Leonovus

Management's Discussion and Analysis

Leonovus Inc.

For the year ended December 31, 2025

Dated April 22, 2026

(in thousands of Canadian dollars)

Leonovus Inc.
For the year ended December 31, 2025

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS & RESULTS OF OPERATIONS

The following Management's Discussion and Analysis ("MD&A") should be read in conjunction with the audited consolidated financial statements of Leonovus Inc. ("Leonovus" or the "Company") and the notes to those statements as at and for the year ending December 31, 2025.

The accompanying audited consolidated financial statements have been prepared by and are the responsibility of Leonovus's management. The audited consolidated financial statements, including comparatives, have been prepared in accordance with International Financial Reporting Standards ("IFRS").

In this MD&A, "we", "us", "our", "Leonovus", and "the Company" refer to Leonovus Inc. and its consolidated subsidiary, unless the context requires otherwise.

Dollar amounts are expressed in thousands of Canadian dollars unless otherwise noted.

Additional corporate filings are available under the Leonovus profile on SEDAR+ at www.sedarplus.ca.

FORWARD-LOOKING STATEMENTS

The following MD&A contains forward-looking information and forward-looking statements within the meaning of applicable Canadian securities legislation. Forward-looking information and statements include, but are not limited to, statements with respect to planned development and requirements for additional capital. Except for statements of historical fact that addresses activities, events or developments that the Company believes, expects or anticipates will or may occur in the future, constitutes forward-looking statements. The Company cautions that this MD&A may contain forward-looking statements that involve a number of risks and uncertainties, including statements regarding the outlook for the Company's business and results of operations. Forward-looking statements include those identified by the expressions "will", "may", "should", "continue", "anticipate", "believe", "plan", "estimate", "project", "expect", "intend" and similar expressions to the extent that they relate to the Company or its management. By nature, these risks and uncertainties could cause actual results to differ materially from those indicated. Such factors include, without limitation, the various factors set forth in the MD&A and as discussed in public disclosure documents filed with Canadian regulatory authorities. Forward-looking statements are provided to assist external stakeholders in understanding management's expectations and plans relating to the future as of the date of this MD&A and may not be appropriate for other purposes. Forward-looking statements are made as of the date of this MD&A and Leonovus disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Readers should not place undue reliance in the Company's forward-looking statements.

BACKGROUND

Technology Background

The Company has developed intellectual property and product architectures in secure data management, distributed systems, and blockchain-enabled digital transaction technologies. Prior initiatives include: the Galaxa blockchain-based marketplace project (2017-2018), the Vault storage platform, and the Torozo encrypted data platform. While none of these initiatives achieved sustained commercial traction, they contributed institutional knowledge relevant to the design of the TPMX Platform, particularly in areas of tokenized asset handling, identity verification, and smart contract architecture.

Fiscal 2017-2018: Galaxa Initiative

In 2017, the Company announced the development of Galaxa, an enterprise-class, blockchain-enabled, Anything-as-a-Service (XaaS) distributed storage and compute marketplace. Galaxa was designed to aggregate data storage and computing capacity from data centres globally under a single cloud services infrastructure, with transactions facilitated by a native blockchain protocol and a digital security (GAAX). The project incorporated the Company's patented distributed storage and computing technology and involved research into smart-contract compliance enforcement, identity verification, permissioned enterprise blockchain architecture, and reputation-based service provider governance. Following a downturn in the digital asset markets and the absence of a clear regulatory pathway, the Company discontinued Galaxa in late 2018. The project did not proceed to commercial launch.

Fiscal 2019-2023

Key developments during this period included: receipt of USPTO Patent 10,333,860 for distributed data center technology (2019); a $435,000 contract through the Innovative Solutions Canada Program (2020); completion of a 30:1 share consolidation (October 26, 2020); a $1,580,000 private placement of 5,137,203 units at $0.3075/unit (2020); a public offering of 6,143,572 units for $3,440,000 gross proceeds (May 2021); entry into a $100,000 loan agreement with directors Michael Gaffney and Denis Archambault bearing 18% interest (February 2023; subsequently extended to August 3, 2026). The Company also developed XVault, Torozo, and other secure data products during this period.

Proposed Asset Sale to Cylentium Research Ltd. - On January 31, 2024, the Company signed a non-binding Letter of Intent to sell substantially all of its software and patent assets to Cylentium Research Ltd. ("CRL"), a Delaware corporation, for $2,500,000 in an

Leonovus Inc.
For the year ended December 31, 2025

all-cash transaction. In February 2025, the Company cancelled the proposed sale of the Company's current software and patents to CRL. No definitive agreement was executed, no deposit was received, and the Company retained all of its software and patent assets.

Proposed Acquisition of Tradewind Markets Inc.

On April 8, 2024, the Company and Wellfield Technologies Inc. ("Wellfield") entered into a non-binding letter of intent for the Company to acquire all issued and outstanding securities of its subsidiary, Tradewind Markets Inc. ("Tradewind").

A Share Purchase Agreement (the "Tradewind SPA") was executed on September 5, 2024. Trading in the Company's shares was halted on September 6, 2024, following the public announcement of the transaction. The SPA was subsequently amended on December 23, 2024, and twice amended and restated on August 11, 2025, and September 21, 2025.

The proposed transaction contemplated, among other things: (a) the acquisition of all outstanding Tradewind securities in exchange for 24,250,000 post-consolidation shares at a deemed price of $0.20 per share; (b) a consolidation of the Company's shares on a 6.25:1 basis; (c) a name change to "Tradewind Precious Metals Exchange Inc."; and (d) a concurrent financing for aggregate gross proceeds of between $5,000,000 and $5,750,000.

In connection with the proposed transaction: (a) all directors and officers of the Company, holding approximately 6.8% of outstanding shares, entered into support agreements to vote in favour of the transaction; (b) Wellfield was entitled to a $2,000,000 earnout payable in shares upon achievement of certain precious metals under management milestones; and (c) the Company proposed to settle approximately $882,218 of outstanding management salaries and $129,000 of director loans through the issuance of shares at $0.20 per share (post-consolidation). The transaction was subject to regulatory and shareholder approval.

On December 3, 2025, the Company terminated the SPA, having determined that the acquisition was no longer achievable due to the timing of receipt of regulatory approvals required from Wellfield and Tradewind and the receipt of certain diligence deliverables requested and but provided to the Company.

TPMX Platform Development (2024–Present)

Under the terms of the Tradewind SPA, the business being acquired was defined as the operation and management of the Tradewind Ledger and smart contract based financial solutions that enable the Royal Canadian Mint's digitization of VaultChain Gold and VaultChain Silver for its Custodial Participants, as well as customers of Custodial Participants. The Company undertook the responsibility to design, develop, finance, launch and operate a precious metals exchange platform. The Tradewind acquisition would have provided complementary assets including an existing custody relationship with the Royal Canadian Mint and Tradewind's customer base.

During additional due diligence conducted through the fall of 2024, it became apparent that the primary transferable assets from the Tradewind transaction were limited to the items described above, with no material proprietary software or intellectual property, other than the Liquify software application. Accordingly, the Company's proprietary development of the TPMX Platform was, and remains, the central value-creation activity of the initiative. Subsequently, the Company began platform design and architecture planning and commenced substantive application development in early 2025. Throughout this period, the Company's engineering team built the TPMX Platform independently using its own technical resources and expertise, incorporating the Company's prior experience in distributed systems, secure data management, and cloud-based infrastructure derived from its Leonovus and Galaxa initiatives.

