Gamehost Inc.

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Consolidated Financial Statements For the Year Ended December 31, 2020

Pivotal LLP #201, 33 McKenzie Crescent Red Deer County, Alberta T4S 2H4

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INDEPENDENT AUDITORS' REPORT

To the Shareholders of Gamehost Inc.:

Opinion

We have audited the accompanying consolidated financial statements of Gamehost Inc., which comprise the consolidated statements of financial position as at December 31, 2020 and December 31, 2019, the consolidated statements of profit and comprehensive profit, changes in equity and cash flows for the years then ended, and notes, including a summary of significant accounting policies.

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of Gamehost Inc. as at December 31, 2020 and December 31, 2019, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with International Financial Reporting Standards.

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 Auditors' Responsibilities for the Audit of the consolidated financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the 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.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we have not provided a separate opinion on these matters.

Goodwill and Intangibles Impairment Analysis – refer to Note 4(f), Note 4(i) ii), and Note 19.

The Company assesses goodwill and intangible asset impairment by comparing the recoverable amounts of its cash-generating units to their carrying values. The Company determined the recoverable amounts of the cash-generating units based on a value in use calculation. The value in use calculation uses discounted cash flow projections that employ the following key assumptions:

Future cash flows and growth projections;
Associated estimates and risk assumptions in the determination of future cash flows; and
Weighted average cost of capital.

Changes in these assumptions could have a significant impact on the value in use, the Company’s assessment of impairment of goodwill and intangible assets, or both. Given the significant judgments made by management, auditing the key assumptions required a high degree of auditor judgment.

How the Key Audit Matter Was Addressed in the Audit

Our audit procedures focused on the key assumptions made by the Company and included the following, among others:

Compared management’s historical cash flow projections to historical results;

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Pivotal LLP #201, 33 McKenzie Crescent Red Deer County, Alberta T4S 2H4

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Evaluated the reasonableness of management’s forecasts of future cash flows by comparing forecasts to:
Historical revenues;
Underlying analysis detailing growth plans and estimates; and
Communications with management and the board of directors;
Reviewed management’s sensitivity analysis of future cash flows for reasonableness; and
Evaluated the reasonableness of the discount rate.
.

Other Information

Management is responsible for the other information. The other information comprises the information included in the management discussion and analysis, but does not include the consolidated financial statements and our auditors’ report thereon.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

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

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards, 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.

Auditors' 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 auditors’ 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.

o piv talcpa.ca

p: 403.347.2226 tf: 1.877.347.2226 f: 403.343.6140 e: [email protected]

Pivotal LLP #201, 33 McKenzie Crescent Red Deer County, Alberta T4S 2H4

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We also:

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.
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.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
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 auditors’ report to the related disclosures in the 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 auditors' report. However, future events or conditions may cause the Company to cease to continue as a going concern.
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.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences or doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partner on the audit resulting in this independent auditors’ report is Devender Minhas.

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Red Deer County, Alberta March 11, 2021

Chartered Professional Accountants

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Consolidated Statements of Profit and Comprehensive Profit

In millions of Canadian dollars (Except per share figures) Notes Operating revenue 7 Cost of sales Other 8 Depreciation 17,18	*Audited* *Unaudited*
	twelve months ended December 31 three months ended December 31
	2020 2019 (Restated - Note 29) 2020 2019
	34.6 $ 68.0 $ 8.9 $ 17.2 $ (22.5) (38.6) (5.8) (9.9) (3.0) (3.2) (0.8) (0.8)
	(25.5) (41.8) (6.6) (10.7)
Gross profit Lease and other income 9 Administrative expenses Other 10 Depreciation 17,18	9.1 26.2 2.3 6.5 4.1 0.3 2.1 0.1 (2.3) (2.9) (0.6) (0.7) (1.1) (1.2) (0.3) (0.3)
	(3.4) (4.1) (0.9) (1.0)
Profit from operating activities Fair value adjustment 20 Net finance costs 11	9.8 22.4 3.5 5.6 (0.8) - (0.2) - (1.5) (2.1) (0.4) (0.5)
Profit before income taxes Income tax expense 12,29	7.5 20.3 2.9 5.1 (1.8) (4.0) (1.0) (1.1)
Profit and comprehensive profit	5.7 $ 16.3 $ 1.9 $ 4.0 $
Shareholders 29 Non-controllinginterest 29 Profit and comprehensive profit attributable to:	5.3 $ 15.3 $ 1.8 $ 3.7 $ 0.4 1.0 0.1 0.3
	5.7 $ 16.3 $ 1.9 $ 4.0 $
Earnings per share 13, 29 22 Basic and fully diluted Basic and fully diluted Weighted average number of common shares outstanding	0.22 $ 0.63 $ 0.08 $ 0.15 $ 23.8 24.3 23.4 24.3

The accompanying notes are an integral part of the consolidated financial statements.

Gamehost Inc.

Consolidated Statements of Financial Position

In millions of Canadian dollars Notes Assets Current Cash Restricted cash 14 Trade and other receivables 15 Inventories 16 Prepaid expenses Income tax receivable 12	*Audited* *Audited,* *Restated - Note 29* *Audited,* *Restated - Note 29*
	December 31, 2020 December 31, 2019 January 1, 2019
	10.3 $ 15.4 $ 15.8 $ 0.9 0.8 0.5 2.1 2.1 1.9 0.5 0.6 0.7 0.5 0.4 0.4 - 0.2 -
Property, plant and equipment 17 Right-of-use assets 18 a) Goodwill and intangible assets 19 Investmentproperty 20	14.3 19.5 19.3 71.2 72.3 69.7 10.6 4.7 5.7 76.9 76.9 76.9 2.0 2.8 2.8
	175.0 $ 176.2 $ 174.4 $
Liabilities Current Trade and other payables Loans and borrowings 21 Lease liabilities 18 b) Income tax payable 12 Dividendspayable	2.4 $ 4.6 $ 3.8 $ 17.4 21.5 24.5 0.7 0.9 0.8 0.1 - 0.1 - 1.4 1.4
Loans and borrowings 21 Lease liabilities 18 b) Deferred tax liabilities 12,29	20.6 28.4 30.6 23.4 19.2 15.7 10.1 4.0 4.9 8.1 8.2 9.6
	62.2 59.8 55.9
Equity 22 Share capital Deficit 29	159.4 164.3 164.8 (53.3) (54.4) (52.9)
Equity attributable to Shareholders Non-controlling interest 29	106.1 109.9 111.9 6.7 6.5 6.6
	112.8 116.4 118.5
	175.0 $ 176.2 $ 174.4 $

The accompanying notes are an integral part of the consolidated financial statements.

Gamehost Inc.

Consolidated Statements of Changes in Equity

In millions of Canadian dollars Notes 29 29 22 22 Dividends to shareholders of the Company Distributions to non-controlling interest Shares repurchased for cancellation Equity as at January 1, 2019 (Restated) Profit and comprehensive profit (Restated)	*Audited*
	Share capital Deficit Total Non- controlling interest Total equity
	164.8 $ (52.9) $ 111.9 $ 6.6 $ 118.5 $ - 15.3 15.3 1.0 16.3 - (16.8) (16.8) - (16.8) - - - (1.1) (1.1) (0.5) - (0.5) - (0.5)
29 Equity as at December 31, 2019 (Restated)	164.3 $ (54.4) $ 109.9 $ 6.5 $ 116.4 $
22 22 Dividends to shareholders of the Company Distributions to non-controlling interest Shares repurchased for cancellation Profit and comprehensive profit Contributions from non-controlling interest	- 5.3 5.3 0.4 5.7 - (4.2) (4.2) - (4.2) - - - (0.4) (0.4) - - - 0.2 0.2 (4.9) - (4.9) - (4.9)
Equity as at December 31, 2020	159.4 $ (53.3) $ 106.1 $ 6.7 $ 112.8 $

The accompanying notes are an integral part of the consolidated financial statements.

Gamehost Inc.

Consolidated Statements of Cash Flows

In millions of Canadian dollars Notes 29 Adjustments for: 11 Fair value adjustment 20 Income tax expense 12,29 Operating activities Profit and comprehensive profit Depreciation of property, plant and equipment Finance costs Cash provided by (used in):	*Audited* *Unaudited*
	twelve months ended December 31 three months ended December 31
	2020 2019 (Restated - Note 29) 2020 2019
	5.7 $ 16.3 $ 1.9 $ 4.0 $ 4.1 4.4 1.1 1.1 1.5 2.2 0.4 0.5 0.8 - 0.2 - 1.8 4.0 1.0 1.1
Change in: Non-cash working capital: Trade and other receivables Inventories Prepaid expenses Trade and other payables Finance costs paid 11 Income taxespaid	13.9 26.9 4.6 6.7 (0.1) (0.2) (0.4) 0.3 0.1 0.1 0.1 - (0.1) - 0.1 0.3 (2.0) 0.1 (1.4) 0.3 (1.3) (2.2) (0.4) (0.6) (1.8) (5.3) (1.0) (1.2)
Net cash provided by (used in) operatingactivities	8.7 19.4 1.6 5.8
17 Investing activities Purchase of property, plant and equipment	(2.1) (0.4) (1.8) (0.1)
Net cash used in investing activities	(2.1) (0.4) (1.8) (0.1)
Proceeds of loans and borrowings 21 Payments on loans and borrowings 21 Payments on lease liabilities 18 Dividends paid 22 Share repurchases 22 Financing activities Distributions to non-controlling interest Contributions from non-controlling interest	13.5 1.3 5.3 - (13.4) (1.4) (8.8) 0.1 (1.1) (0.9) (0.5) (0.2) 0.2 - 0.2 - (0.4) (1.1) (0.2) (0.3) (5.6) (16.8) - (4.2) (4.9) (0.5) (1.2) (0.3)
Net cash used in financing activities	(11.7) (19.4) (5.2) (4.9)
Opening cash Net increase (decrease) in cash	(5.1) (0.4) (5.4) 0.8 15.4 15.8 15.7 14.6
Closing cash	10.3 $ 15.4 $ 10.3 $ 15.4 $

The accompanying notes are an integral part of the consolidated financial statements.

Gamehost Inc Notes to the Consolidated Financial Statements For the Years ended December 31, 2020 and 2019 (In millions of Canadian dollars, except share information)

1 REPORTING ENTITY

Gamehost Inc. (the “Company”) is a publicly listed company incorporated in Canada under the Business Corporations Act (Alberta). The Company's shares are listed on the Toronto Stock Exchange ("TSX") under the trading symbol "GH". The head office is located at 104 - 548 Laura Avenue, Red Deer Country, Alberta T4E 0A5. The registered office and location of records is located at 1400, 350 – 7th Avenue SW Calgary, Alberta T2P 3N9.

Gamehost Inc., its wholly owned subsidiary Gamehost Limited Partnership, and its 91% controlling interest in Deerfoot Inn & Casino Inc, collectively ("Gamehost") operates entirely in the province of Alberta. Operations include the Deerfoot Inn & Casino ("Deerfoot") in Calgary, Boomtown Casino ("Boomtown") in Fort McMurray, the Great Northern Casino ("Great Northern"), Service Plus Inns & Suites (“Service Plus”), and Encore Suites by Service Plus Inns ("Encore") all located in Grande Prairie.

