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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 20-F

[   ] REGISTRATION STATEMENT PURSUANT TO SECTION 12(b)
or 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

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

For the fiscal year ended December 31, 2016

OR

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

For the transition period from _______________ to
_______________

OR

[   ] SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report
_______________

Commission file number 333-214067

ELECTRAMECCANICA VEHICLES
CORP.(Exact name of Registrant specified in its
charter)

Not Applicable(Translation of
Registrants name into English)

British Columbia, Canada(Jurisdiction
of incorporation or organization)

102 East 1stAvenueVancouver, British Columbia, Canada, V5T 1A4(Address of principal executive offices)

Kulwant Sandher; (604) 428-7656;
kulwant@electrameccanica.com(Name, Telephone, Email and/or
Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section
12(b) of the Act.

|Title of Each Class | Name of each exchange on which registered
|------------------- | -----------------------------------------
|None                | Not applicable                           

Securities registered or to be registered pursuant to Section
12(g) of the Act. None

Securities for which there is a reporting obligation pursuant
to Section 15(d) of the Act.

Common Shares Without Par Value(Title
of Class)

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Number of outstanding shares of each of the issuers classes of
capital or common stock as of the close of business of the period covered by the
annual report.

41,783,587 Common Shares Without Par Value(See item 3.A below)

Indicate by check mark if the Registrant is a well-known
seasoned issuer as defined in Rule 405 of the Securities Act.

Yes [ 
 ]            No [X]

If this report is an annual or transition report, indicate by
check mark if the Registrant is not required to file reports pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934

Yes [ 
 ]            No [X]

Indicate by check mark whether Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934during the preceding 12 months (or for such shorter
period that Registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.

Yes [  
]            No [X]

Indicate by check mark whether 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 (§232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such
files).

Yes [ 
 ]            No
[   ]

Indicate by check mark whether the Registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging
growth company. See definition of accelerated filer, large accelerated
filer, and emerging growth company in Rule 12b-2 of the Exchange Act.

|Large Accelerated Filer [   ] | Accelerated Filer [   ]    
|----------------------------- | ---------------------------
|Non Accelerated Filer  [   ]  | Emerging Growth Company [X]

If an emerging growth company that prepares its financial
statements in accordance with U.S. GAAP, 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 pursuant to Section 13(a)
of the Exchange Act.  [   ]

Indicate by check mark which basis of accounting the registrant
has used to prepare the financial statements included in this filing:

|U.S. GAAP [   ] | International Financial Reporting
      Standards as issued | Other [   ]
|--------------- | ----------------------------------------------------------- | -----------
|                | by the International Accounting
      Standards Board [X]   |            

If Other has been checked in response to the previous
question, indicate by check mark which financial statement item the registrant
has elected to follow: Item 17[ ] Item 18 [ ] If this is an annual report,
indicate by check mark whether the Registrant is a shell company (as defined in
Rule 12b 2 of the Exchange Act):

Yes [ 
   ]            No [X]

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(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS)

Indicate by check mark whether Registrant has filed all
documents and reports required to be filed by Sections 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of
securities under a plan confirmed by a court.

Not applicable.

__________

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TABLE OF CONTENTS

|                                                                                            | Page
|------------------------------------------------------------------------------------------- | ----
|                                                                                            |     
|PART I                                                                                      | 2   
|                                                                                            |     
|ITEM
      1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS                         | 5   
|                                                                                            |     
|ITEM
      2. OFFER STATISTICS AND EXPECTED TIMETABLE                                       | 5   
|                                                                                            |     
|ITEM
      3. KEY INFORMATION                                                               | 5   
|                                                                                            |     
|ITEM
      4. INFORMATION ON THE COMPANY                                                    | 7   
|                                                                                            |     
|ITEM
      5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS                                  | 37  
|                                                                                            |     
|ITEM
      6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                                    | 43  
|                                                                                            |     
|ITEM
      7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS                             | 71  
|                                                                                            |     
|ITEM
      8. FINANCIAL INFORMATION                                                         | 75  
|                                                                                            |     
|ITEM
      9. THE OFFER AND LISTING                                                         | 76  
|                                                                                            |     
|ITEM
      10. ADDITIONAL INFORMATION                                                       | 76  
|                                                                                            |     
|ITEM
      11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                   | 96  
|                                                                                            |     
|ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY
      SECURITIES                       | 98  
|                                                                                            |     
|PART II                                                                                     | 99  
|                                                                                            |     
|ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES                                    | 99  
|                                                                                            |     
|ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY
      HOLDERS AND USE OF PROCEEDS | 99  
|                                                                                            |     
|ITEM 15. CONTROLS AND PROCEDURES                                                            | 99  
|                                                                                            |     
|ITEM 16. [RESERVED]                                                                         | 100 
|                                                                                            |     
|ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT                                                  | 100 
|                                                                                            |     
|ITEM 16B. CODE OF ETHICS                                                                    | 101 
|                                                                                            |     
|ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES                                            | 101 
|                                                                                            |     
|ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT
      COMMITTEES                  | 102 
|                                                                                            |     
|ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER
      AND AFFILIATED PURCHASERS      | 102 
|                                                                                            |     
|ITEM 16F. CHANGE IN REGISTRANTS CERTIFYING ACCOUNTANT.                                     | 102 
|                                                                                            |     
|ITEM 16G. CORPORATE GOVERNANCE.                                                             | 102 
|                                                                                            |     
|ITEM 16H. MINE SAFETY DISCLOSURE.                                                           | 102 
|                                                                                            |     
|PART III                                                                                    | 103 
|                                                                                            |     
|ITEM 17. FINANCIAL STATEMENTS                                                               | 103 
|                                                                                            |     
|ITEM 18. FINANCIAL STATEMENTS                                                               | 103 
|                                                                                            |     
|ITEM 19. EXHIBITS                                                                           | 103 

___________

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FORWARD LOOKING STATEMENTS

This Annual Report on Form 20-F contains statements that
constitute forward-looking statements. Any statements that are not statements
of historical facts may be deemed to be forward-looking statements. These
statements appear in a number of different places in this Annual Report and, in
some cases, can be identified by words such as anticipates, estimates,
projects, expects, contemplates, intends, believes, plans, may,
will, or their negatives or other comparable words, although not all
forward-looking statements contain these identifying words. Forward-looking
statements in this Annual Report may include, but are not limited to, statements
and/or information related to: strategy, future operations, the size and value
of the order book and the number of orders, the number and timing of building
pre-production vehicles, the projection of timing and delivery of SOLOs in the
future, projected costs, expected production capacity, expectations regarding
demand and acceptance of our products, estimated costs of machinery to equip a
new production facility, and trends in the market in which we operate, plans and
objectives of management.

Forward-looking statements are based on the reasonable
assumptions, estimates, analysis and opinions made in light of our experience
and our perception of trends, current conditions and expected developments, as
well as other factors that we believe to be relevant and reasonable in the
circumstances at the date that such statements are made, but which may prove to
be incorrect. Management believes that the assumption and expectations reflected
in such forward-looking statements are reasonable. Assumptions have been made
regarding, among other things: the Companys ability to build pre-production
SOLOs and to begin production deliveries within certain timelines; the Companys
expected production capacity; prices for machinery to equip a new production
facility, labor costs and material costs, remaining consistent with the
Companys current expectations; production of SOLOs meeting expectations and
being consistent with estimates; equipment operating as anticipated; there being
no material variations in the current regulatory environment; and the Companys
ability to obtain financing as and when required and on reasonable terms.
Readers are cautioned that the foregoing list is not exhaustive of all factors
and assumptions which may have been used.

Such risks are discussed in Item 3.D Risk Factors. In
particular, without limiting the generality of the foregoing disclosure, the
statements contained in Item 4.B.  Business Overview, Item 5  Operating and
Financial Review and Prospects and Item 11  Quantitative and Qualitative
Disclosures About Market Risk are inherently subject to a variety of risks and
uncertainties that could cause actual results, performance or achievements to
differ significantly. Such risks, uncertainties and other factors include but
are not limited to:

- general economic and business conditions, including changes in interest
  rates;
- prices of other electric vehicles, costs associated with manufacturing
  electric vehicles and other economic conditions;
- natural phenomena;
- actions by government authorities, including changes in government
  regulation;
- uncertainties associated with legal proceedings;
- changes in the electric vehicle market;

- 2 -

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- future decisions by management in response to changing conditions;
- the Companys ability to execute prospective business plans;
- misjudgments in the course of preparing forward-looking statements;
- the Company ability to raise sufficient funds to carry out its proposed
  business plan;
- consumers willingness to adopt three-wheeled single passenger electric
  vehicles;
- declines in the range of the Companys electric vehicles on a single charge
  over time may negatively influence potential customers decisions to purchase
  such vehicles;
- developments in alternative technologies or improvements in the internal
  combustion engine;
- inability to keep up with advances in electric vehicle technology;
- inability to design, develop, market and sell new electric vehicles and
  services that address additional market opportunities;
- dependency on certain key personnel and any inability to retain and attract
  qualified personnel;
- in experience in mass-producing electric vehicles;
- inability to reduce and adequately control operating costs;
- failure of the Companys vehicles to perform as expected;
- inexperience in servicing electric vehicles;
- inability to succeed in establishing, maintaining and strengthening the
  Electrameccanica brand;
- disruption of supply or shortage of raw materials;
- the unavailability, reduction or elimination of government and economic
  incentives;
- failure to manage future growth effectively; and
- labor and employment risks.

- 3 -

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Although management has attempted to identify important factors
that could cause actual results to differ materially from those contained in
forward-looking statements, there may be other factors that cause results not to
be as anticipated, estimated or intended. There is no assurance that
forward-looking statements will prove to be accurate, as actual results and
future events could differ materially from those anticipated in such
forward-looking statements. Accordingly, readers should not place undue reliance on forward-looking
statements. We wish to advise you that these cautionary remarks expressly
qualify, in their entirety, all forward-looking statements attributable to our
Company or persons acting on our Companys behalf. The Company does not
undertake to update any forward-looking statements to reflect actual results,
changes in assumptions or changes in other factors affecting such statements,
except as, and to the extent required by, applicable securities laws. You should
carefully review the cautionary statements and risk factors contained in this
Annual Report and other documents that the Company may file from time to time
with the securities regulators.

- 4 -

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PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND
ADVISERS

Not Applicable.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not Applicable.

ITEM 3. KEY INFORMATION

A.Selected financial data

The following tables sets forth selected financial information
for Electrameccanica Vehicles Corp. (the Company) for the fiscal year ended
December 31, 2016 and for the period from February 16, 2015 (date of inception)
to December 31, 2015 prepared in accordance with International Financial
Reporting Standards (IFRS) as issued by the International Accounting Standards
Board (IASB). The information for the last fiscal year ended December 31, 2016
and for the period from February 16, 2015 to December 31, 2015 have been
extracted from the Companys audited financial statements and related notes
included herein and should be read in conjunction with such financial statements
appearing in Item 18  Financial Statements and with the information
appearing in Item 5  Operating and Financial Review and Prospects. The
financial statements included in Item 18 in this Annual Report are prepared
under IFRS.

The data is expressed in Canadian dollars (CDN$), unless
otherwise described. We refer readers to Currency and Exchange Rates below for
a history of exchange rates between the Canadian dollar and the U.S. dollar.

Reported under IFRS

Statement of OperationsYear ended Dec. 31, 2015
    Year ended Dec. 31, 2016Revenues
    -
    -Gross Margin
    -
    -Net Loss
    $995,833
    $8,973,347Basic and Diluted Earnings (Loss) per Share
    ($0.22)
    ($0.27)Basic and Diluted Earnings Loss per Share after 1 for 5
      share split
    ($0.04) (1)
    N/A


Balance SheetDecember 31, 2015
    December 31, 2016Cash
    $106,357
    $3,916,283Current Assets
    $197,309
    $4,437,152Total Assets
    $213,118
    $4,787,766Current Liabilities
    $346,416
    $881,176Total Liabilities
    $346,416
    $881,176Shareholders Equity (Deficiency)
    ($133,298)
    $3,906,590


- 5 -

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|Notes:
|------
|(1)   

Currency and Exchange Rates

Unless otherwise indicated, all references to dollar amounts
are to Canadian dollars. The rate of exchange for the U.S. dollar, expressed in
Canadian dollars, as of April 25, 2017, was 1.3277, based on the daily noon rate
as published by the Bank of Canada. Exchange rates published by the Bank of
Canada are available on its website, www.bankofcanada.ca, are nominal
quotations  not buying or selling rates  and are intended for statistical or
analytical purposes.

The following table sets forth the high and low exchange rates
for each month during the previous six months, based on the noon rate as
published by the Bank of Canada:

Previous Six Months

October 2017
    November 2017
    December 2017
    January 2017
    February 2017
    March 2017High Rate
    1.3403
    1.3582
    1.3556
    1.3438
    1.3248
    1.3505Low Rate
    1.3104
    1.3337
    1.3120
    1.3030
    1.3004
    1.3279


The following table sets forth:

- The rates of exchange for the U.S. dollar, expressed in Canadian dollars,
  in effect at the end of each of the periods indicated;
- The average of the exchange rates in effect on the last day of each month
  during such periods; and
- The high and low exchange rate during such periods, in each case based on
  the noon rate as published by the Bank of Canada.

Years ending December 31

2016
    2015Rate at end of Period
    1.3427
    1.3840Average Rate During Period
    1.3248
    1.2787High Rate
    1.4589
    1.3990Low Rate
    1.2544
    1.1728


B.Capitalization And Indebtedness

Not applicable.

C.Reasons for the offer and use of
proceeds

Not applicable.

- 6 -

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D.Risk Factors

Our business operations and our securities are subject to a
number of substantial risks, including those described below. Any person who is
not in a position to lose the entire amount of any investment should not invest
in our securities. You should carefully consider the risks described below and
the other information in this Annual Report on Form 20F before investing in our
common shares. The risks and uncertainties described below are not the only ones
we may face. Additional risks and uncertainties that we are unaware of, or that
we currently deem to be immaterial, may also become important factors that
affect us. If any of these or other risks actually occur, our business,
financial condition and operating results, as well as the trading price or value
of our securities could be materially and adversely affected.

Risks Relating to our Business and Industry

We have a limited operating history and have not yet
generated any revenues.

Our limited operating history makes evaluating our business and
future prospects difficult, and may increase the risk of your investment. We
were formed in February 2015 and we have not yet begun producing or delivering
our first vehicle. To date, we have no revenues. We intend in the longer term to
derive substantial revenues from the sales of our SOLO vehicle and other
intended elective vehicles. The SOLO is in development, and we do not expect to
start delivering to customers until the end of the first quarter or early second
quarter of 2017. The SOLO vehicle requires significant investment prior to
commercial introduction and may never be successfully developed or commercially
successful.

It is anticipated that we will experience an increase in
losses prior to the launch of the SOLO. For the year ended December 31,
2015, we generated a loss of $995,833. For the fiscal year ended December 31,
2016, we generated a loss of $8,973,347, bringing our accumulated deficit to
$9,969,180. We anticipate generating a significant loss for the current fiscal
year. The independent auditors report on our financial statements includes an
explanatory paragraph relating to our ability to continue as a going concern.

We have no revenues, are currently in debt and expect
significant increases in costs and expenses to forestall revenues for the
foreseeable future. Even if we are able to successfully develop the SOLO, there
can be no assurance that we will be commercially successful. If we are to ever
achieve profitability we must have a successful commercial introduction and
acceptance of the SOLO, which may not occur.

We expect the rate at which we will incur losses to increase
significantly in future periods from current levels as we:

- design, develop and manufacture the SOLO and its components;
- develop and equip our manufacturing facility;
- build up inventories of parts and components for the SOLO;
- open Electrameccanica stores;
- expand our design, development, maintenance and repair capabilities;

- 7 -

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- develop and increase our sales and marketing activities; and
- develop and increase our general and administrative functions to support
  our growing operations.

Because we will incur the costs and expenses from these efforts
before we receive any revenues with respect thereto, our losses in future
periods will be significantly greater than the losses we would incur if we
developed the business more slowly. In addition, we may find that these efforts
are more expensive than we currently anticipate or that these efforts may not
result in increases in our revenues, which would further increase our losses.

We currently have negative operating cash flows and if we
are unable to generate positive operating cash flows in the future our viability
as an operating business will be adversely affected.

We have made significant up-front investments in research and
development, sales and marketing, and general and administrative expenses in
order to rapidly develop and expand our business. We are currently incurring
expenditures related to our operations that have generated a negative operating
cash flow. Operating cash flow may decline in certain circumstances, many of
which are beyond our control. There is no assurance that sufficient revenues
will be generated in the near future. Because we continue to incur such
significant future expenditures for research and development, sales and
marketing, and general and administrative expenses, we may continue to
experience negative cash flow until we reach a sufficient level of sales with
positive gross margins to cover operating expenses. An inability to generate
positive cash flow until we reach a sufficient level of sales with positive
gross margins to cover operating expenses or raise additional capital on
reasonable terms will adversely affect our viability as an operating business.

In order to carry out our proposed business plan to
develop, manufacture, sell and service electric vehicles, we will require a
significant amount of capital.

We intend to raise our cash requirements for the next 12 months
through the sale of our equity securities in private placements, through
shareholder loans or possibly through a registered public offering (either
self-underwritten or through a broker-dealer). If we are unsuccessful in raising
enough funds through such capital-raising efforts, we may review other financing
possibilities such as bank loans. There is no assurance that any financing will
be available to us or if available, on terms that will be acceptable to us. We
intend to negotiate with our management and consultants to pay parts of their
salaries and fees with stock and stock options in lieu of cash.

Our ability to
  obtain the necessary financing to carry out our business plan is subject to a
  number of factors, including general market conditions and investor acceptance
  of our business plan. These factors may make the timing, amount, terms and
  conditions of such financing unattractive or unavailable to us. If we are unable
  to raise sufficient funds, we will have to significantly reduce our spending,
  delay or cancel our planned activities or substantially change our current
  corporate structure. There is no guarantee that we will be able to obtain any
  funding or that we will have sufficient resources to conduct our business as
  projected, any of which could mean that we will be forced to discontinue our
  operations.

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Terms of subsequent financings may adversely impact your
investment.

We may have to engage in common equity, debt, or preferred
stock financing in the future. Your rights and the value of your investment in
the common stock could be reduced. Interest on debt securities could increase
costs and negatively impacts operating results. Preferred stock could be issued
in series from time to time with such designation, rights, preferences, and
limitations as needed to raise capital. The terms of preferred stock could be
more advantageous to those investors than to the holders of common stock. In
addition, if we need to raise more equity capital from the sale of common stock,
institutional or other investors may negotiate terms at least as, and possibly
more, favorable than the terms of your investment. Shares of common stock which
we sell could be sold into any market which develops, which could adversely
affect the market price.

Our future growth is dependent upon consumers
willingness to adopt three-wheeled single passenger electric vehicles.

Our growth is highly dependent upon the adoption by consumers
of, and we are subject to an elevated risk of any reduced demand for,
alternative fuel vehicles in general and electric vehicles in particular. If the
market for three-wheeled single passenger electric vehicles does not develop as
we expect or develops more slowly than we expect, our business, prospects,
financial condition and operating results will be harmed. The market for
alternative fuel vehicles is relatively new, rapidly evolving, characterized by
rapidly changing technologies, price competition, additional competitors,
evolving government regulation and industry standards, frequent new vehicle
announcements and changing consumer demands and behaviors. Factors that may
influence the adoption of alternative fuel vehicles, and specifically electric
vehicles, include:

- perceptions about electric vehicle quality, safety (in particular with
  respect to lithium-ion battery packs), design, performance and cost,
  especially if adverse events or accidents occur that are linked to the quality
  or safety of electric vehicles;
- perceptions about vehicle safety in general, in particular safety issues
  that may be attributed to the use of advanced technology, including vehicle
  electronics and braking systems;
- the limited range over which electric vehicles may be driven on a single
  battery charge;
- the decline of an electric vehicles range resulting from deterioration
  over time in the batterys ability to hold a charge;
- concerns about electric grid capacity and reliability, which could derail
  our efforts to promote electric vehicles as a practical solution to vehicles
  which require gasoline;
- the availability of alternative fuel vehicles, including plug-in hybrid
  electric vehicles;
- improvements in the fuel economy of the internal combustion engine;
- the availability of service for electric vehicles;

- 9 -

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- the environmental consciousness of consumers;
- volatility in the cost of oil and gasoline;
- government regulations and economic incentives promoting fuel efficiency
  and alternate forms of energy;
- access to charging stations, standardization of electric vehicle charging
  systems and consumers perceptions about convenience and cost to charge an
  electric vehicle;
- the availability of tax and other governmental incentives to purchase and
  operate electric vehicles or future regulation requiring increased use of
  non-polluting vehicles; and
- perceptions about and the actual cost of alternative fuel.

The influence of any of the factors described above may cause
current or potential customers not to purchase our electric vehicles, which
would materially adversely affect our business, operating results, financial
condition and prospects.

The range of our electric vehicles on a single charge
declines over time which may negatively influence potential customers decisions
whether to purchase our vehicles.

The range of our electric vehicles on a single charge declines
principally as a function of usage, time and charging patterns. For example, a
customers use of their SOLO vehicle as well as the frequency with which they
charge the battery of their SOLO vehicle can result in additional deterioration
of the batterys ability to hold a charge. We currently expect that our battery
pack will retain approximately 85% of its ability to hold its initial charge
after approximately 3,000 charge cycles and 8 years, which will result in a
decrease to the vehicles initial range. Such battery deterioration and the
related decrease in range may negatively influence potential customer decisions
whether to purchase our vehicles, which may harm our ability to market and sell
our vehicles.

Developments in alternative technologies or improvements
in the internal combustion engine may materially adversely affect the demand for
our electric vehicles.

Significant developments in alternative technologies, such as
advanced diesel, ethanol, fuel cells or compressed natural gas, or improvements
in the fuel economy of the internal combustion engine, may materially and
adversely affect our business and prospects in ways we do not currently
anticipate. For example, fuel which is abundant and relatively inexpensive in
North America, such as compressed natural gas, may emerge as consumers
preferred alternative to petroleum based propulsion. Any failure by us to
develop new or enhanced technologies or processes, or to react to changes in
existing technologies, could materially delay our development and introduction
of new and enhanced electric vehicles, which could result in the loss of
competitiveness of our vehicles, decreased revenue and a loss of market share to
competitors.

- 10 -

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If we are unable to keep up with advances in electric
vehicle technology, we may suffer a decline in our competitive position.

We may be unable to keep up with changes in electric vehicle
technology and, as a result, may suffer a decline in our competitive position.
Any failure to keep up with advances in electric vehicle technology would result
in a decline in our competitive position which would materially and adversely
affect our business, prospects, operating results and financial condition. Our
research and development efforts may not be sufficient to adapt to changes in
electric vehicle technology. As technologies change we plan to upgrade or adapt
our vehicles and introduce new models in order to continue to provide vehicles
with the latest technology, in particular battery cell technology. However, our
vehicles may not compete effectively with alternative vehicles if we are not
able to source and integrate the latest technology into our vehicles. For
example, we do not manufacture battery cells which makes us dependent upon other
suppliers of battery cell technology for our battery packs.

If we are unable to design, develop, market and sell new
electric vehicles and services that address additional market opportunities, our
business, prospects and operating results will suffer.

We may not be able to successfully develop new electric
vehicles and services, address new market segments or develop a significantly
broader customer base. To date, we have focused our business on the sale of the
SOLO, a three-wheeled single passenger electric vehicle and have targeted mainly
urban residents of modest means. We will need to address additional markets and
expand our customer demographic in order to further grow our business. Our
failure to address additional market opportunities would harm our business,
financial condition, operating results and prospects.

Demand in the vehicle industry is highly
volatile.

Volatility of demand in the vehicle industry may materially and
adversely affect our business prospects, operating results and financial
condition. The markets in which we will be competing have been subject to
considerable volatility in demand in recent periods. Demand for automobile sales
depends to a large extent on general, economic, political and social conditions
in a given market and the introduction of new vehicles and technologies. As a
new start-up manufacturer, we will have fewer financial resources than more
established vehicle manufacturers to withstand changes in the market and
disruptions in demand.

We depend on certain key personnel, and our success will
depend on our continued ability to retain and attract such qualified personnel.

Our success is dependent on the efforts, abilities and
continued service of Jerry Kroll  Chief Executive Officer, Henry Reisner 
Chief Operating Officer, Kulwant Sandher  Chief Financial Officer, and Ed
Theobald  General Manager. A number of these key employees and consultants have
significant experience in the automobile manufacturing industry. A loss of
service from any one of these individuals may adversely affect our operations,
and we may have difficulty or may not be able to locate and hire a suitable
replacement. We have not obtained any key man insurance on certain key
personnel.

Since we have little experience in mass-producing
electric vehicles, any delays or difficulties in transitioning from producing
custom vehicles to mass-producing vehicles may have a material adverse effect on
our business, prospects and operating results.

Our management team has experience in producing custom designed
vehicles and is now switching focus to mass producing electric vehicles in a
rapidly evolving and competitive market.

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If we are unable to implement our business plans in the
timeframes estimated by management and successfully transition into a
mass-producing electric vehicle manufacturing business, then our business,
prospects, operating results and financial condition will be negatively impacted
and our ability to grow our business will be harmed.

We are subject to numerous environmental and health and
safety laws and any breach of such laws may have a material adverse effect on
our business and operating results.

We are subject to numerous environmental and health and safety
laws, including statutes, regulations, bylaws and legal requirements contained
in approvals or that arise under common law. These laws relate to the
generation, use, handling, storage, transportation and disposal of regulated
substances, including hazardous substances, dangerous goods and waste, emissions
or discharges into soil, water and air, including noise and odours (which could
result in remediation obligations), and occupational health and safety matters,
including indoor air quality. These legal requirements vary by location and can
arise under federal, provincial, state or municipal laws. Any breach of such
laws and/or requirements would have a material adverse effect on our Company and
its operating results.

Our vehicles are subject to motor vehicle standards and
the failure to satisfy such mandated safety standards would have a material
adverse effect on our business and operating results.

All vehicles sold must comply with federal, state and
provincial motor vehicle safety standards. In both Canada and the United States
vehicles that meet or exceed all federally mandated safety standards are
certified under the federal regulations. In this regard, Canadian and U.S. motor
vehicle safety standards are substantially the same. Rigorous testing and the
use of approved materials and equipment are among the requirements for achieving
federal certification. Failure by us to have the SOLO or any future model
electric vehicle satisfy motor vehicle standards would have a material adverse
effect on our business and operating results.

If we are unable to reduce and adequately control the
costs associated with operating our business, including our costs of
manufacturing, sales and materials, our business, financial condition, operating
results and prospects will suffer.

If we are unable to reduce and/or maintain a sufficiently low
level of costs for designing, manufacturing, marketing, selling and distributing
and servicing our electric vehicles relative to their selling prices, our
operating results, gross margins, business and prospects could be materially and
adversely impacted.

If our vehicles fail to perform as expected, our ability
to develop, market and sell our electric vehicles could be harmed.

Our vehicles may contain defects in design and manufacture that
may cause them not to perform as expected or that may require repair. For
example, our vehicles use a substantial amount of software code to operate.
Software products are inherently complex and often contain defects and errors
when first introduced. While we have performed extensive internal testing, we
currently have a very limited frame of reference by which to evaluate the
performance of our SOLO in the hands of our customers and currently have no
frame of reference by which to evaluate the performance of our SOLO after
several years of customer driving.

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We have very limited experience servicing our vehicles.
If we are unable to address the service requirements of our future customers our
business will be materially and adversely affected.

If we are unable to successfully address the service
requirements of our future customers our business and prospects will be
materially and adversely affected. In addition, we anticipate the level and
quality of the service we will provide our SOLO customers will have a direct
impact on the success of our future vehicles. If we are unable to satisfactorily
service our SOLO customers, our ability to generate customer loyalty, grow our
business and sell additional SOLOs as well as our future intended vehicles could
be impaired.

We have very limited experience servicing our vehicles. As of
December 31, 2016 we had not sold any SOLOs as we do not plan to begin
production of any SOLO vehicles until the end of the first quarter or early
second quarter of 2017, and do not have any experience servicing these cars as
they do not exist currently. Servicing electric vehicles is different than
servicing vehicles with internal combustion engines and requires specialized
skills, including high voltage training and servicing techniques.

We may not succeed in establishing, maintaining and
strengthening the Electrameccanica brand, which would materially and adversely
affect customer acceptance of our vehicles and components and our business,
revenues and prospects.

Our business and prospects are heavily dependent on our ability
to develop, maintain and strengthen the Electrameccanica brand. Any failure to
develop, maintain and strengthen our brand may materially and adversely affect
our ability to sell the SOLO and planned electric vehicles. If we are not able
to establish, maintain and strengthen our brand, we may lose the opportunity to
build a critical mass of customers. Promoting and positioning our brand will
likely depend significantly on our ability to provide high quality electric cars
and maintenance and repair services, and we have very limited experience in
these areas. In addition, we expect that our ability to develop, maintain and
strengthen the Electrameccanica brand will also depend heavily on the success of
our marketing efforts. To date, we have limited experience with marketing
activities as we have relied primarily on the internet, word of mouth and
attendance at industry trade shows to promote our brand. To further promote our
brand, we may be required to change our marketing practices, which could result
in substantially increased advertising expenses, including the need to use
traditional media such as television, radio and print. The automobile industry
is intensely competitive, and we may not be successful in building, maintaining
and strengthening our brand. Many of our current and potential competitors,
particularly automobile manufacturers headquartered in Detroit, Japan and the
European Union, have greater name recognition, broader customer relationships
and substantially greater marketing resources than we do. If we do not develop
and maintain a strong brand, our business, prospects, financial condition and
operating results will be materially and adversely impacted.

Increases in costs, disruption of supply or shortage of
raw materials, in particular lithium-ion cells, could harm our business.

We may experience increases in the cost or a sustained
interruption in the supply or shortage of raw materials. Any such an increase or
supply interruption could materially negatively impact our business, prospects,
financial condition and operating results. We use various raw materials in our
business including aluminum, steel, carbon fiber, non-ferrous metals such as
copper, as well as cobalt. The prices for these raw materials fluctuate
depending on market conditions and global demand for these materials and could
adversely affect our business and operating results. For instance, we are
exposed to multiple risks relating to price fluctuations for lithium-ion cells.
These risks include:

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- the inability or unwillingness of current battery manufacturers to build or
  operate battery cell manufacturing plants to supply the numbers of lithium-ion
  cells required to support the growth of the electric or plug-in hybrid vehicle
  industry as demand for such cells increases;
- disruption in the supply of cells due to quality issues or recalls by the
  battery cell manufacturers; and
- an increase in the cost of raw materials, such as cobalt, used in
  lithium-ion cells.

Our business is dependent on the continued supply of battery
cells for our vehicles. Any disruption in the supply of battery cells from our
supplier could temporarily disrupt the planned production of the SOLO until such
time as a different supplier is fully qualified. Moreover, battery cell
manufacturers may choose to refuse to supply electric vehicle manufacturers to
the extent they determine that the vehicles are not sufficiently safe.
Furthermore, current fluctuations or shortages in petroleum and other economic
conditions may cause us to experience significant increases in freight charges
and raw material costs. Substantial increases in the prices for our raw
materials would increase our operating costs, and could reduce our margins if we
cannot recoup the increased costs through increased electric vehicle prices.
There can be no assurance that we will be able to recoup increasing costs of raw
materials by increasing vehicle prices. We have also already announced an
estimated price for the base model of our planned SOLO. However, any attempts to
increase the announced or expected prices in response to increased raw material
costs could be viewed negatively by our potential customers, result in
cancellations of SOLO reservations and could materially adversely affect our
brand, image, business, prospects and operating results.

The unavailability, reduction or elimination of
government and economic incentives could have a material adverse effect on our
business, financial condition, operating results and prospects.

Any reduction, elimination or discriminatory application of
government subsidies and economic incentives because of policy changes, the
reduced need for such subsidies and incentives due to the perceived success of
the electric vehicle, fiscal tightening or other reasons may result in the
diminished competitiveness of the alternative fuel vehicle industry generally or
our electric vehicles in particular. This could materially and adversely affect
the growth of the alternative fuel automobile markets and our business,
prospects, financial condition and operating results.

If we fail to manage future growth effectively, we may
not be able to market and sell our vehicles successfully.

Any failure to manage our growth effectively could materially
and adversely affect our business, prospects, operating results and financial
condition. We plan to expand our operations in the near future in connection
with the planned production of the SOLO. Our future operating results depend to
a large extent on our ability to manage this expansion and growth successfully.
Risks that we face in undertaking this expansion include:

- training new personnel;
- forecasting production and revenue;
- controlling expenses and investments in anticipation of expanded
  operations;

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- establishing or expanding design, manufacturing, sales and service
  facilities;
- implementing and enhancing administrative infrastructure, systems and
  processes;
- addressing new markets; and
- establishing international operations.

We intend to continue to hire a number of additional personnel,
including design and manufacturing personnel and service technicians for our
electric vehicles. Competition for individuals with experience designing,
manufacturing and servicing electric vehicles is intense, and we may not be able
to attract, assimilate, train or retain additional highly qualified personnel in
the future. The failure to attract, integrate, train, motivate and retain these
additional employees could seriously harm our business and prospects.

Our business may be adversely affected by union
activities.

Although none of our employees are currently represented by a
labor union, it is common throughout the automobile industry generally for many
employees at automobile companies to belong to a union, which can result in
higher employee costs and increased risk of work stoppages. As we expand our
business to include full in-house manufacturing of our SOLO vehicle, there can
be no assurances that our employees will not join or form a labor union or that
we will not be required to become a union signatory. We are also directly or
indirectly dependent upon companies with unionized work forces, such as parts
suppliers and trucking and freight companies, and work stoppages or strikes
organized by such unions could have a material adverse impact on our business,
financial condition or operating results. If a work stoppage occurs, it could
delay the manufacture and sale of our electric vehicles and have a material
adverse effect on our business, prospects, operating results or financial
condition.

We may become subject to product liability claims, which
could harm our financial condition and liquidity if we are not able to
successfully defend or insure against such claims.

We may become subject to product liability claims, which could
harm our business, prospects, operating results and financial condition. The
automobile industry experiences significant product liability claims and we face
inherent risk of exposure to claims in the event our vehicles do not perform as
expected or malfunction resulting in personal injury or death. Our risks in this
area are particularly pronounced given we have not delivered any SOLO vehicles
to date and limited field experience of those vehicles. A successful product
liability claim against us could require us to pay a substantial monetary award.
Moreover, a product liability claim could generate substantial negative
publicity about our vehicles and business and inhibit or prevent
commercialization of other future vehicle candidates which would have material
adverse effect on our brand, business, prospects and operating results. We plan
to maintain product liability insurance for all our vehicles with annual limits
of approximately $5 million on a claims made basis, but we cannot assure that
our insurance will be sufficient to cover all potential product liability
claims. Any lawsuit seeking significant monetary damages either in excess of our
coverage, or outside of our coverage, may have a material adverse effect on our
reputation, business and financial condition. We may not be able to secure
additional product liability insurance coverage on commercially acceptable terms
or at reasonable costs when needed, particularly if we do face liability for our products and are
forced to make a claim under our policy.

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Our patent applications may not result in issued patents,
which may have a material adverse effect on our ability to prevent others from
interfering with our commercialization of our products.

The status of patents involves complex legal and factual
questions and the breadth and effectiveness of patented claims is uncertain. We
cannot be certain that we are the first creator of inventions covered by pending
patent applications or the first to file patent applications on these
inventions, nor can we be certain that our pending patent applications will
result in issued patents or that any of our issued patents will afford
sufficient protection against someone creating a knockoff of our products, or as
a defensive portfolio against a competitor who claims that we are infringing its
patents. In addition, patent applications filed in foreign countries are subject
to laws, rules and procedures that differ from those of the United States, and
thus we cannot be certain that foreign patent applications, if any, will result
in issued patents in those foreign jurisdictions or that such patents can be
effectively enforced, even if they relate to patents issued in the U.S. In
addition, others may obtain patents that we need to take a license to or design
around, either of which would increase costs and may adversely affect our
business, prospects, financial condition and operating results.

We may need to defend ourselves against patent or
trademark infringement claims, which may be time-consuming and would cause us to
incur substantial costs.

Companies, organizations or individuals, including our
competitors, may hold or obtain patents, trademarks or other proprietary rights
that would prevent, limit or interfere with our ability to make, use, develop,
sell or market our vehicles or components, which could make it more difficult
for us to operate our business. From time to time, we may receive communications
from holders of patents or trademarks regarding their proprietary rights.
Companies holding patents or other intellectual property rights may bring suits
alleging infringement of such rights or otherwise assert their rights and urge
us to take licenses. In addition, if we are determined to have infringed upon a
third partys intellectual property rights, we may be required to do one or more
of the following:

- cease selling, incorporating certain components into, or using vehicles or
  offering goods or services that incorporate or use the challenged intellectual
  property;
- pay substantial damages;
- seek a license from the holder of the infringed intellectual property
  right, which license may not be available on reasonable terms or at all;
- redesign our vehicles or other goods or services; or
- establish and maintain alternative branding for our products and services.

In the event of a successful claim of infringement against us
and our failure or inability to obtain a license to the infringed technology or
other intellectual property right, our business, prospects, operating results
and financial condition could be materially adversely affected. In addition, any
litigation or claims, whether or not valid, could result in substantial costs,
negative publicity and diversion of resources and management attention.

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You may face difficulties in protecting your interests,
and your ability to protect your rights through the U.S. federal courts may be
limited because we are incorporated under the laws of the Province of British
Columbia, a substantial portion of our assets are in Canada and all of our
directors and executive officers reside outside the United States

We are organized under the laws of the Business Corporations
Act (British Columbia) and our executive offices are located outside of the
United States in Vancouver, British Columbia. All of our directors and officers,
as well as our auditor, reside outside the United States. In addition, a
substantial portion of their assets and our assets are located outside of the
United States. As a result, you may have difficulty serving legal process within
the United States upon us or any of these persons. You may also have difficulty
enforcing, both in and outside of the United States, judgments you may obtain in
U.S. courts against us or these persons in any action, including actions based
upon the civil liability provisions of U.S. Federal or state securities laws.
Furthermore, there is substantial doubt as to the enforceability in Canada
against us or against any of our directors, officers and the expert named in
this prospectus who are not residents of the United States, in original actions
or in actions for enforcement of judgments of U.S. courts, of liabilities based
solely upon the civil liability provisions of the U.S. federal securities laws.
In addition, shareholders in British Columbia companies may not have standing to
initiate a shareholder derivative action in U.S. federal courts.

As a result, our public shareholders may have more difficulty
in protecting their interests through actions against us, our management, our
directors or our major shareholders than would shareholders of a corporation
incorporated in a jurisdiction in the United States.

Risk Related to Our Common Stock

Our executive officers and directors own 74.1% of our
common stock.

Our executive officers and directors beneficially own, in the
aggregate, 74.1% of our common stock, which includes shares that our executive
officers and directors have the right to acquire pursuant to warrants and stock
options which have vested and will vest within 60 days of April 25, 2017. As a
result, they will be able to exercise a significant level of control over all
matters requiring shareholder approval, including the election of directors,
amendments to our Articles, and approval of significant corporate transactions.
This control could have the effect of delaying or preventing a change of control
of the Company or changes in management and will make the approval of certain
transactions difficult or impossible without the support of these shareholders.

There currently is no public trading market for our
securities and an active market may not develop or, if developed, be sustained.
If a public trading market does not develop, you may not be able to sell any of
your securities.

There is currently no public trading market for our common
stock. Therefore, there is no central place, such as stock exchange or
electronic trading system, to resell your shares. If you do wish to resell your
shares, you will have to locate a buyer and negotiate your own sale. As a
result, you may be unable to sell your shares, or you may be forced to sell them
at a loss.

