PATRIOT ONE TECHNOLOGIES INC.

FILING STATEMENT
with respect to a Change of Business
pursuant to Policy 5.2 of the TSX Venture Exchange

October 27, 2016

Neither the TSX Venture Exchange Inc. nor any securities regulatory authority has in any way passed
upon the merits of the Acquisition described in this Filing Statement.

All information contained in this Filing Statement with respect to Patriot One Detection Ltd. (Patriot) and
its business has been provided by Patriot, and with respect to such information, Patriot One Technologies
Inc. and its directors and officers have relied on Patriot.
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TABLE OF CONTENTS

NOTICE CONCERNING FORWARD-LOOKING STATEMENTS ................................................................ 4

GLOSSARY .................................................................................................................................................. 5
SUMMARY OF FILING STATEMENT .......................................................................................................... 9
THE ISSUER ........................................................................................................................................ 9
PATRIOT .............................................................................................................................................. 9
THE CHANGE OF BUSINESS............................................................................................................. 9
THE RESULTING ISSUER ................................................................................................................ 10
DIRECTORS AND OFFICERS OF THE RESULTING ISSUER ........................................................ 10
INTEREST OF INSIDERS, PROMOTERS OR CONTROL PERSONS ............................................ 10
ARMS LENGTH TRANSACTION...................................................................................................... 10
AVAILABLE FUNDS AND PRINCIPAL USES ................................................................................... 10
SELECTED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION...................................... 11
MARKET FOR SECURITIES AND MARKET PRICE ........................................................................ 12
CONFLICTS OF INTEREST .............................................................................................................. 12
SPONSORSHIP ................................................................................................................................. 12
INTEREST OF EXPERTS AND CONSULTANTS ............................................................................. 12
CONDITIONAL APPROVAL............................................................................................................... 12
RISK FACTORS ................................................................................................................................. 12
PART I THE ISSUER ............................................................................................................................... 13
INFORMATION CONCERNING THE ISSUER .................................................................................. 13
THE ACQUISITION ............................................................................................................................ 13
THE PRIVATE PLACEMENT ............................................................................................................. 14
SELECTED CONSOLIDATED FINANCIAL INFORMATION OF THE ISSUER ................................ 14
DESCRIPTION OF THE SECURITIES OF THE ISSUER ................................................................. 14
OPTIONS TO PURCHASE SECURITIES OF THE ISSUER............................................................. 14
PRIOR SALES.................................................................................................................................... 16
STOCK EXCHANGE PRICE .............................................................................................................. 16
EXECUTIVE COMPENSATION OF THE ISSUER ............................................................................ 16
LEGAL PROCEEDINGS .................................................................................................................... 22
AUDITORS, TRANSFER AGENT AND REGISTRAR ....................................................................... 22
MATERIAL CONTRACTS OF THE ISSUER ..................................................................................... 23
PART II PATRIOT .................................................................................................................................... 24
CORPORATE STRUCTURE OF PATRIOT....................................................................................... 24
GENERAL DEVELOPMENT OF THE BUSINESS............................................................................. 24
SELECTED CONSOLIDATED FINANCIAL INFORMATION OF PATRIOT ...................................... 26
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CONSOLIDATED CAPITALIZATION................................................................................................. 26
PRIOR SALES.................................................................................................................................... 27
EXECUTIVE COMPENSATION OF PATRIOT .................................................................................. 27
NON-ARMS LENGTH PARTY TRANSACTIONS OF PATRIOT ...................................................... 32
LEGAL PROCEEDINGS RELATING TO PATRIOT .......................................................................... 32
AUDITORS ......................................................................................................................................... 32
MATERIAL CONTRACTS OF PATRIOT ........................................................................................... 32
PART III THE RESULTING ISSUER ........................................................................................................ 33
CORPORATE STRUCTURE.............................................................................................................. 33
BUSINESS AND STRATEGY OF THE RESULTING ISSUER.......................................................... 33
SECURITIES OF THE RESULTING ISSUER.................................................................................... 35
OPTIONS TO PURCHASE SECURITIES OF THE RESULTING ISSUER ....................................... 35
PRO FORMA CONSOLIDATED CAPITALIZATION.......................................................................... 37
AVAILABLE FUNDS AND PRINCIPAL USES ................................................................................... 38
PRINCIPAL SECURITYHOLDERS.................................................................................................... 39
PROPOSED DIRECTORS AND OFFICERS ..................................................................................... 39
EXECUTIVE COMPENSATION ......................................................................................................... 44
INVESTOR RELATIONS AGREEMENTS ......................................................................................... 47
ESCROWED SECURITIES................................................................................................................ 47
AUDITORS, TRANSFER AGENT AND REGISTRAR ....................................................................... 49
SPONSORSHIP ................................................................................................................................. 50
EXPERTS ........................................................................................................................................... 50
BOARD APPROVAL .......................................................................................................................... 50
PART IV DESCRIPTION OF RISK FACTORS ASSOCIATED WITH THE ACQUISITION .................... 50
RISKS RELATED TO THE RESULTING ISSUERS BUSINESS ...................................................... 50
RISKS RELATED TO OWNERSHIP OF THE COMMON SHARES.................................................. 59
PART V CERTIFICATES ......................................................................................................................... 63
CERTIFICATE OF PATRIOT ONE TECHNOLOGIES INC. .............................................................. 63
CERTIFICATE OF PATRIOT ONE DETECTION LTD....................................................................... 64
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NOTICE CONCERNING FORWARD-LOOKING STATEMENTS

This Filing Statement contains forward-looking statements. Often, but not always, forward-looking
statements can be identified by the use of words such as plans, expects or does not expect, is
expected, estimates, intends, anticipates or does not anticipate, or believes, or variations of such
words and phrases or state that certain actions, events or results may, could, would, might or will
be taken, occur or be achieved. Forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results, performance or achievements of the
Issuer or Resulting Issuer to be materially different from any future results, performance or achievements
expressed or implied by the forward-looking statements. Examples of such statements include: (A) the
completion of the Acquisition; (B) the description of the Resulting Issuer that assumes completion of the
Acquisition; (C) the intention to grow the business and operations of the Resulting Issuer; (D) anticipated
timing for the availability of Patriots products to market and expected prices and (E) the proposed
executive compensation for the executives of the Resulting Issuer. Actual results and developments are
likely to differ, and may differ materially, from those expressed or implied by the forward-looking
statements contained in this Filing Statement. Such forward-looking statements are based on a number of
assumptions which may prove to be incorrect, including, but not limited to: the ability of the Issuer to
obtain necessary financing; satisfying the requirements of the Exchange with respect to the Acquisition;
the economy generally; commercial interest in the products of the Resulting Issuer; competition; and
anticipated and unanticipated costs. These forward-looking statements should not be relied upon as
representing the Issuers views as of any date subsequent to the date of this Filing Statement. Although
the Issuer has attempted to identify important factors that could cause actual actions, events or results to
differ materially from those described in forward-looking statements, there may be other factors that
cause actions, events or results not to be as anticipated, estimated or intended. 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 forward-looking statements. The factors identified above are not intended to represent
a complete list of the factors that could affect the Issuer, the Resulting Issuer or Patriot. Additional factors
are noted under Part IV Description of Risk Factors Associated with the Acquisition in this Filing
Statement. The forward-looking statements contained in this Filing Statement are expressly qualified in
their entirety by this cautionary statement. The forward-looking statements included in this Filing
Statement are made as of the date of this Filing Statement and neither of the Issuer nor Patriot
undertakes an obligation to publicly update such forward-looking statements to reflect new information,
subsequent events or otherwise unless required by applicable securities legislation.
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GLOSSARY

The following terms used in this Filing Statement have the meanings set forth below. Unless otherwise
indicated, all currency references are to Canadian dollars.

Acquisition means the acquisition by the Issuer of all of the issued and outstanding securities of Patriot
pursuant to the Acquisition Agreement;

Acquisition Agreement means the securities exchange agreement dated September 14, 2016, among
the Issuer, Patriot and the securityholders of Patriot, setting forth the terms and conditions of the
Acquisition, as amended from time to time;

Affiliate means a Company that is affiliated with another Company as described below:

A Company is an Affiliate of another Company if:

(a) one of them is the Subsidiary of the other, or

(b) each of them is controlled by the same Person.

A Company is controlled by a Person if:

(a) voting securities of the Company are held, other than by way of security only, by or for
the benefit of that Person, and

(b) the voting securities, if voted, entitle the Person to elect a majority of the directors of the
Company.

A Person beneficially owns securities that are beneficially owned by:

(a) a Company controlled by that Person, or

(b) an Affiliate of that Person or an Affiliate of any Company controlled by that Person;

Associate when used to indicate a relationship with a Person, means

(a) an issuer of which the Person beneficially owns or controls, directly or indirectly, voting
securities entitling him to more than 10% of the voting rights attached to outstanding
securities of the issuer,

(b) any partner of the Person,

(c) any trust or estate in which the Person has a substantial beneficial interest or in respect
of which a Person serves as trustee or in a similar capacity,

(d) in the case of a Person, a relative of that Person, including

(i) that Persons spouse or child, or

(ii) any relative of the Person or of his spouse who has the same residence as that
Person; but

(e) where the Exchange determines that two Persons shall, or shall not, be deemed to be
associates with respect to a Member firm, Member corporation or holding company of a
Member corporation, then such determination shall be determinative of their relationships
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in the application of Rule D of the rules and policies of the Exchange with respect to that
Member firm, Member corporation or holding company;

August Patriot Warrants has the meaning given to it on page 27;

BCBCA means the Business Corporations Act (British Columbia);

Board means the board of directors of the Issuer or Resulting Issuer, as the context requires;

Closing means the closing of the Acquisition;

CMR-1 has the meaning give to it on page 24;

Common Shares means the common shares of the Issuer or Resulting Issuer, as the context requires;

Company unless specifically indicated otherwise, means a corporation, incorporated association or

organization, body corporate, partnership, trust, association or other entity other than an individual;

Control Person means, in respect of an issuer, any Person that holds or is one of a combination of
Persons that hold a sufficient number of any of the securities of an issuer so as to affect materially the
control of that issuer, or that holds more than 20% of the outstanding voting securities of an issuer, except
where there is evidence showing that the holder of those securities does not materially affect the control
of the issuer;

Discounted Market Price has the meaning ascribed to such term in Exchange Policy 1.1 Interpretation;

Escrow Agent means the Transfer Agent, in its capacity as escrow agent for the Common Shares held
in escrow under the Value Security Escrow Agreement to be entered into prior to Closing;

Exchange means the TSX Venture Exchange Inc.;

Filing Statement means this filing statement;

Final Exchange Bulletin means the Exchange bulletin which is issued following Closing and the
submission of post-approval documents, and which evidence the final Exchange acceptance of the
Acquisition;

Four Month Hold means the resale restrictions imposed by Exchange Policy 5.4 pursuant to which
securities are subject to a four month hold period, with 20% of such securities being released every
month, with the first such release occurring on receipt of the Final Exchange Bulletin;

Insider if used in relation to an issuer, means:

(a) a director or senior officer of the issuer;

(b) a director or senior officer of the Company that is an Insider or Subsidiary of the issuer;

(c) a Person that beneficially owns or controls, directly or indirectly, voting shares carrying
more than 10% of the voting rights attached to all outstanding voting shares of the issuer;
or

(d) the issuer itself if it holds any of its own securities;

IPO means the initial public offering of Common Shares of the Issuer that occurred on May 10, 2012;

Issuer means Patriot One Technologies Inc., prior to the completion of the Acquisition;
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Issuer Financial Statements means the audited financial statements of the Issuer for the financial
years ended May 31, 2016 and 2015, which are attached to this Filing Statement as Schedule A;

July Patriot Warrants has the meaning given to it on page 26;

Letter of Intent means the letter of intent dated as of July 28, 2016 entered into between the Issuer and
Patriot relating to the Acquisition, if and as amended to date;

Macadamian has the meaning given to it on page 24;

Member has the meaning ascribed to such term in Rule A.1.00 of the rules and policies of the
Exchange;

Non-Arms Length Party means in relation to a Company, a promoter, officer, director, other Insider or
Control Person of that Company (including an issuer) and any Associates or Affiliates of any of such
Persons. In relation to an individual, means any Associate of the individual or any Company of which the
individual is a promoter, officer, director, Insider or Control Person;

One Year Hold means the resale restrictions imposed by Exchange Policy 5.4 pursuant to which
securities are subject to a one year hold period, with 20% of such securities being released every three
months, with the first such release occurring on receipt of the Final Exchange Bulletin;

Patriot means Patriot One Detection Ltd.;

Patriot Financial Statements means the audited annual financial statements of Patriot for the period
from its incorporation to July 31, 2016 which are attached to this Filing Statement as Schedule C;

Patriot Shares means common shares without par value in the capital of Patriot;

Person means a Company or an individual;

Policy 5.2 means Policy 5.2 Changes of Business and Reverse Takeovers, of the Exchange;

Private Placement means the non-brokered private placement for the sale of up to 15,333,333 Units at
an issue price of $0.15 per Unit, for aggregate gross proceeds of up to $2,300,000;

Pro Forma Financial Statements means the unaudited pro forma balance sheet for the Resulting
Issuer as at August 31, 2016 to give effect to the Acquisition as if it had taken place as of August 31,
2016 which is attached to this Filing Statement as Schedule E;

Resulting Issuer means Patriot One Technologies Inc. following the issuance of the Final Exchange
Bulletin;

Shareholders means the holders of the Common Shares;

Stock Option Plan or Plan means the stock option plan of the Issuer;

Subsidiary includes, with respect to any Person, Company, partnership, limited partnership, trust or
other entity, any Company, partnership, limited partnership, trust or other entity controlled, directly or
indirectly, by such Person, Company, partnership, limited partnership, trust or other entity;

Transaction means, collectively, the Acquisition and the Private Placement;

Transfer Agent means Equity Financial Trust Company, the transfer agent and registrar of the Issuer;

Units means the units sold pursuant to the Private Placement, each comprised of one Common Share
and one Unit Warrant;
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Unit Warrants means the Common Share purchase warrants underlying the Units being sold pursuant
to the Private Placement, each entitling the holder to acquire one Common Share at a price of $0.30 for a
period of two years;

Value Security Escrow Agreement means the escrow agreement in Exchange Form 5D to be entered
into by and among the Escrow Agent, the Resulting Issuer and certain principals and shareholders of the
Resulting Issuer on or before Closing; and

WTMDs has the meaning given to it on page 24.

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SUMMARY OF FILING STATEMENT

The following is a summary of information related to the Issuer, Patriot and the Resulting Issuer
(assuming completion of the Acquisition) and should be read together with the more detailed information
and financial data and statements contained elsewhere in this Filing Statement. Certain capitalized words
and terms are defined in the Glossary. Unless otherwise indicated, all currency references are to
Canadian dollars.

THE ISSUER

The Issuer was incorporated on May 11, 2010 pursuant to the provisions of the BCBCA under the name
"Clear Mountain Resources Corp."

On May 10, 2012, the Issuer completed its IPO and the Common Shares began trading on the Exchange
on May 15, 2012 under the symbol CY. The Issuer change its name to Patriot One Technologies Inc.,
and changed its trading symbol to PAT on August 24, 2016. The Issuer was formerly engaged in the
acquisition and exploration of natural resource properties and has ceased all resource acquisition and
exploration activity in preparation for the Transaction. See Part I The Issuer Information Concerning
the Issuer.

PATRIOT

Patriot was incorporated under the BCBCA on March 7, 2016 under the name Patriot One Technologies
Inc.. Patriot changed its name to Patriot One Detection Ltd. on August 15, 2016. The principal activities
of Patriot are the development and commercialization of a cognitive microwave radar technology
proposed to be used for the detection of concealed weapons. See Part II Patriot General
Development of the Business.

THE CHANGE OF BUSINESS

Management of the Issuer has identified the Acquisition as a transaction mutually beneficial for both the
Issuer and Patriot. Pursuant to the Acquisition, the Issuer will acquire 100% of the issued and outstanding
securities of Patriot and the Resulting Issuer will be engaged in Patriots business after the Acquisition.

The terms of the Acquisition were determined pursuant to arm's length negotiations between the Issuer
and Patriot.

The Acquisition will be completed by way of a securities exchange pursuant to Policy 5.2, and pursuant to
the terms of the Acquisition Agreement, being primarily that the Issuer will issue Common Shares to the
shareholders of Patriot, in exchange for the delivery to the Issuer of all of the issued and outstanding
Patriot Shares at an exchange ratio of 1 Common Share (22,959,925 total Common Shares at a deemed
issue price of $0.15 per Common Share) for each Patriot Share. Each shareholder of Patriot shall be
entitled to receive its pro rata proportion of such Common Shares based on the number of Patriot Shares
exchanged. No fractional Common Shares will be issued. Outstanding convertible securities of Patriot will
be exchanged on equivalent terms. Note that the numbers referenced above are subject to minor
deviation as a result of the effects of rounding at the individual shareholder level. See Part III The
Resulting Issuer Pro Forma Consolidated Capitalization Pro-Forma Fully Diluted Share Capital of the
Resulting Issuer.

The Acquisition is subject to certain conditions, including, but not limited to, receiving all necessary
regulatory and third party approvals, and the Exchange being satisfied that after completion of the
Acquisition the Issuer will satisfy the Exchanges minimum listing requirements in order to become a Tier
2 Technology Issuer.
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THE RESULTING ISSUER

Following the Closing, Patriot will be a wholly owned subsidiary of the Resulting Issuer. The capital
structure of the Resulting Issuer will remain unchanged, other than for the issuances of securities
contemplated by the Private Placement and the Acquisition. Upon completion of the Acquisition and
subject to the approval of the Exchange, the Resulting Issuer is expected to become a Tier 2 Technology
Issuer on the Exchange. See Part III The Resulting Issuer Business and Strategy of the Resulting
Issuer.

DIRECTORS AND OFFICERS OF THE RESULTING ISSUER

The proposed directors and officers of the Resulting Issuer following the Closing are as follows:

Name and Municipality of Residence Proposed Position With Resulting Issuer

Dinesh Kandanchatha, Brampton, ON(1) President, Director

Martin Cronin, Kelowna, B.C. CEO, Director

Scott Shepherd, Vancouver, B.C.(1) Director

Jeffery Tindale, Vancouver, B.C.(1) Director

Michael Malana, Richmond, B.C. CFO

Natalia Nikolova, Hamilton, ON Chief Scientific Officer

Carrie Cesarone, Vancouver, B.C. Corporate Secretary

Note:
(1) Proposed member of the Resulting Issuers audit committee.

See Part III The Resulting Issuer Proposed Directors and Officers.

INTEREST OF INSIDERS, PROMOTERS OR CONTROL PERSONS

No Insider, promoter or Control Person of the Issuer or its Associates and Affiliates (before giving effect to
the Acquisition) has any interest in Patriot.

ARMS LENGTH TRANSACTION

The Acquisition constitutes an Arms Length Transaction within the meaning of the policies of the
Exchange.

AVAILABLE FUNDS AND PRINCIPAL USES

Upon Closing and assuming completion of the maximum Private Placement, and as a condition
precedent to Closing under the Acquisition Agreement, the Resulting Issuer will have approximately
$2,910,856 available to it.

The following table sets forth the estimated total funds available to the Resulting Issuer, assuming
completion of the Acquisition:
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Assuming Maximum Private

Placement

Consolidated current working capital calculated as of August 31, $710,856

2016, after pro forma adjustments, prior to the Private Placement

Gross proceeds from Private Placement $2,300,000

Estimated costs of the Private Placement and the Acquisition ($100,000)

Total available funds $2,910,856

The following table sets forth the expected use of proceeds by the Resulting Issuer, assuming completion
of the Acquisition:

Assuming Maximum Private

Placement

Research and product development $350,000

Compile database, testing and beta trial $250,000

Identify contract manufacturers and marketing $250,000

Marketing and trade shows $350,000

Patent, audit and public company expenses $150,000

General and administrative cost $475,000

General unallocated working capital $1,085,856

Total use of proceeds $2,910,856

See Part III The Resulting Issuer Available Funds and Principal Uses. The Resulting Issuer may
require additional funds in order to fulfill all of the Resulting Issuers expenditure requirements to meet its
objectives, in which case the Resulting Issuer expects to either issue additional Common Shares or incur
indebtedness. There is no assurance that additional funding required by the Resulting Issuer would be
available on commercially reasonable terms, or at all, if required. However, it is anticipated that the
available funds will be sufficient to satisfy the Resulting Issuers objectives over at least the next 12
months. The Resulting Issuers intentions to spend the available funds as set forth above are based on
the current expectations of management; however, there may be circumstances where, for sound
business reasons, a reallocation of funds may be necessary. Any such reallocation will be determined at
the discretion of the Resulting Issuers management, and there can be no assurance as of the date of this
Filing Statement as to how those funds may be reallocated.

SELECTED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION

The table below sets out certain pro forma financial data for the Resulting Issuer as at August 31, 2016,
consolidated and adjusted to give effect to the Acquisition as if it had occurred at August 31, 2016. The
summary unaudited pro forma consolidated financial information below is derived from the Pro Forma
Financial Statements and should be read in conjunction with the Pro Forma Financial Statements, related
 12

notes and other financial information appearing elsewhere in this Filing Statement. See the Pro Forma
Financial Statements attached hereto as Schedule E.

Total Assets $3,681,616

Total Liabilities $769,875

MARKET FOR SECURITIES AND MARKET PRICE

The Common Shares of the Issuer are listed on the Exchange under the trading symbol PAT and were
halted from trading on August 11, 2016 pending the Transaction. The closing market price of the
Common Shares on August 11, 2016, the last day on which there could have been a trade of Common
Shares prior to the announcement of the Letter of Intent, was $0.185. The Common Shares will continue
trading on the Exchange upon completion of the Acquisition under the symbol PAT. See Part I The
Issuer Stock Exchange Price.

There is no public market for the Patriot Shares.

CONFLICTS OF INTEREST

There are potential conflicts of interest to which the directors and officers of the Resulting Issuer will be
subject in connection with the operations of the Resulting Issuer, other than as set out herein. Conflicts, if
any, will be subject to the procedures and remedies under the BCBCA. See Part IV Description of Risk
Factors Associated with the Acquisition.

SPONSORSHIP

The Issuer has applied to the Exchange for a waiver in respect of its requirement pursuant to Policy 5.2
that the Issuer obtain sponsorship in connection with the Acquisition.

See Part III The Resulting Issuer Sponsorship.

INTEREST OF EXPERTS AND CONSULTANTS

No Person who is named as having prepared or certified a part of the Filing Statement or prepared or
certified a report or valuation described or included in the Filing Statement has, or will have, upon
completion of the Acquisition, any direct or indirect interest in the Resulting Issuer. See Part III The
Resulting Issuer Experts.

CONDITIONAL APPROVAL

The Issuer has applied for the Exchanges acceptance of the Acquisition, and will obtain same prior to
Closing.

RISK FACTORS

There are inherent risks in the business of the Issuer and in the business of Patriot. The Acquisition must
be considered speculative due to the nature of the business of the Issuer and Patriot, and each
companys relatively formative stage of development. Shareholders of the Issuer must rely on the ability,
expertise, judgment, discretion, integrity and good faith of the management of the Issuer and the
Resulting Issuer. There is no guarantee that the Resulting Issuer will be able to secure future financing to
meet its future needs on reasonable terms, or at all. The business of the Resulting Issuer will be subject
to risks and hazards related to the Issuer and Patriot, some of which are beyond its control.

See Part IV Description of Risk Factors Associated with the Acquisition.

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PART I THE ISSUER

Information in this Part I is given as of the date of this Filing Statement, prior to the completion of the
Transaction, unless otherwise noted.

INFORMATION CONCERNING THE ISSUER

Corporate Structure
The Issuer was incorporated on May 11, 2010, under the Business Corporations Act (British Columbia)
under the name "Clear Mountain Resources Corp.". It completed its IPO on May 10, 2012 and on May 15,
2012, the Issuers Common Shares were listed for trading on the Exchange under the trading symbol
CY. The Issuer change its name to Patriot One Technologies Inc., and changed its trading symbol to
PAT, on August 24, 2016. The Issuer is a reporting issuer in British Columbia, Alberta and Ontario. The
principal regulator of the Issuer is the British Columbia Securities Commission, the head office of the
Issuer is located at 409 Granville Street, Suite 1000, Vancouver, B.C., V6C 1T2 and the registered office
of the Issuer is 1000 840 Howe St., Vancouver, BC V6Z 2M1.

As of the date hereof, the authorized capital of the Issuer consists of an unlimited number of common
shares, of which 10,862,216 Common Shares are issued and outstanding as fully paid and non-
assessable. The Issuer consolidated the Common Shares on the basis of one (1) new Common Share for
each 20 old Common Shares on May 18, 2016. All Common Share figures herein relating to Common
Shares (or securities convertible into Common Shares) issued prior to May 18, 2016 are included on a
post-consolidation basis.

The Issuer has no subsidiaries.

Trading of the Issuers Common Shares will remain halted until completion of the Transaction or until
satisfactory documentation is filed with the Exchange.

Overview of the Business

The Issuer is a junior mineral resource exploration company with a principal business in the identification,
evaluation, acquisition, exploration, and development of mineral properties.

THE ACQUISITION

Pursuant to the Acquisition, the Issuer will acquire 100% of the outstanding Patriot Shares in exchange
for Common Shares on a 1:1 basis, as described herein. Outstanding convertible securities of Patriot will
be exchanged on equivalent terms.

The Acquisition is an Arms Length Transaction.

In connection with the Acquisition, the Issuer will undertake the Private Placement.

The Acquisition will be completed by way of a change of business pursuant to the terms of the Acquisition
Agreement. The Issuer will issue to the shareholders of Patriot approximately 22,959,925 Common
Shares in exchange for 100% of the outstanding Patriot Shares.

The Acquisition is subject to a number of conditions, including the execution of the Acquisition
Agreement, completion of satisfactory due diligence, completion of the Private Placement, and the
approval of the Acquisition and the Private Placement by each of the Exchange and the board of directors
and shareholders of each of the Issuer and Patriot.

Furthermore, the Acquisition Agreement contains a condition precedent for the benefit of Patriot and the
shareholders of Patriot that the Issuer must have net assets of no less than $2,000,000 on closing of the
Acquisition and the Private Placement.
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THE PRIVATE PLACEMENT

In connection with the Acquisition, the Issuer will undertake the Private Placement.

The Resulting Issuer intends to use the proceeds of the Private Placement to fund the costs of the
Transaction, continue development of its product, operate its business and pursue opportunities to
commercialize its technology. Any securities issued in connection with the Private Placement will be
issued under applicable Canadian (and, if applicable, US) prospectus exemptions and will be subject to a
four month and one day statutory hold period pursuant to applicable securities laws. The Issuer will not
issue a prospectus with respect to the Private Placement.

SELECTED CONSOLIDATED FINANCIAL INFORMATION OF THE ISSUER

Selected Financial Information

Financial Year Ended Financial Year Ended Financial Year Ended
Item May 31, 2014 May 31, 2015 May 31, 2016
Total expenses $1,006,665 $303,262 $99,629
Amounts deferred
in connection with
the Acquisition Nil Nil Nil

Managements Discussion and Analysis

See Schedule B for Managements Discussion and Analysis of the Issuer for the financial years ended
May 31, 2016.

DESCRIPTION OF THE SECURITIES OF THE ISSUER

The Issuer is authorized to issue an unlimited number of common shares of which 10,862,216 Common
Shares are issued and outstanding as fully paid and non-assessable as at the date hereof.
There are currently 200,000 Common Share purchase warrants of the Issuer outstanding at an exercise
price of $1.00 expiring November 18, 2020, and 9,638,800 Common Share purchase warrants of the
Issuer outstanding exercisable at a price of $0.20 on or before June 27, 2019. See Part I The Issuer
Prior Sales and Part I The Issuer Options to Purchase Securities of the Issuer.
The holders of the Common Shares are entitled to dividends, if, as and when declared by the Board, to
receive notice of and attend all meetings of Shareholders, to one vote per Common Share at such
meetings and, upon liquidation, to rateably receive such assets of the Issuer as are distributable to the
holders of the Common Shares.
OPTIONS TO PURCHASE SECURITIES OF THE ISSUER

As of the date hereof, there are 250,000 Issuer options outstanding, each entitling the holder thereof to
purchase one Issuer Share at an exercise price of $0.185 on or before October 3, 2021.

Stock Option Plan Terms

The following is a summary of the Plan:

Number of Shares Reserved. The number of Common Shares reserved for issuance under the Plan is
10% of the issued and outstanding Common Share capital at the date of grant.

Administration. The Plan is to be administered by the Board.

Eligible Persons. The Plan provides that stock options may be issued only to employees, consultants,
and directors of the Issuer.
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Board Discretion. The Plan provides that the exercise price, the term of the options granted, the vesting
conditions of the options granted, and other terms and conditions relating to such options shall be
determined by the Board from time to time.

Maximum Term of Options. Options granted under the Plan will be for a term not exceeding five years
or such longer term as permitted by the Exchange.

Maximum Options per Person. The number of Common Shares which may be issued pursuant to the
Plan in a one-year period to any one option holder may not exceed 5% of the Common Shares issued
and outstanding, calculated at the time of the award. The number of Common Shares which may be
issued pursuant to the Plan in a one-year period to any one consultant of the Issuer may not exceed 2%
of the issued Common Shares of the Issuer, calculated at the time of the award. The number of Common
Shares which may be issued pursuant to the Plan in a one-year period to all option holders employed to
provide investor relations services may not exceed an aggregate of 2% of the issued Common Shares of
the Issuer outstanding, calculated at the time of award.

Termination Prior to Expiry. Under the Plan, if an option holder dies while his or her option is
outstanding, any vested portion or portions of the option shall expire on the earlier of the expiry date and
the date that is six months after the date of the option holders death. The expiry date for any unvested
portion of the option shall be the date of the option holders death. The right to purchase Common Shares
under an option shall not vest after the date of the option holders death. If the option holder holds an
option as a director or officer and the option holder ceases to be a director or officer (other than by reason
of death), any vested portion or portions of the option shall expire on the earlier of the expiry date and the
last day of such reasonable period of time not exceeding one year following the date that the option
holder ceases to be a director or officer that is determined by the Board at the time of the option award.
Notwithstanding the foregoing, if the option holder ceases to be a director or officer for cause, the expiry
date shall be the date that the option holder ceases to be a director or officer. The expiry date for any
unvested portion of the option shall be the date that the option holder ceases to be a director or officer.
The right to purchase Common Shares under an option shall not vest after the date that the option holder
ceases to be a director or officer. Under the Plan, if the option holder holds an option as an employee or
consultant and the option holder ceases to be an employee or consultant (other than by reason of death),
any vested portion or portions of the option shall be the earlier of the expiry date and the last day of the
expiry period following the termination date that is determined by the Board at the time of the option
award, up to a maximum of one year. Notwithstanding the foregoing, if the option holder ceases to be an
employee or consultant as a result of cause, the expiry date shall be the termination date. The expiry date
for any unvested portion of the option shall be the termination date. The right to purchase Common
Shares under an option shall not vest after the termination date. For greater certainty, if the Issuer gives
an employee or consultant working notice of termination of employment or the consulting contract or
payment in lieu of notice or if the Issuer wrongfully or constructively dismisses the employee or
consultant, no vesting shall occur during the working notice period or deemed notice period that the
employee or consultant receives or should have received. The expiry period shall commence on the first
day of such working notice period or deemed notice period. In the event of a change of control or
impending change of control, the Board may, in its sole discretion, deal with outstanding options in the
manner it deems fair and reasonable in light of the circumstances.

Exercise Price. Options granted under the terms of the Plan will be exercisable at a price which is not
less than the Discounted Market Price of the Issuers Common Shares as of the award date.

Termination of Plan. The Board may terminate the Plan at any time provided that such termination shall
not alter the terms or conditions of any option or impair any right of any option holder pursuant to any
option awarded prior to the date of such termination which shall continue to be governed by the
provisions of the Plan.
 16

PRIOR SALES

Number and Gross Proceeds Nature of

Type of Issue from Sale of Consideration
Date Securities Issued Price Securities Received
November 20, 2015 200,000 Units (1) $0.20 $40,000 Cash
June 27, 2016 9,505,000 Units (2) $0.075 $712,875 Cash
Notes:
(1) Units are comprised of one Common Share and one transferable Common Share purchase warrant, each warrant
exercisable into one additional Common Share for a period of 5 years at an exercise price of $1.00 per Common Share.
(2) Units are comprised of one Common Share and one transferable Common Share purchase warrant, each warrant
exercisable into one additional Common Share for a period of 3 years at an exercise price of $0.20 per Common Share.

STOCK EXCHANGE PRICE

The Issuers Common Shares were first listed for trading on the Exchange on May 15, 2012. Trading in
the Common Shares on the Exchange was halted on August 11, 2016, and is expected to remain halted
until completion of the Transaction or until satisfactory documentation is filed with the Exchange. The
closing price of the Common Shares on the Exchange on August 11, 2016 was $0.185.

High Closing Low Closing

Period Price ($) Price ($) Volume (#)
Q3 2014 $0.025 $0.015 375,560
Q4 2014 $0.015 $0.01 103,500
Q1 2015 $0.02 $0.005 288,300
Q2 2015 $0.01 $0.005 671,500
Q3 2015 $0.005 $0.005 1,339,100
Q4 2015 $0.105 $0.005 1,189,650
June 2016 $0.295 $0.10 108,572
July 2016 $0.195 $0.18 11,250
August 2016 $0.185 $0.185 200
September 1, 2016 to the date hereof N/A N/A N/A

EXECUTIVE COMPENSATION OF THE ISSUER

For the purposes of this Filing Statement, named executive officers of the Issuer mean the following
individuals:
(a) the Issuers Chief Executive Officer (CEO) or an individual who acted in a similar capacity for
any part of the most recently completed financial year;

(b) the Issuers Chief Financial Officer (CFO) or an individual who acted in a similar capital for
any part of the most recently completed financial year;

(c) each of the Issuers three most highly compensated executive officers, or the three most
highly compensated individuals acting in a similar capacity, other than the CEO and CFO, at the
end of the most recently completed financial year whose total compensation was, individually,
 17

more than $150,000 as determined in accordance with subsection 1.3(6) of Form 51-102F6
Statement of Executive Compensation for that financial year; and

(d) each individual who would be a named executive officer under paragraph (c) but for the fact
that the individual was neither an executive officer of the Issuer, nor acting in a similar capacity, at
the end of the most recently completed financial year.

The Issuer had four named executive officers during the financial year ended May 31, 2016, as follows:

Richard Barth, Former President and CEO

Michael Waldkirch, Former CFO

Geoff Balderson, CEO

Carrie Cesarone, CFO

On March 17, 2016, the Board accepted the resignation of Mr. Waldkirch as CFO and appointed Geoff
Balderson in his place. On April 5, 2016, Richard Barth resigned as President and CEO and Geoff
Balderson resigned as CFO. Also on April 5, 2016, Mr. Balderson was appointed CEO and Carrie
Cesarone was appointed CFO.

Compensation Discussion and Analysis

The Issuer has no formal compensation policy and no formal compensation committee. The Board as a
whole is responsible for ensuring that the Issuer has in place an appropriate plan for executive
compensation and for making recommendations with respect to the compensation of the Issuers
executive officers. The Board ensures that total compensation paid to its executive officers is fair and
reasonable and is consistent with the Issuers compensation philosophy reflecting the need to provide
incentive and compensation for the time, effort, risks and responsibilities of directors and senior
management while taking into account the financial and other resources of the Issuer.

The Board reviews the corporate goals and objectives relevant to executive compensation, evaluates
each executive officers performance in light of those goals and objectives and sets the executive officers
compensation level, including the key components set out below, based, in part, on this evaluation. The
Board takes into consideration the Issuers overall performance, shareholder returns, and the awards
given to executive officers in past years. The Board may also consider the value of similar incentive
awards to executive officers at comparable junior resource companies listed on the Exchange; however,
as of the date of this Filing Statement, no specific companies or selection criteria for the establishment of
a benchmark group have been identified by the Board.

The Issuers management is not permitted to purchase financial instruments, including, for greater
certainty, prepaid variable forward contracts, equity swaps, collars, or units of exchange funds that are
designed to hedge or offset a decrease in market value of equity securities of the Issuer granted as
compensation or held, directly or indirectly, by management. In establishing compensation objectives for
executive officers, the Board seeks to:

1. recruit and subsequently retain highly qualified executive officers;

2. motivate executives to achieve corporate performance objectives and reward them when such
objectives are met; and

3. align the interest of executive officers with the long-term interests of shareholders through
participation in the Issuers Plan.
 18

Option-Based Awards
The Board determines the number of stock options to be awarded. Stock options are generally awarded
to executive officers at the commencement of engagement and periodically thereafter. Stock options are
granted to reward individuals for current performance, expected future performance and value to the
Issuer. The size of awards made subsequent to the commencement of engagement takes into account
stock options already held by the individual.

Option Re-Pricings
None of the options held by the named executive officers were re-priced downward during the Issuers
most recently completed financial year ended May 31, 2016.

Defined Benefit or Actuarial Plan Disclosure

The Issuer does not have a defined benefit or actuarial plan under which benefits are determined by final
compensation of years of service of the Issuers officers and directors.

Pension Plans
The Issuer does not provide a pension plan for directors or executive officers, and therefore, no pension
plan disclosure is applicable.

Summary Compensation Table

The following table is a summary of compensation paid to the named executive officers for the financial
years ended May 31, 2016, 2015 and 2014:

Non-Equity
Share incentive plan
- compensation ($)
Base Option-
Year d Based Long-
Name and Ended Awar Awards( Annual Term Pension All other Total
1)
Principal May Salary ds Incentiv Incentive Value Compensation Compensation
Position 31 ($) ($) ($) e Plans Plans ($) ($) ($)
Richard 2016 Nil Nil Nil Nil Nil Nil Nil Nil
Barth, 2015 97,395 N/A Nil N/A N/A N/A Nil 97,395
Former
President 2014 130,586 N/A 2,048 N/A N/A N/A Nil 171,522
and CEO
Michael 2016 Nil Nil Nil Nil Nil Nil 6,860 6,860
Waldkirch, 2015 42,841 N/A Nil N/A N/A N/A Nil 42,841
Former CFO
2014 72,000 N/A 1,695 N/A N/A N/A 65,000 170,990
Geoff 2016 Nil Nil Nil Nil Nil Nil 3,000 3,000
Balderson, 2015 N/A N/A N/A N/A N/A N/A N/A N/A
CEO N/A N/A N/A N/A N/A N/A N/A N/A
2014

Carrie 2016 Nil Nil Nil Nil Nil Nil 4,700 4,700
Cesarone, 2015 N/A N/A N/A N/A N/A N/A N/A N/A
CFO N/A N/A N/A N/A N/A N/A N/A N/A
2014

Note:
(1) Option-based awards are valued at the date of grant using the Black-Scholes option pricing model which the Issuer has
chosen because it is one of the most common valuation methodologies used by venture issuers. Option pricing models
 19

require the input of highly subjective assumptions, particularly as to the expected volatility of the stock. Changes in these
assumptions can materially affect the fair value estimate, and therefore it is managements view that the existing models
may not provide a single reliable measure of the fair value of the Issuers stock option grants. The Issuer uses an option-
pricing model because there is no market for which options may be freely traded. Readers are cautioned not to assume that
the value derived from the model is the value that an option holder might receive if the options freely traded, nor assume that
these amounts are the same as those reported for income tax purposes.

Incentive Plan Awards

Outstanding Option-Based Awards
The following table sets out all option-based awards outstanding (no share-based awards are
outstanding) for each named executive officer at May 31, 2016:

Option-based Awards

Number of
securities
underlying Value of
unexercised Option unexercised in-the-money
options Option exercise price expiration options
Name (#) ($) date ($)(1)
Richard Barth 11,450 $4.00 April 5, 2017(2) Nil
19,000 $2.20 April 5, 2017(2) Nil
Michael Waldkirch 9,500 $4.00 March 17, 2017(2) Nil
11,200 $3.10 March 17, 2017(2) Nil
Geoff Balderson Nil Nil Nil Nil

Carrie Cesarone Nil Nil Nil Nil

Notes:

(1) In-the-money options are those where the market value of the underlying securities as at the most recent financial year
end exceeds the option price. This figure was calculated using the closing market price of the Issuers Common Shares
on the Exchange on May 31, 2016, being $0.10.

