MISSION READY SOLUTIONS INC.

Management Discussion and Analysis

For the three months ended March 31, 2020

Introduction

The following management discussion and analysis ("MD&A"), prepared as of July 16, 2020, is a review of the operations, current financial position and outlook for Mission Ready Solutions Inc. and should be read in conjunction with the Company's most recently issued audited consolidated financial statements for the year ended December 31, 2019 and the unaudited condensed consolidated interim financial statements for the three months ended March 31, 2020, copies of which are filed on the SEDAR website: www.sedar.com.

The Company prepares its consolidated financial statements in accordance with International Financial Reporting Standards ("IFRS"). All dollar figures included herein and in the following discussion and analysis are quoted in Canadian dollars unless otherwise noted.

Management is responsible for the information contained in this MD&A and its consistency with information presented to the Audit Committee and Board of Directors. All information in this document has been reviewed and approved by the Audit Committee and Board of Directors. This review was performed by management with information available as of July 16, 2020.

The financial information in this MD&A is derived from the Company's consolidated financial statements prepared in accordance with IFRS. This MD&A may contain forward looking statements based on assumptions and judgments of management regarding events or results that may prove to be inaccurate as a result of risk factors beyond its control. Actual results may differ materially from the expected results.

Forward-Looking Information

This MD&A may include certain "forward-looking statements" within the meaning of applicable Canadian securities legislation. Other than statements of historical facts, all statements included in this MD&A that address activities, events or developments that the Company expects or anticipates will or may occur in the future, including such things as future business strategy, competition, strengths, goals, expansion and growth of the Company's businesses, operations, plans and other such matters are forward looking statements. When used in this MD&A, the words "estimate", "plan", "anticipate", "expect", "intend", "believe", "pipeline", and similar expressions are intended to identify forward-looking statements. Forwardlooking information is based in part, on assumptions that may change, thus causing actual results or anticipated events to differ materially from those expressed or implied in any forward-looking information. Such assumptions include the stability or improvement of general economic conditions. These statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These forward statements are made as of the date of this MD&A and are expressly qualified in their entirety by this cautionary statement. Subject to applicable securities laws, the Company does not assume any obligation to update or revise them to reflect new events or circumstances. Such factors include, among others, risks related to unavailability of financing, unfavorable market conditions and other factors. Although the Company has attempted to identify important factors that could cause actual results to differ materially, 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.

MISSION READY SOLUTIONS INC. Management's Discussion and Analysis For the Three Months Ended March 31, 2020

Description of the Company's Business

Mission Ready serves to prevent injuries and enhance the performance of military personnel, first-responders and all those serving on the front lines by equipping them with the next generation of personal protective equipment ("PPE").

Mission Ready Solutions Inc. ("Mission Ready") specializes in providing personal protective solutions to the global defense, security and first-responder markets as a product manufacturer and an experienced government contractor. Mission Ready leverages its privileged access to valuable federal procurement vehicles including the Special Operational Equipment ("SOE") Tailored Logistics Support ("TLS") contract administered by the United States ("US") Defense Logistics Agency ("DLA"). Additionally, Mission Ready is an incumbent awardee of Multiple Award Schedule ("MAS") contracts administered by the US General Services Administration ("GSA").

Mission Ready trades on the TSX Venture Exchange under the symbol MRS.

Mission Ready's operations are conducted through its wholly-owned subsidiaries including Mission Ready Holdings Ltd., Mission Ready Holdings USA Inc., Protect The Force, Inc. ("PTF"), No-Contact, LLC (dba PTF Innovations) ("No Contact"), PTF Manufacturing Inc. ("PTFM") and Unifire, Inc. ("Unifire") (collectively, the "Company").

As at March 31, 2020, the Company had a corporate office in Vancouver, British Columbia, Canada, a manufacturing facility in Jacksboro, Tennessee, USA, a Unifire office in Spokane, Washington, USA, and a Unifire office in Wellington, Florida, USA.

DISCUSSION OF OPERATIONS

Unifire, Inc.

