INEO Tech Corp. - Capital/Financing Update 2021

No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise. This short form prospectus constitutes a public offering of these securities only in those jurisdictions where they may be lawfully offered for sale and only by persons permitted to sell these securities in those jurisdictions.

The securities offered hereby have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any state securities laws, and may not be offered or sold to, or for the account or benefit of, persons in the United States of America, its territories or possessions, any State of the United States or the District of Columbia (collectively, the “United States”) or “U.S. persons,” as such term is defined in Regulation S promulgated under the U.S. Securities Act (“U.S. Persons”), except pursuant to exemptions from the registration requirements of the U.S. Securities Act and applicable state securities laws. This prospectus does not constitute an offer to sell or a solicitation to buy any of such securities to, or for the account or benefit of, persons in the United States or U.S. Persons. See “Plan of Distribution”.

Information has been incorporated by reference in this short form prospectus from documents filed with securities commissions or similar authorities in Canada. Copies of the documents incorporated herein by reference may be obtained on request without charge from the Corporate Secretary of INEO Tech Corp., 105-19130 24th Ave Surrey, British Columbia, V3Z 3S9, Telephone: (604) 244-1895 and are also available electronically at www.sedar.com.

SHORT FORM PROSPECTUS

New Issue

March 3, 2021

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INEO Tech Corp.

Minimum $4,000,000 (11,111,111 Units) Maximum $6,090,120 (16,917,000 Units)

Price: $0.36 per Unit

This short form prospectus (the “ Prospectus ”) qualifies the distribution (the “ Offering ”) of a minimum (the “ Minimum Offering ”) of 11,111,111 units (the “ Units ”) of INEO Tech Corp. (the “ Company ” or “ INEO ”) for gross proceeds of $4,000,000 to a maximum (the “ Maximum Offering ”) of 16,917,000 Units for gross proceeds of $6,090,120 at a price of $0.36 per Unit (the “ Offering Price ”). Each Unit will consist of one common share (each a “ Common Share ”) in the capital of the Company (a “ Unit Share ”) and one-half of one Common Share purchase warrant (each whole warrant, a “ Warrant ”). Each Warrant will entitle the holder thereof to acquire, subject to adjustment in certain circumstances, one Common Share in the capital of the Company (each, a “ Warrant Share ”) at an exercise price of $0.55, until 5:00 p.m. (Eastern time) on the date that is 24 months from the Closing Date (as defined herein), subject to the terms of a warrant indenture (the “ Warrant Indenture ”) to be dated as of the Closing Date between the Company and Computershare Trust Company of Canada (the “ Warrant Agent ”), as warrant agent.

The Offering is made pursuant to an agency agreement (the “ Agency Agreement ”) dated March 3, 2021 among the Company and Beacon Securities Limited (the “ Lead Agent ”), as lead agent and sole bookrunner, and a syndicate of agents including PI Financial Corp. and Haywood Securities Inc. (together with the Lead Agent, the “ Agents ”). The Offering Price was determined by negotiation between the Company and the Lead Agent, on its own behalf and on behalf of the Agents, with reference to the prevailing market price of the Common Shares on the TSX Venture Exchange (the “ TSXV ”).

The Company’s Common Shares are listed and posted for trading on the TSXV under the symbol “INEO”. On February 12, 2021, the last trading day prior to the announcement of the Offering, the closing price of the Common Shares on the TSXV was $0.38. The Company has received conditional approval to list the Unit Shares, Warrant Shares and the Agents’ Shares (as defined below) to be distributed under this Prospectus on the TSXV. Listing will be subject to the Company fulfilling all of the requirements of the TSXV. See “ Plan of Distribution ”.

Per Unit Minimum Offering Maximum Offering	Price to the Public $0.36 $4,000,000 $6,090,120	Agents’ Fee(1) (2) (3)(5)(6) $0.0288 $320,000 $487,210	Net Proceeds to the Company (3)(4((5)6))
			$0.3312 $3,680,000 $5,602,910

(1) Pursuant to the Agency Agreement, the Company has agreed to pay to the Agents a fee equal to 8% of the gross proceeds of the Offering (the “ Agents’ Fee ”). As additional compensation, the Company has agreed to issue compensation options (the “ Compensation Options ”) to the Agents on the Closing Date (as defined below). The Compensation Options will entitle the Agents to purchase that number of Common Shares as is equal to 8% of the total number of Units (including any Additional Units (as hereinafter defined) issued upon exercise of the Over-Allotment Option (as hereinafter defined)) sold under the Offering (the “ Agents’ Shares ”), at an exercise price per Agents’ Share equal to the Offering Price for a period of 24 months from the Closing Date. The Agents’ Fee and the Compensation Options will be reduced to 3.5% for Units sold to certain purchasers designated by the Company on the presidents list up to a maximum of $350,000 (the “ President’s List ”). This Prospectus qualifies the distribution of the Compensation Options. See “ Plan of Distribution ”.
(2) The Agents have been granted an over-allotment option, exercisable, in whole or in part, at the sole discretion of the Agents, at any time not later than the 30th day after the Closing Date (as defined herein), to purchase from the Company up to an additional 2,537,550 Units of the Company (the “ Additional Units ”) at the Offering Price and/or up to 2,537,550 additional Unit Shares (“ Additional Unit Shares ”) and/or up to 1,268,775 additional Warrants (“ Additional Warrants ”), to cover the Agents’ over-allocation position, if any, and for market stabilization purposes (the “ Over-Allotment Option ”). The Over-Allotment Option may be exercised by the Agents: (i) to acquire Additional Units at the Offering Price; or (ii) to acquire Additional Unit Shares at a price of $0.35 per Additional Unit Share, or (iii) to acquire Additional Warrants at a price of $0.02 per Additional Warrant; or (iv) to acquire any combination of Additional Units, Additional Unit Shares and Additional Warrants, so long as the aggregate number of Additional Unit Shares and Additional Warrants which may be issued under the Over-Allotment Option does not exceed 2,537,550 Additional Unit Shares and 1,268,775 Additional Warrants, to cover the Agents’ over-allocation position, if any, and for market stabilization purposes. See “ Plan of Distribution ”.
(3) If the Over-Allotment Option is exercised in full for Additional Units, the total “Price to the Public”, maximum “Agents’ Fee” and “Net Proceeds to the Company” will be $7,003,638, $560,291 and $6,443,347, respectively (assuming no sales to purchasers on the President’s List). This Prospectus qualifies the grant of the Over-Allotment Option and the distribution of the Additional Units, Additional Unit Shares and Additional Warrants issuable upon exercise of the Over-Allotment Option. A purchaser who acquires securities forming part of the Agents’ over-allocation position acquires those securities under this Prospectus, regardless of whether the over-allocation position is ultimately filled through the exercise of the Over-Allotment Option or secondary market purchases. See “ Plan of Distribution ”.
(4) After deducting the Agents’ Fee, but before deducting the expenses of the Offering, which are estimated to be $250,000, which, together with the Agents’ Fee, will be paid out of the gross proceeds of the Offering.
(5) Assuming no exercise of the Over-Allotment Option
(6) Assuming no sales to purchasers on the President’s List.

The following table sets out the number of securities issuable under the Over-Allotment Option and the Compensation Options:

Agents’ Position Compensation Options Over-Allotment Option	Maximum Size or Number of Securities Available 1,353,360 Compensation Options(1) (2) 2,537,550 Units	Exercise Period or Acquisition Date Exercisable for a period of 24 months following the Closing Date Not later than the 30thday after the Closing Date	Exercise Price or Average Acquisition Price
			$0.36 per Agents’ Share $0.36 per Additional Unit ($0.35 per Additional Unit Share and $0.02 per Additional Warrant)

(1) If the Over-Allotment Option is exercised in full for Additional Units, the total “Number of Securities Available” will be 1,556,364 Compensation Options.

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(2) Assuming no sales to purchasers on the President’s List.

Unless the context otherwise requires, when used herein, all references to “Offering”, “Units”, “Unit Shares” and “Warrants” include the Additional Units, Additional Unit Shares and Additional Warrants issuable upon exercise of the Over-Allotment Option.

There is currently no market through which the Warrants offered hereby may be sold and purchasers of the Warrants may not be able to resell the Warrants purchased under this Prospectus. This may affect the pricing of the securities in the secondary market, the transparency and availability of trading prices, the liquidity of the securities, and the extent of issuer regulation. See “Risk Factors”.

The Offering is being conducted on a commercially reasonable efforts agency basis without underwriter liability by the Agents who conditionally offer the Units for sale if, as and when issued by the Company and accepted by the Agents, in accordance with the conditions contained in the Agency Agreement referred to under “Plan of Distribution” and subject to approval of certain legal matters relating to the Offering on behalf of the Company by McMillan LLP and on behalf of the Agents by WeirFoulds LLP.

The Offering is being made in British Columbia, Alberta and Ontario. The Units will be offered in each of such provinces through the Agents or their affiliates who are registered to offer the securities for sale in such provinces and such other registered dealers as may be designated by the Agents. Subject to applicable law, the Agents may offer the Units in such other jurisdictions outside of Canada as agreed between the Company and the Agents. See “ Plan of Distribution ”.

An investment in the Units involves a high degree of risk. Prospective investors should consider the risk factors described under “ Risk Factors ” in this Prospectus and in the Company’s Annual Information Form (as defined herein), which is incorporated herein and can be found on SEDAR at www.sedar.com, before purchasing the Units.

Subject to applicable laws and in connection with the Offering, the Agents may effect transactions which stabilize or maintain the market price of the Common Shares at levels other than those which otherwise might prevail on the open market. Such transactions, if commenced, may be discontinued at any time. See “ Plan of Distribution ”.

Subscriptions will be received subject to rejection or allotment in whole or in part and the right is reserved to close the subscription books at any time without notice. Provided the Minimum Offering is achieved, the closing of the Offering is expected to occur on or about March 10, 2021 or such later date as may be agreed upon by the Company and the Agents (the “ Closing Date ”). If subscriptions representing the Minimum Offering are not received within 90 days of the issuance of a receipt for the final prospectus, or if a receipt has been issued for an amendment to the final prospectus, within 90 days of the issuance of such receipt and in any event not later than 180 days from the date of receipt for the final Prospectus, the Offering will cease. The Agents, pending closing of the Offering, will hold in trust all subscription funds received pursuant to the provisions of the Agency Agreement. If the Minimum Offering is not completed, the subscription proceeds received by the Agents in connection with the Offering will be returned to the subscribers without interest or deduction, unless the subscribers have otherwise instructed the Agents. See “ Plan of Distribution ”.

Other than pursuant to certain exceptions, the Units will be available for delivery in the book-based system through CDS Clearing and Depository Services Inc. (“ CDS ”) or its nominee and will be deposited with CDS on the Closing Date in electronic form. A purchaser of Units will receive only a customer confirmation from the Agents or other registered dealer who is a CDS participant (a “ CDS Participant ”) through which the Units are purchased. CDS will record the CDS participants who hold Units on behalf of owners who have purchased Units in accordance with the book-based system. Purchasers who are not issued certificates evidencing the Unit Shares and Warrants comprising the Units which are subscribed for by them at closing are entitled, under the Business Corporations Act (British Columbia) (the “ BCBCA ”), to request that certificates be issued in their name. Such a request will need to be made through the CDS Participant through whom the beneficial interest in the securities is held at the time of the request.

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Prospective investors should rely only on the information contained or incorporated by reference in this Prospectus. The Company and the Agents have not authorized anyone to provide prospective investors with information different from that contained or incorporated by reference in this Prospectus. The Agents are offering to sell and seeking offers to buy the Units only in jurisdictions where, and to persons to whom, offers and sales are lawfully permitted. Readers should not assume that the information contained in this Prospectus is accurate as of any date other than the date on the cover page of this Prospectus.

