Enhanced Investments - Financial Portal

Published: 2022-05-12

Exhibit 99.1
		Page
			Interim Condensed Consolidated Statement of Financial Position as at March 31, 2022 and December 31, 2021	F-2
			Interim Condensed Consolidated Statement of Operations and Comprehensive Loss for the three months ended March 31, 2022 and 2021
	F-3
			Interim Condensed Consolidated Statement of Changes in Equity (Deficit) for the three months ended March 31, 2022 and 2021
	F-4
			Interim Condensed Consolidated Statement of Cash Flows for the three months ended March 31, 2022 and 2021	F-5
			Notes to the Interim Condensed Consolidated Financial Statements	F-6

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

			Note				2022	2021
						Assets
						Cash and cash equivalent			53,864	69,208
						Digital assets	6			1,620	1,718
						Loans receivable, net	4		56,925	55,832
						Prepaid expenses, and other receivables and assets			13,408	10,302
						Investment portfolio	17		19,297	18,088
						Investment accounted for using the equity method			98,258				103,821
						Property and equipment	7			1,355	1,186
						Right-of-use assets				3,255	3,430
						Intangible assets	8		51,790	52,304
						Derivative financial assets	16			7,874	7,866
						Goodwill			70,112				70,112
						Total assets			377,758	393,867

						Liabilities
						Accounts payable, accruals and other			21,498	20,783
						Lease liabilities				3,779	3,948
						Credit facility	9		45,975	44,983
						Debentures	10		39,510	39,794
						Derivative financial liabilities	11		10,414	12,688
						Deferred tax liability				1,791	1,894
						Total liabilities			122,967	124,090

						Equity
						Share capital	19a		392,674	392,628
						Contributed surplus			28,031	24,486
						Revaluation reserve	6			370		468
						Foreign currency translation reserve				849		458
						Deficit			(167,133)	(148,263)
						Total equity			254,791	269,777
						Total equity and liabilities			377,758	393,867

						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 interim condensed consolidated financial statements.
F-2

	Mogo Inc.
		Interim Condensed Consolidated Statement of Operations and Comprehensive Loss
	(Unaudited)
(Expressed in thousands of Canadian Dollars, except per share amounts)
						Three months ended
			March 31,	March 31,
					Note	2022	2021
					Revenue
					Subscription and services					10,659	6,002
					Interest revenue					6,596	5,418
									12a	17,255	11,420
					Cost of revenue
					Provision for loan losses, net of recoveries				4	2,898	1,535
					Transaction costs					2,039	412
										4,937	1,947
					Gross profit					12,318	9,473
					Operating expenses
					Technology and development					3,346	2,218
					Marketing					4,676	3,037
					Customer service and operations					4,021	2,162
					General and administration					5,820	3,383
					Stock-based compensation				19c	3,611	557
					Depreciation and amortization				7,8	3,180	2,418
					Total operating expenses				13	24,654	13,775
					Loss from operations					(12,336)	(4,302)
					Other expenses (income)
					Credit facility interest expense				9	933	996
					Debenture and other financing expense				5,10	810	952
					Accretion related to debentures and convertible debentures				10	309	310
					Share of loss in investment accounted for using the equity method				16	5,563	—
					Revaluation gains				14	(1,148)	(5,262)
					Other non-operating expenses				15	143	1,511
										6,610	(1,493)
					Net loss before tax					(18,946)	(2,809)
					Income tax (recovery) expense							(76)	8
					Net loss					(18,870)	(2,817)
					Other comprehensive income:
					Items that will not be reclassified subsequently to profit or loss:
					Unrealized revaluation (loss) gain on digital assets				6			(98)	576
					Items that are or may be reclassified subsequently to profit or loss:
					Foreign currency translation reserve gain					391	288
					Other comprehensive income					293	864
					Total comprehensive loss					(18,577)	(1,953)
					Net loss per share
					Basic loss per share					(0.25)	(0.06)
					Diluted loss per share					(0.25)	(0.06)
					Weighted average number of basic common shares (in 000s)					76,694	45,957
					Weighted average number of fully diluted common shares (in 000s)		76,694	45,957

