Chemistree Technology : Q1 2022 MD&A as of November 26, 2021

Suite 204 – 998 Harbourside Drive

North Vancouver, BC V7P 3T2

Tel: 604 678 8941 Fax: 604 689 7442

THE ATTACHED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FORM AN

INTEGRAL PART OF THIS MANAGEMENT DISCUSSION AND ANALYSIS AND ARE HEREBY INCLUDED

BY REFERENCE

Administration Dialogue and Evaluation as of November 26, 2021

Statements on this report that aren’t historic info are forward-looking statements involving identified and unknown dangers and uncertainties, which may trigger precise outcomes to differ significantly from these statements. Readers are cautioned to not put undue reliance on forward-looking statements.

Statements contained on this MD&A that aren’t historic info are forward-looking statements (inside the that means of the Canadian securities laws and the U.S. Personal Securities Litigation Reform Act of 1995) that contain dangers and uncertainties. Ahead-looking statements embody, however aren’t restricted to, statements with respect to allowing timelines, foreign money fluctuations, necessities for extra capital, authorities regulation, environmental dangers, limitations on insurance coverage protection and the timing and attainable consequence of pending litigation. In sure instances, forward-looking statements will be recognized by means of phrases corresponding to “plans”, “expects” or “doesn’t anticipate”, “is anticipated”, “finances”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “doesn’t anticipate”, or “believes”, or variations of such phrases and phrases or state that sure actions, occasions or outcomes “could”, “may”, “would”, “may” or “will probably be taken”, “happen” or “be achieved”. Ahead-looking statements contain identified and unknown dangers, uncertainties and different elements which can trigger the precise outcomes, efficiency or achievements of the Firm to be materially completely different from any future outcomes, efficiency or achievements expressed or implied by the forward-looking statements. Such dangers and different elements embody, amongst others, dangers associated to the mixing of acquisitions; dangers associated to operations; dangers associated to three way partnership operations; conclusions of financial evaluations; modifications in mission parameters as plans proceed to be refined; in addition to these elements mentioned within the sections entitled “Dangers and Uncertainties” on this MD&A. Though the Firm has tried to establish necessary elements that would have an effect on the Firm and will trigger precise actions, occasions or outcomes to vary materially from these described in forward-looking statements, there could also be different elements that trigger actions, occasions or outcomes to not be as anticipated, estimated or meant. There will be no assurance that forward-looking statements will show to be correct, as precise outcomes and future occasions may differ materially from these anticipated in such statements. Accordingly, readers mustn’t place undue reliance on forward-looking statements. The forward-looking statements on this MD&A converse solely as of the date hereof. The Firm doesn’t undertake any obligation to launch publicly any revisions to those forward-looking statements to mirror occasions or circumstances after the date hereof to mirror the prevalence of unanticipated occasions.

Ahead-looking statements and different data contained herein regarding common expectations are primarily based on estimates ready by the Firm utilizing information from publicly accessible {industry} sources in addition to from market analysis and {industry} evaluation and on assumptions primarily based on information and information of this {industry} which the Firm believes to be affordable. Nevertheless, this information is inherently imprecise, though usually indicative of relative market positions, market shares and efficiency traits. Whereas the Firm will not be conscious of any misstatements concerning any {industry} information offered herein, the {industry} entails dangers and uncertainties and is topic to alter primarily based on numerous elements. Ahead-looking statements on this MD&A embody, however aren’t restricted to, the Debenture Amendments; the flexibility for the Firm to pay future curiosity funds on the Debentures as such funds develop into due; the Firm receiving the requisite Debentureholder approval to implement the Debenture Amendments; and the anticipated outcomes of the Debenture Amendments on the debt burden and future operations of the Firm, the Firm’s methods and goals, each usually and in respect of its present enterprise and deliberate enterprise operations; situations within the monetary markets usually, and with respect to the prospects for hashish firms particularly; the Firm’s future money necessities; the acquisition and improvement of vertically built-in property; the potential and improvement of the DHS property (as outlined under); the identification and completion of extra investments; funding and enlargement alternatives; the event of the social media enterprise and enlargement of its consumer base; the {industry}, areas and targets of the Firm’s funding coverage; alternatives arising from the connection with the Strategic Accomplice; the Firm’s capacity to boost extra fairness capital; and the sufficiency of the Firm’s capital assets.

This Administration Dialogue and Evaluation (“MD&A”) ought to be learn at the side of the condensed interim consolidated monetary statements for the interval ended September 30, 2021, and with the audited monetary statements for the yr ended June 30, 2021 and 2020, along with the corresponding notes of Chemistree Expertise Inc. (the “Firm” or “Chemistree”).

