Mako Mining — Interim / Quarterly Report 2021

Aug 28, 2020

MANAGEMENT’S DISCUSSION AND ANALYSIS

AS AT AND FOR THE 3-MONTHS ENDED JUNE 30, 2020

DATED: AUGUST 27, 2020

This Management’s Discussion and Analysis ("MD&A") for the three months ended June 30, 2020 provides detailed information on the operating activities, performance and financial position of Boardwalktech Software Corp. ("Boardwalk" or the "Company"). This discussion should be read in conjunction with the Company’s June 30, 2020 unaudited condensed interim consolidated financial statements and March 31, 2020 audited annual consolidated financial statements and accompanying notes. The Company’s consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") and are reported in U.S. dollars, unless otherwise stated. The information contained herein is current to August 27, 2020, unless otherwise stated.

The Company’s fiscal year commences April 1st of each year and ends on March 31st of the following year. The Company’s fiscal year, which will end on March 31, 2021 is referred to as “Fiscal 2021". The previous fiscal year, which ended on March 31, 2020, is referred to as "Fiscal 2020". The three- month quarter ended June 30, 2020 is referred to as “Q1 Fiscal 2021”and the previous three-month quarter ended March 31, 2020 is referred to as “Q4 Fiscal 2020” and the comparative three-month quarter ended June 30, 2019 is referred to as “Q1 Fiscal 2020”.

In this document unless otherwise specified, "we", "us", "our", "Company" and "Boardwalk" all refer to Boardwalktech Software Corp. collectively with its subsidiaries. The content of this MD&A has been approved by the Board of Directors, on the recommendation of its Audit Committee.

CAUTION REGARDING FORWARD LOOKING INFORMATION

Certain statements in this MD&A which are not historical facts constitute forward-looking statements or information within the meaning of applicable securities laws (“forward-looking statements”). Such statements include, but are not limited to, statements regarding Boardwalk’s projected revenues, gross margins, earnings, growth rates, the impact of new product design wins, market penetration and product plans. The use of terms such as “may”, “anticipated”, “expected”, “projected”, “targeting”, “estimate”, “intend” and similar terms are intended to assist in identification of these forward-looking statements. Readers are cautioned not to place undue reliance upon any such forward-looking statements. Such forward-looking statements are not promises or guarantees of future performance and involve both known and unknown risks and uncertainties that may cause Boardwalk’s actual results to be materially different from historical results or from any results expressed or implied by such forward-looking statements. Accordingly, there can be no assurance that forward-looking statements will prove to be accurate and readers are therefore cautioned not to place undue reliance upon any such forward-looking statements.

Factors that could cause results or events to differ materially from current expectations expressed or implied by forward looking statements contained herein include, but are not limited to: our history of losses and the risks associated with not achieving or sustaining profitability; the Company’s dependence on a limited number of customers for a substantial portion of revenues; fluctuating revenue and expense levels arising from changes in customer demand, sales cycles, product mix, average selling prices, manufacturing costs and timing of product introductions; risks associated with competing against larger and more established companies; competitive risks and pressures from further consolidation amongst competitors, customers, and suppliers; market share risks and timing of revenue recognition associated with product transitions; risks related to intellectual property, including third party licensing or patent infringement claims; the loss of any of the Company’s key personnel could seriously harm its business; risks associated with adverse economic conditions; delays in the launch of customer products; price re-negotiations by existing customers; legal proceedings arising from the ordinary course of business; ability to raise needed capital; ongoing liquidity requirements; and other factors discussed in the “Risk Factors” section. All forward-looking statements are qualified in their entirety by this cautionary statement. Boardwalk is providing this information as of the current date and does not undertake any obligation to update any forward-looking statements contained herein as a result of new information, future events or otherwise except as may be required by applicable securities laws.

Management Discussion and Analysis (MDA)

1

Risks relating to the Company include, but are not limited to, the following:

• the Company has a history of losses and may not achieve profitability in the future;

• the Company has historically received a substantial portion of its revenue from a limited number of customers;

• the Company expects its operating results to continue to fluctuate;

• the Company faces intense competition and expects continued market competition in the future;

• assertions by third parties of infringement by Boardwalk of, or of Boardwalk’s failure to protect, their intellectual property rights could result in significant costs and cause Boardwalk’s operating results to suffer;

• the Company may have difficulty accurately predicting revenue for the purpose of appropriately budgeting and adjusting its expenses.

• the loss of customers could affect the Company’s financial returns and future plans;

• the Company’s customers may cancel future subscriptions that can adversely impact future recurring revenue;

• the Company may be unable to generate funds required to meet its funding requirements, and may need to raise additional funds;

• changes in industry standards or technology could impede the sale of Boardwalk’s products;

• the loss of any of the Company’s key personnel could seriously harm its business;

• the pattern of customer product ramps as they shift from legacy products to new products based on our more advanced designs could affect both the amount and timing of revenue recognized by the Company;

• the Company’s failure to maintain compliance with applicable regulations in certain geographies or other jurisdictions may force it to cease distribution in those areas;

• the majority of the Company’s operating expenses are denominated in U.S. dollars and Indian Rupee, therefore, the Company’s earnings are impacted by fluctuations in exchange rates between the U.S. dollar and other currencies; and

the Company may be involved in legal proceedings from time to time; arising in the ordinary course of its business and such proceedings may affect the Company’s financial position, results of operations or cash flows.

