LeoNovus Inc — Proxy Solicitation & Information Statement 2020

Sep 18, 2020

LEONOVUS INC.

MANAGEMENT INFORMATION CIRCULAR

FOR

SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON OCTOBER 8, 2020

DATED: September 9, 2020

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TABLE OF CONTENTS

Forward Looking Statements .......................................................................................................4 Glossary of Terms ..........................................................................................................................5 Solicitations of Proxies ...................................................................................................................6 Appointment and Revocation of Proxies .....................................................................................6 Advice to Shareholders ..................................................................................................................7 Voting of Shares Represented by Management Proxies ............................................................9 Interest of Certain Persons and Companies in Matters to be Acted Upon ..............................9 Voting Securities and Principal Holders Thereof .......................................................................9 Interest of Informed Persons in Material Transactions ...........................................................10 Special Business – Share Consolidation .....................................................................................10 Management Contracts ...............................................................................................................11 Additional Information ...............................................................................................................11 Approval of Board of Directors ..................................................................................................12 Schedule A – Share Consolidation Special Resolution .............................................................13

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FORWARD-LOOKING STATEMENTS

This Management Information Circular (the “ Circular ”) may contain forward-looking information within the meaning of applicable securities laws (“ forward-looking statements ”). Such forward-looking statements, if and when made, include projections or estimates made by the Corporation and its management as to the Corporation’s future business operations. Forwardlooking statements include all disclosures regarding possible events, conditions or results of operations that are based on assumptions about future economic conditions and courses of action. Forward-looking statements may also include, without limitation, any statement relating to future events, conditions, or circumstances. The Corporation cautions the reader not to place undue reliance upon any such forward-looking statements, which speak only as of the date they are made. Often, but not always, forward-looking statements can be identified by the use of words or phrases such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, or “does not anticipate”, “believes”, and similar expressions or state that certain actions, events or results “may”, “could”, “would”, “might”, or “will” be taken, occur or be achieved, and may be based on management’s current assumptions and expectations related to all aspects of the Corporation’s business, industry and the global economy.

Forward-looking statements relate to, among other things, realizing the value of the Corporation’s assets and executing the Corporation's strategic plan. Forward-looking statements are based on management's current plans, estimates, projections, beliefs and opinions. Readers are cautioned not to place undue reliance on forward-looking information.

If and when forward-looking information is set out in this Circular, the Corporation will also set out the specific material risk factors or assumptions used to develop the forward-looking information. Additional information identifying risks and uncertainties relating to the Corporation’s business are contained under the heading “Risk Factors” in the Corporation’s Filing Statement and its other filings available on-line at www.sedar.com.

Forward-looking information will be updated as required pursuant to National Instrument 51-102 – Continuous Disclosure Obligations (“ NI 51-102 ”) and except as required by applicable laws, the Corporation assumes no obligation to update forward-looking statements should circumstances or management’s estimates or opinions change.

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GLOSSARY OF TERMS

Unless otherwise indicated, whenever used in this Circular, the following words and terms have the indicated meanings or, if not defined herein, have the meanings set out in TSX Venture Exchange (“ Exchange ”) Policy 1.1 – Interpretation . Words importing the singular, where the context requires, include the plural and vice versa and words importing any gender include all genders. All dollar amounts herein are in Canadian dollars, unless otherwise stated.

“ Board ” means the board of directors of the Corporation, as constituted from time to time;

“ Circular ” means this management information circular;

“ Common Shares ” means common shares of the Corporation issued and outstanding as of the date of this Circular;

“ Corporation ” means Leonovus Inc.;

“ Exchange ” means the TSX Venture Exchange Inc.;

“ Meeting ” means the meeting of shareholders of the Corporation contemplated herein to consider, among other things, the matters set forth herein;

“ NEO ” means named executive officer and “ NEOs ” includes the President and Chief Executive Officer, the Chief Financial Officer and the Chief Technology Officer;

“ NI 51-102 ” means National Instrument 51-102 – Continuous Disclosure Obligations ;

“ Notice of Meeting ” means the notice of meeting accompanying this Circular;

“ OBCA ” means the Business Corporations Act (Ontario) , as amended;

“ Shareholders ” mean shareholders of the Corporation; and

“ Transfer Agent ” means TSX Trust Company.

