Predictmedix AI Inc. - Management Reports 2020

PREDICTMEDIX INC. (Formerly, Cultivar Holdings Inc.)

MANAGEMENT DISCUSSION AND

ANALYSIS

For the year ended January 31, 2020

PREDICTMEDIX INC.

MANAGEMENT DISCUSSION AND ANALYSIS

For the Year Ended January 31, 2020

(Information as at June 1, 2020 unless otherwise noted)

Introduction

Management's Discussion and Analysis ("MD&A") is intended to help the reader understand Predictmedix Inc. (the “Company”) consolidated financial statements for the year ended January 31, 2020. This MD&A should be read in conjunction with the consolidated financial statements of the Company and the notes thereto for the year ended January 31, 2020. The effective date of this report is June 1, 2020. The consolidated financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”). Unless expressly stated otherwise, all financial information is presented in Canadian dollars. This MD&A contains certain forward-looking information and involves risks and uncertainties, including but not limited to, those described in the “Risk Factors” section.

Forward-Looking Statements

Certain statements contained in the following MD&A constitute forward-looking statements (within the meaning of the Canadian securities legislation and the U.S. Private Securities Litigation Reform Act of 1995) that involve risks and uncertainties. Forward-looking statements are frequently, but not always, identified by words such as "expects", "anticipates", "believes", "intends", "estimates", "potential", "possible" and similar expressions, or statements that events, conditions or results "will", "may", "could" or "should" occur or be achieved. The forward-looking statements may include statements regarding work programs, capital expenditures, timelines, strategic plans, market price of commodities or other statements that are not statement of fact. Forward-looking statements are statements about the future and are inherently uncertain, and actual achievements of the Company may differ materially from those reflected in forwardlooking statements due to a variety of risks, uncertainties and other factors. For the reasons set forth above, investors should not place undue reliance on forward-looking statements. Important factors that could cause actual results to differ materially from the Company’s expectations include uncertainties involved in disputes and litigation, fluctuations in commodity prices and currency exchange rates; uncertainty of estimates of capital and operating costs, recovery rates, production estimates and economic return; the need for cooperation of government agencies; the need to obtain additional financing and uncertainty as to the availability and terms of future financing; uncertainty related to the completion of the amalgamation.

It is the Company’s policies that all forward-looking statements are based on the Company’s beliefs and assumptions which are based on information available at the time these assumptions are made. The forward- looking statements contained herein are as of January 31, 2020 and are subject to change after this date, and the Company assumes no obligation to publicly update or revise the statements to reflect new events or circumstances, except as may be required pursuant to applicable laws.

Although management believes that the expectations represented by such forward-looking information or statements are reasonable, there is significant risk that the forward-looking information or statements may not be achieved, and the underlying assumptions thereto will not prove to be accurate. Forward-looking information or statements in this MD&A include, but are not limited to, information or statements concerning our expectations regarding the ability to raise additional funds, results of the research and development performed in relation to the products and services of the Company, positive result due to the change in business model, possibility of entering into strategic alliance, distribution agreements and other arrangements to market their products and services and possibility of producing viable products through the use of the new technologies purchased and developed.

Actual results or events could differ materially from the plans, intentions and expectations expressed or implied in any forward-looking information or statements, including the underlying assumptions thereto, as a result of numerous risks, uncertainties and factors including: the possibility that opportunities will arise that require more cash than the Company has or can reasonably obtain; dependence on key personnel; dependence on corporate collaborations; potential delays; uncertainties related to early stage of technology and product development; uncertainties as to fluctuation of the stock market; uncertainties as to future expense levels and the possibility of unanticipated costs or expenses or cost overruns; and other risks and uncertainties which may not be described herein. The Company has no policy for updating forward looking information beyond the procedures required under applicable securities laws.

CORPORATE OVERVIEW

Admiral Bay Resources Inc. (“Admiral”) was incorporated in British Columbia on September 3, 1987.

Effective September 23, 2019, Admiral was part of a three-cornered amalgamation among Admiral, 2693980 Ontario Inc. (a wholly owned subsidiary of Admiral) and Cultivar Holdings Ltd. (the “Transaction”). Admiral completed the acquisition of all the issued and outstanding shares of Cultivar Holdings Ltd. by way of a three-cornered amalgamation, pursuant to which 2693980 Ontario Inc., amalgamated with Cultivar Holdings Limited. Pursuant to the Transaction, each registered shareholder of Cultivar Holdings Ltd. received one (1) common share in the capital of the Admiral for each common share held, resulting in the issuance of an aggregate of 97,439,900 common shares to Cultivar Holdings Ltd. Shareholders. As part of the Transaction, warrants of Cultivar Holdings Ltd. were replaced with common share purchase warrants of Admiral. In addition, 500,000 Admiral shares were set aside to be issued to members of Cultivar Holdings Ltd. management team upon the final approval of Jamaica's Cannabis Licensing Authority for the licenses involved in the cultivation, processing, retail and transportation of cannabis.

At completion of the transaction, Admiral changed its name to Cultivar Holdings Inc. (the “Company”). On April 9, 2020, the Company announced that it has completed its name change from "Cultivar Holdings Inc." to "Predictmedix Inc." (the "Name Change"). The CUSIP number assigned to the Company's common shares following the name change is CUSIP 74040L100 (ISIN CA74040L1004). In connection with the Name Change, the Company's trading symbol, as listed on the CSE and the OTCQB have also been changed from "CULT" to "PMED", and from "CVRHF" to "PMEDF", respectively.

The Company, through its subsidiaries, is in the business of development of cosmetic and edible product lines, as well as investment in technology to detect if an individual is under the influence of cannabis and to predict substance addiction. On March 30, 2020, the Company announced that it has sold and discontinued its interests in its marijuana services and products. (See Subsequent Events Note 18)

The Company’s corporate head office is located at 77 King Street W, Suite 3000, Toronto, Ontario, Canada, M5K 1G8.

