Medivolve Inc. - Management Reports 2021

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(formerly QuestCap Inc.)

Management’s Discussion and Analysis For the year ended December 31, 2020

Introduction

This Management’s Discussion and Analysis (“MD&A”) of financial results and related data of Medivolve Inc. (“Medivolve” or the “Company”) is intended to complement and supplement the audited consolidated financial statements ( the “Financial Statements”) for the year ended December 31, 2020. This MD&A should be read in conjunction with the annual audited consolidated financial statements. The Company’s Financial Statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. Except as otherwise disclosed, all dollar figures in this report are stated in Canadian dollars. Additional information relevant to the Company can be found on the SEDAR website at www.sedar.com.

The commentary is current to March 31, 2021 unless otherwise indicated. References to the 1st, 2nd, 3rd and 4th quarters of 2020 or Q1-2020, Q2-2020, Q3-2020 and Q4-2020, and the 1st, 2nd, 3rd and 4th quarters of 2019 or Q1-2019, Q2-2019, Q3-2019 and Q4-2019 mean the three months ended March 31, June 30, September 30 and December 31, 2020 and 2019 respectively.

The reader should be aware that historical results are not necessarily indicative of future performance.

On October 15, 2020, the Company up-listed to the NEO Exchange (“NEO”) trading under the symbol “QSC”, concurrent with transitioning from an investment issuer to a single purpose medical company. On January 29, 2020, the Company changed its name to MediVolve in conjunction with its change of business and its shares began trading under the new ticker “MEDV” on January 7, 2021. The Company is a reporting issuer in the Provinces of Alberta, British Columbia and Ontario.

Historically, the Company’s common shares commenced trading on the TSX Venture Exchange (“TSXV”) on November 16, 2009 under the symbol “CUO.V” and prior to that, traded on the Canadian National Stock Exchange. On March 19, 2019, the common shares of the Company were halted from trading on the TSXV as a result of an announcement of a proposed Change of Business to an investment issuer. The Company completed the change of business to an investment issuer under the rules of the Canadian Securities Exchange (“CSE”) on September 4, 2019. The Company’s common shares commenced trading on the CSE under the symbol “QSC” on September 5, 2019 and were delisted from the TSX Venture Exchange effective August 13, 2019. The Company announced a name change from “Copper One Inc.” to “QuestCap Inc.”, following approval by the Company’s shareholders on September 25, 2019. As noted above the Company up-listed to the NEO in conjunction with its change of business to a single purpose medical company and began trading under the ticker symbol MEDV on January 7, 2021

- Cautionary Note Regarding Forward Looking Statements

Except for statements of historical fact relating to Medivolve, certain information contained herein constitutes forward-looking information under Canadian securities legislation. Generally, forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. The information and statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information and statements. Such statements reflect the Company’s current views with respect to certain events, and are subject to certain risks, uncertainties and assumptions. Many factors could cause the Company’s actual results, performance, or achievements to vary from those described in this MD&A. Should one or more of these risks or uncertainties materialize, or should assumptions underlying forward-looking statements prove incorrect, actual results may vary materially from those described in this MD&A as intended, planned, anticipated, believed, estimated, or expected. With respect to the forward-looking statements contained herein, although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements, because no

assurance can be given that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to: the Company’s lack of operating history as an investment company; the volatility of the market price of the common shares of the Company; risks relating to the trading price of the common shares of the Company relative to net asset value; risks relating to available investment opportunities and competition for investments; the volatility of the share prices of investments in public companies; the dependence on management and directors; risks relating to the COVID-19 pandemic; risks relating to additional funding requirements and the Company’s ability to access additional funds; potential conflicts of interest and potential transaction and legal risks, conflict of interests and litigation risks, as more particularly described under the heading “ Risk Factors ” in this MD&A. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company does not undertake to update any forward-looking statements, except in accordance with applicable securities laws.

Description of Business as at December 31, 2020

Medivolve Inc. is a publicly listed company on NEO trading under the symbol “MEDV”. Effective October 15, 2020, the Company has commenced trading on the NEO Exchange under the symbol “QSC” concurrent with its transition to a single purpose medical company. The Company changed its name to MediVolve Inc. in conjunction with its change of business and its shares traded under new ticker “MEDV” on NEO commencing January 7, 2021.

The Company’s consolidated financial statements have been prepared in accordance with IFRS applicable to a going concern. Accordingly, they do not give effect to adjustments that would be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and liquidate its liabilities and commitments in other than the normal course of business and at amounts different from those in the accompanying consolidated financial statements.

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.

Company Outlook and Recent Developments

New CEO and Strategies

On April 29, 2020, the Company appointed Douglas Sommerville as Chief Executive Officer and director, following the resignations of Neil Said and Stan Bharti.

As a veteran leader in the North American medical, pharmaceutical and technology industries, Mr. Sommerville brings a wealth of experience to the Company and enhances its vision of bringing together industry experts to lead its mission of socially conscious investing.

Mr. Sommerville’s former roles include Head of Country for Canada for Teva Canada, a subsidiary of Teva Pharmaceutical Industries Ltd. (“Teva”), the world’s leading provider of generic medicines. In this role, Mr. Sommerville was responsible for Teva’s third largest global subsidiary, with sales

exceeding $1.3 billion. He led all aspects of the company’s commercial, distribution, demand planning and customer operations - aligning and coordinating all company functions, production, supply chain, regulatory and global support functions. Mr. Sommerville was also the Chairman of the Canadian Generic Pharmaceutical Association up until his retirement from Teva Canada in 2018.

Prior to his tenure at Teva Canada, Mr. Sommerville was Global Vice President, Infusion Systems with Baxter Healthcare International (“Baxter”), one of the world’s largest medical, pharmaceutical and technology companies. In his role, he was responsible for the company’s infusion pumping devices and intravenous administration sets worldwide, as well as pain management and ambulatory infusion devices, working with Baxter’s product development, regional sales and marketing teams globally.

On July 6, 2020, the Company appointed Wen Ye as a director of the Company, following the resignation of Scott Moore. Ms. Ye is a CPA, CGA and holds a Bachelor of Commerce degree from Laurentian University. Ms. Ye brings over 17 years of corporate and finance management experience in the public mining, securities, and logistics sectors.

On January 14, 2020, Medivolve announced that Dr. Beverly Richardson has joined the Board of Directors. She will act as an independent director and is replacing outgoing Director Danny Callow. Dr. Beverley J. Richardson is a renowned psychotherapeutic practitioner whose collaborative efforts and clinical influence are reflected in some of the most compelling and effective addiction and behavioural health programs in North America which include: Sierra Tucson (Arizona), the Meadows (Arizona) and Betty Ford Centre (California). She has a Doctorate Degree in Psychology and is a B.C. Registered Clinical Counsellor, Internationally Certified Eating Disorder Specialist, and EMDR Level II Trauma Therapist. Dr. Richardson has integrated her extensive experience in health and wellness with her entrepreneurial spirit to form her nutraceutical and bioscience research and development enterprises.

While an investment issuer under the name of QuestCap and prior to becoming a single purpose medical company and embarking on its current Telehealth focus, Medivolve had focused its investment strategy in three areas:

MedQuest

The COVID-19 pandemic is threatening societies across the world. This virus has created serious challenges but also new opportunities to bring life-saving technology and therapies to market. MedQuest is pursuing numerous investments in health sciences to help advance and develop products used to detect, treat, and overcome COVID-19. MedQuest is looking to invest in opportunities that will: improve testing around the world, source effective therapies, and develop a lasting cure.

ClimateQuest

Anthropogenic climate change is threatening to drastically alter the environments we inhabit and the way we live. In order to prevent further degradation of our planet, it is imperative that mankind adopt new technologies and systems that limit, eliminate, or remove greenhouse gas emissions. The crisis is understood, and numerous organizations and entrepreneurs have produced powerful innovations but lack the resources to commercialize them. Our experienced team will source, review and identify meaningful investment opportunities in sustainable initiatives that have the potential to produce tangible environmental impacts.

TechQuest

Disruptive innovation changed transportation from horseback to cars, communication from landlines to cellphones, and entertainment from cable to streaming video. TechQuest aims to continue human evolution by sourcing and financing ground-breaking technology, procedures, and platforms. We will work with innovators and developers to fund their passions and help turn them into reality. Partnering with visionaries at the seed-stage has the potential to create exceptional value for TechQuest investors.

Subsequently the Company decided to redeploy its resources to become a single purpose medical company and as discussed above.

Effective October 15, 2020, the Company up-listed to the NEO Exchange (“NEO”) concurrent with the transition to a single purpose company from an investment issuer, redeploying its assets and resources to be a single purpose medical company. The NEO is considered a senior Canadian exchange akin to the Toronto Stock Exchange, however it offers issuers and investors enhanced liquidity, greater visibility, and lower fees. In conjunction with this uplisting, after listing on the Company arranged for the delisting from the Canadian Stock Exchange (CSE), effective the close of trading on October 14, 2020. The Company continued to trade under the symbol “QSC” until December 29 when we changed our name to “Medivolve Inc.” (“Medivolve”) in conjunction with its transition to a single purpose medical company. Trading of the Company’s shares under the new name and new ticker “MEDV” on the NEO commenced on January 7, 2021.

Recent Developments

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, a Las Vegas based pharmacy from shareholders of Modern. 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 presecription filled directly through the pharmacy’s operating license. As Medivolve’s telehealth program launches, we anticipate the additional services offered through Modern Rx, and its network of pharmacy relationships nationally, will be an integral component of the telehealth solution.

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 (1) million common shares of Medivolve. The completion of the transaction to acquire 100% of Modern Rx LLC 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, the Company announced the launch of an operating model with Besser Brands in the state of Florida. Under this framework Besser Brands is initially operating 9 Collection Sites locations under the Collection Sites branding, where they are responsible for all related operating costs and systems management. In return for using the Collection Sites name, Besser Brands will pay a royalty on all tests sold. Further, Medivolve has entered into a definitive agreement and subsequently closed the transaction to acquire 100% of Noble Bioscience Corp.