					The accompanying notes are an integral part of these interim condensed consolidated financial statements.
F-3

	Mogo Inc.
Interim Condensed Consolidated Statement of Changes in Equity (Deficit)
	(Unaudited)
		(Expressed in thousands of Canadian Dollars, except share amounts)
						Foreign
						currency
				Number of	Share	Contributed					translation	Revaluation
					shares (000s)	capital	surplus			reserve	reserve	Deficit	Total
			Balance, December 31, 2021					76,391	392,628	24,486				458			468	(148,263)	269,777
			Net loss					—	—		—					—		—	(18,870)	(18,870)
			Foreign currency translation reserve					—	—		—				391			—	—	391
			Revaluation reserve (Note 6)					—	—		—					—		(98)	—		(98)
			Stock-based compensation (Note 19c)					—	—		3,611					—		—	—	3,611
			Options and restricted share units (“RSUs”) exercised or converted
								60	46		(66)					—		—	—		(20)

			Balance, March 31, 2022					76,451	392,674	28,031				849			370	(167,133)	254,791

						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					—	—		—					—		—	(2,817)	(2,817)
			Foreign currency translation reserve					—	—		—				288			—	—	288
			Revaluation reserve (Note 6)					—	—		—					—		576	—	576
			Stock based compensation (Note 19c)					—	—		557					—		—	—	557
			Options and RSUs exercised or converted
								507	1,651	(816)					—		—	—	835

			Shares issued – ATM arrangement, net					1,525	17,315	—					—		—	—	17,315
			Shares issued – Bought deal financing					5,347	47,122													47,122
			Shares issued on acquisition of Carta					10,000	54,800	—					—		—	—	54,800
			Shares issued – Convertible debentures					3,179	8,783	—					—		—	—	8,783
			Warrants issued for broker services					—	—		1,410										1,410
			Warrants exercised (Note 19e)					3,375	7,498	(1,615)					—		—	—	5,883
			Amortization of warrants (Note 19e)					—	—		269					—		—	—	269
			Balance, March 31, 2021					56,664	243,899	13,365				288			576	(117,871)	140,257

			The accompanying notes are an integral part of these interim condensed consolidated financial statements.
F-4

	Mogo Inc.
		Interim Condensed Consolidated Statement of Cash Flows
	(Unaudited)
			(Expressed in thousands of Canadian Dollars)
								Three months ended
				March 31,	March 31,
						Note				2022	2021
							Cash provided by (used in) the following activities:
							Operating activities
									Net loss					(18,870)	(2,817)
									Items not affecting cash:
									Depreciation and amortization					3,180	2,418
									Postmedia warrant expenses									—	269
									Provision for loan losses		4			3,089	1,861
									Credit facility and debenture interest expense					1,743	1,948
									Accretion related to debentures and convertible debentures		10			309	310
									Share of loss from investment in associate		16			5,563	—
									Stock-based compensation expense		19c			3,611	557
									Revaluation gains		14			(1,148)	(5,262)
									Other non-operating expenses									—	325
									Income tax recovery on deferred tax liability									(76)	—
												(2,599)	(391)
									Changes in:
									Net issuance of loans receivable					(4,181)	(1,021)
									Prepaid expenses, and other receivables and assets					(3,031)	(297)
									Accounts payable, accruals and other					178	(142)
							Cash used in operating activities					(9,633)	(1,851)
							Interest paid					(1,731)	(1,932)
							Income taxes paid									(27)	—
							Net cash used in operating activities					(11,391)	(3,783)

							Investing activities
									Cash acquired upon acquisition of subsidiary									—	2,101
									Cash invested in investment portfolio		17			(1,774)	(95)
									Purchases of property and equipment		7			(277)	(98)
									Investment in digital assets		6							—	(750)
									Investment in intangible assets		8			(2,384)	(1,183)
							Net cash used in investing activities					(4,435)	(25)