Founded in 1987, Unifire is one of six companies, globally, authorized to provide equipment and designated services under DLA's SOE TLS program. Unifire is a designated Small Business that distributes fire, military, emergency, and law enforcement products through established relationships with over 500 vendors representing approximately 1.5 million products. As an incumbent awardee of the SOE TLS contract, with extensive knowledge and experience in providing solutions to the US Federal Government, Unifire utilizes its highly-efficient, scalable technology infrastructure to provide procurement solutions for program managers, military and federal contracting offices, base supply centers, and other governmental supply agencies.

Protect The Force Inc.

Protect The Force Inc. ("PTF") brings innovative products, manufacturing and entrepreneurial expertise together into one unified business with a focus on developing and sustaining strong relationships within the protective products industry. Developing, manufacturing and fielding premier protective innovations to government and industry clients, Protect The Force is led by a team with over a century of combined experience in management, production, operations, research and development, marketing and product sales. Protect The Force – Protection is in our DNA™.

PTF Manufacturing Inc.

Protect The Force Manufacturing is headquartered in Jacksboro Tennessee and serves as the Company's manufacturing headquarters to develop and grow its product lines for introduction to the marketplace. Offering a full range of products dedicated to the tactical and defense industry, PTFM's portfolio of products include tactical outerwear, canine armor, bomb suits/blankets, riot control protection, carriers, textiles with integrated electronics and ballistic panels. Prospective Clients/Markets include the Department of Defense, State Department, General Services Administration, Department of Homeland Security, law enforcement agencies, fire & rescue, tactical distributors/dealers, private security, and GSA support companies.

PTF Innovations

PTF Innovations pioneers new and advanced technologies to meet the needs of the global defense, security and personal protection markets. PTF Innovations' team of subject matter experts create leading, tech-centric solutions within the protective services sphere, and utilize their patented technologies – including Flex9Armor and No-Contact – to redefine the standards of tactical protection and performance.

10-20 Services Inc.

As part of the Company's mandate to redirect resources to its growing government contracting and distribution division, during the period, management decided to wind down its decontamination and repair business operated by 10-20 Services Inc. ("10-20 Services"). The Company intends to liquidate the remaining assets at the cleaning and repair facility in Fayetteville, North Carolina, USA.

Corporate Overview

Mission Ready manufactures and distributes leading defense and tactical solutions to prevent injuries and enhance the performance of military personnel, first-responders and all who serve on the front lines by equipping them with the next generation of personal protective technologies. Mission Ready consists of a diverse team of industry veterans with a united vision to establish the Company as a leader in government contracting, manufacturing and distributing personal protective solutions.

SUMMARY OF RECENT EVENTS

Unifire Orders Totalling ~C$75,000,000

In September 2019, the Company announced additional contract awards valued at $15,000,000, bringing the aggregate value of awards received during the year to approximately $75,000,000. The products subject to the awards are invoiced by the Company as they are shipped – in accordance with a delivery schedule that accompanies each award – and revenues are recorded to the Company's books during the fiscal quarter in which each respective invoice is submitted. The Company's current order queue includes delivery dates through the first quarter of 2021.

Debt Settlements

In August 2019, the Company issued an aggregate of 1,481,818 common shares of the Company, at a deemed value of CAD $0.22 per share, to settle outstanding director fees, consulting fees, and other amounts owed totaling CAD $326,000.

In January 2020, the Company issued an aggregate of 14,607,387 common shares of the Company, at a deemed value of CAD $0.15 per share, to settle outstanding promissory notes, consulting fees, accrued interest and other amounts owed totalling CAD $2,190,658.

Private Placements

On April 2, 2019 and August 15, 2019, respectively, the Company closed non-brokered private placement offerings and issued an aggregate of 12,626,500 units at a price of $0.25 per unit for gross proceeds of $3,156,625. Each unit consisted of one common share and one transferable common share purchase warrant, with each warrant exercisable into one share at an exercise price of $0.40 per share for one year from the date of issuance.

Alvin "Skip" Church Appointed VP of Unifire Operations

Following over a decade of service as a commissioned officer in the United States Marine Corps, Mr. Church served in an executive capacity with several organizations in the personal protection industry. In addition to multiple certifications related to the defense industry, Mr. Church holds a Bachelor's degree in Finance and a Master's degree in Logistics Management.