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LEONOVUS INC.

MANAGEMENT INFORMATION CIRCULAR FOR THE

SPECIAL MEETING OF SHAREHOLDERS

to be held on October 8, 2020

SOLICITATION OF PROXIES

This management information circular (the “ Circular ”) is furnished in connection with the solicitation by the management of LEONOVUS INC. (the “ Corporation ”) of proxies to be used at the Corporation's special meeting of the Shareholders of the Corporation to be held on October 8, 2020 at 10:00 a.m. (Ottawa time) at 2611 Queensview Drive, Suite 125, Ottawa, Ontario K2B 8K2 or at any adjournment thereof (the “ Meeting ”). Unless otherwise stated, all information contained in this Circular is presented as at September 9, 2020. The purpose of the Meeting is as set out in the accompanying notice of meeting (the “ Notice of Meeting ”).

In order to: (i) proactively deal with the unprecedented public health impact of coronavirus pandemic (also known as “COVID-19”); (ii) mitigate risks to the health and safety of our communities, shareholders and other stakeholders; and (iii) ensure compliance with local laws or orders restricting the size of public gatherings to ten people in response to COVID-19, the Corporation is requesting shareholders not to attend the Meeting in person.

The solicitation of proxies by this Circular is being made by or on behalf of the management of the Corporation. It is expected that the solicitation will be primarily by mail, but proxies may also be solicited personally or by telephone by directors, officers and regular employees of the Corporation without special compensation. The cost of solicitation will be borne by the Corporation.

APPOINTMENT AND REVOCATION OF PROXIES

The persons named in the enclosed form of proxy are officers or directors of the Corporation. A Shareholder desiring to appoint some other person to attend and act on his or her behalf at the Meeting may do so by inserting the name of such person in the blank space provided in the form of proxy or by completing another proper form of proxy and, in either case, delivering the form not less than 48 hours, Saturdays, Sundays and holidays excepted, prior to the time of the Meeting to the office of TSX Trust Company, 100 Adelaide Street West, Suite 301, Toronto, Ontario M5H 4H1. A person appointed as a proxy need not be a Shareholder of the Corporation.

A Shareholder executing the enclosed form of proxy has the right to revoke it under section 110(4) of the OBCA. A Shareholder who has given a proxy may revoke it (a) by depositing an instrument in writing executed by the Shareholder or by his or her attorney authorized in writing, or, if the Shareholder is a corporation, by an officer or attorney thereof duly authorized indicating the capacity under which such officer or attorney is signing (i) at the offices of the Transfer Agent at any time up to 5 p.m. (Toronto time) on the last business day preceding the day of the Meeting or adjournment thereof or with the Chairman of the Meeting on the day of the

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Meeting or adjournment thereof. A Shareholder may also revoke a proxy in any other manner permitted by law.

ADVICE TO SHAREHOLDERS

The information set forth in this section is of significant importance to many Shareholders of the Corporation, as a substantial number of Shareholders do not hold Common Shares in their own name. Shareholders who do not hold their Common Shares in their own name (referred to in this Circular as “ Beneficial Shareholder s”) should note that only proxies deposited by Shareholders whose names appear on the records of the Corporation as the registered holders of Common Shares can be recognized and acted upon at the Meeting.

Voting in Person at the Meeting

A registered Shareholder whose name has been provided to the Corporation’s registrar and transfer agent, TSX Trust Company, will appear on a list of Shareholders prepared by the registrar and transfer agent for purposes of the Meeting. To vote in person at the Meeting each registered Shareholder will be required to register for the Meeting by identifying themselves at the registration desk. Beneficial Shareholders must appoint themselves as a proxyholder to vote in person at the Meeting. Please also refer to “Beneficial Shareholders” below.

