would be renamed to Abaxx Technologies Holdco Inc.
Royalty Agreement (December 14, 2020) – Agreement whereby Abaxx Singapore Pte Ltd. and Abaxx Technologies Corp. would amend and restate the previous February 1, 2019 royalty agreement between the parties. Under the restated agreement, Abaxx Singapore Pte Ltd. would pay a 2% royalty on gross revenue to Abaxx Technologies Corp., for previous financial assistance and the usage of software developed by Abaxx Technologies Corp.
Amended and Restated Exclusive Software Master License Agreement (December 14, 2020) – Agreement whereby Abaxx Technologies Corp. would grant Abaxx Singapore Pte Ltd. an exclusive right and license to market and sub-license software developed by Abaxx Technologies Corp. Under the agreement, Abaxx Singapore Pte Ltd. would pay a royalty for the exclusive right and license to third parties within a specific territory.
Reorganization Agreement (August 5, 2020) – Agreement whereby New Millennium and Tata Steel Group agreed to restructure their relationship. The principal terms under the agreement included, without limitation: (a) the cancellation of 47,402,908 New Millennium shares held by TS Global Minerals Holdings Pte. Ltd; (b) sale of 20.52 Class B common shares in the capital of Tata Steel Minerals Canada held by New Millennium to TSMUK Ltd.; and (c) the settlement of all outstanding indebtedness between the Tata Steel Group and New Millennium.
Escrow Agreement (December 14, 2020) – Agreement, prepared in accordance with National Policy 46-210 Escrow for Initial Public Offerings and Aequitas NEO Exchange policies, whereby Computershare Trust Company of Canada agrees to hold in escrow and release 11,055,032 Company common shares held by principals of the Company holding more than 1% of the Company’s common shares, including convertible securities, subject to the terms of the agreement. The release schedule under the agreement is as follows:
a. 25% of the escrowed securities will be released from escrow on December 17, 2020;
b. 33% of the remaining escrowed securities will be released from escrow on June 17, 2021;
c. 50% of the remaining escrowed securities will be released from escrow on December 17, 2021; and
d. The remaining escrowed securities will be released on the June 17, 2022.
ACX Assignment Agreement (May 1, 2019) – Agreement whereby Abaxx Tech delivered and transferred possession to ACX of all technology possessed by Abaxx Tech as of the date of the agreement. ACX agreed under the ACX Assignment Agreement to assume the responsibility of research and development of all Assigned Technology.

INTERESTS OF EXPERTS

Names of Experts

MNP LLP, 111 Richmond Street West, Toronto, Ontario M5H 2G4, prepared the auditor’s report for the audited financial statements of Abaxx for the years ended December 31, 2019 and 2018.

Dennis Peterson, of Peterson McVicar LLP, serves as counsel to Abaxx.

Interest of Experts

Dennis Peterson owns 562,928 shares of Abaxx, which represents less than 1% of the issued and outstanding shares of Abaxx.

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ADDITIONAL INFORMATION

Additional financial information is provided in the Company’s audited annual financial statements and the management’s discussion and analysis for its most recently completed financial year. Other additional information, including directors’ and officers’ remuneration and indebtedness, principal holders of securities of the Company and securities authorized for issuance under equity compensation plans, may be found in the management information circular of the Company for its most recent meeting of Shareholders. These documents and other additional information relating to the Company may be found on SEDAR at www.sedar.com.

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SCHEDULE “A” - AUDIT & RISK COMMITTEE CHARTER

ABAXX INC. AUDIT COMMITTEE CHARTER

This charter (the “ Charter ”) sets forth the purpose, composition, responsibilities and authority of the Audit Committee (the “ Committee ”) of the Board of Directors (the “ Board ”) of Abaxx Inc. (“ Abaxx ” or the “ Corporation ”).

1.0 Mandate

The Committee shall:

(a) assist the Board in its oversight role with respect to the quality and integrity of the financial information;
(b) assess the effectiveness of the Corporation’s risk management and compliance practices;
(c) assess the independent auditor’s performance, qualifications and independence;
(d) assess the performance of the Corporation’s internal audit function;
(e) ensure the Corporation’s compliance with legal and regulatory requirements; and
(f) prepare such reports of the Committee required to be included in any Management Information Circular in accordance with applicable laws or the rules of applicable securities regulatory authorities.

2.0 Composition and Membership

The committee shall be composed of not less than three members, each of whom shall be a director of the Corporation. A majority of the members of the Committee shall not be an officer or employee of the Corporation. All members shall satisfy the applicable independence and experience requirements of the laws governing the Corporation, the applicable stock exchanges on which the Corporation’s securities are listed and applicable securities regulatory authorities.

Each member of the Committee shall be financially literate as such qualification is interpreted by the Board of Directors in its business judgment.

Members of the Committee shall be appointed or reappointed at the annual meeting of the Corporation and in the normal course of business will serve a minimum of three years. Each member shall continue to be a member of the Committee until a successor is appointed, unless the member resigns, is removed or ceases to be a Director. The Board of Directors may fill a vacancy that occurs in the Committee at any time.

