Xcyte Digital Corp. — Management Reports 2023

Apr 24, 2023

GHP Noetic Science-Psychedelic Pharma Inc. Management’s Discussion and Analysis For the year ended December 2022

GHP Noetic Science-Psychedelic Pharma Inc. Management’s Discussion and Analysis For the year ended December 31, 2022

Dated: April 21, 2023

The following management discussion and analysis (“MD&A”) of the financial condition and results of operations of GHP Noetic Science-Psychedelic Pharma Inc. (the “Corporation”) was prepared by management of the Corporation as at December 31, 2022, and should be read in conjunction with the Corporation’s audited financial statements as of December 31, 2022 and 2021 (the “Financial Statements”). Additional information relating to the Corporation is available on SEDAR at www.sedar.com.

The Financial Statements have been prepared by management and have been prepared in accordance with International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”) and interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”). All amounts are expressed in Canadian dollars unless otherwise stated. Other information contained in this document has also been prepared by management and is consistent with the data contained in the Financial Statements.

The Corporation’s certifying officers are responsible for ensuring that the annual financial report and MD&A do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made. The Corporation’s certifying officers certify that the annual financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the Corporation as the date of and for the periods presented in the interim filings.

The Audit Committee and the Board of Directors provide an oversight role with respect to all public financial disclosures by the Corporation. The Board of Directors approves the Financial Statements and MD&A after the completion of its review and recommendation for approval by the Audit Committee, which meets periodically to review all financial reports, prior to filing.

Forward-Looking Statements

Certain statements contained in this document constitute “forward-looking statements”. All statements other than statements of historical fact contained in this MD&A, including, without limitation, those regarding the Corporation’s future financial position and results of operations, strategy, proposed acquisitions, plans, objectives, goals and targets, and any statements preceded by, followed by or that include the words “believe”, “expect”, “aim”, “intend”, “plan”, “continue”, “will”, “may”, “would”, “anticipate”, “estimate”, “forecast”, “predict”, “project”, “seek”, “should” or similar expressions or the negative thereof, are forward-looking statements. These statements are not historical facts but instead represent only the Corporation’s expectations, estimates and projections regarding future events. These statements are not guarantees of future performance and involve assumptions, risks and uncertainties that are difficult to predict. Therefore, actual results may differ materially from what is expressed, implied or forecasted in such forward-looking statements.

Additional factors that could cause actual results, performance or achievements to differ materially include, but are not limited to risks associated with: limited operating history; no history of earnings or payment of any dividends; unlikely to generate earnings or pay dividends in the immediate or foreseeable future; no current business operations; no current assets other than cash; ability to complete a qualifying transaction; ability to raise additional funds if required; potential dilution of shares as a result of potential qualifying transaction; reliance on management team; conflicts of interest among certain directors and officers of the Corporation; lack of liquidity for shareholders of the Corporation; and market risk. See “Risks and Uncertainties”.

Management provides forward-looking statements because it believes they provide useful information to readers when considering their investment objectives and cautions readers that the information may not be appropriate for other purposes. Consequently, all of the forward-looking statements made in this MD&A are qualified by these cautionary statements and other cautionary statements or factors contained herein, and there can be no assurance that the actual results or developments will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, the Corporation. These forward-looking statements are made as of the date of this MD&A, and the Corporation assumes no obligation to update or revise them to reflect subsequent information, events or circumstances or otherwise, except as required by law.

The forward-looking statements in this MD&A are based on numerous assumptions regarding the Corporation’s present and future business strategies and the environment in which the Corporation will operate in the future, including assumptions regarding business and operating strategies.

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GHP Noetic Science-Psychedelic Pharma Inc. Management’s Discussion and Analysis For the year ended December 31, 2022

Description of the Business

GHP Noetic Science-Psychedelic Pharma Inc. (the "Corporation") was incorporated under the Business Corporations Act (Ontario) on March 25, 2020 and is classified as a Capital Pool Company as defined in the Policy 2.4 of the TSX Venture Exchange (the “Exchange”) Corporate Finance Manual (the “Manual”). On July 29, 2020, the Corporation completed its initial public offering trading under the symbol PSYF-P.V.

The principal business of the Corporation is the identification and evaluation of assets or businesses with a view to completing a Qualifying Transaction (as such term is defined in the Manual) ("QT"). The Corporation has not commenced commercial operations and has no assets other than cash and short term investments. Given the nature of the activities, no separate segmented information is reported. The Corporation’s continuing operations, as intended, are dependent on its ability to secure equity financing with which it intends to identify and evaluate potential acquisitions of businesses, and once identified and evaluated, to negotiate an acquisition thereof or participation therein subject to receipt of regulatory and, if required, shareholders’ approval.

