Quantum eMotion : MD&A June 30th 2022

QUANTUM eMOTION CORP.

Management's Discussion and Analysis

June 30, 2022

QUANTUM eMOTION CORP. (formerly Quantum Numbers Corp.)

The following analysis should be read in conjunction with the annual financial statements, including accompanying notes, of Quantum eMotion Corp. ("the Company") for the year ended December 31, 2021. The unaudited condensed interim financial statements for the quarter ended June 30, 2022, including comparative figures, have been prepared in accordance with IFRS applicable to the preparation of interim financial statements, including IAS 34, Interim Financial Reporting. All amounts are in Canadian dollars unless otherwise indicated.

Further information regarding the Company and its operations are filed electronically on the System for Electronic Document Analysis and Retrieval ("SEDAR") in Canada and can be obtained from www.sedar.com.

1.1 FORWARD LOOKING STATEMENTS

The sections of this management discussion and analysis ("MD&A") on the Company's strategy and action plan, its intellectual properties, development and financial reporting reflecting management's current expectations contain "forward-looking statements." Such statements should be understood in context, particularly statements that reflect the Company's opinions, estimates and expectations about future events or results. Such forward-looking statements are subject to certain factors and involve some risks and uncertainties. There can be no assurance that such statements will prove to be accurate. Factors that could cause future results, activities and events to differ materially from those expressed or implied by such forward-looking statements include, but not limited to, possibility or not to obtain the patent, time required to obtain such patent, risks inherent in the hi-tech industry, and the time it will take for the industry to be ready to move to quantic solutions. These risks and uncertainties are described in this MD&A and also the annual information form filed on SEDAR.

1.2 INCORPORATION, NATURE OF OPERATIONS AND GOING CONCERN

Quantum eMotion Corp. was incorporated under the Business Corporations Act of Ontario on July 19, 2007.

The head office, principal address and records office of the Company are located at 2300 Alfred Nobel, bureau 209, Montreal, Qc, H4S 2A4. The Company is a developer of a new generation of cryptographic solutions pursuant to the acquisition of intellectual property (See 1.8).

The business of technology involves a high degree of risk and there can be no assurance that projects under research and development will proceed through to achieve commercialization. Risks related to the value of the Company's intangible assets, completing proof of concept studies, protecting intellectual property rights, the ability of the Company to raise additional financing, and risks inherent to new technologies, such as risk of obsolescence, slow adoption and competing technological advances. Changes in future conditions could require material impairment of assets.

These financial statements have been prepared in accordance with International Financial Reporting

Standards ("IFRS") on a going concern basis, which contemplates that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. For the six months ended June 30 2022, the Company incurred a net loss of $1,232,849 (2021 - $849,857) and had negative cash flows from operations of $911,099 (2021 - $949,227). In addition, the Company had accumulated deficit of $9,201,189 as at June 30, 2022.

Management expects that the working capital (current assets in excess of current liabilities) available to the Company at June 30, 2022, provides the Company with adequate funding to meet its short-term obligations for the next 12 months and to meet the timelines of its development programs and pay its overhead and administrative costs. However, the Company does not expect to generate revenue from product sales unless and until it successfully completes development of its cryptographic solutions, which may take a number of years and is subject to significant uncertainty.

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QUANTUM eMOTION CORP. (formerly Quantum Numbers Corp.)

1.2 INCORPORATION, NATURE OF OPERATIONS AND GOING CONCERN (Continued)

The Company expects to incur significant development and commercialization expenses related to product development sales, marketing and distribution. As a result, the Company will need additional financing in the future to support its continuing operations. Until such time that it can generate significant revenue from product sales, if ever, the Company expects to finance its operations through a combination of public or private equity or debt financings or other sources.

The Company currently has no committed sources of financing available. While the Company has been successful in securing financing in the past, raising additional funds is dependent on a number of factors outside the Company's control, and as such there is no assurance that it will be able to do so in the future. The ability of the Company to meet its commitments and discharge its liabilities as they become due and become profitable is dependent on the completion of the development of its technology and its commercial production, and on its ability to raise additional funding to finance these activities. The conditions mentioned above indicate the existence of a material uncertainty that may cast a significant doubt as to the Company's ability to continue as a going concern.

The financial statements do not reflect the adjustments to the carrying values of assets and liabilities

that would be necessary if the Company wereunable to realize its assets or discharge its obligations Commenté [SG1]: was? in anything other than the ordinary course of operations.

In February 2022, Russia invaded Ukraine. The impact of this conflict remains difficult to assess but is adding to the challenges associated with the pandemic, including inflation and supply chain issues, and has created additional awareness on the cybersecurity's threats and vulnerabilities.

