VIP Entertainment Technologies Inc. — Interim / Quarterly Report 2021

Jan 20, 2021

ANC CAPITAL VENTURES INC.

(the “Company”)

FORM 51-102F1 MANAGEMENT DISCUSSION AND ANALYSIS FOR THE THREE AND NINE MONTH PERIOD ENDED DECEMBER 31, 2020

The following Management’s Discussion and Analysis, prepared as of January 20, 2021 should be read together with the condensed interim financial statements for the three and nine month period ended December 31, 2020 and the related notes attached thereto. Accordingly, the condensed interim financial statements and MD&A include the results of operations and cash flows for the nine month period ended December 31, 2020 and the reader must be aware that historical results are not necessarily indicative of the future performance. The reader may also wish to refer to the Company’s audited financial statements and MD&A for the year ended March 31, 2020. All amounts are reported in Canadian dollars. The aforementioned documents can be accessed on the SEDAR website at www.sedar.com.

Unless otherwise stated, financial results are being reported in accordance with International Financial Reporting Standards (“IFRS”).

Management’s Discussion and Analysis contains the term cash flow from operations, which should not be considered an alternative to, or more meaningful than, cash flows from operating activities as determined in accordance with IFRS as an indicator of the Company’s performance. The Company’s determination of cash flow from operations may not be comparable to that reported by other companies. The reconciliation between profit or loss and cash flows from operating activities can be found in the statement of cash flows.

Certain statements contained in this interim management discussion and analysis may contain words such as "could", "should", "expect", "believe", "will" and similar expressions and statements relating to matters that are not historical facts but are forward-looking statements. Such forward-looking statements are subject to both known and unknown risks and uncertainties which may cause the actual results, performances or achievements of the Company to be materially different from any future results, performances or achievements expressed or implied by such forward-looking statements. Such factors include, among other things, the receipt of required regulatory approvals, the availability of sufficient capital, the estimated cost and availability of funding for the continued exploration and development of the Company's prospects, political and economic conditions, commodity prices and other factors.

Description of Business

ANC Capital Ventures Inc. (the “Company’) was incorporated on March 11, 2019 pursuant to the provisions of the Business Corporations Act (British Columbia). The Company was formed to complete an Initial Public Offering (“IPO”) and become classified as a Capital Pool Company (“CPC”) as defined by TSX Venture Exchange (“TSXV”) Policy 2.4. The Company will not carry on any business other than the identification and evaluation of assets or businesses with a view to completing a Qualifying Transaction (“QT”). The Company has applied to have its shares listed on the TSXV upon completion of its IPO. The head office and the registered office of the Company is located at Suite 2500, 700 West Georgia Street, Vancouver, British Columbia, Canada, V7Y 1B3.

On January 17, 2020, the Company issued a press release announcing that it had completed its IPO and that its shares were listed for trading on the TSXV. The Company issued 3,500,000 common shares at a price of $0.10 per share for gross proceeds of $350,000. Following completion of the Initial Public Offering, the Company has 5,600,000 common shares issued and outstanding, of which 2,100,000 are subject to escrow in accordance with the policies of the TSXV.

ANC Capital Ventures Inc. Management Discussion & Analysis December 31, 2020

Description of Business (continued)

As at December 31, 2020, the Company has no business operations. As a CPC, the Company’s principal business objective will be to identify and evaluate assets, properties or businesses with a view to a potential acquisition or participation by completing a Qualifying Transaction subject, in certain cases, to shareholders’ approval and acceptance by the TSXV. There is no assurance that the Company will identify and successfully acquire businesses or assets that will produce a profit. Moreover, if a potential business or asset is identified which warrants acquisition or participation, additional funds may be required to complete the acquisition or participation and the Company may not be able to obtain such financing on terms which are satisfactory to the Company.

