Enhanced Investments - Financial Portal

Published: 2022-03-23

Exhibit 99.1
Page
	Report of Independent Registered Public Accounting Firm	F-2
	Consolidated Statement of Financial Position as at December 31, 2021 and 2020	F-4
	Consolidated Statement of Operations and Comprehensive Loss for the years ended December 31, 2021 and 2020	F-5
	Consolidated Statement of Changes in Equity (Deficit) for the years ended December 31, 2021 and 2020	F-6
	Consolidated Statement of Cash Flows for the years ended December 31, 2021 and 2020	F-7
	Notes to the Consolidated Financial Statements	F-8

	KPMG LLPChartered Professional AccountantsPO Box 10426 777 Dunsmuir StreetVancouver BC V7Y 1K3Telephone (604) 691-3000Fax (604) 691-3031www.kpmg.ca
		REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
	To the Shareholders and Board of DirectorsMogo Inc.:
	Opinion on the Consolidated Financial Statements
	We have audited the accompanying consolidated statements of financial position of Mogo Inc. (the Company) as
	of December 31, 2021 and 2020, the related consolidated statements of operations and comprehensive loss,
	changes in equity (deficit), and cash flows for each of the years in the two-year period ended December 31, 2021,
	and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated
	financial statements present fairly, in all material respects, the financial position of the Company as of
	December 31, 2021 and 2020, and its financial performance and its cash flows for each of the years in the two-year
	period ended December 31, 2021, in conformity with International Financial Reporting Standards as issued by
	the International Accounting Standards Board.
	Basis for Opinion
	These consolidated financial statements are the responsibility of the Company’s management. Our responsibility
	is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting
	firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required
	to be independent with respect to the Company in accordance with the U.S. federal securities laws and the
	applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
	We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan
	and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free
	of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we
	engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required
	to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an
	opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express
	no such opinion.
	© 2021 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.
F-2

	Mago Inc.Page 2
	Our audits included performing procedures to assess the risks of material misstatement of the consolidated
	financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such
	procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the
	consolidated financial statements. Our audits also included evaluating the accounting principles used and
	significant estimates made by management, as well as evaluating the overall presentation of the consolidated
	financial statements. We believe that our audits provide a reasonable basis for our opinion.
	Chartered Professional Accountants
	We have served as the Company’s auditor since 2019.
	Vancouver, Canada
	March 23, 2022

F-3

	Mogo Inc.
		Consolidated Statement of Financial Position
		(Expressed in thousands of Canadian Dollars)
			December 31,	December 31,

						2021	2020
					Assets
					Cash and cash equivalent			69,208	12,119
					Digital assets		7		1,718	—
					Loans receivable			55,832	47,227
					Prepaid expenses, and other receivables and assets			10,302	2,994
					Investment portfolio			18,088	18,445
					Investment accounted for using the equity method		25	103,821			—
					Property and equipment		9		1,186	892
					Right-of-use assets			3,430	3,879
					Intangible assets			52,304	18,912
					Derivative financial assets		25		7,866	—
					Goodwill		24	70,112			—
					Total assets			393,867	104,468

					Liabilities
					Accounts payable, accruals and other			20,783	7,843
					Lease liabilities			3,948	4,336
					Credit facilities			44,983	37,644
					Debentures			39,794	40,658
					Convertible debentures			—	8,751
					Derivative financial liabilities		16		12,688	—
					Deferred tax liability				1,894	—
					Total liabilities			124,090	99,232

					Shareholders’ Equity
					Share capital			392,628	106,730
					Contributed surplus			24,486	13,560
					Revaluation reserve		7		468	—
					Foreign currency translation reserve				458	—
					Deficit			(148,263)	(115,054)
					Total shareholders’ equity			269,777	5,236
					Total equity and liabilities			393,867	104,468

					Approved on Behalf of the Board
					Signed by “Greg Feller” , Director
					Signed by “Christopher Payne” , Director
					The accompanying notes are an integral part of these consolidated financial statements.
F-4

	Mogo Inc.
Consolidated Statement of Operations and Comprehensive Loss
		(Expressed in thousands of Canadian Dollars)

				For the years ended
			December 31,	December 31,
				Note	2021	2020
				Revenue
				Subscription and services				34,408	19,114
				Interest revenue				23,111	25,131
						18		57,519	44,245
				Cost of revenue
				Provision for loan losses, net of recoveries		4		7,540	8,334
				Transaction costs				3,940	414
								11,480	8,748
				Gross profit				46,039	35,497
				Operating expenses
				Technology and development				10,667	5,134
				Marketing				16,474	4,807
				Customer service and operations				13,214	6,179
				General and administration				17,642	8,453
				Stock-based compensation				10,838	1,371
				Depreciation and amortization		9,10,12		12,736	8,414
				Total operating expenses		19		81,571	34,358
				(Loss) income from operations				(35,532)	1,139
				Other expenses (income)
				Credit facility interest expense		13		4,109	6,194
				Debenture and other financing expense		6,14,15		3,841	6,170
				Accretion related to debentures and convertible debentures		14,15		1,252	963
				Share of loss in investment accounted for using the equity method		25			278	—
				Revaluation (gains) losses		20		(15,671)	2,426
				Other non-operating expenses (income)		21		4,100	(1,169)
								(2,091)	14,584
				Net loss before tax				(33,441)	(13,445)
				Income tax recovery		17			(232)	—
				Net loss				(33,209)	(13,445)
				Other comprehensive income:
				Items that will not be reclassified subsequently to profit or loss:
				Unrealized revaluation gain on digital assets		7		468	-
				Items that are or may be reclassified subsequently to profit or loss:
				Foreign currency translation reserve gain				458	-
				Other comprehensive income				926	-
				Total comprehensive loss				(32,283)	(13,445)
				Net loss per share		21
				Basic loss per share				(0.53)	(0.47)
				Diluted loss per share				(0.53)	(0.47)
				Weighted average number of basic common shares (in 000s)				63,005	28,873
				Weighted average number of fully diluted common shares (in 000s)		63,005	28,873

				The accompanying notes are an integral part of these consolidated financial statements.
F-5

	Mogo Inc.
		Consolidated Statement of Changes in Equity (Deficit)
			(Expressed in thousands of Canadian Dollars)

			Foreign
								currency
					Number of	Share	Contributed		translation						Revaluation
						shares (000s)	capital	surplus	reserve					reserve	Deficit	Total
				Balance, December 31, 2020						32,731 $	106,730 $	13,560 $	— $								— $ (115,054) $	5,236
				Net loss						—	—		—	—								—	(33,209)	(33,209)
				Treasury shares reserve (Note 28b)						(321)	(2,364)	—	—								—	—	(2,364)
				Foreign currency translation reserve						—	—		—	458								—	—			458
				Revaluation reserve (Note 7)						—	—		—	—								468	—			468
				Stock-based compensation (Note 28c)						—	—		10,838	—								—	—	10,838
				Options and restricted share units (“RSUs”) exercised
										841	2,674	(1,140)	—								—	—	1,534

				Shares issued – ATM arrangement, net						1,525	16,804	—	—								—	—	16,804
				Shares issued – Registered direct offerings
										11,458	71,475	777	—								—	—	72,252

				Shares issued on acquisition of Carta (Note 24)
										10,000	54,800	—	—								—	—	54,800

				Shares issued on acquisition of Moka (Note 24)
										4,634	47,207	—	—								—	—	47,207

				Shares issued - replacement awards (Note 24)
										366	—		—	—								—	—			—

				Shares issued on acquisition of Fortification (Note 24)
										75	396	—	—								—	—			396

				Shares issued for purchase of investment accounted for using the equity method (Note 25)
										8,267	77,780	—	—								—	—	77,780

				Shares issued – convertible debentures (Note 15)
										3,179	8,783	—	—								—	—	8,783

				Equity settled share based payment						18	164	—	—								—	—			164
				Warrants issued for broker services (Note 28e)
										—	—		1,410	—								—	—	1,410

				Warrants exercised (Note 28e)						3,618	8,179	(1,804)	—								—	—	6,375
				Amortization of warrants (Note 28e)						—	—		845	—								—	—			845
				Balance, December 31, 2021						76,391	392,628	24,486	458								468	(148,263)	269,777


													Number of	Share	Contributed
													shares (000s)	capital	surplus						Deficit	Total
				Balance, December 31, 2019							27,558 $	94,500 $	8,861 $								(101,609) $	1,752
				Net loss							—	—						—	(13,445)	(13,445)
				Stock-based compensation (Note 28c)							—	—	1,371						—	1,371
				Options and restricted share units (“RSUs”) exercised
											335	1,112	(556)						—			556

				Shares issued – debentures							776	1,410						—	—	1,410
				Equity portion – convertible debentures (Note 15)		—	—						617	—			617
				Shares issued – convertible debentures (Note 15)							2,155	4,983						—	—	4,983
				Shares issued – Partial settlement of credit facility prepayment
											307	1,000						—	—	1,000

				Shares issued to settle debt							610	939						—	—			939
				Warrants issued (Note 28e)							—	—	3,508						—	3,508
				Conversion of warrants (Note 28e)							990	2,786	(775)						—	2,011
				Amortization of warrants (Note 28e)							—	—						534	—			534
				Balance, December 31, 2020							32,731	106,730	13,560								(115,054)	5,236

				The accompanying notes are an integral part of these consolidated financial statements.
F-6

	Mogo Inc.
		Consolidated Statement of Cash Flows
		(Expressed in thousands of Canadian Dollars)
					Year ended
			December 31,	December 31,
				2021	2020
				Cash provided by (used in) the following activities:
				Operating activities
					Net loss		(33,209)	(13,445)
					Items not affecting cash:
					Depreciation and amortization		12,736	8,414
					Postmedia warrant expenses		845	670
					Provision for loan losses		8,476	9,451
					Credit facility and debenture interest expense		7,950	12,364
					Accretion related to debentures and convertible debentures		1,252	963
					Share of loss from investment in associate		278	—
					Stock-based compensation expense		10,838	1,371
					Revaluation (gains) losses		(15,671)	2,426
					Other non-operating expenses (income)		1,954	(606)
					Income tax recovery on deferred tax liability		(285)	—
						(4,836)	21,608
					Changes in:
					Net issuance of loans receivable		(17,081)	2,080
					Proceeds from sale of loan book		—	31,572
					Prepaid expenses, deposits and other assets		(2,537)	513
					Accounts payable and accruals		2,784	(3,328)
				Cash (used in) generated from operating activities		(21,670)	52,445
				Interest paid		(7,974)	(8,640)
				Net cash (used in) generated from operating activities		(29,644)	43,805

				Investing activities
					Acquisition of a subsidiary, net of cash acquired		839	—
					Proceeds from sale of investment		4,878	—
					Cash invested in investment portfolio		(3,698)	(150)
					Cash invested in investment accounted for using the equity method		(32,396)	—
					Purchases of property and equipment		(464)	(23)
					Investment in digital assets		(1,250)	—
					Investment in intangible assets		(7,503)	(4,796)
				Net cash used in investing activities		(39,594)	(4,969)

				Financing activities
					Lease liabilities – principal payments		(660)	(444)
					Repayments on debentures		(2,053)	(399)
					Advance (repayments) on credit facilities		7,339	(38,859)
					Proceeds from issuance of common shares, net of transaction costs		113,329	—
					Proceeds from exercise of warrants		6,375	2,011
					Proceeds from exercise of options		1,534	557
				Net cash provided by (used in) financing activities		125,864	(37,134)

				Net increase in cash		56,626	1,702
				Effect of exchange rate fluctuations		463	—
				Cash and cash equivalent, beginning of period		12,119	10,417
				Cash and cash equivalent, end of period		69,208	12,119

				The accompanying notes are an integral part of these consolidated financial statements.
F-7

	Mogo Inc.
		Notes to the Consolidated Financial Statements
			(Expressed in thousands of Canadian dollars, except per share amounts)
		For the years ended December 31, 2021 and 2020
				1.	Nature of operations
					Mogo Inc. (“Mogo” or the "Company") was continued under the Business Corporations Act (British Columbia) on June 21, 2019, in connection with the combination with Mogo Finance Technology Inc. The address of the Company's registered office is Suite 1700, Park Place, 666 Burrard Street, Vancouver, British Columbia, Canada, V6C 2X8. The Company’s common shares (the “Common Shares”) are listed on the Toronto Stock Exchange (“TSX”) and the Nasdaq Capital Market under the symbol “MOGO”.
					Mogo Inc., one of Canada’s leading financial technology companies, is empowering its 1.9 million members with simple digital solutions to help them get in control of their financial health while also making a positive impact with their money. Through the free Mogo app, consumers can access a digital spending account with the Mogo Visa* Platinum Prepaid Card featuring automatic carbon offsetting, easily buy and sell bitcoin, get free monthly credit-score monitoring and ID fraud protection and access personal loans, and mortgages. Mogo’s new MogoTrade app offers commission-free stock trading that helps users make a positive impact with every investment and together with Moka, Mogo’s wholly owned subsidiary bringing automated, fully-managed flat-fee investing to Canadians, forms the heart of Mogo’s digital wealth platform. Mogo’s wholly owned subsidiary, Carta Worldwide, offers a digital payments platform that powers the next-generation card programs from innovative fintech companies in Europe, North America and APAC. To learn more, please visit mogo.ca or download the mobile app (iOS or Android).
					COVID-19 Pandemic
					During the year ended December 31, 2021, the Canadian economy continued experiencing significant disruption and market volatility related to the global COVID-19 pandemic. The overall impact of the pandemic continues to be uncertain and dependent on actions taken by the Canadian government, businesses, and individuals to limit spread of the COVID-19 virus, as well as governmental economic response and support efforts.
					The rapid worldwide spread of COVID-19 has prompted governments to implement restrictive measures to curb the spread of the pandemic. During this period of uncertainty, the Company’s priority has been to protect the health and safety of its employees, support and enforce government actions to slow the spread of COVID-19, and to continually assess and take appropriate actions to mitigate the risks to the business operations as a result of this pandemic.
					The overall economic impacts of COVID-19 could include an impact on our ability to obtain debt and equity financing or potential future decreases in revenue or the profitability of our ongoing operations. This is an evolving situation, and the Company will continue to evaluate and adapt on an ongoing basis. Measures undertaken to contain the spread of the virus, such as vaccination campaigns, have succeeded in curbing outbreaks of the virus. These measures combined with less restrictive public health measures have provided an improving macroeconomic environment. However, the pandemic, fueled by more contagious variants, continues to pose a risk to the recovery. The extent of the impact that this pandemic may have on the Canadian economy and the Company’s business is currently uncertain and difficult to predict.
					The Company make estimates and assumptions in preparing the consolidated financial statements. These estimates and assumptions have been made taking into consideration the economic impact of the COVID-19 pandemic and the significant economic volatility and uncertainty it has created. There is a higher level of uncertainty with respect to management’s judgments and estimates at this time, particularly as it relates to the measurement of allowance for loan losses and fair valuation of our investment portfolio. The Company will continue to revisit our judgements and estimates where appropriate in future reporting periods as economic conditions surrounding the COVID-19 pandemic continue to evolve. Actual results could differ materially from these estimates, in which case the impact would be recognized in the consolidated financial statements in future periods.
F-8

