VITALIST

Vitalist Inc.

(Formerly known as CE Brands Inc.)

Management’s Discussion and Analysis

For the year ended March 31, 2025

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FORWARD-LOOKING INFORMATION 3
BASIS OF PRESENTATION 6
GOING CONCERN 7
CORPORATE OVERVIEW 8
OUTLOOK 10
CONSOLIDATED RESULTS 12
LIQUIDITY AND CAPITAL RESOURCES 18
CASH FLOWS 22
OPERATING ACTIVITIES 22
COMMITMENTS 23
OUTSTANDING SHARE DATA 23
RELATED PARTY TRANSACTIONS 24
FINANCIAL INSTRUMENTS AND OTHER INSTRUMENTS 24
FINANCIAL RISK MANAGEMENT 24
SUBSEQUENT EVENTS. 27
OTHER RISK FACTORS 29
DISCLOSURE CONTROLS AND PROCEDURES 37
CRITICAL ACCOUNTING POLICIES AND ESTIMATES 37
ADDITIONAL INFORMATION 37

The following Management's Discussion and Analysis ("MD&A") of the financial condition and results of the operations of Vitalist Inc. ("Vitalist" or the "Company", "Corporation"), a public company traded on the TSX Venture Exchange ("TSX-V") under the symbol VITA (formerly under the symbol CEBI), constitutes management's review of the factors that affected the Company's financial and operating performance for the years ended March 31, 2025 and March 31, 2024. This MD&A should be read in conjunction with the Company's audited annual consolidated financial statements for the year ended March 31, 2025 and March 31, 2024, together with the notes thereto. The Fiscal 2025 consolidated financial statements have been prepared in accordance with IFRS Accounting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). The consolidated financial statements are available on SEDAR+ at www.sedarplus.ca.

This MD&A is dated June 26, 2025. All dollar amounts in this MD&A are in Canadian dollars unless otherwise indicated.

FORWARD-LOOKING INFORMATION

This MD&A contains "forward-looking information" within the meaning of applicable Canadian securities laws. In general, forward-looking information is disclosure about future conditions, courses of action, and events, including information about prospective financial performance or financial position. The use of any of the words "anticipates", "believes", "expects", "intends", "plans", "will", "would", and similar expressions are intended to identify forward-looking information. Forward-looking statements included or incorporated by reference in this MD&A include, without limitation, with respect to:

the ability of the Company to continue as a going concern;
the impact on the Company of the voluntary assignment into bankruptcy of eBuyNow eCommerce Ltd. ("EBN"), a wholly-owned Canadian subsidiary of the Company, which was filed by EBN on June 27, 2023 pursuant to the Bankruptcy and Insolvency Act (R.S.C., 1985, c. B-3) (the "Act") (collectively, the "Bankruptcy");
the effects of global supply constraints on the Company and the likelihood that such constraints will continue to occur and impact the Company;
the plans of the Company for the Reebok (defined below) product category, the status of the Reebok product category relative to those plans, and the anticipated timing and costs to advance the Reebok product category;
the plans of the Company for the Vitalist (defined below) product category, the status of the Vitalist product category relative to those plans, and the anticipated timing and costs to advance the Vitalist product category;
the plans of the Company to terminate certain product lines and product categories;
the strategies of the Company for customer retention and growth;
anticipated demand for the products and services of the Company, and its ability to meet that demand;
the Company's intent to maintain a flexible capital structure;
the ability of the Company to generate sufficient cash to maintain its capacity and fund its growth and development;
fluctuations in the liquidity of the Company;
the ability of the Company to meet its obligations as they become due;
the plans of the Company for remedying its working capital deficiency;
the need for the Company to pursue additional sources of financing and the ability of the Company to obtain such additional sources of financing;

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capital expenditures not yet committed, but required, to maintain the capacity of the Company and fund its growth and development;
fluctuations in the capital resources of the Company;
the sources of financing that the Company has arranged, but not yet used; and
the plans of the Company to reduce general and administrative expenses.

The forward-looking information is based on certain key expectations and assumptions, including the continuance of manufacturing operations at the Company's partner factories in Asia, the timing of product launches, shipments and deliveries, forecast sales price and sales volumes of the Company's products and the ability of the Company to secure additional sources of financing in the future.

There can be no assurance that the Company will be able to secure additional financing in the future in a timely manner or at all. If the Company fails to secure additional financing, the Company may have insufficient liquidity and capital resources to operate its business resulting in material uncertainty regarding the Company's ability to meet its financial obligations as they become due and continue as a going concern.

Although the Company believes that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because the Company 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 MD&A. Such risks and uncertainties include, without limitation:

there is the potential for litigation to arise from creditors in connection with the Bankruptcy resulting in contingent liabilities and additional legal costs to the Company;
there is a risk that the loss of control or relinquishment of substantially all of the assets of the Company in connection with the Bankruptcy which could ultimately result in the Company being unable to continue operations;
certain liabilities of EBN and its subsidiaries may not be extinguished in connection with the Bankruptcy;
due to the Bankruptcy, the Company may require additional funds by way of debt or equity financings to continue to fund its operating, investing, and financing activities;
the Company may continue to experience negative impacts of global supply constraints;
the Company has limited financial resources, a working capital deficiency and a history of negative cash flow, including negative cash flow from operating activities, and may require additional funds by way of debt or equity financings to continue to fund its operating, investing, and financing activities;
the Company is at risk of not being able to settle its debt obligations or to extend, replace, or refinance its existing debt obligations on terms reasonably acceptable to the Company, or at all;
global operations risks including unexpected changes in foreign governmental laws, policies, regulations or project locations concerning the import and export of goods, services and technology, and exposure to global credit and financial factors on consumers in the Company's areas of operations;
the Company cannot guarantee that it will become cash flow positive or profitable, additionally, negative cash flow, or the failure to become profitable in any future fiscal period, could result in an adverse material change to the Company;
the Company 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;

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global manufacturing risks including the risk that products manufactured by the Company may be subject to changing tariffs applied by selling countries to countries of origin with little or no warning due to the Company's use of factories in China, Vietnam, Taiwan, or Malaysia, from time to time;
the Company's revenues may vary over time and with seasonality;
the Company may not generate sufficient revenue to sustain operations;
the Company may not be able to successfully negotiate contracts to source, develop, manufacture, pack, ship, distribute, or sell products economically, if at all;
the Company relies on major components to be manufactured on an original equipment manufacturer basis, which involves several risks, including the possibility of defective products, a shortage of components, delays in delivery schedules, and increases in component costs;
demand for international sales may not grow as expected or at all, and there is no assurance that the Company will succeed in expanding into new markets;
the ability of the Company to successfully enter new markets is subject to uncertainties;
there can be no assurance that the business and growth strategy of the Company will enable the Company to be profitable;
the Company relies on licenses from third parties, and there can be no assurance that these third-party licenses will continue to be available to the Company on commercially reasonable terms, or at all;
the Company may be required to obtain and maintain certain permits, licenses, and approvals in the jurisdictions where its products or technologies are being commercialized or sold, and there can be no assurances that the Company will be able to obtain or maintain any such necessary licenses, permits, or approvals;
the future growth and profitability of the Company may be dependent in part on the effectiveness and efficiency of its sales and marketing expenditures;
the Company may be exposed to product liability claims in the use of its products;
the market for the Company's products is characterized by rapidly changing technology, evolving industry standards, and customer requirements, which may cause the introduction of products embodying new technology and the emergence of new industry standards to render the existing technology solutions of the Company obsolete or unmarketable, and may also exert price pressures on the Company's existing solutions;
the Company may not be able to develop new market relevant products in a timely manner;
the ability of the Company to generate revenue will largely depend upon the effectiveness of its sales and marketing efforts, both domestically and internationally;
the success of the Company is largely dependent on the performance of its key directors, officers, and employees;
the commercial success of the Company 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 Company could become subject to a wide variety of cyberattacks on its networks and systems;
the Company is engaged in an industry that is highly competitive and rapidly evolving;
the new products provided by the competitors of the Company may render the existing products of the Company less competitive;
the Company 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;

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the Company 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 Company anticipates rapid growth, and the Company may not be able to continue to attract, hire, and retain the highly skilled and motivated officers and employees necessary to manage its growth effectively;
the computer infrastructure of the Company may potentially be vulnerable to physical or electronic computer break-ins, viruses, and similar disruptive problems and security breaches;
the Company may not be able to enhance its current products or develop new products at competitive prices or in a timely manner;
the Company is subject to taxes in Canada and other foreign jurisdictions, and in the ordinary course of business, there may be many transactions and calculations where the ultimate tax determination is uncertain;
a customer of the Company or counterparty to a financial instrument of the Company may fail to meet its contractual obligations to the Company;
the ability of the Company to manage growth effectively will require it to continue to implement and improve its operational and financial systems, which may not always be possible;
the forecasts and models of the Company could be inaccurate;
the accounting estimates and judgments of the Company could be incorrect;
the Company may fail to develop or maintain effective controls over financial reporting;
there is no assurance that insurance will be consistently available to the Company on economic terms, if at all; and
the risk factors included in the Company's other continuous disclosure documents available on SEDAR+ at www.sedarplus.ca.

Readers are cautioned not to place undue reliance on the forward-looking information, which is given as of the date of this MD&A, and to not use such forward-looking information other than for its intended purpose, because Vitalist cannot give any assurance that it will prove to be accurate. Vitalist undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events, or otherwise, except as required by applicable securities law.

BASIS OF PRESENTATION

In this MD&A all references to: (a) "Q4 2025" is to the three month period ended March 31, 2025; (b) "Q4 2024" is to the three month period ended March 31, 2024; (c) "Fiscal 2025" is to the fiscal year ended March 31, 2025; (d) "Fiscal 2024" is to the fiscal year ended March 31, 2024; and (e) "Fiscal 2023" is to the fiscal year ended March 31, 2023. The Fiscal 2025 consolidated financial statements and this MD&A were reviewed and approved by the Company's Board of Directors on June 26, 2025 on the recommendation of the Company's Audit Committee.

