Document:

EX-4.1

 Exhibit 4.1 
 

 
 Annual Information Form 

SKYLIGHT HEALTH GROUP INC. 

For the year ended December 31, 2020 

Dated as of April 19, 2021 

 TABLE OF CONTENTS 

 

					
	 PRELIMINARY NOTES
	  	 	1	 
	 FORWARD-LOOKING INFORMATION
	  	 	1	 
	 NON-IFRS MEASURES
	  	 	2	 
	 CORPORATE STRUCTURE
	  	 	2	 
	 GENERAL DEVELOPMENT OF THE BUSINESS
	  	 	3	 
	 DESCRIPTION OF THE BUSINESS
	  	 	10	 
	 RISK FACTORS
	  	 	13	 
	 DIVIDENDS
	  	 	21	 
	 DESCRIPTION OF CAPITAL STRUCTURE
	  	 	21	 
	 MARKET FOR SECURITIES
	  	 	21	 
	 ESCROWED SECURITIES AND SECURITIES SUBJECT TO CONTRACTUAL RESTRICTION ON TRANSFER
	  	 	22	 
	 DIRECTORS AND OFFICERS
	  	 	23	 
	 PROMOTERS
	  	 	26	 
	 LEGAL PROCEEDINGS AND REGULATORY ACTIONS
	  	 	26	 
	 INTERESTS OF MANAGEMENT IN MATERIAL TRANSACTIONS
	  	 	27	 
	 TRANSFER AGENT AND REGISTRAR
	  	 	27	 
	 MATERIAL CONTRACTS
	  	 	27	 
	 EXPERTS AND INTERESTS OF EXPERTS
	  	 	27	 
	 ADDITIONAL INFORMATION
	  	 	27	 
	 SCHEDULE A AUDIT COMMITTEE DISCLOSURE
	  	 	28	 

 PRELIMINARY NOTES 

This Annual Information Form (“AIF”) is prepared in the form prescribed by National Instrument
51-102 Continuous Disclosure Obligations of the Canadian Securities Administrators. All dollar amounts in this AIF are expressed in Canadian dollars unless otherwise indicated. All information in this
AIF is as of December 31, 2020, unless otherwise indicated. 
 FORWARD-LOOKING INFORMATION 

Certain information contained in this AIF and any documents incorporated by reference herein may constitute forward-looking statements, as
such term is defined under Canadian, U.S. and any other applicable securities laws. These statements relate to future events or future performance and reflect management’s expectations and assumptions regarding the growth, results of
operations, performances and business prospects and opportunities of the Company. All statements other than statements of historical fact are forward-looking statements. The use of any of the words “anticipate”, “plan”,
“continue”, “estimate”, “expect”, “may”, “intend”, “will”, “project”, “could”, “believe”, “predict”, “potential”, “should” or the
negative of these terms or other similar expressions are intended to identify forward-looking statements. In particular, information regarding the Company’s future operating results and economic performance is forward-looking information. These
statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance, achievements or events to differ materially from those anticipated, discussed or implied in such forward-looking statements. The
Company believes the expectations reflected in such forward- looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this AIF and any documents
incorporated by reference herein should be considered carefully and investors should not place undue reliance on them as the Company cannot assure investors that actual results will be consistent with these forward-looking statements. These
statements speak only as of the date of this AIF or the particular document incorporated by reference herein. Such statements are based on a number of assumptions which may prove to be incorrect, including, but not limited to, assumptions about:

  

	 	•	 	 general business and economic conditions; 

 

	 	•	 	 the intentions, plans and future actions of the Company; 

 

	 	•	 	 the business and future activities of the Company after the date of this AIF; 

 

	 	•	 	 market position, ability to compete and future financial or operating performance of the Company after the
date of this Prospectus; 

  

	 	•	 	 anticipated developments in operations; the future demand for the products and services developed, produced,
supplied, or distributed by the Company; 

  

	 	•	 	 the timing and amount of estimated research & development expenditure in respect of the business of
the Company; 

  

	 	•	 	 operating revenue, operating expenditures; success of marketing activities; estimated budgets;

  

	 	•	 	 currency fluctuations; 

 

	 	•	 	 the sufficiency of the Company’s working capital; 

 

	 	•	 	 requirements for additional capital; 

 

	 	•	 	 risks associated with obtaining and maintaining the necessary government permits and licenses related to the
business 

  

	 	•	 	 government regulation; limitations on insurance coverage; the timing and possible outcome of regulatory
matters; goals; strategies; future growth; the adequacy of financial resources; and other events or conditions that may occur in the future; 

  

	 	•	 	 compliance with environmental, health, safety and other laws and regulations; 

 

	 	•	 	 the ability to attract and retain skilled staff; 

  
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	 	•	 	 market competition; and 

 

	 	•	 	 the potential impact of the COVID-19 pandemic on the Company and/or
its operations, and the healthcare industry and currency fluctuations. 

 Forward-looking statements are based on the
beliefs of the management of the Company, as well as on assumptions, which such management believes to be reasonable based on information available at the time such statements were made. However, by their nature, forward-looking statements are based
on assumptions and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied
by the forward-looking statements. Forward-looking statements are subject to a variety of risks, uncertainties and other factors which could cause actual events or results to differ from those expressed or implied by the forward-looking statements,
including, without limitation those risks outlined under the heading Risk Factors in this AIF. 
 The list of risk factors set out in
this AIF is not exhaustive of the factors that may affect any forward-looking statements of the Company. The Company does not intend, and does not assume any obligation, to update any forward-looking statements, other than as required by applicable
law. For all of these reasons, the security holders of the Company should not place undue reliance on forward-looking statements. 
 Market and Industry
Data 
 This AIF includes market and industry data that has been obtained from third party sources, including industry publications. The
Company believes that the industry data is accurate and that its estimates and assumptions are reasonable, but there is no assurance as to the accuracy or completeness of this data. Third party sources generally state that the information contained
therein has been obtained from sources believed to be reliable, but there is no assurance as to the accuracy or completeness of included information. Although the data is believed to be reliable, the Company has not independently verified any of the
data from third-party sources referred to in this AIF or ascertained the underlying economic assumptions relied upon by such sources. 
 Non-IFRS Measures 
 This AIF contains references to certain measures that are not defined under
International Financial Reporting Standards (“IFRS”). These non-IFRS measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely
to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement IFRS measures by providing further understanding of the Company’s results of operations from
management’s perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of the Company’s financial information reported under IFRS. 

The Company uses non-IFRS measures, including EBITDA and adjusted EBITDA to provide investors with
supplemental measures of its operating performance and thus highlight trends in its core business that may not otherwise be apparent when relying solely on IFRS measures. The Company believes that investors, securities analysts and other interested
parties frequently use non-IFRS measures in the evaluation of issuers. Management also uses non-IFRS measures in order to facilitate operating performance comparisons
from period to period, and assess the Company’s ability to meet its future debt service, capital expenditure and working capital requirements. 

Please refer to the Company’s annual Management Discussion and Analysis for the year ended December 31, 2020 for the definitions of
EBITDA and adjusted EBITDA presented by the Company and the reconciliation, where applicable, to the most directly comparable IFRS measure. 
 CORPORATE
STRUCTURE 
 Name, Address and Incorporation 

Skylight Health Group Inc. (formerly, CB2 Insights Inc.) (the “Company” or “Skylight”) was incorporated on
December 27, 2017 under the Canada Business Corporations Act (the “CBCA”) as a wholly-owned 

  
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subsidiary of Telferscot Resources Inc. (“Telferscot”). On February 16, 2018 the Company entered into an arrangement agreement with Telferscot and other subsidiaries of
Telferscot. On March 18, 2018 the Company filed articles of amendment to effect a change in its share capital. Subsequently, on April 9, 2018 the Company completed an arrangement under the provisions of the CBCA and thereby became a
reporting issuer in the provinces of British Columbia, Alberta and Manitoba. Pursuant to articles of amendment dated December 20, 2018, the Company changed its name to “CB2 Insights Inc.” and consolidated its issued and outstanding
common shares (a “Common Share”) on the basis of one (1) post-consolidation Common Share for every sixteen and one-half (16.5) pre-consolidation Common Shares. On February 27, 2019,
the Company completed a reverse takeover (“RTO”) with MVC Technologies Inc. The transaction was effected by way of a “three-cornered” amalgamation, whereby a wholly-owned subsidiary of the Company amalgamated with MVC
under the provisions of the Business Corporations Act (Ontario) (the “OBCA”) and the former shareholders of MVC received one (1) (post-consolidation) Common Share for each one (1) common share of MVC issued and
outstanding on the closing date or the RTO. On November 23, 2020 the Company filed articles of amendment to change its name to Skylight Health Group Inc. On November 25, 2020 the Company announced the launch of its rebranding under the
Skylight Health brand effective November 30, 2020. On March 31, 2021 the Company filed articles of amendment deleting the First Preferred Series A Shares. 

The Company has its head and registered office located at 5520 Explorer Dr., Suite 402, Mississauga, Ontario L4W 5L1. 

Inter-Corporate Relationships 
 Set out
below is the corporate structure of the Company and its material subsidiaries, including the corporate jurisdiction of the subsidiary owned, controlled or directed by its parent. 

 
 

 
 The Company holds directly or indirectly 100% of the issued and outstanding securities of MVC Technologies
Inc. (“MVC”) a corporation incorporated under the OBCA. In the United States, the Company’s operations are carried out by MVC Technologies USA Inc. (“MVC USA”), a Delaware corporation and wholly-owned
subsidiary of MVC. 
 GENERAL DEVELOPMENT OF THE BUSINESS 

Skylight Health Group Inc. is a healthcare services and technology company, working to positively impact patient health outcomes. The Company
operates a US multi-state primary care health network comprised of physical practices providing a range of services from primary care, sub-specialty, allied health, and laboratory/diagnostic testing. The
Company is focused on helping small and independent practices shift from a traditional fee-for-service (FFS) model to value-based care (VBC) through tools including
proprietary 

  
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technology, data analytics and infrastructure. VBC will lead to improved patient outcomes, reduced cost of delivery and drive stronger financial performance from existing practices. 

The Company was founded in 2014, by founders with over 50 years of collective experience in clinical practice management in Canada and the US,
as owners, operators, and consultants to outpatient medical centers across a variety of specialties from primary care, urgent-care, sub-specialty, and allied health & wellness. SHG is founded on a
model designed to drive towards helping small and independent practices adopt value-based capabilities and take on varying levels of risk. According to a report on The State of Primary Care in the US from the Robert Graham Center, the US
healthcare outpatient market is highly fragmented with over 56% of clinics and clinicians working independently and in small care groups. These practices struggle the most with developing and deploying VBC due to the increased investment in
technology, infrastructure, and capacity. As the industry continues to be consolidated by large health networks, there is a need and demand by patients to maintain the same level of patient care and treatment outcomes lost within the consolidation
by legacy health networks. SHG positions itself as the disruptor to legacy health networks. Providing an opportunity to consolidate with SHG while maintaining patient treatment quality, accessibility and affordability and preserving the way
healthcare should be delivered. SHG also positions itself to partner with health plans as they aim to provide more comprehensive care services to patients across varying risk groups and capitation models to lower the cost of downstream costs. 

SHG practices offer both in clinic and virtual care services through telemedicine and remote patient monitoring. As part of developing the
infrastructure for improved access within its practices, the Company expects to expand offerings to patients including a nursing and advisory hotline, same day access, annual wellness reminders and screening protocols, improved access to home-care
and remote care services. 
 The Company’s vision and business model is to drive towards an outcome-based reimbursement model, more
commonly referred to as the Value-Based model. The Company works through an acquisition strategy that focuses on current fee-for-service (FFS) practices that will
convert to value-based care (VBC) or capitation-based payment models. In a FFS model, payors (commercial and government insurers) reimburse on an encounter-based approach. This puts a focus on volume of patients per day. In a VBC model, payors
reimburse typically on a capitation (fixed fee per member per month) basis. This places an emphasis on quality over volume. The Company’s revenues will largely be driven by insurable services paid for by payors currently in a FFS model but in
the future in a blended or VBC model. 
 Three Year History 

The following is a description of how the Company’s business has developed over the last three completed financial years. This section
focuses on the business undertaken by MVC prior to the RTO and excludes any of the Company’s business in order to take the reader through a logical journey to the business initiatives today. 

2018 
 MVC began with a focus on
developing and deploying clinical software by way of its Clinical Decision Support (“CDS”) platform. As a first of its kind, the platform was deployed in Canada and the US focused on allowing customers to better understand the adoption of
alternative therapies into a more traditional clinical operation. 
 After the initial deployment into the market, MVC saw success in
clinical settings in Canada and the US. The platform also showed potential in additional international settings such as Australia, the UK and Colombia. As such, MVC focused its efforts on growing its footprint in clinical operations as well as
technology and research capabilities throughout 2018. 
 Between July 3, 2018 and September 10, 2018, MVC completed a non-brokered private placement in five tranches. The financing consisted of an aggregate of 5,108,451 units at $0.44 per unit for aggregate gross proceeds of $2,247,718. Each unit consisted of one common share of
MVC and one half (1/2) of one common share purchase warrant. Each whole warrant entitled the holder to purchase one common share of MVC for $0.50 for two years from the date of issuance. In connection with the private placement, MVC issued an

  
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aggregate of 81,945 broker warrants, each entitling the holder to purchase one unit for $0.44 for a period of two years, or within 90 days of completion of a going-public transaction. 

On August 28, 2018, the Company and MVC entered into a non-binding letter of intent with respect
to the RTO. The letter of intent was amended on October 26, 2018. 
 On September 11, 2018, MVC entered into an asset purchase
agreement with 1035855 Canada Inc. in connection with the acquisition of assets in consideration for an initial cash payment of $150,000 and the issuance of 795,455 common shares of MVC. On December 31, 2018 a further 1,245,454 MVC common
shares were issued as additional consideration at a deemed price of $0.44 per share. 
 Between September 26 and October 2, 2018,
MVC completed two final tranches of a non-brokered private placement financing with the issuance of an aggregate of 4,673,813 units at a price of $0.44 per unit for gross proceeds of $2,056,477.70. Each unit
consisted of one MVC common share and one half of one common share purchase warrant. An aggregate of 2,336,906 warrants were issued with each whole warrant exercisable to purchase one common share of MVC at price of $0.50 for a period of two years
from issuance. 
 In October of 2018 repurchased an aggregate of 1,946,700 common shares and an aggregate of 973,349 common share purchase
warrants for total consideration of $837,081.00. 
 On October 25, 2018, MVC repurchased an aggregate principal amount of $150,000 of
5% convertible senior secured debentures and 1,951,000 common shares for total consideration of $1,198,264.80. 
 On December 20, 2018,
MVC entered into a non-binding term sheet with respect to a convertible secured debenture in the principal amount of US $2,400,000. Pursuant to the terms of the term sheet, MVC issued a debenture bearing
interest at the rate of 12% per annum, maturing in five years and convertible into common shares of MVC at $0.50 per share. The terms of this debenture were amended in 2019 and 2020 and the debt was converted into Common Shares in October of 2020.
Proceeds from the loan were used to repay an outstanding promissory note which came due on December 18, 2018. 
 On December 20,
2018, the Company and MVC entered into a share exchange agreement (the “Share Exchange Agreement”) in respect of the RTO. The Share Exchange Agreement was amended on January 24, 2019 and the RTO contemplated thereby was
completed on February 27, 2019. 
 Also, on December 20, 2018, the Company changed its name to CB2 Insights Inc. and consolidated
its issued and outstanding common shares on the basis of one (1) post-consolidation Common Share for every sixteen and one-half (16.5) pre-consolidation Common
Shares. 
 2019 
 2019 brought about
further growth within the Company’s clinical operations and technology and research business units. The Company’s focus was on extending the clinical operations of its uninsured services and subsequently amassing patient rosters across new
states. Also, within the year, the Company focused on strengthening its technology platform and research capabilities both domestically and internationally. 

On January 17, 2019, MVC completed a non-brokered private placement financing with the issuance
of an aggregate of 374,998 units at a price of $0.50 per unit for gross proceeds of $187,498.80. Each unit consisted of one common share and one half of one common share purchase warrant. An aggregate of 187,500 warrants were issued with each whole
warrant exercisable to purchase one common share of the Company at a price of $0.80 for a period of three years from the date of issuance. 

During January and February 2019, MVC closed four tranches of a private placement financing of subscription receipts with the issuance of
4,758,340 subscription receipt units for gross proceeds of $2,379,170. Each subscription receipt unit was convertible into one MVC common share and one-half common share purchase warrant of MVC. An aggregate
of 4,758,340 MVC common shares and 2,379,170 warrants were issued on the automatic conversion of the subscription receipt units immediately prior to the completion of the RTO, with each whole warrant exercisable to purchase one MVC common share at a
price of $0.80 for a period of three (3) years from the date of issuance. MVC also issued 26,040 broker warrants 

  
 A-5 

 
in combination with the closing of the subscription receipt unit financing. Each broker warrant entitled the holder to purchase one subscription receipt unit at a price of $0.50 for a period of
three (3) years, with each whole warrant exercisable to purchase one MVC common share at a price of $0.80 for a period of three (3) years from the date of issuance. In relation to this financing the MVC paid cash issuance costs of $23,730.

 On February 27, 2019, the Company completed the RTO, whereby it acquired all of the issued and outstanding common shares of MVC
pursuant to a three-cornered amalgamation. Pursuant to the RTO, a wholly-owned subsidiary of the Company and MVC amalgamated and the resulting entity, MVC Technologies Inc., became a wholly-owned subsidiary of the Company. Under the terms of the
RTO, the Company issued one post-consolidation Common Share for each one common share of MVC then issued and outstanding and all convertible securities of MVC were exchanged for convertible securities of the Company on equivalent terms. 

On March 5, 2019, $959,000 principal amount debentures, plus accrued interest of $84,632, were converted into 7,594,547 Common Shares,
including a 10% penalty multiplier, as MVC was unable to complete the RTO by the conversion date as stipulated in the debenture agreement. 

On March 5, 2019, the Company entered into a binding agreement to acquire the assets of MedEval Clinic LLC, (MedEval Clinic) an
alternative medical care and education center group with multiple locations in Colorado and Arizona. The total consideration was US$150,000 cash and the issuance of 450,000 Common Shares upfront at a price of $0.31 per Common Share and 100,000
Common Shares issued in November 2019 at a price of $0.125 per Common Share. 
 On March 6, 2019, the Company commenced trading on the
CSE under the symbol “CBII”. 
 On March 27, 2019, the Company signed an agreement with Premier Health Group (PHG) to
integrate its Clinical Decision Support into PHG’s Electronic Medical Records platform to provide physicians with a tool built for managing alternative therapies to be used at the
point-of-care to assess treatment options for patients. 

On April 4, 2019, the Company acquired the assets of Colorado-based Rae of Sunshine Health Services (“ROSH”) LLC, operating as
“Relaxed Clarity” for a cash payment of US$200,000 and the issuance of 500,000 Common Shares at a price of $0.31 per Common Share. During 2019, the Company issued ROSH 1,783,359 Common Shares in relation to the milestone incentive
payments. During 2020, the Company issued ROSH a further 1,889,556 Common Shares in relation to milestone incentive payments. 
 On
May 17, 2019, the Company commenced trading in the US on the OTCQB market under the symbol “CBIIF”. 
 On June 14, 2019,
the Company entered into a binding agreement for the purchase of 100% of the patient list of New Jersey Alternative Medicine LLC (NJAM), an alternative medicine clinic group with multiple locations in New Jersey under an earn-out arrangement with no cash or other consideration payable on the closing date. On January 28, 2020, the Company issued NJAM 2,500,000 Common Shares priced at $0.14 per Common Share to settle all
obligations under the agreement. 
 On June 24, 2019, the Company entered into an agreement with Merida Capital Partners II LP
(“Merida”) whereby the terms of the promissory note dated December 20, 2018 issued by the Company and referred to above were amended, an additional amount of US$600,000 was advanced to the Company and the balance of such
promissory note was increased from US$2,400,000 to US$3,000,000. In connection with the agreement, all accrued unpaid interest payable to Merida Capital in accordance with the terms of the promissory note for the period of December 20, 2018
through June 24, 2019 was paid through the issuance of 1,219,520 Common Shares. 
 2020 

2020 was a transformative year as the Company successfully navigated several major inflection points. Focused on measurable changes to its
operating model and structure, the Company was committed to achieving positive Adjusted EBITDA by Q2 2020. Amidst the challenges of limited cash entering Q1 2020, 

  
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the Company was able to continue improving on its operations, managing costs in line with seasonality of its US business, and ramping up towards meetings its profitability goal, which has since
continued. 
 The impact of the COVID-19 pandemic in March resulted in a significant shift in
business model from in-clinic services to a near total virtual telehealth model. Thanks to the efforts of the team and established technology framework, the Company was able to quickly react and regain patient visits and volumes based on the lack of
access to in-clinic services. In support of this, the Company also saw a rise in patient visits and adoption to its technology by physicians, patients, and clinical staff. 

The Company also underwent a major shift in its overall business model and rebranded to Skylight Health Group as it re-positioned itself in the US markets to move to addressing a larger need in the market, accessibility and quality in primary care delivery to patients. Driven by patient need, the Company determined the shift in
response to both factors driving the future trends in VBC as well as the need from patients for a more comprehensive form of care delivery. Skylight’s repositioning provided a further opportunity to see strong growth by way of acquisition,
further enhancing the growth trajectory of the Company. 
 Following a strong demonstration of execution in Q2, validating its commitment to
reaching positive Adjusted EBITDA and cash flow from operations, the Company further bolstered its financial position through the extinguishing of its Amended Note and subsequent financings all at premiums to the first round in September 2020 adding
over $20 million in aggregate net proceeds in Q3 and Q4 2020. 
 On January 29, 2020, the Company appointed Tom Brogan, as an
independent director to Board of Directors. Mr. Brogan is currently the CEO and Chairman at Vestrum Health, an electronic healthcare record data company which delivers information systems to pharmaceutical manufacturers, physician practices and
other healthcare stakeholders. On the same day, the Company also appointed Norton Singhavon Interim Chairman of the Board and the Audit Committee. 

On January 27, 2020, the Company announced that it had issued an aggregate of 1,218,756 Common Shares to Merida Capital as part of its
interest payment on a debt note. In addition, the Company agreed to issue an aggregate of 2,487,127 Common Shares as part of a debt settlement on current liabilities of which approximately 1.8 million Common Shares were be issued to insiders
and directors in lieu of certain compensation. 
 In April 2020, the Company launched Skylight Health Group (“SHG”) as part
of its clinical operations in the United States. SHG provides a range of integrated health services from primary medical care to consultative specialist care, alternative health, wellness and multi-disciplinary services and products to its patient
population. SHG services are reimbursable in accordance with the rules, regulations and requirements by the Centers for Medicare and Medicaid Services (“CMS”), as well as other private health insurers within each operating state
where its physicians, practitioners and patients will be able to enjoy the benefits of an expanded service offering. The primary focus of the SHG is to provide a broad array of primary and alternative healthcare services including family/specialty
medicine and interdisciplinary services focusing on comprehensive care, chronic disease management and health promotion/education. 
 In
April 2020, the Company qualified for relief funds in the United States due to the COVID-19 Pandemic. Total funds of USD $652,500 were received to support payroll and rent relief efforts. The funds used as
part of the guidelines, provided support for the Company to withstand the initial impact to its brick-and-mortar services during the early impact of COVID-19 in March 2019. The Company continues to be of the view that the advances will be forgiven. The Company has made an application which has been approved by its lender and is currently waiting for approval
from the US government. As such, the principal will not need to be repaid and there will be no interest charges. 
 In June 2020, the
Company entered into an amended and restated promissory note (the “Amended Note”) with Merida, which amended the terms of a promissory note originally issued by the Company on December 20, 2018 and amended in June 2019. Under
the terms of the Amended Note, the principal amount of USD $3 million would have become payable on December 24, 2022 instead of December 24, 2020 and earned an annual interest rate of 8% reduced from 12%. The Amended Note was payable
at the Company’s option, either in cash or in Common Shares. The Amended Note was converted into 10,412,250 Common Shares fair valued at $0.53 per share on October 29, 2020. As consideration for the amendments, the Company

  
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issued warrants entitling the holder to purchase up to three million Common Shares at an exercise price of CAD $0.14 per Common Share during the period commencing on the first anniversary of date
of issuance of the warrants and ending three years from such issuance date. 
 In September and October 2020, the Company issued 34,453,641
units (the “Units”) by way of a non-brokered private placement, at a price of $0.15 per Unit, for gross proceeds of $5,168,046 (the “PP Offering”). Each Unit is comprised of one Common
Share and one half of one whole Common Share purchase warrant (each whole warrant, a “PP Warrant”). Each PP Warrant is exercisable to acquire one additional Common Share at an exercise price of $0.20 for a period of 24 months following the
closing date of the PP Offering. The Company paid finder’s fees in the aggregate amount of $155,216 and issued an aggregate of 1,337,778 warrants (the “PP Finder Warrants”) to certain parties in connection with the PP Offering. Each
PP Finder Warrant entitles the holder to purchase one Common Share at an exercise price of $0.20 for a period of 24 months following the closing date of the PP Offering. 

On October 7, 2020, the company announced, that it had acquired assets of Maverick County Medical (“MCM”)—a
Texas-based Primary Care Medical & Wellness Clinic. MCM provides Primary Care Services to over 10,300 patients in Eagle Pass and surrounding regions. The Company paid total cash consideration of $967,927 (US$729,300), 50% of the cash
awarded at signing of the transactions and 50% due in six months from the date of completion of transaction.  
 On October 28,
2020, the Company announced the completion of the acquisition of a Tacoma- Washington primary care services group Michael R. Jackson, M.D., P.S., operating as “JMC”. The Washington-based Tacoma medical clinic owned by Dr. Jackson has
been providing Primary Care Services to over 10,000 patients in University Place and surrounding regions. The Company paid total cash consideration of $388,338 (US$295,000). The terms of the transaction include a customary transition by the previous
owners for a period of up to one year to ensure successful continuity of care for patients in the practice. 
 On November 19, 2020,
the Company completed a short form prospectus offering by issuing 12,236,000 Common Shares priced at $0.47 per share for gross proceeds of $5,750,920. The Company paid underwriters fees of $410,066 and issued 872,480 broker warrants exercisable at
$0.47 until November 19, 2022. 
 On November 25, 2020 the Company announced the approval of its name change to Skylight Health
Group Inc. and announced the launch of its rebranding under the Skylight Health brand effective November 30, 2020. 
 On
December 30, 2020, the Company completed a short form prospectus offering by issuing 13,800,000 Common Shares, priced at $1.00 per share for gross proceeds of $13,800,000. The Company paid underwriters fees of $708,000 and issued 748,000 broker
warrants exercisable at $1.00 until December 30, 2022. 
 On December 30, 2020, the Company announced the completion of the
acquisition of the assets of Healthcare Resources Management LLC which operates Perimeter Pain and Primary Clinic in in Cookeville, Tennessee in consideration for the payment of $1,049,055 (US$821,564). 

Current Financial Year 
 The Company
expects to see strong growth in revenue and EBITDA over the next 12 months as it expands its reach in the US in services and patient growth. With the growing demand for accessible and affordable medical services in the US the Company believes the
following external factors will be significant contributors for growth for services. The Company believes it is well positioned to meet this growing opportunity. The Company expects to see strong organic and acquisition growth over the next 12
months as it executes against its three-pronged growth model. 
 On January 5, 2021, the Company announced the completion of the
acquisition of the assets of a medical clinic in Denver, Colorado in consideration for the payment of $2,300,000 to be paid in installments over a six-month period. 

On January 6, 2021, the Company commenced trading on the TSX-V under the symbol “SHG”.

  
 A-8 

 On January 14, 2021, the Company appointed Grace Mellis, as an independent director to
the Company’s Board of Directors. Ms. Mellis has a robust background in strategy and finance leadership roles with over 28 years of success and experience: Almost a decade at JP Morgan Chase serving as Managing Director, Head of
International Strategy, and Investor Services CFO for EMEA within the Corporate and Investment Bank. Former CFO and VP of Corporate Finance and Business Intelligence at Greendot Corporation, a US $3.1B market cap NYSE listed company. Founder and
director of IGA Capital which provides consulting and advisory services to primarily early-stage companies. 
 On February 4, 2021, the
Company announced the completion of the acquisition of six medical clinics in Florida in consideration for a purchase price of US$4,400,000 of which approximately 66% is payable in cash within 90 days of the closing date and the balance is payable
in Common Shares issued quarterly over 15 months. On closing the Company issued 375,167 Common Shares priced at $1.2785 per share representing 20% of the total share consideration. Each subsequent tranche of shares representing 16% of the share
consideration will be priced at the greater of the 10 day average the minimum price allowed by the TSX-V at the time of issuance. 

On February 17, 2021, the Company announced the appointment of Dr. George Feghali as Chief Medical Officer. 

On February 23, 2021 announced that it has partnered with Amazon Web Services (“AWS”) to utilize their infrastructure and tools
as part of a big data strategy. The Company will combine data from hundreds of different sources and use tools available in AWS, from Business Intelligence platforms to Artificial Intelligence to identify ways to improve patient care while
increasing clinic efficiency and revenue potential. 
 On February 26, 2021, the Company announced the appointment of Andrew Elinesky
as Chief Financial Officer. 
 On March 4, 2021, the Company announced that it has entered into Letters of Intent to acquire 3
independent Primary Care practices in the United States each of which are anticipated to close in the second quarter of fiscal 2021. 
 On
March 16, 2021, the Company announced the appointment of Patrick McNamee as Chairman of the Board of Directors. Mr. McNamee succeeds Norton Singhavon who will remain involved as an active member of the Board. Mr. McNamee has
previously acted as EVP and COO of Express Scripts, where he led all major activities of the $120B+ technology-driven pharmacy benefit management company. 

On April 5, 2021, the Company announced the closing of primary care clinical group Rocky Mountain in Colorado. Rocky Mountain expands SHG
to over seven new locations in the Denver and Boulder area. Skylight Health Group has agreed to pay a total of CA$13,518,092 in cash to acquire the full assets of Rocky Mountain. The Company held back approximately 20% of the cash payment to be paid
in installments and potential working capital adjustments a period of two years from closing. 
 On April 15, the Company announced the
appointment of Paul Kulas as Chief Operating Officer. Paul previously served as SVP of Operations at the Company. 
 Impact of COVID 19 

On March 11, 2020, the COVID-19 outbreak was declared a pandemic by the World Health Organization,
which has since caused significant financial market and social dislocation. In particular, the federal government of the United States responded to the pandemic with various declarations of emergency, which resulted in travel and entry restrictions.
It also imposed guidelines and recommendations regarding the closure of schools and public meeting places, lockdowns, and other restrictions intended to slow the progression of the virus, which state, territorial, tribal, and local governments have
followed. To date, the COVID-19 crisis has not materially impacted the Company’s operations, financial condition, cash flows and financial performance. However, the Company has experienced longer delays
in opening its physical clinics which it anticipates beginning to reopen strategically in 2021. The Company’s employees and consultants 

  
 A-9 

 
have been able to continue their work uninterrupted and the Company continues to have full access to its business operations in Canada and the United States. 

In response to the outbreak, the Company has instituted operational and monitoring protocols to ensure the health and safety of its employees,
which follow the advice of local governments and health authorities where it operates. The Company has adopted a work from home policy where possible. The Company continues to operate effectively whilst working remotely. The Company will continue to
monitor developments of the pandemic and continuously assess the pandemic’s potential further impact on the Company’s operations and business. The situation is dynamic, and the ultimate duration and magnitude of the impact of the pandemic
on the economy and the financial effect on the Company’s operations and business are not known at this time. 
 See “Risk
Factors—Public Health Crises such as the COVID-19 Pandemic and other Uninsurable Risk”. 
 DESCRIPTION
OF THE BUSINESS 
 General 
 Business Model

 The Company’s business model is primarily driven through its clinical operations that offer medical services to patients in the
US through virtual and physical care in 16 US states. During 2019, the Company was also able to begin validating its technology and contract research services, which generated incremental revenue by the end of 2019, and continued to grow throughout
the 2020 calendar year. The Company differentiates itself by being an integrative medical practice in the United States that owns its own proprietary technology data analytical assets, and clinical research expertise to support new market expansion,
market access, data collection and analysis and drug discovery. At present, the Company operates and offers services in three vertical markets: medical services, technology & data analytics, and contract research and development services,
as described in more detail below. Each vertical market is autonomous but works in tandem with the others. The Company integrates patient access, proprietary technology and consulting services to bring a comprehensive solution. 

Clinical Operations—Access to patient-centred integrative healthcare services. Operating as Skylight Health Group, the
Company’s clinical operations span across more than 16 states in the US and currently serve over 150,000 unique patients annually. 

