Zoompass Holdings, Inc. - Annual Report: 2020 (Form 10-K)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

ZOOMPASS HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

(Mark One)

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2020

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____ to ____

Commission File No. 333-20399

Nevada	30-0796392
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

2075 Kennedy Rd, Suite 404 Toronto, Ontario Canada, M1T 3V3
(Address of principal executive offices, including Zip Code)
416-862-5257 (Registrant's telephone number, including area code)

Securities Registered Pursuant to Section 12(b) of the Exchange Act: None

Securities Registered Pursuant to Section 12(g) of the Exchange Act:

Common Stock, $0.0001 per share par value

Indicate by check mark if registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No☒.

Indicate by check mark if registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes ☐ No ☒ .

Indicate by check mark whether the registrant: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months or such shorter period that the registrant was required to submit and post such files. Yes ☐ No ☒

Check if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained herein to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K. ☒

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☒
(Do not check if a smaller reporting company)
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) : Yes ☐ No ☒

The aggregate market value of the voting stock of the Registrant held by non-affiliates September 24, 2021 was approximately $Nil.

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Class	Outstanding as of September 24, 2021
Common stock, $0.0001 par value	110,976,094

ZOOMPASS HOLDINGS, INC.

TABLE OF CONTENTS


PART I

Item 1.	Business	4
Item 1A.	Risk Factors	5
Item 1B.	Unresolved Staff Comments	12
Item 2.	Properties	12
Item 3.	Legal Proceedings	12
Item 4.	Mine Safety Disclosures	12

PART II

Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	13
Item 6.	Selected Financial Data	16
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	17
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk`	28
Item 8.	Financial Statements and Supplementary Data	29
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	29
Item 9A.	Controls and Procedures	30
Item 9B.	Other Information	31

PART III

Item 10.	Directors, Executive Officers and Corporate Governance	32
Item 11.	Executive Compensation	35
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	38
Item 13.	Certain Relationships and Related Transactions, and Director Independence	39
Item 14.	Principal Accounting Fees and Services	39

PART IV

Item 15.	Exhibits, Financial Statement Schedules	40

SIGNATURES		41

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Statements contained in this annual report include "forward-looking statements" within the meaning of such term in Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements involve known and unknown risks, uncertainties and other factors which could cause actual financial or operating results, performances or achievements expressed or implied by such forward-looking statements not to occur or be realized. Forward-looking statements made in this annual report generally are based on our best estimates of future results, performances or achievements, predicated upon current conditions and the most recent results of the companies involved and their respective industries. Forward-looking statements may be identified by the use of forward-looking terminology such as "may", "will", "could", "should", "project", "expect", "believe", "estimate", "anticipate", "intend", "continue", "potential", "opportunity" or similar terms, variations of those terms or the negative of those terms or other variations of those terms or comparable words or expressions. Potential risks and uncertainties include, among other things, such factors as:

	•	concentration of our customer base and fulfillment of existing customer contracts;
	•	our ability to maintain pricing;
	•	deterioration of the credit markets;
	•	competition within our industry;
	•	asset impairment and other charges;
	•	our identifying, making and integrating acquisitions;
	•	loss of key executives;
	•	the ability to employ skilled and qualified workers;
	•	inadequacy of insurance coverage for certain losses or liabilities;
	•	federal legislation and state legislative and regulatory initiatives relating to our industry;
	•	future legislative and regulatory developments;
	•	our beliefs regarding the future of our competitors;
	•	our expectation that the demand for our products services will eventually increase; and
	•	our expectation that we will be able to raise capital when we need it.

These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors" set forth in this Annual Report on Form 10-K for the year ended December 31, 2020, any of which may cause our company's or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These risks may cause the Zoompass Holdings, Inc. or its industry's actual results, levels of activity or performance to be materially different from any future results, levels of activity or performance expressed or implied by these forward-looking statements.

Readers are urged to carefully review and consider the various disclosures made by us in this report and in our other reports filed with the Securities and Exchange Commission. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes in the future operating results over time except as required by law. We believe that our assumptions are based upon reasonable data derived from and known about our business and operations. No assurances are made that actual results of operations or the results of our future activities will not differ materially from our assumptions.

As used in this Annual Report on Form 10-K and unless otherwise indicated, the terms "we," "us," "our," or the "Company" refer to Zoompass Holdings, Inc. and our subsidiaries. Unless otherwise specified, all dollar amounts are expressed in United States dollars.

PART I

ITEM 1. BUSINESS

Overview of Our Business

Recent Developments

UVIC, Inc., was incorporated in Nevada on August 21, 2013.

On May 8, 2015, UVIC, Inc., filed a registration statement with the Securities and Exchange Commission Form S-1 to register 7,000,000 shares of our common stock at a per share price of $0.01 on behalf of selling shareholders. The SEC file number of the registration statement is 333-203997. The Form S-1 was declared effective by the SEC on August 7, 2015.

Prior to the transaction described below, UVIC., Inc., had limited operating and development activities.

Effective August 22, 2016, the Company entered into an Agreement for the Exchange of Stock (the "Agreement") with Zoompass, Inc., an Ontario, Canada corporation ("Zoompass") that was incorporated under the laws of Ontario on June 8, 2016. Pursuant to the Agreement, the Company agreed to issue 8,050,784 shares of its restricted common stock to Zoompass' shareholders ("Zoompass' shareholders") in exchange for all the shares of Zoompass Inc. owned by the Zoompass Inc.'s Shareholders. At the Closing Date, Rob Lee, a significant shareholder of the Company agreed to cancel 7,000,000 shares of the Company's common stock, which shares constituted the control shares of the Company. Other than this one significant shareholder, shareholders of the Company held 2,670,000 shares. As a result of the Agreement, Zoompass is now a wholly owned subsidiary of the Company. The Company has amended its Articles of Incorporation to change its name to Zoompass Holdings, Inc. and the appropriate forms were filed with FINRA and the SEC to change its name, address and symbol and complete a 3.5-1 forward split, which was consented to by the majority of shareholders on September 7, 2016 and approved in February 2017, for shareholders of record on September 7, 2016.

All share figures have been retroactively stated to reflect the stock split approved by shareholders, unless otherwise indicated. Additionally, the Company's shareholders consented to an increase of the shares authorized to 500,000,000 and a revision of the par value to $0.0001.

As the former Zoompass shareholders ended up owning the majority of the Company, the transaction does not constitute a business combination and was deemed to be a recapitalization of the Company with Zoompass being the accounting acquirer, accordingly the accounting and disclosure information is that of Zoompass going forward.

Effective March 6, 2018 (the "Closing Date"), Zoompass Holdings, Inc.'s (the "Company") Canadian operating subsidiary, Zoompass, Inc., entered into an Asset Purchase Agreement (the "Agreement") for the sale of its Prepaid Card Business ("Prepaid Business") to Fintech Holdings North America Inc., or its designee. The aggregate purchase price of the Prepaid Business was C$400,000. The transaction was completed on March 26, 2018.

During the first quarter of 2018, the Company implemented a plan to abandon the mobility solution operation. The Company has determined that the mobility solution operation represents a component and a reportable segment of the Company. According to the plan of abandonment, the Company gradually ceased accepting any new business during first quarter of 2018 and settled all the remaining orders and obligations from mobility solution by end of March 2018.

On October 16, 2018, the Company reached an Asset Purchase Agreement and purchased certain business assets that represents a business from Virtublock Global Corp. (“Virtublock”, “VGC”) in return the Company issued 44,911,724 shares to Virtublock and pursuant to the issuance of shares Virtublock ended up owning 45% of total outstanding common shares of the Company.

Zoompass Inc., was incorporated under the laws of Ontario on June 8, 2016. On October 17, 2018, pursuant to an asset purchase agreement with Virtublock, certain net assets were acquired by the Company in exchange for shares of the Company. The net assets primarily consisted of certain technology IP related to cryptocurrency exchange/wallet, certain strategic partnerships and customer contracts. On March 25, 2019, the name of the company was changed from Zoompass Inc. to Virtublock Canada Inc. (“VCI”).

On February 27, 2020, the Company cancelled 44,911,724 shares of the common stock which were issued in connection with the asset purchase agreement dated October 17, 2018 with Virtublock Global Corp. Pursuant to a General Release agreement dated November 29, 2019, the asset purchase agreement dated October 17, 2018 with Virtublock Global Corp. was deemed cancelled and each party acknowledged and agreed that no party has or shall have any claim with respect to intellectual property, software or other assets owned by any other party and that no agreements exist or remain unsatisfied with respect to the transfer of any asset from a releasing party to any other party, and Virtublock Global Corp. assigned and tendered the 44,911,724 shares of common stock of the Company to the Company for cancellation. As the share cancellation occurred on February 27, 2020, the accounting recognition of this transaction, consisting of a transfer of $4,492 from common stock to additional paid-in capital and related reduction in the number of common shares outstanding, will be reflected in the consolidated financial statements for the first quarter ended March 31, 2020.

On May 31, 2020, the Company closed a Share Exchange Agreement (the "Share Exchange Agreement") by and among the Company, Blockgration Global Corp., an Ontario corporation and its subsidiaries ("BGC"), and the shareholders of BGC (the "BGC Shareholders"). This acquisition gives the Company controlling interest in BGC’s subsidiaries in Canada and India which is engaged in the business of digital wallet deployments, prepaid card platform, blockchain and mobile apps deployment.

The Company has incurred recurring losses from operations and as of December 31, 2020 had a net working capital deficiency and an accumulated deficit. The Company’s continued existence is dependent upon its ability to continue to execute its operating plan and to obtain additional debt or equity financing. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. There can be no assurance that the necessary debt or equity financing will be available, or will be available on terms acceptable to the Company, in which case the Company may be unable to meet its obligations. Should the Company be unable to realize its assets and discharge its liabilities in the normal course of business, the net realizable value of its assets may be materially less than the amounts recorded in the consolidated financial statements. The consolidated financial statements do not include any adjustments relating to the recoverability of recorded asset amounts that might be necessary should the Company be unable to continue in existence.

During the three months period ended March 31, 2021, the Company completed a private placement for the sale of non-registered shares of the Company's common stock. As a result of the private placement 3,614,685 non-registered shares of the Company's common stock was issued for gross proceeds of $298,355.

In August 2021, the Company completed a private placement for the sale of non-registered shares of the Company's common stock. As a result of the private placement 1,200,000 non-registered shares of the Company's common stock was issued for gross proceeds of $96,000.

There is no certainty that the Company will be successful in generating sufficient cash flow from operations or achieving and maintaining profitable operations in the future to enable it to meet its obligations as they come due and consequently continue as a going concern. The Company will require additional financing in the future to fund its operations and it is currently working on securing this funding through corporate collaborations, public or private equity offerings or debt financings. Issuance of additional equity securities by the Company would result in the dilution of the interests of existing shareholders. There can be no assurance that financing will be available when required.

Beginning in March 2020, the Governments of Canada and the United States, as well as other foreign governments instituted emergency measures as a result of the COVID-19 virus outbreak. The virus has had a major impact on North America and international securities, currency markets and consumer activity which may impact the Company's financial position, its results of future operations and its future cash flows significantly. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, the Company is not able to estimate the effects of the COVID-19 outbreak on its results of future operations, financial position, and liquidity in fiscal year 2021.

The Company is actively seeking opportunities to enter into partnership or acquire third parties with existing revenue streams. The company is well positioned to achieve this objective and will continue to pursue such opportunities going forward.

The Company will remain a Fintech company and continue to develop and acquire software platforms and services to sell to customers globally with a focus on leading edge technologies and software as a service.

ITEM 1A. RISK FACTORS

Global Economic Conditions

The unprecedented events in global financial markets in the past several years have had a profound impact on the global economy. Many industries have been impacted by these market conditions. Market events and conditions, including volatility in the international credit markets and other financial systems and the deterioration of global economic conditions, could impede the Company's access to capital or increase the cost of capital and may adversely affect the Company's operations. The Company is also exposed to liquidity risks in meeting its operating and capital expenditure requirements in instances where the Company's cash position is unable to be maintained or appropriate financing is unavailable. These factors may impact the Company's ability to obtain capital on terms favourable to it or at all. Increased market volatility may impact the Company's operations which could adversely affect the trading price of the Common Shares.

Operating and Capital Requirements

The Company competes for financing and personnel with other financial technology companies. There can be no assurance that additional capital or other types of financing will be available, when needed, or that, if available, the terms of such financing will be favourable to the Company. The Company may need to make significant expenditures in connection with the development of its platform or other lines of business. There is no assurance that any such funds will be available for operations and the ability of the Company to raise such capital will depend, in part, upon conditions in the capital markets at the time and its historical business performance. If additional capital is raised by the issuance of shares from the treasury of the Company, shareholders may suffer dilution. Future borrowings by the Company or its subsidiaries may increase the level of financial and interest rate risk to the Company as the Company will be required to service future indebtedness. Further, failure to obtain additional financing on a timely basis could cause the Company to reduce, suspend, or terminate its proposed operations.

Dependence on Highly Skilled Personnel

The Company's prospects depend in part on the services of key executives and other highly skilled and experienced personnel focused on managing the Company's interests, in addition to the identification of new opportunities for growth and funding. The loss of these persons or the Company's inability to attract and retain additional highly skilled employees required for the Company's activities may have a material adverse effect on its business or future operations. The Company does not currently maintain "key person" life insurance on any of its key employees.

Negative Operating Cash Flow

The Company has negative operating cash flow and may continue to have negative operating cash flow in future periods. To the extent that the Company has negative operating cash flow, the Company will need to continue to deploy a portion of its cash reserves to fund such negative operating cash flow.

Limited operating history of the Company's new direction; No assurance of profitability; anticipated losses.

The Company has a limited operating history and, accordingly, has a limited operating history on which to base an evaluation of our business. Our business must be considered in light of the risks, expenses and problems frequently encountered by companies in their early stages of development, particularly companies in new and rapidly evolving markets which involve technology. The in-development operations are subject to all of the risks inherent in the establishment of a new business enterprise. Accordingly, the likelihood of our success must be considered in the light of the problems, expenses, difficulties, complications, and delays frequently encountered in connection with the starting and expansion of a business and the relatively competitive environment in which we will operate. Unanticipated delays, expenses and other problems such as setbacks in launch and development, product sourcing manufacturing, and market acceptance are frequently encountered in establishing a new business such as the Company`s. There can be no assurance that the Company will be successful in addressing such risks, and any failure to do so could have a material adverse effect on the Company's business, results of operations and financial condition.

Because of the Company`s limited operating history, the Company has limited historical financial data on which to base planned operating expenses. Accordingly, our expense levels, which are, to a large extent, variable, will be based in part on our expectations of future revenues. As a result of the variable nature of many of our expenses, we may be unable to adjust spending in a timely manner to compensate for any unexpected delays in the development and

marketing of our products or any subsequent revenue shortfall. Any such delays or shortfalls will have an immediate adverse impact on our business, operating results and financial condition.

The Company has not achieved profitability to date. To the extent that net revenue does not grow at anticipated rates or that increases in its operating expenses precede or are not subsequently followed by commensurate increases in net revenue, or that the Company is unable to adjust operating expense levels accordingly, the Company's business, results of operations and financial condition will be materially and adversely affected. There can be no assurance that the Company's operating losses will not increase in the future or that the Company will ever achieve or sustain profitability.

Regulatory Risk

Although the Company follows certain laws and regulations and receives the requisite approvals to operate in the lines of business it currently or intends to operate in there is no guarantee that these laws, regulations and approvals will not be challenged or impugned. Further changing regulatory regimes may subject the Company to new laws and regulations. Changes in the regulatory environment the Company operates in can have a material adverse effect on operations.

Demand for our products and services may not develop as expected our projected revenues and profits will be affected.

Future profits are influenced by many factors, including economics, and will be predicated on a stable and/or growing market and the purchase and consumption of our products and services. The Company believes, and our growth expectations assume, that the markets for our suite of products and services will continue to grow, that the Company will increase its penetration of these markets and that our anticipated revenue from selling into this market will continue to increase. If the Company's expectations as to the size of these markets and its ability to sell our products and services in this market are not correct, our revenue may not materialize, and our business will be harmed.

Operating results may fluctuate and may fall below expectations in any fiscal quarter.

Our operating results are difficult to predict and are expected to fluctuate from quarter to quarter due to a variety of factors, many of which are outside of our control. As a result, comparing our operating results on a period-to-period basis may not be meaningful, and you should not rely on our past results or future predictions prepared by the Company as an indication of our future performance. If our revenue or operating results fall in any period, the value of our common stock would likely decline.

Factors that may cause our operating results to fluctuate include:

	●	our ability to arrange potential financing or generate operating cash flows;
	●	our ability to acquire products to resell to our customers;
	●	changes in federal, state and local government;
	●	availability and costs of labor and equipment;
	●	the addition of new customers or the loss of existing customers;
	●	our ability to control costs, including operating expenses;
	●	changes in the mix of our products and services;
	●	the length of our sales cycle;
	●	the productivity and growth of our sales force;
	●	the timing of opening of new offices or making other significant investments in the growth of our business, as the revenue we hope to generate from those expenses often lags several quarters behind those expenses:
	●	changes in pricing by us or our competitors;
	●	costs related to the acquisition and integration of companies or assets;
	●	general economic trends, including changes in geopolitical events such as war or incidents of terrorism; and
	●	future accounting pronouncements and changes in accounting policies.

The Company operates in a highly competitive industry and competitors may compete more effectively.

Many of our competitors have longer operating histories and greater resources than us, and could focus their substantial financial resources to develop a competing business model, develop products or services that are more attractive to potential customers than what we offer or convince our potential customers that they should require financing arrangements that would be impractical for smaller companies to offer. Our competitors may also offer

products and services at prices below cost and/or devote significant sales forces to competing with us or attempt to recruit our key personnel by increasing compensation, any of which could improve their competitive positions. Any of these competitive factors could make it more difficult for us to attract and retain customers; cause us to lower our prices in order to compete, and reduce our market share and revenue, any of which could have a material adverse effect on our financial condition and operating results. We can provide no assurance that we will continue to effectively compete against our current competitors or additional companies that may enter our markets.

International operations could expose business to additional risks

The Company expects to generate a portion of sales outside of Canada in the future. Operating internationally is one of our growth strategies, and we expect our revenue and operations outside of North America will expand in the future. These operations will be subject to a variety of risks that we do not face currently:

	•	establishing and managing highly experienced foreign suppliers, distributors and relationships and overseeing and ensuring the performance of foreign subcontractors;
	•	increased travel, infrastructure and legal and compliance costs associated with multiple international locations;
	•	additional withholding taxes or other taxes on our foreign income, and tariffs or other restrictions on foreign trade or investment;

	•	imposition of, or unexpected adverse changes in, foreign laws or regulatory requirements, many of which differ from those which the Company currently operates in;
	•	increased exposure to foreign currency exchange rate risk;
	•	longer payment cycles for sales in some foreign countries and potential difficulties in enforcing contracts and collecting accounts receivable;
	•	difficulties in repatriating overseas earnings;
	•	general economic conditions in the countries in which we operate; and
	•	political unrest, war, incidents of terrorism or responses to such events.

Our overall success in international markets will depend, in part, on our ability to succeed in differing legal, regulatory, economic, social and political conditions. We may not be successful in developing and implementing policies and strategies that will be effective in managing these risks in each country where we do business. Our failure to manage these risks successfully could harm our international operations, reduce our international sales and increase our costs, thus adversely affecting our business, financial condition and operating results.

The Company relies on outside consultants, service providers and suppliers

We will rely on the experience of consultants, service providers and suppliers. In the event that one or more of these consultants or terminates its relationship with the Company, or becomes unavailable, suitable replacements will need to be obtained and there is no assurance that such consultants, service providers and suppliers could be obtained under conditions favorable to us.

We rely on strategic relationships to promote our products

The Company relies on strategic partnerships with outside companies and individuals to promote and supply certain of our products and services, thus making the future success of our business particularly contingent on the efforts of other parties. An important part of our strategy is to promote acceptance of our products through with certain service providers who we feel could assist us with our promotion strategies. Our dependence raises potential risks with respect to the future success of our business. Our success is dependent on the successful completion and commercial deployment of our products and services and on the future commitment of our distributors to our products and technology.

Reliance on our suppliers

The Company relies vendors and suppliers to provide power, as well as high quality products and services on a consistent basis. The future success of the Company is contingent on the efforts and performance of these suppliers. The Company may have difficulty in locating or using alternative resources should supply problems arise with the current suppliers. An interruption or reduction in the source of supply of or an unanticipated increase in vendor prices, could materially affect our operating results and damage customer relationships as well as our business.