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				2.	Basis of presentation
					Statement of compliance
					These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). The policies applied in these consolidated financial statements were based on IFRS issued and applicable at December 31, 2021.
					The Company presents its consolidated statement of financial position on a non-classified basis in order of liquidity.
					These consolidated financial statements were authorized for issue by the Board of Directors (the “Board”) on March 23, 2022.
					These consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the payment of liabilities in the ordinary course of business. Should the Company be unable to continue as a going concern, it may be unable to realize the carrying value of its assets and to meet its liabilities as they become due in the normal course.
					Management routinely plans future activities which includes forecasting future cash flows. Management has reviewed their plan and has formed a judgment that the Company has adequate resources to continue as a going concern for the foreseeable future, which Management has defined as being at least the next 12 months. In arriving at this judgment, Management has considered the following: (i) cash flow projections of the Company, which incorporates a rolling forecast and detailed cash flow modeling through the next 12 months from the date of these consolidated financial statements, and (ii) the base of investors and debt lenders historically available to the Company. The expected cash flows have been modeled based on anticipated revenue and profit streams with debt programmed into the model. Refer to Notes 11, 13, 14 and 27 for details on amounts that may come due in the next 12 months.
					For these reasons, the Company continues to adopt a going concern basis in preparing the consolidated financial statements.
			F-9

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				2.	Basis of presentation (Continued from previous page)
					Basis of consolidation
					The Company has consolidated the assets, liabilities, revenues and expenses of all its subsidiaries and its structured entity. The consolidated financial statements include the accounts of the Company, and its direct and indirect wholly-owned subsidiaries, Mogo Finance Technology Inc., Mogo Financial (Alberta) Inc., Mogo Financial (B.C.) Inc., Mogo Financial Inc., Mogo Financial (Ontario) Inc., Mogo Mortgage Technology Inc., Hornby Loan Brokers (Ottawa) Inc., Hornby Leasing Inc., Mogo Technology Inc. (a US subsidiary), Mogo Blockchain Technology Inc., Mogo Wealth Technology Inc., Thurlow Management Inc., Thurlow Capital (Alberta) Inc., Thurlow Capital (B.C.) Inc., Thurlow Capital (Manitoba) Inc., Thurlow Capital (Ontario) Inc., Thurlow Capital (Ottawa) Inc., Carta Solutions Holding Corp., Carta Solutions Processing Services (Cyprus) Ltd., Carta Financial Services Ltd. (a UK subsidiary), Carta Solutions Processing Services Corp., Carta Solutions Processing Services Corp. (a Morocco subsidiary), Carta Solutions Singapore PTE. Ltd. (a Singapore subsidiary), Carta Worldwide Inc., Carta Americas Inc. (a US subsidiary), Moka Financial Technologies Inc., Moka Payments UAB (a Lithuania subsidiary), Moka Financial Technologies Europe (a France subsidiary), Tactex Asset Management Inc., Tactex Advisors Inc. (a US subsidiary), NumberJacks Services Inc., and MogoTrade Inc. (formerly known as Fortification) and its special purpose entity, Mogo Finance Trust (the “Trust”). The financial statements of the subsidiaries and the Trust are prepared for the same reporting period as the Company, using consistent accounting policies.
					Subsidiaries are entities controlled by the Company. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.
					An entity is consolidated if the Company concludes that it controls the entity. The following circumstances may indicate a relationship in which, in substance, Mogo controls and therefore consolidates the entity:
					•
						The Company has power over the entity whereby the Company has the ability to direct the relevant activities (i.e., the activities that affect the entity’s returns);
					•
						The Company is exposed, or has rights, to variable returns from its involvement with the entity; and
					•
						The Company has the ability to use its power over the entity to affect the amount of the entity’s returns.
					Special purpose entities (“SPEs”) are entities that are created to accomplish a narrow and well-defined objective such as the execution of a specific borrowing or lending transaction. An SPE is consolidated, if based on an evaluation of the substance of its relationship with the Company, and the SPE’s risks and rewards, the Company concludes that it controls the SPE. Mogo’s activities with respect to the Trust has resulted in the Company consolidating the Trust within these consolidated financial statements.
					All inter-company balances, income and expenses and unrealized gains and losses resulting from inter-company transactions are eliminated in full.
			F-10

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				3.	Significant accounting policies
				(a)	Revenue recognition
					Revenue is comprised of subscription and services revenue and interest revenue.
					Subscription and services revenue
					Subscription and services revenue is comprised of service revenue, trading revenue, transaction processing revenue, management fee revenue, commission revenue and brokerage revenue. Subscription and services revenue is measured based on the consideration specified in a contract with customers. The Company recognizes revenue when control of the services is transferred to the customer.
					Service revenue
					The Company earns service revenue through its subscription-based offerings including saving and investing products, identity fraud protection, loan protection services, and premium account services. The Company’s service revenues are derived from contracts with individual users. The Company recognizes service revenue from the performance obligations on a straight-line basis, over the length of the contract, on a monthly basis. The Company also earns service revenue through MogoCrypto transaction fees, and MogoCard interchange revenue and other fees that are mainly driven by transactional volume and are recognized when the transaction occurs.
					Transaction processing revenue – new accounting policy applied as at January 25, 2021
					The Company’s transaction processing revenue is derived from long-term processing contracts with financial and non-financial institutions. Transaction processing revenue is generated primarily from [i] fees charged to set up a customer on the Company’s processing platform; and [ii] processing charges, including maintenance fees on cards on the Company’s processing platform, determined by the number of transactions processed and/or cards boarded by the Company for its customers.
					Transaction processing revenue typically includes a performance obligation to provide processing services to its customers. The Company has determined that transaction processing services represent a stand-ready series of distinct daily services that are substantially the same, with the same pattern of service performed for the customer. As a result, the Company has determined that transaction processing revenue arrangements represent an individual performance obligation.
					The Company recognizes set-up fees over the contract period, on a straight-line basis, commencing when services to set up a customer have been completed. The Company recognizes transaction processing charges, including maintenance fees, on a monthly basis based on the greater of the monthly minimum contracted revenue or the total actual transaction fees due based on the number of transactions processed.
			F-11

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				3.	Significant accounting policies (Continued from previous page)
				(a)	Revenue recognition (Continued from previous page)
					Management fee revenue – new accounting policy applied as at May 4, 2021
					Revenue from management services consists of management fees earned through investment advisory services and from investment fund management. The Company recognizes management fee revenue as the management services are delivered.
					Commission revenue
					Commission revenue is comprised of MogoMortgage brokerage commissions and Exempt Market Dealer commission revenue. The Company earns a commission based on the rate set out within the agreement and is recognized upon completion of the services outlined in the agreement.
					Brokerage revenue – new accounting policy applied as at September 1, 2021
					Brokerage revenue arising from negotiating or participating in the negotiation of a transaction on behalf of a third party, such as an agreement to acquire shares or other securities or to buy or sell businesses, is recognized at the closing of the underlying transaction. Fee revenue or components thereof that are related to execution are recognized when the related criteria are met.
					Interest revenue
					Interest revenue represents interest on our long-term loan products. Our long-term loans fall into two categories: line of credit accounts and installment loans. For line of credit accounts, interest is recognized on an effective interest basis during the period, and fees are recognized when assessed to the customer. For installment loans, revenue is recognized on an effective interest basis over the term of the loan and fees are recognized when assessed to the customer. On February 28, 2020, Mogo completed the sale of the majority of its instalment loan portfolio. Refer Note 4 for more details.
				(b)	Cost of revenue
					Cost of revenue consists of provision for loan losses and transaction costs. Transaction costs are expenses that relate directly to the acquisition and processing of new customers (excluding marketing) and include expenses such as data aggregation costs, payment facilitation costs, credit scoring fees, loan system transaction fees, and certain fees related to the MogoCard and MogoProtect programs.
			F-12

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				3.	Significant accounting policies (Continued from previous page)
				(c)	Financial instruments
					Financial assets and liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument. Financial assets are derecognized when the rights to receive cash flows from the assets have expired or have been transferred, and the Company has transferred substantially all risks and rewards of ownership. Financial liabilities are derecognized when the obligation specified in the contract is discharged, cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the consolidated statement of operations and comprehensive loss.
					Classification and measurement of financial assets and financial liabilities
					At initial recognition, the Company measures a financial asset at its fair value plus, and in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss. Financial liabilities are recognized initially at fair value and are classified as amortized cost or as fair value through profit or loss (“FVTPL”). A financial liability is classified as at FVTPL if it is classified as held-for trading, it is a derivative or it is designated as such on initial recognition.
					The Company classifies its financial assets between those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss), and those to be measured at amortized cost. Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business model for managing financial assets in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.
					A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as FVTPL:
					•
						it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
					•
						its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
					A debt investment is measured at fair value through other comprehensive income (“FVOCI”) if it meets both of the following conditions and is not designated as at FVTPL:
					•
						it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and
					•
						its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
					All financial assets not classified as measured at amortized cost or FVOCI as described above are measured at FVTPL.
					Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss. Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense is recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit or loss.
			F-13

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				3.	Significant accounting policies (Continued from previous page)
				(c)	Financial instruments (Continued from previous page)
					The Company’s financial instruments measured at amortized cost include cash and cash equivalent, loans receivable, other receivables, accounts payable and accruals, lease liabilities, credit facilities, debentures, and convertible debentures.
					The Company’s financial instruments measured at FVTPL include the investment portfolio, derivative financial assets and derivative financial liabilities.
					Realized gains or losses on the disposal of investments are determined based on the weighted average cost. Unrealized gains or losses on investments and derivative instruments are determined based on the change in fair value at each reporting period.
					Impairment of financial assets
					Expected credit loss model
					The expected credit loss (“ECL”) model is a three-stage impairment approach used to measure the allowance for loan losses on loans receivable at each reporting period date. Loans are classified under one of three stages based on changes in credit quality since initial recognition. Stage 1 loans consist of performing loans that have not had a significant increase in credit risk since initial recognition. Loans that have experienced a significant increase in credit risk since initial recognition are classified as Stage 2, and loans considered to be credit-impaired are classified as Stage 3. The Company routinely refinances its existing customers, and accordingly, does not consider a modification to be an indicator of increased credit risk. The allowance for loan losses on both Stage 2 and Stage 3 loans is measured at lifetime ECLs. The allowance for loan losses on Stage 1 loans is measured at an amount equal to 12-month ECLs, representing the portion of lifetime ECLs expected to result from default events possible within 12 months of the reporting date. The Company’s measurement of ECLs is impacted by forward looking indicators (“FLIs”) including the consideration of forward macroeconomic conditions. Management has applied a probability weighted approach to the measurement of ECL as at December 31, 2021, involving multiple scenarios and FLIs. Refer to Note 4 for more details.
					Assessment of significant increase in credit risk
					Significant increases in credit risk are assessed based on changes in probability of default of loans receivable subsequent to initial recognition. The Company uses past due information to determine whether credit risk has increased significantly since initial recognition. Loans receivable are considered to have experienced a significant increase in credit risk and are reclassified to Stage 2 if a contractual payment is more than 30 days past due as at the reporting date.
					The Company defines default as the earlier of when a contractual loan payment is more than 90 days past due or when a loan becomes insolvent as a result of customer bankruptcy. Loans that have experienced a default event are considered to be credit-impaired and are reclassified as Stage 3 loans.
			F-14

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				3.	Significant accounting policies (Continued from previous page)
				(c)	Financial instruments (Continued from previous page)
					Measurement of expected credit losses
					ECLs are measured as the calculated expected value of cash shortfalls over the remaining life of a loan receivable, using a probability-weighted approach that reflects reasonable and supportable information about historical loss rates, post-charge off recoveries, current conditions and forward-looking indicators such as bank rates and unemployment rates. The measurement of ECLs primarily involves using this information to determine both the expected probability of a default event occurring and expected losses resulting from such default events. Loans are grouped according to product type, customer tenure and aging for the purpose of assessing ECLs. Historical loss rates and probability weights are re-assessed quarterly and subject to management review.
				(d)	Property and equipment
					All property and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the asset. When parts of an item of property and equipment have different useful lives, they are accounted for as separate items of property and equipment.
					All assets having limited useful lives are depreciated using the declining balance method at rates intended to depreciate the cost of assets over their estimated useful lives except leasehold improvements, which are depreciated straight line over the term of lease.
					The depreciation rate for each class of asset during the current and comparative period are as follows:

						Rate
					Computer equipment	30%
					Furniture and fixtures	20%
					Leasehold improvements		Term of lease

					The useful lives of items of property and equipment are reviewed periodically, and the useful life is altered if estimates have changed significantly.
			F-15

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				3.	Significant accounting policies (Continued from previous page)
				(e)	Intangible assets
					Intangible assets, with the exception of digital assets, are measured at cost less accumulated amortization and impairment losses. Intangible assets include internally generated and acquired software, acquired technology assets, regulatory licenses, and customer relationships with finite useful lives. Acquired brand and trade names are considered to have indefinite useful lives. Internally generated software costs primarily consist of salaries and payroll-related costs for employees directly involved in the development efforts and fees paid to outside consultants.
					Amortization is recorded at rates intended to amortize the cost of the intangible assets over their estimated useful lives as follows:

