AmeriTrust Financial Technologies Inc. - Interim / Quarterly Report 2021

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POWERBAND SOLUTIONS INC. Condensed Interim Consolidated Financial Statements Three and Nine Months Ended September 30, 2021 and 2020 (Expressed in Canadian Dollars)

Notice to Reader

The accompanying unaudited condensed interim consolidated financial statements of PowerBand Solutions Inc. (the "Company") have been prepared by and are the responsibility of management. The unaudited condensed interim consolidated financial statements have not been reviewed by the Company's auditors.

POWERBAND SOLUTIONS INC.

Condensed Interim Consolidated Statements of Financial Position (Expressed in Canadian Dollars) (Unaudited)

			As at,		As at,
			September 30,		December 31,
	Note		2021		2020
			(Unaudited)		(Audited)
ASSETS
Current assets
Cash	7	$	9,236,773	$	1,403,213
Accounts receivable, net	8		2,158,448		1,297,425
Inventory	9		18,000		18,000
Deposits	10		-		354,640
Other current assets			551,781		277,245
Total current assets			11,965,002		3,350,523
Non-current assets
Property and equipment, net	12		354,575		426,093
Goodwill	13		2,662,429		2,660,549
Intangible assets, net	13		3,198,905		2,852,781
Right-of-use asset	14		3,430,147		3,912,622
Investment	11		3,449,874		636,600
Total non-current assets			13,095,930		10,488,645
Total assets		$	25,060,932	$	13,839,168
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities	15, 22	$	3,222,217	$	3,171,728
Short term loan	16		-		254,640
Deferred revenue			77,978		18,000
Due to related parties	22		2,672,845		4,611,421
Lease obligation - current portion	17		651,894		596,817
Government assistance	19		60,000		623,635
Debt - currentportion	5		2,548,000		-
Total current liabilities			9,232,934		9,276,241
Non-current liabilities
Lease obligation - long term portion	17		3,208,710		3,683,124
Long-term debt	5		1,911,350		-
Total non-current liabilities			5,120,060		3,683,124
Total liabilities			14,352,994		12,959,365
Shareholders' Equity (Deficiency)
Share capital	20		41,226,082		18,932,553
Obligation to issue shares	5		-		59,935
Reserves	20		4,908,862		3,568,482
Other comprehensive income			(3,998)		(1,348)
Deficit			(36,345,897)		(23,257,282)
Total shareholders' equity (deficiency) attributed to owners			9,785,049		(697,660)
Non-controllinginterest	21		922,889		1,577,463
Total shareholders' equity			10,707,938		879,803
Total liabilities and shareholders' equity (deficiency)		$	25,060,932	$	13,839,168

Nature of operations and going concern (note 1); Subsequent events (note 27) Approved on behalf of the Board of Directors:

"Kelly Jennings" (signed) "Bill Butler" (signed) Director Director

The accompanying notes are an integral part of these condensed interim consolidated financial statements. - 1 -

POWERBAND SOLUTIONS INC.

Condensed Interim Consolidated Statements of Loss (Expressed in Canadian Dollars) (Unaudited)

		Three months ended	Three months ended	Three months ended		Nine months ended	Nine months ended	Nine months ended
		September 30,				September 30,
		2021		2020		2021		2020
Revenue
Vehicle and auction sales	$	46,691	$	6,716	$	184,835	$	280,773
Software development sales (note 22)		370,654		400,583		1,051,072		1,124,080
Lease origination revenue		8,654,996		169,426		15,128,949		196,418
Subscription revenue		162,707		-		474,311		-
		9,235,048		576,725		16,839,167		1,601,271
Cost of goods sold
Vehicle acquisition (note 9)		36,624		-		165,773		260,864
Software development		367,709		292,425		1,016,202		820,578
Lease acquisition		4,792,960		(4,204)		7,701,120		14,846
Subscription costs		28,612		-		70,130		-
		5,225,905		288,221		8,953,225		1,096,288
Gross Profit		4,009,143		288,504		7,885,942		504,983
Expenses
Salaries and wages (note 19)		2,301,708		1,053,642		5,530,263		3,850,160
Professional fees (note 22)		1,519,502		472,392		3,167,807		822,549
Cost of finance		-		-		136,003		-
Share based compensation (note 20(f))		317,293		662,920		756,359		997,947
Investor relations		11,377		34,845		415,778		69,377
Regulatory fees		97,732		47,045		271,361		140,606
Insurance		48,625		75,970		99,219		151,085
Sales and marketing		636,972		69,437		1,393,920		185,972
Rent expense		20,665		-		58,057		-
Office and sundry expenses		463,327		181,498		976,065		401,755
Travel expense		140,506		6,805		297,298		39,420
Utilities		-		16,631		-		49,455
Telephone		15,864		8,666		41,549		19,744
Interest and bank charges		80,121		24,391		142,554		128,813
Amortization of intangible assets (note 13)		196,744		176,353		588,891		396,259
Amortization of tangible assets (note 12)		42,940		43,164		123,140		195,608
Amortization of right of use assets (note 14)		169,693		179,292		500,278		532,827
Accretion (note 17, 18)		59,936		72,633		183,480		294,482
Foreign exchange loss(gain)		161,213		41,248		82,391		(40,682)
		6,284,218		3,166,932		14,764,413		8,235,377
Loss from operations		(2,275,075)		(2,878,428)		(6,878,471)		(7,730,394)
Other income (expense)
Interest injoint venture(note 6)		-		-		-		(291,094)
				-		-		(291,094)
Loss before taxes		(2,275,075)		(2,878,428)		(6,878,471)		(8,021,488)
Income taxes
Net loss	$	(2,275,075)	$	(2,878,428)	$	(6,878,471)	$	(8,021,488)
Net loss attributable to:
Equity holders of PowerBand Solutions Inc.		(2,199,316)		(2,040,553)	$	(5,865,539)	$	(5,808,020)
Non-controllinginterest(note 21)	$	(75,759)		(837,875)	$	(1,012,932)	$	(2,213,468)
Basic and diluted net lossper share	$	(0.012)	$	(0.026)	$	(0.041)	$	(0.072)
Weighted average number of
common shares outstanding - basic and diluted		188,245,051		112,555,388		168,613,937		111,830,987

The accompanying notes are an integral part of these condensed interim consolidated financial statements. - 2 -

POWERBAND SOLUTIONS INC.

Condensed Interim Consolidated Statements of Comprehensive Loss (Expressed in Canadian Dollars) (Unaudited)

	Three months ended Nine months ended	Three months ended Nine months ended
	September 30, September 30,
	2021	2020 2021 2020
Net loss	(2,275,075)	(2,878,428) $ (6,878,471) $ (8,021,488)
Other Comprehensive income (loss)
(Loss) Gain on foreign currency translation	149,957	22,606 (50,018) (6,371)
Total Comprehensive Income(loss)	$ (2,125,118) $ (2,855,822) $ (6,928,489) $ (8,027,859)
Total comprehensive loss attributable to:
Equity holders of PowerBand Solutions Inc	(2,007,558)	(2,007,684) $ (5,888,723) $ (5,815,719)
Non-controllinginterest	(117,560)	(848,138) $ (1,039,766) $ (2,212,140)

The accompanying notes are an integral part of these condensed interim consolidated financial statements. - 3 -

POWERBAND SOLUTIONS INC.

Condensed Interim Consolidated Statements of Cash Flows (Expressed in Canadian dollars) (Unaudited)

Nine Months Ended September 30,		2021		2020
Cash flows provided by (used in) operating activities
Net loss for the period	$	(6,878,471)	$	(8,021,488)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Accretion on lease liability (note 17)		183,480		226,533
Amortization of intangible assets (note 13)		588,891		396,259
Amortization of tangible assets (note 12)		123,140		-
Amortization of right of use assets (note 14)		500,278		728,436
Foreign exchange loss (gain)		(61,520)		14,511
Interest on convertible note		(9,804)		67,951
Loss on joint venture (note 6)		-		291,094
Forgiveness of loans		(650,567)		-
Share based compensation(note 20(f))		756,359		997,947
		(5,448,214)		(5,298,757)
(Increase) Decrease in:
Accounts receivable		(1,249,823)		(490,996)
Inventory		-		200,365
Deposits		100,000		-
Other non-current assets		123,306		-
Increase (Decrease) in:
Accounts payable and accured liabilities		(102,204)		(232,911)
Deferred revenue		58,905		(200,300)
Net cash used in operating activities		(6,518,030)		(6,022,599)
Cash flows provided by (used in) investing activities
Purchase of property and equipment (note 12)		(53,211)		(262,481)
Deposit in trust		-		(780,934)
Addition to intangible asset (note 13)		(932,321)		(570,764)
Purchase of investments(note 5 and 11)		(4,981,052)		-
Net cash used in investing activities		(5,966,584)		(1,614,179)
Cash flows provided by (used in) financing activities
Private placements, net		17,096,935		400,000
Exercise of warrants and options		4,720,680		47,500
Funds from loan		-		2,388,559
Payment of loan		-		(1,467,938)
Payment of lease liability, net of deposits received (note 17)		(621,998)		(648,543)
Convertible debenture financing (note 18)		-		8,093,200
Funds from related parties		4,238,479		-
Payments to related parties		(5,158,136)		(585,327)
Funds from CEBA loan		20,000		40,000
Funds frompaycheckprotectionprogram loan		-		619,995
Net cashprovided by financing activities		20,295,960		8,887,446
Net change in cash		7,811,346		1,250,668
Effect of exchange rate changes on cash held in foreign currencies		22,214		(18,907)
Cash, beginning ofperiod		1,403,213		243,029
Cash, end ofperiod	$	9,236,773	$	1,474,790

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

POWERBAND SOLUTIONS INC.

Condensed Interim Consolidated Statements of Changes in Shareholders' Equity (Deficiency) (Expressed in Canadian dollars) (Unaudited)

(Expressed in Canadian dollars) (Unaudited)
Balance December 31, 2019 Private placements Exercise of warrants Exercise of options Consideration related to 2019 Acquisition of MUSA Holdings LLC (Drivrz Financial) Warrants issued in connection with convertible debt Warrants issued in connection with short-term debt Share-based compensation Disposition of equity interest in subsidiary on conversion of debenture Capital contributions made on behalf of non- controlling interest Change in non-controlling interest due to conversion of debenture Foreign currency translation Loss for the period Balance, September 30, 2020 Balance December 31, 2020 Private placements Share issues costs Broker warrants issued with private placement Shares issued for debt Restricted share units issued Exercise of warrants Exercise of options Shares issued for 2019 Acquisition of MUSA Holdings Inc. (Drivrz Financial) Acquisition of equity interest in subsidiary Share based compensation Capital contributions made on behalf of non- controlling interest Foreign currency translation Loss for the period Balance, September 30, 2021	Number of issued and outstanding shares Share Capital Obligation to issue shares Reserves Equity component of convertible debenture Other comprehensive income Non-controlling interest Deficit Total Shareholders equity # $ $ $ $ $ $ $ $
	105,764,042 16,217,356 124,184 1,445,074 101,062 10,741 268,927 (19,576,102) (1,408,758) 6,153,846 400,000 - - - - - - 400,000 275,000 41,250 - - - - - - 41,250 62,500 9,631 - (3,381) - - - - 6,250 900,000 64,249 (64,249) - - - - - - - - - 180,546 - - - - 180,546 - - - 31,612 - - - - 31,612 - - - 997,947 - - - - 997,947 - - - - - - - 7,957,054 7,957,054 - - - - - - 2,292,146 (2,292,146) - - - - - - - 60,989 (60,989) - - - - - - 5,043 1,328 - 6,371 - - - - - -(2,213,468) (5,808,020) (8,021,488)
	113,155,388 16,732,486 59,935 2,651,798 101,062 15,784 409,922 (19,780,203) 190,784
	137,534,856 18,932,553 59,935 3,568,482 - (1,348) 1,577,463 (23,257,282) 879,803 37,063,952 18,075,901 - - - - - - 18,075,901 - (1,596,365) - 617,399 - - - - (978,966) - (43,622) - 43,622 - - - - - 800,000 1,000,000 - - - - - - 1,000,000 350,000 77,000 - (77,000) - - - - - 9,271,669 3,556,430 - - - - - - 3,556,430 7,173,750 1,164,250 - - - - - - 1,164,250 900,000 59,935 (59,935) - - - - - - - - - - - 24,466 (122,075) (6,719,741) (6,817,350) - - - 756,359 - - - - 756,359 - - - - - - 503,335 (503,335) - - - - - - (27,116) (22,902) - (50,018) - - - - - (1,012,932) (5,865,539) (6,878,471)
	193,094,227 41,226,082 - 4,908,862 - (3,998) 922,889 (36,345,897) 10,707,938