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 on February 2, 2021. Medivolve issued a total of 12.5 million Medivolve common shares to the shareholders of Noble Bioscience, in exchange for a 100% interest in Noble Bioscience. No finder fees were paid connection with, and no change of control of Medivolve resulted from, the transaction. Noble Bioscience holds the agency rights to Nuturell’s Surface Shield technology in the United States, Canada and Caribbean countries. Nuturell’s non-toxic silver surface shield technology is a COVID-19 disinfectant that converts into a protective shield when air dry, killing the coronavirus among other pathogens for up to 90 days after only ~30 seconds of contact. Nuturell’s Surface Shield technology was created to overcome the limitations of standard harsh chemical disinfectants and cleaning agents that suffer from various constraints such as their harmfulness, corrosive nature and bacterial resistance. Nuturell’s surface shield has a broad killing range of pathogens including the human coronavirus in only ~30 seconds of contact and is considered a “green” surface shield. Silver has been well-known as an antimicrobial agent and for its medicinal importance due to the remarkable pathogen killing properties.

On February 18, 2021, the Company announced the launch of an investor marketing campaign to increase awareness for the Company’s strong operational results and its strategic decision to enter the telehealth and remote patient monitoring market. The Company has allocated this budget for digital marketing given current state of affairs; the Company cannot attend tradeshows, sponsor events, or travel for roadshows in the same capacity it could pre-pandemic, and hence, has allocated these budgets to digital efforts to ensure the company does not suffer due to lack of market awareness. The awareness campaign will include marketing services from the below groups at the set-out terms.

EMC Marketing Services

Medivolve has entered into an agreement for electronic media and webcast services, design, development and dissemination services with Emerging Markets Consulting LLC (EMC), with respect to EMC providing investor relation services to the Company. Effective February 24, 2021, the EMC agreement has an initial term of 90 days, wherein the Company will pay EMC a non-refundable fee of US$250,000. EMC is a syndicate of investor relations consultants consisting of stockbrokers, investment bankers, fund managers and institutions that actively seek opportunities in the microcap and small-cap equity markets. Neither EMC nor any of its principals currently own any securities, directly or indirectly, of the Company or have any intention to acquire any securities of the company. Based in Orlando, Florida, Emerging Markets Consulting, LLC (EMC) brings over 40 years combined experience in the investor relations industry. EMC is an international investor relations firm with affiliates around the world. EMC is relationship-driven and resultsoriented with the goal of seeking attractive emerging companies and concentrating its resources and efforts to serve a limited number of high-quality clients. For more information, visit EMC’s website at www.emergingmarketsllc.com.

Winning Media Marketing Services

Medivolve has entered into an agreement for strategic digital media services, marketing and data analytics services with Winning Media LLC (WM). Effective February 8, 2021, the WM agreement has an initial term of 90 days, wherein the Company will pay WM a non-refundable fee of $250,000. The Company can terminate the WM agreement at any time upon 30 days of notice. Neither WM nor any of its principals currently own any securities, directly or indirectly, of the company or have any intention to acquire any securities of the company. Winning Media (WM) in Houston, TX. brings over 20 years of experience in the online advertising and investor relations industry. WM provides strategic digital media services, marketing, and data analytics services. Today WM is the industry leader and most in demand firms in the online financial advertising space.

Amherst Baer Marketing Services

Medivolve has retained Amherst Baer Consultancy Corp. (ABCC) of Langley, B.C., as investor relations consultant to prepare a marketing campaign for the Company. ABCC will be paid $70,000 a month for a three-month contract. The contract can be terminated at any time on 30 days of notice, and is effective as of February 6, 2021. ABCC operates out of North Vancouver, B.C., and is owned by Lisa Little. ABCC provides digital media marketing services for issuers and non-issuers. Neither ABCC nor any representatives of ABCC own any securities of the Company, directly or indirectly, or have any intention to acquire any securities of the Company. The services provided will include:

Creation of copywriting by CFA;
Creation of video interviews with key senior management;
The sale of digital media traffic;
Hosting of copywriting.

On January 28th, 2021 Medivolve announced a share purchase agreement to acquire up to 40% of Marvel Diagnstics Inc, for an aggregate price of up to US$1 million through a series of milestone-based payments. This funding will be used to complete clinical studies for the BlowFISH collection system and to design and optimize, manufacture and market the device. The BlowFISH sample collection system is based on continuous condensation and can efficiently collect a substantial liquid sample directly from a patient’s exhaled breath requiring the patient to simply blow into an inexpensive disposable device a few times.

The share purchase agreement allows Medivolve to purchase up to 40% of Marvel Diagnositics for an agreegate purchase price of up US$1 million. Medivolve will make an initial investment of US$165,000 within 30 days to acquire approximately 6.6% of Marvel Diagnostics. Medivolve will make a second investment of US$165,000 within 60 days to acquire an additional 6.6% of Marvel Diagnostics. Following the two initial investments, Medivolve shall have the right to purchase an additional 26.8% of Marvel based on a series of milestones that include: • Successful clinical trial result for the BlowFISH collection device; • Successful receipt of emergency use authorization for the collection device and; • Receipt of emergency use authorization for rapid antigen BlowFISH detection. As part of the investment, Medivolve will appoint a director to the board of directors of Marvel Diagnostics.

On January 26, 2021, the Company announced that it had closed the previously announced "bought deal" private placement of an aggregate of 20,000,000 units (the “Units”) at a price per Unit of $0.25 (the “Issue Price”) for aggregate gross proceeds to the Company of $5,000,000 (the “Offering”). Canaccord Genuity Corp. (“Canaccord”) acted as the sole lead underwriter and sole bookrunner for the Offering. Each Unit consisted of one common share of the Company (a "Common Share") and one-half of one common share purchase warrant (each whole common share purchase warrant, a "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 (the “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.

On January 5, 2021 the Company announced the completion of an agreement to supply state-of-the-art COVID-19 testing equipment and custom protocols to JSC Chukotka Mining and Geological Company (“CMGC”), a subsidiary of Kinross Gold (NYSE: KGC; TSX: K). The equipment supplied included COVID19 RT-PCR tests and antibody tests and analyzers that are expected to help test employees at Kinross’ Kupol and Dvoinoye mines in the Chukotka region, its Udinsk project in the Khabarovsk region and at its Russian offices in Magadan and Moscow. The total contract value for the tests and associated protocols is US$2.1 million. The conditions under the contract were satisfied in 2020 and the US$2.1 million is included in the Company’s 2020 revenue.

On July 30, 2020, the Company secured the rights to sell Hangzhou Laihe Biotech Co. Ltd.’s LYHER Novel Coronavirus (2019-nCoV) IgM/IgG Antibody Combo Test Kit (Colloidal Gold) within North America. The LYHER test kit was extensively reviewed by the US Food and Drug Administration (FDA) and the National Cancer Institute – Frederick National Laboratory and reported strong clinical results. The test kits are available for immediate sale in the United States. A clinical performance summary is available in the Company’s press release dated July 30, 2020.

Medivolve became the authorized sales agent in the United States, Canada, and Mexico for Hangzhou Laihe Biotech. Blackport Holdger Partners Inc. assigned Medivolve the right to act as an official exclusive agent through their role as the exclusive authorized North American representative of Hangzhou Laihe LYHER tests. The Company has commenced selling the comprehensively reviewed, high-quality, and Emergency Use Authorized (EUA) test kits in the sizable and underserved US market. The test kits are used to determine if IgG/IgM antibodies to COVID-19 are present.

COVID-19 Antibody Test Disclaimers:

Negative results do not rule out SARS-CoV-2 infection, particularly in those who have been in contact with the virus. Follow-up testing with a molecular diagnostic should be considered to rule out infection in these individuals.

Results from antibody testing should not be used as the sole basis to diagnose or exclude SARSCoV-2 infection or to inform infection status.
Positive results may be due to past or present infection with non-SARS-CoV-2 coronavirus strains, such as coronavirus HKU1, NL63, OC43, or 229E.
Not for the screening of donated blood.
In the early stages of infection, low levels of antibody expression can produce negative results.
• This product can only qualitatively detect antibodies in human serum, plasma and whole blood samples, and cannot determine the quantity of specific antibodies in the samples.
The Company is not making any express or implied claims that the test has the ability to eliminate, cure or contain the COVID-19 (or SARS-2 Coronavirus) at this time.

On August 25, 2020, the Company closed a transaction to acquire 100% of Las Vegas-based Collection Sites, LLC (“Collection Sites”). Collection Sites launched COVID-19 testing services in conjunction with Alcala Testing and Analysis Services, a CLIA registered high complexity laboratory based in San Diego California. It opened its first site in Las Vegas on August 8, 2020 and opened over 40 more pop-up labs throughout Nevada, California, in a Phase 1 rollout. 23 pop-up labs, also known as “draw centers”, collectively will be able to administer up to 3,450 tests per day, with a capacity to analyze up to 103,500 tests per month. Under the terms set out in the definitive agreement, Medivolve issued 20,000,000 of the Company’s common shares 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

On August 31, 2020, the Company entered into a purchase order term sheet with Xtreme Cubes Corp. respecting the manufacture of modular steel pod structures which will serve as testing centres for Collection Sites and its COVID-19 “Test Before You Go” campaign first launched in August 2020 in Las Vegas, Nevada. According to the term sheet, the Company engaged Xtreme Cubes to deliver an initial order of 165 QuestCubes to be placed in shopping centres across the United States. The Company accepted shipments of 21 cubes and terminated the balance having found more cost effective cube solutions

On March 30, 2020 the Company announced it had entered into 12-month programmatic digital advertising campaign with Native Ads for a total cost of US$700,000, comprised of US$525,000 for digital advertising, paid distribution, and media buying over the campaign period and, US$175,000 for content creation, consulting, managed services and management fees over the course of the campaign period. Native Ads is a full-service ad agency, that owns and operates a proprietary ad exchange with over 80 integrated SSPs (supply-side platforms) resulting in access to 3-7 billion daily North American ad impressions. Neither Native Ads nor any of its directors and officers own any securities of the Company.

