Pathway Health Corp. — Management Reports 2021

Jul 29, 2021

Colson Capital Corp. (A Capital Pool Company) Management Discussion and Analysis For the Year Ended March 31, 2021

Colson Capital Corp. Management Discussion and Analysis For the Year Ended March 31, 2021

FORM 51-102F1

The following management’s discussion and analysis (“MD&A”) should be read in conjunction with the Company’s financial statements and notes thereto for the fiscal year ended March 31, 2021. Additional information relating to the Company is available on SEDAR at www.sedar.com.

This MD&A was prepared by management of Colson Capital Corp. (“the Company”), and was approved by the Board of Directors on July 28, 2021. All amounts are in Canadian dollars unless otherwise stated.

Forward-Looking Statements

Certain statements contained in this document constitute “forward-looking statements”. When used in this document, the words “may”, “would”, “could”, “will”, “intend”, “plan”, “propose”, “anticipate”, “believe”, used by any of the Company’s management, are intended to identify forward-looking statements. Such statements reflect the Company’s forecasts, estimates and expectations, as they relate to the Company’s current views based on their experience and expertise with respect to future events and are subject to certain risks, uncertainties and assumptions. Many factors could cause the Company’s actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. The Company does not intend, and does not assume any obligation, to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect future results, events or developments unless required by law.

Description of the Business

The Company was incorporated on September 4, 2014 by Certificate of Incorporation issued pursuant to the provisions of the Business Corporations Act (Alberta). The Company is classified as a Capital Pool Company as defined in Policy 2.4 of the TSX Venture Exchange (the “Exchange”) corporate finance manual. The Company has no assets other than cash. The Company proposes to identify and evaluate potential acquisitions or businesses, and once identified and evaluated, to negotiate an acquisition or participation subject to regulatory and, if required, shareholders’ approval.

The Company’s registered head office is located at 1900, 520 3[rd] Avenue S.W., Calgary, AB, T2P 0R3.

The Company initially issued 2,400,000 common shares for an amount of $120,000 and on June 14, 2017 the prospectus for an Initial Public Offering (“IPO”) of the Company’s common shares was receipted by the regulatory authorities. The IPO closed on September 7, 2017 and a total of 6,000,000 common shares were issued at a price of $0.10 per common share. The Company’s share commenced trading on September 11, 2017 under the symbol COLS.P.

The Company, as a CPC, was required to complete a Qualifying Transaction (as such term is defined in the policies of the TSXV) by September 7, 2019. The Company was not successful in completing a Qualifying Transaction by September 7, 2019. As a result, the Company moved its listing to the NEX board of the Exchange (“NEX”)

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Colson Capital Corp. Management Discussion and Analysis For the Year Ended March 31, 2021

Qualifying transaction and subsequent event

On January 29, 2021, the Company entered into a definitive share exchange agreement with Pathway Health Corp. (“Pathway”). Colson will purchase all of the issued and outstanding shares of Pathway in a 1:1 exchange for the issuance of post-consolidation Colson shares. Subject to certain conditions being met this would result in the reverse take-over of Colson by Pathway (the “RTO Transaction”) to form the resulting issuer (“Resulting Issuer”). The Resulting Issuer will continue the business of Pathway, subject to certain terms and conditions. The RTO Transaction constitutes a Qualifying Transaction pursuant to the policies of the TSX Venture Exchange.

Prior to closing the RTO Transaction, the Company consolidated the 8,400,000 common shares of Colson (“Colson Shares”) on the basis of 2.941:1, resulting in an aggregate of approximately 2,856,171 post consolidation Colson shares issued and outstanding and changed its name from “Colson Capital Corp. to “Pathway Health Corp.” Furthermore, 90,252,819 common shares of the Resulting Issuer were issued to former shareholders of Pathway (including 27,600,000 common shares issued as part of subscription receipts from a private placement). The RTO transaction was completed on May 31, 2021, with the Resulting Issuers shares commence trading on the TSXV under the symbol “PHC” on June 17, 2021.

Selected Financial Information

The Company was incorporated under the provisions of the Business Corporations Act (Alberta) on September 4, 2014 and March 31 is the date of its fiscal year end.

The following selected financial data is derived from the financial statements of the Company prepared within acceptable limits of materiality and are in accordance with International Financial Reporting Standards applicable to the preparation of interim financial statements, including IAS 34.

Selected Statement of Financial Position Data

Net working capital Total current assets Total current liabilities Total shareholders’ equity	As at March 31, 2021 2020 2019
	$ 276,458 $ 411,644 $ 450,205 $ 323,426 $ 423,557 $ 457,781 $ 46,968 $ 11,913 $ 7,576 $ 276,458 $ 411,644 $ 450,205

Selected Statement of Operations Data

Expenses Net loss for the period Basic loss per share	As at March 31, 2021 2020 2019
	$ 135,186 $ 38,561 $ 83,539 135,186 38,561 83,539 $ (0.07) $ (0.02) $ (0.04)

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Colson Capital Corp. Management Discussion and Analysis For the Year Ended March 31, 2021

Selected Quarterly Results

The following table highlights selected financial data for each of the eight most recent quarters, that in management’s opinion, have been prepared on a basis consistent with the annual financial statements for the year ended March 31, 2021.