Following the termination of the SPA on December 3, 2025 (see Section 2.4), the Company continued platform development. The Company is currently focused on continued development and testing, completion of strategic partnerships, and regulatory engagement prior to any commercial launch.

Patent Monetization Initiative (October 2025)

On October 7, 2025, the Company engaged ICEBERG IP Group Limited ("ICEBERG") to exclusively monetize the Company's patent portfolio. ICEBERG is a specialized intellectual property advisory firm retained to identify licensing, sale, and other commercialization opportunities for the Company's issued patents and pending patent applications. This engagement is independent of the TPMX platform initiative and represents a separate business activity aimed at generating value from the Company's existing intellectual property assets. See "Intellectual Property" (Section 8).

SELECTED FINANCIAL INFORMATION

Results of Operations

The following selected financial data is derived from the December 31, 2025, audited consolidated financial statements of the Company prepared in accordance with IFRS. The Company's presentation currency is in 000's of Canadian dollars.

Leonovus Inc.
For the year ended December 31, 2025

	2025	2024	2023
Revenue	$ -	$ -	$ -
Expenses
General and administrative	810	648	740
Research and development	-	-	61
	810	648	801
Loss from operating activities	(810)	(648)	(801)
Non-operating earnings (expense)
Foreign exchange loss	-	(1)	-
Finance costs	(18)	(36)	(42)
Gain on lease modification	-	-	790
Net loss	(828)	(685)	(53)
Other comprehensive income	16	(29)	(8)
Net loss and comprehensive loss	(812)	(714)	(61)
Net loss per share
Basic and diluted	$ (0.04)	$ (0.03)	$ (0.00)

The Company incurred a net loss and comprehensive loss of $812 for the year ended December 31, 2025, compared to a net loss of $714 for the previous year. The Company expects expenses in 2026 to be similar to 2025, subject to a financing and a launch of the TPMX (as defined above).

General and administrative expenses

General and administrative expenses incurred by the Company are broken down as follows

	2025	2024	% change
Corporate administration	$ 44	$ 70	-47%
Consultant fees	$ 451	$ 463	2%
Professional fees	$ 315	$ 115	-25%
Total general and administrative	$ 810	$ 648	-12%

General and administrative ("G&A") expenses consist primarily of administrative salaries and independent contractors' renumeration. The Company incurred G&A expenses of $810 for the year ended December 31, 2025 compared to $648 for the year ended December 31, 2024. Significant items included in corporate administration include stock exchange compliance fees, legal fees, insurance, rent and other operating expenses. The increase of professional fees from 2025 to 2024 relates to legal expenses on the terminated Tradewind Transaction. The Company expects similar G&A expenses in 2026, subject to subject to a financing and a launch of the TPMX.

Results of Operations – Fourth Quarter of 2025

The Company incurred a net loss and comprehensive loss of $314 for the three months ended December 31, 2025, compared to a net loss of $150 for the three months ended December 31, 2024. The Company expects expenses in 2026 to be similar to 2025, subject to a financing and a launch of the TPMX.

General and administrative ("G&A") expenses consist of administrative salaries, independent contractors' renumeration and professional fees. The Company incurred G&A expenses of $335 for the three months ended December 31, 2025 compared to $166 for the three months ended December 31, 2024. The increase of G&A expenses from 2025 to 2024 relates to legal expenses on the terminated Tradewind Transaction. Other G&A items included in corporate administration include stock exchange compliance fees, legal fees, insurance, rent and other operating expenses. The Company expects similar G&A expenses in 2026, subject to subject to a financing and a launch of the TPMX.

Cash flows

The Company's cash and short-term investment position was $20 as at December 31, 2025 compared to $8 at December 31, 2024.

Cash outflows from operating activities for the year ended December 31, 2025, were ($4) compared to outflows of $36 in 2024. The Company expects further outflows from operating activities and expects fluctuations in working capital for 2026.

Leonovus Inc.
For the year ended December 31, 2025

There were no shares issued from the exercise of stock-based compensation options for year ended 2025 or 2024.

Liquidity and Capital Resources

Working capital at the end of December 2025 was ($3,069) compared to ($2,257) at the end of 2024. The decrease in working capital at the end of the December 31, 2025, is mainly due to the lack of financing. The Company expects to consume cash in general business activities in terms of continued research and development and administrative costs. The Company expects working capital to fluctuate throughout 2026.

The Company currently does not have revenue and therefore Management is continuing to follow up on additional financing opportunities or transactions in order to secure sufficient working capital to meet its operational requirements and be able to pay its existing liabilities. However, there can be no assurance that the Company will be able to obtain sufficient funds continue to fund its operations.

Related party transactions

The key management personnel have been identified as the directors and officers of the Company based on their authority and responsibility for planning and directing the activities of the Company. By title, these are the independent directors, Chief Executive Officer, Chief Technology Officer, Chief Financial Officer, VP Product Management, VP Engineering, and Senior VP Sales. The remuneration of key management personnel who held these positions during the year was as follows:

	2025		2024
Salaries and fees	$	420	$
Share-based compensation	-	-	5
	$	420	$

Salaries include cash payments for base salaries. Director's fees include meeting fees and any Leonovus specific travel expenses incurred. Share-based compensation includes the compensation expense recognized during the year for key management personnel. There were no stock options and no warrants exercised by key management personnel in 2025 (2024 – Nil).

During the fiscal year ended December 31, 2025, the Company incurred $240 (2024 - $240) of consultant expenses to a Company controlled by the Chief Executive Officer.

During the fiscal year ended December 31, 2025, the Company incurred $75 (2024 - $75) of consultant expenses by the Chief Financial Officer.

During the fiscal year ended December 31, 2025, the Company incurred $5 (2024 - $7) of consultant expenses by the Chief Technology Officer.

Included in trade and other liabilities are amounts owed to directors of $170 (2024 - $113) and key management of $1,439 (2024 - $1,024).

On February 3, 2023, the Company entered into a loan agreement with the Chief Executive Officer and a member of the Board of Directors in the amount of $100. Terms of the loan include interest to be paid at a rate of 18% per annum, payable at maturity. The loan and any accumulated interest are due eighteen months after the advance date. As a bonus for the loan, the lenders were issued 2,000,000 common share purchase warrants, exercisable at $0.05 for eighteen months, during the year the maturity date on the warrants were extended to August 3, 2026.

Outstanding share data

The share capital of the Company consists of an unlimited number of common shares, without par value. All shares are equally eligible to receive dividends, the repayment of capital and represent one vote at the shareholders' meetings.

As at December 31, 2025, December 31, 2024 and April 22, 2026 the Company had 20,900,996 common shares outstanding.

Outstanding warrant data

As at December 31, 2025 and 2024, the Company has the following warrants with average exercise prices and expiry dates outstanding:

	Number of whole share warrants	Average exercise price	Expiry date
Balance, December 31, 2024	2,000,000	0.05	Aug 3, 2025
Balance, December 31, 2025	2,000,000	0.05	Aug 3, 2026

Leonovus Inc.
For the year ended December 31, 2025

Outstanding Option data

As at December 31, 2025 and 2024, the Company has Nil options outstanding.

