NOTICE OF SPECIAL MEETING OF THE SHAREHOLDERS OF LEAF MOBILE INC.

MANAGEMENT PROXY INFORMATION CIRCULAR

DATED AS OF NOVEMBER 4, 2020

WITH RESPECT TO THE PROPOSED REVERSE TAKEOVER TRANSACTION INVOLVING EASTSIDE GAMES INC.

This information circular (the " Circular ") is furnished in connection with the solicitation of proxies by and on behalf of the management of Leaf Mobile Inc. (" LEAF ") for use at the special meeting of LEAF shareholders to be held on December 11, 2020 at the time and place and for the purposes set out in the accompanying Notice of Meeting and any adjournment thereof (the " Meeting ").

All information contained in this Circular with respect to EastSide Games Inc. (" ESG ") was supplied by ESG for inclusion herein, and with respect to such information, LEAF and its board of directors and officers have relied on ESG.

No person has been authorized to give any information or make any representation in connection with any matters to be considered at the Meeting, other than as contained in this Circular and, if given or made, any such information or representation must not be relied upon as having been authorized.

Neither the TSX Venture Exchange Inc. nor any securities regulatory authority has in any way passed upon the merits of the Acquisition described in this Information Circular.

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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS ........................................................... 3 GLOSSARY OF TERMS ............................................................................................................. 4 CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS ............................ 10 SUMMARY ............................................................................................................................... 14 GENERAL PROXY INFORMATION .......................................................................................... 21 THE ACQUISITION .................................................................................................................. 26 SUMMARY OF THE ACQUISITION AGREEMENT .................................................................. 32 RISK FACTORS ....................................................................................................................... 36 APPENDIX A ............................................................................................................................ 54 INFORMATION CONCERNING LEAF ...................................................................................... 54 APPENDIX B ............................................................................................................................ 63 INFORMATION CONCERNING ESG ....................................................................................... 63 APPENDIX C ............................................................................................................................ 79 INFORMATION CONCERNING THE RESULTING ISSUER .................................................... 79 APPENDIX D ............................................................................................................................ 97 PROPOSED RESOLUTIONS ................................................................................................... 97 APPENDIX E ............................................................................................................................ 99 ACQUISITION AGREEMENT ................................................................................................... 99 APPENDIX F .......................................................................................................................... 100 ESG FINANCIAL INFORMATION ........................................................................................... 100 APPENDIX G .......................................................................................................................... 108 PRO FORMA FINANCIAL INFORMATION ............................................................................. 108 APPENDIX H .......................................................................................................................... 109 FAIRNESS OPINION .............................................................................................................. 109

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LEAF MOBILE INC.

Suite 909, 510 Burrard Street Vancouver, British Columbia V6C 3A8

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

TAKE NOTICE that a special meeting (the " Meeting ") of the shareholders (the " LEAF Shareholders ") of Leaf Mobile Inc. (" LEAF ") will be held at the offices of Richards Buell Sutton LLP, 700 - 401 West Georgia Street, Vancouver, BC, V6B 5A1 on December 11, 2020, at 10:00 a.m. (Vancouver time) for the following purposes:

to consider and, if deemed advisable, approve, with or without variation, an ordinary resolution to approve:
(a) the share purchase agreement (the " Acquisition Agreement ") between LEAF, EastSide Games Inc. (" ESG ") and the shareholders of ESG, the form of which is attached as Appendix E to this Circular, pursuant to which it is proposed that LEAF will acquire ESG in a "reverse takeover" transaction (the " Acquisition ");
(b) the Acquisition and the consummation of the transactions contemplated thereby;
to consider and, if deemed advisable, approve, with or without variation, a special resolution authorizing and approving the consolidation of LEAF's issued and outstanding common shares on the basis of one (1) "new" share for every ten (10) "old" shares or such lesser ration as LEAF's board of directors deems appropriate; and
to transact such other business as may properly come before the Meeting or any adjournment thereof.

The accompanying Circular provides additional information relating to the matters to be considered at the Meeting. Also accompanying this notice is a form of proxy. Any adjournment of the Meeting will be held at a time and place to be specified at the Meeting. Only shareholders of LEAF of record at the close of business on November 2, 2020 will be entitled to receive notice of and vote at the Meeting.

If you are unable to attend the Meeting in person, please complete, sign and date the form of proxy and return the same within the time and to the location set out in the form of proxy accompanying this notice.

DATED at Vancouver, British Columbia, on November 4, 2020.

By order of the board of directors of

LEAF MOBILE INC.

"Darcy Taylor"

_____ Per Darcy Taylor, CEO and director

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GLOSSARY OF TERMS

The following is a glossary of terms used in this Circular, including the Summary hereof, and the appendices attached hereto.

Acquisition	the proposed acquisition by LEAF of all of the ESG Securities from the ESG Securities in accordance with the Acquisition Agreement. See "The Acquisition" for further discussion.
Acquisition Agreement	the agreement dated October 31, 2020 among LEAF, ESG and the ESG Securityholders with respect to the Acquisition. See Appendix E.
Acquisition Resolution	means the ordinary resolution of the LEAF Shareholders (excluding ESG and its Non-Arm's Length Parties) approving the Acquisition to be voted on at the Meeting.
affiliate	means a company that is affiliated with another company as described below. A company is an "affiliate" of another company if: (a) one of them is the subsidiary of the other, or (B) each of them is controlled by the same person. A company is "controlled" by a person if: (a) voting securities of the company are held, other than by way of security only, by or for the benefit of that person; and (b) the voting securities, if voted, entitle the person to elect a majority of the directors of the company. A person beneficially owns securities that are beneficially owned by: (a) a company controlled by that person; or (b) an affiliate of that person or an affiliate of any company controlled by that person.
Agents	means LEAF's agents in respect of the Offering, and includes Eight Capital as lead agent.
associate	when used to indicate a relationship with a person, means: (a) an issuer of which the person beneficially owns or controls, directly or indirectly, voting securities entitling it to more than 10% of the voting rights attached to the outstanding securities of that issuer; (b) any partner of the person; (c) any trust or estate in which the person has a substantial beneficial interest or in respect of which a person serves as trustee or in a similar capacity; (d) in the case of an individual, a relative of that individual, including: (i) the individual's spouse or child; or (ii) any relative of the individual

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	or of his or her spouse who has the same residence as that individual.
BCA	means the British Columbia_Business Corporations Act_, and the regulations promulgated thereunder, all as may be amended from time to time.
Beneficial Shareholders	means LEAF Shareholders who do not hold their LEAF Shares in their own name.
Business Day	means any day excepting Saturday, Sunday or statutory holidays in British Columbia.
Change of Control	includes situations where, after giving effect to the contemplated transaction and as a result of such transaction: (a) any one person holds a sufficient number of the voting securities of the issuer or Resulting Issuer to affect materially the control of that issuer or Resulting Issuer; or (b) any combination of persons, acting in concert by virtue of an agreement, arrangement, commitment or understanding hold in total a sufficient number of the voting securities of the issuer or Resulting Issuer to affect materially the control of that issuer or Resulting Issuer; where such person or combination of persons did not previously hold a sufficient number of voting securities of that issuer or Resulting Issuer to affect materially the control of that issuer or Resulting Issuer. In the absence of the contrary, any person or combination of persons acting in concert by virtue of an agreement, arrangement, commitment or understanding, hold more than 20% of the voting securities of the issuer or Resulting Issuer, is deemed to materially affect the control of that issuer or Resulting Issuer.
Circular	means the notice of meeting and information circular of LEAF dated November 4, 2020 to be delivered by LEAF to the LEAF Shareholders in connection with the Meeting.
Closing	means the completion of the Acquisition and all transactions related thereto.
Closing Date	means the date of the Closing.
Completion Date	means the date the Final Exchange Bulletin is issued by the TSXV.
Consolidation	means the proposed consolidation of the LEAF Shares, immediately after completion of the Acquisition and the Offering, on the basis of up to ten (10) "old" shares for every one (1) "new" share or on such lesser basis as the LEAF Board may decide is appropriate.

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Consolidation Resolution	means the special resolution of the LEAF Shareholders approving the Consolidation to be voted on at the Meeting.
Control Person	means any person that holds or is one of a combination of persons that holds a sufficient number of any of the securities of an issuer so as to affect materially the control of that issuer, or that holds more than 20% of the outstanding voting securities of an issuer, except where there is evidence showing that the holder of those securities does not materially affect the control of that issuer.
Depositary	means Odyssey Trust Company, the registrar and transfer agent of LEAF.
Earnings	means the interest or other income actually earned on the investment or reinvestment of the Escrowed Funds between the date such funds are deposited with the escrow agent under the Subscription Receipt Agreement, and up to but not including the earlier to occur of the Release Date and the date on which a Termination Event occurs and, for greater clarity, interest or other income actually earned on the investment of any proceeds from exercise of the Over-Allotment Option to be granted to the Agents with respect to the Offering shall be calculated from the time such proceeds are received by the escrow agent under the Subscription Receipt Agreement.
EastSide Gamesor ESG	means EastSide Games Inc., a private British Columbia company.
Eight Capital	means Eight Capital, lead agent of LEAF with respect to the Offering.
Escrowed Funds	means the aggregate of (a) the gross proceeds of the Offering, including, if applicable, gross proceeds received in connection with the exercise in whole or in part of the Over-Allotment Option before closing of the Offering, less the fees and reimbursements payable to the Agents upon closing of the Offering; (b) amounts payable to the escrow agent under the Subscription Receipt Agreement; (c) gross proceeds, if any, received upon the exercise in whole or in part of the Over-Allotment Option after closing of the Offering, less fees and reimbursements payable to the Agents upon closing of any such exercise; and (d) Earnings.
ESG Securityholders	means, collectively, the holders of the ESG Securities.
ESG Securities	means the issued and outstanding securities of ESG.
Fairness Opinion	means the opinion letter of Haywood Securities Inc. dated October 31, 2020 with respect to the Acquisition.
Final Exchange Bulletin	means the bulletin issued by the TSXV, which is issued following closing of the Acquisition, the Offering and the submission of all required documentationandwhichevidences thefinal TSXV

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	acceptance of the Acquisition and Offering.
Insider	if used in relation to an issuer, means: (a) a director or senior officer of that issuer; (b) a director or senior officer of the issuer that is an Insider or subsidiary of that issuer; (c) a person that beneficially owns or controls, directly or indirectly, voting securities carrying more than 10% of the voting rights attached to all outstanding voting securities of that issuer; or (d) the issuer itself if it holds any of its own voting securities.
issuer	means a company and its subsidiaries which have any of its securities listed for trading on the TSXV and, as the context requires, any applicant company seeking a listing of its securities on the TSXV.
LDRLY	means LDRLY (Technologies) Inc.
LEAF	means Leaf Mobile Inc.
LEAF Board	means the board of directors of LEAF.
LEAF Shareholder	means a holder of a LEAF Share.
LEAF Shares	means the common shares in the capital of LEAF.
Meeting	means the special meeting of LEAF Shareholders on December 11, 2020 to consider and approve the Acquisition, Consolidation, and certain other matters related thereto.
Minimum Offering Price	means $0.22 per Subscription Receipt.
Minority Shareholders	means all LEAF Shareholders excepting ESG, the ESG Securityholders and their respective Non-Arm's Length Parties.
Non-Arm's Length Party	means in relation to a company, a promoter, officer, director, other Insider or Control Person of that company (including an issuer) and any associates or affiliates of any of such persons. In relation to an individual, means any associate of the individual or any company of which the individual is a promoter, officer, director, Insider or Control Person.
Offering	means the offering of Subscription Receipts by LEAF for gross proceeds of $54 million.
Over-Allotment Option	means the option granted by LEAF to the Agents to allow the Agents to purchase additional Subscription Receipts within 30 days of the completion of the Offering for market stabilization purposes and to cover over-allotments, if any.
Qualifying Transaction	means the qualifying transaction (as such term is defined under

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	TSXV policies) of LEAF, including the acquisition of LDRLY.
Record Date	means November 2, 2020.
Registrar of Companies	means the registrar appointed under the BCA.
Related Party Transaction	has the meaning ascribed to that term under TSXV Policy 5.9, and includes a related party transaction that is determined by the TSXV to be a Related Party Transaction. The TSXV may deem a transaction to be a Related Party Transaction where the transaction involves Non-Arm's Length Parties, or other circumstances exist which may compromise the independence of the issuer with respect to the transaction
Release Conditions	means the escrow release conditions specified in the Subscription Receipt Agreement with respect to the release of the Escrowed Funds.
Release Date	means that date on which the Escrowed Funds, less amounts to be withheld in accordance with the Subscription Receipt Agreement, are released to LEAF in accordance with the Subscription Receipt Agreement.
Resulting Issuer	means the issuer that exists upon issuance of the Final Exchange Bulletin.
Reverse Takeoveror RTO	means a transaction or series of transactions, involving an acquisition by the issuer or of the issuer, and a securities issuance by an issuer that results in: (a) new shareholders holding more than 50% of the outstanding voting securities of the issuer; and (b) a Change of Control of the issuer. The TSXV may deem a transaction to have resulted in a Change of Control by aggregate the shares of a vendor group and/or incoming management group, but does not include any transaction or series of transactions whereby the newly issued securities are to be issued to shareholders of an issuer listed on TSE or another senior exchange under a formal takeover bid made pursuant to applicable securities laws.
SEDAR	means the Canadian System for Electronic Document Analysis and Retrieval of the Canadian Securities Administrators available to the public online at www.sedar.com.
SEDI	means the System for Electronic Disclosure by Insiders available to the public online at www.sedi.ca.
Subscription Receipt	means the subscription receipt agreement governing the

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Agreement	Subscription Receipts, to be entered into among LEAF and Eight Capital (as lead agent of LEAF with respect to the Offering and on behalf of itself and other Agents), and an escrow agent mutually acceptable to LEAF and Eight Capital.
Tax Act	means the_Income Tax Act_(Canada), and the regulations made pursuant thereto, all as may be amended from time to time.
Termination Event	means the earliest of: (a) the Closing Date not having occurred by 5:00 pm (Vancouver time) on that day (the "Outside Date") which is 30 days from the completion of the Offering; (b) LEAF having issued a press release or provided Eight Capital, on behalf of the Agents, and the escrow agent under the Subscription Receipt Agreement, a written notice, in each case indicating that the Outside Date will occur prior to the Closing Date; (c) the Acquisition Agreement being terminated; (d) LEAF having issued a press release or provided Eight Capital, on behalf of the Agents, and the escrow agent under the Subscription Receipt Agreement, a written notice, in each case indicating that the Acquisition Agreement will be terminated or that it does not intend to proceed with the Acquisition; (e) LEAF or ESG having terminated its business and affairs or been dissolved, wound- up or liquidated; (f) LEAF having issued a press release or provided Eight Capital, on behalf of the Agents, and the escrow agent under the Subscription Receipt Agreement, a written notice, in each case indicating that LEAF or ESG will terminate its business and affairs or will be dissolved, wound-up or terminated, or that it does not intend to proceed with the Acquisition; and (g) LEAF or ESG declaring bankruptcy or becoming insolvent as described in the Subscription Receipt Agreement.
TSE	means the Toronto Stock Exchange.
TSXV	means the TSX Venture Exchange Inc.
1182533	means 1182533 B.C. Ltd., a subsidiary of LEAF.

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CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

This Circular and its schedules contain "forward-looking statements" (within the meaning of applicable securities legislation). Such forward-looking statements concern the anticipated results of LEAF, ESG and the Resulting Issuer and developments in their operations in future periods, plans related to their businesses, and other matters that may occur in the future. In particular, all statements other than historical facts included in this Circular that address activities, events or developments that management of LEAF expects or anticipates will or may occur in the future are forward-looking statements, including but not limited to statements with respect to financial and other projections as well as statements or information concerning future operating plans, objectives, performance, revenues, growth, profits or operating expenses; plans to develop, implement or adopt new products, including with respect to the Resulting Issuer's products and services; statements regarding the industry in which LEAF and ESG operate and in which the Resulting Issuer will operate; requirements for additional capital and future financing options; expansion and acceptance of the Resulting Issuer's brands and products to new markets; marketing plans; the availability of intellectual property protection for the Resulting Issuer's products; the Offering and the use of proceeds therefrom; the completion of the Acquisition, the Offering and the proceedings and transactions related thereto; and other expectations of LEAF or ESG.

In certain cases, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved".

These statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of LEAF, ESG or the Resulting Issuer to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such risks and other factors include, among others, risks related to the Acquisition; risks related to the integration of the combined businesses of LEAF and ESG; cost synergies; the historic performance of ESG being outside of LEAF's control; pro forma information; uncertainty of future revenues; competition; regulation; potential intellectual property issues; reliance on third party distributors; dependence on key executives; dependence on advertising revenue; potential requirement for further funding; IT security risks; potential conflicts of interest with proposed directors and officers; potential share price volatility; need to attract and retain qualified personnel; limited market for the trading of its securities; uncertainty as to dividends; defects, bugs or errors with products or services; changes in technology; changes to mobile devices; "cheating" programs, scam offers or black markets with respect to the Resulting Issuer's games; the unauthorized sale/purchase of virtual goods in the Resulting Issuer's games; reputational harm; declines in mobile gaming generally; COVID-19 related risks; and risks with respect to the Resulting Issuer's long term debt.

Although LEAF has attempted to identify important factors that could affect LEAF or the Resulting Issuer, unknown events may cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The forward-looking

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statements in this Circular and its schedules address only as of the date hereof. LEAF does not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date hereof to reflect the occurrence of unforeseen events other than as required by applicable law.

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DOCUMENTS INCORPORATED BY REFERENCE

Information has been incorporated by reference into this Circular from documents filed with the securities commissions or similar authorities in British Columbia, Alberta and Ontario. Copies of documents incorporated herein by reference may be obtained upon request without charge from the Company at Suite 909 - 510 Burrard Street, Vancouver, British Columbia, V6C 3A8 (telephone: 604 288-4418; email: [email protected]). Copies of documents incorporated by reference may also be accessed online at www.sedar.com. LEAF's filings through the System for Electronic Documents Analysis and Retrieval (" SEDAR ") are not incorporated by reference in this Circular, except as specifically set out herein.

The following documents, filed by LEAF with the securities commission or similar authority in British Columbia, Alberta and Ontario, are specifically incorporated by reference into, and form an integral part of, this Circular:

the joint information circular of 1182533 and LEAF dated February 14, 2020, which includes: (A) the audited financial statements of 1182533 for the period from October 10, 2018 (the incorporation date of its predecessor) to December 31, 2018, audited financial statements for the interim period ended September 30, 2019, the respective auditor's reports thereon, and the corresponding management discussion and analysis dated February 14, 2020; and (B) audited financial statements of LDRLY for the years ended December 31, 2016, 2017 and 2018, the auditor's report thereon, the unaudited financial statements for the interim period ended September 30, 2019, and the corresponding management discussion and analysis dated February 14, 2020;
audited financial statements of LEAF for the year ended December 31, 2019, and the auditor's report thereon, and the corresponding management discussion and analysis dated March 20, 2020;
unaudited financial statements of LEAF for the period ended March 31, 2020, and the corresponding management discussion and analysis dated June 1, 2020;
audited annual financial statements of 1182533 for the year ended December 31, 2019 and the auditor's report thereon;
unaudited condensed financial statements of 1182533 for the period ended March 31, 2020;
audited annual financial statements of LDRLY for the year ended December 31, 2019 and the auditor's report thereon;
unaudited condensed financial statements of LDRLY for the period ended March 31, 2020;
material change report dated April 20, 2020 with respect to LEAF's completion of its Qualifying Transaction;
unaudited condensed consolidated financial statements of LEAF (including 1182533 and LDRLY) for the period ended June 30, 2020, and the corresponding management's discussion and analysis dated August 31, 2020.

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The foregoing documents are not incorporated by reference or deemed to be incorporated by reference to the extent their contents are modified or superseded by a statement contained in this Circular or in any other subsequently filed document that is incorporated by reference or deemed to be incorporated by reference in this Circular. The modifying or superseding statement need not state that it has modified or superseded a prior statement or include any other information set forth in the document that it modifies or supersedes. The making of a modifying or superseding statement shall not be deemed an admission for any purposes that the modified or superseded statement when made, constituted a misrepresentation, an untrue statement of a material fact or an omission to state a material fact that is required to be stated or that is necessary to prevent a statement that is made from being false or misleading in the circumstances in which it was made. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute part of this Circular.

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SUMMARY

The following is a summary of information relating to LEAF, ESG and the Resulting Issuer (assuming completion of the Acquisition and Offering) and should be read together with the more detailed information and financial data and statements contained elsewhere in this Circular. This summary is provided for convenience of reference only and is qualified in its entirety by the more detailed information appearing elsewhere in this Circular and the schedules attached hereto, which information is specifically incorporated by reference into and forms an integral part of this Circular. Reference is made to the Glossary and Terms for the definitions of certain terms used in this Circular and in this summary.

The Companies

LEAF & LDRLY

LEAF is a British Columbia corporation whose common shares are listed for trading on the TSXV, and is the parent company of LDRLY.

LDRLY is a British Columbia corporation and a wholly-owned subsidiary of LEAF. Since 2013, it has been a developer and publisher of casual or idle mobile video games. To date, LDRLY's focus has been on counter culture video games, with titles including Bud Farm Idle Tycoon , Bud Farm 420 , Bud Farm Grass Roots , Bud Farm Quest for Buds, Potfarm Legacy , and Cheech & Chong Bud Farm .

The LEAF Shares have been listed on the TSXV under the symbol "LEAF" since April 21, 2020. The closing trading price per LEAF Share on October 6, 2020, the last day of trading prior to the announcement of the Acquisition on October 7, 2020, was $0.225. Trading of the LEAF Shares has been halted since such announcement, at the request of LEAF.

For further discussion of LEAF and LDRLY, please refer to Appendix A Information Concerning LEAF .

EastSide Games

ESG is a private British Columbia company based in Vancouver, British Columbia. It is a publisher and developer of mobile games. Founded in 2011 by game industry veterans, ESG has created mobile games for Hollywood brands as well as Canadian brands such as The Trailer Park Boys . In 2020, ESG has been recognized with numerous awards such as a "top 50 game maker in the world" award, as one of Canada's top small and medium employers, as well as one of Canada's fastest growing companies.

Pursuant to the Acquisition Agreement, LEAF will acquire all of the outstanding securities of ESG subject to the terms and conditions thereto.

For further discussion of ESG, please refer to Appendix B Information Concerning ESG .

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The Acquisition

Pursuant to the Acquisition Agreement, LEAF will acquire all of the issued and outstanding securities of ESG for a purchase price of $150 million, subject to adjustment. In payment of the purchase price, LEAF will provide the following on closing of the Acquisition:

$50 million in cash; and
that number of LEAF Shares that is equal in amount to 50% of the issued and outstanding LEAF Shares upon completion of the Acquisition and the Offering (but excluding any LEAF Shares issued upon exercise of the Over-Allotment Option), and prior to the Consolidation, calculated on a fully-diluted basis.

Assuming the Offering is completed at the Minimum Offering Price, as at the date of the Circular, it is anticipated that 498,950,956 LEAF Shares will be issued under the Acquisition, such that there will be 975,848,958 LEAF Shares issued and outstanding upon completion of the Acquisition and the Offering (without taking into consideration LEAF Shares issuable in connection with the exercise of the Over-Allotment Option) but prior to the Consolidation, and 97,584,895 LEAF Shares following the Consolidation. If the Offering is completed at a subscription price greater than the Minimum Offering Price, there will be fewer LEAF Shares outstanding upon completion of the Acquisition and the Offering. As a result, the Acquisition and Offering, taken together, are considered to be a "reverse takeover" transaction under the policies of the TSXV.

As a condition precedent to completing the Acquisition, LEAF must complete the Offering for gross proceeds of $54 million. Additionally, LEAF must receive the conditional approval of the TSE to list the LEAF Shares for trading thereon upon completion of the Acquisition and Offering. Other conditions precedent to completing the Acquisition include obtaining all necessary shareholder and regulatory approvals (including the approval of the TSXV).

There can be no assurance or guarantee that the Acquisition will be completed on the terms and conditions described in the Circular or at all.

As a result of the Acquisition and Offering, it is anticipated that Jason Bailey, the founder, chairperson and principal of ESG, will become a "control person" of the Resulting Issuer by reason of holding more than 20% of the LEAF Shares anticipated to be outstanding following completion of the Acquisition and Offering.

See "The Acquisition" in the Circular for further discussion.

The Offering

Prior to and as a condition of completing the Acquisition, LEAF intends to offer Subscription Receipts for gross proceeds of $54 million. The Subscription Receipts will be offered at a price to be determined by LEAF and the Agents, but subject to the Minimum Offering Price of $0.22 per Subscription Receipt. It is a condition to completing the Acquisition that LEAF completes the Offering.

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Receipts sold in the Offering (to a maximum of 36,818,181 Subscription Receipts, if the Offering is completed at the Minimum Offering Price), at a price per Subscription Receipt equal to the price of the Subscription Receipts under the Offering. If the Over-Allotment Option is exercised in full, the gross proceeds from the exercise of the Over-Allotment Option will be approximately $8,100,000, the commission payable to the Agents will be $486,000, and the net proceeds to LEAF, before deducting the estimated expenses of the Offering, will be $7,614,000.

The Subscription Receipts will be governed by the Subscription Receipt Agreement, and proceeds of the Offering will be held in escrow by an escrow agent acceptable to LEAF and the Agents. If the Release Conditions are satisfied and the Acquisition has completed prior to the occurrence of a Termination Event, the Earnings, less any applicable withholding tax, will be released to holders of the Subscription Receipts. Additionally, one LEAF Share will be issued to holders of Subscription Receipts in exchange for each Subscription Receipt held by such holder, and the Escrowed Funds will be released to LEAF.

If a Termination Event occurs, the holders of the Subscription Receipts will receive notice of same, and will be entitled to a refund of the original subscription price of each Subscription Receipt held by them and any Earnings, less applicable withholding tax. The Escrowed Funds will be applied towards payment of such amounts, and LEAF will be responsible for any shortfall.

Interests of Certain Persons and Companies in Matters to be Acted On

Jason Bailey is a founder, chairperson and principal of ESG, and the proposed Chief Revenue Officer and a proposed director of the Resulting Issuer. In turn, ESG is a "control person" of LEAF by virtue of holding more than 20% of the issued and outstanding LEAF Shares as at the date of the Circular.

Additionally, LDRLY was formerly a subsidiary of ESG, and was acquired by LEAF (then "Caprice Business Development Canada Inc.") as part of its Qualifying Transaction.

Except for the foregoing, or as disclosed in the Circular, management of LEAF is unaware of any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any matter to be acted on of any director or executive officer of LEAF or anyone who has held office as such since the commencement of the last completed fiscal year of LEAF, or any other insider or proposed director or proposed executive officer, or of any associates or affiliates of the foregoing or any other informed person of LEAF in the Acquisition.

Related Party Transaction

As ESG is a "control person" of LEAF due to holding more than 20% of the issued and outstanding LEAF Shares as at the date of the Circular, the Acquisition will be a related party transaction. As such, completion of the Acquisition will be subject to, among other things, LEAF obtaining approval, by way of an ordinary resolution, of the Acquisition Resolution by minority shareholders, being those LEAF Shareholders excluding ESG or the ESG Securityholders and their respective Non-Arm's Length Parties. It is intended that the LEAF Shares currently held by ESG will be distributed to the ESG Securityholders prior to completion of the Acquisition.

LEAF intends to rely upon the "Issuer Not Listed on Specified Markets" exemption from the valuation requirement under MI 61-101.

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Board of Directors and Management

After completion of the Acquisition and the Offering, the board of directors of the Resulting Issuer will consist of five members, being Jason Bailey, Jonathan Bixby, Mike Edwards, Derek Lew, and Birgit Troy. Darcy Taylor will continue as the CEO of the Resulting Issuer, and Mark Leung and Brian Wideen will remain as CFO and VP Finance, respectively, of the Resulting Issuer. Jason Bailey will also be appointed as Chief Revenue Officer of the Resulting Issuer.

For further information regarding these individuals, please refer to the "Directors and Officers" section of Appendix C Information Concerning the Resulting Issuer .

Consolidation

Immediately following the completion of the Acquisition, it is anticipated that the LEAF Shares outstanding as at the Completion Date (including LEAF Shares issued pursuant to the Acquisition and underlying the Subscription Receipts issued pursuant to the Offering) will be consolidated on a basis of one (1) "new" share for every ten (10) "old" shares, or such lesser basis as the LEAF Board may deem appropriate.

The Consolidation is subject to the Consolidation Resolution receiving requisite approval of the LEAF Shareholders at the Meeting.

Fairness Opinion

The LEAF Board has retained Haywood Securities Inc. to provide advice with respect to the Acquisition and to provide its opinion as to the fairness, from a financial point of view, of the consideration payable under the Acquisition. Haywood Securities Inc. has provided the LEAF Board with a Fairness Opinion which states that, on the basis of the assumptions, qualifications and limitations summarized therein, in the opinion of Haywood Securities Inc., as of October 31, 2020, the consideration payable under the Acquisition is fair, from a financial point of view, to LEAF.

The Fairness Opinion addresses only the fairness of the Acquisition from a financial perspective to LEAF, and does not and should not be construed as a valuation of LEAF or ESG, or their respective assets, liabilities, or securities, or as a recommendation to any LEAF Shareholder as to how to vote at the Meeting.

Board Recommendations

The LEAF Board unanimously recommends that holders of the LEAF Shares vote in favour of the Acquisition by approving the Acquisition Resolution, and to vote in favour of the Consolidation by approving the Consolidation Resolution. The LEAF Board have unanimously approved this Circular and the delivery of it to the LEAF Shareholders.

Summary of Pro Forma Financial Information

The following is a table summarizing key information from the pro forma statement of financial position of the Resulting Issuer, as at June 30, 2020 (unaudited). A copy of such pro forma statement of financial position is attached as Appendix H.

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Totalcurrent assets	$21,568,553
Total non-current assets	$65,418,086
Totalassets	$86,986,639

Totalcurrentliabilities	$7,855,597
Totalshareholders'equity	$78,897,953

For the purposes of the pro forma statement of financial position, the completion of the Offering for gross proceeds of $54 million (i.e. without including proceeds, if any, received from exercise of the Over-Allotment Option) is assumed for related estimated costs.

Available Funds

Upon completion of the Acquisition and Offering, the Resulting Issuer will have the following funds available, without taking into consideration ongoing revenues:

Estimated consolidated working capital of LEAF as at September 30, 2020	$14,700,000
Gross proceeds from Offering	$54,000,000(1)
Agents' fees payable with respect to the Offering	($3,240,000)(1)
Cash payment to ESG Securityholders pursuant to the Acquisition	($50,000,000)(2)
Estimated remaining expenses and costs related to the Acquisition and the Offering	($1,175,000)
Estimated funds available	$14,285,000(3)

Notes:

(1) Does not contemplate the exercise of the Over-Allotment Option. See "The Acquisition - the Offering." (2) Does not include adjustments to the cash consideration payable under the Acquisition.

(3) Does not include proceeds of a loan to be made by Jason Bailey or his nominee of up to $10 million to ESG following completion of the Acquisition. See "The Acquisition - Post-Closing Loan."

Use of Available Funds

The following provides a breakdown of the Resulting Issuer's estimated expenses for the 12 month period subsequent to the completion of the Acquisition and the Offering, but without including expenses that may be incurred and funded from ongoing revenues:

Principal Purpose	Estimated Amount
Game development and publishing expenses	$9,500,000
Game launch marketing expenses	$1,250,000
General and administrative expenses for 12 month period	$2,750,000
Unallocated working capital	$785,000

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Stock Exchange Listing and Market Price of LEAF Shares

The LEAF Shares are listed for trading on the TSXV under the symbol "LEAF".

On October 6, 2020, the last date that the LEAF Shares traded on the TSXV prior to the date on which the Acquisition was publicly announced on October 7, 2020, the closing trading price of the LEAF Shares on the TSXV was $0.225.

The ESG Securities are not listed for trading on any stock exchange.

As at the date of this Circular, a total of 145,123,750 LEAF Shares are currently subject to escrow, and an additional 423,252,920 LEAF Shares are anticipated to be subject to escrow in accordance with TSXV policies (assuming completion of the Offering at the Minimum Offering Price). Upon completion of the Acquisition and the Offering, it is anticipated that, if the Offering is completed at the Minimum Offering Price, 404,577,920 LEAF Shares (before effecting the Consolidation) issued, directly or indirectly, to Jason Bailey will be subject to escrow in accordance with TSXV policies. The TSXV or TSE may require that LEAF Shares held, directly or indirectly, by other ESG Securityholders be deposited in escrow. See "Description of the Securities - Escrowed Securities" under Appendix C Information Concerning the Resulting Issuer for further discussion.

Risk Factors

The Resulting Issuer will be subject to numerous risks, including but not limited to the following: risk factors with respect to the Acquisition; risks related to the integration of the combined businesses of LEAF and ESG; cost synergies; the historic performance of ESG being outside of LEAF's control; pro forma information; uncertainty of future revenues; competition; historical dependence on franchise games; historical dependence on players for in-app purchases; virtual items/economies; regulation; potential intellectual property issues; reliance on third party distributors; reliance on third party hosting services; dependence on key executives; dependence on advertising revenue; potential requirement for further funding; IT security risks; potential conflicts of interest with proposed directors and officers; potential share price volatility; need to attract and retain qualified personnel; limited market for the trading of its securities; uncertainty as to dividends; risks associated with IdleKit; defects, bugs or errors with products or services; changes in technology; changes to mobile devices; "cheating" programs, scam offers or black markets with respect to the Resulting Issuer's games; the unauthorized sale/purchase of virtual goods in the Resulting Issuer's games; reputational harm; declines in mobile gaming generally; COVID-19 related risks; and risks with respect to the Resulting Issuer's long term debt. See "Risk Factors".

Interest of Experts

No person who has prepared or certified a report described or included in this Circular has a direct or indirect interest in LEAF, ESG or their respective affiliates.

Accompanying Documents

This Circular is accompanied by several appendices, which are incorporated by reference into, form an integral part of, and should be read in conjunction with the Circular. It is recommended

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that LEAF Shareholders read the Circular, its appendices, and the Notice of Meeting applicable to them in their entirety.

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INFORMATION CIRCULAR

GENERAL PROXY INFORMATION

Unless otherwise stated, the information contained in this Circular is given as at the date hereof.

No person has been authorized by LEAF to give any information or make any representations in connection with the transactions herein described other than those contained in this Circular and, if given or made, any such information or representation must not be relied upon as having been authorized by LEAF.

All information contained in this Circular with respect to ESG has been supplied by ESG for inclusion herein, and with respect to that information, LEAF and its board of directors and officers have relied solely on ESG. Based on its due diligence conducted in this respect, LEAF has no reason to believe that this information is not accurate.

Solicitation of Proxies

This Circular is furnished in connection with the solicitation of proxies by the management of LEAF for use at the Meeting and at any adjournment(s) thereof.

The Meeting is to be held on December 11, 2020 commencing at 10:00 AM (Vancouver time) at the offices of Richards Buell Sutton LLP, 700 - 401 West Georgia, Vancouver, BC, V6B 5A1, and at any adjournments thereof, for the purposes set forth in the Notice of Meeting. Notice of the Meeting was provided to the securities commissions in each jurisdiction where LEAF is a reporting issuer under applicable securities laws.

Instruments of Proxy must be received by Odyssey Trust Company at 323 - 409 Granville Street, Vancouver, British Columbia V6C 1T2, or by fax within North America to 1 (800) 517 4553, or by internet at https://login.odysseytrust.com/pxlogin not less than 48 hours (excluding Saturdays, Sundays and holidays), before the time set for the holding of the Meeting or any adjournment(s) thereof.

The LEAF Board have fixed the record date for the Meeting on November 2, 2020 (the " Record Date "). LEAF Shareholders of record as at the Record Date are entitled to receive notice of the Meeting, as applicable, and to vote their LEAF Shares included in the list of shareholders entitled to vote at the respective meeting prepared as at the Record Date.

The instrument appointing a proxy shall be in writing and shall be executed by the shareholder or such shareholder's attorney authorized in writing or, if the shareholder is a company, under its corporate seal or by an officer or attorney thereof duly authorized. The persons named in the enclosed Instruments of Proxy are directors or officers of LEAF. Each shareholder has the right to appoint a proxyholder other than the persons designated in the applicable Instrument of Proxy, who need not be a shareholder, to attend and act for such shareholder and on such shareholder's behalf at the Meeting. To exercise such right, the names of the persons designated by management should be crossed out and the name of the shareholder's appointee should be legibly printed in the blank space provided.

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Persons Making the Solicitation

The solicitation of proxies will be primarily by mail, but proxies may be solicited personally or by telephone by directors and officers of LEAF. All costs of solicitation for the Meeting will be borne by LEAF.

LEAF may pay the reasonable costs incurred by persons who are the registered but not beneficial owners of voting securities of LEAF (such as brokers, dealers, other registrants under applicable securities laws, nominees and/or custodians) in sending or delivering copies of this Circular, the Notice of Meeting and Instrument of Proxy to the beneficial owners of such securities. LEAF will provide, without cost to such persons, upon request, additional copies of the foregoing documents required for this purpose.

Date of Information Circular

Information contained in this Circular is given as at November 3, 2020, unless otherwise indicated.

Revocability of Proxies

A LEAF Shareholder who has given a proxy may revoke it as to any matter upon which a vote has not already been cast pursuant to the authority conferred by the proxy. A LEAF Shareholder may revoke a proxy by depositing an instrument in writing, executed by him or her or his or her attorney authorized in writing:

at the offices of the registrar and transfer agent, Odyssey Trust Company at 323 - 409 Granville Street, Vancouver, British Columbia V6C 1T2, or by fax within North America to 1 (800) 517 4553, or by internet at https://login.odysseytrust.com/pxlogin not less than 48 hours (excluding Saturdays, Sundays and holidays) before the Meeting or the adjournment thereof at which the proxy is to be used;
at the registered office of LEAF at Suite 700, 401 West Georgia Street, Vancouver, British Columbia V6B 5A1, at any time up to and including the last business day preceding the day of the Meeting at which the proxy is to be used; or
with the chairperson of the Meeting on the date of the Meeting or any adjournment thereof.

A revocation of a proxy will not affect a matter on which a vote is taken before the revocation. In addition, a proxy may be revoked by the LEAF Shareholder personally attending the Meeting and voting its shares.

Exercise of Discretion by Proxy

The LEAF Shares represented by the Instrument of Proxy enclosed with the Notice of Meeting and this Circular will be voted or withheld from voting in accordance with the instructions of the shareholder on any ballot that may be called for and, if the shareholder specifies a choice with respect to any matter to be acted upon, the shares will be voted accordingly. However, if no specification is made, the shares will be voted in favour of the matters set forth in the proxy. If any amendments or variations are proposed at the Meeting or any adjournment thereof to matters set forth in the proxy and described in the Notice of Meeting and this Circular, or if any other matters properly come before the respective meetings or any adjournment thereof, the

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proxy confers upon the shareholder's nominee discretionary authority to vote on such amendments or variations or such other matters according to the best judgment of the person voting the proxy at the Meeting. At the date of this Circular, LEAF management knows of no such amendments or variations or other matters to come before the Meeting.

Signing of Proxy

The Instrument of Proxy must be signed by the shareholder or the shareholder's duly appointed attorney authorized in writing or, if the shareholder is a company, by a duly authorized officer. An Instrument of Proxy signed by a person acting as attorney or in some other representative capacity (including a representative of a corporate shareholder) should indicate that person's capacity (following his signature) and should be accompanied by the appropriate instrument evidencing qualification and authority to act.

Advice to Beneficial Holders of LEAF Shares on Voting

The information set forth in this section is of significant importance to multiple LEAF Shareholders, as a number of them do not hold LEAF Shares in their own name. LEAF Shareholders who do not hold their shares in their own name (referred to in this Circular as " Beneficial Shareholders ") should note that only proxies deposited by shareholders whose names appear on LEAF's records as the registered holders of LEAF Shares can be recognized and acted upon at the applicable meeting. If LEAF Shares are listed in an account statement provided to a LEAF Shareholder by a broker, then, in almost all cases, those LEAF Shares will not be registered in the applicable shareholder's name on LEAF's records. Such LEAF Shares will likely be registered under the name of the shareholder's broker or an agent of that broker. In Canada, the majority of such shares are registered under the name of CDS & Co. (the nominee of The Canadian Depository for Securities Limited, which acts as depository for many Canadian brokerage firms). LEAF Shares held by brokers or their agents or nominees can only be voted (for or against resolutions) upon the instructions of the Beneficial Shareholder. Without specific instructions, a broker and its agents and nominees are prohibited from voting shares for the broker's clients. Therefore, Beneficial Shareholders should ensure that instructions respecting the voting of their LEAF Shares are communicated to the appropriate person.

Applicable regulatory rules require intermediaries/brokers to seek voting instructions from Beneficial Shareholders in advance of the Meeting. Every intermediary/broker has its own mailing procedures and provides its own return instructions to clients, which should be carefully followed by Beneficial Shareholder in order to ensure that their LEAF Shares are voted at the applicable meeting. Often, the form of proxy supplied to a Beneficial Shareholder by its broker (or the agent of the broker) is identical to the form of proxy provided to registered shareholders. However, its purpose is limited to instructing the registered shareholder (the broker or agent of the broker) how to vote on behalf of the Beneficial Shareholder. The majority of brokers now delegate responsibility for obtaining instructions from clients to Broadridge Financial Solutions Inc. (" Broadridge "). Broadridge typically prepares a Voting Instruction Form (" VIF ") and mails the VIF to the Beneficial Shareholders and asks Beneficial Shareholders to return the VIF to Broadridge. Often, Beneficial Shareholders are provided with a toll-free telephone number or website address through either of which their LEAF Shares can be voted. Broadridge then tabulates the results of all instructions received and provides appropriate instructions respecting the voting of LEAF Shares to be represented at a meeting. A Beneficial Shareholder receiving a VIF from Broadridge cannot use that VIF to vote their common shares directly at the applicable meeting. The VIF must be returned to Broadridge well in advance of the Meeting in order to

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have the LEAF Shares voted at the Meeting. If you have any questions respecting the voting of LEAF Shares held through a broker or other intermediary please contact that broker or other intermediary for assistance.

Although a Beneficial Shareholder may not be recognized directly at the Meeting for the purposes of voting LEAF Shares registered in the name of his or her broker (or an agent of the broker), a Beneficial Shareholder may attend at the meeting as proxyholder for the registered shareholder and vote the LEAF Shares in that capacity. A Beneficial Shareholder who wishes to attend the Meeting and indirectly vote their LEAF Shares as proxyholder for the registered LEAF Shareholder should enter their own names in the blank space on the VIF provided to them and return the same to their broker (or the broker's agent) in accordance with the instructions provided by such broker (or agent), well in advance of the Meeting.

Voting Securities and Principal Holders of Voting Securities

The authorized capital of LEAF consists of an unlimited number of LEAF Shares, of which 213,441,250 LEAF Shares were issued and outstanding as at the date of this Circular.

Each LEAF Shareholder is entitled to one vote for each LEAF Share shown as registered in its name on the list of shareholders, which will be available for inspection at the Meeting. The LEAF Board have fixed November 2, 2020 as the record date for the Meeting. Accordingly, only LEAF Shareholders of record as at the close of business on the Record Date are entitled to receive notice of and to attend and vote and the Meeting.

A quorum will be present at the Meeting, if there are at least two LEAF Shareholders present or represented by proxy holding not less than 5% of the LEAF Shares at the Meeting.

To the best of the knowledge of LEAF's directors and senior officers, as at the Record Date, no person beneficially owns, controls or directs, directly or indirectly, shares carrying 10% or more of the voting rights attached to the LEAF Shares, except the following:

Shareholder Name	Number of Shares Beneficially Owned, Controlled or Directed, Directly or Indirectly(1)(2)	Percentage of Outstanding Shares
EastSide Games Inc.~~(3)~~	55,187,500	25.86%
Durban HoldingsLtd.~~(4)~~	50,000,000	23.43%

Notes:

(1) This information was supplied to LEAF from insider reports and beneficial ownership reports filed on SEDI, and from the beneficial shareholders themselves.

(2) The holdings represent registered and beneficial ownership, and for the purposes hereof, beneficial ownership is presumed where sole voting and dispositive power is declared without disclaiming ownership.

(3) See Appendix B - Information Concerning EastSide Games for further description. It is intended that the LEAF Shares held by EastSide Games will be distributed to the ESG Securityholders prior to completion of the Acquisition.

(4) A private British Columbia company of which Julie Hamilton is the principal.

Votes Necessary to Pass Resolutions

An ordinary resolution passed by more than 50% of affirmation votes cast by Minority Shareholders at the Meeting is required to pass the Acquisition Resolution approving the Acquisition described herein.

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A special resolution passed by more than 66.6% of affirmation votes cast by LEAF Shareholders at the Meeting is required to pass the Consolidation Resolution approving the Consolidation described herein.

The LEAF Board both unanimously recommend that LEAF Shareholders vote in favour of all resolutions.

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THE ACQUISITION

At the Meeting, LEAF Shareholders will be asked to consider and, if thought advisable, to pass the Acquisition Resolution, respectively, to approve the Acquisition and related transactions pursuant to the terms of the Acquisition Agreement. The Acquisition and the terms of the Acquisition Agreement are summarized below. This summary does not purport to be complete, and is qualified in its entirety by reference to the Acquisition Agreement, which has been filed by LEAF under its profile on SEDAR at www.sedar.com, and attached to this Circular as Appendix F.

A full description of the background, history, business, affairs, management and share structure of LEAF is contained in this Circular under Appendix A Information Concerning LEAF .

A full description of the background, history, business, affairs, management and share structure of ESG is contained in Appendix B Information Concerning ESG .

A full description of the business, affairs, management and share structure of the Resulting Issuer is contained in this Circular under Appendix C Information Concerning the Resulting Issuer.

In order to implement the Acquisition, the Acquisition Resolution must be approved by a majority of votes cast by Minority Shareholders present in person or by proxy at the Meeting in respect thereof. Additionally, the Consolidation Resolution must be approved by not less than two-thirds of the votes cast by the LEAF Shareholders present in person or by proxy at the Meeting in respect thereof. The text of the Acquisition Resolution and Consolidation Resolution are set out in Appendix D to this Circular.

Unless otherwise directed, it is management's intention to vote FOR the Acquisition Resolution and the Consolidation Resolution. If you do not specify how you want your LEAF Shares voted, the persons named as proxyholders will case the votes represented by your proxy at the Meeting FOR both resolutions.

The Acquisition and the Offering, taken together, will constitute a Reverse Takeover. Further description of the Offering follows in this Circular.

If the Acquisition and Consolidation are approved at the Meeting, and all conditions to the Acquisition (including but not limited to the completion of the Offering) are satisfied or waived in accordance with the Acquisition Agreement, the Acquisition is anticipated to take complete in December 2020.

Recommendation of the LEAF Board

The LEAF Board, having taken into consideration the Fairness Opinion and after consultation with its financial and legal advisors, has unanimously determined that the Acquisition and Consolidation are in the best interests of LEAF and fair to the LEAF Shareholders.

Accordingly, the LEAF Board unanimously recommends that LEAF Shareholders vote FOR the Acquisition Resolution and the Consolidation Resolution.

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Reasons for the Acquisition

As described above, the LEAF Board has reviewed and considered an amount of information and a number of factors relating to the Acquisition with the benefit of its financial and legal advisors. The following is a general summary of the principal reasons for the LEAF Board's unanimous recommendation that LEAF Shareholders vote for the Acquisition Resolution and Consolidation Resolution:

Scale . Management of LEAF expects that the ownership of ESG will make LEAF one of Canada's largest mobile gaming companies, and will thus increase its potential for net revenues, as well as allowing LEAF to expand its range of investors upon graduation to the TSE;
Synergies . Acquiring ESG is anticipated to result in synergies for user acquisition, monetization and development, allowing for greater efficiencies and a reduction in overlapping costs across various business pillars. It is also anticipated that synergies will arise with respect to the administrative and finance sides of LEAF's business.
Technology : Acquiring ESG will also entitle LEAF beneficial ownership over ESG's "IdleKit" platform, which is a key part of the Acquisition and expected to be a significant differentiator for LEAF following completion of the Acquisition.
Team : On completion of the Acquisition, LEAF's team, inclusive of ESG members, will be broadened and deepened at all levels;
Fairness Opinion . Haywood Securities Inc. has provided its opinion that, as at October 31, 2020, and subject to the assumptions and limitations set out therein, the consideration payable under the Acquisition is fair, from a financial perspective, to LEAF;
Procedural Safeguards. For the Acquisition to proceed, (i) the Acquisition Resolution must be approved by not less than a majority of the Minority Shareholders at the Meeting; and (ii) the Offering must be completed;
Continued Participation . LEAF Shareholders, through their ownership of LEAF Shares, will continue to participate in the value creation associated with the Resulting Issuer.

In view of the wide variety of factors and information considered in connection with its evaluation of the Acquisition, the LEAF Board did not find it practicable to, and therefore did not, quantify or otherwise attempt to assign any relative weight to each specific factor or item of information considered in reaching its conclusions and recommendations. In addition, individual members of the LEAF Board may have given different weights to different factors or items of information.

Fairness Opinion

By letter agreement dated October 23, 2020, the LEAF Board retained Haywood Securities Inc. (" Haywood ") to evaluate the fairness, from a financial perspective, of the consideration payable under the Acquisition to LEAF.

The Fairness Opinion provides that, as of October 31, 2020, based upon and subject to the factors referred to therein, the consideration payable under the Acquisition is fair, from a financial point of view, to LEAF.

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The full text of the Fairness Opinion, which sets forth the assumptions made, matters considered and limitations on the review undertaken in connection with the opinion, is attached as Appendix "H" to this Circular. LEAF Shareholders are urged to, and should, read the Fairness Opinion in its entirety.

Under the terms of its engagement, Haywood will be paid $150,000, plus applicable taxes, of which 50% has already been paid. In addition, LEAF Board agreed to reimburse Haywood for its reasonable out-of-pocket expenses and to indemnify Haywood and related parties against certain potential liabilities and expenses arising from its engagement.

Haywood acts as a trader and dealer, both as principal and agent, in major financial markets and, as such, has and may in the future have positions in the securities of LEAF, ESG or any of their respective associates or affiliates and, from time to time, may have executed or may execute transactions on behalf of such companies or clients for which it received or may receive compensation. As of October 31, 2020, Haywood’s clients and members of its pro group hold an aggregate 37,911,635 shares of LEAF. In the ordinary course of trading and brokerage activities, Haywood, the associates and affiliates thereof and the officers, directors and employees of any of them at any time may hold long or short positions, may trade or otherwise effect transactions, for their own account, for managed accounts or for the accounts of customers, in debt or equity securities of LEAF, ESG or related assets or derivative securities. As an investment dealer, Haywood conducts research on securities and may, in the ordinary course of its business, provide research reports and investment advice to its clients on investment matters, including with respect to LEAF, ESG or with respect to the Acquisition.

Neither Haywood nor any of its affiliates is an insider, associate or affiliate of LEAF, ESG, the ESG Securityholders or any of their respective associates or affiliates. Haywood acted as LEAF’s lead agent for its initial public offering in 2019 and also received compensation under its non-brokered private placement amounting to a cash finder's fee of $66,000, and 412,500 broker's warrants in connection with the completion of LEAF’s Qualifying Transaction on April 17, 2020.

Subject to the terms of its engagement, Haywood has consented to the inclusion in this Circular of the Fairness Opinion in its entirety, together with the summary herein and other information relating to Haywood and the Fairness Opinion. The Fairness Opinion was provided to the LEAF Board for its exclusive use only in considering the Acquisition and may not be relied upon by any other person or for any other purpose or published or disclosed to any other person, relied upon by any other person or used for any other purpose without Haywood's express written consent. The Fairness Opinion addresses only the fairness of the consideration payable under the Acquisition from a financial point of view and does not and should not be construed as a valuation of LEAF or ESG or their respective assets, liabilities or securities or as a recommendation to any LEAF Shareholder as to how to vote at the Meeting.

Principal Steps of the Acquisition

Pursuant to the Acquisition Agreement, LEAF will acquire all of the issued and outstanding securities of ESG on a "cash free, debt free" basis, for a purchase price of $150 million.

In consideration, the ESG Securityholders will receive, in the aggregate, the following on closing of the Acquisition:

$50 million in cash, subject to adjustment; and

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That number of LEAF Shares that will be equal in number to 50% of the issued and outstanding LEAF Shares upon completion of the Acquisition and the Offering, calculated on a fully-diluted basis (but excluding LEAF Shares underlying Subscription Receipts sold upon exercise of the Over-Allotment Option).

It is intended that, following completion of the Acquisition, ESG will be a wholly-owned subsidiary of the Resulting Issuer.

The LEAF Shares to be issued to ESG Securityholders under the Acquisition will be subject to the Consolidation on the same basis as all other LEAF Shares. Additionally, the LEAF Shares to be issued to the ESG Securityholders will be issued pursuant to exemptions from prospectus requirements available under applicable securities laws. However, the LEAF Shares to be issued to certain ESG Securityholders will be held in escrow pursuant to the policies of the TSXV and the TSE. See "Escrowed Securities" under Appendix C Information Concerning the Resulting Issuer .

Conditions to the Acquisition

Completion of the Acquisition is subject to several conditions, including the following:

LEAF shall have received all necessary approvals from its shareholders;
the completion of the Offering for minimum gross proceeds of $54 million;
the TSXV shall have granted conditional approval to the Acquisition and the Offering;
the TSE shall have granted conditional approval to the listing of the LEAF Shares for trading; and
all other consents, orders and approvals required or necessary or desirable for the completion of the Acquisition shall have been obtained.

New Control Persons of the Resulting Issuer

Upon completion of the Acquisition, it is anticipated that Jason Bailey, the founder, chairperson and principal of ESG, will hold, directly or indirectly, 404,577,920 LEAF Shares upon completion of the Acquisition and the Offering, representing 41.6% of the LEAF Shares (assuming Subscription Receipts are sold under the Offering at the Minimum Offering Price, but prior to effecting the Consolidation), on a non-diluted basis, expected to be issued and outstanding following completion of the Offering (but without taking into consideration the Over-Allotment Option). As such, Mr. Bailey will be considered a "control person" of the Resulting Issuer upon completion of the Acquisition and the Offering.

Further information regarding Mr. Bailey is provided in Appendix C Information Concerning the Resulting Issuer . As at the date of this Circular, Mr. Bailey does not hold, directly or indirectly, any LEAF Shares directly. However, ESG holds 55,187,500 (25.86%) of the issued and outstanding LEAF Shares, and it is anticipated that such shares will be distributed to the ESG Securityholders (including to a nominee of Mr. Bailey) prior to completion of the Acquisition. Due to his beneficial shareholdings in ESG, Mr. Bailey is considered to be a related party of LEAF.

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Regulatory Approvals

It is a condition of the Acquisition that the TSXV shall have conditionally approved the Acquisition and the Offering. Additionally, it is a condition of the Acquisition that the TSE shall have conditionally approved the listing of the LEAF Shares. Application to both the TSXV and TSE has been made to obtain such approval.

Any approval will be subject to LEAF satisfying the initial listing requirements of the TSXV and TSE after completion of the Acquisition and Offering. There can be no assurance as to if, or when, such approval will be obtained.

Offering

Under the Offering, LEAF intends to offer Subscription Receipts for gross proceeds of $54 million. LEAF has retained Eight Capital as its lead agent with respect to the Offering.

The price of the Subscription Receipts will be decided upon by LEAF and the Agents, subject to the Minimum Offering Price. If the Subscription Receipts are offered at the Minimum Offering Price, 245,454,546 Subscription Receipts will be offered under the Offering. If the Subscription Receipts are offered at a price greater than the Minimum Offering Price, fewer Subscription Receipts will be offered under the Offering.

The Over-Allotment Option will be granted to the Agents, exercisable at any time, in whole or in part, for a period commencing at the closing date of the Offering and ending 30 days from the closing date of the Offering to purchase up to an additional 15% of the total Subscription Receipts sold in the Offering (to a maximum of 36,818,181 Subscription Receipts, if the Offering is completed at the Minimum Offering Price), at a price per Subscription Receipt equal to the price of the Subscription Receipts under the Offering. If the Over-Allotment Option is exercised in full, the gross proceeds from the exercise of the Over-Allotment Option will be approximately $8,100,000, the commission payable to the Agents will be $486,000, and the net proceeds to LEAF, before deducting the estimated expenses of the Offering, will be $7,614,000.