Management Discussion and Analysis (MDA)

2

FINANCIAL HIGHLIGHTS

Revenues for Q1 Fiscal 2021 totaled $1.2 million, a 10% increase from $1.1 million of revenue in the Q1 Fiscal 2020. This quarterly year-over-year increase was primarily due to incremental sales from new customers and higher revenue from existing ones. Despite the impact of COVID-19, revenue grew 6% in versus the prior quarter. Approximately 61% of revenue in Q1 Fiscal 2021 came from new and recurring software subscription licenses and service, with the remainder of revenue derived from professional services. As the Company grows, it is expected that the contribution from professional service will continue to grow in absolute dollars over time but decrease as a percentage of total revenue, though levels are expected to fluctuate on a quarter-by-quarter basis as the new projects commence. After an initial drop in the pipeline when the COVID-19 situation first hit in March 2020, when several customers put plans on hold, the aggregate pipeline has now hit a historical high, exceeding $7 million – reflecting the effort of our sales force and the attraction of our real-time digital ledger platform to enterprises struggling with remote work while addressing new structured and unstructured data challenges.

Gross margin for Q1 Fiscal 2021 was 87.0%, essentially flat with Q1 Fiscal 2020’s level of 87.1%, but a rebound from 85.3% in Q4 Fiscal 2020 primarily due to higher sales volume and one-time investment expense in Q4.

IFRS loss for Q1 Fiscal 2021 was $(0.6) million, or a loss of $(0.03) per basic and diluted share, versus a $(1.9) million loss in Q1 Fiscal 2020, or $(0.16) per basic and diluted share, and a $(1.3) million loss in Q4 Fiscal 2020, or $(0.08) per basic and diluted share, Both the 69% year-over-year and 54% sequential improvements were due to higher revenue and continued control of operating expense as the Company shifts resources towards growth and monetizing its sales pipeline, plus lower interest expenses and a $0.1 million non-cash gain de-recognition of the term loan related to the June 30, 2020 term loan amendment. Total adjusted operating expenses (excluding share-based compensation and amortization) in Q1 Fiscal 2021 were $1.4 million, a $0.4 million decrease from $1.7 million in Q1 Fiscal 2020 and $0.1 million lower than Q4 Fiscal 2020.

Adjusted EBITDA for Q1 Fiscal 2021 was a loss of $(0.3) million, a 62% improvement from the $(0.8) loss in Q1 Fiscal 2020 and a 40% improvement from the $(0.5) loss in Q4 Fiscal 2020.

Non-IFRS net loss for Q1 Fiscal 2021 (as defined in the Non-IFRS Financial Measures section) totaled $(0.4) million, or a loss of $0.02 per basic and diluted share, versus a $(1.0) million non-IFRS loss in Q1 Fiscal 2020, or a loss of $(0.09) per basic and diluted share, and versus a $(0.7) million non-IFRS loss in Q4 Fiscal 2020, or a loss of $(0.04) per basic and diluted share. These quarterly year-over-year and sequential changes reflect operating leverage as nonIFRS and adjusted EBITDA losses improved in excess of the quarterly year-over-year change in revenue levels, even when factoring in investments in new experienced sales hires and new marketing programs expected to result in new customers/bookings and higher revenues in future periods.

Management Discussion and Analysis (MDA)

3

SELECTED CONSOLIDATED FINANCIAL INFORMATION

The following table sets forth selected financial information derived from the Company’s unaudited condensed interim consolidated financial statements for the three-month periods ended June 30, 2020 and June 30, 2019. The selected financial information was prepared in accordance with IAS 34 in a manner consistent with the Company’s annual financial statements. The following information should be read in conjunction with these statements and the accompanying notes.

s.
in thousands of U.S. dollars	for Three-month period ended
except per share amounts June 30,		Mar 31,	June 30,
2020		2020	2019
Revenue $1,206 Cost of sales 156 Gross Profit $1,049 SG&A expenses $1,354 Share-based payments 200 Depreciation 66 Operating Income/(Loss) (571) Interest expense $147 Other expenses (128) Loss before taxes $590 Taxes Loss for the period ($590)*		$1,140 167	$1,101 142
		$973	$959
		$1,477 234 66	$1,771 457 66
		(804)	(1,334)
		$171 297	$195 379
		($1,273) (13)	($1,908)
		($1,286)	($1,908)
Loss per share, basic and diluted ($0.03)		($0.08)	($0.16)

• SG&A expenses are comprised of salaries, wages and benefits, general and adminsitrative, consulting, deferred compensation and professional fees