The head office and the registered head office of the Corporation is located at 18 Lumley Avenue Toronto, ON M4G 2X5 Canada.

On April 21, 2023, the Board of Directors of the Corporation approved the audited financial statements for the year ended December 31, 2022

Qualifying Transaction

On February 4, 2021, the Corporation announced that it had entered into a non-binding letter of intent dated February 2, 2021 with Diamond Therapeutics Inc. (“Diamond”), as psychedelic drug development Corporation focused on low-dose therapies for mental health. On May 3, 2022 the Corporation announced the termination of this letter of intent between Diamond and the Corporation.

On February 9, 2023, the Corporation announced that it had entered into a non-binding letter of intent dated February 6, 2023 with Xcyte Digital Corp. (“Xcyte”), a technology company focused on providing services for entities to deliver and enhance their brand in the metaverse. The letter of intent sets out the mutual understanding in regard to the broad terms of the proposed Qualifying Transaction (“Transaction”).

The Transaction is expected to proceed by way of a three-cornered amalgamation, pursuant to which Xcyte will merge with a wholly-owned subsidiary of the Corporation formed for the purposes of completing the Transaction, following which the Corporation will change its name to Xcyte Digital Corporation. The final structure of the Transaction will be determined after the parties have considered applicable tax, securities and accounting matters. The Transaction will be subject to, among other items, the execution of a definitive agreement (the “Definitive Agreement”) to be negotiated by the parties.

Prior to the closing, the Corporation and Xcyte are expected to undertake a private placement of subscription receipts to raise gross proceeds of up to $4,000,000.

On March 30, 2023 the Corporation and Xcyte amended the letter of intent to extend the date for which the letter of intent would be considered to be terminated from March 30, 2023 to April 29, 2023.

Selected Financial Information

The following selected financial data is derived from the financial statements of the Corporation prepared within acceptable limits of materiality and are in accordance IFRS.

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GHP Noetic Science-Psychedelic Pharma Inc. Management’s Discussion and Analysis

For the year ended December 31, 2022

Selected Statement of Financial Position Data

	As at	As at
	December 31, 2022	December 31, 2021
Net working capital	1,093,938	1,147,620
Total current assets	1,108,666	1,217,312
Total current liabilities	14,728	69,692
Total shareholders’ equity	1,093,938	1,147,620

Quarterly Information

Net (loss) for the periodWeighted average numberof sharesNet (loss) per shareNet (loss) for the periodWeighted average numberof sharesNet (loss) per share	Three months ended
	December 31, 2022September 30, 2022June 30, 2022March 31, 2022
	(7,820)(13,521)(17,480)(14,861)10,000,00010,000,00010,000,00010,000,0000.000.000.000.00Three months ended
	December31,2021September30,2021June 30,2021March31,2021
	(50,674)6,658(9,567)(25,524)10,000,00010,000,00010,000,00010,000,0000.010.00(0.00)0.00

Selected Statement of loss and comprehensive loss

The Corporation does not have any operations and will not conduct any business other than the identification and evaluation of business and assets for potential acquisition. The following table sets forth selected results of operations for the year ended December 31, 2022.

Interest IncomeExpensesNet (loss) for the periodBasic income (loss) per share	Year endedDecember 31, 2022Year endedDecember 31, 2021
	8,8027,59362,48486,700(53,682)(79,107)(0.01)(0.01)

The expenses in the year ended December 31, 2021 were elevated in comparison to 2022 due to increased costs incurred in connection with the review of potential Qualifying Transaction with Diamond which was terminated in February 2022.

Results of Operations

The Corporation does not have any operations and will not conduct any business other than the identification and evaluation of business and assets for potential acquisition.

During the year ended December 31, 2022, the Corporation recorded a net loss of $53,682 consisting of $62,484 in expenses and $8,802 in interest income earned on its short term investments.

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GHP Noetic Science-Psychedelic Pharma Inc. Management’s Discussion and Analysis

For the year ended December 31, 2022

Additional Disclosure for Venture Corporations without Significant Revenue

The following table sets forth a breakdown of material components of the Corporation for the year ended December 31, 2022 and December 31, 2021.

		Year Ended	Year Ended
		December 31, 2022	December 31, 2021
Filing fees		$16,559	$23,349
Legal and professional fees		$30,634	$68,460
Office/General administrative expenses(recovery)		$15,291	($5,109)
		$62,484	$86,700

Legal and professional fees declined in the year ended December 31, 2022 due to the year ended December 31, 2021 including increased costs with respect to the proposed qualifying transaction with Diamond. Office/General administrative expenses increased in the year December 31, 2022 as the year ended December 31, 2021 included a recovery from a shareholder of the Corporation in the amount of $15,467.

The following table sets forth a breakdown of material components of the general and office costs of the Corporation for each of the quarters.