Also, Hybrid Financial has been engaged by Medivolve for a period of six-months starting April 1, 2020, which term may be renewed for successive three-month periods thereafter upon the mutual agreement of Medivolve and Hybrid. Hybrid will be paid a monthly fee of $66,667, plus applicable taxes, during the initial six-month term. Hybrid is a sales and distribution company that actively connects issuers to the investment community across North America. Using a data driven approach, Hybrid provides its clients with comprehensive coverage of both American and Canadian markets. Hybrid Financial has offices in Toronto and Montreal.

Leasing agreements:

During 2020, the Company entered into a number of leasing agreements with the expectation of utilizing more than 700 testing locations:

On October, 21, 2020, the Company announced the launch of an agreement between its wholly owned subsidiary, Collection Sites and Sandor Development Company (“Sandor”), one of the largest privately-held shopping center developers with locations across the United States which often adjoin such retail giants as Home Depot, Walmart, and Target and Kroger, among others. Collection Sites expected to lease 50 x 100

ft of space in the parking lots of 65 shopping centers owned or managed by Sandor, for an initial 6-month term with the option to extend.

On September 23, 2020, the Company announced the signing of 15 lease agreements between Collection Sites, and Orange County, CA based retailer H&S Energy, LLC

On October 26, 2020, the Company announced the launch of an agreement between its wholly owned subsidiary, Collection Sites and BPR REIT Services LLC (“Brookfield Properties”), a subsidiary of global real estate company Brookfield Property Partners, listed on the NASDAQ (NASDAQ:BPY). Collection Sites expected to lease 50 x 100 ft of space, for an initial 4-month term, in the parking lots of 73 shopping malls owned or managed by Brookfield Properties.

On October 07, 2020, the Company and Simon Property Group announced an agreement to launch COVID19 testing sites in the parking lots of 165 Simon properties in the U.S.

On November 18, 2020, the Company announced the launch of a master license agreement between its wholly owned subsidiary, Collection Sites, LLC and Brixmor Property Group (NYSE: BRX), a real estate investment trust (REIT) that owns and operates a high-quality, national portfolio of open-air shopping centers with retailers including T.J. Maxx, Kroger, Wal-Mart, and L.A. Fitness, among others. Collection Sites leased space in the parking lots of 340 shopping centers owned by Brixmor for an initial 6-month term with the option to extend.

On December 18, 2020, the Company also announced that Collection Sites will lease 50 x 100 ft of space in the parking lots of 33 shopping centers owned or managed by Tanger Outlets, for an initial 6-month term with the option to extend, expanding its extensive network of COVID-19 testing centres.

Subsequent to the end of the year, based on demand, the Company decided to focus on a renegotiation of the Simon agreement and to negotiate termination agreements with the other lessors.

Investments and Royalty agreements

Subsequent to becoming a single purpose medical entity, Medivolve has amended and divested of certain historical investments in order to reduce future capital investment allowing the Company to focus solely on its current Telehealth strategy.

Medivolve has amended its agreement with Sunnybrook Research Institute (“Sunnybrook”) and Amino Therapeutics, Inc. (“Amino”) and has also terminated its agreement with Sinai Health System (“Mount Sinai”). All three agreements were initially entered into in early 2020 when the Company was still an investment issuer. Further, Medivolve has divested its interest in Athletics & Health Solutions and Eco Capital Growth Corp. for nominal consideration as these entities no longer fit with the company’s business strategy.

See details below:

On April 2, 2020, the Company announced the founding investment for the Sunnybrook Translational Research Group for Emerging and Respiratory Viruses (“SERV”). Pursuant to the Research Investment and Royalty Agreement dated March 31, 2020 between Medivolve and Sunnybrook Research Institute (“Sunnybrook”): (a) Medivolve was to provide Sunnybrook with an aggregate research investment of $1 million, payable in four $250,000 instalments on or before the following dates: (i) April 30, 2020 (which instalment has been paid), (ii) June 30, 2020, (iii) September 30, 2020, and (iv) December 31, 2020; and (b) in return, Sunnybrook granted, and was to pay Medivolve on a calendar quarter basis, a perpetual, freely transferable royalty equal to 3.5 per cent of any net proceeds of royalties, licensing revenues and other income received by Sunnybrook from the commercialization of its rights to intellectual property arising directly from research on the isolation of severe acute respiratory syndrome coronavirus 2 (“SARS-CoV-2”

or the “Virus”) (the agent responsible for the ongoing outbreak of COVID-19) conducted by Sunnybrook using the Investment. The September 30, 2020 payment is outstanding.

On December 31, 2020, the Company signed an amendment agreement with Sunnybrook whereby the royalty interest was reduced to 1.75% for funding of $500,000, 250,000 which has been paid. Subsequent to December 31, 2020, the Company issued 326,087 shares of the Company and agreed to pay $100,000 in 10 installments in full settlement of the additional $250,000.

On April 13, 2020, the Company acquired 40% of the issued and outstanding shares of Amino Therapeutics Inc. (“Amino”). Medivolve cautions that this is still early stage research and development and is not making any express or implied claims that it has the ability to treat the SARS-CoV2 virus at this time. Amino has obtained exclusive rights to leverage their parent company’s, Exponential Genomics Inc. (“Xenomics”) XenoArray platform to engineer a potential treatment for COVID-19 (the “Treatment”) based on peptide protease inhibitors. Being developed to genetically modify multiple microbial strains to produce thousands of peptide-based protease inhibitors in parallel, the XenoArray platform may empower Amino Therapeutics with a unique advantage to potentially design an effective treatment for COVID-19.

The terms of transaction are as follows:

Amino agreed to sell a 40% equity interest to Medivolve;
The Company injected $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
Amino agreed to issue a warrant entitling the Company to purchase an additional 9% equity in Amino for $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”), 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 years ended December 31, 2020, the Company made cash payment of US$180,000 (C$250,380) leaving a balance of US$1,566,869.98 (C$1,994,939).

Amino is currently focused on developing biologic therapeutics for COVID-19. Amino’s research targets small molecule drug candidates and targeted drug delivery systems to transport biologics into the cytosol.

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 of the Exponential warrant in consideration for the outstanding debt and forgiveness of the balance of outstanding debt.

On April 9, 2020, the Company announced a partnership with Sinai Health Foundation (Sinai”) to support research into COVID-19. The aim of the research is to gain a better understanding of the prevalence of

SARS-CoV-2 infection and patients’ immune response through the development of a COVID-19 serosurveillance test.

Pursuant to the revised terms of the agreement, Medivolve was to provide the Sinai with an aggregate research investment of $500,000, payable in four installments of $125,000. The Company provided the first installment of $125,000 on May 8, 2020. Three additional installments were payable on or before September 30, 2020, December 30, 2020, and March 30, 2021. In exchange, Sinai granted, and was to pay Medivolve on a calendar quarter basis, a perpetual, freely transferable royalty equal to 5% on any gross sales or revenue earned and received by Sinai, directly or indirectly, from the commercialization of its rights to intellectual property (“Commercial IP”) arising from the proprietary diagnostic test(s) developed by Sinai using the funding provided by Medivolve. 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.

On April 16, 2020, the Company announced the execution of a share purchase agreement to acquire 49 percent of the issued and outstanding shares of Athletics and Health Solutions Inc. (“A&H”), a recently incorporated private Ontario corporation which has entered into a non-binding letter of intent (the “LOI”) on April 14, 2020 with the Division Mayor del Futbol Colombiano (“DIMAYOR”), the organization responsible for operating professional football leagues and tournaments in Colombia, to restart football activities in Colombia. The

On April 21, 2020, under the terms of the A&H Agreement, Medivolve issued 6 million common shares to four arm’s length vendors of the A&H common shares for an estimated fair value of $2,820,000 based on the April 15, 2020 closing price of $0.47 on the Canadian Securities Exchange. In addition, A&H had covenanted that it will promote and preserve for Medivolve the goodwill of consultants, suppliers and others having business relations with A&H.

Under the terms of the LOI, A&H was to:

provide DIMAYOR with a team of interdisciplinary health professionals at all venues where professional football matches are to be played in Colombia;
provide and perform the serology tests weekly on the football players, technical personnel and people who live with them in the team camps;
24 hours before each football game, administer an early diagnostic antigens/antibody test to all personnel required for the games as well as the televised transmission (players, coaching staff, referees, ball boys, law enforcement, maintenance staff, delegates, etc.);
create a traceability application for each of the players and the coaching staff to monitor compliance with testing and quarantine measures, using a point-to-point control system, in stadiums and other locations where the Colombian football teams are confined; and
together with DIMAYOR and the Colombian Football Federation, create security protocols/procedures as well as formulate a schedule of the football games to be played (along with practices and ancillary events). The scheduling of the football season will take into account the length and location of quarantines for the teams, safe and controlled transportation for the teams and the determination of safe venues/cities to host games.

Subsequently, due to the deteriorating public health situation in Columbia, the anticipated start of training and matches was delayed. A&H advised Medivolve that the LOI entered into between A&H and DIMAYOR on April 14, 2020 had lapsed, and that when the situation improved, A&H would participate in a general tender to provide a sanitary protocol to resume soccer. As described above the Company divested to A & H for nominal consideration as it no longer fits with the Company’s business strategy. The Company wrote the investment down to $Nil.

On March 30, 2020 the Company announced the signing of a definitive agreement with respect to, and the completion of, an acquisition (the “Acquisition”) of all of the issued and outstanding common shares in the capital of Eco Capital Growth Corp., a British Colombia company (“Eco Capital”). In consideration for the Acquisition, Medivolve issued 8,000,000 common shares of the Company at a deemed price of $0.07 per

share in exchange for all of the common shares in the capital of Eco Capital. As described above the Company divested to Eco Capital for nominal consideration as it no longer fits with the Company’s business strategy. The Company wrote the investment down to $Nil.

On June 25, 2020, the Company completed its acquisition of a 30% interest in Glenco Medical Corp. (“Glenco Medical”). In exchange, the Company issued a total of 12,000,000 of its common shares to 2451013 Ontario Inc., Dr. Glenn Copeland’s holding company, at a price of $0.185 per share based on the market price of the common shares at the time of issuance. Dr. Copeland has been appointed Chairman of MedQuest’s Medical’s Advisory Committee and will receive consulting fees for his role.

