Medivolve Inc. — Management Reports 2023

Apr 3, 2023

MEDIVOLVE INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

As used in this management’s discussion and analysis of financial condition and results of operations (“MD&A”), unless the context indicates or requires otherwise, all references to the “Company”, “Medivolve”, “we”, “us” or “our” refer to Medivolve Inc. together with our subsidiaries, on a consolidated basis as constituted on December 31, 2022.

This MD&A is intended to supplement and complement the Company’s consolidated financial statements and the accompanying notes for the years ended December 31, 2022 and 2021, and should be read in conjunction with the Company’s annual audited consolidated financial statements and the accompanying notes for the fiscal years ended December 31, 2022 and 2021, and the related MD&A. The financial information presented in this MD&A is derived from the Company’s consolidated financial statements for the years ended December 31, 2022 and 2021, which have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). All dollar amounts in this MD&A are in Canadian dollars except where otherwise indicated.

Effective December 8, 2022 the Company completed the consolidation of the common shares of the Company on a 15:1 basis. All references in this MD&A to common shares, units, options, warrants, and other securities, and their applicable issue and exercise prices, have been restated to give effect to the consolidation, notwithstanding that such numbers may relate to a period preceding the consolidation.

This MD&A is dated as of March 31, 2023.

Additional information relating to the Company, including the Company’s most recent annual information form, can be found on SEDAR at www.sedar.com.

FORWARD-LOOKING INFORMATION

Certain information contained in this MD&A constitutes forward-looking information within the meaning of Canadian securities laws (collectively referred to as "forward-looking statements"). These statements relate to future events or the Company’s future performance. All statements other than statements of historical fact are forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “continues”, “forecasts”, “projects”, “predicts”, “intends”, “anticipates” or “believes”, or variations of, or the negatives of, such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “should”, “might” or “will” be taken, occur or be achieved. Specifically, this MD&A contains forward-looking statements regarding: the availability of funding for COVID-19 testing by third-party healthcare payors, and anticipated reimbursement levels; expectations regarding the operation of the Company’s COVID-19 testing centres; expectations regarding the Company’s partnerships with various third parties; the expansion of the Company’s medical testing business and the roll-out of a telehealth platform; availability of laboratory testing required to support the Company’s COVID-19 testing business; the profitability of the Company’s current business; the availability of funding to finance the growth of the Company’s business; the market for rapid COVID-19 testing; the sufficiency of cash from operations to fund planned growth and development activities, the ability to raise capital when required; and expected credit losses.

Forward-looking statements are made based upon management’s beliefs, estimates and opinions on the date the statements are made, which management believes are reasonable. In order to make such forward-looking statements, the Company has made certain assumptions about its business, operations and the economy in general, in particular in light of the impact of the novel coronavirus and COVID-19 on each of the foregoing.

Forward-looking statements involve known and unknown risks, uncertainties and assumptions and accordingly, actual results and future events could differ materially from those expressed or implied in such statements. You are cautioned not to place undue reliance on any forward-looking statements included in this MD&A. By its nature, this information is subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. Factors that could cause future results or events to differ materially from current expectations expressed or implied by the forward-looking statements include, among others, the following: uncertainties relating to COVID-19 and its past, present and future variants, natural immunity, the effectiveness of COVID-19 vaccines, and the demand for COVID-19 testing; uncertainties relating to the demand for a telehealth platform and pharmacy services; cash flow from operations may be insufficient to fund planned growth; the Company may fail to negotiate extensions to the Simon Lease (as defined below), or integrate Marbella (as defined below) into the Company’s business operations as expected; financing may not be available if and when needed on acceptable terms, or at all; the strength of the global economy and financial system; foreign exchange fluctuations; the inability to manage or repay indebtedness; competition, social, political, environmental and economic risks; risks inherent to the healthcare and medical-related industries; risks inherent to the technological industry, including the emergence of disruptive technologies that may impact the demand for the Company’s

1

products and services; the Company’s inability to develop and launch new products or services; risks of not achieving expected expansion and/or market penetration; relationships with third parties may be terminated; COVID-19 testing kits may not be available in required quantities at prices acceptable to the Company, or at all; risks inherent in the Company’s operations; the complexities of insurance billing and reimbursements; necessary licenses, permits and approvals from various governmental authorities may not be received or maintained; government regulations and licensing requirements may change; reliance on outside contractors to conduct certain activities; defects in or loss of intellectual property rights; the Company’s inability to acquire or license the intellectual property rights required to launch new services; loss of key personnel and the Company’s inability to attract and retain qualified personnel; technology and cybersecurity failures; risks associated with managing employees in various jurisdictions; potential losses, liabilities and damages related to the Company’s business which are uninsured or uninsurable; litigation risks; volatility of global financial conditions; tax laws and interpretation of tax laws may change in a manner adverse to the Company, all as more particularly described in this MD&A and under the heading “Risk Factors” in the Company’s most recent annual information form, available on SEDAR at www.sedar.com. 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. You should carefully consider the risk factors discussed in this MD&A, and under the heading “Risks Factors” in our most recent annual information form. This list is not exhaustive of the factors that may impact the forward-looking statements.

The forward-looking statements contained or incorporated by reference in this MD&A are made as of the date of this MD&A or as otherwise specified. Other than as specifically required by law, the Company undertakes no obligation to update any forwardlooking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results otherwise. If the Company does update one or more forward-looking statement, no inference should be drawn that it will make additional updates with respect to those or other forward-looking statements.

All of the forward-looking information contained in this MD&A is expressly qualified by the foregoing cautionary statements.

For a discussion of risk factors, please refer to the Company's Annual Information Form for the year ended December 31, 2022, which is available on www.sedar.com. In certain instances, references are made to relevant notes in the financial statements for additional information. Additional information relating to the Company, including the Company’s annual information form, can be found on SEDAR at www.sedar.com.

BUSINESS OVERVIEW

Medivolve Inc. is a Canadian healthcare technology company headquartered in Toronto, Canada. Medivolve provides comprehensive clinical laboratory testing for COVID-19 through a distributed network of retail collection sites. The Company’s mission is to improve health and lives by delivering world-class diagnostic solutions—starting with COVID-19—as well as to enable faster and better care to patients through innovative technology. Medivolve and its subsidiaries, Collection Sites, LLC and Medivolve Pharmacy (dba Marbella Pharmacy), operate a distributed network of six retail patient-care locations across the United States (five Collection Sites and one Marbella Pharmacy). With approximately 80 employees and consultants, the Company (through Collection Sites) has served hundreds of thousands of patients across the United States and facilitated more than 1,588,000 clinical tests since 2021.

The Company’s common shares are listed on the NEO Exchange under the symbol “MEDV”. In connection with its change of business from an investment issuer to a life sciences operating company, the Company changed its name from “Questcap Inc.” to “Medivolve Inc.” on December 21, 2020, and its ticker symbol from “QSC” to “MEDV” on January 7, 2021. The Company has two business units: Collection Sites Diagnostics or “CSD”, the Company’s primary business unit, and Medivolve Pharmacy Division or “MPD”.

CSD is a network of mobile COVID-19 testing centres in the United States, through which CSD provides service at no up front cost to the patient. In states where government programs provide reimbursement for COVID-19 tests administered to individuals without health insurance, the market to which CSD provides service includes both individuals with and without health insurance, and seeks payment from the patient’s insurer, if applicable, and/or available government programs. In states without such programs, the market to which CSD provides service is limited to individuals with health insurance, and CSD seeks payment from the patient’s insurer. As at December 31, 2022, the CSD had locations in California servicing both insured and uninsured patients, and Florida, servicing insured patients.

MPD provides retail pharmacy and mail-order pharmacy services related to COVID-19, antibiotics, dermatology, family medicine, immunology, neurology, pain management, paediatrics, preventive medicine, and psychiatry to patients in Southern California. Since early 2022, Medivolve has been evaluating additional related business lines to generate revenue outside of the COVID19 testing business operated through CSD, including the introduction of a MSO through which it will, through a telehealth

2

platform, connect patients with physicians, and facilitate and manage the provision of virtual consultation, diagnosis, and treatment services.

CSD

The Company’s primary business activities are conducted through its wholly owned subsidiary, Collection Sites, which has approximately 75 employees and has built a network of mobile COVID-19 testing centres across the United States. Each site is a modular pod “cube” licensed by a lab certified by the United States Government Department of Health and Human Services (“HHS”) under the Clinical Laboratory Improvement Amendments of 1988 (“CLIA”) and staffed by trained technicians offering:

• Instant COVID-19 Antigen Test (“rapid antigen test”) Results

• Rapid IgG/IgM Antibody Tests (“rapid antibody tests”) Results

• RT-PCR COVID-19 Test (“PCR test”) Results

CSD has capacity to process tests in excess of 200,000+ patient specimens monthly. The testing site cubes are located at shopping centres and strip malls in the United States to meet customers where they are. The Company has all of its lease agreements for its testing sites with Simon Property Group, a major property partner in the United States. CSD couriers the specimens to its laboratory testing partner Massachusetts Laboratories, Inc. (“Mass Labs”), who since May 2021 has been the sole laboratory working with CSD. Mass Labs was chosen as the exclusive partner in order to accommodate PCR testing capacities, its billing platform and connectivity to different insurance companies and the automation of its billing platform saving payroll costs on dedicated billing personnel.

CSD’s technology-enabled solutions help to improve COVID-19 outcomes by providing innovative decision-support programs. CSD played a critical role in COVID-19 diagnosis and management by delivering approximately 426,000 patient reports in 2022 (2021 – 1,100,000 patient reports), and approximately 1,588,000 patient reports since acquisition. These reports integrated patient-specific diagnostic information and evidence-based healthcare content to help physicians and patients better manage health. Additionally, CSD's detailed test results promoted physician adherence to evidence-based treatment guidelines.

CSD's centralized and proprietary software platform, its Electronic Health Records app (“EHR”), focuses on supporting clinical staff, is a series of assets and functionalities that enhance the customer experience and provide an end-to-end lab solution. These assets and functionalities include:

• Express electronic ordering for internal staff at CSD;

• Integrated results viewing and enhanced reports;

• Internal analytics that provide one-click trending of patient, test and population data;

• Integration with results viewing and enhanced reports;

• Clinical Decision Support tools at the point of testing;

• Services-oriented architecture with rules-based engines; and

• Seamless integration with clinical workflow.

CSD’s centralized and proprietary patient product is a series of assets and functionalities that enhances the patient experience. These assets and functionalities include:

• A patient portal optimized for web and market-leading mobile devices;

• Integrated results viewing and patient education materials;

• Online appointment scheduling; and

• A clinical research opt-in acknowledgement option.

The Company believes physicians, patients, healthcare delivery systems and payers are expected to benefit from this innovative technology. The EHR’s rules engine interfaces with payer policies for ordering, utilization, adjudication, and payment. The engine supports the selection of tests that improve quality and supports evidence-based guidelines for patient care. This innovation manages laboratory testing utilization trends without disrupting physician workflow and helps maximize the end quality of care for patients.

The billing process for laboratory services is intricate and involves various payers, such as managed care organizations, Medicare, Medicaid, physicians and physician groups, hospitals, patients, and employer groups. Each of these entities has different billing requirements. Additionally, billing arrangements with third-party administrators can further complicate the process. Physicians and physician groups may order tests for their patients, which may then be billed to a different payor depending on the beneficiary's medical benefits. Most laboratory services are billed to a party other than the physician or authorized person who ordered the test.

Through its EHR, CSD utilizes a centralized billing system powered by Mass Labs in the collection of approximately 99% of its accounts receivable. This system generates bills to CSD customers based on payor type. Patient and third-party billing are typically semi-monthly. Accounts receivable are then monitored by billing personnel, and follow-up activities are conducted as

3

necessary. Expected credit losses are recorded as a percentage of disaggregated sales considered necessary to maintain the allowance for doubtful accounts at an appropriate level, based on CSD's experience with its accounts receivable. CSD writes off accounts against its provision for expected credit losses when it is determined that said account receivable will not be collected. Patient and third-party accounts are written off after the normal cycle has ensued. Major components of CSD’s cost of sales include lab fees including those that are variable, payroll expenses related to the operation of the cubes, personal protective equipment, freight delivering samples and costs of the tests.

During the year ended December 31, 2022, CSD's revenue was largely generated from government reimbursement programs administered by the Health Resources and Services Administration (“HRSA”), an agency of HHS, as well as Medicare, Medicaid and other state funded programs. However, other commercial laboratory testing businesses not related to Medicare or Medicaid nevertheless heavily depend on government healthcare programs to continue operating. As mandated by law, no patients participating in the HRSA program for uninsured individuals were billed for services. Any payments from HRSA or state funded programs constitute payment in full for services rendered. In recent years, both governmental and private sector payers have made efforts to contain or reduce healthcare costs. This has included reducing reimbursement for clinical laboratory services.

As part of enacted legislation—the Families First Coronavirus Response Act, the Paycheck Protection Program and Health Care Enhancement Act, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, and the Coronavirus Response and Relief Supplemental Appropriations Act (CRRSA) — HHS, through HRSA, provided claims reimbursement to health care providers generally at Medicare rates for testing uninsured individuals for COVID-19, for treating uninsured individuals with a COVID-19 primary diagnosis and for COVID-19 vaccine administration to the uninsured. In order to establish eligibility for funding administered by HRSA for COVID-19 vaccination, testing and/or care, HRSA required that a service provider: (i) have checked for health care coverage eligibility and confirmed that the patient is uninsured, and verified that the patient does not have coverage through an individual, or employer-sponsored plan, a federal healthcare program, or the Federal Employees Health Benefits Program at the time services were rendered, and that no other payer would reimburse the service provider for that patient; (ii) accept defined program reimbursement as payment in full; (iii) agree not to balance bill the patient; and (iv) agree to program terms and conditions and may be subject to post-reimbursement audit review. It was announced that HRSA would cease accepting claims effective March 23, 2022.