Current assets	2020		2020
Cash	$	597	$	795
Trade and other receivables		1,336		313
Prepaid expenses and deposits		107		103
Total current assets	**$ **	2,040	**$ **	1,211
Total non-current assets		162		225
Total assets	**$ **	2,203	**$ **	1,436
Current liabilities
Account payables and accrued liabilities	$	1,143	$	945
Deferred revenue		1,757		1,382
Deferred compensation		767		767
Current portion of term loan		960		1,546
Current portion of lease liability		181		255
Total current liabilities	**$ **	4,809		4,894
Term Loan		2,570		2,613
Forgivable Loan		700		-
Total Liabilities	**$ **	8,079	$	7,507
Shareholder Equity	$ (5,876)		$ (6,071)
Total Liabilities and Shareholders’ Equity	**$ **	2,203	$	1,436

Management Discussion and Analysis (MDA)

4

ADJUSTED-EBITDA AND NON-IFRS FINANCIAL MEASURES

In addition to disclosing results in accordance with IFRS as issued by the International Accounting Standards Board (“IASB”), the Company also provides supplementary Adjusted-EBITDA and non-IFRS financial measures, disclosed as a supplement to financial results in order to provide a further understanding of Boardwalk’ results of operational performance from management’s perspective. In particular, Boardwalk uses Adjusted-EBITDA and non-IFRS measures to highlight trends in its core business that may not otherwise be readily apparent solely from IFRS measures. Boardwalk management uses Adjusted-EBITDA and non-IFRS measures in order to facilitate operating performance comparisons from period to period, prepare annual operating budgets and assess Boardwalk’s ability to meet its future capital expenditure and working capital requirements. Boardwalk believes that securities analysts, investors and other interested parties frequently use Adjusted-EBITDA and non-IFRS measures in the evaluation of issuers.

Non-IFRS net income (loss) is defined as net income (loss) before share-based payments, depreciation and certain financing costs and non-recurring or one-time items such as: non-cash adjustments for de-recognition term loan and accretion of term loan financing fees. Non-IFRS net income (loss) does not have any standardized meaning prescribed by IFRS and is not necessarily comparable to similar measures presented by other companies. Non-IFRS net income (loss) from operations should not be considered in isolation or as a substitute for income (loss) reported in accordance with IFRS.

Adjusted EBITDA is defined as net income (loss) for the period less interest, taxes, depreciation, other accretion or non-cash valuation impacts, and share-based payments.

Boardwalk has provided a comparison of net income (loss) to non-IFRS net income (loss) and Adjusted EBITDA measures in the following tables:

Non-IFRS Net Income (Loss)

in thousands of U.S. dollars except per share amounts Net Income (Loss) for the period Adjustments: Share-based payments Depreciation, including lease obligations Fiancing costs (Gain) loss on de-recognition of term loan Total Adjustments Non-IFRS Net Income (Loss) Non-IFRS amount per share, basic and diluted:	June 30, Mar 31, June 30, 2020 2020 2019 ($590) ($1,286) ($1,908) 200 234 457 66 66 66 16 365 218 (144) (67) 162 138 597 902 ($452) ($689) ($1,007) ($0.02) ($0.04) ($0.09) for Three-month period ended

Adjusted-EBITDA figures in U.S. dollars, thousands Operating Income (Loss) for the Period Add back (deduct) Depreciation & Amortization Share-based Compensation expenses Adjusted EBITDA	June 30, Mar 31, June 30, 2020 2020 2019 ($571) ($804) ($1,334) 66 66 66 200 234 457 ($304) ($504) ($812) for Three-month period ended	June 30, Mar 31, June 30, 2020 2020 2019 ($571) ($804) ($1,334) 66 66 66 200 234 457 ($304) ($504) ($812) for Three-month period ended	June 30, Mar 31, June 30, 2020 2020 2019 ($571) ($804) ($1,334) 66 66 66 200 234 457 ($304) ($504) ($812) for Three-month period ended
		Mar 31, 2020 ($804) 66 234
			($1,334) 66 457
	($304)	($504)	($812)

Management Discussion and Analysis (MDA)

5

OVERVIEW

Our Company

Boardwalktech Software Corp. (“Boardwalk” or the “Company”) was incorporated pursuant to the Business Corporations Act of British Columbia. The Company operates from locations in the United States and India and provides enterprise software-as-a-service (SaaS) to global customers.

Boardwalk designs and licenses industry leading enterprise software solutions, based upon its unique patented digital ledger technology. The Company has over 50 employees and full-time contractors primarily at its Cupertino, California headquarters and its wholly owned-subsidiary in Mumbai, India. Through its extensive data management/database technology expertise, Boardwalk was first to market in 2005 with a proprietary and patented positional, cell data management technology (aka “digital ledger’) - what we call “transaction chaining”- which addresses the digital transformation issues companies face when working with multiple parties and exchanging information in real-time. The Company’s solutions resolve two enterprise business problems – connecting multiple users in the enterprise value chain to improve planning and results and the alignment of data from various/multiple enterprise systems of record used in planning and information exchange processes. Boardwalk’s unique technology allows multiple users secure simultaneous access to the same data in a relational database environment which supports concurrent access to record objects while being edited. Another key enterprise problem that is solved with Boardwalk’s technology is the chaining of transactions in a database to support provenance and immutable versioning and change management/change history. Concurrent with the Company’s initial go-to-market activities, a patent was filed to protect the IP associated with versioned sharing, consolidating, and reporting enterprise information. Also, in 2014 the Company applied for a patent to protect the IP associated with cell-based data management and this patent was issued in September 2018 which coincides with an existing patent issued July 2005 for managing time-based data at the cell or atomic unit level. Boardwalk’s revenue comes primarily from new and recurring license subscription agreements, maintenance, and service contracts. Boardwalk’s customers include over 20 companies in the Global 1000 / Fortune 500.