The Board of Directors or, in the event of its failure to do so, the members of the Committee, shall appoint or reappoint, at the annual meeting of the Corporation a Chairman among their number. The Chairman shall not be a former Officer of the Corporation. Such Chairman shall serve as a liaison between members and senior management.

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The time and place of meetings of the Committee and the procedure at such meetings shall be determined from time to time by the members therefore provided that:

(a) a quorum for meetings shall be at least three members;
(b) the Committee shall meet at least quarterly;
(c) notice of the time and place of every meeting shall be given in writing or by telephone, facsimile, email or other electronic communication to each member of the Committee at least 24 hours in advance of such meeting;
(d) a resolution in writing signed by all directors entitled to vote on that resolution at a meeting of the Committee is as valid as if it had been passed at a meeting of the Committee.

The Committee shall report to the Board of Directors on its activities after each of its meetings. The Committee shall review and assess the adequacy of this charter annually and, where necessary, will recommend changes to the Board of Directors for its approval. The Committee shall undertake and review with the Board of Directors an annual performance evaluation of the Committee, which shall compare the performance of the Committee with the requirements of this charter and set forth the goals and objectives of the Committee for the upcoming year. The performance evaluation by the Committee shall be conducted in such manner as the Committee deems appropriate. The report to the Board of Directors may take the form of an oral report by the chairperson of the Committee or any other designated member of the Committee.

3.0 Duties and Responsibilities

Oversight of the Independent Auditor

(a) Sole authority to appoint or replace the independent auditor (subject to shareholder ratification) and responsibility for the compensation and oversight of the work of the independent auditor (including resolution of disagreements between Management and the independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work. The independent auditor shall report directly to the Committee.
(b) Sole authority to pre-approve all audit services as well as non-audit services (including the fees, terms and conditions for the performance of such services) to be performed by the independent auditor.
(c) Evaluate the qualifications, performance and independence of the independent auditor, including (i) reviewing and evaluating the lead partner on the independent auditor's engagement with the Corporation, and (ii) considering whether the auditor's quality controls are adequate and the provision of permitted non-audit services is compatible with maintaining the auditor's independence.
(d) Obtain and review a report from the independent auditor at least annually regarding: the independent auditor's internal quality-control procedures; any material issues raised by the most recent internal quality-control review, or peer review, of the firm, or by any
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inquiry or investigation by governmental or professional authorities within the preceding five years respecting one or more independent audits carried out by the firm; any steps taken to deal with any such issues; and all relationships between the independent auditor and the Corporation.

(e) Review and discuss with Management and the independent auditor prior to the annual audit the scope, planning and staffing of the annual audit.
(f) Ensure the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law.
(g) Review as necessary policies for the Corporation's hiring of partners, employees or former partners and employees of the independent auditor.

Financial Reporting

(h) Review and discuss with Management and the independent auditor the annual audited financial statements prior to the publication of earnings.
(i) Review and discuss with Management the Corporation's annual and quarterly disclosures made in Management's Discussion and Analysis. The Committee shall approve any reports for inclusion in the Corporation's Annual Report, as required by applicable legislation.
(j) Review and discuss with Management and the independent auditor management's report on its assessment of internal controls over financial reporting and the independent auditor's attestation report on management's assessment.
(k) Review and discuss with Management the Corporation's quarterly financial statements prior to the publication of earnings.
(l) Review and discuss with Management and the independent auditor at least annually significant financial reporting issues and judgments made in connection with the preparation of the Corporation's financial statements, including any significant changes in the Corporation's selection or application of accounting principles, any major issues as to the adequacy of the Corporation's internal controls and any special steps adopted in light of material control deficiencies.
(m) Review and discuss with Management and the independent auditor at least annually reports from the independent auditors on: critical accounting policies and practices to be used; significant financial reporting issues, estimates and judgments made in connection with the preparation of the financial statements; alternative treatments of financial information within generally accepted accounting principles that have been discussed with Management, ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the independent auditor; and other material written communications between the independent auditor and Management, such as any management letter or schedule of unadjusted differences.
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(n) Discuss with the independent auditor at least annually any “Management” or “internal control” letters issued or proposed to be issued by the independent auditor to the Corporation.
(o) Review and discuss with Management and the independent auditor at least annually any significant changes to the Corporation's accounting principles and practices suggested by the independent auditor, internal audit personnel or Management.
(p) Discuss with Management the Corporation's earnings press releases, including the use of “pro forma” or “adjusted” non-GAAP information, as well as financial information and earnings guidance (if any) provided to analysts and rating agencies.
(q) Review and discuss with Management and the independent auditor at least annually the effect of regulatory and accounting initiatives as well as off-balance sheet structures on the Corporation's financial statements.
(r) Review and discuss with the Chief Executive Officer and the Chief Financial Officer the procedures undertaken in connection with the Chief Executive Officer and Chief Financial Officer certifications for the annual filings with applicable securities regulatory authorities.
(s) Review disclosures made by the Corporation's Chief Executive Officer and Chief Financial Officer during their certification process for the annual filing with applicable securities regulatory authorities about any significant deficiencies in the design or operation of internal controls which could adversely affect the Corporation's ability to record, process, summarize and report financial data or any material weaknesses in the internal controls, and any fraud involving Management or other employees who have a significant role in the Corporation's internal controls.
(t) Discuss with the Corporation's General Counsel at least annually any legal matters that may have a material impact on the financial statements, operations, assets or compliance policies and any material reports or inquiries received by the Corporation or any of its subsidiaries from regulators or governmental agencies.