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GOING CONCERN

The consolidated financial statements have been prepared on a going concern basis which contemplates the realization of assets and the payment of liabilities in the ordinary course of business. Should the Company be unable to continue as a going concern, it may be unable to realize the carrying value of its assets and meet its liabilities as they become due.

There is material uncertainty with respect to the Company's ability to continue as a going concern. The Company has not yet achieved profitable operations and had a deficit of $66.04 million as at March 31, 2025 (March 31, 2024 - $62.45 million) and generated a loss of $3.58 million for the year ended March 31, 2025 (March 31, 2024 - $4.17 million net income which consisted of a gain of deconsolidation of $10.62 million) and used cash flow in operating activities for the year ended March 31, 2025 of $1.51 million (March 31, 2024 - $3.71 million). At March 31, 2025, the Company had a working capital deficiency of $13.42 million (March 31, 2024 – $6.19 million). In addition, the Company has future minimum payments committed under non-cancellable agreements and towards debt balances of $15.12 million due in the next six years (see Note 17 of Fiscal 2025 consolidated financial statements).

On June 27, 2023, EBN filed a voluntary assignment into bankruptcy under the Act. There is uncertainty as to the duration and impact of the bankruptcy process and whether the process will impact the Company's ability to continue to operate in the foreseeable future. The impacts of the bankruptcy filing on the Company may include, amongst others:

the potential for litigation to arise from creditors in connection with the bankruptcy process may result in contingent liabilities and additional legal costs.
the potential that certain liabilities of EBN and its wholly owned subsidiaries may not be extinguished in connection with the bankruptcy process.

As of June 26, 2025 the EBN bankruptcy process is ongoing and EBN has not been discharged from bankruptcy.

On January 29, 2024, the Company entered into a Debenture notes amendment agreement to (i) extend the maturity date of the Debenture notes from April 30, 2024 to October 1, 2025, (ii) waive any pre-existing rights associated with a contractual breach in relation to the bankruptcy of EBN, (iii) waive any pre-existing rights associated to a contractual breach in relation to any event prior to the date the definitive amending and waiver agreements, including any failure to pay interest or principal during such period, and (iv) amend the interest payment frequency to quarterly payments commencing on April 1, 2024.

During the year ended March 31, 2025, the Company failed to make its contractual interest payments on the Debenture notes. Additionally, the Company did not meet its minimum repayment requirements under the Choco Facility. The failure to make these payments is considered an event of default under these lending agreements providing the Debenture note holders and Happy CP Company Limited ("Choco") the right to demand immediate repayment of all amounts outstanding. Choco entered into a revised repayment agreement with the Company on May 20, 2025 (Refer to the "Subsequent events" section).

The Company's ability to continue operations and remain a going concern is impacted by achieving profitable operations, while securing additional funding through debt and equity financing, to fund its operating, investing, and financing activities in the foreseeable future. There can be no assurance that a financing will be completed or that it will be sufficient such that additional debt or equity financing is not required. Future financing activities may not be available on terms acceptable to the Company or at all. The inability of the Company to achieve profitable operations, successfully complete a bankruptcy process, or access debt or equity financing for its operations could have a material adverse effect on the Company's financial condition or results of operations. These conditions create a material uncertainty that may cast significant doubt on the Company's ability to continue as a going concern.

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This MD&A, and the accompanying consolidated financial statements for the year ended March 31 2025, do not give effect to any adjustments which would be necessary should the Company be unable to continue as a going concern and, therefore, be required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts different than those reflected in the consolidated financial statements. Such adjustments could be material.

CHANGE IN FUNCTIONAL CURRENCY

On October 1, 2024, the Company's wholly owned subsidiary CE Brands International Inc. (the "Subsidiary") completed a functional currency change from the Canadian Dollar ("CAD") to the United States Dollar ("USD"). Historically, the Subsidiary primarily carried debt and incurred expenditures in Canadian dollars. In recent periods, the Subsidiary incurred more lending in USD, and has experienced rising sales volumes increasing revenue and costs of goods, which are denominated in USD. The proportionate increase in USD transactions changed the primary economic environment in which the Subsidiary operates. Due to these factors, management determined that the USD would be a more appropriate functional currency effective October 1, 2024. There was no impact to the consolidated financial statements prior to October 1, 2024, as the change was accounted for prospectively. Moving forward the application of this standard will result in a gain/(loss) on translation of foreign operations being recognized through other comprehensive (loss) income in the consolidated financial statements every period. The loss on translation of foreign operations recorded for the year ended March 31, 2025 was $115,423.

CORPORATE OVERVIEW

Vitalist Inc. formerly known as CE Brands Inc. is a public company traded on the TSX Venture Exchange under the symbol VITA. The Company's registered and head office is 2100 Livingston Place, 222 3rd Avenue SW, Calgary, AB T2P 0B4.

The Company is a data-driven consumer electronics company that focuses on wearables and connected health. It works with analytical tools to identify precise gaps in the wearables space and then proceeds to build, market, and distribute promising consumer electronics goods with a strictly results-oriented approach.

The Company strives to bring the most insightful consumer product to our world class manufacturing, brand, and retail partners. This is accomplished through the following.

Data Driven Market Intelligence: Harvesting and analyzing consumer feedback at a scale to identify consumer electronics market opportunities.
Iconic Brand Partnerships: Identifying which brands are missing from a product category. We partner with the brand to create products consumers' trust.
Premium Manufacturing Partners: Partnering with only the world's most capable factories, to deliver high quality products with mass market appeal.

Share Consolidation Transaction

On January 24, 2024, the Company consolidated its outstanding common shares on the basis of one (1) post-consolidation share for every ten (10) pre-consolidation shares issued and outstanding as of the close of business on January 24, 2024 (the "Consolidation"). As a result of the Consolidation, the Company's shareholders received one (1) post-consolidation common share for every ten (10) pre-consolidation shares held by them. No fractional shares were issued as a result of the Consolidation; fractional interests were rounded to the nearest whole number of shares without any consideration payable. IAS 33 Earnings Per Share requires retrospective adjustment to the number of shares and EPS in such cases even if such a transaction occurred after the reporting period. Hence, the number of common shares, warrants, options and earnings per share presented have been restated retrospectively for all periods to reflect the Consolidation.

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Deconsolidation

Prior to EBN filing the Bankruptcy on June 27, 2023, all other subsidiaries of the Company were wholly-owned subsidiaries of EBN with the exception of CE Brands International Inc., which is a wholly-owned subsidiary of CE Brands Inc., and was incorporated on April 21, 2023. Harris & Partners Inc. (the "Trustee" or "HPI"), a licensed insolvency trustee, was appointed as EBN's trustee in bankruptcy on June 27, 2023 pursuant to section 49 of the Act, to administer the Bankruptcy, thus removing the Company's control of EBN. Effective June 27, 2023, EBN made an assignment of all its property for the general benefit of its creditors to HPI, and was subsequently deconsolidated (the "Deconsolidation") as the Company lost decision-making power over the relevant activities of EBN and its subsidiaries to the Trustee.

Pursuant to the Deconsolidation, the Company derecognized the assets and liabilities of EBN and EBN's subsidiaries as of June 27, 2023, resulting in a gain to CEBI's income of $10.62 million and that all foreign currency translation gains and losses related to the Company's subsidiaries recorded prior to the Deconsolidation were reversed and recorded to the Consolidated Statement of Income (Loss) and Comprehensive Income (Loss). The Deconsolidation was accounted for prospectively as at the date of the Bankruptcy. A summarized table of the assets and liabilities deconsolidated can be found in Note 2 of Fiscal 2025 consolidated financial statements.

The below table mentions the name of the subsidiaries which were deconsolidated as on June 27, 2023:

Subsidiary	Place of Incorporation	Ownership (%)
eBuyNow LLC	USA	100%
eBuyNow eCommerce Ltd.	United Kingdom	100%
eBuyNow eCommerce B.V.	Netherlands	100%
eBuyNow eCommerce, S. DE R.L. DE C.V.	Mexico	100%
eBN eCommerce Private Limited	India	100%
PerimeterSafe Holdings Limited	Canada	100%
eBuyNow eCommerce Limited	Canada	100%
EBN Holdings Ltd.	Canada	100%
PerimeterSafe Home Monitoring Limited	Canada	100%
Premietech Limited	Hong Kong	100%
eBuyNow eCommerce Limited	Hong Kong	100%
Cinatic (Shenzhen) Technology Co.Ltd.	China	100%
Premielink Company Limited	Vietnam	100%

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OUTLOOK

This section contains certain forward-looking statements. Please refer to the disclosure in the "Forward-Looking Information" section of this MD&A, above, for a discussion of risks and uncertainties related to such statements.

General

The Company is a data-driven consumer electronics company specializing in the wearables and connected health market. It employs a two-pronged approach: licensing, manufacturing, and distributing smartwatches under prominent brands, and integrating biometric data for general health and fitness monitoring using its in-house software, VitalOS™ and Vitalist™. Having historically sold products in 59 countries through direct and retail channels, the Company plans to leverage its core competencies in wearable product development to continue transforming how people connect with trusted brands.

Rebranding to Vitalist Inc. and Vitalist™ Products

On January 7, 2025 the Company announced that it will be rebranding itself to Vitalist, a company dedicated to empowering individuals to take control of their health through innovative technology. This rebranding reflects the Company's evolution and commitment to delivering cutting-edge connected health solutions.

In 2025, the Company will introduce VitalOS™, a proprietary operating system designed to seamlessly integrate various health and wellness devices and applications. This innovative platform will enable brands to deliver customized experiences through compatible hardware, more efficiently, providing users with comprehensive health insights via an improved user interface.

