Venzee Technologies Inc. — Audit Report / Information 2020

May 29, 2020

Consolidated Financial Statements (Expressed in U.S. dollars)

VENZEE TECHNOLOGIES INC.

For the year ended December 31, 2019

INDEPENDENT AUDITOR’S REPORT

To the Shareholders of Venzee Technologies Inc.

Opinion

We have audited the accompanying consolidated financial statements of Venzee Technologies Inc. (the “Company”), which comprise the consolidated statements of financial position as at December 31, 2019 and 2018 and the consolidated statements of loss and comprehensive loss, changes in shareholders’ equity (deficiency), and cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2019 and 2018, and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards (“IFRS”).

Basis for Opinion

We conducted our audits in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our opinion.

Material Uncertainty Related to Going Concern

We draw attention to Note 1 of the consolidated financial statements, which indicates that the Company has incurred ongoing losses during the year ended December 31, 2019, expects to incur further losses in the development of its business and will be dependent on future financing. As of December 31, 2019, the Company had a working capital deficiency of $228,013 and accumulated deficit of $15,186,950 since inception. As stated in Note 1, these events and conditions indicate that a material uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Other Information

Management is responsible for the other information. The other information obtained at the date of this auditor's report includes Management’s Discussion and Analysis.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

We obtained Management’s Discussion and Analysis prior to the date of this auditor’s report. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

The engagement partner on the audit resulting in this independent auditor’s report is Grant P. Block.

“DAVIDSON & COMPANY LLP”

Vancouver, Canada May 27, 2020

Chartered Professional Accountants

VENZEE TECHNOLOGIES INC. Consolidated Statements of Loss and Comprehensive Loss (expressed in U.S. dollars)

	Note	For the Year Ended December 31,
		2019 2018 163,602 $ 196,654 $ 186,428 370,765 (22,826) (174,111) 675,012 1,418,681 1,886,122 2,656,105 686,689 943,118 35,538 23,663 4,631 4,049 (3,287,992) (5,045,616) (3,310,818) (5,219,727) 41,507 (169,653) (3,269,311) $ (5,389,380) $ (0.03) $ (0.08) $ 102,537,328 62,465,398
Revenues Cost of revenues Expenses Selling and marketing General and administrative Research and development Depreciation Interest expense Net loss for the year Translation adjustment Total loss and comprehensive loss Basic and diluted loss per common share Weighted average number of common shares outstanding - basic and diluted	12 13 5 7

The accompanying notes form an integral part of these consolidated financial statements

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VENZEE TECHNOLOGIES INC. Consolidated Statements of Financial Position (expressed in U.S. dollars)

Note ASSETS Current assets Cash Accounts receivable Prepaid expenses Total current assets Deposits Equipment 5 Total assets LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY) Current liabilities Accounts payable and accrued liabilities Deferred revenue 6 Loans payable 7 Total liabilities Shareholders' equity (deficiency) Share capital 8 Subscriptions received in advance Reserves 9 Accumulated other comprehensive loss Deficit Total shareholders' equity (deficiency) Total liabilities and shareholders' equity (deficiency)

As at December 31, As at December31, 2019 2018 $ 53,204 $ 1,117,362 44,225 34,848 24,462 10,896 121,891 1,163,106 - 6,597 48,252 81,414 $ 170,143 $1,251,117 $ 241,116 $ 174,916 20,291 85,987 88,497 50,000 349,904 310,903 13,246,902 11,536,952 64,600 - 1,718,232 1,345,822 (22,545) (66,428) (15,186,950) (11,876,132) (179,761) 940,214 $ 170,143 $1,251,117

Nature and continuance of operations (Note 1) Subsequent events (Note 16)

Approved and authorized for issue on behalf of the Board on May 27, 2020.

(Signed) “Peter Montross” , (Signed) “John Abrams” , Director & Chairman of the Board Director

The accompanying notes form an integral part of these consolidated financial statements

VENZEE TECHNOLOGIES INC. Consolidated Statements of Changes in Shareholders’ Equity (Deficiency) (expressed in U.S. dollars)

Note	Common Shares Outstanding Share capital Subscriptions received in advance Reserves Accumulated other comprehensive income(loss) Deficit Total
Balance – December 31, 2017 Share-based compensation 9 Broker warrants in connection with private placement 8,9 Private placements 8 Transaction costs in connection with private placement Translation adjustment Net loss for the year Balance – December 31, 2018 Share-based compensation 9 Subscriptions received in advance 8 Broker warrants in connection with private placements 8,9 Private placements 8 Transaction costs in connection with private placements Translation adjustment Net loss for the year Balance – December 31, 2019	62,300,746 10,531,442 $ - $ 736,069 $ 103,225 $ (6,656,405) $ 4,714,331 $ — — — 583,196 — — 583,196 — (26,557) — 26,557 — — — 20,032,666 1,103,188 — — — — 1,103,188 — (71,121) — — — — (71,121) — — — — (169,653) — (169,653) — — — — — (5,219,727) (5,219,727)
	82,333,412 11,536,952 $ - $ 1,345,822 $ (66,428) $ (11,876,132) $ 940,214 $
	— — — 237,113 — — 237,113 — — 64,600 — — — 64,600 — (55,880) — 55,880 — — — 38,817,789 1,892,761 — 79,417 — — 1,972,178 — (126,931) — — — — (126,931) — — — — 43,883 — 43,883 — — — — — (3,310,818) (3,310,818)
	121,151,201 13,246,902 $ 64,600 $ 1,718,232 $ (22,545) $ (15,186,950) $ (179,761) $

