Enhanced Investments - Financial Portal

Published: 2021-08-11

Exhibit 99.1
		Page
			Interim Condensed Consolidated Statement of Financial Position as at June 30, 2021 and December 31, 2020	F-2
			Interim Condensed Consolidated Statement of Operations and Comprehensive Income (Loss) for the three and six months ended June 30, 2021 and 2020
	F-3
			Interim Condensed Consolidated Statement of Changes in Equity (Deficit) for the three and six months ended June 30, 2021 and 2020
	F-4
			Interim Condensed Consolidated Statement of Cash Flows for the three and six months ended June 30, 2021 and 2020	F-6
			Notes to the Interim Condensed Consolidated Financial Statements	F-7

	Mogo Inc.
Interim Condensed Consolidated Statement of Financial Position
	(Unaudited)
		(Expressed in thousands of Canadian Dollars)
				June 30,	December 31,

			Note			2021	2020
					Assets
					Cash and cash equivalent			55,406	12,119
					Digital assets	6		1,184			—
					Loans receivable	4		48,460	47,227
					Prepaids, and other receivables and assets			7,474	2,994
					Investment portfolio	19		19,173	18,445
					Investment accounted for using the equity method	18		101,803			—
					Property and equipment	7		1,154			892
					Right-of-use assets			3,813	3,879
					Intangible assets	8		62,404	18,912
					Derivative financial assets	18		30,321			—
					Goodwill	17		58,944			—
					Total assets			390,136	104,468

					Liabilities
					Accounts payable, accruals and other			16,772	7,843
					Lease liabilities			4,270	4,336
					Credit facilities	9		37,476	37,644
					Debentures	10		40,053	40,658
					Convertible debentures	11				—	8,751
					Derivative stock warrants	12		13,690			—
					Total liabilities			112,261	99,232

					Shareholders’ Equity
					Share capital	21a		355,387	106,730
					Contributed surplus			30,928	13,560
					Foreign currency translation reserve					360	—
					Revaluation reserve	6				26	—
					Deficit			(108,826)	(115,054)
					Total shareholders’ equity			277,875	5,236
					Total equity and liabilities			390,136	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 financial statements.
F-2

	Mogo Inc.
		Interim Condensed Consolidated Statement of Operations and Comprehensive Income (Loss)
	(Unaudited)
			(Expressed in thousands of Canadian Dollars)
										Three months ended		Six months ended
					June 30,	June 30,				June 30,	June 30,
				Note						2021	2020		2021	2020
							Revenue
							Subscription and services									8,218	4,536					14,220	10,347
							Interest revenue									5,447	6,023					10,865	14,122
									13							13,665	10,559					25,085	24,469
							Cost of revenue
							Provision for loan losses, net of recoveries		4											774	973	2,309	6,311
							Transaction costs													797	14	1,209	191
																1,571	987	3,518	6,502
							Gross profit									12,094	9,572					21,567	17,967
							Operating expenses
							Technology and development									3,486	1,148					5,704	2,942
							Marketing									4,154	610	7,190	1,843
							Customer service and operations									3,420	1,214					5,583	3,359
							General and administration									4,253	1,919					7,636	4,353
							Stock based compensation									3,805	460	4,362	674
							Depreciation and amortization									2,971	2,287					5,389	4,512
							Total operating expenses		14							22,089	7,638					35,864	17,683
							(Loss) income from operations									(9,995)	1,934					(14,297)	284
							Other expenses (income)
							Credit facility interest expense		9							1,005	1,580					2,001	4,146
							Debenture and other financing expense		5,10,11											871	1,946			1,823	3,830
							Accretion related to debentures and convertible debentures
														312	168	621	377
							Share of loss in investment accounted for using the equity method
				18						2,860	—	2,860								—
							Revaluation (gains) losses		15							(24,850)	1,186					(30,112)	3,347
							Other non-operating expenses (income)		16											752	(1,396)			2,264	199
																(19,050)	3,484					(20,543)	11,899
							Net income (loss) before tax									9,055	(1,550)					6,246	(11,615)
							Income tax expense													10	—	18	—
							Net income (loss)									9,045	(1,550)					6,228	(11,615)
							Other comprehensive income (loss):
							Items that are or may be reclassified subsequently to profit or loss:

							Unrealized revaluation (loss) gain on digital assets	6							(550)	—	26	—
							Foreign currency translation reserve gain													72	—	360	—
							Other comprehensive income (loss):									(478)	—	386	—
							Total comprehensive income (loss)									8,567	(1,550)					6,614	(11,615)
							Net income (loss) per share
							Basic earnings (loss) per share									0.142	(0.055)					0.112	(0.417)
							Diluted earnings (loss) per share									0.134	(0.055)					0.103	(0.417)
							Weighted average number of basic common shares (in 000s)
										63,597	28,111					55,368	27,882
							Weighted average number of fully diluted common shares (in 000s)
										67,352	28,111					60,195	27,882

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

	Mogo Inc.
		Interim Condensed 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
				Loss and comprehensive loss				—	—											—	—							—		(2,817)	(2,817)
				Foreign currency translation reserve				—	—											—	288							—	—	288
				Revaluation reserve (Note 6)				—	—											—	—							576	—	576
				Stock based compensation (Note 21b)
								—	—						557	—							—	—	557

				Options and restricted share units (“RSUs”) exercised
								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 (Note 17)
								10,000	54,800									—	—							—	—	54,800

				Shares issued – convertible debentures (Note 11)
								3,179	8,783											—	—							—	—	8,783

				Warrants issued for broker services (Note 21d)
								—	—						1,410	—							—	—	1,410

				Warrants exercised (Note 20d)				3,375	7,498						(1,615)	—							—	—	5,883
				Amortization of warrants (Note 20d)
								—	—						269	—							—	—	269

				Balance, March 31, 2021				56,664 243,899	13,365	288							576	(117,871) 140,257

					Foreign
							currency

					Number of	Share	Contributed				translation	Revaluation
						shares (000s)	capital	surplus	reserve					reserve	Deficit	Total
				Balance, March 31, 2021				56,664 $ 243,899 $	13,365 $	288 $							576	$(117,871) $ 140,257
				Loss and comprehensive loss				—	—											—	—							—		9,045	9,045
				Foreign currency translation reserve				—	—											—	72							—	—	72
				Revaluation reserve (Note 6)				—	—											—	—							(550)	—	(550)
				Stock based compensation (Note 21b)
								—	—						3,805	—							—	—	3,805