Future growth could strain resources, and if the Company is unable to manage growth, it may not be able to successfully implement our business plan.

The Company hopes to experience rapid growth in operations, which will place a significant strain on our management, administrative, operational and financial infrastructure. Our future success will depend in part upon the ability of our executive officers to manage growth effectively. This will require that we hire and train additional personnel to manage our expanding operations. In addition, we must continue to improve our operational, financial and management controls and our reporting systems and procedures. If we fail to successfully manage our growth, we may be unable to execute upon our business plan.

Failure to protect intellectual property, our planned business could be adversely affected.

Despite efforts to protect and ensure the Company has proprietary rights, parties may attempt to copy aspects of our products, obtain, claim and use information that we regard as proprietary. Unauthorized use of our proprietary technology could harm our business. Litigation to protect our intellectual property rights can be costly and time-consuming to prosecute, and there can be no assurance that we will have the financial or other resources necessary to enforce or defend a patent infringement or proprietary rights violation action.

Unforeseen Liabilities from Past Acquisitions

There may be liabilities and claims that the Company has failed to discover or has underestimated in connection with previous acquisitions. In addition, there may be expenditure requirements that the Company has failed to discover or underestimated in connection with these acquisitions, which amounts may be material. Any such liabilities or expenditure requirements could have a material adverse effect on the Company's business, financial condition or future prospects.

Conflicts of Interest

Certain of the directors and officers of the Corporation also serve as directors and/or officers of other companies there exists the possibility for such directors and officers to be in a position of conflict. Any decision made by any of such directors and officers will be made in accordance with their duties and obligations to deal fairly and in good faith with a view to the best interests of the Company and its shareholders. In addition, each director is required to declare and refrain from voting on any matter in which such director may have a conflict of interest.

If we issue additional shares in the future, it will result in the dilution of our existing stockholders.

Our articles of incorporation authorize the issuance of up to 500,000,000 shares of our common stock, with a par value of $0.0001 per share. Our board of directors may choose to issue some or all of such shares to acquire one or more companies or products and to fund our overhead and general operating requirements. The issuance of any such shares will reduce the book value per share and may contribute to a reduction in the market price of the outstanding shares of our common stock. If we issue any such additional shares, such issuance will reduce the proportionate ownership and voting power of all current stockholders. Further, such issuance may result in a change of control of our company.

Trading of our stock is restricted by the Securities Exchange Commission's penny stock regulations, which may limit a stockholder's ability to buy and sell our common stock.

The Securities and Exchange Commission has adopted regulations which generally define "penny stock" to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and "accredited investors". The term "accredited investor" refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the Securities and Exchange Commission, which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer's account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer's confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.

FINRA sales practice requirements may also limit a stockholder's ability to buy and sell our stock.

In addition to the "penny stock" rules described above, the Financial Industry Regulatory Authority ("FINRA") has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our stock.

The price of our common stock may be negatively impacted by factors that are unrelated to our operations.

Although our common stock is currently listed for quotation on the OTC Markets and a market is established and trading has begun, trading through the OTCQB is frequently thin and highly volatile. There is no assurance that a sufficient market will continue in our stock, in which case it could be difficult for stockholders to sell their stock. The market price of our common stock could fluctuate substantially due to a variety of factors, including market perception of our ability to achieve our planned growth, quarterly operating results of our competitors, trading volume in our common stock, changes in general conditions in the economy and the financial markets or other developments affecting our competitors or us. In addition, the stock market is subject to extreme price and volume fluctuations. This volatility has had a significant effect on the market price of securities issued by many companies for reasons unrelated to their operating performance and could have the same effect on our common stock.

We do not intend to pay dividends on any investment in the shares of stock of our company.

We have never paid any cash dividends, and currently do not intend to pay any dividends for the foreseeable future. Because we do not intend to declare dividends, any gain on an investment in our company will need to come through an increase in the stock's price. This may never happen, and investors may lose all of their investment in our company.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

We maintain our head office at 2075 Kennedy Rd, Suite 404, Toronto, ON M1T 3V3, Canada.

ITEM 3. LEGAL PROCEEDINGS

From time to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these, or other matters, may arise from time to time that may harm our business.

During the year ended December 31, 2017, the Company learned that a class action complaint (the “Class Action Complaint”) had been filed against the Company, its Chief Executive Officer and its Chief Financial Officer in the United States District Court for the District of New Jersey. The Class Action Complaint alleges, inter alia, that defendants violated the federal securities laws by, among other things, failing to disclose that the Company was engaged in an unlawful scheme to promote its stock. The Company has been served with the Class Action Complaint. The Company has analyzed the Class Action Complaint and, based on that analysis, has concluded that it is legally deficient and otherwise without merit. The Company intends to vigorously defend against these claims.

On August 7, 2018, the United States District Court for the District of New Jersey dismissed the Class Action Complaint. Additionally, subsequent to the year end on August 21, 2018, the Company was served with the Second Amended Complaint in the District of New Jersey. The Company filed a motion to dismiss the Second Amended Complaint on September 18, 2018. On January 23, 2019, the United States District Court for the District of New Jersey dismissed the Second Amended Complaint with prejudice. Plaintiff filed a motion for reconsideration of the dismissal order on February 7, 2019. On May 14, 2019, the Plaintiff’s motion to reconsider was denied. On June 10, 2019, the plaintiffs filed an appeal with United States Court of Appeals for the Third Circuit. As of May 27, 2020, the Class Action Complaints, including applicable appeals, have been settled or dismissed by the parties and the applicable courts.

Also during the year ended December 31, 2017, the Company learned that two derivative complaints (the “Derivative Complaints”) on behalf of the Company have been filed against the Company’s Directors and Chief Executive Officer, President, Corporate Secretary, and Chief Financial Officer, and nominally against the Company, in Nevada state and federal court. The state court action subsequently was removed to federal court. The Derivative Complaints allege, inter alia, that the Company’s officers and directors directed the Company to undertake an unlawful scheme to promote its stock. The Company has been served with the Derivative Complaints. The Company has analyzed them and, based on its analysis, has concluded that the Derivative Complaints are legally deficient and otherwise without merit. As of May 27, 2020, the Derivative Complaints, including applicable appeals, have been settled or dismissed by the parties and the applicable courts.

The Company was also served with a third derivative action, which was filed March 23, 2018, against the Company’s Directors and Chief Executive Officer, President, and Corporate Secretary, and nominally against the Company, in Nevada state court. Subsequently, this case was removed to federal court. As of May 27, 2020, the Derivative Complaint, including applicable appeals, have been settled or dismissed by the parties and the applicable courts.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

PART II

ITEM 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market for Our Common Stock

Since November 2016, our common stock has been quoted on the OTCQB, which is part of the OTC Market Group's quotation system. We were initially traded under the symbol "UVVC" but beginning in January 2017, our stock began trading under the symbol "ZPAS".

The following table sets forth, for the periods indicated, the high and low closing prices of our common stock. These prices reflect inter-dealer prices, without retail mark-up, mark-down or commission, and may not represent actual transactions.

		Closing Prices ⁽¹⁾
		High	Low
FISCAL YEAR ENDED DECEMBER 31, 2020:
Fourth Quarter	$	0.28	0.17
Third Quarter		0.36	0.246
Second Quarter		0.39	0.123
First Quarter		0.21	0.052

FISCAL YEAR ENDED DECEMBER 31, 2019:
Fourth Quarter	$	0.13	0.054
Third Quarter		0.15	0.058
Second Quarter		0.13	0.05
First Quarter		0.205	0.10

_________________

(1)

The above tables set forth the range of high and low closing prices per share of our common stock as per the OTC Markets.

Approximate Number of Holders of Our Common Stock

As of September 24, 2021, the Company had 155 active stockholders of record and 110,976,094 shares of common stock were issued and outstanding. Because some of our common stock is held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders.

Our registrar and transfer agent for our common stock is VStock Transfer. Their address is 18 Lafayette Place, Woodmere, NY 11598 and their telephone number and facsimile are +1 (646) 536-3179 and +1 (212) 828-8436, respectively.

Dividend Policy

The Company has not declared any dividends since incorporation and does not anticipate doing so in the foreseeable future. We currently intend to retain most, if not all, of our available funds and any future earnings to operate and expand our business.

Our board of directors has discretion on whether to pay dividends unless the distribution would render us unable to repay our debts as they become due. Even if our board of directors decides to pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that the board of directors may deem relevant.

Securities Authorized for Issuance Under Equity Compensation Plans

See Item 12 - Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters, "Securities Authorized for Issuance Under Equity Compensation Plans".

Recent Sales of Unregistered Securities

Recent Sales of Unregistered Securities

During January 2018, the Company completed a private placement for the sale of non-registered shares of the Company's common stock. As a result of the private placement 200,000 non-registered shares of the Company's common stock was issued for proceeds of $40,671.

During April 2018, the Company completed several private placements for the sale of non-registered shares of the Company's common stock. As a result of these private placements 687,500 non-registered shares of the Company's common stock was issued for proceeds of $39,672.

On April 11, 2018, the company issued 1,500,000 shares of the common stock to a corporation controlled by an officer of the company as compensation for services rendered, and on April 14, 2018, the company issued 1,000,000 shares of the common stock to a current officer of the company who at that time was an arm’s length consultant, as compensation for services rendered. The fair value of these shares was determined by using the market price of the common stock as at the date of issuance.

On September 10, 2018, the Company issued 8,370,000 shares of the common stock to various arm’s length third parties upon settlement of promissory notes.

On October 17, 2018, the Company issued 44,911,724 shares of the common stock in respect of the assets purchase from Virtublock Global Corp.

During the months of November and December 2018, the Company completed several private placements for the sale of non-registered shares of the Company's common stock. As a result of these private placements 5,450,000 non-registered shares of the Company's common stock was issued for proceeds of $399,483.

On January 20, 2019, the company issued 1,000,000 shares of the common stock to a consultant as compensation for services rendered, and on April 20, 2019, the company issued 500,000 shares of the common stock to a consultant as compensation for services rendered. The fair value of these shares was determined by using the market price of the common stock as at the date of issuance.

In May 2019, the Company completed several private placements for the sale of non-registered shares of the Company's common stock. As a result of these private placements 1,038,461 non-registered shares of the Company's common stock was issued for proceeds of C$135,000.

In July 2019, the Company completed a private placement for the sale of non-registered shares of the Company's common stock. As a result of the private placement 500,000 non-registered shares of the Company's common stock was issued for proceeds of C$55,000.

In August 2019, the Company completed a private placement for the sale of non-registered shares of the Company's common stock. As a result of the private placement 500,000 non-registered shares of the Company's common stock was issued for proceeds of $50,000.

In December 2019, the Company completed a private placement for the sale of non-registered shares of the Company's common stock. As a result of the private placement 757,575 non-registered shares of the Company's common stock was issued for proceeds of $39,041.

In January 2020, the Company issued 757,575 non-registered shares of the Company's common stock. The net proceeds in amount of $34,091 was received in December 31, 2019.

In January 2020, the Company completed a private placement for the sale of non-registered shares of the Company's common stock. As a result of the private placement 3,030,300 non-registered shares of the Company's common stock was issued for gross proceeds of $151,515.

In January 2020, the Company issued 3,319,162 shares of the common stock to settle a debt owed by the company in amount $265,533. The $265,533 debt was owed to a corporation controlled by a former Chief Executive Officer of the company. The fair value of these shares was determined by using the market price of the common stock as at the date of issuance.

In March 2020, the company issued 1,160,000 shares of the common stock to as compensation for services rendered. The fair value of these shares was determined by using the market price of the common stock as at the date of issuance.

In March 2020, the Company completed a private placement for the sale of non-registered shares of the Company's common stock. As a result of the private placement 300,000 non-registered shares of the Company's common stock will be issued for gross proceeds of $15,000.

In April 2020, the Company issued 2,000,000 shares of the common stock to as compensation for services. The fair value of these shares, in amount of $250,000, was determined by using the market price of the common stock as at the date of issuance.

In June 2020, the Company issued total of 551,394 non-registered shares of common stock for net proceeds in the amount of $137,002.

In August 2020, the Company issued total of 400,000 non-registered shares of common stock for net proceeds in the amount of $100,000.

In August 2020, the Company issued 2,000,000 shares of the common stock to as compensation for services rendered. The fair value of these shares, in the amount of $644,000, was determined by using the market price of the common stock as at the date of issuance.

In September 2020, the Company issued 4,000,000 shares of the common stock in respect of the assets purchase from Moxie Holdings Private Ltd.

In September 2020, the Company issued 20,656,715 shares of the common stock upon closing the share exchange agreement with Blockgration Global Corp. and its subsidiaries.

In October 2020, the Company issued 1,000,000 shares of common stock to as compensation for services. The fair value of these shares in the amount of $202,000 was determined by using the market price of the common stock as at the date of issuance.

Purchases of Our Equity Securities

No repurchases of our common stock were made during our fiscal year ended December 31, 2020.

ITEM 6. Selected financial data

Smaller reporting companies are not required to provide the information required by this item.

ITEM 7. Management's Discussion and Analysis of financial Condition and Results of Operations

The following management's discussion and analysis should be read in conjunction with our consolidated financial statements and the notes thereto and the other financial information appearing elsewhere in this annual report. In addition to historical information, the following discussion contains certain forward-looking information. See "Special Note Regarding Forward-Looking Statements" above for certain information concerning those forward looking statements. Our financial statements are prepared in U.S. dollars and in accordance with U.S. GAAP. References in this Report to a particular "fiscal" year are to our fiscal year ended on December 31.

Nature of Operations

Zoompass Holdings, Inc. formerly known as UVIC. Inc. ("Zoompass Holdings" or the "Company") was incorporated under the laws of the State of Nevada on August 21, 2013. Effective August 22, 2016, the Company entered into an Agreement for the Exchange of Stock (the "Agreement") with Zoompass, Inc., an Ontario, Canada corporation ("Zoompass"). Pursuant to the Agreement, the Company agreed to issue 8,050,784 shares of its restricted common stock to Zoompass' shareholders ("Zoompass' shareholders") in exchange for all the shares of Zoompass Inc. owned by the Zoompass Inc.'s Shareholders. At the Closing Date, Rob Lee, a significant shareholder of the Company agreed to cancel 7,000,000 shares of the Company's common stock, which shares constituted the control shares of the Company. Other than this one significant shareholder, shareholders of the Company held 2,670,000 shares. As a result of the Agreement, Zoompass is now a wholly owned subsidiary of the Company. The Company has amended its Articles of Incorporation to change its name to Zoompass Holdings, Inc. and the appropriate forms were filed with FINRA and the SEC to change its name, address and symbol and complete a 3.5-1 forward split, which was consented to by the majority of shareholders on September 7, 2016 and approved in February 2017, for shareholders of record on September 7, 2016.

During the first fiscal quarter of 2018, the Company implemented a plan to abandon the mobility solution operation. The Company has determined that the mobility solution operation represents a component and a reportable segment of the Company. According to the plan of abandonment, the Company gradually ceased accepting any new business during first fiscal quarter of 2018 and settled all the remaining orders and obligations from mobility solution by end of March 2018.

On October 17, 2018, the Company reached an Asset Purchase Agreement and purchased certain business assets that represents a business from Virtublock Global Corp. (“Virtublock”, “VGC”) in return the Company issued 44,911,724 shares to Virtublock and pursuant to the issuance of shares Virtublock ended up owning 45% of total outstanding common shares of the Company.

There is no certainty that the Company will be successful in generating sufficient cash flow from operations or achieving and maintaining profitable operations in the future to enable it to meet its obligations as they come due and consequently continue as a going concern. The Company will require additional financing in the future to fund its operations and it is currently working on securing this funding through corporate collaborations, public or private equity offerings or debt financings. Sales of additional equity securities by the Company would result in the dilution of the interests of existing shareholders. There can be no assurance that financing will be available when required.

The Company expects the forgoing, or a combination thereof, to meet the Company's anticipated cash requirements for the next 12 months; however, these conditions raise substantial doubt about the Company's ability to continue as a going concern.

These consolidated financial statements have been prepared on the basis that the Company will continue as a going concern, which presumes that it will be able to realize its assets and discharge its liabilities in the normal course of business as they come due. These consolidated financial statements do not reflect the adjustments to the carrying values of assets and liabilities and the reported expenses and consolidated statement of balance sheet classifications that would be necessary if the Company were unable to realize its assets and settle its liabilities as a going concern in the normal course of operations. Such adjustments could be material.

For the year ended December 31, 2020, the Company incurred a net loss of $19,214,889 (2019 - $ 615,256).

The Company may incur additional operating losses for the 2021 fiscal year.

Results of operations for the years ended December 31, 2020 and December 31, 2019

Revenue and cost of sales

During the year ended December 31, 2019, the Company has not generated revenue and incurred no cost of sales.

During the year ended December 31, 2020, the Company generated revenue of $872,465 and cost of sales of $665,881. On May 31, 2020, the Company completed acquisition of Blockgration Global Corp. (“BGC”) and its subsidiaries that was engaged in the business of digital wallet deployments, prepaid card platform, blockchain and mobile apps deployment. The total revenues and cost of sales also included revenue of $148,701 and cost of sales of $45,539 from Msewa Software Solutions (“MSS”) that was a 70% subsidiary of BGC and the agreement with MSS was terminated as of September 30, 2020.

General and administrative and other expenses

For the year ended December 31, 2020, the Company incurred $696,650 in salaries and consultant costs. For the year ended December 31, 2019, the Company incurred $266,433 in salaries and consultant costs. The increase was due to the increase of the Company’s headcount during the year 2020 as a result of the acquisition of BGC and its subsidiaries.

Share-based payment expense was $1,549,762 for the year ended December 31, 2020, compared with $227,000 for the year ended December 31, 2019. The increase was due to increased level of activity in 2020 and issuance of stock options and shares as compensation when compared with December 2019.

Insurance expense was $111,754 for the year ended December 31, 2020, compared with $NIL for the year ended December 31, 2019 due to premium on the directors and officers’ insurance policy.

Depreciation and amortization expenses from the tangible and intangible assets acquired from BGC and its subsidiaries was $437,128 for the year ended December 31, 2020 compared with $NIL for the year ended December 31, 2019.

For the year ended December 31, 2020 the Company incurred $200,637 in professional fees compared with $168,429 due to a reduction in legal costs during 2020.

Filing fees and regulatory costs were $43,877 for the year ended December 31, 2020 compared with $4,892 year ended December 31, 2019.

Bad debt expenses for the year ended December 31, 2020 was $330,886 from uncollectable receivables compared to $NIL for the year ended December 31, 2019.

Net Interest and bank charges for the year ended December 31, 2020 were $126,783 compared with $1,323 for the year ended December 31, 2019 as a result of interest accretion of $113,067 on long-term debt payable for the purchase of IP Technology asset in 2020.

For the year ended December 31, 2020, the Company incurred a net loss of $2,971,119 from operations compared with a net loss of $615,256 for 2019.

For year ended December 31, 2020, the impairment provision related to goodwill and intangible assets from the acquisition of BGC and its subsidiaries was $13,030,124 and $6,551,870 respectively compared to $NIL for the year ended December 31, 2019. The Company believes that the intangible assets have value and will be able to generate revenues, however due to the current economic downturn, management has taken a conservative approach to impair goodwill and intangible assets.

For the year ended December 31, 2020, the change in fair value of contingent consideration payable on acquisition of BGC and its subsidiaries was $387,356 and a gain of $3,574,368 was recognized on settlement of contingent consideration.

The loss per share from operations is 0.2073 and 0.006 for year ended December 31, 2020 and 2019 respectively.

Liquidity and Capital Resources

As at December 31, 2020, the Company had $64,412 in cash and cash equivalents compared with $21,477 as at December 31, 2019.

Operations for the year ended December 31, 2020 were primarily financed through the issuance of shares in the common stock of the Company and advances from related party corporations. Operations for the year ended December 2019 were primarily financed through the issuance of shares in the common stock of the Company, and the issuance of promissory notes.

There is no certainty that we will be successful in generating sufficient cash flow from operations or achieving and maintaining profitable operations in the future to enable us to meet our obligations as they come due and consequently continue as a going concern. The Company may require additional funds to further develop our expanded business plan. The Company may require additional financing this year to fund our operations and is examining possible sources of funding beyond the existing cash generated from operations. Sales of additional equity securities would result in the dilution of the interests of existing stockholders. There can be no assurance that financing will be available when required. In the event that the necessary additional financing is not obtained, the Company would reduce its discretionary overhead costs substantially, or otherwise curtail operations.