Review of quarterly operating results

	2025				2024
	Q4	Q3	Q2	Q1	Q4	Q3	Q2	Q1
Operating expenses	$335	$155	$152	$168	$168	$146	$188	$146
Loss from operating activities	(335)	(155)	(152)	(168)	(168)	(146)	(188)	(146)
Finance costs	(5)	(4)	(5)	(4)	(8)	(8)	(12)	(8)
Foreign exchange	-	-	-	-	(1)	-	-	-
Net loss before income taxes	$(340)	$(159)	$(157)	$(172)	$(177)	$(154)	$(200)	$(154)

SUBSEQUENT EVENTS

None

Additional Disclosure for Venture Issuers Without Significant Revenue

(a) capitalized or expensed exploration and development costs - none
(b) expensed research and development costs - none
(c) deferred development costs - none
(d) general and administration expenses – other than detailed above in the results of operations, office and administration costs which totaled $810 (2024 - $648) for the year ended December 31, 2025 include consulting & management fees of $451 (2024 - $463), stock based compensation $nil (2024 - $11), subscription fees of $12 (2024 - $32), filing and legal fees of $321 (2024 - $110), audit and tax fees of $25 (2024 - $29), office expenses of $1 (2024 - $2) and bank charges of $1 (2024 - $1).

ACCOUNTING POLICIES

Statement of compliance

The consolidated financial statements, including comparatives, have been prepared in accordance with International Financial Reporting Standards. The consolidated financial statements were approved and authorized for issue by the Board of Directors on April 13, 2026.

Critical accounting estimates and judgments

The Company's consolidated financial statements are prepared in accordance with IFRS recognition and measurement principles that often require management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts presented and disclosed in the consolidated financial statements. Management reviews these estimates and assumptions on an ongoing basis based on historical experience, changes in business conditions and other relevant factors as it believes to be reasonable under the circumstances. Changes in facts and circumstances may result in revised estimates, and actual results could differ from those estimates. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

Estimation uncertainty

Useful lives of depreciable assets

The useful lives of depreciable assets have been determined based on management estimated utility of the assets. Uncertainties in these estimates relate to technological obsolescence that may change the utility of certain software and IT equipment.

Share-based compensation

The estimation of share-based compensation requires the selection of an appropriate valuation model and consideration as to the inputs necessary for the valuation model chosen. The Company has made estimates as to the volatility of its own share, the forfeiture rate of share options granted and the time of exercise of those share options. The model used by the Company is the Black-Scholes valuation model.

Leonovus Inc.
For the year ended December 31, 2025

Warrants

In calculating the value of the warrants, key estimates such as the value of the common share, the expected life of the warrant, the volatility of the Company's stock price and the risk-free interest rate are used.

Significant management judgments

Recognition of deferred tax assets

Deferred tax assets are recognized for unused tax losses and credits to the extent that it is probable that taxable income will be available against which the losses can be utilized. These estimates are reviewed at every reporting date. Information about assumptions and estimation based upon the likely timing and the level of the reversal of existing timing differences, future taxable income and future tax planning strategies, is included in Note 14. The tax rules in the numerous jurisdictions in which the Company operates are also taken into consideration.

Research and development

Research costs are expensed as incurred. Development costs are deferred and amortized when the criteria for intangible assets are met, or otherwise, are expensed as incurred. To date, no development costs have been deferred.

Investment tax credits

The Company is entitled to certain Canadian investment tax credits for qualifying research and development activities performed in Canada. These credits can be applied against future income taxes payable and are subject to a twenty-year carry forward period. If the Company is not in a taxable position a portion of these credits, are cash refundable.

Investment tax credits are accounted for as a reduction of operating expenses and are accrued as qualifying expenditures are made provided it is probable that the credits will be realized. To date the Company has only accrued the amount of tax credits that are refundable as an offset to research and development expense.

Functional currency

In assessing the functional currency, each entity within the Company determines its own functional currency, and the items included in the financial statements of each entity are measured using that functional currency. The functional currency determination involves certain judgments in evaluating the primary economic environment, and the Company reconsiders the functional currencies of each entity if there is a change in the underlying transactions, events and conditions which determine the primary economic environment.

Going concern risk assessment

Management considers whether there exists any event(s) or condition(s) that may cast significant doubt on the Company's ability to continue as a going concern. Considerations take into account all available information about the future including the availability of debt and equity financing as well as the Company's working capital balance and future commitments.

Contingencies

Management uses judgment to assess the existence of contingencies. By their nature, contingencies will only be resolved when one or more future events occur or fail to occur. Management also uses judgment to assess the likelihood of the occurrence of one or more future events. When contingencies exist, Management estimates the related financial impact to the Company based on the possible outcomes of one or more future events.

Management's Conclusion on the design of Internal Controls over Financial Reporting

The Chief Executive Officer and the Chief Financial Officer have evaluated the effectiveness of the Company's disclosure and internal controls and procedures as at December 31, 2025 and have concluded that the Company's controls and procedures provide reasonable assurance that material information relating to the Company, including its consolidated subsidiary, was made known to them and reported as required, particularly during the period in which this report was being prepared.

Management's Conclusion on the effectiveness of Disclosure Controls

The Chief Executive Officer and the Chief Financial Officer have evaluated the effectiveness of the Company's disclosure controls and procedures as of December 31, 2025 and have concluded that the Company's disclosure controls and procedures were adequate and effective to ensure that material information relating to the Company and its consolidated subsidiary would have been known to them.

Leonovus Inc.
For the year ended December 31, 2025

CORPORATE GOVERNANCE

The three-person Board of Directors of Leonovus Inc. is composed of two independent directors who are not related to the Company. One director has been appointed as the Chairman of the Board of Directors and as Chief Executive Officer of the Company, while another director has been appointed Chief Technology Officer of the Company. The two independent directors fulfil the Audit Committee and all directors fulfil the Compensation Committee mandates. The Board and Management will continue to ensure compliance with regulatory requirements.

RISKS AND UNCERTAINTIES

Investors should carefully consider the risks described below. The following is a summary of certain risk factors relating to the business and affairs of Leonovus which should be carefully considered in understanding the risks of applicable to the Company. The risks described below are not intended to be an exhaustive list of all of the risks facing the Company. Additional risks and uncertainties not currently known to the Company, or that management of the Company consider immaterial, may also affect the business and operations of the Company. If any of these risks actually occur, the business, financial condition, liquidity or results of operations of the Company could be adversely affected.

Blockchain Technology Risk

The Company is actively engaged in blockchain technology and may be subject to the following risks:

New Technology Risk. The mechanics of using blockchain technology to transact in other types of assets, such as securities or derivatives, is less clear. There is no assurance that widespread adoption will occur. A lack of expansion in the usage of blockchain technology could adversely affect the Company.
Theft, Loss or Destruction Risk. Transacting on a blockchain depends, in part, specifically on the use of cryptographic keys that are required to access a user's account (or "wallet"). The theft, loss or destruction of these keys impairs the value of ownership claims users have over the relevant assets being represented by the ledger (whether "smart contracts", securities, currency or other digital assets). The theft, loss or destruction of private or public keys needed to transact on a blockchain could also adversely affect a company's business or operations if it were dependent on the ledger.
Competing Platforms and Technologies Risk. The development and acceptance of competing platforms or technologies may cause consumers or investors to use an alternative to blockchain.
Cyber Security Incidents Risk. Cyber security incidents may compromise the Company, its operations or its business. Cyber security incidents may also specifically target a user's transaction history, digital assets, or identity, thereby leading to privacy concerns. In addition, certain features of blockchain technology, such as decentralization, open source protocol, and reliance on peer-to-peer connectivity, may increase the risk of fraud or cyber-attack by potentially reducing the likelihood of a coordinated response.
Developmental Risk. Blockchain technology may never develop optimized transactional processes that lead to realized economic returns for the Company. The Company may not in fact do so or may not be able to capitalize on blockchain technologies. The development of new or competing platforms may cause consumers and investors to use alternatives to blockchain.
Intellectual Property Claims Risk. A proliferation of recent start-ups attempting to apply blockchain technology in different contexts means the possibility of conflicting intellectual property claims could be a risk to the Company, its operations or its business. This could also pose a risk to blockchain platforms that permit transactions in digital securities. Regardless of the merit of any intellectual property or other legal action, any threatened action that reduces confidence in the viability of blockchain technology may adversely affect the Company.
Lack of Regulation Risk. Digital assets and their associated platforms are largely unregulated, and the regulatory environment is rapidly evolving. Because blockchain technology works by having every transaction build on every other transaction, participants can self-police any corruption, which can mitigate the need to depend on the current level of legal or government safeguards to monitor and control the flow of business transactions. As a result, companies engaged in such activities may be exposed to adverse regulatory action, fraudulent activity or even failure.
Third Party Product Risk. Where blockchain is built using third party products, those products may contain technical defects or vulnerabilities beyond a company's control. Open-source technologies that are used to build a blockchain technology application may also introduce defects and vulnerabilities.
Reliance on the Internet Risk. Blockchain technology functionality relies on the internet. A significant disruption of internet connectivity affecting large numbers of users or geographic areas could impede the functionality of blockchain technology and adversely affect the Company.
Internet Company Risk. Many internet-related companies have incurred large losses since their inception and may continue to incur large losses in the hope of capturing market share and generating future revenues. Accordingly, many such companies expect to incur significant operating losses for the foreseeable future, and may never be profitable. The markets in which many internet companies compete face rapidly evolving industry standards, frequent new service and product announcements, introductions and enhancements, and changing customer demands. The failure of an internet company to adapt to such changes could have a material adverse effect on the company's business. Additionally, the widespread adoption of new internet, networking, telecommunications technologies, or other technological changes could require substantial expenditures by an internet company to modify or adapt its services or infrastructure, which could have a material adverse effect on an internet company's business.
Software Industry Risk. The software industry can be significantly affected by intense competition, aggressive pricing, technological innovations, and product obsolescence. Companies in the software industry are subject to significant competitive pressures, such as aggressive pricing, new market entrants, competition for market share, short product cycles due to an accelerated rate of technological developments and the potential for limited earnings and/or falling profit margins. These companies also face the risks that new services, equipment or technologies will not be accepted by consumers and businesses or will become rapidly obsolete. These factors can affect the profitability of these companies and, as a result,

Leonovus Inc.
For the year ended December 31, 2025

the value of their securities. Also, patent protection is integral to the success of many companies in this industry, and profitability can be affected materially by, among other things, the cost of obtaining (or failing to obtain) patent approvals, the cost of litigating patent infringement and the loss of patent protection for products (which significantly increases pricing pressures and can materially reduce profitability with respect to such products). In addition, many software companies have limited operating histories. Prices of these companies' securities historically have been more volatile than other securities, especially over the short term technologies.

Acceptance and Adoption of Blockchain.

Blockchain technologies represent a new technological innovation and a new asset class, respectively. The use of blockchain technologies to, inter alia, buy and sell goods and services and complete other transactions, is part of a new and rapidly evolving industry. The growth of this industry is subject to a high degree of uncertainty, and the slowing or cessation of development or acceptance of blockchain technologies would have a direct adverse impact on the Company's operations. To date blockchain technology has not been widely used and adopted technology thus limiting the ability of end-users to use such assets and technologies. Conversely, a significant portion of the demand is being generated by speculators and investors seeking to profit from trading or investing in blockchain technologies. Such speculation has led to increased price volatility, which could adversely impact the profitability of blockchain computing activities.

Factors affecting the further development of the blockchain include, but are not limited to:

the continued worldwide growth in the adoption and use of blockchain technology;
governmental and quasi-government regulation of or restrictions on the use of blockchain technologies or access to and operation of blockchain technology systems and networks;
the maintenance and development of the open-source software protocol of certain blockchain networks;
advancements in technology, including computing power, that may render existing blockchain technology obsolete or inefficient;
anti-competitive behavior from traditional financial services;
consumer sentiment and perception of blockchain technology and the inherent risks in its use and changes in consumer demographics; and
general economic conditions and the regulatory environment relating to blockchain technology.

Transaction Volumes

The ability of the Company to derive future revenues and become economically viable, depends, in part, on the Company's ability to achieve sufficiently high levels of transaction volume. The Company's current business model assumes future revenue will be made up primarily of high-volume transaction-based revenue generating streams and various fees for value-added services. The ability to achieve such transaction volumes will be dependent upon a number of factors, including the further development and acceptance of blockchain networks, and the acceptance and adoption of the Company's products and services. In addition, blockchains face significant scaling obstacles and face high barriers to entry, all of which could affect the Company's ability to achieve sufficiently high transaction volumes. Transaction volumes may also be affected by global macroeconomic conditions, including rising interest rates or inflation, high unemployment, increasing energy and raw material prices, increased volatility in global capital markets, international conflicts, pandemics (such as COVID-19), sovereign debt concerns, currency devaluation and other matters outside of the Company's control. The failure of any one of the Company's existing or future business lines to achieve sufficiently high transaction volumes could have a material adverse effect on the Company's business, results of operations and financial condition.

Uncertainty in the Market for Blockchain Technologies

The market for blockchain technologies, is still emerging and the market demand, price sensitivity and preferred business model for performing blockchain computing activities remains highly uncertain. As such, the Company's growth will be dependent on, among other things, the size and pace at which the blockchain computing industry develops. If this market does not gain widespread acceptance and declines, remains constant or grows more slowly than anticipated, the Company may not be able to grow, and its overall revenues and operating results will be materially and adversely affected. In addition, other competing technologies may be developed that have advantages over the Company's products and services, and manufacturers of other products or developers of other services based on these competing technologies may be able to deploy their products and services at a lower cost enabling them to compete more effectively.

Internet Infrastructure

The success of blockchain platforms will depend on the continued development of a stable public infrastructure, with the necessary speed, data capacity and security, and the timely development of complementary products such as high-speed modems for providing reliable internet access and services. Blockchain platforms have experienced, and are expected to continue to experience, significant growth in the number of users and amount of content. There can be no assurances that the relevant Blockchain infrastructure will continue to be able to support the demands placed on it by this continued growth or that the performance or reliability of the technology will not be adversely affected by this continued growth. The failure of these technologies or platforms could have a material adverse effect on the Company's business, results of operations and financial condition.

A mass market for the Company's products may never develop or may take longer to develop than the Company anticipates

Leonovus Inc.
For the year ended December 31, 2025

The Company's products represent emerging markets, and the Company does not know whether end-users will want to use them in commercial volumes. In such emerging markets, demand and market acceptance for recently introduced products and services are subject to a high level of uncertainty and risk. The development of a mass market for the Company's products may be affected by many factors, some of which are beyond the Company's control, including the emergence of newer, more competitive technologies and products, the cost of supplies used by the Company's products, regulatory requirements, consumer perceptions of the safety of its products and related supplies, and end user reluctance to buy a new product.

If a mass market fails to develop, or develops more slowly than the Company anticipates, the Company may never achieve profitability. In addition, the Company cannot guarantee that the Company will continue to develop, manufacture or market its products if sales levels do not support the continuation of the product.

Implementation of the Company's Business Plan

The Company's future growth, profitability and cash flows depend upon its ability to successfully implement its business plan, which in turn is dependent upon a number of factors including the Company's ability to derive value based on its current and planned business lines.