We cannot assure you that there will be a market in the future
for our common stock. We intend to apply to have our common stock quoted on the
OTCQB operated by the OTC Markets Group Inc. after we receive a trading symbol
from the Financial Industry Regulatory Authority (FINRA), but if for any
reason our common stock is not quoted on the OTCQB or a public trading market
does not otherwise develop, purchasers of our securities may have difficulty
selling their shares. Even if our common stock is quoted on the
OTCQB, the trading of securities on the OTCQB is often sporadic and investors
may have difficulty buying and selling our shares or obtaining market quotations
for them, which may have a negative effect on the market price for our common
stock. You may not be able to sell your shares at their purchase price or at any
price at all. Accordingly, you may have difficulty reselling any shares you
purchase from us or our selling security holders.

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The continued sale of our equity securities will dilute
the ownership percentage of our existing stockholders and may decrease the
market price for our common stock.

Given our lack of revenues, we will likely have to issue
additional equity securities to obtain working capital we require for the next
12 months. Our efforts to fund our intended business plans will therefore result
in dilution to our existing stockholders. In short, our continued need to sell
equity will result in reduced percentage ownership interests for all of our
investors, which may decrease the market price for our common stock.

Additional issuances of our common stock may result in
dilution to our existing common stockholders and issuances of our preferred
stock may adversely affect the rights of the holders of our common stock and
reduce the value of our common stock.

Our Notice of Articles authorize the issuance of an unlimited
number of shares of common stock. The Board of Directors has the authority to
issue additional shares of our capital stock to provide additional financing in
the future and the issuance of any such shares may result in a reduction of the
book value or market price, if one exists at the time, of the outstanding shares
of our common stock. If we do issue any such additional shares, such issuance
also will cause a reduction in the proportionate ownership and voting power of
all other stockholders. As a result of such dilution, if you acquire share of
our common stock, your proportionate ownership interest and voting power could
be decreased. Further, any such issuances could result in a change of control.

In addition, our Notice of Articles authorize the issuance of
an unlimited number of shares of preferred stock. Our Board of Directors has the
authority to create one or more series of preferred stock, and without
shareholder approval, issue shares of preferred stock with rights superior to
the rights of the holders of shares of common stock. As a result, shares of
preferred stock could be issued quickly and easily, adversely affecting the
rights of holder of shares of common stock and could be issued with terms
calculated to delay or prevent a change in control or make removal of management
more difficult. Although we currently have no plans to create any series of
preferred stock and have not present plans to issue any shares of preferred
stock, any creation and issuance of preferred stock in the future could
adversely affect the rights of the holders of common stock and reduce the value
of the common stock.

We do not intend to pay dividends and there will thus be
fewer ways in which you are able to make a gain on your investment.

We have never paid any cash or stock dividends and we do not
intend to pay any dividends for the foreseeable future. To the extent that we
require additional funding currently not provided for in our financing plan, our
funding sources may prohibit the payment of any dividends. Because we do not
intend to declare dividends, any gain on your investment will need to result
from an appreciation in the price of our common stock. There will therefore be
fewer ways in which you are able to make a gain on your investment.

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Because the SEC imposes additional sales practice
requirements on brokers who deal in shares of penny stocks, some brokers may be
unwilling to trade our securities. This means that you may have difficulty
reselling your shares, which may cause the value of your investment to
decline.

Our shares are classified as penny stocks and are covered by
section 15(g) of the Exchange Act, which imposes additional sales practice
requirements on broker-dealers who sell our securities in this offering or in
the aftermarket. For sales of our securities, broker-dealers must make a special
suitability determination and receive a written agreement from you prior to
making a sale on your behalf. Because of the imposition of the foregoing
additional sales practices, it is possible that broker-dealers will not want to
make a market in our shares. This could prevent you from reselling your shares
and may cause the value of your investment to decline.

FINRA sales practice requirements may limit your ability
to buy and sell our common stock, which could depress the price of our
shares.

FINRA rules require broker-dealers to have reasonable grounds
for believing that an investment is suitable for a customer before recommending
that investment to the 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 and investment objectives, among other things. Under interpretations
of these rules, FINRA believes that there is a high probability such speculative
low-priced securities will not be suitable for at least some customers. Thus,
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 shares, have an adverse effect on the market for our shares, and
thereby depress our share price.

You may face significant restrictions on the resale of
your shares due to state blue sky laws. Each state has its own
securities laws, often called blue sky laws, which: (1) limit sales of
securities to a states residents unless the securities are registered in that
state or qualify for an exemption from registration; and (2) govern the
reporting requirements for broker-dealers doing business directly or indirectly
in the state. Before a security is sold in a state, there must be a registration
in place to cover the transaction, or it must be exempt from registration. The
applicable broker must also be registered in that state.

We do not know whether our securities will be registered or
exempt from registration under the laws of any state. A determination regarding
registration will be made by the broker-dealers, if any, who agree to serve as
market makers for our common stock. There may be significant state blue sky law
restrictions on the ability of investors to sell, and on purchasers to buy, our
securities. You should therefore consider the resale market for our common stock
to be limited, as you may be unable to resell your shares without the
significant expense of state registration or qualification.

Resale restrictions for British Columbia residents and
other Canadian residents may limit your ability to sell your shares.

If you are a resident of British Columbia, until we have filed
a prospectus with the British Columbia Securities Commission, for which a
receipt has been issued, and four months and a day have passed from the date you
acquired your shares from us, you must rely on an exemption from the prospectus
requirements of B.C. securities laws to resell your shares. Since our common
stock is not currently quoted on the OTC Bulletin Board, OTC
Pink, OTCQB or OTCQX, B.C. residents must comply with the B.C. Securities
Commissions B.C. Instrument 72-502  Trades In Securities of U.S. Registered
Issuers (BCI 72-502), which requires, among other conditions, that B.C.
residents hold their shares for four months and limit the volume of shares they
sell in any 12-month period. These restrictions limit the ability of B.C.
residents to resell shares of our common stock in the United States and
therefore, may materially affect the market value of your investment.

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If our application to have our common stock quoted on the OTCQB
is accepted or our common stock is quoted on the OTC Pink, selling
securityholders who are residents of all provinces and territories of Canada
other than Ontario will instead need to comply with the restrictions and
exemptions of Multilateral Instrument 51-105  Issuers Quoted in the U.S.
Over-the-Counter Markets (MI 51-105) to resell their shares. This means
that such selling securityholders may only sell their shares of our common stock
through an investment dealer registered in a jurisdiction of Canada from an
account at that dealer in the name of the selling securityholder and the dealer
executes the trade through any of the over-the-counter markets in the United
States. We believe that MI 51-105 will apply because our executive officers and
directors are residents of British Columbia, Canada.

ITEM 4. INFORMATION ON THE COMPANY

Summary

We were incorporated on February 16, 2015 under the laws of
British Columbia, Canada, and have a December 31, fiscal year end. We are
engaged in the planning, development and manufacturing of single person electric
vehicles.

Our principal executive offices are located at 102 East
1st Avenue, Vancouver, British Columbia, Canada, V5T 1A4. Our
telephone number is (604) 428-7656. Our website address is
www.electrameccanica.com. Information on our website does not constitute part of
this Annual Report. Our registered and records office is located at Suite 1500,
1055 West Georgia Street, P.O. Box 11117, Vancouver, British Columbia, Canada,
V6E 4N7.

A.History and development of the
Company

Electramecccanica Vehicles Corp. is a development-stage
electric vehicle (EV) production company incorporated on February 16, 2015
under the laws of British Columbia, Canada. The concept for our Company was
developed by Jerry Kroll after years of research and development on advanced
EVs.

Upon returning to Vancouver in 2011, Mr. Kroll decided new
electric drive systems could revolutionize car assembly and the concept for our
Companys flagship EV called the SOLO was born. With the help of long time
automotive expert and friend Mr. Reisner, President of Intermeccanica
International Inc. (Intermeccanica), and Intermeccanicas vast experience in
automotive craftsmanship, our Companys first prototype was finished in January
2015. To solidify our presence and branding in the EV market, we incorporated in
February of 2015 under the name Electrameccanica Vehicles Corp. For the past 10
years, Mr. Kroll has been researching and developing superior technologies for
autonomous drive systems and dynamic induction charging. We have plans for
ongoing refinements to performance, style, value and efficiency as drive
systems, computerization and materials are developed.

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In 2015, we entered into an arrangement with Intermeccanica to
leverage Intermeccanicas 50+ years of quality car manufacturing expertise.
Pursuant to a Joint Operating Agreement entered into between us, Intermeccanica
and Henry Reisner, dated July 15, 2015, and as amended on September 19, 2016, we
have an arrangement dealing with leased premises, production assembly and an
option to acquire Intermeccanica, as more fully described under the heading
Material Agreements below, that we believe will further enhance the
combination of our proprietary SOLO design with Intermeccanicas manufacturing
expertise. Under the Joint Operating Agreement with Intermeccanica, we have
contracted Intermeccanica to assist with the development of the present and
future vehicles, and also to provide production and delivery capabilities in
conjunction with our own production capabilities. If we decide not to exercise
our call option to acquire Intermeccanica, as more fully described below under
the heading Material Agreements, then under the Joint Operating
Agreement Intermeccanica will continue to provide development, production and
delivery assistance.

We currently have a modern furnished showroom near the downtown
core of Vancouver, where interested consumers may receive more information on
the SOLO, review its specs and technical design, and even test-drive one of the
existing prototypes.

To date, we have a number of marketing efforts that have
succeeded in helping us achieve an order book of approximately $15.6 million,
including 600 private pre-sales. Interested consumers are able to place
reservations for the SOLO with a $250 refundable deposit. We have 498+ orders to
date with a refundable deposit of $250 for 498 SOLOs and a refundable deposit of
$1,000 for 11 Super SOLOs; we also have 91+ orders of the Tofino with a
refundable deposit of $1,000.

Important Events In the Development of Our Business

Important events in the development of our business are
provided under Item 4.B., below, and in other sections of this filing.

Principal Capital Expenditures And Divestitures

Since the date of our inception (February 16, 2015), we have
not had any capital divestitures. The only capital expenditures have been for
property, plant and equipment, investment and expenditures relating to
intellectual property, which occurred in the normal course of our operations.
Our total capital expenditures were approximately $357,372 compared with $16,438
for the year ended December 31, 2015. We have financed our capital expenditures
primarily by issuing common shares. Further details applicable to our
anticipated capital expenditures and funding sources are detailed in Liquidity
and Capital Resources in Item 5.B.

Principal Capital Expenditures And Divestitures Currently in
Process

As of April 25, 2017 there were no capital expenditures or
divestitures in process outside of the normal course of business.

Public Takeover Offers

There have been no public takeover offers by third parties in
respect of our shares.

Acquisitions of subsidiaries

We do not have any subsidiaries.

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B.Business Overview

General

We are a development-stage EV company focusing on the market
demand for Evs that are efficient, cost-effective and environmentally friendly
methods for urban residents to commute. We believe that our flagship EV called
the SOLO is the answer to such market demand.

We created the SOLOs first prototype in January of 2015. Since
the completion of the prototype, our engineers and designers have devoted
efforts to provide the SOLO with an appealing design, and have engaged in
proprietary research and development leading to a high performance electric rear
drive motor.

The SOLO features a lightweight aerospace composite chassis to
allow for a top speed of 130km/h, an attainable cruise speed of 110km/h and is
able to go from 0 km/h to 100 km/h in approximately 8 seconds. Our SOLO features
a lithium ion battery system that requires only three hours of charging time on
a 220-volt charging station or six hours from a 110-volt outlet. The lithium
battery system utilizes approximately 8.64 kw/h for up to 160 km in range. We
also offer a comprehensive warranty package for two years of unlimited mileage
which is included in the price of the SOLO. Standard equipment in the SOLO
includes, but is not limited to the following:

- LCD Digital Instrument Cluster;
- Power Windows;
- AM/FM stereo with Bluetooth/ CD/USB;
- Remote keyless entry system;
- Rear view backup camera;
- 285 litres of cargo space; and
- Heater and defogger.

Optional equipment will include air conditioning at an
additional cost.

The purchase price for our SOLO is $19,888.

Our production department has completed two pre-production
SOLOs as at December 31, 2016, and we intend to produce up to nine further
pre-production SOLOs by the end of June 30, 2017. This will allow us to
determine if the projected production volume of 10 to 20 SOLOs per month is able
to be produced at our existing facilities beginning in January 2017. Producing
the preproduction SOLOs allows us to determine and assess the entire production
process. Currently, we have increased our production space, organized a
production line, ordered components and are in the process of fine tuning the
production process through the pre-production SOLOs. We anticipate our
production costs to be $15,000 per SOLO, providing a gross margin of 25% based
on a sale price of $19,888.

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In recognizing the needs of different demographic groups, from
the Companys product plan, we plan to launch additional vehicle models namely,
the Twin, which features two seats and we believe suitable for urban families, young commuters, empty
nesters, and environmentally-conscious consumers. We also plan on launching the
Super SOLO, which is a sports car model within our EV product line. The Super
SOLO is intended to boast a longer range and a higher top speed, sleek,
aerodynamic design and features that will rival existing super sports cars such
as the Ferrari 488, Lamborghini Gallardo, etc. For larger compartment needs, we
have plans in the future to release the Cargo, a larger vehicle than the SOLO
that is designed for use as a fleet vehicle with ample storage space which would
be best suited for delivery companies such as FedEx, United States Postal
Service, and Canada Post. The Cargo is expected to offer the appropriate
compartment space for fleet vehicle uses such as delivery, while offering long
range capability and cleaner technology.

Refundable deposits have been accepted for the planned Super
SOLO and such deposits are able to be returned at any time. Mechanical
development on the Super SOLO has begun and progress will determine when this
and any other variants can be launched. No set date has been declared at this
time. The Super SOLO is intended to be a high performance version of the SOLO.

The Company announced on March 28, 2017, at the Vancouver
International Auto Show that it will build the Tofino; an all-electric,
two-seater roadster representing an evolution of the Intermeccanica Roadster.
The Tofino is equipped with a high-performance, all-electric motor with a top
speed of 200 kph (125 mph) and a 0-100 kph (0-60 mph) in less than seven
seconds. The chassis and body are made of a lightweight aerospace-grade
composite and the car is capable of up to 400 km (250 miles) of range on a full
charge. The Company is accepting a refundable of deposit of $1,000 to reserve
the Tofino.

Sources and Availability of Raw Materials

We continue to source duplicate suppliers for all of our
components, in particular, we are currently sourcing our lithium batteries from
Panasonic, Samsung and LT Chem. Lithium is subject to commodity price volatility
which is not under our control and could have a significant impact on the price
of lithium batteries.

At present, we are subject to the supply of our chassis from
one supplier for our production of the SOLO. We have started to source
additional suppliers of the chassis to mitigate the risk of being dependent on
only one supplier.

Patents and Licenses

We have filed patents on items that our legal counsel deem
necessary to protect our products. We do not rely on any licenses from
third-party vendors at this time.

Our success depends, at least in part, on our ability to
protect our core technology and intellectual property. To accomplish this, we
rely on a combination of patent and design applications, trade secrets,
including know-how, employee and third party non-disclosure agreements,
copyright laws, trademarks and other contractual rights to establish and protect
our proprietary rights in our technology. As at April 25, 2017 we had one issued
design registration, two allowed design application and six pending patent and
design applications with various countries which the Company considers core to
its business in a broad range of areas related to the design of the SOLO and its
powertrain. We intend to continue to file additional patent applications with
respect to our technology. We do not know whether any of our pending patent
applications will result in the issuance of patents or whether the examination
process will require us to narrow our claims. Even if granted, there can be no assurance that these
pending patent applications will provide us with protection.

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Market Overview

Investment in clean technology has been trending for several
years as nations, governments, and society overall become more aware of the
damaging effects pollution and greenhouse gas emissions (GHG) have on the
environment. In an attempt to prevent and/or slow-down these damaging effects
and create a more sustainable environment, nations and government agencies have
announced their proposals to reduce GHGs, contribute funding into research and
development in clean technology, and offer incentives/rebates for clean
technology investments by businesses and consumers.

Electric vehicle is a broad term for vehicles that do not
solely operate on gas or diesel. Within this alternative vehicle group, there
are more categories that further segment into alternative vehicles that embrace
different innovative technologies such as: (i) battery electric vehicles
(BEV); (ii) fuel-cell electric vehicles (FCV); or (iii) plug-in hybrid
electric vehicles (PHEV).

BEVs draw on power from battery management systems to power
electric motors instead of from an internal combustion engine, a fuel cell, or a
fuel tank. The Nissan Leaf, Tesla Model S, and our SOLO are BEVs.

FCVs typically utilize a hydrogen fuel cell that, along with
oxygen from the air, converts chemical energy into electricity which powers the
vehicles motor. Emissions from a FCV are water and heat, hence making FCVs true
zero-emission vehicles.

PHEVs are the hybrid vehicles that have both an electric motor
and an internal combustion engine. PHEVs can alternate between using electricity
while in its all-electric range or relying on its gas-powered engine. The
Chevrolet Volt and the Toyota Prius are examples of PHEVs.

The popularity of EVs have also been met with difficulties in
charging convenience. There are far more gas stations available than public EV
charging stations: a search on Yellow Pages reveals that there are 439 gas
stations alone in the City of Vancouver whereas the entire Province of British
Columbia has approximately 500 public EV charging stations. The convenience and
availability of public EV charging stations may prove to be an obstacle of mass
adoption of Evs.

Consumers may be afraid that their Evs may run out of charge
  while they are out on the road and this fear is recognized by the public and has
  been popularized with the term range anxiety. Despite this fear, the distance
  travelled by most urban commuters is a lot lower than the typical range of an
  EV. Data from Statistics Canadas National Household Survey in 2011 reported the
  average Canadian takes 25 minutes to commute to work.

There currently exists different categories of charging
stations depending on the voltage they provide. EV owners can often charge at
home on a regular 110-volt outlet which may take between 10 hours to 20 hours
depending on the model and make of the EV. This type of outlet and charging is
termed level 1 charging. Level 2 charging means the voltage at the charging
station is typically around 240 volts and this type of outlet is usually
available at public charging stations, shopping malls and big box retailer
parking lots, and even located in certain residential hi-rises. Charging at a
level 2 station typically cuts down the level 1 charge time in half and may
require a small fee for the service.

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Electric Vehicles/Automotive  Global Market

EVs have been around for a number of years, but have only
recently gained mass adoption and public interest due to open discussions of GHG
emission levels, government and international policies on climate change and
pollution, increased literature on Evs, fluctuating fuel costs, and improved
battery management systems and EV range. According to Navigant Research, the
global light duty EV market is estimated to grow from 2.6 million vehicle sales
in 2015 to over 6.0 million vehicle sales in 2024.1

Evs in the global
  market are gaining adoption by the general public and these efforts have also
  been aided by traditional automotive manufacturers entry into the market. The
  majority of growth in the EV industry has been led by the following top five EV
  models: (1) Nissan Leaf; (2) Chevrolet Volt (PHEV); (3) Toyota Prius (PHEV); (4)
  Tesla Model S; and, (5) Mitsubishi Outlander (PHEV).2There are few
  manufacturers that are solely devoted to the manufacturing of Evs, the most
  well-known and popular one being Tesla Motors.

On a global scale, Evs are gaining popularity, particularly in
countries where there is high population density, narrow roads, and limited
urban space. According to an April article from Pedestrian
Observations3, an online website dedicated to transit-oriented
developments, several European countries are formulating programs that ban cars
fueled by petrol or diesel. This initiative was introduced by Norways Minister
for the Environment and co-spokesperson for the Green Party, which expects to
implement the ban completely by 2025.4

In France, the Paris region
  has been calling for a phase-out of the internal combustion engine due to rising
  levels of particulate pollution from diesel vehicles and the local government is
  looking into implement more battery charging stations to help commuters refuel
  along the way.5The German government is expecting German automakers
  to spend more money on research and development for improved battery range and
  charging stations.6

In Belgium, Switzerland, and the Netherlands,
  such governments would like a similar phase-out program akin to that of
  Norways.7These countries expect the phase-out to be complete by
  2030.8In some of these countries, however, there remain opposing
  parties to the phase-out program and it is uncertain as to how it will
  ultimately play out.

The aforementioned initiatives show that there is significant
demand for Evs and with government support, adoption of Evs and changes to the
industry can be made more rapidly. Our management believes that these
initiatives will materialize and are optimistic at the prospects of an overall
cleaner environment and bigger market for Evs.

_____________________________________________________1Navigant Research Report, Global Forecasts for Light Duty Hybrid, Plug-in
Hybrid, and Battery Electric Vehicle Sales and Vehicles in Use: 2015-2024,
online: <https://www.navigantresearch.com/research/electric-vehicle-market-forecasts>.
2Electric Car Demand Growing, Global Market Hits 240,000
Units, Cleantechnica (28 March 2015), online: https://cleantechnica.com/2015/03/28/ev-demand-growing-global-market-hits-740000-units/>. 3Several European Countries
to Follow Norways Lead, Ban Fuel-Powered Cars, Pedestrian Observations (1
April 2016), online: <https://pedestrianobservations.wordpress.com/2016/04/01/several-european-countries-to-follow-norways-lead-ban-fuel-powered-cars/>.
4Ibid. 5Ibid. 6Ibid. 7Ibid. 8Ibid.

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Electric Vehicles/Automotive  Canadian Market

Data from FleetCarma.com (FleetCarma), a clean technology
information and communications technology website, reported 2015 EV sales in
Canada to be 6,933.9Although this number pales in comparison to the
total 1.898 million internal combustion vehicles sold in Canada in 2015, the
2015 EV sales numbers represent an approximate 32% increase in sales over 2014.
The graph below from FleetCarma.com further breaks down the number of vehicles
sold by each EV automaker in Canada in 2014 and 2015.



As can be seen from the graph above, Tesla Motors Model S made
huge strides in sales, recording a 137% increase in 2015 over 2014. Nissan Leaf
sales also increased by 23% in 2015 while Chevrolet Volt sales were down 8% in
2015 as compared to the previous year. FleetCarma also states the total number
of Evs on the road in Canada at 18,451.1054% of Canadas total Evs
are BEVs with the rest being PHEVs. FleetCarmas data also highlights that the
Province of Quebec currently leads the rest of Canada with the most registered
Evs at 8,500 vehicles, representing 46% of the entire Canadian EV population.
The bar chart below from FleetCarma indicates the provinces and their respective
number of registered Evs as at December 31, 2015.

_____________________________________________________9Electric Vehicle Sales in Canada: 2015 Final Numbers, online: <http://www.fleetcarma.com/ev-sales-canada-2015/>.
10Ibid.

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Data from British Columbia Air Quality11, a
government division focused on transportation emissions, indicates that
pollutant emissions from conventional gasoline vehicles produce almost five
times as much volatile organic compounds (VOCs) than gasoline/electric hybrid
vehicles.



* NOxrefers to Nitrogen
Oxides | PM2.5 refers to particles in air pollutants that are 2.5 micrometers or
less in size

_____________________________________________________11British Columbia Government Website, B C Air Action Plan, Air Care, Diesel
Bus Retrofit Program, online: <http://www.env.gov.bc.ca/epd/bcairquality/topics/government-vehicle-programs.html>.

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Data from Environment and Climate Change Canada12indicates that Canada is one of the top countries with large ratios of
emissions to GDP. Canada has been working towards reducing its air pollutant
emissions alongside other member countries of the Organisation for Economic
Cooperation and Development (OECD). As can be seen in the bar chart and table
below, Canadas nitrogen levels in 2012 were reduced by 26% from 2002
levels.13



The below bar chart and table also illustrates the 14% decrease
in VOC emissions in 2012 from 2002 levels.14The table compares
Canadas VOC emission levels with that of the United States.

_____________________________________________________12Environment Canada Government Website, International Comparision of Air
Pollutant Emissions, Canadas Emission Trends, online: <https://www.ec.gc.ca/indicateurs-indicators/default.asp?lang=en&n=0B0E77F5-1>.
13Environment Canada Government Report, 2013, online:
https://www.ec.gc.ca/ges-ghg/985F05FB-4744-4269-8C1A-
D443F8A86814/1001-Canadas%20Emissions%20Trends%202013_e.pdf .14Environment Canada Government
Website, International Comparison of Air Pollutant Emissions, online:
<http://www.theglobeandmail.com/opinion/editorials/canadas-greenhouse-gas-emissions-cant-be-cut-without-a-little-pain/article28560158/>.

- 28 -

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The above presented data also points out opportunities for EV
markets in countries that have difficulties reducing the air pollution. From the
bar charts above, it appears that Australia, Turkey, Poland and the United
Kingdom will also be ideal markets for Evs which allow for substantial reduction
in VOC and NOXemissions.

A February 2016 article from the Globe and Mail provides more
insights on the expected levels of emissions in the coming years. According to
the article, in 2020, emissions will hit 768 megatons of carbon dioxide  way
above Canadas target of 622 megatons. By 2030, they will have jumped to 815
megatons, compared with a target for that year of 524 megatons. As a result,
provincial governments in Canada are carefully monitoring GHG emissions and
providing funding and incentives to help reduce these emission levels.15Another reason Evs have become popular is due to variable fuel costs and
vehicle maintenance costs that have become a burden for conventional gasoline
automobile owners.

_____________________________________________________15Canadas Greenhouse Gas Emissions Cant Be Cut Without a Little Pain,
Globe and Mail(4 February 2016), online: 
<http://www.theglobeandmail.com/opinion/editorials/canadas-greenhouse-gas-emissions-cant-be-cut-without-a-little-pain/article28560158/>.

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According to the American Automobile Association, the owner
of an average sedan would incur US$8,876 a year in driving costs and an average cost per mile of US$0.592 cents
(US$0.367 cents per km).16In comparison to the above statistic, an
October 2015 Globe and Mail article reports electric vehicles typically cost
owners $0.016 per km to drive.17

Canada is seen as a leader in many
  industries, but clean-tech and Evs seems not to be one of them. However,
  research and data reveals significant interest in Evs from Canadians. According
  to a recent study completed by Ipsos18, a market research firm, 80%
  of Canadians believe electric cars are the way of the future and 75% would like
  to drive a car not powered by gasoline. Converting that interest to likelihood
  to purchase, approximately 64% of respondents in the Ipsos survey expressed they
  would consider buying or leasing a hydrogen fuel cell vehicle.19

Normally, it is difficult for innovative breakthrough technology to be
  rapidly adopted by the mass public unless they are well-educated on the
  technology and the technology is affordable and sufficiently promoted via
  incentives from the government. In the case of Canada, government incentives and
  initiatives allow for affordable Evs and convenient free or low-cost charging
  stations, further promoting the benefits of clean-tech to the general
  public.20Below is an overview of current and prospective provincial
  government incentives that encourage consumers to embrace Evs. As Ontario,
  Quebec and British Columbia are the top three most populous provinces in Canada,
  the overview will focus on these provinces.

In Ontario, 35% of GHGs are created from transportation
emissions.21In an effort to reduce GHGS, the Province of Ontario has
established government rebates for consumers purchasing Evs. The government of
Ontario has plans to allocate $325 million for investments in green technology;
a portion of it will be devoted to EV programs.22

The Province of
  British Columbia has allotted $7.5 million funding for the Clean Energy Vehicle
  Program (the CEVforBC Program) which provides a $5,000 rebate to consumers of
  a qualifying battery electric, fuel-cell electric, or plug-in hybrid electric
  vehicle.23A further $1.59 million in funding will be invested by the
  Province of British Columbia into charging infrastructure and hydrogen fueling
  infrastructure.24

In British Columbia alone, there are 500+ public
  electric vehicle charging stations to allow for convenient charging. The City of
  Vancouver alone boasts over 90 public electric charging stations. According to
  the City of Vancouver website, the municipality now has the biggest municipal EV
  fleet in Canada, consisting of 26 Mitsubishi iMiEVS and one Nissan Leaf.25



_____________________________________________________16American Automobile Association (Electric Car Fuel Costs Savings). online:
http://exchangeev.aaa.com/benefits-of-driving-electric/fuel-cost-savings/17How much does it cost in fuel to run an
electric vehicle?, Globe and Mail(28 October 2015), online:
http://www.theglobeandmail.com/globe-drive/culture/commuting/how-much-does-it-cost-in-fuel-to-run-an-electric-vehicle/article26999091/.18Eight in Ten (80%) Canadians believe Electric
Cars are the Way of the Future, Iposos(Tuesday, August 11, 2015),
online: <http://www.ipsos-na.com/news-polls/pressrelease.aspx?id=6941>.
19Ibid. 20Government of Ontario, Ministry of
Transportation Website, online: <http://www.mto.gov.on.ca/english/vehicles/electric/index.shtml?utm_source=hootsuite>.
21Ontario Spends $20M to Build Electric Vehicle Charging
Stations, The Canadian Press(8 December 2015), online: <http://www.cbc.ca/news/canada/toronto/ontario-electric-vehicle-charging-stations-1.3355595>.
22Ibid. 23CEV for BC Dealer Manual, online:
<https://www.cevforbc.ca/sites/default/files/dealer_manual_may13_2016_update_0.pdf>.
24Ibid. 25West Coast Electric Car Fleets,
Partner Fleet Profile: City of Vancouver  EV Fleet Management, online:
<http://www.westcoastelectricfleets.com/portfolio-items/vancouverbc_fleet_profile/>.

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British Columbia is not the only province in Canada offering incentives
  for Evs. According to a February 2016 article from CBC News, the Province of
  Ontario has announced, effective as of February 10, 2016, a boost to its incentives from the current
range of $5,000 - $8,500 per vehicle up to $6,000 - $10,000 for the purchase or
lease of eligible plug-in Evs.26Additional incentives are available
for Evs with larger battery capacity or a five-seater vehicle. CBC News reports
there are currently 5,800 Evs in Ontario alone.27

According to CBC
  News28, the Ontario government is expected to allot $20 million in
  grants to encourage public and private sector partners to construct a network of
  public EV charging stations which will be available in cities, offices,
  residential high-rises, and along commuter highways. The EV rebates, along with
  the EV charging station network, are expected to help reduce Ontario GHGs by 80%
  of 1990 levels by the year 2050.29

The Province of Quebec will be
  allocating $420 million to promote Evs over the five years between 2015  2020.
  As reported by CBC News30, Montreal and the Province of Quebec
  expects to add 106 curbside charging stations by spring 2016. Curbside charging
  stations will allow EV owners easier access compared to current charging
  stations that are often located in underground parking lots. The proposed
  charging stations will primarily be level 2 chargers, with approximately six
  stations being level 3 chargers. Costs of utilizing the stations are very
  affordable: $1 per hour for the level 2 stations (parking costs extra) and $10
  per hour for level 3 stations. Denis Coderre, the mayor of Montreal expects the
  city to have a total of 1,000 charging stations by 2020.31

Marketing Plan

We recognize that marketing efforts must be focused on customer
education and establishing brand presence and visibility which is expected to
allow our SOLO to gain traction and subsequently gain increases in orders.
Marketing and promotional efforts must emphasize the SOLOs image as an
efficient, clean, and affordable EV for the masses to commute on a daily basis.
If we can succesfully promote the SOLO on these points, we expect growth in
sales and customer base to occur rapidly.

We plan to build up to 10 pre-production SOLOs by March of 2017
(and we are currently taking reservations for orders) and begin production
deliveries starting in April of 2017. We are presently negotiating with
manufacturers and suppliers to increase the production of the SOLO for both
greater volume and closer proximity to potential markets around the world. We
intend to satisfy existing reservation orders through our current production
facilities using funds on hand and revenue to be generated from such sales. If
we are able to enter into a manufacturing and supply agreement for much larger
production volumes on reasonable and satisfactory terms, then we may need to
raise additional capital through either equity and/or debt financings in order
to satisfy our obligations for payment under such manufacturing and supply
agreement.

A key point to the marketing plan is to target metropolitan
cities with high population density, expensive real estate, high commuter
traffic load, and pollution levels which are becoming an enormous concern.
Accordingly, our management has identified cities in Canada and the US that

_____________________________________________________26Ontario boosts incentives for electric vehicles, CBC News, Business
Section(10 February 2016), online: <http://www.cbc.ca/news/business/ontario-electric-vehicle-incentives-1.3442203>.
27Ibid. 28Ontario Spends $20M to Build Electric
Vehicle Charging Stations, The Canadian Press(8 December 2015), online:
<http://www.cbc.ca/news/canada/toronto/ontario-electric-vehicle-charging-stations-1.3355595>.
29Ibid. 30Montreal to Get 106 Electric Car
Charging Stations by Next Spring, CBC News(25 October 2015), online:
<http://www.cbc.ca/news/canada/montreal/montreal-electric-car-stations-1.3287858>.
31Ibid.

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fit the aforementioned criteria and have plans to seek out
suitable locations in the following cities for additional showrooms: Toronto;
Seattle; Los Angeles; San Francisco; and Manhattan.

Key aspects of our marketing plan are highlighted below. We
plan to develop a marketing strategy that will generate interest and media buzz
based on the SOLOs selling points.

- Organic engagement on social media with engaging posts aimed to educate the
  public about Evs and develop interest in our SOLO, which to date has had
  amazing traction.
- Earned media  we have already received press coverage from several
  traditional media sources and expect these features and news stories to
  continue as we embark on our commercial launch.
- Investor Relations/ Press Releases  our in-house investor relations team
  will provide media releases/kits for updates and news on our progress.
- Industry shows and events  we will display the SOLO at the Vancouver
  International Autoshow. Promotional merchandise giveaways will enhance and
  further solidify our branding in consumer minds. Computer stations and payment
  processing software will be readily on hand at to accept SOLO reservations.
- First-hand experience  Test-drives and public viewings are available at
  our existing showroom near the Vancouver downtown core.

We anticipate the marketing strategy and tactics will evolve
over time as our SOLO gains momentum and we identify appropriate channels and
media that align with our long-term objectives. In all of our efforts, we plan
to focus on the features that differentiate our SOLO from the existing Evs on
the market.

Reservation System

We have an online reservation system which allows a potential
customer to reserve a SOLO by paying a refundable $250 deposit. Once reserved,
the potential customer is allocated a reservation number and the reservation
will be fulfilled as SOLOs are produced.

We will earn revenue once a vehicle has been delivered to the
customer who has pre-ordered their vehicle. Each order is placed in line as
received and fulfilled once the vehicle becomes available. The customer may, at
any time, for any reason, cancel their order and have their $250 returned. We do
not consider any order as being secured until the vehicle has been delivered and
full receipt of the remaining balance of the vehicle purchase price has been
received.

Sales and Service Model

Sales Model

We sell our vehicles online via our website
(www.electrameccanica.com), while we develop our planned corporate owned
dealerships in key markets and franchise dealer network in other market areas.
As each franchise dealer is established, any vehicles sold within such dealers
designated territory will be delivered to such dealer to fulfill online orders
as well as such franchise dealers orders.

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We are unable to identify where we hope to establish franchise
dealers as opposed to corporate owned dealerships. The establishment of
franchise dealers will depend on regional demand, available candidates and local
regulations. We are currently accepting expressions of interest and applications
for franchised dealerships from individuals, and do not have any franchise or
dealer agreements. The SOLO will initially be available directly from
Electrameccanica.

We plan to only establish and operate corporate owned
dealerships in those states in the U.S. that do not restrict or prohibit certain
retail sales models by vehicle manufacturers. In all other instances, we plan to
establish franchise dealerships to comply with local regulations.

Service Model

We plan to have our vehicles serviced through our corporate and
franchised dealerships.

Government Regulation

As a vehicle manufacturer established in Canada, we are
required to ensure that all vehicle production meets applicable safety and
environmental standards. Issuance of the National Safety Mark (the NSM) by the
Minister of Transport for Canada will be our authorization to manufacture
vehicles in Canada. Receipt of the NSM is contingent on us demonstrating that
the SOLO is designed and manufactured to meet or exceed the applicable sections
of the Canadian Motor Vehicle Safety Act (C.R.C. Chapter 1038) and that
appropriate records are maintained. Unique to Canada, the SOLO falls under the
three-wheeled vehicle category and is subject to the safety standards listed in
Schedule III of the Canadian Motor Vehicle Safety Regulations (CMVSR), which
can be found at (http://laws-lois.justice.gc.ca/eng/regulations/C.R.C.,_c._1038/section-sched3.html).
For sale into the United States, we and the SOLO must meet the applicable parts
of the U.S. Code of Federal Regulations (CFR) Title 49  Transportation. This
includes providing Manufacture Identification information (49 CFR Part 566),
VIN-deciphering information (49 CFR Part 565), and certifying that the SOLO
meets or exceeds the applicable sections of the Federal Motor Vehicle Safety
Standards (40 CFR Part 571) and Environmental Protection Agency noise emission
standards (40 CFR 205). Since the U.S. regulations do not have a specific class
for three-wheeled autocycles, the SOLO falls under the definition of a
motorcycle pursuant to Sec. 571.3 of 49 CFR Part 571.

We have submitted a SOLO for U.S. compliance certification at a
testing facility in Quebec, Canada. The completion of certification is dependent
on the cooperation of winter weather for testing of braking capabilities of
SOLO, which is required for the testing. If there is no snow or sub-zero
temperatures which would adversely affect these outdoor braking tests,
completion is estimated to be by the end of January 2017. Compliance
certification of the SOLO for Canada, and for any other EMV models, will not
begin until U.S. compliance certification has been achieved. Canadian compliance
of the SOLO is estimated to take 77 days, which again is weather dependent.

Within the three wheel vehicle classification in Canada, CMVSR
Standard 305 sets out the regulation for prevention of injury to the occupant
during and after a crash as related to the vehicles batteries. Under this
standard, the security and integrity of electric drive system components and
their isolation from the occupant are evaluated in the course of a frontal
barrier crash test in accordance with Technical Standard Document No. 305. There
is no such regulation applicable to the motorcycle category under the U.S.
regulations.

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All of our currently planned vehicles fall under the definition
of a motorcycle under U.S. regulations.

Competition

The worldwide automotive market, particularly for alternative
fuel vehicles, is highly competitive today and we expect it will become even
more so in the future as we move towards production of the SOLO and the
introduction of other models such as the anticipated Twinn and the Cargo.
Other manufacturers have entered the electric vehicle market and we expect
additional competitors to enter this market within the next several years. As
they do, we expect that we will experience significant competition. With respect
to the SOLO, we also face strong competition from established automobile
manufacturers, including manufacturers of Evs, such as Tesla Model S, Chevrolet
Volt and Nissan Leaf.

A matrix of our SOLO compared to the top three selling Evs in
Canada is presented below (note: in the below matrix, each vehicle may be
available in different models, and only the lowest models specs and prices are
quoted in the matrix), which information is readily available from each
manufacturers website. Information in the below matrix analyzes key
considerations of a potential purchaser of an EV.



*In the above matrix, each vehicle may
be available in different models, only the lowest models specs and prices are
quoted in the matrix.

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We believe the primary competitive factors in our market
include but are not limited to:

- technological innovation;
- product quality and safety;
- service options;
- product performance;
- design and styling;
- brand perception;
- product price; and
- manufacturing efficiency.

Most of our current and potential competitors have
significantly greater financial, technical, manufacturing, marketing and other
resources than we do and may be able to devote greater resources to the design,
development, manufacturing, distribution, promotion, sale and support of their
products. Virtually all of our competitors have more extensive customer bases
and broader customer and industry relationships than we do. In addition, almost
all of these companies have longer operating histories and greater name
recognition than we do. Our competitors may be in a stronger position to respond
quickly to new technologies and may be able to design, develop, market and sell
their products more effectively.