Glenco Medical is a medical treatment company that specializes in extended clinical care, home treatment and innovative performance technologies using wearable, unrestricted and individual therapies to accelerate orthopaedic injury healing and training recovery. Glenco Medical develops and organizes data driven COVID-19 screening protocols and testing procedures. As virus testing is crucial for recovery, these protocols are designed to provide a safe return for business operations, manufacturing, hydropower plants, service sectors, sports, technology industries etc. using up to date public health recommendations and guidelines. Due to the fact the Company was unable to receive reliable information from the entity to support the valuation, as at December 31, 2020, the Company wrote down the investment to a nominal value. 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 entered into an arms-length definitive agreement with Latin-Canada Pharma Inc. (Canada) (the “Vendor”) and Latin-Canada Pharma Inc. (Bahamas) (“LCP Bahamas”) to acquire a 28% indirect equity interest in Sanaty IPS S.A.S. (“Sanaty”), a full-service medical clinic in Columbia. For more information on Sanaty, please see the Company’s press release dated July 9, 2020.

Pursuant to the agreement, Medivolve has acquired a 40% interest in LCP Bahamas, and LCP Bahamas will own 70% of Sanaty. As consideration for the acquisition, Medivolve issued to the Vendor an aggregate of 12,000,000 common shares with an ascribed value of $0.18 per common share. In addition, Medivolve will issue: (i) 2,000,000 additional common shares to the Vendor if Santy’s EBITDA is greater than US$9 million for the 2021 year end as evidenced by financial statements audited under IFRS standards; and (ii) an additional 2,000,000 common shares to the Vendor if Sanaty’s EBITDA is greater than US$18 million for the 2022 year end as evidenced by financial statements audited under IFRS standards. The Company will also have an option to acquire an additional 10% equity interest in LCP Bahamas from the Vendor within 60 days following the closing of the transaction by paying US$600,000 to the Vendor. On September 11, 2020, the Company announced that Sanaty has initiated its comprehensive COVID-19 testing program with the sale of both PCR and antibody test kits through its inaugural clinic.

On August 4, 2020, the Company entered into an arms-length agreement to acquire a 40% equity interest in Spectral Analytics Inc. (“Spectral”) by issuing 10,000,000 of the Company’s common shares and $470,000 USD. The transaction is conditional upon Spectral receiving Institutional Review Board (IRB) approval for human trials and the completion of a successful in-vitro study of a combination of two FDA drugs to treat COVID-19. Medivolve shall also receive a warrant to acquire an additional 5% of Spectral for an exercise price of US$150,000 (included in the payment of US$470,000) exercisable following successful future human trial results as determined by Medivolve and as measured by the FDA. As at December 31, 2020, the Company wrote down the investment to a nominal value. Should market conditions improve and the fair value of investments increase, the asset will be written up at that time.

On April 7, 2020, the Company announced that it had entered into a profit-sharing agreement with More Than Just Rice, Inc. (“MTJR”). MJTR entered into a supply agreement with PCL Inc. (“PCL”), a South Korean company, to secure the exclusive right to distribute and market PCL’s various technologies, tests and kits, including specifically PCL’s proprietary COVID-19 lgG/lgM Rapid Gold Tests in the United States and Canada with selling rights in Mexico and South America.

Under the profit-sharing agreement, Medivolve would receive 40% of the net profits in connection with, or in any way related to MJTR’s relationship with PCL and /or sales of the antibody tests. As consideration, the Company was obliged to issue 10,000,000 common shares (a total of 5,000,000 shares subject to milestones based on the sales of the tests, and the remaining 5,000,000 shares upon MTJR’s satisfaction of all conditions under the supply agreement).

The Company was obliged to use its best efforts to work with MJTR to deliver, or cause to be delivered: (i) up to US$250,000 to MJTR in reimbursement for actual costs in connection with the product and the implementation of the supply agreement and (ii) $US10,000,000 to MJTR for the purchase of the tests from PCL, which amount is to be reduced by deposits received by MJTR from third-party purchasers of the tests.

On April 23, 2020, the Company issued a promissory note (the ”Note”) in the amount of USD$7,700,000 ($9,803,640) to an arms length, third-party lender (the “Lender”) to fund a portion of the initial cash payment. MJTR was obliged, prior to making any payments from the gross proceeds received from the sale of products or any business with PCL, to apply all or any portion of such proceeds to repay any and all funds advanced to MTJR by the Company, including the reimbursement amount.

No interest is payable under the terms of the Note.

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 refund.

In addition, as a result of the test kits not being available to sell in the United stated, the profit sharing agreement with MTJR has been terminated.

As additional consideration for providing the Note, the Company has agreed to pay the Lender an origination fee of US$1,300,000 and to issue to the Lender 6,000,000 common shares as, subject to any applicable regulatory approvals. The origination fee forms part of the principal owing under the Note, consequently USD$9,000,000 is due at maturity. The 6,000,000 common shares were issued to the Lender on April 23, 2020 with as estimated fair value of $2,790,000 based on the closing price of the share on the date of issuance.

The Note provides for security over all of the assets of the Company and was due within 60 days from the date of issuance. On June 25, 2020, the Lender approved a 60-day extension of the loan. On October 21, 2020, the Company signed a 90-day 12% loan agreement with the Lender for CAD $600,000. On November 10, the Company repaid CAD $1,600,000 as partial payment against the US$7.7 million promissory note.

The Company has a 40% profit sharing agreement with MTJR. MTJR has completed the sale of 750,000 PCL Rapid Gold COVID-19 IgG/IgM Antibody tests to Breeze Laboratories, a medical manufacturing company with well-developed distribution channels, for US$4.00 per test. The proceeds from the sale will be returned to the Company and used to repay a portion the outstanding loan commitment. Breeze Laboratories has the necessary regulatory approvals and licenses from the Colombian authorities to import and distribute the PCL COVID-19 IgG/IgM Antibody tests and they have now arrived in Columbia. Breeze’s intention is to market the kits through institutional and retail sales channels. To date no funds have been retuned to MTJR for the sale of the Kits.

Fiscal 2020 Performance Highlights

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Three months ended Twelve months ended
December 31, 2020 December 31, 2020
Operating Results 2020 2019 2020 2019
Revenue $ 10,583,256 $ - $ 10,583,256 $ -
Realized (loss) on investments, net - (152,106) - (152,106)
Unrealized (loss) gain on investments, net (9,060,169) 150,492 (9,107,503) -
Interest income 22,021 26,296 60,635 52,737
Loss on disposition of exploration and evaluation property - - - (100,000)
Net (loss) and comphrensive (loss) (27,195,907) (672,679) (37,777,656) (2,718,245)
Basic and diluted (loss) per share (0.18) (0.02) (0.38) (0.08)
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The Company had a net and comprehensive loss of $27,195,907 and $37,777,656 ($0.18 and $0.38 per share) during the three and twelve months ended December 31, 2020 compared with loss of $672,679 and $2,718,245 ($0.02 and $0.08 per share) during the same periods in the prior year

During the 2020 fiscal year, the Company completed its change of business from an investment issuer to a single purpose medical company. Prior to that, the Company was a junior mining company listed on the TSXV. The Company disposed of an option to purchase a 100% interest in the Las Morras gold project in the Extremadura region of Spain and recognized a loss on disposition of $100,000.

The Company generated revenue of $10,583,256 for the three and twelve months ended December 31, 2020. Of the total revenue, $ $7.9 million was generated from Collection Sites.

The Company recognized interest income of $22,021 and $60,635 during the three and twelve months ended December 31, 2020 from its various loans compared with $26,296 and $52,737 during the same periods in the prior year.

The Company recognized realized loss of $nil and $nil during the three and twelve months ended December compared to $152,106 for the three and twelve months ended December 31, 2019 from its investment in OjO Electric LLC (“OJO”) as described in Note 3 to the Consolidated Financials statements.

The Company recognized an unrealized loss of $9,060,169 and $9,107,503 during the three and twelve months ended December 31, 2020 compared with unrealized gain of $150,492 and $nil during the same periods in the prior year. The Company recognized loss on its investment in Last Mile Holdings Inc. (“Mile”) offset by gain recognized in its investment in Sulliden Mining Capital Inc. (“Sulliden”) in 2020. The Company recognized unrealized loss on private investments for Amino, Glenco, Latin-Canada and Collection Sites. The unrealized gain of $150,492 for the 3 months ended December 31, 2019 was a reversal of unrealized loss of OJO from the prior period.

See the Financial Results section of this report for a discussion of the Company’s operating expenses.

At December 31, 2020, the Company had three loan and seven investments at fair value through profit and loss.

Investments at Fair Value Through Profit and Loss, as at December 31, 2020

The Company is carrying several investments at Fair value through profit and loss

AZN Capital Corp. (Formerly Last Mile Holdings Inc.; 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. 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 AZN Capital Corp.) to Sulliden for gross proceeds of $300,000. The Company currently holds 172,071 shares in escrow. At December 31, 2020, the shares were trading at a market price of $0.01, resulting in an unrealized loss of $(84,315) at December 31, 2020.

Sulliden Mining Capital Inc.

On January 31, 2020, the Company purchased 3,133,333 common shares and 2,607,272 flow-through shares of Sulliden. At December 31, 2020, the shares were trading at a market price of $0.07, resulting in an unrealized gain of $101,776 at December 31, 2020.

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 a director of Sulliden.

Eco Capital Growth Corp.

On March 23, 2020, the Company acquired all the issued and outstanding common shares of Eco Capital Growth Corp. (“Eco Capital”). In consideration, the Company issued 8,000,000 of its common shares, resulting in the former shareholders of Eco Capital owning 12.6% of the Company on an undiluted basis. 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 as the investment no longer fits with the Company’s business strategy

Amino Therapeutics Inc.

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 due to the fact that the owners of the other 60% act in concert. As a result this investment is recorded at Fair Value. The Company was required to make additional $2,000,000 in cash payments ($180,000 paid) plus the Company received warrants to purchase additional equity in Amino and its parent company for additional costs. (See recent development section for more details)

Athletics & Health Solutions Inc.

