* During the year ended December 31, 2019, the Company discontinued operations of its OTC pharmaceuticals products business division business segment. Therefore, certain reclassifications have been made to the prior periods’ consolidated financial statements to confirm to the current period’s presentation on the consolidated statements of financial position, comprehensive loss and changes in equity.

3.A.3. Exchange Rates

In this Annual Report, unless otherwise specified, all dollar amounts are expressed in Canadian Dollars (CDN$). The Government of Canada permits a floating exchange rate to determine the value of the Canadian Dollar against the U.S. Dollar (US$).

Table No. 4 sets forth the exchange rates for the Canadian Dollar at the end of year ended December 31, 20182019 and threefour most recent fiscal years, December 31, 2018, December 31, 2017, December 31, 2016, the stub year ending December 31 2015, and the fiscal year ended June 30, 2015, the average rates for the period and the range of high and low rates for the period. The data for each month during the most recent sixeleven months is also provided.

For purposes of this table, the rate of exchange means the noon buying rate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York.

Table No. 4

U.S. Dollar/Canadian Dollar

3.B. Capitalization and Indebtedness

Table No. 5 sets forth the capitalization and indebtedness of the Company as of December 31, 2018.

Table No. 5

Capitalization and Indebtedness

As of December 31, 2018

(1)See Table 12 for exercise prices and terms of these warrants.Not applicable.

Year ended June 30, 2014

During the year ended June 30, 2014, the Company issued 850,000 shares for the acquisition of an asset, 2,000,000 shares for share subscriptions received in the year ended June 30, 2014, and 937,500 shares were issued through a private placement. At June 30, 2014, there were 36,767,075 shares issued and outstanding.

Private placements

On April 08, 2014 the Company closed a non-brokered private placement of 437,500 units of the Company at a price of $0.40 per unit for gross proceeds of $175,000. Each unit consists of one (1) common share and one transferrable share purchase warrant. Each warrant entitles the holder thereof to purchase one additional common share for a period of twelve months from the Closing Date of the Offering at a price of $1.20 per common share. The warrants are subject to an accelerated exercise provision in the event the shares trade more than $0.40 above the exercise price for ten consecutive days.

In addition, on April 08, 2014 the Company closed a non-brokered private placement of 500,000 units of the Company at a price of $0.40 per unit for gross proceeds of $200,000. Each unit consists of one common share and one transferrable share purchase warrant. Each warrant will entitle the holder thereof to purchase one additional common share for a period of twenty four months from the Closing Date of the Offering at a price of $0.52 per common share.

In accordance with the private placements, finder’s fees of $12,000 cash were paid in addition to the issuance of 75,000 warrants. 30,000 warrants have a life of two years and are exercisable at $0.52. The remaining 45,000 warrants have a life of one year and are exercisable at $1.20. The fair value of these warrants was measured at $47,567. Total share issue cost was $59,567.

Proceeds from the Offering were used by the Company for general ongoing corporate and working capital purposes.

The fair value of the warrants of $375,000 was estimated using the Black-Scholes option pricing model using the following parameters:

Year ended June 30, 2015

Private placements

On December 10, 2014, the Company closed a non-brokered private placement of 1,901,833 units at a price of $0.60 per unit for gross proceeds of $1,141,100. Each unit consists of one common share and one-half of one transferrable share purchase warrant. Each warrant entitles the holder thereof to purchase one additional common share on or before December 10, 2015 at a price of $1.00. Finder’s fees of $91,287 cash were paid in addition to the issuance of 152,146 warrants. The fair value of the warrants issued to agents was estimated using the Black-Scholes option pricing model and amounted to $67,533.

Securities are subject to a four-month hold period that expires April 11, 2015. Proceeds from the offering will be used by the Company for commercialization of the generic and OTC products and for general ongoing corporate and working capital purposes.

Additional share issue costs totaling $203,490 were incurred relating to options and warrants exercised for the year.

Stub year ended December 31, 2015

During the six months ended December 31, 2015, 37,500 shares were issued for the exercise of options, and 434,027 shares were issued for the exercise of warrants.

Year ended December 31, 2016

During the year ended December 31, 2016, 400,000 shares were issued for the exercise of options, and 325,000 shares were issued for the exercise of warrants.

On November 1, 2016, the Company consolidated all of the Company’s issued and outstanding common shares on the basis of every 4 old common shares being consolidated into 1 new common share. All figures in the consolidated financial statements and this 20-F are adjusted to reflect the 4:1 share consolidation.

Year ended December 31, 2017

On June 26, 2017, the Company closed a private placement and issued 4,408,659 units at a price of $0.15 per unit for gross proceeds of $661,299.  Each unit consisted of one common share and one share purchase warrant entitling the holder thereof to acquire additional common share of the Company at a price of $0.20 per share until June 26, 2022. The Company paid finder’s fees of $7,200 in cash and issued 48,000 finder’s warrants valued at $8,210.  The finder’s warrants are exercisable to purchase one common share of the Company at $0.20 per share until June 26, 2022.

On August 3, 2017, the Company closed a private placement and issued 1,326,667 units at a price of $0.15 per unit for gross proceeds of $199,000.  Each unit consisted of one common share and one share purchase warrant entitling the holder thereof to acquire additional common share of the Company at a price of $0.20 per share until August 3, 2022.  

On November 27, 2017, the Company closed a private placement and issued 4,850,000 units at a price of $0.15 per unit for gross proceeds of $727,500.  Each unit consisted of one common share and one share purchase warrant entitling the holder thereof to acquire additional common share of the Company at a price of $0.20 per share until November 27, 2022. The Company paid finder’s fees of $3,300 in cash and issued 22,000 finder’s warrants valued at $3,404.  The finder’s warrants are exercisable to purchase one common share of the Company at $0.20 per share until November 27, 2022.

On December 8, 2017, the Company issued 1,274,000 common shares related to 1,274,000 warrants with an exercise price of $0.20 being exercised for gross proceeds of $254,800.

On December 15, 2017, the Company issued 1,000,000 common shares related to 1,000,000 warrants with an exercise price of $0.20 being exercised for gross proceeds of $200,000.

Year ended December 31, 2018

The Company issued 2,666,667 common shares valued at $773,733 related to the acquisition of HealthTab.

The Company issued 909,090 common shares valued at $181,818 related to the acquisition of the Corozon Platform.

The Company issued 233,450 common shares to Lampyon valued at $43,915 in consideration for services rendered pursuant to the terms of a service agreement entered into on April 10, 2018.

The Company closed a private placement and issued 5,327,335 units at a price of $0.15 per unit for gross proceeds of $799,100. Each unit consisted of one common share and one share purchase warrant entitling the holder thereof to acquire additional common share of the Company at a price of $0.33 per share until July 27, 2020. The Company paid finder’s fees of $18,264 in cash and issued 88,800 finder’s warrants valued at $9,332. The finder’s warrants are exercisable to purchase one common share of the Company at $0.33 per share until July 31, 2020.

The Company issued 131,000 common shares for exercise of 131,000 stock options for gross proceeds of $28,820. $40,181 was reclassified from reserves to share capital on exercise of options.

The Company issued 2,975,500 common shares for exercise of 2,975,500 warrants for gross proceeds of $595,100. $8,210 was reclassified from reserves to share capital on exercise of warrants.

The Company granted 3,030,303 warrants valued at $510,878 to Emerald as consideration for a supply and distribution agreement. These warrants are exercisable to purchase one common share of the Company at $0.33 per share until April 15, 2020. The warrants were valued using the Black-Scholes option pricing model with an estimated life of 2 years, volatility of 154%, dividend yield of 0% and risk-free interest rate of 2.1%.

As at December 31, 2018, the Company has recorded a $211,167 (2017 - $973,333) obligation for shares to be issued of which $200,000 relates to the acquisition of HealthTab and $11,167 relates to shares to be issued to Lampyon. Subsequent to December 31, 2018, the Company issued 1,111,110 shares to HealthTab and 125,081 shares to Lampyon.

Subsequent to the year ended December 31, 2018

Subsequent to December 31, 2018, the Company:

-issued 1,111,110 common shares related to the acquisition of HealthTab.

-closed a private placement and issued 4,206,435 shares at $0.07 for gross proceeds of $294,450

-issued 73,928 shares pursuant to the exercise of 73,928 stock options at $0.28 per option for proceeds of $20,700.

-Issued 125,081 shares to Lampyon to satisfy its obligation to issue shares.

Options:

The changes in share options including those granted to directors, offers and consultants during the years ended December 31, 2018, 2017 and 2016 are summarized as follows:

The following table summarizes information about share options outstanding and exercisable as at December 31, 2018:

(1)Expired unexercised subsequent to year-end

(2)73,928 exercised subsequent to year-end.

Warrants

The Company has issued warrants entitling the holders to acquire common shares of the Company. The summary of changes in warrants is presented below:

3.C. Reasons for the Offer and Use of Proceeds

The Company intends to use the proceeds for working capital purposes in addition to marketing the expansion of the propriety point-of-care-technology platform called HealthTab, which utilizes the Piccolo analyzer, as well as launching myCannabisPGx, an additional pharmacogenomics test recently announced. Not applicable.

3.D. Risk Factors

Risks pertaining to the Company:

The Company's limited operating history makes it difficult to evaluate the Company’s current business and forecast future results.

TheSince its inception, the Company was started as a Capital Pool Company, has been operating its current business since November, 2003 and has had limited revenues during this time. Since its inception, the Companyand has experienced significant operating losses each year. These losses are due to substantial expenditures on intellectual property protection, product development and product testing of commercial and consumer infection control products. The Company has also been engaged in a program ofproduct and pre-clinical testing for registration of a number of therapeutic products and over-the-counter (OTC) pharmaceutical products with Health Canada and the FDA. This testing is costly and time consuming and the Company does not have sufficient funds to undertake all of the testing that is required to satisfy the requirements of these regulatory agencies. Accordingly, the Company requires outside funding to complete these tests. As funds are raised, they will be invested in the testing and the Company will continue to accumulate losses that are proportional to the funds raised and spent on testing. In addition, the Company launched a number of consumer and commercial products, described above, and established new sales and distribution agreements. Although salesSales of T³6^® Antiseptic Hand Sanitizer products were substantial duringdiscontinued in the last quarter of 2009, sales subsequently dropped down nearly zero and were ceased.year ended December 31, 2012. During the year ended December 31, 2019, the Company discontinued its over-the-counter (OTC) pharmaceutical products business. The Company has changed its direction, and Company’sits current operations consist of the marketing and distribution of generic and over-the-counter (“OTC”) pharmaceuticals.developing its pharmagenomic point-of-care technologies (POCT). As a result, future sales of the Company’s products are difficult to predict.