Furthermore, certain large manufacturers offer financing and
leasing options on their vehicles and also have the ability to market vehicles
at a substantial discount, provided that the vehicles are financed through their
affiliated financing company. We do not currently offer any form of direct
financing on our vehicles. The lack of our direct financing options and the
absence of customary vehicle discounts could put us at a competitive
disadvantage.

We expect competition in our industry to intensify in the
future in light of increased demand for alternative fuel vehicles, continuing
globalization and consolidation in the worldwide automotive industry. Our
ability to successfully compete in our industry will be fundamental to our
future success in the EV market and our market share. There can be no assurances
that we will be able to compete successfully in our market. If our competitors
introduce new cars or services that compete with or surpass the quality, price
or performance of our vehicles or services, we may be unable to satisfy existing
customers or attract new customers at the prices and levels that would allow us
to generate attractive rates of return on our investment. Increased competition
could result in price reductions and revenue shortfalls, loss of customers and
loss of market share, which could harm our business, prospects, financial
condition and operating results.

Research and Development

We have allocated substantial resources in developing our first
vehicle, the SOLO. During the fiscal year ended December 31, 2016, we expended
$2,778,295 (2015: $486,809) on research and development, which costs include
labor and materials.

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C.Organizational structure

We do not have any subsidiaries.

D.Property, plant and equipment

Our principal office is located at 102 East 1st
Avenue, Vancouver, British Columbia, Canada, V5T 1A4. On July 25, 2015, we
together with Intermeccanica as tenants entered into a light industrial lease
agreement with Cressey (Quebec Street) Development LLP (the Landlord) for the
premises located at 102 East 1st Avenue, Vancouver, British Columbia.
The lease agreement is for a term of five (5) years which commenced on November
1, 2015 with a monthly minimum rent of $3,918.86 plus additional rent, which
includes operating costs, property taxes, utilities and a management fee of 4%
of the minimum rent for the particular lease year. The leased premises is 7,235
sq. ft. in size and we along with Intermeccanica are not allowed to assign the
lease or grant a sublease of the whole or any part of the leased premises
without the written consent of the Landlord. Pursuant to a Joint Operating
Agreement between us and Intermeccanica dated July 15, 2015, we have agreed to
pay 50% of the lease costs associated with the lease premises up to a maximum
amount of $4,000 per month for a term of sixty months unless there are
additional expenses properly incurred under the lease agreement, which exceeds
the monthly installment amount, we shall promptly provide payment therefor.

Currently, our development and manufacturing facility is
located at 47 Braid Street, New Westminster, British Columbia, Canada and is
capable of producing 10 to 20 SOLOs per month. Our existing production
facilities are being used for the development of the Super SOLO, and are
adequate for production of the low volume required for this version of the SOLO.
We together with Intermeccanica as tenants entered into a lease agreement with
Astron Realty Group Inc. for Unit 47, which commenced on August 1, 2016 and
expires on July 31, 2020. Unit 47 is approximately 7,270 sq. ft. and the minimum
rent per month is $3,938 until July 31, 2017 and $4,089 from August 1, 2017 to
July 31, 2020, and we are responsible for all associated lease costs such as
strata fees, property taxes, utility fees and other charges associated with the
occupancy of such premises. Our management is currently evaluating several
options for the establishment of a larger production facility location, which
would expand our production capacity to 2,000 to 4,000 SOLOs per month,
depending on facility size. Our management has met with several groups to
discuss the possibility of a production facility located in Canada and
internationally.

Ideally, the new production facility will be 50,000 to 200,000
square feet, which will allow our Company to produce 25,000 to 50,000 SOLOs per
year. We have also consulted a process design company, which will form a
suitable manufacturing flow production process and facility layout for our
anticipated 10 production lines that will maximize labor and equipment usage and
minimize manufacturing and assembly time. Our management estimates the full
assembly of a SOLO in the new production facility will take approximately four
hours. An example of the layout of the new production facility is presented
below. We estimate that the cost of the machinery to equip a new production
facility will range from $10 million to $15 million for the assembly of
vehicles. Experts in the field of designing and equipping a manufacturing
facility presented to the Company that a facility of 50,000 to 200,000 square
feet will be able to produce between 25,000 to 50,000 vehicles per year. The
level of automation will determine if the equipment cost will be on the
lower-end of the range ($10 million) for a semi-automated facility, to the
upper-end of the range ($15 million) for a fully automated facility. While it is
difficult to forecast any sales, we believe that there are enough expressions of
interest to satisfy the production capabilities of the above mentioned facility.
However, we do not anticipate building a new production facility until sometime
in 2018 or later if the demand for the SOLO materializes.

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ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

General

This section contains forward-looking statements involving
risks and uncertainties. The Companys actual results could differ materially
from those anticipated in these forward-looking statements as a result of
certain factors, including those set forth under Item 3.D  Risk Factors.
In this section, we explain our financial condition and results of operations
for each of the years ended December 31, 2016 and 2015. As readers read this
section, they may find it helpful to refer to our financial statements included
in Item 18 of this Annual Report and the information contained in the section
entitled Selected Financial Data in Item 3 of Part I of this Annual Report.
Our financial statements have been prepared in accordance with IFRS as issued by
the IASB.

A.Operating Results

Results of Operations

Results of Operations for the year ended December 31,
2016 compared to the period from February 16, 2015 (date of inception) to
December 31, 2015

Revenues

The Company did not generate any revenue during the fiscal year
ended December 31, 2016 (2015: $nil).

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Operating Expenses

We incurred costs and expenses in the amount of $8,942,022 for
the fiscal year ended December 31, 2016, a 799% increase from costs and expenses
of $994,014 for the period ended December 31, 2015.

This increase in incurred costs and expenses is primarily
attributable to the collective results of the following factors:

| |  | General and administrative expenses for year ended
      December 31, 2016 were $1,205,835 compared to $132,870 for the period
      ended December 31, 2015. The following items are included in office and
      general expenses:                                                                                                                                                                                                                                                                                                                                                                                                                              
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |   | o                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |   | o                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |   | o                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |   | o                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |  | Research and development expenses increased to $2,778,295
      for the year ended December 31, 2016, from $486,809 for the period ended
      December 31, 2015. The Company continues to develop its first electric
      vehicle, the SOLO. All costs related to pre-production vehicles are being
      expensed to research and development. During the year ended December 31,
      2016, the Company received $203,997 (2015: $12,775) in government
      grants.                                                                                                                                                                                        
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |  | Sales and marketing expenses increased to $209,455 for
      the year ended December 31, 2016, from $19,691 for the period ended
      December 31, 2015. The Company has increased its sales and marketing
      efforts as its first electric vehicle, the SOLO, nears
  production.                                                                                                                                                                                                                                                                                                                                                                            
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |  | Stock-based compensation charges for the year ended
      December 31, 2016 were $1,461,189 (2015: $354,015). The Company granted
      25,000 stock options with an exercise price of $0.40 per share, and 75,000
      additional stock options with an exercise price of $1.00 per share during
      the year ended December 31, 2016. In addition, the stock-based compensation charges relate to
      stock options issued during previous quarters where charges are recognised
      over the stock option vesting period. The Company uses the Black-Scholes
      method of calculating the stock-based compensation expense under the
  graded method.

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| |  | Share-based payment expense for the year ended December
      31, 2016 was $3,264,681 (2015: $nil), was caused by private placement
      shares being issued at a price less than the estimated fair value of the
      shares to certain individuals and organisations.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Other Items

We incurred an interest accretion expense of $25,908 for the
year ended December 31, 2016 (2015: $92), relating to convertible loan (note 10
in the financial statements for the year ended December 31, 2016).

In addition, other items include a foreign exchange loss of
$5,417 for the year ended December 31, 2016 (2015: $1,727). Some of the
Companys expenses are paid to suppliers based in the United States of America
who invoice the Company in US dollars.

Net and Comprehensive Income
(Loss)

As a result of the above factors, we reported a net loss and
comprehensive loss for the year ended December 31, 2016 of $8,973,347 (2015:
$995,833).

B.Liquidity and Capital Resources

Liquidity

The Companys operations consist of the designing, developing
and manufacturing of electric vehicles. The Companys financial success is
dependent upon its ability to market and sell its electric vehicles; and to
raise sufficient working capital to enable the Company to execute its business
plan. The Companys historical capital needs have been met by the sale of the
Companys common shares. There is no assurance that equity funding will be
possible at the times required or on terms acceptable to the Company. If no
funds are able to be raised and sales of its electric vehicles do not produce
sufficient net cash flow, then the Company may require a significant curtailing
of operations to ensure its survival.

The financial statements have been prepared on a going concern
basis which assumes that the Company will be able to realize its assets and
discharge its liabilities in the normal course of business for the foreseeable
future. The Company incurred a net loss and comprehensive loss of $8,973,347
during the year ended December 31, 2016 and has a cash balance and a working
capital surplus of $3,916,283 and $3,555,976, respectively, as at December 31,
2016. The Companys ability to meet its obligations as they fall due and to
continue to operate as a going concern is dependent on the continued financial
support of the creditors and the shareholders. In the past, the Company has
relied on sales of its equity securities to meet its cash requirements. There
can be no assurance that funding from this or other sources will be sufficient
in the future to continue its operations. Even if the Company is able to obtain
new financing, it may not be on commercially reasonable terms or terms that are
acceptable to it. Failure to obtain such financing on a timely basis could cause
the Company to reduce or terminate its operations. The above indicates the existence of a material uncertainty that may cast
significant doubt on the Companys ability to continue as a going concern.

- 39 -

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As of December 31, 2016, the Company had 41,783,587 issued and
outstanding shares and 116,492,174 outstanding shares on a fully diluted basis.
Since the Company is seeking to have its common shares posted for trading on the
OTCQB, there can be no assurances that any stock options and warrants will be
exercised until the Company attains its public listing and the market price of
its stock will be above the exercise price of its stock options and warrants.

The Company had $3,555,976, of working capital surplus as at
December 31, 2016 compared to $149,107 working capital deficiency as at December
31, 2015. The increase in working capital surplus resulted from the cash used in
operations of $4,162,835, (2015: $570,725); cash used in investing activities of
$357,372 (2015: $16,438); and which was offset by financing activities
generating cash of $8,330,133, (2015: $693,520) during the year ending December
31, 2016, due to the issuance of 14,848,712 common shares for net cash proceeds
of $8,063,633 (2015: $458,520). The Company also received $300,000 (2015: $nil)
from a convertible loan, which loan will convert to equity at $1 per share once
the Company has received its ticker symbol and is posted for trading on the
OTCQB.

Capital Resources

As at December 31, 2016, the Company had cash and cash
equivalents of $3,916,283 (2015: $106,357). The Company expects to continue
raising equity financing and there can be no guarantees that the Company will be
successful in its endeavors.

Commitments

The Company has no outstanding commitments, other than rent and
lease commitments. The Company has not pledged any of its assets as security for
loans, or otherwise and is not subject to any debt covenants.

Critical Accounting Policies and Estimates

The preparation of financial statements in accordance with IFRS
requires the Company to make estimates and assumptions concerning the future.
The Companys management reviews these estimates and underlying assumptions on
an ongoing basis, based on experience and other factors, including expectations
of future events that are believed to be reasonable under the circumstances.
Revisions to estimates are adjusted for prospectively in the period in which the
estimates are revised.

Estimates and assumptions where there is significant risk of
material adjustments to assets and liabilities in future accounting periods
include the useful lives of property, plant and equipment, fair value
measurements for financial instruments and share-based payments, and the
recoverability and measurement of deferred tax assets.

The preparation of financial statements in accordance with IFRS
requires the Company to make judgments, apart from those involving estimates, in
applying accounting policies. The most significant judgments in applying the
Companys financial statements include:

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- The assessment of the Companys ability to continue as a going concern and
  whether there are events or conditions that may give rise to significant
  uncertainty;
- the classification of financial instruments; and
- the calculation of income taxes requires judgment in interpreting tax rules
  and regulations.

The financial statements for the fiscal year ended December 31,
2016 and for the period ended December 31, 2015 have been prepared by management
in accordance with IFRS, as adopted by the International Accounting Standards
Board.

The critical accounting policies used in the preparation of
these consolidated financial statements are described below.

Our accounting policies are disclosed in Note 2 of Notes to our
financial statements. During the fiscal year ended December 31, 2016 there were
no material changes to these policies. Our more critical accounting policies are
noted below:

Research and Development Costs

Research costs are expensed when incurred. Development costs
including direct material, direct labour and contract service costs are
capitalized as intangible assets when the Company can demonstrate that the
technical feasibility of the project has been established; the Company intends
to complete the asset for use or sale and has the ability to do so; the asset
can generate probable future economic benefits; the technical and financial
resources are available to complete the development; and the Company can
reliably measure the expenditure attributable to the intangible asset during its
development. After initial recognition, internally- generated intangible assets
are recorded at cost less accumulated amortization and accumulated impairment
losses. These costs are amortized on a straight-line basis over the estimated
useful life. To date, the Company has not met the criteria to capitalize
development costs.

Accounting standards issued but not yet applied

New standard IFRS 9 Financial Instruments

This new standard is a partial replacement of IAS 39 Financial
Instruments: Recognition and Measurement. IFRS 9 uses a single approach to
determine whether a financial asset is measured at amortized cost or fair value,
replacing the multiple rules in IAS 39. The approach in IFRS 9 is based on how
an entity manages its financial instruments in the context of its business model
and the contractual cash flow characteristics of the financial assets.

The new standard also requires a single impairment method to be
used, replacing the multiple impairment methods in IAS 39. IFRS 9 is effective
for annual periods beginning on or after January 1, 2018. The Company is
currently assessing the impact this new standard will have on its financial
statements. Other accounting standards or amendments to existing accounting
standards that have been issued but have future effective dates are either not
applicable or are not expected to have a significant impact on the Companys
financial statements.

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New standard IFRS 15 Revenue from Contracts with
Customers

This new standard contains a single model that applies to
contracts with customers and two approaches to recognizing revenue: at a point
in time or over time. The model features a contract-based five-step analysis of
transactions to determine whether, how much and when revenue is recognized. New
estimates and judgmental thresholds have been introduced, which may affect the
amount and/or timing of revenue recognized. IFRS 15 is effective for annual
periods beginning on or after January 1, 2018 with early adoption permitted.

New standard IFRS 16 Leases

This new standard replaces IAS 17 Leases and the related
interpretative guidance. IFRS 16 applies a control model to the identification
of leases, distinguishing between a lease and a service contract on the basis of
whether the customer controls the asset being leased. For those assets
determined to meet the definition of a lease, IFRS 16 introduces significant
changes to the accounting by lessees, introducing a single, on-balance sheet
accounting model that is similar to current finance lease accounting, with
limited exceptions for short-term leases or leases of low value assets. Lessor
accounting is not substantially changed. The standard is effective for annual
periods beginning on or after January 1, 2019, with early adoption permitted for
entities that have adopted IFRS 15.

The Company has not early adopted these new standards and is
currently assessing the impact that these standards will have on its financial
statements.

Other accounting standards or amendments to existing accounting
standards that have been issued but have future effective dates are either not
applicable or are not expected to have a significant impact on the Companys
financial statements.

C.Research and Development, Patents and Licenses,
etc.

Research costs are expensed when incurred and are net of
government grants. Development costs including direct material, direct labour
and contract service costs are capitalized as intangible assets when the Company
can demonstrate that the technical feasibility of the project has been
established; the Company intends to complete the asset for use or sale and has
the ability to do so; the asset can generate probable future economic benefits;
the technical and financial resources are available to complete the development;
and the Company can reliably measure the expenditure attributable to the
intangible asset during its development. After initial recognition, internally-
generated intangible assets are recorded at cost less accumulated amortization
and accumulated impairment losses. These costs are amortized on a straight-line
basis over the estimated useful life. To date, the Company has not met the
criteria to capitalize development costs.

The following table specifies the amounts spent on research and
development for the fiscal year ended December 31, 2016 and the period from
inception to December 31, 2015:

Fiscal year ended December 31,
      2016,
    February 16 to December 31, 2015Labour
    $ 1,715,562
    $ 382,047Materials
    1,266,730
    117,537Government grants
    (203,997)
    (12,775)Total
    $ 2,778,295
    $ 486,809


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D.Trend Information

Due to our short operating history, we are not aware of any
trends 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
is material to investors. However, we currently have an order backlog of 498
SOLOs, 11 Super SOLOs and 91 Tofinos.

E.Off-Balance Sheet Arrangements

As of December 31, 2016, we did not have any off-balance sheet
debt nor did we have any transactions, arrangements, obligations (including
contingent obligations) or other relationships with any unconsolidated entities
or other persons that may have material current or future effect on financial
conditions, changes in the financial conditions, results of operations,
liquidity, capital expenditures, capital resources, or significant components of
revenue or expenses.

F.Tabular Disclosure of Contractual
Obligations

Contractual obligations
    Payments due by periodTotal
    Less than 1 year
    2-3 years
    4-5 years
    More than 5 yearsOperating Lease Obligations
    $822,613(1)
    $221,071
    $445,484
    $156,057
    NilOther Long-Term Liabilities Reflected on the
      Registrants Balance Sheet under IFRS
    Nil
    Nil
    Nil
    Nil
    NilTotal
    $822,613
    $221,071
    $445,484
    $156,057
    Nil


|Notes:
|------
|(1)   

G.Safe Harbor

Not applicable.

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A.Directors and Senior Management

Our Board of Directors (the Board or Board of
Directors) currently consists of three directors. Our directors are elected
annually at each annual meeting of our Companys shareholders.

Our Board of Directors currently has an Audit Committee,
Compensation Committee and Nominating and Corporate Governance Committee, which
each consists of our three directors. The Board assesses potential Board
candidates to fill perceived needs on the Board for required skills, expertise,
independence and other factors.

Our Board of Directors is responsible for appointing our
Companys officers.

The following table sets forth the names and ages of all of our
directors, executive officers and key employees.

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Name, Province/State and Country of
      Residence
    Age
    Position
    Director/Officer SinceJerry Kroll(1)(2)(3)(4)British
      Columbia, Canada
    55
    President, CEO and Director
    February 16, 2015Iain Ball British Columbia, Canada
    63
    Vice-President, Finance
    February 16, 2015Henry Reisner British Columbia, Canada
    52
    Chief Operating Officer
    February 16, 2015Kulwant Sandher(5)British Columbia,
      Canada
    55
    Chief Financial Officer and Secretary
    June 15, 2016Ed Theobald British Columbia, Canada
    65
    General Manager
    February 16, 2015Shaun Greffard(2)(3)(4)British
      Columbia, Canada
    43
    Director
    August 8, 2016Robert Tarzwell(2)(3)(4)British
      Columbia, Canada
    47
    Director
    August 8, 2016Mark West British Columbia, Canada
    50
    Vice-President, Sales & Dealerships
    November 1, 2016


|Notes:
|------
|(1)   
|(2)   
|(3)   
|(4)   
|(5)   

Business Experience

The following summarizes the occupation and business experience
during the past five (5) years or more for our directors, executive officers and
key employees as of the date of this prospectus:

Jerry Kroll  President, Chief Executive Officer and
Director

Mr. Kroll has an extensive background working in small
businesses and start-ups. His career began when he managed the production,
strategic planning, and sales operations of Kroll Greenhouses, his family
business. From there, Mr. Kroll served in other management roles in the floral
and food services industries, overseeing the import/export of floral products,
managing employees, managing food franchises, and establishing
supplier/distributor relationships.

In 1996, Mr. Kroll became involved in air racing as the owner
of Vancouver International Air Races and Airshow, which featured large scale
events attracting over 15,000 spectators and 31 corporate sponsors. From then
on, Mr. Kroll became increasingly involved in air racing and motor races. He
eventually became the president and CEO of Corbin Motors Vancouver Inc. in 2001
where he organized the sales of the firms three-wheeled commuter vehicle in
Canada.

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In 2007, Mr. Kroll founded KleenSpeed Technologies, a firm
focused on stationary energy storage products. He began researching and
developing an EV for the everyday commuter. As an entrepreneur, Mr. Kroll also
founded Ascend Sportmanagement Inc., a sports property and technology management
firm.

Mr. Krolls experience and skill set in innovative technology
and start-ups, coupled with his passion for clean technology developments,
allows Mr. Kroll to coordinate, manage, and execute strategies for the Company.

Mr. Kroll is also actively involved in the Vancouver venture
capital scene and has been a member of the Vancouver Angel Technology Network,
an investing and mentoring network for new technology start-ups, since 2003.

Kulwant Sandher, Chief Financial Officer and Secretary

Kulwant Sandher, 55, is a Chartered Professional Accountant
with over 25 years of experience in business and finance. Mr. Sandher graduated
from Queen Mary, University of London (formerly known as Queen Mary College) in
1986 with a B.Sc. degree (Eng.) in Avionics. Mr. Sandher became a Chartered
Accountant in England in 1991 and received his Chartered Professional Accountant
designation in Canada in 1997.

Mr. Sandher has considerable private and public company
experience. He served as CFO of MineSense Technologies Inc. from August 2013
until July 2015; he served as COO & CFO for Marketrend Interactive Inc.,
from March 2004 to March 2006.

Mr. Sandher has also served as CFO of several publicly listed
companies, including: Hillcrest Petroleum (TSX-V), Millrock Resources Inc.
(TSX-V) and St. Elias Mines (TSX-V). Currently, Mr. Sandher serves as President
of Hurricane Corporate Services Ltd. and as CFO of Intigold Mines Ltd. (TSX-V).
Furthermore, Mr. Sandher is currently serving as a director and CFO of Delta Oil
and Gas Inc. since 2007 and Director of The Cloud Nine Education Group Inc since
December 2015.

Iain Ball, Vice-President, Finance

Mr. Ball is an experienced financial executive with over 25
years of international corporate financial and general management experience. He
has been providing CFO services, along strategic and financial advice, to
growing companies and start-ups since 2012.

He is the former Chief Financial Officer and Director of
Progressive Solutions Inc. (Progressive Solutions), an enterprise resource
planning software company that grew (both organically and by acquisition) from
40 employees to 135 employees in the United States, the United Kingdom, and
Canada. Mr. Ball was responsible for debt and equity financings that were
instrumental to Progressive Solutions acquisitions and international growth.
Progressive Solutions was successfully sold to a strategic buyer in 2012.

Mr. Ball graduated from the University of Aberdeen in 1975 with
a Bachelor of Science (Honours), as well as a Master of Business Administration
from Simon Fraser University in 1999. He became a Chartered Accountant in
Scotland in 1979 and obtained his Chartered Professional Accountant designation
in 1982 from the Canadian Institute of Chartered Professional Accountants.

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Henry Reisner, Chief Operating Officer

Mr. Reisner is the current President of Intermeccanica
International Inc., which is an automobile manufacturer, and has held this
position since 2001. He is incredibly experienced in the automotive industry and
has a background in manufacturing.

Mr. Reisner holds a Bachelor of Arts degree in political
science from the University of British Columbia in 1989.

Pursuant to the Joint Operating Agreement (the JOA) between
us and Intermeccanica, both Mr. Reisner and Intermeccanica have agreed that
during the term of the JOA and for a period of 24 months after the end of the
term of the JOA (the Restricted Period), neither Mr. Reisner nor
Intermeccanica will, directly or indirectly, either individually or in
conjunction with any other person or persons, partnership, corporation or trust
(whether as employee, principal, agent, shareholder, consultant or in any other
capacity whatsoever), carry on business as, be engaged by, or work for a
business that competes with our business in Canada or the United States.
Intermeccanica and Mr. Reisner further agreed that, during the Restricted
Period, neither Intermeccanica nor Mr. Reisner will, without the prior written
consent of us, either alone or jointly with or on behalf of any person or
entity, directly or indirectly, solicit any person who, at the applicable time,
is an employee or independent contractor of the Company for the purpose of
inducing him, her or it to terminate his, her or its employment or contract for
services with the Company. In the event of a breach of the JOA or a dispute
under the JOA, Mr. Reisner may have a conflict of interests between his position
as our Chief Operating Officer and his position as President of Intermeccanica.
If such a conflict of interests arises, then Mr. Reisner will not be involved in
any decision making process between our Company and Intermeccanica and our board
of directors, at its sole discretion, may remove Mr. Reisner as our Chief
Operating Officer.

Ed Theobald, General Manager

Mr. Theobald is a seasoned operational manager with over 40
years of experience in finance, industrial sales, construction, retail, and oil
& gas industries. This experience includes 19 years as General Manager at
Envirotest Canada. He also oversaw the operations of 16 automotive repair shops
as Regional Manager of Speedy Glass.

Dr. Robert Tarzwell, Director

Dr. Tarzwell began his career as a psychiatrist at St. Pauls
Hospital in 2006. His experience and expertise led him to other
clinical/consultant roles in medicine and academia, serving as external faculty
member for Green College of the University of British Columbia, medical advisor
for virtual healthcare application Medeo, and clinical assistant professor in
the faculty of medicine at the University of British Columbia. Dr. Tarzwell is
currently Clinical Director of Research for Mental Health at Lions Gate
Hospital.

In addition to his background in academia and medicine, Dr.
Tarzwell is an enthusiast of high tech industries, multimedia innovations, and
race cars. He is an investor/advisor for a number of Vancouver-based start-ups,
including Medeo, Hothead Games, EM, and Viewers Like You Productions.

Dr. Tarzwell holds a Bachelors Degree in English and
Literature from Simon Fraser University, a Doctor of Medicine from the
University of Manitoba, a Psychiatrist certification from the Royal College of Physicians of Canada at Dalhousie University, and a
Nuclear Medicine certification from the Royal College of Physicians of Canada at
the University of British Columbia.

- 46 -

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Shaun Greffard, Director

Mr. Greffard is a management professional with over 20 years of
experience in telecommunications, information technology and government. During
his career as a management professional, Mr. Greffard has been responsible for
the profit and loss of Ledcors $80M+ Canadian telecommunications division and
responsible for negotiating commercial and contractual terms for the largest P3
telecommunications deal in North America valued at close to $600M USD over a 3
year Design/Build contract and 30 year Operations contract. He was also
responsible for negotiating numerous US contracts between the public and private
sectors, working with and for local and federal government entities including
delivery of one of the largest Canadian telecommunications deals with the
Federal government. He has been responsible for conducting labour negotiations
and transforming people, culture and corporate image after a prolonged labour
dispute and has run the marketing organization for a $100M division of Telus. He
is adept at overhauling under-performing business units and analyzing and
removing operational flaws to improve operational performance and profitability.

Mr. Greffard accumulated his experience and skill set from
roles at Telus Communications Inc., the City of Surrey, and Ledcor Group. He is
currently the Vice President of Strategic Projects at Ledcor Group.

Mr. Greffard holds a Masters in Business Administration from
Royal Roads University.

Mark West, Vice-President, Sales & Dealerships

Mark West has over 25 years of experience directing and
expanding operations in the highly competitive food and beverage industry. Mr.
West was instrumental in the local and international growth of Blenz Coffee from
10 stores to over 70 stores in Canada and Asia. Mr. West was the President of
Blenz Coffee from 2012 to 2016 and previously held the positions of President,
Vice-President, Manager of Operations and Manager of Franchising from 1996 to
2007. Mr. West was the Vice-President and an owner of MyCup Coffee and Tea from
2008 to 2012.

Family Relationships

There are no family relationships among any of our directors
and executive officers.

Involvement in Certain Legal Proceedings

During the past ten years, Messrs. Jerry Kroll, Iain Ball,
Henry Reisner, Kulwant Sandher, Ed Theobald, Shaun Greffard, Robert Tarzwell and
Mark West have not been the subject of the following events:

|1. | A petition under the Federal bankruptcy laws or any state
      insolvency law was filed by or against, or a receiver, fiscal agent or
      similar officer was appointed by a court for the business or property of
      such person, or any partnership in which he was a general partner at or
      within two years before the time of such filing, or any corporation or
      business association of which he was an executive officer at or within two
      years before the time of such filing;
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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|2. | Convicted in a criminal proceeding or is a named subject
      of a pending criminal proceeding (excluding traffic violations and other
      minor offenses);                                                                                           
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                          
|3. | The subject of any order, judgment, or decree, not
      subsequently reversed, suspended or vacated, of any court of competent
      jurisdiction, permanently or temporarily enjoining him from, or otherwise
      limiting, the following activities;

| | (a) | Acting as a futures commission merchant, introducing
      broker, commodity trading advisor, commodity pool operator, floor broker,
      leverage transaction merchant, any other person regulated by the Commodity
      Futures Trading Commission, or an associated person of any of the
      foregoing, or as an investment adviser, underwriter, broker or dealer in
      securities, or as an affiliated person, director or employee of any
      investment company, bank, savings and loan association or insurance
      company, or engaging in or continuing any conduct or practice in
      connection with such activity;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (b) | Engaging in any type of business practice; or                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (c) | Engaging in any activity in connection with the purchase
      or sale of any security or commodity or in connection with any violation
      of Federal or State securities laws or Federal commodities
  laws;                                                                                                                                                                                                                                                                                                                                                                                                                            

|4. | The subject of any order, judgment or decree, not
      subsequently reversed, suspended or vacated, of any Federal or State
      authority barring, suspending or otherwise limiting for more than 60 days
      the right of such person to engage in any activity described in paragraph
      3.i in the preceding paragraph or to be associated with persons engaged in
      any such activity;
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                       
|5. | Was found by a court of competent jurisdiction in a civil
      action or by the SEC to have violated any Federal or State securities law,
      and the judgment in such civil action or finding by the SEC has not been
      subsequently reversed, suspended, or vacated;                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                       
|6. | Was found by a court of competent jurisdiction in a civil
      action or by the Commodity Futures Trading Commission to have violated any
      Federal commodities law, and the judgment in such civil action or finding
      by the Commodity Futures Trading Commission has not been subsequently
      reversed, suspended or vacated;                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                       
|7. | Was the subject of, or a party to, any Federal or State
      judicial or administrative order, judgment, decree, or finding, not
      subsequently reversed, suspended or vacated, relating to an alleged
      violation of:                                                                                                                                                                       

| | (a) | Any Federal or State securities or commodities law or
      regulation; or                                                                                                                                                                                                                                                
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                           
| | (b) | Any law or regulation respecting financial institutions
      or insurance companies including, but not limited to, a temporary or
      permanent injunction, order of disgorgement or restitution, civil money
      penalty or temporary or permanent cease-and-desist order, or removal or
      prohibition order, or

| | iii) | Any law or regulation prohibiting mail or wire fraud or
      fraud in connection with any business entity; or
| | ---- | --------------------------------------------------------------------------------------------------------------

- 48 -

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|8. | Was the subject of, or a party to, any sanction or order,
      not subsequently reversed, suspended or vacated, of any self-regulatory
      organization (as defined in Section 3(a)(26) of the Exchange Act (15
      U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29)
      of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent
      exchange, association, entity or organization that has disciplinary
      authority over its members or persons associated with a
  member.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

B.Compensation

Compensation Discussion and Analysis

This section sets out the objectives of our Companys executive
compensation arrangements, our Companys executive compensation philosophy and
the application of this philosophy to our Companys executive compensation
arrangements. It also provides an analysis of the compensation design, and the
decisions that the Board made in fiscal 2016 with respect to the Named Executive
Officers. When determining the compensation arrangements for the Named Executive
Officers, our Board of Directors acting as the Compensation Committee considers
the objectives of: (i) retaining an executive critical to the success of the
Company and the enhancement of shareholder value; (ii) providing fair and
competitive compensation; (iii) balancing the interests of management and our
Companys shareholders; and (iv) rewarding performance, both on an individual
basis and with respect to the business in general.

Benchmarking

Our Board of Directors acting as the Compensation Committee
considers a variety of factors when designing and establishing, reviewing and
making recommendations for executive compensation arrangements for all executive
officers of the Company. The Board typically does not position executive pay to
reflect a single percentile within the industry for each executive. Rathera, in
determining the compensation level for each executive, the Board looks at
factors such as the relative complexity of the executives role within the
organization, the executives performance and potential for future advancement
and pay equity considerations.

Elements of Compensation

The compensation paid to Named Executive Officers in any year
consists of two primary components:

| | (a) | base salary; and                                                                            
| | --- | --------------------------------------------------------------------------------------------
| |     |                                                                                             
| | (b) | long-term incentives in the form of stock options granted
      under our Stock Option Plan.

The key features of these two primary components of
compensation are discussed below:

1.        Base Salary

Base salary recognizes the value of an individual to our
Company based on his or her role, skill, performance, contributions, leadership
and potential. It is critical in attracting and retaining executive talent in
the markets in which the Company competes for talent. Base salaries for the
Named Executive Officers are intended to be reviewed annually. Any change in
base salary of a Named Executive Officer is generally determined by an
assessment of such executives performance, a consideration of competitive compensation levels
in companies similar to the Company (in particular, companies in the EV
industry) and a review of the performance of the Company as a whole and the role
such executive officer played in such corporate performance.

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2.        Stock Option
Awards

The Company provides long-term incentives to Named Executive
Officers in the form of stock options as part of its overall executive
compensation strategy. Our Board of Directors acting as the Compensation
Committee believes that stock option grants serve the Companys executive
compensation philosophy in several ways: firstly, it helps attract, retain, and
motivate talent; secondly, it aligns the interests of the Named Executive
Officers with those of the shareholders by linking a specific portion of the
officers total pay opportunity to the share price; and finally, it provides
long-term accountability for Named Executive Officers.

Risks Associated with Compensation Policies and Practices

The oversight and administration of the Companys executive
compensation program requires the Board of Directors acting as the Compensation
Committee to consider risks associated with the Companys compensation policies
and practices. Potential risks associated with compensation policies and
compensation awards are considered at annual reviews and also throughout the
year whenever it is deemed necessary by the Board of Directors acting as the
Compensation Committee.

The Companys executive compensation policies and practices are
intended to align management incentives with the long-term interests of the
Corporation and its shareholders. In each case, the Corporation seeks an
appropriate balance of risk and reward. Practices that are designed to avoid
inappropriate or excessive risks include (i) financial controls that provide
limits and authorities in areas such as capital and operating expenditures to
mitigate risk taking that could affect compensation, (ii) balancing base salary
and variable compensation elements and (iii) spreading compensation across short
and long-term programs.

Compensation Governance

The Compensation Committee intends to conduct a yearly review
of directors compensation having regard to various reports on current trends in
directors compensation and compensation data for directors of reporting issuers
of comparative size to the Company. Director compensation is currently limited
to the grant of stock options pursuant to the Stock Option Plan. It is
anticipated that the Chief Executive Officer will review the compensation of
executive officers of the Company for the prior year and in comparison to
industry standards via information disclosed publicly and obtained through
copies of surveys. The Board expects that the Chief Executive Officer will make
recommendations on compensation to the Compensation Committee. The Compensation
Committee will review and make suggestions with respect to compensation
proposals, and then makes a recommendation to the Board.

The Compensation Committee is currently comprised of Jerry
Kroll, Shaun Greffard and Robert Tarzwell, which is currently the entire Board
of Directors.

The Compensation Committees responsibility will be to
formulate and make recommendations to the directors of the Company in respect of
compensation issues relating to directors and executive officers of the Company.
Without limiting the generality of the foregoing, the Compensation Committee
when formed will have the following duties:

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| | (a) | to review the compensation philosophy and remuneration
      policy for executive officers of the Company and to recommend to the
      directors of the Company changes to improve the Companys ability to
      recruit, retain and motivate executive officers;                                                                                                                                                                                                                                                        
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (b) | to review and recommend to the Board the retainer and
      fees, if any, to be paid to directors of the Company;                                                                                                                                                                                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (c) | to review and approve corporate goals and objectives
      relevant to the compensation of the CEO, evaluate the CEOs performance in
      light of those corporate goals and objectives, and determine (or make
      recommendations to the directors of the Company with respect to) the CEOs
      compensation level based on such evaluation;                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (d) | to recommend to the directors of the Company with respect
      to non-CEO officer and director compensation including reviewing
      managements recommendations for proposed stock options and other
      incentive-compensation plans and equity- based plans, if any, for non-CEO
      officer and director compensation and make recommendations in respect
      thereof to the directors of the Company;                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (e) | to administer the stock option plan approved by the
      directors of the Company in accordance with its terms including the
      recommendation to the directors of the Company of the grant of stock
      options in accordance with the terms thereof; and                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (f) | to determine and recommend for the approval of the
      directors of the Company bonuses to be paid to executive officers and
      employees of the Company and to establish targets or criteria for the
      payment of such bonuses, if appropriate. Pursuant to the mandate and terms
      of reference of the Compensation Committee, meetings of the Compensation
      Committee are to take place at least once per year and at such other times
      as the Chair of the Compensation Committee may
determine.

Summary Compensation Table

The following table sets forth all annual and long-term
compensation for services in all capacities to the Company during the fiscal
periods indicated in respect of the Named Executive Officers:

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Named Executive Officer
      and Principal Position
    Year
    Salary($)
    Share- based
      **awards** ($)
    Option- based
      awards ($)(1)
    Non-Equity
      Incentive Plan Compensation
    Pension Value
      ($)
    **All Other**
      **Compensati****on** ($)
    Total Compensat-
      ion ($)Annual
      Incentive Plan ($)
    Long- term
      Incentive Plan ($)Jerry Kroll(2)President
      and Chief Executive Officer
    2016 2015
    30,000 Nil
    Nil Nil
    887,605 287,847
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    917,605 287,847Kulwant Sandher(3)Chief Financial Officer and
      Secretary
    2016
    31,000
    Nil
    Nil
    Nil
    Nil
    Nil
    Nil
    31,000Iain Ball(4)Vice-President, Finance
    2016 2015
    52,500 10,000
    Nil Nil
    87,958 11,851
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    140,458 21,851Henry Reisner(5)Chief Operating Officer
    2016 2015
    53,000 Nil
    Nil Nil
    168,494 27,334
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    221,494 27,334Ed Theobald(6)General
      Manager
    2016 2015
    45,000 Nil
    Nil Nil
    87,958 11,851
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    Nil 11,851Mark West(7)Vice-President, Sales &
      Dealerships
    2016
    16,000
    Nil
    Nil
    Nil
    Nil
    Nil
    Nil
    16,000


|Notes:
|------
|(1)   
|(2)   
|(3)   
|(4)   
|(5)   
|(6)   
|(7)   

- 52 -

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Executive Compensation Agreements

Jerry Kroll

On July 1, 2016, our Board of Directors approved the entering
into of an executive services agreement with Jerry Kroll with a term expiring on
July 1, 2019 (the Kroll Agreement).

The Kroll Agreement is subject to automatic renewal on a
one-month to one-month term renewal basis unless either we or Mr. Kroll provides
written notice not to renew the Kroll Agreement no later than 30 days prior to
the end of the then current or renewal term.

Pursuant to the terms and provisions of the Kroll Agreement:
(a) Mr. Kroll is appointed as our President and Chief Executive Officer and will
undertake and perform the duties and responsibilities normally and reasonably
associated with such office; (b) we shall pay to Mr. Kroll a monthly fee of
$5,000; (c) grant to Mr. Kroll 45,000,000 stock options exercisable into
45,000,000 shares of common stock at an exercise price of $0.15 per share
expiring on June 11, 2022 and 5,000,000 stock options exercisable into 5,000,000
shares of common stock at an exercise price of $0.40 per share expiring on
December 9, 2022 (such options have already been granted prior to the Kroll
Agreement); (d) provide Mr. Kroll with employee benefits, including group health
insurance, accidental death and dismemberment insurance, travel accident
insurance, group life insurance, short-term disability insurance, long-term
disability insurance, drug coverage and dental coverage (the Group Benefits);
and (e) four weeks paid annual vacation per calendar year.

We may terminate the employment of Mr. Kroll under the Kroll
Agreement without any notice or any payment in lieu of notice for just cause.
Mr. Kroll may terminate his employment under the Kroll Agreement for any reason
by providing not less than 90 calendar days notice in writing to us, provided,
however, that we may waive or abridge any notice period specified in such notice
in our sole and absolute discretion.