On April 16, 2020, the Company acquired 49 percent of the issued and outstanding shares of 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. In addition, A&H had covenanted that it would promote and preserve for Medivolve the goodwill of consultants, suppliers and others having business relations with A&H. 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.

Glenco Medical Corp.

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 in Glenco Medical is $2,220,000 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.. Glenco Medical is an injury treatment company providing effective remedies to alleviate musculoskeletal and inflammatory pain using wearable therapeutic technologies. At December 31, 2020, the Company wrote down its investment in Glenco . Should market conditions improve and the fair value of investments increase, the asset will be written up at that time.

Latin-Canada Pharma Inc.

On July 28, 2020, the Company acquired 28% indirect interest of 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 as part of this acquisition at an estimated fair value of $2,040,000. 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 its investment in Latin-Canada . Should market conditions improve and the fair value of investments increase, the asset will be written up at that time. 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.

Varianz Inc.

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 the 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.

Notes and loans receivable

Blue Sky Energy Inc.

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.

Breeze Laboratory SAS Colombia

On August 17, 2020 the Company entered into a loan agreement with Breeze Laboroatory SAS Colombia (“Breeze”) and agreed to lend Breeze upto US$500,000 with interest accrued and calculated at 12% per annum. The loan principal and accrued interest are due and payable six month from the date when drawdown is made. Deborah Battiston CFO of the Company is CFO of Flora Growth Corp. Flora Growth Corp acquired Breeze on December 29, 2020.

Newdene Gold Inc.

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 $338,360.

Flora Growth Corp.

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 (the “Principal”). Interest was accrued and calculated at a rate of 10% per annum on the Principal that has been drawn down plus any unpaid interest. The Principal and accrued interest was due and payable on demand by the Company. In total, USD$498,409 was loaned to Flora. Deborah Battiston, CFO of the Company, is the CFO of Flora, Stan Bharti, President and CEO of the Company, is the Executive Chairman of Flora, and Fred Leigh, a former director of the Company, is a director of Flora. On February 3, 2020, the Company received $688,469 from Flora Growth Corp. in full repayment of the loan agreement. The amount received consisted of $661,789 in principal and $26,680 in interest accrued to the date of repayment.

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.

Selected Annual Financial Information

The table below provides a summary of selected annual financial information for the years ended December 31, 2020, 2019 and 2018:

	December 31, 2020	December 31, 2019	December 31, 2018
(ExpressedinCanadiandollars $)
Reveue	10,583,256	-	-
Net (loss) income for the year	(37,777,656)	(2,718,245)	(711,562)
Per share - basic and diluted (loss) gain	(0.38)	(0.08)	(0.02)
Total Assets	19,131,246	2,300,474	4,581,026
Working Capital(1)	(24,465,475)	1,604,478	4,445,823

Selected Quarterly Financial Information

Forthe threemonths ended	December31,2020	September30,2020	June 30,2020	March31,2020
(Expressed in Canadian dollars$) Revenue Net (loss) and comprehensive (loss)	10,583,256 $ (27,195,907)	- $ (2,296,478)	- $ (6,969,758)	- $ (1,315,513)
(Loss) per share - basic and diluted	(0.18)	(0.03)	(0.08)	(0.04)
Total assets	19,131,246	32,543,040	26,574,550	4,722,269

Forthe threemonths ended	December31,2019	September30,2019	June 30,2019	March31,2019
(Expressed in Canadian dollars$) Revenue Net (loss) and comprehensive (loss)	- $ (672,679)	- $ (782,269)	- $ (813,695)	- $ (449,602)
(Loss) per share - basic and diluted	(0.02)	(0.02)	(0.03) 3,353,647	(0.01) 4,142,329
Total assets	2,300,474	2,596,225

Liquidity and Capital Resources

The Company generated revenues of 10,583,256 and recorded a net loss and comprehensive loss of $37,672,076 for the year ended December 31, 2020 (December 31, 2019 – $nil and $2,718,245).

In management’s view, given the nature of the Company’s operations, the most relevant financial information relates primarily to current liquidity, solvency and planned expenditures. The Company’s financial success will be dependent upon the execution and development of its new investment strategy and business operations. Such execution and development may take years to complete and the amount of resulting income, if any, is difficult to determine.

Medivolve relies upon various sources of funds for its ongoing operating activities including revenues from its Collection Sites operations as well as equity and debt financing During the year ended December 31, 2020, operating activities used net cash of $10,978,335 (2019 – used net cash of $2,458,691). The Company used $5,486,900 in investing activities (2019 – used $1,920,072) and generated $17,315,668 from financing activities (2019 - $nil).

On August 14, 2020, the Company closed the first tranche of a private placement financing and issued 7,755,500 units at a price of $0.20 per unit for aggregate gross proceeds of $1,551,100. Each unit consists of one common share of the Company and one common share purchase warrant entitling the holder thereof to acquire one common share at a price of $0.25 for a period of 24 months following the closing date. The net proceeds from the first tranche will be used for general working capital purposes, to pursue acquisition opportunities and to expand testing capacity.

On August 31, 2020, the Company closed the second tranche of a private placement financing and issued 7,244,500 units at a price of $0.20 per unit for aggregate gross proceeds of $1,448,900. Each unit consists of one common share of the Company (a “Share”) and one common share purchase warrant (a “Warrant”). Each Warrant entitles the holder thereof to acquire one Share at a price of $0.25 for a period of 24 months following the closing date.

On March 23, 2020, the Company closed a non-brokered private placement financing of common shares for gross proceeds of $2,000,000 (the “Offering”). Pursuant to the Offering, Medivolve issued 20,000,000 common shares at a price of $0.10 per common share. The common shares issued in connection with the Offering are subject to a statutory four month hold period, which expires on July 24, 2020. No finder’s fees were paid in connection with the Offering. At December 31, 2020, proceeds of $100,000 was uncollectible and written-off to bad debt.

On January 26, 2021, the Company closed the previously announced "bought deal" 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 one-half 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.

The Company announced that it has completed its shares for debt settlements with certain creditors that were previously announced on February 11, 2021 (the “Shares for Debt Settlement”) after being granted approval by the NEO Exchange. Pursuant to the Shares for Debt Settlement, the Company has issued 10,958,024 common shares of the Company at a deemed price of $0.46 per share in satisfaction of outstanding debt of $5,040,691. The common shares issued pursuant to the Shares for Debt Settlement are subject to a four month and one day hold period expiring on June 19, 2021.

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.

Currency Risk

Currency risk is the risk to the Company’s earnings that arises from fluctuations of foreign exchange rates and the degree of volatility of these rates. As at December 31, 2020, the Company had the following financial assets denominated in foreign currency

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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)
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At December 31, 2020, the United States dollar (“USD”) was converted to a Canadian dollar (“CAD”) at a rate of 1.2732 whereas the Colombia Peso (“COP”) was converted to CAD at a rate of 0.000369. A 10% increase in the value of CAD against USD and COP would result in an increase in net income of approximately $1,211,200.

Price and Concentration Risk

One investment at fair value through profit and loss make up approximately 17% of the Company’s assets. The unknown risks related to COVID-19 could affect the value of these financial instruments. For the year ended December 31, 2020, a 10% decrease in the value of these concentrated positions would result in a decrease in before-tax income of approximately $316,000.

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.

Cash Flows

Cash Flows for the three months ended December 31, 2020 and 2019

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For the three months ended
(Expressed in Canadian dollar $) December 31,
2020 2019
Cash provided (used in) operating activities $ 3,269,628 $ (301,276)
Cash (used in) investing activities (4,313,875) (228,480)
Cash provided by financing activities 1,820,635 -
Change in cash and cash equivalents $ 776,388 $ (529,756)
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Cash of $3,269,628 was provided by operating activities during the three months ended December 31, 2020 compared to $301,276 used by operating activities during the three months ended December 31, 2019. Cash provided during the current quarter was primarily due to revenue of 10,583,256 generated net of general office and administrative costs and net changes in working capital. Cash used in the prior year quarter was mainly due to general office and administrative costs plus the net changes in working capital.

Cash of $4,313,875 was used in investing activities during the three months ended December 31, 2020 compared to $228,480 used during the three months ended December 31, 2019. Cash used during the current quarter included $1,157,887 from investment purchases, $3,123,418 related to lease payments offset by loan repayments of $338,360 and cash of $43,098 received from Collection Sites. Cash used during the prior year quarter was related to investment purchase of $538,142 net of loans provided of $309,662.

The Company generated $1,820,635 in cash from financing activities from proceeds of $3,375,635 loan provided net of $1,600,000 loan and interest repaid plus proceeds of $45,000 from stock options exercised off set by $100,000 uncollectible private placement proceeds written off. There were no financing activities during the three months ended December 31, 2019.

Cash Flows for the twelve months ended December 31, 2020 and 2019

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For the twelve months ended
(Expressed in Canadian dollar $) December 31,
2020 2019
Cash (used in) operating activities $ (10,978,335) $ (2,458,691)
Cash (used in) investing activities (5,486,900) (1,920,072)
Cash provided by financing activities 17,315,668 -
Change in cash and cash equivalents $ 850,433 $ (4,378,763)
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Cash of $10,978,335 was used by operating activities during the twelve months ended December 31, 2020 compared to $2,458,691 used by operating activities during the twelve months ended December 31, 2019. Cash used during the year was due to revenue of 10,583,256 generated net of general office and administrative costs and net changes in working capital. Most expense categories were increased in 2020 related to 2019 due to the increased expenses related to collections sites. Increased expenses of note were legal and professional due to the Company’s efforts to recoup the $7.7 million which was sent to PCL and other legal matters as well as marketing and promotion related to the Company’s efforts to create awareness about its activities Cash used in the prior year was mainly due to general office and administrative costs plus the net changes in working capital.

Cash used in investing activities during the year resulted primarily from $3,159,507 purchase of investments, $539,874 loans provided offset by $1,026,829 loan and interest repaid, $300,000 proceeds from sales of investment and $ 380,000 in return of capital. The Company also used $3,123,418 related to lease

payments. Cash used in the prior year was resulted from 1,001,930 loan provided and $918,142 investment purchased.

