Abaxx Technologies Inc. — Management Reports 2021

Apr 1, 2021

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ABAXX TECHNOLOGIES INC. (Formerly New Millennium Iron Corp.)

MANAGEMENT’S DISCUSSION & ANALYSIS YEARS ENDED DECEMBER 31, 2020 AND 2019 (EXPRESSED IN CANADIAN DOLLARS)

Abaxx Technologies Inc. (Formerly New Millennium Iron Corp.) Management’s Discussion and Analysis For the year ended December 31, 2020 Dated March 31, 2021

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Introduction

The following Management’s Discussion and Analysis (“MD&A”) of the financial condition and results of the operations of Abaxx Technologies Inc. (the "Company" or “Abaxx”) constitutes management’s review of the factors that affected the Company’s financial and operating performance for the fourth quarter and fiscal year ended December 31, 2020. This discussion should be read in conjunction with the audited consolidated financial statements as at December 31, 2020 and 2019 together with the notes thereto (the “Financial Statements”). This MD&A is dated as of March 31, 2021 unless otherwise indicated.

Unless otherwise indicated and as hereinafter provided, all financial information contained in this MD&A, and the Company’s Annual Financial Statements have been prepared in accordance with International Financial Reporting Standards ("IFRS"), as issued by the International Accounting Standards Board (“IASB”). Unless otherwise noted in this MD&A; all monetary amounts are expressed in Canadian dollars, and “we”, “us”, “our”, or the “Company” refer to Abaxx Technologies Inc. and its direct and indirect subsidiaries.

Certain statements in this MD&A constitute forward-looking statements or forward-looking information within the meaning of applicable securities laws. You should read carefully; the “Cautionary Note Regarding Forward-looking Statements” section in this MD&A and should not place undue reliance on any such forward-looking statements.

Abaxx Technologies Inc. ("Abaxx" or the "Company"), (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- 2nd Street S.W., Suite 3500, Bankers Hall East Tower, Calgary, Alberta, T2P 4J8.The common shares of the Company are listed on the Aequitas NEO Exchange under the trading symbol “ABXX”.

Caution Regarding Forward-Looking Statements

This MD&A contains forward-looking statements about the Company’s objectives, plans, goals, aspirations, strategies, financial condition, results of operations, cash flows, performance, prospects, opportunities and legal and regulatory matters. Specific forward-looking statements in this MD&A include, but are not limited to, statements with respect to the Company’s anticipated future results, events, plans, strategic initiatives, future liquidity, and planned capital investments.

Forward-looking statements are typically identified by words such as “expect”, “anticipate”, “believe”, “foresee”, “could”, “estimate”, “goal”, “intend”, “plan”, “seek”, “strive”, “will”, “may”, “maintain”, “achieve”, “grow”, “should” and similar expressions, as they relate to the Company and its management. Forward-looking statements reflect the Company’s current estimates, beliefs and assumptions, which are based on management’s perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances. The Company’s expectation of operating and financial performance in 2021 is based on certain assumptions including; assumptions about operational growth, anticipated cost savings, operating efficiencies, anticipated benefits from strategic initiatives, future liquidity, and planned capital investments. The Company’s estimates, beliefs and assumptions are inherently subject to significant business, economic, competitive, and other uncertainties and contingencies regarding future events and as such, are subject to change. The

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Abaxx Technologies Inc. (Formerly New Millennium Iron Corp.) Management’s Discussion and Analysis For the year ended December 31, 2020 Dated March 31, 2021

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Company can give no assurance that such estimates, beliefs and assumptions will prove to be correct.

Numerous risks and uncertainties could cause the Company’s actual results to differ materially from those expressed, implied, or projected in the forward-looking statements. Such risks and uncertainties include:

• the nature of the business and industries that Company competes in;

• limited assets, available funds, currency risk, absence of dividends, additional financing requirements and anticipated use of those funds;

• the operational management of the Company by it’s directors, officers and insiders, reliance on key personnel, and limited management experience, conflict of interests with directors and management;

• the future growth, results of operations, performance, products, competition, slow acceptance of products, growth, and business prospects and opportunities of Abaxx;

• the ability of Abaxx to satisfy all conditions precedent and obtain all regulatory approvals

• whether Abaxx will be able to execute its business strategy successfully such that the future growth, results of operations, performance and business prospects and opportunities of Abaxx, will be as anticipated;

• Reporting Issuer Risk including Risks related to volatility of share price, and fluctuation of operating results;

• risks related to regulation by governmental authorities including political & regulatory risks;

• operations in foreign jurisdictions;

• protection of Abaxx Tech Software and IP portfolio, cybersecurity threats, server, system software failures or reliance on technical infrastructure and hacking;

• clearing house failure or the inadequacies of risk management procedures and facility developments;

• COVID 19 pandemic;

• the availability of financing opportunities and risks associated with general economic and financial conditions;

• the ability to service debt obligations and maintain flexibility in respect of debt covenants;

• the speculative and competitive nature of the technology sector;

• limited operating history and share price fluctuations;

• use and Storage of Personal Information and Compliance with Privacy Laws permits, contract, licenses political and regulatory risk;

• tax consequences;

• environmental regulations and liability;

• third party risk, erroneous transactions and human error;

• non-availability of insurance;

• loss of key employees;

• lawsuits and other legal proceedings and challenges; and

• other factors beyond the Company’s control.

The above is not an exhaustive list of the factors that may affect the Company’s forward-looking statements. Other risks and uncertainties not presently known to the Company or that the Company presently believes are not material could also cause actual results or events to differ materially from those expressed in its forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect the Company’s

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Abaxx Technologies Inc. (Formerly New Millennium Iron Corp.) Management’s Discussion and Analysis For the year ended December 31, 2020 Dated March 31, 2021

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expectations only as of the date of this MD&A. Except as required by law, the Company does not undertake to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Our Strategy

Abaxx is a development stage financial software company that has created proprietary technological infrastructure for both global commodity exchanges and the digital marketplace. The company’s formative technology increases transaction velocity, data security, and facilitates improved risk management for the majority owned, Abaxx Singapore Pte. Ltd. (“ACX”, or “Abaxx.Exchange”) - a commodity futures exchange that is seeking final regulatory approvals as a Recognized Market Operator (“RMO”) and Approved Clearing House (“ACH”) with the Monetary Authority of Singapore (“MAS”). Abaxx is a technology company engaged in development and deployment of trust enabling Internet protocols. The Abaxx mandate includes accelerating commerce and reducing exposure to risk in targeted global industries. Abaxx commenced its current business operations in January 2018.