The Company has no significant source of operating cash flow and failure to generate revenues in the future could cause the Company to go out of business.

Based upon current plans to introduce its products into new markets in Canada and internationally, develop new products, maintain the Company’s public listing on the TSX-Venture Exchange (“the Exchange”(the “Exchange”) and support the continued registration of its securities in the US, the Company expects to incur operating losses in future periods. These losses will occur because there are continuing expenses associated with the marketing and production of the Company’s products, research and development, intellectual property protection, testing and registration of pharmaceutical products, legal and accounting fees, the maintenance of its public listing and other expenses associated with running an operating business. Even if the Company becomes operationally profitable from the introduction and sale of new products, the Company will need to raise significant amounts of new funding to expand these activities. Also, the Company may not be successful in generating significant revenues from pharmaceutical products in the future. Failure to generate more revenues could cause the Company to contract or

go out of business. In the future, it is likely that the inventory value will be reduced to reflect selling cost which will further decrease the value of the assets compared to liabilities. Also atAt the time of this report, the Company has sufficient funds to continue the sales of its products but it will be unable to do so without securing further financing.

If the Company raises further funds through equity issuances, the price of its securities could decrease due to the dilution caused by the sale of additional shares.

Additional funds raised by the Company through the issuance of equity or convertible debt securities will cause the Company’s current shareholders to experience dilution and possibly lower the trading price of its shares. Such securities may grant rights, preferences or privileges senior to those of the Company’s common shareholders. The Company is not profitable and will not be profitable for the foreseeable future under its current development plan. The Company plans to issue further equity to raise funds as necessary to continue operations and fund its program of research and development, patent protection and regulatory approvals. As a result, an indeterminate amount of dilution of the Company’s capital stock will occur.

The Company has issued a limited number of shares out of its authorized capital of an unlimited number of common shares, which could be dilutive and negatively affect the share price.

Having an unlimited number of authorized but unissued common shares could allow the Company’s Directors and Officers to issue a large number of shares without shareholder approval, leading to significant dilution of current shareholders and possible lowering of the share price.

The Company could enter into debt obligations and not have the funds to repay these obligations.

The Company does not have any contractual restrictions on its ability to incur debt and, accordingly, the Company could incur significant amounts of indebtedness to finance its operations. Any such indebtedness could contain covenants, which would restrict the Company’s operations. The Company might not be able to repay indebtedness.

The Company could enter into contractual obligations and not have the funds to pay for these obligations.

The Company does not have any contractual restrictions on its ability to enter into binding agreements and, accordingly, the Company could incur significant obligations to third parties including financial obligations. Any such obligations could restrict the Company’s operations and the Company might not be able to pay for its commitments. If the Company cannot meet its commitments, legal action could be taken against the Company. Any such actions could further restrict the Company’s ability to conduct its business or could cause the Company to go out of business.

The Company has a history of generating limited revenuesand the continuing failure to generate further revenues could cause the Company to cease operations.

The Company has no history of pre-tax profit and in the previous four years has had only limited annual revenues for each of the years it has been operating. The Company sustained operating losses for each of its fiscal years and has sustained significant accumulated operating losses. The continued operation of the Company will be dependent upon its ability to generate operating revenues and to procure additional financing. The Company may not be successful in generating revenues or raising capital in the future. Failure to generate revenues or raise capital could cause the Company to cease operations.

The Company’s information technology systems are susceptible to certain risks, including cyber security breaches, which could adversely impact the Company’s operations and financial condition.

The Company’s operations involve information technology systems that process, transmit and store information about our suppliers, customers, employees, and financial information. These systems face threats including telecommunication failures, natural disasters, and cyber security threats, including computer viruses, unauthorized access to our systems, and other security issues. While the Company has implemented security measures to protect these systems, such threats change and evolve almost daily. There is no guarantee these actions will secure the information systems against all threats and vulnerabilities. The compromise or failure of these information systems could have a negative effect on the Company’s operations and financial condition.

As the Company is a Canadian company, it may be difficult for U.S. shareholders of the Company to effect service on the Company or to realize on judgments obtained in the United States.

The Company is a Canadian corporation. All of its directors and officers are residents of Canada and a significant part of its assets are, or will be, located outside of the United States. As a result, it may be difficult for shareholders resident in the United States to effect service within the United States upon the Company, directors, officers or

experts who are not residents of the United States, or to realize in the United States judgments of courts of the United States predicated upon civil liability of any of the Company, directors or officers under the United States federal securities laws. If a judgment is obtained in the U.S. courts based on civil liability provisions of the U.S. federal securities laws against the Company or its directors or officers, it will be difficult to enforce the judgment in the Canadian courts against the Company and any of the Company’s non-U.S. resident executive officers or directors. Accordingly, United States shareholders may be forced to bring actions against the Company and its respective directors and officers under Canadian law and in Canadian courts in order to enforce any claims that they may have against the Company or its directors and officers. Nevertheless, it may be difficult for United States shareholders to bring an original action in the Canadian courts to enforce liabilities based on the U.S. federal securities laws against the Company and any of the Company’s non-U.S. resident executive officers or directors.

The Company’s future performance is dependent on key personnel. The loss of the services of any of the Company’s executives or Board of Directors could have a material adverse effect on the Company.

The Company’s performance is substantially dependent on the performance and continued efforts of the Company’s executives and its Board of Directors. The loss of the services of any of the Company’s executives or Board of Directors could have a material adverse effect on the Company’s business, results of operations and financial condition. There is no assurance that key personnel can be replaced with people with similar qualifications within a reasonable period of time. The Company currently carries key person insurance on any of the executives or members of the board of directors. If any or all Directors resign, there is no assurance that new Directors can be found to replace any directors who resign.

The Company has not declared any dividends since its inception in 2000 and has no present intention of paying any cash dividends on its common shares in the foreseeable future.

The Company has not declared any dividends since its inception in 2000, and has no present intention of paying any cash dividends on its common shares in the foreseeable future. The payment by the Company of dividends, if any, in the future, rests in the discretion of the Company's Board of Directors and will depend, among other things, upon the Company's earnings, its capital requirements and financial condition, as well as other relevant factors.

The Company’s future performance is dependent on key suppliers and manufacturers and a loss of any suppliers or manufacturers could have a material adverse effect on the Company by reducing or eliminating the ability of the Company to manufacture or sell its products.

If any of the Company’s suppliers or manufacturers were to go out of business or were unable to procure the raw materials or other supplies required by the Company to manufacture its products, the Company would have to find other suppliers or manufacturers. There is no guarantee that the Company would be able to find other suppliers or manufacturers. If the Company could not find other suppliers or manufacturers, production of the Company’s products would be delayed for an indefinite period of time and such delays would lead to delayed revenues or reduced revenues or both.

There is no assurance that the Company will be able to secure the funds needed for future development, and failure to secure such funds could lead to a lack of opportunities for growth.

The testing is required in order to obtain required regulatory approvals from Health Canada, the EPA and FDA in the US and the EMA in the EU. A lack of funds would impair the ability of the Company to complete such tests. A lack of funds would also impair the Company’s ability to establish marketing and sales plans once the products have been approved for sale.plans. If adequate financing is not available when required, the Company may be required to delay, scale back or eliminate various activities and may be unable to continue in operation. The Company may seek such additional financing through debt or equity offerings, but there can be no assurance that such financing will be available on terms acceptable to the Company or at all. Any equity offering will result in dilution to the ownership interests of the Company’s shareholders and may result in dilution to the value of such interests.

The Company and the Company’s products have limited brand awareness which limits the ability of the Company to gain credibility from prospective customers and to sell its products into new markets.

Market knowledge of the Company’s name is limited. The Company will need to devote considerable resources to educate new markets about the products the Company offers. In establishing new markets, the Company will be competing with companies that are potentially already entrenched in such markets or may be better funded than the Company. The ability of the Company to raise brand awareness will depend on its ability to raise the money required to undertake such an intensive marketing effort. As noted elsewhere, there is no assurance that the Company can raise funds required for such an investment in marketing.

The Company has limited sales and marketing experience and can provide no assurance that the Company can keep its current customers or gain new ones.

The Company has limited experience in marketing and selling its products and the Company has no sales or marketing staff. The Company will have to expend substantial funds to promote and develop its products. The Company’s success in this regard will depend on the quality of its products and its ability to develop and implement an effective sales and marketing strategy. Failure to achieve the marketing objectives will have a material adverse effect on the Company and on its results of operations and financial condition.

Conflicts of interest may exist for Directors and Officers which may inhibit their ability to act in the best interests of the Company and its shareholders leading to possible impairment of the Company’s ability to achieve its business objectives.

The directors and officers of the Company will not be devoting all of their time to the affairs of the Company. Some of the directors and officers of the Company are directors and officers of other companies. The directors and officers of the Company will be required by law to act in the best interests of the Company. They will have the same obligations to the other companies in respect of which they act as directors and officers. Discharge by the directors and officers of their obligations to the Company may result in a breach of their obligations to the other companies and, in certain circumstances, this could expose the Company to liability to those companies. Similarly, discharge by the directors and officers of their obligations to the other companies could result in a breach of their obligation to act in the best interests of the Company. Such conflicting legal obligations may expose the Company to liability to others and impair its ability to achieve its business objectives.

Management of the Company can, through their stock ownership in the Company, influence all matters requiring approval by the Company’s shareholders.

Management of the Company at the time of this report, collectively own approximately 5%13.5% of the Company's issued and outstanding common shares at that date. These shareholders, if acting together, could significantly influence all matters requiring approval by the Company's shareholders, including the election of directors and the approval of mergers or other business combination transactions. Management may not make decisions that will maximize shareholder value and may make decisions that will contribute to or cause the entrenchment of management.

The value and transferability of the Company shares may be adversely impacted by the limited trading market for the Company’s common shares.