						Rate
					Software - Internally generated		5 years straight line
					Software licenses		5 years straight line
					Technology assets - Acquired		10 years straight line
					Customer relationships		5 years straight line
					Regulatory licenses		5 years straight line
					Brand and trade name	Indefinite
					Development costs, including those related to the development of software, are recognized as an intangible asset when the Company can demonstrate:
					•
								the technical feasibility of completing the intangible asset so that it will be available for use or sale;
					•			its intention to complete and its ability to use or sell the asset;
					•
								how the asset will generate future economic benefits;
					•
								the availability of resources to complete the asset; and
					•			the ability to measure reliably the expenditure during development.
					Following initial recognition of the development expenditure as an asset, the cost model is applied requiring the asset to be carried at cost less any accumulated amortization and accumulated impairment losses. Amortization of the asset begins when development is complete, and the asset is available for use. During the period of development, the asset is tested for impairment annually.
				(f)	Goodwill – new accounting policy applied as at January 25, 2021
					Goodwill represents the future economic benefits arising from a business combination that are not individually identified and separately recognized. Goodwill is measured at cost less accumulated impairment losses. Goodwill is tested for impairment annually.
			F-16

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				3.	Significant accounting policies (Continued from previous page)
				(g)	Impairment of non-financial assets
					At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss, if any. Recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating units (“CGUs”) to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual CGUs, or otherwise they are allocated to the smallest group of CGUs for which a reasonable and consistent allocation basis can be identified.
					For impairment testing purposes, the Company is determined to be two CGUs as follows:
					•
						Carta; and
					•
						Remaining Mogo related entities.
					Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired.
					The recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
					If the recoverable amount of an asset or CGU is estimated to be less than its carrying amount, the carrying amount of the asset or CGU is reduced to its recoverable amount. An impairment loss is recognized immediately in the consolidated statement of operations and comprehensive loss.
					Other than for goodwill, where an impairment loss subsequently reverses, the carrying amount of the asset or CGU is increased to the revised estimate of its recoverable amount, such that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset or CGU in prior years. A reversal of an impairment loss is recognized in the consolidated statement of operations and comprehensive loss.
				(h)	Digital assets – new accounting policy applied as at January 1, 2021
					Digital assets represent investments in cryptocurrencies held by the Company that are classified as indefinite life intangible assets. The Company has ownership and control over its digital assets and uses third-party custodial services to secure them. The Company has concluded that digital assets are traded in an active market where there are observable prices and digital assets are measured under the revaluation model
at fair value at
					the revaluation date less any accumulated impairment loss.
					Acquisitions of digital assets are recognized at cost and are remeasured to fair value at the end of the period by reference to active markets. The Company determines the fair value of our digital assets in accordance with IFRS 13 Fair Value Measurement (“IFRS 13”) using quoted prices on the active exchanges for digital assets (Level 1 inputs). Digital assets are remeasured to fair value on this basis at each reporting date. In addition, the Company perform an analysis each quarter to identify whether events or changes in circumstances in addition to market price, provide indicators of impairment. A decrease in value due to impairment identified in this manner is accounted for as a fair value decrease as described below.
			F-17

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				3.	Significant accounting policies (Continued from previous page)
				(h)	Digital assets – new accounting policy applied as at January 1, 2021 (Continued from previous page)
					Fair value increases are recognized in other comprehensive income and recorded to a revaluation reserve, except to the extent that the increase reverses a previous revaluation decrease on the same asset recognized in net loss, in which case a gain up to the amount of the loss previously charged to net loss is recognized in net profit. Fair value decreases are recognized in other comprehensive loss to the degree that these reduce any accumulated revaluation reserve, with any decrease in excess of the revaluation reserve recognized in net loss.
				(i)	Foreign currency translation – new accounting policy applied as at January 25, 2021
					The consolidated financial statements are presented in Canadian dollars. The functional currency of each subsidiary is determined based on the currency of the primary economic environment in which that subsidiary operates. Transactions in foreign currencies are initially recorded by the subsidiaries at their respective functional rates prevailing at the date of the transaction. Monetary items are translated into Canadian dollars at the exchange rate in effect as at the date of the consolidated statement of financial position and non-monetary items are translated as at the rate of exchange in effect when the assets were acquired or the obligation was incurred. Revenue and expenses are translated at the exchange rate in effect at the time of the transaction. Foreign exchange gains or losses are recorded in the consolidated statement of operations and comprehensive loss. The functional currency of each subsidiary that is not in Canadian dollars is as follows: Carta Financial Services Ltd. (GBP), Carta Solutions Processing Services Cyprus Ltd. (EUR), Carta Solutions Processing Services Corp. (MAD), Carta Solutions Singapore PTE. Ltd. (SGD), Carta Americas Inc. (USD), Moka Financial Technologies Europe (EUR), Tactex Asset Management Inc. (EUR), and Tactex Advisors Inc. (USD).
				(j)	Foreign operations – new accounting policy applied as at January 25, 2021
					The assets and liabilities of foreign operations are translated to the presentation currency using exchange rates at the reporting date. The revenue and expenses of foreign operations are translated to the presentation currency using exchange rates at the dates of the transactions. Foreign currency differences are recognized in other comprehensive income.
				(k)	Provisions
					Provisions are recognized when the Company has a present legal or constructive obligation that is the result of a past event, when it is probable that the Company will be required to settle the obligation, and a reliable estimate of the amount of the obligation can be made. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects the risk specific to the obligation.
				(l)	Income taxes
					Income tax expense is comprised of current and deferred tax. Current tax is the expected tax payable or receivable on the taxable income or loss for the period, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
					Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date.
					Deferred tax assets are recognized to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized.
				(m)	Investment tax credits – new accounting policy applied as at May 4, 2021
					The benefits of investment tax credits for scientific research and development expenditures are recognized in the year the qualifying expenditure is made, providing there is reasonable assurance of recovery.
			F-18

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				3.	Significant accounting policies (Continued from previous page)
				(n)	Sales tax
					Revenue, expenses and assets are recognized net of the amount of sales tax except where the sales tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case the sales tax is recognized as part of the cost of acquisition of the asset or as part of the expense item as applicable. The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part of amounts receivable or accounts payable and accrued liabilities in the consolidated statement of financial position.
				(o)	Share-based payments
					The Company measures equity settled stock options granted to directors, officers, employees and consultants based on their fair value at the grant date and recognizes compensation expense over the vesting period. Measurement inputs include the Company’s share price on the measurement date, the exercise price of the option or warrant, the expected volatility of the Company’s shares, the expected life of the options or warrants, and the risk-free rate of return. Dividends are not factored in as the Company does not expect to pay dividends in the foreseeable future. Expected forfeitures are estimated at the date of grant and subsequently adjusted if further information indicates actual forfeitures may vary from the original estimate.
					For each restricted share unit (“RSU”) granted to directors, officers and employees, compensation expense is recognized equal to the market value of one common share at the date of grant based on the number of RSUs expected to vest, recognized over the term of the vesting period, with a corresponding credit to contributed surplus.
					Share-based payment arrangements with non-employees in which the Company receives goods or services as consideration for its own equity instruments are accounted for as equity-settled share-based payments transactions. The share-based payments are measured based on the fair value of the goods or services received if the fair value can be reliably measured. Otherwise, the share-based payments are measured based on the fair value of the share-based awards using the expected life, risk free interest rate, volatility, exercise price, and fair value of the underlying equity instrument at the time the goods or services are received.
				(p)	Earnings per share
					The computation of earnings per share is based on the weighted average number of shares outstanding during the period. Diluted earnings per share are computed in a similar way to basic earnings per share except that the weighted average shares outstanding are increased to include additional shares assuming the exercise of share options or warrants, or conversion of convertible debentures, if dilutive.
				(q)	Business combinations
					The Company uses the acquisition method of accounting for its business combinations. The consideration transferred in the acquisition is generally measured at fair value, as are the identifiable net assets acquired. Any gain on purchase is recognized in profit or loss immediately. Transaction cost are expenses as incurred, except if related to the issue of debt or equity securities. The consideration transferred does not include amounts related to the settlement of pre-existing relationship. Such amounts are generally recognized in the consolidated statement of operations and comprehensive loss.
					If share-based payment awards (“replacement awards”) are required to be exchanged for awards held by acquiree’s employees, then all or a portion of the amount of the acquirer’s replacement awards is included in measuring the consideration transferred in the business combination. This determination is based on the market-based measure of the replacement awards compared with the market-based measure of the acquiree’s awards and the extent to which the replacement awards related to pre-acquisition services.
			F-19

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				3.	Significant accounting policies (Continued from previous page)
				(r)	Investment in associate – New accounting policy applied as at April 16, 2021
					An associate is an entity over which the Company has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies. The considerations made in determining significant influence are similar to those necessary to determine control over subsidiaries.
					The Company’s investment in its associate is accounted for using the equity method. Under the equity method, the investment in an associate is initially recognized at cost. The carrying amount of the investment is adjusted to recognize changes in the Company’s share of the profit or loss and other comprehensive income of the associate since the acquisition date. Goodwill relating to the associate is included in the carrying amount of the investment and is not tested for impairment separately.
					The consolidated statement of operations and comprehensive loss reflects the Company’s share of the results of operations of the associate. Unrealized gains and losses resulting from transactions between the Company and the associate are eliminated to the extent of the interest in the associate.
					The aggregate of the Company’s share of an associate’s profit or loss after tax is shown on the face of the consolidated statement of operations and comprehensive loss as a separate line item. The financial statements of the associate are prepared for the same reporting period as the Company. When necessary, adjustments are made to bring the accounting policies in line with those of the Company. After application of the equity method, the Company determines whether it is necessary to recognize an impairment loss on its investment in its associate. At each reporting date, the Company determines whether there is objective evidence that the investment in the associate is impaired. If there is such evidence, the Company calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value, and then recognizes the loss within its share of profit or loss of an associate in the consolidated statement of operations and comprehensive loss.
				(s)
					Cash and cash equivalent
					Cash and cash equivalent in the consolidated statement of financial position and cash flows is comprised of cash held at banks, cash held on hand and short-term highly liquid deposits with an original maturity of three months or less that are readily convertible to a known amount of cash and subject to an insignificant risk of changes in value.
					Cash and cash equivalents include $1,446 of deposits held by the Company that are subject to regulatory restrictions and therefore are not available for general use.
				(t)	Leases
					Right-of-use assets
					Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any re-measurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognized, initial direct cost incurred, and lease payments made at or before the commencement date less any lease incentives received. The right-of-use assets are depreciated on a straight-line basis over the lease term. Right-of-use assets are subject to an evaluation of impairment if any indicators of impairment are noted.
					Lease liabilities
					The Company recognizes lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payment includes fixed payments (including in-substance fixed payments). Variable payments other than those that depend on an index or a rate are recorded in general and administration expenses as incurred.
			F-20

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				3.	Significant accounting policies (Continued from previous page)
				(t)	Leases (Continued from previous page)
					In calculating the present value of lease payments, the Company uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is re-measured if there is a modification, a change in the lease term or a change in the in-substance fixed lease payments.
					Short-term leases and leases of low-value assets
					The Company applies the short-term lease recognition exemption to its short-term leases of properties (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered of low value (i.e., below $5,000). Lease payments on short-term leases and leases of low-value assets are recognized as expenses in the period incurred.
				(u)	Government assistance
					Government assistance is recognized when there is reasonable assurance that it will be received and all related conditions will be complied with. When government assistance relates to an expense item, it is recognized as revenue over the period necessary to match the government assistance in a systematic basis to the costs that is intended to subsidize.
				(v)	Significant accounting judgements, estimates and assumptions
					The preparation of the consolidated financial statements requires management to make estimates, assumptions and judgments that affect the reported amount of assets and liabilities, and the reported amount of revenues and expenses during the year. Actual results may differ from these estimates. Estimates, assumptions, and judgments are reviewed on an ongoing basis. Revisions to accounting estimates are recognized on a prospective basis beginning from the period in which they are revised.
					Significant accounting judgements
					The following are the critical judgements, apart from those involving estimations that have been made in the process of applying the Company’s accounting policies, which have the most significant effect on the amounts recognized in the consolidated financial statements.
					Expected credit losses
					In applying its accounting policy for the expected credit loss model the Company applies judgment in defining significant increase in defaults, and its write-offs policy. Refer to Note 4 for further details.
					Significant accounting estimates and assumptions
					These estimates and assumptions are based on management’s historical experience, best knowledge of current events, conditions and actions that the Company may undertake in the future and other factors that management believes are reasonable under the circumstances.
			F-21

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				3.	Significant accounting policies (Continued from previous page)
				(v)	Significant accounting judgements, estimates and assumptions (Continued from previous page)
						These estimates and assumptions are reviewed periodically, and the effect of a change in accounting estimate or assumption is recognized prospectively by including it in the consolidated statement of operations and comprehensive loss in the period of the change and in any future periods affected.
						The areas where estimates and assumptions have the most significant effect on the amounts recognized in the consolidated financial statements include the following:
					(i)	Allowance for loan losses
						Our provision for loan losses consists of amounts charged to the consolidated statement of operations and comprehensive loss during the period to maintain an adequate allowance for loan losses. Our allowance for loan losses represents our estimate of the expected credit losses inherent in our existing loan portfolio and is based on a variety of factors, including the composition and quality of the portfolio, loan-specific information gathered through our collection efforts, delinquency levels, our historical charge-off and loss experience, our expectations of future loan performance, and general forward-looking macroeconomic conditions. The methodology and assumptions used in setting the loan loss allowance are reviewed regularly to reduce any difference between loss estimates and actual loss experience.
					(ii)	Fair value of privately held investments
						Estimating fair value requires that significant judgment be applied to each individual investment. For privately held investments, the fair value of each investment is measured using the most appropriate valuation methodology or combination of methodologies in the judgment of management in light of the specific nature, facts and circumstances surrounding that investment. This may take into consideration, but not be limited to, one or more of the following: valuations of recent or in-progress funding rounds, forward revenue and earnings projections, comparable peer valuation multiples, and the initial cost base of the investment. Actual results could differ significantly from these estimates.
					(iii)	Fair value of identifiable intangible assets acquired from business combinations
						Estimating fair value requires that significant judgement be applied to each identifiable intangible asset. For identifiable intangible assets, the fair value is determined using the most appropriate valuation methodology or combination of methodologies in the judgement of management in light of the specific nature, facts and circumstances surrounding the intangible asset. Management exercises judgement in determining inputs to the valuation methodology including discount rates and cash flow projections. Variations in actual results for any of these inputs will result in a different fair value of the intangible asset as compared to the original estimate.
					(iv)	Valuation of goodwill acquired in business combinations
						The Company is required to assess the recoverability of values assigned to cash generating units that include goodwill on an annual basis. Estimating the recoverable amount requires significant judgment in the determination of appropriate inputs. This may take into consideration the following: forecast period, cash flow projections, discount rates. Actual results could differ significantly from these estimates.
				(w)	New and amended standards and interpretations
					Certain new or amended standards and interpretations became effective on January 1, 2021, but do not have an impact on the consolidated financial statements of the Company. The Company has not adopted any standards or interpretations that have been issued but are not yet effective.
			F-22