Net Cash Used in Operating Activities

During the years ended December 31, 2020 and 2019, $545,580 and $538,609 in cash, respectively, was used for operations.

Net Cash Used in Investing Activities

During the year ended December 31, 2019, the Company generated $nil from investing activities compared with cash used in investing activities of $114,153 for year ended December 31, 2020.

Net Cash Provided by Financing Activities

For the year ended December 31, 2020 the Company raised $883,715 from financing activities that included $388,586 from the issuance of shares of its common stock, proceeds from note payable and debt of $365,068 and $75,600 respectively.

For the year ended December 31, 2019 the Company raised $264,337 from the issuances of shares of its common stock and received advances in amount of $286,188 from related party corporations.

Commitments

There were no commitments as of December 31, 2020 and December 31, 2019.

Financial instruments and risk factors

The Company has exposure to liquidity risk and foreign currency risk. The Company's risk management objective is to preserve and redeploy the existing treasury as appropriate, ultimately to protect shareholder value. Risk management strategies, as discussed below, are designed and implemented to ensure the Company's risks and the related exposure are consistent with the business objectives and risk tolerance.

Liquidity Risk: Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they come due. The Company manages its liquidity by ensuring that there is sufficient capital to meet short and long-term business requirements, after taking into account cash requirements from operations and the Company's holdings of cash and cash equivalents. The Company also strives to maintain sufficient financial liquidity at all times in order to participate in investment opportunities as they arise, as well as to withstand sudden adverse changes in economic circumstances.

Management forecasts cash flows for its current and subsequent fiscal years to predict future financing requirements. Future requirements may be met through a combination of credit and access to capital markets. The Company's cash requirements are dependent on the level of operating activity, a large portion of which is discretionary. Should management decide to increase its operating activity, more funds than what is currently in place would be required. It is not possible to predict whether financing efforts will be successful or sufficient in the future. At December 31, 2020, the Company had $64,412 in cash and cash equivalents (December 31, 2019 - $21,477).

The following are the maturities, excluding interest payments, reflecting undiscounted future cash disbursements of the Company's financial liabilities based on the period year ended December 31, 2020.

	2021		2022

Accounts payable and accrued liabilities	$	1,843,780	$	—
Notes payable		530,896
Due to related party corporations		65,020
Long-term debt		353,498		762,147
	$	2,793,194	$	762,147

Currency risk: The Company's expenditures are incurred in Canadian and US dollars. The results of the Company's operations are subject to currency translation risk. The Company mitigates foreign exchange risk through forecasting its foreign currency denominated expenditures and maintaining an appropriate balance of cash in each currency to meet the expenditures. As the Company's reporting currency is the US dollar, fluctuations in US dollar will affect the results of the Company.

Credit risk: Credit risk is the risk of loss associated with a counterparty's inability to fulfill its payment obligations. As at December 31, 2020, the Company's credit risk is primarily attributable to cash and cash equivalents, and accounts receivable. At December 31, 2020, the Company's cash and cash equivalents were held with reputable Canadian chartered banks. At December 31, 2020, the Company had an allowance for doubtful accounts of $NIL (December 31, 2019 - $NIL) as a result of a review of collectability of the amount outstanding and the duration of time it was outstanding.

Interest rate risk: Interest rate risk is the risk borne by an interest-bearing asset or liability as a result of fluctuations in interest rates. Financial assets and financial liabilities with variable interest rates expose the Company to cash flow interest rate risk. The Company's does not have significant interest rate risk as the promissory note have been settled during the year.

Fair values: The carrying amounts reported in the consolidated balance sheet for cash and cash equivalents, accounts receivables, accounts payable and accrued liabilities approximate fair value because of the short period of time between the origination of such instruments and their expected realization.

Related Party Transactions

The balances of due to related party corporations on December 31, 2020 represent advances and payment from related party corporations which is non-interest bearing, unsecured and due on demand. The amount of $100,201 that is recorded as due to related parties as of December 31, 2019 are eliminated upon consolidation of these related parties in year 2020, pursuant to the acquisition transaction in 2020, became inter-company.

The due to related parties on December 31, 2020 of $65,020 (December 31, 2019 - $100,201) is comprised of $53,882 (December 31, 2019 $Nil) representing amount due to the company under significant influence of a shareholder of the Company. It also includes an amount of $11,138 (December 31, 2019 - $Nil) paid to a shareholder of the Company. These amounts were made to provide working capital and are due on demand and have no set repayment terms.

The total amount owing to the former directors and officers of the Company and corporations controlled by the former directors and officers, in relation to the services they provided to the Company in their capacity as Officers and service provider on December 31, 2020 was $54,436 (December 31, 2019 - $319,969) which includes expense reimbursements. This amount is reflected in accounts payable and is further described below.

As of December 31, 2020, the Company had an amount owing to an entity owned and controlled by the former Chief Executive Officer of the Company of $Nil (December 31, 2019 - $265,533). The amount owing relates to services provided by the former Chief Executive Officer and expense reimbursements. During the six months period ended June 30, 2020, the Company issued 3,319,162 shares of the common stock to settle a debt owed by the company in amount $265,533. The $265,533 debt was owed to a corporation controlled by a former Chief Executive Officer of the company. The fair value of these shares, in amount of 232,342, was determined by using the market price of the common stock as at the date of issuance. The Company recognized a Gain on settlement of debt in amount of $33,191 in statement of operations. (Note 10).

As of December 31, 2020, the Company had an amount owing to an entity owned and controlled by the former Secretary of the Company of $54,436 (December 31, 2019 - $54,436). The amount owing relates to services provided by the then Secretary and expense reimbursements.

During the year ended December 31, 2020, $982,176 (Issuance of shares for service – $838,400, stock options expenses - $143,776) was recognized for share-based payment expense to directors and officers of the Company. No expense for share based payments to directors and officers was recognized during the year ended December 31, 2019.

As of December 31, 2020, the Company had an amount owing to the Chief Executive Officer for $78,540 (December 31, 2019 - $Nil), included in Accounts payable and accrued liabilities. The amount owing relates to services provided and is recorded as consulting expenses.

As of December 31, 2020, the Company had an amount owing to the Chief Financial Officer for $30,909 (December 31, 2019 - $Nil), included in Accounts payable and accrued liabilities. The amount owing relates to services provided and is recorded as consulting expenses.

Subsequent events

In March 2021, the Company announced that its subsidiary, BGC, signed a strategic partnership agreement to provide Business-to Business (B2B) solutions. Under the terms of the agreement the Company will receive a one-time customization and implementation fee of US$350,000.

The payment of all the Notes payable amounts disclosed in the consolidated financial statements as of December 31, 2020 has been extended based on the same terms. Subsequent to December 31, 2020, the Company’s received an additional CD$30,000 from a shareholder for payment of operating expenses. The loan does not bear any interest and is unsecured.

Subsequent to December 31, 2020, the Company received CD$300,000 from a Convertible Debenture offering of 1,000 units. Each unit is comprised of one (1) debenture in the principal amount of CD$1,000 per unit with a term of three (3) years from the date of issuance and bearing interest at the rate of 12% per annum. The whole or any part of the principal amount of the Debenture plus any accrued and unpaid interest may be convertible at the option of the debenture holder into common shares of the Company at a price equal to US$0.20 per share at any time up to the maturity date. The right of conversion in the Debenture may be accelerated by the Company if the closing price of the Company’s common shares exceeds 200% of the Conversion price for a period of 20 trading days in a 30 day period at any time up to the maturity date as more specifically set out in the Debenture agreement.

Subsequent to the year ended December 31, 2020, the Company repaid a long-term debt due to Moxies, an amount of $353,498

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our investors.

Critical Accounting Policies

Basis of presentation

The consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission, in accordance with accounting principles generally accepted in the United States of America ("US GAAP"). The consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary to present a fair statement of the results for the year.

Translation of foreign currencies

The functional currency of the Company, PM and ZTI is the US dollar. The Company has determined that the functional currency of ZM, BGC and ZMG is the Canadian dollar. (references to which are denoted "C$"), for BSP and MSS is the Indian Rupees and for VO is the Euro. The reporting currency of the Company is US Dollar.

Transactions in currencies other than the functional currency are recorded at the rates of the exchange prevailing on dates of transactions. At each balance sheet reporting date, monetary assets and liabilities that are denominated in foreign currencies are translated at the rates prevailing at each reporting date. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated at the exchange rate at the historical date of the transaction. The impact from the translation of foreign currency denominated items are reflected in the statement of operations and comprehensive loss.

Translation of functional currencies to reporting currencies for assets and liabilities is done using the exchange rates at each balance sheet date; revenue and expenses are translated at average rates prevailing during the reporting period or at the date of the transaction; shareholders' equity is translated at historical rates. Adjustments resulting from translating the consolidated financial statements into the US Dollar are recorded as a separate component of accumulated other comprehensive income in the statement of changes in stockholders’ deficiency.

Revenue recognition

The Company's revenue recognition policy follows ASC 606, Revenue from Contracts with Customers, which provides guidance on the recognition, presentation and disclosure of revenue from contracts with customers in consolidated financial statements.

Revenue is measured based on the consideration specified in a contract with a customer. Once the Company determines a contract's performance obligations and the transaction price, including an estimate of any variable consideration, the Company allocates the transaction price to each performance obligation in the contract using a stand-alone selling price. The Company recognizes revenue when it satisfies a performance obligation by transferring control of a product or service to a customer. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities.

Nature of performance obligations

At contract inception, the Company assesses the services promised in the contract with a customer and identifies a performance obligation for each promise to transfer to the customer a service (or bundle of services) that is distinct. To identify the performance obligations, the Company considers all the services promised in the contract regardless of whether they are explicitly stated or implied.

The following is a description of the Company's principal revenue generating activities.

Revenue is principally derived from time basis billing for IT professional services provided to customers. Professional services in these contracts are primarily considered a single performance obligation. Revenue for these contracts is recognized over time for the amount which the Company has right to consideration. The Company also derived revenue from enabling various payment transactions which is recognized on a fixed fees per transaction basis at a point in time as services are rendered. Deferred revenue is recognized for transactions arising during the current reporting period when it receives consideration from a customer before achieving certain criteria that must be met for revenue to be recognized. Deferred revenue is a liability as of the reporting period related to revenue producing activity for which revenue has not yet been recognized.

Financial instruments

ASC Topic 820 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. Included in the ASC Topic 820 framework is a three level valuation inputs hierarchy with Level 1 being inputs and transactions that can be effectively fully observed by market participants spanning to Level 3 where estimates are unobservable by market participants outside of the Company and must be estimated using assumptions developed by the Company. The Company discloses the lowest level input significant to each category of asset or liability valued within the scope of ASC Topic 820 and the valuation method as exchange, income or use. The Company uses inputs which are as observable as possible and the methods most applicable to the specific situation of each company or valued item.

The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, cash in trust and customer deposits, accounts receivables and due from related party corporations, net of any allowances for doubtful accounts, accounts payable and accrued liabilities, promissory note, due to related party corporations, and client funds approximate fair value because of the short period of time between the origination of such instruments and their expected realization. The allowance for doubtful accounts is reflected in "Office and Sundry" expenses on the statement of operations and comprehensive loss. Per ASC Topic 820 framework these are considered Level 2 inputs where inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

The Company's policy is to recognize transfers into and out of Level 3 as of the date of the event or change in the circumstances that caused the transfer. There were no such transfers during the year.

Basic and diluted loss per share

Basic and diluted loss per share has been determined by dividing the net loss available to shareholders for the applicable period by the basic and diluted weighted average number of shares outstanding, respectively. The diluted weighted average number of shares outstanding is calculated as if all dilutive options had been exercised or vested at the later of the beginning of the reporting period or date of grant, using the treasury stock method.

Loss per common share is computed by dividing the net loss by the weighted average number of shares of common shares outstanding during the period. Common share equivalents, options and warrants are excluded from the computation of diluted loss per share when their effect as anti-dilutive.

Segment reporting

ASC 280-10, "Disclosures about Segments of an Enterprise and Related Information", establishes standards for the way that public business enterprises report information about operating segments in the Company's consolidated financial statements. Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Significantly all of the assets of the Company are located in, all revenues are currently earned in Canada and the Company’s research, development and strategical planning operations are carried out and served as an integral part of the Company’s business. The Company’s reportable segments and operating segments include rendering of professional services.

Cash and cash equivalents

Cash and cash equivalents include demand deposits held with banks and highly liquid investments with original maturities of ninety days or less at acquisition date. For purposes of reporting cash flows, the Company considers all cash accounts that are not subject to withdrawal restrictions or penalties to be cash and cash equivalents. Cash in trust and customer deposits are amounts held by the Company at various financial institutions for settlement of clients' funds payable.

Property and Equipment

Equipment is stated at historic cost. The Company has the following sub-categories of property and equipment with useful lives and depreciation methods as follows:

•

Office equipment and furniture – 20% declining balance per year

The cost of assets sold, retired, or otherwise disposed of and the related accumulated depreciation are eliminated from the accounts. Expenditures for maintenance and repairs are charged to expense as incurred.

The Company follows the ASC Topic 360, which requires that long-lived assets be reviewed annually for impairment whenever events or changes in circumstances indicate that the assets' carrying amounts may not be recoverable.

In performing the review for recoverability, if future undiscounted cash flows (excluding interest charges) from the use and ultimate disposition of the assets are less than their carrying values, an impairment loss represented by the difference between its fair value and carrying value, is recognized. When properties are classified as held for sale they are recorded at the lower of the carrying amount or the expected sales price less costs to sell.

Goodwill

Goodwill represents the excess purchase price over the estimated fair value of net assets acquired by the Company in business combinations. Business acquisitions are accounted for using the acquisition method whereby acquired assets and liabilities are recorded at fair value as of the date of acquisition with the excess of the acquisition amount over such fair value being recorded as goodwill and allocated to reporting units ("RU"). RUs are the smallest identifiable group of assets, liabilities and associated goodwill that generate cash inflows that are largely independent of the cash inflows from other assets or groups of assets. Given how the Company is structured and managed, the Company has one RU. Goodwill arises principally because of the following factors among other things: (1) the going concern value of the Company's capacity to sustain and grow revenues through securing additional contracts and customers,; (2) the undeserved market of consumers looking for financial transactional alternatives; (3) technological and mobile capabilities beyond acquired lines of business to capture buyer specific synergies arising upon a transaction and (4) the requirement to record a deferred tax liability for the difference between the assigned values and the tax bases of the assets acquired and liabilities assumed in a business combination, if any.

Intangibles

The Company has applied the provisions of ASC topic 350 – Intangibles – goodwill and other, in accounting for its intangible assets. Intangible assets subject to amortization are amortized on a straight-line method on the basis over the useful life of the respective intangibles. The following useful lives are used in the calculation of amortization:

Trademark – 8 years

Customer base – 5 years

Intellectual property/Technology – 10 years

Impairment goodwill and indefinite-lived intangible assets and intangible assets with definite lives

The Company accounts for goodwill and intangible assets in accordance with ASC No. 350, Intangibles-Goodwill and Other ("ASC 350"). ASC 350 requires that goodwill and other intangibles with indefinite lives be tested for impairment annually or on an interim basis if events or circumstances indicate that the fair value of an asset has decreased below its carrying value. In addition, ASC 350 requires that goodwill be tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis and between annual tests when circumstances indicate that the recoverability of the carrying amount of goodwill may be in doubt. Application of the goodwill impairment test requires judgment, including the identification of reporting units; assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value. Significant judgments required to estimate the fair value of reporting units include estimating future cash flows, determining appropriate discount rates and other assumptions. Changes in these estimates and assumptions or the occurrence of one or more confirming events in future periods could cause the actual results or outcomes to materially differ from such estimates and could also affect the determination of fair value and/or goodwill impairment at future reporting dates.

The Company assesses the carrying value of goodwill, indefinite-lived intangible assets and intangible assets with definite lives, such as Trademark, Technology platform, customer base and other intangible assets for potential impairment annually as of December 31, or more frequently if events or changes in circumstances indicate such assets might be impaired.

When assessing goodwill for impairment the Company elects to first perform a qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. If we do not perform a qualitative assessment, or if the qualitative assessment indicates it is more likely than not that the fair value of the reporting units, is less than its carrying amount, the Company performs a quantitative test. The Company recognizes an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized would not exceed the total amount of goodwill allocated to that reporting unit. The Company estimates fair value using the income approach, to estimate the future undiscounted cash flows (excluding interest charges) from the use and ultimate disposition of the assets.

Income taxes

Deferred tax is recognized using the asset and liability method, on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for tax purposes. However, the deferred tax is not recognized if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred taxes determined using tax rates (and laws) that have been enacted by the reporting date and are expected to apply when the related deferred taxation asset is realized, or the deferred taxation liability is settled. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.

A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

Share-based payment expense

The Company follows the fair value method of accounting for stock awards granted to employees, directors, officers and consultants. Share-based awards to employees are measured at the fair value of the related share-based awards. Share-based payments to others are valued based on the related services rendered or goods received or if this cannot be reliably measured, on the fair value of the instruments issued. Issuances of shares are valued using the fair value of the shares at the time of grant; issuances of warrants and other share-based awards are valued using the Black-Scholes model with assumptions based on historical experience and future expectations. All issuances of share-based payments have been fully-vested, otherwise the Company recognizes such awards over the vesting period based on expectations of the number of awards expected to vest over that period on a straight-line basis.

Business combinations

A business combination is a transaction or other event in which control over one or more businesses is obtained. A business is an integrated set of activities and assets that is capable of being conducted and managed for the purpose of providing a return in the form of dividends, lower costs or other economic benefits. A business consists of inputs and processes applied to those inputs that have the ability to create outputs that provide a return to the Company and its shareholders. A business need not include all of the inputs and processes that were used by the acquiree to produce outputs if the business can be integrated with the inputs and processes of the Company to continue to produce outputs. The Company considers several factors to determine whether the set of activities and assets is a business.

Business acquisitions are accounted for using the acquisition method whereby acquired assets and liabilities are recorded at fair value as of the date of acquisition with the excess of the purchase consideration over such fair value being recorded as goodwill and allocated to reporting units (“RUs”). If the fair value of the net assets acquired exceeds the purchase consideration, the difference is recognized immediately as a gain in the consolidated statement of operations. Acquisition related costs are expensed during the period in which they are incurred, except for the cost of debt or equity instruments issued in relation to the acquisition which is included in the carrying amount of the related instrument. Certain fair values may be estimated at the acquisition date pending confirmation or completion of the valuation process. Where provisional values are used in accounting for a business combination, they are adjusted retrospectively in subsequent periods. However, the measurement period will not exceed one year from the acquisition date. If the assets acquired are not a business, the transaction is accounted for as an asset acquisition.

Leases

The Company is the lessee in a lease contract when the Company obtains the right to use the asset. Operating leases are included in the line items right-of-use asset, lease obligation, current, and lease obligation, long-term in the consolidated balance sheet. Right-of-use (“ROU”) asset represents the Company’s right to use an underlying asset for the lease term and lease obligations represent the Company’s obligations to make lease payments arising from the lease, both of which are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. Leases with a lease term of 12 months or less at inception are not recorded on the consolidated balance sheet and are expensed on a straight-line basis over the lease term in our consolidated statement of income. The Company determines the lease term by agreement with lessor.

As our current operating lease of office space, at the commencement, has a term of less than 12 months, we elect not to apply the recognition requirements of ASC 842 to the short-term lease, instead lease payments are recognized in statement of operations on a straight-line basis over the lease term.

Use of estimates

The preparation of the consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

The areas where management has made significant judgments include, but are not limited to:

Accounting for acquisitions: The accounting for acquisitions requires judgement to determine if an acquisition meets the definition of a business combination under ASC 805. Further, management is required to use judgement to determine the fair value of the consideration provided and the net assets and liabilities acquired.

Assessment of Impairment: The Company has certain assets for which a determination of an impairment, if any, requires significant judgement to determine if the carrying amount of any assets are impaired. Management uses judgement in determining among other things, whether or not an indicator of impairment has occurred, future cash flows, time horizons, and likelihood of recoverability. The assets where management has assessed the recoverability the carrying amount includes accounts receivable, equipment, intangibles and goodwill.

Deferred taxes: The Company recognizes the deferred tax benefit related to deferred income tax assets to the extent recovery is probable. Assessing the recoverability of deferred income tax assets requires management to make significant estimates of future taxable profit and the income tax rate at which the future tax assets will be realized. To the extent that future cash flows, taxable profit and income tax rates differ significantly from estimates, the ability of the Company to realize deferred tax assets could be impacted. In addition, future changes in tax laws could limit the ability of the Company to obtain tax deductions in future periods from deferred income tax assets.