As a result of organic clinical growth and strategic acquisitions outlined above, the Company is now a major medical services organization in
the US that specializes in integrative medical services. The Company’s acquisition strategy was designed to provide it with improved access to new markets and enable the Company to realize significant economies of scale that would improve on
the overall profitability margin of the business. 
 Skylight, which operates under both an insurable services and fee-for-service billings for patients with insurance, as well as for patients without insurance, a subscription-based membership model at $199/year which provides consultation
access to patients who cannot afford access to healthcare services due to cost. Insurable services are covered by services paid by The Centers for Medicare and Medicaid Services (“CMS”) and other commercial payors. Insurable services and
subscription-based models are offered to patients at a limited or no cost and allow greater access for patients who are currently unable to afford such care, especially in the midst of large unemployment rates due to the COVID-19 pandemic. 
 Technology & Data Analytics—The Company has
designed, developed and acquired secure and compliant proprietary technology and digital assets which specializes in monitoring, assessing and evaluating patient treatment plans at the point of care. The technology has also enabled the Company to
standardize the quality of care throughout the patient lifecycle, both within its clinical operations and on behalf of other groups 

  
 A-10 

 
generally in markets outside of the US – in order to access real world data related to non-traditional treatments, for its efficacy, treatment
interactions and other key quality determinants for health. 
 The Company’s primary technology platform is a proprietary electronic
database management and patient record platform designed to standardize and optimize the workflows and management of the Company’s wholly owned clinical operations. The system incorporates a series of tools which allows practitioners and other
clinical staff to schedule appointments, manage patient files, evaluate patients for integrative therapies and where necessary, create the required documents to submit to regulatory bodies on behalf of patients. The technology was built to support
virtual consults, which subsequently in 2020 during the COVID-19 pandemic, was expanded and successfully supported the transition of care for the more than 100,000 patients in its network at the time. 

Contract Research and Development - The Company has amassed a substantial registry of patients seeking and using integrative
treatments, conventional medications and alternative plant-based medicines. This allows the Company’s partners to have access to the Company’s database for a more time efficient and cost-effective approach. The Company’s team has
extensive experience in providing CRO services to allow the Company to offer a turnkey solution across all phases of drug development including randomized control, pragmatic and post-marketing clinical trials. The Company’s services are
designed to identify and support clinical trial data through the generation of safety and efficacy claims from RWE. The Company may leverage any combination of its technology, patient registry and/or industry knowledge to support large-scale
projects that focus on studying integrative therapies in various markets. 
 The Company’s research and development team can work to
support internal research departments and organizations to complement the services offered, or act as a full service CRO providing support from feasibility studies, clinical trial designs, regulatory and drug applications, protocol development and
ethics/IRB approval, patient clinical site recruitment, site monitoring and adverse events reporting, medical writing and publication submission. 

Segmentation 
 The Company’s current
revenue is generated predominantly through its clinical operations by way of medical services. 
 The following table shows the details of
revenues from operations for the years ended December 31, 2020 and December 31, 2019. 
  

									
	 	  	December 31, 2020	 	  	December 31, 2019	 
	 Clinic
	  	$	12,897,862	 	  	$	13,278,075	 
	 Contract Research solutions
	  	$	189,981	 	  	$	110,138	 
	 Software
	  	$	53,420	 	  	$	35,534	 

 Specialized Skill and Knowledge 

The Company’s business is dependent on skilled employees and contractors in the areas of practice management and on skilled and
knowledgeable medical practitioners and trained medical assistants. 
 Competitive Conditions 

The Company experiences competition from other healthcare providers, hospitals and telemedicine companies. Most competition is regionalized and
highly fragmented. The US Healthcare market, in particular in the primary care market, is comprised of about 56% independent or small group practices. The Company 

  
 A-11 

 
believes that it has the financial resources and specialized skills and knowledge to compete with others in the markets where it is currently carrying on business. 

Intangible Properties 
 The Company’s
intangible assets are an important part of its business and its ability to compete in the markets where it is currently carrying on business. These intangible assets include patient lists, software, trademarks, and its brands for its offered
services. The Company’s intangible assets are wholly owned by it. 
 Cycles 

The business of the Company is in part cyclical in nature. Sales of the Company’s services tend to be slower in the first and last
calendar quarter than in the remainder of each year. However, the Company does not anticipate being affected by more general economic downturns. 

Economic Dependence 
 The Company’s
business is dependent on the availability of medical insurance in the United States. In this regard, the Company’s business may be affected by changes in insurable services, as it may affect its billings and services offered. The Company’s
services are governed by the policies of the Centers for Medicare and Medicaid, a federal agency of the United States that administers the nation’s major healthcare programs including Medicare, Medicaid, and CHIP. 

The Company is dependent on its relationships with the “Skylight Health PCs”, which are affiliated professional entities that
the Company does not own, to provide healthcare services, and the Company’s business would be harmed if those relationships were disrupted or if the arrangements with the Skylight Health PCs become subject to legal challenges. See “Risk
Factors—The Company is dependent on its relationships with the Skylight Health PCs.” 
 Environmental Protection 

The Company uses, generates, stores, handles, and disposes of potentially hazardous materials at its clinical operations. 

New laws and regulations, stricter enforcement of existing laws and regulations, the discovery of previously unknown contamination, new clean-up requirements or claims on environmental indemnities the Company committed to may result in the Company having to incur substantial costs. This could have a materially negative effect on the Company’s
financial condition and results of operations. 
 The Company believes its current operations are in compliance in all material respects
with environmental laws and regulations. Environmental protection requirements do not have material financial or operational effects on the Company’s capital expenditures, profit or loss or competitive position. 

Employees 
 The Company, as of Fiscal Year
End 2020, has 80 employees and 37 contractors in Canada and US. These numbers exclude physicians who provide services though the Company’s clinical operations. 

Foreign Operations 
 The Company derives
most of its revenue from its operations in the United States. In addition, the Company is working on pilot programs with clients in the United Kingdom and Canada. At present, the Company is 

  
 A-12 

 
dependent only on revenues from its US operations and not from these activities in the United Kingdom and Canada. 

RISK FACTORS 
 The Company’s business
involves numerous inherent risks as a result of the nature of the business, global economic trends, as well as local social, political, environmental and economic conditions in Canada, the Company’s areas of operation. As such, the Company is
subject to several financial and operational risks that could have a significant impact on its ability to generate any future profitability and its levels of operating cash flows. 

The Company assesses and attempts to minimize the effects of these risks through careful management and planning of its operations and hiring
qualified personnel but is subject to a number of limitations in managing risk resulting from its early stage of development and the jurisdictions of its exploration activities. 

Below is a summary of the principal risks and related uncertainties facing the Company. Such risk factors could have a material adverse effect
on the Company’s business, financial condition and results of operations or the trading price of the Common Shares. 
 General 

A purchase of any of the securities of the Company involves a high degree of risk and should be undertaken only by purchasers whose financial
resources are sufficient to enable them to assume such risks and who have no need for immediate liquidity in their investment. An investment in the securities of the Company should not constitute a major portion of an individual’s investment
portfolio and should only be made by persons who can afford a total loss of their investment. Prospective purchasers should evaluate carefully the following risk factors associated with an investment in the Company’s securities prior to
purchasing any of the securities. 
 Limited Operating History 

MVC, while incorporated in November 2014, began carrying on business in 2017 and the Company has only recently begun to generate revenue. The
Company is therefore subject to many of the risks common to early- stage enterprises, including under-capitalization, cash shortages, limitations with respect to personnel, financial, and other resources and lack of revenues. There is no assurance
that the Company will be successful in achieving a return on shareholders’ investment and likelihood of success must be considered in light of the early stage of operations. 

Negative Operating Cash Flow 
 The Company
has historically not generated cash flow from operations. The Company is devoting significant resources to its business, however there can be no assurance that it will generate positive cash flow from operations in the future. The Company may
continue to incur negative consolidated operating cash flow and losses. The Company had negative operating cash flows from operations until the second quarter of fiscal 2020 and reported a total comprehensive loss of approximately $10,990,000 for
the year ended December 31, 2019 and approximately $9,470,000 for the year ended December 31, 2020. To the extent that the Company has negative cash flow in future periods, the Company may need to deploy a portion of its cash reserves to
fund such negative cash flow. Following the completion of the corporate finance transactions between September and December of 2020, the Company had significantly reduced its long-term debt as at December 31 2020. The Company has sufficient
cash reserves to meet all its contingent obligations including under its acquisition agreements. Management of the Company continues to be of the view that its Paycheck Protection Loan will be forgiven. The Company has made an application which has
been approved by its lender and is currently waiting for approval from the US government. The clinical groups were cash flow positive in the second and third quarters of 2020 and it remains cash flow positive within its clinical operations. While it
continues to be aggressive in its corporate acquisition strategy, management believes 

  
 A-13 

 
that the Company has sufficient liquidity and capital resources to meet its obligations and continue to operate its business at its present rate. 

Economic Environment 
 The Company’s
operations could be affected by the economic context should the unemployment level, interest rates or inflation reach levels that influence consumer trends and consequently, impact the Company’s sales and profitability. As well, general demand
for banking services and alternative banking or financial services cannot be predicted and future prospects of such areas might be different from those predicted by the Company’s management. 

Risks Associated with Acquisitions 
 As
part of the Company’s overall business strategy, the Company may pursue select strategic acquisitions, which would provide additional product offerings, vertical integrations, additional industry expertise, and a stronger industry presence in
both existing and new jurisdictions. Future acquisitions may expose it to potential risks, including risks associated with: (a) the integration of new operations, services and personnel; (b) unforeseen or hidden liabilities; (c) the
diversion of resources from the Company’s existing business and technology; (d) potential inability to generate sufficient revenue to offset new costs; (e) the expenses of acquisitions; or (f) the potential loss of or harm to
relationships with both employees and existing users resulting from its integration of new businesses. In addition, any proposed acquisitions may be subject to regulatory approval. 

Operational Risks 
 The Company will be
affected by a number of operational risks and the Company may not be adequately insured for certain risks, including: labour disputes; catastrophic accidents; fires; blockades or other acts of social activism; changes in the regulatory environment;
impact of non-compliance with laws and regulations; natural phenomena, such as inclement weather conditions, floods, earthquakes and ground movements. There is no assurance that the foregoing risks and hazards
will not result in personal injury or death, environmental damage, adverse impacts on the Company’s operation, costs, monetary losses, potential legal liability and adverse governmental action, any of which could have an adverse impact on the
Company’s future cash flows, earnings and financial condition. Also, the Company may be subject to or affected by liability or sustain loss for certain risks and hazards against which the Company cannot insure or which the Company may elect not
to insure because of the cost. This lack of insurance coverage could have an adverse impact on the Company’s future cash flows, earnings, results of operations and financial condition. Additional operational risks are outlined below. 

The Company is dependent on its relationships with the Skylight Health PCs 

The Company is dependent on its relationships with the “Skylight Health PCs”, which are affiliated professional entities that
the Company does not own, to provide healthcare services, and the Company’s business would be harmed if those relationships were disrupted or if the arrangements with the Skylight Health PCs become subject to legal challenges. 

A prohibition on the corporate practice of medicine by statute, regulation, board of medicine or attorney general guidance, or case law,
exists in certain of the U.S. states in which we operate. These laws generally prohibit the practice of medicine by lay persons or entities and are intended to prevent unlicensed persons or entities from interfering with or inappropriately
influencing providers’ professional judgment. Due to the prevalence of the corporate practice of medicine doctrine, including in certain of the states where the Company conducts its business, it does not own the Skylight Health PCs and
contracts for healthcare provider services for its members through administrative services agreements (“ASAs”) with such entities. As a result, the Company’s ability to receive cash fees from the Skylight Health PCs is limited
to the fair market value of the services provided under the ASAs. To the extent the Company’s ability to receive cash fees from the Skylight Health PCs is limited, the Company’s ability to use that cash for growth, debt service or other
uses at the Skylight Health PC may be impaired and, as a result, the Company’s results of operations and financial condition may be adversely affected. 

  
 A-14 

 The Company’s ability to perform medical and digital health services in a particular
U.S. state is directly dependent upon the applicable laws governing the practice of medicine, healthcare delivery and fee splitting in such locations, which are subject to changing political, regulatory and other influences. The extent to which a
U.S. state considers particular actions or relationships to constitute the practice of medicine is subject to change and to evolving interpretations by medical boards and state attorneys general, among others, each of which has broad discretion.
There is a risk that U.S. state authorities in some jurisdictions may find that the Company’s contractual relationships with the Skylight Health PCs, which govern the provision of medical and digital health services and the payment of
administrative and operations support fees, violate laws prohibiting the corporate practice of medicine and fee splitting. The extent to which each state may consider particular actions or contractual relationships to constitute improper influence
of professional judgment varies across the states and is subject to change and to evolving interpretations by state boards of medicine and state attorneys general, among others. Accordingly, the Company must monitor its compliance with laws in every
jurisdiction in which it operates on an ongoing basis, and the Company cannot provide assurance that its activities and arrangements, if challenged, will be found to be in compliance with the law. Additionally, it is possible that the laws and rules
governing the practice of medicine, including the provision of digital health services, and fee splitting in one or more jurisdictions may change in a manner adverse to the Company’s business. While the ASAs prohibit the Company from
controlling, influencing or otherwise interfering with the practice of medicine at each Skylight Health PC, and provide that physicians retain exclusive control and responsibility for all aspects of the practice of medicine and the delivery of
medical services, there can be no assurance that the Company’s contractual arrangements and activities with the Skylight Health PCs will be free from scrutiny from U.S. state authorities, and the Company cannot guarantee that subsequent
interpretation of the corporate practice of medicine and fee splitting laws will not circumscribe the Company’s business operations. State corporate practice of medicine doctrines also often impose penalties on physicians themselves for aiding
the corporate practice of medicine, which could discourage providers from participating in the Company’s network of physicians. If a successful legal challenge or an adverse change in relevant laws were to occur, and the Company was unable to
adapt its business model accordingly, the Company’s operations in affected jurisdictions would be disrupted, which could harm its business. 

Financial Projections May Prove Materially Inaccurate or Incorrect 

The Company’s financial estimates, projections and other forward-looking information accompanying this document were prepared by the
Company without the benefit of reliable historical industry information or other information customarily used in preparing such estimates, projections and other forward-looking statements. Such forward-looking information is based on assumptions of
future events that may or may not occur, which assumptions may not be disclosed in such documents. Investors should inquire of the Company and become familiar with the assumptions underlying any estimates, projections or other forward-looking
statements. Projections are inherently subject to varying degrees of uncertainty and their achievability depends on the timing and probability of a complex series of future events. 

There is no assurance that the assumptions upon which these projections are based will be realized. Actual results may differ materially from
projected results for a number of reasons including increases in operating expenses, changes or shifts in regulatory rules, undiscovered and unanticipated adverse industry and economic conditions, and unanticipated competition. Accordingly,
investors should not rely on any projections to indicate the actual results the Company and its subsidiaries might achieve. 
 Difficulty to Forecast

 The Company must rely largely on its own market research to forecast sales as detailed forecasts are not generally obtainable from
other sources at this early stage of the Company’s business. A failure in the demand for its services to materialize as a result of competition, technological change or other factors could have a material adverse effect on the business, results
of operations, and financial condition of the Company. 
 Competition General 

There is potential that the Company will face intense competition from other companies, some of which can be expected to have longer operating
histories and more financial resources and marketing experience than the Company. Increased competition by larger and better financed competitors could materially and adversely 

  
 A-15 

 
affect the business, financial condition, and results of operations of the Company. To remain competitive, the Company will require a continued high level of investment in research and
development, marketing, sales, and client support. 
 Competition Healthcare Information Systems 

The healthcare information systems market is highly competitive on a local, national and international level. The Company believes that the
primary competitive factors in this market are: 
  

	 	•	 	 quality service and support; 

 

	 	•	 	 price; 

  

	 	•	 	 product features, functionality and ease of use; 

 

	 	•	 	 ability to comply with new and changing regulations; 

 

	 	•	 	 ongoing product enhancements; and 

 

	 	•	 	 reputation and stability of the vendor. 

For example, the current electronic medical record market in Canada is currently dominated by Telus Health and the Company will face
substantial competition from Telus Health and other established competitors, which have greater financial, technical, and marketing resources than it does. Its competitors could use their greater resources to modify their product offerings to
incorporate platform functionality among doctors, patients, pharmacies and licensed producers in a comparable manner to the Company. The Company’s competitors also have a larger installed base of users, longer operating histories and greater
name recognition than the Company will. 
 There can be no assurance that the Company will successfully differentiate its current and
proposed products from the products of its competitors, or that the marketplace will consider the products of the Company to be superior to competing products. 

Competition Health Care Clinics 
 The
industry is intensely competitive, and the Company competes with other companies that may have greater financial resources and facilities. Numerous other businesses are expected to compete in the clinic space and provide additional patient services.
An increase in competition for patient evaluations and education may decrease prices and result in lower profits to the Company. 
 Management of Growth

 The Company may be subject to growth-related risks including capacity constraints and pressure on its internal systems and controls.
The ability of the Company to manage growth effectively will require it to continue to implement and improve its operational and financial systems and to expand, train, and manage its employee base. The inability of the Company to deal with this
growth may have a material adverse effect on the Company’s business, financial condition, results of operations and prospects. 
 Reliance on
Management 
 The success of the Company is dependent upon the ability, expertise, judgment, discretion, and good faith of its
management. While employment agreements are customarily used as a primary method of retaining the services of key employees, these agreements cannot assure the continued services of such employees. Any loss of the services of such individuals could
have a material adverse effect on the Company’s business, operating results, or financial condition. 
 Dependence on suppliers and skilled labour

 The ability of the Company to compete and grow will be dependent on it having access, at a reasonable cost and in a timely manner, to
skilled labour, equipment, parts and components. No assurances can be given that the Company will be successful in maintaining its required supply of skilled labour, equipment, parts and components. 

  
 A-16 

 Risks Related to Software and Product Development 

The Company continues to develop software and products. Inherent risks include: 

 

	 	•	 	 Lack of experience and commitment of team 

The project manager is the leader and the most responsible person. An inexperienced manager can jeopardize the completion of a
project. 
  

	 	•	 	 Unrealistic deadlines 

Software projects may fail when deadlines are not properly set. Project initialization, completion date and time must be
realistic. 
  

	 	•	 	 Improper budget 

Cost estimation of a project is very crucial in terms of project success and failure. Low cost with high expectations of large
projects may cause project failure. 
  

	 	•	 	 Lack of resources 

Software and hardware resources may not be adequate. Lack of resources in terms of manpower is also a critical risk factor of
software failure. 
  

	 	•	 	 Personnel hiring 

The Company and Company will be subject to extensive hiring requirements across all of its business lines as well as a need to
release underperforming employees in order to perform and grow at the rate it intends. Staffing requirements may not be properly attained or assigned for/to specific tasks or company needs. 

 

	 	•	 	 Understanding problems of customers 

Many customers are not technical in terms of software terminologies and may not understand the developer’s point of view.
Developers may interpret information differently from what is provided by the clients. 
  

	 	•	 	 Inappropriate design 

Software designers have a major role in the success or failure of the project if a design is inappropriate for the project.

  

	 	•	 	 Market demand obsolete 

Market demand may become obsolete while a project is still in progress. 

Risks Related to the Company 
 Risk of Safeguarding
Against Security & Privacy Breaches 
 A security or privacy breach could: 

 

	 	•	 	 expose the Company and Company to additional liability and to potentially costly litigation;

  

	 	•	 	 increase expenses relating to the resolution of these breaches; 

 

	 	•	 	 deter potential customers from using our services; and 

  
 A-17 

	 	•	 	 decrease market acceptance of electronic commerce transactions. 

As a provider of software technology, the Company and Company are at risk of exposure to a security or privacy breach of its system which
could lead to potentially costly litigation, deter potential customers from using its services, or bring about additional liability of the Company and Company. The Company and Company cannot assure that the use of applications designed for data
security and integrity will address changing technologies or the security and privacy concerns of existing and potential customers. Although the Company and Company require that agreements with service providers who have access to sensitive data
include confidentiality obligations that restrict these parties from using or disclosing any data except as necessary to perform their services under the applicable agreements, there can be no assurance that these contractual measures will prevent
the unauthorized disclosure of sensitive data. If the Company and Company are unable to protect the security and privacy of our electronic transactions and data, our business will be materially adversely affected. 

Risks Inherent in the Health Clinic Industry 

Changes in operating costs (including costs for maintenance, insurance), inability to obtain permits required to conduct clinical business
operations, changes in health care laws and governmental regulations, and various other factors may significantly impact the ability of the Company to generate revenues. Certain significant expenditures, including legal fees, borrowing costs,
maintenance costs, insurance costs and related charges must be made to operate the Company’s clinic operation, regardless of whether the Company is generating revenue. 

Material Impact of PIPEDA/HIPPA Legislation on the Company and Company’s Business 

Regulations under PIPEDA/HIPAA governing the confidentiality and integrity of protected health information are complex and are evolving
rapidly. As these regulations mature and become better defined, the Company and Company anticipates that they will continue to directly impact our business. Achieving compliance with these regulations could be costly and distract management’s
attention from its operations. Any failure on the Company and Company’s part to comply with current or future regulations could subject it to significant legal and financial liability, including civil and criminal penalties. In addition,
development of related federal and state regulations and policies regarding the confidentiality of health information or other matters could positively or negatively affect our business. 

The Company and Company’s investments in the United States and Canada are subject to applicable anti-money laundering laws and
regulations. 
 The Company and Company is subject to a variety of laws and regulations domestically and in the United States that involve
money laundering, financial recordkeeping and proceeds of crime, including the Currency and Foreign Transactions Reporting Act of 1970 (commonly known as the Bank Secrecy Act), as amended by Title III of the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act), the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada), as amended and the rules and regulations thereunder, the Criminal
Code (Canada) and any related or similar rules, regulations or guidelines, issued, administered or enforced by governmental authorities in the United States and Canada. 

In February 2014, the Financial Crimes Enforcement Network (“FCEN”) of the Treasury Department issued a memorandum (the
“FCEN Memo”) providing instructions to banks seeking to provide services to alternative therapies-related businesses. The FCEN Memo states that in some circumstances, it is permissible for banks to provide services to these
businesses without risking prosecution for violation of federal money laundering laws. It refers to supplementary guidance that Deputy Attorney General Cole issued to federal prosecutors relating to the prosecution of money laundering offenses
predicated on cannabis-related violations of the CSA. It is unclear at this time whether the current administration will follow the guidelines of the FCEN Memo. 

In the event that any of the Company and Company’s operations, or any proceeds thereof, any dividends or distributions therefrom, or any
profits or revenues accruing from such operations in the United States were 

  
 A-18 

 found to be in violation of money laundering legislation or otherwise, such transactions may
be viewed as proceeds of crime under one or more of the statutes noted above or any other applicable legislation. This could restrict or otherwise jeopardize the ability of the Company and Company to declare or pay dividends, effect other
distributions or subsequently repatriate such funds back to Canada. Furthermore, while the Company and Company has no current intention to declare or pay dividends on its Common Shares in the foreseeable future, in the event that a determination was
made that the Company and Company’s proceeds from operations (or any future operations or investments in the United States) could reasonably be shown to constitute proceeds of crime, the Company may decide or be required to suspend declaring or
paying dividends without advance notice and for an indefinite period of time. 
 In certain circumstances, the Company’s reputation could be damaged

 Damage to the Company’s reputation can be the result of the actual or perceived occurrence of any number of events, and could
include any negative publicity, whether true or not. The increased usage of social media and other web-based tools used to generate, publish and discuss user-generated content and to connect with other users
has made it increasingly easier for individuals and groups to communicate and share opinions and views regarding the Company and its activities whether true or not. Although the Company believes that it operates in a manner that is respectful to all
stakeholders and that it takes care in protecting its image and reputation, the Company will not ultimately have direct control over how it is perceived by others. Reputation loss may result in decreased investor confidence, increased challenges in
developing and maintaining community relations and an impediment to the Company’s overall ability to advance its projects, thereby having material adverse impact on financial performance, financial condition, cash flows and growth prospects.

 Scrutiny of Company’s Investments in the United States 

The Company’s existing investments in the United States, and any future investments, may become the subject of heightened scrutiny by
regulators, stock exchanges and other authorities in Canada. As a result, The Company may be subject to significant direct or indirect interaction with public officials. There can be no assurance that this heightened scrutiny will not in turn lead
to the imposition of certain restrictions on the Resulting Issue’s ability to invest in the United States or any other jurisdiction, in addition to those described herein. 

Currency Fluctuations 
 Due to the
Company’s present operations in the United States, and its intention to continue future operations outside Canada, the Company is expected to be exposed to significant currency fluctuations. Recent events in the global financial markets have
been coupled with increased volatility in the currency markets. 
 A substantially amount of the Company’s revenue will be earned in US
dollars, but a substantial portion of its operating expenses are incurred in Canadian dollars. The Company does not have currency hedging arrangements in place and there is no expectation that the Company will put any currency hedging arrangements
in place in the immediate future. Fluctuations in the exchange rate between the US dollar and the Canadian dollar, may have a material adverse effect on the Company’s business, financial condition and operating results. The Company may, in the
future, establish a program to hedge a portion of its foreign currency exposure with the objective of minimizing the impact of adverse foreign currency exchange movements. However, even if the Company develops a hedging program, there can be no
assurance that it will effectively mitigate currency risks. 
 Requirements for Further Financing 

The Company may need to obtain further financing, whether through debt financing, equity financing or other means. The Company must obtain such
financing through a combination of equity and debt financing and there can be no assurance that the Company can raise the required capital it needs to build and expand its current operations, nor that the capital markets will fund the business of
the Company. Without this additional financing, the Company may be unable to achieve positive cash flow and earnings as quickly as anticipated. There can be no certainty that the Company can obtain these funds, in which case any investment 

  
 A-19 

 in the Company may be lost. The raising of equity funding would also result in dilution of
the equity of the Company’s shareholders. 
 Litigation 

The Company and Company may become party to litigation from time to time in the ordinary course of business which could adversely affect its
business. Should any litigation in which the Company becomes involved be determined against the Company such a decision could adversely affect the Company’s ability to continue operating and the market price for Common Shares and could use
significant resources. Even if the Company is involved in litigation and wins, litigation can redirect significant company resources. 
 Conflicts of
Interest 
 Certain of the directors and officers of the Company are, or may become directors and officers of other companies, and
conflicts of interest may arise between their duties as officers and directors of the Company and as officers and directors of such other companies. 

Health Care Coverage 
 There is a
possibility that healthcare companies can refuse to cover alternative medical treatment costs and due to the high costs associated with these types of treatments, this can lead to consumers moving to a different medical product that is covered. 

Public Health Crises such as the COVID-19 Pandemic and other Uninsurable Risks 

Events in the financial markets have demonstrated that businesses and industries throughout the world are very tightly connected to each other.
General global economic conditions seemingly unrelated to the Company or to the medical health services sector, including, without limitation, interest rates, general levels of economic activity, fluctuations in the market prices of securities,
participation by other investors in the financial markets, economic uncertainty, national and international political circumstances, natural disasters, or other events outside of the Company’s control may affect the activities of the Company
directly or indirectly. The Company’s business, operations and financial condition could also be materially adversely affected by the outbreak of epidemics or pandemics or other health crises. For example, in late December 2019, a novel
coronavirus (“COVID-19”) originated, subsequently spread worldwide and on March 11, 2020, the World Health Organization declared it was a pandemic. The risks of public health crises such as the COVID-19 pandemic to the Company’s business include without limitation, the ability to raise funds, employee health, workforce productivity, increased insurance premiums, limitations on travel, the availability
of industry experts and personnel, disruption of the Company’s supply chains and other factors that will depend on future developments beyond the Company’s control. In particular, the continued spread of the coronavirus globally, prolonged
restrictive measures put in place in order to control an outbreak of COVID-19 or other adverse public health developments could materially and adversely impact the Company’s business in the United States.
There can be no assurance that the Company’s personnel will not ultimately see its workforce productivity reduced or that the Company will not incur increased medical costs or insurance premiums as a result of these health risks. In addition,
the coronavirus pandemic or the fear thereof could adversely affect global economies and financial markets resulting in volatility or an economic downturn that could have an adverse effect on the demand for the Company’s service offerings and
future prospects. Epidemics such as COVID-19 could have a material adverse impact on capital markets and the Company’s ability to raise sufficient funds to finance the ongoing development of its material
business. 
 All of these factors could have a material and adverse effect on the Company’s business, financial condition and results
of operations. The extent to which COVID-19 impacts the Company’s business, including its operations and the market for its securities, will depend on future developments, which are highly uncertain and
cannot be predicted at this time, and include the duration, severity and scope of the outbreak and the actions taken to contain or treat the coronavirus outbreak. It is not always possible to fully insure against such risks, and the Company may
decide not to insure such risks as a result of high premiums or other reasons. Should such liabilities arise, they could reduce or eliminate any future profitability and result in increasing costs and a decline in the value of the Common Shares of
the Company. Even after the COVID-19 pandemic is over, the Company may continue to experience material adverse effects to its business, financial condition 

  
 A-20 

 and prospects as a result of the continued disruption in the global economy and any
resulting recession, the effects of which may persist beyond that time. The COVID-19 pandemic may also have the effect of heightening other risks and uncertainties disclosed and described in this Prospectus
and the AIF. To date, the COVID-19 crisis has not materially impacted the Company’s operations, financial condition, cash flows and financial performance. In response to the outbreak, the Company has
instituted operational and monitoring protocols to ensure the health and safety of its employees and stakeholders, which follow the advice of local governments and health authorities where it operates. The Company has adopted a work from home policy
where possible. The Company continues to operate effectively whilst working remotely. The Company will continue to monitor developments of the pandemic and continuously assess the pandemic’s potential further impact on the Company’s
operations and business. 
 DIVIDENDS 

The Company has never paid any dividends on any of its Common Shares and presently has no intention of paying dividends. The future dividend
policy will be determined by the Company’s board of directors (the “Board”) on the basis of earnings, financial requirements and other relevant factors. 

DESCRIPTION OF CAPITAL STRUCTURE 
 Common Shares

 The authorized share capital of the Company consists of an unlimited number of Common Shares without par value and an unlimited number
of preferred shares issuable in Series . As at December 31, 2020 there were 175,349,946 Common Shares issued and outstanding and no preferred shares outstanding. As of the date hereof there are 180,110,061 Common Shares issued and outstanding
and no preferred shares outstanding.  
 The holders of the Common Shares are entitled to receive notice of and attend all meetings
of the shareholders of the Company and are entitled to one vote in respect of each Share held at such meetings. In the event of liquidation, dissolution or winding-up of the Company, the holders of Common
Shares are entitled to share rateably the remaining property or assets of the Company. The Common Shares do not carry any pre-emptive, subscription, redemption or conversion rights nor do they contain any
sinking or purchase fund provisions. 
 MARKET FOR SECURITIES 

Trading Price and Volume 
 Common Shares 

Throughout 2020, the Common Shares were listed for trading on the Canadian Securities Exchange (the “CSE”) under the trading
symbol “CBII” until the name change in November and then under the trading symbol “SHG”. The Common Shares subsequently commenced trading on the TSXV on January 6, 2021 under the trading symbol “SHG”. The following
table sets out the high and low closing market prices and the volume traded of the Common Shares on the CSE for each month of the financial year ended December 31, 2020,: 

 

													
	 2020
	  	HIGH ($)	 	  	LOW ($)	 	  	VOLUME	 
	 January
	  	 	0.18	 	  	 	0.10	 	  	 	2,380,239	 
	 February
	  	 	0.14	 	  	 	0.07	 	  	 	1,565,510	 
	 March
	  	 	0.10	 	  	 	0.055	 	  	 	1,370,332	 
	 April
	  	 	0.17	 	  	 	0.055	 	  	 	3,015,978	 
	 May
	  	 	0.15	 	  	 	0.12	 	  	 	869,941	 
	 June
	  	 	0.145	 	  	 	0.09	 	  	 	1,575,201	 
	 July
	  	 	0.15	 	  	 	0.09	 	  	 	2,630,641	 
	 August
	  	 	0.13	 	  	 	0.11	 	  	 	831,117	 
	 September
	  	 	0.25	 	  	 	0.135	 	  	 	7,894,425	 
	 October
	  	 	0.63	 	  	 	0.22	 	  	 	20,138,020	 
	 November
	  	 	0.76	 	  	 	0.40	 	  	 	18,603,557	 
	 December
	  	 	1.35	 	  	 	0.65	 	  	 	27,091,371	 

  
 A-21 

 Prior Sales 

The following tables set out summaries of securities issued by the Company during the year ended December 31, 2020 that are not listed or
quoted on a marketplace. 
 Stock Options 
  

							
	 Date of Issue
	  	Number of Option Issued	  	Exercise Price	  	Expiry Date
	 April 17, 2020
	  	2,600,777	  	0.080	  	April 17, 2025
	 August 18, 2020
	  	684,110	  	0.115	  	August 18, 2025
	 August 18, 2020
	  	684,110	  	0.125	  	August 18, 2025
	 August 18, 2020
	  	684,110	  	0.150	  	August 18, 2025
	 August 18, 2020
	  	684,110	  	0.175	  	August 18, 2025
	 September 18, 2020
	  	600,000	  	0.185	  	September 18, 2025
	 November 27, 2020
	  	1,450,000	  	0.51	  	November 27, 2021
	 November 27, 2020
	  	500,000	  	0.60	  	November 27, 2021
	 November 27, 2020
	  	600,000	  	0.60	  	November 27, 2023
	 December 2, 2020
	  	3,176,000	  	0.77	  	December 2, 2025
	 December 14, 2020
	  	500,000	  	1.11	  	December 14, 2022
	 December 30, 2020
	  	223,380	  	1.14	  	December 30, 2025

 Warrants 
  

									
	 Date of Issuance
	  	Description of Transaction	 	Number of
Warrants Issued	  	Exercise Price ($)	  	Expiry Date
	 June 17, 2020
	  	Debt Restructure	 	3,00,000	  	0.14	  	June 17, 2023
	 September 24, 2020
	  	Private
Placement	 	17,126,821	  	0.20	  	September 24, 2022
	 September 24, 2020
	  	Private Placement (Finder Warrants)	 	1,333,778	  	0.20	  	September 24, 2022
	 October 14, 220
	  	Private Placement	 	100,000	  	0.20	  	September 24, 2022
	 November 19, 2020
	  	Broker Warrants	 	872,480	  	0.47	  	November 19, 2022
	 December 30, 2020
	  	Broker Warrants	 	748,000	  	1.00	  	December 30, 2022

 ESCROWED SECURITIES AND SECURITIES SUBJECT TO CONTRACTUAL RESTRICTION ON TRANSFER 

The following table sets out the number of Common Shares that, to the Company’s knowledge, are held in escrow or that are subject to a
contractual restriction on transfer and the percentage that number represents of the outstanding Common Shares for the Company’s most recently completed financial year ended December 31, 2020. 