We aim to make VitalOS™ available in the fourth quarter of the calendar year 2025. The Company is currently working with leading hardware and software partners to ensure a seamless integration of VitalOS™ with a range of devices and services.

The Company announced the change of its name from CE Brands Inc. to Vitalist Inc. via a press release dated April 4, 2025. The Company legally changed its name to Vitalist Inc. effective March 28, 2025. The Company's common shares began trading on the TSX Venture Exchange under the new ticker symbol "VITA" (TSXV: VITA) on April 4, 2025. Shareholders approved the name change on June 28, 2023.

Motorola Products

On November 17, 2023, the Company signed a 12-month brand licensing agreement with Motorola Mobility LLC, allowing it to source, manufacture, and sell Moto Products globally through authorized channels. In return, the Company paid Motorola a royalty based on net sales.

Upon signing, the Company continued selling the Moto Watch 70 and launched the Moto Watch 40 smartwatch. In July 2024, the Moto Watch 120 was introduced, featuring a 10-day battery life, AMOLED display, and health monitoring tools (heart rate, SpO2, stress tracking). This device was compatible with both iPhone and Android.

Motorola products were sold via Amazon in the USA and Canada, and through retail partners including Best Buy Canada, Costco Canada, Alkosto Colombia, and Motorola Channels in Brazil.

The licensing agreement with Motorola expired on April 30, 2025, and the Company did not renew it, ceasing production and sales of Motorola-licensed products.

Reebok Brand Licensing Agreement

On May 29, 2025, Vitalist announced a landmark 5-year exclusive brand licensing agreement with Authentic Brands Group ("Licensor") for the rights to use the Reebok brand, empowering Vitalist to create, produce, and deliver Reebok branded smartwatches throughout the Americas, specifically the United States, Canada, and Latin America (excluding Mexico).

This collaboration aims to merge Reebok's established presence in fitness with Vitalist's advancements in wearable technology. The initial collection of Reebok-branded smartwatches is anticipated to launch in Fall of 2025. These products are expected to incorporate Vitalist's reimagined Vitalist application for iOS and Android for fitness tracking capabilities.

Following the initial Reebok smartwatch release, Vitalist plans to introduce a new flagship product in or before the first quarter of 2026. This device will feature the VitalOS™ platform, designed to offer comprehensive health and fitness monitoring through biometric data integration.

Under the terms of the licensing agreement, Vitalist holds the rights to use "Reebok trademarks" for the manufacture, sale, and marketing of digital watches until May 31, 2030. Vitalist is authorized to sell and distribute these products through various channels, including authorized retailers, distributors, and directly to consumers within the defined territories, with royalty payments made based on net sales.

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CONSOLIDATED RESULTS

Selected Financial Information

The following tables summarize certain financial data derived from the Fiscal 2025 and 2024 consolidated financial statements:

	March 31, 2025	March 31, 2024	March 31, 2023
	$	$	$
Total revenue	4,751,802	1,932,421	7,565,377
Gross profit	1,566,268	701,847	(4,177,852)
Net loss	(3,582,443)	4,171,904	(28,073,361)
Net cash used in operating activities	(1,507,196)	(3,714,571)	(7,282,774)
Basic and diluted (loss) income per share	(0.08)	0.20	(11.10)
As at	March 31, 2025	March 31, 2024	March 31, 2023
	$	$	$
Total assets	1,127,789	1,376,925	1,995,279
Total non-current financial liabilities	-	3,812,362	5,097,002

The Company's Fiscal 2025 consolidated financial statements reflect the balances of Vitalist and its wholly-owned subsidiary, CE Brands International Inc., while the comparative years reflect the balances of Vitalist as well as EBN and its wholly-owned subsidiaries up until Deconsolidation.

Selected financial and operational highlights include the following:

Revenue increased by $2.82 million or 146% in the year ended March 31, 2025 as compared to the prior year. This increase can be attributed to the increased B2B sales of Moto 70 and Moto 40 and launching of the new Moto 120 in Fiscal 2025 while there were no sales during the Q2 2024 and very low sales in Q3 2024 as the Company was undergoing restructuring after the deconsolidation of EBN.
Gross profit for the year ended March 31, 2025 was $1.57 million as compared to a gross profit of $0.70 million in the prior year. The increase in gross profit for fiscal 2025 was primarily driven by higher product sales, in contrast to the absence of sales in Q2 2024 and minimal sales in Q3 2024. Additionally, the Moto 120 had a higher per unit gross margin as compared to Moto 40 & Moto 70 resulting in higher gross profit.
There was a net loss of approximately $3.58 million for the year ended March 31, 2025 compared to net income of $4.17 million in the prior year. Significant decreases were realized in operating expenditures ($1.83 million) and debt carrying costs ($0.55 million), but were offset by the gain on deconsolidation of EBN and its subsidiaries of $10.62 million in the prior year.
Operating cash outflows were approximately $1.51 million for the year ended March 31, 2025, an improvement as compared to $3.71 million over the prior year. The improvement was on account of reduced overheads, increased revenue and favorable changes in working capital, specifically the conversion of accounts receivable into cash for the year ended March 31, 2025.

Fourth Quarter Information

The following tables summarize certain financial data derived from the Fiscal 2025 and 2024 consolidated financial statements for the three months ended March 31:

	March 31, 2025	March 31, 2024
	$	$
Total revenue	687,638	514,262
Cost of products and services	671,874	385,643
Gross profit	15,764	128,619
Net loss	(1,484,967)	(1,306,107)
Total comprehensive loss	(1,300,150)	(1,306,107)
	(0.08)	(0.03)

Selected financial and operational highlights from the fourth quarter include the following:

Revenue increased by $0.17 million, reflecting a 34% rise in the three month period ended March 31, 2025 as compared to the corresponding period of the prior year. The increase can be attributed to the sales channels that were already established in the last quarter of Fiscal 2025 unlike the corresponding quarter of Fiscal 2024 when the Company had negotiated a new contract with Motorola.
Gross profit was $0.02 million in the three month period ended March 31, 2025, a $0.11 million decline compared to the same period in the prior year. Gross profit reduced in the three months ended March 31, 2025 as a result of a reclassification of expenses, higher discounts given to B2B customers and the write off of the remaining Moto 120 tooling fees.
There was a net loss of $1.48 million for the three month period ended March 31, 2025, which represents a 13.69% increase in net loss from the corresponding period in Fiscal 2024. The increase in net loss was due to the factors related to gross profit noted above, as well as increased factoring finance costs and stock based compensation expense during the three months ended March 31, 2025.

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Results of Operations

The following section provides an overview of our financial performance during Fiscal 2025 as compared to Fiscal 2024.

	For the year ended March 31
	2025	2024
	$	$
Revenue	4,751,802	1,932,421
Cost of products and services	3,185,534	1,230,574
Gross profit	1,566,268	701,847
Expenses
Wages and contractors	1,940,494	2,565,147
General and administrative	317,887	228,767
Legal, accounting and other professional fees	312,364	1,135,658
Stock-based compensation (recovery)	286,176	(30,821)
Marketing	244,635	323,281
Royalties and license fees	233,395	422,088
Technology and related	194,216	175,076
Loss on foreign exchange	66,825	399,577
Selling and distribution	48,096	67,550
Vendor set up costs	-	182,977
Total expenses	3,644,088	5,469,300
Loss before other items	(2,077,820)	(4,767,453)
Interest & accretion	(1,382,600)	(1,820,705)
Other finance charges	(122,023)	(238,581)
Gain on deconsolidation	-	10,621,819
Gain on debt extinguishment	-	376,824
Total other items	(1,504,623)	8,939,357
Net (loss) income	(3,582,443)	4,171,904
Other comprehensive (loss) income
(Loss) gain on translation of foreign operations	(115,423)	294,539
Reclassification of foreign currency gains on deconsolidation	-	(276,871)
Comprehensive (loss) income	(3,697,866)	4,189,572
Net (loss) income per share- basic and diluted	(0.08)	0.20
Weighted average shares – basic and diluted	44,726,479	20,514,832

Revenues: Revenue increased by $2.82 million reflecting an increase of 146% in Fiscal 2025 compared to the previous year. This increase can be attributed to the increased B2B sales of Moto 70 and Moto 40 and launching of the new Moto 120 in Fiscal 2025 unlike Fiscal 2024 when there were nominal sales in the second and third quarters while the Company negotiated a new contract with Motorola.
Cost of products and services and Gross profit: The cost of products and services increased by $1.95 million reflecting an increase of 159% in Fiscal 2025 compared to the previous year. This increase can be attributed to the corresponding increase in revenue in Fiscal 2025 as compared to Fiscal 2024. There was a decrease in gross profit ratio from 36% in Fiscal 2024 to 33% in the current year. The change resulted from higher discounts given to certain customers, a reclassification of expenses and the write off of

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Moto 120 tooling fees.

