NameSilo Technologies Corp.

Consolidated Financial Statements

(Expressed in Canadian dollars)

For the Years Ended December 31, 2020 and 2019

Index

Independent Auditor's Report

Consolidated Financial Statements

Consolidated Statements of Financial Position

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Statements of Changes in Equity

Consolidated Statements of Cash Flows

Notes to the Consolidated Financial Statements

==> picture [102 x 29] intentionally omitted <==

Crowe MacKay LLP

1100 - 1177 West Hastings St. Vancouver, BC V6E 4T5 Main +1 (604) 687-4511 Fax +1 (604) 687-5805 www.crowemackay.ca

Independent Auditor's Report

To the Shareholders of NameSilo Technologies Corp.

Opinion

We have audited the consolidated financial statements of NameSilo Technologies Corp. ("the Group"), which comprise the consolidated statements of financial position as at December 31, 2020 and December 31, 2019 and the consolidated statements of comprehensive income (loss), changes in equity and cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

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

Basis for Opinion

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

Material Uncertainty Related to Going Concern

We draw attention to Note 1 to the consolidated financial statements which describes the material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Other Information

Management is responsible for the other information. The other information comprises:

Management's Discussion and Analysis

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

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

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

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

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

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

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

Auditor's Responsibilities for the Audit of the Consolidated Financial Statements

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

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

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are

responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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

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

The engagement partner on the audit resulting in this independent auditor's report is Keith Gagnon.

"Crowe MacKay LLP"

Chartered Professional Accountants Vancouver, Canada April 30, 2021

NAMESILO TECHNOLOGIES CORP. Consolidated Statements of Financial Position

(Expressed in Canadian Dollars)

(Expressed in Canadian Dollars)
		December 31,	December 31,
		2020	2019
	Notes	$	$
ASSETS
Current assets
Cash and cash equivalents		2,401,601	1,046,712
Receivables		228,412	90,640
Prepaid expenses		82,304	13,494
Registry deposits		1,493,666	1,609,739
Prepaid domain name registry fees, current portion		14,669,911	14,115,076
		18,875,894	16,875,661
Prepaid domain name registry fees, long-term portion		1,407,704	1,280,529
Digital currency	6	73,179	782,625
Investments	7	11,637,137	2,367,774
Equipment	8	4,951	6,655
Brand	9	434,494	614,932
Customer relationships	10	4,272,420	5,411,078
Goodwill	4, 11	7,764,045	7,920,155
		44,469,824	35,259,409
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities	12	2,105,356	1,830,822
Customer deposits		1,328,840	1,145,929
Deferred revenue, current portion	13	16,305,711	15,129,639
Loans payable	14	5,793,818	9,994,376
Convertible debenture–liability portion	15	-	170,000
		25,533,725	28,270,766
Deferred revenue, long-term portion	13	1,550,811	1,383,953
Deferred income tax liability	23	1,247,333	1,476,225
		28,331,869	31,130,944
SHAREHOLDERS' EQUITY
Share capital	16	35,013,486	29,314,789
Subscription advances		15,608	15,608
Convertible debt – equity portion	15	-	15,808
Contributed surplus		1,981,045	1,813,338
Accumulated other comprehensive (loss) income		(44,475)	29,456
Deficit		(22,689,370)	(29,305,662)
Total equity attributable to shareholders of the Company		14,276,294	1,883,337
Attributable to non-controlling interest		1,861,661	2,245,128
		16,137,955	4,128,465
		44,469,824	35,259,409

Nature of operations and going concern (note 1) Subsequent events (notes 14 and 16)

Approved on behalf of the Board

“Paul Andreola” Director “Colin Bowkett” Director

The notes are an integral part of these consolidated financial statements

NAMESILO TECHNOLOGIES CORP.

Consolidated Statements of Comprehensive Income (Loss) For the years ended December 31, 2020 and 2019

(Expressed in Canadian Dollars)

(Expressed in Canadian Dollars)
		2020	2019
	Notes	$	$
REVENUE		31,050,980	27,166,213
COST OF SALES		(27,313,201)	(23,641,383)
GROSS PROFIT		3,737,779	3,524,830
GENERAL AND ADMINISTRATION EXPENSES
Amortization	8, 9, 10	1,266,415	2,449,825
Consulting fees		1,231,455	456,991
Management fees	18	144,000	144,000
Office and general		1,421,128	1,327,324
Professional fees	18	492,229	371,860
Salaries		159,527	142,546
Transfer agent and filing		24,727	28,598
		4,739,481	4,921,144
Loss before other items		(1,001,702)	(1,396,314)
OTHER ITEMS
Accretion expense on convertible debenture	15	-	(26,704)
Foreign exchange (loss) gain		(2,608)	288,919
Gain on write-off of accounts payable		-	26,173
Interest and loan accretion expense	14,15	(1,269,234)	(1,655,803)
Other income		4,655	140
Realized gain on digital currency	6	437,938	181,013
Write-off of receivables		-	(125,000)
Gain (loss) on investments	7	9,201,555	(461,921)
Recovery of investments	7	-	78,500
Other expense	12	(263,413)	(587,703)
Share-based payment	5, 16, 18	(91,269)	(350,322)
		8,017,624	(2,632,708)
Income (loss) before income tax		7,015,922	(4,029,022)
Income tax expense	23	(536,312)	(11,736)
Net income(loss)		6,479,610	(4,040,758)
Other comprehensive income (loss)
Digital currency revaluation		8,863	3,024
Exchange difference on subsidiary translation		(99,577)	(698,546)
Total comprehensive income(loss)		6,388,896	(4,736,280)
Income (loss) attributable to:
Shareholders of the Company		6,616,292	(3,820,242)
Non-controlling interest		(136,682)	(220,516)
		6,479,610	(4,040,758)
Comprehensive income (loss) attributable to:
Shareholders of the Company		6,542,361	(4,387,093)
Non-controlling interest		(153,465)	(349,187)
		6,388,896	(4,736,280)
Earnings (loss) per share – basic		0.09	(0.07)
Earnings (loss) per share – diluted		0.09	(0.07)
Weighted average number of shares outstanding – basic		70,267,416	61,157,939
Weighted average number of shares outstanding – diluted		70,801,899	61,157,939

The notes are an integral part of these consolidated financial statements

NAMESILO TECHNOLOGIES CORP. Consolidated Statements of Changes in Equity

(Expressed in Canadian Dollars)

				Convertible
				Debenture
	Number of	Share	Subscription	– Equity	Contributed
	Shares	Capital	advances	Component	Surplus	AOCI	Deficit	NCI	Total
	#	$	$	$	$	$	$	$	$
Balance, January 1, 2019	58,509,898	28,237,045	18,608	15,808	1,463,016	596,307	(25,485,420)	3,010,860	7,856,224
Exercise of warrants	3,813,120	1,077,744	-	-	-	-	-	-	1,077,744
Subscriptions received	-	-	(3,000)	-	-	-	-	-	(3,000)
Share-based payment	-	-	-	-	107,462	-	-	-	107,462
Acquisition of NamePal	-	-	-	-	242,860	-	-	-	242,860
Distributions	-	-	-	-	-	-	-	(416,545)	(416,545)
Digital currency revaluation	-	-	-	-	-	3,024	-	-	3,024
Net and comprehensive loss
for the year	-	-	-	-	-	(569,875)	(3,820,242)	(349,187)	(4,739,304)
Balance, December 31, 2019	62,323,018	29,314,789	15,608	15,808	1,813,338	29,456	(29,305,662)	2,245,128	4,128,465
Shares issued for private
placements	28,751,000	5,750,200	-	-	-	-	-	-	5,750,200
Share issuance cost – cash	-	(305,399)	-	-	-	-	-	-	(305,399)
Share issuance costs –
warrants	-	(76,438)	-	-	76,438	-	-	-	-
Shares issued for debt	1,572,630	330,334	-	(15,808)	-	-	-	-	314,526
Share-based payment	-	-	-	-	49,318	-	-	-	49,318
Acquisition of NamePal	-	-	-	-	41,951	-	-	-	41,951
Distributions	-	-	-	-	-	-	-	(230,002)	(230,002)
Digital currency revaluation	-	-	-	-	-	8,863	-	-	8,863
Net and comprehensive
income (loss) for the year	-	-	-	-	-	(82,794)	6,616,292	(153,465)	6,380,033
Balance, December 31, 2020	92,646,648	35,013,486	15,608	-	1,981,045	(44,475)	(22,689,370)	1,861,661	16,137,955

The notes are an integral part of these consolidated financial statements

NAMESILO TECHNOLOGIES CORP. Consolidated Statements of Cash Flows

(Expressed in Canadian Dollars)