On February 15, 2018, the Company had acquired a 49% interest in a newly incorporated Cultivar JA Limited, (“CJA”) a corporation incorporated under the laws of Jamaica. The remaining 51% interest is owned by local Jamaican business partners. On March 30, 2020, the Company announced that the Company has entered into a sale agreement with respect to its 49% interest in Cultivar JA Limited and discontinued all interests in its marijuana services and products. Furthermore, the Company cancelled 4,000,000 common shares owned by the Jamaican partners and completely exited the cannabis business.

https://investorintel.com/sectors/agribusiness-mmj/agbusiness-mmj-news/cultivar-holdings-inc-enhances-focuspredictmedix-technologies-exits-jamaican-cannabis-cultivation-business/

On July 16, 2018 the Company had acquired a 100% interest in a newly incorporated CannIP Holdings Inc. (formerly 2639745 Ontario Inc.) (“Cann”) a corporation incorporated under the laws of the province of Ontario. Cann is engaged in the development of cosmetic and edible product lines, as well as investment in technology to detect an individual influence of cannabis. The Company did a one for one share exchange with Cann and issued 29,800,000 common shares to the shareholders of Cann.

The company has post year end divested from the cannabis sector and is focused solely on artificial intelligence (“AI”) technologies which are targeting two specific areas: 1) Impairment and 2) Healthcare. The company has bolstered its advisory board by bringing on board Mr. Kapil Raval as the chairman of the board. Mr. Raval is a subject matter expert in AI and currently serves as the director of business development at Microsoft for AI, for several of their AI related initiatives globally. Furthermore, the company has announced appointment of several global clinical experts to the board as it expands further into the healthcare segment.

Impairment: The company is focused on developing AI powered technologies for workplace and law enforcement to identify cannabis and alcohol impairment.

The legalization of cannabis has brought upon the issue of cannabis impairment to the forefront both for law enforcement agencies along with the workplace. Moreover, in several international jurisdictions with tropical climate, cannabis does grow like a “weed” and is in fact a cheaper alternative to alcohol. As such cannabis impairment is turning out to be a universal problem but there is a complete lack of tools to identify cannabis impairment.

Currently, companies are in the process of trying to develop breathalyzers for THC (Tetrahydrocannabinol), the psychoactive ingredient in cannabis. However, the biggest drawback with THC breathalyzers is the lack of correlation with impairment which has been brought up in several studies conducted to date. Furthermore, breathalyzer technology (cannabis or alcohol) is not suited for use at the workplace.

The Company has developed a technology to detect drug impairment using proprietary Artificial Intelligence (AI) technology algorithms with a decision-making ability to identify if someone is driving under the influence of cannabis and alcohol. The AI algorithms use several unique data points with facial and voice recognition to identify impairment. Applications for detecting drug impairment can range from roadside impairment tests to workplace safety. We have filed patents to protect our technology and are currently patent pending; these are effectively with the first set of patents in the world that incorporate and utilize AI to detect impairment. The Company is in the process of completing a study with over 3500 participants, which will further solidify our technology.

Predict MEDiX signed a JV with Tech Mahindra (subsidiary of Mahindra Group) to allow them to sell our drug impairment testing technology to their clients. Tech Mahindra was rated ranked 15th globally in Forbes digital 100; the top 100 public companies shaping the digital economy (which also included Google and Amazon). They are a provider of information technology, networking technology solutions, integrated engineering solutions and business process outsourcing to various industries. Tech Mahindra had $4.77 Billion (USD) of revenue in 2018 with a current market capitalization of over $11 Billion (USD).

Predict MEDiX has also signed a MOU with Hindalco Industries for conducting pilot studies using our proprietary drug impairment detection technology to detect impairment among their employees and also to explore business opportunities together. Hindalco Industries is one of the largest aluminium and copper manufacturing company globally and a subsidiary of the Aditya Birla Group; an Indian Multinational Conglomerate with operations in 35 countries and over $44 Billion (USD) in revenue. Hindalco is one of the largest aluminum rolling companies in the world with revenue exceeding $18 Billion (USD) in 2018. The company has started a pilot with Hindalco Industries of impairment technology in April 2020 based on the positive outcomes that were identified as part of the impairment study.

We will license our software to two distinct markets; law enforcement agencies and a variety of industries that are concerned about impairment in the workplace such as manufacturing, mining, and aviation. Our partnerships with Tech Mahindra and Hindalco Industries Ltd will be of immense value in marketing to the workplace related markets.

Healthcare: The company is developing AI based solutions to mass screen for infectious diseases and mental health disorders.

The two major infectious diseases the company is addressing are influenza and COVID-19. The COVID19 pandemic has turned into a threat for global security and economic stability, resulting in unprecedented job losses not seen since the great depression. Identification and tracking of an infectious disease or an outbreak of a global pandemic is a critical element of controlling the spread of disease across geographical areas. Furthermore, infectious diseases such as COVID-19 are likely to return in waves until there is mass vaccination or development of population level immunity. As such, there is a significant urgent need to have mass screening technologies which can identify potential COVID-19 cases without the need for human intervention and can be deployed in places where there is movement of large numbers of people. For instance, but not limited to, healthcare, transit hubs, airports, malls, shopping centers, casinos, concerts, arenas and office buildings. One of the primary factors leading to the outbreak of COVID-19 virus has been the relative lack of rapid screening tools for the masses. The lack of such tools has resulted in a failed containment effort which led to a global pandemic and an unprecedented economic disruption. After COVID-19, the company aims to focus on influenza with the mass screening AI technology. According to World Health Organization, Influenza is a serious global health threat that impacts all countries: every year, there are an estimated 1 billion cases, 3-5 million severe cases, and 290 000-650 000 influenza-related respiratory deaths worldwide

The company has developed a proprietary technology (patent pending) to screen for potential cases of COVID-19 and other related infectious diseases. There is no need for any bodily fluids and there is no human exposure as the screening is carried out using multispectral cameras which can be installed at any facility. The company has filed a patent for the technology.