Following the discontinuance of uninsured patient testing programs administered by HRSA, the Company continued providing services where alternative government programs provided for the reimbursement of medical services provided to uninsured patients. For example, as of March 18, 2020, the federal Families First Coronavirus Response Act, Section 6004, authorized state Medicaid programs to provide access to coverage for medically necessary COVID-19 diagnostic testing, testing-related services, and treatment at no cost to the individual. On August 28, 2020, the California Department of Health Care Services implemented the COVID-19 Uninsured Group Program enacted pursuant to the authorization provided by the Families First Corona Virus Response Act, covers COVID-19 diagnostic testing, testing-related services, and treatment services for uninsured or undocumented individuals, including hospitalization and all medically necessary care, at no cost to the individual under California’s Medicaid program. Sales in California represent a significant majority of CSD’s sales (approximately 96% in the three months ended December 31, 2022, and 79% in the year ended December 31, 2022). In states outside of California that have not implemented government reimbursement programs, the Company continues to provide no-charge testing to insured patients and bills the relevant insurance providers.

The availability of government programs covering the provision of COVID-19 tests to uninsured persons is important to the continuation of Collection Sites’ retail testing service as currently operated, as many patients without health insurance choose to be tested for COVID-19 in retail settings such as those that Collection Sites operates. If government funding for testing services for individuals without health insurance is materially decreased or terminated, Collection Sites’ testing volumes and, accordingly, revenue, are likely to decline. Based on the current sunset sequence outlined by California’s Medicaid program the COVID-19 Uninsured Group ends on April 30, 2023. The Company does not anticipate new programs to replace this due to the current status of the COVID-19 pandemic. The Company intends to terminate its COVID-19 testing services when government uninsured patient testing programs are discontinued and focus exclusively on introducing new products and services.

Due to HRSA ceasing to accept claims, the Company has assessed its expected credit losses as insurance receivables and at individual state levels based on programs available. Should a balance classified previously as an insurance receivable be denied due to no coverage, the Company will seek payment under available state program covering uninsured receivables if time permits. See “ Financial Instruments and Other Instruments – Financial Risk Management – Credit risk ” below.

MPD

MPD provides retail pharmacy and mail-order pharmacy services related to COVID-19, antibiotics, dermatology, family medicine, immunology, neurology, pain management, paediatrics, preventive medicine, and psychiatry.

MPD operates a mail order pharmacy in California with a single location in San Juan Capistrano. This pharmacy takes orders from plan members or their prescribers via mail, telephone, fax, e-prescribing or the Internet. Staff pharmacists review prescriptions and refill requests with the assistance of prescription management systems. This review may involve

4

communications with the prescriber and, with the prescriber’s approval when required, can result in generic substitution, therapeutic interchange or other actions designed to help reduce cost and/or improve quality of treatment.

MPD dispenses prescription drugs directly through its mail order dispensing and specialty mail order pharmacy as well as through its retail pharmacy. All prescriptions processed by the MPD are analyzed and documented by prescription management systems. These systems provide features and functionality to allow a plan member to utilize their prescription drug benefits. These systems also streamline the process by which prescriptions are processed by MPD staff and network pharmacists. The automation of reviews—including plan eligibility, early refills, duplicate dispensing detection, appropriateness of dosage, drug interactions or allergies, over-utilization and potential fraud—improves the accuracy and efficiency of the process.

The Company believes that the MPD business will continue to be an integral aspect of its operations due to industry demographics, e.g., an aging American population consuming more prescription drugs, prescription drugs being used more often as the first line of defense for managing illness, the introduction of new pharmaceutical products, and Medicare Part D growth. The Company believes that the MPD retail pharmacy business benefits from investment in both people and technology, as well as innovative collaborations with health plans, pharmacy benefit managers and providers. Consumers want their prescriptions filled accurately, and they need medications properly managed, with useful information about how to make the most of their healthcare. The Company has responded to this by providing integrated pharmacy healthcare services that it believes make it easier for consumers to engage in healthier behaviours and save money.

Planned Expansion of Testing Services and Telehealth Platform

Medivolve is exploring opportunities to diversify its business by expanding the range of conditions for which it offers diagnostic tests through a telehealth platform and the establishment of a healthcare management services organization (“MSO”). The Company expects to begin offering tests for conditions other than COVID-19 beginning in Q1 2024, which is dependent upon the Company achieving the milestones outlined below as part of the launch of the telehealth platform and MSO. The Company has employed phlebotomists at each of its test collection sites, which will facilitate the offering of expanded testing services. See also See “ Risk Factors – Intellectual Property – Telehealth Platform ”.

The Company has been delayed in developing and launching the telehealth platform and MSO as it has been concentrating efforts on the collection of its receivables in order to fund such development and launch.

Medivolve is also exploring opportunities in remote patient monitoring, which would leverage the telehealth platform and infrastructure expected to be developed for the previously communicated expansion of testing services. The Company would look to offer remote patient monitoring devices to patients to use at home in order to check important health metrics such as blood sugar, blood pressure and weight and use a physician through an MSO (described below) to coordinate physician/patient interactions and provide medical billing services for the program. The Company will need to complete the milestones below in order to offer these additional services to the market.

As noted above, Medivolve also intends to launch an MSO through which it will, through the telehealth platform, connect patients with physicians, and facilitate and manage the provision of virtual consultation, diagnosis, and treatment services in partnership with qualified health practitioners. The MSO will be organized by the Company in accordance with applicable rules governing the practice of medicine in the United States. For example, clinical services will be provided to patients by physicians through their independent medical practices, and all licensing requirements associated with the provision of such clinical services will be satisfied by the participating physicians. The Company, through the MSO utilizing the telehealth platform, will coordinate physician/patient interactions, provide medical billing and practice management services, and facilitate access to diagnostic testing and pharmacy services through Collection Sites and Marbella Pharmacy. Medivolve, through the MSO, will charge fees for providing such services to the physicians that enter into arrangements with the MSO.

The Company intends to market the telehealth platform to its legacy customers of its COVID-19 testing services, as well as the general public in the State of California; potential competitors include Teledoc Health. The Company anticipates providing telehealth services by way of a combination of virtual and in-person meetings, whereby patient will have virtual meetings with medical professionals through a web-based and/or mobile application to be followed by in-person visits at the Company’s testing sites to collect samples.

Development of the technological infrastructure for the telehealth platform is underway. The Company is designing the platform to help physicians who provide care through the platform understand why different patients with the same clinical diagnosis require treatments with different medications, in turn helping them to prescribe the most effective medications and treatments for each patient, the first time. Expanding its initial scope of development, the Company is also developing a framework to support physicians in providing remote patient monitoring services as part of its overall telehealth platform. Medivolve believes this approach will lead to improvements in patient care, making it a compelling alternative to telehealth service offerings currently in the market. The Company intends to develop the telehealth platform in reliance on multiple third-party application programs. Development has been delayed as management has been concentrating its efforts on the collection of its receivables in order to fund the development and launch.

5

As of the date hereof, the telehealth platform continues to be in development. Development has been delayed as a result of management allocating resources to collecting receivables. The Company plans to launch a preliminary version of the telehealth platform in Q1 2024. Significant milestones required for this to occur are as follows:

==> picture [468 x 305] intentionally omitted <==

----- Start of picture text -----

Cost to
Milestone and Status Timing Complete
Organize an MSO by establishing an entity and entering into a management Q2 2023 $30,000
services and licensing agreement with a corporation qualified to practice
medicine in the United States. A qualified corporation(the “Physicians’
Network”) has been identified, final terms of the arrangement have been
negotiated, and definitive agreements have been drafted. Closing remains
subject to execution of definitive documentation and tax structuring.
Develop and test telehealth platform technology stack. Key elements that Q2 2023 to Q4 $200,000
remain to be developed include: modules for (and integration of) web 2023
conferencing to facilitate patient-provider interactions remotely, pharmacy
integration, billing integration, as well as regulatory and compliance tracking
features). Web conferencing services are anticipated to include both an
audio-only option as well as an audio-visual option to be utilized at the
discretion of the provider and the needs of the patient.
Credentialing and enrolments with major insurance payors. Credentialing is Q2 2023 to Q4 $600,000
necessary to facilitate the reimbursement for services rendered through the 2023
telehealth platform. The Company has a team that is actively working on the
credentialing process. The Company has identified a medical clinic with
existing credentialing for the physicians’ network to purchase. The
transaction is expected to close in Q2 2023, after which the credentials will
be transitioned to the Physicians’ Network.
Expand the Physicians’ Network and, by extension, the MSO by retaining Q3 2023 to Q4 $70,000
additional physicians, nurse practitioners, and other health care providers to 2024
provide clinical services through the telehealth platform. Medivolve will
facilitate the recruitment and onboarding of physicians in Q4 2023.
Marketing campaign Q4 2023 to Q1 $100,000
2024
Commercial launch of preliminary telehealth platform. Q1 2024 $1,000,000
----- End of picture text -----

OVERALL PERFORMANCE

Collection Sites was acquired by Medivolve on August 24 2020, during the third wave of the COVID-19 pandemic. Originally launched in Las Vegas, Nevada, Collection Sites quickly became one of the larger COVID-19 testing businesses on the West Coast and operated 77 retail test collection locations at its peak. During the height of the third wave, in January 2021, Collection Sites saw a strong patient following of around 2,500 patients per day cumulatively across 77 locations, an average of 32.4 patients per day per location. As the delta variant of COVID-19 became prominent in the U.S. during the fall of 2021, demand for COVID testing rose, peaking at approximately 4,500 patients per day by January 2022, which coincided with the spread of the Omicron variant across the United States. With only 24 retail locations operating in January 2022, Collection Sites saw approximately 188 patients per day, per location. As COVID-19 positivity and death rates began to decline in late January 2022, the Company saw a corresponding decrease in patient volumes into March 2022. The Company continued to see similar patient volumes from March 2022 through to December 2022, as no events that increased demand for testing occurred during that period. Starting in March 2022, Company began streamlining its operations to keep only strategic and profitable sites while improving patient care.

As at December 31, 2022, Collection Sites operated 16 test collection locations, of which 15 were located in California, and 1 was located in Florida with an average of approximately 24 patients per day. During the third quarter of 2022, the Company closed all testing sites outside of California, with the exception of Coral Square, Florida, which was financially sustainable on the basis of insured patient testing. Due to the lack of viable government programs outside of California, the Company was not able to provide no-cost testing to uninsured patients, which resulted in decreased patient testing volumes. Testing sites as at December 31, 2022, were:

6

==> picture [348 x 415] intentionally omitted <==

----- Start of picture text -----

Location Address City State Zip Code
796 Northridge
Northridge Mall Salinas CA 93906
Mall
Brea Mall 1065 Brea Mall Brea CA 92821
Camarillo Premium 540 E. Ventura
Camarillo CA 93010
Outlets Boulevard
Carlsbad Premium 5620 Paseo del
Carlsbad CA 92008
Outlets Norte
Folsom Premium 13000 Folsom
Folsom CA 95630
Outlets Boulevard
Gilroy Premium 681 Leavesley
Gilroy CA 95020
Outlets Road
447 Great Mall
Great Mall Milpitas CA 95035
Drive
The Shops At Mission 555 The Shops at
Mission Viejo CA 92691
Viejo Mission Viejo
Ontario Mills 1 Mills Circle, Suite
Ontario CA 91764
Shopping Center 1
Petaluma Village 2200 Petaluma
Petaluma CA 94952
Premium Outlets Blvd North
Stoneridge Shopping One Stoneridge
Pleasanton CA 94588
Center Mall
1071 Santa Rosa
Santa Rosa Plaza Santa Rosa CA 95401
Plaza
Del Amo Fashion 3 Del Amo Fashion
Torrance CA 90503
Center Center
Vacaville Premium
321 Nut Tree Road Vacaville CA 95687
Outlets
Sherwood Mall 5308 Pacific Ave Stockton CA 95207
9469 West Atlantic
Coral Square Coral Springs FL 33071
Boulevard
----- End of picture text -----

Subsequent to the end of the 2022 financial year, in response to further declines in patient testing volumes, the Company closed additional testing sites where there were insufficient patient volumes to operate profitably, including Coral Square. Testing sites as of March 31, 2023, were:

==> picture [348 x 130] intentionally omitted <==

----- Start of picture text -----

Location Address City State Zip Code
Brea Mall 1065 Brea Mall Brea CA 92821
Camarillo Premium 540 E. Ventura
Camarillo CA 93010
Outlets Boulevard
The Shops At Mission 555 The Shops at
Mission Viejo CA 92691
Viejo Mission Viejo
Ontario Mills 1 Mills Circle, Suite
Ontario CA 91764
Shopping Center 1
Sherwood Mall 5308 Pacific Ave Stockton CA 95207
----- End of picture text -----

The Company earns materially all of its revenue by providing COVID-19 testing to patients with zero out-of-pocket cost, and billing the cost of tests to applicable insurance providers and/or government programs through its EHR and in collaboration with Mass Labs (the “Increased Patient Access Program”). During the year ended December 31, 2022, under the Increased Patient Access Program, Collection Sites earned average per-test revenue of USD$35 per rapid antigen test, USD$45 per rapid antibody

7

test, USD$95 per PCR test billed to an insurance provider, and USD$75 billed to government programs for uninsured patients in California, representing the average claim reimbursement amounts received from insurance companies and government programs. Previously HRSA remitted USD$100 per PCR billed.

