Advances from Major Shareholder

Mr. Daniel Solomita, the Company’s major stockholder and CEO, or companies controlled by him, previously made advances to the Company. The advances were unsecured, non-interest bearing with no formal terms of repayment. During the period ended November 30, 2017, the Company repaid to Mr. Solomita or companies controlled by him, as applicable, an aggregate amount of $249,762 and netted against the advances an aggregate amount of $113,223 representing value added taxes and other receivables owed to Mr. Solomita. The amounts due to these entities as of February 28, 2017 were $391,695.

Employment Agreement and Accrued Compensation due to Major Shareholder

The Company entered into an employment agreement with Daniel Solomita, the Company’s President and Chief Executive Officer for an indefinite term. During the term, the officer shall receive monthly salary of $15,000. Compensation expense under this agreement for the nine month period ended November 30, 2017 and 2016 amounted to $135,000. As at February 28, 2017, accrued compensation $360,000 was due to Mr. Solomita. As at November 30, 2017, the total accrued compensation due to Mr. Solomita was paid.

In addition, as previously disclosed, the Company agreed to grant the Mr. Solomita 4 million shares of the Company’s common stock, if certain milestones were met.

Effective April 10, 2017, the Company achieved the first milestone by becoming qualified to trade on the OTCQX and began trading that same date. Therefore, management determined it was probable that the first performance condition would be achieved at February 28, 2017 and the officer’s entitlement to 1,000,000 shares with a fair value of $800,000, in aggregate, had vested. The performance conditions for the remaining 3,000,000 shares of common stock are not considered probable therefore the stock based compensation expense associated with the grant has not been recognized.