There can be no assurance that the Company can successfully derive value on any or all of these business lines in the manner or time period that it expects. Further, achieving these objectives will require investments which may result in short-term costs exceeding short-term revenues and therefore may be dilutive to the Company's earnings. The Company cannot provide any assurance that it will realize, in full or in part, the anticipated benefits that the Company expects its strategies will achieve. The failure to realize those benefits could have a material adverse effect on the Company's business, results of operations and financial condition.

Moreover, the Company's future success will also depend on its ability to effectively control and/or reduce costs. There is no guarantee that the Company will be able to successfully implement effective cost control systems or otherwise reduce its operating costs, as necessary. If the Company is unable to successfully control its operating costs, it may be forced to discontinue operations.

The Company depends on its intellectual property, and its failure to protect that intellectual property could adversely affect its expected future growth and success.

Failure to protect the Company's intellectual property rights may result in the loss of its exclusivity regarding, or the right to use, its technologies. If the Company does not adequately ensure its freedom to use certain technology, the Company may have to pay others for rights to use their intellectual property, pay damages for infringement or misappropriation, or be enjoined from using such intellectual property. The Company relies on trade secret, trademark and copyright laws to protect its intellectual property. In addition, effective trade secret, trademark and copyright protection may be unavailable, limited or not applied for in certain countries.

The Company also seeks to protect its proprietary intellectual property, including intellectual property that may not be patented or patentable, in part by confidentiality agreements and, if applicable, inventors' rights agreements with its strategic partners and employees. The Company can provide no assurance that these agreements will not be breached, that the Company will have adequate remedies for any breach, or that such persons or institutions will not assert rights to intellectual property arising out of these relationships.

Certain of the Company's intellectual property have been licensed to the Company on a non exclusive basis from third parties who may also license such intellectual property to others, including the Company's competitors. If necessary or desirable, the Company may seek further licences under the patents or other intellectual property rights of others. However, the Company may not be able to obtain such licences or the terms of any offered licences may not be acceptable to the Company. The failure to obtain a licence from a third party for intellectual property use could cause the Company to incur substantial liabilities and to suspend the manufacture or shipment of products or the Company's use of processes requiring the use of such intellectual property.

The Company may become subject to lawsuits in which it is alleged that it has infringed the intellectual property rights of others or commence lawsuits against others who the Company believes are infringing upon its rights. The Company's involvement in intellectual property litigation could result in significant expense to the Company, adversely affecting the development of sales of the challenged product or intellectual property and diverting the efforts of its technical and management personnel, whether or not such litigation is resolved in its favour.

Industry and Market are New

The Company operates its business in a relatively new industry and market. There is no assurance the Company will be able to derive meaningful revenue from its investment in blockchain technology, or to pursue that business to the extent currently proposed or at all. In addition to being subject to general business risks, the Company must continue to build brand awareness in this industry and market through significant investments in its strategy, its production capacity, quality assurance and compliance with regulations. In addition, there is no assurance that the industry and market will continue to exist and grow as currently estimated or anticipated or function and evolve in the manner consistent with management's expectations and assumptions. Any event or circumstance that adversely affects the Company's industry and market could have a material adverse effect on the Company's business, financial conditions and results of operations.

Leonovus Inc.
For the year ended December 31, 2025

Limited Operating History

The Company has a limited history of operations on which potential investors might evaluate its performance, in addition the industry in which the Company operates and intends to operate is in its infancy and many of the Company's business lines are nascent. Consequently, the Company is subject to many of the risks common in early-stage enterprises, including under-capitalization, cash shortages, limitations with respect to personnel, financial and other resources and lack of revenues, any of which could have a material adverse effect on the Company and may force it to reduce or curtail operations. In addition, the Company has a limited history of earnings, and there is no assurance that any of its future operations, services or products will generate earnings, operate or continue operating profitably or provide a return on investment in the future. There is no assurance that the Company will be successful in achieving a return on shareholders' investment and the likelihood of success must be considered in light of its early stage of operations.

Furthermore, the business lines in which the Company and its subsidiaries operate are nascent, unproven and subject to material legal, regulatory, operational, reputational, tax and other risks in every jurisdiction in which they operate and, as such, are not assured to be profitable. The Company is pursuing a number of different opportunities in its evolving industry. It is possible that some, or all, of these opportunities will not result in a profitable business line or a productive use of capital or time. This could result in the Company becoming involved in business opportunities that are not related to its current business plans or strategy.

The Company may also launch new business lines and pursue new business opportunities, offer new products and services within existing businesses, or undertake other strategic projects. There are substantial risks and uncertainties associated with these efforts and the Company and its subsidiaries would need to invest significant capital and resources into such efforts. Additionally, the Company's revenue and costs may fluctuate due to start-up costs associated with new business or products and services while revenues may take time to develop, all of which could have a material adverse effect on the Company's business, results of operations and financial condition.

Competitive Conditions

Competition in the blockchain technology industry is growing as various public and private companies enter the market. As a result of this competition, some of which is with large, well established companies with substantial capabilities and significant financial and technical resources, the Company may be unable to compete successfully in the future. There can be no assurance that the Company will be able to grow or sustain its business in the presence of these competitive conditions.

Challenges in Quantifying Blockchain Technology

Because the blockchain technology industries are in a nascent stage with uncertain boundaries, there is a lack of information about comparable companies available for potential investors to review in deciding about whether to invest in the Company and, few, if any, established companies whose business model the Company can follow or upon whose success the Company can build. Accordingly, investors will have to rely on their own estimates in deciding whether or not to invest in the Company. There can be no assurance that the Company's estimates are accurate or that the market size is sufficiently large for its business to grow as projected, which may negatively impact its financial results. The Company regularly follows market research.

Traditional Financial Service Providers

A number of companies providing blockchain-related products and services have had challenges finding banks and insurance companies willing to provide them with banking and insurance services, and a number of blockchain-based companies have had their existing bank accounts closed by their banks for various reasons. Banks and insurance companies may not provide banking or insurance services, or may cut off banking or insurance services, to businesses that provide blockchain-related products and services, such as perceived compliance risks or costs. The inability to open bank accounts or to obtain insurance may make it difficult to operate the Company's operations. In addition to banks and insurance companies, other third-party service providers including accountants and lawyers may also decline to provide services to companies engaged in blockchain related business because of the perceived risk profile associated with such business or the lack of regulatory certainty. The failure of blockchain related businesses to obtain necessary services could have a material adverse effect on the Company's business, results of operations and financial condition.

Additional Capital

The Company plans to focus on further developing and commercializing its operations and will use its working capital to carry out such initiatives. However, this may require substantial additional financing. Further expansion of the Company's business may be dependent upon its ability to obtain financing through equity or debt, and there can be no assurance that it will be able to obtain adequate financing in the future or that the terms of such financing will be favourable. Failure to obtain such additional financing could result in the delay or indefinite postponement of further development of the Company's planned initiatives.

Risks Relating to doing Business Internationally

The Company is subject to risks generally associated with doing business in international markets. Conducting business in existing and new international jurisdictions does and will require management's attention and financial resources, which would otherwise be spent on other parts of the business. In addition to the risks mentioned elsewhere, these risks and expenses could have a material adverse effect on the Company's business, results of operations and financial condition and include without limitation:

adverse currency rate fluctuations;
multiple, changing and often inconsistent enforcement of laws, rules and regulations;

Leonovus Inc.
For the year ended December 31, 2025

the imposition of restrictions on trade, currency conversion or the transfer of funds or limitations on the Company's ability to repatriate non-Canadian earnings in a tax effective manner;
the imposition of Canadian, United States and/or other international sanctions against a country, company, person or entity with whom the Company does business that would restrict or prohibit the Company's continued business with the sanctioned country, company, person or entity;
downward pricing pressure on our products in the Company's international markets, due to competitive factors or otherwise;
political, social or economic unrest or instability, including without limitation military conflicts and acts of terrorism, military repression, war or civil war, social and labour unrest, organized crime, hostage-taking and violent crime;
greater risk on credit terms, longer payment cycles and difficulties in enforcing agreements and collecting receivables through certain foreign legal systems; and
difficulties in enforcing or defending intellectual property rights.

