Vitalist - Capital/Financing Update 2023

A copy of this preliminary short form prospectus has been filed with the securities regulatory authorities in each of the provinces of Alberta, British Columbia, Manitoba, New Brunswick, Nova Scotia, Ontario, Prince Edward Island and Saskatchewan, but has not yet become final for the purpose of the sale of securities. Information contained in this preliminary short form prospectus may not be complete and may have to be amended. The securities may not be sold until a receipt for the short form prospectus is obtained from the securities regulatory authorities.

No securities regulatory authority has expressed an opinion about these securities, and it is an offence to claim otherwise. This preliminary short form prospectus constitutes a public offering of these securities only in those jurisdictions where they may be lawfully offered for sale and therein only by persons permitted to sell such securities.

Information has been incorporated by reference in this prospectus from documents filed with securities commissions or similar authorities in Canada. Copies of the documents incorporated by reference herein may be obtained on request without charge from the Interim Chief Executive Officer of CE Brands Inc. or the Chief Financial Officer of CE Brands Inc. at c/o 2100 Livingston Place, 222 – 3rd Avenue SW, Calgary, AB T2P 0B4, telephone 855-770-2324, or [email protected], and are also available electronically at www.sedarplus.ca.

New Issue

November 17, 2023

PRELIMINARY SHORT FORM PROSPECTUS

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CE BRANDS INC.

Minimum $4,000,000 /  Shares Maximum $5,000,000 /  Shares $  per Share Over-Allotment Option: Up to $500,000 /  Shares

This preliminary short form prospectus qualifies the distribution (the “ Offering ”) of a minimum of  and a maximum of  Common Shares (the “ Shares ”) in the capital of CE Brands Inc. (the “ Corporation ”) at an issue price of $  per Share (the “ Offering Price ”) for minimum gross proceeds of $4,000,000 (the “ Minimum Offering ”) to $5,000,000 (the “ Maximum Offering ” and collectively with the Minimum Offering the “ Offering ”).

The Offering is being conducted on a “commercially reasonable efforts” agency basis without agent liability such that the Shares will be conditionally offered for sale, if, as, and when issued by the Corporation and accepted by Integral Wealth Securities Limited (the “ Agent ”) in accordance with the terms and conditions contained in an agency agreement (the “ Agency Agreement ”) to be entered into between the Corporation and the Agent, and subject to the approval of certain legal matters on behalf of the Corporation by MLT Aikins LLP and on behalf of the Agent by Borden Ladner Gervais LLP. The terms of the Offering, including the Offering Price, were determined by negotiation between the Corporation and the Agent. See “Plan of Distribution” . Proceeds received from the Offering will be available to the Corporation for the purposes set out under the heading “Use of Proceeds” .

Per Share Minimum Total Maximum Total Over Allotment Total(3)	Price to the Public $ $4,000,000 $5,000,000 $5,500,000	Agent Fee(1) $ $320,000 $400,000 $440,000	Net Proceeds to the Corporation(2)
			$ $3,680,000 $4,600,000 $5,060,000

Notes:

(1) The Corporation has agreed to pay to the Agent a cash commission equal to 8% of the gross proceeds of the Offering (the “ Agent Fee ”). The Corporation has also agreed to grant to the Agent such number of agent warrants

(the “ Agent Warrants ”) as is equal to 8% of the aggregate number of Shares and Over-Allotment Shares (as defined below) sold under the Offering. Each Agent Warrant entitles the holder to purchase one Share, at a price of $  per Share, for a period of 12 months following the Closing Date. This prospectus also qualifies for distribution the Agent Warrants and the Shares underlying such Agent Warrants. See “Plan of Distribution” .

(2) After deducting the Agent Fee, but before deducting expenses of the Offering estimated to be $400,000 (exclusive of taxes), which will be paid from the proceeds of the Offering.
(3) The Corporation has also granted to the Agent an option (the “ Over-Allotment Option ”) to offer for sale up to such number of additional Shares as is equal to 10% of the number of Shares sold under the Offering (the “ OverAllotment Shares ”), at the Offering Price and on the same terms as the Offering, exercisable from time to time and in whole or in part, at the discretion of the Agent, for a period of 30 days from and including the Closing Date to cover over-allotments, if any. If the Over-Allotment Option is exercised in full, an additional  Shares will be issued under the Offering and the total price to the public, Agent Fee, and net proceeds to the Corporation (before deducting expenses of the Offering estimated to be $400,000 (exclusive of taxes)) will be $5,500,000, $440,000, and $5,060,000, respectively. A purchaser that acquires Over-Allotment Shares forming any part of the Agent’s over-allocation position acquires those Over-Allotment Shares under this prospectus regardless of whether the over-allotment position is ultimately filled through the exercise of the Over-Allotment Option or secondary market purchases. This prospectus also qualifies for distribution of the Over-Allotment Option, the Over-Allotment Shares and the Shares underlying such Over-Allotment Shares. See “ Plan of Distribution ”.

The following table sets out the number of Over-Allotment Shares and Agent Warrants issuable pursuant to the OverAllotment Option:

Agent’s Position Over-Allotment Option Agent Warrants	Maximum Number of Securities Over-Allotment Shares Agent Warrants	Exercise Period 30 days from and including the Closing Date 12 months from the Closing Date	Exercise Price
			$per Over-Allotment Share $per Agent Warrant

Subscriptions for Shares will be received by the Agent subject to rejection or allotment in whole or in part and the right is reserved to close the subscription books at any time without notice. It is expected that the closing of the Offering will occur on or about December 15, 2023, or on such other date or dates as the Corporation and the Agent may agree (the “ Closing Date ”). If the Closing Date does not occur within 90 days from the date a receipt is issued for the (final) short form prospectus or such other time as may be permitted by applicable securities legislation and consented to by persons or companies who subscribed within that period and the Agent, the Offering will be discontinued and all subscription monies will be returned to subscribers without interest, set-off or deduction. See “ Plan of Distribution ”.

Except in certain limited circumstances: (a) the Shares will be registered and represented electronically through the noncertificated inventory of CDS Clearing and Depository Services Inc. (“ CDS ”) or its nominee pursuant to the book-based system administered by CDS; (b) certificates evidencing the Shares will not be issued to purchasers; and (c) purchasers will receive only a customer confirmation from the Agent or other registered dealer who is a CDS participant (a “ Participant ”) and from or through whom a beneficial interest in the Shares are purchased. See “ Plan of Distribution ”.

The common shares of the Corporation (the “ Common Shares ”) are listed for trading on TSX Venture Exchange Inc. (the “ TSXV ”) under the symbol “CEBI”. On November 17, 2023, the last trading day prior to the date of this prospectus, the closing price of the Common Shares on the TSXV was $0.005 per Common Share. The Corporation intends to apply to the TSXV to list the Shares on the TSXV. Listing will be subject to the Corporation satisfying all the listing requirements of the TSXV.

Subject to applicable laws, the Agent may, in connection with the Offering, effect transactions which stabilize or maintain the market price of the Common Shares at levels other than those which might otherwise prevail on the open market. Such transactions, if commenced, may be discontinued at any time. See “ Plan of Distribution ”.

Investing in the Shares involves a high degree of risk. A prospective purchaser should therefore review this prospectus together with the documents incorporated or deemed to be incorporated by reference in this prospectus in their entirety. See “ Risk Factors ” along with the risk factors described in the prospectus and the risk factors described in the documents incorporated or deemed to be incorporated by reference in this prospectus. See “ Documents Incorporated by Reference ”.

Prospective purchasers should rely only on the information contained in this prospectus and the documents incorporated or deemed to be incorporated in this prospectus. Neither the Corporation nor the Agent has authorized any person to provide information different from that contained in this prospectus and the documents incorporated or deemed to be incorporated in this prospectus. Information contained on the website of the Corporation shall not

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be deemed to be a part of this prospectus or incorporated herein by reference and should not be relied upon by prospective investors for the purpose of determining whether to invest under the Offering. Investors should rely only on the information contained in or incorporated by reference into this prospectus. The Corporation does not undertake to update information contained or incorporated by reference in this prospectus, except as required by applicable securities laws. See “ General Matters ”.

Prospective investors should be aware that the acquisition or disposition of the securities described herein may have tax consequences in Canada. This prospectus may not describe these tax consequences fully. You should consult and rely on your own tax advisor with respect to your own particular circumstances. See “ Certain Canadian Federal Income Tax Considerations ”.

The Shares may be sold only in those jurisdictions where offers and sales are permitted. This prospectus is not an offer to sell or a solicitation of an offer to buy the Shares in any jurisdiction where it is unlawful. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any distribution of the Shares, except in the case of documents incorporated or deemed to be incorporated by reference in this prospectus after the date of this prospectus. Information contained on the website of the Corporation, at www.cebrands.ca, is not deemed to be a part of this prospectus or incorporated by reference in this prospectus and may not be relied upon by prospective purchasers for determining whether to invest in the Shares qualified for distribution under this prospectus.

The registered office and head office of the Corporation is located at c/o 2100 Livingston Place, 222 – 3rd Avenue SW, Calgary, AB T2P 0B4.

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GLOSSARY.......................................................................................................................................................................2 GENERAL MATTERS......................................................................................................................................................4 DOCUMENTS INCORPORATED BY REFERENCE.....................................................................................................4 MARKETING MATERIALS ............................................................................................................................................5 THIRD PARTY INFORMATION.....................................................................................................................................5 FORWARD-LOOKING INFORMATION .......................................................................................................................6 BUSINESS OF THE CORPORATION.............................................................................................................................9 RECENT DEVELOPMENTS..........................................................................................................................................10 EXPLANATORY NOTE REGARDING SHARE CONSOLIDATION ........................................................................11 CONSOLIDATED CAPITALIZATION .........................................................................................................................11 USE OF PROCEEDS.......................................................................................................................................................12 PLAN OF DISTRIBUTION ............................................................................................................................................13 DESCRIPTION OF SECURITIES BEING DISTRIBUTED..........................................................................................15 PRIOR SALES.................................................................................................................................................................16 TRADING PRICE AND VOLUME................................................................................................................................16 INTERESTS OF EXPERTS ............................................................................................................................................17 ELIGIBILITY FOR INVESTMENT[,] ..............................................................................................................................17 RISK FACTORS..............................................................................................................................................................18 CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS..................................................................28 STATUTORY RIGHTS OF WITHDRAWAL AND RESCISSION ..............................................................................31 CERTIFICATE OF THE CORPORATION ....................................................................................................................32 CERTIFICATE OF THE AGENT ...................................................................................................................................33

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GLOSSARY

“ Agency Agreement ” means the agency agreement dated  , between the Agent and the Corporation.

“ Agent ” means Integral Wealth Securities Limited.

“ Agent Fee ” means the cash commission equal to 8% of the gross proceeds of the Offering.

“ Agent Warrant ” means a share purchase warrant that entitles the holder to purchase one Share, at a price of $  per Share, for a period of 12 months following the Closing Date.

“ Annual Information Form ” means the annual information form of the Corporation dated August 30, 2023, for the financial year ended March 31, 2023.

“ Brand License Agreement ” means the Brand License Agreement dated November 1, 2023, between Motorola and the Corporation.

“ CDS ” means CDS Clearing and Depository Services Inc.

“ Closing Date ” means the closing date of the Offering.

“ CMC ” means Happy CP Company Limited.

“ CMC Agreement ” means the Sale and Purchase of Future Receivables Agreement dated May 24, 2022, between CMC and the Corporation.

“ CMC Amendment ” means the Amendment of Sale and Purchase of Future Receivables Agreement dated November, 15, 2023, between CMC and the Corporation.

“ Common Shares ” means the common shares in the capital of the Corporation.

“ Corporation ” means CE Brands Inc.

“ Counsel ” means, collectively, MLT Aikins LLP, counsel to the Corporation, and Borden Ladner Gervais LLP, counsel to the Agent.

“ CRA ” means the Canada Revenue Agency.

“ Credit Facility ” means the credit facility granted by Vesta to the Corporation in the principal amount of $12,000,000, advances under which are made in stages based on eligible customer purchase orders obtained by the Corporation.

“ Debentures ” means the senior secured debentures of the Corporation in the aggregate principal amount of $5,000,000 that mature on April 30 ,2024.

“ eBuyNow ” means eBuyNow eCommerce Ltd., a wholly-owned subsidiary of the Corporation.

“ FHSA ” means a first home savings account as defined in the Tax Act.

“ Holder ” means an Initial Purchaser who, for the purposes of the application of the Tax Act and at all relevant times: (a) deals at arm’s length with the Corporation and the Agent, (b) is not affiliated with the Corporation or the Agent or a subsequent purchaser of such Securities, and (b) acquires and holds the Securities as capital property.

“ Information Circular ” means the management information circular of the Corporation dated November 3, 2023, in respect of the Special Meeting.

“ Initial Purchaser ” means a person who acquires Shares as a beneficial owner pursuant to the Offering.

“ Interim Financial Statements ” means the unaudited condensed consolidated interim financial statements of the Corporation for the three months ended June 30, 2023, and June 30, 2022.

“ Interim MD&A ” means the management’s discussion and analysis of the Corporation for the three months ended June 30, 3023.

“ Maximum Offering ” means the distribution of a maximum of  Shares for maximum gross proceeds of $5,000,000.

“ Minimum Offering ” means the distribution of a minimum of  Shares for minimum gross proceeds of $4,000,000.

“ Motorola ” means Motorola Mobility LLC.

“ Moto Products ” means the Moto Watch 100, the Moto Watch 70, and the Moto Watch 40.

“ Non-Resident Holder ” means a Holder who (a) is neither resident nor deemed to be resident in Canada, and (b) does not, and is not deemed to, use or hold the Shares in, or in the course of carrying on a business in Canada.

“ Offering ” means the distribution of Shares contemplated by this prospectus.

“ Offering Price ” means $  per Share.

“ Option Plan ” means the Amended and Restated Stock Option Plan of the Corporation dated May 12, 2022.

“ Over-Allotment Option ” means the option granted by the Corporation to the Agent under this prospectus to offer for sale the Over-Allotment Shares, at the Offering Price and on the same terms as the Offering, exercisable from time to time and in whole or in part, at the discretion of the Agent, for a period of 30 days from and including the Closing Date to cover over-allotments, if any.

“ Over-Allotment Shares ” means such number of additional Shares issuable under the Over-Allotment Option as is equal to 10% of the number of Shares sold under the Offering.

“ Participant ” means a participant in CDS.

“ RDSP ” means a deferred profit-sharing plan as defined in the Tax Act.

“ Registered Holder ” means the holder of an FHSA, an RDSP, or a TFSA, the subscriber under an RESP, or the annuitant under an RRIF or RRSP, as the case may be.

“ Registered Plan ” means an RDSP, an FHSA, an RESP, an RRIF, an RRSP, or a TFSA.

