Medivolve Inc. — Audit Report / Information 2020

Apr 1, 2021

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(formerly QuestCap Inc.)

CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2020 and 2019

(in Canadian dollars)

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Independent Auditor’s Report

To the Shareholders of MediVolve Inc.

Opinion

We have audited the consolidated financial statements of MediVolve Inc. and its subsidiary (the “Company”), which comprise the consolidated statements of financial position as at December 31, 2020 and 2019, and the consolidated statements of operations and comprehensive loss, consolidated statements of cash flows and consolidated statements of changes in equity (deficiency) for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

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

Basis for opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the consolidated financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada. We have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material uncertainty related to going concern

We draw attention to Note 1 in the consolidated financial statements, which indicates that the Company incurred a net loss during the year ended December 31, 2020 and, as of that date, the Company’s current liabilities exceeded its current assets. In addition, a significant loan was in default as at December 31, 2020. As stated in Note 1, these events or conditions, along with other matters as set forth in Note 1, indicate that material uncertainties exist that cast significant doubt on the Company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Other information

Management is responsible for the other information. The other information comprises Management’s Discussion and Analysis.

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

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In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

We obtained Management’s Discussion and Analysis prior to the date of this auditor’s report. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of management and those charged with governance for the consolidated financial statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company’s financial reporting process.

Auditor’s responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risks of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

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

The engagement partner of the audit resulting in this independent auditor’s report is Chris Milios.

McGovern Hurley LLP

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Chartered Professional Accountants Licensed Public Accountants

Toronto, Ontario March 31, 2021

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Medivolve Inc. (formerly QuestCap Inc.)

Consolidated Statements of Financial Position

(Expressed in Canadian dollars) As at

Consolidated Statements of Financial Position (Expressed in Canadian dollars) As at
Note	December 31, 2020 December 31, 2019
ASSETS Current assets Cash Inventory	$ 851,409 $ 976 232,786 -
Public investments at fair value through profit and loss 6 Amounts receivable 4,18 Note and loans receivable 3 Prepaid expenses and advances 5	403,563 386,036 2,312,728 313,695 548,605 1,001,930
	330,682 217,837
Total current assets Private investments at fair value through profit and loss 6 Royalty interest 7 Property and equipment 8 Right-of-use assets 13 Intangibles 9	4,679,773 1,920,474 3,162,369 380,000 500,000 - 668,778 - 7,877,826 - 2,242,500 -
TOTAL ASSETS	$ 19,131,246 $2,300,474
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY) Current liabilities Accounts payable and accrued liabilities 11,18 Loans payable 12,18 Lease liabilities 13 Other liabilities 6,7
	$ 6,674,882 315,996 $
	13,434,363 - 6,775,229 - 2,260,774 -
Total liabilities	$ 29,145,248 315,996 $
Shareholders' Equity Share capital 14 Share-based payment reserve 15 Accmulatedother comprehensive income Deficit	$ 41,269,852 18,922,990 $ 3,699,378 400,214
	105,580 -
	(55,088,812) (17,338,726)
Total shareholders' equity (deficiency)	(10,014,002) $ 1,984,478 $
TOTAL LIABILITIES ANDSHAREHOLDERS' EQUITY(DEFICIENCY)	$ 19,131,246 $2,300,474
Nature of operations and going concern 1 Commitments and contingencies 6,12,19 Subsequent events 12,22
Approved on behalf of the Directors: "Douglas Sommerville" Director	"Daniyal Baizak" Director

(The accompanying notes are an integral part of these consolidated financial statements)

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Medivolve Inc. (formerly QuestCap Inc.)

Consolidated Statements of Operations and Comprehensive (Loss)

(Expressed in Canadian dollars)

(Expressed in Canadian dollars)
		For the years ended
		December 31,
	Note	2020	2019
Revenue		$ 10,583,256	$		-
Cost of sales		(5,976,818)			-
Gross profit		$ 4,606,438	$		-
Management and consulting fees	18	$ 3,197,872	$	1,045,861
Share-based payments	15,18	2,107,109			156,900
General office and administration expenses		746,285			193,163
Legal and professional		1,110,066			124,518
Marketing and promotion		1,446,161			22,703
Travel		890,042			665,199
Shareholder communications and filing fees		359,138			66,017
Other expenses	14	125,000			-
Exploration and evaluation expenses		-			150,000
Foreign exchange(gain)loss		(300,618)			94,515
		$ 9,681,055	$	2,518,876
Loss before other items		(5,074,617)		(2,518,876)
Depreciation - property and equipment	8	(13,878)			-
Depreciation - intangible	9	(97,500)			-
Depreciation of right-of-use assets	13	(3,063,495)			-
Interest income		60,635			52,737
Interest expense		(86,946)			-
Interest expense on leases	13	1,480			-
Realized loss on investment	6	-		(152,106)
Unrealized loss on investment and loan receivable	3,6	(9,107,503)			-
Financing costs	12	(4,598,300)			-
Impairments	4,5,6,14	(15,797,532)			-
Loss on disposition of exploration and evaluationproperty	10	-		(100,000)
Net loss for theyear		$ (37,777,656)	$	(2,718,245)
Other comprehensive loss
Foreign currencytranslationgain		105,580			-
Net loss and other comprehensive loss for theyear		$ (37,672,076)	$	(2,718,245)
Loss per share
Basic and diluted		$ (0.38)	$		(0.08)
Weighted average number of shares outstanding:
Basic and diluted		100,096,377		34,190,109

(The accompanying notes are an integral part of these consolidated financial statements)

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Medivolve Inc. (formerly QuestCap Inc.)

Consolidated Statements of Cash Flows

(Expressed in Canadian dollars)

Medivolve Inc. (formerly QuestCap Inc.) Consolidated Statements of Cash Flows (Expressed in Canadian dollars)
		For the years ended December			31,
	Note	2020		2019
Cash (used in) provided by operations:
Loss for the year		$ (37,777,656)	$	(2,718,245)
Items not involving cash:
Share-based payments	15	2,107,109		156,900
Depreciation	8,13	3,174,873			-
Loss on disposition of exploration and evaluation property	10	-		100,000
Write down of investments	6,7	5,640,615			-
Interest, financing and accretion expenses	12	1,893,766			-
Shares issued for debt arrangement	14	2,790,000			-
Other expenses	14	125,000			-
Realized loss on investments		-		152,106
Unrealized gain on investments and loan receivable	3,6	9,107,503			-
Unrealized foregin exchange		(249,503)			-
Interest earned		(59,815)			-
		(13,248,108)		(2,309,239)
Adjustments for change in working capital:
Inventory		(104,024)			-
Receivables		(3,287,493)		(275,321)
Prepaid expenses and advances		(508,743)		(154,924)
Accountspayable and accrued liabilities		6,170,033		280,793
Net cash(used in) operating activities		$ (10,978,335)	$	(2,458,691)
Investing activities
Loans and interest repaid	3	1,026,829			-
Loans provided	3	(539,874)		(1,001,930)
Purchase of investments and royalties	6,7	(3,159,507)		(918,142)
Disposal of investments	6	300,000			-
Return of capital on investment	6	380,000			-
Purchase of property and equipment	8	(414,027)			-
Cash received from acquisition of subsidiary	9	43,098			-
Leasepayments	13	(3,123,418)			-
Net cash(used in) investing activities		$(5,486,900)	$	(1,920,072)
Financing activities
Proceeds from private placements	14	4,900,000			-
Share and warrants issue costs	1415	(211,070)			-
Proceeds from option exercised	14	45,000			-
Proceeds from loans	12	14,589,738			-
Loan and interest repaid	12	(2,008,000)			-
Net cashprovided by financing activities		$ 17,315,668		$	-
Change in cash		850,433		(4,378,763)
Cash beginningofyear		976		4,379,739
Cash, end ofyear		$ 851,409	$		976
Supplemental information:
Common shares issued for acquisitions	6,9	$ 16,075,000	$		-
Common shares issued for debt and debt settlement	12,14	$ 2,915,000	$		-

(The accompanying notes are an integral part of these consolidated financial statements)

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Medivolve Inc. (formerly QuestCap Inc.)

Consolidated Statements of Changes in Equity (Deficiency)

(Expressed in Canadian dollars)

Medivolve Inc. (formerly QuestCap Inc.) Consolidated Statements of Changes in Equity (Deficiency) (Expressed in Canadian dollars)
Note Number of Shares Share Capital	Options Warrants Total Deficit Accumulated other comprehensive income Total Share-basedpayments Reserve
Balance, December 31, 2018 34,190,109 $ 18,922,990	$ 520,999 $ - $ 520,999 $ (14,898,166) $ - $ 4,545,823
Expiry of options 15 - - Stock options granted 15 - - Net loss and comphrensive loss for theyear - -	(277,685) - (277,685) 277,685 - - 156,900 - 156,900 - - 156,900 - - - (2,718,245) -(2,718,245)
Balance, December 31, 2019 34,190,109 $ 18,922,990	$ 400,214 $ - $ 400,214 $(17,338,726) $ - $ 1,984,478
Balance, December 31, 2019 34,190,109 $ 18,922,990 Shares issued through private placement 14 20,000,000 2,000,000 Shares issued for acquisitions 6,9,14 73,000,000 15,817,557 Shares issued for debt arrangement 14 7,250,000 2,915,000 Units issued through private placement 14 15,000,000 3,000,000 Warrants issued 15 - (1,227,889) Broker warrants issued 15 - (184,310) Share and warrant issued costs 14,15 - (53,066) Stock options granted and vested 15 - - Exercise of stock options 15 350,000 45,000 Value of stock options exercised 15 - 34,570 Expiry of stock options 15 - - Net loss and comphrensive loss for the year - -	$ 400,214 $ - $ 400,214 $ (17,338,726) $ - $ 1,984,478
	- - - - - 2,000,000
	- - - - - 15,817,557
	- - - - - 2,915,000
	- - - - - 3,000,000
	- 1,227,889 1,227,889 - - -
	- 184,310 184,310 - - -
	- (158,004) (158,004) - - (211,070)
	2,107,109 - 2,107,109 - - 2,107,109 - - - - - 45,000 (34,570) - (34,570) - - - (27,570) - (27,570) 27,570 - - - - - (37,777,656) 105,580 (37,672,076)
Balance, December 31, 2020 149,790,109 $ 41,269,852	$ 2,445,183 $ 1,254,195 $ 3,699,378 $(55,088,812) $ 105,580 $(10,014,002)

(The accompanying notes are an integral part of these consolidated financial statements)

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Medivolve Inc. (formerly QuestCap Inc.) Notes to the Consolidated Financial Statements For the year ended December 31, 2020 and 2019 (Expressed in Canadian dollars)

1. Nature of operations and going concern

Medivolve Inc. (“MediVolve” or the “Company”) operates under the Canada Business Corporations Act . The Company completed a change of business to become an investment issuer under the rules of the Canadian Securities Exchange (“CSE”) on September 4, 2019. The Company changed of its name from “Copper One Inc.” to “QuestCap Inc.”, following approval by the Company’s shareholders on September 25, 2019. The Company was uplisting to the NEO Exchange (“NEO”) effective October 15, 2020, concurrent with the transitioning to a single purpose company from an investment issuer, redeploying its assets and resources to be a single purpose medical company. On December 29, 2020, the Company announced the change of its name from “QuestCap Inc.” to “Medivolve Inc.” with its shares traded under new ticker “MEDV” on the NEO commencing January 7, 2021.

These consolidated financial statements were prepared on a going concern basis of presentation, which contemplates the realization of assets and settlement of liabilities as they become due in the normal course of operations for the next fiscal year. The Company has an accumulated deficit of $54,983,232 and a negative working capital of $24,465,475 as at December 31, 2020,has incurred a net loss and comprehensive loss totaling $37,672,076 during the year ended December 31, 2020 and has a loan in default totaling $10,520,477 (note 12). The Company’s current source of operating cash flow is dependent on its operations and its ability to raise equity and or debt financing to cover any operating shortfalls. There can be no assurances that sufficient funding, including adequate financing, will be available to cover the general and administrative expenses necessary for the maintenance of a public company. The Company’s status as a going concern is contingent upon raising the necessary funds through the sale of investments and issuance of equity or debt. Management believes expects to raise additional funds when required and available. There can be no assurance that funds will be available to the Company under acceptable terms or at all. These Conditions indicate the existence of a material uncertainty that casts significant doubt on the ability of the Company to continue as a going concern.

