pluribus

TECHNOLOGIES

Pluribus Technologies Corp.

Management Discussion and Analysis

For the three and nine months ended September 30, 2024 and 2023

Pluribus Technologies Corp.
Management Discussion and Analysis
[in thousands of Canadian dollars]
For the three and nine months ended September 30, 2024 and 2023

General Information

The following Management Discussion and Analysis ("MD&A") has been prepared as of November 29, 2024 and all information contained herein is current as of that date unless otherwise indicated. For a complete understanding of our business environment, risks, trends and uncertainties and the effect of critical accounting policies and estimates on our results, this MD&A should be read in conjunction with Pluribus Technologies Corp. ("Pluribus") and its subsidiaries' (together "Pluribus", "we" "us" "our" or the "Company") fiscal 2023 audited consolidated financial statements and the notes thereto. This MD&A covers the consolidated results of operations, financial condition and cash flows of Pluribus and its subsidiaries, all wholly owned, for the three and nine months ended September 30, 2024.

Unless otherwise noted, the results reported herein have been prepared in accordance with International Financial Reporting Standards ("IFRS") and are presented in Canadian dollars, stated in thousands, except per share amounts and as otherwise indicated.

This document is intended to assist the reader in better understanding operations and key financial results as of the date of this report. The unaudited interim condensed consolidated financial statements and the MD&A have been reviewed by the Company's Audit Committee and approved by its board of directors (the "Board of Directors").

Cautionary Note Regarding Forward-Looking Statements

Certain information and statements within the MD&A may constitute "forward-looking statements" which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company and its subsidiaries, or the industry in which the Company operates, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. When used in this MD&A, the words "estimate", "believe", "anticipate", "intend", "expect", "plan", "may", "should", "will", the negative thereof or other variations thereon or comparable terminology are intended to identify forward-looking statements. Any statements that are contained in this MD&A that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking information in this press release includes, but is not limited to, statements with respect to the business plans of the Company, including the successful completion and pace of future acquisitions, the Company management's expectation on the growth, profitability and performance of its current and future acquisitions, the Company's ability to realize synergies of acquired businesses, the Company's ability to continue raise capital to acquire business-to-business software companies at reasonable prices, the Company's ability to meet its debt service obligations, the Company's ability to align costs to revenues, the Company's ability to divest core/non core assets as a source of capital, the Company's abilities to meet its working capital requirements for fiscal 2024 and the Company's ability to grow its portfolio companies into significant organizations. Forward-looking statements are based on certain assumptions, including the Company's ability to complete acquisitions on favorable terms; the Company's ability to manage a complex portfolio of companies effectively; the Company's ability to raise sufficient financing to continue its acquisition strategy; the Company's ability to maintain the performance of its current businesses. Other assumptions include industry trends, the availability of growth opportunities, and general business, economic, competitive, political, regulatory and social uncertainties that will not prevent the Company from conducting its business.

While the Company considers these assumptions to be reasonable based on information currently available, they are inherently subject to significant business, economic and competitive uncertainties and contingencies and they may prove to be incorrect. Such forward-looking statements reflect the current expectations of the management of the Company with respect to future events based on currently available information and are subject to risks and uncertainties that could cause actual results, performance or expansion and growth achievements to differ materially from those expressed or implied by those forward looking statements, such as significant changes in market conditions, the inability of the Company to close sales, the inability of the Company to attract sufficient financing and the risk factors identified under "Risk Factors" in this MD&A and in the Company's Filing Statement available under Pluribus Technologies Corp.'s profile at www.sedarplus.ca.

New risk factors may arise from time to time, and it is not possible for management of the Company to predict all of those risk factors or the extent to which any factor or combination of factors may cause actual results, performance or achievements of the Company to be materially different from those expressed or implied in such forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. The forward-looking statements contained in this MD&A speak only as of the date hereof. The Company does not undertake or assume any obligation to release publicly any revisions to these

forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as required by law. This report should be viewed in conjunction with the Company's other publicly available filings, copies of which can be obtained electronically under the profile of Pluribus Technologies Corp. on SEDAR+ at www.sedarplus.ca.

Non-IFRS Financial Measures

The Company uses non-IFRS measures to assess its operating performance. Securities regulations require that companies caution readers that earnings and other measures adjusted to a basis other than IFRS do not have standardized meanings and are unlikely to be comparable to similar measures used by other companies. Accordingly, they should not be considered in isolation. The Company uses Adjusted EBITDA as a measure of operating performance. Management uses Adjusted EBITDA to evaluate operating performance as it excludes amortization of software and intangibles (which is an accounting allocation of the cost of software and intangible assets arising on acquisition), any impact of finance and tax related activities, asset depreciation, foreign exchange gains and losses, other income, restructuring and transition costs primarily related to acquisitions and other one-time non-recurring transactions. See section "Non-IFRS Financial Measures".

Company Overview

Pluribus is a technology company that is a value-based acquirer of small, profitable business-to-business technology companies in a range of verticals and industries.

Pluribus provides its acquisitions access to experienced sales and marketing resources, strategic partnership opportunities, a diverse portfolio of customers in different geographical markets and enabling technologies to create new revenue streams and provide the opportunity for these companies to grow in their respective markets. Pluribus is involved in the day-to-day strategy of each portfolio business, including, but not limited to, sales & marketing, product roadmap and service delivery.

When market conditions are conducive to raising capital at a reasonable cost, Pluribus focuses on rapidly acquiring and integrating new acquisitions to accelerate growth. When the environment does not support this, Pluribus focuses on implementing strategies to maximize organic growth and increase cashflow from operations in its existing portfolio companies. At times, Pluribus will look to divest non-core assets to enable the Company to focus on assets with the highest growth opportunities and to reduce leverage on its balance sheet.

Pluribus uses a "personal touch" to build relationships with founders and owner-operators who have often taken their company as far as they can in terms of market share, size and profitability. By partnering with an experienced team of hands-on operators, Pluribus can help these entrepreneurs continue their legacy and take their business to the next level. Pluribus brings a culture of fairness, agility, customer-focus and teamwork, which resonates with entrepreneurs who want to be part of something bigger and leverage the scale and capabilities of a larger organization. This differentiates us from traditional strategic and private equity acquirers who often see acquisitions as a purely financial transaction as opposed to an important partnership.

Our model is to take over the day-to-day management of the business and develop a transition plan with the founders. The goal is to leverage their relationships with customers and vendors and transition them to our team so that they can actually exit the business but feel that their legacy is in good hands. We will also work with the existing employees to give them the opportunity to be part of a growing organization where hard work, adding value, and integrity is rewarded.

After adjusting for the sale of HealthTech and the sale of Digital Enablement and POWR (Purple), the Company has two reportable segments:

eLearning (Green)
eCommerce (Orange)

Pluribus has identified these operating segments as high growth verticals and/or markets where our management team can add significant value based on their experience. These acquisitions have helped Pluribus expand its service offerings and create meaningful cross-selling opportunities between our portfolio companies and to capture additional share of wallet from their end-clients.

The Company was incorporated under the Business Corporations Act (Ontario) ("OBCA"). The Company's head office is located at 1931-130 King St. W, Toronto, M5X 2A2, Ontario, Canada.

For more information, please visit: https://www.pluribustechnologies.com/.

Sale of HealthTech

On May 10, 2024, the Company sold substantially all the assets, tangible and intangible, of its wholly owned subsidiary, TeleMED Diagnostic Management Inc., and all of the issued and outstanding fully-diluted shares of its wholly-owned subsidiary, TDM Telehealth Technology Ltd. (together "HealthTech") (the "HealthTech Sales Transaction"). The aggregate purchase price of $5,070, payable to the Company as follows: (i) $4,170 in cash on the closing date of the Sale Transaction, (ii) $400 in cash within ten business days of fulfillment of certain conditions pursuant to the purchase agreement, (iii) $200 in cash on, or within fifteen business days in which the net tangible asset amount is finalized and (iv) $300 in cash within fifteen business days of, the first anniversary of the closing date of the Sale Transaction. The first and second holdback payments are subject to potential adjustments as set out in the purchase agreement. The first holdback of $400 was earned during Q2 2024. The Company has recorded a contingent receivable balance of $768 relating to the estimated cash flows from the second and third hold-back amounts. A gain of $3,789 was recorded relating to the Sales Transaction.

The Company paid most of the net proceeds from the HealthTech Sales Transaction to National Bank ($3,050) pursuant to the terms of to the forbearance agreement dated January 18, 2024 and as amended with National Bank (the "Forbearance Agreement").

Sale of Digital Enablement and POWR

On October 11, 2024, the Company sold all of the issued and outstanding fully-diluted shares of its wholly-owned subsidiaries, POWR Inc., Assured Software Ltd. and Pluribus Technologies Limited (which includes its wholly-owned subsidiaries, Rowanwood Professional Services Limited ("Rowanwood") and Cranham Haig Limited ("DocMoto")) (the Digital Enablement and POWR Sales Transaction), for an aggregate purchase price of $17,000 payable in cash, on a cash-free, debt-free basis and subject to a working capital adjustment, and deductions for closing income tax payable, transaction expenses, and holdbacks, where applicable. The Purchase Price was payable to the Company in cash on

the closing, subject to (i) a working capital holdback of $500, (i) an indemnification holdback in the amount of $250, (i) a performance holdback in the amount of $1,800, and (iv) applicable deductions for indebtedness, closing income tax payable, transaction expenses and an estimated working capital adjustment. In connection with the previous acquisition of Rowanwood in May 2022, an aggregate of £210 was paid from the Company to certain former shareholders of Rowanwood.

The Company paid $9,049 of the net proceeds from the Digital Enablement and POWR Sales Transaction to National Bank, pursuant to the terms of the second forbearance agreement ("Second Forbearance Agreement"), dated August 16, 2024.

Immediately before the classification of Digital Enablement and POWR to discontinued operations as at June 30, 2024, the Company valued the businesses at fair value less costs of disposal. The Company recorded an impairment charge of $14,476 to discontinued operations.

In accordance with IFRS 5, Non-current assets held for sale and discontinued operations, the balance sheet discloses separately the assets and liabilities of Digital Enablement and POWR at September 30, 2024. Discontinued operations of Digital Enablement, POWR and HealthTech are excluded from the results of continuing operations and are presented as a single amount as net income after tax from discontinued operations in the consolidated statement of operations. As a result, the results of discontinued operations of HealthTech, Digital Enablement and POWR have been excluded from prior period figures as applicable per IFRS 5 to conform to current period presentation. Other than where disclosed, discussions of results and Non-IFRS Financial Measures, including Adjusted EBITDA, in this MD&A are of continuing operations.

eLearning

eLearning provides digital tools for companies and educators to create and deliver learning content and experiences online. The segment is comprised of seven acquisitions:

The Learning Network – Provider of continuing education for the accounting world. Their learning management framework serves the chartered professional accountant community with tools for professional growth, requisite certifications, and an enterprise-wide foundation of intellectual capital. Products and services include:

Trellis Learning Management System to deliver eLearning courses, provide reporting and analytics, and host and store records for compliance. Revenue is recognized rateably over the subscription period.
NASBA (National Association of State Boards of Accountancy) course certification service. Revenue for project-based services is recognized on a percentage of completion bas
Professional Services: Consulting, development, implementation and integration services in conjunction with Trellis LMS. Revenue for these project-based services is recognized on a percentage of completion basis.