The accompanying notes form an integral part of these consolidated financial statements

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VENZEE TECHNOLOGIES INC. Consolidated Statements of Cash Flows

(expressed in U.S. dollars)

Cash flows from operating activities Net loss for the year Interest expense Depreciation Share-based compensation Changes in non-cash operating elements of working capital Accounts receivable Prepaid expenses Accounts payable and accrued liabilities Deferred revenue Net cash used in operating activities Cash flows from financing activities Interest paid on loans payable Repayment of loans payable Proceeds from loans payable Proceeds from private placements Transaction costs in connection with private placements Subsciptions received in advance Net cash provided by financing activities Cash flows from investing activities Purchase of property and equipment Net cash used in investing activities Effect of foreign exchange on cash Change in cash during the year Cash – beginning of year Cash – end of year

For the Year Ended December 31,

2019 2018 (3,310,818) $ (5,219,727) $ 3,999 4,049 35,538 23,663 237,113 583,197 (7,623) 58,606 (13,094) 10,811 66,745 (467,580) (65,696) 66,118 (3,053,836) (4,940,863) (3,999) (4,049) - (40,000) 38,497 - 1,972,178 1,103,188 (126,931) (60,623) 64,600 - 1,944,345 998,516 - (105,077) - (105,077) 45,333 (203,255) (1,064,158) (4,250,679) 1,117,362 5,368,041 53,204 $ 1,117,362 $

Supplemental disclosure with respect to cash flows:

• Recognition of the fair value of broker warrants of $55,880 (2018 - $nil).

The accompanying notes form an integral part of these consolidated financial statements

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VENZEE TECHNOLOGIES INC. Notes to Consolidated Financial Statements For the years ended December 31, 2019 and 2018 (expressed in U.S. dollars)

1. NATURE AND CONTINUANCE OF OPERATIONS

Venzee Technologies Inc. (the “Company” or “Venzee”) develops and markets a cloud-based platform that suppliers and manufacturers from multiple industries use to share their product information and inventory updates, in real-time, with their retailers. The Company’s shares are listed on the TSX Venture Exchange under the symbol “VENZ”. The Company was incorporated under the laws of the province of British Columbia, Canada and its registered office is located at 170-422 Richards Street, Vancouver, British Columbia, Canada.

These consolidated financial statements have been prepared by management on a going concern basis which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has incurred ongoing losses and expects to incur further losses in the development of its business. At December 31, 2019, the Company had a working capital deficiency of $228,013, had not yet achieved profitable operations and has an accumulated deficit of $15,186,950 since its inception. The continuing operations of the Company are dependent upon its ability to continue to raise adequate financing and to commence profitable operations in the future and repay its liabilities arising from normal business operations as they become due. While the Company has been successful in securing financings in the past, there is no assurance that it will be able to do so in the future. These circumstances comprise a material uncertainty which may lend significant doubt as to the ability of the Company to continue as going concern. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence.

On March 11, 2020, the World Health Organization categorized COVID-19 as a pandemic. The potential economic effects within the Company’s industry and in the global markets, including possible disruptions in the Company’s ability to provide services to its clients, and measures being introduced at various levels of government to curtail the spread of the virus (such as travel restrictions, closures of non-essential municipal and private operations, imposition of quarantines and social distancing) to date have not had a material impact on the Company’s operations and ability to access capital. The full extent of the impact of this outbreak and related containment measures on the Company’s operations cannot be reliably estimated at the date these financial statements were approved, which was on May 27, 2020.

2. BASIS OF PREPARATION

Statement of compliance

These consolidated financial statements, including comparatives, have been prepared in accordance with International Financial Reporting Standards (“IFRS”) using accounting policies consistent with IFRS issued by the International Accounting Standards Board (“IASB”) and Interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”).

These consolidated financial statements were approved for issuance by the Board of Directors on May 27, 2020.

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VENZEE TECHNOLOGIES INC. Notes to Consolidated Financial Statements For the years ended December 31, 2019 and 2018 (expressed in U.S. dollars)

2. BASIS OF PREPARATION (continued)

Basis of measurement

These consolidated financial statements have been prepared on a historical cost basis except for certain financial assets that are measured at fair value. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting except for cash flow information. These consolidated financial statements are presented in U.S. dollars (“USD”). The functional currency of the Company and its 100% owned Canadian subsidiary is the Canadian Dollar (“CAD” or “CAD $”). The functional currency of the Company’s 100% owned U.S. subsidiary is the USD. Unless otherwise indicated, all dollar (“$”) and “USD” amounts and references in these consolidated financial statements are in and to U.S. dollars, and references to “CAD” or “CAD $” are to Canadian dollars.

Basis of consolidation

The consolidated financial statements include the accounts of the Company, its wholly-owned U.S. subsidiary Venzee Inc. and its wholly owned Canadian subsidiary Venzee Technologies Canada Inc. The Company consolidates subsidiaries where the Company has the ability to exercise control. Control is achieved when the Company is exposed to variable returns from involvement with an investee and has the ability to affect the returns through power over the investee. Control is normally achieved through ownership, directly or indirectly, of more than 50% of the voting power. Control can also be achieved through power over more than half of the voting rights by virtue of an agreement with other investors or through the exercise of de facto control. All intercompany balances, transactions, income and expenses, and profits or losses have been eliminated on consolidation.

