BIGG Digital Assets Inc. — Interim / Quarterly Report 2021

Nov 30, 2021

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Form 51-102F1

JACKPOT DIGITAL INC.

Management’s Discussion & Analysis Condensed Interim Financial Statements for the Nine Months Ended September 30, 2021

The following discussion and analysis of the financial condition and financial position and results of operations of Jackpot Digital Inc. (the “Company” or “Jackpot”) for the nine months ended September 30, 2021 should be read in conjunction with the condensed interim unaudited financial statements and notes thereto for the nine months ended September 30, 2021 and 2020 and the annual audited financial statements and notes thereto for the years ended December 31, 2020 and 2019. The condensed interim unaudited financial statements and notes thereto for the nine months ended September 30, 2021 and 2020 have not been reviewed by the Company’s Auditor.

These condensed interim financial statements are prepared in accordance with International Accounting Standard 34 Interim Financial Reporting using the accounting policies consistent with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”). They do not include all of the information required for full annual financial statements. The Company’s condensed interim unaudited financial statements are expressed in Canadian (CDN) Dollars which is the Company’s and its subsidiaries’ functional currency. All amounts in this MD&A are in CDN dollars unless otherwise stated.

The following information is prepared as at November 29, 2021.

Forward-Looking Statements

Certain statements contained herein are “forward-looking” and are based on the opinions and estimates of management, or on opinions and estimates provided to and accepted by management. Forward-looking statements may include, among others, statements regarding subject to obtaining customary regulatory approvals, future plans, costs, projections, objectives, economic performance, or the assumptions underlying any of the foregoing. In this MD&A, words such as “may”, “would”, “could”, “will”, “likely”, “enable”, “feel”, “seek”, “project”, “predict”, “potential”, “should”, “might”, “hopeful”, “objective”, “believe”, “expect”, “propose”, “anticipate”, “intend”, “plan”, “estimate”, “optimistic” and similar words are used to identify forward-looking statements. Forward-looking statements are subject to a variety of significant risks and uncertainties and other factors that could cause actual events or results to differ materially from those expressed or implied. Although management believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, projections and estimations, there can be no assurance that these plans, assumptions, projections, or estimations are accurate. Readers, shareholders, and investors are therefore cautioned not to place reliance on any forward-looking statements in this MD&A as the plans, assumptions, intentions, estimations, projections, expectations, or factors upon which they are based might vary or might not occur. The forward-looking statements contained in this MD&A are made as of the date of this MD&A, and are subject to change after such date. The Company undertakes no obligation to update or revise any forward-looking statements, except in accordance with applicable securities laws.

Overview

The principal business of Jackpot Digital Inc. (the “Company” or “Jackpot”) is the manufacturing, leasing and selling of electronic table games (ETGs). The Company’s common shares trade on the TSX Venture Exchange (“TSX-V”) under the symbol “JJ” and on the OTCQB under the trading symbol “JPOTF”. A certain number of the Company’s warrants trade on the TSX-V under the

JACKPOT DIGITAL INC. Form 51-102F1 – Management’s Discussion & Analysis Nine months ended September 30, 2021

symbols “JJ.WT.A”, “JJ.WT.B” and “JJ.WT.C”. The Company’s common shares are also listed for trading on the Frankfurt and Berlin Exchanges under the symbol “LVH3”.

Effective on May 1, 2020, the Company consolidated its common shares on the basis of 10 preconsolidation common shares to 1 post-consolidation common share. All the figures as to the number of common shares, stock options, warrants, prices of issued shares, exercise prices of stock options and warrants, as well as loss per share, in the consolidated financial statements are postconsolidation amounts and the prior year comparatives have been retroactively restated to present the post-consolidation amounts. The CUSIP number of the Company’s common shares is 466391307 and the CUSIP numbers of the Company’s listed for trading warrants are 466391174, 466391182 and 466391216.

On June 28, 2021 the Company caused the incorporation of Yo Eleven Gaming Inc. (“Yo Eleven”) under the Business Corporations Act of the Province of British Columbia, Canada (the “BCBCA”). At the time of incorporation, Yo Eleven was a wholly-owned subsidiary of the Company.

The financial statements of the Company’s wholly-owned subsidiaries, Jackpot Digital (NV), Inc. (incorporated in the USA), Touche Capital Inc. (incorporated in British Columbia), the Company’s former wholly-owned subsidiary Yo Eleven, and the Company’s former partially-owned subsidiary 37 Capital Inc. (“37 Capital”), are included in the financial statements from the date that control commenced to the date of disposal or dissolution.

The Company’s office is located at Suite 303 – 570 Granville Street, Vancouver, British Columbia, Canada, V6C 3P1 and the Company’s warehouse is located at 4664 Lougheed Hwy, Unit W030, Burnaby, British Columbia, Canada, V5C 5T5.

The Company’s registered office is at Suite 3200 - 650 West Georgia Street, Vancouver, BC V6B 4P7.

The Company’s audit committee consists of Messrs. Neil Spellman (Chairman), Gregory McFarlane and Alan Artunian.

The Company’s Registrar and Transfer Agent is Computershare Investor Services Inc. located at 510 Burrard Street, Vancouver, BC, Canada, V6C 3B9.

The Company is a reporting issuer in the Provinces of British Columbia and Alberta and files all public documents on www.sedar.com .

Results of Operations

On November 3, 2021, the Company signed a Binding Letter of Intent for a licensing agreement with the Pit River Tribe operating the Pit River Casino located in Burney, California to install one of the Company’s Jackpot Blitz[TM ] ETG. The licensing agreement is subject to obtaining the customary regulatory approval.

On November 1, 2021, the Company signed a Binding letter of Intent for a licensing agreement with Casino Cosmos located in Tsaghkadzor, Armenia to install two of the Company’s Jackpot Blitz[TM] ETG. The licensing agreement is subject to obtaining the customary regulatory approval.

During the nine months period ended September 30, 2021, twenty-two of the Company’s ETG Poker tables which are on certain cruise ships have resumed operations and have started generating revenues.

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Jackpot Digital Inc. Nine months ended September 30, 2021 MD&A Form 51-102F1

JACKPOT DIGITAL INC. Form 51-102F1 – Management’s Discussion & Analysis Nine months ended September 30, 2021

The Company received its Gaming Vendor License from the Soboba Tribal Gaming Commission of California on September 18[th] , 2020 which formalized the initial order of 2 (two) Jackpot Blitz™ ETGs. During March 2021, the Company received four additional Jackpot Blitz™ ETG orders from Soboba Casino Resort, for a total order of 6 (six) ETGs. During April 2021, the Company remotely installed the first Jackpot Blitz™ ETG and a second Jackpot Blitz™ ETG was installed during June 2021. During July 2021, the Company remotely installed 2 (two) more Jackpot Blitz™ ETG at the Soboba Casino Resort. The remaining order for two Jackpot Blitz™ ETGs is expected to be installed during Q4 2021.

On May 28, 2019, the Company and Virgin Voyages signed a License and Lease Agreement for one Jackpot Blitz[TM] ETG which was installed on the Scarlet Lady vessel of the Virgin Voyages fleet on January 16, 2020. On December 16, 2020 Jackpot and Virgin Voyages executed an amended License and Lease Agreement for a second Jackpot ETG which was remotely installed on Valiant Lady, the second vessel in the Virgin Voyages fleet, during May 2021.

During April 2021, the Company submitted its software package for Jackpot Blitz™, for User Acceptance Testing (“UAT”) to Jackpot’s casino operator client. Upon passage of the UAT process, Jackpot and the client intends to begin field testing of the Jackpot Blitz™ and the installation date of the ETGs will be dependent on the client’s resumption of operations in 2021.

During February 2021, the Company signed a software license and equipment lease agreement with Casino Incanto of Nuevo Vallarta Nayarit, Mexico, for two of the Company's Jackpot Blitz[TM] ETGs.