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				3.	Significant accounting policies (Continued from previous page)
				(w)	New and amended standards and interpretations (Continued from previous page)
					Certain new or amended standards and interpretations are expected to become effective on January 1, 2022 and beyond. There are no new standards, interpretations or amendments that are expected to have a material impact to the Company’s consolidated financial statements. The Company has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.
				4.	Loans receivable
					Loans receivable represent unsecured installment loans and lines of credit advanced to customers in the normal course of business. Current loans are defined as loans to customers with terms of one year or less, while non-current loans are those with terms exceeding one year. The breakdown of the Company’s gross loans receivable as at December 31, 2021 and December 31, 2020 are as follows:
						December 31,	December 31,

							2021	2020
					Current (terms of one year or less)		65,397	54,978
					Non-current (terms exceeding one year)		248	1,135
							65,645	56,113

			F-23

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				4.	Loans receivable (Continued from previous page)
					The following table provides a breakdown of gross loans receivable and allowance for loan losses by aging bucket, which represents our assessment of credit risk exposure and by their IFRS 9 ECL measurement stage. The entire loan balance of a customer is aged in the same category as its oldest individual past due payment, to align with the stage groupings used in calculating the allowance for loan losses under IFRS 9. Stage 3 gross loans receivable include net balances outstanding and still anticipated to be collected for loans previously charged off and these are carried in gross receivables at the net expected collectable amount with no associated allowance:

										As at December 31, 2021
					Risk Category	Days past due		Stage 1					Stage 2	Stage 3	Total
					Strong	Not past due		54,067						—	—	54,067
					Lower risk	1-30 days past due		2,797						—	—	2,797
					Medium risk	31-60 days past due		—					1,284		—	1,284
					Higher risk	61-90 days past due		—					798		—	798
						91+ days past due or bankrupt
					Non-performing
				—					—	6,699	6,699
						Gross loans receivable		56,864					2,082		6,699	65,645
						Allowance for loan losses	(5,291 )					(1,119 )	(3,403 )	(9,813 )
						Loans receivable, net		51,573					963		3,296	55,832


									As at December 31, 2020
					Risk Category	Days past due		Stage 1					Stage 2	Stage 3	Total
					Strong	Not past due		47,590						—	—	47,590
					Lower risk	1-30 days past due		1,571						—	—	1,571
					Medium risk	31-60 days past due		—					720		—	720
					Higher risk	61-90 days past due		—					415		—	415
						91+ days past due or bankrupt
					Non-performing
				—					—	5,817	5,817
						Gross loans receivable		49,161					1,135		5,817	56,113
						Allowance for loan losses	(5,425 )					(772 )	(2,689 )	(8,886 )
						Loans receivable, net		43,736					363		3,128	47,227

			F-24

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				4.	Loans receivable (Continued from previous page)
					The following tables show reconciliations from the opening to the closing balance of the loss allowance:

						As at December 31, 2021
							Stage 1					Stage 2	Stage 3	Total
					Balance as at January 1, 2021		5,425				772		2,689	8,886
					Gross loans originated		3,263				—		—	3,263
					Principal payments		(1,229 )				(84 )		68	(1,245 )
					Re-measurement of allowance before transfers		(830 )					(144 )	(743 )	(1,717 )
					Re-measurement of amounts transferred between stages

		(67 )					920		7,322	8,175
					Transfer to (from)
					Stage 1 – 12 month ECLs								79	(59 )		(20 )		—
					Stage 2 – Lifetime ECLs		(192 )				192		—		—
					Stage 3 – Lifetime ECLs		(728 )					(478 )	1,206		—
					Net amounts written off against allowance								—	—		(7,549)	(7,549)
					Balance as at December 31, 2021		5,721					1,119	2,973	9,813


						As at December 31, 2020
							Stage 1					Stage 2	Stage 3	Total
					Balance as at January 1, 2020		7,479					1,783	6,758	16,020
					Gross loans originated		1,346				—		—	1,346
					Principal payments		(2,448 )					(476 )	(838 )	(3,762 )
					Derecognition of allowance associated with Liquid Sale

		(1,575 )						(247 )	(309 )	(2,131 )
					Re-measurement of allowance before transfers		1,702				128		532	2,362
					Re-measurement of amounts transferred between stages

		(145 )					636		9,014	9,505
					Transfer to (from)
					Stage 1 – 12 month ECLs		173					(122 )	(51 )		—
					Stage 2 – Lifetime ECLs		(124 )				125		(1 )		—
					Stage 3 – Lifetime ECLs		(983 )					(1,055 )	2,038		—
					Net amounts written off against allowance								—	—	(14,454 )	(14,454 )
					Balance as at December 31, 2020		5,425				772		2,689	8,886

					In determination of the Company’s allowance for loan losses, internally developed models are used to factor in credit risk related metrics, including the probability of defaults, the loss given default and other relevant risk factors. Management also considered the impact of key macroeconomic factors such as GDP, unemployment rates, inflation rates, interest rate, and oil prices on the allowance for loan losses. The analysis performed by the Company determined that historic losses are most correlated with inflation rate. As part of the process, inflation rate was used to generate two forward looking scenarios 1) Optimistic 2) Pessimistic. If management were to assign 100% probability to the optimistic and pessimistic scenario forecasts, the allowance for credit losses would have been $630 lower and $705 higher than the reported allowance for credit losses as at December 31, 2021, respectively.
			F-25

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				4.	Loans receivable (Continued from previous page)
					The overall changes in the allowance for loan losses are summarized below:
					Allowance for loan losses			Year ended
						December 31,	December 31,
								2021	2020

					Balance, beginning of period		8,886	16,020
					Derecognition of allowance associated with loan sale		—	(2,131)
					Provision for loan losses		8,476	9,451
					Charge offs		(7,549)	(14,454)
					Balance, end of period		9,813	8,886

					The provision for loan losses in the consolidated statement of operations and comprehensive loss during the year ended December 31, 2021 is recorded net of recoveries of $936 (2020 - $1,117).
					On February 28, 2020, Mogo completed the sale of the majority of its non-current (“MogoLiquid”) loan portfolio (the “Liquid Sale”) for gross consideration of $31,572, de-recognized net loan receivables of $29,896 and recognized a corresponding gain on sale of loan book amounting to $1,676. This gain is presented within other non-operating expenses, in the consolidated statement of operations and comprehensive loss.
				5.	Prepaid expenses, deposits and other assets

						December 31,	December 31,
							2021	2020
					Prepaid expenses		1,849	1,546
					Accounts receivable		2,112	—
					Brokerage firm receivables		3,276	—
					Deposits and other receivables		3,065	1,448
							10,302	2,994

			F-26

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				6.	Related party transactions
					Related party transactions during the year ended December 31, 2021 include transactions with debenture holders that incur interest. The related party debentures balance as at December 31, 2021 totaled $322 (December 31, 2020 – $358). The debentures bear annual coupon interest of 8.0% (December 31, 2020 – 8.0%) with interest expense of $26 for the year ended December 31, 2021 (December 31, 2020 – $35). The related parties involved in such transactions include shareholders, officers, directors, and management, close members of their families, or entities which are directly or indirectly controlled by close members of their families. The debentures are ongoing contractual obligations that are used to fund our corporate and operational activities. In relation to the amendment to the terms of debentures on September 30, 2020 (see Note 28e), 35,831 warrants were issued to related parties with a fair value of $28.
					On June 30, 2021, the Company acquired 1,300,000 common shares of Tetra Trust Company from its associate Coinsquare Ltd. (“Coinsquare”) for $1,300. As at December 31, 2021, this investment is valued at $1,300 and is recorded within the investment portfolio. This related party transaction was made on terms equivalent to those that prevail in arm’s length transactions.
					Key management personnel
					Key management personnel (“KMP”) are those persons having authority and responsibility for planning, directing, and controlling the activities of the entity, directly or indirectly. Key management personnel consist of directors and executive officers.
					During the year ended December 31, 2021, KMP were granted 1,260,000 stock options with a fair value of $3,651 at the grant date (2020 – 1,425,000 stock options with a fair value of $2,403 at the grant date).
					Aggregate compensation of KMP during the year consisted of:

						2021	2020
					Salary and short – term benefits	1,529	761
					Share – based payments	2,616	591
						4,145	1,352

			F-27

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				7.	Digital assets
					Digital assets represent investments in cryptocurrencies which the Company expects to hold for the foreseeable future. The following table summarizes the Company’s digital assets as at December 31, 2021:

						Total	Cumulative
			Average	Fair					fair	Historical	revaluation
			cost per	value					value	cost	gain (loss)
		Quantities	unit		per unit					($000s)	($000s)	($000s)

					Bitcoin (BTC)		17.82 $ 42,079 $ 58,309 $ 1,039 $						750 $	289
					Ethereum (ETH)		145.99	3,425						4,647	679			500	179
													1,718			1,250	468

					In January 2021, the Company purchased $750 of Bitcoin and in April 2021, the Company purchased $500 of Ethereum. During the year ended December 31, 2021, the Company recorded $468 of revaluation gain on digital assets through other comprehensive income. As at December 31, 2021, the carrying value of our digital assets held was $1,718.
				8.	Investment portfolio


						December 31,	December 31,
							2021	2020
					Equities		16,820	18,445
					Other		1,268	—
							18,088	18,445

			F-28

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				9.	Property and equipment

			Computer			Furniture	Leasehold
				equipment				and fixtures	improvements						Total
					Cost
					Balance, December 31, 2019		4,513		1,180		2,509	8,202
					Additions		22			—	—	22
					Disposals		(2,452 )			—	(454 )	(2,906 )
					Balance, December 31, 2020		2,083		1,180		2,055	5,318
					Additions		462			2	—	464
					Additions through business combinations		298			31	—	329
					Effects of movement in exchange rate		(20 )			(1 )	—	(21 )
					Balance, December 31, 2021		2,823		1,212		2,055	6,090

					Accumulated depreciation
					Balance, December 31, 2019		3,761					733	1,935	6,429
					Depreciation		229			91	311	631
					Disposals		(2,443 )			—	(191 )	(2,634 )
					Balance, December 31, 2020		1,547					824	2,055	4,426
					Depreciation		400			78	—	478
					Balance, December 31, 2021		1,947					902	2,055	4,904

					Net book value
					Balance, December 31, 2020		536					356	—	892
					Balance, December 31, 2021		876					310	—	1,186

					During the year ended December 31, 2020, the Company vacated one of its leased properties and accordingly wrote off $263 of net book value related to leasehold improvements for the right of use asset and also recognized a loss of $9 on the disposal of computer equipment, including fully depreciated bitcoin equipment with a cost and accumulated depreciation of $2,427 and furniture and fixtures. Non-cash expense related to disposals is recorded in the consolidated statement of operations and comprehensive loss.
					Upon the completion of the acquisition of Carta on January 25, 2021 and Moka on May 4, 2021, the Company recognized property and equipment with fair values of $270 and $59 respectively, along with effects of exchange rate movement related to foreign subsidiaries on the consolidated statement of financial position.
					Depreciation of $nil for the year ended December 31, 2021 (2020 - $311) for leasehold improvements and depreciation expense of $478 for the year ended December 31, 2021 (2020 - $320) for all other property and equipment is included in depreciation and amortization.
			F-29

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				10.	Intangible assets
						Internally
						generated	Internally		Acquired
		–	generated–in progress	Software	technology						Customer	Regulatory
							completed	licenses	assets				relationships Brand	licenses	Total
					Cost
					Balance, December 31, 2019		34,849	1,388	3,356					—	—	—	— 39,593
					Additions		—	4,796	—							—	—	—	—				4,796
					Transfers		4,655	(4,655 )	—							—	—	—	—				—
					Balance, December 31, 2020		39,504	1,529	3,356					—	—	—	— 44,389
					Additions		1,200	6,303	—							—	—	—	—				7,503
					Additions through a business combination
							—	—	628	21,000				8,900 1,000	6,800 38,328

					Impairment		—								(898 )	—				—	—	—	—	(898)
					Transfers		3,936	(3,936 )	—							—	—	—	—				—
					Effects of movement in exchange rate
							—	—	(8 )							—	—	—	—				(8)

					Balance, December 31, 2021		44,640	2,998	3,976	21,000				8,900 1,000	6,800 89,314
					Accumulated depreciation
					Balance, December 31, 2019		15,138	—	3,198					—	—	—	— 18,336
					Amortization		7,093	—	48							—	—	—	—				7,141
					Balance, December 31, 2020		22,231	—	3,246					—	—	—	— 25,477
					Amortization		7,279	—	218	1,722				1,427	—	887 11,533
					Balance, December 31, 2021		29,510	—	3,464	1,722				1,427	—	887 37,010
					Net book value
					Balance, December 31, 2020		17,273	1,529	110					—	—	—	— 18,912
					Balance, December 31, 2021		15,130	2,998	512	19,278				7,473 1,000	5,913 52,304

					Upon the acquisition of Carta on January 25, 2021, Moka on May 4, 2021, and Fortification on September 1, 2021, the Company recognized intangible assets with fair values of $19,328, $18,700 and $300 respectively on the consolidated statements of financial position. Refer to Note 24 for further details.
					Amortization of $11,533 for the year ended December 31, 2021 (December 31, 2020 – $7,141) is included in depreciation and amortization.
				11.	Accounts payable and accruals
							December 31,	December 31,

											2021	2020
					Accounts payables						4,960	3,291
					Accrued expenses						7,068	2,423
					Accrued wages and other benefits						3,044	1,379
					Client liabilities						4,195	—
					Others						1,516	750
											20,783	7,843