Prospective purchasers are advised to consult their own tax advisors regarding the application of Canadian federal income tax laws to their particular circumstances, as well as any other provincial, foreign and other tax consequences of acquiring, holding or disposing of the Units, including the Canadian federal income tax consequences applicable to a foreign controlled Canadian corporation that acquires the Units. See “ Certain Canadian Federal Income Tax Considerations ”.

Unless otherwise indicated, all references to dollar amounts in this Prospectus are to Canadian dollars.

The Company’s head office and its registered and records office is located at 105-19130 24[th] Ave Surrey, British Columbia, V3Z 3S9.

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Page CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION ....................................... 1 MARKET AND INDUSTRY DATA............................................................................................................................ 3 ELIGIBILITY FOR INVESTMENT ............................................................................................................................. 3 DOCUMENTS INCORPORATED BY REFERENCE ................................................................................................ 4 MARKETING MATERIALS ....................................................................................................................................... 5 THE COMPANY .......................................................................................................................................................... 6 CONSOLIDATED CAPITALIZATION .................................................................................................................... 10 USE OF PROCEEDS .................................................................................................................................................. 10 PLAN OF DISTRIBUTION ........................................................................................................................................ 14 CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS .............................................................. 17 DESCRIPTION OF SECURITIES BEING DISTRIBUTED...................................................................................... 20 PRIOR SALES ............................................................................................................................................................ 22 TRADING PRICE AND VOLUME ........................................................................................................................... 23 RISK FACTORS ......................................................................................................................................................... 23 AUDITORS, TRANSFER AGENT, REGISTRAR AND WARRANT AGENT ....................................................... 26 LEGAL MATTERS .................................................................................................................................................... 26 INTEREST OF EXPERTS .......................................................................................................................................... 26 PURCHASERS’ STATUTORY RIGHTS .................................................................................................................. 27 ADDITIONAL INFORMATION ............................................................................................................................... 27 CERTIFICATE OF THE COMPANY ...................................................................................................................... C-1 CERTIFICATE OF THE PROMOTERS .................................................................................................................. C-2 CERTIFICATE OF THE AGENTS .......................................................................................................................... C-3

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

This Prospectus and the documents incorporated by reference herein contains information which may constitute “forward-looking information” within the meaning of applicable Canadian securities legislation. Forwardlooking information involves statements that are not based on historical information, but rather relate to future operations, strategies, financial results or other developments. Forward-looking information is necessarily based upon estimates and assumptions, which are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the Company’s control and many of which, regarding future business decisions, are subject to change. These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward-looking information made by or on the Company’s behalf. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. All factors should be considered carefully and investors should not place undue reliance on the Company’s forward-looking information as actual results may vary. Examples of such forward-looking information within this Prospectus and the documents incorporated by reference herein include statements relating to:

expected use of proceeds of the Offering;
completion and timing of the Offering;
plans and expectations for the Company’s further development and deployment of INEO Welcoming System ;
the anticipated costs and completion date of the Company’s technology advances of the INEO Welcoming System described under the heading “ Business Objectives and Milestones ”;
the anticipated timing of the completion of pilot testing with large retailers described under the heading “ Business Objectives and Milestones ”;
the anticipated launch of the Company’s third revenue stream involving the sale of data analytics;
the anticipated ability of the Company to generate increasing revenue from advertising on the INEO Welcoming Pedestals; and
the Company’s expectations for the demand for the Company’s services.

Forward-looking information reflects the Company’s current views with respect to expectations, beliefs, assumptions, estimates and forecasts about the Company’s business and the industry and markets in which the Company operates. Forward-looking information is not a guarantee of future performance and involves risks, uncertainties and assumptions, which are difficult to predict. Assumptions underlying the Company’s expectations regarding forward-looking statements or information contained in this Prospectus include, among others:

the Company is providing a new and innovative service, which the Company anticipates will gain anticipated commercial acceptance, in particular by large retailers;
that the advertising partners the Company contracts with will sell advertising space on the INEO Welcoming Pedestals ;
that consumers will continue to frequent the retail outlets in the sectors that the Company provides its services to;

the ability of the Company to protect its intellectual property;
the size of the market for loss prevention systems;
the Company’s ability to generate revenue from its advertising and data analytics revenue streams; success with the Company’s strategies and achieving its business objectives;
the Company’s ability to raise sufficient funds from equity or other financings in the future to support its operations, and general business and economic conditions.

The foregoing list of assumptions is not exhaustive.

Persons reading this Prospectus are cautioned that forward-looking information is only a prediction, and that the Company’s actual future results or performance are subject to certain risks and uncertainties including:

the sufficiency of the Company’s working capital, anticipated operating cash flow or its ability to raise additional funds on satisfactory terms, until the Company is able to operate profitably;
the Company’s competitors may launch and provide the same or similar service to that provided by the Company;
the Company is providing a new and innovative product, for which there is no guarantee it will receive market acceptance;
the ability of the Company to successfully complete the roll out of the INEO Welcoming System to retail clients on the scale necessary to generate profitability;
the results of the pilot testing of the Company’s services with large retailers may prove unsuccessful, and may lead to a slower adoption of the Company’s services than anticipated;
ability of the Company to commercially manufacture the INEO Welcoming Pedestals and provide the INEO Welcoming System service;
ability of the Company to protect its intellectual property;
whether the key personnel will continue their employment with the Company.
the effect of COVID-19 and other pandemics, and the response of governments thereto, on the retailers, which may curtail consumer store attendance and the thereby the value of the Company’s services to retailers, which may affect the adoption of the Company’s services; and
that there will continue be demand for the Company’s loss prevention systems.

This list is not exhaustive of the factors that may affect any of forward-looking statements or information of the Company. Further, any forward-looking statement speaks only as of the date on which such statement is made, and, except as required by applicable law, the Company does not undertake any obligation to update any forwardlooking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for management of the Company to predict all such factors and to assess in advance the impact of each such factor on the business of the Company or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement. See “ Risk Factors ”.

Although the Company believes that the expectations conveyed by the forward-looking statements are reasonable based on the information available to it on the date such statements were made, no assurances can be given

as to future results, approvals or achievements. The forward-looking statements contained in this Prospectus and the documents incorporated by reference herein are expressly qualified by this cautionary statement.

MARKET AND INDUSTRY DATA

Certain information in this Prospectus or in documents incorporated by reference herein is obtained from third party sources (including industry publications surveys and forecasts), including public sources, as well as, and management studies and estimates. There can be no assurance as to the accuracy or completeness of such information.

Unless otherwise indicated, the Company’s estimates are derived from publicly available information released by independent industry analysts and third-party sources, as well as data from its internal research, and include assumptions made by the Company which it believes to be reasonable based on its knowledge of the industry and markets in which it operates. Although the Company believes these sources to be generally reliable, market and industry data are subject to interpretation and cannot be verified with complete certainty due to limits on the availability and reliability of raw data, the voluntary nature of the data gathering process, and other limitations and uncertainties inherent in any statistical survey. Although believed to be reliable, management of the Company has not independently verified any of the data from third party sources unless otherwise stated.

While the Company believes the market position, market opportunity, and market share information included in this Prospectus are generally reliable, such information is inherently imprecise. In addition, projections, assumptions, and estimates of the future performance of the Company and the future performance of the industry and markets in which it operates are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described under the headings “ Cautionary Note Regarding Forward-Looking Statements” and “ Risk Factors”.

ELIGIBILITY FOR INVESTMENT

In the opinion of McMillan LLP, counsel to the Company, and WeirFoulds LLP, counsel to the Agents, based on the current provisions of the Income Tax Act (Canada) and the regulations thereunder (collectively, the “ Tax Act ”) and any proposal to amend the Tax Act publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof (“ Tax Proposals ”), as of the date hereof, the Unit Shares, Warrants and Warrant Shares, if issued on the date hereof, would be “qualified investments” under the Tax Act for trusts governed by registered retirement savings plans (“ RRSPs ”), registered retirement income funds (“ RRIFs ”), deferred profit sharing plans, registered education savings plans (“ RESPs ”), registered disability savings plans (“ RDSPs ”) and tax-free savings accounts (“ TFSAs ”), all as defined in the Tax Act (collectively “ Deferred Income Plans ”), provided that:

(i) in the case of Unit Shares and Warrant Shares, (a) the Unit Shares or Warrant Shares, as applicable, are listed on a “designated stock exchange” for the purposes of the Tax Act (which currently includes the TSXV), or (b) the Company qualifies as a “public corporation” other than a “mortgage investment corporation” (as defined in the Tax Act); and
(ii) in the case of the Warrants, (a) the Warrants are listed on a designated stock exchange in Canada for the purposes of the Tax Act, or (b) the Warrant Shares are qualified investments as described in (i) above and the Company is not, and deals at arm's length with each person who is, an annuitant, a beneficiary, an employer or a subscriber under or a holder of such Deferred Income Plan.

Notwithstanding that a Unit Share, Warrant or Warrant Share may be a qualified investment as discussed above, if the Unit Share, Warrant or Warrant Share is a “prohibited investment” for the purposes of the Tax Act, the holder of a TFSA or RDSP, the annuitant under an RRSP or RRIF or, the subscriber of an RESP which holds such Unit Share, Warrant or Warrant Share will be subject to penalty taxes as set out in the Tax Act. The Unit Share, Warrant or Warrant Share will be a prohibited investment for a relevant Deferred Income Plan if the holder of the TFSA or RDSP, the subscriber of the RESP or the annuitant under the RRSP or the RRIF, as the case may be, does not deal at arm’s length with the Company for the purposes of the Tax Act or has a “significant interest” (as defined in the Tax Act for purposes of the prohibited investment rules) in the Company. However, a Unit Share or Warrant

Share will not be a “prohibited investment” if such securities are “excluded property” (as defined in the Tax Act for purposes of the prohibited investment rules) for trusts governed by such RRSP, RRIF, RDSP, RESP or TFSA.

Purchasers who intend to hold Unit Shares, Warrants or Warrant Shares through a Deferred Income Plan should consult their own tax advisors in regard to the application of these rules in their particular circumstances .

DOCUMENTS INCORPORATED BY REFERENCE

The following documents filed with the securities commission or similar regulatory authority in each of the Provinces of British Columbia, Alberta and Ontario, are available at www.sedar.com and are specifically incorporated by reference into, and form an integral part of, this Prospectus:

the annual information form of the Company for the year ended June 30, 2020, dated December 3, 2020 (the “ Annual Information Form ”);
the audited consolidated financial statements of the Company, and the notes thereto for the years ended June 30, 2020 and 2019, together with the auditors’ report thereon and the notes thereto;
the auditor’s report on the audited consolidated financial statements of the Company for the years ended June 30, 2019 and 2018;
the management’s discussion and analysis of financial condition and results of operations for the year ended June 30, 2020;
the updated unaudited condensed consolidated interim financial statements of the Company, and the notes thereto for the three and six months ended December 31, 2020 and 2019, as filed on SEDAR on March 1, 2021;
the updated management’s discussion and analysis of financial condition and results of operations for the three and six months ended December 31, 2020, as filed on SEDAR on March 1, 2021;
the Company’s investor presentation dated February 16, 2021 (the “ Investor Presentation ”);
the template version of the term sheet relating to the Offering dated February 16, 2021;
the material change report of the Company relating to the upsizing of the Offering dated February 18, 2021;
the template version of the term sheet relating to the Offering dated February 18, 2021; and
the notice of meeting and management information and proxy circular for the Company’s annual general meeting to be held on March 18, 2021, as filed on SEDAR on February 19, 2021.