Share-based payment expense: The calculation of share-based payment expense requires management to use significant judgment in determining the fair value of share-based payment expense. Additionally, the management is required to make certain assumptions in arriving at the fair value of share-based payment expense.

Derivative financial instruments: The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks.

The Company reviews the terms of equity instruments and other financing arrangements, if any, to determine whether there are embedded derivative instruments, including embedded conversion options that are required to be bifurcated and accounted for separately as a derivative financial instrument. Also, in connection with the issuance of financing instruments, the Company may issue freestanding options or warrants to employees and non-employees in connection with consulting or other services. These options or warrants may, depending on their terms, be accounted for as derivative instrument liabilities, rather than as equity.

Derivative financial instruments are initially measured at their fair value. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income. To the extent that the initial fair values of the freestanding and/or bifurcated derivative instrument liabilities exceed the total proceeds received an immediate charge to income is recognized in order to initially record the derivative instrument liabilities at their fair value.

The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period. If reclassification is required, the fair value of the derivative instrument, as of the determination date, is reclassified. Any previous charges or credits to income for changes in the fair value of the derivative instrument are not reversed. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within twelve months of the balance sheet date.

NEWLY ADOPTED AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles (GAAP) to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The amendments are effective for all entities as of March 12, 2020 through December 31, 2022. We are currently evaluating the impact this guidance may have on our consolidated financial statements and related disclosures.

In June 2018, the FASB issued an accounting pronouncement (FASB ASU 2018-07) to expand the scope of ASC Topic 718, Compensation - Stock Compensation, to include share-based payment transactions for acquiring goods and services from nonemployees. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. The Company adopted this pronouncement and such adoption did not have a material impact on our financial position and/or results of operations.

On January 1, 2018, the Company adopted the accounting pronouncement issued by the Financial Accounting Standards Board (“FASB”) Accounting Standards Update No. 2014-09 (“ASU”), Revenue from Contracts with Customers (Topic 606) to clarify existing guidance on revenue recognition. This guidance includes the required steps to achieve the core principle that a company should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The Company adopted this pronouncement on a modified retrospective and such adoption did not have a material impact on our financial position and/or results of operations.

On January 1, 2018, the Company adopted the accounting pronouncement issued by the FASB to clarify how entities should present restricted cash and restricted cash equivalents in the statement of cash flows. This guidance requires entities to show changes in the total of cash, cash equivalents and restricted cash in the combined statement of cash flows. This guidance was adopted on a retrospective basis, and such adoption did not have a material impact on combined financial position and/or results of operations.

On January 1, 2019, the Company adopted Accounting Standards Codification Topic 842, “Leases” (“ASC 842”) to replace existing lease accounting guidance. This pronouncement is intended to provide enhanced transparency and comparability by requiring lessees to record right-of-use assets and corresponding lease liabilities on the balance sheet for most leases. Expenses associated with leases will continue to be recognized in a manner similar to previous accounting guidance. The Company adopted ASC 842 utilizing the transition practical expedient added by the Financial Accounting Standards Board (“FASB”), which eliminates the requirement that entities apply the new lease standard to the comparative periods presented in the year of adoption. The Company is the lessee in a lease contract when the Company obtains the right to use the asset. Operating leases are included in the line items right-of-use asset, lease obligation, current, and lease obligation, long-term in the consolidated balance sheet. Right-of-use (“ROU”) asset represents the Company’s right to use an underlying asset for the lease term and lease obligations represent the Company’s obligations to make lease payments arising from the lease, both of which are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. Leases with a lease term of 12 months or less at inception are not recorded on the consolidated balance sheet and are expensed on a straight-line basis over the lease term in our consolidated statement of income. The Company determines the lease term by agreement with lessor. As our current operating lease of office space, at the commencement, has a term of less than 12 months, we elect not to apply the recognition requirements of ASC 842 to the short-term lease, instead lease payments are recognized in statement of operations on a straight-line basis over the lease term.

ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk

The follow discussion about our market risk disclosures involves forward-looking statements. Actual results could differ from those projected in the forward-looking statements. We are exposed to market risk related to changes in interest rates and foreign currency exchange rates. We do not use derivative financial instruments for speculative or trading purposes.

Financial instruments and risk factors

	2021		2022 and after

Accounts payable and accrued liabilities	$	1,843,780	$	—
Notes payable		530,896
Due to related party corporations		65,020
Long-term debt		353,498		762,147
	$	2,793,194	$	762,147

Currency risk: The Company's expenditures are incurred in Canadian and US dollars. The results of the Company's operations are subject to currency translation risk. The Company mitigates foreign exchange risk through forecasting its foreign currency denominated expenditures and maintaining an appropriate balance of cash in each currency to meet the expenditures. As the Company's reporting currency is the US dollar, fluctuations in US dollar will affect the results of the Company.

Credit risk: Credit risk is the risk of loss associated with a counterparty's inability to fulfill its payment obligations. As at December 31, 2020, the Company's credit risk is primarily attributable to cash and cash equivalents, and accounts receivable. At December 31, 2020, the Company's cash and cash equivalents were held with reputable Canadian chartered banks. At December 31, 2020, the Company had an allowance for doubtful accounts of $NIL (December 31, 2019 - $NIL) as a result of a review of collectability of the amount outstanding and the duration of time it was outstanding.

Interest rate risk: Interest rate risk is the risk borne by an interest-bearing asset or liability as a result of fluctuations in interest rates. Financial assets and financial liabilities with variable interest rates expose the Company to cash flow interest rate risk. The Company's does not have significant interest rate risk as the promissory note have been settled during the year.

Fair values: The carrying amounts reported in the consolidated balance sheet for cash and cash equivalents, accounts receivables, accounts payable and accrued liabilities approximate fair value because of the short period of time between the origination of such instruments and their expected realization.

ITEM 8 Financial Statements and Supplementary Data

Consolidated Financial Statements

The financial statements required by this item begin on page F-1 hereof.

ITEM 9 Changes in and Disagreements with Accountants and Accounting and Financial Disclosure

On November 10, 2016, our board of directors approved the engagement of MNP, LLP ("MNP"), as the Company's new independent registered public accounting firm.

On June 19, 2019, our board of directors approved the engagement of SRCO Professional Corporation ("SRCO"), as the Company's new independent registered public accounting firm.

During the fiscal years ended December 31, 2014 and 2015, and the subsequent interim period prior to the engagement of MNP, the Company has not consulted MNP regarding (i) the application of accounting principles to any specified transaction, either completed or proposed; (ii) the type of audit opinion that might be rendered on the Company's financial statements, and either a written report was provided to the registrant or oral advice was provided that the new accountant concluded was an important factor considered by the registrant in reaching a decision as to the accounting, auditing or financial reporting issue; or (iii) any matter that was either the subject of a disagreement (as defined in Item 304(o)(1)(iv)) or a reportable event (as defined in Item 304(a)(1)(v)).

ITEM 9A Controls and Procedures

Our management is responsible for establishing and maintaining a system of disclosure controls and procedures designed to ensure that information required to be disclosed by us in the reports it files or submitted under the Securities Exchange Act of 1934, as amended (Exchange Act), is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC. Our disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports it files or submitted under the Exchange Act is accumulated and communicated to management, including the principal executive officer and principal financial officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Because of inherent limitations, disclosure controls and procedures, as well as internal control over financial reporting, may not prevent or detect all inaccurate statements or omissions.

Our management, with the supervision and participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act"). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of December 31, 2020, were effective such that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and (ii) accumulated and communicated to our management to allow timely decisions regarding disclosure. A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

Inherent Limitations Over Internal Controls

Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles ("GAAP"). Our internal control over financial reporting includes those policies and procedures that:

(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and

(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.

Management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our internal controls will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of internal controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Also, any evaluation of the effectiveness of controls in future periods are subject to the risk that those internal controls may become inadequate because of changes in business conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management's Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Management conducted an assessment of the effectiveness of the Company's internal control over financial reporting based on the criteria set forth in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 framework). Based on the Company's assessment, management has concluded that its internal control over financial reporting was ineffective as of December 31, 2020, to provide e reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP.

We have assessed the effectiveness of our internal control over financial reporting as of December 31, 2020, the period covered by this Annual Report on Form 10-K, as discussed above. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework. Based upon this evaluation, our chief executive officer and chief financial officer concluded that our internal control over financial reporting as of the end of December 31, 2020, were ineffective due to the following: lack of segregation of duties, due to limited administrative and financial personnel and related resources.

Changes In Internal Control Over Financial Reporting

During the year ended December 31, 2020, there were no changes in our internal controls over financial reporting that materially affected, or is reasonably likely to have a materially affect, on our internal control over financial reporting.

Item 9B. Other Information

None.

Where You Can Find More Information

We file annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). Our Commission filings are available to the public over the Internet at the Commission's website at http://www.sec.gov. The public may also read and copy any document we file with the Commission at its Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549, on official business days during the hours of 10:00 am to 3:00 pm. The public may obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. We maintain a website at http://www. yappn.com (which website is expressly not incorporated by reference into this filing). Information contained on our website is not part of this report on Form 10-K.

PART III

ITEM 10 Directors, Executive Officers and Corporate Governance

Directors and Executive Officers

The following table sets forth the names, ages and positions held with respect to each Director and Executive Officer of the Company as of the date of this Annual Report.

Name	Age	Position	Appointed/Elected

Emanuel (Manny) Bettencourt		Director and Chief Executive Officer	March 1, 2020
Steven Roberts		Director	November 2019
Mahendra Naik		Director	March 1, 2020
Shibu Abraham		Chief Financial Officer	June 3, 2020
Bharat Vivek		Chief Operating Officer, Blockchain	July 16, 2020
Pankaj Kumar**		Chief Operating Officer, Payment Technologies	July 16, 2020

**Mr. Kumar has resigned as Chief Operating Officer of the Company effective July 26, 2021.

The former officers and directors for the period ended December 31, 2020 were as follows:

Name	Age	Position	Appointed/ Elected	Served till

Roger Charles Connors		Director	December 2018	October 2019
Mahmoud Hashem		Director and Chief Executive Officer	September 2018	November 2019
Manish Grigo		Director and Chief Financial Officer	July 2019	November 2019

Each Director serves until the next annual stockholders meeting and until their respective successors are duly elected and qualified or earlier resignation or removal.

Mr. Bettencourt has been the Chairman & CEO of Sensor Technologies Inc. since December 2019. He has also been the Executive Chairman of W2E technology Corp. since January 2018, and Managing Director of First Principles Group Inc. since May 2002. From January 2018 until November 2018, Mr. Bettencourt was CEO and CO-Founder of Demand Power Group Inc. Mr. Bettencourt is a graduate of the University of Toronto at Mississauga (B.COMM 1995) and holds both a CPA, CA designation.

Mr. Roberts has been the CEO of Epic NRG LLC from 2018 to present. He served as President for Zoompass Inc. from September 2016 through September 2018. From December 2013 through 2016, Mr. Roberts was the Vice President of Mobility for Ingram Micro. Mr. Roberts earned his Bachelors of Arts Degree in 1991 from the University of Guelph, in Guelph, Ontario.

Mr. Naik has been Director of IAMGOLD Corporation, a TSX and NYSE listed company from 1990 to present. Since 2006, Mr. Naik has been Chairman and Director of Fortune Minerals Limited, a TSX listed company. From 2003 to date, Mr. Naik has been a Director of Goldmoney Inc, a TSX listed financial services company specializing in precious metals. From 2012 to 2017, Mr. Naik was a Director of FirstGlobal Data Limited. Mr. Naik earned his Bachelor of Commerce Degree in 1981 from University of Toronto and holds a CPA, CA designation.

Mr. Hashem Founded . in July 2018 and has served as the Chief Executive Officer since inception. Mr. Hashem also founded ZeroWire Group in January 2009 and has served Managing Director since inception. Mr. Hashem graduated from Ain Shams University in July 1996 with a Bachelor of Engineering - Electronics & Communication Department, Cairo, Egypt.

Mr. Grigo has spent over ten years as a Technology Analyst with various boutique investment banking firms in Toronto; where he covered a wide range of technology sectors ranging from Gaming, FinTech and Telcos. Since 2017 he has been working as an independent consultant and advising companies on their capital markets strategies. Mr. Hashem on behalf of the board appointed Mr. Grigo as a Director effective July 25, 2019.

Mr. Connors has been the President and Director of Southern Sky Resources Corp. in Toronto, Canada since 2011. Mr. Connors earned a Bachelor of Business Administration from Acadia University in Wolfville, Canada in 1992. Mr. Connors resigned as Director effective October 15, 2019.

Mr. Abraham has over 20 years of experience in senior management and leadership skills combined with in-depth Canadian and US regulatory and technical accounting knowledge. He was most recently head of Shibu Abraham Professional Corporation and prior to that he was partner at Abraham Chan LLP. He is a Chartered Professional Accountant in Canada, Chartered Accountant in India and Certified Public Accountant is the USA (Illinois).

Mr. Vivek is currently CEO of Blockline Solutions Private Limited and has been in this role since the inception of the company. Prior to that he served in various roles culminating in Engagement Manager with PwC (2012 to 2019). Mr. Vivek is an accomplished business leader and entrepreneur with more than 15 years of experience in the financial services, payment, retail, healthcare, telecom, energy and utilities sector. He also serves as CEO of Moxie Holdings Private Ltd., which manages technology focused companies in various sectors. Mr. Vivek earned his Master of Business Administration from York University, Schulich School of Business in Toronto in 2012.

Mr. Kumar is an experienced and successful business founder with a demonstrated history of working in the financial services and technology industry. Mr. Kumar is the CEO of MSS Payments since June 2014, a company that deploys digital payment platforms for financial institutions, remittance companies and NBFC’s. Mr. Kumar earned his MBA from the James Cook University in Australia in 2008.

Family Relationships

There are no family relationships between any directors or officers of the Company.

Involvement in Certain Legal Proceedings

To the best of our knowledge, none of our directors or executive officers has, during the past ten years:

1. had any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; except for (i) Mr Bettencourt served as CFO of Distinct Infrastructure Group Inc. between Aug 2015 and December 2017; subsequent to his departure the company was placed into receivership in March 2019 ;

2. been convicted in a criminal proceeding or is a named subject to a pending criminal (excluding traffic violations and other minor offenses);

3. been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities, futures, commodities or banking activities; or

4. been found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.

Compliance with Section 16(a) of the Exchange Act

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our executive officers, directors and beneficial owner of more than 10% of a registered class of our equity securities to file with the Securities and Exchange Commission statements of ownership and changes in ownership. The same persons are required to furnish us with copies of all Section 16(a) forms they file. We believe that, during fiscal 2020, all of our executive officers, directors and beneficial owner of more than 10% of a registered class of our equity securities complied with the applicable filing requirements.

In making these statements, we have relied upon examination of the copies of all Section 16(a) forms provided to us and the written representations of our executive officers, directors and beneficial owner of more than 10% of a registered class of our equity securities.

Code of Business Conduct and Ethics

A Code of Business Conduct and Ethics is a written standard designed to deter wrongdoing and to promote (a) honest and ethical conduct, (b) full, fair, accurate, timely and understandable disclosure in regulatory filings and public statements, (c) compliance with applicable laws, rules and regulations, (d) prompt reporting of violations of the code to an appropriate person and (e) accountability for adherence to the Code. We are not currently subject to any law, rule or regulation requiring that we adopt a Code of Business Conduct and Ethics. However, the Company is in the process of preparing a code of business conduct and ethics policy during 2021.

Committees of Board of Directors

There are currently no committees of the Board of Directors. Our board of directors is of the view that it is appropriate for us not to have a standing nominating, audit or compensation committee because the current size of our board of directors does not facilitate the establishment of a separate committee. Our board of directors has performed, and will perform adequately, the functions of any specific committee.

Board Oversight of Risk

Our Board of Directors recognizes that, although risk management is a primary responsibility of the Company's management, the Board plays a critical role in oversight of risk. The Board, in order to more specifically carry out this responsibility, has assigned certain task focusing on reviewing different areas including strategic, operational, financial and reporting, compensation, compliance, corporate governance and other risks to the relevant Board Committees as summarized above. Each Committee then reports to the full Board ensuring the Board's full involvement in carrying out its responsibility for risk management.

ITEM 11. EXECUTIVE COMPENSATION

Persons Covered

As of December 31, 2020, there was the following Named Executive Officers:

Name		Position
Emanuel (Manny) Bettencourt		Director and Chief Executive Officer
Shibu Abraham		Chief Financial Officer
Bharat Vivek		Chief Operating Officer, Blockchain
Pankaj Kumar		Chief Operating Officer, Payment Technologies

Compensation Discussion and Analysis

Overview

The Company's executive compensation program is generally designed to align the interests of executives with the interests of shareholders and to reward executives for achieving the Company's objectives. The executive compensation program is also designed to attract and retain the services of qualified executives.

The Board of Directors shall determine all compensation packages.

Executive compensation generally consists of base salary or fees, bonuses and long-term incentive equity compensation such as stock grants or additional options to purchase shares of the Company's common stock as well as various health and welfare benefits. The Board has determined that both the base salary or fees and long-term incentive equity compensation should be the principal component of executive compensation. The Board has not adopted a formal bonus plan, and all bonuses are discretionary.

Elements of Compensation

The executive compensation for the Named Executive Officers) for the period ended December 31, 2019, primarily consisted of base salary or fees, long term incentive equity compensation, and other compensation and benefit programs generally available to other employees,

Base Salary. The Board establishes base salaries or fees for the Company's Named Executive Officers based on the scope of their responsibilities, taking into account competitive market compensation paid by other companies in the Company's peer group for similar positions. Generally, the Board believes that executive base salaries or fees should be in-line with similar responsibilities at comparable companies in line with our compensation philosophy.

Base salaries are reviewed annually, and may be adjusted to realign salaries with market levels after taking into account individual responsibilities, performance and experience.

Bonuses. Bonuses are intended to compensate the Named Executive Officers for achieving the Company's financial performance and other objectives established by the Board each year. The Board currently does not adopt a formal bonus plan and all bonuses are discretionary.

Long-Term Incentive Equity Compensation. The Board believes that stock-based awards promote the long-term growth and profitability of the Company by providing executive officers with incentives to improve shareholder value and contribute to the success of the Company and by enabling the Company to attract, retain and reward the best available persons for executive officer positions. The Named Executive Officers were eligible to receive certain number of shares of common stock of the Company. The Company cannot currently determine the number or type of additional awards that may be granted to eligible participants under the long-term incentive equity compensation plan in the future. Such determination will be made from time to time by the Board.

Change-In-Control and Termination Arrangements. The Company is in the process of formalizing Change-In-Control and Termination Arrangements that would be consistent with all officers of the Company.

Summary Compensation Table

The following table sets forth information concerning all compensation awarded to, earned by or paid during fiscal years 2020 and 2019, to the Named Executive Officers:

Name	Principal position	Year	Salary or fees	Bonus	Deferred stock Units/ shares⁽⁸⁾	Option awards	Total

Emanuel (Manny) Bettencourt⁽¹⁾	Chief Executive Officer	2020	$78,540	Nil	$636,400	$19,131	$734,071
		2019	Nil	Nil	Nil	Nil	Nil

Mahmoud Hashem⁽²⁾	Chief Executive Officer	2020	Nil	Nil	Nil	Nil	Nil
		2019	$19,158	Nil	Nil	Nil	$19,158

Nayeem Saleem Alli⁽³⁾	Chief Executive Officer	2020	Nil	Nil	Nil	Nil	Nil
		2019	$21,101	Nil	Nil	Nil	$21,101

Steve Roberts⁽⁴⁾	Chief Executive Officer	2020	$26,460	Nil	Nil	$55,272	$81,732
		2019	$2,412	Nil	Nil	Nil	$2,412

Shibu Abraham⁽⁵⁾	Chief Financial Officer	2020	$30,909	Nil	$202,000	$14,102	$247,011
		2019	Nil	Nil	Nil	Nil	Nil

Manish Grigo⁽⁶⁾	Chief Financial Officer	2020	Nil	Nil	Nil	Nil	Nil
		2019	$2,668	Nil	Nil	Nil	$2,668

(1)

Emanuel (Manny) Bettencourt joined the Company as Director and CEO on March 1, 2020. Under his consulting agreement Mr. Bettencourt was compensated Cdn$10,000 per month plus certain travel related expenses as required by his duties as CEO. As at December 31, 2020, the fees noted above remain unpaid.