“ Resident Holder ” means a Holder who, for the purposes of the Tax Act and any applicable tax treaty or convention, is or is deemed to be, resident in Canada at all relevant times.

“ RESP ” means a registered education savings plan as defined in the Tax Act.

“ RRIF ” means a registered retirement income fund as defined in the Tax Act.

“ RRSP ” means a registered retirement savings plan as defined in the Tax Act.

“ Share Consolidation ” means the proposed consolidation of the issued and outstanding Common Shares on a ten-for-one basis.

“ Shareholder ” means a shareholder of the Corporation.

“ Shares ” means the Common Shares issuable under the Offering.

“ Short Term Loan ” means the 12-month senior secured loan facility of the Corporation in the principal amount of US$2,000,000 that was granted to the Corporation by investment vehicles advised or managed by Vesta on June 13, 2022.

“ Special Meeting ” means the special meeting of the Shareholders to be held on December 4, 2023.

“ Tax Act ” means the Income Tax Act (Canada) and the regulations thereunder in force on the date of this prospectus.

“ Tax Proposals ” means specific proposals to amend the Tax Act publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date of this prospectus.

“ TFSA ” means a tax-free savings account as defined in the Tax Act.

“ Treaty ” means Canada-United States Tax Convention (1980), as amended.

“ Trustee ” means Harris & Partners Inc.
“ Trustee Report ” means the preliminary report of the Trustee to creditors of eBuyNow dated July 17, 2023.
“ TSXV ” means TSX Venture Exchange Inc.
“ Vesta ” means Vesta Wealth Partners Ltd.

GENERAL MATTERS

Unless otherwise noted or the context otherwise requires, references to the “Corporation” mean CE Brands Inc. and its wholly-owned subsidiary, CE Brands International Inc.

Unless the context otherwise requires, all references in this prospectus to: (a) the “Offering” assume the full exercise of the Over-Allotment Option; (b) “Shares” include the Over-Allotment Shares issuable upon the exercise of the Over-Allotment Option; and (c) “Shares” include the Shares underlying the Over-Allotment Shares.

A purchaser should rely only on the information contained or incorporated by reference in this prospectus. Neither the Corporation nor the Agent has authorized anyone to provide purchasers with additional or different information. The Corporation and the Agent are not making an offer to sell or seeking offers to buy the Shares in any jurisdiction where the offer or sale is not permitted. Prospective purchasers should assume that the information appearing or incorporated by reference in this prospectus is accurate only as at the dates given, regardless of the time of delivery of this prospectus or of any distribution of the Shares.

All currency amounts in this preliminary short form prospectus are stated in Canadian dollars, unless otherwise noted. References to “US$” are to United States dollars. On November 17, 2023, the daily average exchange rate for Canadian dollars in terms of United States dollars, as quoted by the Bank of Canada, was $1.00 to US$0.7288.

DOCUMENTS INCORPORATED BY REFERENCE

Information has been incorporated by reference in this prospectus from documents filed with authorities in Canada. Copies of the documents incorporated by reference in this prospectus may be obtained on request without charge from the Corporation at c/o 2100 Livingston Place, 222 – 3[rd] Avenue SW, Calgary, AB T2P 0B4, Telephone: 855-770-2324. In addition, copies of the documents incorporated by reference in this prospectus are also available through the Internet on SEDAR, which can be accessed at www.sedarplus.ca .

The following documents filed with the securities commissions or similar authorities in each of the provinces of Alberta, British Columbia, Manitoba, New Brunswick, Nova Scotia, Ontario, Prince Edward Island and Saskatchewan are specifically incorporated by reference into and form an integral part of this prospectus:

(a) the Annual Information Form;
(b) audited annual consolidated financial statements of the Corporation for the years ended March 31, 2023, and March 31, 2022, and the notes thereto;
(c) management’s discussion and analysis of the Corporation for the year ended March 31, 2023;
(d) the Interim Financial Statements;
(e) the Interim MD&A;
(f) material change report of the Corporation dated June 26, 2023, relating to the voluntary assignment into bankruptcy of eBuyNow;
(g) material change report of the Corporation dated November 9, 2023, relating to the completion of a transaction to settle $8,439,497 in debt and accrued interest with the issuance of 421,974,842 Common Shares;
(h) management information circular of the Corporation dated June 13, 2023, for the annual and special meeting of shareholders of the Corporation held on July 28, 2023;
(i) the Information Circular;

(j) the CMC Amendment;
(k) the Brand License Agreement;
(l) template version of the term sheet for the Offering dated November 17, 2023; and
(m) corporate presentation of the Corporation dated November 17, 2023.

Any reference to this prospectus also means any and all documents incorporated by reference in this prospectus. Any document of a type required by National Instrument 44-101 – Short Form Prospectus Distributions to be incorporated by reference in a short form prospectus, including any annual information forms, annual financial statements, annual management’s discussion and analysis, interim financial statements, interim management’s discussion and analysis, material change reports (excluding confidential reports), business acquisition reports, and information circulars filed by the Corporation with the securities commissions or similar authorities in each of the provinces of Alberta, British Columbia, Manitoba, New Brunswick, Nova Scotia, Ontario, Prince Edward Island and Saskatchewan, after the date of this prospectus and prior to the termination of this Offering, are deemed to be incorporated by reference in this prospectus.

Any statement contained in this prospectus or in a document incorporated or deemed to be incorporated by reference in this prospectus is deemed to be modified or superseded, for the purposes of this prospectus, to the extent that a statement contained in this prospectus or in any other subsequently filed document that is or is deemed to be incorporated by reference in this prospectus modifies or supersedes such statement. The modifying or superseding statement need not state that it has modified or superseded a prior statement or include any other information set out in the document that it modifies or supersedes. A modifying or superseding statement is not deemed to be an admission for any purposes that the modified or superseded statement, when made, constituted a misrepresentation. Any statement so modified or superseded is not deemed, except as so modified or superseded, to constitute a part of this prospectus.

Upon a new annual information form and the related annual financial statements being filed by the Corporation with, and where required, accepted by, securities regulatory authorities during the currency of this prospectus, the previous annual information form, the previous annual financial statements, and all quarterly financial statements, management’s discussion and analysis, material change reports, and information circulars filed prior to the commencement of the financial year of the Corporation in which the new annual information form is filed are deemed to no longer be incorporated in this prospectus for purposes of future distributions of Shares under this prospectus.

The purchaser should rely only on the information contained in or incorporated by reference in this prospectus or any applicable amendment. The Corporation has not authorized anyone to provide the purchaser with different or additional information. The Corporation is not making an offer of the Shares in any jurisdiction where the offer is not permitted by law. The purchaser should not assume that the information in this prospectus or any amendment to this prospectus is accurate as of any date other than the date on the front of those documents.

MARKETING MATERIALS

Any “template version” of “marketing materials” (as such terms are defined in National Instrument 41-101 – General Prospectus Requirements ) will be incorporated by reference in the final short form prospectus. However, any such template version of marketing materials will not form part of the final short form prospectus to the extent that the contents of the template version of marketing materials are modified or superseded by a statement contained in the final short form prospectus. Any template version of marketing materials filed after the date of this prospectus and before the termination of the distribution under the Offering (including any amendments to, or an amended version of, the marketing materials) is deemed to be incorporated in this prospectus.

THIRD PARTY INFORMATION

This prospectus and the documents incorporated by reference in this prospectus may include market and industry data and other statistical information that the Corporation has obtained from independent industry publications and surveys, government publications, market research reports, and other published independent sources. Such publications and reports generally state that the information contained in such publications and reports has been obtained from sources believed to be reliable. Although the Corporation believes these sources to be reliable, the Corporation has not independently verified any of the statistical information contained in such data, or ascertained or validated the underlying economic or other assumptions relied upon in such sources. Some data is also based on the estimates of the Corporation, which are derived from its review of internal data, as well as independent sources. The Corporation cannot and does not provide any assurance as to the accuracy or completeness of such included information. Market forecasts, in particular, are likely to be inaccurate, especially over long periods of time. The Corporation has no intention and undertakes no obligation to update or revise any such information or data, whether as a result of new information, future events or otherwise, except as required by law.

FORWARD-LOOKING INFORMATION

This prospectus contains forward-looking information within the meaning of Canadian securities legislation. In general, forward-looking information refers to disclosure about possible conditions, events, or financial performance that is based on future economic conditions and courses of action, and includes disclosure that is presented as a forecast, plan, or projection. Forward-looking information may often be identified by terms such as “anticipates”, “expects”, “estimates”, “intends”, “will”, “may”, “plans”, “assumes”, “potential”, “predicts”, “continues”, “plans” and similar references to future periods. More particularly and without limitation, this prospectus contains forward looking information with respect to the following:

the proposed terms of the Offering;
the proposed closing date of the Offering;
the listing of the Shares on the TSXV;
the uses of the proceeds of the Offering;
the proposed business objectives and milestones of the Corporation;
the ability of the Corporation to continue as a going concern;
the impact on the Corporation of the voluntary bankruptcy of eBuyNow;
the effects of COVID-19 on the Corporation;
the effects of global supply constraints on the Corporation;
the plans of the Corporation for the Motorola product lines, the status of the Motorola product lines relative to those plans, the anticipated timing and costs to advance the Motorola product lines, the anticipated price and anticipated market production date for the Motorola products;
the plans of the Corporation for the Vitalist product lines, the status of the Vitalist product lines relative to those plans, and the anticipated timing and costs to advance the Vitalist product lines;
the impact on the Corporation of the termination of the License Agreement dated April 1, 2019, between eBuyNow and Motorola, as amended;
the impact on the Corporation of the termination of the Trademark License Agreement dated July 30, 2018, between eBuyNow and Eastman Kodak Company, as amended by the First Amendment to First Trademark License Agreement dated December 4, 2019, between eBuyNow and Eastman Kodak Company;
the plans of the Corporation to discontinue certain product lines;
the strategies of the Corporation for customer retention and growth;
anticipated demand for the products and services of the Corporation, and its ability to meet that demand;
● the plans of the Corporation to maintain a flexible capital structure;
the ability of the Corporation to generate sufficient cash to maintain its capacity and fund its growth and development;
fluctuations in the liquidity of the Corporation;
the ability of the Corporation to meet its obligations as they become due;
the plans of the Corporation for remedying its working capital deficiency;
potential sources of financing for the Corporation to meet its commitments for capital expenditures;
capital expenditures not yet committed, but required, to maintain the capacity of the Corporation and fund its growth and development;
fluctuations in the capital resources of the Corporation;
the sources of financing that the Corporation has arranged, but not yet used; and
the plans of the Corporation to reduce general and administrative expenses.

The forward-looking information in this prospectus is based on certain key assumptions made by the Corporation, including assumptions about the future of its business, capital, operations, and financial condition, as well as external economic, legal, political, and social developments. Although the Corporation believes that the assumptions on which the forwardlooking information is based are reasonable, undue reliance should not be placed on the forward-looking information because the Corporation cannot give any assurance that it will prove to be accurate.

By its nature, forward-looking information is subject to various risks, which could cause the actual results and expectations to differ materially from the anticipated results or expectations expressed in this prospectus. Some of these risks include the following:

an investment in the Shares is speculative and may result in the loss of the entire investment of a purchaser;
the closing of the Offering is subject to the receipt of regulatory and stock exchange approvals that may not be granted;
the closing of the offering is subject to a vote in favor by the shareholders of the corporation of a 10 to 1 Share Consolidation of the common shares of the company;

management of the Corporation has the discretion in the application of the proceeds of the Offering and may elect to allocate proceeds differently from that described under the heading “Use of Proceeds” ;
the Offering may cause the market price of the Common Shares to fall;
the market price of the Common Shares may be volatile;
shareholders of the Corporation may be unable to sell significant numbers of Common Shares into the public markets without a significant reduction in the price of their Common Shares, or at all;
the Corporation has never declared or paid, and may never declare or pay, any dividends on the Common Shares;
there can be no assurance that the Shares will continue to be qualified investments under relevant Canadian tax laws for trusts governed by certain registered investment accounts and deferred profitsharing plans;
upon the liquidation of the Corporation, shareholders of the Corporation will be entitled to be paid a distribution out of the assets of the Corporation available to its shareholders only after the claims of all creditors of the Corporation have been met;
there is considerable uncertainty with respect to the ability of the Corporation to continue operations and remain a going concern;
due to the eBuyNow bankruptcy, contracts between eBuyNow and its subsidiaries and certain licensors, distributors, and manufacturers may be terminated as part of the bankruptcy and there are no guarantees that such contracts will be assigned to the Corporation by Harris & Partners Inc. or that such contracts will be renewed at expiration;
the eBuyNow bankruptcy constitutes an event of default under the terms of the debt instruments issued by the lenders of the Corporation;
the loss of the Corporation’s intellectual property rights and the loss of control or relinquishment of substantially all of the assets of the Corporation as part of the eBuyNow bankruptcy could ultimately result in the Corporation being unable to continue operations;
there is the potential for litigation to arise from creditors in connection with the eBuyNow bankruptcy resulting in contingent liabilities and additional legal costs;
certain liabilities of eBuyNow and its wholly-owned subsidiaries may not be extinguished in connection with the eBuyNow bankruptcy;
upon completion of the Offering and the eBuyNow bankruptcy, the Corporation may require additional funds by way of debt or equity financings to continue to fund its operating, investing, and financing activities in the foreseeable future;
the Corporation may continue to experience negative impacts of the COVID-19 pandemic;
the Corporation may continue to experience negative impacts of global supply constraints;
the Corporation has limited financial resources and will require additional funds to continue operations;
● the Corporation is at risk of not being able to settle its debt obligations and the Corporation may not be able to extend, replace, or refinance its existing debt obligations on terms reasonably acceptable to the Corporation, or at all;
the Corporation has global operations and sales and, as such, has exposure to global credit and financial factors on consumers in its areas of operations;
the Corporation has a working capital deficiency;
the Corporation has a history of negative cash flow, including negative cash flow from operating activities;
the Corporation relies on third party manufacturing and from time to time there may be product defects caused by the manufacturing process, assembly, or engineering;
the Corporation relies heavily on manufacturing in China but at times may use factories in, Vietnam, Taiwan, or Malaysia, as such products may be subject to changing tariffs applied by selling countries to the countries of origin with little or no warning;
the Corporation believes its transaction-based revenues will begin to represent an increasing proportion of its overall revenue mix over time and expects seasonality of its quarterly results to vary;
the Corporation relies on major components to be manufactured on an original equipment manufacturers basis;
Demand for international sales may not grow as expected or at all, and there is no assurance that the Corporation will succeed in expanding into new markets;
the ability of the Corporation to successfully enter new markets is subject to uncertainties;
there can be no assurance that the business and growth strategy of the Corporation will enable the Corporation to be profitable;
the Corporation relies on licenses from third parties;
the future growth and profitability of the Corporation will be dependent in part on the effectiveness and efficiency of its sales and marketing expenditures;
the Corporation may be exposed to product liability claims in the use of its products;
the market for the products of the Corporation is characterized by rapidly changing technology, evolving industry standards, and customer requirements;

