StageZero Life Sciences Ltd.

STAGEZERO LIFE SCIENCES LTD. MANAGEMENT’S DISCUSSION AND ANALYSIS For the years ended December 31, 2022 and 2021 [Expressed in US dollars unless otherwise noted]

The following discussion and analysis (“MD&A”) provides management’s perspective on the financial position and results of operations of StageZero Life Sciences Ltd. (“StageZero Life Sciences” or the “Company”) on a consolidated basis for the year and three-month periods ended December 31, 2022 and 2021, and it should be read in conjunction with the audited consolidated financial statements for the years ended December 31, 2022 and 2021, which have been prepared by management in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and using the accounting policies described therein. While the presentation currency of the consolidated enterprise remains United States dollars (USD) the functional currency of Clinics Operations Ltd is Great British Pounds (GBP). The most recent audited consolidated financial statements and annual information form (“AIF”) are available on SEDAR at www.sedar.com and on the StageZero Life Sciences website: www.stagezerolifesciences.com.

The audit committee of the board of directors (the “Audit Committee”) and the board of directors (the “Board”) have reviewed and approved the contents of this MD&A, which was current as at March 31, 2023.

The use of “Company” and “StageZero Life Sciences” in all forms refers to StageZero Life Sciences Ltd. and its subsidiaries, unless otherwise noted. The use of “our”, “we” and “us” in this document refers to StageZero Life Sciences or its management. Our registered offices are located in Richmond Hill, Ontario, Canada, near Toronto, and we have the following wholly owned subsidiary companies, StageZero Holdings Inc., which owns 100% of our US subsidiaries, StageZero Life Sciences Inc., Care Oncology Inc. and SZ Physician Holdings, Inc. In addition, Clinics Operations Limited in the UK is owned by StageZero Life Sciences, Ltd.

FORWARD-LOOKING STATEMENTS AND GOING CONCERN UNCERTAINTY

This MD&A contains certain forward-looking statements identified by words such as “believe”, “anticipate”, “estimate”, “expect”, “intend”, “may”, “will”, “would” and similar expressions as well as negative variations thereof, although not all forward-looking statements contain these identifying words. There are a number of risks, uncertainties and other factors that could cause our actual results to differ materially from those indicated or implied by forwardlooking statements. See “Risk Factors”. We cannot guarantee the outcome of plans, intentions or expectations disclosed in forward-looking statements and you should not place undue reliance on these forward-looking statements. Any forward-looking statements represent our estimates at the time such statements are made only, and they should not be relied upon as representing our estimates as at any subsequent date. We do not assume any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Specifically, this MD&A contains forward-looking statements regarding (i) our ability to secure new financing on reasonable terms and continue to operate as a going concern; (ii) the success and profitability and our ability to support the commercialization of our product and in-licensed tests; (iii) the impact of the trading patterns in our share price; (iv) the impact of dilution on existing shareholders given the nature of new financings which we obtain; (v) the impact of regulators’ actions, including the Toronto Stock Exchange and the Ontario Securities Commission on our business; (vi) the success of our collaborations and strategic partnerships to generate sufficient revenue to support our operations; (vii) the demand for our products; (viii) our ability to obtain any necessary regulatory approvals for our products and processes; (ix) the likelihood of our products gaining reimbursement by third-party payers, such as private health insurers, managed-health organizations and state-sponsored health insurance plans for each jurisdiction in which our products are offered; (x) our ability to protect our competitive position through patents, trade secrets, trademarks, know-how and other intellectual property rights; (xi) our compliance with privacy laws; (xii) our sales, marketing and distribution strategy; (xiii) our ability to manage corporate growth, commercial expansion and interruptions of operations; (xiv) changes to key personnel; (xv) changes to foreign exchange rates; (xvi) changes in interest rates; (xvii) litigation; (xviii) material weakness in financial controls; (xix) fluctuations in quarterly results; (xx) the current enterprise value assigned by the market; and (xxi) general business and economic conditions.

StageZero Life Science, Limited Management’s Discussion & Analysis [Expressed in US dollars, unless otherwise noted]

In developing the forward-looking statements in this MD&A, we have applied several material assumptions, including those related to general business and economic conditions as well as our ability to attract new financing on reasonable terms.

As there can be no certainty as to the outcome of the above matters, there is material uncertainty that may cast significant doubt about the Company’s ability to continue as a going concern.

BUSINESS

StageZero Life Sciences is a vertically integrated healthcare company devoted to improving the early detection and management of cancer and other chronic diseases through leading-edge molecular diagnostics and clinical interventions.

On September 2, 2021, the Company acquired 100% of the shares of Clinics Operations Limited (“COL”), a company incorporated in the United Kingdom (“UK”) and, through the Company’s newly incorporated subsidiaries CareOncology Inc.(“COI”) and CareOncology Physicians (“COP”), the operating assets of Health Clinics USA Corp., both from Health Clinics Limited (“HCL”), the ultimate parent of both entities

COI and COL (collectively “CareOncology”) offers telemedicine-based clinical services globally with a focus in the US and the UK through three specific clinical programs, the CareOncology Protocol (TREAT), COC Plus and AVRT.

StageZero Life Sciences, Inc. is focused on developing and commercializing proprietary molecular diagnostic tests for early detection of diseases and for personalized health management, with an initial focus on cancer-related indications. We have developed a powerful approach to identifying unique RNA-based biomarkers from whole blood. We call this proprietary platform technology the Sentinel Principle®. It has the ability to detect virtually any disease or medical condition from a simple blood sample. The science behind the Sentinel Principle® led to the development of our first commercial product, ColonSentry®, a blood-based test for assessing an individual’s current risk of having colorectal cancer. Our newest program called Aristotle®, also developed using the Sentinel Principle®, is the first mRNA-based multi-cancer detection panel using a single sample of blood and focuses on detecting cancer early, when interventions can often be most effective.

StageZero Life Sciences, through its Sentinel Principle®, is one of the founders of the Liquid Biopsy principle. The Sentinel Principle® is an award-winning technology developed by StageZero Life Sciences based on the scientific observation that gene signatures among components circulating in the blood reflect, in a detectable way, what is occurring throughout the body. This is a result of the constant and dynamic interaction of blood with cells, tissues, and organs of the human body. Many clinical studies have demonstrated that gene expression profiles from blood can be used to develop personalized signatures capable of differentiating patients with cancer from healthy patients across a broad spectrum of pathologies. ColonSentry® and Aristotle® specifically measure gene expression in white blood cells. Tumors are known to affect the gene expression profiles of circulating white blood cells. This occurs due to a unique interaction between tumor cells and the immune system that has been referred to as “immunoediting.” Immunoediting is the response of the immune system to a tumor and comprises three stages: elimination (in which the immune system identifies cancerous and/or precancerous cells and attempts to eradicate them), equilibrium (in which the surviving tumor cells begin mutating rapidly), and escape (in which tumor cells proliferate uncontrollably, leading to tumor progression). Each of these stages induces leukocyte gene expression changes that constitute a unique, detectable molecular signature.

We offer early cancer diagnostics and risk stratification via Aristotle, our multi-cancer panel for the detection of multiple discrete cancers from a single sample of blood as well as individual tests for colorectal, prostate and breast cancers, through several novel, molecular diagnostic platforms at our wholly owned CAP accredited and CLIA certified high-complexity laboratory in Richmond, Virginia. The Company continues to focus our commercialization strategy on the adoption of our proprietary cancer tests with clinical integrated networks, physician groups, employers, and consumers. See Liquid Biopsy Testing below.

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StageZero Life Science, Limited Management’s Discussion & Analysis [Expressed in US dollars, unless otherwise noted]

.The Company initiated COVID-19 testing in April 2020, had high volume until early 2022 and now provides a walk in facility in Richmond VA. See COVID Tests below.

With the acquisition and integration of CareOncology, StageZero Life Sciences’ business expanded to include two new clinical offerings that facilitate revenue accumulation and acceleration beyond lab-based testing. The Company expanded its offering to include programs geared towards early detection (AVRT) and treatment (TREAT and COC Plus.). During Q3, 2022 the Company further refined its program offerings to better meet the needs of current patients and the requests from new patients.

Early cancer screening is not only important, but identification of attendant risk factors and then introduction of risk factor modification programs are essential.

StageZero/CareOncology has been positioned for exactly this purpose:

Aristotle, the first ever mRNA multi-cancer panel for simultaneously screening for multiple cancers from a single sample of blood, to screen for cancer today;
the CareOncology metabolic pathway screen, researched and developed for screening for those risk factors that contribute to developing cancer tomorrow;
the CareOncology Risk Factor Modification programs to guide risk reduction for patients that flag positive (initially demonstrated in the glioblastoma study publication[2] ), with oversight from experienced metabolic oncologists that are linked via telehealth.

AVRT is a patient-centric, personalized care plan that specializes in identifying and treating the early warning signs of cancer and other chronic diseases. Created by the physicians and scientists who developed the COC Protocol, AVRT uses similar approaches to detect and target the inflammatory and metabolic pathways that have been demonstrated to increase the risk of developing cancer and other chronic diseases.

The Metabolic Pathway Panel & Risk Modification Program

As obesity, diabetes, chronic inflammation, and insulin resistance are known risk factors for the development of many cancers, the physicians and scientists who developed the ground-breaking COC Protocol have established a program that addresses these early warning signs. The program identifies and targets the inflammatory and metabolic pathways and includes:

A Metabolic Pathway Panel which specifically identifies metabolic and inflammatory health markers that are proven precursors for developing cancer
An in-depth consultation with a metabolic oncologist
Risk Modification that may involve specific evidence-based medications and supplements and lifestyle guidance and coaching.

Access to a digital health platform that captures all information and recommendations in an easy-to-understand format and provides bespoke information to improve patient understanding and provide simple, practical guidance on how to optimize metabolic health in a proportionate, tolerable manner.

TREAT, based on the METRICS Study (NCT02201381)[1] , is a clinically researched and personalized therapeutic regimen administered by experienced oncologists and intended for patients diagnosed with cancer of any type or at any stage, as an adjuvant therapy along with conventional cancer treatment. TREAT employs the patented COC Protocol[2] that intends to interrogate the interconnected intracellular pathways involved in cancer cell growth, proliferation, apoptosis, and angiogenesis, by focusing on metabolic pathways.

1. Agrawal S., Vamadevan P., Maziboku N., Bannister R., Swery R., Wilson S., Edwards S., Front. Pharmacol., 27 June 2019 | https://doi.org/10.3389/fphar.2019.00681

2. Care Oncology Protocol is protected by United States Patent US9622982B2

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StageZero Life Science, Limited Management’s Discussion & Analysis [Expressed in US dollars, unless otherwise noted]

In May 2022, the Company added the COC Plus Program. COC Plus is a new physician led program centered on nutrition and other health interventions to help address a patient's specific cancer and is designed to be used alongside standard of care. See CareOncology Consultation Programs below.

Liquid Biopsy Testing and Clinical Consultation Programs

STAGEZERO LIFE SCIENCES LIQUID BIOPSY TESTING PROGRAMS

Our flagship test, Aristotle, a multi-cancer panel for the detection of multiple discrete cancers from a single sample of blood is being offered within the AVRT program through CareOncology, our clinic business.

Even with the introduction of Aristotle, there remains high interest in cancer tests intended to detect the risk of specific tumor types. ColonSentry[®] , is a proprietary test offered through our wholly owned CAP accredited and CLIA certified high-complexity laboratory in Richmond, Virginia. In addition, we offer early cancer diagnostics and risk stratification for prostate and breast cancers through several novel, molecular diagnostic platforms.

Aristotle®

Aristotle is the frst multiple discrete cancer diagnostic test from a single sample of blood with high specificity and sensitivity. The Female panel test has been validated for ovarian, breast, endometrial, cervical, colorectal, bladder stomach, liver, and nasopharyngeal cancers. The Male panel test has been validated for prostate, colorectal, bladder, stomach, liver, and nasopharyngeal cancers. The ability to facilitate early diagnosis of multiple cancers via an affordable, patient-friendly test will impact management of cancer at the population level in a way that has not been achievable until now. Aristotle is accessed via AVRT, our physician-driven interventional program for the detection of the early risk of cancer .