(2)

Mahmoud Hashem joined the Company as COO in September 2018 and in December 2018 was appointed as CEO. Under his consulting agreement Mr. Hashem was compensated Cdn$15,000 per month plus certain travel related expenses as required by his duties as President. Mr. Hashem resigned from the Company in November 2019.

(3)

Nayeem Alli became CEO in September 2018 and resigned effective December 12, 2018. Mr. Alli resigned from the Company in December 2018.

(4)

Steve Roberts joined the Company as President in September 2016. Under his employment agreement Mr. Roberts was compensated Cdn$10,000 per month plus certain travel related expenses as required by his duties as President. Effective January 2017, this was increased to Cdn$15,000 per month. In September 2018 Mr. Roberts resigned from the Company. In November 2019, Mr. Roberts was appointed became CEO of the company with compensation of Cdn$10,000 per month. He resigned as CEO on March 1, 2020.

(5)

(6)

Shibu Abraham joined as Chief Financial Officer in May 2020. Under his employment agreement Mr. Abraham was compensated Cdn$5,000 per month. As at December 31, 2020, the fees noted above remain unpaid.

Manish Grigo joined as Chief Financial Officer in September 2018. For 2018, fees were paid to a company owned and controlled by Manish Grigo for the time incurred. Effective January 2019, Mr. Grigo earned a salary of Cdn $7,000 per month. Mr. Grigo resigned from the Company in November 2019.

(7)

As required by SEC rules, amounts in the column "Stock Awards" present the aggregate grant date fair value of awards made each year computed in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification™ 718 Compensation—Stock Compensation ("FASB ASC 718"). The grant date fair value of each of the executives' award is measured based on the closing price of our common stock on the date of grant. These amounts do not reflect whether the recipient has actually realized or will realize a financial benefit from the awards. Under generally accepted accounting principles, compensation expense with respect to stock awards granted to our employees, executives and directors is generally recognized over the requisite services period. The SEC's disclosure rules previously required that we present stock award information based on the amount recognized during the corresponding year for financial statement reporting purposes with respect to these awards. However, the recent changes in the SEC's disclosure rules require that we now present stock award amounts using the grant date fair value of the awards granted during the corresponding year.

Outstanding Equity Awards as of December 31, 2020

Outstanding stock options granted to Named Executive Officers ("NEO's") and Directors as at December 31, 2020 are as follows:

Name	Type of instrument	No. of securities underlying unexercised instrument available		No. of securities underlying unexercised instrument exercisable		Exercise price⁽¹⁾		Expiration date
Steven Roberts	Options		2,000,000		611,150		0.10	3/1/2027
Emanuel (Manny) Bettencourt	Options		1,000,000		333,352		0.10	1/15/2027
Mahendra Naik	Options		1,000,000		277,798		0.10	3/1/2027
Shibu Abraham	Options		1,000,000		83,359		0.20	10/22/2027

_____________

(1) In US dollars

(2) No fees were paid to directors during the year.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Securities Authorized for Issuance Under Equity Compensation Plans

In December 2018, the Company's Board of Directors approved and the majority of shareholders consented to the adoption of an equity-based compensation plan. The total instruments convertible into common stock of the Company cannot exceed 20,000,000 options to purchase shares at any one point in time. The maximum awards to any one grantee is subject to certain restrictions.

On December 14, 2018, the Company issued 5,400,000 stock options to directors, officers, employees and consultants of the Company and have a life of five years from date of grant. All of them vest immediately and must be exercised by the recipient.

During year ended December 31, 2019 the Company cancelled the 5,400,000 stock options issued on December 14, 2018.

On October 22, 2020, the Company granted 1,000,000 common stock purchase options at an exercise price of $0.20 to an Officer of the Company. 27,805 of these options vested immediately and are exercisable for seven years from the grant date. Remaining options were exercisable for seven years from the grant date at an exercise price of $0.20 and would vest ratably over a three-year period from the date of grant.

Security Ownership of Certain Beneficial Owners and Management

The following tables set forth information as of September 24, 2021, regarding the beneficial ownership of our common stock (a) by each stockholder who is known by the Company to own beneficially in excess of 5% of our outstanding common stock; (b) by each of the Company's officers and directors; (c) and by the Company's officers and directors as a group. Except as otherwise indicated, all persons listed below have (i) sole voting power and investment power with respect to their shares of common stock, except to the extent that authority is shared by spouses under applicable law, and (ii) record and beneficial ownership with respect to their shares of stock. Unless otherwise identified, the address of the directors and officers of the Company listed above is 2455 Cawthra Rd, Unit 75 Mississauga, Ontario Canada, L5A3P1.

Title of Class	Name of Beneficial Owner	Office, if any	Amount of shares controlled		Percent of class
Common Stock	2425287 Ontario Inc.			6,335,612		5.71	%
Common Stock	Jose Nieves			5,650,000		5.098	%
Common Stock	Rob Lee			11,773,368		10.62	%

⁽¹⁾ Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities

Changes in Control

There are no arrangements known to us, including any pledge by any person of our securities, the operation of which may at a subsequent date result in a change in control of the Company.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

Other than as noted in Section 11 and mentioned in other items in the form, there are no related party transactions.

Promoters and Certain Control Persons

We did not have any promoters at any time during the past five fiscal years.

Our executive officers and directors from time to time may serve on the board of directors executive officers of other companies. However, none of our executive officer or directors serve as executive officers or directors or on the compensation committee of another company that has any executive officer serving on our Board of Directors (or Board of Directors acting as the Compensation Committee).

No person who served on our Board of Directors (or Board of Directors acting as the Compensation Committee) had any relationship requiring disclosure under Item 404 of Regulation S-K.

Director Independence

Steven Roberts and Mahendra Naik was deemed to be an "independent director", as that term is defined by the listing standards of the national exchanges and SEC rules during the period ended December 31, 2020.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

SRCO Professional Corporation is our Principal Independent Registered Public Accountants engaged to audit our financial statements for the period ended December 31, 2020. The following table shows the fees that we paid or accrued for the audit for the year ended December 31, 2020 and December 31, 2019.

Fee Category	December 31, 2020		December 31, 2019
Audit Fees and quarterly review	$	85,000	$	60,000
Audit-Related Fees	$	—	$	—
Tax Fees	$	—	$	—
All Other Fees	$	—	$	—

Audit Fees

This category consists of fees for professional services rendered by our principal independent registered public accountant for the audit of our annual financial statements, review of financial statements included in our quarterly reports and services that are normally provided by the independent registered public accounting firms in connection with statutory and regulatory filings or engagements for those fiscal years.

Audit-Related Fees

This category consists of fees for assurance and related services by our principal independent registered public accountant that are reasonably related to the performance of the audit or review of our financial statements and are not reported above under "Audit Fees". The services for the fees disclosed under this category include consultations concerning financial accounting and reporting standards.

Tax Fees

This category consists of fees for professional services rendered by our principal independent registered public accountant for tax compliance, tax advice, and tax planning.

All Other Fees

This category consists of fees for services provided by our principal independent registered public accountant other than the services described above.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

The following exhibits are filed as part of this Form 10-K:

Exhibit No.		Description

31.1		Certifications of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certifications of Principal Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Certifications of Principal Executive Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certifications of Principal Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		XBRL Taxonomy Extension Label Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on September 24, 2021.

		ZOOMPASS HOLDINGS, INC.
September 24, 2021		By: /s/ Emanuel (Manny) Bettencourt
		Emanuel (Manny) Bettencourt Chief Executive Officer

		By: Emanuel (Manny) Bettencourt
		Emanuel (Manny) Bettencourt Chief Financial Officer

ZOOMPASS HOLDINGS INC.

Consolidated Financial Statements

Year Ended December 31, 2020 and 2019

(Expressed in US Dollars)

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Zoompass Holdings, Inc.:

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Zoompass Holdings, Inc. and subsidiaries (the “Company”) as of December 31, 2020 and 2019, and the related consolidated statements of operations and comprehensive loss, stockholders’ deficiency, and cash flows for each of the years in the two year-period ended December 31, 2020, and the related notes (collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the years in the two year-period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America (US GAAP).

Material Uncertainty Related to Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has incurred recurring losses from operations and has a net working capital deficiency and an accumulated deficit that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

F-1

Business Combination

Description of the Critical Audit Matter

Auditing business combination was complex and highly judgmental due to the justification of business and significant estimation required to determine the fair value of assets acquired / liabilities assumed, the purchase consideration conveyed and the resulting goodwill recognized, and the significant judgment by management when estimating the fair value of the acquisition related contingent consideration liability.

How the Critical Audit Matter Was Addressed in the Audit

To audit the accounting of the business combination transactions, we evaluated the justification of business acquisition from management to ensure the compliance with U.S. GAAP; and we reviewed the fair value calculation of assets acquired / liabilities assumed, the purchase consideration conveyed and the resulting goodwill recognized to agreements and valuation expert’s report that included methodology and assumptions used and assessed those inputs to be reasonable, testing management’s process for determining the fair value of the acquisition related contingent consideration liability, and testing the completeness and accuracy of the underlying data used in the fair value calculation.

Impairment of Intangible Assets and Goodwill

Description of the Critical Audit Matter

As discussed in Note 5 to the consolidated financial statements, the Company recorded impairment charges on goodwill and intangible assets during the year ended December 31, 2020.

Auditing management's goodwill and intangible assets impairment test was complex and highly judgmental due to the significant estimation required to determine the fair value of the goodwill and intangible assets and underlying reporting unit. In particular, the fair value estimate was sensitive to significant assumptions, such as the Company’s financial forecast, discount rate, and operating costs, which are impacted by expectations about future market and economic conditions.

How the Critical Audit Matter Was Addressed in the Audit

To test the estimated fair value of the Company’s goodwill and intangible assets and underlying reporting unit, we performed audit procedures that included, among other things, assessing methodologies and testing the significant assumptions discussed above and the underlying data used by the Company in its analysis. In addition, we assessed the current financial forecast in light of management’s current plans, and we assessed the historical basis of management’s estimates based on its current operating results that would result from changes in the assumptions.

Deemed disposition of a partially owned subsidiary

Description of the Critical Audit Matter

As discussed in Note 14 to the consolidated financial statements, effective September 30, 2020, the Company terminated the acquisition agreement as management lost control over the operations of MSS. Pursuant to the deemed disposition, the Company deconsolidated the subsidiary as of that date.

Auditing disposition of a partially owned subsidiary was complex due to the significant estimation of fair value of assets and liabilities disposed, the accrued liabilities resulted from disposition, justification of loss of control and consideration of the disposition.

How the Critical Audit Matter Was Addressed in the Audit

To audit the accounting of the disposition of partially owned subsidiary, we evaluated management’s assessment of loss of control, accounting for disposition in accordance with U.S. GAAP; we verified the fair value of assets and liabilities disposed, the consideration of disposition, the resulting impact on income statement, the accrued liabilities resulting from the disposition, and the cancellation of equity instruments and the adjusted contingent consideration liability.

We have served as the Company’s auditor since 2018

Richmond Hill, Ontario, Canada

September 24, 2021

/s/ SRCO Professional Corporation

CHARTERED PROFESSIONAL ACCOUNTANTS

Authorized to practice public accounting by the

Chartered Professional Accountants of Ontario

F-2

Zoompass Holdings Inc.
Consolidated Balance Sheets
(Expressed in US Dollars)

			December 31,			December 31,
As At,	Note		2020			2019
ASSETS
Current assets
Cash and cash equivalents			$	64,412		$	21,477
Accounts receivable				467,383			—
Other current assets				35,179			10,563
Total current assets				566,974			32,040
Non-current assets
Equipment, net		4		7,407			—
Goodwill		3		—			—
Intangible assets, net		5		—			—
Right-of-use asset, net		6		25,402			—
Deposit				1,878			—
Total non-current assets				34,687			—
Total assets			$	601,661		$	32,040
LIABILITIES AND SHAREHOLDERS' DEFICIENCY
Current liabilities
Accounts payable and accrued liabilities		9	$	1,843,780		$	710,430
Notes payable		7		530,896			—
Deferred revenue				59,533			38,570
Due to related parties		9		65,020			100,201
Deferred grants – current portion		8		6,382			—
Lease obligation - current portion		6		25,815			—
Long-term debt - current portion		8		209,282			—
Total current liabilities				2,740,708			849,201
Non-current liabilities
Deferred grants – long term portion		8		19,147			—
Long-term debt		8		651,041			—
Total liabilities				3,410,896			849,201
Shareholders' Deficiency
Common shares, $0.0001 par value, authorized - 500,000,000 issued and outstanding – 104,009,458 (December 31, 2019 - 109,746,036)		10		10,402			10,975
Shares to be issued / cancelled		10		8,622,459			34,091
Additional paid in capital		10		35,559,692			27,104,864
Cumulative translation adjustment				(162,379	)		186,874
Accumulated deficit				(46,840,154	)		(28,153,965
Total shareholders' deficiency attributed to owners				(2,809,980	)		(817,161	)
Non-controlling interest				745			—
Total shareholders' deficiency				(2,809,235	)		(817,161	)
Total liabilities and shareholders' deficiency			$	601,661		$	32,040

Nature of operations and going concern (note 1); Subsequent events (note 16)

The accompanying notes are an integral part of these consolidated financial statements.

F-3

Zoompass Holdings Inc.

Consolidated Statements of Operations and Comprehensive Loss

(Expressed in US Dollars)

	Year ended December 31, 2020			Year ended December 31, 2019
Revenue from services rendered	$	872,465		$	—
Cost of revenue		665,881			—
Gross profit		206,584			—
Expenses Salaries and consulting fees		696,650			266,433
Professional fees		200,637			168,429
Insurance		111,754			—
Filing fees and regulatory costs		43,877			4,892
Rent expense		102,387			15,740
Office and sundry expenses and reversal of impairment on related parties		15,619			(110,767	)
Depreciation and amortization (notes 4 and 5)		437,128			—
Software development costs		15,604			81,122
Share-based payments (note 11)		1,549,762			227,000
Travel expense		8,272			—
Provision for bad and doubtful debts		330,886			—
Interest and bank charges		126,783			1,323
(Gain) on settlement/revaluation of debt (notes 8, 10)		(318,581	)		—
Foreign exchange gain		(143,075	)		(38,916	)
		3,177,703			615,256
Loss from operations		(2,971,119	)		(615,256	)
Other income (expense) Impairment of goodwill (note 3)		(13,030,124	)		—
Impairment of intangible assets (note 5)		(6,551,870	)		—
Net loss due to change in fair value of contingent consideration		(387,356	)		—
Amortization of deferred grants (note 8)		6,382			—
Gain from deemed disposal of subsidiary (note 14)		144,969			—
Gain on settlement of contingent consideration (note 10)		3,574,368			—
		(16,243,631	)		—
Loss before taxes		(19,214,750	)		(615,256	)
Income taxes Current expense (note 15)		(139	)		—

Net loss	$	(19,214,889	)	$	(615,256	)
Less: net loss attributable to non-controlling interest		(528,700	)		—
Net loss attributable to the Company	$	(18,686,189	)	$	(615,256	)
Other comprehensive loss Loss on foreign currency translation		(348,790	)		(62,585	)
Less: Other comprehensive loss attributable to non-controlling interest		463			—
Total comprehensive loss	$	(19,563,679	)	$	(677,841	)
Basic and diluted net loss per share	$	(0.2073	)	$	(0.006	)
Weighted average number of common shares outstanding - basic and diluted		90,154,546			107,848,952

The accompanying notes are an integral part of these consolidated financial statements.

F-4

Zoompass Holdings Inc.

Consolidated Statements of Changes in Shareholders’ Deficiency

(Expressed in US Dollars)

	Common shares						Shares to be issued / cancelled
	Number of						Number of						Additional paid in				Cumulative translation
	Shares			Amount			Shares			Amount				capital			adjustment			Deficit			NCI			Total
					$						$				$			$			$			$			$
Balance, December 31, 2019		109,746,036			10,975			757,575			34,091				27,104,864			186,874			(28,153,965	)		—			(817,161	)
Share issuance for private placement		5,039,269			504			(757,575	)		(34,091	)			422,173			—			—			—			388,586
Shares issued on conversion of debt		3,319,162			332			—			—				232,010			—			—			—			232,342
Share-based payment expense - issuance of shares for services		6,160,000			616			—			—				1,240,384			—			—			—			1,241,000
Cancellation of shares		(44,911,724	)		(4,491	)		—			—				4,491			—			—			—			—
Share-based payment expense		—			—			1,500,000			165,000				143,762			—			—			—			308,762
Shares granted on business combination		—			—			41,313,430			15,713,308				—			—			—			—			15,713,308
Shares issued on business combination		20,656,715			2,066			(20,656,715	)		(6,197,015	)			6,194,949			—			—			—			—
Fair value of warrants on business combination		—			—			—			(1,058,834	)			1,058,834			—			—			—			—

Cancellation of shares and warrants pursuant to disposition of subsidiary (note 10)		—			—			(9,330,000	)		—				(2,799,295	)		—			—			—			(2,799,295	)
Shares issued on asset purchase		4,000,000			400			—			—				1,359,600			—			—			—			1,360,000
Warrants issued on asset purchase		—			—			—			—				597,920			—			—			—			597,920
Non-controlling interest upon acquisition		—			—			—			—				—			—			—			528,982			528, 982
Foreign currency translation adjustment		—			—			—			—				—			(349,253	)		—			463			(348,790	)
Net loss for the year		—			—			—			—				—						(18,686,189	)		(528,700	)		(19,214,889	)
Balance, December 31, 2020		104,009,458			10,402			12,826,715			8,622,459				35,559,692			(162,379	)		(46,840,154	)		745			(2,809,235	)

	Common shares				Shares to be issued
	Number of				Number of				Additional paid in			Cumulative translation
	Shares		Amount		Shares		Amount			capital		adjustment			Deficit			NCI		Total
				$				$			$		$			$			$		$
Balance, December 31, 2018		105,450,000		10,545		—		—			26,648,048		249,459			(27,538,709	)		—		(630,657	)
Share-based payment expense - shares issued for services		1,500,000		150		—		—			226,850		—			—			—		227,000
Shares issued for cash		2,796,036		280		757,575		34,091			229,966		—			—			—		264,337
Foreign currency translation adjustment		—		—		—		—			—		(62,585	)		—			—		(62,585	)
Net loss for the year		—		—		—		—			—		—			(615,256	)		—		(615,256	)
Balance, December 31, 2019		109,746,036		10,975		757,575		34,091			27,104,864		186,874			(28,153,965	)		—		(817,161	)

The accompanying notes are an integral part of these consolidated financial statements.

F-5

Zoompass Holdings Inc.

Consolidated Statements of Cash Flows

(Expressed in US Dollars)

	Years Ended December 31,
	2020			2019
Cash flows used in operating activities
Net loss for the year	$	(19,214,889	)	$	(615,256	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		437,128			—
Amortization of deferred grants		(6,382	)		—
Provision for bad and doubtful debts		330,886			—
Shares issued for services		1,549,762			227,000
Foreign exchange (gain)		(143,075	)		(38,916	)
Interest expenses on debt valuation		113,067			—
Gain on settlement of debt		(318,580	)		—
Impairment of goodwill and reversal		13,030,124			(163,872	)
Impairment of intangible assets		6,551,870			—
Change in fair value of contingent consideration		387,356			—
Gain from deemed disposal of subsidiary		(144,969	)		—
Gain on settlement of contingent consideration		(3,574,368	)		—
(Increase) decrease in:
Accounts receivable		(379,393	)		—
Other current assets		(94,676	)		(2,722	)
Accounts payable and accrued liabilities		909,596			55,157

Deferred revenue		20,963			—
Net cash used in operating activities		(545,581	)		(538,609	)

Cash flows used in investing activities

Cash acquired from BGC.		48,742			—
Cash paid on intangible asset acquired		(162,895	)		—
Net cash used in investing activities		(114,153	)		—

Cash flows provided by financing activities
Proceeds from note payable		365,068			—
Proceeds from shares issued		388,586			264,337
Proceeds from debt		75,600			—
Proceeds from related parties		63,096			286,188
Net cash provided by financing activities		892,350			550,525
Net change in cash		232,616			11,916
Effect of exchange rate changes on cash held in foreign currencies		(189,681	)		(26,514	)
Cash, beginning of year		21,477			36,075
Cash, end of year	$	64,412		$	21,477

Supplemental disclosure of non-cash investing and financing activities:
Purchase of intangible assets	$	1,957,920		$	—

The accompanying notes are an integral part of these consolidated financial statements.