				Options and restricted share units (“RSUs”) exercised
								259	973						(305)	—							—	—	668

				Shares issued – ATM arrangement, net
								—	(469)											—	—							—	—	(469)

				Shares issued on acquisition of Moka (Note 17)
								5,000	46,600									—	—							—	—	46,600

				Shares issued on investment accounted for using the equity method (Note 18)
								6,741	63,878				13,901	—							—	—	77,779

				Equity settled share based payment (Note 21b)
								17	164											—	—							—	—	164

				Warrants exercised (Note 21d)				122	342						(95)	—							—	—	247
				Amortization of warrants (Note 21d)
								—	—						257	—							—	—	257

				Balance, June 30, 2021				68,803 355,387	30,928	360							26	(108,826) 277,875

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

	Mogo Inc.
		Interim Condensed Consolidated Statement of Changes in Equity (Deficit)
			(Expressed in thousands of Canadian Dollars)
					Number of	Share	Contributed
						shares (000s)	capital	surplus			Deficit	Total
				Balance, December 31, 2019		27,558 $			94,500 $	8,861 $				(101,609) $	1,752
				Loss and comprehensive loss		—					—		—	(10,065)	(10,065)
				Stock based compensation (Note 21b)		—					—		214	—		214
				Options and restricted share units (“RSUs”) exercised
						6					30		(15)	—		15

				Shares issued – Partial settlement of credit facility prepayment
						307					1,000		—	—	1,000

				Amortization of warrants (Note 21d)		—					—	(381)				—	(381)
				Balance, March 31, 2020		27,871			95,530	8,679				(111,674)	(7,465)
					Number of	Share	Contributed
						shares (000s)	capital	surplus			Deficit	Total
				Balance, March 31, 2020		27,871 $			95,530 $	8,679 $				(111,674) $	(7,465)
				Loss and comprehensive loss		—					—		—	(1,550)	(1,550)
				Stock based compensation (Note 21b)		—										460	—	460
				Options and restricted share units (“RSUs”) exercised
						37					114	(114)				—			—

				Equity portion - convertible debenture (Note 11)
						—					—		617	—		617

				Shares issued – convertible debentures (Note 11)
						499					629		—	—		629

				Shares issued to settle debt		427					537		—	—		537
				Amortization of warrants (Note 21d)		—					—		515	—		515
				Balance, June 30, 2020		28,834			96,810	10,157				(113,224)	(6,257)
											The accompanying notes are an integral part of these financial statements.
F-5

	Mogo Inc.
		Consolidated Statement of Cash Flows
		(Expressed in thousands of Canadian Dollars)
							Three months ended			Six months ended
			June 30,	June 30,			June 30,	June 30,
						2021	2020		2021	2020
					Cash provided by (used in) the following activities:
					Operating activities
							Net income (loss)					9,045	(1,550)				6,228	(11,615)
							Items not affecting cash:												—	—
							Depreciation and amortization					2,971	2,287				5,389	4,512
							Postmedia warrant expenses					257	516				526	271
							Provision for loan losses					961	1,311				2,822	6,983
							Credit facility and debenture interest expense
						1,876	3,526		3,823	7,976
							Accretion related to debentures and convertible debentures
						312	168		621	377
							Share of loss from investment in associate					2,860	—				2,860	—
							Stock based compensation expense					3,805	460				4,362	674
							Revaluation (gains) losses					(24,850)	1,186				(30,112)	3,347
							Other non-operating (income) expenses					164	(34)				490	(662)
									(2,599)	7,870				(2,991)	11,863
							Changes in:
							Net issuance of loans receivable					(3,035)	5,456				(4,055)	3,428
							Proceeds from sale of loan book									—	—		—	31,572
							Prepaid expenses, deposits and other assets				(284)	(180)				(580)	(375)
							Accounts payable and accruals					(1,054)	(3,181)				(1,197)	(3,232)
					Cash generated from (used in) operating activities				(6,972)	9,965				(8,823)	43,256
					Interest paid				(1,875)	(1,736)				(3,807)	(5,839)
					Net cash (used in) generated from operating activities
						(8,847)	8,229		(12,630)	37,417

					Investing activities
							Acquisition of a subsidiary, net of cash acquired				(281)	—				1,820	—
							Cash invested in investment accounted for using the equity method
						(32,396)	—		(32,396)	—
							Purchases of property and equipment									(73)	—		(171)	(23)
							Investment in digital assets					(500)	—				(1,250)	—
							Investment in intangible assets					(1,038)	(882)				(2,221)	(2,730)
					Net cash used in investing activities				(34,288)	(882)				(34,218)	(2,753)

					Financing activities
							Proceeds from sale of investment					4,625	—				4,625	—
							Cash invested in investment portfolio					(1,700)	—				(1,794)	—
							Lease liabilities – principal payments					(197)	(114)				(339)	(273)
							Net repayments on debentures					(509)	—				(1,011)	(5)
							Net repayments on credit facilities									—	(6,272)		(168)	(37,333)
							Proceeds from issuance of common shares, net of transaction costs
						(469)	—		80,816	—
							Proceeds from exercise of warrants					247	—				6,130	—
							Proceeds from exercise of options					1,223	—				1,504	15
					Net cash provided by (used in) financing activities
						3,220	(6,386)		89,763	(37,596)

					Net (decrease) increase in cash				(39,915)	961				42,915	(2,932)
					Effect of exchange rate fluctuations				(146)	—				372	—
					Cash and cash equivalent, beginning of period				95,467	6,524				12,119	10,417
					Cash and cash equivalent, end of period				55,406	7,485				55,406	7,485
					The accompanying notes are an integral part of these financial statements.
F-6

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three and six months ended June 30, 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. (“Mogo Finance”). 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 are listed on the Toronto Stock Exchange (“TSX”) and the Nasdaq Capital Market under the symbol “MOGO”.
				Mogo — a financial technology company — offers a finance app that empowers consumers with simple digital solutions to help them get in control of their financial health. Through the Mogo app, consumers can access a digital spending account with Mogo Visa* Platinum Prepaid Card featuring automatic carbon offsetting, easily buy and sell bitcoin, and get free monthly credit score monitoring, ID fraud protection, and personal loans. Mogo’s wholly-owned subsidiary, Carta Worldwide, also offers a digital payments platform that powers the next-generation card programs from innovative fintech companies in Europe, North America and APAC.
				COVID-19 Pandemic
				During the second quarter of 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. The extent of the impact that this pandemic may have on the Canadian economy and the Company’s business is currently highly 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 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 interim condensed consolidated financial statements in future periods.
		F-7

