Contagious Gaming Inc. — Management Reports 2025

Feb 27, 2025

Contagious GAMING

CONTAGIOUS GAMING INC.

MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE NINE MONTHS ENDED
DECEMBER 31, 2024

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The following management discussion and analysis ("MD&A") provides a review of the Contagious Gaming Inc.'s (the "Company" or "Contagious Gaming") results of operations, financial condition and cash flows for the nine months ended December 31, 2024. This MD&A has been prepared with an effective date of February 26, 2025, and should be read in conjunction with the information contained in the Company's audited consolidated financial statements and related notes for the year ended March 31, 2024, which were prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). The audited consolidated financial statements and additional information regarding the business of the Company are available at www.sedar.com.

For reporting purposes, the Company prepares consolidated financial statements in Canadian dollars. Unless otherwise indicated, all dollar ("$") amounts in this MD&A are expressed in Canadian dollars.

All references to we, our, us and Contagious Gaming refer to the Company, together with its consolidated operations controlled by it and its predecessors.

All references to management refer to the directors, senior officers and other officers of Contagious Gaming, unless otherwise stated. The Company's audit committee has reviewed this document and, prior to its release, the Contagious Gaming Board of Directors approved it, on the audit committee's recommendation.

Description of Business

The Company is in the business of developing software solutions for regulated gaming and lottery markets. The Company is currently focused on capitalizing on its proprietary digital instant lottery content while pursuing other opportunities to grow the business through potential transactions. The Company is listed on the TSX Venture Exchange ("TSX.V") under the symbol "CNS" and on the Frankfurt Stock Exchange under the symbol "RHRC".

Recent Developments

On July 17, 2024, the Company and IMBiotechnologies Ltd., a corporation existing under the laws of Alberta ("IMBiotechnologies") announced that they have entered into a non-binding letter of intent dated July 17, 2024 (the "LOI"), pursuant to which Contagious Gaming and IMBiotechnologies intend to complete a business combination or other similarly structured transaction which will constitute a reverse take-over of Contagious Gaming (the "Transaction"). In connection with the Transaction the common shares of the Company are expected to be voluntarily delisted from the TSX Venture Exchange (the "TSXV") and will subsequently apply for listing on the Canadian Securities Exchange (the "CSE").

The LOI is to be superseded by a business combination agreement (the "Definitive Agreement") to be signed on or prior to October 15, 2024, or such later date as may be mutually agreed upon by the parties in writing. The Transaction is subject to requisite regulatory approval, including the approval of the TSXV, and the CSE and standard closing conditions, including the approval of the directors of each of Contagious Gaming and IMBiotechnologies of the Definitive Agreement, completion of due diligence investigations to the satisfaction of each of the parties, and the conditions described below. The legal structure for the Transaction will be confirmed after the parties have considered all applicable tax, securities law and accounting efficiencies.

On January 26, 2024, the Company settled an aggregate $470,300 in debt (the "Debt") in exchange for the issuance of an aggregate of 47,030,000 common shares (the "Shares") in the capital of the Company at a price of $0.01 per Share (the "Shares for Debt Transaction"). No new control person of the Company was created pursuant to the Shares for Debt Transaction. However, certain of the Debt was accrued pursuant to consultant and management services entered into between the Company and two entities controlled by insiders of the Company (the "Insiders"). As a result, this portion of the Shares for Debt Transaction was a non-arm's length transaction. A total of $272,000 was settled to the Insiders as part of the non-arm's length transaction. The issuance of the Shares to the Insiders constitutes a "related party transaction" as such term is defined by Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI61-101"). Accordingly, the issuance of the Shares to the Insiders pursuant to the Shares for Debt Transaction will be undertaken pursuant to certain exceptions from the valuation and minority approval requirements of MI 61-101. All shares issued in connection with the Shares for Debt Transaction are subject to a statutory hold period of four (4) months plus a day from the date of issuance of the Shares in accordance with applicable securities legislation.

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Outlook

The Company is focused on monetizing its digital lottery content and continues to seek opportunities to distribute into additional markets globally. It will continue to pursue opportunities to grow the business through strategic acquisitions or other transactions.