On June 11, 2018, Boardwalk began trading on the TSX Venture Exchange under the symbol ‘BWLK’; and on November 13, 2019, Boardwalk began trading on the OTC Markets Group/ OTCQB under the symbol "BWLKF".

Products and Solutions

The Boardwalk Enterprise Digital Ledger Platform is a complete enterprise platform that resolves trust and collaboration issues companies face when working with multiple parties, which enables customers to automate manual business processes and turn them into enterprise “digital” applications using our patented digital ledger data management technology. The Boardwalk Digital Ledger Platform can be used to build and maintain applications with multiple internal or external users working in Excel, a web form, or mobile environment as the user interface. The Company’s software supports a dynamic, cell-based smart contract and machine learning-enabled information exchange that combines Boardwalk’s temporal data management and enterprise integration environment with digital ledger-based trust and validation capabilities. The result is a private permissioned enterprise data management environment that supports time-based multi-party transactions and consensus models for automating previously established manual-based processes and turning them into connected digital applications.

Growth Strategy

Boardwalk’s objective is to be the leading provider of private permissioned digital ledger solutions for global enterprise customers of any size. Elements key to this strategy include:

• expand our network of direct sales people;

• expand our network of reseller sales channels;

• broader adoption of Boardwalk’s solutions by new markets and new customers;

• greater penetration of our existing customer base;

• expand internationally;

• introduction of new features and capabilities specifically focused on digital AI and Machine Learning

• extending our digital ledger technology into an end-to-end operating system solution;

Management Discussion and Analysis (MDA)

6

Sales and Distribution

Boardwalk uses primarily a direct sales model where the Boardwalk Enterprise Digital Ledger Platform creates a unique go-to-market opportunity for the Boardwalk solution. For direct sales, the Company uses regional sales representatives paired with a Sales Development Representative (SDR) who will guide lead development, with sales reps on a standard back-end weighted commission plan while the SDR will have a base salary plus variable compensation. Boardwalk is also starting to grow its reseller partner sales program by recruiting new partners that can build and manage solutions for their clients leveraging Boardwalk and the Boardwalk Enterprise Digital Ledger Platform. Deployment and professional services for direct sales Boardwalk customers will be handled by Boardwalk professional services group while deployment and professional services for reseller partner sales will be mainly handled by the partner.

Boardwalk offers the Boardwalk Enterprise Digital Ledger Platform based on annual subscriptions, with pricing built around multiple digital applications and scale/size of data. Boardwalk engages enterprise clients with an annual subscription for the platform and associated applications and all platform capabilities are included such as:

• Boardwalk Digital Ledger Server;

• Boardwalk Application Design Studio;

• Boardwalk Integration Framework;

• Boardwalk Smart Contract engine;

• Boardwalk APIs; and

• Boardwalk Virtual Machines (Nodes).

Revenue

Boardwalk derives its revenues from two sources: (1) recurring software subscription revenues (SaaS), which are derived from customers accessing the Company’s cloud services, certain hosting services for dedicated servers, and from customers paying for additional services beyond the standard support that is included in the basic subscription fees; and (2) related professional services such as consulting, application development, quality assurance (QA), application delivery, and training. New revenue is defined as newly signed contracts during the reporting period for license subscriptions, while recurring or renewal revenue are revenue streams that have been extended from previous periods.

CURRENT PERIOD OPERATING RESULTS

Revenue

	for Three-month period	for Three-month period	ended
in thousands of U.S. dollars	June 30,	Mar 31,	June 30,
	2020	2020	2019
Software Subscriptions and Service	$739	$732	$682
Professional Services	467	408	419
Total Revenue	$1,206	$1,140	$1,101

Q1 Fiscal 2021 compared to Q1 Fiscal 2020

Revenues for Q1 Fiscal 2021 totaled $1.2 million, a 10% increase from $1.1 million of revenue in Q1 Fiscal 2020. This year-over-year increase was from a return in growth in professional services, up 11%, and continued growth in in license revenue from software subscription and services which grew 8% (an annual rate higher than in the prior quarter).

Management Discussion and Analysis (MDA)

7

Q1 Fiscal 2021 compared to Q4 Fiscal 2020

Despite the impact of COVID-19, revenues for Q1 Fiscal 2021 totaled $1.2 million, a 6% increase from $1.1 million of revenue in Q4 Fiscal 2020. Professional services grew sequentially for the first time in three quarters, while license revenue grew despite a $0.2 million drop in older, legacy supplemental hosting and premium maintenance services (as noted in our prior filings).