The Company’s sole material business is its mobile COVID-19 testing in the United States; therefore, the Company’s financial performance currently depends on market demand for such testing. A majority of the COVID-19 tests provided by the Company are delivered under the Increased Patient Access Program. Accordingly, patient demand for COVID-19 tests provided by the Company, and the Company’s ability to obtain payment for the COVID-19 tests it delivers, depend on the availability of coverage for COVID-19 tests under insurance and government programs. Programs covering COVID-19 testing for uninsured individuals that were administered by HRSA ceased accepting new claims in 2022, and California’s state-level government program, the COVID-19 Uninsured Group implemented by the California Department of Health Care Services, scheduled to end on April 30, 2023. The Company intends to diversify its testing service offerings and delivery models, which will reduce its dependence on revenue from COVID-19 testing services. See “ Business Overview – Planned Expansion of Testing Services and Telehealth Platform ” above. If the Company’s diversification efforts are not successful, and demand for COVID-19 testing in the United States decreases or there is a material reduction in the availability of COVID-19 test coverage under health insurance plans provided by major insurers or government programs, it could have a material adverse effect on the Company’s business, operations, results of operations, and financial condition. See “ Business Risks and Uncertainties ” below.

The Company currently has current assets of $16,847,657 as at December 31, 2022 a decrease from the $55,857,122 for the comparable year ended in 2021. This is contrasted with current liabilities of $17,679,517 as at December 31, 2022 a decrease from the $40,521,320 for the comparable year ended in 2021. This leaves the Company with net current liabilities, which is defined as current assets less current liabilities of $831,860 as at December 31, 2022 and net current assets of $15,335,802 as at December 31, 2021. The decrease in the Company’s financial position is primarily a result of increased general and administrative costs, which were $23,163,830, decreasing revenues due to the evolution of the COVID-19 pandemic, which resulted in a decrease in accounts receivable as well as the cessation of the uninsured patient program for COVID-19 testing administered by HRSA, which resulted an increase in expected credit losses during the year. The Company had positive cash from operating activities during the fiscal year of $6,044,416 compared to cash used in operating activities of $8,322,326, however this was due to timing of revenues during the previous financial period in the 4[th] quarter of 2021 leading to a large receivable balance as at December 31, 2021. The increase in cash from operating activities during the 2022 fiscal year was primarily driven by the collection of these receivables. As at December 31, 2022 the Company is focused on maintaining cash balances in order to successfully rollout its expansion of testing services and telehealth platform. The Company’s financial condition is linked to its ability to collect its testing receivables, specifically there is approximately $9.6 million from the uninsured COVID-19 patient group administered by Medi-Cal. Additionally, should the Company’s planned rollout of its expansion in testing services and telehealth platform be unsuccessful or delayed, it is possible the Company does not have adequate financial resources to continue with its rollout.

INVESTMENTS AND MATERIAL AGREEMENTS

Profit-sharing agreement with More Than Just Rice, Inc.

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.

The Company was obliged to use its best efforts to work with MJTR to deliver, or cause to be delivered: (i) up to USD$250,000 to MJTR in reimbursement for actual costs in connection with the product and the implementation of the supply agreement and (ii) USD$10,000,000 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. 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.

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 of the test kits not being available to sell in the United States, the profit-sharing agreement with MTJR has been terminated, and the Company and MTJR have instituted legal proceedings to recover funds advanced to PCL. An arbitration hearing initially scheduled for Q1 2023 was postponed, and has been tentatively re-scheduled for November 2023. As this would represent a contingent gain, there are no amounts recorded on the consolidated financial statements for this.

Investment in Amino Therapeutics Inc. (“Amino Therapeutics”)

On April 13, 2020, the Company acquired 40% of the issued and outstanding shares of Amino Therapeutics Inc. (“Amino Therapeutics”). Amino Therapeutics holds the exclusive rights to leverage its parent company’s, Exponential Genomics, Inc.

8

(“Xenomics”) XenoArray platform to engineer a potential treatment for COVID-19 based on peptide protease inhibitors. The XenoArray platform is developed to genetically modify multiple microbial strains to produce thousands of peptide-based protease inhibitors in parallel. The terms of transaction (the “Amino Investment”) were as follows:

The collective shareholders of Amino Therapeutics agreed to sell a 40% equity interest to Medivolve in exchange for the issue of 1,000,000 Common Shares at $4.575 per share and cash payments of $2 million, including USD$100,000 payable on the closing date (paid), and a further USD$1.9 million payable in installments between July 30, 2020 and December 15, 2021 (USD$80,000 paid). As additional consideration, Amino Therapeutics issued to the Company a warrant entitling the Company to purchase an additional 9% equity in Amino Therapeutics for $2 million with an expiry of 24 months from the closing date, and Xenomics issued to the Company a warrant entitling the Company to acquire up to a 9.9% equity in Xenomics for USD$2 million for a period of 12 months from the closing date. The estimated fair value of the warrants issued by Amino Therapeutics and Xemonics, respectively, was assessed and determined to be $nil.

Amino Therapeutics is focused on developing biologic therapeutics for COVID-19. Amino Therapeutic’s research targets small molecule drug candidates and targeted drug delivery systems to transport biologics into the cytosol. The potential treatment for COVID-19 being developed by Amino Therapeutics is still an early-stage research and development project. It has not been clinically tested, determined to be effective, or submitted to any regulatory authority for approval for human use. Amino Therapeutics has currently put this project on hold as more funding is needed to continue the research and development.

On March 11, 2021, the Company reduced its investment in Amino Therapeutics and returned the warrant issued by Xenomics in consideration for the forgiveness of all outstanding debts and the release of future cash payment obligations in connection with the Amino Investment in the aggregate amount of USD$1,200,000. During the year ended December 31, 2021, the Company further impaired its investment in Amino Therapeutics by $767,428 due to delays in continuing the research and development of the project. During the year ended December 31, 2022, the Company further impaired its investment in Amino Therapeutics by $400,000.

Agreement with Massachusetts Laboratories Inc. (“Mass Labs”)

The Company and Collection Sites entered into an agreement dated December 7, 2020, as amended on November 1, 2021 (the “Mass Labs Agreement”) to engage Mass Labs for COVID-19 diagnostic testing services. Under the Mass Labs Agreement, Mass Labs is engaged to provide COVID-19 diagnostic testing services in accordance with orders given by the submitting physicians, report the results of each such COVID-19 test to the ordering physician or approved entity, and to arrange the courier or next-day delivery service for specimen delivery to Mass Labs’ facilities in a timely manner. Mass Labs also provides managed billing services, and provides CSD with nasal collection kits, saliva collection kits and PCR (COVID-19) tests. In consideration for these services and goods, fees are paid according to an agreed fee schedule pursuant to which Mass Labs will bear certain expenses associated with inventory required to complete COVID-19 testing, Mass Labs is entitled to partial reimbursement of such expenses out of revenue actually received in respect of tests performed by the Issuer (e.g. from a government or insurance program), and that Mass Labs is entitled to a variable fee for test processing that is calculated and paid as a percentage of the revenue remaining after the payment of such expenses. On November 1, 2021, the Mass Labs Agreement was amended to revise the fee schedule in Medivolve’s favor by reducing amounts originally charged by Mass Labs, those fees were recalculated retroactively to April 30, 2021.

The CEO of Medivolve, David Preiner is also the CEO of Xenomics, Mass Labs’ parent company. CSD entered into the agreement with Mass Labs prior to Mr. Preiner joining as an officer of Medivolve. In order to avoid any appearance of preference or conflict, Mr. Preiner recuses himself from any discussions/negotiations with Mass Labs and such discussions/negotiations are undertaken by other management and the board directly.

Lease Agreement with Simon Management Associates II, LLC

Collection Sites has entered into a lease agreement with Simon Management Associates II, LLC, a member of the Simon Property Group, dated effective August 20, 2020, as amended effective March 8, 2021, November 1, 2021, and January 15, 2022 (as amended, the “Simon Lease”) to provide space for CSD’s mobile testing sites at shopping centres and strip malls in the United States. The term of the Simon Lease expires on January 31, 2023, subject to extension by Collection Sites, at its discretion, until April 30, 2023. The Simon Lease provides for the following rent obligations: for the period from February 1, 2022 to April 30, 2022, USD$3,500 per month per testing site location; from May 1, 2022 through to January 31, 2023, USD$4,500 per month per testing site location; and if the Simon Lease is extended at Collection Sites’ discretion, from February 1, 2023 to April 30, 2023, USD$4,750 per month per testing site location. In Q1 of 2023, the Company extended its Simon Lease to July 31, 2023 for four strategic locations at a price of USD $4,750 per month.

9

SELECTED FINANCIAL HIGHLIGHTS

Revenue Net (loss) for the year Net (loss) and comprehensive (loss) for the year Loss per share (basic and diluted) Dividends per share	2023 2022 2021 For the year ended December 31,
	37,175,237 $ 86,824,987 $ 10,583,256 $ (18,365,334) (6,610,524) (37,777,656) (17,503,954) (6,416,362) (37,672,076) (0.68) (0.34) (5.70) - - -

			As at	As at
	December	31, 2022	December	31, 2021	December	31, 2020
	$		$		$
Cash	4,271,549			112,397		851,409
Total assets	18,818,419		59,295,417		4,679,773
Total non-current liabilities		812,640		965,432		-

The functional currency for each subsidiary within the Company is the currency of the primary economic environment in which it operates. The Company’s consolidated financial statements are presented in Canadian dollars. The Canadian dollar is the functional currency of the Company whereas the U.S. dollar is the functional currency of its wholly owned subsidiaries, Collection Sites, Medivolve Pharmacy and Marbella.

On October 15, 2020, concurrent with the transitioning to a single purpose company from an investment issuer, redeploying its assets and resources to be a single purpose healthcare company and on December 29, 2020, the Company announced the change of its name from “QuestCap Inc.” to “Medivolve Inc.” with its shares traded under new ticker “MEDV” on the NEO commencing January 7, 2021. This was due to the acquisition of Collection Site on October 15, 2020. Since the acquisition of Collections Sites and due to the change to an Increased Patient Access Program model this has led to a significant increase in total assets of the Company. The timing of payment of these receivables is based on receipt of payment from insurance and government programs rather than immediately when a patient would have paid upfront in the comparative year December 31, 2020. As at December 31, 2021 accounts receivable for the Company were $55,314,642 compared to $2,312,728 for the comparative period. During the fiscal 2020 year, the Company also made significant investments in a variety of healthcare companies, there were significant impairments in fiscal 2021 leading to a decrease in investments and intangibles of $8,596,732.

The Company implemented the Increased Patient Access Program in May of 2021, which represented a large change to the billing model and payment process. In order to bill certain government programs all commercial efforts need to be made to ensure there is no insurance coverage. In addition, due to the large increase in patient volumes it took time for the contracted billing company to submit all claims. Given these circumstances, there was a large amount of accounts receivable owing as at December 31, 2021. In the year ended December 31, 2022, the Company received payment for many accounts receivable leading to an increase in cash on hand of $4,159,152. As the Company received payment for these accounts receivable, payments were made towards various accounts payable and a loss from operations due to declining COVID-19 cases which led to a decrease in assets. Non-current liabilities had no significant activity in the year ended December 31, 2022.