The Company has made an investment of $38,000 in a marketing app which has the ability to advertise to the gaming industry.

As of September 30, 2021, the Company’s operations employed 19 people (September 30, 2020: 9 people) consisting of staff and management. As of the date of this MD&A, the Company's operations employ 19 people consisting of staff and management.

At the Company’s Annual General and Special Meeting which was held on September 16, 2021 in Vancouver, BC, the shareholders received the Audited Consolidated Financial Statements for the fiscal year ended December 31, 2020 and the Independent Auditor’s report thereon; fixed the number of Directors for the ensuing year at four; re-elected Jake H. Kalpakian, Neil Spellman, Gregory T. McFarlane and Alan Artunian as Directors of the Company; re-appointed the Company’s Independent Auditor, Smythe LLP, Chartered Professional Accountants, for the ensuing year; authorized the Directors to fix the remuneration to be paid to the Auditor, re-approved the Company’s 10% Rolling Stock Option Plan, and approved the Special Resolution in respect to the spinout of the Company’s iGaming assets by way of a Plan of Arrangement to Yo Eleven, and approved Yo Eleven’s 10% Rolling Stock Option Plan.

The Company is presently not a party to any legal proceedings whatsoever.

Electronic Table Games

The Company is focused on developing and expanding its ETG business.

The Company entered into a Lease Agreement with an arm’s length party for a warehouse which has an area of 9,792 square feet and which is located at 4664 Lougheed Highway, Unit WO30, Burnaby, British Columbia. The Company’s warehouse is used for the purpose of storing, cleaning, assembling, refurbishing, manufacturing, testing, configuring, packing, and shipping the Company’s ETGs. The term of the lease has been extended from May 1, 2021 to October 31, 2023 for a monthly rent of $15,000 and the applicable taxes.

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Jackpot Digital Inc. Nine months ended September 30, 2021 MD&A Form 51-102F1

JACKPOT DIGITAL INC. Form 51-102F1 – Management’s Discussion & Analysis Nine months ended September 30, 2021

The Company categorizes its ETG customers in three markets: cruise ships, North American casinos and other markets. Cruise Ships

• The cruise ship industry operates their casinos while they are in international waters, and therefore, they do not require their gaming equipment vendors to attain any form of gaming license or product approval.

• The Company typically leases ETGs on a monthly recurring basis to cruise ship companies.

• • Carnival Corporation (“Carnival”) is the largest operator of the Company’s ETGs. Carnival has resumed their North American operations as of July 1[st] , 2021 and it is expected that 70% of their fleet will be operational by the end of 2021.

• The Company has installed one Jackpot Blitz[TM] ETG on the Scarlet Lady cruise ship and one Jackpot Blitz[TM ] ETG on the Valiant Lady cruise ship of the Virgin Voyages fleet.

• • During October 2019, the Company signed a Software License and Equipment Lease Agreement (the “Agreement”) with Royal Caribbean Cruises Ltd. (“RCL”) to be the third cruise line to offer the Jackpot Blitz™ ETGs in their casinos. The Company submitted software for RCL’s User Acceptance Testing (“UAT”) for launch of the Jackpot Blitz™ ETG on an RCL ship. The installation date of the ETGs is dependent on RCL’s resumption of operations.

North American Casinos

• The North American casino industry is predominantly regulated at the state/provincial level as individual jurisdictions. Additionally, some states have native tribal jurisdictions. Every jurisdiction approves the gaming equipment used in their casinos, usually in the form of a gaming license. Therefore, the Company must attain gaming licenses directly or through a distributor to expand its ETG business in North America.

• The Company currently holds approved gaming licenses and registrations in North America with the California Gambling Control Commission, the Department of Justice and Public Safety, Gaming, Liquor and Security Licensing in the Province of New Brunswick, the Rosebud Sioux Tribe of Nebraska, and the Soboba Tribal Gaming Commission of California. The Company currently has license applications underway with several States, Provincial, and Tribal gaming regulators across North America.

• The Company typically leases ETGs on a monthly recurring basis to North American casino customers.

• The Company has signed Agreements and/or Binding Letters of Intent with numerous entities in Canada and the United States which are contingent on the Company receiving license approvals by the relevant regulatory bodies.

Other Markets

• Markets outside cruise ships and North American casinos are considered on a case-bycase basis, depending on the revenue potential, practicality of deploying and supporting the Company’s ETGs in other countries/continents, and other considerations.

• The Company may opt to lease or sell ETGs in other markets.

• The Company has signed Sales/Service and/or Distribution agreements and/or Binding Letters of Intent with several entities in other markets.

• The Company has installed one Jackpot Blitz[TM] ETG at the Il Palazzo land based casino in San Lorenzo, Paraguay

Research and Development

The Company is continuously developing new hardware and software components for the Jackpot Blitz™ ETG and other products in the development pipeline. During the nine months period ended September 30, 2021, the Company incurred $90,000 on salaries and benefits in respect to Research

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Jackpot Digital Inc. Nine months ended September 30, 2021 MD&A Form 51-102F1

JACKPOT DIGITAL INC. Form 51-102F1 – Management’s Discussion & Analysis Nine months ended September 30, 2021

and Development. This cost was incurred primarily for the software development to develop new software features and improve the hardware (reduce cost and improve efficiency) on the Jackpot Blitz™ ETG.

During 2021, the Company’s R&D efforts continue to develop new hardware and software components for the Jackpot Blitz™ ETG. First, prototyping and redesigning critical hardware components of the Jackpot Blitz™ ETG to reduce cost and improve manufacturability. Second, update the current software technology to improve the ability to update and add new software features efficiently for the Jackpot Blitz™ ETG as well as other future gaming products. Third, the Company started a project with an engineering consulting firm, Enginuity Consulting Ltd. (“Enginuity”) to redesign and prototype our next generation Jackpot Blitz™ ETG to further reduce overall cost and scalability of manufacturing.

Acquisition of certain assets of 52 Gaming, LLC.

During February 2021, the Company received TSX Venture Exchange approval and closed its transaction of acquiring certain assets of 52 Gaming, LLC (“52 Gaming”). 52 Gaming, based in North Carolina, used to manufacture and license its electronic poker tables (“ETGs”) to the cruise ship industry.

Terms of the transaction are as follows:

• Cash payment of US$107,500 on the closing date to 52 Gaming (paid);

• Issuance of a promissory note by the Company for the amount of US$470,000 with a term of twenty-four months, bearing 10% simple interest per annum, and which may be prepaid by the Company (issued);

• Pursuant to the promissory note, as at September 30, 2021, the Company has paid the principal amount of US$117,500 and US$16,563 in accrued interest. Subsequent to the nine months ended September 30, 2021, the Company has made an additional principal payment of US$58,750 and US$8,885 in accrued interest;

• On the closing date, the issuance of 1,500,000 common shares to 52 Gaming (issued);

• On the closing date, the issuance of 2,000,000 share purchase warrants to 52 Gaming exercisable at $0.105 per share for a period of five years (issued); and

• Commencing January 2022 and for a period of ten years, the Company is to make variable royalty payments to 52 Gaming.

Under IFRS 3, the substance of the acquisition does not constitute a business combination as no processes were acquired and will be accounted for as an asset acquisition.

Consulting and Advisory Agreements

During September 2020, the Company entered into a Non-Exclusive Advisory and Consultancy Agreement with Paulson Investment Company, LLC of New York, USA (“Paulson”), to provide business advisory and consulting services to the Company. As compensation, the Company issued to Paulson 450,000 share purchase warrants exercisable at $0.10 per share for a period of five years. During February 2021, Jackpot and Paulson amended the terms of the agreement with the term ending on November 30, 2021. As at the date of this MD&A, Jackpot has issued to Paulson 626,132 warrants with exercise prices ranging from $0.19 to $0.35 per share. Pursuant to the terms of the Agreement a total of 290,110 warrants have been cancelled and 336,022 warrants remain outstanding.