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Suite 204 – 998 Harbourside Drive

North Vancouver, BC V7P 3T2

Tel: 604 678 8941 Fax: 604 689 7442

This MD&A covers the interval ended September 30, 2021, and the next interval as much as the date of submitting. This MD&A has been ready by reference to the MD&A disclosure necessities established beneath Nationwide Instrument 51-102 – Steady Disclosure Obligations of the Canadian Securities Directors and Employees Discover 51-352 (Revised) – Issuers with US Marijuana Associated Actions (“Employees Discover 51-352”).

The condensed interim consolidated monetary statements of the Firm have been ready in accordance with Worldwide Accounting Requirements (“IAS”) 34, Interim Monetary Reporting as issued by the Worldwide Accounting Requirements Board (“IASB”). The unaudited condensed interim consolidated monetary statements observe the identical accounting insurance policies and strategies of software as our most up-to-date annual monetary statements and don’t embody all the data required for full annual monetary statements. Accordingly, they need to be learn at the side of our IFRS monetary statements for the fiscal yr ended June 30, 2021. The accounting insurance policies utilized within the unaudited condensed interim consolidated monetary statements are primarily based on Worldwide Monetary Reporting Requirements (“IFRS”) issued and excellent as of November 26, 2021, the date the Board of Administrators authorized these unaudited condensed interim consolidated monetary statements and they’re according to these disclosed within the annual monetary statements.

All quantities are expressed in Canadian {dollars} until in any other case famous. Readers are inspired to learn the Firm’s public data filings on SEDAR at www.sedar.com

Having accomplished the Washington Acquisition (as outlined herein), the Firm not directly derives, by way of investments in ancillary operations, income from the adult-use hashish {industry} in america in jurisdictions the place native regulation permits such actions, and will sooner or later not directly derive income from the medical hashish {industry} in america and the medical and/or adult-use hashish industries in Canada.

Though a lot of states of america have legalized medical and/or leisure use of hashish, it stays unlawful beneath United States federal legal guidelines. Accordingly, there are a selection of dangers related to the Firm’s plans and present, proposed and potential future investments, even the place the Firm will not be immediately concerned within the cultivation or sale of both adult-use or medical hashish. There’s a danger that United States federal authorities could implement federal regulation prohibiting the cultivation and sale of hashish or legal guidelines regarding the proceeds thereof.

Over half of the states of america have enacted laws to manage the sale and use of medical hashish with out limits on tetrahydrocannabinol (“THC”), whereas different states have regulated the sale and use of medical hashish with strict limits on the degrees of THC. However the permissive regulatory atmosphere of medical hashish on the state degree, hashish continues to be categorized as a managed substance beneath the U.S Managed Substances Act (the “CSA”) in america and as such, is in violation of U.S. federal regulation.

On account of the conflicting views between state legislatures and the federal authorities concerning hashish, investments in hashish companies in america are topic to inconsistent laws and regulation. The Supremacy Clause of the United States Structure establishes that america Structure and federal legal guidelines made pursuant to it are paramount and, in case of battle between federal and state regulation, the federal regulation have to be utilized. However the paramountcy of United States federal regulation, enforcement of such legal guidelines could also be restricted by different means or circumstances, that are additional described on this MDA and the paperwork integrated by reference herein. Except and till america Congress amends the CSA with respect to hashish (and as to the chance, timing or scope of any such potential amendments there will be no assurance), there’s a danger that U.S. federal authorities could implement present U.S. federal regulation, which can adversely have an effect on any present or future investments of the Firm in america. As such, there are a selection of dangers related to any of the Firm’s present or future investments in america, and such investments could develop into the topic of heightened scrutiny by regulators, inventory exchanges and different authorities. In consequence, the Firm could also be topic to important direct and oblique interplay with public officers. There will be no assurance that this heightened scrutiny is not going to in flip result in the imposition of sure restrictions on the Firm’s capacity to put money into america or every other jurisdiction.

On October 17, 2018, the Hashish Act, 2018 (the “Hashish Act”) got here into pressure with the impact of legalizing grownup leisure use of hashish throughout Canada. The Hashish Act gives for the federal authorities to manage business manufacturing of hashish merchandise and grants the provincial, territorial and municipal governments the

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Suite 204 – 998 Harbourside Drive

North Vancouver, BC V7P 3T2

Tel: 604 678 8941 Fax: 604 689 7442

authority to prescribe laws concerning retail and distribution, in addition to the flexibility to change a few of the present baseline necessities of the Hashish Act. The provinces of Canada have handed laws which units out the scheme for personal hashish gross sales in every Province. The brand new framework opens the door for personal operators to capitalize on hashish retail alternatives in Canada.