Moreover, governments in certain foreign jurisdictions intervene in their economies, sometimes frequently, and occasionally make significant changes in policies and regulations. Operations may be affected in varying degrees by government regulations with respect to, but not limited to, restrictions on doing business, price controls, export controls, currency remittance, importation of product and supplies, income and other taxes, royalties, the repatriation of profits, expropriation of property, foreign investment, maintenance of concessions, licenses, approvals and permits, environmental matters, land use, land claims of local people, water use and workplace safety. Furthermore, some of the Company's operations and sales are conducted in parts of the world that experience illegal sales practices or corruption or are operated under legal systems susceptible to undue influences to some degree. Although the Company has policies and procedures in place that are designed to promote legal and regulatory compliance, the employees, business partners and consultants of the Company could take actions that violate applicable anti-corruption laws or regulations. Violations of these laws, or allegations of such violations, could result in loss, reduction or expropriation and/or a material adverse effect on the Company's business, results of operations and financial condition.

Furthermore, the Company's experience with selling products and services in its current international markets may not be relevant or may not necessarily translate into favourable results if it sells in other international markets. If and when the Company enters into new markets in the future, it may experience different competitive conditions, less familiarity by customers with the Company's brand and/or different customer requirements. As a result, the Company may be less successful than expected in expanding sales in its current and targeted international markets. Sales into new international markets may take longer to ramp up and reach expected sales and profit levels, or may never do so, thereby affecting the Company's overall growth and profitability. To build brand awareness in these new markets, the Company may need to make greater investments in legal compliance, advertising and promotional activity than originally planned, which could negatively impact the expected profitability of sales in those markets. These or one or more of the other factors may harm the Company's business, results of operations or financial condition. Any material decrease in our international sales or profitability could also adversely impact the overall business, results of operations or financial condition of the Company.

The Company will continue to monitor developments and policies in the emerging markets in which it will operate and assess the impact thereof to its business lines, however such developments cannot be accurately predicted and could have an adverse effect on the Company's operations or profitability.

Anti-Money Laundering and Corrupt Business Practices

The Company may conduct business in regions which have experienced high levels of business corruption and other criminal activity. The Company and its personnel are required to comply with applicable anti-bribery laws, including the Canadian Corruption of Foreign Public Officials Act, as well as local laws in all areas in which the Company does business. These, among other things, include laws in respect of the monitoring of financial transactions and provide a framework for the prevention and prosecution of corruption offences, including various restrictions and safeguards. However, there can be no guarantee that these laws will be effective in identifying and preventing money laundering terrorism financing and sanctions circumvention and corruption. The failure of some of the governments where the Company does business to fight corruption or the perceived risk of corruption could have a material adverse effect on the local economies. Any allegations of corruption or evidence of money laundering in those countries could adversely affect ability of those countries to attract foreign investment and thus have a material adverse effect on its economy which in turn could have a material adverse effect on the Company's business, results of operations and financial condition. Moreover, findings against the Company, the directors, the officers or the employees of the Company, or their involvement in corruption or other illegal activity could result in criminal or civil penalties, including substantial monetary fines, against the Company, the directors, the officers or the employees of the Company. Any government investigations or other allegations against the Company, the directors, the officers or the employees of the Company, or finding of involvement in corruption or other illegal activity by such persons, could significantly damage the Company's reputation and its ability to do business and could have a material adverse effect on the Company's business, results of operations and financial condition.

The Company seeks to implement AML measures, counter terrorism financing ("CFT"), 'know your client' ("KYC"), sanctions policies, and other policies and procedures that are consistent with Canadian, United States, and applicable foreign laws and regulations surrounding AML matters, foreign corrupt practices and terrorist financing. Nonetheless, the Company may not be able to prevent illegal or corrupt activity from occurring on or through its services. The use of blockchain for illegal purposes on or through the Company's services, or allegations or investigations with respect to potential such use, could result in significant legal and financial exposure to the Company, including permanent damage to the Company's reputation. Due to the pseudonymous nature of blockchain transactions the Company may inadvertently without its knowledge engage in transactions with persons named on sanction lists. As the Company's business requires the Company to download and retain one blockchain to effectuate its ongoing business, it is possible that such digital ledger contain prohibited depictions. To the extent government enforcement authorities or regulators may enforce these and other laws and regulations that are impacted by decentralized blockchain technology, the Company may be subject to investigation, administrative or court proceedings, and civil or criminal monetary fines and penalties, all of which could harm our reputation and affect the value of our securities.

Leonovus Inc.
For the year ended December 31, 2025

The Company currently does and will in the future rely on third-party service providers to assist it in complying with AML, CFT and sanctions matters, and other corrupt practices legislation, and there can be no assurances that such service provides will detect or prevent all real or potential illegal activity or comply with all aspects of applicable law and regulation. Any failure of the Company or its service providers to comply with AML, CFT, sanctions, KYC or other foreign corrupt practices legislations or regulations could have a material adverse effect on the Company's business, results of operations and financial condition.

The Company may experience cybersecurity threats to its information technology infrastructure and systems, and unauthorized attempts to gain access to its proprietary or confidential information, as may its customers, suppliers, subcontractors and joint venture partners.

The Company depends on information technology infrastructure and systems ("IT Systems"), hosted internally and outsourced, to process, transmit and store electronic data and financial information (including proprietary or confidential information), and manage business operations. Its business requires the appropriate and secure utilization of sensitive, confidential or personal data or information belonging to its employees, customers and partners. In addition, proprietary or confidential information may be stored on IT Systems of the Company's suppliers, customers and partners. Increased global cybersecurity vulnerabilities, threats and more sophisticated and targets cyber-related attacks pose a risk to the security of the Company's and its customers', partners', suppliers' and third-party service providers' IT Systems and the confidentiality, availability and integrity of the Company's and its customers' and partners' data or information. While the Company has made investments seeking to address these threats, including monitoring of networks and systems, hiring of experts, employee training and security policies for employees, it may face difficulties in anticipating and implementing adequate preventative measures and remain potentially vulnerable. The Company must rely on its own safeguards as well as the safeguards put in place by its suppliers, customers and partners to mitigate the threats. Its internal systems are audited for cybersecurity vulnerabilities by third party security firms to ensure the Company is prepared for new and emerging threats. Its suppliers, customers and partners have varying levels of cybersecurity expertise and safeguards, most have yearly compliance audits that are available upon request.

An IT System failure or non-availability, cyber-attack or breach of systems security could disrupt its operations, cause the loss of, corruption of, or unauthorized access to sensitive, confidential or personal data or information or expose it to regulatory investigation, litigation or contractual penalties. The Company's customers, partners or governmental authorities may question the adequacy of cybersecurity processes and procedures and this could have a negative impact on existing business or future opportunities. Furthermore, given the highly evolving nature of cybersecurity threats or disruptions and their increased frequency, the impact of any future incident cannot be easily predicted or mitigated, and the costs related to such threats or disruptions may not be fully insured or indemnified by other means.