NAMESILO TECHNOLOGIES CORP. onsolidated Statements of Cash Flows Expressed in Canadian Dollars)
	2020	2019
Years Ended December 31,	$	$
CASH FLOWS PROVIDED BY (USED IN):
Operating activities
Net income (loss) for the year	6,479,610	(4,040,758)
Adjustment for items not involving cash:
Accretion expense on convertible debenture	-	26,704
Amortization	1,266,415	2,449,825
Deferred income tax recovery	(208,021)	(533,414)
Foreign exchange gain	2,608	(288,919)
Gain on write-off of accounts payable	-	(26,173)
Interest expense and loan accretion	1,269,234	1,649,904
Share-based payment	91,269	350,322
Write-off of receivables	-	125,000
Recovery of investments	-	(78,500)
(Gain) loss on investments	(9,201,555)	461,921
Realized gain on digital currency	(437,938)	(181,013)
	(738,378)	(85,101)
Changes in non-cash working capital related to operations:
Receivables	(137,772)	(87,859)
Prepaid expenses	15,189	(5,104)
Registry deposits	116,073	2,288,775
Prepaid domain name registry fees	(651,681)	(3,260,087)
Digital currency	1,156,247	(482,247)
Accounts payable and accrued liabilities	67,159	1,094,984
Customer deposits	182,911	270,503
Deferred revenue	1,402,648	2,109,620
Net cash provided by operating activities	1,412,396	1,843,484
Investing activities
Sale of investments	244,692	219,278
Purchase of investments	(312,500)	(47,510)
Net cash (used in) provided by investing activities	(67,808)	171,768
Financing activities
Issue of share capital	5,750,200	-
Share issuance costs	(305,399)	-
Subscription advances	-	(3,000)
Exercise of warrants	-	1,077,744
Repayment of loans payable	(5,196,226)	(2,776,554)
Convertible debenture	-	(130,000)
Distributions to NCI	(230,002)	(416,545)
Net cash provided by (used in) financing activities	18,573	(2,248,355)
Foreign exchange on cash	(8,272)	(20,032)
Increase in cash during the year	1,354,889	(253,135)
Cash–beginning of the year	1,046,712	1,299,847
Cash – end of theyear	2,401,601	1,046,712
Cash paid for interest	(867,417)	(1,481,280)
Cashpaid for income tax	(529,565)	(195,856)

Supplemental cash flow information (Note 22)

The notes are an integral part of these consolidated financial statements

NAMESILO TECHNOLOGIES CORP. Notes to the Consolidated Financial Statements For the years ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

1. NATURE OF OPERATIONS AND GOING CONCERN

NameSilo Technologies Corp. (the “Company”) is a publicly listed company incorporated in Canada with limited liability under the legislation of the Province of British Columbia. On December 3, 2018, the Company changed its name from Brisio Innovations Inc. to NameSilo Technologies Corp. The Company’s shares are listed on the Canadian Securities Exchange (“CSE”). The head office and principal address is 409 Granville Street, Suite 1052, Vancouver, BC, Canada, V6C 1T2. The Company is a provider of domain name registration services and marketplace services for the buying and selling of domain names.

These consolidated financial statements have been prepared on the basis of accounting principles applicable to a going concern, which assumes that the Company will be able to continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business.

For the year ended December 31, 2020, the Company had a net income of $6,479,610, but has a working capital deficit of $6,657,831 and an accumulated deficit of $22,689,370. The Company’s ability to continue as a going concern is dependent upon generating positive cash flows from operations, earning sufficient returns on its investments, and upon obtaining additional financing. The outcome of these matters cannot be predicted at this time. In March 2020 there was a global pandemic outbreak of COVID-19. The actual and threatened spread of the virus globally has had a material adverse effect on the global economy and specifically, the regional economies in which the Company operates. The pandemic could result in delays in the course of business and continue to have a negative impact on the stock market, including trading prices of the Company’s shares and its ability to raise new capital. These material uncertainties lend significant doubt as to the ability of the Company to meet its obligations as they come due, and accordingly, the appropriateness of the use of accounting principles applicable to a going concern. These consolidated financial statements do not include any adjustments to the amounts and classification of assets and liabilities that might be necessary should the Company be unable to continue in business.

2. BASIS OF PREPARATION

(a) Statement of compliance

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”).

These consolidated financial statements were approved by the Board of Directors on April 30, 2021.

NAMESILO TECHNOLOGIES CORP. Notes to the Consolidated Financial Statements For the years ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

(b) Basis of consolidation

These consolidated financial statements include the financial statements of the Company and the following subsidiaries subject to control by the Company:

==> picture [412 x 73] intentionally omitted <==

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

Percentage owned
Incorporated in Dec 31, 2020 Dec 31, 2019
Netco Argentina S.A. Argentina 100% 100%
1155064 BC Ltd. Canada 100% 100%
NameSilo, LLC (“NameSilo LLC”) USA 81.5% 81.5%
NamePal.com, LLC (“NamePal”) USA 81.5% 81.5%
----- End of picture text -----

Control is achieved when the Company has the power to, directly or indirectly, govern the financial and operating policies of an entity so as to obtain benefits from its activities. Subsidiaries are fully consolidated from the date on which control is obtained and continue to be consolidated until the date that such control ceases. Intercompany balances and transactions, and any unrealized income and expenses arising from intercompany transactions, are eliminated in preparing the consolidated financial statements.

(c) Functional and presentation currency

The functional currency of a company is the currency of the primary economic environment in which the Company operates. The presentation currency for a company is the currency in which the Company chooses to present its financial statements.

The functional currency of the Company, Netco Argentina S.A. and 1155064 BC Ltd. is the Canadian dollar. The functional currency of NameSilo LLC and NamePal is the US dollar. The presentation currency of the Company is the Canadian dollar.

Entities whose functional currencies differ from the presentation currency are translated into Canadian dollars as follows: assets and liabilities – at the closing rate as at the reporting date, and income and expenses – at the average rate of the period. All resulting changes are recognized in other comprehensive income as cumulative translation differences.

Transactions in foreign currencies are translated into the functional currency at exchange rates at the date of the transactions. Foreign currency differences arising on translation are recognized in profit or loss. Foreign currency monetary assets and liabilities are translated at the functional currency exchange rate at the reporting date. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. All gains and losses on translation of these foreign currency transactions are included in profit or loss.

When the Company disposes of its entire interest in a foreign operation, or loses control, joint control, or significant influence over a foreign operation, the foreign currency gains or losses accumulated in other comprehensive income related to the foreign operation are recognized in profit or loss. If an entity disposes of part of an interest in a foreign operation which remains a subsidiary, a proportionate amount of foreign currency gains or losses accumulated in other comprehensive income related to the subsidiary are reallocated between controlling and noncontrolling interests.

NAMESILO TECHNOLOGIES CORP. Notes to the Consolidated Financial Statements For the years ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

(d) Basis of measurement

The consolidated financial statements have been prepared on the historical cost basis except for financial instruments that are measured at their fair value.

In addition, these consolidated financial statements have been prepared using the accrual basis of accounting, except for cash flow information.

(e) Use of estimates and judgments

The preparation of financial statements in compliance with IFRS requires management to make certain judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates and assumptions.

The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future years affected.

Significant accounting estimates:

a. The judgment of indications of impairment of each asset and related determination of the net realizable value and write-down of these assets where applicable;
b. The tax basis of assets and liabilities and related deferred income tax assets and liabilities;
c. The inputs used in determining the valuation of share purchase warrants owned by the Company; and
d. The fair value of the convertible debenture.

Significant accounting judgments:

a. The determination of categories of financial assets and financial liabilities has been identified as an accounting policy which involves judgments or assessments made by management;
b. The Company has used judgment in determining the currency of the primary economic environment in which each entity operates. In making such determination, the management has considered the currency that mainly influences the sale prices and the cost of providing goods and services in each jurisdiction in which the Company operates. The Company also considered secondary indicators including the currency in which funds from financing activities are denominated and the currency in which funds are retained;
c. There is currently no specific definitive guidance in IFRS or alternative accounting frameworks for the accounting for digital currencies and management has exercised significant judgement in determining appropriate accounting treatment. In making this determination on the accounting for the digital currencies the Company has reviewed the

NAMESILO TECHNOLOGIES CORP. Notes to the Consolidated Financial Statements For the years ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

sources and uses of the digital currencies in the operations of its business. In the event authoritative guidance is enacted by the IASB, the Company may be required to change its policies which could result in a change in the Company’s financial position and earnings; and

d. The going concern risk assessment (see note 1).

3. SIGNIFICANT ACCOUNTING POLICIES

The accounting policies set out below have been applied consistently to all years presented in these consolidated financial statements and have been applied consistently by the Company.

(a) Business combination

Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets transferred by the Company, liabilities incurred by the Company to the former owners of the acquiree and the equity interests issued by the Company in exchange for control of the acquiree. Acquisition-related costs are generally recognized in profit or loss as incurred.