The artificial intelligence ("AI") powered technology utilizes multispectral imaging with a focus on visual spectral imaging along with infrared thermography to identify cases which are suspected of COVID-19. The AI technology monitors and identifies potential presence of COVID-19 associated symptoms such as fatigue, headache, coughing, sneezing, blood flow, sweat gland activation, metabolism, fever along with

other key determinant factors. The technology can be deployed using multispectral cameras in facilities where there is large movement of people to identify potential COVID-19 cases and limit exposure, thereby limiting infection. The data collected is brought into a central server / cloud for analysis and alerts are sent in case of a positive detection.

In May 2020, the company announced deployment of its AI mass screening technology for COVID-19 with Max Healthcare. Max Healthcare is one of South Asia's leading comprehensive provider of standardized, seamless and international-class healthcare services. It is committed to the highest standards of medical and service excellence, patient care, scientific and medical education. Max Healthcare has 14 hospitals in India, offering services in over 30 medical disciplines. Max Healthcare has a base of over 3,000 doctors, 10,000 employees and over 2.2 million patients from over 80 countries, across its network of 14 hospitals.

In May 2020, the company has also announced execution of a major sales contract with Juiceworks Exhibits ("Juiceworks"), a full-service design and build company that creates brand experiences for leading brands across North America with operations both in Canada and the USA. Utilizing the company’s COVID-19 mass screening technology, Juiceworks is offering safe indoor/outdoor entry solutions using customfabricated temporary structures. All of the entry solutions being sold by Juiceworks across North America will be retrofitted with the company’s technology for COVID-19 mass screening. The company’s technology will be deployed using a software as a service ("SaaS") model whereby for every camera or scanner installation, there will be an upfront customization fee followed by a monthly subscription fee model based on the number of screenings contributing to recurring revenue on a monthly basis. The contract is a multiyear contract which can be extended up to 3 years. In parallel, the company is working diligently through its partners and sales team for a North American expansion and deployment of the mass screening technology.Mental health disorders carry a huge healthcare burden in North America. Approximately 15.5% of the global population is affected by mental illnesses, and those numbers are rising and are likely to be further exacerbated due to the current COVID-19 pandemic. Although there are many who require treatment, more than 50% of mental illnesses remain untreated. More than $201 billion is spent on mental health annually in the US, making mental health the most expensive part of the healthcare system. However, the diagnosis of mental health disorders is based on an age-old method that can be subjective, unreliable and unfortunately there are no blood tests for most mental health disorders. This highlights a clear need for disruptive technologies in the space. The company is also developing AI powered technologies to assist with diagnosis and management of mental health disorders such as depression, autism, ADHD and dementia.

Merger transaction

During the year ended January 31, 2020, the Company completed the following acquisition:

Effective September 23, 2019, the Company was part of a three-cornered amalgamation among the Company, 2693980 Ontario Inc. (a wholly owned subsidiary) and Cultivar Holdings Ltd. (the “Transaction”).

The result of the transaction was that Admiral acquired all the issued and outstanding securities of Cultivar Holdings Ltd. on the basis of one share of Admiral for each share of former Cultivar. All outstanding warrants to purchase former Cultivar shares were exchanged, on an equivalent basis, for warrants to purchase shares of the Company. At completion of the transaction, Admiral changed its name to Cultivar Holdings Inc. and former Cultivar was amalgamated into 2693980 Ontario Inc.

Under IFRS, this was considered a Reverse Merger and Recapitalization (commonly referred to as a Reverse Take Over or “RTO”). The Company issued 6,514,249 shares valued at $0.21 per share, with a total value of $1,367,992 for the acquisition.

The fair value of the acquired assets and liabilities assumed is as follows:

Assets acquired by the Company:
Cash	$	3,448
Prepaid expenses		1,125
Liabilities assumed by the Company:
Accounts payable		(19,127)
Loans payable		(107,526)
Net liabilities assumed		(122,079)
Fair value of issued		(1,367,992)
Loss on acquisition	$	(1,490,071)

As of June 1, 2020, the directors and officers of the Company are:

Sheldon Kales (Director and Chief Executive Officer), Dr. Rahul Kushwah (Director and Chief Operating Officer), Rakesh Malhotra (Chief Financial Officer and Corporate Secretary), Tom Sipos (Director), Ajit Kumar (Director).

Subsequent Events

On March 30, 2020, the Company announced that it has entered into a sale agreement (the "Sale Agreement") with respect to its 49% interest in Cultivar JA Limited ("Cultivar JA"), which holds a provisional cannabis cultivation license in Jamaica.

Pursuant to the terms of the Sale Agreement, the Company's wholly-owned subsidiary, Cultivar Holdings Ltd., has agreed to sell its 49% interest in Cultivar JA and all related royalty interests to the principals of Cultivar JA in exchange for the principals of Cultivar JA agreeing to cancel 4,000,000 common shares of the Company owned by the principals. In addition, the principals also agreed to terminate their right to receive an additional 500,000 common shares of the Company which had been reserved for issuance upon Jamaica's Licensing Authority issuing final approval for Cultivar JA's license to cultivate, process, retail and transport cannabis.

On April 6, 2020, the Company granted stock options to its directors, officers and consultants to purchase up to 9,850,000 common shares of the Company at an exercise price of $0.15 per common share. The options have a term of one (1) year expiring on April 6, 2021. These options have varying vesting periods, with the majority being in equal installments over a quarterly basis throughout the term.

On April 9, 2010, the Company announced that it has completed its name change from "Cultivar Holdings Inc." to "Predictmedix Inc." (the "Name Change"). The CUSIP number assigned to the Company's common shares following the name change is: CUSIP 74040L100 (ISIN CA74040L1004). In connection with the Name Change, the Company's trading symbol, as listed on the CSE and the OTCQB have also been changed from "CULT" to "PMED", and from "CVRHF" to "PMEDF", respectively.