The employment of Mr. Kroll will terminate upon the death of
Mr. Kroll. Upon the death or Mr. Kroll during the continuance of the Kroll
Agreement, we will provide Mr. Krolls estate and, if applicable, Mr. Krolls
immediate family members with the following: (a) three months base salary, less
any required statutory deductions, if any; (b) that portion of any then declared
and/or earned or accrued bonus, prorated to the end of the three-month period
from the effective date of termination that our chairman determines would likely
have been paid to Mr. Kroll; (c) any outstanding vacation pay as at the
effective date of termination; (d) any outstanding expenses owing to Mr. Kroll
as at the effective date of termination; and (e) subject to our then Option Plan
and the rules and policies of any regulatory authority and stock exchange having
jurisdiction over us, allow Mr. Krolls estate to then exercise any unexercised
and fully vested portion of stock options on the effective date of termination
at any time during three months from the effective date of termination.

If we elect to terminate the Kroll Agreement without just
cause, and provided that Mr. Kroll is in compliance with the relevant terms and
conditions of the Kroll Agreement, we shall be obligated to provide a severance
package to Mr. Kroll as follows: (a) a cash payment equating to an aggregate of
12 months of the then monthly fee, less any required statutory deductions, if
any; (b) that portion of any then declared and/or earned or accrued bonus,
prorated to the end of the three-month period from the effective date of
termination that our chairman determines would likely have been paid to Mr.
Kroll; (c) the present value, as determined by us, acting reasonably, of each of
the Group Benefits that would have been enjoyed by Mr. Kroll during the next
three months from the effective date of termination; (d) any outstanding
vacation pay as at the effective date of termination; (e) any outstanding
expenses owing to Mr. Kroll as at the effective date of termination; (f)
maintain Mr. Krolls Group Benefits for a period of one year from the effective
date of termination; and (g) subject to our then Option Plan and the rules and
policies of any regulatory authority and stock exchange having jurisdiction over
us, allow Mr. Kroll to then exercise any unexercised and fully vested portion of
stock options on the effective date of termination at any time during three
months from the effective date of termination.

- 53 -

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Mr. Kroll may terminate his employment under the Kroll
Agreement in connection with any change in control of us by providing not less
than 90 calendar days notice in writing to us after the change in control has
been effected; provided, however, that we may waive or abridge any notice period
specified in such notice in our sole and absolute discretion. If Mr. Kroll
terminates his employment under the Kroll Agreement as a consequence of a change
in control of us, we will: (a) pay the total of (i) 24 months base salary, less
any required statutory deductions, if any; (ii) that portion of any then
declared and/or earned or accrued bonus, prorated to the end of the six-month
period from the effective date of termination that our chairman determines would
likely have been paid to Mr. Kroll; (iii) the present value, as determined by
us, acting reasonably, of each of the Group Benefits that would have been
enjoyed by Mr. Kroll during the next six months from the effective date of
termination assuming Mr. Krolls employment was not terminated and assuming the
then currently level of Group Benefits were continued for that six months; (iv)
any outstanding vacation pay as at the effective date of termination; (v) any
outstanding expenses owing to Mr. Kroll as at the effective date of termination;
(b) maintain Mr. Krolls Group Benefits for a period of one year from the
effective date of termination; and (c) subject to our then Option Plan and the
rules and policies of any regulatory authority and stock exchange having
jurisdiction over us, allow Mr. Kroll to then exercise any unexercised and fully
vested portion of stock options on the effective date of termination at any time
during three months from the effective date of termination.

Iain Ball

On July 1, 2016, our Board of Directors approved the entering
into of an executive services agreement with Iain Ball with a term expiring on
July 1, 2019 (the Ball Agreement).

The Ball Agreement is subject to automatic renewal on a
one-month to one-month term renewal basis unless either we or Mr. Ball provides
written notice not to renew the Ball Agreement no later than 30 days prior to
the end of the then current or renewal term.

Pursuant to the terms and provisions of the Ball Agreement: (a)
Mr. Ball is appointed as our Vice-President, Finance and will undertake and
perform the duties and responsibilities normally and reasonably associated with
such office; (b) we shall pay to Mr. Ball a monthly fee of $5,000; (c) grant to
Mr. Ball 500,000 stock options exercisable into 500,000 shares of common stock
at an exercise price of $0.15 per share expiring on August 13, 2022 and 750,000
stock options exercisable into 750,000 shares of common stock at an exercise
price of $0.40 per share expiring on December 9, 2022 (such options have already
been granted prior to the Ball Agreement); (d) provide Mr. Ball with employee
benefits, including group health insurance, accidental death and dismemberment
insurance, travel accident insurance, group life insurance, short-term
disability insurance, long-term disability insurance, drug coverage and dental
coverage (the Group Benefits); and (e) four weeks paid annual vacation per
calendar year.

We may terminate the employment of Mr. Ball under the Ball
Agreement without any notice or any payment in lieu of notice for just cause.
Mr. Ball may terminate his employment under the Ball Agreement for any reason by providing not less than 90
calendar days notice in writing to us, provided, however, that we may waive or
abridge any notice period specified in such notice in our sole and absolute
discretion.

- 54 -

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The employment of Mr. Ball will terminate upon the death of Mr.
Ball. Upon the death or Mr. Ball during the continuance of the Ball Agreement,
we will provide Mr. Balls estate and, if applicable, Mr. Balls immediate
family members with the following: (a) three months base salary, less any
required statutory deductions, if any; (b) that portion of any then declared
and/or earned or accrued bonus, prorated to the end of the three-month period
from the effective date of termination that our President determines would
likely have been paid to Mr. Ball; (c) any outstanding vacation pay as at the
effective date of termination; (d) any outstanding expenses owing to Mr. Ball as
at the effective date of termination; and (e) subject to our then Option Plan
and the rules and policies of any regulatory authority and stock exchange having
jurisdiction over us, allow Mr. Balls estate to then exercise any unexercised
and fully vested portion of stock options on the effective date of termination
at any time during three months from the effective date of termination.

If we elect to terminate the Ball Agreement without just cause,
and provided that Mr. Ball is in compliance with the relevant terms and
conditions of the Ball Agreement, we shall be obligated to provide a severance
package to Mr. Ball as follows: (a) a cash payment equating to an aggregate of
six months base salary, less any required statutory deductions, if any; (b)
that portion of any then declared and/or earned or accrued bonus, prorated to
the end of the three-month period from the effective date of termination that
our President determines would likely have been paid to Mr. Ball; (c) the
present value, as determined by us, acting reasonably, of each of the Group
Benefits that would have been enjoyed by Mr. Ball during the next three months
from the effective date of termination; (d) any outstanding vacation pay as at
the effective date of termination; (e) any outstanding expenses owing to Mr.
Ball as at the effective date of termination; (f) maintain Mr. Balls Group
Benefits for a period of six months from the effective date of termination; and
(g) subject to our then Option Plan and the rules and policies of any regulatory
authority and stock exchange having jurisdiction over us, allow Mr. Ball to then
exercise any unexercised and fully vested portion of stock options on the
effective date of termination at any time during three months from the effective
date of termination.

Mr. Ball may terminate his employment under the Ball Agreement
in connection with any change in control of us by providing not less than 90
calendar days notice in writing to us after the change in control has been
effected; provided, however, that we may waive or abridge any notice period
specified in such notice in our sole and absolute discretion. If Mr. Ball
terminates his employment under the Ball Agreement as a consequence of a change
in control of us, we will: (a) pay the total of (i) 12 months base salary, less
any required statutory deductions, if any; (ii) that portion of any then
declared and/or earned or accrued bonus, prorated to the end of the six-month
period from the effective date of termination that our President determines
would likely have been paid to Mr. Ball; (iii) the present value, as determined
by us, acting reasonably, of each of the Group Benefits that would have been
enjoyed by Mr. Ball during the next six months from the effective date of
termination assuming Mr. Balls employment was not terminated and assuming the
then currently level of Group Benefits were continued for that six months; (iv)
any outstanding vacation pay as at the effective date of termination; (v) any
outstanding expenses owing to Mr. Ball as at the effective date of termination;
(b) maintain Mr. Balls Group Benefits for a period of six months from the
effective date of termination; and (c) subject to our then Option Plan and the
rules and policies of any regulatory authority and stock exchange having
jurisdiction over us, allow Mr. Ball to then exercise any unexercised and fully
vested portion of stock options on the effective date of termination at any time
during three months from the effective date of termination.

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Ed Theobald

On July 1, 2016, our Board of Directors approved the entering
into of an executive services agreement with Edward Theobald with a term
expiring on July 1, 2019 (the Theobald Agreement).

The Theobald Agreement is subject to automatic renewal on a
one-month to one-month term renewal basis unless either we or Mr. Theobald
provides written notice not to renew the Theobald Agreement no later than 30
days prior to the end of the then current or renewal term.

Pursuant to the terms and provisions of the Theobald Agreement:
(a) Mr. Theobald is appointed as our General Manager and will undertake and
perform the duties and responsibilities normally and reasonably associated with
such office; (b) we shall pay to Mr. Theobald a monthly fee of $5,000; (c) grant
to Mr. Theobald 500,000 stock options exercisable into 500,000 shares of common
stock at an exercise price of $0.15 per share expiring on August 13, 2022 and
750,000 stock options exercisable into 750,000 shares of common stock at an
exercise price of $0.40 per share expiring on December 9, 2022 (such options
have already been granted prior to the Theobald Agreement); (d) provide Mr.
Theobald with employee benefits, including group health insurance, accidental
death and dismemberment insurance, travel accident insurance, group life
insurance, short-term disability insurance, long-term disability insurance, drug
coverage and dental coverage (the Group Benefits); and (e) four weeks paid
annual vacation per calendar year.

We may terminate the employment of Mr. Theobald under the
Theobald Agreement without any notice or any payment in lieu of notice for just
cause. Mr. Theobald may terminate his employment under the Theobald Agreement
for any reason by providing not less than 90 calendar days notice in writing to
us, provided, however, that we may waive or abridge any notice period specified
in such notice in our sole and absolute discretion.

The employment of Mr. Theobald will terminate upon the death of
Mr. Theobald. Upon the death or Mr. Theobald during the continuance of the
Theobald Agreement, we will provide Mr. Theobalds estate and, if applicable,
Mr. Theobalds immediate family members with the following: (a) three months
base salary, less any required statutory deductions, if any; (b) that portion of
any then declared and/or earned or accrued bonus, prorated to the end of the
three-month period from the effective date of termination that our President
determines would likely have been paid to Mr. Theobald; (c) any outstanding
vacation pay as at the effective date of termination; (d) any outstanding
expenses owing to Mr. Theobald as at the effective date of termination; and (e)
subject to our then Option Plan and the rules and policies of any regulatory
authority and stock exchange having jurisdiction over us, allow Mr. Theobalds
estate to then exercise any unexercised and fully vested portion of stock
options on the effective date of termination at any time during three months
from the effective date of termination.

If we elect to terminate the Theobald Agreement without just
cause, and provided that Mr. Theobald is in compliance with the relevant terms
and conditions of the Theobald Agreement, we shall be obligated to provide a
severance package to Mr. Theobald as follows: (a) a cash payment equating to an
aggregate of six months base salary, less any required statutory deductions, if
any; (b) that portion of any then declared and/or earned or accrued bonus,
prorated to the end of the three-month period from the effective date of
termination that our President determines would likely have been paid to Mr. Theobald; (c) the present value,
as determined by us, acting reasonably, of each of the Group Benefits that would
have been enjoyed by Mr. Theobald during the next three months from the
effective date of termination; (d) any outstanding vacation pay as at the
effective date of termination; (e) any outstanding expenses owing to Mr.
Theobald as at the effective date of termination; (f) maintain Mr. Theobalds
Group Benefits for a period of six months from the effective date of
termination; and (g) subject to our then Option Plan and the rules and policies
of any regulatory authority and stock exchange having jurisdiction over us,
allow Mr. Theobald to then exercise any unexercised and fully vested portion of
stock options on the effective date of termination at any time during three
months from the effective date of termination.

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Mr. Theobald may terminate his employment under the Theobald
Agreement in connection with any change in control of us by providing not less
than 90 calendar days notice in writing to us after the change in control has
been effected; provided, however, that we may waive or abridge any notice period
specified in such notice in our sole and absolute discretion. If Mr. Theobald
terminates his employment under the Theobald Agreement as a consequence of a
change in control of us, we will: (a) pay the total of (i) 12 months base
salary, less any required statutory deductions, if any; (ii) that portion of any
then declared and/or earned or accrued bonus, prorated to the end of the
six-month period from the effective date of termination that our President
determines would likely have been paid to Mr. Theobald; (iii) the present value,
as determined by us, acting reasonably, of each of the Group Benefits that would
have been enjoyed by Mr. Theobald during the next six months from the effective
date of termination assuming Mr. Theobalds employment was not terminated and
assuming the then currently level of Group Benefits were continued for that six
months; (iv) any outstanding vacation pay as at the effective date of
termination; (v) any outstanding expenses owing to Mr. Theobald as at the
effective date of termination; (b) maintain Mr. Theobalds Group Benefits for a
period of six months from the effective date of termination; and (c) subject to
our then Option Plan and the rules and policies of any regulatory authority and
stock exchange having jurisdiction over us, allow Mr. Theobald to then exercise
any unexercised and fully vested portion of stock options on the effective date
of termination at any time during three months from the effective date of
termination.

Kulwant Sandher

On July 1, 2016, our Board of Directors approved the entering
into of an executive services agreement with Hurricane Corporate Services Ltd.
(Hurricane Corp.), Mr. Sandhers services corporation, with a term expiring on
July 1, 2019 (the Sandher Agreement).

The Sandher Agreement is subject to automatic renewal on a
one-month to one-month term renewal basis unless either we or Hurricane Corp.
provides written notice not to renew the Sandher Agreement no later than 30 days
prior to the end of the then current or renewal term.

Pursuant to the terms and
  provisions of the Sandher Agreement: (a) through Hurricane Corp, Mr. Sandher is
  appointed as our Chief Financial Officer and will undertake and perform the
  duties and responsibilities normally and reasonably associated with such office;
  (b) we shall pay to Hurricane Corp. a monthly fee of $5,000; (c) grant to
  Hurricane Corp. and/or Mr. Sandher as soon as reasonably practicable after the
  effective date of the Sandher Agreement stock options to purchase a certain
  number of shares of common stock on terms reasonably consistent with our other
  recent executive officers; (d) provide Hurricane Corp. and/or Mr. Sandher with
  employee benefits, including group health insurance, accidental death and
  dismemberment insurance, travel accident insurance, group life insurance,
  short-term disability insurance, long-term disability insurance, drug coverage and dental coverage (the Group
Benefits); and (e) four weeks paid annual vacation per calendar year.

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We may terminate the engagement of Hurricane Corp. under the
Sandher Agreement without any notice or any payment in lieu of notice for just
cause. Hurricane Corp. may terminate its engagement under the Sandher Agreement
for any reason by providing not less than 90 calendar days notice in writing to
us, provided, however, that we may waive or abridge any notice period specified
in such notice in our sole and absolute discretion.

The engagement of Hurricane Corp. will terminate upon the death
of Mr. Sandher. Upon the death or Mr. Sandher during the continuance of the
Sandher Agreement, we will provide Mr. Sandhers estate and, if applicable, Mr.
Sandhers immediate family members with the following: (a) three months base
salary, less any required statutory deductions, if any; (b) that portion of any
then declared and/or earned or accrued bonus, prorated to the end of the
three-month period from the effective date of termination that our President
determines would likely have been paid to Hurricane Corp.; (c) any outstanding
vacation pay as at the effective date of termination; (d) any outstanding
expenses owing to Hurricane Corp. as at the effective date of termination; and
(e) subject to our then Option Plan and the rules and policies of any regulatory
authority and stock exchange having jurisdiction over us, allow Mr. Sandhers
estate to then exercise any unexercised and fully vested portion of stock
options on the effective date of termination at any time during three months
from the effective date of termination.

If we elect to terminate the Sandher Agreement without just
cause, and provided that Hurricane Corp. is in compliance with the relevant
terms and conditions of the Sandher Agreement, we shall be obligated to provide
Hurricane Corp. with the following: (a) a cash payment equating to an aggregate
of six months base salary, less any required statutory deductions, if any; (b)
that portion of any then declared and/or earned or accrued bonus, prorated to
the end of the three-month period from the effective date of termination that
our President determines would likely have been paid to Hurricane Corp.; (c) the
present value, as determined by us, acting reasonably, of each of the Group
Benefits that would have been enjoyed by Hurricane Corp. and/or Mr. Sandher
during the next three months from the effective date of termination; (d) any
outstanding vacation pay as at the effective date of termination; (e) any
outstanding expenses owing to Hurricane Corp. as at the effective date of
termination; (f) maintain Hurricane Corp.s and/or Mr. Sandhers Group Benefits
for a period of six months from the effective date of termination; and (g)
subject to our then Option Plan and the rules and policies of any regulatory
authority and stock exchange having jurisdiction over us, allow the Executive
and Mr. Sandher to then exercise any unexercised and fully vested portion of
stock options on the effective date of termination at any time during three
months from the effective date of termination.

Hurricane Corp. may terminate its engagement under the Sandher
Agreement in connection with any change in control of us by providing not less
than 90 calendar days notice in writing to us after the change in control has
been effected; provided, however, that we may waive or abridge any notice period
specified in such notice in our sole and absolute discretion. If Hurricane Corp.
terminates its engagement under the Sandher Agreement as a consequence of a
change in control of us, we will: (a) pay the total of (i) 12 months base
salary, less any required statutory deductions, if any; (ii) that portion of any
then declared and/or earned or accrued bonus, prorated to the end of the
six-month period from the effective date of termination that our President
determines would likely have been paid to Hurricane Corp.; (iii) the present
value, as determined by us, acting reasonably, of each of the Group Benefits
that would have been enjoyed by Hurricane Corp. and/or Mr. Sandher during the
next six months from the effective date of termination assuming Hurricane
Corp.s engagement was not terminated and assuming the then currently level of Group Benefits were continued for that six
months; (iv) any outstanding vacation pay as at the effective date of
termination; (v) any outstanding expenses owing to Hurricane Corp. as at the
effective date of termination; (b) maintain Hurricane Corp.s and/or Mr.
Sandhers Group Benefits for a period of six months from the effective date of
termination; and (c) subject to our then Option Plan and the rules and policies
of any regulatory authority and stock exchange having jurisdiction over us,
allow Hurricane Corp. and Mr. Sandher to then exercise any unexercised and fully
vested portion of stock options on the effective date of termination at any time
during three months from the effective date of termination.

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Henry Reisner

On July 1, 2016, our Board of Directors approved the entering
into of an executive services agreement with Henry Reisner with a term expiring
on July 1, 2019 (the Resiner Agreement).

The Reisner Agreement is subject to
  automatic renewal on a one-month to one-month term renewal basis unless either
  we or Mr. Reisner provides written notice not to renew the Reisner Agreement no
  later than 30 days prior to the end of the then current or renewal term.

Pursuant to the terms and provisions of the Reisner Agreement:
(a) Mr. Reisner is appointed as our Vice-President, Finance and will undertake
and perform the duties and responsibilities normally and reasonably associated
with such office; (b) we shall pay to Mr. Reisner a monthly fee of $5,000; (c)
grant to Mr. Reisner 1,250,000 stock options exercisable into 1,250,000 shares
of common stock at an exercise price of $0.15 per share expiring on August 13,
2022 and 1,250,000 stock options exercisable into 1,250,000 shares of common
stock at an exercise price of $0.40 per share expiring on December 9, 2022 (such
options have already been granted prior to the Reisner Agreement); (d) provide
Mr. Reisner with employee benefits, including group health insurance, accidental
death and dismemberment insurance, travel accident insurance, group life
insurance, short-term disability insurance, long-term disability insurance, drug
coverage and dental coverage (the Group Benefits); and (e) four weeks paid
annual vacation per calendar year.

We may terminate the employment of Mr. Reisner under the
Reisner Agreement without any notice or any payment in lieu of notice for just
cause. Mr. Reisner may terminate his employment under the Reisner Agreement for
any reason by providing not less than 90 calendar days notice in writing to us,
provided, however, that we may waive or abridge any notice period specified in
such notice in our sole and absolute discretion.

The employment of Mr. Reisner will terminate upon the death of
Mr. Reisner. Upon the death or Mr. Reisner during the continuance of the Reisner
Agreement, we will provide Mr. Reisners estate and, if applicable, Mr.
Reisners immediate family members with the following: (a) three months base
salary, less any required statutory deductions, if any; (b) that portion of any
then declared and/or earned or accrued bonus, prorated to the end of the
three-month period from the effective date of termination that our President
determines would likely have been paid to Mr. Reisner; (c) any outstanding
vacation pay as at the effective date of termination; (d) any outstanding
expenses owing to Mr. Reisner as at the effective date of termination; and (e)
subject to our then Option Plan and the rules and policies of any regulatory
authority and stock exchange having jurisdiction over us, allow Mr. Reisners
estate to then exercise any unexercised and fully vested portion of stock
options on the effective date of termination at any time during three months
from the effective date of termination.

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If we elect to terminate the Reisner Agreement without just
cause, and provided that Mr. Reisner is in compliance with the relevant terms
and conditions of the Reisner Agreement, we shall be obligated to provide a
severance package to Mr. Reisner as follows: (a) a cash payment equating to an
aggregate of six months base salary, less any required statutory deductions, if
any; (b) that portion of any then declared and/or earned or accrued bonus,
prorated to the end of the three-month period from the effective date of
termination that our President determines would likely have been paid to Mr.
Reisner; (c) the present value, as determined by us, acting reasonably, of each
of the Group Benefits that would have been enjoyed by Mr. Reisner during the
next three months from the effective date of termination; (d) any outstanding
vacation pay as at the effective date of termination; (e) any outstanding
expenses owing to Mr. Reisner as at the effective date of termination; (f)
maintain Mr. Reisners Group Benefits for a period of six months from the
effective date of termination; and (g) subject to our then Option Plan and the
rules and policies of any regulatory authority and stock exchange having
jurisdiction over us, allow Mr. Reisner to then exercise any unexercised and
fully vested portion of stock options on the effective date of termination at
any time during three months from the effective date of termination.

Mr. Reisner may terminate his employment under the Reisner
Agreement in connection with any change in control of us by providing not less
than 90 calendar days notice in writing to us after the change in control has
been effected; provided, however, that we may waive or abridge any notice period
specified in such notice in our sole and absolute discretion. If Mr. Reisner
terminates his employment under the Reisner Agreement as a consequence of a
change in control of us, we will: (a) pay the total of (i) 12 months base
salary, less any required statutory deductions, if any; (ii) that portion of any
then declared and/or earned or accrued bonus, prorated to the end of the
six-month period from the effective date of termination that our President
determines would likely have been paid to Mr. Reisner; (iii) the present value,
as determined by us, acting reasonably, of each of the Group Benefits that would
have been enjoyed by Mr. Reisner during the next six months from the effective
date of termination assuming Mr. Reisners employment was not terminated and
assuming the then currently level of Group Benefits were continued for that six
months; (iv) any outstanding vacation pay as at the effective date of
termination; (v) any outstanding expenses owing to Mr. Reisner as at the
effective date of termination; (b) maintain Mr. Reisners Group Benefits for a
period of six months from the effective date of termination; and (c) subject to
our then Option Plan and the rules and policies of any regulatory authority and
stock exchange having jurisdiction over us, allow Mr. Reisner to then exercise
any unexercised and fully vested portion of stock options on the effective date
of termination at any time during three months from the effective date of
termination.

Mark West

On November 1, 2016, our Board of Directors approved the
entering into of an executive services agreement with Mark West with a term
expiring on November 1, 2019 (the West Agreement).

The West Agreement is
  subject to automatic renewal on a one-month to one-month term renewal basis
  unless either we or Mr. West provides written notice not to renew the West
  Agreement no later than 30 days prior to the end of the then current or renewal
  term.

Pursuant to the terms and provisions of the West Agreement: (a)
Mr. West is appointed as our Vice-President, Sales & Dealerships and will
undertake and perform the duties and responsibilities normally and reasonably
associated with such office; (b) we shall pay to Mr. West an initial monthly fee
of $4,000 for the month of November 2016, and thereafter a monthly fee of
$12,000; (c) pay Mr. West a commission of $10,000 for each and every dealership
which is officially opened, which was directly sourced and completed by Mr. West
and which is established under an authorization to sell and distribute our
goods and services in a particular area; (c) grant to Mr. West as soon as
reasonably practicable after the effective date of the West Agreement stock
options to purchase a certain number of Common Shares on terms reasonably
consistent with our other recent executive officers; (d) provide Mr. West with
individual benefits of up to $10,000 per annum as a car allowance and up to
$5,000 per annum as an education allowance (the Individual Benefits); (e)
provide Mr. West with employee benefits, including group health insurance,
accidental death and dismemberment insurance, travel accident insurance, group
life insurance, short-term disability insurance, long-term disability insurance,
drug coverage and dental coverage (the Group Benefits); and (f) four weeks
paid annual vacation per calendar year.

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We may terminate the employment of Mr. West under the West
Agreement without any notice or any payment in lieu of notice for just cause.
Mr. West may terminate his employment under the West Agreement for any reason by
providing not less than 90 calendar days notice in writing to us, provided,
however, that we may waive or abridge any notice period specified in such notice
in our sole and absolute discretion.

The employment of Mr. West will terminate upon the death of Mr.
West. Upon the death or Mr. West during the continuance of the West Agreement,
we will provide Mr. Wests estate and, if applicable, Mr. Wests immediate
family members with the following: (a) three months base salary, less any
required statutory deductions, if any; (b) any outstanding commissions, less any
required statutory deductions, if any; (c) that portion of any then declared
and/or earned or accrued bonus, prorated to the end of the three-month period
from the effective date of termination that our President determines would
likely have been paid to Mr. West; (d) any outstanding vacation pay as at the
effective date of termination; (e) any outstanding expenses owing to Mr. West as
at the effective date of termination; and (f) subject to our then Option Plan
and the rules and policies of any regulatory authority and stock exchange having
jurisdiction over us, allow Mr. Wests estate to then exercise any unexercised
and fully vested portion of stock options on the effective date of termination
at any time during three months from the effective date of termination.

If we elect to terminate the West Agreement without just cause,
and provided that Mr. West is in compliance with the relevant terms and
conditions of the West Agreement, we shall be obligated to provide a severance
package to Mr. West as follows: (a) if the effective date of termination occurs
within the first year of the West Agreement, a cash payment equating to an
aggregate of nine months base salary, less any required statutory deductions,
if any; (b) if the effective date of termination occurs after the first year but
before November 1, 2019, a cash payment equating to an aggregate of twelve
months base salary, less any required statutory deductions, if any; (c) if the
effective date of termination occurs after November 1, 2019 and during any
renewal period during the continuance of the West Agreement, a cash payment
equating to the greater of (i) twelve months base salary, less any required
statutory deductions, if any, and (ii) $100,000; (d) any outstanding
commissions, less any required statutory deductions, if any; (e) that portion of
any then declared and/or earned or accrued bonus, prorated to the end of the
three-month period from the effective date of termination that our President
determines would likely have been paid to Mr. West; (f) the present value, as
determined by us, acting reasonably, of each of the Individual Benefits that
would have been enjoyed by Mr. West during the next six months from the
effective date of termination; (g) the present value, as determined by us,
acting reasonably, of each of the Group Benefits that would have been enjoyed by
Mr. West during the next six months from the effective date of termination; (h)
any outstanding vacation pay as at the effective date of termination; (i) any
outstanding expenses owing to Mr. West as at the effective date of termination;
(j) maintain Mr. Wests Individual Benefits for a period of six months from the
effective date of termination; (k) maintain Mr. Wests Group
Benefits for a period of six months from the effective date of termination; and
(l) subject to our then Option Plan and the rules and policies of any regulatory
authority and stock exchange having jurisdiction over us, allow Mr. West to then
exercise any unexercised and fully vested portion of stock options on the
effective date of termination at any time during three months from the effective
date of termination.

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Mr. West may terminate his employment under the West Agreement
in connection with any change in control of us by providing not less than 90
calendar days notice in writing to us after the change in control has been
effected; provided, however, that we may waive or abridge any notice period
specified in such notice in our sole and absolute discretion. If Mr. West
terminates his employment under the West Agreement as a consequence of a change
in control of us, we will: (a) pay the total of (i) 12 months base salary, less
any required statutory deductions, if any; (ii) any outstanding commissions,
less any required statutory deductions, if any; (iii) that portion of any then
declared and/or earned or accrued bonus, prorated to the end of the six-month
period from the effective date of termination that our President determines
would likely have been paid to Mr. West; (iv) the present value, as determined
by us, acting reasonably, of each of the Individual Benefits that would have
been enjoyed by Mr. West during the next six months from the effective date of
termination assuming Mr. Wests employment was not terminated and assuming the
then currently level of Individual Benefits were continued for that six months;
(v) the present value, as determined by us, acting reasonably, of each of the
Group Benefits that would have been enjoyed by Mr. West during the next six
months from the effective date of termination assuming Mr. Wests employment was
not terminated and assuming the then currently level of Group Benefits were
continued for that six months; (vi) any outstanding vacation pay as at the
effective date of termination; (vii) any outstanding expenses owing to Mr. West
as at the effective date of termination; (b) maintain Mr. Wests Individual
Benefits for a period of six months from the effective date of termination; (c)
maintain Mr. Wests Group Benefits for a period of six months from the effective
date of termination; and (d) subject to our then Option Plan and the rules and
policies of any regulatory authority and stock exchange having jurisdiction over
us, allow Mr. West to then exercise any unexercised and fully vested portion of
stock options on the effective date of termination at any time during three
months from the effective date of termination.

Stock Option Plans and Stock Options

The following table sets forth, as at December 31, 2016, the
equity compensation plans pursuant to which equity securities of the Company may
be issued:

Plan
      Category
    Number of securities to
      be issued upon exercise of outstanding options,
      warrants and rights (a)
    Weighted-average
      exercise price of outstanding options,
      warrants and rights ($) (b)
    Number of securities remaining
      available for future issuance under equity
      compensation plans (excluding securities reflected
      in column (a)) (c)Equity compensation plans approved by
      securityholdersEquity compensation plans not approved by
      securityholders
    56,175,000
    $0.19
    3,825,000Total
    56,175,000
    
    3,825,000


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2015 Stock Option Plan

On June 11, 2015, our Board of Directors adopted the 2015 Stock
Option Plan (the Stock Option Plan) under which an aggregate of 60,000,000
shares may be issued, subject to adjustment as described in the Stock Option
Plan. As at December 31, 2016 there were 56,175,000 outstanding options under
the Stock Option Plan leaving an additional 3,825,000 options to acquire shares
of common stock that may be granted under the Stock Option Plan.

The purpose of the Stock Option Plan is to retain the services
of valued key employees, directors and consultants of the Company and such other
persons as the plan administrator, which is currently the Board of Directors,
shall select in accordance with the eligibility requirements of the Stock Option
Plan, and to encourage such persons to acquire a greater proprietary interest in
the Company, thereby strengthening their incentive to achieve the objectives of
the shareholders of the Company, and to serve as an aid and inducement in the
hiring of new employees and to provide an equity incentive to consultants and
other persons selected by the plan administrator. The Stock Option Plan shall be
administered initially by the Board of Directors of the Company, except that the
Board may, in its discretion, establish a committee composed of two (2) or more
members of the Board to administer the Stock Option Plan, which committee may be
an executive, compensation or other committee, including a separate committee
especially created for this purpose.

Unless accelerated in accordance with the Stock Option Plan,
unvested options shall terminate immediately upon the optionee resigning from or
the Company terminating the optionees employment or contractual relationship
with the Company or any related company for any reason whatsoever, including
death or disability. Options that have vested shall terminate, to the extent not
previously exercised, upon the occurrence of the first of the following events:
(i) the expiration of the option as designated by the plan administrator; (ii)
the date of an optionees termination of employment or contractual relationship
with the Company or any related company for cause (as determined in the sole
discretion of the plan administrator); (iii) the expiration of three (3) months
from the date of an optionees termination of employment or contractual
relationship with the Company or any related company for any reason whatsoever
other than cause, death or disability; or (iv) the expiration of three (3)
months from termination of an optionees employment or contractual relationship
by reason of death or disability. Upon the death of an optionee, any vested
options held by the optionee shall be exercisable only by the person or persons
to whom such optionees rights under such option shall pass by the optionees
will or by the laws of descent and distribution of the optionees domicile at
the time of death and only until such options terminate as provided above. For
purposes of the Stock Option Plan, unless otherwise defined in the stock option
agreement between the Company and the optionee, disability shall mean
medically determinable physical or mental impairment which has lasted or can be
expected to last for a continuous period of not less than six (6) months or that
can be expected to result in death. The plan administrator shall determine
whether an optionee has incurred a disability on the basis of medical evidence
acceptable to the plan administrator. Upon making a determination of disability,
the plan administrator shall, for purposes of the Stock Option Plan, determine
the date of an optionees termination of employment or contractual
relationship.

The foregoing summary of the Stock Option Plan is not complete
and is qualified in its entirety by reference to the Stock Option Plan, which is
filed as Exhibit 99.1 to our registration statement on Form F-1 under the U.S.
Securities Act, as filed with the SEC on October 11, 2016 and is incorporated by
reference herein.

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Outstanding Option-based Awards for Named Executive
Officers

The following table reflects all option-based awards for each
Named Executive Officer outstanding as at December 31, 2016. The Company does
not have any other equity incentive plans other than its Stock Option Plan. As
of the date hereof there are no share based award plans for any of the directors
or the named executive officers of the Company:

Named Executive Officer
    Optionbased AwardsNumber of
      securities underlying unexercised options
      (#)
    Option
      exercise price ($)
    Option
      expiration date
    Value of
      unexercised in-the-money options
      ($)(1)Jerry Kroll President and Chief
      Executive Officer
    45,000,000 5,000,000
    $0.15 $0.40
    June 11, 2022 Dec. 9, 2022
    15,093,750Kulwant Sandher Chief Financial
      Officer and Secretary
    Nil
    Nil
    Nil
    NilIain Ball Vice-President, Finance
    500,000 750,000
    $0.15 $0.40
    Aug. 13, 2022 Dec. 9, 2022
    254,167Henry Reisner Chief Operating
      Officer
    1,250,000 1,250,000
    $0.15 $0.40
    Aug. 13, 2022 Dec. 9, 2022
    541,667Ed Theobald General Manager
    500,000 750,000
    $0.15 $0.40
    Aug. 13, 2022 Dec. 9, 2022
    254,167Mark West Vice-President,
      Sales & Dealerships
    Nil
    Nil
    Nil
    Nil


|Notes:
|------
|(1)   

Incentive Plan Awards

The following table provides information concerning the
incentive award plans of the Company with respect to each Named Executive
Officer during the fiscal year ended December 31, 2016. The only incentive award
plan of the Company during such fiscal year was the Stock Option Plan:

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Named Executive Officer
    Option-based Awards  Value
      Vested During the Year ($)(1)
    Non-Equity Incentive Plan
      Compensation  Value Vested During the Year
      ($)Jerry Kroll President and Chief
      Executive Officer
    15,093,750
    NilKulwant Sander Chief Financial Officer
      and Secretary
    Nil
    NilIain Ball Vice-President, Finance
    254,167
    NilHenry Reisner Chief Operating
      Officer
    541,667
    NilEd Theobald General Manager
    254,167
    NilMark West Vice-President, Sales &
      Dealerships
    Nil
    Nil


|Notes:
|------
|(1)   

Director Compensation for Fiscal 2016

The Board of Directors acting as the Compensation Committee
assesses the appropriate level of remuneration for the directors and officers of
the Company. The Board as a whole makes the final determination in respect of
compensation matters. Remuneration is assessed and determined by taking into
account such factors as the size of the Company and the level of compensation
earned by directors and officers of companies of comparable size and industry.

The only arrangements the Company has, standard or otherwise,
pursuant to which directors are compensated by the Company for their services in
their capacity as directors, or for committee participation, involvement in
special assignments or for services as consultants or experts for the financial
year ended December 31, 2016, are through the issuance of stock options. The
number of options to be granted from time to time is determined by the Board in
its discretion.

During the fiscal year ended December 31, 2016, there were
three directors, Jerry Kroll, Shaun Greffard and Robert Tarzwell. Mr. Kroll
whose compensation information is reported in the Summary Compensation Table for
Named Executive Officers above.

The Company reimburses out-of-pocket costs that are incurred by
the directors. Neither the Company nor any of its subsidiaries has entered into
a service contract with any director providing for benefits upon termination of
office.

Outstanding Option-based Awards

The following table shows all option-based awards for each
director of the Company outstanding as at December 31, 2016. The Company does
not have any equity incentive plan other than the Stock Option Plan.

- 65 -

---

Name of
      Director
    Optionbased AwardsNumber of
      securities underlying unexercised options
      (#)
    Option
      exercise price ($)
    Option
      expiration date
    Value of
      unexercised in-the-money options
      ($)(1)Jerry Kroll
    45,000,000 5,000,000
    $0.15 $0.40
    June 11, 2022 Dec. 9, 2022
    15,093,750Shaun Greffard
    50,000 25,000
    $0.15 $0.40
    Aug. 13, 2022 Dec. 9, 2022
    17,917Robert Tarzwell
    25,000
    $0.15
    Aug. 13, 2022
    7,083


|Notes:
|------
|(1)   

Incentive Plan Awards  Value Vested or Earned

During the fiscal year ended December 31, 2016, there were
three directors. Mr. Krolls incentive plan awards are reported in the Summary
Compensation Table for Named Executive Officers above and Mr. Greffards and Mr.
Tarzwells option awards are reported above.

Pension Benefits

We do not have any defined benefit pension plans or any other
plans providing for retirement payments or benefits.

Termination of Employment and Change of Control
Benefits

Details with respect to termination of employment and change of
control benefits for our directors and executive officers is reported above
under the section titled Executive Compensation Agreements.

C.Board Practices

Each director of our Company is to serve for a term of one year
ending on the date of the subsequent annual meeting of stockholders following
the annual meeting at which such director was elected. Notwithstanding the
foregoing, each director is to serve until his successor is elected and
qualified or until his death, resignation or removal. Our board of directors is
to elect our officers and each officer is to serve until his successor is
elected and qualified or until his or her death, resignation or removal.

Director Independence

Our Board has determined that the following directors are
independent as such directors do not have a direct or indirect material
relationship with the issuer. A material relationship is a relationship which
could, in the view of the Companys board of directors, be reasonably expected
to interfere with the exercise of a members independent judgment.

- 66 -

---

- Shaun Greffard; and
- Robert Tarzwell.

Audit Committee and Financial Expert

Our Audit Committee consists of Jerry Kroll, Shaun Greffard and
Robert Tarzwell. Messrs. Greffard and Tarzwell are independent under the listing
standards regarding independence of the NYSE MKT Equities Exchange. Mr.
Kroll is not independent as he is our Chief Executive Officer.

National Instrument 52-110 Audit Committees(NI
52-110) of the Canadian Securities Administrators provides that a member of an
audit committee is independent if the member has no direct or indirect
material relationship with the issuer, which could, in the view of the
corporations board of directors, reasonably interfere with the exercise of the
members independent judgment. Each of Messrs. Greffard and Tarzwell are also
considered independent within the meaning of NI 52-110.

The Audit Committee is mandated to monitor the audit and
preparation of our financial statements and to review and recommend to the Board
of Directors all financial disclosure contained in our public documents. The
Audit Committee is also mandated to recommend to the Board of Directors the
external auditors to be nominated for appointment by the Board, to set the
compensation for the external auditors, to provide oversight of the external
auditors, and to ensure that the external auditors report directly to the Audit
Committee. The Audit Committee also approves in advance any permitted services
to be provided by the external auditors which are not related to the audit.

