VIP Entertainment Technologies Inc. — Management Reports 2020

Jan 31, 2020

ANC CAPITAL VENTURES INC.

(the “Company”)

FORM 51-102F1 MANAGEMENT DISCUSSION AND ANALYSIS FOR THE NINE MONTH PERIOD ENDED DECEMBER 31, 2019

The following Management’s Discussion and Analysis, prepared as of January 30, 2020 should be read together with the condensed interim financial statements for the nine month period ended December 31, 2019 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, 2019 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 final prospectus and amended final prospectus which includes the financial statements and MD&A for the year ended March 31, 2019. 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.

As at December 31, 2019, 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.

ANC Capital Ventures Inc. Management Discussion & Analysis December 31, 2019

Description of Business (continued)

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

These condensed interim 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, 2019, the Company has not generated any revenues and has a deficit of $59,120. The Company’s continuing operations are dependent upon its ability to complete its IPO and 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 condensed interim 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 three month period ended December 31, 2019

The Company incurred a loss of $1,025 for the three month period ended December 31, 2019 compared to a loss of $nil for the three month period ended December 31, 2018. Please note that the Company was incorporated on March 11, 2019 and therefore no records are available for prior comparative periods.

For the nine month period ended December 31, 2019

The Company incurred a loss of $33,110 for the nine month period ended December 31, 2019 compared to a loss of $nil for the nine month period ended December 31, 2018. Please note that the Company was incorporated on March 11, 2019 and therefore no records are available for prior comparative periods.

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, 2019, the Company used $60,210 of cash for operating activities compared to $nil during the nine month period ended December 31, 2018. Please note that the Company was incorporated on March 11, 2019 and therefore no records are available for prior comparative periods.

Share Capital

Authorized: unlimited common shares without par value

unlimited preferred shares without par value

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.

In accordance with TSX-V Policy 2.4 for Capital Pool Companies, the Company is limited to the lesser of 30% of gross proceeds raised from the sale of securities or $210,000 for expenditures that are not related to valuations or appraisals, business plans, feasibility studies and technical assessments, sponsorship reports, geological reports, financial statements, fees for legal and accounting services, and agents fees, costs, and commissions.

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ANC Capital Ventures Inc. Management Discussion & Analysis December 31, 2019

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.

As of December 31, 2019, the Company 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, 2019	555,000	0.10
Granted	–	–
Outstanding,December 31,2019	555,000	0.10

Additional information regarding stock options outstanding as at December 31, 2019, is as follows:

		Weighted average
Range of exercise		remaining
prices	Stock options	contracted life
$	outstanding	(years)
0.10	555,000	10

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:

	2019	2018		2017
Total revenue	-		-	-
Net loss for the year	(26,010)		-	-
Basic and diluted loss per share	(0.03)		-	-
Total assets	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.

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ANC Capital Ventures Inc. Management Discussion & Analysis December 31, 2019

Summary of Quarterly Results

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

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

Financial Instruments and Risks

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

Assets and liabilities measured at fair value on a recurring basis were presented on the Company’s statement of financial position as at December 31, 2019, as follows:

	Fair Value Measurements Using
	Quoted prices in active markets for financial instruments (Level 1) $ Significant other observable inputs (Level 2) $ Significant unobservable inputs (Level 3) $ Balance December 31, 2019 $
Cash	44,340 – – 44,340

The fair values of financial instruments, which include accounts payable and accrued liabilities, and amounts due to a related party approximate their carrying values 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.

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ANC Capital Ventures Inc. Management Discussion & Analysis December 31, 2019

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 share capital and share-based payment reserve.

The Company manages its capital structure and makes adjustments to it in light of economic conditions. The Company and 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 not subject to externally imposed capital requirements and the Company’s overall strategy with respect to capital risk management remains unchanged from the year ended March 31, 2019.

Subsequent Events

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. 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 17, 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.

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