10

RESULTS OF OPERATIONS

The following table outlines our consolidated statements of loss for the three months and years ended December 31, 2022 and 2021:

	For the three months ended	For the three months ended
	December 31,
	2022	2021	Change
	$	$	$	%
Revenue	4,855,076	45,281,317	(40,426,241)	-89%
Cost of sales	(3,459,195)	(22,263,723)	18,804,528	-84%
Grossprofit	1,395,881	23,017,594	(21,621,713)	-94%
General and adminstrative	2,720,057	4,109,319	(1,389,262)	-34%
Facility costs	557,418	8,187	549,231	6709%
Marketing and promotion	115,037	907,522	(792,485)	-87%
Foreign exchange loss (gain)	(48,804)	(209)	(48,595)	23251%
Financing costs	34,447	78,881	(44,434)	-56%
Interest expense (income)	(96)	(15,741)	15,645	-99%
Provision for legal judgment	-	3,050,264	(3,050,264)	-100%
Impairments	2,988,806	3,890,564	(901,758)	-23%
Total operating expenses	6,366,865	12,028,787	(5,661,922)	-47%
(Loss) Incomefrom operations	(4,970,984)	10,988,807	(15,959,791)	-145%
Unrealized (loss) on investment and loan receivable	(7,972)	(200,919)	192,947	-96%
Loss from investments in associates	-	(313,516)	313,516	-100%
Gainondebt settlement	**- **	109,787	(109,787)	-100%
(Loss) Income before income taxes for the period	(4,978,956)	10,584,159	(15,563,115)	-147%
Income tax expense	996,064	(6,456,489)	7,452,553	-100%
Net(Loss) Income for theperiod	(3,982,892)	4,127,670	(8,110,562)	-196%
Net (loss) Income and comprehensive (loss) income for the period	(4,496,859)	4,400,392	(8,897,251)	-202%

	For the years ended	For the years ended
	December 31,
	2022	2021	Change
	$	$	$	%
Revenue	37,175,237	86,824,987	(49,649,750)	-57%
Cost of sales	(22,789,684)	(50,255,887)	27,466,203	-55%
Gross profit	14,385,553	36,569,100	(22,183,547)	-61%
General and adminstrative	23,163,830	12,102,490	11,061,340	91%
Facility costs	3,546,389	7,478,818	(3,932,429)	-53%
Marketing and promotion	187,576	3,276,756	(3,089,180)	-94%
Foreign exchange loss (gain)	241,799	(17,435)	259,234	-1487%
Financing costs	238,032	482,700	(244,668)	-51%
Interest expense (income)	(287)	(57,972)	57,685	-100%
Gain from early lease termination	-	(1,205,824)	1,205,824	-100%
Provision for legal judgment	-	3,050,264	(3,050,264)	-100%
Cost of termination of contract	-	1,285,915	(1,285,915)	-100%
Impairments	9,799,245	10,301,620	(502,375)	-5%
Total operating expenses	37,176,584	36,697,332	479,252	1%
(Loss) income from operations	(22,791,031)	(128,232)	(22,662,799)	17673%
Unrealized gain (loss) on investment and loan receivable	(14,845)	2,581	(17,426)	-675%
Loss from investments in associates	(88,326)	(313,516)	225,190	-100%
Gainondebt settlement	16,520	285,129	(268,609)	100%
(Loss) before income taxes for the year	(22,877,682)	(154,036)	(22,723,646)	14752%
Income tax recovery	4,512,348	(6,456,489)	10,968,837	-100%
Net(Loss) for theyear	(18,365,334)	(6,610,524)	(11,754,810)	178%
Foreigncurrency translationgain	861,380	194,162	667,218	344%
Net (loss) and comprehensive (loss) for the year	(17,503,954)	(6,416,362)	(11,087,592)	173%

11

REVIEW OF OPERATIONS FOR THE THREE MONTHS AND YEARS ENDED DECEMBER 31, 2022 AND 2021

Revenue

	For the three months ended December 31,	For the three months ended December 31,
	2022	2021	Change
	$	$	$	%
Revenue	4,855,076	45,281,317	-40,426,241	-89%
	For the years ended		December 31,
	2022	2021	Change
	$	$	$	%
Revenue	37,175,237	86,824,987	-49,649,750	-57%

Revenue decreased from $45,281,317 to $4,855,076 or 89% for the three months ended December 31, 2022, compared to the equivalent period in the prior year. Revenue decreased from $86,824,987 to $37,175,237 or 57% for the year ended December 31, 2022, compared to the equivalent period in the prior year

Revenue decreased in the three months and year ended December 31, 2022 as compared with the comparative periods in 2021 due to a myriad of factors.

Decreased revenue in both the three months and year ended December 31, 2022 was primarily the result of decreased demand for COVID-19 testing as compared with the comparative periods in 2021. This was partially due to decreased perception of risk associated with contracting COVID-19, as well there was a large surge in COVID-19 positivity and death rates in the state of California where the Company primarily operates in the comparative quarter in 2021. This led to large patient volumes in the fourth quarter of 2021 and the first quarter of 2022. With the wider availability of vaccines and decreased perceived risk, the patient volumes were lesser than the other periods of 2021 resulting in a revenue decrease year over year.

Lower revenue also resulted in part from a decrease in expected revenue per PCR test provided. Prior to Q1 2022, the Company earned expected revenue of $35 per rapid antigen test, $45 per rapid antibody test, and $95 per PCR test. In Q2 2022, expected revenue per PCR test decreased to $75 due to the differences in expected payments between HRSA, which had ceased to accept claims, and the California COVID-19 Uninsured Group Program. Rapid antigen tests, antibody tests, and PCR tests made approximately 23%, 29% and 48% and 24%, 29% and 47% of the revenue for the three months and year ended December 31, 2022, compared to 22%, 28% and 50% and 23, 27% and 50% for the comparable periods.

For the first two quarters of the year, revenue had increased over the comparative quarters in 2021 due to the integration of the EHR following its acquisition on May 6, 2021, which was able to simplify and streamline CSD’s ability to provide COVID-19 testing. EHR integration optimized operational and financial workflows between testing sites and Mass Labs through computerized provider order entry, which improves data capture quality and aids in laboratory compliance, improvements in testing site to laboratory workflow, enabling quicker entry of patient information and certified results, faster delivery of lab results to its patients through the EHR patient portal, built-in quality control bringing uniformity, traceability, accountability to testing services across all testing locations, and upgraded security to meet healthcare regulations and compliance guidelines. In addition to this in May of 2021, CSD switched from a cash pay business model to the Increased Patient Access Program. This led to an increase in patient volumes and also average revenue per patient, as to ensure the optimal patient care, all three of the rapid antigen test, rapid antibody test, and PCR test are performed.

These two significant changes made in May 2021 as outlined in the previous paragraph were fully in place for the third and fourth quarters of 2021 and thus did not have the similar impact in the comparative quarters for 2022 and 2021.

The average revenue per patient, which is defined as revenue recorded in CS divided by the number of patient visits during the period increased in Q4 2022 compared to the comparable period in 2021. The average per patient was $433 compared to $242. The increase per patient was not due to increased pricing as the expected values for testing were less than the prior period as outlined above but was due to the collection of receivables that were not recognized previously for not meeting the criteria for revenue recognition. This had a large increase on the current quarter’s average revenue as the based revenues were much lower as there were only 11,210 patients (year ended December 31, 2022 – 213,353) seen compared to 187,124 (year ended December 31, 2021 – 375,203). The decrease also has been impacted by the decreased testing cubes in the current period.

The average revenue per patient decreased in 2022 compared to 2021 from $231 to $174. This is primarily due to the reduced expected collection from patients due to the different government programs expected to be utilized. Additionally in 2022 there was an increase in patients seen without corresponding revenue as the Company operated for a period of time in states where there was no viable program for uninsured patients.

12

Cost of sales and Gross profit

For the three months ended December 31,

	2022	2021	Change
	$	$	$	%
Cost of sales	3,459,195	22,263,723	-18,804,528	-84%
	For the years ended December 31,
	2022	2021	Change
	$	$	$	%
Cost of sales	22,789,684	50,255,887	-27,466,203	-55%
	For the three months ended December 31,
	2022	2021	Change
	$	$	$	%
Grossprofit	1,395,881	23,017,594	-21,621,713	-94%
	For the years ended December 31,
	2022	2021	Change
	$	$	$	%
Grossprofit	14,385,553	36,569,100	-22,183,547	-61%

	2022 2021 2022 2021 For the three months ended For the year ended December 31, December 31,
Laboratory fees	2,451,262 $ 14,866,111 $ 13,278,762 $ 30,882,790 $ 663,036 2,341,783 5,466,242 11,768,469 196,079 4,288,653 2,206,308 4,757,657 148,818 767,176 1,838,371 2,846,971
Payroll Consumables Other
	3,459,195 22,263,723 22,789,684 50,255,887

Cost of sales decreased from $22,263,723 to $3,459,195 or 85% for the three months ended December 31, 2022, compared to the equivalent period in the prior year. Cost of sales decreased from $50,255,887 to $22,789,684 or 55% for the year ended December 31, 2022, compared to the equivalent period in the prior year.

Laboratory fees consist of the cost of the laboratory fees for the antigen, antibody and PCR tests and the cost of the antigen and antibody kits at the cubes. Payroll consists of direct labour costs at the cube level as well as employees responsible for the dayto-day support activities. Consumables are primarily consumables related to PCR testing and personal protective equipment. Other primarily relates to fees incurred for billing service and freight to deliver PCR test samples to the lab. For more information regarding lab fees, see “ Investments and Material Agreements - Agreement with Massachusetts Laboratories Inc. ”

Cost of sales for the Company fluctuate primarily based on the revenues earned in the corresponding period, thus it is most relevant to analyze gross profit and gross profit % (defined as gross profit as a percentage of revenue) in evaluating cost of sales.

Gross profit decreased from $23,017,594 to $1,395,881 or 94% for the three months ended December 31, 2022, compared to the equivalent period in the prior year. Gross profit decreased to $14,385,553 from $36,569,100 or 61% for the year ended December 31, 2022, compared to the equivalent period in the prior year.

The decrease in cost of sales was due to lower patient reports for the three months and year ended December 31, 2022. The decrease was not proportionate with patient reports or sales as there were better margins and a lower cost of sale per report for the three month period and year ended December 31, 2021.

Gross margin percentages for the three months and year ended December 31, 2022, were 29% and 39% compared 51% and 42% for the comparative periods in 2021.

The decreased gross margin percentage for the three months ended December 31, 2022, compared to the same period in the prior year was due to multiple factors. The first is that testing volumes decreased significantly, which resulted in direct payroll

13

costs representing 14% of revenues compared to 5% in the comparable period. Additionally, margins were lower due to laboratory fees as there were tests completed in states without uninsured programs that still had associated lab fees, which were not in the comparable period as HRSA covered uninsured patients regardless of jurisdiction.

The decreased gross margin percentage for the year ended December 31, 2022, compared to the prior year was primarily due to slightly higher payroll fees and consumable costs. This is due to the factors outlined above primarily from the third and fourth quarters of 2022.

General and administrative expenses

	For the three months ended December 31,	For the three months ended December 31,
	2022	2021	Change
	$	$	$	%
General and administrative	2,720,057	4,109,319	-1,389,262	-34%
	For the years ended		December 31,
	2022	2021	Change
	$	$	$	%
General and administrative	23,163,830	12,102,490	11,061,340	91%

	2022 2021 2022 2021 For the three months ended For the year ended December 31, December 31,
Consulting fees and payroll (Note 20) Legal and professional Other administrative Depreciation - property and equipment (Note 7) Depreciation - intangible (Note 9)	1,183,860 $ 2,566,497 $ 16,901,782 $ 7,079,418 $ 1,209,340 1,002,406 4,796,013 2,587,109 197,593 412,929 953,076 1,218,744 24,717 22,941 94,773 89,868 104,546 104,546 418,185 1,127,351
	2,720,057 4,109,319 23,163,830 12,102,490

General and administrative costs decreased to $2,720,057 from $4,109,319 or 34% for the three months ended December 31, 2022, compared to the equivalent period in the prior year. The primary driver of the decrease was a significant decrease in consulting fees and payroll, which was due to the termination of employees due to the reduction in sites operated in order to maintain cash flow in order to continue to advance in its milestones towards the telehealth rollout. The decrease in other administrative costs is primarily due to controlling discretionary general and administrative costs such as travel.

General and administrative costs increased to $23,163,830 from $12,102,490 or 91% for the year ended December 31, 2022, compared to the equivalent period in the prior year. The increase in general and administrative costs for the year ended December 31, 2022, compared to the prior period are primarily due to legal costs and consulting fees and payroll.

The increase in legal and professional fees is due to the timing of litigation regarding the MTJR claim to recuperate amounts loaned, the settlement of a potential litigation regarding a matter with former employees, fees paid in order to defend the Company in litigation related to a contract for the sale by the Company of COVID-19 testing equipment to a Russian entity, and additional fees for assistance with regulatory compliance. The increase in consulting fees and payroll was due to management incentives approved by the Board of Directors on February 2, 2022 of approximately $3,900,000, and May 25, 2022 of approximately $3,400,000, to key consultants and employees to the Company as a reflection of performance as well as the research and development related to the expansion of the Company’s testing service offerings and its telehealth platform. In considering the management incentives, the Company’s Board of Directors did not allocate to specific services provided by the consultants whether it be related it be related to R&D or performance of the Company. Research and development activities are only being completed by David Preiner among the key consultant or employees.

Facility costs

14

	2022	2021	Change
	$	$	$	%
Facilitycosts	557,418	8,187	549,231	6709%
	2022	2021	Change
	$	$	$	%
Facilitycosts	3,546,389	7,478,818	-3,932,429	-53%

Facility costs increased to $557,418 from $8,187 or 6709% for the three months ended December 31, 2022, compared to the equivalent period in the prior year. The increase in facility costs was primarily related to adjustments made in the fourth quarter of 2021 that related to previous quarters, which reduced the expense for this period.

Facility costs decreased to $3,546,389 from $7,478,818 or 53% for the year ended December 31, 2022, compared to the equivalent period in the prior year. Facility costs consist primarily of rent, maintenance, depreciation of right of use assets, utilities, and insurance.

The decrease in facility costs are primarily due to two factors. The first is the decrease in the number of sites being operated in the three months ended December 31, 2022 of 16 test collection sites (as at December 31, 2022) compared to 77 for the comparable period, thus there is a large decrease as there are 56 sites that no longer have costs. The differential between the number of sites that no longer have costs and the number of testing sites is due to the strategic decision to close sites that had less revenue than variable costs. The second is due to a decrease in the rent that came in effect on March 8, 2021 when the Company renegotiated the Simon Lease.