As of June 25, 2021, the Company has engaged the services of Investing News Network of (“INN”) of Vancouver, British Columbia and HE Capital Markets of London, UK as part of the Company’s endeavour to increase investor awareness of Jackpot. Jackpot compensated INN a total of

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Jackpot Digital Inc. Nine months ended September 30, 2021 MD&A Form 51-102F1

JACKPOT DIGITAL INC. Form 51-102F1 – Management’s Discussion & Analysis Nine months ended September 30, 2021

CAD$20,000 over a contract period of six months, and Jackpot has compensated HE Capital USD$5,000 monthly over a contract period of three months.

As of July 11, 2021, the Company has engaged the services of Stanford & Turner Marketing Group (“Stanford & Turner”), of Vancouver, British Columbia to provide investor relations and digital advertising services to the company for a period of three months. Standord & Turner specializes in digital and corporate brand marketing services to enhance corporate visibility and retail investor awareness. Jackpot has paid Stanford & Turner $18,300 for their services.

As of July 16, 2021, the Company has engaged the services of North Equities (“North Equities”) of Toronto, Ontario to provide a 3-month marketing and consulting services to Jackpot. North Equities specializes in various social media platforms and facilitates greater awareness and widespread dissemination of the Company's news. In connection with the Contract, the Company has paid North Equities Corp. $30,000 and has granted 100,000 stock options exercisable at $0.21 per share to North Equities for a one-year period.

As of November 12, 2021, the Company has entered into an Agreement with Maxim Group, LLC., of New York, for the provision of advisory and investment banking services for a one-year term.

Spinout of Online Gaming Software

Yo Eleven was formed in connection with Jackpot’s strategic reorganization of its business by way of a spinout of its online gaming software to its then wholly-owned subsidiary Yo Eleven.

Jackpot and Yo Eleven entered into an arrangement agreement dated June 28, 2021 (the “Arrangement”) setting out the terms and conditions of the Arrangement. The Arrangement was carried out by statutory arrangement under Division 5 of Part 9 of the BCBCA. Further particulars of the Arrangement are available for review under Jackpot's profile on SEDAR (www.sedar.com) and on the Company’s website (www.jackpotdigital.com).

Pursuant to the Arrangement, effective as of November 4, 2021, Jackpot has spun out its online gaming software to Yo Eleven in consideration for 16,967,131 Yo Eleven common shares issued to Jackpot’s registered and beneficial shareholders as of a November 1, 2021 (the "Record Date") on the basis of one (1) Yo Eleven common share for every five (5) Jackpot common shares held by Jackpot shareholders.

As a result of the completion of the Arrangement, as of November 4, 2021, Yo Eleven has become a reporting issuer in the Provinces of British Columbia and Alberta. Furthermore, Yo Eleven owns all of Jackpot's former online gaming software. The Yo Eleven shares issued to Jackpot's shareholders pursuant to the Arrangement are not currently listed on any stock exchange. Management of Yo Eleven expects to seek a listing of the Yo Eleven shares on a stock exchange in the future, subject to raising the required capital and meeting the applicable listing requirements.

Shares for Debt

The Company has entered into debt settlement agreements with certain creditors regarding accrued interest on the converted Debentures (the “Company’s Creditors”) whereby the Company’s Creditors have agreed to accept common shares in the capital of the Company as full and final settlement of the accrued interest in the amount of $34,990.96 owing to the Company’s Creditors. Pursuant to the debt settlement agreements, the Company has issued to the Company’s Creditors 124,967 common shares in the capital of the Company at a deemed price of $0.28 per share. The transaction was approved by the TSXV. All securities issued are subject to a hold period which expires on December 24, 2021.

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Jackpot Digital Inc. Nine months ended September 30, 2021 MD&A Form 51-102F1

JACKPOT DIGITAL INC. Form 51-102F1 – Management’s Discussion & Analysis Nine months ended September 30, 2021

Revenues

For the nine months ended September 30 2021, the Company has recorded table sales revenue of $85,505 (September 30, 2020: $70,863), and Electronic gaming tables of $117,723 (September 30, 2020: $457,561). The decrease in Electronic gaming table revenue is due to the COVID-19 pandemic and to the reduction in cruise ship sailings.

Royalty expense

For the nine months ended September, 30 2021, the Company had royalty expense of $20 as compared to royalty expense of $8,233 during the nine months ended September 30, 2020. The decrease is due to the expiration of the royalty as of April 30, 2021.

Cost of Sales

For the nine months ended September 30, 2021, the cost of sales was $123,013 as compared to $220,249 during the nine months ended September 30, 2020. The decrease of the cost of sales is due to the decrease of the Company’s revenues.

Gross Profits

For the nine months ended September 30, 2021, the Company has recorded gross profits of $80,195 as compared to $299,942 during the nine months ended September 30, 2020. The reduction of the gross profits is a direct result of the loss of revenues due to COVID-19 travel restrictions.

Expenses

For the nine months ended September 30, 2021, operating and other expenses were $4,056,477 as compared to $3,168,238 during the nine months ended September 30, 2020. The difference is attributable mainly to an increase in salaries, consulting fees and advertising and promotion.

Net Loss and Comprehensive Loss

During the nine months ended September 30, 2021, the Company had a net loss and comprehensive loss of $3,976,282 or $0.06 per share (weighted average) as compared to a net loss and comprehensive loss of $2,868,296 or $0.22 per share (weighted average) in the same period in 2020. During the nine months ended September 30, 2021, the Company’s weighted average number of common shares was 65,941,252 as compared to 12,919,304 in the same period in 2020.

Liquidity and Capital Resources

Presently, the Company does not have sufficient funds to continue its operations uninterruptedly. In order for the Company to be efficient, the Company requires new funding so as to be able to meet the Company’s operational expenses, pay its liabilities promptly, and expand its operations to increase its revenues. New funding for the Company may or may not be available to the Company. Should the Company’s revenues decline, or should the Company lose its major customer, then it will be difficult for the Company to raise additional funds.

The Company intends to seek equity and/or debt financing through private placements and/or public offerings and/or loans. In the past, the Company has been successful in securing equity and debt financings in order to conduct its operations uninterruptedly. While the Company does not give any assurances whatsoever that in the future it will continue being successful in securing equity and/or debt financings in order to conduct its operations uninterruptedly, it is the Company’s intention to pursue these methods for future funding of the Company.

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Jackpot Digital Inc. Nine months ended September 30, 2021 MD&A Form 51-102F1

JACKPOT DIGITAL INC. Form 51-102F1 – Management’s Discussion & Analysis Nine months ended September 30, 2021

As at September 30, 2021, the Company’s total assets were $5,760,750 as compared to $3,497,140 for the corresponding period in 2020. The Company’s total liabilities were $9,802,272 as compared to $10,936,986 for the corresponding period in 2020. The Company has not paid any dividends.

As the Company has been significantly impacted by the COVID-19 Pandemic, during the nine months ended September 30, 2021, the Company applied for and has received a total of $290,197 (December 31, 2020: $175,605) in relation to the Canada Emergency Wage Subsidy (CEWS). Furthermore, during the nine months ended September 30, 2021, the Company applied for Canada Emergency Rent Subsidy and has received a total of $82,496.

As at September 30, 2021, the Company had:

• Cash and cash equivalents of $810,105 as compared to cheques issued in excess of funds on deposit of $10,553 at September 30, 2020 (December 31, 2020: $438,642). The increase is a result of financing activities and the exercise of common share purchase warrants.

• Accounts receivable of $ 133,440 as compared to $71,929 at September 30, 2020 (December 31, 2020: $21,261).

• Prepaid expenses and deposits of $85,780 as compared to $60,938 at September 30, 2020

• (December 31, 2020: $63,455).

