Chemesis International : FY2022 Q3 Management Discussion and Analysis

CHEMESIS INTERNATIONAL INC.

(the "Company")

MANAGEMENT DISCUSSION AND ANALYSIS

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2022

This Management Discussion and Analysis ("MD&A") has been prepared by management in accordance with the requirements of National Instrument 51-102 and should be read in conjunction with the condensed consolidated interim financial statements and accompanying notes for the three and nine months ended March 31, 2022, and the related notes contained therein which have been prepared in accordance with International Financial Reporting Standards ("IFRS").

All dollar amounts are expressed in Canadian dollars, the reporting and functional currency of the Company, unless otherwise indicated.

DATE

This MD&A is prepared as of May 30, 2022.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This MD&A contains certain forward-looking statements and information relating to the Company that are based on the beliefs of its management as well as assumptions made by and information currently available to the Company. When used in this document, the words "anticipate", "believe", "estimate", "expect" and similar expressions, as they relate to the Company or its management, are intended to identify forward-looking statements. This MD&A contains forward-looking statements relating to, among other things, regulatory compliance, the sufficiency of current working capital, the estimated cost and availability of funding for the Company's operations. Such statements reflect the current views of management with respect to future events and are subject to certain risks, uncertainties and assumptions. Many factors could cause the actual results, performance or our achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements. This MD&A should be read in conjunction with the risk factors described in the Risk Factors section of this MD&A. Although the Company has attempted to identify important factors that could cause actions, events or results to differ materially from those described in the forward-looking statements, there may be other factors that cause actions, events, or results to differ from those anticipated, estimated or intended. Forward-looking statements contained herein are made as at the date of the MD&A. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements. The Company does not undertake to update any forward-looking statements except as required by applicable securities laws.

DESCRIPTION OF BUSINESS

The Company was initially incorporated as a wholly-owned subsidiary of International Zeolite Corp. On February 17, 2017, the Company entered into the vend-in agreement with International Zeolite Corp., pursuant to which the Company issued 5,653,676 Shares measured at a fair value of $0.0032 per Share to International Zeolite Corp., in exchange for International Zeolite Corp.'s 100% interest in Canadian Mining of Arizona Inc., a company incorporated under the laws of the State of Arizona. The Company and International Zeolite Corp. subsequently entered into an arrangement agreement dated February 17, 2017, pursuant to which the Company and Canadian Mining of Arizona Inc. were spun out of International Zeolite Corp. The arrangement was approved by the shareholders of International Zeolite Corp. on April 28, 2017 and by the Supreme Court of British Columbia on May 1, 2017. In connection with the arrangement, the Company applied to list its Shares on the TSX Venture Exchange. All conditions of the arrangement were completed as of May 30, 2017, and Shares of the Company began trading on the TSX Venture Exchange on June 5, 2017 under the symbol "CNG".

On July 17, 2018, the Company completed a reverse takeover transaction ("RTO") with 1145411 BC Ltd. ("1145411") under the terms of a share purchase agreement among the Company, 1145411, and certain shareholders of 1145411 dated July 16, 2018, pursuant to which the Company acquired all of the issued and outstanding shares of 1145411 in exchange for 1,604,008 Shares (on a post-consolidation basis) of the Company measured at a fair value of $6.10 per

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Share. 1145411 held 100% of the issued and outstanding capital stock of Bonhomie Labs LLC, a company which had operations in the cannabis industry in the United States of America, which in turn held, at the time, 51% of the issued and outstanding capital stock of SAP Global Inc., a company which had operations in the cannabis industry in the United States of America. Pursuant to the RTO, the Company changed its name from Canadian Mining Corp. to Chemesis International Inc. and de-listed from TSX Venture Exchange on July 17, 2018 and listed its Shares on the Canadian Securities Exchange ("CSE").

On July 20, 2018, the Company acquired certain licensed rights from SAP Global Inc. in exchange for 66,464 Shares measured at a fair value of $5.50 per Share (on a post-consolidation basis) and $110,000. Such rights included the brand name, trade name, and trademarks together with all of the patents, patent applications, and inventions.