F-6

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

NOTE 1 — NATURE OF OPERATIONS AND GOING CONCERN

Zoompass Holdings, Inc. formerly known as UVIC. Inc. ("Zoompass Holdings" or the "Company") was incorporated under the laws of the State of Nevada on August 21, 2013. The Company is a software fintech company with focus on leading edge technologies and software as a service. The Company is actively seeking opportunities to acquire software companies with existing revenue streams.

In February 2017, the Company completed a 3.5-1 forward split, which was approved by shareholders of record on September 7, 2016. All share figures have been retroactively stated to reflect the stock split approved by the shareholders, unless otherwise indicated.

Effective March 6, 2018, the Company’s Canadian operating subsidiary, Zoompass, Inc., entered into an Asset Purchase Agreement (the "Agreement") for the sale of its Prepaid Card Business ("Prepaid Business") to Fintech Holdings North America Inc., or its designee. The aggregate purchase price of the Prepaid Business was C$400,000 (US$314,160). The transaction was completed on March 26, 2018.

On October 16, 2018, the Company purchased certain business assets that represents a business from Virtublock Global Corp. (“Virtublock”, “VGC”) in return the Company issued 44,911,724 shares to Virtublock and pursuant to the issuance of shares Virtublock ended up owning 45% of total outstanding common shares of the Company.

On February 27, 2020, the Company cancelled 44,911,724 shares of the common stock which were issued in connection with the asset purchase agreement dated October 17, 2018 with Virtublock (note 3). Pursuant to a General Release agreement dated November 29, 2019, the asset purchase agreement dated October 17, 2018 with Virtublock was deemed cancelled and each party acknowledged and agreed that no party has or shall have any claim with respect to intellectual property, software or other assets owned by any other party and that no agreements exist or remain unsatisfied with respect to the transfer of any asset from a releasing party to any other party, and Virtublock assigned and tendered the 44,911,724 shares of common stock of the Company to the Company for cancellation. As the share cancellation occurred on February 27, 2020, the accounting recognition of this transaction, consisting of a transfer of $4,492 from common stock to additional paid-in capital and related reduction in the number of common shares outstanding, were reflected in the consolidated financial statements for the year ended December 31, 2020.

On May 31, 2020, the Company closed a Share Exchange Agreement (the "Share Exchange Agreement") by and among the Company, Blockgration Global Corp., an Ontario corporation, and its subsidiaries, (Blockline Solutions Private Ltd, Msewa Software Solutions, Zuum Global Services Inc.) ("BGC"), and the shareholders of BGC (the "BGC Shareholders"). This acquisition gives the Company controlling interest in BGC’s subsidiaries in Canada and India which are engaged in the business of digital wallet deployments, prepaid card platform, blockchain and mobile apps deployment.

On September 30, 2020, the Company cancelled 9,330,000 shares of the common stock and 14,845,000 share purchase warrants which were allocated in connection with the acquisition of MSS, that was a 70% subsidiary of BGC on May 31, 2020. See (note 3, 10 and 14).

The Company has incurred recurring losses from operations and as of December 31, 2020, and December 31, 2019, and had net working capital deficiency and an accumulated deficit. The Company’s continued existence is dependent upon its ability to continue to execute its operating plan and to obtain additional debt or equity financing. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. There can be no assurance that the necessary debt or equity financing will be available or will be available on terms acceptable to the Company, in which case the Company may be unable to meet its obligations. Should the Company be unable to realize its assets and discharge its liabilities in the normal course of business, the net realizable value of its assets may be materially less than the amounts recorded in the consolidated financial statements.

F-7

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

There is no certainty that the Company will be successful in generating sufficient cash flow from operations or achieving and maintaining profitable operations in the future to enable it to meet its obligations as they come due and consequently continue as a going concern. The Company will require additional financing to fund its operations and it is currently working on securing this funding through corporate collaborations, public or private equity offerings or debt financings. Subsequent to year-end the Company raised approximately $400,000 in additional financing. See (note 16) Sale of additional equity securities by the Company would result in the dilution of the interests of existing shareholders. There can be no assurance that financing will be available when required.

These consolidated financial statements have been prepared on the basis that the Company will continue as a going concern, which presumes that it will be able to realize its assets and discharge its liabilities in the normal course of business as they come due. These consolidated financial statements do not reflect the adjustments to the carrying values of assets and liabilities and the reported expenses and consolidated balance sheets classifications that would be necessary if the Company were unable to realize its assets and settle its liabilities as a going concern in the normal course of operations. Such adjustments could be material.

In December 2019, a novel strain of coronavirus (COVID-19) emerged. While initially the outbreak was largely concentrated in China and caused significant disruptions to its economy, it has now spread to several other countries and infections have been reported globally.

During 2020, as a result of COVID-19 infections having been reported throughout the United States, Canada, India and countries in Europe, certain national, provincial, state and local governmental issued proclamations and/or directives aimed at minimizing the spread of COVID-19. Due to the disruption of the COVID-19 crisis, the Company’s business activities might be subject to certain level of adverse impact. To the date of the issuance of these consolidated financial statements, the Company is still assessing the impact on its business, results of operations, financial position and cash flows, which will be accounted for when the reliable estimates will become available.

Basis of presentation

The accompanying consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission, in accordance with accounting principles generally accepted in the United States (“US GAAP”).

The consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary to present a fair statement of the results for the year.

Basis of consolidation:

The consolidated financial statements comprise the accounts of Zoompass Holdings Inc., the legal parent company, and its subsidiaries. The accounts of the subsidiaries are prepared for the same reporting period as the parent entity, using consistent accounting policies. All significant inter-company balances and transactions, unrealized gains or losses on transactions between the entities have been eliminated upon consolidation.

Legal Entity	Location		Ownership Interest
Zoompass Inc. (“ZM”)!		Canada		100	%
Paymobile Inc. (“PM”)!		USA		100	%
Zoompass Technologies Inc. (formerly Mobility Fintech Solutions USA Inc.) (“ZTI”)		USA		100	%
Blockgration Global Corp. (“BGC”)*		Canada		100	%
Virtublock OU (“VO”)*		Estonia		100	%
Blockline Solutions Private Ltd (“BSP”)*		India		100	%
Msewa Software Solutions (“MSS”)*		India		70	%
Zuum Global Services Inc. (“ZMG”)*		Canada		70	%

*Those entities became subsidiaries of the Company pursuant to the acquisition transaction completed on May 31, 2020. The transaction with MSS was cancelled as of September 30, 2020 and has been accounted for as deemed disposal of subsidiary.

! No changes in the shareholding since December 31, 2018 (Note 3)

F-8

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

Subsidiaries are all entities (including special purpose entities) over which the Company, either directly or indirectly, has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. Where the group does not directly hold more than one half of the voting rights, significant judgment is used to determine whether control exists. These significant judgments include assessing whether the group can control the operating policies through the group's ability to appoint most directors to the board. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the group until the date on which control ceases.

NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS

SIGNIFICANT ACCOUNTING POLICIES

Translation of foreign currencies

The functional currency of the Company, PM and ZTI is the US dollar. The Company has determined that the functional currency of ZM, BGC and ZMG is the Canadian dollar (references to which are denoted "C$"), for BSP and MSS is the Indian Rupees and for VO is the Euro. The reporting currency of the Company is US Dollar.

Transactions in currencies other than the functional currency are recorded at the rates of the exchange prevailing on dates of transactions. At each balance sheet reporting date, monetary assets and liabilities that are denominated in foreign currencies are translated at the rates prevailing at each reporting date. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated at the exchange rate at the historical date of the transaction. The impact from the translation of foreign currency denominated items is reflected in the statement of operations and comprehensive loss.

Revenue recognition

Nature of performance obligations

F-9

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

The following is a description of the Company's principal revenue generating activities.

Deferred revenue is recognized for transactions arising during the current reporting period when it receives consideration from a customer before achieving certain criteria that must be met for revenue to be recognized. Deferred revenue is a liability as of the reporting period related to revenue producing activity for which revenue has not yet been recognized.

Leases

The Company is the lessee in a lease contract when the Company obtains the right to use the asset. Leases are included in the line items right-of-use asset, lease obligation, current, and lease obligation, long-term in the consolidated balance sheet. Right-of-use (“ROU”) asset represents the Company’s right to use an underlying asset for the lease term and lease obligations represent the Company’s obligations to make lease payments arising from the lease, both of which are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. Leases with a lease term of 12 months or less at inception are not recorded on the consolidated balance sheet and are expensed on a straight-line basis over the lease term in the consolidated statement of Operation. The Company determines the lease term by agreement with lessor.

As the Company’s current operating lease of office space on January 1, 2019 had a term of less than 12 months, the Company elected not to apply the recognition requirements of ASC 842 to the short-term lease, instead lease payments were recognized in statement of operations on a straight-line basis over the lease term.

Goodwill

Business combinations

F-10

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

of inputs and processes applied to those inputs that can create outputs that provide a return to the Company and its shareholders. A business need not include all the inputs and processes that were used by the acquiree to produce outputs if the business can be integrated with the inputs and processes of the Company to continue to produce outputs. The Company considers several factors to determine whether the set of activities and assets is a business.

Business acquisitions are accounted for using the acquisition method whereby acquired assets and liabilities are recorded at fair value as of the date of acquisition with the excess of the purchase consideration over such fair value being recorded as goodwill and allocated to RUs. If the fair value of the net assets acquired exceeds the purchase consideration, the difference is recognized immediately as a gain in the consolidated statement of operations. Acquisition related costs are expensed during the period in which they are incurred, except for the cost of debt or equity instruments issued in relation to the acquisition which is included in the carrying amount of the related instrument. Certain fair values may be estimated at the acquisition date pending confirmation or completion of the valuation process. Where provisional values are used in accounting for a business combination, they are adjusted retrospectively in subsequent periods. However, the measurement period will not exceed one year from the acquisition date. If the assets acquired are not a business, the transaction is accounted for as an asset acquisition.

Cash and cash equivalents

Equipment

Equipment is stated at historic cost. The Company has the following sub-categories of equipment with useful lives and depreciation methods as follows:

•	Office equipment and furniture – 20% declining balance per year

In performing the review for recoverability, if future undiscounted cash flows (excluding interest charges) from the use and ultimate disposition of the assets are less than their carrying values, an impairment loss represented by the difference between its fair value and carrying value, is recognized. When properties are classified as held for sale, they are recorded at the lower of the carrying amount or the expected sales price less costs to sell.

Intangibles

F-11

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

Trademark – 8 years

Customer base – 5 years

Intellectual property/Technology – 10 years

Impairment goodwill and indefinite-lived intangible assets and intangible assets with definite lives

The Company assesses the carrying value of goodwill, indefinite-lived intangible assets and intangible assets with definite lives, such as Trademark, Intellectual property/Technology, and customer base for potential impairment annually as of December 31, or more frequently if events or changes in circumstances indicate such assets might be impaired.

Income taxes

F-12

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

Share-based payment expense

Basic and diluted loss per share

Segment reporting

ASC 280-10, "Disclosures about Segments of an Enterprise and Related Information", establishes standards for the way that public business enterprises report information about operating segments in the Company's consolidated financial statements. Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Significantly all of the assets of the Company are located in, all revenues are currently earned in India and the Company’s research, development and strategical planning operations are carried out and served as an integral part of the Company’s business. The Company’s reportable segments and operating segments include rendering of professional services.

Use of estimates

The areas where management has made significant judgments include, but are not limited to:

Accounting for acquisitions and disposal: The accounting for acquisitions requires judgement to determine if an acquisition meets the definition of a business combination under ASC 805. Further, management is required to use judgement to determine the fair value of the consideration provided and the net assets and liabilities acquired while in case of disposal management is required to use judgement to determine if the Company continues to exercise control over a subsidiary or is it a deemed disposal.

Assessment of Impairment: The Company has certain assets for which a determination of an impairment, if any, requires significant judgement to determine if the carrying amount of any assets are impaired. Management uses judgement in determining among other things, whether or not an indicator of impairment has occurred, future cash flows, time horizons, and likelihood of recoverability. The assets where management has assessed the recoverability the carrying amount includes accounts receivable, equipment, intangibles and goodwill.

F-13

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

Deferred taxes: The Company recognizes the deferred tax benefit related to deferred income tax assets to the extent recovery is probable. Assessing the recoverability of deferred income tax assets requires management to make significant estimates of future taxable profit and the income tax rate at which the future tax assets will be realized. To the extent that future cash flows, taxable profit and income tax rates differ significantly from estimates, the ability of the Company to realize deferred tax assets could be impacted. In addition, future changes in tax laws could limit the ability of the Company to obtain tax deductions in future periods from deferred income tax assets.

Share-based payment expense: The calculation of share-based payment expense requires management to use significant judgment in determining the fair value of share-based payment expense. Additionally, the management is required to make certain assumptions in arriving at the fair value of share-based payment expense.

RECENTLY ISSUED AND NEWLY ADOPTED ACCOUNTING PRONOUNCEMENTS

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The amendments are effective for all entities as of March 12, 2020 through December 31, 2022. The Company is currently evaluating the impact this guidance may have on our consolidated financial statements and related disclosures.

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) 2016-13, “Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments.” This pronouncement, along with subsequent ASUs issued to clarify provisions of ASU 2016-13, changes the impairment model for most financial assets and will require the use of an “expected loss” model for instruments measured at amortized cost. Under this model, entities will be required to estimate the lifetime expected credit loss (current expected credit loss – CECL) on such instruments and record an allowance to offset the amortized cost basis of the financial asset, resulting in a net presentation of the amount expected to be collected on the financial asset. In developing the estimate for lifetime expected credit loss, entities must incorporate historical experience, current conditions, and reasonable and supportable forecasts. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019. On November 15, 2019, FASB issued ASU No. 2019-10 and finalized various effective date delays for private companies, not-for-profit organizations, and smaller reporting companies applying the CECL, and the effective date of CECL implementation date has been delayed to January 2023. As the new CECL model requires changes to the Company's process of estimating expected credit losses on trade receivables, the Company is in a process to identify and update existing internal controls and procedures to ensure compliance with the new guidance once it becomes effective.

In August 2018, the FASB issued ASU 2018-13, “Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement,” which removes, modifies and adds certain disclosure requirements in ASC Topic 820, Fair Value Measurement. This ASU is effective for annual and interim reporting periods beginning after December 15, 2019. Certain amendments must be applied prospectively while others are to be applied on a retrospective basis to all periods presented. The Company adopted ASU 2018-13 in 2020 and has updated disclosures in this report. See Note 16 for additional information.

In December 2019, the FASB issued ASU 2019-12, “Simplifying the Accounting for Income Taxes,” which will simplify the accounting for income taxes by removing certain exceptions to the general principles in income tax accounting and improve consistent application of and simplify GAAP for other areas of income tax accounting by clarifying and amending existing guidance. The new guidance is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company evaluated the impact ASU

F-14

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

2019-12 will have on its consolidated financial statements and does not expect a material impact upon adoption in

2021.

On January 1, 2019, the Company adopted ASC 842, “Leases” (“ASC 842”) to replace existing lease accounting guidance. This pronouncement is intended to provide enhanced transparency and comparability by requiring lessees to record right-of-use assets and corresponding lease liabilities on the balance sheet for most leases. Expenses associated with leases will continue to be recognized in a manner like previous accounting guidance. The Company adopted ASC 842 utilizing the transition practical expedient added by the FASB, which eliminates the requirement that entities apply the new lease standard to the comparative periods presented in the year of adoption. The Company is the lessee in a lease contract when the Company obtains the right to use the asset. Operating leases are included in the line items right-of-use asset, lease obligation, current, and lease obligation, long-term in the consolidated balance sheet. Right-of-use (“ROU”) asset represents the Company’s right to use an underlying asset for the lease term and lease obligations represent the Company’s obligations to make lease payments arising from the lease, both of which are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. Leases with a lease term of 12 months or less at inception are not recorded on the consolidated balance sheet and are expensed on a straight-line basis over the lease term in our consolidated statement of income. The Company determines the lease term by agreement with lessor. As our current operating lease of office space, at the commencement, has a term of less than 12 months, the Company elects not to apply the recognition requirements of ASC 842 to the short-term lease, instead lease payments are recognized in statement of operations on a straight-line basis over the lease term.

NOTE 3 – ACQUISITIONS OF BUSINESS AND ACQUISITION OF ASSET

Acquisition of Virtublock Global Corp. (VGC):

On October 16, 2018, the Company entered into an agreement with VGC, a corporation incorporated in Ontario Canada, to acquire assets and intellectual property of VGC. Based on an examination of the net assets acquired, the acquisition of the net assets was determined to be a business as defined under ASC 805.

Pursuant to the agreement, the Company issued 44,911,724 shares of its common stock to VGC as purchase consideration. The fair value of the shares issued was determined to be $3,458,203 based on the market value of the common stock as the date of issuance. The following table sets forth the allocation of the purchase consideration to the fair value of the net assets acquired. The acquired goodwill is primarily related to the value attributed to a company that was expected to experience accelerated growth.

Management tested goodwill and intangibles for impairment and determined them to be impaired. The main cause of the impairment was Company’s inability to secure the required financing and customer contracts in order to operationalize the new acquisition of VGC. As a result, the carrying amounts of intangibles and goodwill could not be supported.

Impairment of goodwill and intangible assets:

Management used the income approach to estimate the value of the Company’s intangible assets based on projections (adjusted for multiple scenarios and weighted probabilities) of future cash flows.

Impairment regarding goodwill

The fair value of the business unit based on the discounted cash flow analysis and net asset valuations of the reporting unit do not exceed the carrying amount, therefore goodwill was considered impaired.

F-15

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

Impairment regarding intangibles

The undiscounted (pre-tax) cash flows of the reporting unit using projections do not exceed its’s carrying value, and therefore intangibles were considered impaired.

Common shares issued	$	3,458,203

Net assets acquired
Customer base		—
Trade name – Virtublock (note 5)		6,600
Intellectual property / Technology (note 5)		11,200
Non-compete agreements		—
Goodwill (note 5)	$	3,440,403
Total net assets acquired		3,458,203
Impairment at December 31, 2018 (note 5)		(3,458,203	)
	$	—

On February 27, 2020, the Company terminated the agreement with Virtublock and cancelled 44,911,724 shares of the common stock which were issued in connection with the asset purchase agreement. Pursuant to a General Release agreement, each party acknowledged and agreed that no party has or shall have any claim with respect to intellectual property, software or other assets owned by any other party and that no agreements exist or remain unsatisfied with respect to the transfer of any asset from a releasing party to any other party.

Acquisition of Blockgration Global Corp. (BGC):

On May 31, 2020, the Company closed a share exchange agreement with BGC and its subsidiaries, wherein the Company acquired all of the outstanding shares of common stock of BGC, a company incorporated in Ontario, Canada, that is in the business of rendering IT professional services, for an aggregate purchase price of $9,000,000. The consideration was to be paid by issue of common shares and share purchase warrants in the Company as follows:

i)	41,313,430 newly issued common shares in the Company at market price of $0.30 per share
ii)	56,186,560 share purchase warrants at an exercise price of $0.25, valid for 3 years

Subsequent to the year-end the Company decided to cancel the both the 2020 and 2021 bonus shares and warrants. Due to the publicly traded nature of the Company’s shares, the equity issuance of the shares was considered to be a more reliable measurement of fair market value of the transaction compared to having a separate valuation of the net assets.

Further, the Company was also to issue bonus shares and share purchase warrants on a pro rata basis after the end of each applicable fiscal year, upon achievement of certain operational milestones within a defined time period.

a)	2020 Bonus shares – 5,000,000 shares and 5,000,000 warrants
b)	2021 Bonus shares – 5,000,000 shares and 5,000,000 warrants

F-16

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

Under the acquisition method of accounting, the total purchase price reflects the tangible and intangible assets and liabilities based on their estimated fair values at the date of the completion of the acquisition. The following table summarizes the allocation of the purchase price of BGC, and its subsidiaries:

Consideration
Common shares/warrants	$	7,255,849
Contingent shares/warrants (recorded as contingent consideration payable)		11,644,471
		18,900,320

Net assets acquired
Cash and cash equivalents	$	52,795
Accounts receivable		220,213
Inventory		5,838
Right-of-use asset		39,922
Other assets		53,083
Equipment		17,674
Goodwill		16,711,559
Intangible assets		4,385,000
Accounts payable and accrued liabilities		(516,88	)
Note and debt payable		(263,639	)
Other liabilities		(76,658	)
Non-controlling interest		(1,728,679	)
Total net assets acquired	$	18,900,320

Acquisition of Assets:

On July 15, 2020, the Company entered into certain Intellectual Property Rights Purchase and Transfer Agreement with Moxie Holdings Private Ltd. (Moxies) an Indian corporation for:

(i)

cash consideration of $1,200,000 to be paid in installments,

(ii)

four million (4,000,000) newly issued shares of common stock, and

(iii)

warrants to purchase two million (2,000,000) shares of common stock at an exercise price of $0.50 per

share valid for three years.