Our Company provides appropriate funding as determined by the
Audit Committee to permit the Audit Committee to perform its duties and to
compensate its advisors. The Audit Committee, at its discretion, has the
authority to initiate special investigations, and if appropriate, hire special
legal, accounting or other outside advisors or experts to assist the Audit
Committee to fulfill its duties.

The Audit Committee operates pursuant to a written charter, a
copy of which is included as an exhibit to our registration statement on Form
F-1 under the U.S. Securities Act, as filed with the SEC on October 11, 2016.

Our Audit Committee Financial Expert is Robert Tarzwell.

Other Board Committees

Our Board of Directors has established a Nominating and
Corporate Governance Committee that operates under a written charter approved by
the Board, a copy of which is included as an exhibit to our registration
statement on Form F-1 under the U.S. Securities Act, as filed with the SEC on
October 11, 2016. The Nominating and Corporate Governance Committee is comprised
of Jerry Kroll, Shaun Greffard and Robert Tarzwell. Mr. Tarzwell is the Chairman
of the Nominating and Corporate Governance Committee. The Nominating and
Corporate Governance Committee is responsible for developing an appropriate
approach to corporate governance issues and compliance with governance rules.
The Nominating and Corporate Governance Committee is responsible for reviewing
on a periodic basis the composition of the Board and, when appropriate, with maintaining a list of potential candidates for Board
membership and interviewing potential candidates for Board membership.

- 67 -

---

Our Board of Directors has established a Compensation Committee
that operates under a written charter approved by the Board, a copy of which is
included as an exhibit to our registration statement on Form F-1 under the U.S.
Securities Act, as filed with the SEC on October 11, 2016. The Compensation
Committee is comprised of Jerry Kroll, Shaun Greffard and Robert Tarzwell. Mr.
Greffard is the Chairman of the Compensation Committee.

Code of Business Conduct and Ethics

We have adopted a code of ethics that applies to our Chief
Executive Officer, Chief Financial Officer and all other employees, a copy of
which is included as an exhibit to our registration statement on Form F-1 under
the U.S. Securities Act, as filed with the SEC on October 11, 2016.

D.Employees

As of December 31, 2016, we employed a total of 14 full-time
and 2 part-time people at our principal executive offices in Vancouver, British
Columbia. None of our employees are covered by a collective bargaining
agreement.

The breakdown of employees by main category of activity is as
follows:

Activity
    Number of EmployeesEngineering/R&D
    7Sales & Marketing
    2General & Administration
    2Executives
    5


E.Share Ownership

Shares

The shareholdings of our officers and directors are set forth
below as of the date hereof.

Holder name
    No. of Shares
      held
    Percentage of holding
    Percentage of holding on
      a fully diluted basis(1)% in capital
    % in voting
    % in capital
    % in votingJerry Kroll
    17,175,000(2)
    40.40%
    40.40%
    56.62%
    56.62%Kulwant Sandher
    Nil
    Nil
    Nil
    *
    *Iain Ball
    62,500
    *
    *
    1.16%
    1.16%Henry Reisner
    6,050,000(3)
    14.23%
    14.23%
    7.19%
  7.19%


- 68 -

---

Holder name
    No. of Sharesheld
    Percentage of holding
    Percentage of holding ona fully diluted basis(1)% incapital
    % in voting
    % incapital
    % in votingEd Theobald
    500,000
    1.18%
    1.18%
    1.47%
    1.47%Shaun Greffard
    Nil
    Nil
    Nil
    *
    *Robert Tarzwell
    375,000(4)
    *
    *
    *
    *Mark West
    15,500
    *
    *
    *
    *


|Notes:
|------
|(*)   
|(1)   
|(2)   
|(3)   
|(4)   

Options

The stock options, exercisable into common shares of the
Company, held by our officers and directors are set forth below as of the date
hereof.

Name
    Position
    Allotment Date
    ExpirationDate
    ExercisePrice(CADDollar)(1)
    VestingDetails
    Total**(2)**Jerry Kroll
    President and Chief
      Executive Officer
    Jun. 11, 2015 Dec. 9, 2015
      Feb. 17, 2017
    Jun. 11, 2022 Dec. 9, 2022
      Feb. 17, 2024
    $0.15 $0.40 $1.00
    (3) (3) (4)
    45,000,000Kulwant Sandher
    Chief Financial Officer and
      Secretary
    Feb. 17, 2017
    Feb. 17, 2024
    $1.00
    (5)
    250,000Iain Ball
    Vice-President,Finance
    Aug. 13, 2015 Dec. 9, 2015
      Feb. 17, 2017
    Aug. 13, 2022 Dec. 9, 2022
      Feb. 17, 2024
    $0.15 $0.40 $1.00
    (3) (3) (4)
    500,000 750,000 10,000Henry Reisner
    Chief Operating Officer
    Aug. 13, 2015 Dec. 9, 2015
    Aug. 13, 2022 Dec. 9, 2022
    $0.15 $0.40
    (3) (3)
    16,667 60,667


- 69 -

---

Feb. 17, 2017
    Feb. 17, 2017
    $1.00
    (4)Ed Theobald
    General Manager
    Aug. 13, 2015 Dec. 9, 2015
      Feb. 17, 2017
    Aug. 13, 2022 Dec. 9, 2022
      Feb. 17, 2017
    $0.15 $0.40 $1.00
    (3) (3) (4)
    500,000 750,000 10,000Shaun Greffard
    Director
    Aug. 13, 2015 Dec. 9, 2015
      Feb. 17, 2017
    Aug. 13, 2022 Dec. 9, 2022
      Feb. 17, 2017
    $0.15 $0.40 $1.00
    (3) (3) (4)
    50,000 25,000 250,000Robert Tarzwell
    Director
    Aug. 13, 2015 Feb. 17, 2017
    Aug. 13, 2022 Feb. 17, 2017
    $0.15 $1.00
    (3) (4)
    25,000 5,000Mark West
    Vice-President, Sales &
      Dealerships
    Feb. 17, 2017
    Feb. 17, 2024
    $1.00
    (6)
    225,000


|Notes:
|------
|(1)   
|(2)   
|(3)   
|(4)   
|(5)   
|(6)   

Warrants

Warrants, exercisable into common shares of the Company, held
by our officers and directors are set forth below as of the date hereof.

Name
    Position
    Allotment
      date
    Expiration
      date
    Exercise
      price
    TotalJerry Kroll
    President, CEO and Director
    Jun. 15, 2015 Jan. 26, 2016
    Jun. 15, 2020 Jan. 26, 2021
    $0.40 $1.00
    50,000 125,000Iain Ball
    Vice-President, Finance
    Aug 19, 2015
    Aug. 19, 2020
    $1.00
    62,500Robert Tarzwell
    Director
    Jun. 26, 2015
    Jun. 26, 2020
    $0.40
    375,000(1)Mark West
    Vice-President, Sales &
      Dealerships
    Dec. 1, 2015
    Dec. 1, 2020
    $1.00
    15,500


|Notes:
|------
|(1)   

- 70 -

---

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A.Major Shareholders

Security Ownership of Certain Beneficial Owners and
Management

The following table sets forth certain information regarding
the beneficial ownership of our common stock as of April 25, 2017 by (a) each
stockholder who is known to us to own beneficially 5% or more of our outstanding
common stock; (b) all directors; (c) our executive officers, and (d) all
executive 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 common stock.

Name and Municipality of
      Residence
    Common Shares of theCompany
      BeneficiallyOwned, or Controlled orDirected,
      Directly orIndirectly(1)
    Percentage of CommonShares
      Beneficially Owned,or Controlled or Directed,Directly or Indirectly(2)Directors and Executive Officers:Jerry Kroll Vancouver, BC, Canada
      President, CEO and Director
    42,766,665 (3)
    62.8%Iain Ball Vancouver, BC, Canada
      Vice-President, Finance
    662,451 (4)
    1.5%Henry Reisner Vancouver, BC, Canada
      COO
    7,143,738(5)
    16.4%Kulwant Sandher Vancouver, BC, Canada
      CFO
    Nil
    NilEd Theobald Vancouver, BC, Canada
      General Manager
    1,036,451(6)
    2.4%Shaun Greffard Surrey, BC, Canada
      Director
    33,841(7)
    *Robert Tarzwell Vancouver, BC, Canada
      Director
    761,430(8)
    1.8%Mark West Vancouver, BC, Canada
      Vice-President, Sales & Dealerships
    31,000(9)
    *Directors and Executive Officers as aGroup(Seven Persons)
    52,435,576(10)
    74.1%


- 71 -

---

Name and Municipality of
      Residence
    Common Shares of theCompanyBeneficiallyOwned, or Controlled orDirected,Directly orIndirectly(1)
    Percentage of CommonShares
      Beneficially Owned,or Controlled or Directed,Directly or Indirectly(2)Other 5% or more Shareholders:Megan Martin Shareholder
    5,400,000 (11)
    11.9%Yuan Sheng Zhang Shareholder
    5,400,000(12)
    11.9%Cheng Qun Sang Shareholder
    4,000,000(13)
    9.0%Unison International Holdings Ltd.
      Shareholder
    6,400,000(14)
    13.8%Zongshen (Canada) Environtech Ltd.
      Shareholder
    5,600,000 (15)
    12.4%


|Notes:
|------
|*     
|(1)   
|(2)   
|(3)   
|(4)   
|(5)   
|(6)   
|(7)   
|(8)   
|(9)   
|(10)  

- 72 -

---

|(11) | This figure consists of (i) 1,250,000 shares of common
      stock registered directly to Megan Martin, (ii) 1,250,000 shares of common
      stock held of record by Ms. Martins husband, Yuan Sheng Zhang, (iii)
      200,000 shares of common stock held of record by Ms. Martins son, Bo Hong
      Zhang, (iv) 1,250,000 shares of common stock issuable upon exercise of
      warrants registered directly to Ms. Martin, (v) 1,250,000 shares of common
      stock issuable upon exercise of warrants held of record by Ms. Martins
      husband, and (vi) 200,000 shares of common stock issuable upon exercise of
      warrants held of record by Ms. Martins son.
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(12) | This figure consists of (i) 1,250,000 shares of common
      stock registered directly to Yuan Sheng Zhang, (ii) 1,250,000 shares of
      common stock held of record by Mr. Zhangs wife, Megan Martin, (iii)
      200,000 shares of common stock held of record by Mr. Zhangs son, Bo Hong
      Zhang, (iv) 1,250,000 shares of common stock issuable upon exercise of
      warrants registered directly to Mr. Zhang, (v) 1,250,000 shares of common
      stock issuable upon exercise of warrants held of record by Mr. Zhangs
      wife, and (vi) 200,000 shares of common stock issuable upon exercise of
      warrants held of record by Mr. Zhangs son.           
|(13) | This figure consists of (i) 2,000,000 shares of common
      stock registered directly to Cheng Qun Sang and (ii) 2,000,000 shares of
      common stock issuable upon exercise of warrants registered directly to
      Cheng Qun Sang.                                                                                                                                                                                                                                                                                                                                                                                                                                            
|(14) | This figure consists of (i) 2,400,000 shares of common
      stock registered to Unison International Holdings Ltd. and (ii) 4,000,000
      shares of common stock issuable upon exercise of warrants registered to
      Unison International Holdings Ltd. Mr. Ming Zhang is the President of
      Unison International Holdings Ltd. and has discretionary voting and
      investment authority over securities held by Unison International Holdings
      Ltd.                                                                                                                                                                                                              
|(15) | This figure consists of (i) 2,800,000 shares of common
      stock registered to Zongshen (Canada) Environtech Ltd. and (ii) 2,800,000
      shares of common stock issuable upon exercise of warrants registered to
      Zongshen (Canada) Environtech Ltd. Mr. Daxue Zhang is the sole director of
      Zongshen (Canada) Environtech Ltd. and has discretionary voting and
      investment authority over securities held by Zongshen (Canada) Environtech
      Ltd.                                                                                                                                                                                                         

The information as to shares beneficially owned or controlled
or directed, directly or indirectly, not being within our knowledge, has been
furnished by the officers and directors.

As at April 25, 2017, there were approximately 86 holders of
record of our shares of common stock.

Transfer Agent

Our shares of common stock are recorded in registered form on
the books of our transfer agent, Computershare Investor Services Inc., located
at 3rd Floor, 510 Burrard Street, Vancouver, British Columbia,
Canada, V6C 3B9.

B.Related Party Transactions

Jerry Kroll

From February 16, 2015 to November 13, 2015, Mr. Jerry Kroll,
our President, CEO and director provided us with a loans in the aggregate amount
of $185,000. These loans were unsecured, non-interest bearing, and due on
demand. No formal written agreements regarding these loans were signed, however,
they are documented in the accounting records of the Company. On January 20,
2016 we repaid $135,000 of these loans and $50,000 was repaid through the
issuance of 125,000 post-subdivision units at a price of $0.40 per unit.

On February 16, 2015, Mr. Kroll acquired 7,000,000 Common
Shares and Ascend Sportmanagement Inc., a corporation under the control and
direction of Mr. Kroll, acquired 10,000,000 Common Shares at a price of $0.0002
per Common Share pursuant to a private placement. In addition, on June 15, 2015,
Mr. Kroll acquired 50,000 units at a price of $0.20 per unit pursuant to a
private placement. Each unit consisted of one Common Share and one common share
purchase warrant. Each warrant is exercisable for one additional Common Share at
a price of $0.40 per Common Share until June 15, 2020. Furthermore, on January
22, 2016, Mr. Kroll acquired 125,000 units at a price of $0.40 per unit pursuant
to a private placement. Each unit consisted of one Common Share and one common
share purchase warrant. Each warrant is exercisable for one additional Common
Share at a price of $1.00 per Common Share until January 22, 2021.

- 73 -

---

On June 11, 2015 we granted 45,000,000 stock options to Mr.
Kroll having an exercise price of $0.15 per Common Share until June 11, 2022. In
addition, on December 9, 2015 we granted 5,000,000 stock options to Mr. Kroll
having an exercise price of $0.40 per Common Share until December 9, 2022.

Henry Reisner

On February 16, 2015, Mr. Henry Reisner acquired 4,750,000
Common Shares at a price of $0.0002 per Common Share pursuant to a private
placement. Mr. Reisners wife and daughter acquired 1,050,000 Common Shares and
250,000 Common Shares, respectively, at a price of $0.0002 per Common Share
pursuant to a private placement.

On July 15, 2015, as amended on September 19, 2016, we entered
into a Joint Operating Agreement with Intermeccanica International Inc. and
Henry Reisner, our Chief Operating Officer, which is comprised of three
underlying agreements, each of which are discussed in more detail below. See
Material Agreements.

On August 13, 2015, we granted 1,250,000 stock options to Mr.
Reisner having an exercise price of $0.15 per Common Share until August 13,
2022. In addition, on December 9, 2015, we granted 1,250,000 stock options to
Mr. Reisner having an exercise price of $0.40 per Common Share until December 9,
2022.

Iain Ball

On August 13, 2015, we granted 500,000 stock option to Mr. Iain
Ball having an exercise price of $0.15 per Common Share until August 13, 2022.
In addition on December 9, 2015, we granted 750,000 stock options to Mr. Ball
having an exercise price of $0.40 per Common Share until December 9, 2022.

On August 19, 2015, Mr. Iain Ball acquired 62,500 units at a
price of $0.40 per unit. Each unit consisted of one Common Share and one common
share purchase warrant. Each warrant is exercisable for one additional Common
Share at a price of $1.00 per Common Share until August 19, 2020.

Ed Theobald

On February 16, 2015, Mr. Ed Theobald acquired 500,000 Common
Shares at a price of $0.0002 per Common Share pursuant to a private placement.

On August 13, 2015, we granted 500,000 stock options to Mr.
Theobald having an exercise price of $0.15 per Common Share until August 13,
2022. In addition on December 9, 2015, we granted 750,000 stock options to Mr.
Theobald having an exercise price of $0.40 per Common Share until December 9,
2022.

Shaun Greffard

On August 13, 2015, we granted 50,000 stock options to Mr.
Shaun Greffard having an exercise price of $0.15 per Common Share until August
13, 2022. In addition on December 9, 2015, we granted 25,000 stock options to
Mr. Greffard having an exercise price of $0.40 per Common Share until December
9, 2022.

- 74 -

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Robert Tarzwell

On June 26, 2015, Mr. Robert Tarzwell acquired 187,500 units
and Robert Tarzwell M.D. Inc., a corporation under the control and direction of
Mr. Tarzwell, acquired 187,500 units at a price of $0.20 per unit. Each unit
consisted of one Common Share and one common share purchase warrant. Each
warrant is exercisable for one additional Common Share at a price of $0.40 per
Common Share until June 26, 2020.

On August 13, 2015, we granted 25,000 stock options to Mr.
Tarzwell having an exercise price of $0.15 per Common Share until August 13,
2022.

Mark West

On December 1, 2015, Mr. Mark West acquired 15,500 units at a
price of $0.40 per unit. Each unit consisted of one Common Share and one common
share purchase warrant. Each warrant is exercisable for one additional Common
Share at a price of $1.00 per Common Share until December 1, 2020.

C.Interests of Experts and Counsel

Not Applicable.

ITEM 8. FINANCIAL INFORMATION

A.Consolidated Statements and Other Financial
Information

Financial Statements

The financial statements of the Company for the year ended
December 31, 2016 and for the period from inception to December 31, 2015 have
been prepared in accordance with IFRS, as issued by the International Accounting
Standards Board, or IASB, and are included under Item 18 of this annual report.
The financial statements including related notes are accompanied by the report
of the Companys independent registered public accounting firm, Dale Matheson
Carr-Hilton Labonte LLP.

Legal Proceedings

As of the date of this Annual Report, in the opinion of our
management, we are not currently a party to any litigation or legal proceedings
which are material, either individually or in the aggregate, and, to our
knowledge, no legal proceedings of a material nature involving us currently are
contemplated by any individuals, entities or governmental authorities.

Dividends

We have not paid any dividends on our common shares since
incorporation. Our management anticipates that we will retain all future
earnings and other cash resources for the future operation and development of
our business. We do not intend to declare or pay any cash dividends in the
foreseeable future. Payment of any future dividends will be at the Boards
discretion, subject to applicable law, after taking into account many factors
including our operating results, financial condition and current and anticipated
cash needs.

- 75 -

---

B.Significant Changes

We have not experienced any significant changes since the date
of the financial statements included with this Form 20-F except as disclosed in
this Form 20-F.

ITEM 9. THE OFFER AND LISTING

A.Offer and Listing

None of our securities are traded on any stock exchange or
stock quotation system in the United States or elsewhere.

B.Plan of Distribution

Not Applicable.

C.Markets

Not Applicable.

D.Selling Shareholders

Not Applicable.

E.Dilution

Not Applicable.

F.Expenses of the Issue

Not Applicable.

ITEM 10. ADDITIONAL INFORMATION

A.Share Capital

Not Applicable.

B.Memorandum and Articles of
Association

Our charter documents consist of our Notice of Articles and our
Articles. Our corporation number, as assigned by the British Columbia Registry
Services, is BC1027632.

Remuneration of Directors

Our directors are entitled to the remuneration, if any, for
acting as directors as the directors may from time to time determine. If the
directors so decide, the remuneration of the directors will be determined by the
shareholders. That remuneration may be in addition to any salary or other
remuneration paid to a director in such directors capacity as an officer or
employee of the Company.

- 76 -

---

Number of Directors

According to Article 11.1 of our Articles, the number of
directors, excluding additional directors appointed under Article 12.7 is set
at:

| | (a) | subject to paragraphs (b) and (c), the number of
      directors that is equal to the number of the Companys first
    directors;                                                                
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                   
| | (b) | if the Company is a public company, the greater of three
      and the number most recently elected by ordinary resolution (whether or
      not previous notice of the resolution was given); and
| |     |                                                                                                                                                                                                   
| | (c) | if the Company is not a public company, the number most
      recently elected by ordinary resolution (whether or not previous notice of
      the resolution was given).                         

Directors

Our directors are elected annually at each annual meeting of
our Companys shareholders. Our Articles provide that the Board of Directors
may, between annual meetings, appoint one or more additional directors to serve
until the next annual meeting, but the number of additional directors must not
at any time exceed:

| | (a) | one-third of the number of first directors, if, at the
      time of the appointments, one or more of the first directors have not yet
      completed their first term of office; or                 
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                       
| | (b) | in any other case, one-third of the number of the current
      directors who were elected or appointed as directors at the expiration of
      the last annual meeting of our Companys
shareholders.

Our Articles provide that our directors may from time to time
on behalf of our Company, without shareholder approval:

| |  | create one or more classes or series of shares or, if
      none of the shares of a class or series of shares are allotted or issued,
      eliminate that class or series of shares;                                                                                                                                    
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                          
| |  | increase, reduce or eliminate the maximum number of
      shares that the Company is authorized to issue out of any class or series
      of shares or establish a maximum number of shares that the Company is
      authorized to issue out of any class or series of shares for which no
      maximum is established;
| |   |                                                                                                                                                                                                                                                                                                                          
| |  | if the Company is authorized to issue shares of a class
      of shares with par value:                                                                                                                                                                                                                                  
| |   |                                                                                                                                                                                                                                                                                                                          
| |   | o                                                                                                                                                                                                                                                                                                                        
| |   |                                                                                                                                                                                                                                                                                                                          
| |   | o                                                                                                                                                                                                                                                                                                                        
| |   |                                                                                                                                                                                                                                                                                                                          
| |   | o                                                                                                                                                                                                                                                                                                                        

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| |   | o                                                                                                                                                                                                                                                      | consolidate all or any of its unissued or fully paid
      issued shares with par value into share of larger par value;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -----------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                        |                                                                                                                        
| |  | subdivide all or any of its unissued or fully paid issued
      shares without par value;                                                                                                                                                             
| |   |                                                                                                                                                                                                                                                        |                                                                                                                        
| |  | change all or any of its unissued or fully paid issued
      shares with par value into shares without par value or all or any of its
      unissued shares without par value into shares with par value;                                             
| |   |                                                                                                                                                                                                                                                        |                                                                                                                        
| |  | alter the identifying name of any of its
shares;                                                                                                                                                                                                      
| |   |                                                                                                                                                                                                                                                        |                                                                                                                        
| |  | consolidate all or any of its unissued or fully paid
      issued shares without par value;                                                                                                                                                           
| |   |                                                                                                                                                                                                                                                        |                                                                                                                        
| |  | otherwise alter it shares or authorized share structure
      when required or permitted to do so by the Business Corporations Act(British Columbia);                                                                                                 
| |   |                                                                                                                                                                                                                                                        |                                                                                                                        
| |  | borrow money in the manner and amount, on the security,
      from the sources and on the terms and conditions that they consider
      appropriate;                                                                                                  
| |   |                                                                                                                                                                                                                                                        |                                                                                                                        
| |  | issue bonds, debentures and other debt obligations either
      outright or as security for any liability or obligation of the Company or
      any other person, and at any discount or premium and on such terms as they
      consider appropriate;
| |   |                                                                                                                                                                                                                                                        |                                                                                                                        
| |  | guarantee the repayment of money by any other person or
      the performance of any obligation of any other person; or                                                                                                                               
| |   |                                                                                                                                                                                                                                                        |                                                                                                                        
| |  | mortgage or charge, whether by way of specific or
      floating charge, or give other security on the whole or any part of the
      present and future assets and undertaking of the
Company.                                                       

Our Articles also provide that, the Company may by resolution
of the directors authorize an alteration to its Notice of Articles in order to
change its name or adopt or change any translation of that name.

Our Articles provide that the directors may meet together for
the conduct of business, adjourn and otherwise regulate their meetings as they
think fit, and meetings of the board held at regular intervals may be held at
the place and at the time that the board may by resolution from time to time
determine. Questions arising at any meeting of directors are to be decided by a
majority of votes and, in the case of an equality of votes, the chair of the
meeting does not have a second or casting vote. A director may participate in a
meeting of the directors or of any committee of the directors in person, or by
telephone or other communications medium, if all directors participating in the
meeting are able to communicate with each other. A director may participate in a
meeting of the directors or of any committee of the directors by a
communications medium other than telephone if all directors participating in the
meeting, whether in person or by telephone or other communications medium, are
able to communicate with each other and if all directors who wish to participate
in the meeting agree to such participation. A director who participates in a
meeting in a manner contemplated by such provisions of our Articles is deemed
for all purposes of the Business Corporations Act (British Columbia) and
our Articles to be present at the meeting and to have agreed to participate in
that manner.

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Our Articles provide that the quorum necessary for the
transaction of the business of the directors may be set by the directors and, if
not so set, is a majority of the directors.

Our Articles do not restrict: (i) a directors power to vote on
a proposal, arrangement or contract in which the director is materially
interested (although the Business Corporations Act (British Columbia)
generally requires a director who is materially interested in a material
contract or material transaction to disclose his or her interest to the Board,
and to abstain from voting on any resolution to approve the contract or
transaction, failing which the British Columbia Supreme Court may, on
application of our Company or any of our shareholders, set aside the material
contract or material transaction on any terms that it thinks fit, or require the
director to account to the Company for any profit or gain realized on it, or
both); or (ii) our directors power, in the absence of an independent quorum, to
vote compensation to themselves or any members of their body.

Our Articles do not set out a mandatory retirement age for our
directors. Our directors are not required to own securities of our Company in
order to serve as directors.

Authorized Capital

Our Notice of Articles provide that our authorized capital
consists of an unlimited number of common shares, without par value, and an
unlimited number of preferred shares, without par value, which have special
rights or restrictions.

Rights, Preferences and Restrictions Attaching to Our Shares

The Business Corporations Act (British Columbia)
provides the following rights, privileges, restrictions and conditions attaching
to our common shares:

- to vote at meetings of shareholders, except meetings at which only holders
  of a specified class of shares are entitled to vote;
- subject to the rights, privileges, restrictions and conditions attaching to
  any other class of shares of our Company, to share equally in the remaining
  property of our Company on liquidation, dissolution or winding-up of our
  Company; and
- subject to the rights of the preferred shares, the common shares are
  entitled to receive dividends if, as, and when declared by the Board of
  Directors.

Our preferred shares may include one or more series and,
subject to the Business Corporations Act (British Columbia), the
directors may, by resolution, if none of the shares of that particular series
are issued, alter the Articles of the Company and authorize the alteration of
the Notice of Articles of the Company, as the case may be, to do one or more of
the following:

| | (a) | determine the maximum number of shares of that series
      that the Company is authorized to issue, determine that there is no such
      maximum number, or alter any such determination;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                            
| | (b) | create an identifying name for the shares of that series,
      or alter any such identifying name; and                                                                                    

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| | (c) | attach special rights or restrictions to the shares of
      that series, or alter any such special rights or
  restrictions.
| | --- | -----------------------------------------------------------------------------------------------------------------------------

The provisions in our Articles attaching to our common shares
and our preferred shares may be altered, amended, repealed, suspended or changed
by the affirmative vote of the holders of not less than two-thirds of the
outstanding common shares and two-thirds of the preferred shares, as applicable.

With the exception of special resolutions (i.e. resolutions in
respect of fundamental changes to our company, including: the sale of all or
substantially all of our assets, a merger or other arrangement or an alteration
to our authorized capital that is not allowed by resolution of the directors)
that require the approval of holders of two-thirds of the outstanding common
shares entitled to vote at a meeting, either in person or by proxy, resolutions
to approve matters brought before a meeting of our shareholders require approval
by a simple majority of the votes cast by shareholders entitled to vote at a
meeting, either in person or by proxy.

Shareholder Meetings

The Business Corporations Act (British Columbia)
provides that: (i) a general meetings of shareholders must be held in British
Columbia, or may be held at a location outside British Columbia since our
Articles do not restrict our Company from approving a location outside of
British Columbia for the holding of the general meeting and the location for the
meeting is approved by ordinary resolution, or the location for the meeting is
approving in writing by the British Columbia Registrar of Companies before the
meeting is held; (ii) directors must call an annual meeting of shareholders not
later than 15 months after the last preceding annual meeting; (iii) for the
purpose of determining shareholders entitled to receive notice of or vote at
meetings of shareholders, the directors may fix in advance a date as the record
date for that determination, provided that such date shall not precede by more
than two months or by less than 21 days the date on which the meeting is to be
held; (iv) the holders of not less than 5% of the issued shares entitled to vote
at a meeting may requisition the directors to call a meeting of shareholders for
the purposes stated in the requisition; (v) only shareholders entitled to vote
at the meeting, our directors and our auditor are entitled to be present at a
meeting of shareholders; and (vi) upon the application of a director or
shareholder entitled to vote at the meeting, the British Columbia Supreme Court
may order a meeting to be called, held and conducted in a manner that the Court
directs.

Pursuant to Article 8.20 of our Articles, a shareholder or
proxy holder who is entitled to participate in a meeting of shareholders may do
so in person, or by telephone or other communications medium, if all
shareholders and proxy holders participating in the meeting are able to
communicate with each other; provided, however, that nothing in Article 8.20 of
our Articles shall obligate the Company to take any action or provide any
facility to permit or facilitate the use of any communications medium at a
meeting of shareholders. If one or more shareholders or proxy holders
participate in a meeting of shareholders in a matter contemplated by Article
8.20 of our Articles:

| | (a) | each such shareholder or proxy holder shall be deemed to
      be present at the meeting; and       
| | --- | ----------------------------------------------------------------------------------------------------
| |     |                                                                                                     
| | (b) | the meeting shall be deemed to be help at the location
      specified in the notice of the meeting.

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Pursuant to our Articles, the quorum for the transaction of
business at a meeting of our shareholders is one or more persons, present in
person or by proxy.

C.Material Contracts

The following summary of our material agreements, all of which
have been previously filed with the SEC, does not purport to be complete and is
subject to, and is qualified in its entirety by reference to, all the provisions
of those agreements. There are no material contracts, other than those contracts
entered into in the ordinary course of business, currently in place or to which
we or any member of our group is a party, from the two years immediately
preceding the publication of this annual report, except as follows:

Joint Operating Agreement

On July 15, 2015, we entered into a Joint Operating Agreement
among Intermeccanica International Inc. (Intermeccanica) and Henry Reisner,
which has been amended by an Amending Agreement to Joint Operating Agreement on
September 19, 2016, whereby the Joint Operating Agreement is comprised of three
underlying agreements, a lease agreement, a product assembly agreement and a
buy-out agreement, each of which are discussed in more detail below. The Joint
Operating Agreement will automatically terminate upon the completion of the
purchase and sale of the issued and outstanding Intermeccanica shares pursuant
to the Call Option (as defined below in the Buy-Out Agreement). Otherwise, this
Joint Operating Agreement may only be terminated by written agreement of us and
Intermeccanica, unless otherwise provided for. Upon termination, we will be
liable for the costs associated with the completion of any Assembled Products in
process, along with costs and expenses incurred, accrued or paid by
Intermeccanica in connection with the production of such Assembled Products up
to and including the date of termination. Promptly after termination, other than
pursuant to the Call Option, the parties shall take all commercially reasonable
actions necessary to wind up the activities of the joint operation

Lease Agreement

Intermeccanica intends to enter into a lease agreement with
Cressey (Quebec Street) Development LLP (the Landlord) in order to lease the
premises referred to as the Leased Premises located at 102 East 1st
Avenue, Vancouver, British Columbia, Canada, V5T 1A4, and sublease half of the
floor area to our Company. However, on July 15, 2015, Intermeccanica and our
Company have jointly leased the Leased Premises. The term of the lease will be
60 months commencing November 1, 2015. We will pay half of the lease costs,
including fees, taxes, and other charges associated with occupancy, to a maximum
amount of $4,000 per month or $48,000 per year, paid in equal monthly
installments. We will provide additional payment for any additional expenses
incurred by Intermeccanica and us pursuant to the lease. Beginning August 1,
2015, we will also pay 25% of the costs associated with Intermeccanicas
existing lease at 39 Braid Street, New Westminster, British Columbia, Canada. We
will also advance $10,000 (and whatever else is reasonably agreed upon mutually)
to Intermeccanica prior to occupancy, which will be used for improvement costs.
We are not able to sublease the premises.

Product Assembly Agreement

Intermeccanica will be the sole assembler of all Assembled
Products (assembled and produced electric vehicles and automotive-related
products), and wont assemble products for any competitor of our Company. Intermeccanica will have five
business days from the delivery of each purchase order for Assembled Products to
accept or reject, and in the case of rejection we will be able to get the
Assembled Products assembled by someone else. This must be completed in the time
frame specified by any purchase orders. The Assembled Products will be assembled
on a cost-plus basis, with a margin to be established at the time of production
upon the mutual agreement of the parties, acting reasonably (plus all applicable
taxes). Payment for the total cost of production of an Assembled Product will be
due 30 days after an invoice is sent, regardless of the final sale of any
Assembled Product to a consumer.

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We may terminate this Product Assembly Agreement with 90 days
prior written notice to Intermeccanica, in which case we will pay to
Intermeccanica $1,000 for every production vehicle sold by Electrameccanica, or
its subsidiaries, if any, during the 18 months immediately following the
termination, up to a maximum amount of $500,000, which shall be paid on a
monthly basis. Intermeccanica is also able to terminate this Product Assembly
Agreement with 90 days prior written notice, in which case Intermeccanica will
deliver to us any Assembled Products in progress at the time, along with any
product design materials associated with any Assembled Products.

Buy-Out Agreement (merger)

Provided that the filing of this registration statement on Form
F-1 with the SEC is effective and our shares of common stock are posted for
trading on the OTCQB market operated by the OTC Markets Group Inc. (the Public
Listing), at any time during the two year period immediately following the
completion by us of the Public Listing (the Call Option Period), we shall have
the right to purchase all (but not less than all) of Intermeccanicas issued and
outstanding shares (the Call Option) from the holders of such shares (the
Vendors). However, the Call Option is subject to the payment of $100,000 by us
to Intermeccanica if we have not exercised the Call Option within 12 months of
the commencement of the Call Option Period, and the payment of another $100,000
by us to Intermeccanica if we have not exercised the Call Option within 24
months of the commencement of the Call Option Period, which, together with all
prior payments to Intermeccanica, will be considered the then payment by us of
liquidated damages to Intermeccanica for our failure to exercise our Call Option
during the Call Option Period. For clarity, the Call Option Period terminates
after 24 months from the date our shares of common stock are first traded on the
OTCQB. The Call Option may be exercised by us by delivering a written notice to
the other parties within the Call Option Period. The parties acknowledge that
the Call Option shall operate as an option only and that nothing shall require
or entitle us to exercise or compel the exercise of the Call Option. The
exercise of the Call Option shall be irrevocable once made.

The purchase price will be the greater of $5,000,000 and the
sum of (i) the book value of Intermeccanicas assets, which will be determined
by an independent chartered business valuator if the parties are unable to
agreement upon the book value; and (ii) the weighted dollar value average
closing price of our shares of common stock for the 20 trading days immediately
preceding the date the Call Option was exercised (the Exercise Date)
multiplied by the number of our issued and outstanding shares of common stock,
including outstanding vested stock options, as at the Exercise Date (the Total
Equity Value) determined in accordance with the following: (A) 20% of the first
$10,000,000 in Total Equity Value; plus (B) 10% of the Total Equity Value
between $10,000,000.01 and $30,000,000; plus (C) 5% of the Total Equity Value in
excess of $30,000,000. The purchase price will be paid on the first business day
at least 30 days following the final determination of the book value of
Intermeccanicas assets in exchange for the shares of Intermeccanica being
transferred and registered to our Company. The parties have agreed that the purchase price shall be reduced by the value of
the certain 600,000 shares of our common stock originally issued on February 16,
2015 for the benefit of Mr. Reisner and/or his nominees (the Founder Shares),
which Founder Shares now represent 3,000,000 shares of our common stock as a
result of a forward stock split effective June 22, 2016, based on the weighted
dollar value average trading price of the our common shares for the 20 trading
days immediately preceding the Exercise Date (the Purchase Price Reduction).
The purchase price less the Purchase Price Reduction (the Remaining Purchase
Price) shall be paid by us or our designee, as applicable, on the closing date
by way of issuance to the Vendors of shares of our common stock (the
Consideration Shares) with an ascribed value in the amount of the Remaining
Purchase Price, provided that, at the election of Mr. Reisner to be made in
written notice to us at least 15 days prior to the closing date, the Vendors
shall be entitled to receive a minimum of $500,000 in the aggregate and a
maximum of 50% of the Remaining Purchase Price in the aggregate, in cash
(provided that the cash consideration shall not exceed 20% of our free cash on
hand). For greater clarity, if the Remaining Purchase Price is any amount less
than $500,000, the Remaining Purchase Price shall be $500,000. We will not be
responsible for any debts, liabilities, or obligations of Intermeccanica or
Intermeccanicas business, as Mr. Reisner will be solely responsible for any
such debts, liabilities, or obligations and Mr. Reisner has agreed to indemnify
and hold harmless our Company, Intermeccanica and any affiliates of either our
Company or Intermeccanica from and against all losses in connection with any
debts, liabilities or obligations (including warranties of any kind) of
Intermeccanica or its business existing at the closing date. The Buy-Out
Agreement is subject to customary conditions to closing.

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Prior to forming the Company Mr. Kroll required the invaluable
assistance and over 50+ years of expertise of long time automotive expert, Mr.
Reisner (Intermeccanica), and Intermeccanicas vast experience in automotive
craftsmanship, in order to be in position to fully develop and to create the
Companys first SOLO prototype. Without any compensation being provided to
Intermeccanica for such assistance and expertise, Intermeccanica also agreed to
enter into the JOA which, in part, and critically, during the early stages of
the Companys development, provided the Company with much needed premises,
production assembly and an option to acquire Intermeccanica which the Company
could in no manner afford at inception. Under the JOA Intermeccanica also
contracted with the Company to assist with the development of the present and
future vehicles, and also to provide production and delivery capabilities in
conjunction with the Companys production capabilities once developed
(collectively, the Inherent Intermeccanica Goodwill). Notwithstanding the real
value which was being created within the Company since inception owing to the
fact that the Company was being allowed to fully utilize and exploit all
Inherehent Intermeccancia Goodwill without paying for it, the parties agreed to
structure the Companys future ability to acquire Intermeccania, and the formula
for the Call Option, based on the Companys market (equity) value at the time;
understanding that, from the parties perspectives, Intermeccanica, if acquired,
should be entitled to share in the increase in the market value of the Company
as though it were being acquired for its Inherent Intermeccanica Goodwill at
inception  something that the Company could have never afforded at the time.

In addition, and through the issuance of the Founders Shares to
Mr. Reisner, in subsequently amending the JOA, the parties agreed that the fair
market value of the Founders Shares at the exercise of the Call Option should be
deducted from the Call Option purchase price  clearly evidencing that
Intermeccanica, through Mr. Reisners founders stock position, had already and
partially been compensated for the Inherent Intermeccanica Goodwill being
acquired.

Accordingly, the Call Option formula was arrived at, in light of the
  above, and with certain equity percentage limitations; including the Amendment
  Agreement to the JOA which recognized that the fair market value of the Founders
  Shares should be deducted from the final purchase price at the time  evidencing that Intermeccanica, through the Founder
Shares, had already partially been compensated for the Inherent Intermeccanica
Goodwill being acquired, and that Intermeccanica should be entitled to share in
the increase in the market value of the Company as though it were being acquired
for its Inherent Intermeccanica Goodwill at inception.

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The foregoing description of the Joint Operating Agreement, as
amended, does not purport to be complete and is qualified in its entirety by the
Joint Operating Agreement and the Amendment Agreement to Joint Operating
Agreement, which are filed as Exhibits 10.1 and 10.2, respectively, hereto and
are incorporated by reference herein. However, all of the material terms of the
Joint Operating Agreement and the Amendment Agreement to Joint Operating
Agreement have been disclosed.