(2) Pursuant to the Plan, these options have lapsed following each option holder ceasing to be a director or officer of the
Issuer.

Incentive Plan Awards Value Vested or Earned During the Year

The following table sets out the aggregate dollar value of incentive stock options that would have been
realized if the options under the option-based award had been exercised on the vesting date for the
named executive officers during the most recently completed financial year ended May 31, 2016:
 20

Non-equity incentive plan compensation value earned

Option-based awards Value during the year
Name vested during the year ($)(1) ($)(1)
Richard Barth Nil N/A

Michael Waldkirch Nil N/A

Geoff Balderson Nil N/A

Carrie Cesarone Nil N/A

Note:

(1) The Issuer did not pay any non-equity incentive plan compensation during the year ended May 31, 2016.

Termination and Change of Control Benefits

Except as disclosed below, there is no compensatory plan, contract or arrangement where a named
executive officer is entitled to receive any payment from the Issuer or its subsidiaries in the event of (a)
the resignation, retirement or any other termination of the officers employment with the Issuer or its
subsidiaries; (b) a change of control of the Issuer or any of its subsidiaries; or (c) a change in the officers
responsibilities following a change in control.

Richard Barth, Former President and CEO - The Issuer entered into a consulting agreement with
Richard Barth effective April 23, 2013 (the Barth Agreement). Under the terms of the Barth Agreement,
Mr. Barth agreed to provide senior consulting services and act as CEO of the Issuer for an indefinite
period at a base rate of $130,000 per annum. Mr. Barth would also be entitled to discretionary bonuses
and incentives as determined by the Board. The Barth Agreement provides for termination payments in
certain circumstances. An amount equal to two times Mr. Barth's annual base fee plus discretionary
bonus, if any, is payable in the event that Mr. Barth is terminated without cause, and Mr. Barth is entitled
to terminate his engagement with the Issuer and receive a payment in an amount equal to three times his
annual base fee plus discretionary bonus, if any, if: (a) there is a change of control of the Issuer; and (b)
a specified trigger event occurs. Mr. Barth has a period of 180 days from the occurrence of the trigger
event to exercise the termination right under the Barth Agreement.

Under the Barth Agreement, a change of control includes the occurrence of any of the following events:
(a) the acquisition of a 40% voting interest in the Issuer by a shareholder of the Issuer; (b) the completion
of a consolidation, merger, amalgamation or statutory arrangement between the Issuer and another
person (other than a subsidiary of the Issuer) pursuant to which all or part of the outstanding voting
shares of the Issuer are changed in any way, reclassified or converted into, exchanged or otherwise
acquired for shares or other securities of the Issuer or any other person or for cash or any other property;
(c) the sale by the Issuer of property or assets, (i) aggregating more than 50% of the consolidated assets
of the Issuer and its subsidiaries as at the end of the most recently completed financial year of the Issuer,
or (ii) which during the most recently completed financial year of the Issuer generated, or during the then
current financial year of the Issuer are expected to generate, more than 50% of the consolidated
operating income or cash flow of the Issuer, to any other person or persons (other than the Issuer or one
or more of its subsidiaries); and (iv) a change in the composition of the Board, which occurs at a single
meeting of the shareholders of the Issuer or a succession of meetings occurring within six months of each
other, whereby individuals who were members of the Board immediately prior to such meeting or
succession of meetings, as applicable, cease to constitute a majority of the Board, without the Board, as
constituted immediately prior to such meeting or meetings, approving such change.
 21

A trigger event under the Barth Agreement includes the occurrence of any of the following events: (i) a
substantial change in the nature of the services to be performed by Mr. Barth; (ii) a material reduction of
the base fee or any other form of compensation payable by the Issuer, except where are all senior
executives or consultants of the Issuer are subject to relatively similar reductions in such value, (iii) a
material breach by the Issuer of any provision of the Barth Agreement; (iv) a change in the city in which
Mr. Barth is regularly required to carry out the terms of his Barth Agreement; (v) the Issuer ceases to
operate as a going concern; (vi) the Issuer fails to pay when due a material amount payable by it under
the Barth Agreement; or (vii) the successor, if any, fails to effectively assume the Issuers obligations
under the Barth Agreement.

As of the date hereof the Barth Agreement has been terminated, and Richard Barth has provided a full
and final release to the Issuer, in consideration of the transfer to Mr. Barth of 100,000 warrants to
purchase Common Shares at an exercise price of $0.20 on or before June 27, 2019.

Compensation of Directors
The Board has no standard arrangement pursuant to which directors are compensated for their services
in their capacity as directors except for the granting, from time to time, of incentive stock options in
accordance with the Plan and the policies of the Exchange.

Save for the reimbursement of expenses incurred as directors, no cash compensation was paid to any
director of the Issuer for the director's services as a director, or for committee participation, involvement in
special assignments or for services as a consultant or expert during the financial year ended May 31,
2016.

The following table sets forth information regarding the compensation paid to the Issuers directors, other
than directors who are also named executive officers listed in the Summary Compensation Table above,
during the financial year ended May 31, 2016.

Share-
Fees based Non-equity
earned awards Option-based incentive plan All other compensation Total
Name ($) ($) awards ($) compensation ($) ($) ($)
Craig Taylor Nil N/A Nil N/A N/A Nil

Mark Vanry Nil N/A Nil N/A N/A Nil

Jeffery Nil N/A Nil N/A N/A Nil

Tindale

Leighton Nil N/A Nil N/A N/A Nil

Bocking

Both Mr. Taylor and Mr. Vanry resigned as directors on April 5, 2016.

Incentive Plan Awards

Outstanding Option-Based Awards
The following table sets forth particulars of all option-based awards outstanding as of May 31, 2016 for
each director who was not a named executive officer:
 22

Option-based Awards

Number of
securities
underlying Value of
unexercised Option unexercised in-the-money
options Option exercise price expiration options
Name (#) ($) date ($)(1)
Craig Taylor 8,100 $3.00 April 5, 2017(2) Nil
3,375 $2.20 April 5, 2017(2) Nil
2,500
$4.00 April 5, 2017(2) Nil
Mark Vanry 2,500 $4.00 April 5, 2017(2) Nil

Notes:
(1) In-the-money options are those where the market value of the underlying securities as at the most recent financial year
end exceeds the option price. This figure was calculated using the closing market price of the Issuers Common Shares
on the Exchange on May 31, 2016, being $0.10.
(2) Pursuant to the Plan, options expire within one year following the date the option holder ceases to be a director or officer.

Incentive Plan Awards Value Vested or Earned During the Year

The following table sets out the aggregate dollar value of incentive stock options that would have been
realized if the options under the option-based award had been exercised on the vesting date for directors
who were not named executive officers during the most recently completed financial year ended May 31,
2016:

Non-equity incentive plan compensation Value earned

Option-based awards Value during the year
Name vested during the year ($)(1) ($(1))
Craig Taylor Nil N/A

Mark Vanry Nil N/A

Note:

(1) The Issuer did not pay any non-equity incentive plan compensation during the year ended May 31, 2016.

LEGAL PROCEEDINGS

The Issuer is not party to any legal proceedings and no such proceedings are known to the Issuer to be
contemplated.

AUDITORS, TRANSFER AGENT AND REGISTRAR

The auditors of the Issuer are Davidson & Company LLP at its office located at 609 Granville St #1200,
Vancouver, B.C., V7Y 1G6.
 23

Equity Financial Trust Company is the Issuers registrar and transfer agent.

MATERIAL CONTRACTS OF THE ISSUER

The Issuer has entered into the following material contracts

(a) a Transfer Agent, Registrar and Disbursing Agent Agreement with the Transfer Agent
dated August 17, 2011; and

(b) the Acquisition Agreement.

The Issuer is not expected to enter into any further material contracts prior to Closing, other than the
Value Security Escrow Agreement

Copies of these agreements will be available for inspection without charge at the offices of the Issuer until
the date of Closing and a period of 30 days thereafter, and following Closing, the Acquisition Agreement
will be filed on SEDAR at www.sedar.com.
 24

PART II PATRIOT

CORPORATE STRUCTURE OF PATRIOT

Name and Incorporation

Patriot was incorporated under the name Patriot One Technologies Inc. on March 7, 2016 under the
BCBCA and on August 15, 2016 Patriot One Technologies Inc. changed its name to Patriot One
Detection Ltd.

Patriot has its registered and records office located at 1000 - 595 Burrard Street, Vancouver, B.C., V7X
1S8.

Patriot does not currently have any subsidiaries.

GENERAL DEVELOPMENT OF THE BUSINESS

Narrative Description of the Business

Patriot is a private company that was incorporated under the BCBCA on March 7, 2016. The principal
business of Patriot is to commercialize a system to detect concealed weapons using radar technologies.

Principal Product
Patriot has licensed Cognitive Microwave Radar (CMR-1) technology developed by McMaster
University. Patriots license is to develop, license, manufacture and market the CMR-1 systems
worldwide. Patriots technology aims to create an automatic warning system for screening of on-body
concealed weapons (handguns, knives, grenades, explosive vests, etc.). The CMR-1 uses low power
impulse radar system for the stand-off detection of on-body concealed weapons. Patriot technology
currently has a 3 metre detection range, such that it can be concealed and deployed in high traffic areas,
such as entryways, hallways, stairwells and other public spaces in airports, stadiums, schools, etc. Patriot
aims to make the technology compact and portable, as well as operate on microwave frequency range
from 500MHz to 5GHz. Patriot aims to train its CMR-1 systems to recognize various weapons before
deployment as well as recognize non-threat targets (i.e. unarmed civilians) before deployment. Patriot
believes this technology has extensive potential for use in enhancing military and/or law enforcement
abilities.

Patriot is working towards regulatory approval for the CMR-1 in North America. Regulatory compliance
requirements may include those prescribed by users of Walk-Through Metal Detectors (WTMDs), such
as certain environmental standards, Federal Communications Commission (FCC) compatibility
regulations, and electrical safety requirements. Further, detection equipment that is used at airports must
comply with guidelines prescribed by the Transportation Security Administration (TSA), Federal Aviation
Administration (FAA) and other related international standards, regulations and test certificates.

Operations
The assets of Patriot are held in British Columbia, and are being developed at McMaster University in
Hamilton, Ontario.

Patriot plans to outsource production of CMR-1 to reduce capital outlay. Patriot has secured statements
of work with Macadamian Technologies Inc. (Macadamian) for the development of the CMR-1 user
interface, integration of hardware and commercialization of Patriots program algorithm. Sensors &
Software Inc. (Sensoft) will be modifying their current rescue radar design to provide a commercially
ready beta prototype to install in pilots and for initial customers. The cost for additional research and
software/hardware development is expected to be $350,000 and is expected to be completed by
December 31, 2016. Patriot currently anticipates spending approximately $250,000 on developing the
 25

database and testing at the beta installation site by approximately June, 2017. Concurrently, Patriot
proposes to spend approximately $250,000 on sourcing production.

Market
The transportation safety and security market is a very competitive market. It is projected to expand from
$38 billion in 2013 to $63 billion in 2018. North America is estimated to contribute the highest revenues.
Asia Pacific, Middle East, Africa, and Latin America are also expected to demonstrate rapid growth in this
market.

Growing threats from manmade tragedies underpin higher rates of growth in this market worldwide.
Recently, security/software-as-a-service (SaaS), integration of command and control systems with
communication systems and advanced imaging technology are gaining higher market shares.

CMR-1 can be positioned in public and private spaces used by large number of persons, who can enjoy
unhindered access. Some of the spaces identified as compromised entrance points are:

(1) Public schools and school buses

(2) Subway and other general public transit stations
(3) Embassies, consulates and trade offices
(4) Athletic and entertainment-focussed stadiums / arenas

Macadamian is collaborating with Patriot to bring commercialized threat detection technology to the
market. The pilot project will install the CMR-1 at two different facilities and will test the technology with
real participants and security teams. These pilot locations will be critical in assessing the viability and
scalability of this security technology. The data collected in the pilots will help improve the design, as
Patriot prepares for the April 2017 alpha launch.

Intellectual Property
Patriot currently has a license agreement with McMaster University that covers the worldwide rights to the
following University Patents:

CA 2,895,795
US 14/751,796
EP 15174116
UA a201506349
HK 16106764.3

Competitive Conditions
Thales, Saab, Honeywell International and Alstom are all market leaders offering integrated solutions that
work on seamless platforms thereby eliminating redundant resources and enhancing system efficiency.
They are expected to fortify business operations into the emerging markets. The security screening
market is dominated by companies such as Smiths Group plc. (U.K.) (Smith) and Sanfran SA (France).
The perimeter security market is dominated by Senstar, Southwest Microwave, RBtec Perimeter Security
Systems, United Technologies Corporation, Tyco and others.

At present, most competitive systems are designed to perform in largely well-ordered settings with co-
operative targets; however, their effectiveness is limited by the extent to which the environment can be
tightly controlled. They are also very expensive, with an airport scanner costing over $100,000.

Two competing systems are Smiths detection product called the TADAR and Rapiscan Secure 1000.
TADAR uses passive detection of millimetre waves from background sources to form an image and has
served well in airports. Rapiscan Secure 1000 actively illuminates the target with an x-ray backscatter.
Although these products have decreased the need for a carefully controlled environment as they produce
 26

superior imagery, they remain significantly limited for field operations due to their large size and weight.
Comparatively, the microwave technology used in CMR-1 makes the product compact, with a target form
factor of a tablet.

SELECTED CONSOLIDATED FINANCIAL INFORMATION OF PATRIOT

Selected Financial Information

At present, Patriot has no current operating income. Without additional financing, Patriot may not be able
to fund its ongoing operations and complete development activities. Patriot intends to finance its future
requirements through a combination of debt and/or equity issuance. There is no assurance that Patriot
will be able to obtain such financings or obtain them on favourable terms. These uncertainties cast doubt
on Patriots ability to continue as a going concern. Patriot will need to raise sufficient working capital to
maintain operations. The financial statements included herein do not include any adjustments related to
the recoverability of assets and classification of liabilities that might be necessary should Patriot be
unable to continue as a going concern.

Period from Incorporation on March 7, 2016 to

July 31, 2016
Total revenue Nil
Loss before non-recurring items $(604,242)
Net loss $(604,242)
Total assets $225,357
Total liabilities $229,109

Managements Discussion and Analysis

See Schedule D for Managements Discussion and Analysis of the Patriot for the period from
incorporation on March 7, 2016 to July 31, 2016.

Trends
Global gun control legislation is always evolving and such changes may impact the demand for Patriot's
products. Furthermore, civic and political unrest and increases in acts of terrorism may also affect
demand. Patriot may also be exposed to fluctuations in foreign exchange rates as it anticipates that a
portion of its revenue will come from international sales.

CONSOLIDATED CAPITALIZATION

Share Capital
As of the date hereof, the authorized capital of Patriot consists of an unlimited number of common shares,
of which 22,959,925 Patriot Shares are issued and outstanding. The holders of the Patriot Shares are
entitled to dividends, if, as and when declared by the board of directors of Patriot, to receive notice of and
attend all meetings of shareholders of Patriot, to one vote per Patriot Share at such meetings and, upon
liquidation, to rateably receive such assets of the Issuer as are distributable to the holders of the Patriot
Shares.

Options
As of the date hereof, there are 650,000 Patriot options outstanding, each entitling the holder thereof to
purchase one Patriot Share at an exercise price of $0.30 on or before August 1, 2021, 1,200,000 Patriot
options outstanding, each entitling the holder thereof to purchase one Patriot Share at an exercise price
of $0.30 on or before October 3, 2021 and 1,975,000 Patriot options outstanding, each entitling the holder
thereof to purchase one Patriot Share at an exercise price of $0.30 on or before October 3, 2021.
 27

Warrants
As of the date hereof, there are (i) 7,200,000 Patriot warrants outstanding, each entitling the holder
thereof to purchase one Patriot Share at an exercise price of $0.10 on or before July 29, 2018 (the July
Patriot Warrants) and (ii) 5,074,924 Patriot warrants outstanding, each entitling the holder thereof to
purchase one Patriot Share at an exercise price of $0.30 on or before August 22, 2018 (the August
Patriot Warrants).

PRIOR SALES

Number and Gross Proceeds Nature of

Type of Issue from Sale of Consideration
Date Securities Issued Price Securities Received
March 7, 2016 1 Patriot Share $0.01 $0.01 Cash
100,000 Patriot
April 7, 2016 Shares $0.005 $500.00 Cash
9,025,000 Patriot
June 9, 2016 Shares $0.005 $45,125.00 Cash
1,560,000 Patriot
July 28, 2016 Shares $0.05 Nil(3) See Note 3
July 29, 2016 7,200,000 Units(1) $0.05 $360,000.00 Cash
August 22, 2016 5,074,924 Units(2) $0.15 $761,238.60 Cash
Notes:
(1) One unit is comprised of one Patriot Share and one July Patriot Warrant.
(2) One unit is comprised of one Patriot Share and one August Patriot Warrant.
(3) As per terms of the license agreement entered into between McMaster University and Patriot (the McMaster Agreement,
discussed below), Patriot paid an up-front license fee of $10,000 and issued 1,560,000 Patriot Shares with a deemed fair
value of $78,000.

EXECUTIVE COMPENSATION OF PATRIOT

Introduction
This compensation discussion and analysis describes and explains the policies and practices of Patriot
with respect to the compensation of each of its named executive officers (together, the Patriot NEOs).

For the purposes of this Filing Statement, named executive officers of Patriot mean the following
individuals:
(a) Patriots CEO or an individual who acted in a similar capacity for any part of the most recently
completed financial year;

(b) Patriots CFO or an individual who acted in a similar capital for any part of the most recently
completed financial year;

(c) each of Patriots three most highly compensated executive officers, or the three most highly
compensated individuals acting in a similar capacity, other than the CEO and CFO, at the end of
the most recently completed financial year whose total compensation was, individually, more than
$150,000 as determined in accordance with subsection 1.3(6) of Form 51-102F6 Statement of
Executive Compensation for that financial year; and
 28

(d) each individual who would be a named executive officer under paragraph (c) but for the fact
that the individual was neither an executive officer of the Issuer, nor acting in a similar capacity, at
the end of the most recently completed financial year.

Patriot had three Patriot NEOs during the period from incorporation on March 7, 2016 to July 31, 2016, as
follows:

Martin Cronin, CEO and Director;

Dinesh Kandanchatha, President, Chief Technology Officer (CTO) and Director; and
Michael Malana, CFO.

Overview
Patriots compensation policies are founded on the principle that compensation should be aligned with
shareholders interests, while also recognizing that Patriots performance is dependent upon its ability to
retain highly trained, experienced and committed directors, executive officers and employees who have
the necessary skill sets, education, experience and personal qualities required to manage the business of
Patriot. Patriot also recognizes that the various components of its compensation program must be
sufficiently flexible to adapt to unexpected developments in the technology industry and the impact of
internal and market-related occurrences from time to time.

Compensation Components
Patriots executive compensation program is comprised of the following components: (a) base salary; (b)
consulting fees and (c) long-term incentive compensation comprised of incentive stock options.

The compensation components are designed to address the following key objectives:

align compensation with shareholders interests;

attract and retain highly qualified management;

focus performance by linking incentive compensation to the achievement of business objectives

and financial and operational results; and

encourage retention of key executives for leadership succession.

The aggregate value of these principal components and related benefits are used as a basis for
assessing the overall competitiveness of Patriots executive compensation package. When determining
executive compensation, including the assessment of the competitiveness of Patriots compensation
program, management and the board of directors rely on their concurrent and past experiences and
collective knowledge. With that background, ultimate determinations as to executive compensation are
based on (i) informal discussion among board members and management, (ii) negotiation with the
executive in question and (iii) a view to what is in the best interests of Patriot and its various stakeholders.
Patriot does not employ any formal benchmarking procedures in determining executive compensation.

The board of directors of Patriot did not consider the implications of the risks associated with the Patriots
compensation practices; however, given Patriots size and nature of compensation provided to its
executives in the last fiscal year, the board of directors of Patriot does not view significant risk that would
be likely to have a material adverse effect on Patriot. Patriots management is not permitted to purchase
financial instruments, including, for greater certainty, prepaid variable forward contracts, equity swaps,
collars, or units of exchange funds that are designed to hedge or offset a decrease in market value of
equity securities of Patriot granted as compensation or held, directly or indirectly, by management.
 29

Base Salaries and Consulting Fees

The base salary and consulting fee component is intended to provide a fixed level of competitive pay that
is established at the time when an officer, employee or consultant joins Patriot. Patriots board periodically
reviews compensation levels to determine if adjustments are necessary.

Long Term Incentive Compensation

Aside from the use of stock options as an incentive, no formal long term incentive compensation is
currently used by Patriot.

Summary Compensation Table

The following table sets out information concerning the compensation accrued to Patriot NEOs for the
three most recently completed financial years.

Non-equity incentive
plan compensation ($)

Share- Option Annual

Name and based based Incenti Long-term All other Total
principal Salary awards awards ve incentive Pension compensation compensat
position Year(1) ($) ($) ($)(2) Plans plans value ($) ($) ion ($)

Martin Cronin 2016 $10,080 Nil Nil Nil Nil Nil Nil $10,080
(3)

CEO, Director

Dinesh 2016 $13,560 Nil Nil Nil Nil Nil Nil $13,560
(4)
Kandanchatha

President,
CTO, Director

Michael
Malana
2016 $9,000 Nil Nil Nil Nil Nil Nil $9,000
Chief Financial
Officer

Notes:
(1) For the period from incorporation on March 7, 2016 to July 31, 2016.
(2) Option-based awards are valued at the date of grant using the Black-Scholes option pricing model, which Patriot has
chosen because it is one of the most common valuation methodologies used by venture issuers. Option pricing models
require the input of highly subjective assumptions, particularly as to the expected volatility of the underlying security price.
Changes in these assumptions can materially affect the fair value estimate, and therefore it is managements view that the
existing models may not provide a single reliable measure of the fair value of Patriots stock option grants. Patriot uses an
option-pricing model because there is no market for which options may be freely traded. Readers are cautioned not to
assume that the value derived from the model is the value that an option holder might receive if the options freely traded,
nor assume that these amounts are the same as those reported for income tax purposes.
(3) Consulting fees paid to Martin Cronin and Associated Consulting Ltd., a private company controlled by Mr. Cronin.
(4) Consulting fees paid to 7696388 Canada Ltd., a private company controlled by Mr. Kandanchatha.
 30

Incentive Plan Awards

Outstanding Share-Based Awards and Option-Based Awards
The following table sets forth for each Patriot NEOs all incentive plan awards outstanding as at July 31,
2016.

Option-based Awards Share-based Awards

Name Number of Option Option Value of Number of Market or Market or

securities exercise expiration unexercised shares or payout value payout value
underlying price ($) date in-the-money units of of share- of vested
unexercised options ($)(1) shares that based awards share-based
options (#) have not that have not awards not
vested (#) vested ($) paid out or
distributed ($)

Martin Cronin Nil N/A N/A N/A Nil N/A N/A

CEO, Director

Dinesh Nil N/A N/A N/A Nil N/A N/A

Kandanchatha

President,
CTO, Director

Michael
Malana
Nil N/A N/A N/A Nil N/A N/A
Chief Financial
Officer

Note:
(1) Based on a market price of $0.15 per Patriot Share, being the deemed price of the share exchange pursuant to the
Acquisition and Acquisition Agreement.

All stock options of Patriot will be cancelled in connection with the Closing and incentive stock options of
the Resulting Issuer shall be issued in lieu pursuant to the terms of the Acquisition.
 31

Incentive Plan Awards Value vested or earned during the year

The following table sets forth details of the value of incentive plan awards of Patriot vested or earned
during the period from incorporation on March 7, 2016 to July 31, 2016.

Name Option-based awards Value Share-based awards Value Non-equity incentive plan
vested during the year ($)(1) vested during the year ($) compensation Value
earned during the year ($)

Martin Cronin Nil N/A N/A

CEO, Director

Dinesh Nil N/A N/A

Kandanchatha

President, CTO,
Director

Michael Malana

Chief Financial Nil N/A N/A

Officer

Note:
(1) Based on a market price of $0.15 per Patriot Share, being the deemed price of the share exchange pursuant to the
Acquisition and Acquisition Agreement.

Termination and Change of Control Based Compensation

None of the Patriot NEOs are entitled to any additional or special compensation or remuneration on the
termination of their engagement with Patriot.
Director Compensation
The directors of Patriot are Kulwant Malhi, Dinesh Kandanchatha, Martin Cronin and Scott Shepherd, of
whom Dinesh Kandanchatha, Michael Malana and Martin Cronin are Patriot NEOs.

Non-Equity
incentive plan
compensation ($)
Option- Annua
Share- Based l Long- All other
Fees Based Awards Incent Term Pension Compensatio Total
(1)
earned Awards ive Incentive Value n Compensation
Name ($) ($) ($) Plans Plans ($) ($) ($)
Kulwant Malhi Nil Nil N/A Nil Nil Nil Nil Nil

Scott Nil Nil N/A Nil Nil Nil Nil Nil

Shepherd

Other than the foregoing, no director received compensation for serving as a director of Patriot.
 32

NON-ARMS LENGTH PARTY TRANSACTIONS OF PATRIOT

Patriot has not engaged in any Non-Arms Length Party transactions since its incorporation, other than
those set out in the Patriot Financial Statements attached as Schedule C hereto.

LEGAL PROCEEDINGS RELATING TO PATRIOT

Patriot is not party to any legal proceedings and no such proceedings are known to Patriot to be
contemplated.

AUDITORS

The auditors of Patriot are Davidson & Company LLP, located at 609 Granville St. #1200, Vancouver,
B.C. V7Y 1G6.

MATERIAL CONTRACTS OF PATRIOT

The following is a list of material contracts of Patriot, other than contracts entered into in the ordinary
course of business, entered into by Patriot within the two years before the date of this Filing Statement:

(1) Patriot, the Issuer, Bullrun Capital Inc. (Bullrun) and Rajni Singhera entered into a royalty
agreement dated October 26, 2016 (the Royalty Agreement) pursuant to which Patriot will
grant Bullrun and Rajni Singhera 2% (as to 1% each) net sales royalty on Patriots use of the
technology licensed from McMaster University pursuant to the McMaster Agreement (as
more particularly set out below).
A complete copy of the Royalty Agreement is available on the Issuers profile at
www.sedar.com.
(2) On March 24, 2016, Patriot (licensee) entered into a contract with McMaster University (the
McMaster Agreement). This is a standard license agreement and includes a 3.5% net
sales royalty. The termination date is 20 years from the effective date (March 24, 2036) or
upon the last to expire or become abandoned of the licensed patents. Change of control and
assignment is permitted with the prior written consent of McMaster University. McMaster
University carries out scientific research and has developed the intellectual property in the
patents that are described in the McMaster Agreement. The McMaster Agreement grants
Patriot an exclusive royalty bearing license to use and practice the licensed patents with the
exclusive license to make, use, or sell the licensed products or transfer the licensed
products. The licensed patents are:
CA 2,895,795
US 14/751,796
EP 15174116
UA a201506349
HK 16106764.3

A complete copy of the McMaster Agreement is available on the Issuers profile at

www.sedar.com.
(3) On May 30, 2016, Patriot executed a contract with Macadamian relating to the October 2016
pilot for software development. There is no termination date but Patriot has the right to
terminate the contract with 30 days written notice to Macadamian. There are no change of
control or assignment provisions in the agreement. Macadamian is a software and design
firm based in the United States but with offices in Canada. The pilot project involves testing
Patriots threat detection technology at two different test facilities. The discovery phase is
estimated to cost $40,800-$60,000 and the design and development phases is estimated to
cost $232,000-$316,000.
 33

(4) Phase 1: Statement of Work between Sensoft and Patriot dated May 30, 2016 in respect of
a Phase 1 prototype system for demonstration and field testing of Patriots technology. The
aggregate quoted cost of work pursuant to this agreement is $280,000.

(5) Patriot has entered into the Cronin Agreement and Kandanchatha Agreement, each as
defined below See Part III The Resulting Issuer Executive Compensation.

(6) The Acquisition Agreement.

PART III THE RESULTING ISSUER

Information contained in this Part III assumes completion of the Acquisition and acceptance by the
Exchange of the Change of Business under Policy 5.2.

CORPORATE STRUCTURE

Name and Incorporation

The Resulting Issuer is expected to be named Patriot One Technologies Inc. or such other name as
may be selected by the Board, in their discretion, and accepted by the Exchange. It is anticipated that the
Resulting Issuer will have its registered office and its head office located at 409 Granville Street, Suite
1000, Vancouver, B.C. V6C 1T2. The Resulting Issuer will be governed by the BCBCA.

Intercorporate Relationships
Following the Acquisition, the Resulting Issuer will own and control 100% of the Patriot Shares. Patriot will
be the sole Subsidiary of the Resulting Issuer.

BUSINESS AND STRATEGY OF THE RESULTING ISSUER

Stated Business Objectives

Patriot has engineered CMR-1, a microwave based solution designed to significantly enhance security in
public and private spaces.
 34

The Resulting Issuer will seek to deploy CMR-1 in public and private spaces used by large number of
persons, who can enjoy unhindered access. With CMR-1, on-site security professionals are free to go
about their duties with minimal or momentary disruption to the general public. Furthermore, city-wide non-
intrusive monitoring of large flow public spaces, such as entrances to mass transit can allow authorities to
monitor weapon movements throughout a city, so that they can effectively deploy law enforcement in a
proactive, cost and time-effective manner. They intend to use this patent pending detection technology in
conjunction with rapid response security protocols at a sub-$5,000 price point and with a reduced
requirement for highly-trained security personnel.

Some of the public and private sector opportunities the Resulting Issuer has identified as compromised
entrance points, for which CMR-1 may be an effective application, are:
(1) Public schools and school buses;
(2) Subway and other general public transit stations;
(3) Embassies, consulates and trade offices; and
(4) Athletic and entertainment-focussed stadiums / arenas

Regulatory Approval
The Resulting Issuer intends to initially work towards regulatory approval for the CMR-1 in North America.
The Resulting Issuers goal is to achieve approval as a Radar Instrument and thereby fast track
approval for deployment in non-controlled environments.

Regulatory approval is a significant milestone of the project goals and the management team will seek
expert advice to pass this milestone in a timely manner. As a novel technology application, there are no
specific regulatory guidelines applicable to CMR-1. Patriot has used a reference platform that has already
passed regulatory approval for radar systems and will seek to minimize the effort involved in regulatory
approvals through a modification of use proposal.

CMR-1 may need to comply with regulatory requirements prescribed for users of WTMDs. There are a
number of standards set for commercial users of WTMDs. Like several other electronic devices, WTMDs
must meet certain environmental standards, Federal Communications Commission (FCC) compatibility
regulations, and electrical safety requirements. Furthermore, any detection equipment that is deployed for
use at airports must comply with guidelines prescribed by the Transportation Security Administration
(TSA), Federal Aviation Administration (FAA), and related international standards, regulations, and test
certifications.

The Resulting Issuer will dedicate adequate time and resources to addressing regulatory requirements
applicable to CMR-1 following completion of the Acquisition, and believes the proposed management
team of the Resulting Issuer is comprised of individuals with appropriate experience and expertise to
address all such regulatory requirements.

Production
The Resulting Issuer expects to outsource production of CMR-1 to reduce capital outlay. Patriot has
secured statements of work with Macadamian for the development of the CMR-1 user interface,
integration of hardware and commercialization of Patriots program algorithm. Sensoft will be modifying
their current rescue radar design to provide a commercially ready beta prototype to install in pilots and for
initial customers. The cost for additional research and software/hardware development is expected to be
$350,000 and is expected to be completed by December 31, 2016. The Resulting Issuer anticipates
spending approximately $250,000 on developing the database and testing at the beta installation site by
approximately June, 2017. Concurrently, the Resulting Issuer intends to spend approximately $250,000
on sourcing production.

Macadamian will continue to collaborate with Patriot and the Resulting Issuer to bring commercialized
threat detection technology to the market. The Resulting Issuers proposed pilot project will install the
 35

CMR-1 at two different facilities and will test the technology with real participants and security teams.
These pilot locations will be critical in assessing the viability and scalability of this security technology.
The data collected in the pilots will help improve the design, as the Resulting Issuer prepares for the April
2017 alpha launch. See Part II Patriot Narrative Description of the Business.

Revenue Streams
Patriot anticipates that it will earn revenues from three sources. The hardware will be provided to the
market place at a price of $5,000-$10,000 per unit based on configuration. This is competitive with walk
through metal detectors from current companies providing solutions in this market. In addition to the
hardware solution there will be a monthly subscription of $10 per device for software updates and
signatures of new weapons. This subscription will be paid monthly for the useful life of the device. Lastly
Patriot will be providing training in security procedures related to active shooter threats with partners and
directly. Management expects that this service component of the business will be no more than 20% of
total revenues.

Patriot plans to distribute products and services through a channel model, partnering with leading
providers of security products and services. Management is in conversation with large security services
companies to resell and promote CMR-1 as part of security installations globally.

SECURITIES OF THE RESULTING ISSUER

The authorized share capital of the Resulting Issuer will consist of an unlimited number of Common
Shares.

OPTIONS TO PURCHASE SECURITIES OF THE RESULTING ISSUER

It is anticipated that the Resulting Issuer will have the following incentive stock options outstanding
immediately following Closing:

Number of
Common
Shares Under
Option on Exercise
completion of Price per
the Common
Name of Optionee Transaction Share Vesting and Expiry
Martin Cronin 300,000 $0.185 Granted and vested in full October 3, 2016,
expiring October 3, 2021
250,000 $0.30 Vested and expiring August 1, 2021
Dinesh 300,000 $0.185 Granted and vested in full October 3, 2016,
Kandanchatha expiring October 3, 2021
400,000 $0.30 Vested and expiring August 1, 2021
Jeff Tindale 250,000 $0.185 Granted and vested in full October 3, 2016,
expiring October 3, 2021
75,000 $0.30 Granted and vested in full October 3, 2016,
expiring October 3, 2021
Michael Malana 100,000 $0.185 Granted and vested in full October 3, 2016,
expiring October 3, 2021
Scott Shepherd 300,000 $0.185 Granted and vested in full October 3, 2016,
expiring October 3, 2021
Natalia Nikolova 200,000 $0.185 Granted and vested in full October 3, 2016,
 36

Number of
Common
Shares Under
Option on Exercise
completion of Price per
the Common
Name of Optionee Transaction Share Vesting and Expiry
expiring October 3, 2021
Andrea Casilio 50,000 $0.30 Granted and vested in full October 3, 2016,
expiring October 3, 2021
Michael Rozin 300,000 $0.30 Granted and vested in full October 3, 2016,
expiring October 3, 2021
Paul Grunthal 150,000 $0.30 Granted and vested in full October 3, 2016,
expiring October 3, 2021
Accent Capital 100,000 $0.30 Granted and vested in full October 3, 2016,
GmbH expiring October 3, 2021
David Waltdam 150,000 $0.30 Granted and vested in full October 3, 2016,
expiring October 3, 2021
Caribbean 300,000 $0.30 Granted and vested in full October 3, 2016,
Consulting Partners, expiring October 3, 2021
LLC 2015 A Series
314 Finance Corp 250,000 $0.30 Granted and vested in full October 3, 2016,
expiring October 3, 2021
James Helwerth 200,000 $0.30 Granted and vested in full October 3, 2016,
expiring October 3, 2021
Ian Murray 100,000 $0.30 Granted and vested in full October 3, 2016,
expiring October 3, 2021
PR Media 100,000 $0.30 Granted and vested in full October 3, 2016,
expiring October 3, 2021
Alexander Koyfman 200,000 $0.30 Granted and vested in full October 3, 2016,
expiring October 3, 2021
Total 4,075,000
 37

PRO FORMA CONSOLIDATED CAPITALIZATION

Pro Forma Consolidated Capitalization

The following table sets out the consolidated pro forma capitalization of the Resulting Issuer prior to and
after giving effect to the Private Placement and the Acquisition, as noted. This table should be read in
conjunction with the Issuer Financial Statements and Pro Forma Financial Statements attached hereto as
Schedules A and C, respectively.

Outstanding
immediately after
Outstanding Outstanding giving effect to the
prior to giving immediately after Acquisition
Amount effect to the giving effect to the assuming
Authorized Acquisition and Acquisition, but completion of the
Designation or to be the Private excluding the Private Maximum Private
of Security Authorized Placement Placement Placement

Common Unlimited 10,862,216 33,822,141 49,155,474

Shares

Pro-Forma Fully Diluted Share Capital of the Resulting Issuer

The following table sets out the expected fully diluted share capital of the Resulting Issuer after giving
effect to the Acquisition, and assuming the exercise or conversion of all options and convertible securities
into Common Shares of the Resulting Issuer:

Assuming Maximum Private Placement

Category of Security
Common Shares Fully Diluted Percentage

Common Shares of the Issuer (Pre-

10,862,216 11.82%
Acquisition, Pre-Private Placement)
Outstanding incentive stock options of the 0.27%
250,000
Issuer

Outstanding warrants of the Issuer 9,838,800 10.71%

Common Shares issued to Patriot

shareholders in connection with the 24.98%
22,959,925
securities exchanged comprising the
Acquisition
Common Shares to be issued pursuant to 16.68%
15,333,333
the Private Placement

Common Shares to be issued pursuant to 16.68%

15,333,333
the exercise of Private Placement Warrants

Common Shares issuable upon exercise of 1.33%

1,226,667
Private Placement finder warrants(1)
 38

Common Shares issuable upon exercise of

warrants of the Resulting Issuer issuable 13.36%
12,274,924
upon exchange of warrants of Patriot
pursuant to the Acquisition

Common Shares issuable upon exercise of

options of the Resulting Issuer issuable 4.16%
3,825,000
upon exchange of options of Patriot
pursuant to the Acquisition

Total proposed outstanding securities 91,904,198 100%

Notes:
(1) Assumes that Private Placement finder warrants are issuable in relation to 100% of the Common Shares issuable
pursuant to the maximum Private Placement on an 8% basis.

AVAILABLE FUNDS AND PRINCIPAL USES

The following tables set forth the estimated total funds available to the Resulting Issuer upon completion
of the Acquisition, as well as the principal purposes for which the estimated funds available to the
Resulting Issuer upon completion of the Acquisition will be used and the current estimated amounts to be
used for each such principal purpose during the 12 month period following Closing:

Assuming Maximum Private

Placement

Consolidated current working capital calculated as of August 31, $710,856

2016, after pro forma adjustments, prior to the Private Placement

Gross proceeds from Private Placement $2,300,000

Estimated costs of the Private Placement and the Acquisition ($100,000)

Total available funds $2,910,856

The following table sets forth the expected use of proceeds by the Resulting Issuer, assuming completion
of the Acquisition:

Assuming Maximum Private

Placement

Research and Product Development $350,000

Compile database, testing and beta trial $250,000

Identify contract manufacturers $250,000

Marketing and trade shows $350,000

Patent, audit and public company expenses $150,000

 39

General and Administrative cost $475,000

General unallocated working capital $1,085,856

Total use of proceeds $2,910,856

The Resulting Issuers intentions to spend the available funds as set forth above are based on the current
expectations of management; however, there may be circumstances where, for sound business reasons,
a reallocation of funds may be necessary. Any such reallocation will be determined at the discretion of
the Resulting Issuers management, and there can be no assurance as of the date of this Filing
Statement as to how those funds may be reallocated. The Resulting Issuer may require additional funds
in order to fulfill all of the Resulting Issuers expenditure requirements to meet its objectives, in which
case the Resulting Issuer expects to either issue additional Common Shares or incur indebtedness.
There is no assurance that additional funding required by the Resulting Issuer would be available on
commercially reasonable terms, or at all, if required; however, it is anticipated that the available funds will
be sufficient to satisfy the Resulting Issuers objectives over at least the next 12 months.