ICOM Productions – ICOM specializes in Online Learning, Video and Motion Graphics Production, Virtual Reality and 3D Development and learning delivery tools. Products and services include:

Breaze (LMS, eLearning): eLearning LMS, software development and delivery platform that combines features of authoring software and LMS in one product. Revenue is typically recognized rateably over the subscription period or in certain instances base on utilization or based on number of users/licenses accessed.
Content Development Services (Digital eLearning Video, VR, AR, 360, Motion Graphics & 3D): Learning / training content creators. Revenue for project-based services is recognized on a percentage of completion basis.
Professional Learning Services (Curriculum Development, Corporate learning needs analysis): Instructional design, and writing. Revenue for project-based services is recognized on a percentage of completion basis.

Tortal Training - A full-service eLearning provider specializing in developing interactive eLearning solutions. Products and services include:

Tortal Training (LMS) specializes in delivery eLearning courses to multi-location clients in the franchise industry. Revenue is recognized rateably over the course of a subscription period.
Content Development Services (Digital eLearning Video): Learning / training content creators. Revenue for project-based services is recognized on a percentage of completion basis.
Course Library: Tortal also owns the rights to over 100 skills training courses that it has developed over time, and these are licensed to clients. The types of courses include Customer Service, Leadership and Management, Sales and Relationship Management, Best Practices for Franchisees, etc. Revenue is recognized rateably over the course of the subscription period.

LogicBay - Provides technology-enabled Partner Relationship Management (PRM) and LMS solutions that enable organizations to build, scale, and optimize their sales channel and deliver training to multi-location facilities. Products and services include:

Performance Center - (PRM/LMS) technology supports the sales channel life cycle from recruiting and onboarding sales partners to managing a global network of partners in multiple languages. Revenue is typically recognized rateably over the subscription period
FUSE (Digital Marketplace), a member-based digital ecosystem for the manufacturing industry fosters opportunities for members to connect and collaborate, exchange information, and gain immediate access to content & courses. Revenue is typically recognized rateably over the subscription period
Professional Services: LogicBay offers consulting, development, implementation and integration services in conjunction with Performance LMS. Revenue for these project-based services is recognized on a percentage of completion basis.

SkilSure - Provides customized professional development and competence assurance software and services in Canada and the United Kingdom. SkilSure has experience in tracking the progress of job-specific competency-based training. Products and services include:

SkilSure (Competency Platform and Micro Learning Portal) - SAAS Database application for planning, mentoring, and supporting development; tracking development progress against competence requirements; building and maintaining e-portfolios to support accomplishment; and allowing controlled access to review, appraise and comment on evidence of accomplishment. Revenue is typically recognized rateably over the subscription period or in certain instances base on utilization.
QuizBase (Testing software application)- e-testing solution that can be provided separately or integrated with SkilSure's e-portfolio solution. QuizBase features include time limits, the ability to link learning resources to questions, various question types, and "shuffle"- randomization of questions drawn from a set pool to ensure fairness. Revenue is typically recognized rateably over the subscription period or in certain instances base on utilization.
Professional Services: include automated training needs analyses, continuing professional development solutions, online testing, mentoring solutions, eLearning and competence tracking and verification systems and e-portfolio systems. Revenue for project-based services is recognized on a percentage of completion basis.

Pathways Training & eLearning - Specializes in the design of learning technologies and traditional classroom programming, including eLearning, animation, simulation, gaming, live action video and 360° virtual reality. Products and services include:

LMS and Micro-Learning Portal: Pathways LMS for clients using Moodle open-source code and their various plugins. These systems allow clients to quickly access all training videos, manuals and eLearning courses at one easy site. Revenue is recognized rateably over the subscription period.
Course Library: Pathways also owns the rights to over 25 skills training courses that it has developed over time, and these are licensed to clients. The types of courses include Customer Service, Leadership and Management, Sales and Relationship Management, Social Media strategy, Diversity training and courses for instructional designer or eLearning developers.
Content Development Services (Digital eLearning, Video, VR, AR, 360, Gamification, Motion Graphics & 2D/3D animation: Learning / training content creators). Revenue for project-based services is recognized on a percentage of completion basis.
Professional Learning Services (Curriculum Development, Corporate learning needs analysis): Instructional design and writing. Revenue for project-based services is recognized on a percentage of completion basis.

In 2022, The Learning Network, ICOM, Tortal Training, LogicBay, SkilSure and Pathways began to consolidate into "the Learning Network" to enable the group to offer eLearning products and services to the corporate training industry. The businesses currently go to market as one, however remain separate legal entities. In the MD&A, we refer to the Learning Network (or "TLN") as the consolidated group of businesses, as they share resources and are operated together.

Kesson Group – Focuses on addressing the worldwide teaching shortage by providing products and services that recruit, create and provide schools access to teachers. Products and services include:

Klassroom (Certification portal) provides aspiring teachers with pathways to teacher licensure. Revenue is recognized when access is made available to the participant.
Teachaway (Recruiting Platform) - Connects teachers directly with employment at schools and districts through its hiring platform. Subscription revenue is recognized rateably over the subscription period.

Skooli (Online tutoring platform), leverages a network of job seeking teachers to provide districts with accessible tutoring solutions. Revenue is recognized rateably over the subscription period.
Full Service Recruiting (Service) – Utilizes Kesson’s database of teachers and recruiting expertise to place candidates on behalf of schools. Revenue is recognized when an individual has been placed and is on-site.
TEFL Certification – TEFL Certification is a training program for teachers who are working overseas. Revenue is recognized access is granted.
TCP Membership – Membership services for licensed teachers. Revenue is recognized rateably over the subscription period.

eCommerce

Social5 – A social media marketing company that uses proprietary technologies to provide affordable marketing solutions to an underserved SMB market. With an increasing number of consumers turning to social media channels such as Facebook, LinkedIn, Twitter and Instagram to research and purchase products, Social5 provides a suite of marketing solutions designed to help SMBs. Products and services include:

Social5 Content delivery system – enables automatic multiple postings of localized content on a weekly basis across all social media platforms. Revenue is recognized rateably over the contract period.
Services: graphical design, content creation, social media advertising and reputation management. Revenue for project-based services is recognized when project is completed.

Third Quarter Business Updates

Overall Performance from Continuing Operations

Revenue for the quarter decreased by $645 or 13% from $5,107 in 2023 to $4,462 in 2024. The decline in revenue was primarily driven by eLearning ($518) and in eCommerce revenue ($127). Adjusted EBITDA for the quarter increased by $59, or 11% from ($536) in 2023 to ($477) in 2024 due to a lower cost base following the restructuring undertaken by the Company in 2023 and 2024. While the Company undertook the sale process to divest of POWR and Digital Enablement, the shared services to support these businesses have been retained at Corporate and the associated costs are included in continuing operations. In Q4 2024, management initiated a new restructuring program to realign costs to existing eLearning revenue and the new legal structure following the divestiture of Digital Enablement and POWR. Total estimated annualized savings related to this restructuring program at TLN, Kesson and Corporate is $1,800. This restructuring program is incremental to the Q2 2024 restructuring program at Kesson and Social5 resulting in estimated annualized savings of $600.

The Company incurred a net loss of $2,672 for the quarter ended September 30, 2024 compared to a net loss of $2,982 for the comparable period.

Revenue for the nine months ended September 30, 2024 increased by $398 or 3% from $15,138 in 2023 to $15,536 in 2024. The increase in revenue was primarily driven by the Learning Network perpetual license sale in Q1 2024 ($1,109). Adjusted EBITDA for the nine months ended September 30, 2024 increased by $2,384, or 107% from ($2,233) in 2023 to $151 in 2024 due to (i) the increase in revenue noted above and (ii) a lower cost base following the restructuring undertaken by the Company in 2023.

The Company incurred a net loss of $9,125 for the nine months ended September 30, 2024 compared to a net loss of $9,425 for the comparable period.

eLearning

The Learning Network

A key focus for TLN has been developing high-quality course creation projects in areas such as anti-money laundering, compliance and regulatory training, and HIPAA, which continue to be critical areas for clients in highly regulated industries. These offerings not only support traditional e-learning but are increasingly being integrated with XR solutions to enhance engagement and retention. At the same time, we are seeing a significant increase in the adoption of AR/VR technologies within higher education, as institutions strive to attract students by offering innovative and immersive learning experiences. TLN's expertise in XR positions us as a key partner for both educational institutions and clients in compliance-driven sectors, enabling them to maximize ROI and achieve their strategic goals.

Due to a slowing of services revenue during Q3 2024 and to further optimize the Company's delivery model, management initiated a cost cutting program at TLN in November 2024 to right size the cost base to current revenues. The annualized cost savings are estimated to be $1,100.

Kesson Group

In 2024, Kesson Group has continued to see its footprint expand in the Middle East, notably the UAE and Latin America. Management is seeing new emerging markets open, such as Saudi Arabia, with the NEOM 2030 vision, and has started to garner some initial market penetration. As well as this, traditionally, domestic markets such as the US & UK have started to open up new international pipelines to combat the current teacher shortages, leading to Kesson Group winning it's first UK schools trust. Despite socio-economic factors affecting some of the more established international markets this year, management remains confident that their strategy will help position themselves for additional growth going forward.

While this growth slowly continues, management initiated a cost cutting program at Kesson in June 2024 and November 2024 to right size the cost base to current revenues. The annualized cost savings are estimated to be $850.

eCommerce

Social5

In 2024, Social5 has seen an overall challenge in the eCommerce market and in the SME segment in particular. This resulted in a higher churn rate than historically seen. Management has reduced the cost structure to align to current revenues and implemented the use of AI to make the content creation process more efficient. Given the recent uncertainty in the eCommerce market and the new these efforts will likely not generate additional value until 2025, management determined that a goodwill impairment was necessary.

Management initiated a cost cutting program at Social5 in August 2024 to right size the cost base to current revenues. The annualized cost savings are approximately $100.

Corporate

The majority of management's focus at Corporate has been negotiating the Forbearance Agreement with National Bank, completing the strategic review, executing on the sale of HealthTech and Digital Enablement and POWR and supporting the transition service agreement. Management implemented a restructuring program in Q4 2024 which will result in annualized savings of approximately $350.

Outlook

The Special Committee continues its previously communicated strategic review to explore alternatives to optimize its capital structure including reviewing the remaining verticals to determine which as core and non-core based on their growth potential and looking at refinancing opportunities.

Management determined that the growth opportunities in the HealthTech vertical were limited without additional investment and deemed it to be non-core. Management was able to more than double EBITDA since the acquisition in December 2019 and was able to achieve an attractive return on invested capital. The capital tied up in HealthTech was better redeployed to reduce leverage on the balance sheet.

The Board of Directors and Management determined selling Digital Enablement and POWR would provide the necessary liquidity to allow the Company to continue to deleverage and reduce the debt with National Bank while still leaving the profitable eLearning vertical as a strategic asset where value can be grown.

