CardioComm Solutions, Inc. — Management Reports 2021

Aug 31, 2021

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CardioComm Solutions, Inc.

Management’s Discussion and Analysis

For the quarter ended 30 June 2021

Management’s Discussion and Analysis Financial Condition and Results of Operations

Background

This discussion and analysis of financial position and results of operations is prepared as of 26 August 2021 for the period ended 30 June 2021 and should be read in conjunction with the audited financial statements of CardioComm Solutions, Inc. (“CardioComm” or the “Company”) for the year ended 31 December 2020 and the unaudited financial statements for the quarter ended 30 June 2020. The unaudited financial statements have been prepared in accordance with international Financial Reporting Standards (IFRS). Except as otherwise disclosed, all dollar figures included herein, and the following Management Discussion and Analysis (MD&A) are quoted in Canadian dollars. Additional information relevant to the Company’s activities can be found on SEDAR at www.sedar.com.

The Company is a reporting issuer in British Columbia, Alberta, and Ontario, and trades on the TSX Venture Exchange under the symbol “EKG”. The content of this MD&A has been approved by the board of directors of the Company (the Board), on the recommendation of its Audit Committee.

CAUTIONARY STATEMENT ON FORWARD LOOKING INFORMATION

This Management Discussion and Analysis may include forward‐looking statements with respect to business plans, activities, prospects, opportunities, and events anticipated or being pursued by the Company and the Company’s future results. Although the Company believes the assumptions underlying such statements to be reasonable, any of the assumptions may prove to be incorrect. The anticipated results or events upon which current expectations are based may differ materially from actual results or events. Therefore, undue reliance should not be placed on such forward‐looking information. A number of risks and uncertainties could cause actual results to differ materially from those expressed or implied by the forward‐looking statements, including: (1) a downturn in general economic conditions in North America and internationally; (2) the uncertainty as to product development and commercialization milestones; (3) the uncertainty as to the regulatory approval of the Company’s technology or intellectual property; (4) the risk that the Company does not execute its business plan; (5) inability to retain key employees, (6) inability to finance operations and growth; and, (7) other factors beyond the Company's control.

Forward‐looking statements speak only as of the date of this MD&A and actual results could differ materially from those anticipated in the forward‐looking statements because of several factors. Investors should not place undue reliance on forward‐ looking statements as the plans, intentions, or expectations upon which they are based may not occur. The Company does not assume responsibility for the accuracy and completeness of the forward‐looking statements set out in this MD&A and, subject to applicable securities laws, does not undertake any obligation to publicly revise these forward‐looking statements to reflect subsequent events or circumstances. The forward‐looking statements contained herein are expressly qualified by this cautionary statement.

Overall Performance

Financial Condition for the second quarter:

• Q2 2021 revenue was $153,754, a decrease of 14.3% as compared to $179,420 in Q2 2020.

• Q2 2021 net loss and comprehensive loss was $117,632, compared to a net loss and comprehensive loss of $45,071 in Q2 2020, an increase of $72,561 or 161%.

Financial Condition for the six months ending 30 June 2021:

• Revenue was $288,573, a 23.54% decrease compared to $377,445 for the 6 months ending 30 June 2020.

• Net loss and comprehensive loss were $175,422 compared to a net loss and comprehensive loss of $113,247 at 30 June 2020, an increase of $62,175 or 54.9%.

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Company Overview

The Company was incorporated under the laws of British Columbia on 26 October 1989 and operated as a computer related consulting firm until 1991. In 1992, the Company commenced activities in research and development of advanced software and hardware related to a personal heart arrhythmia monitoring system.

Effective 7 December 1998, the Company's name was changed to CardioComm Solutions Inc. and to CardioComm Solutions, Inc. effective 26 November 2007.