ColonSentry[®]

The ColonSentry[®] test assesses an individual’s current risk, or probability, of having colorectal cancer through a convenient, and revolutionary, blood test. Colorrectal cancer (“CRC”) is among the leading causes of cancer-related deaths in the United States, claiming more than 50,000 lives per year. Although CRC is a preventable and treatable form of cancer when detected early, people often delay or avoid being tested until symptoms appear. Patient discomfort with common test options like colonoscopies or stool-based tests continues to drive high non-compliance with recommended screening guidelines, resulting in late-stage diagnosis of CRC when treatment options are limited, and outcomes are poorer.

The American Cancer Society’s 80-by-18 initiative had a multi-partner goal to improve colorectal cancer screening rates to 80% in the eligible population by the end of 2018. At present, less than 60% of the eligible population has been screened and screening levels have further decreased with the advent of COVID-19 lock-downs. Novel efforts to improve screening through risk stratification tools are essential to getting the ‘unscreened’ population to be screened, traditionally done through colonoscopy (90% of the screened population) or stool-based (10%) procedures. ColonSentry[®] , as a blood-based risk stratification test, helps primary care physicians and gastroenterologists facilitate the discussion about colon cancer screening with the eligible population who have refused to undergo other tests such as colonoscopies or stool-based procedures.

Prostate Health Index (“PHI”)

The PHI test, licensed from Beckman, is a convenient blood test that is three times more specific in detecting prostate cancer than the prostate-specific antigen (“PSA”) test. While the PSA test is currently the most widely used screening test for prostate cancer, it is generally recognized that PSA results can often indicate the possibility of prostate cancer when none is present. The PSA test is based on the fact that men with higher levels of PSA are more likely to have prostate cancer. However, higher levels of PSA can also be caused by a benign enlargement or inflammation of the prostate, leading to many false positives for cancer and ultimately unnecessary, invasive biopsies with an increased potential for patient harm. The PHI test helps physicians distinguish prostate cancer from benign conditions by using three different PSA markers (PSA, free PSA and pro2 PSA) as part of a sophisticated calculation to determine the probability of cancer more reliably in patients with elevated PSA levels.

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StageZero Life Science, Limited Management’s Discussion & Analysis [Expressed in US dollars, unless otherwise noted]

BreastSentry ™

In October 2014, we in-licensed two blood-based biomarker assays—pro-NT and pro-ENK—intended to aid physicians in identifying those women who are at risk for developing breast cancer. These assays were developed by Sphingotec GmbH, known for the discovery and development of biomarker assays.

BreastSentry™ measures the fasting plasma levels of Neurotensin (pro-NT) and Enkephalin (pro-ENK), which are highly predictive of a woman's risk for developing breast cancer. Various longitudinal studies have shown that elevated levels of pro-NT and decreased levels of pro-ENK are strong, independent risk factors for the development of breast cancer. The combined test levels have been incorporated into a sophisticated algorithm in order to provide an additional level of personal data to create an enriched, personalized score. BreastSentry™ is used to determine a woman’s risk for developing breast cancer relative to the risk in an average risk population.

Breast cancer is the second leading cause of cancer deaths in women in the United States and is exceeded only by lung cancer.

Many breast cancer cases are not due to genetic inheritance and, unlike other blood tests on the market that look for genetic indicators for the possibility of developing breast cancer, pro-NT and pro-ENK are biomarkers that, when measured in a convenient blood test, indicate the current level of a woman’s risk for breast cancer. The tests may be particularly applicable to those 50% of women who have dense breast tissue and where mammograms have less utility. BreastSentry™ has been validated as a laboratory developed test.

COVID-19 Tests

Due to the Company’s extensive knowledge of mRNA testing and its CLIA certified, CAP accredited laboratory, it was uniquely positioned to offer testing for the SARS-CoV-2 virus. Beginning in April 2020, the Company offered several types of COVID-19 tests: PCR, antibody and antigen tests. The PCR and antigen tests identify an active infection. The antibody tests identify antibodies in the blood that are indicative of a recent or past infection.

The Company partnered with both current service providers and new service providers to offer the testing. The primary tests offered were from Thermo Fisher Scientific, BTNX Inc. and Beckman Coulter.

By utilizing current relationships and in-house expertise that was created for our cancer screening tests, the Company was able to pivot to serve a substantial need. The path to returning to an ordinary lifestyle relies heavily on vaccines and testing. We were pleased to be able to contribute by offering COVID testing solutions.

Initial interest came from small to large employers, municipalities and health care systems. The Company decided to focus on delivering testing to frontline workers via employers, utilizing our Telehealth platform. Our marketing channels for our cancer screening tests focus on healthcare groups, large employers, physician groups and individuals. The Company approached COVID-19 testing in the same way, thereby relying upon established operational efficiencies.

Requests for testing came from the Mercer VIP Program, the County of Maricopa, Arizona, Udo Test, healthcare systems, national airlines, steel and manufacturing companies as well as Fortune 500 companies, amongst others.

The COVID-19-PCR test is a real-time reverse transcription polymerase chain reaction (rRT-PCR) test for the qualitative detection of nucleic acid from SARS-CoV-2 in nasopharyngeal, anterior nares and saliva specimens from individuals suspected of having COVID-19. Test results indicate whether the patient currently has a COVID-19 infection.

The COVID-19 IgG/IgM Antibody Test is an in-vitro immunoassay for the direct and qualitative detection of antiSARS-CoV-2 IgM and anti-SARS-CoV-2 IgG in human serum, plasma or venipuncture whole blood to aid in the diagnosis of COVID-19 in conjunction with clinical presentation and results of other laboratory tests. Detection of IgM antibodies indicates recent infection, while IgG antibodies gradually appear and increase in the late stage of infection. It is not known how long these antibodies persist in the blood after infection. This test is for professional in-vitro diagnostic use only. Blood samples are drawn from the patient and shipped to our CLIA certified, CAP accredited lab in Richmond, Virginia.

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StageZero Life Science, Limited Management’s Discussion & Analysis [Expressed in US dollars, unless otherwise noted]

The Company also offers a full Respiratory Panel for differentiation of COVID and 20 other pathogens.

CAREONCOLOGY CONSULTATION PROGRAMS

TREAT

The TREAT program is a clinically researched protocol that interrogates the interconnected intracellular pathways involved in cancer cell growth, proliferation, apoptosis, and angiogenesis, by focusing on metabolic pathways. Our patented COC protocol can be used adjuvant to standard of care therapy, or for patients in remission.

The TREAT program is available in the US and the UK via the Company’s CareOncology clinic business.

AVRT

The AVRT program is uniquely designed for early detection of cancer and other chronic diseases. It involves physician consultation and monitoring to identify the early warning signs of cancer, and where necessary, intervening with therapies. The program was created by the physicians and scientists who developed the ground- breaking COC Protocol. AVRT uses a similar approach by identifying and targeting the inflammatory and metabolic pathways that may increase the risk of developing cancer and chronic disease.

A number of tests may be performed as part of the AVRT program, including but not limited to the Company’s Aristotle test. The Company has developed a strategy to deepen, broaden and expand the AVRT program over the months and years to come.

The AVRT program is available via the Company’s CareOncology clinic business.

The Metabolic Pathway Panel & Risk Modification Program

A Metabolic Pathway Panel which specifically identifies metabolic and inflammatory health markers that are proven precursors for developing cancer
An in-depth consultation with a metabolic oncologist
Risk Modification that may involve specific evidence-based medications and supplements and lifestyle guidance and coaching.

COC Plus

COC Plus is a new physician led program centered on nutrition and other health interventions to help address a patient's specific cancer and is designed to be used alongside standard of care.

Created by the physicians and scientists who developed the groundbreaking COC Protocol, COC Plus is centered on nutrition, supplements and other health interventions specifically designed to impact key blood biomarkers proven to influence cancer prognosis. The specialty lab panel and subsequent interventions developed by our team are not routinely ordered by oncologists or family physicians.

Our COC Plus Program includes:

A lab order for a very specific set of blood tests to assess your metabolic and inflammatory status and guide our recommended interventions.

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StageZero Life Science, Limited Management’s Discussion & Analysis [Expressed in US dollars, unless otherwise noted]

A comprehensive physician consultation with an experienced metabolic oncologist to map your interventional strategy.
And a Road Map to address any health issues with nutrition, supplements, and other strategies intended to improve health outcomes.
Like the COC protocol, this program is designed to be adjunctive to standard-of-care treatments, not replace them.

COMMERCIAL ACTIVITIES

The Company has a clinical reference laboratory specializing in personalized blood-based tests to find, understand and treat cancers, which operates from a single facility in Richmond, Virginia. Also, throughout the COVID pandemic we provided COVID-19 testing. Our laboratory is capable of servicing the entire United States, Canada, and Europe. To broaden our reach the Company has developed, and begun to launch, a strategy to facilitate specimen collection and serve a broader population of patients. As a specific strategic initiative that is dependent upon regional collaborations, this initiative is a key focus of management and an essential element to providing patients in the US, Canada and Europe access to our laboratory-developed tests.

The Company offers its programs TREAT, COC Plus, Metabolic Pathway Panel and AVRT via its CareOncology clinic business, utilizing its Telehealth network.

With the onset of the COVID-19 pandemic and with the change in access to physicians and clinics, most testing switched to COVID, especially PCR-based tests. Throughout the pandemic the Company had contracted with a diverse set of customers ranging from small employers with a few hundred employees, to large employers with 50,000+ employees. Additionally, StageZero serviced multiple healthcare groups as well as diverse groups in the entertainment, hospitality and travel industries. Furthermore, StageZero established retail relationships with Rexall and Sobeys, thereby allowing consumers to access PCR-based COVID testing through our arrangement with more than 700 retail stores across Canada. Building upon our experience in establishing these relationships management is focused on leveraging this experience as we deploy Aristotle and our clinical programs. As COVID has receeded as a primary focus, attention has shifted back to cancer and early detection.

Cancer is the #1 catastrophic cost for self-funded healthcare plans. Early cancer detection:

markedly reduces costs
markedly improves employee 5-year survival rates

In addition:

40+% of cancers are avoidable with risk modification programs.
Telehealth and metabolic oncologist oversight is critical.
64% of workers covered under self-insured/self-funded plans = 100 million workers
Companies with 500+ employees are the largest group
Aristotle screens for multiple cancers; the AVRT panel highlights risk factors.

The focus is on these Primary Growth Areas:

High-Risk Populations/Self-Funded Employer Plans: Early detection of cancer, as well as risk stratification into normal, high and “raised” risk, is of critical importance to individuals with potential risk factors and workers exposed to carcinogens. The Company continues to market solutions to individual consumers and high-risk employer partners. We also continue to meet with regional medical clinics, self-funded employer plans and others. We remain encouraged by the amount of interest in our solutions.

TeleMedicine - Patient Directed Clinical Consultation and Testing: The global telehealth market was valued at US$62.5 billion in 2020 and some predict it to reach US$475.6 billion by 2026[3] . Currently, 74% of employers in the United States now offer telemedicine as a covered benefit. Americans ages 45-54 and 65+ are most likely to delay recommended monitoring due to convenience factors, access and wait times. On average, it takes approximately

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StageZero Life Science, Limited Management’s Discussion & Analysis [Expressed in US dollars, unless otherwise noted]

twenty-one (21) days for a new patient to see a primary care provider and 66% of consumers are willing to use Telehealth to get faster service and cost savings. According to the National Business Group on Health Plan Design Survey, the number of large employers offering telemedicine is increasing. 3 Facts & Factors –Global Telehealth Market, June 29 2021

Flat Fee, Up-front Model: The typical path to commercialization of new, novel diagnostics is often lengthy and involves many steps, with limited uptake and adoption. By offering the StageZero Life Sciences diagnostic testing portfolio to high-risk individuals/groups/employers and via telemedicine, we expect to be able to shorten this cycle, thereby driving adoption and increasing utilization of our solutions. By engaging with StageZero Life Sciences to provide blood-based, early cancer risk stratification tests, an individual or employer has access to early-detection technologies and, as a result of our recent acquisition of CareOncology, a holistic solution involving our clinical consultation and monitoring programs. This provides a unique continuum of care that intends to improve outcomes and reduce overall healthcare costs. StageZero Life Sciences charges for each processed sample/consultation up-front and therefore realizes the benefit of reducing the typical working capital constraints associated with a payor model.