No assurance can be given that a market for the Company’s common shares will be quoted on an exchange in the U.S. or on the Over the Counter Bulletin Board. The Company’s common shares may be subject to illiquidity and investors may not be able to sell their shares in a timely manner.

The value and transferability of the Company shares may be adversely impacted by the penny stock rules.

The sale or transfer of the Company common shares by shareholders in the United States may be subject to the so-called "penny stock rules." Under Rule 15g-9 of the Exchange Act, a broker or dealer may not sell a "penny stock" (as defined in Rule 3a51-1) or effect the purchase of a penny stock by any person unless:

(a)Such sale or purchase is exempt from Rule 15g-9; 

(b)Prior to the transaction the broker or dealer has (1) approved the person's account for transaction in penny stocks in accordance with Rule 15g-9, and (2) received from the person a written agreement to the transaction setting forth the identity and quantity of the penny stock to be purchased; and 

(c)The purchaser has been provided an appropriate disclosure statement as to penny stock investment. 

The SEC adopted regulations generally define a penny stock to be any equity security other than a security excluded from such definition by Rule 3a51-1. Such exemptions include, but are not limited to (1) an equity security issued by an issuer that has (i) net tangible assets of at least $2,000,000, if such issuer has been in continuous operations for at least three years, (ii) net tangible assets of at least $5,000,000, if such issuer has been in continuous operation for less than three years, or (iii) average revenue of at least $6,000,000 for the preceding three years; (2) except for purposes of Section 7(b) of the Exchange Act and Rule 419, any security that has a price of $5.00 or more; and (3) a security that is authorized or approved for authorization upon notice of issuance for quotation on the NASDAQ Stock Market, Inc.'s Automated Quotation System. It is likely that the Company’s common shares, assuming a market were to develop in the US, will be subject to the regulations on penny stocks. Consequently, the market liquidity for the common shares may be adversely affected by such regulations limiting the ability of broker/dealers to sell the Company’s common shares and the ability of shareholders to sell their

securities in the secondary market in the US Moreover, the Company shares may only be sold or transferred by the Company shareholders in those jurisdictions in the US in which an exemption for such "secondary trading" exists or in which the shares may have been registered.

There is no guarantee that there is a market for the Company’s common shares in the United States.

Although the Company’s common shares were added to the OTC Bulletin Board System on April 20, 2009 under the symbol “APCSF”, trading of the company’s shares is very limited. The Company cannot guarantee that there will be a market for the Company’s common shares in the United States or that there will any significant amount trading in the company’s shares for the foreseeable future The Company cannot guarantee that it will continue to maintain a listing in the United States or that it will not be found in default of existing regulations or new regulations and be suspended from trading or delisted.

Risks Pertaining to the Industry

Registration of products may not occur in a timely manner which could lead to delays in product introductions, reduced revenue expectations and extra costs to conduct further tests to satisfy regulatory agencies.

Government agencies, such as the EPA and the Food and Drug Administration (“FDA”) in the United States and Health Products and Food Branch in Canada, need to provide approvals of the Company’s products prior to any sales of these products. To obtain such approvals, the Company must submit extensive amounts of information on the efficacy, toxicology, carcinogenicity, mutagenicity and other testing of the products that it is trying to register. After all of the information is provided, the agencies can request supplemental information and further testing. Once all of the requirements for documentation are satisfied, the agencies can take an indeterminate amount of time to provide approvals for the Company to market its products. Significant delays could lead to slower revenue growth than anticipated. In addition, regulatory delays can allow time for competitors to devise strategies to prevent or reduce market penetration. There is no assurance that government agencies will accept for registration any of the Company’s products.

The Company is very dependent on the registration and sale of its commercial, retail and pharmaceutical products.

If the Company is not successful in achieving regulatory approval of its products, its ability to generate revenues will be impaired. Even if registrations are successful, there is no guarantee that the Company will be able to

maintain the registrations or be able to pass inspections by the regulatory authorities that permit the sale of the Company’s products. In the event of a failed inspection, it is possible that the Company may be ordered to stop the sale of its products or undertake a recall of products that the regulatory authorities deem to be non-compliant with existing regulations. If the Company is ordered to recall or stop the sale of any of its products, the ability of the Company to generate revenues will be impaired. If such a recall or suspension of sales occurs, there is no guarantee that the Company will, at any future date, be able to resume the sale of the suspended or recalled products.

There is a risk that the Company’s intellectual property infringes upon the rights of other companies, which could lead to reduced revenues, reduced margins due to sanctions against the Company, outright withdrawal or prohibition of products or trademarks from the market and significant costs for legal defense against infringement claims, re-branding of products and revised marketing materials.

The Company is unaware of any infringement claims being made against the Company or its products or processes at the time of writing. In the future, there can be no assurances that third parties will not assert infringement claims in the future or require the Company to obtain a license for the intellectual property rights of such third parties. There can be no assurance that such a license, if required, will be available on reasonable terms or at all. If the Company does not obtain such a license, it could encounter delays in the introduction of products or could find that the development, manufacture or sale of products requiring such a license could be prohibited.

There may be limited ability to defend the patents if and when they are issued, leading to loss of sales that might otherwise be realized if the Company was in a position to defend its patents.

Litigation among pharmaceutical companies can be intense and costly. The Company might not have the financial ability to defend its patents, if issued, against larger industry players. Litigation may be necessary to enforce patents issued or assigned to the Company, or to determine the scope and validity of a third party's proprietary rights. Additionally, there can be no assurances that the Company would prevail in any such action. An adverse outcome in litigation or as part of an interference or other proceeding in a court or patent office could subject the Company to significant liabilities, require disputed rights to be licensed from other parties or require the Company

to cease using certain technology or products, any of which could have a material adverse effect on the Company’s business.

ITEM 4. INFORMATION ON THE COMPANY

4.A.  History and Development of the Company

Capital Pool Company

The Company was incorporated by registration of its Memorandum and Articles under the BC Companies Act on May 30, 2000 under the name “Duft Biotech Capital Ltd.” and was classified as a Capital Pool Company (“CPC”) on the TSX Venture Exchange. Under the policies of the TSX Venture Exchange, the principal business of a CPC is to identify and evaluate opportunities for acquisition. The completion of such an acquisition is referred to as a Qualifying Transaction. A CPC does not carry on any business other than the identification and evaluation of assets or businesses in connection with potential Qualifying Transactions, does not have business operations or assets other than seed capital and has no written or oral agreements for the acquisition of an asset or business at the time of formation.

A “Qualifying Transaction”, pursuant to the policies of the TSX Venture Exchange, is a transaction whereby a capital pool company:

(a)Issues or proposes to issue, in consideration for the acquisition of significant assets or businesses, common shares or securities convertible, exchangeable or exercisable into common shares, which, if fully converted, exchanged or exercised would represent more than 25 percent of its common shares issued and outstanding immediately prior to the issuance; 

(b)Enters into an arrangement, amalgamation, merger or reorganization with another issuer with significant assets, whereby the ratio of securities which are distributed to the security holders of the capital pool company  

and the other issuer results in the security holders of the other issuer acquiring control of the resulting entity; or

(c)Otherwise acquires significant assets other than cash. 

On December 28, 2017, the Company completed the acquisition of all the common shares of HealthTab. HealthTab’s primary asset is intellectual property and certain trademarks and web domains related to the design of the HealthTab system, being a lab-accurate, point of care testing platform.

Financings

The Company has financed its operations since inception through funds raised in a series of private placements of common shares:

4.B. Business Overview

Operations & Principal Activities

Avricore Health Inc. is a total health innovator capitalizing on technological advancements and consumer health trends, offering consumers and health providers the ability to take control of spending and health outcomes.

The company had delivered an effective range of generic pharmaceuticals in the past as VANC Pharmaceuticals Inc.  Since it’s repositioning in late 2017 and official rebranding in late 2018 the company’s new focus is now on health innovations in revolutionary point-of-care-technologies (POCT) for targeted health therapies.  Through technology and data, Avricore foresees securing opportunities to distribute endocannabinoid products, nutraceuticals and medicinal cannabis.

To complete its repositioning and refocused marketing plan, Avricore Health launched a new website,www.avricorehealth.com,  in April 2019.

Avricore sees the community pharmacy as underutilized and has identified an opportunity as a healthcare centre and is committed to supporting their ability to deliver innovation to the modern healthcare consumers.  Our company hopes to improve health outcomes for patients and lower overall healthcare system costs in this way, bridging traditional healthcare platforms with disruptive innovations and eventually achieving the healthcare cost savings government and private payors are seeking to achieve

Avricore Health innovations proudly include partnerships with companies, such as Molecular You, to deliver a proprietary cannabis test called MyCannabisPGX delivered through the Avricore HealthTab Platform, which provides better decision support for safe and effective use of medical cannabis.  This summer, a pilot project will see this test offered in pharmacies in the Greater Toronto Area, with the view to expand nationally.

This is all possible thanks to our HealthTab™ technology, which provides lab-accurate results for specific blood work within 12 minutesminutes. Installed at the pharmacy and administered by the attending pharmacist, the patient can quickly access up to 21 bio-markers.  The advantage of this is innovation is that a consumer can quickly access data on their health with simple patient assisted finger prick to share with their physician and healthcare team, track their health overtime, measure the impacts of therapies they are under taking and screen for potential health risks.

HealthTab™ allows for these innovations to be accessed in a low barrier manner at the community pharmacy level for a balanced cost. The pharmacist also is able to benefit from this new revenue stream, build a deeper relationship with clientele and fully realize their ability to deliver lower cost healthcare support.

Currently, the company has been engaged in pilot programs across the county to optimize this offering. Pharmacist and patient feedback has been gathered from these programs to support a broader launch into several pharmacy chains. Currently there are late stage discussions with major pharmacy chains, as well as a strong prospect list for future expansion.  

Another acquisition includes an online educationThe Company has ceased production and direct sales platform to pharmacists called Corozon Platform.  This innovative platform experienced success in attracting a subscription paying consumer base and generating revenues.  Avricore is looking to utilize the platform as a medical cannabis education portal and direct sales platform and is currently in the process of developing this model for a launch by 2020.

The company generates revenue from Hemafer, it’s iron replacement therapy, and continues to expand sales of Hemafer increasing both the geographic scopeall generic and volume of sales by adding Calgary Co-Op, Value Drug Mart and Sobey’s in 2018.