On February 8, 2018, following discussions with the Canadian Securities Directors and acknowledged Canadian securities exchanges, the TMX Group introduced the signing of a Memorandum of Understanding (the “TMX MOU”) with Aequitas NEO Alternate Inc., the Canadian Securities Alternate, the TSX and the TSX Enterprise Alternate. The TMX MOU outlines the events’ understanding of Canada’s regulatory framework relevant to the principles, procedures, and regulatory oversight of the exchanges and CDS because it pertains to issuers with cannabis-related actions in america. The TMX MOU confirms, with respect to the clearing of listed securities, that CDS depends on the exchanges to evaluate the conduct of listed issuers. In consequence, there isn’t a CDS ban on the clearing of securities of issuers with cannabis- associated actions in america. Nevertheless, there will be no assure that this strategy to regulation will proceed sooner or later. If such a ban have been to be applied after the Firm begins working in cannabis-related actions in america, it might have a cloth adversarial impact on the flexibility of holders of Frequent Shares, Debentures and Warrants to make and settle trades. Particularly, the Frequent Shares, Debentures and Warrants would develop into extremely illiquid as till another was applied, buyers would don’t have any capacity to impact a commerce of the Frequent Shares, Debentures and Warrants by way of the services of a inventory trade.

Accordingly, the Firm, and its investments within the hashish sector, could also be subjected to heightened scrutiny by relevant regulatory authorities, the CSE, clearing businesses or different governmental our bodies. See the sections entitled “Company Overview” and “Danger related to the Firm”, under, for additional particulars.

Outlook

Chemistree Expertise Inc. is an funding firm with holdings within the U.S. hashish sector and a consumer-targeted biotechnology enterprise. The Firm’s company technique is to concentrate on opportunistic investments throughout a broad vary of industries, and Chemistree is searching for to put money into early-stage, promising firms the place it could be the lead investor and might moreover present investees with advisory providers, mentoring and entry to the Firm’s administration experience.

During the last 18-months the Firm’s debt burden, mixed with a poor capital markets atmosphere has hampered our efforts to entry capital to broaden our footprint. With renewed curiosity within the sector, we are actually seeing consolidation within the {industry}, elevated capital exercise and a few funding alternatives that give rise to optimism. To additional scale back Chemistree’s discretionary burn-rate, the Firm has reached a mutual settlement to terminate sure administration agreements and continues to attempt to trim bills the place attainable.

Chemistree’s excellent convertible debentures are set to mature on March 29, 2022 (the “Debentures”), and bear curiosity at 10% each year payable semi-annually on the finish of December and June. Right now the Firm doesn’t have the wherewithal to redeem the Debentures at maturity, and the Firm’s money assets are constrained by the burden of curiosity funds. The Firm has filed Discover of an Extraordinary Assembly of Debentureholders to be held November 30, 2021 (the “Assembly”). On the Assembly, debentureholders (the “Debentureholders”) will probably be requested to think about and, if deemed applicable, to undertake, with or with out modification, a unprecedented decision, the total textual content of which is ready forth in Appendix “A” to the Assembly’s Round, approving amendments (the “Debenture Amendments”) to the belief indenture between the Firm and Odyssey Belief Firm (“Trustee”) dated as of March 29, 2019 (“Indenture”), and authorizing Trustee to execute a supplemental belief indenture giving impact to the Debenture Amendments. The resolutions to be thought-about on the Assembly would amend the Debentures within the following two key areas:

1. Subsequent to cost of the December 31, 2021 curiosity quantity – which is meant to be paid in money; enable the Firm to decide on whether or not to pay subsequent curiosity in money or by way of the issuance of widespread shares; and
2. Lengthen the time period of the convertible debentures by twenty-four (24) months to March 29, 2024.

All different phrases of the Debentures beneath the Indenture will stay unchanged. The convertible debentures accrue curiosity each day, with such accrued curiosity paid instantly upon conversion of the debentures. The principal quantity of the debentures is at present $7,814,000 and is convertible into widespread shares of the Firm at a value of $0.50 per share.