Material change reports (other than confidential reports), business acquisition reports, annual financial statements, interim financial statements, the associated management’s discussion and analysis of financial condition and results of operations and all other documents of the type referred to in section 11.1 of Form 44-101F1 of National Instrument 44-101 – Short Form Prospectus Distributions to be incorporated by reference in a short form prospectus, filed by the Company with a securities commission or similar regulatory authority in Canada after the date of this Prospectus and before completion or withdrawal of the Offering, will be deemed to be incorporated by reference into this Prospectus. The documents incorporated or deemed to be incorporated herein by reference contain meaningful and material information relating to the Company and readers should review all information contained in this Prospectus and the documents incorporated or deemed to be incorporated by reference herein.

Any statement contained in a document incorporated or deemed to be incorporated by reference herein will be deemed to be modified or superseded for the purposes of this Prospectus to the extent that a statement contained in this Prospectus or in any subsequently filed document that also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any statement so modified or superseded will not constitute a part of this Prospectus, except as so modified or superseded. The modifying or superseding statement need not state that it has modified or superseded a prior statement or include any other information set forth in the statement or document that it modifies or supersedes. The making of such a modifying or superseding statement will not be deemed an admission for any purpose that the modified or superseded statement, when made, constituted a misrepresentation, an untrue statement of a material fact or an omission to state a material fact that is required to be stated or that is necessary to make a statement not misleading in light of the circumstances in which it was made.

Copies of the documents incorporated herein by reference may also be obtained on request without charge from the Corporate Secretary of the Company from 105-19130 24th Ave Surrey, British Columbia, V3Z 3S9, Telephone: (604) 244-1895.

MARKETING MATERIALS

The following “marketing materials” (as such term is defined in NI 41-101) have been filed with the Securities Commissions in connection with this Offering and are incorporated by reference into this prospectus (collectively, the “ Marketing Materials ”):

the template version of the Investor Presentation; and
the template version of the term sheet dated February 16, 2021 relating to the Offering.

The Marketing Materials are not part of this Prospectus to the extent that the contents of the Marketing Materials are modified or superseded by a statement contained in this Prospectus. Any “template version” of any “marketing materials” (each as defined in National Instrument 41-101 – General Prospectus Requirements ) filed under the Company’s profile on SEDAR at www.sedar.com after the date of this Prospectus and before the termination of the distribution under the Offering (including any amendments to, or an amended version of, the Marketing Materials) will be deemed to be incorporated by reference into this Prospectus.

THE COMPANY

The Company was incorporated under the BCBCA on March 4, 2008. On January 24, 2020 the Company completed a reverse takeover transaction (the “ Qualifying Transaction ”) with INEO Solutions Inc. and changed its name to INEO Tech Corp.

The head office and registered office of the Company is located at 105-19130 24th Ave Surrey, British Columbia, V3Z 3S9. The Company’s Common Shares are listed on the TSXV under the trading symbol “INEO”.

The Company has one directly held wholly-owned subsidiary, INEO Solutions Inc. (“ Solutions ”). Solutions was incorporated on July 14, 2016 under the BCBCA. Solutions was founded with the intent of developing and commercializing what is now the INEO Welcoming Network . Solutions amalgamated with a wholly-owned subsidiary of the Company in connection with the Qualifying Transaction, with the amalgamated company continuing under the name INEO Solutions Inc. Solutions has one wholly-owned subsidiary, FG Manufacturing Inc., which was incorporated under the BCBCA on December 15, 2016. FG Manufacturing produces and assembles components for the INEO Welcoming Pedestal .

Business of the Company

The Company is engaged in the business of the delivery of retail loss-prevention (anti-theft) systems, which it is advancing with the development and operation of its proprietary INEO Welcoming Network . The INEO Welcoming Network consists of a network of INEO Welcoming Pedestals . The INEO Welcoming Pedestal is an integrated digital signage and loss-prevention pedestal strategically deployed at the entrances of retail stores to greet customers with targeted, brand-positive messaging, while capturing meaningful analytics information. This location has been historically reserved for retail loss-prevention (anti-theft) systems. The INEO Welcoming Pedestal deploys the Company’s patented technology to incorporate digital signage (including advertising) within the loss preventionsystem.

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Typical INEO Welcoming Pedestal

While the INEO Welcoming Network is agnostic to retailer type, the Company has identified seven key markets for its systems: liquor and alcohol, grocery, clothing, electronics, mass merchant, home improvement and pharmacy/beauty retailers. Currently, the Company has focused its efforts on rolling out the INEO Welcoming Pedestal to independent liquor store retailers in British Columbia and Alberta. The Company currently has INEO Welcoming Pedestals installed in 75 locations, and anticipates expanding installations to 100 locations by the end of the third fiscal quarter of 2021. The digital display features currently available in the INEO Welcoming Network include store messaging, social media feeds, daily and weekly flyers, amber alerts, severe weather warnings and live sports scores.

Revenue Generation Strategy

The Company currently owns all rights, title and interest to the INEO Welcoming Network and INEO Welcoming Pedestals for worldwide distribution and installation. The Company generates revenue through:

Until the second quarter of Fiscal 2021, all revenue was generated through ongoing, periodic sales to retailers of loss-prevention (anti-theft) consumables (security tags and labels), both with legacy systems and with the INEO Welcoming Pedestal
Commencing in the second quarter of Fiscal 2021, monthly recurring sales to brands and retailers of targeted digital-media advertising on the Company’s INEO Welcoming Pedestals

The artificial intelligence technology employed by the INEO Welcoming Pedestal also acquires traffic data to understand the demographic mix of retail customers at every location. The Company anticipates launching a third revenue stream in the fourth quarter of Fiscal 2021, to be generated by monthly recurring sales to brands and retailers of analytics data gathered from the INEO Welcoming Pedestals .

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Loss Prevention

The loss-prevention technology made available through the INEO Welcoming Pedestal includes industry leading tag and label detection with solid range and filtering of false positive. The system captures 10 seconds of video on each side of security events and streams the video to cloud storage for anytime viewing and analysis.

INEO’s cloud management dashboard allows retailers to remotely confirm that the INEO Welcoming Pedestal is operational and connected. In the case of security alarm events, the cloud management dashboard provides alarm event notifications and trends, allows users to search and compare alarm events, and provides access to security event video playback and 90-day video storage.

Predictive Analytics

The Predictive Analytics offered through INEO’s Welcoming Pedestals and Welcoming Network include:

Location Performance – the Company’s data visualization tools give its retailer clients detailed reports to measure the performance of each of their locations. Comparisons can be with other stores, across groups of stores and regions of stores (including across cities, provinces/states and countries).
Visitor reporting – the Company allows the retailer to understand the characteristics of the customer traffic entering their retail stores. From simple counts to much deeper analysis of time of day, week, and month, with trending and pattern data, to help them tune the operation, marketing, merchandising and purchasing for their business.
Competitive Intelligence – the Company delivers its customers the ability to benchmark their retail traffic data against other locations or groups of locations.
Neighbourhood Profiling – the Company helps its retail customers understand the unique characteristics of each retail location. Using third party data sets, the Company gives its customers a detailed look at the context of the expected retail traffic in the trading area, or identified geocodes, within a designated distance surrounding each store. Examples of third party datasets include census data and weather data.

Advertising Model for Independent Retailers

Under this model, the Company currently anticipates that retailers will receive the INEO Welcoming Pedestal free of charge, along with an allocation of 15% of the INEO Welcoming Pedestal’s screen time. The Company will sell advertising space on the remaining 85% of the INEO Welcoming Pedestal’s screen time, and will collect all advertising revenue generated from the INEO Welcoming System, which the Company anticipates will be approximately $500 (net) monthly per retail location. The Company expects its predictive analytics services will be sold to retailers for a monthly fee of $19 to $49 per retail location. The Company will pay for the cost of manufacturing and installation of its INEO Welcoming Systems , and the Company will continue to own all deployed INEO Welcoming Pedestals and will provide all required ongoing maintenance free of charge to customers. Retailers can also purchase loss prevention consumables (such as security tags and labels) directly from the Company.

The Company projects $500 monthly revenue from advertising for each INEO Welcoming System pedestal that has been operational for at least six months. This number is based on two key sources: (i) data the Company has from advertisers currently paying for space on the INEO Welcoming Pedestals , and (ii) the opinion of industry experts that the Company has hired to sell advertising on the INEO Welcoming System . The Company has disclosed two major advertisers currently paying the Company for advertising on the INEO Welcoming System and these advertisers are currently paying higher than the Company’s projected rates used to calculate the $500 per INEO Welcoming Pedestal monthly revenue. The projected rates for selling advertising are based upon selling advertising space to six advertisers a month per INEO Welcoming System, with each advertiser paying $200/month. The Company pays a commission to the agency selling the advertising and nets approximately $140/month from each of the six advertisers. Making allowances for long term, high volume deals, and for the possibility of not all of the advertising space being sold every month, the Company is heeding the advice from industry experts hired to sell the advertising and is projecting $500 per month per INEO Welcoming Pedestal as a reasonable estimate on which to base the Company’s forecast and projections .

SaaS Model for Large Retail Chains

Under this model, the retailer will control 100% of the advertising time on the INEO Welcoming Pedestal, selling the available advertising space to their vendors within their co-op marketing programs or utilizing the advertising space for their own services and products. The Company, or a partner (such as Prosegur, if a definitive agreement is concluded), will fund all hardware and installation costs. INEO will collect a monthly SaaS license fee of $150-250 monthly per retail location. The Company, or a partner will collect an additional $150-250 monthly per retail location, depending on which entity supplies the hardware. The Company will deliver predictive analytics to the retailer at a cost of $19 to $49 per retail location. The Company will also manage the network and provide ongoing online support.

Recent Developments

Letter of Intent with Prosegur

On December 30, 2020, the Company entered into a letter of intent with Prosegur EAS USA Inc., a subsidiary of Prosegur Compañía de Seguridad, S.A, a multinational security company headquartered in Madrid, Spain (the “ LOI ”). Prosegur, among other things, provides security solutions to a number of large retail chain stores. The LOI sets out in general terms the parties’ objective, subject to completion of pilot testing of the Company’s products with retailers selected by Prosegur, for Prosegur to license, manufacture and distribute the INEO Welcoming Network to Prosegur’s retail client base. The Company has provided INEO Welcome Pedestals to Prosegur for pilot testing, and is in discussions regarding the terms of a definitive agreement with Prosegur. Management anticipates that the Company will enter into a definitive agreement with Prosegur on or before March 31, 2021 .

Management anticipates that the Prosegur relationship will reduce costs to the Company as Prosegur will assume responsibility for manufacturing, marketing, selling and installation of INEO Welcoming Systems in their markets. As part of the definitive agreement with Prosegur, the Company anticipates receiving ongoing SaaS revenue from the retailer for the operation and management of the INEO Welcoming Network. The failure to finalize a formal agreement with Prosegur may slow the rollout to large retailers, as the Company will need to handle the logistical aspects of the rollouts itself, but the Company does not expect it will impact the SaaS model with large retailers. There is no guarantee that a definitive agreement will be successfully negotiated and entered into, or that the pilot testing will be successful.

COVID-19 Pandemic Update

Certain COVID-19 related risks could result in delays or additional costs in order for the Company to achieve its business objectives. The impact of the COVID-19 pandemic has had and continues to have major implications across many economic activities, including those of the Company. At this time, it is not possible to predict the duration or magnitude of the adverse results of the outbreak, however, management believes that to date the Company has effectively managed the impact of the COVID-19 pandemic on the Company’s business. By focusing sales of its INEO Welcoming Pedestals and the INEO Welcoming Network on liquor and alcohol retailers, which were considered “essential services” by governments in the Provinces in which the Company operates, the Company was able to continue executing on its core business plan resulting in the COVID-19 pandemic having had little impact on the Company’s business to date. As the Company expands its focus to targeting large retail clients, there is an increased risk that the continued COVID-19 pandemic will have material effect on the operations of these potential large retail clients’ and therefore on the expansion of the INEO Welcoming Network and the Company’s revenue. To mitigate this risk, the Company is continuing to focus on retail clients who are considered “essential services” to consumers and the economy as a whole. This includes retailers in the grocery, pharmacy, home improvement and business supplies sectors. COVID-19 continues to pose a risk to the timing of deployment of the Company’s products and services to retailers, including logistical, shipping and supply chain risks, and management of the Company will remain vigilant in its efforts to manage the Company’s business and growth strategy appropriately as circumstances develop.