Critical accounting estimates and judgments

The preparation of these consolidated financial statements in accordance with IFRS requires management to make estimates and assumptions that can have a significant effect on the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period.

Estimates and judgments are significant when:

• the outcome is highly uncertain at the time the estimates are made; or

• different estimates or judgments could reasonably have been used that would have had a material impact on the consolidated financial statements.

The consolidated financial statements include estimates based on currently available information and management’s judgment as to the outcome of future conditions and circumstances. Management uses historical experience, general economic conditions and trends, and assumptions regarding probable future outcomes as the basis for determining estimates.

Estimates and their underlying assumptions are reviewed on a regular basis and the effects of any changes are recognized immediately. Changes in the status of certain facts or circumstances could result in material changes to the estimates used in the preparation of the consolidated financial statements and actual results could differ from the estimates and assumptions.

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VENZEE TECHNOLOGIES INC. Notes to Consolidated Financial Statements For the years ended December 31, 2019 and 2018 (expressed in U.S. dollars)

2. BASIS OF PREPARATION (continued)

Set forth below are descriptions of items that management believes require its most critical estimates and judgments.

Key sources of estimation uncertainty

Recoverability of receivables

The Company evaluates specific accounts where it has information that a customer may be unable to meet its financial obligations. In these cases, judgment is used based on the best available information to determine actual amounts that will be collected. The Company continually reviews and adjusts such amounts as better information becomes available.

Judgments

Functional currency

The functional currency of the Company and its subsidiary are the currencies that reflect the economic environment in which the Company and its subsidiary performs their operations. Functional currencies are re-evaluated if there is a change in events and conditions which determines the primary economic environment.

Going concern

The consolidated financial statements have been prepared on a going concern basis, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The assessment of the Company’s ability to source future operations and continue as a going concern involves judgement. Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. If the going concern assumption is not appropriate for the consolidated financial statements, then adjustments would be necessary to the carrying value of assets and liabilities, the reported revenue and expenses and the statement of financial position classifications used.

Income taxes

In assessing the probability of realizing deferred tax assets, management makes estimates related to the expectation of future taxable income, applicable tax opportunities, expected timing of reversals of existing temporary differences and the likelihood that the tax position taken will be sustained upon examination by applicable tax authorities. In making its assessments, management gives additional weight to positive and negative evidence that can be objectively verified.

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VENZEE TECHNOLOGIES INC. Notes to Consolidated Financial Statements For the years ended December 31, 2019 and 2018 (expressed in U.S. dollars)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Foreign exchange

Transactions in foreign currencies are initially translated into an entity’s functional currency using rates prevailing at the date of the transaction. Monetary assets and liabilities are translated using the exchange rates in effect on the reporting date.

The consolidated financial statements for the Company and its subsidiaries are prepared using their functional currencies. Foreign currency transactions are translated into the functional currency using exchange rates prevailing at the dates of the transactions. At the end of each reporting period, monetary assets and liabilities that are denominated in foreign currencies are translated at the rates prevailing at that date. Non-monetary assets and liabilities are translated using the historical rate on the date of the transaction. All gains and losses on translation of these foreign currency transactions are charged to profit or loss.

The statement of financial position of each foreign entity is translated into US dollars using the exchange rate at the statement of financial position date and the statement of loss and comprehensive loss is translated into US dollars using the average exchange rate for the period. All gains and losses on translation of a foreign entity from the functional currency to the presentation currency are charged to accumulated other comprehensive income.

Warrants issued in equity financing transactions

The Company engages in equity financing transactions to obtain the funds necessary to continue operations. These equity financing transactions may involve issuance of common shares or units. A unit comprises a certain number of common shares and a certain number of share purchase warrants. Depending on the terms and conditions of each equity financing agreement, the warrants are exercisable into additional common shares prior to expiry at a price stipulated by the agreement. Warrants that are part of units are valued based on the residual value method and included in share capital with the common shares that were concurrently issued. Warrants that are issued as payment for an agency fee or other transactions costs are accounted for as share-based payments.

Financial instruments

Financial assets are recognized when the Company becomes a party to the contractual terms of the financial instrument. For purposes of classifying financial assets, an instrument is considered as an equity instrument if it is non-derivative and meets the definition of equity for the issuer in accordance with the criteria of IAS 32, Financial Instruments: Presentation . All other non-derivative financial instruments are treated as debt instruments.

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VENZEE TECHNOLOGIES INC. Notes to Consolidated Financial Statements For the years ended December 31, 2019 and 2018 (expressed in U.S. dollars)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Financial assets

Financial assets are classified and measured either at amortized cost, fair value through other comprehensive income (“FVOCI”) or fair value through profit or loss (“FVTPL”) based on the business model in which they are held and the characteristics of their contractual cash flows.

All financial assets not classified at amortized cost or FVOCI are measured at FVTPL. On initial recognition, the Company can irrevocably designate a financial asset at FVTPL if doing so eliminates or significantly reduces an accounting mismatch.

All financial instruments are initially recognized at fair value on the consolidated statement of financial position. Subsequent measurement of financial instruments is based on their classification. Financial assets classified at FVOCI or FVTPL are measured at fair value with changes in those fair values recognized in other comprehensive income (loss) and profit or loss, respectively.

Financial assets are measured at amortized cost if both of the following conditions are met:

• the asset is held within the Company’s business model whose objective is to hold financial assets in order to collect contractual cash flows; and

• the contractual terms of the asset give rise, on specified dates, to cash flows that are solely payments of principal and interest on the principal amount outstanding.