Wages and contractors: Wages and contractor expenses decreased by $0.62 million, indicating a decrease of 24% for Fiscal 2025, compared to the previous year. The decrease can be attributed to the termination of employees and contractors on account of the bankruptcy of EBN and its subsidiaries.
General and administrative: General and administrative expenses increased by $0.09 million, reflecting an increase of 39% for Fiscal 2025, compared to the previous year. This can be attributed to increased operations of the entity during Fiscal 2025 while operations were nominal during Q2 and most part of the Q3 of Fiscal 2024.
Legal, accounting, and other professional fees: Professional fees decreased by $0.82 million representing a decrease of 72% for Fiscal 2025, compared to the previous year. The decrease is driven by a reduction in international operations related to the EBN Bankruptcy. The Company no longer manages tax compliance, benefits programs, and other services in multiple global jurisdictions, reducing the number of professional services providers. Additionally, the company engaged in fewer restructuring and financing activities.
Stock-based compensation: Stock-based compensation increased by $0.32 million, or 1,029% for Fiscal 2025, compared to the previous year. This increase can be attributed to new options granted in August 2024, as compared to the reversal of this expense in Fiscal 2024 due to the forfeiture of options by employees who left the business.
Marketing: Marketing expenses decreased by $0.08 million, representing a reduction of 24% for Fiscal 2025, compared to the previous year. This decrease can be attributed to marketing fewer products with more targeted spending in Fiscal 2025 as compared to Fiscal 2024.
Royalties and license fees: Royalties and license fees decreased by $0.19 million, representing a decrease of 45% for Fiscal 2025, compared to the previous year. This was due to the Company having no agreement in place that required a minimum guaranteed royalty payable to Motorola during Fiscal 2025 as compared to Fiscal 2024 under EBN.
Technology and related: Technology and related expenses increased by $0.02 million, indicating an increase of 11% for Fiscal 2025, compared to the previous year. This increase can be attributed to increased operations in Fiscal 2025 overall as compared to Fiscal 2024.
Loss on foreign exchange: The loss on foreign exchange recognized during Fiscal 2025 was $0.07 million as compared to $0.40 million recognized during the Fiscal 2024 resulting in a decrease of $0.33 million or 83%. The reason can be attributed to the change in functional currency of the Company's wholly owned subsidiary CE Brands International Inc. from CAD to USD on October 1, 2024. All of the transactions of the Company's subsidiary are recorded in US dollars and therefore no exchange gain or loss is being recognized on USD transactions since October 1, 2024 as compared to the previous year.
Selling and distribution: Selling and distribution expenses showed a trivial decrease by $0.02 million, reflecting a decrease of 29% for Fiscal 2025, compared to the previous year. This decrease can be attributed to a greater level of shipping expenses recovered from customers in Fiscal 2025.
Vendor set up costs: The vendor set up costs of $0.18 million were incurred during Fiscal 2024. These costs can be attributed to vendor initiation expenses incurred by the Company. No such costs were incurred in the current fiscal year as it was a one time business set-up expense.
Interest & accretion expenses: Interest and accretion costs decreased by $0.44 million or 24% for Fiscal 2025, compared to the previous year. This decrease can be attributed to the settlement of principal and interest in October 2023 via the issuance of common shares by the Company. The lower principal balance resulted in less interest expense during Fiscal 2025.
Other finance charges: Other finance charges decreased by $0.12 million or 49% for Fiscal 2025 compared to the previous year. The decrease is due to considerable interest cost being incurred on the outstanding balances of EBN's trade payables during Fiscal 2024 while no such interest costs were

Page 15 of 37

incurred during Fiscal 2025.

Gain on deconsolidation: On June 27, 2023, the net assets of EBN and its subsidiaries were deconsolidated for accounting purposes as a result of EBN entering into voluntary bankruptcy and the Company losing its control over EBN. The deconsolidation resulted in a one time gain of $10.62 million.
Gain on debt extinguishment: During Fiscal 2024, the Company amended its agreement with the holders of the Debenture notes (defined below). The amendment was considered a modification and resulted in a gain of $0.38 million.
(Loss) Gain on translation of foreign operations and reclassification of foreign currency losses on deconsolidation: There was a loss on translation of foreign operations of $0.12 million for the year ended March 31, 2025. This was the result of the change in functional currency of the Company's wholly owned subsidiary CE Brands International Inc. effective October 1, 2024. CE Brands International Inc.'s functional currency was changed from CAD to USD with effect from the said date while the functional as well as presentation currency of Vitalist remained unchanged. The "accumulated other comprehensive loss" amount as on March 31, 2025 was $115,423. In previous year, the balance of "Accumulated other comprehensive income" was reclassified to income statement because of the deconsolidation of EBN & its subsidiaries from the books of the Company

Page 16 of 37

Summary of Quarterly Results

For the period ended:	June 30, 2023	September 30, 2023	December 31, 2023	March 31, 2024	June 30, 2024	September 30, 2024	December 31, 2024	March 31, 2025
	$	$	$	$	$	$	$	$
Total revenue	1,218,798	-	199,361	514,262	1,337,859	1,486,695	1,239,610	687,638
Gross profit	538,425	-	34,803	128,619	514,253	493,816	542,435	15,764
Gross profit percentage	44%	0%	17%	25%	38%	33%	44%	2%
Net income (loss)	8,667,973	(2,046,427)	(1,143,528)	(1,306,107)	(543,820)	(810,413)	(743,246)	(1,484,967)
Basic and diluted earnings (loss) per share	3.40	(0.80)	(0.04)	(0.03)	(0.01)	(0.02)	(0.02)	(0.03)

Revenue: During the quarter ended June 30, 2023, the Company's wholly owned subsidiary EBN entered into voluntary bankruptcy and sales ceased in the quarter ended September 30, 2023. The licensing agreement was signed with Motorola on November 17, 2023, and sales restarted thereafter. The revenue has increased from the quarter ended December 31, 2023 up to the quarter ended September 30, 2024 as the Company re-establishes its sales channels. Sales decreased by $0.25 million in Q3 2025 and by $0.55 million in Q4 2025 as customers sold through inventory built up in the previous quarters and were not re-ordering.
Gross profit (%): The Company generated high gross profit in the period ended June 30, 2023 as sales of previously written off products and an improved product mix decreased the average cost of products and services as a percentage of sales. The better product mix was driven by an increased proportion of total sales coming from Motorola products, versus previous quarters, which had a greater proportion of Kodak products, and the Moto Watch 360 with comparatively lower gross margins. There were no sales in the quarter ended September 30, 2023, when the Company was renegotiating its contract with Motorola, however sales restarted in the following quarter. The gross margin showed an increasing trend starting in the quarter ended December 31, 2023 as the Company optimized sales mix and channel. The reduction in Q2 2025 as compared to Q1 2025 due to higher discounts provided to certain vendors during Q2 2025. Margins increased during Q3 2025 as no such discounts were provided during this period. Margins again decreased in Q4 2025 due to a higher allocation of overhead to cost of products and services, higher discounts given to B2B customers and the write off of Moto 120 tooling fees.
Net Loss: The net income in the quarter ended June 30, 2023, was due to reduced operating expenditures resulting from cost cutting activities and a significant gain on the deconsolidation of EBN and its subsidiaries. The net loss in the quarter ended September 30, 2023, is a result of the absence of sales. Net loss decreased in the quarter ended December 31, 2023, as sales were re-established and the Company adopted certain spending restrictions. The increase in net loss for Q2 2025 and Q3 2025 as compared to Q1 2025 is due to increased contractor expenses on account of new hires, increase in insurance expenses, increased stock based compensation expense as a result of the issuance of stock options during Q2 2025, and increased software development costs incurred during Q2 and Q3 of 2025. The increase in net loss in Q4 2025 is due to a lower sales as well as an increase in factoring finance costs and stock based compensation during the three month period ended March 31, 2025.

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Page 18 of 37

LIQUIDITY AND CAPITAL RESOURCES

The Company's liquidity and capital resource are as follows:

| Liquidity and Capital Resources | March 31, 2025
$ | March 31, 2024
$ |
| --- | --- | --- |
| Cash | 235,232 | 543,068 |
| Total current assets | 1,127,789 | 1,376,925 |
| Total current liabilities | 14,544,129 | 7,569,213 |
| Working capital deficiency | (13,416,340) | (6,192,288) |

The Company's capital management policy is to maintain a capital base that optimizes its ability to grow, maintain investor and creditor confidence and to provide a platform to create value for its shareholders. The Company intends to maintain a flexible capital structure to maximize its ability to pursue additional investment opportunities, which considers the Company's early stage of development and the requirement to sustain future development of the business.

The Company will manage its capital structure and make changes to it in light of changes to economic conditions and the risks associated with the nature of the business. In order to maintain or adjust the capital structure, the Company may from time-to-time issue shares, seek debt financing and adjust its spending to manage its current and projected capital structure.

The Company does not expect significant trends or fluctuations in liquidity as a result of seasonality. Fluctuations in liquidity and the Company's working capital requirements are primarily related to the capital needs required to purchase inventory to meet demand for sales, service debt, and pay royalty obligations (refer to "Commitments" below) in the next 12 months.

The Company currently has a working capital deficiency and whether and when the Company can generate sufficient operating cash flows to pay for its expenditures and settle its obligations as they fall due subsequent to March 31, 2025 is uncertain. Until the Company can generate sufficient operating cash flows to pay for its expenditures and settle its obligations as they fall due, including commitments due in the next 12 months, management may have to attempt to raise funds by way of debt or equity issuances. These issuances may not be possible on acceptable terms, in a timely manner or at all. These conditions indicate the existence of a material uncertainty that may cast significant doubt about the Company's ability to continue as a going concern. Refer to "Going Concern".