CONSOLIDATED CAPITALIZATION

There have been no material changes in the equity or loan capital structure of the Company since December 31, 2020. For details of equity issuances by the Company in the twelve months preceding the date of this Prospectus, see “ Prior Sales ”.

The following table sets forth the consolidated capitalization of the Company as at December 31, 2020, adjusted to give effect to the Offering. This table should be read in conjunction with the consolidated financial statements of the Company and the related notes and management’s discussion and analysis of financial condition and results of operations in respect of those statements that are incorporated by reference in this Prospectus.

	As at December 31, 2020 before giving effect to the Offering	As at December 31, 2020 after giving effect to the Minimum Offering(2)(3)	As at December 31, 2020 after giving effect to the Maximum Offering(2(3)	As at December 31, 2020 after giving effect to the Maximum Offering, assuming exercise of the Over- Allotment Option in full(3)
Common Shares(1)	$7,505,487 (40,680,740)	$11,505,4874) (51,791,851)	$ 13,595,607(4) (57,597,740)	$14,509,125(4) (60,135,290)
Warrants	262,181	5,817,736	8,720,681	9,989,456
Stock Options(5)	3,650,863	3,650,863	3,650,863	3,650,863
Compensation Options	-	888,889	1,353,360	1,556,364

Notes:

(1) The Company is authorized to issue an unlimited number of Common Shares. (2) Assuming no exercise of the Over-Allotment Option.

(3) Before deducting the Agents’ Fee and the estimated costs of the Offering. (4) Includes gross proceeds of the Offering.

(5) Each option entitles the holder to acquire one common share. See “ Prior Sales ”.

USE OF PROCEEDS

As at January 31, 2021, the Company had working capital of approximately $239,000. The estimated net proceeds to be received by the Company from the Offering, after deducting the Agents’ Fee and estimated expenses of the Offering of $250,000, will be $3,430,000 in the case of the Minimum Offering and $3,890,000 in the case of the Maximum Offering. Based on the Company’s estimated working capital of $239,000 as at January 31, 2021, the Company expects to have approximately $3,669,000 of total available funds upon completion of the Minimum Offering and approximately $5,591,900 of total available funds in the case of the Maximum Offering (before giving effect to any exercise of the Over-Allotment Option and assuming no sales to purchasers on the President’s List). The Company intends to use the net proceeds of the Offering together with its existing cash for the following purposes:

Use of Proceeds	Minimum Offering ($)	Maximum Offering ($)(1)
Capital Expenditures: Welcoming Systems (liquor stores) Welcoming Systems (largeretailer)	417,000 200,000	417,000 200,000

Use of Proceeds	Minimum Offering ($)	Maximum Offering ($)(1)
OfficeEquipment	28,000	28,000
Research and Development Artificial Intelligence Data Analytics(2) EAS Research(3) Intellectual Property(4) Welcoming Network MediaInterface(5)	463,000 338,000 50,000 225,000	463,000 338,000 50,000 225,000
Operating Expenses Salaries and Wages Prosegur Support(6) Professional Fees Marketing Travel Rent and GeneralOffice Overhead	1,061,000 50,000 138,000 152,000 55,000 352,000	1,061,000 50,000 138,000 152,000 55,000 352,000
Unallocated working capital	140,000	2,062,900
Total	$3,669,000	$5,591,900

Notes:

(1) If the Over-Allotment is exercised in full, the net proceeds to the Company from the Offering, after deducting the Agents’ Fee and estimated expenses of the Offering, will be $6,430,347 (an additional $838,447 of available funds). Any additional proceeds received from the exercise of the Over-Allotment Option will be added to unallocated working capital. Prior to the completion of the Offering, the Company has sufficient cash and working capital to cover general and administrative expenses and operating expenses for a period of six months, after which time the Company would need to seek additional financing or reduce expenditures.

(2) Relates to the launch of advanced data analytics deployed under a monthly fee model. The Company is aiming to complete this objective by October 31, 2021. See “ Business Objectives”, “Technology Objectives” and “Business Milestones” below.
(3) Relates to the integration and perfection of AM 58KHz loss prevention tag-detection technology inside the INEO Welcoming System. See “ Business Objectives ”, “ Technology Objectives ” and “ Business Milestones ” below
(4) Relates to the the filing of additional patent and trademark applications to further protect the intellectual property assets of the Company. See “ Business Objectives”, “Technology Objectives” and “Business Milestones” below.
(5) Relates to the delivery of the INEO Welcoming Network Media Interface , an online self-serve publishing portal to allow brands, agencies and retailers to add content to the INEO media network without any reliance on INEO personnel. See “ Business Objectives”, “Technology Objectives” and “Business Milestones” below.
(6) In the event that the Prosegur agreement is not finalized, any residual funds will be added to general working capital.

Although the Company intends to use the proceeds from the Offering as set forth above, the actual allocation of the net proceeds may vary depending on future developments or unforeseen events. See “ Risk Factors ”.

Pending the use of proceeds outlined above, the Company intends to invest the net proceeds of the Offering in investment grade, short-term, interest bearing securities. The Chief Financial Officer is responsible for executing the Company’s investment policies.

During the year ended June 30, 2020, the Company had revenue of $526,954. During the year ended June 30, 2020 the Company had negative cash flow from operating activities, reported a loss and comprehensive loss of $5,763,004 (including a non-cash loss $4,804,407 on completion of the reverse takeover of INEO Solutions Inc. by the Company) and loss per share of $0.25. The Company anticipates it will continue to have negative cash flow from

operating activities and net losses in future periods unless and until commercial sales are achieved for the INEO Welcoming System . A portion of the proceeds from the Offering will be used to fund negative cash flow from operating activities in future periods.

Business Objectives and Milestones

The Company is not yet profitable and will use the proceeds of the Offering to fund its operations for a minimum of the next twelve months while it pursues its business objectives of commercializing and rolling out the INEO Welcoming System to a larger network of retailers, and adding further technology features to the INEO Welcoming System to meet customer needs.

Business and Technology Objectives

The Company’s business objectives for the next twelve months are as follows:

INEO Welcoming Network Expansion
The deployment of the INEO Welcoming System into at least 100 additional liquor retailers in western Canada . Adding more locations with INEO Welcoming Systems in liquor stores will add to the Company’s number of screens available to be sold for advertising. While the Company has already secured advertising contracts with several large national brands, discussions between the Company and potential advertising clients have indicated that advertisers prefer to make fewer but larger agreements to place their advertisements in various markets. Management believes that adding more locations to the INEO Welcoming Network will help make it easier to attract additional large national brands to the INEO Welcoming Network and increase revenue opportunities.
Securing and completing pilot testing for the INEO Welcoming System with large retailer customers. Running pilots is the first stage of landing national retailers to use the INEO Welcoming System . Within large retailers there are often many departments which need to sign off on deployments of new technologies and business processes and pilots serve the purpose of getting all parties agreeing to move ahead. INEO is currently working through the sales cycle of securing pilot testing agreements with large retailers.
The commencement and execution of the rollout of the INEO Welcoming System in large retail stores. Upon and subject to the successful completion of the pilot testing phase, full scale rollouts of the INEO Welcoming System will commence. This type of roll-out will require extensive planning and logistics coordination, including but not limited to supply chain, manufacturing and delivery and installation coordination.
The completion of the pilot project and completion of a definitive services and licensing agreement with Prosegur, followed by the initial launch of INEO Welcoming System in retailers identified as partners of Prosegur.
Advanced Analytics Development
Release of data analytics detection ability which includes customers’ ages and customer satisfaction score (“ CSAT ”) (a standard retailer score used to assess customer happiness), in addition to the integration of third-party datasets, to enhance the Company’s retailer data-visualization offering. To date the Company’s analytics has focused on raw customer count and gender count, visualized in a series of customer friendly interfaces. Adding age and CSAT to the Company’s analytics product is expected to expand the usefulness of the Company’s products to retailer marketing departments. The Company believes that adding third-party datasets will provide a richer depth of analysis. The Company’s goal is to become a market leader in customer data visualization for retailers.
The launch of the sale of advanced data analytics under a monthly fee model.
EAS Research and Patent Extensions

Product release of INEO Welcoming System utilizing AM 58KHz frequency for the detection of loss-prevention tags and labels. The Company has to date shipped all of its INEO Welcoming Systems in the 8.2MHz frequency; however, a many large US retailers utilize systems in the 58KHz frequency. The Company considers successful adoption of the AM 58KHz frequency within the INEO Welcoming System as a key factor to ultimately gaining market share in the US retailer market.
Filing of additional patent applications and grants of additional patents. As part of its research and development process, the Company evaluates ongoing advances in its technology to determine the suitability of applying for additional patents. Currently the Company has the following patents and trademarks:
- The Company was granted Canadian patent 2,936,044, COMBINATION MEDIA DISPLAY AND ELECTRONIC ARTICLE SURVEILLANCE PEDESTAL, (the “ Flashgate Patent ”) on October 22, 2019. The Flashgate Patent has a term of 20 from the date the original patent application was filed. In furtherance of the Flashgate Patent, the Company was granted USPTO patent 10,614,691 on April 7, 2020.
- Further to the grant of the Flashgate Patent, the Company has made a Patent Cooperation Treaty (PCT) filing for other jurisdictions worldwide.
- The Company has registered trademarks for “Flashgate” and “INEO”.The Company expects to file additional patent applications as it continues to develop its technology. The Company also expects patents to be issued in 26 European countries as a result of the PCT filing made in respect of the Flashgate Patent in 2019.
Expansion and Enhancement of the INEO Welcoming Network Media Interface
The delivery of the Media Network Interface , an online self-serve publishing portal to allows brands, agencies and retailers to add content to the INEO media network without any reliance on INEO personnel. Adding self service features will allow the Company to scale more efficiently and let large customers utilize their own personnel to schedule and deploy their own media assets to the INEO Welcoming Network .
The integration of additional programmatic advertising partners. Adding additional programmatic advertising partners to the INEO Welcoming System requires an integration of the Company’s technology with its advertising partners’ technology. The Company has expended the funds to build the application programming interface necessary to allow its system to communicate with the systems of its advertising partners, however, each integration will take time to test and deploy.

Milestones

The milestones the Company must achieve in order to accomplish the business and technology objectives set out above are as follows:

Business/Technology Objective		Expected Timing	Expected Costs
INEO Welcoming Network Expansion	Deployment and roll-out of 100 additional INEO_Welcoming Systems_ in liquor stores	September 30, 2021	$417,000
INEO Welcoming Network Expansion	Deploying the first pilot project and initial roll-out of INEO_Welcoming_ _System_with a large retail customer	September 30, 2021	$200,000
INEO Welcoming Network Expansion	Deployment of pilot locations with Prosegur(operationalexpense)	April 30, 2021	$50,000
Advanced Analytics Development	Release of accurate and precise identification of age and CSAT score with integrated with data visualizationtools, pluslaunchwith	October 31, 2021	$463,000

	monthly fee business model
EAS Research	Integration of AM 58KHz technology inside of INEO Welcoming System	June 30, 2021	$338,000
Intellectual Property	Filing of additional patent applications and trademarks	December 31, 2021	$50,000
Expansion and Enhancement of the INEO Welcoming Network Media Interface	Release of_INEO Welcoming_ Network Media Interface.	August 31, 2021	$225,000

PLAN OF DISTRIBUTION

Pursuant to the Agency Agreement, the Company has appointed the Agents to act as its agent to conduct the offering in the provinces of British Columbia, Alberta and Ontario (the “ Offering Jurisdictions ”) on a commercially reasonable efforts basis of a Minimum Offering of 11,111,111 Units at the Offering Price for gross proceeds of $4,000,000 and a Maximum Offering of 16,917,000 Units at the Offering price for gross proceeds of $6,090,120. The obligations of the Agents under the Agency Agreement are conditional and may be terminated in their discretion on the basis of their assessment of the state of the financial markets and in certain other stated circumstances. The Agents have agreed to assist with the Offering on an agency basis and are not obligated to purchase any of the Units for their own account.