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

POWERBAND SOLUTIONS INC. Notes to the Financial Statements (Unaudited - Expressed in Canadian dollars) For the three and nine months ended September 30, 2021 and 2020

1. NATURE OF OPERATIONS AND GOING CONCERN

Powerband Solutions Inc. (formerly Marquis Ventures Inc.) (“Powerband Solutions” or the “Company”) was incorporated under the Business Corporations Act (British Columbia) on September 29, 2009. The Company’s head office is located in Suite 225, 3385 Harvester Road, Burlington, Ontario, L7N 3N2. The registered office is located at Suite 1700, 666 Burrard Street, Vancouver, BC, Canada V6C 2X8. The Company develops, markets and sells access to cloud-based transaction platform to buy, sell, trade, finance and lease new and used vehicles, which includes real time appraisal services, market information and financing solutions. In February 2018, the Company completed the acquisition of Powerband Solutions Global Dealer Services Inc. (“PGDSI”), a private Ontario-based Company. In connection with the acquisition, the Company changed its name to Powerband Solutions Inc. For accounting purposes, the acquisition of PGDSI was treated as a reverse takeover acquisition as the shareholders of PGDSI acquired control of the consolidated entity.

These condensed interim consolidated financial statements (“financial statements”) have been prepared on the basis of accounting principles applicable to a going concern, which assumes that the Company will realize its assets and discharges its liabilities in the normal course of business. The Company incurred a loss of $6,878,471 (September 30, 2020 - $8,021,488), of which $1,012,932 (September 30, 2020 - $2,213,468) was attributed to the non-controlling interest during the nine months ended September 30, 2021, and as of that date, the Company had a deficit of $36,345,897 (December 31, 2020 - $23,257,282).

The continuity of the Company’s operations is dependent on raising future financings for working capital and obtaining profitable operations. Management believes that it will be able to secure the necessary financing through shareholders loans and the issuance of new equity or debt instruments. However, there is no assurance that the Company will be successful in these actions. There can be no assurance that adequate financing will be available or available at terms favorable to the Company. Should it be determined that the Company is no longer a going concern, adjustments which could be significant, could be required to the carrying value of the assets and liabilities. These financial statements do not reflect any adjustments to the carrying value of the assets or liabilities or any impact on the statements of loss and comprehensive loss, and statement of financial position classifications that would be necessary should the going concern assumption not be appropriate. These factors indicate the existence of material uncertainties that may cast significant doubt as to the Company’s ability to continue as a going concern.

These financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”), on a going concern basis, which presume the realization of assets and discharge of liabilities in the normal course of business for the foreseeable future. In assessing whether the going concern assumption is appropriate, management considers all available information about the future, which is at least, but not limited to, twelve months from the end of the reporting period.

As described in Note 27, subsequent to the period ended September 30, 2021, the Company received gross proceeds of $721,363 from exercise of stock options as warrants. The Company has a detailed business plan for 2021 which provides different options on capital expenditures depending on the level of funding available. The Company is currently implementing various strategies.

These unaudited condensed interim consolidated financial statements were approved by the Board of Directors for issuance on November 9, 2021.

2. BASIS OF PREPARATION

a) Statement of compliance

These condensed interim consolidated financial statements, including comparatives have been prepared in accordance with International Accounting Standard (“IAS”) 34, Interim Financial Reporting, as issued by the International Accounting Standards Board (“IASB”), incorporating interpretations issued by the IFRS Interpretations Committee (“IFRICs”).

POWERBAND SOLUTIONS INC. Notes to the Financial Statements (Unaudited - Expressed in Canadian dollars) For the three and nine months ended September 30, 2021 and 2020

2. BASIS OF PREPARATION - (continued)

a) Statement of compliance (continued)

These condensed interim consolidated financial statements include the accounts of the Company and its subsidiaries. This interim financial report does not include all of the information required of a full annual financial report and is intended to provide users with an update in relation to events and transactions that are significant to an understanding of the changes in financial position and performance of the Company since the end of the last annual reporting period. It is therefore recommended that this financial report be read in conjunction with the annual audited consolidated financial statements of the Company for the year ended December 31, 2020. However, this interim financial report provides selected significant disclosures that are required in the annual audited consolidated financial statements under IFRS.

Except as described below, these condensed interim consolidated financial statements follow the same accounting policies and methods of application as the annual audited consolidated financial statements for the year ended December 31, 2020.

The changes in accounting policies are also expected to be reflected in the Company’s consolidated financial statements as at and for the year ending December 31, 2021.

Certain amounts in prior years have been reclassified to conform to the current period presentation.

3. SIGNIFICANT ACCOUNTING POLICIES

These condensed interim consolidated financial statements do not include all note disclosures required by IFRS for annual financial statements and, therefore, should be read in conjunction with the annual financial statements for the year ended December 31, 2020. In the opinion of management, all adjustments considered necessary for fair presentation of the Company’s financial position, results of operations and cash flows have been included. Operating results for the nine months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021.

New Accounting Standards and recent pronouncements

The standards listed below include only those which the Company reasonably expects may be applicable to the Company in the current period and at a future date.

Property, plant and equipment (Amendments to IAS 16)

IAS 16, Property, plant and equipment has been revised to incorporate amendments issued by the IASB in May 2020. The amendments prohibit an entity from deducting from the cost of property, plant and equipment the proceeds from selling items produced before the asset is available for use. Instead, an entity will recognize such sales proceeds and related cost in profit or loss. The amendments are effective for annual reporting periods beginning on or after January 1, 2022. Earlier application is permitted.

Classification of Liabilities as Current or Non-current (Amendments to IAS 1)

IAS 1 Presentation of Financial Statements has been revised to incorporate amendments issued by the IASB in January 2020. The amendments clarify the criterion for classifying a liability as non-current relating to the right to defer settlement of the liability for at least 12 months after the reporting period. The amendments are effective for annual reporting periods beginning on or after January 1, 2022. Earlier application is permitted.

POWERBAND SOLUTIONS INC. Notes to the Financial Statements (Unaudited - Expressed in Canadian dollars) For the three and nine months ended September 30, 2021 and 2020

4. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS

The preparation of these condensed interim 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 financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates. These condensed interim consolidated financial statements include estimates which, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the 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. These 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.

The following are key assumptions concerning the future and other key sources of estimation uncertainty that have a significant risk of resulting in a material adjustment to the carrying amount of assets and liabilities:

Going concern evaluation

Significant judgments used in the preparation of these financial statements relate to the assessment of the Company’s ability to continue as a going concern. Management has applied judgments in the assessment of the Company’s ability to continue as a going concern when preparing its financial statements. Management prepares the financial statements on a going concern basis unless management either intends to liquidate the entity or has no realistic alternative but to do so. In assessing whether the going concern assumption is appropriate, management takes into account all available information about the future, which is at least, but is not limited to, twelve months from the end of the reporting period. As a result of the assessment, management concluded the going concern basis of accounting is appropriate.

Share-based payment

The Company provides incentives via share-based payment entitlements (Note 20). The fair value of entitlements is determined in accordance with the accounting policy. If certain assumptions used in the fair value calculation were to change, there would be an impact on the share-based payment expenses recognized in the current period.

Estimated useful lives

Management estimates the useful lives of property, plant and equipment, and intangible assets based on the period during which the assets are available for use. The amounts and timing of depreciation and amortization for these amounts are affected by the useful lives. The estimates are reviewed annually and are adjusted as new information becomes available.

Impairment of long-lived assets

The Company considers both internal and external sources of information in assessing its tangible and intangible assets for impairment when events or circumstances indicate such. The Company determines the recoverable amount, which is the greater of its value in use and its fair value less costs to sell, using discounted cash flows expected to be derived from the tangible or intangible asset, and the appropriate discount rate. During the years ended December 31, 2020 and December 31, 2019, the Company’s intangible assets were determined to not be impaired.

Impairment of goodwill

The Company performs an assessment of its goodwill for impairment on an annual basis. The Company determines the recoverable amount, which is the greater of its value in use and its fair value less costs of disposal, using discounted cash flows expected to be derived from the Company’s operations and the appropriate discount rate. The projected cash flows are significantly affected by changes in assumptions about expected revenues from contracts, estimated costs of production, and the discount rate. During the years ended December 31, 2020 and December 31, 2019, the Company’s goodwill was determined to not be impaired.

POWERBAND SOLUTIONS INC. Notes to the Financial Statements (Unaudited - Expressed in Canadian dollars) For the three and nine months ended September 30, 2021 and 2020

4. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS (continued)

Allocation of purchase consideration

Business combinations require judgment and estimates to be made at the date of acquisition in relation to determining asset and liabilities fair values and the allocation of the purchase consideration over the fair value of the assets and liabilities and the determination of a bargain purchase gain on acquisition, if any. The information necessary to measure the fair values as at the acquisition date of assets acquired and liabilities assumed requires management to make certain judgments and estimates about future events, including but not limited to estimates of future earnings, future operating costs and capital expenditures, and discount rates. Changes to the provisional measurements of assets and liabilities acquired may be retrospectively adjusted when new information is obtained until the final measurements are determined .

Leases

Critical judgments in determining the lease term

Extension and termination options are included in a number of property leases held by the Company. In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not exercise a termination option. Extension options (or periods after termination options) are only included in the lease term if the lease is reasonably certain to be extended (or not terminated). Potential future cash outflows have not been included in the lease liability if it is not reasonably certain that the leases will be extended. The assessment is reviewed if a significant event or a significant change in circumstances occurs that affects this assessment and that is within the control of the lessee.

Convertible debentures

Convertible debentures are financial instruments accounted for in two separate components, a debt instrument and equity instrument or a derivative liability. The identification of the respective components is based on interpretations of the substance of the contractual arrangement and thus requires judgment from management. The separation of the components affects the initial recognition of the convertible debenture at issuance and the subsequent recognition of interest on the debt component. The determination of the fair value of the debt component is based on a number of assumptions, including contractual future cash flows, discount rates and the presence of any derivative financial instruments.

Provision for expected credit losses (“ECL”)

The Company performs impairment testing annually for accounts receivable in accordance with IFRS 9. The ECL model requires considerable judgment, including consideration of how changes in economic factors affect ECLs, which are determined on a probability-weighted basis. IFRS 9 outlines a three-stage approach to recognizing ECLs which is intended to reflect the increase in credit risks of a financial instrument based on 1) 12-month expected credit losses or 2) lifetime expected credit losses. The Company measures provision for ECLs at an amount equal to lifetime ECLs.

The Company applies the simplified approach to determine ECLs on trade receivables by using a provision matrix based on historical credit loss experiences. The historical results were used to calculate the run rates of default which were then applied over the expected life of the trade receivables, adjusted for forward looking estimates.