The Company generated $17,315,668 in cash from financing activities in the twelve months ended December 31, 2020 primarily from loan proceeds of $14,589,738 and proceeds of $4,900,000 from private placement financing completed in March and August 2020 respectively, proceeds of $45,000 from stock options exercised, offset by loan and interest repayment of $2,008,000, share and warrant issue cost of $211,070. There were no financing activities during the twelve months ended December 31, 2020.

Financial Results

For the three months ended December 31, 2020 and 2019:

The Company underwent a change of business in the 4[th] quarter of 2020. The comparative Q4, 2019 activities were that of an investment issuer. In addition, the results of Q4, 2020 include the accounts of its wholly owned subsidiary Collection Sites.

	2020 2019 Three months ended December 31,	2020 2019 Three months ended December 31,
Net loss and comprehensive loss	(27,195,907) $	(672,679) $
Revenue	10,583,256	-
Cost of sale	(5,976,818)	-
Management and consultingfees	1,622,984	301,520
Share-basedpayments	696,673	153,280
General office and administration expenses	538,165	58,156
Legal andprofessional	761,780	10,684
Marketingandpromotion	245,849	4,742
Travel	91,050	155,507
Shareholder communications and filingfees	159,723	18,168
Exploration and evaluation expenses	-	(5,760)
Foreign exchange(gain)loss	(193,714)	1,064
Depreciation -propertyand equipment	13,878	-
Depreciation - intangible	97,500	-
Depreciation of right-of-use assets	3,063,495	-
Interest income	(22,021)	(26,296)
Interest expense	(38,794)	-
Interest expense on leases	(1,480)	-
Realized loss on investment	-	152,106
Unrealized loss(gain)on investment and loan receivable	9,060,169	(150,492)
Impairments	15,707,088	-

The Company recorded a net loss of $27,195,907 during the three months ended December 31, 2020 compared to $672,679 during the same period in the prior year. The Company recognized revenue of $10,583,256, incurred cost of sale of $5,976,818 and a gross profit of $4,606,438 for the three months ended December 31, 2020 resulting from its change of business. The Company incurred significantly higher operating costs in management, consulting, legal and professional fees in connection with the development of the Company’s new business strategy along with increased marketing, promotional and shareholders’ communication expenses related to increased activity during the current year. The Company earned interest of $22,021 from its cash deposit, loan and note receivable and had $119,073 interest and accretion

expenses on its loans and investment payable. In addition, the Company recorded a foreign exchange gain of $193,714 from the revaluation of loans and working capital items held in US dollars and COP. The Company recorded depreciation of right-of-use assets of $3,063,495, depreciation on tangible and intangible assets of $13,878 and $97,500 respectively, and interest expenses on leases of $(1,480) in relations to the various leases that Collection Sites has. The Company incurred non-cash share-based payments of $696,673 on stock options granted and vested during the quarter and an unrealized loss of $9,060,169 on its private investments. The Company wrote off certain private investments, royalty interest, advance to MTJR, uncollectible insurance revenue, amount receivable, private placement proceeds totalling $15,707,088. During the three months ended December 31, 2019, the Company realized loss of $152,106 on the conversion of its promissory note with OjO Electric Corp. into common shares and an unrealized gain from the reversal of $150,492 on its convertible promissory note with OjO from the prior period.

For the twelve months ended December 31, 2020 and 2019:

The Company underwent a change of business in the 4[th] quarter of 2020. The Q4 2019 to Q3 2020 activities were that of an investment issuer and the Q1 to Q3 2019 activities were that of a junior mining company. In addition, the results of Q4, 2020 include the accounts of its wholly owned subsidiary Collection Sites.

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Twelve months ended December 31,
2020 2019
Net loss and comprehensive loss $ (37,777,656) $ (2,718,245)
Revenue 10,583,256 -
Cost of sale (5,976,818) -
Management and consulting fees 3,197,872 1,045,861
Share-based payments 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 125,000 -
Exploration and evaluation expenses - 150,000
Foreign exchange (gain) loss (300,618) 94,515
Depreciation - property and equipment 13,878 -
Depreciation - intangible 97,500 -
Depreciation of right-of-use assets 3,063,495 -
Interest income (60,635) (52,737)
Interest expense 86,946 -
Interest expense on leases (1,480) -
Realized loss on investment - 152,106
Unrealized loss on investment and loan receivable 9,107,503 -
Financing costs 4,598,300 -
Impairments 15,797,532 -
Loss on disposition of exploration and evaluation property - 100,000
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The Company recorded a net loss and comprehensive loss of $37,777,656 during the twelve months ended December 31, 2020 compared to $2,718,245 during the same period in the prior year. The Company recognized revenue of $10,583,256, incurred cost of sale of $5,976,818 and a gross profit of $4,606,438

for, incurred cost of sale of $6,157,565 and a gross profit of $2,906,234 for the twelve months ended December 31, 2020 resulting from its change of business. The Company incurred financing costs related to the issuance of a promissory note of $4,598,300 and significantly higher operating costs in management, consulting, and professional fees in connection with the development of the Company’s new investment strategy along with increased travel, marketing and promotional and shareholders communication expenses due to increased activities in the current year. The Company earned interest of $60,635 from it’s cash deposit, loan and note receivable and had interest expense of $86,946 on its loans and investments payable. In addition, the Company recorded a foreign exchange gain of $300,618 from the revaluation of loans and working capital items held in US dollars. The Company recorded depreciation of right-of-use assets of $3,063,495, depreciation on tangible and intangible assets of $13,878 and $97,500 respectively, and interest expenses on leases of $(1,480) in relations to the various leases that Collection Sites has. The Company incurred non-cash share-based payments of $2,107,109 for stock options granted and vested during 2020, and an unrealized loss of 9,107,503 on its investments. The Company also incurred an expense of $125,000 related to the extension of the Troilus royalty agreement which was subsequently terminated, write down of certain private investments, royalty interest, advance to MTJR, uncollectible insurance revenue, amount receivable, private placement proceeds and investment expense totalling $15,797,532. During the twelve months ended December 31, 2019, the Company incurred $150,000 exploration and evaluation expenses as a junior mining company, a $100,000 loss related to the disposition of the Company’s exploration asset and a realized loss of $152,106 on its convertible promissory note with OjO.

Loans payable

On April 21, 2020, the Company issued a promissory note in the amount of USD$7,700,000 (CAD$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 (CAD$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 COVID-19 antibody testing kits from South Korean diagnostic testing company PCL Inc., to be distributed in the North and South American markets. On October 21, 2020, the Company signed a 90-day loan agreement with the lender for a loan of C$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 principals plus interest accrued of US$7,780,767 (C$9,906,472) and C$614,005 outstanding. Subsequent to December 31, 2021, the Company issued 8,878,724 shares at $0.46 per share in settlement of US$3,095,302 (CAD$ ,931,033) owed to Cambridge.

On May 29, 2020, the Company entered into a 90 days 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 loan principal and interest totaling $408,000. The Company also received extension of the outstanding loans till 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 and a six-month repayment term. At December 31, 2020, loan principal and accrued interest totaled $1,629,355 remained 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 a director of Sulliden.

On November 10, 2020, the Company borrowed an $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 totaled $508,384 remained outstanding. Stan Bharti, a former director of the Company, is the CEO and a director of Aberdeen. .

From October 22, 2020 through November 20, 2020, the Company borrowed an aggregate total of US$592,245 (C$754,046) from Greenway with Interest accrued and calculated at 12% per annum and repayment term ranged from 90 days to one year. As at December 31. 2020, loan principal and accrued interest totaled US$609,603 (C$776,147) remained outstanding. Subsequent to December 31, 2020, the Company issued 1,716,648 shares of the Company at $0.46 per share in settlement of US$625,877 ($789,658) owed to Greenway.

Financial Commitments and Contractual Obligations

Management commitments

The Company is party to certain management contracts. These contracts contain clauses requiring additional payments of up to approximately $1,327,000 be made upon the occurrence of certain events such as a change of control. 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.

Transactions with Related Parties

See Notes 3, 6, 12 and 15 to the consolidated financial statements of the Company for the twelve months ended December 31, 2020.

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.

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. 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.

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.

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.

During the August 2020 private placement financing, certain related companies subscribed a total 9,387,500 shares for gross proceeds of $1,877,500.

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:

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

Deborah Battiston CFO of the Company is CFO of Flora Growth Corp. Flora Growth Corp acquired Breeze on December 29, 2020. See Note 12 to the Financial Statements.

Off Balance Sheet Arrangements

To the best of management’s knowledge, there are no off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on the results of operations or financial condition of the Company.

Financial Instruments

The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, and accounts payable and accrued liabilities. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments.

Fair value

IFRS requires that the Company disclose information about the fair value of its financial assets and liabilities. Fair value estimates are made at the statements of financial position date, based on relevant market information and information about the financial instrument. These estimates are subjective in nature and involve uncertainties in significant matters of judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect these estimates.

The Company has determined the carrying values of its financial instruments as follows:

i. The carrying values of cash, amounts receivable, accounts payable and accrual liabilities approximate their fair values due to the short-term nature of these instruments.
ii. Public and private investments and notes and loans receivable are carried at amounts in accordance with the Company’s accounting policies as set out in Note 2 of the Company’s consolidated financial statements.

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:

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Level 1 Level 2 Level 3 Total
Public investments $ 401,842 $ 1,721 $ - $ 403,563
Private investments - - 3,162,369 3,162,369
Total $ 401,842 $ 1,721 $ 3,162,369 $ 3,565,932
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The public investment in Sulliden Mining Capital is classified as a Level 1 investment, as the shares were released from escrow on May 1, 2020. The public investment in Last Mile Holdings Ltd. (formerly OjO Electric Corp.) is classified as a Level 2 investment, as the shares were held in escrow at December 31, 2020. The loan receivable from Newdene Gold Inc. and has a conversion feature. On December 1, 2020, Newdene repaid the loan principal plus interest of $338,360. The repayment was held in trust and received subsequent to December 31, 2020.

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.