While the Company’s operation have recently been focussed on generating income from the sale of Covid-19 testing equipment, the Company’s operations could be significantly adversely affected by the effects of a widespread global outbreak of a contagious disease, including the recent outbreak of respiratory illness caused by COVID-19. The Company cannot accurately predict the impact COVID-19 will have on its operations and the ability of others to meet their obligations with the Company, including uncertainties relating to the ultimate geographic spread of the virus, the severity of the disease, the duration of the outbreak, and the length of travel and quarantine restrictions imposed by governments of affected countries. In addition, a significant outbreak of contagious diseases in the human population could result in a widespread health crisis that could adversely affect the economies and financial markets of many countries, resulting in an economic downturn that could further affect the Company’s operations and ability to finance its operations.

The consolidated financial statements of the Company for the years ended December 31, 2020 and 2019 were reviewed, approved and authorized for issue by the Board of Directors on March 31, 2021. The head office and principal address of the Company is at Suite 900, 65 Queen Street West, Toronto, Ontario M5H 2M5.

2. Significant accounting policies

Transition to a single purpose medical company

On October 15, 2020, the Company completed its transition to a single purpose medical company, resulting in the Company determining that it no longer meets the criteria for being an investment entity (“Investment Entity Accounting”) under IFRS 10, Consolidated Financial Statements (“IFRS 10”). The exact timing of the transition from an investment entity to a medical company is highly judgmental and the Company concluded that this transition occurred on October 15, 2020, concurrent to its listing on the NEO Exchange. As a result, effective October 15, 2020 (the “Transition Date”), the Company was required to apply the acquisition method of accounting as per IFRS 3, Business Combinations (“IFRS 3”), to its subsidiary that was previously measured at fair value through profit or loss (“FVTPL”) (Note 9). These financial reporting changes are material to the Company and have been applied on a prospective basis in accordance with relevant guidance of IFRS 10 and, as such, the activity prior to the Transition Date reflects Investment Entity Accounting.

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Medivolve Inc. (formerly QuestCap Inc.) Notes to the Consolidated Financial Statements For the year ended December 31, 2020 and 2019 (Expressed in Canadian dollars)

2. Significant accounting policies (continued)

Basis of preparation

The consolidated financial statements of the Company have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”), and interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”). The policies as set out below were consistently applied to all of the periods presented unless otherwise noted.

These consolidated financial statements have been prepared using the historical cost convention except for certain financial instruments, which have been measured at fair value. All monetary references expressed in these notes are references to Canadian dollar amounts. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting, except for cash flow information.

Basis of consolidation

Subsidiaries consist of entities over which the Company is exposed to, or has rights to, variable returns as well as the ability to affect these returns through the power to direct the relevant activities of the entity. To the extent that subsidiaries provide services that relate to the Company’s investment activities, they are fully consolidated from the date control is transferred to the Company and are deconsolidated from the date control ceases. The consolidated financial statements include all the assets, liabilities, revenues, expenses and cash flows of the Company and its subsidiary after eliminating inter-entity balances and transactions. All other investments in subsidiaries are not consolidated but are measured at fair value through profit or loss in accordance with IFRS 9.

These consolidated financial statements of fiscal 2020 comprise the financial statements of the Company and its wholly owned subsidiary Collection Sites LLP, acquired in 2020, a COVID 19 testing centre incorporated in the State of Nevada. All material intercompany transactions and balances between the Company and its subsidiary have been eliminated on consolidation. Intercompany balances and any unrealized gains and losses or income and expenses arising from intercompany transactions are eliminated in preparing the consolidated financial statements.

Concurrent with the consolidation, the Company’s investments in public and private companies are measured at FVTPL in accordance with IFRS 9, Financial Instruments (“IFRS 9”) (Note 6).

Significant accounting judgments, estimates and assumptions

The preparation of these consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Such estimates and assumptions are continuously evaluated and are based on management’s experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Actual outcomes can differ from these estimates. The impacts of such estimates are pervasive throughout the consolidated financial statements and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised, and the revision affects both current and future periods.

Information about critical judgments and estimates in applying accounting policies that have the most significant effect on the amounts recognized in the consolidated financial statements are as follows:

 Fair value of investments not quoted in an active market or private company investments Where the fair values of financial assets and financial liabilities recorded on the statement of financial position cannot be derived from active markets, they are determined using a variety of valuation techniques. The inputs to these models are derived from observable market data where possible, but where observable market data are not available, judgment is required to establish fair values. Refer to Notes 6 and 17 for further details.

 Fair value of financial derivatives

Investments in options and warrants which are not traded on a recognized securities exchange do not have a readily available market value. When there are sufficient and reliable observable market inputs, a valuation technique is used; if no such market inputs are available, the warrants and options are observed at intrinsic value. Refer to Notes 6 and 17 for further details.

9

Medivolve Inc. (formerly QuestCap Inc.) Notes to the Consolidated Financial Statements For the year ended December 31, 2020 and 2019 (Expressed in Canadian dollars)

2. Significant accounting policies (continued)

Significant accounting judgments, estimates and assumptions (continued)

 Valuation of Property Plant and Equipment Significant judgment is involved in the determination of useful life for the computation of depreciation of property and equipment and amortization of intangible assets. No assurance can be given that actual useful lives will not differ significantly from current assumptions.

 Share-based payments

The Company uses the Black-Scholes option pricing model to fair value options in order to calculate share-based compensation expense. The Black-Scholes model involves six key inputs to determine the fair value of an option: risk-free interest rate, exercise price, market price of the Company’s shares at date of issue, expected dividend yield, expected life, and expected volatility. Certain inputs are estimates which involve considerable judgment and are, or could be, affected by factors that are out of the Company’s control. Refer to Note 15 for further details.

 Investment entity

Management has determined that the Company qualifies for the exemption from consolidation given that the Company has the following typical characteristics of an investment entity:

• a) obtains funds from one or more investors for the purpose of providing those investor(s) with investment management services;

• b) commits to its investor(s) that its business purpose is to invest funds solely for returns from capital appreciation, investment income, or both; and

• c) measures and evaluates the performance of substantially all of its investments on a fair value basis.

 Recognition of deferred taxes Deferred tax assets are recognized in respect of tax losses and other temporary differences to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and level of future taxable profits, together with future tax planning strategies. Refer to Note 20 for further details.

 Income, value added, withholding and other taxes The Company is subject to income, value added, withholding and other taxes. Significant judgment is required in determining the Company’s provisions for taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Company recognizes liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. The determination of the Company’s income, value added, withholding and other tax liabilities requires interpretation of complex laws and regulations. The Company’s interpretation of taxation law as applied to transactions and activities may not coincide with the interpretation of the tax authorities. All tax-related filings are subject to government audit and potential reassessment subsequent to the financial statement reporting period. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the tax-related accruals and deferred income tax provisions in the period in which such determination is made.

 Goodwill and intangibles

Goodwill and other indefinite life intangible assets are tested for impairment annually or more frequently if there is an indication of impairment. The carrying value of intangible assets with definite lives (suppliers relationships, software, trade name, customer relationships, and non-compete agreements) and equipment is reviewed each reporting period to determine whether there is any indication of impairment. If the carrying amount of an asset exceeds its recoverable amount, the asset is impaired, and an impairment loss is recognized in profit or loss. The assessment of fair values requires the use of estimates and assumptions related to future operating performance and discount rates, differences in these estimates and assumptions could have a significant impact on the consolidated financial statements.

10

Medivolve Inc. (formerly QuestCap Inc.) Notes to the Consolidated Financial Statements For the year ended December 31, 2020 and 2019 (Expressed in Canadian dollars)

2. Significant accounting policies (continued)

Significant accounting judgments, estimates and assumptions (continued)

 Business combinations Applying the acquisition method to business combinations requires each identifiable asset and liability to be measured at its acquisition date fair value. The excess, if any, of the fair value of consideration over the fair value of the net identifiable assets acquired is recognized as goodwill. The determination of acquisition date fair values often requires management to make assumptions and estimates about future events. The assumptions with respect to fair value of intangible assets require a high degree of judgment and include estimates for future operating performance, discount rates, technology migration factors and terminal value rates.

 Leases

The determination of the Company’s lease liability and right-of-use asset depends on certain assumptions which includes the selection of the discount rate. The discount rate is set by referencing to the Company’s incremental borrowing rate. Significant assumptions are required to be made when determining which borrowing rates to apply in this determination. Changes in the assumptions used may have a significant effect on the Company’s consolidated financial statements.

 Receivables

Determining an allowance for expected credit losses ("ECLs") requires management to make assumptions about the historical patterns for the probability of default, the timing of collection and the amount of incurred credit losses, which are adjusted based on management’s judgment about whether economic conditions and credit terms are such that actual losses may be higher or lower than what the historical patterns suggest.

 Significant influence

The Company classifies an investment as an associate based on management’s judgment that the Company has significant influence through board representation and % of the voting rights. Management determined that as of December 31, 2020, the Company does not have any significant influence over any of its investments.

Impairment exists when the carrying value of the investment in associate exceeds its recoverable amount, which is the higher of its fair value less costs to sell and its value in use. The determination of impairment requires significant judgement and can be triggered by significant adverse changes in the market, economic or legal environment in which the associate operates.

 Contingencies See Note 19.

Functional and presentation currency

The functional currency for each subsidiary within the Company is the currency of the primary economic environment in which it operates. The Company’s consolidated financial statements are presented in Canadian dollars. The Canadian dollar is the functional currency of the Company whereas US dollar is the functional currency of its wholly owned subsidiary.

 Foreign currency translation

Transactions denominated in foreign currencies (other than the functional currency) are recorded on initial recognition at the exchange rate at the date of the transaction. After initial recognition, monetary assets and liabilities denominated in foreign currency are translated at the end of each reporting period into the functional currency at the exchange rate at that date. Exchange differences, other than those capitalized to qualifying assets or recorded in equity in hedging transactions, are recognized in profit or loss. Non-monetary assets and liabilities measured at cost in a foreign currency are translated at the exchange rate at the date of the transaction. Nonmonetary assets and liabilities denominated in foreign currency and measured at fair value are translated into the functional currency using the exchange rate prevailing at the date when the fair value was determined.

The US dollar functional currency of the subsidiary is translated to the Canadian dollar presentation currency as follows: (1) all of the assets and liabilities are translated at the rate of exchange in effect on the date of the consolidated statement of financial position; (2) revenue and expenses are translated at the exchange rate approximating those in effect on the date of the transactions; and (3) exchange gains and losses arising from translation are included in accumulated other comprehensive income.

11

Medivolve Inc. (formerly QuestCap Inc.) Notes to the Consolidated Financial Statements For the year ended December 31, 2020 and 2019 (Expressed in Canadian dollars)

2. Significant accounting policies (continued)

Financial instruments

Financial assets and financial liabilities are recognized on the Company’s statement of financial position when the Company has become a party to the contractual provisions of the instrument. Financial assets are derecognized when the rights to receive cash flows from the assets have expired or have been transferred and the Company has transferred substantially all risks and rewards of ownership. The Company’s financial instruments consist of cash, amounts receivable, publicly and privately held investments, notes and loans receivable, accounts payable and accrued liabilities, loans payable and other liabilities.

(i) Investments

Purchases and sales of investments are recognized on a trade date basis. Public and private investments at fair value through profit or loss are initially recognized at fair value, with changes in fair value reported in profit (loss).

At each financial reporting period, the Company’s management estimates the fair value of its investments based on the criteria below and reflects such valuations in the financial statements.

Transaction costs are expensed as incurred in profit (loss). The determination of fair value requires judgment and is based on market information where available and appropriate. At the end of each financial reporting period, the Company’s management estimates the fair value of investments based on the criteria below and reflects such changes in valuations in the statements of comprehensive loss. The Company is also required to present its investments (and other financial assets and liabilities reported at fair value) into three hierarchy levels (Level 1, 2, or 3) based on the transparency of inputs used in measuring the fair value, and to provide additional disclosure in connection therewith. The three levels are defined as follows:

Level 1- Unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2- Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and

Level 3- Inputs that are not based on observable market data.

Publicly-traded investments:

1. Securities, including shares, options and warrants that are traded on a recognized securities exchange and for which no sales restrictions apply are recorded at fair values based on quoted closing prices at the statement of financial position date or the closing price on the last day the security traded if there were no trades at the statement of financial position date. These are included in Level 1 in Note 17.

2. Securities that are traded on a recognized securities exchange but which are escrowed or otherwise restricted as to sale or transfer are recorded at amounts discounted from market value. Shares that are received as part of a private placement that are subject to a standard four-month hold period are not discounted. In determining the discount for such investments, the Company considers the nature and length of the restriction, business risk of the investee corporation, relative trading volume and price volatility and any other factors that may be relevant to the ongoing and realizable value of the investments. These are included in Level 2 in Note 17.

3. Warrants or options of publicly traded securities which do not have a quoted price are carried at an estimated fair value calculated using the Black-Scholes option pricing model if sufficient and reliable observable market inputs are available. If no such market inputs are available or reliable, the warrants and options are valued at intrinsic value. These are included in Level 2 in Note 17.