The Company’s proprietary device connectivity and ECG management technologies are used in medical, consumer, clinical research and telemedicine solutions for the recording, transmission, viewing, analyzing, reporting and storage of electrocardiograms (ECGs), for arrhythmia screening, diagnosis, and management of cardiac patients. The Global ECG Management Solutions (GEMS™) and GlobalCardio (Cloud based GEMS™) products are licensed worldwide to hospitals, ECG commercial reading services and physician. The Company has earned the ISO 13485:2016 under MDSAP certification, is HPB approved, HIPAA compliant, and has received FDA, Health Canada, European Union CE Mark, and Chinese SFDA market clearances for software and HeartCheck™ ECG devices. CardioComm Solutions, Inc. is headquartered in Toronto, Canada.

The Company also holds Class II medical device clearances for the manufacture, marketing and sales of a personal ECG monitor direct to consumers. The product is marketed under the HeartCheck™ brand. The Company developed compatibility of the HeartCheck™ device to its GEMS™ and GlobalCardio™ based software to enable use of the device for remote ECG/arrhythmia monitoring services. The Company also operates a fee‐for‐service ECG reading service named the SMART Monitoring ECG reading service through which ECGs recorded by a HeartCheck™ device may be reviewed by an ECG reading service. The Company plans to introduce new HeartCheck™ branded ECG monitoring devices and service options on an ongoing basis.

SUMMARY OF QUARTERLY RESULTS

The following is a summary of the Company’s most recent 8 quarters. This information has been prepared in accordance with IFRS and presents selected financial information for the Company.

Quarterly results	Q3 2019	Q4 2019	Q1 2020	Q2 2020	Q3 2020	Q4 2020	Q1 2021	Q2 2021
Total revenue	249,180	207,207	198,024	179,421	185,645	271,696	134,819	153,754
Net loss and comprehensive loss	(107,480)	(697,145)	(68,177)	(46,043)	(18,375)	70,048	(57,792)	(117,632)
Basic and diluted loss per share	$0.00	$0.00	($0.01)	$0.00	$0.00	$0.00	$0.00	$0.00
Total assets	1,001,369	323,384	437,764	416,625	386,241	360,617	266,955	249,330
Total liabilities	1,226,244	1,219,196	1,367,037	1,388,424	1,373,695	1,030,935	970,065	882,679

RESULTS OF OPERATIONS

For the three months ended 30 June 2021 compared to the three months ended 30 June 2020 and 2019.

The following table shows operating results expressed as a percentage of revenue for the three months ending 30 June:

Second quarter	Q2 2021 Q2 2020 Q2 2019
Revenue Cost of sales Operations Sales service & support Marketing Research & development Total expenses Operating loss Other income (loss) Net loss and comprehensive loss	100% 100% 100%
	5% 12% 28% 174% 107% 118% 6% 6% 10% 0% 1% 8% 0% 0% 3%
	181% 292% 139% (86%) (26%) (67%) 9% 0% 0%
	(77%) (26%) (67%)

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*Certain data has been reclassed to conform to this quarter’s presentation.

The following table shows revenue by product line expressed as a percentage of revenue for the three months ended 30 June:

Revenue second quarter	Q2 2021 Q2 2020 Q2 2019
Software Hardware Support Services	74% 54% 57% 9% 14% 31% 13% 14% 10% 4% 17% 2%
	100% 100% 100%

The following table shows revenue by geographic region expressed as a percentage of revenue for the three months ended 30 June:

Revenue second quarter by geographic region	Q2 2021 Q2 2020 Q2 2019
Canada United States Other	17% 28% 33% 79% 59% 64% 4% 13% 3%
	100% 100% 100%

Revenue

Revenue for the three months ended 30 June 2021 was $153,754 compared to $179,420 for the three months ended 30 June 2020, a decrease of 14.3%. This was primarily due to a drop in sales of hardware and services.

Cost of sales

Cost of sales for the three months ended was $7,991 which represents a 62.8% reduction in expense from $21,502 for the three months ended 30 June 2020 due primarily to lower hardware sales.

Operations

Operations expenses for the three months ended 30 June 2021 were $267,549, an increase of 40% compared to $191,156 for the three months ended 30 June 2020. This was primarily due to higher legal, professional and contract expenses.