Marketing and promotion

	For the three	months ended December 31,	months ended December 31,
	2022	2021	Change
	$	$	$	%
Marketingandpromotion	115,037	907,522	-792,485	-87%
	For the years ended December 31,
	2022	2021	Change
	$	$	$	%
Marketingandpromotion	187,576	3,276,756	-3,089,180	-94%

Marketing and promotion decreased from $907,522 to $115,037 or 87% for the three months ended December 31, 2022, compared to the equivalent period in the prior year. Marketing and promotion decreased from $3,276,756 to $187,576 or 94% for the year ended December 31, 2022, compared to the equivalent period in the prior year. The decrease is due to a reduction in spending on a marketing campaign to increase investor awareness, which resulted in expenses of approximately $1,300,000 during 2021. Additionally, there were expenditures on marketing and promotion at the subsidiary level for awareness of the testing cubes at Collection Sites during 2021 that were not continued in 2022. None of the marketing firm engagements were considered related party transactions in accordance with IAS 24 Related Party Transactions. The Company was able to recover costs from a prior marketing engagement in the year ended December 31, 2022 and recorded this as a recovery of costs.

Foreign exchange loss (gain)

		For the three months ended December 31,	For the three months ended December 31,	For the three months ended December 31,
		2022	2021	Change
		$	$	$	%
Foreign exchange loss(gain)	-	48,804	-209	-48,595	23251%
		For the years ended December 31,
		2022	2021	Change
		$	$	$	%
Foreign exchange loss(gain)		241,799	-17,435	259,234	-1487%

15

Foreign exchange loss (gain) costs increased to $48,804 from $209 or 23252% for the three months ended December 31, 2022, compared to the equivalent period in the prior year. Foreign exchange loss (gain) costs increased to $241,799 from $(17,435) or 1487% for the year ended December 31, 2022, compared to the equivalent period in the prior year. This variance from year to year was dependent on the fluctuation of financial assets or liabilities that are held in a currency other than the functional currency of the Company.

Financing costs

	For the three months ended December 31,	For the three months ended December 31,	For the three months ended December 31,
	2022	2021	Change
	$	$	$	%
Financingcosts	34,447	78,881	-44,434	-56%
	For the years ended December 31,
	2022	2021	Change
	$	$	$	%
Financingcosts	238,032	482,700	-244,668	-51%

Financing costs decreased to $34,447 from $78,881 or 56% for the three months ended December 31, 2022, compared to the equivalent period in the prior year. Financing costs decreased to $238,032 from $482,700 or 51% for the year ended December 31, 2022, compared to the equivalent period in the prior year. For the year ended December 31, 2022, the decrease was primarily due to a reduction in interest incurred due to decreases in debt. As of December 31, 2022, there were $96,378 of loans payable and $1,088,386 of convertible notes owing compared to $850,383 of loans payable as at December 31, 2021.The interest on servicing the debt in three months and year ended December 31, 2022 is significantly less due to the repayments of the debt since the comparable periods.

Interest expense (income)

		For the three months ended December 31,	For the three months ended December 31,	For the three months ended December 31,
		2022	2021	Change
		$	$	$	%
Interest expense(income)	-	96	-15,741	15,645	-99%
		For the years ended		December 31,
		2022	2021	Change
		$	$	$	%
Interest expense(income)	-	287	-57,972	57,685	-100%

Interest expense (income) increased from $(15,741) to $(96) or 99% for the three months ended December 31, 2022, compared to the equivalent period in the prior year. Interest expense (income) increased from $(57,972) to $(287) or 100% for the year ended December 31, 2022, compared to the equivalent period in the prior year. The Company had interest expenses in the years ended December 31, 2021, primarily due to the uncertainty of collectability of interest income from a loan (the “Breeze Loan”) advanced to Breeze Laboratory SAS Colombia. During the year ended December 31, 2021, the Company impaired the Breeze Loan, and accordingly, it did not affect interest expense (income) during the years ended December 31, 2022.

Gain from early lease termination

	For the three months ended	For the three months ended	December	31,
	2022	2021	Change
	$	$		$	%
Gain from earlylease termination	-	-		0	0%

16

	For	the years ended	December	31,
	2022	2021	Change
	$	$		$	%
Gain from earlylease termination	-	-1,205,824	1,205,824		-100%

Gain from early lease termination was nil for the three months ended December 31, 2022 and 2021. Gain from early lease termination decreased to nil from $1,205,824 or 100% for the year ended December 31, 2022, compared to the equivalent period in the prior year.

During the year ended December 31, 2021, the Company terminated a lease agreement in exchange for agreeing to make a payment of USD$50,000 ($62,875) resulting in a gain on early termination of lease of $18,563. Additionally, a separate lease agreement was amended to replace fixed lease payments with payments based on a percentage of gross sales arrangement, resulting in a gain on modification of lease of $436,905 and a loss on disposal of the right of use asset of $1,329,915. Additionally, this lease agreement was amended again to replace a payment obligation based on a percentage of gross sales arrangement with a fixed monthly rate per location, resulting in a gain on modification of lease of $1,973,471. As consideration for the lease settlement, the Company paid to the former landlord USD$400,000 ($509,640) and issued $441,000 worth of common shares of the Company during the year ended December 31, 2021.

Impairments

		2022 2021 $ $ $ % 2,988,806 3,890,564 -901,758 -23% For the three months ended December 31, Change 2022 2021 $ $ $ % 9,799,245 10,301,620 -502,375 -5% For the years ended December 31, Change For the year ended December 31, For the three months ended December 31,
	Impairments
	Impairments
Impairments Expected credit losses (Note 19) Uncollectible other receivable Supplier relationship impairment (Note 9) Impairment of private investments (Note 5) Impairment of investments in associates (Note 6) Impairment of right of use asset (Note 12) Impairment of property and equipment (Note 7) Breeze loan (Note 3)		2022 2021 2022 2021
		$ 1,899,419$ 1,861,023 7,808,890 $ 1,861,023 $ 294,437- 695,405 - -1,891,500 - 1,891,500 -(58,533) - 1,040,898 400,000(400,000) 400,000 264,890 255,819 255,819 - 139,132 139,132 - -596,174 - 596,174
Impairment of intangible asset (Note 9)		- - 500,000 4,647,135
		2,988,806 $ 3,890,164 $ 9,799,245 $ 10,301,620 $

During the year ended December 31, 2022, the Company recorded expected credit losses on its sales of $7,808,490, an impairment on its royalty asset of $500,000, impairment on its investment in associate of $400,000, impairment on its right of use asset of $255,819, impairment on its property and equipment of $139,132 and a provision on its advances of $695,405. During the year ended December 31, 2021, the Company recorded expected credit losses of $1,861,023, impaired its supplier relationship for $1,891,500, impaired its private investment of $1,040,896, impaired its investment in associate of $264,890, impaired a loan receivable for $596,174 and its intangible asset for $4,647,135.

During the three months ended December 31, 2022 the Company recorded expected credit losses on its sales of $1,899,019, impairment on its uncollectible advances of $294,437, impairment on its right of use asset of $255,819, impairment on its property and equipment of $139,132 and an impairment of its investment in an associate of $400,000. For the comparative period ended December 31, 2021, the Company recorded expected credit losses of $1,861,023, impaired its supplier relationship for $1,891,500, recovered impairments on its private investment of $58,533, recovered impairments on its investment in associate of $400,000 and impaired a loan receivable for $596,174.

17

During the year ended December 31, 2022, the Company recorded expected credit losses on its sales of $7,808,490. Expected credit loss was recorded at year end due to the transition to the Increased Patient Access Program testing model to the patients as this resulted in a large increase in accounts receivable between the two periods with limited collection history. The prior sales model was direct patient pays, which resulted in significantly less testing receivables outstanding thus a much lower expected credit loss was recorded for the comparable periods for the year ended December 31, 2022. The increase in expected credit losses were as a result of multiple items. The Company expects to record credit losses due to the following: claims submitted to the state of California with missing or incorrectly entered information, a reduction of expected collection of PCR fees from the state of California for cases not paid by HRSA, losses on insurance claims for states with no currently viable uninsured program as well as lesser losses for patients with claims denied due to no insurance coverage and uninsured patients in states with no viable program for uninsured patients.

The increase in the expected credit losses is primarily due to an increase in the estimated expected loss rate for receivables from the state of California to reflect the increased risk of not yet being approved and the potential cessation of the program prior to collection. There was a further increase to the expected credit losses in the fourth quarter of 2022 as the Company’s application is still in progress and there is less time to file prior to the anticipated deadline.

The increase in uncollectible other receivables for the year ended December 31, 2022 was $695,405 due to the recoverable value of underlying receivables supporting the receivable decreasing from December 31, 2021. For the three months ended December 31, 2022 there was an additional impairment due to the estimated collectability of the underlying receivables.

The uncollectible other receivables were provided for due to uncertainties surrounding the financial resources of the owing entity to repay the amounts.

The Company impaired its right of use asset for $255,819 for the year and three months ended December 31, 2022. This was due to the indicators of impairment given the closure of sites subsequent to the end of the year.

The Company impaired its mobile testing cubes for $139,132 for the year and three months ended December 31, 2022. This was due to indicators of impairment given there were testing cubes in storage and no longer actively used in the business due to the closure of sites. The Company impaired its cubes to the fair value less costs to sell.

During the year ended December 31, 2021, the Company impaired its supplier relationship acquired as part of the Collection Sites business combination. The Company impaired the relationship as it was terminated during the year as the Company found a more beneficial laboratory partner.

During the year ended December 31, 2021, the Company recorded a loss of $502,538 to reflect the arm’s length transaction of the reduction of ownership of 30% of Amino.

During the year ended December 31, 2021, the Company recorded a loss of $418,360 as the technology in Marvel was determined not to be commercially viable. As at December 31, 2021, the value of the Marvel investment was nil.

==> picture [470 x 60] intentionally omitted <==

During the year and quarter ended December 31, 2022 the Company further impaired its investment in Amino by $400,000 as there was further funding that was needed in order to progress its research and development activities. During the prior year the Company impaired the investment to the reflect the current conditions of the Company given the delays as at December 31, 2021.

The impairment on the royalty asset was recorded as the royalty was related to the commercialization of IP from Sunnybrook Translational Research Group for Emerging and Respiratory Viruses. Given the decrease in COVID-19 testing volumes and perceived risk waning the Company noted indicators of impairment in the year ended December 31, 2022 and compared the carrying value to the recoverable value resulting in an impairment charge of $500,000.

During the year ended December 31, 2021, the Company impaired its intellectual property held by Noble Bioscience Corp. (“Noble Bioscience”), which the Company acquired on March 2, 2021. Noble Bioscience’s sole material asset at the time of acquisition was agency rights in the United States, Canada and Caribbean countries to Nuturell’s Surface Shield technology, an anti-viral and anti-microbial surface protectant. Noble Biosciences’ agency rights were terminated by Nuturell, and as a result,

18

the Company fully impaired this asset with a value of $4,647,135. During the year ended December 31, 2021, the Company impaired its supplier relationship acquired as part of the Collection Sites business combination. The Company impaired the relationship as it was terminated during the year as the Company found a more beneficial laboratory partner. During the year ended December 31, 2021, the Company impaired the Breeze Loan due to concerns regarding collectability of the balance.

See “ Financial Instruments and Other Instruments – Financial Risk Management – Credit risk ” below.

Other items

	2022 2021 $ $ $ % For the three months ended December 31, Change
Unrealized gain (loss) on investment and loan receivable Loss from investments in associates Gain on debt settlement	7,972 - 200,919 - 192,947 -96% - 313,516 - 313,516 -100% - 109,787 109,787 - -100%
	7,972 - 404,648 - 396,676 -98%

	2022 2021 $ $ $ % For the years ended December 31, Change
Unrealized (loss) gain on investment and loan receivable Loss from investments in associates Gain on debt settlement	14,845 - 2,581 -17,426 -675% 88,326 - 313,516 - 225,190 -72% 16,520 285,129 268,609 - -94%
	86,651 - 25,806 - 60,845 - 236%

Unrealized gain (loss) on investment and loan receivable

Unrealized gain (loss) on investment and loan receivable increased to $7,972 from a loss of $200,919 or 96% for the three months ended December 31, 2022, compared to the equivalent periods in the prior year. Unrealized gain (loss) on investment and loan receivable increased to a loss of $14,845 for the year ended December 31, 2022, compared to a gain of $2,581 in the prior year, a decrease of 675%. There are minimal investments held by the Company as at December 31, 2022 as it is now focusing its efforts on growing CSD, MPD and developing its new business line.

Loss from investments in associates

In the three months ended December 31, 2022, the Company recorded a nil equity loss pickup from its interest in Sulliden Mining Capital Inc., as compared with a loss of $313,516 in the comparable period of 2021. In the year ended December 31, 2022, the Company recorded an equity loss pickup of $88,326 from its interest in Sulliden Mining Capital Inc., as compared with $313,516 in the prior year.

Gain on debt settlement

In the year ended December 31, 2022, the Company negotiated the settlement of a balance owing resulting in a gain of $16,520.

Income tax recovery

	For the three months ended December 31,	For the three months ended December 31,	For the three months ended December 31,
	2022	2021	Change
	$	$	$	%
Income tax recovery	996,064	0	996,064	100%
	For the years ended December 31,
	2022	2021	Change
	$	$	$	%
Income tax recovery	4,512,348	-6,456,489	10,968,837	-100%

19

During the three months ended December 31, 2022, the Company recorded an adjustment in its provision due to the difference from the tax extensions filed in July 2022 compared to the final returns submitted in January 2023 of approximately $996,064.The difference between the final filing and the extensions filed was primarily attributed to additional discretionary deductions that were claimed by the Company within the final filing, which resulted in a change to the original estimate.