Voting by Proxy at the Meeting

If a registered Shareholder cannot attend the Meeting but wishes to vote on the resolutions, the registered Shareholder should sign, date and deliver the enclosed form of proxy to the Corporation’s registrar and transfer agent, TSX Trust Company, 100 Adelaide Street West, Suite 301, Toronto, Ontario M5H 4H1 so it is received at least 48 hours (excluding Saturdays, Sundays and holidays) before the time of the Meeting or any adjournment thereof. The persons named in the enclosed form of proxy are directors and/or officers of the Corporation. A Shareholder giving a proxy can strike out the names of the nominees printed in the accompanying form of proxy and insert the name of another nominee in the space provided, or the Shareholder may complete another form of proxy. A proxy nominee need not be a Shareholder of the Corporation. A Shareholder giving a proxy has the right to attend the Meeting or appoint someone else to attend as his or her proxy at the Meeting and the proxy submitted earlier can be revoked in the manner described under “Appointment and Revocation of Proxies”.

Beneficial Shareholders

If Common Shares are listed in an account statement provided to the Shareholder by a broker, then in almost all cases those Common Shares will more likely be registered under the name of the Shareholder’s broker or an agent of that broker. In many cases, Common Shares owned by a Beneficial Shareholder are registered either:

(a) in the name of an intermediary that the Beneficial Shareholder deals with, in respect of the Common Shares. Intermediaries include banks, trust companies, securities dealers or brokers, and trustees or administrators of self-administered RRSPs, RRIFs, RESPs and similar plans; or,

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(b) in the name of a depository (such as The Canadian Depository for Securities Limited or “ CDS ”).

Beneficial Shareholders do not appear on the list of Shareholders of the Corporation maintained by the transfer agent.

In accordance with Canadian securities law, the Corporation has distributed copies of the Notice of Meeting, this Circular and the form of proxy (collectively, the “ meeting materials ”) to CDS and intermediaries for onward distribution to Beneficial Shareholders.

Intermediaries are required to forward meeting materials to Beneficial Shareholders unless a Beneficial Shareholder has waived the right to receive them. Typically, intermediaries will use a service company to forward the meeting materials to Beneficial Shareholders. Beneficial Shareholders will receive either a voting instruction form or, less frequently, a form of proxy. The purpose of these forms is to permit Beneficial Shareholders to direct the voting of the Common Shares they beneficially own. Beneficial Shareholders should follow the procedures set out below, depending on which type of form they receive.

A. Voting Instruction Form. In most cases, a Beneficial Shareholder will receive, as part of the meeting materials, a voting instruction form. If the Beneficial Shareholder does not wish to attend and vote at the Meeting in person (or have another person attend and vote on the holder’s behalf), the voting instruction form must be completed, signed and returned in accordance with the directions on the form. If a Beneficial Shareholder wishes to attend and vote at the Meeting in person (or have another person attend and vote on the Holder’s behalf), the Beneficial Shareholder must complete, sign and return the voting instruction form in accordance with the directions provided and a form of proxy giving the right to attend and vote will be forwarded to the Beneficial Shareholder.

Or,

B. Form of Proxy. Less frequently, a Beneficial Shareholder will receive, as part of the meeting materials, a form of proxy that has already been signed by the intermediary (typically by a facsimile, stamped signature) which is restricted as to the number of shares beneficially owned by the Beneficial Shareholder but which is otherwise uncompleted. If the Beneficial Shareholder does not wish to attend and vote at the Meeting in person (or have another person attend and vote on the holder’s behalf), the Beneficial Shareholder must complete the form of proxy and deposit it with the Corporation's registrar and transfer agent, TSX Trust Company, 100 Adelaide Street West, Suite 301, Toronto, Ontario M5H 4H1, as described above. If a Beneficial Shareholder wishes to attend and vote at the Meeting in person (or have another person attend and vote on the holder’s behalf), the Beneficial Shareholder must strike out the names of the persons named in the proxy and insert the Beneficial Shareholder’s (or such other person’s) name in the blank space provided.

Non-Objecting Beneficial Owners

If you are a non-registered Shareholder and the Corporation or its agent has sent these materials directly to you, your name and address and information about your holdings of securities have been obtained in accordance with applicable securities regulatory requirements from the

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intermediary holding Common Shares on your behalf. By choosing to send these materials to you directly, the Corporation (and not the intermediary holding Common Shares on your behalf) has assumed responsibility for (i) delivering these materials to you, and (ii) executing your proper voting instructions. Please return your voting instructions as specified in the request for voting instructions or form of proxy delivered to you.