Sales, service, and support

Sales, service, and support expenses, excluding cost of sales, were $9,680 for the three months ended 30 June 2021, compared to $9,961 for the three months ended 30 June 2020.

Marketing

Marketing expenses were $750 for the three months ended 30 June 2021 compared to $1,506 for the three months ended 30 June 2020 largely related to COVID‐19 market changes.

Net loss and comprehensive loss

CardioComm recorded a net loss and comprehensive loss of $117,632 or $0.00 net loss per common share for the three months ended 30 June 2021, compared to a net loss and comprehensive loss of $45,071 or $0.00 net loss per share for the three months ended 30 June 2020. The weighted average number of shares outstanding was 146,202,238 for the second quarter ending 30 June 2021 compared to 141,437,098 as of 31 December 2020.

For the six months ended 30 June 2020 compared to the six months ended 30 June 2020 and 2019.

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The following table shows operating results expressed as a percentage of revenue for the six months ended 30 June:

Operating results	2021 2020 2019
Revenue Cost of sales Operations Sales service & support Marketing Research & development Total expenses Operating loss Other loss (income) Net loss and comprehensive loss	100% 100% 100%
	10% 12% 25% 157% 108% 120% 7% 8% 10% 0% 2% 7% 0% 0% 5%
	164% 118% 141%
	(74%) (31%) (66%) 13% 0% 0%
	(61%) (31%) (66%)

The following table shows revenue by product line expressed as a percentage of revenue for the six months ended 30 June:

Revenue by product line (6 months)	2021 2020 2019
Software Hardware Support Services	73% 61% 54% 11% 16% 33% 13% 15% 12% 4% 9% 1%
	100% 100% 100%

The following table shows revenue by geographic region expressed as a percentage of revenue for the six months ended 30 June:

Revenue by geographic region	2021 2020 2019
Canada United States Other	21% 32% 47% 71% 53% 50% 8% 15% 3%
	100% 100% 100%

Revenue

Revenue for the six months ended 30 June 2021 was $288,573 compared to $377,445 for the six months ended 30 June 2020, a decrease of 23.5%. This was primarily due to a drop in sales of hardware and services.

Cost of sales

Cost of sales for the six months ended was $27,843 which represents a 39.5% reduction in expense from $46,047 for the six months ended 30 June 2020 due to lower hardware sales.

Operations

Operations expenses for the six months ended 30 June 2021 were $452,248, an increase of 10.5% compared to $409,441 for the six months ended 30 June 2020.

Sales, service and support

Sales, service, and support expenses, excluding cost of sales, were $20,553 for the six months ended 30 June 2021, compared to $28,580 for the six months ended 30 June 2020.

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Marketing

Marketing expenses were $1,250 for the six months ended 30 June 2021 compared to $8,935 for the six months ended 30 June 2020 largely related to COVID‐19 market changes.

Net loss and comprehensive loss

CardioComm recorded a net loss and comprehensive loss of $175,422 or $0.00 net loss per common share for the six months ended 30 June 2021, compared to a net loss and comprehensive loss of $113,247 or $0.00 net loss per share for the six months ended 30 June 2020. The weighted average number of shares outstanding was 149,202,238 for the six months ending 30 June 2021 compared to 140,947,354 as of 31 December 2020.

Liquidity

Operating activities

Cash outflows were $151,639 in the six months ended 30 June 2021 (30 June 2020 – Cash inflow $61,951), a difference of $213,590. The six month period ended 30 June 2021 had a net loss and comprehensive loss of $175,422 compared to a net loss and comprehensive loss of $113,247 in the six months ended 30 June 2020.

Investing activities

Cash used in investing activities was $2,631 in the six months ended 30 June 2021 (30 June 2020 ‐ $20,452). The investing activities are primarily due to purchases of computer equipment.