The Company has developed a business strategy comprised of two core components: (i) investing in new internet communication protocols and proprietary financial software architecture with a vision for global commodity market trading; and (ii) commercializing the majority-owned commodity futures exchange and clearing house utilizing Abaxx technology, including foundational products in new liquified natural gas benchmark contracts, a new market structure vision for precious metals and battery metals markets, and new initiatives for enhancing Environmental, Social, and Governance (“ESG”) related markets and data. As a publicly listed company, Abaxx provides its shareholders with the potential for significant long-term value creation.

The Company is also developing new proprietary software and middleware related to the Abaxx Exchange and Clearing operations with a goal to tests alpha stage software.

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);

• end-to-end encrypted and compliant financial messaging and video chat with enhanced deep learning and natural language processing applications;

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Abaxx Technologies Inc. (Formerly New Millennium Iron Corp.) Management’s Discussion and Analysis For the year ended December 31, 2020 Dated March 31, 2021

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• 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

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, and data regulatory compliance.

Abaxx Tech currently holds an intercompany gross revenue royalty over ACX for the licensed use of its proprietary software, which includes 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.

Business Overview

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

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 Corp 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 Technologies Inc. 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 1,039,059 Abaxx Common Shares at a price of $0.99 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 1,067,476 Abaxx Common Shares at a price of $0.99 per Abaxx Common Share for gross proceeds of $1,055,600.

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Abaxx Technologies Inc. (Formerly New Millennium Iron Corp.) Management’s Discussion and Analysis For the year ended December 31, 2020 Dated March 31, 2021

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On September 7, 2020, ACX received approval-in-principle from 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, in sync with plans to begin alpha testing of its Abaxx Exchange platform.

On September 11, 2020, Abaxx completed the third and final tranche of the Pre-Listing Abaxx Financing of 3,819,037, Abaxx Common Shares at a price of $0.99 per Abaxx Common Shares for gross proceeds of $3,104,116. In addition, Abaxx issued 242,700 Abaxx Common Shares to certain consultants of Abaxx for services rendered. Each Abaxx Common Share issued to the consultants carried a deemed value of $0.99 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 Corp 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 438,927 Abaxx Common Shares to certain consultants and service providers of Abaxx for settlement of an aggregate of $434,055 of indebtedness. Each Abaxx Common Share issued to consultants and service providers carried a deemed value of $0.99 per Abaxx Common Share. In addition, Abaxx issued 151,688 Abaxx Common Shares to for settlement of an aggregate of $150,000 of indebtedness. Each Abaxx Common Share issued as aforementioned above carried a deemed value of $0.99 per Abaxx Common Share.

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

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”.

Reverse Takeover Transaction

On September 18, 2020, New Millennium Iron Corp. (“New Millennium”) and Abaxx entered into a definitive agreement. Pursuant to the definitive agreement, New Millennium indirectly acquired all of the issued and outstanding Abaxx Common Shares through a reverse take-over transaction.

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Abaxx Technologies Inc. (Formerly New Millennium Iron Corp.) Management’s Discussion and Analysis For the year ended December 31, 2020 Dated March 31, 2021

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New Millennium would rename itself to Abaxx on December 14, 2020 pursuant to the reverse take-over.

The amalgamation was considered a reverse takeover as the legal acquiree’s former shareholders control the consolidated entity after completion of the amalgamation. Consequently, the legal acquiree is the accounting acquirer and the historical financial results presented in these consolidated financial statements are those of Abaxx.

At the time of the amalgamation, New Millennium’s assets consisted primarily of cash and cash equivalents, marketable securities, receivables, and accounts payable and it did not have any processes capable of generating outputs; therefore, New Millennium did not meet the definition of a business. Accordingly, as New Millennium did not qualify as a business in accordance with IFRS 3 Business Combinations, the amalgamation did not constitute a business combination; however, by analogy it has been accounted for as a reverse takeover. Therefore, Abaxx, the legal subsidiary, has been treated as the accounting parent company, and New Millennium, the legal parent, has been treated as the accounting subsidiary.

Upon completion of the amalgamation 133,651,238 New Millennium common shares were consolidated into 11,137,596 common shares of the Company on the basis of one postconsolidated share for every twelve pre-consolidation shares. The fair value of these shares of $11,026,227, was based on an estimated fair value of $0.99 per share as at the transaction date as per the trading price of New Millennium September 18, 2020.

In connection with the amalgamation, the Company issued 438,927 common shares as finder’s fees to a third-party.

The fair value of these shares of $434,055 was based on an estimated fair value of $0.99 per share as per the trading price of New Millennium common shares following the amalgamation, adjusted for any conversion ratios.

As the acquisition was not considered a business combination, the excess of consideration paid over the net assets acquired together with any transaction costs incurred for the amalgamation is expensed as a transaction in accordance with IFRS 2 Share-Based Payments.

Consideration
Shares	$11,026,227
Legal fees	508,369
Transaction costs-common shares	434,055
Total consideration paid	$11,968,651
Net assets acquired
Cash and cash equivalents	$7,683,226
Prepaid and other current	23,375
Marketable securities	3,040,552
Other receivables	436,050
Land	7,001
Amounts payable and other liabilities	(358,759)
Net assets acquired	$10,831,446
Total transaction expense	$1,137,205

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Abaxx Technologies Inc. (Formerly New Millennium Iron Corp.) Management’s Discussion and Analysis For the year ended December 31, 2020 Dated March 31, 2021

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Key Events of 2020

Subsequent to the successful completion of the reverse take-over transaction with New Millennium, on December 18th, Abaxx announced the listing of Abaxx on Canada’s NEO Stock Exchange listing under the symbol ABXX, also accessible to American resident investors over the counter (“OTC”) as ABXXF, with applications filed to begin trading in the US under a more formal OTCQX listing sponsored by a US based financial institution. The Company has started a review of additional senior stock exchange listings to provide increased access to global investors as the Company prepares to launch the ACX.

Abaxx Exchange is awaiting regulatory approvals as a Recognized Market Operator (“RMO”) and Approved Clearing House (“ACH”) with the Monetary Authority of Singapore (“MAS”). On September 7, 2020, Abaxx received Approval in Principle of its RMO application, subject to various terms and conditions. The Company is in frequent contact with the MAS and is working toward the completion of the Approval in Principle process for an ACH licence in Q2 2021, with the commencement of the commercial launch phase thereafter. Planning meetings are ongoing with participants and members ahead of the launch.

Fortuitously, our approach of product and technology design driven by close collaboration with market participants over the past three years is proving successful in that the solutions Abaxx have in beta testing have the potential to resolve many of the problems in the global economy today. Abaxx is strategically positioning for the future of clean energy security, and in support of the energy transition by implementing our plan enabling the organization and standardization of the terms of trade and for market participants to trade commodities based on their ESG-attributes. This is a foundational principle of developing what Abaxx refer to as Smarter Markets, which encompasses three primary components including commodity contract design; technology innovation; and environmental, social and governance (ESG) considerations.