Dividend Policy
It is not anticipated that the Resulting Issuer will pay any cash dividends in the foreseeable future. It is
expected that the Resulting Issuer will use its earnings to finance further business development. Any
future determination to pay dividends will be at the discretion of the Resulting Issuers board of directors
and will depend on, among other things, the Resulting Issuers results of operations, current and
anticipated cash requirements and surplus, financial condition, contractual restrictions and financing
agreement covenants, solvency tests imposed by corporate law and other factors that the board of
directors may deem relevant. There are no restrictions on the Resulting Issuers ability to pay dividends.

PRINCIPAL SECURITYHOLDERS

To the knowledge of management of the Issuer, no Person or Company is anticipated to own of record or
beneficially, directly or indirectly, or exercise control or direction over more than 10% of any class of
voting securities of the Resulting Issuer upon completion of the Acquisition.

PROPOSED DIRECTORS AND OFFICERS

Proposed Directors and Officers

The following table shows certain information concerning the individuals who are proposed to become or
remain, as applicable, directors and/or officers of the Resulting Issuer upon the completion of the
Acquisition.
 40

Number and
percent of
Common Shares
proposed to be
beneficially
Proposed owned, directly or
positions and indirectly, or over
offices to be Principal which control or
Name and held with the occupations Prior positions direction is
municipality of Resulting within the five with the Issuer or proposed to be
residence Issuer preceding years Patriot exercised (1)
Martin Cronin CEO and See detailed CEO & Director of 500,000
Kelowna, B.C. Director description below Patriot 1.02%

Dinesh President and See detailed President, CTO & 2,000,000

Kandanchatha Director description below Director of Patriot 4.07%
Brampton, ON
Scott Shepherd Director See detailed Chairman - Board 400,000
Vancouver, B.C. description below of Directors of 0.81%
Patriot
Michael Malana Chief Financial See detailed Chief Financial 130,000
Richmond, B.C. Officer description below Officer of Patriot 0.26%
Natalia Nikolova CTO See detailed Chief Science 750,000
Hamilton, ON description below Officer of Patriot 1.53%
Jeffery Tindale Director President of Director of the 200,000
Vancouver, B.C. Birken Capital Issuer 0.41%
Partners Ltd.
since January,
2015; President
and CEO of
Cliffmont
Resources Ltd.
since August,
2009; director of
Homestake
Resource
Corporation since
June, 2014;
director of Batero
Gold Corporation
from March, 2008
to July, 2010
Carrie Cesarone Corporate See detailed Chief Financial 100,000
Vancouver, B.C. Secretary description Officer and 0.20%
below. Corporate
Secretary of the
Issuer
Note:

(1) Assuming maximum Private Placement is completed, for a total of 49,155,474 Common Shares outstanding immediately
following Closing, on an undiluted basis.
 41

The term of each proposed director of the Resulting Issuer will expire on the date of the next annual
meeting of shareholders of the Resulting Issuer.

After the completion of the Acquisition the directors and senior officers of the Resulting Issuer as a group
are expected to beneficially own, directly or indirectly, or over which control or direction is proposed to be
exercised, 3,480,000 of the then issued and outstanding Common Shares, representing approximately
7.08% of the total votes attaching to all of the then outstanding Common Shares.

The following is some brief information about each of the proposed directors and proposed key
management of the Resulting Issuer in addition to the information provided above.

Martin Cronin, CEO and Director of the Resulting Issuer Age 51

Martin Cronin is an expert in the areas of counter-terrorism, conflict resolution, and government/corporate
interface. He has extensive experience in high intensity conflict environments and currently serves as
CEO of a private company specializing in communications and survivability technologies. Before moving
to the private sector, Mr. Cronin was British Consul-General to Western Canada, based in Vancouver. His
career includes over twenty years of experience in the field of international diplomacy with the British
Government, including postings in Yemen, Jordan, Sweden, Pakistan and Iraq. Mr. Cronin is also
Honorary Colonel of the British Columbia Dragoons (a Canadian Forces Primary Reserve Regiment),
Regional Director of the Canadian Forces Liaison Council, a member of the Advisory Board of the Central
Okanagan Economic Development Commission, and Member of the Advisory Board of International
Yacht Training Worldwide. He is a frequent guest speaker on the Middle East and security issues. It is
anticipated Mr. Cronin will devote approximately 30% of his time to the business and affairs of the
Resulting Issuer.

Dinesh Kandanchatha, President and Director of the Resulting Issuer Age 41

Dinesh is a serial entrepreneur who possesses nearly 20 years of experience in general, operational,
sales and marketing management. A top 40 under 40 winner, his extensive leadership skills and
mentoring have left a lasting impression on his colleagues, managers and team members and have
driven great results for the firms he has been part of. Currently the Managing Director for Macadamian,
an industry leading design and engineering studio, Dinesh has a MBA from the University of Ottawa and
is the youngest student to graduate from the Executive MBA program at the age of 24. His extensive
experience in scaling businesses contributed most recently to the successful growth of Protus IP
solutions to an annual revenue run rate of close to $100M resulting in the subsequent acquisition by J2
Global Corporation for over $200M. He has published articles in a variety of trade magazines in regards
to embedded systems programming issues and been involved in the release of nearly 200 products. It is
anticipated Mr. Kandanchatha will devote 100% of his time to the business and affairs of the Resulting
Issuer.

Scott Shepherd, Director of the Resulting Issuer Age 58

Born in Ontario, Canada and educated at the University of Toronto and Dalhousie University, Mr.
Shepherd has worked with the Department of Foreign Affairs and International Trade, Export
Development Corporation, Imperial Chemical Industries PLC and Trafalgar House PLC, as well as a stint
as Chief Financial Officer with the Nexus group of Companies in Burnaby, B.C. Canada. As President
and founding director of NORTHSTAR Trade Finance, Inc., Mr. Shepherd has been active with the
promotion and support of small and medium sized exporters throughout the world. Mr. Shepherd serves
on a number of Canadian boards. He is the Chair, B.C. Provincial Committee, Canadian Armed Forces
Liaison Council; Governor, Dalhousie University; Chairman, MDS Aero Support Corporation; Honourary
Consul of Uruguay for British Columbia and Alberta; National Arts Centre Foundation Director; Director
and Chair of Audit Committee, Ridley Terminals, a Federal Crown Corporation appointed May 2008;
Honourary President for British Columbia and Yukon St. John Ambulance Brigade; Past National Director
and Member of Audit Committee, Canadian Manufacturers and Exporters; Past Governor, B.C. Institute
for Studies in International Trade; Past Vice-Chair and Trustee, Richmond Hospital Foundation; Past
Director and Chair of Audit Committee MDS Aero Support Corp.; Past Director and Chair of Audit
 42

Committee Pender Financial Group. It is anticipated Mr. Shepherd will devote approximately 20% of his
time to the business and affairs of the Resulting Issuer.

Carrie Cesarone, Corporate Secretary of the Resulting Issuer Age 51

Ms. Cesarone has worked in the public company sector for over 20 years. She currently works as an
independent contractor for Exchange and Canadian Securities Exchange listed companies, and holds a
Bachelor of Arts degree from Simon Fraser University. Ms. Cesarone is a self-employed paralegal
consultant since January, 2007; Chief Financial Officer and Corporate Secretary of the Issuer since April,
2016; Chief Financial Officer and Corporate Secretary Argentum Silver Corp. since September, 2014; and
Corporate Secretary of Goldeneye Resources Corp. since October, 2012. Previously, she was Chief
Financial Officer of Sunvest Minerals Corp. from September, 2013 to February, 2015; Corporate
Secretary of 92 Resources Corp. from April, 2013 to September, 2013 and Corporate Secretary of
Sunvest Minerals Corp. from April, 2011 to February, 2015. It is anticipated Ms. Cesarone will devote
approximately 10% of her time to the business and affairs of the Resulting Issuer.

Natalia Nikolova, Chief Scientific Officer of the Resulting Issuer Age 53

Dr. Natalia K. Nikolova is the Canada Research Chair in High-Frequency Electromagnetics. Professor
Nikolova received the Dipl. Eng. (Radioelectronics) degree from the Technical University of Varna,
Bulgaria, in 1989, and the Ph.D. (Electrical Engineering) degree from the University of Electro-
Communications, Tokyo, Japan, in 1997. Her Ph.D. studies in Japan (1994 to 1997) were supported by a
Monbusho (Government of Japan) Postgraduate Scholarship for Foreign Students. From 1998 to 1999,
she held a Postdoctoral Fellowship of the Natural Sciences and Engineering Research Council of Canada
(NSERC), during which time she was initially with the Microwave and Electromagnetics Laboratory,
DalTech, Dalhousie University, Halifax, Canada, and, later, for a year, with the Simulation Optimization
Systems Research Laboratory, McMaster University, Hamilton, ON, Canada. In July 1999, she joined the
Department of Electrical and Computer Engineering, McMaster University, where she is currently a
Professor. It is anticipated Ms. Nikolova will devote 80% of her time to the business and affairs of the
Resulting Issuer.

Her research interests include microwave imaging and inverse scattering, theoretical and computational
electromagnetism as well as computer-aided design of high-frequency structures and antennas. She has
published more than 100 papers in engineering and physics journals, and has contributed to more than
135 refereed conferences in the field of microwave engineering and radar, antenna engineering,
numerical methods and theoretical electromagnetism. Prof. Nikolova has contributed chapters for four
books and is a holder of two patents. In 2011, she was appointed an IEEE Distinguished Microwave
Lecturer for a 3-year term and has given numerous invited lectures around the world.

Michael Malana, CFO of the Resulting Issuer Age 52

Mr. Malana is a CPA, CMA with extensive experience in public company accounting and administration.
From October 2013 to November 2014 Mr. Malana served as CFO and Corporate Secretary of Apivio
Systems Inc., (TSXV:APV), where he was responsible for Apivios transition from a private to a public
company. From March 2012 to October 2013, Mr. Malana was the Chief Financial Officer at Sunward
Resources Ltd. (TSX:SWD), where he was involved in Sunwards transition from the TSX Venture
Exchange to the TSX. From May 2008 to November 2009, Mr. Malana was the Corporate Controller of
Jinshan Gold Mines (now listed on the TSX as China National Gold) where he led the Accounting and
Finance group in the transition from the exploration to the development to the production stage. Mr.
Malana was also involved in Jinshan's early adoption of IFRS and the company's secondary listing on the
Hong Kong Stock Exchange. Mr. Malana graduated with a Bachelor of Commerce degree (accounting
major) from Concordia University in Montreal in 1996. It is anticipated Mr. Malana will devote
approximately 20% of his time to the business and affairs of the Resulting Issuer.

Jeffery Tindale, Director of the Resulting Issuer Age 45

Mr. Tindale has extensive experience in capital raising in North America and Europe, corporate
development, project acquisitions, and strategic planning. Mr. Tindale is a Managing Partner of a private
consulting group providing advisory services to numerous private and public companies. He has a
 43

diversified background including founding successful private enterprises and over eight years in the
exploration field, exploring for diamonds and precious metals. It is anticipated Mr. Tindale will devote
approximately 10% of his time to the business and affairs of the Resulting Issuer.

Committees
It is expected that the Resulting Issuers board of directors will have an audit committee. The initial
members of the Resulting Issuers audit committee are expected to be Scott Shepherd, Jeffery Tindale
and Dinesh Kandanchatha.

Corporate Cease Trade Orders or Bankruptcies

Except as set out below, to the knowledge of the Issuer, as at the date of this Filing Statement and within
the ten years before the date of this Filing Statement, no director or proposed director, officer or promoter
of the Resulting Issuer is or has been a director, officer or promoter of any company (including the
Resulting Issuer) that, while that person was acting in that capacity:

(a) was the subject of a cease trade order or similar order or an order that denied the
relevant company access to any exemption under securities legislation, for a period of
more than 30 consecutive days;

(b) was subject to an event that resulted, after the director or executive officer ceased to be a
director or executive officer, in the company being the subject of a cease trade or similar
order or an order that denied the relevant company access to any exemption under
securities legislation, for a period of more than 30 consecutive days; or

(c) within a year of that person ceasing to act in that capacity, became bankrupt, made a
proposal under any legislation relating to bankruptcy or insolvency or was subject to or
instituted and proceedings, arrangement or compromise with creditors or had a receiver,
receiver manager or trustee appointed to hold its assets.

Mr. Tindale is President and CEO of Cliffmont Resources Ltd. (Cliffmont). On February 5, 2016, the
British Columbia Securities Commission issued a cease trade order against Cliffmont for failure to file
annual audited financial statements and managements discussion and analysis for the year ended
September 30, 2015. On February 9, 2016, the Ontario Securities Commission issued a cease trade
order against Cliffmont for failure to file annual audited financial statements, managements discussion
and analysis and related certifications for the year ended September 30, 2015 and for failure to pay the
filing fees in respect thereof. The British Columbia Securities Commission and Ontario Securities
Commission cease trade orders remain outstanding as of the date of this Filing Statement.
Ms. Cesarone is Chief Financial Officer of Argentum Silver Corp. (Argentum). On November 2, 2015,
at the request of Argentum, the British Columbia Securities Commission issued a cease trade order
against insiders of Argentum for failure to file annual audited financial statements and managements
discussion and analysis for the year ended June 30, 2015. The cease trade order was revoked on
December 16, 2015.

Penalties or Sanctions
To the knowledge of the Issuer, no proposed director, officer or promoter of the Resulting Issuer has:

(a) been subject to any penalties or sanctions imposed by a court relating to securities
legislation or by a securities regulatory authority or has entered into a settlement
agreement with a securities regulatory authority; or

(b) been subject to any other penalties or sanctions imposed by a court or regulatory body,
including a self-regulatory body, that would be likely to be considered important to a
reasonable security holder making a decision about the Acquisition.
 44

Personal Bankruptcies
To the knowledge of the Issuer, no proposed director, officer or promoter of the Resulting Issuer, or a
personal holding company of any of them, has, within the ten years prior to the date of this Filing
Statement, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency,
or been subject to or instituted any proceedings, arrangement, or compromise with creditors or had a
receiver, receiver manager or trustee appointed to hold the assets of that individual.

Conflicts of Interest
To the knowledge of the Issuer, no proposed director, officer or promoter of the Resulting Issuer has any
existing or potential material conflicts of interests with the Resulting Issuer as a result of their outside
business interests other than as follows:

Other Reporting Issuer Experience

The following table sets out the proposed directors, officers and promoters of the Resulting Issuer that
are, or have been within the last five years, directors, officers or promoters of reporting issuers:

Name and Jurisdiction Name of Exchange

NAME of Reporting Issuer Market Position From To
Jeffrey Tindale Cliffmont Resources Ltd. TSX Venture Director, August, 2009 Present
Exchange President and
CEO
Homestake Resource TSX Venture Director June, 2014 Present
Corporation Exchange
Michael Malana Orca Touchscreen Canadian Securities Chief Financial August, 2015 October,
Technologies Ltd. Exchange Officer 2016
Apivio Systems Inc. TSX Venture Chief Financial October, 2013 November,
Exchange Officer 2014
Sunward Resources Ltd. Toronto Stock Chief Financial March, 2012 October,
Exchange Officer 2013
Carrie Cesarone 92 Resources Corp. TSX Venture Corporate April, 2013 September,
Exchange Secretary 2013
Sunvest Minerals Corp. TSX Venture Corporate April, 2011 February,
Exchange Secretary 2015
March, 2016 Present

Chief Financial September, February,

Officer 2013 2015
Goldeneye Resources TSX Venture Corporate October, 2012 Present
Corp. Exchange Secretary
Argentum Silver Corp. TSX Venture Corporate September, Present
Exchange Secretary and 2014
Chief Financial
Officer
Nomad Ventures Inc. TSX Venture Director, Chief September, Present
Exchange Financial 2016
Officer, and
Corporate
Secretary

EXECUTIVE COMPENSATION

The Resulting Issuer Board shall determine and assume responsibility for executive compensation of the
Resulting Issuer. Generally, compensation will be comprised of base salary, in addition to stock based
compensation and other compensation. The CEO of the Resulting Issuer shall make recommendations to
the Resulting Issuer Board for their consideration and determination.
 45

Compensation Discussion and Analysis

Compensation, Philosophy and Objectives
Remuneration plays an important role in attracting, motivating, rewarding and retaining knowledgeable
and skilled individuals to the Resulting Issuers management team. The Resulting Issuer will not have a
formal compensation policy. The main objectives the Resulting Issuer hopes to achieve through its
compensation are:
to attract and retain executives critical to the Resulting Issuers success, who will be key in
helping the Resulting Issuer achieve its corporate objectives and increase shareholder value;
to motivate the Resulting Issuers management team to meet or exceed targets;
to recognize the contribution of executive directors to the overall success and strategic growth of
the Resulting Issuer; and
to align the interests of management and the Resulting Issuers shareholders by providing
performance based compensation in addition to salary.
The Resulting Issuers Board will determine an appropriate amount of compensation for its executives,
reflecting the need to provide incentive and compensation for the time and effort expended by the
executives while taking into account the financial and other resources of the Resulting Issuer.
The Resulting Issuers management will not be permitted to purchase financial instruments, including, for
greater certainty, prepaid variable forward contracts, equity swaps, collars, or units of exchange funds
that are designed to hedge or offset a decrease in market value of equity securities of the Resulting
Issuer granted as compensation or held, directly or indirectly, by management. The Resulting Issuer
Board will determine the allocation and terms of any stock option grants.
Analysis of Elements
Base salary is used to provide the Resulting Issuers management with a set amount of money during the
year with the expectation that each will perform his/her responsibilities to the best of his/her ability and in
the best interests of the Resulting Issuer.
The Issuer and Patriot expect the proposed granting of incentive stock options by the Resulting Issuer to
be a significant component of executive compensation as it allows the Resulting Issuer to reward each
team members efforts to increase value for shareholders without requiring the Resulting Issuer to use
cash from its treasury. On Closing of the Acquisition, the incentive stock option plan of the Resulting
Issuer will be the Plan. Stock options are generally expected to be awarded to directors, officers,
consultants and employees immediately following the Acquisition and periodically thereafter. The terms
and conditions of the Resulting Issuers stock option grants, including vesting provisions and exercise
prices, are governed by the terms of the Plan.
Compensation Governance
The Resulting Issuer Board will determine an appropriate amount of compensation for its executives,
reflecting the need to provide incentive and compensation for the time and effort expended by the
executives while taking into account the financial and other resources of the Issuer. The Resulting
Issuers Board will regularly consider the implications of the risks associated with the Resulting Issuers
compensation practices; however, given the Resulting Issuers size and nature of proposed
compensation provided to its executives, the directors of the Issuer and Patriot do not view significant risk
that would be likely to have a material adverse effect on the Resulting Issuer arising from its proposed
compensation practices. The Resulting Issuer will not have a Compensation Committee.
 46

Compensation of Named Executive Officers - Summary Compensation Table

The following table sets out information concerning the proposed compensation to be paid by the
Resulting Issuer to the Resulting Issuers named executive officers for the first 12 months after the
Closing. The following is subject to change as determined by business and financial considerations of the
Resulting Issuer after Closing

Non-equity incentive
plan compensation ($)
Share- Option- Long-
based based Annual term Pensio All other Total
Name and awards awards incentive incentive n value compensati compensati
principal position Salary ($) ($) ($)(1) plans plans ($) on ($) on ($)
Martin Cronin,
CEO and a Director
$60,000 Nil Note 1 Nil Nil Nil Nil $60,000
Dinesh
Kandanchatha,
President and a
$199,992 Nil Note 1 Nil Nil Nil Note 2 $199,992
Director
Michael Malana,
CFO
$48,000 Nil Note 1 Nil Nil Nil Nil $48,000

Notes:
(1) See Part III The Resulting Issuer Options to Purchase Securities of the Resulting Issuer.

(2) The Resulting Issuer shall pay Mr. Kandanchatha $100,000 in the event the Patriot completes an equity financing for
aggregate gross proceeds of at least $2,000,000 after January 1, 2017 but prior to the expiry of Mr. Kandanchathas
current consulting agreement with the Patriot (to be assumed by the Resulting Issuer on closing of the Acquisition).

Compensation of Directors
It is anticipated that the Resulting Issuer may grant stock options to directors in recognition of the time
and effort that such directors devote to the Resulting Issuer. See Part III The Resulting Issuer
Options to Purchase Securities of the Resulting Issuer.

Stock Option Plan and other Incentive Plans

The Resulting Issuers Stock Option Plan will be the same as the Plan. For details about the Plan see
Part 1 The Issuer Options to Purchase Securities of the Issuer. The Resulting Issuer does not
currently expect that there will be other incentive plan awards.

Employment Arrangements and Agreements

Patriot entered into a consulting agreement with Martin Cronin on August 1, 2016 (the Cronin
Agreement). The Cronin Agreement has a one year term, and sets out the terms by which Martin Cronin
is to provide services as CEO of Patriot. Martin Cronins monthly consulting fee is $5,000 plus GST and
he was granted an option to purchase 250,000 Patriot Shares under Patriots stock option plan. The
Cronin Agreements non-competition clause applies to Marin Cronin for one year following termination.
See Part III The Resulting Issuer Executive Compensation - Compensation of Named Executive
Officers - Summary Compensation Table.

Patriot entered into a consulting agreement with Dinesh Kandanchatha dated effective October 1, 2016
(the Kandanchatha Agreement). The Kandanchatha Agreement has a two year term, and sets out the
terms by which Dinesh Kandanchatha is to provide services as President and Chief Technical Officer of
Patriot. Dinesh Kandanchathas monthly consulting fee is $16,666 plus GST and he was granted options
to purchase 400,000 Patriot Shares under Patriots stock option plan. The Kandanchatha Agreements
non-competition clause applies to Dinesh Kandanchatha for one year following termination. See Part III
The Resulting Issuer Executive Compensation - Compensation of Named Executive Officers - Summary
Compensation Table.
 47

INVESTOR RELATIONS AGREEMENTS

The Issuer has not entered into any written or oral agreement or understanding with any Person to
provide any promotional or investor relations services for the Resulting Issuer or its securities or to
engage in activities for the purpose of stabilizing the market. Any such agreement or understanding that
may be entered into following the Closing will be at the determination of the Board.

ESCROWED SECURITIES

Value Security Escrow Agreement

The following table sets forth the relevant particulars of Common Shares in the Resulting Issuer which are
expected to be held by principals and other shareholders of the Resulting Issuer and subject to the
escrow following Closing:

NAME AND Designation Prior to Giving Effect to After Giving Effect to the
MUNICIPALITY OF of Class the Transaction Transaction(1)
RESIDENCE OF Number of Percentage Number of Percentage
SHAREHOLDER Securities of Class Securities of Class
held in to be held
Escrow in Escrow
Jared Boock Common Nil Nil
Gainesville, FL shares 100,000 0.20%

Kulwant Malhi(2) Common Nil Nil

shares 1,500,001 3.05%
Delta, B.C.
Common
Rajni Singhera(3) Nil
shares Nil 1,500,000 3.05%
Surrey, B.C.
Common
Michael Rozin Nil Nil
shares 400,000 0.81%
Minneapolis, MN
Common
Sandip Rai(4) Nil Nil
shares 1,275,000 2.59%
Vancouver, B.C.
Common
Paul Borselli 100,000(5) 0.44%
shares 100,000 0.20%
Scottsdale, AZ
Common
Phil Lancaster Nil Nil
shares 100,000 0.20%
Kelowna, B.C.
Common
James Pearson Nil Nil
shares 100,000 0.20%
Coquitlam, B.C.
Common
John Gillies Nil Nil
shares 150,000 0.31%
Surrey, B.C.
Common
Jamie Graham Nil Nil
shares 150,000 0.31%
Victoria, B.C.
Michael Malana Common Nil Nil 130,000 0.26%
Richmond, B.C.(6) shares
McMaster University(7) Common Nil Nil Nil Nil
Hamilton, ON shares
 48

NAME AND Designation Prior to Giving Effect to After Giving Effect to the
MUNICIPALITY OF of Class the Transaction Transaction(1)
RESIDENCE OF Number of Percentage Number of Percentage
SHAREHOLDER Securities of Class Securities of Class
held in to be held
Escrow in Escrow
Dinesh Kandanchatha(8) Common
8.71%
Brampton, ON shares 2,000,000(9) 2,000,000 4.07%

Martin Cronin(10) Common

500,000(11) 2.18%
Kelowna, B.C. shares 500,000 1.02%

Natalia Nikolova(12) Common

Nil Nil
Hamilton, ON shares 750,000 1.53%

Carrie Cesarone(13) Common Nil Nil 100,000 0.20%

Vancouver, B.C. shares
Scott Shepherd (14) Common Nil Nil 400,000 0.81%
Vancouver, B.C. shares
Carolyn Shepherd(15) Common Nil Nil Nil Nil
Vancouver, B.C. shares
Jeff Tindale(16) Common Nil Nil 200,000 0.41%
Vancouver, B.C. shares
Total: 2,600,000 11.32% 9,455,001 19.23%
Note:
(1) The calculations in this table assume the completion of the maximum Private Placement and a total of 49,155,474
Common Shares outstanding on closing of the Transaction.

(2) In addition, Bullrun, a corporation owned and controlled by Mr. Malhi, holds 500,000 Patriot Shares that will, pursuant to
the Acquisition, be Common Shares subject to the One Year Hold, and 500,000 July Patriot Warrants that will, pursuant to
the Acquisition, be warrants of the Resulting Issuer subject to the Four Month Hold.

(3) In addition, Mrs. Singhera holds 1,500,000 Patriot Shares that will, pursuant to the Acquisition, be Common Shares
subject to the One Year Hold, and 1,500,000 July Patriot Warrants that will, pursuant to the Acquisition, be warrants of the
Resulting Issuer subject to the Four Month Hold.

(4) In addition, Mrs. Rai holds 1,350,000 Patriot Shares that will, pursuant to the Acquisition, be Common Shares subject to
the One Year Hold, and 1,350,000 July Patriot Warrants that will, pursuant to the Acquisition, be warrants of the Resulting
Issuer subject to the Four Month Hold.

(5) Mr. Borselli has entered into a voluntary pooling agreement with Patriot pursuant to which all of his Patriot Shares are
subject to voluntary restrictions on transfer expiring as to 50% on October 16, 2016 and 50% on April 15, 2017.

(6) In addition, Mr. Malana owns 30,000 August Patriot Warrants that will, pursuant to the Acquisition, be exchange for
Resulting Issuer warrants subject to the Value Security Escrow Agreement. Mr. Malana will own 100,000 incentive stock
options of the Resulting Issuer on closing of the Acquisition, all of which will be subject to the Value Escrow Security
Agreement.

(7) In addition, McMaster University holds 1,560,000 Patriot Shares that will, pursuant to the Acquisition, be Common Shares
subject to the One Year Hold.

(8) In addition, Mr. Kandchatha will own 700,000 incentive stock options of the Resulting Issuer on closing of the Acquisition,
all of which will be subject to the Value Escrow Security Agreement.

(9) Mr. Kandchatha has entered into a voluntary pooling agreement with Patriot pursuant to which all of his Patriot Shares are
subject to voluntary restrictions on transfer expiring as to 25% on October 16, 2016, 25% on April 15, 2017, 25% on
October 16, 2017 and 25% on April 15, 2018.
 49

(10) In addition, Mr. Cronin will own 550,000 incentive stock options of the Resulting Issuer on closing of the Acquisition, all of
which will be subject to the Value Escrow Security Agreement.

(11) Mr. Cronin has entered into a voluntary pooling agreement with Patriot pursuant to which all of his Patriot Shares are
subject to voluntary restrictions on transfer expiring as to 50% on October 16, 2016 and 50% on April 15, 2017.

(12) In addition, Ms. Nikolova will own 200,000 incentive stock options of the Resulting Issuer on closing of the Acquisition, all
of which will be subject to the Value Escrow Security Agreement.

(13) Ms. Cesarone also holds 100,000 warrants to purchase Common Shares at an exercise price of $0.20 on or before June
27, 2019 that will, following the Acquisition, be subject to the Value Security Escrow Agreement.

(14) In addition, Mr. Shepherd will own 300,000 incentive stock options of the Resulting Issuer on closing of the Acquisition, all
of which will be subject to the Value Escrow Security Agreement.

(15) In addition, Mrs. Shepherd holds 200,000 Patriot Shares that will, pursuant to the Acquisition, be Common Shares subject
to the One Year Hold, and 200,000 July Patriot Warrants that will, pursuant to the Acquisition, be warrants of the
Resulting Issuer subject to the Four Month Hold.

(16) Mr. Tindale also holds 100,000 warrants to purchase Common Shares at an exercise price of $0.20 on or before June 27,
2019 that will, following the Acquisition, be subject to the Value Security Escrow Agreement. In addition Mr. Tindale will
hold 325,000 incentive stock options of the Resulting Issuer on closing of the Acquisition, all of which will be subject to the
Value Escrow Security Agreement.

The Common Shares set forth in the table above will be held in escrow by the Escrow Agent pursuant to
a Value Security Escrow Agreement. The escrowed securities shall be released as to 10% immediately
following the issuance of the Final Exchange Bulletin and as to 15% every six months thereafter.

General
If the Resulting Issuer meets the Exchanges Tier 1 minimum listing requirements either at the time the
Final Exchange Bulletin is issued or subsequently, the release of the escrowed Common Shares will be
accelerated. An accelerated escrow release will not commence until the Resulting Issuer has made
application to the Exchange for listing as a Tier 1 issuer and the Exchange has issued a bulletin that
announces the acceptance for listing of the Resulting Issuer on Tier 1 of the Exchange.

The Exchanges prior consent must be obtained before a transfer within escrow of escrowed Common
Shares. Generally, the Exchange will only permit a transfer within escrow to be made to incoming
Principals of the Resulting Issuer.

The Value Security Escrow Agreement will provide, inter alia, that all voting rights attached to escrowed
securities shall be exercised by the registered holder of such securities.

Voluntary Resale Restrictions

Pursuant to the terms of the Acquisition Agreement, Patriot shareholders who acquired their Patriot
Shares and Patriot warrants pursuant to Patriots August 22, 2016 private placement have agreed to have
the Common Shares and Resulting Issuer warrants issued to them pursuant to the Acquisition subject to
voluntary resale restrictions, over and above those imposed by applicable securities laws. These
voluntary resale restrictions place an absolute restriction on the ability of applicable Resulting Issuer
shareholders to resell their Common Shares or transfer their Resulting Issuer warrants and will be
released four months and one day from closing of the Private Placement. A total of 5,074,924 Common
Shares of the Resulting Issuer will be subject to these voluntary resale restrictions.

AUDITORS, TRANSFER AGENT AND REGISTRAR

From Closing, the auditor of the Resulting Issuer will be Davidson & Company LLP.

The Transfer Agent will continue to be the transfer agent and registrar for the Common Shares of the
Resulting Issuer.
 50

SPONSORSHIP

Pursuant to the policies of the Exchange, Patriot and the Issuer have obtained a discretionary waiver from
the Exchange in respect of its sponsorship requirements - no sponsor will be engaged in connection with
the Acquisition.

EXPERTS

Opinions
The financial statements of the Issuer included in this Filing Statement have been audited by Davidson &
Company LLP, as set forth in their audit reports. Davidson & Company LLP is the independent auditor of
the Issuer and is independent within the meaning of the Rules of Professional Conduct of the Institute of
Chartered Professional Accountants of British Columbia.

The financial statements of Patriot included in this Filing Statement have been audited by Davidson &
Company LLP, as set forth in their audit reports. Davidson & Company LLP is the independent auditor of
the Issuer and is independent within the meaning of the Rules of Professional Conduct of the Institute of
Chartered Professional Accountants of British Columbia.

Interests of Experts
No Person who is named as having prepared or certified a part of this Filing Statement or prepared or
certified a report or valuation described or included in this Filing Statement has, or will have immediately
following completion of the Acquisition, any direct or indirect interest in the Resulting Issuer or Patriot.

BOARD APPROVAL

The Board has approved this Filing Statement.

PART IV DESCRIPTION OF RISK FACTORS ASSOCIATED WITH THE ACQUISITION

The following risk factors should be carefully considered in evaluating the Issuer, Patriot, the Resulting
Issuer and the Acquisition.

The risks presented below may not be all of the risks that the Resulting Issuer and Patriot may face. It is
believed that these are the factors that could cause actual results to be different from expected and
historical results. The Management Discussion and Analysis of Patriot attached as Schedule D hereto,
as well as other sections of this Filing Statement, include additional factors that could have an effect on
the business and financial performance of the business following the completion of the Acquisition. The
market in which Patriot currently competes is very competitive and changes rapidly. Sometimes new risks
emerge and management may not be able to predict all of them, or be able to predict how they may
cause actual results to be different from those contained in any forward-looking statements. You should
not rely upon forward-looking statements as a prediction of future results. All references to Patriot in this
Part IV refer to the consolidated business of Patriot and the Resulting Issuer following Closing.

RISKS RELATED TO THE RESULTING ISSUERS BUSINESS

Reliance on the successful development of prototype of Cognitive Microwave Radar (CRM-1).

The Resulting Issuers ability to generate future revenue or achieve profitable operations is largely
dependent on the ability to attract the experienced management and know-how to develop new devices
and to partner with larger, more established companies in the industry to successfully commercialize
products. Successfully developing a prototype of CRM-1 into a marketable device may take several years
and significant financial resources, and the Resulting Issuer may not achieve those objectives.

In order to commercialize any product, the Resulting Issuer will need to conduct trials, which may not
succeed, and to obtain regulatory approvals which it may fail to do. CMR-1 may need to comply with
 51

regulatory compliance requirements prescribed for users of Walk-Through Metal Detectors (WTMDs)
although this is not certain presently. There are a number of standards set for commercial users of
WTMDs. Like several other electronic devices, WTMDs must meet certain environmental standards,
Federal Communications Commission (FCC) compatibility regulations, and electrical safety
requirements. Furthermore, any detection equipment that is deployed for use at airports must comply with
guidelines prescribed by the Transportation Security Administration (TSA), Federal Aviation
Administration (FAA), and related international standards, regulations, and test certifications.

The Resulting Issuer does not know and is unable to predict what type and how many trials the FCC, TSA
and FAA will require the Resulting Issuer to conduct before granting approval for it to market its products.
The development programs may not lead to a commercial product, either because failure to demonstrate
that product candidates are safe and effective in trials and cannot obtain necessary approvals from the
FCC, TSA, FAA and/or similar foreign regulatory agencies or because of inadequate financial or other
resources to advance product candidates through the trial process for successful commercialization.

Patriot has a history of losses, and the Resulting Issuer may be unable to achieve or sustain
profitability.

Patriot has experienced net losses since its inception and, as of July 31, 2016, had an accumulated
deficit of $604,242. The Resulting Issuer expects to incur a net loss in 2016. Patriot and the Resulting
Issuer do not know if business operations will become profitable or if the Resulting Issuer will continue to
incur net losses in 2017 and beyond. The Resulting Issuer is therefore subject to many of the risks
common to early-stage enterprises, including under-capitalization, cash shortages, limitations with
respect to personnel, financial, and other resources and lack of revenues.The Resulting Issuer expects to
incur significant future expenses as it develops and expands its business, which will make it harder for the
Resulting Issuer to achieve and maintain future profitability. The Resulting Issuer may incur significant
losses in the future for a number of reasons, including the other risks described in this Filing Statement,
and the Resulting Issuer may encounter unforeseen expenses, difficulties, complications, delays and
other unknown events. Accordingly, the Resulting Issuer may not be able to achieve or maintain
profitability.

Negative Cash Flow for the Foreseeable Future.

Patriot has no history of earnings or cash-flow from operations. The Resulting Issuer does not expect to
generate material revenue or achieve self-sustaining operations for several years, if at all. To the extent
that the Resulting Issuer has negative cash flow in future periods, the Resulting Issuer may need to
allocate a portion of its cash reserves to fund such negative cash flow.

Because many of the Resulting Issuers expenses will be fixed, the Resulting Issuer may not be
able to limit its losses if the Resulting Issuer fails to achieve forecasted revenue.

To commence commercialization of Patriots technology the Resulting Issuer may be required to make
significant investments in operations. If the trials are unsuccessful and the Resulting Issuers business
does not develop as quickly as the Resulting Issuer has anticipated, or if there is a lack of demand for the
Resulting Issuers products, the Resulting Issuer may be unable to offset these costs, and the Resulting
Issuers operating results may be adversely affected as a result of high operating expenses, reduced
margins, underutilization of capacity and asset impairment charges. Moreover, the Resulting Issuer must
rely largely on its own market research to forecast sales as detailed forecasts are not generally obtainable
from other sources at this early stage of the industry.

Concealed weapons detection is a relatively new market, and the rate of adoption and the
Resulting Issuers associated growth in the anticipated markets may not be representative of
rates of adoption or future growth in other markets.

The Resulting Issuer is expected to derive 100% of its revenues in subsequent years from commercial
sale and implementation of its CMR-1 weapons detection technology, a relatively new and rapidly
 52

evolving market. If this market fails to grow or grows more slowly than the Resulting Issuer currently
anticipates, the Resulting Issuers business would be negatively affected. To date, the Resulting Issuer
has targeted markets the Resulting Issuer believes are the most likely to adopt its technology. However,
there is no assurance the Resulting Issuer will be successful in these markets or will be able to expand
beyond these markets.

Reliance on Third Parties (McMaster University, Kyiv Polytechnic Institute (KPI), Macadamian
and SensSoft).

If the third parties which the Resulting Issuer relies on do not properly and successfully carry out their
obligations to the Resulting Issuer, it may not be able to develop, obtain regulatory approval for, or
commercialize its product candidates.

Growth may place significant demands on the Resulting Issuers management and the Resulting
Issuers resources.

The Resulting Issuer expects to experience substantial growth in its business. This growth has placed
and may continue to place significant demands on the Resulting Issuers management and Resulting
Issuers operational and financial resources. Patriot may not be able to provide the scale of operation
necessary to meet the potential growth. As the Resulting Issuer grows, the Resulting Issuer will need to
implement new systems and software to help run the Resulting Issuers operations. As the Resulting
Issuers operations grow in size, scope and complexity, the Resulting Issuer will need to continue to
improve and upgrade the Resulting Issuers systems and infrastructure to offer an increasing number of
customers enhanced service, solutions and features. The Resulting Issuer may choose to commit
significant financial, operational and technical resources in advance of an expected increase in the
volume of business, with no assurance that the volume of business will increase. Continued growth could
also strain the Resulting Issuers ability to maintain reliable service levels for existing and new customers,
which could adversely affect the Resulting Issuers reputation and the Resulting Issuers business. For
example, if the Resulting Issuer experiences demand for the Resulting Issuers products in excess of the
Resulting Issuers estimates, the Resulting Issuers operations staff and inventory may be insufficient to
support the higher demand, which could harm the Resulting Issuers customer experience and overall
reputation.

Future acquisitions could disrupt the Resulting Issuers business and harm the Resulting Issuers
financial condition and operating results.

The Resulting Issuers success will depend, in part, on the Resulting Issuers ability to expand the
Resulting Issuers markets and grow the Resulting Issuers business in response to changing
technologies, customer needs and competitive pressures. The Resulting Issuer may seek to grow the
Resulting Issuers business by acquiring complementary businesses, solutions or technologies. The
identification of suitable acquisition candidates can be difficult, time-consuming and costly, and the
Resulting Issuer may not be able to successfully complete identified acquisitions. In addition, the
Resulting Issuer may not be able to successfully assimilate and integrate the business, technologies,
solutions, personnel or operations of any company the Resulting Issuer acquires. Acquisitions may also
involve the entry into geographic or business markets in which the Resulting Issuer has little or no prior
experience. Moreover, the anticipated benefits of any acquisition, investment or business relationship
may not be realized or the Resulting Issuer may be exposed to unknown liabilities. For one or more of
those transactions, the Resulting Issuer may:

issue additional equity securities that would dilute the holders of Common Shares;

use cash that the Resulting Issuer may need in the future to operate its business;

incur debt on terms unfavorable to the Resulting Issuer or that the Resulting Issuer is unable to
repay;

incur large charges or expenses or assume substantial liabilities;

 53

amortize expenses related to goodwill and other intangible assets;

encounter difficulties retaining key employees of the acquired companies or integrating diverse
software codes or business cultures; and

become subject to adverse tax consequences, substantial depreciation or deferred compensation

charges.