The amounts at which the Company’s publicly-traded investments could be disposed of may differ from carrying values based on market quotes, as the value at which significant ownership positions are sold is often different than the quoted market price due to a variety of factors such as premiums paid for large blocks or discounts due to illiquidity. Such differences could be material.

12

Medivolve Inc. (formerly QuestCap Inc.) Notes to the Consolidated Financial Statements For the year ended December 31, 2020 and 2019 (Expressed in Canadian dollars)

2. Significant accounting policies (continued)

Financial instruments (continued)

(i) Investments (continued)

Privately held investments:

1. Securities in privately-held companies (other than options and warrants) are initially recorded at cost, being the fair value at the time of acquisition. At the end of each financial reporting period, the Company’s management estimates the fair value of investments based on the criteria below and reflects such valuations in the financial statements. These are included in Level 3 as disclosed in Note 17. Options and warrants of private companies are carried at their intrinsic value.

With respect to valuation, the financial information of private companies in which the Company has investments may not always be available, or such information may be limited and/or unreliable. Use of the valuation approach described below may involve uncertainties and determinations based on the Company’s judgment and any value estimated from these may not be realized or realizable. In addition to the events described below, which may affect a specific investment, the Company will take general market conditions into account when valuing the privately held investments in its portfolio. In the absence of occurrence of any of these events or any significant change in general market conditions indicates generally that the fair value of the investment has not materially changed.

1. An upward adjustment is considered appropriate and supported by pervasive and objective evidence such as a significant subsequent equity financing by an unrelated investor at a transaction price higher than the Company’s carrying value; or if there have been significant corporate, political or operating events affecting the investee company that, in management’s opinion, have a positive impact in the investee company’s prospects and therefore its fair value. In these circumstances, the adjustment to the fair value of the investment will be based on management’s judgment and any value estimated may not be realized or realizable. Such events include, without limitation:

2. Political changes in a country in which the investee company operates that, for example, reduce the corporate tax burden, permit mining where, or to an extent that, it was not previously allowed, or reduce or eliminate the need for permitting or approvals;

3. Receipt by the investee company of environmental, mining, aboriginal or similar approvals, which allow the investee company to proceed with its project(s);

4. Filing by the investee company of a National Instrument 43-101 technical report in respect of a previously non-compliant resource;

5. Release by the investee company of positive exploration results, which either proves or expands their resource prospects; and

6. Important positive management changes by the investee company that the Company’s management believes will have a positive impact on the investee company’s ability to achieve its objectives and build value for shareholders.

7. Downward adjustments to carrying values are made when there is evidence of a decline in value as indicated by the assessment of the financial condition of the investment based on third party financing, operational results, forecasts, and other developments since acquisition, or if there have been significant corporate, political or operating events affecting the investee company that, in management’s opinion, have a negative impact on the investee company’s prospects and therefore its fair value. The amount of the change to the fair value of the investment is based on management’s judgment and any value estimated may not be realized or realizable. Such events include, without limitation:

8. Political changes in a country in which the investee company operates that increases the tax burden on companies, that prohibit mining where it was previously allowed, that increases the need for permitting or approvals, etc;

9. Denial of the investee company’s application for environmental, mining, aboriginal or similar approvals that prohibit the investee company from proceeding with its project(s);

10. The investee company releases negative exploration results;

13

Medivolve Inc. (formerly QuestCap Inc.) Notes to the Consolidated Financial Statements For the year ended December 31, 2020 and 2019 (Expressed in Canadian dollars)

2. Significant accounting policies (continued)

Financial instruments (continued)

(i) Investments (continued)

• Changes to the management of the investee company take place that the Company believes will have a negative impact on the investee company’s ability to achieve its objectives and build value for shareholders;

Privately held investments (continued):

• The investee company is placed into receivership or bankruptcy; and

• Based on financial information received from the investee company, it is apparent to the Company that the investee company is unlikely to be able to continue as a going concern.

The resulting values may differ from values that would be realized had a ready market existed. The amounts at which the Company’s privately-held investments could be disposed of may differ from the carrying value assigned. Such differences could be material.

Investments in associates:

Investments in associates are those entities over which the Company has or is deemed to have significant influence, but not control over, the financial and operating policies, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments over which the Company has the ability to significantly influence are initially recorded at cost. When the initial recognition of the investment in the associate occurs as a result of a loss of control of a former subsidiary, the fair value of the retained interest in the former subsidiary on the date of the loss of control is deemed to be the cost on initial recognition. Investment income (loss) is calculated using the equity method. The Company’s share of the associate’s profit or loss is recognised in profit or loss and its share of movements in other comprehensive income (loss) is recognised in other comprehensive income with a corresponding adjustment to the carrying amount of the investment. When the Company’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Company does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate. The Company determines at each reporting date whether there is any objective evidence that the investment in the associate is impaired. If this is the case, the Company calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognises the amount in the consolidated statements of income (loss).

Investments in subsidiaries:

As an investment entity, the Company did not consolidate its investments in subsidiaries, except for those subsidiaries providing services that relate to the Company’s investment activities. Instead, the investment in a subsidiary was measured at fair value through profit or loss. This treatment is permitted by IFRS 10, Consolidated Financial Statements (“IFRS 10”), which allows investments held by venture capital or similar organizations to be excluded from its scope where those investments are measured at fair value through profit or loss in accordance with IFRS 9, with changes in fair value recognized in profit (loss) within unrealized gains or losses on investments.

Loans receivable:

1. Secured debentures are carried at cost. The recoverability of the secured debentures is assessed when events occur indicating impairment. Recoverability is based on factors such as failure to pay interest on time and failure to pay the principal. An impairment loss is recognized in the period when it is determined that the carrying amount of the assets will not be recoverable. At that time the carrying amount is written down to fair value. Secured debentures are financial instruments classified at amortized cost.

2. Convertible debentures and convertible notes issued from publicly traded companies are carried at the higher of the value of the loan or the fair value of the common shares or units receivable from the conversion assuming the conversion can be done at the Company’s option.

The conversion feature of convertible debentures and convertible notes issued from private companies are carried at nominal value.

14

Medivolve Inc. (formerly QuestCap Inc.) Notes to the Consolidated Financial Statements For the year ended December 31, 2020 and 2019 (Expressed in Canadian dollars)

2. Significant accounting policies (continued)

Financial instruments (continued)

(ii) Amounts receivable

Receivables are classified at amortized cost and are initially recorded at the fair value of the amount expected to be received and subsequently measured at amortized cost less any provision for impairment. Individual significant receivables are considered for recoverability when they are past due or when other objective evidence is received that suggests a specific counterparty will default.

(iii) Financial liabilities

All financial liabilities are classified at amortized cost except for financial derivatives and any financial liabilities from inception classified at fair value through profit or loss. All financial liabilities are recognized initially at fair value plus directly attributable transaction costs except for those designated at fair value through profit and loss.

Financial liabilities at fair value through profit or loss are carried in the statement of financial position at fair value with changes in fair value recognized in profit (loss). Financial liabilities at amortized cost are measured at initial cost, plus interest calculated using the effective interest rate method. The effective interest rate method is a method of calculating the amortized cost of a financial asset or financial liability and of allocating the interest income or interest expense over the relevant period. Accounts payable and accrued liabilities, loans payable, lease liabilities and other liabilities are classified at amortized cost.

(iv) Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount reported in the statement of financial position if, and only if, there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously.

(v) Financial assets other than investments at fair value

Financial assets that are managed to collect contractual cash flows made up of principal and interest are designated as at amortized cost. All other financial assets are designated as at fair value through profit or loss. All financial assets are recognized initially at fair value plus, in the case of financial assets designated at amortized cost, directly attributable transaction costs. Financial assets at amortized cost are measured at initial cost plus interest calculated using the effective interest rate method less cumulative repayments and cumulative impairment losses. Cash amounts receivable, note and loans receivable are classified at amortized cost.

A financial asset is derecognized when the rights to receive cash flows from the asset have expired or the Company has transferred substantially all the risks and rewards of the asset. The Company assesses at each reporting date whether there is any objective evidence that a financial asset is impaired. For amounts deemed to be impaired, the impairment provision is based upon the expected loss.

(vi) Derecognition

A financial asset is derecognized when the contractual rights to the cash flows from the asset expire, or the Company no longer retains substantially all the risks and rewards of ownership.

(vii) Impairment of financial assets

The Company’s financial assets subject to impairment are accounts receivable and note and loans receivables which are measured at amortized cost. The Company has elected to apply the simplified approach to impairment as permitted by IFRS 9, which requires the expected lifetime loss to be recognized at the time of initial recognition of the receivable. To measure estimated credit losses, accounts receivable has been grouped based on shared credit risk characteristics, including the number of days past due. An impairment loss is reversed in subsequent periods if the amount of the expected loss decreases and the decrease can be objectively related to an event occurring after the initial impairment was recognized.

15

Medivolve Inc. (formerly QuestCap Inc.) Notes to the Consolidated Financial Statements For the year ended December 31, 2020 and 2019 (Expressed in Canadian dollars)

2. Significant accounting policies (continued)

Business combinations

Acquisitions have been accounted for using the acquisition method required by IFRS 3, Business Combinations. Goodwill arising from acquisitions is measured as the fair value of the consideration transferred less the net recognized amount of the estimated fair value of identifiable assets acquired and liabilities assumed (subject to certain exemptions to fair value measurement principles such as deferred tax assets or liabilities), all measured as of the acquisition date. Transaction costs that are incurred by the Company in connection with a business combination are expensed as incurred (except for costs directly related to the issuance of shares which are recognized in equity).

The Company uses its best estimates and assumptions to accurately value assets and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, and these estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company records adjustments to the assets acquired and liabilities assumed with a corresponding offset to goodwill. On conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded in profit and loss.

Cash and cash equivalents

Cash is comprised of cash on hand and deposits that generally mature within 90 days from the date of acquisition. Deposits are held in Canadian chartered banks or in a financial institution controlled by a Canadian chartered bank and US banks. As at December 31, 2020 and 2019 the Company did not have any cash equivalents.

Property and equipment

Property and equipment are stated at cost, less accumulated depreciation, and accumulated impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the asset. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost can be measured reliably. Repairs and maintenance costs are charged to profit or loss during the period in which they are incurred.

Depreciation is calculated on a straight-line method to write off the cost of the asset to their residual values over their estimated useful lives. The depreciation rates or useful lives applicable to each category of property and equipment and are as follows:

Equipment 5 years Vehicles 5 years Building 8 years

Gains and losses on disposals of property and equipment are determined by comparing the proceeds with the carrying value of the asset and are included as part of other gains and losses in operations.

Leases

At inception of the contract, the Company assesses whether a contract is, or contains, a lease by evaluating if the contract conveys the right to control the use of an identified asset. For contracts that contain a lease, the Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted by any initial direct costs, and costs to dismantle and remove the underlying asset less any lease incentives. The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the underlying asset or the end of the lease term.

Under IFRS 16, right-of-use assets are tested for impairment in accordance with IAS 36, Impairment of Assets. This replaced the previous requirement to recognize a provision for onerous lease contacts. The lease liability is initially measured at the present value of lease payments to be paid subsequent to the commencement date of the lease, discounted either at the interest rate implicit in the lease or the Company's incremental borrowing rate.

16

Medivolve Inc. (formerly QuestCap Inc.) Notes to the Consolidated Financial Statements For the year ended December 31, 2020 and 2019 (Expressed in Canadian dollars)

2. Significant accounting policies (continued)

Leases (continued)

The lease payments measured in the initial lease liability include payments for an optional renewal period, if any, if the Company is reasonably certain that it will exercise a renewal extension option. The liability is measured at amortized cost using the effective interest method and will be remeasured when there is a change in either the future lease payments or assessment of whether an extension or other option will be exercised. The lease liability is subsequently adjusted for lease payments and interest on the obligation. Interest expense on the lease obligation is included in the consolidated statement of operations. See Note 13 for continuity schedule of the rightof-use asset and lease liabilities.

Revenue recognition

Revenue is recognized only when it is probable that the economic benefits associated with the transaction will flow to the entity. However, when an uncertainty arises about the collectability of an amount already included in revenue, the uncollectible amount, or the amount in respect of which recovery has ceased to be probable, is recognized as an expense, rather than as an adjustment of the amount of revenue originally recognized.

The Company's main source of revenue consists of administering various COVID related tests and reporting the results of these tests to the customer. These tests are at fixed prices. Revenue is recognised once the result of the test has been provided to the customer and collection is reasonably assured. Payments received for which test results have not yet been delivered are reported as deferred revenue.