1.3 SENIOR MANAGEMENT CHANGESNone.

1.4 COMPANY OVERVIEW AND STRATEGY

INTELLECTUAL ACTIVITIES

The primary management objective has been to strengthen the Company in the following three sectors of activities:

Technology

Our primary objective is to make our cryptographic solutions technology accessible as rapidly as possible to potential clients and partners, secure its effectiveness and ensure that the Intellectual Property is well protected. In order to stay focused on this objective, we are closely working with our partners to maximize the potential and security of our technology. The Company is developing complementary metal-oxide semiconductor ("CMOS") implementations with l'École de Technologie Supérieure ("ETS") to ensure greater competitiveness. During the first quarter of 2021, the Company and ETS were awarded a $250,000 grant from Prompt under its Quantum development program covering between 40% to 60% of eligible cost to develop three different CMOS implementations. The development work is ongoing in collaboration of Dr Ghyslain Gagnon and the ETS.

1.4 COMPANY OVERVIEW AND STRATEGY (Continued) INTELLECTUAL ACTIVITIES (Continued)

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QUANTUM eMOTION CORP. (formerly Quantum Numbers Corp.)

Technology (Continued)

On June 17, 2021, the Company chose Syntronic to finalize the design and prepare the manufacturing of its first commercial hardware product with a view of having a workable and marketable device prior to year end. On March 22, 2022, the Company issued a press release confirming the launch of its game changer QRNG2, a new quantum random number generator (QRNG) that delivers pure entropy at 1.5 Gb/s, the highest throughput available today in a marketable QRNG. This major breakthrough was achieved within our budget parameters despite challenges imposed by major supply chain issues. In a first phase, 10 devices have been produced and are currently at different testing stages.

During the past quarter the company has accelerated its R&D expenses as indicated in the presentation from the CEO. Secured messenger, blockchain application and other verticals are the focus of the company for the application and usage in products of its patented technology.

Patents

As of today, the Company owns two patent families which have been filed in several countries, and which have led to the issuance of several patents.

The first patent family stems from work performed at Sherbrooke University, by the team of Professor Bertrand Reulet, and was acquired by the Company.

As the Company required its patent to pass the introduction level with potential clients, it was then decided to work with the Company's patent agent to assess the patentability of our technology. The Company received the final report that indicates that it should continue the National/Regional Phase as planned. By doing the legwork at the stage of the patentability report, the Company was able to respond rapidly to objections which were raised at the national/regional level, such as objections raised by the European Patent Office ("EPO") examiner. The general scope of the first patent family is related to the use of a monitored flow of electrons across a quantum tunnelling barrier as a quantum random signal source which is then used to produce random numbers.

The second patent family stems from work performed internally by the family and generally concerns technology which was developed to eliminate non-quantum noise from the quantum signal and therefore allow ensuring that the random numbers are purely random and entirely based on quantum processes.

In October 2021, the Company filed for a patent application covering a minimalistic circuit which utilizes the computer's hardware to both power an on-chip quantum entropy source and turn the resulting entropy signal into random numbers of quantum origin on the go. The product will eventually be a plug-and-play ultraportable QRNG module that provides easy-to-use hardware protection for consumer electronics.

On June 19, 2022 Brazil became the latest major country to indicate its willingness to grant the

METHOD FOR GENERATING RANDOM NUMBERS AND ASSOCIATED RANDOM NUMBER GENERATOR patent. Ongoing efforts are being made to ensure that all relevant jurisdiction are covered as the patents and our patent strategy is core to the success of the company.

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Commenté [SG2]: Partie manquante?

Commenté [mr3R2]: non

QUANTUM eMOTION CORP. (formerly Quantum Numbers Corp.)

1.4 COMPANY OVERVIEW AND STRATEGY (Continued) INTELLECTUAL ACTIVITIES (Continued)

Status of patents

First Patent Family Method for generating random numbers and associated random number generator

Country	Status
United States	Two patents were granted in the United States, including a first one
	granted on August 7, 2018 and a second granted on October 8, 2019.
Russia	Patent granted
European Patent	EPO granted the patent on February 19, 2020. The EPO process
Office	includes an opposition procedure by which third parties may oppose
	the grant. The opposition procedure expired November 19, 2020 and
	the European Patent has been validated in a number of countries:
	Germany, Spain, Finland, France, Great-Britain, Italy and the
	Netherlands.
Thailand, Canada,	Patent pending
Brazil, India, Republic
of Korea
Australia	Patent granted in June 2020
China	Patent granted
Second Patent Family Method and system for generating a random bit sample
Country	Status
European Patent	EPO granted the patent on October 23, 2019, and the opposition
Office	period ended on July 23, 2020. The European Patent has been
	validated in Germany, Spain, Finland, France, Italy, Sweden and the
	Netherlands.
United States	Two patents were granted.
Australia, Brazil,	Patent pending
Indonesia, India,

Japan, South Korea,

Russia

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