Any of these risks could harm the Resulting Issuers business and operating results.

The impact of worldwide economic conditions, including the resulting effect on target market
spending, may adversely affect the Resulting Issuers business, operating results and financial
condition.

The Resulting Issuers anticipated performance will be subject to worldwide economic conditions, such as
unemployment levels, interest rates or inflation reach levels that influence consumer trends, and in
particular the impact of these conditions on levels of government and private sector security spending.

The Resulting Issuer expects a number of factors may cause the Resulting Issuers operating results to
fluctuate on a quarterly basis, which may make it difficult to predict the Resulting Issuers future
performance.

The Resulting Issuers revenues, if any, and operating results could vary significantly from quarter to
quarter because of a variety of factors, many of which are outside of the Resulting Issuers control. As a
result, comparing the Resulting Issuers operating results on a period-to-period basis may not be
meaningful. In addition to other risk factors discussed in this section, factors that may contribute to the
variability of the Resulting Issuers quarterly results include:

the impact of worldwide economic conditions and their impact on levels of security and defense
spending;

certain fixed costs inherent in the Resulting Issuers business, which limit the Resulting Issuers
ability to adjust for period-to-period changes in demand;

system interruptions that impair access to the Resulting Issuers customers, key vendors or
communication with the Resulting Issuers technology and any related impact on the Resulting
Issuers reputation;

the Resulting Issuers ability to forecast revenues accurately and appropriately plan the Resulting
Issuers expenses; and

the impact of fluctuations in currency exchange rates, to the extent that the Resulting Issuer
sources material or labour from outside of Canada, sells its products outside of Canada, or
operates outside of Canada.

In addition, the Resulting Issuers operating results may not meet the expectations of investors or public
market analysts who follow the Resulting Issuer.

Managing the Resulting Issuers growth will require significant expenditures and allocation of valuable
management resources. If the Resulting Issuer fails to achieve the necessary level of efficiency in the
Resulting Issuers organization as it grows, the Resulting Issuers business, operating results and
financial condition would be harmed.

If the security of customers confidential information stored in the Resulting Issuers systems is
breached or otherwise subjected to unauthorized access, the Resulting Issuers reputation or
 54

brand may be harmed, and the Resulting Issuer may be exposed to liability and a loss of
customers.

It is expected that the Resulting Issuers system will store, process and transmit some confidential
information of its customers. Presently the Reporting Issuer plans to outsource the storing, processing
and transmission of certain information to a third party service provider. It is expected that the Resulting
Issuer will rely on encryption, authentication and other technologies licensed from third parties, as well as
administrative and physical safeguards, to secure such confidential information. Any compromise of the
Resulting Issuers security or the security of the service provider could damage the Resulting Issuers
reputation and brand and expose the Resulting Issuer to a risk of loss, costly litigation and liability that
would substantially harm the Resulting Issuers business and operating results. The Resulting Issuer and
the Resulting Issuers third-party data center facilities may not adequately assess the internal and
external risks posed to the security of the Resulting Issuers systems and information and may not
implement adequate preventative safeguards or take adequate reactionary measures in the event of a
security incident. In addition, many jurisdictions have enacted laws requiring companies to notify
individuals and often state authorities of data security breaches involving their personal data. These
mandatory disclosures regarding a security breach often lead to widespread negative publicity, which
may cause the Resulting Issuers prospective customers to lose confidence in the effectiveness of the
Resulting Issuers data security measures. Any security breach, whether successful or not, would harm
the Resulting Issuers reputation and brand, and it could cause the loss of customers.

Failure to comply with various federal, provincial and municipal laws, including the collection of
sales or related taxes, could harm the Resulting Issuers results of operations.

The Resulting Issuers business will be subject to various local, provincial and federal tax collection
requirements. Amounts that the Resulting Issuer is expected to be required to collect change as the
Resulting Issuers business develops and expands. As a result, the Resulting Issuer will need to
continually ensure proper taxes are collected and remitted to the appropriate tax agencies. If the
Resulting Issuer does not collect the appropriate taxes from its customers, the Resulting Issuer may need
to pay more than what it has collected. In addition the Resulting Issuer may be audited by various
agencies to ensure compliance with tax collection requirements. Such audits could result in additional
sales or other tax collection obligations on the Resulting Issuer which the Resulting Issuer may not be
able to recover from its customers. Such obligations could have a material adverse impact on the
Resulting Issuers future operating results.

Failure to adequately protect the Resulting Issuers intellectual property could substantially harm
the Resulting Issuers business and operating results.

Because the Resulting Issuers business depends substantially on the Resulting Issuers intellectual
property, the protection of the Resulting Issuers intellectual property rights is expected to be crucial to the
success of the Resulting Issuers business. The Resulting Issuer may rely on a combination of patent,
trademark, trade secret and copyright law and contractual restrictions to protect the Resulting Issuers
intellectual property. These afford only limited protection. Despite the Resulting Issuers expected efforts
to protect its proprietary rights, unauthorized parties may attempt to copy aspects of the Resulting
Issuers technologys features, software and functionality or obtain and use information that the Resulting
Issuer considers proprietary. There can be no assurance that the steps taken by the Reporting Issuer to
protect proprietary rights will be adequate or that third parties will not infringe or misappropriate the
Resulting Issuers copyrights, trademarks and similar proprietary rights, or that the Resulting Issuer will be
able to detect unauthorized use and take appropriate steps to enforce rights. Moreover, policing the
Resulting Issuers proprietary rights is difficult and may not always be effective. In particular, the Resulting
Issuer may need to enforce the Resulting Issuers rights under the laws of countries that do not protect
proprietary rights to as great an extent as do the laws of the Canada.

Litigation or proceedings before governmental authorities and administrative bodies in the United States,
Canada and abroad may be necessary in the future to enforce the Resulting Issuers intellectual property
rights, to protect the Resulting Issuers patent rights, trade secrets, trademarks and domain names and to
determine the validity and scope of the proprietary rights of others. The Resulting Issuers efforts to
 55

enforce or protect the Resulting Issuers proprietary rights may be ineffective and could result in
substantial costs and diversion of resources and could substantially harm the Resulting Issuers operating
results.

The Resulting Issuer will rely on trade secrets to protect technology where it does not believe patent
protection is appropriate or obtainable. Trade secrets are difficult to protect. While commercially
reasonable efforts to protect trade secrets will be used, strategic partners, employees, consultants,
contractors or scientific and other advisors may unintentionally or willfully disclose information to
competitors. If the Resulting Issuer is not able to defend patents or trade secrets, then it will not be able to
exclude competitors from developing or marketing competing products, and the Resulting Issuer may not
generate enough revenue from product sales to justify the cost of development of products and to
achieve or maintain profitability.

The Resulting Issuers exposure to risks associated with the use of intellectual property may increase as
a result of acquisitions, as the Resulting Issuer has a lower level of visibility into the development process
with respect to acquired technology or the care taken to safeguard against infringement risks. Third
parties may make infringement and similar or related claims after the Resulting Issuer has acquired
technology that had not been asserted prior to the Resulting Issuers acquisition. Patriot is not currently
aware of any litigation or other proceedings or claims by third parties that its technologies or methods
infringe on their intellectual property. While it is the practice of Patriot to undertake pre-filing searches and
analyses of developing technologies, the Resulting Issuer cannot guarantee that Patriot has identified
every patent or patent application that may be relevant to the research, development, or
commercialization of its products. Moreover, the Resulting Issuer cannot assure that third parties will not
assert valid, erroneous or frivolous patent infringement claims.

Confidentiality agreements with employees and others may not adequately prevent disclosure of
trade secrets and other proprietary information.

The Resulting Issuer expects to principally rely on patent protection to protect the Resulting Issuers
proprietary technologies, however the Resulting Issuers competitive advantage will rely to a certain
extent on owned and developed trade secrets. Patriot has devoted substantial resources to the
development of its proprietary technology and related processes. In order to protect the Resulting Issuers
proprietary technology and processes, the Resulting Issuer intends to rely in significant part on
confidentiality and invention assignment agreements with the Resulting Issuers employees, licensees,
independent contractors and other advisors. These agreements may not effectively prevent disclosure of
confidential information, may not deter independent third-party development of similar technologies and
may not provide an adequate remedy in the event of unauthorized disclosure of confidential information
or misappropriation of the Resulting Issuers technology. In addition, others may independently discover
trade secrets and proprietary information, and in such cases the Resulting Issuer would not be able to
assert any trade secret rights against such parties. Costly and time-consuming litigation could be
necessary to enforce and determine the scope of the Resulting Issuers proprietary rights, and failure to
obtain or maintain trade secret protection could adversely affect the Resulting Issuers competitive
business position.

The Resulting Issuers failure to raise additional capital necessary to expand the Resulting
Issuers operations and invest in the Resulting Issuers business could reduce the Resulting
Issuers ability to compete successfully.

The Resulting Issuer may require additional capital in the future to support on-going operations, to
undertake capital expenditures or to undertake acquisitions or other business combination transactions.
Due to the early stage of the industry in which the Resulting Issuer will operate, the Resulting Issuer
expects to face additional competition from new entrants. To become and remain competitive, the
Resulting Issuer will require research and development, marketing, sales and client support. The
Resulting Issuer may not have sufficient resources to maintain research and development, marketing,
sales and client support efforts on a competitive basis which could materially and adversely affect the
business, financial condition and results of operations of the Resulting Issuer. The Resulting Issuer may
not be able to obtain additional debt or equity financing on favorable terms, if at all. If the Resulting Issuer
 56

raises additional equity financing, the shareholders of the Resulting Issuer may experience significant
dilution of their ownership interests, and the per-share value of the Common Shares could decline.
Moreover, any new equity securities the Resulting Issuer issues could have rights, preferences and
privileges senior to those of holders of the Resulting Issuers Common Shares. If the Resulting Issuer
engages in debt financing, the Resulting Issuer may be required to accept terms that restrict its ability to
incur additional indebtedness and force it to maintain specified liquidity or other ratios. If the Resulting
Issuer needs additional capital and cannot raise or otherwise obtain it on acceptable terms, it may not be
able to, among other things:

develop or introduce service enhancements to the anticipated customers;

continue to expand the Resulting Issuers development, sales and marketing and general and
administrative organizations;

acquire complementary technologies or businesses;

expand the Resulting Issuers operations;

hire, train and retain employees; or

respond to competitive pressures or unanticipated working capital requirements.

The Resulting Issuer will depend on key and highly skilled personnel to operate its business, and
if the Resulting Issuer is unable to retain Patriots current personnel or hire additional personnel,
the Resulting Issuers ability to develop and successfully market its business could be harmed.

The Resulting Issuer believes its future success will depend in large part upon the Resulting Issuers
ability to attract and retain highly skilled managerial, technical, finance and sales and marketing
personnel. The Resulting Issuer plans to expand its work force domestically and if/as the Resulting Issuer
grows its business internationally it plans to expand its work force both domestically and internationally.
The Resulting Issuer expects to compete in the market for personnel against numerous companies,
including larger, more established competitors which have significantly greater financial resources than
the Resulting Issuer and which may be in a better financial position to offer higher compensation
packages to attract and retain human capital. The Resulting Issuer cannot be certain that it will be
successful in attracting and retaining the skilled personnel necessary to operate its business effectively in
the future.

Moreover, the Resulting Issuer believes that its future success is highly dependent on the contributions of
Patriots executive team. All of Patriots employees are at-will employees, which means they may
terminate their employment relationship with Patriot at any time. It is expected that the Resulting Issuers
employees will also be at-will employees. Patriots key employees possess a specialized knowledge of
the Resulting Issuers business and industry and would be extremely difficult to replace. In addition, the
loss of any key employee or the inability to attract or retain qualified personnel could harm the markets
perception of the Resulting Issuer and the Resulting Issuers brand. Qualified individuals are in high
demand, and the Resulting Issuer may incur significant costs to attract them. The Resulting Issuer may
be unable to attract and retain suitably qualified individuals who are capable of meeting its growing
operational and managerial requirements, or may be required to pay increased compensation in order to
do so. While employment agreements will be used as a primary method of retaining the services of key
employees, these agreements cannot assure the continued services of such employees. If the Resulting
Issuer is unable to attract and retain the qualified personnel it will need to succeed, its business will
suffer. Moreover, the success of the Resulting Issuer is dependent on their ability to develop and maintain
important relationships with leading academic institutions, companies, and thought leaders. Any loss of
the services of such individuals or relationships could have a material adverse effect on the Resulting
Issuers business, operating results or financial condition.
 57

The Resulting Issuers business may require permits and licenses.

The operations of the Resulting Issuer may require licenses and permits from various governmental
authorities. There can be no assurance that such licenses and permits will be granted.

The Resulting Issuers business is subject to regulatory changes.

The business of the Resulting Issuer is subject to rapid regulatory changes. Failure to keep up with such
changes may adversely affect the business of the Resulting Issuer. The Resulting Issuers prospects
must be considered in light of the risks, expenses, shifts, changes and difficulties frequently encountered
with companies whose businesses are regulated by various federal, state and local governments. Active
threat detection technology and similar companies are subject to a variety of regulatory requirements and
the regulatory environment is ever changing particularly with recent legislation, the full impact of which is
not yet understood as regulations have not been issued. Failure to follow regulatory requirements will
have a detrimental impact on the business. Changes in legislation cannot be predicted and could
irreparably harm the business.

Low barriers to entry and high competition in the industry.

There is high potential that the Resulting Issuer will face intense competition from other companies, some
of which can be expected to have longer operating histories and more financial resources and
manufacturing and marketing experience than the Resulting Issuer. Increased competition by larger and
better financed competitors could materially and adversely affect the business, financial condition and
results of operations of the Resulting Issuer. Competitive pressures created by any one of the Resulting
Issuers competitors could have a material adverse effect on the Resulting Issuers business, results of
operations and financial condition. New technologies and the expansion of existing technologies may
increase the competitive pressures on the Resulting Issuer by enabling the Resulting Issuers competitors
to offer a lower-cost product.

Risks associated with brand development of the Resulting Issuer.

The Resulting Issuer believes that continuing to strengthen its brand is critical to achieving widespread
acceptance of the Resulting Issuer, particularly in light of the competitive nature of the Resulting Issuers
market. Promoting and positioning its brand will depend largely on the success of the Resulting Issuers
marketing efforts and the ability of the Resulting Issuer to provide high quality services. In order to
promote its brand, the Resulting Issuer will need to increase its marketing budget and otherwise increase
its financial commitment to creating and maintaining brand loyalty among users. There can be no
assurance that brand promotion activities will yield increased revenues or that any such revenues would
offset the expenses incurred by the Resulting Issuer in building its brand. If the Resulting Issuer fails to
promote and maintain its brand or incurs substantial expenses in an attempt to promote and maintain its
brand or if the Resulting Issuers existing or future strategic relationships fail to promote the Resulting
Issuers brand or increase brand awareness, the Resulting Issuers business, results of operations and
financial condition would be materially adversely affected.

The Resulting Issuers business is subject to rapid technological change.

The business of the Resulting Issuer is subject to rapid technological changes. Failure to keep up with
such changes may adversely affect the business of the Resulting Issuer. The Resulting Issuer is subject
to the risks of companies operating in the active threat detection business. The market in which the
Resulting Issuer competes is characterized by rapidly changing technology, evolving industry standards,
frequent new service and product announcements, introductions and enhancements and changing
customer demands. As a result, an investment in the stocks of the Resulting Issuer is highly speculative
and is only suitable for investors who recognize the high risks involved and can afford a total loss of
investment.
 58

The Resulting Issuer may become engaged in legal proceedings that could cause it to incur
unforeseen expenses and could occupy a significant amount of the Resulting Issuers
managements time and attention.

The Resulting Issuer may be subject to litigation or claims that could negatively affect the Resulting
Issuers business operations and financial position. The Resulting Issuer may be subject to consumer
class action lawsuits. Litigation disputes could cause the Resulting Issuer to incur unforeseen expenses,
could occupy a significant amount of managements time and attention and could negatively affect the
Resulting Issuers business operations and financial position.

The Resulting Issuers business is subject to the risks of earthquakes, fires, floods and other
natural catastrophic events and to interruption by manmade problems such as computer viruses
and terrorism.

The Resulting Issuers systems and operations are vulnerable to damage or interruption from
earthquakes, volcanoes, fires, floods, power losses, telecommunications failures, terrorist attacks, acts of
war, human errors, break-ins and similar events. For example, a significant natural disaster, such as an
earthquake, fire or flood, could have a material adverse impact on the Resulting Issuers business,
operating results and financial condition, and the Resulting Issuers insurance coverage may be
insufficient to compensate the Resulting Issuer for losses that may occur. The Resulting Issuers servers
may also be vulnerable to computer viruses, break-ins and similar disruptions from unauthorized
tampering with the Resulting Issuers computer systems, which could lead to interruptions, delays, loss of
critical data or the unauthorized disclosure of confidential data. The Resulting Issuer may not have
sufficient protection or recovery plans in certain circumstances and the Resulting Issuers business
interruption insurance (as and if carried by the Resulting Issuer) may be insufficient to compensate the
Resulting Issuer for losses that may occur. As the Resulting Issuer expects to rely heavily on its servers,
computer and communications systems and the Internet to conduct the Resulting Issuers business and
provide a high quality customer experience, such disruptions could negatively impact the Resulting
Issuers ability to run the Resulting Issuers business, which could have an adverse effect on the
Resulting Issuers operating results.

Further, the business of the Resulting Issuer may not be insurable or the insurance may not be
purchased due to high cost. Should such liabilities arise, they could reduce or eliminate any future
profitability and result in increasing costs and a decline in the value of the Resulting Issuer.

The Resulting Issuer will incur significant increased costs as a result of operating as a public
company, and the Resulting Issuers management will be required to devote substantial time to
public company compliance requirements.

As a public company, the Resulting Issuer will incur significant legal, accounting and other expenses that
Patriot did not incur as a private company. Applicable securities laws require public companies to meet
certain corporate governance standards and fulfill continuous reporting requirements. The Resulting
Issuers management and other personnel will need to devote a substantial amount of time to these
requirements.

Moreover, these rules and regulations will increase the Resulting Issuers legal and financial compliance
costs and will make some activities more time-consuming and costly. The Resulting Issuer is currently
unable to estimate these costs with any degree of certainty.

In addition, applicable securities laws require that the Resulting Issuer maintain effective internal control
over financial reporting and disclosure controls and procedures. The Resulting Issuers testing, or the
subsequent testing by the Resulting Issuers accounting firm, may reveal deficiencies in the Resulting
Issuers internal control over financial reporting that are deemed to be material weaknesses. As such, the
Resulting Issuer may incur substantial accounting expense, expend significant management time on
compliance related issues, and hire additional finance and accounting staff with appropriate public
company experience and technical accounting knowledge. Moreover, if the Resulting Issuer is not able to
comply with the requirements of applicable securities laws in a timely manner, the market price of the
 59

Common Shares would likely decline and the Resulting Issuer could be subject to lawsuits, sanctions or
investigations by regulatory authorities, which would require additional financial and management
resources.

Risks Associated with International Operations of the Resulting Issuer

A component of the Resulting Issuers strategy is to expand internationally. Expansion into the
international markets will require management attention and resources. The Resulting Issuer has limited
experience in localizing its service, and the Resulting Issuer believes that many of its competitors are also
undertaking expansion into foreign markets. There can be no assurance that the Resulting Issuer will be
successful in expanding into international markets. In addition to the uncertainty regarding the Resulting
Issuers ability to generate revenues from foreign operations and expand its international presence, there
are certain risks inherent in doing business on an international basis, including, among others, regulatory
requirements, legal uncertainty regarding liability, tariffs, and other trade barriers, difficulties in staffing
and managing foreign operations, longer payment cycles, different accounting practices, problems in
collecting accounts receivable, political instability, seasonal reductions in business activity and potentially
adverse tax consequences, any of which could adversely affect the success of the Resulting Issuers
international operations. To the extent the Resulting Issuer expands its international operations and has
additional portions of its international revenues denominated in foreign currencies, the Resulting Issuer
could become subject to increased risks relating to foreign currency exchange rate fluctuations. There
can be no assurance that one or more of the factors discussed above will not have a material adverse
effect on the Resulting Issuers future international operations and, consequently, on the Resulting
Issuers business, results of operations and financial condition.

Going-Concern Risk

The financial statements have been prepared on a going concern basis under which an entity is
considered to be able to realize its assets and satisfy its liabilities in the ordinary course of business. The
Resulting Issuers future operations are dependent upon the identification and successful completion of
equity or debt financing and the achievement of profitable operations at an indeterminate time in the
future. There can be no assurances that the Resulting Issuer will be successful in completing an equity or
debt financing or in achieving profitability. The financial statements do not give effect to any adjustments
relating to the carrying values and classification of assets and liabilities that would be necessary should
the Resulting Issuer be unable to continue as a going concern.

Conflicts of interest of directors and officers of the Resulting Issuer.

Certain of the directors and officers of the Resulting Issuer are, or may become directors and officers of
other companies, and conflicts of interest may arise between their duties as officers and directors of the
Resulting Issuer and as officers and directors of such other companies.

RISKS RELATED TO OWNERSHIP OF THE COMMON SHARES

An active trading market for the Common Shares may not develop.

Although the Common Shares will be listed on the Exchange, an active trading market for the Common
Shares may never develop or be sustained. In the absence of an active trading market for the Common
Shares, holders may not be able to sell their Common Shares at or above a desired price or at the time
that they would like to sell.

The Common Share price may be volatile, and the market price of the Common Shares may drop.

The market price of the Common Shares could be subject to significant fluctuations, and it may decline.
Market prices for securities of early stage companies have historically been particularly volatile. As a
result of this volatility, holders may not be able to sell Common Shares at or above a desired price, or at
 60

the time they would like to sell. Some of the factors that may cause the market price of the Common
Shares to fluctuate include:

fluctuations in the Resulting Issuers quarterly financial results or the quarterly financial results of
companies perceived to be similar to the Resulting Issuer;

fluctuations in the Resulting Issuers revenue;

changes in estimates of the Resulting Issuers financial results or recommendations by securities

analysts;

failure of the Resulting Issuers technology to achieve or maintain market acceptance;

changes in market valuations of similar companies;

success of competitive service offerings or technologies;

changes in the Resulting Issuers capital structure, such as future issuances of securities or the
incurrence of debt;

announcements by the Resulting Issuer or the Resulting Issuers competitors of significant

services, contracts, acquisitions or strategic alliances;

regulatory developments in applicable jurisdictions;

litigation involving the Resulting Issuer;

additions or departures of key personnel;

investors general perception of the Resulting Issuer; and

changes in general economic, industry and market conditions.

In addition, if the market for technology sector equities or the stock market in general experiences a loss
of investor confidence, the trading price of the Common Shares could decline for reasons unrelated to the
Resulting Issuers business, financial condition or results of operations. If any of the foregoing occurs, it
could cause the Common Share price to fall.

Volatility of the Market Price of the Common Shares and the limited market for Securities.

The Common Shares will, following Closing, be listed on the Exchange. The Exchange is a significantly
more limited market than the New York Stock Exchange or the NASDAQ Stock Market; however, there
can be no assurance that such listing will be obtained and even if obtained, that an active and liquid
market for the Common Shares will develop or be maintained and an investor may find it difficult to resell
any securities of the Resulting Issuer.

Securities of junior companies have experienced substantial volatility in the past, often based on factors
unrelated to the financial performance or prospects of the companies involved. These factors include
macroeconomic developments in North America and globally, and market perceptions of the
attractiveness of particular industries. The Common Share trading price also is likely to be significantly
affected by delays experienced in the Resulting Issuers development plans, a decrease in the investor
appetite for junior stocks, or by adverse changes in Resulting Issuers financial condition or results of
operations as reflected in Resulting Issuers financial statements. Other factors unrelated to our
performance that could have an effect on the price of Common Shares include the following:
 61

The trading volume and general market interest in Common Shares could affect a shareholders
ability to trade significant numbers of Common Shares; and

The size of the public float in Common Shares may limit the ability of some institutions to invest in
the Resulting Issuers securities.

As a result of any of these factors, the market price of the Common Shares at any given point in time
might not accurately reflect the Resulting Issuers long-term value. Securities class action litigation often
has been brought against companies following periods of volatility in the market price of their securities.
The Resulting Issuer could, in the future, be the target of similar litigation. Securities litigation could result
in substantial costs and damages and divert managements attention and resources.

If securities or industry analysts do not publish or cease publishing research or reports about the
Resulting Issuer, its business or its market, or if they adversely change their recommendations
regarding the Common Shares, the Common Share price and trading volume could decline.

The trading market for the Common Shares will be influenced by research and reports that industry or
securities analysts may publish about the Resulting Issuer, its business, its market or the its competitors.
If any of the analysts who may cover the Resulting Issuer adversely change their recommendation
regarding the Common Shares, or provide more favorable relative recommendations about the Resulting
Issuers competitors, the Common Share price would likely decline. If any analyst who may cover the
Resulting Issuer were to cease coverage or fail to regularly publish reports on the Resulting Issuer, the
Resulting Issuer could lose visibility in the financial markets, which in turn could cause the Common
Shares price or trading volume to decline.

The Resulting Issuers management will have discretion over the use of the proceeds upon
completion of the Acquisition and the Private Placement and might not apply the proceeds in
ways that increase the value of your investment.

The Resulting Issuers management will have broad discretion to use available funds upon completion of
the Acquisition and the Private Placement, and will use its judgment regarding the application of these
funds. The Resulting Issuers management might not apply the available funds in ways that increase the
value of the Common Shares. The Resulting Issuer expects to use the available funds for the uses
described in this Filing Statement. The Resulting Issuers management might not be able to yield a
significant return, if any, on any investment of these funds. Holders of Common Shares will not have the
opportunity to influence the Resulting Issuers decisions on how to use the available funds.

The Resulting Issuer does not expect to declare any dividends in the foreseeable future.

The Resulting Issuer do not anticipate declaring any cash dividends to holders of the Common Shares in
the foreseeable future. Consequently, investors may need to rely on sales of their Common Shares after
price appreciation, which may never occur, as the only way to realize any future gains on their
investment.

The Resulting Issuer expects to record expenses related to the Resulting Issuers issuance of
Common Shares as compensation and stock options under the Resulting Issuer Stock Option
Plan, which may have a material adverse impact on the Resulting Issuers operating results.

Patriots share-based compensation expenses total Nil to date. The Resulting Issuer expect such share -
and option-based compensation expenses will increase in future periods, which will have an adverse
impact on the Resulting Issuers operating results. The model expected to be used by the Resulting
Issuer will require the input of highly subjective assumptions, including the price volatility of Common
Shares. If facts and circumstances change and the Resulting Issuer employs different assumptions for
estimating share - and option - based compensation expense in future periods, or if the Resulting Issuer
decides to use a different valuation model, the future period expenses may differ significantly from what
Patriot has recorded in the past periods and the current period and could materially affect the fair value
 62

estimate of such payments, the Resulting Issuers operating income, net income and net income per
share.

The Resulting Issuers directors, executive officers and principal shareholders could have
substantial control over the Resulting Issuer and could delay or prevent a change in corporate
control.

Immediately after Closing, the Resulting Issuers directors and executive officers will beneficially own, in
the aggregate, approximately 7.08% of the Common Shares, assuming the maximum Private Placement
is completed. As a result, these persons, if they were to act together, could have significant influence over
the outcome of matters submitted to the shareholders for approval, including the election of directors and
any merger, consolidation or sale of all or substantially all of the Resulting Issuers assets. In addition,
these shareholders, if they were to act together, could have significant influence over the management
and affairs of the Resulting Issuer. Accordingly, this concentration of ownership might harm the market
price of the Common Shares by:

delaying, deferring or preventing a change in corporate control;

impeding a merger, consolidation, takeover or other business combination involving the Resulting
Issuer; or

discouraging a potential acquiror from making a tender offer or otherwise attempting to obtain
control of the Resulting Issuer.
 63

PART V CERTIFICATES

CERTIFICATE OF PATRIOT ONE TECHNOLOGIES INC.

The foregoing document constitutes full, true and plain disclosure of all material facts relating to the
securities of Patriot One Technologies Inc., assuming completion of the Acquisition, as of October 27,
2016.

Geoff Balderson Carrie Cesarone

Geoff Balderson Carrie Cesarone

Chief Executive Officer Chief Financial Officer

ON BEHALF OF THE BOARD OF DIRECTORS:

Leighton Bocking Jeffery Tindale

Leighton Bocking Jeffery Tindale

Director Director
 64

CERTIFICATE OF PATRIOT ONE DETECTION LTD.

The foregoing document, as it relates to Patriot One Detection Ltd. constitutes full, true and plain
disclosure of all material facts relating to the securities of Patriot One Detection Ltd. as of October 27,
2016.

Martin Cronin Michael Malana

Martin Cronin Michael Malana

Chief Executive Officer Chief Financial Officer

ON BEHALF OF THE BOARD OF DIRECTORS:

Dinesh Kandanchatha Scott Shepherd

Dinesh Kandanchatha Scott Shepherd

Director Director
 SCHEDULE A

ISSUER FINANCIAL STATEMENTS

 PATRIOT ONE TECHNOLOGIES INC.
(formerly Clear Mountain Resources Corp.)

Consolidated Financial Statements

For the Years Ended May 31, 2016 and 2015

(Expressed in Canadian Dollars)

 INDEPENDENT AUDITORS' REPORT

To the Shareholders of
Patriot One Technologies Inc. (formerly Clear Mountain Resources Corp.)

We have audited the accompanying consolidated financial statements of Patriot One Technologies Inc. (formerly Clear
Mountain Resources Corp.), which comprise the consolidated statements of financial position as at May 31, 2016 and 2015
and the consolidated statements of comprehensive loss, cash flows, and changes in shareholders deficiency for the years then
ended, and a summary of significant accounting policies and other explanatory information.

Managements Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance
with International Financial Reporting Standards, and for such internal control as management determines is necessary to
enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or
error.

Auditors Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our
audits in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with
ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial
statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated
financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of
material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entitys preparation and fair presentation of the consolidated
financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the entitys internal control. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as
evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our audit
opinion.

Opinion

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of Patriot
One Technologies Inc. (formerly Clear Mountain Resources Corp.) as at May 31, 2016 and 2015 and its financial performance
and its cash flows for the years then ended in accordance with International Financial Reporting Standards.

i
Emphasis of Matter

Without qualifying our opinion, we draw attention to Note 1 in the consolidated financial statements which describes
conditions and matters that indicate the existence of a material uncertainty that may cast significant doubt about Patriot One
Technologies Inc. (formerly Clear Mountain Resources Corp.)s ability to continue as a going concern.

DAVIDSON & COMPANY LLP

Vancouver, Canada Chartered Professional Accountants

August 29, 2016

ii
 PATRIOT ONE TECHNOLOGIES INC.
(formerly Clear Mountain Resources Corp.)
Consolidated Financial Statements
For the Years Ended May 31, 2016 and 2015
(Expressed in Canadian Dollars)

Page

Independent Auditors Report i

Contents iii

Consolidated Statements of Financial Position 1

Consolidated Statements of Comprehensive Loss 2

Consolidated Statements of Cash Flows 3

Consolidated Statements of Changes in Shareholders Deficiency 4

Notes to Consolidated Financial Statements 5

iii
PATRIOT ONE TECHNOLOGIES INC.
(formerly Clear Mountain Resources Corp.)
Consolidated Statements of Financial Position
(Expressed in Canadian Dollars)

May 31, 2016 May 31, 2015

$ $
Assets

Current
Cash 1,718 101,874
Receivables 1,624 2,874
Prepaid expenses 5,283 8,918
8,625 113,666

Equipment (Note 3) 885 1,106

9,510 114,772

Liabilities

Current
Trade payables and accrued liabilities (Note 5) 540,766 525,843
Due to related parties (Note 6) - 93,190
540,766 619,033

Shareholders' deficit
Share capital (Note 7) 2,518,153 2,479,103
Subscription received (Note 6) 10,000 -
Reserves (Note 7) 193,377 217,965
Deficit (3,252,786) (3,201,329)
(531,256) (504,261)

9,510 114,772

Nature and Continuance of Operations (Note 1)

Subsequent Event (Note 12)

These consolidated financial statements are authorized for issuance by the Board of Directors on August 26,
2016.

On Behalf of the Board of Directors:

Jeffery Tindale Geoff Balderson

Jeffery Tindale, Director Geoff Balderson, Director

The accompanying notes are an integral part of these consolidated financial statements.

1
PATRIOT ONE TECHNOLOGIES INC.
(formerly Clear Mountain Resources Corp.)
Consolidated Statements of Comprehensive Loss
(Expressed in Canadian Dollars)

For the years ended May 31,

2016 2015
$ $

EXPENSES
Consulting fees (Note 6) 14,320 5,000
Depreciation (Note 3) 221 276
Foreign exchange loss 34,804 49,604
Insurance 7,113 9,236
Investor relations 1,959 621
Management fees (Note 6) - 140,236
Office and miscellaneous 892 889
Professional fees (Note 6) 16,805 31,757
Property investigation costs - 39,582
Transfer agent and filing fees 23,330 18,678
Travel and related 185 7,383
(99,629) (303,262)

Gain on forgiveness of debt (Note 6) 22,034 -

Recovery (write-off) of exploration and evaluation assets (Note 4) 1,550 (1)
23,584 (1)

Loss and comprehensive loss for the year (76,045) (303,263)

Basic and diluted loss per share (0.07) (0.30)

Weighted average number of common shares outstanding 1,129,974 1,023,416

The accompanying notes are an integral part of these consolidated financial statements.

2
PATRIOT ONE TECHNOLOGIES INC.
(formerly Clear Mountain Resources Corp.)
Consolidated Statements of Cash Flows
(Expressed in Canadian Dollars)

For the years ended May 31,

2016 2015
$ $
Cash flows used in operating activities
Loss for the year (76,045) (303,263)
Items not affecting cash
Depreciation 221 276
Gain on forgiveness of debt (22,034) -
(Recovery) write-off of exploration and evaluation asset (1,550) 1
(99,408) (302,986)
Changes in non-cash working capital items
Decrease in receivables 1,250 9,055
Decrease (increase) in prepaid expenses 3,635 (2,694)
Increase in trade payables and accrued liabilities 14,923 108,630
Increase (decrease) in due to related parties (71,156) 24,940
(150,756) (163,055)

Cash flows used in investing activity

Exploration and evaluation assets expenditures recovery 1,550 -
1,550 -

Cash flows from financing activities

Subscription received 10,000 -
Proceeds from share issuance 40,000 -
Share issuance costs (950) -
49,050 -

Net change in cash (100,156) (163,055)

Cash, beginning of year 101,874 264,929

Cash, end of year 1,718 101,874

Non-cash transactions

Transfer from reserves to deficit on forfeiture of stock options 24,588 -

Expiration of agents warrants - 8,479

The accompanying notes are an integral part of these consolidated financial statements.

3
PATRIOT ONE TECHNOLOGIES INC.
(formerly Clear Mountain Resources Corp.)
Consolidated Statements of Changes in Shareholders Deficiency
(Expressed in Canadian Dollars)

Number of Total
Shares Share Subscription Warrant Option Total Shareholders'
Issued Capital Received Reserves Reserves Reserves Deficit Deficiency
$ $ $ $ $ $ $
Balance at May 31, 2014 1,023,416 2,470,624 8,479 217,965 226,444 (2,898,066) (200,998)

Expiration of agents warrants - 8,479 - (8,479) - (8,479) - -

Net loss for the year - - - - - - (303,263) (303,263)
Balance at May 31, 2015 1,023,416 2,479,103 - - 217,965 217,965 (3,201,329) (504,261)

Shares issued for cash 200,000 40,000 - - - - - 40,000

Share issuance costs - (950) - - - - (950)
Forfeiture of stock options - - - - (24,588) (24,588) 24,588 -
Subscription received - - 10,000 - - - - 10,000
Net loss for the year - - - - - - (76,045) (76,045)
Balance at May 31, 2016 1,223,416 2,518,153 10,000 - 193,377 193,377 (3,252,786) (531,256)

The accompanying notes are an integral part of these consolidated financial statements.

4
PATRIOT ONE TECHNOLOGIES INC.
(formerly Clear Mountain Resources Corp.)
Notes to Consolidated Financial Statements
For the Years Ended May 31, 2016 and 2015
(Expressed in Canadian Dollars)

1. Nature and Continuance of Operations

Clear Mountain Resources Corp. (the Company) was incorporated under the Business Corporations Act of
British Columbia, Canada on May 11, 2010 and completed its initial public offering (the IPO) and received
the final exchange bulletin for the Transaction from the TSX Venture Exchange ("Exchange") on May 10, 2012.
As a result, the Companys shares were listed for trading on the Exchange on May 15, 2012 under the trading
symbol CY. Effect August 24, 2016 the Company changed its name to Patriot One Technologies Inc. and
commenced trading on the Exchange under the trading symbol PAT (See Note 12).

The Companys head office and principal address is Suite 1000 409 Granville Street, Vancouver BC V6C
1T2. The principal business of the Company is the identification, evaluation and acquisition of mineral
properties and the subsequent exploration and operation thereof.

These consolidated financial statements have been prepared on a going concern basis with the assumption that
the Company will be able to realize its assets and discharge its liabilities in the normal course of business rather
than through a process of forced liquidation. These consolidated financial statements do not include any
adjustments to the amounts and classification of assets and liabilities that might be necessary should the
Company be unable to continue in business.

The operations and exploration and acquisition activities of the Company were primarily funded by the issue of
share capital. At May 31, 2016, the Company has incurred losses since its inception and has an accumulated
deficit of $3,252,786 (2015 - $3,201,329). The Company's ability to continue its operations and to realize assets
at their carrying values is dependent on its ability to develop a sufficient financing plan, receive continued
financial support from related parties, complete sufficient equity financing, and generate profitable operations in
the future. The Company has been successful in the past in raising funds for operations by issuing shares but
there is no assurance that it will be able to continue to do so in the future. These material uncertainties may cast
significant doubt about the Companys ability to continue as a going concern.

2. Significant Accounting Policies and Basis of Presentation

The following is a summary of significant accounting policies used in the preparation of these consolidated
financial statements.

Statement of compliance

These consolidated financial statements, including comparatives, have been prepared in accordance with
International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards
Board (IASB).

Basis of presentation

These consolidated financial statements of the Company have been prepared on an accrual basis and are based
on historical costs, modified where applicable. The consolidated financial statements are presented in Canadian
dollars unless otherwise noted.

Basis of consolidation

These consolidated financial statements include the accounts of the Company and its wholly-owned
subsidiaries, Clear Mountain Production LLC, Clear Mountain Assets LLC, and Clear Mountain Midstream
LLC. All significant intercompany accounts and transactions between the Company and its subsidiaries have
been eliminated upon consolidation.

5
PATRIOT ONE TECHNOLOGIES INC.
(formerly Clear Mountain Resources Corp.)
Notes to Consolidated Financial Statements
For the Years Ended May 31, 2016 and 2015
(Expressed in Canadian Dollars)

2. Significant Accounting Policies and Basis of Presentation (continued)

Foreign currency translation

The functional currency of an entity is the currency of the primary economic environment in which the entity
operates. The functional currency of the Company and each of its wholly-owned subsidiaries is the Canadian
dollar. The functional currency determinations were conducted through an analysis of the consideration factors
identified in IAS 21, The Effects of Changes in Foreign Exchange Rates.

Transactions in currencies other than Canadian dollars are recorded at exchange rates prevailing on the dates of
the transactions. At the end of each reporting period, monetary assets and liabilities denominated in foreign
currencies are translated at the period end exchange rate while non-monetary assets and liabilities are translated
at historical rates. Revenues and expenses are translated at the exchange rates approximating those in effect on
the date of the transactions. Exchange gains and losses arising on translation are included in profit and loss.

Use of estimates

The preparation of financial statements in conformity with IFRS requires management to make certain
estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported revenues and expenses during the period.

Although management uses historical experience and its best knowledge of the amount, events or actions to
form the basis for judgments and estimates, actual results may differ from these estimates.