On August 21, 2018, the Company acquired 100% of the issued and outstanding capital stock of Desert Zen LLC, a company which had operations in the cannabis industry in the United States of America, in exchange for $262,782 in cash and 65,250 Shares measured at a fair value of $5.25 per Share (on a post-consolidation basis).

On October 12, 2018, the Company acquired certain licensed rights from Rapid Dose Therapeutics Inc. ("RDT"), a Canadian bio-technology company which provides proprietary drug delivery technologies, providing the Company with rights to produce, distribute and sell RDT's QuickStrip oral fast-dissolving drug delivery system in cannabis markets in California, in exchange for $130,570 in cash and 17,356 Shares measured at a fair value of $10.80 per Share (on a post-consolidation basis).

On November 30, 2018, the Company acquired 80% of the issued and outstanding capital stock of Natural Ventures Puerto Rico, a company which had operations in the cannabis industry in the United States of America, in exchange for $3,724,280 in cash and 223,525 Shares measured at a fair value of $8.40 per Share (on a post-consolidation basis).

On January 11, 2019, the Company, pursuant to the terms of a share purchase agreement, acquired 100% of the issued and outstanding capital stock of La Finca Interacviva-Arachna MED SAS, a company which had hemp and CBD cultivation operations in Colombia, in exchange for which the Company assumed a promissory note of $5,500,000 and issued 748,000 Shares measured at a fair value of $9.66 per Share (on a post-consolidation basis) to the former shareholders of La Finca Interacviva-Arachna MED SAS.

On February 1, 2019, the Company completed a plan of arrangement under the Business Corporations Act (British Columbia) under the terms of an arrangement agreement with IMC International Mining Corp. ("IMC"), pursuant to which the Company spun out its various interests in mineral claims located in Yavapai Country, Arizona, into IMC. Upon completion of the arrangement, IMC owned 100% of the mineral claims located in Yavapai Country, Arizona. As a result of the arrangement, Shareholders of the Company received one-twentieth of one common share of IMC for every Share held as of December 9, 2018.

On April 1, 2019, the Company, pursuant to a share exchange agreement, acquired 19.9% equity stake in GSRX Industries Inc., a company which owned and operated cannabis dispensaries and other licensed cannabis businesses in the United States of America through various of its partially and wholly owned subsidiaries. Pursuant to the terms of the share exchange agreement, GSRX Industries Inc. issued 11,666,998 common shares to the Company in exchange for 729,187 Shares measured at a fair value of $17.74 per Share (on a post-consolidated basis). GSRX Industries Inc. also granted a pre-emptive right to the Company in order for it to maintain its ownership percentage.

On May 24, 2019, the Company acquired 60% of the issued and outstanding capital stock of Kieley Growth Management LLC, a company which had cannabis dispensary operations in California, United States of America, in exchange for which the Company acquired a non-interest-bearing promissory note of $1,346,800 due on May 24, 2020 and issued 67,231 Shares measured at a fair value of $13.09 per Share (on a post-consolidation basis) to the shareholders of Kieley Growth Management LLC.

On July 2019, the Company increased its ownership in SAP Global Inc. from 51% to 100% in exchange for the issuance of 100,000 Shares measured at a fair value of $17.80 per Share (on a post-consolidation basis) to the former shareholders of SAP Global Inc.

On August 28, 2019, the Company, pursuant to various share exchange agreements with certain shareholders of GSRX Industries Inc., acquired: (i) 42,634,124 common shares of GSRX Industries Inc. in exchange for 1,488,071 Shares

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measured at a fair value of $5.67 per Share (on a post-consolidation basis); and (ii) 1,000 preferred shares of GSRX Industries Inc. in exchange for 400,000 Shares of the Company measured at a fair value of $5.67 per Share (on a post- consolidation basis). Immediately after the transaction, the Company held a 66.39% common share interest and a 100% preferred share interest in GSRX Industries Inc.

On December 20, 2019, the Company completed a stock consolidation on the basis of one (1) post-consolidation Share for each ten (10) pre-Consolidation Shares.

On January 23, 2020, the Company closed a private placement of 13,506,030 units of the Company at a price of $0.370 per unit for total proceeds of $5,000,000. Each unit was comprised of one Share and one Share purchase warrant, which was exercisable for one Share at a price of $0.405 per Share for a period of 24 months.