VOTING OF SHARES REPRESENTED BY MANAGEMENT PROXIES

The persons named in the enclosed form of proxy will vote the Common Shares in respect of which they are appointed proxy on any ballot that may be called for in accordance with the instructions on the proxy. In the absence of such instructions, such Common Shares will be voted IN FAVOUR of the special resolution referred to in the proxy.

The form of proxy accompanying this Circular confers discretionary authority upon the persons named in the proxy with respect to amendments to or variations of matters identified in the Notice of Meeting and with respect to other matters, if any, which may properly come before the Meeting. At the date of this Circular, the management of the Corporation knows of no such amendments, variations, or other matters to come before the Meeting. However, if any other matters, which are not known to management, should properly come before the Meeting, the proxy will be voted on such matters in accordance with the best judgment of the named proxy.

INTEREST OF CERTAIN PERSONS AND COMPANIES IN MATTERS TO BE ACTED UPON

Management is not aware of any material interest in any matter to be acted upon at the Meeting, direct or indirect, by beneficial ownership or otherwise, of any director or senior officer of the Corporation who has held that position at any time since the beginning of the Corporation’s last financial year and each associate or affiliate of any of the foregoing.

VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF

The authorized share capital of the Corporation consists of an unlimited number of Common Shares without par or nominal value. As of the date of this Circular, there are 285,446,639 Common Shares issued and outstanding. Each holder of record of a Common Share on September 8, 2020 , the record date established for notice of the Meeting, will, unless otherwise specified in this Circular, be entitled to one vote for each Common Share held by such holder on all matters coming before the Meeting, except to the extent that such holder has transferred any such Common Shares after the record date and the transferee of such Common Shares establishes ownership of such Common Shares and makes a written demand, not later than ten days before the Meeting, to be included in the list of Shareholders entitled to vote at the Meeting, in which case the transferee will be entitled to vote such Common Shares at the Meeting.

To the knowledge of the directors and officers of the Corporation, there are no persons who, as of the date hereof, beneficially own, directly or indirectly, or exercise control or direction over

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Common Shares of the Corporation carrying more than 10% of the voting rights attached to all Common Shares of the Corporation

INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS

Management is not aware of any material interest in any matter to be acted upon at the Meeting, or any transaction since the commencement of the financial year end December 31, 2019, direct or indirect, of any director or officer of the Corporation or of any person beneficially owning, directly or indirectly, more than ten percent (10%) of the Corporation’s voting securities or any associate or affiliate thereof, that has materially affected or would materially affect the Corporation or any of its subsidiaries, other than as disclosed elsewhere in this Circular.

SPECIAL BUSINESS – SHARE CONSOLIDATION

At the Meeting, Shareholders will be asked to consider, and if deemed appropriate, pass a special resolution (the “ Share Consolidation Special Resolution ”), the full text of which resolution is set out in Schedule “A” to this Circular, approving an amendment to the Corporation’s articles to consolidate the issued and outstanding common shares of the Corporation on the basis of one (1) post-consolidation common share for every thirty (30) pre-consolidation common shares outstanding (the “ Consolidation ”) .

No fractional common shares of the Corporation will be issued if, as a result of the Consolidation, a registered shareholder would otherwise be entitled to a fractional share. Instead, the Corporation will round any fractional shares resulting from the Consolidation in the following manner: a registered shareholders holding 0.50 or more fractional shares will be rounded up to the nearest whole share, and a registered shareholder holding 0.49 or less fractional shares will be rounded down to the nearest whole share.

The Consolidation will affect all Shareholders uniformly and will not affect any Shareholders’ percentage interest in the Corporation, except to the extent that the Consolidation would otherwise result in a Shareholder owning a fractional share. In addition, the Consolidation will not affect any Shareholder’s proportionate voting rights, subject to the treatment of fractional shares described above.

Under the OBCA, the proposal to proceed with a consolidation of share capital must be approved by special resolution which requires that the resolution be passed by not less than two-third (2/3) of the votes cast by shareholders represented in person or by proxy at the Meeting.

The implementation of the Share Consolidation Special Resolution is conditional upon the Corporation obtaining the necessary regulatory consents.