 

									
	 Designation of class
	  	Number of securities held in escrow or that
are subject to a contractual restriction
on
transfer(1)(2) 	 	  	Percentage of class	 
	 Common Shares
	  	 	19,670,606	 	  	 	11.22	% 

 Notes: 

	 	(1)	 As at December 31, 2020, an aggregate of 12,915,000 Common Shares (the “Mandatory Escrow
Shares”) were held in escrow pursuant to an escrow agreement dated February 27, 2019, between the Company, Capital Transfer Agency ULC, as escrow agent, and certain shareholders of the Company. The Mandatory Escrow Shares are subject
to the following release schedule: (i) 2,767,500 CSE Escrow Shares were released on March 1, 2021, (ii) 2,767,500 CSE Escrow Shares will be released on September 1, 2021, and (iii) 7,380,000 CSE Escrow Shares will be released on
March 1, 2022. 

	 	(2)	 As at December 31, 2019, an aggregate of 6,755,606 Common Shares (the “Voluntary Escrow
Shares”) were held in escrow pursuant to certain escrow agreements, in each case, dated February 27, 2019, between the Company, Capital Transfer Agency ULC, as escrow agent, and certain shareholders of the Company. The Voluntary Escrow
Shares are subject to the following release schedule: (i) 3,430,802 Voluntary Escrow Shares will be released on February 27, 2021, (ii) 1,246,802 Voluntary Escrow Shares will be released on August 27, 2021, and (iii) 2,078,003 Voluntary
Escrow Shares will be released on February 27, 2022.  

  
 A-22 

 DIRECTORS AND OFFICERS 

Name, Occupation and Security Holdings 

The following table sets forth all current directors and executive officers of the Company as at the date hereof, their principal occupations
or employment, the period or periods of service, and the approximate number of voting securities of the Company beneficially owned, directly or indirectly, or over which control or direction is exercised as of the date hereof. The Board currently
consists of seven (7) directors to be elected annually. The term of office of each director will be from the date of the meeting at which he or she is elected until the next annual meeting, or until his or her successor is elected or appointed.

  

							
	 Name, Province and
Country of Residence,
Position
	  	Principal Occupation	  	Date Elected or
Appointed Director	  	Shares Owned or
Controlled
	Pradyum Sekar,(3)
Director, CEO
Oakville, Ontario	  	Chief Executive Officer of the Company	  	February 27, 2019	  	9,174,712
	Kashaf Qureshi Director,
President
Milton, Ontario	  	President of the Company	  	February 27, 2019	  	8,853,058
	Patrick McNamee (3)
Chair, Director
Sarasota, Florida	  	Lead Director Health E Commerce	  	March 16, 2021	  	Nil
	Norton Singhavon (1) (2)
Director
Kelowna, BC	  	Businessman	  	February 27, 2019	  	852,000
	Grace Mellis(1)(2)
Director
Rye, NY	  	Chair Hyre Car Inc.	  	January 14, 2011	  	Nil
	Tom Brogan(3)
Director
Ottawa, Ontario	  	Manager (Economist)	  	January 27, 2020	  	20,000
	Peter Cummins(1)(2)(3)
Director
Guelph, Ontario	  	Retired Pharmacist and R&D Leader	  	July 4, 2019	  	354,000
	Andrew Elinesky
CFO
Toronto, Ontario	  	CFO of the Company	  	N/A	  	Nil
	Paul Kulas
COO
Windsor, California	  	COO of the Company	  	N/A	  	Nil
	Dr. George Feghali
Chief Medical Officer
Santa Fe, New Mexico	  	CMO of the Company	  	N/A	  	Nil

 Notes: 
  

	(1)	 Member of the Audit Committee. 

	(2)	 Member of the Compensation Committee. 

	(3)	 Member of the Nomination and Governance Committee 

Pradyum Sekar (Director, Chief Executive Officer & Co-Founder) 

As co-founder of the Company, Mr. Sekar has spent over 15 years in clinical practice management
owning, operating and consulting with outpatient multi-disciplinary healthcare practices in Canada and the US. Mr. Sekar holds a BSc Hon from the University of the Ottawa and a MBA from Hult International Business School. Following a career in
establishing and operating successful medical practices, Mr. Sekar began consulting with Canadian medical regulatory bodies and agencies to support their network of practitioners in 

  
 A-23 

 the establishment and operation of medical clinics. Mr. Sekar is also a recognized
professor with a registered program for Medical Office Assistants under the Ontario Ministry of Education. 
 Kashaf Qureshi (Director, President, Chief
Technology Officer and Co-Founder) 
 As co-founder of
the Company, Mr. Qureshi brings more than 20 years of extensive operational and entrepreneurial experience in the sales, commercial financing, technology, and the last 10 years directly involved in healthcare, wellness and health technology. An
ardent cost-efficiency executive, Mr. Qureshi has focused on technology infrastructure, operational proficiencies, overall profitability, as well as acquisitions in a series of organizations throughout the healthcare sector. 

Patrick McNamee (Chair of the Board) 

Patrick brings substantial healthcare leadership having been EVP and COO of Express Scripts (NASDAQ:ESRX), where he led all major activities of
the technology-driven pharmacy benefit management company. With a focus on organic and acquisitive growth, McNamee was instrumental in bringing the company from $3B in revenue to over $120B. He also is the former President and CEO of Health
Insurance Innovations where he led a significant and fast turnaround increasing the share price from $4 to $58 in less than two years. 
 Norton
Singhavon (Director) 
 Mr. Singhavon currently serves as the Founder and Executive Chairman of Doventi Capital. Mr. Singhavon
has extensive experience at the senior management level of capital investments and has been involved in several large acquisitions, consolidations, and start-ups in Canada’s legal cannabis sector, both
private and public. As an investor and advisor to numerous companies in Canada’s ACMPR sector, he has been responsible for internally deploying over $45 million into the legal cannabis sector and has been involved in another
$65 million of public M&A ACMPR transactions. Mr. Singhavon was also an advisor to, and early-stage investor in, Invictus MD (TSX.V:IMH). 

Grace Mellis (Director) 
 Grace brings
nearly three decades of strategy, finance, and capital markets experience with executive roles at JP Morgan Chase including as Head of International Strategy and as Investor Services CFO for EMEA. Ms. Mellis is also the former Chief Financial
Officer at Greendot Corporation, a US$3.1B market cap NYSE-listed company. She is also a mentor and investor with Techstars, a global start-up incubation platform. 

Tom Brogan (Director) 
 Mr. Brogan
was an early advocate of using real world evidence to improve health care, for market research and economic studies. He founded Brogan Inc. which became the leader in the novel use of drug claim data. He sold Brogan Inc. in 2010 to the world leader
in health care data (IQVIA). He became VP Global Oncology for IMS Health (now IQVIA) and since 2014 has been the Chief Executive Officer and Chairman of the Board of Vestrum Health, where he has developed the data for and applications of electronic
health records for use by clinicians, economists and pharmaceutical marketers. 
 Peter Cummins (Director) 

Mr. Cummins is a pharmacist by profession and a retired & Johnson research and development leader. He is currently involved in a
number of volunteer and philanthropic endeavours. He spent over two decades with Johnson & Johnson, including executive leadership roles overseeing research and development, product development, external innovation, and regulatory affairs
across Canada, the US, and Europe. Prior to Johnson & Johnson, Mr. Cummins served in regulatory and scientific affairs roles at Procter & Gamble, and he was the Director of Pharmacy at Cambridge Memorial Hospital. He holds a BSc in
Pharmacy from the University of Toronto and an MBA from Wilfrid Laurier University. Mr. Cummins has extensive experience in traditional pharmaceutical research and development and brings a crucial understanding and network to the Company. 

  
 A-24 

 Andrew Elinesky (Chief Financial Officer) 

Mr. Elinesky brings over 20 years of experience as a CFO and senior financial leader for publicly traded companies in both Canada and the
US. With a focus on M&A and consolidation experience, Andrew was SVP and CFO at McEwen Mining where he managed equity and debt financing of over $150M and a $35M asset acquisition and $40M company acquisition. He also has held various senior
leadership and treasury roles at Heinz UK, Diageo, and Worldcom UK. Andrew graduated from Oxford Brookes University and is Treasurer for the Canadian Network for the Prevention of Elder Abuse. 

Paul Kulas (Chief Operating Officer) 

Paul brings a diverse set of healthcare expertise having been VP Operations for St. Joseph Health Medical Group which has over 120,000
caregivers across 51 hospitals and more than 1,000 clinics. He was instrumental in implementing the organization’s telehealth services and other new technologies. He holds a Master of Science in Administration from Central Michigan University.

 Dr. George Feghali (Chief Medical Officer] 

Dr. Feghali brings over 30 years of clinical expertise and more than 20 years of senior leadership experience to the team having spent 17
years with TriHealth as Chief Medical Officer and COO of Emirates Hospitals Group (now Emirates Healthcare). Dr. Feghali has been responsible for quality, safety and service of healthcare for multiple organizations with over $1B in revenue.

 Cease Trade Orders, Bankruptcies, Penalties or Sanctions 

For the purposes of this section “Order” means: 
  

	 	(a)	 a cease trade order; 

 

	 	(b)	 an order similar to a cease trade order; or 

 

	 	(c)	 an order that denied the relevant company access to any exemption under securities legislation;

 that was in effect for more than 30 days. 

None of the directors or executive officers of the Company or any shareholder holding a sufficient number of securities of the Company to
materially affect control of the Company: 
  

	 	(a)	 is, as of the date of this AIF, or has been, within 10 years before the date of this AIF, a director or
executive officer of any company that: 

  

	 	(i)	 was the subject of an Order that was issued while the director or executive officer was acting in the
capacity as director, chief executive officer or chief financial officer; 

  

	 	(ii)	 was subject to an Order that was issued after the director or executive officer ceased to be a director,
chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer; or 

 

	 	(iii)	 while that person was acting in that capacity, or within a year of that person ceasing to act in that
capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceeding, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed
to hold its assets; or 

  

	 	(b)	 has, within the 10 years before the date of this AIF, become bankrupt, made a proposal under any legislation
relating to bankruptcy or insolvency, or become subject to or 

  
 A-25 

	 	 
instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the proposed director. 

None of the directors or executive officers of the Company, or a shareholder holding a sufficient number of securities of the Company to
affect materially the control of the Company has, within the last 10 years, been subject to: (i) any penalties or sanctions imposed by a court relating to Canadian securities legislation or by a Canadian securities regulatory authority or has
entered a settlement agreement with a Canadian securities regulatory authority; or (ii) any other penalties or sanctions imposed by a court or regulatory body that would be likely to be considered important to a reasonable investor making an
investment decision. 
 Conflicts of Interest 

There are no known existing or potential conflicts of interest among the Company and the directors and officers of the Company as a result of
their outside business interests except that certain of the directors and officers may serve as directors, officers, promoters and members of management of other companies and therefore it is possible that a conflict may arise between their duties
as a director and officer of the Company and their duties as a director, officer, promoter or member of management of such other companies. 

The directors and officers of the Company have been advised of the existence of laws governing accountability of directors and officers
regarding corporate opportunity and requiring disclosures by directors of conflicts of interest, and the Company will rely upon such laws in respect of any directors’ and officers’ conflicts of interest or in respect of any breaches of
duty by any of the directors or officers. All such conflicts shall be disclosed by such directors or officers and treated in accordance with the applicable laws of Jersey, Channel Islands and the Company’s constating documents. 

PROMOTERS 
 The founders of the Company,
Pradyum Sekar, Chief Executive Officer and a director of the Company, and Kashaf Qureshi, the President, Chief Technology Officer and a director of the Company, are considered to be Promoters of the Company. Mr. Sekar owns 9,174,712 Common
Shares representing 5.09% of the issued and outstanding Common Shares on an undiluted basis and Mr. Qureshi owns 8,853,058 Common Shares, representing 4.91% of the issued and outstanding Common Shares on an undiluted basis. 

Other than as disclosed below or elsewhere in this AIF, no person who was a promoter of the Company within the last two years: 

 

	1.	 received anything of value directly or indirectly from the Company or a subsidiary other than the
compensation including stock options, as more particularly described in the Management Information Circular of the Company dated July 20, 2020; 

  

	2.	 sold or otherwise transferred any asset to the Company or a subsidiary within the last two years.

 LEGAL PROCEEDINGS AND REGULATORY ACTIONS 

The Company was not subject to any material legal proceedings during its most recently completed financial year, nor is the Company or any of
its properties a party to or the subject of any such proceedings, and no such proceedings are known to be contemplated. The Company may be involved in routine, non-material litigation arising in the ordinary
course of business, from time to time. 
 There were no penalties or sanctions imposed against the Company by a court relating to provincial
and territorial securities legislation or by a securities regulatory authority during its most recently completed financial year, nor have there been any other penalties or sanctions imposed by a court or regulatory body against the Company, and the
Company has not entered into any settlement agreements before a court relating to provincial and territorial securities legislation or with a securities regulatory authority. 

  
 A-26 

 INTERESTS OF MANAGEMENT IN MATERIAL TRANSACTIONS 

To the knowledge of management of the Company, no director or executive officer of the Company, person or company that beneficially owns,
controls or directs, directly or indirectly, more than 10% of the Common Shares, or any associate or affiliate of any such persons, has or had any material interest, direct or indirect, in any transaction within the Company’s three most
recently completed financial years which has materially affected or will materially affect the Company or any of its subsidiaries other than as set out herein. 

TRANSFER AGENT AND REGISTRAR 
 The
registrar and transfer agent of the Company is Capital Transfer Agency, having an address of 390 Bay Street Suite 920, Toronto, Ontario, Canada, M5H 2Y2.  

MATERIAL CONTRACTS 
 Other than those
entered into in the ordinary course of business, there were not material contracts of the Company that were entered into in the most recently completed financial year or which were entered into before the most recently completed financial year but
are still in effect as of the date of this AIF. 
 EXPERTS AND INTERESTS OF EXPERTS 

Auditors 
 The auditor of the
Company is Grant Thornton LLP, located at 201 City Centre Drive, Suite 501, Mississauga, Ontario, L5B 2T4. 
 The auditor of the Company,
Grant Thornton LLP, has informed the Company that it is independent with respect to the Company within the meaning of the Rules of Professional Conduct of Chartered Professional Accountants of Ontario. 

ADDITIONAL INFORMATION 
 Additional
information relating to the Company may be found through a database search at SEDAR at www.sedar.com. Additional information on the Company, including directors’ and officers’ remuneration and indebtedness, principal holders of the
Company’s securities, and securities authorized for issuance under equity compensation plans, is contained in the Company’s management information circular dated July 20, 2020, which may be found on SEDAR. 

Additional financial information regarding the Company is provided in the Company’s audited annual financial statements and
management’s discussion and analysis for the year ended December 31, 20120, which may be found on SEDAR. 

  
 A-27 

 SCHEDULE A 

AUDIT COMMITTEE DISCLOSURE 
 Audit
Committee Mandate 
 The Audit Committee is a committee of the Board established for the purpose of overseeing the accounting and
financial reporting processes of the Company and annual external audits of the consolidated financial statements. The Audit Committee has formally set out its responsibilities and composition requirements in fulfilling its oversight in relation to
the Company’s internal accounting standards and practices, financial information, accounting systems and procedures. See Appendix “A” hereto for a copy of the Audit Committee Charter of the Company. 

Composition of the Audit Committee 
 The
members of the Audit Committee are Ms Mellis (Chair), Mr. Singhavon and Mr. Cummins. 
 All three independent members of the audit committee
as contemplated by NI 51-110. All of the Audit Committee members are “financially literate”, as defined in NI 52-110, as all have the industry experience
necessary to understand and analyze financial statements of the Company, as well as the understanding of internal controls and procedures necessary for financial reporting. The Audit Committee is responsible for review of both interim and annual
financial statements for the Company. For the purposes of performing their duties, the members of the Audit Committee have the right at all times, to inspect all the books and financial records of the Company and any subsidiaries and to discuss with
management and the external auditors of the Company any accounts, records and matters relating to the financial statements of the Company. The Audit Committee members meet periodically with management and annually with the external auditors. 

Relevant Education and Experience 
 Each
member of the audit committee has adequate education and experience that is relevant to their performance as an audit committee member and, in particular, the requisite education and experience that have provided the member with: 

 

	 	•	 	 an understanding of the accounting principles used by the issuer to prepare its financial statements, and the
ability to assess the general application of those principles in connection with estimates, accruals and reserves; 

  

	 	•	 	 experience preparing, auditing, analyzing or evaluating financial statements that present a breadth and level
of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the issuer’s financial statements, or experience actively supervising individuals engaged
in such activities; and 

  

	 	•	 	 an understanding of internal controls and procedures for financial reporting. 

Grace Mellis (Chair) 
 Ms. Mellis has
a robust background in strategy and finance leadership roles with over 28 years of success and experience. Ms. Mellis spent almost a decade at JPMorgan Chase serving as Managing Director, Head of International Strategy, and Investor Services
CFO for EMEA within the Corporate and Investment Bank. Ms. Mellis is a former CFO and VP of Corporate Finance and Business Intelligence at Greendot Corporation. She is the founder and director of IGA Capital which provides consulting and
advisory services to primarily early-stage companies. Ms. Mellis is a mentor and investor with Techstars, a global start-up incubation platform. She holds an MBA from Harvard Business School and a BA from
Harvard University. 

  
 A-28 

 Norton Singhavon (Director) 

Mr. Singhavon currently serves as the Founder and Executive Chairman of Doventi Capital. Mr. Singhavon has extensive experience at
the senior management level of capital investments and has been involved in several large acquisitions, consolidations, and start-ups in Canada’s legal cannabis sector, both private and public. As an
investor and advisor to numerous companies in Canada’s ACMPR sector, he has been responsible for internally deploying over $45 million into the legal cannabis sector and has been involved in another $65 million of public M&A ACMPR
transactions. Mr. Singhavon was also an advisor to, and early-stage investor in, Invictus MD (TSX.V:IMH). 
 Peter Cummins (Director) 

Mr. Cummins, in addition to possessing professional qualifications as a Pharmacist, received his MBA in 1988 from Lazaridis School of
Business and Economics (Wilfrid Laurier University). In this program he completed numerous finance and accounting courses. He has also served on the Management Boards of Procter & Gamble Pharmaceuticals Canada, Inc., McNeil Consumer
Healthcare Canada, and McNeil Consumer Healthcare US. McNeil is a Johnson & Johnson company. In these roles he was regularly involved in review and assessment of the respective businesses’ financial statements, and as such is familiar
with accounting issues, controls, and procedures. 
 Audit Committee Oversight 

At no time since the commencement of the Company’s most recently completed financial year was a recommendation by the Audit Committee to
nominate or compensate an external auditor not adopted by the Board.  
 Pre-Approval Policies and
Procedures 
 Subject to the requirements of NI 52-110, the engagement of non-audit services is considered by the Audit Committee and, where applicable, the Company’s Board, on a case-by-case basis. 

Auditor Service Fees 
 The following table
provides detail in respect of audit, audit related, tax and other fees billed to the Company by the external auditors for professional services provided to the Company and its subsidiaries:  

 

									
	 	  	2020	 	  	2019	 
	 Audit fees
	  	$	321,000	 	  	$	244,038	 
	 Audit-related fees
	  	$	72,225	 	  	$	1,250	 
	 Tax fees
	  	$	6,420	 	  	$	38,788	 
	 Other fees
	  	$	44,168	 	  	$	0	 
		  	  
	  
	 	  	  
	  
	 
	 Total
	  	$	443,813	 	  	$	284,076	 

 Audit Fees: Audit fees were paid for professional services rendered by the auditors for the audit of
the Company’s annual financial statements as well as services provided in connection with statutory and regulatory filings. 

Audit-Related Fees: Audit-related fees were paid for professional services rendered by the auditors and were comprised primarily of the
reading of quarterly financial statements. 
 Tax Fees: Tax fees were paid for tax compliance, tax advice and tax planning
professional services. These services included preparing and/or reviewing tax returns. 
 All Other Fees: Fees such as those payable
for professional services which include bookkeeping, accounting advice, primarily relating to preparation of IFRS compliant financial statements, and preparation of management’s discussion and analysis, and due diligence. 

  
 A-29 

 Reliance on Certain Exemptions 

The Company is relying on the exemption from the requirements of Part 5 (Reporting Obligations) as set out in section 6.1 of NI 52-110. 

  
 A-30 

 APPENDIX A TO SCHEDULE A 

SKYIGHT HEALTH GROUP INC. 

CHARTER OF THE AUDIT COMMITTEE 

(as approved April 19, 2021) 
 1.
DEFINITIONS 
 1.1 In this Charter: 
  

	 	(a)	 “Board” means the board of directors of the Company; 

 

	 	(b)	 “CEO” means the Chief Executive Officer; 

 

	 	(c)	 “Company” means Skylight Health Group Inc.; 

 

	 	(d)	 “Company Management” means Company Officers and senior management, collectively;

  

	 	(e)	 “Company Officers” means the CEO and non-CEO
Officers, collectively; and 

  

	 	(f)	 “Directors” means directors of the Company; 

 

	 	(g)	 “non-CEO Officer” means (i) a chair or
vice-chair of the Board, a chief operating officer, chief financial officer, chief technology officer, president, vice president, secretary, assistant secretary, treasurer, assistant treasurer and general manager; (ii) an individual who is
designated as an officer under a bylaw or similar authority of the Company; and (iii) an individual who performs functions similar to those normally performed by an individual referred to in (i) or (ii) above; 

 

	 	(h)	 “senior management” means members of management who are not Company Officers.

 2. PURPOSE 
 2.1
The primary responsibility of the Audit Committee is that of oversight of the financial reporting process on behalf of the Board. This includes oversight responsibility for financial reporting and continuous disclosure, oversight of external audit
activities, oversight of financial risk and financial management control, and oversight responsibility for compliance with tax and securities laws and regulations as well as whistle blowing procedures. The Audit Committee is also responsible for the
other matters as set out in this charter and/or such other matters as may be directed by the Board from time to time. The Audit Committee should exercise continuous oversight of developments in these areas. 

3. COMPOSITION AND OPERATIONS 
 3.1 Each
member of the Audit Committee must be an independent director of the Company as defined in sections 1.4 and 1.5 of National Instrument 52-110 – Audit Committees (“NI
52-110”) and must also satisfy the independence requirements of each exchange on which the Company’s shares are listed. In addition, if the Company is listed on a “national securities
exchange” in the United States, including the NASDAQ stock exchange and its successors (a “U.S. Exchange”), each member of Audit Committee will be independent in accordance with each of
(i) Section 10A-3 of 

  
 A-31 

 
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and (ii) the independence requirements of the U.S. Exchange listing rules. 

3.2 The Audit Committee will consist of at least three members, all of whom shall be financially literate, provided that an Audit Committee
member who is not financially literate may be appointed to the Audit Committee if such member becomes financially literate within a reasonable period of time following his or her appointment. Upon graduating to a more senior stock exchange, if
required under the rules or policies of such exchange, the Audit Committee will consist of at least three members, all of whom shall meet the experience and financial literacy requirements of such U.S. Exchange and of NI 52-110. If the Company becomes listed on a U.S. Exchange, at least one member of the Audit Committee will qualify as an “audit committee financial expert”, as defined under the Exchange Act (unless the
Board has determined to rely on an exemption from compliance available to foreign issuers). 
 3.3 The Committee shall operate under the
guidelines applicable to all Board committees. 
 3.4 The members of the Audit Committee will be appointed annually (and from time to time
thereafter to fill vacancies on the Audit Committee) by the Board. An Audit Committee member may be removed or replaced at any time at the discretion of the Board and will cease to be a member of the Audit Committee on ceasing to be an independent
director. 
 3.4 The Chair of the Audit Committee will be appointed by the Board. 

4. DUTIES AND RESPONSIBILITIES 
 4.1 The
duties and responsibilities of the Audit Committee include: 
 4.2 recommending to the Board the external auditor to be nominated by the
Board; 
 4.3 recommending to the Board the compensation of the external auditor to be paid by the Company in connection with
(i) preparing and issuing the audit report on the Company’s financial statements, and (ii) performing other audit, review or attestation services; 

4.4 reviewing the external auditor’s annual audit plan, fee schedule and any related services proposals (including meeting with the
external auditor to discuss any deviations from or changes to the original audit plan, as well as to ensure that no management restrictions have been placed on the scope and extent of the audit examinations by the external auditor or the reporting
of their findings to the Audit Committee); 
 4.5 overseeing the work of the external auditor; 

4.6 ensuring that the external auditor is independent by: 

(i) receiving a report annually from the external auditors with respect to their independence, such report to include
disclosure of all engagements (and fees related thereto) for non-audit services provided to Company; and 

(ii) requiring the independent auditor to provide to the Company annually formal written statements delineating all
relationships between the auditor and the Company, consistent with applicable CPAB and PCAOB requirements, and actively engage with the independent auditor regarding ensuring independence of auditor 

  
 A-32 

 4.7 ensuring that the external auditor is in good standing with the Canadian Public
Accountability Board and, if the Company is listed on a U.S. Exchange or is otherwise subject to the reporting requirements of the Exchange Act, the U.S. Public Company Accounting Oversignt Board, by receiving, at least annually, a report by the
external auditor on the audit firm’s internal quality control processes and procedures, such report to include any material issues raised by the most recent internal quality control review, or peer review, of the firm, or any governmental or
professional authorities of the firm within the preceding five years, and any steps taken to deal with such issues; 
 4.8 ensuring that the
external auditor meets the rotation requirements for partners and staff assigned to the Company’s annual audit by receiving a report annually from the external auditors setting out the status of each professional with respect to the appropriate
regulatory rotation requirements and plans to transition new partners and staff onto the audit engagement as various audit team members’ rotation periods expire; 

4.9 reviewing and discussing with management and the external auditor the annual audited and quarterly unaudited financial statements and
related Management Discussion and Analysis (“MD&A”), including the appropriateness of the Company’s accounting policies, disclosures (including material transactions with related parties), reserves, key estimates and
judgements (including changes or variations thereto) and obtaining reasonable assurance that the financial statements are presented fairly in accordance with IFRS and the MD&A is in compliance with appropriate regulatory requirements; 

4.10 reviewing and discussing with management and the external auditor major issues regarding accounting principles and financial statement
presentation including any significant changes in the selection or application of accounting principles to be observed in the preparation of the financial statements of the Company and its subsidiaries; 

4.11 reviewing and discussing with management and the external auditor the external auditor’s written communications to the Audit
Committee in accordance with generally accepted auditing standards and other applicable regulatory requirements arising from the annual audit and quarterly review engagements; 

4.12 reviewing and discussing with management and the external auditor all earnings press releases, as well as financial information and
earnings guidance provided to analysts and rating agencies prior to such information being disclosed; 
 4.13 reviewing the external
auditor’s report to the shareholders on the Company’s annual financial statements; 
 4.14 reporting on and recommending to the
Board the approval of the annual financial statements and the external auditor’s report on those financial statements, the quarterly unaudited financial statements, and the related MD&A and press releases for such financial statements,
prior to the dissemination of these documents to shareholders, regulators, analysts and the public; 
 4.15 satisfying itself on a regular
basis through reports from management and related reports, if any, from the external auditors, that adequate procedures are in place for the review of the Company’s disclosure of financial information extracted or derived from the
Company’s financial statements that such information is fairly presented; 

  
 A-33 

 4.16 overseeing the adequacy of the Company’s system of internal accounting controls
and obtaining from management and the external auditor summaries and recommendations for improvement of such internal controls and processes, together with reviewing management’s remediation of identified weaknesses; 

4.17 reviewing with management and the external auditors the integrity of disclosure controls and internal controls over financial reporting;

 4.18 reviewing and monitoring the processes in place to identify and manage the principal risks that could impact the financial reporting
of the Company and assessing, as part of its internal controls responsibility, the effectiveness of the over-all process for identifying principal business risks and report thereon to the Board; 

4.19 satisfying itself that management has developed and implemented a system to ensure that the Company meets its continuous disclosure
obligations through the receipt of regular reports from management and the Company’s legal advisors on the functioning of the disclosure compliance system, (including any significant instances of
non-compliance with such system) in order to satisfy itself that such system may be reasonably relied upon; 

4.20 resolving disputes between management and the external auditor regarding financial reporting; 

4.21 establishing procedures for: 

(i) the receipt, retention and treatment of complaints received by the Company from employees and others regarding accounting,
internal accounting controls or auditing matters and questionable practises relating thereto; and 
 (ii)the confidential,
anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters. 
 4.23 reviewing and
approving the Company’s hiring policies with respect to partners or employees (or former partners or employees) of either a former or the present external auditor; 

4.24 pre-approving all non-audit services to be provided to
the Company or any subsidiaries by the Company’s external auditor (the Chair of the Audit Committee has the authority to pre-approve in between regularly scheduled Audit Committee meetings any non-audit service of less than $50,000, however such approval will be presented to the Audit Committee at the next scheduled meeting for formal approval); 

4.25 overseeing compliance with regulatory authority requirements for disclosure of external auditor services and Audit Committee activities;

 4.26 establishing procedures for: 

(i) reviewing the adequacy of the Company’s insurance coverage, including the Directors’ and Officers’ insurance
coverage; 
 (ii) reviewing activities, organizational structure, and qualifications of the Chief Financial Officer
(“CFO”) and the staff in the financial reporting area and ensuring that 

  
 A-34 

 
matters related to succession planning within the Company are raised for consideration at the Board; 

(iii) obtaining reasonable assurance as to the integrity of the Chief Executive Officer (“CEO”) and other senior
management and that the CEO and other senior management strive to create a culture of integrity throughout the Company; 

(iv) reviewing fraud prevention policies and programs, and monitoring their implementation; 

(v) reviewing regular reports from management and others (e.g., external auditors, legal counsel) with respect to the
Company’s compliance with laws /regulations and treaty or contractual obligations having a material impact on the financial statements including, without limiting the foregoing: 

(A) Tax and financial reporting laws and regulations; 

(B) Legal withholding and reporting requirements; 

(C) Environmental protection laws and regulations; 

(D) Treaty, contractual or consultation obligations with First Nation, Inuit or Metis communities 

(E) Other laws and regulations, both domestic and foreign where applicable, which may expose directors to liability; and 

4.27 A regular part of Audit Committee meetings involves the appropriate orientation of new members as well as the continuous education of all
members. Items to be discussed include specific business issues as well as new accounting and securities legislation that may impact the organization. The Chair of the Audit Committee will regularly canvass the Audit Committee members for continuous
education needs and in conjunction with the Board education program, arrange for such education to be provided to the Audit Committee on a timely basis. 

4.28 On an annual basis the Audit Committee shall review and assess the adequacy of this charter taking into account all applicable
legislative and regulatory requirements as well as any best practice guidelines recommended by regulators or stock exchanges with whom the Company has a reporting relationship and, if appropriate, recommend changes to the Audit Committee charter to
the Board for its approval. 
 5. AUTHORITY AND RESOURCES 

5.1 The Audit Committee has the authority, without further approval of the Board of Directors to: 

 

	 	(a)	 engage independent legal counsel, consultants and other advisors (each, an “Independent
Advisor”) as it determines necessary to carry out its duties; 

  

	 	(b)	 set and pay the compensation for any such advisors employed by the Committee, funded by the Company;

  
 A-35 

	 	(c)	 communicate directly with external advisors and any other personnel of the Company; and

  

	 	(d)	 have unrestricted access to any personnel and documents of the Company relevant to performance of the
Committee’s duties. 

 5.2 The Committee shall be directly responsible for the appointment, compensation and
oversight of the work of any Independent Advisor retained by the Committee. The Company must provide for appropriate funding, as determined by the Committee, for payment of reasonable compensation to any Independent Advisor retained by the
Committee. 
 5.3 Notwithstanding its authority to engage Independent Advisors, the Committee may select an Independent Advisor to the
Committee only after taking into consideration, all factors relevant to that person’s independence from management, including the following: 
  

	 	(a)	 the provision of other services to the Company by the person that employs the Independent Advisor;

  

	 	(b)	 the amount of fees received from the Company by the person that employs the Independent Advisor, as a
percentage of the total revenue of the person that employs the Independent Advisor; 

  

	 	(c)	 the policies and procedures of the person that employs the Independent Advisor that are designed to prevent
conflicts of interest; (d) any business or personal relationship of the Independent Advisor with a member of the Committee; 

  

	 	(e)	 any stock of the Company owned by the Independent Advisor; and 

 

	 	(f)	 any business or personal relationship of the Independent Advisor or the person employing the Independent
Advisor with an executive officer of the Company. 