			F-30

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				12.	Leases
					The Company has lease agreements for its office spaces. Leases generally have lease terms between 2 years to 7 years with an option to renew the lease after that date. The Company assesses at the lease commencement date whether it is reasonably certain to exercise the extension option. The Company re-assesses whether it is reasonably certain to exercise the options if there is a significant event or significant change in circumstances within its control.
					During the year, the Company has not made any re-assessment related to extension options. Information about leases for which the Company is a lessee is presented below:
					Amount recognized in the consolidated statement of financial position:
					Set out below are the carrying amounts of the Company’s right-of-use assets and lease liabilities recognized and the movements during the year ended December 31, 2021 and 2020.
						Right -of-use-			Lease

							assets		Liabilities
					As at January 1, 2020					4,821	5,208
					Modifications and renewals			33	(100)
					Additions			(333)	(328)
					Depreciation expense			(642)	—
					Interest expense			—	272
					Payments			—	(716)
					As at December 31, 2020					3,879	4,336
					Additions			316	316
					Disposals			(40)	(43)
					Depreciation expense			(725)	—
					Interest expense			—	243
					Payments			—	(904)
					As at December 31, 2021					3,430	3,948

			F-31

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				12.	Leases (Continued from previous page)
					Amount recognized in the consolidated statement of operations and comprehensive loss:

						2021	2020
					Depreciation expense of right-of-use assets	603	642
					Interest expense on lease liabilities	243	272
					Expenses relating to short term leases	95	39
					Variable lease payments	453	516
					Total amount recognized in consolidated statement of operations and comprehensive loss
						1,394		1,469

					Depreciation of right-of-use assets is included in depreciation and amortization expense. Interest expense related to lease liabilities is included in debenture and other financing expense.
	(December 31, 2020 - $444) related to principal
					The Company in its cash flow has classified cash payment of $660
					portion of lease payments as financing activities and cash payments of $243 (December 31, 2020 - $272) related to interest portion as operating activities consistent with the presentation of interest payments chosen by the Company.
				13. Credit facilities
					As of January 1, 2020, the Company had two credit facilities: the “Credit facility – Liquid” and the “Credit facility”, both credit facilities are subject to variable interest rates that reference LIBOR, or under certain conditions, the Federal Funds Rate in effect.
					The Credit facility had an effective interest rate of LIBOR plus 12.5% (with a LIBOR floor of 2%), contractually set to reduce to LIBOR plus 9% (with a LIBOR floor of 1.5%) effective July 2, 2020, payable on the greater of the actual aggregate unpaid principal balance, or the prescribed minimum balance under the term loan agreement. The total available loan capital under the Credit Facility was $60 million with a maturity date of July 2, 2022.
					On February 28, 2020, in conjunction with the Liquid Sale, Mogo repaid and extinguished its Credit facility – Liquid, which held a principal outstanding balance of approximately $28,683 immediately prior to derecognition. As part of extinguishing the facility in advance of its maturity, Mogo recognized a prepayment penalty of $2,500 of which $1,500 was payable in cash and of which $1,000 was settled in shares on March 5, 2020, through the issuance of 306,842 Common Shares, priced at $3.26 per share.
					On June 29, 2020, the Company amended its Credit facility. The amendments decreased the available loan capital from $60 million to $50 million and reduced the prescribed minimum balances applicable in the calculation of interest as described above. There is a 0.33% fee on the available but undrawn portion of the $50 million facility.
					On December 16, 2021, the Company further amended its Credit facility. The amendment lowered the effective interest rate from a maximum of LIBOR plus 9% (with a LIBOR floor of 1.5%) to LIBOR plus 8% with no floor. In addition, the amendment increases the available loan capital from $50 million to $60 million and extends the maturity date by three years from July 2, 2022 to July 2, 2025.
			F-32

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				13.	Credit facilities (Continued from previous page)
						December 31,	December 31,

							2021	2020
					Credit facility
					Funds drawn		44,983	37,644
							44,983	37,644

					Credit facility is subject to certain covenants and events of default. As of December 31, 2021 and December 31, 2020, the Company was in compliance with these covenants. Interest expense on both credit facilities is included in credit facility interest expense in the consolidated statement of operations and comprehensive loss.
					The Company has pledged financial instruments as collateral against its credit facilities. Under the terms of the general security agreement, assets pledged as collateral primarily include cash and cash equivalents with a balance of $154 (December 31, 2020 - $892) and loans receivable with a carrying amount equal to $55,832
									(December 31, 2020 - $47,227).
				14.	Debentures
					On September 30, 2020, the Company and its debenture holders approved certain amendments to the terms of the debentures, with an effective date of July 1, 2020. Among other things, the amendments include:
					i)				a reduction in the weighted average coupon interest rate, from approximately 14% to approximately 7% and the extension of the maturity date for 50% of the principal balance to January 31, 2023, and the remainder to January 31, 2024;
					ii)				replacement of the former monthly interest payable by a new quarterly payment (the “Quarterly Payment”), the amount of which is fixed at 12% per annum (3% per quarter) of the principal balance of the debentures as at September 29, 2020. Debenture holders received an election to either receive the Quarterly Payment as a) an interest payment of 8% per annum (2% per quarter) with the remainder of the payment going towards reducing the principal balance of the debenture, or b) a reduction of the principal balance of the debenture equal to the amount of the Quarterly Payment;
					iii)				settlement of the new Quarterly Payment on the first business day following the end of a calendar quarter at the Company’s option either in cash or Common Shares; and
					iv)				an option for all debenture holders to receive a lump-sum payout of their previously unpaid interest for the period from March 1, 2020 to June 30, 2020, at a reduced interest rate of 10%. Those who elected this option were paid in Common Shares in October 2020.
			F-33

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				14.	Debentures (Continued from previous page)
					On October 7, 2020, Mogo issued 4,479,392 warrants (the “Debenture Warrants”) to its debenture holders in connection with the debenture amendments approved on September 30, 2020, at an exercise price of $2.03 per warrant. The Debenture Warrants are exercisable at any time until December 31, 2022. As at December 31, 2021, 3,618,737 warrants (December 31, 2020 – 990,427) have been exercised and converted into Common Shares for cash proceeds of $6,375 (December 31, 2020 - $2,011). As at December 31, 2021, 1,184,015 Debenture Warrants remain outstanding and exercisable (December 31, 2020 – 3,488,965).
					The amendments to the debentures were accounted for as a settlement of the previous debt and replacement by a new financial liability. On September 30, 2020, the carrying amount of the previous debt of $47,264 was replaced by a new financial liability with a fair value of $42,231, calculated using the present value of future cash flows discounted at the prevailing market interest rate. The difference between the face value of the new financial liability and its fair value is recorded against the principal balance and accreted using the effective interest rate method over the term of the debentures. Additionally, the Debenture Warrants issuable at September 30, 2020, were initially recognized as a separate liability with a fair value of $3,500 using the Black Scholes valuation model. The $1,533 difference in carrying value of the previous debt and fair value of the new financial liabilities was recorded as a $767 reduction to debenture interest expense and other financing expense to revise interest owing, using the amended interest rate, and a $765 gain on debenture amendment recorded to other non-operating (income) expenses in the consolidated statement of operations and comprehensive loss.
					Upon issuance of the Debenture Warrants on October 7, 2020, the financial liability was converted into an equity instrument and remeasured to a fair value of $3,508 recognized in equity as of that date with the difference recorded as a gain to the consolidated statement of operations and comprehensive loss.
					During the year ended December 31, 2020, transaction costs of $169 related to amendments were recorded in other non-operating (income) expenses in the consolidated statement of operations and comprehensive loss.
					Interest expense on the debentures related to the coupon payment is included in debenture interest and other financing expense, and the portion of expense related to accretion of the discount is recorded separately to accretion related to debentures in the consolidated statement of operations and comprehensive loss.
					The Company’s debentures balance includes the following:
						December 31,			December 31,

							2021	2020
					Principal balance		41,375	43,442
					Discount		(2,323)	(3,575)
							39,052	39,867
					Interest payable		742		791
							39,794	40,658


			F-34

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				14.	Debentures (Continued from previous page)
					The debenture principal repayments will be made according to the following schedule and are payable in either cash or Common Shares at Mogo’s option:

						Principal
						component	Principal

						of quarterly	due on
						payment	maturity	Total
					2022				2,705			—	2,705
					2023				3,296		16,421	19,717
					2024					941	18,012	18,953
									6,942		34,433	41,375

				15.	Convertible debentures
					On June 6, 2017, the Company issued 10% convertible debentures of $15,000 aggregate principal amount at a price of one thousand dollars per debenture, with a maturity date of May 31, 2020. On May 27, 2020, the Company amended the remaining $12,621 principal value of convertible debentures (the “Amendments”) to include, among other things, an extension of the maturity date to May 31, 2022, and a reduction in the conversion price of the principal by 45% from $5.00 to $2.75 per Common Share (the “Conversion Price”).
					On December 10, 2020, the Company gave notice to the holders of the convertible debentures that it was exercising its early conversion right such that the convertible debentures would be converted to Common Shares at the Conversion Price on or about January 11, 2021.
					On January 11, 2021, the Company converted all of the outstanding balance related to principal and interest of convertible debentures into 3,178,930 Common Shares.
			F-35

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				15.	Convertible debentures (Continued from previous page)
					The following table summarizes the carrying value of the convertible debentures as at December 31, 2021:
							Net book	Net book
							value,	value,
						December 31,	December

							2021	31, 2020
					Convertible debentures		8,683	11,963
					Transaction costs			—	(755)
					Net proceeds		8,683	11,208
					Conversion of debentures to equity		(8,683)	(3,754)
					Accretion in carrying value of debenture liability			—	1,228
					Accrued interest			100	684
					Interest converted in shares and paid		(100)		(615)
								—	8,751

				16.	Derivative financial liabilities
					On February 24, 2021, in connection with a registered direct offering, the Company issued stock warrants to investors to purchase up to an aggregate of 2,673,268 Common Shares at an exercise price of US$11.00 at any time prior to three and a half years following the date of issuance.
					On December 13, 2021, as part of a registered direct offering, the Company issued stock warrants to investors to purchase up to an aggregate of 3,055,556 Common Shares at an exercise price of US$4.70 at any time prior to three and a half years following the date of issuance.
					The stock warrants are classified as a derivative liability under IFRS by the sole virtue of their exercise price being denominated in USD. As such, the warrants are subject to revaluation under the Black Scholes model at each reporting date, with gains and losses recognized to the consolidated statement of operations and comprehensive loss.
			F-36

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				16.	Derivative financial liabilities (Continued from previous page)
					In the event that these warrants are fully exercised, the Company would receive cash proceeds of US$43,767, with the balance of the liability reclassified to equity at that time. If the warrants were to expire unexercised, then the liability would be extinguished through a gain in the consolidated statement of operations and comprehensive loss.
						December 31,	December 31,

							2021	2020

					Balance, December 31, 2020		—	—
					Stock warrants issued		23,986	—
					Change in fair value due to revaluation of derivative financial liabilities		(11,276)	—
					Change in fair value due to foreign exchange		(22)	—
					Balance, December 31, 2021		12,688	—

					Details of the derivative financial liabilities as at December 31, 2021 are as follows:

									Warrants	Weighted
						Outstanding	Average
						and exercisable	Exercise
							(000s)	Price $
					Balance, December 31, 2020		—				—
					Warrants granted		5,729				9.69
					Balance, December 31, 2021		5,729				9.69

					The 5,728,824 warrants outstanding noted above have an expiry date between August 2024 and June 2025.
					The fair value of the warrants outstanding was estimated using the Black-Scholes option pricing model with the following assumptions:

						As at	As at
						December 31,	December 31,

						2021	2020
					Risk-free interest rate						0.97%	—
					Expected life						2.7 - 3.5 years	—
					Expected volatility in market price of shares						102% - 109%	—
					Expected dividend yield								0%	—
					Expected forfeiture rate								0%	—

			F-37

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				17.	Income taxes
					(a)	Provision for income taxes
					The major components of provision for income taxes are as follows:

							2021	2020
					Current tax expense		133	—
					Deferred tax recovery		(365)	—
					Income tax recovery		(232)	—

					The reconciliation of the provision for income taxes to the amount of income taxes calculated using statutory income tax rates applicable to the Company in Canada is as follows:

							2021	2020
					Canadian federal and provincial recovery of income taxes using statutory rate of 27% (2020 – 27%,)
							(9,029)	(3,630)
					Change in unrecognized deductible temporary differences and unused tax losses
							6,538	3,093
					Permanent differences and other		2,259	537
					Income tax recovery		(232)	—

					(b)	Deferred tax assets
					As at December 31, the Company’s deferred tax assets are as follows:

							2021	2020
					Non-capital losses		11,856		222
					Property and equipment		93	—
					Intangible assets		2	—

							11,951	222

					(c)	Deferred tax liabilities
					As at December 31, the Company’s deferred tax liabilities are as follows:

							2021	2020
					Intangible assets		9,792	—
					Digital assets and derivatives		3,660	—
					Equity investments		287	—
					Deferred cost		380	222
							14,119	222

			F-38

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				17.	Income taxes (Continued from previous page)
					(d)	Deductible temporary differences and unused tax losses
					Deferred tax assets have not been recognized because it is not probable that future taxable profit will be available against which the Company can use the benefits therefrom.
					As at December 31, the Company has deductible temporary differences for which no deferred tax assets are recognized as follows:

							2021	2020
					Unused tax losses		196,146	131,447
					'Property and equipment		4,012	2,946
					Right-of-use assets, net lease liability		578	438
					Intangible assets		18,071	10,346
					Debentures		394	433
					Convertible debentures		1,679	1,679
					Financing costs		5,021	1,496
					Research and development expenditures		2,555	1,437
					Investment in subsidiaries		3,395	—
					Other		—	2,245
							231,851	152,467

			F-39

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				17.	Income taxes (Continued from previous page)

					As at December 31, the Company’s non-capital losses expire as follows:

							2021	2020
					Expires 2024		549	610
					Expires 2025		777	936
					Expires 2026		1,822	2,112
					Expires 2027		6,885	4,863
					Expires 2028		5,486	2,064
					Expires 2029		6,913	4,237
					Expires 2030		5,616	3,698
					Expires 2031		4,139	1,470
					Expires 2032		9,031	3,772
					Expires 2033		10,053	6,065
					Expires 2034		14,810	7,416
					Expires 2035		23,420	9,680
					Expires 2036		28,317	18,713
					Expires 2037		29,488	20,450
					Expires 2038		29,512	20,214
					Expires 2039		26,524	24,977
					Expires 2040		15,153	169
					Expires 2041		23,113	—
							241,608	131,446

				18.	Geographic information
					(a)				Revenue
					Revenue presented below has been based on geographic location of customers.