D.Exchange Controls

We are incorporated pursuant to the laws of the Province of
British Columbia, Canada. There is no law or governmental decree or regulation
in Canada that restricts the export or import of capital, or affects the
remittance of dividends, interest or other payments to a non-resident holder of
common shares, other than withholding tax requirements. Any such remittances to
United States residents are generally subject to withholding tax, however no
such remittances are likely in the foreseeable future. See Certain Canadian
Federal Income Tax Information For United States Residents, below.

There is no limitation imposed by Canadian law or by the
charter or other constituent documents of our Company on the right of a
non-resident to hold or vote common shares of our Company. However, the
Investment Canada Act (Canada) (the Investment Act) has rules regarding
certain acquisitions of shares by non-residents, along with other requirements
under that legislation.

The following discussion summarizes the principal features of
the Investment Act for a nonresident who proposes to acquire common shares of
our Company. The discussion is general only; it is not a substitute for
independent legal advice from an investors own advisor; and it does not
anticipate statutory or regulatory amendments.

The Investment Act is a federal statute of broad application
regulating the establishment and acquisition of Canadian businesses by
non-Canadians, including individuals, governments or agencies thereof,
corporations, partnerships, trusts or joint ventures (each an entity).
Investments by non-Canadians to acquire control over existing Canadian
businesses or to establish new ones are either reviewable or notifiable under
the Investment Act. If an investment by a non-Canadian to acquire control over
an existing Canadian business is reviewable under the Investment Act, the
Investment Act generally prohibits implementation of the investment unless,
after review, the Minister of Industry, is satisfied that the investment is
likely to be of net benefit to Canada.

A non-Canadian would acquire control of our Company for the
purposes of the Investment Act through the acquisition of common shares if the
non-Canadian acquired a majority of the common shares of our Company.

Further, the acquisition of less than a majority but one-third
or more of the common shares of our Company would be presumed to be an
acquisition of control of our Company unless it could be established that, on
the acquisition, our Company was not controlled in fact by the acquirer through
the ownership of common shares.

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For a direct acquisition that would result in an acquisition of
control of our Company, subject to the exception for WTO-investors that are
controlled by persons who are resident in World Trade Organization (WTO)
member nations, a proposed investment would be reviewable where the value of the
acquired assets is CAD $5 million or more, or if an order for review was made by
the federal cabinet on the grounds that the investment related to Canadas
cultural heritage or national identity, where the value of the acquired assets
is less than CAD $5 million.

For a proposed indirect acquisition that is not a
  so-called WTO transaction and that would result in an acquisition of control of
  our Company through the acquisition of a non-Canadian parent entity, the
  investment would be reviewable where (a) the value of the Canadian assets
  acquired in the transaction is CAD $50 million or more, or (b) the value of the
  Canadian assets is greater than 50% of the value of all of the assets acquired
  in the transaction and the value of the Canadian assets is CAD $5 million or
  more.

In the case of a direct acquisition by or from a WTO
investor, the threshold is significantly higher. The 2016 threshold is CAD$600
million, which threshold will be increased to CAD$800 million in April 2017 for
a two year period. Other than the exception noted below, an indirect acquisition
involving a WTO investor is not reviewable under the Investment Act.

The higher WTO threshold for direct investments and the
exemption for indirect investments do not apply where the relevant Canadian
business is carrying on a cultural business. The acquisition of a Canadian
business that is a cultural business is subject to lower review thresholds
under the Investment Act because of the perceived sensitivity of the cultural
sector.

In 2009, amendments were enacted to the Investment Act
concerning investments that may be considered injurious to national security. If
the Industry Minister has reasonable grounds to believe that an investment by a
non-Canadian could be injurious to national security, the Industry Minister
may send the non-Canadian a notice indicating that an order for review of the
investment may be made. The review of an investment on the grounds of national
security may occur whether or not an investment is otherwise subject to review
on the basis of net benefit to Canada or otherwise subject to notification under
the Investment Canada Act. To date, there is neither legislation nor guidelines
published, or anticipated to be published, on the meaning of injurious to
national security. Discussions with government officials suggest that very few
investment proposals will cause a review under these new sections.

Certain transactions, except those to which the national
security provisions of the Investment Act may apply, relating to common shares
of our Company are exempt from the Investment Act, including:

| | (a) | acquisition of common shares of the Company by a person
      in the ordinary course of that persons business as a trader or dealer in
      securities,                                                                                                                            
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                      
| | (b) | acquisition of control of our Company in connection with
      the realization of security granted for a loan or other financial
      assistance and not for a purpose related to the provisions on the
      Investment Act, and                                                   
| |     |                                                                                                                                                                                                                                                                                      
| | (c) | acquisition of control of our Company by reason of an
      amalgamation, merger, consolidation or corporate reorganization following
      which the ultimate direct or indirect control in fact of our Company,
      through the ownership of common shares, remained
  unchanged.

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E.Taxation

CANADIANFEDERALINCOMETAXCONSIDERATIONS FORUNITEDSTATESRESIDENTS

The following is a summary of the principal Canadian federal
income tax considerations generally applicable to the holding and disposition of
our common shares acquired by a holder who, at all relevant times, (a) for the
purposes of the Income Tax Act (Canada) (the Tax Act), (i) is not
resident, or deemed to be resident, in Canada, (ii) deals at arms length with
us, and is not affiliated with us, (iii) holds our common shares as capital
property, (iv) does not use or hold the common shares in the course of carrying
on, or otherwise in connection with, a business carried on or deemed to be
carried on in Canada and (v) is not a registered non-resident insurer or
authorized foreign bank (each as defined in the Tax Act), and (b) for the
purposes of the Canada-U.S. Tax Convention, is a resident of the United States,
has never been a resident of Canada, does not have and has not had, at any time,
a permanent establishment or fixed base in Canada, for purposes of the Tax Act,
and who otherwise qualifies for the full benefits of the Canada-U.S. Tax
Convention. The common shares will generally be considered to be capital
property to a holder unless such common shares are held in the course of
carrying on a business of buying or selling securities, or as part of an
adventure or concern in the nature of trade. Holders who meet all the criteria
in clauses (a) and (b) are referred to herein as Non-Canadian Holders.

This summary does not deal with special situations, such as the
particular circumstances of traders or dealers, tax exempt entities, insurers or
financial institutions. Such holders and other holders who do not meet the
criteria in clauses (a) and (b) should consult their own tax advisers.

This
  summary is based upon the current provisions of the Tax Act, the regulations
  thereunder in force at the date hereof (Regulations), the current provisions
  of the Canada-U.S. Tax Convention and our understanding of the administrative
  and assessing practices of the Canada Revenue Agency published in writing prior
  to the date hereof. This summary takes into account all specific proposals to
  amend the Tax Act and Regulations publicly announced by or on behalf of the
  Minister of Finance (Canada) prior to the date hereof (the Proposed
  Amendments)and assumes that such Proposed Amendments will be enacted in the
  form proposed. However, no assurance can be given that such Proposed Amendments
  will be enacted in the form proposed, or at all. This summary does not otherwise
  take into account or anticipate any changes in law or administrative or
  assessing practices, whether by legislative, governmental or judicial decision
  or action, nor does it take into account tax laws of any province or territory
  of Canada or of any other jurisdiction outside Canada, which may differ from
  those discussed in this summary. For the purposes of the Tax Act, all amounts
  relating to the acquisition, holding or disposition of our common shares must
  generally be expressed in Canadian dollars. Amounts denominated in United States
  currency generally must be converted into Canadian dollars using the rate of
  exchange that is acceptable to the Canada Revenue Agency.

This summary is of a general nature only and is not intended to
be, nor should it be construed to be, legal or tax advice to any particular
Non-Canadian Holder and no representation with respect to the Canadian federal
income tax consequences to any particular Non-Canadian Holder or prospective
Non-Canadian Holder is made. This summary is not exhaustive of all Canadian
federal income tax considerations. Accordingly, prospective purchasers should
consult with their own tax advisors for advice with respect to their own
particular circumstances.

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Withholding Tax on Dividends

Amounts paid or credited or deemed to be paid or credited as,
on account or in lieu of payment, or in satisfaction of, dividends on our common
shares to a Non Canadian Holder will be subject to Canadian withholding tax.
Under the Canada-U.S. Tax Convention, the rate of Canadian withholding tax on
dividends paid or credited by us to a Non-Canadian Holder that beneficially owns
such dividends is generally 15% unless the beneficial owner is a company, which
owns at least 10% of our voting stock at that time, in which case the rate of
Canadian withholding tax is reduced to 5%.

Dispositions

A Non-Canadian Holder will not be subject to tax under the Tax
Act on any capital gain realized on a disposition or deemed disposition of a
common share, unless the common shares are taxable Canadian property to the
Non-Canadian Holder for purposes of the Tax Act and the Non-Canadian Holder is
not entitled to relief under an applicable income tax convention between Canada
and the country in which the Non-Canadian Holder is resident.

Generally, the common shares will not constitute taxable
Canadian property to a Non-Canadian Holder at a particular time unless at any
time during the 60 month period immediately preceding the disposition, more than
50% of the fair market value of the common shares was derived, directly or
indirectly, from one or any combination of: (i) real or immoveable property
situated in Canada, (ii) Canadian resource properties (as defined in the Tax
Act), (iii) timber resource properties (as defined in the Tax Act), and (iv)
options in respect of, or interests in, or for civil law rights in, property in
any of the foregoing whether or not the property exists. Notwithstanding the
foregoing, in certain circumstances set out in the Tax Act, common shares could
be deemed to be taxable Canadian property. Non-Canadian Holders whose common
shares may constitute taxable Canadian property should consult their own tax
advisors.

Under the Canada-U.S. Tax Convention, the gains derived by a
Non-Canadian Holder from the disposition of common shares would generally not be
taxable in Canada unless the value of the common shares is derived principally
from real property situated in Canada. The Company believes that the value of
its common shares are not currently derived principally from real property
situated in Canada and it does not expect this to change in the foreseeable
future.

CERTAINMATERIALUNITEDSTATESFEDERALINCOMETAXCONSIDERATIONS

The following is a general summary of certain material U.S.
federal income tax considerations applicable to a U.S. Holder (as defined below)
arising from the acquisition, ownership and disposition of our common stock.
This summary applies only to U.S. Holders that acquire our common stock from a
Selling Securityholder pursuant to this prospectus and does not apply to any
subsequent U.S. Holder of our common stock.

This summary is for general information purposes only and does
not purport to be a complete analysis or listing of all potential U.S. federal
income tax considerations that may apply to a U.S. Holder as a result of the
acquisition, ownership and disposition of our common stock. In addition, this
summary does not take into account the individual facts and circumstances of any
particular U.S. Holder that may affect the U.S. federal income tax consequences
to such U.S. Holder, including specific tax consequences to a U.S. Holder under
an applicable tax treaty. Accordingly, this summary is not intended to be, and
should not be construed as, legal or U.S. federal income tax advice with respect
to any particular U.S. Holder. In addition, this summary does not address the U.S. federal alternative minimum, U.S.
federal estate and gift, U.S. Medicare contribution, U.S. state and local, or
non-U.S. tax consequences of the acquisition, ownership or disposition of our
common stock. Except as specifically set forth below, this summary does not
discuss applicable tax reporting requirements. Each U.S. Holder should
consult its own tax advisor regarding all U.S. federal, U.S. state and local and
non-U.S. tax consequences of the acquisition, ownership and disposition of our
common stock.

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No opinion from U.S. legal counsel or ruling from the Internal
Revenue Service (the IRS) has been requested, or will be obtained, regarding
the U.S. federal income tax consequences of the acquisition, ownership or
disposition of our common stock. This summary is not binding on the IRS, and the
IRS is not precluded from taking a position that is different from, or contrary
to, any position taken in this summary. In addition, because the authorities
upon whom this summary is based are subject to various interpretations, the IRS
and the U.S. courts could disagree with one or more of the positions taken in
this summary.

Scope of This Disclosure

Authorities

This summary is based on the Internal Revenue Code of 1986, as
amended (the Code), Treasury Regulations (whether final, temporary, or
proposed), published rulings of the IRS, published administrative positions of
the IRS, the Convention Between Canada and the United States of America with
Respect to Taxes on Income and on Capital, signed September 26, 1980, as amended
(the Canada-U.S. Tax Convention), and U.S. court decisions that are applicable
and, in each case, as in effect and available, as of the date hereof. Any of the
authorities on which this summary is based could be changed in a material and
adverse manner at any time, and any such change could be applied on a
retroactive or prospective basis, which could affect the U.S. federal income tax
considerations described in this summary. This summary does not discuss the
potential effects, whether adverse or beneficial, of any proposed legislation
that, if enacted, could be applied on a retroactive or prospective basis.

U.S. Holders

For purposes of this summary, the term U.S. Holder means a
beneficial owner of our common stock that is for U.S. federal income tax
purposes:

- an individual who is a citizen or resident of the U.S.;
- a corporation (or other entity taxable as a corporation for U.S. federal
  income tax purposes) created or organized in or under the laws of the U.S.,
  any state thereof or the District of Columbia;
- an estate, the income of which is subject to U.S. federal income taxation
  regardless of its source; or
- a trust that (a) is subject to the primary supervision of a court within
  the U.S. and the control of one or more U.S. persons for all substantial
  decisions or (b) has a valid election in effect under applicable Treasury
  Regulations to be treated as a U.S. person.

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Transactions Not Addressed

This summary does not address the tax consequences of
transactions effected prior or subsequent to, or concurrently with, any purchase
of our common stock pursuant to this prospectus (whether or not any such
transactions are undertaken in connection with the purchase of our common stock
pursuant to this prospectus).

U.S. Holders Subject to Special U.S. Federal Income Tax
Rules Not Addressed

This summary does not address the U.S. federal income tax
considerations of the acquisition, ownership or disposition of our common stock
by U.S. Holders that are subject to special provisions under the Code,
including, but not limited to, the following: (a) tax-exempt organizations,
qualified retirement plans, individual retirement accounts, or other
tax-deferred accounts; (b) financial institutions, underwriters, insurance
companies, real estate investment trusts, or regulated investment companies; (c)
broker-dealers, dealers, or traders in securities or currencies that elect to
apply a mark-to-market accounting method; (d) U.S. Holders that have a
functional currency other than the U.S. dollar; (e) U.S. Holders that own our
common stock as part of a straddle, hedging transaction, conversion transaction,
constructive sale, or other arrangement involving more than one position; (f)
U.S. Holders that acquire our common stock in connection with the exercise of
employee stock options or otherwise as compensation for services; (g) U.S.
Holders that hold our common stock other than as a capital asset within the
meaning of Section 1221 of the Code (generally, property held for investment
purposes); and (h) U.S. Holders that own directly, indirectly, or by
attribution, 10% or more, by voting power, of the outstanding stock of the
Company. This summary also does not address the U.S. federal income tax
considerations applicable to U.S. Holders who are: (a) U.S. expatriates or
former long-term residents of the U.S.; (b) persons that have been, are, or will
be a resident or deemed to be a resident in Canada for purposes of the Income
Tax Act (Canada); (c) persons that use or hold, will use or hold, or that are or
will be deemed to use or hold our common stock in connection with carrying on a
business in Canada; (d) persons whose common stock in our Company constitutes
taxable Canadian property under the Income Tax Act (Canada); or (e) persons
that have a permanent establishment in Canada for purposes of the Canada-U.S.
Tax Convention. U.S. Holders that are subject to special provisions under the
Code, including U.S. Holders described immediately above, should consult their
own tax advisors regarding all U.S. federal, U.S. state and local, and non-U.S.
tax consequences (including the potential application and operation of any
income tax treaties) relating to the acquisition, ownership or disposition of
our common stock.

If an entity or arrangement that is classified as a partnership
(or other pass-through entity) for U.S. federal income tax purposes holds our
common stock, the U.S. federal income tax consequences to such partnership and
the partners (or other owners) of such partnership of the acquisition, ownership
or disposition of our common stock generally will depend on the activities of
the partnership and the status of such partners (or other owners). This summary
does not address the U.S. federal income tax considerations for any such partner
or partnership (or other pass-through entity or its owners). Owners of
entities and arrangements that are classified as partnerships (or other
pass-through entities) for U.S. federal income tax purposes should consult
their own tax advisors regarding the U.S. federal income tax consequences of the
acquisition, ownership or disposition of our common stock.

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Acquisition of Our Common Stock

A U.S. Holder generally will not recognize gain or loss upon
the acquisition of our common stock from a Selling Securityholder for cash
pursuant to this prospectus. A U.S. Holders initial tax basis in our common
stock acquired pursuant to this prospectus will be equal to the U.S. Holders
U.S. dollar cost for the common stock. A U.S. Holders holding period for such
common stock will begin on the day after the acquisition.

Ownership and Disposition of Our Common Stock

Distributions on Our Common Stock

Subject to the passive foreign investment company (PFIC)
rules discussed below (see Tax Consequences if the Company is a PFIC), a U.S.
Holder that receives a distribution, including a constructive distribution, with
respect to our common stock will be required to include the amount of such
distribution in gross income as a dividend (without reduction for any Canadian
income tax withheld from such distribution) to the extent of the current or
accumulated earnings and profits of the Company, as computed for U.S. federal
income tax purposes. To the extent that a distribution exceeds the current and
accumulated earnings and profits of the Company, such distribution will be
treated first as a tax-free return of capital to the extent of a U.S. Holders
tax basis in our common stock and thereafter as gain from the sale or exchange
of such common stock (see Sale or Other Taxable Disposition of Our Common
Stock below). However, the Company may not maintain calculations of earnings
and profits in accordance with U.S. federal income tax principles, and each U.S.
Holder should therefore assume that any distribution by the Company with respect
to our common stock will constitute a dividend. Dividends received on our common
stock generally will not be eligible for the dividends received deduction
available to U.S. corporate shareholders receiving dividends from U.S.
corporations. If the Company is eligible for the benefits of the Canada-U.S. Tax
Convention or our common stock is readily tradable on an established securities
market in the U.S., dividends paid by the Company to non-corporate U.S. Holders
generally will be eligible for the preferential tax rates applicable to
long-term capital gains, provided certain holding period and other conditions
are satisfied, including that the Company not be classified as a PFIC in the tax
year of distribution or in the preceding tax year. The dividend rules are
complex, and each U.S. Holder should consult its own tax advisor regarding the
application of such rules.

Sale or Other Taxable Disposition of Our Common Stock

Subject to the PFIC rules discussed below, upon the sale or
other taxable disposition of our common stock, a U.S. Holder generally will
recognize capital gain or loss in an amount equal to the difference between the
amount of cash plus the fair market value of any property received and such U.S.
Holders tax basis in the common stock sold or otherwise disposed of. Such
capital gain or loss will be long-term capital gain or loss if, at the time of
the sale or other taxable disposition, the U.S. Holders holding period for our
common stock is more than one year. Preferential tax rates apply to long-term
capital gains of non-corporate U.S. Holders. There are currently no preferential
tax rates for long-term capital gains of a U.S. Holder that is a corporation.
Deductions for capital losses are subject to significant limitations under the
Code.

PFIC Status of the Company

If the Company is or becomes a PFIC, the preceding sections of
this summary may not describe the U.S. federal income tax consequences to U.S.
Holders of the ownership and disposition of our common stock. The U.S. federal income tax consequences of
owning and disposing of our common stock if the Company is or becomes a PFIC are
described below under the heading Tax Consequences if the Company is a PFIC.

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A
  non-U.S. corporation is a PFIC for each tax year in which (i) 75% or more of its
  gross income is passive income (as defined for U.S. federal income tax purposes)
  (the income test) or (ii) on average for such tax year, 50% or more (by value)
  of its assets either produces or is held for the production of passive income
  (the asset test). For purposes of the PFIC provisions, gross income
  generally includes sales revenues less cost of goods sold, plus income from
  investments and from incidental or outside operations or sources, and passive
  income generally includes dividends, interest, certain rents and royalties, and
  certain gains from commodities or securities transactions. In determining
  whether or not it is a PFIC, a non-U.S. corporation is required to take into
  account its pro rata portion of the income and assets of each corporation in
  which it owns, directly or indirectly, at least a 25% interest (by value). If
  certain conditions are met, a start-up non-U.S. corporation is not a PFIC in the
  first year that it has gross income, but could be a PFIC in one or more earlier
  years in which it has no gross income but satisfies the asset test.

Under
  certain attribution and indirect ownership rules, if the Company is a PFIC, U.S.
  Holders will generally be deemed to own their proportionate shares of the
  Companys direct or indirect equity interest in any company that is also a PFIC
  (a Subsidiary PFIC). At this time, however, the Company does not own any
  direct or indirect equity interests in another company.

The Company does not know if it currently is a PFIC or was a
PFIC in a prior year and, based on current business plans and financial
projections, does not know if it will be a PFIC in subsequent tax years. The
determination of PFIC status is inherently factual, is subject to a number of
uncertainties, and can be determined only annually after the close of the tax
year in question. Additionally, the analysis depends, in part, on the
application of complex U.S. federal income tax rules, which are subject to
differing interpretations. There can be no assurance that the Company will or
will not be determined to be a PFIC for the current tax year or any prior or
future tax year, and no opinion of legal counsel or ruling from the IRS
concerning the status of the Company as a PFIC has been obtained or will be
requested. U.S. Holders should consult their own U.S. tax advisors regarding the
PFIC status of the Company.

Tax Consequences if the Company is a PFIC

If the Company is a PFIC for any tax year during which a U.S.
Holder owns our common stock, special rules may increase such U.S. Holders U.S.
federal income tax liability with respect to the ownership and disposition of
such common stock. If the Company meets the income test or the asset test for
any tax year during which a U.S. Holder owns our common stock, the Company will
be treated as a PFIC with respect to such U.S. Holder for that tax year and for
all subsequent tax years, regardless of whether the Company meets the income
test or the asset test for such subsequent tax years, unless the U.S. Holder
elects to recognize any unrealized gain in such common stock or makes a timely
and effective QEF Election or, if applicable, Mark-to-Market Election.

Under the default PFIC rules:

- any gain realized on the sale or other disposition (including dispositions
  and certain other events that would not otherwise be treated as taxable
  events) of our common stock (including an indirect disposition of the stock of
  any Subsidiary PFIC) and any excess distribution (defined as a distribution
  to the extent it, together with all other distributions received
  in the relevant tax year, exceeds 125% of the average annual distribution
  received during the preceding three years) received on our common stock or
  with respect to the stock of a Subsidiary PFIC will be allocated rateably to
  each day of such U.S. Holders holding period for our common stock;

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- the amount allocated to the current tax year and any year prior to the
  first year in which the Company was a PFIC will be taxed as ordinary income in
  the current year;
- the amount allocated to each of the other tax years (the Prior PFIC
  Years) will be subject to tax at the highest ordinary income tax rate in
  effect for the applicable class of taxpayer for that year;
- an interest charge will be imposed with respect to the resulting tax
  attributable to each Prior PFIC Year, which interest charge is not deductible
  by non-corporate U.S. Holders; and
- any loss realized on the disposition of our common stock generally will
  not be recognized.

A U.S. Holder that makes a timely and effective
mark-to-market election under Section 1296 of the Code (a Mark-to-Market
Election) or a timely and effective election to treat the Company and each
Subsidiary PFIC as a qualified electing fund (a QEF) under Section 1295 of
the Code (a QEF Election) may generally mitigate or avoid the PFIC
consequences described above with respect to our common stock.

If a U.S. Holder makes a timely and effective QEF Election, the
U.S. Holder must include currently in gross income each year its pro rata share
of the Companys ordinary income and net capital gains, regardless of whether
such income and gains are actually distributed. Thus, a U.S. Holder could have a
tax liability with respect to such ordinary income or gains without a
corresponding receipt of cash from the Company. If the Company is a QEF with
respect to a U.S. Holder, the U.S. Holders basis in our common stock will be
increased to reflect the amount of the taxed but undistributed income.
Distributions of income that had previously been taxed will result in a
corresponding reduction of basis in our common stock and will not be taxed again
as a distribution to a U.S. Holder. Taxable gains on the disposition of our
common stock by a U.S. Holder that has made a timely and effective QEF Election
are generally capital gains. A U.S. Holder must make a QEF Election for the
Company and each Subsidiary PFIC if it wishes to have this treatment. To make a
QEF Election, a U.S. Holder will need to have an annual information statement
from the Company setting forth the ordinary income and net capital gains for the
year.U.S. Holders should be aware that there can be no assurance that
the Company will satisfy the recordkeeping requirements that apply to a QEF or
that the Company will supply U.S. Holders with information such U.S. Holders
require to report under the QEF rules in the event that the Company is a PFIC
for any tax year.

In general, a U.S. Holder must make a QEF Election on or before
the due date for filing its income tax return for the first year to which the
QEF Election applies. Under applicable Treasury Regulations, a U.S. Holder will
be permitted to make retroactive elections in particular circumstances,
including if it had a reasonable belief that the Company was not a PFIC and
filed a protective election. If a U.S. Holder owns PFIC stock indirectly through
another PFIC, separate QEF Elections must be made for the PFIC in which the U.S.
Holder is a direct shareholder and the Subsidiary PFIC for the QEF rules to apply to both PFICs.
Each U.S. Holder should consult its own tax advisor regarding the availability
and desirability of, and procedure for, making a timely and effective QEF
Election for the Company and any Subsidiary PFIC.

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A Mark-to-Market Election may be made with respect to stock in
a PFIC if such stock is regularly traded on a qualified exchange or other
market (within the meaning of the Code and the applicable Treasury
Regulations). A class of stock that is traded on one or more qualified exchanges
or other markets is considered to be regularly traded for any calendar year
during which such class of stock is traded in other than de minimus quantities
on at least 15 days during each calendar quarter. If our common stock is
considered to be regularly traded within this meaning, then a U.S. Holder
generally will be eligible to make a Mark-to-Market Election with respect to our
common stock but not with respect to a Subsidiary PFIC. At this time, however,
our common stock is not listed or posted for trading on any securities exchange
or stock quotation system, and therefore is not considered to be regularly
traded for this purpose.

Should our common stock become regularly traded, a U.S.
Holder that makes a timely and effective Mark-to-Market Election with respect to
our common stock generally will be required to recognize as ordinary income in
each tax year in which the Company is a PFIC an amount equal to the excess, if
any, of the fair market value of such stock as of the close of such taxable year
over the U.S. Holders adjusted tax basis in such stock as of the close of such
taxable year. A U.S. Holders adjusted tax basis in our common stock generally
will be increased by the amount of ordinary income recognized with respect to
such stock. If the U.S. Holders adjusted tax basis in our common stock as of
the close of a tax year exceeds the fair market value of such stock as of the
close of such taxable year, the U.S. Holder generally will recognize an ordinary
loss, but only to the extent of net mark-to-market income recognized with
respect to such stock for all prior taxable years. A U.S. Holders adjusted tax
basis in our common stock generally will be decreased by the amount of ordinary
loss recognized with respect to such stock. Any gain recognized upon a
disposition of our common stock generally will be treated as ordinary income,
and any loss recognized upon a disposition generally will be treated as ordinary
loss to the extent of the net mark-to-market income recognized for all prior
taxable years. Any loss recognized in excess thereof will be taxed as a capital
loss. Capital losses are subject to significant limitations under the Code. Each
U.S. Holder should consult its own tax advisor regarding the availability and
desirability of, and procedure for, making a timely and effective Mark-to-Market
Election with respect to our common stock.

Foreign Tax Credit

A U.S. Holder that pays (whether directly or through
withholding) Canadian income tax in connection with the ownership or disposition
of our common stock may be entitled, at the election of such U.S. Holder, to
receive either a deduction or a credit for such Canadian income tax paid.
Generally, a credit will reduce a U.S. Holders U.S. federal income tax
liability on a dollar-for-dollar basis, whereas a deduction will reduce a U.S.
Holders income subject to U.S. federal income tax. This election is made on a
year-by-year basis and applies to all creditable foreign taxes paid (whether
directly or through withholding) by a U.S. Holder during a year.

Complex
  limitations apply to the foreign tax credit, including the general limitation
  that the credit cannot exceed the proportionate share of a U.S. Holders U.S.
  federal income tax liability that such U.S. Holders foreign source taxable
  income bears to such U.S. Holders worldwide taxable income. In applying this
  limitation, a U.S. Holders various items of income and deduction must be
  classified, under complex rules, as either foreign source or U.S. source.
  Generally, dividends paid by a non-U.S. corporation should be treated as foreign
  source for this purpose, and gains recognized on the sale of securities of a
non-U.S. corporation by a U.S. Holder should be treated as U.S. source for this
purpose, except as otherwise provided in an applicable income tax treaty, and if
an election is properly made under the Code. However, the amount of a
distribution with respect to our common stock that is treated as a dividend
may be lower for U.S. federal income tax purposes than it is for Canadian
federal income tax purposes, resulting in a reduced foreign tax credit allowance
to a U.S. Holder. In addition, this limitation is calculated separately with
respect to specific categories of income. The foreign tax credit rules are
complex, and each U.S. Holder should consult its own U.S. tax advisor regarding
the foreign tax credit rules.

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Special rules apply to the amount of foreign tax credit that a
U.S. Holder may claim on a distribution, including a constructive distribution,
from a PFIC. Subject to such special rules, non-U.S. taxes paid with respect to
any distribution in respect of stock in a PFIC are generally eligible for the
foreign tax credit.The rules relating to distributions by a PFIC and
their eligibility for the foreign tax credit are complicated, and a U.S. Holder
should consult its own tax advisor regarding their application to the U.S.
Holder.

Receipt of Foreign Currency

The amount of any distribution or proceeds paid in Canadian
dollars to a U.S. Holder in connection with the ownership, sale or other taxable
disposition of our common stock, will be included in the gross income of a U.S.
Holder as translated into U.S. dollars calculated by reference to the exchange
rate prevailing on the date of actual or constructive receipt of the payment,
regardless of whether the Canadian dollars are converted into U.S. dollars at
that time. If the Canadian dollars received are not converted into U.S. dollars
on the date of receipt, a U.S. Holder will have a basis in the Canadian dollars
equal to their U.S. dollar value on the date of receipt. Any U.S. Holder who
receives payment in Canadian dollars and engages in a subsequent conversion or
other disposition of the Canadian dollars may have a foreign currency exchange
gain or loss that would be treated as ordinary income or loss, and generally
will be U.S. source income or loss for foreign tax credit purposes. Different
rules apply to U.S. Holders who use the accrual method with respect to foreign
currency. Each U.S. Holder should consult its own U.S. tax advisor regarding the
U.S. federal income tax consequences of receiving, owning, and disposing of
Canadian dollars.

Information Reporting; Backup Withholding

Under U.S. federal income tax law, certain categories of U.S.
Holders must file information returns with respect to their investment in, or
involvement in, a non-U.S. corporation. For example, U.S. return disclosure
obligations (and related penalties) are imposed on individuals who are U.S.
Holders that hold certain specified foreign financial assets in excess of
certain threshold amounts. The definition of specified foreign financial
assets includes not only financial accounts maintained in non-U.S. financial
institutions, but also, if held for investment and not in an account maintained
by certain financial institutions, any stock or security issued by a non-U.S.
person, any financial instrument or contract that has an issuer or counterparty
other than a U.S. person and any interest in a non-U.S. entity. A U.S. Holder
may be subject to these reporting requirements unless such U.S. Holders shares
of our common stock are held in an account at certain financial institutions.
Penalties for failure to file certain of these information returns are
substantial. U.S. Holders should consult with their own tax advisors regarding
the requirements of filing information returns on IRS Form 8938 for specified
foreign financial assets, filing obligations relating to the PFIC rules
including possible reporting on IRS Form 8621, and any other applicable
reporting requirements.

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Payments made within the U.S. or by a U.S. payor or U.S.
middleman of (a) distributions on our common stock, and (b) proceeds arising
from the sale or other taxable disposition of our common stock generally will be
subject to information reporting. In addition, backup withholding, currently at
a rate of 28%, may apply to such payments if a U.S. Holder (a) fails to furnish
such U.S. Holders correct U.S. taxpayer identification number (TIN)
(generally on Form W-9), (b) furnishes an incorrect U.S. TIN, (c) is notified by
the IRS that such U.S. Holder has previously failed to properly report items
subject to backup withholding, or (d) fails to certify, under penalty of
perjury, that such U.S. Holder has furnished its correct U.S. TIN and that the
IRS has not notified such U.S. Holder that it is subject to backup withholding.
Certain exempt persons generally are excluded from these information reporting
and backup withholding rules. Backup withholding is not an additional tax. Any
amounts withheld under the U.S. backup withholding rules are allowed as a credit
against a U.S. Holders U.S. federal income tax liability, if any, or will be
refunded, if such U.S. Holder furnishes required information to the IRS in a
timely manner. The information reporting and backup withholding rules may apply
even if, under the Canada-U.S. Tax Convention, payments are exempt from dividend
withholding tax or otherwise eligible for a reduced withholding rate.

The discussion of reporting requirements set forth above is not
intended to constitute an exhaustive description of all reporting requirements
that may apply to a U.S. Holder. A failure to satisfy certain reporting
requirements may result in an extension of the time period during which the IRS
can assess a tax, and, under certain circumstances, such an extension may apply
to assessments of amounts unrelated to any unsatisfied reporting requirement.
Each U.S. Holder should consult its own tax advisor regarding the information
reporting and backup withholding rules.

THE ABOVE SUMMARY IS NOT INTENDED TO CONSTITUTE A COMPLETE
ANALYSIS OF ALL U.S. TAX CONSIDERATIONS APPLICABLE TO U.S. HOLDERS WITH RESPECT
TO THE ACQUISITION, OWNERSHIP OR DISPOSITION OF OUR COMMON STOCK. U.S. HOLDERS
SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE TAX CONSIDERATIONS APPLICABLE TO
THEM IN THEIR PARTICULAR CIRCUMSTANCES.

F.Dividends and Paying Agents

Not Applicable.

G.Statements by Experts

Not Applicable.

H.Documents on Display

The documents concerning us which are referred to in this
Annual Report may be inspected at our offices located at 102 East 1st
Avenue, Vancouver, British Columbia, Canada, V5T 1A4.

In addition, we have filed with the SEC a registration
statement on Form F-1 under the U.S. Securities Act and the documents referred
to in this Annual Report have been filed as exhibits to such Form F-1 with the
SEC and may be inspected and copied at the public reference facility maintained
by the SEC at 100F. Street NW, Washington, D.C. 20549. In addition, the SEC
maintains a website at www.sec.gov that contains copies of documents that we
have filed with the SEC using its EDGAR system.

- 95 -

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I.Subsidiary Information

We do not have any subsidiaries.

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK

We are exposed in varying degrees to a variety of financial
instrument related risks. The Board of Directors approves and monitors the risk
management processes, inclusive of controlling and reporting structures. The
type of risk exposure and the way in which such exposure is managed is provided
as follows:

Credit Risk

Credit risk is the risk that one party to a financial
instrument will fail to discharge an obligation and cause the other party to
incur a financial loss. Our primary exposure to credit risk is on our cash held
in bank accounts. The majority of cash is deposited in bank accounts held with
major banks in Canada. As most of our cash is held by one bank there is a
concentration of credit risk. This risk is managed by using major banks that are
high credit quality financial institutions as determined by rating agencies. Our
secondary exposure to risk is on its other receivables. This risk is minimal as
receivables consist primarily of government grant and refundable government
value added taxes.

Liquidity Risk

Liquidity risk is the risk that we will not be able to meet our
financial obligations as they fall due. We have a planning and budgeting process
in place to help determine the funds required to support our normal operating
requirements on an ongoing basis. We ensure that there are sufficient funds to
meet our short-term business requirements, taking into account our anticipated
cash flows from operations and our holdings of cash and cash equivalents.

Historically, our source of funding has been shareholder loans
and the issuance of equity securities for cash, primarily through private
placements. Our access to financing is always uncertain. There can be no
assurance of continued access to significant equity funding.

The following is an analysis of the contractual maturities of
our non-derivative financial liabilities as at December 31, 2016:

Within one year
    Between one and five years
    More than five yearsTrade payables
    $150,305
    Nil
    NilCustomer deposits
    $169,500
    Nil
    NilConvertible loan
    $243,676
    Nil
    NilShareholder loan
    Nil
    Nil
    Nil


Foreign Exchange Risk

Foreign currency risk is the risk that the fair values of
future cash flows of a financial instrument will fluctuate because they are
denominated in currencies that differ from the respective functional currency.
We are exposed to currency risk as we incur expenditures that are denominated in US dollars while our functional currency is the
Canadian dollar. We do not hedge our exposure to fluctuations in foreign
exchange rates.

- 96 -

---

The following is an analysis of Canadian dollar equivalent of
financial assets and liabilities that are denominated in US dollars:

December 31, 2015
    December 31, 2016Cash and cash equivalents
    $43,638
    $98,762Trade payables
    ($18,804)
    ($4,804)$25,554
    $93,958


Interest Rate Risk

Interest rate risk is the risk that the fair value of future
cash flows of a financial instrument will fluctuate because of changes in market
interest rates. We are exposed to interest rate risk on our cash equivalents as
these instruments have original maturities of three months or less and are
therefore exposed to interest rate fluctuations on renewal. A 1% change in
market interest rates would have an impact on our net loss of $1,064 for the
period ended December 31, 2015. A 1% change in market interest rates would have
an impact on the Companys net loss of $699 for the year ended December 31,
2016.

Classification of Financial Instruments

Financial assets included in the statement of financial
position are as follows:

December 31, 2015
    December 31, 2016Loans and receivables:Cash
    $106,357
    $3,916,283Other receivables
    $28,639
    $271,284


Financial liabilities included in the statement of financial
position are as follows:

December 31, 2015
    December 31, 2016Non-derivative financial liabilities:Trade payable
    $67,718
    $150,305Advance payable
    $50,000
    $-Customer deposits
    $28,506
    $169,500Shareholder loan
    $185,000
    $-Convertible loan
    $-
    $243,676$331,224
    $563,481


Fair Value

The fair value of our financial assets and liabilities
approximates the carrying amount. Financial instruments measured at fair value
are classified into one of three levels in the fair value hierarchy according to
the relative reliability of the inputs used to estimate the fair values. The
three levels of the fair value hierarchy are:

| | o | Level 1  Unadjusted quoted prices in active markets for
      identical assets or liabilities;
| | - | -----------------------------------------------------------------------------------------------

- 97 -

---

o
    Level 2  Inputs other than quoted prices that are
      observable for the asset or liability either directly or indirectly; ando
    Level 3  Inputs that are not based on observable market
      data.


The following is an analysis of our financial assets measured
at fair value as at December 31, 2015:

As at December 31, 2015Level 1
    Level 2
    Level 3Cash and cash equivalents
    $106,357


The following is an analysis of our financial assets measured
at fair value as at December 31, 2016:

As at December 31, 2016Level 1
    Level 2
    Level 3Cash and cash equivalents
    $3,916,283


ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY
SECURITIES

Not Applicable.

- 98 -

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PART II

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

There have not been any defaults with respect to dividends,
arrearages or delinquencies since incorporation on February 16, 2015.

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY
HOLDERS AND USE OF PROCEEDS

There have been no material modifications to the rights of our
security holders since incorporation on February 16, 2015.

Use of Proceeds

We currently have a Form F-1 registration statement filed with
the SEC (SEC file no. 333-214067) that went effective on February 10, 2017 with
respect to the sale of securities by certain selling securityholders. We will
not receive any of the proceeds from the sale of our previously-issued shares of
common stock by such selling securityholders. However, up to an additional
4,305,587 shares of common stock that may be offered for sale by such selling
securityholders under the prospectus included in the Form F-1 are issuable upon
exercise of warrants. If all of these warrants are exercised, which cannot be
assured, we will receive total proceeds of $5,750,549. The proceeds, if any,
would be used for general corporate and working capital purposes.