Lab Operations: In 2018 we had a request from a local lab to share space with us. At the time we had excess capacity and decided to reduce our footprint and consolidate into approximately twenty-five percent of our leased facility. With the expansion of testing to accommodate the COVID suite of tests as well as the launch of Aristotle, the company needed this space back. As a result, on June 30th, 2021 StageZero reclaimed all of the space previously subleased and re-assumed the full lease costs.

FINANCING ACTIVITIES AND CAPITAL STRUCTURE

On March 3, 2022, the Company closed a private placement of its common shares ("Common Shares") and warrants to purchase Common Shares ("Warrants") with an institutional investor for gross proceeds of $1,470,588 (CAD$1.87 million) (the "Private Placement"). Net with cash finder’s fee and expense allowance totaling $118,143 and clearing fee $15,961, the net proceeds Company received is $1,336,544. Pursuant to the Private Placement, the Company issued 10,000,000 Common Shares and Warrants to purchase up to an aggregate of 10,000,000 Common Shares at a purchase price of CAD$0.187 per Common Share and associated Warrant. Each Warrant will entitle the holder to purchase one Common Share at an exercise price of CAD$0.2206 per Common Share for a period of four years following the issuance date. Pursuant to the private placement, the Company issued 800,000 broker warrants that was in the amount of $112,230 by using Black–Scholes model. The above share issuance cost was allocated to reduce the share capital and warrants liabilities in the amount of $133,163 and $112,111 respectively.

On August 18, 2022, the Company closed a private placement of units (each a “Unit”) for gross proceeds of $137,255 (CAD$177,000) (the "Private Placement"). Each Unit is composed of (i) a $1,000 unsecured convertible debenture (“Debenture”), bearing interest at a rate of 8% per annum, having a term of eighteen (18) months from the date of issuance and is convertible into common shares (“Common Shares”) of the Company, at a conversion price of $0.11 per Common Share, and (ii) 9090 Common Share purchase warrants (each a “Warrant”). Each Warrant is exercisable into one (1) Common Share of the Company at an exercise price of CAD$0.15 per Common Share for a period of eighteen (18) months from the date of issuance of the Units. Securities issued pursuant to the Offering are subject to a statutory hold period lasting four (4) months and a day after the issuance of the securities. The net proceeds of the Private Placement will be used to accelerate the Company's Global Growth Strategy and further support the commercialization of Aristotle® , AVRT and TREAT.

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StageZero Life Science, Limited Management’s Discussion & Analysis [Expressed in US dollars, unless otherwise noted]

can be paid either in cash or by issuing additional shares up to a maximum of 15% of each draw until the fee has been fully paid. The Company has issued shares to GEM in each of the draws in 2023 in lieu of cash. As required by GEM, the Company has a contractual obligation to pay GEM in the amount of $500,000. Should the Company not draw on the commitment, the $500,000 fee would become payable within one year. However, the Company is actively drawing down on the commitment, thereby eliminating the requirement to pay the fee within one year.

On September 2, 2021, the Company acquired 100% of the shares of Clinics Operations Limited (“COL”), a company incorporated in the United Kingdom (“UK”) and, through the Company’s newly incorporated subsidiaries Care Oncology Inc.(“COI”) and Care Oncology Physicians (“COP”), the operating assets of Health Clinics USA Corp., both from Health Clinics Limited (“HCL”), the ultimate parent of both entities for consideration with a fair value of $7,283,837..

The consideration was comprised of: 12,500,000 shares issued on the date of closing, September 2, 2021; 2,500,000 shares that were issued upon the successful acquisition of a Care Quality Commission (“CQC”) license by COL (the “CQC Consideration”), October 22, 2021; and contingent consideration consisting of 8,000,000 common shares, pending approval by the Company’s shareholders ~~,~~ In the event that that approval is not obtained, then up to Cdn$ 16 million cash was to be issued or paid as a royalty, based-upon the revenues from TREAT and AVRT reaching $4M in any 12-month period up until December 31, 2022 (the “Earn Out Consideration”). On December 10, 2021 the shareholders elected to award the issuance of the 8,000,000 common shares upon achieving the Earn Out Consideration. Since the revenue target of $4M was not attained in a continuous 12-month period between September 2021 and December 31, 2022, neither the royalty nor the shares were earned. The shares are subject to a Lock Up Agreement that restricts the Holders’ ability to sell those shares, releasing one third on four months from the closing date, one third on eight months and the final third on the anniversary.

A Special Meeting for the approval of the Contingent Shares or the Royalty was held December 9, 2021. A resolution approving the shares was passed at the meeting.

StageZero was obligated to issue 8,000,000 common shares to Health Clinics Limited contingent upon the achievement of certain milestones and StageZero shareholder approval. While shareholder approval was received on December 10, 2021, at a special meeting, Health Clinics did not meet the milestones and therefore did not receive the 8,000,000 common shares.

OUTLOOK

The heart of the Company’s mission is to improve health outcomes through early detection and intervention. We are uniquely positioned to provide consumers with actionable clinical data for cancer risk detection and intervention. ColonSentry, was the first blood-based, early colorectal cancer diagnostic test to be developed from the Sentinel Principle platform. ColonSentry was validated in both a 9,000-patient prospective study and a 100,000 patient postmarketing study. This study confirmed the strength of the science that underlies the Sentinel Principle platform. Aristotle, our next-generation diagnostic test, can test for multiple cancers from a single sample of blood, with data to date indicating high sensitivity and specificity across a variety of tumor types. The Sentinel Principle platform is therefore proven, not promised.

Access to non-invasive and convenient blood-based tests that can detect disease at its earliest stages is truly innovative, especially when multiple diseases can be detected from a single sample of blood. Aristotle does that, in this case, for multiple cancers and thereby facilitates earlier diagnosis at the population health level. This has implications for selffunded employer plans that have employees in high-risk environments (Fire fighters, oil and gas, coal and chemical plants, pilots and flight attendants, drivers), large healthcare systems, especially those with outreach programs and benefit plans, the military, as well as individual States that have specific populations that need to be screened.

In 2022, we have:

Raised CAD 2.05M in a private placement
Raised CAD 0.3M from capital commitment
Integrated CareOncology into StageZero and started scaling
Launched AVRT in the UK
Extended the availability of the COC Protocol into the European Union

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StageZero Life Science, Limited Management’s Discussion & Analysis [Expressed in US dollars, unless otherwise noted]

Launched COC Plus Program Worldwide
Expanded marketing programs and new lab partners for Aristotle into multiple new cities in the US
Engaged with employers with Aristotle + AVRT cancer screening program
Deepened the Aristotle test offering with the addition of ColoRectal Cancer by stage ie early vs late
Participated in several conferences eg HC Wainwright, keynote speaker at S.E.E. Summit
Successfully submitted proposal offerings to multiple first responder organizations and begun testing first responders

Continuing through the next twelve months, the Company will be focusing on the following:

Drive revenue growth by significantly increasing spend against promotion.
Position Aristotle + AVRT as the #1 program for early cancer detection for employers with at-risk workforces.
Fully implement current partnerships with key employer groups using Aristotle + AVRT.
Present data and analysis with respect to at-risk workforces to demonstrate benefit of Aristotle + AVRT
Broaden relationships with key oncologists and clinics to enhance the reach of CareOncology/Aristotle with a strong focus on HealthCare Systems in multiple key cities.
Continue to broaden and deepen Aristotle eg CRC. lung and breast cancer staging.
Partner and launch in key geographic regions world-wide.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of consolidation

The consolidated financial statements incorporate the financial statements of StageZero Life Sciences and its wholly owned subsidiary companies, StageZero Life Sciences Holdings, Inc. and effective March 15, 2016, StageZero Life Sciences Inc. On September 2, 2021, the Company acquired and now consolidates Clinics Operations, Ltd., CareOncology, Inc. and SZ Physicians Holdings, Inc (collectively referred to as the Company). Subsidiaries are those entities over which the company has control. Control is achieved when the company is exposed to or has rights to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. The financial statements of subsidiaries, including entities that the company controls, are included in the consolidated financial statements from the date that control commences until the date that control ceases. The financial statements of the subsidiaries are prepared for the same reporting periods as StageZero Life Sciences, using consistent accounting policies. Intercompany transactions and balances have been eliminated in full.

Cash

Cash and cash equivalents consist of cash on hand, deposits in banks and highly liquid investments with an original maturity at acquisition of three months or less.

Inventories

Inventories, consisting primarily of purchased laboratory supplies, are stated at the lower of average cost and net realizable value. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the inventory to its present condition. An assessment is made of the net realizable value of inventory at each reporting period. Net realizable value is the estimated selling price less the estimated cost of completion and the estimated costs necessary to make the sale.

Property, plant and equipment

Property, plant and equipment are stated at cost, net of any accumulated depreciation and any impairment losses determined. Cost includes the purchase price, any costs directly attributable to bringing the asset to the location and condition necessary and, where relevant, the present value of all dismantling and removal costs.

An item classified as property, plant or equipment (including any significant part initially recognized) is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on

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derecognition of the asset is included in the consolidated statements of loss and comprehensive loss when the asset is derecognized.

[i] Depreciation

The estimated useful lives and the methods of depreciation are as follows: Asset Method Period Office furniture, equipment and software Straight-line 1 to 7 years Laboratory equipment Straight-line 10 years Leasehold improvements Straight-line Shorter of useful life or remaining lease term

The estimated useful lives most closely reflect the expected pattern of consumption of the future economic benefits embodied in the asset. Where major components of property, plant and equipment have different useful lives, the components are recognized and depreciated separately.

Estimates for depreciation methods, useful lives and residual values are reviewed at each reporting period end and adjusted, if appropriate.

[ii] Subsequent costs

The cost of replacing part of an item classified as property, plant and equipment is recognized when the cost is incurred if it is probable that the future economic benefits will flow to the Company and the cost of the part can be measured reliably. All other repair and maintenance costs are recognized as an expense when incurred.

Goodwill

Goodwill is the residual amount that results when the purchase price of an acquired business exceeds the sum of the amounts allocated to the identifiable assets acquired, less liabilities assumed, based on their fair values. Goodwill is allocated at the date of the business acquisition, to the Company's reporting units that are expected to benefit from the synergies of the business combination. Goodwill is not amortized and is tested annually for impairment, or more frequently if there are changes in circumstances that indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units “ CGU ” ); the Company has determined it has only one CGU. Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at the end of each reporting period.

Impairment of Long-lived Assets

We account for the impairment of long-lived assets in accordance with IAS 36, Impairment of Assets, and IFRS 3, Business Combinations , which require that long-lived assets and certain identifiable intangible assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company’s goodwill and Property, Plant and Equipment are reviewed for an indication of

impairment at the date of each consolidated statement of financial position. If indication of impairment exists, the asset’s recoverable amount is estimated.

An impairment loss is recognized when the carrying amount of an asset or its cash-generating unit (“CGU”) exceeds its recoverable amount. A CGU is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets.

The recoverable amount is the greater of the asset’s fair value less costs to sell or value in use. In assessing fair value less costs to sell for the CGU, recent market transactions are taken into account. Value in use is determined by discounting estimated future cash flows using a pre-tax discount rate that reflects the current market assessment of the time value of money and the specific risks of the asset.

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Provisions

Provisions are recorded when a present legal or constructive obligation exists as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount of the obligation can be made.

The amount recognized as a provision is management’s best estimate of the consideration required to settle the present obligation at the dates of the consolidated statements of financial position, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using an estimate of the cash flows required to settle the present obligation and the effect is material, its carrying amount is calculated from the present value of those cash flows.

Revenue recognition

Revenue is recognized at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for transferring goods or services to a customer.

The principles are applied using the following five steps:

Identify the contract(s) with a customer
Identify the performance obligations in the contract
Determine the transaction price
Allocate the transaction price to the performance obligations in the contract
Recognize revenue when (or as) the entity satisfies a performance obligation

As detailed below, revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when the payment is being made.

Cancer Testing

The Company performs diagnostic blood-based biomarker tests to screen for early cancer detection and risk assessment. Upon completion of the diagnostic tests, the results of the tests are made available to the caregiver and/or patient. The amount of revenue from billings is adjusted with certain third-party payers, considering contractually defined terms of payment, and excluding taxes or duty and ultimate settlements which cannot be reliably estimated until the cash is collected.