Under the policies of the TSXV, the Company must identify and complete a Qualifying Transaction within 24 months from the date the Company’s shares are listed for trading on the TSXV. There is no assurance that the Company will be able to complete a QT within this time period, or that it will be able to secure the necessary financing to complete a QT. The TSXV may suspend or de-list the Company’s shares from trading should it not meet these requirements.

Going Concern

On March 11, 2020, the World Health Organization declared COVID-19 a global pandemic. This contagious disease outbreak and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, leading to an economic downturn. The impact on the Company is not currently determinable, but management continues to monitor the situation.

These financial statements have been prepared on the 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. As at December 31, 2020, the Company has not generated any revenues and has a deficit of $103,497. The Company’s continuing operations are dependent upon its ability to identify, evaluate, and negotiate a QT. If the QT is identified or completed, additional funding may be required and there is no assurance that the Company will be able to obtain such financing, if any, on terms that are acceptable to the Company. These financial statements do not include any adjustments to the recorded assets or liabilities that might be necessary should the Company be unable to continue as a going concern.

Liquidity & Capital Resources

Results of Operations

For the nine month period ended December 31, 2020

The Company incurred a loss of $12,958 for the nine month period ended December 31, 2020 compared to a loss of $33,110 for the nine month period ended December 31, 2019. The decrease in loss is attributable to a decrease in transfer agent and filing fees.

Off-balance Sheet Arrangements

The Company has not entered into any off-balance sheet arrangements.

Cash Flows

During the nine month period ended December 31, 2020, the Company used $12,680 of cash for operating activities compared to $60,660 during the nine month period December 31, 2019. The decrease in the use of cash for the nine month period ended December 31, 2020 was directly related to the Company’s IPO expenses during the nine month period ended December 31, 2019.

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ANC Capital Ventures Inc. Management Discussion & Analysis December 31, 2020

Share Capital

Authorized: unlimited common shares without par value

unlimited preferred shares without par value

As At December 31, 2020 the Company had 5,600,000 common shares issued and outstanding.

On March 22, 2019, the Company issued 2,100,000 common shares at $0.05 per share for proceeds of $105,000 to the directors of the Company, and cancelled the original founder’s share.

On January 17, 2020 the Company issued a press release announcing that it had completed its IPO and that its shares were listed for trading on the TSXV. The Company issued 3,500,000 common shares at a price of $0.10 per share for gross proceeds of $350,000. Following completion of the IPO, the Company has 5,600,000 common shares issued and outstanding, of which 2,100,000 are subject to escrow in accordance with the policies of the TSXV. The Company has an aggregate of 555,000 stock options outstanding, which have been granted to directors of the Company, with each such option exercisable to acquire one common share at a price of $0.10 until January 16, 2030.

In connection with the IPO, pursuant to the agency agreement dated July 26, 2019 between the Agent and the Company, the Agent received a cash commission of $35,000 equal to 10% of the gross proceeds of the Initial Public Offering. The Company also granted options to the Agent entitling the holder to purchase up to 350,000 common shares at a price of $0.10 per common share until January 17, 2022, being 24 months from the listing of the common shares on the Exchange. In addition, the Agent was paid a work fee of $12,500 plus applicable sales tax in connection with the IPO.

Stock Options

The Company has established a stock option plan (the “Plan”) for its directors, executive officers, employees and consultants under which the Company may grant up to 560,000 stock options until the completion of the qualifying transaction which increases to 10% of the total issued and outstanding common shares of the Company after the completion of the qualifying transaction.

On January 17, 2020, the Company granted 350,000 agent’s options at an exercise price of $0.10 per share for a period of two years. The fair value of the agent’s options was calculated using the BlackScholes option pricing model. The Company recorded the fair value of agent’s options of $26,609 as share capital with a corresponding credit to share-based payment reserve.

As at December 31, 2020, the Company has granted 555,000 stock options to officers and directors of the Company and recorded share-based compensation of $26,010 relating to these stock options. The weighted average fair value of stock options on the date of grant was $0.05.