the precise segment of the market that is targeted by the Corporation is characterized by rapid technological change, evolving industry standards, frequent new product introductions, and short product life cycles;
the ability of the Corporation to achieve significant growth in future revenue will largely depend upon the effectiveness of its sales and marketing efforts, both domestically and internationally;
the success of the Corporation is largely dependent on the performance of its key directors, officers, and employees;
the commercial success of the Corporation is reliant on the ability to develop new or improved technologies, manufacture products, and to successfully obtain patents or other proprietary or statutory protection for these technologies and products in Canada and other jurisdictions;
the Corporation could become subject to a wide variety of cyberattacks on its networks and systems;
the Corporation is engaged in an industry that is highly competitive and rapidly evolving;
the new products provided by the competitors of the Corporation may render the existing products of the Corporation less competitive;
the Corporation uses contract manufacturers to manufacture its products and products under development;
the management of the Corporation has limited experience operating public companies;
the Corporation may become party to litigation, mediation, or arbitration from time to time in the ordinary course of business;
any future acquisitions may result in significant transaction expenses and may present additional risks associated with entering new markets, offering new products, and integrating the acquired companies;
the business plan of the Corporation anticipates rapid growth, and the Corporation will need to continue to attract, hire, and retain highly skilled and motivated officers and employees;
the computer infrastructure of the Corporation may potentially be vulnerable to physical or electronic computer break-ins, viruses, and similar disruptive problems and security breaches;
the Corporation may not be able to enhance its current products or develop new products at competitive prices or in a timely manner;
the Corporation is subject to taxes in Canada and numerous foreign jurisdictions;
a customer of the Corporation or counterparty to a financial instrument of the Corporation may fail to meet its contractual obligations to the Corporation;
there are a number of risks inherent in the international activities of the Corporation, including unexpected changes in governmental policies or project locations concerning the import and export of goods, services, and technology;
the ability of the Corporation to manage growth effectively will require it to continue to implement and improve its operational and financial systems;
the forecasts and models of the Corporation could be inaccurate;
the accounting estimates and judgments of the Corporation could be incorrect;
the Corporation may fail to develop or maintain effective controls on financial reporting; and
there is no assurance that insurance will be consistently available to the Corporation on an economically feasible basis or at all.

We caution that the foregoing list of important factors and assumptions is not exhaustive. Although the Corporation has attempted to identify on a reasonable basis important factors and assumptions related to forward-looking statements, there can be no assurance that forward-looking statements will prove to be accurate, as events or circumstances or other factors could cause actual results to differ materially from those estimated or projected and expressed in, or implied by, these forward-looking statements. Other than as specifically required by law, the Corporation undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results or otherwise. Accordingly, readers should not place undue reliance on forward-looking statements.

BUSINESS OF THE CORPORATION

General Description of the Business

The full name of the Corporation is “CE Brands Inc.” The Corporation was incorporated and organized on October 15, 2018, under the Business Corporations Act (Alberta) and the registered office and head office of the Corporation is located at c/o 2100 Livingston Place, 222 – 3[rd] Avenue SW, Calgary, AB T2P 0B4.

Intercompany Relationships

The following diagram sets out the intercorporate relationships between the Corporation and its material subsidiaries:

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CE Brands Inc.
(AB)
100% 100%
CE Brands eBuyNow
International Inc. eCommerce Ltd.
(AB) (BC)
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Summary of the Business

The Corporation is a data driven consumer electronics company that focuses on the smartwatch market. Its two-pronged approach is: (a) the licensing, manufacturing, and distribution of smartwatches under the “Motorola” brand; and (b) the combination of biomarker and biometric data to monitor general user health and fitness under its in-house “Vitalist” brand. The Corporation has sold products into 59 countries worldwide through direct distribution channels and retail partners.

Motorola Smartwatches

Under the Brand License Agreement, Motorola has granted to the Corporation a 12 month license to: (a) utilize the Motorola trademark to source, manufacture, package and provide the Moto Products as specifically authorized in the Brand License Agreement; (b) utilize the Motorola trademark to distribute, promote, advertise, service, offer, provide and sell the Moto Products to authorized retailers, authorized distributors, and consumers in certain territories through authorized sales channels; and (c) grant to authorized retailers and authorized distributors the right to resell the Moto Products in certain territories through authorized sales channels. In exchange for the license granted by the Brand License Agreement, the Corporation is required to pay to Motorola a royalty equal to a portion of the net sales of the Moto Products.

Vitalist Software and Wearables Ecosystem

On June 6, 2023, the Corporation announced the launch of “Vitalist”, an in-house smartwatch health brand. With a focus on affordability and rapid market availability, Vitalist plans to specialize in cost-effective smartwatches that integrate with a dedicated application experience. By combining user-friendly design, at-home biomarker testing, and wellness improvement planning, Vitalist aims to empower users to gain deeper insight into, and track how, their daily activities and interventions impact their long-term health.

Vitalist Connected Health is a cutting-edge software solution that offers advanced personal health tracking. Its key features include a comprehensive analysis of 17 vital biomarkers on a quarterly basis, coupled with daily health insights delivered through a state-of-the-art smartwatch. The target audience for Vitalist Connected Health is individuals aged 35 to 64, aiming to empower them in areas such as illness prevention, chronic condition management, athletic enhancement, and a holistic understanding of their health. The first Vitalist smartwatch will be priced at US$129 and the first Vitalist smart ring will be priced at US$149, with quarterly premium biomarker testing access available for US$39 per month. Vitalist Connected Health aspires to establish itself as the gold standard for health tracking, catering to users in North America, the European Union, and the United Kingdom.

In addition to providing comprehensive smartwatch and smart-ring features, Vitalist plans to offer bundled biomarker testing services. The initial at home biomarker testing kit will retail for US$129 and test a panel of 17 biomarkers, including

ferritin, hs-CRP, homocysteine, Vitamin D, HbA1c, insulin, LDL, HDL, TC-HDL, TG-HDL, cortisol, DHEA, estradiol, folate, testosterone, ApoA1, ApoB, cholesterol, and triglycerides. This means that users can expect to be able to conveniently test their biomarkers, gaining valuable insights into their health. By leveraging the power of smartwatch data and biomarker analysis, the Corporation anticipates that Vitalist can create an ecosystem that enables users to make informed decisions about their well-being.

Beyond biomarker testing, Vitalist plans to take a holistic approach to health. The brand expects to offer personalized health supplement interventions that are tailored to the specific needs of users based on their biomarker and biometric data. By analyzing the collected information, Vitalist is expected to be able to generate custom training and dietary supplement plans, enabling users to manage their biomarkers and achieve their health goals.

With Vitalist, the Corporation plans to foster an ecosystem that promotes proactive health management through the integration of smartwatches, biomarker testing services, and health supplement interventions that allow users to track their progress, identify areas for improvement, and make informed decisions to enhance their overall health and well-being.

Based on internal market research, the Corporation intends to bring multiple smartwatch and smart ring products to market in the upcoming fiscal year under the Vitalist brand, to reach market segments where Motorola branded products may not be appropriate (for example, to reach iPhone users with a keen interest in hormone levels) and also to be able to launch a portfolio of off-the-shelf hardware products already being manufactured under non-exclusive brand names in other countries, of which the research and development requires limited resources in order to introduce to the market, and of which the products are not aligned with Motorola brand licensing requirements.

During the next three months, the Corporation plans to launch four Vitalist smartwatches, all of which are functionally complete and ready for mass production and subsequent user trials. During the next 12 months, the Corporation plans to launch a Vitalist smart ring that is currently in the “design validation” stage of development.

RECENT DEVELOPMENTS

On January 16, 2023, investment vehicles advised or managed by Vesta agreed to restructure the Debentures on terms favourable to the Corporation in exchange for 2,000,000 share purchase warrants, each of which entitles the holder to purchase one Common Share, at a price of $0.10 per Common Share and the share purchase warrants are exercisable on or before January 13, 2026.

On June 27, 2023, eBuyNow, a wholly-owned subsidiary of the Corporation, made a voluntary assignment into bankruptcy under the Bankruptcy and Insolvency Act (Canada). The directors of the Corporation determined that, due to the impact of the COVID-19 pandemic and the resulting supply chain crisis on eBuyNow, the bankruptcy of eBuyNow was in the best interests of eBuyNow and its stakeholders. The bankruptcy prevents the creditors of eBuyNow from continuing to pursue it for unpaid liabilities, but provides those creditors with an equitable distribution of the assets of eBuyNow. Under Canadian law, the creditors of eBuyNow cannot pursue the Corporation for payment of the unpaid liabilities of eBuyNow, except under exceptional circumstances.

The Trustee was appointed by affirmation of the creditors on July 21, 2023, and pursuant to an order granted by the Court of King’s Bench of Alberta on June 27, 2023, as trustee in bankruptcy of the estate of eBuyNow. The Trustee has set up a website where the Trustee Report and other information is available at: https://harrispartnersadvisory.ca/ebuynow. The Trustee Report indicates that since June 27, 2023, the Trustee has been working with the Corporation to secure all material assets, which are detailed in the statement of affairs sent to all known creditors and took all necessary conservatory measures. The Trustee did not carry on the business of eBuyNow as there were no employees remaining at the Corporation and the ongoing operations could not viably be continued by the Trustee. The Trustee’s preliminary review of the process and value of the assets indicates that realizations from eBuyNow’s assets will not likely be sufficient to satisfy the unsecured debt in full. As of the date of the Trustee Report, the Trustee had not received any claims or proxies. The expected date of discharge, or partial discharge, is currently unknown. It is anticipated that limited corporate restricting will be required, however the extent and the amount of liability if any, to be assumed by the Corporation is unknown. There are numerous risks associated with the bankruptcy of eBuyNow. For more information on such risks, see “ Risk Factors ”.

On July 28, 2023, Kalvie Legat was elected as a new director of the Corporation and on July 31, 2023, David Colleran was appointed as the Chief Financial Officer of the Corporation.

On October 27, 2023, the Corporation issued 421,974,842 Common Shares, at a deemed price of $0.02 per Common Share, to certain creditors, including investment vehicles advised or managed by Vesta, to settle all the outstanding indebtedness of the Corporation under the Short Term Loan, and repay a portion of the outstanding indebtedness under the Credit Facility and the Debentures, in the aggregate amount of $8,439,497. Immediately following the settlement of this outstanding indebtedness, Vesta had a combination of beneficial ownership of and control or direction over, directly or indirectly, approximately 85.47% of the issued and outstanding Common Shares.

The Corporation and Motorola entered into the Brand License Agreement effective November 1, 2023. For more information about the Brand License Agreement, see “ Recent Developments ”.

On November 14, 2023, the Corporation and Vesta entered into a letter of intent to restructure the Debentures by extending the maturity date of the Debentures from April 30, 2024, to a least July 1, 2025.

On November 15, 2023, CMC and the Corporation executed the CMC Amendment. Pursuant to the CMC Amendment, the Corporation agreed to repay a total of US$1,442,400 to CMC in accordance with the following repayment plan:

Calendar Year 2023 2024 2025 2026 2027	Repayment
	US$10,000 US$157,000 US$313,000 US$862,400 US$100,000

Monthly repayments beginning in December 2025 will be calculated as the greater of the amounts shown in the foregoing table or 5% of net revenue of the Corporation for the same period.

EXPLANATORY NOTE REGARDING SHARE CONSOLIDATION

The directors of the Corporation have called the Special Meeting to ask Shareholders to pass, with or without variation, resolutions approving the Share Consolidation. If Shareholders approve the Share Consolidation at the Special Meeting, then the Corporation intends to complete the Share Consolidation promptly after the Special Meeting and upon receipt of final TSXV acceptance of the Share Consolidation. Additional information about the Special Meeting and the Share Consolidation is disclosed in the Information Circular. The Offering is subject to the completion of the Share Consolidation. Vesta, which has a combination of beneficial ownership of and control or direction over, directly or indirectly, approximately 85.47% of the issued and outstanding Common Shares, has executed a voting agreement with the Corporation under which it has agreed to vote in favour of the Share Consolidation at the Special Meeting.

CONSOLIDATED CAPITALIZATION

The following table discloses the consolidated share and loan capital of the Corporation as at the dates indicated, before giving effect to the Share Consolidation and before and after giving effect to the Offering. This table should be read in conjunction with the Interim Financial Statements and the Interim MD&A, which are incorporated by reference in this prospectus.

Capital *Share Capital* Common Shares Incentive stock options Share purchase warrants *Loan Capital* Debentures Short Term Loan CMC Agreement Credit Facility	Authorized Unlimited Rolling(1) Unlimited $5,000,000 US$2,000,000 US$2,475,000 $12,000,000	Outstanding as at June 30, 2023 25,290,187 824,947 5,378,549 $6,056,986 US$2,309,008 US$1,292,400 $3,367,412	Outstanding as at the date of this prospectus before giving effect to the Share Consolidation and the Offering 447,265,029 443,500 4,707,625 $5,073,973 - US$1,442,400 $823,960	Outstanding as at the date of this prospectus before giving effect to the Share Consolidation, but after giving effect to the Minimum Offering  443,500  $5,073,973 - US$1,442,400 $823,960	Outstanding as of the date of this prospectus before giving effect to the Share Consolidation, but after giving effect to the Maximum Offering  443,500  $5,073,973 - US$1,442,400 $823,960	Outstanding as at the date of this prospectus before giving effect to the Share Consolidation, but after giving effect to the Maximum Offering and the full exercise of the Over- Allotment Option
						 443,500  $5,073,973 - US$1,442,400 $823960

Note:

(1) These incentive stock options were granted pursuant to the Option Plan, which is a “rolling up to 10%” stock option plan, meaning that the total number of incentive stock options that the Corporation grants under the Option Plan cannot exceed 10% of the issued and outstanding Common Shares, calculated on the date of each grant.

The following table discloses the consolidated share and loan capital of the Corporation as at the dates indicated, after giving effect to the Share Consolidation and both before and after giving effect to the Offering. This table should be read in conjunction with the Interim Financial Statements and the Interim MD&A, which are incorporated by reference in this prospectus.