Discussion of Operations

	Nine Months Ended December 31
	2024 $	2023 $
Revenue	-	-
Expenses
General and administrative	60,963	97,812
Financing costs	17,886	18,006
Foreign exchange loss	-	39

For the nine months ended December 31, 2024, the Company recorded a net loss of $78,849 compared with a net loss of $115,857 for the comparative period.

Revenue – There has been no change in revenue from the prior period.

General and administrative expenses – General and administrative costs have decreased by $36,849 over the prior period.

Financing costs – Financing costs have remained consistent with the prior period.

Summary of Quarterly Results

The following is a summary of the results from the eight previously completed financial quarters. In compliance with IFRS 5 disclosed is also the results from continuing operations only:

	Dec 31 2024 $	Sept 30 2024 $	June 30 2024 $	March 31 2024 $	Dec 31 2023 $	Sept 30 2023 $	June 30 2023 $	March 31 2023 $
Revenue	-	-	-	-	-	-	-	-
Net profit/(loss) – as stated (i)	(14,803)	(34,031)	(30,015)	259,681	(50,667)	(29,061)	(36,129)	(106,265)
Net profit/(loss) – continuing (i)	(14,803)	(34,031)	(30,015)	259,681	(50,667)	(29,061)	(36,129)	(106,265)
Net profit/(loss) per share – as stated (ii)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)
Net profit/(loss) per share (ii)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)

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(i) For the past three quarters, the net loss is a result of the level of operating expenses incurred by the company. For the quarter ended March 31, 2024, the net profit is the result of a gain on the settlement of debt of two related parties. For all previous quarters, the net loss is the result of the level of operating expenses incurred by the Company.

(ii) Net loss per share fluctuates from period to period and is impacted by the amount of loss incurred and the number of weighted average common shares outstanding.

Financial Condition, Liquidity and Capital Resources

	December 31, 2024	March 31, 2024
	$	$
Cash	911	4,516
Other current assets	3,386	3,885
Current liabilities	1,703,964	1,629,219
Current working capital (deficiency)	(1,699,667)	(1,620,818)

Assets – The decrease in cash of $3,605 since March 31, 2024, primarily relates to the use of cash for operations.

Other current assets are government remittances receivable.

Liabilities – The increase in current liabilities since March 31, 2024, primarily relates to an increase in accounts payable.

Working Capital – The increase in the current working capital deficiency is mainly due to the increase in accounts payable. The Company's current working capital is not considered sufficient to support its expected general administrative and corporate operating requirements on an ongoing basis for the next twelve months without further financing.

Financing of Operations and Recent Financing – To date, Contagious has financed its operations through software development revenue, debt, equity and government assistance.

Liquidity Risk and Contractual Obligations – Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. The Company is exposed to this risk mainly with respect to ensuring the sufficiency of funds for working capital and commitments. The Company monitors the maturity dates of existing accounts payables and accrued liabilities, loans payable and commitments to mitigate this risk.

Liquidity Outlook

The Company's objective when managing capital is to maximize returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. The Company is not subject to externally imposed capital requirements.

The Company's cash reserves of $911 and working capital deficiency of $1,699,667 as at December 31, 2024 are insufficient to meet anticipated cash needs for working capital and capital expenditures through the next twelve months, nor are they sufficient to see the current initiatives through to completion. To the extent that the Company does not believe it has sufficient liquidity to meet its current obligations, management considers securing additional funds, primarily through the issuance of equity securities of the Company, to be critical for its needs. The Company's long-term liquidity depends on its ability to access the capital markets, which depends substantially on the success of the Company's ongoing programs, as well as economic conditions relating to the state of the capital markets generally. Further, there can be no assurance that additional financing can be obtained in a timely manner, or at all especially in light of the potential impact of COVID-19 on capital markets.

Given the Company's conclusion about the insufficiency of its cash reserves, significant doubt may be cast about the Company's ability to continue operating as a going concern. The continuation of the Company as a going concern for the foreseeable future depends mainly on raising sufficient capital, and in the interim, reducing, where possible, operating expenses and potentially selling of assets.