COVID Testing

As the COVID-19 pandemic transpired during early fiscal 2020, the Company pivoted to providing COVID-19 assessments using PCR testing and antigen testing, which have been approved on an Emergency Use Authorization (EUA) by the FDA. In addition, the Company also entered into some agreements under which they would provide mobile testing facilities for customers. Revenue is recognized when test reports have been provided to the patient or his or her Physician. Payment received prior to that time is classified as deferred revenue.

Specifically, as it pertains to the provision of mobile testing facilities for the purposes of COVID testing, in assessing the performance obligations, the Company has determined that there are two separate performance obligations in these services, providing a test result from performing the PCR or antigen testing and providing mobile testing facilities. With respect to COVID tests that are sold as kits to customers (via online or retail stores), the Company has determined that there are two separate performance obligations in the course of the transaction, the first is the provision of the sample collection kit and the second is the provision of a report. Lastly, in relation to cancer testing services, the Company has determined that the provision of a report constitutes the only performance obligation. In the majority of instances, the client pays for COVID and Cancer testing in advance of the report being issued. The Company recognizes the revenues from these services when the performance obligation has been fulfilled and collection is reasonably assured.

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StageZero Life Science, Limited Management’s Discussion & Analysis [Expressed in US dollars, unless otherwise noted]

Care Oncology Clinics

Care Oncology Clinics offer telemedicine-based clinical services in the United States and the United Kingdom through two specific programs.

TREAT, based on the METRICS Study (NCT02201381), is a clinically researched and personalized therapeutic regimen administered by experienced oncologists and intended for patients diagnosed with cancer of any type or at any stage, as an adjuvant therapy along with conventional cancer treatment. TREAT employs the patented COC Protocol that intends to interrogate the interconnected intracellular pathways involved in cancer cell growth, proliferation, apoptosis, and angiogenesis, by focusing on metabolic pathways.
AVRT is a patient-centric, personalized care plan that specializes in identifying and treating the early warning signs of cancer and other chronic diseases. Created by the physicians and scientists who developed the COC Protocol, AVRT uses similar approaches to detect and target the inflammatory and metabolic pathways that have been demonstrated to increase the risk of developing cancer and other chronic diseases.

Care Oncology Clinics earn revenue, paid in advance by patients, related to the provision of supplemental care beyond that of the patient’s primary Oncologist. In the United States, the provision of these services also includes the provision of three months of nurse support services, which is not offered in the UK. The Company has identified two performance obligations in the U.S. related to the consultation with the Oncologist and the ongoing Nurse Support. Revenue related to the Oncologist appointment is recognized at a point in time, at the conclusion of the appointment, whereas revenue related to the ongoing Nurse Support is deferred and recognized over the three-month committed term. In the UK, there is only one performance obligation, the provision of the Oncologist consultation. In both the US and the UK, the revenue related to the Oncologist consultations is recognized at the conclusion of the appointment.

COVID 19

The Company’s operations could be significantly adversely affected by the effects of a widespread global outbreak of a contagious disease, including the recent outbreak of respiratory illness caused by COVID-19. The Company cannot accurately predict the impact COVID-19 will have on its operations and the ability of others to meet their obligations with the Company, including uncertainties relating to the ultimate geographic spread of the virus, the severity of the disease, the duration of the outbreak, and the length of travel and quarantine restrictions imposed by governments of affected countries. In addition, a significant outbreak of contagious diseases in the human population could result in a widespread health crisis that could adversely affect the economies and financial markets of many countries, resulting in an economic downturn that could further affect the Company’s operations and ability to finance its operations. During 2022, the Company experienced a decrease in revenue related to COVID-19 and has no guarantee of future related financial performance.

The Company recognizes the revenues from these services when the performance obligation has been fulfilled and collection is reasonably assured.

ollection is reasonably assured.
	Year ended December 31, 2022	Year ended December 31, 2021
	$	$
Laboratory Testing	768,824	3,863,018
Clinical Consultation	3,026,252	1,205,138
Total	3,795,076	5,068,156

Leases

At the inception of a contract, we assess whether a contract is, or contains a lease, by determining whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, we assess whether:

the contract involves the use of an identified asset;
we have the right to obtain substantially all of the economic benefits from use of the identified asset throughout the period of use; and
we have the right to direct the use of the identified asset.

A right-of-use asset and corresponding lease liability are recognized on the lease commencement date. The right-ofuse asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease

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StageZero Life Science, Limited Management’s Discussion & Analysis [Expressed in US dollars, unless otherwise noted]

payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received. The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term. In addition, the right-of-use asset is reduced by impairment losses and adjusted for certain remeasurements of the lease liabilities, if any.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date. The lease payments are discounted using the implicit interest rate in the lease. If the rate cannot be readily determined, our incremental rate of borrowing is used. The lease liability is subsequently measured at amortized cost using the effective interest method. The lease liability is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in our estimate of the amount expected to be payable under a residual value guarantee, if we change our assessment of whether we will exercise a purchase, extension, or termination option, or if the underlying lease contract is amended.

We have elected not to separate fixed non-lease components from lease components and instead account for each lease component and associated fixed non-lease components as a single lease component.

We have elected not to recognize right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less. We recognize the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

Income taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using substantively enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are recorded if it is more likely than not that the asset will be realized.

The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the consolidated statements of loss and comprehensive loss in the period that includes the enactment date. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions, where appropriate.

Foreign currency transactions

Foreign currency transactions are translated into US dollars using exchange rates in effect at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into US dollars using the exchange rate in effect at the measurement date. Non-monetary assets and liabilities denominated in foreign currencies are translated into US dollars using the historical exchange rate or the exchange rate in effect at the measurement date for items recognized at fair value through foreign exchange gain or loss. Gains and losses arising from foreign exchange are included in the consolidated statements of loss. The Company translates the financial statements of foreign operation to the presentation currency. Items in the statement of loss of foreign operation are translated into the presentation currency using the average exchange rate for the year, and assets and liabilities are translated using the year-end rate; all resulting exchange differences are included into other comprehensive income.

Loss per share

Basic loss per share is computed by dividing loss attributable to common shareholders by the weighted-average number of common shares outstanding during the reporting period. Diluted earnings per share are computed by dividing the net income attributable to common shareholders (after adjusting for interest on the convertible debentures) by the weighted-average number of common shares outstanding during the year plus the weighted-average number of common shares that would be issued on conversion of all the dilutive potential shares into common shares. When

there is a loss, inclusion of the Company’s stock options, convertible debentures and the warrants in the computation of diluted loss per share would have an antidilutive effect on the loss per share. Consequently, the Company has

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StageZero Life Science, Limited Management’s Discussion & Analysis [Expressed in US dollars, unless otherwise noted]

excluded these from the calculation of diluted loss per share. Consequently, there is no difference between basic loss per share and diluted loss per share.

Common shares

Common shares are classified as equity. Incremental costs directly attributable to the issue of common shares are recognized as a deduction from equity, net of any tax effects.

Share-based payment transactions

Share-based payments include payments to employees and payments to non-employees. Payments to employees are measured at the fair value of the instruments issued and amortized over the vesting periods. Share-based payments to non-employees are measured at the fair value of goods or services received or the fair value of the equity instruments issued, if it is determined the fair value of the goods or services cannot be reliably measured and are recorded at the date the goods or services are received.

The Company has established a stock option plan to grant non-transferable equity settled options to purchase Common Shares to directors, officers, employees of and consultants to the Company. The number of Common Shares reserved for issuance will not exceed 10% of the total issued and outstanding Common Shares of the Company. The Company has the ability to grant for a maximum period of ten years from the date of grant.

Stock options vest over periods ranging from immediate to two years. The fair value of each option is measured at the date of grant using the Black-Scholes option pricing model and recorded as a compensation expense in the period the options are vested, or the performance is complete. The number of awards expected to vest is reviewed at least annually, with any impact being recognized immediately.

Any consideration paid on exercise of stock options or broker warrants is credited to share capital. On the expiry of stock options, any amount related to the initial value of the stock option remains in contributed surplus. Broker warrants have been treated as issuance costs in accounting for the related financial instruments. Accordingly, when a broker warrant expires there is no reclassification.

Other comprehensive income (loss)

Other comprehensive income (loss) is the change in the Company’s net assets that results from transactions, events, and circumstances from sources other than the Company’s shareholders and includes items that would not normally be included in profit or loss.

Financial instruments

Recognition and initial measurement

The Company recognizes a financial asset or financial liability on the consolidated statement of financial position when it becomes party to the contractual provisions of the financial instrument. Financial assets are initially measured at fair value, and are derecognized either when the Company has transferred substantially all the risks and rewards of ownership of the financial asset, or when cash flows expire. Financial liabilities are initially measured at fair value and are derecognized when the obligation specified in the contract is discharged, cancelled, or expired.

A write-off of a financial asset (or a portion thereof) constitutes a derecognition event. Write-off occurs when the Company has no reasonable expectations of recovering the contractual cash flows on a financial asset.

Classification and measurement

The Company determines the classification of its financial instruments at initial recognition. Financial assets are classified according to the following measurement categories:

i) amortized cost; or
ii) those to be measured subsequently at fair value, either through profit or loss (“FVTPL”) or through other comprehensive income (“FVTOCI”).

The classification and measurement of financial assets after initial recognition at fair value depends on the business model for managing the financial asset and the contractual terms of the cash flows. Financial assets that are held within

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StageZero Life Science, Limited Management’s Discussion & Analysis [Expressed in US dollars, unless otherwise noted]

a business model whose objective is to collect the contractual cash flows, and that have contractual cash flows that are solely payments of principal and interest on the principal outstanding, are generally measured at amortized cost at each subsequent reporting period. All other financial assets are measured at their fair values at each subsequent reporting period, with any changes recorded through profit or loss or through other comprehensive income (which designation is made as an irrevocable election at the time of recognition).

After initial recognition at fair value, financial liabilities are classified and measured at either:
i) amortized cost; or
ii) FVTPL, if the Company has made an irrevocable election at the time of recognition, or when required (for items such as instruments held for trading or derivatives).

The Company reclassifies financial assets when and only when its business model for managing those assets changes. Financial liabilities are not reclassified.

Transaction costs that are directly attributable to the acquisition or issuance of a financial asset or financial liability subsequently measured at amortized cost or FVTOCI are included in the fair value of the instrument on initial recognition. Transaction costs for financial assets and financial liabilities classified at fair value through profit or loss are expensed in profit or loss.

The Company classifies its financial instruments by category according to their nature and their characteristics. Management determines the classification when the instruments are initially recognized, which is normally the date of the transaction. The Company classifies its financial assets and financial liabilities as outlined below:

Assets / liabilities	Category	Measurement
Assets
Cash	AMC	Amortized cost
Trade receivables	AMC	Amortized cost
Other receivables	AMC	Amortized cost
Liabilities
Trade and other payable	Other financial liabilities	Amortized cost
Contingent Consideration Liability	FVTPL	Fair Value
Warrants liability	FVTPL	Fair value
Note payables	Other financial liabilities	Amortized cost
Long-term loan	Other financial liabilities	Amortized cost
Convertible debenture	FVTPL	Fair value

Impairment of financial assets

The Company assesses all information available, including on a forward-looking basis, the expected credit losses

Associated with any financial assets carried at amortized cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk. To assess whether there is a significant increase in credit risk, the Company compares the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition based on all information available, and reasonable and supportive forward-looking information.

Derivative financial instruments

An embedded derivative is separated from the host contract and recognized separately if the economic characteristics and risks of the embedded derivative are not closely related to those of the host, if a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative, and if the combined instrument is not measured at fair value, with changes in fair value recognized in profit or loss.

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[Expressed in US dollars, unless otherwise noted]

The fair value of a financial instrument is the amount of consideration that would be agreed upon in an arm’s-length transaction between knowledgeable, willing parties who are under no compulsion to act. Fair values are determined based on prevailing market rates for instruments with similar characteristics and risk profiles.

The Company categorizes its fair value measurements according to a three-level hierarchy. The hierarchy prioritizes the inputs used by the Company’s valuation techniques. A level is assigned to each fair value measurement based on the lowest-level input significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy are defined as follows:

Level 1 – unadjusted quoted prices as at the measurement date for identical assets or liabilities in active markets.

Level 2 – observable inputs other than quoted prices included in level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Level 3 – significant unobservable inputs that are supported by little or no market activity.