							Financing activities
									Lease liabilities – principal payments					(169)	(141)
									Repayments on debentures		10			(517)	(502)
									Advance (repayments) on credit facilities		9			991	(168)
									Proceeds from issuance of common shares, net of transaction costs									—	81,285
									Proceeds from exercise of warrants									—	5,883
									Proceeds from exercise of options									—	281
							Net cash provided by financing activities					305	86,638

							Net (decrease) increase in cash and cash equivalent					(15,521)	82,830
							Effect of exchange rate fluctuations					177	518
							Cash and cash equivalent, beginning of period					69,208	12,119
							Cash and cash equivalent, end of period					53,864	95,467

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

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
(Unaudited)
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three months ended March 31, 2022 and 2021
				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 first quarter of 2022, the Canadian economy continued to experience 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 the Company’s 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 makes estimates and assumptions in preparing the interim condensed 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 judgements 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 its 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 interim condensed consolidated financial statements in future periods.
			F-6

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
(Unaudited)
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three months ended March 31, 2022 and 2021
				2.	Basis of presentation
					Statement of compliance
					These interim condensed consolidated financial statements have been prepared in accordance with International Accounting Standards ("IAS") 34, Interim Financial Reporting. The policies applied in these interim condensed consolidated financial statements were based on IFRS issued and outstanding at March 31, 2022.
					The Company presents its interim condensed consolidated statement of financial position on a non-classified basis in order of liquidity.
					These interim condensed consolidated financial statements were authorized by the Board of Directors (the “Board”) to be issued on May 12, 2022.
					These interim condensed 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 collectively formed a judgment that the Company has adequate resources to continue as a going concern for the foreseeable future, which Management have 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 interim condensed 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 9, 10, and 18 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 interim condensed consolidated financial statements.
					Functional and presentation currency
					These interim condensed 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. 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).
			F-7

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
(Unaudited)
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three months ended March 31, 2022 and 2021
				3.	Significant accounting policies
					The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Company’s annual consolidated financial statements for the year ended December 31, 2021.
					Significant accounting judgements, estimates and assumptions
					The preparation of the interim condensed consolidated financial statements requires management to make estimates, assumptions and judgments that affect the reported amount of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amount of revenues and expenses during the period. The critical accounting estimates and judgments have been set out in the notes to the Company’s consolidated financial statements for the year ended December 31, 2021.
					New and amended standards and interpretations
					Certain new or amended standards and interpretations became effective on January 1, 2022, but do not have an impact on the interim condensed consolidated financial statements of the Company. The Company has not adopted any standards or interpretations that have been issued but are 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 March 31, 2022 and December 31, 2021 are as follows:

						As at	As at
							March 31,	December 31,
						2022	2021
					Current (terms of one year or less)	67,276	65,397
					Non-current (terms exceeding one year)	151		248
						67,427	65,645

			F-8

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
(Unaudited)
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three months ended March 31, 2022 and 2021
				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 – Financial Instruments expected credit loss (“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 March 31, 2022
					Risk Category	Days past due		Stage 1			Stage 2	Stage 3	Total
					Strong	Not past due		54,690				—	—	54,690
					Lower risk	1-30 days past due		2,664				—	—	2,664
					Medium risk	31-60 days past due		—			1,342	—	1,342
					Higher risk	61-90 days past due		—			955	—			955
						91+ days past due or bankrupt
					Non-performing			—				—	7,776	7,776

						Gross loans receivable		57,354			2,297	7,776	67,427
						Allowance for loan losses	(5,131)			(1,191)	(4,180)	(10,502)
						Loans receivable, net		52,223			1,106	3,596	56,925


									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

			F-9

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
(Unaudited)
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three months ended March 31, 2022 and 2021
				4.	Loans receivable (Continued from previous page)
					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 $244 lower and $1,227 higher than the reported allowance for credit losses as at March 31, 2022, respectively (December 31, 2021 – $630 lower and $705 higher, respectively).
					Allowance for loan losses
									Three	Three
									months	months
									ended	Year ended	ended
						March 31,	December	March 31,
									2022	31, 2021	2021