 5.4 Notwithstanding the engagement of an Independent Advisor or the
receipt of advice or recommendations from such an Independent Advisor, the Committee: 
  

	 	(a)	 will in no way be obligated to implement or act consistently with the advice or recommendations of the
Independent Advisor; and 

  

	 	(b)	 will at all times exercise its own judgment in the fulfillment of the duties of the Committee.

 6. MEETINGS 
 6.1
The quorum for a meeting of the Audit Committee is a majority of the members of the Audit Committee. 
 6.2 The Chair of the Audit Committee
shall be responsible for leadership of the Audit Committee, including scheduling and presiding over meetings, preparing agendas, overseeing the preparation of briefing documents to circulate during the meetings as well as pre-meeting 

  
 A-36 

 
materials, and making regular reports to the Board. The Chair of the Audit Committee will also maintain regular liaison with the CEO, CFO, and the lead external audit partner. 

6.3 The Audit Committee will meet as often as required to discharge its duties and responsibilities under this Charter, which meetings will be
held at least quarterly. 
 6.4 The Audit Committee will meet in camera separately with each of the CEO and the CFO of the Company at least
annually to review the financial affairs of the Company. 
 6.5 The Audit Committee will meet with the external auditor of the Company in
camera at least twice each year, at such time(s) as it deems appropriate, to review the external auditor’s examination and report. 

6.6 The external auditor must be given reasonable notice of and has the right to appear before and to be heard at, each meeting of the Audit
Committee. 
 6.7 Each of the Chair of the Audit Committee, members of the Audit Committee, Chair of the Board, external auditor, CEO, CFO
or secretary shall be entitled to request that the Chair of the Audit Committee call a meeting which shall be held within 48 hours of receipt of such request to consider any matter that such individual believes should be brought to the attention of
the Board or the shareholders. 
 7. ACCOUNTABILITY 

7.1 The Audit Committee will report, at least annually, to the Board regarding the Audit Committee’s examinations and recommendations.

 7.2 The Audit Committee will report its activities to the Board to be incorporated as a part of the minutes of the Board meeting at which
those activities are reported. 
 8. MINUTES 

8.1 The Audit Committee will maintain written minutes of its meetings. 

  
 A-37EX-4.2

 Exhibit 4.2 
  

 
 Skylight Health Group Inc. (formerly CB2 Insights Inc.) 

Audited Consolidated Financial Statements 

For the years ended December 31, 2020 and 2019. 

(Expressed in Canadian Dollars) 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

CONSOLIDATED FINANCIAL STATEMENTS 
 DECEMBER 31, 2020 AND 2019 

 

					
	 Management’s Responsibility for Consolidated Financial Reporting
	  	 	1	 
	 Independent Auditor’s Report
	  	 	2-4	 
	 Consolidated Financial Statements
	  			
	 Consolidated Statements of Financial Position
	  	 	5	 
	 Consolidated Statements of Loss and Comprehensive Loss
	  	 	6	 
	 Consolidated Statements of Cash Flows
	  	 	7	 
	 Consolidated Statements of Changes in Shareholders’ Equity
	  	 	8-9	 
	 Notes to the Consolidated Financial Statements
	  	 	10-58	 

  

 Skylight Health Group Inc. (formerly CB2 Insights Inc.) 

Audited Consolidated Financial Statements 
 For the years ended December 31,
2020 and 2019 
 (Expressed in Canadian Dollars) 
 Management’s
Report on Financial Statements 
 The consolidated financial statements of Skylight Health Group Inc. (formerly CB2 Insights Inc.) (“the
Company”) have been prepared by, and are the responsibility of, the Company’s management. The consolidated financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the
International Accounting Standards Board (“IASB”) and reflect management’s best estimates and judgments based on information currently available. In the opinion of management, the accounting practices utilized are appropriate in the
circumstances and the consolidated financial statements fairly reflect the financial position and results of operations of the Company. 
 The Board
of Directors is responsible for ensuring management fulfills its financial reporting responsibilities. The Audit Committee meets with the Company’s management and external auditors to discuss the results of the audit and to review the
consolidated financial statements prior to the Audit Committee’s submission to the Board of Directors for approval. The Audit Committee also reviews with management the Company’s systems of internal control, and reviews the scope of the
external auditors’ audit and non-audit work. The Audit Committee is composed entirely of directors not involved in the daily operations of the Company who are thus considered to be free from any
relationship that could interfere with their exercise of independent judgment as a committee member. 
 Grant Thornton LLP, an independent firm of
Chartered Professional Accountants, is appointed by the shareholders to audit the consolidated financial statements and report directly to them; their report follows. The external auditors have full and free access to, and meet periodically and
separately with, both the Committee and management to discuss their audit findings. 
  

			
	 April 19, 2021
	  	
		
	 “Pradyum Sekar”
	  	 “Andrew Elinesky”

		
	 Signed: CEO
	  	 Signed: CFO

  
 1 

 

 
  

			
		 	  

Grant Thornton LLP

		 	 Suite 501
 201 City Centre Drive

		 	Mississauga, ON
		 	L5B 2T4
		
		 	T +1 416 366 0100
		 	F +1 905 804 0509

 Independent auditor’s report 
 To the
shareholders of Skylight Health Group Inc. 
 Opinion 
 We have audited
the consolidated financial statements of Skylight Health Group Inc. (formerly CB2 Insights Inc.) (the “Company”), which comprise the consolidated statements of financial position as at December 31, 2020 and December 31, 2019 and
the consolidated statements of loss and comprehensive loss, consolidated statements of changes in shareholders’ equity and consolidated statements of cash flows for the years then ended, and notes to the consolidated financial statements,
including a summary of significant accounting policies. 
 In our opinion, the accompanying consolidated financial statements present fairly, in all material
respects, the consolidated financial position of the Company as at December 31, 2020 and December 31, 2019, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with
International Financial Reporting Standards (IFRSs). 
 Basis for Opinion 

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the
Auditor’s Responsibilities for the Audit of the consolidated Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the consolidated
financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

 Information Other than the Consolidated Financial Statements and Auditor’s Report Thereon 

Management is responsible for the other information. The other information comprises the Management Discussion and Analysis but does not include the consolidated
financial statements and our auditor’s report thereon. 
 Our opinion on the consolidated financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon. 

  

					
		 	 Audit | Tax | Advisory
	  	
	© Grant Thornton LLP. A Canadian Member of Grant Thornton International Ltd	  	    2

 In connection with our audit of the consolidated financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. 

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have
nothing to report in this regard. 
 Responsibilities of Management and Those Charged with Governance for the Consolidated Financial
Statements     
 Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance
with International Financial Reporting Standards (IFRSs), and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to
fraud or error. 
 In preparing the consolidated financial statements, management is responsible for assessing the Company’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. 

Those charged with governance are responsible for overseeing the Company’s financial reporting process. 

Auditor’s Responsibilities for the Audit of the consolidated Financial Statements 

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will
always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken
on the basis of these consolidated financial statements. 
 As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also: 
  

	 	•	 	 Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher
than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. 

  

	 	•	 	 Obtain an understanding of internal control relevant to the audit 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 Company’s internal control.     

  

	 	•	 	 Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management. 

  

	 	•	 	 Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required
to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date
of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern. 

  

					
		 	 Audit | Tax | Advisory
	  	
	© Grant Thornton LLP. A Canadian Member of Grant Thornton International Ltd	  	    3

	 	•	 	 Evaluate the overall presentation, structure and content of the consolidated financial statements, including the
disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation. 

  

	 	•	 	 Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the Company to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. 

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including
any significant deficiencies in internal control that we identify during our audit. 
 We also provide those charged with governance with a statement that we have
complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. 

The engagement partner on the audit resulting in this independent auditor’s report is Grant Cuylle.  

 

							
		 		 		 	

	Mississauga, Canada	 		 		 	Chartered Professional Accountants
	April 19, 2021	 		 		 	Licensed Public Accountants

  

					
		 	 Audit | Tax | Advisory
	  	
	© Grant Thornton LLP. A Canadian Member of Grant Thornton International Ltd	  	    4

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Consolidated Statements of Financial Position 
 (Expressed in Canadian
dollars) 
  

													
	 	  	 	 	  	 	 	 	 	 
	 As at December 31,
	  	 	 	  	2020
$	 	 	2019
$	 
	 ASSETS
	  				  				 			
	 Current assets
	  				  				 			
	 Cash
	  				  	 	20,051,734	 	 	 	130,273	 
	 Inventories
	  				  	 	31,319	 	 	 	36,965	 
	 Trade and other receivables
	  	 	Note 12	 	  	 	528,827	 	 	 	309,353	 
	 Prepaid expenses
	  				  	 	749,201	 	 	 	25,436	 
		  				  	  
	  
	 	 	  
	  
	 
	 Total current assets
	  				  	 	21,361,081	 	 	 	502,027	 
	 Non-current
	  				  				 			
	 Furniture and equipment
	  	 	Note 13	 	  	 	88,229	 	 	 	182,028	 
	 Right-of-use assets
	  	 	Note 14	 	  	 	1,325,087	 	 	 	1,532,128	 
	 Computer software and technology
	  	 	Note 15	 	  	 	1,129,117	 	 	 	1,312,170	 
	 Other Intangible assets
	  	 	Note 16	 	  	 	5,344,131	 	 	 	4,321,118	 
	 Goodwill
	  	 	Note 16	 	  	 	2,224,432	 	 	 	1,634,611	 
		  				  	  
	  
	 	 	  
	  
	 
	 Total assets
	  				  	 	31,472,077	 	 	 	9,484,082	 
		  				  	  
	  
	 	 	  
	  
	 
	 LIABILITIES AND SHAREHOLDERS’ EQUITY
	  				  				 			
	 Current liabilities
	  				  				 			
	 Accounts payable and accrued liabilities
	  	 	Note 17	 	  	 	1,123,275	 	 	 	1,849,115	 
	 Payable to related parties
	  				  	 	—  	 	 	 	24,840	 
	 Promissory note payable
	  	 	Note 18	 	  	 	—  	 	 	 	4,003,465	 
	 Loan payable
	  	 	Note 20	 	  	 	446,196	 	 	 	—  	 
	 Purchase consideration payable
	  	 	Note 11	 	  	 	526,393	 	 	 	566,318	 
	 Lease liabilities
	  	 	Note 14	 	  	 	618,601	 	 	 	769,570	 
		  				  	  
	  
	 	 	  
	  
	 
	 Total current liabilities
	  				  	 	2,714,465	 	 	 	7,213,308	 
	 Non-current
	  				  				 			
	 Loan payable
	  	 	Note 20	 	  	 	315,907	 	 	 	—  	 
	 Lease liabilities
	  	 	Note 14	 	  	 	803,741	 	 	 	883,441	 
		  				  	  
	  
	 	 	  
	  
	 
	 Total liabilities
	  				  	 	3,834,113	 	 	 	8,096,749	 
		  				  	  
	  
	 	 	  
	  
	 
	 SHAREHOLDERS’ EQUITY
	  				  				 			
	 Share capital
	  	 	Note 22	 	  	 	43,454,107	 	 	 	12,224,770	 
	 Warrant reserve
	  	 	Note 22	 	  	 	2,539,191	 	 	 	3,356,534	 
	 Option reserve
	  	 	Note 22	 	  	 	4,349,184	 	 	 	1,552,361	 
	 Share and units to be issued
	  				  	 	5,259	 	 	 	334,903	 
	 Accumulated other comprehensive income
	  				  	 	450,272	 	 	 	440,976	 
	 Accumulated deficit
	  				  	 	(23,160,049	) 	 	 	(16,522,211	) 
		  				  	  
	  
	 	 	  
	  
	 
	 Total shareholders’ equity
	  				  	 	27,637,964	 	 	 	1,387,333	 
		  				  	  
	  
	 	 	  
	  
	 
	 Total liabilities and shareholders’ equity
	  				  	 	31,472,077	 	 	 	9,484,082	 
		  				  	  
	  
	 	 	  
	  
	 

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

Subsequent events (Note 27)     

  
 5 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Consolidated Statements of Loss and Comprehensive Loss 
 (Expressed in
Canadian dollars) 
  

													
	 For the years ended December 31,
	  	 	 	  	2020
$	 	 	2019
$	 
	 Revenues
	  				  				 			
	 Clinic
	  				  	 	12,897,826	 	 	 	13,278,075	 
	 Contract research solutions
	  				  	 	189,981	 	 	 	110,138	 
	 Software
	  				  	 	53,420	 	 	 	35,534	 
		  				  	  
	  
	 	 	  
	  
	 
		  				  	 	13,141,227	 	 	 	13,423,747	 
	 Cost of sales
	  				  	 	4,111,765	 	 	 	4,100,672	 
		  				  	  
	  
	 	 	  
	  
	 
	 Gross profit
	  				  	 	9,029,462	 	 	 	9,323,075	 
		  				  	  
	  
	 	 	  
	  
	 
	 Operating Expenses
	  				  				 			
	 Salaries and wages
	  				  	 	5,918,575	 	 	 	6,514,287	 
	 Office and administration
	  				  	 	1,565,699	 	 	 	1,836,397	 
	 Marketing and business development
	  				  	 	626,345	 	 	 	1,057,861	 
	 Professional fees
	  				  	 	970,545	 	 	 	1,851,168	 
	 Director fees
	  				  	 	226,500	 	 	 	136,500	 
	 Rent
	  				  	 	138,577	 	 	 	225,541	 
	 Share-based compensation
	  				  	 	4,312,647	 	 	 	1,120,813	 
	 Impairment of goodwill and intangible assets
	  				  	 	—  	 	 	 	3,607,499	 
	 Depreciation and amortization
	  				  	 	2,324,384	 	 	 	2,257,560	 
		  				  	  
	  
	 	 	  
	  
	 
	 Total operating expenses
	  				  	 	16,083,272	 	 	 	18,607,626	 
		  				  	  
	  
	 	 	  
	  
	 
	 Loss from operations
	  				  	 	(7,053,810	) 	 	 	(9,284,551	) 
		  				  	  
	  
	 	 	  
	  
	 
	 Finance expenses
	  				  				 			
	 Foreign exchange loss
	  				  	 	178,134	 	 	 	266,422	 
	 Reverse takeover transaction cost
	  	 	Note 4	 	  	 	—  	 	 	 	807,995	 
	 Change in fair value of financial liabilities
	  	 	Note 19	 	  	 	2,156,002	 	 	 	429,338	 
	 Accretion on purchase consideration payable, loan payable and convertible debentures
	  	 	Note 8 and 20	 	  	 	75,062	 	 	 	28,632	 
	 Interest on lease liabilities
	  	 	Note 14	 	  	 	166,200	 	 	 	212,315	 
	 Gain on debt settlement-net
	  	 	Note 18	 	  	 	(147,851	) 	 	 	(166,311	) 
		  				  	  
	  
	 	 	  
	  
	 
	 Net loss before income taxes
	  				  	 	(9,481,357	) 	 	 	(10,862,942	) 
	 Income tax expense
	  	 	Note 21	 	  	 	—  	 	 	 	111,510	 
		  				  	  
	  
	 	 	  
	  
	 
	 Net loss
	  				  	 	(9,481,357	) 	 	 	(10,974,452	) 
		  				  	  
	  
	 	 	  
	  
	 
	 Other comprehensive loss
	  				  				 			
	 Exchange difference on translation of foreign operations, net of tax
	  				  	 	9,296	 	 	 	(17,014	) 
		  				  	  
	  
	 	 	  
	  
	 
	 Net loss and comprehensive loss
	  				  	 	(9,472,061	) 	 	 	(10,991,466	) 
		  				  	  
	  
	 	 	  
	  
	 
	 Basic and diluted net loss per common share
	  				  	 	(0.087	) 	 	 	(0.142	) 
		  				  	  
	  
	 	 	  
	  
	 
	 Weighted average number of common shares outstanding- basic and diluted
	  				  	 	109,421,094	 	 	 	77,196,975	 
		  				  	  
	  
	 	 	  
	  
	 

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

  
 6 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Consolidated Statements of Cash Flows 
 (Expressed in Canadian dollars)

  

											
	 For the years ended December 31,
	  	 	  	2020
$	 	 	2019
$	 
	 Operating activities
	  		  				 			
	 Net loss
	  		  	 	(9,481,357	) 	 	 	(10,974,452	) 
	 Adjustments for items not affecting cash:
	  		  				 			
	 Depreciation and amortization
	  		  	 	2,324,384	 	 	 	2,257,560	 
	 Unrealized foreign exchange loss
	  		  	 	141,680	 	 	 	263,970	 
	 Accretion on purchase consideration payable, loan payable and convertible debentures
	  		  	 	75,062	 	 	 	28,632	 
	 Interest on lease liabilities
	  		  	 	166,200	 	 	 	212,315	 
	 Impairment loss
	  		  	 	—  	 	 	 	3,607,499	 
	 Reverse takeover transaction cost
	  		  	 	—  	 	 	 	807,995	 
	 Share-based compensation
	  		  	 	4,312,647	 	 	 	1,120,813	 
	 Write-off of bad debt
	  		  	 	44,197	 	 	 	—  	 
	 Gain on debt settlement-net
	  		  	 	(147,851	) 	 	 	(166,311	) 
	 Change in fair value of financial liabilities
	  		  	 	2,156,002	 	 	 	429,338	 
	 Other income related to loan payable
	  		  	 	(39,798	) 	 	 	—  	 
	 Changes in non-cash working capital items:
	  		  				 			
	 Inventories
	  		  	 	5,181	 	 	 	54,496	 
	 Trade and other receivables
	  	Note 12	  	 	(533,869	) 	 	 	(14,746	) 
	 Prepaid expenses
	  		  	 	(763,211	) 	 	 	5,783	 
	 Accounts payable and accrued liabilities
	  		  	 	(146,609	) 	 	 	1,106,886	 
	 Income taxes
	  		  	 	—  	 	 	 	111,460	 
		  		  	  
	  
	 	 	  
	  
	 
	 Cash used in operating activities
	  		  	 	(1,887,342	) 	 	 	(1,148,762	) 
		  		  	  
	  
	 	 	  
	  
	 
	 Investing activities
	  		  				 			
	 Purchase of furniture and equipment
	  		  	 	(31,417	) 	 	 	(71,423	) 
	 Development of computer software
	  		  	 	(658,144	) 	 	 	(1,048,602	) 
	 Acquisitions, net of cash acquired
	  		  	 	(1,702,916	) 	 	 	(722,283	) 
		  		  	  
	  
	 	 	  
	  
	 
	 Cash used in investing activities
	  		  	 	(2,392,477	) 	 	 	(1,842,308	) 
		  		  	  
	  
	 	 	  
	  
	 
	 Financing activities
	  		  				 			
	 (Repayment to) proceeds from related parties
	  		  	 	(25,146	) 	 	 	24,840	 
	 Proceeds from shares and warrants issued and to be issued
	  		  	 	24,253,731	 	 	 	2,761,832	 
	 Proceeds from loan
	  	Note 20	  	 	916,958	 	 	 	—  	 
	 Principal payment of lease liabilities
	  		  	 	(792,701	) 	 	 	(706,619	) 
	 Interest paid on lease liabilities
	  		  	 	(166,200	) 	 	 	(195,609	) 
	 Proceeds from issuance of promissory note
	  		  	 	—  	 	 	 	787,800	 
	 Interest paid on promissory note
	  		  	 	(191,705	) 	 	 	—  	 
		  		  	  
	  
	 	 	  
	  
	 
	 Cash provided by financing activities
	  		  	 	23,994,937	 	 	 	2,672,244	 
		  		  	  
	  
	 	 	  
	  
	 
	 Net increase (decrease) in cash during the year
	  		  	 	19,715,118	 	 	 	(318,826	) 
	 Effect of foreign currency on cash
	  		  	 	206,343	 	 	 	15,266	 
	 Cash and cash equivalents, beginning of year
	  		  	 	130,273	 	 	 	433,833	 
		  		  	  
	  
	 	 	  
	  
	 
	 Cash and cash equivalents, end of year
	  		  	 	20,051,734	 	 	 	130,273	 
		  		  	  
	  
	 	 	  
	  
	 

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

  
 7 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Consolidated Statements of Changes in Shareholders’ Equity 
 For the
years ended December 31, 2020 and December 31, 2019 
 (Expressed in Canadian dollars) 

 

																																	
	 	  	Number of
shares
#	 	  	Share
Capital
$	 	 	Warrant
Reserve
$	 	 	Option
Reserve
$	 	 	Shares and
units to be
issued
$	 	 	Accumulated
other
comprehensive
income
$	 	  	Deficit
$	 	 	Total
$	 
	 Balance, January 1, 2020
	  	 	82,836,742	 	  	 	12,224,770	 	 	 	3,356,534	 	 	 	1,552,361	 	 	 	334,903	 	 	 	440,976	 	  	 	(16,522,211	) 	 	 	1,387,333	 
	 Private placement (Note 22(b))
	  	 	34,453,641	 	  	 	3,897,980	 	 	 	1,270,066	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	  	 	—  	 	 	 	5,168,046	 
	 Bought deals (Note 22(b))
	  	 	26,036,000	 	  	 	19,550,920	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	  	 	—  	 	 	 	19,550,920	 
	 Share issuance costs—cash
	  	 	—  	 	  	 	(1,834,037	) 	 	 	(44,300	) 	 	 	—  	 	 	 	—  	 	 	 	—  	 	  	 	—  	 	 	 	(1,878,337	) 
	 Share issuance costs—warrant
	  	 	—  	 	  	 	(988,267	) 	 	 	988,267	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	  	 	—  	 	 	 	—  	 
	 Shares issued in settlement of promissory note
	  	 	10,412,250	 	  	 	5,518,493	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	  	 	—  	 	 	 	5,518,493	 
	 Share-based compensation
	  	 	2,516,756	 	  	 	269,264	 	 	 	—  	 	 	 	4,312,647	 	 	 	—  	 	 	 	—  	 	  	 	—  	 	 	 	4,581,911	 
	 Shares issued for services
	  	 	1,465,906	 	  	 	390,149	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	  	 	—  	 	 	 	390,149	 
	 Shares issued and to be issued in settlement of accrued interest (Note 18 and 22(b))
	  	 	2,439,312	 	  	 	229,722	 	 	 	—  	 	 	 	—  	 	 	 	(115,907	) 	 	 	—  	 	  	 	—  	 	 	 	113,815	 
	 Share issued in settlement of contingent consideration
	  	 	4,389,556	 	  	 	553,948	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	  	 	—  	 	 	 	553,948	 
	 Shares issued and to be issued against exercise of warrants
	  	 	8,667,503	 	  	 	2,790,684	 	 	 	(1,563,739	) 	 	 	—  	 	 	 	(215,087	) 	 	 	—  	 	  	 	—  	 	 	 	1,011,858	 
	 Exercise of stock options
	  	 	1,457,280	 	  	 	755,981	 	 	 	—  	 	 	 	(356,087	) 	 	 	1,350	 	 	 	—  	 	  	 	—  	 	 	 	401,244	 
	 Shares issued in lieu of directors’ fees
	  	 	675,000	 	  	 	94,500	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	  	 	—  	 	 	 	94,500	 
	 Warrants and options expired
	  	 	—  	 	  	 	—  	 	 	 	(1,683,782	) 	 	 	(1,159,737	) 	 	 	—  	 	 	 	—  	 	  	 	2,843,519	 	 	 	—  	 
	 Warrants issued for amendment of promissory note
	  	 	—  	 	  	 	—  	 	 	 	216,145	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	  	 	—  	 	 	 	216,145	 
	 Foreign currency translation
	  	 	—  	 	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	9,296	 	  	 	—  	 	 	 	9,296	 
	 Net loss for the year
	  	 	—  	 	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	  	 	(9,481,357	) 	 	 	(9,481,357	) 
		  	  
	  
	 	  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	  	  
	  
	 	 	  
	  
	 
	 Balance, December 31, 2020
	  	 	175,349,946	 	  	 	43,454,107	 	 	 	2,539,191	 	 	 	4,349,184	 	 	 	5,259	 	 	 	450,272	 	  	 	(23,160,049	) 	 	 	27,637,964	 
		  	  
	  
	 	  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	  	  
	  
	 	 	  
	  
	 

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

  
 8 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Consolidated Statements of Changes in Shareholders’ Equity (continued) 

For the years ended December 31, 2020 and December 31, 2019 

(Expressed in Canadian dollars) 
  

																																					
	 	  	Number of
shares
#	 	  	Share
Capital
$	 	 	Warrant
Reserve
$	 	 	Option
Reserve
$	 	 	Shares
and units
to be
issued
$	 	 	Equity
component
of
convertible
debenture
$	 	 	Accumulated
other
comprehensive
income
$	 	 	Deficit
$	 	 	Total
$	 
	 Balance, January 1, 2019
	  	 	63,373,816	 	  	 	7,794,137	 	 	 	2,685,560	 	 	 	301,623	 	 	 	75,499	 	 	 	82,428	 	 	 	457,990	 	 	 	(5,547,759	) 	 	 	5,849,478	 
	 Private placement (Note 22(b))
	  	 	5,133,338	 	  	 	1,711,384	 	 	 	855,285	 	 	 	—  	 	 	 	(75,499	) 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	2,491,170	 
	 Share issuance costs—cash
	  	 	—  	 	  	 	(21,726	) 	 	 	(8,146	) 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(29,872	) 
	 Share issuance costs—warrant
	  	 	—  	 	  	 	(25,799	) 	 	 	25,799	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 
	 Shares issued in settlement of convertible debentures
	  	 	7,594,547	 	  	 	1,093,549	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(82,428	) 	 	 	—  	 	 	 	—  	 	 	 	1,011,121	 
	 Shares issued on acquisitions
	  	 	950,000	 	  	 	294,500	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	294,500	 
	 Rights issue
	  	 	7,281	 	  	 	3,276	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	3,276	 
	 Share-based compensation
	  	 	—  	 	  	 	—  	 	 	 	—  	 	 	 	1,120,813	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	1,120,813	 
	 Shares issued and to be issued in settlement of accrued interest
	  	 	2,297,498	 	  	 	369,131	 	 	 	—  	 	 	 	—  	 	 	 	115,907	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	485,038	 
	 Exercise of stock options
	  	 	355,560	 	  	 	67,954	 	 	 	—  	 	 	 	(58,154	) 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	9,800	 
	 Share issued in settlement of contingent consideration
	  	 	1,000,380	 	  	 	144,930	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	144,930	 
	 Shares issued and to be issued against exercise of warrants
	  	 	760,686	 	  	 	289,161	 	 	 	(220,699	) 	 	 	—  	 	 	 	218,996	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	287,458	 
	 Shares issued on reverse takeover
	  	 	1,363,636	 	  	 	504,273	 	 	 	18,735	 	 	 	188,079	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	711,087	 
	 Foreign currency translation
	  	 	—  	 	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(17,014	) 	 	 	—  	 	 	 	(17,014	) 
	 Net loss for the year
	  	 	—  	 	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(10,974,452	) 	 	 	(10,974,452	) 
		  	  
	  
	 	  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Balance, December 31, 2019
	  	 	82,836,742	 	  	 	12,224,770	 	 	 	3,356,534	 	 	 	1,552,361	 	 	 	334,903	 	 	 	—  	 	 	 	440,976	 	 	 	(16,522,211	) 	 	 	1,387,333	 
		  	  
	  
	 	  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 

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

  
 9 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Notes to the Consolidated Financial Statements 
 For the years ended
December 31, 2020 and 2019 
 (Expressed in Canadian dollars) 

 
  

	1.	 NATURE OF OPERATIONS 

Nature of Operations 
 Skylight Health Group Inc.
(“SHG” or the “Company”), formerly CB2 Insights Inc. (“CB2”), is a healthcare services and technology company, working to positively impact patient health outcomes. The Company operates a US multi-state health network
that comprises physical multi-disciplinary medical clinics providing a range of services from primary care, sub-specialty, allied health and diagnostic testing. The Company was incorporated on
December 27, 2017 under the Canada Business Corporations Act and completed a reverse takeover (“RTO”) on February 27, 2019 (the “Closing Date”) with MVC Technologies Inc. (“MVC”) which was incorporated in the
province of Ontario on November 3, 2014 under the Ontario Business Corporation Act (“OBCA”). Pursuant to the special meeting of the shareholders of the Company held on November 23, 2020, the name of the Company was changed from
CB2 Insights Inc. to Skylight Health Group Inc. The head office of the Company is located at 5520 Explorer Drive, Mississauga, Ontario, Canada, L4W 5L1. 

On January 5, 2021, the Company’s shares commenced trading on the TSX-V under the symbol
“SHG” after getting voluntarily delisted from the Canadian Securities Exchange on January 4, 2021. 
 Going Concern 

These consolidated financial statements have been prepared on a going concern basis in accordance with International Financial Reporting Standards
(“IFRS”). The going concern basis of presentation assumes that the Company will continue in operation for the foreseeable future and be able to realize its assets and discharge its liabilities and commitments in the normal course of
business.  
 Covid-19 Pandemic 

On March 11, 2020, the World Health Organization declared the ongoing COVID-19 outbreak as a global health
emergency. This resulted in governments worldwide enacting emergency measures to combat the spread of the virus, including the closure of certain non-essential businesses. 

During the year ended December 31, 2020, the pandemic did not have a material impact on the Company’s operations. While medical clinics had
generally been deemed an essential business, the Company was able to switch to virtual appointments thereby reducing the impact on operations and enabled the Company to achieve savings in clinical operating expenses. As at December 31, 2020,
the Company did not observe any impairment of its assets or a significant change in the fair value of assets due to the COVID-19 pandemic. The Company has taken steps to minimize the potential impact of the
pandemic including safety measures with respect to personal protective equipment, the reduction in travel and the implementation of a virtual office including regular video conference meetings and participation in virtual Company events, trade
shows, customer meetings and other virtual events. In addition, as explained in note 20, the Company obtained a loan under the Paycheck Protection Program (PPP) offered by US Small Business Administration as part of
COVID-19 relief measures. 
 Due to the rapid developments and uncertainty surrounding COVID-19, it is not possible to predict the impact that COVID-19 will have on the Company’s business, financial position and operating results in the future. In addition,
it is possible that estimates in the Company’s financial statements will change in the near term as a result of COVID-19 and the effect of any such changes could be material, which could result in, among
other things, impairment of long-lived assets including intangibles and goodwill. The Company is closely monitoring the impact of the pandemic on all aspects of its business. 

  
 10 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Notes to the Consolidated Financial Statements 
 For the years ended
December 31, 2020 and 2019 
 (Expressed in Canadian dollars) 

 
  

	2.	 BASIS OF PRESENTATION 

2.1 Statement of compliance 
 These consolidated financial
statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”) and Interpretations of the International Financial Reporting
Interpretations Committee (“IFRIC”). 
 These consolidated financial statements were approved and authorized for issue by the Board of
Directors of the Company on April 19, 2021. 
 2.2 Basis of consolidation 

Subsidiaries are entities controlled by Skylight Health Group Inc. An entity is controlled when the Company has the ability to direct the relevant
activities of the entity, has exposure or rights to variable returns from its involvement with the entity, and is able to use its power over the entity to affect its returns from the entity. The subsidiaries are consolidated from the date on which
control is transferred to the Company and will cease to be consolidated from the date on which control is transferred out of the Company. The Company also assesses existence of control where it does not have more than 50% of voting power but is able
to control the investee by virtue of de facto control. 
 The Company’s subsidiaries include entities which are controlled via contractual
arrangements that provide the Company with control over these entities. The results of subsidiaries acquired or disposed-off during the period are included in the consolidated statements of loss and
comprehensive loss from the effective date of acquisition and up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with
those used by other members of the group. 
 Intra-group balances and transactions, and any unrealized gains and losses or income and expenses arising
from intragroup transactions are eliminated in preparing the consolidated financial statements. Unrealized gains arising from transactions with subsidiaries are eliminated to the extent of the Company’s interest in the entity. Unrealized losses
are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment. 
 The consolidated financial
statements of the Company set out the assets, liabilities, expenses, and cash flows of the Company and its subsidiaries, namely: 
  

							
	 	  	Country of	  	Ownership Interest at December 31,
	 Entity
	  	Incorporation	  	2020	  	2019
	 MVC Technologies Inc.
	  	Canada	  	100%	  	100%
	 MVC Technologies USA Inc.
	  	USA	  	100%	  	100%
	 MVC New Jersey Medical Group, P.C
	  	USA	  	0%	  	0%
	 MVC Colorado, P.C.
	  	USA	  	0%	  	0%
	 Skylight Health Group MA, P.C.
	  	USA	  	0%	  	0%
	 Skylight Health Group New Jersey, P.C.
	  	USA	  	0%	  	0%
	 Maverick County Medical Family Center, P.A.
	  	USA	  	0%	  	N/A
	 Michael R. Jackson, M.D., P.S.
	  	USA	  	0%	  	N/A
	 Health Care Resource Management, LLC
	  	USA	  	100%	  	N/A
	 Perimeter Pain, P.C.
	  	USA	  	0%	  	N/A

  
 11 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Notes to the Consolidated Financial Statements 
 For the years ended
December 31, 2020 and 2019 
 (Expressed in Canadian dollars) 

 
  

	2.	 BASIS OF PRESENTATION (continued) 

 

 2.3 Basis of measurement 

The consolidated financial statements have been prepared on the historical cost basis 

Functional and presentation currency 
 The consolidated
financial statements are presented in Canadian dollars. The functional currency of each entity in the Group is determined separately in accordance with International Accounting Standard IAS 21 – The Effects of Changes in Foreign Exchange Rates
and is measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The functional currency is the United States Dollar (“USD”) for operations in the United States
including MVC Technologies USA Inc., MVC New Jersey Medical Group, P.C., MVC Colorado, P.C., Skylight Health Group MA, P.C., Skylight Health Group New Jersey, P.C., Maverick County Medical Family Center, P.A., Michael R. Jackson, M.D., P.S.,
Healthcare Resource Management, LLC. and Perimeter Pain, P.C. and the Canadian dollar (“CAD”) for operations in Canada under Skylight Health Group Inc. including MVC Technologies Inc. 