Debenture notes (formerly "Convertible debenture notes")

On November 12, 2021 and May 26, 2022 the Company entered into convertible debenture notes with an aggregate principal amount of $4,000,000 and $1,000,000 respectively subject to delayed draws to address the Company's working capital needs. The convertible notes bore an interest rate of 15.0% per annum on outstanding principal amounts, payable on the first and second anniversary of the issue date, unless redeemed or converted early. The convertible notes were senior secured obligations of the Company and matured on the second anniversary of the issue date. The notes are collateralized under a general securities agreement, which includes all assets of the business except certain factoring assets, such as future receivables, and certain foreign movable and intangible assets. The convertible debentures were issued in tranches as follows:

Tranche	Issue date	Maturity date	Amount drawn $	Liability value $	Equity value $
Tranche 1	Nov. 12, 2021	Nov. 30, 2023	1,000,000	964,454	35,545
Tranche 2	Dec. 14, 2021	Nov. 30, 2023	1,000,000	966,933	33,067
Tranche 3	Jan. 25, 2022	Nov. 30, 2023	1,000,000	964,150	35,851
Tranche 4	Feb. 22, 2022	Nov. 30, 2023	1,000,000	961,561	38,439
Tranche 5	May 26, 2022	May 26, 2024	1,000,000	938,664	61,336
Total			5,000,000	4,795,762	204,238

Prior to maturity, the Convertible debenture notes were convertible into common shares of the Company, at the option of the holders, at a conversion price per share of $15.00. The Convertible debenture notes were not redeemable by the Company prior to the first anniversary of the issue date. The Company issued 200,000 and 50,000 warrants as part of the financing. Each warrant is exercisable at $10.00 per common share for a period of 24 months from the issuance dates of November 12, 2021, and May 26, 2022, respectively. The fair value of each issuance of warrants were $355,760 and $21,206 respectively, determined using a Black-Scholes-Merton model. Further, $243,528 and $19,905 of transaction costs were recorded at the funding date respectively. The fair value of the warrants and the transaction costs were recorded pro-rata on a net basis to the liability and equity components of the Convertible debenture notes.

On January 13, 2023, the Company and the holders of the Convertible debenture notes amended the terms of the instruments to remove the holders' right to convert into shares, to remove the option of the holders to request that interest be payable in common shares, and to extend the maturity date of all tranches to April 30, 2024 (collectively, the "Debenture notes"). The amended terms represented a substantial modification and the convertible debenture notes were extinguished resulting in a loss of $34,266. The Debenture notes, with a principal value of $5,000,000, were initially recorded at fair value of $4,565,673 on the date of the amended agreement and were thereafter measured at amortized cost.

On October 12, 2023, the Company entered into definitive agreements to issue shares to settle its accrued interest balance on the Debenture notes. Under this agreement, interest of $1,270,685 was settled with the issuance of 6,353,425 common shares to the Debenture note holders at a price of $0.20.

On January 29, 2024, the Company amended the agreement with the Debenture notes holders. The revisions consisted of extending the maturity date from April 30, 2024 to October 1, 2025, waiving the pre-existing rights associated with a contractual breach in relation to the bankruptcy of EBN, waive any pre-existing rights associated to a contractual breach in relation to any event prior to the date the amendment, including any failure to pay interest or principal during such period and amending the interest payment frequency from monthly to quarterly basis commencing on April 1 2024 (the "Debenture Amendment"). The Debenture Amendment was not substantial as it did not change the future cash flows of the Debenture notes by more than $10\%$ , and the Company applied modification accounting, recognizing a $376,824 gain in relation to the change in carrying value on the amendment date.

Considering the short-term nature of the debt, management has determined that its fair value closely approximates its book value as at March 31, 2025.

Choco Facility

On May 24, 2022, the Company entered an agreement for the sale of US$2,475,000 ($3,174,435) of future receivables for net proceeds of up to US$2,250,000 ($2,885,850) (the "Choco Facility"). This is a financing agreement based on future receivables where the retrieval percentage represents the deferred financing cost.

The funds committed under the Choco Facility were drawn in three tranches with an initial tranche of US$1,250,000 ($1,693,162) of proceeds available to the Company on close for future receivables of US$1,375,000 on June 22, 2022. The initial tranche was to be repaid over eight months with a retrieval

percentage of 15.6%, subject to maximum payments of US$154,688 per month for the first four months and US$252,083 per month for the remaining four months.

On August 26, 2022, the second tranche of US$500,000 ($677,265) was funded. The second tranche provided proceeds of US$500,000 for future receivables of US$550,000. This tranche was to be repaid over eight months with a retrieval percentage of 6.3% and maximum payments of US$61,875 per month for the first four months and US$100,833 per month for the remaining four months.

On October 31, 2022, the third tranche of US$500,000 ($677,265) was funded. The third tranche provided proceeds of US$500,000 for future receivables of US$550,000. The third tranche was to be repaid over eight months with a retrieval percentage of 6.3% and maximum payments of US$61,875 per month for the first four months and US$100,833 per month for the remaining four months.

On November 15, 2023, the Company signed an amendment agreement with Choco (the "Choco Amendment"), which was subject to the closing of the prospectus financing. The Choco Amendment affirmed Choco's waiver of past non-compliance with minimum repayment requirements and revised the repayment schedule of the Choco Facility. As at March 31, 2025 the Company was not in compliance with the minimum repayment requirements under the Choco Facility. Subsequent to year end the Company signed a second amendment agreement with Choco cancelling the Choco Amendment (Note 18 of fiscal 2025 financial statements) as no prospectus financing was closed.

During the current fiscal year, the Company repaid US$74,000 ($102,962) ($nil in the prior fiscal year) leaving US$1,218,400 ($1,753,703) outstanding as on March 31, 2025 (March 31, 2024 US$1,292,400 or CAD$1,749,521).

Considering the short-term nature of the debt, management has determined that its fair value closely approximates its book value as at March 31, 2025.

Revolving Credit Facility

On December 13, 2022, the Company entered into a revolving credit facility agreement of $12,000,000 to be advanced in stages based on eligible customer purchase orders (the "Revolving Credit Facility"). The contract has an interest rate of 1.0% of all outstanding amounts per month. The closing fee was $10,000 and servicing fees are $1,000 per month. The Revolving Credit Facility has an initial term of two (2) years and is advanceable in either USD or CAD.

On October 12, 2023, CEBI entered into definitive agreements with the Revolving Credit Facility holders to settle $3,580,793 of principal and $288,178 of accrued interest with the issuance of 19,344,855 common shares at a price of $0.20.

On December 13, 2024, the initial term of the Revolving Credit Facility expired. Management and the lenders are in discussions regarding an extension of the instrument, and no final agreement had been reached at the time of this filing.

The outstanding principal balance of the Revolving Credit Facility at March 31, 2025 was $4,138,792 (CAD$2,513,286 and US$1,129,333).

Considering the short term nature of this debt, management has determined that the fair value of the debt approximates its book value on March 31, 2025.

Loan Facility

On June 20, 2022, the Company entered a binding term sheet for a loan agreement (the "Loan Facility") to fund working capital and for other general corporate purposes, including the purchase of inventory, shipping costs and duty expenses. The term sheet represents a fully executed agreement and reflects all material terms

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and conditions with respect to the lending transaction and is binding between both parties. The Loan Facility was for up to a maximum of US$2,000,000 ($2,598,800) at an effective annual interest rate of 18.0% payable monthly based on the total drawn amount of the Loan Facility. There was no standby fee or interest due on undrawn amounts. The Loan Facility was drawn in three tranches as noted below.

Tranche	Issue Date	Amount $USD
Tranche 1	July 15, 2022	500,000
Tranche 2	August 15, 2022	500,000
Tranche 3	October 4, 2022	1,000,000
Total		2,000,000

The principal and accrued interest of the Loan Facility was payable on the date which was 12 months following the date of the funding and was callable at any time by the lender with 30 days written notice at the lender's full discretion. The Loan Facility was a senior secured obligation of the Company, with security ranking pari-passu with the holders of the Debenture notes (formerly the "Convertible debenture notes").

Availability of the Loan Facility is subject to there being no material changes within the business or operations of the borrower during the funding period. The Company must inform the lender within five (5) business days in writing of any material changes in the Company and this may result in the termination of the Loan Facility and the Company's ability to access any undrawn amounts. Termination of the Loan Facility would force full repayment within 30 days of any drawn amounts plus accrued interest.

On January 13, 2023, the Company amended the terms of the US$2,000,000 Loan Facility. As a result of the amendment, the Loan Facility is payable on demand after 60 days prior written notice with no maturity date, interest is payable semi-annually in arrears, and the security of the Loan Facility will rank pari-passu with the Debenture notes.

As consideration for the amendment of the terms, the holders received 200,000 common share purchase warrants with each warrant having an exercise price of $1.00 per common share and an expiry date of two years after the issuance date of the warrants.

On October 12, 2023, the Company entered into definitive agreements to issue common shares to settle its accrued interest and principal balances on the Loan Facility. Under this agreement, interest and principal of US$424,394 ($577,642) and US$2,000,000 ($2,722,200), respectively were settled with the issuance of 16,499,210 common shares to Vesta at a price of $0.20. As at March 31, 2025 and 2024 there was no outstanding balance on the Loan Facility.

Founders' notes

The Founder's notes were originally received in three tranches during the fiscal years 2021 and 2022, the details of which can be found in the table below:

Issue date	Tranche	Principal $	Interest
August 31, 2020	Tranche 1	187,500	4.5% per annum
October 26, 2020	Tranche 1	663,284	4.5% per annum
November 23, 2020	Tranche 1	24,000	4.5% per annum
December 30, 2020	Tranche 2	300,000	4.5% per annum
March 9, 2020	Tranche 3	425,486	4.5% per annum
Total		1,600,270

The tranche 1 Founders' notes, with a principal value of $874,784 have matured. Out of the total amount, $480,935 was extended for a further two (2) years, while the remaining amount of $393,849 was neither

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extended nor repaid. The extended tranche 1 notes were measured at fair value at the date of renewal resulting in a credit to equity of $216,195.

The tranche 2 Founders' notes, with a principal value of $300,000, have matured. Out of the total amount, $132,868 was extended for a further two (2) years, while the remaining amount of $167,131 was neither extended nor repaid. The extended tranche 2 notes were measured at fair value at the date of renewal resulting in a credit to equity of $60,924.

The tranche Founders' notes, with a principal value of $425,486, have matured. Out of the total amount, $201,597 was extended for a further two (2) years, while the remaining amount of $223,907 was extended but not repaid. The extended tranche 2 notes were measured at fair value at the date of renewal resulting in a credit to equity of $101,018.