The Abaxx command console suite of software applications is commencing beta testing and pilot projects are in formulation including but not limited to implementing Measurement, Verification and Reporting (MVR) activities related to ESG externality pricing considerations in the exchange business. In accordance with the Abaxx vision and the second stage of the business plan, these tools are designed and will be commercialized broadly for use in multiple commerce and marketplace segments that will benefit from increased data privacy, security, digital identity, multiparty signature, document management and custody.

We are preparing to launch the first commercial phase for Abaxx, where continuous improvements in software technology and better coordination and transparency of market activities can enable participants to advance the needs of both commodity markets specifically and society as a whole. Fundamentally, the vision that Abaxx has heavily invested in over the past three years is well-timed and well-aligned with the accelerating economic priorities of the global energy transition, in addition to capital market demands for increased transparency around environmental, social, and governance (“ESG”) risks and opportunities.

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Abaxx Technologies Inc. (Formerly New Millennium Iron Corp.) Management’s Discussion and Analysis For the year ended December 31, 2020 Dated March 31, 2021

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Overall Performance

The Company has not yet to realized profitable operations as revenue streams are still being developed. During the year ended December 31, 2020, the Company was able to strengthen its balance sheet by increasing its working capital by $17,010,588 to $11,711,981 (December 31, 2019, working capital deficit was $5,298,607 including shareholder loans). The Company has a strong liquid position consisting of cash, marketable securities, subscription receivables and funds held in trust of $13,477,852 as compared to December 31, 2019 when it had $1,707,372 on hand.

The Company’s loss for the year was $10,551,239 (2019 $10,711,939), and expects to incur further losses in the development of its business. Included in the FY 2020 losses are certain nonroutine or onetime items that are not a major part of our ongoing operations. These include an impairment write down of our investment in Operem Inc. (Impairment of investment in associate) $2,748,934, Interest and accretion expenses relating to various debt instruments was $2,318,831 and listing expenses relating to the RTO transaction of $1,137,205.

Selected Annual Information

The following table presents select annual consolidated information for the years ended December 31, 2020, 2019 and 2018:

	Year ended	Year ended	Year ended
Selected Annual Information	December 31,	December 31,	December 31,
	2020	2019	2018
Total Revenue(1)	-	-	-
Loss from continuing operations:
Total	$(10,551,238)	$(10,711,939)	$(4,142,685)
On a per-share	(0.24)	(0.24)	(0.13)
On a diluted per-share	(0.24)	(0.24)	(0.13)
Loss attributable to owners of the parent:
Total	(9,381,293)	(8,412,398)	(3,827,068)
On a per-share	(0.24)	(0.24)	(0.12)
On a diluted per-share	(0.24)	(0.24)	(0.12)
Total assets	17,008,398	5,534,695	6,054,637
Total liabilities	3,211,564	7,199,592	295,966
Total shareholders' equity (deficiency)	13,796,834	(1,664,897)	5,758,671
Distributions or cash dividends declared	-	-	-

Notes:

(1) For the year ended December 31, 2020, basic and diluted loss per share has been calculated based on the loss attributable to common shareholders of $9,381,293 (December 31, 2019, $8,412,398) and the weighted average number of common shares outstanding of 39,607,037 (December 31, 2019, 35,422,734). Diluted loss per share did not include the effect of stock options, share purchase warrants and convertible debentures as they are anti dilutive.

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Abaxx Technologies Inc. (Formerly New Millennium Iron Corp.) Management’s Discussion and Analysis For the year ended December 31, 2020 Dated March 31, 2021

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a. Total Revenue

The Company did not generate any revenue during the year end December 31, 2020, 2019 or 2018, revenue streams are still being developed with ACX regulatory approvals pending.

b. Loss from continuing operations

For the year ended December 31, 2020, the Company recorded a total operational loss of $9,858,562 (December 31, 2019 – $10,448,074). Abaxx is a developing technology company and did not generate any revenues during either reported period. The loss is due primarily to our spend on development expenses $2,676,727, salaries and wages $1,047,953 and professional fees $1,917,491. The Company also incurred noncash stock based compensation of $1,421,173 (2019 $635,485).

c. Total assets

For the year ended December 31, 2020, the Company had total assets of $17,008,398 (December 31, 2019 $5,534,495) and this represents a 207% increase year over year. The Company acquired $10.8 million of these assets from New Millennium as part of the RTO transaction, and this accounted for the major increase in assets at December 31, 2020.

d. Total liabilities

For the year ended December 31, 2020, the Company had total liabilities of $3,211,564 (December 31, 2019 $7,199,592), a 55% decrease year over year. During FY 2020, the Company repaid $2 million due to shareholders and had an approximate $3 million of debenture converted to shares.

The accounts payable and accrued liabilities at December 31, 2020, consisted of development costs, professional fees and other recurring business expenses. Subsequent to year end, most of these amounts were settled.

e. Shareholders’ equity

For the year ended December 31, 2020, the Company had Shareholders’ equity of $13,796,834 (December 31, 2019, deficiency $1,664,897). The Company acquired $10.8 million in net assets from New Millennium as part of the RTO transaction, and this accounted for the major increase in Shareholder’s equity.

f. Dividend

There have not been any distributions or cash dividends declared per share on any class of shares in any of the three years disclosed in the table above.

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Abaxx Technologies Inc. (Formerly New Millennium Iron Corp.) Management’s Discussion and Analysis For the year ended December 31, 2020 Dated March 31, 2021

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Summary of Quarterly Results

IFRS Consolidated Income Statement Select Data		FY 2020	FY 2020			FY 2019	FY 2019
(expressed in $000s) except EPS	Q4(1)	Q3	Q2	Q1	Q4	Q3	Q2	Q1
Total Revenue	-	-	-	-	-	-	-	-
Total Expenses	6,359	1,132	1,182	1,186	1,639	2,789	4,259	1,761
Net Loss Before Tax	(5,607)	(1,600)	(1,855)	(1,490)	(2,152)	(2,755)	(4,095)	(1,710)
Basic and Diluted Lossper Share	(0.14)	(0.02)	(0.03)	(0.03)	(0.06)	(0.06)	(0.08)	(0.03)

Notes:

• (1) All figures after December 14, 2020 include New Millennium Iron Corp.

For the three months ended December 31, 2020 compared to the three months ended December 31, 2019 the Company had an increase in operating expenses of $4.7 million or 288%. In the last quarter of 2020, the Company issued stock options with a Black Scholes expense amount of $1.9 million and incurred higher professional fees.