Translation gains and losses resulting from translation of functional currency balances of subsidiaries into the presentation currency and those
relating to intercompany loans from foreign operations, for which settlement is neither planned nor likely to occur in the foreseeable future, are recorded in other comprehensive income. Foreign currency transactions are recorded at the exchange
rate as at the date of the transaction. At each statement of financial position date, monetary assets and liabilities are translated using the period end foreign exchange rate. Nonmonetary assets and liabilities in foreign currencies other than the
functional currency are translated using the historical rate. All gains and losses on translation of foreign currency transactions not in the entity’s functional currency are included in the profit and loss. 

 

	3.	 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 

Revenue recognition 
 To determine the amount and timing of
revenue to be recognized, the Company follows a 5-step process: 
 1. Identifying the contract
with a customer; 
 2. Identifying the performance obligations; 

3. Determining the transaction price; 

4. Allocating the transaction price to the performance obligations; and 

5. Recognizing revenue when/as performance obligation(s) are satisfied. 

Clinic solutions revenue 
 The Company recognizes revenue from
the provision of primary care, wellness, pain management services, interventional procedures, weight management, regenerative medicine and aesthetics. The Company receives payments for these services from third-party payers as well as from patients
who have health insurance where they may bear some cost of the service in the form of coinsurance or deductibles. The Company primarily operates a traditional insurable
fee-for-service model contracting with Medicare, Medicaid and other commercial payers. The Company recognises revenue relating to the health insurance on an accrual
basis at a time when the right to receive the insurance amount is established. 
 The Company recognizes revenue from the provision of consultation
services and discussing various treatment plans with patients, including the use of medical cannabis, to alleviate their symptoms. Revenue is recognized at the point in time when these services are provided to the patients. The Company requires
upfront payment from patients for their visit. 

  
 12 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Notes to the Consolidated Financial Statements 
 For the years ended
December 31, 2020 and 2019 
 (Expressed in Canadian dollars) 

 
  

	3.	 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 

 

 Revenue recognition (continued) 
  

 Contract research revenue 

Revenue from a contract to provide research services is recognized over time as the services are rendered based on time spent. This revenue is generated
(and performance obligation met) by providing research services to customers. 
 Software revenue 

Sail is a Clinical Decision Support (CDS) platform with a suite of practice management tools built to support the workflows of a clinician and/or their
clinical practice specializing in medical cannabis. The platform is licensed to cannabis and other specialty clinics as a full-scale practice management software tool that supports a clinic’s entire management processes. The Company provides
access to the platform to clinicians on a subscription basis. 
 TokeIn provides a SaaS-based customer relationship management (CRM) software and a
sales and marketing platform with loyalty and rewards programs. The subscription fee is billed to the customer and recognized as revenue at the end of each month and is receivable within 15 days. 

The Company has determined that the provision of licenses to customers for both the Sail and TokeIn platforms to be a right to use and revenue is
recognized over time on a monthly basis as subscription fees are charged to customers. 
 Inventories 

Inventories are held for resale and are recorded at the lower of average cost and net realizable value. 

Furniture and equipment 
 Items of furniture and equipment are
recorded at cost less accumulated depreciation. Cost includes all expenditures incurred to bring assets to the location and condition necessary for them to be operated in the manner intended by management. All furniture and equipment is amortized on
a straight-line basis over a 3 year useful life.  

  
 13 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Notes to the Consolidated Financial Statements 
 For the years ended
December 31, 2020 and 2019 
 (Expressed in Canadian dollars) 

 
  

	3.	 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 

 

 Computer software and technology 

The Company incurs costs associated with the design and development of its CDS software. Expenditures during the research phase are expensed as incurred.

 Expenditures during the development phase are capitalized if the Company can demonstrate each of the following criteria: (i) the technical
feasibility of completing the intangible asset so that it will be available for use or sale, (ii) its intention to complete the intangible asset and use or sell it, (iii) its ability to use or sell the intangible asset, (iv) how the
intangible asset will generate probable future economic benefits, (v) the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset, and (vi) its ability to
measure reliably the expenditure attributable to the intangible asset during its development; otherwise, they are expensed as incurred. Costs associated with maintaining computer software programs are recognized as an expense as incurred. Internally
generated software development costs recognized as intangible assets are carried at cost less any accumulated amortization on a straight-line basis over 3 years after available for commercial release. These assets are subject to impairment testing
as described below.  
 Intangible assets 

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is
their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses. The useful lives of intangible assets are assessed as either
finite or indefinite. 
 Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is
an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful
life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortization period or method, as appropriate, and are treated as changes in accounting estimates. The amortization expense on
intangible assets with finite lives is recognised in the statement of loss and comprehensive loss in the expense category that is consistent with the function of the intangible assets. 

Intangible assets with indefinite useful lives are not amortized, but are tested for impairment annually, either individually or at the cash-generating
unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis. 

Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the
net disposal proceeds and the carrying amount of the asset and are recognized in the statement of loss and comprehensive loss when the asset is derecognized. 

Customer relationships, brand and non-compete clause 

The Company acquired customer relationships, brand and non-compete clause as part of various acquisitions.
Customer relationships and non-compete clause are being amortized on a straight line basis over a 5 year useful life whereas brands have an indefinite useful life. 

  
 14 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Notes to the Consolidated Financial Statements 
 For the years ended
December 31, 2020 and 2019 
 (Expressed in Canadian dollars) 

 
  

	3.	 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 

 

 Impairment of non-financial assets 

The Company reviews goodwill and indefinite life intangible assets for impairment annually, or when events or changes in circumstances indicate the
carrying value of the assets may not be recoverable. The Company reviews the carrying amounts of its finite life non-financial assets, when events or changes in circumstances indicate the carrying value of the
assets may not be recoverable. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss, if any. Where it is not possible to estimate the recoverable amount of an
individual asset, the Company estimates the recoverable amount of the cash generating unit (“CGU”) to which the asset belongs. Each of the Company’s operations in the US and Canada are CGUs for purposes of evaluating impairment and
measuring recoverable amounts. 
 Recoverable amount is the higher of fair value less costs of disposal (“FVLCD”) and value in use
(“VIU”). In assessing VIU, the estimated future cash flows to be derived from continuing use of the asset or cash generating unit are discounted to their present value using a pre-tax discount rate
that reflects the time value of money and the risks specific to the asset. FVLCD is the price that would be received to sell an asset or cash generating unit in an orderly transaction between market participants at the measurement date, less the
costs of disposal. When a binding sale agreement is not available, FVLCD is estimated using a discounted cash flow approach with inputs and assumptions consistent with those of a market participant. If the recoverable amount of an asset or cash
generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash generating unit is reduced to its recoverable amount. 

An impairment loss is recognized immediately in statements of loss and comprehensive loss. With the exception of goodwill, where an impairment loss
subsequently reverses, the carrying amount of the asset (cash generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been
determined had no impairment loss been recognized for the asset (or cash generating unit) in prior years. A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s
recoverable amount since the last impairment loss was recognized. 
 Income taxes 

Income tax expense consists of current and deferred tax expense. Current and deferred tax are recognized in profit or loss except to the extent that it
relates to items recognized directly in equity or other comprehensive income. 
 Current tax is recognized and measured at the amount expected to be
recovered from or payable to the taxation authorities based on the income tax rates enacted or substantively enacted at the end of the reporting period and includes any adjustment to taxes payable in respect of previous years. 

Deferred tax is recognized on any temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements
and the corresponding tax bases used in the computation of taxable earnings. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset is realized and the liability is settled. The
effect of a change in the enacted or substantively enacted tax rates is recognized in the statements of loss and comprehensive loss or in equity depending on the item to which the adjustment relates. 

Deferred tax assets are recognized to the extent future recovery is probable. At each reporting period end, deferred tax assets are reduced to the
extent that it is no longer probable that sufficient taxable earnings will be available to allow all or part of the asset to be recovered. 

  
 15 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Notes to the Consolidated Financial Statements 
 For the years ended
December 31, 2020 and 2019 
 (Expressed in Canadian dollars) 

 
  

	3.	 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 

 

 Income taxes (continued) 
  

 Provisions for taxes are made using the best estimate of the amount expected to be paid based on a
qualitative assessment of all relevant factors. The Company reviews the adequacy of these provisions at the end of the reporting period. However, it is possible that at some future date an additional liability could result from audits by taxing
authorities. Where the final outcome of these tax related matters is different from the amounts that were initially recorded, such differences will affect the tax provisions in the period in which such determination is made. 

Segment information 
 The Company’s Chief Executive
Officer has been identified as the Chief Operating Decision Maker (the “CODM”) with respect to segmented information disclosures. The CODM represents the appropriate level of management to analyze and determine the distinct operating
segments of the Company. The CODM examine the Company’s performance both from a product and geographic perspective and has identified two reportable segments of its business, namely the US and the Canadian operations. Both of the geographic
operations segments also align with the product segments that is, clinic business and software business which comprises of software and contract research revenue. 

Financial instruments 
 Recognition and initial measurement 

Financial assets and financial liabilities, including derivatives, are recognized in the statement of financial position when the Company becomes a party
to the contractual provisions of a financial instrument or non-financial derivative contract. All financial instruments are measured at fair value on initial recognition. Transaction costs that are directly
attributable to the acquisition or issuance of financial assets and financial liabilities, other than financial assets and financial liabilities classified as FVTPL, are added to or deducted from the fair value on initial recognition. Transaction
costs directly attributable to the acquisition of financial assets or financial liabilities classified as FVTPL are recognized immediately in statements of loss and comprehensive loss. 

Classification and subsequent measurement 
 The Company
classifies financial assets, at the time of initial recognition, according to the Company’s business model for managing the financial assets and the contractual terms of the cash flows. Financial assets are classified in the following
measurement categories: 
 a) amortized cost 

b) fair value through profit or loss (FVTPL), or 

c) fair value through other comprehensive income (FVTOCI). 

Financial assets are subsequently measured at amortized cost if both the following conditions are met and they are not designated as FVTPL: 

a) the financial asset is held within a business model whose objective is to hold financial assets to collect contractual cash flows; and

 b) the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding. 
 These assets are subsequently measured at amortized cost using the effective interest rate method,
less any impairment, with gains and losses recognized in statements of loss and comprehensive loss in the period that the asset is derecognized or impaired. All financial assets not classified as amortized cost as described above are measured at
FVTPL or FVTOCI depending on the business model and cash flow characteristics. 

  
 16 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Notes to the Consolidated Financial Statements 
 For the years ended
December 31, 2020 and 2019 
 (Expressed in Canadian dollars) 

 
  

	3.	 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 

 

 Financial instruments (continued) 
  

 Classification and subsequent measurement (continued) 

 

 The Company has no financial assets measured at FVTPL or FVTOCI. Financial assets classified and
subsequently measured at amortized cost include cash and trade receivables. 
 Financial liabilities are classified into one of the following
measurement categories: 
 a) amortized cost; or 

b) fair value through profit or loss (FVTPL). 

Financial liabilities not at FVTPL are subsequently measured at amortized cost using the effective interest rate method with gains and losses recognized
in statements of loss and comprehensive loss in the period that the liability is derecognized. Financial liabilities classified and subsequently measured at amortized cost include accounts payable and accrued liabilities, loan payable, payable to
related parties and purchase consideration payable (refer to note 11). Financial liabilities classified and subsequently measured at FVTPL include promissory note payable and purchase consideration payable (refer to note 11). 

The promissory note payable contains an embedded derivative related to equity-indexed interest payments which is not closely related to the debt host
instrument. As a result, the Company has elected to account for the entire instrument at FVTPL. 
 Impairment of financial instruments 

For trade accounts receivable, the Company applies the simplified approach to providing for expected credit losses prescribed by IFRS 9, which requires
the use of the lifetime expected loss provision for all accounts receivable based on the Company’s historical default rates over the expected life of the accounts receivable and is adjusted for forward-looking estimates. The methodologies and
assumptions, including any forecasts of future economic conditions, are reviewed regularly. 
 All individually significant receivables are assessed
for impairment. All individually significant receivables found not to be specifically impaired are then collectively assessed for impairment. Receivables that are not individually significant are collectively assessed for impairment by grouping
together loans receivable with similar risk characteristics. 
 Derecognition 

The Company derecognizes financial assets only when the contractual rights to cash flows from the financial assets expire, or when it transfers the
financial assets and substantially all of the associated risks and rewards of ownership to another entity. Gains and losses on derecognition are recognized in the statements of loss and comprehensive loss. 

The Company derecognizes financial liabilities only when its obligations under the financial liabilities are discharged, cancelled or expired.
Generally, the difference between the carrying amount of the financial liability derecognized and the consideration paid and payable, including any non-cash assets transferred or liabilities assumed, is
recognized in the statements of loss and comprehensive loss. 

  
 17 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Notes to the Consolidated Financial Statements 
 For the years ended
December 31, 2020 and 2019 
 (Expressed in Canadian dollars) 

 
  

	3.	 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 

 

 Fair value measurement 

The Company classifies its fair value measurements and disclosures using a fair value hierarchy that reflects the significance of inputs used in making
the measurements. The accounting standard establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. Fair value determination is classified within a three-level
hierarchy, based on observability of significant inputs, as follows: 
  

	Level 1—	 Quoted prices (unadjusted) in active markets for identical assets or liabilities. 

 

	Level 2—	 Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either
directly or indirectly. 

  

	Level 3—	 Unobservable inputs for the asset or liability. Inputs into the determination of the fair value require management
judgment or estimation. 

 If different levels of inputs are used to measure a financial instrument’s fair value, the
classification within the hierarchy is based on the lowest level of input that is significant to the fair value measurement. Changes to valuation methods may result in transfers into or out of an investment’s assigned level. 

Equity 
 The common shares of the Company are classified as
equity. Costs, such as commissions, professional fees and regulatory fees directly attributable to issuance of common shares are deducted from the proceeds of equity offerings. 

The value of the share capital issued as consideration is based on the stock trade value or is valued at the time the risk and rewards of ownership of
the asset are transferred to the Company or the Company’s liability is extinguished. Equity component of convertible debentures is the residual value after the liability component is measured at fair value. Warrant reserve includes the fair
value of warrants issued. Option reserve includes the fair value of options issued and expected to vest. Accumulated other comprehensive income includes impact of foreign exchange translation for net equity held in foreign operations. 

Leases 
 The Company adopted IFRS 16—Leases on
January 1, 2019. All leases are accounted for by recognising a right-of-use asset and a lease liability except for: 

 

	 	•	 	 Leases of low value assets; and 

 

	 	•	 	 Leases with a duration of twelve months or less. 

Lease liabilities are measured at the present value of the contractual payments due to the lessor over the lease term, with the discount rate determined
by the incremental borrowing rate on commencement of the lease. Variable lease payments are only included in the measurement of the lease liability if they depend on an index or rate. In such cases, the initial measurement of the lease liability
assumes the variable element will remain unchanged throughout the lease term. Other variable lease payments are expensed in the period to which they relate. The Company used an incremental borrowing rate of 12% for discounting the contractual lease
payments. 

  
 18 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Notes to the Consolidated Financial Statements 
 For the years ended
December 31, 2020 and 2019 
 (Expressed in Canadian dollars) 

 
  

	3.	 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 

 

 Leases (continued) 
  

 On initial recognition, the carrying value of the lease liability also includes: 

 

	 	•	 	 Amounts expected to be payable under any residual value guarantee; 

 

	 	•	 	 The exercise price of any purchase option granted if it is reasonably certain to assess that option; and

  

	 	•	 	 Any penalties payable for terminating the lease, if the term of the lease has been estimated on the basis of termination
option being exercised. 

 Right-of-use assets are
initially measured at the amount of the lease liability, reduced for any lease incentives received, and increased for: 
  

	 	•	 	 Lease payments made at or before commencement of the lease; 

 

	 	•	 	 Initial direct costs incurred; and 

 

	 	•	 	 The amount of any provision recognised where the Company is contractually required to dismantle, remove or restore the
leased asset.  

 Lease liabilities, on initial measurement, increase as a result of interest charged at a constant rate on
the balance outstanding and are reduced for lease payments made. 

Right-of-use assets are amortised on a straight-line basis over the
remaining term of the lease or over the remaining economic life of the asset if this is judged to be shorter than the lease term. 
 When the Company
revises its estimate of the term of any lease, it adjusts the carrying amount of the lease liability to reflect the payments to make over the revised term, which are discounted at the same discount rate that applied on lease commencement. The
carrying value of lease liabilities is similarly revised when the variable element of future lease payments dependent on a rate or index is revised. In both cases an equivalent adjustment is made to the carrying value of the right-of-use asset, with the revised carrying amount being amortised over the remaining (revised) lease term. 

The following table reconciles the minimum lease commitments disclosed as at December 31, 2018 to the amount of lease liabilities recognized on
January 1, 2019: 
  

					
	 	  	$	 
	 Minimum operating lease commitment at December 31, 2018
	  	 	1,806,204	 
	 Less: Short term leases not recognized under IFRS 16
	  	 	(89,270	) 
	 Plus: effect of extension of options reasonably certain to be exercised
	  	 	245,083	 
		  	  
	  
	 
	 Undiscounted lease payments
	  	 	1,962,017	 
	 Less: effect of discounting using incremental borrowing rate as at the date of initial application
	  	 	(238,239	) 
		  	  
	  
	 
	 Lease liabilities as at January 1, 2019
	  	 	1,723,778	 
		  	  
	  
	 

 Use of estimates and judgments 
 a.
Estimates—Lease terms are estimated by considering the facts and circumstances that can create an economic incentive to exercise an extension option, or not to exercise a termination option. Certain qualitative and quantitative assumptions are
evaluated when deriving the value of an economic incentive. 
 b. Judgments—Judgment is applied when determining if a contract contains an
identified asset. The identified asset should be physically distinct or represent substantially all of the capacity of the asset, and should provide the right to substantially all of the economic benefits from the use of the asset. 

  
 19 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Notes to the Consolidated Financial Statements 
 For the years ended
December 31, 2020 and 2019 
 (Expressed in Canadian dollars) 

 
  

	3.	 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 

 

 Leases (continued) 
  

 Use of estimates and judgments (continued) 

 

 Judgment is also applied when determining if the Company has the right to control the use of an
identified asset. This right exists when the Company has the decision-making rights that are most relevant to changing how and for what purpose the asset is used. In certain instances, where the decision about how and for what purpose the asset is
used are predetermined, the Company has the right to direct the use of the asset when the Company has the right to operate the asset or if the Company designed the asset in a way that predetermines how and for what purpose the asset will be used.

 Judgment is applied when determining the incremental borrowing rate used to measure the lease liability of each lease contract, including an
estimate of the asset-specific security impact. The incremental borrowing rate should reflect the interest rate the Company would pay to borrow at a similar term and with similar security. 

Certain leases contain extension or renewal options that are exercisable only by the Company and not by the lessor. At lease commencement, the Company
assesses whether it is reasonably certain to exercise any of the extension options based on the expected economic return from the lease. Periodically, leases are reassessed to determine if the Company is reasonably certain to exercise options and
account for any changes at the date of the reassessment. 
 Share-based payments 

The Company records equity settled share-based payments for the granting of stock options and warrants granted using the fair value method whereby all
awards to employees and consultants are recorded at the fair value of each stock option or warrant at the date of the grant using the Black-Scholes option pricing model. The fair value of the stock options is amortized over the vesting period with a
corresponding increase in equity reserves. The amount recognized as an expense is adjusted to reflect the number of options expected to eventually vest. Any consideration paid by the option or warrant holders to purchase shares is credited to share
capital and the related share-based payments is transferred from warrant or option reserve to share capital. 
 Government assistance 

The Company recognises a government grant when there is reasonable assurance that the Company will comply with any conditions attached to the grant and
the grant will be received. Government grants are recognised in the statement of loss and comprehensive loss as other income on a systematic basis over the periods in which the entity recognises as expenses the related costs for which the grants are
intended to compensate. 
 If the fair value of a government loan at initial recognition differs from the transaction price, the loan is discounted
using an interest rate based on an identical asset or liability in a quoted market, or using a valuation technique based on observable markets. The discounted component which represents the benefit of a government loan at a below-market rate of
interest is treated as a government grant. The loan shall be recognised and measured in accordance with IFRS 9. 

  
 20 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Notes to the Consolidated Financial Statements 
 For the years ended
December 31, 2020 and 2019 
 (Expressed in Canadian dollars) 

 
  

	3.	 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 

 

 Business combination 

Acquisitions of subsidiaries and businesses are accounted for using the acquisition method. The Company measures goodwill as the fair value of the
consideration transferred, including the recognized amount of any non-controlling interest in the acquiree, less the net recognized amount of the identifiable assets and liabilities assumed, all measured as of
the acquisition date. 
 Consideration transferred includes the fair value of the assets transferred (including cash), the liabilities incurred by the
Company on behalf of the acquiree, any contingent consideration and any equity interests issued by the Company. Transaction costs, other than those associated with the issuance of debt or equity securities that the Company incurs in connection with
a business combination, are expensed as incurred. 
 The acquisition date is the date when the Company obtains control of the acquiree. Contingent
consideration is measured at its acquisition date fair value and included as part of the consideration transferred in a business combination. Contingent consideration that is classified as a liability is
re-measured at subsequent reporting dates in accordance with the criteria and guidance provided under IFRS with corresponding gain or loss recorded in the statements of loss and comprehensive loss. 

Acquisition-related costs are expensed as incurred and are included in professional fees. During the year, the Company completed three acquisitions and
the aggregate costs incurred were $119,482 (2019 - $184,217). 
 Significant accounting judgments and estimates 

Application of accounting policies requires management to use estimates and judgments that can have significant effect on the revenues, expenses,
comprehensive income, assets and liabilities recognized and disclosures made in the consolidated financial statements. 
 Management’s best
estimates concerning the future are based on the facts and circumstances available at the time estimates are made. Management uses historical experience, general economic conditions and assumptions regarding probable future outcomes as the basis for
determining estimates. Estimates and their underlying assumptions are reviewed periodically, and the effects of any changes are recognized immediately. Actual results could differ from the estimates used. 

The following areas require significant estimates or judgment by management. 

Functional currency 
 Determining the appropriate functional
currencies for entities in the Company requires analysis of various factors, including the currency and country-specific factors that mainly influence sales prices, and the currencies that mainly influence labour, supplies, and other costs of
providing goods or services. 
 Business combinations 
 When
the Company completes an acquisition, management is required to make judgments to determine whether the acquisition meets the definition of a business under IFRS 3 – Business Combinations. 

In a business combination, all identifiable assets, liabilities and contingent liabilities acquired are recorded at the date of acquisition at their
respective fair values. If any intangible assets are identified, depending on the type of intangible asset and the complexity of determining its fair value, an independent external valuation expert may determine the fair value, using appropriate
valuation techniques, which are generally based on a forecast of the total expected future net cash flows. 

  
 21 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Notes to the Consolidated Financial Statements 
 For the years ended
December 31, 2020 and 2019 
 (Expressed in Canadian dollars) 

 
  

	3.	 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 

 

 Significant accounting judgments and estimates (continued) 

 

 Business combinations (continued) 
  

 These valuations are linked closely to the assumptions made by management regarding the future
performance of the assets concerned and any changes in the discount rate applied. In certain circumstances where estimates have been made, the Company may obtain third-party valuations of certain assets, which could result in further refinement of
the fair-value allocation of certain purchase prices and accounting adjustments. In addition, the Company may provide contingent consideration as part of the purchase price for acquisitions of businesses and/or assets. Management is required to make
judgments and estimates of the future performance of the acquired business and/or assets in order to determine the amount of contingent consideration to be recognized at acquisition and at each subsequent reporting date. 

Impairment of long-lived assets 
 Long-lived assets are tested
for impairment if there is an indicator of impairment and annually for all CGUs with goodwill and/or intangible assets that are not amortized. The Company considers both external and internal sources of information for indications that long-lived
assets are impaired. External sources of information we consider include changes in the market and economic and legal environment in which the CGU operates that are not within its control and affect the recoverable amount of goodwill. Internal
sources of information considered include the strategic plans for the production and distribution segments including estimates of revenue and other indications of economic performance of the assets. Calculating the fair value less cost of disposal
(“FVLCD”) and value-in-use (“VIU”) of CGUs for impairment tests requires management to make estimates and assumptions with respect to future revenue,
costs of sales, expenses, other net cash flow adjustments and discount rates. Changes in any of the assumptions or estimates used in determining the fair values could impact the impairment analysis. Refer to notes 15 and 16 for further information.

 Warrants, options, and equity-components of convertible debentures 

Common share purchase warrants, options, and the equity-components of convertible debentures require a determination of the date of grant and the fair
value of the units at that date, and for cash-settled share-based payments at each reporting date thereafter. The estimation of fair value requires the application of the most appropriate valuation model as well as the inputs to the model. 

Income taxes 
 The calculation of current and deferred income
taxes requires the Company to make estimates and assumptions and to exercise judgment regarding the carrying values of assets and liabilities which are subject to accounting estimates inherent in those balances, the interpretation of income tax
legislation across various jurisdictions, expectations about future operating results, the timing of reversal of temporary differences and possible audits of income tax filings by the tax authorities. 

Changes or differences in underlying estimates or assumptions may result in changes to the current or deferred income tax balances on the statements of
financial position, a charge or credit to income tax expense included as part of statements of loss and comprehensive loss and may result in cash payments or receipts. Judgment includes consideration of the Company’s future cash requirements in
its numerous tax jurisdictions. 
 All income, capital and commodity tax filings are subject to audits and reassessments. Changes in interpretations
or judgments may result in a change in the Company’s income, capital or commodity tax provisions in the future. The amount of such a change cannot be reasonably estimated. 

  
 22 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Notes to the Consolidated Financial Statements 
 For the years ended
December 31, 2020 and 2019 
 (Expressed in Canadian dollars) 

 
  

	3.	 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 

 

 Significant accounting judgments and estimates (continued) 

 

 Leases 
 See
above lease accounting policy section for details. 
 Fair value of financial instruments not quoted in an active market 

Where the fair values of financial assets and financial liabilities recorded on the statement of financial position cannot be derived from active
markets, they are determined using a variety of valuation techniques. The inputs to these models are derived from observable market data where possible, but where observable market data are not available, judgment is required to establish fair
values. 
 Control of subsidiaries via contractual arrangements 

The Company applied judgment in concluding control over its subsidiaries where it does not hold a majority of voting rights. 

New Accounting Standards adopted 
 Amendments to IAS
1—Presentation of financial statements (“IAS 1”) and IAS 8—Accounting policies, changes in accounting estimates and errors (“IAS 8”) 

The amendments are intended to make the definition of material in IAS 1 easier to understand and are not intended to alter the underlying concept of
materiality in IFRS Standards. The concept of ‘obscuring’ material information with immaterial information has been included as part of the new definition. The threshold for materiality influencing users has been changed from ‘could
influence’ to ‘could reasonably be expected to influence’. The definition of material in IAS 8 has been replaced by a reference to the definition of material in IAS 1. In addition, the IASB amended other Standards and the Conceptual
Framework that contain a definition of material or refer to the term ‘material’ to ensure consistency. 
 The Company adopted the amendments
to IAS 1 effective January 1, 2020, which did not have a material impact on the Company’s consolidated financial statements. 

Amendments to IFRS 3—Business Combinations (“IFRS 3”) 

In October 2018, the IASB amended IFRS 3 seeking to clarify whether an acquisition transaction results in the acquisition of an asset or the acquisition
of a business. The amendments are effective for acquisition transactions on or after January 1, 2020, although earlier application was permitted. The amended standard has a narrower definition of a business, which could result in the
recognition of fewer business combinations than under the previous standard; the implication of this is that amounts which may have been recognized as goodwill in a business combination under the previous standard may now be recognized as
allocations to net identifiable assets acquired under the amended standard (with an associated effect in an entity’s results of operations that would differ from the effect of goodwill having been recognized). The Company adopted the amendments
to IFRS 3 effective January 1, 2020, which did not have a material impact on the Company’s consolidated financial statements. 

  
 23 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Notes to the Consolidated Financial Statements 
 For the years ended
December 31, 2020 and 2019 
 (Expressed in Canadian dollars) 

 
  

 New Accounting Standards adopted (continued) 

 

 Amendments to IFRS 16—Leases (“IFRS 16”) 

This amendment provides an optional relief to lessees from applying IFRS 16’s guidance on lease modification accounting for rent concessions arising
as a direct consequence of the COVID-19 pandemic. The amendments are effective for periods beginning on or after June 1, 2020, with earlier application permitted. The Company adopted the amendments
effective January 1, 2020, which did not have a material impact on the Company’s consolidated financial statements. 
 New accounting standards issued
but not yet effective 
 Certain new accounting standards and interpretations have been published that are not mandatory for the current period and
have not been early adopted. These standards are not expected to have a material impact on the Company in the current or future reporting periods except the below amendments: 

Amendments to IAS 1—Presentation of financial statements (“IAS 1”) 

The amendments affect only the presentation of liabilities in the statement of financial position — not the amount or timing of recognition of any
asset, liability income or expenses, or the information that entities disclose about those items. They clarify that the classification of liabilities as current or non-current should be based on rights that
are in existence at the end of the reporting period and align the wording in all affected paragraphs to refer to the “right” to defer settlement by at least twelve months and make explicit that only rights in place “at the end of the
reporting period” should affect the classification of a liability; clarify that classification is unaffected by expectations about whether an entity will exercise its right to defer settlement of a liability; and make clear that settlement
refers to the transfer to the counterparty of cash, equity instruments, other assets or services. The effective date of the amendments to IAS is on or after January 1, 2023, earlier application of the is permitted. The Company is currently
evaluating the impact this standard will have on the Company’s consolidated financial statements. 

  
 24 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Notes to the Consolidated Financial Statements 
 For the years ended
December 31, 2020 and 2019 
 (Expressed in Canadian dollars) 

 
  

	4.	 Share exchange agreement and reverse takeover 

On August 28, 2018, MVC entered into a letter of intent (the “LOI”) with 10557404 Canada Corp. (now known as Skylight Health Group Inc.)
(“SHG” or the “Company”). The LOI outlined a proposal to enter a Share Exchange Agreement and effect an amalgamation between MVC and a subsidiary of CB2 and a listing of CB2’s shares on the Canadian Securities Exchange. 

On the Closing Date, MVC and CB2 executed the Share Exchange Agreement and the MVC’s shareholders became shareholders of CB2 resulting in a reverse
takeover of CB2 by MVC. On March 6, 2019, CB2 commenced trading on the Canadian Securities Exchange (CSE), under the symbol “CBII” and on May 17, 2019, the Company commenced trading on the OTCQB, under the symbol
‘CBIIF’. 
 The terms of the RTO were as follows: CB2 consolidated its issued and outstanding common shares on the basis of one (1) new
common share for each 16.5 issued and outstanding CB2 common shares (the “Consolidation”); and CB2 issued one (1) (post-Consolidation) share for each one (1) common share of MVC issued and outstanding on the Closing Date. In
conjunction with the RTO, 10557404 Canada Corp. changed its name to CB2 Insights Inc. 
 The pre-Consolidation
share capital of each entity prior to the RTO, is outlined below: 
 CB2 
  

									
	 	  	Number of
common
shares	 	  	Amount
$	 
	 Balance, February 27, 2019
	  	 	1,363,494	 	  	 	102,251	 

 MVC 

 

									
	 	  	Number of
common
shares	 	  	Amount
$	 
	 Balance, February 27, 2019
	  	 	68,507,154	 	  	 	9,464,138	 

 For accounting purposes, this RTO was considered to be an asset acquisition and had been treated as a capital
transaction under IFRS 2 – Share-Based Payment where MVC had been treated as the accounting parent company (legal subsidiary) and CB2 had been treated as the accounting subsidiary (legal parent). 

As a result of CB2 not meeting the definition of a business under IFRS 3, a transaction cost of $807,995 had been recorded as listing expense. This
reflected the excess of the purchase price over the fair value of the assets and liabilities acquired. Consideration included the shares held by the shareholders of CB2, being 1,363,636 shares, 151,515 CB2 outstanding warrants and 666,060 CB2
outstanding stock options. 
 The fair value of the 151,515 warrants was estimated using the Black-Scholes option pricing model at $0.10 per warrant,
based on the following assumptions: underlying share price of $0.37 per share, expected annualized volatility of 144.33%; risk-free interest rate of 1.78%; expected dividend yield of 0%; and expected life of 1.5 years. The fair value of the 666,060
stock options was estimated using the Black-Scholes option pricing model at $0.25 to $0.31 per option, based on the following assumptions: underlying share price of $0.37 per share, expected annualized volatility of 144.33%; risk-free interest rate
of 1.78%; expected dividend yield of 0%; and expected life of 2.35 to 2.58 years. 

