Zonetail : Management Discussion and Analysis

ZONETAIL INC.

Management's Discussion and Analysis

Six months ended June 30, 2022

ZONETAIL INC.

Management's Discussion & Analysis

Six months ended June 30, 2022

Introduction

The following Management Discussion and Analysis ("MD&A") of the financial condition and results of operations of Zonetail Inc. ("Zonetail" or the "Company") has been prepared by management as of August 26, 2022 and was reviewed and approved by the Audit Committee, and is intended to supplement and complement the condensed unaudited interim consolidated financial statements and notes thereto, prepared in accordance with International Accounting Standard 34 Interim Financial Reporting ("IAS 34") as issued by the International Accounting Standards Board ("IASB"), for the six months ended June 30, 2022 (collectively, the "Financial Statements"). The following discussion of performance, financial condition and prospects should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2021 and the MD&A for the year ended December 31, 2021. The information provided herein supplements but does not form part of the financial statements. All amounts are stated in Canadian dollars unless otherwise indicated.

Further information about the Company and its operations can be obtained from the Company's website www.zonetail.com or on SEDAR at www.sedar.com.

Description of business

Zonetail is an emerging company focused on transforming the way high and mid-rise residents manage their homes by connecting people to products, amenities and services through a powerful mobile platform creating a distinct market and channel advantage. The Company is integrated with Yardi, North America's largest property management software company ("PMC") and Shiftsuite, a major condo property management software company in Canada.

The Zonetail platform is addressing the needs of the large and growing population of residents of multi-family residential buildings, planned communities, condominium communities, and housing cooperatives. Increasing population growth and urban densification continue to grow this segment which in 2020 was estimated to be 26% of all U.S. residents1. This mobile and technology-savvy audience have proven to be active adopters of the Zonetail app as all key indicators, property management companies signing on, downloads and monthly active users, all continue to increase at a steady pace.

The Zonetail user base, and immediate addressable market also proves to be an attractive audience for businesses participating on the platform in Zonetail's unique marketplace called 'Explore', who wish to connect with this large, lucrative, and growing market of high-rise residents.

Currently, Zonetail is live in over 110,000 households and onboarding an additional 23,000, and as a direct result of the early success of the Yardi rollout, the Company is in various stages of negotiations with dozens more property management companies across Canada and the U.S. representing over 500,000 units.

Highlights

2022

• The Zonetail Home app and Explore plug-in are live or in the process of rolling out in approximately 30,000 units.
• Zonetail is also partnered with Shiftsuite, a leading property management software provider to the condo industry in Canada. The app under the Shiftsuite label is 'live' and in revenue in over 100,000 households. It is expected that the current number of units and users will continue to grow.
• The Zonetail Home and Shiftsuite platforms, bring the portfolio of units to over 130,000 units.
• In early 2022, the Company introduced its new strategy, blueprint, and playbook, outlining the creation of a dynamic Market Network.

• https://foundation.caionline.org/publications/factbook/statistical-review/

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ZONETAIL INC.

Management's Discussion & Analysis

Six months ended June 30, 2022

• In addition to Thumbtack mentioned above, the Company has reported the signing of a major US telecom company, Apollo insurance, Nerds on Site, Pineapple Express Delivery (cannabis delivery), Bellhop (moving services), and Getintheloop (a local advertising platform), all to be part of the Market Network.
• In July 2022, the Company announced a major new initiative, partnered with Fortis, a leading North American payment processing and technology company, with the objective to provide resident of our property management companies the ability pay their rent through our apps.
• While the Company is currently focused upon the residential market, Zonetail is partnered with AAHOA, the largest association of hoteliers in the world, representing over 30,000 hotels and and estimated 65% of the US hotel market. This part of the platform is being redeveloped to meet the needs of the market for the future.