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three and six months ended June 30, 2021 and 2020
			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 June 30, 2021.
				The Company presents its interim condensed consolidated statement of financial position on a non-classified basis in order of liquidity.
				The Company elected to change the presentation of its interim condensed consolidated statement of operations and comprehensive income (loss) to include stock based compensation and depreciation and amortization as separate items. The Group believes that this presentation is relevant to an understanding of its financial performance. Refer to note 14 for a reconciliation of total operating expenses to a presentation by function.
				These interim condensed consolidated financial statements were authorized by the Board of Directors (the “Board”) to be issued on August 11, 2021.
				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 with the Board and has collectively formed a judgment that the Company has adequate resources to continue as a going concern for the foreseeable future, which Management and the Board 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 current fiscal year, 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, 11, and 20 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, which is the Company's functional currency.
		F-8

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three and six months ended June 30, 2021 and 2020
			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, 2020, except for the accounting policies adopted subsequent to the business combination with Carta Solutions Holdings Corporation (“Carta”) on January 25, 2021, and the business combination with Moka Financial Technologies Inc. (“Moka”) on May 4, 2021, as discussed below (refer to note 17 for further details), and the adoption of new accounting policies applied as a result of the Company’s investment in digital assets.
				Foreign currency translation
				The interim condensed consolidated financial statements are presented in Canadian dollars, which is the Company’s functional and presentation currency. 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 interim condensed 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 interim condensed consolidated statement of loss and comprehensive loss.
				Foreign operations
				The assets and liabilities of foreign operations are translated to the presentation currency using exchange rates at the reporting date. The income 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.
				Revenue
				Revenue is comprised of subscription and services and interest revenue. The Company introduced new subscription and services revenue streams through business combinations during the three and six months ended June 30, 2021 and adopted the following new revenue policies.
				Transaction processing revenue
				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-9

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three and six months ended June 30, 2021 and 2020
			3.	Significant accounting policies (Continued from previous page)
				Service revenue
				The Company earns service revenue through its offering of certain subscription-based saving and investing products. The Company’s service revenue is derived from monthly contracts with individual users.
				The Company recognizes service revenue from the two performance obligations on a straight-line basis, over the length of the contract, on a monthly basis.
				Management fee revenue
				Revenue from management services consists of management fees earned through investment advisory services and from investment fund management.
				Revenue is recognized when the services are provided based on the management fees set out in the corresponding contract and collectability is reasonably assured.
				Exempt Market Dealer commission revenue
				The Company’s Exempt Market Dealer commission revenue is earned by organizing, assisting and coordinating investments in privately held entities without a prospectus to third parties. The Company earns a commission based on the rate set out within the agreement and is payable upon completion of the services outlined in the agreement.
				Restricted cash
				The cash and cash equivalents disclosed above and in the statement of cash flows include $2,010 which are held by the Company. These deposits are subject to regulatory restrictions and are therefore not available for general use.
				Investment in associate
				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 net assets 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 statement of operations and comprehensive income (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.
		F-10

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three and six months ended June 30, 2021 and 2020
			3.	Significant accounting policies (Continued from previous page)
				The aggregate of the Company’s share of an associate’s profit or loss after tax is shown on the face of the statement of operations and comprehensive income (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 statement of operations and comprehensive income (loss).
				Goodwill
				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 annually for impairment. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the Company’s cash-generating units (“CGU”) that are expected to benefit from the combination. For impairment testing purposes, the Company is determined to be a single CGU.
				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
				Digital assets
				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.
		F-11

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three and six months ended June 30, 2021 and 2020
			3.	Significant accounting policies (Continued from previous page)
				Acquisitions are recognized at cost and are remeasured to fair value at the end of the period by reference to active markets. We determine the fair value of our digital assets in accordance with IFRS 13, Fair Value Measurement, based on market approach 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, we 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 below.
				Fair value increases are recognized as 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 as 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.
				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, 2020.
				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 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 June 30, 2021 and December 31, 2020 are as follows:
					June 30,	December 31,

					2021	2020
				Current (terms of one year or less)	56,203	54,978
				Non-current (terms exceeding one year)		496	1,135
					56,699	56,113

		F-12

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three and six months ended June 30, 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 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 June 30, 2021
				Risk Category	Days past due					Stage 1	Stage 2	Stage 3	Total
				Strong	Not past due					47,827		—	—	47,827
				Lower risk	1-30 days past due					1,815		—	—	1,815
				Medium risk	31-60 days past due								—	592	—		592
				Higher risk	61-90 days past due								—	504	—		504
					91+ days past due or bankrupt
				Non-performing									—	—	5,961	5,961

					Gross loans receivable					49,642	1,096	5,961	56,699
					Allowance for loan losses	(4,600)	(656)	(2,983)	(8,239)
					Loans receivable, net					45,042	440	2,978	48,460

															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-13

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three and six months ended June 30, 2021 and 2020
			4.	Loans receivable (Continued from previous page)
				The Company’s measurement of ECLs is impacted by forward looking indicators (FLIs) including the consideration of forward macroeconomic conditions. In light of the COVID-19 pandemic, management has applied a probability weighted approach to the measurement of ECL as at June 30, 2021, involving multiple scenarios and additional FLIs. The primary FLIs impacting ECL include rate of loans experiencing financial difficulty and collections. Additional factors considered include the possibility of a prolonged economic recession, the effectiveness of collection strategies implemented to assist customers experiencing financial difficulty (including varying potential levels of defaults for customers who have been offered payment deferral plans), the extent to which government subsidies will continue to be available as the COVID-19 pandemic continues, and the level of loan protection insurance held by customers within our portfolio.
				Allowance for loan losses	Three months ended		Six months ended
						June 30,	June 30,	June 30,	June 30,
									2021	2020	2021	2020

				Balance, beginning of period					9,182	15,145	8,886	16,020
				Derecognition of allowance associated with loan sale							—	—	—	(2,131)
				Provision for loan losses					961	1,311	2,822	6,983
				Charge offs					(1,904)	(4,142)	(3,469)	(8,558)
				Balance, end of period					8,239		12,314	8,239	12,314

				As at June 30, 2021, our allowance for loan losses includes $922 of management overlay added due to the present economic uncertainties caused in part by the COVID-19 pandemic (December 31, 2020 - $1,049). The Company believes this provides adequate provision to absorb the impact on our loan book of any reasonably possible potential deterioration in future macroeconomic conditions that may result from the ongoing COVID-19 pandemic.
				The provision for loan losses in the interim condensed consolidated statement of operations and comprehensive loss is recorded net of recoveries for the three and six months ended June 30, 2021 of $187 and $513 respectively (three and six months ended June 30, 2020 - $338 and $672 respectively).
				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 interim condensed consolidated statement of operations and comprehensive loss.