At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognized at their fair value at the acquisition date. Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer's previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after reassessment, the net of the acquisition-date amounts of the identifiable assets acquired and liabilities assumed exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree and the fair value of the acquirer's previously held interest in the acquiree (if any), the excess is recognized immediately in profit or loss as a bargain purchase gain.

When the consideration transferred by the Company in a business combination includes assets or liabilities resulting from a contingent consideration arrangement, the contingent consideration is measured at its acquisition-date fair value and included as part of the consideration transferred in a business combination. Changes in the fair value of the contingent consideration that qualify as measurement period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill. Measurement period adjustments are adjustments that arise from additional information obtained during the ‘measurement period’ (which cannot exceed one year from the acquisition date) about facts and circumstances that existed at the acquisition date.

The subsequent accounting for changes in the fair value of the contingent consideration that do not qualify as measurement period adjustments depends on how the contingent consideration is classified. Contingent consideration that is classified as equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted for within equity. Contingent consideration that is classified as an asset or a liability is remeasured at subsequent reporting dates in accordance with IAS 39, Financial Instruments: Recognition and Measurement or IAS 37, Provisions, Contingent Liabilities and Contingent Assets , as appropriate, with the corresponding gain or loss being recognized in profit or loss.

NAMESILO TECHNOLOGIES CORP. Notes to the Consolidated Financial Statements For the years ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

(b) Financial instruments

Recognition and classification

The Company recognized a financial asset or financial liability on the statement of financial position when it becomes party to the contractual provisions of the financial instrument.

The Company classifies its financial instruments in the following categories: at fair value through profit and loss (“FVTPL”), at fair value through other comprehensive income (“FVTOCI”) or at amortized cost. The Company determines the classification of financial assets at initial recognition. The classification of debt instruments is driven by the Company’s business model for managing the financial assets and their contractual cash flow characteristics.

Equity instruments that are held for trading are classified as FVTPL. For other equity instruments, on the day of acquisition the Company can make an irrevocable election (on an instrument-by-instrument basis) to designate them as at FVTOCI. Financial liabilities are measured at amortized cost, unless they are required to be measured at FVTPL (such as instruments held for trading or derivatives) or if the Company has opted to measure them at FVTPL.

Measurement

Financial assets and liabilities at FVTPL

Financial assets and liabilities carried at FVTPL are initially recorded at fair value and transaction costs are expensed in profit or loss. Realized and unrealized gains and losses arising from changes in the fair value of the financial assets and liabilities held at FVTPL are included in profit or loss in the period in which they arise. Where management has opted to recognize a financial liability at FVTPL, any changes associated with the Company’s own credit risk will be recognized in other comprehensive income.

Financial assets at FVTOCI

Elected investments in equity instruments at FVTOCI are initially recognized at fair value plus transaction costs. Subsequently they are measured at fair value, with gains and losses recognized in other comprehensive income.

Financial assets and liabilities at amortized cost

Financial assets and liabilities at amortized cost are initially recognized at fair value plus or minus transaction costs, respectively, and subsequently carried at amortized cost less any impairment.

Impairment of financial assets at amortized cost

The Company recognizes a loss allowance for expected credit losses on financial assets that are measured at amortized cost. At each reporting date, the Company measures the loss allowance for the financial asset at an amount equal to the lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. If at the reporting date, the credit risk on the financial asset has not increased significantly since initial recognition, the Company measures the loss allowance for the financial asset at an amount equal to the twelve month expected credit losses. The Company shall recognize in profit or loss, as an impairment gain or loss, the amount of expected credit losses (or reversal)

NAMESILO TECHNOLOGIES CORP. Notes to the Consolidated Financial Statements For the years ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized.

Derecognition

Financial assets

The Company derecognizes financial assets only when the contractual rights to cash flows from the financial assets expire, or when it transfers the financial assets and substantially all of the associated risks and rewards of ownership to another entity. Gains and losses on derecognition are generally recognized in profit or loss. However, gains and losses on derecognition of financial assets classified as FVTOCI remain within accumulated other comprehensive income.

Financial liabilities

The Company derecognizes financial liabilities only when its obligations under the financial liabilities are discharged, cancelled or expired. Generally, the difference between the carrying amount of the financial liability derecognized and the consideration paid and payable, including any non-cash assets, is recognized in profit or loss.

(c) Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, and cash equivalents that are readily convertible into cash and which are subject to insignificant risk of changes in value.

(d) Registry deposits

Registry deposits represent amounts on deposit with, or receivable from, various domain name registries to be used by the Company to make payments for future domain registrations or renewals.

(e) Prepaid domain name registry fees

Prepaid domain name registry services fees represent amounts paid to registries, and country code domain name operators for updating and maintaining the registries. Domain name registry fees are recognized on a straight-line basis over the life of the contracted registration term.

(f) Digital currency

The Company accepts digital currencies as a form of payment as consideration for their services. Revenue is measured based on the fair value of the digital currencies received. The fair value is determined using the spot price of the digital currency on the date of receipt, based on Blockchain.info.

The Company has classified its digital currencies as indefinite life intangible assets. The Company is using the re-valuation model to account for the digital currencies if there is an active market for their digital currencies and a significant value of daily transactions and a determinable market price for the digital currencies.

The digital currencies are recorded on the consolidated statement of financial position at their fair value and re-measured at each reporting date. Revaluation gains or losses are recognized

NAMESILO TECHNOLOGIES CORP. Notes to the Consolidated Financial Statements For the years ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

in other comprehensive income. Realized gains and losses are transferred from accumulated other comprehensive income to retained earnings.

(g) Investments in associates

An associate is an entity over which the Company has significant influence. If the Company holds, directly or indirectly (i.e. through subsidiaries), 20% or more of the voting power of the investee, it is presumed the entity has significant influence, unless it can be clearly demonstrated that this is not the case.

If the Company has significant influence over an investee, it accounts for its investment in an associate using the equity method. Under the equity method, on initial recognition, the investment in an associate is recognized at cost and the carrying amount is increased or decreased to recognize the Company’s share of the profit or loss of the investee after the date of acquisition. The Company’s share of the investee’s profit or loss is recognized in the Company’s profit or loss.

Distributions received from an investee reduce the carrying amount of the investment. It may also be necessary to adjust the carrying amount for changes in the Company’s proportionate interest in the investee arising from changes in the investee’s other comprehensive income. The Company’s share of those changes is recognized in other comprehensive income.

(h) Furniture and equipment

Furniture and equipment is stated at cost, less accumulated amortization. Amortization is provided using the straight-line method over a useful life of five years.

(i) Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses. Internally generated intangibles, excluding capitalized development costs, are not capitalized and the related expenditure is reflected in profit or loss in the period in which the expenditure is incurred.

The useful lives of intangible assets are assessed as either finite or indefinite.

Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortization period or method, as appropriate, and are treated as changes in accounting estimates. The amortization expense on intangible assets with finite lives is recognized in profit or loss in the expense category that is consistent with the function of the intangible assets.

The Company has determined the useful life of the brand to be 5 years and the customer relationships to be 7 years.

NAMESILO TECHNOLOGIES CORP. Notes to the Consolidated Financial Statements For the years ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

Intangible assets with indefinite useful lives are not amortized, but are tested for impairment annually, either individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.

Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in profit or loss when the asset is derecognised.

(j) Goodwill

Goodwill represents the excess of the purchase price in a business combination over the fair value of net tangible assets acquired. Goodwill is not subject to amortization and an impairment test is performed annually or as events occur that could indicate impairment. Goodwill is reported at cost less any impairment.

For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (“cash generating units” or “CGU”s). To test for impairment, goodwill is allocated to each of the Company’s CGUs, groups of CGUs, or an operating segment expected to benefit from the acquisition. Goodwill is tested by combining the carrying amounts of equipment and leasehold improvements, intangible assets and goodwill and comparing this to the recoverable amount. Fair value less costs of disposal is price to be received in an orderly transaction between market participants. Value in use is assessed using the present value of the expected future cash flows. Any excess of the carrying amount over the recoverable amount is recorded as impairment. Impairment charges, which are not tax affected, are recognized in in profit or loss and are not reversed.

(k) Impairment of long-lived assets

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by comparison of their carrying amount to the recoverable amount. The recoverable amount is the higher of the fair value less selling costs or the value in use. Value in use is determined by the present value of the future cash flows from the asset. If the recoverable amount is less than the carrying amount, then there is impairment. Where an impairment loss exists, the portion of the carrying amount exceeding the recoverable amount is recorded as an expense immediately. Assets that have been impaired in prior periods are tested for possible reversal of impairment whenever events or changes in circumstance indicate that the impairment has reversed. If the impairment has reversed, the carrying amount of the asset is increased to its recoverable amount but not beyond the carrying amount that would have been determined had no impairment loss been recognized for the asset in prior periods. The reversal is recognized in profit or loss immediately.