Revenues for theover-the-counter pharmaceuticals including Hemafer, CortiVera 0.5% creams and ointments, as well as SennAce, have ceased production as per plan.  The remaining inventory has been rolled out for sale.  Revenues for CortiVera were significantly impacted by aluminium tariffs and the increased in API price, meaning it saw steep profit decline in this period. Currently, only one generic product remains, Sildenafil, however; marketing is projected to stop in summer 2019.

SennAce.

Avricore is focused on expanding and further deploying its HealthTab and online Corozon Platform to best meet the current community pharmacy sector’s needs. Community pharmacy is expected to focus increasingly on cognitive services with attendant point of care testing as well as medical cannabis in the

future. These offer the pharmacy new ways to generate revenue as their margins are being reduced by changes in generic drug reimbursement with the Pan-Canadian Select Molecule Price Initiative for Generic Drugs that has come into effect on the 1st April 2018.

Avricore commissioned external consultants to initiate an audit of its business operations and to implement best practice solutions to its regulatory, marketing and sales initiatives. As a first step, the company is implementing a comprehensive sales reporting and benchmarking program to support marketing and sales activities. Furthermore, Avricore has appointed Philippe Ugnat as a Strategic Advisor to help drive the corporate growth and strengthen the Company’s presence in the Province of Ontario and Québec.  

Adding to the capacity of the Avricore team are board advisors Hector Bremner, Ray Chepsiuk and Mark Zhou.  

Mr. Bremner’s past experience as a senior advisor to BC’s Minster of International Trade and Deputy Premier, as well as being an elected Councillor in Vancouver BC, complements his 15 years of senior level marketing and communications roles.  He joined Avricore in January 2019 as Board Advisor, Strategic Communications and Government Relations.  In June 2019, he will become Avricore’s Vice-President of Strategic Communications and Public Affairs.

Mr. Chepsiuk’s illustrious career has seen him recognized many times for excellence.  He has been a pharmacy owner and served for two decades as the Commissioner (CEO) Pharmaceutical Advertising Advisory Board (PAAB) where he oversaw the advertising standards for pharmaceuticals in Canada.  He is considered the leading authority on standard of practice and guides Avricore in maintaining the highest standards of practice.

Mr. Zhou is also a pharmacy owner, President of the Chain Drug Store Association of BC and a lecturer at UBC’s School of Pharmacy.  He also serves as the Pharmacy Services Manager for McKesson Canada.  His invaluable insight into the current pharmacy environment provides Avricore with the market knowledge it needs to succeed and enhances it’s business development strategies.

Management has laid the foundations and positioned the companyCompany to capitalize on the changing community pharmacy environment. Over the next several months Avricore will embark on, and announce, several initiatives that will increase salesresult in growth of its core businesses including OTC products andbusiness - point of care testing.  

HealthTab Point of Care Tests

·Pharmacies continue to face severely reduced revenues as a result of pricing changes by the Government of Canada, as well as regional government actions against rebates.  As a result, pharmacy owners are actively looking for innovations in service and value-added services, like HealthTab, to support their businesses growth beyond the traditional dispensing model. 

·Since being acquired by Avricore Health Inc. (formerly VANC Pharmaceuticals Inc.), HealthTab has focused on streamlining operations to reduce the time and costs associated with new deployments.  

·Key developments in the later quarters of the year have included: 

oExpanding HealthTab into more pharmacy locations in Ontario. 

oDeveloping 7 new pharmacy partner locations in Ontario with a major chain in the GTA were launched in Q4.  

oExpansion in service billables with eight locations in the GTA showing an increase over 30% YoY. 

·Continued to negotiate new PoC service integrations to expand the HealthTab testing menu. 

Corozon Platform

This first of its kind, pharmacist facing, portal platform addressing technology and point of care was acquired 2018 is comprised of two modules:

Corozon Academy (e-learning)

Corozon Store (e-commerce)

Scheduled to be re-branded and launched in late 2019, this educational tool and distribution channel will be the first online portal for pharmacists seeking reliable and accurate product knowledge on medicinal cannabis .

The upfront and on-going subscription-based model also allows us to efficiently market new services and products directly to pharmacists throughout Canada such as cannabis modules.  Also supports White Label opportunities and other product distribution potential.

As the full launch of the Corozon platform was postponed during the year ended December 31, 2018 the value of the Corozon platform was written down to $1 as at December 31, 2018.

Non-Prescription and Generic Products

Endocannabinoid-Supporting Product Line

Avricore Health’s partner, Emerald Health Therapeutics has filed for approval of its endocannabinoid-supporting product line with Health Canada Natural and Non-prescription Health Products Directorate (NNHPD).

Once Emerald Health Therapeutics receives approval, the endocannabinoid-supporting product line will be made available for sale on the Corozon Platform shortly thereafter.

Hema-Fer

·New physician samples and updated marketing materials to medical clinics continued to be distributed.

Sales ofThe Company has discontinued Hema-Fer through the Amazon store continue to be consistent. New marketing initiatives have been explored and will be launched shortly to drive traffic.

Hema-Fer has been listed by a significant pharmacy partner in Atlantic Canada, which will drive sales in the next quarter.

Avricore continues to have discussions with pharmacy partners to expand the scope of listings to position Hema-Fer as the brand name heme iron supplement of choice.

CortiVera

Avricore Health has previously made the decision not to move forward with further manufacturing of CortiVera 0.5% cream, CortiVera 0.5% ointment and CortiVera Plus 1% ointment.2019. In line with this earlier decision, existing inventory was rolled out but no further production was initiated. 

SennAce

Avricore Health has previously made the decision not to move forward with further manufacturing of this product. In line with this earlier decision, existing inventory was rolled out but no further production was initiated.

Generic Prescription Products

•Avricore continued the process of winding down its generic portfolio, moving all DINs to Dormant status with Health Canada, and working with regulatory consultants to ensure compliance with Health Canada

until such a point when we can completely exit the market.

•The Company is in discussions to explore opportunities that can potentially expedite its exit from this market to reduce ongoing regulatory costs.

Industry Trends

Industry Trends

According to PWC Canada’s most recent consumer surveysurvey (https://www.pwc.com/ca/en/industries/retail-consumer/consumer-insights-2019/bringing-health-care-online.html?icid=cnsmr-mrkts-feature-ct-lp-bringing-health-care-online-en), Canadians consumers have been utilizing technology to take better control of their health and 75% of them have as many as three health related apps installed on their mobile device.

They also state: “Many Canadians are willing to share their personal information to facilitate ease of access to personal health information through digital channels. Think of accessing lab or diagnostic test results online days after getting the test, instead of having to wait for results and visiting the doctor, or waiting for a phone call.”

The internet of things has hit healthcare consumer trends in a large way and consumers are benefitting from faster, lower cost analysis direct to their device. The Global Consumer Insights Survey (GCIS) demonstrated the rapid shift with more than two-thirds of those surveyed stating they trusted tech companies - not known to be in healthcare, but in hardware, software and online shopping - to access healthcare services. 

67% of consumers stated they were either “somewhat comfortable or very comfortable” with accessing healthcare products and services from a company with all their information collated in one place.  This means companies offering health insurance, over-the-counter medications, or digital diagnostics. 

Healthcare data, its capture, analysis and delivery to the consumer is a top market priority as consumers are looking to take greater control, however; those same consumers are looking to companies to manage the security of that data well and use it ethically. 

The MIT Technology Review has looked at consumer pay genomic services, largely offered online, and have found that 26 Million (https://www.technologyreview.com/s/612880/more-than-26-million-people-have-taken-an-at-home-ancestry-test/) people have taken one of these tests.   “You may discover unexpected facts about yourself or your family when using our services,” warns the most popular company’sprivacy statement(https://www.ancestry.com/cs/legal/privacystatement). “Once discoveries are made, we can’t undo them.”

In addition to the shift in direct access healthcare technology is offering, policy changes toward healthcare policy is also creating dynamics within the market. 

The Ontario Pharmacy Evidence Network’s most recentpaper (https:(https://www.open-pharmacy-research.ca/wp-content/uploads/Future-of-Pharmacy-White-Paper-REVISED-for-posting-Jan-2019.pdf) looked at a wide ranging of policy changes affecting Ontario alone.  They found an industry going through “significant changes” thanks to thePatients First Action Plan and theProposal to Strengthen Patient-Centered Health Care in Ontario are driving a more date-driven and patient centered approach. 

It has also meant that pharmacy has had to contend with offering greater service innovation with less revenues, as controls placed on generic drug pricing and limits on certain revenue streams, like manufacture rebates, have come into effect. 

“As pharmacies develop their own technology,” the authors state “the integration of health care provider records and the emergence of patient-controlled or viewable health records are important areas of health care transformation.”

This means consumers want better data control about their health and the market will need to deliver. 

Sales

The gross revenue was $827,961 for the year ended December 31, 2018 (2017: $1,617,083). Net sales were $226,445 for the year ended December 31, 2018 (2017: $537,714) after deducting the cost of customer marketing and promotional incentives of $601,516 (2017: $1,079,369) for the year ended December 31, 2018. There is limited effect of seasonality on the Company’s main business.  The Company reviewed its portfolio and is discontinuing generic products.

Manufacturing - The Company has previously employed national sales directors, marketing managers responsible for doctor detailing,discontinued the manufacturing of OTC and sales brokers. In 2017, the position of national sales director was eliminated, and the Company has transitioned to broker agreements. The shift in focus has allowed the Company to significantly streamline its sales force and engage with sales brokers across Canada. The Company now has 7 sales representatives in Western Canada, 12 in Ontario, and 5 in Atlantic Canada. These agreements, predominantly commission based, come at a far lower cost and provide greater coverage than the Company’s previous model utilizing national sales directors. The Company continues to have doctor detailing agents in the Greater Vancouver Regional District and Greater Toronto Area.generic drugs

Manufacturing

The Company does not have any of its own manufacturing facilities and it currently relies, and expects to continue to rely, on third parties for the manufacture of products. The Company has a finalized agreement for the manufacture of Hemafer to, package and deliver this product. The supplier will manufacture, and the Company will market and sell the product under its own label. The Company is not directly involved in the sourcing of raw materials for pharmaceutical products, which is carried out by contract manufacturing partners. Historically, the Company has experienced little to no volatility caused by raw material price deviations.