For the first, second and third quarters in fiscal year 2020, the Company had a decrease in operating expenses of $5.4 million or 60% as compared to the same period in FY 2019. The decrease was due to a lower spend on development of approximately $4 million and professional fees $0.4 million. In the 2019 quarters, the Company investment most of its development work in Singapore and Canada to meet its project timelines.

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Abaxx Technologies Inc. (Formerly New Millennium Iron Corp.) Management’s Discussion and Analysis For the year ended December 31, 2020 Dated March 31, 2021

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Results of Operations

Basis of Presentation

In this MD&A, Abaxx will detail its results of operations from an IFRS basis. The Company will also discuss consolidated results from continuing operations, as reported in our audited consolidated income statement, in or audited consolidated financial statements at December 31, 2020.

Consolidated Financial Results

	FY	FY	$	%
	2020	2019	Change	Change
Revenue	-	-	-	0%
Operating Expenses
Development	2,676,727	7,049,385	4,372,658	62%
Salaries and wages	1,047,953	1,326,858	278,905	21%
Professional fees	1,917,491	775,947	(1,141,544)	(147%)
Travel, marketing, and promotion	242,556	290,057	47,501	16%
General and administrative	216,937	85,639	(131,298)	(153%)
Regulatory expenses	9,749	4,087	(5,662)	(139%)
Loss on investment under equity method	7,145	218,444	211,299	97%
Interest and accretion expenses	2,318,831	62,172	(2,256,659)	(3,630%)
Share-based compensation	1,421,173	635,485	(785,688)	(124%)
Total operating expenses	9,858,562	10,448,074	589,512	6%
Operating loss for the year	(9,858,562)	(10,448,074)	(589,512)	6%
Foreign exchange gain (loss)	443,875	(64,006)	(507,881)	793%
Fair value adj. on derivative liability	988,696	(307,705)	(1,296,401)	421%
Fair value adjustment on note receivable	648,057	(28,969)	(677,026)	2,337%
Gain on investments at fair value	1,084,853	136,815	(948,038)	(693%)
Investment income	27,982	-	(27,982)	100%
Listing expense	(1,137,205)	-	1,137,205	(100%)
Impairment of investment in associate	(2,748,934)	-	2,748,934	100%
Net loss for year	(10,551,238)	(10,711,939)	(160,701)	2%

Notes:

• (1) All figures after December 14, 2020 include New Millennium Iron Corp.

Development

Development expense decreased year over year by 62% of $4.4 million. The Company focused its development timeline for mainly in 2019 but certain projects carried over into 2020. Furthermore, in 2020, the Company moved forward with hiring more technical staff to provide lighter touch development work. Abaxx has made these development investments, with respect to ACX:

• Building the Exchange: 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.

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Abaxx Technologies Inc. (Formerly New Millennium Iron Corp.) Management’s Discussion and Analysis For the year ended December 31, 2020 Dated March 31, 2021

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• Building the Clearinghouse: 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.

Salaries and wages

Abaxx is still building its core team of operators, managers, and support staff. During 2020 there was a $0.3 million or 21% decrease in staff cost and this was due to certain staff departure, as management wanted to align with the right people to grow with the Company, slower job market due to the pandemic. The Company expects this line will increase in the coming quarters as management hire more skilled staff and move closer to a “go live” date with the Exchange.

Professional fees

For FY 2020, professional fees increased by 147% or $1.1 million. The Company incurred increased fees for legal, accounting, audit, and patent work. The major portion of professional fees incurred in 2020 were towards the Company’s public listing and most are non-recurring in nature.

Travel, marketing, and promotion

Travel, marketing, and promotion decreased by 16% or $47,000 year or year. The major expenditures related to development of our corporate brands, investment in marketing the brand, development of investor relations protocols and podcasts.

General and administrative

During the year 2020, the Company increased it spend on G&A by $131,000 and this mainly related to short term office spaces, internet services, postage, courier, delivery, and communications.

Loss on investment under equity method

Loss on investment under equity method relates to Operem and the Company’s 45% share of its operating losses. Operem was not as active in 2020 as it was in 2019 and therefore Abaxx’ share of losses was lower.

Interest and accretion expenses on convertible debentures

During the year ended December 31, 2020, the Company added two additional debentures that totalled $1.7 million. The company incurred interest and accretion expenses of $338,750 and $1,957,789 respectively, up until December 14, 2020 when all three debentures were converted to common shares on the Company.

Share-based compensation

Share-based compensation expense is $0.8 million or 124% higher than FY 2019. The changes are due to the stock options granted to directors, officers, employees, and consultants, intended to provide an incentive mechanism to foster the interest of these individuals in the long-term success of the Company.

13

Abaxx Technologies Inc. (Formerly New Millennium Iron Corp.) Management’s Discussion and Analysis For the year ended December 31, 2020 Dated March 31, 2021

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Fair value adjustment on note receivable

In September 2018, the Company issued an unsecured convertible debenture to an arm length party, Smart Crowd Holding Limited ("SCHL") in the amount of USD $140,000 (CAD $181,888).

The loan is measured at fair value through profit or loss. The fair value adjustment recognized in the year ended December 31, 2020 was $648,057 (2019 loss of $28,969). The loan has not been repaid as of December 31, 2020.

Gain on investments at fair value

The Company holds 2,699,410 common stock of Pasig and Hudson Private Limited ("P&H"), representing 18% of the outstanding common stock in P&H. The Company reports its interest in P&H at fair value with changes in fair value recorded through the Company's consolidated statement of comprehensive loss. During the year ended December 31, 2020, the Company reported a gain of $1,084,852 (2019 $136,815) in the consolidated statement of loss as a result of a change in the fair value of the investment in P&H.

Listing expense

In connection with the amalgamation with NML, the Company issued 438,927 common shares as finder’s fees to a third-party. The fair value of these shares of $434,055 was estimated at $0.99 per share based on a recent private placement, adjusted for any conversion ratios. In addition, the Company paid $508,369 legal fees in relation with the RTO transaction which constitute a part of the consideration issued. As the acquisition was not considered a business combination, the excess of consideration paid over the net assets acquired together with any transaction costs incurred for the amalgamation is expensed as a transaction in accordance with IFRS 2 ShareBased Payments and shown as “listing expense” of $1,137,205.

Impairment of investment in associate

During the year ended December 31, 2020, management noted there were indicators of impairment with the Operem investment, including lack of funding and limited operations and has determined to record impairment on the investment in associate of $2,748,934 to decrease the balance to nil.

14

Abaxx Technologies Inc. (Formerly New Millennium Iron Corp.) Management’s Discussion and Analysis For the year ended December 31, 2020 Dated March 31, 2021

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Liquidity and Financial Position

Capital Resources

A key element of the Company’s financing strategy is to fund its operations primarily through the issuance of equity instruments. Accordingly, the Company has historically carried manageable amounts of long-term debt.