John Stone Appointed President of Unifire

In August 2019, John Stone was appointed as the President of Unifire. Following his time serving with the United States Air Force, Mr. Stone joined forces with what is now the largest prime vendor performing on the TLS contract. Mr. Stone was instrumental in developing and implementing the organization's TLS sales strategy, and leading it on a vertical sales trajectory from ~USD $1 million in 1999 to ~USD $1.3 billion in 2010. Mr. Stone went on to become the founder of a successful supplier representation group and served as the president of a Command, Control, Communications, Computer, Intelligence, Surveillance and Reconnaissance (C4ISR) integration company.

Chief Operating Officer Appointment

In July 2019, Marcus Treiber was appointed as the Chief Operating Officer of the Company. Mr. Treiber previously served as the Company's VP of Operations and has been instrumental in the Company's recent successes. Mr. Treiber will continue to establish and refine the Company's operations and sales protocols for better efficiency, increased bandwidth and, ultimately, bottom-line growth.

Director Appointment

In March 2020, Daniel Raczykowski was appointed as a Director of the Company. Mr. Raczykowski continues to serve as the Chief Operating Officer of Unifire, a position he has held since co-founding Unifire in 1987. With 38 years' experience in the industry, Mr. Raczykowski is widely recognized as a top Subject Matter Expert (SME) on rescue operations, tools and equipment, which compliment his extensive background in military operations, logistics, training/instruction, business development, and client relations.

Incentive Stock Option Grants

In August 2019 and September 2019, respectively, the Company issued an aggregate of 12,750,000 incentive stock options to certain directors, officers and employees in an effort to attract and retain key personnel and become more agile through the preservation of capital to be invested into corporate growth initiatives.

SOE TLS Contract

During the acquisition process, the Company, in collaboration with Unifire management, successfully completed a comprehensive submission for the SOE TLS contract renewal in advance of the January 2019 deadline. Subsequently, On March 7, 2019, Unifire was awarded a bridge contract, extending its SOE TLS contract through March 6, 2020 (the "SOE Bridge"). The SOE Bridge contract was awarded to the six incumbent SOE TLS contract holders, including Unifire, and continued coverage of the full line of SOE and incidental services under the DLA Troop Support SOE TLS Program.

On December 5, 2019, the Company reported that, further to its February 12, 2019 news release announcing that the Company had submitted a proposal to DLA to remain as an incumbent contractor upon renewal of the SOE TLS contract, the Company received a notification from DLA stating that its proposal "[was] being excluded from the competitive range and [would] not be given further consideration for award."

On December 13, 2019, the Company reported that it was projecting its 2019 annual revenues to exceed its 2018 annual revenues by over 600% which was largely attributable to awards that it had received during 2019 through the SOE Bridge, which include scheduled shipments through the 1st quarter of 2021, were received through the previously announced DLA bridge contract.

Unifire Acquisition

In April 2019, Mission Ready acquired Unifire, an incumbent awardee of DLA's Special Operations Equipment contract, with extensive knowledge and experience in providing solutions to the US Federal Government, Unifire utilizes its highly-efficient and scalable technology infrastructure to provide procurement solutions for program managers, military and federal contracting offices, base supply centers, and other governmental supply agencies.

The consideration for the Acquisition included:

1. The issuance of an aggregate of 26,315,790 common shares in the capital of the Company, which are subject to a four-month statutory hold period and escrow restrictions whereby the shares will be released incrementally up to the final release date of January 1, 2022; and
1. Cash payments in the aggregate of USD $4,000,000, payable quarterly, with the final payment to be remitted on January 1, 2022. The cash consideration is subject to adjustment within seventy-five (75) calendar days after the closing date based on an unaudited balance sheet of the Company as of the effective time of closing of the Acquisition and the Company's good faith determination of (i) the net working capital of the Company, to the extent that the net working capital of Unifire on the effective date of the Acquisition is greater or less than USD $1,856,798, and (ii) the amount of the sellers' expenses as of the closing. The sellers have the opportunity to dispute such adjustments with thirty (30) days of receiving a closing statement from the Company. Any such adjustments, whether positive or negative, are on a dollar-for-dollar basis.