During the year ended December 31, 2022, the Company recorded an income tax recovery of $4,512,348. This resulted from transfer pricing adjustments that allowed the Company to use previously unrecognized losses in Canada and reduce its taxable income in the United States. Based on the recommendations of a transfer pricing study completed in Q2 2022, the Company adopted a different methodology to transfer pricing charges between Canada and the United States, which led to a moresubstantial transfer pricing adjustment as compared with the previous methodology. The approach used was a set amount of income in the United States, with the remainder of income flowing up to Canada in light of the management, intellectual property, and decision-making based out of Medivolve Inc in addition to the factors noted above.

During the years and quarter ended December 31, 2021, the Company incurred income tax expenses of $6,456,489. The income tax expenses relate to taxable income in its wholly owned subsidiaries in the current year. The increase compared to the current year is due to taxable income in the prior year compared to no taxable income in the current year.

SELECTED QUARTERLY INFORMATION

The following table sets forth selected unaudited quarterly statements of operations data for each of the eight quarters commencing January 1, 2021 and ended December 31, 2022. The information for each of these quarters has been prepared on the same basis as the audited annual financial statements for the year ended December 31, 2022. This data should be read in conjunction with our audited annual financial statements for the year ended December 31, 2022. These quarterly operating results are not necessarily indicative of our operating results for a full year or any future period.

Revenue Cost of sales Gross profit Operating expenses Income (loss) before other items Net income (loss) for the period Net income (loss) per share - basic Net income (loss) per share - diluted

December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31, 2022 2022 2022 2022 2021 2021 2021 2021 $ $ $ $ $ $ $ $

4,855,076 6,543,187 9,083,027 16,693,947 45,281,317 26,553,297 3,742,372 11,248,001 (3,459,195) (4,095,723) (5,050,096) (10,184,670) (22,263,723) (14,809,214) (2,988,837) (10,194,113) 1,395,881 2,447,464 4,032,931 6,509,277 23,017,594 11,744,083 753,535 1,053,888 6,366,865 9,418,883 13,697,194 7,693,641 6,939,464 7,457,984 5,001,359 6,718,603 (4,970,984) (6,971,419) (9,664,263) (1,184,364) 16,266,853 3,000,184 (4,247,824) (5,664,715) (3,982,892) (6,968,205) (5,977,627) (1,436,609) 4,263,699 7,994,959 (8,691,775) (9,983,245) (0.18) (0.30) (0.36) (0.05) 0.11 0.30 (0.60) (0.75) (0.18) (0.30) (0.36) (0.05) 0.11 0.30 (0.60) (0.75)

Significant increases in revenue, cost of sales, and gross profits starting in the period ended September 30, 2021 were driven by increases in patient testing volumes made possible by (i) Collection Sites’ integration of the EHR following its acquisition in May 2021, (ii) the expansion of Collection Sites’ service offerings to include PCR and rapid antibody tests, and (iii) implementation of the Increased Patient Access Program, under which Collection Sites changed from a cash pay business model to primarily insurance claims and reimbursements from various government programs. See “ Overall Performance ”. The Increased Patient Access Program also led to increases in average revenue per patient, as to ensure the optimal patient care all three of the rapid antigen test, rapid antibody test, and PCR test are performed. The Company has seen a decrease in revenue over the prior four quarters due to lower demand for COVID-19 testing, resulting from decreases in COVID-19 cases, decreased perception of risk associated with contracting COVID-19, and with respect to the three most recently completed quarters, the Company’s inability to continue providing tests to uninsured individuals in states other than California following the discontinuance of HRSA. However, the Company has been able to increase the profitability of each patient encounter by implementing the Increased Patient Access Program, as the associated change in billing model has facilitated the provision of PCR, rapid antigen test and rapid antibody tests to all patients at no up front cost. See “ Business Overview – CSD ”. Variations in cost of sales are directly correlated with variations in revenue, as many of the Company’s costs are variable in nature such as the lab testing and billing fees and consumables. See “ Investments and Material Agreements – Agreement with Massachusetts Laboratories Inc. ” The gross profit as a percentage of revenue increased starting in Q3 in 2021 due to the change in lab provider in conjunction with the model above. Operating costs rose during the first three quarters of 2021 as a result of legal costs due to the timing of litigation, settlements of potential litigation, as well as an increase in consulting and payroll costs due to bonuses paid in Q1 and Q2 of 2022.

20

FINANCIAL POSITION – DECEMBER 31, 2022 and DECEMBER 31, 2021

==> picture [504 x 366] intentionally omitted <==

----- Start of picture text -----

Change
As at December 31, 2022 December 31, 2021
$ %
ASSETS
Current assets
Cash and cash equivalents $ 4,271,549 $ 112,397 $ 4,159,152 3700%
Inventory 343,342 388,631 - 45,289 -12%
Public investments at fair value through profit and loss 2,314 4,302 (1,988) -46%
Accounts receivable 11,708,256 55,314,642 (43,606,386) -79%
Loans receivable - 12,923 (12,923) -100%
Prepaid expenses and advances 522,196 24,227 497,969 2055%
Total current assets 16,847,657 55,857,122 - 39,009,465 -70%
Investments in associates - 488,326 (488,326) -100%
Property and equipment 398,272 595,031 - 196,759 -33%
Right-of-use assets 135,737 - 135,737 100%
Intangibles 1,436,753 2,354,938 - 918,185 -39%
TOTAL ASSETS $ 18,818,419 $ 59,295,417 $ (40,476,998) -68%
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY)
Current liabilities
Accounts payable and accrued liabilities $ 12,414,204 $ 33,198,613 $ (20,784,409) -63%
Income taxes payable 2,062,981 6,456,489 - 4,393,508 -68%
Loans payable 96,378 850,383 - 754,005 -89%
Lease liabilities 444,173 - 444,173 100%
Other liabilities 1,573,395 15,835 1,557,560 9836%
Liability component of convertible note 1,088,386 - 1,088,386 100%
Total current liabilities $ 17,679,517 $ 40,521,320 $ (22,841,803) -56%
Other liabilities $ 812,640 $ - $ 812,640 100%
Liability component of convertible note - 965,432 - 965,432 -100%
Total liabilities $ 18,492,157 $ 41,486,752 $ (22,994,595) -55%
Shareholders' Equity
Share capital $ 67,286,990 $ 67,281,741 $ 5,249 0%
Share-based payment reserve 8,665,195 11,171,601 (2,506,406) -22%
Equity component of convertible note 255,424 255,424 - 0%
Accumulated other comprehensive income 1,161,122 299,742 861,380 287%
Deficit (77,042,469) (61,199,843) (15,842,626) 26%
Total shareholders' equity $ 326,262 $ 17,808,665 $ (17,482,403) -98%
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 18,818,419 $ 59,295,417 $ (40,476,998) -68%
----- End of picture text -----

Assets

Current assets

Cash increased by $4,159,152 or 3700%, primarily due to the cash flows generated by the collection of the Company’s accounts receivable offset by payments of the Company’s accounts payable in the years ended December 31, 2022.

Inventory decreased slightly by $45,289 or 12% primarily due to a reduction of inventory on hand at Marbella.

Public investments at fair value through profit and loss decreased by $1,988 due to the conversion of a loan receivable to a public investment that declined in value through 2022.

Accounts receivable decreased by $43,606,386 or 79%, due to the collection from the underlying customers during the fiscal year. There were higher sales from May – December 2021 that were receivable as at December 31, 2021 that had significant collection in excess of what the Company produced in sales in the year ended December 31, 2022.

Loans receivable decreased by $12,923 or 100%, due to the conversion to common shares on its loan receivable with Blue Sky Energy Inc.

Prepaid expenses and advances increased by $497,969 or 2055% due to prepaid amounts spent on marketing and promotion for the upcoming quarters.

Non-current assets

21

Investments in Associates decreased by $488,326 or 100% as the Company recorded its share of losses from Sulliden Mining Capital Inc. in addition to impairing the investment in Amino Therapeutics during the fourth quarter of 2022.

Property and equipment decreased by $196,759 or 33%. This is driven by the depreciation for $94,773, impairment of $139,132 and offset by the effects of foreign exchange of $36,799.

Right-of-use assets increased by $135,737 or 100%. This resulted from the inception of a new capital lease upon amendment of the Simon Lease on January 15, 2022, to provide for a total term (including extension options) exceeding one year. This was offset by impairment of $255,819. Previously, the Simon Lease has been classified as a short-term lease.

Intangibles decreased by $918,185 or 39% due to an impairment charge on the Company’s royalty interest of $500,000, with the remainder resulting from the amortization of the Company’s EHR and pharmacy license.

Liabilities

Current liabilities

Accounts payable and accrued liabilities decreased by $20,784,409 or 63%, primarily due to payments of the Company’s payable balances, a significant portion of which (approximately $14,500,000) were made to Mass Labs, the Company’s laboratory and billing company, due to the receipt of cash by the company from collection of its accounts receivable.

Income taxes payable decreased by $4,393,508 or 68%, primarily due to final transfer pricing adjustments recorded in the year ended December 31, 2022 related to the prior tax year.

Loan payable decreased by $754,005 or 89%, due to interest accrued on the Company’s loans payable and offset by repayments of $382,000 in April 2022 and further repayments of $372,000 in December 2022.

Lease liabilities increased by $444,173 or 100%, due to inception of a new capital lease upon amendment of the Simon Lease on January 15, 2022, to provide for a total term (including extension options) exceeding one year. Previously, the Simon Lease has been classified as a short-term lease.

Non-current liabilities

Convertible notes increased by $122,954 primarily due to accretion on the notes for the nine months ended December 31, 2022. As the balance is now owed within a year it is now included as a current liability as at December 31, 2022.

Other liabilities (including both long and short term portions) increased by $2,370,200 due to the settlement of potential employee related litigation in the third quarter of September 2022.

Shareholders’ equity

Shareholder’s equity decreased by $17,482,403 due to an increase of $4,000 related to the issuance of shares from converted warrants, $17,550 resulting from stock options issued, a gain of $861,380 related to the translation of foreign operations, and a net loss of $18,365,334 for the year ended December 31, 2022.

LIQUIDITY, CAPITAL RESOURCES AND FINANCING

The general objectives of our capital management strategy are to preserve our capacity to continue operating, provide benefits to our stakeholders and provide an adequate return on investment to our shareholders by continuing to invest in our future that is commensurate with the level of operating risk we assume. We determine the total amount of capital required consistent with risk levels. This capital structure is adjusted on a timely basis depending on changes in the economic environment and risks of the underlying assets. We are not subject to any externally imposed capital requirements.

The financial statements and this MD&A have been prepared on the basis of accounting principles applicable to a going concern, which assumes that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of operations.

As at December 31, 2022, the Company had cash of $4,271,549 representing an increase of $4,159,152 from December 31, 2021. This increase is primarily due to $6,044,416 of cash provided in operating activities, nil of cash used in investing activities, and $1,885,264 of cash used by financing activities.

As at December 31, 2022, the Company had net current liabilities of $831,860. The net current liabilities are currently primarily accounts receivable from Mass Labs billed on behalf of the Company. These are primarily made up of insurance companies and government programs. As the pivot in strategy to Increased Patient Access Program for the patients occurred in May 2021 the

22

Company expected to have a cash loss from operations as there was an expected increase in accounts receivable. Additionally, there may be fluctuations in the Company’s liquidity resources as the primary payor is transitioned from HRSA to the state of California . There are uncertainties surrounding timing of payments from the payor that may put a further strain on the working capital of the Company. The Company’s primary source of liquidity is the collection of these receivable balances.

Additionally, there are provisions recorded in the financial statements that have uncertain timings of payments. If these were to become immediately due or payable at a time when the company does not have significant liquidity, it would have an adverse impact on the Company.

As at December 31, 2022 the Company is focused on maintaining cash balances in order to successfully rollout its expansion of testing services and telehealth platform. The Company’s financial condition is linked to its ability to collect its testing receivables, specifically there is approximately $9.6 million from the uninsured COVID-19 patient group administered by MediCal. Additionally, should the Company’s planned rollout of its expansion in testing services and telehealth platform be unsuccessful or delayed, it is possible the Company does not have adequate financial resources to continue with its rollout.

Moving forward, the Company expects to have cash provided by operations from its expansion of tests and telehealth services in order to meet planned growth and fund development activities through the collection of its accounts receivable and deferring liabilities to the greatest extent possible. Should there be further delays in the rollout of these ventures, or should they fail to perform as anticipated, the Company will need to raise additional financing.

The Company has demonstrated an ability to raise capital if needed through private placements and debt financing. The Company’s current shareholders’ capital as at December 31, 2022 was $67,286,990.

Additionally, the Company has recorded approximately $9,056,000 worth of tests since inception, in respect of which it was unable to recognize revenue due to the improbability of collection at time of testing, which was primarily due to the provision by the patient of invalid insurance information that were ineligible for HRSA, or incomplete or no insurance information in jurisdictions with no government reimbursement programs, that otherwise would have been receivable. The Company is currently looking into alternative methods of collecting a portion of the revenue from these tests, including through the use of insurance health coverage discovery products to resolve errors or omissions in the insurance information provided by patients.

The Company currently has no commitments for capital expenditures as of the date of the financial statements. The Company has committed $400,000 as a loan to the physician’s network referenced above in order to move forward with its credentialing efforts, which is a key step in the rollout of the telehealth platform.