(l) Customer deposits

Customer deposits are collections and credits from customers that can be redeemed for services offered by the Company.

NAMESILO TECHNOLOGIES CORP. Notes to the Consolidated Financial Statements For the years ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

(m) Deferred revenue

Deferred revenue primarily relates to the unearned portion of revenues received in advance related to the unexpired term of registration fees from domain name registrations.

(n) Share capital

Financial instruments issued by the Company are classified as equity only to the extent that they do not meet the definition of a financial liability or financial asset. The Company’s common shares, share warrants and options are classified as equity instruments.

Incremental costs directly attributable to the issue of new shares or options are recognized as a deduction from equity.

Valuation of equity units issued in private placements

The Company has adopted a residual value method with respect to the measurement of shares and warrants issued as private placement units. The residual value method first allocates value to the more easily measurable component based on fair value and then the residual value, if any, to the less easily measurable component.

The fair value of the common shares issued in the private placements was determined to be the more easily measurable component and were valued at their fair value, as determined by the closing quoted bid price on the announcement date. The balance, if any, was allocated to the attached warrants. Any fair value attributed to the warrants is recorded in contributed surplus.

(o) Revenue recognition

Revenue is recorded when persuasive evidence of an arrangement exists, delivery of the product or service has occurred, the selling price is fixed or determinable and collectability is reasonably assured. Control of the promised product or service is transferred to customers in an amount reflecting consideration we expect to be entitled to for such purchases.

The Company’s revenues are derived from domain name registration fees and the sales of domain names. Amounts received in advance of meeting the revenue recognition criteria described below are recorded as deferred revenue. We have determined that our contracts do not include a significant financing component.

Domain services

The Company earns registration fees in connection with each new, renewed and transferredin registration. Service has been provided in connection with registration fees once the Company has confirmed that the requested domain name has been appropriately recorded in the registry under contractual performance standards.

Domain names are generally purchased for terms of one to ten years. Registration fees charged for domain name registration and provisioning services are recognized on a straightline basis over the life of the contracted term.

For arrangements with multiple deliverables, the Company allocates revenue to each deliverable if the delivered item(s) has value to the customer on a standalone basis and, if the arrangement includes a general right of return relative to the delivered item, delivery or performance of the undelivered item(s) is considered probable and substantially in the control

NAMESILO TECHNOLOGIES CORP. Notes to the Consolidated Financial Statements For the years ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

of the Company. The fair value of the selling price for a deliverable is determined using a hierarchy of (1) Company specific objective and reliable evidence, then (2) third-party evidence, then (3) best estimate of selling price. The Company allocates any arrangement fee to each of the elements based on their relative selling prices.

Commissions

If the Company acts in the capacity of an agent rather than as the principal in a transaction, then the revenue recognized is the net amount of commission made by the Company.

(p) Share-based payments

Where equity-settled share options are awarded to employees, the fair value of the options at the date of grant is charged to profit or loss over the vesting period. Performance vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each reporting date so that, ultimately, the cumulative amount recognized over the vesting period is based on the number of options that eventually vest. Non-vesting conditions and market vesting conditions are factored into the fair value of the options granted. As long as all other vesting conditions are satisfied, a charge is made irrespective of whether these vesting conditions are satisfied. The cumulative expense is not adjusted for failure to achieve a market vesting condition or where a non-vesting condition is not satisfied.

Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to profit or loss over the remaining vesting period.

Where equity instruments are granted to non-employees, they are recorded at the fair value of the goods or services received in profit or loss, unless they are related to the issuance of shares. Amounts related to the issuance of shares are recorded as a reduction of share capital.

When the value of goods or services received in exchange for the share-based payment cannot be reliably estimated, the fair value is measured by use of a valuation model. The expected life used in the model is adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions, and behavioral considerations.

All equity-settled share-based payments are reflected in contributed surplus, until exercised. Upon exercise, shares are issued from treasury and the amount reflected in contributed surplus is credited to share capital, adjusted for any consideration paid. The amount remains in contributed surplus if the options expire unexercised.

Where a grant of options is cancelled or settled during the vesting period, excluding forfeitures when vesting conditions are not satisfied, the Company immediately accounts for the cancellation as an acceleration of vesting and recognizes the amount that otherwise would have been recognized for services received over the remainder of the vesting period. Any payment made to the employee on the cancellation is accounted for as the repurchase of an equity interest except to the extent the payment exceeds the fair value of the equity instrument granted, measured at the repurchase date. Any such excess is recognized as an expense.

NAMESILO TECHNOLOGIES CORP. Notes to the Consolidated Financial Statements For the years ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

(q) Leases

At inception of a contract, the Company assesses whether the contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

Leases of right-of-use assets are recognized at the lease commencement date at the present value of the lease payments that are not paid at that date. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined, and otherwise at the Company’s incremental borrowing rate. At the commencement date, a right-of-use asset is measured at cost, which is comprised of the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any decommissioning and restoration costs, less any lease incentives received.

Each lease payment is allocated between repayment of the lease principal and interest. Interest on the lease liability in each period during the lease term is allocated to produce a constant periodic rate of interest on the remaining balance of the lease liability. Except where the costs are included in the carrying amount of another asset, the Company recognizes in profit or loss (a) the interest on a lease liability and (b) variable lease payments not included in the measurement of a lease liability in the period in which the event or condition that triggers those payments occurs. The Company subsequently measures a right-of-use asset at cost less any accumulated depreciation and any accumulated impairment losses; and adjusted for any remeasurement of the lease liability. Right-of-use assets are depreciated over the shorter of the asset’s useful life and the lease term, except where the lease contains a bargain purchase option a right-of-use asset is depreciated over the asset’s useful life.

(r) Income tax

Income tax expense comprises current and deferred tax. Income tax expense is recognized in profit or loss except to the extent that if the income tax expense related to items recognized directly in equity, the income tax expense would also be recognized in equity. Current tax is the expected tax payable on the taxable income for the period, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred tax is recognized using the liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.

A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

NAMESILO TECHNOLOGIES CORP. Notes to the Consolidated Financial Statements For the years ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

(s) Earnings (loss) per share

Basic earnings (loss) per share is calculated by dividing the profit or loss attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per common share is computed by dividing the net income or loss applicable to common shares by the sum of the weighted average number of common shares issued and outstanding and all additional common shares that would have been outstanding, if potentially dilutive instruments were converted.

4. ACQUISITION OF NAMESILO LLC

On August 1, 2018, the Company completed the acquisition of NameSilo LLC, whereby the Company has acquired all of the issued and outstanding securities of NameSilo LLC on terms as follows:

USD$9,511,500 (CAD$12,422,300) was paid in cash on closing; and
An earn-out payment of USD$2,499,047 was satisfied by USD$2,360,743 (CAD$3,072,978) in cash and 529,499 common shares of the Company.

The transaction was accounted for as a business combination, as the operations of NameSilo LLC meet the definition of a business. As the transaction was accounted for as a business combination, transaction costs of $39,089 were expensed. The goodwill resulting from the allocation of the purchase price to the total fair value of net assets represented the sales and growth potential of NameSilo LLC and is allocated in its entirety to NameSilo LLC. The Company has allocated the purchase price as follows:

	$
Cash	15,495,278
529,499 common shares of the Company	180,030
Fair value of consideration	15,675,308
Cash	274,443
Digital currency	129,376
Registry deposits	2,753,158
Prepaid domain name registry fees	12,985,026
Brand	860,424
Customer relationships (not deductible for tax purposes)	8,585,984
Goodwill (not deductible for tax purposes)	8,273,678
Accounts payable and accrued liabilities	(344,283)
Customer deposits	(819,628)
Deferred revenue	(14,899,797)
Deferred income tax liability	(2,123,073)
	15,675,308

The fair value of the 529,499 common shares issued ($180,030) was determined based on the fair value of the Company’s shares immediately prior to the completion of the acquisition.

In August 2018, the Company entered into a share purchase agreement with 1161217 B.C. Ltd. (the “Digital Service Company”) and the shareholders of the Digital Service Company. In consideration of the Digital Service Company, the Company has transferred 18.5% of the member interest of NameSilo LLC to the shareholders of the Digital Service Company. The value of the

NAMESILO TECHNOLOGIES CORP. Notes to the Consolidated Financial Statements For the years ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

18.5% of the member interest of NameSilo LLC was determined to be $2,899,932 and is accounted for as a non-controlling interest.

5. ACQUISITION OF NAMEPAL.COM LLC

On January 3, 2019, the Company acquired NamePal pursuant to the terms of a share purchase agreement ("Purchase Agreement") among NameSilo LLC, Kristaps Ronka ("Ronka"), a director of the Company, and Market Plaza International LLC (the "Vendor"). NamePal is an ICANN domain name registrar and provider of domain registration, web hosting, email and SSL services.