The Company is also the owner of an investment property located adjacent to its operating properties in Grande Prairie.

Gaming operations of the Company are controlled by Alberta Gaming, Liquor and Cannabis Commission ("AGLC"), including Company owned table games and government owned slot machines, video lottery terminals ("VLT"), and lottery ticket kiosks. Hotel operations of the Company include full and limited service hotels, and banquet and convention services. Food, beverages and entertainment are offered at each of the Company’s casino locations.

2 BASIS OF PREPARATION

These Consolidated Financial Statements have been 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 Consolidated Financial Statements have been prepared on a going concern basis, under the historical cost convention, except for investment property in the statement of financial position, which is measured at fair value. The preparation of the Consolidated Financial Statements in conformity with IFRS requires management to make estimates, judgements, and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses, and disclosures of contingent assets and liabilities. Information about critical judgements in applying accounting policies that have the most significant effect on the amounts recognized in the Consolidated Financial Statements is included in Note 5.

Certain prior year amounts have been reclassified to conform with the presentation adopted in the current Year. Lease revenues are reported in lease and other income from operating revenue in the prior year. Right-of-use assets are reported independently from property, plant and equipment in the prior year. Lease liabilities are reported separately from loans and borrowings in the prior year.

These Consolidated Financial Statements were approved and authorized for issue by the Board of Directors on March 11, 2021.

3 CHANGES IN SIGNIFICANT ACCOUNTING POLICIES

Effective June 1, 2020, the Company has adopted the following polices and/or applied the following amended International Accounting Standards ("IAS") and IFRS issued by the IASB.

On 28 May 2020, the IASB published 'COVID-19-Related Rent Concessions (Amendment to IFRS 16)' amending the standard to provide lessees with an exemption from assessing whether a COVID-19-related rent concession is a lease modification. The amendment is effective for annual reporting periods beginning on or after 1 June 2020. The Company did not receive any COVID-19-Related Rent Concessions during the Year.

Gamehost Inc Notes to the Consolidated Financial Statements For the Years ended December 31, 2020 and 2019 (In millions of Canadian dollars, except share information)

4 SIGNIFICANT ACCOUNTING POLICIES

The accounting policies set out below have been applied consistently to all subsidiaries of the Company and to all periods presented in these Consolidated Financial Statements unless otherwise indicated.

(a) Basis of consolidation

i) Subsidiaries

Subsidiaries are entities controlled by the Company. The financial statements of the subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.

Losses applicable to the non-controlling interest in a subsidiary are allocated to the non-controlling interest even if doing so causes the non-controlling interest to have a deficit balance.

The accounting policies of subsidiaries have been changed when necessary to align them with policies adopted by the Company.

ii) Transactions eliminated on consolidation

Intra-company balances and transactions, and any unrealized income and expenses arising from intra-company transactions, are eliminated in preparing the consolidated financial statements.

4 SIGNIFICANT ACCOUNTING POLICIES (Continued)

(b) Financial instruments

The Company’s financial assets and liabilities are classified by category and method of measurement under IFRS 9.

Financial asset/liability	Classification under IAS 39	IAS 39 measurement	Measurement method
Cash	Loans and receivables	Amortized Cost	FVTPL
Trade and other receivables	Loans and receivables	Amortized Cost	Amortized Cost
Trade and other payables	Other financial liabilities	Amortized Cost	Amortized Cost
Loans and borrowings	Other financial liabilities	Amortized Cost	Amortized Cost

The Company has not recorded any expected credit losses ("ECL"). The Company's method for assessing, measuring and recording ECL is discussed in Financial risk and capital management[ [Note 26]] .

i) Non-derivative financial assets

The Company initially recognizes loans, receivables and deposits on the date that they are originated. All other financial assets are recognized initially on the trade date at which the Company becomes a party to the contractual provisions of the instrument. The Company derecognizes a financial asset when the contractual rights to the cash flows from the asset expire.

The Company classifies its non-derivative financial assets in the loans and receivables category. Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are recognized initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, loans and receivables are measured at amortized cost using the effective interest method, less any impairment losses.

Loans and receivables are comprised of cash and trade and other receivables inclusive of any ECL.

Gamehost Inc Notes to the Consolidated Financial Statements For the Years ended December 31, 2020 and 2019 (In millions of Canadian dollars, except share information)

4 SIGNIFICANT ACCOUNTING POLICIES (Continued)

ii) Non-derivative financial liabilities

The Company initially recognizes debt securities issued and subordinated liabilities on the date that they are originated. All other financial liabilities (including liabilities designated at fair value through profit or loss) are recognized initially on the trade date at which the Company becomes a party to the contractual provisions of the instrument.

The Company derecognizes a financial liability when its contractual obligations are discharged, cancelled or expired.

Other financial liabilities are initially recognized at fair value plus any directly attributable transaction costs. Subsequent to initial recognition these financial liabilities are measured at amortized cost using the effective interest method.

Other financial liabilities are comprised of loans and borrowings and trade and other payables.

Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Company has a legal right to offset the amounts and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously.

iii) Share capital

Common shares are classified as equity. Incremental costs directly attributable to the issue of common shares are recognized as a deduction from equity, net of any tax effects.

(c) Cash

Cash includes cash on hand and balances with financial institutions. Cash balances with financial institutions earn interest at a rate of bank prime less 1.75%.

(d) Inventories

Inventories are measured at the lower of cost or net realizable value. The cost of inventories is based on the first-in, firstout method and includes expenditures incurred in acquiring the inventories and other costs incurred in bringing them to their existing location and condition. Net realizable value is the estimated selling price in the ordinary course of business, less selling expenses.

(e) Property, plant and equipment

i) Recognition and measurement

Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses.

Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the assets to a working condition for their intended use, and borrowing costs on qualifying assets.

When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment, and are recognized as a net amount in profit or loss.

Gamehost Inc Notes to the Consolidated Financial Statements For the Years ended December 31, 2020 and 2019 (In millions of Canadian dollars, except share information)

4 SIGNIFICANT ACCOUNTING POLICIES (Continued)

ii) Subsequent costs

The cost of replacing a part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company, and its cost can be measured reliably. The carrying amount of the replaced part is derecognized. The costs of the day-to-day servicing of property, plant and equipment are recognized in profit or loss as incurred.

iii) Depreciation

Depreciation is the systematic allocation of the depreciable amount of an asset over its useful life. Depreciable amount is the cost of an asset, or other amount substituted for cost, less its residual value.

Depreciation is recognized in profit or loss on a declining or straight-line basis, over the estimated useful lives of each part of an item of property, plant and equipment, since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset.

The estimated useful lives for the current and comparative years are as follows:

Land Improvements 2% straight line Buildings 4% to 5% declining balance Building - carpet 20% straight line Leaseholds 5 to 10 years straight line Furniture, fixtures and equipment 20% to 100% declining balance

Depreciation methods, useful lives, and residual values are reviewed at each financial year end and adjusted if appropriate.

(f) Goodwill and intangible assets

Goodwill

Goodwill that arises upon the acquisition of subsidiaries is grouped with intangible assets. See[[Note][4(a)][i)]] for the policy on measurement of goodwill at initial recognition. Following initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is reviewed annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired, see[[Note 4(i) ii)]] .

Licenses

Licenses are issued by the AGLC and allow for the operation of government owned slot machines, VLT's and lottery ticket kiosks as well as private operator owned table games in private operator facilities. They are measured at cost less accumulated impairment losses. Licenses are renewable every six years for a nominal fee. The Company does not foresee a limit to the period over which the licenses are expected to generate cash inflows for the Company. Factors that support an indefinite life for licenses include: license holders are subject to rigorous diligence investigation at each license renewal; licenses come with a high cost of maintenance by holders in the form of extensive capital outlay for facilities and staff to support the daily operation of regulated games and equipment; licenses are not subject to competition and are not dependant on the useful life of other assets of the Company. There is not a single case of an Alberta licence being rescinded by the AGLC after being issued.

Gamehost Inc Notes to the Consolidated Financial Statements For the Years ended December 31, 2020 and 2019 (In millions of Canadian dollars, except share information)

4 SIGNIFICANT ACCOUNTING POLICIES (Continued)

(g) Investment property

Investment property is property held either to earn rental income or capital appreciation or both, but not for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes. The Company measures investment property at fair value with any change therein recognized in profit or loss.

When the use of a property changes such that it is reclassified as property, plant and equipment, the fair value at the date of reclassification becomes its cost for subsequent accounting.

(h) Leases

i) As a Lessee

The Company assesses whether a contract is, or contains a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

The Company elects not to recognize right-of-use assets and lease liabilities for identified assets of any class when the contract is short-term (less-than-or-equal-to twelve months) or when the identified asset is of low-value. Short-term and low-value leases consist primarily of small equipment and are recorded to cost of sales or administrative expenses on a straight-line basis over the lease term.

Right-of-use assets

The Company recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any payments made at or before the commencement date, plus any direct costs incurred and an estimate of any costs to dismantle, remove or restore any underlying asset, less any incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. Estimated useful lives of rightof-use assets are determined on the same basis as property, plant and equipment. Right-of-use assets may be periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The estimated useful life of right-of-use assets range from 2 to 5 years for equipment and 3 to 15 years for buildings amortized straight-line.

Lease liabilities

A lease liability is initially measured at the present value of the unpaid lease payments at commencement date, discounted using the interest rate implicit in the lease if it is readily available, otherwise the Company's incremental borrowing rate is used.

When a contract contains lease and non-lease components, the Company elects, by class, whether to apply the practical expedient of combining lease and non-lease components. At inception or on reassessment of a contract that contains a lease component, the Company separates non-lease components from lease components for building leases. Non-lease components typically include insurance, property tax and common area maintenance costs and are treated as operating expenses in the period payments are made. For equipment, the Company accounts for both lease and any non-lease components together and the combined amounts are recognized on a straight-line basis over the term of the lease.

Gamehost Inc Notes to the Consolidated Financial Statements For the Years ended December 31, 2020 and 2019 (In millions of Canadian dollars, except share information)

4 SIGNIFICANT ACCOUNTING POLICIES (Continued)

Lease payments included in the measurement of the lease liability may be comprised of fixed payments, residual value guarantees, any purchase options the Company is reasonably certain to exercise, lease payments for any renewal periods that are reasonably certain to be exercised or early termination penalties the Company is reasonably certain to incur.

Lease liabilities are remeasured when there is a change in the estimate of future lease payments resulting from a change in rates or underlying assumptions used in determining the previous amounts expected to be payable. The lease liability is measured at amortized cost using the effective interest rate method. Any resulting adjustment from remeasuring the lease liability is recorded to the carrying amount of the right-of-use asset, or if the carrying amount of the right-of-use asset is nil, then to profit and loss.

A lease modification is treated as a new lease when there has been a change to the scope of the previous lease that results in a change in the consideration paid. Where a lease modification is not the result of a change in scope the modification is treated as a remeasurement of the existing lease.