		Weighted average
	Number of	exercise price
	options	$
Outstanding, March 31, 2020	905,000	0.10
Granted	–	–
Outstanding,December 31,2020	905,000	0.10

Additional information regarding stock options outstanding as at December 31, 2020, is as follows:

		Weighted average
Range of exercise		remaining contracted
prices	Stock options	life
$	outstanding	(years)
0.10	905,000	7.45

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ANC Capital Ventures Inc. Management Discussion & Analysis December 31, 2020

Performance Summary

Selected Annual Information

The following table provides a brief summary of the Company’s financial operations for the three most recently completed financial years ended March 31:

	2020	2019
Total revenue	-	-
Net loss for the period	(64,529)	(26,010)
Basic and diluted loss per share	(0.02)	(0.03)
Total assets	316,047	105,000
Total long-term liabilities	-	-

This information has been prepared in accordance with IFRS and is presented in Canadian dollars, which is the functional currency of the Company. For more detailed information please refer to the Company’s financial statements.

Summary of Quarterly Results

The following is a summary of the Company’s financial results for the eight most recently completed quarters:

	December 31,	September 30,	June 30,	March 31,
	2020	2020	2020	2020
	$	$	$	$
Net gain (loss) for the period	(1,320)	(2,415)	(9,223)	(31,419)
Basic and diluted lossper share	(0.00)	(0.00)	(0.00)	(0.00)
	December 31,	September 30,	June 30,	Period from
	2019	2019	2019	March 11, 2019
	$	$	$	(date of
				incorporation) to
				March 31,
				2019
				$
Net gain (loss) for the period	(1,025)	(17,395)	(14,690)	(26,010)
Basic and diluted lossper share	(0.00)	(0.00)	(0.03)	(0.03)

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ANC Capital Ventures Inc. Management Discussion & Analysis December 31, 2020

Financial Instruments and Risk Management

The Company is exposed in varying degrees to a variety of financial instruments and related risks. Those risks and management’s approach to mitigating those risks are as follows:

The Company is exposed in varying degrees to a variety of financial instruments and related risks. Those risks and management’s approach to mitigating those risks are as follows:

• (a) Fair Values

Fair value measurements are classified using a fair value hierarchy that reflects the significance of inputs used in making the measurements.

The fair value hierarchy has the following levels:

• Level 1 - valuation based on quoted prices (unadjusted) in active markets for identical assets or liabilities;

• Level 2 - valuation techniques based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

• Level 3 - valuation techniques using inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The fair value of financial instruments, which includes cash and cash equivalents, approximates its fair value due to the relatively short-term maturity of these instruments.

• (b) Credit Risk

Financial instruments that potentially subject the Company to a concentration of credit risk consists of cash and cash equivalents. The Company will limit its exposure to credit loss by placing its cash and cash equivalents with high credit quality financial institutions. The carrying amount of financial assets represents the maximum credit exposure.

• (c) Foreign Exchange Rate and Interest Rate Risk

The Company is not exposed to any significant foreign exchange rate or interest rate risk.

• (d) Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company plans on settling its financial obligations out of cash. The ability to do this relies on the Company raising debt and equity financing in a timely manner and by maintaining sufficient cash in excess of anticipated needs. There is no assurance that financing will be available or, if available, that such financing will be on terms acceptable to the Company.

Capital Management

The Company manages its capital to maintain its ability to continue as a going concern and to provide returns to shareholders and benefits to other stakeholders. The capital structure of the Company consists of cash and share capital.

The Company manages its capital structure and makes adjustments to it in light of economic conditions. The Company, upon approval from its Board of Directors, will balance its overall capital structure through new share issues or by undertaking other activities as deemed appropriate under the specific circumstances. The Company is subject to externally imposed capital requirements under Policy 2.4 of the TSX-V for Capital Pool Companies and the Company’s overall strategy with respect to capital risk management remains unchanged from the period ended March 31, 2020.

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