Capital *Share Capital* Common Shares Incentive stock options Share purchase warrants *Loan Capital* Debentures Short Term Loan CMC Agreement Credit Facility	Authorized Unlimited Rolling(1) Unlimited $5,000,000 US$2,000,000 US$2,475,000 $12,000,000	Outstanding as at June 30, 2023 25,290,187 824,947 5,378,549 $6,056,986 US$2,309,008 US$1,292,400 $3,367,412	Outstanding as at the date of this prospectus after giving effect to the Share Consolidation and the Offering 44,726,503 44,350 470,763 $5,073,973 - US$1,442,400 $823,960	Outstanding as at the date of this prospectus after giving effect to the Share Consolidation and the Minimum Offering  44,350  $5,073,973 - US$1,442,400 $823,960	Outstanding as of the date of this prospectus after giving effect to the Share Consolidation and the Maximum Offering  44,350  $5,073,973 - US$1,442,400 $823,960	Outstanding as at the date of this prospectus after giving effect to the Share Consolidation, the Maximum Offering, and the full exercise of the Over- Allotment Option
						 44,350  $5,073,973 - US$1,442,400 $823,960

Note:

USE OF PROCEEDS

The net proceeds of the Offering, after deducting the Agent Fee and the estimated expenses of the Offering, are estimated to be approximately $4,200,000, assuming the Corporation raises the Maximum Offering and the Agent does not exercise the Over-Allotment Option; approximately $3,280,000, assuming the Corporation raises the Minimum Offering and the Agent does not exercise the Over-Allotment Options; and approximately $4,660,000, assuming the Corporation raises the Maximum Offering and the Agent exercises the Over-Allotment Option in full. The Corporation intends to use these net proceeds for the following principal purposes:

Principal Purposes		Approximate Use of Net Proceeds(Minimum) $1,500,000 $300,000 $150,000 $1,330,000 $400,000 $320,000	Approximate Use of Net Proceeds(Maximum) $1,500,000 $500,000 $250,000 $1,950,000 $400,000 $400,000	Approximate Use of Net Proceeds (Over- Allotment) $1,500,000 $500,000 $350,000 $2,310,000 $400,000 $440,000
Repayment of credit facility(1) Inventory, samples, and tooling Marketing Working capital and general corporate purposes Transaction fees Commissions Total
		$4,000,000	$5,000,000	$5,500,000

Note:

(1) The proceeds from the indebtedness incurred under the Credit Facility were used for working capital and general corporate purposes.

Business Objectives and Milestones

The following table sets out the primary business objectives of the Corporation during the next 12 months and the significant milestones to achieve those business objectives:

Business Objective Establish Motorola wearables as a global product line Establish Vitalist as a trusted benefit health focused brand of wearable products and services	Milestone Re-establish sales of Motorola wearables with CE Brands International Deploy a revitalized application experience across all devices Launch first product sales of a bundled wearable and biomarker testing kit in North America Launch a wearable smart ring product to expand the product ecosystem Launch additional biomarker testing products and related services	Timeframe(1) Q4 2023 Q1 2024 Q1 2024 Q2 2024 Q3 2024	Estimated Cost
			$- $50,000 $150,000 $150,000 $100,000

Note:

(1) Timeframe references are to quarters of a calendar year.

PLAN OF DISTRIBUTION

Pursuant to an Agency Agreement to be entered into between the Corporation and the Agent, the Corporation will engage the Agent to offer for sale to the public on a “commercially reasonable efforts” basis, and the Corporation has agreed to issue and sell, on the Closing Date,  Shares, at the Offering Price, for a minimum gross proceeds of $4,000,000 and a maximum gross proceeds of $5,000,000. The Offering is not underwritten or guaranteed by any person. While the Agent has agreed to use its commercially reasonable efforts to sell the Shares, the Agent is not obligated to purchase any Shares that are not sold. All funds received from the subscription for the Shares will be deposited and held by the Agent pursuant to the terms and conditions of the Agency Agreement and will not be released until the Agent has consented to such release.

The Corporation has granted to the Agent the Over-Allotment Option, exercisable, in whole or in part, at any time for a period of 30 days from and including the Closing Date, to arrange for the sale of up to such number of Over-Allotment Shares as is equal to 10% of the number of Shares sold under the Offering on the same terms and conditions as the Offering, for the purpose of covering overallotments that exist on the Closing Date, if any. The grant of the Over-Allotment Option and the distribution of the Over-Allotment Shares issuable upon exercise of the Over-Allotment Option are hereby qualified for distribution under this prospectus. A purchaser who acquires Over-Allotment Shares forming part of the Agent’s overallocation position acquires those securities under this prospectus, regardless of whether the over-allocation position is ultimately filled through the exercise of the Over-Allotment Option or secondary market purchases. If the Over-Allotment Option is exercised in full an additional  Shares will be issued under the Offering and the total price to the public, Agent Fee, and net proceeds to the Corporation (before deducting expenses of the Offering estimated to be $400,000 (exclusive of taxes)) will be $5,500,000, $440,000, and $5,060,000, respectively. The price of the Shares and the Over-Allotment Shares was determined by arm’s length negotiation between the Corporation and the Agent.

In consideration for the services to be performed by the Agent, the Corporation has agreed to pay to the Agent the Agent Fee and the reasonable expenses of the Agent in connection with the Offering. The Corporation has also agreed to grant to the Agent such number of Agent Warrants as is equal to 8% of the aggregate number of Shares and Over-Allotment Shares sold under the Offering. Each Agent Warrant will entitle the holder to purchase one Share, at an exercise price of $  per Share, for a period of 12 months following the Closing Date. This prospectus also qualifies the distribution of the Agent Warrants and the Shares underlying the Agent Warrants.

Subscriptions for the Shares will be received subject to rejection or allotment, in whole or in part, and the Agent reserves the right to close the subscription books at any time without notice. Closing of the Offering is expected to take place on or about the Closing Date, or such other date as may be agreed upon by the Corporation and Agent. If the Closing Date does not occur within 90 days from the date a receipt is issued for the (final) short form prospectus or such other time as may be permitted by applicable securities legislation and consented to by persons or companies who subscribed within that period and the Agent, the Offering will be discontinued and all subscription monies will be returned to subscribers without interest,

set-off or deduction.

The Corporation will arrange for an instant deposit of the securities issued hereunder to or for the account of the Agent with CDS on the Closing Date, against payment of the aggregate purchase price for the securities issued hereunder. Accordingly, a purchaser of securities issued hereunder will receive only a customer confirmation from the Agent or other registered dealers who are CDS participants and from or through which the securities issued hereunder are purchased. The obligations of the Agent under the Agency Agreement may be terminated by the Agent on the basis of a “disaster out”, “market out”, “trading out”, “material change out”, “due diligence out”, and “regulatory out”, and may also be terminated upon the occurrence of certain other stated events. The Agent is not obligated, directly or indirectly, to advance their own funds to purchase any of the Shares.

The Agency Agreement also provides that the Corporation will indemnify, among others, the Agent and its affiliates, subsidiaries, control persons, and their respective directors, officers, employees, shareholders, partners and agents against certain liabilities and expenses or will contribute to payments that the Agent may be required to make in respect thereof.

From the date of the Agency Agreement until a date that is 120 days from the Closing Date, the Corporation has agreed not to, without the prior written consent of the Agent, such consent not to be unreasonably withheld or delayed, authorize, sell or issue or announce its intention to authorize, sell or issue, or negotiate or enter into an agreement to sell or issue, any securities of the Corporation (including those that are convertible or exchangeable into securities of the Corporation) other than: (a) pursuant to the Offering; (b) upon the exercise of convertible securities, options or warrants of the Corporation outstanding as of the date of the Agency Agreement; (c) securities which may be issued from time to time as agreed to in employee compensation arrangements; or (d) pursuant to an arm’s length acquisition.

The Corporation will apply to the TSXV to list the Shares on the TSXV. Listing will be subject to the Corporation satisfying all listing requirements of the TSXV.

The Offering is being made concurrently in all the provinces of Alberta, British Columbia, Manitoba, New Brunswick, Nova Scotia, Ontario, Prince Edward Island and Saskatchewan. In addition, the Agent may offer the Shares outside of Canada, subject to compliance with the local securities law requirements in such a manner as to not require registration of the Shares or filing of a prospectus or registration statement with respect to those Shares under the laws in such jurisdictions or qualification as a foreign corporation or to file a general consent to service of process in such jurisdictions.

Pursuant to rules and policy statements of certain Canadian securities regulatory authorities, the Agent may not, throughout the period of distribution under this prospectus, bid for or purchase Common Shares. The foregoing restriction is subject to certain exceptions. Such exceptions include a bid or purchase permitted under the Universal Market Integrity Rules for Canadian Marketplaces of the Investment Industry Regulatory Organization of Canada relating to market stabilization and passive market making activities, and a bid or purchase made for and on behalf of a customer where the order was not solicited during the period of distribution. Subject to applicable laws and in connection with the Offering, the Agent may over-allot or effect transactions that stabilize or maintain the market price of the Common Shares at levels other than which would otherwise prevail on the open market, including stabilizing transactions; short sales; purchases to cover positions created by short sales; imposition of penalty bids; and syndicate covering transactions. Stabilizing transactions consist of bids or purchases made for the purpose of preventing or retarding a decline in the market price of the Common Shares while the Offering is in progress.

DESCRIPTION OF SECURITIES BEING DISTRIBUTED

The Shares will have all of the characteristics, rights, and restrictions of the Common Shares. Holders of Common Shares are entitled to receive notice of, attend and vote at, meetings of shareholders (other than meetings at which only holders of another class or series of shares are entitled to vote separately as a class or series). Each Common Share carries the right to one vote. Holders of Common Shares are entitled to receive any dividends declared by the Corporation in respect of the Common Shares, subject to the rights of the holders of preferred shares or other classes ranking in priority to the Common Shares with respect of the payment of dividends. In the event of the liquidation, dissolution or winding-up of the Corporation, holders of Common Shares are also entitled to receive, on a pro rata basis, the remaining property and assets of the Corporation available for distribution after payment of all its liabilities and subject to the rights of the holders of preferred shares or other classes ranking in priority to the Common Shares.

As at the date of this prospectus, there were 447,265,029 Common Shares issued and outstanding. Following the completion of the Offering, there will be up to an additional  Common Shares issued and outstanding (assuming the sale of all Shares and the full exercise of the Over-Allotment Option) and such number of additional Common Shares issued and outstanding will increase further upon the exercise of any Warrants or Agent Warrants.

Agent Warrants

As additional consideration for the services rendered in connection with the Offering, the Corporation has agreed to issue to the Agent such number of Agent Warrants as is equal to 8% of the aggregate number of Shares sold under the Offering (including any Over-Allotment Shares). Each Agent Warrant will entitle the holder to purchase one Share, at a purchase of price of $  per Share, for a period of 12 months following the Closing Date. This prospectus also qualifies the distribution of the Agent Warrants and the Shares underlying the Agent Warrants.

The certificate representing the Agent Warrants will provide for standard adjustments in the number of Shares issuable upon the exercise of the Agent Warrants or the exercise price per Agent Warrant upon the occurrence of certain events, including: (a) a subdivision of the Common Shares into a greater number of Common Shares or a consolidation of the Common Shares into a lesser number of Common Shares; (b) the issuance of Common Shares or securities exchangeable or convertible into Common Shares to all or substantially all the holders of Common Shares by way of a stock dividend or other distribution; (c) the issuance to all or substantially all of the holders of the Common Shares of rights, options, or warrants under which such holders are entitled, during a period expiring not more than 45 days after the record date for such issuance, to subscribe for or purchase Common Shares, or securities exchangeable for or convertible into Common Shares, at a price per Common Share to the holder (or at an exchange or conversion price per share) of less than 95% of the “current market price” of the Common Shares on such record date; and (d) subject to certain exceptions, a distribution by the Corporation to all or substantially all the holders of the Common Shares, of securities of any class (whether of the Corporation or any other corporation) other than Common Shares, rights, options or warrants, evidence of indebtedness, or cash, securities, or other property or assets.

The Agent Warrants are non-transferable and will not be listed or quoted on any securities exchange. The holders of the Agent Warrants will not have any voting right or any other rights which a holder of Common Share would have.

Book Entry System

Shares issued in “book-entry only” form must be purchased, transferred or redeemed through Participants in the depository service of CDS (or such other depository as is identified in an accompanying Prospectus Supplement or any successor to CDS, as the case may be). Each of the underwriters, dealers or agents, as the case may be, named in this Prospectus will be a Participant. On the closing of a book-entry only offering, the Corporation may, in its discretion, deposit the aggregate number of Shares subscribed for under such offering with CDS in “uncertificated” form or cause a global certificate or certificates representing the aggregate number of Shares subscribed for under such offering to be delivered to, and registered in the name of, CDS or its nominee. Except as described below, no purchaser of Shares will be entitled to a certificate or other instrument from the Corporation or CDS evidencing that purchaser’s ownership thereof, and no purchaser will be shown on the records maintained by CDS or its nominee except through a book-entry account of a Participant acting on behalf of such purchaser. Each purchaser of Shares will receive a customer confirmation of purchase from the registered dealer from which the Shares are purchased in accordance with the practices and procedures of such registered dealer. The practices of registered dealers may vary, but generally customer confirmations are issued promptly after execution of a customer order. CDS will be responsible for establishing and maintaining book-entry accounts for its Participants having interests in the Shares. Reference in this Prospectus to a holder of Shares means, unless the context otherwise requires, the owner of the beneficial interest in the Shares.

If the Corporation determines, or CDS notifies the Corporation in writing, that CDS is no longer willing or able to discharge properly its responsibilities as depository with respect to the Shares and the Corporation is unable to locate a qualified successor, or if the Corporation at its option elects, or is required by law, to terminate the book-entry system, then the Shares will be issued in fully registered form to holders or their nominees.

Payments and Notices

As long as CDS or its nominee is the registered holder of the Securities, CDS or its nominee, as the case may be, will be considered the sole owner of the Securities for the purposes of receiving notices or payments on the Securities. In such circumstances, the responsibility and liability of the Corporation in respect of notices or payments on the Securities is limited to giving or making payment of any principal, redemption, dividend and interest due on the Securities (as applicable) to CDS or its nominee.

Each holder must rely on the procedures of CDS and, if such holder is not a Participant, on the procedures of the Participant through which such holder owns its interest, to exercise any rights with respect to the Securities. The Corporation understands that under existing policies of CDS and industry practices, if the Corporation requests any action of holders or if a holder desires to give any notice or take any action which a registered holder is entitled to give or take with respect to the Securities, CDS would authorize the Participant acting on behalf of the holder to give such notice or to take such action, in accordance with the procedures established by CDS or agreed to from time to time by the Corporation, any trustee and CDS. Any holder that is not a Participant must rely on the contractual arrangement it has directly, or indirectly through its

financial intermediary, with its Participant to give such notice or take such action.

The Corporation and the Agent as applicable, will not have any liability or responsibility for: (i) records maintained by CDS or its nominee relating to beneficial ownership interest in the Securities held by CDS or its nominee or the book-entry accounts maintained by CDS or its nominee; (ii) maintaining, supervising or reviewing any records relating to any such beneficial ownership interest; or (iii) any advice or representation made by or with respect to CDS and contained herein or in any trust indenture relating to the rules and regulations of CDS or any action to be taken by CDS or at the directions of the Participants.