Since December 31, 2019, the outbreak of the novel strain of coronavirus, specially identified as “COVID19” 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 material disruption to businesses globally resulting in an economic slowdown. Global equity markets have experienced significant volatility and weakness. Governments and central banks have reacted with significant monetary and fiscal interventions designed to stabilize economic conditions. The duration and impact of the COVID-19 outbreak is unknown at this time, as is the efficacy of the government and central bank interventions. It is not possible to reliably estimate the length and severity of these developments and the impact on the financial results and condition of the Corporation and its operating subsidiaries in future periods.

SELECTED FINANCIAL INFORMATION

The following table contains selected financial information of the Company for the year ended January 31, 2020 and the period from December 6, 2017 (date of incorporation) to January 31, 2019.

	Year ended January 31, 2020 $	Period from December 6, 2017 (date of incorporation) to January 31, 2019 $
Total expenses	(820,821)	(365,961)
Gain on foreign exchange	-	1,820
Loss from acquisition of subsidiary	(1,490,071)	-
Net loss and comprehensive loss	(2,310,892)	(364,141)
Loss per common share – basic and diluted	(0.024)	(0.006)
Weighted average number of common shares outstanding-	97,820,135	57,369,525

The chart below presents the summary financial information of the Company:

	As at January 31, 2020 ($)	As at January 31, 2019 ($)
Current assets	1,634,379	1,715,621
Non-current assets	32,383	14,106
Total assets	1,666,762	1,729,727
Current liabilities	79,838	47,113
Total long-term liabilities	3,268	-
Shareholders’ equity	1,583,656	1,682,614
Cash dividends per common share	-	-

OVERALL PERFORMANCE AND RESULTS OF OPERATIONS

Total operating expenses for the year ended January 31, 2020, were $820,821 as compared to operating expenses of $365,961 for the period from December 6, 2017 (date of incorporation) to January 31, 2019.

Significant variances

Operations in the prior period ended January 31, 2019 were in the early start- up phase of the Company with little activity beyond recognizing management efforts brought into the Company. Therefore, comparisons to the prior year period may not have sizable value.

Management fees for the twelve months ended January 31, 2020 consist of fees paid to senior management or to Companies owned by senior management, and shares issued as compensation to the Company’s director including (1) $96,000 (prior period $56,000) paid to the CEO for services, (2) $54,000 (prior period $nil) paid to a director for services, (3) $55,000 (prior period $nil) being management fees issued in shares to a director (4) $20,000 (prior period $nil) paid to the COO for services and (5) $38,066 (prior period $3,955) paid to the CFO for services.

Share-based compensation of $10,387 for the twelve months ended January 31, 2020 (period ended January 31, 2019: $5,535), consists of the fair value (Black- Scholes calculation) of the vesting of options to consultants.

Research and development costs for $73,733 for the year ended January 31, 2020 (prior period: $49,205) are costs incurred by outside research provider for development of Artificial Intelligence powered facial and voice recognition technology to detect cannabis along with alcohol impairment.

Consulting fees costs for $135,631 for the twelve months ended January 31, 2020 (prior period $nil) consists primarily of fees paid to consultants to assist with OTC listing, media marketing, valuations and investor relations, as well as finders’ fees for the RTO transaction.

Legal fees for $126,975 for the twelve months ended January 31, 2020 (prior period $86,840) consists primarily of legal fees paid to assist the reverse merger transaction consummated on September 23, 2019.

Audit and accounting fees for $56,647 for the year ended January 31, 2020 is the costs relating to audit and accounting of the consolidated statements for becoming and continuity as a public company. In addition, the Company incurred transfer agent and filing fees for $25,122 during the current year being costs to become and maintain public company status.

No cash dividends have been paid by the Company. The Company has no present intention of paying cash dividends on its common shares as it anticipates that all available funds will be invested to finance existing activities.

CRITICAL ACCOUNTING ESTIMATES

Preparing financial statements in conformity with IFRS requires the Company to select from possible alternative accounting principles. Estimates also affect classification and reported amounts for various assets, liabilities, equity balances, revenues and expenses. Prior estimates are revised as new information is obtained and are subject to change in future periods. Management believes the accounting policies and estimates used in preparing the consolidated financial statements are considered appropriate in the

circumstances but are subject to numerous judgments and uncertainties inherent in the financial reporting process.

The preparation of these consolidated financial statements requires management to make judgements regarding the going concern of the Company, as well as the determination of functional currency. The functional currency is the currency of the primary economic environment in which an entity operates and has been determined for each entity within the Company. The functional currency for the Company and its subsidiary has been determined to be the Canadian dollar.

Income taxes - There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The Company recognizes liabilities based on the Company’s current understanding of tax laws as applied to the Company’s circumstances. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred tax provisions in the period in which such determination is made.

Stock option valuation ‐ Issuances and grants of share options are valued using the fair value method. Management uses the Black-Scholes valuation model to estimate the fair value of options determined at grant date. Grants of options result in non-cash charges to expense and a corresponding credit to sharebased payment reserves. Charges associated with granted options are recorded over the vesting period. Significant assumptions affecting valuation of options include the trading value of the Company’s shares at the date of grant, the exercise price, the term allowed for exercise, a volatility factor relating to the Company’s historical share price, forfeiture rates, dividend yield and the risk-free interest rate.

Useful life of property and equipment – Property and equipment is depreciated over its estimated useful life. Estimated useful lives are determined based on current facts and past experience and takes into consideration the anticipated physical life of the asset, potential for technological obsolescence, and regulations.

New standards adopted

(a) Leases and right-of-use assets:

In January 2016, the IASB issued IFRS 16 - Leases ("IFRS 16"), replacing IAS 17 - Leases. IFRS 16 provides a single lessee accounting model and requires the lessee to recognize assets and liabilities for all leases on its statement of financial position, providing the reader with greater transparency of an entity’s lease obligations.