					Balance, beginning of period				9,813	8,886	8,886
					Provision for loan losses
					Originations				591	3,263	511
					Repayments				(256)	(1,245)	(360)
					Re-measurement				2,754	6,458	1,710
					Charge offs				(2,400)	(7,549)	(1,565)
					Balance, end of period				10,502	9,813	9,182

					The provision for loan losses in the interim condensed consolidated statement of operations and comprehensive loss is recorded net of recoveries for the three months ended March 31, 2022 of $191 (December 31, 2021 – $936 and three months ended March 31, 2021 – $326 ).
				5.	Related party transactions
					Related party transactions during the three months ended March 31, 2022 include transactions with debenture holders that incur interest. The related party debentures balance as at March 31, 2022 totaled $318 (December 31, 2021 – $322). The debentures bear annual coupon interest of 8.0% (December 31, 2021 – 8.0%) with interest expense for the three months ended March 31, 2022 totalling $6 (three months ended March 31, 2021 – $7). 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.
			F-10

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
(Unaudited)
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three months ended March 31, 2022 and 2021
				6.	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 March 31, 2022:

							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 $ 57,110 $ 1,018 $								750 $	268
					Ethereum (ETH)		145.99	3,425			4,125	602			500	102
														1,620	1,250	370

					During the three months ended March 31, 2022, the Company recorded a revaluation loss of $98 (March 31, 2021 – gain of $576) on digital assets through other comprehensive income. As at March 31, 2022, the carrying value of the Company’s digital assets held was $1,620 (December 31, 2021 – $1,718).
				7.	Property and equipment

		Computer				Furniture		Leasehold
				equipment					and fixtures		improvements		Total
					Cost
					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
					Additions		277				—			—	277
					Effects of movement in exchange rate		(9 )				—			—	(9 )
					Balance, March 31, 2022		3,091				1,212	2,055	6,358

					Accumulated depreciation
					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
					Depreciation		82				17			—	99
					Balance, March 31, 2022		2,029				919	2,055	5,003

					Net book value
					Balance, December 31, 2021		876				310			—	1,186
					Balance, March 31, 2022		1,062				293			—	1,355

					Depreciation of $99 for the three months ended March 31, 2022 (three months ended March 31, 2021 – $85) for property and equipment is included in depreciation and amortization.

			F-11

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
(Unaudited)
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three months ended March 31, 2022 and 2021
				8.	Intangible assets
					Internally
						Internally	generated–		Acquired
						generated–	in		Software	technology				Customer	Regulatory
							completed	progress		licenses	assets				relationships Brand	licenses	Total
				Cost
				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
				Additions						194	2,190	—										—	—	—	—	2,384
				Transfers						1,171	(1,171 )	—										—	—	—	—	—
				Effects of movement in exchange rate
										—	—	(16 )										—	—	—	—	(16 )

				Balance, March 31, 2022			46,005	4,017		3,960	21,000				8,900 1,000	6,800 91,682

				Accumulated depreciation
				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
				Amortization						1,703	—	48										525	266	—	340	2,882
				Balance, March 31, 2022			31,213	—		3,512									2,247	1,693	—	1,227 39,892

				Net book value
				Balance, December 31, 2021			15,130	2,998	512	19,278				7,473 1,000	5,913 52,304
				Balance, March 31, 2022			14,792	4,017	448	18,753				7,207 1,000	5,573 51,790

				Amortization of intangible assets of $2,882 for the three months ended March 31, 2022 (three months ended March 31, 2021 – $2,154) is included in depreciation and amortization.
			F-12