The most significant accounts that require estimates as the basis for determining the stated amounts include the
valuation of share-based compensation and recognition of deferred tax amounts.

Critical judgments exercised in applying accounting policies that have the most significant effect on the
amounts recognized in the consolidated financial statements are as follows:

Determination of functional currency

The Company determines the functional currency through an analysis of several indicators such as expenses and
cash flow, financing activities, retention of operating cash flows, and frequency of transactions with the
reporting entity.

Information about assumptions and estimation uncertainties that have a significant risk of resulting in material
adjustments are as follows:

Income taxes

In assessing the probability of realizing income tax assets, management makes estimates related to expectation
of future taxable income, applicable tax opportunities, expected timing of reversals of existing temporary
differences and the likelihood that tax positions taken will be sustained upon examination by applicable tax
authorities. In making its assessments, management gives additional weight to positive and negative evidence
that can be objectively verified.

6
PATRIOT ONE TECHNOLOGIES INC.
(formerly Clear Mountain Resources Corp.)
Notes to Consolidated Financial Statements
For the Years Ended May 31, 2016 and 2015
(Expressed in Canadian Dollars)

2. Significant Accounting Policies and Basis of Presentation (continued)

Equipment

Equipment is stated at historical cost less accumulated depreciation and accumulated impairment losses.

Subsequent costs are included in the assets carrying amount or recognized as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the Company and
the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All
other repairs and maintenance are charged to the statement of comprehensive loss during the fiscal period in
which they are incurred.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are
recognized in profit or loss.

As at May 31, 2016 and 2015, the Company had furniture and fixtures listed as equipment. Depreciation of
equipment is calculated over their estimated useful lives on a diminishing balance basis at 20% per annum.

Exploration and evaluation assets

Pre-exploration costs are expensed as incurred.

Costs directly related to the acquisition and exploration of exploration and evaluation assets are capitalized once
the legal rights to explore the exploration and evaluation assets are acquired or obtained. When the technical
and commercial viability of a mineral resource has been demonstrated and a development decision has been
made, the capitalized costs of the related property are transferred to mining assets and depreciated using the
units of production method on commencement of commercial production.

If it is determined that capitalized acquisition, exploration and evaluation costs are not recoverable, or the
property is abandoned or management has determined impairment in value, the property is written down to its
recoverable amount. Exploration and evaluation assets are reviewed for impairment when facts and
circumstances suggest that the carrying amount may exceed its recoverable amount.

Government assistance

B.C. mining exploration tax credits for certain exploration expenditures incurred in B.C. are treated as reduction
of the exploration and evaluation cost of the respective assets when received.

7
PATRIOT ONE TECHNOLOGIES INC.
(formerly Clear Mountain Resources Corp.)
Notes to Consolidated Financial Statements
For the Years Ended May 31, 2016 and 2015
(Expressed in Canadian Dollars)

2. Significant Accounting Policies and Basis of Presentation (continued)

Restoration and environmental obligations

The Company recognizes liabilities for statutory, contractual, constructive or legal obligations associated with
the retirement of long-term assets, when those obligations result from the acquisition, construction,
development or normal operation of the assets. The net present value of future restoration cost estimates arising
from the decommissioning of plant and other site preparation work is capitalized to exploration and evaluation
assets along with a corresponding increase in the restoration provision in the period incurred. Discount rates
using a pre-tax rate that reflect the time value of money are used to calculate the net present value. The
restoration asset will be depreciated on the same basis as the related assets.

The Companys estimates of restoration costs could change as a result of changes in regulatory requirements,
discount rates and assumptions regarding the amount and timing of the future expenditures. These changes are
recorded directly to the related asset with a corresponding entry to the restoration provision. The Companys
estimates are reviewed annually for changes in regulatory requirements, discount rates, effects of inflation and
changes in estimates.

Changes in the net present value, excluding changes in amount and timing of the Companys estimates of
reclamation costs, are charged to profit and loss for the period.

The net present value of restoration costs arising from subsequent site damage that is incurred on an ongoing
basis during production are charged to profit or loss in the period incurred.

As at May 31, 2016 and 2015, there were no significant restoration and environmental obligations.

Income taxes

Current income tax:

Current income tax assets and liabilities for the current period are measured at the amount expected to be
recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are
those that are enacted or substantively enacted, at the reporting date, in the country where the Company
operates and generates taxable income.

Current income tax relating to items recognized directly in other comprehensive income or equity is recognized
in other comprehensive income or equity and not in profit or loss. Management periodically evaluates positions
taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation
and establishes provisions where appropriate.

Deferred income tax:

Deferred income tax is provided for, based on temporary differences at the reporting date between the tax bases
of assets and liabilities and their carrying amounts for financial reporting purposes. The carrying amount of
deferred income tax assets is reviewed at the end of each reporting period and recognized only to the extent that
it is probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset
to be utilized.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year
when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted by the end of the reporting period.

8
PATRIOT ONE TECHNOLOGIES INC.
(formerly Clear Mountain Resources Corp.)
Notes to Consolidated Financial Statements
For the Years Ended May 31, 2016 and 2015
(Expressed in Canadian Dollars)

2. Significant Accounting Policies and Basis of Presentation (continued)

Income taxes (continued)

Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable right exists to
set off current tax assets against current income tax liabilities and the deferred income taxes relate to the same
taxable entity and the same taxation authority.

Share-based compensation

The Company operates an employee stock option plan. Share-based compensation to employees is measured at
the fair value of the instruments issued and amortized over the vesting periods. Share-based compensation to
non-employees is measured at the fair value of goods or services received or the fair value of the equity
instruments issued, if it is determined the fair value of the goods or services cannot be reliably measured, and
are recorded at the date the goods or services are received. The corresponding amount is recorded to reserves.
The fair value of options is determined using the BlackScholes Model which incorporates all market vesting
conditions. The number of shares and options expected to vest is reviewed and adjusted at the end of each
reporting period such that the amount recognized for services received as consideration for the equity
instruments granted shall be based on the number of equity instruments that eventually vest.

Financial instruments

Financial assets

The Company classifies its financial assets into one of the following categories as follows:

Fair value through profit or loss - This category comprises derivatives and financial assets acquired principally
for the purpose of selling or repurchasing in the near term. They are carried at fair value with changes in fair
value recognized in profit or loss. The Company classifies cash as fair value through profit or loss.

Loans and receivables - These assets are non-derivative financial assets with fixed or determinable payments
that are not quoted in an active market. They are carried at amortized cost using the effective interest method
less any provision for impairment. The Company classifies receivables as loans and receivables.

All financial assets except those measured at fair value through profit or loss are subject to review for
impairment at least at each reporting date. Financial assets are impaired when there is objective evidence of
impairment as a result of one or more events that have occurred after initial recognition of the asset and that
event has an impact on the estimated future cash flows of the financial asset or the group of financial assets.

Financial liabilities

Other financial liabilities This category consists of liabilities carried at amortized cost using the effective
interest method, and includes trade payables and accrued liabilities, due to related parties and loan payable.

As at May 31, 2016, the Company does not have any derivative financial assets and liabilities.

9
PATRIOT ONE TECHNOLOGIES INC.
(formerly Clear Mountain Resources Corp.)
Notes to Consolidated Financial Statements
For the Years Ended May 31, 2016 and 2015
(Expressed in Canadian Dollars)

2. Significant Accounting Policies and Basis of Presentation (continued)

Impairment of non-financial assets

The carrying amount of the Companys assets (which include equipment and exploration and evaluation assets)
is reviewed at each reporting date to determine whether there is any indication of impairment. If such indication
exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss.
An impairment loss is recognized whenever the carrying amount of an asset or its cash generating unit exceeds
its recoverable amount. Impairment losses are recognized in the statement of comprehensive loss.

The recoverable amount of an asset is the greater of an assets fair value less cost to sell and value in use. In
assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects the current market assessments of the time value of money and the risks specific to the
asset. For an asset that does not generate cash inflows largely independent of those from other assets, the
recoverable amount is determined for the cash-generating unit to which the asset belongs.

An impairment loss is only reversed if there is an indication that the impairment loss may no longer exist and
there has been a change in the estimates used to determine the recoverable amount, however, not to an amount
higher than the carrying amount that would have been determined had no impairment loss been recognized in
previous years. Assets that have an indefinite useful life are not subject to amortization and are tested annually
for impairment.

Loss per share

Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average
number of shares outstanding during the reporting period. Diluted loss per share is computed similar to basic
loss per share except that the weighted average shares outstanding are increased to include additional shares for
the assumed exercise of stock options and warrants, if dilutive. The number of additional shares is calculated by
assuming that outstanding stock options and warrants were exercised and that the proceeds from such exercises
were used to acquire common stock at the average market price during the reporting periods. Potentially dilutive
options and warrants excluded from diluted loss per share totalled 296,375 (2015 340,225).

Valuation of equity units issued in private placements

The Company has adopted a residual value method with respect to the measurement of shares and warrants
issued as private placement units. The residual value method first allocates value to the most easily measurable
component based on fair value and then the residual value, if any, to the less easily measurable components.

The fair value of the common shares issued in the private placement was determined to be the more easily
measurable component and were valued at their fair value, as determined by the closing quoted fair value
attributed to the warrants is recorded as warrant reserve. If the warrants are exercised, the related amount is
reclassified as share capital.

Share issuance cost

Professional, consulting, regulatory and other costs directly attributable to financing transactions are recorded as
deferred financing costs until the financing transactions are completed, if the completion of the transaction is
considered likely; otherwise, they are expensed as incurred. Share issuance costs are charged to share capital
when the related shares are issued. Deferred financing costs related to financing transactions that are not
completed are charged to expenses.

10
PATRIOT ONE TECHNOLOGIES INC.
(formerly Clear Mountain Resources Corp.)
Notes to Consolidated Financial Statements
For the Years Ended May 31, 2016 and 2015
(Expressed in Canadian Dollars)

2. Significant Accounting Policies and Basis of Presentation (continued)

Accounting pronouncements not yet adopted

A number of new standards, amendments to standards and interpretations applicable to the Company are not yet
effective for the year ended May 31, 2016 and have not been applied in preparing these consolidated financial
statements. The new and revised standards will be effective to the Companys consolidated financial statements
for the year ending May 31, 2019 or later:

a) IFRS 9 Financial Instruments: Classification and Measurement applies to classification and measurement
of financial assets and liabilities as defined in IAS 39. It is tentatively effective for annual periods
beginning on or after January 1, 2018 with early adopted permitted. The Company does not expect any
effect on the Companys consolidated financial statements.

b) IAS 1 Presentation of Financial statements (IAS 1) was amended in December 2014 in order to clarify,
among other things, that information should not be obscured by aggregating or by providing immaterial
information, that materiality consideration apply to all parts of the financial statements and that even when
a standard requires a specific disclosure, materiality considerations do apply. The amendments are
effective for annual periods beginning on or after January 1, 2016. Earlier adoption permitted.

3. Equipment
Furniture and
fixtures
$
Cost:
As at May 31, 2014, 2015 and 2016 3,000

Accumulated depreciation:
As at May 31, 2014 1,618
Charge for the year 276
As at May 31, 2015 1,894
Change for the year 221
As at May 31, 2016 2,115

Net book value:

As at May 31, 2015 1,106
As at May 31, 2016 885

11
PATRIOT ONE TECHNOLOGIES INC.
(formerly Clear Mountain Resources Corp.)
Notes to Consolidated Financial Statements
For the Years Ended May 31, 2016 and 2015
(Expressed in Canadian Dollars)

4. Exploration and Evaluation Assets

Pemberton, British Columbia

On October 30, 2010 (and further amended on August 11, 2011), the Company had entered into an agreement
with Richard Billingsley and Dwayne Kress to acquire a 100% undivided interest in certain mineral claims
situated north of Pemberton, British Columbia (the Property).

This acquisition was subject to a 2% Net Smelter Return Royalty (NSR) for a period of five years which
would have commenced from the date upon which the Property is put into commercial production. The NSR
could have been repurchased by the Company at $1,000,000 per percentage point.

As at May 31, 2014, the Company wrote down the property to $1 as management had temporarily suspended all
major exploration activity due to the Companys cash position and general market conditions.

On April 7, 2015, the Company terminated the Property option agreement. Accordingly, the Company wrote-
down the Property to $nil.

On March 1, 2016, the Company received $1,550 in BC mining tax credit. This amount is recorded as recovery
of exploration and evaluation assets in the statement of comprehensive loss.

5. Trade Payables and Accrued Liabilities

May 31, 2016 May 31, 2015

$ $
Trade payables 529,466 513,843
Accrued liabilities 11,300 12,000

540,766 525,843

6. Related Party Transactions

During the year ended May 31, 2016, a director of the Company advanced $10,000 to the Company. The
advance is non-interest bearing and will be converted into private placement units within one year from
advance. If the advance is not converted there is no obligation to the Company to repay the amount.

As at May 31, 2016, $Nil (2015 - $27,034) was included in due to related parties owing to a former director and
officer of the Company for unpaid management fees.

As at May 31, 2016, $Nil (2015 - $66,156) was included in due to related parties owing to a company
controlled by a former director and officer of the Company for unpaid professional fees and reimbursement of
expenses. During the year the Company settled the above noted debt and recorded a gain on forgiveness of
$22,034.

Included in accounts payable and accrued liabilities as at May 31, 2016 is $97,500 (2015 - $Nil) owing to a director
of the Company which was acquired through an assignment of debt.

Included in accounts payable and accrued liabilities as at May 31, 2016 is $7,110 (2015 - $Nil) owing to two
officers of the Company for consulting fees.

12
PATRIOT ONE TECHNOLOGIES INC.
(formerly Clear Mountain Resources Corp.)
Notes to Consolidated Financial Statements
For the Years Ended May 31, 2016 and 2015
(Expressed in Canadian Dollars)

6. Related Party Transactions (continued)

Summary of key management personnel compensation:

For the years ended May 31,

2016 2015
$ $
Consulting fees 7,700 -
Management fees - 140,236
Professional fees 6,860 -

14,560 140,236

7. Share Capital and Reserves

Authorized and Issued Share Capital

Unlimited number of common shares without par value

During the year ended May 31, 2016

In November 2015, the Company completed a non-brokered private placement totalling 200,000 units at a price of
$0.20 per unit for gross proceeds of $40,000. Each unit consist of one common share and one transferable share
purchase warrant. Each warrant is exercisable into one additional common share at a price of $1.00 per common
share expiring on November 18, 2020. The Company recorded $950 in share issue cost.

On May 16, 2016, the shareholders of the Company approved a common share consolidation on the basis of twenty
pre-consolidation common shares for one post-consolidation common share of the Company. The consolidation was
made effective on May 18, 2016. All references to the number of shares and per share amounts have been
retroactively restated to give effect to the consolidation.

During the year ended May 31, 2015

There were no shares issued during the year ended May 31, 2015.

13
PATRIOT ONE TECHNOLOGIES INC.
(formerly Clear Mountain Resources Corp.)
Notes to Consolidated Financial Statements
For the Years Ended May 31, 2016 and 2015
(Expressed in Canadian Dollars)

7. Share Capital and Reserves (continued)

Stock Options

Under the Companys stock option plan, the Company may grant options to employees, consultants and
directors up to 10% of the issued and outstanding share capital at the date of grant. The exercise price of the
options granted will be no less than the discounted market price of the Companys shares and the maximum
term of the options will be 5 years or such longer term as permitted by the Exchange.

There were no stock options granted during the years ended May 31, 2015 and 2016.

A summary of stock option activities is as follows:

Number of Weighted average

options exercise price
$
Outstanding at May 31, 2014 and 2015 76,475 3.13
Forfeited (8,850) 3.08
Outstanding at May 31, 2016 67,625 3.14

8,850 stock options with a weighted average exercise price of $3.08 were forfeited during the year ended May
31, 2016. A value of $24,588 attributed to these stock options previously recorded was transferred from
reserves to share capital.

A summary of the stock options outstanding and exercisable at May 31, 2016 is as follows:

Number Outstanding
Expiry Date and Exercisable Exercise Price
$
May 10, 2017 8,100 3.00
April 4, 2018 22,375 2.20
May 29, 2018 11,200 3.10
January 6, 2019 25,950 4.00
67,625

As of May 31, 2016, the 67,625 (2015: 76,475) options outstanding have a weighted average remaining
contractual life of 2.05 (2015: 2.94) years.

14
PATRIOT ONE TECHNOLOGIES INC.
(formerly Clear Mountain Resources Corp.)
Notes to Consolidated Financial Statements
For the Years Ended May 31, 2016 and 2015
(Expressed in Canadian Dollars)

7. Share Capital and Reserves (continued)

Share Purchase Warrants

During the year ended May 31, 2015 3,825 agents warrants with a weighted average exercise price of $5.00
expired. A value of $8,479 attributed to these expired agents warrants previously recorded was transferred
from reserves to share capital.

A summary of share purchase warrant activities is as follows:

Number of Weighted average

warrants exercise price
$
Outstanding at May 31, 2014 267,575 3.00
Expired (3,825) 3.00
Outstanding at May 31, 2015 263,750 3.00
Issued 200,000 1.00
Expired (235,000) 3.00
Outstanding at May 31, 2016 228,750 1.25

A summary of the share purchase warrants outstanding at May 31, 2016 is as follows:

Number Exercise
Expiry Date Outstanding Price
$
June 24, 2016* 28,750 3.00
November 18, 2020 200,000 1.00
228,750
*Subsequent to May 31, 2016, 28,750 share purchase warrants expired unexercised.

8. Capital Disclosure and Management

The Company considers its capital structure to include shareholders deficit. The Companys objectives when
managing capital are to (i) maintain financial flexibility in order to preserve its ability to meet financial
obligations and continue as a going concern; (ii) maintain a capital structure that allows the Company to finance
its growth using internally-generated cash flow and debt capacity; and (iii) optimize the use of its capital to
provide an appropriate investment return to its shareholders commensurate with risk.

The Companys financial strategy is formulated and adapted according to market conditions in order to
maintain a flexible capital structure that is consistent with its objectives and the risk characteristics of its
underlying assets. The Company manages its capital structure and makes adjustments to it in light of changes in
economic conditions and the risk characteristics of its underlying assets. To maintain or adjust the capital
structure, the Company may attempt to issue new shares, acquire or dispose of assets, or adjust the amount of
cash and receivables.

There were no changes in the Companys approach to capital management during the year ended May 31, 2016.
The Company is not subject to externally imposed capital requirements.

15
PATRIOT ONE TECHNOLOGIES INC.
(formerly Clear Mountain Resources Corp.)
Notes to Consolidated Financial Statements
For the Years Ended May 31, 2016 and 2015
(Expressed in Canadian Dollars)

9. Segmented Information
The Company has one reportable operating segment the acquisition and exploration of exploration and
evaluation assets. All of the Companys assets are located in Canada.

10. Financial Instruments and Risk Management

Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy
according to the relative reliability of the inputs used to estimate the fair values. The three levels of the fair
value hierarchy are:

Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities;
Level 2 Inputs other than quoted prices that are observable for the asset or liability either directly or
indirectly; and
Level 3 Inputs that are not based on observable market data.

The Companys financial instruments consist of cash, receivables, trade payables and accrued liabilities and due
to related parties. The fair value of these financial instruments, other than cash, approximates their carrying
values due to the short-term nature of these instruments. Cash is measured at fair value using level 1 inputs.

The Company is exposed to a variety of financial risks by virtue of its activities including credit, interest rate,
liquidity and commodity price risk.

a) Credit risk

Credit risk is risk of financial loss to the Company if counterparty to a financial instrument fails to meet its
contractual obligations. The Companys cash is held in large Canadian financial institutions and is not
exposed to significant credit risk.

b) Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate
because of changes in market interest rates. The Company is exposed to limited interest rate risk as it only
holds cash and does not have any interest bearing debt.

c) Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its obligations as they come due. The
Companys ability to continue as a going concern is dependent on managements ability to raise the
required capital through future equity or debt issuances. The Company manages its liquidity risk by
forecasting cash flows from operations and anticipating any investing and financing activities.
Management and the Board of Directors are actively involved in the review, planning, and approval of
significant expenditures and commitments.

16
PATRIOT ONE TECHNOLOGIES INC.
(formerly Clear Mountain Resources Corp.)
Notes to Consolidated Financial Statements
For the Years Ended May 31, 2016 and 2015
(Expressed in Canadian Dollars)

10. Financial Instruments and Risk Management (continued)

d) Foreign currency risk

Foreign currency risk is the risk that the future cash flows or fair value of the Companys financial
instruments that are denominated in a currency that is not the Companys functional currency will fluctuate
due to the change in foreign exchange rate.

The Company is exposed to currency risk by incurring certain expenditures in currencies other than the
Canadian dollar. As such, it is subject to risk due to fluctuations in the exchange rates for the Canadian and
United States dollar. At May 31, 2016, the Company has trade payables and accrued liabilities in US
dollars of $35,702. Each 1% change in the Canadian dollar versus the US dollar would result in a gain/loss
of approximately $357.

11. Income Taxes

The reconciliation of the combined Canadian federal and provincial income tax rate to the income tax recovery
presented in the accompanying consolidated statements of comprehensive loss is provided below:

Years ended May 31,

2016 2015
$ $

Loss before income taxes (76,045) (303,263)

Combined federal and provincial statutory income tax rate 26.00% 26.00%

Expected income tax recovery at statutory tax rates (20,000) (78,848)

Non-deductible expenditures and other - 1,848
Change in unrecognized deductible temporary differences and others 20,000 77,000
Total - -

Significant components of deferred tax assets that have not been set up are as follows:

As of May 31,
2016 2015
$ $
Non-capital losses 534,000 500,600
Capital assets 300 300
Exploration and evaluation assets 270,000 270,000
Share issuance costs 4,000 18,100
Total 808,300 789,000

17
PATRIOT ONE TECHNOLOGIES INC.
(formerly Clear Mountain Resources Corp.)
Notes to Consolidated Financial Statements
For the Years Ended May 31, 2016 and 2015
(Expressed in Canadian Dollars)

11. Income Taxes (continued)

Significant components of unrecognized deductible temporary differences and unused tax losses that have not been
included on the consolidated statements of financial position are as follows:

As of May 31,
2016 Expiry dates 2015 Expiry dates
$ $
Share issuance costs 15,712 2016 to 2018 69,475 2016 to 2018
Non-capital losses 2,052,065 2032 to 2036 1,925,465 2032 to 2035
Exploration and evaluation assets 1,040,106 No Expiry 1,073,840 No Expiry
Capital assets 1,320 No Expiry 1,320 No Expiry

Tax attributes are subject to review, and potential adjustment, by tax authorities.

12. Subsequent Events

On June 27, 2016, the Company completed a non-brokered private placement totalling 9,505,000 units at a price of
$0.075 per unit for gross proceeds of $712,875. Each unit consisted of one common share and one transferable share
purchase warrant. Each warrant is exercisable into one additional common share at a price of $0.20 per common
share expiring on June 27, 2019. The Company issued 133,800 finders units with same terms as that of the private
placement noted above.

On July 28, 2016, the Company entered into a non-binding letter of intent (LOI) with Patriot One Detection Ltd.
(formerly Patriot One Technologies Inc.) (Patriot) pursuant to which the Company and Patriot will enter into a
definitive share exchange agreement whereby all outstanding securities of Patriot will be exchanged for securities of
the Company on a 1 for 1 basis. The transaction is subject to satisfactory due diligence investigations, completion of
a concurrent private placement financing to ensure a cash net of liabilities position of not less than $2,000,000 on
closing and approval of the board of directors and shareholders of the Company and Patriot and the Exchange.

In connection with the transaction, the Company will undertake a concurrent private placement financing of up to
14,000,000 units at a price of $0.15 per unit for gross proceeds of $2,100,000. Each unit will be comprised of one
common share and one share purchase warrant. Each share purchase warrant will entitle the holder to acquire one
additional common share of the Company at an exercise price of $0.30 per share for a period of two years.

On closing, the Company will grant up to 4,000,000 stock options exercisable at $0.15 per common share pursuant to
the terms of the LOI.

18
Consolidated Financial Statements

For the Year Ended May 31, 2015

(Expressed in Canadian Dollars)

 INDEPENDENT AUDITORS' REPORT

To the Shareholders of
Clear Mountain Resources Corp.

We have audited the accompanying consolidated financial statements of Clear Mountain Resources Corp., which comprise
the consolidated statements of financial position as at May 31, 2015 and 2014 and the consolidated statements of
comprehensive loss, cash flows, and changes in shareholders deficit for the years then ended, and a summary of significant
accounting policies and other explanatory information.

Managements Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance
with International Financial Reporting Standards, and for such internal control as management determines is necessary to
enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or
error.

Auditors Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted
our audits in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with
ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial
statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated
financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of
material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entitys preparation and fair presentation of the
consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entitys internal control. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as
evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our audit
opinion.

i
Opinion

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of Clear
Mountain Resources Corp. as at May 31, 2015 and 2014 and its financial performance and its cash flows for the years then
ended in accordance with International Financial Reporting Standards.

Emphasis of Matter

Without qualifying our opinion, we draw attention to Note 1 in the consolidated financial statements which describes
conditions and matters that indicate the existence of a material uncertainty that may cast significant doubt about Clear
Mountain Resources Corp.s ability to continue as a going concern.

DAVIDSON & COMPANY LLP

Vancouver, Canada Chartered Professional Accountants

September 25, 2015

ii
 CLEAR MOUNTAIN RESOURCES CORP.
Consolidated Financial Statements
For the Year Ended May 31, 2015
(Expressed in Canadian Dollars)

Page

Independent Auditors Report i

Contents iii

Consolidated Statements of Financial Position 1

Consolidated Statements of Comprehensive Loss 2

Consolidated Statements of Cash Flows 3

Consolidated Statements of Changes in Shareholders Deficit 4

Notes to Consolidated Financial Statements 5

iii
CLEAR MOUNTAIN RESOURCES CORP.
Consolidated Statements of Financial Position
(Expressed in Canadian Dollars)

May 31, 2015 May 31, 2014

$ $
Assets

Current
Cash 101,874 264,929
Receivables 2,874 11,929
Prepaid expenses 8,918 6,224
113,666 283,082

Equipment (Note 3) 1,106 1,382

Exploration and evaluation assets (Note 4) - 1

114,772 284,465

Liabilities

Current
Trade payables and accrued liabilities (Note 5) 525,843 417,213
Due to related parties (Note 6) 93,190 68,250
619,033 485,463

Shareholders' deficit
Share capital (Note 7) 2,479,103 2,470,624
Reserves (Note 7) 217,965 226,444
Deficit (3,201,329) (2,898,066)
(504,261) (200,998)

114,772 284,465

Nature and Continuance of Operations (Note 1)

Commitment (Note 11)

These consolidated financial statements are authorized for issuance by the Board of Directors on September
25, 2015.

On Behalf of the Board of Directors:

Richard Barth Michael Waldkirch

Richard Barth, Director Michael Waldkirch, Director

The accompanying notes are an integral part of these consolidated financial statements.

1
CLEAR MOUNTAIN RESOURCES CORP.
Consolidated Statements of Comprehensive Loss
(Expressed in Canadian Dollars)

For the year ended May 31,

2015 2014
$ $

EXPENSES
Advertising and promotion - 1,656
Consulting fees 5,000 -
Depreciation (Note 3) 276 346
Foreign exchange loss (gain) 49,604 (21,469)
Insurance 9,236 9,151
Investor relations 621 5,589
Management fees (Note 6) 140,236 202,586
Office and miscellaneous 889 3,222
Professional fees (Note 6) 31,757 614,420
Property investigation costs 39,582 -
Rent - 12,946
Share-based compensation (Notes 6 and 7) - 101,004
Transfer agent and filing fees 18,678 32,222
Travel and related 7,383 44,992
(303,262) (1,006,665)

Gain on advances forgiven (Note 6) - 5,486

Write-off of exploration and evaluation assets (Note 4) (1) (1,200,379)
(1) (1,194,893)

Loss and comprehensive loss for the year (303,263) (2,201,558)

Basic and diluted loss per share (0.01) (0.14)

Weighted average number of common shares outstanding 20,468,337 16,282,688

The accompanying notes are an integral part of these consolidated financial statements.

2
CLEAR MOUNTAIN RESOURCES CORP.
Consolidated Statements of Cash Flows
(Expressed in Canadian Dollars)

For the year ended May 31,

2015 2014
$ $
Cash flows used in operating activities
Net loss for the year (303,263) (2,201,558)
Items not affecting cash
Depreciation 276 346
Share-based compensation - 101,004
Gain on advances forgiven - (5,486)
Write-off of exploration and evaluation asset 1 1,200,379
(302,986) (905,315)
Changes in non-cash working capital items
Decrease (increase) in receivables 9,055 (6,720)
Increase in prepaid expenses (2,694) (1,058)
Increase in trade payables and accrued liabilities 108,630 384,962
Increase in due to related parties 24,940 51,763
(163,055) (476,368)

Cash flows used in investing activity

Exploration and evaluation assets expenditures - (905,258)

Cash flows from financing activities

Proceeds from share issuances - 1,413,667
Share issuance costs - (36,416)
- 1,377,251

Net change in cash (163,055) (4,375)

Cash, beginning of year 264,929 269,304

Cash, end of year 101,874 264,929

Non-cash transactions
Agent warrants as finders' fee - 8,479
Transfer from reserves to deficit on forfeiture/expiration
of stock options - 63,061
Shares issued for acquisition of exploration and evaluation assets - 40,000
Expiration of agents warrants 8,479 63,128

The accompanying notes are an integral part of these consolidated financial statements.

3
CLEAR MOUNTAIN RESOURCES CORP.
Consolidated Statements of Changes in Shareholders Deficit
(Expressed in Canadian Dollars)

Number of Total
Shares Share Warrant Option Total Shareholders'
Issued Capital Reserves Reserves Reserves Deficit Deficit
$ $ $ $ $ $
Balance at May 31, 2013 13,200,000 992,249 63,128 180,022 243,150 (759,569) 475,830

Shares issued for cash 7,068,337 1,413,667 - - - - 1,413,667

Share issuance costs - (29,941) - - - - (29,941)
Agent warrants issued - (8,479) 8,479 - 8,479 - -
Shares issued for acquisition of exploration and
evaluation assets 200,000 40,000 - - - - 40,000
Share-based compensation - - - 101,004 101,004 - 101,004
Expiration of agents warrants - 63,128 (63,128) - (63,128) - -
Stock options expired - - - (29,951) (29,951) 29,951 -
Stock options forfeited - - - (33,110) (33,110) 33,110 -
Net loss for the year - - - - - (2,201,558) (2,201,558)
Balance at May 31, 2014 20,468,337 2,470,624 8,479 217,965 226,444 (2,898,066) (200,998)

Expiration of agents warrants - 8,479 (8,479) - (8,479) - -

Net loss for the year - - - - - (303,263) (303,263)
Balance at May 31, 2015 20,468,337 2,479,103 - 217,965 217,965 (3,201,329) (504,261)

The accompanying notes are an integral part of these consolidated financial statements.

4
CLEAR MOUNTAIN RESOURCES CORP.
Notes to Consolidated Financial Statements
For the Year Ended May 31, 2015
(Expressed in Canadian Dollars)

1. Nature and Continuance of Operations

Clear Mountain Resources Corp. (the Company) was incorporated under the Business Corporations Act of
British Columbia, Canada on May 11, 2010 and completed its initial public offering (the IPO) and received
the final exchange bulletin for the Transaction from the TSX Venture Exchange ("Exchange") on May 10, 2012.
As a result, the Companys shares were listed for trading on the Exchange on May 15, 2012 under the trading
symbol CY.

The Companys head office and principal address is 67 East 5th Avenue, Vancouver BC V5T 1G7. The
Companys registered and records office is located at Suite 650 1188 West Georgia Street, Vancouver, BC
V6E 4A2. The principal business of the Company is the identification, evaluation and acquisition of mineral
properties and the subsequent exploration and operation thereof.

These consolidated financial statements have been prepared on a going concern basis with the assumption that
the Company will be able to realize its assets and discharge its liabilities in the normal course of business rather
than through a process of forced liquidation. These consolidated financial statements do not include any
adjustments to the amounts and classification of assets and liabilities that might be necessary should the
Company be unable to continue in business.

The operations and exploration and acquisition activities of the Company were primarily funded by the issue of
share capital. At May 31, 2015, the Company has incurred losses since its inception and has an accumulated
deficit of $3,201,329 (2014 - $2,898,066). The Company's ability to continue its operations and to realize assets
at their carrying values is dependent on its ability to develop a sufficient financing plan, receive continued
financial support from related parties, complete sufficient equity financing, and generate profitable operations in
the future. The Company has been successful in the past in raising funds for operations by issuing shares but
there is no assurance that it will be able to continue to do so in the future. These material uncertainties may cast
significant doubt about the Companys ability to continue as a going concern.

2. Significant Accounting Policies and Basis of Presentation

The following is a summary of significant accounting policies used in the preparation of these consolidated
financial statements.

Statement of compliance

These consolidated financial statements, including comparatives, have been prepared in accordance with
International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards
Board (IASB).

Basis of presentation

These consolidated financial statements of the Company have been prepared on an accrual basis and are based
on historical costs, modified where applicable. The consolidated financial statements are presented in Canadian
dollars unless otherwise noted.

Basis of consolidation

These consolidated financial statements include the accounts of the Company and its wholly owned
subsidiaries, Clear Mountain Production LLC, Clear Mountain Assets LLC, and Clear Mountain Midstream
LLC. All significant intercompany accounts and transactions between the Company and its subsidiaries have
been eliminated upon consolidation.

5
CLEAR MOUNTAIN RESOURCES CORP.
Notes to Consolidated Financial Statements
For the Year Ended May 31, 2015
(Expressed in Canadian Dollars)

2. Significant Accounting Policies and Basis of Presentation (continued)

Foreign currency translation

The functional currency of an entity is the currency of the primary economic environment in which the entity
operates. The functional currency of the Company and each of its wholly owned subsidiaries is the Canadian
dollar. The functional currency determinations were conducted through an analysis of the consideration factors
identified in IAS 21, The Effects of Changes in Foreign Exchange Rates.

Transactions in currencies other than Canadian dollars are recorded at exchange rates prevailing on the dates of
the transactions. At the end of each reporting period, monetary assets and liabilities denominated in foreign
currencies are translated at the period end exchange rate while non-monetary assets and liabilities are translated
at historical rates. Revenues and expenses are translated at the exchange rates approximating those in effect on
the date of the transactions. Exchange gains and losses arising on translation are included in profit and loss.

Use of estimates

The preparation of financial statements in conformity with IFRS requires management to make certain
estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported revenues and expenses during the period.

Although management uses historical experience and its best knowledge of the amount, events or actions to
form the basis for judgments and estimates, actual results may differ from these estimates.

The most significant accounts that require estimates as the basis for determining the stated amounts include the
valuation of share-based compensation and recognition of deferred tax amounts.

Critical judgments exercised in applying accounting policies that have the most significant effect on the
amounts recognized in the consolidated financial statements are as follows:

Determination of functional currency

The Company determines the functional currency through an analysis of several indicators such as expenses and
cash flow, financing activities, retention of operating cash flows, and frequency of transactions with the
reporting entity.

Information about assumptions and estimation uncertainties that have a significant risk of resulting in material
adjustments are as follows:

Valuation of share-based compensation

The Company uses the Black-Scholes Option Pricing Model (Black Scholes Model) for valuation of share-
based compensation. Option pricing models require the input of subjective assumptions including expected
price volatility, interest rate, and forfeiture rate. Changes in the input assumptions can materially affect the fair
value estimate and the Companys earnings and equity reserves.

Income taxes

In assessing the probability of realizing income tax assets, management makes estimates related to expectation
of future taxable income, applicable tax opportunities, expected timing of reversals of existing temporary
differences and the likelihood that tax positions taken will be sustained upon examination by applicable tax
authorities. In making its assessments, management gives additional weight to positive and negative evidence
that can be objectively verified.

6
CLEAR MOUNTAIN RESOURCES CORP.
Notes to Consolidated Financial Statements
For the Year Ended May 31, 2015
(Expressed in Canadian Dollars)

2. Significant Accounting Policies and Basis of Presentation (continued)

Equipment

Equipment is stated at historical cost less accumulated depreciation and accumulated impairment losses.

Subsequent costs are included in the assets carrying amount or recognized as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the Company and
the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All
other repairs and maintenance are charged to the statement of comprehensive loss during the fiscal period in
which they are incurred.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are
recognized in profit or loss.

As at May 31, 2015, the Company had furniture and fixtures listed as equipment. Depreciation of equipment is
calculated over their estimated useful lives on a diminishing balance basis at 20% per annum.

Exploration and evaluation assets

Pre-exploration costs are expensed as incurred.

Costs directly related to the acquisition and exploration of exploration and evaluation assets are capitalized once
the legal rights to explore the exploration and evaluation assets are acquired or obtained. When the technical
and commercial viability of a mineral resource has been demonstrated and a development decision has been
made, the capitalized costs of the related property are transferred to mining assets and depreciated using the
units of production method on commencement of commercial production.

If it is determined that capitalized acquisition, exploration and evaluation costs are not recoverable, or the
property is abandoned or management has determined impairment in value, the property is written down to its
recoverable amount. Exploration and evaluation assets are reviewed for impairment when facts and
circumstances suggest that the carrying amount may exceed its recoverable amount.

Government assistance

B.C. mining exploration tax credits for certain exploration expenditures incurred in B.C. are treated as reduction
of the exploration and evaluation cost of the respective assets when received.

7
CLEAR MOUNTAIN RESOURCES CORP.
Notes to Consolidated Financial Statements
For the Year Ended May 31, 2015
(Expressed in Canadian Dollars)

2. Significant Accounting Policies and Basis of Presentation (continued)

Restoration and environmental obligations

The Company recognizes liabilities for statutory, contractual, constructive or legal obligations associated with
the retirement of long-term assets, when those obligations result from the acquisition, construction,
development or normal operation of the assets. The net present value of future restoration cost estimates arising
from the decommissioning of plant and other site preparation work is capitalized to exploration and evaluation
assets along with a corresponding increase in the restoration provision in the period incurred. Discount rates
using a pre-tax rate that reflect the time value of money are used to calculate the net present value. The
restoration asset will be depreciated on the same basis as the related assets.

The Companys estimates of restoration costs could change as a result of changes in regulatory requirements,
discount rates and assumptions regarding the amount and timing of the future expenditures. These changes are
recorded directly to the related asset with a corresponding entry to the restoration provision. The Companys
estimates are reviewed annually for changes in regulatory requirements, discount rates, effects of inflation and
changes in estimates.

Changes in the net present value, excluding changes in amount and timing of the Companys estimates of
reclamation costs, are charged to profit and loss for the period.

The net present value of restoration costs arising from subsequent site damage that is incurred on an ongoing
basis during production are charged to profit or loss in the period incurred.

As at May 31, 2015 and 2014, there were no significant restoration and environmental obligations.

Income taxes

Current income tax:

Current income tax assets and liabilities for the current period are measured at the amount expected to be
recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are
those that are enacted or substantively enacted, at the reporting date, in the country where the Company
operates and generates taxable income.

Current income tax relating to items recognized directly in other comprehensive income or equity is recognized
in other comprehensive income or equity and not in profit or loss. Management periodically evaluates positions
taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation
and establishes provisions where appropriate.

Deferred income tax:

Deferred income tax is provided for, based on temporary differences at the reporting date between the tax bases
of assets and liabilities and their carrying amounts for financial reporting purposes. The carrying amount of
deferred income tax assets is reviewed at the end of each reporting period and recognized only to the extent that
it is probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset
to be utilized.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year
when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted by the end of the reporting period.

8
CLEAR MOUNTAIN RESOURCES CORP.
Notes to Consolidated Financial Statements
For the Year Ended May 31, 2015
(Expressed in Canadian Dollars)

2. Significant Accounting Policies and Basis of Presentation (continued)

Income taxes (continued)

Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable right exists to
set off current tax assets against current income tax liabilities and the deferred income taxes relate to the same
taxable entity and the same taxation authority.