Under the terms of the Purchase Agreement, NameSilo LLC acquired 100% of the membership interest in NamePal and, in consideration of which, Ronka has agreed to transfer up to a 1.75% interest in NameSilo LLC to the Vendor as follows: (i) 0.5% of the membership interest within six months of closing, (ii) 0.5% of the membership interest within twelve months of closing, and (iii) 0.75% of the membership interest within eighteen months of closing. NameSilo LLC has also agreed to retain the principals and existing staff of NamePal in order to integrate value added services and expand the NameSilo LLC offering.

The value of the 1.75% of the member interest of NameSilo LLC was determined to be $284,811 and is accounted for as a share based payment and charged to profit or loss over the vesting period of 18 months.

6. DIGITAL CURRENCY

The Company holds 2 bitcoins with a fair value of $73,179 (USD$57,477) as at December 31, 2020 (2019 – 83 bitcoins with a fair value of $782,625 (USD$602,575)).

The digital currency market is still a new market and is highly volatile; historical prices are not necessarily indicative of future value; a significant change in the market prices or lack of an active market for the digital currencies would have a significant impact on the Company’s other comprehensive income and financial position. The Company uses Blockchain.info as the exchange to transact in bitcoin and bitcoin cash.

NAMESILO TECHNOLOGIES CORP. Notes to the Consolidated Financial Statements For the years ended December 31, 2020 and 2019

(Expressed in Canadian Dollars)

7. INVESTMENTS December 31, 2020

==> picture [641 x 191] intentionally omitted <==

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

Lite Access Technologies Inc Pioneering Technologies Renoworks Software Inc. Allur Group Total Telcom Inc.
Number Amount Number Amount Number Amount Number Amount Number Amount
Balance, Dec 31 19 293,432 $ 99,767 921,300 $ 27,639 137,000 $ 37,675 523,332 $ 78,500 340,000 $ 39,100
Purchased - - - - - - - - - -
Converted - - - - - - - - - -
Share consolidation - - - - - - - - - -
Proceeds from sale (127,433) (74,124) (100,000) (12,840) (37,000) (9,000) - - (295,000) (33,638)
Gain (loss) - (3,233) - 46,799 - 31,325 - - - (62)
Balance, Dec 31 20 165,999 $ 22,410 821,300 $ 61,598 100,000 $ 60,000 523,332 $ 78,500 45,000 $ 5,400
ImmunoPrecise Antibodies
Vigil Health Solutions ImmunoPrecise Antibodies Ironwood Capital Atlas Engineered Products Ltd.
– Warrants
Number Amount Number Amount Number Amount Number Amount Number Amount Total
Balance, Dec 31 19 669,000 $ 224,115 2,550,000 $ 1,453,500 250,000 $ 1,047 200,000 $ 47,000 898,579 $ 359,431 $ 2,367,774
Purchased - - - - - - - - - - -
Converted - - 250,000 312,500 (250,000) - - - - - 312,500
Share consolidation (2,240,000) - - - - - - - -
Proceeds from sale (306,500) (86,335) - - - - - - (77,500) (28,755) (244,692)
Gain (loss) - (23,593) - 9,120,400 - (1,047) - 25,000 5,966 9,201,555
Balance, Dec 31 20 362,500 $ 114,187 560,000 $ 10,886,400 - $ (0) 200,000 $ 72,000 821,079 $ 336,642 $ 11,637,137
----- End of picture text -----

NAMESILO TECHNOLOGIES CORP. Notes to the Consolidated Financial Statements For the years ended December 31, 2020 and 2019

(Expressed in Canadian Dollars)

December 31, 2019

==> picture [690 x 308] intentionally omitted <==

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

Lite Access Technologies Inc. Pioneering Technologies Renoworks Software Inc. NAMSYS Inc. Allur Group Total Telcom Inc.
Number Amount Number Amount Number Amount Number Amount Number Amount Number Amount
Balance, Dec 31-18 294,099 $ 114,699 921,300 $ 73,704 137,000 $ 48,635 120,000 $ 66,000 523,332 $ - 340,000 $ 44,525
Purchased - - - - - - - - - - - -
Converted - - - - - - - - - - - -
Proceeds from sale (667) (283) - - - - (120,000) (92,960) - - - -
Expired Warrants - - - - - - - - - - - -
(Write-off) recovery - - - - - - - - - 78,500 - -
Gain (loss) - (14,649) - (46,065) - (10,960) - 26,960 - (0) - (5,425)
Balance, Dec 31 19 293,432 $ 99,767 921,300 $ 27,639 137,000 $ 37,675 - $ - 523,332 $ 78,500 340,000 $ 39,100
ImmunoPrecise Antibodies Gatekeeper Systems Inc. –
Vigil Health Solutions ImmunoPrecise Antibodies Ironwood Capital Riwi Corp
– Warrants Warrants
Number Amount Number Amount Number Amount Number Amount Number Amount Number Amount
Balance, Dec 31-18 750,000 $ 270,000 2,550,000 $ 1,810,500 250,000 $ 61,332 375,000 $ - 200,000 $ 60,000 - $ -
Purchased - - - - - - - - - - 19,000 47,510
Converted - - - - - - - - - - - -
Proceeds from sale (81,000) (32,260) - - - - - - - - (19,000) (57,785)
Expired Warrants - - - - - - (375,000) - - - . -
- - - - - - - - - - - -
(Write-off) recovery
Gain (loss) - (13,625) - (357,000) - (60,285) - - - (13,000) - 10,275
Balance, Dec 31 19 669,000 $ 224,115 2,550,000 $ 1,453,500 250,000 $ 1,047 - $ - 200,000 $ 47,000 - $ (0)
Atlas Engineered Products Ltd. Atlas Engineered Products
Number Amount Number Amount Total
Balance, Dec 31-18 998,579 $ 354,495 498,579 $ 19,073 $ 2,922,963
Purchased - - - - 47,510
Converted - - - - -
Proceeds from sale (100,000) (35,990) - - (219,278)
Expired warrants - - (498,579) - -
(Write-off) recovery - - - - 78,500
Gain (loss) - 40,926 - (19,073) (461,921)
Balance, Dec 31 19 898,579 $ 359,431 - $ - $ 2,367,774
----- End of picture text -----

NAMESILO TECHNOLOGIES CORP. Notes to the Consolidated Financial Statements For the years ended December 31, 2020 and 2019

(Expressed in Canadian Dollars)

8. EQUIPMENT

EQUIPMENT
	Furniture &
	Equipment
	$
Cost:
Balance, January 1, 2019	-
Additions	8,517
Balance, December 31, 2019 and 2020	8,517
Accumulated Amortization:
Balance, January 1, 2019	159
Amortization	1,703
Balance, December 31, 2019	1,862
Amortization	1,704
Balance, December 31, 2020	3,566
Net Book Value:
December 31, 2019	6,655
December 31, 2020	4,951

9. BRAND

The brand was acquired as a result of the acquisition of NameSilo LLC. The brand is amortized using the straight-line method over the useful life of 5 years. The changes in the value of the brand during the years ended December 31, 2020 and 2019 are as follows:

	$
Balance, December 31, 2018	826,244
Amortization	(175,416)
Foreign exchange	(35,896)
Balance, December 31, 2019	614,932
Amortization	(177,346)
Foreign exchange	(3,092)
Balance,December 31,2020	434,494

NAMESILO TECHNOLOGIES CORP. Notes to the Consolidated Financial Statements For the years ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

10. CUSTOMER RELATIONSHIPS

The customer relationships were acquired as a result of the acquisition of NameSilo LLC. The customer relationships are amortized using the straight-line method over the useful life of 7 years. The changes in the value of the customer relationships during the years ended December 31, 2020 and 2019 are as follows:

	$
Balance, December 31, 2018	8,020,143
Amortization	(2,272,706)
Foreign exchange	(336,359)
Balance, December 31, 2019	5,411,078
Amortization	(1,087,365)
Foreign exchange	(51,293)
Balance,December 31,2020	4,272,420

During the year ended December 31, 2020, the portion of the customer relationships with a useful life of 18 months has been fully amortized.

11. GOODWILL

The goodwill was acquired as a result of the acquisition of NameSilo LLC. The changes in the value of the goodwill during the years ended December 31, 2020 and 2019 are as follows:

	$
Balance, December 31, 2018	8,670,931
Adjustment	(342,340)
Foreign exchange	(408,436)
Balance, December 31, 2019	7,920,155
Foreign exchange	(156,110)
Balance,December 31,2020	7,764,045

An adjustment was recorded during the year ended December 31, 2019 to decrease the amount of goodwill as part of the finalization of the purchase price allocation resulting from the acquisition of NameSilo LLC.