Financing activities

Net cash acquired by financing activities was $77,288 in the six months ended 30 June 2021 as the Company received additional debt financing along with funds related to the exercise of options. These proceeds were partially offset by the payment of the lease liability (30 June 2020 ‐ $28,695).

Cash requirements

Short‐term cash requirements are primarily related to funding of operations and marketing needs. Management has continued to take steps to position the Company’s operations to be cash flow positive. Management believes that its existing working capital, access to financing, as well as cash provided through software licensing and device sales will provide sufficient funds to maintain operations through the end of 2021.

Management expects to continue to maintain its cost containment efforts and to see increases in revenue generation from telemedicine and remote patient monitoring platform integrations of HeartCheck™ branded devices, SMART Monitoring ECG reading services and its hospital‐based GEMS™ FLEX software licensing.

The Company has been working to develop larger, stable and predictable, fee‐for service, recurrent revenue streams through the planned introduction of new and wireless HeartCheck™ branded devices. The Company will be working to submit new applications for OTC and Rx approvals for the new devices through the FDA and Health Canada within the next 6 months to expand its market access.

Transactions with Related Parties

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 members of the Company’s Board of Directors, corporate officers, including the Company’s Chief Executive Officer, Chief Financial Officer, and Vice Presidents.

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Remuneration attributed to key management personnel for the six months ended 30 June 2021 and the year ended 31 December 2020 is summarized as follows:

	30 June 2021 31 December 2020
Share‐based compensation	911 $ 6,598 $
Salaries	57,600 189,698
Contractors Director's fees	55,479 40,167 18,271 41,625
	132,261 $ 278,088 $

Amounts due to and from related parties as of 30 June 2021 included the following:

• Notes payable of $143,000 are due to related parties. Interest payable of $4,556 on these notes is due to related parties (note 11).

• Amounts due to related parties as of 30 June 2021 of $27,809 are due to various members of management and the board of directors. As of 30 June 2021, these amounts were included in trade and other payables and accrued liabilities.

• Included in accounts payable as of 30 June 2021 is $1,984 owing to a company controlled by the CEO (note 10). Also included in accounts payable as of 30 June 2021 is $36,263 owing to a company controlled by a family member of the CEO.

Other than the notes payable and accrued interest as discussed in note 11, amounts due to and from related parties are non‐interest bearing with no set terms of repayment.

Capital Resources and Forward Strategies

Equity transactions

• On 2 January 2021, 5,000,000 common shares were issued at $0.05 per common share in settlement of debt of $250,000.

• On 12 January 2021, 500,000 common shares were issued as a result of the exercising of stock options by the CEO for a cash settlement of $25,000.

• On April 7, 2021, 406,250 common shares were issued for debt settlement of $24,375 to members of the board of directors.

• On April 26, 2021, 2,947,394 common shares were issued for debt settlement of $162,107 to members of management.

Government assistance related to COVID‐19

• In April 2021, the Company received an additional $20,000 from the Canadian Government through the Canada Emergency Business Account (CEBA) program which was created to support small businesses to bridge the financial gap experienced because of the COVID‐19 pandemic.

Debt financing

Management continues the process of retiring the Company’s debt financing, which was $353,000 on 30 June 2021. Current debtholders have extended the loan maturity to December 2022.

Business and sales strategies

The Company has developed a strategy on cost containment to maintain product development efforts and seek new licensing agreements. The Company will continue to maintain operational cost reductions on an ongoing basis to support next generation product releases. This will include expanding into multiple bio signal monitoring and reporting which is permitted under the Company’s expanded ISO 13485:2016 re‐certification secured in May 2021.

The Company will continue to incorporate new consumer and prescription bio sign monitoring medical devices from third party manufacturers that will be compatible to the Company’s GEMS™ and SMART Monitoring platforms. Where there is strategic value, CardioComm Solutions will work with the device manufactures on a cost recovery basis to secure medical device clearances (FDA and/or CE and/or Health Canada) approvals for the sale of these new devices under distributor/representation/OEM agreements.