At February 1, 2019, the Company adopted IFRS 16 using the modified retrospective approach and accordingly the information presented for 2018 has not been restated. It remains as previously reported under IAS 17 and related interpretations.

All leases are accounted for by recognizing a right-of-use asset and a lease liability except for:

Leases of low value assets; and
Leases with a duration of twelve months or less.

Lease liabilities are measured at the present value of the contractual payments due to the lessor over the lease term, with the discount rate determined by the incremental borrowing rate on commencement of the lease is used. Variable lease payments are only included in the measurement of the lease liability if they depend on an index or rate. In such cases, the initial measurement of the lease liability assumes the variable

element will remain unchanged throughout the lease term. Other variable lease payments are expensed in the period to which they relate.

On initial recognition, the carrying value of the lease liability also includes:

Amounts expected to be payable under any residual value guarantee;
The exercise price of any purchase option granted if it is reasonably certain to assess that option;
Any penalties payable for terminating the lease, if the term of the lease has been estimated on the basis of termination option being exercised.

Right-of-use assets are initially measured at the amount of the lease liability, reduced for any lease incentives received, and increased for:

Lease payments made at or before commencement of the lease;
Initial direct costs incurred; and
The amount of any provision recognized where the Company is contractually required to dismantle, remove or restore the leased asset.

Lease liabilities, on initial measurement, increase as a result of interest charged at a constant rate on the balance outstanding and are reduced for lease payments made. Right-of-use assets are amortized on a straight-line basis over the remaining term of the lease or over the remaining economic life of the asset if this is judged to be shorter than the lease term.

When the Company revises its estimate of the term of any lease, it adjusts the carrying amount of the lease liability to reflect the payments to make over the revised term, which are discounted at the same discount rate that applied on lease commencement. The carrying value of lease liabilities is similarly revised when the variable element of future lease payments dependent on a rate or index is revised. In both cases an equivalent adjustment is made to the carrying value of the right-of-use asset, with the revised carrying amount being amortized over the remaining (revised) lease term.

The Company adopted this standard and the impact on the Company's consolidated financial statements are disclosed in note 15 and 16 to the consolidated financial statements for year ended January 31, 2020.

(b) Uncertainty over Income Tax Treatments:

On June 7, 2017, the IASB issued IFRIC Interpretation 23 Uncertainty over Income Tax Treatments. The Interpretation provides guidance on the accounting for current and deferred tax liabilities and assets in circumstances in which there is uncertainty over income tax treatments. The Company adopted this standard at February 1, 2019 and there was no material impact on the Company's unaudited condensed interim consolidated financial statements.

Other accounting standards and amendments to existing accounting standards that have been issued and have future effective dates are not applicable or are not expected to have a significant impact on the Company’s financial statements.

LIQUIDITY AND CAPITAL RESOURCES

At January 31, 2020, the Company had cash and cash equivalents of $1,493,577 and working capital of $1,554,541. During the year ended January 31, 2020, the Company received $776,669 from financing activities, used $832,121 in operating activities and $9,920 in investing activities.

At January 31, 2019, the Company had cash and cash equivalents of $1,558,949 and working capital of $1,668,508. During the period from December 6, 2017 to January 31, 2019 the Company received $1,979,716 from financing activities (common shares), used $402,296 in operating activities and $18,471 in investing activities.

The Company has financed its operations from inception to date through the issuance of equity shares.

The Company currently has no source of revenues; as such, administrative and other expenses may exceed available cash resources and additional funding may be required to further its projects and to meet ongoing requirements for general operations. The ability of the Company to continue as a going concern is dependent on raising additional financing, development of its projects and generation of profitable operations in the future.

On August 12, 2019, the Company closed a private placement of 3,296,000 units at $0.25 per unit for a consideration of $824,000. Each unit is comprised of one common share and one-half of one common share purchase warrant (each whole warrant, a "Warrant"), with each Warrant exercisable into a common share of the Company at an exercise price of $0.50 per share for a period of 24 months. In connection with this private placement, the Company issued 66,400 shares as finders’ fee, and incurred an additional $95,445 in share issuance costs.

As such, the Company believes it has enough cash to maintain itself for the next 12 months.

The Company's objectives when managing its capital structure are to preserve the Company's access to capital markets and its ability to meet its financial obligations.

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 project plans, operating expenditure plans, or issue new common shares. 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’ review and acceptance of expenditure budgets that are achievable within existing resources and the timely matching and release of the next stage of expenditures with the resources made available from private placements or other funding.

The Board of Directors does not establish quantitative return on capital criteria for management, but rather relies on the expertise of the Company’s management to sustain future development of the business. The Company is not subject to externally imposed capital requirements or covenants.

OUTSTANDING SHARE DATA

At January 31, 2020, the Company had 104,054,149 common shares outstanding. As of date of the MD&A, the Company has 100,054,149 common shares outstanding.

At January 31, 2020, the Company had 350,000 outstanding stock options and 1,648,000 warrants.

a) Common shares

The holders of common shares are entitled to receive dividends which are declared from time to time and are entitled to one vote per share at meetings of the Company. All shares are ranked equally with regards to the Company's residual assets.

b) Share issuances

During the year ended January 31, 2020:

The Company issued 800,000 common shares at $0.10 for services. This includes 550,000 common shares issued to a director valued at $55,000 (Note 10).
On August 12, 2019, the Company closed a private placement of 3,296,000 units at $0.25 per unit for a consideration of $824,000. Each unit is comprised of one common share and one-half of one common share purchase warrant (each whole warrant, a "Warrant"), with each Warrant exercisable into a common share of the Company at an exercise price of $0.50 per share for a period of 24 months. The Black-Scholes option pricing model was used to determine the fair value of the warrants using the following weight average assumptions: Expected dividend yield of 0%; risk free interest rate of 1%; expected volatility of 100%; expected life of 2 years. The relative fair value of the warrants has been valued at $123,283 and common shares at $700,717 ($0.21). In connection with this private placement, the Company issued 66,400 shares as finders’ fee, and incurred an additional $95,445 in share issuance costs.
The Company issued 6,514,249 shares in connection with the acquisition.
On January 10, 2020, the Company issued 100,000 shares for financial media marketing and investor services for a total consideration of $25,000, to be provided over the period commencing October 28, 2019 and ending on November 1, 2020 (the “Term”)

