StageZero Life Sciences Ltd. — Management Reports 2023

Nov 15, 2023

STAGEZERO LIFE SCIENCES LTD. MANAGEMENT’S DISCUSSION AND ANALYSIS For the three month and nine month periods ended September 30, 2023 and 2022 [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 three-month and nine month periods ended September 30, 2023 and 2022, and it should be read in conjunction with the audited consolidated financial statements for the three month and nine month periods ended September 30, 2023 and 2022, 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 Britain 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 November 14, 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, and had high volume until early 2022. 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 Q1, 2023 the Company further refined its program offerings to better meet the needs of current patients and the requests from new patients, and introduced the COC Protocol 2, in the US and Canada, which allows the COC oncologists and patients to more actively track their progress on the Protocol.

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.

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

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

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 singly, or in combination with 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 first 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.

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.

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

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.

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, the UK and globally 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

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.

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StageZero Life Science, Limited Management’s Discussion & Analysis

[Expressed in US dollars, unless otherwise noted]

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 very specific set of blood tests to assess your metabolic and inflammatory status and guide our recommended interventions.

• Comprehensive physician guidance from an experienced metabolic oncologist to map your interventional strategy.

• 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. Mental Health support and nutritional guidance programs are in development.

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 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 receded 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.

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

• 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 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 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 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.

Partnerships

The Company has traditionally used partnerships as a strategic part of its growth and expansion strategy. In addition to organic growth, relationships with the right partner can accelerate growth and market penetration.

During the COVID pandemic, the Company partnered with a number of large partners including Mercer. Mercer brought StageZero’s COVID testing abilities to multiple employers, including the first responders in Maricopa County, Arizona. This partnership was vital during a challenging time. The Company will continue to work with Mercer and its’ VIP program in offering Aristotle and the Company’s clinical programs.

Laboratory groups, clinical groups, insurance companies, re-insurers and naturopathic clinics are the leading partnership candidates for the Company. Such groups will have their own patients who will include individuals and employers. As such any and all of these groups provide the opportunity to increase the number of employers and individuals who can readily purchase StageZero’s Aristotle test and AVRT/TREAT programs.

Ultimately, increased exposure and access maydrive increased sales and revenue for the Company. One thousand patients would generate approximately US$1.2 million in revenue; 10,000 patients would generate approximately US$12 million and 100,000 patients would generate approximately US$120 million.

Partnerships with Clinics is a natural progression of StageZero’s growth plan and builds the Company’s reach across North America. Broadening the Company’s geographic penetration allows for an increase in the number of self-funded employers that can access the Company’s services. StageZero intends to be readily available in every major city in the US and Canada.

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

Recent partnerships include the Sunny Clinic in Toronto, Ontario; and Health Today headquartered in Calgary, Alberta. All of the clinics share a focus on preventative medicine and innovation, while offering standard of care testing. This approach mirrors StageZero’s focus on early detection of cancer and metabolic health.

Health Today is a multi-disciplinary clinic designed to deliver competent, convenient access to health and wellness services in a timely fashion. Health Today has 8 super clinics in Western Canada and are planning to expand out an additional 70 clinics.

The focus of all of the partnerships will be to increase the patient base and broaden the Company’s reach.

In October 2023, a partnership with The Source Functional Nutritional group was announced. The Source Functional Nutritional offering provides cancer specific nutritional guidance with group information sessions, cooking lessons and one on one sessions. Diet is key to supporting a patient’s ability to manage treatment and retain strength. Dietary guidance can differ between cancer type and stage of treatment. The Source program will show participants how to navigate this with concrete tools and recipes.

The program will be offered virtually out of the New Mexico Cancer Center. Each session will include an educational component as well as a cooking lesson. The first session will be focused on breast cancer and its unique nutritional needs. Additional, cancer specific sessions will be offered regularly. The program is open to anyone, not just Care Oncology patients.

The American Cancer Society estimates the Oncology Nutrition Market at $2.07 billion in 2023 and growing to $4.87 billion by 2033 (Source: Future Market Insights Oncology Nutrition Market report 2023). This partnership represents both a revenue stream and an access point for the Company.

In November 2023, a partnership with the WellnessScript, run by Pinky Jimenez-Agrawal was announced and will provide mental health support via virtual drop-in sessions on a bi-weekly basis.