Lease payments that depend on performance measures or usage of the identified asset are considered variable lease payments. Variable lease payments are expensed in cost of sales in the period in which they are incurred.

ii) As a Lessor

When the Company is the lessor, it determines at inception whether the lease is an operating lease or a finance lease. The Company assesses whether the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset. When this is the case, the lease is a finance lease; when not, it is an operating lease. A key consideration in this assessment is whether the lease is for the majority portion of the economic life of the asset.

All of the Company's leases are operating leases and lease payments are recognized as they become due as income on a straight-line basis over the term of the lease.

(i) Impairment

i) Financial Assets (including loans and receivables)

In assessing collective impairment, the Company uses historical trends of the probability of default, timing of recoveries, and the amount of loss incurred, adjusted for management’s judgement as to whether current economic and credit conditions are such that the actual losses are likely to be greater or less than suggested by historical trends.

Loans and receivables are comprised of cash and trade, lease, loan and other receivables inclusive of ECL. Loans include non-material amounts owed by tenants for tenant improvements and any arrears. Lease payments are due in advance. A significant portion of the Company's trade, lease, loan and other receivables are considered to have negligible credit risk. Other receivable amounts include government subsidies and gaming funds or automated teller machine ("ATM") funds that are systematically deposited to the Company's bank accounts by AGLC or our white label ATM transaction processor, respectively, within 30 days of the date they become due. Trade receivable amounts are mostly aged corporate accounts that relate to hotel stays and or banquets.

The Company used the simplified approach in determining a lifetime ECL based on historical losses over the trailing 10 year period. A provision matrix was established which considers the types or groups of receivables when applying factors for calculating lifetime ECL. Factors are adjusted annually in the determination of lifetime ECL based on management's assessment of changes in economic conditions that may have increased the risk of impairment. The Company mitigates such risk by increasing due diligence for new credit accounts and increasing the frequency of communication with clients. Lifetime ECL amounts for the company are not material and no allowance has been recorded. Lease receivables are considered low risk[[Note 26]] .

Gamehost Inc Notes to the Consolidated Financial Statements For the Years ended December 31, 2020 and 2019 (In millions of Canadian dollars, except share information)

4 SIGNIFICANT ACCOUNTING POLICIES (Continued)

The Company's write-off policy requires objective evidence that there is no reasonable expectation of recovery in the form of bankruptcy notice or a complete cessation of communication from the customer.

ii) Non-financial assets

The carrying amounts of the Company’s non-financial assets, other than inventories and deferred tax assets are reviewed at each reporting date to determine whether there are any indicators of impairment. If any such indicators exist, then the asset’s recoverable amount is estimated. For goodwill and intangible assets that have indefinite useful lives, the recoverable amount is estimated each year at the same time or more frequently if indicators of impairment exist.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. 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 the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the “cash-generating unit", or "CGU”). For the purposes of goodwill impairment testing, goodwill acquired in a business combination is allocated to the CGU, or the group of CGUs, that is expected to benefit from the synergies of the combination. This allocation is subject to an operating segment ceiling test and reflects the lowest level at which goodwill is monitored for internal reporting purposes[ [Note 19]] .

The Company’s corporate assets do not generate separate cash inflows and are utilized by more than one CGU. Corporate assets are allocated to CGUs on a reasonable and consistent basis and tested for impairment as part of the testing of the CGU to which the corporate asset is allocated.

An impairment loss is recognized if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount. Impairment losses are recognized in profit or loss. Impairment losses recognized in respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the CGU (or group of CGUs), and then to reduce the carrying amounts of the other assets in the CGU (or group of CGUs) on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognized in prior periods are assessed at each reporting date for any indicators that the loss has decreased or no longer exists. An impairment loss is reversed if 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.

iii) Investment property

Investment property is measured at fair value. Fair value is the price that would be received to sell an asset, or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Gamehost Inc Notes to the Consolidated Financial Statements For the Years ended December 31, 2020 and 2019 (In millions of Canadian dollars, except share information)

4 SIGNIFICANT ACCOUNTING POLICIES (Continued)

iv) Fair value hierarchy

The fair value hierarchy categorizes into three levels the inputs to valuation techniques used to measure fair value. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1 inputs), and the lowest priority to unobservable inputs (Level 3 inputs).

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.
Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly such as derived from prices.
Level 3 inputs are unobservable inputs for the asset or liability.

(j) Income taxes

Income tax expense is comprised of current income tax and deferred income tax. Current income tax and deferred income tax are recognized in profit or loss except to the extent that it relates to a business combination, or items recognized directly in equity or in other comprehensive income.

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

Deferred income tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes, and the amounts used for taxation purposes. Deferred income tax is not recognized for the following temporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss, and differences relating to investments in subsidiaries and jointly controlled entities to the extent that it is probable that they will not reverse in the foreseeable future. In addition, deferred income tax is not recognized for taxable temporary differences arising on the initial recognition of goodwill. Deferred income tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity. Deferred tax assets and liabilities may also be offset when they relate to different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.

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

Gamehost Inc Notes to the Consolidated Financial Statements For the Years ended December 31, 2020 and 2019 (In millions of Canadian dollars, except share information)

4 SIGNIFICANT ACCOUNTING POLICIES (Continued)

(k) Employee benefits

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognized as an employee benefit expense in profit or loss in the year during which services are rendered by employees. The Canada Pension Plan corresponds to a defined contribution plan.

Contributions to a health spending plan are expensed in the period in which contributions are made.

A liability is recognized for the amount expected to be paid under short term cash bonus if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated reliably.

(I) Revenue recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received. The Company assesses its revenue arrangements against specific criteria in order to determine if it is acting as the principal or agent.

For contracts with customers, a five step model is utilized to achieve the core revenue recognition principle: (1) identify the contract(s) with customers; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the obligations in the contract; and (5) recognize revenue when, or as, the Company satisfies a performance obligation.

The following specific recognition criteria must also be met before revenue is recognized:

i) Gaming operations

The Company has various retailer agreements with AGLC, which do not meet the definition of a contract with a customer as prescribed by IFRS 15. Patrons participating in gameplay are wagering with the AGLC. Terms and conditions of the AGLC retailer agreements are dictated solely by AGLC, which include what, when and how the Company must meet its obligations to be entitled to share in gaming wins net of prizes paid. The Company's significant obligations include providing facilities, utilities and insurance to house and for the safe operation of AGLC equipment, providing staff to support gameplay, and providing cash floats to facilitate gameplay and the payout of prizes won.

Revenues from gaming operations consist of the Company’s share of gaming wins net of prizes paid, which are set by the AGLC at its sole discretion, and are recognized in profit or loss in the same period in which the game is played. Related operating costs are recorded in profit or loss in the period they are incurred.

ii) Hotel operations

Revenues from hotel operations are recognized in profit or loss when services are rendered to customers, when the selling price is fixed or determinable, and when collection is reasonably assured. Related operating costs are recorded in profit or loss in the period they are incurred.

Contracts with customers are limited to blocks of rooms and/or banquet services, where goods and services are delivered over a brief span of time. These larger individual contracts require a deposit which is recorded as a contract liability until the Company satisfies its obligations under the contract. Individual contracts are not material in amount. Recorded deposits, either independently or in the aggregate, are not material in amount.

Gamehost Inc Notes to the Consolidated Financial Statements For the Years ended December 31, 2020 and 2019 (In millions of Canadian dollars, except share information)

4 SIGNIFICANT ACCOUNTING POLICIES (Continued)

iii) Food and beverage operations

Revenues from food and beverage sales are recognized in profit or loss when services are rendered to customers, when the selling price is fixed and determinable, and when collection is reasonably assured. Related operating costs are recorded in profit or loss in the period they are incurred.

In certain locations, food and beverage sales are commission based. When the Company acts in the capacity of an agent rather than as the principal in a transaction, the revenue recognized is the net amount of commissions earned by the Company. The Company is an agent in food and non-alcoholic beverage sales at Great Northern. Prior to taking over food operations at Boomtown during the Year, the Company was an agent.

As agent, the Company charges an immaterial commission on gross food and non-alcoholic beverage sales at Great Northern and Boomtown.

The Company offers live entertainment for which tickets are sold in advance and recorded as a contract liability until the entertainment event has been delivered. Individual contracts are not material in amount. Recorded advance payments, either independently or in the aggregate, are not material in amount.

iv) Investment property

Revenues from investment property are recognized in profit or loss per the terms and conditions stipulated in operating lease agreements with tenants and when lease payments are reasonably assured. Related operating costs are recorded in profit or loss in the period they are incurred.

(m) Finance income and finance costs

Finance income comprises interest income on funds on deposit. Interest income is recognized as it accrues in profit or loss, using the effective interest method.

Finance costs comprise interest expense on borrowings including interest accretion on right-of-use assets and net foreign exchange rate gains (losses).

Borrowing costs that are not directly attributable to the acquisition, construction, or production of a qualifying asset are recognized in profit or loss using the effective interest method.

(n) Foreign currency

Foreign currency transactions are recorded at the exchange rate on the date of transaction. Foreign exchange gains and losses resulting from the settlement of such transactions, and from the retranslation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies, are recognised in profit and loss account on a net basis. Exchange gains and losses recorded in the Company's financial statement are immaterial in the ordinary course of business.

Gamehost Inc Notes to the Consolidated Financial Statements For the Years ended December 31, 2020 and 2019 (In millions of Canadian dollars, except share information)

4 SIGNIFICANT ACCOUNTING POLICIES (Continued)

(o) Earnings per share

The Company presents basic and diluted earnings per share ("EPS") data for its common shares. Basic EPS is calculated by dividing the profit or loss attributable to common shareholders of the Company by the weighted average of common shares outstanding during the period, adjusted for own shares held. Diluted EPS is determined by adjusting the profit or loss attributable to common shareholders, and the weighted average number of common shares outstanding for the effects of all dilutive potential common shares.

5 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

The preparation of financial statements requires management to make estimates, judgements and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, and disclosures of contingent assets and liabilities at the date of the Consolidated Financial Statements and reported amounts of revenues and expenses during the reporting period. Estimates, judgements, and assumptions are reviewed on an on-going basis and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. Actual results may be different from estimates.

• Fair value of investment property

An independent appraisal report completed in 2018 on the Company's investment property no longer reflects underlying value. Earlier in the Year, discussions with the report's author in light of the COVID-19 pandemic suggested a current valuation in the range of 70% to 80% of the 2018 valuation. The valuator based the anecdotal evaluation on three factors: 1) the current lease expires in early 2021 with no renewal options; 2) the property remains only 75% leased, and; 3) the retail sector of the economy is expected to encounter significant and prolonged challenges in economic recovery from the pandemic. A value-in-use calculation based on management's best estimate of future cash flows concurs with the independent appraiser's assessment. Fair value adjustments to the carrying value of the investment property were recorded, reducing it by 29%[[Note 20]] .