Realized gains and losses on the disposal of investments and unrealized gains and losses in the value of investments are reflected in profit (loss) on a trade date basis. Upon disposal of an investment, previously recognized unrealized gains or losses are reversed, so as to recognize the full realized gain or loss in the period of disposition. All transaction costs are expensed as incurred. Dividend income is recorded on the ex-dividend date. Interest income and other income are recorded on an accrual basis. Deferred revenue is recognized over the period for which the revenue is earned.

Share-based payments

Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity investments at the grant date. Fair value is measured at grant date and each tranche is recognized on a graded-vesting basis over the period in which options vest. At the end of each reporting period, the Company revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognized in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the equity reserve. For options that expire unexercised, the recorded value is transferred to deficit.

Loss per share

Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common shares for the period. In computing diluted earnings per share, an adjustment is made for the dilutive effect of the exercise of stock options and warrants. The number of additional shares is calculated by assuming that outstanding stock options and warrants are exercised and that the proceeds from such exercises were used to acquire common shares at the average market price during the reporting periods. In periods where a net loss is reported, all outstanding options and warrants are excluded from the calculation of diluted loss per share, as they are anti-dilutive.

Taxation

I. Current income tax

Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the end of each reporting period.

17

Medivolve Inc. (formerly QuestCap Inc.) Notes to the Consolidated Financial Statements For the year ended December 31, 2020 and 2019 (Expressed in Canadian dollars)

2. Significant accounting policies (continued)

Taxation (continued)

II. Deferred income tax

Deferred income tax is provided using the liability method on temporary differences, at the end of each reporting period, between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred income tax liabilities are recognized for all taxable temporary differences, except:

• where the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

• in respect of taxable temporary differences associated with investments in subsidiaries, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

The carrying amount of deferred income tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized. Unrecognized deferred income tax assets are reassessed at the end of each reporting period and are recognized to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized, or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the end of each reporting period. Deferred income tax relating to items recognized directly in equity is recognized in equity and not in the profit or loss.

Deferred income tax assets and deferred income tax liabilities are offset if, and only if, a legally enforceable right exists to set off current tax assets against current tax liabilities and deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend to either settle current tax liabilities and assets on a net basis, or to realize the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax assets or liabilities are expected to be settled or recovered.

Royalty interests

The Company holds royalty interests in certain research stage projects. Royalty interests are recorded at cost and capitalized as tangible assets with finite lives. Royalty interests on research stage projects, where there are no cash inflows, are not amortized. The Company evaluates its royalty interests for impairment whenever events or changes in circumstances, which may include significant changes in publicly available information from operators of the assets, indicate that the related carrying value of the royalty interests may not be recoverable. The recoverability of royalty interests is evaluated based on future undiscounted net cash flows from each royalty interest. Impairments in the carrying value of each royalty are measured and recorded to the extent the carrying value of each royalty exceeds its recoverable amount, which is the higher of fair value less costs to sell or value in use, which is generally calculated using estimated discounted future cash flows.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed in profit (loss) to the extent that the carrying amount of the royalty interest at the date the impairment is reversed does not exceed what the amortized cost would have been had the impairment not been recognized. Estimates related to the royalty interests are subject to certain risks and uncertainties which may affect the recoverability of the Company’s investment in these royalty interests. Although the Company has made its best assessment of these factors based on current conditions, it is possible that changes could occur, which could adversely affect the net cash flows expected to be generated from these royalty interests.

18

Medivolve Inc. (formerly QuestCap Inc.) Notes to the Consolidated Financial Statements For the year ended December 31, 2020 and 2019 (Expressed in Canadian dollars)

2. Significant accounting policies (continued)

Inventories

Inventories are comprised of three types of purchased test kits and all of them are treated as finished goods. Inventories are recorded at the lower of cost and net realizable value. Cost includes the purchase price and other costs, such as import duties, taxes and transportation costs. Inventory cost is determined on a first-in, first-out basis and any trade discounts and rebates are deducted from the purchase price.

Net realizable value represents the estimated selling price for inventories as part of the services in the ordinary course of business, less all estimated costs of completion and costs necessary to make the sale.

As of December 31, 2020, the book value of inventory is $232,786 (December 31, 2019 — $ Nil) which is entirely composed of finished inventory recorded at cost. During the year ended December 31, 2020, $1,462,655 of inventory was expensed in cost of sales (year ended December 31, 2019 — $Nil) and the provision for obsolete inventory totalled $Nil (December 31, 2019 - $Nil).

New and future accounting pronouncements

During the year ended December 31, 2020, the Company adopted a number of amendments and improvements of existing standards. These included IAS 1, IFRS 3. These new standards and changes did not have any material impact on the Company’s financial statements.

Certain pronouncements were issued by the IASB or the IFRIC that are mandatory for accounting periods commencing on or after January 1, 2021. Many are not applicable or do not have a significant impact to the Company and have been excluded.

IAS 1 – Presentation of Financial Statements (“IAS 1”) was amended in January 2020 to provide a more general approach to the classification of liabilities under IAS 1 based on the contractual arrangements in place at the reporting date. The amendments clarify that the classification of liabilities as current or noncurrent is based solely on a company’s right to defer settlement at the reporting date. The right needs to be unconditional and must have substance. The amendments also clarify that the transfer of a company’s own equity instruments is regarded as settlement of a liability, unless it results from the exercise of a conversion option meeting the definition of an equity instrument. The amendments are effective for annual periods beginning on January 1, 2023.

IAS 37 – Provisions, Contingent Liabilities, and Contingent Assets (“IAS 37”) was amended. The amendments clarify that when assessing if a contract is onerous, the cost of fulfilling the contract includes all costs that relate directly to the contract – i.e. a full-cost approach. Such costs include both the incremental costs of the contract (i.e. costs a company would avoid if it did not have the contract) and an allocation of other direct costs incurred on activities required to fulfill the contract – e.g. contract management and supervision, or depreciation of equipment used in fulfilling the contract. The amendments are effective for annual periods beginning on January 1, 2022.

IFRS 3 – Business Combinations (“IFRS 3”) was amended. The amendments introduce new exceptions to the recognition and measurement principles in IFRS 3 to ensure that the update in references to the revised conceptual framework does not change which assets and liabilities qualify for recognition in a business combination. An acquirer should apply the definition of a liability in IAS 37 – rather than the definition in the Conceptual Framework – to determine whether a present obligation exists at the acquisition date as a result of past events. For a levy in the scope of IFRIC 21, the acquirer should apply the criteria in IFRIC 21 to determine whether the obligating event that gives rise to a liability to pay the levy has occurred by the acquisition date. In addition, the amendments clarify that the acquirer should not recognize a contingent asset at the acquisition date. The amendments are effective for annual periods beginning on January 1, 2022.

19

Medivolve Inc. (formerly QuestCap Inc.) Notes to the Consolidated Financial Statements For the year ended December 31, 2020 and 2019 (Expressed in Canadian dollars)

3. Notes and loans receivable

		December	31, 2020	December	December	31, 2019
Blue Sky Energy Inc.	Unsecured	$	11,609	$		10,353
Breeze Laboratory SAS Colombia	Unsecured		536,996			-
Flora Growth Corp.	Unsecured		-			682,856
Newdene Gold Inc.	Unsecured & convertible		-			308,721
		$	548,605	$	1,001,930

On July 24, 2019, the Company entered into a convertible promissory note with OjO Electric LLC (“OjO”), a California limited liability company, for US$400,000 ($523,960). Interest accrued at a rate of 7% per annum. The principal and any accrued interest were to convert automatically in the event OjO closed an equity financing prior to the maturity date. The principal and interest would convert into the number, class and series of securities as those issued by OjO in a qualified equity financing at the conversion price. This note was unsecured.

On August 5, 2019, the Company entered into a loan agreement with Flora Growth Corp. (“Flora”) whereby the Company agreed to lend Flora up to US$500,000 ($709,350). Interest was accrued and calculated at a rate of 10% per annum on the drawn down principal, plus any unpaid interest. The principal and accrued interest was due and payable on demand by the Company. On February 3, 2020, Flora paid the Company $688,469 in full satisfaction of the debt.

Deborah Battiston, CFO of the Company, is the CFO of Flora, Stan Bharti, a former director of the Company, is a director of Flora, and Fred Leigh, a former director of the Company, is a director of Flora.

On September 16, 2019, the Company entered into a loan agreement with Blue Sky Energy Inc. (“Blue Sky”) for a loan of $10,000. Interest is accrued and calculated at 12% per annum. The loan principal and accrued interest are due and payable on June 30, 2020 which was extended to June 30, 2021. Scott Moore, a former director of the Company, is a former director of Blue Sky.

On October 16, 2019, the note was converted to 772,071 common shares of Last Mile Holdings Ltd. upon the closing of their equity financing and listing on the TSX Venture Exchange under the symbol “OJO”. The conversion price included all principal, accrued interest and withholding taxes owed to the Company at the time of conversion. The shares will be held in escrow and released in five tranches at 6-month intervals ranging from October 16, 2019 to October 16, 2021. At the time of conversion, the shares had a market price of $0.50 per share. Consequently, the Company recorded a loss of $152,106 on the statement of loss for the year ended December 31, 2019.

On August 17, 2020 the Company entered into a loan agreement with Breeze Laboroatory SAS Colombia (“Breeze”) and agreed to lend Breeze up to US$500,000 with interest accrued and calculated at 12% per annum. The loan principal and accrued interest are due and payable six months from the date when drawdown is made. Deborah Battiston, CFO of the Company is CFO of Flora Growth Corp., which acquired Breeze on December 31, 2020. The Company expects to extent the maturity date in 2021.

On November 12, 2019, the Company entered into a loan agreement with Newdene Gold Inc. (“Newdene) for a loan of $300,000. Interest is accrued and calculated at a rate of 10% per annum, and the loan matures on November 12, 2021. The Company has the option to require that the unpaid principal, together with any unpaid interest, be satisfied by the transfer of 3,000,000 common shares of Routemaster Capital Inc. upon maturity. On December 1, 2020, Newdene repaid the principal and accrued interest of $333,360 leaving a balance of $5,000. The payment was held and deposited subsequent to December 31, 2020.

20

Medivolve Inc. (formerly QuestCap Inc.) Notes to the Consolidated Financial Statements For the year ended December 31, 2020 and 2019 (Expressed in Canadian dollars)

4. Amounts receivable

Amounts receivable
	December 31, 2020 December 31, 2019
Insurance receivable	$ 875,308$ -
Taxes receiveable	83,484-
Undeposited funds	1,218,230-
Related partyreceivables (Note18)	**135,706 ** 313,695
	$ 2,312,728$ 313,695

Un-deposited fund relates to amounts owing from remittance partners such as credit card companies, that have collected payments form the ultimate customers, but have not yet remitted that yet company.

5. Prepaid expenses and advances

			December 31, 2020		December 31, 2019
Prepaid insurance		$	17,512	$	23,432
Prepaid expenses (Note	18)		97,037		194,405
Prepaid leases			216,133		-
		$	330,682	$	217,837

On April 7, 2020, the Company entered into a profit-sharing agreement with More Than Just Rice, Inc. (“MTJR”), for MTJR to exclusively distribute, market and sell COVID-19 antibody tests in North and South America. The transaction was structured as a profit-sharing agreement between the Company and MTJR. MTJR is an armslength, California-based company involved in importing, exporting and distributing various products. Per the profit - sharing agreement, the Company was to receive 40% of any net profits earned from the sale of the tests. As part of the MTJR profit-sharing agreement, the Company agreed to help finance the purchase of antibody tests for distribution in the Americas.

On April 21, 2020, the Company issued a promissory note to an arm’s length third party lender (refer to Note 12) and advanced US $7,000,000 to PCL Inc. (“PCL”), for the acquisition of the antibody tests on behalf of MTJR.

MJTR was to return the funds advanced on its behalf to the Company prior to making any payments from the gross proceeds received from the sale of the tests excluding costs incurred related to the tests and the implementation of the supply agreement Subsequently, it was determined that the test kits could not be sold in the United States as they did not meet the emergency use provision of the FDA. As a result, the Company and MTJR are seeking to have the funds paid to PCL refunded in their entirety. As this is a contingency related to a possible gain that is not virtually certain to occur, no amounts have been recognized in these financial statements related to the return of the funds. In addition, as a result of the test kits not being available to sell in the United States, the profit-sharing agreement with MTJR has been terminated.

6. Investments at fair value through profit and loss

As at December 31, 2020, the Company had two publicly held investments and five privately held investments, for a total fair value of $3,565,932 (December 31, 2019: $766,036).

Public investments

As at December 31, 2020, the Company’s two publicly traded investments had a total fair value of $403,563 (December 31, 2019: $386,036).