ITEM 15. CONTROLS AND PROCEDURES Disclosure Controls And
Procedures

Disclosure controls and procedures are defined in Rule
13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as
amended (the Exchange Act) to mean controls and other procedures of an issuer
that are designed to ensure that information required to be disclosed by the
Company in the reports that we file or submit under the Exchange Act is
recorded, processed, summarized and reported, within the time periods specified
in the SECs rules and forms and includes, without limitation, controls and
procedures designed to ensure that such information is accumulated and
communicated to the issuers management, including its principal executive and
principal financial officers, or persons performing similar functions, as
appropriate to allow timely decisions regarding required disclosure.

As required by Rule 13a-15 or 15d-15 under the Exchange Act, we
have carried out an evaluation of the effectiveness of our Companys disclosure
controls and procedures as of the end of the period covered by this Annual
Report on Form 20-F, being December 31, 2016. This evaluation was carried out by
our Chief Executive Officer and Chief Financial Officer. Based upon that
evaluation, our Chief Executive Officer and Chief Financial Officer concluded
that our disclosure controls and procedures were effective as of December 31,
2016.

Managements Annual Report On Internal Control Over
Financial Reporting

Our management is responsible for establishing and maintaining
adequate internal control over financial reporting. The Exchange Act in Rule
13a-15(f ) and 15d-15(f ) defines this as a process designed by, or under the
supervision of, the companys principal executive and principal financial officers and effected by the Board, management and
other personnel, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles and
includes those policies and procedures that:

- 99 -

---

- pertain to the maintenance of records that, in reasonable detail,
  accurately and fairly reflect the transactions and dispositions of the assets
  of the company;
- provide reasonable assurance that transactions are recorded as necessary to
  permit preparation of financial statements in accordance with generally
  accepted accounting principles, and that receipts and expenditures of the
  company are being made only in accordance with authorizations of management
  and directors of the company; and
- provide reasonable assurance regarding prevention or timely detection of
  unauthorized acquisition, use or disposition of the companys assets that may
  have a material effect on the financial statements.

Under the supervision and with the participation of our Chief
Executive Officer and Chief Financial Officer, our management assessed the
effectiveness of our internal control over financial reporting as at December
31, 2016. In making this assessment, our management used the criteria,
established in Internal Control-Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). Based upon this
assessment, our management concluded that our internal control over financial
reporting was effective as at December 31, 2016.

Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness of internal control over financial reporting
to future periods are subject to risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.

This Annual Report does not include an attestation report of
the Companys registered public accounting firm regarding internal control over
financial reporting. Managements report is not subject to attestation by the
Companys registered public accounting firm pursuant to rules of the Securities
and Exchange Commission that permit the Company to provide only managements
report in this Annual Report.

Changes In Internal Control Over Financial Reporting

During the period ended December 31, 2016, there were no
changes in our internal control over financial reporting (as defined in Rules
13a-15(f) and 15d-15(f) of the Exchange Act) that have materially affected, or
are reasonably likely to materially affect, our internal control over financial
reporting.

ITEM 16. [RESERVED]

ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT

As disclosed above, as of the date hereof, our Audit Committee
is comprised of Jerry Kroll, Shaun Greffard and Robert Tarzwell. Messrs.
Greffard and Tarzwell are independent under the listing standards regarding independence of the NYSE MKT
Equities Exchange. Mr. Kroll is not independent as he is our Chief
Executive Officer.

- 100 -

---

Our Board has determined that Robert Tarzwell qualifies as an
audit committee financial expert pursuant to Items 16A(b) and (c) of Form 20-F.
In addition, Messrs. Greffard and Tarzwell are also considered independent and
all members of the audit committee are considered financially literate under
applicable Canadian laws.

ITEM 16B. CODE OF ETHICS

We have adopted a Code of Ethics that applies to all of our
employee and officers, including our principal executive officer, principal
financial officer, principal accounting officer or controller, or persons
performing similar functions. The Coe of Ethics meets the requirements for a
code of ethics within the meaning of that term in Item 16B of Form 20-F. A
copy of our Code of Ethics will be provided to any person without charge, upon
request. All requests for a copy of our Code of Ethics should be directed in
writing to the attention of Kulwant Sandher, 102 East 1st Avenue,
Vancouver, British Columbia, Canada V5T 1A4, or by email at
kulwant@electrameccanica.com.

During the most recently completed fiscal year,
  the Company has neither: (a) amended its Code of Ethics; nor (b) granted any
  waiver (including any implicit waiver) form any provision of its Code of Ethics.

ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following table sets forth information regarding the amount
billed to us by our principal independent auditors, Dale Matheson Carr-Hilton
Labonte LLP for the fiscal year ended December 31, 2016 and 2015:

Period Ended December 312016
    2015Audit Fees:
    $24,000
    $21,500Audit Related Fees:
    $39,700
    NilTax Fees:
    Nil
    NilTotal:
    $63,700
    $21,500


Audit Fees

This category includes the aggregate fees billed by our
independent auditor for the audit of our annual financial statements, reviews of
interim financial statements that are provided in connection with statutory and
regulatory filings or engagements.

Audit Related Fees

This category includes the aggregate fees billed in each of the
last two fiscal years for assurance and related services by the independent
auditors that are reasonably related to the performance of the audits or reviews
of the financial statements and are not reported above under Audit Fees, and
generally consist of fees for other engagements under professional auditing
standards, accounting and reporting consultations,

- 101 -

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Tax Fees

This category includes the aggregate fees billed in each of the
last two fiscal years for professional services rendered by the independent
auditors for tax compliance, tax planning and tax advice.

Policy on Pre-Approval by Audit Committee of Services
Performed by Independent Auditors

The policy of our Audit Committee is to pre-approve all audit
and permissible non-audit services to be performed by our independent auditors
during the fiscal year.

ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT
COMMITTEES

Not Applicable.

ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND
AFFILIATED PURCHASERS

Not Applicable.

ITEM 16F. CHANGE IN REGISTRANTS CERTIFYING ACCOUNTANT.

Not Applicable.

ITEM 16G. CORPORATE GOVERNANCE.

Not Applicable

ITEM 16H. MINE SAFETY DISCLOSURE

Not Applicable.

- 102 -

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PART III

ITEM 17. FINANCIAL STATEMENTS

Not Applicable.

ITEM 18. FINANCIAL STATEMENTS

Our financial statements were prepared in accordance with IFRS,
as issued by the IASB, and are presented in Canadian dollars.

Financial statements filed as part of this Annual Report:

| | 1. | Report of Independent Registered Public Accounting Firm
      dated April 13, 2017;                          
| | -- | -------------------------------------------------------------------------------------------------------------
| |    |                                                                                                              
| | 2. | Statement of Financial Position as at December 31, 2016
      and 2015;                                      
| |    |                                                                                                              
| | 3. | Statement of Comprehensive Loss for the years ended
      December 31, 2016 and 2015;                        
| |    |                                                                                                              
| | 4. | Statements of Changes in Equity for the period from
      inception (February 16, 2015) to December 31, 2016;
| |    |                                                                                                              
| | 5. | Statements of Cash Flows for the years ended December 31,
      2016 and 2015; and                           
| |    |                                                                                                              
| | 6. | Notes to the Financial
Statements.                                                                           

ITEM 19. EXHIBITS

The following exhibits are filed as part of this Annual Report
on Form 20-F:

|Exhibit |                                                                                                                                                                   
|------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description                                                                                                                                                       
|        |                                                                                                                                                                   
|1.1     | Notice of Articles(1)                                                                                                                                             
|        |                                                                                                                                                                   
|1.2     | Articles(1)                                                                                                                                                       
|        |                                                                                                                                                                   
|4.1     | 2015 Stock Option Plan(1)                                                                                                                                         
|        |                                                                                                                                                                   
|4.2     | Joint Operating Agreement between the Company,
      Intermeccanica International Inc. and Henry Reisner, dated July 15,
      2015(1)                            
|        |                                                                                                                                                                   
|4.3     | Amending Agreement to Joint Operating Agreement, between
      the Company, Intermeccanica International Inc. and Henry Reisner, dated
      September 19, 2016(1)
|        |                                                                                                                                                                   
|4.4     | Executive Services Agreement between the Company and
      Jerry Kroll, dated July 1, 2016(1)                                                                     
|        |                                                                                                                                                                   
|4.5     | Executive Services Agreement between the Company and Ed
      Theobald, dated July 1, 2016(1)                                                                     
|        |                                                                                                                                                                   
|4.6     | Executive Services Agreement between the Company and Iain
      Ball, dated July 1, 2016(1)                                                                       

- 103 -

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|Exhibit |                                                                                                                          
|------- | -------------------------------------------------------------------------------------------------------------------------
|Number  | Description                                                                                                              
|        |                                                                                                                          
|4.7     | Executive
      Services Agreement between the Company and Hurricane Corporate Services
      Ltd., dated July 1, 2016(1)
|        |                                                                                                                          
|4.8     | Executive
      Services Agreement between the Company and Henry Reisner, dated July 1,
      2016(1)                    
|        |                                                                                                                          
|4.9     | Executive
      Services Agreement between the Company and Mark West, dated November 1,
      2016(2)                    
|        |                                                                                                                          
|11.1    | Code of
      Ethics(1)                                                                                                  
|        |                                                                                                                          
|12.1    | Section 302(a)
      Certification of CEO(*)                                                                             
|        |                                                                                                                          
|12.2    | Section 302(a)
      Certification of CFO(*)                                                                             
|        |                                                                                                                          
|13.1    | Section 906
      Certifications of CEO and CFO(*)                                                                       
|        |                                                                                                                          
|15.1    | Audit Committee
      Charter(1)                                                                                         
|        |                                                                                                                          
|15.2    | Nominating and
      Corporate Governance Committee Charter(1)                                                           
|        |                                                                                                                          
|15.3    | Compensation
      Committee Charter(1)                                                                                  

________________________
Notes:

|(*) | Filed herewith.                                                                                                                                             
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Filed as an exhibit to our registration statement on Form
      F-1 as filed with the SEC on October 12, 2016 and incorporated herein by
      reference.   
|(2) | Filed as an exhibit to our registration statement on Form
      F-1/A as filed with the SEC on December 20, 2016 and incorporated herein
      by reference.

- 104 -

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SIGNATURES

The registrant certifies that it meets all of the requirements for filing on
Form 20-F and that it has duly caused and authorized the undersigned to sign
this annual report on its behalf.

ELECTRAMECCANICA VEHICLESCORP.(Registrant)

Date: April 27, 2017.

| | By: | /s/ Jerry Kroll                            
| | --- | -------------------------------------------
| |     | Jerry Kroll                                
| |     | President and Chief Executive
      Officer

___________

- 105 -

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Electrameccanica Vehicles Corp. 
  Financial Statements 
  Year Ended December 31, 2016

Expressed in Canadian Dollars

---



INDEPENDENT AUDITORS REPORT

To the Directors of Electrameccanica Vehicles Corp.

We have audited the accompanying financial statements of
  Electrameccanica Vehicles Corp. which comprise the statement of financial
  position as at December 31, 2016 and December 31, 2015, and the statements of
  comprehensive loss, shareholders equity and cash flows for the years then
  ended, and a summary of significant accounting policies and other explanatory
  information.

Management's Responsibility for the Consolidated Financial
  Statements 
  Management is responsible for the preparation and fair
  presentation of these financial statements in accordance with International
  Financial Reporting Standards as issued by the International Accounting
  Standards Board, and for such internal control as management determines is
  necessary to enable the preparation of financial statements that are free from
  material misstatement, whether due to fraud or error.

Auditors Responsibility 
  Our responsibility is to
  express an opinion on these financial statements based on our audit. We
  conducted our audit in accordance with Canadian generally accepted auditing
  standards, and the standards of the Public Company Accounting Oversight Board
  (United States). Those standards require that we comply with ethical
  requirements and plan and perform the audit to obtain reasonable assurance about
  whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit
  evidence about the amounts and disclosures in the financial statements. The
  procedures selected depend on the auditors judgment, including the assessment
  of the risks of material misstatement of the financial statements, whether due
  to fraud or error. In making those risk assessments, the auditor considers
  internal control relevant to the entity's preparation and fair presentation of
  the consolidated financial statements in order to design audit procedures that
  are appropriate in the circumstances, but not for the purpose of expressing an
  opinion on the effectiveness of the entity's internal control. An audit also
  includes evaluating the appropriateness of accounting policies used and the
  reasonableness of accounting estimates made by management, as well as evaluating
  the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is
  sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the financial statements
  present fairly, in all material respects, the financial position of
  Electrameccanica Vehicles Corp. as at December 31, 2016 and 2015, and its
  financial performance and its cash flows for the year then ended in accordance
  with International Financial Reporting Standards as issued by the International
  Accounting Standards Board.

Emphasis of MatterWithout qualifying our opinion,
  we draw attention to Note 1 in the financial statements which describes certain
  conditions that indicate the existence of a material uncertainty that casts
  substantial doubt about Electrameccanica Vehicles Corps ability to continue as
  a going concern. The financial statements do not include any adjustments that
  might result from this uncertainty.



|DALE MATHESON CARR-HILTON LABONTE LLP
|-------------------------------------
|CHARTERED PROFESSIONAL ACCOUNTANTS   

Vancouver, Canada 
  April 13, 2017

---

|Electrameccanica Vehicles Corp. 
|--------------------------------
|Statements of Financial Position
|(Expressed in Canadian dollars) 

|                                       |  |      |  |   |              |   |   |              |  
|-------------------------------------- |  | ---- |  | - | ------------ | - | - | ------------ | -
|                                       |  |      |  |   | December 31, |   |   | December 31, |  
|                                       |  |      |  |   | 2016         |   |   | 2015         |  
|                                       |  | Note |  |   |              |   |   |              |  
|ASSETS                                 |  |      |  |   |              |   |   |              |  
|Current assets                         |  |      |  |   |              |   |   |              |  
|Cash and cash equivalents              |  |      |  | $ | 3,916,283    |   | $ | 106,357      |  
|Receivables                            |  | 4    |  |   | 271,284      |   |   | 28,639       |  
|Prepaid expenses                       |  |      |  |   | 249,585      |   |   | 47,347       |  
|Inventory                              |  |      |  |   | -            |   |   | 14,966       |  
|                                       |  |      |  |   | 4,437,152    |   |   | 197,309      |  
|Non-current assets                     |  |      |  |   |              |   |   |              |  
|Plant and equipment                    |  | 5    |  |   | 225,269      |   |   | 15,809       |  
|Investment                             |  | 6    |  |   | 100,000      |   |   | -            |  
|Trademark and patents                  |  | 2    |  |   | 25,345       |   |   | -            |  
|TOTAL ASSETS                           |  |      |  | $ | 4,787,766    |   | $ | 213,118      |  
|                                       |  |      |  |   |              |   |   |              |  
|LIABILITIES                            |  |      |  |   |              |   |   |              |  
|Current liabilities                    |  |      |  |   |              |   |   |              |  
|Trade payables and accrued liabilities |  | 7    |  | $ | 468,000      |   | $ | 132,910      |  
|Customer deposits                      |  |      |  |   | 169,500      |   |   | 28,506       |  
|Convertible loan                       |  | 10   |  |   | 243,676      |   |   | -            |  
|Shareholder loan                       |  | 15   |  |   | -            |   |   | 185,000      |  
|TOTAL LIABILITIES                      |  |      |  |   | 881,176      |   |   | 346,416      |  
|                                       |  |      |  |   |              |   |   |              |  
|EQUITY                                 |  |      |  |   |              |   |   |              |  
|Share capital                          |  | 11   |  |   | 11,383,996   |   |   | 458,520      |  
|Common share subscription              |  |      |  |   | 101,500      |   |   | 50,000       |  
|Share-based payment reserve            |  | 12   |  |   | 2,351,144    |   |   | 354,015      |  
|Equity component of convertible loan   |  |      |  |   | 39,130       |   |   | -            |  
|Deficit                                |  |      |  |   | (9,969,180   | ) |   | (995,833     | )
|TOTAL EQUITY                           |  |      |  |   | 3,906,590    |   |   | (133,298     | )
|                                       |  |      |  |   |              |   |   |              |  
|TOTAL LIABILITIES AND EQUITY           |  |      |  | $ | 4,787,766    |   | $ | 213,118      |  
|Commitments (Notes 8)                  |  |      |  |   |              |   |   |              |  
|Subsequent events (Note 18)            |  |      |  |   |              |   |   |              |  

On behalf of the Board of Directors.

|/s/ Jerry
      Kroll |  | /s/
      Robert Tarzwell
|--------------------- |  | -------------------------
|Director              |  | Director                 

|The accompanying notes are an integral part of
      these financial statements | 3
|------------------------------------------------------------------------------- | -

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|Electrameccanica Vehicles Corp. 
|--------------------------------
|Statements of Comprehensive Loss
|(Expressed in Canadian dollars) 

|                                                    |  |      |  |   |              |   |   |              |  
|--------------------------------------------------- |  | ---- |  | - | ------------ | - | - | ------------ | -
|                                                    |  |      |  |   | Year ended   |  
|                                                    |  |      |  |   | December 31, |   |   | December 31, |  
|                                                    |  |      |  |   | 2016         |   |   | 2015         |  
|                                                    |  | Note |  |   |              |   |   |              |  
|                                                    |  |      |  |   |              |   |   |              |  
|Operating expenses                                  |  |      |  |   |              |   |   |              |  
|Amortization                                        |  | 5    |  | $ | 22,567       |   | $ | 629          |  
|General and administrative
      expenses           |  | 13   |  |   | 1,205,835    |   |   | 132,870      |  
|Research and development expenses                   |  | 14   |  |   | 2,778,295    |   |   | 486,809      |  
|Sales and marketing expenses                        |  |      |  |   | 209,455      |   |   | 19,691       |  
|Stock-based compensation expense                    |  | 12   |  |   | 1,461,189    |   |   | 354,015      |  
|Share-based payment expense                         |  | 11   |  |   | 3,264,681    |   |   | -            |  
|                                                    |  |      |  |   | (8,942,022   | ) |   | (994,014     | )
|Other items                                         |  |      |  |   |              |   |   |              |  
|Accretion interest expense                          |  |      |  |   | 25,908       |   |   | 92           |  
|Foreign exchange loss                               |  |      |  |   | 5,417        |   |   | 1,727        |  
|                                                    |  |      |  |   |              |   |   |              |  
|Net and comprehensive loss                          |  |      |  | $ | (8,973,347   | ) | $ | (995,833     | )
|                                                    |  |      |  |   |              |   |   |              |  
|Loss per share  basic and fully diluted            |  |      |  | $ | (0.27        | ) | $ | (0.04        | )
|                                                    |  |      |  |   |              |   |   |              |  
|Weighted average number of shares
      outstanding |  |      |  |   |              |   |   |              |  
| basic and
      fully diluted                     |  | 11   |  |   | 32,684,868   |   |   | 25,769,510   |  

|The accompanying notes are an integral part of
      these financial statements | 4
|------------------------------------------------------------------------------- | -

---

|Electrameccanica Vehicles Corp.
|-------------------------------
|Statements of Changes in Equity
|(Expressed in Canadian dollars)

|                                              |  |    |  |  |               |  |   |            |  |   |              |  |   |                  |   |   |             |  |   |                |  |   |            |   |   |            |  
|--------------------------------------------- |  | -- |  |  | ------------- |  | - | ---------- |  | - | ------------ |  | - | ---------------- | - | - | ----------- |  | - | -------------- |  | - | ---------- | - | - | ---------- | -
|Period from inception February                |  |    |  |  |               |  |   |            |  |   |              |  |   |                  |   |   |             |  |   |                |  |   |            |   |   |            |  
|16, 2015 to December 31, 2016                 |  |    |  |  |               |  |   |            |  |   |              |  |   |                  |   |   |             |  |   |                |  |   |            |   |   |            |  
|                                              |  |    |  |  | Share capital |  |   |            |  |   |              |  |   |                  |   |   |             |  |   |                |  |   |            |  
|                                              |  |    |  |  |               |  |   |            |  |   |              |  |   |                  |   |   |             |  |   | Equity         |  |   |            |   |   |            |  
|                                              |  |    |  |  |               |  |   |            |  |   |              |  |   |                  |   |   | Share-based |  |   | component      |  |   |            |   |   |            |  
|                                              |  |    |  |  | Number of     |  |   |            |  |   | Share        |  |   | Share            |   |   | payment     |  |   | of convertible |  |   |            |   |   |            |  
|                                              |  |    |  |  | shares        |  |   | Amount     |  |   | subscription |  |   | Issue
      cost |   |   | reserve     |  |   | loan           |  |   | Deficit    |   |   | Total      |  
|                                              |  |    |  |  |               |  |   |            |  |   |              |  |   |                  |   |   |             |  |   |                |  |   |            |   |   |            |  
|Shares issued for cash  seed
      capital   |  | 11 |  |  | 25,350,000    |  | $ | 5,070      |  | $ |              |  | $ |                  |   | $ |             |  | $ |                |  | $ |            |   | $ | 5,070      |  
|Shares issued for cash  private placements   |  | 11 |  |  | 1,433,625     |  |   | 453,450    |  |   | -            |  |   | -                |   |   | -           |  |   | -              |  |   | -          |   |   | 453,450    |  
|Share subscription                            |  |    |  |  | -             |  |   | -          |  |   | 50,000       |  |   | -                |   |   | -           |  |   | -              |  |   | -          |   |   | 50,000     |  
|Stock-based compensation                      |  |    |  |  | -             |  |   | -          |  |   | -            |  |   | -                |   |   | 354,015     |  |   | -              |  |   | -          |   |   | 354,015    |  
|Comprehensive loss for the period             |  |    |  |  | -             |  |   | -          |  |   | -            |  |   | -                |   |   | -           |  |   | -              |  |   | (995,833   | ) |   | (995,833   | )
|Balance at December 31, 2015                  |  |    |  |  | 26,783,625    |  |   | 458,520    |  |   | 50,000       |  |   | -                |   |   | 354,015     |  |   | -              |  |   | (995,833   | ) |   | (133,298   | )
|                                              |  |    |  |  |               |  |   |            |  |   |              |  |   |                  |   |   |             |  |   |                |  |   |            |   |   |            |  
|Shares issued for cash                        |  | 11 |  |  | 13,575,200    |  |   | 8,375,519  |  |   | -            |  |   | (1,604,486       | ) |   | -           |  |   | -              |  |   | -          |   |   | 6,771,033  |  
|Shares issued for finders
      fees          |  | 11 |  |  | 1,273,512     |  |   | 823,512    |  |   | -            |  |   | -                |   |   | 519,088     |  |   | -              |  |   | -          |   |   | 1,342,600  |  
|Shares issued for convertible debt issue cost |  | 10 |  |  | 26,250        |  |   | 26,250     |  |   |              |  |   | -                |   |   | 16,852      |  |   | -              |  |   | -          |   |   | 43,102     |  
|Share issued to settle debt                   |  | 11 |  |  | 125,000       |  |   | 50,000     |  |   |              |  |   |                  |   |   |             |  |   |                |  |   |            |   |   | 50,000     |  
|Share-based payment                           |  | 11 |  |  | -             |  |   | 3,264,681  |  |   |              |  |   |                  |   |   |             |  |   |                |  |   |            |   |   | 3,264,681  |  
|Stock-based compensation                      |  | 11 |  |  | -             |  |   | -          |  |   | -            |  |   | -                |   |   | 1,461,189   |  |   | -              |  |   | -          |   |   | 1,461,189  |  
|Share subscription                            |  | 11 |  |  | -             |  |   | -          |  |   | 51,500       |  |   | (10,000          | ) |   | -           |  |   | -              |  |   |            |   |   | 41,500     |  
|Equity component of
      convertible loan    |  | 10 |  |  |               |  |   |            |  |   |              |  |   |                  |   |   |             |  |   | 39,130         |  |   |            |   |   | 39,130     |  
|Comprehensive loss for the year               |  |    |  |  |               |  |   |            |  |   |              |  |   |                  |   |   |             |  |   |                |  |   | (8,973,347 | ) |   | (8,973,347 | )
|                                              |  |    |  |  |               |  |   |            |  |   |              |  |   |                  |   |   |             |  |   |                |  |   |            |   |   |            |  
|Balance at December 31, 2016                  |  |    |  |  | 41,783,587    |  | $ | 12,998,482 |  | $ | 101,500      |  | $ | (1,614,486       | ) | $ | 2,351,144   |  | $ | 39,130         |  | $ | (9,969,180 | ) | $ | 3,906,590  |  

During the year ended December 31, 2016, the Company completed
  a 1:5 forward share split and all references to number of shares have been
  retroactively adjusted. See note 11 for further details.

|The accompanying notes are an integral part of these
      financial statements | 5
|------------------------------------------------------------------------------- | -

---

|Electrameccanica Vehicles Corp.
|-------------------------------
|Statements of Cash Flows       
|(Expressed in Canadian dollars)

|                                                                       |   |              |   |   |              |  
|---------------------------------------------------------------------- | - | ------------ | - | - | ------------ | -
|                                                                       |   | Year ended   |  
|                                                                       |   | December 31, |   |   | December 31, |  
|                                                                       |   | 2016         |   |   | 2015         |  
|Operating activities                                                   |   |              |   |   |              |  
|Loss for the year                                                      | $ | (8,973,347   | ) | $ | (995,833     | )
|Adjustments for:                                                       |   |              |   |   |              |  
|Amortization                                                           |   | 22,567       |   |   | 629          |  
|Stock-based compensation
      expense                                 |   | 1,461,189    |   |   | 354,015      |  
|Share-based payment expense                                            |   | 3,264,681    |   |   | -            |  
|Interest accretion expense                                             |   | 25,908       |   |   | -            |  
|Changes in non-cash working capital items:                             |   |              |   |   |              |  
|Receivables                                                            |   | (242,645     | ) |   | (28,639      | )
|Prepaid expenses                                                       |   | (202,238     | ) |   | (47,347      | )
|Inventory                                                              |   | 14,966       |   |   | (14,967      | )
|Trades payable and accrued liabilities                                 |   | 325,090      |   |   | 132,910      |  
|Customer deposits                                                      |   | 140,994      |   |   | 28,506       |  
|Net cash flows
      used in operating activities                      |   | (4,162,835   | ) |   | (570,725     | )
|                                                                       |   |              |   |   |              |  
|Investing activities                                                   |   |              |   |   |              |  
|Expenditures on property, plant and
      equipment                    |   | (232,027     | ) |   | (16,438      | )
|Investment                                                             |   | (100,000     | ) |   | -            |  
|Expenditures on intellectual property                                  |   | (25,345      | ) |   | -            |  
|Net cash flows
      used in investing activities                      |   | (357,372     | ) |   | (16,438      | )
|                                                                       |   |              |   |   |              |  
|Financing activities                                                   |   |              |   |   |              |  
|Proceeds from convertible loan                                         |   | 300,000      |   |   | -            |  
|Proceeds from (repayment of) shareholder loan                          |   | (135,000     | ) |   | 185,000      |  
|Proceeds from share subscription                                       |   | 101,500      |   |   | 50,000       |  
|Proceeds on
      issuance of common shares  net of share issue costs |   | 8,063,633    |   |   | 458,520      |  
|Net cash flows from financing activities                               |   | 8,330,133    |   |   | 693,520      |  
|Increase in cash and cash equivalents                                  |   | 3,809,926    |   |   | 106,357      |  
|                                                                       |   |              |   |   |              |  
|Cash and cash
      equivalents, beginning                             |   | 106,357      |   |   | -            |  
|Cash and cash equivalents, ending                                      | $ | 3,916,283    |   | $ | 106,357      |  
|                                                                       |   |              |   |   |              |  
|Cash                                                                   |   | 666,293      |   |   | 106,357      |  
|Cash equivalents                                                       |   | 3,249,990    |   |   | -            |  
|Cash and cash equivalents, ending                                      | $ | 3,916,283    |   | $ | 106,357      |  

|The accompanying notes are an integral part of these
      financial statements | 6
|------------------------------------------------------------------------------- | -

---

|Electrameccanica Vehicles Corp.               
|----------------------------------------------
|Notes to the Financial Statements             
|(Expressed in Canadian dollars)               
|For the years ended December 31, 2016 and 2015

|1. | Nature and continuance of operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | Electrameccanica Vehicles Corp (the Company) was
      incorporated on February 16, 2015, under the laws of the province of
      British Columbia, Canada, and its principal activity is the development
      and manufacturing of single occupancy electric vehicles.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | The head office and principal address of the Company are
      located at 102 East 1stAvenue, Vancouver, British Columbia,
      Canada, V5T 1A4.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | These financial statements have been prepared on the
      assumption that the Company will continue as a going concern, meaning it
      will continue in operation for the foreseeable future and will be able to
      realize assets and discharge liabilities in the ordinary course of
      operations. As at December 31, 2016 the Company had not commenced
      commercial production and is not able to finance day to day activities
      through operations. The Companys continuation as a going concern is
      dependent upon the successful results from its electric vehicles
      manufacturing activities and its ability to attain profitable operations
      and generate funds there from and/or raise equity capital or borrowings
      sufficient to meet current and future obligations. These factors indicate
      the existence of a material uncertainty that may cast significant doubt
      about the Companys ability to continue as a going concern. Management
      intends to finance its operations over the next twelve months through
      private placement of equity capital. Should the Company be unable to
      continue as a going concern, the net realizable value of its assets may be
      materially less than the amounts on its statement of financial
      position.

|2. | Significant accounting policies and basis of
      preparation                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The financial statements were authorized for issue on
      April 13, 2017 by the directors of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Statement of compliance with International
      Financial Reporting Standards                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | These financial statements have been prepared in
      accordance with International Financial Reporting Standards (IFRS) as
      issued by the International Accounting Standards Board (IASB).                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Basis of preparation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | The financial statements of the Company have been
      prepared on an accrual basis and are based on historical costs, modified
      where applicable. The financial statements are presented in Canadian
      dollars.                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Significant estimates and
      assumptions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The preparation of financial statements in accordance
      with IFRS requires the Company to make estimates and assumptions
      concerning the future. The Companys management reviews these estimates
      and underlying assumptions on an ongoing basis, based on experience and
      other factors, including expectations of future events that are believed
      to be reasonable under the circumstances. Revisions to estimates are
      adjusted for prospectively in the period in which the estimates are
      revised.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Estimates and assumptions where there is significant risk
      of material adjustments to assets and liabilities in future accounting
      periods include the useful lives of property, plant and equipment, fair
      value measurements for financial instruments and share-based payments, and
      the recoverability and measurement of deferred tax
      assets.                                                                                                                                                               

7

---

|Electrameccanica Vehicles Corp.               
|----------------------------------------------
|Notes to the Financial Statements             
|(Expressed in Canadian dollars)               
|For the years ended December 31, 2016 and 2015

|2. | Significant accounting policies and basis of
      preparation(contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Significant judgments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | The preparation of financial statements in accordance
      with IFRS requires the Company to make judgments, apart from those
      involving estimates, in applying accounting policies. The most significant
      judgments in applying the Companys financial statements
      include:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Share-based payments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Share-based payments to employees are measured at the
      fair value of the instruments issued and amortized over the vesting
      periods. Share-based payments to non-employees are measured at the fair
      value of goods or services received or the fair value of the equity
      instruments issued, if it is determined the fair value of the goods or
      services cannot be reliably measured, and are recorded at the date the
      goods or services are received. The corresponding amount is recorded to
      the option reserve. The fair value of options is determined using a
      BlackScholes pricing model. The number of options expected to vest is
      reviewed and adjusted at the end of each reporting period such that the
      amount recognized for services received as consideration for the equity
      instruments granted shall be based on the number of equity instruments
      that eventually vest.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Loss per share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Basic loss per share is calculated by dividing the loss
      attributable to common shareholders by the weighted average number of
      common shares outstanding in the period. For all periods presented, the
      loss attributable to common shareholders equals the reported loss
      attributable to owners of the Company. Fully diluted loss per share is
      calculated by the treasury stock method. Under the treasury stock method,
      the weighted average number of common shares outstanding for the
      calculation of fully diluted loss per share assumes that the proceeds to
      be received on the exercise of dilutive share options and warrants are
      used to repurchase common shares at the average market price during the
      period.                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Financial instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | The Company classifies its financial instruments in the
      following categories: at fair value through profit or loss, loans and
      receivables, held-to-maturity investments, available-for-sale and
      financial liabilities. The classification depends on the purpose for which
      the financial instruments were acquired. Management determines the
      classification of its financial instruments at initial recognition. The
      Company has no financial instruments classified as fair value through
      profit or loss, held-to-maturity, or available for sale.                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Loans and receivables are non-derivative financial assets
      with fixed or determinable payments that are not quoted in an active
      market and are subsequently measured at amortized cost. They are included
      in current assets, except for maturities greater than 12 months after the
      end of the reporting period. These are classified as non-current assets.
      Cash and accounts receivable are classified as loans and
      receivables.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

8

---

|Electrameccanica Vehicles Corp.               
|----------------------------------------------
|Notes to the Financial Statements             
|(Expressed in Canadian dollars)               
|For the years ended December 31, 2016 and 2015

|2. | Significant accounting policies and basis of
      preparation(contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | Non-derivative financial liabilities (excluding financial
      guarantees) are subsequently measured at amortized cost. The Companys
      non-derivative financial liabilities consist of trade payables, customer
      deposits, convertible loan and shareholder loan.                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | Financial assets are derecognized when the rights to
      receive cash flows from the investments have expired or have been
      transferred and the Company has transferred substantially all risks and
      rewards of ownership.                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | At each reporting date, the Company assesses whether
      there is objective evidence that a financial instrument has been impaired.
      Any impairment is recorded in profit or loss. No impairment was required
      on the Companys financial instruments.                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | The Company does not have any derivative financial assets
      and liabilities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | Impairment of assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The carrying amount of the Companys assets (which
      include equipment and deferred development costs) is reviewed at each
      reporting date to determine whether there is any indication of impairment.
      If such indication exists, the recoverable amount of the asset is
      estimated in order to determine the extent of the impairment loss. An
      impairment loss is recognized whenever the carrying amount of an asset or
      its cash generating unit exceeds its recoverable amount. Impairment losses
      are recognized in the statement of comprehensive loss.      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | The recoverable amount of assets is the greater of an
      assets fair value less cost to sell and value in use. In assessing value
      in use, the estimated future cash flows are discounted to their present
      value using a pre-tax discount rate that reflects the current market
      assessments of the time value of money and the risks specific to the
      asset. For an asset that does not generate cash inflows largely
      independent of those from other assets, the recoverable amount is
      determined for the cash-generating unit to which the asset
      belongs.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | An impairment loss is only reversed if there is an
      indication that the impairment loss may no longer exist and there has been
      a change in the estimates used to determine the recoverable amount. Any
      reversal of impairment cannot increase the carrying value of the asset to
      an amount higher than the carrying amount that would have been determined
      had no impairment loss been recognized in previous years.                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | Assets that have an indefinite useful life are not
      subject to amortization and are tested annually for impairment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | Income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | Current income tax:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Current income tax assets and liabilities for the current
      period are measured at the amount expected to be recovered from or paid to
      the taxation authorities. The tax rates and tax laws used to compute the
      amount are those that are enacted or substantively enacted, at the
      reporting date, in the countries where the Company operates and generates
      taxable income.                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | Current income tax relating to items recognized directly
      in other comprehensive income or equity is recognized in other
      comprehensive income or equity and not in profit or loss. Management
      periodically evaluates positions taken in the tax returns with respect to
      situations in which applicable tax regulations are subject to
      interpretation and establishes provisions where
      appropriate.                                                                                                                                                                  

9

---

|Electrameccanica Vehicles Corp.               
|----------------------------------------------
|Notes to the Financial Statements             
|(Expressed in Canadian dollars)               
|For the years ended December 31, 2016 and 2015

|2. | Significant accounting policies and basis of
      preparation(contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Deferred income tax:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Deferred income tax is recognized, using the asset and
      liability method, on temporary differences at the reporting date arising
      between the tax bases of assets and liabilities and their carrying amounts
      for financial reporting purposes.                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The carrying amount of deferred income tax assets is
      reviewed at the end of each reporting period and recognized only to the
      extent that it is probable that sufficient taxable profit will be
      available to allow all or part of the deferred income tax asset to be
      utilized.                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Deferred income tax assets and liabilities are measured
      at the tax rates that are expected to apply to the year when the asset is
      realized or the liability is settled, based on tax rates (and tax laws)
      that have been enacted or substantively enacted by the end of the
      reporting period. Deferred income tax assets and deferred income tax
      liabilities are offset, if a legally enforceable right exists to set off
      current tax assets against current income tax liabilities and the deferred
      income taxes relate to the same taxable entity and the same taxation
      authority.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Property, Plant and Equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Property, plant and equipment is stated at historical
      cost less accumulated depreciation and accumulated impairment
      losses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Subsequent costs are included in the assets carrying
      amount or recognized as a separate asset, as appropriate, only when it is
      probable that future economic benefits associated with the item will flow
      to the Company and the cost of the item can be measured reliably. The
      carrying amount of the replaced part is derecognized. All other repairs
      and maintenance are charged to the statement of comprehensive loss during
      the financial period in which they are incurred.                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Gains and losses on disposals are determined by comparing
      the proceeds with the carrying amount and are recognized in the statement
      of comprehensive loss.                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Amortization is calculated on a straight-line method to
      write off the cost of the assets to their residual values over their
      estimated useful lives. The amortization rates applicable to each category
      of property, plant and equipment are as
      follows:                                                                                                                                                                                                                                                                                                                                                    

Class of property, plant and equipment
      Amortization rateOffice furniture and equipment
      20%Shop equipment
      20%Computer equipment
      33%Vehicles
      33%Leasehold improvement
      over term of lease


Trademarks and
  PatentsThe Company capitalizes legal fees and filing costs
  associated with the development of its trademarks and patents. Patents are
  depreciated over an estimated useful life of 5 years using the straight-line
  method, however patents with indefinite useful lives are not amortized.
  Depreciation expense for the year ended December 31, 2016 was $nil (2015 -
  $nil).