The Founders' notes bore interest at a rate of 4.5%. Tranche 1 and Tranche 2 were convertible at a fixed conversion price of $7.50. The Founders' notes were issued by EBN and on June 27, 2023, were no longer a liability of CEBI as a result of bankruptcy and deconsolidated (see Note 2 of Fiscal 2025 consolidated financial statements).

CASH FLOWS

	March 31, 2025	March 31, 2024
	$	$
Cash flow from (used) in:
Operating activities	(1,507,196)	(3,714,571)
Investing activities	-	(164,275)
Financing activities	1,205,389	3,844,836
Effect of change in foreign exchange rates on cash	(6,029)	1,071
Net increase (decrease) in cash and cash equivalents	(307,836)	(32,939)
Cash and cash equivalents, beginning of year	543,068	576,007
Cash and cash equivalents, end of year	235,232	543,068

Operating Activities

During Fiscal 2025, the cash used in operating activities was approximately $1.51 million, compared to approximately $3.71 million during the previous year. The change was primarily due to increased revenue, reduced spending and favourable changes in working capital, specifically the conversion of inventory and accounts receivable into cash.

Investing Activities

There was no cash used in investing activities in Fiscal 2025. During Fiscal 2024, the cash used in investing activities was approximately $0.16 million which relates to cash balance of EBN deconsolidated due to bankruptcy.

Financing Activities

During Fiscal 2025, cash inflow from financing activities was approximately $1.21 million, compared to approximately $3.84 million for the previous year. The Company was able to repay $1.47 million towards factoring proceeds and the Choco facility during the year ended March 31, 2025 against draws of $2.68 millions towards the Company's revolver facility.

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COMMITMENTS

As at March 31, 2025, future minimum payments committed under non-cancellable agreements and towards debt balances are as follows:

	Less than 1 year $	1-3 Years $	Total $
Committed purchase orders	1,003,978	-	1,003,978
Lease rentals	5,120	-	5,120
Debenture notes (1)	6,102,966	-	6,102,966
Choco facility	1,753,703	-	1,753,703
Accrued interest on factoring	15,928	-	15,928
Revolving credit facility (2)	4,548,733	-	4,548,733
License fees (3)	50,000	1,267,500	1,317,500
Total	13,480,428	1,267,500	14,747,928

(1) Balance includes interest of $1,102,966 on the Debenture notes held in accounts payable and accrued liabilities.
(2) Balance includes interest of $409,941 on the Revolving credit facility held in accounts payable and accrued liabilities.
(3) The non-cancellable amount of license fees as on March 31, 2025 is $1,317,500. In case the Company continues following the license agreement beyond December 2027, it would have to pay total minimum license fees of $3,732,000. In case it keeps on following the license agreement beyond December 2029, then the Company would need to pay the full amount of license fees worth $6,107,500.

OUTSTANDING SHARE DATA

The following equity or voting securities, and securities are convertible into, or exercisable or exchangeable for, voting or equity securities, of CEBI are outstanding as follows:

	As at March 31, 2025	As at June 26, 2025
Common shares	44,726,479	51,081,679
Warrants	-	6,460,720 warrants to purchase one Common Share each
Options	4,443,675 options to purchase one Common Share each	4,443,675 options to purchase one Common Share each

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OFF BALANCE SHEET ARRANGEMENTS

As of this reporting period, the Company has not entered any off-balance sheet arrangements.

RELATED PARTY TRANSACTIONS

At March 31, 2025, accounts payable and accrued liabilities included $597,805 of amounts owed to directors and officers of the Company (March 31, 2024 – $313,651). The amounts due to related parties are unsecured, do not bear interest and have no stated terms of repayment.

In addition, the Debenture notes and Revolving credit facility (Note 10 of the Fiscal 2025 Financial Statements) constitute related party transactions as they involve the Company borrowing money from an entity, over which Vesta Wealth Partners Ltd., a "related party" of the Company, exercises certain discretionary control.

Key management personnel include directors, CEO, CFO, CPO, CMO and general manager ("Key Personnel") of the Company. In addition to their salaries, directors and officers participate in the Company's share option program. Key management personnel compensation is comprised of the following:

	Year Ended
	March 31, 2025	March 31, 2024
	$	$
Wages and contractors	1,091,754	877,794
Stock-based compensation	208,576	(6,773)
Total	1,300,330	871,021

The previous year figures in the above table has been restated as there were certain key managerial personnel whose wages and/or fees should have been considered as a part of the officer's compensation, but they were not.

FINANCIAL INSTRUMENTS AND OTHER INSTRUMENTS

The Company classifies its financial assets and liabilities depending on the purpose for which the financial instruments were acquired, their characteristics, and management's intent as outlined below:

The following table indicates the method of measurement of various financial assets and liabilities of the Company:

Financial instrument name	Subsequent measurement
Cash and cash equivalents	Amortized Cost
Trade accounts receivable	Amortized Cost
Accounts payable and accrued liabilities	Amortized Cost
Debt	Amortized cost

FINANCIAL RISK MANAGEMENT

The Company's operations expose it to credit risk, liquidity risk and market risk which are all financial risks that arise as a result of its operating and financing activities. The Company employs risk management strategies and policies to ensure that any exposure to risk is in compliance with the Company's business objectives and risk tolerance levels. While the Company's Board of Directors has the overall responsibility for the establishment and oversight of the Company's risk management framework, management has the responsibility to administer and monitor these risks.

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Credit Risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The maximum exposure to credit risk is as follows:

	March 31, 2025	March 31, 2024
	$	$
Cash	215,838	543,068
Guaranteed investment certificates	19,394	-
Trade accounts receivable	597,880	506,452
Total	833,112	1,049,520

The Company manages the credit exposure related to cash and cash equivalents by selecting financial institutions with high credit ratings. Given these credit ratings, management does not expect any counterparty to fail to meet its obligations. The Company entered into an accounts receivable factoring arrangement with a financial services firm (the "Factor"). Under this agreement, the Company transfers eligible trade receivables to the Factor, with recourse, in exchange for cash. These trade receivables have not been derecognized from the consolidated statement of financial position as the Company retains late payment and credit risk. The Company therefore continues to recognize the transferred receivables in their entirety on the consolidated statement of financial position. Trade accounts receivable worth $589,191 (98.5%) are factored under the Revolving credit facility with Vesta, as at March 31, 2025.

The aging of the Company's receivables is as follows:

	March 31, 2025	March 31, 2024
	$	$
Not past due	403,713	500,302
1-30 days past due	194,167	-
31-60 days past due	-	6,150
Total trade receivables	597,880	506,452
GST receivable	9,869	48,391
Total trade and other accounts receivables	607,749	554,843

There is credit risk with respect to trade accounts receivable as the Company has a small number of customers that are internationally dispersed. The Company has policies in place to monitor this credit risk and based on the history of collections with these customers, the Company does not consider this risk to be significant. As at March 31, 2025, two customers accounted for approximately 66% of the Company's trade accounts receivable (March 31, 2024 - two customers accounted for 99%).

The Company considers accounts greater than 60 days old to be overdue. The Company has not recognized any expected credit loss as at March 31, 2025 and March 31, 2024.

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Liquidity risk

Liquidity risk includes the risk that, as a result of the Company's operational liquidity requirements: (a) the Company will not have sufficient funds to settle a transaction on the due date; (b) the Company will be forced to sell financial assets at a value which is less than the fair value; or, (c) the Company may be unable to settle or recover a financial asset at all. As discussed in the Basis of presentation – Going concern note above, certain debt obligations of the Company have been classified as current on the statement of financial position. The Company will require additional funding to reduce its exposure to liquidity risk (Note 2 of the Fiscal 2025 Financial Statements).

The Company continuously monitors its actual and forecast cash flows to review whether there are adequate reserves to meet the maturing profiles of its liabilities. The Company closely monitors its cash and manages liquidity risk by reducing spending, and raising funds as required via equity or debt financing.

The following table outlines the maturities of the Company's liabilities:

	Less than 1 year $	1-3 years $	Total $
Accounts payable and accrued liabilities	2,281,959	-	2,281,959
Interest payable on outstanding debt (1)	1,528,835	-	1,528,835
Long-term debt (2)	10,892,495	-	10,892,495
As at March 31, 2025	14,703,289	-	14,703,289

(1) This amount is included in "Accounts payable and accrued liabilities" in the consolidated statement of financial position.
(2) Balances represent the undiscounted contractual amounts payable.

Market risk

Market risk is the risk that changes in market prices, such as interest rates and foreign currency exchange rates, will affect the fair value of financial instruments. The objective of the Company is to manage and mitigate market risk exposures within acceptable limits, while maximizing returns.

Interest rate risk: Interest rate risk is the risk that future cash flows will fluctuate as a result of changes in market interest rates. The company is not exposed to any kind of interest rate risk since all the debt instruments of the company carry fixed interest rates.

Foreign exchange risk: The Company's financial performance is closely linked to foreign exchange rates. The Company has significant debt balances, accounts receivables and accounts payables in foreign currencies (mainly in USD) exposing the Company to foreign exchange risk. While the Company may employ the use of various financial instruments in the future to manage these price exposures, the Company is not currently using any such instruments.

A 1% change in the exchange rate would have a $18,575 impact on the net (loss) income in terms of gain or loss on foreign exchange and accumulated deficit of the Company for the year ended March 31, 2025 (March 31, 2024 – $58,797).

Capital Management

The Company's capital management policy is to maintain a capital base that optimizes the Company's ability to grow, maintain investor and creditor confidence and to provide a platform to create value for its shareholders. The Company intends to maintain a flexible capital structure to maximize its ability to pursue additional investment opportunities, which considers the Company's early stage of development and the requirement to sustain future development of the business. The Company will manage its capital structure and make changes to it in light of changes to economic conditions and the risk characteristics of the nature of the business. The Company considers its capital structure to include shareholders' deficit and working capital deficit. In order to maintain or adjust the capital structure, the Company may from time to time issue shares and adjust its capital

spending to manage its current and projected capital structure. The Company is not subject to externally restricted capital requirements. There were no changes to the Company's approach to capital management during the year

SUBSEQUENT EVENTS

Expiry of Motorola licensing agreement

The Company's brand licensing agreement with Motorola expired on April 30, 2025. The Company did not renew the agreement and will not produce or sell Motorola branded products moving forward.