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This outlook is based on the Company's current financial position and is subject to change.

Outstanding Share Data

The following table summarizes the maximum number of common shares potentially outstanding as at December 31, 2024 and as of the date of this MD&A:

	As of December 31, 2024	As of the date of this MD&A
Common shares	94,036,835	94,036,835
Share purchase warrants	-	-
Fully diluted	94,036,835	94,036,835

Off-Balance Sheet Arrangements

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

Related Party Transactions and Balances

For details, please refer to Note 5 of the December 31, 2024 condensed consolidated interim financial statements.

Future Changes in Significant Accounting Policies

For details, please refer to Note 3 of the December 31, 2024 condensed consolidated interim financial statements.

Financial Instruments and Other Instruments

For details, please refer to Note 10 of December 31, 2024 condensed consolidated interim financial statements.

Risks and Uncertainties

Details of the risks and uncertainties related to the Company's business are set out in the Management Discussion and Analysis dated March 31, 2022 under the heading "Risk Factors" which is available under the Company's profile on SEDAR at www.sedarplus.ca.

Commitments and Contingencies

For details please refer to Note 7 of the December 31, 2024 condensed consolidated interim financial statements.

Forward Looking Statements

Certain information included in this discussion may constitute forward-looking statements. Readers are cautioned not to put undue reliance on forward-looking statements. These statements relate to future events or the Company's future performance, business prospects or opportunities. All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar expressions. These forward-looking statements include statements regarding the timing and amount of estimated future cash flows, capital expenditures, currency fluctuations and the requirements of future capital. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. The Company believes that the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements contained into this report should not be unduly relied upon. These statements speak only as of the date of this report. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied

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by the forward-looking statements contained in this report. Such statements are based on a number of assumptions which may prove to be incorrect, including, but not limited to, assumptions about:

• general business and economic conditions;
• the availability and reasonable terms to finance the Company;
• the ability to deliver compelling content, products and services in a highly competitive market; and
• the ability to attract and retain skilled staff

These forward-looking statements involve risks and uncertainties relating to, among other things, uninsured risks, regulatory changes, defects in title, availability of materials and equipment, timeliness of government approvals, actual performance of facilities, equipment and processes relative to specifications and expectations and unanticipated impacts on operations. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, the risk factors hereinabove. Additional risk factors are described in more detail hereinafter. Investors should not place undue reliance on forward-looking statements as the plans, intentions or expectations upon which they are based might not occur. The Company cautions that the foregoing list of important factors is not exhaustive. Investors and others who base themselves on the Company's forward-looking statements should carefully consider the above factors as well as the uncertainties they represent and the risk they entail. The forward-looking statements contained in this report are expressly qualified by this cautionary statement.

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CORPORATE DIRECTORY

Trading Symbol – CNS
Exchange - TSX-V

Contagious Gaming Inc.

800 – 789 West Pender Street,

Vancouver, BC, V6C 1H2

www.contagiousgaming.com
info@contagiousgaming.com

Officers and Directors
Manish Grigo – CEO and Director
Craig Loverock – CFO and Corporate Secretary
Desmond Balakrishnan – Director
Justin Barragan – Director

Audit Committee
Justin Barragan
Desmond Balakrishnan
Manish Grigo

Compensation Committee
Desmond Balakrishnan
Justin Barragan
Manish Grigo

Corporate Governance Committee
Desmond Balakrishnan (Chairman)
Justin Barragan
Manish Grigo

Legal Counsel
McMillan LLP
Suite 1500 - 1055 West Georgia Street
Vancouver, BC V6E 4N7
Tel: 604-689-9111
Fax: 604-685-7084

Auditor
Kreston GTA
8953-8965 Woodbine Avenue
Markham, Ontario, L3R 0J9
Tel: 905-474-5593

Transfer Agent
Computershare
2nd Floor, 510 Burrard Street
Vancouver, BC V6C 3B9
Tel: 604-661-9400
Fax: 604-661-9549