These financial assets are measured initially at fair value plus transaction costs, and are subsequently measured at amortized cost using the effective interest method, less any impairment in value.

The Company has classified and measured cash as FVTPL and accounts receivable as amortized cost.

For purposes of cash flows reporting and presentation, cash in banks generally earn interest based on daily bank deposit rates. These are unrestricted and readily available for use in the Company’s operations and are subject to insignificant risks of changes in value.

Interest income is calculated by applying the effective interest rate to the gross carrying amount of the financial assets except for those that are subsequently identified as credit-impaired. For credit-impaired financial assets at amortized cost, the effective interest rate is applied to the net carrying amount of the financial assets (after deduction of the loss allowance). The interest earned is recognized in profit or loss as part of interest income.

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VENZEE TECHNOLOGIES INC. Notes to Consolidated Financial Statements For the years ended December 31, 2019 and 2018 (expressed in U.S. dollars)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Impairment of financial assets

The Company assesses its expected credit loss (ECL) on a forward-looking basis associated with its financial assets carried at amortized cost. Recognition of credit losses is no longer dependent on the Company’s identification of a credit loss event. Instead, the Company considers a broader range of information in assessing credit risk and measuring expected credit losses, including past events, current conditions, reasonable and supportable forecasts that affect collectability of the future cash flows of the financial assets.

The Company applies the simplified approach in measuring ECL, which uses a lifetime expected loss allowance for all receivables. These are the expected shortfalls in contractual cash flows, considering the potential for default at any point during the life of the financial assets. To calculate the ECL, the Company uses its historical experience, external indicators and forward-looking information to calculate the ECL using a provision matrix. The Company also assesses impairment of receivables on a collective basis as they possess shared credit risk characteristics, and have been grouped based on the days past due.

The key elements used in the calculation of ECL are as follows:

• Probability of default – It is an estimate of likelihood of default over a given time horizon.

• Loss given default – It is an estimate of loss arising in case where a default occurs at a given time. It is based on the difference between the contractual cash flows of a financial instrument due from a counterparty and those that the Company would expect to receive, including the realization of any collateral.

• Exposure at default – It represents the gross carrying amount of the financial instruments subject to the impairment calculation.

Measurement of the ECL is determined by a probability-weighted estimate of credit losses over the expected life of the financial instrument.

Derecognition of financial assets

The financial assets (or where applicable, a part of a financial asset or part of a group of financial assets) are derecognized when the contractual rights to receive cash flows from the financial instruments expire, or when the financial assets and all substantial risks and rewards of ownership have been transferred to another party. If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognizes its retained interest in the asset and an associated liability for amounts it may have to pay. If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognize the financial asset and also recognizes a collateralized borrowing for the proceeds received.

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VENZEE TECHNOLOGIES INC. Notes to Consolidated Financial Statements For the years ended December 31, 2019 and 2018 (expressed in U.S. dollars)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Equity and financial liabilities

Equity

Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangement and the appropriate reporting standard.

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.

Financial liabilities

Financial liabilities include contractual obligations to deliver cash or another financial asset to another entity or to exchange financial assets or financial liabilities under potentially unfavorable conditions. Financial liabilities also include contracts which may be settled in an entity’s equity instruments.

Other financial liabilities

Other financial liabilities are initially measured at fair value, net of transaction costs, and are subsequently measured at amortized cost using the effective interest method, with interest expense recognized on an effective yield basis.

The effective interest method is a method of calculating the amortized cost of a financial liability and of allocating interest expenses over the corresponding period. The effective interest rate is the rate that discounts estimated future cash payments over the expected life of the financial liability, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.

The Company has classified accounts payable and accrued liabilities and loans payable as other financial liabilities.

Derecognition of financial liabilities

The Company derecognizes financial liabilities when the Company’s obligations are discharged, cancelled or they expire.

Equipment

Recognition and measurement

Items of equipment are initially measured at cost. Items of equipment are carried at cost less accumulated depreciation and accumulated impairment losses. Classes of equipment are classified by significant components, which are individually amortized over the useful life of the component.

Cost includes expenditures that are directly attributable to the acquisition of the asset. When parts of an item of equipment have different useful lives, they are accounted for as separate items (major components).

The Company has determined that individual classes of equipment do not have individually significant components.

Gains and losses on disposal of an item of equipment are determined by comparing the proceeds from disposal with the carrying amount of equipment, and are recognized net within other income in profit or loss.

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VENZEE TECHNOLOGIES INC. Notes to Consolidated Financial Statements For the years ended December 31, 2019 and 2018 (expressed in U.S. dollars)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Subsequent costs

The cost of replacing a part of an item of equipment is recognized in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company, and its cost can be measured reliably. The carrying amount of the replaced part is derecognized. The costs of the day to day servicing of equipment are recognized in profit or loss as incurred.

Depreciation

Depreciation is calculated on the depreciable amount, which is the cost of an asset or other amount substituted for cost, less its residual value.

Depreciation is recognized in profit or loss over the estimated useful lives of each part of an item of equipment, since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset.

The estimated useful lives and method of depreciation for equipment are as follows:

• Furniture and fixtures – 3 year straight line

• Software – 3 year straight line

Revenue recognition

The Company recognizes revenue based on the five-step model as follows:

1. Identifying the contract with customer;

2. Identifying the performance obligation(s) in the contract;

3. Determining the transaction price;

4. Allocating the transaction price to the performance obligation(s) in the contract; and

5. Recognizing revenue when or as the Company satisfies the performance obligation(s).

The Company’s revenue is derived from software licensing fees purchased through monthly or annual subscription fees, prepaid credits for a specific amount of product submissions and the use of our partner platform. The software is delivered through the cloud from the Company’s third-party hosting facilities. Therefore, these arrangements are treated as service agreements and revenue is recognized pro-rata over the specific terms of the contract software license arrangement. The Company records deferred revenue for cash payments received from customers in advance of satisfying the performance obligation(s).