Financing Risks

The Company will need to raise capital for the future growth and development of its technology as the Company has no source of operating cash flow and no assurance that funding will be available.

Global Financial Conditions

Recent global financial conditions have been characterized by increased volatility and access to public financing. These conditions may affect the Company's ability to obtain equity or debt financing in the future on terms favourable to the Company or at all. If such conditions continue, the Company's operations could be negatively impacted.

Insurance and Uninsured Risks

The Company's business is subject to a number of risks and hazards generally, including adverse environmental conditions, industrial accidents, disputes, and changes in the regulatory environment. Such occurrences could result in damage to production facilities, personal injury or death, monetary losses and possible legal liability.

Although the Company may maintain insurance to protect against certain risks in such amounts as it considers to be reasonable, its insurance will not cover all the potential risks associated with a Company's operations. The Company may also be unable to maintain insurance to cover these risks at economically feasible premiums. Insurance coverage may not continue to be available or may not be adequate to cover any resulting liability. Losses from these events may cause the Company to incur significant costs that could have a material adverse effect upon its financial performance and results of operations.

Audit of Tax Filings

The Company's taxes may be affected by a number of factors, some of which are outside of its control, including the application and interpretation of the relevant tax laws and treaties. If the Company's filing position, application of tax incentives or similar 'holidays' or benefits were to be challenged for whatever reason, this could have a material adverse effect on its business, results of operations and financial condition. The Company may be subject to routine tax audits by various tax authorities. Tax audits may result in additional tax, interest payments and penalties which would negatively affect the Company's financial condition and operating results. New laws and regulations or changes in tax rules and regulations or the interpretation of tax laws by the courts or the tax authorities may also have a substantial negative impact on the Company's business. There is no assurance that the Company's current financial condition will not be materially and adversely affected in the future due to such changes.

Leonovus Inc.
For the year ended December 31, 2025

Market for the Company Shares

There can be no assurance that an active market for the Company Shares will develop or be sustained. If an active public market for the Company Shares does not develop, the liquidity of a purchaser's investment may be limited, and the share price may decline.

Market Price of Company Shares

The Company Shares trade on the TSX Venture Exchange. Securities of micro-cap and small-cap 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 include macroeconomic developments in North America and globally and market perceptions of the attractiveness of particular industries. The price of the Company Shares is also likely to be significantly affected by short-term changes the market's appetite for blockchain technology companies or in its financial condition or results of operations as reflected in its quarterly earnings reports. Other factors unrelated to the Company's performance that may have an effect on the price of the Company Shares include the following: (i) the extent of analytical coverage available to investors concerning the Company's business may be limited if investment banks with research capabilities do not follow the Company's securities; (ii) lessening in trading volume and general market interest in the Company's securities may affect an investor's ability to trade significant numbers of Company Shares; (iii) the size of the Company's public float may limit the ability of some institutions to invest in the Company's securities; and (iv) a substantial decline in the price of the Company Shares that persists for a significant period of time could cause the Company's securities to be delisted from such exchange, further reducing market liquidity.

As a result of any of these factors, the market price of the Company Shares at any given point in time may not accurately reflect the Company's long-term value. Securities class action litigation often has been brought against companies following periods of volatility in the market price of their securities. The Company may in the future be the target of similar litigation. Securities litigation could result in substantial costs and damages and divert management's attention and resources.

Dividend Policy

No dividends on the Company Shares have been paid by the Company to date. Investors in the Company's securities cannot expect to receive a dividend on their investment in the foreseeable future, if at all. Accordingly, it is unlikely that investors will receive any return on their investment in the Company's securities other than through possible share price appreciation.

Acquisitions and Integration

From time to time, it can be expected that the Company will examine opportunities to acquire additional related assets and businesses. Any acquisition that the Company may choose to complete may be of a significant size, may change the scale of the Company's business and operations, and may expose the Company to new operating and financial risks. The Company's success in its acquisition activities depends upon its ability to identify suitable acquisition candidates, negotiate acceptable terms for any such acquisition, and integrate the acquired operations successfully with those of the Company. Any acquisitions would be accompanied by risks. In the event that the Company chooses to raise debt capital to finance any such acquisitions, the Company's leverage will be increased. If the Company chooses to use equity as consideration for such acquisitions, existing shareholders may suffer dilution. Alternatively, the Company may choose to finance any such acquisitions with its existing resources. There can be no assurance that the Company would be successful in overcoming these risks or any other problems encountered in connection with such acquisitions.

Dilution

The Company requires additional monies to fund research and development programs and potential acquisitions. The Company cannot predict the size of future issuances of Company Shares or the issuance of debt instruments or other securities convertible into Company Shares. Likewise, the Company cannot predict the effect, if any, that future issuances and sales of the Company's securities will have on the market price of the Company Shares. If the Company raises additional funds by issuing additional equity securities, such financing may substantially dilute the interests of existing shareholders. Sales of substantial numbers of Company Shares, or the availability of such Company Shares for sale, could adversely affect prevailing market prices for the Company's securities.

Risk of Litigation

The Company may become involved in disputes with other parties in the future which may result in litigation. The results of litigation cannot be predicted with certainty. If the Company is unable to resolve these disputes favourably, it may have a material adverse impact on the ability of the Company to carry out its business plan.

Reliance on Key Personnel

The Company's development will depend on the efforts of key management and other key personnel. Loss of any of these people, particularly to competitors, could have a material adverse effect on the Company's business. Further, with respect to future development of the Company's projects, it may become necessary to attract both international and local personnel for such development. The marketplace for key skilled personnel is becoming more competitive, which means the cost of hiring, training and retaining such personnel may increase. Factors outside the Company's control, including competition for human capital and the high level of technical expertise and experience required to execute this development, will affect the Company's ability to employ the specific personnel required. Due to the relatively small size of the Company, the failure to retain or attract a sufficient number of key skilled personnel could have a material adverse effect on the Company's business, results of future operations and financial condition. The Company does not intend to take out 'key person' insurance in respect of any directors, officers or other employees.

Leonovus Inc.
For the year ended December 31, 2025

Internal Controls

Internal controls over financial reporting are procedures designed to provide reasonable assurance that transactions are properly authorized, assets are safeguarded against unauthorized or improper use, and transactions are properly recorded and reported. A control system, no matter how well designed and operated, can provide only reasonable, and not absolute, assurance with respect to the reliability of financial reporting and financial statement preparation. The Company has a very limited history of operations and has not made any assessment as to the effectiveness of its internal controls. Though the Company intends to put into place a system of internal controls appropriate for its size, and reflective of its level of operations, there are limited internal controls currently in place.

In contrast to the certificate required for non-venture issuers under National Instrument 52-109 – Certification of Disclosure in Issuers' Annual and Interim Filings ("NI 52-109"), the Company's certifying officers, as a venture issuer, are not required to make representations relating to the establishment and maintenance of disclosure controls and procedures ("DC&P") and internal control over financial reporting ("ICFR"), as defined in NI 52-109. In particular, the certifying officers of the Company will not be required to make any representations that they have:

designed, or caused to be designed, DC&P to provide reasonable assurance that information required to be disclosed by the Company in its annual filings, interim filings or other reports filed or submitted under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and
designed, or caused to be designed, ICFR to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS.

Investors should be aware that inherent limitations on the ability of certifying officers of a venture issuer to design and implement on a cost-effective basis DC&P and ICFR may result in additional risks to the quality, reliability, transparency and timeliness of interim and annual filings and other reports provided under securities legislation.