  
 25 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Notes to the Consolidated Financial Statements 
 For the years ended
December 31, 2020 and 2019 
 (Expressed in Canadian dollars) 

 
  

	4.	 Share exchange agreement and reverse takeover (continued)     

 

 The allocated purchase price calculation is as follows:     

 

					
	 	  	$	 
	 Consideration—shares: 1,363,636 shares at $0.37
	  	 	504,273	 
	 Consideration—warrants: 151,515 warrants
	  	 	18,735	 
	 Consideration—stock options: 666,060 stock options
	  	 	188,079	 
		  	  
	  
	 
	 Total consideration
	  	 	711,087	 
		  	  
	  
	 
	 Identifiable assets acquired
	  			
	 Cash
	  	 	43,488	 
	 Sales tax receivable and prepaid expenses
	  	 	13,859	 
	 Accounts payable and accrued liabilities
	  	 	(4,261	) 
	 Payables to related party
	  	 	(149,994	) 
		  	  
	  
	 
	 Net liabilities acquired
	  	 	(96,908	) 
		  	  
	  
	 
	 Listing expense
	  	 	807,995	 
		  	  
	  
	 

  

	5.	 Acquisition of MedEval Clinic LLC 

On April 9, 2019 (the “Closing Date”), the Company acquired 100% of the identified assets of MedEval Clinic LLC, a medical cannabis
evaluation and education center group with multiple locations in Colorado and Arizona. The Company determined that the acquisition was a business combination under IFRS 3 – Business Combinations and was accounted for by applying the acquisition
method, whereby the assets acquired and liabilities assumed were recorded at their fair values with any excess of the aggregate consideration over the fair values of the identifiable net assets allocated to goodwill. The goodwill acquired was
associated with the MedEval Clinic LLC’s workforce and is expected to be fully deductible for tax purposes. 
 The aggregate purchase
consideration comprises the following: 
  

	 	•	 	 $199,740 cash (US$150,000) 

  

	 	•	 	 450,000 common shares in the Company valued at $0.31 per share amounting to $139,500 

 

	 	•	 	 Contingent consideration payable in shares upon completion of the milestones of the numbers of patients certified. As
per the terms of the initial agreement, contingent consideration of up to US$240,000 was payable in shares valued at the greater of US$0.50/share and the 30-day volume weighted average price at the date of
issuance, upon completion of four milestones ranging from 2,500 to 10,000 patients certified over 12 months from Closing Date. The shares were subject to a minimum hold period of four months plus one day from the date of issuance. Contingent
consideration had been accounted for as a liability measured at fair value through profit or loss as it would result in the issuance of a variable number of shares. Subsequently, on November 7, 2019 the Company executed an amended agreement
whereby all contingent earnout payments were removed in exchange for issuance of 100,000 common shares in the Company valued at $0.125 per share amounting to $12,500. The amendment had been accounted for as an extinguishment of financial liability
under IFRS 9. 

  
 26 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Notes to the Consolidated Financial Statements 
 For the years ended
December 31, 2020 and 2019 
 (Expressed in Canadian dollars) 

 
  

	5.	 Acquisition of MedEval Clinic LLC (continued) 

 

 The allocated purchase price calculation is as follows:     

 

					
	 	  	$	 
	 Consideration—shares: 450,000 shares at $0.31
	  	 	139,500	 
	 Consideration—cash
	  	 	199,740	 
	 Consideration—contingent consideration in common shares
	  	 	112,697	 
		  	  
	  
	 
	 Total consideration paid
	  	 	451,937	 
		  	  
	  
	 
	 Identifiable assets acquired
	  			
	 Customer relationships
	  	 	119,844	 
	 Brand
	  	 	158,460	 
	 Non-compete clause
	  	 	1,332	 
		  	  
	  
	 
	 Total identifiable assets acquired
	  	 	279,636	 
		  	  
	  
	 
	 Total goodwill
	  	 	172,301	 
		  	  
	  
	 
		  	 	451,937	 
		  	  
	  
	 

  

	6.	 Acquisition of ROSH 

On April 4, 2019 (the “Closing Date”), the Company acquired 100% of the identified assets of Colorado-based medical cannabis clinic group
Rae of Sunshine Health Services (“ROSH”) LLC, operating as “Relaxed Clarity”. The Company determined that the acquisition was a business combination under IFRS 3 – Business Combinations and was accounted for by applying the
acquisition method, whereby the assets acquired and liabilities assumed were recorded at their fair values with any excess of the aggregate consideration over the fair values of the identifiable net assets allocated to goodwill. The goodwill
acquired is associated with the ROSH’s workforce and is expected to be fully deductible for tax purposes. 
 The aggregate purchase consideration
comprises the following: 
  

	 	•	 	 $267,140 cash (US$200,000). 

  

	 	•	 	 500,000 common shares in the Company valued at $0.31 per share amounting to $155,000. 

 

	 	•	 	 Contingent consideration of US$200,000 payable in cash and up to US$300,000 was payable in shares valued at 30- day volume weighted average price at the date of issuance, upon completion of five milestones ranging from 3,000 to 15,000 patients certified within 6 to 12 months from Closing Date. The shares would be subject
to a minimum hold period of four months plus one day from the date of issuance. 

  

	 	•	 	 During the year ended December 31, 2019, the first and second milestones were achieved and $133,570 (US$100,000)
was paid for the achievement of the first milestone and 900,380 common shares of the Company amounting to $133,570 (US$100,000) were issued for the achievement of second milestone. In addition, a contingent consideration of $221,940 was accounted
for as a liability measured at fair value through profit or loss as it would result in the issuance of a variable number of shares and a fair valuation gain of $61,932 was recognized during the year. 

 

	 	•	 	 During the year ended December 31, 2020, the third and fourth milestones were achieved and 882,978 common shares of
the Company amounting to $98,370 (US$75,000) were issued for the achievement of third milestone and 1,006,578 common shares amounting to $105,578 (US$75,000) were issued for the achievement of fourth milestone. The fifth milestone could not be
achieved and a fair valuation gain of $28,083 was recognised during the year. 

  
 27 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Notes to the Consolidated Financial Statements 
 For the years ended
December 31, 2020 and 2019 
 (Expressed in Canadian dollars) 

 
  

	6.	 Acquisition of ROSH (continued) 

 

 The allocated purchase price calculation is as follows:     

 

					
	 	  	$	 
	 Consideration—shares: 500,000 shares at $0.31
	  	 	155,000	 
	 Consideration—cash
	  	 	267,140	 
	 Consideration—contingent consideration
	  	 	331,728	 
	 Assumed liabilities
	  	 	140,430	 
		  	  
	  
	 
	 Total consideration
	  	 	894,298	 
		  	  
	  
	 
	 Identifiable assets acquired
	  			
	 Customer relationships
	  	 	320,568	 
	 Brand
	  	 	160,284	 
	 Non-compete clause
	  	 	5,343	 
		  	  
	  
	 
	 Total identifiable assets acquired
	  	 	486,195	 
		  	  
	  
	 
	 Total goodwill
	  	 	408,103	 
		  	  
	  
	 
		  	 	894,298	 
		  	  
	  
	 

  

	7.	 Acquisition of NJAM 

On July 1, 2019, the Company acquired 100% of the identified assets of New Jersey Alternative Medicine LLC (“NJAM”), a medical cannabis
evaluation and education center group with multiple locations in New Jersey under an earn-out arrangement with no cash or other consideration payable on closing date. The Company determined that the
acquisition was a business combination under IFRS 3—Business Combinations and was accounted for by applying the acquisition method, whereby the assets acquired and liabilities assumed were recorded at their fair values with any excess of the
aggregate consideration over the fair values of the identifiable net assets allocated to goodwill. The goodwill acquired is associated with NJAM’s workforce and is expected to be fully deductible for tax purposes. 

The aggregate purchase consideration comprises the following: 
  

	 	•	 	 As per the terms of the initial agreement, 25% of the NJAM’s existing patients’ visit fees up to 13 months
from closing date would be paid in cash and by issuance of common shares of equal amount, subject to a hold period of 4 months from issuance. An amount of $121,080 (US$92,329) was earned and paid for the months of July and August 2019. Contingent
consideration was accounted for as a liability measured at fair value through profit or loss as it would result in the issuance of a variable number of shares. Subsequently, on January 6, 2020, the Company signed an amended agreement whereby
all contingent earnout payments were removed in exchange for issuance of 2,500,000 common shares in the Company valued at $0.14 per share amounting to $350,000 and a fair valuation loss of $109 was recognised during the year. 

  
 28 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Notes to the Consolidated Financial Statements 
 For the years ended
December 31, 2020 and 2019 
 (Expressed in Canadian dollars) 

 
  

	7.	 Acquisition of NJAM (continued) 

 

 The allocated purchase price calculation is as follows:     

 

					
	 	  	$	 
	 Contingent consideration—cash and shares
	  	 	543,278	 
		  	  
	  
	 
	 Total consideration paid
	  	 	543,278	 
		  	  
	  
	 
	 Identifiable assets acquired
	  			
	 Customer relationships
	  	 	367,192	 
	 Non-compete clause
	  	 	2,623	 
		  	  
	  
	 
	 Total identifiable assets acquired
	  	 	369,815	 
		  	  
	  
	 
	 Total goodwill
	  	 	173,463	 
		  	  
	  
	 
		  	 	543,278	 
		  	  
	  
	 

  

	8.	 Acquisition of MCM 

On October 6, 2020 (the “Closing Date”), the Company acquired 100% of the identified assets of Texas-based primary care services clinic
group Maverick County Medical Family Center (“MCM”), P.A. The Company determined that the acquisition was a business combination under IFRS 3 – Business Combinations and was accounted for by applying the acquisition method, whereby
the assets acquired and liabilities assumed were recorded at their fair values with any excess of the aggregate consideration over the fair values of the identifiable net assets allocated to goodwill. The goodwill acquired is associated with the
MCM’s workforce and is expected to be fully deductible for tax purposes. 
 The aggregate purchase consideration comprises the following: 

 

	 	•	 	 $497,700 cash (US$375,000) paid on Closing Date 

 

	 	•	 	 $497,700 cash (US$375,000) due in six months after the Closing Date. The amount was discounted to its present value and
initially recorded at $470,227 (US$354,300) on the Closing Date using an effective interest rate of 12%. An accretion expense amounting to $13,950 was recorded on this amount during the year ended December 31, 2020 leading to an outstanding
amount of $464,727. The amount was subsequently paid on April 6, 2021. 

 The allocated purchase price calculation is as
follows: 
  

					
	 	  	$	 
	 Consideration—cash
	  	 	967,927	 
	 Lease liabilities
	  	 	27,157	 
	 Assumed liabilities
	  	 	146,280	 
		  	  
	  
	 
	 Total consideration
	  	 	1,141,364	 
		  	  
	  
	 
	 Identifiable assets acquired
	  			
	 Customer relationships
	  	 	676,872	 
	 Non-compete
	  	 	18,581	 
	 Cash
	  	 	75,448	 
	 Accounts receivable
	  	 	70,833	 
	 Right of use asset
	  	 	27,157	 
		  	  
	  
	 
	 Total identifiable assets acquired
	  	 	868,891	 
		  	  
	  
	 
	 Total goodwill
	  	 	272,473	 
		  	  
	  
	 
		  	 	1,141,364	 
		  	  
	  
	 

  
 29 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Notes to the Consolidated Financial Statements 
 For the years ended
December 31, 2020 and 2019 
 (Expressed in Canadian dollars) 

 
  

	8.	 Acquisition of MCM (continued) 

 

 Operating results have been included in these consolidated financial statements from the Closing Date.
MCM’s revenue and net income for the period from the date of acquisition to December 31, 2020 included in the consolidated statements of loss and comprehensive loss are $304,477 and $185,089, respectively. If the acquisition had occurred
on January 1, 2020, management estimates that consolidated revenue would have increased by $1,110,046 and net loss would have decreased by $224,927 for the year ended December 31, 2020. 

 

	9.	 Acquisition of JMC 

On October 27, 2020 (the “Closing Date”), the Company acquired 100% of the identified assets of Washington-based primary care services
group Michael R. Jackson, M.D., P.S.(“JMC”). The Company determined that the acquisition was a business combination under IFRS 3 – Business Combinations and was accounted for by applying the acquisition method, whereby the assets
acquired and liabilities assumed were recorded at their fair values with any excess of the aggregate consideration over the fair values of the identifiable net assets allocated to goodwill. The goodwill acquired is associated with the JMC workforce
and is expected to be fully deductible for tax purposes. 
 The Company paid a total cash consideration of $388,338 (US$295,000). The allocated
purchase price calculation is as follows: 
  

					
	 	  	$	 
	 Consideration—cash
	  	 	388,338	 
	 Lease liabilities
	  	 	81,941	 
	 Assumed liabilities
	  	 	144,125	 
		  	  
	  
	 
	 Total consideration
	  	 	614,404	 
		  	  
	  
	 
	 Identifiable assets acquired
	  			
	 Customer relationships
	  	 	259,726	 
	 Cash
	  	 	80,193	 
	 Accounts receivable
	  	 	63,932	 
	 Right of use asset
	  	 	81,941	 
		  	  
	  
	 
	 Total identifiable assets acquired
	  	 	485,792	 
		  	  
	  
	 
	 Total goodwill
	  	 	128,612	 
		  	  
	  
	 
		  	 	614,404	 
		  	  
	  
	 

 Operating results have been included in these consolidated financial statements from the date of the acquisition.
Revenue and net income for the period from the date of acquisition to December 31, 2020 included in the consolidated statements of loss and comprehensive loss are $77,743 and $8,124, respectively. If the acquisition had occurred on
January 1, 2020, management estimates that consolidated revenue would have increased by $458,704 and net loss would have decreased by $62,643 for the year ended December 31, 2020. 

  
 30 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Notes to the Consolidated Financial Statements 
 For the years ended
December 31, 2020 and 2019 
 (Expressed in Canadian dollars) 

 
  

	10.	 Acquisition of HRM 

On December 30, 2020 (the “Closing Date”), the Company acquired 100% of the membership interest in Tennessee-based pain management and
primary care clinic group Healthcare Resource Management (“HRM”) LLC, which operates a licensed pain management clinic Perimeter Pain, P.C. (“Perimeter”). The Company determined that the acquisition was a business combination
under IFRS 3 – Business Combinations and was accounted for by applying the acquisition method, whereby the assets acquired and liabilities assumed were recorded at their fair values with any excess of the aggregate consideration over the fair
values of the identifiable net assets allocated to goodwill. The goodwill acquired is associated with the HRM’s workforce and is expected to be fully deductible for tax purposes. 

The aggregate purchase consideration comprises the following: 
  

	 	•	 	 $987,208 cash (US$773,129) paid on Closing Date 

 

	 	•	 	 Contingent consideration of $123,695 (US$96,871) payable in cash upon receipt of the forgiveness decision on HRM’s
Small Business Administration (“SBA”) Paycheck Protection Program loan. Upon receipt of the forgiveness decision, the SBA loan amount less any amount which is not forgiven will be paid. The amount is recognised at the fair value of $61,847
(US$48,435) on the Closing Date. 

 The allocated purchase price calculation is as follows: 

 

					
	 	  	$	 
	 Consideration—cash
	  	 	987,208	 
	 Consideration – contingent consideration
	  	 	61,847	 
	 Lease liabilities
	  	 	392,717	 
	 Assumed liabilities
	  	 	14,689	 
		  	  
	  
	 
	 Total consideration
	  	 	1,456,461	 
		  	  
	  
	 
	 Identifiable assets acquired
	  			
	 Customer relationships
	  	 	702,295	 
	 Non-compete
	  	 	20,430	 
	 Cash
	  	 	14,689	 
	 Accounts receivable
	  	 	89,383	 
	 Right of use asset
	  	 	392,717	 
		  	  
	  
	 
	 Total identifiable assets acquired
	  	 	1,219,514	 
		  	  
	  
	 
	 Total goodwill
	  	 	236,947	 
		  	  
	  
	 
		  	 	1,456,461	 
		  	  
	  
	 

 Operating results have been included in these consolidated financial statements from the date of the acquisition.
HRM’s revenue and net income for the period from the date of acquisition to December 31, 2020 included in the consolidated statements of loss and comprehensive loss is $5,701 and $5,701, respectively. If the acquisition had occurred on
January 1, 2020, management estimates that consolidated revenue would have increased by $1,717,688 and net loss would have decreased by $635,857 for the year ended December 31, 2020. 

  
 31 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Notes to the Consolidated Financial Statements 
 For the years ended
December 31, 2020 and 2019 
 (Expressed in Canadian dollars) 

 
  

	11.	 Purchase consideration payable 

Amortised cost 
  

													
	 	  	 	 	  	December 31,
2020	 	  	December 31,
2019	 
	 	  	 	 	  	$	 	  	$	 
	 MCM
	  	 	Note 8	 	  	 	464,727	 	  	 	—  	 
	 HRM
	  	 	Note 10	 	  	 	61,667	 	  	 	—  	 
		  				  	  
	  
	 	  	  
	  
	 
		  				  	 	526,393	 	  	 	—  	 
		  				  	  
	  
	 	  	  
	  
	 

 Fair value 
  

													
	 	  	 	 	  	2020	 	  	2019	 
	 	  	 	 	  	$	 	  	$	 
	 ROSH
	  	 	Note 6 & 23	 	  	 	—  	 	  	 	221,940	 
	 NJAM
	  	 	Note 7 & 23	 	  	 	—  	 	  	 	344,378	 
		  				  	  
	  
	 	  	  
	  
	 
		  				  	 	—  	 	  	 	566,318	 
		  				  	  
	  
	 	  	  
	  
	 
		  				  	 	526,393	 	  	 	566,318	 
		  				  	  
	  
	 	  	  
	  
	 

  

	12.	 Trade and other receivables     

 

									
	 	  	December 31,
2020	 	  	December 31,
2019	 
	 	  	$	 	  	$	 
	 Trade receivables
	  	 	287,561	 	  	 	71,569	 
	 Harmonized sales tax recoverable
	  	 	191,750	 	  	 	136,592	 
	 Security deposits
	  	 	49,516	 	  	 	101,192	 
		  	  
	  
	 	  	  
	  
	 
		  	 	528,827	 	  	 	309,353	 
		  	  
	  
	 	  	  
	  
	 

  
 32 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Notes to the Consolidated Financial Statements 
 For the years ended
December 31, 2020 and 2019 
 (Expressed in Canadian dollars) 

 
  

	13.	 Furniture and Equipment     

 

																									
	 	  	Furniture	 	 	Vehicles	 	 	Computer
Hardware	 	 	Leaseholds	 	 	Equipment	 	  	Total	 
	 	  	$	 	 	$	 	 	$	 	 	$	 	 	$	 	  	$	 
	 Cost
	  				 				 				 				 				  			
	 As at, January 1, 2019
	  	 	86,799	 	 	 	23,794	 	 	 	81,627	 	 	 	70,312	 	 	 	47,549	 	  	 	310,081	 
	 Additions
	  	 	33,243	 	 	 	—  	 	 	 	37,914	 	 	 	266	 	 	 	—  	 	  	 	71,423	 
	 Impairment
	  	 	(1,286	) 	 	 	(244	) 	 	 	(1,845	) 	 	 	(846	) 	 	 	—  	 	  	 	(4,221	) 
	 Net exchange differences
	  	 	(2,869	) 	 	 	(1,137	) 	 	 	(4,699	) 	 	 	(3,360	) 	 	 	—  	 	  	 	(12,065	) 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	  	  
	  
	 
	 As at December 31, 2019
	  	 	115,887	 	 	 	22,413	 	 	 	112,997	 	 	 	66,372	 	 	 	47,549	 	  	 	365,218	 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	  	  
	  
	 
	 Additions
	  	 	15,156	 	 	 	—  	 	 	 	5,179	 	 	 	—  	 	 	 	11,082	 	  	 	31,417	 
	 Net exchange differences
	  	 	(2,303	) 	 	 	(441	) 	 	 	(2,503	) 	 	 	(1,311	) 	 	 	—  	 	  	 	(6,558	) 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	  	  
	  
	 
	 As at December 31, 2020
	  	 	128,740	 	 	 	21,972	 	 	 	115,673	 	 	 	65,061	 	 	 	58,631	 	  	 	390,077	 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	  	  
	  
	 
	 Amortization
	  				 				 				 				 				  			
	 As at, January 1, 2019
	  	 	20,942	 	 	 	6,479	 	 	 	14,625	 	 	 	14,578	 	 	 	15,284	 	  	 	71,908	 
	 Amortization
	  	 	34,695	 	 	 	7,715	 	 	 	34,107	 	 	 	22,877	 	 	 	15,848	 	  	 	115,242	 
	 Net exchange differences
	  	 	(897	) 	 	 	(470	) 	 	 	(1,407	) 	 	 	(1,186	) 	 	 	—  	 	  	 	(3,960	) 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	  	  
	  
	 
	 As at, December 31, 2019
	  	 	54,740	 	 	 	13,724	 	 	 	47,325	 	 	 	36,269	 	 	 	31,132	 	  	 	183,190	 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	  	  
	  
	 
	 Amortization
	  	 	40,060	 	 	 	7,716	 	 	 	39,109	 	 	 	22,846	 	 	 	16,311	 	  	 	126,042	 
	 Net exchange differences
	  	 	(1,928	) 	 	 	(664	) 	 	 	(2,915	) 	 	 	(1,877	) 	 	 	—  	 	  	 	(7,384	) 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	  	  
	  
	 
	 As at December 31, 2020
	  	 	92,872	 	 	 	20,776	 	 	 	83,519	 	 	 	57,238	 	 	 	47,443	 	  	 	301,848	 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	  	  
	  
	 
	 Net book value
	  				 				 				 				 				  			
	 As at December 31, 2019
	  	 	61,147	 	 	 	8,689	 	 	 	65,672	 	 	 	30,103	 	 	 	16,417	 	  	 	182,028	 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	  	  
	  
	 
	 As at December 31, 2020
	  	 	35,868	 	 	 	1,196	 	 	 	32,154	 	 	 	7,823	 	 	 	11,188	 	  	 	88,229	 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	  	  
	  
	 

  

	14.	
Right-of-use-assets and
lease liabilities     

 Right of use assets     

 

									
	 Premises leases
	  	December 31,
2020	 	  	December 31,
2019	 
	 	  	$	 	  	$	 
	 Beginning balance
	  	 	1,532,128	 	  	 	1,723,778	 
	 Additions
	  	 	757,588	 	  	 	697,818	 
	 Depreciation
	  	 	(799,027	) 	  	 	(787,569	) 
	 Impairment
	  	 	—  	 	  	 	(25,699	) 
	 Cancellation
	  	 	(159,051	) 	  	 	—  	 
	 Net exchange differences
	  	 	(6,551	) 	  	 	(76,200	) 
		  	  
	  
	 	  	  
	  
	 
	 Ending balance
	  	 	1,325,087	 	  	 	1,532,128	 
		  	  
	  
	 	  	  
	  
	 

  
 33 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Notes to the Consolidated Financial Statements 
 For the years ended
December 31, 2020 and 2019 
 (Expressed in Canadian dollars) 

 
  

	14.	
Right-of-use-assets and
lease liabilities (continued)     

  

 Lease liabilities     

 

									
	 	  	December 31,
2020	 	  	December 31,
2019	 
	 	  	$	 	  	$	 
	 Beginning balance
	  	 	1,653,011	 	  	 	1,723,778	 
	 Additions
	  	 	757,588	 	  	 	697,818	 
	 Interest expense
	  	 	166,200	 	  	 	212,315	 
	 Lease payments
	  	 	(958,901	) 	  	 	(902,228	) 
	 Cancellations
	  	 	(186,687	) 	  	 	—	 
	 Net exchange differences
	  	 	(8,869	) 	  	 	(78,672	) 
		  	  
	  
	 	  	  
	  
	 
	 Ending balance
	  	 	1,422,342	 	  	 	1,653,011	 
		  	  
	  
	 	  	  
	  
	 
			
	Allocated as:	  	$	 	  	$	 
	 Current (no later than 1 year)
	  	 	618,601	 	  	 	769,570	 
	 Long-term (later than 1 year but no later than 5 years)
	  	 	803,741	 	  	 	883,441	 
		  	  
	  
	 	  	  
	  
	 
		  	 	1,422,342	 	  	 	1,653,011	 
		  	  
	  
	 	  	  
	  
	 

  

	15.	 Computer software and technology     

 

					
	 	  	$	 
	 Cost
	  			
	 Balance, January 1, 2019
	  	 	2,493,431	 
	 Additions
	  	 	1,048,602	 
	 Impairment—Tokeln
	  	 	(583,061	) 
	 Net exchange differences
	  	 	(881	) 
		  	  
	  
	 
	 Balance, December 31, 2019
	  	 	2,958,091	 
		  	  
	  
	 
	 Additions
	  	 	658,144	 
	 Net exchange differences
	  	 	(346	) 
		  	  
	  
	 
	 Balance, December 31, 2020
	  	 	3,615,889	 
		  	  
	  
	 
	 Amortization
	  			
	 Balance, January 1, 2019
	  	 	736,984	 
	 Amortization
	  	 	909,281	 
	 Net exchange differences
	  	 	(344	) 
		  	  
	  
	 
	 Balance, December 31, 2019
	  	 	1,645,921	 
		  	  
	  
	 
	 Amortization
	  	 	841,351	 
	 Net exchange differences
	  	 	(500	) 
		  	  
	  
	 
	 Balance, December 31, 2020
	  	 	2,486,772	 
		  	  
	  
	 
	 Net book value
	  			
	 Balance, December 31, 2019
	  	 	1,312,170	 
		  	  
	  
	 
	 Balance, December 31, 2020
	  	 	1,129,117	 
		  	  
	  
	 

  
 34 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Notes to the Consolidated Financial Statements 
 For the years ended
December 31, 2020 and 2019 
 (Expressed in Canadian dollars) 

 
  

	15.	 Computer software and technology (continued) 

 

 Impairment testing 

On September 11, 2018, the Company entered into an Asset Purchase Agreement with 1035855 Canada Inc. (“Tokeln”), acquiring the assets of
Tokeln. Tokeln’s primary asset is a web-based customer loyalty program specifically designed to cater to cannabis dispensaries across North America. During the year ended December 31, 2019, the
Company revised its future forecasts associated with TokeIn which were lower than initial estimates which indicated an impairment in the asset. 
 The
Company uses value-in-use (“VIU”) as the basis for the determination of the recoverable amount of the asset. The Company used a valuation technique which
included an estimate of future cash flows for the next two years with a growth rate of 5%. The present value of the expected cash flows from the asset was determined by applying a discount rate of 19.3% reflecting the market assessments of the time
value of money and the risks specific to the asset. Carrying value and recoverable amount of the asset as at December 31, 2020 is $nil (December 31, 2019: $655,189) and $nil (December 31, 2019: $72,128), respectively. This resulted in an
impairment loss on the asset amounting to $nil (December 31, 2019: $583,061). 
  

	16.	 Goodwill and other intangible assets 

 

																					
	 	  	Goodwill	 	 	Customer
Relationships	 	 	Brand	 	 	Non-
compete	 	 	Total
Other
intangibles	 
	 	  	$	 	 	$	 	 	$	 	 	$	 	 	$	 
	 Cost
	  				 				 				 				 			
	 Balance, January 1, 2019
	  	 	3,960,758	 	 	 	1,896,238	 	 	 	2,402,356	 	 	 	—  	 	 	 	4,298,594	 
	 Additions
	  	 	689,827	 	 	 	847,634	 	 	 	342,754	 	 	 	9,297	 	 	 	1,199,685	 
	 Impairment loss
	  	 	(2,919,711	) 	 	 	(74,214	) 	 	 	—  	 	 	 	(593	) 	 	 	(74,807	) 
	 Net exchange differences
	  	 	(96,263	) 	 	 	(145,080	) 	 	 	(147,510	) 	 	 	(196	) 	 	 	(292,786	) 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Balance, December 31, 2019
	  	 	1,634,611	 	 	 	2,524,578	 	 	 	2,597,600	 	 	 	8,508	 	 	 	5,130,686	 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Additions
	  	 	638,032	 	 	 	1,638,893	 	 	 	—	 	 	 	39,011	 	 	 	1,677,904	 
	 Net exchange differences
	  	 	(48,211	) 	 	 	(87,860	) 	 	 	(51,200	) 	 	 	(982	) 	 	 	(140,042	) 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Balance, December 31, 2020
	  	 	2,224,432	 	 	 	4,075,611	 	 	 	2,546,400	 	 	 	46,537	 	 	 	6,668,548	 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Amortization
	  				 				 				 				 			
	 Balance, January 1, 2019
	  	 	—  	 	 	 	390,677	 	 	 	—  	 	 	 	—  	 	 	 	390,677	 
	 Amortization
	  	 	—  	 	 	 	446,801	 	 	 	—  	 	 	 	—  	 	 	 	446,801	 
	 Net exchange differences
	  	 	—  	 	 	 	(27,910	) 	 	 	—  	 	 	 	—  	 	 	 	(27,910	) 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Balance, December 31, 2019
	  	 	—  	 	 	 	809,568	 	 	 	—  	 	 	 	—  	 	 	 	809,568	 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Amortization
	  	 	—  	 	 	 	557,964	 	 	 	—  	 	 	 	—  	 	 	 	557,964	 
	 Net exchange differences
	  	 	—  	 	 	 	(43,115	) 	 	 	—  	 	 	 	—  	 	 	 	(43,115	) 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Balance, December 31, 2020
	  	 	—  	 	 	 	1,324,417	 	 	 	—  	 	 	 	—  	 	 	 	1,324,417	 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Net book value
	  				 				 				 				 			
	 As at December 31, 2019
	  	 	1,634,611	 	 	 	1,715,010	 	 	 	2,597,600	 	 	 	8,508	 	 	 	4,321,118	 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 As at December 31, 2020
	  	 	2,224,432	 	 	 	2,751,194	 	 	 	2,546,400	 	 	 	46,537	 	 	 	5,344,131	 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 

  
 35 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Notes to the Consolidated Financial Statements 
 For the years ended
December 31, 2020 and 2019 
 (Expressed in Canadian dollars) 

 
  

	16.	 Goodwill and other intangible assets (continued) 

 

 Impairment testing 

For the purpose of annual impairment testing, goodwill is allocated to the group of CGUs expected to benefit from the synergies of the business
combinations in which the goodwill arises as set out below and is compared to its recoverable amount as at December 31, 2020 and 2019. The Company has determined that its CGUs are Canna Care Docs, MedEval, ROSH, NJAM, MCM, JMC and HRM. 

 

																	
	 December 31, 2020
	  	Carrying
amount	 	  	Recoverable
amount	 	  	Foreign
exchange
impact	 	  	Impairment
loss	 
	 	  	$	 	  	$	 	  	$	 	  	$	 
	 Canna Care Docs
	  	 	5,065,993	 	  	 	5,649,108	 	  	 	—  	 	  	 	—  	 
	 MedEval
	  	 	320,592	 	  	 	567,717	 	  	 	—  	 	  	 	—  	 
	 NJAM
	  	 	340,046	 	  	 	1,181,323	 	  	 	—  	 	  	 	—  	 
	 ROSH
	  	 	728,934	 	  	 	1,139,618	 	  	 	—  	 	  	 	—  	 
	 MCM
	  	 	912,143	 	  	 	943,128	 	  	 	—  	 	  	 	—  	 
	 JMC
	  	 	368,537	 	  	 	378,493	 	  	 	—  	 	  	 	—  	 
	 HRM
	  	 	939,427	 	  	 	965,984	 	  	 	—  	 	  	 	—  	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
		  	 	8,675,672	 	  	 	10,825,371	 	  	 	—  	 	  	 	—  	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

  

																	
	 December 31, 2019
	  	Carrying
amount	 	  	Recoverable
amount	 	  	Foreign
exchange
impact	 	  	Impairment
loss	 
	 	  	$	 	  	$	 	  	$	 	  	$	 
	 Canna Care Docs
	  	 	8,082,931	 	  	 	5,724,269	 	  	 	38,500	 	  	 	2,397,162	 
	 MedEval
	  	 	492,076	 	  	 	344,929	 	  	 	2,402	 	  	 	149,549	 
	 NJAM
	  	 	662,513	 	  	 	387,801	 	  	 	4,484	 	  	 	279,196	 
	 ROSH
	  	 	947,180	 	  	 	751,838	 	  	 	3,189	 	  	 	198,531	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
		  	 	10,184,700	 	  	 	7,208,837	 	  	 	48,575	 	  	 	3,024,438	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

 The Company has used value-in-use
(“VIU”) as the basis for the determination of the recoverable amount of the CGU. The Company has used a valuation technique which includes an estimate of future cash flows for the next five years. A terminal growth rate is determined and
applied to project future cash flows after the fifth year. The present value of the expected cash flows from the CGUs are determined by applying a suitable discount rate reflecting current market assessments of the time value of money and the risks
specific to the CGU. Projected future cash flows are based on operating profit growth rates for each CGU. 