21

Medivolve Inc. (formerly QuestCap Inc.) Notes to the Consolidated Financial Statements For the year ended December 31, 2020 and 2019 (Expressed in Canadian dollars)

6. Investments at fair value through profit and loss

Public investments (continued)

Deceember 31, 2020	Deceember 31, 2020				Estimated	Estimated
Public Issuer		Security description		Cost	Fair Value		% of FV
Sulliden Mining Capital Inc.		5,740,605 common shares	$	300,067	$	401,842	99.6%
LastMileHoldingsInc.*		172,071commonshares		86,035		1,721	0.4%
Totalpublic investments			$	386,102	$	403,563	100.0%
* formerly OjO Electric Corp.
	December 31, 2019					Estimated
	Public Issuer	Security description		Cost	Fair Value		% of FV
	Last Mile Holdings Inc.*	772,071 common shares	$	386,036	$	386,036	100.0%
	Totalpublic investment		$	386,036	$	386,036	100.0%

• formerly OjO Electric Corp.

On July 24, 2019, the Company entered into a convertible promissory note with OjO Electric LLC, a California limited liability company, for US$400,000 ($523,960). On October 16, 2019, the note was converted to 772,071 common shares of Last Mile Holdings Ltd. (formerly, OjO Electric Corp.) upon the closing of its equity financing and listing on the TSX Venture Exchange under the symbol “OJO” (currently, “MILE”). The conversion price included all principal, accrued interest and withholding taxes owed to the Company at the time of conversion.

On January 31, 2020, the Company sold 600,000 common shares of its investment in OjO Electric Corp. (currently, Last Mile Holdings Ltd.). for gross proceeds of $300,000 to Sulliden Mining Capital Inc. (“Sulliden”).

On January 31, 2020, the Company purchased 3,133,333 common shares and 2,607,272 flow-through shares of Sulliden. Deborah Battiston, CFO of the Company, is the former CFO of Sulliden, and Stan Bharti, a former director of the Company, is CEO and a director of Sulliden.

Private investments

As at December 31, 2020, the Company’s five privately held investments had a total fair value of $3,162,369 (December 31, 2019: $380,000).

On March 23, 2020, the Company acquired an investment in Eco Capital Growth Corp. (“Eco Capital”). In consideration, the Company issued 8,000,000 of its common shares. The total consideration paid to acquire the investment in Eco Capital was $1,240,000 based on the fair market value of the common shares issued by the Company. The fair market value of the common shares was estimated based on their trading price at the time of the transaction. On December 31, 2020, the Company wrote down the fair value of Eco Capital to reflect the sale of this investment to an arm’s-length company for $1 in January 2021.

On April 13, 2020, the Company acquired 40% of the issued and outstanding shares of Amino Therapeutics Inc. (“Amino”) by issuing 15,000,000 of the Company’s common shares. The Company has assessed this investment and determined that it cannot assert significant influence on Amino. As a result this investment is recorded at fair value. The company is controlled by a group that acts in concert which holds 60% and subsequent to year end the company entered into an agreement to reduce its holding to 10%

Additional terms of the agreement are as follows:

• The Company paid $100,000 USD of cash on the closing date, and agreed to make additional payments of

• $200,000 USD on July 30, 2020, ($80,000 paid)

• $200,000 USD on September 15, 2020, (past due)

• $200,000 USD on December 15, 2020, (past due)

• $250,000 USD on March 15, 2021, (past due)

• $250,000 USD on June 15, 2021,

• $250,000 USD on September 15, 2021, and

• $550,000 USD on December 15, 2021

22

Medivolve Inc. (formerly QuestCap Inc.) Notes to the Consolidated Financial Statements For the year ended December 31, 2020 and 2019 (Expressed in Canadian dollars)

6. Investments at fair value through profit and loss (continued)

Private investments (continued)

• Amino agreed to issue a warrant entitling the Company to purchase an additional 9% equity in Amino at an exercise price of $2 million with an expiry of 24 months from the closing date; The estimated fair value of the warrant was assessed and determined to be $nil.

• Amino’s parent company, Exponential Genomics Inc. (“Exponential”) also privately held, agreed to issue a warrant entitling the Company to acquire up to a 9.9% equity in Exponential for $2 million USD for a period of 12 months from the closing date. The estimated fair value of the warrant was assessed and determined to be $nil.

Through an independent valuation, the investment in Amino was valued at $7,009,438. The remaining cash payments due to Amino have been discounted at a rate of 12% and an amount of US$1,746,870) $2,434,438 has been included in other liabilities. During the year ended December 31, 2020, the Company made a cash payment of US$180,000 (C$250,380) leaving a balance of US$1,566,869.98 (C$1,994,939). As at December 31, 2020, the fair value of Amino was assessed at $3,162,367 through an independent valuation resulting in an unrealized loss of $3,847,071. Subsequent to December 31, 2020, the Company entered into an amended agreement to reduce the ownership interest from 40% to 10% and return the Exponential warrant in consideration for forgiveness of the balance of outstanding debt. Additional details on the valuation of Amino can be found in Note 17

On April 16, 2020, the Company acquired an investment in Athletics and Health Solutions Inc. (“A&H”), a recently incorporated private Ontario corporation. The Company issued 6,000,000 common shares to four arm’s length vendors of the A&H common shares valued at $3,000,000 based on the fair market value of the common shares issued by the Company. The fair market value of the common shares was estimated based on their trading price at the time of the transaction. On December 31, 2020, the Company wrote down the fair value of A&H Capital to reflect the sale of this investment to an arm’s- length Company for $1 in January 2021.

On June 22, 2020, the Company acquired 30% of the issued and outstanding shares of Glenco Medical Corp. (“Glenco Medical”) by issuing 12,000,000 of the Company’s common shares. The estimated fair value of the consideration paid to acquire the investment was $2,220,000 based on the fair market value of the common shares issued by the Company. At December 31, 2020, the Company wrote down its investment in Glenco due to managements expectations of future activity. Should market conditions improve and the fair value of investments increase, the asset will be written up at that time.

On July 28, 2020, the Company acquired an indirect interest of 28% in Sanaty IPS S.A.S (“Sanaty”), through a definitive agreement made with Latin-Canada Pharma Inc. (Canada) and Latin-Canada Pharma Inc. (Bahamas) (“LCP Bahamas”) for 40% interest in LCP Bahamas which own 70% of Sanaty. The Company issued 12,000,000 of the Company’s common shares. The Company has assessed this investment and determined that it cannot assert significant influence over LCP or Sanatay. As a result this investment is recorded at Fair Value. In addition, the Company is required to issue 4,000,000 common shares upon Sanaty reaching certain sales thresholds. As a triggering event has not yet occurred, these amounts have not been reflected in these financial statements. At December 31, 2020, the Company wrote down the investment in Latin-Canada Pharma Inc. due managements expectations of future activity. Should market conditions improve and the fair value of investments increase, the asset will be written up at that time.

On July 29, 2019, The Company purchased 12,666,667 subscription receipts (“Subscription Receipts”) of Varianz Corp., (“Varianz”) at a price of $0.03 per Subscription Receipt. Each Subscription Receipt entitled the Company to receive one unit of Varianz. Each unit was comprised of one common share of Varianz and one common share purchase warrant exercisable for a period of 24 months from the date of issue, at a price of $0.06 per warrant.

Varianz entered into a binding letter of intent with Savanna Capital Corp. (“Savanna”), a company listed on the TSX Venture Exchange, to complete a reverse takeover of Savanna (“RTO”) such that the common shares and warrants of Varianz would be converted into free trading shares and warrants of such publicly listed entity upon the completion of the RTO. Deborah Battiston, CFO of the Company, is CFO of Savanna and Fred Leigh, a former director of the Company, is a director of Savanna.

On March 29, 2020, the RTO was cancelled, and the full amount of the Subscription Receipts was returned to the Company.

23

Medivolve Inc. (formerly QuestCap Inc.) Notes to the Consolidated Financial Statements For the year ended December 31, 2020 and 2019 (Expressed in Canadian dollars)

7. Royalty interest

On April 2, 2020, the Company announced an investment commitment in the Sunnybrook Research Institute’s (“Sunnybrook”) COVID-19 research. The Company was to receive a 3.5% royalty on any revenues earned by Sunnybrook from the commercialization of its COVID-19 research. Under the agreement, the Company agreed to provide $1,000,000 in funding to the program. The Company paid the first installment of $250,000 on April 2, 2020 and was to pay the remaining amounts in three equal installments of $250,000 within the next twelve months. On December 31, 2020, the Company entered into an amendment agreement with Sunnybrook whereby the royalty interest was reduced to 1.75% for total funding of $500,000. As at December 31, 2020 $250,000 remains owing under this agreement and this amount has been included in accounts payable. Subsequent to December 31, 2020, the Company issued 326,087 shares of the Company in settlement of $100,000 of the amount owing.

On April 9, 2020, the Company announced an investment commitment with Sinai Health Foundation (“Sinai”) to support the development of a diagnostic test for COVID-19. Under the agreement, the Company agreed to provide $500,000 in funding to the program. The Company paid the first installment of $125,000 on May 8, 2020 and was to pay the remaining amounts in three equal installments of $125,000 within twelve months. On December 31, 2020, the Company terminated the funding agreement with Sinai and agreed to pay for the outstanding cost of research of $15,835.

8. Property and equipment

	Buildings	Equipment	Vehicle	Total
	$	$	$	$
Balance as at January 1, 2020	-	-	-	-
Additions (Disposals)	659,680	5,849	17,127	682,656
Balance as atDecember31,2020	659,680	5,849	17,127	682,656
**Accumulated depreciation, depletion and **	impairment
Balance as at January 1, 2020	-	-	-	-
Changes for the year	(13,743)	(135)	-	(13,878)
Balance as atDecember31,2020	(13,743)	(135)	-	(13,878)
Net book value as at January 1, 2020	-	-	-	-
Net book value as at December 31, 2020	645,937	5,714	17,127	668,778

9. Acquisition of Collection Sites LLC and change of business

On August 24, 2020, the Company acquired a 100% interest in Collections, LLC (“Collection Sites”) by issuing 20,000,000 shares of the Company. The Company also provided additional working capital of US$1,782,704 ($2,342,294) up to October 15, when the Company changed its business from investment issuer to a single purpose medical company.

Purchase price consideration

At the time of initial acquisition the Company was reporting as an investment issuer and from that date until October 14, 2020 the investment in Collection Sites was recorded at fair value. The fair value of collection sites on the date of acquisition was determined to be $2,742,557 based on an independent valuation. As a result, the value of the consideration paid, consisting of 20,000,000 common shares of the Company, was valued at $2,742,557. Effective October 15, 2020, the Company ceased to be an investment issuer and began to consolidate the operations of Collection Sites. As a result, on October 15, 2020, the Company was deemed to acquire Collection Sites and performed a business combination calculation under the rules of IFRS 3. Below is the calculation performed on October 15, 2020:

24

Medivolve Inc. (formerly QuestCap Inc.) Notes to the Consolidated Financial Statements For the year ended December 31, 2020 and 2019 (Expressed in Canadian dollars)

9. Acquisition of Collection Sites LLC and change of business (continued)

Fair Value of assets acquired and liabilities assumed	Fair Value of assets acquired and liabilities assumed
Tangible assets
Cash 43,098 $ Inventory 128,762 Prepaid expenses 512,947 Right-of-use assets 4,948,850 Property and equipment 268,629 Payables (156,853) Lease liabilities (4,001,709) Intangible Assets - Supplier relationships 2,340,000
Net asset acquired 4,083,724 $

For the year ended December 31, 2020, $97,500 of amortization has been recorded by management on an estimated 5 years useful life the intangible assets. As of December 31, 2020, the net book value of intangible assets is $2,242,500.

Management of the Company engaged an independent valuation firm to prepare a valuation of Company's investment in Collection Sites based on the discounted cash flow model as at the deemed acquisition date (October 15, 2020). The valuation firm provided the Company with valuation methods in which there was sufficient information to determine a reasonable value for the investment in Collection Sites. The valuation firm based its conclusion on the valuation using the income approach. This approach provided the Company with a range in which a reasonable valuation for Collection Sites would fit. Management selected a valuation of Collection Sites that was within the range as provided in the valuation report.

Under the income approach, fair value is based on the present value of expected future cash flow attributable to the assets. Future cash flow is based on the net after tax cash flow expected to be derived from the assets over the remaining useful life, after providing for contributory assets, charges for other significant tangible and intangible assets that contribute to the generation of cash flow stream. These cash flows then have to be converted into present value equivalent through discounting. This discounting process uses a rate of return, which reflects the relevant risk associated with the asset and the time value of money.

Based on the approach above, management has selected a mid-point from the valuation report and recognised intangible assets - suppliers relationships of $2,340,000 on the valuation date.