RESULTS OF OPERATIONS

Results of Operations for the Three Months Ended March 31, 2020

The Company's gross revenues for the three months were $15.09 million, an increase of $14.60 million from the $0.49 million realized in the same period in 2019, a 2,961% increase. This is a direct result of the closing of the acquisition of Unifire and reporting the revenues of Unifire from April 2019. The Company recorded a cost of goods sold of $14.28 million for the period ended March 31, 2020 compared to $0.37 million in 2019. The gross margin was 5% for the period.

During the period, the Company's manufacturing, research and development revenue was significantly lower by $0.11 million compared to the same period in 2019 a direct result of management's complete attention and devotion towards the Unifire acquisition and winning contract awards through Unifire. Furthermore, inspection and cleaning revenue was lower by $0.11 million compared to the same period in 2019. The Company is planning to eliminate the inspection and cleaning division going forward to focus on Unifire operations. There were no revenues from 10-20 during the first quarter.

Total operating expenses was higher by $2.31 million in 2020 compared to 2019. This is mainly attributed to a non-cash stock-based compensation expense of $1.15 million recorded during the period for the vesting of stock options granted to certain officers, directors and/or consultants of the Company and a remedial arrangement to remedy an increase in the exercise price of certain stock options due to an administrative delay in formalizing the option terms. In addition, operating expenses have significantly increased due to the closing of the acquisition of Unifire in April 2019. In particular, salaries and benefits increased by $0.46 million and interest expense increased by $0.40 million as a result of various short-term loans obtained to fund the Unifire operations.

Total expenses from manufacturing, research and development activity decreased by $0.51 million to $0.19 million, which included cost of goods sold of $Nil. Total costs from the inspection and cleaning decreased by $0.16 million to $Nil million, which also included cost of goods sold of $Nil million for the three months ended March 31, 2020.

The Company's corporate head office costs increased by $1.27 million, mainly due to non-cash stock-based compensation of $1.15 million recorded in 2020 compared to the comparative period as discussed above.

Net loss for three months ended March 31, 2020 was $1.29 million, a increase of $0.70 million from a net loss of $0.59 million in the prior period. The increase in net loss is mainly due to an increase in non-cash stock-based compensation as well as higher interest costs of short-term loans as discussed above. The increase in net loss was partially offset by the Company issuing 14,604,387 common shares to settle balances outstanding to certain creditors of $2.20 million, resulting in a gain on settlement of debts of $0.95 million.

The Company derives approximately 97% of its revenues from customers and clients where the end customer is the US Department of Defense, law enforcement or private security.

SUMMARY OF QUARTERLY FINANCIAL RESULTS

The following table provides a summary of the Company's eight quarterly results ending on March 31, 2020:

	March 31,2020	December 31,2019	September 30,2019	June 30,2019
	$	$	$	$
Revenue	15,086,440	13,471,754	4,956,622	2,271,698
Net comprehensive loss	(1,994,519)	(2,454,010)	(3,325,892)	(1,198,683)
Basic and diluted net loss per share	(0.01)	(0.01)	(0.02)	(0.01)
	March 31,2019	December 31,2018	September 30,2018	June 30,2018
	$	$	$
Revenue	492,874	636,441	643,595	914,289
Net comprehensive loss	(612,916)	(1,905,257)	(306,358)	(1,496,313)
Basic and diluted net loss per share	(0.00)	(0.02)	(0.00)	(0.01)

During the three months ended March 31, 2020, the Company recognized a gain on settlement of debts of $949,285 related to the issuance of 14,604,387 common shares to settle balances outstanding to certain creditors of $2,190,658, resulting in a lower net comprehensive loss for the period.

LIQUIDITY AND CAPITAL RESOURCES

At March 31, 2020, the Company had working capital deficit of $13,088,131 (December 31, 2019 – working capital deficit of $11,949,480) including cash and cash equivalents of $229,809 (December 31, 2019 - $645,965). The Company's working capital deficit increased mainly due to a decrease in cash of $0.42 million and increase in trade and other payables of $5.70 million which was partially offset by an increase in trade and other receivables of $4.10 million.

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards applicable to a going concern, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The continuation of the Company as a going concern is dependent on its ability to obtain necessary equity financing for its commitments. The Company's current cash resources are insufficient to meet its working capital requirements.

On January 3, 2020, the Company issued 14,604,387 common shares of the Company valued at $1,241,373 to settle certain outstanding creditors of the Company for an aggregate amount of $2,190,658 in which $1,983,750 was included in notes payable and $206,908 was included in trade and other payables.