The Company performs a goodwill impairment test annually and when circumstances indicate that the carrying value may not be recoverable. The recoverable amount of the CGU was based on value in use, determined by discounting the future cash flows to be generated from the continuing use of the CGU. The cash flows were projected over a five-year period based on past experience and actual operating results. The Company performed its annual goodwill impairment test in April 2021 and no impairment was indicated for the period tested. The values assigned to the key assumptions represented management’s assessment of future trends in the industry and were based on historical data from both internal and external sources. The key assumptions applied in the impairment test include a weighted average cost of capital of 15%, average revenue growth rate of 8% per year and terminal value growth rate of 5%.

NAMESILO TECHNOLOGIES CORP. Notes to the Consolidated Financial Statements For the years ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

12. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

The Company is subject to indirect taxation in some, but not all, of the various states and foreign jurisdictions in which the Company conducts business. Laws and regulations attempting to subject communications and commerce conducted over the internet to various indirect taxes are becoming more prevalent, both in Canada and internationally, and may impose additional burdens on the Company in the future. Taxing authorities may impose indirect taxes on the internet-related revenue generated by the Company based on regulations currently being applied to similar, but not directly comparable, industries. There are many transactions and calculations where the ultimate indirect tax determination is uncertain. In addition, Canadian and international indirect taxation laws are complex and subject to change. The Company may be audited in the future, which could result in changes to the indirect tax estimates.

As at December 31, 2020, an accrual for estimated indirect tax liabilities of $813,920 (2019 – $575,258) has been included in accounts payable and accrued liabilities. This accrual reflects management’s best estimate of the probable liability based on an analysis of the Company’s business activities, revenues subject to indirect taxes and applicable regulations. Although the Company believes its indirect tax estimates and associated liabilities are reasonable, the final determination of indirect tax audits or settlements could be materially different than the amounts established for indirect tax contingencies.

13. DEFERRED REVENUE

Deferred revenue consists of the following as at December 31, 2020 and 2019:

	December 31,	December 31,
	2020	2019
	$	$
Current	16,305,711	15,129,639
Non-current	1,550,811	1,383,953
	17,856,522	16,513,592

The increase in the deferred revenue balance is primarily driven by payments received in advance of satisfying our performance obligations, affected by $31,050,980 of revenue recognized during the year ended December 31, 2020. The changes in the value of deferred revenue during the years ended December 31, 2020 and 2019 are as follows:

	$
Balance, December 31, 2018	14,401,622
Additions	29,278,183
Transferred to revenue	(27,166,213)
Balance, December 31, 2019	16,513,592
Additions	32,393,910
Transferred to revenue	(31,050,980)
Balance,December 31,2020	17,856,522

NAMESILO TECHNOLOGIES CORP. Notes to the Consolidated Financial Statements For the years ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

14. LOANS PAYABLE

On May 1, 2018, the Company received a bridge loan financing in the principal amount of $5,000,000. The loan bore interest at a rate of 8% per annum and was due on November 1, 2018. On June 21, 2018, the Company entered into an amended loan agreement which extended the maturity date to June 21, 2019.

On June 21, 2018, the Company received another bridge loan financing in the principal amount of $6,347,916 (USD$4,770,000). The loans bore interest at a rate of 8% per annum and were due on June 21, 2019.

As an incentive for the lenders entering into the loan agreements, the Company issued as a bonus a total of 3,750,000 common shares to the lenders. The fair value of the common shares issued ($1,312,500) was recorded as transaction costs against the value of the loans payable and amortized over the term of the loans.

On June 17, 2019, the Company entered into amended loan agreements to restructure the loans. As a result of the restructuring, the Company repaid $1,293,978 of the principal and the maturity date of the loans was extended to December 17, 2020. The Company was then indebted to the lenders in the principal amount of $4,430,000, USD$2,115,000, and USD$2,115,000 respectively. Each loan bears interest at a rate of 11% per annum which is payable quarterly. The Company was required to pay 25% of each loan by July 17, 2020 and the balance by December 17, 2020. The loans remain unsecured and are pre-payable at any time without penalties.

On July 17, 2020, the Company entered into the First Extension and Amendments to Loan Agreements to further amend the loans. As a result of the amendments, the Company paid total extension fee of $50,000, repaid $650,000 of the principal plus interest, and the first payment date of July 17, 2020 was first extended to September 17, 2020 and later extended to September 23, 2020 pursuant to the Second Extension and Amendments to Loan Agreements. The Company has also granted to the lenders a first-ranking security interest over all of the present and after-acquired assets of the Company. The security interest provided to the lenders will cease once the Company has fully paid the loans.

On December 17, 2020, the Company entered into the Third Extension and Agreements to Loan Agreements, which extended the maturity date of the loan to February 15, 2021. The maturity date was extended again to March 1, 2021 pursuant to the Fourth Extension Letter signed on February 15, 2021. On April 6, 2021, the Company entered into the Fifth Extension and Agreements to Loan Agreements, which further extended the maturity date to June 10, 2021.

	$
Balance, December 31, 2018	11,429,977
Repayment	(2,776,554)
Amortization of transaction costs	618,493
Interest expense	1,031,411
Foreign exchange	(308,951)
Balance, December 31, 2019	9,994,376
Repayment	(5,196,226)
Interest expense	1,001,332
Foreign exchange	(5,664)
Balance,December 31,2020	5,793,818

NAMESILO TECHNOLOGIES CORP. Notes to the Consolidated Financial Statements For the years ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

15. CONVERTIBLE DEBENTURE

On May 2, 2018, the Company issued a convertible debenture in the principal amount of $300,000. The debentures were secured on the assets of the Company, bore interest at a rate of 10% per annum, payable semi-annually and due eighteen months after closing. The debenture was convertible into common shares of the Company at a price of $0.50 per share. Further, the holder received a total of 300,000 detachable share purchase warrants. The warrants were exercisable at a price of $0.65 per share for a period of eighteen months from the date of issue.

For accounting purposes, the convertible debenture was separated into liability and equity components. The fair value of the liability component was calculated as the discounted cash flows for the convertible debenture assuming a 15% effective interest rate which was the estimated rate for convertible debentures without a conversion feature. The fair value of the equity component (conversion feature) was determined as the difference between the face value of the convertible debenture and the fair value of the liability component.

The fair value of the share purchase warrants was estimated to be $30,399 based on the BlackScholes option pricing model. The following assumptions were used for the fair value determination of the warrants: dividend yield of 0%, expected volatility of 100.8%, a risk- free interest rate of 0.73% and an expected life of 1.5 years. The fair value of the share purchase warrants was allocated between the liability and equity components of the convertible debenture on a pro rata basis.

During the year ended December 31, 2020, the Company recorded interest expense of $15,403 (2019 - $25,068) on the convertible debenture.

On September 30, 2020, the remaining convertible debenture balance of $170,000 plus accrued interest of $60,526 was settled with 1,152,630 units of the Company at a price of $0.20 per unit. Each unit consists of one common share and one-half of one share purchase warrant. Each share purchase warrant will entitle the holder to purchase one additional share of the Company at a price of $0.30 per share for a period of two years from the date of issue.

The changes in the value of the convertible debenture during the years ended December 31, 2020 and 2019 are as follows:

	Liability	Equity
	Component	Component
	($)	($)
Balance, December 31, 2018	273,296	15,808
Accretion	26,704	-
Repayment	(130,000)	-
Balance, December 31, 2019	170,000	15,808
Settlement	(170,000)	(15,808)
Balance,December 31,2020	-	-

16. SHARE CAPITAL

(a) Authorized

Unlimited number of common shares without par value. Unlimited number of preferred shares without par value.

NAMESILO TECHNOLOGIES CORP. Notes to the Consolidated Financial Statements For the years ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

(b) Issued

During the year ended December 31, 2019, 1,323,833 warrants were exercised at a price of $0.25 for gross proceeds of $330,958 and 2,489,287 warrants were exercised at a price of $0.30 for gross proceeds of $746,786.

On September 25, 2020, the Company closed the first tranche of a non-brokered private placement financing by issuing 9,630,000 units at a price of $0.20 per unit for total proceeds of $1,926,000. On September 28, 2020, the Company closed the second tranche of the private placement by issuing 9,591,000 units at a price of $0.20 per unit for total proceeds of $1,918,200. On October 6, 2020, the Company closed the third and final tranche of the private placement by issuing 9,530,000 units at a price of $0.20 per unit for total proceeds of $1,906,000. Each unit consists of one common share and one-half of one share purchase warrant (each whole warrant a “Warrant”). Each whole Warrant will entitle the holder to purchase one additional share of the Company at a price of $0.30 per share for a period of two years from the date of issue. The Company paid finder’s fee of $281,427, incurred issue costs of $23,972, and issued a total of 945,660 finders warrants. Each finder’s warrant will entitle the holder to purchase one additional common share at a price of $0.30 per share for a period of two years from the date of issue.