Results of Operations

Our operating results may fluctuate quarterly, mainly as a result of fluctuations in usage volumes of our software and professional services. Our quarterly results also may be influenced by foreign exchange and changes in staffing and infrastructure. See "Risks and Uncertainties" for more details.

For the period ended September 30,	Three Months				Nine Months
	2024 $	2023 $	Var $	Var %	2024 $	2023 $	Var $	Var %
Continuing operations
Revenue	4,462	5,107	(645)	-13%	15,536	15,138	398	3%
Cost of revenue	2,049	2,267	(218)	-10%	6,294	7,285	(991)	-14%
Gross profit	2,413	2,840	(427)	-15%	9,242	7,853	1,389	18%
Operating expenses
Sales and marketing	741	1,170	(429)	-37%	2,418	3,378	(960)	-28%
Research and development	867	788	79	10%	2,556	2,323	233	10%
General and administrative	1,282	1,418	(136)	-10%	4,117	4,385	(268)	-6%
	2,890	3,376	(486)	-14%	9,091	10,086	(995)	-10%
Operating income (loss)	(477)	(536)	59	-11%	151	(2,233)	2,384	-107%
Acquisition costs	470	1,349	(879)	-65%	2,005	2,611	(606)	-23%
Amortization and depreciation	623	705	(82)	-12%	1,915	2,283	(368)	-16%
Impairment of goodwill	—	—	—	n/a	1,643	—	1,643	n/a
Share-based compensation	4	95	(91)	-96%	53	373	(320)	-86%
Loss (gain) on revaluation of contingent consideration	—	(332)	332	-100%	330	(332)	662	-199%
Gain on disposal of fixed assets	—	(2)	2	-100%	—	(2)	2	-100%
Finance expense, net	760	680	80	12%	2,433	2,110	323	15%
Foreign exchange loss (gain)	614	(29)	643	-2217%	943	407	536	132%
Loss before income taxes	(2,948)	(3,002)	54	-2%	(9,171)	(9,683)	512	-5%
Income tax expense (recovery)	(276)	(20)	(256)	1280%	(46)	(258)	212	-82%
Net loss from continuing operations	(2,672)	(2,982)	310	-10%	(9,125)	(9,425)	300	-3%
Discontinued operations
Net income (loss) after tax from discontinued operations	2,665	718	1,947	271%	(6,355)	3,286	(9,641)	-293%
Net loss for the period	(7)	(2,264)	2,257	-100%	(15,480)	(6,139)	(9,341)	152%
Loss per share - basic and diluted	(0.00)	(0.14)	0.14	-100%	(0.98)	(0.39)	(0.59)	153%
Loss per share - basic and diluted from continuing operations	(0.17)	(0.19)	0.02	-10%	(0.58)	(0.59)	0.02	-3%
Weighted average number of common shares outstanding - basic	15,826,593	15,826,593	—	0%	15,826,593	15,866,249	(39,656)	0%
Adjusted EBITDA	(477)	(536)	59	-11%	151	(2,233)	2,384	-107%

Quarterly Results of Operations

Revenue

For the period ended September 30,	Three Months				Nine Months
	2024	2023	Var	Var	2024	2023	Var	Var
	$	$	$	%	$	$	$	%
Revenue	4,462	5,107	(645)	-13%	15,536	15,138	398	3%

Revenue for the quarter ended September 30, 2024 was $4,462, a decrease of $645 or 13%, compared to $5,107 for the comparable period. The decline was primarily driven by a reduction in eLearning revenue ($518) due to softer service delivery at TLN and a reduction in eCommerce revenue ($127) due to increased churn at Social5. For the nine months ended September 30, 2024, revenue was $15,536, an increase of $398 or 3%, compared to $15,138, for the comparable period. The increase in revenue is attributable to the eLearning segment ($745), offset by a decline in eCommerce revenue ($347). Revenue growth at eLearning was primarily driven by the perpetual license sale at SkilSure ($1,109), offset by a softening of service revenue at TLN during Q3 2024. Management implemented a cost cutting program at TLN, Kesson and Corporate in Q4 2024 to align the cost base to current revenue and the existing legal structured, with annualized estimated cost savings of $1,800.

Cost of revenue

For the period ended September 30,	Three Months				Nine Months
	2024	2023	Var	Var	2024	2023	Var	Var
	$	$	$	%	$	$	$	%
Cost of revenue	2,049	2,267	(218)	-10%	6,294	7,285	(991)	-14%

Cost of revenue for the quarter ended September 30, 2024 was $2,049, a decrease of $218 or 10%, compared to $2,267 for the comparable period. For the nine months ended September 30, 2024, cost of revenue was $6,294, a decrease of $991 or 14%, compared to $7,285. The decline was driven by the reduction in revenue and for the nine months ended September 30, 2024, cost savings at eLearning and eCommerce due to restructuring undertaken by the Company in 2023.

Operating expenses

For the period ended September 30,	Three Months				Nine Months
	2024	2023	Var	Var	2024	2023	Var	Var
	$	$	$	%	$	$	$	%
Sales and marketing	741	1,170	(429)	-37%	2,418	3,378	(960)	-28%
Research and development	867	788	79	10%	2,556	2,323	233	10%
General and administrative	1,282	1,418	(136)	-10%	4,117	4,385	(268)	-6%
	2,890	3,376	(486)	-14%	9,091	10,086	(995)	-10%

Sales and marketing

Sales and marketing expense for the quarter ended September 30, 2024 was $741, a decrease of $429 or 37%, compared to $1,170 for the comparable period. For the nine months ended September 30, 2024, sales and marketing expense was $2,418, a decrease of $960 or 28%, compared to $3,378, for the comparable period. The trend was driven by cost savings at eLearning ($793), eCommerce ($114) and Corporate ($53) following the restructuring undertaken in 2023.

Research and development

Research and development expense for the quarter ended September 30, 2024 was $867, an increase of $79 or 10%, compared to $788 for the comparable period. The increase in R&D costs was driven by TLN sub-contractor costs required to support a specific service delivery project. For the nine months ended September 30, 2024, research and development expense was $2,556, an increase of $233 or 10%, compared to $2,323, for the comparable period. The increase in research and development expense was due to investment at Kesson to support the growth of the relationship with PowerSchool in 2023 and the increase in TLN sub-contractor costs outlined for Q3 2024. Kesson R&D costs were rightsized as part of the June 2024 restructuring following the completion of the main product changes to support PowerSchool.

General and administrative

General and administrative expense for the quarter ended September 30, 2024 was $1,282, a decrease of $136 or 10%, compared to $1,418, for the comparable period. The decrease was primarily driven by a number of cost savings

at Corporate ($95). For the nine months ended September 30, 2024, general and administrative expense was $4,117, a decrease of $268 or 6%, compared to $4,385, for the comparable period. The decrease was primarily attributable to eLearning ($197) and eCommerce ($68) due to the 2023 restructuring.

Non-Operating Expenses

For the period ended September 30,	Three Months				Nine Months
	2024	2023	Var	Var	2024	2023	Var	Var
	$	$	$	%	$	$	$	%
Acquisition costs	470	1,349	(879)	-65%	2,005	2,611	(606)	-23%
Amortization and depreciation	623	705	(82)	-12%	1,915	2,283	(368)	-16%
Impairment of goodwill	—	—	—	n/a	1,643	—	1,643	n/a
Share-based compensation	4	95	(91)	-96%	53	373	(320)	-86%
Loss (gain) on revaluation of contingent consideration	—	(332)	332	-100%	330	(332)	662	-199%
Gain on disposal of fixed assets	—	(2)	2	-100%	—	(2)	2	-100%
Finance expense, net	760	680	80	12%	2,433	2,110	323	15%
Foreign exchange loss (gain)	614	(29)	643	-2217%	943	407	536	132%
	2,471	2,466	5	0%	9,322	7,450	1,872	25%

Acquisition costs

Acquisition costs in 2024 primarily include severance costs, professional fees relating to the Forbearance Agreement, restructuring costs and consulting costs relating to previous acquisitions. Acquisition costs for the quarter ended September 30, 2024 were $470, a decrease of $879 or 65%, compared to $1,349 for the comparable period. The decline in cost was primarily driven a decline in restructuring costs incurred in 2023 ($410), a reduction in consultancy costs relating to previous acquisitions ($180), and other non-recurring consulting and facility costs incurred in 2023 ($320). For the nine months ended September 30, 2024, acquisition costs were $2,005, a decrease of $606 or 23%, compared to $2,611 for the comparable period. The decrease in acquisition costs primarily relates to lower consultancy costs relating to previous acquisitions ($490), non-recurring facility and consultancy costs incurred in 2023 ($600) and a decline in restructuring costs ($110), offset by professional and Directors fees incurred relating to the Forbearance Agreement ($740).

Amortization and depreciation

Amortization and depreciation for the quarter ended September 30, 2024 was $623, a decrease of $82 or 12%, compared to $705 for the comparable period. For the nine months ended September 30, 2024 amortization and depreciation was $1,915, a decrease of $368 or 16%, compared to $2,283 for the comparable period. This expense primarily relates to amortization of intangibles.

Impairment of goodwill and intangible assets

Impairment of goodwill and intangible assets for the nine months ended September 30, 2024 was $1,643, compared to $nil for the comparable period. In Q2 2024, the Company recorded an impairment charge against eCommerce goodwill.

Share-based compensation

Share-based compensation for the quarter ended September 30, 2024 was $4, a decrease of $91 or 96%, compared to $95 for the comparable period. For the nine months ended September 30, 2024 share-based compensation was $53, a decrease of $320 or 86%, compared to $373 for the comparable period.

Loss (gain) on revaluation of contingent consideration

The loss (gain) relates to the revaluation of the earn-out obligations for TLN.

Finance expense, net

Finance expense, net, for the quarter ended September 30, 2024 was $760, an increase of $80 or 12%, compared to $680 for the comparable period. For the nine months ended September 30, 2024 finance expense, net, was $2,433, an increase of $323 or 15%, compared to $2,110 for the comparable period. The increase in finance expense relates to the change in the benchmark rate and margin per the Forbearance Agreement.

Foreign Exchange loss

Foreign exchange loss for the quarter ended September 30, 2024 was $614, compared to a gain of $29 for the comparable period. For the nine months ended September 30, 2024, foreign exchange loss was $943, compared to a loss of $407, for the comparable period. The loss for the quarter was driven by the appreciation of the US Dollar vs. the Canadian Dollar, given that part of the borrowings held by the company are denominated in US Dollars.

Income Tax Expense (Recovery)

Income tax recovery for the quarter ended September 30, 2024 was $276, compared to $20 for the comparable period. For the nine months ended September 30, 2024, income tax recovery was $46 compared to $258 for the comparable period. The increase in income tax recovery is due to the reversal of certain deferred tax liabilities due to timing differences and a decrease in the current income tax expense.

Net income (loss) for the period

Net loss for the quarter ended September 30, 2024 was $2,672, compared to a loss of $2,982 for the comparable period. For the nine months ended September 30, 2024, net loss was $9,125, a decrease in net loss of $300 or 3%, compared to $9,425, for the comparable period.