The Subscription Receipts will be governed by the Subscription Receipt Agreement to be entered into among LEAF and Eight Capital (on behalf of the Agents), and an escrow agent mutually acceptable to them. The Escrowed Funds will be held in escrow pursuant to such agreement, and will not be released unless and until the Release Conditions have been satisfied by the earlier of that date which is 30 days from the closing of the Offering (the " Outside Date ") and the time on which a Termination Event specified by the Subscription Receipt Agreement occurs.

If the Release Conditions are satisfied prior to the occurrence of a Termination Event, the funds necessary to complete the Acquisition will be released from the Escrowed Funds, and holders of the Subscription Receipts will receive one LEAF Share in exchange for every one Subscription Receipt held, and any Earnings (less applicable withholding tax) will be released to the holders of the Subscription Receipts.

If a Termination Event occurs, holders of the Subscription Receipts will be entitled to a refund of the original subscription price for each Subscription Receipt held by them and any Earnings, less applicable withholding tax. The Escrowed Funds will be applied towards payment of such amounts, and LEAF will be responsible for any shortfall.

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As a condition to completing the Acquisition, LEAF must complete the Offering. All LEAF Shares comprised in the Subscription Receipts sold under the Offering will be subject to the Consolidation following completion of the Acquisition and Offering on the same basis as all other LEAF Shares.

LEAF has also retained the financial advisory services of Haywood. In consideration for financial advisory services provided to LEAF, Haywood will receive a work fee of $25,000, and an advisory fee equal to 2% of the aggregate net value of LEAF, which as at the date of this Circular is estimated to be approximately $960,485. The advisory fee will be payable in cash or in LEAF Shares at a deemed price per share that is equal to the price at which the Subscription Receipts are sold under the Offering, at the discretion of Haywood but subject to TSXV approval. In the event that the advisory fee is paid entirely in LEAF Shares, a maximum number of 4,365,844 LEAF Shares would be issued, assuming completion of the Offering at the Minimum Offering Price and assuming no exercise of the Over-Allotment Option.

The use of proceeds from the Offering is described in Appendix C Information Concerning the Resulting Issuer .

Consolidation

Immediately after the completion of the Acquisition and the Offering, LEAF will consolidate the LEAF Shares on the basis of one "new" share for every ten "old" shares, such that all of the issued and outstanding LEAF Shares as of the date of this Circular, the LEAF Shares issued under the Acquisition and the LEAF Shares issued under the Offering will all be subject to the Consolidation.

No fractional LEAF Shares will be issued upon implementing the Consolidation. If, as a result of the Consolidation, a LEAF Shareholder becomes entitled to a fractional LEAF Share, such fractional share will be rounded down to the nearest whole number.

The Consolidation is subject to LEAF obtaining shareholder approval with respect to the Consolidation Resolution at the Meeting. In the event that the Acquisition does not proceed, LEAF will not undertake the Consolidation.

Finder's Fee

Pursuant to an agreement dated October 14, 2020 between ESG and Haymarket Investments Inc. (" Haymarket "), ESG retained the financial advisory services of Haymarket with respect to potential mergers and/or acquisitions. In consideration, and as a result of the Acquisition, a finders' fee will be paid to Haymarket in LEAF Shares equal to 2% of the purchase price payable under the Acquisition Agreement (being $150 million), issuable in LEAF Shares at a price per share equal to the Offering price. As such, up to a maximum of 13,636,363 LEAF Shares are issuable as a finder's fee to Haymarket, assuming the Offering is completed at the Minimum Offering Price. Payment of the finder's fee is subject to LEAF obtaining the prior approval of the TSXV.

Haymarket is a private British Columbia company of which Jonathan Bixby and Mike Edwards, proposed directors of the Resulting Issuer, are principals.

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Resolutions

At the Meeting, LEAF Shareholders will be asked to consider, and if thought fit, to pass the Acquisition Resolution approving the Acquisition, and the Consolidation Resolution approving the Consolidation. The full text of both resolutions can be found in Appendix D.

The Acquisition Resolution must be approved by a majority of the Minority Shareholders casting votes, whether in person or by proxy, at the Meeting. The Consolidation Resolution must be approved by two-thirds of votes cast by LEAF Shareholders, whether in person or by proxy, at the Meeting.

Notwithstanding the approval by LEAF Shareholders of the resolutions, LEAF and ESG each reserve the right not to proceed with the Acquisition if the other conditions to the completion of the Acquisition are not satisfied or waived in accordance with the terms of the Acquisition Agreement. In the event that the Acquisition does not proceed, LEAF will not undertake the Consolidation.

SUMMARY OF THE ACQUISITION AGREEMENT

The description of the Acquisition Agreement, both below and elsewhere in this Circular, is a summary only, and is not exhaustive and is qualified in its entirety by reference to the terms of the Acquisition Agreement, which is attached as Appendix E to this Circular.

Adjustments to the Purchase Price & Escrow

Pursuant to the Acquisition Agreement, the consideration payable to the ESG Securityholders (the " Purchase Price ") is subject to adjustments for such things as cash, indebtedness, transaction expenses and working capital as at Closing. The adjusted Purchase Price will be estimated for Closing (the " Estimated Purchase Price "), with such adjustments to be confirmed when financial statements for ESG are available for the financial year ending on the Closing Date. An amount of $1 million (the " Purchase Price Adjustment Escrow ") will be held from the amounts paid at Closing and deposited in escrow for a one-year period commencing from Closing, so as to refund any overpayments with respect to such adjustments.

Additionally, the Purchase Price will be subject to adjustment for any amounts to be paid by ESG Securityholders as indemnifying parties pursuant to indemnities provided by them under the Acquisition Agreement. An amount of $5 million (the " Indemnity Escrow ") will be held from the amounts paid at Closing and deposited in escrow for a one-year period commencing from Closing, so as to fund any such adjustments. The ESG Securityholders will be responsible for any shortfalls.

For greater clarity:

In the event that the Purchase Price is more than the Estimated Purchase Price, the full amount of the Purchase Price Adjustment Escrow will be released to the ESG Securityholders, and LEAF will pay any underpayment to the ESG Shareholders.
If the Estimated Purchase Price is more than the Purchase Price, any overpayment will be withdrawn from the Purchase Price Adjustment Escrow and released to LEAF; if the Purchase Price Adjustment Escrow is insufficient to reimburse any such overpayment, the ESG Securityholders must pay the shortfall amount;

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In the event that any amounts are paid by the ESG Securityholders as indemnifying parties pursuant to the indemnities provided for in the Acquisition Agreement, such amounts will be withdrawn from the Indemnity Escrow.

Any funds remaining from the Purchase Price Adjustment Escrow and the Indemnity Escrow after expiration of the one-year period will be released to the ESG Securityholders.

Post-Closing Loan

To ensure that ESG has enough cash to meet its operational needs in the immediate short term following the Closing, Jason Bailey or his nominee will provide the Resulting Issuer with an unsecured and subordinated loan facility of $10 million, with interest accruing at 5% per annum on any amount drawn under such facility, pursuant to a separate loan agreement to be entered into by LEAF and Mr. Bailey or his nominee concurrent with the Closing.

Covenants

Covenants Regarding the Conduct of Business

The Acquisition Agreement contains certain customary covenants, including, among others, an agreement by ESG and the ESG Securityholders, until the earlier of the Closing and the time that the Acquisition Agreement is terminated in accordance with its terms, except as otherwise contemplated in the Acquisition Agreement, to conduct ESG's business in the ordinary course, subject to any orders from government authorities relating to the COVID-19 pandemic. ESG and the ESG Securityholders have agreed to use its commercially reasonable efforts to preserve intact ESG's current business organization, operations and assets, keep available the services of its present employees and agents, and maintain relations with, and the goodwill of, suppliers, customers, landlords, creditors, distributors and all other persons having business relationships with ESG.

Non-Solicitation

ESG and the ESG Securityholders have agreed that, during the term of the Acquisition Agreement, they will not, directly or indirectly, take any action to encourage, initiate or engage in discussions or negotiations with, or provide any information to, any person other than LEAF concerning the purchase, assignment or transfer of any ESG securities or the material assets of ESG or any merger, sale or similar transaction involving ESG, and will ensure that ESG does not take any such action. The ESG Securityholders have also agreed not to enter into any agreement, arrangement or understanding requiring them to abandon, terminate or fail to complete the Acquisition or breach the Acquisition Agreement.

Representations and Warranties

The Acquisition Agreement contains certain customary representations and warranties made by LEAF and the ESG Securityholders. The assertions embodied in those representations and warranties are solely for the purposes of the Acquisition Agreement. Certain representations and warranties may not be accurate or complete as of any specified date because they are qualified by certain disclosure provided by either LEAF or the ESG Securityholders providing such representations and warranties, or are subject to a standard of materiality or are qualified by a reference to material adverse effect. Therefore, LEAF Shareholders should not rely on the representations and warranties as statements of factual information.

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The Acquisition Agreement contains certain representations of Jason Bailey, Galan Akin and Joshua Nilson with respect to ESG, relating to the following: corporate status, authorization and enforceability; required authorizations; required consents; capitalization; no conflicts; corporate records; conduct of business in the ordinary course; no material adverse change; compliance with laws; authorizations; title to assets; no options to purchase ESG's assets; leased real property; material contracts; accounts receivable; intellectual property and technology; books and records; financial statements; no undisclosed liabilities; employees; employee plans; insurance; litigation; taxes; and full disclosure.

The representations, warranties and covenants of the ESG Securityholders and Messrs. Bailey, Akin and Nilson contained in the Acquisition Agreement are subject to certain exceptions and qualifications that are contained in a disclosure letter delivered by ESG concurrent with the Acquisition Agreement, which has not been appended to the Circular for reasons of confidentiality. A redacted copy of the disclosure letter can be made available to LEAF Shareholders upon request to LEAF.

The Acquisition Agreement contains certain representations and warranties of each of the ESG Securityholders relating to the following: if such ESG Securityholder is a corporation, incorporation and qualification; due authorization; no conflict; required consents; execution and binding obligation; title to the ESG Securities held by it; residence and absence of brokers.

The Acquisition Agreement contains certain representations and warranties of LEAF relating to the following: corporate status, authorization and enforceability; no conflict; required authorizations; required consents; capitalization; the LEAF Shares to be issued under the Acquisition; and litigation.

Conditions Precedent

Mutual Conditions Precedent

The respective obligations of the parties to complete the Acquisition are subject to the fulfillment, satisfaction or waiver of the following conditions on or prior to the Closing, which conditions may only be waived, in whole or in part, by the mutual consent of each of the parties:

LEAF shall have received all necessary prior approvals, including but not limited all necessary shareholder approvals and the approvals of the TSXV;
the conditional approval of the TSE with respect to the listing of the LEAF Shares shall have been obtained; and
no law is in effect that makes the consummation of the Acquisition illegal or otherwise prohibits or enjoins the parties from consummating the Acquisition;

Additional Conditions Precedent to LEAF's Obligations

LEAF is not required to complete the Acquisition unless each of the following conditions is satisfied on or before the Closing Time, which conditions are for the exclusive benefit of LEAF and may only be waived, in whole or in part, by LEAF in its sole discretion:

The representations and warranties of the ESG Securityholders set forth in the Acquisition Agreement are each true and correct as of the date of the Acquisition

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Agreement and are true and correct as of the Closing in all material respects, in each case except for representations and warranties made as of a specified date, the accuracy of which shall be determined as of such specified date;

ESG and the ESG Securityholders have fulfilled or complied in all material respects with each of its covenants and obligations contained in the Acquisition Agreement to be fulfilled or complied with by them on or prior to the Closing;
LEAF will have completed its due diligence investigations to its satisfaction;
LEAF will have received all closing items required under the Acquisition Agreement; and
the Offering shall have been completed.

Additional Conditions Precedent to the Obligations of ESG Securityholders

The ESG Securityholders are not required to complete the Acquisition unless each of the following conditions is satisfied on or before the Effective Time, which conditions are for the exclusive benefit of the ESG Securityholders and may only be waived, in whole or in part, by Jason Bailey, on behalf of himself and all other ESG Securityholders, in his sole discretion:

the representations and warranties of LEAF set forth in the Acquisition Agreement were true and correct as of the date of the Acquisition Agreement and are true and correct as of the Closing, in all material respects, except for representations and warranties made as of a specified date, the accuracy of which shall be determined as of such specified date;
LEAF shall have appointed Jason Bailey or his nominee to the LEAF Board to serve until the next annual general meeting of the LEAF Shareholders;
LEAF shall have appointed Jason Bailey as its Chief Revenue Officer, and Joshua Nilson as General Manager of ESG;
The ESG Securityholders shall have completed its due diligence investigations of LEAF to its satisfaction; and
The ESG Securityholders shall have received all closing items required under the Acquisition Agreement.

Termination

The Acquisition Agreement may be terminated prior to the Closing by:

the mutual agreement of the parties;
by either LEAF, ESG or the ESG Securityholders if:
(a) the other party is in material breach of its obligations under the Acquisition Agreement that cannot be cured on or before Closing;

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(b) if any of the Closing conditions cannot be fulfilled on or before Closing, unless such failure is due to the failure of the terminating party to perform or comply with its respective obligations under the Acquisition Agreement; or
(c) by either LEAF or ESG if the Closing has not occurred on or prior to December 31, 2020, subject to certain exemptions set out in the Acquisition Agreement.

Indemnification

Each of the ESG Securityholders will, severally (and not jointly, or jointly and severally) on a pro rata basis in proportion to their respective entitlements to the consideration payable under the Acquisition, indemnify LEAF, its affiliates and each of their respective shareholders, directors, officers, employees, agents and representatives, from losses and certain damages which may be suffered as a result of:

any breach or inaccuracy of any representation or warranty made by that ESG Securityholder in the Acquisition Agreement; or
any breach by that ESG Securityholders of any covenant or obligation to be performed by it pursuant to the Acquisition Agreement.

Claims by LEAF for the indemnification of losses are subject to a deductible of $50,000, with ESG Securityholders being liable for losses in excess of this deductible. Additionally the aggregate amount of the obligations of Messrs. Bailey, Akin and Nilson to indemnify LEAF is subject to a limit of the cash and equity consideration paid to them under the Acquisition. Such deductible and limit will not apply to gross negligence, fraud, or wilful omission.

Governing Law

The Acquisition Agreement will be governed by and interpreted and enforced in accordance with the laws of the Province of British Columbia and the federal laws of Canada applicable therein. Each Party irrevocably attorns and submits to the exclusive jurisdiction of the British Columbia courts situated in the City of Vancouver and waives objection to the venue of any proceeding in such court or that such court provides an inconvenient forum.

RISK FACTORS

In evaluating the Acquisition, LEAF Shareholders should carefully consider the following risk factors. The following risk factors are not a definitive list of all risk factors associated with the Acquisition or the Resulting Issuer. Additional risks and uncertainties, including those currently unknown or considered immaterial by LEAF, may also adversely affect the LEAF Shares and/or the business of the Resulting Issuer following the completion of the Acquisition.

In addition to the risk factors set out below, LEAF Shareholders should also carefully consider the risk factors included in the documents incorporated by reference into this Circular.

If any of the risk factors set out below or in the documents incorporated by reference into this Circular materialize, the expectations, and the predictions based on them, may need to be reevaluated.

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Risks Associated with the Acquisition

The Acquisition Agreement may be terminated in certain circumstances

Each of LEAF and ESG has the right to terminate the Acquisition Agreement in certain circumstances. Accordingly, there is no certainty, nor can LEAF provide any assurance, that the Acquisition Agreement will not be terminated by either LEAF or ESG before the completion of the Acquisition.

There can be no certainty that all conditions precedent to the Acquisition will be satisfied.

The completion of the Acquisition is subject to a number of conditions precedent, certain of which are outside the control of LEAF, including completion of the Offering. There can be no certainty, nor can LEAF provide any assurance, that these conditions will be satisfied or, if satisfied, when they will be satisfied. If the Acquisition is not completed, there is no present intention for LEAF to find an alternative transaction.

Transaction Costs

Certain costs related to the Acquisition, such as legal, accounting and certain financial advisor fees, must be paid by LEAF even if the Acquisition and/or the Offering are not completed. LEAF is liable for its own costs incurred in connection with the Acquisition and the Offering, as well as certain costs of the Agents with respect to the Offering.

Dilution

Under the terms of the Acquisition and Offering, a significant number of LEAF Shares will be offered, thus causing a dilution to existing LEAF Shareholders.

Potential Undisclosed Liabilities

Although LEAF has conducted what it believes to be a prudent and thorough level of investigation in connection with the Acquisition and has negotiated indemnities with the ESG Securityholders in the Acquisition Agreement to cover certain potential future liabilities, such indemnities may be limited and an unavoidable level of risk remains regarding any undisclosed or unknown liabilities of, or issues concerning, ESG. Following the Acquisition, it may be discovered that LEAF has acquired substantial undisclosed liabilities.

Limited Indemnities

The obligations of the ESG Securityholders in respect of certain claims under the Acquisition Agreement relating to a breach by the ESG Securityholders of a representation or warranty are subject to a deductible. Additionally, the indemnity provided by Jason Bailey, Joshua Nilson and Galan Akin with respect to the representations and warranties provided with respect to ESG are limited to a maximum threshold equal to the cash and equity consideration paid to them under the Acquisition. A limited amount of the cash consideration paid under the Acquisition is subject to escrow in order to facilitate payment of any indemnity claims made by LEAF and there can be no assurance that the ESG Securityholders will have the financial capacity to perform its indemnity obligations under the Acquisition Agreement after closing of the Acquisition. See "The Acquisition Agreement – Indemnification" for further discussion.

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Information provided with respect to ESG

All information relating to ESG contained in this Circular, including but not limited to its financial statements, has been provided to LEAF by ESG. Although LEAF has conducted what it believes to be a prudent and thorough level of investigation in connection with the Acquisition, an unavoidable level of risk remains regarding the accuracy and completeness of such information. While LEAF has no reason to believe the information provided by ESG is misleading, untrue or incomplete, except as required by law, it assumes no responsibility for the accuracy or completeness of such information or the failure by ESG to disclose events which may have occurred or may affect the completeness or accuracy of such information but which are unknown to LEAF.

Risk Associated with the Resulting Issuer

Integration of the Combined Business

The Resulting Issuer's ability to maintain and successfully operate its business depends upon the judgment and project execution skills of its senior professionals. Any management disruption or difficulties in integrating the management and operations staff of LEAF and ESG could significantly affect the Resulting Issuer's business and results of operations. The success of the Acquisition will depend, in large part, on the ability of management to realize the anticipated benefits and cost synergies from integration of the businesses of LEAF and ESG. The integration of the businesses may result in significant challenges, and management may be unable to accomplish the integration smoothly, or successfully, in a timely manner or without spending significant amounts of money. It is possible that the integration process could result in the loss of key employees, the disruption of the respective ongoing businesses or inconsistencies in standards, controls, procedures and policies that adversely affect the ability of management to maintain relationships with business partners or employees or to achieve the anticipated benefits of the Acquisition.

The integration of ESG requires the dedication of substantial effort, time and resources on the part of management, which may divert management’s focus and resources from other strategic opportunities and from operational matters during this process. There can be no assurance that the Resulting Issuer will be able to integrate the operations of the business successfully or achieve any of the synergies or other benefits that are anticipated as a result of the Acquisition. The extent to which synergies are realized and the timing of such cannot be assured.

Any inability of the Resulting Issuer to successfully integrate the operations of LEAF and ESG could have a material adverse effect on the business, financial condition and results of operations of the Resulting Issuer. The challenges involved in the integration may include, among other things, the following: the necessity of coordinating overlapping organizations and addressing possible differences in corporate cultures and management philosophies; retaining key personnel during the period between execution of the Acquisition Agreement, the completion of the Acquisition, and following completion of the Acquisition; integrating ESG into LEAF's existing accounting system and adjusting the Resulting Issuer's internal control environment to cover the operations of ESG; unforeseen expenses or delays associated with the Acquisition; performance shortfalls relative to expectations at one or both of the businesses as a result of the diversion of management's attention to the Acquisition; meeting the expectations of business partners during the period between execution of the Acquisition Agreement, completion of the Acquisition and following completion of the Acquisition with

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respect to the overall integration of the business; and unplanned costs required to integrate the business and achieve synergies.

The successful integration of the Acquisition is also subject to the risk that personnel from LEAF and ESG may not be able to work together successfully, which could adversely impact the Resulting Issuer's business, financial condition and results of operations.

Cost Synergies

Although it is anticipated that the Resulting Issuer will achieve some annual cost synergies after the Acquisition, the Resulting Issuer may or may not achieve these cost synergies imminently or at all.

LEAF and ESG continue to evaluate the Resulting Issuer's potential synergies to be realized from the Acquisition, although the Resulting Issuer's actual synergies could differ materially from current estimates. Actual cost synergies, the expenses required to realize the cost synergies and the sources of the cost synergies could differ materially, and there is no assurance that the Resulting Issuer will achieve the full amount of cost synergies or at all or that these cost synergy programs will not have other adverse effects on the Resulting Issuer's business.

Historic Performance of ESG outside of LEAF's Control

Historic and current performance of ESG's business and operations may not be indicative of the Resulting Issuer's success in future periods. The future performance of the Resulting Issuer may be influenced by, among other factors, economic downturns, long-term changes in consumer tastes, preferences and spending patterns and other factors beyond LEAF's control. As a result of any one or more of these factors, among others, the operations and financial performance of the Resulting Issuer may be negatively affected which may adversely affect the Resulting Issuer's future financial results.

Pro Forma Information

The pro forma consolidated financial information included in this Circular does not purport to be indicative of the financial information that will result from operations of the combined company. In addition, the pro forma consolidated financial information included in this Circular is based in part on certain assumptions regarding the Acquisition that LEAF believes are reasonable. There are no assurance or guarantees that such assumptions will prove to be accurate over time.

Accordingly, the pro forma consolidated financial information included in this Circular does not purport to be indicative of what LEAF's results of operations and financial condition would have been had LEAF been a combined entity during the periods presented, or what the Resulting Issuer's results of operations and financial condition will be in the future. The challenge of integrating previously independent businesses makes evaluating the Resulting Issuer's future financial prospects difficult. The Resulting Issuer's potential for future business success and operating profitability must be considered in light of the risks, uncertainties, expenses and difficulties typically encountered by recently combined companies.

In preparing the pro forma consolidated financial information in this Circular, LEAF has given effect to, among other items, the Offering and the completion of the Acquisition. While management believes that the estimates and assumptions underlying the pro forma consolidated financial information are reasonable, such assumptions and estimates may be

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materially different to the Resulting Issuer's actual experience going forward following the Acquisition.

Uncertainty of Future Revenues

The business objectives of the Resulting Issuer are described in Appendix C Information Concerning the Resulting Issuer . The Resulting Issuer's future growth and prospects will depend on its ability to expand ESG and LDRLY's current operations and gain additional revenue streams, while maintaining effective cost controls. Any failure to do so will likely have a material adverse effect on the Resulting Issuer's business, financial condition and results.

The Resulting Issuer's business will depend on developing, publishing and continuing to service games that consumers will download and spend time and money playing. It is primarily focused on mobile gaming, offering games on mobile devices, including smartphones and tablets on Apple’s iOS and Google’s Android operating systems, and on social networking platforms such as Facebook. Substantial resources have been and will be devoted to the research, development, analytics and marketing of its games. Development and marketing efforts are focused on both improving the experience of existing games (frequently through new content and feature releases for our live services) and developing new games. Revenue is primarily generated through the sale of in-game virtual items and advertising. For games distributed through third-party platforms, a portion of revenues are shared from in-game sales with the platform providers. Due to its focus on mobile gaming, these costs are expected to remain a significant operating expense. In order to remain profitable, the Resulting Issuer will need to generate sufficient bookings and revenues from existing and new game offerings to offset ongoing development, marketing and operating costs.

Successfully monetizing games is difficult, and requires that the Resulting Issuer deliver valuable and entertaining player experiences that a sufficient number of players will pay for or that the Resulting Issuer is able to otherwise sufficiently monetize its games (for example, by serving in-game advertising). The success of its games depends, in part, on unpredictable and volatile factors beyond the Resulting Issuer's control, including consumer preferences, competing games, new mobile platforms and the availability of other entertainment experiences. If its games do not meet consumer expectations, or if they are not brought to market in a timely and effective manner, the Resulting Issuer's ability to grow revenue and our financial performance will be negatively affected.

In addition to the market factors noted above, the Resulting Issuer's ability to successfully develop games for mobile platforms and its ability to achieve commercial success will depend on its ability to:

effectively market its games to existing and new players;
achieve benefits from player acquisition costs;
achieve organic growth and gain customer interest in its games through free or more efficient channels;
adapt to changing player preferences;
adapt to new technologies and feature sets for mobile and other devices;
expand and enhance games after their initial release;

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attract, retain and motivate talented and experienced game designers, product managers and engineers;
partner with mobile platforms and obtain featuring opportunities;
continue to adapt game feature sets for an increasingly diverse set of mobile devices, including various operating systems and specifications, limited bandwidth, and varying processing power and screen sizes;
minimize launch delays and cost overruns on the development of new games and features;
achieve and maintain successful customer engagement and effectively monetize our games;
maintain a quality social game experience so as to retain players;
develop games that can be built upon or become franchise games;
compete successfully against a large and growing number of existing market participants;
accurately forecast the timing and expense of operations, including game and feature development, marketing and customer acquisition, customer adoption, and success of bookings growth;
minimize and quickly resolve bugs or outages; and
acquire and successfully integrate high quality mobile game assets, personnel or companies.

Further, it is difficult to predict if, or when, games will begin to decline, the decay rate for any particular game (i.e., the speed at which the popularity and player usage for a game declines) and the commercial success of new games and features. The success of the Resulting Issuer will depend on its ability to consistently and timely launch new games and features that achieve significant popularity and have the potential to become franchise games as bookings from older games decline. It is difficult to predict with certainty when new games will be launched, as games may require longer development schedules or soft launch periods to meet quality standards and player expectations. If decay rates are higher than expected in a particular quarterly period and/or delays occur in the launch of new games that are needed to offset decay rates of older games, or if new games do not monetize well, the Resulting Issuer may not meet expectations or the expectations of securities analysts or investors for a given quarter.

These and other uncertainties make it difficult to know whether the Resulting Issuer will succeed in continuing to develop successful live service games and launch new games and features in accordance with its objectives. If it does not succeed in doing so, the business, financial condition, or results of operations of the Resulting Issuer will suffer.

Competition

The market in which the Resulting Issuer will operate is vastly competitive and fast moving, and may even grow more competitive. The gaming industry is subject to rapid changes, including

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from evolving consumer preferences and emerging technologies. Many new games are introduced in each major industry segment (mobile, web, PC and console), but only a relatively small number of game titles account for a significant portion of total revenue in each segment. Game developers and distributors vary vastly in size and resources, and some have significant resources for developing or acquiring additional games, or have a more diversified set of revenue sources than the Resulting Issuer, and may be less affected in consumer preferences, regulations or other developments that may impact the gaming industry. At the same time, management of the Resulting Issuer considers its user base to be specific and niche, with fewer competitors targeting the same user base.

As there are relatively low barriers to entry to develop mobile games, it is expected new competitors will enter the market and existing competitors will allocate more resources to develop and market competing games and applications. The proliferation of titles may make it difficult for the Resulting Issuer to differentiate itself from other developers or to compete for players without increasing its marketing expenses and development costs. There can be no guarantee that the Resulting Issuer's competitors will not develop similar or superior products to those of the Resulting Issuer, which may affect the Resulting Issuer's ability to compete.

As a subset of a larger entertainment industry, the Resulting Issuer also faces competition for leisure time, attention and discretionary spending of its game players from other non-gaming activities. Increasing competition could result in a loss of players, increasing player acquisition and retention costs, and loss of talent.

The Resulting Issuer may also face competition as between its own games. It is possible that new games or features may reduce the amount of time that players spend with other games published by the Resulting Issuer. In particular, the Resulting Issuer plans to continue to leverage its existing games to cross-promote new games and features, which may encourage players of existing games to divert some of their playing time and discretionary spending away from those existing games. If new games or features do not increase the Resulting Issuer's player base, increase the overall amount of time that players spend on its games, or generate sufficient new bookings to offset declines from existing games, the Resulting Issuer's financial results could be adversely affected.

Historical Dependence on Franchise Games

LEAF and ESG each depend on a small number of games for a majority of their respective revenue and this dependency may continue for the foreseeable future. Bookings and revenue from many games may decline over time after reaching a peak of popularity and player usage. As a result, the Resulting Issuer's success will depend on its ability to engage with players by consistently and timely launching new games and enhancing existing games with new content, features and events. Constant game enhancement requires the investment of significant resources, particularly with older games, and such costs on average have increased.

It is difficult to consistently anticipate player demand on a large scale, particularly as games are developed in new categories or new markets, including international markets and mobile platforms. If the Resulting Issuer does not successfully launch games that attract and retain a significant number of players and extend the life of its existing games, its financial results will be harmed.

Further, in order to sustain and grow revenue levels, the Resulting Issuer must attract, retain and increase the number of paying players or more effectively monetize players through

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advertising and other strategies. To retain players, the Resulting Issuer will need to devote significant resources so that its games retain their interest; similarly, the Resulting Issuer will need to devote significant resources to attract existing players to its other games. The Resulting Issuer might not succeed in its efforts to increase the monetization rates of users, particularly if it is unable to retain paying players. If the Resulting Issuer fails to grow or sustain the number of paying players, if the rates at which it attracts and retains paying players declines, or if the average amount each player pays declines, the Resulting Issuer's business may not grow and its financial results will suffer.

Historical Dependence on Players for In-App Purchases

At present, both LEAF and ESG rely on a very small portion of its total players for nearly all of revenue derived from in-app purchases (as opposed to advertisements and incentivized offers). The percentage of unique paying players for their respective largest revenue-generating free-toplay games has typically been approximately 5%, when measured as the number of unique paying users on a given day divided by the number of unique users on that day, though this percentage may fluctuate for some games during specific, relatively short time periods, such as immediately following worldwide launch, during special events or following content updates or marketing campaigns.

To significantly increase its revenue, the Resulting Issuer must increase the number of downloads of its games, increase the number of players who convert into paying players by making in-app purchases or enrolling in subscriptions, increase the amount that paying players spend in its games and/or increase the length of time players generally play its games. It might not succeed in these efforts to increase the monetization rates of its users, particularly if it does not increase the amount of social features in its games or otherwise improve its games though updates and live operations. In addition, if the current COVID-19 pandemic results in an economic downturn, the Resulting Issuer's users may reduce their discretionary spending, negatively impacting the Resulting Issuer's financial condition and revenues. If it is unable to convert non-paying players into paying players, or if it is unable to retain paying players or if the average amount of revenue generated from players does not increase or declines, the Resulting Issuer's business may not grow and its financial results may suffer.

Virtual Items/Economies

Paying players purchase virtual items in the Resulting Issuer's games because of the perceived value of these goods, which is dependent on the relative ease of obtaining an equivalent good by playing the Resulting Issuer's games. The perceived value of these virtual items can be impacted by various actions that the Resulting Issuer may take in these games, including offering discounts for virtual items, giving away virtual items in promotions or providing easier non-paid means to secure these goods. Managing game economies is difficult, and relies on management's assumptions and judgement. If the Resulting Issuer fails to manage its virtual economies properly or fail to promptly and successfully respond to any such disruption, its reputation may suffer and players may be less likely to play its games and to purchase virtual items in the future, which would cause the Resulting Issuer's business, financial condition and results of operations to suffer.

Regulation

The Resulting Issuer is subject to general business regulations and laws, as well as regulations and laws governing the internet, gaming, ecommerce and electronic devices. Existing and

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future laws and regulations may impede the Resulting Issuer's growth or strategy. These regulations and laws may cover taxation, privacy, data protection, pricing, content, copyrights, distribution, mobile communications, consumer protection, web services, websites, the characteristics and quality of products and, though the Resulting Issuer will not have any games that display cannabis or promote its use, the regulation of cannabis-related imagery and associated matters. Unfavourable changes in regulations and laws could decrease the ability of the Resulting Issuer to distribute its games, decrease demand for its games or events, thereby increasing its cost of doing business, or causing a material adverse effect on the popularity or availability of the Resulting Issuer's games, or its results of operations and financial condition.

Intellectual Property

Though the Resulting Issuer's business model will not emphasize the value of its own intellectual property in its games, any infringement of the Resulting Issuer's copyright in such games may affect the popularity of the Resulting Issuer's games.

The Resulting Issuer's games have been developed based, in part, on third-party open sourced software. The unavailability of such software will disrupt the Resulting Issuer's ability to develop games on a timely basis, and may negatively affect the Resulting Issuer's results of operations and financial condition.

The Resulting Issuer may face allegations that it has infringed the trademarks, copyrights, patents or other intellectual property rights of third parties, including from its competitors and former employers of the Resulting Issuer's personnel. Infringement and other intellectual property claims, with or without merit, can be expensive and time-consuming to litigate, and the results are difficult to predict. The Resulting Issuer may not have the financial or human resources to defend against any infringement suits that may be brought. As a result of any court judgement or settlement, the Resulting Issuer may be obligated to cancel the launch of a new product offering, stop offering certain features or a game in its entirety, pay royalties or significant settlement costs, purchase licenses, or modify the Resulting Issuer's games and features, or develop substitutes.

In addition, the Resulting Issuer uses open source software and expects to continue such use on an ongoing basis. From time to time, the Resulting Issuer may face claims from companies that incorporate open source software into their products, claiming ownership of, or demanding release of, the source code, the open source software and/or derivative works that were developed using such software, or otherwise seeking to enforce the terms of the applicable open source license. These claims could also result in litigation, require the Resulting Issuer to purchase a costly license or require the Resulting Issuer to devote additional research and development resources, any of which would have a negative effect on the Resulting Issuer and its business.

Third Party Distributors

As with most providers of mobile device apps, the Resulting Issuer will be heavily dependent, on the distribution of its games through third party distributors such as Apple App Store and Google Play app store. These third party distributors each charge a fee for the usage of their services. In the event that these third party distributors increase their fees, or cease to provide distribution services to the Resulting Issuer, the ability of the Resulting Issuer to distribute its games will decrease, which may cause a material adverse effect on the popularity or availability of the Resulting Issuer's games, or the results of its operations and financial condition.

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The Resulting Issuer will also be subject to the standard policies and terms of service of these third-party distribution platforms, which govern the promotion, distribution, content and operation generally of games on the platform. Each platform provider has broad discretion to change and interpret its terms of service and other policies with respect to developers, and those changes may be unfavorable. A platform provider may also alter how the Resulting Issuer is able to advertise on the platform, change how the personal information of its users is made available to application developers on the platform, limit the use of personal information for advertising purposes, or restrict how players can share information with their friends on the platform or across platforms. Any such changes may affect the Resulting Issuer's business, operations and financial results.

In addition, third-party platforms impose certain file size limitations, which may limit the ability of players to download some of the Resulting Issuer's games in "over-the-air" updates. Aside from these file size limitations, a larger game file size could cause players to delete games once the file size grows beyond the capacity of their devices' storage limitations or could reduce the number of downloads of these games.

Such terms of use changes may decrease the visibility or availability of the Resulting Issuer's games, limit distribution capabilities, prevent access to existing games, reduce the amount of bookings and revenue from in-game purchases, increase costs to operate on these platforms or result in the exclusion or limitation of games on such platforms. Any such changes could adversely affect the Resulting Issuer's business, financial condition or results of operations.

If the Resulting Issuer violates, or a platform provider believes it has violated, the terms of service, or if there is any change or deterioration in our relationship with these platform providers, that platform provider could limit or discontinue access to the platform. A platform provider could also limit or discontinue access to the platform if it establishes more favorable relationships with one or more of the Resulting Issuer's competitors. Any limit or discontinuation of access to any platform could adversely affect the Resulting Issuer's business, financial condition or results of operations.

The Resulting Issuer will also rely on the continued popularity, customer adoption, and functionality of third-party platforms. In the past, some of these platform providers have been unavailable for short periods of time or experienced issues with their in-app purchasing functionality. If either of these events recurs on a prolonged, or even short-term, basis or other similar issues arise that impact accessibility to the Resulting Issuer's games, access social features or purchase a license to virtual items, the Resulting Issuer's business, financial condition, results of operations or reputation may be harmed.

Third-Party Hosting

The Resulting Issuer's technology infrastructure is critical to the performance of its games and to player satisfaction. LEAF and ESG's current games and systems presently run on a distributed system, or what is commonly known as cloud computing. Significant elements of this system are operated by third-parties which would require significant time and expense to replace. This dependence is anticipated to continue. Any interruption of service that is significant and/or prolonged may adversely affect the Resulting Issuer's business, financial condition, results of operations or reputation.

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In particular, a significant portion, if not almost all, of LEAF and ESG's respective game traffic, data storage, data processing and other computing services and systems are presently hosted by Amazon Web Services (AWS). AWS provides computing and storage capacity pursuant to an agreement that continues until terminated by either party. The agreement requires AWS to provide standard computing and storage capacity and related support in exchange for timely payment. There may be disruptions, outages and other performance problems due to a variety of factors, including infrastructure changes, human or software errors and capacity constraints. If a particular game is unavailable when players attempt to access it or navigation through a game is slower than they expect, players may stop playing the game and may be less likely to return to the game as often, if at all.

Any failure, disruption or interference with the use of hosted cloud computing services and systems provided by third-parties, like AWS, could adversely impact the Resulting Issuer's business, financial condition or results of operations. If the Resulting Issuer does not effectively respond to any such interruptions, upgrade its systems as needed or continually develop technology and network architecture to accommodate traffic, its business, financial condition or results of operations could be adversely affected. Additionally, the disaster recovery systems of the Resulting Issuer and those of third-parties may not function as intended or may fail to adequately protect critical business information, which may cause interruption in service of the Resulting Issuer's games, cause security breaches or the loss of data or functionality, leading to a negative effect on business, financial condition or results of operations.

Dependence on Key Executives

The Resulting Issuer depends heavily on its ability to retain the services of management and specialized staff, and to recruit, motivate and retain other suitably skilled personnel. The loss of the services of key individuals may have an adverse effect on the business, operations, and results.

Advertising Revenue

The Resulting Issuer is dependent, in part, on advertising revenue derived from its games. The inability of the Resulting Issuer to secure advertising partners may have a material adverse effect on its business, operations and results.

Brand awareness is critical to maintaining and creating favorable relationships that the Resulting Issuer will have with players, platform providers, advertisers and content licensors, as well as competing for key talent. Increasing brand awareness requires significant investment and extensive management time to execute successfully. Further, there can be no guarantee or assurance that such efforts will succeed in increasing brand awareness. Any failure may limit the Resulting Issuer's financial results.

If any of the Resulting Issuer's games contain content considered by others to be objectionable, the Resulting Issuer may suffer damage to its reputation and brand. This risk is heightened as the Resulting Issuer's games have historically had, and will continue to have, countercultural themes. Further, third party advertisements may contain content that others consider to be objectionable. If consumers believe that the Resulting Issuer's games or third-party advertisement displayed in a game contains objectionable content, it could harm the Resulting Issuer's brand and consumers could refuse to play it and could pressure the platform providers to remove the game from their platforms.

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Further, the Resulting Issuer relies on third parties to source and manage advertisements for its games. These third parties charge a fee for their services. In the event that these third parties increase their fees, or cease to provide their services to the Resulting Issuer, the Resulting Issuer may be required to source and manage advertisements internally, which may increase its operating expenses.

In addition, internet-connected devices and operating systems controlled by third parties increasingly contain features that allow device users to disable functionality that allows for the delivery of advertising on their devices. Device and browser manufacturers may include or expand these features as part of their standard device specifications. If users elect to utilize the opt-out mechanisms in greater numbers, the Resulting Issuer's ability to deliver effective advertising campaigns on behalf of its advertisers would suffer, which could cause the Resulting Issuer's business, financial condition, or results of operations to suffer. Finally, the revenues derived from advertisements and offers is subject to seasonality, as third party advertising budgets are generally highest during the calendar year end, and decline significantly in the first quarter of the following year, which may give rise to seasonality effects in the Resulting Issuer's financial performance.

Requirement for Further Funds

Although the Resulting Issuer does not anticipate an immediate need for funding for the 12 month period following completion of the Acquisition, it may require additional financial resources to fund its long term operations. The Resulting Issuer may in the future raise any necessary additional funds through public or private financing. No assurance can be given that such additional funding will be available or, if available, that it will be on terms favourable to the Resulting Issuer.

Security

The Resulting Issuer cannot guarantee absolute protection against unauthorized attempts to access its IT systems, including malicious third party applications or denial of service attacks that may interfere with or exploit security flaws in its website. Viruses, worms and other malicious software programs could jeopardize the security of information stored in a user's computer, mobile device or in the Resulting Issuer's systems, or attempt to change the experience of players by interfering with the Resulting Issuer's ability to connect with them. If any compromise to the Resulting Issuer's security measures were to occur and any efforts to combat such breach were unsuccessful, the Resulting Issuer's reputation may be harmed, leading to an adverse effect on the Resulting Issuer's financial condition and prospects.

Share Price Volatility

The market price of the LEAF Shares may be subject to wide price fluctuations in response to many factors, including variations in the Resulting Issuer's operating results, divergence in financial results from analysts' expectations, changes in earnings estimates by stock market analysts, changes in the business prospects of the Resulting Issuer, general economic conditions, legislative changes, and other events and factors outside of the Resulting Issuer's control. In addition, stock markets have from time to time experienced extreme price and volume fluctuations, which, as well as general economic political conditions, could adversely affect the market price for the LEAF Shares.

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Need to attract and retain qualified personnel

The Resulting Issuer's success depends to a significant extent on its ability to identify, attract, hire, train and retain qualified personnel. Competition for such personnel may be intense and there can be no assurance that the Resulting Issuer will be successful in identifying, attracting, hiring and retaining such personnel in the future. If the Resulting Issuer is unable to identify, attract, hire and retain qualified personnel in the future, such inability could have a material adverse effect on its business, operating results and financial condition.

Dividends

It is not anticipated that the Resulting Issuer will pay dividends on its shares in the foreseeable future. Dividends paid by the Resulting Issuer would be subject to tax and, potentially, withholdings.

IdleKit

The Resulting Issuer's ability to attract and retain customers of the IdleKit technology and grow its related business will depend, in part, on its ability to maintain IdleKit at high levels of accessibility, reliability, scalability and performance. Interruptions in the performance of IdleKit and related services, whether due to system failures, computer viruses or physical or electronic break-ins, could affect the accessibility and performance of IdleKit. Future disruptions, outages and other performance problems may arise due to a variety of factors including infrastructure changes, introductions of new functionality, human or software errors, capacity constraints, denial of service attacks or other security-related incidents.

It may become increasingly difficult to maintain and improve the performance of IdleKit. If IdleKit is unavailable or accessibility becomes an issue, the Resulting Issuer may experience a loss of clients, lost or delayed market acceptance of our platform, delays in payment by clients, injury to the Resulting Issuer's reputation and brand, or other liabilities. In addition, to the extent that IdleKit is not upgraded as needed, or if IdleKit is not continually developed to accommodate actual and anticipated changes in technology, the Resulting Issuer's operations may be adversely affected.

Further, the software technology underlying IdleKit is complex and may contain material defects or errors, particularly when new features are first introduced or released. There can be no assurance or guarantee that IdleKit will not contain defects. Any real or perceived errors, failures, vulnerabilities, or bugs in IdleKit could result in negative publicity or lead to data security, access, retention or other performance issues, all of which could harm the Resulting Issuer's business.

Defects, Bugs, or Errors

The current products and services of LEAF and ESG, and those that will be offered by the Resulting Issuer, are extremely complex software programs and are difficult to develop and distribute. Both LEAF and ESG have, and the Resulting Issuer will have, quality controls in place to detect defects, bugs or other errors in our products and services before they are released. Nonetheless, these quality controls are subject to human error, overriding, and resource or technical constraints. In addition, the effectiveness of our quality controls and preventative measures may be negatively affected by the distribution of our workforce resulting from the COVID-19 pandemic. As such, these quality controls and preventative measures may

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not be effective in detecting all defects, bugs or errors in our products and services before they have been released into the marketplace. In such an event, the technological reliability and stability of the Resulting Issuer's products and services could be below its standards and the standards of its players and its reputation, brand and sales could be adversely affected. In addition, the Resulting Issuer could be required to, or may find it necessary to, offer a refund for the product or service, suspend the availability or sale of the product or service or expend significant resources to cure the defect, bug or error each of which could significantly harm our business and operating results.

Changes in Technology

The mobile games market could be disrupted by new technologies that could impact the Resulting Issuer's business. For example, it is anticipated that the introduction of 5G wireless networking will offer technological advancements like faster download speeds and lower latency. While these technological advancements will provide opportunities for the Resulting Issuer's business, it may also create risks if the Resulting Issuer does not adapt to these new technologies in a quick and timely manner. For example, 5G technology may result in the proliferation of game streaming services. Multiple instances of new cloud gaming services are already commercially available and new entrants like Google and Microsoft have or will announce their ability to stream games to mobile devices. Some of these new streaming entrants will also choose to publish first-party content on their platforms. Streaming technology could potentially disrupt the mobile gaming industry by enabling companies to publish crossplatform games that users can play across multiple platforms and devices. This could result in consumers choosing to play these cross-platform games rather than the Resulting Issuer's games, which are primarily available on mobile devices. If the Resulting Issuer does not appropriately adapt its business to new technologies, its business may suffer.

Changes to Mobile Devices

The Resulting Issuer's games are played on mobile devices manufactured by third parties, and it has no influence on the hardware or software of these devices. Any changes to them might negatively impact the Resulting Issuer's business. Mobile devices contain identifiers for advertisers (" IDFAs ") which currently are shared with the publishers of applications on a mobile device. Publishers use these IDFAs for a variety of business purposes, among others for measuring advertising, generating advertising revenue, performing application user level analytics, and targeting users in marketing campaigns.

In November 2020, Apple released its new iOS 14 operating system. As a result, the IDFAs of Apple's mobile devices will no longer be available by default to mobile application publishers. Instead, the IDFA will only be accessible to the application publisher if a user gives the publisher permission to access his or her IDFA by expressly consenting to this access. It is anticipated that only a minority of users who upgrade their Apple devices to iOS 14 will consent to the Resulting Issuer accessing their IDFA. This may lead to a number of challenges including:

difficulty measuring the effectiveness of user acquisition campaigns;
difficulty optimizing user acquisition campaigns to deliver return on investment;
difficulty projecting the potential return of user acquisition campaigns;
a negative impact to advertising revenue;

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challenges migrating from IDFA to other identifiers for the purposes of analytics thereby introducing risk to our core data infrastructure;
difficulties formulating new marketing strategies that are as effective as the IDFA-driven marketing strategies LEAF and ESG currently employ; and
challenges updating a wide variety of software development kits utilized across the Resulting Issuer's portfolio of games to be in compliance with iOS14.

These challenges may negatively impact the Resulting Issuer's operations, including its financial performance.

"Cheating" programs, scam offers, black-markets

Unrelated third parties have developed, and may continue to develop, "cheating" programs, scam offers, black-markets and other offerings that may decrease the Resulting Issuer's revenue generated from its virtual "in game" economies, divert players from the Resulting Issuer's games or otherwise harm the Resulting Issuer. Cheating programs enable players to exploit vulnerabilities in games to obtain virtual currency or other items that would otherwise generate in-app purchases for the Resulting Issuer, or allow players to play games in automated ways or obtain unfair advantages over other players who do play fairly. Unrelated third parties may attempt to scam players of the Resulting Issuer's games with fake offers for virtual goods or other game benefits. The Resulting Issuer will devote resources to discover and disable these programs and activities, but if it is unable to do so in a prompt and timely manner, its operations may be disrupted, its reputation damaged and players may play the Resulting Issuer's games less frequently or stop playing them altogether. This may lead to lost revenue from paying players, increased cost of developing technological measures to combat these programs and activities, legal claims, and increased customer service costs needed to respond to disgruntled players.

Unauthorized Sales/Purchases of Virtual Goods

Virtual goods in the Resulting Issuer's games are not expected to have monetary value outside of its games. Nonetheless, some players may make sales and/or purchases of such virtual goods through unauthorized third-party sellers in exchange for real currency. These unauthorized or fraudulent transactions are usually arranged on third-party websites and the virtual goods offered may have been obtained through unauthorized means such as exploiting vulnerabilities in the applicable game, from scamming players with fake offers for virtual goods or other game benefits, or from credit card fraud. The Resulting Issuer will not generate any revenue from these transactions. These unauthorized purchases and sales from third-party sellers could negatively impact the Resulting Issuer's financial performance by, among other things:

decreasing revenue from authorized transactions;
creating downward pressure on the prices that the Resulting Issuer can charge for its virtual currencies or other items;
increasing chargebacks from unauthorized credit card transactions;
causing dissatisfied players to stop playing the Resulting Issuer's games;

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increasing costs incurred to develop technological measures to curtail such authorized transactions;
causing negative publicity or harm to the Resulting Issuer's reputation;
increasing customer support costs to respond to dissatisfied players.

To discourage unauthorized purchases and sales of the Resulting Issuer's virtual goods, it will be stated in the Resulting Issuer's terms of service that the buying or selling of virtual currency and virtual goods from unauthorized third party sellers may result in bans from its games or legal action. However, there can be no assurance that such efforts to prevent or minimize these unauthorized or fraudulent transactions will be successful.

Reputational Harm

Expectations regarding the quality, performance and integrity of LEAF and ESG's respective products and services are high, and it is anticipated that such expectations will continue with respect to the Resulting Issuer's products and services. Players may sometimes been critical of LEAF and ESG's respective brands, products, services, online communities, business models and/or business practices for a wide variety of reasons, including perceptions about gameplay fun, fairness, game content, features or services, or objections to certain business practices. These negative responses may not always be foreseeable. The Resulting Issuer also may not effectively manage these responses because of reasons within or outside of its control. For example, if the future implementation of new game features creates a negative perception of gameplay fairness or other negative perceptions, the Resulting Issuer's reputation and brand could be harmed and revenue could be negatively impacted. In addition, the Resulting Issuer may take actions, including delaying the release of games and delaying or discontinuing features and services for games, after taking into consideration, among other things, feedback from its community, even if such decisions negatively impact operating results in the short term. The Resulting Issuer will take any actions it may consider appropriate to address future concerns, including actions that may result in additional expenditures and the loss of revenue.

It is also intended that the Resulting Issuer will offer players safe, inclusive and fulfilling online communities. It may not be able to maintain healthy, long-term online communities within its games and services as a result of the use of those communities as forums for harassment or bullying, its inability to successfully discourage overuse of its games and services or overspending within its games and services, or due to the successful implementation of cheating programs. Although the Resulting Issuer may expend resources to maintain healthy online communities, its efforts may or may not be successful due to scale, limitations of existing technologies or other factors.

Negative sentiment about gameplay fairness, online communities, business practices, business models or game content also can lead to investigations or increased scrutiny from governmental bodies and consumer groups, as well as litigation, which, regardless of their outcome, may be costly, damaging to the Resulting Issuer's reputation and harmful to its business.

Declines in Mobile Gaming

The Resulting Issuer's future success is substantially dependent upon the continued growth of the mobile gaming market. The mobile gaming market has experienced significant revenue growth during the last several years despite an overall flattening of downloads of games on the

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app stores. The mobile gaming industry may not continue to grow at historical rates which could negatively impact the Resulting Issuer's business. In addition, new and emerging technologies could make the mobile devices on which the Resulting Issuer's games are currently released obsolete, requiring it to transition its business model to develop games for other next-generation platforms.

COVID-19

The ongoing COVID-19 pandemic and resulting social distancing and shelter-in-place orders put in place around the world have caused widespread disruption in global economies, productivity and financial markets and have materially altered the way in which many businesses conduct their day-to-day business.

As a result of the COVID-19 pandemic, both LEAF and ESG have temporarily closed their respective offices and implemented remote working programs.

The full extent to which the COVID-19 pandemic and the various responses to it impact LEAF or ESG's respective business, operations and financial results, and the Resulting Issuer's business, operations and financial results, will depend on numerous evolving factors that we may not be able to accurately predict, including: the duration and scope of the pandemic, including any potential future waves of the pandemic; governmental, business and individuals’ actions that have been and continue to be taken in response to the pandemic; the availability and cost to access the capital markets; the effect on players and their willingness and ability to pay for games and services; disruptions or restrictions on employees with respect to their ability to work and travel; and interruptions related to our cloud networking and gaming infrastructure and partners, including impacts on Amazon Web Services, mobile application platform providers, advertising partners and customer service and support providers.

If the COVID-19 crisis continues, the Resulting Issuer may not be able to provide the same level of product features and customer support that LEAF and ESG's respective players currently expect, which could negatively impact the Resulting Issuer's business and operations. While substantially all of the Resulting Issuer's business operations can be performed remotely, many of its employees are likely to juggle additional work-related and personal challenges, including preparing for a prolonged duration of remote working environments, adjusting communication and work practices to collaborate remotely with work colleagues and business partners, managing technical and communication challenges of working from home on a daily basis, looking after children as a result of remote-learning and school closures, making plans for childcare during the summer and as children prepare to return to schools, and caring for themselves, family members or other dependents who are or may become ill.

If the Resulting Issuer seeks to access the capital markets or to seek credit facilities or other debt financing, there can be no assurance that financing and credit may be available on attractive terms, if at all. The Resulting Issuer will actively monitor the issues raised by the COVID-19 pandemic and may take actions that alter LEAF and ESG's current business operations, including as may be required by federal, provincial, local or foreign authorities or that it determines are in the best interests of its employees, players, partners and shareholders.

The COVID-19 pandemic and resulting social distancing, shelter-in-place and similar restrictions led to increased player engagement from current, lapsed and new players in LEAF and ESG's respective games relative to our quarterly forecast and historic trends. These increases in player activity may not be indicative of the Resulting Issuer's financial and operating results in

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future periods. The long-term effects of the COVID-19 pandemic on society and player behavior are highly uncertain, and there is no assurance that player behavior will not decrease, including below historic levels, as the full impacts of the pandemic on society and the global economy become more clear.

In addition to the potential direct impacts to our business, the global economy has been, and is likely to continue to be, significantly weakened as a result of the actions taken in response to COVID ‐ 19, and future government intervention remains uncertain. A weakened global economy may impact players and their purchasing decisions within games, consumer buying decisions across the globe and their impact on the allocation of advertising investments, and the ability of our business partners to navigate this complex social health and economic environment, any of which could result in disruption to our business and results of our operations. The Resulting Issuer may experience heightened levels of variability in the pricing of advertising both in terms of user acquisition and as it relates to advertising revenues. If these conditions result in significant decreased pricing of advertising, the revenue derived from advertisers may be negatively impacted, particularly if the levels of player engagement are not sufficient to offset these declines, and the Resulting Issuer may experience increased pressure on its overall ‐ margins, as revenue may consist of higher contributions of sales of in game virtual items.

The duration and extent of the impact from the COVID-19 pandemic depends on future developments that cannot be accurately predicted at this time, such as the severity and transmission rate of the virus, the existence of any additional waves of the pandemic, the extent and effectiveness of containment actions, progress towards widespread rapid testing, effective treatment alternatives and a vaccine, and the impact of these and other factors on the Resulting Issuer's employees, players and business partners. If the Resulting Issuer is not able to respond to and manage the impact of such events effectively, our business may be harmed.

Resulting Issuer Debt

Concurrent with the completion of the Acquisition, the Resulting Issuer will be granted an unsecured and subordinated debt facility for up to $10 million from Jason Bailey or his nominee. As at the date of this Circular, it is not anticipated that the Resulting Issuer will have any additional long term debt outstanding.