Subscription fees are recognized as per the terms of the arrangement. Revenue from product submissions are recognized upon delivery. Additionally, if an agreement contains non-standard acceptance or requires non-standard performance criteria to be met, revenues are deferred until the satisfaction of these conditions.

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VENZEE TECHNOLOGIES INC. Notes to Consolidated Financial Statements For the years ended December 31, 2019 and 2018 (expressed in U.S. dollars)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Software development costs

Costs incurred in the development and testing of subscription software products related to research, project planning, training, maintenance and general and administrative activities, and overhead costs are expensed as incurred. The costs of relatively minor upgrades and enhancements to the software are also expensed as incurred.

Costs for the development of new software solutions and substantial enhancements to existing software solutions are expensed as incurred until technological feasibility has been established, at which time any additional costs would be capitalized. No research and development costs have been capitalized because the Company believes that technological feasibility is established concurrent with general release to customers.

Income taxes

Income tax expense represents the sum of current and deferred taxes. Current and deferred taxes are recognized in profit or loss, except to the extent it relates to items recognized in the consolidated statements of loss and comprehensive loss or directly in the statements of changes in shareholders’ equity (deficiency). Current tax expense is the expected tax payable

on taxable income for the year, using tax rates enacted or substantively enacted at period end, adjusted for amendments to the tax payable with regards to previous years.

The Company uses the asset and liability method to account for income taxes. Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the carrying amounts of existing assets and liabilities for accounting purposes, and their respective tax bases. Deferred income tax assets and liabilities are measured using tax rates that have been enacted or substantively enacted applied to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred income tax assets and liabilities of a change in statutory tax rates is recognized in profit or loss in the year of change. Deferred income tax assets are recorded when their recoverability is considered probable and are reviewed at the end of each reporting period.

Earnings or loss per share

Basic earnings or loss per share is computed by dividing net loss available to common shareholders by the weighted average number of shares outstanding during the reporting period. Diluted earnings or loss per share is computed similarly to basic loss per share except that the weighted average shares outstanding are increased to include additional shares for the assumed exercise of stock options and warrants as if they were exercised and that the proceeds for such exercises were used to acquire common stock at the average market price during the reporting periods, where the inclusion of these would not be antidilutive.

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VENZEE TECHNOLOGIES INC. Notes to Consolidated Financial Statements For the years ended December 31, 2019 and 2018 (expressed in U.S. dollars)

4. NEW ACCOUNTING STANDARDS

New accounting standards adopted

The Company adopted the following standards that were effective for accounting periods beginning or on after January 1, 2019:

IFRS 16 - Leases

IFRS 16 was issued by the IASB to bring most leases onto the statement of financial position for lessees under a single model, eliminating the distinction between operating and finance leases. Under IFRS 16, a lessee recognizes a right-of-use asset and a lease liability. The right-of-use asset is treated similarly to other non-financial assets and depreciated accordingly, and the liability accrues interest. The lease liability is initially measured at the present value of the lease payments payable over the lease terms, discounted at the rate implicit in the lease or an entity’s incremental borrowing rate if the implicit rate cannot be readily determined. Lessees are permitted to make an election for leases with a term of 12 months or less, or where the underlying asset is of low value and not recognize assets and lease liabilities. The expense associated with these leases can be recognized on a straight-line basis over the lease term or on another systematic basis. A lessee will apply IFRS 16 to its leases either retrospectively to each reporting period presented or retrospectively with the cumulative effect of initially applying IFRS 16 being recognized at the date of initial application.

The adoption of IFRS 16 had no material impact on the Company’s consolidated financial statements.

New interpretation IFRIC 23 – Uncertainty over tax treatments

On June 7, 2017, the IASB issued IFRIC Interpretation 23, Uncertainty over Income Tax Treatments . IFRIC 23 provides guidance on the accounting for current and deferred tax liabilities and assets in circumstances in which there is uncertainty over income tax treatments.

There was no impact to the Company’s consolidated financial statements as a result of adopting this new standard.

5. EQUIPMENT

Net carrying amount – December 31, 2017 Additions Depreciation Foreign currency translation Net carrying amount – December 31, 2018 Depreciation Foreign currency translation Net carrying amount - December 31, 2019	Furniture and Fixtures $ — 57,536 (12,456) (2,889) 42,191 (18,728) 2,376 25,839 $	Software $ — 50,430 (11,207) — 39,223 (16,810) - 22,413 $	Total $ — 107,966 (23,663) (2,889) 81,414 (35,538) 2,376 48,252 $

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VENZEE TECHNOLOGIES INC. Notes to Consolidated Financial Statements For the years ended December 31, 2019 and 2018 (expressed in U.S. dollars)

6. DEFERRED REVENUE

The Company offers a variety of options for software licensing, prepaid credits for specific amounts of credits for product submission and an access fee for the use of the partner platform. Deferred revenue represents the unearned portion of these software licensing options purchased by our customers. The Company amortizes the recognition of revenue of these contracts as per the specific contract term. The entire balance is current and expected to be earned within the next 12 months. As at December 31, 2019, $20,291 (2018 - $85,987) was outstanding in deferred revenue.