Each Unit will consist of one Unit Share and one-half of one Warrant. Each Warrant will entitle the holder to acquire, subject to adjustment in certain circumstances, one Warrant Share at an exercise price of $0.55 until 5:00 p.m. (Eastern Time) on the date that is 24 months from the Closing Date, after which time the Warrants will be void and of no value. This Prospectus qualifies the distribution of the Unit Shares and the Warrants included in the Units.

The Warrants will be created and issued pursuant to the terms of the Warrant Indenture. The Warrant Indenture will contain provisions designed to protect holders of the Warrants against dilution upon the happening of certain events. See “ Description of Securities Being Distributed ”.

The Company has also granted the Agents the Over-Allotment Option, exercisable in whole or in part in the sole discretion of the Agents for a period of 30 days from and including the Closing Date, to purchase up to 2,537,550 Additional Units and/or up to 2,537,550 Additional Unit Shares and/or up to 1,268,775 Additional Warrants, to cover over-allotments, if any, and for market stabilization purposes. The Over-Allotment Option may be exercised by the Agents: (i) to acquire Additional Units at the Offering Price; or (ii) to acquire Additional Unit Shares at the price of $0.35 per Additional Unit Share; or (iii) to acquire Additional Warrants at a price of $0.02 per Additional Warrant; or (iv) to acquire any combination of Additional Units, Additional Unit Shares and Additional Warrants, so long as the aggregate number of Additional Unit Shares and Additional Warrants which may be issued under the Over-Allotment Option does not exceed 2,537,550 Additional Unit Shares and 1,268,775 Additional Warrants. This Prospectus also qualifies the grant of the Over-Allotment Option and the distribution of the Additional Units and/or Additional Unit Shares and/or Additional Warrants issuable upon exercise of the Over-Allotment Option. A purchaser who acquires securities forming part of the Agents’ over-allocation position acquires those securities under this Prospectus, regardless of whether the over-allocation position is ultimately filled through the exercise of the Over-Allotment Option or secondary market purchases.

The Offering Price and certain terms of the Offering were determined by negotiation between the Company and the Lead Agent, on its own behalf and on behalf of the Agents. Among the factors considered in determining the Offering Price were the market price of the Common Shares, prevailing market conditions, the historical performance and capital structure of the Company. The Agents have reserved the right to form a selling group of appropriately

registered dealers and brokers (the “ Selling Group ”), with compensation to be negotiated between the Agents and such selling group participants, but at no additional cost to the Company.

Pursuant to the Agency Agreement, the Company has agreed to pay to the Agents the Agents’ Fee which is equal to 8% of the gross proceeds from the issue and sale of the Units (including in respect of any exercise of the Over-Allotment Option). As additional compensation, the Company has also agreed to issue to the Agents the Compensation Options on the Closing Date. The Compensation Options will entitle the Agents to acquire that number of Agents’ Shares equal to 8% of the number of Units sold under the Offering, including 8% of the number of Additional Units sold upon exercise of the Over-Allotment Option. The Compensation Options will be exercisable for a period of 24 months from the Closing Date at an exercise price equal to the Offering Price. The Agents’ Fee payable and number of Compensation Options issuable will be reduced to 3.5% on Units which may be sold to purchasers on the President’s List. Insiders and their affiliates may subscribe for Units pursuant to the Offering.

The Company has also agreed to reimburse the Agents for their reasonable out-of-pocket fees and expenses, including the fees and expenses of their legal counsel whether or not the Offering is completed.

The Units will be offered in each of the provinces of British Columbia, Alberta and Ontario through the Agents and such other registered dealers as may form part of the Selling Group. Subject to applicable law, the Agents may offer the Units in such jurisdictions outside of Canada as agreed between the Company and the Agents. Subscriptions for the Units will be received subject to rejection or allotment in whole or in part and the Agents reserve the right to close the subscription books at any time without notice.

If subscriptions representing the Minimum Offering are not received within 90 days of the issuance of a receipt for the final prospectus, or if a receipt has been issued for an amendment to the final prospectus, within 90 days of the issuance of such receipt and in any event not later than 180 days from the date of receipt for the final Prospectus, the Offering will cease. The Agents, pending closing of the Offering, will hold in trust all subscription funds received pursuant to the provisions of the Agency Agreement. If the Minimum Offering is not completed, the subscription proceeds received by the Agents in connection with the Offering will be returned to the subscribers without interest or deduction, unless the subscribers have otherwise instructed the Agents. Provided the Minimum Offering is achieved, the Closing Date is expected to be on or about March 10, 2021 or such later date as may be agreed upon by the Company.

Other than pursuant to certain exceptions, the Units will be available for delivery in the book-based system through CDS or its nominee and will be deposited with CDS on the Closing Date in electronic form. A purchaser of Units will receive only a customer confirmation from the Agents or other registered dealer who is a CDS Participant through which the Units are purchased. CDS will record the CDS Participants who hold Units on behalf of owners who have purchased Units in accordance with the book-based system. Purchasers who are not issued certificates evidencing the Unit Shares and Warrants comprising the Units which are subscribed for by them at closing are entitled, under the BCBCA, to request that certificates be issued in their name. Such a request will need to be made through the CDS Participant through whom the beneficial interest in the securities is held at the time of the request.

Pursuant to policies of certain Canadian securities regulatory authorities, the Agents may not, throughout the period of distribution under the Offering, bid for or purchase Common Shares for its own accounts or for accounts over which it exercises control or direction. The foregoing restriction is subject to certain exceptions, on the condition that the bid or purchase not be engaged in for the purpose of creating actual or apparent active trading in or raising the price of the Common Shares. These exceptions include a bid or purchase permitted under Universal Market Integrity Rules for Canadian marketplaces administered by the Investment Industry Regulatory Organization of Canada relating to market stabilization and passive market making activities, and a bid or purchase made for or on behalf of a customer where the order was not solicited during the period of distribution. Subject to the foregoing, the Agents may effect transactions which stabilize or maintain the market price of the Common Shares at levels other than those which otherwise might prevail on the open market. Such transactions, if commenced, may be discontinued at any time.

These stabilizing transactions and syndicate covering transactions may have the effect of preventing or mitigating a decline in the market price of the Common Shares, and may cause the price of the Units to be higher than would otherwise exist in the open market absent such stabilizing activities. As a result, the price of the Unit Shares

may be higher than the price that might otherwise exist in the open market. These transactions, if commenced, may be discontinued at any time.

The Company has agreed, pursuant to the Agency Agreement, to indemnify the Agents and their respective affiliates and their respective directors, officers, employees, shareholders, partners, advisors and agents and each other person, if any, controlling the respective Agents or their respective affiliates and against certain liabilities, including liabilities under Canadian securities legislation in certain circumstances or to contribute to payments the Agents may have to make because of such liabilities.

The Company has received conditional approval to list the Unit Shares (including the Additional Unit Shares) to be distributed under this Prospectus, as well as the Warrant Shares (including the Warrant Shares issuable upon due exercise of the Additional Warrants) on the TSXV. Listing will be subject to the Company fulfilling all of the requirements of the TSXV. There is currently no market through which the Warrants may be sold. See "Risk Factors".

The Units, the Unit Shares, the Warrants and the Warrant Shares have not been and will not be registered under the U.S. Securities Act or any applicable state securities laws and, accordingly, may not be offered, sold, or delivered directly or indirectly, to, or for the account or benefit of, persons in the United States or U.S. Persons, except in transactions exempt from the registration requirements of the U.S. Securities Act and all applicable state securities laws. The Agents have agreed that, except as permitted by the Agency Agreement and as expressly permitted by applicable United States federal and state securities laws, they will not offer or sell any of the Units, the Unit Shares or the Warrants to, or for the account or benefit of, persons in the United States or U.S. Persons. The Agency Agreement will permit the Agents to offer to purchasers to whom the Company will sell directly the Units, the Unit Shares and the Warrants outside the United States to non-U.S. Persons in compliance with Regulation S under the U.S. Securities Act. The Agency Agreement also permits the Agents, through their United States registered brokerdealer affiliates, to offer to purchasers to whom the Company will sell directly the Units, the Unit Shares and the Warrants to, or for the account or benefit of, persons in the United States and U.S. Persons who are “accredited investors,” as such term is defined in Rule 501(a) of Regulation D under the U.S. Securities Act, in compliance with Rule 506(b) of Regulation D under the U.S. Securities and applicable state securities laws.

This Prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, any of the Units, the Unit Shares or the Warrants to, or for the account or benefit of, persons in the United States or U.S. Persons. In addition, until forty (40) days after the commencement of the Offering, any offer or sale of Units, the Unit Shares or the Warrants offered hereby to, or for the account or benefit of, persons in the United States or U.S. Persons by any dealer (whether or not participating in the Offering) may violate the registration requirements of the U.S. Securities Act if such offer or sale is made otherwise than in accordance with an exemption from the registration requirements of the U.S. Securities Act.

The Unit Shares, the Warrants and the Warrant Shares, in each instance issued to, or for the account or benefit of, persons in the United States or U.S. Persons, will be “restricted securities” within the meaning of Rule 144(a)(3) under the U.S. Securities Act. Any certificates representing such securities will bear a legend to the effect that the securities represented thereby are not registered under the U.S. Securities Act or any applicable U.S. state securities laws and may only be offered, sold, pledged or otherwise transferred pursuant to certain exemptions from the registration requirements of the U.S. Securities Act and any applicable U.S. state securities laws.

Terms used and not defined in the two preceding paragraphs shall have the meanings ascribed thereto by Regulation S under the U.S. Securities Act.

Other than in British Columbia, Alberta and Ontario, no action has been taken by the Company or the Agents that would permit a public offering of the Units offered by this Prospectus in any jurisdiction where action for that purpose is required. The Units offered by this Prospectus may not be offered or sold, directly or indirectly, nor may this Prospectus or any other offering material or advertisements in connection with the offer and sale of any Units be distributed or published in any jurisdiction, except under circumstances that will result in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose possession this Prospectus comes are advised to inform themselves about and to observe any restrictions relating to the Offering and the distribution of this Prospectus.

This Prospectus does not constitute an offer to sell or a solicitation of an offer to buy any Units offered by this Prospectus in any jurisdiction in which such an offer or a solicitation is unlawful.

CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS

In the opinion of McMillan LLP, counsel to the Company, and WeirFoulds LLP, counsel to the Agents, the following is, as at the date of this Prospectus, a summary of the principal Canadian federal income tax considerations under the Tax Act generally applicable to an investor who acquires Units pursuant to the Offering and who, for the purposes of the Tax Act and at all relevant times, (i) deals at arm’s length with the Company and the Agents and any subsequent purchaser of the Unit Shares, Warrants or Warrant Shares,, (ii) is not affiliated with the Company, the Agents or a subsequent purchaser of the Unit Shares, Warrants or Warrant Shares, and (iii) acquires and holds the Unit Shares and Warrants, and will hold the Warrant Shares issuable on the exercise of the Warrants, (the Unit Shares and Warrant Shares hereinafter sometimes collectively referred to as “ Shares ”) as capital property. A holder who meets all of the foregoing requirements is referred to as a “ Holder ” in this summary, and this summary only addresses such Holders. Generally, the Shares and Warrants will be considered as capital property of a Holder thereof provided that the Holder does not use the Shares or Warrants in the course of carrying on a business of trading or dealing in securities and such Holder has not acquired them in one or more transactions considered to be an adventure or concern in the nature of trade.