The Company may enter into credit facilities or other financing arrangements in future periods to capitalize on market opportunities.

The following table summarizes capital resources and cash as at December 31, 2020 and 2019:

	FY	FY	$	%
	2020	2019	Change	Change
Cash and cash equivalents	8,861,671	1,707,372	7,154,299	419%
Marketable securities	3,089,731	-	3,089,731	100%
Subscription receivables	200,000	-	200,000	100%
Funds held in Trust	1,326,450	-	1,326,450	100%
Other receivables	590,550	35,672	554,878	1,556%
Prepaid and other assets	54,167	5,022	49,145	979%
Convertible note receivable	800,976	152,919	648,057	424%
Accounts payable and accrued liabilities	(3,211,564)	(2,227,230)	(984,334)	(44%)
Amount due to shareholders	-	(2,032,657)	2,032,657	100%
Convertible debenture-derivative liability	-	(2,939,705)	2,939,705	100%
Net Working Capital	11,711,981	(5,298,607)	17,010,588	321%
Investment in associate	-	2,633,710	(2,633,710)	(100%)
Investments at fair value	2,084,853	1,000,000	1,084,853	108%
Tangible Capital	13,796,834	(1,664,897)	15,461,731	929%

Notes:

(1) All figures after December 14, 2020 include New Millennium Iron Corp.

At December 31, 2020, the Company had $13.5 million in cash and cash equivalents, marketable securities, subscription receivables, funds held in trust and this is an increase of $11.7 million or 689% over December 31, 2019. The net working capital was $11.7 million increased by $17 million (321%) increase over December 31, 2019. The increase in cash and cash equivalents resulted from the Company's acquisition of $10.7 million in cash and investments from New Millennium as part of the RTO transaction.

Tangible Capital as at December 31, 2020 is $13.8 million, a $15.4 million (929%) increase over December 31, 2019.

The Company believes its net working capital balance is sufficient to fund expected requirements for the next 12 months. These include further development of the exchange platform, marketing expenditures to promote the growth of the business and explore additional opportunities to create shareholder value.

15

Abaxx Technologies Inc. (Formerly New Millennium Iron Corp.) Management’s Discussion and Analysis For the year ended December 31, 2020 Dated March 31, 2021

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The Company has no significant long-term debt or material contractual payment obligations. As such, working capital can be used for further business development.

Cash Flow Summary

Cash Flow Summary
FY 2020 FY 2019	$ Change % Change
Net cash provided by (used in) Operating activities (5,312,343) (6,510,443) Investing activities 7,683,226 - Financing activities 4,783,416 7,314,712	1,198,100 18% 7,683,226 100% (2,531,296) (35%)
Increase in cash and cash equivalents 7,154,299 804,269	6,350,030 790%

Notes:

• (1) All figures after December 14, 2020 include New Millennium Iron Corp.

Operating Activities

For FY 2020, the Company used $5.3 million in cash for operating activities, decrease of $1.2 million or 18% when compared to FY 2019. This was due lower spend on development and salaries in FY 2020.

Investing Activities

Cash from investing activities increased by $7.6 million when compared to FY 2019. The main movements in investing activities is due primarily cash acquired from New Millennium under the RTO.

Financing Activities

The net cash received from financing activities in FY 2020, decreased by $2.5 million when compared to FY 2019. This decrease was due largely to the convertible debenture, private placement and shareholder loans totalling $7.3 million received in 2019. The Company raised equity through a private placement in Q3 2020 for $5.2 million.

Commitments and Contractual Obligations

Royalty Payments

During the year ended December 31, 2019, the Company entered into a Royalty Agreement (“Royalty”) with its subsidiary Abaxx Singapore. The Royalty payment contains the following terms:

• Abaxx Singapore will accrue and pay a royalty equal to 2% of gross revenue to the Company, payable quarterly as of April 1, 2019 continuing in perpetuity until the obligation is relinquished by the Company.

• The amounts payable become due to the Company after Abaxx Singapore generates

• positive earnings before income tax and depreciation of USD $25,000,000 in a calendar year.

• There is no interest accrued on royalty payments accrued and not yet paid.

As of December 31, 2020, Abaxx Singapore has not achieved any revenue and as such no amounts have been accrued in the consolidated financial statements.

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Abaxx Technologies Inc. (Formerly New Millennium Iron Corp.) Management’s Discussion and Analysis For the year ended December 31, 2020 Dated March 31, 2021

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In addition, the Royalty permits the Company to purchase an increase in the royalty payments by 1% for USD $10,000,000 by February 1, 2024.

As of December 31, 2020, the Company has not made any payments to Abaxx Singapore to increase the royalty earnings percentage.

Transfer of Intellectual Property and License Agreement

The Company has developed proprietary digital technology and intellectual property for application to exchange trading and clearing for commodities and financial products including liquid natural gas as well as other tradable commodities and applications. (“Exchange Technology”).

During the year ended December 31, 2019 the Company entered into a Master Licensing Agreement (“MLA”) with its majority owned affiliate Abaxx Singapore. As a result of this agreement, the Company has assigned exclusive title rights of use as well as the sub license rights to the Exchange Technology by way of a master license agreement.

The Company maintains ownership of the intellectual property licensing in the MLA.

Abaxx Singapore has agreed to pay the Company earnings if in the future it sub licenses the Exchange Technology, in which case as a result of the MLA royalty fees would be as follows:

• An amount equal to 20% of revenues on the first USD $2,000,000

• An amount equal to 10% of revenues on the next USD $3,000,000

• An amount equal to 5% of revenue on any excess revenue

Payments from Abaxx Singapore under these agreements are due monthly to the Company. As of December 31, 2020, no amounts have been accrued by Abaxx Singapore and no amounts have been recorded as receivable by the Company under either a royalty agreement or the MLA.

The Company has not recorded the benefits under either of these agreements as an asset due to the intellectual property being still under development, no revenues have been generated and commercial viability of the Exchange Technology has not yet been determined.

As of the year ended December 31, 2020, this agreement does not have any impact on the consolidated financial statements of the Company.

Contingency

In the ordinary course of business, the Company and its subsidiaries may become involved in various legal and regulatory actions. The Company establishes legal provisions when it becomes probable that the Company will incur a loss and the amount can be reliably estimated. The Company also estimates the aggregate range of reasonably possible losses (RPL) in its legal and regulatory actions (that is, those which are neither probable nor remote), in excess of provisions.

As at December 31, 2020, the Company is being sued by a former consultant of NML in the amount of $1.5 million. The Company believes that the consultant was appropriately compensated and is contesting this claim.