PRIOR SALES

During the 12-month period prior to the date of this prospectus, the Corporation issued the following Common Shares and securities that are convertible or exchangeable into Common Shares:

Date of Issue January 3, 2023 January 3, 2023 January 16, 2023 October 27, 2023	Class of Securities Incentive stock options(1) Incentive stock options(1) Share purchase warrants(2) Common Shares(3)	Number of Common Shares 300,000 200,000 2,000,000 421,974,842	Priceper Common Share
			$0.10 $0.20 $0.10 $0.02

Notes:

(1) These incentive stock options were granted pursuant to the Option Plan, which is a “rolling up to 10%” stock option plan, meaning that the total number of incentive stock options that the Corporation grants under the Option Plan cannot exceed 10% of the issued and outstanding Common Shares, calculated on the date of each grant.
(2) These share purchase warrants were issued to the holders of the Debentures as an inducement to restructure the Debentures on terms favourable to the Corporation. See “Recent Developments” .
(3) These Common Shares were issued to certain creditors, including investment vehicles advised or managed by Vesta, to settle outstanding indebtedness of the Corporation in the aggregate amount of $8,439,497. See “ Recent Developments ”.

TRADING PRICE AND VOLUME

Common Shares

The following table sets forth information relating to the monthly trading of the Common Shares on the TSXV during the 12-month period prior to the date of this prospectus.

Month November 2023(1) October 2023 September 2023 August 2023 July 2023 June 2023 May 2023 April 2023 March 2023 February 2023 January 2023 December 2022	High $0.015 $0.020 $0.035 $0.050 $0.075 $0.060 $0.055 $0.060 $0.085 $0.125 $0.100 $0.140	Low $0.005 $0.015 $0.015 $0.025 $0.020 $0.005 $0.015 $0.035 $0.030 $0.075 $0.060 $0.040	Volume
			99,215 10,015 60,200 109,700 505,920 191,600 165,000 107,011 401,073 471,000 237,500 736,597

Note:

(1) Up to and including November 17, 2023, the trading day immediately prior to the date of this prospectus.

Listed Warrants

The following table sets forth information relating to the monthly trading of the Listed Warrants on the TSXV during the 12-month period prior to the date of this prospectus.

Month August 2023 July 2023(1) June 2023 May 2023 April 2023 March 2023 February 2023 January 2023 December 2022 November 2022 October 2022 September 2022	High N/A N/A 0.005 0.005 0.005 0.005 0.005 0.005 0.005 0.005 0.005 0.005	Low N/A N/A 0.005 0.005 0.005 0.005 0.005 0.005 0.005 0.005 0.005 0.005	Volume
			N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A

Note:

(1) On June 19, 2023, the Listed Warrants expired and were delisted from the TSXV.

INTERESTS OF EXPERTS

Certain legal matters relating to the issue and sale of the securities offered hereunder will be passed upon by Counsel. As of the date of this prospectus, the partners and associates of MLT Aikins LLP, own, directly or indirectly, in the aggregate, less than 1% of the Common Shares. As of the date of this prospectus, the partners and associates of Borden Ladner Gervais LLP own, directly or indirectly, in the aggregate, less than 1% of the issued and outstanding Common Shares.

KPMG LLP are the auditors of the Corporation and have confirmed that they are independent with respect to the Corporation within the meaning of the relevant rules and related interpretations prescribed by the relevant professional bodies in Canada and any applicable legislation or regulations.

None of the aforementioned firms or persons, nor any directors, officers, or employees of such firms, are currently expected to be elected, appointed, or employed as a director, officer, or employee of the Corporation or of any of associate or affiliate of the Corporation.

ELIGIBILITY FOR INVESTMENT

In the opinion of Counsel, based on the current provisions of the Tax Act and the Tax Proposals, the Shares, if issued on the date hereof, would be “qualified investments” under the Tax Act for a trust governed by a Registered Plan, provided that, and subject to the provisions of any particular Registered Plan, at such time, the Common Shares are listed on a “designated stock exchange” within the meaning of the Tax Act (which, on the date hereof, includes the TSXV), or the Corporation otherwise qualifies as a “public corporation” (as defined in the Tax Act).

Adverse tax consequences may apply to a Registered Plan, or an annuitant, beneficiary or subscriber thereunder or holder thereof, if the Registered Plan acquires or holds property that is not a qualified investment.

Notwithstanding that the Shares may be a “qualified investment” for a trust governed by an FHSA, an RDSP, an RESP, an RRIF, an RRSP, or a TFSA, a Registered Holder will be subject to a penalty tax if the Shares are a “prohibited investment” within the meaning of the Tax Act for such FHSA, RDSP, RESP, RRIF, RRSP, or TFSA. The Shares will generally not be a “prohibited investment” for a trust governed by an FHSA, an RDSP, an RESP, an RRIF, an RRSP, or a TFSA provided that the Registered Holder: (a) deals at arm’s length with the Corporation for the purposes of the Tax Act, and (b) does not have a “significant interest” (as defined in the Tax Act) in the Corporation. In addition, the Shares will generally not be a prohibited investment if such securities are “excluded property” (as defined in the Tax Act) for trusts governed by an FHSA, an RDSP, an RESP, an RRIF, an RRSP, or a TFSA.

Prospective purchasers who intend to hold Shares in a Registered Plan should consult their own tax advisors with respect to the application of these rules in their particular circumstances.

RISK FACTORS

An investment in the Shares is speculative and involves a high degree of risk. A prospective purchaser should carefully consider the information included or incorporated by reference in this prospectus and the historical consolidated financial statements of the Corporation and related notes before making an investment decision regarding the Shares. The risk factors contained in the MD&A and AIF (copies of which may be accessed at www.sedarplus.ca) are incorporated by reference in this prospectus. Such risks may not be the only risks facing the Corporation. Additional risks not currently known may also

negatively impact the business, operations, and results of operations of the Corporation. In addition to such risk factors, purchasers should consider the below additional risks.

Accordingly, the Corporation does not, and shareholders of the Corporation and potential purchasers of Shares should not, rely on forward-looking information as a prediction of actual results. See “Forward-Looking Information”.

Risks Relating to the Offering

Loss of Entire Investment: An investment in the Shares is speculative and may result in the loss of the entire investment of a purchaser. Only potential purchasers who are experienced in high-risk investments and who can withstand a complete loss of their investment should consider purchasing the Shares in this Offering. Before making an investment decision, prospective purchasers of Shares should consider the information contained and incorporated by reference in this prospectus and, in particular, the risk factors set out in this prospectus and in the documents incorporated by reference in this prospectus. Readers are cautioned that such risk factors are not exhaustive.
Completion of the Offering: The completion of the Offering is subject to receipt of approval from the TSXV, which approval may not be obtained. The Corporation will apply to the TSXV to list the Shares on the TSXV. Listing will be subject to the Corporation satisfying all the listing requirements of the TSXV and there can be no assurance that such listing will be successful.
Use of Proceeds: The Corporation currently intends on allocating the net proceeds received from the Offering as described under the heading “Use of Proceeds” in this prospectus. However, management has the discretion in the actual application of the proceeds of the Offering and may elect to allocate proceeds differently from that described under the heading “Use of Proceeds” in this prospectus if it believes that it would be in the best interests of the Corporation to do so if circumstances change. The failure by management to apply these funds effectively could have a material adverse effect on the business of the Corporation.
Dilution: As at the date of this prospectus, there were 447,265,029 Common Shares issued and outstanding. Following the completion of the Offering, there will be up to an additional  Common Shares issued and outstanding (assuming the sale of all Shares and the full exercise of the Over-Allotment Option) and such number of additional Common Shares issued. The increase in the number of Common Shares issued and outstanding, and the sale of such securities, may have a depressive effect on the market price of the Common Shares. In addition, as a result of such additional Common Shares, the voting power of the existing shareholders of the Corporation will be diluted.

The Corporation cannot predict what effect, if any, future sales of Common Shares, or the availability of Common Shares for future sale, or the offer of additional Common Shares in the future, will have on the market price of Common Shares. Sales or an additional offering of substantial numbers of Common Shares in the public market, or the perception or any announcement that such sales or an additional offering could occur, could adversely affect the market price of Common Shares and may make it more difficult for Shareholders to sell their Common Shares at a time and price which they deem appropriate and could also impede the ability of the Corporation to raise capital through the issue of equity securities.

Share Price Volatility: The market price of the Common Shares may be volatile. The volatility may affect the ability of shareholders to sell the Common Shares at an advantageous price. Market price fluctuations in the Common Shares may be due to the operations of the Corporation failing to meet the expectations of securities analysts or investors in any quarter, downward revision in the estimates of securities analysts, governmental regulatory action, adverse change in general market conditions or economic trends, acquisitions, dispositions or other material public announcements by the Corporation or its competitors, along with a variety of additional factors, including, without limitation, those set forth under “Forward-Looking Information” in this prospectus. In addition, the market price for securities in the stock markets, including the TSXV, recently experienced significant price and trading fluctuations. These fluctuations have resulted in volatility in the market prices of securities that often has been unrelated or disproportionate to changes in operating performance. These broad market fluctuations may adversely affect the market price of the Common Shares.
Future Liquidity: Shareholders of the Corporation may be unable to sell significant quantities of Common Shares into the public trading markets without a significant reduction in the price of their Common Shares, or at all. There can be no assurance that there will be sufficient liquidity of the Common Shares on the trading market, or that the Corporation will continue to meet the listing requirements of the TSXV or achieve listing on any other public listing exchange.

Dividends: The Corporation has never declared or paid any dividends on the Common Shares. The Corporation currently intends to retain future earnings, if any, for future operations, expansion, and debt repayment, if necessary. Therefore, at present, there is no intention to pay dividends and a dividend may never be paid. Any decision to declare and pay dividends will be made at the discretion of the board of directors of the Corporation and will depend on, among other things, the results of operations and financial condition of the Corporation, solvency tests imposed by corporate law, and such other factors that the board of directors of the Corporation may consider relevant.
In addition to the foregoing, the ability of the Corporation to institute and pay dividends now or in the future is or may be limited by covenants contained in any debt facilities or other agreements governing any indebtedness that the Corporation may incur in the future, including the terms of any credit facilities the Corporation may enter into with third party lenders. It is not uncommon that credit facilities will prevent a borrower from declaring or paying any dividends to any of its shareholders or returning any capital (including by way of dividend) to any of its Shareholders.

As a result of the foregoing factors, purchasers of the Common Shares may not receive any return on an investment in the Common Shares unless they sell such Common Shares for a price greater than that which they paid for them.

Investment Eligibility: There can be no assurance that the Shares will continue to be qualified investments under relevant Canadian tax laws for trusts governed by deferred profit-sharing plans, FHSAs, RDSPs, RESPs, RRIFs, RRSPs, and TFSAs. The Tax Act imposes penalties for the acquisition or holding of nonqualified or prohibited investments. See “Eligibility for Investment” .
Liquidity preferences: Upon the liquidation of the Corporation, holders of the Common Shares will be entitled to be paid a distribution out of the assets of the Corporation available to its shareholders only after the claims of all creditors of the Corporation have been met.

Risks Relating to the Share Consolidation

TSX Acceptance: The Share Consolidation is subject to TSXV acceptance. There can be no assurance that the TSXV will accept the Share Consolidation on terms satisfactory to the Corporation, or at all.
Resulting Price: There can be no assurance that reducing the number of issued and outstanding Common Shares through the Share Consolidation will increase the per share market price of the Common Shares or that the market price of the Common Shares will not decrease in the future. The market price of the Common Shares will also be affected by the Corporation’s financial and operational results, including liquidity and capital resources, industry conditions, the market’s perception of the Corporation’s business and other factors, which are unrelated to the number of Common Shares outstanding.
Total market capitalization: There can be no assurance that the anticipated market price immediately following the implementation of the Share Consolidation will be realized or, if realized, will be sustained or will increase, however it is anticipated that the market price of the Common Shares immediately following the implementation of the Share Consolidation is expected to be approximately less than or equal to the market price of the Common Shares prior to the implementation of the Share Consolidation, multiplied by ten. There is a risk that the total market capitalization of the Common Shares (the market price of the Common Shares multiplied by the number of Common Shares outstanding) after the implementation of the Share Consolidation may be lower than the total market capitalization of the Common Shares prior to the implementation of the Share Consolidation.
Reduced Liquidity: If the Share Consolidation is implemented and the market price of the Common Shares (adjusted to reflect the Share Consolidation ratio) declines, the percentage decline as an absolute number and as a percentage of our overall market capitalization may be greater than would have occurred if the Share Consolidation had not been implemented. Both the total market capitalization of a company and the adjusted market price of such company’s shares following a consolidation may be lower than they were before the consolidation took effect. The reduced number of Common Shares that would be outstanding after the Share Consolidation is implemented could adversely affect the liquidity of the Common Shares.
Odd Lots: The Share Consolidation may result in some shareholders owning “odd lots” of fewer than 500 Common Shares on a post Share Consolidation basis. Odd lots may be more difficult to sell, or attract greater transaction costs per share to sell, and brokerage commissions and other costs of transactions in

odd lots are generally somewhat higher than the costs of transactions in “round lots” of even multiples of 500 shares.

Shareholder Vote: The Share Consolidation is subject to approval of the shareholders of the Corporation. There can be no assurances that the shareholders of the Corporation will vote in favour of the Share Consolidation.
Share Price Volatility . The Share Consolidation may cause the market price of the Common Shares to be volatile. The volatility may affect the ability of shareholders to sell the Common Shares at an advantageous price. Market price fluctuations in the Common Shares may be due to the operations of the Corporation failing to meet the expectations of securities analysts or investors in any quarter, downward revision in the estimates of securities analysts, governmental regulatory action, adverse change in general market conditions or economic trends, acquisitions, dispositions or other material public announcements by the Corporation or its competitors, along with a variety of additional factors, including, without limitation, those set forth under “Forward-Looking Information” in this prospectus. In addition, the market price for securities in the stock markets, including the TSXV, recently experienced significant price and trading fluctuations. These fluctuations have resulted in volatility in the market prices of securities that often has been unrelated or disproportionate to changes in operating performance. These broad market fluctuations may adversely affect the market price of the Common Shares.