Discontinued operations

For the period ended September 30,	Three Months				Nine Months
	2024 $	2023 $	Var $	Var %	2024 $	2023 $	Var $	Var %
Adjusted EBITDA	1,448	1,598	(150)	-9%	4,698	5,080	(382)	-8%
Acquisition costs	4	5	(1)	-20%	159	44	115	261%
Transaction costs	—	—	—	n/a	415	—	415	n/a
Amortization and depreciation	—	649	(649)	-100%	1,239	1,858	(619)	-33%
Impairment of goodwill	—	—	—	n/a	14,476	—	14,476	n/a
Loss (gain) on revaluation of contingent consideration	(431)	—	(431)	n/a	(431)	—	(431)	n/a
Gain on lease termination	—	2	(2)	-100%	(14)	2	(16)	-800%
Gain on disposal of assets held for sale	—	—	—	n/a	(3,789)	—	(3,789)	n/a
Finance expense, net	3	1	2	200%	4	(1)	5	-500%
Foreign exchange loss (gain)	(753)	205	(958)	-467%	(957)	(420)	(537)	128%
Income tax expense (recovery)	(40)	18	(58)	-322%	(49)	311	(360)	-116%
Net income (loss) after tax from discontinued operations	2,665	718	1,947	271%	(6,355)	3,286	(9,641)	-293%

Discontinued operations include the results of (i) HealthTech, which the Company disposed of on May 10, 2024 and (ii) Digital Enablement and POWR, which the Company disposed of on October 11, 2024.

Adjusted EBITDA from Discontinued Operations for the quarter ended September 30, 2024 was $1,448, a decrease of $150 or 9%, compared to $1,598 for the comparable period. For the nine months ended September 30, 2024, Adjusted EBITDA was $4,698, a decrease of $382 or 8%, compared to $5,080, for the comparable period. The decline in Adjusted EBITDA was driven by a decrease in HealthTech Adjusted EBITDA ($283) and POWR Adjusted EBITDA ($58), offset by an increase in Digital Enablement Adjusted EBITDA ($191). The decline in HealthTech Adjusted EBITDA is due to timing, given 2024 results are included to the sales date of May 10, 2024. POWR Adjusted EBITDA was impacted challenges in the eCommerce market, which negatively impacted customer churn, while Digital Enablement Adjusted EBITDA was positively impacted by growth in revenue to existing customers.

Net income (loss) after tax from discontinued operations for the quarter ended September 30, 2024 was ($2,665), an increase of $1,947 or 271%, compared net income of $718, for the comparable period. The increase in net income was driven by foreign exchange ($958), and depreciation and amortization not being recorded in Q3 2024 ($649).

For the nine months ended September 30, 2024, net loss was ($6,355), a decrease of $9,641 or 293% compared to net income of $3,286 for the comparable period. The decline in net income was driven by the impairment of goodwill and intangible assets of Digital Enablement and POWR ($14,476), recognized by the Company as part of the reclassification of the disposal group to assets held for sale and discontinued operations offset by the gain recognized from the sale of HealthTech ($3,789).

Use of funds

	2022 Filing Statement	Actual	Var
	$	$	$
Acquisitions	10,300	9,650	650
Working Capital	4,690	5,340	(650)
Total funds	14,990	14,990	—

The Company's expected use of its funds as of the date of its 2022 Filing Statement compared to how those funds were actually used to date is presented above. Note that costs related to acquisition other than the purchase price were paid out of the Company's working capital. The acquisition costs relate to the Company's acquisition of Kesson in January 2022. The variance in expected use of proceeds for acquisition is a result of a lower expected acquisition price of the Kesson Group. Management had planned to do five acquisitions in 2023 but as the macroeconomic conditions worsened and cashflow became tight, the Company held the balance of the proceeds to cover debt service obligations and to provide liquidity.

Non-IFRS Financial Measures

"Adjusted EBITDA" is a measure of the Company's operating profitability. Management believes that Adjusted EBITDA provides useful information to investors because they exclude transactions not related to the core operating business activities, allowing meaningful analysis of the performance of core operations.

For the period ended September 30,	Three Months				Nine Months
	2024 $	2023 $	Var $	Var %	2024 $	2023 $	Var $	Var %
Total Revenue	4,462	5,107	(645)	-13%	15,536	15,138	398	3%
Net income (loss) for the period	(2,672)	(2,982)	310	-10%	(9,125)	(9,425)	300	-3%
Acquisition costs	470	1,349	(879)	-65%	2,005	2,611	(606)	-23%
Amortization and depreciation	623	705	(82)	-12%	1,915	2,283	(368)	-16%
Impairment of goodwill	—	—	—	n/a	1,643	—	1,643	n/a
Share-based compensation	4	95	(91)	-96%	53	373	(320)	-86%
Loss (gain) on revaluation of contingent consideration	—	(332)	332	-100%	330	(332)	662	-199%
Gain on disposal of fixed assets	—	(2)	2	-100%	—	(2)	2	-100%
Finance expense, net	760	680	80	12%	2,433	2,110	323	15%
Foreign exchange loss (gain)	614	(29)	643	-2217%	943	407	536	132%
Income tax expense	(276)	(20)	(256)	1280%	(46)	(258)	212	-82%
Total Adjustments	2,195	2,446	(251)	-10%	9,276	7,192	2,084	29%
Adjusted EBITDA	(477)	(536)	59	-11%	151	(2,233)	2,384	-107%
Adjusted EBITDA %	-10.7%	-10.5%			1.0%	-14.8%

Adjusted EBITDA for the quarter ended September 30, 2024 was ($477), an increase of $59 or 11%, compared to ($536) for the comparable period. The increase was the result of higher Adjusted EBITDA savings at Corporate.

Adjusted EBITDA for the nine months ended September 30, 2024 was $151, an increase of $2,384 or 107%, compared to ($2,233) for the comparable period. The increase was the result of higher Adjusted EBITDA from the eLearning business unit relating to the perpetual license sale in Q1 2024 and the reduction in costs from the 2023 restructuring program. Adjusted EBITDA for the quarter and nine months ended September 30, 2024, is fully burdened by Corporate shared services costs relating to continued and discontinued operations.

Business Unit Revenue, Adjusted EBITDA and Net Income

eLearning

For the period ended September 30	Three Months				Nine Months
	2024 $	2023 $	Var $	Var %	2024 $	2023 $	Var $	Var %
eLearning
Revenue	4,020	4,538	(518)	-11%	14,060	13,315	745	6%
Adjusted EBITDA	554	573	(19)	-3%	3,376	1,138	2,238	197%
Amortization and depreciation	492	560	(68)	-12%	1,504	1,855	(351)	-19%
Loss (gain) on revaluation of contingent consider	—	(332)	332	-100%	330	(332)	662	-199%
Gain on disposal of fixed assets	—	(2)	2	-100%	—	(2)	2	-100%
Finance expense, net	4	—	4	n/a	2	(3)	5	-167%
Foreign exchange loss (gain)	165	195	(30)	-15%	574	590	(16)	-3%
Income tax expense (recovery)	(289)	7	(296)	-4229%	(5)	(190)	185	-97%
Net income (loss)	182	145	37	26%	971	(780)	1,751	-224%

Revenue for the quarter ended September 30, 2024 was $4,020, a decrease of $518 or 11%, compared to $4,538 for the comparable period. The decline in revenue was primarily driven by a slowing of service revenue during the quarter. For the nine months ended September 30, 2024, revenue was $14,060, an increase of $745 or 6% compared to $13,315, for the comparable period. The increase in revenue was primarily driven by the SkilSure perpetual license sale ($1,109).

Adjusted EBITDA for the quarter ended September 30, 2024 was $554, a decrease of $19 or 3%, compared to $573 for the comparable period. The decline in Adjusted EBITDA was driven by the decline in revenue, offset by cost savings from restructuring. For the nine months ended September 30, 2024, Adjusted EBITDA was $3,376, an increase of $2,238 or 197%, compared to $1,138, for the comparable period. The increase in Adjusted EBITDA was driven by the increase in revenue previously noted, and the realized cost savings from the 2023 restructuring program. Kesson Adjusted EBITDA remains close to breakeven and therefore Management announced a restructuring program in Q2 2024 to right size the cost base to current revenue, which is expected to deliver annual savings of approximately $500.

Net income for the quarter ended September 30, 2024 was $182, an increase of $37 or 26%, compared to $971, an increase of $1,751 or 224% compared to a loss of $780 for the comparable period. The increase in net income was driven by the increase in Adjusted EBITDA ($2,238) and a decrease in amortization and depreciation ($351), offset the change in the revaluation of contingent consideration ($662) and a decrease in income taxes recovery ($185).

eCommerce

For the period ended September 30	Three Months				Nine Months
	2024 $	2023 $	Var $	Var %	2024 $	2023 $	Var $	Var %
eCommerce
Revenue	442	569	(127)	-22%	1,476	1,823	(347)	-19%
Adjusted EBITDA	25	27	(2)	-7%	145	55	90	164%
Amortization and depreciation	129	127	2	2%	385	374	11	3%
Impairment of goodwill	—	—	—	n/a	1,643	—	1,643	n/a
Foreign exchange loss (gain)	16	(19)	35	-184%	1	12	(11)	-92%
Income tax expense (recovery)	13	(27)	40	-148%	(41)	(68)	27	-40%
Net loss	(133)	(54)	(79)	146%	(1,843)	(263)	(1,580)	601%

Revenue for the quarter ended September 30, 2024 was $442, a decrease of $127 or 22%, compared to $569 for the comparable period. For the nine months ended September 30, 2024, revenue was $1,476, a decrease of $347 or 19% compared to $1,823, for the comparable period. The decline was driven by increased churn at Social5. Management implemented a restructuring program to right size costs to current revenue in August 2024, which is estimated to generate $100 of cost savings annually.

Adjusted EBITDA for the quarter ended September 30, 2024 was $25, a decline of $2 or 7%, compared to $27, for the comparable period. For the nine months ended September 30, 2024, Adjusted EBITDA was $145, an increase of $90 or 164%, compared to $55, for the comparable period. Despite the decline in revenue, Adjusted EBITDA benefited from the reduction in the cost base following the 2023 and August 2024 restructuring.

Net loss for the quarter ended September 30, 2024 was $133, an increase of $79, compared to a loss of $54 for the comparable period. The increase in the net loss was due to forex ($35) and income tax ($40). For the nine months ended September 30, 2024, net loss was $1,843, an increase of $1,580 compared to a loss of $263 for the comparable period. Following the uncertainty in the eCommerce market and increased churn at Social5, Management booked an impairment charge of $1,643 during Q2 2024, thereby increasing the net loss.