2021

• The Company completed is integration with Yardi and launched this new platform across North America, 'Zonetail Home' signifying a major milestone, where Yardi has the majority of the market share.
• In conjunction with the Yardi integration, the Company completed a new residential platform and APIs designed to seamlessly integrate with other property management systems.
• In November 2021, the Company introduced its "Explore" plug-in designed to provide the Zonetail 'Explore' marketplace local and national content to Yardi RENTCafé and CONDOCafé users.
• In the fall of 2021, the Company signed 3 property management companies to the Zonetail Home platform including Grubb Properties, which is using RENTCafé.
• In November 2021, the Company signed an integration agreement with Thumbtack, a U.S. based "modern home management platform", bringing Thumbtacks thousands of service providers and contractors to our users. Zonetail will receive transactional revenue for each service booked.

Business outlook

In early 2022, the Company unveiled its comprehensive new strategy, blueprint, and playbook with the creation of a Market Network that combines elements of network platforms with marketplaces and are producing a new class of unicorn companies, impacting how millions of service professionals will work and earn their living. Market networks are also unique from a monetization standpoint. They combine the

strong network effects, defensibility, and scalability of direct networks (social media) together with the lucrative revenue models of SaaS or marketplace businesses. Further details of Zonetail's new strategy and the exciting evolution of its business plan can be found by downloading our new Corporate Presentation, here: https://www.zonetail.com/wp-content/uploads/2018/09/Zonetail-Corporate-Deck-2022-02-28.pdfas well as the company corporate update press release found here:https://www.zonetail.chttps://www.zonetail.com/2022/04/11/zonetail-provides-corporate-and-strategy- update/om/2022/04/11/zonetail-provides-corporate-and-strategy-update/

The Marketplace: A few Highlights

• Leading telecommunications providers: strategic partnerships with two leading telecom providers in Canada and the US enabling them to communicate directly to high-rise residents, offering a wide range of residential services, including cable tv bundles, WiFi, and home phone.
• Thumbtack: a modern home management platform that enables residents to book a variety of home services. Thumbtack is fully integrated with Zonetail establishing an immediate market network by offering a high-value service option of approximately 5,000 services, provided by hundreds of thousands of service providers across the United States.
• Bellhop: a tech-enabled moving company that Zonetail users can access from the app. It streamlines the cost estimation and booking experience for residents while assigning them to the best moving professionals for the job.
• Apollo Insurance: a leading online insurance provider that enables Zonetail's users to get a quote and purchase from the largest selection of online insurance in Canada.

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ZONETAIL INC.

Management's Discussion & Analysis

Six months ended June 30, 2022

• Nerd on Site: Partnering with Nerds, gives Zonetail users immediate access to one of the largest and most trusted IT solutions companies in North America. Through the Zonetail platforms, Nerds will have the ability to communicate directly to residents, offering a wide range of services and solutions to fit their needs - whether it's a computer operating system reinstall, a full data recovery project, printer repair and service, wifi and network setup, smart home solutions to tv mounting and home theater setup and more. Zonetail will receive a transaction fee of 7.5% for all Nerds services booked through its mobile platforms.
• Pineapple Express Delivery and Fire and Flower: Through Zonetail's unique age-gated section, Fire & Flower cannabis stores is now a provider of cannabis to users of the platform and deliveries will be fulfilled through Pineapple Express to households across Canada and in the U.S. where it is legal to do so.
• The Company is currently in discussions with several other potential network partners across the U.S. and Canada in including major food delivery options, ride-sharing, restaurant and retail chains, media and streaming companies, banks, grocery chains, U.S. based insurance companies, among many others.

Yardi

On July 20, 2021, Zonetail announced the successful completion of the beta test integration with Yardi, laying the foundation to dramatically increase the number of condo and apartment buildings in the Company's portfolio.