							Year ended
						December 31,	December 31,

							2021	2020
					Canada		49,533	44,245
					Europe		7,287	—
					Other		699	—
					Total		57,519	44,245

			F-40

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				18.	Geographic information (Continued from previous page)
					(b)	Non-current assets
					Non-current assets presented below has been based on geographic location of the assets.

								Year ended
							December 31,	December 31,
								2021	2020
					Canada			255,315	42,128
					Europe			609	—
					Other			883	—
					Total			256,807	42,128

				19.	Expenses by nature and function
					The following table summarizes the Company’s operating expenses by nature:

								2021	2020
					Personnel expense			26,509	11,306
					Marketing			14,554	4,027
					Depreciation and amortization			12,736	8,414
					Stock-based compensation			10,838	1,371
					Hosting and software licenses			4,200	2,321
					Professional services			3,800	1,407
					Insurance and licenses			2,316	572
					Credit verification costs			1,990	1,651
					Premises			1,040	1,010
					Others			3,588	2,279
								81,571	34,358

					The following table summarizes the Company’s operating expenses by function including stock-based compensation and depreciation and amortization:

										For the years ended
							December 31,	December 31,
													2021	2020
					Technology and development						25,021	12,989
					Marketing						16,619	4,831
					Customer service and operations						15,870	6,185
					General and administration						24,061	10,353
					Total operating expenses						81,571	34,358

			F-41

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				20.	Revaluation (gains) and losses

						Year ended
						December 31,	December 31,
						2021	2020
					Change in fair value due to revaluation of derivative financial asset	(1,788)	—
					Change in fair value due to revaluation of derivative financial liabilities	(11,276)	8
					Realized gain on investment portfolio	(4,219)	—
					Unrealized loss on investment portfolio	942	2,249
					Unrealized exchange loss	670	155
					Unrealized gain on other receivable	—	(258)
					Losses related to property and equipment	—	272
						(15,671)	2,426

				21.	Other non-operating (income) expenses

						Year ended
						December 31,	December 31,
						2021	2020
					Gain on sale of loan book	—	(1,676)
					Credit facility prepayment and related expenses	—	2,608
					Convertible debenture early conversion	—	927
					Gain on amendment of debentures	—	(765)
					Government grants	(1,597)	(3,201)
					Direct offering transaction costs allocated to derivative financial liabilities
						2,260		—
					Acquisition costs, restructuring and other	3,437	938
						4,100	(1,169)
					On February 28, 2020, Mogo completed the Liquid Sale and recognized a gain on sale of loan book amounting to $1,676 (refer to Note 4). On the same date, Mogo repaid and extinguished its Credit facility – Liquid and recognized an early prepayment expense of $2,500 as a result of paying down the facility in advance of the maturity date (refer to Note 13). Mogo also recognized $108 of other related legal and termination expenses in connection with the transactions.
			F-42

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				21.	Other non-operating (income) expenses (Continued from previous page)
					Due to the outbreak of COVID-19, the Government of Canada announced the Canadian Emergency Wage Subsidy (“CEWS”) and Canadian Emergency Rent Subsidy (“CERS”) to support companies that have experienced a certain level of revenue decline in their operations. Mogo has determined that it qualifies for the CEWS and CERS and has made an accounting policy election to record the grant on a gross basis. During the year ended December 31, 2021, Mogo has recorded other non-operating income for CEWS and CERS of $1,007 and $163 respectively (2020 – $3,201 and $nil).
					Direct offering transaction costs allocated to derivative financial liabilities of $2,260 relate to the issuance of warrants with a USD denominated exercise price to investors. This resulted in the recognition of a derivative financial liability and the allocation of the associated transaction costs to other non-operating expenses (refer to Note 16 for further details).
				22.	Loss per share
					Loss per share is based on consolidated net loss for the year divided by the weighted average number of shares outstanding during the year. Diluted loss per share is computed in accordance with the treasury stock method and is based on the weighted average number of shares and dilutive share equivalents.
					The following reflects consolidated comprehensive loss and weighted average number of shares used in the basic and diluted loss per share computations:

						2021	2020
					Loss attributed to shareholders	(33,209)	(13,445)
					Basic weighted average number of shares (in 000s)	63,005	28,873
					Basic and diluted loss per share	(0.53)	(0.47)
					The outstanding stock options and warrants were excluded from the calculation of diluted loss per share because their effect is anti-dilutive.
				23.	Capital management
					The Company’s objectives when managing capital are to maintain financial flexibility in order to preserve its ability to meet financial obligations and continue as a going concern, and to deploy capital to provide future investment return to its shareholders.
					The Company sets the amount and type of capital required relative to its assessment of risk and makes adjustments when necessary to respond to changes to economic conditions, the risk characteristics of the underlying assets, and externally imposed capital requirements. In order to maintain or modify its capital structure, the Company may issue new shares, seek other forms of financing, or sell assets to reduce debt.
					The Company manages the following as capital:

						2021	2020
					Share capital	392,628	106,730
					Deficit	(148,263)	(115,054)
					Credit facilities	44,983	37,644
					Debentures	41,375	43,442
					Convertible debentures	—	8,751

			F-43

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				23.	Capital management (Continued from previous page)
					There have been no changes in the Company’s capital management objectives, policies and processes during the year. There are certain capital requirements of the Company resulting from the Company’s credit facility that include financial covenants and ratios. Management uses these capital requirements in the decisions made in managing the level and make-up of the Company’s capital structure. The Company was in compliance with all of the financial covenants as at December 31, 2021 and December 31, 2020.
					Changes in the share capital of the Company over the year ended December 31, 2021 are mainly attributed to the acquisitions of Carta, Moka and Fortification and investment in Coinsquare as disclosed in Note 24 and Note 25, respectively and financings completed as disclosed in Note 28a.

				24.	Business combination
					Acquisition of Carta:
					On January 25, 2021, Mogo completed the acquisition of all of the issued and outstanding securities of Carta in exchange for 10,000,000 Common Shares with a fair value of $54,800 based on Mogo's closing share price at the acquisition date.
					Acquisition-related costs of $379 not directly attributable to the issuance of the Common Shares are included in other non-operating (income) expenses in the consolidated statement of operations and comprehensive loss and in operating cash flows in the consolidated statement of cash flows.
					The acquisition is expected to significantly expand Mogo’s total addressable market by entering the global payments market, increase revenue scale and accelerate the growth of its high-margin subscription and transaction-based revenue, and strengthen the Company’s digital wallet capabilities which includes the development of a peer-to-peer payment solution.
					In the period January 25, 2021, to December 31, 2021, the operations of Carta contributed revenue of $7,970 and net loss of ($1,470). If the acquisition had occurred on January 1, 2021, management estimates that proforma revenue would have been $8,438 and proforma net loss from the operations of Carta would have been ($1,889) for the year ended December 31, 2021. In determining these amounts, management has assumed the fair value adjustments, determined, that arose on the date of business combination would have been the same if the acquisition had occurred on January 1, 2021.
			F-44

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				24.	Business combination (Continued from previous page)
					The following tables summarizes the fair value of consideration transferred, and its allocation to estimated fair values assigned to each major class of assets acquired and liabilities assumed at the January 25, 2021 acquisition date.

						January 25, 2021
					Assets acquired:
					Cash and cash equivalent	2,101
					Prepaids, and other receivables and assets	1,693
					Property and equipment	270
					Right-of-use assets	316
					Intangible assets - technology assets	12,900
					Intangible assets - customer relationships	4,800
					Intangible assets - software licenses	628
					Intangible assets - brand	1,000
					Goodwill	35,893
						59,601
					Liabilities assumed:
					Accounts payable, accruals & other	4,485
					Lease liabilities	316
						4,801

					Net assets acquired at fair value	54,800

					Share consideration	54,800

					The previously disclosed provisional allocation of consideration to estimated fair values has been updated based on fair valuations on the intangible assets acquired as of the date of acquisition. This resulted in a decrease of $3,600 to intangible assets previously disclosed at $22,928 and an increase of $3,600 in goodwill.
					Acquisition of Moka:
					On May 4, 2021, Mogo completed the acquisition of all of the issued and outstanding securities of Moka, a savings and investing app. Mogo has acquired all of the issued and outstanding shares of Moka in exchange for the issuance of 4,633,648 Common Shares with a fair value of $46,600 based on Mogo's closing share price at the acquisition date, and cash consideration of $4,508 pursuant to the terms of a share exchange agreement among Mogo, Moka and all of the shareholders of Moka. In connection with the acquisition of Moka, the Company also exchanged equity-settled share-based payments awards held by the employees of Moka for 366,343 equity-settled share-based payments awards of the Company.
					Acquisition-related costs of $536 not directly attributable to the issuance of the Common Shares are included in other non-operating (income) expenses in the consolidated statement of operations and comprehensive loss and in operating cash flows in the consolidated statement of cash flows.
			F-45

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				24.	Business combination (Continued from previous page)
					In the period May 4, 2021 to December 31, 2021, the operations of Moka contributed revenue of $5,977 and net loss of ($2,519). If the acquisition had occurred on January 1, 2021, management estimates that proforma revenue would have been $8,885 and proforma net loss from the operations of Moka would have been ($6,283) for the year ended December 31, 2021. In determining these amounts, management has assumed the fair value adjustments, determined, that arose on the date of business combination would have been the same if the acquisition had occurred on January 1, 2021.
					The acquisition is expected to bring differentiated saving and investing products to broaden Mogo’s wealth offering and accelerate the growth of its high-margin subscription and transaction-based revenue.
					The following tables summarizes the fair value of consideration transferred, and its allocation to estimated fair values assigned to each major class of assets acquired and liabilities assumed at the May 4, 2021 acquisition date.

						May 4, 2021
					Assets acquired:
					Cash and cash equivalent	4,377
					Prepaids, and other receivables and assets	2,455
					Property and equipment	59
					Intangible assets - technology assets	8,100
					Intangible assets - customer relationships	4,100
					Intangible assets - regulatory licenses	6,500
					Goodwill	33,517
						59,108
					Liabilities assumed:
					Accounts payable, accruals & other	5,293
					Deferred tax liabilities	2,100
						7,393

					Net assets acquired at fair value	51,715

					Share consideration	47,207
					Cash consideration	4,508
					Total consideration transferred	51,715

					The previously disclosed provisional allocation of consideration to estimated fair values has been updated based on fair valuations on the intangible assets acquired as of the date of acquisition. This resulted in a decrease of $4,500 to intangible assets previously disclosed at $23,200 and an increase of $6,687 in goodwill and $2,100 in deferred tax liabilities.
					Cash and cash equivalents included $2,756 of cash held in trust for funds under management.
			F-46

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				24.	Business combination (Continued from previous page)
					Acquisition of Fortification:
					On September 1, 2021, Mogo completed the acquisition of all of the issued and outstanding securities of Fortification, a Canadian registered investment dealer, in exchange for 75,000 Common Shares and cash of $1,144. Subsequent to the acquisition, Fortification was renamed to MogoTrade Inc.
					The acquisition allows Mogo to acquire the necessary licenses, registration and technology to accelerate the development of the Company’s planned commission free stock trading solution and continue to strengthen the Company’s digital wallet capabilities.
					The following tables summarizes the fair value of consideration transferred, and its allocation to estimated fair values assigned to each major class of assets acquired and liabilities assumed at the September 1, 2021 acquisition date.

						September 1, 2021
					Assets acquired:
					Cash and cash equivalent		13
					Prepaids, and other receivables and assets		628
					Intangible assets - regulatory licenses		300
					Goodwill		702
						1,643
					Liabilities assumed:
					Accounts payable, accruals & other		23
					Deferred tax liabilities		80
							103

					Net assets acquired at fair value	1,540

					Share consideration		396
					Cash consideration	1,144
					Total consideration transferred	1,540

					The previously disclosed provisional allocation of consideration to estimated fair values has been updated based on fair valuations on the intangible assets acquired as of the date of acquisition. This resulted in a decrease of $400 to intangible assets previously disclosed at $700 and an increase of $480 in goodwill and $80 in deferred tax liabilities.
			F-47

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				24.	Business combination (Continued from previous page)
					Goodwill and indefinite-life intangible assets:
					Goodwill and indefinite-life intangible assets are attributed to the group of CGUs to which they relate. As at December 31, 2021, the carrying value of goodwill attributable to the Carta CGU and remaining Mogo related entities CGU was $35,893 and $34,219 respectively. As at December 31, 2021, the carrying value of indefinite-life intangible assets attributable to the Carta CGU was $1,000. Impairment testing was performed as at December 31, 2021. The impairment test consisted of comparing the carrying value of net assets within the CGU to the recoverable amount of that CGU as measured by discounting the expected future cash flows using a value in use approach.
					The cash flow projections include specific estimates for seven years and a terminal growth rate thereafter. The key assumptions used in the estimation of the recoverable amount for each CGU include a pre-tax discount rate of 16% and terminal growth rate of 10%. The discount rate was estimated based on a range of historical industry weighted average cost of capital and then applied to the operating CGU based on management’s discretion and expertise. The terminal growth rate was determined based on management’s estimate of long-term compound annual growth rates. Forecasted cash flows are estimated by considering past experience such as revenue and expenditures that would both respectively increase based on inflationary measures, estimated loan origination and volume growth, and expected future and current factors affecting the industry.
					No impairment charges to goodwill or indefinite-life intangible assets were recorded in the year ended December 31, 2021.
			F-48

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				25.	Investment accounted for using the equity method
					On April 16, 2021, the Company completed its initial strategic investment (the “Initial Investment”) in Coinsquare, a digital asset trading platform, pursuant to which Mogo has acquired 6,450,607 Coinsquare common shares, representing 19.99% ownership interest in Coinsquare, for total aggregate consideration of $55,359, comprising of a cash payment of $27,396 and the issuance of 2,807,577 Common Shares valued at $27,963 to Coinsquare and certain selling shareholders of Coinsquare. The transaction also included:
					•
						a right for Mogo to purchase 3,223,690 Coinsquare common shares from certain selling shareholders at $8.29 per Coinsquare common share (the “Call Option”), whereby Mogo has an option to pay the purchase consideration fully in Common Shares.
					•
						a right for these certain selling shareholders to require Mogo to purchase 3,223,690 Coinsquare common shares (the “Put Option”), whereby the Call Option and Put Option are subject to certain exercise conditions, and whereby the exercise of either one of the Call Option or the Put Option results in the immediate expiry of the another.
					•
						the issuance of a warrant to Mogo to acquire 7,240,665 additional Coinsquare common shares through treasury at an exercise price of $8.29 per warrant, subject to certain conditions and payable by Mogo at least 50% in cash and the remainder in Common Shares (the “Coinsquare Warrant”).
					On June 4, 2021, Mogo acquired an additional 5,412,222 common shares of Coinsquare which increased Mogo’s ownership in Coinsquare from 19.99% to approximately 36.74%, through two separate transactions executed on that day, specifically:
					•
						the exercise of the Call Option, to acquire 3,223,690 Coinsquare common shares from certain selling shareholders, with total consideration paid through the issuance of 2,791,904 Common Shares.
					•
						the purchase of 2,188,532 Coinsquare common shares from a selling shareholder pursuant to a share purchase agreement for a total consideration of 2,288,972 Common Shares that were issued in three equal tranches on June 4, July 4 and August 4, 2021 respectively.
					On June 15, 2021, Mogo purchased an additional 655,644 common shares of Coinsquare from a selling shareholder which increased Mogo’s ownership from 36.74% to approximately 38.77%, for total aggregate consideration of $8,523, consisting of a cash payment of $5,000 and the issuance of 378,774 Common Shares valued at $3,523. This transaction included a right for Mogo (the “New Call Option”) to purchase addition 1,100,000 Coinsquare shares under certain conditions, at an exercise price of $13.00 per Coinsquare common share. The New Call Option expired fully unexercised on October 13, 2021.
					The Company’s initial 19.99% position in Coinsquare and subsequent investments are accounted for using the equity method in the consolidated financial statements, effective as at the date of the Initial Investment on April 16, 2021, as Mogo participates in all significant financial and operating decisions of Coinsquare, even though it held just under 20% of the voting rights. Therefore, the Company has determined that it exerted significant influence over Coinsquare as at that date.
					The Company determined that the Call Option, Put Option, Coinsquare Warrant and New Call Option are classified as derivative financial instruments on the consolidated statement of financial position, fair valued using the Black-Scholes valuation model at initial recognition, and subsequently remeasured to fair value as at each reporting date. Any change in the fair value of these derivative financial instruments is recognized to revaluation gains (losses) in the consolidated statement of operations and comprehensive loss.
			F-49

Mogo Inc.