Conflicts of Interest

Certain of the directors and officers of the Company also serve as directors and/or officers of other companies involved in blockchain technology and consequently there exists the possibility for such directors and officers to be in a position of conflict. Any decision made by any of such directors and officers involving the Company should be made in accordance with their duties and obligations to deal fairly and in good faith with a view to the best interests of the Company and its shareholders. In addition, each of the directors is required to declare and refrain from voting on any matter in which such directors may have a conflict of interest in accordance with the procedures set forth in the OBCA and other applicable laws.

Credit Risk

Credit risk arises from the potential that debtors will fail to satisfy their obligations as they come due. Credit risk with respect to trade and accounts receivable is considered low as the balance is made up of amounts due for grant applications and sales taxes. Credit risk with respect to cash is considered low as it is held by a major Canadian financial institution.

Liquidity Risk

Liquidity risk arises through the excess of financial obligations due over available financial assets at any point in time. The Company's objective in managing liquidity risk will be to maintain sufficient readily available cash reserves and credit in order to meet its liquidity requirements at any point in time. The total cost and planned timing of acquisitions and/or other development or construction projects is not currently determinable and it is not currently known precisely when the Company will require external financing in future periods.

Share Price Fluctuations

In recent years, securities markets have experienced a high level of price and volume volatility. The securities of many companies have experienced wide fluctuations in market prices which have not necessarily been related to the operating performance, underlying asset values or prospects of such companies. Assuming the Company Shares are listed on the TSXV, there can be no assurance that the price of the Company Shares will be unaffected by any such volatility.

Going Concern and Negative Working Capital

The Company has an accumulated deficit as at December 31, 2025 of 57,651,000, with net losses in every reported period. The Company operates with limited cash and is dependent on additional financing to continue operations. There is a material uncertainty regarding the Company's ability to continue as a going concern.

Indebtedness to Directors and Officers.

The Company has outstanding obligations including accrued salaries and director loans.

Leonovus Inc.
For the year ended December 31, 2025

CAPITAL MANAGEMENT

The Company's objective is to maintain sufficient capital base so as to maintain investor, creditor and customer confidence and to sustain future development of the business and provide the ability to continue as a going concern. Management defines capital as the Company's shareholders' equity. The Board of Directors does not establish quantitative return on capital criteria for management; but rather promotes year over year sustainable liquidity. The Company currently has not paid any dividends to its shareholders.

The Company is not subject to any statutory capital requirements and has no commitments, other than its office space lease and options, to sell or otherwise issue common shares.

There were no changes in the Company's approach to capital management during the period.

Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable.

FINANCIAL INSTRUMENTS

The Company's financial instruments and the nature of the risks which they may be subject to are set out in the following table.

	Risks
	Market
	Credit	Liquidity	Foreign Exchange	Interest Rate
Cash	Yes		Yes
Trade receivables	Yes
Trade and other liabilities		Yes	Yes
Loan payable		Yes		Yes
Deferred compensation		Yes	Yes

The Company's activities expose it to a variety of financial risks: credit risk, liquidity risk and market risk (including interest rate and foreign exchange rate risk). The Company's management team carries out risk management with guidance from the Audit Committee under the direction of the Board of Directors. The Board of Directors also provides regular guidance for overall risk management. Management's assessment of the Company's exposure, objectives and processes for managing financial risks, as noted below, has not changed from the prior year, unless otherwise disclosed.

Credit risk

Credit risk is the risk of loss associated with counterparty's inability to fulfill its payment obligations. The Company's credit risk is primarily attributable to cash. The Company's maximum credit risk at December 31, 2025 is $20 (December 31, 2024 - $8). Management does not believe the Company is exposed to significant credit risk.

Cash

Cash consists of bank balances. Credit risk associated with cash is minimized substantially by ensuring that these financial assets are invested in Schedule 1 chartered Canadian Banks.

Liquidity risk

The Company's approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. Management has significantly reduced expenses over the last 18 - 30 months and continues to monitor the Company's expenses carefully. As at December 31, 2025, the Company had cash and trade receivables of $74 (December 31, 2024 - $57) and accounts payable, accrued liabilities and loan payable of $3,143 (December 31, 2024 - $2,314).

The following are the contractual maturities of the undiscounted cash flows of financial liabilities as at December 31, 2025.

The amounts presented in the below maturity analysis represent the undiscounted future cash flows and as a result, they may differ from the net book value.

	Future value	2025	2026	2027 and after
	$	$	$	$
Trade and other liabilities	2,821	2,821	-	-
Deferred compensation	152	152	-	-
Loan payable	170	170	-	-
Total financial liabilities	3,143	3,143	-	-

Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will affect the fair value of a financial instrument or its future cash flows. The Company is currently not subject to market risk.

Leonovus Inc.
For the year ended December 31, 2025

MANAGEMENT'S STATEMENT OF RESPONSIBILITY

The accompanying consolidated financial statements of Leonovus Inc. and all information contained herein are the responsibility of management and have been approved by the Board of Directors. The consolidated financial statements include some amounts that are based on management's best estimates that have been made using careful judgment.

The consolidated financial statements have been prepared by management in accordance with International Financial Reporting Standards. Financial and operating data elsewhere in the report are consistent with the information contained in the financial statements.

Although no cost-effective system of internal controls will prevent or detect all errors and irregularities, these systems are designed to provide reasonable assurance that assets are safeguarded from loss or unauthorized use, transactions are properly recorded, and the financial records are reliable for preparing the consolidated financial statements.

The Board of Directors carries out its responsibility for the financial statements. The Board of Directors meets periodically with management and with the external auditors to discuss the results of audit examinations with respect to the adequacy of internal controls and to review and discuss the consolidated financial statements and financial reporting matters.

Additional information about the Company such as the 2025 audited consolidated financial statements can be found on SEDAR+ at www.sedarplus.ca.

AI assistant

LeoNovus Inc — Management Reports 2026

46421_rns_2026-04-22_01889e3b-924b-4b8a-8060-0ec4cde31546.pdf

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS & RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

BACKGROUND

Technology Background

Fiscal 2017-2018: Galaxa Initiative

Fiscal 2019-2023

Proposed Acquisition of Tradewind Markets Inc.

TPMX Platform Development (2024–Present)

Patent Monetization Initiative (October 2025)

SELECTED FINANCIAL INFORMATION

Results of Operations

General and administrative expenses

Results of Operations – Fourth Quarter of 2025

Cash flows

Liquidity and Capital Resources

Related party transactions

Outstanding share data

Outstanding warrant data

Warrants

Significant management judgments

Recognition of deferred tax assets

Research and development

Investment tax credits

Functional currency

Going concern risk assessment

Contingencies

Management's Conclusion on the design of Internal Controls over Financial Reporting

Management's Conclusion on the effectiveness of Disclosure Controls

CORPORATE GOVERNANCE

RISKS AND UNCERTAINTIES

Blockchain Technology Risk

Anti-Money Laundering and Corrupt Business Practices

Financing Risks

Global Financial Conditions

Insurance and Uninsured Risks

Audit of Tax Filings

Market for the Company Shares

Market Price of Company Shares

Dividend Policy

Acquisitions and Integration

Dilution

Risk of Litigation

Reliance on Key Personnel

CAPITAL MANAGEMENT

FINANCIAL INSTRUMENTS

Credit risk

Cash

Liquidity risk

Market risk

MANAGEMENT'S STATEMENT OF RESPONSIBILITY

More from LeoNovus Inc

LeoNovus Inc Management Reports 2026