• Revenue recognition

The Company has agreements with AGLC which require an assessment of principal versus agent in the services the Company provides under these agreements, specifically any wagering transaction with a casino patron. The Company has determined that its obligations to provide goods or services under these agreements is strictly under the authority of the AGLC and thus is acting as an agent under that authority. Accordingly, revenue is recognized net of any amounts belonging to the AGLC.

• Estimated useful life of long-term assets

Estimates are made in determining components of an asset’s useful life that are based on an analysis of all pertinent factors including, but not limited to, the expected use of the asset and in the case of an intangible asset, contractual provisions that enable renewal or extension of the asset’s legal or contractual life without substantial cost, and renewal history. If the estimated useful lives were incorrect, it could result in an increase or decrease in the annual amortization expense, and future impairment charges or recoveries. The Company separates carpet as a component of buildings.

Gamehost Inc Notes to the Consolidated Financial Statements For the Years ended December 31, 2020 and 2019 (In millions of Canadian dollars, except share information)

5 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (Continued)

Residual values of property, plant and equipment

Judgement is exercised in estimating the residual value of property, plant and equipment. Misjudgements in determining residual values could result in changes to annual amortization expenses and future impairment charges.

• Lease liabilities

The measured amount of lease liabilities is determined by calculating the present value of future lease payments. The present value of future lease payments is discounted using the Company's estimated cost of incremental borrowing. Estimating the incremental cost of borrowing requires significant judgement and thus could have a significant quantitative impact on recorded lease liabilities.

Judgement is required when determining lease terms. Where contracts include options for lease extension and/or termination and it is reasonably certain that the option(s) will or will not be exercised, the lease term is adjusted accordingly.

Lease liabilities are remeasured when there are changes in future lease payments. The discount rate is also reevaluated at remeasurement date and any resulting adjustment to the lease liability will also result in a corresponding adjustment to the right-of-use asset.

• Income taxes

Deferred tax assets and liabilities are due to temporary differences between the carrying amount for accounting purposes and the tax basis of certain assets and liabilities, as well as undeducted tax losses. Estimation is required for the timing of the reversal of these temporary differences and the tax rate applied. The carrying amounts of assets and liabilities are based on amounts recorded on the audited consolidated statements of financial position and are subject to the accounting estimates inherent in those balances. The tax basis of assets and liabilities and the amount of undeducted tax losses are based on the applicable income tax legislation, regulations and interpretations. The timing of the reversal of the temporary differences and the timing of deduction of tax losses are based on estimations of the Company’s future financial results.

Changes in the expected operating results, enacted tax rates, legislation or regulations, and the Company’s interpretations of income tax legislation will result in adjustments to the expectations of future timing difference reversals and may require material deferred tax adjustments.

• Goodwill and intangible assets

Estimates of future cash flows and establishing discount rates will affect the recoverable amounts of CGU's which may result in permanent impairment charges to goodwill and/or intangible assets.

• Determination of CGUs

The Company’s assets are grouped into CGUs based on their ability to generate separate identifiable cash flows. The determination of CGUs involves an assessment regarding the interdependency of cash inflows, and the Company’s organizational structure.

Gamehost Inc Notes to the Consolidated Financial Statements For the Years ended December 31, 2020 and 2019 (In millions of Canadian dollars, except share information)

5 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (Continued)

• Segment Reporting

The preparation of financial statements requires management to make judgments that affect the financial statement disclosure of information regularly reviewed by the Company’s Chief Operating Officer ("COO") and used to make resource allocation decisions and to assess performance.

Significant judgments were made in determining operating segments to reflect the manner in which the COO reviews the operations and business performance of the Company. Management has considered the regular process used by the COO to assess Company performance including the budgeting process, and public statements about how an entity operates its business. The COO monitors the Company’s operating results on a revenue stream basis. Management has determined each major revenue stream to be an operating segment.

6 OPERATING SEGMENTS

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Company’s other components. Operating results of each segment for which specific financial information is available are reviewed regularly by the Company’s Chief Operating Officer ("COO"), to make decisions about resources to be allocated to the segment and assess its performance.

Segment results that are reported to the COO include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets (primarily the Company’s headquarters), and income tax assets and liabilities.

Segment capital expenditure is the total cost incurred during the Year to acquire property, plant and equipment, and intangible assets other than goodwill.

The Company's reportable segments are strategic business units that offer different services. They are managed separately because of their unique operational and marketing requirements. Each segment complements the other segments. The Gaming segment includes three casinos offering slot machines, VLT's, lottery ticket kiosks and table games. The Hotel segment includes three hotels catering to mid-range clients. The Food and Beverage segment has operations that are located within the casinos and hotels as a complement to those segments.

Gamehost Inc

Notes to the Consolidated Financial Statements For the Years ended December 31, 2020 and 2019 (In millions of Canadian dollars, except share information)

6 OPERATING SEGMENTS (Continued)

twelve months ended December 31, 2020		Gaming		Hotel		Food &	Corporate and	Corporate and		Total
						Beverage		Other1
Total revenues	$	23.9	$	6.1	$	6.5	$	2.2	$	38.7
Profit(loss)before income taxes	$	10.9	$	(1.3)	$	0.1	$	(2.2)	$	7.5
Segment assets	$	77.7	$	67.9	$	26.2	$	3.2	$	175.0
Segment liabilities	$	24.3	$	20.3	$	8.9	$	8.7	$	62.2
Capital expenditures	$	1.0	$	-	$	1.1	$	-	$	2.1
twelve months ended December 31, 2019		Gaming		Hotel		Food &	Corporate and			Total
						Beverage		Other1
Total revenues	$	40.9	$	13.0	$	14.2	$	0.2	$	68.3
Profit(loss)before income taxes	$	19.5	$	2.5	$	2.2	$	(3.9)	$	20.3
Segment assets	$	76.9	$	70.8	$	24.9	$	3.6	$	176.2
Segment liabilities	$	19.5	$	20.9	$	8.9	$	10.5	$	59.8
Capital expenditures	$	0.4	$	-	$	-	$	-	$	0.4

1 Corporate and Other consists of revenues and expenses which are not allocated to operating segments and do not meet the definition of an operating segment on their own.

7 OPERATING REVENUE

Operating revenue 2020 2019 twelve months ended December 31	2020 2019 December 31 three months ended
Sale of goods 6.5 14.2 Room letting 5.7 12.8 Operator share of CGT's 14.6 22.6 Other services 7.8 18.4	(6.0) 1.7 1.1 2.8 2.9 5.7 10.9 7.0
34.6 68.0	8.9 17.2

Sale of goods is comprised of entertainment and food & beverage net of any commissions. Room letting includes both hotel guest rooms and banquet and meeting rooms. Computer gaming terminals (CGT's) include slots, VLT's and electronic gaming tables (EGT's). Other services includes all gaming tables, cash dispensing other operating revenues.

8 COST OF SALES BY NATURE

Cost of sales - Other 2020 2019 December 31 twelve months ended	2020 2019 three months ended December 31
Food and beverage inventory used 1.5 3.7 Human resources [8 (a)] 11.5 20.6 Marketing and promotions 1.9 3.3 Operating 5.2 8.5 Direct overhead and other 2.4 2.5	0.3 1.0 3.1 5.3 0.5 0.8 1.3 2.1 0.6 0.7
22.5 38.6	5.8 9.9

Gamehost Inc

Notes to the Consolidated Financial Statements For the Years ended December 31, 2020 and 2019 (In millions of Canadian dollars, except share information)

8 (a) Human resources

Human resources 2020 2019 December 31 twelve months ended	2020 2019 three months ended December 31
Wages and salaries 10.4 17.8 Canada pension plan remittances 0.5 0.8 Employment insurance remittances 0.2 0.5 Other human resource related expenses 0.4 1.5	2.9 4.6 0.1 0.2 - 0.1 0.1 0.4
11.5 20.6	3.1 5.3

The Company does not have a defined benefit plan obligation. Employee benefits are limited to those under the Canada Pension Plan ("CPP"), for which the Company makes regular contributions with each payroll period. In addition to contributions to CPP, the Company also has an employee Health Spending Plan ("HSP"). Benefits under this plan are limited to fixed annual Company contributions, which if not used for allowable medical expenses as defined by the Canada Revenue Agency, are paid out as taxable income to the employee. For employees laid-off due to COVID-19, the Company is making group insurance premium payments normally the responsibility of employees.

9 LEASE AND OTHER INCOME

Lease and other income 2020 2019 December 31 twelve months ended	2020 2019 three months ended December 31
Gross revenue from investment property 0.2 0.3 Lease revenues - 0.1 Operating costs of investment property (0.1) (0.1) Other income 4.0 -	- - 0.1 - - 2.1 -
4.1 0.3	2.1 0.1

Lease and other income is comprised of net profits from investment property leasing activities, lease income from food services operators at the Company's Great Northern and Boomtown casinos, and other miscellaneous incomes. As lessor, the Company is responsible for all exterior or building shell maintenance and capital expenditures at the Company's investment property. The Company manages the operational costs including property tax, building insurance, repairs and maintenance and security of the property which costs are shared pro-rata by property tenants as common area costs.

In response to the COVID-19 pandemic, the Company granted rent relief to tenants and a sub-tenant resulting in reduced revenue from leases and investment property. The Company received subsidies under the Canada Emergency Commercial Rent Assistance (CECRA) program during the Year. The CECRA program is now concluded. The Company is receiving ongoing COVID-19 relief under the Canada Emergency Wage Subsidy (CEWS) program. The Company received COVID-19 relief under the Alberta Small and Medium Enterprise Relaunch Grant (SMERG). The Company is receiving ongoing COVID-19 relief under the Canada Emergency Rent Subsidy (CERS) program. All amounts received or accrued under all COVID-19 relief programs are recorded in other income. There is no certainty that CEWS and CERS relief programs will continue beyond June 2021 as the federal government has currently detailed.

Notes to the Consolidated Financial Statements For the Years ended December 31, 2020 and 2019

Gamehost Inc

(In millions of Canadian dollars, except share information)

9 LEASE AND OTHER INCOME (Continued)

Future minimum lease revenues do not include any inducements and none have been recorded on the company's financial statements.