This summary does not apply to a Holder (i) that is a “financial institution” for the purposes of the mark-tomarket rules contained in the Tax Act; (ii) that is a “specified financial institution” as defined in the Tax Act; (iii), an interest in which would be a “tax shelter investment” as defined in the Tax Act; (iv) that has made a functional currency reporting election under the Tax Act; (v) that receives dividends on the Shares under or as part of a “dividend rental arrangement” as defined in the Tax Act; or (vi) that has entered into or will enter into a “derivative forward agreement” or “synthetic disposition arrangement”, as those terms are defined in the Tax Act, with respect to the Shares or Warrants. In addition, this summary does not address the deductibility of interest by a Holder who has borrowed money or otherwise incurred debt in connection with the acquisition of Units. Such Holders should consult their own tax advisors with respect to an investment in Units.

Additional considerations, not discussed herein, may be applicable to a Holder that is a corporation resident in Canada, and is, or becomes as part of a transaction or event or series of transactions or events that includes the acquisition of the Units, controlled by a non-resident person or a group of non-resident persons that do not deal with each other at arm's length (for purposes of the Tax Act). Such Holders should consult their tax advisors with respect to the consequences of acquiring Units.

This summary is based upon the current provisions of the Tax Act in force as of the date hereof and our understanding of the current published administrative and assessing practice of the Canada Revenue Agency (the “ CRA ”). Except as specifically referenced below, this summary takes into account all specific proposals to amend the Tax Act publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof (the “ Tax Proposals ”) and assumes that the Tax Proposals will be enacted in the form proposed, although no assurance can be given that the Tax Proposals will be enacted in their current form or at all. This summary does not otherwise take into account any changes in law or in the administrative policies or assessing practice of the CRA, whether by legislative, governmental or judicial decision or action, nor does it take into account or consider any provincial, territorial or foreign income tax considerations, which considerations may differ significantly from the Canadian federal income tax considerations discussed in this summary.

This summary is of a general nature only, is not exhaustive of all possible Canadian federal income tax considerations and is not intended to be, nor should it be construed to be, legal or tax advice to any particular Holder. Holders should consult their own tax advisors with respect to their particular circumstances.

Allocation of Cost

The total purchase price of a Unit to a Holder must be allocated on a reasonable basis between the Unit Share and the one-half Warrant comprising a Unit to determine the cost of each to the Holder for purposes of the Tax Act.

For its purposes, the Company intends to allocate $0.35 of the Offering Price of each Unit as consideration for the issue of each Unit Share and $0.01 of the Offering Price of each Unit for the one-half Warrant comprising part of the Unit. Although the Company believes its allocation is reasonable, it is not binding on the CRA or the Holder. The Holder’s adjusted cost base of the Unit Share comprising a part of each Unit will be determined by averaging the cost allocated to the Unit Share with the adjusted cost base to the Holder of all Common Shares owned by the Holder as capital property immediately prior to such acquisition.

Exercise of Warrants

The exercise of a Warrant to acquire a Warrant Share will be deemed not to constitute a disposition of property for purposes of the Tax Act. As a result, no gain or loss will be realized by a Holder upon the exercise of a Warrant to acquire a Warrant Share. When a Warrant is exercised, the Holder’s cost of the Warrant Share acquired thereby will be equal to the aggregate of the Holder’s adjusted cost base of such Warrant and the exercise price paid for the Warrant Share. The Holder’s adjusted cost base of the Warrant Share so acquired will be determined by averaging the cost of the Warrant Share with the adjusted cost base to the Holder of all Common Shares owned by the Holder as capital property immediately prior to such acquisition.

Holders Resident in Canada

The following section of this summary applies to Holders who, for the purposes of the Tax Act, are or are deemed to be resident in Canada at all relevant times (“ Resident Holders ”). Certain Resident Holders whose Common Shares might not constitute capital property may make, in certain circumstances, an irrevocable election permitted by subsection 39(4) of the Tax Act to deem the Shares, and every other “Canadian security” as defined in the Tax Act, held by such persons, in the taxation year of the election and each subsequent taxation year to be capital property. This election does not apply to Warrants. Resident Holders should consult their own tax advisors regarding this election.

Expiry of Warrants

In the event of the expiry of an unexercised Warrant, a Resident Holder generally will realize a capital loss equal to the Resident Holder’s adjusted cost base of such Warrant. The tax treatment of capital gains and capital losses is discussed in greater detail below under the subheading “ Capital Gains and Capital Losses ”.

Dividends

Dividends received or deemed to be received on the Shares, if any, will be included in computing a Resident Holder’s income. In the case of an individual (other than certain trusts), such dividends will be subject to the grossup and dividend tax credit rules normally applicable in respect of “taxable dividends” received from “taxable Canadian corporations” (as defined in the Tax Act), including the enhanced dividend tax credit in respect of “eligible dividends”, if any, so designated by the Company to the Resident Holder in accordance with the provisions of the Tax Act. There may be restrictions on the Company’s ability to so designate any dividends as “eligible dividends”, and the Company has made no commitments in this regard.

Dividends received or deemed to be received by Resident Holder that is a corporation must be included in computing its income but may be deductible in computing its taxable income, subject to all restrictions and special rules under the Tax Act. A Resident Holder that is a “private corporation” (as defined in the Tax Act) and certain other corporations controlled by or for the benefit of an individual (other than a trust) or related group of individuals (other than trusts) generally will be liable to pay a special tax under Part IV of the Tax Act (refundable in certain circumstances) on dividends received or deemed to be received on the Shares to the extent such dividends are deductible in computing taxable income. In certain circumstances, subsection 55(2) of the Tax Act will treat a taxable dividend received or deemed to be received by a Resident Holder that is a corporation as proceeds of disposition or a capital gain, and Resident Holders that are corporations should consult their own tax advisors in this regard.

Dispositions of Shares and Warrants

Upon a disposition (or a deemed disposition) of a Share or a Warrant (other than on the exercise thereof), a Resident Holder generally will realize a capital gain (or a capital loss) equal to the amount by which the proceeds of disposition of such security, as applicable, net of any reasonable costs of disposition, are greater (or are less) than the adjusted cost base of such security, as applicable, to the Resident Holder. The tax treatment of capital gains and capital losses is discussed in greater detail below under the subheading “ Capital Gains and Capital Losses ”.

Capital Gains and Capital Losses

Generally, a Resident Holder is required to include in computing income for a taxation year one-half of the amount of any capital gain (a “ taxable capital gain ”) realized in the year. Subject to and in accordance with the provisions of the Tax Act, a Resident Holder is required to deduct one-half of the amount of any capital loss (an “ allowable capital loss ”) realized in a taxation year from taxable capital gains realized in the year by such Resident Holder. Allowable capital losses in excess of taxable capital gains may be carried back and deducted in any of the three preceding taxation years or carried forward and deducted in any following taxation year against taxable capital gains realized in such year to the extent and under the circumstances described in the Tax Act.

The amount of any capital loss realized on the disposition or deemed disposition of Shares by a Resident Holder that is a corporation may be reduced by the amount of dividends received or deemed to have been received by it on such shares or shares substituted for such shares to the extent and in the circumstances specified by the Tax Act. Similar rules may apply where a corporation is a member of a partnership or a beneficiary of a trust that owns Shares, directly or indirectly, through a partnership or trust. Resident Holders to whom these rules may be relevant should consult their own tax advisors.

A Resident Holder that is throughout the relevant taxation year a “Canadian-controlled private corporation” (as defined in the Tax Act) also may be liable to pay a special additional tax (refundable in certain circumstances) on its “aggregate investment income” (as defined in the Tax Act) for the year which will include taxable capital gains.

Minimum Tax

Capital gains realized and dividends received by a Resident Holder that is an individual or a trust, other than certain specified trusts, may give rise to minimum tax under the Tax Act. Resident Holders should consult their own advisors with respect to the application of the minimum tax.

Holders Not Resident in Canada

The following section of this summary is generally applicable to Holders who, for the purposes of the Tax Act, (i) are not, and will not be deemed to be, resident in Canada at any time while they hold the Shares or Warrants, and (ii) do not use or hold, and are not deemed to use or hold, the Shares or Warrants in carrying on a business in Canada at any relevant time (“ Non-Resident Holders ”).

Special rules, which are not discussed in this summary, may apply to a Non-Resident Holder that is an insurer carrying on business in Canada and elsewhere or that is an “authorized foreign bank” (as defined in the Tax Act). Such Holders should consult their own tax advisors.

Dividends

Dividends paid or credited or deemed to be paid or credited to a Non-Resident Holder by the Company are subject to Canadian withholding tax at the rate of 25% on the gross amount of the dividend unless such rate is reduced by the terms of an applicable tax treaty. Under the Canada-United States Income Tax Convention (1980) (the “ Treaty ”) as amended, for example, the rate of withholding tax on dividends paid or credited to a Non-Resident Holder who is resident in the U.S. for purposes of the Treaty and entitled to benefits under the Treaty (a “ U.S. Holder ”) is generally limited to 15% of the gross amount of the dividend (or 5% in the case of a U.S. Holder that is a company

beneficially owning at least 10% of the Company’s voting shares). Affected Non-Resident Holders should consult their own tax advisors in this regard.

Dispositions of Shares and Warrants

A Non-Resident Holder generally will not be subject to tax under the Tax Act in respect of a capital gain realized on the disposition or deemed disposition of a Share or a Warrant, nor will capital losses arising therefrom be recognized under the Tax Act, unless the Share or Warrant constitutes “taxable Canadian property” to the NonResident Holder thereof for purposes of the Tax Act, and the gain is not exempt from tax pursuant to the terms of an applicable tax treaty.

Provided the Shares are listed on a “designated stock exchange” as defined in the Tax Act (which currently includes the TSXV) at the time of disposition, the Shares and Warrants generally will not constitute taxable Canadian property of a Non-Resident Holder at that time unless, at any time during the 60 month period immediately preceding the disposition, the following two conditions are met: (i) the Non-Resident Holder, persons with whom the NonResident Holder did not deal at arm’s length, partnerships in which the Non-Resident Holder or such non-arm’s length person holds a membership interest (either directly or indirectly through one or more partnerships), or the NonResident Holder together with all such persons, owned 25% or more of the issued shares of any class or series of shares of the Company; and (ii) more than 50% of the fair market value of the shares of the Company was derived directly or indirectly from one or any combination of real or immovable property situated in Canada, Canadian resource properties (as defined in the Tax Act), timber resource properties (as defined in the Tax Act) or an option, an interest or right in such property, whether or not such property exists. Notwithstanding the foregoing, a Share or Warrant may also be deemed to be taxable Canadian property to a Non-Resident Holder under other provisions of the Tax Act.

A Non-Resident Holder’s capital gain (or capital loss) in respect of Shares or Warrants that constitute or are deemed to constitute taxable Canadian property (and are not “treaty-protected property” as defined in the Tax Act) will generally be computed in the manner described above under the subheading “Holders Resident in Canada – Dispositions of Shares and Warrants ”.

Non-Resident Holders who may hold Shares or Warrants as taxable Canadian property should consult their own tax advisors in this regard.

DESCRIPTION OF SECURITIES BEING DISTRIBUTED

Authorized Capital

The authorized capital of the Company consists of an unlimited number of Common Shares without par value which as at the date hereof, 40,680,740 Common Shares are issued and outstanding.

Units

Each Unit consists of one Unit Share and one-half of one Warrant. The following is a summary of the rights, privileges, restrictions and conditions attached to such securities.