Cash flows for the years ended December 31, 2022 and 2021

Net cash provided by (used in) Cash used in operating activities Cash used in investing activities Cash provided by financing activities Net cash increase (decrease) during the year	2022 2021 For the year ended December 31,
	$ $
	6,044,416 (8,322,326) - (626,316) (1,885,264) 8,209,630
	4,159,152 (739,012)

Cash Flows Used in Operating Activities

Cash flows provided by operating activities for the three months ended December 31, 2022, were $6,044,416 compared to cash flows used in operating activities of $8,322,326 for the comparable period. The cash used in operating activities in the current fiscal year is primarily due to the cash flow receipts from accounts receivable in the current year, offset by the cash flow used by accounts payable and operating loss.

Cash Flows used in Investing Activities

Cash flows used in investing activities for the nine months ended December 31, 2022 was nil as the Company is focusing its efforts on CSD, MPD and developing its new business line, rather than seeking out other investment opportunities.

Cash Flows Provided by Financing Activities

Cash flows used in financing activities for the year ended December 31, 2022, were $1,885,264 compared to cash provided by financing activities of $8,209,630 for the comparative period. The cash used for the year ended December 31, 2022 were primarily lease payments towards the Company’s premises leases and repayment of loans payable. The comparable period had

23

a need for funding to fund the operations at that time and had inflows of $6,500,000 from a private placement, $711,808 from option exercises, $1,185,000 from convertible loans and warrant exercises and proceeds from loans of $2,060,031 which were offset by lease payments and share issuance costs paid.

CONTRACTUAL OBLIGATIONS

The Company has no significant contractual arrangements other than those noted in its financial statements.

The Company is obligated to the following contractual maturities of undiscounted cash flows as at December 31, 2022:

==> picture [441 x 93] intentionally omitted <==

OFF-BALANCE SHEET ARRANGEMENTS

The Company has no off-balance sheet arrangements other than those noted in its financial statements.

TRANSACTIONS WITH RELATED PARTIES

Related party transactions and balances

During the years ended December 31, 2022 and 2021 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.

	2022 2021 Years ended December 31,
Forbes & Manhattan, Inc. 2227929 Ontario Inc. Massachusetts Laboratories,Inc.	933,850 $ 300,000 $ 535,000 $ 360,000 $ 13,504,870 $ 26,783,556 $

Mr. Stan Bharti is the Executive Chairman of Forbes and Manhattan Inc. (“Forbes”). The Company is part of the Forbes Group of Companies and continues to receive the benefits of such membership, including access to various professionals, and strategic advice from the Forbes Board of Advisors. An administration fee of $25,000 per month from May 2019 was charged by Forbes pursuant to a consulting agreement. As at December 31, 2022, receivables included $125,000 (December 31, 2021 - $125,000) owing from Forbes. These receivables and payables are unsecured, non-interest bearing and due on demand.

The Company shares office space with other corporations who may have common officers and directors. The costs associated with the use of this space, including the provision of office equipment, supplies, and certain other services are administered by 2227929 Ontario Inc., to whom the Company pays a monthly fee. For the year ended December 31, 2022, the Company was charged $360,000 for these services (2021: $360,000). As at December 31, 2022, payables included $203,400 (December 31, 2021: $536,342) owing to 2227929 Ontario Inc. These payables are unsecured, non-interest bearing and due on demand.

The CEO of the Company, David Preiner, is also the CEO of Xenomics, parent company to Amino Therapeutics in which the Company holds a 10% investment. The Company’s investment in Amino Therapeutics pre-dated the appointment of David Preiner as CEO of the Company. Xenomics is also a parent company to Mass Labs, which performs COVID-19 test processing services and medical billing services on behalf of the Company under the Mass Labs Agreement.

On December 7, 2020, the Company signed the Mass Labs Agreement. On April 30, 2021, the principal of Mass Labs, David Preiner, became the CEO of Medivolve Inc. Mass Labs has subcontracted its laboratory testing services contract to an independent third party. Pursuant to the Mass Labs Agreement, the parties have agreed that Mass Labs will bear

24

certain expenses associated with inventory required to complete COVID-19 testing, that Mass Labs will be entitled to partial reimbursement of such expenses out of revenue actually received in respect of tests performed by the Company (e.g. from a government or insurance program), and that Mass Labs will be entitled to a variable fee for test processing that is calculated and paid as a percentage of the revenue remaining after the payment of such expenses. For the year ended December 31, 2022, the Company was charged $13,504,870 for these services (2021- $26,783,556), which were recorded as cost of sales on the consolidated statements of operations. As at December 31, 2022, $20,394,998 (2021 - $55,763,906 is owed from Mass Labs and included in Accounts receivable on the consolidated statement of financial position, which represents an amount remitted by Mass Labs from the billing company, however is ultimately payable from the underlying payor described in Note 19. As at December 31, 2022, $3,552,259(2021 - $19,289,637) is owed to Mass Labs and included in accounts payable and accrued liabilities on the consolidated statement of financial position.

At December 31, 2022, the Company had an amount receivable of $nil from Aberdeen International Inc. (2021 - $10,706). The receivable was unsecured, non-interest bearing and due on demand. Additionally, as at December 31, 2022, the Company has a loan payable to Aberdeen of $55,746 (2021 - $266,880). Stan Bharti, a former director and officer of the Company, is a director and officer of Aberdeen. Wen Ye is a common director of both the Company and Aberdeen.

Compensation of Key Management, Directors and Officers

The remuneration of directors and other members of key management personnel during the years ended December 31, 2022 and 2021 were as follows:

	2022 2021 Years ended December 31,
Short-term benefits Share-basedpayments	5,749,177 $ 661,970 $ 17,550 $ 1,608,765 $

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 nonexecutive) of the Company.

During the year ended December 31, 2022, the Company granted a total of 1,333 stock options to key management, directors, and officers of the Company (2021: 1,150,000 options to management, directors and officers of the Company).

FINANCIAL INSTRUMENTS AND OTHER INSTRUMENTS

FINANCIAL RISK MANAGEMENT

Credit risk

Substantially all of the Company’s accounts receivable relate to sales of testing services to patients, referred to as testing receivables. The Company contracts collection of testing receivables to a billing company. The Company evaluates the collectability of testing receivables based on the identity of the underlying payor. There are two primary groups of payors from which the Company seeks payment for testing services provided to patients: insurance companies and government programs.

A significant proportion of the Company’s accounts receivable depend on claims that are billable to a limited number of underlying payors, which are major insurance companies or government programs. Accordingly, the Company’s credit risk is concentrated with these insurance companies and government programs. If the credit risk associated with any one of these major insurance companies or government programs were to increase, it could result in a significant increase to the Company’s credit risk.

During May 2021, the Company increased the number of insurance carriers and government payors available for patients to rely on as part of an internal initiative referred to as the “Increased Patient Access Program”. As such, the Company’s accounts receivable balance significantly increased as these tests were billed to additional insurance companies and government payors.

The Company’s billing process changed during 2021 from a manual to an automated process due to increases in the volume of testing receivables, which necessitated the engagement of its current contracted billing company. This automated billing system takes all commercial efforts to verify that a patient does not have insurance coverage (and is therefore eligible to have testing services paid for under a government program) before billing to a government program.

25

In some cases, this verification process may take months, resulting in situations where testing services are rendered to the patient months before the ultimate payment is collected from a government program. Our billing company submits claims as agent on our behalf, through Mass Labs, to government programs and the applicable insurance companies. Funds received by Mass Labs that are due to the Company are then remitted to the Company.

Medical billing in the United States is complex. There are many private insurance carriers, each of which may have unique and detailed billing requirements. Billing a government payor often requires compliance with a multi-step process. As a result of these complexities, delays in collecting accounts receivable can occur during peak periods, and otherwise at times when processing a high volume of claims is required.

Evaluation methodology as of December 31, 2021

As part of enacted federal legislation—the Families First Coronavirus Response Act, the Paycheck Protection Program and Health Care Enhancement Act, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, and the Coronavirus Response and Relief Supplemental Appropriations Act (CRRSA) — the U.S. Department of Health and Human Services (HHS), will provide claims reimbursement to health care providers generally at Medicare rates for testing uninsured individuals for COVID-19, for treating uninsured individuals with a COVID-19 primary diagnosis, and for COVID-19 vaccine administration to the uninsured known as HRSA. This program was relevant to Collection Sites’ historical business as a retail testing service due to the fact that many patients without health insurance chose to be tested for COVID in retail settings like those operated by Collection Sites.

The eligibility criteria for reimbursement funding from HRSA are:

• You have checked for health care coverage eligibility and confirmed that the patient is uninsured. You have verified that the patient does not have coverage through an individual, or employer-sponsored plan, a federal healthcare program, or the Federal Employees Health Benefits Program at the time services were rendered, and no other payer will reimburse you for COVID-19 vaccination, testing and/or care for that patient.

• You will accept defined program reimbursement as payment in full.

• You agree not to balance bill the patient.

• You agree to program terms and conditions and may be subject to post-reimbursement audit review.

The Company primarily funded its accounts receivable from government programs through federal programs administered by HRSA up to March 23, 2022 when funding for this program was ceased.

As at December 31, 2021, the Company viewed its accounts receivable in two categories when assessing its expected credit losses, based on the underlying payor: government receivables and insurance receivables. If a patient has health insurance or coverage under a state health care coverage program, the Company would bill for testing services rendered to the patient to the applicable insurance carrier or state program. Otherwise, provided that the Company has determined that the patient is not eligible for health care coverage and is uninsured, the Company bills to a federal government program. If a testing receivable initially classified as an insurance receivable was denied due to no coverage, the Company would seek payment from a federal program covering uninsured testing costs. During this period, there was no time restriction on filing a claim to the federal program. Accordingly, the number of days outstanding of a testing receivable had no significant impact on its collectability. The Company incurs expected credit losses through non-payments from insurance companies for insured individuals, as well as in instances when appropriate documentation is not submitted to insurance companies or applicable government programs or there are no government funds available to cover payment.

Based on historical information from patient remittances from the period starting when the Company changed its billing agent to Mass Labs, the Company expected that 75% of its Insurance receivables would be approved and paid, resulting in no expected credit losses. With respect to the remaining 25% of insurance receivables, upon denial, the Company expected to bill unpaid amounts to HRSA, and such amounts would be subject to an expected credit loss rate of 5% estimated in respect of government receivables. Accordingly, on average, the Company’s average expected credit loss rate with respect to insurance receivables is incur credit losses of 5% on 25% of its insurance receivables equating a 1% loss rate on the insurance receivable balance. The following table sets out expected credit losses as at December 31, 2021.

26

Gross Testing Receivables Loss Rate Expected Losses Net Testing Receivables	Total Federal Programs Insurance As at December 31, 2021
	55,763,906 $ 22,863,203 $ 32,900,703 $ 5% 1% 1,517,113 1,115,724 401,389
	54,246,793 $ 21,747,479 $ 32,499,314 $

*Loss rate is rounded to a single decimal place

Evaluation methodology as of December 31, 2022

HRSA ceased to accept new claims on March 23, 2022. The Company expects to be able to access funding under an alternative state-level government program in California for the reimbursement of testing services provided to uninsured patients in states.

The Company does not anticipate a major change in business with the discontinuation of HRSA. While a significant portion of the Company’s historical business was supported by funds from HRSA, there is a government program available in the state of California to subsidize healthcare services for individuals who are uninsured or undocumented. Due to this the Company now assesses its expected credit losses as insurance receivables and at individual state levels based on the availability of state-level government programs. If a balance previously classified as an insurance receivable is denied due to no coverage, the Company will seek payment from a state program covering uninsured receivables. Currently, California is the only state in which the Company has testing receivables that has implemented a government reimbursement program for uninsured patients. In states where no state-level government programs exist, the Company does not record receivables for uninsured patients as it does not meet revenue recognition standards as there is no viable method to collect these accounts. The Company evaluates the age of its insurance receivables when estimating collectability. The billing system utilizes an algorithm to attempt to collect from the correct underlying payor, which lessens the influence of aging when evaluating collectability.

States with Government Programs – California

The state of California, in which the Company conducts a significant portion of its business, has implemented reimbursement programs similar to those previously funded by HRSA with its COVID-19 Uninsured Group. These programs will accept claims retroactive to April 8, 2020, thus any accounts receivables in this jurisdiction are not expected to be collectible if they date back prior to this date. The Company submitted its application retroactive to June 2021. The Company will also incur credit losses when there is not valid information submitted such as missing names. Additionally, the program does not pay at the same rate for PCR testing as the prior federal program and as a result, the Company expects to incur credit losses on the reduced payments on outstanding balances previously billed to HRSA.

To qualify for the COVID-19 Uninsured Group, individuals must:

• Have no health insurance, or

• Have private health insurance that does not cover at no cost all diagnostic testing, testing- related services, and treatment services, including all medically necessary care for COVID-19, or

• Not have Medicare, or

• Are not eligible under any of the other Medi-Cal programs (with the exception of individuals who have not met their Medi-Cal Share of Cost obligation), and

• Be a California resident.

The Company’s associated laboratory’s full application has been submitted for both the PAVE - Provider Application and Validation for Enrollment Application and for the Provider Enrollment Division (“PED”) Emergency Enrollment, which would result in the provider number. The application is currently in the process of being reviewed. Although timing of approval can be difficult to estimate as it is out of the Company’s control, the application is expected to be approved between April and June of 2023 to process from the date of issuance of these financial statements. Once approval has been obtained, the Company will be able to obtain temporary IDs for its patients and submit claims to the California state COVID-19 Uninsured program.

27

Medi-Cal issued a Deficiency Letter by DHCS on March 21, 2023, which outlined minor deficiencies in the application (“Deficiency Letter”). The deficiencies listed are of the kind that can be easily cured such as requesting a copy of business licenses.