As at December 31, 2020	1 year or less	2 to 5 years	More than 5
			years
Future minimum lease payments	0.1	0.3	-
As at December 31, 2019	1 year or less	2 to 5 years	More than 5
Future minimum lease payments	0.1	0.4	0.1

10 ADMINISTRATIVE EXPENSES - BY NATURE

Administrative expenses - Other 2020 2019 December 31 twelve months ended	2020 2019 December 31 three months ended
Corporate salaries 0.4 0.5 Management fees 1.2 1.8 Legal and other professional fees 0.2 0.1 General and other 0.5 0.5	0.1 0.1 0.3 0.5 - - 0.2 0.1
2.3 2.9	0.6 0.7

11 NET FINANCE COSTS

Net finance costs recognized in profit or loss 2020 2019 December 31 twelve months ended	2020 2019 December 31 three months ended
Interest income on bank deposits - 0.1	- -
Finance income - 0.1 Loan interest and interest accretion on lease liabilities 1.5 2.2	- - 0.4 0.5
Finance costs 1.5 2.2	0.4 0.5
Net finance costs recognized in profit 1.5 2.1	0.4 0.5

Gamehost Inc

Notes to the Consolidated Financial Statements For the Years ended December 31, 2020 and 2019

(In millions of Canadian dollars, except share information)

12 INCOME TAX

Current income tax

twelve months ended December 31 2020	2019 (Restated)
Current tax expense Deferred tax expense (recovery) Origination and reversal of temporary differences Changes in future enacted tax rates - 1.9 $ (0.1)	(1.4) 5.2 $ 0.2
Income tax expense 1.8 $	4.0 $

Reconciliation of effective tax rate

twelve months ended December 31 2020	2019 (Restated)
Profit attributable to Shareholders before income tax Combined federal and provincial statutory tax rate Expected income tax expense Adjustments in determining income tax expense Effect of changes in temporary differences Changes in future enacted tax rates - 0.1 24.0% 7.1 $ 1.7	0.3 19.3 $ (1.4) 26.5% 5.1
Income tax expense 1.8 $	4.0 $

Substantially enacted tax laws, as they relate to the Company's liability for current and deferred taxes, have been factored into the determination of reported taxes.

Deferred income tax

a) Recognized deferred tax assets and liabilities

The income tax effects of temporary differences that give rise to significant portions of the deferred tax liabilities are presented below:

at December 31 Assets Liabilities Net 2020	Assets Liabilities Net 2019 (Restated)
Leased right-of-use assets 2.5 - 2.5 Intangible assets - (6.4) (6.4) Property, plant and equipment - (4.2) (4.2)	1.1 - 1.1 - (6.3) (6.3) - (3.0) (3.0)
Deferred tax assets (liabilities) 2.5 (10.6) (8.1)	1.1 (9.3) (8.2)

Gamehost Inc

Notes to the Consolidated Financial Statements For the Years ended December 31, 2020 and 2019 (In millions of Canadian dollars, except share information)

12 INCOME TAX (Continued)

b) Movement in deferred tax balances

twelve months ended December 31 Opening Recognized in profit Closing 2020	Opening Recognized in profit Closing 2019 (Restated)
Leased right-of-use assets 1.1 1.4 2.5 Intangible assets (6.3) (0.1) (6.4) Property, plant and equipment (3.0) (1.2) (4.2)	- 1.1 1.1 (7.2) 0.9 (6.3) (2.4) (0.6) (3.0)
Deferred tax assets (liabilities) (8.2) 0.1 (8.1)	(9.6) 1.4 (8.2)

c) Movement in deferred tax balances related to change in tax rates

Changes in future enacted tax rates Recognized in profit 2020	Recognized in profit 2019 (Restated)
Intangible assets - Property, plant and equipment -	1.1 0.3
Deferred tax assets (liabilities) -	1.4

On June 29, 2020, the Government of Alberta introduced Alberta's Recovery Plan which included a reduction to Alberta's general corporate income tax rate from 10.0% to 8.0% effective July 1, 2020. This accelerated previously enacted tax reductions.

13 Earnings per share

Basic earnings per share

The calculation of basic earnings per share is based on the profit attributable to common shareholders and the weighted average number of common shares outstanding. The Company had no potentially dilutive common shares during the periods reported.

2020 2019 (Restated) December 31 twelve months ended	2020 2019 three months ended December 31
Profit and comprehensive profit attributable to shareholders 5.3 $ 15.3 $	1.8 $ 3.7 $
Weighted average common shares outstanding 23.8 24.3	23.4 24.3
Basic and fully diluted earnings per share 0.22 $ 0.63 $	0.08 $ 0.15 $

14 RESTRICTED CASH

Restricted cash consists of progressive jackpot funds that have accumulated over time on specific progressive table games. Progressive jackpot funds are not available for use in general operations. Included in trade and other payables is $0.9 ($0.8 - 2019) relating to progressive jackpots.

Gamehost Inc

Notes to the Consolidated Financial Statements For the Years ended December 31, 2020 and 2019 (In millions of Canadian dollars, except share information)

15 TRADE AND OTHER RECEIVABLES

December 31, 2020	December 31, 2019
AGLC, ATM and statutory amounts Hotel guest accounts Other 0.3 0.5 1.3	0.9 0.3 0.9
2.1	2.1

AGLC and statutory amounts are expected to clear in the month following. Hotel and guest accounts are monitored closely for changes in payment patterns and remain well within Company targets for days sales outstanding. No adjustments have been made to estimates for expected credit losses. Other amounts include various amounts receivable including COVID-19 relief program submissions.

16 INVENTORIES

December 31, 2020	December 31, 2019
Consumables Merchandise Product supplies 0.4 - 0.1	0.5 0.1 -
0.5	0.6

Consumables consist of supplies that are used in daily operations including uniforms and playing cards. Product supplies include food, condiments, liquor and mix. During the Year, consumables and product supplies recognized as cost of sales amounted to $1.6 ($3.9 - 2019). No inventories were written down, and no reversals of previous write-downs occurred during the Year.

17 PROPERTY, PLANT AND EQUIPMENT

The carrying values of property, plant and equipment which comprise of owned assets that do not meet the definition of investment property are reconciled below:

		Land		Land		Buildings		Leaseholds	Furniture and	Furniture and		Total
			Improvement							equipment
Cost
At January 1, 2019	$	11.6	$	4.0	$	85.4	$	2.8	$	23.0	$	126.8
Additions		-		0.2		-		-		0.2		0.4
At December 31, 2019	$	11.6	$	4.2	$	85.4	$	2.8	$	23.2	$	127.2
Additions		-		-		2.0		-		0.1		2.1
At December 31, 2020	$	11.6	$	4.2	$	87.4	$	2.8	$	23.3	$	129.3
Accumulated depreciation
At January 1, 2019	$	-	$	0.9	$	28.6	$	2.7	$	19.2	$	51.4
Depreciation		-		0.1		1.8		-		1.6		3.5
At December 31, 2019	$	-	$	1.0	$	30.4	$	2.7	$	20.8	$	54.9
Depreciation		-		0.1		2.4		-		0.7		3.2
At December 31, 2020	$	-	$	1.1	$	32.8	$	2.7	$	21.5	$	58.1
Carrying value
At December 31, 2019	$	11.6	$	3.2	$	55.0	$	0.1	$	2.4	$	72.3
At December 31, 2020	$	11.6	$	3.1	$	54.6	$	0.1	$	1.8	$	71.2

Gamehost Inc Notes to the Consolidated Financial Statements For the Years ended December 31, 2020 and 2019 (In millions of Canadian dollars, except share information)

17 PROPERTY, PLANT AND EQUIPMENT (Continued)

Equipment provided by and owned by AGLC including slot, VLT, and lottery terminals are not included in property, plant and equipment.

The Company has begun construction on two building expansion projects with expected completion costs totaling $6.1. $1.9 of the total project funding has been advanced to the general contractor during the Year. No amortization has been recorded on these amounts.

18 LEASES

The Company's leases are comprised of predominantly a property lease for the Boomtown Casino and numerous pieces of small equipment throughout the Company, collectively known as right-of-use assets. The corresponding lease liabilities for right-of-use assets are subject to remeasurement for changes in future lease payments with corresponding adjustments made to the carrying value of the right-of-use asset.

Additional lease payments are recognized in profit (loss) and consist of short-term leases with durations of twelve months or less, and leases of low value consisting primarily of small equipment. Additional lease payments also include variable portions of property leases based on usage such as property tax and insurance portions of common area property costs.

a) Right-of-use assets
		Land			Land		Buildings	Leaseholds		Furniture	and		Total
				Improvement						equipment
Cost
At January 1, 2019	$		-	$	-	$	5.0	$	-	$	0.7	$	5.7
Additions and disposals			-		-		-		-		-		-
At December 31, 2019	$		-	$	-	$	5.0	$	-	$	0.7	$	5.7
Additions and disposals			-		-		-		-		-		-
Modifications and remeasurements			-		-		6.8		-		-		6.8
At December 31, 2020	$		-	$	-	$	11.8	$	-	$	0.7	$	12.5
Accumulated depreciation and impairments
At January 1, 2019	$		-	$	-	$	-	$	-	$	-	$	-
Depreciation expense			-		-		0.8		-		0.2		1.0
At December 31, 2019	$		-	$	-	$	0.8	$	-	$	0.2	$	1.0
Depreciation expense			-		-		0.7		-		0.2		0.9
Modifications and remeasurements			-		-		-		-		-		-
At December 31, 2020	$		-	$	-	$	1.5	$	-	$	0.4	$	1.9
Carrying value
At December 31, 2019	$		-	$	-	$	4.2	$	-	$	0.5	$	4.7
At December 31, 2020	$		-	$	-	$	10.3	$	-	$	0.3	$	10.6

Gamehost Inc Notes to the Consolidated Financial Statements For the Years ended December 31, 2020 and 2019 (In millions of Canadian dollars, except share information)

18 LEASES (Continued)

b) Lease liabilities

The following table reconciles the opening and ending balances of lease liabilities:

Lease liabilities at January 1, 2019	$	5.7
Lease payments		(1.2)
Interest accretion		0.3
Additions		0.1
Current lease liabilities at December 31,2019		(0.9)
Non-current lease liabilities at December 31,2019	$	4.0

Lease liabilities at January 1, 2020	$	4.9
Lease payments		(1.1)
Interest accretion		0.2
Lease modifications and remeasurements		6.8
Current lease liabilities at December 31,2020		(0.7)
Non-current lease liabilities at December 31,2020	$	10.1

Lease payments were discounted using a 5.0% incremental borrowing rate from the origination of the leases.

The Company signed a new building lease for Boomtown during the Year. The new lease includes an extension to the existing term which resulted in a remeasurement of the existing lease adding 15 years to the term and a reduction in the discount rate from 5.0% to 3.5% being the Company's current incremental cost of borrowing.

The Company expects the following maturities of its undiscounted lease commitments:

Lease liabilities contractual cash flows (undiscounted) December 31, 2020	December 31, 2019
One year or less Two to five years More than five years 1.5 $ 4.9 13.3	1.6 $ 5.2 1.1
19.7 $	7.9 $

The new Boomtown building lease also includes an additional 6,350 square feet to the original lease effective August 31, 2021 coinciding with the completion of a capital project in-progress. The expansion portion of the lease will be added to right-of-use assets and lease liabilities at the effective date. Contractual cash flows for this portion of the lease total $5.6 and is included in the undiscounted lease commitments. The new Boomtown lease includes additional rent based on certain revenue thresholds, one renewal option of five years, and a tenant allowance of 50.0% of leasehold improvements to a maximum of $1.9, none of which has been included in lease liabilities or commitment amounts calculated.