7. LOANS PAYABLE

On May 1, 2017, the Company entered into a loan agreement with the following terms and conditions:

• Face value of $50,000;

• Accrues interest at a rate of 8% per annum; and

• Monthly interest payments of $333, due on the last day of each calendar month.

The Company reserves the right to repay all or part of the principal at any time, provided that 60 days notice is given to the lender. In the event that the principal is repaid before the expiration of the notice term, interest equal to the days remaining in the notice period shall be paid to the lender. During the year ended December 31, 2019, the Company incurred and paid interest expense of $3,999 (2018 – $4,049). As at December 31, 2019, the Company has a loan payable outstanding of $50,000 relating to the principal balance of the loan. Subsequent to year end, the Company repaid the loan by way of a cash payment of $13,500 and conversion of the remainder of the loan for 1,152,400 common shares of the Company.

On December 23, 2019, the Company received a $38,497 (CAD $50,000) unsecured loan by way of a promissory note bearing interest at 15% per annum. Subsequent to year end, the Company repaid the loan and accrued interest.

8. SHARE CAPITAL

The authorized share capital of the Company consists of unlimited common shares, with no par value.

During the year ended December 31, 2019:

• The Company closed a non-brokered private placement for total proceeds of $1,574,455 (CAD $2,119,334) resulting in the issuance of 28,257,789 units. Each unit is comprised of one share and one warrant. Each warrant is exercisable until April 26, 2022 (subject to an acceleration clause) at a price of CAD$0.15 per warrant to acquire one common share. The Company issued 1,892,432 broker warrants with a fair value of $45,006 (CAD $60,579) and are exercisable at CAD $0.15 until April 26, 2022. Each warrant entitles its holder to acquire one common share of the Company in accordance with its terms.

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VENZEE TECHNOLOGIES INC. Notes to Consolidated Financial Statements For the years ended December 31, 2019 and 2018 (expressed in U.S. dollars)

8. SHARE CAPITAL (continued)

• The Company closed a non-brokered private placement for total proceeds of $397,723 (CAD $528,000) resulting in the issuance of 10,560,000 units. Each unit is comprised of one share and one warrant. Each warrant is exercisable for three years from the date of closing (subject to an acceleration clause) at a price of CAD$0.10 per warrant to acquire one common share. The Company issued 536,200 broker warrants with a fair value of $10,874 (CAD $14,671) and are exercisable at CAD $0.10. Each warrant entitles its holder to acquire one common share of the Company in accordance with its terms.

• The Company received $64,600 (CAD $85,000) in advance of share subscriptions pursuant to a non-brokered private placement that closed subsequent to year end (Note 16).

During the year ended December 31, 2018:

• The Company closed a non-brokered private placement for total proceeds of $1,103,188 (CAD $1,502,450) resulting in the issuance of 20,032,666 units. Each unit is comprised of one share and one warrant. Each warrant is exercisable until December 28, 2020 (subject to an acceleration clause) at a price of CAD$0.15 per warrant to acquire one common share. The Company issued 1,102,569 broker warrants with a fair value of $26,557 (CAD $36,219), exercisable at CAD $0.15 until December 28, 2020. Each warrant entitles its holder to acquire one common share of the Company in accordance with its terms.

In connection with the reverse takeover transaction on December 21, 2017, 13,838,544 common shares were placed into escrow with 10% released on the day of the public listing and 15% released every six months thereafter. At December 31, 2019, 6,227,314 shares were held in escrow (December 31, 2018 – 10,378,908).

9. RESERVES

Stock Options

The Company has a stock option plan (the "Plan") that is administered by the Board of Directors of the Company who establish exercise prices, which shall not be less than the market price at the date of grant, and vesting periods.

Options under the Plan remain exercisable for ten years from the date of grant. The maximum number of common shares reserved for issuance for options that may be granted under the Plan as at December 31, 2019 was 12,115,120 (December 31, 2018 – 8,233,341), being 10% of the issued and outstanding common shares of the Company.

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VENZEE TECHNOLOGIES INC. Notes to Consolidated Financial Statements For the years ended December 31, 2019 and 2018 (expressed in U.S. dollars)

9. RESERVES (continued)

During the year ended December 31, 2019, the Board of Directors of the Company agreed to issue stock options under the Company’s Equity Incentive Plan to various contractors and key management. A summary of the Company’s stock option transactions during the year is as follows:

Beginning balance Transactions during the year: Granted Cancelled Ending balance	Number of options Weighted average exercise price CAD$ 2,437,500 0.74 $ 4,700,000 0.10 (2,074,625) 0.43 5,062,875 0.27 $ As at December 31, 2019	As at December 31, 2018
	Number of options 2,437,500 4,700,000 (2,074,625) 5,062,875	Number of options Weighted average exercise price CAD$ 3,444,208 0.25 $ 1,650,500 1.13 (2,657,208) 0.35 2,437,500 0.74 $

The following incentive stock options were outstanding as at December 31, 2019:

Number of Options Outstanding 416,250 15,750 578,375 400,000 162,500 2,140,000 1,350,000 5,062,875	Exercise Price (CAD $) 0.25 $ 0.25 $ 0.25 $ 1.32 $ 1.44 $ 0.10 $ 0.10 $ 0.27 $	Expiry Date June 8, 2027 August 29, 2027 September 1, 2027 January 5, 2023 January 15, 2023 January 17, 2024 June 25,2024	Number of Options Exercisable Exercise Price (CAD $) 273,983 0.25 9,187 0.25 576,898 0.25 300,000 1.32 77,550 1.44 750,000 0.10 125,000 0.10 2,112,618 0.38

The weighted average remaining life of the stock options was 4.75 years.