4.C. Organization structure

The Company is not part of a group and has two wholly-owned subsidiaries, VANC Marine Pharmaceuticals Inc. and HealthTab Inc., each of which are incorporated in British Columbia. VANC Marine Pharmaceuticals Inc. is currently inactive.

4.D. Property, Plant and Equipment

The Company has no facilities.

The Company uses outside manufacturers for its production needs.

ITEM 4A UNRESOLVED STAFF COMMENTS

--No disclosure necessary.--Not applicable.

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

ThisThe following discussion and analysis of the financial condition and operational performance should be read in conjunction with the audited consolidated financial statements of the Company and relatedthe notes included therein.thereto prepared in accordance with IFRS.

5. A. Operating Results of the Company

Overview

In December 2015, the Company commercialized its first OTC product: Cortiveraä and Cortivera Plusä for a wide range of minor skin irritations, allergic reactions and eczema. In March 2016, the Company launched Hema-Fer™, a premium natural iron supplement. In May 2016, the Company launched Cortivera-H, a 1% hydrocortisone cream sold in large format jars for pharmacy dispensary use. In February 2017, the Company launched SennAce, a vegetable sourced laxative also targeted for pharmacy dispensary use. In May 2017, the Company entered into an agreement with bioLytical to be the exclusive distributor to Canadian pharmacies of the INSTI HIV 1/HIV 2 Rapid Antibody Test. The Company made the decision at the end of 2017 to strategically wind down the generic products portfolio and isfocus on the growth of Hema-Fer™.

The Company acquired Corozon platform in 2018, however, as the processfull launch of depleting existing inventory. Asthe Corozon platform was postponed, the value of end ofthe Corozon platform was written down to $1 as at December 201831, 2018.

During 2019, the Company has one generic product that is still being marketed, Sildenafil, and have decided to strategically wind downdiscontinued Hema-Fer™, thereby, exiting the OTC productsbusiness completely to provide a greater focus on Hemafer. the development and growth of its POCT segment, HealthTab. 

Results of Operations for the years ended December 31, 2019, 2018 and 2017

Revenue from the continuing operations was $33,000 for the year ended December 31, 20182019 (2018 - $15,295; 2017 - $nil). This represents the revenue earned by the POTC HealthTab™ business segment acquired in 2018.

Revenue

The grossGross revenue from the discontinued operations, OTC product line, was $827,961$129,776 for the year ended December 31, 2018 (2017:2019 (2018 - $812,666; 2017 - $1,617,083). Net sales were $226,445 for the year ended December 31, 2018 (2017:101,934 (2018 - $494,737; 2017 - $537,714) after deducting

the cost of customer marketing and promotional incentives of $601,516 (2017:$27,842 (2018 - $317,929; 2017 - $1,079,369) for the year ended December 31, 2018.

The gross revenue was $327,349 for the quarter ended December 31, 2018 compared to $261,309 in the same quarter last year, and the net sales were $(85,479) for the quarter compared to $112,537 in the same quarter last year.

.  The decrease in gross revenues for the year and three months ended December 31, 20182019 is in part due to transition the Company is goingwent through during thisthe period.

The Company’s generic products portfolio forms about 50% and the Company’s produced about 50% of the gross revenue. Intense competition in this segment leads to lower margins. Currently we are selling to pharmacy chains and independent pharmacies. The Company revieweddiscontinued its portfolioOTC product segment to focus on the development and is discontinuing generic products.

The Company’s salegrowth of higher margin Hemafer (BTC) is showing better acceptance within the medical community. The product is listed   with all the major distributors in Canada.  There has been a positive trend in the sale of the BTC product from quarter to quarter.

ManufacturingPOCT business.

The Company does not have its own manufacturing facilities and currently relies, and expects to continue to rely, on the third-party manufacturers of the product.Manufacturing – The Company has an agreement in place with a local manufacturer in Richmond, BC fordiscontinued the manufacturing of Hemafer.OTC and generic drugs.

Marketing and Communication expenses

Results of OperationsGeneral and Administrative expenses

Share-based compensation for the year ended December 31, 2019 of $86,420 (2018: $372,137; 2017 - $311,389) is a non-cash item that represents the allocation of the fair value of options over the vesting period.

RevenueWrite-down of Intangible Assets:

The Company is continually developing the sales of its generic and OTC products. The gross revenue was in amount of $1,617,083 forDuring the year ended December 31, 2017 (2016: $2,461,933). Net sales were2019 the Company performed an assessment and determined that the carrying value of the intangible asset exceeded the recoverable amount and accordingly recognized impairment of the intangible asset related to Emerald acquisition in the amount of $537,714 for$313,514. The impairment can be reversed in future periods when there is a change in circumstances and the estimates used to determine the asset's recoverable amount.

During the year ended December 31, 2017 (2016: $1,013,690) after deducting2018, the costCompany performed an assessment and determined that the carrying value of customer marketingthe intangible assets exceeded the recoverable amount and promotional incentivesaccordingly recognized impairment of $1,079,369 (2016: $1,448,243) forthe intangible assets related to HealthTab acquisition and Corozon Platform acquisition in the amount of $964,173.

Discontinued Operations

During the year ended December 31, 2017.

Manufacturing

The Company does not have any manufacturing facilities2019, 2018 and it currently relies, and expects2017, the loss attributable to continue to rely, on third parties for the manufacture of products.discontinued operations are as follows:

Selling and Marketing Expenses

Selling and marketing expenses were in the amount of $696,161 for the year ended December 31, 2017 (2016: $663,822) which consist of: sales personnel payroll costs of $335,920 for the year ended December 31, 2017 (2016: $329,091); marketing and advertising costs in relation to the promotion of generics and OTC products to the market in amount of $178,058 for the year ended December 31, 2017 (2016: $105,658), logistics and distribution costs of $102,948 for the year ended December 31, 2017 (2016: $161,304) and sales force travel and customer relations expenses of $79,235 for the year ended December 31, 2017 (2016: $67,769).

The efficiencies in the Selling and Marketing expense compared to prior periods is due to restructuring and further optimization of the Sales Force department. The Company provides free samples of OTC products as a part of its market awareness strategy. The Company is providing professional use only samples of the OTC products to medical doctors as part of its market awareness strategy. The total cost of the free samples is in the amount of $14,245 for the year ended December 31, 2017 and was reported as part of marketing and advertising expense.

Results of Operations for the year ended December 31, 2016

Revenue

The Company is continually developing the sales of its generic and OTC products. The gross revenue was in amount of $2,461,933 for the year ended December 31, 2016 (six months ended December 31, 2015: $561,344) Net sales were in amount of $1,013,690 for the year ended December 31, 2016 (six months ended December 31, 2015: $150,754) after deducting the cost of customer marketing and promotional incentives of $1,448,243 (six months ended December 31, 2015: $410,590) for the year ended December 31, 2016.

Sales and Marketing Expenses

Sales and marketing expenses in the amount of $663,822 for the year ended December 31, 2016 (six months ended December 31, 2015: $103,123). Which consist of sales personnel payroll cost of $329,091 for the year ended December 31, 2016; marketing and advertising costs in relation with the promotion of generics and OTC products to the market in amount of $105,658 for the year ended December 31, 2016, logistics and distribution cost of $161,304 for the year ended December 31, 2016 and sales force travel and customer relations expenses of $67,769 for the year ended December 31, 2016.

The increase in the sales personnel related costs is due to the hiring of sales force to support the commercial activity in British Columbia and Ontario. The man power was further expanded in Alberta and Quebec in Q4. The Company provides free samples of OTC products as a part of market awareness strategy. The total cost of the free samples is in the amount of $65,536 for the year ended December 31, 2016 was reported as part of marketing and advertising expense. Marketing expenses in comparable period of 2015 were mostly in relation with attending seminars and conferences.

The Company expect to incur additional expenses associated with sales and marketing activities.

General and administrative expenses

Year ended December 31, 2018

Product Registration and Development Expenses

Product Registration and Development cost consists of the product registration, in-licensing, renewal of licenses, other regulatory fees and regulatory personal salaries and consulting fees for the total of $33,278 (2017: $71,804) and $251,508 (2017: $242,303) for the three months and year ended December 31, 2018 respectively.  We currently have one senior regulatory consultant doing the product filings process with Health Canada and other regulatory agencies to support the increased level of OTC and generic product lines.

Sales and Marketing Expenses

Sales and marketing expenses in the amount of negative $72,281 (2017: $172,679) due to reclassification in the Q4 2018, and $472,496 (2017: $696,161) for the three months and year ended December 31, 2018 respectively. Which consist of sales personnel payroll cost of $173,536 for the twelve months ended December 31, 2018 (2017: $335,920); marketing and advertising costs in relation with the promotion of generics and OTC products to the market in amount of $193,106 for the twelve months ended December 31, 2018 (2017: $178,058), logistics and distribution cost of $104,407 for the twelve months ended December 31, 2018 (2017: $102,948) and sales force travel and customer relations expenses of $1,447 for the twelve months ended December 31, 2018 (2017: $79,235).

For the three months ended December 31, 2018 sales personnel payroll cost of $41,292 (2017: $76,057); marketing and advertising costs in relation with the promotion of generics and OTC products to the market in amount of negative $127,949 for the three months ended December 31, 2018 (2017: $57,754), logistics and distribution cost of $13,912 for the three months ended December 31, 2018 (2017: $24,635) and sales force travel and customer relations expenses of $464 for the three months ended December 31, 2018 (2017: $14,233).

The decrease in the SellingMarketing and MarketingPromotional expense compared to prior periods is due to restructuring and further optimization of the Sales Force department. The Company provides free samples of OTC products as a part of market awareness strategy. The Company is providing professional use only samples of the OTC products to medical doctors as part of our market awareness strategy.

The increase in management and consulting fees in 2018 compared to 2017 was mainly due to hiring consultants for the HealthTab division acquired at the end of December 2017. All other general and administrative expenses were reduced significantly during the twelve and three months ended December 31, 2018 due to the Company changing its major business direction and entering into new areas. The change requires detailed analysis of the market, change in the office personnel and accordingly reduction in office and payroll expenses.  