Gamehost Inc Notes to the Consolidated Financial Statements For the Years ended December 31, 2020 and 2019 (In millions of Canadian dollars, except share information)

18 LEASES (Continued)

c) Lease payments recognized in profit and comprehensive profit

The following table summarizes the amounts recognized in profit and comprehensive profit for lease payments:

December 31, 2020	December 31, 2019
Lessor activities Net (income) from lessor activities Lessee activities Interest accretion on lease liabilities Depreciation expense on right-of-use assets Variable and usage expenses related to right-of-use assets Expenses related to short-term leases (0.1) $ 0.4 1.0 0.6 0.2 $	0.9 0.5 (0.1) $ 0.3 $ 1.0
Lease expense recognized in profit and comprehensive profit 2.1 $	2.6 $

The Company granted rent relief of 75.0% to its tenants and subtenants during the Year. The Company applied for and was approved for COVID-19 relief under the federal CECRA program which provided short term loans for 50.0% of tenant's or subtenant's gross rent amounting to $0.1. These loans were forgiven at December 31, 2020 under terms and conditions of the CECRA program with proceeds recorded in lease and other income. The Company was not a recipient of relief under CECRA for its lease at Boomtown or corporate office spaces.

19 GOODWILL AND INTANGIBLE ASSETS


Cost
At January 1, 2019	$	57.9	$	19.0	$	76.9
At December 31, 2019	$	57.9	$	19.0	$	76.9
At December 31, 2020	$	57.9	$	19.0	$	76.9
Carrying value
At December 31, 2019	$	57.9	$	19.0	$	76.9
At December 31, 2020	$	57.9	$	19.0	$	76.9

Goodwill and intangible assets with indefinite lives are tested annually for impairment. For the purpose of impairment testing, intangible assets are allocated to the Company's CGUs which represent the lowest level within the Company at which the intangible assets are monitored for internal management purposes, which is not higher than the Company's operating segments.

The fair value measurement of the Company's CGUs have been categorized as Level 3 in the fair value hierarchy based on the inputs to the valuation techniques used.

Gamehost Inc Notes to the Consolidated Financial Statements For the Years ended December 31, 2020 and 2019 (In millions of Canadian dollars, except share information)

19 GOODWILL AND INTANGIBLE ASSETS (Continued)

Recoverable amounts for the tested CGUs are all based on value-in-use. Business disruptions due to COVID-19 required the Company to apply significant judgement in determining value-in-use estimates. An over arching conservative assumption was that all CGU's could return to pre-pandemic cash flow by the end of year 5. The Company applied specific cash flow estimates for year one and various even growth rates by CGU in years two through five. Following year five a consistent growth rate was applied to arrive at terminal value. The Company discounted cash flows based on the Company's weighted average cost of capital of 10.5%. Cash flow projections incorporate estimates of annual gaming revenue, food and beverage, hotel and ancillary revenues, operating and administrative expenses, and capital maintenance expenditures. These estimates incorporate past experience and the Company's current view of future activity. The Company prepared a sensitivity analysis and determined a reasonable cushion to recoverable values exists to rule out any impairment charges. Expected economic recovery would likely produce higher growth rates in years two and three and lesser rates years four and five improving the cushion to recoverable values.

Great Northern Boomtown Service Plus Encore Deerfoot Casino Deerfoot Hotel CGU	10.5% 10.5% 10.5% 10.5% 10.5% Discountrate 10.5%	Specific Specific Specific Specific Cash flowdeterminationyear 1 Specific Specific	Growth rate years2to 5 14.0% 12.0% 11.0% 12.0% 13.0% 13.0%	Growth rate thereafter
				1.0% 1.0% 1.0% 1.0% 1.0% 1.0%

The carrying and recoverable amounts allocated to each CGU which indicate that no impairment exists are as follows:

CGU Carrying Value Recoverable Amount Excess December 31, 2020	Carrying Value Recoverable Amount Excess December 31, 2019
Great Northern 35.6 49.5 13.9 Boomtown 23.1 49.8 26.7 Deerfoot Casino 66.0 83.6 17.6 Deerfoot Hotel 16.8 23.1 6.3	35.8 54.7 18.9 17.4 61.7 44.3 65.7 87.5 21.8 16.7 24.5 7.8
141.5 206.0 64.5	135.6 228.4 92.8

Included in CGU Carrying Value Licenses Goodwill Intangibles December 31, 2020	Licenses Goodwill Intangibles December 31, 2019
Great Northern - 29.4 29.4 Boomtown - 13.2 13.2 Deerfoot Casino 19.0 11.3 30.3 Deerfoot Hotel - 4.0 4.0	- 29.4 29.4 - 13.2 13.2 19.0 11.3 30.3 - 4.0 4.0
19.0 57.9 76.9	19.0 57.9 76.9

Gamehost Inc Notes to the Consolidated Financial Statements For the Years ended December 31, 2020 and 2019

(In millions of Canadian dollars, except share information)

20 INVESTMENT PROPERTY

Investment property
At January1,2019	$	2.8
At December 31, 2019	$	2.8
Fair value adjustment		(0.8)
At December 31, 2020	$	2.0

The Company owns a commercial strip in Grande Prairie which it classifies as an investment property. The investment property is intended to be fully leased to third parties for the purpose of generating income. The property is currently 75% leased to a tenant operating a restaurant/pub. The current lease expires in March 2021 with no renewal options remaining.

Uncertainties related to COVID-19 indicated the property's fair value was overstated. Management recorded fair value adjustments during the Year reducing the carrying value based on value-in-use. The Company applied a specific cash flow estimate for year one based on the remaining term of the lease assuming the property may be without a tenant until year two. Full occupancy for years 2 through 5 and then a terminal growth rate of 1.0% was applied to arrive at terminal value. Cash flows were discounted based on the Company's weighted average cost of capital of 10.5%. The property has an 'A' class location with its proximity to two hotels, the regional college, the regional hospital and big box shopping attracting a wide range of business, education, government and leisure visitors[[Note 5]] .

21 LOANS AND BORROWINGS

The Company has a 5 year term loan ("Term loan 1") secured by land and buildings. The rate on Term loan 1 is 3.50%. The Company is making blended monthly principal and interest payments on Term loan 1, amortized over 20 years and 3 months.

The Company has a 5 year term loan ("Term loan 2") secured by land and buildings. The rate on Term loan 2 is variable at the lenders prime rate, 2.45% at the end of the Year. The Company is making blended monthly principal and interest payments on Term loan 2, amortized over 10 years.

A demand revolving credit line with an available limit of $30.0 is secured by the same assets as the Company's term loans, and requires interest only payments. The rate floats at the lenders prime rate, 2.45% at the end of the Year.

The carry value of pledged assets for the above loans total $76.4 and include Boomtown and all Grande Prairie assets.

Deerfoot has a 5 year term loan secured by its land and buildings. The rate on the Deerfoot loan is 3.50%. Deerfoot is making blended monthly principal and interest payments on the loan, amortized over 20 years and 3 months.

The carry value of pledged assets for the above loan total $82.7.

The Company's revolving loans and term loans require the maintenance of certain financial covenants and conditions. Specifically, the Company must maintain a cash flow coverage ratio of not less than 1.25 to 1. At the end of the Year, the Company's cash flow coverage ratio is 3.0 to 1 (2.5 to 1 - December 31, 2019). The Company must also maintain a debt to tangible net worth ratio of not greater than 3.0 to 1, the actual ratio being 1.4 to 1 at the end of the Year (1.1 to 1 - December 31, 2019).

Gamehost Inc

Notes to the Consolidated Financial Statements For the Years ended December 31, 2020 and 2019 (In millions of Canadian dollars, except share information)

21 LOANS AND BORROWINGS (Continued)

Maturity December 31, 2020	December 31, 2019
Credit facilities available at face value Revolving credit line 1-Dec-23 Term loan 1 1-Dec-23 Term loan 2 1-Dec-25 Deerfoot term loan 1-Dec-23 5.2 30.0 $ 5.0 14.4	- 5.2 30.0 $ 14.7
54.6 $	49.9 $
Carrying value of borrowed amounts Current liabilities Revolving credit line Term loan 1 Term loan 2 Deerfoot term loan 0.6 16.2 $ 0.2 0.4	20.8 $ 0.5 0.2 -
Term loan 1 Term loan 2 Deerfoot term loan 4.6 5.0 17.4 13.8	14.2 - 5.0 21.5
23.4	19.2
40.8 $	40.7 $
Revolving credit line Deerfoot term loan 3.50% 2.45% (P +0.00%) 2.45% (P +0.00%) Term loan 1 Term loan 2 3.50%	3.95% (P +0.00%) 3.50% 3.50% n/a

1 Prime rate (P) at the end of the Year was 2.45%.

Gamehost Inc Notes to the Consolidated Financial Statements For the Years ended December 31, 2020 and 2019 (In millions of Canadian dollars, except share information)

22 EQUITY

Common shares of the Company have no par value. The Company is authorized to issue an unlimited number of common shares without nominal or par value to which shares shall be attached the right to vote at any meeting of shareholders of the Company, receive any dividend declared by the Company, and receive the remaining property of the Company upon dissolution.

Shares Amount December 31, 2020 twelve months ended	Shares Amount December 31, 2019 twelve months ended
Opening number of common shares 24.3 164.3 $ Common shares purchased for cancellation under normal course issuer bid (1.0) (4.9)	24.3 164.8 $ - (0.5)
Ending number of common shares 23.3 159.4 $	24.3 164.3 $

Weighted average number of common shares 2020 2019 December 31 twelve months ended	2020 2019 December 31 three months ended
Opening balance of common shares 24.3 24.3 Weighted average effect of common shares purchased for cancellation (0.5) -	23.5 24.3 (0.1) -
Weighted average common shares outstanding 23.8 24.3	23.4 24.3

Normal course issuer bid(s)

On July 11, 2019 the Company commenced a normal course issuer bid (the "2019 Bid") to purchase for cancellation up to 1.6 million of its common shares. The 2019 Bid commenced on July 15, 2019 and ended on July 14, 2020. During the Year, the Company purchased for cancellation 332,295 common shares under the 2019 Bid at prices averaging $4.55/common share not including commissions.

On July 21, 2020 the Company commenced a normal course issuer bid (the "2020 Bid"). Pursuant to the 2020 Bid, Gamehost is authorized to purchase for cancellation up to a maximum of 1.5 million common shares, being equal to 10% of Gamehost's “public float” outstanding on July 10, 2020. Notwithstanding the foregoing, pursuant to the rules of the TSX, Gamehost may not purchase more than 2,690 common shares in any one day, such amount being equal to 25% of the average daily trading volume for the six months ended June 30, 2020. Common shares purchased under the 2020 Bid will be made in the open market through the facilities of the TSX and any other Canadian marketplaces at the prevailing market price of the shares on the TSX and any other Canadian marketplaces at the time of purchase. The 2020 Bid will terminate on July 20, 2021 or such earlier time as the 2020 Bid is completed or terminated at the option of the Company. During the Year, 611,765 common shares were purchased under the 2020 Bid at prices averaging $5.50/common share not including commissions.

Gamehost Inc Notes to the Consolidated Financial Statements For the Years ended December 31, 2020 and 2019 (In millions of Canadian dollars, except share information)

22 EQUITY (Continued)

The Company did not have any options, warrants, or rights that would be potentially dilutive during the Year.