Notes to the Consolidated Financial Statements

(Expressed in thousands of Canadian dollars, except per share amounts)

For the years ended December 31, 2021 and 2020

25.

Investment accounted for using the equity method (Continued from previous page)

The following table shows an allocation breakdown of the total $55,359 Initial Investment between the 19.99% investment, the Call Option, the Put Option and the Coinsquare Warrant, and further reconciles the total revaluation gains (losses) recognized on the derivative instruments for the year ended December 31, 2021:

Call/Put

Initial

Initial fair

Option

Value at

Revaluation

recognition

value on

fair

December

(gains)

date

recognition

value at exercise

31, 2021

losses

Initial 19.99% investment

16-Apr-21

45,024

n/a

45,024

—

Call Option

16-Apr-21

3,931

5,513

—

(1,582)

Put Option

16-Apr-21

(5,696)

—

(5,696)

Coinsquare Warrants

16-Apr-21

12,100

n/a

7,866

4,234

Total - Initial Transaction

55,359

5,513

52,890

(3,044)

New Call Option

15-Jun-21

1,256

n/a

1,256

Total revaluation gains

(1,788)

Immediately prior to the exercise of Call Option on June 4, 2021, the Company fair valued its Call Option and Put Option to $5,513 and $nil respectively, and recorded revaluation gains of $1,582 and $5,696 respectively on these instruments in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2021. The exercise of Call Option resulted in the immediate expiry of the Put Option, accounted for through a derecognition of the Call Option and Put Option derivative assets from the consolidated statement of financial position and a corresponding increase to the investment in Coinsquare.

The fair value of the Coinsquare Warrant, Call Option, Put Option and New Call Option were estimated using the Black-Scholes option pricing model with the following assumptions:

As at

December 31,

2021

Risk-free interest rate

0.4%

Expected life

0.5 years

Expected volatility in market price of shares

71%

Expected dividend yield

Expected forfeiture rate

F-50

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				25.	Investment accounted for using the equity method (Continued from previous page)
					The following table summarizes the fair value of net assets and the Company’s share of net assets acquired:
							As at December 31, 2021

				Current assets			109,005
				Non-current assets			51,214
				Current liabilities			(60,381)
				Non-current liabilities			(32,904)
				Net assets			66,934
				Company's share of net assets - 38.77%			30,176
				Intangible assets			24,596
				Deferred tax liabilities			(4,151)
				Goodwill			53,200
				Carrying amount of interest in associate			103,821

						April 16, 2021 to December 31,

							2021
				Revenue			36,518

				Net income from continuing operations (100%)			7,710
				Post-tax loss from discontinued operations (100%)				(24)
				Other comprehensive loss (100%)				(52)
				Total comprehensive income (100%)			7,634
				Company's share of total comprehensive loss			(278)

				Initial investment in Coinsquare			45,026
				Step up investments in Coinsquare			59,073
				Total investments in Coinsquare			104,099
				Share of loss in associate			(278)
				Carrying amount of equity accounted investment			103,821

				Mogo's share of:
				Net income from continuing operations			1,211
				Post-tax loss from discontinued operations				(4)
				Other comprehensive income				(20)
				Amortization of intangible assets			(1,772)
				Amortization of deferred tax liabilities				307
				Total other comprehensive loss			(278)
			F-51

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				26.	Fair value of financial instruments
					The fair value of a financial instrument is the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants which takes place in the principal (or most advantageous) market at the measurement date. The fair value of a liability reflects its non-performing risk. Assets and liabilities recorded at fair value in the consolidated statement of financial position are measured and classified in a hierarchy consisting of three levels for disclosure purposes. The three levels are based on the priority of the inputs to the respective valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). An asset or liability's classification within the fair value hierarchy is based on the lowest level of significant input to its valuation. The input levels are defined as follows:
					•
						Level 1: Unadjusted quoted prices in an active market for identical assets and liabilities.
					•
						Level 2: Quoted prices in markets that are not active or inputs that are derived from quoted prices of similar (but not identical) assets or liabilities in active markets.
					•
						Level 3: Unobservable inputs that are supported by little or no market activity and are significant to the estimated fair value of the assets or liabilities.
					(a)	Valuation process
					The Company maximizes the use of quoted prices from active markets, when available. A market is regarded as active if transactions take place with sufficient frequency and volume to provide pricing information on an ongoing basis. Where independent quoted market prices are not available, the Company uses quoted market prices for similar instruments, other third-party evidence or valuation techniques.
					The fair value of financial instruments determined using valuation techniques include the use of recent arm’s length transactions and discounted cash flow analysis for investments in unquoted securities, discounted cash flow analysis for derivatives, third-party pricing models or other valuation techniques commonly used by market participants and utilize independent observable market inputs to the maximum extent possible.
					The use of valuation techniques to determine the fair value of a financial instrument requires management to make assumptions such as the amount and timing of future cash flows and discount rates and incorporate the Company’s estimate of assumptions that a market participant would make when valuing the instruments.
			F-52

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				26.	Fair value of financial instruments (Continued from previous page)
					(b)	Accounting classifications and fair values
					The following table shows the carrying amount and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy. During the year ended December 31, 2021 and December 31, 2020, there has not been any transfers between fair value hierarchy levels.

									Carrying amount		Fair value
								Financial
			asset at	Other
					December 31,2021							Mandatorily	amortized	financial
							Note					at FVTPL	cost		liabilities Total Level 1 Level 2 Level 3 Total
					Financial assets measured at fair value

					Investment portfolio
		18,088	—	— 18,088 1,785									— 16,303 18,088
					Derivative financial assets
							25
		7,866	—	—												7,866	—	— 7,866 7,866

		25,954	—	— 25,954
					Financial assets not measured at fair value

					Cash and cash equivalent
		—	69,208	— 69,208 69,208									—	— 69,208
					Loans receivable – current
							4	—	65,397	— 65,397										— 65,397	— 65,397
					Loans receivable – non-current
							4
		—	248	—								248					—	—	232			232
					Other receivables
		—	2,112	—												2,112	— 2,112	— 2,112

		— 136,965	— 136,965
					Financial liabilities measured at fair value

					Derivative financial liabilities
							16	12,688	—	— 12,688										— 12,688	— 12,688

		12,688	—	— 12,688
					Financial liabilities not measured at fair value

					Accounts payable and accruals

		—	—	20,783 20,783													— 20,783	— 20,783
					Credit facilities		13
		—	—	44,983 44,983													— 44,983	— 44,983
					Debentures		14
		—	—	39,794 39,794													— 39,794	— 39,794

		—	— 105,560 105,560

			F-53

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				26.	Fair value of financial instruments (Continued from previous page)
					(b)	Accounting classifications and fair values (Continued from previous page)

									Carrying amount						Fair value
		Financial
		asset at	Other
					December 31,2020	amortized	financial
							Note FVTPL				cost		liabilities Total Level 1 Level 2 Level 3 Total
					Financial assets measured at fair value


					Investment portfolio
												18,445	—	— 18,445										—	154 18,291 18,445
							18,445
			—	— 18,445
					Financial assets not measured at fair value

					Cash and cash equivalent
		—									12,119	— 12,119 12,119							—	— 12,119
					Loans receivable – current
							4	—								54,978	— 54,978									— 54,978	— 54,978
					Loans receivable – non-current
							4
		—	1,135	—												1,135	—	— 1,064 1,064

		—									68,232	— 68,232
					Financial liabilities not measured at fair value


					Accounts payable, accruals and other
								—	—	7,843											7,843	— 7,843	— 7,843
					Credit facilities		9
		—	—	37,644 37,644											— 37,644	— 37,644
					Debentures		10
		—	—	40,658 40,658											— 40,658	— 40,658
					Convertible debentures		11
		—	—	8,751												8,751	— 8,751	— 8,751

		—	—	94,896 94,896

					(c)	Measurement of fair values
					(i)	Valuation techniques and significant unobservable inputs
					The Company has been closely monitoring developments related to COVID-19, including the existing and potential impact on its investment portfolio. As a result of the ongoing and developing COVID-19 pandemic and its resulting impact on the global economy, the Company believes that there is increased uncertainty to input factors on fair value of our Level 3 investments, including revenue multiples, time to exit events and increased equity volatility.
			F-54

Mogo Inc.

Notes to the Consolidated Financial Statements

(Expressed in thousands of Canadian dollars, except per share amounts)

For the years ended December 31, 2021 and 2020

26.

Fair value of financial instruments (Continued from previous page)

(c)

Measurement of fair values (Continued from previous page)

(i)

Valuation techniques and significant unobservable inputs (Continued from previous page)

The following tables show the valuation techniques used in measuring Level 3 fair values for financial instruments in the consolidated statement of financial position, as well as the significant unobservable inputs used.

Inter-relationship between significant unobservable inputs and fair value

Significant unobservable inputs

Type

Valuation technique

Investment portfolio:

Equities -Unlisted

• Price of recent investments

• Third-party transactions • Revenue multiples • Balance sheets and last

• Increases in revenue

in the investee company

multiples increases fair value

• Implied multiples from

• Increases in equity volatility

recent transactions of the underlying investee companies

can increase or decrease fair value depending on class of shares held in the investee company

twelve-month revenues for certain of the investee companies

• Offers received by investee

• Equity volatility • Time to exit events

• Increases in estimated time

companies

• Revenue multiples derived

to exit event can increase or decrease fair value depending on class of shares held in the investee company

from comparable public companies and transactions

• Option pricing model

Partnership interest and others

• Adjusted net book value

• Net asset value per unit • Change in market pricing of

• Increases in net asset value

per unit or change in market pricing of comparable companies of the underlying investment made by the partnership can increase fair value

comparable companies of the underlying investments made by the partnership

Loan receivable – non-current

• Discounted cash flows:

• Expected timing of cash

• Changes to the expected

Considering expected prepayments and using management’s best estimate of average market interest rates with similar remaining terms.

flows

amount and timing of cash flow changes fair value

• Discount rate 12%

• Increases to the discount rate

can decrease fair value

Derivative financial assets

• Option pricing model

• Equity stock price and

• Increase in equity stock price

volatility

and volatility will increase fair value

F-55

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				26.	Fair value of financial instruments (Continued from previous page)
					(c)	Measurement of fair values (Continued from previous page)
					(i)	Valuation techniques and significant unobservable inputs (Continued from previous page)
					The following table presents the changes in fair value measurements of the Company’s investment portfolio recognized at fair value at December 31, 2021 and 2020 and classified as Level 3:

							December 31,	December 31,

								2021	2020
					Balance of Level 3 investments, opening			18,291	20,691
					Additions			3,555	150
					Disposal			(9,272)	—
					Unrealized exchange loss			(90)	(247)
					Realized gain on investment portfolio			4,120	—
					Unrealized gain (loss) on investment portfolio			(301)	(2,303)
					Balance of level 3 investments, end of period			16,303	18,291

					(ii)	Sensitivity analysis
					For the fair value of equity securities, reasonably possible changes at the reporting date to one of the significant unobservable inputs, holding other inputs constant, would have the following effects.