Any debt burden of the Resulting Issuer could have important consequences, including: increasing its vulnerability to general adverse economic and industry conditions; limiting flexibility in planning for, or reacting to, changes in its business and the gaming industry; requiring the dedication of a substantial portion of any cash flows from operations for the payment of principal and interest on our indebtedness, thereby reducing the availability of cash flow to fund operations, growth strategy, working capital, capital expenditures, future business opportunities, and other general corporate purposes; restricting the Resulting Issuer from making strategic acquisitions or causing it to make non-strategic divestitures; limiting its ability to obtain additional financing for working capital, capital expenditures, research and development, acquisitions and general corporate or other purposes; limiting its ability to adjust to changing market conditions; and placing it at a competitive disadvantage relative to competitors who have lower levels of debt. Further, though it is anticipated that aforementioned debt facility will have a fixed interest rate, if and when the Resulting Issuer has borrowings at floating rates of interest, it could expose us to the risk of increased interest rates with respect to those borrowings.

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APPENDIX A

INFORMATION CONCERNING LEAF

LEAF was incorporated under the name "Caprice Business Development Canada Inc." on November 29, 2018 under the BCA. It changed its name to "Leaf Mobile Inc." on April 17, 2020.

The registered office of LEAF is located at 700 - 401 West Georgia Street, Vancouver, British Columbia V6B 5A1. Its head office is located at Suite 909 - 510 Burrard Street, Vancouver, British Columbia V6C 3A8. As at the date of this Circular, LEAF is the ultimate parent company of LDRLY.

LEAF'S BUSINESS

LEAF, through its operating subsidiary LDRLY, is a developer and publisher of mobile games.

LEAF was initially a "capital pool company," whose sole business was to identify and evaluate businesses and assets with a view to completing a "qualifying transaction" (as such terms are defined under TSXV policies). On April 17, 2020, LEAF completed an acquisition of LDRLY as its Qualifying Transaction.

Since the completion of its Qualifying Transaction, all of LEAF's primary operations are conducted through LDRLY. LDRLY, in turn, is in the business of developing and producing "counter culture" mobile games, with such titles as Cheech & Chong Bud Farm, Bud Farm Idle Tycoon, Bud Farm Grass Roots and Bud Farm 420 . For further description of LDRLY's operations, please see the joint information circular of LEAF and 1182533 dated February 14, 2020 available on SEDAR.

The following is a summary of the general development of LEAF's business since incorporation, and includes a description of all major events through that period.

Completion of IPO

On July 15, 2019, LEAF (then "Caprice Business Development Canada Inc.") completed its initial public offering (the " IPO ") of 2 million LEAF Shares for aggregate gross proceeds of $200,000, pursuant to a prospectus dated June 7, 2019. Concurrently, the LEAF Shares were listed for trading on the TSXV as a "capital pool company" under TSXV policies. In connection with the IPO, Haywood was granted an option to acquire 200,000 LEAF Shares at a price of $0.10 per share until June 15, 2021.

As a capital pool company, LEAF's sole business at the time was to identify and evaluate businesses or assets with a view to completing a qualifying transaction. Until the completion of its Qualifying Transaction, LEAF did not carry on any other active business and had no assets other than cash.

Completion of Qualifying Transaction

On July 26, 2019, LEAF entered into a letter of intent with 1182533 with respect to its Qualifying Transaction, which was subsequently formalized in an amalgamation agreement dated October 29, 2019 (the " Amalgamation Agreement ").

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Pursuant to the Amalgamation Agreement, LEAF (then "Caprice Business Development Canada Inc.") incorporated a subsidiary to amalgamate with the predecessor entity of 1182533 of same name (the " Amalgamation ").

Immediately prior to such amalgamation, this predecessor entity acquired all of the outstanding shares in LDRLY from ESG, in consideration of 55,187,500 shares of the predecessor and $1.25 million in cash. Concurrently, the predecessor entity completed a private placement financing for gross proceeds of $3.5 million.

Under the Amalgamation, all shares issued by the predecessor entity in its acquisition of LDRLY and the concurrent private placement financing, along with all other outstanding shares of the predecessor, were exchanged for LEAF Shares (which retained the "1182533 BC Ltd." name) on a one for one basis.

The Amalgamation was completed on April 17, 2020 as the Company's Qualifying Transaction. As a result, 1182533 became the wholly-owned subsidiary of LEAF; in turn, LDRLY is the wholly-owned subsidiary of 1182533. Concurrently, Caprice Business Development Canada Inc. changed its name to "LEAF Mobile Inc.", and the LEAF Shares commenced trading on the TSXV under the new symbol "LEAF" on April 21, 2020.

For further information regarding LEAF's Qualifying Transaction, please see the joint information circular of LEAF and 1182533 dated February 14, 2020, available on SEDAR.

SELECTED CONSOLIDATED FINANCIAL INFORMATION AND MANAGEMENT'S DISCUSSION & ANALYSIS

The following documents filed with the securities commissions in British Columbia, Alberta and Ontario are specifically incorporated by reference into, and form an integral part of, this Circular:

the joint information circular of 1182533 and LEAF dated February 14, 2020 with respect to the Qualifying Transaction, which includes: (A) the audited financial statements of 1182533 for the period from October 10, 2018 (the incorporation date of its predecessor) to December 31, 2018, audited financial statements for the interim period ended September 30, 2019, the respective auditor's reports thereon, and the corresponding management discussion and analysis dated February 14, 2020; and (B) audited financial statements of LDRLY for the years ended December 31, 2016, 2017 and 2018, the auditor's report thereon, the unaudited financial statements for the interim period ended September 30, 2019, and the corresponding management discussion and analysis dated February 14, 2020;
audited financial statements of LEAF for the year ended December 31, 2019, and the auditor's report thereon, and the corresponding management discussion and analysis dated March 20, 2020;
unaudited financial statements of LEAF for the period ended March 31, 2020, and the corresponding management discussion and analysis dated June 1, 2020;
audited annual financial statements of 1182533 for the year ended December 31, 2019 and the auditor's report thereon;
unaudited condensed financial statements of 1182533 for the period ended March 31, 2020;

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audited annual financial statements of LDRLY for the year ended December 31, 2019 and the auditor's report thereon;
unaudited condensed financial statements of LDRLY for the period ended March 31, 2020;
material change report dated April 20, 2020 with respect to LEAF's completion of its Qualifying Transaction;
unaudited condensed consolidated financial statements of LEAF (including 1182533 and LDRLY) for the period ended June 30, 2020, and the corresponding management's discussion and analysis dated August 31, 2020.

LEAF Shareholders may obtain copies of such documents upon request without charge from LEAF at Suite 909 - 510 Burrard Street, Vancouver, British Columbia V6C 3A8. These documents are also available online on SEDAR, which can be accessed at www.sedar.com.

DESCRIPTION OF THE SECURITIES

Subscription Receipts

Subscription Receipts issued under the Offering will be governed under the Subscription Receipt Agreement. Holders of the Subscription Receipts will not have any voting or preemptive rights, or any other rights as shareholders of LEAF (including with respect to the Meeting), and will not be entitled to receive any dividends of LEAF in respect of Subscription Receipts prior to the issue of LEAF Shares in exchange for such Subscription Receipts.

If the Release Conditions under the Subscription Receipt Agreement are met prior to a Termination Event occurring, each holder of a Subscription Receipt will receive one LEAF Share in exchange for every one Subscription Receipt held. See "The Acquisition - The Offering" in the Circular for further description.

LEAF Shares

Under the Acquisition, LEAF Shares will be issued to the ESG Securityholders.

LEAF is authorized to issue an unlimited number of LEAF Shares without nominal or par value, of which, as at the date of this Circular, 213,441,250 LEAF Shares are issued and outstanding as fully paid and non-assessable. If the Acquisition is completed, and the Offering is completed (assuming no exercise of the Over-Allotment Option) at the Minimum Offering Price, 975,848,958 LEAF Shares will be issued and outstanding on a non-diluted basis.

LEAF has also reserved 6,805,680 LEAF Shares for issuance upon exercise of the incentive stock options previously granted to the respective directors, officers, employees and consultants of LEAF and LDRLY, and 520,000 LEAF Shares for issuance upon exercise of agent's options and broker warrants previously granted as part of its initial public offering and qualifying transaction, respectively.

The holders of LEAF Shares shall be entitled to dividends if, as and when declared by the LEAF Board, to one vote per share at meetings of the LEAF Shareholders and, upon liquidation, to receive such assets of LEAF as are distributable to the holders of LEAF Shares. All of the LEAF

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Shares to be issued and outstanding upon completion of the Acquisition and the Offering will be issued as fully paid and non-assessable.

OPTIONS TO PURCHASE SECURITIES

Incentive Stock Options

LEAF has adopted an incentive stock option plan in accordance with the policies of the TSXV (the " Stock Option Plan ") which provides that the LEAF Board may from, time to time, in its discretion, grant to LEAF's directors, officers, employees and consultants of non-transferable options to purchase LEAF Shares, provided that the number of LEAF Shares reserved for issuance under the Stock Option Plan shall not exceed 10% of the issued and outstanding LEAF Shares at the time of grant, with each stock option exercisable for a period of up to 10 years from the date of issuance. In addition, the number of LEAF Shares reserved for issuance to any one person shall not exceed 5% of the issued and outstanding LEAF Shares and the number of LEAF Shares reserved for issuance to consultants or employees conducting Investor Relations Activities (as such term is defined by the TSXV) will not exceed 2% of the issued and outstanding LEAF Shares in any 12 month period.

The LEAF Board determines the price per share and the number of LEAF Shares which may be allotted to each director, officer, employee and consultant and all other terms and conditions of the option, subject to the rules of the TSXV. Options are exercisable for a period of up to 10 years. If the holder ceases to be a director, officer, employee or consultant of LEAF, such holder's options must also be exercised within 90 days from the date of termination of employment or cessation of position with LEAF, other than by reason of death. The price per LEAF Share set by the LEAF Board shall not be less than the last closing price of the LEAF Shares on the TSXV prior to the date on which such option is granted, less the applicable discount permitted (if any) by the TSXV. If prior to the exercise of an option, the holder ceases to be a director, officer, employee or consultant of LEAF, or its subsidiary, the option of the holder shall be limited to the number of shares purchasable by him/her immediately prior to the time of his/her cessation of office or employment and he/she will have no right to purchase any other shares.

Agents Options and Broker Warrants

As at the date of this Circular, there are agent's options exerciseable into 100,000 LEAF Shares at an exercise price of $0.10 per share, exercisable until July 15, 2021. There are also 420,000 brokers warrants, each exerciseable into LEAF Shares at an exercise price of $0.16 per share until April 17, 2022.

Compensation Warrants

With respect to the Offering, LEAF will be issuing compensation warrants to the Agents, each such compensation warrant entitling the holder thereof to purchase a LEAF Share at an exercise price equal to the subscription price of the Subscription Receipts under the Offering, for an exercise period of 24 months from issuance.

PRIOR SALES

The following table summarizes the LEAF Shares and securities convertible into LEAF Shares issued by LEAF during the 12 months prior to the date of this Circular.

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Date	Type of Security	No. of Securities Issued	Issue or Exercise Price per Security
April 17, 2020	LEAF Shares~~(1)~~	207,806,250	$0.16
April 17, 2020	Broker's warrants~~(1)~~	420,000	$0.16
May 19, 2020	Stock options~~(2)~~	6,185,189	$0.25
May26,2020	Stockoptions~~(2)~~	500,000	$0.25

Notes:

(1) Issued as part of LEAF's Qualifying Transaction completed April 17, 2020.

(2) Issued pursuant to LEAF's Stock Option Plan. Each such option has an exercise period of ten years. See "Information Concerning LEAF - Stock Option Plan" for further description.

STOCK EXCHANGE PRICE

The LEAF Shares are listed for trading on the TSXV under the symbol "LEAF". The following table sets forth the reported high and low sale prices and the trading volumes for the LEAF Shares on the TSXV for the periods indicated.

	Price range ($)		Volume
	High	Low
October 2020~~(1)~~	0.235	0.225	99,442
July to September 2020	0.355	0.200	6,236,398
Aprilto June2020~~(1)~~	0.490	0.200	14,751,024
January to March 2020~~(1)~~	N/A	N/A	Nil
OctobertoDecember 2019~~(1)~~	N/A	N/A	Nil
July to September 2019~~(1)~~	0.20	0.155	134,743

Notes:

(1) Trading of the LEAF Shares was halted on October 7, 2020 at a closing price of $0.225 per share, and remain halted as at the date of this Circular.

(2) Trading of the LEAF Shares was halted on August 2, 2019 upon announcement of LEAF's Qualifying Transaction at a closing price of $0.155 per share, and remained halted until April 21, 2020.

EXECUTIVE COMPENSATION

From its incorporation to April 17, 2020, the date on which LEAF completed its Qualifying Transaction, LEAF was prohibited from paying any remuneration to its executives or directors, except for the granting of stock options.

Since April 17, 2020, the executive officers of LEAF include Darcy Taylor, CEO; Mark Leung, CFO; Brian Wideen, VP Finance; and Jean Guy Niquet, LDRLY Head of Studio & Mobile.

Summary of Executive Compensation

The following table (presented in accordance with National Instrument Form 51-102F6V – Statement of Executive Compensation – Venture Issuers ) sets forth all compensation for services (excluding compensation securities) paid to LEAF's executive officers for the period from April 17, 2020 to June 30, 2020.

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	Table of compensation excluding compensation securities	Table of compensation excluding compensation securities	Table of compensation excluding compensation securities	Table of compensation excluding compensation securities	Table of compensation excluding compensation securities
Name and position	Salary, consulting fee, retainer or commission ($)	Bonus ($)	Committee or meeting fees ($)	Value of perquisites ($)	Value of all other compensation ($)	Total compensation ($)
Darcy Taylor CEO	62,500	100	N/A	N/A	N/A	62,600
Mark Leung CFO	Nil	N/A	N/A	N/A	N/A	Nil
Brian Wideen~~(1)~~ VP Finance	$12,500~~(1)~~	N/A	N/A	N/A	N/A	$12,500
Jean Guy Niquet~~(2)~~ Head of Studio & Mobile	$21,000	N/A	N/A	N/A	N/A	$21,000

Notes:

(1) Mr. Wideen was also paid an amount of $37,500, representing deferred remuneration from 1182533 for the period from September 2019 to April 2020. Mr. Wideen provides his services through Growthworks Capital Ltd.

(2) Mr. Niquet is employed through and paid by LDRLY.

Stock Options and Other Compensation Securities

The following table sets out all compensation securities granted or issued to LEAF's executive officers for the period from April 17, 2020 to June 30, 2020.

Name and Position	Type of Compensat -ion Security	Number of Compensation Securities, Number of Underlying Securities, and Percentage of Class	Date of Issue or Grant	Issue, Conversion, or Exercise Price	Closing Price of Security or Underlying Security on Date of Grant	Closing Price of Security or Underlying Security at End of Period	Expiry Date
Darcy Taylor CEO	Stock Options	2,133,063	May 19, 2020	$0.25	$0.32	$0.34	May 19, 2025
Mark Leung CFO	Stock Options	426,613	May 19, 2020	$0.25	$0.32	$0.34	May 19, 2025
Brian Wideen VP Finance	Stock Options	426,613	May 19, 2020	$0.25	$0.32	$0.34	May 19, 2025
Jean Guy Niquet Head of Studio & Mobile	Stock Options	426,613	May 19, 2020	$0.25	$0.32	$0.34	May 19, 2025

Notes:

(1) Such options are subject to vesting requirements over time, such that not all options granted are vested on the grant date.

As at the date of this Circular, none of the stock options issued by LEAF from incorporation to date have been exercised.

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Stock Option Plans and Other Incentive Plans

LEAF has a "rolling" incentive stock option plan in place, pursuant to which the maximum number of options shall not exceed 10% of the issued and outstanding LEAF Shares at the time of grant. See "Options to Purchase Securities - Incentive Stock Options" for further discussion.

The underlying purpose of the stock option plan is to attract and motivate the directors, officers, employees and consultants of LEAF and to advance the interests of LEAF by affording such persons with the opportunity to acquire an equity interest in LEAF through rights granted under the stock option plan.

LEAF has no other form of compensation plan under which its equity securities are authorized for issuance to employees or non-employees in exchange for consideration in the form of goods and services.

Employment, Consulting and Management Agreements

Mr. Taylor serves as CEO of LEAF pursuant to an employment agreement dated May 1, 2020. Pursuant to such agreement, Mr. Taylor receives a base salary of $300,000 per annum, and is eligible for an annual bonus equal to between 25% to 50% of such base salary, if LEAF and Mr. Taylor reach certain performance milestones set by the LEAF Board and its Compensation Committee. Mr. Taylor is also entitled to receive stock options (as disclosed above). Additionally, Mr. Taylor is subject to non-competition and non-solicitation covenants. In the event that Mr. Taylor's employment is terminated without cause, he will be entitled to a severance payment equal to the greater of the minimum amount required under applicable law, or the sum of 12 months base salary plus 1 month per year of employment completed, to a maximum of 18 months base salary. In the event that Mr. Taylor's employment is terminated without cause in connection with a change of control of LEAF, or if Mr. Taylor resigns from his employment within 12 months of a change of control of LEAF for reason of material diminution of his title, annual compensation, a requirement to permanently relocate his place of residence or any material breach by LEAF or its successor, Mr. Taylor will entitled to receive a severance payment equal to 12 months base salary.

Mr. Wideen provides his services through Growthworks Capital Ltd., pursuant to a services agreement dated effective January 1, 2020 between 1182533 and Growthworks Capital Ltd. Mr. Wideen's services are invoiced on a monthly basis for time spent, subject to a minimum monthly fee of $25,000 per month.

Mr. Niquet serves as Head of Studio & Mobile of LDRLY, pursuant to a written employment agreement. He receives an annual base salary of $120,000 per year, and is eligible for an annual bonus based on achieving certain performance milestones. Mr. Niquet is eligible to participate in LEAF's incentive stock option plan.

There are no written employment agreements with Messrs. Leung or Wideen.

NON-ARM'S LENGTH PARTY TRANSACTIONS

In the period since LEAF's incorporation to the date of this Circular, the only material non-arm's length party transaction entered into by LEAF was its Qualifying Transaction, which included the acquisition of LDRLY from ESG. When the Qualifying Transaction was completed, ESG was at arm's length to LEAF, and became a non-arm's length party to LEAF only as a result of the

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Qualifying Transaction. See "LEAF's Business - Completion of Qualifying Transaction" for further discussion.

LEGAL PROCEEDINGS

As at the date of this Circular, LEAF is not currently a party to any legal proceedings, nor is it currently contemplating any legal proceedings. Additionally, management of LEAF is not aware of any legal proceedings contemplated against LEAF.

AUDITOR, TRANSFER AGENT AND REGISTRAR

Auditor

The former auditor of LEAF was Dale Matheson Carr-Hilton Labonte LLP at 1500 - 1140 West Pender Street, Vancouver, British Columbia, V6E 4G1, for the year ended December 31, 2019. The current auditor of LEAF is D&H Group LLP, 10 - 1333 West Broadway, Vancouver, British Columbia, V6H 4C1.

Registrar & Transfer Agent

The registrar and transfer agent of the LEAF Shares is Odyssey Trust Company at 323 - 409 Granville Street, Vancouver, British Columbia, V6C 1T2.

MATERIAL CONTRACTS

The following are the material contracts of LEAF entered into since the date of its inception:

the agency agreement dated June 7, 2019 between LEAF and Haywood with respect to its initial public offering;
the escrow agreement dated May 31, 2019 between LEAF and Odyssey Trust Company, as escrow agent;
the transfer agent and registrar agreement dated March 20, 2019 between LEAF and Odyssey Trust Company, as transfer agent. See "Registrar & Transfer Agent" above;
the Stock Option Plan. See "Options to Purchase Securities" above;
the share purchase agreement dated October 29, 2019 among 1182533, LDRLY and ESG, pursuant to which 1182533 acquired all of the outstanding securities of LDRLY;
the finder's fee agreement dated October 24, 2019 between 1182533 and 586010 B.C. Ltd., with respect to a finder's fee paid by 1182533 with respect to its acquisition of LDRLY;
the amalgamation agreement dated October 29, 2019 among LEAF, its subsidiary and 1182533, with respect to LEAF's Qualifying Transaction; and
the Acquisition Agreement. See "The Acquisition" in the Circular.

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Copies of the material contracts described above may be inspected at the registered office of LEAF located at Suite 909 - 510 Burrard Street, Vancouver, British Columbia, V6C 3A8, during normal business hours until the date of the Meeting and for a period of 30 days thereafter.

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APPENDIX B

INFORMATION CONCERNING ESG

ESG was incorporated as "0913008 B.C. Ltd." on June 14, 2011 under the BCA. It changed its name to "EastSide Games Inc." on August 18, 2011. Its head office is located at 550 - 555 West 12th Avenue, Vancouver, British Columbia V5Z 3X7, and its registered and records office is located at PO Box 10325, 400 - 725 Granville Street, Vancouver, British Columbia, V7Y1G5.

ESG'S BUSINESS

General

ESG was founded in 2011, and is a mobile game developer and publisher, specialising in free to play (F2P) casual mobile games. Headquartered in Vancouver, British Columbia, it has almost a decade track record of producing successful titles. It received $33.64 million in revenue in 2019, and, in 2020, has already received $28.23 million in revenue by the end of its second quarter, driven by a strong portfolio of long lifecycle game franchises with loyal user base.

ESG was recently recognised on the “Top 50 Mobile Game Makers 2020” list compiled by Pocket Gamer Biz , on the “Canada’s Top Small & Medium Employers” list compiled by Canada’s Top 100 , as well as on the “Canada’s Top Growing Companies 2019” list compiled by Globe & Mail Report on Business .

In April 2020, ESG sold LDRLY to LEAF, as part of LEAF's Qualifying Transaction. Prior to this time, LDRLY was a wholly-owned subsidiary of ESG. For further discussion regarding LDRLY and LEAF's Qualifying Transaction, please see Appendix A Information Concerning LEAF .

Digital Entertainment/Mobile Game Industry

The digital entertainment and mobile game industry has undergone dramatic change over the recent past, driven by technology and consumer trends which have seen a rapid growth in mobile platforms and social media networks, as well as the heightened importance of app stores as key distribution and payment gateways.

The gaming industry is today the largest entertainment industry in the world with 2.7 billion gamers globally. In 2020, the gaming industry is expected to generate revenues of around USD 159.3 billion, growing year-on-year by +9.3%, according to Newzoo[1] . The games market is expected to continue its strong growth in the coming years. The total market will exceed USD 200 billion at the end of 2023, growing with a +8.3% CAGR, according to Newzoo.

Mobile gaming is the world’s most popular form of gaming. Mobile games are expected to reach 2.6 billion players and generate revenues of USD 77.2 billion in 2020, representing almost half of the global games market in term of revenues. The mobile games market is expected to grow by 13.3% year-on-year in 2020 and will continue to grow faster than the total games market up to 2023, according to Newzoo. Games are also the dominating category within mobile

1 Newzoo, Global Games Market Report 2020 , online at https://newzoo.com/products/reports/globalgames-market-report/.

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applications. In 2019, mobile games made up 72% of all app store spend, according to App Annie[2] .

In-game advertising provides an additional growth tenet. As mobile games become increasingly popular, advertisers have become more interested in utilizing the medium to reach consumers. Based on data from App Annie, 74% of advertising on mobile apps is delivered through games, which ESG believes reflects the realization by advertisers that gamers no longer skew younger and can be a method of reaching a wide variety of demographics. According to TechCrunch[3] , the average age of a gamer in 2019 was 36.3 versus 27.7 in 2014, and the gender mix is now 51% female. In addition, games today offer the full array of features to advertisers including fullscreen video, advanced analytics, and the ability to utilize a variety of ad formats (including banners, videos, and playable ads).

The F2P model has successfully been applied to the browser game market for years and it has now taken over the mobile segment as well. This model currently dominates the world’s single largest market, namely Asia and particularly China, and it is gaining ground across all platforms globally.

People across all age demographics play online games. The average age of a gamer is now 36.3 years of age, according to TechCrunch as described above, and according to the ESA[4] , the age of gamers is distributed fairly even across most age groups.

Casual/Incremental Games

ESG has been a developer and publisher of F2P casual or idle games on digital platforms since 2011. These games typically include evolving narrative and strategies, are easy to learn, and can be played in a few minutes or run by itself for long periods of time. They are typically suitable for play on a wide range of devices, including mobile phones and tablets.

A casual or idle game is one by which step-by-step progression is a prominent feature of the gameplay. Often, casual or idle games have a series of upgrades to the game, each of which needs to be "unlocked" by the user. The upgrade can be in a variety of forms: for example, an upgrade can be a new method of generating in-game currency or other aspects of the game that enhance or deepen gameplay. The act of "unlocking" each upgrade can be considered the game's primary feedback loop. Typically, a casual or idle game will require less attention from the player, and may often be played while the player is doing other activities. These games do not penalize the player for inactivity.

Distribution, Pricing & Marketing

ESG offers its games for free through various channels (e.g. Apple App Store, Google Play app store), though players can make "in app purchases" of virtual items priced relative to the entertainment value that they provide.

2 App Annie The State of Mobile Report 2020 , online at https://www.appannie.com/en/go/state-ofmobile-2020/.

3

Tech Crunch, "Mobile gaming is a $68.5 billion global business, and investors are buying in", online at https://techcrunch.com/2019/08/22/mobile-gaming-mints-money/, dated August 22, 2019.

4 Entertainment Software Association, Essential Facts of the Computer and Video Game Industry 2019 , May 2019, online at https://www.theesa.com/wp-content/uploads/2019/05/2019-EssentialFacts-About-the-Computer-and-Video-Game-Industry.pdf.

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Downloads of these games are promoted by ESG's "app store optimisation" (ASO) strategies, focusing on keyword targeting in each app store's native search engine. ESG also runs frequent discrete advertising campaigns, each with individual target metrics and subject to the same target return parameters, typically within a 24 hour cycle.

Advertising campaigns are also deployed across a wide mix of social and mobile channels, and cross-platform, particularly as each of ESG's games can be played on a cross-platform basis, allowing each player to switch seamlessly between devices and platforms to continue their game play wherever they have left off. Management of ESG believes that increasing awareness of its game "brands" across platforms will support the reduction of cost of "player acquisition".

Third party advertising services are utilized by ESG with the following common functions: to upload advertisements and rich media; to traffic ads according to differing business rules; to target ads to different users, in order to optimize advertisements based on results; and to report impressions, clicks, post-click and post-impression activities and interaction metrics. All of these functions are an integral part of running a mobile online advertising campaign, to ensure that advertising content is displayed where or on what feature and to whom it is intended. It also assists with analysis to gauge the effectiveness of ad campaigns, and whether the advertisement content is generating desired results. Third party ad services are provided by such parties as IronSource for ad mediation, and parties such as Pollfish (for surveys), IronSource (for 'offer wall' promotions), and various ad providers (Facebook, AdMob, IronSource, Unity Ads, Tapjoy).

Each of ESG's games are also inherently social, and provide players with features that allow them to interact with other players, such as comparative relative progress, sharing milestones, sending gifts, or asking for help. These features enhance the "virality" of ESG's games, and can attract more players without incurring direct marketing expenses. ESG's management has found that a large number of its players discover its games through such channels.

Revenue is generated through aforementioned "in app purchases," as well as "in-game" advertisements sold to third parties. These ads can be in a variety of formats, including "rewarded video", "offer walls" or surveys, all of which reward the player for their active engagement with such advertisements with bonuses for use in the game.

From time to time, ESG also hosts major and mini "events" within its games. Such events typically involve self-contained, time-limited game content that players may opt to play in return for in-game rewards and at no cost to the player, and support long-term retention of its players, that is at the heart of ESG's business model. At times, such events may include in-game appearances by celebrities. While ESG's players are able to enjoy our games for free, ESG generates revenue by selling in game ads and In-App Purchases (IAP) to a subset of players who wish to enhance their entertainment experience either through rewarded ads viewing (rewarded video, offer walls and surveys), that reward the player bonuses, time speed ups or ingame currency for actively engaging with ads or direct IAP of in game currency. ESG's approach is to make its pricing transparent and consistent throughout the game journey.

Revenue depends on ESG's continued ability to publish games on mobile platforms, primarily iOS and Android, and on social networking sites. Use of such platforms and sites are governed by the provider's respective standard terms of service. Of ESG's revenues in the year ended December 31, 2019, approximately 70% was derived from "in app" purchases of virtual items, of which the facilitating app store (eg. Apple App Store, Google Play app store, etc.) charges a fee

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of approximately 30% on average of the after-tax payments collected. 30% of revenues was derived from the sale of "in-game" advertising to third parties. See Appendix F for further discussion of ESG's past financial performance.

Through ESG's live game operations ("Live Ops") framework described above, ESG is able to continuously measure the success of its games and advertisements, with ongoing monitoring of ESG's average revenue per daily active user and other metrics for each game.

Game Portfolio

ESG currently publishes and operates five successful franchise titles in the F2P casual mobile games category, including Archer: Danger Phone, Dragon Up: Idle Adventure, The Goldbergs: Back to the 80s, It’s Always Sunny: The Gang Goes Mobile and Trailer Park Boys Grea$y Money .

Each game follows the casual or idle game format. These games each have a general comedic theme, and are primarily targeted to mature audiences, "17+".

ESG's present focus is to provide a highly engaging, differentiated entertainment experience where the combination of challenge and progress drives a sense of achievement. Its games are available for free, while players can purchase virtual items priced relative to the entertainment value they provide. ESG embeds a strong game narrative in its content, enhancing the player experience.

ESG's game titles are segmented into specific revenue and lifecycle phases:

"New" Titles or Games: these include titles that less than 12 months “live” since world-wide launch. They are in refinement stage and continually updated through Live Ops fine tuning, evolving content and features development, to rapidly grow the base of daily active users (DAU) and monthly active users (MAU) through organic installs and user acquisition marketing investment with aim to retain and monetize DAU through In App Purchases (IAP) and advertising revenue to advance the title to growth phase. Games in this category include:

Archer: Danger Phone is based on the FXX animated television show, Archer . ESG has a multi-year licensing deal with 20th Century Fox (now Disney Games). The game was built in partnership with Truly Social Games, which also manages Live Ops. It is published by ESG and built using Idlekit (discussed further below). It launched worldwide in August 2020 and is currently in its launch phase. Disney Games is paid a royalty quarterly based on game revenues. Truly Social Games also receives payment based on a partnership agreement.
The Goldbergs: Back to the 80s is based on the ABC television series, The Goldbergs . ESG has a multi-year licensing deal with Sony Pictures Television which owns all relevant intellectual property rights to the series. Sony Pictures Televisions receives a royalty payment based on game revenues. The game was built using IdleKit (discussed further below) by Lumen Games, which also manages Live Ops. It is published by Eastside Games and launched worldwide in May 2020.
Dragon UP: Idle Adventure is based on intellectual property rights created by ESG. The game was built in partnership with Night Garden Games using IdleKit. It is published by ESG, and built by Night Garden Games, which also manages Live Ops. It launched in

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March 2020 and is currently in its launch phase. Revenue is shared between Night Garden and ESG based on a publishing agreement.

"Growth" games: this category includes titles that are greater than 12 months “live” since worldwide launch. They have robust Live Ops allocation and user acquisition marketing investment priority to accelerate DAU and MAU growth improve monetization in to achieve sustainable and profitable over the long term. Games in this category include:

The Trailer Park Boys Grea$y Money is based on the Netflix series, The Trailer Park Boys . ESG has a multi-year licensing deal with TPB Acquisition Company Inc., which owns all the intellectual property rights associated with the series. The contract was renewed in 2020 for an additional 5 year term. The game was built and published by ESG, which also manages Live Ops. The game launched in April 2017. TPB Acquisition Inc. is paid a royalty quarterly based on game revenues.
Bud Farm Idle Tycoon was originally developed by ESG through LDRLY, and currently owned by LEAF through LDRLY. ESG has a partnership deal with LEAF, which owns all the rights to the associated intellectual property rights. The game was built by ESG, which also manages LiveOps. The game was built using the IdleKit framework. LEAF is the publisher. The game launched in March 2019 and is currently in its "growth" phase. ESG is paid for its marketing, UA and Live Ops cost as well as receiving a royalty based on revenue.
It's Always Sunny: The Gang Goes Mobile is based on the FX television series, It’s Always Sunny in Philadelphia . ESG has a multi-year licensing deal with FoxNext Games (now Disney Games) which is due for renewal in 2022. The game was built and published by ESG, which also manages Live Ops. It launched in July 2019. Disney Games is paid a royalty quarterly based on game revenues.

"Evergreen" games: these include titles that have surpassed 24 months “live” since worldwide launch, with passive Live Ops, limited to no user acquisition and investment minimal to no investment in terms of updates or enhancements. ESG's focus is primarily to continue sustainable revenue trends and improve profitability and ideally to return games to "growth" games status again. Games in this category include:

FUBAR: Idle Party Tycoon is based on the movie series, FUBAR . ESG has an exclusive multi-year licensing deal with Busted Tranny Productions which owns all the relevant intellectual property rights associated with the series. The game was in partnership with KANO Apps using the IdleKit framework. The game is published by and LiveOps by KANO Apps. It launched in December 2019. ESG receives a royalty based on game revenue and pays a portion of that to Busted Tranny Productions.

All payment terms referenced in the descriptions above are subject to confidentiality provisions.

Game Development

Game development focuses on creating new narrative-based game concepts, first launched across mobile platforms and on ESG's website in a fluid beta format. This format allows for constant development to occur, based on systematic player feedback derived from real-time data as well as direct player feedback. Further improvements are then made to each game, and further systemic player feedback measured, thus creating a continuous feedback loop to improve player experience.

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The internal architecture for each game is generated on a base source code shared centrally across all of the current franchise games, such that all of ESG's game studios share a base development and game operation platform. This allows a faster "development to market" timespan for each new game originating from a standard base architecture, while also lowering overall development costs, and increasing game portfolio scalability.

Game development requires a team with specialized skill and knowledge requirements. As at the date of this Circular, ESG has 100 employees in a “steady state” basis. As ESG brings forward new game development projects, it can increase the number of employees or contractors by an average of six individuals. Specialized staff is needed for operations, in such key positions as unity engineers, software engineers, senior game designers, senior game producers and senior artists. As at the date of this Circular, ESG has retained all the specialized staff that it requires.

Technology

The key components of ESG's technology "stack" used in operations includes the following:

the ESG "cloud", which is a decentralized data storage which hosts all of ESG's shared platform components. ESG's server infrastructure is located at a primary server and back-up third party data centres, located in Oregon, Virginia and Toronto;
a social network abstraction layer, which allows ESG to easily support integration of its games with different social networks, using the same code base;
a single source code base, which allows ESG to develop its games to function on both the Apple iOS and Google Android operating systems. This allows ESG to launch its games simultaneously on both platforms;
a data "warehouse", which allows ESG to process large volumes of data related to game play and related activities. This data is also collated and structured in a variety of ways, allowing for ad-hoc analysis, real time in-line analysis, and in standardized reports with respect to each ESG game;
the Live Ops framework, which provides an active, flexible and ongoing shaping of each game's narrative aspects, increasing player engagement and thus ESG's potential monetization strategies. This framework also allows for continual player data analysis and direct player communications, which in turn informs further developments and updates to each game, again increasing player engagement and potential monetization strategies.

IdleKit - Proprietary Technology

ESG's core software technology, known as ‘‘IdleKit’’, is an internally developed proprietary game framework for building narrative driven idle games quickly, thereby increasing each game's likelihood of success.

The average time to build and launch a mobile game is six to eighteen months. The game industry is inherently "hit" driven and the likelihood of any individual game succeeding is moderately low. With IdleKit, development teams can cut production time in half, decreasing the time-to-market.

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IdleKit is a software platform that ESG uses for all of its internal game builds. ESG also licenses IdleKit to third party developers on a revenue share model. Such partnerships have resulted in several titles launching, with many more in development and more than a dozen in various negotiation phases as at the date of the Circular.

IdleKit includes the following features:

A reusable game engine framework for casual or idle narrative driven game development;
Automated monetization triggers;
Ad management platform for managing ad network waterfalls to maximize revenue;
Game asset pipelines for managing content and game updates;
Greybox UI (user interface) builds where developers can quickly swap in their own art assets;
Game and event balances optimized for engagement and monetization;
Mini game frameworks to allow each game to feel unique;
Event management and best practices for Live Ops once the game launches; and
Analytics platform which allows developers to measure performance against others and know where to fix things and where they are excelling.

ESG continually improves and builds on Idlekit. Its current work in process is to extract the core components of the platform to reengineer to enter additional game genres. This additional version (or "MasterKit") will provide users with an ability to enter game genre segments and compete with mobile hits, such as Coin Master, Pet Master, Piggy Go Go, Board Kings by dramatically improving upon production speed and effectiveness. In parallel, ESG is developing a beta prototype of "Match3Kit", and is in early development of "EndlessRunnerKit", "MergeKit", "ShooterKit", "ClashKit", "CardKit", with each platform specific to a game genre.

As most of these game genres do not currently have any celebrity IP lead games, ESG is of the opinion that most of the games in these genres are clones of one another, thus creating a "white space" opportunity for its platforms.

Strategies

Broad Game Portfolio

ESG believes that the Free to Play casual mobile game segment will continue to be a strong part of the overall gaming industry, building on its consistent popularity over the last 10 years. In addition, ESG's expertise in this space has been built across multiple franchise titles. This has reduced forecasting risk, due to experience derived from its existing franchises, and as every new release adds new capability to its proprietary technology and a stronger understanding of its player base.

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Grow the Audience

To date, ESG has targeted four main methods by which it intends to grow its audience:

adding innovative features, content and services to its existing franchises in order to attract more gamers;
expanding its existing portfolio to other segments, based on market opportunity and consumer testing. ESG believes that its new games should broaden its existing audience, appealing to gamers who want different types of casual entertainment;
leveraging celebrity IP across additional content theme verticals within North America and English-speaking countries;
increasing penetration into existing major markets. Non-Western markets such as India and other Asian countries can be a significant contributor to ESG’s growth, owing to penetration of mobile phones and gaming market size.

Increase Average Revenue per Daily Active User (ARPDAU)

ESG has identified the following as possible routes to enable it to increase its ARPDAU:

invest in additional post-launch content and services (LiveOps) to increase the engagement, retention and monetization of ESG's gamers. Securing additional predictable, recurring and profitable revenues, while improving gamers’ experience and satiating their demand;
identify and develop new business models and technologies (such as paid subscription models) that more platforms will follow.

Lessen Competitive Barriers to Entry

In order to lessen competitive barriers to entry, ESG intends to:

continue to invest in developing IdleKit, in order to drive quality, further efficiencies and speed to market;
grow ESG's community in order to enable a deeper understanding of consumer behaviours and therefore deliver better and more engaging gamer experiences.

Expand IdleKit Revenue

ESG offers its IdleKit platform primarily through a SAAS license model and related services primarily through revenue-share and usage-based models. This has allowed ESG to generate revenue from its customers as they develop games and also as they succeed and grow.

Licenses for ESG's IdleKit platform drive adoption of related services offered by ESG. The IdleKit growth strategy consists of:

Investing in IdleKit Product Innovation for Growth: Continue to innovate with new products as described above, as well as new features and functionality, and continue the support of third parties to integrate their respective applications with the IdleKit platform.

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In addition, if ongoing revenues permit, ESG intends to pursue potential acquisitions of products, teams and technologies that complement and expand the functionality of IdleKit, add to its technology expertise and bolster ESG's leadership position by providing access to new customers or markets.

Growth within Existing IdleKit Customers: ESG believes that it has strong opportunities to broaden its relationships with existing customers, by expanding IdleKit licenses and related services, growing usage and increasing the variety of services customers use.

ESG intends to increase the number of its licensing of IdleKit by expanding within and across multiple studios within a single publisher. Some customers are publishers that have relations with multiple studios. When one studio achieves better quality content and improved efficiency, higher return on investment on customer acquisition, or better monetization of end-users through the use of IdleKit, ESG believes that other studios within the publisher’s portfolio or sphere of relations will also begin to adopt IdleKit, and ideally to a level where a “tipping point” is achieved, such that IdleKit becomes the standard for that customer. ESG intends to invest in targeted sales and account-based marketing efforts to identify, stimulate and communicate these opportunities to customers.

ESG also intends to grow the usage of its IdleKit related services products primarily through the success of its customers’ games and applications. Their usage of ESG's services will grow in line with their end-user adoption and engagement. The more their end-users are retained through ESG's event management and other tools, and the more that their end-users spend time in their respective games, the more revenue ESG expects to derive from such offered services.

 Grow New IdleKit Customers: Gaming continues to be the fastest growing segment of the entertainment industry, and within this growing segment, customers of all sizes are increasingly looking to leverage third party tools to accelerate the development process. Large and small mobile publishers have indicated that they increasingly find using IdleKit to be more efficient and productive than building proprietary technology in-house. Additionally, IdleKit enables mid-sized, small and independent developers and freelance artists to create and operate games where they would not otherwise have the resources to do so independently.

Games made by large global publishers represent an attractive growth opportunity for IdleKit. These studios have historically invested in their respective proprietary technology to create and operate content for the select platforms of their individual choice. Marketing efforts are focused on driving migration of such publishers from developing their own proprietary technology stacks to ESG's IdleKit platform, which ESG considers to be more time efficient and cost effective for such publishers.

Growth Across Major Global Markets outside of North America: ESG's IdleKit solutions can drive game creation around the globe. In the year ended December 31, 2019, ESG's entire revenue base was generated by customers based in Canada and the United States (US). Markets outside of the US and Canada, especially in gaming, are large and important. In 2019, the gaming market in the Asia-Pacific region alone was over $70 billion[5] . ESG intends to expand its reach in such markets to facilitate further penetration

5 NewZoo, Global Games Market Report 2019 , online at https://newzoo.com/products/reports/globalgames-market-report/.

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of its platform and to grow with new customers to increase its global footprint, and has dedicated a sales person to focus on this.

Intellectual Property

ESG's business is significantly based on the creation, acquisition, use and protection of intellectual property. Some of this intellectual property is in the form of software code and trade secrets used to develop IdleKit and ESG's games and to enable them to run properly on multiple platforms. Other intellectual property that ESG creates includes product and feature names and audio-visual elements, including graphics, music, story lines and interface design.

While most of the intellectual property that ESG uses is created by or on behalf of it, ESG may also acquire rights to proprietary intellectual property from third parties, primarily through licenses and service agreements. These licenses may limit usage of such third party intellectual property to specific uses and for specific time periods. Existing licenses agreements are used to develop and publish such titles as Archer: Danger Phone, Dragon Up: Idle Adventure, The Goldbergs: Back to the 80s, It’s Always Sunny: The Gang Goes Mobile and Trailer Park Boys Grea$y Money , as described above.

ESG protects its intellectual property rights by relying on legislative and common law protections, as well as contractual restrictions. It controls access to proprietary technology by entering into confidentiality and invention assignment agreements with employees and contractors, and confidentiality agreements with third parties.

Competitive Conditions

ESG faces significant competition in all aspects of its business. As the nature of its games is entertainment, ESG competes with business in a spectrum of industries that compete for the leisure time, attention and discretionary spending of its users, on the basis of multiple factors such as quality of experience, access and value.

Its competitors include:

existing game developers who develop products for social networks, mobile, PC and video game consoles, some of which include features that compete with the casual or idle games that ESG produces and that have similar community functions that allow such developers to engage with their players. Examples include LBC Studios Inc., Metamoki, Kongregate, Kolibri, and Hyper Hypo Games;
emerging and potential game developers who may enter into the gaming market, which may include larger companies with a significant online presence who may choose to enter into game development or otherwise increase their presence in game development; and their forms of media and entertainment, which broadly compete for user's time and attention.

Government Regulation

ESG is subject to various laws and regulations that affect companies conducting business on the Internet and mobile platforms, including those relating to privacy, use and protection of player and employee personal information and data (including the collection of data from minors), the Internet, behavioral tracking, mobile applications, content, advertising and

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marketing activities (including sweepstakes, contests and giveaways), and anti-corruption. Additional laws in all of these areas are likely to be passed in the future, which could result in significant limitations on or changes to the ways in which ESG can collect, use, host, store or transmit the personal information and data of our customers or employees, communicate with game players, and deliver products and services, and may significantly increase our compliance costs. As business expands to include new uses or collection of data that are subject to privacy or security regulations, ESG's compliance requirements and costs will increase and it may be subject to increased regulatory scrutiny.

Seasonality

Many new mobile phones and tablets are released in, or shortly before, the fourth calendar quarter to coincide with the holiday shopping season. Because many players download games soon after they purchase or receive their new devices, ESG may experience seasonal sales increases based on the holiday selling period. Some of this seasonality may also result in lags in the first calendar quarter, due to a lag between device purchases and game purchases. In addition, the advertising budgets of third parties that advertise in ESG's games are generally assumed to be highest during the fourth quarter and decline significantly in the first quarter of the following year, which may affect revenue derived from advertisements and offers in ESG's games.

COVID-19

COVID-19 has impacted the gaming industry. The pandemic and resulting containment measures had a profound impact on gaming, with over 1.2 billion weekly downloads during March to April 2020, representing a 35% increase, according to App Annie. The increase has a twofold impact on the long-term trajectory of the industry:

it introduced a contingent of non-users to mobile games, which increases the base of subscribers (although most would likely fit into the “casual” gamers category); and
it propelled significant growth in hours-played-per-week, which is a key driver of monetization.

Future Developments

While ESG continues to improve upon and evolve its existing game titles, it also continues to produce new games on an ongoing basis. In this process, it continually develops potential new narrative themes for development, whether internally or externally. External development may include the incorporation of third-party licensed brands or properties.

Product Pipeline

"Project Eggplant" is a game currently in development in partnership with Night Garden Studio. The game is targeted at an LGBTQ+ audience and using IdleKit. ESG has been granted a license to use third party intellectual property rights for the development of such game. The game will be published by ESG with LiveOps by Night Garden Studio. Both Night Garden Studio and the intellectual property licensor will be paid a royalty based on revenues as well as a minimum guarantee. It is anticipated to launch in 2021.

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"Project Lagertha" is a game currently in development by ESG using IdleKit. ESG has been granted a license to use third party intellectual property rights by NBC Universal for the development of such game. The game will be published by and LiveOps by ESG. NBC Universal will be paid a royalty based on revenues as well as a minimum guarantee. The game is anticipated to launch in 2021.

"Project Tattoo" is a game currently in development by Truly Social Games using IdleKit. It will be published by ESG while Truly Social Games manages LiveOps. The game is anticipated to launch in 2021. Revenues will be shared between ESG and Truly Social Games.

We have many other titles in various stages of negotiation, early development and pitches to intellectual property right holders. Some of which involve signed NDAs, Idlekit license agreements and other preliminary documents which are included in diligence documents. However ESG does not expect these games to be material in the near term. They are all still subject to finalized IP, partnership and publishing agreements.

SELECTED CONSOLIDATED FINANCIAL INFORMATION AND MANAGEMENT'S DISCUSSION & ANALYSIS

ESG's audited financial statements for the years ended December 31, 2019, 2018 and 2017, unaudited interim financial statements for the period ended June 30, 2020, and its corresponding management's discussion and analysis, are attached as Appendix F hereto.

EXECUTIVE COMPENSATION

For the purposes of this section, compensation information has been provided for Jason Bailey, CPO; Joshua Nilson, CEO; Galan Akin, CCO; Omar Abedelwahed, Tech Director; John Marinakis, Art Director; and James Wagner, Director of Product.

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Summary Executive Officer Compensation Table

The following table (presented in accordance with National Instrument Form 51-102F6V – Statement of Executive Compensation – Venture Issuers ) sets forth all compensation for services (excluding compensation securities) paid to ESG's executive officers for the periods indicated.

Name & Position	Year	Salary, Consulting Fee, Retainer or Commission ($)	Bonus ($)	Committee or meeting fees ($)	Value of perquisites ($)	Value of all other compensation ($)	Total compensation ($)(1)
Jason Bailey CPO	Q2 2020(1)	90,000	N/A	N/A	N/A	N/A	90,000
	2019 2018 2017	180,000 180,000 180,000	750 750 750	N/A N/A N/A	N/A N/A N/A	N/A N/A N/A	180,750 180,750 180,750
Joshua Nilson CEO	Q2 2020(1)	80,000	N/A	N/A	N/A	N/A	80,000
	2019 2018 2017	160,000 139,583 125,000	41,955 1,761 60,750	N/A N/A N/A	N/A N/A N/A	N/A N/A N/A	201,955 141,344 185,750
Galan Akin CCO	Q2 2020(1)	60,000	N/A	N/A	N/A	N/A	60,000
	2019 2018 2017	102,500 100,000 100,000	28,617 1,743 30,750	N/A N/A N/A	N/A N/A N/A	N/A N/A N/A	131,117 101,743 130,750
Omar Abdelwahed Tech Director	Q2 2020(1)	70,000	N/A	N/A	N/A	N/A	70,000
	2019 2018 2017	70,000 N/A N/A	1,040 N/A N/A	N/A N/A N/A	N/A N/A N/A	N/A N/A N/A	71,040 N/A N/A
John Marinakis Art Director	Q2 2020(1)	49,375	N/A	N/A	N/A	N/A	49,375
	2019 2018 2017	99,950 96,063 88,000	13,664 1,783 13,760	N/A N/A N/A	N/A N/A N/A	N/A N/A N/A	113,614 97,846 101,760
James Wagner Director of Product	Q2 2020(1)	50,000	N/A	N/A	N/A	N/A	50,000
	2019 2018 2017	99,083 87,500 83,000	18,153 1,655 14,881	N/A N/A N/A	N/A N/A N/A	N/A N/A N/A	117,236 89,155 97,881

Notes:

(1) For the six month period ending June 30, 2020.

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Outstanding Option Based & Share Based Awards - Executives

The following table sets out all compensation securities granted or issued to ESG's executive officers for the years ended December 31, 2019, 2018 and 2017, excepting Jason Bailey, CPO; Joshua Nilson, CEO; and Galan Akin, CCO, none of whom were granted or issued any compensation securities for the periods indicated. No compensation securities have been granted or issued to ESG's executive officers in 2020.

Name and Position	Type of Compensat -ion Security	Number of Compensation Securities, Number of Underlying Securities, and Percentage of Class	Date of Issue or Grant	Issue, Conversion, or Exercise Price	Closing Price of Security or Underlying Security on Date of Grant(1)	Closing Price of Security or Underlying Security at End of Period(1)	Expiry Date
Omar Abdelwahed Tech Director	Stock Options	25,000	June 25, 2019	$7.00	N/A	N/A	June 25, 2024
John Marinakis Art Director	Stock Options	5,250	July 4, 2019	$7.00	N/A	N/A	July 4, 2024
		5,250	July 4, 2018	$7.00	N/A	N/A	July 4, 2023
		2,500	July 4, 2017	$4.00	N/A	N/A	July 4, 2022
James Wagner Director of Product	Stock Options	2,500	April 1, 2019	$7.00	N/A	N/A	April 1, 2024
		2,500	April 1, 2018	$7.00	N/A	N/A	April 1, 2023
		10,000	March 1, 2018	$4.00	N/A	N/A	March 1, 2023
		1,500	April 1, 2017	$4.00	N/A	N/A	April 1, 2022

Notes:

(1) The ESG Securities have not been and are not listed for trading on any securities exchange.

The following table sets forth all compensation securities exercised by ESG's executive officers in the years ended December 31, 2017, 2018 and 2019, and in the interim period ended June 30, 2020.

Name and Position	Type of Compensat -ion Security	Number of Underlying Securities Exercised	Exercis e price per security ($)	Date of Exercise	Closing price per security on date of exercise ($)(1)	Difference between exercise price and closing price on date of exercise ($v)	Total value on exercise date ($)(1)
Joshua Nilson CEO	Stock Options	160,000	1.01	June 2, 2020	N/A	N/A	N/A
		80,000	4.00	June2,2020	N/A	N/A	N/A
		10,000	1.01	September 6, 2017	N/A	N/A	N/A
Galan Akin CCO	Stock Options	95,000	1.01	June 2,2020	N/A	N/A	N/A
		10,000	4.00	June2,2020	N/A	N/A	N/A
		10,000	1.01	December 19, 2019	N/A	N/A	N/A
		25,000	1.01	August 22, 2017	N/A	N/A	N/A

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		30,000	1.01	January 6, 2017	N/A	N/A	N/A
John Marinakis Art Director	Stock Options	4,500	1.01	April 27,2020	N/A	N/A	N/A
		5,000	1.01	March 3, 2017	N/A	N/A	N/A
James Wagner Director of Product	Stock Options	4,700	1.01	June 5,2020	N/A	N/A	N/A
		7,000	1.01	December 27, 2017	N/A	N/A	N/A
		5,000	1.01	March 3,2017	N/A	N/A	N/A

Notes:

(1) The ESG Securities have not been and are not listed for trading on any securities exchange. No formal valuations on ESG have been prepared through the period indicated.

Stock Option Plans and Other Incentive Plans

ESG has a "rolling" incentive stock option plan in place, pursuant to which the maximum number of options that may be reserved for issuance or issued in any 12 month period is limited to 10% of the issued and outstanding Class A Common Shares of ESG. The underlying purpose of the stock option plan is to attract and motivate the directors, officers, employees and consultants of ESG and to advance the interests of ESG by affording such persons with the opportunity to acquire an equity interest in ESG through rights granted under the stock option plan.

Pursuant to such stock option plan, all outstanding ESG stock options automatically vested upon execution of the Acquisition Agreement, and the expiry date of such options was accelerated to coincide with the Closing. It is anticipated that all outstanding ESG stock options will have been exercised prior to Closing or will expire upon Closing. The ESG stock option plan will be terminated upon Closing and subsumed by the LEAF stock option plan, which will be continued by the Resulting Issuer.

ESG has no other form of compensation plan under which its equity securities are authorized for issuance to employees or non-employees in exchange for consideration in the form of goods and services.

Employment, Consulting and Management Agreements

Each of Jason Bailey, Joshua Nilson, Galan Akin, James Wagner and John Marinakis provide their executive services to ESG pursuant to employment agreements dating back to 2011. Mr. Abdelwahed provides his executive services pursuant to employment agreements dated June 2019. Each agreement sets forth the respective base salary as at the date of the applicable agreement, which have been increased on an annual basis up to present date. If terminated without cause, each executive is entitled to the greater of one month's salary or the minimum amount required under applicable employment laws.

CAPITALIZATION

As at the date of this Circular, the capitalization of ESG is comprised of an unlimited number of Class A Common Shares, Class B Common Shares, Class A Non-Voting Preferred Shares and Class B Non-Voting Preferred Shares, of which 1,013,200 Class A Common Shares, 3,600,000 Class B Common Share, no Class A Non-Voting Preferred Shares, and no Class B Non-Voting Preferred Shares are outstanding. There are also 348,751 incentive stock options outstanding, all of which will also be included as a portion of the ESG Securities acquired under the

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Acquisition, or exercised prior to Closing such that the resulting Class A Common Shares will be included as a portion of the ESG Securities acquired under the Acquisition.

Changes to Capital Structure

In June 2020, ESG revised its capital structure to include the Class B Non-Voting Preferred Shares to accommodate a share buyback program. As at the date of this Circular, however, there are no Class B Non-Voting Preferred Shares of ESG outstanding.

PRIOR SALES

The following table describes the ESG Securities sold in the twelve month period preceding the date of this Circular:

Date	Number & Class of ESG Securities	Price per share ($)
September3,2020~~(1)~~	75 ClassACommonshares	$7.00
June 16, 2020	169,100 Class A Common shares	$4.00
June 16, 2020	297,600 Class A Common shares	$1.01
December 19, 2019	10,000 Class A Common shares	$1.01
November 5, 2019~~(1)~~	2,500 Class A Common shares	$1.01

Notes:

(1) Issued upon exercise of outstanding stock options.

In the 12 month period preceding the date of this Circular, 42,900 incentive stock options were granted by ESG. Each such incentive stock option has an exercise price of $11.25 per share, with an exercise period of 60 months from issuance, and form a portion of the ESG Securities to be purchased under the Acquisition.

LEGAL PROCEEDINGS

Management of LEAF is not aware of any material legal proceedings outstanding, pending or threatened as at the date of this Circular by or against ESG.

MATERIAL CONTRACTS

In the two years preceding the date of this Circular, ESG has not entered into any material contracts, other than contracts in the ordinary course of business, except for the following:

the Acquisition Agreement; and
the share purchase agreement dated October 29, 2019 (the "LDRLY Agreement") among ESG, LDRLY and 1182533, pursuant to which 1182533 acquired all of the outstanding securities of LDRLY as part of LEAF's Qualifying Transaction.