Oversight of Risk Management

(u) Review and approve periodically Management's risk philosophy and risk management policies.
(v) Review with Management at least annually reports demonstrating compliance with risk management policies.
(w) Review with Management the quality and competence of Management appointed to administer risk management policies.
(x) Review reports from the independent auditor at least annually relating to the adequacy of the Corporation's risk management practices together with Management's responses.
(y) Discuss with Management at least annually the Corporation's major financial risk exposures and the steps Management has taken to monitor and control such exposures,
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including the Corporation's risk assessment and risk management policies.

Oversight of Regulatory Compliance

(z) Establish procedures for the receipt, retention and treatment of complaints received by the Corporation regarding accounting, internal accounting controls or auditing matters, and the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters.
(aa) Discuss with Management and the independent auditor at least annually any correspondence with regulators or governmental agencies and any published reports which raise material issues regarding the Corporation's financial statements or accounting.
(bb) Meet with the Corporation's regulators, according to applicable law.
(cc) Exercise such other powers and perform such other duties and responsibilities as are incidental to the purposes, duties and responsibilities specified herein and as may from time to time be delegated to the Committee by the Board of Directors.

4.0 Funding for the Independent Auditor and Retention of Other Independent Advisors

The Corporation shall provide for appropriate funding, as determined by the Committee, for payment of compensation to the independent auditor for the purpose of issuing an audit report and to any advisors retained by the Committee. The Committee shall also have the authority to retain and, at Abaxx ’s expense, to set and pay the compensation for such other independent counsel and other advisors as it may from time to time deem necessary or advisable for its purposes. The Committee also has the authority to communicate directly with internal and external auditors.

5.0 Procedures for Receipt of Complaints and Submissions Relating to Accounting Matters

The Corporation shall inform employees on the Corporation’s intranet, if there is one, or via a newsletter or e-mail that is disseminated to all employees at least annually, of the officer (the “ Complaints Officer ”) designated from time to time by the Committee to whom complaints and submissions can be made regarding accounting, internal accounting controls or auditing matters or issues of concern regarding questionable accounting or auditing matters.
The Complaints Officer shall be informed that any complaints or submissions so received must be kept confidential and that the identity of employees making complaints or submissions shall be kept confidential and shall only be communicated to the Committee or the Chair of the Committee.
The Complaints Officer shall be informed that he or she must report to the Committee as frequently as such Complaints Officer deems appropriate, but in any event no less frequently than on a quarterly basis prior to the quarterly meeting of the Committee called to approve interim and annual financial statements of the Corporation.
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Upon receipt of a report from the Complaints Officer, the Committee shall discuss the report and take such steps as the Committee may deem appropriate.
The Complaints Officer shall retain a record of a complaint or submission received for a period of six years following resolution of the complaint or submission.

6.0 Procedures for Approval of Non-Audit Services

The Corporation’s external auditors shall be prohibited from performing for the Corporation the following categories of non-audit services:
(a) bookkeeping or other services related to the Corporation’s accounting records or financial statements;
(b) financial information systems design and implementation;
(c) appraisal or valuation services, fairness opinion or contributions-in-kind reports; (d) actuarial services; (e) internal audit outsourcing services;
(f) management functions;
(g) human resources;
(h) broker or dealer, investment adviser or investment banking services; (i) legal services;
(j) expert services unrelated to the audit; and
(k) any other service that the Canadian Public Accountability Board determines is impermissible.
In the event that the Corporation wishes to retain the services of the Corporation’s external auditors for tax compliance, tax advice or tax planning, the Chief Financial Officer of the Corporation shall consult with the Chair of the Committee, who shall have the authority to approve or disapprove on behalf of the Committee, such non-audit services. All other nonaudit services shall be approved or disapproved by the Committee as a whole.
The Chief Financial Officer of the Corporation shall maintain a record of non-audit services approved by the Chair of the Committee or the Committee for each fiscal year and provide a report to the Committee no less frequently than on a quarterly basis.

7.0 Reporting

The Chairman will report to the Board at each Board meeting on the Committee’s activities since the last Board meeting. The Committee will annually review and approve the Committee’s report for inclusion in the Annual Information Form. The Secretary will circulate the minutes of each meeting of the Committee to the members of the Board.

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8.0 Access to Information and Authority

The Committee will be granted unrestricted access to all information regarding Abaxx that is necessary or desirable to fulfill its duties and all directors, officers and employees will be directed to cooperate as requested by Members .

9.0 Review of Charter

The Committee will annually review and assess the adequacy of this Charter and recommend any proposed changes to the Board for consideration.

Dated: November 23, 2020 Approved by: Audit Committee Board of Directors

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