Approximately 61% of revenue in Q1 Fiscal 2021 came from new and recurring software subscription licenses and service, with the remainder of revenue derived from professional services. As the Company grows, it is expected that the contribution from professional service will continue to grow in absolute dollars over time but decrease as a percentage of total revenue, though levels are expected to fluctuate on a quarter-by-quarter basis as the new projects commence. As of this report, the Company’s current sales pipeline, of specific customer projects, exceeded $7 million for the first time.

The Company expects revenue growth to increase in future quarters, and years, as the Company’s recent sales force expansion closes deals within that pipeline. The recent financing has been done to help facilitate, support and accelerate those sales efforts. Further, the Company expects new sales and marketing investments, including those around the recently introduced Network of Words (NOW) and Diamond Lane products to take two to three quarters for new software subscription sales (SaaS) to occur and impact financials.

As the Company and its new sales staff continue to engage with new customers and increases its pipeline, we expect Professional Services revenue to increase in absolute terms, but decline as a percentage of overall revenue. Further, the Company believes that a large portion of its Professional Services revenue will be ongoing, and even recurring, as customers partner with Boardwalk’s expertise to find new methods and new applications for utilizing Boardwalk’s unique digital ledger platform.

Revenue Derived from Major Customers

Based on information from our direct and reseller sales, our customers representing greater than 10% of our revenue for the periods are:

	for Three-month period ended
June	30, June 30, June 30,
2020 2020 2019 Customer A 47.4% 41.4% 35.1% Top 5 76.7% 73.8% 68.8% Top 10 88.5% 86.5% 85.5%

Currently, the Company’s quarterly revenues can be impacted by and fluctuate due to the timing and frequency of new and existing customers. While we currently receive a substantial portion of our revenue from a limited number of customers, we expect our customer concentration to continue to decline in the future. To this point, the Company has seen both the number of customers in excess of 10% decline from four customers in Fiscal 2016 to one customer in Fiscal 2019 and 2020.

Gross Margin

Our revenue, cost of sales, and gross margin for the fiscal periods indicated are as follows:

thousands of U.S. dollars Revenue Cost of Sales Gross Margin $ Gross Margin %	June 30, Mar 31, June 30, 2020 2020 2019 $1,206 $1,140 $1,101 156 167 142 $1,049 $973 $959 87.0% 85.3% 87.1% for Three-month period ended

Management Discussion and Analysis (MDA)

8

Q1 Fiscal 2021 compared to Q1 Fiscal 2020

Gross margin for Q1 Fiscal 2021 was 87.0%, essential flat with Q1 Fiscal 2020’s level of 87.1%. as higher revenue levels offset recent investments in new servers at the Company’s third-party hosting provider.

Q1 Fiscal 2021 compared to Q4 Fiscal 2020

Gross margin for Q1 Fiscal 2021 was 87.0%, a 1.7 point increase from the 85.3% level in Q4 Fiscal 2020, primarily due to higher sales volume and the impact of one-time $9,825 server investment expense in Q4.

We expect our gross margins in future quarters to increase relative to levels recognized in Fiscal 2020 as revenue levels grow, but may fluctuate period-to-period due to a variety of factors, including the average prices of our products and services, our product mix, the timing and pass-through of cost reductions to our customers, as well as the timing of signing and entering into development agreements.

Operating Expenses

The following table provides an analysis of the Company’s total operating expenses plus adjusted operating expenses which exclude non-cash share-based compensation expenses, as a percentage of total revenue. The analysis following the table will primarily focus on the adjusted operating expenses for the respective periods.

figures in U.S. dollars, thousands June 30, Mar 31, June 30, 2020 2020 2019 for Three-month period ended	figures in U.S. dollars, thousands June 30, Mar 31, June 30, 2020 2020 2019 for Three-month period ended
Total Operating Expenses Total Adjusted Operating Expenses*	$1,620 $1,777 $2,293 $1,354 $1,477 $1,771

* adjusted Operating Expenses exclude non-cash share-based compensation and amortization

Q1 Fiscal 2021 compared to Q1 Fiscal 2020

Total adjusted operating expenses in Q1 Fiscal 2021 of $1.3 million was $0.4 million lower versus adjusted operating expenses for Q1 Fiscal 2020, due to $0.2 million of lower consultant expenses (as part of the Company’s cost control and resource re-allocations), a lack of travel expenses during the COVID-19 crisis and $0.1 million of lower total compensation expenses.

Q1 Fiscal 2021 compared to Q4 Fiscal 2020

Total adjusted operating expenses in Q1 Fiscal 2021 of $1.3 million was $0.1 million lower versus adjusted operating expenses in Q4 Fiscal 2020, mainly due to a lack of travel expenses and lower professional fees.

The Company plans to selectively expand the size of our sales and marketing organizations through additional expenditures and new hires, in order to support additional customers and close new opportunities in our sales pipeline, as we continue to expand into existing and new markets. Overall, we expect our SG&A expenses to increase in absolute dollars, but longer term to generally decrease as a percentage of revenue, as our investments in SG&A translate into higher sales. We note that there is a lag between the investment in new SG&A costs (such as the hiring of new sales personnel) and the revenue generated from those expenses (via new customer wins), though the timing of that lag may vary by markets.