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
(Unaudited)
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three months ended March 31, 2022 and 2021
				9.	Credit facility
					The credit facility consists of a $60,000 senior secured credit facility maturing on July 2, 2025. The credit facility is subject to variable interest rates that reference to 1 month USD LIBOR, or under certain conditions, the Federal Funds Rate in effect. Interest on advance is payable at 1 month USD LIBOR plus 8% with no LIBOR floor. There is a 0.33% fee on the available but undrawn portion of the $60,000 facility. The principal and interest balance outstanding for the credit facility as at March 31, 2022 was $45,975 (December 31, 2021 – $44,983).
					The credit facility is subject to certain covenants and events of default. As at March 31, 2022, the Company was in compliance with these covenants. Interest expense on the credit facility is included in credit facility interest expense in the interim condensed consolidated statement of operations and comprehensive loss.
					The Company has provided its senior lenders with a general security interest in all present and after acquired personal property of the Company, including certain pledged financial instruments, cash and cash equivalents.
				10.	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 subsequent to the end of the quarter.
					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 March 31, 2022, 3,295,377 warrants have been exercised and converted into Common Shares for cash proceeds of $6,686. As at March 31, 2022, 1,185,015 Debenture Warrants remain outstanding and exercisable.
			F-13

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
(Unaudited)
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three months ended March 31, 2022 and 2021
				10.	Debentures (Continued from previous page)
					The Company’s debentures balance includes the following:

							As at	As at
								March 31,	December 31,
							2022	2021
					Principal balance		40,772	41,375
					Discount		(2,014)	(2,323)
							38,758	39,052
					Interest payable		752		742
							39,510	39,794

					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						2,178			—	2,178
					2023						3,286	16,391	19,677
					2024						938	17,979	18,917
											6,402	34,370	40,772

			F-14

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
(Unaudited)
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three months ended March 31, 2022 and 2021
				11.	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 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 interim condensed consolidated statement of operations and comprehensive loss. The stock warrants are classified as a derivative liability, and not equity, due to the exercise price being denominated in USD, which is different than the Company's functional currency.
					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 interim condensed consolidated statement of operations and comprehensive loss.

						As at	As at
							March 31,	December 31,
						2022	2021
					Balance, beginning of period	12,688		—
					Stock warrants issued	—	23,986
					Change in fair value due to revaluation of derivative financial liabilities	(2,189)	(11,276)
					Change in fair value due to foreign exchange	(85)		(22)
					Balance, end of period	10,414	12,688

					The change in fair value due to revaluation of derivative financial liabilities for the three months ended March 31, 2022 was a gain of $2,189 (three months ended March 31, 2021 – loss of $288). Change in fair value due to foreign exchange for the three months ended March 31, 2022 was a gain of $85 (three months ended March 31, 2021 – loss of $46).
			F-15

Mogo Inc.

Notes to the Interim Condensed Consolidated Financial Statements

(Unaudited)

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

For the three months ended March 31, 2022 and 2021

11.

Derivative financial liabilities (Continued from previous page)

Details of the derivative financial liabilities as at March 31, 2022 are as follows:

Warrants

Weighted

outstanding

average

and exercisable

exercise

(000s)

price $

Balance, December 31, 2021

5,729

9.69

Warrants issued

—

Balance, March 31, 2022

5,729

9.69

The 5,728,824 warrants outstanding noted above have an expiry date of 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

March 31,

December 31,

2022

2021

Risk-free interest rate

2.45%

0.97%

Expected life

2.4 - 3.2 years 2.7 - 3.5 years

Expected volatility in market price of shares

109% - 116% 102% - 109%

Expected dividend yield

Expected forfeiture rate

12.

Geographic information

(a)

Revenue

Revenue presented below has been based on the geographic location of customers.

Three months ended

March 31,

2022

2021

Canada

15,137

10,254

Europe

1,819

1,144

Other

299

Total

17,255

11,420

F-16

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
(Unaudited)
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three months ended March 31, 2022 and 2021
				12.	Geographic information (Continued from previous page)
					(b)	Non-current assets
					Non-current assets presented below has been based on geographic location of the assets.