POWERBAND SOLUTIONS INC. Notes to the Financial Statements (Unaudited - Expressed in Canadian dollars) For the three and nine months ended September 30, 2021 and 2020

4. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS (continued)

Interest in other entities

On December 31, 2020, and on June 30, 2021, the Company had 39.31% interest in IntellaCar Solutions LLC. The Company’s interest increased to 60% as of September 30, 2021, as a result of internal restructuring. Management assessed the involvement of the Company in accordance with IFRS 10, Consolidated Financial Statements and has concluded that control was acquired on the acquisition of IntellaCar Solutions LLC by a controlled entity of the Company. Subsequent disposition of interest in the controlled entity reduced the Company’s interest to 39.31%. In making its judgments, that the Company controls IntellaCar Solutions LLC, management considered the following:

a) The Company’s controlling shareholders also held a significant interest in this entity. The Company considers its controlling shareholders to be a “de facto agent” on the basis that the shareholder is a related party and is reliant on PowerBand for making strategic and operational decisions that impact the relevant activities of the entity and for providing operating capital. Consequently, the Company has combined the shareholdings of its controlling shareholder with its direct shareholdings in this entity when assessing control;
b) The combined shareholding of the Company and its controlling shareholders is significant, and the shares held by other non-related shareholders is dispersed amongst a large number of shareholders meaning it is unlikely that other shareholders could outvote the Company; and
c) The Company has common management with the entity and the minority owners of Intellacar Solutions LLC are also shareholders in the Company.
d) The Company’s interest reduced as a result of disposition of interest in the Controlling entity to arm’s length third party who are existing shareholders in other entities within the combined group.

5. BUSINESS COMBINATION AND ACQUISITIONS

Acquisitions in 2019 and 2021

On July 17, 2019, the Company executed a Unit Purchase Agreement (the “Agreement”) to acquire 60% of Drivrz Holdings, LLC (formerly MUSA Holdings, LLC), and its subsidiaries, including Drivrz Financial, LLC (formerly MUSA Auto Finance, LLC) (“DRIVRZ”). DRIVRZ is a new and used online vehicle leasing platform to operate in the United States.

Under the terms of the Agreement, the Company’s aggregate consideration was USD$300,000 in cash, and 4,300,000 shares of the Company’s stock. At closing, the Company issued 2,500,000 common shares of Powerband Solutions Inc. The Company subsequently issued 900,000 common shares of Powerband Solutions Inc. to DRIVRZ on the first anniversary closing date of the transaction, and an additional 900,000 common shares of Powerband Solutions Inc. on the second anniversary of the closing date, for a total of 4,300,000 common shares.

The Company has determined that this transaction represented a business combination with Powerband Solutions Inc. as the acquirer.

The total consideration as of July 17, 2019, has been estimated to be $753,274 CAD ($577,090 USD). The Company began consolidating the operating results, cash flows and net assets of DRIVRZ from July 17, 2019 onwards.

The following table summarizes the consideration paid as part of the purchase price:

The followingtable summarizes the considerationpaid aspart of thepurchaseprice:	The followingtable summarizes the considerationpaid aspart of thepurchaseprice:	The followingtable summarizes the considerationpaid aspart of thepurchaseprice:	The followingtable summarizes the considerationpaid aspart of thepurchaseprice:
Consideration Shares issued Consideration USD Consideration CAD
Cash	-	$ 300,000	$ 391,590
Issued on July 17, 2019	2,500,000	181,951	237,500
Issued on July 17, 2020	900,000	49,222	64,249
Issued on July17,2021	900,000	45,917	59,935
Total consideration $ 577,090 $ 753,274

POWERBAND SOLUTIONS INC. Notes to the Financial Statements (Unaudited - Expressed in Canadian dollars) For the three and nine months ended September 30, 2021 and 2020

5. BUSINESS COMBINATION AND ACQUISITIONS (continued)

(i) Of the 2,500,000 common shares, 2,500,000 have a hold period expiry date of December 1, 2019 and are subject to a restriction as per the Agreement.
(ii) Common shares issued on July 17, 2020 and July 17, 2021 were valued using the Black-Scholes pricing model, as at the acquisition date, using the following assumptions:

Inputs	July 17, 2020	July 17, 2021
Share price	0.095	0.095
Exercise price	0.095	0.095
Volatility	126.81%	126.81%
Risk free	1.11%	1.11%
Dividend yield	0%	0%

The following table summarizes the allocation of the purchase price of the identifiable assets and liabilities based on their estimated fair values as at the date of acquisition:

Description Amount$CAD	Description Amount$CAD
Totalpurchase consideration of DRIVRZ	$753,274

Net working capital assumed	(449,125)
Lease receivable	289,450
Property and equipment	357,161
Right of use asset	4,696,888
Deposits	147,894
Intangibles–Intellectual property	989,357
Goodwill	172,593
Lease liability	(4,696,888)
Deferred income tax liability	(251,871)
Non-controllinginterest	(502,185)
Total net assets acquired $ 753,274

Goodwill is attributable to DRIVRZ that has experience in online vehicle leasing platform, operations, customer development and additions of deferred tax liability pertaining to increase in value of intangible asset from recording it at fair value.

Deferred income tax liability is computed at the fair value of the intangible asset acquired with the applicable tax rate of 25.5% of $989,357.

Since the acquisition date to December 31, 2019, DRIVRZ has contributed $29,414 in revenues and $2,558,883 of the Company’s net loss.

On April 28, 2021, the Company executed the Agreement to acquire additional 40% of DRIVRZ for consideration of USD$5,500,000 in cash. At closing USD$1,000,000 was paid and the balance is payable in installments by October 1, 2023. As of September 30, 2021 an of USD$3,500,000 payable is reported as current portion of $2,548,000 and longterm portion of $1,911,350. The fair value of consideration paid including any difference in the amount of non-controlling interest is recognized in the Statement of shareholders equity, attributed to the parent, as acquisition of equity interest in subsidiary.

POWERBAND SOLUTIONS INC. Notes to the Financial Statements (Unaudited - Expressed in Canadian dollars) For the three and nine months ended September 30, 2021 and 2020

5. BUSINESS COMBINATION AND ACQUISITIONS (continued)

Acquisitions in 2020

On October 28, 2020, the Company through its subsidiary DRIVRZ US LLC executed a Unit Purchase Agreement (the “Agreement”) to acquire 60% of IntellaCar Solutions LLC (“INTELLACAR”). INTELLACAR has an online user-friendly platform that has an extensive video and brochure library of vehicles, enabling automotive dealers and consumers to review the model of the vehicle they are buying.

Under the terms of the Agreement, the Company’s aggregate consideration was USD$1,500,000 in cash, and 2,000,000 shares of the Company’s stock. At closing, the Company paid cash of USD$500,000 and issued 2,000,000 common shares of Powerband Solutions Inc. The Company issued a promissory note for USD$1,000,000 for the balance of the cash consideration.

The following table summarizes the consideration paid as part of the purchase price:

The followingtable summarizes the considerationpaid aspart of thepurchaseprice:	The followingtable summarizes the considerationpaid aspart of thepurchaseprice:	The followingtable summarizes the considerationpaid aspart of thepurchaseprice:	The followingtable summarizes the considerationpaid aspart of thepurchaseprice:
Consideration Shares issued Consideration USD Consideration CAD
Cash	-	$ 500,000	$ 665,100
Issued on Oct 28, 2020	2,000,000	383,401	510,000
Fair value of promissory notes		968,849	1,288,763
Total consideration $ 1,852,250 $ 2,463,863

The common shares were valued based on the market price on October 28, 2020.

The following table summarizes the allocation of the purchase price of the identifiable assets and liabilities based on their estimated fair values as at the date of acquisition:

Description Amount$CAD	Description Amount$CAD
Totalpurchase consideration	$2,463,863

Net working capital assumed	(14,478)
Intangibles–Intellectual property	361,814
Intangibles–Tradename	850,397
Intangibles–Customer base	25,274
Intangibles-Other	297,832
Goodwill	2,602,500
Deferred income tax liability	(322,417)
Non-controllinginterest	(1,337,059)
Total net assets acquired $ 2,463,863

Since the acquisition date to December 31, 2020, INTELLACAR has contributed $115,100 in revenues and $155,700 of the Company’s net loss.

Goodwill has been provided in the transaction based on estimates of future earnings of INTELLACAR, including synergies associated with the positioning of the combined company. The additions of deferred tax liability pertaining to increase in value of intangible asset from recording it at fair value is computed at the applicable tax rate of 21%.

POWERBAND SOLUTIONS INC. Notes to the Financial Statements (Unaudited - Expressed in Canadian dollars) For the three and nine months ended September 30, 2021 and 2020

6. INTEREST IN JOINT VENTURE

In November 2018 the Company executed a Definitive Agreement to establish a partnership named D2D Automotive Auction (“D2DAA”) through the formation of a new United States based limited liability corporation, owned equally by the Company and Bryan Hunt. D2DAA will operate an automotive online remarketing auction network in the U.S. that will involve direct consumer to dealer, as well as dealer to dealer, auction transactions. D2DAA is registered and based in Arkansas, United States.

The Company owns 50% of the voting shares and 50% of the net assets of D2DAA. During the year ended December 31, 2020 D2DAA incurred losses of $1,704,809 (December 31, 2019 - $1,514,546). The Company recognized losses up to the amount of investment balance of $287,665 (2019 - 50% or $757,273) and had foreign exchange losses of $19,442 (December 31, 2019 - $45,029) resulting in an Interest in Joint Venture in Canadian dollar equivalent of $nil at December 31, 2020 (December 31, 2019 - $268,224). Since the Company’s share of losses in the joint venture exceeds the interest in that joint venture, the Company has discontinued recognizing any further share in the losses.

At September 30, 2021, D2DAA accounted for 6% of the Company’s revenue and 47% of the Company’s account receivable.

7. CASH

Cash consists of funds held in Canadian and American financial institutions broken down as follows:

Cash at Canadian bank on hand Cash at American bank on hand Total		September 30, 2021 $6,022,133 3,214,640*	December 31, 2020 $ 99,300 1,303,913*
		$9,236,773	$1,403,213

*Includes restricted cash of $313,638 (December 31, 2020 - $260,383) based on terms of the agreement with financial institutions.

8. ACCOUNTS RECEIVABLE

ACCOUNTS RECEIVABLE	ACCOUNTS RECEIVABLE	ACCOUNTS RECEIVABLE
September 30, 2021 December 31, 2020
Accounts receivable	$ 2,535,433	$ 1,674,410
Less: Expected credit loss	(376,985)	(376,985)
2,158,448 1,297,425

9. INVENTORY

Vehicle inventories are recorded at the lower of cost and net realizable value with cost determined on a specific item basis. In determining net realizable value for vehicles, the Company considers recent market data and trends such as loss histories along with the current age of the inventory.

During the nine months ended September 30, 2021, $165,773 (September 30, 2020 - $260,864) of vehicles were included in Cost of Goods Sold.

POWERBAND SOLUTIONS INC. Notes to the Financial Statements (Unaudited - Expressed in Canadian dollars) For the three and nine months ended September 30, 2021 and 2020

10. DEPOSITS

In July 2020, the Company’s Canadian subsidiary, DRIVRZ Financial Inc., entered into a Share Purchase Agreement to acquire 100% of the outstanding shares of a southwestern Ontario-based automotive service center for $450,000. A deposit of $450,000 was being held in trust pending the closing of the transaction. The automotive service center holds a license to operate a used vehicle operation in the Province of Ontario. The license has been transferred to DRIVRZ Financial Inc. and the entire purchase price of $450,000 has been transferred to intangible assets and amortized on a straight-line basis over five years.

11. INVESTMENT

On July 18, 2018 the Company signed a Letter of Intent with Zoom Blockchain Solutions Inc. to establish a disruptive automotive-related blockchain and application technologies solution. The joint venture will develop a blockchain powered mobile application to buy and sell cars. As part of the transaction a deposit of US$200,000 ($254,820 CAD) was made by the Company. The Company is involved with ongoing discussions with Zoom Blockchain Solutions Inc. to formalize an agreement for the joint venture. On May 13, 2021, the deposit was exchanged for 10% secured convertible notes payable in Rego Payment Architectures Inc., a Delaware corporation with maturity date of October 31, 2022. The amount of interest accrued as of September 30, 2021 is $9,804.