A copy of the Acquisition Agreement is attached as Appendix E hereto. Copies of the LDRLY Agreement are available for inspection at the offices of Richards Buell Sutton LLP, counsel to LEAF, located at 700 - 401 West Georgia Street, Vancouver, British Columbia V6B 5A1, at any time during ordinary business hours up to and including the date of the Meeting, as well as for a period of 5 days thereafter.

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APPENDIX C

INFORMATION CONCERNING THE RESULTING ISSUER

Corporate Structure

Following completion of the Acquisition, the Resulting Issuer's registered office will be located at 700 - 401 West Georgia Street, Vancouver, British Columbia, V6B 5A1, and its head office will be located at 909 - 510 Burrard Street, Vancouver, British Columbia, V6C 3A8.

The anticipated intercorporate relationship of the Resulting Issuer will be as follows:

==> picture [430 x 177] intentionally omitted <==

----- Start of picture text -----

LEAF MOBILE INC.
1182533 B.C. LTD. EASTSIDE GAMES INC.
LDRLY(TECHNOLOGIES) INC.
----- End of picture text -----

As at the date of this Circular, it is anticipated that ESG will be a wholly-owned subsidiary of the Resulting Issuer. LDRLY will continue to be wholly-owned by the Resulting Issuer through 1182533.

Business of the Resulting Issuer

Upon completion of the Acquisition, the Resulting Issuer will be the ultimate parent company of ESG and LDRLY. Both ESG and LDRLY will continue their respective businesses and operations as standalone studios.

It is anticipated that the Acquisition will make the Resulting Issuer the largest F2P mobile gaming company in Canada by revenue. It is further expected that the Resulting Issuer's game portfolio will have one million monthly active users (MAU), and as such the Acquisition is expected to be immediately accretive to the Resulting Issuer.

The Resulting Issuer will continue to identify and evaluate potential acquisitions of third party intellectual property, studios technology and other related assets and/or companies. It will regularly evaluate several potential acquisitions at any one time, which, individually or together, could be material. As of this Circular, LEAF has not entered into any agreements with respect to any other potential material acquisitions other than as disclosed herein, and there can be no assurances or guarantees that the Resulting Issuer will identify or complete any additional acquisitions.

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In general, it is anticipated that the proceeds raised from the Offering will primarily be used to pay the cash consideration owing to the ESG Securityholders under the Acquisition Agreement. Any remaining proceeds will, together with the current revenues of ESG and LDRLY, allow the Resulting Issuer to maintain its current level of operations, and to fund plans to expand ESG and LDRLY's respective operations for the ensuing 12 month period. See "Use of Proceeds" under "Available Funds and Principal Purposes" below.

The Resulting Issuer intends to meet the following objectives with respect to its operations following completion of the Acquisition:

increase addressable market with the launch of new game titles in 2021;
secure new third party intellectual property rights for new game development, and broaden ESG and LDRLY's respective game portfolios and reduce reliance on any singular game franchise;
optimize ESG and LDRLY's game portfolio economics by disciplined financial management;
increase alternative revenue through the increased features, scale and frequency of ingame events and promotions, as well as continually evolving existing games;
continue to grow the user base and user retention of ESG and LDRLY's respective games, cultivating loyalty and organic 'viral' growth of their respective game communities by enhancing Live Ops player platforms;
identify and leverage innovation through technology partners;
strengthen consumer-centric marketing and analytics platforms to identify business opportunities;
realize synergies on active collaboration projects, services and technologies across ESG and LDRLY with a goal to increase revenues and efficiencies; and
identify, evaluate and, if deemed advisable, acquire potential M&A targets.

Milestones

The following table summarizes each significant event that must occur for the business objectives described above to be accomplished, and the time period in which each event is anticipated to occur:

Event/Milestone	Estimated Completion Date
Completion of the Acquisition	Q4 2020
Launch new game titles in the casual/idle game genre	Q4 2021
Realize synergies on active collaboration projects, services and technologies across ESG and LDRLY	Q3 2021

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Streamline game development to improve speed to market and launch results	Q2 2021
Financial management tools processes deployment upon completion of Acquisition	Q1 2021
Identify and evaluate potential M&A targets	Q1 2021

DESCRIPTION OF THE SECURITIES

The Resulting Issuer's existing share capital will remain the same upon the completion of the Acquisition. It is currently comprised of an unlimited number of LEAF Shares, of which 213,441,250 LEAF Shares are issued and outstanding as at the date of this Circular.

Upon the completion of the Acquisition and the Offering (assuming no exercise of the OverAllotment Option), it is anticipated that 975,848,958 LEAF Shares will be issued and outstanding, assuming completion of the Offering at the Minimum Offering Price, and prior to the Consolidation. Upon completion of the Consolidation, it is anticipated that 97,584,895 LEAF Shares will be issued and outstanding. See "Description of the Securities" under Appendix A Information Concerning LEAF and also "Pro Forma Consolidated Capitalization" below for further discussion.

If the Over-Allotment Option is exercised in full, a maximum of 36,818,181 Subscription Receipts and 2,209,090 compensation warrants will be issuable, assuming the Offering is completed at the Minimum Offering Price.

Pro Forma Consolidated Capitalization

The following table sets forth the capitalization of the Resulting Issuer after giving effect to the Acquisition and Offering:

Designation of Security	Amount authorized or to be authorized	Amount outstanding as at the date of the Circular	Amount outstanding after giving effect to the Acquisition and the Offering
LEAF Shares	Unlimited	213,441,250	975,848,958~~(1)~~
Incentive stock options	10% of outstanding LEAF Shares	6,805,680	6,805,680
Agents options (IPO)~~(2)~~	N/A	200,000	200,000
Brokers warrants (Qualifying Transaction)(3)	N/A	420,000	420,000
Compensation warrants (Offering)(4)	N/A	Nil	14,727,273~~(1)~~

Notes:

(1) Assumes the Offering is completed at the Minimum Offering Price. Does not include LEAF Shares underlying any Subscription Receipts sold or compensation warrants issued in the event that the Over-Allotment Option is exercised. See "The Acquisition - the Offering" in the Circular for further discussion.

(2) Exercisable into LEAF Shares at a price of $0.10 per share until July 15, 2021.

(3) Exercisable into LEAF Shares at a price of $0.16 per share until April 17, 2022.

(4) Agents of the Company will receive compensation warrants, each such warrant entitling the holder thereof to purchase a LEAF Share at a price equal to the subscription price of the Subscription Receipts under the Offering. The number of Compensation Warrants shown assumes completion of the Offering at the Minimum Offering Price.

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Fully Diluted Share Capital

The following table sets out the number and percentage of securities of the Resulting Issuer that are anticipated to be outstanding on a fully diluted basis after giving effect to the Acquisition and the Offering, and if all outstanding incentive stock options, agents options and broker warrants are exercised, but prior to effecting the Consolidation.

	Number	Percentage as at the date of this Circular(1)(2)	Number	Percentage upon completion of the Offering(1)(2)
Outstanding LEAF Shares	213,441,250	96.68%	213,441,250	21.87%
LEAF Shares issuable under the Acquisition Agreement(2)	N/A	N/A	498,950,956	50.00%
LEAF Shares issuable to Haymarket Investments Inc. as afinder'sfeewith respect to theAcquisition(2)(3)	N/A	N/A	13,636,363	1.37%
LEAF Shares issuable to Haywood Securities Inc. as an advisoryfee with respect to the Acquisition(2)(4)	N/A	N/A	4,365,844	0.44%
LEAF Shares issuable upon conversion of Subscription Receipts sold under the Offering(5)	N/A	N/A	245,454,546	24.60%
LEAF Shares issuable upon exercise of outstanding agent's options granted with respect to its IPO	100,000	0.05%	100,000	0.01%
LEAF Shares issuable upon exercise of outstanding incentive stock options	6,805,680	3.08%	6,805,680	0.68%
LEAF Shares issuable upon exercise of outstanding broker warrants issued with respect to its qualifying transaction	420,000	0.19%	420,000	0.04%
LEAF Shares issuable under compensation warrants~~(2)(6)~~	N/A	Nil	14,727,273	1.48%
TOTAL	220,766,930	100.00%	997,901,911	100.00%

Notes:

(1) Assumes all convertible securities are exercised in accordance with their respective terms.

(2) Assumes the Offering is completed at the Minimum Offering Price. See "The Acquisition - the Offering" in the Circular for further discussion.

(3) See "The Acquisition - Finder's Fee" in the Circular for further discussion.

(4) The advisory fee is payable in cash and/or LEAF Shares at the discretion of Haywood Securities Inc. Number shown assumes the advisory fee will be paid entirely in LEAF Shares. See "The Acquisition - the Offering" in the Circular for further discussion.

(5) Does not include LEAF Shares underlying any Subscription Receipts sold or compensation warrants issued in the event that the Over-Allotment Option is exercised.
(6) Agents will receive that number of compensation warrants that will entitle it to acquire that number of LEAF Shares that is equal to 6% of the number of Subscription Receipts sold under the Offering. See "The Acquisition - the Offering" in the Circular for further discussion.

It is anticipated that, upon implementing the Consolidation, there will be 97,584,895 LEAF Shares issued and outstanding, on a non-diluted basis, and 99,790,191 LEAF Shares issued and outstanding on a fully-diluted basis.

Dividend Policy

There are no restrictions in LEAF's articles which would prevent the Resulting Issuer from paying dividends following the completion of the Acquisition. All of the LEAF Shares are entitled to an equal share in any dividends declared and paid. It is anticipated, however, that available

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funds will be used to fund the Resulting Issuer’s business, and as at the date of the Circular, it is not anticipated that any dividends will be paid in the foreseeable future.

Principal Securityholders

As at the date of this Circular, it is anticipated that no person will own, directly or indirectly, or exercise control or direction over, more than 10% of the LEAF Shares that will be issued and outstanding following completion of the Acquisition, except as follows:

Name of Securityholder & Municipality of Residence	Type of Ownership (Registered/Beneficial)	Number of LEAF Shares(1)(2))	Percentage upon completion of the Acquisition & Offering(2)(3)
Jason Bailey~~(4)~~ Vancouver, BC	Registered	404,577,920~~(5)~~	41.46%

Notes:

(1) Prior to effecting the Consolidation.

(2) Assumes the Offering is completed at the Minimum Offering Price. See "The Acquisition - the Offering" in the Circular for further discussion.

(3) Does not include LEAF Shares issuable upon exercise of outstanding share purchase warrants, incentive stock options, agent's options, the Over-Allotment Option, or any securities issuable to LEAF's agents with respect to the Offering.
(4) Held through a family trust of which Mr. Bailey is one of the trustees.

(5) Includes LEAF Shares currently held by ESG, which will be distributed to the ESG Securityholders prior to Closing.

Escrowed Securities

IPO Escrow

The following table sets out the number of LEAF Shares which are held in escrow pursuant to an escrow agreement dated May 31, 2019 (the " IPO Escrow Agreement "), with Odyssey Trust Company acting as escrow agent. Pursuant to the IPO Escrow Agreement, the escrowed securities will be released within a three year period commencing from completion of LEAF's qualifying transaction. LEAF's qualifying transaction was completed on April 17, 2020. 15% of the escrowed securities will be released every 6 months commencing October 17, 2020, until all of the escrowed securities have been released.

Name of Securityholder & Municipality of Residence	Prior to giving effect to the Acquisition and Offering	Prior to giving effect to the Acquisition and Offering	After giving effect to the Acquisition and Offering(1)	After giving effect to the Acquisition and Offering(1)
	Number of shares	Percentage	Number of shares	Percentage
Derek Lew~~(2)~~ (British Columbia)	750,000	0.35%	750,000	0.08%
Inclination Earth Sciences Inc.~~(3)~~ (British Columbia)	375,000	0.18%	375,000	0.04%
Oak Mason Investments Inc.~~(4)~~ (British Columbia)	375,000	0.18%	375,000	0.04%
Pallasite Ventures Inc.~~(5)~~ (British Columbia)	375,000	0.18%	375,000	0.04%
Tenuous Holdings Ltd.~~(6)~~ (British Columbia)	300,000	0.14%	300,000	0.03%

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Carraway Capital Corp.~~(7)~~ (British Columbia)	300,000	0.14%	300,000	0.03%
Mark Leung (British Columbia)	75,000	0.04%	75,000	0.01%
0622738 B.C. Ltd.~~(8)~~ (British Columbia)	75,000	0.04%	75,000	0.01%

Notes:

(1) Assumes the Offering is completed at the Minimum Offering Price. See "The Acquisition - the Offering" for further discussion. Share numbers shown are prior to the Consolidation.

(2) A portion of these securities are held through Growthworks Blockchain Innovation Fund I LP, of which Mr. Lew, a director of LEAF and proposed director of the Resulting Issuer, has a controlling interest.

(3) Controlled by Michael Moore, an arm's length party to LEAF and ESG.

(4) Controlled by Messrs. Bixby and Edwards, proposed directors of the Resulting Issuer.

(5) Controlled by Christopher Bissonette, an arm's length party to LEAF and ESG.

(6) Controlled by Mr. MacLeod, director of LEAF.

(7) Controlled by Mr. Rutledge, director of LEAF.
(8) Controlled by Mark Tommasi, an arm's length party to LEAF and ESG.

Qualifying Transaction - Value Escrow

The following table sets out the number of LEAF Shares which are held in escrow pursuant to a "value" escrow agreement dated April 17, 2020, with Odyssey Trust Company acting as escrow agent. The LEAF Shares disclosed in the table below will be released within a three year period, with 15% of the escrowed shares released every six months commencing from October 17, 2020.

Name of Securityholder & Municipality of Residence	Prior to giving effect to the Acquisition and Offering	Prior to giving effect to the Acquisition and Offering	After giving effect to the Acquisition and Offering(1)	After giving effect to the Acquisition and Offering(1)
	Number of shares	Percentage	Number of shares	Percentage
White Umbrella Consulting Inc.~~(2)~~ (British Columbia)	15,000,000	7.03%	15,000,000	1.54%
Inclination Earth Sciences Inc.~~(3)~~ (British Columbia)	3,000,000	1.41%	3,000,000	0.31%
Andrea Eby (British Columbia)	1,125,000	0.53%	1,125,000	0.12%
Lucas McHugh (United Kingdom)	2,250,000	1.05%	2,250,000	0.23%
Pallasite Ventures Inc.~~(4)~~ (British Columbia)	3,750,000	1.76%	3,750,000	0.39%
Andrew Graham~~(5)~~ (British Columbia)	3,750,000	1.76%	3,750,000	0.39%
Suma Men~~(6)~~ (British Columbia)	375,000	0.18%	375,000	0.04%
Jeff Sundar (British Columbia)	3,000,000	1.41%	3,000,000	0.31%

Notes:

(1) Assumes the Offering is completed at the Minimum Offering Price. See "The Acquisition - the Offering" for further discussion. Share numbers shown are prior to the Consolidation.

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(2) Controlled by Bradley Roark, an arm's length party to LEAF and ESG.
(3) Controlled by Michael Moore, an arm's length party to LEAF and ESG.
(4) Controlled by Christopher Bissonette, an arm's length party to LEAF and ESG.
(5) Held as trustee for Pioneer Media Holdings Inc., a company of which Mike Edwards, a proposed director of the Resulting Issuer, is a director.
(6) Held through Haywood Securities Inc.

Qualifying Transaction - Surplus Shares

The following table sets out the number of LEAF Shares which are held in escrow pursuant to a "surplus" escrow agreement dated April 17, 2020, with Odyssey Trust Company acting as escrow agent.

Name of Securityholder & Municipality of Residence	Prior to giving effect to the Acquisition and Offering	Prior to giving effect to the Acquisition and Offering	After giving effect to the Acquisition and Offering(1)	After giving effect to the Acquisition and Offering(1)
	Number of shares	Percentage	Number of shares	Percentage
Derek Lew.~~(2)~~ (British Columbia)	10,080,000	4.73%	10,080,000	1.04%
Darcy Taylor~~(3)~~ (British Columbia)	5,400,000	2.53%	5,400,000	0.56%
Durban Holdings Ltd.~~(4)~~ (British Columbia)	45,000,000	21.08%	45,000,000	4.63%
EastSide Games Inc.~~(5)~~ (British Columbia)	49,668,750	23.27%	49,668,750	5.11%

Notes:

(1) Assumes the Offering is completed at the Minimum Offering Price. See "The Acquisition - the Offering" for further discussion. Share numbers shown are prior to the Consolidation.

(2) A portion of these securities are held through Growthworks Blockchain Innovation Fund I LP, of which Mr. Lew, a director of LEAF and proposed director of the Resulting Issuer, has a controlling interest..
(3) A portion of these securities are held through Letter 4 Consulting Ltd., of which Mr. Taylor, CEO and director of LEAF, and the proposed CEO and a director of the Resulting Issuer, has a controlling interest.
(4) Controlled by Julie Hamilton, an arm's length party to LEAF and ESG.

(5) It is anticipated that the LEAF Shares currently held by ESG will be distributed to the ESG Securityholders prior to completion of the Acquisition.

The LEAF Shares disclosed in the table above will be released within a three year period in accordance with the following release schedule:

Release Date	Percentage released
October 17,2020	5%
April 17, 2021	10%
October 17,2021	10%
April 17, 2022	15%
October 17, 2022	15%
April 17,2023	40%

Acquisition

The following table sets out the number of additional LEAF Shares which will be held in escrow, with Odyssey Trust Company acting as escrow agent, following completion of the Acquisition.

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Name of Securityholder & Municipality of Residence	Prior to giving effect to the Acquisition and Offering	Prior to giving effect to the Acquisition and Offering	After giving effect to the Acquisition and Offering(1)	After giving effect to the Acquisition and Offering(1)
	Number of shares	Percentage	Number of shares	Percentage
Jason Bailey~~(2)~~ Vancouver, BC	Nil	Nil	404,577,920~~(1)~~	41.46%
Jonathan Bixby~~(3)~~ Victoria, BC	2,725,000	1.28%	2,725,000	0.28%
Mike Edwards~~(3)(4)~~ Whistler, BC	15,950,000	7.47%	15,950,000	1.64%

(1) Assumes the Offering is completed at the Minimum Offering Price. See "The Acquisition - the Offering" for further discussion. Also assumes that the LEAF Shares currently held by ESG will be distributed to the ESG Securityholders prior to completion of the Acquisition. Share numbers shown are prior to the Consolidation.
(2) Held indirectly through a family trust of which Mr. Bailey is a trustee. Includes LEAF Shares currently held by ESG, which will be distributed to ESG Securityholders prior to Closing.
(3) A portion of these shares are held through Oak Mason Investments Inc. and Haymarket Investments Inc., both of which are controlled equally by Messrs. Bixby and Edwards. Additionally, Haymarket Investments Inc. is entitled to a finders' fee payable in LEAF Shares upon completion of the Acquisition and the Offering. The maximum number of LEAF Shares issuable with respect to such payment is 13,636,363 LEAF Shares, which assumes that the Offering is completed at the Minimum Offering Price. The payment of such finder's fee is conditional upon LEAF obtaining prior TSXV approval with respect to same. Such LEAF Shares may be subject to escrow requirements. See "The Acquisition - Finder's Fee" in the Circular for further discussion.
(4) A portion of these shares are held through Pioneer Media Holdings Inc., in which Mr. Edwards is a controlling shareholder. Mr. Edwards and Pioneer Media Holdings Inc. also collectively hold 94,333 Class A Common shares of ESG, which will be included as a portion of the ESG Securities being acquired under the Acquisition. If the Offering is completed at the Minimum Offering Price, Mr. Edwards and Pioneer Media Holdings Inc. will receive an aggregate of 9,529,963 LEAF Shares under the Acquisition. Such shares may be subject to escrow requirements.

AVAILABLE FUNDS & PRINCIPAL PURPOSES

Available Funds

It is anticipated that, following completion of the Acquisition, the Resulting Issuer will have funds available to it, including estimated consolidated working capital as at September 30, 2020 (unaudited), as follows:

Source of Funds	Available Funds
Existing consolidated working capital	$14,700,000
Gross proceeds of the Offering	$54,000,000~~(1)~~
Less cash commission payable to Agents	($3,240,000)~~(1)~~
Less payment to ESG Securityholders pursuant to the Acquisition	($50,000,000)~~(2)~~
Less remaining expenses and costs relating to the Acquisition and the Offering (including legal fees and other expenses)	($1,175,000)~~(1)~~
Estimated funds available	$14,285,000

Notes:

(1) Does not contemplate exercise of the Over-Allotment Option. See "The Acquisition - the Offering" in the Circular for further discussion.

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(2) Does not include adjustments to the cash consideration payable under the Acquisition.

Please note that the foregoing table does not include ongoing revenues of the Resulting Issuer, and instead contemplates only those funds that may be received under the Offering. Please refer to Appendix A of this Circular for further financial information regarding LEAF, and Appendix G of this Circular for further financial information regarding ESG.

Use of Proceeds

Upon the completion of the Acquisition and the Offering, the estimated funds available to the Resulting Issuer will be approximately $14,960,000, without including ongoing revenues of the Resulting Issuer or any proceeds arising from the exercise of the Over-Allotment Option.

As at the date of this Circular, it is intended that the funds will be used to maintain and expand the current operations of LEAF, ESG and for general working capital of the Resulting Issuer.

The following provides a breakdown of the Resulting Issuer's estimated expenses for the 12 month period subsequent to the completion of the Acquisition, but without including expenses that are anticipated to be incurred that will be funded from ongoing revenues:

	Estimated Amount
Game development and publishing costs	$9,500,000
Game launch marketing and other marketing expenses	$1,250,000
Generaland administrative expensesfor 12 monthperiod	$2,750,000
Unallocated working capital	$785,000

In the event that the Resulting Issuer does not receive sufficient revenues from its ongoing operations, it may seek out additional sources of funding to fund further business expansion, particularly by way of private placement equity financings. It has no arrangements with respect to any such financings at this time. There can be no assurance that any such financings or other sources of funding can be completed or obtained on terms favourable to the Resulting Issuer, or at all.

As at the date of this Circular, it is intended that the Resulting Issuer will spend the funds available to it as stated above. However, there may be circumstances where, for sound business reasons, a reallocation of funds may be necessary.

DIRECTORS AND OFFICERS

Directors and Officers of the Resulting Issuer Upon Completion of the Acquisition

The following table sets out the names, places of residence, occupations and proposed positions with the Resulting Issuer, and the number of LEAF Shares beneficially owned or controlled by such individuals, directly or indirectly, after giving effect to the Acquisition and the Offering but prior to the Consolidation. As a group, the proposed directors and officers of the Resulting Issuer following the completion of the Acquisition are expected to beneficially own or control, directly or indirectly, approximately 468.5 million LEAF Shares (prior to effecting the Consolidation), which will constitute approximately 48% of the issued and outstanding LEAF Shares following the completion of the Acquisition and the Offering, assuming that the Offering is completed at the Minimum Offering Price, but without including LEAF Shares underlying any Subscription Receipts sold if the Over-Allotment Option is exercised.

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Name & Municipality of Residence	Position(s) to be held	Principal Occupation during past 5 years	Prior term with LEAF	Percentage & No. of LEAF Shares upon the Completion of the Acquisition and the Offering(1)(2)
Jason Bailey~~(3)~~ Vancouver, BC	Chief Revenue Officer and director of Resulting Issuer	Founder and Chairperson of ESG from incorporation to present	N/A	404,577,920 (41.46%)
Jonathan Bixby(4)(5)(6) Victoria, BC	Director of Resulting Issuer	Co-founder of Koho Financial from March 2014 to present. Co-founder of Guild Esports PLC Co-founder of Blue Mesa Health. Director of CTO.AI Chairman of Argo Blockchain PLC from June 2017 to August 2019 Chairman of Darkvision Technologies from August2014toMay2020	N/A	2,725,000 (0.28%)
Mike Edwards~~(6)(7)~~ Whistler, BC	Director of Resulting Issuer	Co-founder of LX Ventures. Co-founder of Wyley Interactive Inc. Co-founder of Growlab. Co-founder of Creative Labs. Co-founder of Argo Blockchain PLC.	N/A	19,700,000 (2.03%)
Derek Lew~~(4)(5)(8)~~ Vancouver, BC	Director of Resulting Issuer	Director of LEAF from November 2018 to present. CEO of LEAF from March 2019 to April 2020. President & CEO of GrowthWorks Capital since August 2015 Self-employed lawyer since January 2001	Director of LEAF, November 2018 to present CEO of LEAF, March 2019 to April 2020	12,200,000~~(4)~~ (1.26%)
Mark Leung Burnaby, BC	CFO of Resulting Issuer	CFO of LEAF from March 2019 to present. Director of Finance & Controller of Pacific Blue Cross from March 2019 to present VP Finance, Growthworks Capital from August 2017 to March 2019 Manager, Decision Support, BCLC, June 2013 to June 2016	CFO of LEAF, March 2019 to present	210,000 (0.05%)
Darcy Taylor West Vancouver, BC	CEO of Resulting Issuer	Vice President of Marketing & Sales of JTI Korea from Dec 2013 to Nov 2015 Vice President of Brand & Product Marketing of Logic Technology Development LLC, from Nov 2015 to Dec 2017 President of Letter 4 Consulting Ltd. since Oct 2018 to present	CEO and director of LEAF, April 2020 to present President and director of 1182533, incorporation to present	6,000,000(9) (0.62%)

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		Director of Leaf Studios PLC since Oct 2018
Birgit Troy	Director of Resulting Issuer	CFO for Volaris Group, operation company of Constellation Software Inc., from 2016 to present CFO for Incognito Software systems from 2015 to 2016 VP Finance for TSO Logic from 2013 to 2015	N/A	Nil
Brian Wideen Burnaby, BC	VP Finance of Resulting Issuer	COO for Overinteractive Media Inc. from 2011 Founder & COO for The Coup Company Ltd. from 2012 VP Finance for GrowthWorks Capital from 2019	CFO of 1182533, September 2019 to April 2020 VP Finance of LEAF, April 2020 to present	Nil

Notes:

(1) Does not include stock options or other securities convertible into LEAF Shares.
(2) Assumes the Offering is completed at the Minimum Offering Price. See "The Acquisition - the Offering" for further discussion. Share numbers shown are prior to effecting the Consolidation.
(3) Held through a family trust of which Mr. Bailey is a trustee. Includes LEAF Shares currently held by ESG, which will be distributed to the ESG Securityholders prior to Closing.
(4) Proposed member of the Resulting Issuer's audit committee.
(5) Proposed member of the Resulting Issuer's compensation committee.
(6) A portion of these shares are held through Oak Mason Investments Inc. and Haymarket Investments Inc., both of which are controlled equally by Messrs. Bixby and Edwards. Additionally, Haymarket Investments Inc. is entitled to a finders' fee payable in LEAF Shares upon completion of the Acquisition and the Offering. The maximum number of LEAF Shares issuable with respect to such payment is 13,636,363 LEAF Shares, which assumes that the Offering is completed at the Minimum Offering Price. The payment of such finder's fee is conditional upon LEAF obtaining prior TSXV approval with respect to same. See "The Acquisition - Finder's Fee" in the Circular for further discussion.
(7) A portion of these shares are held through Pioneer Media Holdings Inc., in which Mr. Edwards is a controlling shareholder. Mr. Edwards and Pioneer Media Holdings Inc. also collectively hold 94,333 Class A Common shares of ESG, which will be included as a portion of the ESG Securities being acquired under the Acquisition. If the Offering is completed at the Minimum Offering Price, Mr. Edwards and Pioneer Media Holdings Inc. will receive an aggregate of 9,529,963 LEAF Shares under the Acquisition.
(8) A portion of these shares are held through Growthworks Blockchain Innovation I LP, in which Mr. Lew holds a controlling interest.
(9) Held through Letter 4 Consulting Ltd., in which Mr. Taylor holds a controlling interest.

Darcy Taylor (52), CEO

Darcy has over 20+ years of senior executive experience building successful companies and brands spanning, Asia, Europe and North America. He has a proven track record in C-suite and senior leadership roles at IMG Canada (now Endeavor LLC), Logic Technologies Inc, JT International S.A. and MASEV Communications Inc., that was acquired by IMG Canada. His experience spans corporate, agency, and entrepreneurial environments across free-to-play mobile games, FinTech, esports, Blockchain, FMCG/CPG, Digital Marketing & Media and Sports & Entertainment industries.

Mark Leung (42), CFO

Mr. Leung has over 15 years of experience in finance and accounting. He has diverse industry experience which includes investment management, telecommunications and gaming. Responsibilities included overseeing all aspects of financial planning and analysis, and strategic

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planning. Professionally, he is a Chartered Professional Accountant (CPA, CA), and a graduate of the University of British Columbia (MBA).

Jason Bailey (48), Chief Revenue Officer and director

Mr. Bailey is a founder of ESG. He is considered one of Canada’s most experienced gaming entrepreneurs. Prior to ESG, Mr. Bailey was a founder of Super Rewards, which he sold in 2009. Super Rewards was a social game monetization platform which helped pioneer the free to play game model that is ubiquitous today. Over the last twenty years, he has been mentor to and investor in a variety of Canadian startups and technology companies.

Brian Wideen (63), VP Finance

Mr. Wideen started his career as a computer programmer and launching his first company, Sphere Computer Literacy Inc. His entrepreneurial spirit has seen him hold executive roles in small companies and large, including in telecom, video games and media. This includes a thirteen year stint at Electronic Arts Canada, running large franchises, including Chief Operating Officer for "Need For Speed". In 2012, he co-founded CineCoup Media (now "The Coup Company"), building a digital media platform to find, finance and distribute content, including films and short-form content. In 2018, Mr. Wideen co-founded Beats Easts Life Incorporated, a hospitality company with restaurants in Toronto. Currently he holds the role of VP Finance, Growthworks Capital Ltd., where he is responsible for all things financial for that company and its related companies, including preparation and reporting to applicable securities regulatory authorities. Mr. Wideen also acts for two companies listed on the London Stock Exchange, and holds a Bachelor of Sciences degree in Computing Science from Simon Fraser University (British Columbia), with a minor in Business Administration.

Jonathan Bixby (43), Director

Mr. Bixby is a seasoned technology entrepreneur in both the private and public sector. He is the co-founder of a number of significant companies including, Koho Financial, Canada's largest challenger bank, Guild Esports PLC (a listed Esports company on the LSE with David Beckham) and Blue Mesa Health (acquired by the Virgin Pulse). Mr. Bixby is a board member of CTO.AI and a former Chairman of the Board of Argo Blockchain PLC (LSE Listed) and Darkvision Technologies (acquired by Koch Industries). He is a strategic advisor to Fastly (NASDAQ).

Mike Edwards (53), Chairperson, Corporate Secretary and Director

Mr. Edwards has a wealth of experience in building and scaling consumer technology companies in private and public markets, including as an investor in Punch’d (acquired by Google), Wander (later acquired by Yahoo), Summify (acquired by Twitter), BlueBat Games (acquired by Novomatic Group, Retsly (acquired by Zillow) and Password Box (acquired by Intel). He co-founded LX Ventures, a publicly listed consumer internet foundry that acquired and scaled Mobio Technologies. Mr. Edwards co-founded Wyley Interactive, a mobile game engagement platform, which was acquired by Zynga and he co-founded Creative Labs, a venture capital backed startup foundry that builds consumer technology companies by leveraging the Creative Artist Agency's access to talent and audience.

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Derek Lew (50), Director

Mr. Lew is the President, Chief Executive Officer and a director of GrowthWorks Capital Ltd. (" GWC "), and the President and Chief Executive Officer and/or a director of certain managed funds and operating subsidiaries of GWC, all of which are active venture capital investors. Mr. Lew is also a Partner with Initio Group Inc. (" Initio "), a Vancouver-based early stage angel investment firm, and is a lawyer with experience in the areas of corporate, commercial and real estate law. As CEO of GWC, and at Initio, Mr Lew is involved in overseeing these firms' venture capital and angel investments, respectively. Mr. Lew was Chair of the British Columbia Innovation Commission (now "Innovate BC") (2013 – 2018), the Crown agency of the Province of British Columbia responsible for the advancement of innovative businesses and entrepreneurs in the province. He has also been a director of Mobio Technologies Inc., a TSXVlisted company, since November 2012. Active in his community, Mr. Lew is a director of the Frank and Joan Lew Charitable Trust and the FJL Housing Society, which focuses on matters related to social housing in Vancouver's Downtown Eastside. Mr. Lew holds a Bachelor of Arts from the University of British Columbia and a Bachelor of Laws from the University of Alberta, and is a member of the Law Society of British Columbia.

Birgit Troy (46), Director

Ms. Troy is a Portfolio CFO at Volaris Group, the largest operating group under Constellation Software (CSU), one of Canada's leading technology companies. Over the last 5 years, she has led M&A efforts to acquire and integrate 15 operating companies into Constellation Software. Prior to Volaris, Ms. Troy was the CFO of Incognito Software Systems (acquired by Volaris) and VP Finance of TSO Logic (acquired by Amazon) and Strangeloop Networks (acquired by Radware).

Corporate Cease Trade Orders or Bankruptcies

No proposed director or executive officer of the Resulting Issuer, as constituted upon the completion of the Acquisition, is, or has been, within the 10 years before the date of this Circular, a director, chief executive officer or chief financial officer of any company that:

was the subject of a cease trade or similar order, or an order that denied the other issuer access to any exemptions under applicable securities law, for a period of more than 30 consecutive days; or
became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets.

No proposed director or executive officer of the Resulting Issuer, as constituted upon the Completion of the Acquisition, is, or has, within the 10 years before the date of this Circular, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangements or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the proposed director or executive officer.

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Penalties or Sanctions

No proposed director or executive officer of the Resulting issuer, as constituted upon the Completion of the Acquisition, is, or has been:

been subject to any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority; or
been subject to any other penalties or sanctions imposed by a court or regulatory body, including a self-regulatory body, that would be likely to be considered important to a reasonable securityholder making a decision about the Acquisition or an investment decision.

Conflicts of Interest

There are no known conflicts of interest involving the proposed directors or officers of the Resulting Issuer.

There are potential conflicts of interest to which the proposed directors, officers and promoters of the Resulting Issuer will be subject with respect to the operations of the Resulting Issuer as constituted upon the completion of the Acquisition. Certain of the proposed directors and/or officers serve as directors and/or officers of other companies or have significant shareholdings in other companies. Situations may arise where the directors, officers and promoters of the Resulting Issuer will be engaged in direct competition with the Resulting Issuer as constituted after the completion of the Acquisition. Any conflicts of interest will be subject to and governed by the law applicable to directors' and officers' conflicts of interest, including the procedures established by the British Columbia Business Corporations Act . The British Columbia Business Corporations Act requires that directors and officers of a party which enters into a material contract with the Resulting Issuer or otherwise have a material interest in a material contract entered into by the Resulting Issuer as constituted after the completion of the Acquisition, must disclose their interest and, in certain circumstances, refrain from voting on any resolution of the Resulting Issuer’s directors to approve that contract.

Other Reporting Issuer Experience

The following table sets out the proposed directors and officers of the Resulting Issuer that are, or have been within the last five years, directors, officers or promoters of other reporting issuers in any Canadian jurisdiction.

Name	Name & Jurisdiction of Reporting Issuer	Position	From	To
Mike Edwards	Mobio Technologies Inc. British Columbia	Director	November 2012	March 9, 2020
		CEO	November 2012	August 2016
	Pioneer Media Holdings Inc. British Columbia	Director	October 2019	Present
Derek Lew	Plank Ventures Ltd. British Columbia	Director	May 2019	Present
	Mobio Technologies Inc. British Columbia	Director	November 2012	Present

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	Aether Catalyst Solutions, Inc. British Columbia	CFO, Director	July 2011	Present
	Working Opportunity Fund (EVCC) Ltd. British Columbia	Director	June 2014	August 2015
		Director	October 2016	February2019
		President & CEO	October 2015	February 2019
Mark Leung	Growthworks Atlantic Venture Fund Ltd. Canada	VP Finance	September 2017	March 2019
	Working Opportunity Fund (EVCC) LTd. British Columbia	VP Finance	September 2017	March 2019
Darcy Taylor	Pioneer Media Holdings Inc. British Columbia	Director	May 2020	Present

EXECUTIVE COMPENSATION

Upon completion of the Acquisition, it is anticipated that the Resulting Issuer will establish a new compensation committee (the " Compensation Committee ") to formulate and administer an executive compensation program. It is anticipated that the executive compensation program will be comprised of two principal elements including base salaries and incentive stock options, which are designed to provide a combination of cash and equity-based compensation to effectively compensate, attract, retain and motivate the directors and executive officers of the Resulting Issuer (including directors and executive officers of ESG and LDRLY) and to closely align the personal interests of such persons to those of the shareholders of the Resulting Issuer.

It is anticipated that, upon completion of the Acquisition, the Compensation Committee will be comprised of Derek Lew and Jonathan Bixby.

It is also anticipated that the Compensation Committee will recommend how much, if any, cash compensation will be paid to directors for services rendered by directors, in such capacity, to the Resulting Issuer; however, it is not anticipated that directors who are not otherwise employed by or engaged to provide services to the Resulting Issuer, will be paid any cash compensation for their services as directors. Notwithstanding the foregoing, it is anticipated that for the 12 months following completion of the Acquisition all directors and officers will be primarily compensated for their services as directors and/or officers through the granting of stock options in such amounts and upon such terms as may be recommended by the Compensation Committee and approved by the Resulting Issuer's directors from time to time.

INDEBTEDNESS OF DIRECTORS AND OFFICERS

There will be no indebtedness of the directors or executive officers of the Resulting Issuer, ESG or LDRLY to the Resulting Issuer, ESG or LDRLY, nor will there be any indebtedness of the directors or executive officers to another entity the subject of a guarantee, support agreement, letter of credit or other similar arrangement or understanding provided by the Resulting Issuer, ESG or LDRLY.

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INVESTOR RELATIONS ARRANGEMENTS

Pursuant to an agreement dated May 25, 2020, LEAF retained the services of Kin Communications Inc. (" Kin "), an arm's length party based in Vancouver, British Columbia. Pursuant to such agreement, Kin provides investor relations services in consideration of a monthly fee of $12,500. As at the date of this Circular, Kin does not hold any LEAF Shares, but was granted 500,000 stock options with an exercise price of $0.40 per share, expiring May 26, 2025, subject to a quarterly vesting schedule of 25% per quarter.

After completion of the Acquisition, the Resulting Issuer may or may not continue to retain promotional or investor relations services on an as-needed basis. However, as at the date of this Circular, no written or oral agreements or understandings reached with any persons to provide any promotional or investor relation services for the Resulting Issuer.

OPTIONS TO PURCHASE SECURITIES

LEAF has implemented an incentive stock option plan (the " Stock Option Plan "), which will continue upon completion of the Acquisition. See Appendix A Information Concerning LEAF - Options to Purchase Securities for further description.

As at the date of this Circular, the following options to purchase the securities of the Resulting Issuer are anticipated to be issued and outstanding:

Holder	Nature of Security	Number of Securities	Exercise Price	Expiry Date
Jason Bailey~~(1)~~	Stock options~~(2)~~	4,000,000~~(5)~~	TBD~~(5)~~	Five years from issuance
Jonathan Bixby~~(1)~~	Stock options~~(2)~~	4,000,000~~(5)~~	TBD~~(5)~~	Five years from issuance
Mike Edwards~~(1)~~	Stock options~~(2)~~	4,000,000~~(5)~~	TBD~~(5)~~	Five years from issuance
Derek Lew	Stock options~~(2)~~	110,000	$0.10	July 15, 2029
	Stockoptions~~(2)~~	426,613	$0.25	May19,2025
	Stock options~~(1)(2)~~	4,000,000~~(5)~~	TBD~~(5)~~	Five years from issuance
Mark Leung~~(1)~~	Stockoptions~~(2)~~	426,613	$0.25	May19,2025
Jean-Guy Niquet	Stock options~~(2)~~	426,613	$0.25	May 19, 2025
Darcy Taylor	Stock options~~(2)~~	2,133,063	$0.25	May 19, 2025
	Stock options~~(2)~~	4,000,000~~(5)~~	TBD~~(5)~~	Five years from issuance
Birgit Troy~~(1)~~	Stock options~~(1)(2)~~	4,000,000~~(5)~~	TBD~~(5)~~	Five years from issuance
Brian Wideen	Stock options~~(2)~~	426,613	$0.25	May 19, 2025
Other employees and consultants of the Resulting Issuer	Stock options~~(2)~~	2,856,165	$0.25	May 19, 2025
Haywood Securities	Agent's options~~(3)~~	200,000	$0.10	July15,2021
	Brokers'warrants~~(3)~~	420,000	$0.16	April 17, 2022
Other agents of LEAF with respect to the Offering	Compensation warrants(4)	14,727,273	$0.22	24 months from issuance

Notes:

(1) Assumes completion of the Acquisition and the Offering.

(2) Issued pursuant to the Stock Option Plan.

(3) Issued concurrent with completion of LEAF's initial public offering and qualifying transaction. See Appendix A Information Concerning LEAF - Options to Purchase Securities for further description.

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(4) Assumes that the Offering is completed at the Minimum Offering Price. See "The Acquisition - the Offering" for further discussion.
(5) The number of incentive stock options described assumes completion of the Offering at the Minimum Offering Price. The anticipated exercise price will be equal to the actual subscription price of the Subscription Receipts offered under the Offering. Such incentive stock options are anticipated to be granted concurrent with or immediately following the completion of the Acquisition and the Offering.

Additional options may be granted from time to time following completion of the Acquisition, if and as determined by the Resulting Issuer's board of directors or Compensation Committee.

Pursuant to the Offering, the Agents will receive compensation warrants entitling the holders thereof to purchase that number of LEAF Shares that is equal to 6% of the total number of Subscription Receipts sold under the Offering.

AUDITOR, TRANSFER AGENT AND REGISTRAR

D&H Group LLP will continue as auditors of the Resulting Issuer after Completion of the Acquisition.

Odyssey Trust Company, at 323 - 409 Granville Street, Vancouver, British Columbia, V6C 1T2 will remain as the transfer agent and registrar for the LEAF Shares.

INTEREST OF EXPERTS

The legal counsel of LEAF is Richards Buell Sutton LLP, 700 - 401 West Georgia Street, Vancouver, British Columbia V6B 5A1.

The partners and associates of Richards Buell Sutton LLP do not own any of the issued and outstanding LEAF Shares as at the date of this Circular, and, unless they participate in the Offering, are not anticipated to own any of the issued and outstanding LEAF Shares upon completion of the Acquisition.

Dale Matheson Carr-Hilton LLP (Vancouver, British Columbia), auditors of LEAF for the year ended December 31, 2019, have confirmed that they are independent within the meaning of the Code of Professional Conduct of the Chartered Professional Accountants of British Columbia.

LEAF's current auditors, D&H Group LLP, Chartered Professional Accountants, have confirmed that they are independent with respect to LEAF within the meaning of the Code of Professional Conduct of the Chartered Professional Accountants of British Columbia.

Vohora LLP, ESG's auditors, have confirmed that they are independent with respect to ESG within the meaning of the Code of Professional Conduct of the Chartered Professional Accountants of British Columbia.

SPONSORSHIP

It is a condition to the completion of the Acquisition for LEAF to have obtained conditional approval to list the LEAF Shares on the TSE. As such, LEAF will not retain a sponsor with respect to TSXV's requirements respecting the Acquisition.

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BOARD APPROVAL

The Board has approved the delivery of this Circular to the LEAF Shareholders.

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APPENDIX D

PROPOSED RESOLUTIONS

Acquisition Resolution

BE IT RESOLVED AS AN ORDINARY RESOLUTION OF THE MINORITY SHAREHOLDERS THAT:

The Acquisition by LEAF of ESG, pursuant to the Acquisition Agreement dated as of October 31, 2020, as may be amended from time to time, and all ancillary transactions related thereto (including but not limited to the issuance of shares, directly or indirectly, to Jason Bailey, which will result in such person becoming a Control Person (as such term is defined under TSX Venture Exchange policies) of LEAF by virtue of holding more than 20% of the then issued and outstanding common shares of LEAF), be and is hereby approved.
Any one officer or director of LEAF is authorized to do and perform all things, including the execution of the Acquisition Agreement and documents related thereto, which may be necessary or desirable to give effect to the foregoing.
Notwithstanding that this special resolution has been duly passed by the minority shareholders of LEAF, the directors of LEAF be, and hereby are, authorized and empowered to revoke this resolution at any time before the completion of aforementioned acquisition, and to determine not to proceed with aforementioned acquisition without further approval of the shareholders of LEAF.

Consolidation Resolution

BE IT RESOLVED AS A SPECIAL RESOLUTION OF THE SHAREHOLDERS THAT:

The common shares of LEAF (the " LEAF Shares ") be consolidated (the " Consolidation ") on the basis of one "new" LEAF Share for up to every ten (10) "old" LEAF Shares outstanding, effectively immediately after completion of the acquisition of all of the outstanding securities of EastSide Games Inc. (the " Acquisition ").
Notwithstanding that this special resolution has been duly passed by the shareholders of LEAF, the directors of LEAF be, and hereby are, authorized and empowered to revoke this special resolution at any time before the completion of aforementioned acquisition, and to determine not to proceed with aforementioned acquisition without further approval of the shareholders of LEAF.
Should the directors of LEAF choose to act upon this special resolution to implement the Consolidation, and subject to the deposit of this resolution at LEAF's records office, the solicitors of LEAF are authorized and directed to electronically file the Notice of Alteration with respect to the Consolidation with the Registrar of Companies.
Upon the Notice of Alteration taking effect, LEAF's articles be altered to reflect the Consolidation, as necessary.

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Any one officer or director of LEAF is authorized to do and perform all things, including the execution of the Notice of Alteration and documents related thereto, which may be necessary or desirable to give effect to the foregoing.

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APPENDIX E

ACQUISITION AGREEMENT

see attached -

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SHARE PURCHASE AGREEMENT

DATED October 31, 2020

AMONG :

EASTSIDE GAMES INC. , a British Columbia corporation with an office at 550 - 555 West 12th Avenue, Vancouver, British Columbia, V5Z 3X7

(the " Company ")

AND :

LEAF MOBILE INC. , a British Columbia corporation with an office at 2080 - 1055 West Georgia Street, Vancouver, British Columbia V6E 3R5

(the " Purchaser ")

AND :

BAILEY RANSEN FAMILY TRUST NO. 1 (" BRFT "), Galan Akin, Joshua Nilson, and the other undersigned securityholders of the Company

(together with any person that becomes a shareholder of the Company prior to Closing, collectively the " Vendors " and individually a " Vendor ")

WHEREAS :

A. the Vendors are collectively the legal and beneficial owners of all of the issued and outstanding securities (the " Company Securities ") in the capital of the Company;
B. the Vendors have agreed to sell to the Purchaser, all of the Company Securities subject to the terms and conditions contained herein;

NOW THEREFORE in consideration of the mutual covenants and agreements set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by all parties, the parties agree as follows:

ARTICLE 1 INTERPRETATION

1.1 Defined Terms . As used in this Agreement, the following terms have the following meanings: (a) "Accounts Receivable" means all accounts receivables, notes receivables and other debts due or accruing due to the Company.
(b) "Actual Closing Time Cash" means Cash as of the Closing Time.

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(c) "Actual Closing Time Indebtedness" means the Indebtedness of the Company as of the Closing Time.
(d) "Actual Closing Time Transaction Expenses" means the Transaction Expenses as of the Closing Time.
(e) "Actual Effective Time Working Capital" means the Working Capital as of the Closing time.
(f) "Affiliate" means, with respect to a person, any other person that directly or indirectly controls, is controlled by or is under common control with such person, and "control" means the possession, directly or indirectly, of the power to direct, or cause the direction of, the management and policies of a person, whether through the ownership of voting securities, by agreement or otherwise.
(g) "Agreement" means this share purchase agreement.
(h) "Annual Financial Statements" means the audited financial statements of the Company for its 2017, 2018 and 2019 fiscal years together with the auditors' report thereon.
(i) "Assets" means all property and assets of the Company of every nature and kind and wheresoever situated.
(j) "Authorization" means, with respect to any person, any order, permit, approval, consent, waiver, licence or similar authorization of any Governmental Entity having jurisdiction over the person.
(k) "Books and Records" means all information in any form of the Company, including books of account, financial, tax, business, marketing, personnel and research information and records, equipment logs, operating guides and manuals and all other documents, files, correspondence and other information.
(l) "Business" means the business currently carried on by the Company, which involves the development and publishing of mobile video games.
(m) "Business Day" means any day of the year, other than a Saturday, Sunday or any day on which major banks are closed for business in Vancouver, British Columbia.
(n) "Cash" means the aggregate amount of cash and cash equivalents (including bank account balances, marketable securities and short term investments to the extent convertible into Cash within 30 days) of the Company, net of (i) any outstanding cheques of the Company and (ii) any Restricted Cash;
(o) "Closing" means the completion of the transactions contemplated under this Agreement.
(p) "Closing Date" means the date on which Closing occurs.
(q) "Closing Statement" has the meaning contemplated in Sections 2.7(d) and (e).
(r) "Closing Time" means 11:59 PM (Vancouver time) on the Closing Date.

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(s) "Collective Agreement" means collective agreements and related documents including benefit agreements, letters of understanding, letters of intent and other written communications (including arbitration awards) by which the Company is bound.
(t) "Company" has the meaning specified in the preamble.
(u) "Company Securities" has the meaning specified in the preamble.
(v) "Company Software" has the meaning specified in Section 3.20(b).
(w) "Corporate Records" has the meaning specified in Section 3.6.
(x) "Damages" means any losses, liabilities, Taxes, damages or out-of-pocket expenses (including reasonable legal fees and expenses) whether resulting from an action, suit, proceeding, arbitration, claim, settlement, award, judgment, fine, penalty, assessment or demand that is instituted or asserted by a third party, including a Governmental Entity, or a cause, matter, thing, act, omission or state of facts not involving a third party.
(y) "Deductible" has the meaning specified in Section 9.4.
(z) "Disabling Code" has the meaning specified in Section 3.20(a).
(aa) "Disclosure Letter" means the disclosure letter dated the date of this Agreement and delivered by the Company and Vendors' Representative to the Purchaser with this Agreement.
(bb) "Draft Closing Statement" has the meaning specified in Section 2.7(a).
(cc) "Employee Plans" means all employee benefit, fringe benefit, supplemental unemployment benefit, severance pay, salary continuation, bonus, incentive, profit sharing or deferred compensation, termination, change of control, pension, retirement, savings, stock option, stock purchase, stock appreciation, equitybased, health, welfare, medical, dental, disability, life insurance and similar plans, contracts, programmes, funds, arrangements or practices and any trust, escrow or similar agreement related thereto, whether or not funded, relating to any current or former employees, officers, directors, shareholders, consultants or independent contractors of the Company maintained, sponsored, contributed to or funded by the Company or under which the Company may have any liability contingent or otherwise.
(dd) "Employment Contracts" means agreements, other than Employee Plans, relating to any of the employees of the Company.
(ee) "Encumbrance" means any mortgage, charge, pledge, hypothec, security interest, assignment, lien (statutory or otherwise), easement, servitude, title retention agreement or arrangement, conditional sale, deemed or statutory trust, restrictive covenant or other encumbrance of any similar nature.
(ff) "Entitlement Schedule" means Section 1.1(ff) of the Disclosure Letter, setting forth the entitlement of each Vendor to a portion of the Purchase Price in exchange for their Company Securities, pursuant to this Agreement.

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(gg) "Escrow Account" and "Escrow" have the meanings set out in Section 2.3(a).
(hh) "Escrow Agent" means the escrow agent mutually chosen by the Vendors' Representative and the Purchaser to hold the Escrow.
(ii) "Escrow Agreement" means the escrow agreement to be entered into at Closing by and among the Purchaser, the Vendors and the Escrow Agent in connection with the Escrow, in a form mutually agreeable by such parties acting reasonably.
(jj) "Estimated Closing Statement" has the meaning specified in Section 2.6(a).
(kk) "Estimated Closing Time Cash" has the meaning specified in Section 2.6(a)(iv).
(ll) "Estimated Closing Time Indebtedness" has the meaning specified in Section 2.6(a)(ii).
(mm) "Estimated Closing Time Transaction Expenses" has the meaning specified in Section 2.6(a)(iii).
(nn) "Estimated Closing Time Working Capital" has the meaning specified in Section 2.6(a)(iv).
(oo) "Estimated Purchase Price" means (i) $150,000,000; plus (ii) the Estimated Closing Time Cash; plus (iii) the Estimated Closing Time Working Capital; minus (iv) the Estimated Closing Time Transaction Expenses; minus (v) the Estimated Closing Time Indebtedness.
(pp) "Exclusivity Period" means the period ending on the earlier of (i) the Closing Date or (ii) the date that this Agreement is validly terminated in accordance with its terms.
(qq) "Financial Statements" means (i) the Annual Financial Statements and (ii) the Interim Financial Statements.
(rr) "GAAP" means generally accepted accounting principles including the International Financial Reporting Standards (IFRS).
(ss) "Governmental Entity" means: (i) any governmental or public department, central bank, court, minister, governor-in-counsel, cabinet, commission, tribunal, board, bureau, agency, commissioner or instrumentality, whether international, multinational, national, federal, provincial, state, territory, municipal, local or other; (ii) any subdivision or authority of any of the above; (iii) any stock exchange; and (iv) any quasi-governmental or private body exercising any regulatory, expropriation or taxing authority under or for the account of any of the above.
(tt) "Indebtedness" means (i) any liability, indebtedness or other obligations for borrowed money (including bank loans, lines of credit and loans or notes or similar instruments from related parties, shareholders or Affiliates), or evidenced by an instrument for the payment of money; (ii) all liabilities or obligations created or arising under any conditional sale, holdback or the deferred purchase price of any property, services, goods, equity or assets (including securities) in respect of which the Company is liable, contingently or otherwise (including any "earnouts",

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indemnities and "seller notes", in each case valued at the maximum amount payable); (iii) capital or finance lease obligations in the Financial Statements or as required to be capitalized as a capital or finance lease in accordance with GAAP; or any other obligation that meets the definition of a "liability" in accordance with GAAP; (iv) any obligations under exchange rate contracts, interest rate protection agreements, currency swap, forward or other hedging or derivatives arrangements, including all breakage costs or fees; (v) any obligations to reimburse the issuer of any letter of credit (where the issuer has made payment on such letter of credit), surety bond, performance bond or other guarantee of contractual performance, in each case to the extent drawn; (vi) any declared but unpaid dividends or distributions; (vii) any other indebtedness or obligation reflected or required to be reflected as indebtedness on the Company's balance sheets; (viii) deferred compensation arrangements; (ix) any indebtedness of a person of a type that is referred to in clauses (i) through (viii) above and which is either guaranteed by, or secured by an Encumbrance upon any property or asset owned by the Company; (x) any amounts owed to Affiliates; (xi) any payments, fines, fees, penalties, premiums, interest, expenses or other amounts applicable to or otherwise incurred in connection with, or as a result of any prepayment or early satisfaction or termination of, any obligation described in clauses (i) through (ix) above, including all breakage costs and fees; (xii) any other intercompany and related party payables including declared but unpaid dividends; (xiii) unpaid or accrued income tax obligations of the Company; (xiv) any obligation secured by an Encumbrance on any property of the Company, (xv) any indebtedness incurred in connection with any COVID 19 stimulus legislation, and (xvi) any items listed on Section 1.1(uu) of the Disclosure Letter. For greater clarity, Indebtedness does not include liabilities or obligations arising with respect to Transaction Expenses.
(uu) "Indemnity Escrow Account" and "Indemnity Escrow" have the meanings specified in Section 2.3(a).
(vv) "Indemnity Escrow Amount" means $5,000,000.
(ww) "Intellectual Property" means domestic and foreign: (i) patents, provisional patent applications, applications for patents and reissues, divisions, continuations, renewals, extensions and continuations-in-part of patents or patent applications; (ii) proprietary and non-public business information, including inventions (whether patentable or not), invention disclosures, improvements, discoveries, trade secrets, confidential information, know-how, methods, processes, designs, technology, technical data, schematics, formulae and customer lists, and documentation relating to any of the foregoing; (iii) copyrights, copyright registrations and applications for copyright registration; (iv) designs, design registrations, design registration applications; (v) trade names, business names, corporate names, domain name registrations, website names and world wide web addresses, common law trade-marks, trade-mark registrations, trade mark applications, trade dress and logos, and the goodwill associated with any of the foregoing; and (vi) any other intellectual property and industrial property.
(xx) "Interim Balance Sheet Date" means June 30, 2020.
(yy) "Interim Financial Statements" means the unaudited financial statements of each of the Company as at June 30, 2020 for the six-month period then ended.