The terms of the Corporation’s stock options, warrants and convertible securities that are outstanding prior to the implementation of the Consolidation will be adjusted to their terms on the basis of one (1) for thirty (30) ratio under the Consolidation (ie; the number of common shares issuable will decrease and the exercise price or conversion price, as applicable, will increase proportionately).

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If the Share Consolidation Special Resolution is passed by the requisite number of Shareholders at the Meeting and receives the necessary regulatory approvals, upon the filing of the articles of amendment to implement the Consolidation, the common shares will be consolidated into new common shares as described in this Circular. In accordance with the rules of the Exchange, replacement share certificates will be issued.

If the Consolidation is approved by the Shareholders and implemented by the board of directors, the registered holders of common shares will be required to exchange the share certificates representing their pre-consolidation common shares for new share certificates representing the post-consolidation common shares to which they are entitled. As soon as practicable after the Consolidation has been affected, the Corporation’s Transfer Agent will be instructed to send a letter of transmittal to holders of common shares for use in delivering their pre-consolidation share certificates to the Transfer Agent. Tendered certificates will be exchanged for new certificates representing the appropriate number of common shares to which a Shareholder is entitled following the Consolidation.

Shareholders should not destroy any share certificates and should not submit any share certificates until such time, if any, that the Consolidation is completed and they receive a letter of transmittal from the Transfer Agent.

It is the intention of the persons named in the enclosed form of proxy, if not expressly directed otherwise in such form of proxy, to vote such proxies FOR the Share Consolidation Special Resolution

MANAGEMENT CONTRACTS

The business of the Corporation is managed by its directors and officers and the Corporation has no management agreements with persons who are not officers or directors of the Corporation.

ADDITIONAL INFORMATION

Additional information relating to the Corporation is filed on SEDAR from time to time and may be viewed at www.sedar.com .

Financial information is provided in the Corporation’s comparative annual statements and management’s discussion and analysis (“ MD&A ”) for the Corporation’s most recently completed financial year, which are filed on SEDAR. Shareholders may also request copies of this Circular and the Corporation’s financial statements and MD&A by writing to the Corporation at:

LEONOVUS INC.

2611 Queensview Drive, Suite 125 Ottawa, Ontario K2B 8K2 Tel: (613) 319-5117

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APPROVAL OF BOARD OF DIRECTORS

The contents of this Circular have been approved by the directors and a copy has been sent to each director of the Corporation, to the auditor of the Corporation and to each Shareholder entitled to notice of the Meeting.

DATED September 9, 2020

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Chairman of the Board

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SCHEDULE “A” SHARE CONSOLIDATION SPECIAL RESOLUTION

RESOLUTION OF THE SHAREHOLDERS OF LEONOVUS INC.

(the “Corporation”)

RESOLVED AS A SPECIAL RESOLUTION THAT :

1. the Corporation is hereby authorized to amend its articles to consolidate its common shares on the basis of one (1) common share for every thirty (30) common shares issued and outstanding immediately prior to the effective date of the consolidation;

2. if the consolidation would otherwise result in the issuance of a fractional share, no fractional share will be issued but rather the number of shares registered in the name of the shareholder shall be rounded up to the nearest whole share for registered shareholders holding 0.50 or more fractional shares and shall be rounded down to the nearest whole share for any registered shareholder holding 0.49 or less fractional shares without any payment or other compensation being made to any shareholder in respect thereof;

3. any officer or director of the Corporation is authorized and directed on behalf of the Corporation to deliver articles of amendment under the Business Corporations Act (Ontario) and to execute all documents and to take any action which, in the opinion of that person, is necessary or desirable to give effect to this special resolution;

4. notwithstanding the foregoing, the directors are hereby authorized in their sole discretion to revoke this special resolution without further approval of the shareholders at any time prior to the endorsement by the Director under the Business Corporations Act (Ontario) of a certificate of amendment in respect of the amendment in respect of the consolidation; and

5. any officer or director of the Corporation is hereby authorized and directed for and in the name of and on behalf of the Corporation to execute, or cause to be executed and to deliver or cause to be delivered all such certificates, instruments, agreements, notices and other documents, and to do or cause to be done all such other acts and things as such director of officer determines to be necessary or desirable in connection with the foregoing, such determination to be conclusively evidenced by the execution and delivery of such document, agreement or instrument or the doing of any such act or thing.

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