Share-based compensation

The Company operates an employee stock option plan. Share-based compensation to employees is measured at
the fair value of the instruments issued and amortized over the vesting periods. Share-based compensation to
non-employees is measured at the fair value of goods or services received or the fair value of the equity
instruments issued, if it is determined the fair value of the goods or services cannot be reliably measured, and
are recorded at the date the goods or services are received. The corresponding amount is recorded to reserves.
The fair value of options is determined using the BlackScholes Model which incorporates all market vesting
conditions. The number of shares and options expected to vest is reviewed and adjusted at the end of each
reporting period such that the amount recognized for services received as consideration for the equity
instruments granted shall be based on the number of equity instruments that eventually vest.

Financial instruments

Financial assets

The Company classifies its financial assets into one of the following categories as follows:

Fair value through profit or loss - This category comprises derivatives and financial assets acquired principally
for the purpose of selling or repurchasing in the near term. They are carried at fair value with changes in fair
value recognized in profit or loss. The Company classifies cash as fair value through profit or loss.

Loans and receivables - These assets are non-derivative financial assets with fixed or determinable payments
that are not quoted in an active market. They are carried at amortized cost using the effective interest method
less any provision for impairment. The Company classifies receivables as loans and receivables.

All financial assets except those measured at fair value through profit or loss are subject to review for
impairment at least at each reporting date. Financial assets are impaired when there is objective evidence of
impairment as a result of one or more events that have occurred after initial recognition of the asset and that
event has an impact on the estimated future cash flows of the financial asset or the group of financial assets.

Financial liabilities

Other financial liabilities This category consists of liabilities carried at amortized cost using the effective
interest method, and includes trade payables and accrued liabilities and due to related parties.

As at May 31, 2015, the Company does not have any derivative financial assets and liabilities.

9
CLEAR MOUNTAIN RESOURCES CORP.
Notes to Consolidated Financial Statements
For the Year Ended May 31, 2015
(Expressed in Canadian Dollars)

2. Significant Accounting Policies and Basis of Presentation (continued)

Impairment of non-financial assets

The carrying amount of the Companys assets (which include equipment and exploration and evaluation assets)
is reviewed at each reporting date to determine whether there is any indication of impairment. If such indication
exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss.
An impairment loss is recognized whenever the carrying amount of an asset or its cash generating unit exceeds
its recoverable amount. Impairment losses are recognized in the statement of comprehensive loss.

The recoverable amount of an asset is the greater of an assets fair value less cost to sell and value in use. In
assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects the current market assessments of the time value of money and the risks specific to the
asset. For an asset that does not generate cash inflows largely independent of those from other assets, the
recoverable amount is determined for the cash-generating unit to which the asset belongs.

An impairment loss is only reversed if there is an indication that the impairment loss may no longer exist and
there has been a change in the estimates used to determine the recoverable amount, however, not to an amount
higher than the carrying amount that would have been determined had no impairment loss been recognized in
previous years. Assets that have an indefinite useful life are not subject to amortization and are tested annually
for impairment.

Loss per share

Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average
number of shares outstanding during the reporting period. Diluted loss per share is computed similar to basic
loss per share except that the weighted average shares outstanding are increased to include additional shares for
the assumed exercise of stock options and warrants, if dilutive. The number of additional shares is calculated by
assuming that outstanding stock options and warrants were exercised and that the proceeds from such exercises
were used to acquire common stock at the average market price during the reporting periods. Potentially dilutive
options and warrants excluded from diluted loss per share totalled 6,804,500 (2014 6,881,000).

Valuation of equity units issued in private placements

The Company has adopted a residual value method with respect to the measurement of shares and warrants
issued as private placement units. The residual value method first allocates value to the most easily measurable
component based on fair value and then the residual value, if any, to the less easily measurable components.

The fair value of the common shares issued in the private placement was determined to be the more easily
measurable component and were valued at their fair value, as determined by the closing quoted fair value
attributed to the warrants is recorded as warrant reserve. If the warrants are exercised, the related amount is
reclassified as share capital.

Share issuance cost

Professional, consulting, regulatory and other costs directly attributable to financing transactions are recorded as
deferred financing costs until the financing transactions are completed, if the completion of the transaction is
considered likely; otherwise, they are expensed as incurred. Share issuance costs are charged to share capital
when the related shares are issued. Deferred financing costs related to financing transactions that are not
completed are charged to expenses.

10
CLEAR MOUNTAIN RESOURCES CORP.
Notes to Consolidated Financial Statements
For the Year Ended May 31, 2015
(Expressed in Canadian Dollars)

2. Significant Accounting Policies and Basis of Presentation (continued)

Accounting pronouncements not yet adopted

A number of new standards, amendments to standards and interpretations applicable to the Company are not yet
effective for the year ended May 31, 2015 and have not been applied in preparing these consolidated financial
statements. The new and revised standards will be effective to the Companys consolidated financial statements
for the year ending May 31, 2019 or later:

a) IFRS 9 Financial Instruments: Classification and Measurement applies to classification and measurement
of financial assets and liabilities as defined in IAS 39. It is tentatively effective for annual periods
beginning on or after January 1, 2018 with early adopted permitted. The Company does not expect any
effect on the Companys consolidated financial statements.

3. Equipment
Furniture and
fixtures
$
Cost:
As at May 31, 2013, 2014 and 2015 3,000

Accumulated depreciation:
As at May 31, 2013 1,272
Charge for the year 346
As at May 31, 2014 1,618
Charge for the year 276
As at May 31, 2015 1,894

Net book value:

As at May 31, 2014 1,382
As at May 31, 2015 1,106

11
CLEAR MOUNTAIN RESOURCES CORP.
Notes to Consolidated Financial Statements
For the Year Ended May 31, 2015
(Expressed in Canadian Dollars)

4. Exploration and Evaluation Assets

Pemberton, British Columbia

Expenditures for the fiscal year related to the Pemberton exploration and evaluation assets are as follows:

For the year ended For the year ended

May 31, 2015 May 31, 2014
$ $
Balance, beginning of the year 1 255,122

Acquisition cash and shares - 65,000

Exploration expenditures:
Accommodation - 592
Consulting - 5,250
Ground work - 120
Meals - 289
Supplies - 78
Transportation - 1,419
- 7,748

BC mining tax credit - (3,800)

Write-down of exploration and evaluation asset (1) (324,069)
- (327,869)

Balance, end of the year - 1

On October 30, 2010 (and further amended on August 11, 2011), the Company had entered into an agreement
with Richard Billingsley and Dwayne Kress (Optionors) to acquire a 100% undivided interest in certain
mineral claims situated north of Pemberton, British Columbia (the Property).

This acquisition was subject to a 2% Net Smelter Return Royalty (NSR) for a period of five years which
would have commenced from the date upon which the Property is put into commercial production. The NSR
could have been repurchased by the Company at $1,000,000 per percentage point.

As at May 31, 2014, the Company wrote down the property to $1 as management had temporarily suspended all
major exploration activity due to the Companys cash position and general market conditions.

On April 7, 2015, the Company terminated the Property option agreement. Accordingly, the Company wrote-
down the Property to $nil.

12
CLEAR MOUNTAIN RESOURCES CORP.
Notes to Consolidated Financial Statements
For the Year Ended May 31, 2015
(Expressed in Canadian Dollars)

4. Exploration and Evaluation Assets (continued)

Osage County, Oklahoma

In October 2013, the Company entered into a Letter of Intent (the LOI) to acquire all of the right, title and
interest of the assets owned and operated by Performance Energy Resources, LLC (PERL) in and to
approximately 75,710 gross acres of leased lands in Osage County, Oklahoma (the Osage Property). The
purchase price of the Osage Property was US$108 million cash and included approximately 700 producing oil
and gas wells, equipment, inventory, improvements, leases, permits, licenses, surface rights, easements,
agreements and other assets and interests owned or leased by PERL in the exploration, development, operation,
production and maintenance of the Osage Property.

In February 2014, the Company entered into an assignment agreement effective as of October 1, 2013 with a
vendor (the Vendor) whereby the Vendor would sell, assign and transfer to the Company its interest, rights,
duties and obligations in the Hominy Creek Concession Area (the Concession Area) under the Lease
Acquisition and Exploration Agreement (the Original Agreement) dated February 15, 2012, initially between
the Vendor and the Osage Tribe of Indians of Oklahoma (Tribe). On February 4, 2014, the Tribe consented
to the assignment of the Original Agreement to the Company. The Original Agreement was amended to reflect
new terms and considerations (the Amended Agreement) as agreed upon by the Tribe and the Company. The
Amended Agreement would terminate on December 31, 2015, unless earlier terminated.

In July 2014, the Company defaulted on making a second lease cash payment pursuant to the Amended
Agreement in the amount of US$1,583,750 and as such, the agreement was terminated. Therefore, the
Company wrote-off related exploration and evaluation asset costs of $876,310 at May 31, 2014.

5. Trade Payables and Accrued Liabilities

May 31, 2015 May 31, 2014

$ $
Trade payables 513,843 402,213
Accrued liabilities 12,000 15,000

525,843 417,213

6. Related Party Transactions

The Company recorded a gain of $5,486 on advances forgiven that was owed to a former director and officer of
the Company during the year ended May 31, 2014.

As at May 31, 2015, $27,034 (2014 - $3,250) was included in due to related parties owing to a director and
officer of the Company for unpaid management fees.

As at May 31, 2015, $66,156 (2014 - $65,000) was included in due to related parties owing to a company
controlled by a director and officer of the Company for unpaid professional fees and reimbursement of
expenses.

13
CLEAR MOUNTAIN RESOURCES CORP.
Notes to Consolidated Financial Statements
For the Year Ended May 31, 2015
(Expressed in Canadian Dollars)

6. Related Party Transactions (continued)

Summary of key management personnel compensation:

For the year ended May 31,

2015 2014
$ $
Management fees 140,236 202,586
Professional fees - 65,000
Share-based compensation - 98,781

140,236 366,367

7. Share Capital and Reserves

Authorized and Issued Share Capital

Unlimited number of common shares without par value

During the year ended May 31, 2014

In December 2013, the Company completed the first tranche of a non-brokered private placement consisting of
5,345,868 common shares at a price of $0.20 per share for gross proceeds of $1,069,173. A finders fee of
$10,500 was paid and 52,500 agent warrants (valued at $5,847) were issued in connection with the first tranche
of the private placement. Each agent warrant entitled the holder to purchase one common share at a price of
$0.25 for a period of 12 months.

In January 2014, the Company completed the second and third tranche of a non-brokered private placement
totaling 1,722,469 common shares at a price of $0.20 per share for gross proceeds of $344,494. A finders fee
of $4,800 was paid and 24,000 agent warrants (valued at $2,632) were issued in connection with the third
tranche of the private placement. Each agent warrant entitled the holder to purchase one common share at a
price of $0.25 for a period of 12 months.

On May 6, 2014, the Company issued 200,000 common shares valued at $40,000 in relation to the Pemberton
Property option agreement.

Shares Held in Escrow

As at May 31, 2015, nil (2014 840,000) common shares were held in escrow (the Escrow Shares). The
Escrow Shares were being released in six equal tranches every six months from the date of listing on May 10,
2012 for a period of 36 months.

14
CLEAR MOUNTAIN RESOURCES CORP.
Notes to Consolidated Financial Statements
For the Year Ended May 31, 2015
(Expressed in Canadian Dollars)

7. Share Capital and Reserves (continued)

Stock Options

Under the Companys stock option plan, the Company may grant options to employees, consultants and
directors up to 10% of the issued and outstanding share capital at the date of grant. The exercise price of the
options granted will be no less than the discounted market price of the Companys shares and the maximum
term of the options will be 5 years or such longer term as permitted by the Exchange.

On January 6, 2014, the Company granted 534,000 options to directors and officers to purchase 534,000
common shares of the Company at a price of $0.20 per share on or before January 6, 2019. The fair value of
$95,529 was calculated using the Black-Scholes Model with the following assumptions: risk free interest rate of
1.91%, expected life of 5 years, expected dividends of zero, and expected annual volatility of 143%.

During the year ended May 31, 2014, 264,500 stock options with an exercise price of $0.15 were forfeited and
221,500 stock options with an exercise price of $0.15 expired. A value of $33,110 and $29,951, respectively,
attributed to these forfeited and expired options previously recorded was transferred from reserves to deficit.
The Company recognized share-based compensation of $101,004 for options granted and vested.
A summary of stock option activities is as follows:

Number of Weighted average

options exercise price
$
Outstanding at May 31, 2013 1,481,500 0.14
Granted 534,000 0.20
Forfeited (264,500) 0.15
Expired (221,500) 0.15
Outstanding at May 31, 2014 and 2015 1,529,500 0.16

A summary of the stock options outstanding and exercisable at May 31, 2015 is as follows:

Number Outstanding
Expiry Date and Exercisable Exercise Price
$
May 10, 2017* 324,000 0.15
April 4, 2018 447,500 0.11
May 29, 2018 224,000 0.155
January 6, 2019* 534,000 0.20
1,529,500
*Subsequent to May 31, 2015, 177,000 options were forfeited.

15
CLEAR MOUNTAIN RESOURCES CORP.
Notes to Consolidated Financial Statements
For the Year Ended May 31, 2015
(Expressed in Canadian Dollars)

7. Share Capital and Reserves (continued)

Share Purchase Warrants

During the year ended May 31, 2014:

On December 18, 2013, 52,500 agent warrants were issued pursuant to the first tranche of a non-brokered
private placement to purchase 52,500 common shares at a price of $0.25 per share on or before December 18,
2014. The fair value of $5,847 was calculated using the Black-Scholes Model with the following assumptions:
risk free interest rate of 0.98%, expected life of 1 year, expected dividends of zero, and expected annual
volatility of 168%.

On January 30, 2014, 24,000 agent warrants were issued pursuant to the third tranche of a non-brokered private
placement to purchase 24,000 common shares at a price of $0.25 per share on or before January 30, 2015. The
fair value of $2,632 was calculated using the Black-Scholes Model with the following assumptions: risk free
interest rate of 0.95%, expected life of 1 year, expected dividends of zero, and expected annual volatility of
166%.

542,000 share purchase warrants with a weighted average exercise price of $0.15 expired. A value of $63,128
attributed to these expired warrants previously recorded was transferred from reserves to share capital.

During the year ended May 31, 2015:

76,500 agents warrants with a weighted average exercise price of $0.25 expired. A value of $8,479 attributed
to these expired agents warrants previously recorded was transferred from reserves to share capital.

A summary of share purchase warrant activities is as follows:

Number of Weighted average

warrants exercise price
$
Outstanding at May 31, 2013 5,817,000 0.15
Issued 76,500 0.25
Expired (542,000) 0.15
Outstanding at May 31, 2014 5,351,500 0.15
Expired (76,500) 0.25
Outstanding at May 31, 2015 5,275,000 0.15

A summary of the share purchase warrants outstanding at May 31, 2015 is as follows:

Number Exercise
Expiry Date Outstanding Price
$
December 30, 2015 3,000,000 0.15
May 2, 2016 1,700,000 0.15
June 24, 2016 575,000 0.15
5,275,000

16
CLEAR MOUNTAIN RESOURCES CORP.
Notes to Consolidated Financial Statements
For the Year Ended May 31, 2015
(Expressed in Canadian Dollars)

8. Capital Disclosure and Management

The Company considers its capital structure to include shareholders deficit. The Companys objectives when
managing capital are to (i) maintain financial flexibility in order to preserve its ability to meet financial
obligations and continue as a going concern; (ii) maintain a capital structure that allows the Company to finance
its growth using internally-generated cash flow and debt capacity; and (iii) optimize the use of its capital to
provide an appropriate investment return to its shareholders commensurate with risk.

The Companys financial strategy is formulated and adapted according to market conditions in order to
maintain a flexible capital structure that is consistent with its objectives and the risk characteristics of its
underlying assets. The Company manages its capital structure and makes adjustments to it in light of changes in
economic conditions and the risk characteristics of its underlying assets. To maintain or adjust the capital
structure, the Company may attempt to issue new shares, acquire or dispose of assets, or adjust the amount of
cash and receivables.

There were no changes in the Companys approach to capital management during the year ended May 31, 2015.
The Company is not subject to externally imposed capital requirements.

9. Segmented Information
The Company has one reportable operating segment the acquisition and exploration of exploration and
evaluation assets. All of the Companys assets are located in Canada.

10. Financial Instruments and Risk Management

Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy
according to the relative reliability of the inputs used to estimate the fair values. The three levels of the fair
value hierarchy are:

Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities;
Level 2 Inputs other than quoted prices that are observable for the asset or liability either directly or
indirectly; and
Level 3 Inputs that are not based on observable market data.

The Companys financial instruments consist of cash, receivables, trade payables and accrued liabilities and due
to related parties. The fair value of these financial instruments, other than cash, approximates their carrying
values due to the short-term nature of these instruments. Cash is measured at fair value using level 1 inputs.

The Company is exposed to a variety of financial risks by virtue of its activities including credit, interest rate,
liquidity and commodity price risk.

a) Credit risk

Credit risk is risk of financial loss to the Company if counterparty to a financial instrument fails to meet its
contractual obligations. The Companys cash is held in large Canadian financial institutions and is not
exposed to significant credit risk.

17
CLEAR MOUNTAIN RESOURCES CORP.
Notes to Consolidated Financial Statements
For the Year Ended May 31, 2015
(Expressed in Canadian Dollars)

10. Financial Instruments and Risk Management (continued)

b) Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate
because of changes in market interest rates. The Company is exposed to limited interest rate risk as it only
holds cash and does not have any interest bearing debt.

c) Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its obligations as they come due. The
Companys ability to continue as a going concern is dependent on managements ability to raise the
required capital through future equity or debt issuances. The Company manages its liquidity risk by
forecasting cash flows from operations and anticipating any investing and financing activities.
Management and the Board of Directors are actively involved in the review, planning, and approval of
significant expenditures and commitments.

d) Foreign currency risk

Foreign currency risk is the risk that the future cash flows or fair value of the Companys financial
instruments that are denominated in a currency that is not the Companys functional currency will fluctuate
due to the change in foreign exchange rate.

The Company is exposed to currency risk by incurring certain expenditures in currencies other than the
Canadian dollar. As such, it is subject to risk due to fluctuations in the exchange rates for the Canadian and
United States dollar. At May 31, 2015, the Company has trade payables and accrued liabilities in US
dollars of $336,053. Each 1% change in the Canadian dollar versus the US dollar would result in a
gain/loss of approximately $3,361.

11. Commitment
In June 2013, the Company signed a consulting agreement with an officer and director of the Company to
provide management consulting services to the Company for an indefinite term effective April 23, 2013. The
agreement requires total payment of $10,833 per month. Included in the agreement is a provision for a two year
payout in the event of termination without cause and three year payout in the event of a change of control.

In March 2015, the Company and this officer and director mutually agreed to suspend all further consulting fees
as part of cost cutting initiatives.

18
CLEAR MOUNTAIN RESOURCES CORP.
Notes to Consolidated Financial Statements
For the Year Ended May 31, 2015
(Expressed in Canadian Dollars)

12. Income Taxes

The reconciliation of the combined Canadian federal and provincial income tax rate to the income tax recovery
presented in the accompanying consolidated statements of comprehensive loss is provided below:

Years ended May 31,

2015 2014
$ $

Loss before income taxes (303,263) (2,201,558)

Combined federal and provincial statutory income tax rate 26.00% 26.00%

Expected income tax recovery at statutory tax rates (78,848) (572,405)

Non-deductible expenditures and other 1,848 (15,517)
Change in unrecognized deductible temporary differences and others 77,000 587,922
Total - -

Significant components of deferred tax assets that have not been set up are as follows:

As of May 31,
2015 2014
$ $
Non-capital losses 500,600 408,100
Capital assets 300 300
Exploration and evaluation assets 282,300 282,000
Share issuance costs 18,100 32,700
Total 801,300 723,100

Significant components of unrecognized deductible temporary differences and unused tax losses that have not been
included on the consolidated statements of financial position are as follows:

As of May 31,
2015 Expiry dates 2014 Expiry dates
$ $
Share issuance costs 69,475 2016 to 2018 125,676 2015 to 2018
Non-capital losses 1,925,465 2032 to 2035 1,566,531 2032 to 2034
Exploration and evaluation assets 1,073,840 No Expiry 1,075,389 No Expiry
Capital assets 1,320 No Expiry 1,070 No Expiry

Tax attributes are subject to review, and potential adjustment, by tax authorities.

19
 SCHEDULE B

ISSUER MANAGEMENTS DISCUSSION AND ANALYSIS

PATRIOT ONE TECHNOLOGIES INC.
(formerly Clear Mountain Resources Corp.)

Managements Discussion and Analysis

For the Year Ended May 31, 2016
PATRIOT ONE TECHNOLOGIES INC.
MANAGEMENTS DISCUSSION AND ANALYSIS
For the year ended May 31, 2016

OVERVIEW

This discussion covers the operations of Patriot One Technologies Inc. (formerly Clear Mountain
Resources Corp.) (Company) for the year ended May 31, 2016. The following managements
discussion and analysis (MD&A) should be read in conjunction with the annual audited consolidated
financial statements and notes for the year ended May 31, 2016 (the Financial Statements). All
financial information in this MD&A has been prepared in accordance with International Financial
Reporting Standards (IFRS) and all dollar amounts are expressed in Canadian dollars unless otherwise
indicated.

Additional information on the Company is available on SEDAR at www.sedar.com and at the Companys
website, www.clearmountainresources.com. The date of this MD&A is August 26, 2016.

FORWARD LOOKING STATEMENTS

This MD&A may include certain "forward-looking statements" within the meaning of applicable
securities legislation. All statements, other than statements of historical facts, included in this MD&A
that address activities, events or developments that the Company expects or anticipates will or may occur
in the future, including such things as future business strategy, competitive strengths, goals, expansion
and growth of the Companys businesses, operations, plans and other such matters are forward-looking
statements. When used in this MD&A, the words "estimate", "plan", "anticipate", "expect", intend,
"believe" and similar expressions are intended to identify forward-looking statements. These statements
involve known and unknown risks, uncertainties and other factors which may cause the actual results,
performance or achievements of the Company to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking statements. Such factors
include, among others, changes in project parameters as plans continue to be refined, unavailability of
financing, fluctuations in precious and/or base metals prices and other factors. Although the Company
has attempted to identify important factors that could cause actual results to differ materially, there may
be other factors that cause results not to be as anticipated, estimated or intended. There can be no
assurance that such 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 forward-looking statements.

DESCRIPTION OF BUSINESS

The Company is a junior mineral resource exploration company with its head office located in
Vancouver, British Columbia, Canada. The Companys shares were listed for trading on the TSX
Venture Exchange (Exchange) under the trading symbol CY. The principal business of the
Company is the identification, evaluation and acquisition of mineral properties and the subsequent
exploration and operation thereof.

In September 2015, the Companys wholly-owned subsidiaries, Clear Mountain Production LLC, Clear
Mountain Assets LLC, and Clear Mountain Midstream LLC, were fully dissolved.

In November 2015, the Company closed a private placement for gross proceeds of $40,000, whereby the
Company issued 200,000 (4,000,000 pre-consolidation) units at a price of $0.20 ($0.01 pre-consolidation)
per unit. Each unit consisted of one common share and one share purchase warrant, each warrant
exercisable into one additional common share for a period of five years at a price of $1.00 ($0.05 pre-

2
PATRIOT ONE TECHNOLOGIES INC.
MANAGEMENTS DISCUSSION AND ANALYSIS
For the year ended May 31, 2016

consolidation) per share. The Company incurred share issuance costs of $950 in connection with this
private placement.

On April 8, 2016, the Company appointed Geoff Balderson as Chief Executive Officer and director of the
Company, and Carrie Cesarone as Chief Financial Officer and Secretary of the Company. The Company
also appointed Jeffery Tindale and Leighton Bocking as directors of the Company.

Richard Barth resigned as Chief Executive Officer and director, Michael Waldkirch resigned as Chief
Financial Officer and director, and Craig Taylor and Mark Vanry resigned as directors of the Company.

On May 16, 2016, the shareholder of the Company approved a common share consolidation on the basis
of twenty pre-consolidation common shares for one post-consolidation share of the Company. The
consolidation was made effective on May 18, 2016. All references to the number of shares and per share
amounts have been retroactively restated to give effect to the consolidation.

On July 28, 2016, the Company entered into a non-binding letter of intent (LOI) with Patriot One Detection
Ltd. (formerly Patriot One Technologies Inc.) (Patriot) pursuant to which the Company and Patriot will
enter into a definitive share exchange agreement whereby all outstanding securities of Patriot will be
exchanged for securities of the Company on a 1 for 1 basis. See Proposed Transactions below for more
details. Subsequent to completing the transaction, the Company will cease resourcerelated activities and
become a technology issuer. On August 24, 2016, the Company changed its name to Patriot One
Technologies Inc. and its shares were listed for trading on Exchange under the trading symbol PAT.
Completion of the transaction is subject to a number of conditions, including Exchange acceptance and
shareholder approval.

OVERALL PERFORMANCE

Financial highlights:

Operating expenses during the year ended May 31, 2016 were $99,629 versus $303,262 in the
comparative year ended May 31, 2015. The decrease in operating expenses in the current year is
attributable to reduced corporate activity and cost cutting initiatives which resulted in lower management
fees, professional fees, property investigation costs, and travel and related fees.

The total net decrease in cash during the year ended May 31, 2016 was $100,156 compared to a decrease
of $163,055 in the comparative year ended May 31, 2015. The decrease in the current year was the result
of cash used in operating activities of $150,756 as compared to $163,055 in the comparative period. The
Company recovered a portion of this with the closing of a $40,000 private placement in November 2015.

3
PATRIOT ONE TECHNOLOGIES INC.
MANAGEMENTS DISCUSSION AND ANALYSIS
For the year ended May 31, 2016

SELECTED ANNUAL INFORMATION

At May 31, 2016, the Company had not yet achieved profitable operations and has an accumulated deficit
of $3,252,786 (2015 - $3,201,329) since inception. These losses resulted in a net loss per share (basic and
diluted) for the year ended May 31, 2016 of $0.07 (2015 - $0.30).

The following financial data is derived from the Companys annual audited financial statements for the
years ended May 31, 2016, 2015 and 2014:

2016 2015 2014

$ $ $
Revenue - - -
General and administrative expenses 99,629 303,262 1,006,665
Loss and comprehensive loss (76,045) (303,263) (2,201,558)
Basic and diluted loss per common
share (0.07) (0.30) (2.70)
Working capital (deficit) (532,141) (505,367) (202,381)
Exploration and evaluation assets - - 1
Total assets 9,510 114,772 284,465
Total Liabilities 540,766 619,033 485,463

The Company is considered an exploration stage company and has not generated any revenues to date.

RESULTS OF OPERATIONS

The table below details the changes in major expenditures for the year ended May 31, 2016 as compared
to the corresponding year ended May 31, 2015.

Expenses Increase / Decrease in Explanation for Change

Expenses
Foreign exchange Decrease of $14,800 Decrease as the US dollar strengthened relative to
loss the Canadian dollar at a greater pace in the
comparative period. US dollar has been consistent
in the current period.
Management fees Decrease of $140,236 Decrease as part of the implementation of cost
cutting initiatives by suspending all further
management fees.
Professional fees Decrease of $14,952 Decrease was correlated with reduced corporate
activity in the current period.
Property Decreased of $39,582 Decrease was correlated with reduced activities in
investigation costs the current period.

4
PATRIOT ONE TECHNOLOGIES INC.
MANAGEMENTS DISCUSSION AND ANALYSIS
For the year ended May 31, 2016

The table below details the changes in major expenditures for the year ended May 31, 2015 as compared
to the corresponding year ended May 31, 2014.

Expenses Increase / Decrease in Explanation for Change

Expenses
Foreign exchange Decrease of $71,073 Increase in the US dollar strengthened relative to the
loss Canadian dollar.
Management fees Decrease of $62,350 Decrease as part of the implementation of cost
cutting initiatives
Professional fees Decrease of $582,663 Decrease as the higher legal fees incurred in the
comparative period was associated with evaluating
projects in Osage County, Oklahoma.
Rent Decrease of $12,946 Decrease as there was no rent incurred in fiscal
2015.
Share-based Decrease of $101,004 Decrease as there were no stock options granted in
compensation fiscal 2015.
Transfer agent and Decrease of $13,544 Decrease was correlated with reduced corporate
filing fees activity in the current period.
Travel and related Decrease of $37,609 Decrease was correlated with reduced corporate
activity in the current period.

FOURTH QUARTER

For the quarter ended May 31, 2016, the Company had a net loss and comprehensive loss of $9,754 as
compared to a net loss of $7,233 for the period ended May 31, 2015. The current period loss is consistent
with that of the prior period. The operating expenses for the three months ended May 31, 2016 of
$33,337 relate primarily to $7,700 in consulting fees to the officers of the Company, $9,176 in
professional fees and $8,489 in transfer agent and filing fees. In addition, the Company settled with a
former director of the Company and recorded a gain on forgiveness of debt of $22,034. The operating
expenses of $7,233 for the three months ended May 31, 2015 relate primary to maintaining the Company
as a reporting issuer.

SUMMARY OF QUARTERLY FINANCIAL RESULTS

Three months ended

May 31, 2016 Feb 29, 2016 Nov 30, 2015 Aug 31, 2015
$ $ $ $
Loss and comprehensive loss (9,754) (9,825) (21,244) (35,222)
Basic and diluted loss per share (0.01) (0.01) (0.02) (0.03)

May 31, 2015 Feb 28, 2015 Nov 30, 2014 Aug 31, 2014
$ $ $ $
Loss and comprehensive loss (7,233) (103,614) (85,681) (106,735)
Basic and diluted loss per share (0.01) (0.10) (0.08) (0.10)

5
PATRIOT ONE TECHNOLOGIES INC.
MANAGEMENTS DISCUSSION AND ANALYSIS
For the year ended May 31, 2016

The Company has not generated revenue since its inception; therefore, the Company continues to incur
losses. The losses for the quarters are primarily the result of costs associated with maintaining the
Companys as a reporting issuer, management and professional fees.

LIQUIDITY, FINANCIAL POSITION AND CAPITAL RESOURCES

The Company does not generate cash from operations and is dependent on raising capital from equity
markets to pursue new projects and business opportunities.

The Companys liquidity and capital resources are as follows:

May 31, 2016 May 31, 2015

$ $
Cash 1,718 101,874
Receivables 1,624 2,874
Prepaid expenses 5,283 8,918
Total current assets 9,510 113,666
Trade payables and accrued liabilities 540,766 525,843
Due to related parties - 93,190
Working capital deficit (532,141) (505,367)

The Companys operations consist primarily of the identification, evaluation and acquisition of mineral
properties and the subsequent exploration and operation thereof including actively seeking joint venture
partners to assist with exploration funding. The Companys financial success will be dependent on the
extent to which it can discover new mineral deposits.

As at May 31, 2016, the Company had a cash position of $1,718 (May 31, 2015 - $101,874) consisting of
net proceeds from the private placement which closed in November 2015. As at May 31, 2016, the
Company had a working capital deficit of $532,141 (May 31, 2015 $505,367).

The Companys continuation as a going concern is dependent upon its ability to attain profitable
operations and generate funds therefrom, find another financeable project, and/or raise equity capital or
borrowings sufficient to meet current and future obligations. The Company has been successful in the past
in raising funds for operations by issuing shares but there is no assurance that it will be able to continue to
do so in the future, which raise significant doubts about the Companys ability to continue as a going
concern. See Risks and Uncertainties.

On June 27, 2016, the Company completed a non-brokered private placement totalling 9,505,000 units at a
price of $0.075 per unit for gross proceeds of $712,875. Each unit consist of one common share and one
transferable share purchase warrant. Each warrant is exercisable into one additional common share at a price
of $0.20 per common share expiring on June 27, 2019. The Company issued 133,800 finders units with same
terms as that of the private placement noted above.

OFF-BALANCE SHEET ARRANGEMENTS

The Company has no off-balance sheet arrangements.

6
PATRIOT ONE TECHNOLOGIES INC.
MANAGEMENTS DISCUSSION AND ANALYSIS
For the year ended May 31, 2016

RELATED PARTY TRANSACTIONS

During the year ended May 31, 2016, Leighton Bocking, a director of the Company advanced $10,000 to
the Company. The amount owed is unsecured, non-interest bearing and to be converted into private
placement units within one year from advance. If the loan is not converted there is no obligation to the
Company to repay the amount.

As at May 31, 2016, $Nil (2015 - $27,034) was included in due to related parties owing to Richard Barth,
a former director and officer of the Company for unpaid management fees.

As at May 31, 2016, $Nil (2015 - $66,156) was included in due to related parties owing to a company
controlled by Michael Waldkirch, a former director and officer of the Company for unpaid professional
fees and reimbursement of expenses. During the year the Company settled the above noted debt and
recorded a gain on forgiveness of $22,034.

Included in accounts payable and accrued liabilities as at May 31, 2016 is $97,500 (2015 - $Nil) owing to
Leighton Bocking, a director of the Company which was acquired through an assignment of debt.

Included in accounts payable and accrued liabilities as at May 31, 2016 is $5,460 (2015 - $Nil) owing to
Carrie Cesarone, CFO of the Company for consulting fees.

Included in accounts payable and accrued liabilities as at May 31, 2016 is $1,650 (2015 - $Nil) owing to
Geoff Balderson, CEO of the Company for consulting fees.

Summary of key management personnel compensation:

For the years ended May 31,

2016 2015
$ $
Consulting fees
Carrie Cesarone CFO 4,700 -
Geoff Balderson CEO 3,000 -

Professional fees
Michael Waldkirch & Company Inc. a
company controlled by Michael Waldkirch 6,860 -

Management fees
Michael Waldkirch CFO - 42,841
Richard Barth CEO - 97,395

14,560 140,236

7
PATRIOT ONE TECHNOLOGIES INC.
MANAGEMENTS DISCUSSION AND ANALYSIS
For the year ended May 31, 2016

PROPOSED TRANSACTIONS

On July 28, 2016, the Company entered into a non-binding letter of intent (LOI) with Patriot One Detection
Ltd. (formerly Patriot One Technologies Inc.) (Patriot) pursuant to which the Company and Patriot will
enter into a definitive share exchange agreement whereby all outstanding securities of Patriot will be
exchanged for securities of the Company on a 1 for 1 basis. The transaction is subject to satisfactory due
diligence investigations, completion of a concurrent private placement financing to ensure a cash net of
liabilities position of not less than $2,000,000 on closing and approval of the board of directors and
shareholders of the Company and Patriot and the Exchange.

In connection with the transaction, the Company will undertake a concurrent private placement financing of up
to 14,000,000 units at a price of $0.15 per unit for gross process of $2,100,000. Each unit will be comprised of
one common share and one share purchase warrant. Each share purchase warrant will entitle the holder to
acquire one additional common share of the Company at an exercise price of $0.30 per share for a period of
two years.

On closing , the Company will grant up to 4,000,000 stock options exercisable at $0.15 per common share
pursuant to the terms of the LOI.

CRITICAL ACCOUNTING ESTIMATES

The preparation of the consolidated financial statements requires management to make estimates and
assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities, as
well as the reported revenues and expenses during the reporting period. Based on historical experience
and current conditions, management makes assumptions that are believed to be reasonable under the
circumstances. These estimates and assumptions form the basis for judgments about the carrying value of
assets and liabilities and reported amounts for revenues and expenses. Different assumptions would result
in different estimates, and actual results may differ from results based on these estimates. These estimates
and assumptions are also affected by managements application of accounting policies. Critical
accounting estimates are those that affect the financial statements materially and involve a significant
level of judgment by management.

Although management uses historical experience and its best knowledge of the amount, events or actions
to form the basis for judgments and estimates, actual results may differ from these estimates.

The most significant accounts that require estimates as the basis for determining the stated amounts
include the valuation of share-based compensation, and recognition of deferred tax amounts.

Critical judgments exercised in applying accounting policies that have the most significant effect on the
amounts recognized in the Interim Financial Statements are as follows:

Determination of functional currency

The Company determines the functional currency through an analysis of several indicators such as
expenses and cash flow, financing activities, retention of operating cash flows, and frequency of
transactions with the reporting entity.

Information about assumptions and estimation uncertainties that have a significant risk of resulting in
material adjustments are as follows:

8
PATRIOT ONE TECHNOLOGIES INC.
MANAGEMENTS DISCUSSION AND ANALYSIS
For the year ended May 31, 2016

Income taxes

In assessing the probability of realizing income tax assets, management makes estimates related to
expectation of future taxable income, applicable tax opportunities, expected timing of reversals of
existing temporary differences and the likelihood that tax positions taken will be sustained upon
examination by applicable tax authorities. In making its assessments, management gives additional weight
to positive and negative evidence that can be objectively verified.

FINANCIAL INSTRUMENTS

Financial instruments measured at fair value are classified into one of three levels in the fair value
hierarchy according to the relative reliability of the inputs used to estimate the fair values. The three
levels of the fair value hierarchy are:

a) Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities;

b) Level 2 Inputs other than quoted prices that are observable for assets or liabilities, either
directly or indirectly; and

c) Level 3 Input for assets or liabilities that are not based on observable market data.

The Companys financial instruments consist of cash, receivables, trade payables and accrued liabilities,
and due to related parties. The fair value of these financial instruments, other than cash, approximates
their carrying values due to the short-term nature of these instruments. Cash is measured at fair value
using level 1 inputs.

The Company is exposed to a variety of financial risks by virtue of its activities including credit, interest
rate, liquidity and commodity price risk.

a) Credit risk

Credit risk is risk of financial loss to the Company if counterparty to a financial instrument fails
to meet its contractual obligations. The Companys cash is held in trust with a large Canadian
financial institution and is not exposed to significant credit risk.

b) Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will
fluctuate because of changes in market interest rates. The Company is exposed to limited interest
rate risk as it only holds cash and does not have any interest bearing debt.

c) Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its obligations as they come
due. The Company is currently exposed to liquidity risk as it does not have sufficient cash to
offset current liabilities. The Company intends to manage its liquidity risk by forecasting cash
flows from operations and anticipating future investing and financing activities (which may
include acquiring financing through the equity markets). Management and the Board of Directors
are actively involved in the review, planning and approval of significant expenditures and
commitments.

9
PATRIOT ONE TECHNOLOGIES INC.
MANAGEMENTS DISCUSSION AND ANALYSIS
For the year ended May 31, 2016

d) Foreign currency risk

Foreign currency risk is the risk that the future cash flows or fair value of the Companys
financial instruments that are denominated in a currency that is not the Companys functional
currency will fluctuate due to the change in foreign exchange rate.

The Company is exposed to currency risk by incurring certain expenditures in currencies other
than the Canadian dollar. As such, it is subject to risk due to fluctuations in the exchange rates for
the Canadian and United States dollar. At May 31, 2016, the Company has trade payables and
accrued liabilities in US dollars of $35,702. Each 1% change in the Canadian dollar versus the
US dollar would result in a gain/loss of approximately $357.

RISKS AND UNCERTAINTIES

The Company believes that the following risks and uncertainties may significantly affect its success.

Lack of Cash Flow and Requirements for New Capital

The Companys current operations do not generate any positive cash flow. The Company has limited
financial resources. There can be no assurance that additional funding will be available to allow the
Company to fulfill such obligations.

No Operating History

The Company has no history of earnings or paid any cash dividends, and it is unlikely to produce earnings
or pay dividends in the immediate or foreseeable future.

Competition

The Company competes with numerous other individuals and companies possessing greater financial
resources and technical facilities in the search for and acquisition of attractive mineral properties.

Management: Dependence on Key Personnel

The Company is dependent on a relatively small number of key personnel the loss of any one of whom
could have an adverse effect on the Company. In addition, while certain of the Companys officers and
directors have experience in the exploration and operation of mineral producing properties, the Company
will remain highly dependent upon contractors and third parties in the performance of its exploration and
development activities. There can be no guarantee that such contractors and third parties will be available
to carry out such activities on behalf of the Company or be available upon commercially acceptable
terms. Certain directors and officers of the Company are associated with other natural resource
exploration companies and may from time to time be in a conflict of interest.

Litigation

The nature of the Companys business subjects it to regulatory investigations, claims and lawsuits in the
ordinary course of business. There is no assurance that the foregoing matters or any other investigations,
claims and lawsuits, will not have an adverse effect on the Company.