In addition, on November 14, 2023 a partnership with My One Medical Source (“MOMS”) to offer the StageZero suite of diagnostics and treatment protocols to MOMS’ national customer base was announced. MOMS has over 1,000 Medical Access Points (“MAPS”) across the USA and connects providers, employers and patients with clinical laboratories. It instantly establishes a national patient service center network for StageZero and CareOncology and takes our high complexity lab and makes it into 50 State local labs with all of the attendant customer base. MOMS will actively promote StageZero’s diagnostic programs

Additional partnerships and geographic locations are being developed and will be announced through 2023.

The partnerships provide an accessible entry point for cancer patients to experience Care Oncology’s methodology and approach to cancer care and adjunctive therapy, before signing up for one of the cornerstone clinical programs.

FINANCING ACTIVITIES AND CAPITAL STRUCTURE

On June 20, 2023 the Company announced a temporary repricing of warrants-expiring-in-2023-and-2024. The Company corresponded with the Toronto Stock Exchange to include the publicly listed warrants in the temporary repricing. The TSX did not grant permission to amend any of the parameters for either set of the publicly traded warrants.

The Company had a significant number of warrants where the exercise price was significantly higher than the Company’s current share price. The Board of Directors and Management proposed the temporary repricing as an opportunity for warrant holders to exercise their warrants at a price closer to the current trading price as well as an opportunity to bring cash into the Company.

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

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 $1,476,160 (CAD$1.87 million) (the "Private Placement"). Net with cash finder’s fee and expense allowance totaling $123,655 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 $136,667 and $115,060 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.

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. In 2023, the Company issued 4,711,226 common shares and 6,916,059 warrants and received $360,550 (Cdn$483,137) under the agreement.

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.

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. The shares were subject to a Lock Up Agreement that restricted the Holders’ ability to sell those shares, releasing one third four months from the closing date, one third eight months and the final third on the anniversary.

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 9, 2021, at a special meeting, Health Clinics did not meet the milestones and therefore did not receive the 8,000,000 contingent common shares. There is no further obligation to issue the 8,000,000- 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

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

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 the first nine months of 2023, the following KPI’s were achieved:

• Launched COC Protocol 2 in the US and Canada. Initial uptake positive.

• METRICS Study Informs Expansion of StageZero's New Care Oncology Protocol 2; establishes pathway to METRICS II and Glioblastoma addition to Aristotle.

• COC clinics on path to full profitability by year end 2023

• Initiating mental health support program for Care Oncology employers and patients.

• Scaled up Aristotle/AVRT early cancer testing with Fire Fighters in the Greater Toronto Area.

• Aristotle Employer programs gaining traction.

• Partnerships with the Source Functional Nutrition and the WellnessScript launched.

• Partnership with MOMS

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

• .Position Aristotle + AVRT as the #1 program for early cancer detection for employers with at-risk workforces.

• Fully implement 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 Laboratory Systems and HealthCare Systems in multiple key cities.

• Continue to broaden and deepen Aristotle eg Colorectal Cancer staging, addition of Glioblastoma.

• Partner and launch in key geographic regions world-wide

• Initiate multi-center METRICS II Study

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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 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 the nine months in 2023 and 2022, the Company completed a series of common share, structured notes payable, capital commitment,

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

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.

Credit risk

The Company’s financial assets that are exposed to credit risk consist primarily of cash and cash equivalents and royalty and other receivables.

Market risk

Market risk comprises foreign exchange rate risk and interest rate risk.

Foreign exchange rate risk

The Company operates in Canada, the United States, and United Kingdom, and transacts business primarily with US partners and suppliers. During the six month period ended September 30, 2023, 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 $$193,363 [December 31, 2022 – $59,294]; in the UK GBP to US dollar foreign exchange rate, with all else being equal, would have affected net income by approximately $1,487 [December 31, 2022 – $19,618].

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.