On March 7, 2023, DHCS published the “Medi-Cal COVID-19 Public Health Emergency and Continuous Coverage Operational Unwinding Plan” on its official website, which outlines several facets of the COVID-19 Uninsured Group which are either being terminated or extended as the end of public health emergency approaches (the “Unwinding Plan”). One aspect of the COVID-19 Uninsured Group that is in its extension phase is the opportunity for medical providers to submit applications to be considered qualified Medi-Cal providers and in turn, to benefit from the reimbursements, on the condition that they satisfy ancillary requirements.

To benefit from these reimbursements, in addition to being enrolled as a Qualified Medical Provider, providers must have satisfied the following requirements in relation to the COVID Treatments they provided to patients, as beneficiaries of:

• They have checked their patients’ health care coverage eligibility and have confirmed that their patient is uninsured. They have verified that the patient did not have coverage through an individual, or employer-sponsored plan, a federal healthcare program, or the Federal Employees Health Benefits Program at the time services were rendered, and no other payer was to reimburse any COVID-19 vaccination, testing and/or care for that patient.

• They acknowledge that they will accept defined program reimbursement as payment in full.

• They acknowledge that they agree not to balance bill the patient for COVID Treatments rendered.

• They acknowledge that they agree to all COVID-19 Uninsured Group terms and conditions and may be subject to post-

• reimbursement audit review.

Due to the timing of approval from the program the Company will also potentially incur credit losses from not filing claims or receiving temporary IDs in time for the program to pay claims.

California State Program

The Company expects to incur credit losses of 49% on state covered testing receivable balances for tests completed in California after HRSA discontinuance based on historical remittance information from claims submitted under the federal program with similar testing criteria and the above mentioned risk factors, and the Company’s best estimate of the ability to submit claims on a timely basis.The Company expects to bill retroactive to June 2021, which would cover tests not paid by HRSA that are eligible under this program.

States with No Government Programs

No Government Program - Uninsured

The Company expects to incur credit losses of 100% on testing receivables that have no insurance coverage in jurisdictions with no state funded program for uninsured patients, or states which have no viable program from which to collect past testing receivables.

Insurance

These are cases where the Company believes there are underlying insurance coverage and due to potential time constraints may not have the ability to utilize state programs for patients that are in fact not insured.

The Company used historic collection rates and management's estimates relating the aging of the receivable in order to estimate its expected credit losses on its insurance receivables. The Company will incur credit losses when an insurance company denies a claim or if a patient puts incorrect insurance information into the EHR.

Insurance (Current, Aged 90+ Days, 90-180 Days, 270+ Days)

The Company utilizes a billing agent who bills/rebills insurance receivables at least once per quarter. Once an insurance testing receivable reaches this age (90 days) it is determined to have a higher expected loss rate. The billing agent utilizes an algorithm to help deal with rejections from insurance companies that will attempt to rebill with corrected information. As testing receivables age after this rebilling this increases the expected loss rate.

28

The expected loss rate on testing receivables with no state programs are: 20% on testing receivables that are current, 30% on testing receivables aged 90-180 days, 40% on testing receivables aged 180-270 days and 50% on testing receivables aged in excess of 270 days. These expected credit loss rates are based on management’s understanding of the billing algorithm and success in the past recovering aged insurance receivables in conjunction with historical remittance data. Additionally, the Company is exploring insurance discovery products for aged testing receivables.

Loss Rate Expected Losses Net	Total California State Program Uncovered State Programs Current Insurance 90-180 Days Insurance 180-270 Days Insurance 270+ Days Insurance
	$ 20,394,998 $ 9,693,353 $ 1,217,073 $ 861,981 $ 2,250,275 $ 2,657,502 $ 3,714,814 49% 100% 20% 30% 40% 50% 9,734,703 4,749,743 1,217,073 172,396 675,082 1,063,001 1,857,407
	$ 10,660,295 $ 4,943,610 $ - $ 689,585 $ 1,575,193 $ 1,594,501 $ 1,857,407

Continuity of Expected Credit Losses

Expected credit losses netted in accounts receivable as at December 31, 2022 are $9,734,703 (December 31, 2021 - $1,517,113). The expected credit loss recorded in the year ended December 31, 2022 is $7,808,890 (2021 - $1,861,023).

For theyear ended December 31, 2022	For theyear ended December 31, 2022
Opening Balance Additions Writeoffs Recoveries/Reversals Foreign Exchange Closing Balance	1,517,113 8,152,736 - 343,846 - 408,700
	9,734,703

For theyear ended December 31, 2021	For theyear ended December 31, 2021
Opening Balance Additions Writeoffs Recoveries/Reversals Foreign Exchange Closing Balance	191,709 1,861,023 383,239 - 114,664 - 37,716 -
	1,517,113

Liquidity risk

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

The Company has financed its cash requirements primarily through its gross profit from Collection Sites. The Company controls liquidity risk through management of working capital, cash flows and the availability and sourcing of financing.

As at December 31, 2022, the Company had net current liabilities of $831,860. The net current liabilities are currently primarily accounts receivable from Mass Labs billed on behalf of the Company. These are primarily made up of insurance companies and government programs. As the pivot in strategy to Increased Patient Access Program for the patients occurred in May 2021 the Company expected to have a cash loss from operations as there was an expected increase in accounts receivable. Additionally, there may be fluctuations in the Company’s liquidity resources as the primary payor is transitioned from HRSA to the state of California. There are uncertainties surrounding timing of payments from the payor that may put a further strain on the working capital of the Company. The Company’s primary source of liquidity is the

29

collection of these receivable balances.

The following table shows the Company’s sources of liquidity by asset as at December 31, 2022 and December 31, 2021:

December 31, 2022		Total		Less than 1 year		1-3 years	More than 3 years	More than 3 years
Cash and cash equivalents	$	4,271,549	$	4,271,549	$	-	$	-
Inventory		343,342		343,342		-
Accounts receivable Prepaid expenses Public investments		11,708,256 522,196 2,314		11,708,256 522,196 2,314		- - -		- - -
Total current assets - December 31, 2022	$	16,847,657	$	16,847,657	$	-	$	-
December 31, 2021		Total		Less than 1 year		1-3 years	More than 3 years
Cash and cash equivalents Inventory Note and loans receivable Accounts receivable Prepaid expenses Public investments	$	112,397 388,631 12,923 55,314,642 24,227 4,302	$	112,397 388,631 12,923 55,314,642 24,227 4,302	$	- - - - -	$	- - - - -
Total current assets - December 31, 2021	$	55,857,122	$	55,857,122	$	-	$	-

The Company is obligated to the following contractual maturities of undiscounted cash flows as at December 31, 2022:

Contractual

Contractual
Obligations	Total Less than 1 year 1- 3 years 4- 5 years After 5 years
Convertible note Lease obligations Accounts payable Income taxes payable Loans payable Other liabilities	1,200,000 $ 1,200,000 $ - $ - $ 457,110 457,110 - - - 12,414,204 12,414,204 - - - 2,062,981 2,062,981 96,378 96,378 - - - 2,386,035 1,573,395 812,640 - -
	18,616,708 $ 17,804,068 $ 812,640 $ - $ - $

Market risk

a) Currency risk

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

As at December 31, 2022, the Company had the following financial assets and liabilities denominated in currencies other than the Canadian dollar:

==> picture [301 x 127] intentionally omitted <==

----- Start of picture text -----

December 31, 2022 U.S. dollars
Cash and cash equivalents $ 3,006,714
Accounts receivable 8,163,875
Advances 16,950
Accounts payable and accrued liabilities (4,529,804)
Lease liabiliites (327,948)
Other liabilities (1,750,000)
Income taxes payable (1,523,170)
$ 3,056,618
----- End of picture text -----

30

==> picture [301 x 108] intentionally omitted <==

----- Start of picture text -----

December 31, 2021 U.S. dollars
Cash and cash equivalents $ 87,261
Accounts receivable 43,310,624
Advances 16,950
Loans Receivable 403,957
Accounts payable and accrued liabilities (21,694,675)
Income taxes payable (4,840,593)
$ 17,283,524
----- End of picture text -----

Market risk

• a) Currency risk

A 10% increase in the value of foreign currencies against the functional currencies in which the Company held financial instruments as of December 31, 2022 would result in an estimated increase in income of approximately $408,000 (2021 - $2,185,000).

• b) Interest rate risk

A 10% increase in interest rates based on the balance of cash at December 31, 2022, would result in an increase of $407,000 (2021 - $11,000) in annual interest income.

• c) Price and concentration risk

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

Fair value hierarchy

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

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

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

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

The following table sets forth the Company’s financial assets and liabilities measured at fair value by level within the fair value hierarchy as at December 31, 2022 and 2021:

As at December 31, 2022
	Level 1			Level 2		Level 3		Total
Cash equivalents	$ 3,052,220		$	-	$	-	$	3,052,220
Public investments	2,314			-		-		2,314
Private investments		-		-		-		-
Total	$ 3,054,534		$	-	$	-	$	3,054,534
As at December 31, 2021
	Level 1			Level 2		Level 3		Total
Public investments	$	-	$	4,302	$	-	$	4,302
Private investments		-		-		-		-
Total	$	-	$	4,302	$	-	$	4,302

Level 2 Hierarchy

At December 31, 2021, the 172,071 common shares of Last Mile Holdings Ltd. (formerly OjO Electric Corp.) were held in escrow, and therefore the full value of the investment had been recorded at Level 2 of the fair value hierarchy. This transferred to Level 1 in the year ended December 31, 2022.

Level 3 Hierarchy

Within Level 3, the Company includes private company investments that are not quoted on an exchange. The key assumptions used in the valuation of these investments include (but are not limited to) the value at which a recent financing

31

was done by the investee, company-specific information, trends in general market conditions and the share performance of comparable publicly traded companies.

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

The following table presents the fair value, categorized by key valuation techniques and the unobservable inputs used within Level 3 as at December 31, 2022 and 2021:

					Range of
				Significant	significant
			Valuation	unobservable	unobservable
Description		r vaue	technique	input(s)	input(s)
December 31, 2022
Glenco Medical	$	-	Recoverable amount	-	-
Latin-Canada Pharma Inc. Marvel Diagnostics,Inc.		- -	Recoverable amount Recoverable amount	- -	- -
	$	-
December 31, 2021 Glenco Medical	$	-	Recoverable amount	-	-
Latin-Canada Pharma Inc.		-	Recoverable amount	-	-
Marvel Diagnostics,Inc.		-	Recoverable amount	-	-
	$	-

Marvel Diagnostics, Inc. (“Marvel”)

On January 24, 2021, the Company completed a share purchase agreement to acquire up to 40% of Marvel for an aggregate price of up to USD$1.0 million through a series of milestone-based payments. The Company fully impaired the investment as the technology in Marvel was determined not to be commercially viable.

Glenco Medical (“Glenco”)

The Company invested in Glenco in exchange for 800,000 shares of the Company in June 2020 with an estimated fair value of $2,220,000. On December 31, 2020 the Company had written down the investment in Glenco due to managements expectations of future activity. Should market conditions improve and the fair value of the investment increase, the asset will be written up at that time.

Latin-Canada Pharma Inc. (“LCP”)

The Company invested in LCP in exchange for 800,000 shares of the Company in July 2020 with an estimated fair value of $2,040,000. The Company fully impaired the investment in LCP due to managements expectation of future activity. Should market conditions improve and the fair value of the investments increase, the asset will be written up at that time.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Refer to the financial statements for a full discussion of our critical accounting policies and estimates.

OUTSTANDING SHARE DATA

The Company is authorized to issue an unlimited number of common shares, without par value.

The Company's outstanding capital was as follows as at the date of this MD&A:

32

Commonshares	27,019,248
Share options	2,137,833
Warrants	11,868,095

DISCLOSURE CONTROLS AND PROCEDURES AND INTERNAL CONTROLS OVER FINANCIAL REPORTING

The Chief Executive Officer and Chief Financial Officer have designed or caused to be designed under their supervision, disclosure controls and procedures (“DC&P”) which provide reasonable assurance that material information regarding the Company is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, in a timely manner. In addition, the Chief Executive Officer and Chief Financial Officer have designed or caused to be designed under their supervision internal control over financial reporting (“ICFR”) to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements. The Company’s ICFR was designed based on the framework and criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

There was no change in the Company’s ICFR during the three months ended December 31, 2022, that has materially affected or is reasonably likely to materially affect the Company’s ICFR.

The Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of the design and operation of the Company’s DC&P and ICFR as of the end of the financial year ended December 31, 2022. Based on such evaluations, management concluded that the Company’s DC&P and ICFR were effective as at December 31, 2022.

The Chief Executive Officer and Chief Financial Officer may take additional actions from time to time as they deem to be necessary or desirable to enhance the Company’s DC&P and ICFR. The effectiveness of changes to the Company’s ICFR will be evaluated by or under the supervision of the Company’s Chief Executive Officer and Chief Financial Officer as required in connection with the preparation and filing of the Issuer’s annual financial statements, and their conclusions about the effectiveness of the Company’s DC&P and ICFR as at the end of the current financial year will be disclosed in the Company’s annual MD&A.

The Company’s management, including the Chief Executive Officer and Chief Financial Officer, believes that a control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that its objectives are met. Due to inherent limitations in all such systems, no evaluations of controls can provide absolute assurance that all control issues, if any, within a company have been detected. Therefore, even those systems determined to be effective can provide only reasonable, not absolute, assurance that the objectives of the control systems have been met.

33