• Yardi is the largest property management software provider in North America, with tens of thousands of buildings representing millions of residents.
• Zonetail's new residential platform, named, 'Zonetail Home' is now available for download in both the AppStore and GooglePlay.
• Zonetail has begun the rollout with Yardi property management corporations, launching with partnered PMCs in Canada and the U.S. On April 13th, the Company announced its U.S. launch across eight cities. The Company continues to add to its sizable half-a-million unit funnel and its in discussions with several other leading property management corporations across North America, including some of the largest, to onboard the Zonetail Home and/or the Zonetail Explore plug-in platform for their buildings and their residents.
• In the fall of 2021, Zonetail launched a platform to Yardi clients that utilize Yardi's premium platforms, RentCafe and CondoCafe.
• Yardi's RentCafe and CondoCafe include mobile platforms, so the full 'Zonetail Home' platform is not needed for these properties. However, CondoCafe and RentCafe do not have the marketplace component. Zonetail's new standalone web-based "Explore" marketplace can be added to these platforms. This is expected to increase Zonetail's user base as these Yardi platforms are already well established with active users.

Technology updates

The Company is working on new technology updates, features, integrations with strategic partners and more.

Three of the current integrations being implemented include; a payment processing system allowing residents to pay their rent through our apps, in partnership with Fortis, a leading payment processing and technology company operating across the U.S. and Canada; to include a feed for local area deals into the app across the Canadian market (GetintheLoop); and third, is the integration efforts for Pineapple Express Delivery to streamline the ordering and delivery of medicinal and recreational cannabis products across North America in the areas where it is legal to do so.

Capital management

The Company manages its capital with the following objectives:

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ZONETAIL INC.

Management's Discussion & Analysis

Six months ended June 30, 2022

• to ensure sufficient financial flexibility to achieve the ongoing business objectives including funding of future growth opportunities, and pursuit of accretive acquisitions; and
• to maximize shareholder return through enhancing the share value.

The Company monitors its capital structure and makes adjustments according to market conditions in an effort to meet its objectives given the current outlook of the business and industry in general. The Company may manage its capital structure by issuing new shares, repurchasing outstanding shares, adjusting capital spending, or disposing of assets. The capital structure is reviewed by management and the Board of Directors on an ongoing basis.

The Company manages capital through its financial and operational forecasting processes. The Company reviews its working capital and forecasts its future cash flows based on operating expenditures, and other investing and financing activities. Selected information is provided to the Board of Directors of the Company. The Company is not subject to any capital requirements imposed by a lending institution or regulatory body.

Commitments and contingencies

From time to time, the Company may be subject to legal proceedings and claims related to matters arising in the ordinary course of business. We do not believe the Company is currently subject to any material matters where there is at least a reasonable possibility that a material loss may be incurred.

See "dispute" above related to the Belgravia dispute.

Off-balance-sheet arrangements

As of the date of this MD&A, the Company does not have any off-balance-sheet arrangements that have, or are reasonably likely to have, a current or future effect on the results of operations or financial condition of the Company, including, and without limitation, such considerations as liquidity and capital resources.

Summary of quarterly results

For the eight most recent quarters:

	June 30	March 31	December 31	September 30
	2022	2022	2021	2021
	$	$	$	$
Total revenue	4,200	5,344	4,200	10,730
Net loss for the period	(583,390)	(491,903)	(513,005)	(546,940)
Net loss per share (basic and diluted)	0.00	0.00	0.00	0.01
Total assets	464,057	765,461	1,251,251	1,831,269

	June 30	March 31	December 31	September 30
	2021	2021	2020	2020
	$	$	$	$
Total revenue	10,570	15,386	20,700	4,200
Net loss for the period	(513,226)	(360,976)	(639,766)	(369,187)
Net loss per share (basic and diluted)	0.00	0.00	0.01	0.00
Total assets	1,884,486	742,878	243,652	605,705

Variations in net loss and comprehensive loss primarily result in changes to software development expense, professional fees, share based compensation, changes in salaries from 2021 to 2022 and general and administrative costs.

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