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
	Period	ended
	September 30, 2023	December	30, 2023
(in thousands of dollars)	$		$
Cash	24		16
Total current assets	294		266
Total non-current assets	214		434
Total assets	508		701
Total current liabilities	8,270		7,026
Total non-current liabilities	1,313		1,177
Total liabilities	9,583		8,204
Total shareholders’ (deficiency) equity	(9,075)		(7,503)
Total liabilities and shareholders’(deficiency)equity	508		701

Results of operations for the three months and nine months ended September 30, 2023 and 2022

	Three months ended	Three months ended	Nine months ended	Nine months ended
	September 30		September 30
	2023	2022	2023	2022
(in thousands of US dollars, except per-share amounts)	$	$	$	$

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

Revenue
Total revenues	745	799	2,206	3,119
Cost of revenue	577	661	1,780	3,107
Gross profit	168	138	426	12
Expenses
Research and Development	20	99	164	420
Sales and Marketing	(13)	51	80	633
General and administrative	922	1,378	3,019	4,993
Loss/(Gain) from revaluation of warrants	34	(1,126)	(82)	(2,445)
Loss/(Gain) from revaluation of Contingent Consideration		(288)		(1,833)
Change in fair value of convertible debenture	-	-	14	-
Finance costs	27	69	266	161
Total expenses	990	183	3,461	1,929
Total loss and comprehensive loss, net of tax, for the period	(822)	(45)	(3,035)	(1,917)
Basic and diluted lossper common share	(0.01)	(0.00)	(0.03)	(0.02)

For three months ended September 30, 2022, we reported a consolidated net loss of $0.8 million, or $0.01 loss per common share, as compared with a consolidated net loss of $0.05 million, or $0.00 loss per common share for the same period in 2022. For nine months ended September 30, 2022, we reported a consolidated net loss of $3.0 million, or $0.03 loss per common share, as compared with a consolidated net loss of $1.9 million, or $0.02 loss per common share for the same period in 2022.

Cost of Revenue

Cost of Revenue
Direct labour Direct materials Indirect labour Overhead Total cost of revenue	Three months ended September 30 Increase/ 2023 2022 (Decrease)
	$ $ 385,016 397,682 (12,666) 40,537 66,532 (25,995) 115,896 152,532 (36,636) 35,626 44,335 (8,709) 577,075 661,081 (179,006)

Direct labour Direct materials Indirect labour Overhead Total cost of revenue	Nine months ended September 30 Increase/ 2023 2022 (Decrease)
	$ $ 1,328,998 1,643,664 (314,666) 68,338 567,830 (499,492) 280,039 514,088 (234,049) 102,338 381,053 (278,715) 1,779,713 3,106,635 (1,326,922)

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StageZero Life Science, Limited Management’s Discussion & Analysis

[Expressed in US dollars, unless otherwise noted]

Total cost of revenue decreased by 27% for the three months ended September 30, 2023, compared with the same period in 2022. Total cost of revenue decreased by 43% for the nine months ended September 30, 2023, compared with the same period in 2022. The decrease is primarily due to the cost savings from labour.

General and Administrative Expenses

Salaries and benefits Share-based compensation Rent and facilities Depreciation Professional fee Public entity costs Office equipment maintenance Shipping and courier Other office-related costs Foreign exchange loss (gain) Total	Three months ended September 30 Increase/ 2023 2022 (Decrease)
	526,565 581,100 (54,535) 61,934 - 61,934 845 797 48 51,360 58,322 (6,962) 277,564 335,395 (57,831) 32,294 116,395 (84,101) 7,714 (1,119) 8,833 2,448 - 2,448 2,550 328,833 (326,283) (41,275) (60,523) 19,248 922,079 1,378,022 (455,943)
Salaries and benefits Share-based compensation Rent and facilities Depreciation Professional fee Public entity costs Office equipment maintenance Shipping and courier Other office-related costs Foreign exchange loss (gain) Total	Nine months ended September 30 Increase/ 2023 2022 (Decrease)
	1,325,120 2,461,198 (1,136,078) 135,416 (91,424) 226,840
	2,100 1,985 115
	157,250 158,833 (1,583)
	527,328 1,202,169 (674,841)
	108,274 265,158 (156,884)
	75,464 161,087 (85,623)
	31,965 18,822 13,143
	699,006 886,801 (187,795)
	(43,269) (71,215) 27,946
	3,018,654 4,993,414 (1,974,760)

Total general and administrative expenses decreased 0.5 million for the three months ended September 30, 2023, compared with the same period in 2022 mainly due to the reorganization of the Company’s infrastructure. Total general and administrative expenses decreased for the nine months ended September 30, 2023, compared with the same period in 2022 mainly due to the reorganization of the Company’s infrastructure, and the decrease in legal costs.