During the year ended December 31, 2019, the Company granted 4,700,000 (2018 - 1,650,500) stock options with a weighted average fair value of $0.05 (2018 - $1.13) per option. As at December 31, 2019, the Company recognized $237,113 (2018 - $583,196) as share-based compensation expense. The fair value of the stock options granted are estimated on the date of grant using the Black-Scholes Option Pricing Model with the following weighted average assumptions:

Expected volatility Expected life Risk-free interest rate Dividend yield Weighted average fair value of options at grant date	2019 2018 127% 100% 3.75 years 3.45 years 1.75% 1.82% 0% 0% CAD$0.07 CAD$0.74

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VENZEE TECHNOLOGIES INC. Notes to Consolidated Financial Statements For the years ended December 31, 2019 and 2018 (expressed in U.S. dollars)

9. RESERVES (continued)

Warrants

A summary of the Company’s warrant transactions during the year is as follows:

Balance, December 31, 2017 Issued Balance, December 31, 2018 Issued Expired unexercised Balance, December 31, 2019	Number of warrants Weighted average exercise priceCAD$ 7,135,907 0.67 21,135,235 0.15 28,271,142 0.11 41,246,421 0.14 (7,135,907) (0.67) 62,381,656 0.14

The following warrants were outstanding as at December 31, 2019:

Number of warrants outstanding 21,135,235 30,150,221 3,291,000 7,805,200 62,381,656	Weighted average exercise price CAD $ Expiry date 0.15 December 28, 2020 0.15 April 26, 2022 0.10 November 22, 2022 0.10 December 2,2022 0.14

The weighted average remaining life of the warrants is 1.98 years.

During the year ended December 31, 2019, the Company granted 38,817,789 warrants to investors pursuant to non-brokered private placements. The fair value of these warrants amount to $79,417 (CAD $105,600) using the residual value method.

During the year ended December 31, 2019, the Company granted 2,428,632 brokers warrants pursuant to non-brokered private placements. The fair value of broker warrants granted are estimated on the date of grant using the Black-Scholes Option Pricing Model with the following weighted average assumptions:

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VENZEE TECHNOLOGIES INC. Notes to Consolidated Financial Statements For the years ended December 31, 2019 and 2018 (expressed in U.S. dollars)

9. RESERVES (continued)

Expected volatility Expected life Expected forfeiture rate Risk-free interest rate Dividend yield Weighted average fair value of warrants at grant date	2019 2018 113% 100% 2.5 years 1.5 years 0% 0% 1.54% 1.91% 0% 0% CAD$0.03 CAD$0.03

10. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the relative reliability of the inputs used to estimate the fair values. The three levels of the fair value hierarchy are:

Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2 – Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and Level 3 – Inputs that are not based on observable market data.

The fair value of the Company’s accounts receivable, accounts payable and accrued liabilities and loans payable approximate their carrying values due to their short-term nature. The Company’s cash is measured at fair value using Level 1 inputs.

The Company is exposed to various financial instrument related risks:

Foreign Exchange Risk

Foreign exchange risk is the risk that the fair value of future cash flows will fluctuate as a result of changes in foreign exchange rates. As at December 31, 2019, the Company’s significant foreign exchange currency exposure on its financial instruments by currency was as follows (in U.S. dollar equivalents):

Cash Accounts receivable Accounts payable and accrued liabilities	CAD$
	52,000 44,000 (223,000)

The table below details the effect on loss and comprehensive loss of a 10% strengthening or weakening of the USD exchange rate at the balance sheet date for balance sheet items denominated in CAD:

	(Increase) Decrease in
	Loss and Comprehensive
Currency	loss
CAD	(24,800) $

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VENZEE TECHNOLOGIES INC. Notes to Consolidated Financial Statements For the years ended December 31, 2019 and 2018 (expressed in U.S. dollars)

10. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (continued)

Credit Risk

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The Company’s cash and accounts receivable are exposed to credit risk. The Company reduces its credit risk on cash by placing these instruments with institutions of high credit worthiness. The accounts receivable are primarily comprised of sales tax receivable from the Government of Canada. As at December 31, 2019, the Company is not exposed to any significant credit risk.

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. As at December 31, 2019, the Company is not exposed to any significant interest rate risk. The loans payable were fully settled subsequent to year end.

Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities. The Company manages liquidity risk by maintaining sufficient cash balances to enable settlement of transactions on the due date. The Company addresses its liquidity through equity financing obtained through the sale of common shares. While the Company has been successful in securing financings in the past, there is no assurance that it will be able to do so in the future.

11. RELATED PARTY TRANSACTIONS

Key management personnel are the persons responsible for the planning, directing and controlling the activities of the Company and includes certain executive directors, and entities controlled by such persons. The key management personnel of the Company are certain members of the Company’s executive management team and the Board of Directors.

The compensation of such key management for the years ended December 31, 2019 and 2018 included the following:

Remuneration paid to the President Remuneration paid to the CEO Remuneration paid to CTO Remuneration paid to CFO Remuneration paid to independent directors Stock-based compensation - directors and officers	2019 2018 - $ 121,648 $ 187,917 159,982 134,712 118,595 94,666 155,641 50,870 11,577 95,325 271,255 563,490 $ 838,698 $ For the Year Ended December 31,

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VENZEE TECHNOLOGIES INC. Notes to Consolidated Financial Statements For the years ended December 31, 2019 and 2018 (expressed in U.S. dollars)

11. RELATED PARTY TRANSACTIONS (continued)

As at December 31, 2019, included in accounts payable and accrued liabilities was $44,632 (2018 - $11,361) of consulting payments owed to key management personnel.