The increase in amortization in 2018 from $13,854 incurred during twelve months ended December 31, 2017 to $535,509 incurred during the same period of 2018 was mainly due to the amortization of the Corozon Platform and intangible assets related to the acquisition of HealthTab and Emerald distribution rights.

Share-based compensation

Share-based compensation for the year ended December 31, 2018 was in amount of $372,137 (2017: $311,389; 2016: $922,922; six months ended December 31, 2015: $630,401) and is a non-cash item that represents the allocation of the fair value of options over the vesting period.

On May 31, 2016, the Company received TSX Venture Exchange approval to extend the term of 976,250 common share purchase warrants (the “Warrants”). The original term of the Warrants had an expiry date of June 12, 2016. The Company extended the expiry date to December 20 2016, and amended the exercise price of the Warrants from $0.50 per share to $0.40 per share. In all other respects, the terms of the Warrants remained unchanged. The incremental fair value of warrant extension was estimated at $186,500 using the Black-Scholes option pricing model and the following assumptions: risk free interest rate of 0.61%, expected volatility of 75.25%-110.30%, expected option life of 0.03 year-0.56 year and the expected dividends of $nil. These warrants expired without exercise as of December 31, 2016.

5. B. Liquidity and capital resources

Liquidity

The Company’s operations have been financed through the issuance of common shares. The Company commenced to commercialize its generic and OTC products during the second half of 2015 but have not been able to generate positive cash flows from its operating activity yet. Management anticipates that additional financings or capital requirements to fund the current commercial operations and working capital will be required to grow the business to the sustainable level.

Cash flows

Sources and Uses of Cash:

There is an overall cash outflow of $475,291 for the year ended December 31, 2018 compared to cash inflow of $132,251 for the comparable period in 2017. 

Capital resources

Management devotes financial resources to the Company’s operations, sales and commercialization efforts, regulatory approvals and business development. The Company will require cash to support working capital.  

The future funding requirements will depend on many factors including:

-the extent to which the Company will be commercially successful in launching its new OTC products;

-the size, cost and effectiveness of the Company’s sales and marketing program, distributions and marketing arrangements.

At December 31, 2018,2019, the Company had a working capital deficit of $465,454, compared to working capital of $439,228 compared to $1,272,259 at December 31, 2017.2018. The Company believes that its cash on hand, the expected future cash inflows from the sale of its products, net proceeds from the closing of private placements and proceeds from loans, stock options and warrants exercised, if any, will be sufficient to finance the Company’s working capital and operational needs for at least the next 6 months. If the Company’s existing cash resources together with the cash the Company generates from the sales of its products are insufficient to fund its working capital and operational needs, the Company may need to sell additional equity or debt securities or seek additional financing through other arrangements.

Subsequent to the year ended year December 31, 2019, the Company entered into a loan agreement with a third party for a secured loan in the amount of $1,000,000. The Loan is for a term of one year from the date of receipt of the funds, bears interest at a rate of 10% per annum and is secured with all of the present and after-acquired property of the Company. The loan is subject to an interest reserve of $100,000 held back from the loan advance. The Company has the right to repay all or any portion of the loan at any time without penalty. The Company has paid a loan application fee in the amount of $30,000 and issued 3,480,000 bonus shares to the lender representing 20% of the aggregate sum of the loan.

Critical Accounting Policies

The consolidated financial statements of the Company present the reporting period from January 1, 20182019 to December 31, 2018.2019. They have been prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”).

These accounting principles require the Company’s management to make estimates, judgments and assumptions that affect amounts reported in the consolidated financial statements and accompanying notes to the consolidated

financial statements. The Company’s management reviews these estimates and underlying judgments on an ongoing basis, based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Revisions to estimates are adjusted for prospectively in the year in which the estimates are revised. Actual results may differ from these estimates under different assumptions or conditions. Significant areas requiring management estimates include accounting for amounts recorded in connection recoverability of inventory valuation, reporting of revenue recognition, useful lives of depreciable assets, intellectual property, income taxes and accounting for share-based compensation expense.

The significant accounting policies that the Company believes are the most critical in fully understanding and evaluating the Company’s reported financial results include inventory, revenue recognition, stock-based compensation and fair value measurements of financial instruments. These and other significant accounting policies are described more fully in Note 2 and 3 of the Company’s annual consolidated financial statements for the year ended December 31, 2018.2019.

Inventory

Inventories consist of raw materials comprising the ingredients used to manufacture OTC pharmaceuticals, as well as the packaging for these products, and finished goods comprising Canadian generic pharmaceuticals. All inventories are recorded at the lower of cost on a weighted average basis and net realizable value. The stated value of all inventories includes purchase, shipping and freight, and quality control testing. A regular review is undertaken to determine the extent of any provision for obsolescence.

Revenue recognition

RevenuesThe Company’s revenues are recognizedgenerated from operating leases of the POC system and sale of testing panels. Revenue comprises the fair value of the consideration received or receivable and it is shown net of tax and discounts. The Company also earned revenue from the sale of OTC pharmaceuticals, however, the Company discontinued this segment during the year ended December 31, 2019.

The Company recognizes revenue to depict the transfer of goods and services to clients in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods and services by applying the following steps:

•Identify the contract with a client; 

•Identify the performance obligations in the contract; 

•Determine the transaction price; 

•Allocate the transaction price to the performance obligations; and 

•Recognize revenue when, or as, the Company satisfies a performance obligation. 

Revenue may be earned over time as the performance obligations are satisfied or at a point in time which is when the entity has earned a right to payment, the customer has possession of the asset and the related significant risks and rewards of ownership, have passedand the customer has accepted the asset.

The Company's arrangements with clients can include multiple performance obligations. When contracts involve various performance obligations, the Company evaluates whether each performance obligation is distinct and should be accounted for as a separate unit of accounting under IFRS 15, Revenue from Contracts with Customers.

The Company determines the standalone selling price by considering its overall pricing objectives and market conditions. Significant pricing practices taken into consideration include discounting practices, the size and volume of our transactions, our marketing strategy, historical sales and contract prices. The determination of standalone selling prices is made through consultation with and approval by management, taking into consideration our go-to-market strategy. As the Company's go-to-market strategies evolve, the Company may modify its pricing practices in the future, which could result in changes in relative standalone selling prices.

The Company generally receives payment from its clients after invoicing within the normal 28-day commercial terms. If a client is specifically identified as a credit risk, recognition of revenue is stopped except to the customer based on the termsextent of the sale, collection of the relevant receivable is probable, evidence of an arrangement exists and the sales price is fixed or determinable. Risks and rewards of ownership pass to the customer upon successful completion of shipment of pharmaceuticals. Provisions for sales discounts and returns are made on a per sale basis based on contractual and historical information.

Share-based paymentsfees that have already been collected.

Share-based payments

The Company operates an incentive share purchase option plan. Share-based payments to employees are measured at the fair value of the instruments issued and amortized over the vesting periods. Share-based payments to non-employees are measured at the fair value of goods or services received or the fair value of the equity instruments issued, if it is determined the fair value of the goods or services cannot be reliably measured, and are recorded at the date the goods or services are received. The corresponding amount is recorded to the option reserve. The fair value of options is determined using the Black-Scholes option pricing model, which incorporates all market vesting conditions. The number of shares and options expected to vest is reviewed and adjusted at the end of each reporting period such that the amount recognized for services received as consideration for the equity instruments granted shall be based on the number of equity instruments that eventually vest.

Significant estimates and judgments

Significant estimates used in applying accounting policies that have the most significant effect on the amounts recognized in the consolidated financial statements are as follows:

Inventory valuation

The Company estimates the net realizable values of inventories, taking into account the most reliable evidence available at each reporting date. The future realization of these inventories may be affected by regulatory changes or other market-driven changes that may reduce future selling prices. In determining net realizable value, the Company considers such factors as turnover, historical experience, expiry dates and shelf life of the products. A change to these assumptions could impact the Company’s inventory valuation and gross margin. The Company attempts to sell products with short shelf life with significant rebates.  Any unsold products with short shelf life and expired products are written-off.

Revenue recognition

Revenues areRevenue is recognized when the risks and rewards of ownershiprevenue recognition criteria expressed in the accounting policy stated above for Revenue Recognition have passed tobeen met. Judgment may be required when allocating revenue or discounts on sales amongst the customer based on the terms of thevarious elements in a sale collection of the relevant receivable is probable, evidence of an arrangement exists and the sales price is fixed or determinable. Risks and rewards of ownership pass to the customer upon successful completion of shipment of pharmaceuticals. Provisions for sales discounts, incentives, and rebates and returns are made based upon historical experiences.  involving multiple deliverables.

Useful lives of depreciable assets

The Company reviews its estimate of the useful lives of depreciable assets at each reporting date, based on the expected utilization of the assets. Uncertainties in these estimates relate to technical obsolescence that may change the utilization of certain equipment.

Intellectual property

The recoverability of the carrying value of the intellectual property is dependent on successful development and commercial stage to the point where revenue is possible. The carrying value of these assets is reviewed by management when events or circumstances indicate that its carrying value may not be recovered. If impairment is determined to exist, an impairment loss is recognized to the extent that the carrying amount exceeds the recoverable amount.

Share-based payments

The Company grants share-based awards to certain directors, officers, employees, consultants and other eligible persons. For equity-settled awards, the fair value is charged to the statement of operations and comprehensive loss and credited to the reserves over the vesting period using the graded vesting method, after adjusting for the estimated number of awards that are expected to vest.

The fair value of equity-settled awards is determined at the date of the grant using the Black-Scholes option pricing model. For equity-settled awards to non-employees, the fair value is measured at each vesting date. The estimate of warrant and option valuation also requires determining the most appropriate inputs to the valuation model, including the volatility, expected life of warrants and options, risk free interest rate and dividend yield.

Changes in these assumptions can materially affect the fair value estimate, and therefore the existing models do not necessarily provide a reliable measure of the fair value of the Company’s options and warrants issued. Management must also make significant judgments or assessments as to how financial assets and liabilities are categorized.