On November 27, 2020, the Company entered into a share purchase agreement with CB Auto Group Inc. a Georgia, USA corporation to acquire 15% interest for a cash consideration of US$5 million to be paid in installments over a period ending June 30, 2021 and the issuance of 750,000 share purchase warrants having an exercise price of $0.30 for a period of 3 years. On July 16, 2021, a third amendment to the Share purchase agreement was executed, that will reduce the aggregate amount that the Company will pay for the shares in CB Auto Group to US$2,500,000 and will reduce the aggregate number of shares that CB Auto Group will issue to the Company to 810,811 shares which represent 7.5% of the total issued and outstanding shares of CB Auto Group as of the amendment effective date.

As of September 30, 2021, the Company has made total payments of US$2,500,000 ($3,185,250 CAD) (December 31, 2020 - US$500,000 ($636,600 CAD)) and has issued 750,000 share purchase warrants.

12. PROPERTY AND EQUIPMENT

	Furniture fixtures and equipment	Computer equipment	Leasehold improvements Software	Leasehold improvements Software	Total
Cost Balance at December 31, 2019	$ 339,064	$ 7,147	$ 8,509	$ -	$ 354,720
Additions Currency translationadjustment	-	6,218 (322)	-	254,338 (12,490)	260,556 (12,812)
Balance at December 31, 2020	339,064	13,043	8,509	241,848	602,464
Additions Currency translationadjustment	- (2,466)	53,211 384	- (107)	- 600	53,211 (1,589)
Balance at September 30,2021	336,598	66,637	8,402	242,448	654,086
Accumulated amortization Balance at December 31, 2019	40,140	5,347	545	-	46,032
Amortization	84,086	2,724	1,136	42,393	130,339
Balance at December 31, 2020	124,226	8,071	1,681	42,393	176,371
Amortization	58,775	4,311	794	59,260	123,140
Balance at September 30,2021	183,001	12,382	2,475	101,653	299,511
Net book value Balance at December 31, 2020 Balance at September 30,2021	214,838 153,597	4,971 54,255	6,828 5,927	199,456 140,796	426,093 354,575

POWERBAND SOLUTIONS INC. Notes to the Financial Statements (Unaudited - Expressed in Canadian dollars) For the three and nine months ended September 30, 2021 and 2020

13. INTANGIBLE ASSETS

During the year ended December 31, 2016, the Company acquired a web platform for cash of $1,391,532. During the year ended December 31, 2020 an additional $174,857 of internal and external development costs related to the asset were capitalized. The web platform is used by the Company to develop its future software applications and to sell various services. Under the current amortization policy, the web platform and associated development additions are amortized on a straight-line basis over five years.

On August 31, 2018, the Company acquired 100% of the outstanding shares of 1070879 B.C. Ltd., operating as LeadSource Canada. Based in Kelowna, British Columbia, LeadSource is a next generation automotive private sale event marketing Company. As consideration for the transaction Powerband Solutions paid LeadSource a cash purchase price of $60,000 for 100% of the outstanding shares. As there were no identifiable assets in 1070879 B.C. Ltd., at the time of closing, the entire purchase price has been allocated to Intangible Assets, classified as Customer base, and is being amortized on a straight-line basis over five years.

On July 17, 2019, the Company acquired 60% of Drivrz Holdings, LLC (formerly MUSA Holdings, LLC), and its subsidiaries (“DRIVRZ”). DRIVRZ is a leading new and used vehicle platform, with licenses to operate in several States in the U.S. Intellectual property identified from the transaction has been capitlized. See Note 5.

On October 28, 2020, the Company through its subsidiary DRIVRZ US LLC acquired 60% of IntellaCar Solutions LLC and the intangible assets identified from the transaction has been capitalized. See Note 5.

On December 21, 2020, the Company acquired a Software containing a codebase for a customer retailing interface that can be accessed from an automobile dealership’s website that allows for the storage of dealer inventory and various development tooling for USD$200,000 ($254,640 CAD). This is amortized on a straight-line basis over five years from the date the Software is in use.

The following table summarizes the movements in Intangible Assets:

The following table summarizes the movements in Intangible Assets:	The following table summarizes the movements in Intangible Assets:	The following table summarizes the movements in Intangible Assets:	The following table summarizes the movements in Intangible Assets:	The following table summarizes the movements in Intangible Assets:	The following table summarizes the movements in Intangible Assets:	The following table summarizes the movements in Intangible Assets:
Web platform Customer base Intellectual property Trademarks Other Development cost							Total
Cost Balance at December 31, 2019	$ 1,981,737	$ 60,000	$ 986,142	$ -	$ -	$ -	$ 3,027,879
Additions Additions from business acquistion (note 5) Disposals Currency translationadjustment	174,857 - -	- 25,274 - -	254,640 361,814 - (36,620)	- 850,397 - (36,440)	- 297,832 - (12,763)	- - - -	429,497 1,535,317 - (85,823)
Balance at December 31, 2020 Additions Disposals	2,156,594 - -	85,274 - -	1,565,976 - -	813,957 - -	285,069 450,000 -	- 482,321 -	4,906,870 932,321 -
Currency translationadjustment	-	(1,066)	(10,068)	575	201	8,789	(1,569)
Balance at September 30,2021	2,156,594	84,208	1,555,908	814,532	735,270	491,110	5,837,622
Accumulated amortization Balance at December 31, 2019	1,281,089	16,000	98,443	-	-	-	1,395,532
Amortization Currency translationadjustment	407,948 -	12,806 -	217,750 (16,581)	27,132 -	9,502 -	- -	675,138 (16,581)
Balance at December 31, 2020	1,689,037	28,806	299,612	27,132	9,502	-	2,054,089
Amortization Currency translationadjustment	160,950 -	12,566 -	230,857 (4,263)	119,993 -	64,525 -	- -	588,891 (4,263)
Balance at September 30,2021	1,849,987	41,372	526,206	147,125	74,027	-	2,638,717
Net book value Balance at December 31, 2020 Balance at September 30,2021	467,557 306,607	56,468 42,836	1,266,364 1,029,702	786,825 667,407	275,567 661,243	- 491,110	2,852,781 3,198,905

POWERBAND SOLUTIONS INC. Notes to the Financial Statements (Unaudited - Expressed in Canadian dollars) For the three and nine months ended September 30, 2021 and 2020

13. INTANGIBLE ASSETS (continued)

Goodwill

Goodwill of $172,593 (US$133,183) arose in 2019, when the Company acquired DRIVRZ and $2,490,980 (US$1,956,472) in 2020 from acquisition of IntellaCar Solutions. (see note 5) For impairment testing purposes, the goodwill is allocated to the respective cash-generating unit (“CGU”). The Company assessed goodwill for impairment based on its value in use. To determine value in use, the Company used the 2021 budget and 2022 to 2025 forecasts for the CGU’s, an estimated long-term revenue and variable cost growth and taking into account the working capital and capital investments to maintain the condition of the assets. The resulting forecasted cash flows were discounted using pretax rates of 9% to 16% which reflects the time value of money and risk associated with the business. Based on this assessment, the goodwill attributed to each CGU was not impaired at September 30, 2021.

Balance at December 31,2019	$ 172,593
Goodwill on acquisition of INTELLACAR Currencytranslation adjustment	2,490,980 (3,024)
Balance at December 31, 2020 Currencytranslation adjustment	2,660,549 1,880
Balance at September 30, 2021	2,662,429

14. RIGHT OF USE ASSETS

Canada USA	Canada USA	Canada USA	Total
Cost Balance as at December 31, 2019	$ 355,380	$ 4,678,322	$ 5,033,702
Currency translationadjustment	-	(96,940)	(96,940)
Balance as at December 31, 2020	355,380	4,581,382	4,936,762
Additions Currency translationadjustment	23,162 -	- (30,129)	23,162 (30,129)
Balance as at September 30,2021	378,542	4,551,253	4,929,795
Accumulated amortization Balance as at December 31, 2019 Amortization Currency translationadjustment	(78,974) (78,974) -	(282,051) (626,850) 42,709	(361,025) (705,824) 42,709
Balance as at December 31, 2020	(157,948)	(866,192)	(1,024,140)
Amortization Currency translationadjustment	(62,124) -	(438,154) 24,770	(500,278) 24,770
Balance as at September30,2021	(220,072)	(1,279,576)	(1,499,648)
Net carrying amount At December 31, 2020 At September 30,2021	197,432 158,470	3,715,190 3,271,677	3,912,622 3,430,147

The Company leases property for its office in Canada and USA, which has been capitalized as a right-of-use asset under IFRS 16. See Note 17 for associated lease liability. In 2021 a leased vehicle was capitalized as a right-of-use asset.

POWERBAND SOLUTIONS INC. Notes to the Financial Statements (Unaudited - Expressed in Canadian dollars) For the three and nine months ended September 30, 2021 and 2020

15. ACCOUNTS PAYABLES AND ACCRUED LIABILITIES

September 30, 2021 December 31, 2020	September 30, 2021 December 31, 2020	September 30, 2021 December 31, 2020
Trade payables	$ 2,044,250	$ 1,531,289
Accrued liabilities	1,177,967	1,640,439
3,222,217 3,171,728

16. SHORT TERM LOAN

On December 11, 2019, the Company entered into a loan agreement (the “Loan”) with an arm’s length third party to borrow $100,000 at a rate of 9% per annum, calculated monthly, and to mature in two months. This loan was paid in full in 2020.

On January 14, 2020, the Company entered into a loan agreement (the “Loan”) with a non-arm’s length third party to borrow $350,000 at a rate of 8% per annum, calculated monthly, and to mature in three months. This loan was paid in full in 2020.

On December 21, 2020, the Company’s subsidiary IntellaCar Solutions Inc. entered into a promissory note agreement with an arm’s length third party to borrow US$200,000 ($254,640 CAD), interest free, and payable in full on or before February 28, 2021. This was paid in full in January 2021.

17. LEASES

IFRS 16 Leases sets out the principles for recognition, measurement, presentation, and disclosure of leases. It eliminates the classification of leases as either operating or finance leases required by IAS 17 and introduces a single lessee accounting model.

The Company leases its office space in Canada, and the office space in USA. On adoption of IFRS 16, the Company recognized lease liabilities. The term of the Canadian leases is for 5 years with an option to renew, and the USA lease has a term of 9 years with an option to renew.

Leases are recognized as a right-to-use asset with a corresponding liability at the date at which the leased asset is available for use. Each lease payment is allocated between the liability and the finance cost. The finance cost is charged to the consolidated statements of loss over the lease period to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The right-of-use asset is amortized over the shorter of the asset’s useful life and the lease term on a straight-line basis.

Lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, the Company’s incremental borrowing rate is used, being the rate that the Company would have to pay to borrow the funds necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions.

The liability pertaining to the lease of the facilities was measured at the present value of the remaining lease payments, discounted using the Company’s incremental borrowing rate of 15% for Canadian leases 5.75% for USA leases and. the associated right-of-use asset was measured at the value of the lease liability plus the estimated cost of restoring the facility.

In 2021 the Company leased a vehicle for a term of 2 years and the liability is discounted using an incremental borrowing rate of 5% and the associated right-of-use asset was measured at the value of lease liability.