									As at	As at
										March 31,	December 31,

									2022	2021
					Canada				250,369	255,315
					Europe				536	609
					Other				1,036	883
					Total				251,941	256,807

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

									Three months ended
										March 31,	March 31,
									2022	2021
					Personnel expense				8,551	4,758
					Marketing				4,445	2,481
					Stock-based compensation				3,611	557
					Depreciation and amortization				3,180	2,418
					Hosting and software licenses				1,408	646
					Professional services				1,240	929
					Insurance and licenses		665	467
					Credit verification costs		511	524
					Premises		282	206
					Others		761	789
					Total operating expenses				24,654	13,775

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

									Three months ended
									March 31,	March 31,
									2022	2021
					General and administration				7,750	4,050
					Technology and development				7,322	4,509
					Customer service and operations				4,806	2,176
					Marketing				4,776	3,040
					Total operating expenses				24,654	13,775

			F-17

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
(Unaudited)
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three months ended March 31, 2022 and 2021
				14.	Revaluation losses (gains)

						Three months ended
						March 31,	March 31,
						2022	2021
					Change in fair value due to revaluation of derivative financial asset			(8)	288
					Change in fair value due to revaluation of derivative financial liabilities	(2,189)	—
					Unrealized loss (gain) on investment portfolio			361	(5,786)
					Unrealized exchange loss			688	236
						(1,148)	(5,262)
				15.	Other non-operating expenses (income)

						Three months ended
						March 31,	March 31,
						2022	2021
					Credit facility prepayment and related expenses			—	(5)
					Government grants			(36)	(606)
					Direct offering transaction costs allocated to derivative financial liabilities
								—		1,466
					Acquisition costs, restructuring and other			179	656
								143	1,511

				16.	Derivative financial assets
					During the year ended December 31, 2021, the Company completed its strategic investment in Coinsquare Ltd. (“Coinsquare”), one of Canada’s leading digital asset trading platforms, pursuant to which Mogo acquired 12,518,473 Coinsquare common shares, representing an approximately 38% ownership interest in Coinsquare. As part of its investment, the Company obtained warrants 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”).
					The Company determined that the Coinsquare Warrant is classified as derivative financial assets on the 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 assets is recognized to revaluation gains (losses) in the interim condensed consolidated statement of operations and comprehensive loss.
			F-18

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
(Unaudited)
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three months ended March 31, 2022 and 2021
				16.	Derivative financial assets (Continued from previous page)

						As at	As at
							March 31,	December 31,
						2022	2021
					Balance, beginning of period	7,866		—
					Additions	—	11,591
					Change in fair value due to revaluation of derivative financial assets	8	1,788
					Exercised	—	(5,513)
					Balance, end of period	7,874	7,866

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

						As at	As at
						March 31,	December 31,

						2022	2021
					Risk-free interest rate	0.6%	0.4%
					Expected life	0.35 years	0.5 years
					Expected volatility in market price of shares	84%	71%
					Expected dividend yield	0%		0%
					Expected forfeiture rate	0%		0%

			F-19

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
(Unaudited)
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three months ended March 31, 2022 and 2021
				17.	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 interim condensed 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-20

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
(Unaudited)
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three months ended March 31, 2022 and 2021
				17.	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 three months ended March 31, 2022, there have not been any transfers between fair value hierarchy levels.
									Carrying amount						Fair value
	Financial
	asset at		Other
	amortized		financial
				As at March 31, 2022			Note FVTPL	cost			liabilities Total Level 1 Level 2 Level 3 Total
				Financial assets measured at fair value

				Investment portfolio				19,297	—	— 19,297 1,412					— 17,885 19,297
				Derivative financial assets
							16 7,874	—	—								7,874	—	— 7,874 7,874
								27,171	—	— 27,171
				Financial assets not measured at fair value

				Cash and cash equivalent
													—	53,864	— 53,864 53,864					—	— 53,864
				Loans receivable – current
							4					—	67,276	— 67,276								— 67,276	— 67,276
				Loans receivable – non-current
							4					—	151	—					151			—	—	151			151
				Other receivables									—	2,129	—									2,129	— 2,129	— 2,129
													— 123,420	— 123,420
				Financial liabilities measured at fair value

				Derivative financial liabilities
							11 10,414	—	— 10,414							— 10,414	— 10,414
								10,414	—	— 10,414
				Financial liabilities not measured at fair value