• Deposits for Gaming systems of $nil as compared to $24,948 at September 30, 2020 (December 31, 2020: $24,948).

• Gaming systems of $2,421,296 as compared to $2,460,873 at September 30, 2020 (December 31, 2020: $2,297,502).

• Equipment of $74,472 as compared to $51,895 at September 30, 2020 (December 31, 2020: $48,803).

• Intangible assets of $1,656,229 as compared to $673,149 at September 30, 2020 (December 31, 2020: $nil). The increase is attributable to the acquisition of 52 Gaming, LLC.

• Right of Use Assets of $330,558 as compared to $nil at September 30, 2020 (December 31, 2020: $nil).

• Investment of $38,000 as compared to $nil at September 30, 2020 (December 31, 2021: $nil).

• Investment in 37 Capital of $143,122 as compared to $4,064 at September 30, 2020 (December 31, 2020: $3,899).

Operating Activities

During the nine months ended September 30, 2021, the Company used $2,277,946 of cash for operating activities as compared to $453,385 of cash for operating activities in the corresponding period of 2020.

Financing Activities

During the nine months ended September 30, 2021, the Company received $3,402,436 cash from financing activities as compared to $393,484 cash from financing activities in the corresponding period of 2020.

Investing Activities

During the nine months ended September 30, 2021, the Company used cash in investing activities of $753,059 as compared to $11,775 of cash provided by investing activities in the corresponding period of 2020.

Capitalization

In order for the Company to increase its revenues, the Company must reduce or preferably eliminate

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Jackpot Digital Inc. Nine months ended September 30, 2021 MD&A Form 51-102F1

JACKPOT DIGITAL INC. Form 51-102F1 – Management’s Discussion & Analysis Nine months ended September 30, 2021

its outstanding debts as soon as possible, must increase its workforce and the production of its Jackpot Blitz[TM] ETGs, and must dedicate more resources to marketing and promotion of the Company’s products and services.

During the year ended December 31, 2020, the Company has incurred a net loss and comprehensive loss of $3,829,763 (December 31, 2019: $1,670,588), has limited revenues, has outstanding liabilities, and has no assurances that sufficient funding will be available to continue operations for an extended period of time.

During the nine months ended September 30, 2021, and up to the date of this MD&A, the following transactions have occurred:

• (i) During April and May 2021, the Company closed the non-brokered private placement financing which was announced on March 12 and 24, 2021 whereby Jackpot issued 8,082,500 units of the Company at $0.20 per unit for gross proceeds of $1,616,500. Each Jackpot unit consists of one common share of the Company and one share purchase warrant to acquire an additional common share of the Company at the price of $0.27 per share until April 7 (first tranche), May 4 (second tranche), and May 25, 2026 (third tranche). All securities that have been issued in respect to this private placement were subject to hold periods which have expired. Finder’s fees payable are $114,120 in cash of which $48,672 has been paid and the Company has issued 570,600 broker warrants exercisable at $0.27 per share for a period of two years to

• (ii) During March 2021, the Company closed the non-brokered private placement financing which was announced on February 11, 2021 whereby Jackpot issued 10,000,000 units of the Company at $0.18 per unit in two tranches for gross proceeds of $1,800,000. Each Jackpot unit consists of one common share of the Company and one share purchase warrant to acquire an additional common share of the Company at the price of $0.25 per share until March 3, 2026 for the first tranche and March 10, 2026 for the second tranche. All securities that have been issued in respect to this private placement were subject to hold periods which have expired. The Company has paid finder’s fees of $94,683 in cash and has issued 526,018 broker warrants exercisable at $0.25 per share for two years to arm’s length parties.

Warrants

As at September 30, 2021, 66,280,516 warrants were outstanding with weighted average price of $0.55 per warrant (September 30, 2020:12,473,174 warrants were outstanding with weighted average price of $2.36 per warrant). Subsequent to the nine months ended September 30, 2021, a total of 489,830 warrants exercisable at $2.50 per share expired unexercised, a total of 216,000 warrants exercisable at $0.10 per share were exercised and a total of 290,110 warrants exercisable at prices ranging from $0.20 to $0.35 per share were cancelled. As of the date of this MD&A, a total of 65,284,576 warrants are outstanding.

Should any warrants be exercised by any party, then any funds received by the Company shall be used for general working capital purposes. However, there are no assurances whatsoever that any warrants will be exercised.

Stock Options

As at September 30, 2021, 3,325,911 stock options were available for granting under the 10% Rolling Stock Option Plan (September 30, 2020: 764,430). As at September 30, 2021, there were 5,138,661 stock options outstanding with a weighted average exercise price of $0.20 per share (September 30, 2020: 527,500 stock options outstanding with a weighted average exercise price of $1.51 per share). Subsequent to the nine months ended September 30, 2021, a total of

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Jackpot Digital Inc. Nine months ended September 30, 2021 MD&A Form 51-102F1

JACKPOT DIGITAL INC. Form 51-102F1 – Management’s Discussion & Analysis Nine months ended September 30, 2021

300,000 stock options exercisable at $0.175 per share were granted to an employee and an officer. As at the date of this MD&A, a total of 5,438,661 stock options are outstanding.

Should any outstanding stock options be exercised by any party, then any funds received by the Company shall be used for general working capital purposes. However, there are no assurances whatsoever that any stock options will be exercised.

LOANS PAYABLE AND DEBENTURES

Loans payable

Loans payable
			Accrued
		Principal	Interest	Total
Balance at December 31, 2019	$	650,000 $	69,576 $	719,576
Additions		510,000	-	510,000
Equity component		(31,617)	-	(31,617)
Interest		-	108,690	108,690
Accretion		1,300	-	1,300
Repayment		(595,000)	(40,307)	(635,307)
Balance at December 31, 2020	$	534,683 $	137,959 $	672,642
Interest		-	19,354	19,354
Equity component & accretion reversal		30,317	-	30,317
Repayment		(565,000)	(150,036)	(715,036)
Balance,September 30,2021	$	-$	7,277$	7,277

Non-convertible secured debentures

During the year ended December 31, 2015, the Company entered into two non-convertible secured debenture agreements for an aggregate US$2,500,000 with one arm’s length party and one related party. The non-convertible secured debentures are secured against the Company’s assets. The non-convertible debenture agreements provide for a term of three years, maturing on August 4, 2018, and bear interest at 10% per annum, with interest compounding and payable quarterly. As additional consideration of the risk associated with the debenture, the Company issued 75,000 warrants to the lenders. Each warrant has a five-year expiry term and is exercisable into one common share at $20.00. On August 9, 2019, the maturity date of the convertible debenture with the arm’s length party was extended to July 1, 2021. The modification of maturity date was considered an extinguishment of the existing non-convertible debenture and a new non-convertible debenture was recognized as the modified terms were substantially different from the original terms. The difference between the fair value and carrying value on the extinguishment date was determined to be $656,727.

On September 23, 2020, an amendment agreement was entered into whereby the maturity date has been further extended to July 1, 2023 and the interest rate has been reduced from 10% to 7.5% per annum. As consideration, the Company issued 1,163,827 bonus warrants. Each warrant is exercisable into one common share at the price of $0.10 until July 21, 2023. The modification was considered an extinguishment of the existing non-convertible debenture and a new non-convertible debenture was recognized as the modified terms were substantially different from the original terms. The difference between the fair value and carrying value on the extinguishment date was determined to be $237,168. In addition, the Company was required to pay the lenders a combined royalty of 2% of gross revenues from electronic gaming tables. The royalty agreement expired on April 30, 2021.

10

Jackpot Digital Inc. Nine months ended September 30, 2021 MD&A Form 51-102F1

JACKPOT DIGITAL INC. Form 51-102F1 – Management’s Discussion & Analysis Nine months ended September 30, 2021

The liability component of the non-convertible debentures was recognized initially at the fair value of a similar liability that does not have attached warrants, which was calculated based on the application of a market interest rate of 25%. The difference between the face value of US$2,500,000 and the fair value of the non-convertible debentures of $2,386,286 represent the value of the warrants, which has been recognized as a component of equity.