			5.	Related party transactions
				Related party transactions during the three and six months ended June 30, 2021 include transactions with debenture holders that incur interest. The related party debentures balance as at June 30, 2021 totaled $259 (December 31, 2020 – $358). The debentures bear annual coupon interest of 8.0% (December 31, 2020 – 8.0%) with interest expense for the three and six months ended June 30, 2021 totalling $5 and $12 respectively (three and six months ended June 30, 2020 – $14 and $25 respectively). 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 11), 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. for $1,300.
		F-14

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three and six months ended June 30, 2021 and 2020
			6.	Digital assets
				Digital assets represent investments in cryptocurrencies which the company expects to hold for the foreseeable future.

						Fair	Total
	Average				Total	value	fair	Cumulative
	cost per		Quantities			Average		per unit		value		revaluation
	unit				cost	June 30,	June 30,	gain (loss)
						2021	2021

				Bitcoin (BTC)	$ 42,079	17.82 $				750	$	44 $	776 $	26
				Ethereum (ETH)		3,425	145.99				500	3	408	(92)
														1,184	(66)
				In January 2021, the Company purchased $750 of Bitcoin and in April 2021, the Company purchased $500 of Ethereum. During the three and six months ended June 30, 2021, the Company recorded $550 of revaluation loss and $26 of revaluation gain respectively on digital assets through other comprehensive income (loss). During the three and six months ended June 30, 2021, the Company recorded $92 of revaluation loss through net income (loss). As at June 30, 2021, the carrying value of our digital assets held was $1,184.
			7.	Property and equipment

		Computer			Furniture		Leasehold
			equipment			and fixtures		improvements	Total
				Cost
				Balance at December 31, 2019		4,513				1,180				2,509	8,202
				Additions				22	—		—	22
				Disposals		(2,452)				—				(454)	(2,906)
				Balance at December 31, 2020		2,083				1,180				2,055	5,318
				Additions				170	—		—	170
				Additions through business combinations				298	15						—				313
				Effects of movement in exchange rate				(8)	(1)		—	(9)
				Balance at June 30, 2021		2,543				1,194						2,055		5,792

				Accumulated depreciation
				Balance at December 31, 2019		3,761				733				1,935	6,429
				Depreciation				229	91		311	631
				Disposals		(2,443)				—				(191)	(2,634)
				Balance at December 31, 2020		1,547				824				2,055	4,426
				Depreciation				175	37		—	212
				Balance at June 30, 2021		1,722				861				2,055	4,638

				Net book value
				Balance at December 31, 2020				536	356		—	892
				Balance at June 30, 2021				821	333						—		1,154

		F-15

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three and six months ended June 30, 2021 and 2020
			7.	Property and equipment (Continued from previous page)
				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 a fair value of $298 and $15 respectively, along with effects of exchange rate movement related to foreign subsidiaries on the interim condensed consolidated statement of financial position.
				Depreciation of $nil for the three and six months ended June 30, 2021 respectively (three and six months ended June 30, 2020 - $113 and $227 respectively) for leasehold improvements are included in general and administration expenses. Depreciation expense of $127 and $212 for the three and six months ended June 30, 2021 respectively (three and six months ended June 30, 2020 - $83 and $163 respectively) for computer equipment, furniture and fixtures is included in technology and development costs.

			8.	Intangible assets
					Internally
						Internally	generated
						generated	–					Acquired
	–	in	Software						technology	Customer	Regulatory
							completed	progress	licenses				assets	relationships	Brand	licenses	Total
				Cost
				Balance at December 31, 2019
							34,849	1,388	3,356									—	—	—	—	39,593

				Additions			—	4,796	—									—	—	—	—	4,796
				Transfers			4,655	(4,655)	—									—	—	—	—			—
				Balance at December 31, 2020
							39,504	1,529	3,356									—	—	—	—	44,389

				Additions			—	2,197	25									—	—	—	—	2,222
				Additions through a business combination
							—	—	628				32,900	4,000	900		7,700 46,128

				Transfers			1,936	(1,936)	—									—	—	—	—			—
				Effects of movement in exchange rate
							—	—	(24)									—	—	—	—			(24)

				Balance at June 30, 2021			41,440	1,790	3,985				32,900	4,000	900		7,700 92,715
				Accumulated depreciation
				Balance at December 31, 2019
							15,138	—	3,198									—	—	—	—	18,336

				Amortization			7,093	—	48									—	—	—	—	7,141
				Balance at December 31, 2020
							22,231	—	3,246									—	—	—	—	25,477

				Amortization			3,516	—	105									946	136	—		131	4,834
				Balance at June 30, 2021			25,747	—	3,351									946	136	—		131 30,311
				Net book value
				Balance at December 31, 2020
							17,273	1,529	110									—	—	—	—	18,912

				Balance at June 30, 2021			15,693	1,790	634				31,954	3,864	900		7,569 62,404

				Upon the acquisition of Carta on January 25, 2021 and Moka on May 4, 2021, the Company recognized intangible assets with a fair value of $22,928 and $24,200 respectively, on the interim condensed consolidated statement of financial position.
				Intangible assets include internally generated development costs, acquired software and technology assets, regulatory license, and customer relationships with finite useful lives. Amortization of intangible assets of $2,379 and $4,533 for the three and six months ended June 30, 2021 respectively (three and six months ended June 30, 2020 – $1,935 and $3,795 respectively) are included in technology and development costs.
		F-16