During the period ended January 31, 2019:

The Company issued 30,000,000 common shares, as founders’ shares, for $30.
The Company issued 29,800,000 common shares in a share exchange agreement with Cann, valued at $30.
The Company issued 24,995,000 common shares at $0.05 per share in private placements and raised $1,249,750. The Company issued 275,000 common shares as finders shares.
The Company issued 8,207,500 common shares at $0.10 per share in private placements and raised $820,750.

In conjunction with the above private placements, the Company incurred cash share issuance costs of $29,340.

As at January 31, 2020, the Company had the following warrants outstanding:

Outstanding	Exercise Price	Remaining Life(Years)	Expiry Date
1,648,000	$0.50	1.53	August 11, 2021

(c) Stock Options

a) In October 2018, the Company granted options to a consultant to acquire a total of 250,000 common shares. These options were issued at an exercise price of $0.10 per share and vested 75,000 immediately, 37,500 at the date of engineering milestone (vested during the quarter ended July 31, 2019) and balance 137,500 on completion of additional milestones, including 75,000 on model development (vested during the quarter ended October 31, 2019) and 62,500 on project handover, with an expiry term of two years. The fair value of each option used for the purpose of estimating the stockbased compensation is estimated using the Black-Scholes option pricing model with the following assumptions:

Risk free rate		2.26%
Expected dividends		0%
Expected forfeiture rate		0%
Expected volatility		100%
Expected life	2 years
Unvested stock-based compensation expense as of January 31, 2019	$	3,311

During the year ended January 31, 2020, the Company expensed $5,961 relating to the vesting of 187,500 options, resulting in unvested stock-based compensation expense of $3,311 as of January 31, 2020.

b) In November 2018, the Company granted options to a consultant to acquire a total of 100,000 common shares. These options were issued at an exercise price of $0.10 per share and vested 25,000 immediately, and 25,000 each on April 1, 2019, September 1, 2019 and March 1, 2020 with an expiry term of three years. The fair value of each option used for the purpose of estimating the stock-based compensation is estimated using the Black-Scholes option pricing model with the following assumptions:

Risk free rate		2.30%
Expected dividends		0%
Expected forfeiture rate		0%
Expected volatility		100%
Expected life		3 years
Unvested stock-based compensation expense as of January 31, 2020	$	260

During the year ended January 31, 2020, the Company expensed $4,426 relating to the vesting of 75,000 options, resulting in unvested stock- based compensation expense of $260 as of January 31, 2020.

As of January 31, 2020, there was $3,571 (January 31, 2019: $13,958) of unvested stock-based compensation expense.

Continuity of the Company’s options is as follows:

	Number of	Weighted Average
	Options	Exercise Price
Outstanding, December 7, 2017	-	$ -
Issued	350,000	$0.10
Outstanding,January31,2019 and January31,2020	350,000	$0.10

As at January 31, 2020, the Company had the following share purchase options outstanding and exercisable:

			Remaining Life
Outstanding	Exercisable	Exercise Price	(Years)	Expiry Date
250,000	187,500	$0.10	0.73	October 25, 2020
100,000	75,000	$0.10	1.77	November 8,2021
350,000	262,500	$0.10	1.03

FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

The Company’s financial instruments consist of cash, accounts payable, and loans and advances. The fair value of the Company’s accounts payable, and loans and advances approximate carrying value, due to their short-term nature. The Company’s cash is measured at fair value under the fair value hierarchy based on level one quoted prices in active markets for identical assets or liabilities.

The Company’s activities expose it to a variety of financial risks that impact financial instruments.

The Company thoroughly examines the various financial risks to which it is exposed and assesses the impact and likelihood of those risks. Where material, these risks are reviewed and monitored by the Board of Directors.

Credit risk

Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations. The Company is not exposed to significant credit risk.

Liquidity risk

Liquidity risk is the risk that the Company will not have sufficient cash resources to meet its financial obligations as they come due. The Company’s liquidity and operating results may be adversely affected if its access to the capital market is hindered, whether as a result of a downturn in stock market conditions generally or matters specific to the Company. The Company generates cash flows primarily from its financing activities.

The Company manages its liquidity needs by carefully monitoring scheduled costs. Liquidity is measured in various time bands, on day to day and week-to-week basis, as well as on long term liquidity needs over 180 day to 360 day look out periods. Funding for long term liquidity needs is based on the ability of the Company to successfully complete private placements.

As at January 31, 2020, the Company had sufficient cash of $1,493,577 to settle current liabilities of $79,838.

Market Risk

Market risk is the risk of loss that may arise from changes in market factors such as interest rates, commodity and equity prices, and foreign exchange rates.

(a) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is not exposed to significant interest rate risk.

(b) Price risk

The Company is not exposed to significant price risk as it does not possess investments in publicly traded securities.

(c) Currency risk

Currency risk is the risk that the fair value of future cash flows of a financial instrument denominated in a foreign currency will fluctuate because of changes in foreign exchange rates. The Company operates

internationally, which gives rise to the risk that cash flows may be adversely impacted by exchange rate fluctuations. Amounts subject to currency risk are prepaid expenses held by a Director in US Dollars in a Jamaican bank account as well as operating expenses incurred by CJA in US Dollars and Jamaican Dollars. As at January 31, 2020, the Company had net financial assets denominated in US Dollars of approximately $31,900 (January 31, 2019: $26,700). Therefore, a 10% change in value of the US Dollar versus the Canadian Dollar would give rise to a gain or loss of approximately $3,190 (January 31, 2019: $2,670). The Company has not entered into any foreign exchange contracts to hedge this risk.