As a percentage of revenue, research and development costs is expected to fluctuate from one quarter or period to another, but we do not expect any significant changes in R&D spending, nor a requirement to do so in order to meet our revenue and strategic plans in the next 12 months. The Company continues to invest in and develop both new upgrades to our platform and new updates, and thus expects overall R&D spending to increase in absolute dollars but decrease as of percentage of total revenue.

Management Discussion and Analysis (MDA)

9

Other Income (Expense)

The breakdown of other income and expense is as follows:

figures in U.S. dollars, thousands Interest Expense Other Expenses Other Expenses, net	June 30, Mar 31, June 30, 2020 2020 2019 $147 $171 $195 (128) 297 379 $19 $468 $574 for Three-month period ended	June 30, Mar 31, June 30, 2020 2020 2019 $147 $171 $195 (128) 297 379 $19 $468 $574 for Three-month period ended	June 30, Mar 31, June 30, 2020 2020 2019 $147 $171 $195 (128) 297 379 $19 $468 $574 for Three-month period ended
		Mar 31, 2020 $171 297
	$19	$468	$574

Other expenses include the non-cash impact of (gains) losses for the de-recognition of the term loan related to loan amendments and the accretion of term loan financing fees.

Q1 Fiscal 2021 compared to Q1 Fiscal 2020

Other expenses (income) for Q1 Fiscal 2021, were significantly lower than expenses incurred in Q1 Fiscal 2020, due to lower interest payments on the Company’s term loan with SQN Venture Income Fund LLP (“SQN”), $0.2 million lower accretion on the term loan in the current quarter than last year, and a $0.3 million non-cash improvement from the de-recognition of the term loan (a $0.1 million gain in Q1 Fiscal 2021 versus a$0.2 million loss in Q1 Fiscal 2020).

Q1 Fiscal 2021 compared to Q4 Fiscal 2020

Similarly, other expenses (income) for Q1 Fiscal 2021, were significantly lower than expenses incurred in Q4 Fiscal 2020, due to lower interest payments on the term loan, $0.3 million of lower accretion, and a $0.1 million non-cash improvement from the de-recognition of the term loan (a $0.1 million gain in Q1 Fiscal 2021 versus a lower $0.1 million gain in Q4 Fiscal 2020).

With the exception of future monthly interest payments on the Company’s long-term debt, the remaining Other Expenses are considered to be one-time impacts to loss for the period.

LIQUIDITY AND CAPITAL RESOURCES

Historically, the Company has financed its operations primarily through the sale of equity securities, debt, and cash from operating activities.

Cash and cash equivalents

As at June 30, 2020, the Company’s cash and cash equivalents were down $0.2 million to $0.6 million, compared to $0.8 million as at March 31, 2020. The June 30, 2020 ending balance reflected proceeds from the Company’s private placement financing and PPP forgivable loan, plus continued principal reductions of its SQN term loan.

Working capital

Working capital represents the Company’s current assets less its current liabilities. The Company’s working capital balance increased in Q1 Fiscal 2021 by $0.9 million to $(2.8) million as at June 30, 2020 from $(3.7) million at March 31, 2020. The three-month period change is primarily attributed to a $1.0 million increase in receivables from new and renewal licenses invoiced but not collected during the last month; which in turn also contributed to the $0.4 million increase in deferred revenue current liability. The Company also saw a $0.6 million decrease in the current portion of its term loan. Deferred compensation was unchanged. Cash decreased by $0.2 million, though EBTIDA levels continued to improve and are at the lowest levels since the Company went public.

Management Discussion and Analysis (MDA)

10

in thousands of U.S. dollars Current Assets Current Liabilities Working Capital	as at June 30, as at March31, 2020 2020 2,040 $ 1,211 $ 4,809 4,894 (2,769) $ (3,683) $

The Company expects working capital to increase as revenue growth occurs. While the Company plans to keep its targeted collection days in-line with its payment terms, aggregate trade receivables level should increase in absolute dollars as revenue levels grow.

The following table shows our cash flows from operating activities, investing activities and financing activities for the periods indicated.

evenue levels grow. ing table shows our cash flows from operating activities, investing activities and icated.	evenue levels grow. ing table shows our cash flows from operating activities, investing activities and icated.	evenue levels grow. ing table shows our cash flows from operating activities, investing activities and icated.
Cash inflows (outflows) by activity: in thousands of U.S. dollars June 30, Mar 31, June 30, 2020 2020 2019 Operating Activities ($900) ($302) ($989) Investing Activities (3) 0 (3) Financing Activities 705 376 1,129 Net Inflows (outflows) ($197) $74 $137 for Three-month period ended
		705 376 1,129
		($197) $74 $137

Cash Flows Used in Operating Activities

Cash flows applied to operating activities primarily consist of our net loss adjusted for non-cash expenses and for changes in working capital items. Non-cash adjustments generally include depreciation, share-based compensation expense, and fair value adjustments on warrant liabilities. Working capital adjustments generally include changes in accounts receivable, which will increase as revenue increases, deferred revenue, and changes to accounts payable as we purchase more goods and services from suppliers to support such growth.