Corporate

For the period ended September 30	Three Months				Nine Months
	2024 $	2023 $	Var $	Var %	2024 $	2023 $	Var $	Var %
Corporate
Adjusted EBITDA	(1,056)	(1,136)	80	-7%	(3,370)	(3,426)	56	-2%
Acquisition costs	470	1,349	(879)	-65%	2,005	2,611	(606)	-23%
Amortization and depreciation	2	18	(16)	-89%	26	54	(28)	-52%
Share-based compensation	4	95	(91)	-96%	53	373	(320)	-86%
Finance expense, net	756	680	76	11%	2,431	2,113	318	15%
Foreign exchange loss (gain)	433	(205)	638	-311%	368	(195)	563	-289%
Net loss	(2,721)	(3,073)	352	-11%	(8,253)	(8,382)	129	-2%

Adjusted EBITDA for the quarter ended September 30, 2024 was ($1,056), an increase of $80 or 7%, compared to ($1,136) for the comparable period. Adjusted EBITDA for the nine months ended September 30, 2024 was ($3,370) an increase of $56 or 2%, compared to ($3,426) in the comparable period. Following the sale of Digital Enablement and POWR in October 2024, management undertook a restructuring program to align the costs with the current legal structure, which will result in annualized savings of approximately $300 to be first recognized in Q1 2025.

Net loss for the quarter ended September 30, 2024 was ($2,721) a decrease of $352 or 11%, compared to a loss of ($3,073) for the comparable period. Net loss was positively impacted by lower acquisition costs ($879), offset by an increase in foreign exchange loss ($638). For the nine months ended September 30, 2024, net loss was ($8,253), a decrease of $129 or 2% compared to a loss of $8,382 for the comparable period. Net loss was positively impacted by a reduction of acquisition costs ($606) and share-based compensation ($320), offset by an increase in the finance expense ($318) and forex exchange loss ($563).

Liquidity and Capital Resources

The Company manages its liquidity by continuously monitoring forecasted and actual revenue, expenses, acquisition costs, debt service obligations and cash flow from operations.

Cash on hand from continuous operations at September 30, 2024, amounted to $678, as compared to $1,279 at December 31, 2023. At September 30, 2024, the Company had negative working capital of ($23,187), compared to ($33,415) at December 31, 2023.

During the nine months ended September 30, 2024, the Company had cash outflows from operating activities from both continued and discontinued operations of $306 (September 30, 2023: inflows $133), which was a result of the net loss of $15,480 (September 30, 2023: $6,139), reduced by the non-cash items included in net loss of $15,776 (September 30, 2023: $3,660) and decreased by changes in non-cash working capital of $602 (September 30, 2023: increase $2,612).

The Company incurred cash inflows from investing activities of $4,472 during the nine months ended September 30, 2024 relating to the sale of HealthTech (September 30, 2023: ($557)). The Company had incurred cash outflows from financing activities of $4,074 during the nine months ended September 30, 2024 primarily relating to the repayment of borrowings (September 30, 2023: $3,080).

During Q4 2023, the Company determined that it was not in compliance with its Total Debt to EBITDA and Fixed Charge Coverage ratio covenants under the FY2022 Credit Facility relating to its financial position as of September 30, 2023. At September 30, 2024 borrowings of $18,886 are classified as a current liability on the Balance Sheet.

On January 18, 2024, the Company entered into the Forbearance Agreement, whereby National Bank agreed to forbear from exercising its rights and remedies under the Credit Agreement until the earlier of March 29, 2024 and the occurrence of any terminating event. The Forbearance Agreement was later amended to extend the termination date. On August 16, 2024, the Company and National Bank entered into the Second Forbearance Agreement, whereby National Bank will continue to forbear from exercising its rights and remedies under the Credit Agreement. The Second Forbearance Agreement was later amended to extend the termination date to earlier of November 29, 2024 and the occurrence of any terminating event. As of the date hereof, the Company has not received an update from National Bank regarding the status of the Second Forbearance Agreement and whether it intends to further extend the term of the Second Forbearance Agreement beyond November 29, 2024. See "Debt Financing" and "Risk Factors" below for more details.

Management believes the Company will require additional financing in order to conduct its planned business operations, meet its ongoing levels of corporate overheads and discharge its liabilities and commitments as they come due. In addition, the Company restructured its operations 2023 and 2024 to meet its working capital requirements by:

Increasing cashflow from operations by restructuring its cost base to align to current revenues.
Prioritizing projects with a greater expected rate of return.
Divesting the HealthTech vertical, Digital Enablement and POWR to increase liquidity

Based on available funds, the Company manages its capital structure and makes adjustments to it to maintain flexibility while achieving the objectives stated above as well as support future business opportunities. To manage the capital structure, the Company may adjust its operating expenditure plans. The Company monitors its capital structure using annual forecasted cash flows, expenditure budgets and targets for the year as well as corporate capitalization schedules. This is achieved by the Board of Directors' regular review and acceptance of expenditure budgets.

Strategic Review

In November 2023, the Company announced a review and evaluation of strategic alternatives that may be available to the Company to further enhance the Company's growth, development and prosperity in the short and long terms with the goal of maximizing shareholder value. The Company has established a Special Committee of the Board of Directors for such purpose and has engaged Canaccord Genuity as its strategic advisor. The Special Committee will, among other things, explore the viability of raising capital through debt financing/refinancing, equity rights offerings, and the sale of core and/or noncore assets. The Second Forbearance Agreement provides for the continuation of the Company's previously announced strategic review process, which involves a review and evaluation of strategic alternatives that may be available to the Company to further enhance the Company's growth, development and prosperity in the short and long terms, with the goal of maximizing shareholder value.

Please see "Risk Factors" below.

Going Concern Uncertainty

The Company's financial statements were prepared on a going concern basis. The going concern basis assumes that the Company will 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. The interim condensed consolidated financial statements do not include any adjustments to the amounts and classification of assets and liabilities that would be necessary should the Company be unable to continue as a going concern. Such adjustments could be material.

For nine months ended September 30, 2024, the Company incurred a net loss of $15,480 (September 30, 2023 - $6,139) and had negative operating cash flows of $306 (September 30, 2023 – positive operating cash flows of $133). At September 30, 2024, the Company had negative working capital of ($23,187), compared to ($33,415) at December 31, 2023. The Company did not comply with the covenants under its credit facility with National Bank as of September 30, 2024. The Company currently will have insufficient cash to fund its operations and service its debt obligations for the next 12 months if the Company's sales do not improve or if they decline; if the Company's margins do not improve or if they decline; and/or if the Company's selling, general and administrative expenses increases or does not decrease; without obtaining additional funding from equity financing, debt financing or through other arrangements or adjusting certain financial covenants in its credit facilities. While the Company has been successful in obtaining financing to date, and believes it will be able to obtain sufficient funds in the future and ultimately achieve profitability and positive cash flows from operations, the Company's ability to raise capital may be adversely impacted by: market conditions that have resulted in a lack of normally available financing in the industry, a more difficult environment to complete M&A transactions, increased competition and price compression across the industry; and overall negative investor sentiment in light of inflation, rising interest rates, global conflict, and negative macroeconomic impacts from the current recessionary environment.

Accordingly, there can be no assurance that the Company will achieve profitability, or secure financing/divest core/noncore assets on terms favourable to the Company or at all. Should the Company be unable to generate sufficient cash flow from financing and operating activities, the carrying value of the Company's assets could be subject to material adjustments and other adjustments may be necessary to these financial statements. There can also be no assurance that the Company can successfully amend its financial covenants under its credit facilities. As a result of the foregoing, including the reclassification of its loan noted, these conditions indicate a material uncertainty exists that may raise significant doubt upon the Company's ability to continue as a going concern.

Debt Financing

	September 30, 2024	December 31, 2023
Term Loans	19,078	22,791
Deferred Financing Costs	(192)	(430)
Total Borrowings	18,886	22,361
Current Portion	18,886	22,361
Total Borrowings	18,886	22,361

FY2022 Credit Facility

On April 27, 2022, Pluribus entered into an agreement for a three-year, $42,000 credit facility with National Bank of Canada (the "FY2022 Credit Facility"). The facility provides the Company with a $3,000 revolving credit facility, a $24,000 non-revolving term loan and a $15,000 delayed draw term loan. The facility is secured by all assets of Pluribus and all existing and future subsidiaries of the Company. It contains customary representations, warranties and covenants, including a covenant to maintain a Total Debt to EBITDA ratio at or below 3.5 times and a Fixed Charge Coverage Ratio of 1.15 or higher at all times. The interest rate is benchmarked to the Canadian Dollar Offered Rate "CDOR" for borrowings in CAD or Secured Overnight Financing Rate "SOFR" for borrowings in USD plus 2.00% – 4.00% depending on the Company's Total Debt to EBITDA ratio at the end of any given financial period-end.

On April 21, 2023, Pluribus and National Bank of Canada amended the FY2022 Credit Facility, adjusting certain financial covenants up until December 31, 2023, before they return to the original covenant targets in the credit agreement. The changes were to increase the Total Debt to EBITDA ratio that ranged from 4.0 to 4.75 times and lowering the Fixed Coverage Ratio that ranged from nil to 1.10 depending on the specific fiscal 2023 quarter.

In November 2023, the Company advised National Bank of a breach of Total Debt to EBITDA ratio and Fixed Charge Coverage ratio covenants under the FY2022 Credit Facility and National Bank issued a reservation of rights letter in relation thereto.

On January 18, 2024, the Company entered into the Forbearance Agreement, whereby National Bank agreed to forbear from exercising its rights and remedies under the Credit Agreement until the earlier of March 29, 2024 and the occurrence of any terminating event (the "Forbearance Period"). The Forbearance Agreement allowed the Company to defer the January principal payment of $953 over three payments to be fully paid by April 1, 2024. Under the Forbearance Agreement, (i) no further borrowings are permitted, (ii) the interest rate on the outstanding principal payments is benchmarked to Prime Rate for borrowings in CAD or the US Base Rate for borrowings in USD plus an applicable margin, and (iii) the two interest rate swaps were terminated. Since entering into the Forbearance Agreement, it has been amended to (i) allow the Company to defer certain principal payments and (ii) extend the Forbearance Period.

On August 16, 2024, the Company and National Bank entered into the Second Forbearance Agreement, whereby National Bank will continue to forbear from exercising its rights and remedies under the Credit Agreement. The Second Forbearance Agreement has been extended until the earlier of November 29, 2024 and the occurrence of any terminating event to allow National Bank time to consider forecast financial information submitted by the Company. As of the date hereof, the Company has not received an update from National Bank regarding the status of the Second Forbearance Agreement and whether it intends to further extend the term of the Second Forbearance Agreement beyond November 29, 2024.

Term Loans – Refinance

In April 2022, as part of the FY2022 Credit Facility, a $24,000 term loan was immediately available and drawn upon at the close of the financing agreement. Of this amount, $14,500 was used to repay the balance of the previous borrowings at the time of settlement, $1,000 for transaction costs associated with the new financing, with the remaining $8,500 increasing the Company's cash balance on hand. The amortization period for repayment of the term loan is over a 7-year period on a quarterly basis. A third party has provided a partial repayment guarantee to National Bank, at a cost of $300 per annum to Pluribus.

Term Loans – Delayed Draw

As part of the FY2022 Credit Facility, a $15,000 committed delayed draw term loan is available to partially finance future acquisitions at a maximum of 50% of purchase price. The delayed draw term loan availability is subject to customary terms and conditions that are but not limited to Pluribus continuing to meet its financial covenants on a pro-forma basis and stays under 3.0 times Total Debt to trailing 12 months Adjusted EBITDA. The amortization period for repayment of the delayed draw term loan is over a 13-year period on a quarterly basis.