As at September 30, 2021, the amount of $2,461,415 (December 31, 2020 - $2,346,880) has been recorded as the non-convertible secured debentures.

Convertible secured debentures

During the year ended December 31, 2016, the Company issued convertible secured debentures for gross proceeds of $2,000,000 (net proceeds of $1,753,111). The convertible secured debentures have a term of 12 months, bear simple interest at the rate of 12% per annum and payable on a quarterly basis. The principal amount of the convertible secured debentures were convertible into common shares of the Company at a price of $5.00 per share. In connection with the convertible secured debentures, the Company has paid a cash commission of $200,000 and a corporate finance fee of $30,000 plus HST and other expenses of $11,495 plus HST and has issued 60,000 broker warrants to Kingsdale Capital Markets Inc. (fair valued at $31,128). The broker warrants were exercisable into common shares of the Company at the price of $5.00 per share during the first year and at the price of $10.00 per share during the second year which have expired unexercised. The debentures are secured against the Company’s assets. On initial recognition, the amount of $101,601 was recorded as the equity portion of convertible secured debentures reserve and remained outstanding at September 30, 2021. The effective interest rate was 20%.

On August 9, 2019, the maturity date of the convertible secured debentures was extended to July 1, 2021. The modification of maturity date was considered an extinguishment of the existing convertible debentures with the conversion feature and a new debenture balance was recognized as the modified terms were substantially different from the original terms. The difference between the fair value and carrying value on the extinguishment date was determined to be $260,229. On September 23, 2020, an amendment agreement was entered into whereby the maturity date has been further extended to July 1, 2023 and the interest rate has been reduced from 10% to 7.5% per annum. As consideration the Company issued 836,173 bonus warrants. Each warrant is exercisable into one common share at the price of $0.10 until July 21, 2023. The difference between the fair value and carrying value on the extinguishment date was determined to be $248,084.

As at September 30, 2021, the Company paid $5,134 (September 30, 2020 - $nil) of accrued interest and repaid principal amounts totaling $8,000 (September 30, 2020 - $nil).

During August 2018, the Company entered into a convertible debenture with an arm’s length party for the principal amount of $328,000 which bears interest at the rate of 8% per annum and which was due and payable on October 30, 2018 (the “Term”). Subsequent to December 31, 2018, the Term was extended to July 15, 2019. As at September 30, 2021 the debenture is owing and is due on demand. As at September 30, 2021, the amount of $328,000 has been recorded as the liability portion of convertible debentures and the amount of $5,658 has been recorded as the equity portion of convertible secured debentures reserve. The effective interest rate was 20%.

11

Jackpot Digital Inc. Nine months ended September 30, 2021 MD&A Form 51-102F1

JACKPOT DIGITAL INC. Form 51-102F1 – Management’s Discussion & Analysis Nine months ended September 30, 2021

During June 2019, the Company entered into a convertible debenture with an arm’s length party for the principal amount of $100,000 which carried interest at the rate of 10% per annum and which was due and payable on June 21, 2021 (the “Term”). At any time prior to the expiry of the Term, all or part of the principal amount was convertible into units of the Company at the price of $1.00 per unit. Each Unit consists of one common share and one share purchase warrant. Each share purchase warrant shall be exercisable at the price of $2.50 per share for a period of two years. On initial recognition, the amount of $13,344 was recorded as the equity portion of convertible debenture. As at September 30, 2021, the Company has redeemed and paid out the principal amount of $100,000 plus the accrued interest.

During June 2020, the Company entered into unsecured convertible debenture agreements for gross proceeds of $446,000, of which $75,000 was received during the year ended December 31, 2019. The debentures bear interest at 10% per annum and have a maturity date of 36 months from closing. The debentures are convertible into the Company’s units at a conversion price of $0.06 per unit in Year 1 and at a conversion price of $0.10 per unit in Year 2 and Year 3. Each unit will consist of one common share and one share purchase warrant. Each share purchase warrant will be exercisable into one common share at a price of $0.10 per share for a period of three years from the closing of the debenture financing. A total of 500,000 compensation warrants which are exercisable into units at $0.06 per unit were issued in connection with this closing and were determined to have a fair value of $40,451. On initial recognition, the amount of $81,983 was recorded as the equity portion of convertible secured debentures reserve and remained outstanding at December 31, 2020. The effective interest rate was 20%. As at September 30, 2021, a total of $371,000 convertible debentures were converted at $0.06 per unit and the Company issued a total of 6,183,333 units in the capital of the Company. In addition, the Company has issued 124,967 common shares of the Company at a deemed price of $0.28 per common share in settlement of accrued interest totaling $34,990.96. The common shares issued are subject to a hold period expiring December 24, 2021. As of September 30, 2021, $75,000 of convertible debentures remain outstanding.

During August 2020, the Company entered into unsecured convertible debenture agreements for gross proceeds of $135,000. The debentures bore interest at the rate of 10% per annum and had a maturity date of 36 months from closing. The debentures were convertible at a conversion price of $0.10 per unit for three years. Each unit consisted of one common share and one share purchase warrant exercisable at the price of $0.10 per share for a period of three years from closing. On initial recognition, the amount of $24,816 was recorded as the equity portion of convertible debentures reserve. The effective interest rate was 20%. As of September 30, 2021, $15,000 debentures were converted into 150,000 units at $0.10 per unit, and the Company has redeemed and paid out the remaining $120,000 debentures plus the accrued interest.

Non-Convertible debenture

During February 2020, the Company entered into a debenture agreement with an arm’s length party for the amount of $100,000. The debenture bears interest at 10% per annum for a term of five years. A total of 100,000 share purchase warrants exercisable at $0.50 per share for five years were issued as bonus warrants in respect to this debenture. The Company paid $10,000 in cash commission. On initial recognition, $31,617 was recognized as the equity portion of the compound financial instrument, which was then offset by a deferred income tax recovery of $8,537. As of September 30, 2021, the Company has redeemed and paid out the principal amount of $100,000 plus the accrued interest.

Summary of Quarterly Results

The following are the results for the eight most recent quarterly periods, starting with the three-month quarterly period ended September 30, 2021:

12

Jackpot Digital Inc. Nine months ended September 30, 2021 MD&A Form 51-102F1

JACKPOT DIGITAL INC.

Form 51-102F1 – Management’s Discussion & Analysis Nine months ended September 30, 2021

For the Quarterly Periods ended		September 30, 2021	June 30, 2021	March 31, 2021	December 31, 2020
Total Revenues	$	93,505	23,249	86,475	82,828
Net income (loss) and comprehensive income (loss) for the period	$	(1,298,255)	(1,290,200)	(1,387,827)	(961,467)
Basic and diluted income (loss) per common share	$	(0.02)	(0.02)	(0.03)	(0.04)
For the Quarterly Periods ended		September 30, 2020	June 30, 2020	March 31, 2020	December 31, 2019
Total Revenues	$	76,117	7,831	444,476	462,057
Net income (loss) and comprehensive income (loss) for the period	$	(594,283)	(847,333)	(1,426,680)	(356,168)
Basic and diluted income (loss) per common share	$	(0.05)	(0.07)	(0.18)	(0.04)

Third Quarterly Results (September 30, 2021)

During the three months [third quarter] period ended September 30, 2021:

• The Company had a net loss and comprehensive loss of $1,298,255 or $0.02 per share as compared to a net loss and comprehensive loss of $594,283 or $0.05 per share in the same three months [third quarter] period of 2020.

• The Company’s total revenues were $93,505 as compared to total revenues of $76,117 in the same three months [third quarter] period of 2020.