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:

					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 financing	Marketability of shares	0%-12%discount
Athletic & Health Solutions Inc.		1	Recent financing	Marketability of shares	0% discount
Glenco Medical		-	Recent financing	Marketability of shares	0% discount
Eco Capital Growth Corp.		1	Recent financing	Marketability of shares	0% discount
Latin-Canada Pharma Inc.		-	Recent financing	Marketability of shares	0% discount
	$	3,162,369

Amino Therapeutics Inc. (“Amino”)

The Company invested 40% interest of Amino for 15 million shares of the Company in April 2020 and $2 million cash payable from July 2020 to December 2021 with an estimated fair value of $7,009,438 done through an independent valuation, and the fair value as at December 31, 2020 was estimated at $3,162,369. A 10% change in fair value would result in a change of income of approximately $316,237 at December 31, 2020. Had the Company applied a marketability discount of 5%, it would have resulted in a corresponding decrease of approximately $151,000 in income.

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. 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.

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. Should market conditions improve and the fair value of investments increase, the asset will be written up at that time.

.

Outstanding Share Data

As at the date hereof, the Company’s common shares, common share purchase warrants and stock options vested / issued and outstanding as follows:

197,817,433 common shares
27,665,200 share purchase warrants with an exercise price ranging from $0.25 to $0.40 with expiry dates ranging from August 14, 2022 to January 26,2023.
1,050,000 broker share purchase warrants with an exercise price of $0.25, expiring August 31, 2022.
• 14,941,300 stock options with exercise price ranging from $0.05 to $0.59 and expiry dates ranging from October 11, 2021 to February 1, 2026.

Disclosure Controls and Procedures

Subject to the limitations, if any, described below, the Company’s CEO and CFO have, as at the end of the year ended December 31, 2020, designed Disclosure and Control Procedures, (“DC&P”) or caused it to be designed under their supervision, to provide reasonable assurance that:

Material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and
Information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation;

Internal control over financial reporting has been designed, based on the framework established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in Canada.

There have been no significant changes to the Company’s disclosure controls and procedures and internal controls over financial reporting that occurred during the year ended December 31, 2020 that have materially affected, or are reasonably likely to materially affect, the Company’s disclosure controls and procedures and internal control over financial reporting.

Management, under the supervision of the CEO and CFO, has evaluated the effectiveness of our internal control over financial reporting using the framework designed as described above and based on this evaluation, the CEO and CFO have concluded that internal control over financial reporting was effective as of December 31, 2020.

Because of inherent limitations, internal control over financial reporting and disclosure controls can provide only reasonable assurances and may not prevent or detect misstatements. Furthermore, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The CEO and CFO have certified that Internal Controls over Financial Reporting have been designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. The Audit Committee of the Company has reviewed this MD&A, and the annual consolidated financial statements for the year ended DEcember 31, 2020, and the Company’s board of directors approved these documents prior to their release.

New 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.

Critical Judgments and Estimation Uncertainties

The preparation of 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.
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.
Fair value/impairment of loans receivable The recoverability of loans receivable 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. Convertible debentures and convertible notes issued to publicly traded companies are carried at the higher of the loan receivable value of the fair value of the common shares or units receivable from the conversion assuming the conversion can be done at the Company’s option.

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.
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.

Risks and Uncertainties

The Company is exposed to a number of risks, which even a combination of careful evaluation, experience and knowledge may not eliminate. The following outlines certain risk factors specific to the Company. These risk factors could materially affect the Company’s future results and could cause actual events to differ materially from those described in forward–looking information relating to the Company.

An investment in securities of the Company is subject to certain risks, which should be carefully considered by prospective investors before purchasing the securities. In addition to the other information set out in this MD&A, investors should carefully consider the risk factors referred to below. Any one of such risk factors could materially affect the Company’s business, financial condition and/or future operating results and prospects and could cause actual events to differ materially from those described in forward-looking statements and information relating to the Company. Additional risks and uncertainties not currently identified by the Company or that the Company currently believes not to be material also may materially and adversely affect the Company’s business, financial condition, operations or prospects. Investors should also carefully consider the risks described in the Company’s other public disclosure documents available on SEDAR, including its financial statements and MD&A.

Limited Operating History

The Company has a limited operating history and its business is subject to all of the risks inherent in the establishment of a new business enterprise. The Company’s likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered in connection with establishing a new business.

COVID-19

Since very early in 2020, the outbreak of the novel strain of coronavirus, specifically identified as “COVID19”, has resulted in governments worldwide enacting emergency measures to combat the spread of the virus. These measures, which include the implementation of travel bans, self-imposed quarantine periods and social distancing, have caused material disruption to businesses globally resulting in an economic slowdown. Global equity markets have experienced significant volatility and weakness. Governments and central banks have reacted with significant monetary and fiscal interventions designed to stabilize economic conditions. The duration and impact of the COVID-19 outbreak is unknown at this time, as is the efficacy of

the government and central bank interventions. As the Company’s current business focus is on mobile COVID-19 testing, the Company’s financial performance is significantly linked to the future need for such testing. However, a continuation of the pandemic could also constrain the Company’s ability to pursue other opportunities in the medical and related technology sectors.

Permitting and Licensing

The Company’s ability to develop its business may be dependent on obtaining licenses and permits from various governmental authorities. The process for obtaining and renewing licenses and permits from governmental authorities often takes an extended period of time and is subject to numerous delays, costs and uncertainties. Any unexpected delays or costs or failure to obtain such licenses or permits associated with the permitting process could delay or prevent the commercialization of the Company’s business.

The Company’s licenses and permits are subject to change in various circumstances. Failure to comply with applicable laws and regulations may result in injunctions, fines, suspensions or revocation of permits and licenses, and other penalties. There can be no assurance that the Company has been or will be at all times in compliance with all such laws and regulations and with its licenses and permits or that the Company has all required licenses and permits in connection with its businesses. The Company may be unable, on a timely basis, to obtain, renew or maintain in the future all necessary licenses and permits that may be required to operate its business.

Availability of Supplies and Skilled Labour

Profitability is affected by the market prices and availability of supplies that the Company uses or consumes for its operations and new products, which are sourced from a limited number of suppliers. The Company’s operations depend on suppliers to meet those needs. The Company does have long term contracts with its suppliers. For example, any failure to source testing kits or the materials required to construct its mobile testing hubs could significantly hamper the Company’s current business plan. Similarly, any inability to secure sufficient laboratory access to support its testing could significantly impact the Company’s financial health.

Higher worldwide demand for critical supplies and skilled labour could affect the Company’s ability to acquire them and lead to delays in delivery and unanticipated cost increases, which could have an effect on its operating costs, capital expenditures and revenue. Additionally, the Company will be relying on certain key third-party suppliers and contractors for equipment, raw materials and services used in, and the provision of services necessary for its business activities. As a result, its operations will be subject to a number of risks, some of which are outside of its control, including negotiating agreements with suppliers and contractors on acceptable terms, the inability to replace a supplier or contractor and its equipment, raw materials or services in the event that either party terminates the agreement, interruption of operations or increased costs in the event that a supplier or contractor ceases its business due to insolvency or other unforeseen events, and failure of a supplier or contractor to perform under its agreement with the Company or to support its future demand. The occurrence of one or more of these risks could have a material adverse effect on the Company’s business, results of operations and financial condition.

Commercializing its Products and Services

The Company is in the early stages of building out its COVID-19 testing centres. At the same time, the Company is pursuing other opportunities in the medical technology and related sectors. If the Company is unable to establish sales and marketing capabilities or enter into partnerships and other agreements with

third parties to host its testing centres or to sell and market its services, the Company may not be successful in commercializing its products and services. The Company does not have a significant sales or marketing infrastructure in place. To achieve commercial success for any of its products or services in the future, the Company must either develop a sales and marketing organization or outsource these functions to third parties. If the Company does not establish such sales and marketing capabilities successfully, it will not be successful in commercializing its products and services.

The Company is dependent on a small number of key partners that have agreed to host the Company’s mobile testing centres. Any loss of any of these key partners, or the failure to enter into agreements with additional third parties to host testing centres, could have a significant adverse impact on the Company’s ability to achieve its build-out objectives for its COVID-19 mobile testing centres.

Impact of Laws

The Company operates in Canada and the United States any may eventually expand into other countries. The Company is and will be subject to a variety of laws in Canada, the United States and abroad, including laws regarding health and safety, consumer protection, privacy, intellectual property and taxation that are continuously evolving and developing. The scope, enforcement and interpretation of the laws that are or may be applicable to the Company are often uncertain and may be conflicting. Compliance with applicable laws or regulations could be very difficult or liability could arise under these laws or regulations due to amendments to or evolving interpretation and enforcement of such laws and regulations. As a result, the Company could be directly harmed, and may be forced to implement new measures to reduce the exposure to this liability. This may require substantial resources to be expended or a modification of its products and services, which would harm the business, financial condition and results of operations of the Company.

Competition

The COVID-19 testing sector in particular and the medical technology industry in general is highly competitive. Competition could prevent the Company from achieving its proposed build-out of its mobile testing centres on a profitable basis, from securing sufficient access to testing kits and laboratories or from securing sufficient customers to achieve its business plan. More generally, competition may result in the Company being unable to: make accretive acquisitions; recruit or retain qualified employees or consultants; obtain necessary financing or capital; or achieve its projected financial performance. Increased competition could result in increased costs and lower prices for the Company’s products which, in turn, could reduce profitability. Consequently, the Company’s revenues, operations and financial condition could be materially adversely affected.

Dependence on Management Personnel

The Company is dependent upon the efforts, skill and business contacts of key members of management, the board of directors of the Company and the advisory board of the Company, for among other things, the information and deal flow they generate during the normal course of their activities and the synergies that exist amongst their various fields of expertise and knowledge. Accordingly, the Company’s success may depend upon the continued service of these individuals who are not obligated to remain consultants to the Company. The loss of the services of any of these individuals could have a material adverse effect on the Company’s revenues, net income and cash flows and could harm its ability to maintain or grow existing assets and raise additional funds in the future.