				Accounts payable, accruals and other
													—	—	21,498 21,498								— 21,498	— 21,498
				Credit facility			9					—	—	45,975 45,975								— 45,975	— 45,975
				Debentures			10					—	—	39,510 39,510								— 39,510	— 39,510
													—	— 106,983 106,983
			F-21

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
(Unaudited)
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three months ended March 31, 2022 and 2021
				17.	Fair value of financial instruments (Continued from previous page)

								Carrying amount					Fair value
	Financial
	asset at		Other
	amortized		financial
				As at December 31, 2021 Note 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
						16 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				—	—	248				248
				Other receivables									—	2,112	—									2,112	— 2,112	— 2,112
													— 136,965	— 136,965
				Financial liabilities measured at fair value

				Derivative financial liabilities
						11 12,688				—	— 12,688							— 12,688	— 12,688
							12,688				—	— 12,688
				Financial liabilities not measured at fair value

				Accounts payable, accruals and other
													—	—	20,783 20,783							— 20,783	— 20,783
				Credit facility		9						—	—	44,983 44,983							— 44,983	— 44,983
				Debentures		10						—	—	39,794 39,794							— 39,794	— 39,794
													—	— 105,560 105,560

					(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-22

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
(Unaudited)
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three months ended March 31, 2022 and 2021
				17.	Fair value of financial instruments (Continued from previous page)
					The following tables show the valuation techniques used in measuring Level 3 fair values for financial instruments in the interim condensed 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 and amount	• Changes to the expected
						Considering expected prepayments and using management’s best estimate of average market interest rates with similar remaining terms.	of cash flows	amount and timing of cash flow changes fair value
			• Discount rate 12%
							• Increases to the discount rate
							can decrease fair value
							• Increase in equity stock price
			• Equity stock price and
					Derivative financial assets		and volatility will increase fair value
						• Option pricing model
			volatility
			F-23

Mogo Inc.

Notes to the Interim Condensed Consolidated Financial Statements

(Unaudited)

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

For the three months ended March 31, 2022 and 2021

17.

Fair value of financial instruments (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 March 31, 2022 and December 31, 2021 and classified as Level 3:

As at

March 31,

December 31,

2022

2021

Balance of Level 3 investments, opening

16,303

18,291

Additions

1,750

3,555

Disposal

—

(9,272)

Unrealized exchange loss

(180)

(90)

Realized gain on investment portfolio

—

4,120

Unrealized gain (loss) on investment portfolio

(301)

Balance of level 3 investments, end of period

17,885

16,303

Unrealized exchange loss for the three months ended March 31, 2022 was a $180 (three months ended March 31, 2021 – loss of $130).

Unrealized gain (loss) on investment portfolio for the three months ended March 31, 2022 was a gain of $12 (three months ended March 31, 2021 – gain of $5,697).

(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:

March 31, 2022

Adjusted market multiple (5% movement)

976

(976)

December 31, 2021

Adjusted market multiple (5% movement)

920

(920)

F-24

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
(Unaudited)
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three months ended March 31, 2022 and 2021
				18.	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 these 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 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 is 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.
			F-25

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
(Unaudited)
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three months ended March 31, 2022 and 2021
				18.	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 and debentures are described below. Management’s intention is to continue to refinance any outstanding amounts owing under the credit facilities and 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 9 and 10 for further details.

						2022		2023			2024	2025	2026	Thereafter
					Commitments - operational
					Lease payments	985		1,297	1,206					1,240	1,255	1,472
					Trade payables	5,910		—			—	—	—	—
					Accruals and other	15,588	—			—	—	—	—
					Interest – Credit facility (Note 9)
						2,733		3,644	3,644					1,822	—	—
					Interest – Debentures (Note 10)
						2,205		1,502			—	—	—	—
					Purchase obligations	526		—			—	—	—	—
						27,947	6,443	4,850					3,062	1,255	1,472
					Commitments – principal repayments

					Credit facility (Note 9)	—		—			—	45,975	—	—
					Debentures (Note 10)	2,178		19,677	18,917					—	—	—
						2,178		19,677	18,917					45,975	—	—
					Total contractual obligations
						30,125	26,120	23,767					49,037	1,255	1,472