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three and six months ended June 30, 2021 and 2020
			9.	Credit facility
				The credit facility consists of a $50,000 senior secured credit facility maturing on July 2, 2022. 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 9% (with a 1 month USD LIBOR floor of 1.5%) on the greater of the actual aggregate unpaid principal balance, or the prescribed minimum balance under the credit facility agreement. There is a 0.33% fee on the available but undrawn portion of the $50,000 facility. The balance outstanding for the Credit Facility-Other as at June 30, 2021 was $37,476 (December 31, 2020 - $37,644).
				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 $3.259 per share.
				Credit facility - Other is subject to certain covenants and events of default. As at June 30, 2021 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.
			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 the Company’s 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 of the Company 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 June 30, 2021, 3,174,610 warrants have been exercised and converted into common shares for cash proceeds of $6,444. As at June 30, 2021, 1,304,782 Debenture Warrants remain outstanding and exercisable.
		F-17

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three and six months ended June 30, 2021 and 2020
			10.	Debentures (Continued from previous page)
				The Company’s debentures balance includes the following:
						June 30,		December 31,

						2021	2020
				Principal balance		42,231	43,442
				Discount		(2,953)	(3,575)
						39,278	39,867
				Interest payable			775	791
						40,053	40,658

				The debenture principal repayments will be made according to the following schedule and are payable in either cash or Mogo common shares at Mogo’s option:

										Principal
									component	Principal

									of quarterly	due on
					payment	maturity	Total
				2021						1,545		—	1,545
				2022						2,174		—	2,174
				2023						3,279	16,355	19,634
				2024						937	17,941	18,878
										7,935	34,296	42,231

			11.	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 of $2.75 per share on or about January 11, 2021.
		F-18

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three and six months ended June 30, 2021 and 2020
			11.	Convertible debentures (Continued from previous page)
				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.
				The following table summarizes the carrying value of the convertible debentures as at June 30, 2021:
						Net book	Net book
						value,	value,
						June	December

						30, 2021	31, 2020
				Convertible debentures		8,751	11,963
				Transaction costs			—	(755)
				Net proceeds		8,751	11,208
				Conversion of debentures to equity		(8,683)	(3,754)
				Accretion in carrying value of debenture liability			—	1,228
				Accrued interest			32	684
				Interest converted in shares and paid			(100)	(615)
							—	8,751

			12.	Derivative stock warrants
				On February 24, 2021, in connection with a registered direct offering, Mogo 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.
				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$29,406, 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.
December 31,

					June 30, 2021	2020

				Balance, December 31, 2020			—	—
				Stock warrants issued at February 24, 2021		15,767		—
				Change in fair value due to revaluation of derivative stock warrants		(1,820)		—
				Change in fair value due to foreign exchange		(257)		—
				Balance, June 30, 2021		13,690		—

				Change in fair value due to revaluation of stock warrants for the three and six months ended June 30, 2021 was a loss of $2,108 and $1,820 respectively. Change in fair value due to foreign exchange for the three and six months ended June 30, 2021 was a loss of $303 and $257 respectively.
		F-19

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three and six months ended June 30, 2021 and 2020
			12.	Derivative stock warrants (Continued from previous page)
				Details of the derivative stock warrants as at June 30, 2021 are as follows:

						Warrants	Weighted
					Outstanding	Average
					and exercisable	Exercise

						(000s)	Price $
				As at December 31, 2020			—		—
				Warrants granted		2,673			13.83
				As at June 30, 2021		2,673			13.83

				The 2,673,268 warrants outstanding noted above have an expiry date of August 2024.
				The fair value of the warrants outstanding was estimated using the Black-Scholes option pricing model with the following assumptions:

						For the
						six months	For the
							ended	year ended
						June 30,	December 31,

							2021	2020
				Risk-free interest rate	0.24%-0.46%				—
				Expected life		3.2 years			—
				Expected volatility in market price of shares		91%-95%			—
				Expected dividend yield			0%		—
				Expected forfeiture rate			0%		—

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

		Three months ended					Six months ended
					June 30,			June 30,		June 30,	June 30,

		2021			2020		2021	2020
				Canada		11,653						10,559	21,906	24,469
				Europe		1,869						—	3,014		—
				Other								143	—		165	—
				Total		13,665						10,559	25,085	24,469

		F-20

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three and six months ended June 30, 2021 and 2020
			14.	Expense by function
				The following table summarizes the Company’s operating expenses by function including stock based compensation and depreciation and amortization:

			Three months ended					Six months ended
		June 30,								June 30,	June 30,	June 30,
													2021	2020	2021	2020
				Technology and development								6,969			3,329	11,477						7,128
				Marketing		4,192				621	7,232	1,859
				Customer service and operations		4,377								1,210	6,553	3,363
				General and administration		6,551								2,478		10,602	5,333
				Total operating expenses		22,089										7,638		35,864						17,683

			15.	Revaluation (gains) and losses
					Three months ended
							Six months ended
					June 30,				June 30,	June 30,	June 30,
											2021	2020						2021	2020
				Unrealized exchange loss									164	67						400	94
				Change in fair value due to revaluation of derivative financial asset
										(24,808)		—		(24,808)									—
				Change in fair value due to revaluation of derivative stock warrant
											(2,107)		—		(1,820)									—
				Realized (gain) on investment portfolio									—	—	(2,460)	—
				Unrealized loss (gain) on investment portfolio										1,901	856	(1,424)	3,279
				Unrealized (gain) on other receivable									—	—						—	(289)
				Losses related to property and equipment									—	263						—	263
												(24,850)	1,186	(30,112)	3,347

				On April 28, 2021, the Company sold its investment in Vena Solutions Inc. for cash proceeds of $4,625. The resultant gain on sale was recorded within unrealized (gain) loss on investment portfolio during the three months ended March 31, 2021 and is realized during the three months ended June 30, 2021.
		F-21

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three and six months ended June 30, 2021 and 2020
			16.	Other non-operating (income) expenses
					Three months ended
					Six months ended
					June 30,					June 30,	June 30,	June 30,
						2021	2020	2021	2020
				Gain on sale of loan book					—		—	—	(1,676)
				Credit facility prepayment and related expenses					—		19	(5)	2,618
				Government grants					(602)	(1,332)	(1,208)	(1,332)
				Direct offering transaction costs allocated to warrant liability
											—		—	1,466	—
				Acquisition costs, restructuring and other					1,354	(83)	2,011	589
									752	(1,396)	2,264	199