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The Company continues to issue GEM™ WIN and GEMS™ FLEX licensing agreements to new hospital and ECG service providers. GEMS™ WIN referral sales also occur as follow‐through sales from medical device manufacturer’s efforts to sell their ECG devices with a compatible ECG management solution GEMS™ software license are sold under an annual licensing or pre‐paid multi‐year agreements which enhances uninterrupted yearly renewals for continued use of the Company’s software.

Off Balance Sheet Arrangements

The company does not have any off‐balance sheet arrangements as of 30 June 2021 and 31 December 2020.

Non‐cash transactions from investing and financing activities

For the quarter ended 31 March 2021, the Company had the following non‐cash transactions from investing and financing activities:

• On 2 January 2021, 5,000,000 common shares at $0.05 per common share were issued in settlement of debt of $250,000.

• On April 7, 2021, 406,250 common shares were issued for debt settlement of $24,375 to members of the board of directors.

• On April 26, 2021, 2,947,394 common shares were issued for debt settlement of $162,107 to members of management.

Critical Accounting Estimates

The unaudited financial statements of the Company for the six months ended 30 June 2021 and the audited financial statements for the year ended 31 December 2020, were prepared in accordance with IFRS applicable to a going concern which assumes that the Company will realize its assets and discharge its liabilities and meet its future obligations in the normal course of business. Accordingly, the financial statements do not include any adjustments for the recoverability and reclassification of recorded assets, or the amounts or classification of liabilities, that might be necessary should the Company be unable to continue as a going concern. Such adjustments could be material. However, there is significant doubt as to the appropriateness of the going concern presumption. There is no assurance that the Company's funding initiatives will continue to be successful.

Significant estimates made by management are, but are not limited to, revenue recognition, including the identification of separate units of accounting under multiple deliverable arrangements, the measurement of deferred revenue related to future services, valuation of stock‐based compensation, useful lives of equipment, the allowance for doubtful accounts, inventory valuation and the estimation of deferred income tax asset valuation allowances. Actual results could differ from those estimates.

Inventories

Inventories are valued at the lower of cost and net realizable value, with cost determined based on a first‐in, first‐out basis. Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

Inventories include the cost of materials purchased, the cost of conversion, as well as other costs required to bring the inventories to their present location and condition.

Revenue recognition

The Company recognizes revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when it has persuasive evidence of an arrangement, the product has been delivered and is installed and operational at a customer's place of business or the services have been provided to the customer, the fee is fixed and determinable, and collectability is reasonably assured.

In addition to this general policy, the following are the specific revenue recognition policies for each major category of revenue.

Software

Revenue from the sale of proprietary software is recognized when title is transferred to the customer. Shipping and handling costs paid by the customer to the Company are included in revenue.

Service

Revenues derived from ongoing service and maintenance contracts are recognized monthly over the term of the contract on a straight‐line basis and are net of discounts. Other service revenue is recognized at the time the service is performed.

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Multiple‐element arrangements

The Company also has multiple‐element sales arrangements where software licenses, the associated post‐contract services (PCS) and ongoing services are sold together.

The Company has established vendor‐specific objective evidence (VSOE) of the fair value of PCS for specific customer classes based on the value of PCS when sold separately as an optional renewal after the expiry of the initial maintenance term or based on contracted prices for optional PCS renewals included in the original multiple element sales arrangement.

The Company uses the residual method to determine the fair value of the delivered hardware, services, and software license if VSOE of the fair value of all undelivered elements exists. Under the residual method, the fair value of the undelivered elements is deferred, and the remaining portion of the arrangement fee is recognized as revenue. In such cases when vendor‐specific objective evidence of fair value exists for all the undelivered elements (most commonly PCS), the residual amount is recognized as revenue and the PCS is recognized ratably over the PCS term, which is typically 12 months.

Income taxes

Income tax expense comprises current and deferred taxes. Current tax and deferred tax are recognized in earning or loss except to the extent that it relates to items recognized directly in equity or other comprehensive income.