Private placement of equity/royalty units

On May 23, 2025 the Company completed a financing (the "Closing") of 6,355,200 units at a price of $0.40 per unit for gross proceeds of $2,542,080 by way of a non-brokered private placement (the "Offering"). Each unit consists of one common share of the Company, one common share purchase warrant of the Company, and one fractional royalty interest of the Company. Each warrant will entitle the holder to purchase one additional common share of the Company for a period of 24 months at a strike price of $0.50. Each royalty interest will entitle the holder, for a period of 24 months following the Closing, to its proportionate share of up to 5% of the aggregate gross receipts (excluding taxes and other governmental charges) from the global sale by the Company of smartwatches on the VitalOS ecosystem, less sales expenses and documented and substantiated ordinary course refunds and credits solely with respect to the return of smartwatches.

In connection with the Offering, the Company paid certain eligible finders aggregate cash commissions of $42,208 and issued an aggregate of 105,520 finders warrants (i.e. share purchase warrants as indicated above).

The shares, warrants, and warrant shares are subject to a hold period of four months plus one day from the date of issuance, in accordance with applicable securities regulations.

Reebok Brand Licensing Agreement

On May 29, 2025, Vitalist announced a landmark 5-year exclusive brand licensing agreement with Authentic Brands Group for the rights to use the Reebok brand, empowering Vitalist to create, produce, and deliver Reebok branded smartwatches throughout the Americas, specifically the United States, Canada, and Latin America (excluding Mexico). The new collection is anticipated to feature Vitalist's upcoming VitalOS platform and advanced fitness tracking capabilities.

Revised Choco Amendment

Effective May 20, 2025, Choco and the Company entered a revised agreement for the repayment of the Choco Facility (the "Revised Choco Amendment"). The Revised Choco Amendment affirmed Choco's waiver of past non-compliance with minimum repayment requirements, terminated the Choco Amendment, and revised the repayment schedule of the Choco Facility. The closing of the Revised Choco Amendment was subject to the Company closing a private placement and securing the Reebok brand licensing agreement, both of which were completed on May 29, 2025.

Revolving Credit Facility Financing

Subsequent to March 31, 2025, and up until the filing of these consolidated annual financial statements, the Company received US$1,033,086 in factored funds against its account receivable and repaid US$716,510 (US$663,823 factoring settlements and US$52,687 general working capital) under the Revolving credit facility.

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Debenture Note Amendment Letter of Intent

On June 25 and 26, 2025, the Company signed letters of intent with the holders of the Debenture notes to crystallize all of the outstanding accrued interest as at June 30, 2025 into the principal balance of the Debenture notes (the "Crystallized Face Value"), extend the maturity date until June 30, 2027, adjust the interest rate to zero, and add a premium, where the premium will add 20% to any unpaid principal balance outstanding at June 30, 2026. The Crystallized Face Value at June 30, 2025 is anticipated to be $6,290,466.

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OTHER RISK FACTORS

Planned operations will expose the Company to a variety of financial risks that arise as a result of its operating and financing activities:

Requirement for Additional Financing: Upon completion of the Offering and the bankruptcy process, the Company 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 Company will be able to achieve profitable operations, that debt or equity financing will be available or sufficient to meet the requirements of the Company or, if debt or equity financing is available, that it will be available on terms acceptable to the Company or at all. The inability of the Company 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 Company. These conditions create a material uncertainty which may cast significant doubt on the ability of the Company to continue as a going concern.
Additional financing needs: The Company will require additional funds to continue operations. The Company has limited financial resources, and there is no assurance that additional funding will be available to the Company to carry out the completion of all proposed activities. Although the Company has been successful in the past in obtaining financing through the sale of equity and debt securities, there can be no assurance that the Company 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 Company having to file for bankruptcy, or undertaking remedial measures such as a restructuring or insolvency proceedings. These conditions indicate the existence of a material uncertainty that may cast significant doubt about the ability of the Company to continue as a going concern. Failure by the Company to raise additional financing could have a materially adverse effect on the business, operations, financial condition and prospects of the Company. Refer to "Going Concern".
Indebtedness: The Company is at risk of not being able to settle its debt obligations and the Company may not be able to extend, replace or refinance its existing debt obligations on terms reasonably acceptable to the Company, or at all. If liquidity is needed, the Company 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 Company to take certain actions and the Company may be required to cease operations, close down, sell or otherwise dispose of all or part of the business including the subsidiaries of the Company, any of which would have a material adverse impact on the business and financial condition of the Company.
Economic conditions: The Company 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 Company.
History of operating losses: The Company has an accumulated deficit through March 31, 2025. The deficit may increase in the near term as the Company continues its product development and establishes sales channels for its new products and business expansion.
History of negative cash flow: The Company has a history of negative cash flow, including negative cash flow from operating activities. The Company 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 Company.
Product defects: The Company relies on third party manufacturing and from time to time there may be product defects caused by the manufacturing process, assembly, or engineering. Product defects can cause customer dissatisfaction and lead to the risk of decreased sales.
Tariffs: The Company 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 Company 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 Company may experience seasonal fluctuations for a variety of reasons, many of which are outside the control of the Company. The earnings volatility associated with seasonality may affect the ability of the Company to access capital and could have a material adverse impact on the liquidity of the Company.
Supply chain: The Company relies on major components to be manufactured on an original equipment manufacturer ("OEM") basis. Reliance on OEMs, 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 Company has single-sourced manufacturer relationships, if these sources are unable or unwilling to manufacture its products in a timely and reliable manner, the Company could experience temporary distribution interruptions, delays, or inefficiencies, adversely affecting its results of operations. Even where alternative OEMs 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 Company. Further, increased U.S. and China tensions over Taiwan could materially impact the ability of the Company to manufacture products in China or Taiwan or rely on OEMs located in China or Taiwan for supply chain components. For the Company, this has resulted in lower volumes of inventory being available for sale and associated delays in new product launches. Recently, the Company has also experienced increases in production, labor, and shipping costs. The continuation or worsening of such conditions could adversely impact the revenues, the ability to provide products and services, and the operating results of the Company.
International sales: There can be no assurances that the Company 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 Company will succeed in expanding into new markets.
New market risk: The ability of the Company 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 Company will enable the Company to be profitable. The future operating results of the Company 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 Company 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 Company.
Third party licenses: The Company relies on licenses from third parties. There can be no assurance that these third-party licenses will continue to be available to the Company 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 have a materially adverse effect on the business, operations, and financial condition of the Company.
Sales and marketing expenditures: The future growth and profitability of the Company will be dependent in part on the effectiveness and efficiency of the sales and marketing expenditures of the Company. There can be no assurance that the Company will experience benefits from sales and marketing expenditure in the future. In addition, no assurance can be given that the planned sales and marketing expenditures of the Company will result in increased sales, will generate sufficient levels of product and service awareness or that the Company will be able to manage such sales and marketing

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expenditures on a cost-effective basis.

Product liability: The Company may be exposed to product liability claims in the use of its products. Although it takes precautions, there can be no assurance that the Company will avoid significant product liability exposure.
Product development: The market for the products of the Company 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 technological solutions of the Company obsolete or unmarketable and can exert price pressures on existing solutions. It is critical to the success of the Company 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 Company 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 Company will need to continue developing new and upgraded functionality of its products and services. The Company 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 Company 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 Company may lose clients or fail to secure new clients. There can be no assurances that the Company will continue to develop products and services incorporating advanced technologies and there can be no assurances that the products and services that the Company develops will experience market success considering changing consumer expectations and future market demand. The development and application of new technologies involves time, substantial costs, and risks. There can be no certainty that the Company 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 Company.
Scaling the sales and marketing team: The ability of the Company to achieve significant growth in future revenue will largely depend upon the effectiveness of its sales and marketing efforts, both domestically and internationally. The Company 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 Company 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 Company. There can be no assurance that the Company 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 Company.
IP rights: The commercial success of the Company 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 Company will be able to seek patents for concepts, components, protocols, and other inventions that the Company considers having commercial value and there can be no assurances that such patents will give the Company a technological advantage. The Company may not be able to devote significant resources necessary to protect its proprietary technology and the Company may not be able to develop technology that is patentable, patents may not be issued, and the patented claims

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allowed may not be sufficient to provide the Company with exclusive protection for its technology. Furthermore, any patents or licenses to patents issued to the Company could be challenged, invalidated, or circumvented and may not provide proprietary protection or a competitive advantage to the Company. 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 Company to entirely mitigate these risks. The security measures the Company 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 Company 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 Company 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 Company and damage its reputation. Security breaches impacting the products of the Company 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 Company 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 Company, its customers' networks, or other networks, whether or not any such breach is due to a vulnerability in the products of the Company, 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 Company 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 Company 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 Company is engaged in an industry that is highly competitive and rapidly evolving. In order to retain and attract new customers and brand partnerships, the Company will need to continue to execute its orders at competitive prices. The competitors of the Company will range from small venture backed enterprises with limited resources to multinational technology companies with large customer bases. The multi-national technology companies will have more established name recognition and substantially greater financial, marketing, technological and personnel resources than the Company will have. These larger and better capitalized competitors may have access to capital in greater amounts and at lower costs than the Company 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 Company may be able to acquire skilled professionals, fund internal growth, and offer products and services at lower prices than the Company. As a result, the competitors of the Company may deliver new products and solutions earlier, or provide more attractively priced, enhanced, or better-quality products than the

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Company. To remain competitive, the Company will require a continued high level of investment in research and development, marketing, sales, and client support. If the Company cannot compete against existing and future competitors, its business, results of operations and financial condition could be materially and adversely affected. The Company cannot assure us 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 Company.