The valuation of Collection Sites as of October 15, 2020 is based on the following significant unobservable inputs and a 5% increase/decrease in those inputs will change the valuation as follows:

1. Year to year revenue growth (%)	-	$91,000
2. Supplier relationships attrition rate	-	$61,000
3. EBITDA %	-	$485,000
4. Discount rate	-	$42,000

10. Exploration and evaluation assets and expenditures

The Company previously held an option to acquire certain mineral exploration properties in Spain. As at December 31, 2019, this option was terminated and all property related expenditures were written off.

25

Medivolve Inc. (formerly QuestCap Inc.) Notes to the Consolidated Financial Statements For the year ended December 31, 2020 and 2019 (Expressed in Canadian dollars)

11. Accounts payable and accrued liabilities

		December 31, 2020		December31,2019
Trade payables	$	6,009,690	$	258,011
Accrued exenses		665,192		57,985
	$	6,674,882	$	315,996

Subsequent to December 31, 2020, the Company issued 369,565 shares of the Company in settlement of $170,000 of accounts payable.

12. Loans payable

December 31, 2020	December 31, 2019
Cambridge Capital Inc. Secured $ 10,520,477	$ -
Sulliden Mining Capital Inc. Unsecured 1,629,355 Aberdeen International Inc. Unsecured 508,384 GreenwayInvetsments International Ltd. Unsecured 776,147	- - -
13,434,363 $	$-

Cambridge Capital Inc. (“Cambridge”)

On April 21, 2020, the Company issued a promissory note in the amount of USD$7,700,000 ($10,271,030) to an arm’s length, third party lender. No interest is payable under the terms of the note. As additional consideration, the Company paid an origination fee of US$1,300,000 ($1,734,070) and issued 6,000,000 of the Company’s common shares to the lender, with an estimated fair value of $2,790,000 ($0.465 per share) based on the closing price of the shares on the date of issuance. These amounts are shown as financing costs on the statement of operations. The origination fee forms part of the principal owing under the note, consequently USD$9,000,000 ($12,005,100) was due on maturity.

The note provides for security over all the assets of the Company and was due within 60 days from the date of issuance. On June 21, 2020, the Lender granted the Company a 60-day extension on the note. The note was secured as part of the profit-sharing agreement with MTJR in order to finance the purchase of 1 million COVID19 antibody testing kits from South Korean diagnostic testing company PCL Inc., to be distributed in the North and South American markets. See Note 5.

On October 21, 2020, the Company signed a 90-day loan agreement with the lender for a loan of CAD $600,000 with 12% annual interest. The Company also repaid CAD $1,600,000 as partial payment against the US$7.7 million promissory note. At December 31, 2020, the Company has loan principal plus interest accrued of US$7,780,767 (CAD $9,906,472) and CAD $614,005 outstanding.

Subsequent to December 31, 2020, the Company issued 8,878,724 shares in settlement of US$3,095,302 (CAD $3,931,033) owed to Cambridge. At December 31, 2020 the loan is in default and the amount outstanding has been presented as a current liability.

Sulliden Mining Capital Inc. (“Sulliden”)

On May 29, 2020, the Company entered into a 90 day loan agreement with Sulliden and borrowed a total of $400,000 and US$75,000 ($100,043) from Sulliden with Interest accrued and calculated at 12% per annum. On August 17, 2020, the Company repaid the loan principal and interest totaling $408,000. The Company also received an extension of the outstanding loans until December 31, 2020.

On November 10, 2020, the Company borrowed an additional $1.5 million from Sulliden with interest accrued and calculated at 12% per annum with a six-month repayment term. As at December 31, 2020, loan principal and accrued interest totaling $1,629,355 remaining outstanding.

Deborah Battiston, CFO of the Company was the former CFO of Sulliden, and Stan Bharti, a former director of the Company, is the CEO and director of Suliden.

26

Medivolve Inc. (formerly QuestCap Inc.) Notes to the Consolidated Financial Statements For the year ended December 31, 2020 and 2019 (Expressed in Canadian dollars)

Aberdeen International Inc. (“Aberdeen”)

On November 10, 2020, the Company borrowed $500,000 from Aberdeen with Interest accrued and calculated at 12% per annum and a six-month repayment term. As at December 31. 2020, loan principal and accrued interest totaling $508,384 remained outstanding.

Stan Bharti, a former director of the Company, is the CEO and a director of Aberdeen .

Greenway Investments International Ltd. (“Greenway”)

From October 22, 2020 through November 20, 2020, the Company borrowed an aggregate of US$592,245 ($754,046) from Greenway with Interest accrued and calculated at 12% per annum and repayment terms that range from 90 days to one year. As at December 31. 2020, loan principal and accrued interest totaling US$609,603 ($776,147) remaining outstanding.

Subsequent to December 31, 2020, the Company issued 1,716,648 shares of the Company in settlement of US$625,877 ($789,658) owed to Greenway.

13. Leases

The following table reconciles the Company’s lease obligations and right of use assets.

Right of use asset		Premise lease
Balance, December 31, 2018 and 2019	$	-
Balance, January 1, 2020	$	-
Additions- lease commitments		10,941,321
Balance, December 31, 2020	$	10,941,321
Accumulated amortization
Balance, December 31, 2018 and 2019	$	-
Balance, January 1, 2020	$	-
Amortization		3,063,495
Balance, December 31, 2020	$	3,063,495
Net book Value as at:
December 31, 2018 and 2019	$	-
December 31, 2020	$	7,877,826
Lease liabilities		Premise lease
Balance, January 1, 2019 and 2020	$	-
Leases addition		10,138,487
Interest expense		(1,480)
Lease payments		(3,267,725)
Foreignexchangeloss		(94,053)
Total lease liabilities at December 31, 2020	$	6,775,229
Current portion of lease liabilities	$	6,775,229
Long-termportionof leaseliabilities		-
Total lease liabilities at December 31, 2020	$	6,775,229

27

Medivolve Inc. (formerly QuestCap Inc.) Notes to the Consolidated Financial Statements For the year ended December 31, 2020 and 2019 (Expressed in Canadian dollars)

14. Share capital

Authorized: unlimited without par value

Common shares issued

	NumberofShares	Amount
Balance, December 31, 2018 and 2019	34,190,109	$ 18,922,990
Shares issued through private placement	20,000,000	2,000,000
Shares issued for acquisitions (Notes 6 and 9)	73,000,000	15,817,557
Shares issued for debt arrangement (Note 12)	7,250,000	2,915,000
Units issued through private placement	15,000,000	3,000,000
Fair value of warrants issued	-	(1,227,889)
Broker warrants issued	-	(184,310)
Cost of issue allocated to shares	-	(53,066)
Options exercised	350,000	45,000
Valuationofoptions exercised	-	34,570
Balance, December 31, 2020	149,790,109	**$ 41,269,852 **

On January 8, 2020, the Company issued 1,250,000 common shares to a private company owned by Fred Leigh, a former director of the Company, to settle $125,000 of debt. As this was a transaction with a shareholder, no gain or loss was recorded as part of this debt settlement.

On March 23, 2020, the Company completed a non-brokered private placement financing of 20,000,000 common shares, at a price of $0.10 per common share, for gross proceeds of $2,000,000. At December 31, 2020, the Company wrote off the $100,000 uncollectible proceeds to bad debt from an un-related third party.

On April 23, 2020, the Company issued 6,000,000 common shares of the Company to an arms-length, third party lender in relation to a promissory note agreement. See Note 9.

On August 14 and August 31, 2020, the Company completed the first and second tranches of non-brokered private placement financings and issued a total of 15,000,000 units for gross proceeds of $3,000,000. Each unit consists of one common share of the Company and one common share purchase warrant. Each warrant entitles the holder thereof to acquire one share of the Company at a price of $0.25 for a period of 24 months following the closing date of the first and second tranche respectively. The Company also paid 7% finder fees and issued a total of 1,050,000 finder warrants. Each finder warrant entitles the holder thereof to acquire one share of the Company at a price of $0.25 for a period of 24 months following the closing date of the second tranche. Certain related parties subscribed a total of 9,387,500 shares for gross proceeds of $1,877,500.

The issue date fair value of the first and second tranche warrants and finder warrants were estimated at $608,031, $619,858 and $184,310, respectively using the Black Scholes option pricing model with the following assumptions: stock price $.0.195, $0.235 and $0.235; expected dividend yield of 0%; expected volatility of 160.7%, 164% and 164%, respectively (based on a blended historical volatility of the Company and industry averages); risk-free interest rate of 0.30%, 0.28% and 0.28% respectively and an expected life of 2 years. The Company paid a total issue cost of $237,376.

28

Medivolve Inc. (formerly QuestCap Inc.) Notes to the Consolidated Financial Statements For the year ended December 31, 2020 and 2019 (Expressed in Canadian dollars)

15. Share-based payments reserve

	Warrants Options
	Number of options Weighted average exercise price Estimated grant date fair value of options Number of warrants Weighted average exercise price Estimated Grant Date Fair Value of warrants Total
December 31, 2018	1,941,800 $0.25 520,999 $ - - $ - $ 520,999 $
Granted Expired	1,700,000 0.12 156,900 - - - 156,900 (618,000) 0.39 (277,685) - - - (277,685)
December 31, 2019	3,023,800 0.15 $ 400,214 $ - - $ - $ 400,214 $
Granted	12,220,000 0.20 2,107,109 16,050,000 0.25 1,412,199 3,519,308 (150,000) 0.19 (27,570) - - - (27,570) (350,000) 0.13 (34,570) - - - (34,570) - - - - - (158,004) (158,004)
Expired Exercised
Warrant issue costs
December 31, 2020	14,743,800 0.20 $ 2,445,183 $ 16,050,000 0.25 $ 1,254,195 $ 3,699,378 $

Stock options

The Company has a stock-option plan whereby the Company may grant to directors, officers, employees and consultants options to purchase shares of the Company. The plan provides for the issuance of stock options to acquire up to 10% of the Company's issued and outstanding capital. The plan is a rolling plan as the number of shares reserved for issuance pursuant to the grant of stock options will increase as the Company's issued and outstanding share capital increases. Options granted under the plan will be for a term not to exceed 5 years.

During the year ended December 31, 2020, the Company recorded expired unexercised stock options of $27,570 (December 31, 2019 - $277,685) to deficit.

As at December 31, 2020, the Company had stock options outstanding as follows:

Number outstanding Number exercisable Grant date Expirydate Exercise price($)	Fair value at grant date($) Grant date share price ($) Expected volatility Expected life (years) Expected dividend yield Risk-free interest rate
1,173,800 1,173,800 11-Oct-2016 11-Oct-2021 0.19 1,600,000 1,600,000 11-Oct-2019 11-Oct-2024 0.125 2,240,000 2,240,000 30-Mar-2020 30-Mar-2025 0.16 500,000 375,000 02-Apr-2020 02-Apr-2025 0.305 1,000,000 750,000 15-Apr-2020 15-Apr-2025 0.59 500,000 500,000 20-Apr-2020 20-Apr-2025 0.47 1,000,000 875,000 19-Jun-2020 19-Jun-2025 0.16 1,700,000 1,700,000 02-Jul-2020 02-Jul-2025 0.135 1,500,000 1,500,000 25-Aug-2020 25-Aug-2025 0.19 3,380,000 3,380,000 03-Dec-2020 03-Dec-2025 0.16 150,000 150,000 21-Dec-2020 21-Dec-2025 0.245	215,744 0.19 190.0% 5 0 0.76% 153,280 0.125 104.4% 5 0 1.52% 277,312 0.155 114.3% 5 0 0.62% 122,850 0.305 115.3% 5 0 0.59% 483,000 0.59 119.0% 5 0 0.44% 192,850 0.47 119.5% 5 0 0.44% 132,500 0.16 121.7% 5 0 0.38% 190,400 0.135 122.1% 5 0 0.38% 241,800 0.19 127.8% 5 0 0.40% 418,444 0.16 107.6% 5 0 0.46% 28,545 0.245 108.4% 5 0 0.44%
14,743,800 14,243,800	2,456,724

The weighted average life of the outstanding options at December 31, 2020 was 4.17 years.

Options issued by the Company are priced using the Black-Scholes option-pricing model. Where relevant, the expected life used in the model is adjusted based on managements’ best estimate for the effects of nontransferability, exercise restrictions (including the probability of meeting market conditions attached to the option), and behavioural considerations. Expected volatility is based on the historical share price volatility over the past 5 years. The expected life of the option is calculated based on the history of option exercises. The weighted average remaining contractual life of the options exercisable at September 30, 2020 was 4.17 years (December 31, 2019 – 3.5 years).

29

Medivolve Inc. (formerly QuestCap Inc.) Notes to the Consolidated Financial Statements For the year ended December 31, 2020 and 2019 (Expressed in Canadian dollars)

15. Share-based payments reserve (continued)

On March 30, 2020, the Company granted 2,490,000 stock options to certain directors, officers, and consultants of the Company. 1,990,000 of the stock options vested immediately and the remaining 500,000 stock options vest in four equal quarterly installments over a period of nine months, with the first installment vesting on the date of grant. The options have an estimated grant date fair value of $308,262 using the Black-Scholes option pricing model with the following assumptions: expected dividend yield of 0%; expected volatility of 114.3%; risk-free interest rate of 0.62%; and an expected average life of 5 years.