												Profit or loss
												Increase	Decrease
					Investment portfolio:
					December 31, 2021	Adjusted market multiple (5% movement)
										920	(920)

					December 31, 2020	Adjusted market multiple (5% movement)
										937	(937)
			F-56

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				27.	Nature and extent of risk arising from financial instruments
					Risk management policy
					In the normal course of business, the Company is exposed to financial risk that arises from a number of sources. Management’s involvement in operations helps identify risks and variations from expectations. As a part of the overall operation of the Company, Management takes steps to avoid undue concentrations of risk. The Company manages the risks as follows:
					Credit risk
					Credit risk is the risk of financial loss to the Company if a customer or counter-party to a financial instrument fails to meet its contractual obligations and arises primarily from the Company’s loans receivable. The maximum amount of credit risk exposure is limited to the gross carrying amount of the loans receivable disclosed in these consolidated financial statements.
					The Company acts as a lender of unsecured consumer loans and lines of credit and has little concentration of credit risk with any particular individual, company or other entity, relating to these services. However, the credit risk relates to the possibility of default of payment on the Company’s loans receivable. The Company performs on-going credit evaluations, monitors aging of the loan portfolio, monitors payment history of individual loans, and maintains an allowance for loan loss to mitigate this risk.
					The credit risk decisions on the Company’s loans receivable are made in accordance with the Company’s credit policies and lending practices, which are overseen by the Company’s senior management. Credit quality of the customer is assessed based on a credit rating scorecard and individual credit limits are defined in accordance with this assessment. The consumer loans receivable are unsecured. The Company develops underwriting models based on the historical performance of groups of customer loans which guide its lending decisions. To the extent that such historical data used to develop its underwriting models is not representative or predictive of current loan book performance, the Company could suffer increased loan losses.
					The Company cannot guarantee that delinquency and loss levels will correspond with the historical levels experienced and there is a risk that delinquency and loss rates could increase significantly.
					Liquidity risk
					Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due or will not receive sufficient funds from its third-party lenders to advance to the Company’s customers. The Company manages all liquidity risk through maintaining a sufficient working capital amount through daily monitoring of controls, cash balances and operating results. The Company’s principal sources of cash are funds from operations, which the Company believes will be sufficient to cover its normal operating and capital expenditures.
			F-57

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				27.	Nature and extent of risk arising from financial instruments (Continued from previous page)
					The Company’s accounts payable and accruals are substantially due within 12 months. The maturity schedule of the Company’s credit facilities, debentures, and convertible debentures are described below. Management’s intention is to continue to refinance any outstanding amounts owing under the credit facilities and debentures and will consider the issuance of shares in lieu of amounts owing under the convertible debentures, in each case as they become due and payable. The debentures are subordinated to the credit facilities which has the effect of extending the maturity date of the debentures to the later of contractual maturity or the maturity date of credit facilities. See Note 14 for further details.
					($000s)	2022	2023	2024	2025	2026	Thereafter
					Commitments - operational
					Lease payments	1,308	1,297	1,206	1,240	1,255	1,472
					Trade payables	6,260	—	—	—	—		—
					Accrued wages and other expenses
						14,523	—	—	—	—		—
					Interest – Credit facilities (Note 13)
						3,644	3,644	3,644	1,822	—		—
					Interest – Debentures (Note 14)
						2,952	1,502	—	—	—		—
					Purchase obligations	1,052	—	—	—	—		—
						29,739	6,443	4,850	3,062	1,255	1,472
					Commitments – principal repayments

					Credit facility (Note 13)	—	—	—	44,983	—		—
					Debentures (Note 14)	2,705	19,717	18,953	—	—		—
						2,705	19,717	18,953	44,983	—		—
					Total contractual obligations
						32,444	26,160	23,803	48,045	1,255	1,472


			F-58

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				27.	Nature and extent of risk arising from financial instruments (Continued from previous page)
					Market risk
					Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments that could be affected by market risk include cash, investment portfolio, credit facilities, debentures, derivative financial assets and derivative financial liabilities.
					Interest rate risk
					Changes in market interest rates may have an effect on the cash flows associated with some financial assets and liabilities, known as cash flow risk, and on the fair value of other financial assets or liabilities, known as price risk. The Company is exposed to interest rate risk primarily relating to its credit facilities that bear interest fluctuating with LIBOR. The Credit facility does not have a LIBOR floor. As at December 31, 2021, LIBOR is 0.11% (December 31, 2020 – 0.34%). A 50-basis point change in LIBOR would increase or decrease credit facility interest expense by $225.
					The debentures have fixed rates of interest and are not subject to interest rate risk.
					Currency risk
					Currency risk is the risk that changes in foreign exchange rates may have an effect on future cash flows associated with financial instruments. The Company is exposed to foreign currency risk on the following financial instruments denominated in U.S. dollars. A 5% increase or decrease in the U.S. dollar exchange rate would increase or decrease the unrealized exchange gain (loss) by $32,196.
						December 31,	December 31,
					(‘$000 in US$)		2021		2020
					Cash		29,032	107
					Investment portfolio		9,954	6,171
					Derivative financial liabilities		(10,008)	—
					Debentures		(4,792)	(5,105)

					Other price risk
					Other market price risk is the risk that the fair value of the financial instrument will fluctuate as a result of changes in market prices (other than those arising from interest rate risks or currency risk), whether caused by factors specific to an individual investment or its issuers or factors affecting all instruments traded in the market. Our investment portfolio comprises of non-listed closely held equity instruments which have minimal exposure to market prices. The valuation of our investment portfolio is conducted on a quarterly basis.
			F-59

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				28.	Equity
					(a)	Share capital
					The Company’s authorized share capital is comprised of an unlimited number of Common Shares with no par value and an unlimited number of preferred shares issuable in one or more series. The Board is authorized to determine the rights and privileges and number of shares of each series.
					As at December 31, 2021, there are 76,390,043 Common Shares and no preferred shares issued and outstanding.
					During the year ended December 31, 2021, the Company completed the sale of 1,524,759 Common Shares as part of an ATM arrangement conducted under a prospectus supplement to the Company’s base shelf prospectus dated December 5, 2019. After deducting transaction costs, the net proceeds to the Company was $16,804.
					On February 24, 2021, the Company completed the sale of 5,346,536 Common Shares. The aggregate gross proceeds to the Company were approximately US $54,000 (CAD $67,718). After deducting transaction costs, the net proceeds to the Company were US $49,700 (CAD 62,833).
					On December 13, 2021, the Company completed the sale of 6,111,112 Common Shares. The aggregate gross proceeds to the Company were approximately US $27,500 (CAD 35,175). After deducting transaction costs, the net proceeds to the Company were US $25,300 (CAD 32,555).
			F-60

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				28.	Equity (Continued from previous page)
					(b)	Treasury share reserve
					The treasury share reserve comprises the cost of Common shares held by the Company. At December 31, 2021, the Company held 303,816 of its own Common Shares in reserve (December 31, 2020 - nil).
					(c)	Options
					The Company has a stock option plan (the “Plan”) that provides for the granting of options to directors, officers, employees and consultants. The exercise price of an option is set at the time that such option is granted under the Plan. The maximum number of Common shares reserved for issuance under the Plan is the greater of i) 15% of the number of Common shares issued and outstanding of the Company and ii) 3,800,000. As a result of a business combination with Difference Capital Financial Inc. completed on June 21, 2019, there are an additional options issued , which were granted pursuant to the Company’s prior stock option plan (the “Prior Plan”). As at December 31, 2021, there are 97,000 of these options outstanding that do not contribute towards the maximum number of Common Shares reserved for issuance under the Plan as described above.
					Each option converts into one Common Share of the Company upon exercise. No amounts are paid or payable by the recipient on receipt of the option. The options carry neither right to dividends nor voting rights. Options may be exercised at any time from the date of vesting to the date of expiry. Options issued under the Plan have a maximum contractual term of eight years, and options issued under the Prior Plan have a maximum contractual term of ten years.
					A summary of the status of the stock options and changes in the period is as follows:

	Weighted
							Average
							Grant	Weighted	Weighted
			Options				Date	Average	Options	Average
			Outstanding				Fair	Exercise	Exercisable	Exercise
				(000s)						Value $	Price $	(000s)	Price $
					Balance, December 31, 2019		3,697							—	4.05	2,833	4.12
					Options granted		1,988						1.45		2.47	—		—
					Exercised		(276)							—	1.59	—		—
					Forfeited		(432)							—	2.86	—		—
					Balance, December 31, 2020		4,977							—	3.07	2,965	3.47
					Options granted		5,410						4.76		7.47	—		—
					Exercised		(810)							—	1.77	—		—
					Forfeited		(653)							—	6.24	—		—
					Balance, December 31, 2021		8,924							—	4.64	3,036	3.93

					The above noted options have expiry dates ranging from March 2029 to December 2029.
					Options granted during the year ended December 31, 2021 include 1,260,000 performance-based options granted to employees where vesting of these options is dependent on certain performance criteria being met and 366,343 equity-settled share-based payment awards of the Company issued to employees of Moka in connection with the acquisition of Moka.
			F-61

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				28.	Equity (Continued from previous page)
					(c)	Options (Continued from previous page)
					Options granted during the year ended December 31, 2021 include 17,500 options granted to non-employees (2020 - 150,000). These options measured at the fair value of corresponding services received, rather than using the Black-Scholes option pricing model.
					On June 10, 2020, Mogo modified the exercise price of 1,394,425 outstanding options previously granted to its employees to $1.56. During the year ended December 31, 2020, the incremental modification expense arising from the repricing of these options was $397.
					On December 23, 2021, Mogo modified the exercise price of 1,413,282 outstanding options previously granted to its employees to $4.42. During the year ended December 31, 2021, the incremental modification expense arising from the repricing of these options was $530.
					With the exception of performance-based stock options, the fair value of each option granted was estimated using the Black-Scholes option pricing model with the following assumptions:

								For the	For the
								year ended	year ended


							December 31,		December 31,
								2021	2020

				Risk-free interest rate			0.58% - 1.46% 0.32% - 0.39%

				Expected life				5 years	5 years
				Expected volatility in market price of shares				84% - 87%	72% - 77%
				Expected dividend yield				0%	0%
				Expected forfeiture rate				15%	15%
					These options generally vest either immediately or monthly over a three-four year period. On September 30, 2021, the Company granted performance-based stock options that vest monthly over a two year period starting January 1, 2022.
					Total share-based compensation costs related to options, replacement awards, and RSUs for the year ended December 31, 2021 were $10,838 (2020 - $1,371). Refer to Note 24 for further details on replacement awards.
			F-62

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				28.	Equity (Continued from previous page)
					(d)	Restricted share units
					RSUs are granted to executives and other key employees. The fair value of an RSU at the grant date is equal to the market value of one Common Share. Executives and other key employees are granted a specific number of RSUs for a given performance period based on their position and level of contribution. RSUs vest fully after three years of continuous employment from the date of grant and, in certain cases, if performance objectives are met as determined by the Board of Directors. When an RSU fully vests, the holder will receive a Common Share. The maximum number of shares which may be made subject to issuance under RSUs awarded under the RSU Plan is 500,000.
					Details of outstanding RSUs as at December 31, 2021 are as follows:

Number of

RSUs (000s)
					Balance, December 31, 2019			141
					Converted			(59)
					Expired			(5)
					Balance, December 31, 2020			77
					Converted			(30)
					Expired			(5)
					Balance, December 31, 2021			42

					(e)	Warrants

									Weighted	Weighted
	Warrants								Average	Warrants	Average
			Outstanding						Exercise	Exercisable	Exercise

	(000s)								Price $	(000s)	Price $
					Balance, December 31, 2019		1,196							2.96	598	2.96
					Warrants granted		4,829							1.98	—	—
					Warrants exercised		(990)							2.03	—	—
					Balance, December 31, 2020		5,035							1.80	4,386	1.88
					Warrants granted		573					11.25	—	—
					Warrants exercised		(3,618)							1.76	—	—
					Balance, December 31, 2021		1,990							4.60	1,757	5.04

					The 1,990,231 warrants outstanding noted above have expiry dates ranging from December 2022 to June 2025 and do not include the stock warrants accounted for as derivative financial liabilities discussed in Note 16.
					On October 7, 2020, Mogo issued 4,479,392 Debenture Warrants to its debenture holders in connection with the debenture amendments approved on September 30, 2020, at an exercise price of $2.03 per Debenture Warrant. The Debenture Warrants are exercisable at any time until December 31, 2022. As at December 31, 2021, 3,617,737 Debenture Warrants (2020 – 990,427) with a cash proceed of $6,375 (2020 - $2,011) were exercised into Common Shares. Refer to Note 14 for additional details.
			F-63

Mogo Inc.

Notes to the Consolidated Financial Statements

(Expressed in thousands of Canadian dollars, except per share amounts)

For the years ended December 31, 2021 and 2020

28.

Equity (Continued from previous page)

(e)

Warrants (Continued from previous page)

In connection with a marketing collaboration agreement with Postmedia Network Inc (“Postmedia”). dated January 25, 2016 and amended on January 1, 2018 and January 1, 2020 effective until December 31, 2022, Mogo issued Postmedia a total of 1,546,120 warrants, of which 1,312,787 have been exercised as at December 31, 2021 for cash proceeds of $1,696. The remaining warrants will vest in equal installments until December 31, 2022. Subsequent to an amendment entered into on June 3, 2020, the exercise price of the warrants was reduced to $1.29. Under the agreement, Postmedia also receives a quarterly payment of $263.

Warrants issued to investors are denominated in a currency other than the functional currency of the Company therefore do not meet the definition of an equity instrument and are classified as derivative financial liabilities. Refer to Note 16 for more details.

During the year ended December 31, 2021, the Company also issued 572,883 warrants in connection with broker services rendered on the offering.

The fair value of the warrants outstanding was estimated using the Black-Scholes option pricing model with the following assumptions:

For the

year ended

December 31,

2021

2020

Risk-free interest rate

0.25% - 0.95%

0.32% - 0.39%

Expected life

3 - 3.5 years

3.5 - 7 years

Expected volatility in market price of shares

93% - 102%

50% - 77%

Expected dividend yield

Expected forfeiture rate

F-64

Mogo Inc.
	Notes to the Consolidated Financial Statements
		(Expressed in thousands of Canadian dollars, except per share amounts)
	For the years ended December 31, 2021 and 2020
				29.	Cash flow changes from financing activities
					Details of changes in financing activities for the year ended December 31, 2021 are as follows:

										Non-cash changes
						January 1,		Cash	Conversion/							Foreign	Fair Value/	December 31,
							2021	flows	Other						exchange	Amortization	2021
					Share capital		106,730	121,238	164,660					—	—	392,628
					Lease liability		4,336				(660)	272								—	—	3,948
					Credit facility		37,644	7,339	—							—	—	44,983
					Debentures		40,658	(2,053)	(49)						(14)			1,252	39,794
					Convertible debentures
							8,751	—	(8,751)							—	—	—
					Total		198,119	125,864	156,132				(14)			1,252	481,353

					Details of changes in financing activities for the year ended December 31, 2020 are as follows:

								Non-cash changes
						January
		1,									Cash	Conversion/					Foreign	Fair Value/	December 31,
							2020				flows	Other							exchange	Amortization	2020
					Share capital		94,500				2,568	9,662								—	—	106,730
					Lease liability		5,208				(444)	(428)								—	—	4,336
					Credit facility		76,472	(39,050)	—							—	222	37,644
					Debentures		44,039				(399)	(3,175)							(116)	309	40,658
					Convertible debentures		12,373	—	(4,265)							—	643	8,751
					Total	232,592 (37,325)	1,794						(116)			1,174	198,119

			F-65