Expenses Net loss for the period Basic loss per share	Three months ended
	March 31, 2021 December 31, 2020 September 30, 2020 June 30, 2020
	$ 87,009 $ 29,619 $ 16,983 $ 1,575 87,009 29,619 16,983 1,575 $ (0.04) $ (0.01) $ (0.01) $ (0.00)

Expenses Net loss for the period Basic loss per share	Three months ended
	March 31, 2020 December 31, 2019 September 30, 2019 June 30, 2019
	$ 17,898 $ 3,803 $ 12,486 $ 4,374 17,898 3,803 12,486 4,374 $ (0.01) $ (0.00) $ (0.01) $ (0.00)

The Company does not have any operations and will not conduct any business other than the identification and evaluation of business and assets for potential acquisition. The increase in expenses is mainly due to work related to the Qualifying Transaction described in the notes above.

Liquidity, Capital Resources, and Outlook

As at March 31, 2021, the Company had working capital of $276,458 and cash of $317,966. Management believes that it has sufficient resources to be able to identity, evaluate and complete a Qualifying Transaction.

Off-Balance Sheet Arrangements

There are no off-balance sheet arrangements as at March 31, 2021.

Critical Accounting Estimates and Policies

The Company’s significant accounting policies and the adoption of new accounting policies are disclosed in the audited financial statements for the year ended March 31, 2021.

Financial Instruments and Other Instruments

The Company’s financial instruments consist of cash and accounts payable and accrued liabilities. It is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments and that the fair value of these financial instruments approximates their carrying values, as applicable.

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Colson Capital Corp. Management Discussion and Analysis For the Year Ended March 31, 2021

Disclosure of Outstanding Share Data

As at the date of this MD&A, the following is a description of the outstanding equity securities and convertible securities previously issued by the Company:

	Authorized Outstanding
	Voting or equity securities issued and outstanding Unlimited Common Shares 2,856,171 Common Shares*
	Securities convertible or exercisable into voting or equity securities – stock options Directors’ and officers’ stock options to acquire up to 10% of the issued and outstanding common shares Directors’ and officers’ stock options to acquire up to 285,617 common shares at an exercise price of $0.29 per common share**
	Voting or equity securities issuable on conversion or exchange of outstanding securities as above as above
	* 816,049 shares are held in escrow (2,400,000 pre-consolidation) ** All outstanding options were subsequently cancelled after year end.

Risks and Uncertainties

The Company has a limited history of existence. There can be no assurance that a Qualifying Transaction will be completed. Equity or debt financing may be required to complete a Qualifying Transaction. There can be no assurance that the Company will be able to obtain adequate financing to continue. The securities of the Company should be considered a highly speculative investment. The following risk factors should be given special consideration when evaluating an investment in any of the Company's securities:

• a) until completion of a Qualifying Transaction, the Company is not permitted to carry on any business other than the identification and evaluation of potential Qualifying Transactions;

• b) the Company has had no business activity and has not acquired any material assets since its incorporation other than cash;

• c) the Company does not have a history of earnings, nor has it paid any dividends and will not generate earnings or pay dividends until at least after the completion of the Qualifying Transaction;

• d) the Company has only limited funds with which to identify and evaluate potential Qualifying Transactions and there can be no assurance that the Company will be able to identify a suitable Qualifying Transaction;

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Colson Capital Corp. Management Discussion and Analysis For the Year Ended March 31, 2021

• e) even if a proposed Qualifying Transaction is identified, there can be no assurance that the Company will be able to successfully complete the transaction;

• f) the Qualifying Transaction may be financed in all or part by the issuance of additional securities by the Company and this may result in further dilution to the investor, which dilution may be significant and which may also result in a change of control of the Company;

• g) there can be no assurance that an active and liquid market for the common shares will develop and an investor may find it difficult to resell its common shares;

• h) if the Company fails to complete a Qualifying Transaction within 24 months of listing, the TSX Venture Exchange could suspend or delist the common shares of the Company and an interim cease trade order may be issued against the Company’s securities by an applicable securities commission if its common shares are suspended from trading on or delisted from the TSX Venture Exchange or otherwise; and

• i) the Company competes with many Capital Pool Companies that are seeking suitable Qualifying Transactions. In addition, other Capital Pool Companies may have substantially greater financial and technical resources than the Company.

Related Party Transactions

Transactions with related parties are incurred in the normal course of business and are measured at the exchange amount, which is the amount of consideration established and approved by the related parties. There were no related party transactions during the year ending March 31, 2021.

Other Information

The policies of the TSX Venture Exchange prohibit Capital Pool Companies from carrying on formal investor relations activities. Corporate communications and investor inquiries are handled by the Directors of the Company. Additional information about the Company is available on SEDAR at www.sedar.com.

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