Pluribus drew on this facility to partially finance the closing of certain acquisitions in 2022 with the remaining borrowing under the delayed draw term loan to be $11,528 as at September 30, 2024 (December 31, 2023 – $11,398). The remaining borrowing was not drawn and the Forbearance Agreement prohibits use of the delayed draw term loan.

Revolving Line of Credit

As part of the FY2022 Credit Facility, a $3,000 revolving facility was available for use by the Company for general working capital and corporate uses. Repayment is due upon maturity of the facility. As at September 30, 2024, the Company has not drawn on this line of credit (December 31, 2023 – $nil). Under the Forbearance Agreement, the Company is not able to draw on the line of credit.

Derivative liability

On March 6, 2023, Pluribus entered into two interest rate swaps (USD and CAD), which exchange floating interest rate obligations on a notional value of $11,800 (USD $5,000 and $5,000) for fixed interest rate payments of 5.08% and 4.82%, respectively. The Company designated the interest rate swap as a cash flow hedge with any subsequent changes in value recorded in other comprehensive income beginning on the first settlement date, May 1, 2023. The Forbearance Agreement required the interest rate swaps to be terminated in January 2024.

Cash Flow Analysis

	September 30, 2024	September 30, 2023
	$	$
Cash flows provided by operating activities	(306)	133
Cash flows provided by (used in) investing activities	4,472	(557)
Cash flows used in financing activities	(4,074)	(3,080)
Net change in cash and cash equivalents during the period	92	(3,504)
Effect of foreign exchange on cash and cash equivalents	(550)	(95)
Cash and cash equivalents, beginning of the period	1,279	5,323
Cash and cash equivalents, end of the period	821	1,724

Operating Activities

During the nine months ended September 30, 2024, cash flows provided by operating activities reduced as compared to the prior year with $306 in operating cash outflows produced during the period compared to $133 cash inflow in the prior period. The reduction in operating cash flow is mainly driven by a reduction in cash flows generated from changes in net working capital.

Investing Activities

For the nine months ended September 30, 2024, cash flows provided by (used in) investing activities were $4,472, compared to ($557) for the comparable period. The Company received proceeds from the disposal of HealthTech of $4,038 in 2024, while in 2023 investment cash flows related to the purchase of equipment.

Financing Activities

For the nine months ended September 30, 2024, cash flows used by financing activities were $4,074 compared to $3,080 cash flows provided for the comparable period. The Company used the majority of the HealthTech proceeds to paydown the outstanding debt.

Outstanding Share Data

The following table sets forth the information relating to all issued and outstanding shares and dilutive securities as at September 30, 2024 and November 28, 2024.

	November 28, 2024	September 30, 2024
Share price - closing	$0.09	$0.15
Market capitalization (in thousands)	$1,424	$2,374
Outstanding
Common Shares	15,826,593	15,826,593
Warrants	12,593	12,593
Options	756,895	992,579

Commitments and Contractual Obligations

The Company has no significant commercial commitments or obligations other than for borrowings and contingent consideration previously disclosed, as well as for the leases of the facilities we currently occupy, as well as automobiles and office and computer equipment.

Contingencies

In the ordinary course of business, from time to time, the Company is involved in various claims related to operations, rights, commercial, employment or other claims. Although such matters cannot be predicted with certainty, management does not consider the Company's exposure to these claims to be material to these financial statements.

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements.

Related Party Transactions

Other than as disclosed below, Pluribus has not acquired any assets or received any services from any director, officer or Insider of Pluribus. Pluribus has no indebtedness owing to a related party of Pluribus or any Associate or Affiliate of Pluribus.

Miller Thomson LLP is a full-service national law firm in Canada and provides legal services to Pluribus. One of Pluribus' directors is a senior partner at this firm.

Waterstone Human Capital is an executive recruitment firm that has completed the placement of Pluribus' CFO and periodically does recruitment on an as needed basis. One of Pluribus' directors is a Managing Director at Waterstone Human capital.

One of Pluribus' directors was the Chairman, former CEO and a shareholder of Assured Software Limited ("Assured"). As part of the purchase consideration, the shareholders of Assured were compensated with Pluribus Class A Preferred Shares issued by Pluribus.

Excluding key management compensation as disclosed in Note 12 of the three and nine months ended September 30, 2024 and 2023 Condensed Financial Statements, there were no additional related party transactions during the period.

Subsequent Events

Sale of Digital Enablement and POWR

On October 11, 2024, the Company sold substantially all of the issued and outstanding fully-diluted shares of its wholly-owned subsidiaries, POWR Inc., Assured Software Ltd. and Pluribus Technologies Limited for an aggregate purchase price of $17,000 payable in cash, on a cash-free, debt-free basis. Certain proceeds were used to repay bank debt.

Amendment to the Forbearance Agreement

The Second Forbearance Agreement period was extended to November 29, 2024. As of the date hereof, the Company has not received an update from National Bank regarding the status of the Second Forbearance Agreement and whether it intends to further extend the term of the Second Forbearance Agreement beyond November 29, 2024. Refer to Debt Financing for further details.

Basis of Preparation and Significant Accounting Policies

The consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with IFRS as issued by the International Accounting Standards Board.

Our significant accounting policies are described in Note 3 of the audited consolidated financial statements as at December 31, 2023, which is available on SEDAR+ (www.sedarplus.ca). The policies applied in these consolidated financial statements are based on IFRS issued and outstanding as of the date the Board of Directors approved the consolidated financial statements.

Further Information

Additional information relating to the Company is available on the Company's website at www.pluribustechnologies.com.

Risks Factors

There are many risk factors facing companies involved in the technology and software industry. Risk management is an ongoing exercise upon which the Company spends a substantial amount of time. While it is not possible to eliminate all the risks inherent to the industry, the Company strives to manage these risks, to the greatest extent possible. The following risks are most applicable to the Company but may not be the only risks faced by the Company. Risks and uncertainties not presently known by the Company, or which are presently considered immaterial may also adversely affect the Company's business, projections, results of operations and/or conditions (financial or otherwise). The reader should understand that the sole purpose of discussing these risks and uncertainties is to alert the reader to factors that could cause actual results to differ materially from past results or from those described in forward-looking statements and not to describe facts, trends and circumstances that could have a favorable impact on our results or financial position.

No assurance that Pluribus will be able to obtain additional financial resources or maintain sufficient financing

We had negligible cash flow from operating, investing and financing activities for the nine months ended September 30, 2024. Continued negative or negligible operating cash flow may compromise our ability to make interest and principal payments on the Credit Agreement on a timely basis, or at all, and to execute our strategic plan. Until we are able to generate positive cash flow from operating activities over a sustained period, our ability to finance our operations will be dependent on our cash reserves and available credit facilities and, if required, our ability to obtain additional external financing. There can be no assurance that, if, as and when Pluribus seeks additional equity or debt financing, or other forms of financing, Pluribus will be able to obtain the additional financial resources required or be able to continue to successfully compete in its markets on favourable commercial terms or at all. Additional equity financings may result in substantial dilution to existing shareholders. Pluribus' existing debt facilities, including the Credit Agreement, and other financing arrangements, must be renewed on a periodic basis. There is no assurance Pluribus will be able to renew such facilities on competitive terms or at all. These facilities may contain restrictions on Pluribus' ability to, among other things, pay dividends, sell or transfer assets, incur additional debt, repay other debt, make certain investments or acquisitions, repurchase or redeem shares and engage in alternate business activities.

Uncertainty of Future Revenues

Although management is optimistic about Pluribus' prospects, there is no guarantee that expected outcomes and sustainable revenue streams will be achieved. In particular, its growth and prospects depend on its ability to expand its operation and grow its revenue streams whilst at the same time maintaining effective cost controls. Any failure to expand is likely to have a material adverse effect on Pluribus' business, financial condition and results.

Breach of Covenants under National Bank Credit Facility

During Q4 2023, the Company determined that it was not in compliance with its Total Debt to EBITDA and Fixed Charge Coverage ratio covenants under the FY2022 Credit Facility and, therefore, the entire balance ($21,868) of this loan was classified as current on the Balance Sheet. Breach of covenants can result in the lender exercising its right, among others, to request immediate repayment of amounts borrowed, which would have a negative effect on operations and the Company's financial condition. The Company is currently in discussions with National Bank regarding potential steps to rectify this default, including further amendments to the terms of the covenants under the facility. The Company's ability to become compliant with financial covenants in the next twelve months relies on its ability to successfully generate revenue with existing and new customers and maintain profitability. There can be no assurances that the Company and National Bank agree on such terms or that the Company achieves such profitability. Such default also affects its ability to borrow additional funds and/or the operations of the Company.

The Company is currently in discussions with National Bank regarding the provision of loans under the revolving credit facility with National Bank in light of the breach of covenants under the FY2022 Credit Facility described above. As part of this process, National Bank intends to engage a financial advisor to conduct a review of the Company's business operations. There can be no assurances that National Bank will agree to provide loans to the Company under the revolving credit facility, which could have an adverse effect on the Company and its operations.

Pluribus' May Default On Its Obligations to Pay its Indebtedness

In addition to the aforementioned default, continued negative operating cash flow may compromise our ability to make interest and principal payments on the Credit Agreement on a timely basis, or at all, and to execute our strategic plan. Any default under the agreements governing the Pluribus' indebtedness, including a default under the Credit Agreement that is not waived by the required lenders, and the remedies sought by the holders of such indebtedness, could have a material adverse effect on the Pluribus' business, prospects, financial condition and results of operations. If Pluribus is unable to generate sufficient cash flow and is otherwise unable to obtain funds necessary to meet required payments of principal, premium, if any, and interest on its indebtedness, or if Pluribus otherwise fails to comply with the various covenants, including financial and operating covenants in the instruments governing its indebtedness Pluribus could be in default under the terms of the agreements governing such indebtedness. In the event of such default, Pluribus may be forced to divest certain portfolio businesses, the holders of such indebtedness may be able to cause all of Pluribus' available cash flow to be used to pay such indebtedness and, in any event, could elect to declare all the funds borrowed thereunder to be due and payable, together with accrued and unpaid interest, the lenders could institute foreclosure proceedings against Pluribus' assets and/or Pluribus could be forced into bankruptcy or other involuntary insolvency proceedings.

If Pluribus' operating performance declines, it may in the future need to obtain waivers from the required lenders under its debt agreements to avoid being in default. If Pluribus breaches its covenants under such agreements and seeks a waiver, it may not be able to obtain a waiver from the required lenders. If this occurs, Pluribus would be in default under such debt agreements, the lenders could exercise their rights, as described above, and Pluribus could be forced into bankruptcy or other involuntary insolvency proceedings.