The fair value of the finders warrants was determined to be $76,438 and estimated on the date of issue using the Black-Scholes option valuation model with the following weighted average assumptions: dividend yield of $nil, risk free interest rate of 0.23%, expected life of 2 years and expected volatility of 67%.

On October 8, 2020, the Company entered into debt settlement agreements with certain creditors of the Company, including two directors and officers of the Company. Pursuant to these agreements, the Company has issued 1,572,630 units, on the same terms as the units of the private placement, to settle $314,526 of outstanding debt.

(c) Stock options

The Company has a stock option plan in accordance with the policies on the Canadian Securities Exchange whereby, from time to time at the discretion of the Board of Directors, stock options are granted to directors, officers and certain consultants.

Under the plan up to 10% of the total number of issued common shares of the Company, calculated on a non-diluted basis, at the time an option is granted are available for the issuance of stock options. The exercise price of each option is based on the market price of the Company’s common stock at the date of the grant less an applicable discount. The options can be granted for a maximum term of 10 years. The maximum number of options that may be granted to any one person must not exceed 5% of the common shares issued and outstanding at the time of grant unless disinterested shareholder approval is obtained. Any options granted to consultants or persons performing Investor Relations under the Amended Stock Option Plan shall vest to the optionee as follows: 25% at date of grant, 25% six months from date of grant, 25% nine months from date of grant and the remaining 25% twelve months from the date of grant. All other options granted under the Amended Stock Option Plan shall have vesting terms set at the discretion of the Board of Directors.

A summary of the stock option activity is as follows:

NAMESILO TECHNOLOGIES CORP. Notes to the Consolidated Financial Statements For the years ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

	December 31, 2020 Number Weighted Average Exercise Price	December31,2019
		Number Weighted Average Exercise Price
Balance, beginning of year Granted Expired Balance,end ofyear	3,475,000 $0.30 - - - - 3,475,000 $0.30	3,100,000 $0.27 675,000 $0.44 (300,000) $0.30
		3,475,000 $0.30

As at December 31, 2020, the Company has outstanding directors’ and employees’ incentive stock options enabling the holders to acquire additional common shares as follows:

Number of options	Number of options
outstanding	exercisable	Exercise Price	Expiry Date
100,000(1)	100,000	$0.45	April 5, 2021
500,000	500,000	$0.10	August 4, 2021
1,000,000	1,000,000	$0.23	December 20, 2022
1,300,000	1,300,000	$0.35	August 8, 2023
250,000	250,000	$0.45	March 22, 2024
325,000	216,666	$0.42	September 16,2024
3,475,000	3,366,666		2.21years remaining

(1) These options expired unexercised subsequent to December 31, 2020.

On March 22, 2019, the Company granted 250,000 stock options to a director. The options are exercisable at a price of $0.45 per share for a period of five years from the date of grant.

On April 5, 2019, the Company granted 100,000 stock options to a consultant. The options are exercisable at a price of $0.45 per share for a period of two years from the date of grant.

On September 16, 2019, the Company granted 325,000 stock options to employees. The options are exercisable at a price of $0.42 per share for a period of five years from the date of grant.

The fair value of stock options was estimated using the Black-Scholes option-pricing model with the following weighted average assumptions: Dividend yield 0%; expected annual volatility 100%; risk-free interest rate 1.89%; market share price of $0.40; forfeiture rate of 0% and expected life of 2.85 years. Expected volatility was based on the historical share price volatility over the past 5 years. The expected life of the option was calculated based on the history of option exercises.

For the year ended December 31, 2020, $49,318 (2019 - $107,462) has been recorded as share-based payment relating to options granted during the year.

NAMESILO TECHNOLOGIES CORP. Notes to the Consolidated Financial Statements For the years ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

(d) Warrants

	December 31, 2020	December 31,2019
	Number Weighted Average Exercise Price	Number Weighted Average Exercise Price
Balance, beginning of year Issued Exercised Expired Balance,end ofyear	- $- 16,107,475 0.30 - - - - 16,107,475 $0.30	4,113,120 $0.31 (3,813,120) (0.28) (300,000) (0.65)
		- $-

As at December 31, 2020, the Company has outstanding share purchase warrants enabling the holders to acquire additional common shares as follows:

Number of warrants
outstanding	ExercisePrice	ExpiryDate
5,272,560	$0.30	September 25, 2022
5,202,960	$0.30	September 28, 2022
5,631,955	$0.30	October 6,2022
16,107,475		1.75years remaining

17. DISTRIBUTIONS FROM NAMESILO LLC

In June and December 2019, NameSilo LLC made cash distributions to all its members. The total amount of distributions made to the 18.5% non-controlling interest were $416,545 (US$254,064) during the year ended December 31, 2019.

In March and July 2020, NameSilo LLC made cash distributions to all its members. The total amount of distributions made to the 18.5% non-controlling interest were $230,002 (US$171,451) during the year ended December 31, 2020.

18. RELATED PARTY TRANSACTIONS

The aggregate amount of expenditures made to parties not at arm’s length to the Company for the years ended December 31, 2020 and 2019 are:

	2020	2019
	$	$
Professional fees	108,859	103,053
Management fees	144,000	144,000
Share-based payment	-	57,357
	252,859	304,410

During the year ended December 31, 2020, Paul Andreola, President and Director was paid or accrued management fees of $72,000 (2019 - $72,000), Colin Bowkett, Director was paid or accrued management fees of $72,000 (2019 - $72,000), Daniel Nanson, Director was paid or

NAMESILO TECHNOLOGIES CORP. Notes to the Consolidated Financial Statements For the years ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

accrued professional fees of $37,800 (2019 - $28,350), and Malaspina Consultants Inc., a company in which Natasha Tsai, Chief Financial Officer is a shareholder, was paid or accrued professional fees of $71,059 (2019 - $74,703).

Included in accounts payable and accrued liabilities at December 31, 2020 is $21,018 (2019 - $6,033) due to officers and directors for unpaid management fees.

These transactions are in the normal course of operations and are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties, unless otherwise noted.

There were no post-employment benefits, termination benefits or other long-term benefits paid to key management personnel for the years ended December 31, 2020 and 2019.

19. DETERMINATION OF FAIR VALUES

The Company’s financial assets were classified into the following categories:

■ FVTPL – Cash and cash equivalents, investments and convertible debenture ■ FVOCI – None ■ Amortized Cost – Receivables

Estimates of the fair value of financial instruments are made at a specific point in time, based on relevant information about financial markets and specific financial instruments. As these estimates are subjective in nature, involving uncertainties and matters of significant judgement, they cannot be determined with precision. Changes in assumptions can significantly affect estimated fair values.

At December 31, 2020, the Company's financial instruments include cash and cash equivalents, receivables, investments, accounts payable and accrued liabilities, convertible debenture and loans payable. Receivables, accounts payable and accrued liabilities, convertible debenture and loans payable are recognized on the consolidated statement of financial position at their carrying values which approximated their fair value due to their short-term nature.

All financial instruments measured at fair value are categorized into a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are described below:

Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 – inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and Level 3 – inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The following table sets forth the Company’s financial assets measured at fair value by level within the fair value hierarchy.

NAMESILO TECHNOLOGIES CORP. Notes to the Consolidated Financial Statements For the years ended December 31, 2020 and 2019

(Expressed in Canadian Dollars)

December 31, 2020	Level 1	Level 2	Level 3		Total
Assets:
Cash and cash equivalents	$ 2,401,601	$ -	$ -	$ 2,401,601
Investment - shares	$ 11,637,137	$ -	$ -	$ 11,637,137
Investment - warrants	$ -	$ -	$ -		$ -

December 31, 2019	Level 1	Level 2	Level 3		Total
Assets:
Cash and cash equivalents	$ 1,046,712	$ - $ -			$ 1,046,712
Investment - shares	$ 2,366,727	$ - $ -			$ 2,366,727
Investment - warrants	$ -	$ - $ 1,047			$ 1,047

20. FINANCIAL RISK MANAGEMENT

(a) Overview

The Company’s activities expose it to a variety of financial risks that arise as a result of its activities such as:

market risk
credit risk
liquidity risk

This note presents information about the Company’s exposure to each of the above risks, the Company’s objectives, policies and processes for measuring and managing risk.

The Board of Directors oversees management’s establishment and execution of the Company’s risk management framework. Management has implemented and monitors compliance with risk management policies. The Company’s risk management policies are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to market conditions and the Company’s activities.

(b) Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, foreign currency risk and other price risk.

(i) Interest rate risk

The Company’s cash is held in bank accounts and due to the short-term nature of these financial instruments fluctuations in market interest rates do not have significant impact on the fair value as at December 31, 2020.