Subsequent to year end, the Company entered into management agreement whereby in the event that the CEO is terminated due to a change in control, the CEO will be paid a lump sum of two years’ annual base compensation plus applicable bonus.

12. SEGMENTED INFORMATION

The Company operates in one operating segment, being a cloud-based platform solution targeted to online retailers and vendors. This segment engages in business activities from which it earns license revenues and incurs expenses.

Revenues from external customers are attributed to geographic areas based on the location of the contracting customers. The following table sets forth external revenue by geographic areas:

Geographic Area United States Other	For the Year Ended December 31,
	2019 2018 142,177 $ 182,658 $ 21,425 13,996 163,602 $ 196,654 $

13. EXPENSES CLASSIFIED BY NATURE

The following table shows the breakdown of expenses by nature for each function on the consolidated statements of loss and comprehensive loss:

Employees and contractors Amortization Interest expense Software and support tools Director fees Investor relations Legal and professional fees Administration Share-based compensation Travel and entertainment Advertising, promotion and marketing	For the Year Ended December 31,
	2019 2018 $ 2,180,830 $ 3,130,101 35,538 23,663 4,631 4,049 86,997 167,344 50,870 11,577 253,004 405,263 140,205 249,101 209,653 221,885 237,113 583,196 45,674 120,892 43,477 128,545 $ 3,287,992 $5,045,616

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VENZEE TECHNOLOGIES INC. Notes to Consolidated Financial Statements For the years ended December 31, 2019 and 2018 (expressed in U.S. dollars)

14. CAPITAL MANAGEMENT

The Company’s capital structure consists of shareholders’ equity (deficiency). The Company’s objective when managing capital is to maintain adequate levels of funding to support the development of its businesses and maintain the necessary corporate and administrative functions to facilitate these activities. This is done primarily through equity financing and incurring debt. Future financings are dependent on market conditions and there can be no assurance the Company will be able to raise funds in the future. There were no changes to the Company’s approach to capital management during the period. The Company is not subject to externally imposed capital requirements. The Company does not have adequate sources of capital to fulfill its current obligations and ultimately the development of its business over the long term, and will need to raise adequate capital by obtaining equity financing, selling assets and/or incurring debt. The Company may raise additional debt or equity financing in the near future to meet its current obligations.

15. INCOME TAXES

A reconciliation of income taxes at statutory rates with the reported taxes is as follows:

		2019		2018
Loss for the year	$	(3,310,818)	$	(5,219,727)
Statutorytax rate		27.0%		27.0%
Expected income tax (recovery)		(894,000)		(1,409,000)
Change in statutory, foreign tax, foreign exchange rates and other		(91,000)		228,000
Share issue costs		(35,000)		(20,000)
Adjustment to prior years provision versus statutory tax returns and expiry of
non-capital losses		(651,000)		157,000
Permanent differences		64,000		157,000
Change in unrecognized deductible temporary differences		1,607,000		887,000
Total income tax expense(recovery)	$	-	$	-

The significant components of the Company’s temporary differences, unused tax credits and unused tax losses that have not been included on the consolidated statement of financial position are as follows:

		2019	Expiry Date Range		2018	Expiry Date Range
Temporary Differences
Property and equipment	$	45,000	No expiry date	$	62,000	No expiry date
Share issue costs	$	507,000	2038 to 2042	$	646,000	2038 to 2041
Non-capital losses available for futureperiods	$	14,478,000	2034 to 2038	$	8,769,000	2034 to 2038
Canada	$	5,189,000	2037 to 2039	$	3,104,000	2037 to 2038
USA	$	9,289,000	2034 to 2039	$	5,665,000	2034 to 2038

Tax attributes are subject to review, and potential adjustment, by tax authorities.

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VENZEE TECHNOLOGIES INC. Notes to Consolidated Financial Statements For the years ended December 31, 2019 and 2018 (expressed in U.S. dollars)

16. SUBSEQUENT EVENTS

Subsequent to December 31, 2019, the Company:

• Completed two non-brokered private placements with the following terms:

• Total proceeds of CAD $915,000 resulting in the issuance of 18,300,000 units. Each unit is comprised of one share and one warrant. Each warrant is exercisable until January 31, 2023 (subject to an acceleration clause) at a price of CAD$0.10 per warrant to acquire one common share. In connection with the private placement, the Company paid $45,850 and issued 1,181,000 warrants (Finders’ Warrants) as finders’ fees. Each Finders’ Warrant is exercisable for one common share at CAD$0.10 until January 31, 2023; and

• Total proceeds of CAD $1,402,000 resulting in the issuance of 28,040,000 units. Each unit is comprised of one share and one warrant. Each warrant is exercisable until May 22, 2023 (subject to an acceleration clause) at a price of CAD$0.10 per warrant to acquire one common share. This financing is subject to the approval of the TSX Venture Exchange.

• Repaid two loans:

• One with a principal value of $50,000 by way of a cash payment of $13,500 and the remainder of the loan along with accrued interest, by issuing 1,152,400 common share of the Company; and

• Another with a principal value of $38,497 and accrued interest in cash.

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