Champion Gaming Group Inc. — Management Reports 2021

Apr 20, 2021

PRIME CITY ONE CAPITAL CORP.

MANAGEMENT DISCUSSION & ANALYSIS

For the Year Ended December 31, 2020

This Management’s Discussion and Analysis (“MD&A") is intended to help the reader understand Prime City One Capital Corp.’s operations, financial performance, and the present and future business environment. This MD&A, which has been prepared as of April 20, 2021, should be read in conjunction with Prime City One Capital Corp.’s audited consolidated financial statements for the year ended December 31, 2020.

References to “Prime City” or the “Company”, refers to Prime City One Capital Corp. and its share of consolidated subsidiaries and joint ventures, unless the context indicates otherwise. All amounts are in Canadian dollars, unless otherwise indicated.

Securities regulators encourage companies to disclose forward-looking information to help investors understand a company’s future prospects. This discussion contains statements about Prime City’s future financial condition, results of operations and business.

All statements in this MD&A, other than statements of historical fact, that address future acquisitions and events or developments that Prime City expects to participate in, are forward-looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forwardlooking statements include industry-related risks, regulatory approvals, and continued availability of capital and financing and general economic, market or business conditions.

Overview

The Company was incorporated under the Business Corporations Act (Ontario) on September 2, 2004. On October 26, 2005, the Company was admitted for trading on the TSX Venture Exchange under the symbol SCE.P. The Company was initially a "Capital Pool Company" as defined by the policies of the TSX Venture Exchange. On March 22, 2010, in conjunction with its real estate sale, the listing of the Company’s common shares was transferred to the NEX under the trading symbol “PMO.H”.

The Company is currently reviewing several alternative business plans and fully intends to pursue a change of business and, subject to shareholder and NEX approval, transfer its listing from the NEX back to the TSX Venture Exchange.

On April 7, 2021, the Company announced that it has entered into a letter agreement pursuant to which the Company and Champion Gaming Inc. (“Champion”) have agreed to complete an arm’s length transaction that, if completed, will result in a reverse take-over of the Company by Champion. The completion of the transaction is subject to a number of conditions including the approval of the TSX Venture Exchange.

Overall Performance

The Company has experienced operating losses and cash outflows from operations since incorporation.

The Company’s ability to continue as a going concern is dependent on its ability to raise the financing necessary to develop its comprehensive business plan. These consolidated financial statements do not reflect any adjustments to the carrying value of the assets and liabilities which may be required should the Company be unable to continue as a going concern.

1

During the year ended December 31, 2020, the Company incurred a comprehensive loss of $36,289 as compared to a comprehensive loss of $82,994 for the year ended December 31, 2019.

The Company’s total assets as at December 31, 2020 amounted to $24,484 as compared to $52,827 as at December 31, 2019.

Results of Operations

Revenue

The Company did not generate any revenues during the year ended December 31, 2020.

Operating Expenses

General and administrative expenses decreased to $36,289 for the year ended December 31, 2020 as compared to $82,994 for the year ended December 31, 2019. The decrease was mainly due to reduced overall business activities including reduced legal and consulting advisory costs associated with the Company’s operating and financing activities.

Liquidity and Capital Resources

Liquidity

As at December 31, 2020, the Company had a cash balance of $21,502 (December 31, 2019 - $36,237), and a working capital deficiency of $46,214 as compared to a working capital deficiency of $9,925 as at December 31, 2019.

Management expects to be able to finance the Company’s future operations through the issuance of debt and equity securities.

Off Balance Sheet Arrangements

As at December 31, 2020, the Company had no off-balance sheet arrangements such as guaranteed contracts, contingent interests in assets transferred to an entity, derivative instrument obligations or any instruments that could trigger financing, market or credit risk to the Company.

Transactions with Related Parties

Related party transactions are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties.

Accounts payable and accrued liabilities includes management and administration fees payable of $38,475 (2019 - $38,475) to the Company’s current and former officers as at December 31, 2020.

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company, including directors and management. Management fees of $Nil for the Company’s CEO (2019 - $45,000) and $15,000 for the Company’s CFO (2019 - $15,000) were incurred during the year ended December 31, 2020.

2

Disclosure of Outstanding Share Data

As at December 31, 2020 and April 20, 2021, the Company had 12,202,010 common shares issued and outstanding on a fully diluted basis.

Critical Accounting Estimates

The information about significant areas of estimation uncertainty considered by management in preparing the consolidated financial statements are as follows:

Valuation of Warrants

Warrants are calculated utilizing the Black-Scholes option pricing model to determine the value as of their grant date. Management is required to estimate the volatility of the price of its common shares, the amount of future dividends that will be paid, the market's risk-free interest rate, the expected life of the options and warrants, and the expected forfeiture rate. These estimates will affect the reported amount of warrants in equity.

Financial Instruments and Other Instruments

The Company's financial instruments consist of cash and accounts payable and accrued liabilities. Management does not believe these financial instruments expose the Company to any significant interest, liquidity, currency, credit or market risks arising from these financial instruments except as disclosed in the consolidated financial statements. The fair value of these financial instruments is as stated in the consolidated financial statements for the year ended December 31, 2020.

Summary of Quarterly Results

There were no dividends paid in the last eight quarters.

	2020Q4	2020Q3	2020Q2	2020Q1	2019Q4	2019Q3	2019Q2	2019Q1
Expenses	9,239	7,775	10,708	8,567	6,622	24,358	27,166	24,848
Lossper share	(0.001)	(0.001)	(0.001)	(0.001)	(0.001)	(0.002)	(0.002)	(0.002)
Comprehensive Loss	(9,239)	(7,775)	(10,708)	(8,567)	(6,622)	(24,358)	(27,166)	(24,848)
Total Assets	24,484	23,665	25,286	41,088	52,827	57,284	57,023	73,884
Total Liabilities	70,698	60,640	54,486	59,580	62,752	60,587	35,968	25,663

3