NAMESILO TECHNOLOGIES CORP. Notes to the Consolidated Financial Statements For the years ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

The Company’s sensitivity to interest rates is currently immaterial due to the short term maturity of its monetary assets and liabilities.

(ii) Foreign currency risk

Currency risk is the risk to the Company's earnings that arises from fluctuations of foreign exchange rates and the degree of volatility of these rates. The Company does not use derivative instruments to reduce its exposure to foreign currency risk. At December 31, 2020, the Group had the following financial assets and liabilities in foreign currencies:

in foreign currencies:
Cash Receivables Accounts payable Loans payable	US Dollars Argentine Pesos
	$1,535,515 - $ 120,055 225,528 $1,426,974 445,323 $2,496,933 -

At December 31, 2020 US dollar amounts were converted at a rate of $1.00 US dollars to $1.2732 Canadian dollars and Argentine pesos amounts were converted at a rate of 1.00 Argentine pesos to $0.0219 Canadian dollars.

(iii) Other price risk

Other price risk is the risk that the fair or future cash flows of a financial instrument will fluctuate because of changes in market prices, other than those arising from interest rate risk. The Company is exposed to significant other price risk. A 10% increase or decrease in the value of its investments will impact net income (loss) by approximately $1,164,000.

(c) Credit risk

Credit risk is the risk that one party to a financial instrument will cause a loss for the other party by failing to discharge an obligation. The Company’s cash and cash equivalents and accounts receivable are exposed to credit risk. The credit risk on cash and cash equivalents is considered small because the majority of funds have been placed with major Canadian and Argentinean financial institutions. Management believes that the credit risk related to its receivables is remote. The carrying value of the receivables represents the maximum credit exposure.

(d) Liquidity risk

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. The Company’s approach to managing liquidity risk is to ensure, as far as possible, that it will have sufficient liquidity to meet liabilities when due.

At December 31, 2020, the Company had a cash balance of $2,401,601 and receivables of $228,412. The Company has accounts payable and accrued liabilities of $2,105,356. The Company intends to raise adequate funds to meet its liquidity needs for the next twelve months via cash flows from operations, private placement or the sale of over-performing investments.

Contractual cash flow requirements as at December 31, 2020 were as follows:

NAMESILO TECHNOLOGIES CORP. Notes to the Consolidated Financial Statements For the years ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

	< 1	1 – 2	2 – 5	>5
	year	years	years	years	Total
	$	$	$	$	$
Accounts payable and
accrued liabilities	2,105,356	-	-	-	2,105,356
Loans payable	5,793,818	-	-	-	5,793,818
Total	7,899,174	-	-	-	7,899,174

21. CAPITAL MANAGEMENT

The Company considers its capital structure to include working capital (deficiency) and shareholders’ equity. Management’s objective is to ensure that there is sufficient capital to minimize liquidity risk and to continue as a going concern. Management reviews its capital management approach on an ongoing basis and believes that its approach, given the relative size of the Company is reasonable.

The Company is not subject to any external capital restrictions and the Company did not change its approach to capital management during the year.

22. SUPPLEMENTAL CASH FLOW INFORMATION

The following changes in liabilities arose from financing activities:

					Foreign
	December	Cash	Conversion	Accretion	exchange	December
	31, 2019	Flows	to Equity		movements	31, 2020
	$	$	$	$	$	$
Loans
payable	9,994,376	(5,196,226)	-	1,001,332	(5,664)	5,793,818
Convertible
debenture	170,000	-	(170,000)	-	-	-
Total	10,164,376	(5,196,226)	(170,000)	1,001,332	(5,664)	5,793,818

NAMESILO TECHNOLOGIES CORP. Notes to the Consolidated Financial Statements For the years ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

23. INCOME TAXES

Income tax expense varies from the amount that would be computed from applying the combined federal and provincial income tax rate to loss before taxes as follows:

		2020		2019
Income (loss) for the year before income tax	$	7,015,922	$	(4,040,758)
StatutoryCanadian corporate tax rate		27.00%		27.00%
Anticipated tax expense (recovery)		1,894,299		(1,091,004)
Change in tax rates resulting from:
Effect of jurisdictional tax rate difference		36,562		719,751
Dissolution of subsidiaries		-		1,536,217
Non capital loss expired		1,800		22,529
Intercorporate dividends		50,673		353,894
Unrecognized items for tax		(732,379)		147,025
Tax benefits not realized(realized)		(714,643)		(1,676,676)
Income tax expense(recovery)	$	536,312	$	11,736

The significant components of the Company’s deferred tax assets (liabilities) are as follows:

		2020		2019
Exploration and evaluation assets	$	670,517	$	670,517
Convertible note and loans		(39,216)		(37,686)
Non-capital loss carry forwards		2,199,086		1,171,028
Capital Assets		65,801		64,094
Capital loss carry forwards		2,453,725		2,450,796
Investments		(1,166,984)		82,893
Intangibles		(1,247,332)		(1,476,225)
Other		225,600		247,217
		3,161,197		3,172,634
Unrecognized deferred tax assets		(4,408,530)		(4,648,859)
Deferred income tax liabilities	$	(1,247,333)	$	(1,476,225)

NAMESILO TECHNOLOGIES CORP. Notes to the Consolidated Financial Statements For the years ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

At December 31, 2020, the Company has available non-capital tax losses for Canadian income tax purposes of approximately $6,625,000, expiring as follows:

2028 2029 2030 2031 2032 2033 2034 2035 2037 2038 2039 2040	Canada
	$ 20,000 260,000 166,000 325,000 365,000 270,000 306,000 268,000 227,000 1,318,000 780,000 2,320,000 $ 6,625,000

AI assistant

NameSilo Technologies Corp. — Annual Report 2020

44517_rns_2021-04-30_0dc029cc-e1a0-42ea-bb5f-03300cc05e18.pdf

NAMESILO TECHNOLOGIES CORP.

Consolidated Financial Statements

For the Years Ended December 31, 2020 and 2019

Index

Independent Auditor's Report

Consolidated Financial Statements

Crowe MacKay LLP

Independent Auditor's Report

Opinion

Basis for Opinion

Material Uncertainty Related to Going Concern

Other Information

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Auditor's Responsibilities for the Audit of the Consolidated Financial Statements

"Crowe MacKay LLP"

NAMESILO TECHNOLOGIES CORP. Consolidated Statements of Financial Position

Approved on behalf of the Board

NAMESILO TECHNOLOGIES CORP.

Consolidated Statements of Comprehensive Income (Loss) For the years ended December 31, 2020 and 2019

NAMESILO TECHNOLOGIES CORP. Consolidated Statements of Changes in Equity

NAMESILO TECHNOLOGIES CORP. Consolidated Statements of Cash Flows

1. NATURE OF OPERATIONS AND GOING CONCERN

2. BASIS OF PREPARATION

(a) Statement of compliance

(b) Basis of consolidation

(c) Functional and presentation currency

(d) Basis of measurement

(e) Use of estimates and judgments

3. SIGNIFICANT ACCOUNTING POLICIES

(a) Business combination

(b) Financial instruments

Recognition and classification

Measurement

Financial assets and liabilities at FVTPL

Financial assets at FVTOCI

Financial assets and liabilities at amortized cost

Impairment of financial assets at amortized cost

Derecognition

Financial assets

Financial liabilities

(c) Cash and cash equivalents

(d) Registry deposits

(e) Prepaid domain name registry fees

(f) Digital currency

(g) Investments in associates

(h) Furniture and equipment

(i) Intangible assets

(j) Goodwill

(k) Impairment of long-lived assets

(l) Customer deposits

(m) Deferred revenue

(n) Share capital

Valuation of equity units issued in private placements

(o) Revenue recognition

Domain services

Commissions

(p) Share-based payments

(q) Leases

(r) Income tax

(s) Earnings (loss) per share

4. ACQUISITION OF NAMESILO LLC

NAMESILO TECHNOLOGIES CORP. Notes to the Consolidated Financial Statements For the years ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

5. ACQUISITION OF NAMEPAL.COM LLC

6. DIGITAL CURRENCY

NAMESILO TECHNOLOGIES CORP. Notes to the Consolidated Financial Statements For the years ended December 31, 2020 and 2019

7. INVESTMENTS December 31, 2020

NAMESILO TECHNOLOGIES CORP. Notes to the Consolidated Financial Statements For the years ended December 31, 2020 and 2019

December 31, 2019

NAMESILO TECHNOLOGIES CORP. Notes to the Consolidated Financial Statements For the years ended December 31, 2020 and 2019

8. EQUIPMENT

9. BRAND

NAMESILO TECHNOLOGIES CORP. Notes to the Consolidated Financial Statements For the years ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

10. CUSTOMER RELATIONSHIPS

11. GOODWILL

12. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

13. DEFERRED REVENUE

14. LOANS PAYABLE

NameSilo Technologies Corp. Annual Report 2020