				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 9).
				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 grants on a gross basis. As a result, Mogo has recorded other non-operating income of $602 and $1,208 for the three and six months ended June 30, 2021 respectively (three and six months ended June 30, 2020: $1,332 in respect of CEWS) in respect of the CEWS and CERS.
				Direct offering transaction costs allocated to warrant liability of $1,466 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 12 for further details).
		F-22

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three and six months ended June 30, 2021 and 2020
			17.	Business combinations
				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 of Mogo 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 interim condensed consolidated statement of operations and comprehensive loss and in operating cash flows in the 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 its peer-to-peer payment solution planned for 2021.
				In the period January 25, 2021 to June 30, 2021, the operations of Carta contributed revenue of $3,477 and net loss of $970. If the acquisition had occurred on January 1, 2021, management estimates that proforma consolidated revenue would have been $25,550 and proforma consolidated net profit would have been $5,810 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-23

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three and six months ended June 30, 2021 and 2020
			17.	Business combination (Continued from previous page)
				The following tables summarizes the fair value of consideration transferred, and its provisional allocation to estimated fair values assigned to each major class of assets acquired and liabilities assumed at the January 25, 2021 acquisition date. The Company may adjust the provisional purchase price allocation, as necessary, up to one year after the business combination date as new information is obtained about facts and circumstances that existed as of the closing date. The purchase price allocation process was not completed at the publication date of the interim condensed consolidated financial statements. The amounts allocated to certain assets and liabilities, goodwill, and intangibles below are preliminary and may be restated upon completion of the purchase price allocation process.
					January 25, 2021
					$ 000's
				Assets acquired:
				Cash and cash equivalent	2,101
				Prepaids, and other receivables and assets	1,692
				Property and equipment		270
				Right-of-use assets		316
				Intangible assets	22,928
				Goodwill	32,294
					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

				Acquisition of Moka:
				On May 4, 2021, Mogo completed the acquisition of all of the issued and outstanding securities of Moka, one of Canada's leading saving and investing apps. Mogo has acquired all of the issued and outstanding shares of Moka in exchange for the issuance of 4,999,991 Mogo 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 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 with a contractual life of eight years.
				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 interim condensed consolidated statement of operations and comprehensive loss and in operating cash flows in the statement of cash flows.
				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.
		F-24

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three and six months ended June 30, 2021 and 2020
			17.	Business combination (Continued from previous page)
				The following tables summarizes the fair value of consideration transferred, and its provisional allocation to estimated fair values assigned to each major class of assets acquired and liabilities assumed at the May 4, 2021 acquisition date. The Company may adjust the provisional purchase price allocation, as necessary, up to one year after the business combination date as new information is obtained about facts and circumstances that existed as of the closing date. The purchase price allocation process was not completed at the publication date of the interim condensed consolidated financial statements. The amounts allocated to certain assets and liabilities, goodwill, and intangibles below are preliminary and may be restated upon completion of the purchase price allocation process.

					May 4, 2021
					$ 000's
				Assets acquired:
				Cash and cash equivalent	4,227
				Prepaids, and other receivables and assets	2,208
				Property and equipment	40
				Intangible assets	23,200
				Goodwill	26,650
					56,325
				Liabilities assumed:
				Accounts payable, accruals & other	5,217
					5,217

				Net assets acquired at fair value	51,108

				Share consideration	46,600
				Cash consideration	4,508
				Total consideration transferred	51,108

		F-25

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three and six months ended June 30, 2021 and 2020
			18.	Investment accounted for using the equity method
				On April 16, 2021, the Company completed its initial strategic investment (the “Initial Investment”) in Coinsquare Ltd. (“Coinsquare”), Canada’s leading 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 Mogo 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 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 Mogo 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, and;
				•
				a warrant 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 Mogo 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 Mogo common shares, and;
				•
				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 Mogo shares to be issued in three equal tranches on June 4, July 4 and August 4, 2021 respectively. As at June 30, 2021, 1,525,982 Mogo common shares in the amount of $13,901 remain issuable under this arrangement.
				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 of Mogo valued at $3,523. This transaction includes 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 Company’s initial 19.99% position in Coinsquare and subsequent investments are accounted for using the equity method in the interim condensed 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 holds 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 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 interim condensed consolidated statement of operations and comprehensive income (loss).
		F-26

Mogo Inc.

Notes to the Interim Condensed Consolidated Financial Statements

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

For the three and six months ended June 30, 2021 and 2020

18.

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 in the three months ended June 30, 2021:

Call/Put

Value

Initial

Initial fair

Option

Revaluation

at June

recognition

value on

fair

(gains)

30,

date

recognition

value at exercise

losses

2021

Initial 19.99% investment

16-Apr-21

45,506

n/a 45,506

—

Call Option

16-Apr-21

2,978

5,513

—

(2,535)

Put Option

16-Apr-21

(3,533)

—

(3,533)

Coinsquare Warrants

16-Apr-21

10,408

n/a 29,282

(18,874)

Total - Initial Transaction

55,359

(24,942)

New Call Option

15-Jun-21

1,173

n/a

1,039

134

Total revaluation (gains)

(24,808)

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 $2,535 and $3,533 respectively on these instruments in the interim condensed consolidated statement of operations and comprehensive income (loss) for the three and six months ended June 30, 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 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:

For the

six months ended

June 30,

2021

Risk-free interest rate

0.30%

Expected life

0.26 - 0.83 years

Expected volatility in market price of shares

69%-76%

Expected dividend yield

Expected forfeiture rate

F-27

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three and six months ended June 30, 2021 and 2020
			18.	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 June 30, 2021
						$ 000's

				Current assets		103,210
				Non-current assets		45,333
				Current liabilities		(79,814)
				Non-current liabilities		(2,646)
				Net assets		66,083
				Company's share of net assets - 38.77%		25,620

				Goodwill		76,183
				Carrying amount of interest in associate		101,803

					April 16, 2021 to June 30,

						2021
				Revenue		19,574

				Net income from continuing operations (100%)			465
				Post-tax loss from discontinued operations (100%)			(33)
				Total comprehensive income			432