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Abaxx Technologies Inc. (Formerly New Millennium Iron Corp.) Management’s Discussion and Analysis For the year ended December 31, 2020 Dated March 31, 2021

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The RPL is from zero to approximately $1.5 million plus legal costs. The Company's provisions and RPL represent the Company's best estimates and are based upon currently available information for the current action for which an estimate can be made, but there are several factors that could cause the Company's provision and/or RPL to be significantly different from its actual or RPL. For example, the Company’s estimate involves significant judgment due to the stage of the proceeding, the yet-unresolved issues in the proceeding, and the attendant uncertainty of the various potential outcomes of the proceeding.

In management’s opinion, based on its current knowledge and after consultation with counsel, the ultimate disposition of this action, will not have a material adverse effect on the consolidated financial condition or the consolidated cash flows of the Company. However, because of the factors listed above, as well as other uncertainties inherent in litigation, there is a possibility that the ultimate resolution of the legal action may be material to the Company’s consolidated results of operations for any reporting period.

Off-Balance Sheet Arrangements

There are currently no off-balance sheet arrangements which could have an effect on current or future results or operations, or the financial condition of Abaxx.

Subsequent Events

On February 11, 2021, the Company and AirCarbon Pte. Ltd (“AirCarbon”) signed a Letter of Intent (“LOI”) to develop and license software services and explore commodity futures market related services as AirCarbon advances standardized contracts for carbon offset markets.

Under the terms of the LOI, Abaxx has a right to subscribe for new shares in AirCarbon’s. If investments are made, Abaxx has the right to acquire an equity voting stake of up to 10% in AirCarbon. Abaxx has made the first investment of USD $500,000 through its wholly owned subsidiary Abaxx Technologies Corp. The proposed investment represents an initial step to key relationships to deploy Abaxx's technology in carbon markets. The total Abaxx investment would yield a strategic stake in this Singapore-based OTC market initiative for standardizing and trading global voluntary carbon credits, as well as potential integration into the Abaxx Exchange which will enable the development of Environmental, Social and Governance (ESG)-related commodity pricing differentials in Abaxx markets. Pursuant to the completion of both tranches of the investment, Abaxx will further negotiate (i) an LOI for ACX to purchase software licenses from Abaxx Technologies, (ii) exclusive partnership on futures clearing when the ACX platform advances beyond the current spot market setup to a regulated futures market anticipated in the next 12 to 18 months. This investment emphasizes Abaxx’s commitment to its home base in Singapore. Since inception, Abaxx has worked closely with and supported the efforts of Enterprise Singapore in establishing the country as the leading financial center of Asia, and the home for critical energy transition marketplaces and financial technology innovation.

18

Abaxx Technologies Inc. (Formerly New Millennium Iron Corp.) Management’s Discussion and Analysis For the year ended December 31, 2020 Dated March 31, 2021

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Critical Accounting Estimates

The preparation of the consolidated financial statements requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates. The consolidated financial statements include estimates that, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the consolidated financial statements and may require accounting adjustments based on future occurrences.

Revisions to accounting estimates are recognized in the period in which the estimate is revised and future periods if the revision affects both current and future periods. The estimates are based on historical experience, current and future economic conditions, and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Significant assumptions about the future that management has made that could result in a material adjustment to the carrying amounts of assets and liabilities, in the event that actual results differ from assumptions made, relate to, but are not limited to, the following: Expected credit loss

Management determines the expected credit loss by evaluating individual receivable balances and considering a member’s financial condition and current economic conditions. Other receivables are written off when deemed uncollectible. Recoveries of other receivables previously written off are recorded as income when received. All other receivables and promissory note receivable are expected to be collected within one year of the consolidated statement of financial position date.

Share-based payments

Management is required to make certain estimates when determining the fair value of stock options awards, and the number of awards that are expected to vest. These estimates affect the amount recognized as share-based compensation in the statement of loss and comprehensive loss, based on estimates of forfeiture and expected lives of the underlying stock options.

Warrants

Management is required to make certain estimates on all inputs in the Black-Scholes option-pricing model, when determining the fair value of warrants included in unit financings.

Income taxes and recovery of deferred tax assets

Provisions for taxes are made using the best estimate of the amount expected to be paid based on a qualitative assessment of all relevant factors. The Company reviews the adequacy of these provisions at the end of the reporting period. However, it is possible that at some future date an additional liability could result from audits by taxing authorities. Where the final outcome of these tax related matters is different from the amounts that were initially recorded, such differences will affect the tax provisions in the period in which such determination is made.

Fair value of financial instruments

The individual fair values attributed to the different components of a financing transaction, and/or derivative financial instruments, are determined using valuation techniques. The Company uses

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Abaxx Technologies Inc. (Formerly New Millennium Iron Corp.) Management’s Discussion and Analysis For the year ended December 31, 2020 Dated March 31, 2021

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judgment to select the methods used to make certain assumptions and in performing the fair value calculations in order to determine (a) the values attributed to each component of a transaction at the time of their issuance; (b) the fair value measurements for certain instruments that require subsequent measurement at fair value on a recurring basis; and (c) for disclosing the fair value of financial instruments subsequently carried at amortized cost. These valuation estimates could be significantly different because of the use of judgment and the inherent uncertainty in estimating the fair value of these instruments that are not quoted in an active market.

Going concern assumption

Going concern presentation of the financial statements which assumes that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of operations as they come due. The Company can obtain sufficient financing to cover planned operations throughout the next twelve-month period and fund the working capital.

Consolidation

Judgment is applied in assessing whether the Company exercises control and has significant influence over the entities in which the Company directly or indirectly owns an interest. The Company has control when it has the power over the subsidiary, has exposure to rights or variable returns and has the ability to use its power to affect the returns. Significant influence is defined as the power to participate in the financial and operational decisions of the subsidiaries. Where the Company is determined to have control, these entities are consolidated. Additionally, judgment is applied in determining the effective date on which control was obtained.

Investment in associate

The values relating to investment in associate involve significant estimates and assumptions, including future cash flows and discount rates. It is tested for impairment annually or more frequently if the circumstances or assumptions change significantly.

COVID-19 Outbreak

The outbreak of the novel strain of coronavirus, specifically identified as “COVID-19”, has resulted in governments worldwide enacting emergency measures to combat the spread of the virus. These measures, which include the implementation of travel bans, self-imposed quarantine periods and social distancing, have caused material disruption to businesses globally resulting in an economic slowdown. Global equity markets have experienced significant volatility and weakness. Governments and central banks have reacted with significant monetary and fiscal interventions designed to stabilize economic conditions.

The duration and impact of the COVID-19 outbreak is unknown at this time, as is the efficacy of the government and central bank evolve and vaccination programs are underway. It is not possible to reliably estimate the length and severity of these developments and the impact on the financial results and condition of the Company and its operating subsidiaries in future periods. There are travel restrictions and health and safety concerns in areas that the Company operate including the United States of America, Barbados, Singapore, and Canada. Employees and contractors continue to work remotely and leverage virtual technology to conduct operations. The Company is closely monitoring the business environment and to implement measures to keep disruptions minimal to business operations.