Inability to respond to customer demands: The new products provided by the competitors of the Company may render the existing products of the Company less competitive. The success of the Company will depend, in part, on the ability of the Company 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 Company 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 Company 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 Company.
Reliance on contract manufacturers: The Company 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 Company supplies a higher volume of products to the larger competitors of the Company. The Company cannot provide assurances that its contract manufacturers will continue to work with the Company, that they will continue to be able to operate profitably, that they will be able to meet the manufacturing needs of the Company 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 Company and the amount and timing of resources to be devoted by them to the Company is not within the control of the Company, and the Company cannot provide assurances that it will not encounter manufacturing problems that would materially harm its business. Furthermore, the arrangements of the Company with contract manufacturers are subject to re-negotiation.
Litigation risk: The Company may become party to one or more 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 Company will require the Company to accept certain risks, including risks that expose the Company 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 Company prevails in any proceedings, the Company could still incur significant legal expenses defending against the claims, even those without merit. Meritless claims can cause damage to the reputation of the Company or raise concerns among its customers and existing partnerships. As a result, the Company may feel compelled to settle claims, including those without merit, at a significant cost. The initiation of any proceedings against the Company could result in an adverse material change to the Company.
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 Company; therefore, management does not have significant experience in successfully completing acquisitions. The Company may not have sufficient management, financial and other resources to integrate businesses that the Company acquires or to successfully operate new businesses. Therefore, the Company may be unable to profitably operate an expanded business. Additionally, any new business that the Company may acquire, once integrated with the existing operations of the Company, may not produce expected or intended results.
Management of rapid growth: The business plan of the Company anticipates rapid growth, and the Company will need to continue to attract, hire and retain highly skilled and motivated officers and

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employees. It is possible that the Company may not be able to attract or retain the officers and employees necessary to manage its growth effectively. Further, the growth of the Company depends in part on the success of the strategic relationships of the Company with third parties, including relationships with suppliers, developers, designers, referral sources, resellers, payment processors, programmers, and other partners. The Company intends to pursue additional relationships with other third parties such as shipping partners and technology providers. If there are any disagreements that cause the Company to lose access to products or services from a particular supplier or lead the Company 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 Company 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 Company, and disrupt its operations. A party may be able to circumvent the security measures of the Company and could misappropriate proprietary information or customer information. A security breach or hack can jeopardize the confidential nature of information the Company transmits over the internet, and it can cause interruptions in the operations of the Company. To the extent that the activities of the Company involve the storage and transmission of proprietary information and personal financial information, security breaches or other hackings could expose the Company to a risk of financial loss, litigation, and other liabilities. The current insurance policies of the Company may not protect the Company against such losses and liabilities. Any of these events, particularly if they result in a loss of confidence in the products of the Company, could result in an adverse material change to the Company. The Company 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 Company may be harmed and exposed to liability and loss of business.
Introduction of products in a timely manner: The Company 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 involves time, substantial costs, and risks. The inability of the Company, 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 Company. As well, it could also result in products becoming obsolete. Further, the ability of the Company 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 Company with evolving industry standards, protocols, and competitive network environments.
Tax implications: The Company 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 Company 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 Company. This will also have an impact on the overall financial condition of the Company.
Credit risk: Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the receivables of the Company from customers. The exposure of the Company to credit risk is influenced by the individual characteristics of each customer. Although the Company establishes an allowance for expected credit losses 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 expected credit losses will be sufficient to cover credit losses in the future which could result in an adverse material change to the Company.
Foreign operations: The Company relies on international sales of its products in Asia and expects to do

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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 Company, 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 Company 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 Company, 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, labor disputes, and other risks arising out of foreign governmental sovereignty over the areas in which the operations of the Company are conducted. The law of foreign jurisdictions will affect foreign trade, taxation and investments which may result in an adverse material change to the Company. If the operations of the Company are disrupted or the economic integrity of its contracts is threatened for unexpected reasons, business may be harmed. In the event of a dispute arising in connection with the operations of the Company in a foreign jurisdiction where the Company does conduct or will conduct its business, the Company 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 Company 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 Company in foreign jurisdictions could be substantially affected by factors beyond their control, any of which could result in an adverse material change for the Company. The Company believes that its management and the proposed management of the Company are sufficiently experienced to reduce these risks.

Operational and financial infrastructure: The Company is subject to growth-related risks, capacity constraints and pressure on its internal systems and controls. Also, control and monitoring of marketing activities of the sales agents of the Company in other jurisdictions. The ability of the Company 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 Company intends to expand its employee base. This expansion may require the Company 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 Company.
Forecasts and Models: The Company 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 Company.
Estimates and Judgements: The Company 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 Company as of the date of its financial statements and the reported amounts of its operating results during the periods presented. Additionally, the Company 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 Company or regulators subsequently interpret the application of accounting rules by the Company differently, subsequent adjustments could have a material adverse effect on the operations of the Company for the period or periods in which the change is identified. Additionally, subsequent adjustments could require the Company 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 Company.

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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 Company or cause the Company 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 Company, which would likely have a negative effect on the trading price of the Common Shares.
Insurance risks: The Company 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 Company may also elect not to insure against certain liabilities due to high premium costs or for other reasons. Furthermore, although the Company 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 Company. If the Company were to suffer an uninsured loss, its business, financial condition, and results of operations could result in an adverse material change to the Company.
Negative operating cash flow: The Company had negative operating cash flow in its most recent financial year. The Company's ability to generate positive operating cash flow will depend on the Company's ability to deliver new products to market. To the extent the Company has negative cash flows in future periods, the Company 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 Company as those previously obtained, or at all.
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.
Global data privacy laws: The Company's ability to identify market trends depends on internal market research technology which could become subject to global data privacy laws. While the Company takes steps to ensure strict compliance with these legal requirements, changes to the applicability of such laws may impact the Company's ability to effectively conduct an integral aspect of its operations.
Changes to availability of transportation: The Company depends on distribution agreements with third-party partners, both domestically and internationally, to transport raw materials and consumer ready products. Any increase in the cost of the transportation of the Company's raw materials or products, as a result of increases in fuel or labor costs, higher demand for logistics services, consolidation in the transportation industry or otherwise, may adversely affect the Company's financial performance as the Company 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 Company's reputation, negatively affect the Company's customer relationships and have a material adverse effect on the Company's financial position and financial performance.
Third-party insolvency risks: The Company 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 Company. If any of these third parties were to become subject to bankruptcy, receivership or similar proceedings, the Company's rights and benefits in relation to the Company's relationships, transactions and contracts with such third parties could be terminated, modified in a manner adverse to the Company, or otherwise impaired. The Company 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 Company's part to do so could have a material adverse effect on the Company's business and financial performance.
Foreign exchange: As the Company continues to expand its international sales and foreign operations,

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the Company becomes more exposed to the effects of fluctuations in currency exchange rates.

Conflicts of interest: Certain of the directors and officers of the Company 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 Company and as directors and officers of such other companies.

DISCLOSURE CONTROLS AND PROCEDURES

The Company's DC&P, as defined in National Instrument 52-109 Certification of Disclosure in Issuer's Annual and Interim Filings ("NI 52-109") are designed to provide reasonable assurance that information required to be disclosed in the Company's filings under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation. They are also designed to provide reasonable assurance that all information required to be disclosed in these filings is accounted for, accumulated and communicated to the Company's senior management team including the Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO") as appropriate. This is meant to allow for timely decisions regarding public disclosure.

The Company cannot provide absolute assurance that all information required to be disclosed in its filings is reported within the time periods specified in securities legislation because of the limitations in control systems to prevent or detect all misstatements due to error or fraud.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of the Financial Statements and application of IFRS require the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the consolidated entity's accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the audited financial statements, are disclosed in the Fiscal 2025 consolidated financial statements.

ADDITIONAL INFORMATION

Additional information and documents relating to the Company and its operations are available on SEDAR+ at www.sedarplus.ca and on the Company's website at www.vitalist.co

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AI assistant

Vitalist — Management Reports 2025

47750_rns_2025-06-26_fd44da37-9019-487d-9cee-057bf4189083.pdf

Table of Contents

FORWARD-LOOKING INFORMATION

BASIS OF PRESENTATION

GOING CONCERN

CHANGE IN FUNCTIONAL CURRENCY

CORPORATE OVERVIEW

Share Consolidation Transaction

Deconsolidation

OUTLOOK

General

Rebranding to Vitalist Inc. and Vitalist™ Products

Motorola Products

CONSOLIDATED RESULTS

Selected Financial Information

Fourth Quarter Information

Results of Operations

LIQUIDITY AND CAPITAL RESOURCES

Debenture notes (formerly "Convertible debenture notes")

Choco Facility

Revolving Credit Facility

Loan Facility

Founders' notes

CASH FLOWS

Operating Activities

Investing Activities

Financing Activities

COMMITMENTS

OUTSTANDING SHARE DATA

OFF BALANCE SHEET ARRANGEMENTS

RELATED PARTY TRANSACTIONS

FINANCIAL INSTRUMENTS AND OTHER INSTRUMENTS

FINANCIAL RISK MANAGEMENT

Credit Risk

Liquidity risk

Market risk

Capital Management

SUBSEQUENT EVENTS

Expiry of Motorola licensing agreement

Private placement of equity/royalty units

Reebok Brand Licensing Agreement

Revised Choco Amendment

Revolving Credit Facility Financing

Debenture Note Amendment Letter of Intent

OTHER RISK FACTORS

DISCLOSURE CONTROLS AND PROCEDURES

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

ADDITIONAL INFORMATION

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Vitalist Management Reports 2025