Dividends

Dividends declared at Record Date 2020	2019
per Share Dividends January 0.0575 $ 1.4 $ February 0.0575 1.4 March 0.0575 1.4 April - - May - - June - - July - - August - - September - - October - - November - - December - -	per Share Dividends 0.0575 $ 1.4 $ 0.0575 1.4 0.0575 1.4 0.0575 1.4 0.0575 1.4 0.0575 1.4 0.0575 1.4 0.0575 1.4 0.0575 1.4 0.0575 1.4 0.0575 1.4 0.0575 1.4
0.1725 $ 4.2 $	0.6900 $ 16.8 $

Dividends are considered "eligible" dividends for Canadian residents income tax purposes. Dividends are paid on or about the 15th of the month following the month of declaration.

On March 17, 2020, in response to the COVID-19 pandemic, the Company's board of directors temporarily suspended regular monthly dividends. The change was effective for declared dividends beginning record date April 2020. The Company's board of directors reviews dividend policy at each regularly scheduled meeting.

Other shares

The Company may cause to be issued unlimited numbers of shares or other securities, provided they do not rank ahead of the common shares of the Company as to dividends, voting rights, and other rights protected by the Limited Partnership Agreement.

Gamehost Inc Notes to the Consolidated Financial Statements For the Years ended December 31, 2020 and 2019 (In millions of Canadian dollars, except share information)

23 RELATED PARTY TRANSACTIONS

Related party transactions are measured at the exchange amount, which is the amount agreed to by the Company and the related parties. Related party balances are unsecured and non-interest bearing, with no specific terms of repayment.

The Company had related party transactions with David Will and Darcy Will and/or companies owned or controlled by David Will and/or Darcy Will (collectively the “Wills”). The Wills are key management personnel, directors of the Company, and significant shareholders. Together, the Wills control 32.1% (30.5% - December 31, 2019) of the outstanding common shares of the Company at end of the Year.

The Company incurred $0.7 ($1.3 - 2019) in key management personnel compensation with the Wills for the Year which is included in administrative expenses. Compensation is in the form of short term employee benefits, director fees, management agreements, and a general partnership agreement. Management fees stipulated in management services agreements are based on a percentage of revenues and/or earnings before interest, taxes, depreciation and amortization. $0.1 ($nil - 2019) remains in accounts payable at the end of the Year.
A management services agreement between the Company and the Wills stipulates that the Wills are entitled to 1.5% of gross operating profit before interest, taxes, depreciation, amortization, and extraordinary items of the Company. These amounts are included in administrative expenses.
The management services company engaged to perform the services referred to above is also the general partner of Gamehost Limited Partnership. The partnership agreement stipulates that the general partner is entitled to 0.01% of all cash distributions of the partnership. These amounts are included in administrative expenses.
A management services agreement between Deerfoot and the Wills stipulates that the Wills are entitled to 1.5% of the gross revenues plus 2.0% of operational earnings before interest, taxes, depreciation, amortization, and extraordinary items of Deerfoot. These amounts are included in administrative expenses.
The Company incurred $0.1 ($0.1 – 2019) of office rent expenses for the Year which is included in administrative expenses. Deerfoot rents its head office space from DJ Will Holdings Limited, a company wholly owned by David Will.
The Company incurred $0.1 ($0.1 – 2019) of rental expenses for the Year which is included in cost of sales. The Company rents tractor trailer parking from Peace Country Hospitality Inc., a company controlled by the Wills together with the Company's Chief Operating Officer (COO).
The Company advanced $1.7 ($nil – 2019) for construction projects at Deerfoot and Boomtown during the Year which is included in property, plant and equipment. The Company has contracted DJ Will Construction Ltd, a company controlled by the Wills to complete the expansion projects. Total expected commitments for these projects are $3.1 and $4.5 respectively.

The Company incurred $0.1 ($0.1 – 2019) in directors fees for the Year paid to other directors of the Company which is included in administrative expenses.

The Company incurred $0.2 ($0.2 – 2019) of charter aircraft rental expenses during the Year with Noren Air Inc., a company controlled by the Company's COO. Portions of these expenses are included in administrative expenses or capitalized to project costs dependant on their purpose.

Gamehost Inc Notes to the Consolidated Financial Statements For the Years ended December 31, 2020 and 2019 (In millions of Canadian dollars, except share information)

23 RELATED PARTY TRANSACTIONS (Continued)

The Company incurred $0.6 ($0.6 – 2019) for the Year in key management personnel compensation paid or accrued to other officers or companies controlled by other officers of the Company, which is included in administrative expenses. Included in these figures are monthly fees paid under an operational services agreement between the Company and the Company's COO for overseeing site operations of the Company.

24 COMMITMENTS

The Company has an 87.75% contributing interest responsibility to Deerfoot for any capital funding requirements. Deerfoot is undertaking a 7,500 square foot expansion of its gaming and non-gaming amenities. Gamehost contributed $1.4 during the Year to the project representing 46.6% of the Company's contributing interest responsibility for the expected total project cost of $3.5.

The Company has a commitment for a 6,350 square foot expansion of its non-gaming amenities at Boomtown. Gamehost contributed $0.3 during the Year to the project representing 6.7% of the expected total project cost of $4.5.

The Company has various other contractual commitments for services. Future undiscounted minimum payments of all commitments are:

Commitments
	Oneyear or less Two to fiveyears More than fiveyears Total
	- - 5.9 5.9

25 DETERMINATION OF FAIR VALUES

Some of the Company's accounting policies require the determination of fair value. Fair values have been determined for measurement and disclosure purposes as follows:

Non-financial assets

The Company's non-financial assets requiring impairment testing consist of property, plant and equipment[[Note][4(e)]] , and intangible assets[[Note][4(f)]] . The Company's intangible assets consist of goodwill and licenses, both of which have indefinite lives. Non-financial assets have been grouped together in CGUs.

No events have occurred or are expected to occur that would change our assessment of the Company's determination of CGUs. Factors used in determination of the Company's CGUs, such as customer base and independent cash flows, remain consistent with the date of determination of the Company's CGUs[[Note 19]] .

Indications of impairment of the Company's non-financial assets required management to test for impairment and measure fair values. No impairment loss has been recorded or reversed during the Year. A fair value adjustment was recorded on the Company's investment property[ [Note 20]] .

Notes to the Consolidated Financial Statements For the Years ended December 31, 2020 and 2019 (In millions of Canadian dollars, except share information)

Gamehost Inc

25 DETERMINATION OF FAIR VALUES (Continued)

Financial assets

The fair values of financial assets and liabilities, together with the carrying amounts shown in the statement of financial position, are as follows:

December 31, 2020	December 31, 2019
Carrying amount Fair value	Carrying amount Fair value
Assets carried at amortized cost Cash 10.3 10.3 Restricted cash 0.9 0.9 Trade and other receivables 2.1 2.1	15.4 15.4 0.8 0.8 2.1 2.1
13.3 13.3	18.3 18.3
Liabilities carried at amortized cost Trade and other payables 2.4 2.4 Loans and borrowings 40.8 40.8	4.6 4.6 40.7 40.7
43.2 43.2	45.3 45.3

Valuation techniques

The carrying amounts of cash, restricted cash, accounts receivable, other receivables, accounts payable and accrued liabilities approximate their fair values due to their short term nature.

Investment property

The Company's investment property is measured at fair value and categorized as Level 3 in the fair value hierarchy[[Note 4 (i)] iv)] . An appraisal completed in 2018 is not currently considered reliable as a fair reflection of the property's value due to COVID-19's impact on the retail and restaurant sector, which is considered the highest and best use for the property. Consequently, value-in-use methodology was used to determine fair value.

Loans and borrowings

Loans and borrowings consist of term debt, revolving debt, and lease liabilities and are accounted for at amortized cost, using the effective interest rate method. The fair value required to be disclosed is measured using current rates offered to the Company for similar debt with similar terms and risk profiles, and is therefore classified within Level 2 of the fair value hierarchy.

Gamehost Inc Notes to the Consolidated Financial Statements For the Years ended December 31, 2020 and 2019 (In millions of Canadian dollars, except share information)

26 FINANCIAL RISK AND CAPITAL MANAGEMENT

Financial risk management

The Company is exposed to certain risks as a result of holding financial instruments including interest rate risk, credit risk, liquidity risk, foreign currency risk, and industry risk.

Interest rate risk

The Company’s interest rate risk arises primarily from its variable rate debt in the aggregate amount of $21.2. The Company is paying interest at 2.45% on revolving debt at the end of the Year. A 1.0% increase in interest rates would have an unfavourable impact on earnings of $0.2 or $0.01/common share on an annualized basis.

Credit risk

Credit risk arises from cash held with banks and credit exposure to customers and lessees. The Company’s day-to-day commercial banking is with 'A' rated Canadian financial institutions. Day-to-day commercial banking is not concentrated with a single financial institution.

The Company, in the normal course of operations, monitors the financial condition of its customers, lessees and other receivables. A significant portion of lessee receivables are tied to point-of-sale systems (POS) owned by the Company from which the Company collects all revenues. Amounts due to the lessee are paid net of any commissions or past due rents. Therefore lessee receivables are considered low risk. The Company does not have significant exposure to any individual customer or counterparty. Stated credit terms are typically 30 days, but in practice extend 90 to 120 days for select customers operating in the energy sector which is common industry practise. Individual accounts are monitored at minimum monthly and any unexpected changes are escalated to senior management on a case-by-case basis. Individual accounts are considered fully collectable until a notice of receivership is received or communication from the customer ceases.

Carrying amounts of accounts receivable are reduced for expected credit losses (ECL) based on historical results and a factor for any deterioration in the economic and credit environment. Direct losses are recorded on an account-specific basis when appropriate. Carrying amounts of accounts receivable are reduced by direct write-off to earnings in the period of loss recognition. The COVID-19 pandemic has had a significant impact on the general economy and specifically commodity prices and demand in the fossil fuel sector. Management recognizes the elevated credit risk and is monitoring all accounts accordingly. Day-sales-outstanding at the end of the Year was well within Company targets. At the end of the Year, past due accounts and accounts written off are not material. The Company has not recorded an adjustment for ECL.

Liquidity risk

Liquidity risk arises from excess financial obligations over available financial assets due at any point in time. The Company’s objective in managing liquidity risk is to maintain sufficient, readily available reserves in order to meet ongoing liquidity requirements.

Accounts payable, excluding accrued liabilities, are due in 90 days or less.

The Company, and Deerfoot, have term loans scheduled for monthly blended payments that will fully amortize term loan balances by December 2025 and March 2040.

Gamehost Inc Notes to the Consolidated Financial Statements For the Years ended December 31, 2020 and 2019 (In millions of Canadian dollars, except share information)

26 FINANCIAL RISK AND CAPITAL MANAGEMENT (Continued)

The AGLC requires all casinos to maintain a Minimum Continuing Net Working Capital Position (“MCNWCP”). The MCNWCP is a requirement for casino operations only. Additional working capital from non-casino operations and available debt facilities can be used to satisfy the requirement. The calculation of MCNWCP includes cash floats, restricted cash, one month’s operating expenses, and one month’s interest costs on debt facilities. The Company is in compliance with this requirement.