On April 2, 2020, the Company granted 500,000 stock options to a consultant of the Company. The stock options vest in four equal quarterly installments over a period of nine months, with the first installment vesting on the date of grant. The options have an estimated grant date fair value of $122,850 using the Black-Scholes option pricing model with the following assumptions: expected dividend yield of 0%; expected volatility of 115.3%; risk-free interest rate of 0.58%; and an expected average life of 5 years.

On April 15, 2020, the Company granted 1,000,000 stock options to certain consultants of the Company. The stock options vest in four equal quarterly installments over a period of nine months, with the first installment vesting on the date of grant. The options have an estimated grant date fair value of $483,000 using the Black-Scholes option pricing model with the following assumptions: expected dividend yield of 0%; expected volatility of 119.0%; risk-free interest rate of 0.44%; and an expected average life of 5 years.

On April 20, 2020, the Company granted 500,000 stock options to a consultant of the Company. The stock options vested immediately and have an estimated grant date fair value of $192,850 using the Black-Scholes option pricing model with the following assumptions: expected dividend yield of 0%; expected volatility of 119.5%; risk-free interest rate of 0.44%; and an expected average life of 5 years.

On June 19, 2020, the Company granted 1,000,000 stock options to certain consultants of the Company. 500,000 of the stock options vested immediately and the remaining 500,000 stock options in four equal quarterly installments over a period of nine months, with the first installment vesting on the date of grant. The options have an estimated grant date fair value of $132,500 using the Black-Scholes option pricing model with the following assumptions: expected dividend yield of 0%; expected volatility of 121.7%; risk-free interest rate of 0.38%; and an expected average life of 5 years.

On July 2, 2020, the Company granted 1,700,000 stock options to a consultant of the Company. The stock options vested immediately and have an estimated grant date fair value of $190,400 using the Black-Scholes option pricing model with the following assumptions: expected dividend yield of 0%; expected volatility of 122.1%; risk-free interest rate of 0.38%; and an expected average life of 5 years.

On August 25, 2020, the Company granted 1,500,000 stock options to a director and officer of the Company. The options will vest 50% in three months and 50% in six months from the date of grant. The options have an estimated grant date fair value of $241,800 using the Black-Scholes option pricing model with the following assumptions: expected dividend yield of 0%; expected volatility of 127.8%; risk-free interest rate of 0.40%; and an expected average life of 5 years.

On December 3, 2020, the Company granted 3,380,000 stock options to certain directors, officers, and consultants of the Company. The stock options vested immediately and have an estimated grant date fair value of $418,444 using the Black-Scholes option pricing model with the following assumptions: expected dividend yield of 0%; expected volatility of 107.6%; risk-free interest rate of 0.46%; and an expected average life of 5 years.

On December 21, 2020, the Company granted 150,000 stock options to a consultant of the Company. The stock options vested immediately and have an estimated grant date fair value of $28,545 using the Black-Scholes option pricing model with the following assumptions: expected dividend yield of 0%; expected volatility of 108.4%; risk-free interest rate of 0.44%; and an expected average life of 5 years.

30

Medivolve Inc. (formerly QuestCap Inc.) Notes to the Consolidated Financial Statements For the year ended December 31, 2020 and 2019 (Expressed in Canadian dollars)

15. Share-based payments reserve (continued)

Warrants

As at December 31, 2020, the Company had share purchase warrants outstanding as follows:

	Number					Grant date		Expected	Expected	Risk-free
	outstanding &			Exercise	Fair value at	share price	Expected	life	dividend	interest
	exercisable	Grant date	Expirydate	price($)	grant date($)	($)	volatility	(years)	yield	rate
Warrants	7,755,500	14-Aug-2020	14-Aug-2022	0.25	608,031	0.195	161%	2	0	0.30%
Warrants	7,244,500	31-Aug-2020	31-Aug-2022	0.25	619,858	0.235	164%	2	0	0.28%
Broker warrants	1,050,000	31-Aug-2020	31-Aug-2022	0.25	184,310	0.235	164%	2	0	0.28%
Warrant issue costs					(158,004)
	16,050,000				1,254,195

The weighted average life of the outstanding warrants at December 31, 2020 was 1.64 years.

16. Capital management

The Company considers its capital structure to consist of share capital, share purchase options, share purchase warrants and loans. The Company manages its capital structure and makes adjustments based on the funds available to support its capital management objectives:

• a) to allow the Company to respond to changes in economic and/or marketplace conditions by maintaining the Company’s ability to purchase new investments;

• b) to give shareholders sustained growth in value by increasing shareholders’ equity; while

• c) taking a conservative approach towards financial leverage and management of financial risks

The management and board of directors of the Company review its capital management approach on an ongoing basis and believe it reflects a reasonable approach given the relative size of the Company’s assets. The Company is not subject to externally imposed capital requirements other than those of the NEO Exchange.

31

Medivolve Inc. (formerly QuestCap Inc.) Notes to the Consolidated Financial Statements For the year ended December 31, 2020 and 2019 (Expressed in Canadian dollars)

17. Financial instruments

Financial assets and financial liabilities at December 31, 2020 and 2019 are as follows:

			Assets & liabilities	Assets & liabilities
	Assets & liabilities		at fair value through
	at amortized cost		profit and loss		Total
December 31, 2020
Cash	$	851,409	$	-	$ 851,409
Amounts receivable		2,229,244		-	2,229,244
Public investments		-		403,563	403,563
Private investments		-		3,162,369	3,162,369
Note and loans receivable		548,605		-	548,605
Accounts payable and accrued liabilities		(6,674,882)		-	(6,674,882)
Lease liabilities		(6,775,229)		-	(6,775,229)
Loans payable		(13,434,363)		-	(13,434,363)
Investment payable		(2,260,774)			(2,260,774)
December 31, 2019
Cash	$	976	$	-	$ 976
Amounts receivable		313,695		-	313,695
Public investments		-		386,036	386,036
Private investments		-		380,000	380,000
Note and loans receivable		693,209		308,721	1,001,930
Accounts payable and accruedliabilities		(315,996)		-	(315,996)

A discussion of the Company’s use of financial instruments and their associated risks is provided below:

Credit risk

Credit risk is the risk associated with the inability of a third party to fulfill its payment obligations. The Company is exposed to the risk that third parties that owe it money or securities will not perform their underlying obligations. The total carrying value of these financial instruments at December 31, 2020 was $3,116,209 (December 31, 2019 - $1,315,625). The Company has estimated $335,000 for credit losses.

Liquidity risk

Liquidity risk is the risk that the Company will not have sufficient cash resources to meet its financial obligations as they come due. The Company’s liquidity and operating results may be adversely affected if the Company’s access to the capital markets is hindered, whether as a result of a downturn in stock market conditions generally or related to matters specific to the Company. In addition, some of the investments the Company holds are lightly traded public corporations or not publicly traded and may not be easily liquidated.

There can be no assurances that sufficient funding, including adequate financing, will be available to cover the general and administrative expenses necessary for the maintenance of a public company.

The following table shows the Company’s sources of liquidity by asset as at December 31, 2020 and 2019:

32

Medivolve Inc. (formerly QuestCap Inc.) Notes to the Consolidated Financial Statements For the year ended December 31, 2020 and 2019 (Expressed in Canadian dollars)

17. Financial instruments (continued)

Liquidity risk (continued)

December 31, 2020		Total		Less than 1 year		1-3 years
Cash and cash equivalents	$	851,409	$	851,409	$	-
Inventory		232,786		232,786		-
Note and loans receivable		548,605		548,605		-
Amounts receivable		2,312,728		2,312,728		-
Prepaid expenses		330,682		330,682		-
Public investments		403,563		403,563		-
Private investments		3,162,369				3,162,369
Royalty interest		500,000		-		500,000
Totalassets- December31,2020	$	8,342,142	$	4,679,773	$	3,662,369
December 31, 2019		Total		Less than 1 year		1-3 years
Cash	$	976	$	976	$	-
Note and loans receivable		1,001,930		693,209		308,721
Amounts receivable		313,695		313,695		-
Prepaid expenses		217,837		217,837		-
Public investments		386,036		386,036		-
Private investments		380,000		380,000		-
Totalassets- December31,2019	$	2,300,474	$	1,991,753	$	308,721

Market risk

a) Currency risk

Currency risk is the risk that the fair value of, or future cash flows from, the Company’s financial instruments will fluctuate because of changes in foreign exchange rates. The Company operates in Canada and the USA and its functional currency is the Canadian dollar. The Company’s foreign currency risk arises primarily with respect to the United States dollar, while the functional currency of Collection Sites is the US dollar. Management believes the foreign exchange risk derived from currency conversions is negligible and therefore does not engage in hedging activities to mitigate this risk. The Company reduces its currency risk by maintaining minimal cash balances held in foreign currency.

As at December 31, 2020, the Company had the following financial assets and liabilities denominated in foreign currencies:

foreign currencies:
December 31, 2020		U.S. dollars		COP
Cash & cash equivalent		$ 148,940	$	-
Advances		16,950
Loans Receivable		403,957		-
Trade and other payables		(609,464)		(174,231,684)
Loan payable		(7,855,767)		-
Other liabilities		(1,566,870)
	$(9,462,254)		$	(174,231,684)
December 31, 2019		U.S. dollars
Loans Receivable	$	525,759
Trade and otherpayables		(501)
	$	525,258

33

Medivolve Inc. (formerly QuestCap Inc.) Notes to the Consolidated Financial Statements For the year ended December 31, 2020 and 2019 (Expressed in Canadian dollars)

17. Financial instruments (continued)

Market risk

• a) Currency risk

• A 10% increase in the value of the Canadian dollar against all foreign currencies in which the Company held financial instruments as of December 31, 2020 would result in an estimated increase (decrease) in income of approximately $1,211,200 (December 31, 2019 - $62,000).

• b) Interest rate risk A 10% increase in interest rates based on the balance of cash at December 31, 2020, would result in a increase of $51,000 (December 31, 2019 - $100) in annual interest income.

• c) Price and concentration risk

The Company is exposed to market risk for unfavourable market conditions that could result in dispositions of inventory at unfavourable prices.

Fair value hierarchy

The three levels of the fair value hierarchy with respect to required disclosures about the inputs to fair value measurements are:

• Level 1- Unadjusted quoted prices in active markets for identical assets or liabilities;

• Level 2- Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and

• Level 3- Inputs that are not based on observable market data.

The following table sets forth the Company’s financial assets and liabilities measured at fair value by level within the fair value hierarchy as at December 31, 2020 and 2019:

	Level 1			Level 2			Level 3		Total
Public investments	$ 401,842		$	1,721		$	-	$	403,563
Privateinvestments		-		-			3,162,369		3,162,369
Total	$401,842		$	1,721		$	3,162,369	$	3,565,932
As at December 31, 2019
Public investments	$	-	$	386,036	$		-	$	386,036
Private investments		-		-			380,000		380,000
Loan receivable		-		308,721			-		308,721
Total	$	-	$	694,757	$		380,000	$	1,074,757

Level 1 Hierarchy

On May 1, 2020, the 5,740,605 common shares of Sulliden Mining Capital were released from escrow, and therefore the full value of the investment $373,139 was moved from Level 2 to Level 1 of the fair value hierarchy.

Level 2 Hierarchy

At December 31, 2020, the 172,071 common shares of Last Mile Holdings Ltd. (formerly OjO Electric Corp.) were held in escrow, and therefore the full value of the investment $1,721 has been recorded at Level 2 of the fair value hierarchy.

Level 3 Hierarchy

Within Level 3, the Company includes private company investments that are not quoted on an exchange. The key assumptions used in the valuation of these investments include (but are not limited to) the value at which a recent financing was done by the investee, company-specific information, trends in general market conditions and the share performance of comparable publicly traded companies.

34

Medivolve Inc. (formerly QuestCap Inc.) Notes to the Consolidated Financial Statements For the year ended December 31, 2020 and 2019 (Expressed in Canadian dollars)

17. Financial instruments (continued)

Fair value hierarchy (continued)

Level 3 Hierarchy (continued)

As valuations of investments for which market quotations are not readily available are inherently uncertain, may fluctuate within short periods of time and are based on estimates, determination of fair value may differ materially from the values that would have resulted if a ready market existed for the investments. Such changes may have a significant impact on the Company’s financial condition or operating results.