Q1 Fiscal 2021 compared to Q1 Fiscal 2020

During Q1 Fiscal 2021, net cash usage from operating activities was $(0.9) million, which is a $0.1 improvement in cash burn versus cash usage of $(1.0) million during Q1 Fiscal 2020. As noted previously, Adjusted-EBITDA in the current quarter improved by 62% versus last year. In addition to these operating losses, cash usage for the current quarter also included a $1.0 million increase in trade receivables only partially offset by a $0.4 million reduction in deferred revenue. Cash outflow were also impact by shared-based payments that were $0.2 million lower and trade payables and accrued liabilities that were $0.4 million lower.

Q1 Fiscal 2021 compared to Q4 Fiscal 2020

During Q1 Fiscal 2021, net cash usage from operating activities was $(0.9) million was $0.6 million higher than in Q4 Fiscal 2020, even as Adjusted-EBITDA in Q1 Fiscal 2021 improved by 40% versus Q4 Fiscal 2020. Much of this difference in sequential cash usage came from a $1.0 million increase in trade receivables versus a $0.5 million reduction in the prior quarter. Similarly, deferred revenue only increased $0.4 million in the current quarter versus a $0.4 million decrease in the prior quarter. Deferred compensation was unchanged, as was the impact from sharedbased compensation. Trade payables and accrued liabilities did not have a significant impact in either quarter.

Cash Flows from Investing Activities

Net cash out flows from investing activities resulted from purchases and disposals of property and equipment.

Q1 Fiscal 2021 compared to Q1 Fiscal 2020

During Q1 Fiscal 2021, there was a very small amount of cash used by investing activities due to the purchase of new laptops, which was consistent with the small in Q1 Fiscal 2020.

Management Discussion and Analysis (MDA)

11

Q1 Fiscal 2021 compared to Q4 Fiscal 2020

During Q1 Fiscal 2021, there was a very small amount of cash used by investing activities due to the purchase of new laptops, but these small changes were similar to prior quarters, from the purchase of new computer equipment.

Cash Flows from Financing Activities

Q1 Fiscal 2021 compared to Q1 Fiscal 2020

During Q1 Fiscal 2021, the net cash inflow from financing activities was $0.7 million. Key inflows included $0.6 million from a private placement completed in in June 2020 and $0.7 million in April 2020 from a forgivable loan (granted by the SBA Payroll Protection Program), offset by $0.5 million repayment of principal on the term loan, and $0.1 million of office lease payments. During Q1 Fiscal 2020, net cash flows were $0.9 million (net) from the restructuring the term loan in June 2019, $0.5 million from private placement proceeds, offset by $0.2 million of term loan interest payments and $0.1 million of office lease payments.

Q1 Fiscal 2021 compared to Q4 Fiscal 2020

During Q1 Fiscal 2021, the net cash inflows from financing activities were $0.7 million which was higher than the $0.4 million of net cash inflows from financing activities in Q4 Fiscal 2020. During Q4 Fiscal 2020, the Company received $1.1 million from private placements, made a $0.5 million repayment of principal on the term loan, $0.1 million of term loan interest payments and $0.1 million of office lease payments.

During the past two years since the Company’s reverse takeover transaction in Q1 Fiscal 2019, the Company has reduced the principal amount of debt owing to SQN debt from $7.3 million when it was restructured on June 15, 2018 to $4.5 million as of June 30, 2020. The total reported amount of the SQN term loan liability is $3.5 million, as detailed in Note 7 of the June 30, 2020 unaudited condensed interim consolidated financial statements.

Financing During Q1 Fiscal 2021

As previously disclosed, the Company closed a non-brokered Unit private placement for the placement of 1,768,389 Units, of which 1,629,500 Units were subscribed at CAD 0.50 per Unit and 138,889 Units were subscribed at $0.36 per Unit, for gross proceeds of $646,818. Each Unit is comprised of one common share and one-half of one common share purchase warrant of the Company. Each whole warrant is exercisable at a price of CAD 0.70 per share for a period of 24 months following the closing and will be subject to early redemption by the Company if the trading price of the Company’s common shares is greater than CAD 1.10 for 10 consecutive trading days. The Company paid aggregate finder's fees of CAD 53,533 ($39,374) and issued 107,065 finders’ options (categorized as common share warrants) with a term of two years and an exercise price of CAD 0.50 to compensate finders who introduced purchasers under the private placement and incurred $21,475 of other share issue costs.

On June 30, 2020, the Company executed an Amended and Restated Loan and Security Agreement (the “June 2020 Agreement”) in relation to the term loan. Key amendments in the June 2020 Agreements are as follows:

• An extension of the loan’s maturity to August 1, 2022;

• An extension of the interest-only period to August 31, 2020;

• The Company shall use its best efforts to make a $250,000 principal repayment on or before August 31, 2020 as long as such payment would not result in the Company’s forecasted cash balance to fall below $250,000; and,

• $20,000 shall be added to the final payment fee, increasing it to $319,904.