• The Company’s total operating and other expenses were $1,334,213 as compared to total operating and other expenses of $607,006 in the same three months [third quarter] period of 2020.

Risks related to our Business

The Company, and the Securities of the Company, should be considered a highly speculative investment. The following risk factors should be given special consideration when evaluating an investment in any of the Company's Securities:

• General legislative risk

The Company’s business is heavily regulated.

13

Jackpot Digital Inc. Nine months ended September 30, 2021 MD&A Form 51-102F1

JACKPOT DIGITAL INC. Form 51-102F1 – Management’s Discussion & Analysis Nine months ended September 30, 2021

Although management believes that the revenues generated from the Company’s gaming products represent lawful business, there is the risk that the legality may be challenged by Canadian or other legal authorities.

Changes in gaming legislations in any jurisdiction, or the Company’s inability to obtain, maintain and comply with all applicable and required licenses, permits, and certifications can adversely affect the financial affairs of the Company.

• Competition

The marketplace for the Company’s gaming product is constantly undergoing changes, is intensely competitive and is subject to changes in customer preferences.

• Internet and system infrastructure viability

Any changes in the internet’s role as the premier computer network information service or any shutdown of internet services by significant internet service providers may have an adverse material impact on the Company’s ability to generate revenues. Furthermore, the Company can be severely and adversely affected from power failures, internet slowdowns or failures, software slowdowns or failures or hackings.

• Reliance on key personnel

The Company relies heavily on its employees, the loss of any of whom could have an adverse effect on the Company.

• Customer loyalty

The Company also relies on its licensees for the operation of the Company’s gaming product, the loss of any of which could have an adverse effect on the affairs of the Company.

• Payment processing

Changes in policies of companies, financial institutions or banks, that handle credit card transactions and/or other types of financial transactions such as cryptocurrency, can have an adverse impact on the business and financial affairs of the Company.

• Foreign exchange rates

The profitability of the Company can be affected by fluctuations in the exchange rate of the US Dollar in relation to the Canadian Dollar.

• Reliance on Major Customer

The Company relies heavily on its major customer. In the event that the Company loses its major customer, then it will have an adverse effect on the Company.

• Price volatility and liquidity of the Company’s securities

The market price of the Company’s common shares and warrants have experienced considerable volatility and may continue to fluctuate in the future. Factors such as the Company’s quarterly and annual results, changes in existing legislation, new legislation, technological changes and general market conditions may adversely affect the market price of the Company’s common shares and warrants. There is a limited trading market for the

14

Jackpot Digital Inc. Nine months ended September 30, 2021 MD&A Form 51-102F1

JACKPOT DIGITAL INC. Form 51-102F1 – Management’s Discussion & Analysis Nine months ended September 30, 2021

Company’s common shares and warrants, and the ability of investors to sell their shares and/or warrants or the price at which those shares and/or warrants may be sold cannot be assured.

• Growth management

If the Company’s gaming product gains traction in the market, rapid growth may occur which can result in certain strains on the Company.

• Dilution

There are a number of outstanding securities and agreements pursuant to which common shares of the Company may be issued in the future. This would result in further dilution to the Company’s shareholders.

• Revenues and Dividends

While the Company generates some nominal revenues, the Company has not yet established a long-term pattern of consistently generating meaningful revenues. The Company has not paid any dividends in the past. The Company intends to retain its earnings in order to finance growth.

• Under Capitalized

The Company has outstanding debts, has working capital deficiency, has limited revenues, and has no assurances that sufficient funding will be available for the Company to continue its operations for an extended period of time.

• Disruption in Trading

Trading in the common shares and warrants of the Company may be halted or suspended or may be subject to cease trade orders at any time and for any reason, including, but not limited to, the failure by the Company to submit documents to the Regulatory Authorities within the required time periods.

• Management Resources

There is the possibility that Jackpot’s management’s focus and resources may be distracted from Jackpot’s operations because of Yo Eleven.

• Coronavirus (COVID-19) Pandemic

On January 30, 2020, the World Health Organization declared the coronavirus outbreak (COVID19) a “Public Health Emergency of International Concern” and on March 11, 2020, declared COVID-19 a Pandemic. The current COVID-19 Pandemic is significantly impacting the global economy and commodity and financial markets. The full extent and impact of the COVID-19 Pandemic is unknown and to date has included extreme volatility in financial markets, a slowdown in economic activity, extreme volatility in commodity prices and has raised the prospect of an extended global recession. As well, as efforts are undertaken to slow the spread of the COVID-19 Pandemic, the operation and development of projects may be impacted as governments have declared states of emergency or taken other actions. If the operation or development of one of the operations of the Company is suspended, it may have a material adverse impact on the Company’s results of operations, and financial condition. The broader impact of the COVID-19 Pandemic on investors, businesses, the

15

Jackpot Digital Inc. Nine months ended September 30, 2021 MD&A Form 51-102F1

JACKPOT DIGITAL INC. Form 51-102F1 – Management’s Discussion & Analysis Nine months ended September 30, 2021

global economy or financial and commodity markets may also have a material adverse impact on the Company’s results of operations and financial condition.

Previously, the majority of the Company's revenues were generated from licensing the Jackpot Blitz™ ETG platform to the cruise ship industry. As a result of the cruise ship industry’s slowdown or suspension of operations due to the COVID-19 Pandemic, the Company's revenues have been, and will continue to be, negatively impacted for the duration of the cruise ship industry’s slowdown or suspension of operations. Furthermore, while the operations of the cruise ship industry have slowly resumed, uncertainty still remains. The Company expects future revenues that may be generated from the cruise ship segment of its business shall be unpredictable and shall continue to be negatively affected by the ongoing COVID-19 Pandemic.

In regards to the land-based casino industry, the Company has been revisiting its expansion plans which were negatively impacted by the Pandemic. Due to the unpredictability of the Covid-19 Pandemic, there are no assurances that the Company’s revised expansion plans shall materialize as anticipated.

• Research and development risk

Research and development carries an element of risk because it involves trying new and untested ideas. New or modified products or services may prove to be more difficult or costly to develop than anticipated due to engineering challenges encountered internally or with external vendors. Additionally, delays in commercializing new products and services may lead to a decrease in projected revenue.

The primary research and development risks for the Company include the following:

• a. Custom large high-performance touchscreen. The custom touchscreen used in the Company’s new product uses a combination of cutting-edge hardware and proprietary software techniques that are geared specifically for gesture-based game play. Due to the unique and new nature of this technology, the Company cannot realistically estimate the longevity and reliability of the touchscreen in a 24/7 casino environment. With the current shortage of display devices around the world, the custom large high-performance touchscreen has a long lead time, 4+ months, and if the demand of the product changes, the Company may have difficulty meeting customer demand or hold a costly raw material in inventory until the demand is met which impacts the company’s cash flow. The Company expects to mitigate this risk as it gains more operational experience with the touchscreen and newer technologies become available in the global touchscreen industry.

• b. Product safety testing and certification. New products must meet Canadian Standards Association (CSA) and/or Underwriters Laboratories (UL) standards to be used in the USA and Canada. Any scheduling issues or abnormal delays experienced by the 3[rd] party testing company will result in delays for launching the regulated version of the product.

The Company has received its safety testing and certification reports for the Jackpot Blitz™ ETG Platform under the applicable CSA, UL, and CE standards.

• c. Electromagnetic compatibility (EMC) testing and certification. New products must have a Federal Communications Commission (FCC) "Declaration of Conformity" label for it to be used in the USA and Canada. Any scheduling issues or abnormal delays experienced by the 3rd party testing company will result in delays for launching the regulated version of the product.

16

Jackpot Digital Inc. Nine months ended September 30, 2021 MD&A Form 51-102F1

JACKPOT DIGITAL INC. Form 51-102F1 – Management’s Discussion & Analysis Nine months ended September 30, 2021

The Company has received its certification reports and Declaration of Conformity label for the Jackpot Blitz™ ETG platform under the applicable FCC and CE EMC standards.