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(zz) "LDRLY" means LDRLY (Technologies) Inc.
(aaa) "Leased Properties" means the lands and premises listed and described in Section 3.14 of the Disclosure Letter by reference to their municipal address.
(bbb) "Leases" means all oral and written leases and all amendments, extensions, assignments and variations thereof or any guarantee or security agreements therefor, of the properties leased by the Company.
(ccc) "Management Shareholder" means, collectively, BRFT, Galan Akin and Joshua Nilson;
(ddd) "Material Adverse Change" means any change, occurrence, circumstance, event, state of facts or effect that, when considered either individually or in the aggregate, (x) is, or would reasonably be expected to be, material and adverse to the business, operations, assets, liabilities or financial condition of the Company, taken as a whole, except to the extent that the material adverse effect results from or is caused by: (i) general economic, political or regulatory conditions or events in any of the geographical areas in which the Company operates; (ii) any change in the financial, banking, credit, debt, currency or capital markets in general, including changes in interest rates; (iii) conditions generally affecting any industry (or any segment thereof) or any market in which the Company operates; (iv) acts of God, natural disasters, pandemics (including but not limited to COVID-19), epidemics, national or international political or social conditions, including the engagement in hostilities, whether commenced before or after the date hereof, and whether or not pursuant to the declaration of a national emergency or war (including any escalation or worsening of war), or the occurrence of any military or terrorist attack or other force majeure event; or (v) any changes from and after the date of this Agreement in applicable laws, or accounting rules or principles including, for greater certainty, changes in GAAP; provided, that with respect to clauses (i) through (v), the exclusion shall not apply to the extent such matter has a materially disproportionate effect on the Company relative to other comparable persons operating in the markets and/or industries in which the Company operates; or (y) has prevented or materially impaired, or would reasonably be expected to prevent or materially impair, the ability of the Company or the Vendor to consummate the transactions contemplated by this Agreement, excepting with respect to any change, occurrence, circumstance, event, state of facts or effect arising with respect to the COVID-19 pandemic having an effect on markets, industries or society generally.
(eee) "Material Contracts" has the meaning specified in Section 3.15.
(fff) "Misrepresentation" means an untrue statement of a material fact or an omission to state a material fact required or necessary to make the statements contained therein not misleading in light of the circumstances in which they are made.
(fff.1) "Offering" means a debt or equity financing undertaken by the Company for gross proceeds of $54 million or such other amount as the Purchaser and the Vendors' Representative may mutually agree upon.

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(ggg) "Ordinary Course" means, with respect to an action taken by the Company, that such action is consistent with the past practices of the Company and is taken in the ordinary course of the normal day-to-day operations of the business of the Company.
(hhh) "Outside Date" has the meaning specified in Section 8.1(a)(iv).
(iii) "Payoff Letters" means the payoff of the Actual Closing Time Indebtedness listed in Section 1.1(hhh) of the Disclosure Letter, which payoff letters shall be provided by the Company in Indebtedness, which payoff letters shall be provided by the Company in form and substance satisfactory to the Purchaser acting reasonably, that (i) specifies the aggregate amount required to be paid to fully satisfy such Actual Closing Time Indebtedness (including principal, interest, fees, expenses, premiums, penalties and other amounts payable) and (ii) provides for the full release and termination of (A) any guarantees provided by the Company of such Actual Closing Time Indebtedness and (B) any and all Encumbrances and other security interests in the properties and assets of the Company securing such Actual Closing Time Indebtedness.
(jjj) "Permitted Encumbrances" means (i) Encumbrances for Taxes not yet due and payable, (ii) easements, encroachments and other minor imperfections of title which do not, individually or in the aggregate, detract from the value of or impair the use or marketability of any real property, and (iii) Encumbrances listed and described in Section 1.1(iii) of the Disclosure Letter but only to the extent such Encumbrances conform to their description in Section 1.1(iii) of the Disclosure Letter.
(kkk) "Pre-Closing Taxes" means any liability arising out of, related to or resulting from or with respect to Taxes attributable to any Pre-Closing Tax Period (including the Pre-Closing Tax Period portion of any Straddle Period) of or with respect to the Company. For purposes of determining Pre-Closing Taxes in respect of a Straddle Period, Taxes shall be allocated in accordance with Section 10.2.
(lll) "Pre-Closing Tax Period" means any Tax or fiscal period ending on (and including), or before, the Closing Date.
(mmm) "Publicly Available Software" means (a) any Software that contains, or is derived in any manner (in whole or in part) from, any Software that is distributed as "free software" or "open source software" (e.g. Linux), or pursuant to "open source," "copyleft" or similar licensing and distribution models; and (b) any Software that requires as a condition of use, modification, and/or distribution of such Software that such Software or other Software incorporated into, derived from, or distributed with such Software (i) be disclosed or distributed in source code form; (ii) be licensed for the purpose of making derivative works; or (iii) be redistributable at no or minimal charge.
(nnn) "Purchase Price" means (i) $150,000,000; plus (ii) the Actual Closing Time Cash; plus (iii) the Actual Closing Time Working Capital; minus (iv) the Actual Closing Time Transaction Expenses; minus (v) the Actual Closing Time Indebtedness.
(ooo) "Purchase Price Adjustment Escrow Account" and "Purchase Price Adjustment Escrow" have the meaning specified in Section 2.3(a).

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(ppp) "Purchase Price Adjustment Escrow Amount" means $1,000,000.
(qqq) "Purchaser" has the meaning specified in the preamble.
(rrr) "Purchaser Adjustment" has the meaning specified in Section 2.8(c).
(sss) "Purchaser Circular" means the notice of the special shareholders meeting of the Purchaser to be held with respect to the approval of the transactions contemplated hereunder, and accompanying management information circular, including all schedules, appendices and exhibits to, and information incorporated by reference in, such management information circular, to be sent to the Purchaser's shareholders in connection with such meeting, as amended, supplemented or otherwise modified from time to time in accordance with the terms of this Agreement.
(ttt) "Purchaser Shares" means the common shares of the Purchaser as presently constituted.
(uuu) "Related Party" means the former, current and future directors, officers, employees, members, managers, equityholders, agents, partners, representatives, controlling persons, agents, advisors and successors and permitted assigns.
(vvv) "Restricted Cash" means any cash or cash equivalents which is not freely usable because it is subject to restrictions, limitations or taxes on use or distribution by law, contract or otherwise, including without limitation, restrictions on dividends and repatriations or any other form of restriction.
(www) "Software" means computer software and programs (both source code and object code form), all proprietary rights in the computer software and programs and all documentation and other materials related to the computer software and programs.
(xxx) "SRED" means the Scientific Research and Experimental Development tax incentive program.
(yyy) "Straddle Period" means any Tax or fiscal period that begins on or before and ends after the Closing Date.
(zzz) "Tax Act" means the Income Tax Act (Canada).
(aaaa) "Tax Assets" means a Tax credit or refund (including without limitation arising from a SRED claim) received by or in relation to the Company relating to a PreClosing Tax Period, to the extent only that such Tax Asset has not already been adjusted for under any other provision of this Agreement, and net of (i) any costs incurred by the Purchaser or the Company in connection with the recovery of such credit or refund, and (b) any Taxes incurred in respect of such credit or refund, to the extent any such amounts were not included in the Closing Statements.
(bbbb) "Tax Returns" means any and all returns, reports, declarations, elections and claims for refund, filed or required to be filed in respect of Taxes, including any attachment thereto and any amendment thereof.

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(cccc) "Taxes" means: (i) any and all taxes, duties, fees, excises, premiums, assessments, imposts, levies and other charges or assessments of any kind whatsoever imposed by any Governmental Entity, whether disputed or not, including income, gross receipts, branch profits, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, escheat, environmental, customs duties, capital stock, franchise, profits, withholding, social security, unemployment, disability, real property, personal property, sales, use, transfer, registration, ad valorem, value added, alternative or add-on minimum or estimated taxes; and (ii) all interest, penalties, fines, additions to tax or other additional amounts imposed by any Governmental Entity on or in respect of amounts of the type described in clause (i) above or this clause (ii).

(dddd) "Third Party Licenses" has the meaning specified in Section 3.19(c).

(eeee) "Transaction Expenses" means, without duplication: (i) the aggregate out-ofpocket fees and expenses not paid prior to the Closing Time, incurred by the Company, the Vendor or their respective Affiliates of investment bankers, legal counsel, accountants, consultants and other advisors (including any fees and expenses related to brokerage, commissions, finders or financial advisors) in connection with the transactions contemplated by this Agreement, and the consummation of the transactions contemplated hereby, and (ii) 50% of the fees and expenses of the Escrow Agent in connection with the Escrow Agreement.
(ffff) "Vendor" and "Vendors" has the meaning specified in the preamble.

(gggg) “Vendors’ Representative” shall be Jason Bailey.

(hhhh) "Working Capital" means the amount by which the aggregate current assets of the Company (which, for greater certainty, includes Accounts Receivable and Tax Assets, but does not include Cash) exceeds the aggregate current liabilities of the Company (excluding Indebtedness and Transaction Expenses).
1.2 Certain Rules of Interpretation . In this Agreement, unless otherwise specified:
(a) Headings, etc. The division of this Agreement into Articles and Sections and the insertion of headings are for convenient reference only and do not affect the construction or interpretation of this Agreement.
(b) Currency. All references to dollars or to $ are references to Canadian dollars.
(c) Gender and Number. Any reference to gender includes all genders. Words importing the singular number only include the plural and vice versa.
(d) Certain Phrases and References, etc. The words "including", "includes" and "include" mean "including (or includes or include) without limitation", and "the aggregate of", "the total of", "the sum of", or a phrase of similar meaning means "the aggregate (or total or sum), without duplication, of". Unless stated otherwise, "Article", "Section", and "Schedule" followed by a number or letter mean and refer to the specified Article or Section of or Schedule to this Agreement. The term "Agreement" and any reference in this Agreement to this Agreement or any other agreement or document includes, and is a reference to, this Agreement or such other agreement or document as it may have been, or may from time to time be, amended, restated, replaced, supplemented or

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novated and includes all schedules to it. The term "made available" means copies of the subject materials were provided to the Purchaser.

(e) Capitalized Terms. All capitalized terms used in any Schedule or in the Disclosure Letter have the meanings ascribed to them in this Agreement.
(f) Knowledge and "threatened". Where any representation or warranty is expressly qualified by reference to the knowledge of the Management Shareholders, it is deemed to refer to the knowledge of the Management Shareholders after reasonable inquiry. Where any representation or warranty is expressly qualified by reference to the word "threatened", it means threatened to the actual knowledge of the Management Shareholders.
(g) Accounting Terms. All accounting terms are to be interpreted in accordance with GAAP and all determinations of an accounting nature in respect of the Company required to be made shall be made in a manner consistent with GAAP.
(h) Statutes. Any reference to a statute refers to such statute and all rules and regulations made under it, as it or they may have been or may from time to time be amended or re-enacted, unless stated otherwise.
(i) Schedules. The schedules attached to this Agreement and the Disclosure Letter form an integral part of this Agreement for all purposes of it. The Disclosure Letter itself and all information contained in it is confidential information and may not be disclosed unless: (i) it is required to be disclosed pursuant to applicable law or (ii) a party needs to disclose it in order to enforce or exercise its rights under this Agreement or to a lender or financier.
1.3 Vendors' Representative .
(a) In order to administer efficiently the determination of certain matters under this Agreement, each of the Vendors hereby severally and irrevocable appoints the Vendors’ Representative as its representative, agent, proxy and attorney-in-fact, such designation and appointment being coupled with an interest, with full power of substitution, to take any action that is required under the Agreement to effectuate Closing or to execute and deliver any documents on their behalf, including without limitation, for the purposes of all Closing matters and deliveries of documents and do and cause to be done all such acts and things as may be necessary or desirable in connection with this Agreement. Without limiting the generality of the foregoing, Vendors’ Representative may, on its own behalf and on behalf of the Vendors:
- (i) negotiate, settle and deliver the final forms of any documents that are necessary or desirable to give effect to the Transaction;
- (ii) give and receive all notices and communications on behalf of such Vendor in connection with this Agreement and the Escrow Agreement;
- (iii) direct the Escrow Agent and all other persons on behalf of such Vendor regarding the payment of all amounts payable to such Vendor under this Agreement and the Escrow Agreement;

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(iv) make all decisions and take all actions relating to the respective rights, obligations and remedies of such Vendor under this Agreement and the Escrow Agreement, including to receive and send notices, to receive and deliver documents, to exercise, enforce or waive rights or conditions, to give releases and discharges, to seek indemnification on behalf of such Vendor, to defend against indemnification claims of the Purchaser, and to negotiate, agree to, enter into settlements and compromises of, and comply with orders and awards of courts with respect to claims against such Vendor;
(v) amend, supplement or change this Agreement and the Escrow Agreement, or waive any provision hereof, including, without limitation, extending any time periods as may be contemplated herein, such as the Closing Date, or terminating this Agreement; provided, that such amendment, supplement, change or waiver applies to all Vendors, on a pro rata basis in proportion to their respective Company Securities’ holdings;
(vi) receive service of process on behalf of such Vendor in connection with any claims under this Agreement and the Escrow Arrangement; and
(vii) take all actions as are necessary or appropriate in judgement of the Vendors' Representative in connection with any of the foregoing, including retaining such counsel, accountants and other professional advisors as he reasonably deems necessary to assist him in the performance of his duties hereunder,

all in Vendors’ Representative’s absolute discretion, as it deems appropriate.

(b) The Purchaser may rely upon any decision, act, consent or instruction of the Vendors' Representative as being the decision, act, consent or instruction of each Vendor. The Purchaser is hereby relieved from any liability to any Vendor for any acts taken by the Purchaser in accordance with such decision, act, consent or instruction of the Vendors' Representative.
(c) The Vendors' Representative shall be protected in acting upon any written notice, request, waiver, consent, certificate, receipt, statutory declaration or other paper or document furnished to him hereunder, not only as to its due execution, and the validity and effectiveness of its provisions, but also as to the truth and acceptability of any information therein contained therein which the Vendors' Representative in good faith believes to be genuine and what it purports to be.
(d) The Vendors will severally (and not jointly, or jointly and severally), on a pro rata basis in proportion to their respective entitlements pursuant to the Entitlement Schedule, defend, indemnify and hold harmless the Vendors' Representative from and against all claims, judgments, damages, liabilities, settlements, losses, costs and expenses, including legal fees, disbursements and charges, arising from or relating to the Vendors' Representative performance of its obligations hereunder, except with respect to claims relating to the fraudulent action or intentional misrepresentation of the Vendors' Representative.

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ARTICLE 2 PURCHASE AND SALE

2.1 Purchase and Sale . Based on the representations and warranties set forth herein, the Purchaser hereby agrees to purchase the Company Securities from the Vendors, subject to the terms and conditions set forth in this Agreement, and the Vendors hereby agree to sell and transfer the Company Securities to the Purchaser free and clear of any and all Encumbrances.

2.2 Purchase Price . In consideration for the acquisition of the Company Securities, the Purchaser shall pay to the Vendors the Purchase Price, subject to adjustment as set forth in this Agreement.

2.3 Closing Payments . At the Closing, the Purchaser will pay or cause to be paid:
(a) (i) as to the Indemnity Escrow Amount, by the Purchaser paying such amount to or to the order of the Escrow Agent, in trust, for deposit in an escrow account (the " Indemnity Escrow Account " or " Indemnity Escrow ") to be held in escrow pursuant to Article 10 and the Escrow Agreement; and (ii) as to the Purchase Price Escrow Amount, by the Purchaser paying such amount to or to the order of the Escrow Agent, in trust, for deposit in an escrow account (the " Purchase Price Adjustment Escrow Account " or " Purchase Price Adjustment Escrow ")(the Indemnity Escrow Account and Purchase Price Adjustment Escrow Account collectively referred herein as the " Escrow Account " or " Escrow ") to be held in escrow pursuant to Article 11 and the Escrow Agreement;
(b) An amount equal to:
- (i) Fifty Million ($50,000,000) Dollars; plus
- (ii) the Estimated Closing Time Cash; plus
- (iii) the Estimated Closing Time Working Capital; minus
- (iv) the Estimated Closing Time Indebtedness; minus
- (v) the Estimated Closing Time Transaction Expenses; minus
- (vi) the sum of the Indemnity Escrow Amount and the Purchase Price Adjustment Escrow Amount;

by the Purchaser paying such net amount to solicitors chosen by the Vendors (the " Vendors' Solicitors "), in trust, unless the parties otherwise agree in writing with respect to some of the amounts payable under this Section 2.3(b) as part of the funds flow at the Closing;

(c) An amount equal to the amounts set forth in the Payoff Letters to the persons owed any portion thereof in accordance with the Payoff Letters delivered pursuant to Section 7.1(f)(viii); and
(d) In full satisfaction of the balance of the Purchase Price, the Purchaser shall issue to the Vendors that number of Purchaser Shares that is equal in number to the sum of (i) the number of Purchaser Shares issued and outstanding at Closing

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plus (ii) the number of Purchaser Shares issued or issuable upon conversion or exercise of securities sold under the Offering, calculated on a fully-diluted basis, irrespective of the aggregate value of such Purchaser Shares. Notwithstanding the foregoing, in the event that the amount described in Section 2.3(b) is reduced to below nil (such amount below nil being the " Shortfall "), then the number of Purchaser Shares issuable under this Section 2.3(d) shall be reduced by that number of Purchaser Shares that is equivalent in value to the Shortfall.

2.4 Transactions to be Effected at the Closing .

(a) At the closing, Purchaser will deliver to the Vendors:
- (i) payment of the amount as described in Section 2.3(b);
- (ii) evidence in a form satisfactory to the Vendors, acting reasonably, of issuance of the Purchaser Shares in accordance with Section 2.3(d) herein;
- (iii) evidence in a form satisfactory to the Vendors, acting reasonably, that the board of directors of Purchaser has approved the transactions contemplated by this Agreement; and
- (iv) all other agreements, documents, instruments or certificates required to be delivered by the Purchaser under Article 7 or elsewhere in this Agreement.
(b) At the Closing, the Vendors will deliver to Purchaser:
- (i) certificates representing the Company Securities, free and clear of all Encumbrances, duly endorsed in blank or accompanied by share transfers or other instruments of transfer duly executed in blank;
- (ii) resignations of all directors and officers of the Company, excepting Jason Bailey and Joshua Nilson, if and as directed by the Purchaser; and
- (iii) all other agreements, documents, instruments or certificates required to be delivered by the Vendors at the Closing under Article 7 or elsewhere in this Agreement.
2.5 Special Covenants .
(a) The parties agree that, to the best of their knowledge, the consideration set forth in the joint election hereinafter referred to will represent the fair market value of the Company Securities at the date of disposition.
(b) The parties hereto further agree to make a joint election pursuant to Subsection 85(1) of the Tax Act, and that the amount the Vendors and the Purchaser will agree upon in the election in respect of the Company Securities is an amount which is not less than each Vendor's respective "Cost Amount" (as defined in subsection 248(1) of the Tax Act), and not more than the fair market value of the Shares, and shall be deemed to be the Vendor's respective proceeds of disposition and the Purchaser's cost of the Company Securities.

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(c) The parties agree to complete and file within the time limit specified in Section 85(6) of the Tax Act, the election under subsection 85(1) of the Tax Act in respect of the Company Securities disposed pursuant to this Agreement.
2.6 Estimated Closing Statement .
(a) Not later than five (5) Business Days prior to the Closing, the Company shall prepare in good faith and deliver to the Purchaser and the Vendors' Representative, together with reasonable supporting or underlying documentation used in the preparation thereof, a written statement estimating (the " Estimated Closing Statement "):
- (i) the aggregate Indebtedness of the Company as of the Closing Time (the " Estimated Closing Time Indebtedness ");
- (ii) the aggregate Transaction Expenses as of the Closing Time (the " Estimated Closing Time Transaction Expenses ");
- (iii) the aggregate Cash as of the Effective Time (the " Estimated Closing Time Cash ");
- (iv) the Working Capital as of the Effective Time (the " Estimated Closing Time Working Capital ").

For the purposes of determining the Estimated Closing Time Cash, the Estimated Closing Time Indebtedness, the Estimated Closing Time Transaction Expenses and Estimated Closing Time Working Capital pursuant to this Section 2.6(a), any amounts denominated in any currency other than Canadian dollars shall be converted to Canadian dollars using the applicable daily average foreign exchange rate available from the Bank of Canada as of 4:30 p.m., or, if not available, quoted in the Wall Street Journal, in each case, as of and on the day prior to the Business Day the Estimated Closing Statement is delivered to the Purchaser.

(b) The Company shall provide reasonably prompt access, upon every reasonable request, to the Purchaser and its advisors, to all work papers of the Company and its respective accountants and auditors (if any, and subject to the Purchaser executing a customary waiver of any rights against such accountants or auditors), accounting and other pertinent books and records and the appropriate personnel to verify the accuracy, presentation and other matters relating to the preparation of the Estimated Closing Statement. To the extent that the Purchaser disagrees with the Estimated Closing Statement or any amounts set forth therein, (i) the Purchaser shall be allowed to review and comment on the Estimated Closing Statement, (ii) the Company shall consider those comments in good faith, and (iii) the Company shall make any changes to the Estimated Closing Statement that are so agreed upon by the Parties. The Estimated Closing Statement shall be revised by the Company to reflect any such resolution.
(c) To the extent that the Purchaser disagrees with the Estimated Closing Statement or any amounts set forth therein and the Purchaser and the Vendors'

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Representative are not able to resolve such differences prior to the Effective Date:

  - (i) if the Estimated Closing Statement reflects an upwards adjustment to the Estimated Purchase Price such that the cash amount payable under Section 2.3(b) is, in the aggregate, greater than $65,000,000, then the Purchaser shall pay an amount of $50,000,000 under Section 2.3(b) only, and the parties shall resolve any disagreements with respect to upwards or downwards adjustments for Actual Closing Time Cash, Actual Closing Time Indebtedness and Actual Closing Time Transaction Expenses pursuant to Section 2.7 instead; or

  - (ii) in all other circumstances, the Estimated Closing Statement shall remain as delivered by the Company to Purchaser, subject, without prejudice, to Purchaser’s right to dispute the amounts reflected in the Estimated Closing Statement through its Draft Closing Statement under Section 2.7. For the avoidance of doubt, the failure of the Purchaser to comment on or dispute any item set forth in the Estimated Closing Statement shall in no event be deemed to restrict, limit or otherwise affect the calculation of any items in the Draft Closing Statement.

2.7 Preparation of Draft Closing Statement .
(a) Within 120 days following the Closing Date (or such other date as is mutually agreed to by the Vendors and the Purchaser in writing), the Purchaser shall prepare and deliver to Vendors' Representative, receiving on behalf of all Vendors, a written statement prepared in good faith (the " Draft Closing Statement "), setting forth
- (i) the Actual Closing Time Indebtedness;
- (ii) the Actual Closing Time Transaction Expenses;
- (iii) the Actual Closing Time Cash; and
- (iv) The Actual Closing Time Working Capital.

For the purposes of determining the amounts set forth in the Draft Closing Statement, any amounts denominated in any currency other than Canadian dollars shall be converted to Canadian dollars using the applicable daily average foreign exchange rate available from the Bank of Canada as of 4:30 p.m., or, if not available, quoted in the Wall Street Journal, in each case, on the Closing Date.

(b) The Vendors' Representative, on behalf of all Vendors, shall have twenty (20) Business Days to review the Draft Closing Statement following receipt of it and Vendors' Representative must notify the Purchaser in writing if it has any objections to the Draft Closing Statement within such twenty (20) Business Day period, which notice must contain a statement of the basis of each of the objections and each amount in dispute. The Purchaser shall provide access, upon every reasonable request, to Vendors' Representative and his advisors, to all work papers of the Purchaser, accounting books and records and the appropriate personnel to verify the accuracy, presentation and other matters

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relating to the preparation of the Draft Closing Statement, subject to execution and delivery by Vendors' Representative , on behalf of himself and all Vendors, and his respective advisors of any agreement or other document, including any release, waiver or indemnity that the Purchaser’s auditors require prior to providing such access.

(c) If the Vendors' Representative sends a notice of objection of the Draft Closing Statement in accordance with Section 2.7(b), the Parties shall promptly meet to try to resolve such objections within twenty (20) Business Days following receipt of the notice. Failing resolution of any objection to the Draft Closing Statement raised by the Vendors' Representative, only the items and amount(s) in dispute will be submitted for determination to an independent firm of chartered accountants mutually agreed to by the Vendors' Representative and the Purchaser (and, failing such agreement between the Vendors' Representative and the Purchaser within a further period of five (5) Business Days, such independent firm of chartered accountants to be mutually agreed upon by the parties). The independent firm of chartered accountants shall identify a member at its Vancouver office to act in such mandate and shall determine the procedures applicable to the resolution of the amounts in dispute with the primary purposes of minimizing expenses of the parties and expediting the accurate resolution of the dispute. The determination of such firm of chartered accountants of the amount(s) in dispute and any corresponding changes flowing from the resolution of such amounts in dispute will be final and binding upon the parties and will not be subject to appeal, absent manifest error. Such firm of chartered accountants are deemed to be acting as experts and not as arbitrators. Notwithstanding the foregoing, the determination of such firm of chartered accountants of the amount(s) in dispute shall in no event be more favourable to the Purchaser than reflected in the Draft Closing Statement delivered by the Purchaser or more favourable to the Vendors than shown in the proposed changes to the Draft Closing Statement delivered by the Vendors' Representative under its notice of objection pursuant to Section 2.7(b). During the review by the firm of chartered accountants, the Purchaser and the Vendors' Representative shall each make available to such firm of chartered accountants, such individuals and such information, facilities, books, records and work papers as may be reasonably required by the firm of chartered accountants to fulfill their obligations hereunder during normal business hours (such access not to unreasonably disrupt the operations of the Purchaser).
(d) If the Vendors' Representative does not notify the Purchaser of any objection within the twenty (20) Business Day period, the Vendors shall each be deemed to have accepted and approved the Draft Closing Statement and such Draft Closing Statement will be final, conclusive and binding upon the parties, absent manifest error and will become the "Closing Statement" on the next Business Day following the end of such twenty (20) Business Day period.
(e) If the Vendors' Representative sends a notice of objection in accordance with Section 2.7(b), the parties shall revise the Draft Closing Statement to reflect the final resolution or final determination of such objections under Section 2.7(c) within five (5) Business Days following such final resolution or determination. Such revised Draft Closing Statement will be final, conclusive and binding upon the parties, absent manifest error. The Draft Closing Statement will become the

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"Closing Statement" on the next Business Day following revision of the Draft Closing Statement under this Section 2.7(e).

(f) The Vendors and the Purchaser shall each bear their own fees and expenses, including the fees and expenses of their respective auditors, in preparing or reviewing, as the case may be, the Draft Closing Statement. In the case of a dispute and the retention of a firm of chartered accountants to determine such amount(s) in dispute, the costs and expenses of such firm of chartered accountants will be borne by the Vendors and the Purchasers in such proportions as the positions taken by the Vendors and the Purchaser are unsuccessful when compared to the Closing Statement, unless such chartered accountants determine that the Estimated Purchase Price varies from the actual Purchase Price (as confirmed by the Closing Statements finalized pursuant to Section 2.7(d) or (e)) by more than 10%, in which event (i) the Purchaser shall be solely responsible for such costs and expenses if the actual Purchase Price is determined by such chartered accounts to be 10% more than the Estimated Purchase Price, or (ii) the Vendors shall be solely responsible for such costs and expenses if the actual Purchase Price is determined by such chartered accountants to be 10% less than the Estimated Purchase Price. However, in all events, the Vendors and the Purchaser shall each bear their own costs in presenting their respective cases to such firm of chartered accountants.
(g) The parties agree that the procedure set forth in this Section 2.7 for resolving disputes with respect to the Draft Closing Statement is the sole and exclusive method of resolving such disputes, absent manifest error. This Section 2.7 will not prohibit any party from instigating litigation to compel specific performance of this Section 2.7 or to enforce the determination of the independent firm of chartered accountants.
2.8 Post-Closing Adjustment .
(a) The Estimated Purchase Price will be decreased or increased, as applicable, dollar-for-dollar, to the extent that the Actual Closing Time Cash, Actual Closing Time Indebtedness, and Actual Closing Time Transaction Expenses, in each case as determined from the Closing Statement, is less than or greater than, respectively, Estimated Closing Time Cash, the Estimated Closing Time Indebtedness, and the Estimated Closing Time Transaction Expenses, in each case as determined from the Estimated Closing Statement, as applicable.
(b) If the Purchase Price is equal to or greater than the Estimated Purchase Price based on the foregoing, (a) the Purchaser will pay such difference (if any) to the Vendors' Solicitors by wire transfer of immediately available funds within 10 Business Days after the Draft Closing Statement becomes the Closing Statement in accordance with Section 2.6(d) or Section 2.6(e), as the case may be, and (b) the Purchaser and the Vendor will jointly instruct the Escrow Agent to pay the amount in the Purchase Price Adjustment Escrow Account to the Vendor's Solicitors in accordance with the Escrow Agreement.
(c) If the Purchase Price is less than the Estimated Purchase Price based on the foregoing (such amount, the " Purchaser Adjustment "), the Purchaser and the Vendors' Representative will jointly instruct the Escrow Agent to pay the Purchaser Adjustment to the Purchaser by wire transfer of immediately available

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funds from the Purchase Price Adjustment Escrow Account. If the Purchase Price Adjustment Escrow Account is not sufficient for payment of the Purchaser Adjustment, then the Vendors shall pay any shortfall to the Purchaser within five (5) business days of such determination. If the Purchaser Adjustment is less than the amount in the Purchase Price Adjustment Escrow Account, the Purchaser and the Vendor will jointly instruct the Escrow Agent to pay the remaining balance of the Purchase Price Adjustment Escrow Amount, if any, after giving effect to the payment of the Purchaser Adjustment, to the Vendor.

2.9 Withholding Taxes . Notwithstanding anything to the contrary in this Agreement, the Purchaser, the Company, and the Escrow Agent, as applicable, shall be entitled to deduct and withhold from any consideration otherwise payable or otherwise deliverable to any Vendor, or any other person under this Agreement, the Escrow Agreement or other ancillary agreements, such amounts as the Purchaser, the Company, and the Escrow Agent, as applicable, are required or reasonably believe to be required to deduct and withhold from such consideration under any provision of any laws in respect of Taxes. Any such amounts will be deducted, withheld and remitted from the amount payable pursuant to this Agreement, the Escrow Agreement or other ancillary agreement and shall be treated for all purposes under this Agreement as having been paid to the person in respect of which such deduction, withholding and remittance was made, provided that such deducted and withheld amounts are actually remitted to the appropriate Governmental Entity.

2.10 Working Capital Adjustment . The Purchase Price shall be further adjusted as follows:

(a) In the event that Actual Closing Time Working Capital is negative, the Purchase Price shall not be adjusted.
(b) In the event that the Actual Closing time Working Capital is positive, on that date which is one year from Closing (the " Working Capital Adjustment Date "), the Purchase Price shall be adjusted downward by an amount equal to Accounts Receivable or Tax Assets not yet received by the Company or the Purchaser as at the Working Capital Adjustment Date (such adjustment amount the " Bad AR Adjustment ").
(c) The Working Capital Adjustment Amount, if any, shall be deducted from the Indemnity Escrow Amount, and the Purchaser and the Vendors' Representative will jointly instruct the Escrow Agent to pay the Bad AR Adjustment to the Purchaser by wire transfer of immediately available funds from the Indemnity Escrow Account. If the Purchase Indemnity Escrow Account is not sufficient for payment of the Bad AR Adjustment, then the Vendors shall pay any shortfall to the Purchaser within five (5) business days of such determination.

2.11 Closing . The Closing will be subject to the terms and conditions of this Agreement and will take place electronically, at 11:59PM Vancouver time, on the date that the last of the conditions to Closing set forth in Article 7 have been satisfied or waived (other than conditions which, by their nature, are to be satisfied on the Closing Date) or at such other time or on such other date or at such other place as the Vendors' Representative and the Purchaser may mutually agree upon in writing.

2.12 Acknowledgements . The Vendors each acknowledge that the Purchaser Shares may be subject to pooling requirements, resale restrictions or escrow requirements

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under applicable laws or the policies of applicable securities exchanges, and that, if required by such laws or policies, the Vendors will deposit such Purchaser Shares in pool or escrow and will comply with such additional resale restrictions, on such terms as may be required.

2.13 Cooperation . The parties acknowledge that the transactions contemplated hereunder will be a "reverse takeover" (as such term is interpreted under GAAP). It is also acknowledged that the Purchaser may proceed with a concurrent equity offering of the Purchaser Shares. The parties further agree as follows:

(a) Company shall provide or cause to provide the Purchaser with all reasonably requested information as may be required by the Purchaser to prepare the Purchaser Circular and any offering document with respect to aforementioned equity offering, and to ensure that such information does not contain any Misrepresentation, and shall promptly notify the Purchaser if it becomes aware that such information contains a Misrepresentation.
(b) The Purchaser shall give the Company a reasonable opportunity to review and comment on drafts of the Purchaser Circular, offering document and other related documents, and shall give reasonable consideration to any comments made by the Company.

2.14 Entitlement Schedule . Any payment or issuance of Purchaser Shares to be made by the Purchaser under this Agreement to the Vendors shall be made to the Vendors in accordance with their respective entitlements described in the Entitlement Schedule. The Vendors represent and warrant that the Entitlement Schedule is complete and accurate as at the date of this Agreement. The completeness and accuracy of the Entitlement Schedule shall be the sole responsibility of the Company and the Vendors, and the Purchaser shall have no responsibility or liability relating to the accuracy of the Entitlement Schedule. The parties acknowledge and agree that, in the event that a Vendor should transfer the Company Securities held by it to another person prior to the Closing Date and subject to the prior written consent of the Company and the Purchaser, the Company shall update and revise the Entitlement Schedule and promptly provide the Purchaser with such updated and revised Entitlement Schedule, it being acknowledged that, at all times, the accuracy and completeness of the Entitlement Schedule shall be the sole responsibility of the Company and the Vendors and that the Purchaser shall have no responsibility or liability relating to the accuracy and completeness of any such update or revision to the Entitlement Schedule. Without limiting the generality of the foregoing, the Vendors acknowledge and agree that the Purchaser shall be entitled to rely upon the Entitlement Schedule, any update or revision thereto, and assume the accuracy and completeness thereof, without any obligation to make independent investigations regarding same.

ARTICLE 3 MANAGEMENT SHAREHOLDER REPRESENTATIONS AND WARRANTIES

The Management Shareholders jointly and severally represent and warrant to the Purchaser as follows and acknowledges that the Purchaser is relying upon these representations and warranties in connection with the purchase of the Company Securities. Each exception to the following representations and warranties that is set out in the section(s) of the Disclosure Letter referenced is identified by reference to one or more specific individual sections of this Agreement and is only effective to create an exception to each specific individual section listed.

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3.1 Corporate Status; Authorization; Enforceability . The Company is a corporation duly incorporated and validly existing under the laws of the Province of British Columbia and has not been discontinued or dissolved under such laws. No steps or proceedings have been taken to authorize or require such discontinuance or dissolution. The Company has the capacity to enter into this Agreement and the documents to be delivered hereunder and the consummation of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate actions on part of the Company. The Company has the corporate power and capacity to own, operate or lease the properties and assets now owned, operated or leased by it and to carry on its business under the laws of British Columbia as it has been and is currently conducted. This Agreement has been duly and validly executed and delivered by the Company, and (assuming due authorization, execution and delivery by Purchaser), this Agreement and the documents to be delivered hereunder constitute legal, valid and binding obligations of the Company enforceable against each of them in accordance with their respective terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, arrangement, moratorium or similar laws affecting creditors' rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

3.2 Required Authorizations . There is no requirement for any of the Company to make any filing with, give any notice to, or obtain any Authorization of, any Governmental Entity as a condition to the lawful completion of the transactions contemplated by this Agreement, or that relate solely to the identity of the Purchaser or the nature of the business carried on by the Purchaser prior to Closing. The Management Shareholders provide no representations or warranties with respect to any requirement for the Purchaser to make any filing with, give any notice to, or obtain any Authorization of, any Governmental Entity as a condition to the lawful completion of the transactions contemplated by this Agreement.

3.3 Required Consents . Except as described in Section 3.3 of the Disclosure Letter, there is no requirement for any of the Company to obtain any consent, approval or waiver of a party under any Lease or any agreement to which any of the Company is a party to any of the transactions contemplated by this Agreement.

3.4 Capitalization .

(a) The authorized capital of the Company consists of an unlimited number of Class A common shares, Class B common shares, Class A Non-Voting preferred shares, and Class B Non-Voting preferred shares. Section 3.4(a) of the Disclosure Letter sets forth the outstanding shares of the Company, all of which have been duly issued and outstanding and constitute a portion of the Company Securities. All of the shares comprising a portion of the Company Securities have been duly authorized and are validly issued, fully paid and non-assessable shares. Upon consummation of the transactions contemplated by this Agreement, the Purchaser will own all of the issued and outstanding Company Securities, free and clear of all Encumbrances.
(b) Except for the stock options described in Section 3.4(b) of the Disclosure Letter, there are no outstanding or authorized options, warrants, convertible securities, oral agreements, understandings or commitments or any rights or privileges (whether by law, pre-emptive or contractual) capable of becoming an agreement, option or commitment, of any character relating to any securities in the capital of the Company or obligating the Company to issue or sell, any securities of, or any other interest in, the Company. There are no voting trusts or agreements, pooling

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agreements, shareholder agreements, proxies or other agreements or understandings in effect with respect to the voting or transfer of any of the Company Securities. Except the common shares held by the Company in the Purchaser, the Company does not own, or have any interest in any shares or have securities, or another ownership interest, in any other person or entity.

(c) Except as disclosed in Section 3.4(c) of the Disclosure Letter, the Company has not declared or paid any dividends or declared or made any other distribution on any of its securities and has not redeemed, purchased or otherwise acquired any of its securities or agreed to do so.

3.5 No Conflicts; Consents . The execution, delivery and performance by the Company of their respective obligations under this Agreement and the documents to be delivered hereunder, and the consummation of the transactions contemplated hereby, do not and will not:

(a) violate or conflict in any material respect with the articles of incorporation, bylaws or any unanimous shareholder agreement of the Company;
(b) violate or conflict in any material respect with any judgment, order, decree, statute, law, ordinance, rule or regulation applicable to the Company;
(c) conflict with in any material respect, or result in (with or without notice or lapse of time or both) any material violation of, or material default under, or give rise to a right of termination, acceleration or modification of any obligation or loss of any benefit under any contract or other instrument to which the Company is a party; or
(d) result in the creation or imposition of any Encumbrance on any properties or assets of the Company.

No consent, approval, waiver or authorization is required to be obtained by the Company from any person or entity (including any governmental authority) in connection with the execution, delivery and performance by the Company of this Agreement and the consummation of the transactions contemplated hereby.

3.6 Corporate Records . The corporate records of the Company, including all constating documents, minute books, registers, share certificate books and all other similar documents and records (" Corporate Records ") are complete and accurate and all corporate proceedings and actions (including all meetings, passing of resolutions, transfers, elections and appointments) are reflected in the Corporate Records and have been conducted or taken in compliance with all applicable laws and with the articles and by-laws of the Company in all material respects. The Company has not ever been subject to, or affected by, any unanimous shareholders agreement.

3.7 Conduct of Business in Ordinary Course . Except as disclosed in Section 3.7 of the Disclosure Letter, since the Interim Balance Sheet Date, the Company has operated its business in the ordinary course, and without limiting the generality of the foregoing, the Company has not:

(a) sold, transferred or otherwise disposed of or diminished the value of any Assets used in the Business except for (a) Assets which are obsolete and which

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individually or in the aggregate do not exceed $200,000, or (b) inventory sold in the ordinary course;

(b) either made any capital expenditure or commitment to do so in excess of the amount budgeted for same in the capital expenditure budget set forth in Section 3.7 of the Disclosure Letter or not made any capital expenditure or commitment as and when contemplated in such capital expenditure budget;
(c) discharged any obligation or liability (whether accrued, absolute, contingent or otherwise) which individually or in the aggregate exceeded $200,000;
(d) increased its Indebtedness for borrowed money or made any loan or advance, or assumed, guaranteed or otherwise became liable with respect to the liabilities or obligation of any person;
(e) made any bonus or profit sharing distribution or similar payment of any kind or declared or paid any dividends except as may be required by the terms of a Material Contract;
(f) removed or received a notice of resignation from any auditor or director or terminated any senior employee;
(g) entered into any agreement with any person with whom it does not deal at arm'slength within the meaning of Tax Act;
(h) written off as uncollectible any Accounts Receivable which individually or in the aggregate is material to the Company or is in excess of $100,000;
(i) granted any general increase in the rate of wages, salaries, bonuses or other remuneration of any employees of the Company except as may be required by the terms of a Material Contract;
(j) increased the benefits to which employees of the Company are entitled under any Employee Plan, created any new Employee Plan for any employee, or amended or modified any existing Employee Plan;
(k) cancelled or waived any material claims or rights;
(l) compromised or settled any litigation, proceeding or other governmental action relating to the Assets, the Business or the Company;
(m) cancelled or reduced any of its insurance coverage;
(n) made any change in any method of accounting or auditing practice except as required by GAAP, or amended or approved any amendment to its constating documents or capital structure;
(o) made, changed or revoked any Tax election inconsistent with past practices or adopted or changed any method of Tax accounting, settled or compromised any liability with respect to Taxes, filed any amended Tax Return, consented to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes or changed any accounting period; or

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(p) authorized, agreed or otherwise committed, whether or not in writing, to do any of the foregoing.

3.8 No Material Adverse Change . Except as described in Section 3.8 of the Disclosure Letter, since the Interim Balance Sheet Date, there has not been any Material Adverse Change in the affairs, prospects, operations, Assets or condition of the Company, and no event has occurred or circumstance exists which would reasonably be expected to result in such a Material Adverse Change.

3.9 Compliance with Laws . The Company is conducting and has always conducted the Business and any past business in compliance with all applicable laws, other than acts or instances of non-compliance which, individually or in the aggregate, are not material.

3.10 Authorizations . The Company owns, holds, possesses or lawfully uses in the operation of the Business, all Authorizations which are necessary for it to conduct the Business or for the ownership and use of the Assets in compliance with all applicable laws. Each Authorization is valid, subsisting and in good standing, and the Company is not in default or breach of any Authorization and, no proceeding is pending or, to the knowledge of the Management Shareholders, threatened to revoke or limit any Authorization. All Authorizations are, to the knowledge of the Management Shareholders, renewable by their terms or in the ordinary course of business without the need for the Company to comply with any special rules or procedures, agree to any materially different terms or conditions or pay any amounts other than routine filing fees.

3.11 Title to the Assets . The Company owns (with good title) all of the properties and Assets that it purports to own including all the properties and Assets reflected as being owned by the Company in its financial Books and Records. The Company has legal and beneficial ownership of its Assets free and clear of all Encumbrances, except for Permitted Encumbrances. No other person owns any property or Assets which are being used in the Business except for the Leased Properties, the personal property leased by the Company pursuant to the Material Contracts and the Intellectual Property licensed to the Company and disclosed in Section 3.19 of the Disclosure Letter.

3.12 No Options, etc. to Purchase Assets . No person has any agreement, option, right of first refusal or first offer, understanding, or any right or privilege capable of becoming such for the purchase or other acquisition from the Company of any of the Assets, other than (i) Assets which are obsolete; or (ii) inventory to be sold in the Ordinary Course.

3.13 Owned Real Property . The Company has never and does not now own any real property or an interest therein, other than leasehold interests in the Leased Properties.

3.14 Leases . Section 3.14 of the Disclosure Letter sets out all of the real properties leased by the Company. True and complete copies of all Leases have been provided to the Purchaser. There is no real property leased, subleased, licensed or otherwise occupied (but not owned) by the Company other than the Leased Properties.

3.15 Material Contracts . Except for the contracts described in Section 3.15 of the Disclosure Letter, the Leases, the Employee Plans listed in Section 3.25 of the Disclosure Letter, the insurance policies listed in Section 3.26 of the Disclosure Letter and the Employment Contracts (collectively, the " Material Contracts "), the Company is a not party to or bound by:

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(a) any continuing agreement involving the performance of services, delivery of goods or materials, or payments to or by the Company of an amount or value in excess of $200,000;
(b) any agreement that expires or may be renewed at the option of any person other than the Company so as to expire more than one year after the date of this Agreement;
(c) any trust indenture, mortgage, promissory note, loan agreement or other agreement for the borrowing of money, any currency exchange, interest rate, commodities or other hedging arrangement or any leasing transaction of the type required to be capitalized in accordance with GAAP or under which the Company have created or incurred indebtedness;
(d) any agreement of guarantee, support, indemnification, assumption or endorsement of, or any similar commitment with respect to, the obligations, liabilities (whether accrued, absolute, contingent or otherwise) or Indebtedness of any other person;
(e) any agreement in respect of the Intellectual Property or Software owned by, licensed to or used by the Company, except with respect to LDRLY;
(f) any agreement for capital expenditures in excess of $100,000 in the aggregate;
(g) any confidentiality, secrecy, non-disclosure or exclusivity agreement or any agreement limiting the freedom of the Company to engage in any line of business, set the material terms of its agreements, compete with any other person, solicit any persons for any purpose, operate its Assets at maximum production capacity or otherwise to conduct its business;
(h) any agreement pursuant to which the Company is a lessor of any machinery, equipment, motor vehicles, office furniture, fixtures or other personal property;
(i) any distributor, sales, advertising, agency or manufacturer's representative agreement;
(j) any agreement made out of the ordinary course including any agreement for the purchase of real property;
(k) any agreement with any person with whom the Company does not deal at arm's length within the meaning of the Tax Act; or
(l) any agreement that is material to the Business.

3.16 No Breach of Material Contracts . The Company has performed, and has all the requisite Assets to perform, all of the obligations required to be performed by it and is entitled to all benefits under the Material Contracts to which it is a party in accordance with the respective terms and conditions thereunder. The Company has not been alleged to be in default of any Material Contract to which it is a party. Each of the Material Contracts is in full force and effect, unamended, and there exists no default or event of default or event, occurrence, condition or act (including the transactions contemplated herein) which, with the giving of notice, the lapse of time or the happening of any other event or condition, would become a default or event of default of the Company or, to the knowledge of the Management Shareholders, its counterparty

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under any Material Contract. True, correct and complete copies of all Material Contracts have been delivered to the Purchaser. All Material Contracts with non-arm's length persons, if any, do not contain any non-market terms.

3.17 No Breach of Other Contracts . With respect to agreements to which the Company is a party that are not Material Contracts, the Company has not nor, to the knowledge of the Management Shareholders, has its counterparty violated or breached, in any respect, any of the material terms or conditions of any such agreement, and to the knowledge of the Management Shareholders, all the covenants to be performed by the parties to such agreements have been fully performed.

3.18 Accounts Receivable . All Accounts Receivable of the Company (i) are properly reflected in the Company's books and records and the Financial Statements in accordance with GAAP, (ii) represent bona fide legally enforceable claims for goods or services sold by the Company in the ordinary course prior to the date of this Agreement and payable on ordinary terms (including terms substantially similar to those set forth in contracts thereto), and (iii) subject to a reserve for bad debt shown on the Company's balance sheet as of the Interim Balance Sheet Date. None of the Accounts Receivable of the Company are subject to any setoffs or counter claims or any agreement for deduction, free services or goods, discount or other deferred price or quantity adjustment, other than in the ordinary course.

3.19 Intellectual Property .

(a) Section 3.19 of the Disclosure Letter sets out all (i) patents, provisional patent applications, applications for patents and reissues, divisions, continuations, renewals, extensions and continuations-in-part of patents or patent applications; (ii) common law trademarks, trademark registrations and applications, business names, corporate names, trade names and logos; (iii) copyrights, copyright registrations and applications, and (iv) domain name registrations, website names and world wide web addresses, in each case that are owned by the Company. With respect to each such item listed in Section 3.19 of the Disclosure Letter, except as set out therein (i) the Company is the sole owner and possesses all right, title and interest in and to the item, free and clear of all Encumbrances (other than Permitted Encumbrances), and (ii) no action, suit, proceeding, arbitration, investigation, charge, complaint, claim, or demand is pending or, to the knowledge of the Management Shareholders, is threatened, that challenges the legality, validity, enforceability, registration, use or ownership of the item. The registered and issued Intellectual Property required to be set forth in Section 3.19 of the Disclosure Letter is valid and enforceable. Except as set out in Section 3.19 of the Disclosure Letter, each such registration, filing, issuance and/or application (i) has not been abandoned, cancelled or otherwise compromised, (ii) has been maintained effective by all requisite filings, renewals and payments, and (iii) remains in full force and effect. Section 3.19 of the Disclosure Letter sets out a list of all jurisdictions in which such Intellectual Property is registered or registrations have been applied for and all registration and application numbers.
(b) To the knowledge of the Management Shareholders, it is not infringing upon, misappropriating or otherwise violating any copyrights or trade secrets or other Intellectual Property of any person, nor has the Company done so in the last five years, and (ii) the Company has not received from any person in the past 36 months any written notice, charge, complaint, claim or other written assertion

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alleging any such infringement, misappropriation, or other violation by the Company of the Intellectual Property of any person. To the knowledge of the Management Shareholders, no person is infringing, misappropriating, or otherwise violating the Intellectual Property of the Company in any manner.

(c) Section 3.19 of the Disclosure Letter sets out all material Intellectual Property of third parties used by the Company in the Business. Except as set forth in Section 3.19 of the Disclosure Letter, the Company uses the Intellectual Property of third parties only pursuant to valid, effective written license agreements (collectively, the " Third Party Licenses ") and the Company has not exercised any rights, including without limitation any use, reproduction, distribution or derivative work rights, outside the scope of any Third Party Licenses. Except as set forth in Section 3.19 of the Disclosure Letter or to LDRLY, the Company has not licensed the rights to any Intellectual Property they own to any person, other than nonexclusive licenses that pass with the sale of goods and services in the ordinary course.
(d) The Intellectual Property listed in Section 3.19 of the Disclosure Letter, together with the Third Party Licenses, constitutes all material Intellectual Property used by the Company in the Business.
(e) Except as set forth in Section 3.19 of the Disclosure Letter, to the knowledge of the Management Shareholders, there has been no unauthorized disclosure of any trade secrets or proprietary information of the Company.
(f) Except as set forth in Section 3.19 of the Disclosure Letter and excepting LDRLY, following the Closing, no Vendor or any Affiliate of any Vendor will retain or use any of the Intellectual Property owned by, licensed to or used by the Company in connection with the Business.
3.20 Software and Technology .
(a) The computer and data processing systems, facilities and services used by the Company are sufficient for its operations as currently conducted and are, to the knowledge of the Management Shareholders, substantially free of any material defects, bugs and errors, and the Management Shareholders have not been made aware of any disabling codes or instructions, spyware, Trojan horses, worms, viruses or other software routines that have permitted or caused or would permit or cause unauthorized access to, or disruption, impairment, disablement, or destruction of, software, data or other materials wherein any trade secrets, or proprietary information of the Company has been disclosed to a third party (" Disabling Code ").
(b) Section 3.20 of the Disclosure Letter sets forth a list of all proprietary Software owned by the Company and used in the Business (" Company Software ") and all third-party Software contained or embedded in the Company Software and a list of all material third-party Software used in the Business. None of the Company Software incorporates or is comprised of or distributed with any Publicly Available Software in a manner which (i) requires the distribution of source code in connection with the distribution of such software in object code form; (ii) materially limits any the Company's freedom to seek full compensation in connection with marketing, licensing, and distributing such applications; or (iii)

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allows a user to have the right to decompile, disassemble or otherwise reverse engineer the software by its terms and not by operation of applicable laws. The Company is in actual possession and control of the applicable source code, object code, code writes, notes, documentation, programmers' notes, source code annotations, user manuals and know-how to the extent required for use, distribution, development, enhancement, maintenance and support of each item of material Company Software, subject to any licenses granted to third parties therein. Except as set forth in Section 3.20 of the Disclosure Letter, to the knowledge of the Management Shareholders, the Company Software does not contain any Disabling Code.

(c) The Company has not disclosed Company Software source code to any other Person, except in connection with (i) a source code escrow agreement in which release of the Company Software source code is generally limited to the following contingencies: (a) the Company ceases to support the relevant software as required by the relevant license agreement, (b) the Company fails adequately to maintain service levels established in the relevant license agreement, or (c) the Company ceases to conduct the relevant business, becomes insolvent or enters into bankruptcy; or (ii) a non-exclusive license of Company Software source code to clients. Such disclosures of source code have only been made pursuant to written confidentiality terms that reasonably protect the Company's rights in the Company Software. The Company is not obligated to operate in accordance with any outsourcing agreement or to support or maintain any of the Company Software except pursuant to agreements that provide for periodic payments to the Company thereof for such services or pursuant to warranty obligations.

3.21 Books and Records . All accounting and financial Books and Records of the Company have been fully, properly and accurately kept and completed in all material respects. Such Books and Records and other data and information are not recorded, stored, maintained, operated or otherwise wholly or partly dependent upon or held by any means (including any electronic, mechanical or photographic process, whether computerized or not) which will not be available in the ordinary course.

3.22 Financial Statements . The Financial Statements have been prepared in accordance with GAAP applied on a basis consistent with those of previous fiscal years and each presents fairly: (a) the assets, liabilities (whether accrued, absolute, contingent or otherwise) and financial position of the Company as at the respective dates of the relevant statements; and
(b) the sales and earnings and results of operations of the Company during the periods therein.

3.23 No Liabilities . The Company does not have any liability or obligation of any nature of the type which would be required to be set forth in financial statements prepared in accordance with GAAP (whether known or unknown and whether absolute, accrued, contingent or otherwise) other than (i) liabilities or obligations to the extent specifically shown and adequately accrued on the balance sheet forming part of the Financial Statements; (ii) current liabilities incurred in the ordinary course since the Interim Balance Sheet Date (none of which is a liability for breach of contract, breach of warranty, tort, infringement violation,

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misappropriation, or that relates to any cause of action, claim or lawsuit); and (iii) as disclosed in Section 3.23 of the Disclosure Letter.

3.24 Employees .

(a) The Company is in compliance with all terms and conditions of employment, except as disclosed in Section 3.24 of the Disclosure Letter, and is not alleged to be in default of any current Employment Contract. The Company has observed and materially complied with all applicable laws respecting employment. No complaint, grievance, arbitration, claim, proceeding, civil action, judgment, order or decree, work order, audit, investigation or alternative dispute resolution process has been, filed, or to the knowledge of the Vendor, made, commenced or threatened by or with any applicable Governmental Entity against the Company in respect of, concerning or affecting any employees of the Company, and, to the knowledge of the Management Shareholders, there is no basis for such a complaint.
(b) The Company has not, in the last five (5) years or currently is, engaged in any unfair labour practice.
(c) There is no Collective Agreement in force with respect to its employees nor is there any agreement with any employee association in respect of its employees.
(d) No trade union, council of trade unions, employee bargaining agency or affiliated bargaining agent holds bargaining rights with respect to any of its employees by way of certification, interim certification, voluntary recognition, or succession rights, or has applied or, to the knowledge of the Management Shareholders, threatened to apply to be certified as the bargaining agent of any of its employees. To the knowledge of the Management Shareholders, there are no threatened or pending union organizing activities involving any of its employees and no such event has occurred within the last five (5) years. There is no labour strike, dispute, work slowdown, stoppage, concerted refusal to work overtime, or other collective labour action pending or involving or, to the knowledge of the Management Shareholders, threatened against the Company and no such event has occurred within the last five (5) years.
(e) No person has applied to have the Company declared a common or related employer pursuant to applicable law.
(f) All amounts due or accrued for all salary, wages, bonuses, commissions, vacation with pay, sick days and benefits under the Employee Plans have either been paid or are accurately reflected in the Books and Records.
(g) Section 3.24 of the Disclosure Letter contains a correct and complete list of each of the Company's employees as at the date of this Agreement, whether actively at work or not, showing without names or employee numbers their salaries, wage rates, commissions, bonus arrangements, benefits, positions, status as full-time or part-time employees, location of employment, cumulative length of service with the Company and whether they are subject to a written Employment Contract. Section 3.24 of the Disclosure Letter contains for each such employee their annual vacation entitlement in days, their accrued and unused vacation days as of the last day of the month immediately preceding date hereof, any

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other annual paid time off entitlement in days and their accrued and unused days of such other paid time off as of the last day of the month immediately preceding the date hereof.