Management of the Company’s Growth

Significant growth in the business, as a result of acquisitions or otherwise, could place a strain on the Company’s managerial, operational and financial resources and information systems. Future operating results will depend on the ability of senior management to manage rapidly changing business conditions, and to implement and improve the Company’s technical, administrative and financial controls and reporting systems. No assurance can be given that the Company will succeed in these efforts. The failure to effectively manage and improve these systems could increase costs, which could have a materially adverse effect on the Company’s operating results and overall performance.

Exchange Rate Fluctuations

The Company conducts business with entities located in foreign jurisdictions, such as the United States. As a result, fluctuations in currency exchange rates could significantly affect the Company’s business, financial condition, results of operations and liquidity.

Tax

No assurance can be given that new taxation rules will not be enacted or existing rules will not be applied in a manner which could result in the Company being subject to additional taxation or which could otherwise have a material adverse effect on the Company’s results from operations and financial condition.

The Company may be subject to limitations on the repatriation of earnings in each of the countries where the Company does business. In particular, there may be significant withholding taxes applicable to the repatriation of funds from foreign countries to Canada. There can be no assurance that changes in regulations, including tax treaties, in and among the relevant countries where the Company or its investee companies do business will not take place, and if such changes occur, they may adversely impact the Company’s ability to receive sufficient cash payments from its subsidiaries.

Litigation Risks

Litigation and other claims may arise in the ordinary course of the Company’s business and, in addition to product or services-oriented allegations and personal injury claims, litigation could include securities law compliance, employee and customer claims, commercial disputes and intellectual property issues. These claims can raise complex factual and legal issues that are subject to risks and uncertainties and could require significant management time. Litigation and other claims against the Company, even if the Company is ultimately successful, could result in unexpected expenses and liabilities, which could materially adversely affect its operations, reputation and financial condition.

Cybersecurity Threats and Privacy Breaches

The Company relies on secure and adequate operations of information technology systems in the conduct of its operations. Access to and security of the information technology systems are critical to its operations. To the Company’s knowledge, it has not experienced any material losses relating to disruptions to its information technology systems. The Company has implemented ongoing policies, controls and practices to manage and safeguard the Company, its clients and its stakeholders from internal and external cybersecurity threats and to comply with changing legal requirements and industry practice. Given that cyber risks cannot be fully mitigated and the evolving nature of these threats, the Company may not have the resources or technical sophistication to anticipate, prevent, or recover from cyber-attacks and cannot assure that its information technology systems are fully protected from cybercrime or that the systems will not be inadvertently compromised, or without failures or defects. Disruptions to the Company’s information technology systems, including, without limitation, security breaches, power loss, theft, computer viruses,

cyber-attacks, natural disasters, and non-compliance by third-party service providers and inadequate levels of cybersecurity expertise and safeguards of third-party information technology service providers, may adversely affect the operations of the Company as well as present significant costs and risks including, without limitation, loss or disclosure of confidential, proprietary, personal or sensitive information and thirdparty data, material adverse effect on its financial performance, compliance with its contractual obligations, compliance with applicable laws, damaged reputation, remediation costs, potential litigation, regulatory enforcement proceedings and heightened regulatory scrutiny. A cybersecurity breach that results in the loss of clients’ medical information could cause a negative impact on the Company’s reputation and ability to continue to operate in the medical testing sector.

Indebtedness

The Company has, and may continue to have and incur indebtedness. As a result of challenging economic or other conditions affecting the Company, it may incur greater levels of indebtedness than currently exist. The amount of indebtedness that the Company currently has or which it may incur in the future could have a material adverse effect on its business, results of operations or financial condition, for example, by (i) limiting its ability to obtain additional financing, (ii) requiring it to dedicate a substantial portion of its cash flow generated from operations to payments on its indebtedness, thereby reducing the funds available for other purposes, (iii) making the Company more vulnerable to economic downturns, and (iv) limiting its flexibility in planning for, or reacting to, competitive pressures or changes in its business environment. There can be no assurance that the Company will be able to generate sufficient cash from its operations to pay its debts and other financing obligations. Each of these factors is, to a large extent, subject to economic, financial, competitive, regulatory, operational and other factors, many of which are beyond the Company’s control.

Intellectual Property Rights

The Company may in the future seek patent or other protection for its intellectual property rights. If the Company is unable to obtain patents or otherwise protect its trade secrets or other intellectual property and operate without infringing on the proprietary rights of others, its business, financial condition and results of operations could be materially adversely affected.

Risks Relating to the Financial Condition of the Company Additional Funding Requirements

The Company may require additional financing in order to carry out its commercialization activities. Failure to obtain such financing on a timely basis could cause the Company to delay or indefinitely postpone the build-out of its COVID-19 testing centres and its other potential projects, curtail or terminate its operations, or miss certain acquisition opportunities. If the Company’s cash flows from operations is not sufficient to satisfy its capital expenditure and other financing requirements, there can be no assurance that additional debt or equity financing will be available to meet these requirements or be available on favorable terms. The Company may issue securities on less than favorable terms to raise sufficient capital to fund its business plan. Any transaction involving the issuance of equity securities or securities convertible into Common Shares would result in dilution, possibly substantial, to present and prospective holders of Common Shares.

Insufficient Cash Flow and Funds in Reserve

The Company’s cash flow and funds in reserve may not be sufficient to fund its ongoing activities at all times and from time to time and it may require additional financing in order to carry out its activities. In addition,

the Company may incur major unanticipated liabilities or expenses. Although the Company has been successful in the past in financing its activities, there can be no assurance that the Company will be able to obtain additional financing on commercially acceptable terms. The ability of the Company to arrange such financing in the future will depend in part upon the prevailing capital market conditions as well as the business performance of Company. There is risk that if the economy and banking industry experienced unexpected and/or prolonged deterioration, the Company’s access to additional financing may be affected. This may be further complicated by the limited market liquidity for shares of smaller companies such as the Company, restricting access to some institutional investors. Due to uncertainty in the capital markets, the Company may from time to time have restricted access to capital and increased borrowing costs. To the extent that external sources of capital become limited, unavailable, or available on onerous terms, the Company’s ability to make capital investments and maintain existing assets may be impaired, and its assets, liabilities, business, financial condition, results of operations and prospects may be affected materially and adversely as a result.

Conflicts of Interest may Arise

Certain current or future directors and officers of the Company and its subsidiaries may be shareholders, directors and officers of other companies that may operate in the same sectors as the Company. Such associations may give rise to conflicts of interest from time to time. The directors and officers of the Company are required by law to act honestly and in good faith with a view to the best interests of the Company and to disclose any interest that they may have in any project or opportunity of the Company. If a conflict of interest arises at a meeting of the board of directors of the Company, any director in such conflict is required under the applicable corporate laws to disclose his or her interest and to abstain from voting on such matter.

Risks Relating to the Common Shares

Market Price of Common Shares may Experience Volatility

The market price of the Common Shares has been volatile in the past and may continue to be volatile. The market price is, and could be, subject to wide fluctuations due to a number of factors, including actual or anticipated fluctuations in the Company’s results of operations, changes in estimates of its future results of operations by management or securities analysts, market rumours, investments or divestments by the Company or its competitors and general industry changes.

Many of the factors that could affect the market price of the Common Shares are outside of the Company’s control. Broad market fluctuations, as well as economic conditions generally, may adversely affect the market price of the Common Shares. The stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. These fluctuations often have been unrelated or disproportionate to the operating performance of those companies. These broad market and industry fluctuations, as well as general economic, political and market conditions such as recessions, interest rate changes or international currency fluctuations, may negatively impact the market price of the Common Shares.

Shareholders’ Interest in the Company may be Diluted in the Future

If the Company raises additional funding by issuing additional equity securities, or securities convertible into equity, such financing may substantially dilute the interests of shareholders.

The Company has Never Paid Dividends and may not do so in the Foreseeable Future

The Company has never paid cash dividends on its Common Shares. Currently, the Company intends to retain its future earnings, if any, to fund the development and growth of its business, and does not anticipate paying any cash dividends on its Common Shares in the near future. As a result, shareholders will have to rely on capital appreciation, if any, to earn a return on investment in any Common Shares in the foreseeable future.

Private Issuers and Illiquid Securities

The Company may invest in securities of private issuers, illiquid securities of public issuers and publicly traded securities that have low trading volumes. The value of these investments may be affected by factors such as investor demand, resale restrictions, general market trends and regulatory restrictions. Fluctuation in the market value of such investments may occur for a number of reasons beyond the control of the Company and there is no assurance that an adequate market will exist for investments made by the Company. Many of the investments made by the Company may be relatively illiquid and may decline in price if a significant number of such investments are offered for sale by the Company or other investors.

Due Diligence

The due diligence process undertaken by the Company in connection with acquisitions may not reveal all facts that may be relevant in connection with an acquisition. Before making aquisitions, the Company will conduct due diligence that it deems reasonable and appropriate based on the facts and circumstances applicable to each acquisition. When conducting due diligence, the Company may be required to evaluate important and complex business, financial, tax, accounting, environmental and legal issues. Outside consultants, legal advisors, accountants and acquisition banks may be involved in the due diligence process in varying degrees depending on the type of acquisition. Nevertheless, when conducting due diligence and making an assessment regarding an acquisition, the Company will rely on resources available, including information provided by the target of the acquisition and, in some circumstances, third-party investigations. The due diligence investigation that is carried out with respect to any acquisition opportunity may not reveal or highlight all relevant facts that may be necessary or helpful in evaluating such acquisition opportunity. Moreover, such an investigation will not necessarily result in the acquisition being successful.

Non-controlling Interests

The Company has investments. Such instruments and securities may be acquired through trading activities or through purchases of securities from the issuer. These investments are subject to the risk that the company in which the investment is made may make business, financial or management decisions with which the Company does not agree or that the majority stakeholders or the management of the investee Company may take risks or otherwise act in a manner that does not serve the Company’s interests. If any of the foregoing was to occur, the values of the Company’s investments could decrease and its financial condition, results of operations and cash flow could suffer as a result.

Additional Information

Additional information about the Company is available for viewing on SEDAR at www.sedar.com and at www.neo.inc.