• d. Gaming device testing and certification. New products must undergo both hardware and software testing to be permitted for use in a regulated casino environment. Gaming products must comply with Gaming Labs International (GLI) standards in most gaming jurisdictions in the USA and Canada. Some jurisdictions, such as Ontario, have their own testing standards. Any scheduling issues or abnormal delays experienced by the 3[rd] party testing company will result in delays for launching the regulated version of the product.

The Company has received its Certification Document from Gaming Laboratories International (“GLI®”) that the Jackpot Blitz™ ETG platform is compliant with the requirements of GLI-24 and the National Indian Gaming Commission’s Class II Gaming Systems standard. Jackpot Blitz is also compliant with the applicable requirements from GLI-12, GLI-13, GLI-16 and GLI-21.

Related Party Transactions

The Company shares office space and certain expenses with 37 Capital, a company related by certain common officers and directors.

37 Capital is related to the Company by virtue of the fact that 37 Capital’s CEO, namely Jake H. Kalpakian, is the Chairman, President and CEO of the Company, and a director of 37 Capital namely, Bedo H. Kalpakian, was the former Chairman and CFO of the Company. Furthermore, Gregory T. McFarlane and Neil Spellman are directors of both the Company and 37 Capital, and Neil Spellman is the CFO of both the Company and 37 Capital.

Amounts payable to directors are for expenses incurred on behalf of the Company and/or for funds that have been lent to the Company and are payable on demand.

On July 1, 2020, Kalpakian Bros. of B.C. Ltd. (“Kalpakian Bros.”) and Jackpot entered into a new management services agreement (the “New Management Services Agreement”) whereby Kalpakian Bros. shall provide management services to Jackpot for a period of five years (the “Term”) at a monthly rate of $33,000 plus applicable taxes. Kalpakian Bros. is owned by Jake H. Kalpakian. During the nine months ended September 30, 2021, Jackpot has paid management fees totaling $297,000 to Kalpakian Bros. (September 30, 2020: $297,000).

During the nine months ended September 30, 2021 and 2020, the Company incurred the following related party transactions:

		2021		2020
Rent and shared office expenditures charged	$	18,000	$	18,000

As at September 30, 2021, due from related parties consists of $27,101 receivable from 37 Capital for rent and shared office expenditures.

As at September 30, 2021, there is $40,617 due from (September 30, 2020- $29,035) key management.

The amounts are non-interest bearing and have no fixed repayment terms.

17

Jackpot Digital Inc. Nine months ended September 30, 2021 MD&A Form 51-102F1

JACKPOT DIGITAL INC. Form 51-102F1 – Management’s Discussion & Analysis Nine months ended September 30, 2021

Pursuant to a debt settlement agreement dated December 11, 2020, which the Company entered into with 37 Capital, the Company acquired 597,380 common shares in the capital of 37 Capital at a deemed price of $0.25 per common share to settle outstanding debt in the amount of $149,345. The securities issued were subject to a hold period which expired on May 26, 2021.

Office Support Services

37 Capital has entered into an agreement for office support services with the Company. Under the office support services agreement, 37 Capital is entitled to receive office support services from the Company at a monthly rate of $1,000 plus applicable taxes. The agreement expires on April 30, 2022. Either Jackpot or 37 Capital may terminate this agreement by giving each other a three months notice in writing.

Office Lease

During June 2021, the Company entered into an office lease agreement with an arm’s length party in respect to 1,293 square feet of office space in Vancouver, BC commencing August 1, 2021 until July 31, 2023. The Company pays a monthly rent of $4,500 and applicable taxes.

The Company and 37 Capital have agreed that 37 Capital shall pay a monthly rent of $1,000 plus applicable taxes to the Company, and either the Company or 37 Capital may terminate this agreement by giving each other a three months’ notice in writing.

Insider Participation

In respect to the Non-Convertible Secured Debentures issued to 30 Rock Management Inc. (“30 Rock”), for further particulars, please see Loans Payable and Debentures in this MD&A. The Company is related to 30 Rock by virtue of the fact that 30 Rock is owned by the President and CEO of the Company.

In respect to the Company’s Rights Offering, which was completed during September 2019, as compensation for providing the standby guarantee, Jake Kalpakian received 208,333 bonus warrants exercisable at $1.00 per share until September 26, 2024.

In respect to the unsecured convertible debenture financing which closed on August 7, 2020, Jake Kalpakian subscribed for the amount of $120,000. As of the date of this MD&A the $120,000 convertible debenture has been redeemed and has been paid out.

In respect to the Company’s Rights Offering, which was completed during November 2020, as compensation for providing the standby guarantee, Jake Kalpakian received 250,000 bonus warrants exercisable at $0.10 per share until November 20, 2025.

FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

• (a) Risk management overview

The Company's activities expose it to a variety of financial risks, including credit risk, liquidity risk and market risk. This note presents information about the Company's exposure to each of the above risks, the Company's objectives, policies, and processes for measuring and managing risk, and the Company's management of capital. The Company employs risk management strategies and policies to ensure that any exposure to risk is in compliance with the Company's business objectives and risk tolerance levels. While the Board of Directors has the overall responsibility for the Company's risk management framework, the Company's management has the responsibility to administer and monitor these risks.

18

Jackpot Digital Inc. Nine months ended September 30, 2021 MD&A Form 51-102F1

JACKPOT DIGITAL INC. Form 51-102F1 – Management’s Discussion & Analysis Nine months ended September 30, 2021

(b) Fair value of financial instruments

The fair values of cash and cash equivalents, accounts receivable, due from related parties, accounts payable and accrued liabilities, lease liability, loans payable, due to related parties, interest payable, and refundable subscription approximate their carrying values due to the short-term maturity of these instruments. The non-convertible secured debentures and convertible debentures are classified as Level 3 financial instruments.

The significance of inputs used in making fair value measurements are examined and classified according to a fair value hierarchy. The levels of the fair value hierarchy are as follows:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly;

Level 3: Inputs for assets or liabilities that are not based on observable market data.

(c)

Credit risk

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

The financial instruments that potentially subject the Company to a significant concentration of credit risk consist of cash and cash equivalents, and accounts receivable. The Company mitigates its exposure to credit loss associated with cash by placing its cash and cash equivalents in a major financial institution. The Company’s cash and cash equivalents as at September 30, 2021, and 2020 are as follows:

		2021		2020
Cash and Cash Equivalents consists of:
Cash (Cheques issued in excess of funds on
deposit)	$	292,855	$	(27,803)
Term deposit		17,250		17,250
Variable Rate GIC		500,000		-
	$	810,105	$	(10,553)

As at September 30, 2021, the Company had cashable term deposits of $17,250 (September 30, 2020 - $17,250) readily convertible into cash, maturing July 31, 2022 with an annual interest rate of 0.60%. As of September 30, 2021, the Company had variable rate GIC of $500,000 readily convertible into cash, maturing on March 9, 2022 with an annual interest rate of 0.25%.

To mitigate credit risk on the Company’s trade receivables, the Company regularly reviews the collectability of the accounts receivable to ensure there is no indication that these amounts will not be fully recoverable.

(d) Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they are due. The Company's approach to managing liquidity is to ensure that it will have sufficient liquidity to meet its liabilities when due.

19

Jackpot Digital Inc. Nine months ended September 30, 2021 MD&A Form 51-102F1

JACKPOT DIGITAL INC. Form 51-102F1 – Management’s Discussion & Analysis Nine months ended September 30, 2021

At September 30, 2021, the Company has cash and cash equivalents of $810,105 (December 31, 2020 - $438,642) available to apply against short-term business requirements and current liabilities of $5,228,461 (December 31, 2020 - $5,134,249). All of the liabilities presented as accounts payable and accrued liabilities and due to related parties are due within 90 days of September 30, 2021. As at September 30, 2021, all of the Company’s debentures have maturity dates between one and three years. The Company will be required to raise additional capital in order to fund operations for the next twelve months.