  
 36 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Notes to the Consolidated Financial Statements 
 For the years ended
December 31, 2020 and 2019 
 (Expressed in Canadian dollars) 

 
  

	16.	 Goodwill and other intangible assets (continued) 

 

 Impairment testing (continued) 
  

 Key assumptions: 
  

													
	 December 31, 2020
	  	Growth rate	 	 	Terminal	 	 	Discount rate	 
	 Canna Care Docs
	  	 	2.00	% 	 	 	2.00	% 	 	 	18.50	% 
	 MedEval
	  	 	2.00	% 	 	 	2.00	% 	 	 	19.50	% 
	 NJAM
	  	 	2.00	% 	 	 	2.00	% 	 	 	19.50	% 
	 ROSH
	  	 	2.00	% 	 	 	2.00	% 	 	 	19.50	% 
	 Maverick
	  	 	2.00	% 	 	 	2.00	% 	 	 	29.70	% 
	 JMC
	  	 	2.00	% 	 	 	2.00	% 	 	 	27.50	% 
	 HRM
	  	 	2.00	% 	 	 	2.00	% 	 	 	30.60	% 
				
	 December 31, 2019
	  	Growth rate	 	 	Terminal	 	 	Discount rate	 
	 Canna Care Docs
	  	 	5.00	% 	 	 	2.00	% 	 	 	19.50	% 
	 MedEval
	  	 	2.00	% 	 	 	2.00	% 	 	 	23.50	% 
	 NJAM
	  	 	2.00	% 	 	 	2.00	% 	 	 	45.00	% 
	 ROSH
	  	 	2.00	% 	 	 	2.00	% 	 	 	28.00	% 

 Growth rates 
 The CGU profit
growth rates are based on management’s best estimates considering historical and expected operating plans, strategic plans, economic considerations and the general outlook for the industry and markets in which the segment operates. 

Discount rate 
 The discount rate reflects appropriate
adjustments relating to market risk and specific risk factors of the group of CGUs. 
 Sensitivity to changes in assumptions 

If the CGUs were to fall short of its 2021 operating profit by 20%, the carrying amount of the CGU would exceed its recoverable amount as follows: 

 

																	
	 December 31, 2020
	  	Carrying
amount	 	  	Recoverable
amount	 	  	Foreign
exchange
impact	 	  	Impairment
loss	 
	 	  	$	 	  	$	 	  	$	 	  	$	 
	 Canna Care Docs
	  	 	5,065,993	 	  	 	5,234,682	 	  	 	—  	 	  	 	—  	 
	 MedEval
	  	 	320,592	 	  	 	540,025	 	  	 	—  	 	  	 	—  	 
	 NJAM
	  	 	340,046	 	  	 	1,141,541	 	  	 	—  	 	  	 	—  	 
	 ROSH
	  	 	728,934	 	  	 	1,093,783	 	  	 	—  	 	  	 	—  	 
	 MCM
	  	 	912,143	 	  	 	901,625	 	  	 	564	 	  	 	11,082	 
	 JMC
	  	 	368,537	 	  	 	362,106	 	  	 	345	 	  	 	6,776	 
	 HRM
	  	 	939,427	 	  	 	921,274	 	  	 	974	 	  	 	19,127	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
		  	 	8,675,672	 	  	 	10,195,036	 	  	 	1,883	 	  	 	36,985	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

  
 37 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Notes to the Consolidated Financial Statements 
 For the years ended
December 31, 2020 and 2019 
 (Expressed in Canadian dollars) 

 
  

	16.	 Goodwill and other intangible assets (continued) 

 

 Impairment testing (continued) 
  

 Sensitivity to changes in assumptions (continued) 

 

																	
	 December 31, 2019
	  	Carrying
amount	 	  	Recoverable
amount	 	  	Foreign
exchange
impact	 	  	Impairment
loss	 
	 	  	$	 	  	$	 	  	$	 	  	$	 
	 Canna Care Docs
	  	 	8,082,931	 	  	 	5,484,639	 	  	 	38,500	 	  	 	2,636,792	 
	 MedEval
	  	 	492,076	 	  	 	327,525	 	  	 	2,402	 	  	 	166,953	 
	 NJAM
	  	 	662,513	 	  	 	359,097	 	  	 	4,484	 	  	 	307,900	 
	 ROSH
	  	 	947,180	 	  	 	696,639	 	  	 	3,189	 	  	 	253,730	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
		  	 	10,184,700	 	  	 	6,867,900	 	  	 	48,575	 	  	 	3,365,375	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

 If the CGUs were to fall short of its 2021 operating profit by 10% combined with a 1% increase in the discount rate, the
carrying amount of the CGU would exceed its recoverable amount as follows: 
  

																	
	 December 31, 2020
	  	Carrying
amount	 	  	Recoverable
amount	 	  	Foreign
exchange
impact	 	  	Impairment
loss	 
	 	  	$	 	  	$	 	  	$	 	  	$	 
	 Canna Care Docs
	  	 	5,065,993	 	  	 	5,254,416	 	  	 	—  	 	  	 	—  	 
	 MedEval
	  	 	320,592	 	  	 	553,585	 	  	 	—  	 	  	 	—  	 
	 NJAM
	  	 	340,046	 	  	 	1,145,573	 	  	 	—  	 	  	 	—  	 
	 ROSH
	  	 	728,934	 	  	 	1,116,701	 	  	 	—  	 	  	 	—  	 
	 MCM
	  	 	912,143	 	  	 	902,785	 	  	 	502	 	  	 	9,860	 
	 JMC
	  	 	368,537	 	  	 	361,989	 	  	 	351	 	  	 	6,899	 
	 HRM
	  	 	939,427	 	  	 	923,518	 	  	 	853	 	  	 	16,762	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
		  	 	8,675,672	 	  	 	10,258,567	 	  	 	1,706	 	  	 	33,521	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
					
	 December 31, 2019
	  	Carrying
amount	 	  	Recoverable
amount	 	  	Foreign
exchange
impact	 	  	Impairment
loss	 
	 	  	$	 	  	$	 	  	$	 	  	$	 
	 Canna Care Docs
	  	 	8,082,931	 	  	 	5,291,769	 	  	 	38,500	 	  	 	2,829,662	 
	 MedEval
	  	 	492,076	 	  	 	319,955	 	  	 	2,402	 	  	 	174,523	 
	 NJAM
	  	 	662,513	 	  	 	363,710	 	  	 	4,484	 	  	 	303,287	 
	 ROSH
	  	 	947,180	 	  	 	696,329	 	  	 	3,189	 	  	 	254,040	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
		  	 	10,184,700	 	  	 	6,671,763	 	  	 	48,575	 	  	 	3,561,512	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

  
 38 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Notes to the Consolidated Financial Statements 
 For the years ended
December 31, 2020 and 2019 
 (Expressed in Canadian dollars) 

 
  

	17.	 Accounts payable and accrued liabilities 

 

									
	 	  	December 31,
2020	 	  	December 31,
2019	 
	 	  	$	 	  	$	 
	 Accounts payable
	  	 	484,893	 	  	 	1,158,628	 
	 Accrued liabilities
	  	 	638,382	 	  	 	690,487	 
		  	  
	  
	 	  	  
	  
	 
		  	 	1,123,275	 	  	 	1,849,115	 
		  	  
	  
	 	  	  
	  
	 

 Accounts payable include an amount of $12,018 (December 31, 2019: $12,018) payable to a related party for CFO services
and bookkeeping services provided to the Company. 
  

	18.	 Promissory Note 

On December 19, 2017 (the “Closing Date”), the Company entered into an acquisition transaction with Canna Care Docs as detailed in Note 5
to the year-end consolidated financial statements as of December 31, 2018. As part of the purchase consideration, the Company issued a promissory note in the amount of US$2,500,000 (“Canna Care
Note”). The note was discounted to its present value and initially recorded at $3,017,057 (US$2,336,449) on the closing date using an effective interest rate of 7%. Accretion expense amounting to $208,324 (2017—$nil) was recorded on this
promissory note during the year ended December 31, 2018. 
 The note was repayable on, and interest free up to, December 19, 2018 after
which date interest of 15% per annum was charged. The note was secured by the purchased assets of Canna Care Docs. 
 On December 19, 2018, the
Company repaid the full amount of the Canna Care Note with the proceeds from the issuance of a promissory note to Merida Capital Partners (“Merida”) (“Merida Note”). On December 19, 2018, the Company issued the Merida Note
and Merida advanced to the Company funds amounting to US$2,400,000. The Merida note bore interest at 12% per annum and was due 18 months from the issuance date. The Merida Note contained an option to convert the Merida Note to a convertible
debenture that would permit the conversion of the underlying liability to common shares (“Merida Option”). The Merida Option expired on January 20, 2019 and the interest rate also increased to 15% per annum on that date. The Merida
Note was measured at fair value on issuance and the Company elected to carry the note at FVTPL. The Company recorded a loss in fair value of $396,254 for the year ended December 31, 2019 on the Merida Note. In measuring the fair value of Merida
Note, the Company used the Monte Carlo valuation technique. 
 On June 24, 2019, the Company entered into an Amended and Restated Promissory Note
with Merida Capital Partners II LP (“Merida”), whereby the Company promised to pay Merida US$3.0 million (the “Merida Note II”). The Merida Note II bore interest at 12.0% per annum and was due on December 24, 2020. The
interest on Merida Note II was payable quarterly through the issuance of common shares of the Company at a price per share equal to the 30-day volume weighted average price of the Company’s common shares
traded on the Canadian Securities Exchange ending on the applicable quarterly interest payment date, less a discount of 18%. 

  
 39 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Notes to the Consolidated Financial Statements 
 For the years ended
December 31, 2020 and 2019 
 (Expressed in Canadian dollars) 

 
  

	18.	 Promissory Note (continued) 

 

 The Merida Note II was measured at fair value on issuance date and the Company elected to carry the
note at FVTPL. In measuring the fair value of the Merida Note II, the Company used the Monte Carlo valuation technique. 
 As per the agreement of
Merida Note, during the year ended December 31, 2019, the Company issued 1,219,520 common shares of the Company in settlement of $241,090 accrued interest on the Merida Note and the Company incurred issuance cost amounting to $6,142 for these
shares. 
 The amendment of the Merida Note was accounted for as an extinguishment of the Merida Note and the issuance of the Merida Note II resulting
in a gain on debt settlement of $166,311 recorded in the statements of loss and comprehensive loss during the year ended December 31, 2019. 

During the year ended December 31, 2019, interest amounting to $243,948 was recorded on the Merida Note II and 1,077,978 common shares were issued
during the year while 1,218,756 common shares were issued subsequently for the interest amount. The Company also recorded a loss in fair value of $191,114 for the year ended December 31, 2019 on the Merida Note II. During the year ended
December 31, 2020, interest expense amounting to $113,247 was recorded on the Merida Note II and 1,213,443 common shares were issued for the interest amount. The Company also recorded a loss on change in fair value of $311,739 on the Merida
Note II during the year ended December 31, 2020. 
 On June 17, 2020, the Company entered into an amended and restated promissory note (the
“Merida Note III”), which amended the terms of the promissory note originally issued by the Company on December 20, 2018 and amended on June 24, 2019. Under the terms of the Amended Note, the principal amount of USD
$3 million will become payable on December 24, 2022 (previously due on December 24, 2020), carry an annual interest rate of 8% (previously 12%), payable, at the Company’s option, either in cash or in common shares of the Company.
If interest is paid in common shares, the number of shares will be calculated at a price per share equal to the 30-day volume weighted average trading price of the Company’s common shares on the CSE less
a 10% discount. Additionally, if at any time prior to the maturity date, the closing price of the Company’s common shares on the CSE is equal to or greater than CAD $0.30 for 20 consecutive trading days, then the outstanding amounts owed under
the Amended Note will be converted into that number of common shares obtained by dividing: 
 (A) the Canadian dollar equivalent of the sum of: 

 

	 	•	 	 the principal amount of USD $3 million and 

 

	 	•	 	 the unpaid accrued interest owing up to the conversion date, by 

(B) the volume-weighted average closing price of the Company’s common shares on the CSE during such 20 consecutive trading day period, less a
discount of 10%. 
 The Merida Note III is effective as of April 1, 2020. As consideration for the amendments, the Company issued warrants
entitling the holder to purchase up to 3 million common shares at an exercise price of CAD $0.14 per common share during the period commencing on the first anniversary of date of issuance of the warrants and ending three years from such
issuance date. The fair value of the warrants was estimated using the Black-Scholes option pricing model at $0.14 per warrant, based on the following assumptions: underlying share price of $0.115 per share, expected annualized volatility of 110%;
risk-free interest rate of 0.28%; expected dividend yield of 0%; and expected life of 3 years. 
 The amendment of the Merida Note II has been
accounted for as an extinguishment of the Merida Note II and the issuance of the Merida Note III resulting in a gain of $294,753 recorded in the statements of loss and comprehensive loss during the year ended December 31, 2020. 

  
 40 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Notes to the Consolidated Financial Statements 
 For the years ended
December 31, 2020 and 2019 
 (Expressed in Canadian dollars) 

 
  

	18.	 Promissory Note (continued) 

 

 The Merida Note III was measured at fair value on issuance date and the Company has elected to carry
the note at FVTPL. In measuring the fair value of the Note, the Company has used the Monte Carlo valuation technique. The Company recorded a loss on change in fair value of $1,872,238 in the statements of loss and comprehensive loss during the year
ended December 31, 2020 on Merida Note III. As per the agreement of Merida Note III, during the year ended December 31, 2020, interest expense amounting to $191,705 was recorded on the Merida Note III which was settled in cash. 

On October 29, 2020, the Company issued 10,412,250 common shares with a fair value of $5,518,493 in settlement of the outstanding principal amount
of US$3 million Merida Note III. The number of shares were calculated using a negotiated share price of $0.38 which approximates the 8-day volume-weighted average closing price of the Company’s
common shares on the CSE calculated on October 16, 2020. The fair value per share issued was $0.53 based on the stock price on the date of conversion. This resulted in a loss on debt settlement of $146,902 recorded in the statements of loss and
comprehensive loss during the year ended December 31, 2020. 
  

	19.	 Change in fair value of financial liabilities 

 

													
	 	  	 	 	  	2020	 	  	2019	 
	 	  	 	 	  	$	 	  	$	 
	 Promissory note payable – Merida Note II
	  	 	Note 18	 	  	 	311,738	 	  	 	587,368	 
	 Promissory note payable – Merida Note III
	  	 	Note 18	 	  	 	1,872,238	 	  	 	—  	 
	 Purchase consideration payable—ROSH
	  	 	Note 6 & 23	 	  	 	(28,083	) 	  	 	(61,932	) 
	 Purchase consideration payable—NJAM
	  	 	Note 7 & 23	 	  	 	109	 	  	 	(96,098	) 
		  				  	  
	  
	 	  	  
	  
	 
		  				  	 	2,156,002	 	  	 	429,338	 
		  				  	  
	  
	 	  	  
	  
	 

  

	20.	 Loan Payable 

On April 27, 2020, the Company obtained a loan of $916,958 (US$652,500) from Citizens Bank N.A under the Paycheck Protection Program (PPP) offered
by US Small Business Administration as part of COVID-19 relief measures. The loan carries an interest rate of 1% and the repayments would start from February 27, 2021 in equal monthly instalments over
eighteen months. The PPP program allows for the loan to be forgiven if the disbursed amount is spent in accordance with specific guidelines. On December 1, 2020, the Company applied for loan forgiveness, and if approved, the loan amount would
be reclassified as a grant in the statements of loss and comprehensive loss. 
 The loan was measured at fair value on receipt date using effective
interest method and the difference between the fair value and receipt amount was recorded as deferred income under accrued liabilities. This difference represents the benefit received by the Company due to reduced interest rate on the loan and over
the term of the loan, this benefit will be recognized as other income in the statement of loss and comprehensive loss. 
 As at December 31,
2020, the carrying amount of the loan is $762,103 of which $446,196 is current while $315,907 is non-current. The instalments outstanding on the loan, as at December 31, 2020, are $830,763 of which
$503,640 is current while $327,123 is non-current. During the year ended December 31, 2020, the Company recognised an amount of $39,798 as other income and $61,112 as accretion expense on the loan. 

  
 41 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Notes to the Consolidated Financial Statements 
 For the years ended
December 31, 2020 and 2019 
 (Expressed in Canadian dollars) 

 
  

	21.	 Income tax 

  

 The deferred income tax expenses shown in the consolidated statements of loss and comprehensive loss
differs from the amounts obtained by applying statutory rates due to the following: 
  

									
	 	  	December 31,
2020	 	  	December 31,
2019	 
	 	  	$	 	  	$	 
	 Statutory rate
	  	 	26.5%	 	  	 	26.5%	 
	 Net loss before income taxes
	  	 	(9,481,357)	 	  	 	(10,862,942)	 
		  	  
	  
	 	  	  
	  
	 
	 Expected tax expense (recovery)
	  	 	(2,512,533	) 	  	 	(2,878,680	) 
	 Tax rate differential for foreign taxes
	  	 	(2,601	) 	  	 	(25,909	) 
	 Permanent differences
	  	 	1,735,149	 	  	 	333,470	 
	 Changes in tax benefits not recognised
	  	 	779,985	 	  	 	2,682,629	 
		  	  
	  
	 	  	  
	  
	 
		  	 	—  	 	  	 	111,510	 
		  	  
	  
	 	  	  
	  
	 

  

									
	 	  	$	 	  	$	 
	 The Company’s income-tax (recovery) is allocated as
follows:
	  				  			
	 Current income tax
	  	 	—  	 	  	 	—  	 
	 Deferred income tax
	  	 	—  	 	  	 	111,510	 
		  	  
	  
	 	  	  
	  
	 
		  	 	—  	 	  	 	111,510	 
		  	  
	  
	 	  	  
	  
	 

 Deferred Tax 
 The following
table summarizes the components of unrecognised tax benefits:     
  

									
	 	  	2020	 	  	2019	 
	 	  	$	 	  	$	 
	 Capital assets
	  	 	348,000	 	  	 	941,000	 
	 Losses carried forward
	  	 	3,006,000	 	  	 	2,429,000	 
	 Unrealized gain
	  	 	(17,000)	 	  	 	(17,000)	 
	 Undeducted interest
	  	 	140,000	 	  	 	142,000	 
	 Financing costs
	  	 	41,000	 	  	 	56,000	 
		  	  
	  
	 	  	  
	  
	 
	 Losses carried forward
	  	 	3,518,000	 	  	 	3,551,000	 
	 Deferred tax assets not recognized
	  	 	(3,518,000)	 	  	 	(3,551,000)	 
		  	  
	  
	 	  	  
	  
	 

 The Company has non-capital losses to reduce future taxable income, benefit of
which has not been recognized. If unutilized, these losses will expire as follows: 
  

									
	 	  	Year	 	  	$	 
	 Expires
	  	 	2034	 	  	 	20,000	 
		  	 	2035	 	  	 	104,000	 
		  	 	2036	 	  	 	211,000	 
		  	 	2037	 	  	 	429,000	 
		  	 	2038	 	  	 	1,826,000	 
		  	 	2039	 	  	 	6,545,000	 
		  	 	unlimited	 	  	 	3,160,000	 
		  				  	  
	  
	 
		  				  	 	12,295,000	 
		  				  	  
	  
	 

  
 42 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Notes to the Consolidated Financial Statements 
 For the years ended
December 31, 2020 and 2019 
 (Expressed in Canadian dollars) 

 
  

	22.	 Share Capital 

  

 a) Authorized share capital 

Unlimited number of voting common shares without par value  
 b) Common
shares issued 
  

									
	 	  	Number of
common shares	 	  	Share
Capital	 
	 	  	#	 	  	$	 
	 Balance, January 1, 2019
	  	 	63,373,816	 	  	 	7,794,137	 
	 Private placement (i)(ii)
	  	 	5,133,338	 	  	 	1,711,384	 
	 Share issuance costs - warrant
	  	 	—  	 	  	 	(25,799	) 
	 Share issuance costs - cash (iii)
	  	 	—  	 	  	 	(21,726	) 
	 Shares issued in settlement of convertible debt (vi)
	  	 	7,594,547	 	  	 	1,093,549	 
	 Shares issued on acquisitions (Note 5,6 and (viii))
	  	 	950,000	 	  	 	294,500	 
	 Rights issue (vii)
	  	 	7,281	 	  	 	3,276	 
	 Shares issued in settlement of accrued interest (x)
	  	 	2,297,498	 	  	 	369,131	 
	 Exercise of stock options (iv) (v)
	  	 	355,560	 	  	 	67,954	 
	 Share issued in settlement of contingent consideration
	  	 	1,000,380	 	  	 	144,930	 
	 Shares issued and to be issued against exercise of warrants
	  	 	760,686	 	  	 	289,161	 
	 Shares issued on reverse takeover (Note 4 and (ix))
	  	 	1,363,636	 	  	 	504,273	 
		  	  
	  
	 	  	  
	  
	 
	 Balance, December 31, 2019
	  	 	82,836,742	 	  	 	12,224,770	 
		  	  
	  
	 	  	  
	  
	 
	 Private placement (i)
	  	 	34,453,641	 	  	 	3,897,980	 
	 Bought deals (i)
	  	 	26,036,000	 	  	 	19,550,920	 
	 Share issuance costs - cash (i)
	  	 	—	 	  	 	(1,834,037	) 
	 Share issuance costs - warrant (i)
	  	 	—	 	  	 	(988,267	) 
	 Shares issued in settlement of promissory note (ii)
	  	 	10,412,250	 	  	 	5,518,493	 
	 Share-based compensation (iii)
	  	 	2,516,756	 	  	 	269,264	 
	 Shares issued for services (iv)
	  	 	1,465,906	 	  	 	390,149	 
	 Shares issued in settlement of accrued interest (v)
	  	 	2,439,312	 	  	 	229,722	 
	 Share issued in settlement of contingent consideration (vi)
	  	 	4,389,556	 	  	 	553,948	 
	 Shares issued against exercise of warrants (vii)
	  	 	8,667,503	 	  	 	2,790,684	 
	 Exercise of stock options (viii)
	  	 	1,457,280	 	  	 	755,981	 
	 Shares issued in lieu of directors’ fees (ix)
	  	 	675,000	 	  	 	94,500	 
		  	  
	  
	 	  	  
	  
	 
	 Balance, December 31, 2020
	  	 	175,349,946	 	  	 	43,454,107	 
		  	  
	  
	 	  	  
	  
	 

 2020 
 (i) 

Private placements 
 On September 25, 2020, the Company
completed a non-brokered private placement for gross proceeds of $5,168,046 with the issuance of 34,453,641 subscription receipt units at an issue price of $0.15 per unit. Upon issuance, each subscription
receipt unit automatically converted into one common share and one-half common share purchase warrant. Each whole warrant is exercisable to purchase one common share of the Company at a price of $0.20 per
share for a period of two (2) years from the date of issuance. 

  
 43 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Notes to the Consolidated Financial Statements 
 For the years ended
December 31, 2020 and 2019 
 (Expressed in Canadian dollars) 

 
  

	22.	 Share Capital (continued) 

 

 b) Common shares issued (continued) 

2020 (continued) 
 The fair value of the 17,243,486 warrants
contained in the Units issued on this date was estimated using the Black-Scholes option pricing model at $0.11 per warrant, based on the following assumptions: underlying share price of $0.175 per share, expected annualized volatility of 138.52%;
risk-free interest rate of 0.35%; expected dividend yield of 0%; and expected life of 2 years. Out of the total gross proceeds from the private placement, the fair value of warrants amounting to $1,270,066 was allocated to warrant reserve. 

 The Company also issued 1,337,788 broker warrants in combination with the closing of the subscription receipt unit financing. Each broker warrant
entitles the holder to purchase one common share of the Company at a price of $0.20 per share for a period of two (2) years from the date of issuance. The fair value of the 1,337,788 broker warrants issued was estimated using the Black-Scholes
option pricing model at $0.11 per warrant, based on the following assumptions: underlying share price of $0.175 per share, expected annualized volatility of 138.52%; risk-free interest rate of 0.35%; expected dividend yield of 0%; and expected life
of 2 years. In relation to the private placement, the Company also paid cash issuance cost of $180,263. The fair value of broker warrants and cash issuance cost was allocated to shares and warrants on a
pro-rata basis based on their relative fair values. 
 All securities issued in connection with the private
placement were subject to a statutory hold period of four months and one day from the date of issuance in accordance with applicable securities laws. 
 Bought
deals 
 On November 19, 2020, the Company closed a bought deal offering with a syndicate of underwriters and pursuant to which the
Underwriters were issued, on a bought deal basis, 12,236,000 common shares of the Company at a price of $0.47 per share for aggregate gross proceeds to the Company of $5,750,920. 

The Company also issued 872,480 broker warrants in combination with the closing of the offering. Each broker warrant entitles the holder to purchase one
common share of the Company at a price of $0.47 per share for a period of two (2) years from the date of issuance. The fair value of the 872,480 broker warrants issued was estimated using the Black-Scholes option pricing model at $0.31 per
warrant, based on the following assumptions: underlying share price of $0.47 per share, expected annualized volatility of 139.21%; risk-free interest rate of 0.27%; expected dividend yield of 0%; and expected life of 2 years. In relation to the
bought deal, the Company also paid cash issuance cost of $755,617. 
 On December 30, 2020, the Company closed a bought deal offering with a
syndicate of Underwriters pursuant to which the Underwriters were issued, on a bought deal basis, 13,800,000 common shares of the Company for aggregate gross proceeds to the Company of $13,800,000. 

The Company also issued 771,360 broker warrants in combination with the closing of the offering. Each broker warrant entitles the holder to purchase one
common share of the Company at a price of $1.00 per share for a period of two (2) years from the date of issuance. The fair value of the 771,360 broker warrants issued was estimated using the Black-Scholes option pricing model at $0.78 per
warrant, based on the following assumptions: underlying share price of $1.12 per share, expected annualized volatility of 139.25%; risk-free interest rate of 0.2%; expected dividend yield of 0%; and expected life of 2 years. In relation to the
bought deal, the Company also paid cash issuance cost of $936,207. 

  
 44 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Notes to the Consolidated Financial Statements 
 For the years ended
December 31, 2020 and 2019 
 (Expressed in Canadian dollars) 

 
  

	22.	 Share Capital (continued) 

 

 b) Common shares issued (continued) 

2020 (continued) 
 (ii) On October 29, 2020, the Company
issued 10,412,250 shares valued at $0.53 per share to extinguish the Merida Note III payable. 
 (iii) On January 26, 2020, a total of 1,248,460
common shares valued at $0.10 were issued to CEO and President in lieu of accrued compensation. On April 21, 2020, 313,750 common shares valued at $0.08 were issued to CEO and President in lieu of accrued compensation. On August 5, 2020,
954,546 common shares valued at $0.125 per share were issued to CEO and President in lieu of accrued compensation. 
 (iv) On January 26, 2020,
300,000 common shares valued at $0.140 were issued to a consultant for services rendered and 263,667 valued at $0.105 common shares were issued to settle accounts payable. On April 21, 2020, 422,535 common shares valued at $0.071 per share were
issued to a consultant for services rendered and 87,889 common shares valued at $0.090 were issued to settle accounts payable. On September 29, 2020, 102,877 common shares valued at $0.175 per share were issued to a consultant for services
rendered. 
 On December 3, 2020, the Company issued 125,000 common shares valued at $0.62 per share to a consultant for services rendered. On
December 30, 2020, the Company issued 163,938 common shares valued at $1.14 to consultants for services rendered. 
 (v) On January 28,
2020, the Company issued 1,218,756 common shares valued at $0.10 per share in settlement of $115,906 accrued interest on the Merida Note II for the quarter ended December 31, 2019. On April 21, 2020, the Company issued 1,213,443 common
shares valued at $0.093 per share in settlement of $113,247 accrued interest on Merida Note II for the quarter ended March 31, 2020. 
 On
April 21, 2020, the Company issued 7,113 common shares in the Company valued at $0.08 per share to related parties in settlement of $569 accrued interest on loan provided to the Company. 

(vi) On January 24, 2020, the Company executed the amended agreement with the previous owners of NJAM, whereby all contingent earn-out payments were removed in exchange for issuance of 2,500,000 common shares in the Company valued at $0.14 per share amounting to $350,000. 

On April 21, 2020, the Company issued 882,978 common shares in the Company valued at $0.111 to the previous owners of ROSH on achievement of a
milestone in accordance with the original purchase agreement amounting to $98,370. On June 26, 2020, the Company issued 1,006,578 common shares in the Company valued at $0.105 to the previous owners of ROSH on achievement of a milestone in
accordance with the original purchase agreement amounting to $105,578. 
 (vii) During January to June 2020, shareholders exercised 4,970,503 warrants
valued at $0.09 per common share. In relation to the warrants exercise, the Company also incurred cash issuance costs of $6,250. 
 During October
2020, shareholders exercised 3,630,000 warrants at an exercise price of $0.20 per share. 
 During November and December 2020, shareholders exercised
67,000 warrants at an exercise price of $0.80 per share. 
 The fair value of the warrants exercised amounting to $1,563,739 was also reclassified
from the Warrant reserve to Share capital. 

  
 45 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Notes to the Consolidated Financial Statements 
 For the years ended
December 31, 2020 and 2019 
 (Expressed in Canadian dollars) 

 
  

	22.	 Share Capital (continued) 

 

 b) Common shares issued (continued) 

2020 (continued) 
 (vii) On July 23, 2020, a consultant
exercised 41,750 options at an exercise price of $0.80 per share. 
 On October 19, 2020, a shareholder exercised 153,030 options at an exercise
price of $0.165 per share. 
 On November 13, 2020 and December 2, 2020, shareholders exercised a total of 580,000 options at an exercise
price of $0.165—$0.44 per share. 
 On December 3, 2020, a consultant exercised 20,000 options at an exercise price of $0.165 per share.

 On December 15, 2020, an employee exercised 12,500 options at an exercise price of $0.081 per share. 

On December 15, 2020, a shareholder exercised 150,000 options at an exercise price of $0.165 per share. 

On December 29, 2020, a consultant exercised 500,000 options at an exercise price of $0.185 per share. 

The fair value of the options exercised amounting to $356,087 was also reclassified from the Option reserve to Share capital. 

(viii) On January 26, 2020, the Company issued 675,000 common shares valued at $0.14 per share to Directors as compensation for their services.

 2019 
 Private placements 

(i) On January 17, 2019, the Company completed a private placement financing with the issuance of an aggregate of 374,998 Units at a price of $0.50
per Unit for gross proceeds of $187,499. Each Units consists of 1 common share and one half common share purchase warrant. An aggregate of 187,499 warrants were issued with each whole warrant exercisable to purchase one common share of the Company
at a price of $0.80 for a period of three (3) years from issuance. The fair value of the 187,499 warrants contained in the Units issued on this date was estimated using the Black-Scholes option pricing model at $0.26 per warrant, based on the
following assumptions: underlying share price of $0.37 per share, expected annualized volatility of 144.32%; risk-free interest rate of 1.82%; expected dividend yield of 0%; and expected life of 3 years. 

(ii) During January and February 2019, the Company closed four tranches of private placement financing of subscription receipts with the issuance of
4,758,340 Subscription Receipt Units for gross proceeds of $2,379,170. Each Subscription Receipt Unit converts automatically into one common share and one half common share purchase warrant. An aggregate of 4,758,340 common shares and 2,379,170
warrants are issuable on conversion of the Subscription Receipt Units, with each whole warrant being exercisable to purchase one common share of the Company at a price of $0.80 for a period of three (3) years from issuance. 

The fair value of the 2,379,170 warrants contained in the Subscription Receipt Units issued on this date was estimated using the Black-Scholes option
pricing model at $0.26 per warrant, based on the following assumptions: underlying share price of $0.37 per share, expected annualized volatility of144.32%; risk-free interest rate of 1.77%; expected dividend yield of 0%; and expected life of 3
years. The Company also issued 26,040 broker warrants in combination with the closing of the Subscription Receipt Units. 

  
 46 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Notes to the Consolidated Financial Statements 
 For the years ended
December 31, 2020 and 2019 
 (Expressed in Canadian dollars) 

 
  

	22.	 Share Capital (continued) 

 

 b) Common shares issued (continued) 

 

 2019 (continued) 
  

 Private placements (continued) 
  

 Each broker warrant entitling the holder to purchase one Unit at $0.50 for a period of three
(3) years, with each whole warrant being exercisable to purchase one common share of the Company at a price of $0.80 for a period of three (3) years from issuance. The fair value of the 26,040 broker warrants contained in the Units issued
on this date was estimated using the Black-Scholes option pricing model at $0.25 per warrant, based on the following assumptions: underlying share price of $0.36 per share, expected annualized volatility of 144.32%; risk-free interest rate of 1.77%;
expected dividend yield of 0%; and expected life of 3 years. 
 (iii) In relation to 2019 private placements, the Company paid cash issuance costs of
$23,730, the total of which was allocated to shares and warrants on a pro-rata basis based on their relative fair values. 

(iv) On February 1, 2019, a consultant exercised 300,000 options at a price of $0.016 per share. 