The Asset was included in intangible assets as IP technology under development and the fair value for total consideration was determined on the date of acquisition as $3,106,831, see note 5. The fair value of consideration paid was allocated as follows (i) cash consideration at net present value of $1,148,911, (ii) consideration in common stock was valued at $1,360,000, and (iii) consideration in warrants was valued at $597,920.

The repayment terms for the cash consideration were modified on September 28, 2020 as follows:

Payment due October 30, 2020	$	400,000
Payment due December 31, 2020		350,000
Payment due March 31, 2021		200,000
Payment due March 31, 2022		250,000

The net present value of the future payments before modification of payment terms was determined using a weighted average cost of capital of 24.70% and was determined to be $1,158,632. The net present value of the future payments upon modification of payment terms was determined using a weighted average cost of capital of 24.70% and was determined to be $1,032,256, with a gain of $126,376 recognized and included in the statement of operations, see note 8.

The Company has not been able to make the payments as per the modified due dates as a result of cash flow shortage and is continuing to make the payments when funds become available.

In October 2020, repayment terms were further modified to extend the last payment date to 2023. The net present value of the future payments before the second modification of payment terms was determined using a weighted average cost of capital of 24.70% and was determined to be $937,140. The net present value of the future payments upon second modification of payment terms was determined using a weighted average cost of capital of 24.70% and was determined to be $778,127, with a gain of $159,013 recognized and included in the statement of operation, see note 8.

During the year ended December 31, 2020, a total of $162,895 including a payment on initial stage of the asset acquisition in the amount of $50,000 was paid. Subsequent to the year ended December 31, 2020, an additional $353,498 has been paid. The Company has not been able to make the payments as per the modified due dates as a result of cash flow shortage and is continuing to make the payments when funds become available.

F-17

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

NOTE 4 – EQUIPMENT

Cost	Office equipment
Balance at December 31, 2019		—
Additions on acquisition of subsidiaries (note 3)		26,773
Additions		12,564
Deduction for MSS cancellation (note 14)		(21,535	)
Foreign exchange		1,238
Balance at December 31, 2020		19,040

Accumulated depreciation	Office Equipment
Balance at December 31, 2019	—
Additions on acquisition of subsidiaries (note 3)		9,099
Depreciation for the year		6,988
Deduction for MSS cancellation (note 14)		(4,454	)
Balance at December 31, 2020		11,633

Balance at December 31, 2019		—
Balance at December 31, 2020		7,407

NOTE 5 – INTANGIBLE ASSETS, GOODWILL AND IMPAIRMENT

Cost	Tradenames			Intellectual Property			Customer base			IP Technology under development			Total
Balance at December 31, 2019	$	—		$	—		$	—		$	—		$	—
Additions on acquisition of subsidiaries (note 3)		418,000			768,000			3,199,000						4,385,000
Additions for the year (note 10)											3,106,831			3,106,831
Deduction for MSS deemed disposal (note 14)		(33,000	)		(73,000	)		(310,000	)					(416,000	)
Impairment of intangible assets		(378,400	)		(682,873	)		(2,838,488	)		(3,057,774	)		(6,957,535	)
Foreign exchange		(6,600	)		(12,127	)		(50,512	)		(49,057	)		(118,296	)
Balance at December 31, 2020	$	—		$	—		$	—		$	—		$	—

Accumulated Amortization	Tradenames		Intellectual Property		Customer base		IP Technology under development		Total
Balance at December 31, 2019	$	—	$	—	$	—	$	—	$	—
Additions (note 3)		—								—
Amortization		29,448		42,975		357,717		—		430,140

F-18

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

Deduction for MSS cancellation (note 14)		(1,375	)		(2,433	)		(20,667	)				(24,475	)
Impairment of intangible assets		(28,073	)		(40,542	)		(337,050	)				(405,665	)
Foreign exchange		—			—						—		—
Balance at December 31, 2020	$	—		$	—		$	—		$	—	$	—

Balance at December 31, 2019	$	—		$	—					$	—	$	—
Balance at December 31, 2020	$	—			$			$		$	—	$	—

Goodwill	Total
		$
Balance at December 31, 2019		—
Acquisition (note 3)		16,711,559
Disposition of subsidiary		(3,581,168	)
Impairment in 2020		(13,030,124	)
Foreign exchange		(100,267	)
Balance at December 31, 2020		—

We test goodwill for impairment at the reporting level annually and more often if an event occurs or circumstances change that indicate the fair value of a reporting unit is below its carrying amount. The qualitative factors we considered include, general macroeconomic conditions, industry and market conditions, cost factors, events or changes affecting the composition or carrying amount of the net assets of our reporting unit, volatility in our share price and other relevant entity-specific events. During the year, the Company acquired BGC, triggering a substantial event.

During the year the Company identified circumstances which would call for evaluation of goodwill impairment and therefore impaired $13,243,071 reducing the goodwill related to the acquisition to $3,263,210. As at December 31, 2020, the Company identified additional circumstances including actual results compared to the projection which would call for evaluation of goodwill impairment and therefore impaired the remaining balance of goodwill related to the acquisition to $nil.”

NOTE 6 – RIGHT-OF-USE ASSET

The right-of-use assets consist of the operating lease for the Company's subsidiary BGC’s office facility in Toronto and office lease facility for one of the Company’s subsidiaries, MSS, which are amortized over the remaining term of the lease of 33 and 36 months, respectively. The right-of-use assets also consists of a finance leased vehicle for one of the Company’s subsidiary, MSS. The leases from MSS have been removed as a result of deemed disposition of MSS.

The Company adopted ASC 842 – Leases using the modified retrospective cumulative catch-up approach. Under this approach, the Company did not restate its comparative amounts and recognized a right-of-use asset equal to the present value of future lease payments. The Company elected to apply the practical expedient to only transition contracts which were previously identified as leases and elected to not recognize right-of-use assets and lease obligation for leases of low value assets.

F-19

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)


Right-of-use assets	$
Balance at June 1, 2020 (see note 3)		39,922
Additions		191,639
Amortization		(37,261	)
Deduction of MSS asset from cancellation (note 14)		(178,966	)
Foreign exchange		10,068
Balance at December 31, 2020		25,402
Lease obligation
		$
Balance at June 1, 2020		40,303
Additions		190,294
Repayment of interest accretion		(13,017	)
Deduction of MSS obligation from cancellation (note 14)		(200,152	)
Foreign exchange		8,387
Balance at December 31, 2020		25,815

Current portion of operating lease obligation		25,815

The operating lease expense was $63,835 for the year ended December 31, 2020 ($Nil – December 31, 2019) and included in rent expense. At the commencement date of the lease, the lease liability was measured at the present value of the lease payments that were not paid at that date. The lease payments are discounted using an interest rate of 10.8% for the Company and 17% for the Company’s subsidiary, which is the estimated incremental borrowing rate. The balance at June 1, 2020 relates to the subsidiaries acquired during the year.

NOTE 7 – NOTES PAYABLE

In July 2018, the Company’s subsidiary BGC obtained an unsecured loan of $36,650 (C$50,000) from an unrelated party shareholder for payment of operating expenses for an original term of two years, with option to renew bearing no interest and repayable on demand. The balance of the loan on December 31, 2020 is $39,270 (December 31, 2019 - $Nil). The loan has been extended on the same terms.

In September 2019 and July 2020, the Company’s subsidiary BGC and ZM, respectively, obtained unsecured loans of $23,142 (C$30,000) and $7,437 (C$10,000), respectively, from an unrelated third party for payment of operating expenses for an original term of one year bearing no interest and repayable on demand. The balance of the loan on December 31, 2020 was $23,562 and $7,854 respectively. (December 31, 2019 - $Nil). The loan has been extended on the same terms.

In February 2020 and April 2020, the Company’s subsidiary BGC obtained unsecured loans of $60,264 (C$75,000) and $22,014 (C$30,000), respectively, from a shareholder (an unrelated party) for payment of operating expenses for an original term of one year bearing no interest and repayable on demand. The balance of the loans on December 31, 2020 was $82,467 (December 31, 2019 - $Nil). The loan has been extended on the same terms.

In October 2020, the Company’s subsidiary ZM obtained an unsecured loan of $241,559 (C$318,903) from unrelated third parties for payment of operating expenses for an original term of one year bearing no interest and repayable on demand. The balance of the loans on December 31, 2020 was $250,467 (December 31, 2019 - $Nil). The loan has been extended on the same terms.

During the year 2020, the Company’s subsidiary BSP obtained an unsecured loan of $127,276 (INR 9,298,521) from an unrelated third parties for payment of operating expenses for a term of one year bearing no interest and repayable on demand. The balance of the loans on December 31, 2020 was $127,277 (December 31, 2019 - $Nil).

F-20

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

NOTE 8– LONG TERM DEBT

On December 31, 2020, long term debt consisted of the following:

During the year ended December 31, 2020, two subsidiaries of the Company received Canada Emergency Business Account loan for COVID-19 relief amounting to $78,540 (C$100,000), unsecured and non-interest bearing, repayable by December 31, 2022. The present value of the loan at December 31, 2020 was $50,508. Repayment of the loan balance on or before December 31, 2022 will result in a loan forgiveness of $10,000. As at January 1st, 2023, the Company will have the option to extend the repayment of the capital for 3 years, and will benefit from an interest rate of 5%. The loan was initially recorded at a fair value of $78,540, considering the grant, the interest-free loan and the reimbursement on December 31, 2022. An effective rate of 24.7% was used, taking into account the rate that the Company would have obtained for a similar loan. The residual value of $31,911 was recorded as a deferred government grant in the statement of financial position and will be recognized in the statement of loss at the same time as the underlying expenses in general and administrative. As at December 31, 2020, an amortization of $6,382 was recognized in the statement of operations.

The reconciliation of CEBA loans is as follows:

Opening balance	$	78,540
Recognition of deferred grants		(31,911	)
Interest accretion during the year		3,879
Balance at December 31, 2020	$	50,508
Less: current portion		—
Long term portion	$	50,508

The reconciliation of deferred grants is as follows:

Opening balance	$	—
Recognition of deferred grants		31,911
Amortization of deferred grants during the year		(6,382	)
Balance at December 31, 2020	$	25,529
Less: current portion		6,382
Long term portion	$	19,147

During the year, the Company acquired IP Technology asset, see notes 3 and 5.

During the year, the Company amended the payment terms in September and October 2020, and recognized extinguishment gain of $126,375 and $159,014, respectively. The accretion of interest expenses was $109,188 and was included in statement of operations.

The reconciliation of present value of debt payable from the date of completion of the agreement is as follows:

Value of debt upon closing of the asset purchase (note 3)	$	1,148,911
Less: Payment made until December 31, 202		(162,895	)
Add: Interest accretion until December 31, 2020		109,188
Present value of debt-pre amendment of payment terms (note 3)	$	1,095,204
Present value of debt-post amendment of payment terms (note 3)		809,815
Gain on revaluation of present value for amended terms (note 3)	$	285,389

Total long-term debt (a and b)	$	860,323
Less: current portion		(209,282	)
Long term debt, net of current portion	$	651,041

The future commitments for long term debt on an undiscounted basis are as follows:

Year ended
	2021	$	353,498
	2022		512,147
	2023		250,000
	Total	$	1,115,645

F-21

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

NOTE 9 – RELATED PARTY TRANSACTIONS AND BALANCES

The balances of due to related party corporations on December 31, 2020 represent advances and payment from related party corporations which are non-interest bearing, unsecured and due on demand. The amount of $100,201 that is recorded as due to related parties as of December 31, 2019 was eliminated upon consolidation of these related parties in 2020, pursuant to the acquisition transaction in 2020, became inter-company.

The amount due to related parties on December 31, 2020 of $65,020 (December 31, 2019 - $100,201) is comprised of $53,882 (December 31, 2019 $Nil) representing amount due to the company under common management of a shareholder of the Company. It also includes an amount of $11,138 (December 31, 2019 - $Nil) paid to a shareholder of the Company. The amount represents working capital financing and is non-interest bearing, unsecured, due on demand and have no set repayment terms.

As of December 31, 2020, the Company had an amount owing to an entity owned and controlled by the former Chief Executive Officer of the Company of $Nil (December 31, 2019 - $265,533). The amount owing relates to services provided by the former Chief Executive Officer and expense reimbursements. During the year ended December 31, 2020, the Company issued 3,319,162 shares of the common stock to settle a debt owed by the company in amount $265,533. The fair value of these shares, in amount of $232,342, was determined by using the market price of the common stock as at the date of issuance. The Company recognized a gain on settlement of debt in amount of $33,191 in the consolidated statements of operations and comprehensive loss (Note 10).

b)	As of December 31, 2020, the Company had an amount owing to an entity owned and controlled by the former Secretary of the Company of $54,436 (December 31, 2019 - $54,436). The amount owing relates to services provided by the then Secretary and expense reimbursements.

During the year ended December 31, 2020, $982,176 (issuance of shares for service – $838,400, stock options expenses - $143,776) was recognized for share-based payment expense to directors and officers of the Company. No expense for share based payments to directors and officers was recognized during the year ended December 31, 2019.

As of December 31, 2020, the Company had an amount owing to the Chief Executive Officer for $78,540 (December 31, 2019 - $Nil), included in accounts payable and accrued liabilities. The amount owing relates to services provided and is recorded as consulting expenses.

F-22

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

NOTE 10 – COMMON STOCK AND COMMON SHARE PURCHASE WARRANTS

Common Stock

The Company is authorized to issue 500,000,000 common stocks with a par value of $0.0001.

Shares issued on private placement:

In January 2020, the Company issued 757,575 non-registered shares of the Company's common stock. The net proceeds in amount of $34,091 was received in advance on December 31, 2019.

In June 2020, the Company issued total of 551,394 non-registered shares of common stock for net proceeds in the amount of $137,002.

In August 2020, the Company issued total of 400,000 non-registered shares of common stock for net proceeds in the amount of $100,000. The subscriber will also be issued one warrant for every share subscribed at an exercise price of $0.50 over the next three years from the date of subscription.

Shares issued on conversion of debt:

In January 2020, the Company issued 3,319,162 shares of the common stock to settle debts owed by the company in the amount $265,533.

The $265,533 debt was owed to a corporation controlled by a former Chief Executive Officer of the company (note 9(a)). The fair value of these shares, in amount of $232,342, was determined by using the market price of the common stock as at the date of issuance. The Company recognized a Gain on settlement of debt in amount of $33,191 in statement of operations.

Cancellation of shares:

On February 27, 2020, the Company cancelled 44,911,724 shares of the common stock which were issued in connection with the asset purchase agreement dated October 17, 2018 with Virtublock Global Corp. (note 1). Pursuant to a General Release agreement dated November 29, 2019, the asset purchase agreement dated October 17, 2018 with Virtublock Global Corp. was deemed cancelled and each party acknowledged and agreed that no party has or shall have any claim with respect to intellectual property, software or other assets owned by any other party and that no agreements exist or remain unsatisfied with respect to the transfer of any asset from a releasing party to any other party, and Virtublock Global Corp. assigned and tendered the 44,911,724 shares of common stock of the Company to the Company for cancellation. As the share cancellation occurred on February 27, 2020, the accounting recognition of this transaction, consisted of a transfer of $4,491 from common stock to additional paid-in capital and related reduction in the number of common shares outstanding.

F-23

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

On September 30, 2020, the Company cancelled 9,330,000 shares of the common stock and 14,845,000 share purchase warrants which was allocated in connection with acquisition of MSS that was a 70% subsidiary of BGC on May 31, 2020. During the period September 30, 2020, 4,665,000 shares of common stock, 1,237,034 share purchase warrants and contingent consideration that were valued at $519,473, $88,758 and $2,191,064 respectively was recorded as common stock and additional paid-in capital. Pursuant to the deemed disposition of MSS, a debit in the amount of $2,799,295 were recorded in additional paid in capital to reflect the cancellation of common shares and share purchase warrants.

Shares issued for services:

In March 2020, the company issued 1,160,000 shares of the common stock to arm’s length third parties as compensation for services rendered. The fair value of these shares, in amount of $145,000, was determined by using the market price of the common stock as at the date of decision to issue and charged to statement of operations.

In April 2020 and August 2020, the Company issued 2,000,000 and 1,200,000, respectively, shares of the common stock to Chief Executive of the Company as compensation for services. The fair value of these shares, in amount of $250,000 and $386,400, was determined by using the market price of the common stock as at the date of decision to issue and charged to statement of operations.

In August 2020, the Company issued 800,000 shares of the common stock to an arm’s length third party as compensation for services rendered. The fair value of these shares, in the amount of $257,600, was determined by using the market price of the common stock as at the date of decision to issue and charged to statement of operations.

In October 2020, the Company issued 1,000,000 shares of common stock to the Chief Financial Officer as compensation for services. The fair value of these shares in the amount of $202,000 was determined by using the market price of the common stock as at the date of decision to issue and charged to statement of operations.

Shares issued on Asset purchase:

On July 15, 2020, the Company entered into certain Intellectual Property Rights Purchase and Transfer Agreement with Moxie Holdings Private Ltd., an Indian corporation for (i) cash consideration of $1.2 million to be paid in installments, see (note 3) (ii) four million (4,000,000) newly issued shares of common stock, and (iii) warrants to purchase two million (2,000,000) shares of common stock at an exercise price of $0.50 per share valid for three years. The Asset was included in intangible assets as IP Technology under development for total consideration of $3,106,831. The fair value of consideration paid was allocated as follows (i) cash consideration at net present value of $1,148,911, using weighted average cost of capital of 24.64% (ii) consideration in common stock was valued at $1,360,000 based on fair value of the Company’s stock of common share on acquisition date of $0.34 per share, and (iii) consideration in warrants was valued at $597,920 using Black-Scholes pricing model with Risk free interest rate of 0.19%, expected volatility of 189.8%, exercise price of $0.50 per share and expected life of 3 years.

Shares issued in year 2019:

On January 20, 2019 and April 20, 2019, the company issued 1,000,000 and 500,000 shares of the common stock, respectively, to an arm’s length third party as compensation for services rendered. The fair value of these shares, in amount of $177,000 and $50,000 respectively, was determined by using the market price of the common stock as at the date of issuance and charged to statement of operations.

In May 2019, the Company completed various private placements for the sale of non-registered shares of the Company’s common stock. As a result of these private placements 1,038,461 non-registered shares of the Company’s common stock was issued for proceeds of $103,846.

During July and August 2019, the Company completed private placements for the sale of non-registered shares of the Company’s common stock. As a result of these private placements 1,000,000 non-registered shares of the Company’s common stock was issued for proceeds of $92,308.

In December 2019, the Company completed a private placement for the sale of non-registered shares of the Company’s common stock. As a result of the private placement 757,575 non-registered shares of the Company’s common stock was issued for proceeds of $34,091.

F-24

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

Shares to be issued

On acquisition of BGC:

On April 20, 2020, the Company and its shareholders entered into a Share Exchange Agreement with BGC. Pursuant to the Share Exchange Agreement, the Company agreed to exchange 100% of the outstanding equity stock of BGC held by its shareholders for shares of common stock of the Company. Under the terms of the amended agreement, the Company will issue 41,313,400 newly issued shares of the common stock and 56,186,560 share purchase warrants to the shareholders of the Company. Each warrant is exercisable into one common share of the Company at an exercise price of $0.25 within three years of the issue date.

On September 30, 2020, the Company cancelled 9,330,000 shares of the common stock and 14,845,000 share purchase warrants which was allocated in connection with acquisition of MSS that was a 70% subsidiary of BGC on May 31, 2020. At December 31, 2020 the fair value of 31,983,430 common shares at $0.18650 per share was determined to be $5,964,910 and the fair value of the 41,341,560 share purchase warrants at $0.1681 per share was determined to be $6,949,103. The fair value of the share purchase warrants was based on a Black-Scholes analysis and the projected payout dates discounted at the cost of equity of 28.49% for an exercise price of $0.25 per share and expected life of 3 years.

The shares to be issued for this acquisition was calculated using the market price of the shares of the Company on May 31, 2020, the date of closing of the transaction. The value of the contingent consideration common shares and warrants to be issued for this acquisition was calculated using the Black-Scholes pricing model and the projected earnout dates discounted at the cost of equity. The total price was determined to be $18,900,320. The amount of contingent consideration on the date of acquisition was $11,644,471. This was revalued regularly and the change in fair value loss of $387,356 was recorded in the consolidated statement of operations.