(h) Current and complete copies of all Employment Contracts (including any amendments thereto) have been delivered or made available or described to the Purchaser.
(i) None of the Company's employees have any agreement as to length of notice or severance payment required to terminate his or her employment, other than such as results by law from the employment of an employee without an agreement as to notice or severance.
(j) Except as disclosed in Section 3.24 of the Disclosure Letter there are no severance, compensation, change of control, employment, retention or other agreements or benefit plans with current or former employees providing for cash or other compensation, benefits or acceleration of benefits upon the consummation of, or relating to, the transactions contemplated by this Agreement, including a change of control of the Company.
(k) Section 3.24 of the Disclosure Letter contains a correct and complete list of each independent contractor or consultant engaged by the Company as at the date of this Agreement including their consulting fees, any other forms of compensation or benefits, and whether they are subject to a written agreement. Current and complete copies of all such agreements have been delivered or made available to the Purchaser (including any amendments thereto). Each independent contractor or consultant who is disclosed in Section 3.24 of the Disclosure Letter has been properly classified by the Company as an independent contractor and the Company has not received any notice from any Governmental Entity disputing such classification.
(l) There are no outstanding assessments, penalties, fines, liens, charges, surcharges, or other amounts due or owing pursuant to any workplace safety and insurance legislation and the Company has not been reassessed in any material respect under such legislation during the past three (3) years and, to the knowledge of the Management Shareholders, no audit of the Company is currently being performed pursuant to any applicable workplace safety and insurance legislation. There are no claims or, to the knowledge of Management Shareholders, potential claims which may materially adversely affect the Company's accident cost experience in respect of the Business.
(m) All orders and inspection reports under applicable occupational health and safety legislation (" OHSA ") have been provided to the Purchaser. There are no charges pending under OHSA. The Company has complied in all material respects with any orders issued under OHSA and there are no appeals of any orders under OHSA currently outstanding.
(n) True and complete copies of all work permits and labour market impact assessment opinion confirmations relating to the Company's employees have been made available to the Purchaser. The Company is in compliance with all terms and conditions of the work permits and the labour market impact assessment confirmations. No audit by a Governmental Entity is being

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conducted, or to the knowledge of the Management Shareholders, pending, in respect of any foreign workers.

(o) All workplace harassment (including sexual harassment) and workplace violence allegations and claims relating to the Company's current and former employees have been promptly, thoroughly and impartially investigated in accordance with the obligations of the Company under the OHSA. With respect to each such allegation or claim with potential merit, the Company has taken prompt corrective action that is reasonably calculated to prevent further workplace harassment (including sexual harassment) and workplace violence. The Company does not reasonably expect any liability with respect to any such allegations.
3.25 Employee Plans .
(a) Section 3.25 of the Disclosure Letter lists and describes all Employee Plans. The Company has furnished to the Purchaser true, correct and complete copies of all the Employee Plans (or if oral, summaries thereof), together with all related documentation including, summary plan descriptions, the most recent actuarial reports, letters of credit, financial statements and asset statements, all material opinions and memoranda (whether externally or internally prepared) and all material correspondence with any Governmental Entity or other relevant persons (including in respect of any pending action, investigation, examination or claim relating to the Company). No changes or events have occurred or are expected to occur which would affect the information contained in the actuarial reports, financial statements or asset statements required to be provided to the Purchaser pursuant to this provision.
(b) No Employee Plan is or is intended to be a "registered pension plan" or a "retirement compensation arrangement" as such terms are defined under the Tax Act.
(c) All Employee Plans have been established, maintained, administered, communicated and invested in material accordance with all laws.
(d) The Company has made all contributions and paid all premiums in respect of each Employee Plan in a timely fashion in accordance with the terms of each Employee Plan and applicable laws. The Company has paid in full all contributions and premiums for the period up to the date hereof even though not otherwise required to be paid until a later date or has made full and adequate disclosure of and provision for such contributions and premiums in the Books and Records.
(e) Other than routine claims for benefits, no Employee Plan is subject to any pending action, investigation, examination, claim (including claims for Taxes) or any other proceeding initiated by any person, and, to the knowledge of the Management Shareholders, there exists no state of facts which could reasonably be expected to give rise to any such action, investigation, examination, claim or other proceeding.
(f) No insurance policy or any other agreement affecting any Employee Plan requires or permits a retroactive increase in contributions, premiums or other payments due under such insurance policy or agreement. The level of insurance

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reserves under each insured Employee Plan is reasonable and sufficient to provide for all incurred but unreported claims.

(g) Except as described in Section 3.25 of the Disclosure Letter, none of the Employee Plans provide for retiree benefits or for benefits to retired employees or to the beneficiaries or dependants of retired employees.
(h) Subject to the requirements of applicable laws, no provision of any Employee Plan or of any agreement, and no act or omission of the Company, in any way limits, impairs, modifies or otherwise affects the right of the Company to unilaterally amend or terminate any Employee Plan, and no commitments to improve or otherwise amend any Employee Plan have been made.
(i) The execution and delivery of, and performance by the Company of, this Agreement (and the consummation of the transactions contemplated by it) will not (i) accelerate the time of payment or vesting under any Employee Plan, (ii) result in an obligation to fund (through a trust or otherwise) any compensation or benefits under any Employee Plan, (iii) increase any amount payable under any Employee Plan or (iv) result in the acceleration of any other material obligation pursuant to any Employee Plan.
(j) Only employees or former employees (or any spouses, dependents, survivors or beneficiaries of any such employees or former employees) of the Company are entitled to participate in the Employee Plans and no entity other than the Company is a participating employer under any Employee Plan.
(k) The Company has not agreed or committed to institute any plan, program, arrangement or agreement for the benefit of employees or former employees of the Company other than the Employee Plans, or to make any amendments to any of the Employee Plans.
(l) There is no pending or, to the knowledge of the Management Shareholders, threatened assessment, complaint, proceeding, or investigation of any kind in any court or government agency with respect to any Employee Plan (other than routine claims for benefits), nor is there any basis for one.

3.26 Insurance . Section 3.26 of the Disclosure Letter contains a correct and complete list of insurance policies to which the Company is a party, an insured or a beneficiary or under which the Company or any of its officers or directors is covered, setting out, in respect of each policy, the type of policy, the name of insurer, the coverage allowance, the expiration date, the annual premium and any pending claims. The Company is not in default with respect to any of the provisions contained in the insurance policies and has not failed to give any notice or to present any claim under any insurance policy in a due and timely fashion or has provided any information to any insurer in connection with any application for insurance that could result in the cancellation of any insurance policy for the benefit of the Company or a denial of coverage for a risk otherwise covered by any such insurance policy or bond. To the knowledge of the Management Shareholders, there are no circumstances in respect of which any person could make a claim under any insurance policy. The Company has not received any refusal of insurance coverage or any notice that a defense will be afforded with reservation of rights. There has not been any Material Adverse Change in the relationship of the Company with its insurers, the availability of coverage, or in the premiums payable pursuant to the policies. Section 3.26 of the Disclosure Letter contains a list setting forth any and all claims, with

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reasonable particulars, made under any policies of insurance maintained by or for the benefit of the Company over the past 5 years prior to the date hereof. Copies of all of the Company's insurance policies and the most recent inspection reports received from insurance underwriters have been delivered to the Purchaser.

3.27 Litigation . Except as described in Section 3.27 of the Disclosure Letter, there have not been and are no actions, suits, proceedings, grievances, arbitrations, investigations, audits, or other alternative dispute resolution process involving the Company, pending, or, to the knowledge of the Management Shareholders, threatened, against the Company. To the knowledge of the Management Shareholders, there is no valid basis for any action, suit, proceeding, grievance, arbitration, investigation, audit, or other alternative dispute resolution process involving the Company. The Company is not subject to any judgment, order or decree entered in any lawsuit or proceeding nor has the Company settled any claim prior to being prosecuted in respect of it.

3.28 Taxes .

(a) The Company has paid all Taxes which are due and payable within the time required by applicable laws, and has paid all assessments and reassessments it has received in respect of Taxes. The Company has provided full and adequate provision in accordance with GAAP in the Interim Financial Statements for all Taxes for periods to which they relate which are not yet due and payable. Since the date of such financial statements, no material liability in respect of Taxes not reflected in such statements or otherwise provided for has been assessed, proposed to be assessed, incurred or accrued, other than in the ordinary course. The Company has not received any refund of Taxes to which it is not entitled or has any liability for Taxes of another person under the Tax Act, as a transferee or successor, or as a result of any contractual obligation. There are no Encumbrances for Taxes on the Company Securities. There are no Encumbrances on for Taxes on the Assets other than Permitted Encumbrances.
(b) The Company has filed or caused to be filed with the appropriate Governmental Entity, within the times and in the manner prescribed by applicable laws, all Tax Returns which are required to be filed by or with respect to it. The information contained in such Tax Returns is correct and complete and such Tax Returns reflect accurately all liability for Taxes of the Company for the periods covered thereby. The Company will not be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date in accordance with the Tax Act as a result of transactions or events occurring before the Closing Date.
(c) There are no outstanding agreements, arrangements, waivers or objections extending the statutory period or providing for an extension of time with respect to the assessment or reassessment of Taxes or the filing of any Tax Return by, or any payment of Taxes by, the Company.
(d) There are no claims, actions, suits, audits, proceedings, investigations or other actions pending or, to the knowledge of the Management Shareholders, threatened against the Company in respect of Taxes and, to the knowledge of the Management Shareholders, there is no reason to expect that any such claim, action, suit, audit, proceeding, or, to the knowledge of the Management Shareholders, investigation or other action may be asserted against the

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Company by a Governmental Entity. The Company is not negotiating any final or draft assessment or reassessment in respect of Taxes with any Governmental Entity and has not received any indication from any Governmental Entity that an assessment or reassessment is proposed or may be proposed in respect of any Taxes for any Pre-Closing Tax Period or Straddle Period.

(e) The Company has withheld and collected all amounts required by applicable laws to be withheld or collected by it on account of Taxes and has remitted all such amounts to the appropriate Governmental Entity within the time prescribed under any applicable laws.
(f) No claim has ever been made by a Governmental Entity against of the Company in respect of Taxes in a jurisdiction where the Company does not file Tax Returns that the Company is or may be subject to Tax by that jurisdiction.
(g) The terms and conditions made or imposed in respect of every transaction (or series of transactions) between the Company and any person that is (a) a nonresident of Canada for purposes of the Tax Act, and (b) not dealing at arm's length with the Company, as the case may be, for purposes of the Tax Act, do not differ from those that would have been made between persons dealing at arm's length for purposes of the Tax Act, and all documentation or records as required by applicable laws has been made or obtained in respect of such transactions (or series of transactions).
(h) The Company is not party to or bound by any tax sharing agreement, tax indemnity obligation in favour of any person or similar agreement in favour of any person with respect to Taxes (including any advance pricing agreement or other similar agreement relating to Taxes with any Governmental Entity). The Company has not entered into any settlement or arrangement with any Governmental Entity that would be binding on Purchaser or result in a material Tax liability for any taxable period (or portion thereof) ending after the Closing Date.
(i) There are no circumstances existing which could result in the application to the Company of sections 17, 78, 80, 80.01, 80.02, 80.03, 80.04 of the Tax Act or any analogous provision of any comparable laws of any province or territory of Canada.
(j) The Company has not acquired property from a person not dealing at arm's length (for purposes of the Tax Act) with it in circumstances that would result in the Company becoming liable to pay Taxes of such person under subsection 160(1) of the Tax Act or any analogous provision of any comparable Law of any applicable province or territory of Canada.
(k) The Company is not party to any joint venture, partnership or other arrangement or contract that is treated as a partnership for income tax purposes in any jurisdiction.
(l) Immediately prior to the date of this Agreement, the Company was a "Canadiancontrolled private corporation" within the meaning of the Tax Act.

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3.29 Privacy . No person has made a claim, or to the knowledge of the Management Shareholders, threatened to make a claim, regarding failure of the Company to comply with any applicable privacy laws.

3.30 Full Disclosure . This Agreement does not (i) contain any untrue statement of a material fact in respect of the affairs, prospects, operations or condition of the Company, the Assets, the Business or the transactions contemplated herein, or (ii) omit any statement of a material fact necessary in order to make the statements in respect of, the affairs, prospects, operations or condition of the Companies, the Company Securities, the Assets, the Business or the transactions contemplated by the Agreement contained herein or therein not misleading. There is no fact known to the Management Shareholders which materially and adversely affects the affairs, prospects, operations or condition of the Company, the Assets, the Company Securities, the Business or the transactions contemplated herein which has not been set forth in this Agreement.

3.31 No Other Representations or Warranties . Except for the representations and warranties made by the Management Shareholders in this Article 3, Article 4 or elsewhere in this Agreement, the Management Shareholders do not make, and hereby disclaims, any other representations or warranties, whether written or oral, and specifically (but without limiting the generality of the foregoing), the Management Shareholders make no representations or warranties with respect to any projections, estimates or budgets delivered or made available to the Purchaser.

ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE VENDORS

Each Vendor, severally (and not jointly and severally), as to itself only, represents and warrants to the Purchaser as follows and acknowledges that the Purchaser is relying upon these representations and warranties with the sale of the Company Securities.

4.1 Incorporation and Qualification . If a Vendor is a corporation, it is incorporated and existing under the laws of the jurisdiction of its organization and has the corporate power and authority to enter into and perform its obligations under this Agreement and each of the ancillary agreements to which it is a party;

4.2 Corporate Authorization . If a Vendor is a corporation, the execution, delivery of and performance by such Vendor of this Agreement and each of the ancillary agreements to which it is a party and the consummation of the transactions contemplated by it have been duly authorized by all necessary corporation action on the part of such Vendor.

4.3 No Conflict . Except for the filings, notifications and Authorizations described in Section 4.3 of the Disclosure Letter, the execution, delivery and performance by such Vendor of this Agreement and the consummation of the transaction of purchase and sale contemplated by this Agreement and each of the ancillary agreements to which it is a party:

(a) do not and will not (or would not with the giving of notice, the lapse of time or the happening of any other event or condition) constitute or result in a violation or breach of, or conflict with, or allow any other person to exercise any rights under, any of the terms or provisions of such Vendor’s constating documents or by-laws;
(b) do not and will not (or would not with the giving of notice, the lapse of time or the happening or any other event or condition) constitute or result in a breach or

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violation of, or conflict with or allow any other person to exercise any rights under, any of the terms or provisions of any agreements to which such Vendor is a party or pursuant to which any of its assets or property may be affected;

(c) do not and will not result in a breach of, or cause the termination or revocation of, any Authorization held by the Vendor in connection with the ownership of the Company Securities or the operation of the Business; and
(d) do not and will not result in the violation of any law.

4.4 Required Consents . There is no requirement to obtain any consent, approval or waiver of a party under any Lease or any agreement to which the Vendor is a party to any of the transactions contemplated by this Agreement, except for the consents, approvals and waivers described in Section 4.4 of the Disclosure Letter.

4.5 Execution and Binding Obligation . This Agreement and each of the ancillary agreements to which it is a party has been duly executed and delivered by such Vendor, and constitutes a legal, valid and binding obligation of such Vendor enforceable against it in accordance with its terms subject only to any limitation under applicable laws relating to (i) bankruptcy, winding-up, insolvency, arrangement and other laws of general application affecting the enforcement of creditors’ rights, and (ii) the discretion that a court may exercise in the granting of equitable remedies such as specific performance and injunction;

4.6 No Other Agreements to Purchase . Except for the Purchaser’s right under this Agreement, no person has any agreement, option or warrant or any right or privilege (whether by law, pre-emptive or contractual granted by such Vendor) capable of becoming such for the purchase or acquisition from such Vendor of any Company Securities of such Vendor;

4.7 Title to Company Securities . Such Vendor owns that number of the Company Securities set out opposite its name in the Entitlement Schedule. The Vendor owns such Company Securities as the registered and beneficial owner with a good title, free and clear of all Encumbrances. Upon completion of the transaction contemplated by this Agreement, such Vendor will have transferred to the Purchaser good and valid title to such Company Securities, free and clear of all Encumbrances;

4.8 Residence . Except as disclosed in the Entitlement Schedule, such Vendor is not a non-resident of Canada within the meaning of the Tax Act; and

4.9 No Brokers . Neither it nor any of its representatives has incurred any liability or obligation to any broker, agent, investment bank or other intermediary for any fee, commission or other similar payment in connection with the transactions contemplated by this Agreement.

ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF PURCHASER

The Purchaser represents and warrants to the Vendors as follows and acknowledges that the Vendors are relying upon these representations and warranties in connection with the sale of the Company Securities.

For the purposes of this Article 5, " Public Disclosure Documents ” means, collectively, all of the publicly available documents that have been filed by or on behalf of the Purchaser since its incorporation up to and including the date of this Agreement with the relevant Canadian securities regulatory authorities pursuant to the requirements of applicable Canadian securities

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laws, including all press releases, annual information forms, material change reports, financial statements, management’s discussion and analysis, information circulars, filing statements, business acquisition reports and other documents that have been publicly disclosed by the Purchaser and posted on SEDAR, as applicable.

5.1 Corporate Status; Authorization; Enforceability . The Purchaser is a corporation duly incorporated and validly existing under the laws of the Province of British Columbia and has not been discontinued or dissolved under such laws. No steps or proceedings have been taken to authorize or require such discontinuance or dissolution. The Purchaser has the corporate power and capacity to enter into this Agreement and the documents to be delivered hereunder and to consummate the transactions contemplated hereby. The execution, delivery and performance by the Purchaser of this Agreement and the documents to be delivered hereunder and the consummation by the Purchaser of the transactions contemplated hereby have been duly authorized by all requisite corporate action on the part of the Purchaser. This Agreement has been duly executed and delivered by the Purchaser, and (assuming due authorization, execution and delivery by the Vendors and the Company) this Agreement and the documents to be delivered hereunder constitute legal, valid and binding obligations of the Purchaser enforceable against the Purchaser in accordance with their respective terms.

5.2 No Conflicts; Consents . The execution, delivery and performance by the Purchaser of this Agreement and the documents to be delivered hereunder, and the consummation of the transactions contemplated hereby, do not and will not violate or conflict with:

(a) the articles of incorporation, by-laws, or other organizational documents of the Purchaser; or
(b) any judgment, order, decree, statute, law, ordinance, rule or regulation applicable to the Purchaser.
5.3 Capital Structure .
(a) The Purchaser’s authorized capital consists of: (i) an unlimited number of common shares, of which 212,762,500 are issued and outstanding as at the date of this Agreement; (ii) share purchase warrants, of which 200,000 are issued with an exercise price of $0.10 per share and with an expiry date of July 15, 2021, and 412,500 are issued with an exercise price of $0.16 per share and with an expiry date of April 17, 2022 are issued and outstanding as at the date of this Agreement; and (iii) incentive stock options issued under the Purchaser's stock option plan as disclosed in the Public Disclosure Documents.
(b) Other than as disclosed in the Public Disclosure Documents and pursuant to the Company's incentive stock option plan, no Person has any agreement, option, understanding or commitment, or any right or privilege, whether by law, preemptive or contractual, capable of becoming an agreement, option or commitment, including exchangeable securities, convertible securities, warrants or convertible obligations of any nature, for the purchase, subscription, allotment or issue of, or conversion into, any outstanding shares in the capital of the Purchaser.
5.4 Purchaser Shares issued to Vendors.

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(a) The Purchaser Shares issued by the Purchaser to the Vendors will be, at the Closing Date, issued and outstanding as fully paid and non-assessable shares in the capital of the Purchaser.
(b) The Purchaser is a "reporting issuer" (as such term is defined under the Securities Act (British Columbia)) in the provinces of British Columbia, Alberta and Ontario, and is not included in a list of defaulting reporting issuers maintained by the securities regulators in such jurisdictions, and has not filed any material change reports on a confidential basis that are still maintained on a confidential basis. The Purchaser's common shares are listed for trading on the TSX Venture Exchange.
(c) The offering, sale, issuance and delivery of the Purchaser Shares are exempt from prospectus and registration requirements under applicable securities laws. The issuance of such Purchaser Shares will be made in compliance with applicable corporate laws and securities laws.

5.5 Legal Proceedings . There is no action of any nature pending or threatened against or by the Purchaser that challenges or seeks to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement. No event has occurred or circumstances exist that may give rise to, or serve as a basis for, any such action.

ARTICLE 6 COVENANTS

6.1 Conduct of Business Before Closing .
(a) During the period beginning on the date of this Agreement and ending at the time of Closing, the Company will conduct its business diligently and prudently and to refrain from entering into any contract except in the ordinary course of business, as disclosed in the Disclosure Letter or with the prior written consent of the Purchaser, or as necessary to comply with applicable laws.
(b) Except pursuant to any existing Material Contract disclosed to the Purchaser, except as expressly required by this Agreement or as expressly disclosed in the Disclosure Letter, and except with the prior written consent of the Purchaser and notwithstanding any other provision in this Agreement, until the earlier of the Closing and the time that this Agreement is terminated in accordance with its terms, the Company shall not, directly or indirectly, without the express consent of the Purchaser:
- (i) adopt any change to its constating documents;
- (ii) enter into a new line of business, or abandon or discontinue any existing lines of business, except as already planned in the ordinary course;
- (iii) acquire by merger or consolidation with, or by purchase of a substantial portion of the assets or equity securities of, or by any other manner, any business or any person or any division thereof or any material assets;
- (iv) adopt any plan of merger, consolidation, reorganization, liquidation or dissolution, or file a petition in bankruptcy under any laws, or consent to the filing of any bankruptcy petition against it under any laws;

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(v) except as contemplated under Section 6.11, declare or pay any dividends or other distributions, or redeem, purchase or otherwise acquire any of its shares or agree to do so;
(vi) make any capital expenditure which individually or in the aggregate exceeds $100,000 per month;
(vii) create, assume, prepay, incur or guarantee any Indebtedness or endorse the obligations or enter into any agreements to maintain the fiscal condition of any person, except for Indebtedness incurred in the ordinary course with a maturity of not more than one year, or (ii) fail to pay or discharge any Indebtedness due in accordance with its terms;
(viii) commence, settle or compromise any material legal proceeding;
(ix) issue any common shares, options, warrants, convertible securities, oral agreements, understandings or commitments or any rights or privileges (whether by law, pre-emptive or contractual) capable of becoming an agreement, option or commitment, of any character relating to any securities in the capital of the Company;
(x) split, combine, subdivide, reclassify, redeem, purchase or otherwise acquire, directly or indirectly, any of its issued and outstanding shares;
(xi) increase the severance or termination pay, change in control, retention, stay or other similar bonus, or other compensation or benefits of any former or current director, officer, employee or independent contractor of the Company;
(xii) establish, adopt, enter into, amend, terminate, trigger an increase in or accelerate the time of payment, funding or vesting of any compensation or benefits under any Employee Plan (or any plan, policy agreement, arrangement or program that would have constituted an Employee Plan if in effect on the date hereof) or create any new Employee Plan other than as required by law or pursuant to any Employee Plans or agreements in effect on the date hereof;
(xiii) make any change in the key management structure of the Company;
(xiv) negotiate, enter into, amend, modify or terminate any collective bargaining agreement or other agreement with any labor union, labor organization or works council;
(xv) (A) hire, engage or retain the employment or services of any employee or consultant, who will be paid annual cash compensation greater than $100,000, (B) grant to any employee any increase in compensation or benefits in any form, except in the ordinary course; (C) amend or terminate (other than for cause) the employment or services of any employee or consultant; (D) transfer any employee out of the Company; (E) enter into or amend any severance, change of control or termination agreement with any employee, officer or director; (F) increase the benefits payable under any existing severance or termination pay agreements or policies with any employee, officer or director; or (G)

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increase, or announce or promise an increase in, the compensation or benefits of any of its employees, officers, directors, or consultants , except pursuant to the terms of the Employee Plans as in effect on the date hereof;

(xvi) make any material change in its policies with respect to the payment of accounts payable or accrued expenses, or the collection of Accounts Receivable or other receivables, other than as required by law or GAAP;
(xvii) make any material change in its cash management practices or in its financial, tax or accounting methods, principles or practices, except as required by law or GAAP;
(xviii) sell, license, lease, transfer, assign, abandon or otherwise dispose of any of its material assets;
(xix) sell, license, transfer, assign, abandon, dedicate to the public, permit to lapse or otherwise dispose of any Intellectual Property material to the Business, except for non-exclusive licenses granted in the ordinary course;
(xx) make any material change in the manner in which it generally extends discounts or credits to clients inconsistent with the ordinary course;
(xxi) amend, terminate, modify, restate, supplement or waive any material rights under any Material Contract except in the ordinary course in compliance with the terms thereof;
(xxii) enter into or amend any Material Contract;
(xxiii) make, revoke or change any material Tax election, settle or compromise any material claim, notice, audit report or assessment in respect of Taxes; change any annual Tax accounting period; adopt or change any method of Tax accounting; file any amended Tax Return; enter into any Tax allocation agreement, Tax sharing agreement, Tax indemnity agreement or closing agreement relating to any Tax; surrender any right to claim a material Tax refund; or consent to any extension or waiver of the statute of limitations period applicable to any Tax claim or assessment;
(xxiv) enter into any agreement or otherwise make a commitment to do any of the foregoing.

6.2 Actions to Satisfy Closing Conditions . Each of the Vendors, the Company and the Purchaser will take or cause to be taken all actions that are within its power to control, and will make all commercially reasonable efforts to cause other actions to be taken which are not within its power to control, so as to ensure its compliance with, and satisfaction of, all conditions in Article 6 that are for the benefit of the other parties to this Agreement.

6.3 Books and Records

(a) To facilitate the resolution of any claims made against or incurred by the Vendors before the Closing Date, or for any other reasonable purpose, for a period of two years after the Closing Date, the Purchaser will:

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(i) retain the Books and Records (including personnel files) of the Company relating to periods before the Closing in a manner reasonably consistent with the prior practices of the Company; and
(ii) upon reasonable notice, afford representatives of the Vendors reasonable access (including the right to make, at such Vendor's expense, photocopies), during normal business hours, to such Books and Records.
(b) The Purchaser will not be obligated to provide the Vendors with access to any books or records (including personnel files) under this Section 6.3 where such access would violate any law.

6.4 Due Diligence . The Company will provide the Purchaser and its advisors with reasonable access to, and copies of, all financial records, books, corporation records, material contracts, constating documents and other documents which the Purchaser may reasonably request prior to the Closing Date of the transaction in order for the Purchaser to satisfy itself as to all matters relating to the business, assets, operations and liabilities of the Company.

6.5 Payment of Closing Time Indebtedness and Closing Time Transaction Expenses . Prior to the Closing Time, unless otherwise mutually agreed to by the parties, the Company will pay, or cause to be paid, all of the Transaction Expenses and Indebtedness, and will provide written confirmation thereof to the Purchaser, in form satisfactory to the Purchaser acting reasonably.

6.6 Escrow Agreement . At the Closing, each party shall duly execute and deliver to the other, and cause the Escrow Agent to duly execute and deliver to the Purchaser and Vendors, the Escrow Agreement.

6.7 Further Assurances . Following the Closing, each of the parties hereto will execute and deliver such additional documents, instruments, conveyances and assurances and take such further actions as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by this Agreement and the documents to be delivered hereunder.

6.8 Purchaser Covenants . The Purchaser hereby covenants to the Vendors, and acknowledges that each of them is relying on such covenants in connection with the sale of the Company Securities, that the Purchaser (including its successors and assigns, if applicable) will:

(a) duly and validly create, authorize and issue the Purchaser Shares;
(b) have the Purchaser Shares as fully paid and non-assessable common shares in the capital of the Purchaser with attributes corresponding in all material respects to the descriptions set forth in this Agreement;

6.9 Exclusive Dealing . Up to earlier of the Closing or the termination of this Agreement pursuant to Article 8 herein (the " Exclusive Dealing End Time "), the Vendors will not take any action, directly or indirectly, to encourage, initiate or engage in discussions or negotiations with, or provide any information to any person, other than the Purchaser, concerning any purchase, assignment or transfer of any securities (including but not limited to the Company Securities) or material assets of the Company or any merger, sale or substantial assets or similar transaction involving the Company, and will ensure that the Company does not take any such action, and, for the same period, the Vendors will not enter into any agreement,

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arrangement or understanding requiring them to abandon, terminate or fail to consummate the transactions or breach this Agreement.

6.10 Tax Returns . The Purchaser will cause to be prepared and filed on a timely basis all Tax Returns for the Company for any period which ends on or before the Closing Date and for which Tax Returns have not been filed as of the Closing Date. The Purchaser will also cause to be prepared and filed on a timely basis all Tax Returns for the Company for all taxation periods ending after the Closing Date which commenced before the Closing Date (" Straddle Periods ", and collectively with the Tax Returns referred to in the first sentence herein, the " Stub Period Returns "). Vendors’ Representative and the Purchaser will co-operate fully with each other and make available to each other in a timely fashion all data and other information as may reasonably be required for the preparation of all Stub Period Returns and will preserve that data and other information until the expiration of any applicable limitation period for maintaining books and records under any applicable tax law with respect to the Stub Period Returns. The Purchaser will provide to the Company's auditors for its review and approval a copy of the Stub Period Returns.

6.11 Pre-Closing Dividend . Notwithstanding Section 6.1(b)(v), the Purchaser acknowledges that the Company will declare a dividend on shares comprising a portion of the Company Securities prior to Closing (the " Pre-Closing Dividend "). In addition to any other indemnity provided under this Agreement, the Vendors will severally (and not jointly, or jointly and severally), on a pro rata basis in proportion to their respective entitlements pursuant to the Entitlement Schedule, defend, indemnify and hold harmless the Purchaser, its affiliates and their respective shareholders, directors, officers and employees from and against all claims, judgments, damages, liabilities, settlements, losses, costs and expenses, including legal fees, disbursements and charges, arising from or relating to the Pre-Closing Dividend.

6.12 Post-Closing Loan . Concurrent with Closing, BRFT shall enter into, a loan agreement, as lender, with the Company or Purchaser as borrower (the " Post-Closing Loan Agreement "), in a form mutually acceptable to BRFT and the Purchaser, pursuant to which the lender thereunder shall extend to the Company an unsecured and subordinated loan facility of up to $10 million on such other terms and conditions as BRFT and the Purchaser may mutually agree upon.

6.13 Company Options . The Company shall, pursuant to its incentive stock option plan, accelerate the expiry date of all incentive stock options granted by the Company, such that each such incentive stock option shall expire on a date prior to the Closing Date, except to the extent that such incentive stock options are included as a portion of the Company Securities. ARTICLE 7 CLOSING CONDITIONS

7.1 Mutual Conditions Precedent . The parties are not required to complete the purchase and sale of the Company Securities unless each of the following conditions are satisfied on or prior to the Closing Time, which conditions may only be waived, in whole or in part, subject to applicable laws, by the mutual consent of the Vendors' Representative and the Purchaser:

(a) Approvals. The Purchaser shall have received all necessary prior approvals (including, but not limited to, all necessary shareholder approvals or the approvals of the TSX Venture Exchange) with respect to the transactions contemplated hereunder.

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(b) Graduation. The Purchaser shall have received all necessary approvals for the listing of the Purchaser Shares on the TSE, to commence as soon as commercially practiceable following the Closing.
(c) Illegality. No law is in effect that makes the consummation of the transactions contemplated hereunder illegal or otherwise prohibits or enjoins the Purchaser, Vendors or the Company from consummating such transactions.
(d) Offering. The Offering shall have been completed to the Purchaser's satisfaction.

7.2 Conditions for the Benefit of the Purchaser . The obligation of the Purchaser to complete the purchase of the Company Securities will be subject to the fulfilment of the following conditions at or before the time of Closing:

(a) Representations, Warranties and Covenants. The representations and warranties of the Vendors made in this Agreement, and any other agreement or document delivered pursuant to this Agreement, will be true and accurate at the time of Closing with the same force and effect as though those representations and warranties had been made as of the time of Closing. The Vendors and the Company will have also complied with all covenants and agreements to be performed or caused to be performed by each of them under this Agreement, and any other agreement or document delivered pursuant to this Agreement, at or before the time of Closing.
(b) Due Diligence. The Purchaser being satisfied, acting reasonably, with its due diligence review of the Company up until the Closing Date.
(c) Conducting Business in Normal Course. From the date of this Agreement, the Company will conduct its business operations in the Ordinary Course with the absence of any material adverse change in, among other things, the financial condition, operations, assets or affairs of the Company until the Closing Date.
(d) Closing Documentation. The Purchaser will have received from or on behalf of the Vendors and the Company the following closing documentation:
(i) certificates for the Company Securities, duly endorsed in blank for transfer to the Purchaser;
(ii) new share certificates representing the shares comprising a portion of the Company Securities registered in the name of the Purchaser;
(iii) certified copy of resolutions of the directors of the Company authorizing the transfer of the Company Securities, the registration of the shares comprising a portion of the Company Securities in the name of the Purchaser and the issuance of new share certificates representing such shares registered in the name of the Purchaser, and the cancellation of the options comprising the remaining portion of the Company Securities;
(iv) duly executed resignations effective as at the time of Closing of each director and officer of the Company (excluding Jason Bailey and Joshua Nilson) if and as specified by the Purchaser;

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(v) releases from the Vendors of all claims the Vendors may have, jointly or severally, against the Company;
(vi) all books and records of and related to the Company and the business, including copies of any insurance policies;
(vii) the Escrow Agreement, duly signed by the Vendors' Representative on behalf of the Vendors;
(viii) executed copies of the Payoff Letters, together with releases and terminations of Encumbrances provided for therein, in each case fully executed and acknowledged (as applicable) by each of the applicable respective parties thereto and other customary documents necessary to evidence the release of all related Encumbrances;
(ix) all other necessary documentation, including consents (including (creditors’ consents, if any), resolutions (including shareholders’ resolutions, if any), approvals, waivers, including waivers of pre-emptive rights, and authorizations, required to enable the transfer of the Company Securities to the Purchaser as provided for in this Agreement;
(x) the Post-Closing Loan Agreement executed by the lender thereto.

Without derogating from the Purchaser's rights or obligations under this Agreement, it is agreed that the Purchaser will act in good faith to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable law to satisfy, or cause to be satisfied, all of the conditions set forth in this Section 7.1, and to consummate the transactions contemplated under this Agreement as promptly as practicable.

7.3 Waiver of Conditions by the Purchaser . The conditions set forth in Section 7.1 are for the exclusive benefit of the Purchaser and may be waived by the Purchaser in writing in whole or in part on or before the Closing Date.

7.4 Conditions for the Benefit of the Vendors . The obligation of the Vendors to complete the sale of the Company Securities will be subject to the fulfilment of the following conditions at or before the time of Closing: (a) Representations, Warranties and Covenants. The representations and warranties of the Purchaser made in this Agreement, and any other agreement or document delivered pursuant to this Agreement, will be true and accurate at the time of Closing with the same force and effect as though those representations and warranties had been made as of the time of Closing. The Purchaser will have also complied with all covenants and agreements to be performed or caused to be performed by each of them under this Agreement, and any other agreement or document delivered pursuant to this Agreement, at or before the time of Closing.
(b) Board of Directors Nominees. The Purchaser shall have appointed Mike Edwards and Jason Bailey for himself, or his nominee, to its Board of Directors, to serve until the Purchaser's next annual general meeting of its shareholders.

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(c) Management. The Purchaser shall have appointed Jason Bailey as the Chief Revenue Officer of the Purchaser (being LEAF Mobile Inc.), and Joshua Nilson as General Manager of the Company (being EastSide Games Inc.).
(d) Due Diligence. The Vendors being satisfied, acting reasonably, with their due diligence review of the Purchaser up until the Closing Date.
(e) Closing Documentation. The Vendors will have received from or on behalf of the Purchaser the following closing documentation:
(i) payment of the Closing payment described under and in accordance with Section 2.3(b) herein, by way of wire transfer or certified cheque, to the Vendors' Solicitors or as Vendors’ Representative, may direct; and
(ii) evidence in form satisfactory to Vendors’ Representative, acting reasonably, confirming the issuance of the Purchaser Shares in accordance with Section 2.3(d) herein.

7.5 Waiver of Conditions by the Vendors . The conditions set forth in Section 7.3 are for the exclusive benefit of the Vendors and may be waived by Vendors’ Representative, in writing in whole or in part on or before the Closing Date.

ARTICLE 8 TERMINATION

8.1 Termination .

(a) This Agreement may be terminated at any time before the Closing:
(i) by the mutual written consent of the Vendors' Representative and the Purchaser;
(ii) by the Purchaser by written notice to Vendors’ Representative, if:
- (A) the Purchaser is not then in material breach of any provision of this Agreement and there has been a material breach, inaccuracy in or failure to perform any representation, warranty, covenant or agreement made by the Vendor or the Company under this Agreement that would give rise to the failure of any of the conditions specified in Article 7 and such breach, inaccuracy or failure cannot be cured by the Vendors on or before Closing; or
- (B) any of the conditions set forth in Section 7.1 or 7.2 will not have been fulfilled on or before Closing, unless such failure will be due to the failure of the Purchaser to perform or comply with any of the covenants, agreements or conditions hereof to be performed or complied with by it before the Closing;
(iii) by Vendors’ Representative, and the Company by written notice to the Purchaser if:
- (A) none of the Vendors nor the Company are then in material breach of any provision of this Agreement and there has been a material

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breach, inaccuracy in or failure to perform any representation, warranty, covenant or agreement made by the Purchaser under this Agreement that would give rise to the failure of any of the conditions specified in Article 7 and such breach, inaccuracy or failure cannot be cured by the Purchaser on or before Closing; or

  - (B) subject to (iv) below, any of the conditions set forth in Section 7.1 or 7.4 will not have been fulfilled on or before Closing, unless such failure will be due to the failure of a Vendor to perform or comply with any of the covenants, agreements or conditions hereof to be performed or complied with by it before the Closing;

(iv) by the Company or the Purchaser in the event that the Closing has not occurred on or prior to December 31, 2020 (the " Outside Date "; for greater clarity, the term "Outside Date" includes any extensions set forth herein), provided that, if on the initial Outside Date, any of the conditions set forth in Section 7.1 or 7.2(d) are not satisfied but all other conditions to Closing in Section 7.2 or 7.3 are satisfied or waived (other than those conditions that by their nature are to be satisfied at Closing, but subject to those conditions being capable of being satisfied), then the Purchaser may, by providing written notice to the Company prior to 5:00PM Vancouver time on the initial Outside Date, extend the Outside Date to January 31, 2021, in which event the Outside Date shall be deemed for all purposes of this Agreement to be such later date; provided that, in any event, none of the parties may terminate the Agreement pursuant to this Section 8.1(a)(iv) if the failure of the Closing to occur on or before the Outside Date has been caused by, or is a result of, a breach by such party of any of its representations or warranties or the failure of such party to perform any of its covenants or agreements under this Agreement.
(b) In the event of the termination of this Agreement in accordance with this Article 8, this Agreement will forthwith have no further force or effect and there will be no liability on the part of any party hereto except:
(i) as set forth in this Article 8 and Article 12; and
(ii) that nothing herein will relieve any party hereto from liability for any intentional breach of any provision hereof.

ARTICLE 9 INDEMNIFICATION

9.1 Survival . All representations, warranties, covenants and agreements contained herein and all related rights to indemnification will survive the Closing for a period of two years from the Closing Date (the " Release Date "), and the parties will have no obligation or liability for indemnification or otherwise with respect thereto after the Release Date except as expressly provided for in this Agreement, or except with respect to claims relating to the fraudulent action or intentional misrepresentation of any of the parties. Notwithstanding the foregoing, any representation, warranty, covenant or obligation, and any obligation or liability for indemnification or otherwise with respect thereto, that would otherwise terminate on the Release Date will continue to survive if a notice for indemnification has been provided under this Article 9 on or prior to the Release Date, until the related claim for indemnification has been satisfied or

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otherwise resolved as provided for in this Article 9, but such survival shall only be with respect to the matters covered by such notice for indemnification.

9.2 Indemnification by Vendors . Subject to the other terms and conditions of this Article 9, the Vendors will severally (and not jointly, or jointly and severally), on a pro rata basis in proportion to their respective entitlements pursuant to the Entitlement Schedule, defend, indemnify and hold harmless the Purchaser, its affiliates and their respective shareholders, directors, officers and employees from and against all claims, judgments, damages, liabilities, settlements, losses, costs and expenses, including legal fees, disbursements and charges, arising from or relating to any:

(a) Inaccuracy in or breach of any of the representations or warranties of such Vendor contained in this Agreement or in any document to be delivered by such Vendor hereunder;
(b) Breach or non-fullfillment of any covenant, agreement or obligation to be performed by such Vendor under this Agreement or any document to be delivered hereunder;
(c) Any Transaction Expenses not included in the Closing Statement; or
(d) Any Actual Effective Time Indebtedness not included in the Closing Statement.

9.3 Indemnification by the Management Shareholders . Subject to the other terms and conditions of this Article 9, the Management Shareholders will jointly and severally defend, indemnify and hold harmless the Purchaser, its affiliates and their respective shareholders, directors, officers and employees from and against all claims, judgments, damages, liabilities, settlements, losses, costs and expenses, including legal fees, disbursements and charges, arising from or relating to any:

(a) inaccuracy in or breach of any of the representations or warranties of the Management Shareholders contained in this Agreement or in any document to be delivered hereunder; or
(b) breach or non-fulfillment of any covenant, agreement or obligation to be performed by the Management Shareholders or the Company under this Agreement or any document to be delivered hereunder.

9.4 Limitation . Vendors will not be liable for indemnification under Section 9.2 for inaccuracy or breaches of its representations and warranties or breaches or non-fulfillment of any covenant, agreement or obligation to be performed by the Vendor or the Company as set out in this Agreement until the aggregate amount of losses for all such breaches exceeds $50,000 (the " Deductible "), in which event the Management Shareholders will only be required to pay or be liable for losses in excess of the Deductible. The aggregate amount of the Management Shareholders' obligations under Article 9 for any claims made under Section 8.3 will not exceed 100% of that portion of the Purchase Price actually paid to the Management Shareholders (for greater clarity, being comprised of the cash consideration and Purchaser Share consideration paid or issued to the Management Shareholders hereunder). Notwithstanding anything to the contrary contained in this Agreement, the Management Shareholders will not be liable under this Article 9 for any consequential, incidental, indirect, special, punitive or exemplary damages. Notwithstanding the foregoing, this Section 9.2 shall not apply with respect to claims made under Section 9.2 arising from or in relation to the gross

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negligence, fraudulent action or intentional misrepresentation of the Management Shareholders or the Company.

9.5 Indemnification by Purchaser . Subject to the other terms and conditions of this Article 9, the Purchaser will defend, indemnify and hold harmless the Vendors, the Company, its affiliates and shareholders, directors, officers and employees from and against all claims, judgments, damages, liabilities, settlements, losses, costs and expense, including legal fees, disbursements and charges, arising from or relating to any:

(a) inaccuracy in or breach of any of the representations or warranties of the Purchaser contained in this Agreement or in any document to be delivered hereunder; or
(b) breach or non-fulfillment of any covenant, agreement or obligation to be performed by the Purchaser under this Agreement or any document to be delivered hereunder.

9.6 Tax Treatment of Indemnification Payments . All indemnification payments made by the Vendors or the Company under this Agreement will be treated by the parties as an adjustment to the Purchase Price for tax purposes, unless otherwise required by law. ARTICLE 10 TAXES

10.1 Taxes . The Purchase Price shall be adjusted downward for tax, assessment, additional tax, fee, penalty, interest or other governmental charge imposed by any federal, provincial, commonwealth, county, local, foreign, or other governmental entity (collectively " Taxes ") as follows:

(a) The Purchaser shall provide Vendors’ Representative, with a copy of the Company's final Notice of Assessment issued by the Canada Revenue Agency with respect to the Company's fiscal year ended on the Closing Date, within 7 days of the Company's receipt of same.
(b) If such Notice of Assessment shows Taxes payable by the Company with respect to the Company's fiscal year ended on the Closing Date or the Company owes any other Pre-Closing Taxes, then the Purchase Price shall be adjusted downwards for the amount of such Taxes, and the Vendors shall pay to the Purchaser an amount equal to such Taxes or Pre-Closing Taxes payable within 30 days of its receipt of the Notice of Assessment as contemplated in this Section 10.1.

10.2 Straddle Period . For purposes of this Agreement, in the case of any Straddle Period, the amount of Taxes allocable to the Pre-Closing Tax Period portion of the Straddle Period shall be: (a) in the case of Taxes imposed on a periodic basis (such as real or personal property Taxes), the amount of such Taxes for the entire period (or, in the case of such Taxes determined on an arrears basis, the amount of such Taxes for the immediately preceding period) multiplied by a fraction, the numerator of which is the number of calendar days in the Straddle Period up to and including the Closing Date and the denominator of which is the number of calendar days in the entire relevant Straddle Period; and (b) in the case of Taxes not described in (a) (such as Taxes that are based upon or related to income or receipts, or Taxes that are based upon occupancy or imposed in connection with any sale or other transfer or

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assignment of property), the amount of any such Taxes shall be determined as if such taxable period ended at the close of the Closing Date.

ARTICLE 11 ESCROW AGREEMENT

11.1 Escrow Agreement . The Parties acknowledge that the Escrow Agreement provides for the Indemnity Escrow and the Purchase Price Adjustment Escrow.

11.2 Indemnity Escrow . Indemnification claims made by the Purchaser under Article 8 shall be dealt with and paid in accordance with the Escrow Agreement. Any amounts paid to the Purchaser or the Vendors from the Indemnity Escrow in accordance with the foregoing will be disbursed and paid by the Escrow Agent as provided for under the Escrow Agreement and pursuant to the Entitlement Schedule.

11.3 Purchase Price Adjustment Escrow . The Escrow Agent will pay the Purchase Price Adjustment Escrow Amount to the Purchaser and/or the Vendors with Section 2.8 herein and as provided for by the Escrow Agreement and pursuant to the Entitlement Schedule.

ARTICLE 12 MISCELLANEOUS

12.1 Expenses . All costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby will be paid by the party incurring such costs and expenses.

12.2 Notices .

(a) All notices, requests, consents, claims, demands, waivers and other communications hereunder will be in writing and will be deemed to have been given on the date sent by email of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next business day if sent after normal business hours of the recipient.
(b) Such communications must be sent to the respective parties at the following email addresses (or at such other email address for a party as will be specified in a notice given in accordance with this Section 12.2):

If to the Vendors or the Company: c/o Jason Bailey Email: [email protected]

If to the Purchaser: Leaf Mobile Inc. Email: [email protected]

12.3 Headings . The headings in this Agreement are for reference only and will not affect the interpretation of this Agreement.

12.4 Severability . If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction.

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12.5 Entire Agreement . This Agreement and documents to be delivered hereunder constitute the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained herein and supersede all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter. In the event of any inconsistency between the statements in the body of this Agreement and the documents to be delivered hereunder, the Schedules or the Disclosure Letter (other than an exception expressly set forth as such in the Schedules or Disclosure Letter), the statements in the body of this Agreement will control.

12.6 Successors and Assigns . This Agreement will be binding upon and will enure to the benefit of the parties hereto and their respective successors and permitted assigns. Neither party may assign its rights or obligations hereunder without the prior written consent of the other party, which consent will not be unreasonably withheld or delayed. No assignment will relieve the assigning party of any of its obligations hereunder.

12.7 No Third Party Beneficiaries . This Agreement is for the sole benefit of the parties hereto and their respective successors and permitted assigns, and nothing herein, express or implied, is intended to or will confer upon any other person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

12.8 Amendment and Modification; Waiver . This Agreement may only be amended, modified or supplemented by an agreement in writing signed by each party hereto. No waiver by any party of any of the provisions hereof will be effective unless explicitly set forth in writing and signed by the party so waiving. No waiver by any party will operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any right, remedy, power or privilege arising from this Agreement will operate or be construed as a waiver thereof; nor will any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

12.9 Governing Law . This Agreement will be governed by and construed in accordance with the laws of the Province of British Columbia and the federal laws of Canada applicable therein.

12.10 Forum Selection . Any action or proceeding arising out of or based upon this Agreement or the transactions contemplated hereby may be brought in the courts of the Province of British Columbia, and each party irrevocably submits and agrees to attorn to the non-exclusive jurisdiction of such courts in any such action or proceeding.

12.11 Counterparts . This Agreement may be executed in counterparts, each of which will be deemed an original, but all of which together will be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, email or other means of electronic transmission will be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

IN WITNESS WHEREOF, the parties hereto, each acting under due and proper authority and intending to be legally bound, have executed this Agreement as of the date first written above.

Execution page follows.

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LEAF MOBILE INC.

Per: (signed) "Darcy Taylor"

Authorized Signatory

EASTSIDE GAMES INC.

Per: (signed) "Jason Bailey"

Authorized Signatory

(signed) "Jason Bailey"

JASON BAILEY , as trustee of the Bailey Ransen Family Trust No. 1

(signed) "Chaya Ransen"

CHAYA RANSEN , as trustee of the Bailey Ransen Family Trust No. 1

(signed) "Galan Akin"

GALAN AKIN

(signed) "Joshua Nilson"

JOSHUA NILSON

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APPENDIX F

ESG FINANCIAL INFORMATION

See attached -

9537694.1

EASTSIDE GAMES INC.

Consolidated Financial Statements

(Presented in Canadian dollars) For the Years Ended December 31, 2019, 2018 and 2017

EASTSIDE GAMES INC. Index to Consolidated Financial Statements

(Presented in Canadian dollars)

For the Years Ended December 31, 2019, 2018 and 2017

	Page
INDEPENDENT AUDITOR'S REPORT	1 - 2
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Statement of Financial Position	3 - 4
Consolidated Statement of Income and Comprehensive Income	5 - 6
Consolidated Statement of Changes in Equity	7
Consolidated Statement of Cash Flows	8
Notes to Consolidated Financial Statements	9 - 39
Discontinued Operations_(Schedule 1)_	40
Assets and Liabilities of Disposal Group Classified as Held for Sale_(Schedule 2)_	41
Cash Flows of Disposal Group Classified as Held for Sale_(Schedule 3)_	42

==> picture [125 x 81] intentionally omitted <==

Vohora LLP

Suite 1010 – 777 Hornby Street Vancouver, BC V6Z 1S4

Phone: (604) 251-1535 Fax: (604) 541-9845 Toll Free Phone: (800) 281-5214 Toll Free Fax: (866) 691-6929 Email: [email protected] www.vohora.ca

CPAs & Business Advisors

INDEPENDENT AUDITOR'S REPORT

To the Shareholders of Eastside Games Inc.

Opinion

We have audited the consolidated financial statements of Eastside Games Inc. (the company), which comprise the consolidated balance sheet as at December 31, 2019, 2018, 2017 and January 1, 2017, and the consolidated statements of income and comprehensive income, changes in equity and cash flows for the years ended December 31, 2019, 2018 and 2017, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the company as at December 31, 2019, 2018, 2017 and January 1, 2017, and the consolidated financial performance and consolidated cash flows for the years ended December 31, 2019, 2018 and 2017 in accordance with International Financial Reporting Standards (IFRS).

Basis for Opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the company in accordance with ethical requirements that are relevant to our audit of the consolidated financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matter - First Time Adoption of IFRS and Restatement of Audit Report

We draw attention to Note 5 to the consolidated financial statements which describes that Eastside Games Inc. adopted IFRS on January 1, 2019 with a transition date of January 1, 2017. These standards were applied retrospectively by management to the comparative information in these financial statements, including the statements of financial position as at December 31, 2018, 2017 and January 1, 2017, and the consolidated statements of income, changes in equity and cash flows for the year ended December 31, 2018 and 2017 and related disclosures. These consolidated financial statements have been restated under IFRS and replace the consolidated financial statements previously issued on June 18, 2020.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the company's financial reporting process.

(continues)

PASSIONINTEGRITYEXCELLENCE

Offices located in Vancouver, South Surrey, Mission and Prince Rupert, BC

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Vohora LLP CPAs & Business Advisors

Independent Auditor's Report to the Shareholders of Eastside Games Inc. (continued)

Auditor's Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

l Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
l Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control.
l Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
l Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern.
l Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Vancouver, BC October 31, 2020

Vohora LLP

Chartered Professional Accountants

EASTSIDE GAMES INC.

Consolidated Statement of Financial Position

(Presented in Canadian dollars)

As at December 31, 2019, 2018, 2017 and January 1, 2017

	*December 31* December 31 December 31 January 1 2019 2018 2017 2017
ASSETS CURRENT Cash Marketable securities Trade and other receivables_(Note 10) Prepaid expenses and deposits(Note 11) Due from related party(Note 19) PROPERTY AND EQUIPMENT(Note 12) RIGHT-OF-USE ASSETS(Note 16) LONG TERM INVESTMENTS(Note 13) DEFERRED INCOME TAXES(Note 8) DEFERRED CHARGES(Note 11) ASSETS CLASSIFIED AS HELD FOR SALE - SCHEDULE 2(Note 9)_	$ 2,030,226 $ 1,865,509 $ 891,104 $ 4,779,660 3,487,773 3,422,729 6,526,626 - 4,101,971 2,456,116 2,749,912 954,701 2,141,375 861,814 337,980 166,536 1,781,135 386,279 259,203 827,671
	13,542,480 8,992,447 10,764,825 6,728,568 400,576 441,804 191,698 124,498 423,181 - - - 390,805 455,388 500,000 533,355 114,532 197,471 150,501 176,917 1,606,777 - - - 2,025,275 708,493 453,270 1,008,263
	$ 18,503,626 $ 10,795,603 $ 12,060,294 $ 8,571,601

See notes to consolidated financial statements

EASTSIDE GAMES INC.

Consolidated Statement of Financial Position

(Presented in Canadian dollars)

As at December 31, 2019, 2018, 2017 and January 1, 2017

		*December 31*		December 31		December 31		January 1
		2019		2018		2017		2017
LIABILITIES AND SHAREHOLDERS'		EQUITY
CURRENT
Trade and other
payables_(Note 15)_	$	3,226,174	$	2,060,102	$	2,034,201	$	737,111
Deposits received_(Note 9)_		1,250,000		-		-		-
Deferred revenue		-		-		14,325		226,542
Current portion of lease
obligation_(Note 16)_		149,230		-		-		-
		4,625,404		2,060,102		2,048,526		963,653
LEASE OBLIGATION_(Note 16)_		305,591		-		-		-
LIABILITIES DIRECTLY
ASSOCIATED WITH ASSETS
CLASSIFIED AS HELD FOR
SALE - SCHEDULE 2_(Note 9)_		1,848,676		389,315		343,460		899,247
		6,779,671		2,449,417		2,391,986		1,862,900
SHAREHOLDERS' EQUITY
Share capital_(Note 17)_		375,666		363,041		1,505,531		1,406,551
Contributed surplus		1,195,419		770,543		506,241		353,792
Retained earnings		10,152,870		7,212,602		7,656,536		4,948,358
		11,723,955		8,346,186		9,668,308		6,708,701
	$	18,503,626	$	10,795,603	$	12,060,294	$	8,571,601

NATURE AND CONTINUANCE OF OPERATIONS (Note 1) EVENTS OCCURRING AFTER THE REPORTING PERIOD (Note 21)

These consolidated financial statements were approved and authorized for issue by the Board of Directors on October 31, 2020 and signed on its behalf by:

"Jason Bailey" ____ Director_ ____ "Chaya Ransen" Director_

See notes to consolidated financial statements

EASTSIDE GAMES INC.