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

Warrant liability

The Company’s common share warrants other than warrants issued as compensation are recorded in accordance with IFRS 2, Share-Based Payments, are considered to be derivative liabilities due to the warrants being exercisable in a currency (Cdn$) other than the functional currency of the Company (US dollar). Accordingly, the warrants are measured at fair value at each reporting date, with changes in fair value included in the consolidated statements of loss and comprehensive loss for the applicable reporting period. The warrants are measured at fair value on issuance and remeasured at fair value at each occurrence of an exercise or extension.

Business Combinations

Business combinations are accounted for using the acquisition method. Under this method, the identifiable assets acquired, and liabilities assumed, including contingent liabilities, are recognized, regardless of whether they have been previously recognized in the acquiree’s financial statements prior to the acquisition. On initial recognition, the assets and liabilities of the acquired entity are included in the consolidated statements of financial position at their respective fair values. Goodwill is recorded based on the excess of the fair value of the consideration transferred over the fair value of the Company’s interest in the acquiree’s net identifiable assets on the date of the acquisition. Any excess of the identifiable net assets over the consideration transferred is immediately recognized in the consolidated statements of loss.

The consideration transferred by the Company to acquire control of an entity is calculated as the sum of the acquisition-date fair values of the assets transferred, liabilities incurred and equity interests issued by the Company,

including the fair value of all the assets and liabilities resulting from a deferred payment arrangement. Acquisitionrelated costs are

expensed as incurred. Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the Company’s weighted average cost of capital, is calculated by estimating a specific company risk premium over the risk-free rate. Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are subsequently remeasured to fair value, with changes in fair value recognized in profit or loss.

Significant accounting estimates and assumptions

The preparation of the consolidated financial statements requires the use of estimates and assumptions to be made in applying the accounting policies that affect the reported amounts of assets, liabilities, revenue and expenses and the disclosure of contingent assets and liabilities. The estimates and related assumptions are based on previous experiences

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StageZero Life Science, Limited Management’s Discussion & Analysis [Expressed in US dollars, unless otherwise noted]

and other factors considered reasonable under the circumstances, the results of which form the basis for making the assumptions about the carrying values of assets and liabilities that are not readily apparent from other sources.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

Significant accounts that require estimates as the basis for determining the stated amounts include share-based compensation, impairment analysis and fair value of warrants, structured notes, convertible debt and conversion liabilities.

[i] Share-based compensation

The Company measures the cost of equity-settled transactions with employees by reference to the fair value of equity instruments at the date at which they are granted. Estimating fair value for share-based payments requires determining the most appropriate valuation model for a grant of such instruments, which is dependent on the terms and conditions of the grant. The estimate also requires determining the most appropriate inputs to the Black-Scholes option pricing model, including the expected life of the instrument, risk-free rate, volatility, and dividend yield.

[ii] Fair value of warrants
In determining the fair value of the warrant liability, the Company used the Black-Scholes option pricing model with the following assumptions: volatility rate, dividend yield, risk-free rate, and the remaining expected life of the warrant. The inputs used in the Black-Scholes model are taken from observable markets. In particular, changes in the fair value of the warrants can have a material impact on the reported loss and comprehensive loss for the applicable reporting period.

[iii] Fair value of convertible debt

In determining the fair values of the convertible debt, the Company has irrevocably designated to measure the entire instrument at fair value through profit or loss and did not bifurcate the embedded conversion option. The value was determined using a combined approach to value the debt using a market discount rate and a Black Scholes model with the following assumptions: volatility rate, risk-free rate and the remaining expected life. Changes in those assumptions and inputs could in turn impact the fair value of the convertible notes and can have a material impact on the reported loss and comprehensive loss for the applicable reporting period.

(iv) Fair value of contingent consideration

In measuring the fair value of the contingent consideration, the Company utilized a Monte Carlo simulation model due to the uncertain nature of potential future revenue scenarios and the share price of the Company when the earnout provision expired. The earnout conditions were not met by December 31, 2022. Consequently the contingent consideration at December 31, 2022 is nil.

the requisite revenue target is met. The Monte Carlo model uses inputs of volatility of equity and assets, risk free rate and an overall discount rate. Changes in those inputs and assessment of the potential future revenue scenarios and share price could impact the measurement of the fair value of the contingent consideration and have a material impact on the reported loss and comprehensive loss for the applicable reporting period.

[v] Functional currency

Determining the appropriate functional currencies for entities in the Company requires analysis of various factors, including the currencies and country-specific factors that mainly influence sales prices, and the currencies that mainly influence labour, materials, and other costs of providing goods or services.

[vi] Useful life of property, plant and equipment and intangible assets with finite useful lives

The Company employs significant estimates to determine the estimated useful lives of property, plant and equipment and intangible assets with finite useful lives, considering industry trends such as technological advancements, past experience, expected use and review of asset useful lives. Components of an item of property,

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plant and equipment may have different useful lives. The Company makes estimates when determining depreciation methods, depreciation rates and asset useful lives, which requires considering industry trends and company-specific factors. The Company reviews depreciation methods, useful lives and residual values annually or when circumstances change and adjusts its depreciation methods and assumptions prospectively.

[vii] Goodwill impairment testing and recoverability of long-lived assets Goodwill and long-lived assets are reviewed annually for impairment, or more frequently when there are indicators that impairment may have occurred, by comparing the carrying value to their recoverable amounts. The recoverable amounts of the CGU were estimated based on an assessment of value in use using a discounted cash flow approach and fair value less costs to sell. The approach uses cash flow projections based upon a financial forecast approved by management, covering a two to three-year period. Cash flows for the years thereafter are extrapolated using the estimated terminal growth rate for value in use for impairment analysis. Cash flows for the terminal period for fair value less costs to sell impairment analysis is determined using an existing multiple. The risk premiums expected by market participants related to uncertainties about the industry and assumptions relating to future cash flows may differ or change quickly, depending on economic conditions and other events.

The determination of a CGU is based on management’s judgment and is an assessment of the smallest group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets.

[viii] Business combinations

In a business combination, all identifiable assets, liabilities, and contingent liabilities acquired are recorded at their fair values. One of the most significant estimates relates to the determination of the fair value of these assets and liabilities. For any intangible asset identified, depending on the type of intangible asset and the complexity of determining its fair value, an independent valuation expert or management may develop the fair value, using appropriate valuation techniques, which are generally based on a forecast of the total expected future net cash flows. The evaluations are linked closely to the assumptions made by management regarding the future performance of the assets concerned and any changes in the discount rate applied.

Further, significant judgments are necessary in assessing the taxable status of the business combinations, which has a direct correlation to the recognition of a deferred tax liability for any difference in basis between tax and accounting, and corresponding amount in goodwill. An assessment by a tax authority that concluded differently could materially change the deferred tax amounts. The Company bases its judgments on its assessment of the facts of the underlying contractual agreements.

Certain fair values may be estimated at the acquisition date pending confirmation or completion of the valuation process. Where provisional values are used in accounting for a business combination, they may be adjusted retrospectively in subsequent periods. The measurement period ends as soon as the Company receives the information it was seeking about facts and circumstances that existed as of the acquisition date or learns that more information is not obtainable. However, the measurement period shall not exceed one year from the acquisition date.

[viii] Provisions

Provisions are recognized when the Company has a present obligation, legal or constructive, as a result of a previous event, if it is probable that the Company will be required to settle the obligation and a reliable estimate can be made of the obligation. The amount recognized is the best estimate of the expenditure required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligations. Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate of the expected future cash flows.

[ix] Contingencies

Contingencies can be either possible assets or possible liabilities arising from past events, which, by their nature, will be resolved only when one or more uncertain future events occur or fail to occur. The assessment of the

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existence and potential impact of contingencies inherently involves the exercise of significant judgment and the use of estimates regarding the outcome of future events.

[x] Inventory obsolescence

Inventories are stated at the lower of cost and estimated net realizable value. The Company estimates net realizable value as the amount at which inventories are expected to be sold, taking into consideration fluctuations in retail prices less estimated costs necessary to make the sale. Inventories are written down to net realizable value when the cost of inventories is estimated to be unrecoverable due to obsolescence, damage, or declining selling prices.

[xi] Income and other taxes

The calculation of current and deferred income taxes requires the Company to make estimates and assumptions and to exercise judgment regarding the carrying values of assets and liabilities which are subject to accounting estimates inherent in those balances, the interpretation of income tax legislation across various jurisdictions, expectations about future operating results, the timing of reversal of temporary differences and possible audits of income tax filings by the tax authorities. In addition, when the Company incurs losses for income tax purposes, it assesses the probability of taxable income being available in the future based on its budgeted forecasts. These forecasts are adjusted to take into account certain non-taxable income and expenses and specific rules on the use of unused credits and tax losses.

Significant accounting estimates and assumptions (continued)

When the forecasts indicate that sufficient future taxable income will be available to deduct the temporary differences, a deferred tax asset is recognized for all deductible temporary differences. Changes or differences in underlying estimates or assumptions may result in changes to the current or deferred income tax balances on the consolidated statements of financial position, a charge or credit to income tax expense included as part of net income (loss) and may result in cash payments or receipts. Judgment includes consideration of the Company’s future cash requirements in its tax jurisdictions. All income, capital and commodity tax filings are subject to audits and reassessments. Changes in interpretations or judgments may result in a change in the Company’s income, capital, or commodity tax provisions in the future. The amount of such a change cannot be reasonably estimated.

Accounting standards, amendments, and interpretations not yet adopted or effective

Certain new standards, amendments and interpretations have been issued but are not yet effective for the Company’s consolidated financial statements for the periods presented. The Company has not early adopted any standards, amendments, or interpretations, which are issued but not yet effective.

IAS 1 Presentation of Financial Statements ("IAS 1") was amended in January 2020 to address inconsistences with how entities apply the standard over classification of current and non-current liabilities. The amendment serves to address whether, in the statement of financial position, debt and other liabilities with an uncertain settlement should be classified as current or non-current. This amendment is effective on January 1, 2023. Earlier adoption is permitted. The Company will adopt this amendment as of the effective date and is currently assessing the impact of adoption.

Newly adopted standards

The recently adopted standards effective on January 1, 2020 that do not have a material effect on the Company’s consolidated financial statements have been omitted.

IAS 37 Provisions, Contingent Liabilities and Contingent Assets was amended in May 2020 to clarify the costs a company should include as the cost of fulfilling a contract when assessing whether a contract is onerous. The amendment is effective January 1, 2022. The Company evaluated this amendment and decided there is no impact upon adoption.

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StageZero Life Science, Limited Management’s Discussion & Analysis [Expressed in US dollars, unless otherwise noted]

IAS 16 Property, Plant and Equipment was amended in May 2020 to prohibit deducting from the cost of an item of property, plant, and equipment any proceeds from selling items produced while bringing that asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Instead, an entity recognises the proceeds from selling such items, and the cost of producing those items, in profit or loss. The amendment is effective January 1, 2022.The Company evaluated this amendment and decided there is no impact material to the financial statements.

FINANCIAL INSTRUMENTS AND FINANCIAL RISK-MANAGEMENT OBJECTIVES AND POLICIES

We are exposed to liquidity, credit and market risks; the management of these is overseen by the Company’s senior management.

Financial instruments

The fair value of warrants is estimated using the Black-Scholes option pricing model incorporating various inputs including the underlying price volatility and discount rate, [see note 9 ]. All other notes payable and convertible debentures were initially recognized at fair value, and subsequently they were measured at amortized cost using the effective interest rate method, whereby the fair value of the notes payable approximates their carrying value. As at December 31, 2022, the Company’s warrant liability, conversion liability and notes payable, are carried on the consolidated statements of financial position at fair value, warrant liability has been classified as Level 2, conversion liability and notes payable have been classified as Level 3, in the fair value hierarchy.

Liquidity risk

Liquidity risk represents the contingency that the Company is unable to gather the funds required with respect to our financial obligations at the appropriate time and under reasonable conditions. The Company attempts to manage this risk to ensure that it has sufficient liquidity at all times to be able to honor our current and future financial obligations under normal conditions and in exceptional circumstances. Financing strategies to ensure the management of this risk include accessing the capital markets through the issuance of equity or debt securities.

The Company’s ability to continue as a going concern depends upon its ability to achieve profitable operations and raise additional capital. In the past three years, the Company has earned limited revenue. During 2019 and 2020, the Company completed a series of common share, structured notes payable, capital commitment, common share and warrant and convertible debenture financings. The Company expects to continue to pursue further financings as planned or until adequate cash flow from operations occurs.