				Company's share of total comprehensive loss		(2,860)


				Initial investment in Coinsquare		45,507
				Step up investments in Coinsquare		59,156
				Total investments in Coinsquare		104,663
				Share of loss in associate		(2,860)
				Carrying amount of equity accounted investment		101,803

				Mogo's share of:
				Loss from continuing operations		(2,852)
				Loss from discontinued operation - after tax			(8)
				Other comprehensive income			-
				Total other comprehensive loss		(2,860)



		F-28

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three and six months ended June 30, 2021 and 2020
			19.	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-29

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three and six months ended June 30, 2021 and 2020
			19.	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. There has not been any transfer between fair value hierarchy levels during the year. The fair value disclosure of lease liabilities is also not required.
								Carrying amount							Fair value
	Financial
	asset at	Other
			June 30,2021							Mandatorily	amortized	financial
						Note				at FVTPL	cost		liabilities Total Level 1 Level 2 Level 3 Total
			Financial assets measured at fair value


			Investment portfolio:

			Equities
													19,173	—								— 19,173	—	253 18,920 19,173
			Derivative assets			18
													30,321	—								— 30,321	—	— 30,321 30,321

													49,494	—								— 49,494
			Financial assets not measured at fair value


			Cash and cash equivalent
	—	55,406										— 55,406 55,406	—	— 55,406
			Loans receivable – current 4
	—	56,203										— 56,203	— 56,203	— 56,203
			Loans receivable – non-current
						4	—	496								—	496					—	—	651	651
			Other receivables
	—													1,637	—			1,637	—	1,637	—	1,637

	— 113,742										— 113,742
			Financial liabilities measured at fair value


			Derivative stock warrants 12
													13,690	—								— 13,690	— 13,690	— 13,690

													13,690	—								— 13,690
			Financial liabilities not measured at fair value

			Accounts payable and accruals
							—	—	16,075 16,075									— 16,075	— 16,075
			Credit facilities			9
	—	—	37,476 37,476										— 37,476	— 37,476
			Debentures			10
	—	—	40,053 40,053										— 40,053	— 40,053

	—	—	93,604 93,604

		F-30

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three and six months ended June 30, 2021 and 2020
			19.	Fair value of financial instruments (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:

				Equities
									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.
				The following tables show the valuation techniques used in measuring Level 3 fair values for financial instruments in the statement of financial position, as well as the significant unobservable inputs used.
		F-31

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three and six months ended June 30, 2021 and 2020
			19.	Fair value of financial instruments (Continued from previous page)
				Financial instrument measured at FV
						Inter-relationship between significant unobservable inputs and FV
		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

		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 stock warrants liability	• Option pricing model	• None	• None
				Derivative financial assets
					• Option pricing model	• Equity volatility	• None
		F-32

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three and six months ended June 30, 2021 and 2020
			19.	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 June 30, 2021 and December 31, 2020 and classified as Level 3:

						June 30,		December 31,

							2021		2020
					Opening balance of Level 3 investments		18,291		20,691
					Additions		1,792		150
					Disposal		(4,670)	—
					Unrealized exchange loss		(377)		(247)
					Realized gain on investment portfolio		2,460	—
					Unrealized gain (loss) on investment portfolio		1,424		(2,303)
					Balance of level 3 investments, end of period		18,920		18,291

				Unrealized exchange loss for the three and six months ended June 30, 2021 were $130 and $377 respectively (three and six months ended June 30, 2020 – loss of $335 and gain of $254 respectively).
				Realized gain on investment portfolio for the three and six months ended June 30, 2021 were $nil and $2,460 respectively (three and six months ended June 30, 2020 - $nil).
				Unrealized gain (loss) on investment portfolio for the three and six months ended June 30, 2021 were a loss of $4,273 and gain of $1,424 respectively (three and six months ended June 30, 2020 – loss of $856 and $3,279 respectively).
				(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:
				June 30, 2021						Adjusted market multiple (5% movement)
											898	(898)

				December 31, 2020						Adjusted market multiple (5% movement)
											937	(937)
				During the three and six months ended June 30, 2021 there were no transfers of assets or liabilities within the fair value hierarchy levels.
		F-33

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three and six months ended June 30, 2021 and 2020
			20.	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 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.
		F-34

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three and six months ended June 30, 2021 and 2020
			20.	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 9 for further details.
				($000s)	2021	2022	2023	2024	2025	Thereafter
				Commitments - operational
				Lease payments	762	1,446	1,297	1,206	1,240	2,727
				Trade payables	7,240	—	—	—	—	—
				Accrued wages and other expenses
					9,532	—	—	—	—	—
				Interest – Credit Facilities (Note 9)
					1,967	1,967	—	—	—	—
				Interest – Debentures (Note 10)
					1,542	2,986	1,875	352	—	—
				Purchase obligations	526	1,052	—	—	—	—
					21,569	7,451	3,172	1,558	1,240	2,727
				Commitments – principal repayments

				Credit Facility – Other (Note 9)
					—	37,476	—	—	—	—
				Debentures (Note 10)	1,545	2,174	19,634	18,878	—	—
					1,545	39,650	19,634	18,878	—	—
				Total contractual obligations
					23,114	47,101	22,806	20,436	1,240	2,727


		F-35

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three and six months ended June 30, 2021 and 2020
			21.	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 June 30, 2021, there are 68,803,294 common shares and no preferred shares issued and outstanding.
				(b)	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 an additional 536,000 options issued, which were granted pursuant to the Company’s prior stock option plan (the “Prior Plan”). As at June 30, 2021, there are 449,333 of these options outstanding that do not contribute towards the maximum number of common shares reserved for issuance under the Plan as described above.
				In connection with the acquisition of Moka, the Company 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 with a contractual life of eight years.
				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 $
				As at 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	—			—
				As at December 31, 2020					4,977		—			3.07	2,965	3.47
				Options granted					2,125		6.47	10.72	—				—
				Exercised					(745)		—			1.77	—			—
				Forfeited					(24)		—			3.33	—			—
				As at June 30, 2021					6,333		—			5.82	2,783	4.01

				The above noted options have expiry dates ranging from November 2021 to December 2029.