Future Cash Requirements

The Company's future capital requirements will depend on many factors, including, among others, its ability to earn cash flow from operations. Should the Company wish to pursue current and future business opportunities, additional funding will be required. If additional funds are raised through the issuance of equity securities, the percentage ownership of current shareholders will be reduced and such equity securities may have rights, preferences, or privileges senior to those of the holders of the Company's common stock. No assurance can be given that additional financing will be available, or that it can be obtained on terms acceptable to the Company and its shareholders. If adequate funds are not available, the Company may not be able to meet its contractual requirements.

FINANCIAL INSTRUMENTS

Classification of financial instruments

	March 31,	December 31,
	2020	2019
	$	$
FVTPL financial asset	229,809	645,965
Financial assets at amortized costs	7,658,768	3,560,203
Financial liabilities at amortized costs	26,463,461	21,422,733

The fair value of the Company's financial assets and liabilities approximates the carrying amount.

Management of Industry and Financial Risk

The Company may be at risk for regulatory issues and fluctuations in exchange rates.

The Company's financial instruments are exposed to certain financial risks, which include the following:

Credit risk

Credit risk is the risk of loss associated with a counterparty's inability to fulfil its payment obligations. The Company limits its exposure to credit loss for cash by placing its cash with high quality financial institutions and for trade receivables by performing standard credit checks. The credit risk for cash and trade receivables is considered negligible since the counterparties are reputable banks with high quality external credit ratings and customers with no history of default.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations when they become due. The Company ensures, as far as reasonably possible, that it will have sufficient capital in order to meet short-term business requirements, after taking into account cash flows from operations and the Company's holdings of cash. The Company has working capital deficit of $13,088,131 as at March 31, 2020. There can be no assurance that the Company will be successful with generating and maintaining profitable operations or will be able to secure future debt or equity financing for its working capital and expansion activities.

Foreign exchange risk

The Company operates internationally and is exposed to foreign currency risk arising from currency exposures to Canadian dollars. The main currency to which the Company has an exposure is the U.S. dollar. The Company is exposed to currency risk to the extent of its cash, trade and other payables, purchase agreements payable, and loan payable that are denominated in U.S. dollars. The Company does not hedge its exposure to fluctuations in the related foreign exchange rates. The Company's exposure to currency risk is currently considered insignificant.

Interest Rate Risk

Interest rate risk is the risk that future cash flows will fluctuate as a result of changes in market interest rates. Interests on the Company's promissory notes payable and loan payable are based on fixed rates, and as such, the Company is not exposed to significant interest rate risk.

Capital management

The Company's policy is to maintain a strong capital base so as to maintain investor and creditor confidence and to sustain future development of the business. The capital structure of the Company consists of equity, net of cash and cash equivalents. There were no changes in the Company's approach to capital management during the period. The Company is not subject to any externally imposed capital requirements.

OFF-BALANCE SHEET ARRANGEMENTS

The Company has no off-balance sheet arrangements.

TRANSACTIONS WITH RELATED PARTIES

Compensation of Key Management Personnel

The compensation paid or payable to directors and key management personnel, including consulting and professional fees for administrative, management, accounting, and legal services provided by these related parties, during the three months ended March 31, 2020 and 2019 are as follows:

	2020$	2019$
Salaries and other short-term employee benefitsDirector fees	242,83818,000	160,77024,068
	260,838	184,838

All related party transactions were in the ordinary course of business and were measured at their exchange amount as agreed between the related parties.

During the three months ended March 31, 2020, the Company paid or accrued wages and benefits of $75,650 (2019 - $74,784) to Jeffery Schwartz, Chief Executive Officer of the Company.

During the three months ended March 31, 2020, the Company paid or accrued consulting fees of $15,000 (2019 - $15,000) to Dong Shim, Chief Financial Officer of the Company.

During the three months ended March 31, 2020, the Company paid or accrued wages and benefits of $84,943 (2019 - $52,812) to Terrace Nixon, Chief Compliance Officer of the Company.

During the three months ended March 31, 2020, the Company paid or accrued wages and benefits of $67,245 (2019 - $Nil) to Daniel Raczykowski, a Director of the Company.