The following table summarizes the maturity profile of our financial instruments:

	Financial	instrument maturationperiods	instrument maturationperiods	instrument maturationperiods
	1 year or less	1 to 5	years	5 years or more	Total
At December 31, 2022	$		$	$	$
Financial assets
Cash	15,684		-	-	15,684
Trade and other receivables	31,243		-	-	31,243
Financial liabilities
Trade and other payables	5,473,382		-	-	5,473,382
Note payable	852,281	480,000		735,844	2,068,125

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StageZero Life Science, Limited Management’s Discussion & Analysis [Expressed in US dollars, unless otherwise noted]

Short-term loans	61,746	-	-	61,746
Long-term loans	-	44,544		44,544
Short-term liabilities	67,340	-	-	67,340
	Financial	instrument maturationperiods
	1 year or less	1 to 5 years	5 years or more	Total
At December 31, 2021	$	$	$	$
Financial assets
Cash	1,724,724	-	-	1,724,724
Trade and other receivables	126,897	-	-	126,897
Financial liabilities
Trade and other payables	2,073,098	-	-	2,073,098
Note payable	358,389	480,000	960,000	1,798,389
Long-term liabilities	-	67,340	-	67,340

Credit risk

The Company’s financial assets that are exposed to credit risk consist primarily of cash and other receivables. Cash consists of deposits with major commercial banks and is therefore subject to minimal credit risk.

Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises foreign exchange rate risk and interest rate risk.

Foreign exchange rate risk

The Company operates in the United Kingdom, Canada and the United States and transacts business primarily with US partners and suppliers. During the year ended December 31, 2021, a 5% appreciation (depreciation) in the Cdn$ to US dollar foreign exchange rate, with all else being equal, would have affected net income by approximately $59,294 [December 31, 2021 – $65,813]; in the UK GBP to US dollar foreign exchange rate, with all else being equal, would have affected net income by approximately $19,618. The Company’s exposure to foreign currency changes for all other currencies is not material.

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 interest rate for the Company’s notes payable to HDL was renegotiated during the first quarter of 2016 and interest began to be accrued at Wall Street Journal Prime Rate plus 4.00% per annum effective April 1, 2016, while the note payable to a shareholder and director as was issued in 2016 is fixed at 2% per annum, the notes payable to shareholders and director, issued after 2017 are fixed at 5% per annum, and the convertible debentures are fixed at 8%.

The remeasurement of the February 2020 Convertible Debentures requires reassessment of the appropriate discount rate at each reporting period in determining the fair value. That discount rate could fluctuate depending on changes in interest rates as well as changes in the Company’s credit risk. A 2% increase or decrease in the discount rate would have had an immaterial impact on the fair value of the instrument as at December 31, 2021.

Accordingly, there have been no significant impacts on the Company’s consolidated statements of loss and comprehensive loss from changes in interest rates.

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StageZero Life Science, Limited Management’s Discussion & Analysis [Expressed in US dollars, unless otherwise noted]

SELECTED FINANCIAL INFORMATION

The following table sets forth selected financial information for the periods indicated:

Consolidated statements of financial position

Consolidated statements of financial position
	Year ended
	At December 31, 2022	At December 31, 2021
(in thousands of dollars)	$		$
Cash	16		1,724
Total current assets	267		2,385
Total non-current assets	434		8,261
Total assets	701		10,646
Total current liabilities	7,026		4,745
Total non-current liabilities	1,177		3,140
Total liabilities	8,204		7,884
Total shareholders’(deficiency)equity	(7,503)		2,762
Total liabilities and shareholders’(deficiency)equity	701		10,646

Results of operations for the years ended December 31, 2022 and 2021

	Year ended December 31,
	2022	2021
(in thousands of US dollars, except per-share amounts)	$	$
Revenue
Total revenues	3,795	5,068
Cost of revenue	4,199	3,890
Grossprofit	(404)	1,178
Expenses
Research and Development	352	775
Sales and Marketing	747	1,244
General and administrative	6,244	7,122
Impairment of Goodwill	7,364	-
Loss/(Gain) from revaluation of warrants	(2,179)	(2,575)
Loss/(Gain) from revaluation of Contingent Consideration	(1,833)	(458)
Change in fair value of convertible debenture	32	1,118
Finance costs	284	1,436
Total expenses	11,011	8,662
Total loss and comprehensive loss, net of tax, for theperiod	(11,415)	(7,484)
Basic and diluted lossper common share	(0.11)	(0.11)

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StageZero Life Science, Limited Management’s Discussion & Analysis [Expressed in US dollars, unless otherwise noted]

For the year ended December 31, 2022, we reported a consolidated net loss of $11.5 million, or $0.11 loss per common share, as compared with a consolidated net loss of $7.5 million, or $0.11 loss per common share for the same period in 2021.

Cost of revenue

Cost of revenue
	Year ended December 31,		(Decrease)
	2022	2021	Increase
	$	$	$
Direct labour	2,173,474	1,106,909	1,066,565
Direct materials	630,865	1,334,144	(703,279)
Indirect labour	502,369	489,841	12,528
Overhead	892,113	959,778	(67,665)
Total cost of revenue	4,198,821	3,890,672	308,149

Total cost of revenue increased by 8% for the year ended December 31, 2022, compared with the same period in 2021.

General and Administrative Expenses

	Year ended December 31,		(Decrease)
	2022	2021	Increase
	$	$	$
Salary and Benefit	2,867,417	2,865,984	1,433
Share-based compensation	238,507	373,842	(135,335)
Public entity costs	312,894	765,889	(452,995)
Professional fees	1,502,322	1,753,520	(251,198)
Depreciation	35,814	38,392	(2,579)
Foreign exchange loss	(87,433)	(167,693)	80,260
Other office-related costs	1,375,095	1,492,401	(117,306)
Total general and administrative expenses	6,244,616	7,122,335	(877,720)

Total general and administrative expenses decreased for the year ended December 31, 2022, compared with the same period in 2021 mainly due to organization restructure.

Finance costs

Finance costs for the year ended December 31, 2022 were $284,069 as compared with $1,436,091 in 2021, a decrease primarily due to reduced finance activities in 2022.

Finance costs for the year ended December 31, 2022 and 2021 are as follows:

	Year ended	December 31
	2022	2021
	$	$
Interest on note payable to HDL	107,923	106,427
Interest on note payable to shareholder and director	21,392	10,000
Interest on convertible debenture and note payables	44,190	9,199
Interest costs on lease liability	45,703	74,682

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StageZero Life Science, Limited Management’s Discussion & Analysis [Expressed in US dollars, unless otherwise noted]

Transaction costs relating to issuance of financial instruments	64,861	-
Transaction costs due to acquisition	-	1,235,783
Total	284,069	1,436,091

USE OF PROCEEDS

The Company began the period with $1.7 million in available funds. During the year ended December 31, 2022, $3.5 million of the funding was used in support of operations. During the same period, we received proceeds of $1.3 million from private placement, $0.4 million from note payable, $0.2 million from issuance of shares and warrants for capital commitment , $0.1 million cash proceeds from convertible debenture offset by a $0.04 million payment of principal of the note payable to HDL, $0.3 repayment of lease liability. The Company closed the year with $0.02 million in available funds.

The planned use of proceeds from financings continues to be the expansion of StageZero’s telehealth platform, increased digital marketing of our products, product launches (notably, Aristotle® and AVRT), research and development to broaden and deepen the capabilities of Aristotle and for general corporate purposes. The COVID-19 pandemic and associated business challenges, as well as the subsequent opportunity to introduce COVID-19 testing, directed the Company to add COVID-19 tests to StageZero’s product line up in 2020, scale up its laboratory in Richmond and launch COVID-19 testing via StageZero’s existing telehealth system.

EBITDA and Adjusted EBITDA

Earnings before interest, taxes, depreciation, and amortization (“EBITDA”) and adjusted earnings before interest, taxes, depreciation, and amortization (“Adjusted EBITDA”) are not recognized performance measures under IFRS. EBITDA and Adjusted EBITDA do not have standardized meanings under IFRS and therefore may not be comparable to similar measures presented by other issuers. The term EBITDA consists of net income (loss) and excludes interest, finance costs, taxes, depreciation, and amortization. Adjusted EBITDA also excludes share-based compensation, impairment of assets, revaluation of warrants, changes in fair value of conversion debenture and public entity costs. EBITDA and Adjusted EBITDA are included as supplemental disclosures because Management believes that these disclosures provide a better assessment of the Company’s continuing operations by eliminating non-cash costs and costs or gains that are not recurring.

The following is the Adjusted EBITDA and a reconciliation of the Company’s net income (loss) to EBITDA and Adjusted EBITDA for the twelve-month period ended December 31, 2022 and 2021:

Adjusted EBITDA (in thousands of dollars) Revenue Cost of revenue Gross profit Expenses Research and development Sales and marketing General and administrative costs Total Expenses	Years ended December 31
	2022 2021 3,795 5,068 4,199 3,891 (404) 1,177 352 775 747 1,244 6,245 7,123 7,344 9,142
Adjusted EBITDA	(7,748) (7,964)

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StageZero Life Science, Limited Management’s Discussion & Analysis [Expressed in US dollars, unless otherwise noted]

Reconciliation of EBITDA and Adjusted EBITDA
Net loss and comprehensive loss for period	(11,415)	(7,483)
Interest	219	200
Finance costs	64	1,436
EBITDA	(11,114)	(5,848)
Revaluation of warrants	(2,179)	(2,575)
Revaluation of Contingent Consideration	(1,833)	(458)
Change in fair value of convertible debenture	32	1,118
Impairment of Goodwill	7,364	-
Foreign exchange	(87)	(201)
Non-cash charges	3,384	(2,116)
Adjusted EBITDA	(7,748)	(7,964)

LIQUIDITY AND CAPITAL RESOURCES Summary of cash flows	Years ended December 31
	2022 2021 $ $
Cash flows related to operating activities Cash flows related to financing activities Cash flows related to investingactivities	(3,528,756) (8,954,863) 1,832,726 4,103,365
	- (20,965)

Operating activities

The use of cash and cash equivalents in operating activities in the year ended December 31, 2022 was consistent with that of 2021.

Financing activities

As previously described in the section “Financing Activities and Capital Structure” the following tables summarize the relevant activities in the year end December 31, 2022.

Accounted through shareholders’ deficiency

Share capital	Share capital
	Shares #	Amount $
	[note 10[b]]
Balance at January 1, 2022	90,733,283	100,520,978
Issuance of common shares in capital commitment	4,731,328	206,004
Issuance of common shares with private placement	10,000,000	798,406
Share issuance costs	-	(133,163)
Balance at December 31, 2022	105,464,611	101,392,225

==> picture [468 x 63] intentionally omitted <==

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StageZero Life Science, Limited Management’s Discussion & Analysis [Expressed in US dollars, unless otherwise noted]

		Share capital
	Shares	Amount
	#	$
	[note 10[b]]
Balance at January 1, 2021	60,716,595	89,332,865
Issuance of common shares with warrant exercise	2,181,617	2,223,893
Issuance of common shares with option exercise	258,332	243,052
Issuance of common shares with acquisition	15,000,000	4,992,750
Issuance of common shares with private placement	9,375,002	1,865,222
Conversion of convertible note payable	3,201,737	2,131,510
Share issuance costs	-	(268,314)
Balance at December 31, 2021	90,733,283	100,520,978

[[i] Unit Private Placement on November 26, 2021

The Company has closed its previously announced private placement of its common shares (“Common Shares”) and warrants to purchase Common Shares (“Warrants”) with institutional investors for gross proceeds of $3,377,021 (CAD$4.2 million) (the “Private Placement”). Net with cash finder’s fee and expense allowance totaling $253,562 and clearing fee $16,250, the net proceeds Company received is $3,107,209. Pursuant to the Private Placement, the Company issued 9,375,002 Common Shares and Warrants to purchase up to an aggregate of 9,375,002 Common Shares at a purchase price of CAD$0.448 per Common Share and associated Warrant. Pursuant to the private placement, the Company incurred legal expenses in the amount of $60,097 and issued 750,000 broker warrants that was in the amount of $155,029 by using Black–Scholes model (Note 9). The above share issuance cost was allocated to reduce the share capital and warrants liabilities in the amount of $268,314 and $216,624 respectively.