OFF-BALANCE SHEET ARRANGEMENTS

The Company has not entered into any material off-balance sheet arrangements such as guarantee contracts, contingent interests in assets transferred to unconsolidated entities, derivative instrument obligations, or with respect to any obligations under a variable interest entity arrangement.

TRANSACTIONS WITH RELATED PARTIES

Related parties include key management personnel, the Board of Directors, close family members and enterprises that are controlled by these individuals as well as certain persons performing similar functions. Key management of the Company are members of the Board of Directors, the Chief Executive Officer (“CEO”), the Chief Financial Officer (“CFO”) and the Chief Operating Officer (“COO”).

Transactions with key management personnel not disclosed elsewhere in the financial statements include the following:

		Twelve months ended January 31, 2020 Incorporation on December 6, 2017 to January 31, 2019
Management fees to the CEO Management fees to a director Management fees (issued in shares) to a director Management fees to the COO Management fees to the CFO Total Management fees Vehicle expense to the CEO Rent to the CEO included in leasing and rent costs	$ $ $ $ $	96,000 $ 56,000 54,000 $ - 55,000 $ - 20,000 $ - 38,066$ 3,955
	$ $ $	263,066 $ 59,955 6,000 $ 4,750 18,000$ 14,250
		287,066$ 78,955

As of January 31, 2020, there was $nil due to any related parties (January 31, 2019 - $17,113 due to the CEO, included in accrued liabilities).

BOARD PURPOSE AND FUNCTION

The directors and management of the parent company have experience operating in Canada and the United States and taking projects through to various stages of development.

The Board’s purpose is to ensure corporate governance, risk, strategy and shareholder interests are priorities at all times. At the end of the financial year under review, the board consisted of two members.

COMMITMENTS AND CONTINGENCIES

Effective July 1, 2018, the Company signed a two- year contract with a corporation owned and controlled by the CEO to pay monthly compensation of $8,000 for CEO services. In addition, the Company pays monthly rent for $1,500 and an additional $500 for the use of a personal vehicle.

The Company’s operations were governed by governmental laws and regulations regarding environmental protection. Environmental consequences are difficult to both predict and identify, in terms of level, impact or timeline. At the present time and to the best knowledge of its management, the Company is in conformity with the laws and regulations in effect. Restoration costs will be accrued in the financial statements only when they will be reasonably estimated and will be charged to the earnings at the time.

CONTROL AND PROCEDURES

The Chief Executive Officer and Chief Financial Officer are responsible for designing internal controls over financial reporting in order to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with IFRS. The design of the Company’s internal control over financial reporting was assessed as of the date of this Management Discussion and Analysis.

Based on this assessment, it was determined that certain weaknesses existed in internal controls over financial reporting. As indicative of many small companies, the lack of segregation of duties and effective risk assessment were identified as areas where weaknesses existed. The existence of these weaknesses is to be compensated for by senior management monitoring, which exists. The officers will continue to monitor very closely all financial activities of the Company and increase the level of supervision in key areas. It is important to note that this issue would also require the Company to hire additional staff in order to provide greater segregation of duties. Since the increased costs of such hiring could burden the Company’s financial resources, management has chosen to disclose the potential risk in its filings and proceed with increased staffing only when the budgets and workload will enable the action. The Company has attempted to mitigate these weaknesses, through a combination of extensive and detailed review by the CFO of the financial accounting and reporting.

RISKS AND UNCERTAINTIES

The Company is subject to a number of risks and uncertainties due to the nature of its business and the present stage of development of its business. Current and potential investors should give special consideration to the risk factors involved, should the Company continue in the cannabis business.

Management

Dependence on Key Personnel, Contractors and Service Providers, shareholders of our Company rely on the good faith, experience and judgment of the Company’s management and advisors in supervising and providing for the effective management of the business and the operations of the Company and in selecting and developing new investment and expansion opportunities. The Company may need to recruit additional qualified contractors and service providers to supplement existing management. The Company will be dependent on a relatively small number of key persons, the loss of any one of whom could have an adverse effect on the Company.

Value of Our Common Shares

The value of the Company’s common shares could be subject to significant fluctuations in response to variations in nd annual operating results, the success of the Company's business strategy, competition or other applicable regulations which may affect the business of the Company and other factors.

Impact of Covid-19

Additional Funding and Financing Risk

Additional funds will be required for future development. The source of future funds available to the Company is through the sale of additional equity capital or borrowing of funds. There is no assurance that such funding will be available to the Company. Furthermore, even if such financing is successfully completed, there can be no assurance that it will be obtained on terms favorable to the Company or will provide the Company with sufficient funds to meet its objectives, which may adversely affect the Company's business and financial position. In addition, any future equity financings by the Company may result in substantial dilution for existing shareholders.

Environmental Risk

Environmental legislation is evolving in a manner which will require stricter standards and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects and a heightened degree of responsibility for companies and their officers, directors and employees. There can be no assurance that future changes to environmental regulation, if any, will not adversely affect the Company’s operations.

Uninsured Hazards

The Company currently carries no insurance coverage. The potential costs that could be associated with any liabilities not covered by insurance or compliance with applicable laws and regulations may cause substantial delays and require significant capital outlays, adversely affecting the Company’s financial position.

Conflicts of Interest

Certain Directors and Officers of the Company also serve as Directors and officers of other companies involved in development and production. Consequently, there exists the possibility that such Directors or Officers may be in a position of conflict of interest. Any decision made by such Directors or Officers involving the Company are made in accordance with their duties and obligations to deal fairly and in good

faith with the Company and such other companies. In addition, such Directors will declare and refrain from voting on, any matter in which such Directors may have a material conflict of interest.