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Suite 204 – 998 Harbourside Drive

North Vancouver, BC V7P 3T2

Tel: 604 678 8941 Fax: 604 689 7442

In late July 2021, the Firm accomplished the sale of its 9.55-acre land bundle positioned within the metropolis of Desert Scorching Springs, Riverside County, California. Gross consideration for the sale was $1,957,000 (U.S.). This infusion of capital will present some extra working capital and enhance our skills to pursue funding concepts.

The Covid-19 pandemic is creating unprecedented challenges to the worldwide financial system and inventory markets. Chemistree depends on the formation of capital for our liquidity. Our board and administration are taking actions to keep up the solvency of the Firm so long as attainable throughout this era of uncertainty. Chemistree believes that capital markets will enhance for US operators, nevertheless, warning is warranted because the {industry} offers with the massive amount of ‘unregulated’ product that’s nonetheless extensively accessible within the market.

Enterprise goals 12 months ahead

Throughout calendar 2020 and early 2021, the outbreak of the novel pressure of coronavirus, particularly recognized as “COVID-19”, has resulted in governments worldwide enacting emergency measures to fight the unfold of the virus. These measures, which embody the implementation of journey bans, self-imposed quarantine durations and social distancing, have brought on materials disruption to companies globally leading to an financial slowdown. World fairness markets have skilled important volatility and weak spot. Governments and central banks have reacted with important financial and financial interventions designed to stabilize financial situations. The length and influence of the COVID-19 outbreak is unknown presently, as is the efficacy of the federal government and central financial institution interventions. It’s not attainable for the Firm to foretell the length or magnitude of the adversarial outcomes of the outbreak and its results on the Firm’s enterprise or capacity to boost funds.

Underneath the Firm’s Funding Coverage, as amended October 2020, the Firm is a publicly traded funding firm whose main goal is to speculate its funds for functions of producing returns from capital appreciation and funding earnings. It intends to perform these targets by way of the identification of and funding in securities of personal and publicly listed entities which might be concerned in a wide range of industries, together with, however not restricted to, alternatives within the hashish, know-how, well being care, biotechnology, medical know-how or associated shopper merchandise fields.

Investments will probably be acquired and held for short-term beneficial properties, earnings era, or long-term capital appreciation, dependent upon the precise funding. The paramount aim of the Firm will probably be to generate most returns from its investments.

The composition of the Firm’s funding portfolio will differ over time relying on its evaluation of a lot of elements, together with the efficiency of its investments, developments in present and potential markets, and danger evaluation. The Firm’s funding goals, funding technique and funding restrictions could also be amended every now and then on the advice of the funding committee or senior administration and approval by the Board. The Firm’s board of administrators reserves the proper and authority to alter the overall or particular focus of the Firm’s investments over time; and reserves the proper to diversify the Firm’s portfolio of investments by {industry}, geography, and funding kind with out prior announcement or discover being given.

The Firm anticipates re-investing the earnings realized from its investments to additional the expansion and improvement of the Firm’s funding portfolio. The declaration and cost of dividends to shareholders will develop into a precedence as soon as Firm has achieved regular or steady money circulate from its investments.

When it comes to composition, the character and timing of the Firm’s investments will rely, partly, on accessible capital at any specific time and the funding alternatives recognized and accessible to the Firm. Topic to the supply of capital, the Firm intends to create a diversified portfolio of investments. The composition of its funding portfolio will differ over time, and will embody fairness investments, hashish streaming preparations, secured or unsecured loans, asset acquisitions, naked land acquisitions, majority possession, joint ventures and licensing preparations, amongst others. All investments shall be made in compliance with relevant legal guidelines in related jurisdictions and shall be made in accordance with and ruled by the principles and insurance policies of relevant regulatory authorities.

Latest developments

In late October 2021, the Firm filed Discover of an Extraordinary Assembly of Debentureholders to be held November 30, 2021 (the “Assembly”). On the Assembly, debentureholders (the “Debentureholders”) will probably be requested to think about and, if deemed applicable, to undertake, with or with out modification, a unprecedented decision, the total textual content of which is ready forth in Appendix

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Suite 204 – 998 Harbourside Drive

North Vancouver, BC V7P 3T2

Tel: 604 678 8941 Fax: 604 689 7442

“A” to the Assembly’s Round, approving amendments (the “Debenture Amendments”) to the belief indenture between the Firm and Odyssey Belief Firm (“Trustee”) dated as of March 29, 2019 (“Indenture”), and authorizing Trustee to execute a supplemental belief indenture giving impact to the Debenture Amendments. The resolutions to be thought-about on the Assembly would amend the Debentures within the following two key areas:

1. Subsequent to cost of the December 31, 2021 curiosity quantity – which is meant to be paid in money; enable the Firm to decide on whether or not to pay subsequent curiosity in money or by way of the issuance of widespread shares; and
2. Lengthen the time period of the convertible debentures by twenty-four (24) months to March 29, 2024.