(v) On March 5, 2019 a consultant exercised 55,560 options at a price of $0.09 per share. The fair value of the options exercised amounting to
$58,154 was also reclassified from the Options reserve to Share capital. 
 (vi) On March 5, 2019, $959,000 principal amount debentures, plus
accrued interest of $84,632, were converted into 7,594,547 shares of SHG. The total amount of shares includes a 10% increase in the number of shares to be issued upon conversion as the Company was unable to complete the going public transaction by
the Conversion Date as stipulated in the debenture agreement. 
 (vii) During May 2019, shareholders exercised 7,281 rights shares at a price of $0.45
per share. 
 (viii) On April 4, 2019 and April 9, 2019, the company completed the acquisitions of Rae of Sunshine Health Services
(“ROSH”) LLC and MedEval Clinic LLC respectively and issued common shares as part of the purchase consideration. 
 (ix) The Company issued
common shares as per the Share Exchange Agreement executed between MVC and SHG for the Reverse Takeover of SHG by MVC. 
 (x) On July 12, 2019,
1,219,520 common shares were issued in settlement of $241,090 accrued interest on the Merida Note II and the Company incurred issuance cost amounting to $6,142 for these shares. On November 14, 2019, 1,077,978 common shares were issued in
settlement of $128,041 accrued interest on the Merida Note II. 
 (xi) During December 2019, shareholders exercised 760,686 warrants at a price of
$0.09 per share. The fair value of the warrants exercised amounting to $220,699 was also reclassified from the Warrant reserve to Share capital. 
 Warrants

 As more fully described under “Private placements” and “Bought deals”, during the year ended December 31, 2020, the
Company issued 18,581,274 common share purchase warrants with an exercise price of $0.20 including the broker warrants, for the purchase of units, with an exercise price of $0.20. 

  
 47 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Notes to the Consolidated Financial Statements 
 For the years ended
December 31, 2020 and 2019 
 (Expressed in Canadian dollars) 

 
  

	22.	 Share Capital (continued) 

 

 Warrants (continued) 
  

 As detailed in “Bought deals”, under two different offerings, the Company issued 872,480 and
771,360 broker warrants with an exercise price of $0.47 and $1.00 in combination with the closing of the offering. 
 As detailed in “Promissory
Note”, for consideration of the amendment of Merida Note III, the Company issued 3,000,000 common share purchase warrants with an exercise price of $0.14. 

During the year ended December 31, 2020, 5,912,850 warrants expired and the fair value of these expired warrants amounting to $1,683,782 (December
31, 2019: $nil) was removed from the Warrant reserve. 
 As more fully described under “Private Placements”, in conjunction with private
placements during the year ended December 31, 2019, the Company issued 2,566,669 common share purchase warrants with an exercise price of $0.80 and 26,040 broker warrants, for the purchase of units, with an exercise price of $0.80. 

A summary of the warrant activity for the year ended December 31, 2020 and 2019 is as follows: 

 

									
	 	  	Number of
Warrants	 	  	Weighted
Average
Exercise Price	 
	 	  	#	 	  	$	 
	 Balance, December 31, 2018
	  	 	13,547,180	 	  	 	0.42	 
	 Granted upon RTO of SHG
	  	 	151,515	 	  	 	1.65	 
	 Granted
	  	 	2,592,710	 	  	 	0.80	 
	 Exercised
	  	 	(760,686	) 	  	 	0.50	 
		  	  
	  
	 	  	  
	  
	 
	 Balance, December 31, 2019
	  	 	15,530,719	 	  	 	0.56	 
		  	  
	  
	 	  	  
	  
	 
	 Exercised
	  	 	(8,667,503	) 	  	 	0.43	 
	 Expired
	  	 	(5,912,850	) 	  	 	0.57	 
	 Granted
	  	 	23,225,118	 	  	 	0.23	 
		  	  
	  
	 	  	  
	  
	 
	 Balance, December 31, 2020
	  	 	24,175,484	 	  	 	0.25	 
		  	  
	  
	 	  	  
	  
	 

 At December 31, 2020, a summary of warrants outstanding and exercisable is as follows: 

 

													
	 Range of exercise prices
	  	Number
outstanding	 	  	Weighted
Average
Exercise
Price	 	  	Weighted
Average
Remaining
Life	 
	 	  	#	 	  	$	 	  	Years	 
	 < $0.20
	  	 	21,610,974	 	  	 	0.19	 	  	 	1.84	 
	 $0.47 - $0.50
	  	 	898,920	 	  	 	0.47	 	  	 	1.87	 
	 $0.80 - $1.00
	  	 	1,665,590	 	  	 	0.89	 	  	 	1.52	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 	  	24,175,484	 	  	0.25	 	  	1.81	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

  
 48 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Notes to the Consolidated Financial Statements 
 For the years ended
December 31, 2020 and 2019 
 (Expressed in Canadian dollars) 

 
  

	22.	 Share Capital (continued) 

 

 Options 
 On
January 23, 2019, the Company granted an aggregate of 485,000 options to employees, directors and consultants. These options are exercisable over a period of 1-5 years from the date of grant with exercise
prices ranging from $0.44- $0.50, vesting over 4 years for employees and immediately for directors and consultants. 

On April 17, 2020, the Company granted an aggregate of 2,060,777 options to employees and consultants. These options are exercisable over a period
of 5 years from the date of grant with exercise price of $0.081 vesting over 3 years from the date of grant. 
 On August 4, 2020, the Company
cancelled 605,928 stock options granted to employees in prior years. These options were replaced by those previously granted to employees on April 17, 2020. 

On August 18, 2020, the Company granted 2,736,440 options to Directors. 25% of the options vest immediately at an exercise price of $0.115, 25%
vest after 6 months from the date of grant at an exercise price of $0.125, 25% vest after 12 months from the date of grant at an exercise price of $0.15 and 25% vest after 18 months from the date of grant at an exercise price of $0.175. 

On September 18, 2020 the Company issued 600,000 options to a consultant for their services. The options are exercisable at $0.185 per share and
vest 25% upon grant, 25% upon closing of a $500,000 private placement during September 2020 and 50% upon the share price of the Company reaching $0.30 per share on the CSE for 20 consecutive days. The Company also cancelled 2,485,134 stock options
granted to Directors on November 5, 2018, which had an exercise price of $0.44 per share. 
 On November 27, 2020, 2,550,000 options were
issued to consultants at an exercise price of $0.51—$0.60 per share. 1,300,000 options vested fully upon grant, 1,000,000 options vest 50% upon grant and 50% on commencement of trading on the NASDAQ and 250,000 options vests in batches of 25%
upon grant, of 3 months, 6 months and 9 months from the date of grant. 
 On December 2, 2020, the Company granted 3,176,000 options to the
Directors at an exercise price of $0.77 per share. The options vested fully upon grant. 
 On December 9, 2020 the Company granted 100,000
options to a consultant for their services. The options are exercisable at $0.94 per share, 50% vest after one year from the date of grant and 50% vest after two years from the date of grant. 

On December 14, 2020, the Company granted 500,000 options to consultants for their services. The options are exercisable at $1.11 per share and
vested fully upon grant. 
 On December 30, 2020, the Company granted 223,380 options to Directors at an exercise price of $1.14 per share. The
options vested fully upon grant. 
 As detailed in “Common shares issued”, during the year ended December 31, 2020, 1,457,280 options
were exercised. In addition, during the year ended December 31, 2020, 1,151,693 options were expired and the fair value of these expired options amounting to $1,159,737 (December 31, 2019: $nil) was removed from the option reserve. 

  
 49 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Notes to the Consolidated Financial Statements 
 For the years ended
December 31, 2020 and 2019 
 (Expressed in Canadian dollars) 

 
  

	22.	 Share Capital (continued) 

 

 Options (continued) 
  

 A summary of the options activity for the periods ended December 31, 2020 and 2019 is as follows:

  

									
	 	  	Number of
Options	 	  	Weighted
Average
Exercise Price	 
		  	 	#	 	  	$	 	 
	 Balance, December 31, 2018
	  	 	5,925,868	 	  	 	0.36	 
	 Granted upon RTO of SHG
	  	 	666,060	 	  	 	0.39	 
	 Granted
	  	 	485,000	 	  	 	0.47	 
	 Exercised
	  	 	(355,560	) 	  	 	0.05	 
		  	  
	  
	 	  	  
	  
	 
	 Balance, December 31, 2019
	  	 	6,721,368	 	  	 	0.38	 
		  	  
	  
	 	  	  
	  
	 
	 Granted
	  	 	11,946,597	 	  	 	0.45	 
	 Exercised
	  	 	(1,457,280	) 	  	 	0.27	 
	 Expired
	  	 	(1,151,693	) 	  	 	0.20	 
	 Cancelled
	  	 	(3,091,062	) 	  	 	0.44	 
		  	  
	  
	 	  	  
	  
	 
	 Balance, December 31, 2020
	  	 	12,967,930	 	  	 	0.56	 
		  	  
	  
	 	  	  
	  
	 

 At December 31, 2020, a summary of stock options outstanding and exercisable is as follows: 

 

																					
	 Range of exercise prices
	  	Number
outstanding	 	  	Weighted
average
Exercise
Price	 	  	Weighted
Average
Remaining
Life	 	  	Number
exercisable	 	  	Weighted
average
exercise
price	 
	 	  	#	 	  	$	 	  	(years)	 	  	#	 	  	$	 
	< $0.25	  	 	5,999,330	 	  	 	0.12	 	  	 	4.02	 	  	 	2,367,522	 	  	 	0.12	 
	$0.25 - $0.49	  	 	151,820	 	  	 	0.39	 	  	 	2.09	 	  	 	75,729	 	  	 	0.41	 
	$0.50 - $0.74	  	 	2,817,400	 	  	 	0.53	 	  	 	1.40	 	  	 	2,817,400	 	  	 	0.53	 
	$0.75 - $0.99	  	 	3,276,000	 	  	 	0.78	 	  	 	4.89	 	  	 	3,276,000	 	  	 	0.78	 
	$1.00 - $1.14	  	 	723,380	 	  	 	1.12	 	  	 	2.89	 	  	 	723,380	 	  	 	1.12	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
		  	 	12,967,930	 	  	$	0.43	 	  	 	3.59	 	  	 	9,260,030	 	  	$	0.56	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

 The aggregate fair value of the 11,946,597 stock options granted during the year ended December 31, 2020 amounted
to $4,499,053. The fair value of the options was calculated using the Black-Scholes model using a risk-free interest rate of 0.2%—2.17%, volatility of 139.25%~144.32%, expected life of 1 to 5 years, and 0% dividend yield. 

The fair value of the 485,000 stock options issued during the year ended December 31, 2019 amounted to $108,517. The fair value of the options was
calculated using the Black-Scholes model using a risk-free interest rate of 1.57%—1.85%, volatility of 144.32%, expected life of 1 to 5 years, and 0% dividend yield. 

During the year ended December 31, 2020, $4,312,647 (December 30, 2019—$1,120,813) has been recognized as a share-based compensation expense
for the options vested during the period. 

  
 50 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Notes to the Consolidated Financial Statements 
 For the years ended
December 31, 2020 and 2019 
 (Expressed in Canadian dollars) 

 
  

	23.	 Financial Instruments and Risk Management 

 

 The Company is exposed, in varying degrees, to a variety of financial related risks. 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. The Company’s primary exposure to credit risk is on cash and trade and other receivables and receivable from related party as at December 31, 2020 and 2019. The bank balances are deposited with high credit rated banks, therefore the
credit risk is limited. The Company has established procedures to manage credit exposure including credit approvals and credit limits. These procedures are mainly due to the Company’s internal guidelines. 

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 manages liquidity risk by maintaining cash balances to ensure that it is able to meet its short term and long-term obligations as and when they fall due. The Company
manages Company-wide cash projections centrally and regularly updates projections for changes in business and exchange rates. The expected timing of consolidated cash flows relating to financial liabilities as at December 31, 2020 and 2019, is
as follows: 
  

																	
	 December 31, 2020
	  	Less than
1 year
$	 	  	1-3
years
$	 	  	3-5
years
$	 	  	Total
$	 
	 Accounts payable and accrued liabilities
	  	 	1,123,275	 	  	 	—  	 	  	 	—  	 	  	 	1,123,275	 
	 Loan payable
	  	 	515,816	 	  	 	328,247	 	  	 	—  	 	  	 	844,063	 
	 Purchase consideration payable
	  	 	526,393	 	  	 	—	 	  	 	—  	 	  	 	526,393	 
	 Lease Liabilities
	  	 	562,875	 	  	 	610,777	 	  	 	148,624	 	  	 	1,322,275	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
		  	 	2,678,539	 	  	 	926,684	 	  	 	148,624	 	  	 	3,734,046	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
					
	 December 31, 2019
	  	Less than
1 year
$	 	  	1-3
years
$	 	  	3-5
years
$	 	  	Total
$	 
	 Accounts payable and accrued liabilities
	  	 	1,849,115	 	  	 	—  	 	  	 	—  	 	  	 	1,849,115	 
	 Payable to related parties
	  	 	24,840	 	  	 	—  	 	  	 	—  	 	  	 	24,840	 
	 Promissory note payable
	  	 	4,003,465	 	  	 	—  	 	  	 	—  	 	  	 	4,003,465	 
	 Purchase consideration payable
	  	 	566,318	 	  	 	—  	 	  	 	—  	 	  	 	566,318	 
	 Lease Liabilities
	  	 	769,570	 	  	 	883,441	 	  	 	—  	 	  	 	1,653,011	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
		  	 	7,213,308	 	  	 	883,441	 	  	 	—  	 	  	 	8,096,749	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

 Foreign currency risk 

Currency risk relates to the risk that the fair values or future cash flows of the Company’s financial instruments will fluctuate because of changes
in foreign exchange rates. Exchange rate fluctuations affect the revenues and costs that the Company earns and incurs in its operations. 
 The
Company’s presentation currency is the Canadian dollar and the Company’s subsidiaries operate in the United States and therefore a majority of revenues are earned in US dollars. The Company also holds US dollar denominated debt. The
fluctuation of the Canadian dollar in relation to the US dollar will consequently impact the profitability of the Company and may also affect the value of the Company’s assets and liabilities and the amount of shareholders’ equity. 

  
 51 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Notes to the Consolidated Financial Statements 
 For the years ended
December 31, 2020 and 2019 
 (Expressed in Canadian dollars) 

 
  

	23.	 Financial Instruments and Risk Management (continued) 

 

 Foreign currency risk (continued) 
  

 The Company’s net monetary position in the US dollar as of December 31, 2020 and 2019 is
summarized below with the effect on earnings before tax of a 10% fluctuation of the US dollar to the Canadian dollar: 
  

									
	 	  	2020
$	 	  	2019
$	 
	 Net monetary asset (liability) position (CA$ Equivalent)
	  	 	352,782	 	  	 	(4,337,877	) 
	 Impact of 10% variance
	  	 	35,278	 	  	 	(433,788	) 

 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. The Company’s exposure to interest rate risk is limited and only relates to its ability to earn
interest income on cash balances at variable rates. Changes in short term interest rates will not have a significant effect on the fair value of the Company’s cash account. 

Fair value 
 The Company classified and subsequently measured
cash, trade and other receivables, accounts payable and accrued liabilities, payable to related parties and loan payable at amortized cost and the fair value of these financial instruments approximates carrying value due to their short-term nature
and/or carrying market rates of interest. Promissory note payable and purchase consideration payable are classified at fair value through profit or loss (FVTPL). There were no transfers to or from any level of the fair value hierarchy during the
year ended December 31, 2020. 
 Level 3 hierarchy: 

The following tables illustrate the classification and hierarchy of the Company’s financial instruments, measured at fair value in the statements of
financial position as at December 31, 2020 and December 31, 2019: 
  

																	
	 	  	As at December 31, 2020—(Liabilities, at fair value)	 
	 	  	Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)	 	  	Significant
Other
Observable
Inputs
(Level 2)	 	  	Significant
Unobservable
Inputs
(Level 3)	 	  	Aggregate
Fair Value	 
	 	  	$	 	  	$	 	  	$	 	  	$	 
	 Promissory note payable
	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	—  	 
	 Purchase consideration payable
	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	—  	 

  
 52 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Notes to the Consolidated Financial Statements 
 For the years ended
December 31, 2020 and 2019 
 (Expressed in Canadian dollars) 

 
  

	23.	 Financial Instruments and Risk Management (continued) 

 

 Fair value (continued) 
  

																	
	 	  	As at December 31, 2019—(Liabilities, at fair value)	 
	 	  	Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)	 	  	Significant
Other
Observable
Inputs
(Level 2)	 	  	Significant
Unobservable
Inputs
(Level 3)	 	  	Aggregate
Fair Value	 
	 	  	$	 	  	$	 	  	$	 	  	$	 
	 Promissory note payable
	  	 	—  	 	  	 	—  	 	  	 	4,003,465	 	  	 	4,003,465	 
	 Purchase consideration payable
	  	 	—  	 	  	 	—  	 	  	 	566,318	 	  	 	566,318	 

 The following table presents the changes in fair value measurements of financial instruments classified as Level 3.
These financial instruments are measured at fair value utilizing non-observable market inputs. The net change in unrealized gains or losses is recognized in the statements of loss.  

 

																																					
	 Merida
Note III
	  	Opening
balance	 	  	Addition	 	  	Interest
repaid
during
the year	 	 	Repaid
during
the year	 	 	Warrants
issued
for
amendment	 	 	Fair
valuation
impact	 	  	Loss
on
conversion	 	  	Foreign
exchange
Impact	 	  	Closing
balance	 
	 	  	$	 	  	$	 	  	$	 	 	$	 	 	$	 	 	$	 	  	$	 	  	$	 	  	$	 
	 2020
	  	 	—  	 	  	 	3,907,203	 	  	 	(191,705	) 	 	 	(5,518,493	) 	 	 	(216,145	) 	 	 	1,872,238	 	  	 	146,902	 	  	 	—  	 	  	 	—  	 

  

																													
	 Merida
Note II
	  	Opening
balance	 	  	Addition	 	  	Interest repaid
during
the year	 	 	Repaid during
the year	 	 	Fair valuation
impact	 	  	Foreign
exchange
impact	 	  	Closing
balance	 
	 	  	$	 	  	$	 	  	$	 	 	$	 	 	$	 	  	$	 	  	$	 
	 2020
	  	 	4,003,465	 	  	 	—  	 	  	 	(113,247	) 	 	 	(4,201,956	) 	 	 	311,738	 	  	 	—  	 	  	 	—  	 
	 2019
	  	 	—  	 	  	 	4,056,298	 	  	 	(243,947	) 	 	 	—  	 	 	 	191,114	 	  	 	—  	 	  	 	4,003,465	 

  

																									
	 NJAM
closing
liability
	  	Opening balance	 	  	Addition	 	  	Repaid during
the year	 	 	Fair valuation
impact	 	 	Foreign
exchange impact	 	  	Closing balance	 
	 	  	$	 	  	$	 	  	$	 	 	$	 	 	$	 	  	$	 
	 2020
	  	 	344,378	 	  	 	—  	 	  	 	(350,000	) 	 	 	109	 	 	 	5,513	 	  	 	—  	 
	 2019
	  	 	—  	 	  	 	543,278	 	  	 	(122,148	) 	 	 	(96,098	) 	 	 	19,346	 	  	 	344,378	 

  
 53 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Notes to the Consolidated Financial Statements 
 For the years ended
December 31, 2020 and 2019 
 (Expressed in Canadian dollars) 

 
  

	23.	 Financial Instruments and Risk Management (continued) 

 

 Fair value (continued) 
  

																									
	 ROSH
closing
liability
	 	Opening
balance	 	 	Addition	 	 	Repaid
during the
year	 	 	Fair
valuation
impact	 	 	Foreign
exchange
impact	 	  	Closing
balance	 
	 	 	$	 	 	$	 	 	$	 	 	$	 	 	$	 	  	$	 
	2020	 	 	221,940	 	 	 	—  	 	 	 	(203,948	) 	 	 	(28,083	) 	 	 	10,091	 	  	 	—  	 
	2019	 	 	—  	 	 	 	472,158	 	 	 	(265,070	) 	 	 	(61,932	) 	 	 	76,784	 	  	 	221,940	 

 The following table presents the fair value categorized by key valuation techniques and the unobservable inputs used
within Level 3 as at: 
  

													
	 December 31, 2020
	  	 	 	  	 	 	  	 	 
	 Description
	  	Valuation technique	 	  	Fair
Value	 	  	Unobservable
inputs	 
	 	  	 	 	  	$	 	  	 	 
	 Promissory note payable
	  	 	—  	 	  	 	—  	 	  	 	(i	) 
				
	 December 31, 2019
	  	 	 	  	 	 	  	 	 
	 Description
	  	Valuation technique	 	  	Fair
Value	 	  	Unobservable
inputs	 
	 	  	 	 	  	$	 	  	 	 
	 Promissory note payable
	  	 	Monte Carlo Simulation	 	  	 	4,033,465	 	  	 	(i	) 
	 Purchase consideration payable—NJAM
	  	 	Monte Carlo Simulation	 	  	 	344,378	 	  	 	(i	) 
	 Purchase consideration payable—ROSH
	  	 	Monte Carlo Simulation	 	  	 	221,940	 	  	 	(i	) 

  

	(i)	 Please refer to the assumptions used in the tables of sensitivity analysis below. 

As the valuation of financial instruments for which market quotations are not readily available and are inherently uncertain, the values may fluctuate
materially within short periods of time and are based on estimates, and determinations of fair value may differ materially from values that would have resulted if a ready market existed for the investments. Key assumptions and sensitivities of
Level 3 financial instruments are shown as follows: 
 A 5% change in the following assumptions will have the following impact on the fair value
of promissory note as at December 31, 2019: 
  

													
	 	  	Original	 	  	+5%	 	  	-5%	 
	 	  	$	 	  	$	 	  	$	 
	 Share price volatility
	  	 	4,003,465	 	  	 	4,002,813	 	  	 	4,004,340	 
	 Discount rate
	  	 	4,003,465	 	  	 	3,984,029	 	  	 	4,023,125	 

  
 54 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Notes to the Consolidated Financial Statements 
 For the years ended
December 31, 2020 and 2019 
 (Expressed in Canadian dollars) 

 
  

	23.	 Financial Instruments and Risk Management (continued) 

 

 Fair value (continued) 
  

 A 5% change in the following assumptions will have the following impact on the fair value of
consideration payable for NJAM as at December 31, 2019: 
  

													
	 	  	Original	 	  	+5%	 	  	-5%	 
	 	  	$	 	  	$	 	  	$	 
	 Asset volatility
	  	 	344,378	 	  	 	337,462	 	  	 	337,522	 
	 Revenue forecast
	  	 	344,378	 	  	 	344,714	 	  	 	330,986	 
	 Discount rate (cash coupon)
	  	 	344,378	 	  	 	337,983	 	  	 	337,805	 

 A 5% change in the following assumptions will have the following impact on the fair value of consideration payable for
ROSH as at December 31, 2019: 
  

													
	 	  	Original	 	  	+5%	 	  	-5%	 
	 	  	$	 	  	$	 	  	$	 
	 Share price volatility
	  	 	221,940	 	  	 	217,585	 	  	 	226,296	 
	 Asset volatility
	  	 	221,940	 	  	 	230,478	 	  	 	213,403	 
	 Revenue forecast
	  	 	221,940	 	  	 	226,499	 	  	 	217,382	 
	 Discount rate (cash coupon)
	  	 	221,940	 	  	 	221,438	 	  	 	222,443	 

  

	24.	 Capital management 

The Company manages its capital to maintain its ability to continue as a going concern and to provide returns to shareholders and benefits to other
stakeholders. The capital structure of the Company consists of equity comprised of issued share capital and reserves ($27,637,964 and $1,387,333 as at December 31, 2020 and December 31, 2019, respectively). 

The Company manages its capital structure and makes adjustments to it in light of economic conditions. The Company, upon approval from its Board of
Directors, will balance its overall capital structure through new share issues or by undertaking other activities as deemed appropriate under the specific circumstances. The Company is not subject to externally imposed capital requirements and the
Company’s overall strategy with respect to capital risk management remains unchanged from the year ended December 31, 2019. 

  
 55 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Notes to the Consolidated Financial Statements 
 For the years ended
December 31, 2020 and 2019 
 (Expressed in Canadian dollars) 

 
  

	25.	 Related party disclosures 

Compensation of key management personnel 
 Key management
personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly. Key management personnel include the Company’s Chief Executive Officer
(“CEO”), President, Chief Financial Officer (“CFO”) and members of the Company’s Board of Directors. 
 The amounts disclosed
in the table below are the amounts recognized as an expense during the reporting period related to key management personnel. 
  

									
	 	  	Year ended
December 31,
2020	 	  	Year ended
December 31,
2019	 
	 	  	$	 	  	$	 
	 Salary and short-term employee benefits
	  	 	1,261,057	 	  	 	448,000	 
	 Share based compensation
	  	 	2,320,236	 	  	 	405,061	 
	 Professional services
	  	 	55,618	 	  	 	42,540	 
		  	  
	  
	 	  	  
	  
	 
		  	 	3,636,911	 	  	 	895,601	 
		  	  
	  
	 	  	  
	  
	 

 Payable to related parties $nil (December 31, 2019 - $24,840) comprise of short-term loan from shareholders carrying an
interest rate of 8%. 
  

	26.	 Segmented information 

The Company has two reportable segments related to its clinic and software businesses which also align with the two countries in which it operates,
namely, United States and Canada, respectively. Corporate costs are included in the Canadian segment. The disclosure with regards to the Company’s aforementioned segments and locations are listed below: 

 

													
	 Year ended December 31, 2020
	  	USA
(Clinics)	 	  	Canada
(Software)	 	  	Total	 
	 	  	$	 	  	$	 	  	$	 
	 Revenue
	  	 	12,897,826	 	  	 	243,401	 	  	 	13,141,227	 
	 Cost of Sales
	  	 	4,111,765	 	  	 	—  	 	  	 	4,111,765	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Gross profit
	  	 	8,786,061	 	  	 	243,401	 	  	 	9,029,462	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Total operating expenses
	  	 	7,338,416	 	  	 	8,744,856	 	  	 	16,083,272	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Income (loss) from operations
	  	 	1,447,645	 	  	 	(8,501,455	) 	  	 	(7,053,810	) 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Foreign exchange loss
	  	 	—  	 	  	 	178,134	 	  	 	178,134	 
	 Gain on debt settlement
	  	 	—  	 	  	 	(147,851	) 	  	 	(147,851	) 
	 Change in fair value of financial liabilities
	  	 	(27,974	) 	  	 	2,183,976	 	  	 	2,156,002	 
	 Accretion on purchase consideration payable and loan payable
	  	 	75,062	 	  	 	—  	 	  	 	75,062	 
	 Interest on lease liabilities
	  	 	161,855	 	  	 	4,345	 	  	 	166,200	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Net loss before income tax
	  	 	1,238,702	 	  	 	(10,720,059	) 	  	 	(9,481,357	) 
	 Income tax expense
	  	 	—  	 	  	 	—  	 	  	 	—  	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Net income (loss)
	  	 	1,238,702	 	  	 	(10,720,059	) 	  	 	(9,481,357	) 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

  
 56 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Notes to the Consolidated Financial Statements 
 For the years ended
December 31, 2020 and 2019 
 (Expressed in Canadian dollars) 

 
  

	26.	 Segmented information (continued) 

 

													
	 Year ended December 31, 2020
	  	USA
(Clinics)	 	  	Canada
(Software)	 	  	Total	 
	 	  	$	 	  	$	 	  	$	 
	 Non-current assets
	  	 	9,361,370	 	  	 	749,626	 	  	 	10,110,996	 
	 Total assets
	  	 	11,468,705	 	  	 	20,003,372	 	  	 	31,472,077	 
	 Total liabilities
	  	 	3,273,724	 	  	 	560,389	 	  	 	3,834,113	 
				
	 Year ended December 31, 2019
	  	USA
(Clinics)	 	  	Canada
(Software)	 	  	Total	 
	 	  	$	 	  	$	 	  	$	 
	 Revenue
	  	 	13,278,075	 	  	 	145,672	 	  	 	13,423,747	 
	 Cost of Sales
	  	 	4,100,672	 	  	 	—  	 	  	 	4,100,672	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Gross profit
	  	 	9,177,403	 	  	 	145,672	 	  	 	9,323,075	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Total operating expenses
	  	 	11,863,957	 	  	 	6,743,669	 	  	 	18,607,626	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Income (loss) from operations
	  	 	(2,686,554	) 	  	 	(6,597,997	) 	  	 	(9,284,551	) 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Foreign exchange loss
	  	 	—  	 	  	 	266,422	 	  	 	266,422	 
	 Reverse takeover transaction cost
	  	 	—  	 	  	 	807,995	 	  	 	807,995	 
	 Change in fair value of financial liabilities
	  	 	(158,030	) 	  	 	587,368	 	  	 	429,338	 
	 Accretion on convertible debentures
	  	 	—  	 	  	 	28,632	 	  	 	28,632	 
	 Interest on lease liabilities
	  	 	201,990	 	  	 	10,325	 	  	 	212,315	 
	 Gain on debt settlement
	  	 	—  	 	  	 	(166,311	) 	  	 	(166,311	) 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Net loss before income tax
	  	 	(2,730,514	) 	  	 	(8,132,428	) 	  	 	(10,862,942	) 
	 Income tax expense
	  	 	111,510	 	  	 	—  	 	  	 	111,510	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Net income (loss)
	  	 	(2,842,024	) 	  	 	(8,132,428	) 	  	 	(10,974,452	) 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
				
	 Year ended December 31, 2019
	  	USA
(Clinics)	 	  	Canada
(Software)	 	  	Total	 
	 	  	$	 	  	$	 	  	$	 
	 Non-current assets
	  	 	7,985,915	 	  	 	996,140	 	  	 	8,982,055	 
	 Total assets
	  	 	7,834,183	 	  	 	1,649,899	 	  	 	9,484,082	 
	 Total liabilities
	  	 	2,814,005	 	  	 	5,282,744	 	  	 	8,096,749	 

  

	27.	 Subsequent events 

The Company has evaluated subsequent events until April 19, 2021 and are presented below: 

(i) On January 4, 2021, the Company’s shares were voluntarily delisted from the Canadian Securities Exchange. On January 5, 2021, The
Company’s shares commenced trading on the TSX-V under the symbol “SHG”. 
 (ii) On
January 4, 2021 (the “Closing Date”), the Company acquired 100% of the identified assets of Colorado based primary care services clinic group Apex Family Medicine, LLC (“Apex”) for a total cash consideration of
$2.36 million (US$1.85 million). The Company paid $ 1.24 million (US$0.97 million) on Closing Date while 
 $1.12 million (US$0.88
million) is payable in two instalments over a 6-months period. On April 5, 2021, the Company paid the first instalment of $0.56 million (US$0.44 million). 

(iii) During January 2021, a shareholder exercised 3,750 options at an exercise price of $0.08 per share. In addition, during the same month,
shareholders exercised 759,931 warrants at exercise prices ranging from 
 $0.20 to $0.80 per share. 

  
 57 

 SKYLIGHT HEALTH GROUP INC. (formerly CB2 Insights Inc.) 

Notes to the Consolidated Financial Statements 
 For the years ended
December 31, 2020 and 2019 
 (Expressed in Canadian dollars) 

 
  

	27.	 Subsequent events (continued) 

 

 (iv) On February 3, 2021 (the “Closing Date”), the Company acquired 100% of the
identified assets of River City Medical Associates (“RCMA”), Inc., a Florida corporation doing business as “Absolute Injury & Pain Physicians”, “Absolute Neurology & Injury Physicians”, “Absolute
Laser Pain Relief”, and “River City Primary & Urgent Care” for a total consideration of $5.62 million (US$4.4million) paid as follows: 
  

	 	•	 	 $0.29 million (US$0.22 million) cash. 

 

	 	•	 	 374,167 common shares in the Company valued at $1.28 per share amounting to $0.48 million (US$0.37 million).

  

	 	•	 	 $0.14 million (US$0.11 million) cash payable 120 days after the Closing Date for liabilities prior to Closing Date.

  

	 	•	 	 Common shares in the Company amounting to $1.9 million (US$1.5 million) to be issued in five equal instalments
within 15 months after the Closing Date. 

  

	 	•	 	 $2.81 million (US$ 2.2 million) funds held in an Escrow Account which will be released once the terms of the
Transition Services Agreement have been satisfied. 

 (v) During February 2021, shareholders and a consultant exercised 70,074
options at exercise prices ranging from $0.08 to $1.14 per share while 1,135,000 options were issued to consultants and employees at an exercise price ranging from $1.50—$1.80 per share. In addition, during the same month, shareholders
exercised 2,091,523 warrants at an exercise price of $0.20 to $1.00 per share. 
 (vi) During March 2021, a consultant exercised 19,000 options at an
exercise price of $0.77 per share while 91,800 and 220,000 options were issued to board members and to a contactor, respectively, at an exercise price of $1.30 per share. In addition, during the same month, shareholders exercised 1,323,648 warrants
at an exercise price of $0.20 per share. 
 (vii) On April 5, 2021 (the “Closing Date”), the Company acquired 100% of the membership
interest of Colorado based Primary Care Clinic Group, Rocky Mountain for a total cash consideration of $13.78 million (US$11 million) paid as follows: 
  

	 	•	 	 $10.64 million (US$8.49 million) cash 

 

	 	•	 	 $2.06 million (US$1.65 million) cash payable in three equal instalments over two years from the Closing Date

  

	 	•	 	 $1.08 million (US$0.86 million) cash payable after working capital and other adjustment 

(viii) On April 6, 2021, the Company settled the purchase consideration payable amounting to $0.47 million (US$0.38 million) for the
acquisition of MCM. 
 (ix) During April 2021, shareholders exercised 5,357 warrants at an exercise price of $0.20 per share. 

(x) From January to April 2021, 7,854 options held by consultants expired. 

  
 58

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