10
PATRIOT ONE TECHNOLOGIES INC.
MANAGEMENTS DISCUSSION AND ANALYSIS
For the year ended May 31, 2016

CHANGES IN ACCOUNTING POLICIES

There were no changes to the Companys accounting policies during the year ended May 31, 2016.

Certain new standards, interpretations and amendments to existing standards have been issued by the
International Accounting Standards Board or the International Financial Reporting Interpretations
Committee that are mandatory for accounting periods beginning after January 1, 2016, or later periods.
Some updates that are not applicable or are not consequential to the Company may have been excluded
from the list below.

The following standards and interpretations have been issued but are not yet effective:

a) IFRS 9 Financial Instruments: Classification and Measurement applies to classification and

measurement of financial assets and liabilities as defined in IAS 39. It is tentatively effective for
annual periods beginning on or after January 1, 2018 with early adopted permitted. The Company
does not expect any effect on the Companys consolidated financial statements.

b) IAS 1 Presentation of Financial statements (IAS 1) was amended in December 2014 in order to
clarify, among other things, that information should not be obscured by aggregating or by providing
immaterial information, that materiality consideration apply to all parts of the financial statements
and that even when a standard requires a specific disclosure, materiality considerations do apply.
The amendments are effective for annual periods beginning on or after January 1, 2016. Earlier
adoption permitted.

OUTLOOK

The Company's primary focus for the foreseeable future will be on reviewing its financial position,
seeking new business opportunities and/or financing new business ventures in the mineral resource
industry.

DISCLOSURE OF DATA FORM OUTSTANDING COMMON SHARES, OPTIONS AND

WARRANTS

Common Shares

Below is a summary of the number of shares, options, and warrants outstanding.

As at May 31, 2016 As at August 26, 2016

Common shares 1,223,416 10,862,216
Stock options 67,625 67,625
Warrants 228,750 9,838,800

11
PATRIOT ONE TECHNOLOGIES INC.
MANAGEMENTS DISCUSSION AND ANALYSIS
For the year ended May 31, 2016

Stock Options

The Company has issued incentive options to certain directors, employees, officers, and consultants of the
Company. As of the date of this report, there are four tranches of stock options as shown below:

Number of Exercise
Options price Expiry date
$
8,100 3.00 May 10, 2017
22,375 2.20 April 4, 2018
11,200 3.10 May 29, 2018
25,950 4.00 January 6, 2019

Warrants

As at the date of this report, the Company has warrants outstanding as shown below:

Number of Exercise
Warrants price Expiry date
$
200,000 1.00 November 18, 2020
9,638,800 0.20 June 27, 2019

ADDITIONAL INFORMATION

Additional information related to the Company is available for view on SEDAR at www.sedar.com
including, but not limited to:

The Companys Audited Financial Statements for the year ended May 31, 2016.

Current directors and officers of the Company are as follows:

Geoff Balderson, President, CEO and Director

Carrie Cesarone, CFO and Corporate Secretary
Jeffery Tindale , Director
Leighton Bocking, Director

The MD&A has been approved by the Board effective August 26, 2016.

Clear Mountain Resources Corp.

1000 409 Granville St.

Vancouver, B.C.
V6C 1T2
Canada

Phone: 604-602-0001
Fax: 888-393-6884

12
 SCHEDULE C

PATRIOT FINANCIAL STATEMENTS

PATRIOT ONE DETECTION LTD.

(formerly Patriot One Technologies, Inc.)

Financial Statements

July 31, 2016

(Expressed in Canadian Dollars)

Index Page

Independent Auditors Report 1-2

Financial Statements:

Statement of Financial Position 3

Statement of Loss and Comprehensive Loss 4

Statement of Changes in Shareholders Deficiency 5

Statement of Cash Flows 6

Notes to the Financial Statements 7 18

 INDEPENDENT AUDITORS' REPORT

To the Directors of
Patriot One Detection Ltd. (formerly Patriot One Technologies Inc.)

We have audited the accompanying financial statements of Patriot One Detection Ltd. (formerly Patriot
One Technologies Inc.), which comprise the statement of financial position as at July 31, 2016, and the
statements of loss and comprehensive loss, changes in shareholders deficiency, and cash flows for the
period from incorporation on March 7, 2016 to July 31, 2016, and a summary of significant accounting
policies and other explanatory information.

Managements Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in
accordance with International Financial Reporting Standards, and for such internal control as
management determines is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.

Auditors Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with Canadian generally accepted auditing standards. Those
standards require that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditors judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entitys
preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the entitys internal control. An audit also includes evaluating the appropriateness of accounting policies
used and the reasonableness of accounting estimates made by management, as well as evaluating the
overall presentation of the financial statements.

We believe that the audit evidence we have obtained in our audit is sufficient and appropriate to provide a
basis for our audit opinion.

1
Opinion

In our opinion, these financial statements present fairly, in all material respects, the financial position of
Patriot One Detection Ltd. (formerly Patriot One Technologies Inc.) as at July 31, 2016 and its financial
performance and its cash flows for the period from incorporation on March 7, 2016 to July 31, 2016 in
accordance with International Financial Reporting Standards.

Emphasis of Matter

Without qualifying our opinion, we draw attention to Note 1 in the financial statements which describes
conditions and matters that indicate the existence of a material uncertainty that may cast significant doubt
about Patriot One Detection Ltd.s ability to continue as a going concern.

DAVIDSON & COMPANY LLP

Vancouver, Canada Chartered Professional Accountants

August 18, 2016

2
PATRIOT ONE DETECTION LTD.
(formerly Patriot One Technologies, Inc.)
Statement of Financial Position
(Expressed in Canadian Dollars)
As at
July 31,
2016

Assets

Cash $ 195,090
Due from related party (note 9) 30,166
Prepaid expenses 101

$ 225,357

Liabilities

Current
Accounts payable and accrued liabilities (note 9) $ 229,109

Shareholders Deficiency

Capital stock (note 5) 475,625

Share subscription received in advance (note 5) 298,240
Share subscription receivable (notes 5 and 11) (173,375)
Deficit (604,242)
(3,752)

$ 225,357

Nature of operations and going concern (note 1)

Subsequent events (note 11)

Approved on behalf of the Board:

Kal Malhi (signed) Dinesh Kandanchatha (signed)

Director Director

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

3
PATRIOT ONE DETECTION LTD.
(formerly Patriot One Technologies, Inc.)
Statement of Loss and Comprehensive Loss
(Expressed in Canadian Dollars)

Period from
incorporation
on March 7,
2016 to July
31, 2016

Expenses
Research and development (note 6) $ 250,985
License, assignment and option fees (note 7) 148,000
Management fees (note 9) 129,080
General and administrative 76,177

Loss and Comprehensive Loss for the Period $ 604,242

Basic and Diluted Loss Per Share $ 0.18

Weighted Average Number of Common Shares Outstanding 3,423,837

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

4
PATRIOT ONE DETECTION LTD.
(formerly Patriot One Technologies, Inc.)
Statement of Change in Shareholders Deficiency
(Expressed in Canadian Dollars)

Share
subscription Share
Capital stock received in subscription
Number Amount advance receivable Deficit Total

Balance, March 7, 2016 (date of

incorporation) - $ - $ - $ - $ - $ -
Shares issued for cash, net of share
issuance costs 16,325,001 397,625 - - - 397,625
Shares issued for licensing agreement
(notes 5 and 7) 1,560,000 78,000 - - - 78,000
Share subscriptions received in advance - - 298,240 - - 298,240
Share subscriptions receivable - - - (173,375) - (173,375)
Net loss for the period - - - - (604,242) (604,242)

Balance, July 31, 2016 17,885,001 $ 475,625 $ 298,240 $ (173,375) $ (604,242) $ (3,752)

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

5
PATRIOT ONE DETECTION LTD.
(formerly Patriot One Technologies, Inc.)
Statement of Cash Flows
(Expressed in Canadian Dollars)

Period from
incorporation
on March 7,
2016 to
July 31, 2016

Operating Activities
Net loss for period $ (604,242)
Items not involving cash:
License fees (notes 5 and 7) 78,000

Change in working capital balances:

Due from related party (30,166)
Prepaid expenses (101)
Accounts payable and accrued liabilities 221,109

Cash Used in Operating Activities (335,400)

Financing Activity
Shares issued for cash 232,250
Share subscriptions received in advance 298,240
Proceeds from shareholder loans 50,000
Repayment of shareholder loans (50,000)

Cash Provided by Financing Activities 530,490

Inflow of Cash 195,090

Cash, Beginning of Period -

Cash, End of Period $ 195,090

Cash paid during the period for interest $ -

Cash paid during the period for income taxes $ -

Supplementary cash flow information

Non-cash transactions:
Fair value of shares issued for licensing fees $ 78,000
Share issuance costs included in accounts payable and
accrued liabilities 8,000

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

6
PATRIOT ONE DETECTION LTD.
(formerly Patriot One Technologies, Inc.)
Notes to the Financial Statements
For the Period from Incorporation on March 7, 2016 to July 31, 2016
(Expressed in Canadian Dollars)

1. NATURE AND CONTINUANCE OF OPERATIONS

Patriot One Detection Ltd. (the Company), formerly Patriot One Technologies, Inc., was
incorporated in the province of British Columbia on March 7, 2016. The principal business of the
Company is to commercialize a system to detect concealed weapons utilizing radar technologies.
The system is an innovative radar technology providing first responders and security personnel
valuable time in active threat scenarios.

The Companys registered and records office is located at 1000 595 Burrard Street, Vancouver,
British Columbia, Canada, V7X 1S8.

These financial statements have been prepared on a going concern basis in accordance with
International Financial Reporting Standards (IFRS) with the assumption that the Company will
be able to realize its assets and discharge its liabilities in the normal course of business.

At present, the Company has no current operating income. Without additional financing, the
Company may not be able to fund its ongoing operations and complete development activities.
The Company intends to finance its future requirements through a combination of debt and/or
equity issuance. There is no assurance that the Company will be able to obtain such financings or
obtain them on favorable terms. These uncertainties may cast significant doubt on the Companys
ability to continue as a going concern. The Company will need to raise sufficient working capital
to maintain operations. These financial statements do not include any adjustments related to the
recoverability of assets and classification of liabilities that might be necessary should the
Company be unable to continue as a going concern.

2. BASIS OF PRESENTATION

(a) Statement of compliance

These financial statements are prepared in accordance with IFRS, as issued by the
International Accounting Standards Board (IASB). These financial statements have been
prepared on a historical cost basis, except for financial assets and liabilities classified as
financial instruments at fair value through profit or loss (FVTPL), which are stated at fair
value. In addition, these financial statements have been prepared using the accrual basis of
accounting, except for cash flow information.

These financial statements are presented in Canadian dollars, which is the Companys
functional currency.

The significant accounting policies set out in note 3 have been applied consistently to the
period presented.

(b) Approval of the financial statements

These financial statements of the Company were approved by the Board of Directors and
authorized for issue on August 18, 2016.

7
PATRIOT ONE DETECTION LTD.
(formerly Patriot One Technologies, Inc.)
Notes to the Financial Statements
For the Period from Incorporation on March 7, 2016 to July 31, 2016
(Expressed in Canadian Dollars)

2. BASIS OF PRESENTATION (continued)

(c) New accounting pronouncements:

IFRS 9, Financial Instruments (IFRS 9)

The Company will be required to adopt IFRS 9, Financial Instruments, which is the IASBs
replacement of IAS 39, Financial Instruments: Recognition and Measurement. IFRS 9 will
provide new requirements for classification and measurement of financial assets and
liabilities, and impairment. IFRS 9 is required to be applied for years beginning on or after
January 1, 2018, with early adoption permitted. The Company has not yet assessed the
impact of this standard.

The Company is currently evaluating the impact of IFRS 9 on its financial statements and
expects to apply the standard in accordance with its future mandatory effective date. The
extent of the impact of adoption of this pronouncement has not yet been determined.

3. SIGNIFICANT ACCOUNTING POLICIES

(a) Financial instruments

(i) Financial assets

The Company classifies its financial assets in the following categories: held-to-maturity,
FVTPL, loans and receivables, and available-for-sale (AFS). The classification depends
on the purpose for which the financial assets were acquired. Management determines the
classification of financial assets at recognition.

Fair value through profit or loss

Financial assets are classified as FVTPL when the financial asset is held-for-trading or it
is designated as FVTPL. A financial asset is classified as FVTPL when it has been
acquired principally for the purpose of selling in the near future; it is part of an identified
portfolio of financial instruments that the Company manages and has an actual pattern of
short-term profit-taking or if it is a derivative that is not designated and effective as a
hedging instrument. Upon initial recognition, attributable transaction costs are recognized
in profit or loss when incurred. Financial instruments at FVTPL are measured at fair
value, and changes therein are recognized in profit or loss. Cash is included in this
category of financial assets.

Loans and receivables

Loans and receivables are initially recognized at the transaction value and subsequently
carried at amortized cost less impairment losses. The impairment loss on receivables is
based on a review of all outstanding amounts at year-end. Bad debts are written off
during the year in which they are identified. Interest income is recognized by applying the
effective interest rate method. Due from related party is classified as loans and
receivables.

8
PATRIOT ONE DETECTION LTD.
(formerly Patriot One Technologies, Inc.)
Notes to the Financial Statements
For the Period from Incorporation on March 7, 2016 to July 31, 2016
(Expressed in Canadian Dollars)

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

(a) Financial instruments (continued)

(i) Financial assets (continued)

Held-to-maturity
Held-to-maturity financial assets are recognized on a trade-date basis and are initially
measured at fair value using the effective interest rate method. The Company has no
assets classified as held-to-maturity.

Available-for-sale
AFS financial assets are non-derivatives that are either designated as AFS or not
classified in any of the other financial assets categories. Changes in the fair value of AFS
financial assets other than impairment losses are recognized as other comprehensive
income and classified as a component of equity. The Company has no assets classified
as AFS.

(ii) Financial liabilities

The Company classifies its financial liabilities into one of two categories as follows:

Fair value through profit or loss (FVTPL)

This category comprises derivatives and financial liabilities incurred principally for the
purpose of selling or repurchasing in the near term. They are carried at fair value with
changes in fair value recognized in profit or loss.

Borrowings and other financial liabilities

Borrowings and other financial liabilities are non-derivatives and are recognized initially at
fair value, net of transaction costs incurred, and are subsequently stated at amortized
cost. Any difference between the amounts originally received, net of transaction costs,
and the redemption value is recognized in the income statement over the period to
maturity using the effective interest method.

Borrowings and other financial liabilities are classified as current or non-current based on
their maturity date. Financial liabilities include accounts payable and accrued liabilities.

9
PATRIOT ONE DETECTION LTD.
(formerly Patriot One Technologies, Inc.)
Notes to the Financial Statements
For the Period from Incorporation on March 7, 2016 to July 31, 2016
(Expressed in Canadian Dollars)

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

(iii) Fair value hierarchy

Fair value measurements of financial instruments are required to be classified using a fair
value hierarchy that reflects the significance of inputs used in making the measurements.
The levels of the fair value hierarchy are defined as follows:

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or

liabilities.
Level 2 - Inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly or indirectly.
Level 3 - Inputs for assets or liabilities that are not based on observable market
data.

The Companys financial instruments classified as Level 1 in the fair value hierarchy are
cash.

(iv) Impairment of financial assets

The Company assesses, at each reporting date, whether there is objective evidence that
a financial asset or a group of financial assets is impaired. A financial asset or group of
financial assets is deemed to be impaired if, and only if, there is objective evidence of
impairment as a result of one or more events that has occurred after the initial recognition
of the asset and that event has an impact on the estimated future cash flows of the
financial asset or group of financial assets.

(b) Intangible assets

(i) Research and development costs

Expenditure on research activities, undertaken with the prospect of gaining new scientific or
technical knowledge and understanding, is recognized in profit or loss when incurred.

Development activities involve a plan or design for the production of new or substantially
improved products and processes. Development expenditure is capitalized only if
development costs can be measured reliably, the product or process is technically and
commercially feasible, future economic benefits are probable, and the Company has the
intention and sufficient resources to complete development and to use or sell the asset. The
expenditure capitalized in respect of development activities includes the cost of materials,
direct labor and overhead costs that are directly attributable to preparing the asset for its
intended use, and capitalized borrowing costs. Other development expenditure is recognized
in profit or loss as incurred.

In subsequent periods, capitalized development expenditure is measured at cost less

accumulated amortization and accumulated impairment losses.

10
PATRIOT ONE DETECTION LTD.
(formerly Patriot One Technologies, Inc.)
Notes to the Financial Statements
For the Period from Incorporation on March 7, 2016 to July 31, 2016
(Expressed in Canadian Dollars)

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

(b) Intangible assets (continued)

(ii) Subsequent expenditure

Subsequent expenditure is capitalized only when it increases the future economic benefits
embodied in the specific asset to which it relates. All other expenditure, including expenditure
on internally generated goodwill and brands, is recognized in profit or loss as incurred.

(iii) Amortization

Amortization is a systematic allocation of the amortizable amount of an intangible asset over

its useful life. The amortizable amount is the cost of the asset less its estimated residual
value.

Amortization is recognized in profit or loss on a sales-based rate, other than intangible assets
arising from a service concession arrangement that are amortized according to the unit of
production method, over the estimated useful lives of the intangible assets from the date they
are available for use, since these methods most closely reflect the expected pattern of
consumption of the future economic benefits embodied in each asset.

Internally generated intangible assets are not systematically amortized as long as they are
not available for use (i.e. they are not yet on site or in working condition for their intended
use). Accordingly, these intangible assets, such as development costs, are tested for
impairment at least once a year, until such date as they are available for use.

Amortization method is sales based rate, and the Company examines the estimated sales
forecast at the end of each reporting period.

The Company examines the useful life of an intangible asset that is not periodically amortized
at least once a year in order to determine whether events and circumstances continue to
support the decision that the intangible asset has an indefinite useful life.

(c) Loss per share

Basic loss per share is calculated using the weighted average number of common shares
outstanding during the period. The Company uses the treasury stock method to compute the
dilutive effect of options, warrants and similar instruments. Under this method the dilutive
effect on earnings per share is calculated presuming the exercise of outstanding options,
warrants and similar instruments. It assumes that the proceeds of such exercise would be
used to repurchase common shares at the average market price during the period. However,
the calculation of diluted loss per share excludes the effects of various conversions and
exercise of options and warrants that would be anti-dilutive.

Shares held in escrow, other than where their release is subject to the passage of time, are
not included in the calculation of the weighted average number of common shares
outstanding.

11
PATRIOT ONE DETECTION LTD.
(formerly Patriot One Technologies, Inc.)
Notes to the Financial Statements
For the Period from Incorporation on March 7, 2016 to July 31, 2016
(Expressed in Canadian Dollars)

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

(d) Income taxes

Income tax expense comprises current and deferred tax. Current tax and deferred tax are
recognized in profit or loss, except to the extent that it relates to a business combination, or
items recognized directly in equity or in other comprehensive income/loss.

Current income taxes are recognized for the estimated income taxes payable or receivable
on taxable income or loss for the current period and any adjustment to income taxes payable
in respect of previous periods. Current income taxes are determined using tax rates and tax
laws that have been enacted or substantively enacted by the year-end date.

Income tax expense consists of current and deferred tax expense. Income tax expense is
recognized in the statement of operations.

Current tax expense is the expected tax payable on the taxable income for the period using
tax rates enacted or substantively enacted at period-end, adjusted for amendments to tax
payable with regard to previous years.

Deferred tax assets and liabilities are recognized for deferred tax consequences attributable
to differences between the financial statement carrying amounts of existing assets and
liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using
the enacted or substantively enacted tax rates expected to apply when the asset is realized
or the liability settled.

The effect on deferred tax assets and liabilities of a change in tax rates is recognized in profit
or loss in the period that substantive enactment occurs.

A deferred tax asset is recognized to the extent that it is probable that future taxable profits
will be available against which the asset can be utilized. To the extent that the Company does
not consider it probable that a deferred tax asset will be recovered, it provides a valuation
allowance against that excess.

(e) Capital stock

Instruments issued by the Company are classified as equity only to the extent that they do
not meet the definition of a financial liability or financial asset. The Company's common
shares are classified as equity instruments.

Incremental costs directly attributable to the issue of new shares are shown in equity as a
deduction, net of tax, from the proceeds.

Proceeds from unit placements are allocated between shares and warrants using the residual
value method which first allocates value to the more easily measurable component, common
shares, as determined by the closing market price on the date of announcement. The
balance is then allocated to the attached warrants.

12
PATRIOT ONE DETECTION LTD.
(formerly Patriot One Technologies, Inc.)
Notes to the Financial Statements
For the Period from Incorporation on March 7, 2016 to July 31, 2016
(Expressed in Canadian Dollars)

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

(f) Significant accounting judgments, estimates and assumptions

The preparation of these financial statements in conformity with IFRS requires management
to make judgments, estimates and assumptions that affect the reported amount of assets,
liabilities and contingent liabilities at the date of the financial statements, and reported
amounts of revenues and expenses during the reporting period. Estimates and assumptions
are continuously evaluated and are based on managements experience and other factors,
including expectations of future events that are believed to be reasonable under the
circumstances. However, actual outcomes can differ from these estimates.

Significant areas requiring the use of management estimates include:

Deferred income tax assets & liabilities.

The measurement of deferred income tax provision is subject to uncertainty associated with
the timing of future events and changes in legislation, tax rates and interpretations by tax
authorities. The estimation of taxes includes evaluating the recoverability of deferred tax
assets based on an assessment of the Companys ability to utilize the underlying future tax
deductions against future taxable income prior to expiry of those deductions. Management
assesses whether it is probable that some or all of the deferred income tax assets will not be
realized. The ultimate realization of deferred tax assets is dependent upon the generation of
future taxable income, which in turn is dependent upon the successful operations of the
Company. To the extent that managements assessment of the Companys ability to utilize
future tax deductions changes, the Company would be required to recognize more or fewer
deferred tax assets, and deferred tax provisions or recoveries could be affected.

Significant areas requiring the use of managements judgments include:

Treatment of development costs

Costs to develop products are capitalized to the extent that the criteria for recognition as
intangible assets in IAS 38 Intangible Assets are met. Those criteria require that the
product is technically and economically feasible, which management assessed based on
the attributes of the development project, perceived user needs, industry trends and
expected future economic conditions. Management considers these factors in aggregate
and applies significant judgment to determine whether the product is feasible. The
Company has not capitalized any development costs as at July 31, 2016.

13
PATRIOT ONE DETECTION LTD.
(formerly Patriot One Technologies, Inc.)
Notes to the Financial Statements
For the Period from Incorporation on March 7, 2016 to July 31, 2016
(Expressed in Canadian Dollars)

4. RISK MANAGEMENT AND FINANCIAL INSTRUMENTS

The Companys risk exposure and the impact on the Companys financial instruments are
summarized below:

(a) Credit risk

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation
and cause the other party to incur a financial loss. Concentration of credit risk exists with
respect to the Companys cash, as all amounts are held at a single major American financial
institution.

Credit risk is minimized by ensuring that these financial assets are placed with a major
Canadian financial institution with a strong investment-grade rating by a primary ratings
agency and insured with the Canada Deposit Insurance Corporation.

(b) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in satisfying financial
obligations as they become due. The Company manages its liquidity risk by forecasting cash
flows from operations and anticipated investing and financing activities. The Companys
objective in managing liquidity risk is to maintain sufficient readily available reserves in order
to meet its liquidity requirements. At July 31, 2016, the Company had cash of $195,090
available to meet short-term business requirements and current liabilities of $229,109. The
Companys accounts payable and accrued liabilities have contractual maturities of less than
30 days and are subject to normal trade terms.

(c) Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate due to changes in market prices. Market risk comprises three types of risk: interest
rate risk, foreign currency risk and other price risk. The Company is not exposed to significant
market risk.

14
PATRIOT ONE DETECTION LTD.
(formerly Patriot One Technologies, Inc.)
Notes to the Financial Statements
For the Period from Incorporation on March 7, 2016 to July 31, 2016
(Expressed in Canadian Dollars)

5. CAPITAL STOCK

(a) Authorized

Unlimited number of common shares without par value.

(b) Issued and outstanding

On March 7, 2016, the Company issued 1 common share at a price of $0.005 in connection
with the incorporation of the Company.

On April 7, 2016, the Company issued 100,000 common shares at a price of $0.005 per
common share for total proceeds of $500.

On June 9, 2016, the Company issued 9,025,000 common shares at a price of $0.005 per
common share for total proceeds of $45,125.

On July 28, 2016, the Company issued 1,560,000 common shares with a fair value of
$78,000 to McMaster University (McMaster) for licensing fees (note 7).

On July 29, 2016, the Company issued 7,200,000 units at a price of $0.05 per unit for total
proceeds of $360,000. Each unit comprised of one common share and one share purchase
warrant. Each share purchase warrant is exercisable at $0.10 per common share for a period
of two years.

As at July 31, 2016, $173,375 is included in share subscription receivable.

As at July 31, 2016, $8,000 of share issuance costs is included in accounts payable and
accrued liabilities.

During the period from incorporation on March 7, 2016 to July 31, 2016, the Company
received $298,240 for shares which have yet to be issued.

(c) Share purchase warrants

On July 29, 2016, the Company issued 7,200,000 share purchase warrants at an exercise
price of $0.10 for 2 years. The Company has determined the share purchase warrants to
have a residual value of $nil on the date of issuance.

The following summarizes information about the Companys share purchase warrants
outstanding:
Share Weighted
purchase average
warrants exercise price

Balance, March 7, 2016 (date of incorporation) - $ -

Issuance of warrants, expiring on July 29, 2018 7,200,000 0.10

Balance, July 31, 2016 7,200,000 $ 0.10

15
PATRIOT ONE DETECTION LTD.
(formerly Patriot One Technologies, Inc.)
Notes to the Financial Statements
For the Period from Incorporation on March 7, 2016 to July 31, 2016
(Expressed in Canadian Dollars)

6. RESEARCH AND DEVELOPMENT

The following is a breakdown of the material components of research and development

expenses:
Period from
incorporation
on March 7,
2016 to July
31, 2016

Software $ 100,238
Hardware 98,000
Algorithm development 39,187
Management fees 13,560

$ 250,985

7. LICENSING, ASSIGNMENT AND OPTION FEES

On April 29, 2016, the Company entered into an agreement with Bullrun Capital Inc. (Bullrun)
wherein Bullrun agreed to assign to the Company its option (the Option Agreement) to obtain
from McMaster a worldwide exclusive license to use or cause to be used certain radar technology
used to detect concealed weapons (the License Agreement) invented, developed and/or
acquired by McMaster. In consideration for the Option Agreement, the Company agreed to pay a
fee of $60,000 and to grant Bullrun a 2% royalty to be paid on sales of all commercial products
developed under this potential License Agreement between McMaster and the Company. This
royalty payable to Bullrun would be in addition to any royalties to be paid to McMaster by the
Company.

The Company exercised its option and entered into the License Agreement with McMaster. In
consideration for the License Agreement, the Company paid an up-front license fee of $10,000
and issued 1,560,000 common shares with a fair value of $78,000 (note 5). In addition, the
Company agreed to pay a royalty percentage of 3.5% on net sales and from time to time, issue
common shares of the Company to McMaster so that in the aggregate, shares held by McMaster
represent 5% of the Companys issued and outstanding common shares calculated on a fully
diluted basis. Such issuance shall continue until and including the date upon which a total of
$2,000,000 in cash shall be received by the Company in exchange for the Companys capital
stock. Thereafter, no additional shares shall be due to McMaster. As well, the Company agreed to
make minimum annual royalty payments as follows:

first year $2,500;

second year 2,500;
third year 5,000; and
fourth and subsequent years 7,500.

16
PATRIOT ONE DETECTION LTD.
(formerly Patriot One Technologies, Inc.)
Notes to the Financial Statements
For the Period from Incorporation on March 7, 2016 to July 31, 2016
(Expressed in Canadian Dollars)

8. CAPITAL MANAGEMENT

The Company is actively commercializing a system to detect concealed weapons utilizing novel
radar technologies. The Company has not determined whether it will be successful in its
endeavours and does not generate cash flows from operations. The Companys primary source
of funds comes from the issuance of capital stock. The Company does not use other sources of
financing that require fixed payments of interest and principal due to lack of cash flow from
current operations, and is not subject to any externally imposed capital requirements.

The Companys objective when managing capital is to safeguard the Companys ability to
continue as a going concern.

The Company defines its capital as shareholders deficiency. Capital requirements are driven by
the Companys general operations. To effectively manage the Companys capital requirements,
the Company monitors expenses and overhead to ensure costs and commitments are being paid.

There have been no changes to the Companys approach to capital management during the
period from incorporation on March 7, 2016 to July 31, 2016.

Although the Company has been successful at raising funds in the past through the issuance of
capital stock, it is uncertain whether it will continue this financing.

9. RELATED PARTY TRANSACTIONS

Key management personnel include persons having the authority and responsibility for planning,
directing and controlling the activities of the Company as a whole. The Company has determined
that key management personnel consist of executive and non-executive members of the Board of
Directors and corporate officers.

Key management compensation and amounts paid to or accrued for related parties during the
period March 7, 2016 to July 31, 2016 include:
$74,080 relating to management fees paid to officers and directors of the Company or to
companies controlled by officers and directors of the Company;
$60,000 relating to option fees paid to a company controlled by a director of the Company
(note 7); and
$13,560 paid to a company controlled by a director of the Company for research and
development fees.

As at July 31, 2016, $30,166 is receivable from a company controlled by a director of the
Company for expenses paid on behalf of the Company, $18,750 is receivable from directors of
the Company for share subscriptions and $50,000 is receivable from a company controlled by a
director of the Company for share subscriptions.

As at July 31, 2016, accounts payable and accrued liabilities includes $76,600 payable to officers
and directors of the Company and $65,040 payable to companies controlled by officers and
directors of the Company for management fees and expenses paid on behalf of the Company.

As at July 31, 2016, $68,750 is included in share subscriptions receivable for shares issued to
directors and a company controlled by a director.

17
PATRIOT ONE DETECTION LTD.
(formerly Patriot One Technologies, Inc.)
Notes to the Financial Statements
For the Period from Incorporation on March 7, 2016 to July 31, 2016
(Expressed in Canadian Dollars)

10. INCOME TAXES

A reconciliation of income tax expense to the amount computed at the statutory rate is as follows:
2016

Loss before income taxes $ 604,242

26%

Income tax recovery computed at statutory tax rate 157,000

Permanent differences (20,000)
Share issue costs 2,000
Other (2,000)
Unrecognized tax benefit (137,000)

$ -

The significant components of the Companys temporary differences (unused tax credits and
unused tax losses) that have not been included on the statement of financial position are as
follows:
2016 Expiry dates

Non-capital loss carry forward $ 518,000 2036

Share issue costs 6,000 2020

$ 524,000

Tax attributes are subject to review and potential adjustment by tax authorities

11. SUBSEQUENT EVENTS

On August 12, 2016, Clear Mountain Resources Corp. ( Clear Mountain) announced that it has
entered into a non-binding letter of intent (LOI) dated July 28, 2016 with the Company. Clear
Mountain and the Company will enter into a definitive share exchange agreement (the Definitive
Agreement) whereby all outstanding securities of the Company will be exchanged for securities
of Clear Mountain (the Transaction), which constitutes a reverse takeover by the Company.

The final structure of the Definitive Agreement is subject to applicable corporate, securities and
tax considerations. The Transaction is an arms length transaction. On closing of the Transaction,
it is anticipated that Clear Mountain will carry on with the development and launch of the
Companys cognitive microwave radar technology, used for the unobtrusive detection of
concealed weapons. Clear Mountain proposes to continue trading on the TSX Venture Exchange
following the Transaction.

18
 SCHEDULE D

PATRIOT MANAGEMENTS DISCUSSION AND ANALYSIS

Patriot One Detection Ltd.
(formerly Patriot One Technologies, Inc.)
MANAGEMENTS DISCUSSION AND ANALYSIS
For the period from incorporation on March 7, 2016 to July 31, 2016

Dated August 18, 2016

Managements Discussion and Analysis
For the period from incorporation on March 7, 2016 to July 31, 2016
Dated August18, 2016

The following managements discussion and analysis (MD&A) has been prepared by Management. The
following discussion of performance, financial condition and future prospects should be read in
conjunction with the audited annual financial statements of Patriot One Detection Ltd. (formerly Patriot
One Technologies, Inc.) (Patriot One or the Company) and notes thereto. The information provided
herein supplements but does not form part of the financial statements. This discussion covers the period
from incorporation on March 7, 2016 to July 31, 2016 and the subsequent period up to the date of issue
of this MD&A. Unless otherwise noted, all dollar amounts are stated in Canadian dollars.

The Companys financial statements for the period from incorporation on March 7, 2016 to July 31, 2016
have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by
the International Accounting Standards Board (IASB).

For the purposes of preparing this MD&A, management, in conjunction with the Board of Directors,
considers the materiality of information. Information is considered material if: (i) such information results
in, or would reasonably be expected to result in, a significant change in the market price or value of the
Companys common shares; or (ii) there is a substantial likelihood that a reasonable investor would
consider it important in making an investment decision; or (iii) if it would significantly alter the total mix of
information available to investors. Management, in conjunction with the Board of Directors, evaluates
materiality with reference to all relevant circumstances, including potential market sensitivity.

This MD&A is intended to help the reader understand Patriot One, its operations, financial performance,
current and future business environment and opportunities and risks facing the Company. Certain risks
relating to the Company are set out explicitly in Appendix 1 of this MD&A. In addition, certain statements
in this report incorporate forward looking information and readers are advised to review the cautionary
note regarding such statements in Appendix 2 of this MD&A.

Description of Business and Overview

Patriot One was incorporated in the province of British Columbia, on March 7, 2016. The principal
business of the Company is to commercialize a system to detect concealed weapons utilizing radar
technologies. The system is an innovative radar technology providing first responders and security
personnel valuable time in active threat scenarios.

The Company has not commenced commercial operations and has no assets other than cash. At
present, the Company has no current operating income. Without additional financing, the Company may
not be able to fund its ongoing operations and complete development activities. The Company intends to
finance its future requirements through a combination of debt and/or equity issuance. There is no
assurance that the Company will be able to obtain such financings or obtain them on favourable terms.
These uncertainties cast doubt on the Companys ability to continue as a going concern. The Company
will need to raise sufficient working capital to maintain operations.

2
Company Business
Selected Financial Information
The following selected financial data is derived from the financial statements prepared in accordance with
IFRS:
Period from incorporation on
March 7, 2016 to July 31, 2106

Total revenue $0
Net Loss $604,242
Loss per common share, basic and diluted $0.18
Total assets $225,357
Long term debt $0
Dividends paid/payable $0

Results of Operations
During the period from incorporation on March 7, 2016 to July 31, 2016, the Company recorded a net loss
of $604,242 which can be attributed mainly to research and development expenses, license, assignment
and option fees, management fees and general and administrative expenses.

For the period from incorporation on March 7, 2016 to July 31, 2016, the Company incurred research and
development expenses of $250,985. The following is a breakdown of material components of research
and development expenses:

Period from
incorporation
on March 7,
2016 to July 31,
2016

Software $ 100,238
Hardware 98,000
Algorithm development 39,187
Management fees 13,560

$ 250,985

For the period from incorporation on March 7, 2016 to July 31, 2016, the Company incurred license,
assignment and option fees of $148,000.

For the period from incorporation on March 7, 2016 to July 31, 2016, the Company incurred management
fees of $129,080.

For the period from incorporation on March 7, 2016 to July 31, 2016, the Company incurred general and
administrative expenses of $76,177. General and administrative expenses include accounting,
advertising, legal and marketing expenses.

Liquidity and Capital Resources

Liquidity risk is the risk that the Company will encounter difficulty in satisfying financial obligations as they
become due. The Company manages its liquidity risk by forecasting cash flows from operations and
anticipated investing and financing activities. The Companys objective in managing liquidity risk is to
maintain sufficient readily available reserves in order to meet its liquidity requirements.

3
At July 31, 2016 the Company had a working capital deficiency of $3,752 which included cash of
$195,090 available to meet short-term business requirements and liabilities of $229,109. The Companys
accounts payable and accrued liabilities have contractual maturities of less than 30 days and are subject
to normal trade terms. The Company has no long term debt.

At present, the Company has no current operating income. Without additional financing, the Company
may not be able to fund its ongoing operations and complete development activities. The Company
intends to finance its future requirements through a combination of debt and/or equity issuance. There is
no assurance that the Company will be able to obtain such financings or obtain them on favourable terms.
These uncertainties cast significant doubt on the Companys ability to continue as a going concern. The
Company will need to raise sufficient working capital to maintain operations.

Outstanding Share Data

As at July 31, 2016 and the date of this report, the Company had 17,885,001 issued and outstanding
common shares and 7,200,000 warrants outstanding.

Off-Balance Sheet Arrangements

There are no off-balance sheet arrangements.

Contractual Commitments
The Company has entered into a license agreement with McMaster University (McMaster). In
consideration, the Company paid an up-front license fee of $10,000 and issued 1,560,000 common
shares with a fair value of $78,000 to McMaster. In addition, the Company agreed to pay a royalty
percentage of 3.5% on net sales and from time to time, issue common shares of the Company to
McMaster so that in the aggregate, shares held by McMaster represent 5% of the Companys issued and
outstanding common shares calculated on a fully diluted basis. Such issuance shall continue until and
including the date upon which a total of $2,000,000 in cash shall be received by the Company in
exchange for the Companys capital stock. Thereafter, no additional shares shall be due to McMaster. As
well, the Company agreed to make minimum annual royalty payments as follows:

first year $2,500;

second year 2,500;
third year 5,000; and
fourth and subsequent years 7,500.

Transactions with Related Parties

Key management compensation and amounts paid to or accrued for related parties during the period
March 7, 2016 to July 31, 2016 include:
$74,080 relating to management fees paid to officers and directors of the Company or to companies
controlled by officers and directors of the Company;
$60,000 relating to option fees paid to a company controlled by a director of the Company (note 7);
and
$13,560 paid to a company controlled by a director of the Company for research and development
fees.

As at July 31, 2016, $30,166 is receivable from a company controlled by a director of the Company for
expenses paid on behalf of the Company, $18,750 is receivable from directors of the Company for share
subscriptions and $50,000 is receivable from a company controlled by a director of the Company for
share subscriptions.

As at July 31, 2016, accounts payable and accrued liabilities includes $76,600 payable to officers and
directors of the Company and $65,040 payable to companies controlled by officers and directors of the
Company for management fees and expenses paid on behalf of the Company.

4
As at July 31, 2016, $68,750 is included in share subscriptions receivable for shares issued to directors
and a company controlled by a director.

Critical Accounting Estimates

The preparation of financial statements in conformity with IFRS requires management to make
judgments, estimates and assumptions that affect the reported amount of assets, liabilities and contingent
liabilities at the date of the financial statements, and reported amounts of revenues and expenses during
the reporting period. Estimates and assumptions are continuously evaluated and are based on
managements experience and other factors, including expectations of future events that are believed to
be reasonable under the circumstances. However, actual outcomes can differ from these estimates.

Significant areas requiring the use of management estimates include:

Deferred income tax assets & liabilities.

The measurement of deferred income tax provision is subject to uncertainty associated with the timing of
future events and changes in legislation, tax rates and interpretations by tax authorities. The estimation of
taxes includes evaluating the recoverability of deferred tax assets based on an assessment of the
Companys ability to utilize the underlying future tax deductions against future taxable income prior to
expiry of those deductions. Management assesses whether it is probable that some or all of the deferred
income tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon
the generation of future taxable income, which in turn is dependent upon the successful operations of the
Company. To the extent that managements assessment of the Companys ability to utilize future tax
deductions changes, the Company would be required to recognize more or fewer deferred tax assets,
and deferred tax provisions or recoveries could be affected.

Significant areas requiring the use of managements judgments include:

Treatment of development costs

Costs to develop products are capitalized to the extent that the criteria for recognition as intangible assets
in IAS 38 Intangible Assets are met. Those criteria require that the product is technically and
economically feasible, which management assessed based on the attributes of the development project,
perceived user needs, industry trends and expected future economic conditions. Management considers
these factors in aggregate and applies significant judgment to determine whether the product is feasible.
The Company has not capitalized any development costs as at July 31, 2016.