Liquidity and Cash Resource Requirements

The Company’s unaudited condensed interim consolidated financial statements were prepared on the basis of accounting principles applicable to a going concern, which assumes that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of operations. The unaudited condensed interim consolidated financial statements do not include any adjustments to the amounts and classification of assets and liabilities that would be necessary should the Company be unable to continue as a going concern.

Management Discussion and Analysis (MDA)

12

As at June 30, 2020, the Company has not yet achieved profitable operations, and has an accumulated deficit of $38.8 million. Whether, and when, the Company can attain profitability and positive cash flows from operations have uncertainty, which casts significant doubt upon the Company’s ability to continue as a going concern. The application of the going concern assumption is dependent upon the Company’s ability to generate future profitable operations and obtain necessary financing to do so. While the Company has been successful in obtaining financing to date, there can be no assurance that it will be able to do so in future on terms favourable for the Company. In addition to its operations, the Company may need to raise capital in order to fund its operations. The Company believes it will be able to acquire sufficient funds to cover planned operations through the next twelve-month period from anticipated revenue growth during Fiscal 2021, continued credit access from its primary lender and other sources, plus other potential strategic options. The outcome of these matters cannot be predicted at this time.

Share Capital

apital
	Common	Common	Stock	Restricted
	shares	share warrants	options	share units
Balance, March 31, 2020	19,323,097	5,846,988	828,915	853,333
Issued	1,768,389	921,815	-	-
Balance, June 30, 2020
and the date of this MD&A	21,091,486	6,768,803	828,915	853,333

Off-Balance Sheet Arrangements

During the periods presented, the Company did not have, nor do we currently have, any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Financial Instruments and Risk Management

Boardwalk’s activities expose it to a variety of financial risks. Boardwalk is exposed to credit risk and liquidity risk because of holding certain financial instruments. Boardwalk is not exposed to significant market risk (currency, interest rate, or other) as it does not hold financial instruments that expose Boardwalk to market risk. Boardwalk’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on Boardwalk’s financial performance.

Risk management is carried out by senior management, in particular, the board of directors of Boardwalk.

Fair Value

Boardwalk’s financial instruments consist of cash, trade and other receivables, accounts payables and accrued liabilities, term loan, lease liability and forgivable loan. The carrying amounts of the current financial instrument items approximate their fair value due to their short period to maturity. The carrying amount of long-term financial instrument items approximate their fair value due to market determined interest and discount rates. As at June 30, 2020, the Company measured all of its financial instruments at amortized cost.

Market Risk and Foreign Currency risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprise these types of risk: interest rate risk, currency risk, commodity price risk and other price risk, such as equity risk. Financial instruments affected by market risk include loans and borrowings and deposits.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. However, the Company’s exposure to the risk of changes in market interest rates is minimal given that the Company has no bank debt obligations with floating interest rates.

Management Discussion and Analysis (MDA)

13

Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily for trade receivables) and to a lesser degree from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.

Trade accounts receivable

Customer credit risk is managed through the Company’s established policy, procedures and control relating to customer credit risk management. In order to further reduce charges for doubtful accounts, the Company has recently adopted new policies to insure customer acceptance is explicitly confirmed in writing before an invoice is generated against recognized or deferred revenue.

Financial instruments and cash deposits

Credit risk from balances on deposit with banks and financial institutions is managed in accordance with the Company’s policies. Investments of surplus funds are made only with approved counterparties and within credit limits approved for each of those counterparties. The limits are set to minimize the concentration of risks and therefore mitigate financial loss through potential counterparty failure.

Liquidity risk

The Company’s objective in managing liquidity risk is to maintain sufficient readily available reserves in order to meet its liquidity requirements at any point in time. The Company achieves this by maintaining sufficient cash and cash equivalents, managing cash from operations, and if required through financing activities.

Changes in Internal Control over Financial Reporting

There were no changes in the Company’s internal control over financial reporting that occurred during Q1 Fiscal 2021 that have materially affected, or are likely to materially affect, the Company’s internal control over financial reporting.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of financial statements in accordance with IFRS requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses in the reporting period. We regularly evaluate our estimates and assumptions related to revenue recognition, accounts receivable, share-based transaction expense, and warrant liability. We base our estimates and assumption on current facts, historical experience and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of revenues, costs and expenses that are not readily apparent from other sources. The actual results experienced by us may differ materially and adversely from our estimates. To the extent there are material differences between our estimates and actual results, our future results of operations will be affected. For a description of our critical accounting estimates, please refer to Note 4, Accounting Estimated and Judgments, in our audited consolidated financial statements for the fiscal year ended March 31, 2020.

New standards, interpretations and amendments adopted by the Company

The accounting policies followed in the Company’s unaudited condensed interim consolidated financial statements are consistent with those used to prepare the annual consolidated financial statements for the year ended March 31, 2020. The Company did not adopt any new standards, interpretations or amendments during Q1 Fiscal 2021.

Management Discussion and Analysis (MDA)

14