On April 27, 2020, the Company entered into an arrangement agreement with its wholly-owned subsidiary, 1247262 B.C. Ltd., to spin-out La Finca Interacviva-Arachna MED SAS into 1247262 B.C. Ltd. However, during the year ended June 30, 2021, the Company entered into negotiations to dispose of 100% of its equity interest in La Finca Interacviva-Arachna MED SAS in exchange for the Company paying USD $100,000 to dispose of its liabilities. Such negotiations are ongoing.

In July 2020, the Company completed a non-brokered private placement of 5,235,300 units of the Company for total proceeds of $2,617,650, at a price of $0.50 per unit. Each unit consisted of one Share and one Share purchase warrant, which is exercisable for one Share at a price of $1.00 per Share for a period of 24 months.

Due to the declining cannabis market in the United States of America, as well as difficulties in securing the necessary licenses to continue its business in the production, distribution and sale of cannabis and cannabis related products (which, in part, were due to the COVID-19 global pandemic), in November 2020, the Company entered into sale agreements with Puerto Rico Industrial Commercial Holdings Biotech Corp. for the sale of substantially all the operating assets held by the Company's 80%-owned Puerto Rican subsidiary, Natural Ventures Puerto Rico, and substantially all of the Puerto Rican assets of Project 1493 LLC, a wholly-owned Puerto Rican subsidiary of the Company's 66%-owned American subsidiary, GSRX Industries Inc.

Specifically, on November 11, 2020, GSRX Industries Inc.'s subsidiary, Project 1493 LLC entered into an asset purchase agreement with Puerto Rico Industrial Commercial Holdings Biotech Corp. to sell and transfer all of Project 1493 LLC's operating assets in Puerto Rico in consideration for US$3,993,333 cash. Additionally, Puerto Rico Industrial Commercial Holdings Biotech Corp. assumed all of Project 1493 LLC's liabilities in respect of the assets sold and the leases assumed.

Further, on November 13, 2020, Natural Ventures Puerto Rico entered into a sales agreement with Puerto Rico Industrial Commercial Holdings Biotech Corp. to sell and transfer all of Natural Ventures Puerto Rico's operating assets in Puerto Rico in consideration for US$550,000 cash. On November 17, 2020, the Company transferred all of Natural Ventures Puerto Rico's licenses and operations to Puerto Rico Industrial Commercial Holdings Biotech Corp. On November 27, 2020, the Company withdrew its membership interest in Natural Ventures Puerto Rico in substance transferring them to the Edgar Montero, the CEO of the Company, who then transferred the membership interests to Puerto Rico Industrial Commercial Holdings Biotech Corp.

On January 19, 2021, the Company completed a non-brokered private placement of 3,687,419 units for total proceeds of $1,200,000, at a price of $0.325 per unit. Each unit consisted of one Share and one Share purchase warrant, which is exercisable for one Share at a price of USD$0.34 per Share for a period of 24 months.

On November 29, 2021, the Company completed a private placement for gross proceeds of $1,247,200 through the issuance of 10,393,335 units at a price of $0.12 per unit. Each unit consisted of one Share and one Share purchase warrant, which is exercisable for one Share at a price of $0.15 per Share for a period of 24 months.

On January 11, 2022, the British Columbia Securities Commission ("BCSC") issued a Cease Trade Order ("CTO") to the Company for failure to file its annual audited financial statements and management discussion and analysis for the year ended June 30, 2021 and its interim financial statements and management discussion and analysis for the three months ended September 30, 2021 (the "Documents"). The Company filed the Documents on March 25, 2022 and the BCSC issued a revocation order on March 29, 2022.

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The Company previously operated in the cannabis industry. The Company intends to change its business to mineral exploration and development with a focus on identifying, evaluating and acquiring interests in mineral properties in North America. The Company has identified its first acquisition of an interest in a mineral property in British Columbia, Canada. Refer to Section 4 - The Business of the Meeting - 1. Change of Business and Option to Acquire a Mineral Property - D. - Terms of the Option Agreement for the Rose Property and Section 4 - The Business of the Meeting - 1. Change of Business and Option to Acquire a Mineral Property - E - Description of the Property below for more. In addition to this mineral property, the Company is also reviewing other mineral properties in North America for possible acquisitions in the future.