Current tax

Current taxes are the expected tax payable or recoverable on the taxable income or loss for the period, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to taxes payable in respect of previous years.

Deferred Tax

The Company uses the asset and liability method of accounting for income taxes, under which deferred income tax assets and liabilities are recognized for the estimated future income tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective income tax bases. Deferred income tax assets and liabilities are measured using income tax rates in effect for the period in which those temporary differences are expected to be recovered or settled. The effect on deferred income tax assets and liabilities of a change in income tax rates or laws is recognized as part of the provision for income taxes in the period the changes are considered substantively enacted.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset deferred tax liabilities and assets, and they relate to income taxes levied by the same authority on the same taxable entity, or on different tax entities, but they intend to settle liabilities and assets on a net basis, or their tax assets and liabilities will be realized simultaneously.

A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable earnings will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

Stock compensation

The Company has a share‐based payments awards plan available to officers, directors, employees, and consultants. All share‐ based payments have been accounted for using a fair‐value‐based method of accounting. The fair value of each stock option granted is accounted for in the statements of loss and comprehensive loss, over the vesting period thereof, and the related credit is included in contributed surplus.

Equity‐settled share‐based payments to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date using the Black‐Scholes option pricing model on the date of grant with management’s assumptions of risk‐free interest rate, dividend yield, volatility factor of expected market price of the Company’s common share, expected forfeiture and life of the options. For details regarding the determination of the fair value of equity‐settled share‐ based transaction, refer to the notes to the financial statements for the year ended 30 December 2020.

Financial instruments

The fair value determined at the grant date of the equity‐settled share‐based payments is expensed over the vesting period, based on the Company’s estimate of equity instruments that will eventually vest. At the end of each reporting period, the

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Company revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognized in the statements of loss and comprehensive loss such that the expense reflects the revised estimate, with a corresponding adjustment to contributed surplus.

Equity‐settled share‐based payment transactions with parties other than employees are measured at the fair value of the goods or services received, except where that fair value cannot be estimated reliably, in which case they are measured at the fair value of the equity instruments granted, measured at the date the Company grants the shares.

The fair value of the Company’s trade receivables, deposits, trade and other payables, short term notes payable, and amounts due to related parties’ approximate carrying value, due to their short‐term nature. The Company’s cash and cash equivalents are measured at fair value under the fair value hierarchy based on level one quoted prices in active markets for identical assets or liabilities.

The Company’s financial instruments are exposed to certain financial risks, including credit risk, liquidity risk, and market risk, which includes currency risk, interest rate risk and price risk.

a) Credit risk

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

The Company is subject to credit risk on its cash and cash equivalents and receivables. The Company limits its exposure to credit loss by placing its cash and cash equivalents with major financial institutions. The Company has no investments in asset‐backed commercial paper.

The Company’s main exposure to credit risk is from its trade receivables and is subject to the concentration of its key customers. Before allowances, the Company’s largest receivable balances due from its customer represent 88% of trade receivables on 30 June 2021 (31 December 2020 ‐ 65%).

The Company records an allowance for credit losses related to trade receivables that are non‐collectible. The allowance is based on the Company’s knowledge of the financial condition of its customers, the aging of the receivables, current business environment, customer and industry concentrations, and historical experience. To reduce credit risk, cash equivalents are only held at major financial institutions and management provides ongoing credit evaluations of its customers’ financial condition.

Total trade receivables less an allowance for expected credit losses as of 30 June 2021 amounted to $91,972 (31 December 2020 ‐ $110,404), which management believes adequately reflects the Company’s credit risk. Of the reported trade receivables, 92.3% is determined to be past due, which is defined as amounts outstanding beyond normal credit terms and conditions for the respective customers. The significant over 90‐day trade receivable is from one customer for outstanding royalty payments. The Company continues to believe the trade receivables from this customer is collectable.

b) Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its short‐term financial obligations as they fall due.

