Triton Emission Solutions Inc.

At March 31, 2020, the Company owed KFBV a total of $4,390,338 under a loan agreement dated for reference February 11, 2014, as amended on March 10, 2014, September 8, 2014, and on December 17, 2015 (the “First KF Loan”). The principal under the First KF Loan accumulated interest at 10% per annum compounded monthly. The Company did not repay the First KF Loan on January 15, 2017, its amended maturity date, therefore as of January 15, 2017, the interest rate increased to 15%, the default rate  of interest, and the Company recorded a penalty of $131,978, representing 5% of the full balance due under the First KF Loan on its maturity.

In consideration for the First KF Loan, as amended, the Company issued to KFBV non-transferrable share purchase warrants to purchase an aggregate of 10,448,878 shares of its common stock at an exercise price of $0.10 per share, as amended. Warrants for 9,254,546 expire on January 15, 2021, and warrants for 1,194,332 shares expire on September 1, 2021 (the “First KF Warrants”). The First KF Warrants include a down-round provision whereby the exercise price of the First KF Warrants could be adjusted to the lowest offering price of any options, warrants or shares issued subsequent to the issuance of the First KF Warrants; in case of the Company defaulting on repayment of the First KF Loan, the First KF Warrants can be exercised at a 50% discount to volume weighted average price of the common stock of the Company over the five trading days preceding the date of exercise.

In consideration for the Second KF Loan, as amended, the Company issued to KFBV non-transferrable share purchase warrants to purchase an aggregate of 10,937,320 shares of its common stock at an exercise price of $0.10 per share, as amended. Warrants for 9,600,000 expire on January 15, 2021, and warrants for 1,337,320 shares expire on September 1, 2021 (the “Second KF Warrants”). The Second KF Warrants include a down-round provision whereby the exercise price of the Second KF Warrants could be adjusted to the lowest offering price of any options, warrants or shares issued subsequent to the issuance of the Second KF Warrants; in case of the Company defaulting on repayment of the  Second KF Loan, the Second KF Warrants can be exercised at a 50% discount to volume weighted average price of the common stock of the Company over the five trading days preceding the date of exercise.

In March of 2020, the World Health Organization declared an outbreak of COVID-19 Global pandemic. The COVID-19 has impacted vast array of businesses through the restrictions put in place by most governments internationally, including the USA federal government as well as provincial and municipal governments, regarding travel, business operations and isolation/quarantine orders. At this time, it is unknown to what extent the impact of the COVID-19 outbreak may have on the Company as this will depend on future developments that are highly uncertain and that cannot be predicted with confidence. These uncertainties arise from the inability to predict the ultimate geographic spread of the disease, and the duration of the outbreak, including the duration of travel restrictions, business closures or disruptions, and quarantine/isolation measures that are currently, or may be put, in place world-wide to fight the virus. While the extent of the impact is unknown, the COVID-19 outbreak may hinder the Company’s ability to raise financing for operating costs due to uncertain capital markets, supply chain disruptions, increased government regulations and other unanticipated factors, all of which may also negatively impact the Company’s business and financial condition.