On May 31, 2020, common shares of 20,656,715 and warrants of 4,682,026 was issued and held in escrow by the Company. The common shares were assigned a value of $6,197,015 and the warrants $1,058,834, total amounting to $7,255,849 was recorded as issued and outstanding during the year ended December 31, 2020. On September 30, 2020, as a result of cancellation of common shares and share purchase warrants allocated to MSS the shares to be issued were reduced by 4,665,000 shares of common stock with fair value of $2,799,295, which also includes the fair value of share purchase warrants.

Reconciliation of contingent consideration payable is as follows:

Contingent consideration on date of acquisition of BGC	$	11,644,471
Change in fair value during the year		387,356
Contingent recognized as shares to be issued during the year		(8,457,459	)
Gain on waiver of 2021 and 2022 revenue targets by the Board		(3,574,368	)
Contingent consideration as at December 31, 2020		—

The Company has provided for share-based payments of $165,000 for 1,500,000 common shares to be issued at fair market price of $0.11 per share pursuant to a General Release Agreement with certain former consultants.

F-25

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

Common share Purchase Warrants

On May 31, 2020, up on closing of the acquisition of BGC the Company has issued 4,682,026 warrants at an exercise price of $0.25 per warrant within a period of three years. The fair value of the warrants was determined to be $1,058,834 using the Black-Scholes analysis and discounted at cost of equity of 28.45%.

On July 15, 2020, the Company issued 2,000,000 warrants at an exercise price of $0.50 per warrant within a period of three years pursuant to the acquisition of asset transaction, see note 3. The fair value of the warrants was determined as $597,920 using the Black-Scholes pricing model with the assumption for volatility of 189.8%, risk- free interest rate of 0.19% and stock price of $0.34.

On August 5, 2020, the Company issued 400,000 warrants at an exercise price of $0.50 per warrant within a period of three years. The fair value of the warrants was determined to be $94,400 using the Black-Scholes pricing model with the assumption for volatility of 150.44%, risk-free interest rate of 0.27% and stock price of $0.31.

NOTE 11 – SHARE-BASED PAYMENTS

On January 15, 2020, the Company issued 3,000,000 common stock purchase options at an exercise price of $0.10 to directors, officers and consultants of the Company. 83,415 of these options vested immediately and are exercisable for seven years from the grant date. Remaining options were exercisable for seven years from the grant date at an exercise price of $0.10 and would vest ratably over a three-year period from the date of grant. The 3,000,000 stock options were assigned a fair value of $172,168 using the Black-Scholes pricing model. The following assumptions were used: Risk free interest rate of – 1.54%; expected volatility of 124%; expected dividend yield – nil; expected life of 7 years. For the year ended December 31, 2020, 1,000,056 options vested and the fair value of those vested options, in amount of $57,379, was charged to statement of operations with a credit in additional paid-in capital. (Note 9)

On March 1, 2020, the Company decided to issue 2,000,000 shares of the common stock to Chief Executive of the Company as compensation for services. The fair value of these shares, in amount of $250,000, was determined by using the market price of the common stock as at the date of decision of issuance and charged to statement of operations. The shares were subsequently issued in April 2020.

In August 2020, the Company issued 1,200,000 shares of the common stock as compensation for services. The fair value of $386,400 determined by using the market price of the common stock was charged to statement of operations. (Note 9 and 10)

On March 1, 2020 and August 13, 2020, respectively, the Company issued 1,160,000 and 800,000 shares of the common stock to arm’s length third parties as compensation for services rendered. The fair value of these shares, in amount of $145,000 and $257,600, was determined by using the market price of the common stock as at the date of issuance.

On March 11, 2020, the Company granted 2,000,000 common stock purchase options at an exercise price of $0.10 to two directors of the Company. 55,610 of these options vested immediately and are exercisable for seven years from the grant date. Remaining options were exercisable for seven years from the grant date at an exercise price of $0.10 and would vest ratably over a three-year period from the date of grant. The 2,000,000 stock options were assigned a fair value of $260,195 using the Black-Scholes pricing model. The following assumptions were used: Risk free interest rate of – 0.57%; expected volatility of 130%; expected dividend yield – nil; expected life of 7 years. For the year ended December 31, 2020, 555,596 options vested and the fair value of those vested options, in amount of $72,281, was charged to statement of operations with a credit in additional paid-in capital. (Note 9)

On October 22, 2020, the Company granted 1,000,000 common stock purchase options at an exercise price of $0.20 to the Chief Financial Officer of the Company. 27,805 of these options vested immediately and are exercisable for seven years from the rant date. Remaining options were exercisable for seven years from the grant date at an exercise price of $0.20 and would vest ratably over a three-year period from the date of grant. The

F-26

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

1,000,000 stock options were assigned a fair value of $169,167 using the Black-Scholes pricing model. The following assumptions were used: Risk free interest rate of – 0.39%; expected volatility of 127%; expected dividend yield – nil; expected life of 7 years. For the year ended December 31, 2020, 83,359 options vested and the fair value of those vested options, in amount of $14,102, was charged to statement of operations with a credit in additional paid-in capital. (Note 9)

On October 22, 2020, the Company decided to issue 1,000,000 shares of the common stock to Chief Financial Officer of the Company as compensation for services. The fair value of these shares, in amount of $202,000, was determined by using the market price of the common stock as at the date of decision of issuance and charged to statement of operations.

On January 20, 2019, the Company issued 1,000,000 shares of the common stock to an arm’s length third party as compensation for services rendered. The fair value of these shares, in amount of $177,000, was determined by using the market price of the common stock as at the date of issuance.

On April 20, 2019, the Company issued 500,000 shares of the common stock to an arm’s length third party as compensation for services rendered. The fair value of these shares, in amount of $50,000, was determined by using the market price of the common stock as at the date of issuance.

The components of share-based payments expense are detailed in the table below.

	Date of grant		Contractual life	Number		Exercise price ($)		Year ended Dec 31, 2020 ($)		Year ended Dec 31, 2019 ($)		Share price ($)		Risk- free rate			Volatility			Dividend yield		Expected life (years)


Share issued for services		January 20, 2019	N/A		1,000,000		N/A		—		177,000		0.177		—			—			—		—
Stock options for services		April 20, 2019	N/A		500,000		N/A				50,000		0.10		—			—			—		—
Stock options		January 15, 2020	7 years		3,000,000		0.10		57,379		—		0.07		1.54	%		124	%		Nil		6.79
Share issued for services		March 1, 2020	N/A		1,160,000		N/A		145,000		—		0.12		—			—			—		—
Share issued for services		March 1, 2020	N/A		2,000,000		N/A		250,000		—		0.11		—			—			—		—
Stock options		March 11, 2020	7 years		2,000,000		0.10		72,281		—		0.14		0.57	%		130	%		Nil		6.95
Share issued for services		August 13, 2020	N/A		2,000,000		N/A		644,000		—		0.43		—			—			—		—
Stock options		October 22, 2020	7 years		1,000,000		0.20		14,102		—		0.202		0.39	%		127	%		Nil		6.75
Shares issued for services		October 22, 2020	N/A		1,000,000		N/A		202,000		—		—		—			—			—		—
								$	1,384,762	$	227,000

As at December 31, 2020, the Company has the following stock options:

			Contractual				Number of units		Weighted Average Exercise Price
Grant date	Fair Value		Life (years)		Units		vested		(C$)
January 15, 2020		172,168		5.92		3,000,000		1,000,056		0.10
March 11, 2020		260,195		6.20		2,000,000		555,596		0.10
October 22, 2020		169,167		6.75		1,000,000		83,359		0.20
Total		601,530				6,000,000		1,639,011

Information with respect to Company’s stock options is presented below:

	2020					2019
	Number of stock options			Weighted average exercise price		Number of stock options		Weighted average exercise price
Balance, beginning of year		500,000			0.10		—		—
Options issued		6,000,000			0.12		500,000		0.10
Options cancelled		(500,000	)				—		—
Balance, end of year		6,000,000			0.12		500,000		0.10

F-27

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

NOTE 12 – FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

Liquidity Risk: Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they come due. The Company manages its liquidity by ensuring that there is sufficient capital to meet short and long-term business requirements, after considering cash requirements from operations and the Company's holdings of cash and cash equivalents. The Company also always strives to maintain sufficient financial liquidity in order to participate in investment opportunities as they arise, as well as to withstand sudden adverse changes in economic circumstances.

Management forecasts cash flows for its current and subsequent fiscal years to predict future financing requirements. Future requirements may be met through a combination of credit and access to capital markets. The Company's cash requirements are dependent on the level of operating activity, a large portion of which is discretionary. Should management decide to increase its operating activity, more funds than what is currently in place would be required. It is not possible to predict whether financing efforts will be successful or sufficient in the future. On December 31, 2020, the Company had $64,412 in cash and cash equivalents (December 31, 2019 - $21,477). Subsequent to December 31, 2020, the Company raised approximately $400,000 in financing. See (note 16)

Currency risk: Zoompass Holdings, its Indian subsidiaries and Canadian subsidiaries transactions are in US dollars and Indian Rupees, Canadian dollars, respectively. The results of the Company's operations are subject to currency translation risk. The Company mitigates foreign exchange risk through forecasting its foreign currency denominated expenditures and maintaining an appropriate balance of cash in each currency to meet the expenditures. As the Company's reporting currency is the US dollar, fluctuations in US dollar will affect the results of the Company.

Credit risk: Credit risk is the risk of loss associated with a counterparty's inability to fulfill its payment obligations. As of December 31, 2020, the Company's credit risk is primarily attributable to cash and cash equivalents and accounts receivable. On December 31, 2020, most of the Company's cash and cash equivalents were held with reputable Canadian chartered banks. The nature of Company’s diverse customer base ensures that there is no concentration of credit risk. Based on accounts receivable amounts that are past due, historical trends and available information there is no indication that a customer could be experiencing liquidity or going concern problems.

Interest rate risk: Interest rate risk is the risk borne by an interest-bearing asset or liability because of fluctuations in interest rates. Financial assets and financial liabilities with variable interest rates expose the Company to cash flow interest rate risk. The Company's does not have significant interest rate risk.

Fair values: The carrying amounts reported in the consolidated balance sheet for cash and cash equivalents, accounts receivables, accounts payable and accrued liabilities and notes payable approximate fair value because of the short period of time between the origination of such instruments and their expected realization.

F-28

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

NOTE 13 – COMMITMENTS AND CONTINGENCIES

Commitment

There were no commitments as of December 31, 2020 and December 31, 2019 other than those disclosed in these consolidated financial statements.

Contingencies

During the year ended December 31, 2017, the Company learned that a class action complaint (the “Class Action Complaint”) had been filed against the Company, its Chief Executive Officer and its Chief Financial Officer in the United States District Court for the District of New Jersey. The Class Action Complaint alleges, inter alia, that defendants violated the federal securities laws by, among other things, failing to disclose that the Company was engaged in an unlawful scheme to promote its stock. The Company has been served with the Class Action Complaint. The Company has analyzed the Class Action Complaint and based on that analysis, has concluded that it is legally deficient and otherwise without merit. The Company intends to vigorously defend against these claims.

On August 7, 2018, the United States District Court for the District of New Jersey dismissed the Class Action Complaint. Additionally, after the year end on August 21, 2018, the Company was served with the Second Amended Complaint in the District of New Jersey. The Company filed a motion to dismiss the Second Amended Complaint on September 18, 2018. On January 23, 2019, the United States District Court for the District of New Jersey dismissed the Second Amended Complaint with prejudice. Plaintiff filed a motion for reconsideration of the dismissal order on February 7, 2019. On May 14, 2019, the Plaintiff’s motion to reconsider was denied. On June 10, 2019, the plaintiffs filed an appeal with United States Court of Appeals for the Third Circuit. As of May 27, 2020, the Class Action Complaints, including applicable appeals, have been settled or dismissed by the parties and the applicable courts.

Also, during the year ended December 31, 2017, the Company learned that two derivative complaints (the “Derivative Complaints”) on behalf of the Company have been filed against the Company’s Directors and Chief Executive Officer, President, Corporate Secretary, and Chief Financial Officer, and nominally against the Company, in Nevada state and federal court. The state court action subsequently was removed to federal court. The Derivative Complaints allege, inter alia, that the Company’s officers and directors directed the Company to undertake an unlawful scheme to promote its stock. The Company has been served with the Derivative Complaints. The Company has analyzed them and based on its analysis, has concluded that the Derivative Complaints are legally deficient and otherwise without merit. As of May 27, 2020, the Derivative Complaints, including applicable appeals, have been settled or dismissed by the parties and the applicable courts.

As of December 31, 2020, there are no legal proceedings involving the Company.

F-29

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

NOTE 14 – DEEMED DISPOSAL OF A SUBSIDIARY

The Company decided to terminate the agreement with MSS, as management lost control over the operations as of September 30, 2020 (deemed disposal). MSS was acquired by the Company on May 31, 2020 (See Note 3) as a 70% subsidiary of BGC. The assessment of fair value on the consideration allocated to MSS by way of common shares and share purchase warrants were cancelled as of September 30, 2020. Under the acquisition method of accounting, the preliminary allocation of purchase price to MSS based on the estimated fair value at the date of completion of the acquisition was as follows:

Common shares	519,472
Fair value of warrants	88,758
Contingent shares/warrants - contingent consideration	2,191,064
Total consideration	2,799,294
Net assets acquired
Cash and cash equivalents	13,835
Accounts receivable	145,011
Inventory	5,838
Right-of-use asset
Other assets	39,158
Equipment	16,463
Goodwill	3,581,168
Intangible assets	416,000
Accounts payable and accrued liabilities	(61,583	)
Note and debt payable	(126,626	)
Tax provision
Other liabilities	(30,432	)
Non-controlling interest	(1,199,538	)
Total net assets acquired	2,799,294

F-30

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

At September 30, 2020 the assets and liabilities related to MSS are as follows:


	Note		September 30, 2020
Current assets
Cash and cash equivalents				4,053
Accounts receivable				129,669
Inventory				5,678
Other current assets				27,863
Total current assets				167,263
Non-current assets
Equipment, net		4		17,081
Right-of-use asset		6		178,966
Total non-current assets				196,047
Total assets				363,310
Current liabilities
Accounts payable and accrued liabilities				121,325
Due to related parties				78,272
Lease obligation - current portion		6		41,010
Long-term debt - current portion		14(a)		17,330
Total current liabilities				257,937
Non-current liabilities
Lease obligation - long term portion		6		159,142
Long-term debt		14(a)		91,200
Total non-current liabilities				250,342
Total liabilities				508,279

Net assets				(144,969	)

The operating results of MSS for the period from June 1, 2020 to September 30, 2020 included in the consolidated statement of operations and comprehensive loss, as follows:

Note	From June 1, 2020 to September 30, 2020

Revenue from services rendered		148,701
Cost of revenue		45,539

Gross Profit			103,162
Expenses
Salaries and consulting fees			139,403
Professional fees			1,394
Rent expenses			37,042
Office and sundry expenses			6,356
Depreciation and amortization			28,930
Travel expense			1,807
Bad debts			45,905
Interest and bank charges			13,435
			274,272
Net Loss			(171,110

Less: net loss attributable to non-controlling interest			51,113
Net loss attributable to the Company			(119,777

Other Comprehensive income
Gain on foreign currency translation	14,767
Less: Other comprehensive income attributable to non-controlling interest	(4,430	)
Total Comprehensive loss	156,343

F-31

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

(a) Long-term debt

On September 30, 2020, long term debt consisted of the following:

a)	On November 30, 2019, MSS obtained an unsecured loan from Tata Capital in the amount of $26,677 (Indian Rupees 2,015,000) repayable over a period of 40 months at interest rate of 17.99%. The balance of the loan on September 30, 2020 was $29,601.

On January 30, 2020, MSS obtained an unsecured loan from ICICI Bank in the amount of $33,098 (Indian Rupees 2,500,000) repayable over a period of 40 months at interest rate of 17%. The balance of the loan on September 30, 2020 was $33,747. On August 13, 2020, an additional loan for $6,796 (Indian Rupees 500,000) was obtained that is repayable over a period of 48 months. The balance of the loan on September 30, 2020 was $10,412.

c)	On January 30, 2020, MSS obtained an unsecured loan from IDFC First Bank Limited in the amount of $33,760 (Indian Rupees 2,550,000) repayable over a period of 36 months at interest rate of 17%. The balance of the loan on September 30, 2020 was $34,770.

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ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

As of September 30, 2020, the statement of cash flows related to MSS are as follow:

Cash flows provided by (used in) operating activities
Net loss from deemed disposition	(171,110	))
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization	28,930
Provision for bad and doubtful debts	45,905
Interest expense	13,435

(Increase) Decrease in:
Account receivable	(15,342	)
Inventory	(160	)
Other assets	(11,295	)
Increase (Decrease) in:
Accounts payable and accrued liabilities	59,742
Other liabilities	(30,432	)
Net cash used in operating activities	(80,327	)
Cash flows provided by (used in) financing activities
Proceeds from note payable
Repayment of debt	(18,096	)
Due to related party	78,272
Net cash provided by financing activities	60,176
Net change in cash	(20,151	)
Effect of exchange rate changes	10,369
Cash, beginning of period	13,835
Cash, end of period	4,053

F-34

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

NOTE 15 – INCOME TAXES

The following table reconciles the expected income tax expense (recovery) for different jurisdictions at the Company’s effective combined tax rate of 21%.

	2020			2019
Net loss before income taxes		(19,214,750	)		(615,256	)
Expected income tax expense (recovery) at statutory rate of 21% (2019 - 35%)		(4,035,097	)		(215,341	)

Impact of tax rate differences in foreign jurisdictions	(46,890	)	64,800
Tax rate changes and other adjustments	148,783		(4,693	)
Permanent difference	3,733,812		47,736
Change in valuation allowance	199,531		107,498
Income tax expense (recovery)	139		0

Unrecognized deferred tax assets:

The following table reflects the gross unused tax losses and deductible temporary differences for which deferred tax assets have not been recognized in the financial statements:

	2020			2019
Non-capital loss carry-forward for Canadian purposes		1,575,636			1,376,244
Net operating loss carryforward US		166,516			166,516
Valuation allowance		(1,742,291	)		(1,542,760	)

The Company’s non-capital losses expires as follows:

	Canada Losses		USA Losses
Year	Balance	Expiry	Balance	Expiry
2020	752,424	2040	—	2040
2019	387,685	2039	322	2039
2018	1,634,662	2038	214,173	2038
2017	2,258,953	2037	440,437	2037
2016	912,072	2036	138,001	2036
	5,945,796		792,933

F-35

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

NOTE 16 – SUBSEQUENT EVENTS

The Company’s management has evaluated subsequent events up to September 24, 2021, the date the consolidated financial statements were issued, pursuant to the requirements of ASC 855 and has determined the following material subsequent events:

During the three months period ended March 31, 2021, the Company completed a private placement for the sale of non-registered shares of the Company's common stock. As a result of the private placement 3,614,685 non- registered shares of the Company's common stock was issued for gross proceeds of $298,355.

In March 2021, the Company announced that its subsidiary, BGC, signed a strategic partnership agreement to provide Business-to-Business (B2B) solutions. Under the terms of the agreement the Company will receive a one-time customization and implementation fee of US$350,000.

The payment of all the Notes payable amounts disclosed in the consolidated financial statements as of December 31, 2020 has been extended based on the same terms (note 7). Subsequent to December 31, 2020, the Company’s received an additional $23,630 (CD$30,000) from a shareholder for payment of operating expenses. The loan does not bear any interest and is unsecured.

Subsequent to December 31, 2020, the Company received CD$300,000 from a Convertible Debenture offering of 3,000 units. Each unit is comprised of one (1) debenture in the principal amount of CD$1,000 per unit with a term of three (3) years from the date of issuance and bearing interest at the rate of 12% per annum. The whole or any part of the principal amount of the Debenture plus any accrued and unpaid interest may be convertible at the option of the debenture holder into common shares of the Company at a price equal to US$0.20 per share at any time up to the maturity date. The right of conversion in the Debenture may be accelerated by the Company if the closing price of the Company’s common shares exceeds 200% of the Conversion price for a period of 20 trading days in a 30-day period at any time up to the maturity date as more specifically set out in the Debenture agreement.

Subsequent to the year ended December 31, 2020, the Company repaid a long-term debt due to Moxies, an amount of $353,498 (note 8).

F-36