		F-36

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three and six months ended June 30, 2021 and 2020
			21.	Equity (Continued from previous page)
				The fair value of each option granted was estimated using the Black-Scholes option pricing model with the following assumptions:

					For the
For the
					six months
year ended
					ended
December 31,
					June 30,
2020
					2021
				Risk-free interest rate	0.58% 0.32% - 0.39%
				Expected life	5 years	5 years
				Expected volatility in market price of shares	84%	72% - 77%
				Expected dividend yield	0%		0%
				Expected forfeiture rate	15%	15%
				These options generally vest either immediately or monthly over a three to four year period after an initial one year cliff.
				Total share-based compensation costs related to options and RSUs for the three and six months ended June 30, 2021, were $3,805 and $4,362 respectively (three and six months ended June 30, 2020 - $460 and $674 respectively). The Company issued 17,500 shares to suppliers in lieu of services received for a cost of $164.
				(c)				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 of the Company’s 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 of Directors. 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 June 30, 2021 are as follows:

Number of
							RSUs (000s)
				As at December 31, 2019			141
				Converted			(59)
				Expired			(5)
				As at December 31, 2020			77
				Converted			(21)
				Expired			(4)
				As at June 30, 2021			52

		F-37

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three and six months ended June 30, 2021 and 2020
			21.	Equity (Continued from previous page)
				(d)	Warrants

							Weighted	Weighted
		Warrants					Average	Warrants	Average
		Outstanding					Exercise	Exercisable	Exercise

						(000s)	Price $	(000s)	Price $
				As at December 31, 2019					1,196	2.96	598	2.96
				Warrants granted					4,829	1.98	—	—
				Warrants exercised					(990)	2.03	—	—
				As at December 31, 2020					5,035	1.80	4,386		1.88
				Warrants granted					267	—	—	—
				Warrants exercised					(3,497)	1.75	—	—
				As at June 30, 2021					1,805	3.98	1,572		4.38

				The 1,805,443 warrants outstanding noted above have expiry dates ranging from January 2021 to August 2023, and do not include the stock warrants accounted for as a derivative liability discussed in note 12.
				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. During the three and six months ended June 30, 2021, 121,556 and 2,184,183 Debenture Warrants were exercised into common shares resulting in cash proceeds of $247 and $4,434 respectively.
				On January 25, 2016, in connection with the original marketing collaboration agreement (the “Postmedia Agreement”) with Postmedia Network Inc. (“Postmedia”), Mogo issued Postmedia five-year warrants to acquire 1,196,120 common shares of Mogo at an exercise price of $2.96. 50% of the warrants were to vest in equal instalments over three years while the remaining 50% (the “Performance Warrants”) were to vest based on Mogo achieving certain quarterly revenue targets. Effective January 1, 2018, the Postmedia Agreement was amended and extended, with changes in the vesting terms of 598,060 Performance Warrants so that i) they vest equally over the remaining two years of the collaboration (50% in January 2020 and 50% in January 2021).
				Effective January 1, 2020, Mogo amended and extended the Postmedia Agreement for an additional two years expiring on December 31, 2022. Under the amended and extended Postmedia Agreement, Postmedia receives a quarterly revenue share payment of $263, reduced from $527 in Q4 2019. Further, the contractual life of 50% of the warrants previously issued to Postmedia was extended to seven years such that the new expiry date is January 25, 2023. Mogo also granted Postmedia additional 3.5-year warrants (the “New Warrants”) to acquire 350,000 common shares of Mogo at an exercise price of $3.537, which will vest in equal instalments over three years.
				On June 3, 2020, the Company entered into a further amendment with Postmedia pursuant to which Postmedia agreed to waive certain amounts payable by Mogo through December 31, 2020 in exchange for Mogo reducing the exercise price of the 1,546,120 common share purchase warrants previously issued to Postmedia, to $1.292.
				During March 2021, Postmedia exercised 1,312,787 warrants to purchase the same number of Company’s common shares at an exercise price of $1.292 per share. Mogo received cash payment of $1,696 pursuant to the exercise.
				On February 24, 2021, in connection with a US$54,000 registered direct offering, Mogo issued to investors warrants 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. Warrants issued to investors are denominated in a currency
		F-38

Mogo Inc.
	Notes to the Interim Condensed Consolidated Financial Statements
	(Expressed in thousands of Canadian dollars, except per share amounts)
		For the three and six months ended June 30, 2021 and 2020
			21.	Equity (Continued from previous page)
				other than the functional currency of the Company therefore do not meet the definition of an equity instrument and are classified as a derivative stock warrants. Refer to note 12 for more details.
				The Company also issued 267,327 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
					six months	For the
						ended	year ended
						June 30,	December 31,
						2021	2020
				Risk-free interest rate	0.48%-0.65% 0.32% - 0.39%
				Expected life		2 -3 years	3.5 -7 years
				Expected volatility in market price of shares		115%-122%	50% - 77%
				Expected dividend yield		0%	0%
				Expected forfeiture rate		0%	0%
			22.	Subsequent events
				Acquisition of Fortification:
				On May 17, 2021, Mogo entered into a binding letter of intent to acquire 100% of Fortification Capital Inc. (“Fortification”), a Canadian registered investment dealer, for a combination of approximately $1,050 in cash and 75,000 common shares of Mogo. The acquisition of Fortification would bring order execution only registration capabilities which is a necessary regulatory requirement for Mogo to offer stock trading to its members.
				Fortification is a registered investment dealer and a member of the Investment Industry Regulatory Organization of Canada. Among several benefits of the proposed acquisition, Mogo would acquire the necessary licenses, registration and technology – including an order management system and market data processing – to accelerate the development of the Company’s planned commission free stock trading solution.
				The assets and liabilities to be acquired from Fortification cannot be disclosed at this time because the Company is still in the process of completing the purchase price allocation process including the valuation of assets and liabilities and amounts allocated to acquired intangibles and goodwill.
				Return of capital from investment
				On July 26, 2021, a limited partnership set up by the former shareholders of Carta distributed all of its assets, comprising of Mogo common shares, to its unit holders.
				The Company held units in the limited partnership as part of its investment portfolio, with a book value of $2,385 at June 30, 2021. These holdings entitled Mogo to the return of 303,816 common shares of its own stock that it intends to retire. The derecognition of the investment and reacquisition of the Company’s own equity will be accounted for as a deduction from equity equal to the book value of the investment in the third quarter of 2021.
		F-39