During the three months ended March 31, 2020, the Company paid or accrued director fees of $6,000 (2019 - $6,000) to Paul Litchfield, a Director of the Company.

During the three months ended March 31, 2020, the Company paid or accrued director fees of $6,000 (2019 - $6,000) to Mark Bishop, a Director of the Company.

During the three months ended March 31, 2020, the Company paid or accrued director fees of $6,000 (2019 - $6,000) to James Marks, a Director of the Company.

During the three months ended March 31, 2020, the Company paid or accrued director fees of $Nil (2019 - $4,068) and consulting fees of $Nil (2019 - $18,174) to William Bratton, a former Director of the Company.

During the three months ended March 31, 2020, the Company paid or accrued director fees of $Nil (2019 - $2,000) to Anthony Walton, a former Director of the Company.

Related Party Balances

As at March 31, 2020 and December 31, 2019, the Company has the following amounts owed to related parties that are noninterest bearing, unsecured, and have no specified terms of repayment.

	March 31,2020	December 31,2019
Director fees payableDue to officers and former officers	$102,324394,256	$84,324170,429
	496,580	254,753

As at March 31, 2020, the Company owed $104,348 (December 31, 2019 – $18,245) to Jeffery Schwartz, Chief Executive Officer of the Company.

As at March 31, 2020, the Company owed $37,000 (December 31, 2019 – $26,250) to Dong Shim, Chief Financial Officer of the Company.

As at March 31, 2020, the Company owed $179,981 (December 31, 2019 – $53,007) to Terrace Nixon, Chief Compliance Officer of the Company.

As at March 31, 2020, the Company owed $18,000 (December 31, 2019 – $12,000) to Paul Litchfield, a Director of the Company.

As at March 31, 2020, the Company owed $30,000 (December 31, 2019 – $24,000) to Mark Bishop, a Director of the Company.

As at March 31, 2020, the Company owed $24,000 (December 31, 2019 – $18,000) to James Marks, a Director of the Company.

As at March 31, 2020, the Company owed $89,251 (December 31, 2019 – $89,251) to William Bratton, a former Director of the Company.

As at March 31, 2020, the Company owed $14,000 (December 31, 2019 – $14,000) to Anthony Walton, a former Director of the Company.

OUTSTANDING SHARE DATA

The following share capital data is current as of the date of this MD&A:

	Balance

Shares issued and outstanding	188,525,361
Stock options	25,175,000
Share purchase warrants	15,775,488
Finders' warrants	400,000

Fully Diluted	229,875,849

Critical Accounting Estimates

The preparation of these consolidated financial statements requires management to make judgments and estimates that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these judgments and estimates. The financial statements include judgments and estimates that, by their nature, are uncertain. The impacts of such judgments and estimates are pervasive throughout the financial statements and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and the revision affects both current and future periods.

Significant assumptions about the future and other sources of judgments and estimates that management has made at the statement of financial position date that could result in a material adjustment to the carrying amounts of assets and liabilities, in the event that actual results differ from assumptions made, relate to, but are not limited to, the following:

Impairment

At the end of each reporting period, the Company's assets are reviewed to determine whether there is any indication that those assets may be impaired. If such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment, if any. The recoverable amount is the higher of fair value less costs to sell and value in use. Fair value is determined as the amount that would be obtained from the sale of the asset in an arm's length transaction between knowledgeable and willing parties. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks amount of the asset is reduced to its recoverable amount and the impairment loss is recognized in the profit of loss for the period. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash generating unit to which the asset belongs.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash- generating unit) is increased to the revised estimate of its recoverable amount, but to an amount that does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss.

Fair value of financial instruments

Management uses valuation techniques in measuring the fair value of financial instruments, where active market quotes are not available. Details of the assumptions used are provided in the notes regarding financial assets and liabilities.

In applying the valuation techniques, management makes maximum use of market inputs wherever possible, and uses estimates and assumptions that are, as far as possible, consistent with observable data that market participants would use in pricing the instrument. Where applicable data is not observable, management uses its best estimate about the assumptions that market participants would make. Such estimates include liquidity risk, credit risk, and volatility may vary from the actual prices that would be achieved in an arm's length transaction at the reporting date.