Common Shares

Each Common Share carries the right to attend and vote at all general meetings of shareholders. Holders of Common Shares are entitled to receive on a pro rata basis such dividends, if any, as and when declared by the Company’s board of directors at its discretion from funds legally available for the payment of dividends and upon the liquidation, dissolution or winding up of the Company are entitled to receive on a pro rata basis the net assets of the Company after payment of debts and other liabilities, in each case subject to the rights, privileges, restrictions and conditions attaching to any other series or class of shares ranking senior in priority to or on a pro rata basis with the holders of Common Shares with respect to dividends or liquidation. The Common Shares do not carry any preemptive, subscription, redemption or conversion rights, nor do they contain any sinking or purchase fund provisions.

Warrants

The Warrants will be governed by the terms of the Warrant Indenture. The following summary of certain anticipated provisions of the Warrant Indenture does not purport to be complete and is subject in its entirety to the detailed provisions of the Warrant Indenture. Reference is made to the Warrant Indenture for the full text of the attributes of the Warrants which will be filed by the Company under its corporate profile on SEDAR following the closing of the Offering. A register of holders will be maintained at the principal offices of the Warrant Agent in Toronto, Ontario.

The Unit Shares and the Warrants comprising the Units will separate upon the closing of the Offering. Each Warrant will entitle the holder to acquire, subject to adjustment in certain circumstances, one Warrant Share at an exercise price of $0.55 until 5:00 p.m. (Eastern time) on the date that is 24 months from the Closing Date, subject to certain exceptions and the terms of the Warrants, after which time the Warrants will be void and of no value.

The Warrant Indenture will provide for adjustment in the number of Warrant Shares issuable upon the exercise of the Warrants and/or the exercise price per Warrant Share upon the occurrence of certain events, including:

(i) the issuance of Common Shares or securities exchangeable for or convertible into Common Shares to all or substantially all of the holders of the Common Shares as a stock dividend or other distribution (other than a distribution of Common Shares upon the exercise of Warrants);
(ii) the subdivision, redivision or change of the Common Shares into a greater number of shares;
(iii) the reduction, combination or consolidation of the Common Shares into a lesser number of shares;
(iv) the issuance to all or substantially all of the holders of the Common Shares of rights, options or warrants under which such holders are entitled, during a period expiring not more than 45 days after the record date for such issuance, to subscribe for or purchase Common Shares, or securities exchangeable for or convertible into Common Shares, at a price per share to the holder (or at an exchange or conversion price per share) of less than 95% of the “current market price”, as defined in the Warrant Indenture, for the Common Shares on such record date; and
(v) the issuance or distribution to all or substantially all of the holders of the Common Shares of shares of any class other than the Common Shares, rights, options or warrants to acquire Common Shares or securities exchangeable or convertible into Common Shares, or evidence of indebtedness, or any property or other assets.

The Warrant Indenture will also provide for adjustments in the class and/or number of securities issuable upon exercise of the Warrants and/or exercise price per security in the event of the following additional events: (a) reclassifications of the Common Shares or a capital reorganization of the Company (other than as described in clauses (i) or (ii) above), (b) consolidations, amalgamations, arrangements, mergers or other business combination of the Company with or into another entity, or (c) any sale, lease, exchange or transfer of the undertaking or assets of the Company as an entirety or substantially as an entirety to another entity, in which case each holder of a Warrant which is thereafter exercised will receive, in lieu of Common Shares, the kind and number or amount of other securities or property which such holder would have been entitled to receive as a result of such event if such holder had exercised the Warrants prior to the event.

The Company will also covenant in the Warrant Indenture that, during the period in which the Warrants are exercisable, it will give notice to holders of Warrants of certain stated events, including events that would result in an adjustment to the exercise price for the Warrants or the number of Warrant Shares issuable upon exercise of the Warrants, at least 14 days prior to the record date or effective date, as the case may be, of such events.

No fractional Common Shares will be issuable to any holder of Warrants upon the exercise thereof, and no cash or other consideration will be paid in lieu of fractional shares. The holding of Warrants will not make the holder thereof a shareholder of the Company or entitle such holder to any right or interest in respect of the Warrants except

as expressly provided in the Warrant Indenture. Holders of Warrants will not have any voting or pre-emptive rights or any other rights of a holder of Common Shares.

The Warrant Indenture will provide that, from time to time, the Warrant Agent and the Company, without the consent of the holders of Warrants, may be able to amend or supplement the Warrant Indenture for certain purposes, including rectifying any ambiguities, defective provisions, clerical omissions or mistakes, or other errors contained in the Warrant Indenture or in any deed or indenture supplemental or ancillary to the Warrant Indenture, provided that, in the opinion of the Warrant Agent, relying on counsel, the rights of the holders of Warrants are not prejudiced, as a group. Any amendment or supplement to the Warrant Indenture that is prejudicial to the interests of the holders of Warrants, as a group, will be subject to approval by an “Extraordinary Resolution”, which will be defined in the Warrant Indenture as a resolution either: (i) passed at a meeting of the holders of Warrants at which there are holders of Warrants present in person or represented by proxy representing at least 25% of the aggregate number of the then outstanding Warrants and passed by the affirmative vote of holders of Warrants representing not less than 662∕3% of the aggregate number of all the then outstanding Warrants represented at the meeting and voted on the poll upon such resolution; or (ii) adopted by an instrument in writing signed by the holders of Warrants representing not less than 662∕3% of the number of all of the then outstanding Warrants.

The principal transfer office of the Warrant Agent in Vancouver, British Columbia is the location at which Warrants may be surrendered for exercise or transfer.

PRIOR SALES

For the 12-month period before the date of this Prospectus, the Company issued the following Common Shares and securities exercisable or convertible into Common Shares:


Date of Issuance	Security	Number of Securities	Issue/Exercise Price Per Security
May 13, 2020	Common Shares	200,000(1)	$0.285
April 15, 2020	Stock Options	2,750,000(2)	$0.26
April 15, 2020	Stock Options	500,000(3)	$0.35
August 18, 2020	Stock Options	200,000(4)	$0.26
October 18, 2020	Stock Options	175,000(5)	$0.26

Notes

(1) Issued in connection with the acquisition of Newman Loss Prevention. The Company will also issue an additional 200,000 common shares upon satisfaction of certain performance measures.

(2) Options granted to employees, consultants, officers and directors of the Company. Each option entitles the holder to acquire one Common Share. The options vest as to 25% each year, commencing one year after the date of grant, and expiring on the earlier of 10 years after the date of grant and 30 days after the Optionee is no longer a director, officer, employee or consultant of the Company.
(3) Options granted to a consultant of the Company. Each option entitles the holder to acquire one Common Share. The options vest as to 25% each year, commencing one year after the date of grant, and expiring on the earlier of 10 years after the date of grant and 30 days after the Optionee is no longer a consultant of the Company.
(4) Options granted to a director of the Company. Each option entitles the holder to acquire one Common Share. The options vest as to 25% each year, commencing one year after the date of grant, and expiring on the earlier of 10 years after the date of grant and 30 days after the Optionee is no longer a director of the Company.

(5) Options granted to employees and consultants of the Company. The options vest as to 25% each year, commencing one year after the date of grant, and expiring on the earlier of 10 years after the date of grant and 30 days after the Optionee is no longer an employee or consultant of the Company.

TRADING PRICE AND VOLUME

The Common Shares are listed on the TSXV under the trading symbol “INEO”. The following tables set forth information relating to the trading of the Common Shares on the TSXV for the months indicated.

Month March 2020 April 2020 May 2020 June 2020 July 2020 August 2020 September 2020 October 2020 November 2020 December 2020 January 2021 February 2021 March 1-2, 2021	TSXV Price Range ($) High Low 0.35 0.18 0.245 0.15 0.34 0.21 0.30 0.24 0.30 0.24 0.235 0.21 0.25 0.185 0.25 0.175 0.275 0.22 0.43 0.24 0.435 0.33 0.59 0.34 0.55 0.50	Total Volume
	High 0.35 0.245 0.34 0.30 0.30 0.235 0.25 0.25 0.275 0.43 0.435 0.59 0.55
		133,622 94,096 249,634 88,669 120,610 89,094 771,282 273,908 199,599 931,713 1,341,503 1,427,780 180,402

RISK FACTORS

An investment in the securities of the Company is speculative and subject to risks and uncertainties. The occurrence of any one or more of these risks or uncertainties could have a material adverse effect on the value of any investment in the Company and the business, prospects, financial position, financial condition or operating results of the Company. Additional risks and uncertainties not presently known to the Company or that the Company currently deems immaterial may also impair the Company’s business operations.

Prospective investors should carefully consider all information contained in this Prospectus, including all documents incorporated by reference, and in particular should give special consideration to the risk factors under the section titled “Risk Factors” in the Annual Information Form, which is incorporated by reference in this Prospectus and which may be accessed on the Company’s SEDAR profile at www.sedar.com, and the information contained in the section entitled “Cautionary Statement Regarding Forward-Looking Information”, before deciding to purchase the Units. Additionally, purchasers should consider the risk factors set forth below.

The risks and uncertainties described or incorporated by reference in this Prospectus are not the only ones the Company may face. Additional risks and uncertainties that the Company is unaware of, or that the Company currently deems not to be material, may also become important factors that affect the Company. If any such risks actually occur, the Company’s business, financial condition or results of operations could be materially adversely affected, with the result that the trading price of the Common Shares could decline and investors could lose all or part of their investment.

Risks Related to the Offering and the Common Shares

Completion of the Offering is subject to achievement of the Minimum Offering amount.

The Company may need additional financing, which it may seek to raise through, among other things, public and private equity offerings. Any equity financings will be dilutive to existing shareholders of the Company and additional financing may not be available on acceptable terms, or at all. If additional capital is not available, the Company may not be able to continue to operate its business pursuant to its business plan or the Company may have to discontinue the Company’s operations entirely.

The market price of the Common Shares is volatile and may not accurately reflect the long-term value of the Company

Securities markets have a high level of price and volume volatility, and the market price of securities of many companies have experienced substantial volatility in the past, often based on factors unrelated to the financial performance or prospects of the companies involved. These factors included macroeconomic developments in North America and globally, and market perceptions of the attractiveness of particular industries. The price of the Units is also likely to be significantly affected by changes in the financial condition or results of operations as reflected in its financial reports. If an active market for the Unit Shares and Warrants does not continue, the liquidity of an investor’s investment may be limited and the price of the Unit Shares and Warrants may decline below the Offering Price. If an active market does not continue, investors may lose their entire investment in the Units. As a result of any of these factors, the market price of the Units at any given point in time may not accurately reflect the long-term value of the Company.

A positive return in an investment in the Units is not guaranteed

There is no guarantee that an investment in the Units will earn any positive return in the short term or long term. A purchase under the Offering involves a high degree of risk and should be undertaken only by investors whose financial resources are sufficient to enable them to assume such risks and who have no need for immediate liquidity in their investment. An investment in the Units is appropriate only for investors who have the capacity to absorb a loss of some or all of their investment.

The Company has discretion in the use of net proceeds

The Company intends to use the net proceeds from this Offering as set forth under “ Use of Proceeds ”; however, the Company maintains broad discretion to use the net proceeds from this Offering in ways that it deems most efficient. As a result, purchasers will be relying on the judgment of management for the effective use of such proceeds. Management may use such proceeds in ways that purchasers may not consider desirable. The results and the effectiveness of the investment of the proceeds of this Offering are uncertain. If the proceeds are not applied effectively, the results of the Company’s business, financial condition, operations and prospects may suffer.

Negative Cash Flow From Operations

The Company has negative operating cash flow. The Company cannot guarantee if it will have positive cash flow from operating activities in future periods. The Company cannot provide any assurance that it will achieve sufficient revenues to achieve or maintain profitability or positive cash flow from operating activities. If the Company does not achieve or maintain profitability or positive cash flow from operating activities, then there could be a material adverse effect on the Company’s business, financial condition and results of operation and the Company may need

to deploy a portion of its working capital to fund such negative operating cash flows or seek additional sources of funding, of which there is no assurance that any required funding will be obtained.