POWERBAND SOLUTIONS INC. Notes to the Financial Statements (Unaudited - Expressed in Canadian dollars) For the three and nine months ended September 30, 2021 and 2020

17. LEASES (continued)

Company’s lease liability for the facilities is as follows:

Company’sleaseliabilityforthefacilitiesis asfollows:	Company’sleaseliabilityforthefacilitiesis asfollows:	Company’sleaseliabilityforthefacilitiesis asfollows:
Canada USA			Total
Balance as at December 31, 2019	$ 294,358	$ 4,613,409	$ 4,907,767
Repayment of lease liability Accretion expense Currencytranslation adjustment	(106,969) 37,072 -	(751,309) 258,864 (65,484)	(858,278) 295,936 (65,484)
Balance as at December 31, 2020	224,461	4,055,480	4,279,941
Additions Repayment of lease liability Accretion expense Currencytranslation adjustment	23,160 (84,269) 21,125 -	- (537,729) 162,355 (3,979)	23,160 (621,998) 183,480 (3,979)
Balance as at September 30, 2021	184,477	3,676,127	3,860,604
Current portion Balance as at December 31, 2020 Balance as at September 30, 2021	80,503 100,811	516,314 551,083	596,817 651,894
Long-term portion Balance as at December 31, 2020 Balance as at September 30, 2021	143,958 83,666	3,539,166 3,125,044	3,683,124 3,208,710

18. CONVERTIBLE DEBENTURE

On November 4, 2019 the Company closed on unsecured convertible debentures in the principal amount of one million five hundred thousand dollars ($1,500,000) (the “Debenture”). The Debenture was advanced in two tranches, the first advance on October 22, 2019 in the amount of one million dollars ($1,000,000) and the second advance on October 30, 2019 in the amount of five hundred thousand dollars ($500,000). There were no fees paid to finders in connection with the private placement. The Debenture will mature on October 22, 2020 and bear interest at a rate of 9% per annum. The principal amount of the Debenture is convertible into common shares of the Company (“Common Shares”) at the option of the holder. The conversion price on the first advance of $1,000,000 is $0.065. The conversion price on the second advance of $500,000 is $0.085. At the election of the debenture holder, any accrued and unpaid interest may be converted into Common Shares at a conversion price equal to the Market Price (as such term is defined in the Polices of the TSXV) at the time of such conversion.

Undiscounted balance as at October 22,2019 Less: effect of discounting using the incremental borrowing rate as at the date of initial application at 20%. Discounted balance as at October 22, 2019 Accretion expense Balance as at December 31, 2019 Accretion expense Balance converted to equity in 2020	$1,500,000 (137,500)
	1,362,500 25,291
	$1,387,791
	112,209
	$1,500,000

POWERBAND SOLUTIONS INC. Notes to the Financial Statements (Unaudited - Expressed in Canadian dollars) For the three and nine months ended September 30, 2021 and 2020

18. CONVERTIBLE DEBENTURE (continued)

During the year 2020 PowerBand Solutions US Inc., a U.S. based subsidiary of the Company entered into a nonbrokered private placement of unsecured convertible debentures (the “Debentures”) in the aggregate principal amount of USD $10 million with each Debenture having a face value of USD $10,000. The Debentures were closed in tranches, mature on March 6, 2023 and bear interest at a rate of 9% per annum, payable monthly in cash. PowerBand US can prepay, on 30 days advance notice, all or any part of the principal and accrued but unpaid interest, at no penalty.

The Debenture holders, at any time during the term, shall have the option to exchange any number of its Debentures into (i) Common Shares of PowerBand US, and (ii) Common Shares of PowerBand’s Canadian leasing division, on the basis of one Debenture for each of one Common Share of PowerBand US and one Common Share of PowerBand’s Canadian leasing division. Assuming the conversion of all of the Debentures the holders would own 9% interest in PowerBand US and a 9% interest in PowerBand’s Canadian leasing division.

In connection with the private placement, the Company issued 2,500,000 share purchase warrants, with a fair value of $180,546, entitling it to acquire common shares of the Company at an exercise price of $0.30 for a period of 24 months. The warrants were valued using the Black-Scholes option pricing model using the following assumptions:

Share price at grant date: $0.15

Risk free interest rate: 0.72%

Expected life of warrants: 2 years

Expected annualized volatility: 123%

Expected dividend yield: - Black-Scholes value of each warrant: $0.07

On June 19, 2020, the Debentures were amended and restated from USD $10 million to USD $6 million converting into the same subsidiary interests described above. On June 24, 2020, the Debentures were converted by the holders into a 9% interest in PowerBand US and a 9% interest in PowerBand’s Canadian leasing division. The fair value of the consideration received net of the cost that is directly attributed to it is recognized in the Statement of shareholders equity as disposition of equity interest in subsidiary.

equity as disposition of equity interest in subsidiary.	equity as disposition of equity interest in subsidiary.	equity as disposition of equity interest in subsidiary.
September 30, 2021 December 31, 2020
Balance at beginningof theyear	$ -	$ -
Issued duringtheyear	-	8,093,200
Financingcosts	-	(180,546)
Foreign exchange movement	-	44,400
Conversion of Debentures	-	(7,957,054)
Balance at end of theperiod - -

On December 14, 2020, the Company received $1,276,895 (US$1 million) as consideration for disposition of interest in the Company’s subsidiaries DRIVRZ US LLC and DRIVRZ Financial Inc. The fair value of the consideration received net of the cost that is directly attributed to it is recognized in the Statement of shareholders equity as disposition of equity interest in subsidiary.

POWERBAND SOLUTIONS INC. Notes to the Financial Statements (Unaudited - Expressed in Canadian dollars) For the three and nine months ended September 30, 2021 and 2020

19. GOVERNMENT STIMULUS SUBSIDIES

The Company has participated in available stimulus subsidies offered by the Federal Governments of Canada and the United States to help offset the negative impact of the COVID-19 pandemic.

Canada Emergency Wage Subsidy (“CEWS”)

The CEWS provides qualifying companies with a monthly financial support grant based on payroll, subject to certain caps. Eligibility is triggered by and scaled according to the reduction in year-over-year Canadian revenue on a monthby-month basis. The Company recognized government stimulus subsidy income as reductions of $35,600 to Salaries and wages expenses for the nine months ended September 30, 2021.

Canada Emergency Rent Subsidy (“CERS”)

The CERS provides qualifying companies with a monthly financial support grant based on eligible expenses, subject to certain caps. Eligibility is triggered by and scaled according to the reduction in year-over-year Canadian revenue on a month-by-month basis. The Company recognized government stimulus subsidy income as reductions of $5,246 to Rent expenses for the nine months ended September 30, 2021.

Canada Emergency Business Account (“CEBA”)

The Company received on April 22, 2020, an amount of $40,000 towards CEBA which is an interest-free loan to cover operating costs. The Company received an additional amount of $20,000 on June 28, 2021, and the total loan balance on September 30, 2021 was $60,000. Repaying the balance of the loan on or before December 31, 2022 will result in a loan forgiveness of $10,000.

United States Paycheck Protection Program (“PPP”)

On April 17, 2020, the Company’s subsidiary MUSA Holdings, LLC received a loan totaling US$458,400 ($576,438 CAD) under the U.S. Small Business Administration Paycheck Protection Program. Proceeds from this program have been used to assist U.S. small businesses during the COVID-19 pandemic to keep employees on the payroll and to contribute to utilities, rent and mortgage costs. The loan has a maturity of two years and an interest rate of 1% per annum, payable monthly, but only if the application for loan forgiveness is denied by the government. The loan will be fully forgiven if the funds are used for payroll and utilities costs if at least 60% of the forgiven amount is used for payroll and full-time equivalent employees remain on payroll during the eight week period following the receipt of the funds. Loan payments will also be deferred for six months. No collateral or personal guarantees are required. The Company has submitted the application for forgiveness and has received confirmation that it has complied with the relevant provisions of the program and the full amount of US$458,400 ($573,595 CAD) has been forgiven. This amount is reported as a reduction of Salaries and wages in the Statements of Loss.

20. SHARE CAPITAL AND RESERVES

(a) Authorized:

The Company is authorized to issue:

an unlimited number of Common Shares with no stated par value

In April 2018, the Company consolidated the Company’s issued share capital on a ratio of four (4) old common shares for each one (1) new post-consolidated common share (the “Share Consolidation”). All current and comparative references to the number of common shares, weighted average number of common shares, loss per share, stock options and warrants have been restated to give effect to this share consolidation, unless otherwise noted.

POWERBAND SOLUTIONS INC. Notes to the Financial Statements (Unaudited - Expressed in Canadian dollars) For the three and nine months ended September 30, 2021 and 2020

20. SHARE CAPITAL AND RESERVES (continued)

(b) Shares issued on Private Placements:

On December 20, 2019, the Company closed the first tranche of a $500,000 Private Placement. A total of 1,538,461 Units, at a price of $0.065 per Unit, have been issued for total gross proceeds to the Company of $100,000. Each Unit is comprised one (1) common share of the Company (“Common Share”) and one half of one (1/2) common share purchase warrant (each whole share purchase warrant, a “Warrant”) of the Company. Each Warrant shall entitle the holder to receive, for no additional consideration, one (1) Common Share, subject to adjustments, at an exercise price of $0.15 for a period of 24 months from the date of issuance.

The total of 769,280 warrants were issued as part of the $100,000 Private Placement on December 20, 2019.

On January 21, 2020, the Company closed on $400,000 of a Private Placement financing, representing the second tranche of a $500,000 Private Placement financing, the first tranche of $100,000 closed on December 20, 2019. In total 7,692,307 units were issued at a price of $0.065 per unit for total proceeds of $500,000.

The total of 3,076,924 warrants were issued as part of the $400,000 Private Placement financing.

On February 10, 2021, the Company closed on $5,300,000 of a Private Placement financing, representing 18,275,862 units at a price of $0.29 per unit. Each unit consists of one common share in the capital of the Company and one common share purchase warrant, and each warrant shall entitle the holder thereof to acquire one common share at an exercise of $0.49 per warrant share for a period of two years following the date of issuance. The share issuance costs amounted to $92,294.

On July 8, 2021 the Company closed a private placement offering for aggregate gross proceeds of $12,775,901. A total of 18,788,090 common shares of the Company were issued at a price of $0.68 per Offered Share, including the partial exercise of the Agents’ option for 1,140,990 Offered Shares. The Offering was carried out by Desjardins Capital Markets and Scotiabank acting as co-bookrunners and co-lead agents (collectively the “ Agents ”).

In connection with the Offering, the Agents received a cash commission equal to 6.0% of the gross proceeds raised, other than gross proceeds from sales of Offered Shares made to certain purchasers designated by the Company (the “ President’s List ”) for which the Agents received a cash commission equal to 4.0% of such gross proceeds; and compensation warrants (the “ Compensation Warrants ”) equal to 6.0% of the number of Offered Shares sold under the Offering, other than in respect of purchasers on the President’s List for which the Agents received Compensation Warrants equal to 4.0% of the number of Offered Shares sold to such purchasers. Each Compensation Warrant is exercisable at $0.68 per warrant share to acquire one common share of the Company for a period of 24 months following the date of their date of issuance, at the Offering Price. The warrants were valued using black scholes calculator with risk free interest rate of 0.48%, volatility of 115% and was valued at $617,399. The total share issuance costs for the private placement offering amounted to $1,504,071. The Offered Shares will be subject to a four-month and one day hold period under applicable securities laws in Canada .

(c) Shares for Debt and services:

On April 1, 2021, the Company settled an outstanding debt of $1,000,000 owed to the CEO of the Company and a significant shareholder of the Company through the issuance of 800,000 common shares of the Company, at a deemed price of $1.25 per Common Share.

POWERBAND SOLUTIONS INC. Notes to the Financial Statements (Unaudited - Expressed in Canadian dollars) For the three and nine months ended September 30, 2021 and 2020

20. SHARE CAPITAL AND RESERVES (continued)

(d) Shares issued for acquisitions

On July 17, 2019, the Company acquired 60% of the Units of Drivrz Holdings LLC (formerly MUSA Holdings, LLC). As part of the purchase price the Company issued 2,500,000 common shares on July 17, 2019, 900,000 common shares on July 20, 2020, and 900,000 common shares on July 20, 2021 to Drivrz Holdings LLC (formerly MUSA Holdings LLC.). See Note 5.

On October 28, 2020, the Company acquired 60% of the Units of IntellaCar Solutions LLC. As part of the purchase price the Company issued 2,000,000 common shares to IntellaCar Solutions LLC on October 28, 2020. See Note 5.