Research and Development CostsResearch costs are expensed when incurred and are stated net of
  government grants. Development costs including direct material, direct labour
  and contract service costs are capitalized as intangible assets when the Company
  can demonstrate that the technical feasibility of the project has been
  established; the Company intends to complete the asset for use or sale and has the ability to do so; the asset can generate
  probable future economic benefits; the technical and

10

---

|Electrameccanica Vehicles Corp.               
|----------------------------------------------
|Notes to the Financial Statements             
|(Expressed in Canadian dollars)               
|For the years ended December 31, 2016 and 2015

|2. | Significant accounting policies and basis of
      preparation(contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | financial resources are available to complete the
      development; and the Company can reliably measure the expenditure
      attributable to the intangible asset during its development. After initial
      recognition, internally generated intangible assets are recorded at cost
      less accumulated amortization and accumulated impairment losses. These
      costs are amortized on a straight-line basis over the estimated useful
      life. The Company did not have any development costs that met the
      capitalization criteria for the year ended December 31, 2016, or in the
      prior fiscal period.

|3. | Accounting standards issued but not yet
      effective                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | New standard IFRS 9 Financial
      Instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | This new standard is a partial replacement of IAS 39
      Financial Instruments: Recognition and Measurement. IFRS 9 uses a single
      approach to determine whether a financial asset is measured at amortized
      cost or fair value, replacing the multiple rules in IAS 39. The approach
      in IFRS 9 is based on how an entity manages its financial instruments in
      the context of its business model and the contractual cash flow
      characteristics of the financial assets.                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The new standard also requires a single impairment method
      to be used, replacing the multiple impairment methods in IAS 39. IFRS 9 is
      effective for annual periods beginning on or after January 1,
      2018.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | New standard IFRS 15 Revenue from Contracts with
      Customers                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | This new standard contains a single model that applies to
      contracts with customers and two approaches to recognizing revenue: at a
      point in time or over time. The model features a contract-based five-step
      analysis of transactions to determine whether, how much and when revenue
      is recognized. New estimates and judgmental thresholds have been
      introduced, which may affect the amount and/or timing of revenue
      recognized. IFRS 15 is effective for annual periods beginning on or after
      January 1, 2018 with early adoption permitted.                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | New standard IFRS 16 Leases                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | This new standard replaces IAS 17 Leases and the
      related interpretative guidance. IFRS 16 applies a control model to the
      identification of leases, distinguishing between a lease and a service
      contract on the basis of whether the customer controls the asset being
      leased. For those assets determined to meet the definition of a lease,
      IFRS 16 introduces significant changes to the accounting by lessees,
      introducing a single, on-balance sheet accounting model that is similar to
      current finance lease accounting, with limited exceptions for short-term
      leases or leases of low value assets. Lessor accounting is not
      substantially changed. The standard is effective for annual periods
      beginning on or after January 1, 2019, with early adoption permitted for
      entities that have adopted IFRS 15.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The Company has not early adopted these new standards and
      is currently assessing the impact that these standards will have on its
      financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Other accounting standards or amendments to existing
      accounting standards that have been issued but have future effective dates
      are either not applicable or are not expected to have a significant impact
      on the Companys financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

11

---

|Electrameccanica Vehicles Corp.               
|----------------------------------------------
|Notes to the Financial Statements             
|(Expressed in Canadian dollars)               
|For the years ended December 31, 2016 and 2015

|4. | Receivables
|-- | -----------

| |                              |   |              |  |   |              | 
| | ---------------------------- | - | ------------ |  | - | ------------ | 
| |                              |   | December 31, |  |   | December 31, | 
| |                              |   | 2016         |  |   | 2015         | 
| | GST receivable               | $ | 155,498      |  | $ | 15,864       | 
| | IRAP contribution receivable |   | 108,535      |  |   | 12,775       | 
| | GIC interest receivable      |   | 6,000        |  |   | -            | 
| | Other                        |   | 1,251        |  |   | -            | 
| |                              | $ | 271,284      |  | $ | 28,639       | 

|5. | Plant and equipment
|-- | -------------------

| |                             |   |           |  |   |           |  |   |               |  |   |              |  |   |                 |  |   |         | 
| | --------------------------- | - | --------- |  | - | --------- |  | - | ------------- |  | - | ------------ |  | - | --------------- |  | - | ------- | 
| |                             |   | Office    |  |   |           |  |   |               |  |   |              |  |   |                 |  |   |         | 
| |                             |   | Furniture |  |   |           |  |   |               |  |   |              |  |   |                 |  |   |         | 
| |                             |   | and       |  |   | Shop      |  |   | Computer      |  |   |              |  |   | Leasehold       |  |   |         | 
| |                             |   | Equipment |  |   | Equipment |  |   | **Equipment** |  |   | **Vehicles** |  |   | **Improvement** |  |   | Total   | 
| | Cost:                       |   |           |  |   |           |  |   |               |  |   |              |  |   |                 |  |   |         | 
| |                             |   |           |  |   |           |  |   |               |  |   |              |  |   |                 |  |   |         | 
| | Additions                   | $ | 13,500    |  | $ | 2,938     |  | $ |               |  | $ |              |  | $ | -               |  | $ | 16,438  | 
| | At December 31,
      2015  |   | 13,500    |  |   | 2,938     |  |   |               |  |   | -            |  |   | -               |  |   | 16,438  | 
| | Additions                   |   | 10,555    |  |   | 17,216    |  |   | 18,89         |  |   | 173,213      |  |   | 12,146          |  |   | 232,027 | 
| | At December 31,
      2016  |   | 24,055    |  |   | 20,154    |  |   | 18,89         |  |   | 173,213      |  |   | 12,146          |  |   | 248,465 | 
| |                             |   |           |  |   |           |  |   |               |  |   |              |  |   |                 |  |   |         | 
| | Amortization:               |   |           |  |   |           |  |   |               |  |   |              |  |   |                 |  |   |         | 
| |                             |   |           |  |   |           |  |   |               |  |   |              |  |   |                 |  |   |         | 
| | Charge for the
      period |   | 580       |  |   | 49        |  |   |               |  |   |              |  |   |                 |  |   | 629     | 
| | At
      December 31, 2015  |   | 580       |  |   | 49        |  |   |               |  |   |              |  |   |                 |  |   | 629     | 
| | Charge for the
      year   |   | 4,318     |  |   | 2,165     |  |   | 2,514         |  |   | 11,666       |  |   | 1,904           |  |   | 22,567  | 
| | At
      December 31, 2016  |   | 4,898     |  |   | 2,214     |  |   | 2,514         |  |   | 11,666       |  |   | 1,904           |  |   | 23,196  | 
| |                             |   |           |  |   |           |  |   |               |  |   |              |  |   |                 |  |   |         | 
| | Net book value:             |   |           |  |   |           |  |   |               |  |   |              |  |   |                 |  |   |         | 
| | At December 31,
      2015  | $ | 12,920    |  | $ | 2,889     |  | $ |               |  | $ |              |  | $ | -               |  | $ | 15,809  | 
| | At December 31, 2016        | $ | 19,157    |  | $ | 17,940    |  | $ | 16,38         |  | $ | 161,5        |  | $ | 10,242          |  | $ | 225,269 | 

|6. | Investment
|-- | ----------

On July 15, 2015, the Company entered
  into a Joint Operating Agreement (the Agreement) with Intermeccanica
  International Inc. and Henry Reisner, as amended September 19, 2016. The Joint
  Operating Agreement includes an operating lease agreement, a product assembly
  agreement and buy-out or merger agreement.

Under the buy-out agreement following a
  qualifying public listing the Company has the right to acquire all the issued
  and outstanding shares of Intermeccanica (the Call Option) for a period of 24
  months from public listing at a minimum purchase price of $5,000,000, which
  amount may be increased, dependent on future events, as set out the Agreement.
  The purchase price shall be paid in a combination of cash and shares of the
  Company. The Call Option is subject to an initial payment of $100,000 that was
  made during the year and two subsequent annual payments of $100,000 if the Call
  Option has not yet been exercised.

12

---

|Electrameccanica Vehicles Corp.               
|----------------------------------------------
|Notes to the Financial Statements             
|(Expressed in Canadian dollars)               
|For the years ended December 31, 2016 and 2015

|7. | Trade payables and accrued
      liabilities
|-- | --------------------------------------------

| |                                  |   |              |  |   |              | 
| | -------------------------------- | - | ------------ |  | - | ------------ | 
| |                                  |   | December 31, |  |   | December 31, | 
| |                                  |   | 2016         |  |   | 2015         | 
| | Trade payables                   | $ | 70,401       |  | $ | 105,378      | 
| | Due to related parties (Note 15) |   | 79,904       |  |   | 12,340       | 
| | Accrued liabilities              |   | 317,695      |  |   | 15,192       | 
| |                                  | $ | 468,000      |  | $ | 132,910      | 

|8. | Commitments                                                                                                                                                                                                                                                        
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                    
|   | Lease obligations relate to the Companys rent of office
      space and warehouse space. The term of the leases expire on November 1,
      2020 and July 1, 2020 with the Company holding an option to renew for a
      further five years for the office space.
|   |                                                                                                                                                                                                                                                                    
|   | As at December 31, 2016, future payments required under
      non-cancellable operating leases contracted for but not capitalized in the
      financial statements are as follows:                                                                                

| |                                                           |   |              |  |   |              | 
| | --------------------------------------------------------- | - | ------------ |  | - | ------------ | 
| |                                                           |   | December 31, |  |   | December 31, | 
| |                                                           |   | 2016         |  |   | 2015         | 
| | Payable not later than one year                           | $ | 221,071      |  | $ | 104,497      | 
| | Payable later than one year and not later than five years |   | 601,542      |  |   | 400,574      | 
| | Payable later than five years                             |   | -            |  |   | -            | 
| |                                                           | $ | 882,613      |  | $ | 505,071      | 

|9. | Income tax expense and deferred tax assets
      and liabilities                                           
|-- | -----------------------------------------------------------------------------------------------------------
|   |                                                                                                            
|   | A reconciliation of the expected income tax
      recovery to the actual income tax recovery is as follows:

| |                                                        |   |              |   |   |              |  
| | ------------------------------------------------------ | - | ------------ | - | - | ------------ | -
| |                                                        |   | December 31, |   |   | December 31, |  
| |                                                        |   | 2016         |   |   | 2015         |  
| | Net loss                                               | $ | (8,973,347   | ) | $ | (995,833     | )
| |                                                        |   |              |   |   |              |  
| | Statutory tax rate                                     |   | 26%          |   |   | 26%          |  
| | Expected income tax recovery at the statutory tax rate | $ | (2,333,070   | ) | $ | (258,917     | )
| | Stock-based compensation                               |   | 1,228,726    |   |   | 92,044       |  
| | Share issue costs and other                            |   | (231,643     | ) |   | -            |  
| | Temporary differences not recognized                   |   | 1,335,987    |   |   | 166,873      |  
| | Income tax
      recovery                              | $ | -            |   | $ | -            |  

The Company has the following
  deductible temporary differences for which no deferred tax asset has been
  recognized:

| |                                 |   |              |  |   |              | 
| | ------------------------------- | - | ------------ |  | - | ------------ | 
| |                                 |   | December 31, |  |   | December 31, | 
| |                                 |   | 2016         |  |   | 2015         | 
| | Non-capital loss carry-forwards | $ | 5,019,398    |  | $ | 641,189      | 
| | Property, plant and equipment   |   | 23,197       |  |   | 630          | 
| | Share issue costs               |   | 737,637      |  |   | -            | 

13

---

|Electrameccanica Vehicles Corp.               
|----------------------------------------------
|Notes to the Financial Statements             
|(Expressed in Canadian dollars)               
|For the years ended December 31, 2016 and 2015

| | $ | 5,780,231 |  | $ | 641,819 | 
| | - | --------- |  | - | ------- | 

|10. | Convertible loan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | On September 7, 2016, the Company issued an unsecured
      convertible loan for $300,000. The loan, which is non-interest bearing,
      matures on September 7, 2017. The loan is convertible, at the holders
      option at any time before maturity into units of the Company at a price of
      $1.00 per unit or will automatically convert into units of the Company at
      a price of $1.00 per unit, if prior to maturity the Company has filed an
      approved registration statement with the US Securities and Exchange
      Commission and are listed for trading on the OTCQB. Each unit consists of
      one common share and one non-transferable common share purchase warrant
      with each warrant entitling the subscriber to acquire one additional share
      at a price of $2 per warrant share for a period of five years from date of
      issue. On October 5, 2016, the Company issued 26,250 units at a price of
      $1.00 per unit with a fair value of $43,102 for third party finders fees
      (Note 11) regarding the convertible loan.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | The fair value of the liability component was calculated
      using a market interest rate for an equivalent non-convertible loan, which
      the Company determined to be 15%. The residual amount, representing the
      value of the equity conversion option, is included in shareholders equity
      as the equity component of the convertible loan. The implicit interest
      rate for the convertible loan is 15% per annum. The carrying value of the
      liability component is being accreted to the face value of the convertible
      loan over the period from issuance to the maturity date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

| |                                                         |   |              |   |   |              | 
| | ------------------------------------------------------- | - | ------------ | - | - | ------------ | 
| |                                                         |   | December 31, |   |   | December 31, | 
| |                                                         |   | 2016         |   |   | 2015         | 
| | Proceeds from issue of convertible loan                 | $ | 300,000      |   | $ | -            | 
| | Amount allocated to equity on issue of convertible loan |   | (39,130      | ) |   | -            | 
| | Convertible loan issue costs                            |   | (43,102      | ) |   | -            | 
| | Interest accretion
      expense                        |   | 25,908       |   |   | -            | 
| |                                                         | $ | 243,676      |   | $ | -            | 

|11. | Share capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | Authorized share capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | Unlimited number of common shares without par
      value.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | On June 22, 2016, the Company completed a stock split of
      one pre-split common share for five post-split shares. All information
      related to common shares, options and warrants presented in these
      financial statements and accompanying notes have been retroactively
      adjusted to reflect the increased number of common shares resulting from
      the stock split.                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | Issued share capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | At December 31, 2016 the Company had 41,783,587 issued
      and outstanding common shares (2015  26,783,625).                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | Private placements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | On February 16, 2015, the Company completed a placement
      of 24,850,000 common shares at a price of $0.0002 for gross proceeds of
      $4,970. On February 16, 2015, the Company completed a private placement of
      500,000 units at a price of $0.0002 for gross proceeds of $100. Each unit
      consists of one common share and one non-transferable common share
      purchase warrant with each warrant entitling the subscriber to acquire one additional share at a price
      of $0.40 per warrant share until February 16, 2020.

14

---

|Electrameccanica Vehicles Corp.               
|----------------------------------------------
|Notes to the Financial Statements             
|(Expressed in Canadian dollars)               
|For the years ended December 31, 2016 and 2015

|11. | Share capital(contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | On June 12, 2015, the Company completed a private
      placement of 50,000 units, at a price of $0.20 per unit, for gross
      proceeds of $10,000. Each unit consists of one common share and one
      non-transferable common share purchase warrant with each warrant entitling
      the subscriber to acquire one additional share at a price of $0.40 per
      warrant share until June 12, 2020.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | On June 15, 2015, the Company completed a private
      placement of 50,000 units, at a price of $0.20 per unit, for gross
      proceeds of $10,000. Each unit consists of one common share and one
      non-transferable common share purchase warrant with each warrant entitling
      the subscriber to acquire one additional share at a price of $0.40 per
      warrant share until June 15, 2020.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | On June 26, 2015, the Company completed a private
      placement of 375,000 units, at a price of $0.20 per unit, for gross
      proceeds of $75,000. Each unit consists of one common share and one non-
      transferable common share purchase warrant with each warrant entitling the
      subscriber to acquire one additional share at a price of $0.40 per warrant
      share until June 26, 2020.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | On July 7, 2015, the Company completed a private
      placement of 125,000 units, at a price of $0.20 per unit, for gross
      proceeds of $25,000. Each unit consists of one common share and one
      non-transferable common share purchase warrant with each warrant entitling
      the subscriber to acquire one additional share at a price of $0.40 per
      warrant share until July 7, 2020.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | On August 19, 2015, the Company completed a private
      placement of 62,500 units, at a price of $0.40 per unit, for gross
      proceeds of $25,000. Each unit consists of one common share and one non-
      transferable share purchase warrant with each warrant entitling the
      subscriber to acquire one additional share at a price of $1 per warrant
      share until August 19, 2020.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | On December 1, 2015, the Company completed a private
      placement of 340,500 units, at a price of $0.40 per unit, for gross
      proceeds of $136,200. Each unit consists of one share and one non-
      transferable share purchase warrant with each warrant entitling the
      subscriber to acquire one additional share at a price of $1 per warrant
      share until December 1, 2020.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | On December 31, 2015, the Company completed a private
      placement of 430,625 units, at a price of $0.40 per unit, for gross
      proceeds of $172,250. Each unit consists of one share and one non-
      transferable share purchase warrant with each warrant entitling the
      subscriber to acquire one additional share at a price of $1 per warrant
      share until December 31, 2020.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | On January 22, 2016, the Company completed a private
      placement of 3,037,500 units at a price of $0.40 per unit for gross cash
      proceeds of $1,215,000. On this date, the Company also issued 125,000
      shares as partial settlement of a shareholder loan in the amount of
      $50,000 (note 15). Each unit consists of one common share and one
      non-transferable common share purchase warrant with each warrant entitling
      the subscriber to acquire one additional share at a price of $1 per
      warrant share until January 22, 2021. On March 7, 2016, the Company issued
      750,000 units at a price of $0.40 per unit for third party finders fees
      relating to this private placement. Each unit consists of one common share
      and one non-transferable common share purchase warrant with each warrant
      entitling the subscriber to acquire one additional share at a price of $1
      per warrant share until March 7, 2021. The fair value of these units was
      calculated as $482,330.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | On February 29, 2016, the Company completed a private
      placement of 187,500 units at a price of $0.40 per unit for gross proceeds
      of $75,000. Each unit consists of one common share and one
      non-transferable common share purchase warrant with each warrant entitling
      the subscriber to acquire one additional share at a price of $1 per
      warrant share until February 29, 2021.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

15

---

|Electrameccanica Vehicles Corp.               
|----------------------------------------------
|Notes to the Financial Statements             
|(Expressed in Canadian dollars)               
|For the years ended December 31, 2016 and 2015

|11. | Share capital(contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | On May 16, 2016, the Company completed a private
      placement of 730,200 units at a price of $1.00 per unit for gross proceeds
      of $730,200. Each unit consists of one common share and one
      non-transferable common share purchase warrant with each warrant entitling
      the subscriber to acquire one additional share at a price of $2 per
      warrant share until May 16, 2021. On October 5, 2016, the Company issued
      58,010 units at a price of $1.00 per unit with a fair value of $95,252 for
      third party finders fees relating to this private placement. The Company
      incurred share issue costs of $20,662 relating to this private
      placement.                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | On June 21, 2016, the Company completed a private
      placement of 475,000 units at a price of $1.00 per unit for gross proceeds
      of $475,000. Each unit consists of one common share and one
      non-transferable common share purchase warrant with each warrant entitling
      the subscriber to acquire one additional share at a price of $2 per
      warrant share until June 21, 2021. On October 5, 2016, the Company issued
      45,000 units at a price of $1.00 per unit with a fair value of $73,890 for
      third party finders fees relating to this private placement. The Company
      incurred share issue costs of $5,391 relating to this private
      placement.               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | On August 21, 2016, the Company completed a private
      placement of 25,000 units at a price of $1.00 per unit for gross proceeds
      of $25,000. Each unit consists of one common share and one
      non-transferable common share purchase warrant with each warrant entitling
      the subscriber to acquire one additional share at a price of $2 per
      warrant share until August 21, 2021. The Company incurred share issue
      costs of $8,669 relating to this private placement.                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | On September 7, 2016, the Company completed a private
      placement of 115,000 units at a price of $1.00 per unit for gross proceeds
      of $115,000. Each unit consists of one common share and one
      non-transferable common share purchase warrant with each warrant entitling
      the subscriber to acquire one additional share at a price of $2 per
      warrant share until September 7, 2021. On October 5, 2016, the Company
      issued 10,502 units at a price of $1.00 per unit with a fair value of
      $17,244 for third party finders fees relating to this private placement.
      The Company incurred share issue costs of $10,652 relating to this private
      placement.      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | On October 5, 2016, the Company completed a private
      placement of 105,000 units at a price of $1.00 per unit for gross proceeds
      of $105,000. Each unit consists of one common share and one
      non-transferable common share purchase warrant with each warrant entitling
      the subscriber to acquire one additional share at a price of $2 per
      warrant share until October 5, 2021. On October 5, 2016, the Company
      issued 10,000 units at a price of $1.00 per unit with a fair value of
      $16,420 for third party finders fees relating to this private
      placement.                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | On October 28, 2016, the Company completed a private
      placement of 2,000,000 units at a price of $1.00 per unit for gross
      proceeds of $2,000,000. Each unit consists of one common share and one
      non-transferable common share purchase warrant with each warrant entitling
      the subscriber to acquire one additional share at a price of $2 per
      warrant share until October 28, 2021. On November 21, 2016, the Company
      issued 200,000 units at a price of $1.00 per unit with a fair value of
      $328,732 for third party finders fees relating to this private placement.
      The Company incurred share issue costs of $11,125 relating to this private
      placement.

16

---

|Electrameccanica Vehicles Corp.               
|----------------------------------------------
|Notes to the Financial Statements             
|(Expressed in Canadian dollars)               
|For the years ended December 31, 2016 and 2015

|11. | Share capital(contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | On October 28, 2016, the Company completed a private
      placement of 2,400,000 units at a price of $0.833333 per unit for gross
      proceeds of $2,000,000. Each unit consists of one common share and 1.66667
      non-transferable common share purchase warrants with each warrant
      entitling the subscriber to acquire one additional share at a price of $2
      per warrant share until October 28, 2021. The fair value of these units
      was calculated as $2,400,000, and a share-based payment expense of
      $400,000 was recorded relating to this private placement. On November 21,
      2016, the Company issued 200,000 units at a price of $1.00 per unit with a
      fair value of $328,732 for third party finders fees relating to this
      private placement. The Company incurred share issue costs of $11,125
      relating to this private placement.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | On November 21, 2016, the Company completed a private
      placement of 4,500,000 units at a price of $0.3634 per unit for gross cash
      proceeds of $1,635,318. Each unit consists of one common share and one
      non-transferable common share purchase warrant with each warrant entitling
      the subscriber to acquire one additional share at a price of $2 per
      warrant share until November 21, 2021. The fair value of these units was
      calculated as $4,500,000, and a share- based payment expense of $2,864,681
      was recorded relating to this private placement. The Company paid cash
      third party finders fees of $163,532 relating to this private placement.
      The Company incurred share issue costs of $15,815 relating to this private
      placement.                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Basic and fully diluted loss per
      share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | The calculation of basic and fully diluted loss per share
      for the year ended December 31, 2016 was based on the loss attributable to
      common shareholders of $8,973,347 and the weighted average number of
      common shares outstanding of 32,684,868. Fully diluted loss per share did
      not include the effect of stock options and warrants as the effect would
      be anti-dilutive.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Stock options                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | The Company has adopted an incentive stock option plan,
      which provides that the Board of Directors of the Company may from time to
      time, in its discretion, grant to directors, officers, employees and
      technical consultants to the Company, non-transferable stock options to
      purchase common shares, provided that the number of common shares reserved
      for issuance will not exceed 60,000,000. Such options will be exercisable
      for a period of up to 7 years from the date of grant. Options may be
      exercised no later than 90 days following cessation of the optionees
      position with the Company.                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Options granted vest one-quarter on the first anniversary
      subsequent to the grant date and the remaining three-quarters vest in
      thirty-six (36) equal monthly instalments commencing on the first
      anniversary of the grant date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | On exercise, each option allows the holder to purchase
      one common share of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

17

---

|Electrameccanica Vehicles Corp.               
|----------------------------------------------
|Notes to the Financial Statements             
|(Expressed in Canadian dollars)               
|For the years ended December 31, 2016 and 2015

|11. | Share capital(contd)                                                                         
|--- | ----------------------------------------------------------------------------------------------
|    |                                                                                               
|    | Stock options(contd)                                                                         
|    |                                                                                               
|    | The changes in options during the years ended December
      31, 2016 and 2015 are as follows:

| |                                     |  |                   |   |   |                   | 
| | ----------------------------------- |  | ----------------- | - | - | ----------------- | 
| |                                     |  | December 31, 2016 |   |   | December 31, 2015 | 
| |                                     |  |                   |   |   | Weighted          | 
| |                                     |  | Number of         |   |   | average           | 
| |                                     |  | options           |   |   | exercise price    | 
| | Options outstanding,                |  |                   |   |   |                   | 
| | beginning                           |  | 56,150,000        |   | $ | 0.19              | 
| | Options granted                     |  | 100,000           |   |   | 0.85              | 
| | Options expired
      and forfeited |  | (75,000           | ) |   | 0.40              | 
| | Options outstanding, ending         |  | 56,175,000        |   | $ | 0.19              | 

Details of options outstanding as at
  December 31, 2015 are as follows:

| |                      |  |                  |  |  |                   | 
| | -------------------- |  | ---------------- |  |  | ----------------- | 
| |                      |  | Weighted average |  |  | Number of options | 
| | Exercise
      price |  | contractual life |  |  | outstanding       | 
| | $0.15                |  | 6.45 years       |  |  | 45,000,000        | 
| | $0.15                |  | 6.62 years       |  |  | 2,675,000         | 
| | $0.40                |  | 6.95 years       |  |  | 8,475,000         | 
| |                      |  | 6.54
      years |  |  | 56,150,000        | 

Details of options outstanding as at
  December 31, 2016 are as follows:

| |                |  |                  |  |  |                  |  |  |                   | 
| | -------------- |  | ---------------- |  |  | ---------------- |  |  | ----------------- | 
| |                |  | Weighted average |  |  | Number of option |  |  | Number of options | 
| | Exercise price |  | contractual life |  |  | outstandin       |  |  | exercisable       | 
| | $              |  | 5.45 years       |  |  | 45,000,00        |  |  | 16,875,000        | 
| | $              |  | 5.62 years       |  |  | 2,675,00         |  |  | 891,667           | 
| | $              |  | 5.94 years       |  |  | 8,400,00         |  |  | 2,100,000         | 
| | $              |  | 6.18 years       |  |  | 25,00            |  |  |                   | 
| | $              |  | 6.47 years       |  |  | 75,00            |  |  |                   | 
| |                |  | 5.75
      years |  |  | 56,175,00        |  |  | 19,866,667        | 

The weighted average grant date fair
  value of options granted during the year ended December 31, 2016 was $0.63 (2015
  $0.05) . The fair value was determined using the Black-Scholes option pricing
  model using the following weighted average assumptions:

| |                          |  |                              | 
| | ------------------------ |  | ---------------------------- | 
| |                          |  | Year ended December 31, 2016 | 
| | Expected life of options |  | 5 years                      | 
| | Annualized volatility    |  | 100%                         | 
| | Risk-free interest rate  |  | 0.62% - 0.68%                | 
| | Dividend rate            |  | 0%                           | 

Volatility was determined based on the
  historical volatility of a similar Companys share price over a period of time
  equivalent to the expected life of the option granted. During the year ended
  December 31, 2016, the Company recognized stock-based compensation expense of
  $962,458 (2015 - $354,015).

18

---

|Electrameccanica Vehicles Corp.               
|----------------------------------------------
|Notes to the Financial Statements             
|(Expressed in Canadian dollars)               
|For the years ended December 31, 2016 and 2015

|11. | Share capital(contd)
|--- | ---------------------

Warrants

On exercise, each warrant allows the
  holder to purchase one common share of the Company. The fair value of the
  warrants issued as part of the third party finders fee at issue date on March
  7, 2016 was $182,330, on October 5, 2016 was $96,146, and on November 21, 2016
  was $257,464 as calculated using the Black-Scholes option pricing model with the
  same assumptions used for stock options.

The changes in warrants during the
  years ended December 31, 2016 and 2015 are as follows:

| |                                 |  |                   |  |   |                   | 
| | ------------------------------- |  | ----------------- |  | - | ----------------- | 
| |                                 |  | December 31, 2016 |  |   | December 31, 2015 | 
| |                                 |  |                   |  |   | Weighted          | 
| |                                 |  | Number of         |  |   | average           | 
| |                                 |  | warrants          |  |   | exercise price    | 
| | Warrants outstanding, beginning |  | 1,933,625         |  | $ | 0.66              | 
| | Warrants issued                 |  | 16,599,962        |  |   | 1.75              | 
| | Warrants outstanding, ending    |  | 18,533,587        |  | $ | 1.64              | 

The changes in warrants outstanding
  during the year ended December 31, 2016 is as follows:

At December 31, 2016, all warrants
  outstanding were exercisable. Details of warrants outstanding as at December 31,
  2016 are as follows:

| |                      |                  |                   
| | -------------------- | ---------------- | ------------------
| |                      | Weighted average | Number of warrants
| | Exercise
      price | contractual life | outstanding       
| | $0.40-$2.00          | 4.53 years       | 18,533,587        

|12. | Reserve                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | Share-based payment reserve                                                                                                                                                                                                                                                                                                                                                                                            
|    | The share-based payment reserve records items recognized
      as stock-based compensation expense and other share-based payments until
      such time that the stock options or warrants are exercised, at which time
      the corresponding amount will be transferred to share capital. If the
      options, or warrants expire unexercised, the amount remains in the
      share-based payment reserve account.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                        
|13. | General and administrative
      expenses                                                                                                                                                                                                                                                                                                                                                                              

| |                      |   |              |  |   |              | 
| | -------------------- | - | ------------ |  | - | ------------ | 
| |                      |   | Year ended   | 
| |                      |   | December 31, |  |   | December 31, | 
| |                      |   | 2016         |  |   | 2015         | 
| | Rent                 | $ | 141,957      |  | $ | 17,936       | 
| | Office Expenses      |   | 113,158      |  |   | 18,013       | 
| | Legal & Professional |   | 643,725      |  |   | 78,660       | 
| | Consulting fees      |   | 186,437      |  |   | 11,985       | 
| | Salaries             |   | 120,558      |  |   | 6,276        | 
| |                      | $ | 1,205,835    |  | $ | 132,870      | 

20

---

|Electrameccanica Vehicles Corp.               
|----------------------------------------------
|Notes to the Financial Statements             
|(Expressed in Canadian dollars)               
|For the years ended December 31, 2016 and 2015

|14. | Research and development
      expenses
|--- | ---------------------------------------

| |                   |   |              |   |   |              |  
| | ----------------- | - | ------------ | - | - | ------------ | -
| |                   |   | Year ended   |  
| |                   |   | December 31, |   |   | December 31, |  
| |                   |   | 2016         |   |   | 2015         |  
| | Labour            | $ | 1,715,562    |   | $ | 382,047      |  
| | Materials         |   | 1,266,730    |   |   | 117,537      |  
| | Government grants |   | (203,997     | ) |   | (12,775      | )
| |                   | $ | 2,778,295    |   | $ | 486,809      |  

|15. | Related party transactions                            
|--- | ------------------------------------------------------
|    |                                                       
|    | Related party balances                                
|    |                                                       
|    | The following amounts are due to related
      parties

| |                                       |   |              |  |   |              | 
| | ------------------------------------- | - | ------------ |  | - | ------------ | 
| |                                       |   | December 31, |  |   | December 31, | 
| |                                       |   | 2016         |  |   | 2015         | 
| | Shareholder loan                      | $ | -            |  | $ | 185,000      | 
| | Due to related
      parties (Note 7) |   | 79,904       |  |   | 12,340       | 
| |                                       | $ | 79,904       |  | $ | 197,340      | 

These amounts are unsecured,
  non-interest bearing and have no fixed terms of repayment.

On January 22, 2016, the Company issued
  125,000 units at a price of $0.40 per unit for $50,000 as partial settlement of
  the shareholder loan payable to the CEO (Note 11).

Key management personnel
  compensation

| |                                |   |              |  |   |              | 
| | ------------------------------ | - | ------------ |  | - | ------------ | 
| |                                |   | Year ended   | 
| |                                |   | December 31, |  |   | December 31, | 
| |                                |   | 2016         |  |   | 2015         | 
| | Consulting fees                | $ | 136,500      |  | $ | -            | 
| | Salary                         |   | 45,000       |  |   | -            | 
| | Deferred salary for CEO        |   | 30,000       |  |   | -            | 
| | Stock-based
      compensation |   | 1,238,043    |  |   | 338,883      | 
| |                                | $ | 1,449,513    |  | $ | 338,883      | 

|16. | Financial instruments and financial risk
      management                                                                                                                                                                                                                                                                                           
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                     
|    | The Company is exposed in varying degrees to a variety of
      financial instrument related risks. The Board of Directors approves and
      monitors the risk management processes, inclusive of controlling and
      reporting structures. The type of risk exposure and the way in which such
      exposure is managed is provided as follows:

21

---

|Electrameccanica Vehicles Corp.               
|----------------------------------------------
|Notes to the Financial Statements             
|(Expressed in Canadian dollars)               
|For the years ended December 31, 2016 and 2015

|16. | Financial instruments and financial risk management(contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | Credit risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | Credit risk is the risk that one party to a financial
      instrument will fail to discharge an obligation and cause the other party
      to incur a financial loss. The Companys primary exposure to credit risk
      is on its cash and cash equivalents held in bank accounts. The majority of
      cash is deposited in bank accounts held with major financial institutions
      in Canada. As most of the Companys cash is held by one financial
      institution there is a concentration of credit risk. This risk is managed
      by using major financial institutions that are high credit quality
      financial institutions as determined by rating agencies. The Companys
      secondary exposure to risk is on its other receivables. This risk is
      minimal as receivables consist primarily of government grant and
      refundable government goods and services taxes.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | Liquidity risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | Liquidity risk is the risk that the Company will not be
      able to meet its financial obligations as they fall due. The Company has a
      planning and budgeting process in place to help determine the funds
      required to support the Companys normal operating requirements on an
      ongoing basis. The Company ensures that there are sufficient funds to meet
      its short-term business requirements, taking into account its anticipated
      cash flows from operations and its holdings of cash and cash
      equivalents.                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | Historically, the Company's source of funding has been
      shareholder loans and the issuance of equity securities for cash,
      primarily through private placements. The Companys access to financing is
      always uncertain. There can be no assurance of continued access to
      significant equity funding.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | The following is an analysis of the contractual
      maturities of the Companys non-derivative financial liabilities as at
      December 31, 2016 and 2015:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

| |                      |   |            |  |   |             |  |   |            | 
| | -------------------- | - | ---------- |  | - | ----------- |  | - | ---------- | 
| | At December 31, 2016 |   | Within one |  |   | Between one |  |   |            | 
| |                      |   | year       |  |   | and five    |  |   | More than  | 
| |                      |   |            |  |   | years       |  |   | five years | 
| | Trade payables       | $ | 150,305    |  | $ | -           |  | $ | -          | 
| | Customer deposits    |   | 169,500    |  |   | -           |  |   | -          | 
| | Convertible loan     |   | 243,676    |  |   |             |  |   |            | 
| |                      | $ | 563,481    |  | $ | -           |  | $ | -          | 

| |                      |   |            |  |   |             |  |   |            | 
| | -------------------- | - | ---------- |  | - | ----------- |  | - | ---------- | 
| | At December 31, 2015 |   | Within one |  |   | Between one |  |   |            | 
| |                      |   | year       |  |   | and five    |  |   | More than  | 
| |                      |   |            |  |   | years       |  |   | five years | 
| | Trade payables       | $ | 117,718    |  | $ | -           |  | $ | -          | 
| | Customer deposits    |   | 28,506     |  |   | -           |  |   | -          | 
| | Shareholder loan     |   | 185,000    |  |   | -           |  |   | -          | 
| |                      | $ | 331,224    |  | $ | -           |  | $ | -          | 

Foreign exchange
  riskForeign currency risk is the risk that the fair values of future
  cash flows of a financial instrument will fluctuate because they are denominated
  in currencies that differ from the respective functional currency. The Company
  is exposed to currency risk as it incurs expenditures that are denominated in US
  dollars while its functional currency is the Canadian dollar. The Company does
  not hedge its exposure to fluctuations in foreign exchange rates.

22

---

|Electrameccanica Vehicles Corp.               
|----------------------------------------------
|Notes to the Financial Statements             
|(Expressed in Canadian dollars)               
|For the years ended December 31, 2016 and 2015

|16. | Financial instruments and financial risk management(contd)                                                                                   
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                               
|    | The following is an analysis of Canadian dollar
      equivalent of financial assets and liabilities that are denominated in US
      dollars:

| |                           |   |              |   |   |              |  
| | ------------------------- | - | ------------ | - | - | ------------ | -
| |                           |   | December 31, |   |   | December 31, |  
| |                           |   | 2016         |   |   | 2015         |  
| | Cash and cash equivalents | $ | 98,762       |   | $ | 43,638       |  
| | Trade payables            |   | (4,804       | ) |   | (18,084      | )
| |                           | $ | 93,958       |   | $ | 25,554       |  

Based on the above net exposures, as at
  December 31, 2016, a 10% change in the US dollars to Canadian dollar exchange
  rate would impact the Companys net loss by $6,992 (December 31, 2015 - $2,000).

Interest rate riskInterest rate risk is the risk that the fair value of future cash
  flows of a financial instrument will fluctuate because of changes in market
  interest rates. The Company is exposed to interest rate risk on its cash
  equivalents as these instruments have original maturities of twelve months or
  less and are therefore exposed to interest rate fluctuations on renewal. A 1%
  change in market interest rates would have an impact on the Companys net loss
  of $39,163 for the year ended December 31, 2016 (December 31, 2015 - $1,064)

Classification of financial
  instrumentsFinancial assets included in the statement of financial
  position are as follows:

| |                           |   |              |  |   |              | 
| | ------------------------- | - | ------------ |  | - | ------------ | 
| |                           |   | December 31, |  |   | December 31, | 
| |                           |   | 2016         |  |   | 2015         | 
| | Loans and receivables:    |   |              |  |   |              | 
| | Cash and cash equivalents | $ | 3,916,283    |  | $ | 106,357      | 
| | Other receivables         |   | 271,284      |  |   | 28,639       | 
| |                           | $ | 4,187,567    |  | $ | 134,996      | 

Financial liabilities included in the
  statement of financial position are as follows:

| |                                       |   |              |  |   |              | 
| | ------------------------------------- | - | ------------ |  | - | ------------ | 
| |                                       |   | December 31, |  |   | December 31, | 
| |                                       |   | 2016         |  |   | 2015         | 
| | Non-derivative financial liabilities: |   |              |  |   |              | 
| | Trade payable                         | $ | 150,305      |  | $ | 117,718      | 
| | Customer deposits                     |   | 169,500      |  |   | 28,506       | 
| | Convertible loan                      |   | 243,676      |  |   | -            | 
| | Shareholder loan                      |   | -            |  |   | 185,000      | 
| |                                       | $ | 563,481      |  | $ | 331,224      | 

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|Electrameccanica Vehicles Corp.               
|----------------------------------------------
|Notes to the Financial Statements             
|(Expressed in Canadian dollars)               
|For the years ended December 31, 2016 and 2015

|16. | Financial instruments and financial risk management(contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | Fair value                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | The fair value of the Companys financial assets and
      liabilities approximates the carrying amount. Financial instruments
      measured at fair value are classified into one of three levels in the fair
      value hierarchy according to the relative reliability of the inputs used
      to estimate the fair values. The three levels of the fair value hierarchy
      are:                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|17. | Capital management                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | The Companys policy is to maintain a strong capital base
      so as to safeguard the Companys ability to maintain its business and
      sustain future development of the business. The capital structure of the
      Company consists of equity. There were no changes in the Companys
      approach to capital management during the year. The Company is not subject
      to any externally imposed capital requirements.                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|18. | Subsequent events                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | On February 8, 2017, the Company completed a private
      placement of 320,000 units at a price of $1.00 per unit for gross proceeds
      of $320,000. Each unit consists of one common share and one
      non-transferable common share purchase warrant with each warrant entitling
      the subscriber to acquire one additional share at a price of $2 per
      warrant share until February 8, 2022. The Company has agreed to pay third
      party finders fees of $22,000 relating to this private
      placement.                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | On February 17, 2017 the Company granted stock options to
      acquire 1,020,000 common shares of the Company at an exercise price of
      $1.00 per share for a period of 7 years. The majority of the options vest
      over a 48 month period while an option for 250,000 shares vests over a 41
      month period and an option for 225,000 shares vests over a 45 month
      period.                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | On March 29, 2017, the Company completed a private
      placement of 108,000 units at a price of $1.00 per unit for gross proceeds
      of $108,000. Each unit consists of one common share and one
      non-transferable common share purchase warrant with each warrant entitling
      the subscriber to acquire one additional share at a price of $2 per
      warrant share until March 29, 2022. On March 29, 2017, the Company issued
      5,000 units at a price of $1.00 per unit for third party finders fees
      relating to this private placement.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | On March 30, 2017, the Company completed a private
      placement of 100,000 units at a price of $1.00 per unit for gross proceeds
      of $100,000. Each unit consists of one common share and one
      non-transferable common share purchase warrant with each warrant entitling
      the subscriber to acquire one additional share at a price of $2 per
      warrant share until March 30, 2022. The Company has agreed to pay cash
      third party finders fees of $10,000 relating to this private
      placement.                                     

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