Changes in Accounting Policies

The following standard have been adopted during the year ended December 31, 2019:

• IFRS 16: Leases

CONTINGENCY

The Company is party to litigation (the "Claim") filed by a former 10-20 Services employee who worked at the Company's Barstow, California location until the facility was closed due to the lease expiry and finalization of a service contract. During the year ended December 31, 2018, the Company settled the Claim for USD $75,000. As at March 31, 2020, the Company accrued $106,403 (USD $75,000) related to this Claim and is included in trade and other payables.

During the year ended December 31, 2018, Company settled a whistleblower reprisal complaint filed under Title 10, United States Code, Section 2409, "Contractor employees: protection from reprisal for disclosure of certain information," implemented by Defense Federal Acquisition Regulation Supplement, Subpart 203.9, "Whistleblower Protections for Contractor Employees." As at March 31, 2020, the Company accrued $63,842 (USD $45,000) related to this settlement and is included in trade and other payables.

CRITICAL RISKS AND UNCERTAINTIES

Operating History

From inception to March 31, 2020, the Company has incurred losses from operations and has not generated any positive cash flow from operating activities. The Company cannot be certain that its investment strategy or development of the Company's business will be successful. The likelihood of the Company's success must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered in connection with the establishment of any business. If the Company fails to address any of those risks or difficulties adequately, business will likely suffer.

Competition

The earnings of the Company depend upon the Company's ability to locate suitable opportunities and to bring to market the proprietary products being developed by its research and development division. Competition may restrict the Company's share of the market, reduce rates of return and/or may reduce profit margins.

Coronavirus Global Pandemic Risk

In March 2020, the World Health Organization declared a global pandemic related to the virus known as COVID-19. This contagious disease outbreak, which has continued to spread, and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, potentially leading to an economic downturn. It has also disrupted the normal operations of many businesses, including the Company's. This outbreak could decrease spending, adversely affect demand for the Company's products and harm the Company's business and results of operations. It is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on the Company's business or results of operations at this time.

With employees, partners and customers across multiple geographies, the Company's management continue to closely monitor developments surrounding the COVID-19 pandemic. The Company's focus is on the safety and well-being of its employees, customers, and partners, and is taking precautions to minimize the spread of COVID-19 in alignment with local government policies and national and international agency recommendations. To help combat the pandemic, the Company has formed an independent COVID-19 response team consisting of 15 select inside and outside Company representatives working in cooperation to source and supply mission critical product and service solutions including PPE, shelters, and thirdparty logistics services. Based on the current guidance and timelines provided by government health authorities, the increased demand for critical life-saving equipment is likely to extend through, at minimum, December 2020. In consideration of this, interim arrangements have been made to ensure the maintenance of the Company's core operations despite the temporary reassignment of certain sales and contracting personnel.

FINANCIAL AND DISCLOSURE CONTROLS AND PROCEDURES

During the three months ended March 31, 2020, there has been no significant change in the Company's internal control over financial reporting since last reporting period.

The Chief Executive Officer and Chief Financial Officer of the Company are responsible for establishing and maintaining appropriate information systems, procedures and controls to ensure that information used internally and disclosed externally is complete, reliable and timely. They are also responsible for establishing adequate internal controls over financial reporting to provide sufficient knowledge to support the representations made in this MD&A and the Company's financial statements for the three months ended March 31, 2020 (together the "Interim Filings").

The Chief Executive Officer and Chief Financial Officer of the Company have filed the Venture Issuer Basic Certificate with the Interim Filings on SEDAR at www.sedar.com.

In contrast to the certificate required for non-venture issuers under National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings ("NI 52-109"), the venture issuer basic certificate does not include representations relating to the establishment and maintenance of disclosure controls and procedures ("DC&P") and internal control over financial reporting ("ICFR"), as defined in NI 52-109. Investors should be aware that inherent limitations on the ability of certifying officers of a venture issuer to design and implement on a cost-effective basis DC&P and ICFR as defined in NI 52-109 may result in additional risks to the quality, reliability, transparency, and timeliness of interim and annual filings and other reports provided under securities legislation.

ADDITIONAL INFORMATION

Additional disclosure of the Company's, material change reports, new releases, and other information can be obtained on SEDAR at www.sedar.com, or by requesting further information from the Company's head office in Vancouver, BC, Canada.