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Abaxx Technologies Inc. (Formerly New Millennium Iron Corp.) Management’s Discussion and Analysis For the year ended December 31, 2020 Dated March 31, 2021

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Capital risk management

The Company manages its capital with the following objectives:

• to ensure sufficient financial flexibility to achieve the ongoing business objectives including funding of future growth opportunities, and pursuit of accretive acquisitions; and

• to maximize shareholder return through enhancing the share value.

The Company monitors its capital structure and makes adjustments according to market conditions in an effort to meet its objectives given the current outlook of the business and industry in general. The Company may manage its capital structure by issuing new shares, repurchasing outstanding shares, adjusting capital spending, or disposing of assets. The capital structure is reviewed by Management and the Board of Directors on an ongoing basis.

The Company considers its capital to be equity, comprising share capital, contributed surplus, reserves, non controlling interest, cumulative transaction adjustments, and deficit which at December 31, 2020 totaled $15,517,088 (2019 $950,261).

The Company manages capital through its financial and operational forecasting processes. The Company reviews its working capital and forecasts its future cash flows based on operating expenditures, and other investing and financing activities.

Financial risk factors

Fair value

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements for invested assets are categorized into levels within a fair value hierarchy based on the nature of valuation inputs (Level 1, 2 or 3).

The fair value of other financial assets and financial liabilities is considered to be the carrying value when they are of short duration or when the instrument’s interest rate approximates current observable market rates.

The fair value of cash and cash equivalents, marketable securities, and funds in trust approximates their carrying amounts due to the relatively short period to maturity.

Where other financial assets and financial liabilities are of longer duration, then fair value is determined using the discounted cash flow method using discount rates based on adjusted observable market rates.

The table below summarizes the assets and liabilities that are included at their fair values in the Company’s consolidated statement of financial position as at December 31, 2020 and December 31, 2019. These assets and liabilities have been categorized into hierarchical levels, according to the significance and reliability of the inputs used in determining fair value measurements. The fair value hierarchy has the following levels:

21

Abaxx Technologies Inc. (Formerly New Millennium Iron Corp.) Management’s Discussion and Analysis For the year ended December 31, 2020 Dated March 31, 2021

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• Level 1 – quoted prices represent unadjusted quoted prices for identical instruments exchanged in active markets.

• Level 2 – significant other observable inputs includes directly or indirectly observable inputs, other than quoted prices for identical instruments exchanged in active markets.

• Level 3 – significant unobservable inputs include inputs that are not based on observable market data.

The following table illustrates the classification of the Company's financial instruments within the fair value hierarchy as at December 31, 2020 and 2019.

December 31,2020	Level 1	Level 2	Level 2	Level 3	Total
Cash and cash equivalents	$ 8,861,671	$	-	$ -	$ 8,861,671
Marketable securities	3,089,731		-	-	3,089,731
Funds held in Trust	1,326,450		-	-	1,326,450
Investment at fair value	-		-	2,084,853	2,084,853
Convertible note receivable	-		-	800,976	800,976
	$ 13,277,852	$	-	$ 2,885,829	$ 16,163,681
December 31, 2019	Level 1	Level 2		Level 3	Total
Cash and cash equivalents	$ 1,707,372	$	-	$ -	$ 1,707,372
Investment at fair value	-		-	1,000,000	1,000,000
Convertible note receivable	-		-	152,919	152,919
Convertible debenture - derivative
liability	-		-	(2,939,705)	(2,939,705)
	$ 1,707,372	$	- $ (1,786,786)		$ (79,414)

During the year ended December 31, 2020, the movement in level 3 financial instruments included additions of $1,651,150, disposals of $3,465,034 on conversion of convertible debt, and gain on fair value adjustments of $2,858,731. Refer to Note 12 of the audit financial statements for the information on convertible debenture.

During the year ended December 31, 2019, the movement in level 3 financial instruments included additions of $2,632,000, no disposals and gain on fair value adjustments of $415,551.

Significant inputs

The measurement basis for the Investment at fair value was the projected revenue and revenue multiplier as at December 31, 2020. A 10% fluctuation in the projected revenue would result in a $85,966 gain or loss on fair value adjustment in the consolidated financial statements. A 10% fluctuation in the revenue multiplier would result in a $85,795 gain or loss on fair value adjustment in the consolidated financial statements.

The measurement basis for the Convertible note receivable was the expected share price and the probability of a fund raise. A 10% fluctuation in the expected share price would result in a $111,818 gain or loss on fair value adjustment in the consolidated financial statements. A 10% fluctuation in the probability of a fund raise would result in a $34,328 gain or loss on the fair value adjustment in the consolidated financial statements. Derivative liability refer to note 12.

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Abaxx Technologies Inc. (Formerly New Millennium Iron Corp.) Management’s Discussion and Analysis For the year ended December 31, 2020 Dated March 31, 2021

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The Company’s risk exposures and the impact on the Company’s financial instruments are summarized below:

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counter party to a financial instrument fails to meet its contractual obligations.

The Company's credit risk is attributable to cash and cash equivalents, subscription receivable, marketable securities, funds held in trust, convertible note receivable, and other receivables. Cash and cash equivalents are on deposit with Canadian and Singaporean chartered banks, from which management believes the risk of loss is remote. Other receivables are due from the Ministry of Revenue from which management believes the risk of loss to be remote. Convertible note receivable is due from an arm's length third party from which management believes the risk of loss to be remote. The Company’s maximum exposure to credit risk as at December 31, 2020 and 2019 is the carrying value of cash and cash equivalents, marketable securities, subscription receivable, funds held in trust, convertible note receivable, and other receivables.

Interest rate risk

The Company has cash and cash equivalents bearing fixed interest rates and no variable interestbearing debt. The Company's has convertible debentures and amounts due from shareholder bearing fixed interest rate and no variable interest-bearing component. The Company’s current policy is to invest excess cash in investment-grade short term deposit certificates issued by its banking institutions. The Company periodically monitors the investments it makes and is satisfied with the credit ratings of its banks.

Liquidity risk

The Company's approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. As at December 31, 2020, the Company had current assets of $14,923,545 to settle current liabilities of $3,211,564. The ability of the Company to continue as a going concern is dependent on its ability to secure additional equity or other financing. All of the Company’s financial liabilities have contractual maturities of less than 90 days and are subject to normal trade terms.

Market risk

Market risk is the risk of loss that may arise from changes in market forces such as interest rates and foreign exchange rates.