Income taxes

Tax interpretations, regulations and legislation in the various jurisdictions in which the Company operates are subject to change. The determination of income tax expense and deferred tax involves judgment and estimates as to the future taxable earnings, expected timing of reversals of deferred tax assets and liabilities, and interpretations of laws in the countries in which the Company operates. The Company is subject to assessments by tax authorities who may interpret the tax law differently. Changes in these estimates may materially affect the final amount of deferred taxes or the timing of tax payments. If a positive forecast of taxable income indicates the probable use of a deferred tax asset, especially when it can be utilized without a time limit, that deferred tax asset is usually recognized in full.

Changes in Significant Accounting Policies

Effective January 1, 2019, the Company adopted IFRS 916 Leases using the modified retrospective approach. The modified retrospective approach does not require restatement of prior period financial information as it recognizes the cumulative effect as an adjustment to opening retained earnings and 15applies the standard prospectively.  

A contract is, or contains, a lease if the contract conveys a lessee the right to control the use of lessor’s identified asset for a period of time in exchange for consideration.

Upon the adoption of IFRS 16, the Company adopted the following significant accounting policy effective January 1, 2019:

The Company as a lessee

A lease liability is recognized at the commencement of the lease term at the present value of the lease payments that are not paid at that date. At the commencement date, a corresponding right-of-use asset is recognized at the amount of the lease liability, adjusted for lease incentives received, retirement costs and initial direct costs. Depreciation is recognized on the right-of-use asset over the lease term. Interest expense is recognized on the lease liabilities using the effective interest rate method and payments are applied against the lease liability.

On adoption of IFRS 16, the Company recognized lease liabilities of $68,253 in relation to lease arrangements measured at the present value of the remaining lease payments, adjusted by commitments in relation to arrangements not containing leases, short-term and low-value leases, and discounted using the Company’s incremental borrowing rate as of January 1, 2019. The incremental borrowing rate used to determine the lease liabilities at adoption was 12%. The associated right-of-use assets were implemented duringmeasured at the fiscal year ended December 31, 2018. There wereamount equal to the lease liabilities on January 1, 2019, with no otherimpact on deficit. See Note 8 – "Right-of-Use Assets" and Note 12 – "Lease Liabilities" for additional information regarding the Company's leases.

Key areas where management has made judgments, estimates, and assumptions related to the application of IFRS 16 include:

- The incremental borrowing rates are based on judgments including economic environment, term, currency, and the underlying risk inherent to the asset. The carrying balance of the right-of-use assets, lease liabilities, and the resulting interest expense and depreciation expense, may differ due to changes in the Accounting Policies during the fiscal year ended December 31, 2018.market conditions and lease term.

Accounting standards issued, but not yet in effective-Lease terms are based on assumptions regarding extension terms that allow for operational flexibility and future market conditions. 

The Company as a lessor

The followingA lease is an overview of accounting standard changes that the Company will be required to adopt in future years.

IFRS 16 Leases

IFRS 16 specifies how an IFRS reporter will recognize, measure, present and disclose leases. The standard provides a single lessee The IASB issued IFRS 16, Leases, in January 2016, which replaces the current guidance in IAS 17. Under IAS 17, lessees were required to make a distinction between a finance lease andclassified as an operating lease. IFRS 16 requires lesseeslease if it does not transfer substantially all the risks and rewards incidental to recognize a lease liability reflecting future lease payments and a “right-of-use asset” for virtually all lease contracts. The IASB has includedownership of an optional exemption for certain short-termunderlying asset. All other leases and leases of low-value assets. IFRS 16 is effective for annual periods beginning on or after January 1, 2019.are classified as finance leases.

The Company expects that the impact IFRS 16 will have on its consolidated financial statements is to record a right-of-use asset with an offsetting liability for its existing leases, as well as additional disclosure.

The Company estimates the valueLeases of the right-of-useCompany’s POTC systems to customers are classified are operating leases. Lease payments from operating leases are recognized as income on a straight-line basis. All costs, including depreciation, incurred in earning the operating lease income are recognized as an expense. Initial direct costs incurred in obtaining an operating lease are added to the carrying amount of the underlying asset and correspondingrecognized as an expense over the lease liabilityterm on the same basis as the lease income. The depreciation for depreciable underlying assets subject to be approximately $100,000 on recognition.operating leases is in accordance with depreciation policy for the Company’s equipment.

Other new standards or amendments are either not applicable or not expected to have a significant impact on the Company’s consolidated financial statements.

5.C. Research and development, patents and licenses etc.

The Company won’twill not be devoting resources to research, development and patents going forward. The Company is now focused on the manufacture and distributiongrowth of generic and over-the-counter (“OTC”) pharmaceuticals.POTC segment HealthTab.

5.D. Trend information

There is a significant trend toward consumer point of care testing. Healthcare data, its capture, analysis and delivery to the consumer is a top market priority as consumers are significant market swings away from branded pharmaceuticals towards low cost generics. The Company will attemptlooking to integrate itself into this shift.take greater control, however; those same consumers are looking to companies to manage the security of that data well and use it ethically.

5.E. Off-balance sheet arrangements

The Company does not have any off-balance sheet arrangements.

5.F. Tabular disclosure of contractual obligations

The Company has entered into contracts for leased premises, which expire in 2018. In September 2017,Subsequent to the year ended December 31, 2019, the Company extendedterminated its lease agreement for its office premise. Pursuant to the lease. Totalcancelation, the Company forfeited its deposit of $8,420 and paid the outstanding rent for the months of January to March, 2020. As at December 31, 2019 total future minimum lease payments under these contracts arewere as follows:

5.G. Safe Harbor

This Annual Report on Form 20-F contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, principally in ITEM #4, “Information on the Company” and ITEM #5, “Operating and Financial Review and Prospects”. These statements may be identified by the use of words like “plan,” “expect,” “aim,” “believe,” “project,” “anticipate,” “intend,” “estimate,” “will,” “should,” “could” and

similar expressions in connection with any discussion, expectation, or projection of future operating or financial performance, events or trends. In particular, these include statements about the Company’s strategy for growth, future performance or results of current sales and production, interest rates, foreign exchange rates, and the outcome of contingencies, such as acquisitions and/or legal proceedings and intellectual property issues.

Forward-looking statements are based on certain assumptions and expectations of future events that are subject to risks and uncertainties. Actual future results and trends may differ materially from historical results or those projected in any such forward-looking statements depending on a variety of factors, including, among other

things, the factors discussed in this Annual Report under ITEM #3, “Key Information, Risk Factors” and factors described in documents that the Company may furnish from time to time to the Securities and Exchange Commission. The Company undertakes no obligation to update publicly or revise any forward-looking statements because of new information.

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A. Directors and Senior Management

The following table sets forth certain information as of December 31, 20182019 and as of the date of this report about the Company’s current directors and senior management. There have been no subsequent changes to the Company’s current directors and senior management, except as footnoted below:

Table No. 6:

Directors and Senior Management:

⁽¹⁾Appointed Director on May 23, 2019

⁽²⁾Appointed on May 23, 2019April 2, 2020

Mr. Bob Rai, CEOPresident and Director, is an entrepreneura registered and practicing pharmacist and a professional member of the College of Pharmacists of British Columbia, with over 2025 years of experience in operating “Thepharmaceuticals and pharmacy management experience. Mr. Rai has operated a chain of The Medicine Shoppe”Shoppe Pharmacies in CanadaGreater Vancouver for the past 24 years. In 1998, Mr. Rai and his partners pioneered and revolutionized the online pharmacy business into the US. He received “The Medicine ShoppeUnited States. The online sales and distribution of prescription medicines saw unprecedented industry growth and, as other operators followed suit, the business concept became a billion-dollar industry across Canada Professional Achievement Award” for expanding the scope of pharmacists’ practice. During his time with Medicine Shoppe, Bob’s pharmacies were the first in Canada to launch two new government funded pilot programs:within a revolutionary point of care HIV testing package utilizing the INSTI testyear and a partnership program withhalf Mr. Rai also serves on the Kidney Foundationboard of Canada to developdirectors of Emerald Health Therapeutics Inc., a more efficient screening method for chronic kidney disease using HealthTab technology. Due to his recognition for innovation and pioneering programs and technology inpublic company listed on the pharmaceutical industry Bob was appointedTSX Venture Exchange (the "TSXV"), Mr. Rai served as Interim CEO of Vancpharm in Feburary 2017. VANC is now renamed to be called Avricore Health Inc. to reflect the company’s new vision (TSX-V:AVCR)

Bob has served the pharmaceutical industry in Canada in many meaningful ways outsidePresident of the frameworkPhilippines Canada Trade Council from 2006-2007, and held the position of business. He is also a memberVice-President from 2004-2006. In 2013, Mr. Rai was the recipient of the Queen’s Diamond Jubilee Medal for his 25 years of community and volunteer work, which has included serving on the Alumni UBC Advisory Council representing the Faculty of Pharmaceutical Science.

Bob has demonstrable passion for community support Mr. Rai sat on the board of directors of St Paul's Hospital Foundation and charitable work. He has held many community-based positions such as: President of the Victoria Drive Business Improvement Association (1999), and Director of South Hill Business Improvement Association (2006-2012) where he also served as Chairman of the Safety and Security Committee. Bob has had the privilege of serving asis a member of various boards which include:past board member of the Board of Directors for the Tapestry Foundation – a fundraising arm for facilities under Providence Health member of the Board of Directors for the South Vancouver Neighborhood House, andCare. He was a member of the Rotary Club of Vancouver-Fraserview including one year of service as President. He is a Paul Harris Fellow Award recipient. Mr. Rai served on the Cabinet for 8 years and then two years as Chair of "A Night of Miracles" for BC Children’s Hospital in 2017 and

2018. Mr Rai was appointed as CEO of the Company in 2017 and took the charge as President of the Company in October 2019.

Mr. Bremner, CEO and Director, has an extensive branding and business development experience. He joined Avricore in January 2019 as an advisor, and then as Executive Vice- President in June, providing strategic guidance on product offering, market development and communications. In April 2020, he was appointed Director of the Company. Mr. Bremner founded Vancouver Fraserviewbased TOUCH Marketing in 2007, whose innovative marketing, communications and project management strategies earned him a strong reputation for delivering results. He previously served as a key advisor in the offices of BC’s Minister of International Trade, the Minister of Tourism and Small Business, as well as the Ministry of Natural Gas Development and Deputy Premier. After leaving the BC Government, Mr. Bremner joined Vancouver based communications firm Pace Group as Vice President of that chapter ofPublic Affairs. In 2017, Mr. Bremner was elected to Vancouver City Council in a rare by-election, having a dramatic impact on the Rotary Club from 2011-2012. Duecity’s political culture and policy approaches related to the merger betweenongoing housing crisis.