The following are the undiscounted contractual maturities of financial liabilities, including estimated interest payments:

As at December 31, 2020	Carrying	Contractual	1 year or less	years 2 to 5	More than	5
	amount	cash flows			years
Trade and other payables	2.4	2.4	2.4	-		-
Term loans	24.6	31.9	2.0	8.0	21.9
Revolving credit facility	16.2	16.2	16.2	-		-
	43.2	50.5	20.6	8.0	21.9
As at December 31, 2019
Trade and other payables	4.2	4.2	4.2	-		-
Term loans	19.9	27.8	1.4	5.6	20.8
Revolving credit facility	20.8	20.8	20.8	-		-
	44.9	52.8	26.4	5.6	20.8

Foreign currency risk

The Company's foreign currency risk arises primarily from the purchases of specialized goods and services in United States dollars. While not significant, fluctuations in the exchange rate between the Canadian and United States dollar result in exchange gains or losses. The Company mitigates foreign currency risk by purchasing United States dollars when deterioration in exchange rates is expected. United States currency is held in United States dollar denominated bank accounts for this purpose.

Industry risk

The Company's operations are all located in Alberta, and to varying extents derive portions of their business income from corporate clients in the energy sector. As a result, the Company is exposed to some industry risk.

Capital management

The Company's primary objectives when managing capital are to safeguard the Company's ability to continue as a going concern and to fund maintenance and growth expenditures. A secondary objective is to manage capital to allow the Company to pay regular dividends to its shareholders. The Company's capital is comprised of net debt and shareholder equity:

December 31, 2020	December 31, 2019 (Restated)
Total debt including revolving loans Less cash (10.3) 40.8	40.7 (15.4)
30.5 Net debt	25.3
Total equity 112.8	116.4
143.3	141.7

Gamehost Inc Notes to the Consolidated Financial Statements For the Years ended December 31, 2020 and 2019 (In millions of Canadian dollars, except share information)

26 FINANCIAL RISK AND CAPITAL MANAGEMENT (Continued)

Current debt instruments will be maintained or eliminated to the extent they allow for repayment. The Company’s fixed rate debt instruments do not allow for additional payments without penalty. Debt maintenance includes regular amortized monthly principal payments and intermittent payments on outstanding revolving debt instruments when surplus cash is available.

Larger scale expansions or acquisitions would be funded by debt or equity at the discretion of the directors of the Company.

The Company intends to repay existing non-revolving debt obligations over a period of time which will allow it to resume the payment of regular dividends at a sustainable rate. Current interest rates allow for scheduled amortization periods of between 10 years and 20 years, 3 months in meeting dividend objectives.

The Company will use normal course issuer bid(s), to repurchase for cancellation, shares trading on the open market when prices are below their inherent value.

Financing restrictions on dividends caused by debt covenants

27 FINANCIAL INSTRUMENTS

The Company's cash, trade and other receivables, trade and other payables, loans, and other borrowings are measured at amortized cost subsequent to initial recognition.

The fair value of financial assets and liabilities classified as loans and receivables and other financial liabilities approximate their carrying value due to the short-term nature of these financial instruments.

28 DEERFOOT INN & CASINO

The Company has a 91% controlling interest in Deerfoot Inn & Casino Inc., a legal joint venture formed for the construction and operation of Deerfoot. Decisions affecting Deerfoot require the consent of investors holding a minimum 60% interest in Deerfoot. A non-controlling interest ("NCI") is held by one additional investor.

The NCI holds a participating interest which entitles it to 9% of the income, assets, liabilities and equity of Deerfoot. Distributions from Deerfoot, in any form, must conform to the participating interest held by each investor. Distributions to the NCI for the Year totaled $0.5 ($1.1 - 2019).

The NCI has a contributing interest obligation to fund 12.25% of any capital requirements of Deerfoot that are not funded by operating cash flow or debt financing. Deerfoot is undertaking a 7,500 square foot expansion of its gaming and nongaming amenities. The NCI contributed $0.2 during the Year to the project representing 46.6% of the NCI's contributing interest responsibility for the expected total project cost of $3.5.

Each of Deerfoot's investors has a right of first refusal on any bonafide offer made for the other investor's interest in Deerfoot.

Gamehost Inc Notes to the Consolidated Financial Statements For the Years ended December 31, 2020 and 2019 (In millions of Canadian dollars, except share information)

29 PRIOR PERIOD ADJUSTMENT

During 2020, the Company discovered that profit and comprehensive profit attributable to non-controlling interest had been overstated and deferred tax expense had been understated since 2010. As a consequence, the equity attributable to non-controlling interest has been overstated and deferred tax liabilities have been understated. The errors have been corrected by restating each of the affected financial statement line items for the prior period. The following tables summarize the impacts on the Company's consolidated financial statements.

i. Consolidated statement of financial position

i. Consolidated statement of financial position
January 1, 2019	Impact of adjustment
	Previously reported Adjustments Restated
Total assets	174.4 - 174.4
Current liabilities Loans and borrowings Deferred tax liabilities	30.6 - 30.6 15.7 - 15.7 8.4 1.2 9.6
Total liabilities	54.7 1.2 55.9
Share capital Deficit	164.8 - 164.8 (53.1) 0.2 (52.9)
Equity attributable to shareholders Non-controlling interest	111.7 0.2 111.9 8.0 (1.4) 6.6
	119.7 (1.2) 118.5
December 31, 2019	Previously reported Adjustments Restated
Total assets	176.2 - 176.2
Current liabilities Loans and borrowings Lease liabilities Deferred tax liabilities	28.0 0.4 28.4 19.2 - 19.2 4.0 - 4.0 7.1 1.1 8.2
Total liabilities	58.3 1.5 59.8
Share capital Deficit	164.3 - 164.3 (54.4) - (54.4)
Equity attributable to shareholders Non-controlling interest	109.9 - 109.9 8.0 (1.5) 6.5
	117.9 (1.5) 116.4

Gamehost Inc

Notes to the Consolidated Financial Statements For the Years ended December 31, 2020 and 2019 (In millions of Canadian dollars, except share information)

29 PRIOR PERIOD ADJUSTMENT (Continued)

ii. Consolidated statement of profit and comprehensive profit

*ii. Consolidated statement of profit and comprehensive profit*
For the year ended December 31, 2019 Profit before income taxes Income tax expense	Impact of adjustment
	Previously reported Adjustments Restated 20.3 - 20.3 (3.7) (0.3) (4.0)
Profit and comprehensiveprofit	16.6 (0.3) 16.3
Profit and comprehensive profit attributable to: Shareholders Non-controllinginterest	15.5 (0.2) 15.3 1.1 (0.1) 1.0
	16.6 (0.3) 16.3
Earnings per share - basic and fully diluted	0.64 $ 0.01 ) ($ 0.63 $

There is no impact on the Company's total operating, investing or financing cash flows for the year ended December 31, 2019 or December 31, 2020.

30 SUBSEQUENT EVENTS

Normal course issuer bid

From January 1, 2021 through February 28, 2021, the Company purchased for cancellation 76,800 common shares under the 2020 Bid at prices averaging $6.35/common share plus commissions.

Investment property

A tenant elected to not renew a lease at the Company's investment property. The Company will focus on securing a franchisee with national recognition to maximize value from this class 'A' retail location. The existing tenant will vacate the property at the end of March 2021.

COVID-19

The Deerfoot hotel reopened in January 2021. The GOA has outlined its plan for reopening the Alberta economy in steps based on COVID-19 hospitalization numbers and trends with a minimum of three weeks to move between steps. Currently at Step 2 (450 hospitalizations or less), hospitalizations need to be reduced to 300 at Step 3 for casinos to reopen. At February 28, 2021, hospitalizations are at 250, but the required three weeks between steps means March 22, 2021 is the earliest possible date for a move to Step 3. Any number of factors may further delay reopening of casinos at that time.

The Company recorded additional COVID-19 relief subsidies approximating $0.7 under CEWS and CERS for January 2021 and February 2021.

The GOA announced on February 18, 2021, the new Enhanced COVID-19 Business Benefit to assist hard hit businesses that have experienced monthly revenue reductions of at least 60% will be available in April of 2021. The Company expects to be eligible for relief under the new program.

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Gamehost Inc. — Audit Report / Information 2020

46733_rns_2021-03-11_ecf6c9f2-c94b-4826-a747-90c957eed629.pdf

INDEPENDENT AUDITORS' REPORT

Opinion

Basis for Opinion

Key Audit Matters

How the Key Audit Matter Was Addressed in the Audit

Other Information

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

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

We also:

Gamehost Inc.

Consolidated Statements of Profit and Comprehensive Profit

Gamehost Inc.

Consolidated Statements of Financial Position

Gamehost Inc.

Consolidated Statements of Changes in Equity

Gamehost Inc.

Consolidated Statements of Cash Flows

1 REPORTING ENTITY

2 BASIS OF PREPARATION

3 CHANGES IN SIGNIFICANT ACCOUNTING POLICIES

4 SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of consolidation

i) Subsidiaries

4 SIGNIFICANT ACCOUNTING POLICIES (Continued)

(b) Financial instruments

i) Non-derivative financial assets

4 SIGNIFICANT ACCOUNTING POLICIES (Continued)

(c) Cash

(d) Inventories

(e) Property, plant and equipment

4 SIGNIFICANT ACCOUNTING POLICIES (Continued)

ii) Subsequent costs

iii) Depreciation

(f) Goodwill and intangible assets

Goodwill

Licenses

4 SIGNIFICANT ACCOUNTING POLICIES (Continued)

(g) Investment property

(h) Leases

i) As a Lessee

Right-of-use assets

Lease liabilities

4 SIGNIFICANT ACCOUNTING POLICIES (Continued)

(i) Impairment

4 SIGNIFICANT ACCOUNTING POLICIES (Continued)

ii) Non-financial assets

iii) Investment property

4 SIGNIFICANT ACCOUNTING POLICIES (Continued)

(j) Income taxes

4 SIGNIFICANT ACCOUNTING POLICIES (Continued)

(k) Employee benefits

(I) Revenue recognition

i) Gaming operations

ii) Hotel operations

4 SIGNIFICANT ACCOUNTING POLICIES (Continued)

iv) Investment property

(m) Finance income and finance costs

(n) Foreign currency

4 SIGNIFICANT ACCOUNTING POLICIES (Continued)

(o) Earnings per share

5 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

• Fair value of investment property

• Revenue recognition

• Estimated useful life of long-term assets

5 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (Continued)

• Lease liabilities

• Income taxes

• Goodwill and intangible assets

• Determination of CGUs

5 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (Continued)

• Segment Reporting

6 OPERATING SEGMENTS

Gamehost Inc

Notes to the Consolidated Financial Statements For the Years ended December 31, 2020 and 2019 (In millions of Canadian dollars, except share information)

6 OPERATING SEGMENTS (Continued)

7 OPERATING REVENUE

8 COST OF SALES BY NATURE

Gamehost Inc. Audit Report / Information 2020