[ii] Unit Private Placement on March 3, 2022

The Company closed a private placement of its common shares and warrants to purchase Common Shares with an institutional investor for gross proceeds of $1,470,588 (CAD$1.87 million) (the "Private Placement"). Net with cash finder’s fee and expense allowance totaling $118,143and clearing fee $15,901, the net proceeds Company received is $1,336,544. The Company issued 10,000,000 Common Shares and Warrants to purchase up to 10,000,000 Common Shares at a purchase price of CAD$0.187 per Common Share and associated Warrant. Each Warrant will entitle the holder to purchase one Common Share at an exercise price of CAD$0.2206 for a period of four years following the issuance date. The Company also issued 800,000 broker warrants that was in the amount of $111,230 by using Black– Scholes model (Note 8). The above share issuance cost was allocated to reduce the share capital and warrants liabilities in the amount of $133,163 and $112,111 respectively.

[iii] Capital commitment agreement

On November 21, 2022, the Company announced that it had entered into a capital commitment agreement with GEM Global Yield Fund LLC SCS (“GEM”) for a Cdn$25 million Capital Commitment. Proceeds raised from the investment will be used for working capital and general corporate purposes, but especially to expand collaborations with employers, clinic and healthcare systems, and the insurers who support them. In December 2022, the Company issued 4,731,328 common shares and 4,731,328 warrants and received $206,004 (Cdn$280,000) under the agreement. The commitment by GEM will provide funding up to CDN$25 million. The fee charged by GEM for the $25 million commitment is 2% or $500,000, which can be paid to them over the period that the funding is drawn down. The fee can be paid either in cash or by issuing additional shares up to a maximum of 15% of each draw until the fee has been fully paid. The Company has issued shares to GEM in each of the draws in 2023 in lieu of cash. As required by GEM, the Company has a contractual obligation to pay GEM in the amount of $500,000. Should the Company not draw on the commitment, the $500,000 fee would become payable within one year. However, the Company is actively drawing down on the commitment, thereby eliminating the requirement to pay the fee within one year.

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StageZero Life Science, Limited Management’s Discussion & Analysis [Expressed in US dollars, unless otherwise noted]

Stock options

There were 6,865,524 [December 31, 2021 –6,019,899 ] options outstanding; 6,865,524 [2021 – 5,019,899 ] of which were vested and exercisable at a weighted-average price per share of Cdn$0.56 [2020 – Cdn$0. 60]. During the year ended December 31, 2022, nil options were exercised, 1,894,375 options expired or were forfeited, and 2,740,000 options were granted [2021 – 258,336, 298,125 and 1,500,000, respectively].

Accounted through current and long-term liabilities

Notes payable

otes payable
	At December 31, 2022	At December 31, 2021
	$	$
Note payable to HDL [a]	725,838		657,912
Note payable to shareholders and a director [b]	658,821		238,389
Total	1,384,119		896,301
Less: current portion of notes payable	(852,281)		(358,389)
Long-term portion of notes payable	531,838		537,912

[a]Note payable to HDL

The note is owed to Health Diagnostic Laboratories Inc. (HDL) and the Company is required to make monthly payments of $10,000 until the outstanding debt has been paid in full. The balance of the note is expected to be repaid in full by 2034. The notes payable were initially recognized at fair value, and subsequently they were measured at amortized cost using the effective interest rate method. The initial fair values were calculated using a valuation technique that uses parameters obtained from observable markets, including credit spread and interest rate volatility. The prevailing interest rate used in the valuation was 16% at initial recognition.

[b] Note payable to shareholders and director

	As at December 31, 2021	note payable issued in 2022	Imputed interest	As at December 31, 2022
	$		$	$
Note payable to shareholders and director	238,389	398,500	21,392	658,281

The above notes are all secured by a security interest in the Company’s patents and trademarks.

[c] Convertible Debenture Private Placement in February 2020

The company closed a private placement of convertible debentures (each a “Debenture”) for gross proceeds of Cdn$1,180,000 on February 19, 2020 (the “Offering”). The Debentures, issued in increments of $1,000, bear interest at a rate of 6% per annum, have a term of 18 months from the date of issue and are convertible in units (“Units”) at a conversion price of $0.32 per Unit. Each Unit consists of one (1) common share (“Common Share”) of the Company and one-half (1/2) of a Common Share purchase warrant. Each whole warrant (a “Warrant”) is exercisable into one Common Share of the Company at an exercise price of CAD$0.56 per Common Share for a period of twenty-four (24) months from the date of issuance of the Debentures. Securities issued pursuant to the Offering are subject to a statutory hold period lasting four (4) months and a day after the issuance of the securities.

As the conversion price is variable due to currency differences, resulting in the recognition of an embedded derivative, the Company designated the entire convertible instrument as a financial liability at fair value through profit or loss

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StageZero Life Science, Limited Management’s Discussion & Analysis [Expressed in US dollars, unless otherwise noted]

and recognized any changes in the fair value in the consolidated statement of loss and comprehensive loss. The fair value of the convertible debenture was calculated using a combination of discounted cash flows, using a discount rate of 35% and option pricing models using the following inputs:

Measurement Date	Expected volatility Risk-free interest rate
	Conversion Option/Unit Warrant* ConversionOption/UnitWarrant
19-Feb-20**	160%/146% 1.56%/1.48%
6-Jul-20	158%/171% 0.28%/0.26%
9-Jul-20	170%/158% 0.28%/0.29%
28-Sep-20	164%/154% 0.19%/0.24%
29-Sep-20	163%/154% 0.20%/0.23%
27-Oct-20	163%/150% 0.15%/0.19%
31-Dec-20	115%/148% 0.11%/0.16%
25-Jan-21	108%/149% 0.10%/0.12%
28-Jan-21	109%/149% 0.09%/0/11%
29-Jan-21	109%/149% 0.08%/0.11%
24-Feb-21	111%/151% 0.17%/0.20%
1-Mar-21	111%/150% 0.15%/0.19%
9-Mar-21	100%/145% 0.15%/0.20%
25-Mar-21	105%/117% 0.11%/0.14%
18-Aug-21	199%/113% 0.19%/0.19%
19-Aug-21	N/A/114% N/A/0.19%

Where the transaction price is fair value and the valuation model uses unobservable inputs the valuation model is calibrated such that the result of the valuation technique equals the transaction price. The indicated volatility is prior to the calibration adjustment.

** On initial recognition there is a discount for lack of marketability (“DLOM”) as a result of a four month statutory hold period was determined using a Finnerty Model with initial term of 4 mos. and volatility of 130%, in subsequent measurement periods, the hold period is expired and accordingly no DLOM is applied.

Fair value of convertible debenture	Fair value of convertible debenture
$
At January 1, 2021	2,041,720
Issuance during the year	-
Change in fair value during the year	1,118,074
Less: Conversion	(3,172,880)
Foreign exchange	13,086
At December 31, 2021	-

In 2021, total face value of Cdn$1,030 000 convertible debenture was converted to 3,201,806 number of shares and 1,600,903 number of warrants.

Convertible Debenture Private Placement in August 2022

The Company closed a private placement of convertible debentures (each a “Debenture”) for gross proceeds of $137,255 (Cdn$177,000) on August, 2022 (the “Offering”). Each Unit is composed of (i) a $1,000 unsecured convertible debenture (“Debenture”), bearing interest at a rate of 8% per annum, having a term of eighteen (18) months from the date of issuance and is convertible into common shares (“Common Shares”) of the Company, at a conversion

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StageZero Life Science, Limited Management’s Discussion & Analysis [Expressed in US dollars, unless otherwise noted]

price of $0.11 per Common Share, and (ii) 9090 Common Share purchase warrants (each a “Warrant”). Each Warrant is exercisable into one (1) Common Share of the Company at an exercise price of CAD$0.15 per Common Share for a period of eighteen (18) months from the date of issuance of the Units. Securities issued pursuant to the Offering are subject to a statutory hold period lasting four (4) months and a day after the issuance of the securities.

	$
Face value of convertible debenture issued	137,255
Warrants liabilities recognized	(53,306)
Loss upon recognition	48,653
Fair value change	(16,683)
Balance at December 31,2022	115,919

[d] Short-term and Long-term loans

During 2020 and second quarter of 2021, the Company received a Cdn$60,000 Canada Emergency business Account (“CEBA”) loan from the Government of Canada via its commercial bank. The loan was interest free until December 31, 2022, with a maturity date of December 31, 2025. If Cdn$40,000 of the loan was repaid by December 31, 2022, the remaining balance (maximum Cdn$20,000) would be forgiven. Since the loan was not repaid by December 31, 2022, interest at 5% will be charged per annum commencing on January 1, 2023 until maturity on December 31, 2025. The loan is unsecured.

In 2022, the Company received a loan $16,030 from a former employee and $45,716 from a third party. The loan from the third party is secured by a security interest in the Company’s accounts receivables.

Warrants

The following warrants were issued and outstanding at December 31, 2022:

		Warrants	Exercisable into common shares	Exercise Price	Expiry date
		#	#	Cdn$
Date issued:
	25-Mar-19	722,606	722,606	0.72	31-Jan-23
	23-Apr-19	319,094	319,094	1.528	31-Jan-23
	23-Apr-19	220,797	220,797	0.96	31-Jan-23
	23-Apr-19	390,626	390,626	0.8	31-Jan-23
	10-Jul-19	1,448,595	1,448,595	1.48	31-Jan-23
	24-Jul-19	566,874	566,874	1.48	31-Jan-23
	16-Jan-20	765,103	765,103	0.48	16-Jan-23
	16-Jan-20	25,000	25,000	0.48	16-Jan-23
	19-Feb-20	202,343	202,343	0.56	31-Jan-23
	29-Jun-20	951,120	951,120	0.72	29-Jun-23
	29-Jun-20	8,234,306	8,234,306	0.72	29-Jun-23
	29-Jun-20	8,125	8,125	0.68	29-Jun-23
	29-Jun-20	297,645	297,645	0.68	29-Jun-23
	8-Jul-20	31,250	31,250	0.56	31-Jan-23
	9-Jul-20	78,125	78,125	0.56	31-Jan-23
	15-Oct-20	50,782	50,782	0.56	31-Jan-23
	15-Oct-20	54,688	54,688	0.56	31-Jan-23
	27-Oct-20	15,625	15,625	0.56	31-Jan-23
	27-Nov-20	162,728	162,728	1.1	27-Nov-23
	4-Dec-20	4,621,856	4,621,856	1.1	4-Dec-23
	4-Dec-20	323,530	323,530	1.1	4-Dec-23
	25-Jan-21	62,500	62,500	0.56	31-Jan-23

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StageZero Life Science, Limited Management’s Discussion & Analysis [Expressed in US dollars, unless otherwise noted]

28-Jan-21	273,438	273,438	0.56	31-Jan-23
29-Jan-21	490,625	490,625	0.56	31-Jan-23
29-Jan-21	343,750	343,750	0.56	31-Jan-23
25-Feb-21	23,438	23,438	0.56	31-Jan-23
1-Mar-21	9,375	9,375	0.56	31-Jan-23
9-Mar-21	234,375	234,375	0.56	31-Jan-23
25-Mar-21	31,250	31,250	0.56	31-Jan-23
18-Aug-21	62,500	62,500	0.56	31-Jan-23
19-Aug-21	69,653	69,653	0.56	31-Jan-23
26-Nov-21	750,000	750,000	0.56	26-Nov-25
26-Nov-21	9,375,002	9,375,002	0.56	26-Nov-25
2-Mar-22	10,000,000	10,000,000	0.2206	2-Mar-26
2-Mar-22	800,000	800,000	0.2206	2-Mar-26
18-Aug-22	1,608,930	1,608,930	0.15	18-Feb-24
27-Nov-22	4,731,328	4,731,328	0.14	22-Nov-27
	48,356,982	48,356,982

[a] Warrants issued 2021

Warrants issued due to the conversions of convertible debentures

The Company issued 1,600,903 warrants to unitholders in respect of the conversion of convertible debentures with the exercise price of Cdn$0.56, and exercisable untill February 18, 2022.