The price of the securities of Pluribus may fluctuate significantly, which may make it difficult for holders of securities of Pluribus to sell their securities at a time or price they find attractive

Pluribus' stock price may fluctuate significantly as a result of a variety of factors, many of which are beyond its control. These factors include:

actual or anticipated quarterly fluctuations in its operating results and financial condition;
changes in financial estimates or publication of research reports and recommendations by financial analysts with respect to it or other financial institutions;
reports in the press or investment community generally or relating to Pluribus' reputation or the industry in which it operates;
strategic actions by Pluribus or its competitors, such as acquisitions, restructurings, dispositions, or financings;
fluctuations in the stock price and operating results of Pluribus' competitors;

failure by Pluribus to meet obligations when they become due;
future sales of Pluribus' equity or equity-related securities;
proposed or adopted regulatory changes or developments; and
domestic and international economic factors unrelated to Pluribus' performance.

In addition, in recent years, the stock market in general has experienced extreme price and volume fluctuations. This volatility has had a significant effect on the market price of securities issued by many companies, including for reasons unrelated to their operating performance. These broad market fluctuations may adversely affect Pluribus' stock price, notwithstanding Pluribus' operating results. Pluribus expects that the market price of Pluribus shares will fluctuate and there can be no assurances about the market prices of such shares.

In the past, following periods of volatility in the trading price of a company's securities, securities class action litigation has been brought against that company. If our share price is volatile, we may become the target of securities litigation. Securities litigation could result in substantial costs and divert management's attention and resources from our business and could have an adverse effect on our business, financial condition and results of operations.

Ability to Complete Favourable Acquisitions

As part of Pluribus' future business strategy, it may attempt to acquire businesses that it believes are a strategic fit with its business, such as eLearning and technology platforms. Pluribus may not be able to complete such acquisitions on favourable terms, if at all. Any future acquisitions may result in unforeseen operating difficulties and expenditures and may absorb significant management attention that would otherwise be available for ongoing development of its business. Since Pluribus may not be able to accurately predict these difficulties and expenditures, these costs may outweigh the value it realizes from a future acquisition and any acquisition Pluribus completes could be viewed negatively by its advertisers. Future acquisitions could result in an issuance of securities that would dilute shareholders' ownership interest, the incurrence of debt, contingent liabilities, amortization of expenses related to other intangible assets, and the incurrence of large, immediate write-offs.

Strategic Review

In November 2023, the Company announced a review and evaluation of strategic alternatives that may be available to the Company to further enhance the Company's growth, development and prosperity in the short and long terms with the goal of maximizing shareholder value. The Company has established a Special Committee of the Board of Directors for such purpose and has engaged Canaccord Genuity as its strategic advisor. The Special Committee will, among other things, explore the viability of raising capital through debt financing/refinancing, equity rights offerings, and the sale of core and/or non-core assets. There can be no assurances that the strategic review process will result in a transaction. Any such transaction may not have its intended outcome and it could have an adverse effect on our business, financial condition and results of operations. This process may also result in unforeseen operating difficulties and expenditures and may absorb significant management attention that would otherwise be available for ongoing development of its business.

Dependence on Third Parties, Including Users and Content Providers

Pluribus is reliant, to an extent, on third parties, including content providers, users, and affiliate network publishers. Pluribus' success is partially dependent on its ability to attract and retain quality content providers. There can be no assurance that these business relationships will continue to be maintained or that new ones will be successfully formed. A breach or disruption in these relationships or a failure to engage contractors could be detrimental to the future business, operating results, and/or profitability of Pluribus. Moreover, Pluribus' financial performance will be significantly determined by its success in adding, retaining, and engaging active users of its technology network. If users do not perceive Pluribus' content as interesting, unique and useful, Pluribus may not be able to attract or retain additional users, which could adversely affect the business.

Brand Development

The brand identity that Pluribus has developed has significantly contributed to the success of its business. Maintaining and enhancing the "Pluribus" brand is critical to expanding Pluribus' user base, network of publishers, and advertisers. Pluribus believes that the importance of brand recognition will increase due to the relatively low barrier to entry in the industry. The "Pluribus" brand may be negatively impacted by a number of factors, including software malfunctions, delivery of incorrect information, and data privacy and security issues. If Pluribus fails to maintain and enhance its brand, or if Pluribus incurs excessive expenses in this effort, it could have a material adverse effect on Pluribus' prospects, business, financial condition, and results of operations. Maintaining and enhancing the "Pluribus" brand will depend largely on Pluribus' ability to continue to provide high-quality products and services, which Pluribus may not continue to do successfully.

Key Personnel

Pluribus currently depends on the continued services and performance of its key personnel. The loss of key personnel, including members of management as well as other key personnel, could disrupt Pluribus' operations and have an adverse effect on its business and customer relationships. Additionally, Pluribus' success depends on the efforts and abilities of management to attract and retain qualified personnel to manage operations and growth. Failure to attract key individuals may have an adverse effect on the business, operations, and results.

Governmental Regulation

Pluribus is subject to general business regulations and laws. Existing and future laws and regulations may impede Pluribus' growth strategies. These regulations and laws may cover taxation, privacy, data protection, pricing, content, copyrights, distribution, consumer protection, web services, websites, and the characteristics and quality of products and services. Unfavourable changes in regulations and laws could decrease demand for Pluribus' technology platforms and increase its cost of doing business or otherwise have a material adverse effect on Pluribus' reputation, popularity, results of operations, and financial condition.

Misappropriation of Pluribus Intellectual Property

Protection of Pluribus' intellectual property, including trademarks and domain names are important to its success. Pluribus currently protects its intellectual property rights by relying on common law rights. These steps may not be sufficient to prevent the misappropriation of Pluribus' proprietary information or deter independent development of similar products and services by others.

Competition

The technology industry is highly competitive and quickly changing. Pluribus faces competition from a variety of technology platforms all over the world. Some of Pluribus' current and potential competitors have significantly greater resources and better competitive positions in certain markets than Pluribus does. These factors may allow Pluribus' competitors to respond more effectively than Pluribus to new or emerging technologies and changes in market requirements, including changes to government regulation.

There is no certainty that Pluribus' competitors will not develop similar or superior services which may render Pluribus uncompetitive. Certain competitors have more established relationships and greater financial resources, and they can use their resources against Pluribus in a variety of competitive ways, including by making acquisitions, investing aggressively in research and development, and competing aggressively for advertisers, technologies, intellectual property rights, websites, and applications. If competitors are more successful than Pluribus in developing compelling products and engaging content or in attracting and retaining users, advertisers, and intellectual property rights, Pluribus' revenues, growth rates, and the value of its digital assets could be negatively affected. There is no assurance that Pluribus will be able to maintain its position in the marketplace.

Reliance on Third-Party Owned Communication Networks

The delivery of Pluribus' products and services and a significant portion of Pluribus' revenues are dependent on the continued use and expansion of third party owned communication networks, including wireless networks and the internet. No assurance can be given of the continued use and expansion of these networks as a medium of communications for Pluribus.

Effective delivery of Pluribus' products and services through the internet is dependent on Internet service providers continuing to expand high-speed internet access, maintaining reliable networks with the necessary speeds, data capacity and security, and developing complementary products and services for providing reliable and timely access and services. Changes in access fees (for example, revising the application of bandwidth caps or other metered usage schemes) to users may adversely affect the ability or willingness of users to access Pluribus' content. Changes in access fees to distributors, such as Pluribus or its service providers, or a departure from "net neutrality" (the principle that all forms of internet traffic (including video, voice, and text) are subject to equal treatment in transmission speed and quality) or its governing regulations, could result in increased costs to Pluribus. All of these factors are out of Pluribus' control and manifestation of any of them could ultimately have a material adverse effect on Pluribus' prospects, business, financial condition or results of operations.

In addition, increasing traffic, user numbers or bandwidth requirements may result in a decline in internet (or a subset thereof, including in particular mobile internet) performance and/or reliability. Internet outages, delays or loss of network connectivity may result in partial or total failure of Pluribus' services, additional and unexpected expenses to fund further product development or to add programming personnel to complete a development project, or the loss of revenue

because of the inability of users to access Pluribus' network of digital properties, any of which could have a material adverse effect on Pluribus' prospects, business, financial condition or results of operations.

Security of Software Intellectual Properties

Pluribus cannot guarantee absolute protection against unauthorized attempts to access its information technology systems, including malicious third-party applications or denial of service attacks that may interfere with or exploit security flaws in its software intellectual properties. Viruses, worms, and other malicious software programs could jeopardize the security of information stored in a user's computer or in Pluribus' computer systems or attempt to change the internet experience of users by interfering with Pluribus' ability to connect with a user. If any compromise to Pluribus' security measures were to occur and Pluribus' efforts to combat this breach were unsuccessful, Pluribus' reputation may be harmed leading to an adverse effect on Pluribus' financial condition and future prospects.

Ability to acquire and integrate target companies at reasonable valuations

Over the years, Pluribus has expanded its business through acquisitions. Pluribus may continue to search to acquire businesses and technologies and form strategic alliances. However, businesses and technologies may not be available on terms and conditions Pluribus finds acceptable. Pluribus risks spending time and resources, including financial resources, investigating and negotiating with potential acquisition or alliance partners, but not completing transactions. In the event that an acquired business or technology or an alliance does not meet Pluribus' expectations, its results of operations may be adversely affected.

Loss of Material Customer

The loss of a material customer could negatively impact profitability and Pluribus' ability to continue as a going concern. Pluribus' customers may choose to terminate their contracts, or reduce their relationships with Pluribus, on a relatively short time frame and for any reason. A loss of one of its material customers could have a material adverse effect upon the business and results of operations of Pluribus.

Ability to maintain licenses and other regulatory requirements for portfolio companies to do business

Pluribus' portfolio companies operate in a number of different regions and industries that require ongoing licensing and compliance, raising the risk that Pluribus may not remain compliant as its business continues to grow and operate and expand in various markets.

Pluribus' portfolio companies have entered into license agreements with third parties and may need to obtain additional licenses from existing licensors and other third parties to advance or allow commercialization of its solutions. It is possible that Pluribus may be unable to obtain additional licenses at a reasonable cost or on reasonable terms, if at all. In that event, Pluribus may be required to expend significant time and resources to redesign its solutions or to develop or license replacement technology, all of which may not be feasible on a technical or commercial basis. Disputes may arise regarding intellectual property or technology, including software and data that is subject to a licensing agreement, including the scope of rights granted under such license agreements and other interpretation-related issues.

Ability to maintain security and privacy protections in an environment with increasing hacking, ransomware attacks and online fraud

Pluribus cannot guarantee absolute protection of its IT environment and sensitive data in an environment with increasing hacking, ransomware attacks and online fraud. Pluribus relies on digital and internet technologies to conduct and expand its operations, including reliance on information technology to process, transmit and store sensitive and confidential data. As a result, Pluribus or its customers are exposed to risks related to cybersecurity. Such risks may include unauthorized access, use, or disclosure of sensitive information, corruption or destruction of data, or operational disruption resulting from system impairment. Third parties to whom Pluribus outsources certain functions, or with whom their systems interface, are also subject to the risks outlined above and may not have or use appropriate controls to protect confidential information. A breach or attack affecting a third-party service provider or partner could harm Pluribus' business even if Pluribus does not control the service that is attacked. Pluribus' operations depend, in part, on how well it protects networks, equipment, information technology systems and software against damage from a number of threats, including, but not limited to damage to hardware, computer viruses, hacking and theft. Pluribus' operations also depend on the timely maintenance, upgrade and replacement of networks, equipment, information technology systems and software, as well as pre-emptive expenses to mitigate the risks of failures. A compromise of Pluribus' information technology or confidential information may result in negative consequences.