Consolidated Statement of Income and Comprehensive Income

(Presented in Canadian dollars)

For the Years Ended December 31, 2019, 2018 and 2017

	2019 2018 2017
CONTINUING OPERATIONS REVENUE Gaming_(Note 19) Advertising COST OF SALES GROSS PROFIT EXPENSES Administrative expenses, net of government assistance(Notes 6, 19) Amortization of property and equipement and right- of-use assets Other operating expenses Selling and distribution expenses INCOME FROM OPERATIONS OTHER INCOME (LOSS) Unrealized gain (loss) on marketable securities Gain (loss) on foreign exchange Investment income Gain on disposal of property and equipment INCOME BEFORE INCOME TAXES INCOME TAXES Current(Note 7) Deferred(Note 8)_ INCOME FROM CONTINUING OPERATIONS	$ 27,840,274 $ 21,262,288 $ 21,833,365 5,800,586 4,474,054 3,930,494
	33,640,860 25,736,342 25,763,859 12,405,225 11,366,300 9,089,629
	21,235,635 14,370,042 16,674,230
	8,441,666 7,703,983 5,196,686 285,588 99,076 54,264 1,651,293 1,610,625 1,404,456 7,410,292 2,543,793 5,194,444
	17,788,839 11,957,477 11,849,850
	3,446,796 2,412,565 4,824,380
	587,124 (412,701) (25,536) (202,620) (3,710) (140,842) 2,290 104,464 196,034 800 - -
	387,594 (311,947) 29,656
	3,834,390 2,100,618 4,854,036
	858,357 591,478 1,120,236 82,939 (46,970) 26,415
	941,296 544,508 1,146,651
	2,893,094 1,556,110 3,707,385

(continues)

See notes to consolidated financial statements

EASTSIDE GAMES INC.

Consolidated Statement of Income and Comprehensive Income (continued)

(Presented in Canadian dollars)

For the Years Ended December 31, 2019, 2018 and 2017

	2019 2018 2017
DISCONTINUED OPERATION Income (loss) from discontinued operation - Schedule 1_(Note 9)_ NET AND COMPREHENSIVE INCOME FOR THE YEAR BASIC EARNINGS PER SHARE DILUTED EARNINGS PER SHARE WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING	66,832 (43) 793
	$ 2,959,926 $ 1,556,067 $ 3,708,178
	$ 0.68 $ 0.36 $ 0.87
	$ 0.57 $ 0.32 $ 0.79
	4,366,338 4,331,617 4,254,147

See notes to consolidated financial statements

EASTSIDE GAMES INC.

Consolidated Statements of Changes in Equity

(Presented in Canadian dollars)

For the Years Ended December 31, 2019, 2018 and 2017

	Number of shares Share capital Contributed Surplus Retained earnings Total equity
As at January 1, 2017 Share issuance - Class A common shares Stock based compensation Comprehensive income for the year Dividends paid ($0.23 per share) As at December 31, 2017 Share issuance - Class A common shares Share redemption - Class B preferred share Stock based compensation Comprehensive income for the year Dividends paid ($0.46 per share) As at December 31, 2018 Share issuance - Class A common shares Stock based compensation Comprehensive income for the year Refundable income taxes paid As at December 31, 2019	4,205,148 1,406,551 $ 353,792 $ 4,948,358 $ 6,708,701 $ 98,000 98,980 - - 98,980 - - 152,449.00 - 152,449 - - - 3,708,178 3,708,178 - - - (1,000,000) (1,000,000)
	4,303,148 1,505,531 $ 506,241 $ 7,656,536 $ 9,668,308 $ 56,941 57,510 - - 57,510 (1) (1,200,000) - - (1,200,000) - - 264,302.00 - 264,302 - - - 1,556,067 1,556,067 - - - (2,000,000) (2,000,000)
	4,360,088 363,041 $ 770,543 $ 7,212,603 $ 8,346,187 $ 12,500 12,625 - - 12,625 - - 424,876.00 - 424,876 - - - 2,959,926 2,959,926 - - - (19,659) (19,659)
	4,372,588 375,666 $ 1,195,419 $ 10,152,870 $ 11,723,955 $

See notes to consolidated financial statements

EASTSIDE GAMES INC.

Consolidated Statement of Cash Flows

(Presented in Canadian dollars)

For the Years Ended December 31, 2019, 2018 and 2017

	2019 2018 2017
OPERATING ACTIVITIES Net income for the year Items not affecting cash: Amortization of property and equipment and right-of-use assets Unrealized gain (loss) on marketable securities Deferred income taxes Stock-based compensation Changes in non-cash working capital: Trade and other receivables Trade and other payables Deferred revenue Prepaid expenses and deposits Deposits received Deferred charges Cash flow from operating activities INVESTING ACTIVITIES Purchase of property and equipment Proceeds from sale (purchase) of marketable securities Proceeds from disposal of long term investments Net assets classified as held for sale Cash flow from (used by) investing activities FINANCING ACTIVITIES Dividends paid Refundable income taxes paid Advances from (to) related parties Proceeds on issuance of share capital Reacquisition of share capital Repayment of lease obligation Cash flow used by financing activities INCREASE (DECREASE) IN CASH Cash - beginning of year CASH - END OF YEAR	$ 2,959,926 $ 1,556,067 $ 3,708,178 285,588 99,076 54,264 (587,124) 412,701 25,536 82,939 (46,970) 26,415 424,876 264,302 152,449 (1,645,855) 293,796 (1,795,211) 1,166,075 25,899 1,297,090 - (14,325) (212,217) (1,279,561) (523,834) (171,444) 1,250,000 - - (1,606,777) - -
	1,050,087 2,066,712 3,085,060
	(85,667) (349,183) (121,464) 522,078 2,691,198 (6,552,161) 64,583 44,612 33,355 142,579 (209,368) (794)
	643,573 2,177,259 (6,641,064)
	- (2,000,000) (1,000,000) (19,659) - - (1,394,856) (127,076) 568,468 12,625 57,510 98,980 - (1,200,000) - (127,053) - -
	(1,528,943) (3,269,566) (332,552)
	164,717 974,405 (3,888,556) 1,865,509 891,104 4,779,660
	$ 2,030,226 $ 1,865,509 $ 891,104

See notes to consolidated financial statements

EASTSIDE GAMES INC. Notes to Consolidated Financial Statements

(Presented in Canadian dollars)

For the Years Ended December 31, 2019, 2018 and 2017

1. NATURE AND CONTINUANCE OF OPERATIONS

Eastside Games Inc. (the "company") was incorporated provincially under the Business Corporations Act of British Columbia on June 14, 2011. The company's principal business activity is the development, sales and marketing of online games. The headoffice of the company is located in #550- 555 W 12th Avenue Vancouver, British Columbia.

These consolidated financial statements have been prepared on a going-concern basis, which assumes that the company will be able to realize its assets and discharge its liabilities in the normal course of operations as they come due. The company's ability to continue as a going concern is dependent upon its ability to generate profits and positive cash flows from operations from the launch of its online games under development, to obtain additional funding from financing arrangements, if and when needed by the company and the continued support by its related parties.

These consolidated financial statements do not reflect the adjustments to the carrying values of assets and liabilities and the reported expenses and statement of financial position classifications that would be necessary were the going concern assumption determined to be inappropriate and these adjustments could be material.

EASTSIDE GAMES INC. Notes to Consolidated Financial Statements

(Presented in Canadian dollars)

For the Years Ended December 31, 2019, 2018 and 2017

2. BASIS OF PRESENTATION

Statement of compliance

The consolidated financial statements were prepared in accordance with International Financial Reporting Standards ("IFRS'') as issued by the International Accounting Standards Board ("IASB") and interpretations of the International Financial Reporting Interpretations Committee ("IFRIC"). These are the company's first consolidated financial statements prepared in accordance with IFRS and IFRS 1 First-time Adoption of International Financial Reporting Standards has been applied.

An explanation of the effect of the transition to IFRS to the reported financial position, financial performance and cash flows of the company is provided in Note 5.

Basis of measurement

The consolidated financial statements have been prepared on an accrual basis and are based on historical costs, except for certain financial instruments that are measured at fair value. The consolidated financial statements are presented in Canadian dollars unless otherwise noted.

Basis of consolidation

The consolidated financial statements include the accounts of the company and its wholly-owned subsidiaries, LDRLY (Technologies) Inc. and Keh Kaw Games Inc., companies incorporated in British Columbia. Subsidiaries are all entities over which the company is able, directly or indirectly, to control financial operating policies, which is the authority usually connected with holding majority voting rights. The results of operations of the subsidiaries are included in the consolidated financial statements from the respective dates of acquisition or incorporation. The subsidiaries are de-consolidated from the date that the control by the Company ceases. All intercompany balances and transactions have been eliminated.

Significant judgements and estimates

The preparation of consolidated financial statements in conformity with IFRS requires management to make estimates, assumptions and judgments that affect the application of policies and reported amounts of assets and liabilities and disclosures of assets and liabilities at the date of the consolidated financial statements, along with reported amounts of expenses and net losses during the period. Actual results may differ from these estimates, and as such, estimates and underlying assumptions are reviewed on an ongoing basis. Revisions are recognized in the period in which the estimates are revised and in any future periods affected. Significant assumptions about the future and other sources of estimation uncertainty that management has made at the balance sheet reporting date that could result in a material adjustment to the carrying value of assets and liabilities, in the event that actual results differ from assumptions made, relate to, but are not limited to, the following:

Judgments:

a) Financial assets and liabilities are designated upon inception to various classifications. The designation determines the method by which the financial instruments are carried on the balance sheet subsequent to inception and how changes in value are recorded. The designation may require the company to make certain judgemental, taking into account management's intention of the use of the financial instruments.

(continues)

EASTSIDE GAMES INC. Notes to Consolidated Financial Statements

(Presented in Canadian dollars)

For the Years Ended December 31, 2019, 2018 and 2017

2. BASIS OF PRESENTATION (continued)

b) The assessment of the probability of future taxable income in which deferred tax assets can be utilized is based on the company's estimate of future profits or losses adjusted for significant non-taxable income and expenses and specific limits to the use of any unused tax loss or credit. If a positive forecast of taxable income indicates the probable use of a deferred tax asset, especially when it can be utilized without a time limit, that deferred tax asset is usually recognized in full. The recognition of deferred tax assets that are subject to certain legal or economic limits or uncertainties is assessed individually by management based on the specific facts and circumstances.
c) Evaluation of whether costs incurred by the company in developing its products meet the criteria for capitalization as intangible assets requires judgemental in determining whether it is likely that the future economic benefits will flow to the company, which are based on assumptions about future events or circumstances. Estimates and assumptions may change if new information becomes available. If, after expenditures are capitalized, information becomes available suggesting that the recovery of expenditures is unlikely, the amount capitalized in excess of the recoverable value is written off to profit or loss in the period the new information becomes available.
d) Management is required to assess impairment in respect of equipment. The triggering events are defined in IAS 36. Management has determined that there were no triggering events present as at December 31, 2019, 2018, 2017 and January 1, 2017, as defined in IAS 36, equipment and, as such, no impairment test was performed.
e) Management applies judgmental when determining if a good or service that is promised to a customer is distinct based on whether the customer can benefit from the good or service on its own or together with other readily available resources and whether the good or service is separately identifiable. Based on these criteria, the company determined the primary performance obligation relating to its sales contracts is purchase of the virtual items by customers and serving of the advertisement to the customers.
f) Management uses judgemental when determining amounts receivable for various refundable and nonrefundable tax credits earned from the federal and provincial governments and in assessing the eligibility of research and development and other expenses which give rise to these credits. Government assistance may be overstated if the underlying project is determined to be ineligible or if certain costs claimed are determined to be ineligible.

Estimates:

a) The estimated useful lives and residual value of equipment which are included in the statement of financial position and the related amortization included in the statement of comprehensive income.
b) Provisions for income taxes are made using the best estimate of the amount expected to be paid based on a qualitative assessment of all relevant factors. The company reviews the adequacy of these provisions at the end of the reporting period. However, it is possible that at some future date an additional liability could result from audits by taxing authorities. Where the final outcome of these taxrelated matters is different from the amounts that were originally recorded, such differences will affect the tax provisions in the period in which such determination is made.

(continues)

EASTSIDE GAMES INC. Notes to Consolidated Financial Statements

(Presented in Canadian dollars)

For the Years Ended December 31, 2019, 2018 and 2017

2. BASIS OF PRESENTATION (continued)

c) Determining the fair value of stock options requires estimates related to the choice of a pricing model, the estimation of stock price volatility, the expected forfeiture rate and the expected term of the underlying instruments. Any changes in the estimates or inputs utilized to determine fair value could have a significant impact on the company’s future operating results or on other components of shareholders’ equity.
d) The company estimates the average playing period between 13 to 15 months based on player data in which a survivability analysis is performed. This is to determine the estimated average playing period of paying users for durable virtual item revenues to be recognized over this period..

EASTSIDE GAMES INC. Notes to Consolidated Financial Statements (Presented in Canadian dollars) For the Years Ended December 31, 2019, 2018 and 2017

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Revenue recognition

Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties. The company recognizes revenue when it transfers control over a product or service to a customer. The following steps are considered when recognising revenue:

Identify the contract with customers;
Identify the performance obligation in the contract;
Determine the transaction price;
Allocate the transaction price to performance obligation; and
Recognize revenue when/as performance obligation(s) are satisfied.

In-app purchases

Users can download the company's free-to-play games within the Digital Storefronts and pay to acquire virtual currency, which can be redeemed in the game for virtual goods, or virtual goods directly (together, defined as "virtual items") to enhance their game-playing experience. The company sells consumable virtual items and receives reports from the Digital Storefronts, which breakdown the various purchases made from the company's games over a given time period. Consumable virtual items are items that are consumed at a predetermined time or otherwise have limitations on repeated use.

Revenue from interactive software games on mobile apps is recognized when the performance obligations are satisfied, which is the purchase of games or any in-application purchases ("in-app purchases") made by a customer. Purchases are made through Digital Storefronts pursuant to licences agreements.

The initial download of the games from the Digital Storefront does not create a contract because of the lack of commercial substance; however, the separate election by the player to make an in-application purchase satisfies the criterion thus creating a contract. The company has identified the following performance obligations in these contracts:

Ongoing game related services such as hosting of game play, storage of customer content, when and if available content updates, maintaining the virtual currency management engine, tracking gameplay statistics, matchmaking as it relates to multiple player gameplay, etc.
Obligation to the paying player to continue displaying and providing access to the virtual items within the game.

(continues)

EASTSIDE GAMES INC. Notes to Consolidated Financial Statements

(Presented in Canadian dollars)

For the Years Ended December 31, 2019, 2018 and 2017

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Neither of these obligations are considered distinct since the actual mobile game and the related ongoing services are both required to purchase and benefit from the related virtual items. As such, the company's performance obligations represent a single combined performance obligation which is to make the game and the ongoing game related services available to the players. The transaction price, which is the amount paid for the virtual items by the player, is allocated entirely to the single combined performance obligation. The company recognizes revenue from virtual items over the estimated average playing period of paying users on a per title basis.

Advertising services

The company has relationships with certain advertising service providers for advertisements within its games. Revenue from these advertising service providers is generated through impressions, clickthroughs, offers and banner ads. Offers are the type of advertisements where the players are rewarded with virtual currency for completing specified actions, such as downloading another application, watching a short video, subscribing to a service or completing a survey.

The company has determined the advertising buyer to be its customer and displaying the advertisements within the games is identified as the single performance obligation. Revenue associated with advertising are recognized at the point-in-time the advertisements are displayed in the game or the offer has been completed by the users as the customer simultaneously receives and consumes the benefits provided from these services.

Principal Agent Considerations

The company evaluated its Digital Storefront and advertising service provider agreements under IFRS 15 in order to determine if it is acting as the principal or as an agent when selling virtual items or advertisements within its games. The company primarily uses Digital Storefronts for distributing its games and for enabling players to purchase virtual items and advertising service providers to serve advertisements within its games. The company evaluated the following factors to assess whether it controls each specified good or service before that good or service is transferred to the customer:

l the party responsible for the fulfillment of the virtual items, game related services, or serving of advertisements;
the party having the discretion to set pricing with the end-users; and
the party having inventory risk before the specified good or service have been transferred to a customer.

Based on the evaluation of the above indicators, the company determined that it has control of the services before they are transferred to the end-user. Thus, the company is generally acting as a principal and is the primary obligor to end-users for games distributed through Digital Storefronts and advertisements served through its advertising service providers. Therefore, the company recognizes revenue related to these arrangements on a gross basis, when the necessary information about the gross amounts or Digital Storefront fees charged, before any adjustments, are made available by the Digital Storefronts and advertising service providers. The fees retained by the Digital Storefronts are presented as part of cost of sales. In situations where the price paid by the end-user of the advertising service provider is not known, the company accounts for these transactions on a net basis.

(continues)

EASTSIDE GAMES INC. Notes to Consolidated Financial Statements

(Presented in Canadian dollars)

For the Years Ended December 31, 2019, 2018 and 2017

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Cash and cash equivalents

Cash includes cash and cash equivalents. Cash equivalents are considered to be any term deposit or marketable securities with a maturity of three months or less that the company may hold.

Property and equipment

Property and equipment is stated at cost less accumulated amortization and accumulated impairment losses. It is amortized over its estimated useful life at the following rates and methods:

Computer equipment 30% declining balance method Furniture and fixtures 20% declining balance method Leasehold improvements 3 years straight-line method

The company regularly reviews its property and equipment to eliminate obsolete items.

Property and equipment acquired during the year but not placed into use are not amortized until they are placed into use.

Leases

The company recognizes a right-of-use asset and a lease liability for its leases. The right-of-use asset is measured at cost and depreciated over its estimated useful life. At the commencement date, the lease liability is measured at the present value of the lease payments that are not paid at that date. The lease payments are discounted using the interest rate implicit in the lease or if that rate cannot be readily determined, the company’s incremental borrowing rate. If the lease terms are subsequently changed, the present value of the lease liability is re-measured using the revised lease terms and applying the appropriate discount rate to the remaining lease payments. The company recognizes the amount of the remeasurement of the lease liability as an adjustment to the right-of-use asset. However, if the carrying amount of the right-of-use asset is reduced to zero and there is a further reduction in the measurement of the lease liability, the company recognizes any remaining amount of the re-measurement in profit or loss. The company has elected not to recognize right-ofuse assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low-value assets.

(continues)

EASTSIDE GAMES INC. Notes to Consolidated Financial Statements

(Presented in Canadian dollars)

For the Years Ended December 31, 2019, 2018 and 2017

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Research and development

The company incurs costs related to research, design and development of products. Such costs incurred in conjunction with product development for software to be sold, leased or otherwise marketed are charged to expense until technological feasibility is established. When technical feasibility is established, software development costs are capitalized and carried at cost less accumulated amortization and any accumulated impairment losses. The capitalized asset is amortized on a straight-line basis over its useful life.

The company has adopted the "tested working model" approach to establishing technological feasibility for its games. Under this approach, the company does not consider a game in development to have passed the technological feasibility milestone until the company has completed a model of the game that contains essentially all the functionality and features of the final game and has tested the model to ensure that it works as expected.

To date, the company has not incurred significant costs between the establishment of technological feasibility and the release of a game for sale; thus, the company has expensed all software development costs as incurred.

Marketable securities

Marketable securities consist of a portfolio of investments comprised of common shares in publicly-traded companies and their fair values are determined by reference to the prices quoted in an active market.

Long term investments

Long term investments consist of investments over which the company exercises significant influence but not control and have been recorded under the equity method.

(continues)

EASTSIDE GAMES INC. Notes to Consolidated Financial Statements (Presented in Canadian dollars)

For the Years Ended December 31, 2019, 2018 and 2017

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Impairment of Long Lived Assets

The company's assets are assessed for impairment at each financial position date. If indication of impairment exists, the asset's recoverable amount is estimated.

An impairment loss is recognized when the carrying amount of an asset, or its cash-generating unit, exceeds its recoverable amount. A cash-generating unit is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or group of assets. Impairment losses are recognized in the statement of comprehensive income (loss) when incurred. Impairment losses recognized in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to cash-generating units and then to reduce the carrying amount of the other assets in the unit on a pro-rata basis.

The recoverable amount is the greater of the asset's fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of time value of money and the risks specific to the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cashgenerating unit to which the asset belongs.

An impairment loss is reversed if there is an indication that there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized. An impairment loss with respect to goodwill is never reversed.

Trade and other payables

Payables are obligations to pay for services that have been acquired in the ordinary course of business from suppliers and contractors. Payables are classified as current liabilities if payments are due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.

Share capital

Common shares issued by the company are classified as equity. Costs directly attributable to the issuance of common shares are recognized as a deduction from equity, net of any related income tax effects.

Preferred shares

The company's non-redeemable preferred shares are classified as equity, because they bear discretionary dividends, do not contain any obligations to deliver cash or other financial assets and do not require settlement in a variable number of the company's equity instruments. Discretionary dividends thereon are recognized as equity distributions on approval by the company's shareholders.

(continues)

EASTSIDE GAMES INC. Notes to Consolidated Financial Statements

(Presented in Canadian dollars)

For the Years Ended December 31, 2019, 2018 and 2017

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Earnings per share

Basic earnings per share is determined by dividing the income available to common shareholders by the weighted average number of common shares outstanding during the reporting period. The computation of diluted earnings per share assumes the conversion, exercise or contingent issuance of securities only when such conversion, exercise or issuance would have a dilute effect on earnings.

Stock based compensation

The company grants stock options to its employees and management under its stock option plan.

All goods and services received in exchange for the grant of any stock-based compensation are measured at their fair values. Where employees are rewarded using stock-based compensation, the fair values of employees’ services are determined indirectly by reference to the fair value of the equity instruments granted. The fair value is measured at the grant date, using the Black-Scholes Option Pricing Model, and exclude the impact of non-market vesting conditions (for example profitability and sales growth targets and performance conditions).

All stock-based compensation is recognized as an expense in profit or loss with a corresponding credit to the contributed surplus, over the period during which the related stock-based compensation vests. No amount is recognized for instruments which do not ultimately vest.

Consideration received on the exercise of share purchase options is recorded as share capital and the related amount originally recorded in options reserve is transferred to share capital.

(continues)

EASTSIDE GAMES INC. Notes to Consolidated Financial Statements

(Presented in Canadian dollars)

For the Years Ended December 31, 2019, 2018 and 2017

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Current and deferred income taxes

Income tax expense comprises current and deferred tax. Income tax is recognized in the statement of comprehensive income, except to the extent that it relates to items recognized in other comprehensive income or directly in equity. In this case the income tax is also recognized in other comprehensive income or directly in equity, respectively.

Current Income Tax

The current income tax charge is calculated on the basis of the tax laws enacted or substantially enacted at the statement of financial position date in the country where the company operates and generates taxable income. Management periodically evaluates position taken in the tax return with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred Income Tax

Deferred income tax is recognized, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the statement of financial position date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.

Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized.

Government assistance

Amounts receivable resulting from government assistance programs, including investment tax credits under the Scientific Research and Experimental Development (SR&ED) and Interactive Digital Media Tax Credit (IDMTC) programs are recognized where there is reasonable assurance that the amount of government assistance will be received, and amounts can be reasonably estimated. When the government assistance relates to an expense item, it is recognized as a reduction of the corresponding expense on the statement of comprehensive income. Where government assistance relates to an asset, it is deducted from the cost of the related asset.

(continues)

EASTSIDE GAMES INC. Notes to Consolidated Financial Statements

(Presented in Canadian dollars)

For the Years Ended December 31, 2019, 2018 and 2017

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Non-current assets held for sale and discontinued operations

The company classifies non-current assets and disposal group as held for sale if their carrying amounts will be recovered principally through a sale transaction rather than through continuing use. Non-current assets and disposal group classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell. Costs to sell are the incremental costs directly attributable to the disposal of an asset (disposal group), excluding finance costs and income tax expense. Property and equipment and right-of-use asset are not depreciated once classified as held for sale.

A disposal group qualifies as discontinued operation if it is a component of an entity that either has been disposed of, or is classified as held for sale, and:

l Represents a separate major line of business or geographical area of operations;
l Is part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations; or,
l Is a subsidiary acquired exclusively with a view to resale.

Discontinued operations are excluded from the results of continuing operations and are presented as a single amount as profit or loss after tax from discontinued operations in the consolidated statements of income and comprehensive income. Additional disclosures are provided in Note 9 and Schedule 1 and 2. All other notes to the consolidated financial statements include amounts for continuing operations, unless indicated otherwise.

(continues)

EASTSIDE GAMES INC. Notes to Consolidated Financial Statements

(Presented in Canadian dollars)

For the Years Ended December 31, 2019, 2018 and 2017

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Financial instruments

a) Classification

The company classifies its financial instruments in the following categories: at fair value through profit and loss (“FVTPL”), at fair value through other comprehensive income (“FVOCI”) or at amortized cost. The company determines the classification of financial assets at initial recognition. The classification of debt instruments is driven by the company’s business model for managing the financial assets and their contractual cash flow characteristics. Equity instruments that are held for trading are classified as FVTPL. For other equity instruments, on the day of acquisition the company can make an irrevocable election (on an instrument-by-instrument basis) to designate them as at FVOCI. Financial liabilities are measured at amortized cost, unless they are required to be measured at FVTPL (such as instruments held for trading or derivatives) or if the company has opted to measure them at FVTPL.

b) Measurement

Financial assets and liabilities at amortized cost are initially recognized at fair value plus or minus transaction costs, respectively, and subsequently carried at amortized cost less any impairment. Trade and other receivables and trade and other payables are classified as amortized cost.

Financial assets and liabilities carried at FVTPL are initially recorded at fair value. Realized and unrealized gains and losses arising from changes in the fair value of the financial assets and liabilities held at FVTPL are included in comprehensive income or loss in the period in which they arise. Cash and marketable securities are classified as FVTPL.

Financial assets and liabilities carried at FVOCI are initially recorded at fair value. Unrealized gains and losses arising from changes in the fair value of the financial assets and liabilities held at FVOCI are included in comprehensive income or loss in the period in which they arise. As at December 31, 2019, 2018, and 2017 the company has not classified any financial assets as FVOCI.

c) Impairment of financial asset at amortized cost

The company recognizes a loss allowance for expected credit losses on financial assets that are measured at amortized cost. At each reporting date, the company measures the loss allowance for the financial asset at an amount equal to the lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. If at the reporting date, the financial asset has not increased significantly since initial recognition, the company measures the loss allowance for the financial asset at an amount equal to the twelve month expected credit losses. Regardless of whether credit risk has increased significantly, the loss allowance for trade receivables without a significant financing component classified at amortized cost, are measured using the lifetime expected credit loss approach. The Company shall recognize in the statements of net (loss) income, as an impairment gain or loss, the amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized.

(continues)

EASTSIDE GAMES INC. Notes to Consolidated Financial Statements

(Presented in Canadian dollars) For the Years Ended December 31, 2019, 2018 and 2017

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

d) Derecognition

The company derecognizes financial assets only when the contractual rights to cash flows from the financial assets expire, or when it transfers the financial assets and substantially all of the associated risks and rewards of ownership to another entity. Gains and losses on derecognition are generally recognized in the statements of net (loss) income.

Foreign currency translation

Transactions entered into in a currency other than the currency of the primary economic environment in which it operates (the "functional currency") are recorded at the rates applicable when the transactions occur. The company's and its subsidiaries' functional currency is the Canadian dollar. Foreign currency monetary assets and liabilities are translated at the rates applicable at the balance sheet date. Exchange differences arising on the retranslation of unsettled monetary assets and liabilities are similarly recognized immediately in the statement of comprehensive income.

Accounting pronouncements adopted

The company has adopted IFRS 16 Leases (“IFRS 16”) as of January 1, 2019. IFRS 16 requires lessees to recognize most leases on the balance sheet to reflect the right to use an asset for a period of time and the associated liability for payments. The company has adopted IFRS 16 using the modified retrospective method, under which the cumulative effect of the initial application is recognized in retained earnings at January 1, 2019.

On transition to IFRS 16, the company elected to apply the practical expedient to grandfather the assessment of which transactions are leases and applied IFRS 16 only to contracts that were previously identified as leases. Contracts that were not identified as leases under IAS 17 Leases were not reassessed for whether a lease existed.

On transition to IFRS 16, the company has elected to not recognize right-of-use assets and lease liabilities that have lease terms which end within 12 months of the date of initial application and leases of low-value assets.

Lease obligation was measured at the present value of the remaining lease payments discounted at the incremental borrowing rate as at January 1, 2019. Right-of-use asset was measured at an amount equal to the lease obligation.

The following summarizes the impacts of adopting IFRS 16 on the consolidated financial statements:

($) Operating lease obligation at December 31, 2018 190,116 Discounted using the incremental borrowing rate at January 1, 2019 581,874

(continues)

EASTSIDE GAMES INC. Notes to Consolidated Financial Statements

(Presented in Canadian dollars)

For the Years Ended December 31, 2019, 2018 and 2017

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Future accounting pronouncements not yet adopted

A number of new standards, and amendments to standards and interpretations, are not yet effective for the year ended December 31, 2019, and have not been applied in preparing these consolidated financial statements.

The following is a summary of recent accounting pronouncements which have not yet been adopted:

a) IFRS 3 Business Combinations

In October 2018, the IASB published an amendment to IFRS 3 to improve the definition of a business. The amended definition of a business that can better distinguish a business and a group of assets in a business combination as an acquirer recognises goodwill only when acquiring a business. The amendment to IFRS 3 is effective for periods beginning on or after January 1, 2020, and earlier application is permitted. the company does not anticipate this amendment to have a significant effect on the consolidated financial statements.

EASTSIDE GAMES INC. Notes to Consolidated Financial Statements (Presented in Canadian dollars) For the Years Ended December 31, 2019, 2018 and 2017

4. FINANCIAL INSTRUMENTS

Categories of financial assets and financial liabilities

Financial instruments are classified into one of the following three categories: fair value through profit or loss (“FVTPL”); fair value through other comprehensive income ("FVOCI"); and amortized cost. The carrying values of the company’s financial instruments are classified into the following categories:

Financial Instrument	Category	December 31, 2019	December 31, 2018	December 31, 2017
Cash	FVTPL	2,030,226	1,865,509	891,104
Marketable securities	FVTPL	3,487,773	3,422,729	6,526,626
Trade and other receivables	Amortized Cost	4,101,971	2,455,116	2,749,912
Trade and other payables	Amortized Cost	3,226,174	2,060,102	2,034,201

Fair value

IFRS 13 establishes a fair value hierarchy for financial instruments measured at fair value that reflects the significance of inputs in making fair value measurements as follows:

Level 1 - applied to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2 - applies to assets or liabilities for which there are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly such as quoted prices for similar assets or liabilities in active markets or indirectly such as quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions.

Level 3 - applies to assets or liabilities for which there are unobservable market data.

The carrying values of cash, marketable securities, trade and other receivables and trade and other payables approximate their fair values due to their short-term nature. The company’s fair value of cash and marketable securities under fair value hierarchy are measured using Level 1 inputs.

Credit risk

Credit risk arises from the potential that a counter party will fail to perform its obligations. The company's main exposure to credit risk relates to its trade receivables and cash. The credit risk is minimal since the balance of the company's receivables come from large corporations who pay the company advertising and gaming revenue and cash is held with financial institutions that are believed to be creditworthy. There is no bad debt expense in the current or prior periods and in the opinion of management, none of the amounts comprising this balance were considered impaired. As at December 31, 2019, 76% (2018 - 68%, 2017 - 85%) of the company’s trade receivables was concentrated to three major customers. The company has not had any problems with payment from these customers and as such management is of the opinion that any concentration of credit risk is minimal.

(continues)

EASTSIDE GAMES INC. Notes to Consolidated Financial Statements

(Presented in Canadian dollars)

For the Years Ended December 31, 2019, 2018 and 2017

4. FINANCIAL INSTRUMENTS (continued)

Liquidity risk

Liquidity risk is the risk that the company will not have the resources to meet its obligations as they fall due. The company manages this risk by closely monitoring cash forecasts and managing resources to ensure that it will have sufficient liquidity to meet its obligations. All of the company’s financial liabilities are classified as current and are anticipated to mature within the next fiscal period. The following table is based on the contractual maturity dates of financial assets and the earliest date on which the company can be required to settle financial liabilities.

Cash Marketable securities Trade and other receivables Trade and other payables Cash Marketable securities Trade and other receivables Trade and other payables Cash Marketable securities Trade and other receivables Trade and other payables	Contractual Maturity Analysis at December 31, 2019
	Less than 3 - 12 1 - 5 over 5 3 months months years years Total 2,030,226 - - - 2,030,226 3,487,773 - - - 3,487,773 4,101,971 - - - 4,101,971 (3,226,174) - - - (3,226,174) Contractual Maturity Analysis at December 31, 2018
	Less than 3 - 12 1 - 5 over 5 3 months months years years Total 1,865,509 - - - 1,865,509 3,422,729 - - - 3,422,729 2,455,116 - - - 2,455,116 (2,060,102) - - - (2,060,102) Contractual Maturity Analysis at December 31, 2017
	Less than 3 - 12 1 - 5 over 5 3 months months years years Total 891,104 - - - 891,104 6,526,626 - - - 6,526,626 2,749,912 - - - 2,749,912 (2,034,201) - - - (2,034,201)

Currency risk

Currency risk is the risk to the company's earnings that arise from fluctuations of foreign exchange rates and the degree of volatility of these rates. The company is exposed to foreign currency exchange risk on cash, trade and other receivables, and trade and other payables held in U.S. dollars. The company does not use derivative instruments to reduce its exposure to foreign currency risk.

At December 31, 2019, 1 Canadian Dollar was equal to $0.7699 US Dollar (2018 - $0.7330, 2017 - $0.7971).

(continues)

EASTSIDE GAMES INC. Notes to Consolidated Financial Statements

(Presented in Canadian dollars)

For the Years Ended December 31, 2019, 2018 and 2017

FINANCIAL INSTRUMENTS (continued)

Cash Marketable securities Trade and other receivables Trade and other receivables	December 31, 2019	December 31, 2018	December 31, 2017
	US CDN US CDN US CDN Dollar Equivalent Dollar Equivalent Dollar Equivalent 1,122,559 1,458,058 441,471 602,280 448,069 562,124 894,843 1,162,285 571,529 779,712 - - 904,770 1,175,179 801,598 1,093,585 827,946 1,038,698 (923,468) (1,199,465) (124,742) (170,180) (322,078) (404,062)

Based on the net exposures as of December 31, 2019 and assuming that all other variables remain constant, a 10% fluctuation on the Canadian Dollar against the US Dollar would result in a change to the company’s net income by approximately $259,605 (2018 - $230,540, 2017 - $362,498).

Interest rate risk

Interest rate risk is the risk that the value of a financial instrument might be adversely affected by a change in the interest rates. In seeking to minimize the risks from interest rate fluctuations, the company manages exposure through its normal operating and financing activities. The company is exposed to interest rate risk primarily through its floating interest rate bank indebtedness.

Price risk

The Company is exposed to price risk with respect to its marketable securities, which may arise due to changes in conditions that affect commodity and equity prices. These fluctuations may be significant.

EASTSIDE GAMES INC. Notes to Consolidated Financial Statements

(Presented in Canadian dollars)

For the Years Ended December 31, 2019, 2018 and 2017

5. FIRST TIME ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS

In preparing its first consolidated financial statements in accordance with IFRS, the company has adjusted amounts reported previously in the consolidated financial statements prepared in accordance with previous Canadian Accounting Standards for Private Enterprises (ASPE). An explanation of the effect of the transition to IFRS to the company's financial position, financial performance and cash flows is set out in the following tables and the notes that accompany the tables.

Originally Stated Adjustment Restated Consolidated Statement of Financial Position As at January 1, 2017 Assets Intangible assets (b) $ 1,266,600 $ (1,266,600) $ - Deferred income tax (c) - 176,917 176,917 1,266,600 (1,089,683) 176,917 Liabilities and shareholders' equity Deferred revenue (d) - 226,542 226,542 Retained earnings (b,c,d) 6,061,044 (1,316,225) 4,744,819 6,061,044 (1,089,683) 4,971,361 Consolidated Statement of Financial Position As at December 31, 2017 Assets Deferred income tax (c) $ - $ 150,501 $ 150,501 - 150,501 150,501 Liabilities and shareholders' equity Deferred revenue (d) - 14,325 14,325 Retained earnings (c,d) 8,667,272 136,176 8,803,448 8,667,272 150,501 8,817,773 Consolidated Statement of Income and Comprehensive Income For the year ended December 31, 2017 Revenue (c) $ 23,889,489 $ (14,325) $ 23,875,164 23,889,489 (14,325) 23,875,164 Deferred income taxes (c) - 26,415 26,415 $ 12,090	Originally Stated Adjustment Restated Consolidated Statement of Financial Position As at January 1, 2017 Assets Intangible assets (b) $ 1,266,600 $ (1,266,600) $ - Deferred income tax (c) - 176,917 176,917 1,266,600 (1,089,683) 176,917 Liabilities and shareholders' equity Deferred revenue (d) - 226,542 226,542 Retained earnings (b,c,d) 6,061,044 (1,316,225) 4,744,819 6,061,044 (1,089,683) 4,971,361 Consolidated Statement of Financial Position As at December 31, 2017 Assets Deferred income tax (c) $ - $ 150,501 $ 150,501 - 150,501 150,501 Liabilities and shareholders' equity Deferred revenue (d) - 14,325 14,325 Retained earnings (c,d) 8,667,272 136,176 8,803,448 8,667,272 150,501 8,817,773 Consolidated Statement of Income and Comprehensive Income For the year ended December 31, 2017 Revenue (c) $ 23,889,489 $ (14,325) $ 23,875,164 23,889,489 (14,325) 23,875,164 Deferred income taxes (c) - 26,415 26,415 $ 12,090	Originally Stated Adjustment Restated
		$ 1,266,600 $ (1,266,600) $ - - 176,917 176,917
		1,266,600 (1,089,683) 176,917
		- 226,542 226,542 6,061,044 (1,316,225) 4,744,819
		6,061,044 (1,089,683) 4,971,361
		$ - $ 150,501 $ 150,501
		- 150,501 150,501
		- 14,325 14,325 8,667,272 136,176 8,803,448
		8,667,272 150,501 8,817,773
For the year ended December 31, 2017 Revenue (c) Deferred income taxes (c)
		23,889,489 (14,325) 23,875,164 - 26,415 26,415
		$ 12,090

(continues)

EASTSIDE GAMES INC. Notes to Consolidated Financial Statements

(Presented in Canadian dollars)

For the Years Ended December 31, 2019, 2018 and 2017

5. FIRST TIME ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS (continued)

Originally Stated Adjustment Restated Consolidated Statement of Financial Position As at December 31, 2018 Assets Deferred income tax (c) $ - $ 197,471 $ 197,471 - 197,471 197,471 Liabilities and shareholders' equity Retained earnings (c) 8,278,182 (197,471) 8,080,711 8,278,182 (197,471) 8,080,711 Consolidated Statement of Income and Comprehensive Income For the year ended December 31, 2018 Deferred income taxes (c) $ - $ (46,970) $ (46,970)	Originally Stated Adjustment Restated
	$ - $ 197,471 $ 197,471
	- 197,471 197,471
	8,278,182 (197,471) 8,080,711
	8,278,182 (197,471) 8,080,711
For the year ended December 31, 2018 Deferred income taxes (c)

(a) At the date of transition to IFRS, the company has taken the following optional exemptions pursuant to IFRS 1:
l Election to determine whether an arrangement existing at the date of transition to IFRS contains a lease on the basis of facts and circumstances existing at transition date (rather than inception of the arrangement). This did not result in any impact as a result of the transition to IFRS.
l Election to not restate any of its past business combinations (entered into prior to the date of transition to IFRS). This did not result in any impact as a result of the transition to IFRS.
l Election to grandfather the previous Canadian ASPE carrying amount of capitalized borrowing costs at the date of transition. This did not result in any impact as a result of the transition to IFRS.
(b) At the date of transition to IFRS, the company had intangible assets of $1,266,600 that have been written down to nil as the intangible assets have been fully depreciated due to the lapse of its useful life.
(c) At the date of transition to IFRS, the company had deferred income tax assets of $176,917 related to taxable temporary differences that were not recognized under the previous Canadian ASPE.
(d) At the date of transition to IFRS, the company had deferred revenue of $226,542 related to the portion of the performance obligations not yet satisfied.

EASTSIDE GAMES INC. Notes to Consolidated Financial Statements (Presented in Canadian dollars) For the Years Ended December 31, 2019, 2018 and 2017

6. INVESTMENT TAX CREDITS

Included in administrative expenses are investment tax credits. The company claims investment tax credits ("ITC") from the scientific research and experimental development ("SR&ED") expenditures incurred during the year and British Columbia Interactive Digital Media Tax Credit ("BC IDMTC"). During the year the company claimed the following:

ITC from SR&ED expenditures BC IDMTC	2019 2018 2017
	$ 1,106,219 $ 343,256 $ 294,231 675,429 917,915 801,492
	$ 1,781,648 $ 1,261,171 $ 1,095,723

7. CURRENT INCOME TAXES

The reported income tax expense differs from the amount computed by applying the Canadian basic statutory rate to income before income taxes. The reasons for the difference and the related tax effect are reflected below:

Income before income taxes Corporate tax rate Expected income tax expense at statutory rates Increase (decrease) resulting from: Non-taxable dividends Non-deductible expenses Taxable capital gains Partnership loss for tax purposes Capital cost allowance SR&ED expenditures Inducement under 12(1)(x)ITA Unrealized gain on foreign exchange Taxable income Current income taxes	2019 2018 2017
	$ 3,834,390 $ 2,100,618 $ 4,854,036 27% 27% 26% (51,285) - (9,864) 243,460 176,766 3,189 - - 57,680 (43,438) - - (228,644) (150,208) (139,594) 423,098 299,731 296,722 856,233 801,492 669,328 88,648 - -
	$ 5,122,462 $ 3,879,683 $ 6,261,231
	$ 1,383,065 $ 1,047,514 $ 1,627,920

EASTSIDE GAMES INC. Notes to Consolidated Financial Statements (Presented in Canadian dollars) For the Years Ended December 31, 2019, 2018 and 2017

8. DEFERRED INCOME TAXES

The following components of deferred income taxes are calculated based on a current year enacted rate of 27% (2018 - 27%, 2017 - 26%). The change in deferred income taxes is $82,939 (2018 - $(46,970), 2017 - $26,415) and is represented as a deferred income tax recovery on the consolidated statement of income and comprehensive income in the years ended:

Deferred income tax asset (liability) Marketable securities Long term investments Property and equipment Right of use assets and lease liabilities Intangible assets	2019 2018 2017
	$ (20,100) $ 59,162 $ 3,320 14,741 (727) - (46,613) (30,813) (28,689) 8,543 - - 157,961 169,850 175,870
	$ 114,532 $ 197,472 $ 150,501

9. DISCONTINUED OPERATIONS

On October 29, 2019 the company entered into a share purchase agreement (the "SPA"), completed on April 17, 2020, with 1182533 B.C. Ltd. (the "Purchaser") to sell its interest in LDRLY (Technologies) Inc. for an aggregate purchase price of $5,665,000 as follows:

cash consideration of $1,250,000 (paid on February 14, 2019); and
share consideration of 55,187,500 common shares to the company a deemed price of $0.08 per share. This is a total share consideration of $4,415,000

In accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations , the associated assets and liabilities were consequently presented as held for sale in these financial statements, and the subsidiary is reported in the current period as a discontinued operation. Financial information related to the discontinued operation for the periods is set out in Schedule 1 and 2.

10. TRADE AND OTHER RECEIVABLES

Trade receivable Loans receivable Government assistance receivable Goods and services tax recoverable	2019 2018 2017
	$ 2,005,659 $ 1,803,540 $ 2,632,718 125,349 917 1,667 1,822,697 645,180 100,790 148,266 6,479 14,737
	$ 4,101,971 $ 2,456,116 $ 2,749,912
	l

EASTSIDE GAMES INC. Notes to Consolidated Financial Statements

(Presented in Canadian dollars) For the Years Ended December 31, 2019, 2018 and 2017

11. PREPAID EXPENSES AND DEPOSITS / DEFERRED CHARGES

The company has entered into agreements with several external studios in an effort to develop new video games. Included in prepaid expenses and deferred charges are amounts paid to external studios in advance related to development and royalty costs of the games under development.

	Prepaid expenses and deposits / deferred charges Prepaid royalties - current option Other prepaid expenses Subtotal Prepaid royalties	2019 2018 2017
		$ 1,914,899 $ - $ - 226,476 861,814 337,980 2,141,375 1,199,794 1,199,794 1,606,777 - -
		$ 3,748,152 $ 1,199,794 $ 1,199,794

EASTSIDE GAMES INC. Notes to Consolidated Financial Statements

(Presented in Canadian dollars)

For the Years Ended December 31, 2019, 2018 and 2017

12. PROPERTY AND EQUIPMENT

Cost Balance at January 1, 2017 Additions Disposals Balance at December 31, 2017 Additions Disposals Balance at December 31, 2018 Additions Disposals Balance at December 31, 2019 Accumulated amortization Balance at January 1, 2017 Amortization for the year Disposals Balance at December 31, 2017 Amortization for the year Disposals Balance at December 31, 2018 Amortization for the year Disposals Balance at December 31, 2019 Carrying value At January 1, 2017 At December 31, 2017 At December 31, 2018 At December 31, 2019	Leasehold improvements Furniture and fixtures Computer equipment Total
	$ 62,576 $ 29,891 $ 257,739 $ 350,206 - 643 120,820 121,463 - - - -
	$ 62,576 $ 30,534 $ 378,559 $ 471,669 - 194,679 154,504 349,183 - - - -
	$ 62,576 $ 225,213 $ 533,063 $ 820,852 - 2,348 83,319 85,667 - - - -
	$62,576 $227,561 $616,382 $ 906,519
	$ 62,576 $ 17,161 $ 145,971 $ 225,708 - 2,610 51,653 54,263 - - - -
	$ 62,576 $ 19,771 $ 197,624 $ 279,971 - 21,621 77,456 99,077 - - - -
	$ 62,576 $ 41,392 $ 275,080 $ 379,048 - 36,999 89,896 126,895 - - - -
	$62,576 $78,391 $364,976 $ 505,943
	$- $ 62,576 $ 111,768 $ 174,344
	$- $ 10,763 $ 180,935 $ 191,698
	$- $ 183,821 $ 257,983 $ 441,804
	$ - $ 149,170 $ 251,406 $ 400,576

EASTSIDE GAMES INC. Notes to Consolidated Financial Statements

(Presented in Canadian dollars)

For the Years Ended December 31, 2019, 2018 and 2017

13. LONG TERM INVESTMENT Creative Labs Limited Partnership	2019 2018 2017
	$ 390,805 $ 455,388 $ 500,000

The company entered into a subscription agreement with Creative Labs L.P. on December 5, 2016, and committed to subscribe to 500,000 units of the partnership and enter the partnership as a limited partner. As at the date of the financial statements, 375,000 (2018 - 225,000, 2017 - 75,000) of the committed units have been funded. This investment has been accounted for using the equity method. The unfunded units of 125,000 (2018 - 275,000, 2017 - 425,000) have been accrued and accounted for as other payables.

14. BANK INDEBTEDNESS

The company has an authorized $3,500,000 operating line of credit, bearing interest at prime + 1.0%. At December 31, 2019 the company had a drawn balance of $5,000 (2018 - $nil, 2017 - $nil), which has been included in the company's total cash.

15. TRADE AND OTHER PAYABLES

Trade payables Wages and vacation payable Interest payable	2019 2018 2017
	$ 2,900,824 $ 1,847,649 $ 1,945,285 320,866 212,453 88,917 4,486 - -
	$ 3,226,176 $ 2,060,102 $ 2,034,202

EASTSIDE GAMES INC. Notes to Consolidated Financial Statements

(Presented in Canadian dollars)

For the Years Ended December 31, 2019, 2018 and 2017

16. RIGHT-OF-USE ASSETS / LEASE OBLIGATIONS

Lease obligation has been measured by discounting future lease payments using the company's incremental borrowing rate at January 1, 2019. The weighted-average rate applied is 12%. Rates implicit in the leases were not readily determinable. Interest expense on lease obligations for the year ended December 31, 2019 was $67,548.

Right-of-use assets Right-of-use assets - cost Right-of-use assets - accumulated amortization Lease obligation Discounted lease obligation at January 1, 2019 Lease payments Current portion of lease obligation	2019
	$ 581,874 (158,693)
	$ 423,181
	2019
	$ 581,874 (127,053)
	454,821 (149,230)
	$ 305,591

EASTSIDE GAMES INC. Notes to Consolidated Financial Statements

(Presented in Canadian dollars)

For the Years Ended December 31, 2019, 2018 and 2017

17. SHARE CAPITAL

Authorized:

Unlimited Class "A" Common voting shares, without par value Unlimited Class "B" Common voting shares, without par value Unlimited Class "A" Non-voting preferred shares, with a par value of $0.01 dollars Unlimited Class "B" Non-voting preferred shares, without par value

Issued: 1 Class B preferred shares 771,847 Class A common shares 3,600,000 Class B common shares	2019 2018 2017
	$ - $ - $ 1,200,000 375,656 363,031 305,521 10 10 10
	$ 375,666 $ 363,041 $ 1,505,531

EASTSIDE GAMES INC. Notes to Consolidated Financial Statements

(Presented in Canadian dollars)

For the Years Ended December 31, 2019, 2018 and 2017

18. STOCK BASED COMPENSATION PLAN

At the statement date, the company had an employee stock based compensation plan for Class "A" common shares. Under the terms of the plan, the options vest on a quarterly basis over a one year period and expire five years after the date of the grant.

Details of the employee stock options are as follows:

Outstanding at beginning of year Granted Exercised Forfeited Outstanding as at December 31, 2017 Granted Exercised Forfeited Outstanding as at December 31, 2018 Granted Exercised Forfeited Outstanding as at December 31, 2019	Number Weighted Average Exercise Price
	661,875 2.43 64,650 4.00 (61,000) 1.01 (35,500) 1.01
	630,025 2.81
	132,250 6.42 (56,200) 1.02 (60,975) 3.31
	645,100 3.66
	223,176 7.00 (12,500) 1.01 (38,750) 4.12
	817,026 $ 4.59

The company applies the fair value method using the Black-Scholes option pricing model in accounting for its stock options granted. The following inputs were used:

The risk free interest rate ranges from 1.34% - 1.90% and 1.65% - 2.19% respectively.
The expected life of the options is 5 years.
The expected volatility is 60%.
The expected forfeiture rate ranges from 12.48% - 15.81%.
The expected dividends yield is 0%.

Option-pricing models require the use of estimates and assumptions including the expected volatility. Changes in the underlying assumptions can materially affect the fair value estimates and, therefore, existing models do not necessarily provide a reliable measure of the fair value of the company’s share options.

(continues)

EASTSIDE GAMES INC. Notes to Consolidated Financial Statements

(Presented in Canadian dollars)

For the Years Ended December 31, 2019, 2018 and 2017

18. STOCK BASED COMPENSATION PLAN (continued)

Accordingly, during the year, the company recognized stock based compensation expense and contributed surplus of $424,876 (2018 - $264,302, 2017 - $152,449).

The weighted average fair value of all share options granted, using the Black-Scholes option pricing model, during 2019 was $998 per option (2018 - $300, 2017 - $270). The weighted average share price at the date of exercise was $1.01 per option (2018 - $1.02, 2017 - $1.01). The weighted average remaining contractual life of outstanding share options at December 31, 2019 was 4.44 years (2018 - 4.56, 2017 - 3.52) years.

The following table summarizes information about the share options outstanding and exercisable at December 31, 2019:

Number outstanding 185,700 8,900 104,100 64,400 24,500 107,750 223,176 718,526	Number exercisable Exercise price $ Expiry date 185,700 $1.01 December 31, 2020 8,900 $1.01 June 30, 2021 104,100 $4.00 December 31, 2021 64,400 $4.00 December 2022 24,500 $4.00 March 31, 2023 107,750 $7.00 December 31, 2023 - $7.00 December 31, 2024 495,350

For the Years Ended December 31, 2019, 2018 and 2017

EASTSIDE GAMES INC. Notes to Consolidated Financial Statements (Presented in Canadian dollars)

19. RELATED PARTY TRANSACTIONS

A number of key management personnel have control or significant influence over financial or operating policies of the company. Also, the company receives fees from its subsidiary, LDRLY (Technology) Inc. for providing game support services. These services are charged and paid for on a recurring basis.

Related party transactions LDRLY Technologies Inc. Subsidiary Game support services Key management personnel Management Compensation	2019 2018 2017
	$ 4,725,415 $ 75,884 $ 1,888,695
	$ 520,849 $ 442,390 $ 316,970

These transactions are in the normal course of operations and are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties.

Due from related party

Current portion due from related party LDRLY (Technologies) Inc.	2019 2018 2017
	$ 1,781,135 $ 386,279 $ 259,203

20. CAPITAL RISK MANAGEMENT

The company manages, as capital, the components of shareholders’ equity and its cash. The company’ objectives, when managing capital, are to safeguard its ability to continue as a going concern and to maintain a flexible capital structure which optimizes the costs of capital at an acceptable risk. The company manages its capital structure, and makes adjustments to it, in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust its capital structure, the company may attempt to issue common shares, borrow or adjust the amount of cash.

EASTSIDE GAMES INC. Notes to Consolidated Financial Statements

(Presented in Canadian dollars)

For the Years Ended December 31, 2019, 2018 and 2017

21. EVENTS OCCURRING AFTER THE REPORTING PERIOD

The following events occurred subsequent to the fiscal year end:

Sale of subsidiary

The company has sold all of its interests in one of the subsidiaries, LDRLY (Technologies) Inc. on April 17, 2020. Please refer to Note 9 for further details.

Related party loan

On June 16, 2020 the company provided an unsecured, non-interest bearing demand loan to a related party in the amount of $783,277.

Share transactions

On June 16, 2020 the following Class A common shares options were exercised by option holders:

289,600 options with an exercise price of $1.01 per option for total proceeds of $292,496;
169,100 options with an exercise price of $4.00 per option for total proceeds of $676,400.

After these transactions, the company had the following outstanding options remaining:

l 3,850 options with an exercise price of $1.01 per option
l 25,100 options with an exercise price of $4.00 per option
l 107,626 options with an exercise price of $7.00 per option

On June 16, 2020 a shareholder exchanged 234,153 Class A common shares for 783,145 Class B non-voting preferred shares of the company.

COVID-19

Subsequent to the year-end, on March 11, 2020, the World Health Organization characterized the outbreak of a disease caused by a strain of a novel coronavirus (“COVID-19”), as a pandemic. This has resulted in a series of public health and emergency measures that have been put in place to combat the spread of the virus. The duration and impact of COVID-19 is unknown at this time and it is not possible to reliably estimate the impact that the length and severity of these developments will have on the financial results and condition of the Company in future periods.

22. COMPARATIVE FIGURES

Some of the comparative figures have been reclassified to conform to the current year's presentation.

(Schedule 1)

EASTSIDE GAMES INC. Discontinued Operations

(Presented in Canadian dollars) For the Years Ended December 31, 2019, 2018 and 2017

	2019 2018 2017
REVENUE Gaming Advertising COST OF SALES GROSS PROFIT EXPENSES Adminstrative expenses Amortization Other operating expenses Selling and distribution expenses OTHER INCOME (LOSS) Gain (loss) on foreign exchange Investment income INCOME FROM DISCONTINUED OPERATIONS	6,410,231 $ 1,989,214 $ 4,537,825 $ 2,038,282 242,009 484,343
	8,448,513 2,231,223 5,022,168 2,131,747 790,594 1,508,942
	6,316,766 1,440,629 3,513,226
	987,492 939,967 347,813 57,073 2,479 513 370,649 112,083 1,898,139 4,780,047 438,197 1,245,751
	6,195,261 1,492,726 3,492,216
	(54,832) 51,989 (20,310) 159 65 93 (54,673) 52,054 (20,217)
	66,832 $ (43) $ 793 $

See notes to consolidated financial statements

(Schedule 2)

EASTSIDE GAMES INC. Assets and Liabilities of Disposal Group Classified as Held for Sale (Presented in Canadian dollars) As at December 31, 2019, 2018, 2017 and January 1, 2017

	*December 31* December 31 December 31 January 1 2019 2018 2017 2017
ASSETS Cash Trade and other receivables Prepaid expenses Equipment Right-of-use assets LIABILITIES Trade and other payables Lease obligation NET ASSETS	351,771 $ 363,484 $ 64,099 $ 583,987 $ 1,488,331 294,478 387,688 422,141 101,742 33,366 - 139
	1,941,844 691,328 451,787 1,006,267 44,097 17,165 1,483 1,996 39,334 - - -
	2,025,275 $ 708,493 $ 453,270 $ 1,008,263 $
	1,806,992 $ 389,315 $ 343,460 $ 899,246 $ 41,684 - - -
	1,848,676 389,315 343,460 899,246
	176,599 $ 319,178 $ 109,810 $ 109,017 $

See notes to consolidated financial statements

(Schedule 1)

EASTSIDE GAMES INC. Cash Flows of Disposal Group Classified as Held for Sale (Presented in Canadian dollars) For the Years Ended December 31, 2019, 2018 and 2017

	2019 2018 2017
CASH FLOW Cash flow from operating activities Cash flow from investing activities NET CHANGE IN CASH FLOW	321,037 108,135 (519,888) (84,005) (18,161) -
	237,032 89,974 (519,888)

See notes to consolidated financial statements

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ESG Management's Discussion and Analysis

The following management's discussion and analysis for the financial condition and results of operations for ESG for the years ended December 31, 2017 to 2019 inclusive, and the six month period ended June 30, 2020, should be read in conjunction with the financial statements and the notes thereon provided above. This management's discussion and analysis is dated November 4, 2020.