Chemistree’s excellent convertible debentures are set to mature on March 29, 2022 (the “Debentures”), and bear curiosity at 10% each year payable semi-annually on the finish of December and June. Right now the Firm doesn’t have the wherewithal to redeem the Debentures at maturity, and the Firm’s money assets are constrained by the burden of curiosity funds.

In late July 2021, Chemistree accomplished the sale of its 9.55-acre land bundle positioned within the metropolis of Desert Scorching Springs, Riverside County, California. Gross consideration for the sale was $1,957,000 (U.S.). The DHS property was acquired in 2019 as uncooked land, and over the course of the intervening two years the Firm’s improvement crew superior the land to a shovel- prepared state. Superior planning, allowing and engineering work was accomplished along with the required anthropological and environmental research. Along side the sale, the Firm has negotiated a back-in possibility settlement with the purchaser, such that because the purchaser advances the development of the mission, renamed AMP Industrial Park, the corporate has the unilateral possibility to accumulate a brand new 16,460-square-foot hashish manufacturing and processing constructing at a predetermined value.

On July 13, 2021, Chemistree reported that investee firm ImmunoFlex Therapeutics Inc. (“ImmunoFlex”). has accomplished and analyzed its medical trial of 21 sufferers 60 to 70 years of age. The exploratory trial was the newest of a number of small trials the place ImmunoFlex has targeted on analyzing immune system modulation at a genomic degree ensuing from remedy with compounds together with CBD (cannabidiol), THC (tetrahydrocannabinol), NAC (N-acetylcysteine) and several other different extensively accessible compounds. On this newest examine, conventional blood chemistry markers weren’t informative; nevertheless, genomic evaluation of the immune system’s T-cell receptor recognition areas (referred to as CDR3s) extracted from affected person RNA confirmed immune system modifications ensuing from remedy. In a single specific group, all sufferers confirmed constant outcomes throughout a number of genomic analyses. ImmunoFlex believes that the immune system modifications noticed on this medical examine are useful modifications with the potential to enhance immune system competence. ImmunoFlex has submitted non-provisional (U.S.) and PCT (Patent Cooperation Treaty; worldwide) patent purposes primarily based on the analysis carried out by ImmunoFlex in 2020 and 2021.

In early March, the Firm was happy to be taught of two necessary developments in hashish regulation in New Jersey. Chemistree investee, CHM Consulting LLC, doing enterprise as Utilized Hashish Sciences of New Jersey (ACS), at present has an software pending with the New Jersey Division of Well being (“DOH”) for a vertically built-in licence that may enable for the cultivation, manufacturing and processing, and retail gross sales of medical marijuana. After 18 months on pause, pending the result of an industry-wide judicial enchantment, the DOH is restarting the evaluate course of. Chemistree has written-down its funding in ACS as a result of size of inactivity within the New Jersey regulatory atmosphere, nevertheless, the Firm stays hopeful that ACS will probably be awarded licensure on this spherical contemplating the robust nature of the corporate’s New Jersey crew, operational historical past and the municipal approvals already obtained inside the firm’s working jurisdictions. Moreover, the aim of ACS is to proceed to submit purposes till licences are secured in all main features (cultivation, manufacturing/processing, distribution/wholesale and retail gross sales) of the now quickly increasing hashish {industry} in New Jersey.

In January 2021, Chemistree investee, ImmunoFlex, introduced that it has obtained approval of FLEX 10TM from Well being Canada. In February 2021, ImmunoFlex introduced that it has secured advisory providers and conditional analysis and improvement financing from the Nationwide Analysis Council of Canada Industrial Analysis Help Program for its FLEX 20TM product. Chemistree believes that each developments will help in constructing the worth of ImmunoFlex and offering foundational assist for the eventual launch of its merchandise associated to the immune system to strengthen, assist, and improve the physique’s pure surveillance and response system. By combining pure well being merchandise with pharmaceutical-grade substances and genomics, ImmunoFlex creates patented, premium, immune-boosting merchandise.

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Disclaimer

Chemistree Expertise Inc. revealed this content material on 26 November 2021 and is solely accountable for the data contained therein. Distributed by Public, unedited and unaltered, on 26 November 2021 21:39:04 UTC.