Finance costs

Finance costs for the nine months period ended September 30, 2023 were $266,575 as compared with $160,438 in 2022, an increase primarily attributed to Capital commitment financing with GEM in 2023 .

Finance costs for the three months and nine months ended September 30, 2023 and 2022 are as follows:

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

Interest on note payable to HDL Interest on note payable to shareholder and director Interest on convertible debenture Interest costs on lease liability Other interest costs	Three-month period ended September 30 Nine-month period ended September 30
	2023 2022 2023 2022 $ $ $ $
	20,757 25,947 90,594 78,306
	4,458 2,502 7,500 7,500
	- - 7,138 -
	1,639 10,416 11,890 37,230
	- 30,481 149,453 37,402
	26,854 69,346 266,575 160,438

USE OF PROCEEDS

The Company began the period with $0.02 million in available funds. During the nine months period ended September 30, 2023, $0.2 million of the funding was used in support of operations. During the same period, we received proceeds of $0.3 million from issuance of shares and warrants for capital commitment; and $0.3 million from short-term loan offset by a $0.2 million repayment of lease liability and $0.2 million repayment of short-term loan. The Company closed the period 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 nine-month period ended September 30, 2023:

Three months period ended Nine months period ended Adjusted EBITDA September 30, 2023

(in thousands of dollars)

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

Revenue	745	2,206
Cost of revenue	577	1,780
Gross profit	168	426
Expenses
Research and development	20	164
Sales and marketing	(13)	80
General and administrative costs	922	3,019
Total Expenses	929	3,263
Adjusted EBITDA	(761)	(2,837)
Reconciliation of EBITDA and Adjusted EBITDA
Net loss and comprehensive loss for period	(822)	(3,035)
Finance costs (includes interest costs)	27	267
EBITDA	(795)	(2,768)
Revaluation of warrants	34	(82)
Revaluation of convertible debenture	-	13
Adjusted EBITDA	(761)	(2,837)

LIQUIDITY AND CAPITAL RESOURCES

Adequacy of financial resources

The Company has earned limited revenue. The Company has raised funds through private placements and other methods of financing, which have contributed to the Company’s current financial position. Throughout the pandemic COVID-19 testing contributed to the financial and operational growth of the Company. However, as expected, the demand for COVID-19 testing has decreased in recent months and our cancer focused laboratory and clinical offerings have been driving our business growth. Further details of financings completed, and challenges addressed from 2022 to 2023 are discussed in the notes to the financial statements for the nine-month period ended September 30, 2023 and 2022.

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)

As at September 30, 2023, our cash balance was 0.02 million [December 31, 2022 – $0.02 million]. We had a working capital deficit of $8.0 million [December 31, 2022 – a working capital deficit of $6.8 million] and a deficit of $126 million [December 31, 2022 – $123 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.

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

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 September 30, 2023 is nil (December 31, 2022 – 193,756).

RELATED-PARTY TRANSACTIONS

Related party transactions are described in Note 10 of the financial statements for the nine-month periods ended September 30, 2023 and 2022.

SELECTED QUARTERLY FINANCIAL DATA

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

in thousands of dollars, except per-share amounts		2023			2022	2022		2021
Revenues Net gain (loss) Basic and diluted loss per common share	Q3 745 (822) (0.01)	Q2 793 (401) (0.00)	Q1 779 (1,812) (0.02)	Q4 676 (9,498) (0.09)	Q3 799 (45) (0.00)	Q2 998 (1,282) (0.01)	Q1 1,321 (590) (0.01)	Q4 1,502 (2,295) (0.03)

RESPONSIBILITIES, CONTROLS AND POLICIES

Management’s responsibility for financial reporting

Evaluation of disclosure controls and procedures

Our Chairman and CEO and the Interim CFO 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 Interim CFO have evaluated our disclosure controls and procedures as at September 30, 2023 and have concluded that disclosure controls and procedures are effective.

Management’s report on internal controls over financial reporting

Our Chairman and CEO, and Interim CFO 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 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 Interim CFO evaluated the effectiveness of our internal controls over financial reporting as at September 30, 2023 and identified the material weakness outlined below.

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

Material weakness

The material weaknesses we identified in our internal controls over financial reporting at June 30, 2023 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 Interim CFO have evaluated whether there were changes to our internal controls over financial reporting during the period ended September 30, 2023 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, 2022.

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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