Risks Relating to the Business

Going Concern: There is considerable uncertainty with respect to the ability of the Corporation to continue operations. The Corporation has not yet achieved profitable operations and had a deficit of $57,958,589 as at June 30, 2023; generated net income of $8,667,973 during the three months ended June 30, 2023, which is inclusive of a gain on deconsolidation of $10,446,815; used cashflow in operating activities of $666,550 during the three months ended June 30, 2023; and had a working capital deficiency of $13,878,199, which included current debt of $11,864,493, as at June 30, 2023. As of the date of this prospectus, events and conditions continue to exist which create material uncertainty that may cast significant doubt on the Corporation’s ability to continue as a going concern.
Bankruptcy of eBuyNow: On June 26, 2023, eBuyNow made a voluntary assignment into bankruptcy under the Bankruptcy and Insolvency Act (Canada). The bankruptcy involves numerous risks, including the following:
All of the revenues of the Corporation were generated through eBuyNow and its wholly-owned subsidiaries and there is a risk that existing contracts between eBuyNow and its subsidiaries and certain licensors, distributors, and manufacturers may be terminated as part of the bankruptcy.
The bankruptcy constitutes an event of default under the terms of the indebtedness of the Corporation to CMC and Vesta, but they have agreed to waive such defaults, subject to certain conditions.
There is a risk that the loss of control or relinquishment of substantially all of the assets of the Corporation as part of the bankruptcy could ultimately result in the Corporation being unable to continue operations.
There is the potential for litigation to arise from creditors in connection with the bankruptcy resulting in contingent liabilities and additional legal costs. However, neither the Corporation nor the insolvency trustee is aware of any such litigation as at the date of this prospectus.
There can be no assurance that the Corporation will not experience serious financial difficulties in the future that would necessitate the commencement of restructuring proceedings, which could have a material adverse effect on the Corporation’s business, financial position, financial performance and prospects, and the legal and economic entitlements of the Corporation’s stakeholders.
Negative Operating Cash Flow: The Corporation had negative operating cash flow in its most recent financial year. The Corporation’s ability to generate positive operating cash flow will depend on the Corporation’s ability to deliver new products to market. To the extent the Corporation has negative cash flows in future periods, the Corporation may use a portion of its general working capital or seek additional equity financing to fund such negative cash flows. There is no assurance that additional capital or other types of financing will be available if needed or that these financings will be on terms at least as favorable

to the Corporation as those previously obtained, or at all.

Requirement for Additional Financing: Upon completion of the Offering and the bankruptcy process, the Corporation may require additional funds by way of debt or equity financings to continue to fund its operating, investing, and financing activities in the foreseeable future. There can be no assurance as to whether the Corporation will be able to achieve profitable operations, that debt or equity financing will be available or sufficient to meet the requirements of the Corporation or, if debt or equity financing is available, that it will be available on terms acceptable to the Corporation or at all. The inability of the Corporation to achieve profitable operations or to access debt or equity financing for its operations could have a material adverse effect on the financial condition, results of operations, or prospects of the Corporation. These conditions create a material uncertainty which may cast significant doubt on the ability of the Corporation to continue as a going concern.
Conditions to the Offering may not be Satisfied: The closing of the Offering is subject to the satisfaction of certain closing conditions. There can be no assurance that such conditions will be met.
Additional financing needs: The Corporation may require additional funds to continue operations. The Corporation has limited financial resources, and there is no assurance that additional funding will be available to the Corporation to carry out the completion of all proposed activities. Although the Corporation has been successful in the past in obtaining financing through the sale of equity and debt securities, there can be no assurance that the Corporation will be able to obtain adequate financing in the future or that the terms of such financing will be favorable if available at all or, if available, that any such financing will be on acceptable terms. Failure to obtain such additional financing could result in the curtailment of operations, liquidation of assets, seeking additional capital on less favorable terms, the Corporation having to file for bankruptcy, or undertaking remedial measures such as a restructuring or insolvency proceeding. These conditions indicate the existence of a material uncertainty that may cast significant doubt about the ability of the Corporation to continue as a going concern. Failure by the Corporation to raise additional financing could materially adversely affect the business, operations, and financial condition and prospects of the Corporation. Refer to “ Going Concern ” for more information.
Indebtedness: The Corporation is at risk of not being able to settle its debt obligations and the Corporation may not be able to extend, replace or refinance its existing debt obligations on terms reasonably acceptable to the Corporation, or at all. If liquidity is needed, the Corporation may not be able to access other external financial resources sufficient to enable it to repay its debt obligations when due. Failure to pay debt obligations when due may cause the lenders of the Corporation to take certain actions and the Corporation may be required to cease operations, close down, sell or otherwise dispose of all or part of the business of the subsidiaries of the Corporation, any of which would have a material adverse impact on the business and financial condition of the Corporation.
Economic conditions: The Corporation has global operations and sales and, as such, has exposure to global credit and financial factors on consumers in its areas of operations. General economic conditions, including the possibility of a recession, may result in reduced consumer and government spending and may have an impact on the financial results of the Corporation.
History of operating losses: The Corporation had an accumulated deficit through March 31, 2023. The deficit may increase in the near term, as the Corporation continues its product development, establishes sales channels for its new products and business expansion.
History of negative cash flow: The Corporation has a history of negative cash flow, including negative cash flow from operating activities. The Corporation cannot guarantee that it will become cash-flow positive or profitable. Negative cash flow or the failure to become profitable in any future fiscal period could result in an adverse material change to the Corporation.
Product defects: The Corporation relies on third party manufacturing and from time to time there may be product defects caused by the manufacturing process, assembly, or engineering, particularly when first introduced or when new versions are released. The Corporation may not discover such defects or errors until after a product has been released to the public. Defects and errors in the Corporation’s products could materially and adversely affect the Corporation’s reputation, result in significant costs and impair the Corporation’s ability to sell the Corporation’s products in the future.
Tariffs: The Corporation relies heavily on manufacturing in China but at times may use factories in, Vietnam, Taiwan, or Malaysia, and such products may be subject to changing tariffs applied by selling countries to the countries of origin with little or no warning. This can affect product margins and

competitiveness of sales with local manufacturers.

Seasonality: The Corporation believes its transaction-based revenues will begin to represent an increasing proportion of its overall revenue mix over time and expects seasonality of its quarterly results to vary. The Corporation may experience seasonal fluctuations for a variety of reasons, many of which are outside the control of the Corporation. The earnings volatility associated with seasonality may affect the ability of the Corporation to access capital and could have a material adverse impact on the liquidity of the Corporation.
Supply chain: The Corporation relies on major components to be manufactured by original equipment manufacturers. Reliance on original equipment manufacturers, as well as industry supply conditions generally involves several risks, including the possibility of defective products, a shortage of components and delays in delivery schedules, and increases in component costs. The Corporation has single-sourced manufacturer relationships, if these sources are unable or unwilling to manufacture its products in a timely and reliable manner, the Corporation could experience temporary distribution interruptions, delays, or inefficiencies, adversely affecting its results of operations. Even where alternative original equipment manufacturers are available, qualification of the alternative manufacturers and establishment of reliable suppliers could result in delays affecting operating results adversely. Supply shortages and inventory constraints can occur at times because of production difficulties, unanticipated demand or delivery delays and may have a short-term adverse material effect on the results of operations and subsequent financial condition of the Corporation. The COVID-19 pandemic has had far-reaching impacts on the manufacturing and production of consumer electronics in Asia. Further, increased tensions between the United States of America and China over Taiwan could materially impact the ability of the Corporation to manufacture products in China or Taiwan or rely on original equipment manufacturers located in China or Taiwan for supply chain components. For the Corporation, this has resulted in lower volumes of inventory being available for sale and associated delays in new product launches. Recently, the Corporation has also experienced increases in production, labour, and shipping costs. The continuation or worsening of such conditions could adversely impact the revenues, ability to provide products and services, and operating results of the Corporation.
International sales: There can be no assurances that the Corporation will be able to grow its international business in markets such as Asia, South America, and Eastern Europe. Demand for international sales in Asia, South America, and Eastern Europe may not grow as expected or at all, and there is no assurance that the Corporation will succeed in expanding into new markets.
New market risk: The ability of the Corporation to successfully enter new markets is subject to uncertainties, there are no guarantees that it can establish new distribution channels or continue to develop new strategic partnerships.
Profitability and growth: There can be no assurance that the business and growth strategy of the Corporation will enable the Corporation to be profitable. The future operating results of the Corporation will depend on a number of factors, including, marketing, product development, customer service and response to changing markets. There can be no assurance that the Corporation will be able to effectively manage its growth, and any failure to do so could have a material adverse effect on the business, operations, and financial condition of the Corporation.
Third party licenses: The Corporation relies on licenses from third parties. There can be no assurance that these third-party licenses will continue to be available to the Corporation on commercially reasonable terms. The loss of, or inability to maintain, any of these licenses, may result in delays or reductions in products, which could materially adversely affect the business, operations, and financial condition of the Corporation.
Sales and marketing expenditures: The future growth and profitability of the Corporation will be dependent in part on the effectiveness and efficiency of the sales and marketing expenditures of the Corporation. There can be no assurance that the Corporation will experience benefits from sales and marketing expenditures in the future. In addition, no assurance can be given that the planned sales and marketing expenditures of the Corporation will result in increased sales, will generate sufficient levels of product and service awareness or that the Corporation will be able to manage such sales and marketing expenditures on a cost-effective basis.
Product liability: The Corporation may be exposed to product liability claims in the use of its products. Although it takes precautions, there can be no assurance that the Corporation will avoid significant product liability exposure.

Product development: The market for the products of the Corporation is characterized by rapidly changing technology, evolving industry standards, and customer requirements. The introduction of products embodying new technology and the emergence of new industry standards can render the existing technology solutions of the Corporation obsolete or unmarketable and can exert price pressures on existing solutions. It is critical to the success of the Corporation to be able to anticipate and react quickly to changes in technology or in industry standards and continue to be able to successfully develop and introduce new, enhanced, and competitive products on a timely basis. Any new products or solutions could require long technical development and testing periods. This process can be unpredictable, meaning products and solutions may not be introduced in a timely manner or may not achieve the broad market acceptance necessary to generate significant revenues.
Rapid technological developments: The precise segment of the market that is targeted by the Corporation is characterized by rapid technological change, evolving industry standards, frequent new product introductions, and short product life cycles. To keep pace with the technological developments, achieve product acceptance and remain relevant to users, the Corporation will need to continue developing new and upgraded functionality of its products and services. The Corporation will need to adapt to new business environments, competing technologies and products developed by its competitors. The process of developing new technology is complex and uncertain. To the extent the Corporation is not able to adapt to new technologies or standards, or both, experiences delays in implementing adaptive measures or fails to accurately predict emerging technological trends and the changing needs of end-users, the Corporation may lose clients or fail to secure new clients. There can be no assurances that the Corporation will continue to develop products and services incorporating advanced technologies and there can be no assurances that the products and services that the Corporation develops will experience market success considering changing consumer expectations and future market demand. The development and application of new technologies involve time, substantial costs, and risks. There can be no certainty that the Corporation will be able to develop new products, services, and technologies to keep up to date with developments and to launch such products, services, or technologies in a timely manner or at all. There can be no certainty that such products will be popular with users or that such products or new technologies will be reliable, robust, and not susceptible to failure. Any of these factors could result in an adverse material change to the Corporation.
Scaling the sales and marketing team: The ability of the Corporation to achieve significant growth in future revenue will largely depend upon the effectiveness of its sales and marketing efforts, both domestically and internationally. The Corporation has invested and intends to continue to invest in expanding its sales force but there is no assurance that the intended expansion will occur or will be successful.
Key employees: The success of the Corporation is largely dependent on the performance of its key directors, officers, and employees. The failure to retain key directors, officers, and employees and to attract and retain additional key employees with the necessary skills could have a material adverse impact upon the growth and profitability of the Corporation. There can be no assurance that the Corporation will be successful in attracting and retaining such personnel and the departure of any of its directors or executive officers could have a material adverse effect on the business, operations, and financial condition of the Corporation.
IP rights: The commercial success of the Corporation is reliant on the ability to develop new or improved technologies, manufacture products, and to successfully obtain patents or other proprietary or statutory protection for these technologies and products in Canada and other jurisdictions. There can be no assurances that the Corporation will be able to seek patents for concepts, components, protocols and other inventions that the Corporation considers having commercial value and there can be no assurances that such patents will give the Corporation a technological advantage. The Corporation may not be able to devote significant resources necessary to protect its proprietary technology and the Corporation may not be able to develop technology that is patentable, patents may not be issued in connection with our pending applications, and the patented claims allowed may not be sufficient to provide the Corporation with exclusive protection for its technology. Furthermore, any patents or licenses to patents issued to the Corporation could be challenged, invalidated, or circumvented and may not provide proprietary protection or a competitive advantage to the Corporation. Prosecution and protection of the intellectual property rights sought can be costly and uncertain, often involve complex legal and factual issues and consume significant time and resources. The laws of certain countries may not protect intellectual property rights to the same extent as the laws of Canada or the United States.
Cybersecurity: Increasingly, companies are subject to a wide variety of attacks on their networks and

systems on an ongoing basis. In addition to traditional computer “hackers”, malicious code (such as viruses and worms), employee theft or misuse, and denial-of-service attacks, sophisticated nation-state and nation-state supported actors now engage in cybersecurity attacks (including advanced persistent threat intrusions). Despite significant efforts to create security barriers to such threats, it is virtually impossible for the Corporation to entirely mitigate these risks. The security measures the Corporation has integrated into its internal network and platform, which are designed to detect unauthorized activity and prevent or minimize security breaches, may not function as expected or may not be sufficient to protect its internal networks and platform against certain attacks. In addition, techniques used to sabotage or to obtain unauthorized access to networks in which data is stored or through which data is transmitted change frequently and generally are not recognized until launched against a target. As a result, the Corporation may be unable to anticipate these techniques or implement adequate preventative measures to prevent an electronic intrusion into its networks. If a breach of customer data security were to occur, as a result of third-party action, employee error, malfeasance or others, and the confidentiality, integrity or availability of the customers’ data was disrupted, the Corporation could incur significant liability to its customers and to individuals or business whose information was being stored by its customers, and its products may be perceived as less desirable, which could negatively affect the business of the Corporation and damage its reputation. Security breaches impacting the products of the Corporation could result in a risk of loss or unauthorized disclosure of customers’ information, which, in turn, could lead to litigation, governmental audits and investigations, and possible liability. In addition, a network or security breach could damage the relationships of the Corporation with its existing customers, resulting in the loss of customers, and have a negative impact on its ability to attract and retain new customers. These breaches, or any perceived breach, of the network of the Corporation, its customers’ networks, or other networks, whether or not any such breach is due to a vulnerability in the products of the Corporation, may also undermine confidence in its products and result in damage to its reputation, negative publicity, loss of customers and sales, increased costs to remedy any problem, and costly litigation. Third parties may attempt to fraudulently induce employees or customers into disclosing sensitive information such as user names, passwords or other information, or otherwise compromise one or more of the security of the network, electronic systems, and physical facilities of the Corporation in order to gain access to its data or its customers’ data, which could result in significant legal and financial exposure, loss of confidence in the security of its products, interruptions or malfunctions in its operations, and, ultimately, harm to its future business prospects and revenue. The Corporation may be required to expend significant capital and financial resources to protect against such threats or to alleviate problems caused by breaches in security.