The Company manages liquidity risk through its capital management as outlined in the financial statements for the six months ended 30 June 2021. As of 30 June 2021, the Company has cash and cash equivalents, and trade receivables, net of an allowance for expected credit losses, of $136,359 to settle its trade and other payables, and accrued liabilities of $269,117. On 31 December 2020, the Company extended the maturity term of its notes payable from 31 December 2020 to 31 December 2022 along with retiring $250,000 of notes payable in exchange for common shares of the Company at $0.05 per common share to be issued in 2021 (note 13). It should be noted that the Company will need to obtain additional funds to support ongoing operating expenditures and meet its liabilities as they fall due.

c) Market Risk

Market risk is the risk of loss that may arise from changes in market factors such as foreign exchange rates, interest rates, and commodity and equity prices.

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i. Currency risk

The functional currency of the Company is the Canadian dollar. The Company has sales in both Canadian and US dollars. As a result, the Company is exposed to foreign exchange rate risk with respects to the US dollar. As of 30 June 2021, the Company had net financial assets denominated in US dollars of approximately $35,695. A 10% change in Canadian dollars versus United States dollars would give rise to a net gain of $721. The Company has not entered any foreign exchange contracts to hedge this risk.

ii. Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The risk that the Company will realize a loss because of interest rate risk on its notes payable is minimal, as these have a short‐term to maturity, and a fixed interest rate.

iii. Price risk

The Company is not exposed to significant price risk as it does hold investments in publicly traded securities.

Accounting Standards and Interpretations Issued and Adopted

No new IFRS were adopted with a material effect on the financial statements during this quarter.

Outstanding Share Data

The total issued and outstanding common shares of the Company on 30 June 2021, is 150,343,398 and, during the six months ended 30 June 2021, CardioComm issued 8,853,644 shares.

Disclosure Controls and Procedures

The Company’s audit committee has reviewed and approved this MD&A prior to its release. CardioComm Solutions is committed to providing timely, accurate and balanced disclosure of all material information about the Company and to providing fair and equal access to such information. As at 26 August 2021, the Company’s management evaluated the effectiveness of the design and operation of its disclosure controls and procedures, as defined under the rules adopted by the Canadian securities’ regulatory authorities. In addition, the Company’s management has assessed whether there have been many significant changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. Disclosure controls and procedures designed to ensure that information required to be disclosed in reports filed with securities regulatory authorities is recorded, processed, summarized, and reported on a timely basis, and is accumulated and communicated to the Company’s management, including the CEO and CFO as appropriate, to allow timely decisions regarding required disclosure. Internal control over financial reporting is a process designed by, or under the supervision of, senior management to provide reasonable assurance regarding the reliability of financial reporting and preparation of the Company’s financial statements in accordance with IFRS.

The Company’s management, including the CEO and CFO, does not expect that the Company’s disclosure controls or internal control over financial reporting will prevent or detect all material misstatements due to error or fraud. Because of the inherent limitations of all control systems, an evaluation of controls can only provide reasonable, not absolute assurance, that all control issues and instances of fraud or error, if any, within the Company have been detected. The Company is continually evolving and enhancing its systems of controls and procedures. Based on the evaluation of disclosure controls, and assessment of changes in internal control over financial reporting, the CEO and CFO have concluded that, subject to the inherent limitations noted above, the Company’s disclosure controls are effective in ensuring that material information relating to the Company is made known to management on a timely basis, and is fairly presented in all material respects in this MD&A.

Internal Controls over Financial Reporting

Internal control over financial reporting is a process designed by, or under the supervision of, the Company’s principal executive and principal financial officers, and effected by the Company’s board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the IFRS. Based on their evaluation, the CEO and CFO have concluded that the design of these internal controls over financial reporting and the preparation of financial statements for external reporting at 26 August 2021 are effective.

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The Company relies on compensating controls, including substantive periodic review of the financial statements, to ensure that disclosure controls and procedures are effective. The Company continues to address requirements to strengthen audit and financial controls.

ADDITIONAL INFORMATION

Additional information relating to CardioComm Solutions, Inc. is located at www.sedar.com .

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