This MD&A contains certain statements that may constitute “forward looking statements”. Forward looking statements include, but are not limited to, statements regarding future anticipated business developments and the timing thereof, and business and financing plans. No assurance can be given that such expectations will prove to be correct. Forward looking statements are typically identified by words such as: believe, expect, anticipate, intend, estimate, postulate and similar expressions, or which by their nature refer to future events. Forward looking statements are not guarantees of future performance, and actual results may differ materially from those in forward looking statements as a result of various factors, including, but not limited to, ESG's ability to uncertainty of future revenues; competition; regulation; potential intellectual property issues; reliance on third party distributors; dependence on key executives; dependence on advertising revenue; potential requirement for further funding; IT security risks; potential conflicts of interest with proposed directors and officers; potential share price volatility; need to attract and retain qualified personnel; and ability to implement business strategies.

Although ESG has attempted to identify important factors that could affect it, unknown events may cause actual actions, events or results to differ materially from those described in forwardlooking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The forward-looking statements in this MD&A address only as of the date hereof. ESG does not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date hereof to reflect the occurrence of unforeseen events other than as required by applicable law.

COVID-19 UPDATE

The human costs of the COVID-19 pandemic have been extraordinary, straining global capabilities and forcing massive societal change. We at ESG remain focused on monitoring and assessing the COVID-19 pandemic and global response, and prioritizing the interests of our employees and players. The impact of the COVID-19 pandemic on our operations began to materialize towards the end of the first quarter of 2020. Specifically, beginning in late March, as individuals throughout the world sheltered-in-place, we began experiencing higher levels of player engagement in our games from current, lapsed and new players, as well as a decline in advertising prices across the industry. Additionally, in mid-March, our workforce transitioned to remote working as we closed our offices, without any material disruption to our day-to-day operations. Currently, our offices remain closed and our safety of our employees is of utmost importance.

While we believe that we have been able to observe certain trends, we may not be able to determine the quantifiable impact primarily attributable to the COVID-19 pandemic on our

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results of operations and financial performance as of and for the 6 months ended June 30, 2020 and for future periods.

COMPANY BACKGROUND & DESCRIPTION OF BUSINESS

ESG was founded in 2011, and is a mobile game developer and publisher, specializing in free to play (F2P) casual mobile games. Headquartered in Vancouver, British Columbia, it has almost a decade track record of producing successful titles. It received $33.64M in revenue in 2019, and, in 2020, has already received $28.23M in revenue by the end of its second quarter, driven by a strong portfolio of long lifecycle game franchises with loyal user base.

All of ESG games are free to play, and generate revenue through the sale of in-app items ("in app revenue" or " IAP ") and advertising revenue. We generate IAP revenue from in app purchases (the sale of in-game virtual items) and through in game advertising. Revenue growth will continue to depend on our ability to attract and retain players and effectively monetize our player base through the sale of in-game virtual items and advertising. We intend to do this through the launch of new games, enhancements to current games, licensing of our "IdleKit" platform and expansion into new markets and distribution platforms.

ESG currently publishes the following game titles generating revenue, which we segment into specific revenue and lifecycle phases:

New:
Archer: Danger Phone launched 8.20; (Developer: Truly Social Games, ESG IP agreement with FX-Disney games);
Dragon Up: Idle Adventure launched 2.20; (Developer: Night Garden Studios);
The Goldbergs: Back to the 80’s launched 4.20; (Developer: Lumen Games, ESG IP Agreement with Sony)

Growth:

Bud Farm Idle Tycoon , launched Q2 2019; (Publisher agreement with LDRLY);
It’s Always Sunny in Philadelphia: The Gang Goes Mobile , launched 2019 (Developer: ESG and IP agreement with FX- Disney games)
Trailer Park Boys: Greasy Money launched 2017 (Developer: ESG and IP agreement Talent direct)

Further description of game lifecycle phases can be found in Appendix B Information Concerning ESG .

ESG currently has a number of third party clients that utilize its IdleKit platform or related services, including Truly Social Games (for the development of Archer: Danger Phone ), Night Garden Studios (for the development of Dragon Up: Idle Adventure ), LDRLY (for titles Bud

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Farm: Idle Tycoon and Cheech & Chong: Bud Farm ), and Kano Apps (for the development of FUBAR: Idle Party Tycoon ).

Summary of Financial Performance

Year ended December 31, 2017

ESG focused on the diversification of its cannabis-centric game portfolio (which were developed and published through LDRLY (Technologies) Inc. (" LDRLY ")), and the introduction of its first third-party licensed IP lead game, Trailer Park Boys: Grea$y Money . It continued marketing games within the LDRLY-published Bud Farm franchise, and accelerated the launch of the Bud Farm: Quest for Buds (" QFB ") title to defend market share against competitive launches of LBC Studios Inc.'s Hempire title and Metamoki's Wiz Khalifa Weed Farm title in April 2017. Additionally, ESG incurred development costs of $347,301 for a new title, Bud Farm 420 , which launched in April 2018, so as to refresh the overall Bud Farm franchise.

Through 2017, total revenue was $25.76 million, with cost of sales of approximately $9.09 million. Revenue was comprised of approximately $21.83 million in gaming revenue (which includes revenue derived from IAP) and approximately $3.93 million in advertising revenue. Trailer Park Boys: Greasy Money (" TPB ") made a total of $13.42 million (51%) of the total gross revenue with the LDRLY-published Bud Farm franchise titles accounting for the remaining $12.88 million (49%).

Total expenses for the year was approximately $11.85 million. This was comprised mainly of $5.20 million in administrative expenses (net of government assistance in the form of investment tax credits from scientific research and experimental development (" SRED ") expenditures through the year, as well as the British Columbia Interactive Digital Media Tax Credit, for a combined value of approximately $1.1 million), and approximately $5.19 million in selling and distribution expenses (including user acquisition costs).

Year ended December 31, 2018

In 2018, ESG continued its focus on TPB, as well as its self-published "evergreen" phase mobile games. Additionally, the BudFarm 420 (" BF420 ") title was launched on April 1 2018. This game was developed by ESG on behalf of LDRLY, and all the developmental costs remained in ESG with the exception of the outsourcing costs to Shiny Shoe LLC. ESG also secured its first third party customer for its IdleKit platform: Kano Apps.

In July 2018, a separate office for LDRLY was opened in Nanaimo, British Columbia. A share work space with a third party was set up for five months, and in December 2018, a lease was signed with the Nanaimo Port Authority for 12 months, with a three year option to renew (the lease was subsequently renewed for another year in December 2019 with no further renewal options). LDRLY's operations began to be further separated from ESG's generally: payroll was directly administered by LDRLY, and ownership of the Bud Farm titles was transferred to LDRLY.

Total revenue for 2018 was approximately $25.74 million, which was generally similar to the year prior. Revenue consisted of approximately $21.26 million IAP game revenue, and an increase in advertising revenue to $4.47 million (2017: $3.93 million). The increase in advertising revenue was largely due to the success of the TPB title. The cost of sales, however,

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increased to $11.37 million (2017: $9.09 million), which was generally due to licensing costs and royalty payments related to TPB.

Expenses through the year $11.96 million (2017:$11.85 million) generally stayed similar to the year, though the composition of expenses varied. Administrative expenses (net of government assistance in the form of SRED investment tax credits through the year, as well as the British Columbia Interactive Digital Media Tax Credit, for a combined value of approximately $1.26 million), was approximately $7.70 million, an increase relative to 2017 ($5.20 million), largely due to increase in wage costs due to company growth. However, selling and distribution expenses decreased by a half: from $5.19 million in 2017 to $2.54 million in 2018. The decrease was generally attributable to a reduction in marketing expenses linked with game lifecycle phases.

Year ended December 31, 2019

In 2019, ESG continued focus on TPB. LDRLY launched the next game in the Bud Farm franchise, Bud Farm: Idle Tycoon (" BFIT "). This game was developed by ESG on behalf of LDRLY, and all the developmental costs for that title remained in ESG. LDRLY was also awarded a contract to develop the Cheech & Chong title, which subsequently launched after ESG's sale of LDRLY in April 2020.

Further negotiations regarding the sale of LDRLY commenced through 2019, with an agreement in principle being reached with LEAF. The sale of LDRLY subsequently completed in April 2020.

Through 2019, total revenue increased to $33.64 million. This was generally driven by an increase in game and publishing revenue to $27.84 million (2018: $21.26 million), and an increase in advertising revenue to $5.80 million (2019: $4.47 million) driven by increased user based and ad server optimization. Cost of sales correspondingly increased to $12.41 million (2018: $11.37 million).

Expenses saw a similar increase through 2019, with total expenses increasing to $17.89 million (2018: $11.96 million). Administrative expenses (net of government assistance in the form of SRED investment tax credits through the year, as well as the British Columbia Interactive Digital Media Tax Credit, for a combined value of approximately $1.78 million), was $8.44 million (2018: $7.70 million), and selling and distribution expenses was $7.41 million (2018: $2.54 million) driven from increased marketing expenses associated with the launch of BFIT.

Interim period ended June 30, 2020

A number of significant events occurred in the interim period ended June 30, 2020. Firstly, ESG completed its sale of LDRLY to LEAF, as part of LDRLY's Qualifying Transaction. Further discussion of this can be found in Appendix A Information Concerning LEAF to the Circular .

Additionally, ESG published new game titles, including Dragon Up: Idle Adventure in February 2020 (developed by Night Garden Studios), and The Goldbergs: Back to the 80s in April 2020 (developed by Lumen Games). Subsequent to Q2 2020, ESG also published Archer: Danger Phone in August 2020 (developed by Truly Social Games). Additional information regarding these titles can be found in Appendix B Information Concerning ESG .

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By June 30, 2020, total revenue was $28.23 million, increasing by $10.25 million relative to the same period in 2019. Key drivers of this was continued growth of both TPB and BFIT, with the addition of new title launches, Cheech & Chong: Bud Farm and The Goldbergs: Back to the 80s . Of total revenue in the six month period, game and publishing revenue was $25.12 million, and advertising revenue was $3.11 million.

ESG has been able to observe certain positive trends in our key KPIs driving topline revenue, and while we believe there is a measurable impact due to the COVID-19 pandemic, we cannot determine the quantifiable impact primarily attributable to the COVID-19 pandemic on our results of operations and financial performance versus the fact we launched a new game and focused marketing efforts on games in their growth phase.

Additionally, we believe that the increase in total revenue relative to the same period in 2019 was also partially attributable to significant increases in key audience operating metrics across ESG's game portfolio, related to continued investment in user acquisition (" UA "), and "Live Ops" player engagement supporting growth games., Expenses of $21.21 million were incurred through the period, with $8.90 million in administrative expenses, net of government assistance through tax credits, and $8.16 million in selling and distribution expenses. This was a substantial increase relative to the same period in 2019 of $12.90 million in total expenses, with $4.27 million in administrative expenses, net of government assistance, and $1.89 million in selling and distribution expenses), reflecting the company’s overall growth in its operations.

LIQUIDITY & CAPITAL RESOURCES

At December 31, 2019, ESG had working capital of $13.54 million (2018: $8.99; 2017: $10.76), including cash and cash equivalents (including marketable securities), of $5.52 million (2018: $5.29; 2017: $7.42). As at the end of the interim period ended June 30, 2020, it had working capital of $19.11 million.

Through the period described, ESG's working capital has primarily been funded from ongoing operating revenue.

The chart below describes ESG's cash flow during the six month period ended June 30, 2020, and during the 2017, 2018 and 2019 financial years. Please note, however, that the amounts for the 2017 to 2019 financial years include cash flows derived from LDRLY's operations. As ESG's sale of LDRLY to LEAF concluded in April 2020, the description of cash flow for the six month period ended June 20, 2020 does not include cash flow derived from LDRLY.

	6 month period ended June 30, 2020	Year ended December 31, 2019	Year ended December 31, 2018	Year ended December 31, 2017
Cash flow from (used in) operating activities	4,651,367	1,050,087	2,066,712	3,085,060
Cash flows used in investing activities	1,879,141	643,573	2,177,259	(6,641,064)
Cash flows provided by (used in) financing activities	(2,439,521)	(1,528,943)	(3,269,566)	(332,556)
Increase (decrease)	4,090,987	164,717	974,405	(3,888,556)

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in cash during the period/year
Cash, beginning of period	2,030,226	1,865,509	891,104	4,779,660
Cash, end of period	6,121,213	2,030,226	1,865,509	891,104

The decrease in cash through 2017 reflects internal investment management that occurred, as many of ESG's separate investments (including cash and cash equivalents) were pooled together with one financial manager in that year, reflected in the cash flows used in investing activities. Dividends were also declared by ESG in both 2017 and 2018 ($1 million and $2 million, respectively), which further decreased ESG's cash position in those years.

Proceeds from issuances of capital from 2017 through to June 30, 2020 generally arose from the exercise of incentive stock options or grants from treasury to employee or founder shareholders.

The net cash inflows from operating activities for the six month period ended June 30, 2020 was $4.65 million (June 30, 2019, ($2.37 million)) driven primarily from significant increase in revenue when compared to same time prior year.

ESG had cash available of $6.12 million for the period ended June 30, 2020 (June 30, 2019: $2.03 million). The increase in cash balance is mainly attributed to the growth in revenue.

Cash used by investing activities through the period was $1.88 million (June 30, 2019: $1.38 million)

RELATED PARTY TRANSACTIONS

Through the 2017 to 2019 financial years, the only related party transactions that ESG undertook were generally with respect to management compensation.

Upon ESG's sale of LDRLY to LEAF in April 2020, ESG became a "related party" of LEAF as a result of holding more than 20% of the issued and outstanding LEAF Shares.

In the six months ended June 30, 2020, ESG received $8.52 million from LEAF (through LDRLY), as a result of a combination of the following:

Technology licensing fees, with respect to platform technology licensed by LDRLY for the development of the Cheech & Chong: Bud Farm title;
Royalty fees, with respect to historical game development work provided LDRLY on the Bud Farm:Idle Tycoon title. This title was developed by ESG, but published by LDRLY; and
Consulting services fees, for services including user acquisition services, and "Live Ops" services provided with respect to the Bud Farm: Idle Tycoon title.

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FINANCIAL INSTRUMENT RISKS & EXPOSURES

ESG may be at risk for regulatory issues and fluctuations in exchange rates. ESG’s financial instruments are exposed to certain financial risks, which include the following:

Credit risk

Credit risk arises from the potential that a counter party will fail to perform its obligations. ESG’s main exposure to credit risk relates to its trade receivables. The credit risk is minimal since the balance of ESG’s receivables comes from large corporations who pay advertising and software sales revenue. There is no bad debt expense in the current year and in the opinion of ESG's management, none of the amounts comprising this balance were considered impaired.

Liquidity risk

Liquidity risk is the risk that ESG will encounter difficulties in meeting obligations when they become due. ESG intends to ensure that there is sufficient capital in order to meet short-term operating requirements, after taking into account ESG’s holdings of cash.

As at June 30, 2020, ESG had cash of $6.12 million and trade receivables, including related party receivables (LDRLY) of $10.95 million to settle the total current liabilities of $6.34 million.

Currency risk

Foreign currency risk is the risk that the fair values of future cash flows of a financial instrument will fluctuate because they are denominated in currencies that differ from the respective functional currency. As of June 30, 2020, ESG is exposed to foreign currency exchange risk on cash, trade receivables, and trade payables held in U.S. dollars. ESG has not hedged its exposure to currency fluctuations.

OFF-BALANCE SHEET ARRANGEMENTS

ESG has not entered into any off-balance sheet arrangements as at June 30, 2020.

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APPENDIX G

PRO FORMA FINANCIAL INFORMATION

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Leaf Mobile Inc.

Pro Forma Consolidated Financial Statements

(Unaudited – Expressed in Canadian dollars)

June 30, 2020

LEAF MOBILE INC. ProForma Consolidated Statement of Financial Position As at June 30, 2020

(Unaudited - Expressed in Canadian dollars)

	LEAF Mobile Inc. Eastside Games Inc. Note Ref. Pro Forma Adjustments Pro Forma Consolidated
ASSETS CURRENT Cash Marketable securities Trade and other receivables Prepaid expense and deposits NON-CURRENT Property and equipment Right-of-use assets Long term Investments Deferred income taxes Deferred Charges Intangible assets Unallocated purchase proceeds LIABILITIES CURRENT Trade and other payables Income taxes Lease obligation - current portion NON-CURRENT Lease obligation SHAREHOLDERS' EQUITY Share capital Contributed surplus Reserves Retained earnings (deficit)	4,740,927 6,121,213 4(a)(i) 54,000,000 9,609,866 4(a)(ii) (3,240,000) 4(b)(ii) (50,000,000) 4(c) (500,000) 4(d)(ii) (4,001,094) 4(d)(iv) 2,477,820 4(d)(vii) 11,000 - 1,219,811 - 1,219,811 4,357,523 10,947,822 4(d)(v) (4,111,148) 9,445,031 4(d)(iii) (1,749,166) 575,751 822,302 - 1,398,053
	9,674,201 19,111,148 (7,112,588) 21,672,761 591,962 378,532 - 970,494 35,246 343,835 - 379,081 - 4,714,181 4(d)(i) (4,415,000) 299,181 - 114,532 - 114,532 - 805,353 - 805,353 4,468,401 - 4,468,401 - - 4(b)(ii) 58,370,044 58,370,044
	5,095,609 6,356,433 53,955,044 65,407,086
	14,769,810 25,467,581 46,842,456 87,079,847
	4,777,325 6,190,656 4(d)(v) (4,111,148) 6,856,833 99,766 - 4(d)(i) 800,219 899,985 41,684 150,303 - 191,987
	4,918,775 6,340,959 (3,310,929) 7,948,805 - 233,089 - 233,089
	4,918,775 6,574,048 (3,310,929) 8,181,894
	10,380,323 1,352,490 4(a)(i) 54,000,000 72,512,235 4(a)(ii) (3,240,000) 4(b)(ii) 68,992,079 4(b)(i) (62,111,809) 4(d)(iii) (310,154) 4(d)(iv) 2,477,820 4(d)(vi) 960,486 4(d)(vii) 11,000 - 1,651,783 1,651,783 194,783 - 4(b)(i) (194,783) - (724,071) 15,889,260 4(b)(i) 1,684,557 4,733,935 4(c) (500,000) 4(d)(i) (5,215,219) 4(d)(ii) (4,001,094) 4(d)(iii) (1,439,012) 4(d)(vi) (960,486)
	9,851,035 18,893,533 50,153,385 78,897,953
	14,769,810 25,467,581 46,842,456 87,079,847

See notes to unaudited proforma consolidated financial statements

LEAF MOBILE INC.

ProForma Consolidated Statement of Income and Comprehensive Income For the Six Months Ended June 30, 2020

(Unaudited - Expressed in Canadian dollars)

	Leaf Mobile Inc. Eastside Games Inc. Note Ref. Pro Forma Adjustments Pro Forma Consolidated
REVENUE Gaming Advertising COST OF SALES GROSS PROFIT EXPENSES Administrative expenses Amortization of property and equipment and right-of- use asset Listing expenses Other operating expenses Selling and distribution expenses INCOME (LOSS) FROM OPERATIONS OTHER ITEMS Gain on foreign exchange Gain on sale of subsidiary Gain on disposal of property and equipment Investment income (expenses) INCOME (LOSS) BEFORE TAXES INCOME TAXES NET AND COMPREHENSIVE INCOME (LOSS) FOR THE PERIOD BASIC AND DILUTED NET INCOME (LOSS) PER COMMON SHARE WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING	6,347,518 30,523,047 4(e)(ii) (8,520,381) 28,350,184 1,797,273 4,638,365 - 6,435,638
	8,144,791 35,161,412 (8,520,381) 34,785,822 6,006,753 6,819,936 4(e)(ii) (4,831,362) 7,995,327
	2,138,038 28,341,476 (3,689,019) 26,790,495
	352,549 9,190,749 4(c) 500,000 11,003,784 4(d)(vi) 960,486 197,062 139,372 - 336,434 670,941 - - 670,941 426,862 4,186,537 - 4,613,399 695,684 12,697,257 4(e)(ii) (3,689,019) 9,703,922
	2,343,098 26,213,915 (2,228,533) 26,328,480
	(205,060) 2,127,561 (1,460,486) 462,015 - 319,688 - 319,688 - 5,183,921 - 5,183,921 - 2,115 - 2,115 - (299,765) - (299,765)
	- 5,205,959 - 5,205,959 (205,060) 7,333,520 - 5,667,974 - 582,806 - 582,806
	(205,060) 6,750,714 (1,460,486) 5,085,168
	0.05
	97,584,896

See notes to the unaudited proforma consolidated financial statements

LEAF MOBILE INC. ProForma Consolidated Statement of Income and Comprehensive Income For the Year Ended December 31, 2019 (Unaudited - Expressed in Canadian dollars)

	Eastside Games Inc. Caprice Business Development Canada Inc. Note Ref. Pro Forma Adjustments Pro Forma Consolidated
REVENUE Gaming 34,292,910 - 4(e)(i) (4,725,415) 29,567,495 Advertising 7,838,868 - - 7,838,868 42,131,778 - (4,725,415) 37,406,363 COST OF SALES 19,262,387 - 4(e)(i) (4,725,415) 14,536,972 GROSS PROFIT 22,869,391 - - 22,869,391 EXPENSES Administrative expenses 9,430,658 149,269 - 9,579,927 Amortization of property and equipment and right-of-use asset 342,661 - - 342,661 Other operating expenses 2,041,829 - - 2,041,829 Selling and distribution expenses 7,502,701 - - 7,502,701 19,317,849 149,269 - 19,467,118 INCOME (LOSS) FROM OPERATIONS 3,551,542 (149,269) - 3,402,273 OTHER ITEMS Foreign exchange loss (257,452) - - (257,452) Unrealized gain on marketable securities 587,124 - - 587,124 Investment income 2,449 - - 2,449 Gain on disposal of property and equipment 800 - - 800 332,921 - - 332,921 INCOME (LOSS) BEFORE INCOME TAXES 3,884,463 (149,269) - 3,735,194 INCOME TAXES Current 858,357 - - 858,357 Deferred 205,692 - - 205,692 1,064,049 - - 1,064,049 NET AND COMPREHENSIVE INCOME (LOSS) FOR THE YEAR 2,820,414 (149,269) - 2,671,145 BASIC AND DILUTED NET INCOME (LOSS) PER COMMON SHARE 0.00 WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 892,850,958	34,292,910 - 4(e)(i) (4,725,415) 29,567,495 7,838,868 - - 7,838,868
	42,131,778 - (4,725,415) 37,406,363 19,262,387 - 4(e)(i) (4,725,415) 14,536,972
	22,869,391 - - 22,869,391
	9,430,658 149,269 - 9,579,927 342,661 - - 342,661 2,041,829 - - 2,041,829 7,502,701 - - 7,502,701
	19,317,849 149,269 - 19,467,118
	3,551,542 (149,269) - 3,402,273 (257,452) - - (257,452) 587,124 - - 587,124 2,449 - - 2,449 800 - - 800
	332,921 - - 332,921
	3,884,463 (149,269) - 3,735,194 858,357 - - 858,357 205,692 - - 205,692
	1,064,049 - - 1,064,049
	892,850,958

See notes to unaudited proforma consolidated financial statements

Leaf Mobile Inc. Notes to the Pro Forma Consolidated Financial Statements (Unaudited - Expressed in Canadian dollars)

1. Description of reporting entity, transaction and offering

Description of reporting entity

Leaf Mobile Inc., (“LEAF” or “the Company”) was incorporated under the Business Corporation Act (British Columbia) on November 29, 2018 as Caprice Business Development Canada Inc. (“Caprice”). The company is a publicly traded company on the TSX Venture Exchange (“TSXV”) under the symbol “LEAF”. The Company’s principal business activity is the development of mobile games through a wholly-owned subsidiary, LDRLY (Technologies) Ltd. To date the Company’s focus has been on counter culture video games, with titles including Bud Farm Idle Tycoon , Bud Farm 420 , Bud Farm Grass Roots , Bud Farm Quest for Buds, Potfarm Legacy , and Cheech & Chong Bud Farm .

Transaction

On October 31, 2020, LEAF entered in a share purchase agreement (the “Agreement”), to acquire 100% of the issued and outstanding shares of Eastside Games Inc. (“ESG”), subject to the terms and conditions thereto. Founded in 2011 ESG is a leading publisher and developer of mobile games, with games created for top Hollywood brands as well as Canadian superstars The Trailer Park Boys .

As a condition precedent to completing the Acquisition, LEAF must complete an equity offering for gross proceeds of $54 million (the "Offering"). Additionally, LEAF must receive conditional approval from the Toronto Stock Exchange (“TSE”) to list the common shares of LEAF ("LEAF Shares") for trading thereon upon completion of the Acquisition and the Offering. Other conditions precedent to completing the Acquisition include obtaining all necessary shareholder and regulatory approvals (including the approval of the TSXV).

Upon completion of the Acquisition, LEAF will acquire 100% of the issued and outstanding securities of ESG. The purchase price will consist of $50,000,000, subject to adjustments, and that number of LEAF Shares that is equal in amount to 50% of the issued and outstanding LEAF Shares upon completion of the Acquisition and the Offering, calculated on a fully diluted basis. Prior to the Acquisition, ESG was a shareholder of LEAF which when combined with the 50% additional shares issued as part of the Acquisition, the ESG shareholders will become the controlling party of LEAF. Accordingly, the transaction will be considered a “reverse takeover” transaction under the policies of the TSXV.

Offering

Prior to and as a condition of completing the Acquisition, LEAF intends to offer subscription receipts ("Subscription Receipts") for gross proceeds of $54 million. The Subscription Receipts will be offered at a price to be determined by LEAF and the Agents, but subject to a minimum offering price of $0.22 per Subscription Receipt. The proceeds of the Offering will be primarily used to fund in part the Transaction, certain costs related to the Transaction and for general corporate purposes.

The Subscription Receipts will be governed by a subscription receipt agreement to be entered into among LEAF, its agents with respect to the Offering, and an escrow agent mutually acceptable to them (the "Subscription Receipt Agreement"). Pursuant to the Subscription Receipt Agreement, the proceeds of the Offering, less amounts payable by LEAF to its agents with respect to the Offering, will be held in escrow by aforementioned escrow agent. If certain release conditions to be listed under the Subscription Receipt Agreement ("Release Conditions") are satisfied or waived in accordance with the Subscription Receipt Agreement prior to the occurrence of any termination event listed under the Subscription Receipt Agreement (a "Termination Event"), the escrowed proceeds will be released to LEAF, and one common share of LEAF Share will be issued to holders of Subscription Receipts in exchange for each Subscription Receipt held.

If a Termination Event occurs prior to the Release Events being satisfied or waived, the holders of the Subscription Receipts will receive notice of same and will be entitled to a refund of the original subscription price of each Subscription Receipt held by them, as well as any interest accruing on the escrowed Offering proceeds, less applicable

Leaf Mobile Inc. Notes to the Pro Forma Consolidated Financial Statements (Unaudited - Expressed in Canadian dollars)

withholding tax. The escrowed Offering proceeds will be applied towards payment of such amounts, and LEAF will be responsible for any shortfall.

2. Basis of presentation

These unaudited pro forma consolidated financial statements have been prepared by management for illustrative purposes only to show the effect of the Transaction and Offering described in Note 1. The unaudited pro forma financial statements have been prepared as if the Transaction and Offering had occurred on January 1, 2019 for the purposes of the unaudited pro form consolidated statement of income and comprehensive income for the year ended December 31, 2019, and the unaudited pro forma consolidated interim statement of income and comprehensive income for the six months ended June 30, 2020. The unaudited pro forma statement of financial position as at June 30, 2020 has been prepared as if the Transaction and Offering had occurred as of June 30, 2020.

For the year ending December 31, 2019, LDRLY (Technologies) Ltd. (“LDRLY”) was a wholly owned subsidiary of ESG. LDRLY was acquired by Caprice Business Development Canada Inc. (“Caprice”) on April 17, 2020 as part of a Qualifying Transaction. The result of the Qualifying Transaction was the formation of LEAF. Accordingly, the unaudited pro forma financial statements have been compiled based on the following:

Unaudited consolidated pro forma statement of income and comprehensive income for the year ended December 31, 2019:
Audited consolidated financial statements of ESG for the year ended December 31, 2019, which includes the operations of LDRLY; and
Audited financial statements of Caprice for the year ended December 31, 2019.
Unaudited consolidated pro forma statement of income and comprehensive income for the six months ended June 30, 2020:
Unaudited condensed consolidated interim financial statements of ESG for the six months ended June 30, 2020, which includes the operations of LDRLY up to April 17, 2020; and
Unaudited condensed consolidated interim financial statements of LEAF for the six months ended June 30, 2020, which includes the operations of LDRLY from April 17, 2020.
Unaudited consolidated pro forma statement of financial position as at June 30, 2020:
Unaudited condensed consolidated interim financial statements of ESG for the six months ended June 30, 2020; and
Unaudited condensed consolidated interim financial statements of LEAF for the six months ended June 30, 2020.

The unaudited pro forma consolidated financial statements are not intended to reflect the financial position or performance of the Company which would have actually resulted had the proposed Transaction and Offering described in Note 1 and other pro forma adjustments occurred as assumed. Further, these unaudited pro forma consolidated financial statements are not necessarily indicative of the financial position or performance that may be attained in the future. Any potential synergies that may be realized and integration costs that may be incurred upon completion of the Transaction have been excluded from the pro forma information. The unaudited pro forma consolidated financial statements should be read in conjunction with the financial information referred to above.

3. Summary of significant accounting policies

The audited pro forma consolidated financial statements have been compiled using the significant accounting policies as set out in the audited financial statement of the Company for the year ended December 31, 2019. While management believes that the significant accounting policies of LEAF and ESG are consistent in all material respects, accounting policy differences may be identified until the time that the financial reporting process of LEAF and ESG are integrated.

Leaf Mobile Inc. Notes to the Pro Forma Consolidated Financial Statements (Unaudited - Expressed in Canadian dollars)

4. Pro forma assumptions and adjustments

The unaudited pro forma consolidated financial statements give effect to the following assumptions and adjustments:

a) Prior to the completion of the Transaction LEAF underwent an Offering to raise $54,000,000. Based on this, the following assumptions and adjustments were made:
i. Cash and share capital were increased by $54,000,000 to account for the cash raised.
ii. Cash and share capital were decreased by $3,240,000 to account for the estimated Agent fees.
b) The completion of the acquisition of ESG by LEAF in accordance with the Agreement. The unaudited pro forma consolidated financial information includes various assumptions, including those related to the pro forma purchase price allocation of the assets acquired and liabilities assumed of LEAF by ESG, as a result of the reverse takeover transaction, based on management’s best estimates of fair value. The final purchase price allocation may vary based on the final valuations and analyses of the fair value of the acquired assets and assumed liabilities. Accordingly, the unaudited pro forma adjustments are preliminary and have been made solely for illustrative purposes.
i. Following the transaction described in Note 1, the shareholders of ESG will control LEAF and for accounting purposes ESG will be deemed the acquirer. The Transaction will be accounted for in accordance with IFRS 3 Business Combinations (“IFRS 3”), as the operations of LEAF constitute a business. The assets and liabilities of LEAF will be included in the consolidated statement of financial position at fair value, which approximates their pre-combination carrying values. The shareholder’s equity, including the deficit and net proceeds from shares issued during the Offering, of LEAF will be eliminated.
ii. To determine the estimated purchase price of LEAF as part of the reverse takeover, the Company relied upon the agreed upon value of ESG and applied its relative value to this figure. To determine the Company’s relative value the Company used the total estimated shares being held by the LEAF shareholders compared with the total estimated shares being held by the ESG shareholders at the completion of the Transaction, being 43%. Using this methodology, the following purchase price has been determined:

been determined:
Market value of ESG based on transaction:
Cash	$50,000,000
50% of outstandingLEAF shares	$100,000,000
Estimated net working capital adjustment (1)	$10,446,696
Estimated value of ESG	$160,446,696

Estimated market value of LEAF:
Estimated value of ESG	$160,446,696
Leaf value relative to ESG	43%
Estimatedpurchaseprice of LEAF	$68,992,079

(1) Calculated as the June 30[th] net working capital as reported adjusted for the expected

cash dividend and cash proceeds from options exercised.

The following represents the effect of the purchase accounting based on a pro forma allocation of the purchase price of LEAF to the acquired identifiable assets and assumed liabilities based on their fair values as of June 30, 2020:

Leaf Mobile Inc. Notes to the Pro Forma Consolidated Financial Statements (Unaudited - Expressed in Canadian dollars)

	Fair Values
Fair value of identifiable net assets:
Cash (1)	$ 5,511,927
Trade and other receivables	4,264,315
Prepaid expenses and other assets	575,751
Right‐of‐use asset, net	591,962
Property and equipment, net	35,246
Intangible assets, net	4,468,401
Accounts payable and accrued liabilities	(4,777,325)
Income taxes	(6,558)
Current portion of lease liability	(41,684)
Fair value of identifiable net assets	10,611,035
Unallocated purchase price (2)	58,370,044
	$ 68,992,079

1) Includes cash as reported at June 30, 2020 plus the remaining proceeds from the Offering of $760,000.
2) The unallocated purchase price, comprised of intangibles and goodwill, represents the unidentifiable net assets of LEAF, measured as the difference between the fair value of the identifiable net assets of LEAF and the fair value of the consideration.
c) Cash and net income were reduced by $500,000 to account for the estimated closing expenses related to the Transaction.
d) The following assumptions and adjustments were made to account for pre-closing transactions of ESG and LEAF:
i. The dividend in-kind of its 55,187,500 shares of LEAF to the ESG shareholders at a value of $12,417,188, based on the estimated fair market value of the shares. Transaction resulted in a decrease of long-term investments of $4,415,000, an increase to income taxes payable of $800,219 and a decrease to retained earnings of $5,215,219.
ii. The cash dividend to pay out its capital dividend account balance of $4,001,094 to the shareholders of ESG. Transaction resulted in a decrease to cash and retained earnings of $4,001,094.
iii. Prior to the Transaction the preferred shares were redeemed for their face value of $1,749,166 sparking a dividend of $1,439,012 and a note payable to the holder of $1,749,166. The note payable was then offset against a note receivable owed to ESG by the preferred share holder of $1,749,166.
iv. The exercising of all outstanding ESG options for total proceeds of $2,477,820. This resulted in an increase to cash and share capital of $2,477,820.
v. The elimination of trade receivables and payables between ESG and LEAF of $4,111,148. This resulted in a decrease to trade receivables and payables of $4,111,148.
vi. Consulting fees of $960,486 will be paid by issuing shares in LEAF related to consulting work done on the Offering and the Transaction. This resulted in an increase to share capital to administrative expenses and a reduction to retained earnings of $960,486. This adjustment to retained earnings and share capital was subsequently removed as part of the elimination of LEAF’s equity as noted in 4(b)(i).
vii. Prior to the transaction 110,000 options of LEAF were exercised for total proceeds of $11,000. This resulted in an increase to cash and share capital. The adjustment to share capital was subsequently removed as part of the elimination of LEAF’s equity as noted in 4(b)(i).

Leaf Mobile Inc. Notes to the Pro Forma Consolidated Financial Statements (Unaudited - Expressed in Canadian dollars)

e) The following assumptions and adjustments were made to account for intercompany fees and expenses between ESG and LEAF:
i. The elimination of $4,725,415 in profit sharing and royalties charged by ESG to LDRLY during the year ended December 31, 2019.
ii. The elimination of $8,520,381 in profit sharing and royalties charged by ESG to LDRLY during the sixmonth period ending June 30, 2020. This resulted in a reduction of $4,831,362 to cost of sales and $3,689,019 to selling and distribution expenses.

5. Pro forma share capital

(a) The following table summarizes the pro-forma share capital post the Transaction with the ending estimated outstanding common shares being that of LEAF, the legal acquirer. Please note that the estimated common shares issued pursuant to the Offering and the Transaction are calculated assuming the Offering is completed at a price of $0.22 per Subscription Receipt:

Common shares Common share of ESG outstanding as at June 30, 2020 Adjusted for: Issuance of ESG common shares for options exercised Adjustment to share capital of legal acquirer Common shares of LEAF outstanding as at June 30, 2020 Issuance of LEAF common shares for options exercised Estimated common shares issued pursuant to the Offering, net of issuance costs (1) Estimated common shares issued related to consulting fees Estimated common shares issued pursuant to the Transaction Elimination of LEAF Equity Estimated common shares outstanding (LEAF) 10:1 rollback of common shares post the Transaction (1) The number of shares issued under the offering assumes the minimum offering price of $0.22/share Preferred Shares Preferred shares of ESG outstanding at December 31, 2019 Preferred shares transferred to common shares Preferred shares outstanding (LEAF & ESG)	Number 4,632,279 342,601 (4,974,880) 213,331,250 110,000 259,090,909 4,365,844 498,950,956 -	Amount ($) 1,042,336 2,477,820 - 10,380,323 11,000 50,760,000 960.486 68,992,079 (62,111,809)
	975,848,958	72,512,235
	97,584,896	72,512,235
	Number 783,145 (783,145)	Amount ($) 310,154 (310,154)
	-	-

Leaf Mobile Inc. Notes to the Pro Forma Consolidated Financial Statements (Unaudited - Expressed in Canadian dollars)

(b) The weighted average shares outstanding for LEAF have been adjusted to reflect the additional shares resulting from the Offering and Transaction noted in note 1.

(b) The weighted average shares outstanding for LEAF have been adjusted to resulting from the Offering and Transaction noted in note 1.	reflect the additional shares
	June 30, 2020
Pro forma net income for the period	$5,085,168
Weighted average number of shares	212,760,500
Adjustment for estimated number of shares to be issued for acquisition	763,088,458
Pro forma weighted average number of shares-basic and diluted	975,848,958
Pro forma weighted average number of shares post rollback–basic and diluted	97,584,896
Pro forma basic and diluted incomeper share	0.05
	December 31, 2019
Pro forma net income for the year	$2,671,145
Weighted average number of shares	129,762,500
Adjustment for estimated number of shares to be issued for acquisition	763,088,458
Pro forma weighted average number of shares-basic and diluted	892,850,958
Pro forma basic and diluted lossper share	0.00

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APPENDIX H FAIRNESS OPINION

9537694.1

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October 31, 2020

Leaf Mobile Inc. 1055 West Georgia Street, Suite 2080 Vancouver, British Columbia V6E 3R5

To the Board of Directors:

Haywood Securities Inc. (“ Haywood” ) understands that Leaf Mobile Inc. (“ Leaf ”) has entered into a letter of intent (the “ LOI ”) with East Side Games (“ East Side ”), dated October 6, 2020, pursuant to which Leaf will acquire all the securities of the Target (the “ Transaction ”) for an approximate aggregate $150 million value (the “ Consideration ”). The Consideration will be comprised of $50 million in cash and that number of Leaf’s common shares that will represent 50% of the issued and outstanding shares of Leaf on closing of the Transaction.

The Transaction

The terms of, and conditions necessary to complete, the Transaction are set forth in a Share Purchase Agreement dated October 31, 2020 (the “ Agreement ”) and will be described in a management information circular (the “ Circular ”) to be mailed to the shareholders of Leaf (the “ Leaf Shareholders ”) in connection with the special meeting of Leaf Shareholders to consider, among other matters, and, if deemed advisable, to approve the Transaction.

The board of directors of Leaf (the “ Board ”) has retained Haywood to provide financial advice in connection with the Transaction and to prepare and render an opinion (this “ Fairness Opinion ”) as to the fairness of the Consideration, from a financial point of view, to Leaf. Haywood has not prepared a “formal valuation” (within the meaning of MI 61-101) of Leaf or East Side or any of their subsidiaries and assets, and this Fairness Opinion should not be construed as such.

Head Office – Vancouver

Suite 700 Waterfront Center 200 Burrard Street Vancouver, BC V6C 3L6

Phone: (604) 697-7100 Facsimile: (604) 697-7499 Toll-Free: (800) 663-9499

Calgary

808 First Street SW, Suite 301 Calgary, AB T2P 1M9

Phone: (403) 509-1900 Facsimile: (403) 509-1999 Toll-Free: (877) 604-0044

Toronto

Brookfield Place, 181 Bay Street Suite 2910, PO Box 808 Toronto, ON M5J 2T3

Phone: (416) 507-2300 Facsimile: (416) 507-2399 Toll-Free: (866) 615-2225

Engagement

Pursuant to a letter agreement dated October 23, 2020 (the “ Engagement Agreement ”), Leaf engaged Haywood to render an opinion as to the fairness of the Consideration, from a financial point of view, to Leaf.

Following its review of the terms of the Transaction, Haywood rendered its verbal opinion to the Board as to the fairness of the Consideration, from a financial point of view, to Leaf, subject to completion of satisfactory due diligence. This Fairness Opinion confirms the verbal opinion rendered by Haywood to the Board on October 29, 2020. The data used for Haywood’s analyses in the verbal opinion and in this Fairness Opinion is as of October 26, 2020.

The terms of the Engagement Agreement provide that Haywood is to be paid a fixed fee for the delivery of the Fairness Opinion, no portion of which is conditional upon this Fairness Opinion being favourable. Leaf has also agreed to reimburse Haywood for its reasonable out-of-pocket expenses whether or not the Transaction is completed and to indemnify Haywood, its affiliates, and their respective directors, officers, employees, agents and controlling persons, against certain losses, claims, damages and liabilities which may arise directly or indirectly from services performed by Haywood in connection with its engagement.

Independence of Haywood

Neither Haywood, nor any of its affiliates, is an insider, associate or affiliate of any of East Side or Leaf or any of their respective associates or affiliates. Haywood acted as Leaf’s lead agent for its initial public offering in 2019 and also received compensation under its non-brokered private placement amounting to a cash finder's fee of $66,000, and 412,500 broker's warrants in connection with the completion of Leaf’s qualifying transaction on April 17, 2020.

Haywood acts as a trader and dealer, both as principal and agent, in major financial markets and, as such, has and may in the future have positions in the securities of Leaf, East Side or any of their respective associates or affiliates and, from time to time, may have executed or may execute transactions on behalf of such companies or clients for which it received or may receive compensation. As of the date of this Fairness Opinion, Haywood’s clients and members of its pro group hold an aggregate 37,911,635 shares of Leaf. In the ordinary course of trading and brokerage activities, Haywood, the associates and affiliates thereof and the officers, directors and employees of any of them at any time may hold long or short positions, may trade or otherwise effect transactions, for their own account, for managed accounts or for the accounts of customers, in debt or equity securities of Leaf, East Side or related assets or derivative securities. As an investment dealer, Haywood conducts research on securities and may, in the ordinary course of its business, provide research reports and investment advice to its clients on investment matters, including with respect to Leaf, East Side or with respect to the Transaction.

Credentials of Haywood

Haywood is one of Canada's leading independent investment dealers with operations in corporate finance, equity sales and trading and investment research. Haywood is a participating organization of the Toronto Stock Exchange and the TSX Venture Exchange and a member of the Investment Industry Regulatory Organization of Canada (“ IIROC ”) and the Canadian Investor Protection Fund. The opinion expressed herein is the opinion of Haywood, and the individuals primarily responsible for preparing this Fairness Opinion are professionals of Haywood experienced in merger, acquisition, divestiture and fairness opinion matters and have an understanding of the marketable securities involved in the Transaction. Fairness

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opinions prepared by Haywood, including this Fairness Opinion, are subject to internal oversight and review before they are issued.

Scope of Review and Approach to Analysis

In connection with rendering this Fairness Opinion, Haywood has reviewed and relied upon, or carried out, among other things, the following:

(a) the Agreement dated October 31, 2020;
(b) Minute Book for East Side;
(c) Minute Book for Leaf;
(d) the audited financial statements of East Side dated December 31, 2017, 2018 and 2019;
(e) the interim financial statements of East Side for the seven month period ended July 31, 2020;
(f) the interim financial statements for Leaf for the interim periods ended March 31, 2020 and June 30, 2020;
(g) financial forecasts for East Side provided by East Side, and subsequent discussions with management of Leaf and East Side regarding these projections;
(h) public information relating to the business, financial condition and trading history of Leaf and other select public companies Haywood considered relevant;
(i) certain historical financial information and operating data concerning East Side;
(j) certain projected financial information for Leaf, including without limitation, budgets, financial forecasts and internal operational models, which were prepared and provided by Leaf and its advisors;
(k) the financial results of East Side and compared them with publicly available financial data concerning certain publicly traded companies that Haywood deemed to be relevant for the purposes of its analysis (sources: Capital IQ);
(l) where applicable, compared the consideration to be paid by Leaf to the value per common share of Leaf implied by analyses of market multiples of comparable companies;
(m) certain industry and analyst reports and statistics that Haywood deemed relevant for the purposes of its analysis;
(n) certain other internal information prepared for and by East Side;
(o) meetings with Leaf’s management to understand relevant aspects of the business and the outlook for the near and mid-future that will impact East Side;
(p) the draft Circular provided by Leaf;

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4 -
(q) certificates addressed to Haywood, dated October 29, 2020 and October 31, 2020, from two senior officers of Leaf and East Side as to the completeness and accuracy of the Information (as defined below);
(r) publicly available financial documents on relevant comparable companies in the sector (source: company filings); and
(s) considered such other financial, market, technical and industry information, and conducted such other investigations, analyses and discussions (including discussions with senior management of Leaf) as Haywood considered relevant and appropriate in the circumstances.

In its assessment, Haywood considered several techniques which involved a number of quantitative and qualitative factors, and used a blended approach to determine its opinion on the Transaction.

Haywood has not, to the best of its knowledge, been denied access by East Side or Leaf to any information under its control requested by Haywood. Haywood did not meet with the auditors of Leaf or East Side and has assumed the accuracy and fair presentation of and relied upon the audited financial statements of Leaf and East Side and the reports of the auditor thereon.

Assumptions and Limitations

With the approval and agreement of the Board and as provided for in the Engagement Agreement, and subject to the exercise of its professional judgement, Haywood has relied upon and assumed the completeness, accuracy and fair presentation of all financial information, business plans, financial analyses, forecasts and other information, data, advice, opinions and representations (collectively referred to as the “ Information ”) obtained by Haywood from public sources, or provided to Haywood by East Side and Leaf, their respective subsidiaries, directors, officers, associates, affiliates, consultants, advisors and representatives relating to East Side, Leaf, their respective subsidiaries, associates and affiliates, and to the Transaction. This Fairness Opinion is conditional upon such completeness, accuracy and fair presentation of the Information. Haywood has not been requested to or, subject to the exercise of professional judgment, attempted to verify independently the completeness, accuracy or fair presentation of any of the Information and assumes no responsibility or liability in connection therewith. Haywood has not conducted or been provided with any “formal valuation” (within the meaning of MI 61-101) or appraisal of any assets or liabilities, nor has it evaluated the solvency of East Side or Leaf under any provincial or federal laws relating to bankruptcy, insolvency or similar matters. Haywood has not had the benefit of reviewing any third party economic assessment on the assets of East Side or Leaf, and expresses no opinion as to the results of any future economic assessment that may be released prior to or following completion of the Transaction or the market reaction to the results of such economic assessment. The technical due diligence conducted by Haywood was limited in scope and Haywood has relied heavily on the experience and representations of management of Leaf and East Side.

Each of Leaf and East Side has represented to Haywood in certificates of two senior officers dated October 29, 2020, and October 31, 2020, among other things, that the Information provided to Haywood, including the written information and discussions concerning Leaf and East Side, as applicable, referred to above under the heading “Scope of Review and Approach to Analysis”, is complete and correct at the date the Information was provided to Haywood and that, since the date on which the Information was provided to Haywood, there has been no material change, financial or otherwise, in the financial condition, assets, liabilities (contingent or otherwise), business, operations or prospects of Leaf or any of its affiliates and no

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material change has occurred in the Information or any part thereof which would have or which would reasonably be expected to have a material effect on this Fairness Opinion. Haywood has relied on the representations and warranties of East Side as set out in the Agreement and assumes that such representations and warranties are complete and correct at the date of this Fairness Opinion and that there has been no material change, financial or otherwise, in the financial condition, assets, liabilities (contingent or otherwise), business, operations or prospects of East Side or its affiliates which would have or which would reasonably be expected to have a material effect on this Fairness Opinion.

With respect to any financial analyses, forecasts, projections, estimates and/or budgets provided to Haywood and used in its analyses, Haywood notes that projecting future results of any company is inherently subject to uncertainty. Haywood has assumed, however, that such financial analyses, forecasts, projections, estimates and/or budgets were prepared using the assumptions identified therein and that such assumptions reflect the best currently available estimates and judgments by management as to the expected future results of operations and financial condition of each of East Side and Leaf. Haywood expresses no view as to such financial analyses, forecasts, projections, estimates and/or budgets or the assumptions on which they were based.

In preparing this Fairness Opinion, Haywood has made several assumptions, including that all of the representations and warranties contained in the Agreement are correct as of the date hereof, all of the conditions required to complete the Transaction will be met, the Transaction will be completed substantially in accordance with its terms and all applicable laws, and that the disclosure provided in the Circular with respect to East Side, Leaf, and their respective subsidiaries and affiliates and the Transaction will be accurate in all material respects.

Haywood has relied as to all legal matters relevant to rendering this Fairness Opinion upon the advice of its own counsel. Haywood has further assumed that all material governmental, regulatory or other consents and approvals necessary for the consummation of the Transaction will be obtained without any adverse effect on East Side or Leaf or on the contemplated benefits of the Transaction.

Haywood is not a legal, tax or accounting expert and expresses no opinion concerning any legal, tax or accounting matters concerning the Transaction or the sufficiency of this letter for your purposes.

This Fairness Opinion is rendered as at the date hereof and on the basis of securities markets, economic and general business and financial conditions prevailing, and the Information as at October 26, 2020 and the conditions and prospects, financial and otherwise, of East Side or Leaf as they are reflected in the Information provided by East Side and Leaf, and as was represented to Haywood in its discussions with the management of Leaf, and certain of their respective consultants, advisors and representatives. It should be understood that subsequent developments may affect this Fairness Opinion and that Haywood does not have any obligation to update, revise or reaffirm this Fairness Opinion. Haywood is expressing no opinion herein as to the price at which the current shares of Leaf will trade at any future time. In Haywood’s analyses and in connection with the preparation of this Fairness Opinion, Haywood made numerous assumptions with respect to industry performance, general business, market and economic conditions and other matters, many of which are beyond the control of Haywood and any party involved in the Transaction.

Haywood has not been asked to prepare and has not prepared a “formal valuation” (within the meaning of MI 61-101) of East Side or Leaf or any of the securities or assets thereof and this Fairness Opinion should not be construed as a “formal valuation” (within the meaning of MI 61-101).

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This Fairness Opinion is provided for the use of the Board only and may not be disclosed, referred or communicated to, or relied upon by, any third party without Haywood’s prior written approval. Haywood consents to the inclusion of this Fairness Opinion in the Circular. Haywood disclaims any undertaking or obligation to advise any person of any change in any fact or matter affecting this Fairness Opinion that may come or be brought to the attention of Haywood after the date hereof. Without limiting the foregoing, in the event that there is any material change in any fact or matter affecting this Fairness Opinion after the date hereof, Haywood reserves the right to change, modify or withdraw this Fairness Opinion.

Haywood believes that its analyses must be considered as a whole and that selecting portions of the analyses or the factors considered by it, without considering all factors and analyses together, could create a misleading view of the process underlying this Fairness Opinion. The preparation of an opinion is a complex process and is not necessarily amenable to partial analysis or summary description. Any attempt to do so could lead to undue emphasis on any particular factor or analysis.

This Fairness Opinion has been prepared in accordance with the Disclosure Standards for Formal Valuations and Fairness Opinions of IIROC, but IIROC has not been involved in the preparation or review of this Fairness Opinion.

Fairness Conclusion

Based on and subject to the foregoing and such other factors as Haywood considered relevant, Haywood is of the opinion that, as of the date hereof, the Consideration is fair, from a financial point of view, to Leaf.

Yours truly,

HAYWOOD SECURITIES INC.

“Haywood Securities Inc.”

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110 -

CERTIFICATE OF LEAF

The foregoing document constitutes full, true, and plain disclosure of all material facts relating to the securities of LEAF, assuming completion of the Acquisition and Offering.

Dated November 4, 2020

"Darcy Taylor" "Mark Leung" Darcy Taylor Mark Leung Chief Executive Officer Chief Financial Officer

ON BEHALF OF THE BOARD

"Derek Lew" "Mark Rutledge" Derek Lew Mark Rutledge Director Director

9537694.1

AI assistant

East Side Games Group Inc. — Proxy Solicitation & Information Statement 2020

47766_rns_2020-11-06_a8898822-8f90-4436-b8a7-dbaba82e95da.pdf

NOTICE OF SPECIAL MEETING OF THE SHAREHOLDERS OF LEAF MOBILE INC.

MANAGEMENT PROXY INFORMATION CIRCULAR

DATED AS OF NOVEMBER 4, 2020

TABLE OF CONTENTS

LEAF MOBILE INC.

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

LEAF MOBILE INC.

GLOSSARY OF TERMS

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

DOCUMENTS INCORPORATED BY REFERENCE

SUMMARY

The Companies

LEAF & LDRLY

EastSide Games

The Acquisition

The Offering

Interests of Certain Persons and Companies in Matters to be Acted On

Related Party Transaction

Board of Directors and Management

Consolidation

Fairness Opinion

Board Recommendations

Summary of Pro Forma Financial Information

Available Funds

Use of Available Funds

Stock Exchange Listing and Market Price of LEAF Shares

Risk Factors

Interest of Experts

Accompanying Documents

INFORMATION CIRCULAR

GENERAL PROXY INFORMATION

Solicitation of Proxies

Persons Making the Solicitation

Date of Information Circular

Revocability of Proxies

Exercise of Discretion by Proxy

Signing of Proxy

Advice to Beneficial Holders of LEAF Shares on Voting

Voting Securities and Principal Holders of Voting Securities

Votes Necessary to Pass Resolutions

THE ACQUISITION

Recommendation of the LEAF Board

Accordingly, the LEAF Board unanimously recommends that LEAF Shareholders vote FOR the Acquisition Resolution and the Consolidation Resolution.

Reasons for the Acquisition

Fairness Opinion

Principal Steps of the Acquisition

Conditions to the Acquisition

New Control Persons of the Resulting Issuer

Regulatory Approvals

Offering

Consolidation

Finder's Fee

Resolutions

SUMMARY OF THE ACQUISITION AGREEMENT

Adjustments to the Purchase Price & Escrow

Post-Closing Loan

Covenants

Covenants Regarding the Conduct of Business

Non-Solicitation

Representations and Warranties

Conditions Precedent

Mutual Conditions Precedent

Additional Conditions Precedent to LEAF's Obligations

Additional Conditions Precedent to the Obligations of ESG Securityholders

Termination

Indemnification

Governing Law

RISK FACTORS

Risks Associated with the Acquisition

There can be no certainty that all conditions precedent to the Acquisition will be satisfied.

Transaction Costs

Dilution

Potential Undisclosed Liabilities

Limited Indemnities

Information provided with respect to ESG

Risk Associated with the Resulting Issuer

Integration of the Combined Business

East Side Games Group Inc. Proxy Solicitation & Information Statement 2020