 Competition: The Corporation is engaged in an industry that is highly competitive and rapidly evolving. In order to retain and attract new customers and brand partnerships, the Corporation will need to continue to execute its orders at competitive prices. The competitors of the Corporation will range from small venture backed enterprises with limited resources to multinational technology companies with larger customer bases. The multi-national technology companies will have more established name recognition and substantially greater financial, marketing, technological and personnel resources than the Corporation will have. These larger and better capitalized competitors may have access to capital in greater amounts and at lower costs than the Corporation will have access to, and thus, may be better able to respond to changes in the technology, consumer, and household goods markets. The competitors of the Corporation may be able to acquire skilled professionals, fund internal growth, and offer products and services at lower prices than the Corporation. As a result, the competitors of the Corporation may deliver new products and solutions earlier, or provide more attractively priced, enhanced, or betterquality products than the Corporation. To remain competitive, the Corporation will require a continued high level of investment in research and development, marketing, sales, and client support. If the Corporation cannot compete against existing and future competitors, its business, results of operations and financial condition could be materially and adversely affected. The Corporation cannot assure that it will be able to compete effectively against existing and future competitors. In addition, competition or other competitive pressures may result in price reductions, reduced margins, or loss of market share, any of which could have a material adverse effect on the business, operations, or financial condition of the Corporation.

 Inability to respond to customer demands: The new products provided by the competitors of the Corporation may render the existing products of the Corporation less competitive. The success of the Corporation will depend, in part, on the ability of the Corporation to respond to demands of customers for new products on a timely and cost-effective basis and to address the increasingly sophisticated requirements and varied needs of its customers and prospective customers. Further, the Corporation may not be successful in marketing and introducing new products to its customers and brand partners. New product enhancements may not achieve market acceptance. Any failure on the part of the Corporation to anticipate or respond adequately to customer requirements or changing industry practices, or any

significant delays in the development, introduction or availability of new products or product enhancements could result in an adverse material change to the Corporation.

Reliance on contract manufacturers: The Corporation uses contract manufacturers to manufacture its products and products under development and its reliance on contract manufacturers subjects it to significant operational risks, many of which would impair its ability to deliver products to its customers should they occur. Each of the contract manufacturers of the Corporation supplies a higher volume of products to the larger competitors of the Corporation. The Corporation cannot provide assurances that its contract manufacturers will continue to work with the Corporation, that they will continue to be able to operate profitably, that they will be able to meet the manufacturing needs of the Corporation in a satisfactory and timely manner or that it can obtain additional or alternative manufacturers when and if needed. The availability of the contract manufacturers of the Corporation and the amount and timing of resources to be devoted by them to the Corporation is not within the control of the Corporation, and the Corporation cannot provide assurances that it will not encounter manufacturing problems that would materially harm its business. Furthermore, the arrangements of the Corporation with contract manufacturers are subject to re-negotiation.
Absence of operating history as a public company: The management of the Corporation has limited experience operating public companies. To operate effectively, the Corporation will be required to continue to implement changes in certain aspects of its business. The Corporation will need to improve its information systems and develop, manage, and train management level as well as other employees to comply with ongoing public company requirements.
Litigation risk: The Corporation may become party to one or more of litigation, mediation, and arbitration from time to time in the ordinary course of business which could adversely affect its business. Many aspects of the business of the Corporation will require the Corporation to accept certain risks, including risks that expose the Corporation to liability under the Law. These risks can include, among others, disputes over trade terms with customers and other market participants, customer losses resulting from product failure and poor customer service. Even if the Corporation prevails in any proceedings, the Corporation could still incur significant legal expenses defending against the claims, even those without merit. Meritless claims can cause damage to the reputation of the Corporation or raise concerns among its customers and existing partnerships. As a result, the Corporation may feel compelled to settle claims, including those without merit, at a significant cost. The initiation of any proceeding against the Corporation could result in an adverse material change to the Corporation.
Transaction risk: Any future acquisitions may result in significant transaction expenses and may present additional risks associated with entering new markets, offering new products, and integrating the acquired companies. Historically, acquisitions have not been a core part of the growth strategy of the Corporation; therefore, management does not have significant experience in successfully completing acquisitions. The Corporation may not have sufficient management, financial and other resources to integrate companies that the Corporation acquires or to successfully operate new businesses. Therefore, the Corporation may be unable to profitably operate an expanded company. Additionally, any new businesses that the Corporation may acquire, once integrated with the existing operations of the Corporation, may not produce expected or intended results.
Management of rapid growth: The business plan of the Corporation anticipates rapid growth, and the Corporation will need to continue to attract, hire and retain highly skilled and motivated officers and employees. It is possible that the Corporation may not be able to attract or retain the officers and employees necessary to manage its growth effectively. Further, the growth of the Corporation depends in part on the success of the strategic relationships of the Corporation with third parties, including relationships with suppliers, developers, designers, referral sources, resellers, payment processors, programmers, and other partners. The Corporation intends to pursue additional relationships with other third parties such as shipping partners and technology providers. If there are any disagreements that cause the Corporation to lose access to products or services from a particular supplier or lead the Corporation to experience a significant disruption in the supply of products or services from a current supplier, especially a single-source supplier, it could have an adverse effect on business and operating results.
Security breaches: The computer infrastructure of the Corporation may potentially be vulnerable to physical or electronic computer break-ins, viruses and similar disruptive problems and security breaches. Any such problems or security breaches could give rise to liabilities to one or more third parties, including the customers of the Corporation, and disrupt its operations. A party may be able to circumvent the security measures of the Corporation and could misappropriate proprietary information or customer information. A security breach or hack can jeopardize the confidential nature of information the

Corporation transmits over the internet, and it can cause interruptions in the operations of the Corporation. To the extent that the activities of the Corporation involve the storage and transmission of proprietary information and personal financial information, security breaches or other hackings could expose the Corporation to a risk of financial loss, litigation, and other liabilities. The current insurance policies of the Corporation may not protect the Corporation against such losses and liabilities. Any of these events, particularly if they result in a loss of confidence in the products of the Corporation, could result in an adverse material change to the Corporation. The Corporation stores personal and other information of their partners, customers, and employees. If the security of this information is compromised or is otherwise accessed without authorization, the reputation of the Corporation may be harmed and exposed to liability and loss of business.

Global data privacy laws: The Corporation’s ability to identify market trends depends on internal market research technology which could become subject to global data privacy laws. While the Corporation takes steps to ensure strict compliance with these legal requirements, changes to the applicability of such laws may impact the Corporation’s ability to effectively conduct an integral aspect of its operations.
Changes to availability of transportation: The Corporation depends on distribution agreements with third-party partners, both domestically and internationally, to transport raw materials and consumerready products. Any increase in the cost of the transportation of the Corporation’s raw materials or products, as a result of increases in fuel or labour costs, higher demand for logistics services, consolidation in the transportation industry or otherwise, may adversely affect the Corporation’s financial performance as the Corporation may not be able to pass such cost increases on to its customers. In addition, the failure of a third-party transportation provider or distributor could harm the Corporation’s reputation, negatively affect the Corporation’s customer relationships and have a material adverse effect on the Corporation’s financial position and financial performance.
Third-party insolvency risks: The Corporation is party to numerous business relationships, transactions and contracts with various third parties, pursuant to which such third parties have performance, payment or other obligations to the Corporation. If any of these third parties were to become subject to bankruptcy, receivership or similar proceedings, the Corporation’s rights and benefits in relation to the Corporation’s relationships, transactions and contracts with such third parties could be terminated, modified in a manner adverse to the Corporation, or otherwise impaired. The Corporation cannot make any assurance that it would be able to arrange for alternate or replacement relationships, transactions and contracts, if at all. Any inability on the Corporation’s part to do so could have a material adverse effect on the Corporation’s business and financial performance.
Introduction of products in a timely manner: The Corporation cannot provide assurance that it will be able to enhance its current products or develop new products at competitive prices or in a timely manner. The development and application of new technologies involve time, substantial costs, and risks. The inability of the Corporation, for technological or other reasons, to enhance, develop and introduce products in a timely manner, or at all, in response to changing market conditions or customer requirements could result in an adverse material change to the Corporation. As well, it could also result in products becoming obsolete. Further, the ability of the Corporation to compete successfully will depend in large measure on the ability to continue to conduct research and maintain a staff to adapt to technological changes and advances in the industry. This will also include providing for the continued compatibility of the products of the Corporation with evolving industry standards, protocols, and competitive network environments.
Tax implications: The Corporation is subject to income taxes in both Canada and numerous foreign jurisdictions. In the ordinary course of business, there are many transactions and calculations where the ultimate tax determination is uncertain. Although the Corporation believes their tax estimates are reasonable, the final determination of any tax audits and litigation may be materially different from that which is reflected in the historical income tax provisions and accruals. Further, if additional taxes are assessed as a result of an audit or proceeding, such taxes could result in an adverse material change to the Corporation. This will also have an impact on the overall financial condition of the Corporation.
Credit risk: Credit risk is the risk of financial loss to the Corporation if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the receivables of the Corporation from customers. The exposure of the Corporation to credit risk is influenced by the individual characteristics of each customer. Although the Corporation establishes an allowance for doubtful accounts that represents its estimate of potential credit losses in respect of accounts receivables and historically has not experienced any significant losses related to individual customers or groups of customers in any particular geographical area, there is no assurance that the allowance for doubtful

accounts will be sufficient to cover credit losses in the future which could result in an adverse material change to the Corporation.

 Foreign operations: The Corporation relies on international sales of its products in Asia and expects to do so to a greater extent in the future as it continues to expand its business. There are a number of risks inherent in the international activities of the Corporation, including unexpected changes in governmental policies or project locations concerning the import and export of goods, services, and technology. Further, there could be other regulatory requirements, tariffs and other trade barriers, costs, and risks of localizing products for foreign languages, longer accounts receivable payment cycles, limits on repatriation of earnings, the burdens of complying with a wide variety of foreign laws, and difficulties supervising and managing local personnel. As such, the operations of the Corporation may be adversely affected by changes in foreign government policies and legislation or social instability and other factors which are not within the control of the Corporation, including, but not limited to, changes in regulatory requirements, economic sanctions, spread of infectious diseases, pandemics, risk of terrorist activities, revolution, border disputes, implementation of tariffs and other trade barriers and protectionist practices, volatility of financial markets, labour disputes, and other risks arising out of foreign governmental sovereignty over the areas in which the operations of the Corporation are conducted. The law of foreign jurisdictions will affect foreign trade, taxation and investments which may result in an adverse material change to the Corporation. If the operations of the Corporation are disrupted or the economic integrity of its contracts are threatened for unexpected reasons, business may be harmed. In the event of a dispute arising in connection with the operations of the Corporation in a foreign jurisdiction where the Corporation does conduct or will conduct its business, the Corporation may be subject to the exclusive jurisdiction of foreign courts or may not be successful in subjecting foreign persons to the jurisdictions of the courts of Canada or enforcing Canadian judgments in such other jurisdictions. The Corporation may also be hindered or prevented from enforcing its rights with respect to a government instrument because of the doctrine of sovereign immunity. Accordingly, the activities of the Corporation in foreign jurisdictions could be substantially affected by factors beyond their control, any of which could result in an adverse material change to the Corporation. The Corporation believes that its management and the proposed management of the Corporation are sufficiently experienced to reduce these risks.

Foreign Exchange: As the Corporation continues to expands its international sales and foreign operations, the Corporation becomes more exposed to the effects of fluctuations in currency exchange rates.
Operational and financial infrastructure: The Corporation is subject to growth-related risks, capacity constraints and pressure on its internal systems and controls. As well, control and monitoring of marketing activities of the sales agents of the Corporation in other jurisdictions. The ability of the Corporation to manage growth effectively will require it to continue to implement and improve its operational and financial systems, and to successfully implement the continued expansion, training, and management of its employee base. The Corporation intends to expand its employee base. This expansion may require the Corporation to commit financial, operational, and technical resources in advance of an increase in the size of the business, with no assurance that the volume of business will increase or that such initiatives to improve and upgrade its systems and infrastructure will be successful. The inability to deal with this growth or any failure in these initiatives could result in an adverse material change to the Corporation.
Forecasts and Models: The Corporation relies upon forecasts and models because the approach to customer forecasts requires data-intensive modeling used in conjunction with certain assumptions when independently verifiable information is not available. Should underlying assumptions prove incorrect or an embedded modeling error go undetected, it could result in incorrect estimates and thereby have a material adverse impact on the business, operations, and financial condition of the Corporation.
Estimates and Judgements: The Corporation makes accounting estimates and judgments in the ordinary course of business. Such accounting estimates and judgments will affect the reported amounts of the assets and liabilities of the Corporation as of the date of its financial statements and the reported amounts of its operating results during the periods presented. Additionally, the Corporation interprets the accounting rules in existence as at the date of its financial statements when the accounting rules are not specific to a particular event or transaction. If the underlying estimates are ultimately proven to be incorrect, or if the auditor of the Corporation or regulators subsequently interpret the application of accounting rules by the Corporation differently, subsequent adjustments could have a material adverse effect on the operations of the Corporation for the period or periods in which the change is identified. Additionally, subsequent adjustments could require the Corporation to restate its historical financial statements. The occurrence of any of the foregoing could result in a material adverse impact on the

business, operations, and financial condition of the Corporation.

Internal controls: Internal controls over financial reporting are procedures designed to provide reasonable assurance that transactions are properly authorized, recorded and reported and assets are safeguarded against unauthorized or improper use. A control system, no matter how well designed and operated, can provide only reasonable, and not absolute, assurance with respect to the reliability of financial reporting and financial statement preparation. Any failure to develop or maintain effective controls or any difficulties encountered in their implementation could harm the operations of the Corporation or cause the Corporation to fail to meet its reporting obligations and may result in a restatement of its financial statements for prior periods. Ineffective disclosure controls and procedures and internal control over financial reporting could also cause investors to lose confidence in the financial statements and other information of the Corporation, which would likely have a negative effect on the trading price of the Common Shares.
Insurance risks: The Corporation expects to maintain property and casualty insurance on certain assets. However, not all risks are covered by insurance and there is no assurance that insurance will be consistently available on an economically feasible basis or at all. The Corporation may also elect not to insure against certain liabilities due to high premium costs or for other reasons. Furthermore, although the Corporation expects to maintain insurance against such claims and in such amounts it considers adequate, there is no assurance that such insurance policies will be sufficient to cover each and every claim or loss involving the Corporation. If the Corporation were to suffer an uninsured loss, its business, financial condition, and results of operations could result in an adverse material change to the Corporation.
Conflicts of Interest: Certain of the directors and officers of the Corporation are, or may become, directors and officers of other companies, and conflicts of interest may arise between their duties as directors and officers of the Corporation and as directors and officers of such other companies.

CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS

In the opinion of Counsel, the following is a summary, as at the date of this prospectus of certain of the principal Canadian federal income tax considerations under the Tax Act generally applicable to Holders. This summary is not applicable to a Holder (a) that is a “financial institution” for purposes of certain rules referred to as the mark- to-market rules in the Tax Act, (b) that is a “specified financial institution” as defined in the Tax Act, (c) an interest in which would be a “tax shelter investment” as defined in the Tax Act, (d) that has elected to report its “Canadian tax results” within the meaning of the Tax Act in a currency other than the Canadian currency, (e) that has entered into a “derivative forward agreement” or “synthetic disposition arrangement”, as such terms are defined in the Tax Act, with respect to any Shares, (f) that receives dividends on Shares under or as part of a “dividend rental arrangement” as defined in the Tax Act, (g) that is a partnership or trust, or (h) that is a corporation resident in Canada, and is, or becomes, or does not deal at arm’s length with a corporation resident in Canada that is or becomes, as part of a transaction or event or series of transactions or events that includes the acquisition of the Shares, controlled by a non-resident person or group of non-resident persons that do not deal with each other at arm’s length for purposes of the “foreign affiliate dumping” rules in section 212.3 of the Tax Act. Any such Holders should consult their own tax advisors.

In addition, this summary does not address the deductibility of interest by a Holder who has borrowed money to purchase Shares.

This summary is based upon the provisions of the Tax Act in force as of the date of this prospectus and the understanding of Counsel of the current published administrative policies of the CRA. This summary takes into account all Tax Proposals and assumes that the Tax Proposals will be enacted in the form proposed, although no assurance can be given that the Tax Proposals will be enacted in their current form or at all. This summary does not otherwise take into account any changes in law or in the administrative policies or assessing practices of the CRA, whether by legislative, governmental or judicial decision or action, nor does it take into account or consider any other provincial, territorial or foreign income tax considerations, which considerations may differ significantly from the Canadian federal income tax considerations discussed in this summary.

This summary is of a general nature only, is not exhaustive of all possible Canadian federal income tax considerations and is not intended to be, nor should it be construed to be, legal or tax advice to any particular Holder. Holders should consult their own tax advisors with respect to their particular circumstances.

Resident Holders

The following section of this summary generally applies to Resident Holders. Certain Resident Holders whose Shares

might not otherwise constitute capital property may make, in certain circumstances, an irrevocable election permitted by subsection 39(4) of the Tax Act to deem the Shares, and every other “Canadian security” as defined in the Tax Act, held by such persons in the taxation year of the election and each subsequent taxation year to be capital property. Resident Holders contemplating making the election permitted by subsection 39(4) of the Tax Act should consult their own tax advisors as such an election would affect the income tax treatment of dispositions by the Resident Holder of other Canadian securities.

Dividends on Shares

Any “taxable dividends” (as defined in the Tax Act) received or deemed to be received by a Resident Holder on the Shares will be required to be included in computing the income of a Canadian Holder pursuant to the Tax Act.

In the case of a Resident Holder who is an individual (other than certain trusts), such dividends received or deemed to be received on the Shares will be included in computing the income of the Resident Holder and will be subject to the grossup and dividend tax credit rules normally applicable in respect of “taxable dividends” received from “taxable Canadian corporations” (as defined in the Tax Act), including the enhanced dividend tax credit in respect of “eligible dividends”, if any, so designated by the Corporation to the Resident Holder in accordance with the provisions of the Tax Act. There may be limitations on the ability of the Corporation to designate dividends as “eligible dividends”.

Dividends received or deemed to be received by a corporation that is a Resident Holder on the Shares must be included in computing the income of the Resident Holder, but will generally be deductible in computing its taxable income. In certain circumstances, subsection 55(2) of the Tax Act will treat a taxable dividend received or deemed to be received by a Resident Holder that is a corporation as proceeds of disposition or a capital gain, to the extent and under the circumstances specified in the Tax Act. Resident Holders that are corporations should consult their own tax advisors having regard to their own circumstances.

A Resident Holder that is a “private corporation” or a “subject corporation” (as defined in the Tax Act) may be liable to pay an additional refundable tax under Part IV of the Tax Act on dividends received or deemed to be received on the Shares to the extent such dividends are deductible in computing the taxable income of the Resident Holder.

A Resident Holder that is, throughout the relevant taxation year, a “Canadian-controlled private corporation” (as defined in the Tax Act) or a “substantive CCPC” (as proposed to be defined in the Tax Act pursuant to the Proposed Amendments released by the Department of Finance (Canada) on August 9, 2022) at any time in the year may be liable for an additional refundable tax on its “aggregate investment income”, which is defined in the Tax Act to include dividends received or deemed to be received in respect of the Shares, but not dividends or deemed dividends that are deductible in computing the dividend recipient’s taxable income.

Disposition of Shares

Upon a disposition or deemed disposition of a Share (other than a disposition to the Corporation in a transaction that is not a sale in the open market in the manner in which shares are normally purchased by any member of the public in the open market), a capital gain (or capital loss) will generally be realized by a Resident Holder to the extent that the proceeds of disposition are greater (or less) than the aggregate of the adjusted cost base of such security to the Resident Holder immediately before the disposition and any reasonable costs of disposition. Such capital gain (or capital loss) will be subject to the treatment described below under “Capital Gains and Capital Losses”.

Capital Gains and Capital Losses

Generally, a Resident Holder is required to include, in computing its income for a taxation year, one-half of the amount of any capital gain (a “ taxable capital gain ”) realized in the year. Subject to and in accordance with the provisions of the Tax Act, a Resident Holder is required to deduct one-half of the amount of any capital loss (an “ allowable capital loss ”) realized in a taxation year from taxable capital gains realized in that year by such Resident Holder. Allowable capital losses in excess of taxable capital gains may be carried back and deducted in any of the three preceding years or carried forward and deducted in any following taxation year against taxable capital gains realized in such year to the extent and under the circumstances described in the Tax Act.

The amount of any capital loss realized on the disposition or deemed disposition of Shares by a Resident Holder that is a corporation may be reduced by the amount of dividends received or deemed to have been received by it on such shares or shares substituted for such shares to the extent and in the circumstance specified by the Tax Act. Similar rules may apply where a corporation is a member of a partnership or a beneficiary of a trust that owns Shares, directly or indirectly, through a partnership or trust. Resident Holders to whom these rules may be relevant should consult their own tax advisors.

A Resident Holder that is, throughout the relevant taxation year, a “Canadian-controlled private corporation” (as defined

in the Tax Act) or a “substantive CCPC” (as proposed to be defined in the Tax Act pursuant to the Proposed Amendments released by the Department of Finance (Canada) on August 9, 2022) at any time in the year may be liable for an additional refundable tax on its “aggregate investment income”, which is defined in the Tax Act to include taxable capital gains.

Other Income Taxes

Capital gains realized on the disposition or deemed disposition of the Shares and dividends received or deemed to be received by a Resident Holder that is an individual (other than certain specified trusts) may give rise to alternative minimum tax as calculated under the detailed rules set out in the Tax Act. Resident Holders that are individuals should consult their own advisors with respect to the application of the alternative minimum tax.

Non-Resident Holders

The following section of the summary applies to a Holder who, at all relevant times, for purposes of the Tax Act and any applicable tax treaty or convention is a Non-Resident Holder. In addition, special rules, which are not discussed in this summary, may apply to a Non-Resident Holder that carries on, or is deemed to carry on, an insurance business in Canada and elsewhere or that is an “authorized foreign bank” (as defined in the Tax Act). Such Holders should consult their own tax advisors.

Dividends on Shares

Dividends paid or credited or deemed to be paid or credited to a Non-Resident Holder on the Shares by the Corporation are subject to Canadian withholding tax at the rate of 25% on the gross amount of the dividend, subject to any reduction in the rate of withholding to which the Non-Resident Holder is entitled to under any applicable income tax convention between Canada and the country in which the Non-Resident Holder is resident. For example, under the Treaty, the rate of withholding tax on dividends paid or credited to a Non-Resident Holder that is the beneficial owner of the dividend who is resident in the United States for purposes of the Treaty and is entitled to all of the benefits under the Treaty is generally limited to 15% of the gross amount of the dividend. The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting of which Canada is a signatory, affects many of the bilateral tax treaties to which Canada is a party, including the ability to claim benefits thereunder. Non-Resident Holders should consult their own tax advisors to determine their entitlement to relief under an applicable income tax treaty or convention.

Disposition of Shares

A Non-Resident Holder generally will not be subject to tax under the Tax Act in respect of a capital gain realized on the disposition or deemed disposition of a Share, nor will capital losses arising therefrom be recognized under the Tax Act, unless the Share constitutes or is deemed to constitute “taxable Canadian property” to the Non-Resident Holder thereof for purposes of the Tax Act, and the gain is not exempt from tax pursuant to the terms of an applicable income tax treaty or convention.

Provided that Shares are listed on a “designated stock exchange” as defined in the Tax Act (which currently includes the TSXV) at the time of disposition, the Shares generally will not constitute taxable Canadian property of a Non-Resident Holder at that time, unless at any time during the 60 month period immediately preceding the disposition the following two conditions are met concurrently: (a) one or any combination of the (i) Non-Resident Holder, (ii) persons with whom the Non-Resident Holder did not deal at arm’s length, and (iii) partnerships in which the Non-Resident Holder or such nonarm’s length person holds a membership interest (either directly or indirectly through one or more partnerships), owned 25% or more of the issued shares of any class or series of shares of the Corporation, and (b) at such time, more than 50% of the fair market value of the Shares was derived directly or indirectly from one or any combination of real or immovable property situated in Canada, “Canadian resource property” (as defined in the Tax Act), “timber resource property” (as defined in the Tax Act) or an option, an interest or civil law right in such property, whether or not such property exists.

Notwithstanding the foregoing, a Share may otherwise be deemed to be taxable Canadian property to a Non-Resident Holder for purposes of the Tax Act in certain limited circumstances.

Even if a Share is “taxable Canadian property” to a Non-Resident Holder, such Non-Resident Holder may be exempt from tax under the Tax Act on the disposition of such Share by virtue of an applicable income tax treaty or convention.

The capital gain (or capital loss) of a Non-Resident Holder in respect of a Share that constitutes or is deemed to constitute taxable Canadian property (and is not exempt from tax under an applicable income tax treaty or convention) will generally be computed in the manner described above under the subheading “Certain Canadian Federal Income Tax Considerations – Resident Holders – Disposition of Shares” .

Non-Resident Holders whose Shares are taxable Canadian property should consult their own tax advisors.

STATUTORY RIGHTS OF WITHDRAWAL AND RESCISSION

Securities legislation in certain provinces and territories of Canada provides purchasers with the right to withdraw from an agreement to purchase securities. This right may be exercised within two business days after receipt or deemed receipt of a prospectus and any amendment. In several of the provinces and territories, securities legislation further provides a purchaser with remedies for rescission or, in some jurisdictions, revisions of the price or damages if the prospectus and any amendment contains a misrepresentation or is not delivered to the purchaser, provided that such remedies for rescission, revision of the price or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the province in which the purchaser is located. The purchaser should refer to any applicable provisions of the securities legislation of the province in which the purchaser is located for the particulars of these rights or consult with a legal advisor.

[CERTIFICATES FOLLOW]

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CERTIFICATE OF THE CORPORATION

Dated: November 17, 2023

This short form prospectus, together with the documents incorporated by reference constitutes full, true, and plain disclosure of all material facts relating to the securities offered by this short form prospectus as required by the securities legislation of each of the provinces of Alberta, British Columbia, Manitoba, New Brunswick, Nova Scotia, Ontario, Prince Edward Island and Saskatchewan.

(s) Kalvie Legat Kalvie Legat Interim Chief Executive Officer	(s) David Colleran
	David Colleran Chief Financial Officer

ON BEHALF OF THE DIRECTORS

(s) Stephen Smith Stephen Smith Director	(s) Jared Wolk
	Jared Wolk Director

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CERTIFICATE OF THE AGENT

Dated: November 17, 2023

To the best of our knowledge, information and belief, this short form prospectus, together with the documents incorporated by reference, constitutes full, true, and plain disclosure of all material facts relating to the securities offered by this short form prospectus as required by the securities legislation of each of the provinces of Alberta, British Columbia, Manitoba, New Brunswick, Nova Scotia, Ontario, Prince Edward Island and Saskatchewan.

INTEGRAL WEALTH SECURITIES LIMITED

Per: (s) John Gibson John Gibson Chief Executive Officer

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AI assistant

Vitalist — Capital/Financing Update 2023

47750_rns_2023-11-20_98f8b68b-df8d-4377-8294-6fbddcd0b83e.pdf

PRELIMINARY SHORT FORM PROSPECTUS

CE BRANDS INC.

Notes:

TABLE OF CONTENTS

GLOSSARY

GENERAL MATTERS

DOCUMENTS INCORPORATED BY REFERENCE

MARKETING MATERIALS

THIRD PARTY INFORMATION

FORWARD-LOOKING INFORMATION

BUSINESS OF THE CORPORATION

General Description of the Business

Intercompany Relationships

Summary of the Business

Motorola Smartwatches

Vitalist Software and Wearables Ecosystem

RECENT DEVELOPMENTS

EXPLANATORY NOTE REGARDING SHARE CONSOLIDATION

CONSOLIDATED CAPITALIZATION

USE OF PROCEEDS

Note:

Business Objectives and Milestones

Note:

PLAN OF DISTRIBUTION

set-off or deduction.

DESCRIPTION OF SECURITIES BEING DISTRIBUTED

Shares

Agent Warrants

Book Entry System

Payments and Notices

PRIOR SALES

Notes:

TRADING PRICE AND VOLUME

Common Shares

Note:

Listed Warrants

Note:

INTERESTS OF EXPERTS

ELIGIBILITY FOR INVESTMENT

Prospective purchasers who intend to hold Shares in a Registered Plan should consult their own tax advisors with respect to the application of these rules in their particular circumstances.

RISK FACTORS

Risks Relating to the Offering

Risks Relating to the Share Consolidation

Risks Relating to the Business

competitiveness of sales with local manufacturers.

CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS

Resident Holders

Dividends on Shares

Disposition of Shares

Capital Gains and Capital Losses

Other Income Taxes

Non-Resident Holders

Dividends on Shares

Disposition of Shares

Non-Resident Holders whose Shares are taxable Canadian property should consult their own tax advisors.

STATUTORY RIGHTS OF WITHDRAWAL AND RESCISSION

CERTIFICATE OF THE CORPORATION

ON BEHALF OF THE DIRECTORS

CERTIFICATE OF THE AGENT

INTEGRAL WEALTH SECURITIES LIMITED

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Vitalist Capital/Financing Update 2023