Filing FeesLegal and Professional FeesOffice/General administrative	December 31, 2022September 30, 2022June 30, 2022March 31, 2022$2,695$508$4,685$8,671$2,163$11,481$9,735$7,255$8,024$1,533$5,543$191$12,882$13,522$19,963$16,117Three months ended

Liquidity, Capital Resources, and Outlook

As of December 31, 2022 the Corporation had working capital of $1,093,938. This included $108,666 in cash and short term investments maturing October 12, 2023 of $1,000,00 offset by accounts payable and accrued liabilities of $14,728. Additional equity or debt financing may be required to complete a Qualifying Transaction.

Off-Balance Sheet Arrangements

There are no off-balance sheet arrangements as of December 31, 2022.

Transactions with Related Parties

During the year ended December 31, 2022, the Corporation was invoiced $9,407 (2021 - $9,351) by a Company (hyperNET Inc.) controlled by a director (Paul Barbeau) and officer for administration services provided.

The following entities are classified as related parties due to the following:

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GHP Noetic Science-Psychedelic Pharma Inc. Management’s Discussion and Analysis

For the year ended December 31, 2022

Related Party Relationship Paul Barbeau CEO and Director Warren Wright CFO and Director Sa’ad Shah CS and Director George Main Director Andrew Jolley Director hyperNET Inc Controlled by Paul Barbeau

Critical Accounting Estimates and Policies

The Corporation’s significant accounting policies and the adoption of new accounting policies, if any, are disclosed in the financial statements for the year ending December 31, 2022.

Financial Instruments and Other Instruments

The Corporation’s financial instruments consist of cash, short-term investments and accounts payable and accrued liabilities. It is management’s opinion that the Corporation is not exposed to significant interest, currency or credit risks arising from these financial instruments and that the fair value of these financial instruments approximates their carrying values.

Disclosure of Outstanding Share Data

As at the date of this MD&A, the following is a description of the outstanding equity securities and convertible securities previously issued by the Corporation:

Authorized Outstanding Voting or equity securities issued and Unlimited Common Shares 10,000,000 Common Shares outstanding Securities convertible or exercisable Directors’ and officers’ stock options to into voting or equity securities – stock acquire up to 10% of the outstanding 1,000,000 Stock Options options Common Shares Voting or equity securities issuable on conversion or exchange of outstanding (as above) (as above) securities

Risks and Uncertainties

The Corporation has a limited history of existence. There can be no assurance that a Qualifying Transaction will be completed. Equity or debt financing may be required to complete a Qualifying Transaction. There can be no assurance that the Corporation will be able to obtain adequate financing to continue operations. The securities of the Corporation should be considered a highly speculative investment. The following risk factors should be given special consideration when evaluating an investment in any of the Corporation's securities:

• (a) until completion of a Qualifying Transaction, the Corporation is not permitted to carry on any business other than the identification and evaluation of potential Qualifying Transactions;

• (b) the Corporation has only limited funds with which to identify and evaluate potential Qualifying Transactions and there can be no assurance that the Corporation will be able to identify a suitable Qualifying Transaction;

• (c) even if a proposed Qualifying Transaction is identified, there can be no assurance that the Corporation will be able to successfully complete the transaction;

• (d) the Qualifying Transaction may be financed in all or part by the issuance of additional securities by the Corporation and this may result in further dilution to the investor, which dilution may be significant and which may also result in a change of control of the Corporation;

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GHP Noetic Science-Psychedelic Pharma Inc. Management’s Discussion and Analysis For the year ended December 31, 2022

• (e) there can be no assurance that an active and liquid market for the Corporation’s common shares will develop and an investor may find it difficult to resell its common shares;

• (f) upon public announcement of a proposed Qualifying Transaction, trading in the Corporation’s common shares will be halted and will remain halted for an indefinite period of time, typically until a Sponsor has been retained and certain preliminary reviews have been conducted. The Corporation’s common shares will be reinstated to trading before the Exchange has reviewed the transaction and before the Sponsor has completed its full review. Reinstatement to trading provides no assurance with respect to the merits of the transaction or the likelihood of the Corporation completing the proposed Qualifying Transaction; and

• (g) trading in the Corporation’s common shares may be halted at other times for other reasons, including for failure by the Corporation to submit documents to the Exchange in the time periods required.

Disclosure Controls and Procedures

Management has designed disclosure controls and procedures to provide reasonable assurance that material information relating to the Corporation is made known to the Chief Executive Officer and the Chief Financial Officer by others within the Corporation, in an accurate and timely manner in order for the Corporation to comply with its continuous disclosure and financial reporting obligations and in order to safeguard assets.

Other Information

Additional information about the Corporation is available on SEDAR at www.sedar.com

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