(e) Share Purchase Warrants

Share purchase warrant transactions are summarized as follows:

		September 30,		December 31,
		2021		2020
	Number of	Weighted	Number of	Weighted average
	share	average exercise	share purchase	exercise price ($)
	purchase	price ($)	warrants
	warrants
Balance, beginning of period	23,179,246	0.49	17,452,322	0.58
Warrants granted	20,427,287	0.49	6,001,924	0.22
Warrants exercised	(9,271,669)	(0.39)	(275,000)	(1.05)
Warrants expired	(15,225,801)	(0.60)	-	-
Balance, end of period	19,034,063	0.46	23,179,246	0.49

A summary of the Company’s share purchase warrants outstanding as at September 30, 2021 is presented below:

Number of share	Exercise Price ($)	Expiry Date
purchase warrants (#)
574,950	0.15	January20, 2022
2,500,000	0.30	March 6, 2022
14,125,946	0.49	February10, 2023
1,083,167	0.68	July8, 2023
750,000	0.30	July16, 2024

The weighted average remaining contractual life of the share purchase warrants is 1.29 years.

(f) Share-based compensation

(i) Stock option plan

The Company has adopted a stock option plan (the “Option Plan”) for directors, officers, employees, and consultants of the Company. At the Company’s Annual General Meeting held on June 15, 2021 the shareholders approved the 2021 Incentive Stock Option Plan (20% Fixed Plan), reserving for issuance up to 33,372,093 common shares of the Company.

POWERBAND SOLUTIONS INC. Notes to the Financial Statements (Unaudited - Expressed in Canadian dollars) For the three and nine months ended September 30, 2021 and 2020

20. SHARE CAPITAL AND RESERVES (continued)

(f) Share-based compensation (continued)

(i) Stock option plan (continued)

In July 2019, the Company granted 6,800,000 stock options to consultants, directors, officers, and employees of the Company which vest over a two-year period. The stock options were issued with an exercise price of $0.10 and an expiry date five years from the date of issuance. The fair value of share-based compensation in connection with this stock option grant was $ 488,737, to be recognized over the three-year vesting period. During the three and nine months period ended September 30, 2021, included in the share-based compensation is $nil (2020- $27,717) and $23,639 (2020 - $124,111), respectively related to the vested portion of these options.

In October 2019, the Company granted 500,000 stock options to consultants, directors, officers, and employees of the Company which vest over a two-year period. The stock options were issued with an exercise price of $0.10 and an expiry date five years from the date of issuance. The fair value of share-based compensation in connection with this stock option grant was $ 27,046 to be recognized over the two-year vesting period. During the three and nine months period ended September 30, 2021, included in the sharebased compensation is $851 (2020 - $3,688) and $3,811 (2020 - $14,868), respectively related to the vested portion of these options.

In October 2019, the Company granted 1,200,000 stock options to consultants, directors, officers, and employees of the Company which vest over a two-year period. The stock options were issued with an exercise price of $0.10 and an expiry date five years from the date of issuance. The fair value of share-based compensation in connection with this stock option grant was $ 64,907 to be recognized monthly over the one year vesting period. During the three and nine months period ended September 30, 2021, included in the share-based compensation is $nil (2020 - $3,806) and $nil (2020 - $32,493), respectively related to the vested portion of these options.

In December 2019, the Company granted 700,000 stock options to consultants which vest monthly over a one-year period. The stock options were issued with an exercise price of $0.15 and an expiry date five years from the date of issuance. The fair value of share-based compensation in connection with this stock option grant was $ 32,640 to be recognized over the over-year vesting period. During the three and nine months period ended September 30, 2021, included in the share-based compensation is $nil (2020 - $nil) and $nil (2020 - $15,741), respectively related to the vested portion of these options.

In February 2020, the Company granted 500,000 stock options to consultants, which vested immediately. The stock options were issued with an exercise price of $0.215 and an expiry date five years from the date of issuance. The fair value of share-based compensation in connection with this stock option grant was $73,384 to be recognized immediately, with $73,384 recognized for the nine months ended September 30, 2020.

In February 2020, the Company granted 400,000 stock options to consultants, which vested immediately. The stock options were issued with an exercise price of $0.16 and an expiry date five years from the date of issuance. The fair value of share-based compensation in connection with this stock option grant was $68,100 to be recognized immediately, with $68,100 recognized for the nine months period ended September 30, 2020.

In February 2020, the Company granted 300,000 stock options to consultants, which vested immediately. The stock options were issued with an exercise price of $0.21 and an expiry date five years from the date of issuance. The fair value of share-based compensation in connection with this stock option grant was $41,541 to be recognized immediately, with $41,541 recognized for the nine months period ended September 30, 2020.

In July 2020, the Company granted 1,800,000 stock options to consultants, which vested immediately. The stock options were issued with an exercise price of $0.225 and an expiry date five years from the date of issuance. The fair value of share-based compensation in connection with this stock option grant was $341,474 to be recognized immediately, with $341,474 recognized for the three months period ended September 30, 2020.

POWERBAND SOLUTIONS INC. Notes to the Financial Statements (Unaudited - Expressed in Canadian dollars) For the three and nine months ended September 30, 2021 and 2020

20. SHARE CAPITAL AND RESERVES (continued)

(f) Share-based compensation (continued)

(i) Stock option plan (continued)

In August 2020, the Company granted 1,500,000 stock options to employees, which vested immediately. The stock options were issued with an exercise price of $0.225 and an expiry date five years from the date of issuance. The fair value of share-based compensation in connection with this stock option grant was $271,046 to be recognized immediately, with $271,046 recognized for the three months period ended September 30, 2020.

In October 2020, the Company granted 250,000 stock options to consultants, which vested over a period of two years and 3,750,000 stock options to officers, employees and consultants which vest immediately. The stock options were issued with an exercise price of $0.220 and an expiry date five years from the date of issuance. The fair value of share-based compensation in connection with this stock option grant was $688,615, with $645,565 recognized for the three months period ended December 31, 2020. During the three and nine months period ended September 30, 2021, included in the share-based compensation is $5,870 (2020 - $nil) and $22,770 (2020 - $11,217), respectively related to the vested portion of these options. The Company recognized a gain of $179,504 from 500,000 stock options granted to consultants for settlement of fees payable to the consultants.

In November 2020, the Company granted 50,000 stock options to consultants, officers, and employees, which vested immediately and 250,000 which vest over a period one year. The stock options were issued with an exercise price of $0.21 and $0.26 respectively and an expiry date five years from the date of issuance. The fair value of share-based compensation in connection with this stock option grant was $62,239. During the three and nine months period ended September 30, 2021, included in the share-based compensation is $nil (2020 - $nil) and $22,093 (2020 - $nil), respectively related to the vested portion of these options.

In December 2020, the Company granted 475,000 stock options to employees, 350,000 vests immediately and 125,000 vests over a period of one year. The stock options were issued with an exercise price of $0.205 and $0.25, respectively and an expiry date five years from the date of issuance. The fair value of share-based compensation in connection with this stock option grant was $85,937. During the three and nine months period ended September 30, 2021, included in the share-based compensation is $3,139 (2020 - $nil) and $21,466 (2020 - $nil), respectively related to the vested portion of these options.

In January 2021, the Company granted 200,000 stock options to consultants, 68,000 vests immediately and 66,000 each vest over a period of one year and two year respectively. The stock options were issued with an exercise price of $0.29 and an expiry date five years from the date of issuance. The fair value of share-based compensation in connection with this stock option grant was $46,597. During the three and nine months period ended September 30, 2021, included in the share-based compensation is $5,761 (2020 - $nil) and $32,688 (2020 - $nil), respectively related to the vested portion of these options.

In April 2021, the Company granted 400,000 stock options to consultants, 200,000 vests on October 16, 2021 and 200,000 vests on April 16, 2022. The stock options were issued with an exercise price of $0.72 and an expiry date five years from the date of issuance. The fair value of share-based compensation in connection with this stock option grant was $232,170. During the three and nine months period ended September 30, 2021, included in the share-based compensation is $87,619 (2020 - $nil) and $159,048 (2020 - $nil), respectively related to the vested portion of these options.

POWERBAND SOLUTIONS INC. Notes to the Financial Statements (Unaudited - Expressed in Canadian dollars) For the three and nine months ended September 30, 2021 and 2020

20. SHARE CAPITAL AND RESERVES (continued)

(f) Share-based compensation (continued)

(i) Stock option plan (continued)

In June 2021, the Company granted 1,325,000 stock options to employees and consultants, 250,000 vests immediately, 300,000 vests on January 1, 2022 and January 1, 2023, respectively, 125,000 vests on June 30, 2022 and 350,000 vests on January 1, 2024. The stock options were issued with an exercise price of $0.76 and an expiry date five years from the date of issuance. The fair value of share-based compensation in connection with this stock option grant was $804,275. During the three and nine months period ended September 30, 2021, included in the share-based compensation is $153,475 (2020 - $nil) and $327,608 (2020 - $nil), respectively related to the vested portion of these options.

In July 2021, the Company granted 225,000 stock options to employees, all of which vests after one year on July 16, 2022. The stock options were issued with an exercise price of $0.76 and an expiry date five years from the date of issuance. The fair value of share-based compensation in connection with this stock option grant was $137,784. During the three and nine months period ended September 30, 2021, included in the share-based compensation is $28,689 (2020 - $nil) and $28,689 (2020 - $nil), respectively related to the vested portion of these options.

In determining the amount of share-based compensation, the Company used the Black-Scholes option pricing model to establish the fair value of options granted by applying the following:

Grant date share price Risk-free interest rate Expected life of options Expected annualized volatility Expected dividend yield Black-Scholes value of each option	2021 $0.29 - $0.79 0.39% - 0.97% 5 years 115% - $0.233 - $0.630	2020 $0.16 - $0.26 0.22% – 1.39% 5 years 115% - $0.13 - $0.21	2019 $0.06 - $0.09 1.25% – 1.58% 5 years 115% - $0.05 - $0.07

Information with respect to the Company’s stock options is presented below:

		September		December 31,
		30, 2021		2020
	Number of	Weighted	Number of	Weighted
	stock options	average	stock options	average
		exercise price		exercise price
		($)		($)
Balance, beginning of period	19,928,500	0.1740	11,278,500	0.1040
Options issued	2,150,000	0.7123	9,275,000	0.2200
Options exercised	(7,173,750)	0.1615	(225,000)	0.1000
Options cancelled/forfeited	(625,000)	0.1000	(400,000)	0.2250
Balance, end of period	14,279,750	0.2670	19,928,500	0.1740

POWERBAND SOLUTIONS INC. Notes to the Financial Statements (Unaudited - Expressed in Canadian dollars) For the three and nine months ended September 30, 2021 and 2020

20. SHARE CAPITAL AND RESERVES (continued)

(f) Share-based compensation (continued)

(i) Stock option plan (continued)

A summary of the Company’s stock options outstanding and exercisable as at September 30, 2021 is presented below:

	Options Outstanding	Options Outstanding	Options Outstanding	Options Exercisable	Options Exercisable
Expiry date	Number of options	Weighted average remaining contractual life	Weighted average exercise price	Number of options	Weighted average exercise price
years $ $ February 1, 2023 852,250 1.34 0.30 852,250 0.30 July 10, 2024 2,500,000 2.78 0.10 2,500,000 0.10 October 15, 2024 62,500 3.04 0.10 31,250 0.10 October 17, 2024 1,200,000 3.05 0.10 1,200,000 0.10 February 12, 2025 500,000 3.37 0.22 500,000 0.22 February 25, 2025 400,000 3.40 0.16 400,000 0.16 February 27, 2025 300,000 3.41 0.21 300,000 0.21 July 30, 2025 1,000,000 3.83 0.23 1,000,000 0.23 August 10, 2025 1,390,000 3.86 0.23 1,390,000 0.23 October 1, 2025 250,000 4.00 0.22 62,500 0.22 October 20, 2025 500,000 4.06 0.22 500,000 0.22 October 27, 2025 2,400,000 4.08 0.22 2,400,000 0.22 November 2, 2025 250,000 4.09 0.26 250,000 0.26 November 26, 2025 50,000 4.16 0.21 50,000 0.21 December 14, 2025 350,000 4.21 0.21 350,000 0.21 December 28, 2025 125,000 4.24 0.25 62,500 0.25 January 4, 2026 200,000 4.26 0.29 68,000 0.29 April 16, 2026 400,000 4.54 0.72 - 0.72 June 14, 2026 250,000 4.71 0.79 250,000 0.79 June 15, 2026 950,000 4.71 0.76 - 0.76 June 30, 2026 125,000 4.75 0.76 - 0.76 July 16, 2026 225,000 4.79 0.76 - 0.76
14,279,750 3.59 0.27 12,166,500 0.20

(ii) Restricted share unit plan

At the Company’s Annual General Meeting held on June 15, 2021, the shareholder approved the 2021 Restricted Share Unit Plan, reserving for issuance a maximum of 8,000,000 common shares of the Company. The 8,000,000 Restricted Share Unit are included in the 33,372,093 common shares of the Incentive Stock Option Plan (20% Fixed Plan). As at September 30, 2021, 7,150,000 RSUs remain available to be granted.