Ability to manage a complex portfolio of companies effectively

As Pluribus continues to grow, managing the growing number of portfolio companies will be a risk and challenge and require Pluribus to build processes, controls and increasingly leverage portfolio company management.

Pluribus has expanded its operations significantly since inception and anticipate that further significant expansion will be required to achieve its business objectives. The growth and expansion of its business and product offerings places a continuous and significant strain on its management, operational, and financial resources. Any such future growth would also add complexity to and require effective coordination throughout the organization. To manage any future growth effectively, Pluribus must continue to improve and expand its information technology and financial infrastructure, its operating and administrative systems and controls, and its ability to manage headcount, capital and processes in an efficient manner. Pluribus may not be able to successfully implement improvements to these systems and processes in a timely or efficient manner, which could result in additional operating inefficiencies and could cause costs to increase more than planned. If Pluribus does increase operating expenses in anticipation of the growth and this growth does not meet expectations, operating results may be negatively impacted. If Pluribus is unable to manage future expansion, its ability to provide high quality products and services could be harmed, which could damage its reputation and brand and may have a material adverse effect on its business, operating results, and financial condition.

Ability to scale its management team to support growth

Pluribus relies heavily on the expertise and experience of its management team for successful growth. Pluribus cannot grow without scaling its management team. Pluribus must be able to retain and further expand the skillset and expertise of its management team in order to successfully grow. Inability to do that would reduce growth and result in poorer financial results.

Additionally, Pluribus' success depends to a significant extent on the continued services of its senior management and other members of management. If any member of its senior management team does not continue in their present positions, Pluribus' business may suffer. Because of the nature of its business, Pluribus is highly dependent upon attracting and retaining qualified personnel. While it has a strong record of employee retention, there is still significant competition for qualified personnel in the industry. Therefore, Pluribus may not be able to attract and retain the qualified personnel necessary for the development of its business.

Currency fluctuations

Pluribus' reporting currency is Canadian dollars, but an increasing proportion of Pluribus' revenue may be earned, and expenses may be incurred in other currencies, including the US dollar. The movement of the US dollar against the Canadian dollar could have a material adverse effect on Pluribus' prospects, business, financial condition, and results of operation.

Historical losses and negative operating cash flows

Pluribus has a history of operating losses and may generate continued operating losses and negative cash flows in the future while it carries out its current business plan to further develop and expand its network of eLearning and technology platforms. Pluribus has made significant up-front investments in acquiring significant eLearning and technology platforms, marketing, and general and administrative expenses in order to rapidly develop and expand its business. The successful development and commercialization of these operations will depend on a number of significant financial, logistical, technical, marketing, legal, competitive, economic and other factors, the outcome of which cannot be predicted. There is no guarantee that Pluribus' operations will be profitable or produce positive cash flow or that Pluribus will be successful in generating significant revenues in the future or at all. While Pluribus can utilize cash and cash equivalents to fund its operating and growth expenditures, it does not have access to significant committed credit facilities or other committed sources of funding. Pluribus' inability to ultimately generate sufficient revenues to become profitable and have positive cash flows could have a material adverse effect on its prospects, business, financial condition, results of operations or overall viability as an operating business.

Impact of COVID-19

In early 2020, the outbreak of the recent novel strain of coronavirus ("COVID-19") has resulted in governments worldwide enacting emergency measures to combat the spread of the virus. These measures, which include the implementation of travel bans, self-imposed quarantine periods and social distancing, have caused disruption to businesses globally; as a result, there is significant economic uncertainty and the effectiveness of government and central bank interventions to stabilize economic conditions remains uncertain. There is uncertainty around the duration of COVID-19 and its impact on future business conditions. If the outbreak were to cause disruption to the Company's supply chain or its service capabilities in the future, it would have a negative impact on revenue, which could be material. In addition, any material negative impact on revenue would impact profitability, as well as liquidity and capital resources.

Certain segments of the Company were impacted however as restrictions are being eased, management expects the results of operations to improve as customers and prospects begin to have normal budgets for technology and services. COVID-19 did not have a material impact on the operations or financial results of the Company for the three and nine months ended September 30, 2024 and 2023.

Inflation and Rising Interest Rates

The Company's operations could be affected by general economic conditions should interest rates, inflation or the unemployment level reach levels that influence consumer trends and spending and, consequently, impact the Company's sales and profitability.

The Company may be exposed to interest rate risk as rising inflation rates in North America provide incentive to implement monetary policy raising interest rates, potentially decreasing access to credit. There can be no assurance that we will be able to access additional financing when we need it, or on terms we find acceptable or favorable. If we are unable to obtain financing to support ongoing operations or to fund necessary expenditures, it could have a material adverse effect on our ability to carry out our business strategy, our revenue and our financial condition. Based on the amount owing as at September 30, 2024, a 1% change in the CDOR and SFOR rates, with all other variables held constant, would change finance costs and income before taxes by $190 on the loans.

The events arising from the Russian invasion of Ukraine and the responses of governments around the world are likely to have a significant effect on the global economy.

Although the Company does not have direct customers or operations based in Russia or Ukraine, a prolonged armed conflict between the two countries and the resulting imposition of sanctions and counter sanctions have disrupted supply chains and caused instability in the global economy. The ongoing conflict could result in the imposition of future economic sanctions, which may have a greater adverse effect on economic markets and could result in an even greater impact related to global supply and pricing of electricity and materials. To date, the Russia-Ukraine conflict has not had a material impact on the operations or financial results of the Company.

Potential Secondary Market Liability

Pursuant to amendments to the Securities Act (Ontario) which took effect on December 31, 2005 (and similar legislation that was enacted in most of Canada's other provinces), a new regime of statutory provisions governing the civil liability of public companies (and of their directors, officers, influential persons, experts and spokespersons) was adopted to give protection to investors who buy or sell corporate securities in the secondary markets during a period when a public company's corporate disclosure obligations are not being met.

Although the statutory secondary market liability provisions that were adopted at the end of 2005 speak of a statutory "right" of action, the prospective plaintiff can only commence a proceeding under these provisions with the leave (i.e. 40 permission) of the court. Leave will be granted only if the court is satisfied that: (i) the action is being brought in good faith; and (ii) there is a "reasonable possibility" that the action will be resolved in favour of the plaintiff.

Economic Recession

Adverse changes in the economy could negatively impact the Company's business. Future economic distress may result in a decrease in demand for products, which could have a material adverse impact on the Company's operating results and financial condition. Uncertainty and adverse changes in the economy could also increase the cost and decrease the availability of sources of financing and increase the Company's exposure to material losses from bad debts, any of which could have a material adverse impact on the financial condition and operating results of the Company.

Stability of the Global Banking System

The stability of the global banking system may increase the cost and decrease the availability of debt financing to the Company, which may impact the Company's ability to complete acquisitions in the future or operate as a going concern when its existing debt financing is up for renewal.

Risks Associated with The Learning Network

Revenue tied to course creation: The Learning Network is heavily dependent on the revenue it generates resulting from course creation. This over-dependence can result in significant revenue swings, either in an upward or downward trajectory, quarter over quarter.

Qualified Learning and Development Contractors: As revenues increase over time, the Learning Network might have difficulties finding qualified learning and development contractors to service its customer base.

High Local Customer Concentration: A heavy concentration on the Canadian market for services might create a high local customer concentration for the Learning Network.

UK Revenue: The Learning Network's revenue in the United Kingdom is driven largely by regulatory requirements which are continuously subject to change. There can be no assurances that a change in the regulatory requirements in the United Kingdom will not result in a downturn in The Learning Networks revenue.

Competition: The LMS market is highly competitive, both with respect to larger and smaller competitors. The Learning Network might be susceptible to losing existing customers to its competitors.

Risks Associated with the Kesson Group

International Recruiting Markets: Kesson is highly dependent on international recruiting markets which can create revenue variability from time to time.

Recruiting Platform: Kesson's recruiting platform is dependent on each teacher's ability to travel internationally. There is additional risk to Kesson associated with foreign changes to immigration rules and restrictions on travel (such as COVID-19).

Tutoring Business: Kesson's online tutoring sales in the United States market are somewhat dependent on government programs to support learning, which are constantly subject to change.

Teacher Certificate Programs: Kesson's teacher certification program is dependent on ensuring its programs maintain provincial and state requirements. there can be no assurances that such programs will maintain provincial and state requirements.

Additional risk factors relevant to the Company are included in the Filing Statement dated January 7, 2022 which is available under Pluribus Technologies Corp.'s profile on www.sedarplus.ca.

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Pluribus Technologies Corp. — Management Reports 2024

48115_rns_2024-11-28_43e24b06-046d-47bf-af02-fdedd091e1b1.pdf

Pluribus Technologies Corp.

General Information

Cautionary Note Regarding Forward-Looking Statements

Non-IFRS Financial Measures

Company Overview

Sale of HealthTech

Sale of Digital Enablement and POWR

eLearning

eCommerce

Third Quarter Business Updates

Overall Performance from Continuing Operations

eLearning

The Learning Network

Kesson Group

eCommerce

Social5

Corporate

Outlook

Results of Operations

Quarterly Results of Operations

Revenue

Cost of revenue

Operating expenses

Sales and marketing

Research and development

General and administrative

Non-Operating Expenses

Acquisition costs

Amortization and depreciation

Impairment of goodwill and intangible assets

Share-based compensation

Loss (gain) on revaluation of contingent consideration

Finance expense, net

Foreign Exchange loss

Income Tax Expense (Recovery)

Net income (loss) for the period

Discontinued operations

Non-IFRS Financial Measures

Liquidity and Capital Resources

Strategic Review

Going Concern Uncertainty

Debt Financing

FY2022 Credit Facility

Term Loans – Refinance

Term Loans – Delayed Draw

Revolving Line of Credit

Derivative liability

Cash Flow Analysis

Operating Activities

Investing Activities

Financing Activities

Outstanding Share Data

Commitments and Contractual Obligations

Contingencies

Off-Balance Sheet Arrangements

Related Party Transactions

Subsequent Events

Sale of Digital Enablement and POWR

Amendment to the Forbearance Agreement

Basis of Preparation and Significant Accounting Policies

Further Information

Risks Factors

No assurance that Pluribus will be able to obtain additional financial resources or maintain sufficient financing

Uncertainty of Future Revenues

Breach of Covenants under National Bank Credit Facility

Pluribus' May Default On Its Obligations to Pay its Indebtedness

The price of the securities of Pluribus may fluctuate significantly, which may make it difficult for holders of securities of Pluribus to sell their securities at a time or price they find attractive

Ability to Complete Favourable Acquisitions

Strategic Review

Dependence on Third Parties, Including Users and Content Providers

Brand Development

Key Personnel

Governmental Regulation

Misappropriation of Pluribus Intellectual Property

Competition

Reliance on Third-Party Owned Communication Networks

Security of Software Intellectual Properties

Pluribus Technologies Corp. Management Reports 2024