The Company's change in focus to mineral exploration and development will constitute a Change of Business ("COB") as defined by Policy 8 of the CSE. Under CSE Policy 8, a proposed COB is subject to a complete review by the CSE, and final approval of a COB is subject to a number of conditions, including shareholder approval and delivery of documentation required by the CSE. The completion of the COB is also subject to the closing of the Equity Financing (as defined below) and securing the Loan Facility (as defined below). Following completion of the COB, it is anticipated that the Company will be listed on the CSE as a Mining Issuer under the name "Core Battery Metals Corp." and the ticker symbol "CORX".

COVID-19

In March 2020, the World Health Organization declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, potentially leading to an economic downturn. It is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on the Company's business.

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KEY BUSINESS ACTIVITIES

Chemesis International Inc. ("Chemesis" or "the Company") was incorporated under the Business Corporations Act of British Columbia on April 26, 2013. Chemesis' registered records office is Suite 2200 - 885 West Georgia Street, Vancouver, BC V6C3E8 and the corporate head office is at Suite 2200 - 885 West Georgia Street, Vancouver, BC V6C3E8. The Company trades on the Canadian Securities Exchange ("CSE") under the symbol CSI, on the OTC markets under the symbol CADMF, and on the Frankfurt Stock Exchange under the symbol CWAA.

The Company is pursuing a change in business under of the CSE. See Transactions in Progress.

During the nine months ended March 31, 2022, the Company entered into an option agreement with Geomap Exploration Inc.("Geomap"), a privately-owned BC company, to acquire up to 100% interest in the Rose Property which is located in the Kamloops Mining Division in British Columbia. As such, the Company is in the process of completing a Change of Business ("COB") as defined by Policy 8 of the CSE. Upon completion of the COB, the Company will rename itself as Core Battery Metals Corp, under the ticker "CORX". See Note 5.

During the year ended June 30, 2021, the company entered into sale agreements with Puerto Rico Industrial Commercial Holdings Biotech Corp, for the sale of the Company's partially-owned subsidiary Natural Ventures Puerto Rico and all of the Puerto Rican assets of Project 1493, GSRX's wholly-owned subsidiary. Further, during the nine months ended March 31, 2022, the Company was in active negotiations with a seller to dispose of 100% of the shares of La Finca. Accordingly, the related assets and liabilities have been presented separately on the statement of financial position as at March 31, 2022 and June 30, 2021. Additionally, the sum of the post-tax loss of the discontinued operations and post-tax gain or loss recognized on the measurement to fair value less cost to sell or fair value adjustments on the disposal of the assets has been presented as a single amount on the face of the statement of comprehensive income. See Note 6.

In March, 2020 the World Health Organization declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, potentially leading to an economic downturn. The Company's operations have not been affected by the COVID-19 global pandemic.

Subsidiaries and their activities

GSRX now has minimal operations and is seeking new opportunities and strategic acquisitions.

During the nine months ended March 31, 2022, the Company entered into an agreement to sell substantially all of the assets of the Green Spirit Mendocino, LLC for USD $200,000.

During the nine months ended March 31, 2022, the Company entered into negotiations with an arm's length party to dispose of the Company's remaining ownership of GSRX, being 54,301,122 common shares and 1,000 preferred shares of GSRX. The company is in active negotiations with the counterparty, however the net assets of the GSRX disposal group were written down to $nil.

During the year ended June 30, 2021, the Company entered into negotiations to dispose of 100% of its equity interest in La Finca and as at December 31, 2021, its assets and liabilities were classified as held for sale. This is due to the difficulties causing costly delays in obtaining the requisite licensing for distribution and commercialization of its hemp operations.

The Company started Vending Co. in fiscal 2021 which held CBD distribution vending machines. The Company was unable to secure large retail contracts and now looks to liquidate its operations and sell the assets. The assets of Vending Co. are currently recognized within assets held for sale.

Business acquisitions

None to report during the period ended March 31, 2022.