The following table presents the fair value, categorized by key valuation techniques and the unobservable inputs used within Level 3 as at December 31, 2020 and 2019:

					Range of
				Significant	significant
			Valuation	unobservable	unobservable
Description		Fair vaue	technique	input(s)	input(s)
December 31, 2020
Amino Therapeutics Inc.	$	3,162,367	Recent transaction	Marketability of shares	0% discount
Athletic & Health Solutions Inc.		1	Recoverable amount	-	-
Glenco Medical		-	Recoverable amount	-	-
Eco Capital Growth Corp.		1	Recoverable amount	-	-
Latin-Canada Pharma Inc.		-	Recoverable amount	-	-
	$	3,162,369
December 31, 2019
Varianz Corp.	$	380,000	Recent financing	Marketability of shares	0% discount
	$	380,000

Amino Therapeutics Inc. (“Amino”)

Management of the Company engaged an independent valuation firm to prepare a valuation of the Company’s investment in Amino. The valuation firm prepared the valuation based on the recent financing of Amino shares and Black- Scholes method to value the underlying warrants. See Note 6 to see more details of the transaction. The only significant observable input used in this valuation is the estimated share price of Amino. As at December 31, 2020, a, 5% increase/decrease in the Amino share price would result in an increase/decrease in the fair value estimate of Amino of approximately $290,000.

Athletic and Health Solutions Inc. (“A&H”)

The Company invested in A&H for 6 million shares of the Company in April 2020 with an estimated fair value of $3,000,000. The Company has wrote down the fair value of the investment at December 31, 2020 to reflect the sale of A&H to an arm’s-length company for $1 subsequent to the year-end.

Glenco Medical (“Glenco”)

The Company invested in Glenco for 12 million shares of the Company in June 2020 with an estimated fair value of $2,220,000. On December 31, 2020 the Company had written down the investment in Glenco due to managements expectations of future activity. Should market conditions improve and the fair value of investments increase, the asset will be written up at that time.

Eco Capital Growth Corp. (“Eco”)

The Company invested in Eco for 8 million shares of the Company in March 2020 with an estimated fair value at $1,240,000. The Company has written down the fair value of the investment at December 31, 2020 to reflect the sale of A&H to an arm’s-length Company for $1 subsequent to the year-end.

35

Medivolve Inc. (formerly QuestCap Inc.) Notes to the Consolidated Financial Statements For the year ended December 31, 2020 and 2019 (Expressed in Canadian dollars)

17. Financial instruments (continued)

Fair value hierarchy (continued)

Level 3 Hierarchy (continued)

Latin-Canada Pharma Inc. (“LCP”)

The Company invested in LCP for 12 million shares of the Company in July 2020 with an estimated fair value of $2,040,000. On December 31, 2020 the Company had written down the investment in LCP due to managements expectation of future activity. Should market conditions improve and the fair value of investments increase, the asset will be written up at that time.

Varianz Corp.

The valuation at December 31, 2019 was based on the subscription receipt price of $0.03 per share. Management has determined that there are no reasonable possible alternative assumptions that would change the fair value significantly as at December 31, 2019. A 10% change in fair value would result in a change in income of approximately $38,000 at December 31, 2019. Had the Company applied a marketability discount of 5%, it would have resulted in a corresponding decrease of approximately $19,000 in income.

While the changes in unobservable inputs by set percentages illustrate the overall effect of those changes, the significance of the impact and the range of reasonably possible alternative assumptions may differ significantly between investments, given their different terms and circumstances.

18. Related party transactions and balances

Refer to Notes 3, 6, 12, 14, 15 and 21

During the years ended December 31, 2020 and 2019, the Company entered into the following transactions in the ordinary course of business with related parties from an accounting perspective that are not subsidiaries of the Company.

Forbes & Manhattan, Inc. 2227929 Ontario Inc.	2020 2019 Purchase of goods and services Years ended December 31,
	200,000 $ 30,000 $ 360,000 $ 311,700 $

Mr. Stan Bharti is the Executive Chairman of Forbes and Manhattan Inc. (“Forbes”). The Company is part of the Forbes Group of Companies and continues to receive the benefits of such membership, including access to various professionals, and strategic advice from the Forbes Board of Advisors. An administration fee of $10,000 per month through April 2019 and $25,000 per month from May 2019 was charged by Forbes pursuant to a consulting agreement. From April 2019 through April 2020, Mr. Bharti served as President, CEO, and director of the Company. As a result, amounts paid to Forbes from April 1, 2019 to April 30, 2020 are included as part of compensation of key management, directors and officers. As at December 31, 2020, receivables included $125,000 (December 31, 2019: $210,195) owing from Forbes, and payables included $Nil (December 31, 2019: $Nil) owing to Mr. Stan Bharti. These receivables and payables are unsecured, non-interest bearing and due on demand.

The Company shares office space with other corporations who may have common officers and directors. The costs associated with the use of this space, including the provision of office equipment, supplies, and certain other services are administered by 2227929 Ontario Inc., to whom the Company pays a monthly fee. For the year ended December 31, 2020, the Company was charged $360,000 or these services (2019: $311,700). In addition, prepaid expenses included $Nil (December 31, 2019 - $171,200) advance paid to 2227929 Ontario Inc. Fred Leigh, a former director of the Company, is a director of 2227929 Ontario Inc. As at December 31, 2020, payables included $95,642 (December 31, 2019: $21,611) owing to 2227929 Ontario Inc. These payables are unsecured, non-interest bearing and due on demand.

36

Medivolve Inc. (formerly QuestCap Inc.) Notes to the Consolidated Financial Statements For the year ended December 31, 2020 and 2019 (Expressed in Canadian dollars)

18. Related party transactions and balances (continued)

At December 31, 2020, the Company had an amount receivable of $10,706 from Aberdeen International Inc. (December 31, 2019: $103,500). The receivable is unsecured, non-interest bearing and due on demand. Stan Bharti, a former director and officer of the Company, is a director and officer of Aberdeen. Wen Ye is a common director of both the Company and Aberdeen.

Compensation of Key Management, Directors and Officers

The remuneration of directors and other members of key management personnel during the years ended December 31, 2020 and 2019 were as follows:

Short-term benefits Share-based payments	2020 2019 Years ended December 31,
	562,730 $ 501,937 $ 595,559 $ 118,580 $

In accordance with IAS 24, key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company directly or indirectly, including any directors (executive and non-executive) of the Company.

During the year ended December 31, 2020, the Company granted a total of 4,357,500 stock options to key management, directors, and officers of the Company (2019: 1,300,000 options to a director of the Company).

19. Commitments and contingencies

Management contracts

The Company is party to certain management contracts. These contracts contain clauses requiring additional payments of up to approximately $1,327,000 to be made upon the occurrence of certain events such as a change of control. As a triggering event has not taken place, the contingent payments have not been reflected in these consolidated financial statements. Additional minimum management contract commitments remaining under these contracts approximate $657,000 due within one year.

Legal Proceedings

The Company is from time to time named in various legal proceedings. The Company has not estimated or accrued any amounts related to such proceedings as they are believed to be without merit.

See Note 5 for details.

37

Medivolve Inc. (formerly QuestCap Inc.) Notes to the Consolidated Financial Statements For the year ended December 31, 2020 and 2019 (Expressed in Canadian dollars)

20. Income taxes

a) Provision for income taxes

The reconciliation of the combined Canadian federal and provincial statutory income tax rate of 26.5% (2019: 26.5%) to the effective tax rate is as of:

26.5%) to the effective tax rate is as of:
	2020 2019 $ $
(Loss) before income taxes	(37,672,076) (2,718,245)
Expected income tax recovery based on statutory rate Adjustment to expected income tax recovery:	(9,864,000) (732,000)
Share based compensation Other Changeinunrecorded deferred taxasset	558,000 (42,000)
	(1,000) 25,000
	9,307,000 749,000
Deferredincome taxprovision(recovery)	- -

b) Deferred income taxes

Deferred income tax assets have not been recognized in respect of the following deductible temporary differences:

	2020	2019
	$	$
Non-capital loss carry-forwards	33,337,000	9,937,000
Share issue costs	3,995,000	41,000
Mineral property costs	523,000	380,000
Unrealized losses on marketable securities	9,108,000	-
Capital loss carry-forwards	6,013,000	6,013,000
Othertemporary differences	26,000
	53,002,000	16,371,000

Deferred tax assets have not been recognized in respect of these items because it is not probable that future taxable profit will be available against which the Company can use the benefits.

The Canadian tax losses expire from 2027 to 2040. The other temporary differences do not expire under current legislation.

Year of expiry	Amount ($)
2027	89,000
2028	777,000
2029	1,038,000
2031	859,000
2032	706,000
2033	611,000
2034	1,633,000
2035	984,000
2036	434,000
2038	623,000
2039	2,183,000
2040	20,643,000
	30,580,000

38

Medivolve Inc. (formerly QuestCap Inc.) Notes to the Consolidated Financial Statements For the year ended December 31, 2020 and 2019 (Expressed in Canadian dollars)

21. Segment information

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Company’s other components. Operating companies may be aggregated into a reportable segment based on the nature of the products and services, production process, customer base, distribution model and regulatory environment at the operating companies, as well as key financial metrics such as gross margin and projected long-term revenue growth. At December 31, 2020 the Company operates only one reportable segment, which is running the COVID Testing facilities across United States Of America. Prior to October 15, 2020 the Company was an investment entity. The following is a summary of the Company’s geographical information:

	Canada	United states	Total
For the year ended December 31, 2020
Revenue	2,697,127	7,037,802	9,734,929
Non- current assets (as at December 31, 2020)	6,662,369	8,546,604	15,208,973
For the year ended December 31, 2019
Revenue	-	-	-
Non- current assets (as at December 31, 2019)	380,000	-	380,000

22. Subsequent events

On January 26, 2021 the Company closed a private placement of an aggregate of 20,000,000 units at a price per unit of $0.25 for aggregate gross proceeds to the Company of $5,000,000. Canaccord Genuity Corp. acted as the sole lead underwriter and sole bookrunner for the Offering. Each unit consists of one common share of the Company and onehalf of one common share purchase warrant. Each warrant entitles the holder thereof to purchase one Common Share at an exercise price of $0.40 for a period of 24 months from the date hereof, subject to an acceleration right exercisable by the Company if, at any time following the date that is four months and one day from the closing date, the daily volume weighted average trading price of the Company's Common Shares on the NEO Exchange is greater than $0.80 for the preceding 10 consecutive trading days. As consideration for the services provided by Canaccord in connection with the Offering, Canaccord received (i) a cash commission equal to 6.5% of the gross proceeds of the offering (other than from the issue and sale of the Units to certain purchasers on a president's list, for which a 3.0% cash commission was paid), (ii) a corporate finance fee equal to 276,800 units, and (iii) 1,160,000 compensation warrants. Each Compensation Warrant shall entitle the holder thereof to acquire one Unit at the Issue Price for a period of 24 months from the date hereof.

See Notes 7,11,12

Subsequent to December 31, 2020, 3,752,500 stock options and 540,000 share purchase warrants were exercised for total gross proceeds of $711,088.

Subsequent to December 31, 2020, the Company granted 500,000 stock options to a director to purchase shares of the Company at $0.53 until January 29, 2026. The options vest in four equal quarterly installments over a period of nine months.

Subsequent to December 31, 2020, the Company granted 3,450,000 stock options to certain director and officers, consultants and employees to purchase shares of the Company at $0.56 per share until February 1, 2026. These options vest immediately

On March 16, 2021, (the Company announced the signing of a binding Letter of Intent (LOI) to acquire a 100% equity interest in Modern Rx LLC (“Modern”), a Las Vegas based pharmacy. This pharmacy is expected to serve as an important component of Medivolve’s telehealth strategy, where Collection Sites telehealth patients will be able to have their prescription filled directly through the pharmacy’s operating license

39

Medivolve Inc. (formerly QuestCap Inc.) Notes to the Consolidated Financial Statements For the year ended December 31, 2020 and 2019 (Expressed in Canadian dollars)

22. Subsequent events (continued)

Medivolve will acquire a 100% equity interest in Modern from the shareholders of the company. As consideration for the acquisition of a 100% equity interest in Modern, Medivolve shall pay to the Modern shareholders: (i) cash consideration of US$100,000; and (ii) one million common shares of Medivolve. The completion of the transaction to acquire 100% of Modern is subject to customary closing conditions, including due diligence to the satisfaction of Medivolve, the parties entering a definitive agreement and NEO Stock Exchange approval. No finder fees are payable in connection with, and no change of control of Medivolve will result from, the transaction.

On March 2, 2021 Medivolve also announced that it entered into a definitive agreement and subsequently closed the transaction to acquire 100% of Noble Bioscience Corp. (“Noble Bioscience”), first announced. Medivolve issued a total of 12.5 million common shares to the shareholders of Noble Bioscience, in exchange for a 100% interest in Noble Bioscience. No finder fees were paid connection with the transaction.

40