Foreign currency risk

The Company's functional and reporting currency is the Canadian dollar. Major purchases and investments are transacted in United States dollar. The Company is exposed to foreign currency risk with respect to the cash balance of $1,438,020 (2019 - $1,612,374) which is denominated in United States dollars.

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Abaxx Technologies Inc. (Formerly New Millennium Iron Corp.) Management’s Discussion and Analysis For the year ended December 31, 2020 Dated March 31, 2021

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Sensitivity analysis

Based on management's knowledge and experience of the financial markets, the Company believes the following movements are reasonably possible over a 12-month period:

i) The Company has no variable interest-bearing debt at December 31, 2020 and 2019.

ii) The Company has cash and accounts payable denominated in United States dollars. Sensitivity to a plus or minus 5 percentage point change in exchange rate would lead to a $16,450 (2019 - $80,619) gain (loss) in the reported comprehensive loss.

Related Party Transactions

The Company considers key management to be officers and directors. During the year ended December 31, 2020, $164,201 (2019 $283,965) of fees were paid to key management and companies controlled by or related to key management.

In addition, during the year, the Chief Financial Officer ("CFO") of the Company was a senior employee of Marrelli Support Services Inc. ("Marrelli"), a firm providing accounting services. Fees paid to Marrelli for accounting and CFO services amounted to $98,736 (2019 $37,976).

During the year ended December 31, 2019 a shareholder advanced $1,970,485 to the Company. The advances bear interest at 8% per annum. The amounts were unsecured and due on demand.

During the year ended December 31, 2020, the Company paid $467,122 professional fees to Peterson McVicar LLP a law firm where one of the Company’s directors is a partner.

During the year ended December 31, 2020, $1,298,800 of advance from shareholder was converted to convertible debt and subsequently converted to common shares on December 14, 2020. Refer to note 12. The company repaid $756,149 (Including accrued interest of $84,464) of the remaining advance from shareholder. The loan accrued $22,292 interest during the year ended December 31, 2020. As of December 31, 2020, the remaining advance from shareholder was $nil.

During the year ended December 31, 2019, the Company issued Debenture with the CEO of the Company. On December 14, 2020, the principal balance and accrued interest of USD $2,156,055 ($2,750,479) balance of Debenture was converted into shares of the Company.

The Company also converted USD $1,000,000 ($1,298,800) in previously outstanding shareholder advances into Debenture. Further on December 14, 2020, the principal balance and accrued interest of USD $1,075,616 ($1,372,163) balance of Debenture was converted into shares of the Company.

The Company paid or accrued nil (2019 $1,223,822) in consulting and development services from P&H in the normal course of business. See note 10.

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Abaxx Technologies Inc. (Formerly New Millennium Iron Corp.) Management’s Discussion and Analysis For the year ended December 31, 2020 Dated March 31, 2021

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Included in accounts payable and accrued liabilities is $122,362 (2019 $18,547) owed to key management and companies controlled by or related to key management.

Key management and directors received $23,950 in share-based compensation during the year ended December 31, 2020 (2019 $200,156).

The company issued 181,688 common shares to key management and directors of $179,666 for professional services during the year ended December 31, 2020. The shares were estimated at $0.99 per share based on a recent private placement.

Outstanding Share Capital Data

As of the date of this MD&A, the Company had 64,163,223 common shares issued and outstanding, and 5,416,736 options outstanding, each option exercisable for the purchase of one common share.

Risks and Uncertainties

Due to the nature of Company’s business and its present stage of development, prospective investors in the Company’s securities should carefully consider the specific and general risks involved in an investment in the securities of the Company. Risk factors that could materially affect the Company’s business, results of operations, prospects and financial condition include:

Nature of Business; Limited Operating History and Financial Resources; Dividends Reporting Issuer Risk; Limited Assets; Limited Market for Securities; Risks related to insurance of Abaxx’s operations; Additional Financing Requirements; Exposure and Sensitivity to MacroEconomic Conditions; Risks related to regulation by governmental authorities; Operations in Foreign Jurisdictions; COVID-19 Global Pandemic; Protection of Abaxx Tech Software and IP Portfolio; Global Financing Conditions; Acquisition Risk; Risks related to volatility of share price, absence of dividends and fluctuation of operating results; Competition; Growth Risk; Risks related to conflicts of interest; Political Regulatory Risks; Currency Risk; Contractual Risk; Profitability Risks related to value of securities; Tax Amendment Risk; Litigation Risks; Going Concern Risk Economic environment and global economic risk; Market for Securities; Third Party Risk Clearinghouse Risk; Inadequacy of Risk Management Procedures; Malicious Actor Risk; Thirdparty Software License Risk; Competitive Risks for Abaxx Tech; Competitive Risks for ACX System Failure Risk; Security Threats; Limited Management Experience; Reliance on Management and Key Personnel; Software Development Risk; Undetected Error Risk; Risk of Technological Change; Dependence of Technical Infrastructure; Use and Storage of Personal Information and Compliance with Privacy Laws; Slow Acceptance of Products;

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 operations and operating results, and as a result could materially impact its business, prospects and financial condition. Please refer to those risks discussed in the materials that management from time to time file with, or furnish to, the Canadian securities regulatory authorities, including the section entitled "Risks and Uncertainties" in the Company’s most recently filed annual information form, available on SEDAR at http://www.sedar.com/.

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Abaxx Technologies Inc. (Formerly New Millennium Iron Corp.) Management’s Discussion and Analysis For the year ended December 31, 2020 Dated March 31, 2021

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Disclosure Controls and Procedures

The Company’s disclosure controls and procedures are designed to provide reasonable assurance that information is accumulated and communicated to the Company’s management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. As of December 31, 2020, the Company’s management, with the participation of the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of its disclosure controls and procedures, as defined under the Canadian securities regulatory authorities, and have concluded that the Company’s disclosure controls and procedures are effective.

Internal control over financial reporting

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. These controls include policies and procedures that:

• pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

• provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, and that receipts and expenditures are being made only in accordance with authorizations of management and directors of the Company; and

• provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

All control systems contain inherent limitations, no matter how well designed. As a result, the Company’s management acknowledges that its internal control over financial reporting will not prevent or detect all misstatements due to error or fraud. In addition, management’s evaluation of controls can provide only reasonable, not absolute, assurance that all control issues that may result in material misstatements, if any, have been detected. Management assessed the effectiveness of internal control over financial reporting, using the Internal Control-Integrated Framework 2013 issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and based on that assessment concluded that internal control over financial reporting was effective as at December 31, 2020.

Changes in internal control over financial reporting

There have been no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting during the year ended December 31, 2020.

Additional Information

Additional information relating to the Company, including the Company’s annual information form, can be found on SEDAR at www.sedar.com.

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