			F-26

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
(Unaudited)
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three months ended March 31, 2022 and 2021
				19.	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 March 31, 2022, there are 76,752,952 (December 31, 2021 – 76,693,859) Common Shares and no preferred shares issued and outstanding.
				(b)	Treasury share reserve
					The treasury share reserve comprises the cost of the shares held by the Company. As at March 31, 2022, the Company held 303,816 of Common Shares (December 31, 2021 – 303,816).
				(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 were additional options issued, which were granted pursuant to the Company’s prior stock option plan (the “Prior Plan”). As at March 31, 2022, 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 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, 2020		4,977					—	3.07	2,965	3.47
					Options issued		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
					Options issued		727					2.50	3.64	—		—
					Exercised		(48)					1.58	1.26	—		—
					Forfeited		(34)					4.42	5.13	—		—
					Balance, March 31, 2022		9,569					—	4.24	3,565	4.05

					The above noted options have expiry dates ranging from April 2022 to March 2030.
			F-27

Mogo Inc.

Notes to the Interim Condensed Consolidated Financial Statements

(Unaudited)

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

For the three months ended March 31, 2022 and 2021

19.

Equity (Continued from previous page)

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

three months

ended

March 31,

2022

2021

Risk-free interest rate

1.73%

0.58%

Expected life

5 years

Expected volatility in market price of shares

87%

84%

Expected dividend yield

Expected forfeiture rate

0% - 15%

These options generally vest either immediately or monthly over a three-to-four-year period.

On September 30, 2021, the Company granted performance-based stock options that vest monthly over a two-year period starting on January 1, 2021. Vesting of these options is dependent on certain performance criteria being met.

Total stock-based compensation costs related to options and RSUs for the three months ended March 31, 2022 was $3,553 (three months ended March 31, 2021 – $557).

(d)

RSUs

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 Shares. 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. 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 March 31, 2022 are as follows:

Number of

RSUs (000s)

Balance, December 31, 2020

Converted

(30)

Expired

(5)

Balance, December 31, 2021

Converted

(12)

Expired

—

Balance, March 31, 2022

F-28

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
(Unaudited)
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three months ended March 31, 2022 and 2021
				19.	Equity (Continued from previous page)
				(e)	Warrants

						Weighted	Weighted
		Warrants				average	Warrants	average
		outstanding				exercise	exercisable	exercise

		(000s)				price $	(000s)	price $
					Balance, December 31, 2020		5,035		1.80	4,386		1.88
					Warrants issued					573	11.25					—	—
					Warrants exercised		(3,618)		1.76			—	—
					Balance, December 31, 2021		1,990		4.60	1,757		5.04
					Warrants issued					—	—			—	—
					Warrants exercised					—	—			—	—
					Balance, March 31, 2022		1,990		4.60	1,874		4.80

					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 a derivative financial liability discussed in Note 11.
					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. There were 1,184,015 Debenture Warrants outstanding as at March 31, 2022 (December 31, 2021 – 1,184,015). During the three months ended March 31, 2022, no Debenture Warrants were exercised into Common Shares (three months ended March 31, 2021 – 2,062,627) resulting in no cash proceeds (three months ended March 31, 2021 – $4,187).
					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 by March 31, 2022 for cash proceeds of $1,696. 233,333 warrants remain outstanding as at March 31, 2022 with 116,667 having vested and the remaining 116,667 vesting on February 24, 2023. The warrants remain exercisable until August 24, 2023 subject to an earlier liquidation event. Subsequent to an amendment entered into on June 3, 2020, the exercise price of the warrants was reduced to $1.292. Under the agreement, Postmedia also receives a quarterly payment of $263.
					During the year ended December 31, 2021, the Company also issued 572,883 warrants with exercise prices ranging from USD $5.63 to USD $12.63 per warrant in connection with broker services rendered on offerings during the period. As at March 31, 2022, these warrants remain outstanding and exercisable.
					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 11 for more details.
			F-29