Warrants issued for Unit Private Placement on November 26, 2021

The Company closed a private placement of its common shares and warrants to purchase Common Shares with institutional investors for gross proceeds of approximately $3.1 million (Cdn $4.2 million) (the “Private Placement”). Pursuant to the Private Placement, the Company issued 9,375,002 Common Shares and Warrants to purchase up to an aggregate of 9,375,002 Common Shares at a purchase price of Cdn $0.448 per Common Share and associated Warrant. Each Warrant entitles the holder to purchase one Common Share at an exercise price of Cdn $0.56 per Common Share for a period of four years following the issuance date. H.C. Wainwright & Co. acted as the exclusive placement agent for the Private Placement.750,000 broker warrants have been issued to H.C. Wainwright & Co. at an exercise price of CAD$0.56 per Common Share for a period of four years following the issuance date.

[b] Warrants issued 2022

Warrants issued for Unit Private Placement on March 3, 2022

The Company closed a private placement of its common shares and warrants to purchase Common Shares with institutional investors for gross proceeds of approximately $1.33 million (Cdn $1.87 million); pursuant to which, the Company issued 10,000,000 Common Shares and Warrants to purchase up to 10,000,000 Common Shares at a purchase price of Cdn $0.187 per Common Share and associated Warrant. Each Warrant entitles the holder to purchase one Common Share at an exercise price of Cdn $0.2206 per Common Share for a period of four years following the issuance date. H.C. Wainwright & Co. acted as the exclusive placement agent for the Private Placement.800,000 broker warrants have been issued to H.C. Wainwright & Co. at an exercise price of Cdn $0.2206 per Common Share for a period of four years following the issuance date.

Warrants issued for Convertible Debentures on August 18, 2022

The Company closed a private placement of its common shares and warrants to purchase Common Shares with institutional investors for gross proceeds of approximately $137,255 (Cdn $177,000). Each Unit is composed of (i) a $1,000 unsecured convertible debenture , bearing interest at a rate of 8% per annum, having a term of eighteen (18) months from the date of issuance and is convertible into common shares of the Company, at a conversion price of Cdn $0.11 per Common Share, and (ii) 9090 Common Share purchase warrants . Each Warrant is exercisable into one (1) Common Share of the Company at an exercise price of Cdn $0.15 per Common Share for a period of eighteen months from the date of issuance of the Units. Securities issued pursuant to the Offering are subject to a statutory hold period lasting four months and a day after the issuance of the securities.

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StageZero Life Science, Limited Management’s Discussion & Analysis [Expressed in US dollars, unless otherwise noted]

Warrants issued to GEM on November 27, 2022

In conjunction with the financing in note 10[b][iv], the Company issued 4,731,328 warrants with an exercise price of Cdn$0.14 on November 27, 2022.

[b] Warrants extension in February 2023

The Company announced that it has applied to the Toronto Stock Exchange (the "Exchange") to extend the expiry date of 6,492,420 outstanding common share purchase warrants (the “Warrants”) to January 31, 2024. The Warrants were originally issued pursuant to non-brokered private placements and debenture conversions. None of the Warrants are held, directly or indirectly, by any insiders of the Company. The effective date for amendments to the Warrants is February 2023, for which the requisite approval was received in Q1 2023 from TSX, subject to the requisite approval of the Exchange. Upon the date of the extension, fair value of those extended warrants would be remeasured and any gain or loss would be charged to consolidated statement of loss accordingly.

[d] Financial liability accounting

Because all the warrants were denominated in Cdn$ [a currency different from the Company’s functional currency], they were recognized as a financial liability at fair value through profit or loss, except for broker warrants issued to Hampton Security Company, National Bank Financial Inc., Fidelity Clearing Canada ULC, H.C. Wainwright & Co., LLC. which were compensation warrants and were recorded to contributed surplus in accordance with IFRS 2, Sharebased Payments. The fair value of each warrant is estimated on the date of grant and on the valuation date using the Black-Scholes option pricing model. The Black-Scholes option pricing model requires four subjective assumptions, including future stock price volatility of the Company’s common shares which trade on the TSX (“Expected volatility”), the risk-free interest rate (sourced to Government of Canada Bond Yields for the noted term); expected dividend yield and expected time until exercise (“Expected life”), which greatly affect the calculated values.

[c] Financial liability accounting

Because such warrants were denominated in Cdn$ [a currency different from the Company’s functional currency], they were recognized as a financial liability at fair value through profit or loss, except for broker warrants issued to Hampton Security Company, National Bank Financial Inc., Fidelity Clearing Canada ULC, H.C. Wainwright & Co., LLC. which were compensation warrants and were recorded to contributed surplus in accordance with IFRS 2, Sharebased Payments. The fair value of each warrant is estimated on the date of grant and on the valuation date using the Black-Scholes option pricing model. The Black-Scholes option pricing model requires four subjective assumptions, including future stock price volatility of the Company’s common shares which trade on the TSX (“Expected volatility”), the risk-free interest rate (sourced to Government of Canada Bond Yields for the noted term); expected dividend yield and expected time until exercise (“Expected life”), which greatly affect the calculated values.

Adequacy of financial resources

The Company has earned limited revenue. The Company has been able to raise planned funds through private placements or other methods of financing, which have contributed to the Company’s current financial condition. COVID-19 has contributed to the financial status of the Company inasmuch as it has provided a steady revenue source from COVID-19 testing. The acquisition of CareOncology and continuation of the TREAT program was immediately accretive, and the launch of the AVRT program further generates revenue to support on-going operations. Further details of financings completed, and challenges addressed from 2021 to 2022 are discussed in the notes to the financial statements for the years ended December 31, 2022 and 2021.

There can be no assurance that additional funding will be available on acceptable terms or at all, when and if required. If adequate funds are not available when required, the Company may have to substantially reduce or eliminate planned expenditures or delay programs designed to expand its commercial business. As there can be no certainty as to the resolution of the above matters, there is material uncertainty that may cast significant doubt about the Company’s ability to continue as a going concern. – see FORWARD LOOKING STATEMENTS AND GOING CONCERN UNCERTAINTY (Page 2)

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StageZero Life Science, Limited Management’s Discussion & Analysis [Expressed in US dollars, unless otherwise noted]

As at December 31, 2022, our cash balance was $0.02 million [December 31, 2021 – $1.7 million]. the Company had a working capital deficit of $6.7 million [December 31, 2021, working capital of $2.4 million] and a deficit of $123 million [December 31, 2021 – $112 million].

OFF-BALANCE SHEET ARRANGEMENTS

We do not engage in off-balance sheet accounting to structure any of our financial arrangements and do not have any interests in unconsolidated special-purpose or structured finance entities.

CONTRACTUAL OBLIGATIONS

The Company adopted IFRS 16 on January 1, 2019, which requires the recognition of assets and liabilities for all leases, unless the lease term is less than 12 months or the underlying asset has a low value.

On December 5, 2017, the Company renegotiated the lease of its premises effective January 1, 2018 to September 30, 2023. The property and office space lease bears interest at an estimated rate of 14.4%. The lease liability as at December 31, 2022 is $193,756 (December 31, 2021 – 415,376 ).

The Company’s portfolio of leases consists of office spaces with lease terms that will expire in September 2023 with a right to renew. The Company currently does not have leases with variable lease payments, residual value guarantees, or leases not yet commenced to which the Company is committed. Lease liabilities have been measured by discounting future lease payments using our incremental borrowing rate as rates implicit in the leases were not readily determinable. The weighted-average rate applied was 14%. The landlord keeps $25,000 as security according to leasing agreements.

RELATED-PARTY TRANSACTIONS

The key management personnel of the Company at December 31, 2022 and 2021 are the directors, including the Chairman and Chief Executive Officer and the Consultant to the CEO.

A director and shareholder of the Company provided interim financing in 2022.

Compensation for key management personnel of the Company is detailed below for years ended December 31, 2022 and 2021:

	Year Ended December 31	Year Ended December 31
	2022	2021
	$	$
Salaries, fees and short-term benefits	523,271	610,620
Share-based compensation	238,506	334,402

As at December 31, 2022, key management personnel controlled 2.6% (2021-3.0%) of the issued and outstanding common shares of the Company and $702,917 (2021-$385,624) of compensation remains unpaid to current and former key management personnel and is included in trade and other payables. Such amounts are unsecured, non-interest bearing with no fixed terms of repayment.

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StageZero Life Science, Limited Management’s Discussion & Analysis [Expressed in US dollars, unless otherwise noted]

Stock options held by key management personnel to purchase common shares have the following expiry dates and exercise prices:

			Number outstanding
Year issued	Year of expiry	Range of exercise prices per share	At December 31, 2022 At December	31, 2021
		$	# #
2018	2023	0.64 to 0.88	381,250	381,250
2019	2024	0.8	1,371,357	1,380,728
2020	2025	0.44	1,187,500	1,200,000
2021	2026	0.41	-	1,500,000
2022	2027	0.15	2,740,000	-
			5,680,107	4,461,978

SELECTED QUARTERLY FINANCIAL DATA

Selected quarterly financial data for our last eight fiscal quarters follows:

in thousands of dollars, except per-share amounts		2022	2022			2021	2021
Revenues Net gain (loss) Basic and diluted loss per common share	Q4 676	Q3 799	Q2 998	Q1 1,321	Q4 1,502	Q3 684	Q2 405	Q1 2,477
	(9,498)	(45)	(1,282)	(590)	(2,295)	(2,222)	4,330	(7,296)
	(0.09)	(0.00)	(0.01)	(0.01)	(0.03)	(0.03)	0.06	(0.12)

RESPONSIBILITIES, CONTROLS AND POLICIES

Management’s responsibility for financial reporting

Evaluation of disclosure controls and procedures

Our Chairman and CEO and the Consultant to the CEO are responsible for establishing and maintaining disclosure controls and procedures for the Company. As such, we maintain a set of disclosure controls and procedures designed to ensure that information required to be disclosed in filings is recorded, processed, summarized, and reported within the time periods specified by the Canadian Securities Administrators rules and forms. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Our Chairman and CEO, and Consultant to the CEO have evaluated our disclosure controls and procedures as at December 31, 2022 and have concluded that disclosure controls and procedures are effective.

Management’s report on internal controls over financial reporting

Our Chairman and CEO, and Consultant to the CEO are responsible for establishing and maintaining effective internal controls over financial reporting. Our internal controls over financial reporting are designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. Because of their inherent limitations, internal controls over financial reporting may

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StageZero Life Science, Limited Management’s Discussion & Analysis [Expressed in US dollars, unless otherwise noted]

not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

Our Chairman and Chief Executive Officer, and Consultant to the CEO evaluated the effectiveness of our internal controls over financial reporting as at December 31, 2022 and identified the material weakness outlined below.

Material weakness

The material weaknesses we identified in our internal controls over financial reporting at December 31, 2022 were as follows: We did not have sufficient accounting resources with relevant technical accounting skills to address issues related to the financial statement close process. Because of the size of the Company and its staff complement, we were not able to sufficiently design internal controls to provide the appropriate level of oversight regarding the financial record-keeping and review of the Company’s financial reporting. This weakness will continue to be addressed through 2023. See “Changes in Internal Controls Over Financial Reporting” below.

In making this assessment, management used the framework set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control – Integrated Framework (2013).

Consistent with our stage of development, we continue to rely on risk-mitigating procedures during our financial closing process in order to provide comfort that the financial statements are presented fairly in accordance with IFRS.

Changes in internal controls over financial reporting

Our Chairman and Chief Executive Officer, and Consultant to the CEO have evaluated whether there were changes to our internal controls over financial reporting during the period ended December 31, 2022 that have materially affected or are reasonably likely to materially affect our internal controls over financial reporting. No such changes were identified through evaluation of the Company. As the Company continues to improve its internal controls over financial reporting, we have engaged outside consultants, expert in the valuation of complex financial instruments and have begun monthly reviews of the Company’s detailed accounting records, and reviews of processes in place at the Company. In light of the remediation occurring, our internal controls are expected to evolve, full remediation will be realized upon implementation of planned changes.

RISKS AND UNCERTAINTIES

The information presented in the “ Financial Instruments and Financial Risk Management Objectives and Policies” section presented on pages 9 to 12 and under the heading “ Risk Factors” on pages 36 to 47 of our Annual Information Form for the year ended December 31, 2022 has not changed materially since December 31, 2021.

Additional information relating to StageZero Life Sciences can be found on SEDAR at www.sedar.com or on our website at www.stagezerolifesciences.com.

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AI assistant

StageZero Life Sciences Ltd. — Management Reports 2023

44586_rns_2023-03-31_7f4529cd-07cc-4992-9e97-db59a3109fe1.pdf