POWERBAND SOLUTIONS INC. Notes to the Financial Statements (Unaudited - Expressed in Canadian dollars) For the three and nine months ended September 30, 2021 and 2020

20. SHARE CAPITAL AND RESERVES (continued)

(f) Share-based compensation (continued)

(ii) Restricted share unit plan (continued)

RSUs outstanding as at September 30, 2021:

RSUs outstanding as at September 30, 2021:	RSUs outstanding as at September 30, 2021:
Number of RSUs
Balance as at December 31, 2018 Granted Vested	- 3,000,000 (3,000,000)
Balance as at December 31, 2019	-
Granted Vested	2,000,000 (950,000)
Balance as at December 31, 2020	1,050,000
Granted Vested	150,000 (350,000)
Balance as at September 30, 2021	850,000

On November 4, 2019, the Company issued 3,000,000 restricted share units to the directors of the Company at a price of $0.07 per Common Share for services rendered.

On August 13, 2020, the Company issued 700,000 restricted share units to consultants of the Company at a price of $0.22 per common share for serviced rendered. 50% of these restricted share units vest on August 13, 2021 and remaining 50% will vest on August 13, 2022. During the three and nine months period ended September 30, 2021, included in the share-based compensation was $18,986 (2020 - $15,189) and $76,262 (2020 - $44,301), respectively related to the vested portion of these units.

On October 14, 2020, the Company issued 350,000 restricted share units to consultants of the Company at a price of $0.195 per common share for serviced rendered. 50% of these restricted share units will vest on October 14, 2021 and remaining 50% will vest on October 14, 2022. The Company recognized $10,939 as share based compensation in 2020. During the three and nine months period ended September 30, 2021, included in the share-based compensation was $12,902 (2020 - $nil) and $38,285 (2020 - $nil), respectively related to the vested portion of these units.

On October 22, 2020, the Company issued 950,000 restricted share units to an organization at a price of $0.235 per common share and they vested 100% on the date of grant. The Company recognized a fair value of $223,250 as share based compensation in 2020 for the equity instruments granted.

On June 30, 2021, the Company issued 150,000 restricted share units to a consultant at a price of $0.78 per common share and these will vest upon completion of the terms of the service agreement. During the three and nine months ended September 30, 2021 no amount was recorded in the share-based compensation.

(g) Escrow shares

In fiscal year ended December 31, 2018, upon the completion of the Reverse Takeover transaction on February 8, 2018, a number of shares of insiders of Marquis Ventures Inc. and Powerband Solutions Inc. were subject to an escrow agreement. 10% of the shares became free-trading on February 8, 2018 with 15% released every six months following. As at September 30, 2021, nil (December 31, 2020 – 2,834,869) issued shares were being held in escrow.

POWERBAND SOLUTIONS INC. Notes to the Financial Statements (Unaudited - Expressed in Canadian dollars) For the three and nine months ended September 30, 2021 and 2020

21. NON-CONTROLLING INTERESTS

NON-CONTROLLING INTERESTS	NON-CONTROLLING INTERESTS	NON-CONTROLLING INTERESTS	NON-CONTROLLING INTERESTS	NON-CONTROLLING INTERESTS	NON-CONTROLLING INTERESTS
Drivrz Holdings LLC IntellaCar Solutions LLC Drivrz Financial Inc. 2744915 Ontario Inc. Total
NCI in subsidiaryat September 30,2021 5.40% 40.00% 26.38% 49.00%
At December 31,2019	$ 268,927	$ -	$ -	$ -	$ 268,927
Capital contribution	2,292,146	-	-	-	2,292,146
Change in NCI	60,989	-	-	-	60,989
Foreign currencytranslation	1,328	-	-	-	1,328
Share of loss	(2,213,468)	-	-	-	(2,213,468)
At September 30, 2020 409,922 - - - 409,922
At December 31,2020	362,847	1,214,616	-	-	1,577,463
Capital contribution	485,408	17,927	-	-	503,335
Change in NCI	(122,075)	-	-	-	(122,075)
Foreign currencytranslation	(13,108)	(9,794)	-	-	(22,902)
Share of loss	(592,366)	(404,540)	(8,431)	(7,595)	(1,012,932)
At September 30, 2021 120,706 818,209 (8,431) (7,595) 922,889

22. RELATED PARTY TRANSACTIONS

During the nine months period ended September 30, 2021, the Company paid for expenses $24,788 (2020 - $17,753) and charged subscription fee of $10,582 (2020 - $11,057) to companies controlled by the CEO.

During the nine months period ended September 30, 2021 and 2020, the Company recorded sales transactions to its joint venture, D2DAA, as follows:

	September 30, 2021	September 30, 2020
	($)	($)
Software development sales	1,050,772	1,124,080
Vehicle and auction sales	-	-

As at September 30, 2021, the following are due/to from D2DAA accounts receivable is $1,388,039 (December 31, 2020 - $968,801) and $18,000 (December 31, 2020 - $18,000) is included in deferred revenue for deposit on vehicles by D2DAA. The Company owes D2DAA $nil (December 31, 2020 - $604,770) as at September 30, 2021. The balance is due on demand and non-interest bearing. The balance was settled in full during the period ended September 30, 2021.

As at September 30, 2021, the Company owed the former CEO of Drivrz Holdings LLC $nil (December 31, 2020 - $207,532). The amount is due on demand and non- interest bearing. The balance was settled in full during the period ended September 30, 2021.

POWERBAND SOLUTIONS INC. Notes to the Financial Statements (Unaudited - Expressed in Canadian dollars) For the three and nine months ended September 30, 2021 and 2020

22. RELATED PARTY TRANSACTIONS (continued)

Shareholder loans and transactions

As at September 30, 2021, shareholder loan balance was $31,852 (December 31, 2020 - $762,452), including accrued interest of $nil (December 31, 2020 - $134,384) recorded in the accounts payable and accrued liabilities. This loan was interest bearing at 9% per annum with maturity dates of March 1, 2021 and April 30, 2022.

As at September 30, 2021, the interest free notes payable on acquisition of INTELLACAR amounted to $nil (December 31, 2020 - $1,273,200). The promissory notes have a maturity date of March 31, 2021. The balance was settled in full during the period ended September 30, 2021.

As at September 30, 2021, the interest free short-term shareholder loan balances was $nil (December 31, 2020 - $795,150 (US$625,000)).

On July 17, 2019, the Company and a shareholder entered into a Bridge Note agreement of $2,500,000 due on January 17, 2020 with an interest rate of 9% per annum. As at September 30, 2021, the Company owed $nil (December 31, 2020 - $1,102,701) to the shareholder against the Bridge Note. On April 1, 2021, the balance of $1,000,000 outstanding on this Note was settled by issue of 800,000 common shares in the Company. On March 9, 2021, the Company and the shareholder entered into a loan agreement for $2,351,678 due on demand with an interest rate of 2.25% per annum. As at September 30, 2021, the Company owed $1,962,607 (December 31, 2020 - $nil). During the three months ended June 30, 2021, the shareholder advanced total of $1,758,548 for operating expenses and the amount that is outstanding on this advance as of September 30, 2021 is $678,380.

Compensation of key management personnel of the Company

Key management personnel include those persons having authority and responsibility for planning, directing and controlling the activities of the Company as a whole. The Company has determined that key management personnel consist of the Board of Directors, corporate officers, including the Chief Executive Officer, the President, the Chief Financial Officer, Chief Operating Officer and the Chief Technology Officer.

Key management personnel compensation for the nine months period ended September 30, 2021 and 2020 was as follows:

i.	CEO $120,000 (2020 -$225,000).
ii.	President $251,620 (2020- $182,804).
iii.	Chief Financial Officer $112,500 (2020- $24,255)
iv.	Chief Technology Officer $137,808 (2020- $117,936)
v.	Chief Operating Officer $169,023 (2020 - $181,413).
vi.	Share based compensation $32,688 (2020 - $10,343)

At September 30, 2021, the total amount payable to key management personnel of the Company amounted to $nil (December 31, 2020 - $1,451,011) and recorded in Accounts payable and accrued liabilities.

23. FINANCIAL INSTRUMENTS

The Company is exposed in varying degrees to a variety of financial instrument related risks. The main types of risks are credit risk, liquidity risk and market risk. These risks arise from the normal course of operations and all transactions are undertaken as a going concern. The type of risk exposure and the way in which such exposure is managed is provided as follows:

POWERBAND SOLUTIONS INC. Notes to the Financial Statements (Unaudited - Expressed in Canadian dollars) For the three and nine months ended September 30, 2021 and 2020

23. FINANCIAL INSTRUMENTS (continued)

Credit risk

Credit risk is the risk of an unexpected loss if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Company's credit risk is primarily attributable to its trade and other receivables. The nature of the Company’s diverse customer base ensures that there is no concentration of credit risk. The aging of the trade receivables is as follows:

of the Company’s diverse customer base ensures that there is no concentration receivables is as follows:	of the Company’s diverse customer base ensures that there is no concentration receivables is as follows:	of the Company’s diverse customer base ensures that there is no concentration receivables is as follows:
September 30, 2021 December 31, 2020
Current to 30 dayspast due	$ 858,478	$ 431,799
Past due(31-60 days)	101,733	43,480
Past due(> 61 days)	1,198,237	822,146
2,158,448 1,297,425

Based on amounts which are past due, historical trends, and available information, a provision for expected credit loss of $376,985 was calculated by using a provision matrix. There is no indication that a customer could be experiencing liquidity or going concern problems.

The Company maintains minimal cash reserves on hand. Adequate liquidity to meet all current payment obligations and future planned capital expenditures are provided by investments from the shareholder.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company's approach to managing liquidity risk to is ensure, as far as possible, that it will always have sufficient liquidity to meet liabilities when due. This is provided through cash injections by the shareholder when needed. The Company also manages liquidity risk by continuously monitoring actual and budgeted expenses.

At September 30, 2021, all the Company's accounts payable payables and accrued liabilities had contractual terms of less than one year.

less than one year.	less than one year.	less than one year.	less than one year.	less than one year.	less than one year.
Contractual cash flows Less than 1 year 1-3years 4-5years After 5 years
Accountspayable and accrued liabilities	$ 3,222,217	$ 3,222,217	$ -	$ -	$ -
Due to relatedparties	2,672,845	2,672,845	-	-	-
Leasepayments	4,514,650	865,361	1,629,510	1,606,090	413,689
Government assistance	60,000	60,000	-	-	-
Debt - current and longterm	4,459,350	2,548,000	1,911,350	-	-
14,929,062 9,368,423 3,540,860 1,606,090 413,689

POWERBAND SOLUTIONS INC. Notes to the Financial Statements (Unaudited - Expressed in Canadian dollars) For the three and nine months ended September 30, 2021 and 2020

23. FINANCIAL INSTRUMENTS (continued)

Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates, will affect the Company's income or the value of its holdings of financial instruments. The Company has limited exposure to any market risk.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market interest rates. The Company believes that interest rate risk is low as it holds no investments in market instruments. The Company does not have interest rate risk related to its credit facilities, since all credit is made through shareholder loans and short-term loans with set interest rates.