Ms. Kiki Smith, CFO and Corporate Secretary, has over 20 years’ experience as an operations oriented financial executive with sector focuses of mining, oil and gas, real estate, advanced technology, food production and investment fund management. She assists private and public companies in a variety of financial team roles that bring unique strengths to the Tapestry FoundationCompany, such as; mergers and St. Paul’s Hospital Foundation in April 2017, heacquisitions, financial reporting and regulatory compliance. Ms. Smith is now a sitting member of the St. Paul’s Hospital Foundation BoardChartered Professional Accountants of Directors. Bob has worked as a sitting cabinet member for “A Night of Miracles” in support of BC Children’s Hospital consecutively for the past 7 years, has served as Vice-Chair in 2016 and served  as Chair of the gala for 2017 and 2018 including setting a record in 2018 for raising $755,000 at the Gala event.   Bob is also recognized as co-founder of the Canada-India Center of Excellence at Carleton University in Ottawa – an organization that each year grants a scholarship in the names of his father and of his wife’s father. From 2007-2013 Bob sat on the Vancouver Committee of Gold Medal Plates which worked to raise money for Canadian Olympic and Para-Olympic athletes. The British Columbia Regiment has seen Bob Rai sponsor their Battleground Tourwith the designations of Certified Professional Accountant and Certified General Accountant and holds a Bachelor’s Degree in 2012 and had Bob as a benefactor for their Mt. Kilimanjaro climb in 2014. Bob’s work with his Medicine Shoppe locations (PharmacyBC.com) included a “Golf for a Cure”, a successful fundraising event which has raised over $125,000 in support of charities such as the Michael J. Fox Foundation, BC Home Care, and Meals on Wheels. Additionally, Bob has used his time in the Rotary Club to assist in the success of their annual gala/fundraiser dinner which helps raise funds for mental health, addiction, and youth in Vancouver. Bob is proud to be a founding sponsor of the Global Civic Policy Society and a sponsor of Sam Sullivan’s Public Salons. Bob and his wife are also co-sponsors of the Dhahan Punjabi Literacy Awards which help promote the written language of Punjabi globally. Bob is a recipient of the Queen Elizabeth II Diamond Jubilee Medal and was awarded “The Paul Harris Fellow Award” for his contributions to the community. He received degrees in Biochemistry and Pharmaceutical ScienceEconomics from the University of British Columbia.

Mr. Kevin Strong, CFOis experienced in the areas of finance, accounting, human resources, business planning, business development, compliance and corporate governance. Mr. Strong also currently serves as Director, Corporate Development of Belgravia Capital International Inc. Prior to that, he was the CFO of several other public and private companies in the resource and agricultural technology sectors.  For 8 years prior to that, Mr. Strong was the regional manager for the TSX Venture Exchange responsible for Manitoba and Saskatchewan. Mr. Strong has served as a Director on the boards of public, private and non-profit companies and has served as the Audit Committee chairman and Governance Committee chairman of a public company. He was previously a member of the Manitoba Premier's Economic Advisory Council.

Ms. Deena Siblock, Corporate Secretaryhas 20 years of experience in corporate governance, communications and risk management. Ms. Siblock also currently serves as Vice President, Corporate Affairs and Corporate Secretary of Belgravia Capital International Inc. Ms. Siblock is responsible for ensuring the integrity of the governance framework, efficient administration of the Company, and compliance with statutory and regulatory requirements. Ms. Siblock has distinguished herself as a leader in corporate governance and risk management, implementing comprehensive governance and risk management programs for Boards of Directors and demonstrating exceptional commitment and passion for corporate governance.

Mr. David Hall, Director is currently Chairman of RepliCel Life Sciences (“RepliCel”) and a consultant to the life sciences industry. Mr. Hall served as CEO and President of RepliCel from 2012 through 2015. Prior to RepliCel, Mr. Hall acted as a consultant to the government, pharma industry, biotech, eHealth and NGO’s for two years. For the prior 15 years, Mr. Hall was a business founder, CFO, CCO, Treasurer and Secretary of Angiotech Pharmaceuticals Inc. Mr. Hall is a Past Chair and board member of Life Sciences BC and current Chairman of

Providence Health Care Research Institute. He is the author of Life Sciences BC’s position papers for the Premier’s Competition Council Report and Conversation on Health. Mr. Hall was also a member of the BC Task Force on PharmaCare and serves on the board of directors of the Advantage BC. Mr. Hall holds an Honours degree in Economics and an Honours degree in Finance from the University of Manitoba.

Mr. Alan Arnstein, Directorpreviously worked for the Katz Group Canada where he oversaw the development of the Medicine Shoppe from 28 stores to 175 stores (corporate and franchised) before the successful sale to McKesson Canada. Mr. Arnstein also was very involved in expanding the Rexall pharmacy brand across Canada including responsibility for acquiring and consolidating independent pharmacies under the Rexall banner.  Mr. Arnstein has played and continues to play an active role in real estate projects including the leasing of the Ice District next to Rogers Place in downtown Edmonton, an estimated $5.5B project.

Mr. Sherif Guorgui, Directoris a third-generation pharmacist with extensive experience in various pharmacy sectors; such as retail, specialty, regulatory, industry, government and professional affairs.  Mr. Guorgui is recognized as an individual who has played a significant role in promoting the value of pharmacists and pharmacy technicians in healthcare, and advocating for the pharmacy profession at community, provincial and international levels.

Mr. Guorgui earned his pharmacy degree from the University of Cairo in 1998.  After completing the University of Toronto’s International Pharmacy Graduates program, Mr. Guorgui has worked as a community pharmacist, managed and operated his own independent pharmacy, and been a franchise/Associate owner with Shoppers Drug Mart.  Mr. Guorgui moved into corporate roles at Shoppers Drug Mart and Rexall/PharmaPlus before joining the Ontario Pharmacists Association (“OPA”) as Vice President of Pharmacy.  In 2016, Mr. Guorgui joined United Pharma Group as CEO.  United Pharma Group is the fastest growing network of independent pharmacy owners in Canada now numbering over 90 members.

Mr. Guorgui has also served as President of the Ontario College of Pharmacists in 2011-2012.  In this role, he focused on promoting the adoption of the expanded scope of practice among pharmacists and initiated accordingly various outreach programs aimed at fostering and encouraging ongoing communication with members of the College.  

Mr. Guorgui is a board member of the Canadian Foundation for Pharmacy, the Ontario Pharmacists Association and the Neighbourhood Pharmacy Association of Canada. He is an advisory board member of the Humber College Pharmacy Technician Program, and is a mentor at the University of Toronto Career Centre Information Interview program.

Mr. Robert Sindelar, Directoris a Professor in the Faculty of Pharmaceutical Sciences at the University of British Columbia (UBC) and an Advisor, External Relations to the Centre for Health Evaluation & Outcomes Sciences, Providence Health Care Research Institute and UBC. Dr. Sindelar is also an elected fellow International Pharmaceutical Federation, Chair of the Global Pharmacy Observatory Advisory Board of the International Pharmaceutical Federation,  Member of the External Advisory Board, Trinity College Dublin, School of Pharmacy and Pharmaceutical Sciences.

Dr. Sindelar is also a past Dean of the Faculty of Pharmaceutical Sciences, UBC, President Providence Health Care Research Institute and VP Research and Academic Affairs, Providence Health Care.

Dr. Sindelar earned a B.A., Chemistry from Millikin University, a M.S. and Ph.D. in Medicinal Chemistry and Natural Products from the University of Iowa, College of Pharmacy.

Mr. David Farnfield, Director, is a Yale School of Economics graduate who brings 35 years of experience in commodity, currency and financial futures markets. While serving as Vice President at George Weston Limited, a large food manufacturer and distributor, David oversaw $1B+ in commodity and currency risk while overseeing their commodity division. He has led key negotiations between industry stakeholders on commodity supply agreements and is intimately familiar with product supply agreements. Mr. Farnfield is also a Board member of the Canadian Oilseed Industry Association (Oilseed Innovation Partners) – a non-government agency.

Mr. Rodger Seccombe, Chief Technology Officer (formerly Head of HealthTab Division), is a co-founder of HealthTab Inc. He has over 20 years of experience launching and running companies in software, healthcare technology, and clean energy. Mr. Seccombe earned a B.Com (hons) from UBC’s Sauder School of Business and is a Chartered Professional Accountant (CPA-CMA). Prior to HealthTab, he designed and developed cloud-based informatics system currently in use by world’s leading medical laboratories and instrument manufacturers. In 2006, he joined the start-up team at Canadian Bioenergy Corporation and helped pioneer the development of the renewable fuel industry in Canada.

The Directors have served in their respective capacities since their election and/or appointment and will serve until the next Annual General Meeting or until a successor is duly elected, unless the office is vacated in accordance with the Articles of the Company.

No Director and/or member of senior management had been the subject of any order, judgment, or decree of any governmental agency or administrator or of any court or competent jurisdiction, revoking or suspending for cause any license, permit or other authority of such person or of any corporation of which he is a Director and/or member of senior management, to engage in the securities business or in the sale of a particular security or temporarily or permanently restraining or enjoining any such person or any corporation of which he is an officer or director from engaging in or continuing any conduct/practice/employment in connection with the purchase or sale of securities,

or convicting such person of any felony or misdemeanor involving a security or any aspect of the securities business or of theft or of any felony.

There are no family relationships between any two or more Directors or members of senior management.

There are no arrangements or understandings with major shareholders, customers, suppliers or others, pursuant to which any person referred to above was selected as a Director or member of senior management.

6.B. Compensation

Cash Compensation

Total compensation accrued and/or paid (directly and/or indirectly) to all Directors/Senior Management during the year ended December 31, 20182019 and two previous years are detailed in Table No. 7 below:

Table No. 7

Annual Compensation of Senior Management

⁽¹⁾Consulting/management fees were paid to a consulting company owned by senior management; 

⁽²⁾Share-based payments for options granted were measured using the Black-Sholes option pricing model.

Table No. 8

Director Stock Option at December 31, 20182019