In the event that cash flow from operations do not adequately support the fixed costs of the Company, the Company will then be required to re-evaluate its planned expenditures, reallocate its total resources and may require future financings in such a manner as the Board of Directors and management deem to be in the Company’s best interest. This may result in a substantial reduction of the scope of the Company’s existing and planned operations. The presence of these conditions may indicate the existence of a material uncertainty that may cast significant doubt regarding the Company’s ability to continue as a going concern.

Risk Factors Related to Dilution

The Company may issue additional securities in the future, which may dilute a shareholder's holdings in the Company. The Company's articles permit the issuance of an unlimited number of Common Shares, and shareholders will have no pre-emptive rights in connection with such further issuance. The directors of the Company have discretion to determine the price and the terms of further issuances. Moreover, additional Common Shares will be issued by the Company on the exercise of options under the Company's stock option plan and upon the exercise of outstanding warrants.

The Company may also consider issuing convertible debt or equity securities, which may rank prior to the Common Shares, in the future to fund potential acquisitions or investments, or for general corporate purposes. If the Company issues convertible debt or equity securities to raise additional funds, the Company’s existing shareholders may experience dilution, and the new convertible debt or equity securities may have advantageous rights, preferences and privileges when compared to those of the Company’s existing shareholders. The Company is unable to predict the future amount of such issuances or dilution.

Active Liquid Market for Common Shares

There may not be an active, liquid market for the Unit Shares and Warrant Shares. There is no guarantee that an active trading market for the Common Shares will be maintained on the TSXV. Investors may not be able to sell their Unit Shares and Warrant Shares quickly or at the latest market price if trading in the Common Shares is not active.

No Market for Warrants

There is currently no market through which the Warrants may be sold and the Company has not applied to list the Warrants. Accordingly, the purchasers may not be able to resell the securities purchased under this short form prospectus. This may affect the pricing of the Warrants in the secondary market, the transparency and availability of trading prices, the liquidity of the Warrants, and the extent of issuer regulation.

Sale of Common Shares Issued Upon Exercise of the Warrants Could Encourage Short Sales by Third-Parties Which Could Further Depress the Price of the Common Shares

Any downward pressure on the price of Common Shares caused by the sale of Warrant Shares issued upon the exercise of the Warrants could encourage short sales by third-parties. In a short sale, a prospective seller borrows Common Shares from a shareholder or broker and sells the borrowed Common Shares. The prospective seller anticipates that the Common Share price will decline, at which time the seller can purchase Common Shares at a lower price for delivery back to the lender. The seller profits when the Common Share price declines because it is purchasing Common Shares at a price lower than the sale price of the borrowed Common Shares. Such sales could place downward pressure on the price of the Common Shares by increasing the number of Common Shares being sold, which could further contribute to any decline in the market price of the Common Shares.

Additional Risks Related to the Company

Prosegur LOI

On December 30, 2020, the Company entered into a non-binding LOI with Prosegur to enter into a definitive agreement pursuant to which Prosegur will distribute and install the INEO Welcoming Systems in retail locations in North America, Latin America, and Europe (the “ Definitive Agreement ”). There is no guarantee that the pilot project with Prosegur will be successful, or that the Definitive Agreement will be executed nor will it result in the successful distribution and installation of the Company’s INEO Welcoming Systems in retail locations in North America, Latin America, and Europe. A failure to achieve the terms set out in the LOI, failure to meet Prosegur’s requirements in the pilot project, or failure to enter into the Definitive Agreement could have an adverse effect on the ability of the Company to achieve its business objectives, expand its business operations, and may result in lower revenues.

COVID-19 may materially and adversely affect the Company’s business and financial results.

The Company’s business could be materially and adversely affected by health epidemics in regions where the Company operates or sells its services. The COVID-19 pandemic, caused by the SARS-CoV-2 virus, has significantly curtailed the movement of people, goods and services worldwide. The pandemic has significantly impacted consumer spending habits and activities, with many consumers switching to online shopping during the pandemic. The effect on store front retailers has been to see a significant reduction in customer traffic. The magnitude and duration of future declines in business activity cannot be estimated with any degree of certainty, nor can the impact of the pandemic on the spending timelines and practices of the Company’s retailer clients. To date, the Company has focused on delivering its products to retailers that are considered essential business by most government authorities, and accordingly has been able to minimize the direct impact of the pandemic on the roll out of its products. There is no guarantee that these businesses will continue to be deemed essential services, or that these businesses will seek to adopt the Company’s products. The pandemic may delay the adoption of the Company’s services by some retailers, due to spending freezes or other internal policies. Although the Company has employed additional safety measures to protect its employees, there is no guarantee that such measures will prove adequate, and the Company’s manufacturing capability may be directly impacted by an outbreak of COVID-19. Such an outbreak could require the Company to temporarily cease manufacturing, resulting in delays in the delivery of its products. Additionally, the COVID-19 pandemic has caused extreme volatility in financial and other capital markets. This volatility may adversely impact the fair value of the Company’s securities which may hamper its ability to raise additional capital to maintain operations.

AUDITORS, TRANSFER AGENT, REGISTRAR AND WARRANT AGENT

The auditors of the Company are Davidson and Company LLP, Chartered Professional Accountants, Vancouver, British Columbia. The transfer agent and registrar for the Common Shares is Computershare Investor Services Inc. and the warrant agent for the Warrants is Computershare Trust Company of Canada, each at Computershare’s principal offices in Vancouver, British Columbia.

LEGAL MATTERS

Certain legal matters in connection with this Offering will be passed upon by McMillan LLP, on behalf of the Company and by WeirFoulds LLP, on behalf of the Agents. As at the date hereof, the partners and associates of McMillan LLP, as a group, and the partners and associates of WeirFoulds LLP, as a group, each beneficially own, directly or indirectly, less than one percent of the outstanding Common Shares of the Company.

INTEREST OF EXPERTS

Name of Experts

The following are the persons or companies who were named as having prepared or certified a statement, report or valuation in this Prospectus either directly or in a document incorporated by reference and whose profession or business gives authority to the statement, report or valuation made by the person or company:

Davidson & Company LLP, the Company’s independent auditors, prepared an independent audit report dated October 16, 2020 in respect of the Company’s audited consolidated financial statements for the year ended June 30, 2020; and
Dale Matheson Carr-Hilton Labonte LLP, the former auditors of Flashgate Technology Inc., the reverse takeover predecessor company to the Company (“ Flashgate ”), prepared an independent audit report dated November 4, 2019 in respect of Flashgate’s audited financial statements for the year ended June 30, 2019.

Interests of Experts

Davidson & Company LLP and Dale Matheson Carr-Hilton Labonte LLP have confirmed that they are independent of the Company within the meaning of the “Rules of Professional Conduct” of the Chartered Professional Accountants of British Columbia.

PURCHASERS’ STATUTORY RIGHTS

Securities legislation in certain of the provinces of Canada provides purchasers with the right to withdraw from an agreement to purchase securities. This right may be exercised within two business days after receipt or deemed receipt of a prospectus and any amendment thereto. In several of the provinces, the securities legislation further provides a purchaser with remedies for rescission or, in some provinces, revisions of the price or damages if the Prospectus and any amendment contains a misrepresentation or is not delivered to the purchaser, provided that the remedies for rescission, revisions of the price or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province for the particulars of these rights or consult with a legal adviser.

In an offering of Warrants, investors are cautioned that the statutory right of action for damages for a misrepresentation contained in the short form prospectus is limited, in certain provincial securities legislation, to the price at which the Warrants are offered to the public under the prospectus offering. This means that, under the securities legislation of certain provinces, if the purchaser pays additional amounts upon exercise of the Warrants, those amounts may not be recoverable under the statutory right of action for damages that applies in those provinces. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province for the particulars of this right of action for damages or consult with a legal adviser.

ADDITIONAL INFORMATION

Following the completion of the Offering, the Company will be required to file reports and other information with the securities commissions in certain provinces and territories of Canada. These filings will be electronically available from SEDAR at www.sedar.com.

CERTIFICATE OF THE COMPANY

Dated: March 3, 2021

This short form prospectus, together with the documents incorporated by reference, constitutes full, true and plain disclosure of all material facts relating to the securities offered by this short form prospectus as required by the securities legislation of each of the provinces of British Columbia, Alberta and Ontario.

(Signed) Kyle Hall Chief Executive Officer

(Signed) Zara Kanjii Chief Financial Officer

On Behalf of the Board of Directors

(Signed) Greg Watkin Director

(Signed) Serge Gattesco Director

C-1

CERTIFICATE OF THE PROMOTERS

Dated: March 3, 2021

(Signed) Kyle Hall Promoter

(Signed) Greg Watkin Promoter

C-2

CERTIFICATE OF THE AGENTS

Dated: March 3, 2021

To the best of our knowledge, information and belief, this short form prospectus, together with the documents incorporated by reference, constitutes full, true and plain disclosure of all material facts relating to the securities offered by this short form prospectus as required by the securities legislation of each of the provinces of British Columbia, Alberta and Ontario.

BEACON SECURITIES LIMITED

(Signed) Justin Gilman Vice President

HAYWOOD SECURITIES INC.

PI FINANCIAL CORP.

(Signed) Don Wong Vice President

(Signed) Timothy Johnston Head of Equity Capital Markets

C-3

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INEO Tech Corp. — Capital/Financing Update 2021

46461_rns_2021-03-03_106ad84a-69b0-44ef-a0ab-c429d222f46b.pdf

SHORT FORM PROSPECTUS

New Issue

TABLE OF CONTENTS

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

MARKET AND INDUSTRY DATA

ELIGIBILITY FOR INVESTMENT

DOCUMENTS INCORPORATED BY REFERENCE

MARKETING MATERIALS

THE COMPANY

Business of the Company

Revenue Generation Strategy

Loss Prevention

Predictive Analytics

Advertising Model for Independent Retailers

SaaS Model for Large Retail Chains

Recent Developments

Letter of Intent with Prosegur

COVID-19 Pandemic Update

CONSOLIDATED CAPITALIZATION

USE OF PROCEEDS

Business Objectives and Milestones

Business and Technology Objectives

Milestones

PLAN OF DISTRIBUTION

CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS

Allocation of Cost

Exercise of Warrants

Holders Resident in Canada

Expiry of Warrants

Dividends

Dispositions of Shares and Warrants

Capital Gains and Capital Losses

Minimum Tax

Holders Not Resident in Canada

Dividends

Dispositions of Shares and Warrants

DESCRIPTION OF SECURITIES BEING DISTRIBUTED

Authorized Capital

Units

Common Shares

Warrants

PRIOR SALES

Notes

TRADING PRICE AND VOLUME

RISK FACTORS

Risks Related to the Offering and the Common Shares

Completion of the Offering is subject to achievement of the Minimum Offering amount.

Negative Cash Flow From Operations

Risk Factors Related to Dilution

Active Liquid Market for Common Shares

No Market for Warrants

Additional Risks Related to the Company

Prosegur LOI

COVID-19 may materially and adversely affect the Company’s business and financial results.

AUDITORS, TRANSFER AGENT, REGISTRAR AND WARRANT AGENT

LEGAL MATTERS

INTEREST OF EXPERTS

Name of Experts

Interests of Experts

PURCHASERS’ STATUTORY RIGHTS

ADDITIONAL INFORMATION

CERTIFICATE OF THE COMPANY

CERTIFICATE OF THE PROMOTERS

CERTIFICATE OF THE AGENTS

BEACON SECURITIES LIMITED

HAYWOOD SECURITIES INC.

PI FINANCIAL CORP.

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INEO Tech Corp. Capital/Financing Update 2021