Permits, Licenses and Approvals

The operations of the Company may require licenses and permits from various governmental authorities. The Company believes it holds or is in the process of obtaining all necessary licenses and permits to carry on the activities which it is currently conducting under applicable laws and regulations. Such licenses and permits are subject to changes in regulations and in various operating circumstances. There can be no guarantee that the Company will be able to obtain all necessary licenses and permits that may be required to maintain its activities, construct facilities and commence operations. of any of their properties. In addition, if the Company proceeds to production on any property, it must obtain and comply with permits and licenses which may contain specific conditions concerning operating procedures, water use, the discharge of various materials into or on land, air or water, waste disposal, spills, environmental studies, abandonment and restoration plans and financial assurances. There can be no assurance that the Company will be able to obtain such permits and licenses or that it will be able to comply with any such conditions.

Regulatory Matters

The Company's business is subject to various federal, provincial and local laws governing prospecting and development, taxes, labor standards and occupational health, safety, toxic substances, environmental protection and other matters. Cannabis cultivation and extraction are also subject to various federal, provincial and local laws and regulations relating to the protection of the environment. These laws impose high standards on the cannabis industry to monitor the discharge of waste water and report the results of such monitoring to regulatory authorities, to reduce or eliminate certain effects on or into land, water or air, to progressively rehabilitate cannabis properties, to manage hazardous wastes and materials and to reduce the risk of worker accidents. A violation of these laws may result in the imposition of substantial fines and other penalties.

General Venture Company Risks

The common shares must be considered highly speculative due to the nature of the Company’s business, the early stage of its deployment, its current financial position and ongoing requirements for capital. An investment in the common shares should only be considered by those persons who can afford a total loss of investment and is not suited to those investors who may need to dispose of their investment in a timely fashion. Investors should consult with their own professional advisors to assess the legal, financial and other aspects of an investment in common shares.

Uncertainty of Revenue Growth

There can be no assurance that the Company can generate substantial revenue growth, or that any revenue growth that is achieved can be sustained. Revenue growth that the Company has achieved or may achieve may not be indicative of future operating results. In addition, the Company may increase further its operating expenses in order to fund increase its sales and marketing efforts and increase its administrative resources in anticipation of future growth. To the extent that increases in such expenses precede or are not subsequently followed by increased revenues, the Company’s business, operating results and financial condition will be materially adversely affected.

Marketing and Distribution Capabilities

In order to commercialize its technology, the Company must either acquire or develop an internal marketing and sales force with technical expertise and with supporting distribution capabilities or arrange for third parties to perform these services. In order to market certain of its products, the Company must either acquire or develop a sales and distribution infrastructure. In order to maximize sales of other products, the Company may determine that it needs to either acquire or develop a sales and distribution infrastructure. The acquisition or development of a sales and distribution infrastructure would require substantial resources, which may divert the attention of its management and key personnel and defer its product development and deployment efforts. To the extent that the Company enters into marketing and sales arrangements with other companies, its revenues will depend on the efforts of others. These efforts may not be successful. If the Company fails to develop substantial sales, marketing and distribution channels, or to enter into arrangements with third parties for those purposes, it will experience delays in product sales and incur increased costs.

Rapid Technological Development

The markets for the Company’s products and services are characterized by rapidly changing technology and evolving industry standards, which could result in product obsolescence or short product life cycles. Accordingly, the Company’s success is dependent upon its ability to anticipate technological changes in the industries it serves and to successfully identify, obtain, develop and market new products that satisfy evolving industry requirements. There can be no assurance that the Company will successfully develop new products or enhance and improve its existing products or that any new products and enhanced and improved existing products will achieve market acceptance. Further, there can be no assurance that competitors will not market products that have perceived advantages over the Company’s products or which render the products currently sold by the Company obsolete or less marketable. Regardless of the Industry as a whole, the less lethal sector moves somewhat slower in the adaptation and integration of new products.

The Company must commit significant resources to developing new products before knowing whether its investments will result in products the market will accept. To remain competitive, the Company may be required to invest significantly greater resources then currently anticipated in research and development and product enhancement efforts and result in increased operating expenses.

Competition

The Company’s industry is competitive and composed of many foreign companies. The Company expects to experience competition from competitors whom it expects to continue to improve their products and technologies. Competitors may announce and introduce new products, services or enhancements that better meet the needs of end-users or changing industry standards, or achieve greater market acceptance due to pricing, sales channels or other factors. Competitors may be able to respond more quickly than the Company to changes in end-user requirements and devote greater resources to the enhancement, promotion and sale of their products.

Intellectual Property

The Company’s ability to compete effectively will depend, in part, on its ability to maintain the proprietary nature of its technology and manufacturing processes. Although the Company considers certain of its product designs as well as manufacturing processes involving certain of its products to be proprietary, patents or copyrights do not protect all design and manufacturing processes. The Company has adopted procedures to protect its intellectual property and maintain secrecy of its confidential business information and trade secrets. However, there can be no assurance that such procedures will afford complete protection of such intellectual property, confidential business information and trade secrets. There can be no assurance that the Company’s competitors will not independently develop technologies that are substantially equivalent or superior to the Company’s technology.

To protect the Company’s intellectual property, it may become involved in litigation, which could result in substantial expenses, divert the attention of its management, cause significant delays and materially disrupt the conduct of its business.

STRATEGY AND OUTLOOK

Our objective is to maximize the value of the Company for our shareholders and our strategy to obtain this result is to continually seek opportunities to participate in new ventures primarily in AI.

SEGMENT INFORMATION

The Company is a holding company whose subsidiary in Jamaica is in the early stage marijuana services and products, and another subsidiary in Canada is in the early development of a CBD product portfolio, as well as development of artificial intelligence powered technology to identify if someone is under the influence of cannabis and to predict substance addiction.

There are no revenues during the year. All assets are located in Canada except for property and equipment for $8,494 and prepaid expenses for $31,858 which are located in Jamaica.

On March 30, 2020, the Company announced that it has sold and discontinued its interests in its marijuana services and products.