(e) 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 objective of market risk management is to manage and control market risk exposures within acceptable parameters while optimizing return on capital.

(i) Currency risk

The Company is exposed to foreign currency risk and has significant financial assets and liabilities denominated in US dollars. The Company has not entered into any foreign currency contracts to mitigate this risk. As at September 30, 2021, the Company is exposed to currency risk for its US dollar equivalent of financial assets and liabilities denominated in currencies other than Canadian dollars as follows:

		Held in US	Held in US	dollars
		(stated in Canadian dollars)
	September 30,		December 31,
		2021		2020
Cash	$	1,869	$	67
Accounts receivable		98,617		1,677
Accounts payable and accrued liabilities		(725,800)		(336,285)
Interest payable		(1,922,601)		(1,663,882)
Non-convertible secured debentures		(2,461,415)		(2,346,880)
Net financial liability	$	(5,009,330)	$	(4,345,303)

Based upon the above net exposure as at September 30, 2021 and assuming all other variables remain constant, a 2% (September 30, 2020 - 4%) depreciation or appreciation of the US dollar relative to the Canadian dollar would result in a change of approximately $100,187 (December 31, 2020 - $86,906) in the Company’s net loss and comprehensive loss.

(ii) Interest rate risk

Interest rate risk is the risk that future cash flows will fluctuate as a result of changes in market interest rates. Interest earned on cash and cash equivalents is at nominal interest rates, and therefore the Company does not consider interest rate risk to be significant.

20

Jackpot Digital Inc. Nine months ended September 30, 2021 MD&A Form 51-102F1

JACKPOT DIGITAL INC. Form 51-102F1 – Management’s Discussion & Analysis Nine months ended September 30, 2021

As at September 30, 2021, the interest rate on the non-convertible secured debentures, loans payable, and convertible debenture balances have fixed interest rates. As such, the Company is exposed to interest rate price risk to the extent of these financial liabilities.

• (iii) Other price risk

Other price risk is the risk that the fair or future cash flows of a financial instrument will fluctuate due to changes in market prices, other than those arising from interest rate risk. The Company is not exposed to significant other price risk.

Transaction with 37 Capital Inc.

As at December 31, 2018, the Company had a controlling interest of approximately 49% of 37 Capital’s issued and outstanding shares. During the year ended December 31, 2019, the Company sold 680,000 common shares in the capital of 37 Capital through the facilities of the Canadian Securities Exchange (CSE) for gross proceeds to the Company of $170,580 thereby reducing its controlling interest to approximately 0.70% of 37 Capital’s issued and outstanding shares and recorded $326,150 in non-controlling interest as a result of the decrease in interest in 37 Capital. As a result of the sale, the Company determined that control of 37 Capital ceased effective September 30, 2019 and, as such, the assets, liabilities and non-controlling interest of 37 Capital were derecognized. On deconsolidation, the Company recognized assets of $127,262 (including a derecognition of $400 in cash and cash equivalents) and derecognized liabilities of $1,009,241 and non-controlling interest of $1,000,834, resulting in a gain on deconsolidation of $135,669 being recorded during the year ended December 31, 2019. During January 2021, the Company acquired 597,380 common shares of 37 Capital pursuant to a debt settlement agreement dated December 11, 2020. As at September 30, 2021, the Company has approximately 13.51% of 37 Capital’s issued and outstanding shares.

Off-balance sheet arrangements

The Company does not have any off-balance sheet arrangements.

Significant Accounting Policies

All of the Company’s significant accounting policies and estimates are included in Note 4 of the Company’s condensed interim financial statements for the nine months ended September 30, 2021, and 2020.

Capital Stock

Authorized share capital: Unlimited number of common shares without par value Unlimited number of preferred shares without par value

21

Jackpot Digital Inc. Nine months ended September 30, 2021 MD&A Form 51-102F1

JACKPOT DIGITAL INC.

Form 51-102F1 – Management’s Discussion & Analysis Nine months ended September 30, 2021

Outstanding Share Data	Common shares	Number of Preferred Shares	Exercise ($) Price per common share	Expiry Dates
Issued and Outstanding as November 29, 2021	84,860,716	Nil
Warrants as at November 29, 2021	2,942153 323,750 70,000 34,600 85,000 30,000 105,355 38,900 147,860 6,439,656 333,333 100,000 27,378,606** 500,000 1,248,000 2,000,000 450,000 102,564 85,106 2,000,000 71,429 2,730,555 7,211,668 72,000 454,018 1,350,000 150,000 76,923 3,692,000 243,360 100,000 4,290,500 327,240 65,184,576		$5.00 $5.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $5.00 $1.00 $1.00 $0.50 $0.10 $0.10 $0.10 $0.10 $0.10 $1.95 $0.235 $0.105 $0.28 $0.25 $0.25 $025 $0.25 $0.10 $0.10 $0.26 $0.27 $0.27 $0.27 $0.27 $0.27	January 20, 2022 January 20, 2022 August 21, 2022 Sept 13, 2022 Nov 28, 2022 Dec 1, 2022 Jan 3, 2023 Jan 24, 2023 June 22, 2023 Sept 26, 2024 Sept 26, 2024 February 19, 2025 November 20, 2025 November 20, 2025 December 15,2022 July 1,2023 January 29, 2026 December 31,2025 January 31, 2026 February 10, 2026 March 1, 2026 March 3, 2026 March 10, 2026 March 3, 2023 March 10, 2023 June 10, 2023 August 7, 2023 April 1, 2026 April 7, 2026 April 7, 2023 May 4, 2026 May 25, 2026 May 25,2023
Compensation Broker Warrants. Entitles the Holder to purchase one unit at $0.06 per unit. Each Unit shall consist of one common share and one share purchase warrant. Each warrant is exercisable at $0.10 per share for three years.	100,000		$0.10	June 10, 2023
Stock Options as at November 29, 2021	80,000 400,000 400,000 3,858,661 100,000		$0.20 $0.20 $0.245 $0.20 $0.21	Dec 16, 2022 Jan 13, 2023 April 21, 2023 Jan 13, 2024 August18,2022

22

Jackpot Digital Inc. Nine months ended September 30, 2021 MD&A Form 51-102F1

JACKPOT DIGITAL INC. Form 51-102F1 – Management’s Discussion & Analysis Nine months ended September 30, 2021

	300,000 300,000 5,438,661		$0.21 $0.175	August 18, 2024 October 20, 2024
Fully Diluted as at November 29, 2021	155,583,953

trading on the TSX.V under the symbol “JJ.WT. A” *trading on the TSX.V under the symbol “JJ.WT. B”

*trading on the TSX.V under the symbol “JJ.WT.C”

Director Approval

The contents of this MD&A and the sending thereof to the Shareholders of the Company have been approved by the Company’s Board of Directors.

Outlook

The Company’s new ETG platform, Jackpot Blitz[TM] , continues to generate interest from numerous parties and the Company is working to continuously improve the Jackpot Blitz™ ETG and open new markets for the Company’s products. However, the COVID-19 Pandemic continues to negatively impact the Company and the cruise and gaming industries as a whole.

The Company is working on getting the Jackpot Blitz[TM ] certified with the Gaming Labs International (GLI) standard, GLI-11. Receiving the certification of GLI-11 on the Jackpot Blitz™ ETG shall open up additional land-based casino jurisdictions which the Jackpot Blitz[TM] could not previously enter with its current GLI-24 certification. Management is optimistic that once the subject certification is obtained by Jackpot, and the cruise ship industry and land-based casinos resume their operations and are fully operational, then the Company’s revenues should increase.

23

Jackpot Digital Inc. Nine months ended September 30, 2021 MD&A Form 51-102F1