Currency risk

Currency risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate due to changes in foreign exchange rates.

The Company is exposed to the currency risk because of components of revenue and costs being denominated in currencies other than Canadian dollar, primarily the United States dollar. The Company holds cash and accounts receivable, accounts payable and accrued liabilities in currencies other than the Canadian dollar, primarily the United States dollar.

Fair value

The Company classifies its fair value measurements within a fair value hierarchy, which reflects the significance of the inputs used in making the measurements as defined in IFRS 13 - Financial Instruments: Fair Value Measurement (“IFRS 13”).

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

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

Level 3 – Unobservable inputs which are supported by little or no market activity. As required by IFRS 13, assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

The fair value of cash, accounts receivables, accounts payables and accrued liabilities all approximate their carrying values due to their short-term nature. Cash and accounts receivable are measured at amortized cost using Level 1 and Level 2 inputs, respectively. The accounts payable and accrued liabilities, loan, current and long-term lease obligation, and due to related parties’ balances are measured at amortized cost and classified as Level 2.

24. CAPITAL MANAGEMENT

The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern and continue to develop and market its software applications. The capital structure of the Company consists of equity attributable to common shareholders, comprised of issued capital and deficit. The Company maintains and adjusts its capital structure based on changes in economic conditions and the Company’s planned requirements. The Company may adjust its capital structure by issuing new equity, issuing new debt, and controlling the capital expenditures program. The Company is not subject to externally imposed capital requirements. The Company is dependent on financing from shareholders to develop its technology and fund its activities. There were no changes in the Company’s approach to capital management during the period ended September 30, 2021.

POWERBAND SOLUTIONS INC. Notes to the Financial Statements (Unaudited - Expressed in Canadian dollars) For the three and nine months ended September 30, 2021 and 2020

25. LEGAL CLAIMS

In August 2018, the Company was served a Notice of Civil Claim in the Superior Court of British Columbia by Advanced Media Solutions Limited (“AMSL”), a Company incorporated pursuant to the laws of the British Virgin Islands. AMSL is seeking payment of USD$450,000. The Company disputes the facts set out in the Civil Claim and has filed a Response to Civil Claim, as well as a Counterclaim to the Plaintiff and other individuals and entities involved for damages. A further claim was then filed against the Company for a further $455,000. The Company believes the claim is without merit. The Company has assessed the claims totaling $905,000 as highly unlikely to be successful.

In May 2019, the Company was served a Notice of Civil Claim in the Superior Court of British Columbia by Paul Mountney and Paulette Mountney, a former consultant of the Company and the sole shareholder of LeadSource Canada Inc., respectively. The amount of the Claim is approximately $565,000. The Company believes the claim is without merit. The Company has assessed the claim as highly unlikely to be successful.

Frunzi v. MUSA Auto Holdings, LLC, Texas District Court, Dallas County, Case # DC-18-14445:

Mr. Frunzi’s employment was terminated for cause on September 5, 2018. Mr. Frunzi subsequently asserted a claim for breach of his employment agreement. He seeks money damages in the amount of the severance payment specified in his employment agreement, which is an amount comprised of 18 months’ base salary, his prior year’s bonus, and health insurance premiums for 18 months. He also seeks the value of the profit interest units that vested under his grant agreement before his employment was terminated. In addition to money damages, Mr. Frunzi seeks a declaratory judgment that MUSA breached his employment agreement and an accounting that can be used to determine the value of the profit interest units that vested before the termination. The amount in controversy is about $427,500, not including the value of any profit interest units claimed by Frunzi. The case was expected to proceed to trial in Dallas County on March 30, 2021, which has been postponed to March 8, 2022. Musa Auto Holdings, LLC brought a counterclaim against Frunzi for breaching his employment agreement because it required that he surrender to us all the company material when he was terminated. He conceded in his deposition that he retained sensitive information. We cannot prove damages to any degree of certainty but have pled for injunctive relief to seek our outside counsel fees.

Management considers the above claims to be unjustified and probability that they require settlement to be remote. No amounts has been accrued as a result of these claims since a reliable estimate cannot currently be made.

26. SEGMENTED REPORTING

Operating segments are components of an entity that engage in business activities from which they earned revenues and incur expenses the operations for which can be clearly distinguished and for which the operating results are regularly reviewed by a chief operating decision maker to make resource allocation decisions and to assess performance. During the period ended September 30, 2021 the Chief Financial Officer served in the function of the Chief Operating Decision Maker (CODM). The Chief Financial Officer is responsible for allocating resources and assessing the performance of the following segments: Canadian operations and US operations.

Transactions between reportable segments are accounted for in accordance with the accounting policies described in the summary of significant accounting policies.

The companies CODM measures the performance of each operating segment based on operating profit (loss). The segmented information is set out in the following tables:

POWERBAND SOLUTIONS INC. Notes to the Financial Statements (Unaudited - Expressed in Canadian dollars) For the three and nine months ended September 30, 2021 and 2020

26. SEGMENTED REPORTING (continued)

Canada USA Total $ $ $ Revenue Vehicle and auctionsales 184,835 - 184,835 Software development sales 1,051,072 - 1,051,072 Lease origination revenue - 15,128,949 15,128,949 Subscription revenue - 474,311 474,311 1,235,907 15,603,260 16,839,167 Nine months ended September 30, 2021	Canada USA Total $ $ $ Revenue Vehicle and auctionsales 184,835 - 184,835 Software development sales 1,051,072 - 1,051,072 Lease origination revenue - 15,128,949 15,128,949 Subscription revenue - 474,311 474,311 1,235,907 15,603,260 16,839,167 Nine months ended September 30, 2021	Canada USA Total $ $ $ Revenue Vehicle and auctionsales 184,835 - 184,835 Software development sales 1,051,072 - 1,051,072 Lease origination revenue - 15,128,949 15,128,949 Subscription revenue - 474,311 474,311 1,235,907 15,603,260 16,839,167 Nine months ended September 30, 2021	Canada USA Total $ $ $ Revenue Vehicle and auctionsales 184,835 - 184,835 Software development sales 1,051,072 - 1,051,072 Lease origination revenue - 15,128,949 15,128,949 Subscription revenue - 474,311 474,311 1,235,907 15,603,260 16,839,167 Nine months ended September 30, 2021	Nine months ended September 30, 2020	Nine months ended September 30, 2020	Nine months ended September 30, 2020
				Canada $ 150,446	USA $ -	Total $ 150,446
				1,254,407	-	1,254,407
				-	196,418	196,418
				-	-	-
				1,404,853 196,418 1,601,271

Nine months ended September 30, 2021				Nine months ended September 30, 2020
Operating loss before other income	Canada $ 5,099,237	USA $ 1,779,234	Total $ 6,878,471	Canada $ 5,518,254	USA $ 2,212,140	Total $ 7,730,394
Interest in joint venture	-	-	-	291,094	-	291,094
5,099,237 1,779,234 6,878,471				5,809,348 2,212,140 8,021,488

Canada USA Total $ $ $ Segment assets 12,231,673 12,829,259 25,060,932 Segment liabilities 8,096,946 6,256,048 14,352,994 As At September 30, 2021				As At December 31, 2020
				Canada $ 2,888,371	USA $ 10,950,797	Total $ 13,839,168
				6,730,899	6,228,466	12,959,365

27. SUBSEQUENT EVENTS

Subsequent to the period ended September 30, 2021, the following corporate activities occurred:

On October 26, 2021, the Company granted 8,192,500 stock options to directors, officers, employees and consultants which vest over a two-year period. The stock options were issued with an exercise price of $0.89 and an expiry date five years from the date of issuance.
On October 26, 2021, the Company issued 3,150,000 restricted share units to directors, officers, employees and consultants at a price of $0.89 per common share and which vest over a two-year period.
Subsequent to September 30, 2021 and up to November 9, 2021, the Company received $721,363 from the exercise of stock options and warrants.

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AmeriTrust Financial Technologies Inc. — Interim / Quarterly Report 2021

46622_rns_2021-11-09_22ee3565-3d82-4f5c-9c6f-01f3f194daf8.pdf

Notice to Reader

POWERBAND SOLUTIONS INC.

Condensed Interim Consolidated Statements of Financial Position (Expressed in Canadian Dollars) (Unaudited)

POWERBAND SOLUTIONS INC.

Condensed Interim Consolidated Statements of Loss (Expressed in Canadian Dollars) (Unaudited)

POWERBAND SOLUTIONS INC.

Condensed Interim Consolidated Statements of Comprehensive Loss (Expressed in Canadian Dollars) (Unaudited)

POWERBAND SOLUTIONS INC.

Condensed Interim Consolidated Statements of Cash Flows (Expressed in Canadian dollars) (Unaudited)

POWERBAND SOLUTIONS INC.

Condensed Interim Consolidated Statements of Changes in Shareholders' Equity (Deficiency) (Expressed in Canadian dollars) (Unaudited)

1. NATURE OF OPERATIONS AND GOING CONCERN

2. BASIS OF PREPARATION

a) Statement of compliance

2. BASIS OF PREPARATION - (continued)

a) Statement of compliance (continued)

3. SIGNIFICANT ACCOUNTING POLICIES

New Accounting Standards and recent pronouncements

Property, plant and equipment (Amendments to IAS 16)

4. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS

Going concern evaluation

Share-based payment

Estimated useful lives

Impairment of long-lived assets

Impairment of goodwill

4. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS (continued)

Allocation of purchase consideration

Leases

Critical judgments in determining the lease term

Convertible debentures

Provision for expected credit losses (“ECL”)

4. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS (continued)

Interest in other entities

5. BUSINESS COMBINATION AND ACQUISITIONS

Acquisitions in 2019 and 2021

5. BUSINESS COMBINATION AND ACQUISITIONS (continued)

5. BUSINESS COMBINATION AND ACQUISITIONS (continued)

Acquisitions in 2020

6. INTEREST IN JOINT VENTURE

7. CASH

8. ACCOUNTS RECEIVABLE

9. INVENTORY

10. DEPOSITS

11. INVESTMENT

12. PROPERTY AND EQUIPMENT

13. INTANGIBLE ASSETS

13. INTANGIBLE ASSETS (continued)

Goodwill

14. RIGHT OF USE ASSETS

15. ACCOUNTS PAYABLES AND ACCRUED LIABILITIES

16. SHORT TERM LOAN

17. LEASES

17. LEASES (continued)

18. CONVERTIBLE DEBENTURE

18. CONVERTIBLE DEBENTURE (continued)

19. GOVERNMENT STIMULUS SUBSIDIES

Canada Emergency Wage Subsidy (“CEWS”)

Canada Emergency Rent Subsidy (“CERS”)

Canada Emergency Business Account (“CEBA”)

United States Paycheck Protection Program (“PPP”)

20. SHARE CAPITAL AND RESERVES

(a) Authorized:

20. SHARE CAPITAL AND RESERVES (continued)

(b) Shares issued on Private Placements:

(c) Shares for Debt and services:

20. SHARE CAPITAL AND RESERVES (continued)

(d) Shares issued for acquisitions

(e) Share Purchase Warrants

(f) Share-based compensation

(i) Stock option plan

20. SHARE CAPITAL AND RESERVES (continued)

(f) Share-based compensation (continued)

(i) Stock option plan (continued)

20. SHARE CAPITAL AND RESERVES (continued)

(f) Share-based compensation (continued)

(i) Stock option plan (continued)

20. SHARE CAPITAL AND RESERVES (continued)

AmeriTrust Financial Technologies Inc. Interim / Quarterly Report 2021