Accounting Policies
The following are the Companys significant accounting policies and have been applied consistently to the
period presented:

(a) Financial instruments

(i) Financial assets

The Company classifies its financial assets in the following categories: held-to-maturity, FVTPL,
loans and receivables, and available-for-sale (AFS). The classification depends on the purpose
for which the financial assets were acquired. Management determines the classification of
financial assets at recognition.

Fair value through profit or loss

Financial assets are classified as FVTPL when the financial asset is held-for-trading or it is
designated as FVTPL. A financial asset is classified as FVTPL when it has been acquired
principally for the purpose of selling in the near future; it is part of an identified portfolio of
financial instruments that the Company manages and has an actual pattern of short-term profit-
taking or if it is a derivative that is not designated and effective as a hedging instrument. Upon
initial recognition, attributable transaction costs are recognized in profit or loss when incurred.

5
 Financial instruments at FVTPL are measured at fair value, and changes therein are recognized
in profit or loss. Cash is included in this category of financial assets.

Loans and receivables

Loans and receivables are initially recognized at the transaction value and subsequently carried
at amortized cost less impairment losses. The impairment loss on receivables is based on a
review of all outstanding amounts at year-end. Bad debts are written off during the year in which
they are identified. Interest income is recognized by applying the effective interest rate method.
Due from related party is classified as loans and receivables.

Held-to-maturity
Held-to-maturity financial assets are recognized on a trade-date basis and are initially measured
at fair value using the effective interest rate method. The Company has no assets classified as
held-to-maturity.

Available-for-sale (AFS)
AFS financial assets are non-derivatives that are either designated as AFS or not classified in any
of the other financial assets categories. Changes in the fair value of AFS financial assets other
than impairment losses are recognized as other comprehensive income and classified as a
component of equity. The Company has no assets classified as AFS.

(ii) Financial liabilities

The Company classifies its financial liabilities into one of two categories as follows:

Fair value through profit or loss (FVTPL)

This category comprises derivatives and financial liabilities incurred principally for the purpose of
selling or repurchasing in the near term. They are carried at fair value with changes in fair value
recognized in profit or loss.

Borrowings and other financial liabilities

Borrowings and other financial liabilities are non-derivatives and are recognized initially at fair
value, net of transaction costs incurred, and are subsequently stated at amortized cost. Any
difference between the amounts originally received, net of transaction costs, and the redemption
value is recognized in the income statement over the period to maturity using the effective
interest method.

Borrowings and other financial liabilities are classified as current or non-current based on their
maturity date. Financial liabilities include accounts payable and accrued liabilities.

(iii) Fair value hierarchy

Fair value measurements of financial instruments are required to be classified using a fair value
hierarchy that reflects the significance of inputs used in making the measurements. The levels of
the fair value hierarchy are defined as follows:

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the
asset or liability, either directly or indirectly.
Level 3 - Inputs for assets or liabilities that are not based on observable market data.

The Companys financial instruments classified as Level 1 in the fair value hierarchy are cash.

(iv) Impairment of financial assets

The Company assesses, at each reporting date, whether there is objective evidence that a
financial asset or a group of financial assets is impaired. A financial asset or group of financial
assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a
result of one or more events that has occurred after the initial recognition of the asset and that

6
 event has an impact on the estimated future cash flows of the financial asset or group of financial
assets.

(b) Intangible assets

(i) Research and development costs

Expenditure on research activities, undertaken with the prospect of gaining new scientific or
technical knowledge and understanding, is recognized in profit or loss when incurred.
Development activities involve a plan or design for the production of new or substantially
improved products and processes. Development expenditure is capitalized only if development
costs can be measured reliably, the product or process is technically and commercially feasible,
future economic benefits are probable, and the Company has the intention and sufficient
resources to complete development and to use or sell the asset. The expenditure capitalized in
respect of development activities includes the cost of materials, direct labor and overhead costs
that are directly attributable to preparing the asset for its intended use, and capitalized borrowing
costs. Other development expenditure is recognized in profit or loss as incurred.

In subsequent periods, capitalized development expenditure is measured at cost less

accumulated amortization and accumulated impairment losses.

(ii) Subsequent expenditure

Subsequent expenditure is capitalized only when it increases the future economic benefits
embodied in the specific asset to which it relates. All other expenditure, including expenditure on
internally generated goodwill and brands, is recognized in profit or loss as incurred.

(iii) Amortization
Amortization is a systematic allocation of the amortizable amount of an intangible asset over its
useful life. The amortizable amount is the cost of the asset less its estimated residual value.

Amortization is recognized in profit or loss on a sales-based rate, other than intangible assets
arising from a service concession arrangement that are amortized according to the unit of
production method, over the estimated useful lives of the intangible assets from the date they are
available for use, since these methods most closely reflect the expected pattern of consumption
of the future economic benefits embodied in each asset.

Internally generated intangible assets are not systematically amortized as long as they are not
available for use (i.e. they are not yet on site or in working condition for their intended use).
Accordingly, these intangible assets, such as development costs, are tested for impairment at
least once a year, until such date as they are available for use.

Amortization method is sales based rate, and the Company examines the estimated sales
forecast at the end of each reporting period.

The Company examines the useful life of an intangible asset that is not periodically amortized at
least once a year in order to determine whether events and circumstances continue to support
the decision that the intangible asset has an indefinite useful life.

(c) Loss per share

Basic loss per share is calculated using the weighted average number of common shares outstanding
during the period. The Company uses the treasury stock method to compute the dilutive effect of
options, warrants and similar instruments. Under this method the dilutive effect on earnings per share
is calculated presuming the exercise of outstanding options, warrants and similar instruments. It
assumes that the proceeds of such exercise would be used to repurchase common shares at the
average market price during the period. However, the calculation of diluted loss per share excludes
the effects of various conversions and exercise of options and warrants that would be anti-dilutive.

7
 Shares held in escrow, other than where their release is subject to the passage of time, are not
included in the calculation of the weighted average number of common shares outstanding.

(d) Income taxes

Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognized
in profit or loss, except to the extent that it relates to a business combination, or items recognized
directly in equity or in other comprehensive income/loss.

Current income taxes are recognized for the estimated income taxes payable or receivable on taxable
income or loss for the current period and any adjustment to income taxes payable in respect of
previous periods. Current income taxes are determined using tax rates and tax laws that have been
enacted or substantively enacted by the year-end date.

Income tax expense consists of current and deferred tax expense. Income tax expense is recognized
in the statement of operations.

Current tax expense is the expected tax payable on the taxable income for the period using tax rates
enacted or substantively enacted at period-end, adjusted for amendments to tax payable with regard
to previous years.

Deferred tax assets and liabilities are recognized for deferred tax consequences attributable to
differences between the financial statement carrying amounts of existing assets and liabilities and
their respective tax basis. Deferred tax assets and liabilities are measured using the enacted or
substantively enacted tax rates expected to apply when the asset is realized or the liability settled.

The effect on deferred tax assets and liabilities of a change in tax rates is recognized in profit or loss
in the period that substantive enactment occurs.

A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be
available against which the asset can be utilized. To the extent that the Company does not consider it
probable that a deferred tax asset will be recovered, it provides a valuation allowance against that
excess.

(e) Capital stock

Instruments issued by the Company are classified as equity only to the extent that they do not meet
the definition of a financial liability or financial asset. The Company's common shares are classified as
equity instruments.

Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction,
net of tax, from the proceeds.

Proceeds from unit placements are allocated between shares and warrants using the residual value
method which first allocates value to the more easily measurable component, common shares, as
determined by the closing market price on the date of announcement. The balance is then allocated
to the attached warrants.

8
Financial Instruments
The Companys financial instruments as at July 31, 2016 include cash, due from related party and
accounts payable and accrued liabilities.

The Companys financial assets and financial liabilities are classified and measured as follows:
Financial instrument Category

Cash Loans and receivables

Due from related party Loans and receivables
Accounts payable and accrued liabilities Other financial liabilities

The carrying values of financial assets and liabilities approximate their fair values due to the short-term
maturity of these financial instruments.

The Companys risk exposure and the impact on the Companys financial instruments are summarized
below:

(a) Credit risk

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and
cause the other party to incur a financial loss. Concentration of credit risk exists with respect to the
Companys cash, as all amounts are held at a single major Canadian financial institution.

Credit risk is minimized by ensuring that these financial assets are placed with a major American
financial institution with a strong investment-grade rating by a primary ratings agency and insured
with the Federal Deposit Insurance Corporation.

(b) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in satisfying financial obligations as
they become due. The Company manages its liquidity risk by forecasting cash flows from operations
and anticipated investing and financing activities. The Companys objective in managing liquidity risk
is to maintain sufficient readily available reserves in order to meet its liquidity requirements. At July
31, 2015, the Company had cash of $195,090 available to meet short-term business requirements
and current liabilities of $229,109. The Companys accounts payable and accrued liabilities have
contractual maturities of less than 30 days and are subject to normal trade terms.

(c) Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due
to changes in market prices. Market risk comprises three types of risk: interest rate risk, foreign
currency risk and other price risk. The Company is not exposed to significant market risk.

Managements responsibility for financial statements

The information provided in this report, including the financial statements is the responsibility of
Management. In the preparation of these statements, estimates are sometimes necessary to make a
determination of future values for certain assets or liabilities. Management believes such estimates have
been based on careful judgements and have been properly reflected in the accompanying financial
statements.

August 18, 2016

On behalf of Management and the Board of Directors,

Martin Cronin
Chief Executive Officer and Director

9
 APPENDIX 1

RISKS RELATED TO THE BUSINESS

Limited Operating History

The Company has no history of earnings. The Company has no present prospect of generating revenue
from the sale of products. The Company is therefore subject to many of the risks common to early-
stage enterprises, including under-capitalization, cash shortages, limitations with respect to personnel,
financial, and other resources and lack of revenues. There is no assurance that the Company will be
successful in achieving a return on shareholders investment and the likelihood of success must be
considered in light of the early stage of operations.

Negative Cash Flow for the Foreseeable Future

The Company has a no history of earnings or cashflow from operations. The Company does not expect to
generate material revenue or achieve self-sustaining operations for several years, if at all. To the extent
that the Company has negative cash flow in future periods, the Company may need to allocate a portion
of its cash reserves to fund such negative cash flow.

Reliance on Management
The success of the Company is dependent upon the ability, expertise, judgment, discretion and good
faith of its senior management. While employment agreements are customarily used as a primary
method of retaining the services of key employees, these agreements cannot assure the continued
services of such employees. Any loss of the services of such individuals could have a material adverse
effect on the Companys business, operating results or financial condition.

Reliance on successful development of prototype of Cognitive Microwave Radar (CRM-1)

The Companys ability to generate future revenue or achieve profitable operations is largely dependent on
the ability to attract the experienced management and know-how to develop new devices and to partner
with larger, more established companies in the industry to successfully commercialize products.
Successfully developing a prototype of CRM-1 into a marketable device may take several years and
significant financial resources, and the Company may not achieve those objectives.

In order to commercialize any product the Company will need to conduct trials, which may not succeed,
and to obtain regulatory approvals which it may fail to do. CMR-1 may need to comply with regulatory
compliance requirements prescribed for users of Walk-Through Metal Detectors (WTMDs) although this
isnt certain presently. There are a number of standards set for commercial users of WTMDs. Like several
other electronic devices, WTMDs must meet certain environmental standards, Federal Communications
Commission (FCC) compatibility regulations, and electrical safety requirements. Furthermore, any
detection equipment that is deployed for use at airports must comply with guidelines prescribed by the
Transportation Security Administration (TSA), Federal Aviation Administration (FAA), and related
international standards, regulations, and test certifications.

The Company does not know and is unable to predict what type and how many trials the FCC, TSA and
FAA will require the Company to conduct before granting approval for it to market its products. The
development programs may not lead to a commercial product, either because failure to demonstrate that
product candidates are safe and effective in trials and cannot obtain necessary approvals from the FCC,
TSA, FAA and/or similar foreign regulatory agencies or because of inadequate financial or other
resources to advance product candidates through the trial process for successful commercialization.

Additional Financing Needs

The Company will require equity and/or debt financing to support on-going operations, to undertake capital
expenditures or to undertake acquisitions or other business combination transactions. There can be no
assurance that additional financing will be available to the Company when needed or on terms which are
acceptable. The Companys inability to raise financing to fund capital expenditures or acquisitions could
limit its growth and may have a material adverse effect upon future profitability.

10
If additional funds are raised through further issuances of equity or convertible debt securities, existing
shareholders could suffer significant dilution, and any new equity securities issued could have rights,
preferences and privileges superior to those of holders of Company Shares. Any debt financing
secured in the future could involve restrictive covenants relating to capital raising activities and other
financial and operational matters, which may make it more difficult for the Company to obtain
additional capital and to pursue business opportunities, including potential acquisitions.

Because of the early stage of the industry in which the Company will operate, the Company expects to
face additional competition from new entrants. To become and remain competitive, the Company will
require research and development, marketing, sales and client support. The Company may not have
sufficient resources to maintain research and development, marketing, sales and client support efforts
on a competitive basis which could materially and adversely affect the business, financial condition and
results of operations of the Company.

Difficulty to Forecast
The Company must rely largely on its own market research to forecast sales as detailed forecasts
are not generally obtainable from other sources at this early stage of the industry. A failure in the
demand for its products to materialize as a result of competition, technological change or other factors
could have a material adverse effect on the business, results of operations and financial condition of the
Company.

Conflicts of Interest
Certain of the directors and officers of the Company are, or may become directors and officers of other
companies, and conflicts of interest may arise between their duties as officers and directors of the
Company and as officers and directors of such other companies.

Litigation
The Company may become party to litigation from time to time in the ordinary course of business
which could adversely affect its business. Should any litigation in which the Company becomes
involved be determined against the Company such a decision could adversely affect the Company s
ability to continue operating and the market price for the Companys common shares. Even if the
Company is involved in litigation and wins, litigation can redirect significant company resources.

Commercial success of the Company will depend in part on not infringing upon the patents and
proprietary rights of other parties and enforcing its own patents and proprietary rights against others. The
research and development programs will be in highly competitive fields in which numerous third parties
have issued patents and pending patent applications with claims closely related to the subject matter of
the Companys programs. The Company is not currently aware of any litigation or other proceedings or
claims by third parties that its technologies or methods infringe on their intellectual property.

While it is the practice of the Company to undertake pre-filing searches and analyses of developing
technologies, it cannot guarantee that it has identified every patent or patent application that may be
relevant to the research, development, or commercialization of its products. Moreover, it cannot assure
that third parties will not assert valid, erroneous, or frivolous patent infringement claims.

Uninsurable Risks
The business of the Company may not be insurable or the insurance may not be purchased due to high
cost. Should such liabilities arise, they could reduce or eliminate any future profitability and result in
increasing costs and a decline in the value of the Company.

The market price of the Companys Common Shares may be subject to wide price fluctuations
The market price of the Companys common shares may be subject to wide fluctuations in response
to many factors, including variations in the operating results of the Company and its subsidiaries,
divergence in financial results from analysts expectations, changes in earnings estimates by stock
market analysts, changes in the business prospects for the Company and its subsidiaries, general
economic conditions, legislative changes, and other events and factors outside of the Companys control.

11
In addition, stock markets have from time to time experienced extreme price and volume fluctuations,
which, as well as general economic and political conditions, could adversely affect the market price for
the Companys common shares.

Dividends
The Company has no earnings or dividend record, and does not anticipate paying any dividends on the
common shares in the foreseeable future. Dividends paid by the Company would be subject to tax and,
potentially, withholdings.

Limited Market for Securities

It is proposed that the Companys common shares will be listed on the TSX Venture Exchange,
however, there can be no assurance that such listing will be obtained and even if obtained, that an
active and liquid market for the common shares will develop or be maintained and an investor may find
it difficult to resell any securities of the Company.

Regulatory Changes
The business of the Company is subject to rapid regulatory changes. Failure to keep up with such
changes may adversely affect the business of the Company.

The Companys prospects must be considered in light of the risks, expenses, shifts, changes and
difficulties frequently encountered with companies whose businesses are regulated by various federal,
state and local governments. Active threat detection technology and similar companies are subject to a
variety of regulatory requirements and the regulatory environment is ever changing particularly with
recent legislation, the full impact of which is not yet understood as regulations have not been issued.
Failure to follow regulatory requirements will have a detrimental impact on the business. Changes in
legislation cannot be predicted and could irreparably harm the business.

Permits and Licenses

The operations of the Company may require licenses and permits from various governmental authorities.
There can be no assurance that such licenses and permits will be granted.

Intellectual Property Rights

The Company could be adversely affected if it does not adequately protect its intellectual property rights.
The Company regards its marks, rights, and trade secrets and other intellectual property rights as critical
to its success. To protect its investments and the Companys rights in these various intellectual
properties, it may rely on a combination of patents, trademark and copyright law, trade secret protection
and confidentiality agreements and other contractual arrangements with its employees, clients, strategic
partners, acquisition targets and others to protect proprietary rights. There can be no assurance that the
steps taken by the Company to protect proprietary rights will be adequate or that third parties will not
infringe or misappropriate the Companys copyrights, trademarks and similar proprietary rights, or that the
Company will be able to detect unauthorized use and take appropriate steps to enforce rights. In addition,
although the Company believes that its proprietary rights do not infringe on the intellectual property rights
of others, there can be no assurance that other parties will not assert infringement claims against the
Company. Such claims, even if not meritorious, could result in the expenditure of significant financial and
managerial resources.

The Company will rely on trade secrets to protect technology where it does not believe patent protection
is appropriate or obtainable. Trade secrets are difficult to protect. While commercially reasonable efforts
to protect trade secrets will be used, strategic partners, employees, consultants, contractors or scientific
and other advisors may unintentionally or willfully disclose information to competitors.

If the Company is not able to defend patents or trade secrets, then it will not be able to exclude
competitors from developing or marketing competing products, and the Company may not generate
enough revenue from product sales to justify the cost of development of products and to achieve or
maintain profitability.

12
Low Barriers to Entry and Competition
There is high potential that the Company will face intense competition from other companies, some of
which can be expected to have longer operating histories and more financial resources and
manufacturing and marketing experience than the Company. Increased competition by larger and better
financed competitors could materially and adversely affect the business, financial condition and results
of operations of the Company. Competitive pressures created by any one of the Companys competitors
could have a material adverse effect on the Companys business, results of operations and financial
condition.

New technologies and the expansion of existing technologies may increase the competitive pressures on
the Company by enabling the Companys competitors to offer a lower-cost product.

Risks Associated with Brand Development

The Company believes that continuing to strengthen its brand is critical to achieving widespread
acceptance of the Company, particularly in light of the competitive nature of the Companys market.
Promoting and positioning its brand will depend largely on the success of the Companys marketing
efforts and the ability of the Company to provide high quality services. In order to promote its brand, the
Company will need to increase its marketing budget and otherwise increase its financial commitment to
creating and maintaining brand loyalty among users. There can be no assurance that brand promotion
activities will yield increased revenues or that any such revenues would offset the expenses incurred by
the Company in building its brand. If the Company fails to promote and maintain its brand or incurs
substantial expenses in an attempt to promote and maintain its brand or if the Companys existing or
future strategic relationships fail to promote the Companys brand or increase brand awareness, the
Companys business, results of operations and financial condition would be materially adversely affected.

Rapid Technological Change

The business of the Company is subject to rapid technological changes. Failure to keep up with such
changes may adversely affect the business of the Company. The Company is subject to the risks of
companies operating in the active threat detection business.

The market in which the Company competes is characterized by rapidly changing technology, evolving
industry standards, frequent new service and product announcements, introductions and enhancements
and changing customer demands. As a result, an investment in the stocks of the Company is highly
speculative and is only suitable for investors who recognize the high risks involved and can afford a total
loss of investment.

Risks Associated with Acquisitions

If appropriate opportunities present themselves, the Company intends to acquire businesses,
technologies, services or products that the Company believes are strategic. The Company currently has
no understandings, commitments or agreements with respect to any other material acquisition and no
other material acquisition is currently being pursued. There can be no assurance that the Company will
be able to identify, negotiate or finance future acquisitions successfully, or to integrate such acquisitions
with its current business. The process of integrating an acquired business, technology, service or product
into the Company may result in unforeseen operating difficulties and expenditures and may absorb
significant management attention that would otherwise be available for ongoing development of the
Companys business. Future acquisitions could result in potentially dilutive issuances of equity securities,
the incurrence of debt, contingent liabilities and/or amortization expenses related to goodwill and other
intangible assets, which could materially adversely affect the Companys business, results of operations
and financial condition. Any such future acquisitions of other businesses, technologies, services or
products might require the Company to obtain additional equity or debt financing, which might not be
available on terms favourable to the Company, or at all, and such financing, if available, might be dilutive.

Risks Associated with International Operations

A component of the Companys strategy is to expand internationally. Expansion into the international
markets will require management attention and resources. The Company has limited experience in
localizing its service, and the Company believes that many of its competitors are also undertaking

13
expansion into foreign markets. There can be no assurance that the Company will be successful in
expanding into international markets. In addition to the uncertainty regarding the Companys ability to
generate revenues from foreign operations and expand its international presence, there are certain risks
inherent in doing business on an international basis, including, among others, regulatory requirements,
legal uncertainty regarding liability, tariffs, and other trade barriers, difficulties in staffing and managing
foreign operations, longer payment cycles, different accounting practices, problems in collecting accounts
receivable, political instability, seasonal reductions in business activity and potentially adverse tax
consequences, any of which could adversely affect the success of the Company s international
operations. To the extent the Company expands its international operations and has additional portions of
its international revenues denominated in foreign currencies, the Company could become subject to
increased risks relating to foreign currency exchange rate fluctuations. There can be no assurance that
one or more of the factors discussed above will not have a material adverse effect on the Companys
future international operations and, consequently, on the Companys business, results of operations and
financial condition.

Protection and Enforcement of Intellectual Property Rights

The Company regards the protection of its copyrights, service marks, trademarks, trade dress and trade
secrets as critical to its future success and relies on a combination of copyright, trademark, service mark
and trade secret laws and contractual restrictions to establish and protect its proprietary rights in products
and services. The Company has entered into confidentiality and invention assignment agreements with
its employees and contractors, and nondisclosure agreements with parties with which it conducts
business in order to limit access to and disclosure of its proprietary information. There can be no
assurance that these contractual arrangements or the other steps taken by the Company to protect its
intellectual property will prove sufficient to prevent misappropriation of the Companys technology or to
deter independent third-party development of similar technologies.

To date, the Company has not been notified that its technologies infringe the proprietary rights of third
parties, but there can be no assurance that third parties will not claim infringement by the Company with
respect to past, current or future technologies. The Company expects that participants in its markets will
be increasingly subject to infringement claims as the number of services and competitors in the
Companys industry segment grows. Any such claim, whether meritorious or not, could be time-
consuming, result in costly litigation, cause service upgrade delays or require the Company to enter into
royalty or licensing agreements. Such royalty or licensing agreements might not be available on terms
acceptable to the Company or at all. As a result, any such claim could have a material adverse effect
upon the Companys business, results of operations and financial condition.

Economic Environment
The Companys operations could be affected by the economic context should the unemployment level,
interest rates or inflation reach levels that influence consumer trends and consequently, impact the
Companys future sales and profitability.

Global Economy Risk

The ongoing economic slowdown and downturn of global capital markets has generally made the raising
of capital by equity or debt financing more difficult. Access to financing has been negatively impacted by
the ongoing global economic risks. As such, the Company is subject to liquidity risks in meeting its
development and future operating cost requirements in instances where cash positions are unable to be
maintained or appropriate financing is unavailable. These factors may impact the Companys ability to
raise equity or obtain loans and other credit facilities in the future and on terms favourable to the
Company. If uncertain market conditions persist, the Companys ability to raise capital could be
jeopardized, which could have an adverse impact on the Companys operations and the trading price of
the Companys Shares on the stock exchange.

Going-Concern Risk
The financial statements have been prepared on a going concern basis under which an entity is
considered to be able to realize its assets and satisfy its liabilities in the ordinary course of business. The
Companys future operations are dependent upon the identification and successful completion of equity

14
or debt financing and the achievement of profitable operations at an indeterminate time in the future.
There can be no assurances that the Company will be successful in completing an equity or debt
financing or in achieving profitability.

The financial statements do not give effect to any adjustments relating to the carrying values and
classification of assets and liabilities that would be necessary should the Company be unable to continue
as a going concern.

Financial Risk Exposures

The Company may have financial risk exposure to varying degrees relating to the currency of each of the
countries where it operates and has financial risk exposure towards digital currencies. The level of the
financial risk exposure related to a currency and exchange rate fluctuations will depend on the
Companys ability to hedge such risk or use another protection mechanism.

Reliance on Third Parties (McMaster University, Kyiv Polytechnic Institute (KPI), Macadamian
Software and SensSoft)
If the third parties which the Company relies on do not properly and successfully carry out their
obligations to the Company, it may not be able to develop, obtain regulatory approval for, or
commercialize its product candidates.

Attracting and keeping senior management and key scientific personnel

The success of the Company depends on the continued ability to attract, retain, and motivate highly
qualified management, clinical, and scientific personnel and to develop and maintain important
relationships with leading academic institutions, companies, and thought leaders.

15
 APPENDIX 2

Cautionary Note Regarding Forward-Looking Statements

Certain statements in this MD&A that are not based on historical facts constitute forward-looking
information, as defined in securities laws. Forward-looking information is not a promise or guarantee of
future performance but is only a prediction that relates to future events, conditions or circumstances or
the Companys future results, performance, achievements or developments and is subject to substantial
known and unknown risks, assumptions, uncertainties and other factors that could cause the Companys
actual results, performance, achievements or developments in its business or industry to differ materially
from those expressed, anticipated or implied by such forward-looking information. Forward-looking
statements in this MD&A include all disclosure regarding possible events, conditions, circumstances or
results of operations that are based on assumptions about future economic conditions, courses of action
and other future events. Readers are cautioned not to place undue reliance upon any such forward-
looking statements, which speak only as of the date they are made. These forward-looking statements
appear in a number of different places in this MD&A and can be identified by words such as may,
estimates, projects, expects, intends, believes, plans, anticipates, continue, growing,
expanding, or their negatives or other comparable words. Forward-looking statements include
statements regarding the outlook for the Companys future operations, plans and timing for the
introduction or enhancement of its services and products, statements concerning strategies or
developments, statements about future market conditions, supply conditions, end customer demand
conditions, channel inventory and sell through, revenue, gross margin, operating expenses, profits,
forecasts of future costs and expenditures, and other expectations, intentions and plans that are not
historical fact. The forward looking statements in this MD&A are based on certain factors and
assumptions regarding expected growth, results of operations, performance and business prospects and
opportunities. Specifically, management has assumed that the Companys performance will meet
managements internal projections. While management considers these assumptions to be reasonable
based on information currently available to it, they may prove to be incorrect. The risk factors and
uncertainties that may affect the Companys actual results, performance, achievements or developments
are many and include the matters described in Appendix 1. Consequently, all forward-looking statements
in this report are qualified by this cautionary statement and the Company cannot assure investors that
actual results, performance, achievements or developments that the Company anticipates will be
realized. Forward-looking statements are based on managements current plans, estimates, projections,
beliefs and opinions and the Company does not undertake any obligation to update forward-looking
statements should the assumptions related to these plans, estimates, projections, beliefs and opinions
change, except as required by law.

16
 SCHEDULE E

PRO FORMA FINANCIAL STATEMENTS OF RESULTING ISSUER

PATRIOT ONE TECHNOLOGIES, INC.
(formerly Clear Mountain Resources Corp.)

Pro Forma Consolidated Financial Statements

August 31, 2016
(Expressed in Canadian dollars)

(Unaudited)
PATRIOT ONE TECHNOLOGIES, INC.
(formerly Clear Mountain Resources Corp.)
Pro Forma Consolidated Statement of Financial Position
As at August 31, 2016
(Expressed in Canadian dollars)
(Unaudited)
Patriot One
Patriot One Technologies,
Detection Ltd. Inc. Pro forma Note Pro forma
(Patriot) (the Issuer) adjustments 3 balance
Assets

Current
Cash $ 195,090 $ 1,718 $ 2,300,000 d $ 3,643,557
(100,000) d
702,875 e
462,999 f
80,875 g
Receivables - 1,624 - 1,624
Due from related party 30,166 - - 30,166
Prepaid expenses 101 5,283 - 5,384
225,357 8,625 3,446,749 3,680,731

Equipment - 885 885

$ 225,357 $ 9,510 $ 3,446,749 $ 3,681,616

Liabilities

Current
Accounts payable and
accrued liabilities $ 229,109 $ 540,766 $ - $ 769,875

Shareholders Deficiency
Share capital 475,625 2,518,153 (1,601,696) c 5,066,196
2,300,000 d
(100,000) d
712,875 e
761,239 f

Share subscription received in

advance 298,240 10,000 (10,000) e -
(298,240) f
Share subscription receivable (173,375) 80,875 g (92,500)
Reserves - 193,377 (193,377) c -
Deficit (604,242) (3,252,786) 3,252,786 c (2,061,955)
(1,457,713) c
(3,752) (531,256) 3,446,749 2,911,741

$ 225,357 $ 9,510 $ 3,446,749 $ 3,681,616

The accompanying notes are an integral part of this pro forma consolidated financial statement.

2
PATRIOT ONE TECHNOLOGIES, INC.
(formerly Clear Mountain Resources Corp.)
Notes to the Pro Forma Consolidated Statement of Financial Position
August 31, 2016
(Expressed in Canadian dollars)
(Unaudited)

1. Basis of Presentation and Preparation

Patriot One Technologies, Inc. (formerly Clear Mountain Resources Corp.) (the Issuer), was
incorporated under the Business Corporations Act of British Columbia (BCBCA), on May 11,
2010. On May 10, 2012, the Issuer completed its initial public offering and its common shares
began trading on the TSX Venture Exchange Inc. (the Exchange) on May 15, 2012 under the
symbol CY. The Issuer changed its name to Patriot One Technologies Inc., and changed its
trading symbol to PAT on August 24, 2016. The Issuer was formerly engaged in the acquisition
and exploration of natural resource properties and has ceased all resource acquisition and
exploration activity in preparation for the Transaction which means, collectively, the Acquisition
and the Private Placement as defined below.

Patriot One Detection Ltd. (Patriot) was incorporated under the BCBCA on March 7, 2016 under
the name Patriot One Technologies Inc.. Patriot changed its name to Patriot One Detection
Ltd. on August 15, 2016. The principal activities of Patriot are the development and
commercialization of a cognitive microwave radar technology proposed to be used for the
detection of concealed weapons.

On September 14, 2016, the Issuer, Patriot and the securityholders of Patriot completed a
securities exchange agreement (the Acquisition Agreement) wherein the terms and conditions
of the acquisition by the Issuer of all of the issued and outstanding securities of Patriot pursuant
to the Acquisition Agreement (the Acquisition) are set forth.

In connection with the Transaction, the Issuer intends to complete a non-brokered private
placement for the sale of up to 15,333,333 units at an issue price of $0.15 per unit, for aggregate
gross proceeds of up to $2,300,000 (the Private Placement). Each unit is comprised of one
common share of the Issuer (Issuer Common Share) and one Issuer Common Share purchase
warrant (a Unit) entitling the holder to acquire one Issuer Common Share at a price of $0.30 for
a period of two years.

The unaudited pro-forma consolidated statement of financial position as at August 31, 2016 gives
effect to the Transaction as if it had occurred as at August 31, 2016 and has been prepared by
management for inclusion in the Issuers filing statement (the Filing Statement) dated October
October 27, 2016.

An unaudited pro-forma consolidated statement of loss has not been prepared on the basis that
the Issuer has ceased all operations other than pursuing the Transaction and a pro-forma
consolidated statement of loss would be the same as that prepared by Patriot in its separate
financial statements included elsewhere in the Filing Statement.

The unaudited pro forma consolidated statement of financial position has been prepared for
illustrative purposes only and may not be indicative of the combined entities financial position
that would have occurred if the acquisition had been in effect at the date indicated. Actual
amounts recorded upon consummation of the agreement will likely differ from those recorded in
the unaudited pro forma consolidated statement of financial position. The pro forma adjustments
and allocations of the purchase price are based in part on estimates of the fair value of assets
acquired and liabilities to be assumed. The final purchase price allocation will be completed after
asset and liability valuations are finalized as of the date of the completion of the acquisition. The
actual fair values of the assets and liabilities will be determined as of the date of acquisition and
may differ materially from the amounts disclosed in the assumed pro forma purchase price
allocation because of changes in fair value of the assets and liabilities up to the date of
acquisition, and as further analysis is completed.

3
PATRIOT ONE TECHNOLOGIES, INC.
(formerly Clear Mountain Resources Corp.)
Notes to the Pro Forma Consolidated Statement of Financial Position
August 31, 2016
(Expressed in Canadian dollars)
(Unaudited)

Consequently, the actual allocation of the purchase price may result in different adjustments than
those in the unaudited pro forma consolidated statement of financial position. Similarly, the
calculation and allocation of the purchase price has been prepared on a preliminary basis and is
subject to change between the time such preliminary estimations were made and closing as a
result of a number of factors.

The unaudited pro forma consolidated statement of financial position has been prepared in
accordance with the Issuers and Patriots accounting policies, as disclosed in the Issuers
audited financial statements for the period ended May 31, 2016 and Patriots audited financial
statements for the period from incorporation on March 7, 2016 to July 31, 2016. There are no
material differences in accounting policies between the Issuer and Patriot.

The unaudited pro forma consolidated statement of financial position has been compiled from:

a) information derived from the following financial statements, which are prepared in accordance
with International Financial Reporting Standards (IFRS), as issued by the International
Accounting Standards Board, and included elsewhere in the Filing Statement:

i. The Issuers audited consolidated financial statements as at May 31, 2016 and the
year then ended; and
ii. Patriots audited consolidated financial statements for the period from incorporation
on March 7, 2016 to July 31, 2016 and for the period then ended; and

b) Adjustments based on transactions affecting share capital and cash of the Issuer that took
place after May 31, 2016 and before August 31, 2016 (note 3 (e)); and

c) Adjustments based on transactions affecting share capital and cash of Patriot that took place
after July 31, 2016 and before August 31, 2016 (notes 3 (f) and 3 (g)).

It is managements opinion that the unaudited pro-forma consolidated statement of financial

position includes all adjustments required for the fair presentation, in all material respects, of the
transaction described in note 3 in accordance with IFRS.

2. Summary of Proposed Transaction

Management of the Issuer has identified the Acquisition as a transaction mutually beneficial for
both the Issuer and Patriot. Pursuant to the Acquisition, the Issuer will acquire 100% of the issued
and outstanding securities of Patriot and the resulting issuer will be engaged in Patriots business
after the Acquisition. The terms of the Acquisition were determined pursuant to arm's length
negotiations between the Issuer and Patriot.

The Acquisition will be completed by way of a securities exchange pursuant to Policy 5.2
Changes of Business and Reverse Takeovers, of the Exchange, and pursuant to the terms of the
Acquisition Agreement, being primarily that the Issuer will issue Common Shares to the
shareholders of Patriot, in exchange for the delivery to the Issuer of all of the issued and
outstanding Patriot Shares at an exchange ratio of 1 Issuer Common Share (22,959,925 total
Common Shares at a deemed issue price of $0.15 per Common Share) for each Patriot Share.
Each shareholder of Patriot shall be entitled to receive its pro rata proportion of such Common

4
PATRIOT ONE TECHNOLOGIES, INC.
(formerly Clear Mountain Resources Corp.)
Notes to the Pro Forma Consolidated Statement of Financial Position
August 31, 2016
(Expressed in Canadian dollars)
(Unaudited)

Shares based on the number of Patriot Shares exchanged. No fractional Common Shares will be
issued. Outstanding convertible securities of Patriot will be exchanged on equivalent terms.

The Acquisition is subject to a number of conditions, including the execution of the Acquisition
Agreement, completion of satisfactory due diligence, completion of the Private Placement, and
the approval of the Acquisition and the Private Placement by each of the Exchange and the board
of directors and shareholders of each of the Issuer and Patriot.

Furthermore, the Acquisition Agreement contains a condition precedent for the benefit of Patriot
and the shareholders of Patriot that the Issuer must have net assets of no less than $2,000,000
on closing of the Acquisition and the Private Placement.

3. Pro Forma Assumptions and Adjustments

The pro forma consolidated statement of financial position was prepared based on the following
assumptions:

a) The unaudited pro forma consolidated statement of financial position gives effect to the
Transaction as if it had occurred on August 31, 2016.

b) Upon the completion of the Transaction, each holder of Patriots common shares will receive,
for each common share held, one Issuer common share;

The Transactions accounting has been assessed in accordance with IFRS 3 Business
Combinations, and it has been determined that Patriot is deemed to be the accounting
acquirer. The Transaction does not fulfill the requirements to be accounted for as a business
combination; therefore, the Transaction will be accounted for as an asset acquisition with
Patriot as the continuing entity.

c) Transaction with Patriot

Estimated common share fair value $ 1,629,332

Total consideration $ 1,629,332

Identifiable fair value of net assets of the Issuer acquired:

Cash $ 704,593
Other assets 7,792
Accounts payable (540,766)
$ 171,619

Excess of consideration over net assets acquired $ 1,457,713

The estimated fair value of the Issuer shares of $1,629,332 is based on an estimated fair
value of approximately $0.15 per share as at August 31, 2016 as per the terms of the
intended non-brokered private placement of the Issuer to be completed in anticipation of the
Transaction (note 3(e)). The estimated fair value of the consideration is $1,457,713 greater
than the fair value of the net assets acquired which will be recorded as a transaction cost.

5
PATRIOT ONE TECHNOLOGIES, INC.
(formerly Clear Mountain Resources Corp.)
Notes to the Pro Forma Consolidated Statement of Financial Position
August 31, 2016
(Expressed in Canadian dollars)
(Unaudited)

d) In connection with the Transaction, the Issuer intends to complete a non-brokered Private
Placement for the sale of up to 15,333,333 Units at an issue price of $0.15 per Unit for gross
proceeds of $2,300,000. Estimated completion costs of the Private Placement are $100,000.

e) On June 27, 2016, the Issuer completed a non-brokered private placement of 9,505,000 units
at an issue price of $0.075 per unit, for aggregate gross proceeds of $712,875 of which
$10,000 was received in advance. Each unit is comprised of one common share and one
common share purchase warrant entitling the holder to acquire one common share of the
Issuer at a price of $0.20 until June 27, 2019. The Issuer also issued 133,800 finders units
with the same terms as that of the private placement noted above.

f) On August 22, 2016, Patriot completed a non-brokered private placement of 5,074,924 units
at an issue price of $0.15 per unit, for aggregate gross proceeds of $761,239 of which
$298,240 was received in advance. Each unit is comprised of one common share and one
common share purchase warrant entitling the holder to acquire one common share of Patriot
at a price of $0.30 for a period of two years.

g) Patriot collected $80,875 of outstanding share subscriptions after July 31, 2016 and before
August 31, 2016.

4. Share Capital
Share capital as at August 31, 2016 in the unaudited pro forma consolidated statement of
financial position is comprised of the following:
Number of Share
shares capital

Authorized:
Unlimited common shares without par value

Issued:
Share capital of the Issuer as at May 31, 2016, opening balance 1,223,416 $ 183,512
Issuance of common shares (Note 3 (e)) 9,505,000 1,425,750
Issuance of common shares to finders (Note 3 (e)) 133,800 20,070

Share capital of the Issuer as at August 31, 2016 10,862,216 1,629,332

Adjustments to record the transactions:

Shares issued to Patriot shareholders (Note 3 (c)) 22,959,925 1,236,864
Shares issued pursuant to Concurrent Financing (Note 3 (d)) 15,333,333 2,300,000
Share issuance costs (Note 3 (d)) - (100,000)

49,155,474 $ 5,066,196

5. Pro Forma Effective Income Tax Rate

The pro-forma effective income tax rate that will be applicable to the operations of the Issuer is
26%.